G.R. No.

106719 September 21, 1993

DRA. BRIGIDA S. BUENASEDA, Lt. Col. ISABELO BANEZ, JR., ENGR. CONRADO REY MATIAS, Ms. CORA S. SOLIS and Ms.
ENYA N. LOPEZ, petitioners,
vs.
SECRETARY JUAN FLAVIER, Ombudsman CONRADO M. VASQUEZ, and NCMH NURSES ASSOCIATION, represented by
RAOULITO GAYUTIN, respondents.

Renato J. Dilag and Benjamin C. Santos for petitioners.

Danilo C. Cunanan for respondent Ombudsman.

Crispin T. Reyes and Florencio T. Domingo for private respondent.

QUIASON, J.:

This is a Petition for Certiorari, Prohibition and Mandamus, with Prayer for Preliminary Injunction or Temporary Restraining
Order, under Rule 65 of the Revised Rules of Court.

Principally, the petition seeks to nullify the Order of the Ombudsman dated January 7, 1992, directing the preventive
suspension of petitioners,
Dr. Brigida S. Buenaseda, Chief of Hospital III; Isabelo C. Banez, Jr., Administrative Officer III; Conrado Rey Matias, Technical
Assistant to the Chief of Hospital; Cora C. Solis, Accountant III; and Enya N. Lopez, Supply Officer III, all of the National
Center for Mental Health. The petition also asks for an order directing the Ombudsman to disqualify Director Raul Arnaw
and Investigator Amy de Villa-Rosero, of the Office of the Ombudsman, from participation in the preliminary investigation
of the charges against petitioner (Rollo, pp. 2-17; Annexes to Petition, Rollo, pp. 19-21).

The questioned order was issued in connection with the administrative complaint filed with the Ombudsman (OBM-ADM-0-
91-0151) by the private respondents against the petitioners for violation of the Anti-Graft and Corrupt Practices Act.

According to the petition, the said order was issued upon the recommendation of Director Raul Arnaw and Investigator Amy
de Villa-Rosero, without affording petitioners the opportunity to controvert the charges filed against them. Petitioners had
sought to disqualify Director Arnaw and Investigator Villa-Rosero for manifest partiality and bias (Rollo, pp. 4-15).

On September 10, 1992, this Court required respondents' Comment on the petition.

On September 14 and September 22, 1992, petitioners filed a "Supplemental Petition (Rollo, pp. 124-130); Annexes to
Supplemental Petition; Rollo pp. 140-163) and an "Urgent Supplemental Manifestation" (Rollo,
pp. 164-172; Annexes to Urgent Supplemental Manifestation; Rollo, pp. 173-176), respectively, averring developments that
transpired after the filing of the petition and stressing the urgency for the issuance of the writ of preliminary injunction or
temporary restraining order.

On September 22, 1992, this Court ". . . Resolved to REQUIRE the respondents to MAINTAIN in the meantime, the STATUS
QUO pending filing of comments by said respondents on the original supplemental manifestation" (Rollo, p. 177).

On September 29, 1992, petitioners filed a motion to direct respondent Secretary of Health to comply with the Resolution
dated September 22, 1992 (Rollo, pp. 182-192, Annexes, pp. 192-203). In a Resolution dated October 1, 1992, this Court
required respondent Secretary of Health to comment on the said motion.

On September 29, 1992, in a pleading entitled "Omnibus Submission," respondent NCMH Nurses Association submitted its
Comment to the Petition, Supplemental Petition and Urgent Supplemental Manifestation. Included in said pleadings were
the motions to hold the lawyers of petitioners in contempt and to disbar them (Rollo, pp. 210-267). Attached to the
"Omnibus Submission" as annexes were the orders and pleadings filed in Administrative Case No. OBM-ADM-0-91-1051 against
petitioners (Rollo, pp. 268-480).
The Motion for Disbarment charges the lawyers of petitioners with:
(1) unlawfully advising or otherwise causing or inducing their clients petitioners Buenaseda, et al., to openly defy, ignore,
disregard, disobey or otherwise violate, maliciously evade their preventive suspension by Order of July 7, 1992 of the
Ombudsman . . ."; (2) "unlawfully interfering with and obstructing the implementation of the said order (Omnibus
Submission, pp. 50-52; Rollo, pp. 259-260); and (3) violation of the Canons of the Code of Professional Responsibility and of
unprofessional and unethical conduct "by foisting blatant lies, malicious falsehood and outrageous deception" and by
committing subornation of perjury, falsification and fabrication in their pleadings (Omnibus Submission, pp. 52-54; Rollo,
pp. 261-263).

On November 11, 1992, petitioners filed a "Manifestation and Supplement to 'Motion to Direct Respondent Secretary of
Health to Comply with 22 September 1992 Resolution'" (Manifestation attached to Rollo without pagination between pp. 613
and 614 thereof).

On November 13, 1992, the Solicitor General submitted its Comment dated November 10, 1992, alleging that: (a) "despite
the issuance of the September 22, 1992 Resolution directing respondents to maintain the status quo, respondent Secretary
refuses to hold in abeyance the implementation of petitioners' preventive suspension; (b) the clear intent and spirit of the
Resolution dated September 22, 1992 is to hold in abeyance the implementation of petitioners' preventive suspension,
the status quo obtaining the time of the filing of the instant petition; (c) respondent Secretary's acts in refusing to hold in
abeyance implementation of petitioners' preventive suspension and in tolerating and approving the acts of Dr. Abueva, the
OIC appointed to replace petitioner Buenaseda, are in violation of the Resolution dated September 22, 1992; and
(d) therefore, respondent Secretary should be directed to comply with the Resolution dated September 22, 1992
immediately, by restoring the status quo ante contemplated by the aforesaid resolution" (Comment attached
toRollo without paginations between pp. 613-614 thereof).

In the Resolution dated November 25, 1992, this Court required respondent Secretary to comply with the aforestated status
quo order, stating inter alia, that:

It appearing that the status quo ante litem motam, or the last peaceable uncontested status which
preceded the present controversy was the situation obtaining at the time of the filing of the petition at
bar on September 7, 1992 wherein petitioners were then actually occupying their respective positions,
the Court hereby ORDERS that petitioners be allowed to perform the duties of their respective positions
and to receive such salaries and benefits as they may be lawfully entitled to, and that respondents and/or
any and all persons acting under their authority desist and refrain from performing any act in violation of
the aforementioned Resolution of September 22, 1992 until further orders from the Court (Attached
to Rollo after p. 615 thereof).

On December 9, 1992, the Solicitor General, commenting on the Petition, Supplemental Petition and Supplemental
Manifestation, stated that (a) "The authority of the Ombudsman is only to recommend suspension and he has no direct
power to suspend;" and (b) "Assuming the Ombudsman has the power to directly suspend a government official or
employee, there are conditions required by law for the exercise of such powers; [and] said conditions have not been met in
the instant case" (Attached to Rollo without pagination).

In the pleading filed on January 25, 1993, petitioners adopted the position of the Solicitor General that the Ombudsman can
only suspend government officials or employees connected with his office. Petitioners also refuted private respondents'
motion to disbar petitioners' counsel and to cite them for contempt (Attached to Rollowithout pagination).

The crucial issue to resolve is whether the Ombudsman has the power to suspend government officials and employees
working in offices other than the Office of the Ombudsman, pending the investigation of the administrative complaints filed
against said officials and employees.

In upholding the power of the Ombudsman to preventively suspend petitioners, respondents (Urgent Motion to LiftStatus
Quo, etc, dated January 11, 1993, pp. 10-11), invoke Section 24 of R.A. No. 6770, which provides:

Sec. 24. Preventive Suspension. The Ombudsman or his Deputy may preventively suspend any officer or
employee under his authority pending an investigation, if in his judgment the evidence of guilt is strong,
and (a) the charge against such officer or employee involves dishonesty, oppression or grave misconduct
or neglect in the performance of duty; (b) the charge would warrant removal from the service; or (c) the
respondent's continued stay in office may prejudice the case filed against him.

The preventive suspension shall continue until the case is terminated by the Office of Ombudsman but not
more than six months, without pay, except when the delay in the disposition of the case by the Office of
 the Ombudsman is due to the fault, negligence or petition of the respondent, in which case the period of
such delay shall not be counted in computing the period of suspension herein provided.

Respondents argue that the power of preventive suspension given the Ombudsman under Section 24 of R.A. No. 6770 was
contemplated by Section 13 (8) of Article XI of the 1987 Constitution, which provides that the Ombudsman shall exercise
such other power or perform such functions or duties as may be provided by law."

On the other hand, the Solicitor General and the petitioners claim that under the 1987 Constitution, the Ombudsman can
only recommend to the heads of the departments and other agencies the preventive suspension of officials and employees
facing administrative investigation conducted by his office. Hence, he cannot order the preventive suspension himself.

They invoke Section 13(3) of the 1987 Constitution which provides that the Office of the Ombudsman shall haveinter
alia the power, function, and duty to:

Direct the officer concerned to take appropriate action against a public official or employee at fault, and
recommend his removal, suspension, demotion, fine, censure or prosecution, and ensure compliance
therewith.

The Solicitor General argues that under said provision of the Constitutions, the Ombudsman has three distinct powers,
namely: (1) direct the officer concerned to take appropriate action against public officials or employees at fault; (2)
recommend their removal, suspension, demotion fine, censure, or prosecution; and (3) compel compliance with the
recommendation (Comment dated December 3, 1992, pp. 9-10).

The line of argument of the Solicitor General is a siren call that can easily mislead, unless one bears in mind that what the
Ombudsman imposed on petitioners was not a punitive but only a preventive suspension.

When the constitution vested on the Ombudsman the power "to recommend the suspension" of a public official or
employees (Sec. 13 [3]), it referred to "suspension," as a punitive measure. All the words associated with the word
"suspension" in said provision referred to penalties in administrative cases, e.g. removal, demotion, fine, censure. Under
the rule of Noscitor a sociis, the word "suspension" should be given the same sense as the other words with which it is
associated. Where a particular word is equally susceptible of various meanings, its correct construction may be made
specific by considering the company of terms in which it is found or with which it is associated (Co Kim Chan v. Valdez Tan
Keh, 75 Phil. 371 [1945]; Caltex (Phils.) Inc. v. Palomar, 18 SCRA 247 [1966]).

Section 24 of R.A. No. 6770, which grants the Ombudsman the power to preventively suspend public officials and employees
facing administrative charges before him, is a procedural, not a penal statute. The preventive suspension is imposed after
compliance with the requisites therein set forth, as an aid in the investigation of the administrative charges.

Under the Constitution, the Ombudsman is expressly authorized to recommend to the appropriate official the discipline or
prosecution of erring public officials or employees. In order to make an intelligent determination whether to recommend
such actions, the Ombudsman has to conduct an investigation. In turn, in order for him to conduct such investigation in an
expeditious and efficient manner, he may need to suspend the respondent.

The need for the preventive suspension may arise from several causes, among them, the danger of tampering or destruction
of evidence in the possession of respondent; the intimidation of witnesses, etc. The Ombudsman should be given the
discretion to decide when the persons facing administrative charges should be preventively suspended.

Penal statutes are strictly construed while procedural statutes are liberally construed (Crawford, Statutory Construction,
Interpretation of Laws, pp. 460-461; Lacson v. Romero, 92 Phil. 456 [1953]). The test in determining if a statute is penal is
whether a penalty is imposed for the punishment of a wrong to the public or for the redress of an injury to an individual (59
Corpuz Juris, Sec. 658; Crawford, Statutory Construction, pp. 496-497). A Code prescribing the procedure in criminal cases
is not a penal statute and is to be interpreted liberally (People v. Adler, 140 N.Y. 331; 35 N.E. 644).

The purpose of R.A. No. 6770 is to give the Ombudsman such powers as he may need to perform efficiently the task
committed to him by the Constitution. Such being the case, said statute, particularly its provisions dealing with procedure,
should be given such interpretation that will effectuate the purposes and objectives of the Constitution. Any interpretation
that will hamper the work of the Ombudsman should be avoided.
A statute granting powers to an agency created by the Constitution should be liberally construed for the advancement of
the purposes and objectives for which it was created (Cf. Department of Public Utilities v. Arkansas Louisiana Gas. Co., 200
Ark. 983, 142 S.W. (2d) 213 [1940]; Wallace v. Feehan, 206 Ind. 522, 190 N.E., 438 [1934]).

In Nera v. Garcia, 106 Phil. 1031 [1960], this Court, holding that a preventive suspension is not a penalty, said:

Suspension is a preliminary step in an administrative investigation. If after such investigation, the charges
are established and the person investigated is found guilty of acts warranting his removal, then he is
removed or dismissed. This is the penalty.

To support his theory that the Ombudsman can only preventively suspend respondents in administrative cases who are
employed in his office, the Solicitor General leans heavily on the phrase "suspend any officer or employee under his
authority" in Section 24 of R.A. No. 6770.

The origin of the phrase can be traced to Section 694 of the Revised Administrative Code, which dealt with preventive
suspension and which authorized the chief of a bureau or office to "suspend any subordinate or employee in his bureau or
under his authority pending an investigation . . . ."

Section 34 of the Civil Service Act of 1959 (R.A. No. 2266), which superseded Section 694 of the Revised Administrative
Code also authorized the chief of a bureau or office to "suspend any subordinate officer or employees, in his bureau or
under his authority."

However, when the power to discipline government officials and employees was extended to the Civil Service Commission
by the Civil Service Law of 1975 (P.D. No. 805), concurrently with the President, the Department Secretaries and the heads
of bureaus and offices, the phrase "subordinate officer and employee in his bureau" was deleted, appropriately leaving the
phrase "under his authority." Therefore, Section 41 of said law only mentions that the proper disciplining authority may
preventively suspend "any subordinate officer or employee under his authority pending an investigation . . ." (Sec. 41).

The Administrative Code of 1987 also empowered the proper disciplining authority to "preventively suspend any subordinate
officer or employee under his authority pending an investigation" (Sec. 51).

The Ombudsman Law advisedly deleted the words "subordinate" and "in his bureau," leaving the phrase to read "suspend any
officer or employee under his authority pending an investigation . . . ." The conclusion that can be deduced from the
deletion of the word "subordinate" before and the words "in his bureau" after "officer or employee" is that the Congress
intended to empower the Ombudsman to preventively suspend all officials and employees under investigation by his office,
irrespective of whether they are employed "in his office" or in other offices of the government. The moment a criminal or
administrative complaint is filed with the Ombudsman, the respondent therein is deemed to be "in his authority" and he can
proceed to determine whether said respondent should be placed under preventive suspension.

In their petition, petitioners also claim that the Ombudsman committed grave abuse of discretion amounting to lack of
jurisdiction when he issued the suspension order without affording petitioners the opportunity to confront the charges
against them during the preliminary conference and even after petitioners had asked for the disqualification of Director
Arnaw and Atty. Villa-Rosero (Rollo, pp. 6-13). Joining petitioners, the Solicitor General contends that
assuming arguendo that the Ombudsman has the power to preventively suspend erring public officials and employees who
are working in other departments and offices, the questioned order remains null and void for his failure to comply with the
requisites in Section 24 of the Ombudsman Law (Comment dated December 3, 1992, pp. 11-19).

Being a mere order for preventive suspension, the questioned order of the Ombudsman was validly issued even without a
full-blown hearing and the formal presentation of evidence by the parties. In Nera, supra, petitioner therein also claimed
that the Secretary of Health could not preventively suspend him before he could file his answer to the administrative
complaint. The contention of petitioners herein can be dismissed perfunctorily by holding that the suspension meted out
was merely preventive and therefore, as held in Nera, there was "nothing improper in suspending an officer pending his
investigation and before tho charges against him are heard . . . (Nera v. Garcia., supra).

There is no question that under Section 24 of R.A. No. 6770, the Ombudsman cannot order the preventive suspension of a
respondent unless the evidence of guilt is strong and (1) the charts against such officer or employee involves dishonesty,
oppression or grave misconduct or neglect in the performance of duty; (2) the charge would warrant removal from the
service; or (3) the respondent's continued stay in office may prejudice the case filed against him.

The same conditions for the exercise of the power to preventively suspend officials or employees under investigation were
found in Section 34 of R.A. No. 2260.
The import of the Nera decision is that the disciplining authority is given the discretion to decide when the evidence of
guilt is strong. This fact is bolstered by Section 24 of R.A. No. 6770, which expressly left such determination of guilt to the
"judgment" of the Ombudsman on the basis of the administrative complaint. In the case at bench, the Ombudsman issued
the order of preventive suspension only after: (a) petitioners had filed their answer to the administrative complaint and the
"Motion for the Preventive Suspension" of petitioners, which incorporated the charges in the criminal complaint against
them (Annex 3, Omnibus Submission, Rollo, pp. 288-289; Annex 4, Rollo,
pp. 290-296); (b) private respondent had filed a reply to the answer of petitioners, specifying 23 cases of harassment by
petitioners of the members of the private respondent (Annex 6, Omnibus Submission, Rollo, pp. 309-333); and (c) a
preliminary conference wherein the complainant and the respondents in the administrative case agreed to submit their list
of witnesses and documentary evidence.

Petitioners herein submitted on November 7, 1991 their list of exhibits (Annex 8 of Omnibus Submission, Rollo, pp. 336-337)
while private respondents submitted their list of exhibits (Annex 9 of Omnibus Submission, Rollo, pp. 338-348).

Under these circumstances, it can not be said that Director Raul Arnaw and Investigator Amy de Villa-Rosero acted with
manifest partiality and bias in recommending the suspension of petitioners. Neither can it be said that the Ombudsman had
acted with grave abuse of discretion in acting favorably on their recommendation.

The Motion for Contempt, which charges the lawyers of petitioners with unlawfully causing or otherwise inducing their
clients to openly defy and disobey the preventive suspension as ordered by the Ombudsman and the Secretary of Health can
not prosper (Rollo, pp. 259-261). The Motion should be filed, as in fact such a motion was filed, with the Ombudsman. At
any rate, we find that the acts alleged to constitute indirect contempt were legitimate measures taken by said lawyers to
question the validity and propriety of the preventive suspension of their clients.

On the other hand, we take cognizance of the intemperate language used by counsel for private respondents hurled against
petitioners and their counsel (Consolidated: (1) Comment on Private Respondent" "Urgent Motions, etc.;
(2) Adoption of OSG's Comment; and (3) Reply to Private Respondent's Comment and Supplemental Comment, pp. 4-5).

A lawyer should not be carried away in espousing his client's cause. The language of a lawyer, both oral or written, must be
respectful and restrained in keeping with the dignity of the legal profession and with his behavioral attitude toward his
brethren in the profession (Lubiano v. Gordolla, 115 SCRA 459 [1982]). The use of abusive language by counsel against the
opposing counsel constitutes at the same time a disrespect to the dignity of the court of justice. Besides, the use of
impassioned language in pleadings, more often than not, creates more heat than light.

The Motion for Disbarment (Rollo, p. 261) has no place in the instant special civil action, which is confined to questions of
jurisdiction or abuse of discretion for the purpose of relieving persons from the arbitrary acts of judges and quasi-judicial
officers. There is a set of procedure for the discipline of members of the bar separate and apart from the present special
civil action.

WHEREFORE, the petition is DISMISSED and the Status quo ordered to be maintained in the Resolution dated September 22,
1992 is LIFTED and SET ASIDE.

SO ORDERED.

Narvasa, C.J., Cruz, Padilla, Bidin, Grio-Aquino, Regalado, Davide, Jr., Romero, Nocon, Melo, Puno and Vitug, JJ.,
concur.

Feliciano, J., is on leave.

Separate Opinions

BELLOSILLO, J., concurring:

I agree that the Ombudsman has the authority, under Sec. 24 of R.A.
No. 6770, to preventively suspend any government official or employee administratively charged before him pending the
investigation of the complaint, the reason being that respondent's continued stay in office may prejudice the prosecution of
the case.

However, in the case before us, I am afraid that the facts thus far presented may not provide adequate basis to reasonably
place petitioners under preventive suspension. For, it is not enough to rule that the Ombudsman has authority to suspend
petitioners preventively while the case is in progress before him. Equally important is the determination whether it is
necessary to issue the preventive suspension under the circumstances. Regretfully, I cannot see any sufficient basis to
justify the preventive suspension. That is why, I go for granting oral argument to the parties so that we can truthfully
determine whether the preventive suspension of respondents are warranted by the facts. We may be suspending key
government officials and employees on the basis merely of speculations which may not serve the ends of justice but which,
on the other hand, deprive them of their right to due process. The simultaneous preventive suspension of top officials and
employees of the National Center for Mental Health may just disrupt, the hospital's normal operations, much to the
detriment of public service. We may safely assume that it is not easy to replace them in their respective functions as those
substituting them may be taking over for the first time. The proper care of mental patients may thus be unduly jeopardized
and their lives and limbs imperilled.

I would be amenable to holding oral argument to hear the parties if only to have enough factual and legal bases to justify
the preventive suspension of petitioners.
G.R. No. L-8238 May 25, 1955
CESAR M. CARANDANG, petitioner,
vs.
VICENTE SANTIAGO, in his capacity as Judge of the
Court of First Instance of Manila and TOMAS VALENTON,
Sr. and TOMAS VALENTON, Jr., respondents.
S. Mejia-Panganiban for petitioner.
Evangelista and Valenton for respondents.
LABRADOR, J.:
This is a petition for certiorari against Honorable Vicente
Santiago, Judge of the Court of First Instance of Manila,
to annul his order in Civil Case No. 21173, entitled Cesar
M. Carandang vs. Tomas Valenton, Sr. et al., suspending
the trial of said civil case to await the result of the
criminal Case No. 534, Court of First Instance of
Batangas. In this criminal case, Tomas Valenton, Jr. was
found guilty of the crime of frustrated homicide
committed against the person of Cesar Carandang,
petitioner herein. Tomas Valenton, Jr. appealed the
decision to the Court of Appeals where the case is now
pending.
The decision of the Court of First Instance of Batangas in
the criminal case was rendered on September 1, 1953
and petitioner herein filed a complaint in the Court of
First Instance of Manila to recover from the defendant
Tomas Valenton, Jr. and his parents, damages, both
actual and moral, for the bodily injuries received by him
on occasion of the commission of the crime of frustrated
homicide by said accused Tomas Valenton Jr. After the
defendants submitted their answer, they presented a
motion to suspend the trial of the civil case, pending the
termination of the criminal case against Tomas Valenton,
Jr. in the Court of Appeals. The judge ruled that the trial
of the civil action must await the result of the criminal
case on appeal. A motion for reconsideration was
submitted, but the court denied the same; hence this
petition for certiorari.
Petitioner invokes Article 33 of the new Civil Code, which
is as follows:
In cases of defamation, fraud and physical
injuries, a civil action for damages, entirely
separate and distinct from the criminal action,
may be brought by the injured party. Such civil
action shall proceed independently of the
criminal prosecution, and shall require only a
preponderance of evidence.
The Code Commission itself states that the civil action
allowed (under Article 33) is similar to the action in tort
for libel or slander and assault and battery under
American law (Reports of the Code Commission, pp. 46-
47). But respondents argue that the term "physical
injuries" is used to designate a specific crime defined in
the Revised Penal Code, and therefore said term should
be understood in its peculiar and technical sense, in
accordance with the rules statutory construction (Sec.
578, 59 C. J. 979).
In the case at bar, the accused was charged with and
convicted of the crime of frustrated homicide, and while
it was found in the criminal case that a wound was
inflicted by the defendant on the body of the petitioner
herein Cesar Carandang, which wound is bodily injury,
the crime committed is not physical injuries but
frustrated homicide, for the reason that the infliction of
the wound is attended by the intent to kill. So the
question arises whether the term "physical injuries" used
in Article 33 means physical injuries in the Revised Penal
Code only, or any physical injury or bodily injury,
whether inflicted with intent to kill or not.
The Article in question uses the words "defamation",
"fraud" and "physical injuries." Defamation and fraud are
used in their ordinary sense because there are no specific
provisions in the Revised Penal Code using these terms as
means of offenses defined therein, so that these two
terms defamation and fraud must have been used not to
impart to them any technical meaning in the laws of the
Philippines, but in their generic sense. With this apparent
circumstance in mind, it is evident that the term
"physical injuries" could not have been used in its specific
sense as a crime defined in the Revised Penal Code, for it
is difficult to believe that the Code Commission would
have used terms in the same article some in their
general and another in its technical sense. In other
words, the term "physical injuries" should be understood
to mean bodily injury, not the crime of physical injuries,
because the terms used with the latter are general
terms. In any case the Code Commission recommended
that the civil for assault and battery in American Law,
and this recommendation must have been accepted by
the Legislature when it approved the article intact as
recommended. If the intent has been to establish a civil
action for the bodily harm received by the complainant
similar to the civil action for assault and battery, as the
Code Commission states, the civil action should lie
whether the offense committed is that of physical
injuries, or frustrated homicide, or attempted homicide,
or even death.
A parallel case arose in that of Bixby vs Sioux City, 164 N.
W. 641, 643. In that case, the appellant sought to take
his case from the scope of the statute by pointing out
that inasmuch as notice is required where the cause of
action is founded on injury to the person, it has no
application when the damages sought are for the death
of the person. The court ruled that a claim to recover for
death resulting from personal injury is as certainly
"founded on injury to the person" as would be a claim to
recover damages for a non-fatal injury resulting in a
crippled body.
For the foregoing considerations, we find that the
respondent judge committed an error in suspending the
trial of the civil case, and his order to that affect is
hereby revoked, and he is hereby ordered to proceed
with the trial of said civil case without awaiting the
result of the pending criminal case. With costs against
the defendant-appellees.
Pablo, Acting C.J., Bengzon, Padilla, Montemayor,
Reyes, A., Bautista Angelo, Concepcion and Reyes,
J.B.L., JJ.,concur.
G.R. No. L-68709 July 19, 1985

NAPOLEON E. SANCIANGCO, petitioner,

vs.
THE HONORABLE JOSE A. ROO Minister, Ministry of Local Government; THE SANGGUNIANG PANLUNGSOD OF OZAMIZ
CITY; THE HONORABLE BENJAMIN A. FUENTES, Vice Mayor of Ozamiz City and Presiding Officer of the Sangguniang
Panlungsod of Ozamiz City; THE HONORABLE ANTONIO G. CABALLERO, JESUS S. ANONAT, MANUEL T. CORTES, IRENE S.
LUANSING, REMEDIOS J. RAMIRO, DOMINADOR B. BORJE, FILOMENO L. ROMERO, FLORENCIO L. GARCIA, and HARRY S.
OAMINAL Members, Sangguniang Panlungsod of Ozamiz City, respondents.

Abraham F. Sarmiento and Mariano Sarmiento for petitioner.

The Solicitor General for respondents.

MELENCIO-HERRERA, J.:

The sole issue for determination in this Petition for Certiorari, Prohibition and mandamus with Preliminary Injunction
and/or Restraining Order is whether or not an appointive member of the Sangguniang Panlungsod, who ran for the position
of Mambabatas Pambansa in the elections of May 14, 1984, should be considered as resigned or on forced leave of absence
upon the filing of his Certificate of Candidacy. The resolution of the controversy hinges on the construction to be given to
Section 13 of Batas Pambansa Blg, 697, which provides as follows:

Sec. 13. Effects of filing of certificate of candidacy.

(1) Any person holding a public appointive office or position, including active officers and members of
the Armed Forces of the Philippines and the Integrated National Police, as well as officials and employees
of government-owned and government-controlled corporations and their subsidiaries,shall ipso facto
cease in office or position as of the time he filed his certificate of candidacy: Provided, however, that
the Prime Minister, the Deputy Prime Minister, the Members of the Cabinet, and the Deputy Ministers shall
continue in the offices they presently hold notwithstanding the filing of their certificates of candidacy.

(2) Governors, mayors, members of the various sanggunians or barangay officials shall, upon filing
certificate of candidacy be considered on forced leave of absence from office. (Emphasis supplied)

Petitioner was elected Barangay Captain of Barangay Sta. Cruz, Ozamiz City, in the May 17, 1982 Barangay elections. Later,
he was elected President of the Association of Barangay Councils (ABC) of Ozamiz City by the Board of Directors of the said
Association. As the President of the Association, petitioner was appointed by the President of the Philippines as a member
of the City's Sangguniang Panlungsod.

On March 27, 1984, petitioner filed his Certificate of Candidacy for the May 14, 1984 Batasan Pambansa elections for
Misamis Occidental under the banner of the Mindanao Alliance. He was not successful in the said election.

Invoking Section 13(2), Article 5 of Batas Pambansa Blg. 697 (supra), petitioner informed respondent Vice-Mayor Benjamin
A. Fuentes, Presiding Officer of the Sangguniang Panlungsod, that he was resuming his duties as member of that body. The
matter was elevated to respondent Minister of Local Government Jose A. Rono who ruled that since petitioner is an
appointive official, he is deemed to have resigned from his appointive position upon the filing of his Certificate of
Candidacy.

Petitioner impugns said ruling on the ground that since Section 13(2) of Batasan Pambansa Blg. 697 makes no distinction
between elective and appointive officials, the legislative intent is clear that even appointive Barangay officials are deemed
also covered by the said provision.

There is no question that petitioner holds a public appointive position. He was appointed by the President as a member of
the City's Sangguniang Panlungsod by virtue of his having been elected President of the Association of Barangay Councils.
This was pursuant to Section 3, paragraph 1 of Batas Pambansa Blg. 51 (An Act Providing for the elective or Appointive
Positions in Various Local Governments and for Other Purposes), which provides that:

Sec. 3. Cities. There shall be in each city such elective local officials as provided in their respective
charters, including the city mayor, the city vice-mayor, and the elective members of the sangguniang
 panglungsod, all of whom shall be elected by the qualified voters in the city. In addition thereto, there
shall be appointive sangguniang panglungsod members consisting of the president of the city association
of barangay councils, the president of the city federation of the kabataang barangay, and one
representative each from the agricultural and industrial labor sectors who shall be appointed by, the
president (Prime Minister) whenever, as determined by the sangguniang panglungsod, said sectors are of
sufficient number in the city to warrant representation. (emphasis supplied)

The appointive character of petitioner's position was reiterated in Section 173 of the Local Government Code (B.P. Blg.
337), reading as follows:

Sec 173. Composition and Compensation. (1) the sangguniang panlungsod, as the legislative body of the
city, shall be composed of the vice-mayor, as presiding officer, the elected sangguniang panlungsod
members, and the members who may be appointed by the President of the Philippines consisting of the
presidents of the Katipunan panglungsod ng mga barangay and the Kabataang barangay, city federation.
(Emphasis supplied)

Since petitioner is unquestionably an appointive member of the Sangguniang Panlungsod of Ozamiz City, he is deemed to
have ipso facto ceased to be such member when he filed his certificate of candidacy for the May 14, 1984 Batasan
elections.

Petitioner avers, however, that the fact that he is merely an appointive member of the Sangguniang Panlungsod of Ozamiz
City "is really of no moment since subsection 2, Section 13. B.P. 697, makes no distinction between elective and appointive
officials, and at any rate, legislative intent makes clear that appointive officials are deemed covered by the provision.

Although it may be that Section 13(2), B.P. Blg. 697, admits of more than one construction, taking into consideration the
nature of the positions of the officials enumerated therein, namely, governors, mayors, members of the various sanggunians
or barangay officials, the legislative intent to distinguish between elective positions in section 13(2), as contrasted to
appointive positions in section 13(l) under the all-encompassing clause reading "any person holding public appointive office
or position," is clear. It is a rule of statutory construction that "when the language of a particular section of a statute admits
of more than one construction, that construction which gives effect to the evident purpose and object sought to be
attained by the enactment of the statute as a whole, must be followed." 1

A statute's clauses and phrases should not be taken as detached and isolated expressions, but the whole
and every part thereof must be considered in fixing the meaning of any of its parts. 2

The legislative intent to cover public appointive officials in subsection (1), and officials mentioned in subsection (2) which
should be construed to refer to local elective officials, can be gleaned from the proceedings of the Batasan Pambansa
recorded as follows:

Mr. Valdez: ... May I go to paragraph 2 of Sec. 16, Mr. Speaker which says:

Any local elective officials, including an elected barangay official shall ipso facto cease
in his office or position as at the time he filed his certificate of candidacy, unless
otherwise provided by law. (later amended and is now Subsection 2 of sec. 13)

Now, do the words 'local elective official' refer to the office or to an

incumbent who has been elected, not appointed?

Mr. Albano. Paragraph 2 covers elective official; paragraph I covers appointive officials.
So, if he is an appointive local official he would fall under paragraph (1) because it says:
'Any person holding appointive office or position.' It does not distinguish if it is
appointive or elective position.

Mr. Valdez. In other words, Mr. Speaker, do I get the distinguished sponsor correctly that
an appointed mayor but holding an elective position is not within the comprehension of
this section or this paragraph?

Mr. Albano. No, Mr. Speaker, that would refer to paragraph 2. What maybe the
Gentleman's contemplation is: Suppose a person is appointed to the position of a mayor,
 will he be covered under paragraph 1 and should be cease to hold office upon filing his
Certificate of Candidacy?

Mr. Valdez. Yes.

Mr. Albano. I would say, yes, he would fall under paragraph 1. But if he is an elective
local official he would fall under paragraph 2.

Mr. Valdez. In other words, this is a description of the mode and manner by which the
occupant is brought to the office.

Mr. Albano. Yes.

Mr. Valdez. ... not the description of the office itself.

Mr. Albano. No, Mr. Speaker.

Mr. Valdez. I see. Now we come to the other portion which refers to elected barangay
official. Why is it that the provision isolates the nature of the official of the barangay
who had been elected, not appointed, is he supposed to be within the purview of
paragraph 2?

Mr. Albano. No. Mr. Speaker, I will call the Gentleman's attention to paragraph 1: Any
person holding a public appointive office or position ... I presume and I assume that the
office in the barangay council is still contemplated in the words 'appointive office.'

Mr. Valdez. Under paragraph l?

Mr. Albano. Yes, Mr. Speaker. 3 (Emphasis supplied)

Nor do we perceive any violation of the equal protection clause, as petitioner contends, since Section 13 of B.P. Blg. 697
applies alike to all persons subject to such legislation under like circumstances and conditions. Neither can petitioner
justifiably contend that he was removed from office without due process of law since it was of his own choice that he ran
for a seat in the Batasan Pambansa. The consequence that followed his unsuccessful attempt at the elections arose from
law.

It goes without saying that although petitioner, by filing his certificate of candidacy for the Batasan Pambansa ceased, ipso
facto, to be an appointive member of the Sangguniang Panlungsod, he remains an elective Barangay Captain from which
position he may be considered as having been on "forced leave of absence." He also continues as President of the
Association of Barangay Councils but will need a reappointment by the President, as member of the Sangguniang Panlungsod
of Ozamiz City as the law speaks of "members who may be appointed by the President."

WHEREFORE, finding no grave abuse of discretion on the part of respondent officials, the Writs prayed for are denied, and
this Petition is hereby ordered dismissed. No costs.

SO ORDERED.

Fernando, C.J., Makasiar, Abad Santos, Plana, Escolin, Relova, Gutierrez, Jr., De la Fuente, Cuevas and Alampay, JJ.,
concur.

Aquino and Concepcion, Jr., took no part.

Separate Opinions

TEEHANKEE, J., dissenting:

There is no question petitioner is an elected baranggay official. He was elected barangay captain of his barangay. He was
furthermore elected President of the Association of Barangay Councils (ABC) of Ozamis City, and as such, he was entitled to
be appointed, ex-oficio, as he was in fact appointed by the President as member of thesangguniang panglunsod. The
appointment became functus oficio upon its exercise and petitioner's assumption of the office.

Under Section 13(2) of B.P. Blg. 697 governing the 1984 election for the Batasan Pambansa, petitioner asmember of the said
sanggunian should be considered as having gone "on forced leave of absence from office" upon his filing of his certificate of
candidacy and running (unsuccessfully) for a seat to the Batasan Pambansa, like similarly situated governors and mayors.
The letter and spirit of the Act support petitioner's position. As the decision itself points out, he rightfully remains as
barangay captain and president of the ABC. As president of the ABC, petitioner should be held as merely having been on
forced leave of absence from the ex oficio position ofsangguniang member to which he held an appointment. He has
correctly submitted that the law makes no distinction between elective or appointive sanggunian members. The basic
position of barangay captain and ABC president held by him are essentially elective. He cannot fall under Section 13(l) of
the Act which refers to purely appointive officials, including active officers and members of the Armed Forces of the
Philippines and officials and employees of government-owned and controlled corporations, under the statutory construction
rule of noscitur a sociis.
G.R. No. L-39419 April 12, 1982

MAPALAD AISPORNA, petitioner,

vs.
THE COURT OF APPEALS and THE PEOPLE OF THE PHILIPPINES, respondents.

DE CASTRO, J.:

In this petition for certiorari, petitioner-accused Aisporna seeks the reversal of the decision dated August 14, 1974 1 in CA-
G.R. No. 13243-CR entitled "People of the Philippines, plaintiff-appellee, vs. Mapalad Aisporna, defendant-appellant" of
respondent Court of Appeals affirming the judgment of the City Court of Cabanatuan 2 rendered on August 2, 1971 which
found the petitioner guilty for having violated Section 189 of the Insurance Act (Act No. 2427, as amended) and sentenced
her to pay a fine of P500.00 with subsidiary imprisonment in case of insolvency, and to pay the costs.

Petitioner Aisporna was charged in the City Court of Cabanatuan for violation of Section 189 of the Insurance Act on
November 21, 1970 in an information 3 which reads as follows:

That on or before the 21st day of June, 1969, in the City of Cabanatuan, Republic of the Philippines, and
within the jurisdiction of this Honorable Court, the above-named accused, did then and there, wilfully,
unlawfully and feloniously act as agent in the solicitation or procurement of an application for insurance
by soliciting therefor the application of one Eugenio S. Isidro, for and in behalf of Perla Compania de
Seguros, Inc., a duly organized insurance company, registered under the laws of the Republic of the
Philippines, resulting in the issuance of a Broad Personal Accident Policy No. 28PI-RSA 0001 in the amount
not exceeding FIVE THOUSAND PESOS (P5,000.00) dated June 21, 1969, without said accused having first
secured a certificate of authority to act as such agent from the office of the Insurance Commissioner,
Republic of the Philippines.

CONTRARY TO LAW.

The facts, 4 as found by the respondent Court of Appeals are quoted hereunder:

IT RESULTING: That there is no debate that since 7 March, 1969 and as of 21 June, 1969, appellant's
husband, Rodolfo S. Aisporna was duly licensed by Insurance Commission as agent to Perla Compania de
Seguros, with license to expire on 30 June, 1970, Exh. C; on that date, at Cabanatuan City, Personal
Accident Policy, Exh. D was issued by Perla thru its author representative, Rodolfo S. Aisporna, for a
period of twelve (12) months with beneficiary as Ana M. Isidro, and for P5,000.00; apparently, insured
died by violence during lifetime of policy, and for reasons not explained in record, present information
was filed by Fiscal, with assistance of private prosecutor, charging wife of Rodolfo with violation of Sec.
189 of Insurance Law for having, wilfully, unlawfully, and feloniously acted, "as agent in the solicitation
for insurance by soliciting therefore the application of one Eugenio S. Isidro for and in behalf of Perla
Compaa de Seguros, ... without said accused having first secured a certificate of authority to act as such
agent from the office of the Insurance Commission, Republic of the Philippines."

and in the trial, People presented evidence that was hardly disputed, that aforementioned policy was
issued with active participation of appellant wife of Rodolfo, against which appellant in her defense
sought to show that being the wife of true agent, Rodolfo, she naturally helped him in his work, as clerk,
and that policy was merely a renewal and was issued because Isidro had called by telephone to renew,
and at that time, her husband, Rodolfo, was absent and so she left a note on top of her husband's desk to
renew ...

Consequently, the trial court found herein petitioner guilty as charged. On appeal, the trial court's decision was affirmed by
the respondent appellate court finding the petitioner guilty of a violation of the first paragraph of Section 189 of the
Insurance Act. Hence, this present recourse was filed on October 22, 1974. 5

In its resolution of October 28, 1974, 6 this Court resolved, without giving due course to this instant petition, to require the
respondent to comment on the aforesaid petition. In the comment 7 filed on December 20, 1974, the respondent,
represented by the Office of the Solicitor General, submitted that petitioner may not be considered as having violated
Section 189 of the Insurance Act. 8 On April 3, 1975, petitioner submitted his Brief 9 while the Solicitor General, on behalf of
the respondent, filed a manifestation 10 in lieu of a Brief on May 3, 1975 reiterating his stand that the petitioner has not
violated Section 189 of the Insurance Act.
 11
In seeking reversal of the judgment of conviction, petitioner assigns the following errors allegedly committed by the
appellate court:

1. THE RESPONDENT COURT OF APPEALS ERRED IN FINDING THAT RECEIPT OF COMPENSATION IS NOT AN
ESSENTIAL ELEMENT OF THE CRIME DEFINED BY THE FIRST PARAGRAPH OF SECTION 189 OF THE INSURANCE
ACT.

2. THE RESPONDENT COURT OF APPEALS ERRED IN GIVING DUE WEIGHT TO EXHIBITS F, F-1, TO F-17,
INCLUSIVE SUFFICIENT TO ESTABLISH PETITIONER'S GUILT BEYOND REASONABLE DOUBT.

3. THE RESPONDENT COURT OF APPEALS ERRED IN NOT ACQUITTING HEREIN PETITIONER.

We find the petition meritorious.

The main issue raised is whether or not a person can be convicted of having violated the first paragraph of Section 189 of
the Insurance Act without reference to the second paragraph of the same section. In other words, it is necessary to
determine whether or not the agent mentioned in the first paragraph of the aforesaid section is governed by the definition
of an insurance agent found on its second paragraph.

The pertinent provision of Section 189 of the Insurance Act reads as follows:

No insurance company doing business within the Philippine Islands, nor any agent thereof, shall pay any
commission or other compensation to any person for services in obtaining new insurance, unless such
person shall have first procured from the Insurance Commissioner a certificate of authority to act as an
agent of such company as hereinafter provided. No person shall act as agent, sub-agent, or broker in the
solicitation of procurement of applications for insurance, or receive for services in obtaining new
insurance, any commission or other compensation from any insurance company doing business in the
Philippine Islands, or agent thereof, without first procuring a certificate of authority so to act from the
Insurance Commissioner, which must be renewed annually on the first day of January, or within six months
thereafter. Such certificate shall be issued by the Insurance Commissioner only upon the written
application of persons desiring such authority, such application being approved and countersigned by the
company such person desires to represent, and shall be upon a form approved by the Insurance
Commissioner, giving such information as he may require. The Insurance Commissioner shall have the right
to refuse to issue or renew and to revoke any such certificate in his discretion. No such certificate shall
be valid, however, in any event after the first day of July of the year following the issuing of such
certificate. Renewal certificates may be issued upon the application of the company.

Any person who for compensation solicits or obtains insurance on behalf of any insurance company, or
transmits for a person other than himself an application for a policy of insurance to or from such company
or offers or assumes to act in the negotiating of such insurance, shall be an insurance agent within the
intent of this section, and shall thereby become liable to all the duties, requirements, liabilities, and
penalties to which an agent of such company is subject.

Any person or company violating the provisions of this section shall be fined in the sum of five hundred
pesos. On the conviction of any person acting as agent, sub-agent, or broker, of the commission of any
offense connected with the business of insurance, the Insurance Commissioner shall immediately revoke
the certificate of authority issued to him and no such certificate shall thereafter be issued to such
convicted person.

A careful perusal of the above-quoted provision shows that the first paragraph thereof prohibits a person from acting as
agent, sub-agent or broker in the solicitation or procurement of applications for insurance without first procuring a
certificate of authority so to act from the Insurance Commissioner, while its second paragraph defines who is an insurance
agent within the intent of this section and, finally, the third paragraph thereof prescribes the penalty to be imposed for its
violation.

The respondent appellate court ruled that the petitioner is prosecuted not under the second paragraph of Section 189 of
the aforesaid Act but under its first paragraph. Thus

... it can no longer be denied that it was appellant's most active endeavors that resulted in issuance of
policy to Isidro, she was there and then acting as agent, and received the pay thereof her defense that
 she was only acting as helper of her husband can no longer be sustained, neither her point that she
received no compensation for issuance of the policy because

any person who for compensation solicits or obtains insurance on behalf of any
insurance company or transmits for a person other than himself an application for a
policy of insurance to or from such company or offers or assumes to act in the
negotiating of such insurance, shall be an insurance agent within the intent of this
section, and shall thereby become liable to all the duties, requirements, liabilities, and
penalties, to which an agent of such company is subject. paragraph 2, Sec. 189,
Insurance Law,

now it is true that information does not even allege that she had obtained the insurance,

for compensation

which is the gist of the offense in Section 189 of the Insurance Law in its 2nd paragraph, but what
appellant apparently overlooks is that she is prosecuted not under the 2nd but under the 1st paragraph of
Sec. 189 wherein it is provided that,

No person shall act as agent, sub-agent, or broker, in the solicitation or procurement of

applications for insurance, or receive for services in obtaining new insurance any
commission or other compensation from any insurance company doing business in the
Philippine Island, or agent thereof, without first procuring a certificate of authority to
act from the insurance commissioner, which must be renewed annually on the first day
of January, or within six months thereafter.

therefore, there was no technical defect in the wording of the charge, so that Errors 2 and 4 must be
overruled. 12

From the above-mentioned ruling, the respondent appellate court seems to imply that the definition of an insurance agent
under the second paragraph of Section 189 is not applicable to the insurance agent mentioned in the first paragraph.
Parenthetically, the respondent court concludes that under the second paragraph of Section 189, a person is an insurance
agent if he solicits and obtains an insurance for compensation, but, in its first paragraph, there is no necessity that a person
solicits an insurance for compensation in order to be called an insurance agent.

We find this to be a reversible error. As correctly pointed out by the Solicitor General, the definition of an insurance agent
as found in the second paragraph of Section 189 is intended to define the word "agent" mentioned in the first and second
paragraphs of the aforesaid section. More significantly, in its second paragraph, it is explicitly provided that the definition
of an insurance agent is within the intent of Section 189. Hence

Any person who for compensation ... shall be an insurance agent within the intent of this section, ...

Patently, the definition of an insurance agent under the second paragraph holds true with respect to the agent mentioned
in the other two paragraphs of the said section. The second paragraph of Section 189 is a definition and interpretative
clause intended to qualify the term "agent" mentioned in both the first and third paragraphs of the aforesaid section.

Applying the definition of an insurance agent in the second paragraph to the agent mentioned in the first and second
paragraphs would give harmony to the aforesaid three paragraphs of Section 189. Legislative intent must be ascertained
from a consideration of the statute as a whole. The particular words, clauses and phrases should not be studied as detached
and isolated expressions, but the whole and every part of the statute must be considered in fixing the meaning of any of its
parts and in order to produce harmonious whole. 13 A statute must be so construed as to harmonize and give effect to all its
provisions whenever possible. 14 The meaning of the law, it must be borne in mind, is not to be extracted from any single
part, portion or section or from isolated words and phrases, clauses or sentences but from a general consideration or view
of the act as a whole. 15 Every part of the statute must be interpreted with reference to the context. This means that every
part of the statute must be considered together with the other parts, and kept subservient to the general intent of the
whole enactment, not separately and independently. 16 More importantly, the doctrine of associated words (Noscitur a
Sociis) provides that where a particular word or phrase in a statement is ambiguous in itself or is equally susceptible of
various meanings, its true meaning may be made clear and specific by considering the company in which it is found or with
which it is associated. 17
Considering that the definition of an insurance agent as found in the second paragraph is also applicable to the agent
mentioned in the first paragraph, to receive a compensation by the agent is an essential element for a violation of the first
paragraph of the aforesaid section. The appellate court has established ultimately that the petitioner-accused did not
receive any compensation for the issuance of the insurance policy of Eugenio Isidro. Nevertheless, the accused was
convicted by the appellate court for, according to the latter, the receipt of compensation for issuing an insurance policy is
not an essential element for a violation of the first paragraph of Section 189 of the Insurance Act.

We rule otherwise. Under the Texas Penal Code 1911, Article 689, making it a misdemeanor for any person for direct or
indirect compensation to solicit insurance without a certificate of authority to act as an insurance agent, an information,
failing to allege that the solicitor was to receive compensation either directly or indirectly, charges no offense. 18 In the
case of Bolen vs. Stake, 19 the provision of Section 3750, Snyder's Compiled Laws of Oklahoma 1909 is intended to penalize
persons only who acted as insurance solicitors without license, and while acting in such capacity negotiated and concluded
insurance contracts for compensation. It must be noted that the information, in the case at bar, does not allege that the
negotiation of an insurance contracts by the accused with Eugenio Isidro was one for compensation. This allegation is
essential, and having been omitted, a conviction of the accused could not be sustained. It is well-settled in Our
jurisprudence that to warrant conviction, every element of the crime must be alleged and proved. 20

After going over the records of this case, We are fully convinced, as the Solicitor General maintains, that accused did not
violate Section 189 of the Insurance Act.

WHEREFORE, the judgment appealed from is reversed and the accused is acquitted of the crime charged, with costs de
oficio.

SO ORDERED.

Teehankee (Acting C.J.,) Makasiar, De Castro, Fernandez, Guerrero and Melencio-Herrera, JJ., concur.

Plana, J., took no part.

G.R. No. L-19650 September 29, 1966

CALTEX (PHILIPPINES), INC., petitioner-appellee,

vs.
ENRICO PALOMAR, in his capacity as THE POSTMASTER GENERAL, respondent-appellant.

Office of the Solicitor General for respondent and appellant.

Ross, Selph and Carrascoso for petitioner and appellee.

CASTRO, J.:

In the year 1960 the Caltex (Philippines) Inc. (hereinafter referred to as Caltex) conceived and laid the groundwork for a
promotional scheme calculated to drum up patronage for its oil products. Denominated "Caltex Hooded Pump Contest", it
calls for participants therein to estimate the actual number of liters a hooded gas pump at each Caltex station will dispense
during a specified period. Employees of the Caltex (Philippines) Inc., its dealers and its advertising agency, and their
immediate families excepted, participation is to be open indiscriminately to all "motor vehicle owners and/or licensed
drivers". For the privilege to participate, no fee or consideration is required to be paid, no purchase of Caltex products
required to be made. Entry forms are to be made available upon request at each Caltex station where a sealed can will be
provided for the deposit of accomplished entry stubs.

A three-staged winner selection system is envisioned. At the station level, called "Dealer Contest", the contestant whose
estimate is closest to the actual number of liters dispensed by the hooded pump thereat is to be awarded the first prize;
the next closest, the second; and the next, the third. Prizes at this level consist of a 3-burner kerosene stove for first; a
thermos bottle and a Ray-O-Vac hunter lantern for second; and an Everready Magnet-lite flashlight with batteries and a
screwdriver set for third. The first-prize winner in each station will then be qualified to join in the "Regional Contest" in
seven different regions. The winning stubs of the qualified contestants in each region will be deposited in a sealed can from
which the first-prize, second-prize and third-prize winners of that region will be drawn. The regional first-prize winners will
be entitled to make a three-day all-expenses-paid round trip to Manila, accompanied by their respective Caltex dealers, in
order to take part in the "National Contest". The regional second-prize and third-prize winners will receive cash prizes of
P500 and P300, respectively. At the national level, the stubs of the seven regional first-prize winners will be placed inside a
sealed can from which the drawing for the final first-prize, second-prize and third-prize winners will be made. Cash prizes
in store for winners at this final stage are: P3,000 for first; P2,000 for second; Pl,500 for third; and P650 as consolation
prize for each of the remaining four participants.

Foreseeing the extensive use of the mails not only as amongst the media for publicizing the contest but also for the
transmission of communications relative thereto, representations were made by Caltex with the postal authorities for the
contest to be cleared in advance for mailing, having in view sections 1954(a), 1982 and 1983 of the Revised Administrative
Code, the pertinent provisions of which read as follows:

SECTION 1954. Absolutely non-mailable matter. No matter belonging to any of the following classes, whether
sealed as first-class matter or not, shall be imported into the Philippines through the mails, or to be deposited in
or carried by the mails of the Philippines, or be delivered to its addressee by any officer or employee of the
Bureau of Posts:

Written or printed matter in any form advertising, describing, or in any manner pertaining to, or conveying or
purporting to convey any information concerning any lottery, gift enterprise, or similar scheme depending in whole
or in part upon lot or chance, or any scheme, device, or enterprise for obtaining any money or property of any kind
by means of false or fraudulent pretenses, representations, or promises.

"SECTION 1982. Fraud orders.Upon satisfactory evidence that any person or company is engaged in conducting
any lottery, gift enterprise, or scheme for the distribution of money, or of any real or personal property by lot,
chance, or drawing of any kind, or that any person or company is conducting any scheme, device, or enterprise for
obtaining money or property of any kind through the mails by means of false or fraudulent pretenses,
representations, or promises, the Director of Posts may instruct any postmaster or other officer or employee of the
Bureau to return to the person, depositing the same in the mails, with the word "fraudulent" plainly written or
stamped upon the outside cover thereof, any mail matter of whatever class mailed by or addressed to such person
or company or the representative or agent of such person or company.

SECTION 1983. Deprivation of use of money order system and telegraphic transfer service.The Director of Posts
may, upon evidence satisfactory to him that any person or company is engaged in conducting any lottery, gift
 enterprise or scheme for the distribution of money, or of any real or personal property by lot, chance, or drawing
of any kind, or that any person or company is conducting any scheme, device, or enterprise for obtaining money or
property of any kind through the mails by means of false or fraudulent pretenses, representations, or promise,
forbid the issue or payment by any postmaster of any postal money order or telegraphic transfer to said person or
company or to the agent of any such person or company, whether such agent is acting as an individual or as a firm,
bank, corporation, or association of any kind, and may provide by regulation for the return to the remitters of the
sums named in money orders or telegraphic transfers drawn in favor of such person or company or its agent.

The overtures were later formalized in a letter to the Postmaster General, dated October 31, 1960, in which the Caltex,
thru counsel, enclosed a copy of the contest rules and endeavored to justify its position that the contest does not violate
the anti-lottery provisions of the Postal Law. Unimpressed, the then Acting Postmaster General opined that the scheme falls
within the purview of the provisions aforesaid and declined to grant the requested clearance. In its counsel's letter of
December 7, 1960, Caltex sought a reconsideration of the foregoing stand, stressing that there being involved no
consideration in the part of any contestant, the contest was not, under controlling authorities, condemnable as a lottery.
Relying, however, on an opinion rendered by the Secretary of Justice on an unrelated case seven years before (Opinion 217,
Series of 1953), the Postmaster General maintained his view that the contest involves consideration, or that, if it does not,
it is nevertheless a "gift enterprise" which is equally banned by the Postal Law, and in his letter of December 10, 1960 not
only denied the use of the mails for purposes of the proposed contest but as well threatened that if the contest was
conducted, "a fraud order will have to be issued against it (Caltex) and all its representatives".

Caltex thereupon invoked judicial intervention by filing the present petition for declaratory relief against Postmaster
General Enrico Palomar, praying "that judgment be rendered declaring its 'Caltex Hooded Pump Contest' not to be violative
of the Postal Law, and ordering respondent to allow petitioner the use of the mails to bring the contest to the attention of
the public". After issues were joined and upon the respective memoranda of the parties, the trial court rendered judgment
as follows:

In view of the foregoing considerations, the Court holds that the proposed 'Caltex Hooded Pump Contest'
announced to be conducted by the petitioner under the rules marked as Annex B of the petitioner does not violate
the Postal Law and the respondent has no right to bar the public distribution of said rules by the mails.

The respondent appealed.

The parties are now before us, arrayed against each other upon two basic issues: first, whether the petition states a
sufficient cause of action for declaratory relief; and second, whether the proposed "Caltex Hooded Pump Contest" violates
the Postal Law. We shall take these up in seriatim.

1. By express mandate of section 1 of Rule 66 of the old Rules of Court, which was the applicable legal basis for the remedy
at the time it was invoked, declaratory relief is available to any person "whose rights are affected by a statute . . . to
determine any question of construction or validity arising under the . . . statute and for a declaration of his rights
thereunder" (now section 1, Rule 64, Revised Rules of Court). In amplification, this Court, conformably to established
jurisprudence on the matter, laid down certain conditions sine qua non therefor, to wit: (1) there must be a justiciable
controversy; (2) the controversy must be between persons whose interests are adverse; (3) the party seeking declaratory
relief must have a legal interest in the controversy; and (4) the issue involved must be ripe for judicial determination
(Tolentino vs. The Board of Accountancy, et al., G.R. No. L-3062, September 28, 1951; Delumen, et al. vs. Republic of the
Philippines, 50 O.G., No. 2, pp. 576, 578-579; Edades vs. Edades, et al., G.R. No. L-8964, July 31, 1956). The gravamen of
the appellant's stand being that the petition herein states no sufficient cause of action for declaratory relief, our duty is to
assay the factual bases thereof upon the foregoing crucible.

As we look in retrospect at the incidents that generated the present controversy, a number of significant points stand out in
bold relief. The appellee (Caltex), as a business enterprise of some consequence, concededly has the unquestioned right to
exploit every legitimate means, and to avail of all appropriate media to advertise and stimulate increased patronage for its
products. In contrast, the appellant, as the authority charged with the enforcement of the Postal Law, admittedly has the
power and the duty to suppress transgressions thereof particularly thru the issuance of fraud orders, under Sections 1982
and 1983 of the Revised Administrative Code, against legally non-mailable schemes. Obviously pursuing its right aforesaid,
the appellee laid out plans for the sales promotion scheme hereinbefore detailed. To forestall possible difficulties in the
dissemination of information thereon thru the mails, amongst other media, it was found expedient to request the appellant
for an advance clearance therefor. However, likewise by virtue of his jurisdiction in the premises and construing the
pertinent provisions of the Postal Law, the appellant saw a violation thereof in the proposed scheme and accordingly
declined the request. A point of difference as to the correct construction to be given to the applicable statute was thus
reached. Communications in which the parties expounded on their respective theories were exchanged. The confidence
with which the appellee insisted upon its position was matched only by the obstinacy with which the appellant stood his
ground. And this impasse was climaxed by the appellant's open warning to the appellee that if the proposed contest was
"conducted, a fraud order will have to be issued against it and all its representatives."

Against this backdrop, the stage was indeed set for the remedy prayed for. The appellee's insistent assertion of its claim to
the use of the mails for its proposed contest, and the challenge thereto and consequent denial by the appellant of the
privilege demanded, undoubtedly spawned a live controversy. The justiciability of the dispute cannot be gainsaid. There is
an active antagonistic assertion of a legal right on one side and a denial thereof on the other, concerning a real not a
mere theoretical question or issue. The contenders are as real as their interests are substantial. To the appellee, the
uncertainty occasioned by the divergence of views on the issue of construction hampers or disturbs its freedom to enhance
its business. To the appellant, the suppression of the appellee's proposed contest believed to transgress a law he has sworn
to uphold and enforce is an unavoidable duty. With the appellee's bent to hold the contest and the appellant's threat to
issue a fraud order therefor if carried out, the contenders are confronted by the ominous shadow of an imminent and
inevitable litigation unless their differences are settled and stabilized by a tranquilizing declaration (Pablo y Sen, et al. vs.
Republic of the Philippines, G.R. No. L-6868, April 30, 1955). And, contrary to the insinuation of the appellant, the time is
long past when it can rightly be said that merely the appellee's "desires are thwarted by its own doubts, or by the fears of
others" which admittedly does not confer a cause of action. Doubt, if any there was, has ripened into a justiciable
controversy when, as in the case at bar, it was translated into a positive claim of right which is actually contested (III
Moran, Comments on the Rules of Court, 1963 ed., pp. 132-133, citing: Woodward vs. Fox West Coast Theaters, 36 Ariz.,
251, 284 Pac. 350).

We cannot hospitably entertain the appellant's pretense that there is here no question of construction because the said
appellant "simply applied the clear provisions of the law to a given set of facts as embodied in the rules of the contest",
hence, there is no room for declaratory relief. The infirmity of this pose lies in the fact that it proceeds from the
assumption that, if the circumstances here presented, the construction of the legal provisions can be divorced from the
matter of their application to the appellee's contest. This is not feasible. Construction, verily, is the art or process of
discovering and expounding the meaning and intention of the authors of the law with respect to its application to a given
case, where that intention is rendered doubtful, amongst others, by reason of the fact that the given case is not explicitly
provided for in the law (Black, Interpretation of Laws, p. 1). This is precisely the case here. Whether or not the scheme
proposed by the appellee is within the coverage of the prohibitive provisions of the Postal Law inescapably requires an
inquiry into the intended meaning of the words used therein. To our mind, this is as much a question of construction or
interpretation as any other.

Nor is it accurate to say, as the appellant intimates, that a pronouncement on the matter at hand can amount to nothing
more than an advisory opinion the handing down of which is anathema to a declaratory relief action. Of course, no breach
of the Postal Law has as yet been committed. Yet, the disagreement over the construction thereof is no longer nebulous or
contingent. It has taken a fixed and final shape, presenting clearly defined legal issues susceptible of immediate resolution.
With the battle lines drawn, in a manner of speaking, the propriety nay, the necessity of setting the dispute at rest
before it accumulates the asperity distemper, animosity, passion and violence of a full-blown battle which looms ahead (III
Moran, Comments on the Rules of Court, 1963 ed., p. 132 and cases cited), cannot but be conceded. Paraphrasing the
language in Zeitlin vs. Arnebergh 59 Cal., 2d., 901, 31 Cal. Rptr., 800, 383 P. 2d., 152, cited in 22 Am. Jur., 2d., p. 869, to
deny declaratory relief to the appellee in the situation into which it has been cast, would be to force it to choose between
undesirable alternatives. If it cannot obtain a final and definitive pronouncement as to whether the anti-lottery provisions
of the Postal Law apply to its proposed contest, it would be faced with these choices: If it launches the contest and uses
the mails for purposes thereof, it not only incurs the risk, but is also actually threatened with the certain imposition, of a
fraud order with its concomitant stigma which may attach even if the appellee will eventually be vindicated; if it abandons
the contest, it becomes a self-appointed censor, or permits the appellant to put into effect a virtual fiat of previous
censorship which is constitutionally unwarranted. As we weigh these considerations in one equation and in the spirit of
liberality with which the Rules of Court are to be interpreted in order to promote their object (section 1, Rule 1, Revised
Rules of Court) which, in the instant case, is to settle, and afford relief from uncertainty and insecurity with respect to,
rights and duties under a law we can see in the present case any imposition upon our jurisdiction or any futility or
prematurity in our intervention.

The appellant, we apprehend, underrates the force and binding effect of the ruling we hand down in this case if he believes
that it will not have the final and pacifying function that a declaratory judgment is calculated to subserve. At the very
least, the appellant will be bound. But more than this, he obviously overlooks that in this jurisdiction, "Judicial decisions
applying or interpreting the law shall form a part of the legal system" (Article 8, Civil Code of the Philippines). In effect,
judicial decisions assume the same authority as the statute itself and, until authoritatively abandoned, necessarily become,
to the extent that they are applicable, the criteria which must control the actuations not only of those called upon to abide
thereby but also of those in duty bound to enforce obedience thereto. Accordingly, we entertain no misgivings that our
resolution of this case will terminate the controversy at hand.
It is not amiss to point out at this juncture that the conclusion we have herein just reached is not without precedent.
In Liberty Calendar Co. vs. Cohen, 19 N.J., 399, 117 A. 2d., 487, where a corporation engaged in promotional advertising
was advised by the county prosecutor that its proposed sales promotion plan had the characteristics of a lottery, and that if
such sales promotion were conducted, the corporation would be subject to criminal prosecution, it was held that the
corporation was entitled to maintain a declaratory relief action against the county prosecutor to determine the legality of
its sales promotion plan. In pari materia, see also: Bunis vs. Conway, 17 App. Div. 2d., 207, 234 N.Y.S. 2d., 435; Zeitlin vs.
Arnebergh, supra; Thrillo, Inc. vs. Scott, 15 N.J. Super. 124, 82 A. 2d., 903.

In fine, we hold that the appellee has made out a case for declaratory relief.

2. The Postal Law, chapter 52 of the Revised Administrative Code, using almost identical terminology in sections 1954(a),
1982 and 1983 thereof, supra, condemns as absolutely non-mailable, and empowers the Postmaster General to issue fraud
orders against, or otherwise deny the use of the facilities of the postal service to, any information concerning "any lottery,
gift enterprise, or scheme for the distribution of money, or of any real or personal property by lot, chance, or drawing of
any kind". Upon these words hinges the resolution of the second issue posed in this appeal.

Happily, this is not an altogether untrodden judicial path. As early as in 1922, in "El Debate", Inc. vs. Topacio, 44 Phil., 278,
283-284, which significantly dwelt on the power of the postal authorities under the abovementioned provisions of the Postal
Law, this Court declared that

While countless definitions of lottery have been attempted, the authoritative one for this jurisdiction is that of the
United States Supreme Court, in analogous cases having to do with the power of the United States Postmaster
General, viz.: The term "lottery" extends to all schemes for the distribution of prizes by chance, such as policy
playing, gift exhibitions, prize concerts, raffles at fairs, etc., and various forms of gambling. The three essential
elements of a lottery are: First, consideration; second, prize; and third, chance. (Horner vs. States [1892], 147
U.S. 449; Public Clearing House vs. Coyne [1903], 194 U.S., 497; U.S. vs. Filart and Singson [1915], 30 Phil., 80;
U.S. vs. Olsen and Marker [1917], 36 Phil., 395; U.S. vs. Baguio [1919], 39 Phil., 962; Valhalla Hotel Construction
Company vs. Carmona, p. 233, ante.)

Unanimity there is in all quarters, and we agree, that the elements of prize and chance are too obvious in the disputed
scheme to be the subject of contention. Consequently as the appellant himself concedes, the field of inquiry is narrowed
down to the existence of the element of consideration therein. Respecting this matter, our task is considerably lightened
inasmuch as in the same case just cited, this Court has laid down a definitive yard-stick in the following terms

In respect to the last element of consideration, the law does not condemn the gratuitous distribution of property
by chance, if no consideration is derived directly or indirectly from the party receiving the chance, but does
condemn as criminal schemes in which a valuable consideration of some kind is paid directly or indirectly for the
chance to draw a prize.

Reverting to the rules of the proposed contest, we are struck by the clarity of the language in which the invitation to
participate therein is couched. Thus

No puzzles, no rhymes? You don't need wrappers, labels or boxtops? You don't have to buy anything? Simply
estimate the actual number of liter the Caltex gas pump with the hood at your favorite Caltex dealer will dispense
from to , and win valuable prizes . . . ." .

Nowhere in the said rules is any requirement that any fee be paid, any merchandise be bought, any service be rendered, or
any value whatsoever be given for the privilege to participate. A prospective contestant has but to go to a Caltex station,
request for the entry form which is available on demand, and accomplish and submit the same for the drawing of the
winner. Viewed from all angles or turned inside out, the contest fails to exhibit any discernible consideration which would
brand it as a lottery. Indeed, even as we head the stern injunction, "look beyond the fair exterior, to the substance, in
order to unmask the real element and pernicious tendencies which the law is seeking to prevent" ("El Debate", Inc. vs.
Topacio, supra, p. 291), we find none. In our appraisal, the scheme does not only appear to be, but actually is, a gratuitous
distribution of property by chance.

There is no point to the appellant's insistence that non-Caltex customers who may buy Caltex products simply to win a prize
would actually be indirectly paying a consideration for the privilege to join the contest. Perhaps this would be tenable if
the purchase of any Caltex product or the use of any Caltex service were a pre-requisite to participation. But it is not. A
contestant, it hardly needs reiterating, does not have to buy anything or to give anything of value.1awphl.nt
Off-tangent, too, is the suggestion that the scheme, being admittedly for sales promotion, would naturally benefit the
sponsor in the way of increased patronage by those who will be encouraged to prefer Caltex products "if only to get the
chance to draw a prize by securing entry blanks". The required element of consideration does not consist of the benefit
derived by the proponent of the contest. The true test, as laid down in People vs. Cardas, 28 P. 2d., 99, 137 Cal. App.
(Supp.) 788, is whether the participant pays a valuable consideration for the chance, and not whether those conducting the
enterprise receive something of value in return for the distribution of the prize. Perspective properly oriented, the
standpoint of the contestant is all that matters, not that of the sponsor. The following, culled from Corpus Juris Secundum,
should set the matter at rest:

The fact that the holder of the drawing expects thereby to receive, or in fact does receive, some benefit in the
way of patronage or otherwise, as a result of the drawing; does not supply the element of consideration.Griffith
Amusement Co. vs. Morgan, Tex. Civ. App., 98 S.W., 2d., 844" (54 C.J.S., p. 849).

Thus enlightened, we join the trial court in declaring that the "Caltex Hooded Pump Contest" proposed by the appellee is
not a lottery that may be administratively and adversely dealt with under the Postal Law.

But it may be asked: Is it not at least a "gift enterprise, or scheme for the distribution of money, or of any real or personal
property by lot, chance, or drawing of any kind", which is equally prescribed? Incidentally, while the appellant's brief
appears to have concentrated on the issue of consideration, this aspect of the case cannot be avoided if the remedy here
invoked is to achieve its tranquilizing effect as an instrument of both curative and preventive justice. Recalling that the
appellant's action was predicated, amongst other bases, upon Opinion 217, Series 1953, of the Secretary of Justice, which
opined in effect that a scheme, though not a lottery for want of consideration, may nevertheless be a gift enterprise in
which that element is not essential, the determination of whether or not the proposed contest wanting in consideration
as we have found it to be is a prohibited gift enterprise, cannot be passed over sub silencio.

While an all-embracing concept of the term "gift enterprise" is yet to be spelled out in explicit words, there appears to be a
consensus among lexicographers and standard authorities that the term is commonly applied to a sporting artifice of under
which goods are sold for their market value but by way of inducement each purchaser is given a chance to win a prize (54
C.J.S., 850; 34 Am. Jur., 654; Black, Law Dictionary, 4th ed., p. 817; Ballantine, Law Dictionary with Pronunciations, 2nd
ed., p. 55; Retail Section of Chamber of Commerce of Plattsmouth vs. Kieck, 257 N.W., 493, 128 Neb. 13; Barker vs. State,
193 S.E., 605, 56 Ga. App., 705; Bell vs. State, 37 Tenn. 507, 509, 5 Sneed, 507, 509). As thus conceived, the term clearly
cannot embrace the scheme at bar. As already noted, there is no sale of anything to which the chance offered is attached
as an inducement to the purchaser. The contest is open to all qualified contestants irrespective of whether or not they buy
the appellee's products.

Going a step farther, however, and assuming that the appellee's contest can be encompassed within the broadest sweep
that the term "gift enterprise" is capable of being extended, we think that the appellant's pose will gain no added comfort.
As stated in the opinion relied upon, rulings there are indeed holding that a gift enterprise involving an award by chance,
even in default of the element of consideration necessary to constitute a lottery, is prohibited (E.g.: Crimes vs. States, 235
Ala 192, 178 So. 73; Russell vs. Equitable Loan & Sec. Co., 129 Ga. 154, 58 S.E., 88; State ex rel. Stafford vs. Fox-Great
Falls Theater Corporation, 132 P. 2d., 689, 694, 698, 114 Mont. 52). But this is only one side of the coin. Equally impressive
authorities declare that, like a lottery, a gift enterprise comes within the prohibitive statutes only if it exhibits the
tripartite elements of prize, chance and consideration (E.g.: Bills vs. People, 157 P. 2d., 139, 142, 113 Colo., 326; D'Orio vs.
Jacobs, 275 P. 563, 565, 151 Wash., 297; People vs. Psallis, 12 N.Y.S., 2d., 796; City and County of Denver vs. Frueauff, 88
P., 389, 394, 39 Colo., 20, 7 L.R.A., N.S., 1131, 12 Ann. Cas., 521; 54 C.J.S., 851, citing: Barker vs. State, 193 S.E., 605,
607, 56 Ga. App., 705; 18 Words and Phrases, perm. ed., pp. 590-594). The apparent conflict of opinions is explained by the
fact that the specific statutory provisions relied upon are not identical. In some cases, as pointed out in 54 C.J.S., 851, the
terms "lottery" and "gift enterprise" are used interchangeably (Bills vs. People, supra); in others, the necessity for the
element of consideration or chance has been specifically eliminated by statute. (54 C.J.S., 351-352, citing Barker vs.
State, supra; State ex rel. Stafford vs. Fox-Great Falls Theater Corporation, supra). The lesson that we derive from this
state of the pertinent jurisprudence is, therefore, that every case must be resolved upon the particular phraseology of the
applicable statutory provision.

Taking this cue, we note that in the Postal Law, the term in question is used in association with the word "lottery". With the
meaning of lottery settled, and consonant to the well-known principle of legal hermeneutics noscitur a sociis which
Opinion 217 aforesaid also relied upon although only insofar as the element of chance is concerned it is only logical that
the term under a construction should be accorded no other meaning than that which is consistent with the nature of the
word associated therewith. Hence, if lottery is prohibited only if it involves a consideration, so also must the term "gift
enterprise" be so construed. Significantly, there is not in the law the slightest indicium of any intent to eliminate that
element of consideration from the "gift enterprise" therein included.
This conclusion firms up in the light of the mischief sought to be remedied by the law, resort to the determination thereof
being an accepted extrinsic aid in statutory construction. Mail fraud orders, it is axiomatic, are designed to prevent the use
of the mails as a medium for disseminating printed matters which on grounds of public policy are declared non-mailable. As
applied to lotteries, gift enterprises and similar schemes, justification lies in the recognized necessity to suppress their
tendency to inflame the gambling spirit and to corrupt public morals (Com. vs. Lund, 15 A. 2d., 839, 143 Pa. Super. 208).
Since in gambling it is inherent that something of value be hazarded for a chance to gain a larger amount, it follows
ineluctably that where no consideration is paid by the contestant to participate, the reason behind the law can hardly be
said to obtain. If, as it has been held

Gratuitous distribution of property by lot or chance does not constitute "lottery", if it is not resorted to as a device
to evade the law and no consideration is derived, directly or indirectly, from the party receiving the
chance, gambling spirit not being cultivated or stimulated thereby. City of Roswell vs. Jones, 67 P. 2d., 286, 41
N.M., 258." (25 Words and Phrases, perm. ed., p. 695, emphasis supplied).

we find no obstacle in saying the same respecting a gift enterprise. In the end, we are persuaded to hold that, under the
prohibitive provisions of the Postal Law which we have heretofore examined, gift enterprises and similar schemes therein
contemplated are condemnable only if, like lotteries, they involve the element of consideration. Finding none in the
contest here in question, we rule that the appellee may not be denied the use of the mails for purposes thereof.

Recapitulating, we hold that the petition herein states a sufficient cause of action for declaratory relief, and that the
"Caltex Hooded Pump Contest" as described in the rules submitted by the appellee does not transgress the provisions of the
Postal Law.

ACCORDINGLY, the judgment appealed from is affirmed. No costs.

Concepcion, C.J., Reyes, J.B.L., Barrera, Dizon, Regala, Makalintal, Bengzon, J.P., Zaldivar and Sanchez, JJ., concur.
 [G.R. No. L-33471. January 31, 1972.]
THE COMMISSIONER OF CUSTOMS, Petitioner, v. THE COURT OF TAX APPEALS and EUSEBIO DICHOCO, Respondents.
Solicitor General Felix Q. Antonio, Assistant Solicitor General Hector C . Fule and Solicitor Santiago M. Kapunan
for Petitioner.
Syquia & Aguilan for Private Respondent.

SYLLABUS

1. TAXATION; TARIFF AND CUSTOMS CODE; ARTICLES OF PROHIBITED IMPORTATION; SEC. 102(k); GOOD IMPORTED WITHOUT
THE RELEASE CERTIFICATE REQUIRED BY THE CENTRAL BANK ARE GOODS OF PROHIBITED IMPORTATION. The importation of
non-essential consumer goods, imported without the release certificate required by the Central Bank, is a prohibited
importation under section 102(k) of the Tariff and Customs Code which provides, in part, as follows:jgc:chanrobles.com.ph

"SECTION 102. Prohibited Importation. The importation into the Philippines of the following articles is
prohibited:chanrob1es virtual 1aw library

x x x

k. All other article the importation of which is prohibited by law.

2. ID.; ID.; ID.; ID.; EJUSDEM GENERIS CANNOT BE APPLIED IN THE CONSTRUCTION OF SAID ARTICLE. Respondents
contention that Sec. 102 (k) of the Tariff and Customs Code must, by application of the principles of ejusdem generis, be
restricted only to those articles the importation of which is "absolutely prohibited," or to contraband, is not acceptable. In
the first place, the specific things enumerated in paragraphs (a) to (j), inclusive, of Section 102 have no distinguishable
common characteristics and they differ greatly from one another and the rule of ejusdem generis applies only where the
specific words preceding the general expression are of the same nature. Where they are of different genera, the meaning
of the general word remains unaffected by its connection with them.

3. ID.; ID.; ID.; CONTRABAND AS ONLY THINGS ABSOLUTELY PROHIBITED BY LAW; MISNOMER. Calling contraband only the
things "absolutely prohibited by law" is a misnomer, as contraband means any article the importation or exportation of
which is prohibited by law.

4. ID.; ID.; ID.; SECTION, 102 (k); ARTICLES OF PROHIBITED IMPORTATIONS COVER BOTH ABSOLUTELY AND QUALIFIEDLY
PROHIBITED ARTICLES. Sec. 102, when examined, shows that it prohibits the importation of two categories of articles,
namely those which are absolutely prohibited, for example, those enumerated in paragraphs b, c, d, g, h and j, and those
articles which are qualifiedly prohibited, that is, those that may be imported subject to certain conditions or limitations, or
example, those enumerated in paragraphs a and i.

5. ID.; ID.; ID.; ID., ID.; INTERPRETATION. Accordingly, the general provision in Sec. 102 paragraph k, Tariff and Customs
Code to wit: "All other articles the importation of which is prohibited by law" cannot be so restricted as to comprise only
those articles the importation of which is absolutely prohibited like explosives. Articles of prohibited importation cover not
only absolutely prohibited articles but also qualifiedly prohibited articles. Paragraph (k) is comprehensive in the sense that
it prohibits the importation of all articles not mentioned in the preceding provision but prohibited by other existing
statutes. The legal effects of the importation of qualifiedly prohibited articles are the same as those of absolutely
prohibited articles.

6. ID.; ID.; ID.; ID.; CENTRAL BANK CIRCULARS ARE INCLUDED IN THE LAWS WHICH PROHIBIT IMPORTATION. The laws which
prohibit importation mentioned in section 102 (k) include the pertinent Central Bank Circulars which have the force and
effect of laws. "Customs Law" includes not only the provisions of the Tariff and Customs Code but also all other laws and any
regulation made pursuant thereto that is subject to enforcement by the Bureau of Customs or otherwise subject to its
jurisdiction.

7. ID.; ID.; ID.; ID.; IMPORTATION MADE IN VIOLATION OF THE CENTRAL BANK CIRCULARS IS PROHIBITED IMPORTATION. If
the importation in question was made contrary to Central Bank circulars, then said importation is an importation prohibited
by law. The importation, even if it be termed "importation effected contrary to law," as respondents call it, is nonetheless a
"prohibited importation."cralaw virtua1aw library

8. ID.; ID.; ID.; ID.; SETTLED RULE. It is now settled that the goods imported without release certificates required in
Circulars Nos. 44 and 45 are merchandise of prohibited importation as this expression is used in section 1363
(f):chanrob1es virtual 1aw library

9. ID., ID.; ID.; NO RELEASE CERTIFICATE MAY BE ISSUED TO ARTICLES NOT INCLUDED IN CIRCULAR 247; REASON. No
release certificates may be issued to the imported foodstuffs in the case at bar, although it is a no-dallar importation,
because Circular 295 provides that: No-dollar imports not covered by Circular No. 247 shall not be issued any release
certificate . . .," and the foodstuffs imported by private respondent are not among the items listed in Circular No. 247 for
which no release certificates are needed. The reason for this is to protect the countrys international reserve because every
import of goods or merchandise requires an immediate or future demand for foreign exchange.

10. ID.; ID.; ID.; ARTICLES OF PROHIBITED IMPORTATION CANNOT BE RELEASED UNDER BOND; LAWS AND ADMINISTRATIVE
ORDER APPLICABLE. The law prohibits the release under bond of the imported foodstuffs in question. This is provided in
Section 2301 of the Tariff and Customs Code, Customs Administrative Order Nos. 19-70, dated October 20, 1970, and
Section 3 of R.A. No. 1410. "An act to Prohibit the so-called No Dollar Imports except under certain conditions."cralaw
virtua1aw library

11. ID.; ID.; ID.; ARTICLES COVERED BY "RELEASE CERTIFICATES" NOT ARTICLES OF PROHIBITED IMPORTATION. The
importations of non-essential consumer goods which private respondent claims to have been released to Savoy Hotel
Philippines, cannot be said to have been made "contrary to law" and were prohibited importations, because they were
authorized and covered by "release certificates" approved pursuant to M. B. Resolution No. 383 dated March 4, 1970.

12. ID.; ID.; ID.; ID.; JUSTIFICATION. The authority granted to the importation of non-essential consumer goods that were
released to Savoy Philippines Hotel may be justified because it was given to hotels that catered to tourists visiting the
country and are, therefore, dollar earners.

13. ID.; ID.; ID.; LEGITIMATE PURPOSE CANNOT JUSTIFY PROHIBITED IMPORTATION. The reason advanced by private
respondent for the release of the importation in question that foodstuffs are intended to be eaten, and eating is always
legitimate, is beside the point. The issue in the present case is whether or not the foodstuffs were imported contrary to
law, and not whether the purpose for which the articles were imported is licit or illicit. Even if the purpose of importing the
foodstuffs be legitimate, the purpose alone will not justify the prohibited importation because this is a case where the end
does not justify the means.

14. ID.; ID.; ID.; BENEFIT TO ALL PARTIES CONCERNED DOES NOT JUSTIFY RELEASE UNDER BOND OF PROHIBITED
IMPORTATION; REASON THEREFOR. The final reason advanced by private respondent, that the release under bond of the
deteriorating foodstuffs would be beneficial to all parties concerned, does not cleanse the importation of its illegality and
will not justify their release under bond. The Tariff and Customs Code expressly prohibits the release under bond of articles
of prohibited importation, because, "articles of prohibited importation" are not allowed to be imported, the government
expects no revenue from such banned articles.
 15. ID.; ID.; ID.; ID.; ID.; POLICY OF THE GOVERNMENT. The government expects no revenue from such banned articles,
since they are not allowed to be imported. Otherwise, the laws prohibition would be rendered totally nugatory, since such
banned articles, which are mostly luxury items, are in great demand and command sky-high prices assuring great profit to
the smuggler. The smuggler would have the greatest profit to wreak havoc upon our currency by purchasing dollars at the
highest black market rates to purchase and bring in these high-profit luxury items. Should he succeed in smuggling them in,
his venture is a complete success. If he is caught, then all he has to do is put up a bond for the release of the goods to
secure payment of the appraised value thereof to the government, and he can still realize a substantial profit from the sale
of banned goods thus released to him. All the measures designed to strengthen and stabilize our peso and to check the
unregulated flow of foreign exchange from the country with the ultimate end of setting right the countrys economy and
financial position would thereby be set at naught.

16. REMEDIAL LAW; APPEALS; FAILURE TO FILE MOTION FOR RECONSIDERATION; FINALITY OF APPEALED ORDER; NOT APPLIED
TO INTERLOCUTORY ORDER. Regarding the point that he instant petition for certiorariis procedurally defective on the
ground that the disputed resolution of March 24, 1951 was already final and unappealable for the failure of petitioner to
file a timely motion for reconsideration. Held: The order complained of is interlocutory, and in interlocutory order is such
that it is always subject to correction and amendment before final judgment is rendered in the case.

17. ID.; SPECIAL CIVIL ACTIONS; CERTIORARI; WHEN PROPER. Under Section 1 of Rule 65 of the Revised Rules of
Court, certiorari may issue not only when the inferior court has acted with grave abuse of discretion, but also when it has
acted without or in excess of jurisdiction.

18. ID.; ID.; ID.; RELIEF GRANTED NOT WITHIN COURTS POWER; EQUIVALENT TO ACTING WITHOUT JURISDICTION. Although
a court has jurisdiction over the subject matter and the parties, it has been held that if a court has no power to give
certain kinds of relief, and it acts otherwise it is acting without jurisdiction.

19. ID.; ID.; ID.; ID.; INSTANT CASE. Under the law and decisions of this Court, the trial court could not order the release
of the forfeited imported foodstuffs under bond, and in ordering its release, it had acted without or in excess of its
jurisdiction.

20. ID.; ID.; ID.; PROPER RELIEF FROM INTERLOCUTORY ORDER. A petition for certiorari is the proper procedure for
obtaining a relief from, or review of, an interlocutory order.

21. ID.; RULES OF COURT; LIBERAL INTERPRETATION; PETITION NOT DEFECTIVE EVEN IF COPIES OF SUBJECT ORDERS NOT
CERTIFIED. The contention that the instant petition for certiorari is defective in that the copies of the orders subject
thereof were not certified, has no merit. The Rules of Court should be liberally construed, for they are intended to secure a
method by which the issues may be properly laid before the court. When these issues are already clear before the court the
deficiency in the observance of the rules should not be given undue importance.
DECISION

ZALDIVAR, J.:

Petition for certiorari with preliminary injunction, to annul and set aside two resolutions of respondent Court of Tax
Appeals in CTA Case No. 2206, the first dated March 24, 1911, ordering petitioner Commissioner of Customs to release under
bond to respondent Eusebio Dichoco the shipment of 438 packages of foodstuffs; and the second, dated April 19, 1971,
denying the motion of petitioner for reconsideration of the order of March 24, 1971 and giving him three days within which
to comply with said order.
A shipment of 438 packages of foodstuffs, declared in the name of respondent Eusebio Dichoco, hereinafter referred to as
private respondent, under Entry No. 109924 (70) arrived on December 16, 1970 at the Port of Manila on board the S/S "St.
Isidro." The shipment was covered by a "Customs No-Dollar Declaration", dated December 15, 1970. Against this shipment
the Collector of Customs of Manila issued, on December 28, 1970, in S. I. Case No. 12055, a warrant of seizure and
detention for violation of Section 2530 (f) of the Tariff and Customs Code, in relation to Central Bank Circulars Nos. 247,
289, 294, and 295 and section 102 (k) of the said Code. On the same date, private respondent requested the release of the
shipment upon the posting of a cash bond, which request, although favorably recommended by the Collector of Customs,
was denied by the Commissioner of Customs. However, the proper taxes and duties amounting to P25,998.00 were imposed
on the shipment and paid by private Respondent. After hearing, the Collector of Customs issued his decision, on January 19,
1971, decreeing the seizure and forfeiture of the shipment "for the simple reason that claimants failed to comply with the
regulations, that is, with the Central Bank circulars requiring the production of release certificates for importations similar
to the subject articles." On appeal, the Commissioner of Customs affirmed the decision on January 21, 1971.

On January 27, 1971 private respondent filed before respondent court a "petition for review, with a motion for release of
goods under bond", upon the grounds that the decision appealed from was not supported by substantial evidence and that
the goods seized did not constitute prohibited importation as contemplated in Sections 2530 (f) and 102 (k) of the Tariff and
Customs Code. In his answer filed before respondent court, the Commissioner of Customs alleged that "the goods having
been imported without the release certificate required by the Central Bank", are "subject to forfeiture" and the goods being
of "prohibited importation," may not be released under bond pursuant to the last paragraph of Section 2301 of the Tariff
and Customs Code.

The respondent Court, in its resolution of February 3, 1971, granted the motion to release the goods subject to the
condition that a cash bond in the sum of P43,854.59 be filed by private respondent with the Bureau of Customs. The bond
having been filed, respondent Court issued an order, dated February 9, 1971, directing petitioner to release the shipment.
Petitioner filed on March 2, 1971 a motion for reconsideration upon the ground that the importation in question, classified
as non-essential consumer goods, is banned by Central Bank Circulars No. 289, dated February 21, 1970, No. 294 of March
10, 1970, and No. 295 of March 20, 1970, and "acquired the status of prohibited importation or importation contrary to law"
and can not be released under bond. Private respondent filed his opposition dated March 4, 1971. Respondent court in its
resolution dated March 8, 1971, granted the motion for reconsideration, declaring that "Section 2301 of the Tariff and
Customs Code provides that articles the importation of which is prohibited by law can not be released under bond" and set
aside its resolutions of February 3 and February 9, 1971. Private respondent filed a motion for reconsideration of
respondent courts resolution of March 8, 1971, and said court, in its resolution of March 24, 1971, reversed its resolution of
March 8, 1971 and reinstated the resolution of February 3, 1971, ordering the immediate release of the foodstuffs.

Upon motion of private respondent dated April 6, 1971, respondent court issued an order, dated April 12, 1971, requiring
petitioner to appear on April 16, 1971 and show cause why he should not be declared in contempt of Court for non-
compliance with the resolution of March 24, 1971. Petitioner filed on April 16, 1971 his "Motion for Reconsideration and
Explanation", explaining why he should not be held in contempt and at the same time praying for the reconsideration of the
order of March 24, 1971, which ordered the release of the goods upon the ground that goods imported without release
certificates required by the Central Bank are "merchandise of prohibited importation" and cannot therefore be released
under any kind of bond.

In its resolution, dated April 19, 1971, respondent court found petitioners explanation for his failure to comply with the
order of March 24, 1971 satisfactory, but denied the motion for reconsideration upon the ground that it was filed 23 days
after his receipt of the resolution, and ordering him to comply, within three days, with the order of March 24, 1971.

On April 22, 1971 petitioner filed an "Urgent omnibus Motion and Manifestation", praying the respondent Court to reconsider
and set aside its order of March 24 and April 19, 1971 and reinstate its order of March 8, 1971; that the case be immediately
set for hearing on the merits; and to excuse him from complying with the order of April 19, 1971. Respondent court denied
the omnibus motion in its order dated April 27, 1971.

Hence the present petition before this Court.

Herein petitioner contends that the importation of the foodstuffs in question is prohibited and the articles thus imported
may be subject to forfeiture under Section 2530 (f) and 102 (k) of the Tariff and Customs Code; that the foodstuffs in
question being articles of prohibited importation cannot be released under bond; and that respondent court acted with
grave abuse of discretion, amounting to lack of jurisdiction, in ordering the release of the foodstuffs in question. The
petitioner prays that pending the determination of this case on its merits, a writ of preliminary injunction be issued ex
parte enjoining the implementation of respondent courts resolutions dated March 24, 1971 and April 19, 1971; and that
after due proceedings said resolutions be declared null and void and ordered set aside.

This Court, by resolution dated May 5, 1971, issued a temporary restraining order, and required respondents to file an
answer. On May 6, 1971 a temporary restraining order was issued restraining respondent Court of Tax Appeals, its agents,
representatives, etc. from enforcing the resolutions dated March 24, 1971 and April 19, 1971 issued in its C.T.A. Case No.
2206; more specifically from directing petitioner Commissioner of Customs to release under bond to respondent Eusebio
Dichoco the shipment of foodstuffs in question pending final judgment of the case and from citing or declaring said
petitioner in contempt of court for failure to release said foodstuffs, etc.

An answer was filed, by counsel, for both respondent Court of Tax Appeals and Eusebio Dichoco. In their answer, respondent
allege special and affirmative defenses, contending that the instant petition is fatally defective, andcertiorari does not lie;
that there is no legal basis for the injunction; and that the importation was not a "prohibited importation" and can be
released under bond pursuant to Section 2301 of the Tariff and Customs Code. Respondents pray for the dismissal of the
petition and the dissolution of the temporary restraining order.

Private respondent Eusebio Dichoco, in contending that the instant petition is without basis in fact and in law, does not
deny that "articles of prohibited importation cannot be released under bond" as provided in section 2301 of the Tariff and
Customs Code. He, however, vigorously denies that the "foodstuffs in question are articles of prohibited importation." He
argues that the Tariff and Customs Code distinguishes articles of "prohibited importation" from those that can be imported
"only upon conditions prescribed by law" or "importation effected contrary to law." He further argues that Section 102 of the
Tariff and Customs Code, which enumerates the articles of "prohibited importations", refers to contraband or absolutely
prohibited articles and concludes in its sub-paragraph (k) with a general statement, "all other articles the importation of
which is prohibited by law." Respondent maintains that under the well known rule of ejusdem generis, this general
statement must be restricted only to those articles which are absolutely prohibited or those considered contraband.
Respondent then insists that foodstuffs belong to that kind of importation that are, under Section 1207 of the Tariff and
Customs Code, "subject to importation only upon conditions prescribed by law", as distinguished from articles "of prohibited
importation," mentioned in the same section; that said foodstuffs, furthermore, can be classified under "importation
effected contrary to law" as distinguished from "prohibited importation" mentioned in section 2530 of the same Code.
Respondent likewise argues that section 2307 also distinguishes different kinds of importations when it provides that there
can be no redemption "where the importation is absolutely prohibited", but allows redemption of other kinds of importation
including forfeited foodstuffs. Respondent claims that section 2601 also makes the same distinction when it provides that
"seized property, other than contraband" shall be subject to sale. Respondent points out that both the Central Bank and the
Bureau of Customs, through their authorized counsel, admitted that the foodstuffs are "not prohibited importation under
section 102 of the Tariff and Customs Code," which admission bars them from asserting the contrary. 1 It is, therefore,
asserted by respondent that the imported foodstuffs in question are not contraband, and are not, as stated by respondent
court, among the prohibited importations enumerated in Section 102 of the Tariff and Customs Code, 2 and so said
foodstuffs may be released under bond as provided in Section 2301 of the same Code. Respondent likewise points out that
both the Central Bank and the Bureau of Customs have been releasing outright imported foodstuffs to selected importers.
Respondent also urges that the purpose of the release of the importation in question is legitimate, for said foodstuffs are
intended to be eaten, and eating is always legitimate; and that the release under bond of the foodstuffs which are fast
deteriorating would be beneficial for all parties concerned. Petitioner argues, finally, that Customs Administrative Order
No. 19-70, dated October 20, 1970, contravenes the Tariff and Customs Code. 3

We cannot sustain the stand of the respondents.

The importation in question is a prohibited importation under Section 102 (k) of the Tariff and Customs Code which
provides, in part, as follows:

"SEC 102. Prohibited Importations. The importation into the Philippines of the following articles is prohibited:

x x x

k. All other articles the importation of which is prohibited by law."

Respondents contend that this last paragraph must, by application of the principles of ejusdem generis, be restricted only
to those articles the importation of which is "absolutely prohibited," or to contraband. This contention is not acceptable. In
the first place, the specific things enumerated in paragraphs (a) to (j), inclusive, of Section 102 have no distinguishable
common characteristics and they differ greatly from one another, and the rule of ejusdem generis "applies only where the
specific words preceding the general expression are of the same nature. Where they are of different genera, the meaning
of the general word remains unaffected by its connection with them." (Black, On Interpretation of Laws, 2nd ed., p. 218; 50
Am. Jur., p. 248).

Moreover, calling contraband only the things "absolutely prohibited by law" is a misnomer, for contraband means any article
the importation or exportation of which is prohibited by law (Black, Law Dictionary).

Section 102, when examined, shows that it prohibits the importation of two categories of articles, namely those which are
absolutely prohibited, for example, those enumerated in paragraphs b, c, d, f, h, and j, and those articles which are
qualifiedly prohibited, that is, those that may be imported subject to certain conditions or limitations, for example, those
enumerated in paragraphs a and i. Accordingly the general provision in paragraph k, to wit: "all other articles the
importation of which is prohibited by law" cannot be so restricted as to comprise only those articles the importation of
which is absolutely prohibited like explosives. Articles of prohibited importation cover not only absolutely prohibited
articles but also qualifiedly prohibited articles. Paragraph (k) is comprehensive in the sense that it prohibits the importation
of all articles not mentioned in the preceding provision but prohibited by other existing statutes (Tejam, Commentaries on
the Tariff Code of the Philippines, Vol. I, p. 6A). The legal effects of the importation of qualifiedly prohibited articles are
the same as those of absolutely prohibited articles. (Geotina v. Court of Tax Appeals, No. L-33500, August 30, 1971, 40 SCRA
362, 379, 383.)

The laws which prohibit importation mentioned in Section 102 (k) include the pertinent Central Bank Circulars which have
the force and effect of laws. "Customs law" includes not only the provisions of the Tariff and Customs Code but also all
other laws and any regulation made pursuant thereto that is subject to enforcement by the Bureau of Customs or otherwise
subject to its jurisdiction (Sec. 3514 of Tariff and Customs Code) and articles imported in violation of Central Bank Circulars
have the status of "merchandize of prohibited importation" (Chan Kian v. Collector of Customs of Manila, Jan. 31, 1966, No.
L-20803, 16 SCRA 133, 136; Seree Investment Co. v. Commissioner of Customs, No. L-21217, Nov. 29, 1965,15 SCRA 431, 434;
Bombay Department Store v. Commissioner of Customs, No. L-20460, Sept. 30, 1965, 15 SCRA 104, 107-108). It cannot be
gainsaid that the importation in question violated Central Bank Circulars, inasmuch as in the words of petitioner
Commissioner of Customs in its decision of January 21, 1971, "it was established thru the admission of claimant (Dichoco)
that the necessary release certificate in connection with his importation was not secured from the Central Bank. In view
thereof, the collector after instituting the necessary seizure proceedings forfeited the 438 packages of foodstuffs for
alleged violation of Central Bank Circulars Nos. 247, 289, 294 and 295 in relation to Section 2530 (f) and Section 102 (k) of
the Tariff and Customs Code." 4 If the importation in question was made contrary to Central Bank circulars, then said
importation is an importation prohibited by law. That importation, even if it be termed "importation effected contrary to
law", as respondents call it, is nonetheless a "prohibited importation."cralaw virtua1aw library

This Court had held:

"Thus, it is now settled that the goods imported without release certificates required in Circulars Nos. 44 and 45 are
merchandise of prohibited importation as this expression is used in said section 1363 (f). To this effect have been, among
others, Commissioner v. Eastern Sea Trading, Commissioner v. Santos, Commissioner v. Nepomuceno, Pascual v.
Commissioner of Customs, Seree Investment Co. v. Commissioner of Customs, and Lazaro v. Commissioner of Customs."
(Sare v. Commissioner of Customs, G.R. No. L-22988, June 30, 1969, 28 SCRA 715, 718.) 5

As a matter of law, no release certificate may be issued to such importation, although it is a no-dollar importation, because
Circular No. 295 provides that:

"No-dollar imports not covered by Circular No. 247 shall not be issued any release certificate . . ."
and the foodstuffs imported by private respondent Dichoco are not among the items listed in Circular No. 247 for which no
release certificates are needed. The reason for this is to protect the countrys international reserve, because every import
of goods or merchandise requires an immediate or future demand for foreign exchange (Pascual v. Commissioner of
Customs, 105 Phil. 1039, 1045).

The law also prohibits the release under bond of the imported foodstuffs in question. This is provided in Section 2301 of the
Tariff and Customs Code which provides:
"Sec. 2301. Warrant for Detention of Property Bond. Upon making any seizure, the Collector shall issue a warrant for
the detention of the property; and if the owner or importer desires to secure the release of the property for legitimate use,
the Collector may surrender it upon the filing of sufficient bond, in an amount to be fixed by him, conditioned for the
payment of the appraised value of the article and/or any fine, expenses and costs which may be adjudged in the case:
Provided, That articles the importation of which is prohibited by law shall not be released under bond." (Emphasis
supplied.)

Customs Administrative Order No. 19-70, dated October 20, 1970, also provides that "all importations seized and forfeited
for violation of Central Bank circulars shall not be allowed to be released under bond, either surety or cash, nor allowed to
be redeemed . . ." This order cannot be said to contravene section 2301 or the Tariff and Customs Code, as contended by
private Respondent. Anent this matter, this Court has held that:

"Respondent importers petition before the tax court was filed to seek judgment sustaining [the importers] right to the
discharge of its importation from the carrying vessel and its release under bond to it and declaring Customs Administrative
Order No. 19-70 null and void as an alleged unauthorized and arbitrary modification or amendment of the provisions of
section 2301 of the tariff and customs code. As already shown above, the said administrative reiteration of the express
prohibition of the cited section against the release under bond of prohibited articles seized and held for forfeiture by the
customs authorities. The tax court of course made no pronouncement of the alleged nullity of the said administrative order,
the validity of which cannot be gainsaid . . ." (Geotina v. Court of Tax Appeals, L-33500, August 30, 1971, 40 SCRA 362, 384-
385).
It may be pertinent to note that Sec. 3 of Republic Act No. 1410 "An Act to prohibit the so called No-dollar Imports except
under certain conditions" also provides that "any violation of this law or any provision hereof shall subject the articles
imported to seizure and confiscation without any right of redemption or release under bond, existing laws to the contrary
notwithstanding.

Private respondent also contends that there were some importations of non-essential consumer goods that were released by
the Bureau of Customs and the Central Bank. This is true. In the record We find, for example, that an importation of fresh
oranges, lemons and grapefruits by Savoy Philippines Hotel was issued Release Certificate No. 20134, dated March 31, 1971
by the Central Bank of the Philippines; that an importation of cheese by Savoy Philippines Hotel was also issued Release
Certificate No. 19980 dated January 20, 1971; and that an importation of Danish cheese by Hotel Intercontinental, Manila,
was also issued Release Certificate No. 39704, dated March 4, 1971.6 These importations, however, cannot be said to have
been made "contrary to law" and were prohibited importations, because the importations were authorized and were
covered by "release certificates," approved pursuant to M. B. Resolution No. 383 dated March 4, 1970. 7 The authority
granted may be justified because it was given to hotels that cater to tourists visiting the country and are, therefore, dollar
earners. In order that the Central Bank might not be accused of arbitrarily favoring certain importers, this Court, speaking
through Mr. Justice Teehankee, has suggested:

"But it might perhaps be desirable that the Central Bank spell out such exceptions and the cases where it will grant prior
specific approvals as against the standing prohibition for the guidance of all concerned, so that it may not be charged with
acting arbitrarily and without any definite set of rules and guidelines that assures equal treatment and equal application its
circulars to all." (Geotina v. Court of Tax Appeals, No. L-33500, August 31, 1970, 40 SCRA 362, 380-381.)

The reason advanced by private respondent for the release of the importation in question is that foodstuffs are intended to
be eaten, and eating is always legitimate. This argument is beside the point. The issue in the present case is whether or not
the foodstuffs were imported contrary to law, and not whether the purpose for which the articles were imported is licit or
illicit. Even if the purpose of importing the foodstuffs be legitimate, that purpose alone will not justify the prohibited
importation, because this is a case where the end does not justify the means.

The final reason advanced by private respondent, that the release under bond of the deteriorating foodstuffs would be
beneficial to all parties concerned, does not cleanse the importation of its illegality and will not justify their release under
bond. The Tariff and Customs Code expressly prohibits the release under bond of articles of prohibited importation. Because
"articles of prohibited importation" are not allowed to be imported, the government expects no revenue from such banned
articles. Regarding this point, this Court has held:
"It is utterly fallacious, therefore, when such banned goods are nevertheless sought to be imported in violation of law, to
assume that it is to the interest of the Government, where the goods are perishable to release them to the importer under
bond to secure payment of the appraised value thereof in case they are finally declared forfeited in favor of the
Government.

"For the code expressly prohibits the release under bond of such articles of prohibited importation. The Government
expects no revenue from such banned articles, since they are not allowed to be imported. Otherwise, the laws prohibition
would be rendered totally nugatory, since such banned articles, which are mostly luxury items, are in great demand and
command sky-high prices assuring great profit to the smuggler. The smuggler would have the greatest profit motive to
wreak havoc upon the currency by purchasing dollars at the highest black market rates to purchase and bring in these high-
profit luxury items. Should he succeed in smuggling them in, his venture is a complete success. If he is caught, then all he
has to do is put up a bond for the release of the goods to secure payment of the appraised value thereof to the
Government, and he can still realize a substantial profit from the sale of the banned goods thus released to him. All the
measures designed by the Central Bank to strengthen and stabilize our peso and to check the unregulated flow of foreign
exchange from the country with the ultimate end of setting aright the countrys economy and financial position would
thereby be set at naught." (Geotina v. Court of Tax Appeals, No. L-33500, August 30, 1971, 40 SCRA 362, 383-384.)

Another issue raised by private respondent is that the instant petition for certiorari is procedurally defective upon the
grounds that the disputed resolution of March 24, 1971 was already final and unappealable because of the failure of
petitioner to file a timely motion for reconsideration. Regarding this point, it may be said that if private respondent meant
that the order of March 24, 1971 had become unassailable and the lapse of fifteen days had given it conclusiveness, said
contention cannot be sustained because the order complained of is interlocutory, and an interlocutory order is such that it
is always subject to correction and amendment before final judgment is rendered in the case.

Private respondent also argues that petitioner has not shown that respondent court committed grave abuse of discretion or
error of jurisdiction in issuing the order complained of. Under Section 1 of Rule 65 of the Rules of Court, certiorari may
issue not only when the inferior court has acted with grave abuse of discretion, but also when it has acted without or in
excess of its jurisdiction. Although a court has jurisdiction over the subject matter and the parties it has been held that if a
court has no power to give certain kinds of relief, and it acts otherwise, it is acting without jurisdiction (14 Am. Jur. 2d., p.
786). It has been shown that the trial court could not, under the law and decisions of this Court, order the release of the
forfeited imported foodstuffs, under bond, and in ordering its release it had acted without or in excess of its jurisdiction.

Private respondent furthermore contends that petitioner had an adequate remedy, that is appeal. Suffice it to state that a
petition for certiorari is the proper procedure for obtaining a relief from, or review of, an interlocutory order. (14 Am. Jur.
2d., p. 789.)

Private respondent finally urges that the instant petition is defective in that the copies of the orders subject thereof were
not certified. This contention has no merit. The Rules of Court should be liberally construed, for they are intended to
secure a method by which the issues may be properly laid before the court. When those issues are already clear before the
court, the deficiency in the observance of the rules should not be given undue importance. What is important is that the
case is decided upon the merits and that it should not be allowed to go off on procedural points. (Co Tiamco v. Diaz, 75
Phil. 672.)

IN VIEW OF THE FOREGOING, the questioned resolutions of respondent Court of Tax Appeals, dated March 24, 1971 and April
19, 1971 in its CTA Case No. 2206 entitled "Eusebio Dichoco, Petitioner, versus Commissioner of Customs, respondent" are
annulled and set aside, and the restraining order issued by this Court on May 5, 1971 is made permanent. No
pronouncement as to costs. It is so ordered.

Concepcion, C.J., Reyes, J.B.L., Castro, Fernando, Teehankee, Barredo, Villamor and Makasiar, JJ., concur.

Makalintal, J., did not take part.

G.R. No. L-32717 November 26, 1970

AMELITO R. MUTUC, petitioner,

vs.
COMMISSION ON ELECTIONS, respondent.

Amelito R. Mutuc in his own behalf.

Romulo C. Felizmena for respondent.

FERNANDO, J.:

The invocation of his right to free speech by petitioner Amelito Mutuc, then a candidate for delegate to the Constitutional
Convention, in this special civil action for prohibition to assail the validity of a ruling of respondent Commission on
Elections enjoining the use of a taped jingle for campaign purposes, was not in vain. Nor could it be considering the
conceded absence of any express power granted to respondent by the Constitutional Convention Act to so require and the
bar to any such implication arising from any provision found therein, if deference be paid to the principle that a statute is
to be construed consistently with the fundamental law, which accords the utmost priority to freedom of expression, much
more so when utilized for electoral purposes. On November 3, 1970, the very same day the case was orally argued, five
days after its filing, with the election barely a week away, we issued a minute resolution granting the writ of prohibition
prayed for. This opinion is intended to explain more fully our decision.

In this special civil action for prohibition filed on October 29, 1970, petitioner, after setting forth his being a resident of
Arayat, Pampanga, and his candidacy for the position of delegate to the Constitutional Convention, alleged that respondent
Commission on Elections, by a telegram sent to him five days previously, informed him that his certificate of candidacy was
given due course but prohibited him from using jingles in his mobile units equipped with sound systems and loud speakers,
an order which, according to him, is "violative of [his] constitutional right ... to freedom of speech." 1 There being no plain,
speedy and adequate remedy, according to petitioner, he would seek a writ of prohibition, at the same time praying for a
preliminary injunction. On the very next day, this Court adopted a resolution requiring respondent Commission on Elections
to file an answer not later than November 2, 1970, at the same time setting the case for hearing for Tuesday November 3,
1970. No preliminary injunction was issued. There was no denial in the answer filed by respondent on November 2, 1970, of
the factual allegations set forth in the petition, but the justification for the prohibition was premised on a provision of the
Constitutional Convention Act, 2which made it unlawful for candidates "to purchase, produce, request or distribute sample
ballots, or electoral propaganda gadgets such as pens, lighters, fans (of whatever nature), flashlights, athletic goods or
materials, wallets, bandanas, shirts, hats, matches, cigarettes, and the like, whether of domestic or foreign origin." 3It was
its contention that the jingle proposed to be used by petitioner is the recorded or taped voice of a singer and therefore a
tangible propaganda material, under the above statute subject to confiscation. It prayed that the petition be denied for
lack of merit. The case was argued, on November 3, 1970, with petitioner appearing in his behalf and Attorney Romulo C.
Felizmena arguing in behalf of respondent.

This Court, after deliberation and taking into account the need for urgency, the election being barely a week away, issued
on the afternoon of the same day, a minute resolution granting the writ of prohibition, setting forth the absence of
statutory authority on the part of respondent to impose such a ban in the light of the doctrine ofejusdem generis as well as
the principle that the construction placed on the statute by respondent Commission on Elections would raise serious doubts
about its validity, considering the infringement of the right of free speech of petitioner. Its concluding portion was worded
thus: "Accordingly, as prayed for, respondent Commission on Elections is permanently restrained and prohibited from
enforcing or implementing or demanding compliance with its aforesaid order banning the use of political jingles by
candidates. This resolution is immediately executory." 4

1. As made clear in our resolution of November 3, 1970, the question before us was one of power. Respondent Commission
on Elections was called upon to justify such a prohibition imposed on petitioner. To repeat, no such authority was granted
by the Constitutional Convention Act. It did contend, however, that one of its provisions referred to above makes unlawful
the distribution of electoral propaganda gadgets, mention being made of pens, lighters, fans, flashlights, athletic goods or
materials, wallets, bandanas, shirts, hats, matches, and cigarettes, and concluding with the words "and the like." 5 For
respondent Commission, the last three words sufficed to justify such an order. We view the matter differently. What was
done cannot merit our approval under the well-known principle of ejusdem generis, the general words following any
enumeration being applicable only to things of the same kind or class as those specifically referred to. 6 It is quite apparent
that what was contemplated in the Act was the distribution of gadgets of the kind referred to as a means of inducement to
obtain a favorable vote for the candidate responsible for its distribution.
The more serious objection, however, to the ruling of respondent Commission was its failure to manifest fealty to a cardinal
principle of construction that a statute should be interpreted to assure its being in consonance with, rather than repugnant
to, any constitutional command or prescription. 7 Thus, certain Administrative Code provisions were given a "construction
which should be more in harmony with the tenets of the fundamental law." 8 The desirability of removing in that fashion the
taint of constitutional infirmity from legislative enactments has always commended itself. The judiciary may even strain
the ordinary meaning of words to avert any collision between what a statute provides and what the Constitution requires.
The objective is to reach an interpretation rendering it free from constitutional defects. To paraphrase Justice Cardozo, if
at all possible, the conclusion reached must avoid not only that it is unconstitutional, but also grave doubts upon that
score. 9

2. Petitioner's submission of his side of the controversy, then, has in its favor obeisance to such a cardinal precept. The view
advanced by him that if the above provision of the Constitutional Convention Act were to lend itself to the view that the
use of the taped jingle could be prohibited, then the challenge of unconstitutionality would be difficult to meet. For, in
unequivocal language, the Constitution prohibits an abridgment of free speech or a free press. It has been our constant
holding that this preferred freedom calls all the more for the utmost respect when what may be curtailed is the
dissemination of information to make more meaningful the equally vital right of suffrage. What respondent Commission did,
in effect, was to impose censorship on petitioner, an evil against which this constitutional right is directed. Nor could
respondent Commission justify its action by the assertion that petitioner, if he would not resort to taped jingle, would be
free, either by himself or through others, to use his mobile loudspeakers. Precisely, the constitutional guarantee is not to
be emasculated by confining it to a speaker having his say, but not perpetuating what is uttered by him through tape or
other mechanical contrivances. If this Court were to sustain respondent Commission, then the effect would hardly be
distinguishable from a previous restraint. That cannot be validly done. It would negate indirectly what the Constitution in
express terms assures. 10

3. Nor is this all. The concept of the Constitution as the fundamental law, setting forth the criterion for the validity of any
public act whether proceeding from the highest official or the lowest functionary, is a postulate of our system of
government. That is to manifest fealty to the rule of law, with priority accorded to that which occupies the topmost rung in
the legal hierarchy. The three departments of government in the discharge of the functions with which it is entrusted have
no choice but to yield obedience to its commands. Whatever limits it imposes must be observed. Congress in the enactment
of statutes must ever be on guard lest the restrictions on its authority, whether substantive or formal, be transcended. The
Presidency in the execution of the laws cannot ignore or disregard what it ordains. In its task of applying the law to the
facts as found in deciding cases, the judiciary is called upon to maintain inviolate what is decreed by the fundamental law.
Even its power of judicial review to pass upon the validity of the acts of the coordinate branches in the course of
adjudication is a logical corollary of this basic principle that the Constitution is paramount. It overrides any governmental
measure that fails to live up to its mandates. Thereby there is a recognition of its being the supreme law.

To be more specific, the competence entrusted to respondent Commission was aptly summed up by the present Chief
Justice thus: "Lastly, as the branch of the executive department although independent of the President to which the
Constitution has given the 'exclusive charge' of the 'enforcement and administration of all laws relative to the conduct of
elections,' the power of decision of the Commission is limited to purely 'administrative questions.'" 11 It has been the
constant holding of this Court, as it could not have been otherwise, that respondent Commission cannot exercise any
authority in conflict with or outside of the law, and there is no higher law than the Constitution. 12 Our decisions which
liberally construe its powers are precisely inspired by the thought that only thus may its responsibility under the
Constitution to insure free, orderly and honest elections be adequately fulfilled. 13 There could be no justification then for
lending approval to any ruling or order issuing from respondent Commission, the effect of which would be to nullify so vital
a constitutional right as free speech. Petitioner's case, as was obvious from the time of its filing, stood on solid footing.

WHEREFORE, as set forth in our resolution of November 3, 1970, respondent Commission is permanently restrained and
prohibited from enforcing or implementing or demanding compliance with its aforesaid order banning the use of political
taped jingles. Without pronouncement as to costs.

Concepcion, C.J., Reyes, J.B.L., Makalintal, Zaldivar, Castro, Barredo and Villamor, JJ., concur.

Dizon and Makasiar, JJ., are on leave.

Separate Opinions

TEEHANKEE, J., concurring:

In line with my separate opinion in Badoy vs. Ferrer 1 on the unconstitutionality of the challenged provisions of the 1971
Constitutional Convention Act, I concur with the views of Mr. Justice Fernando in the main opinion that "there could be no
justification .... for lending approval to any ruling or order issuing from respondent Commission, the effect of which would
be to nullify so vital a constitutional right as free speech." I would only add the following observations:

This case once again calls for application of the constitutional test of reasonableness required by the due process clause of
our Constitution. Originally, respondent Commission in its guidelines prescribed summarily that the use by a candidate of a
"mobile unit roaming around and announcing a meeting and the name of the candidate ... is prohibited. If it is used only
for a certain place for a meeting and he uses his sound system at the meeting itself, there is no violation." 2Acting upon
petitioner's application, however, respondent Commission ruled that "the use of a sound system by anyone be he a
candidate or not whether stationary or part of a mobile unit is not prohibited by the 1971 Constitutional Convention Act"
but imposed the condition "provided that there are no jingles and no streamers or posters placed in carriers."

Respondent Commission's narrow view is that "the use of a 'jingle,' a verbally recorded form of election propaganda, is no
different from the use of a 'streamer' or 'poster,' a printed form of election propaganda, and both forms of election
advertisement fall under the prohibition contained in sec. 12 of R.A. 6132," and "the record disc or tape where said 'jingle'
has been recorded can be subject of confiscation by the respondent Commission under par. (E) of sec. 12 of R.A. 6132." In
this modern day and age of the electronically recorded or taped voice which may be easily and inexpensively disseminated
through a mobile sound system throughout the candidate's district, respondent Commission would outlaw "recorded or
taped voices" and would exact of the candidate that he make use of the mobile sound system only by personal
transmission and repeatedly personally sing his "jingle" or deliver his spoken message to the voters even if he loses his voice
in the process or employ another person to do so personally even if this should prove more expensive and less effective
than using a recorded or taped voice.

Respondent Commission's strictures clearly violate, therefore, petitioner's basic freedom of speech and expression. They
cannot pass the constitutional test of reasonableness in that they go far beyond a reasonable relation to the proper
governmental object and are manifestly unreasonable, oppressive and arbitrary.

Insofar as the placing of the candidate's "streamers" or posters on the mobile unit or carrier is concerned, respondent
Commission's adverse ruling that the same falls within the prohibition of section 12, paragraphs (C) and (E) has not been
appealed by petitioner. I would note that respondent Commission's premise that "the use of a 'jingle' ... is no different from
the use of a 'streamer' or 'poster' "in that these both represent forms of election advertisements to make the candidate
and the fact of his candidacy known to the voters is correct, but its conclusion is not. The campaign appeal of the "jingle"
is through the voters' ears while that of the "streamers" is through the voters' eyes. But if it be held that the Commission's
ban on "jingles" abridges unreasonably, oppressively and arbitrarily the candidate's right of free expression, even though
such "jingles" may occasionally offend some sensitive ears, the Commission's ban on "streamers" being placed on the
candidate's mobile unit or carrier, which "streamers" are less likely to offend the voters' sense of sight should likewise be
held to be an unreasonable, oppressive and arbitrary curtailment of the candidate's same constitutional right.

The intent of the law to minimize election expenses as invoked by respondent Commission, laudable as it may be, should
not be sought at the cost of the candidate's constitutional rights in the earnest pursuit of his candidacy, but is to be fulfilled
in the strict and effective implementation of the Act's limitation in section 12(G) on the total expenditures that may be
made by a candidate or by another person with his knowledge and consent.
G.R. No. 13983 September 1, 1919

LA RAZON SOCIAL "GO TIAOCO Y HERMANOS," plaintiff-appellant,

vs.
UNION INSURANCE SOCIETY OF CANTON, LTD., defendant-appellee.

P. E. del Rosario and W. F. Mueller for appellant.

Crossfield and O'Brien for appellee.

STREET, J.:

This is an action on a policy of marine insurance issued by the Union Insurance Society of Canton, Ltd., upon a cargo of rice
belonging to the plaintiffs, Go Tiaoco Brothers, which was transported in the early days of May, 1915, on the
steamship Hondagua from the port of Saigon to Cebu. On discharging the rice from one of the compartments in the after
hold, upon arrival at Cebu, it was discovered that one thousand four hundred seventy-three sacks and been damages by sea
water. The loss so resulting to the owners of rice, after proper deduction had been made for the portion saved, was three
thousand eight hundred seventy five pesos and twenty-five centavos (P3,875.25). The trial court found that the inflow of
the sea water during the voyage was due to a defect in one of the drain pipes of the ship and concluded that the loss was
not covered by the policy of insurance. Judgment was accordingly entered in favor of the defendant and the plaintiffs
appealed.

The facts with reference to the manner in which the sea water effected entrance into the hold may be summarized as
follows, substantially in accordance with the findings of the trial court:

The drain pipe which served as a discharge from the water closet passed down through the compartment where the rice in
question was stowed and thence out to sea through the wall of the compartment, which was a part of the wall of the ship.
The joint or elbow where the pipe changed its direction was of cast iron; and in course of time it had become corroded and
abraded until a longitudinal opening had appeared in the pipe about one inch in length. This hole had been in existence
before the voyage was begun, and an attempt had been made to repair it by filling with cement and bolting over it a strip
of iron. The effect of loading the boat was to submerge the vent, or orifice, of the pipe until it was about 18 inches or 2
feet below the level of the sea. As a consequence the sea water rose in the pipe. Navigation under these conditions
resulted in the washing out of the cement-filling from the action of the sea water, thus permitting the continued flow of
the salt water into the compartment of rice.

The court found in effect that the opening above described had resulted in course of time from ordinary wear and tear and
not from the straining of the ship in rough weather on that voyage. The court also found that the repairs that had been
made on the pipe were slovenly and defective and that, by reason of the condition of this pipe, the ship was not properly
equipped to receive the rice at the time the voyage was begun. For this reason the court held that the ship was
unseaworthy.

The policy of insurance was signed upon a form long in use among companies engaged in maritime insurance. It purports to
insure the cargo from the following among other risks: "Perils . . . of the seas, men of war, fire, enemies, pirates, rovers,
thieves, jettisons, . . . barratry of the master and mariners, and of all other perils, losses, and misfortunes that have or
shall come to the hurt, detriment, or damage of the said goods and merchandise or any part thereof."

The question whether the insurer is liable on this policy for the loss caused in the manner above stated presents two phases
which are in a manner involved with each other. One has reference to the meaning of the expression "perils of the seas and
all other perils, losses, and misfortunes," as used in the policy; the other has reference to the implied warranty, on the part
of the insured, as to the seaworthiness of the ship.

The meaning of the expression "perils . . . of the seas . . . and all other perils, losses, and misfortunes," used in describing
the risks covered by policies of marine insurance, has been the subject of frequent discussion; and certain propositions
relative thereto are now so generally accepted as to be considered definitely settled.

In the first place it is determined that the words "all other perils, losses, and misfortunes" are to be interpreted as covering
risks which are of like kind (ejusdem generis) with the particular risks which are enumerated in the preceding part of the
same clause of the contract. "According to the ordinary rules of construction," said Lord Macnaghten in Thames and Mersey
Marine Insurance Co. vs. Hamilton, Fraser & Co. ([1887]), 12 A. C., 484, 501), "these words must be interpreted with
reference to the words which immediately precede them. They were no doubt inserted in order to prevent disputes
founded on nice distinctions. Their office is to cover in terms whatever may be within the spirit of the cases previously
enumerated, and so they have a greater or less effect as a narrower or broader view is taken of those cases. For example,
if the expression 'perils of the seas' is given its widest sense the general words have little or no effect as applied to that
case. If no the other hand that expression is to receive a limited construction, as apparently it did in Cullen vs. Butler (5 M.
& S., 461), and loss by perils of the seas is to be confined to loss ex marinae tempestatis discrimine, the general words
become most important. But still, ever since the case of Cullen vs. Butler, when they first became the subject of judicial
construction, they have always been held or assumed to be restricted to cases 'akin to' or resembling' or 'of the same kind
as' those specially mentioned. I see no reason for departing from this settled rule. In marine insurance it is above all things
necessary to abide by settled rules and to avoid anything like novel refinements or a new departure."

It must be considered to be settled, furthermore, that a loss which, in the ordinary course of events, results from the
natural and inevitable action of the sea, from the ordinary wear and tear of the ship, or from the negligent failure of the
ship's owner to provide the vessel with proper equipment to convey the cargo under ordinary conditions, is not a peril of
the sea. Such a loss is rather due to what has been aptly called the "peril of the ship." The insurer undertakes to insure
against perils of the sea and similar perils, not against perils of the ship. As was well said by Lord Herschell in Wilson, Sons
& Co. vs. Owners of Cargo per the Xantho ([1887], 12 A. C., 503,509), there must, in order to make the insurer liable, be
"some casualty, something which could not be foreseen as one of the necessary incidents of the adventure. The purpose of
the policy is to secure an indemnity against accidents which may happen, not against events which must happen."

In the present case the entrance of the sea water into the ship's hold through the defective pipe already described was not
due to any accident which happened during the voyage, but to the failure of the ship's owner properly to repair a defect of
the existence of which he was apprised. The loss was therefore more analogous to that which directly results from simple
unseaworthiness than to that which results from perils of the sea.

The first of the two decisions of the House of Lords from which we have quoted (Thames and Mersey Marine Insurance
Co. vs. Hamilton, Fraser & Co. [1887], 12 A. C., 484) arose upon the following state of facts: In March, 1884,
the Inchmaree was lying at anchor off Diamond Island and was about to start upon her voyage. To this end it became
necessary to fill up her boilers. There was a donkey-engine with a donkey-pump on board, and the donkey-engine was set to
pump up water from the sea into the boilers. Those in charge of the operation did not take the precaution of making sure
that the valve of the aperture leading into one of the boilers was open. This valve happened to be closed. The result was
that the water being unable to make its way into the boiler was forced back and split the air-chamber and so disabled the
pump. It was held that whether the injury occurred through negligence or accidentally without negligence, it was not
covered by the policy, since the loss did not fall either under the words "perils of the seas" or under the more general words
"all other perils, losses, and misfortunes." Lord Bramwell, in the course of his opinion quoted with approbation as definition
given by Lopes L.J. in Pandorf vs. Hamilton (16 Q. B. D., 629), which is as follows: In a sea-worthy ship damage to goods
caused by the action of the sea during transit not attributable to the fault of anybody, is a damage from a peril of the sea.

The second of the decision from the House of Lords from which we have quoted (Wilson, Son & Co. vs. owners of Cargo per
the Xantho [1887], 12 A. C., 503) arose upon the following facts: The owners of certain cargo embarked the same upon the
steamship Xantho. A collision took place in a fog between this vessel and another ship, Valuta. An action was thereupon
instituted by the owners of the cargo against the owners of the Xantho. It was held that if the collision occurred without
fault on the part of the carrying ship, the owners were not liable for the value of the cargo lost by such collision.

Still another case was decided in the House of Lords upon the same date as the preceding two, which is equally instructive
as the others upon the question now under consideration. We refer to Hamilton, Fraser & Co. vs.Pandorf & Co. ([1887], 12
A. C., 518), where it appeared that rice was shipped under a charter party and bills of lading which expected "dangers and
accident of the sea." During the voyage rats gnawed a hole in a pipe on board the ship, whereby sea water effected an
entrance into the ship's hold and damaged the rice. It appeared that there was no neglect or default on the part of the
shipowners or their servants in the matter of attending to the cargo. It was held that this loss resulted from an accident or
peril of the sea and that the shipowners were not responsible. Said Bramwell: "No question of negligence exists in this case.
The damage was caused by the sea in the course of navigation with no default in any one. I am, therefore, of opinion that
the damage was caused by peril of the sea within the meaning of the bill of lading." The point which discriminates this
decision from that now before us is that in the present case the negligence of the shipowners must be accepted as
established. Undoubtedly, if in Hamilton, Fraser & Co. vs. Pandorf & Co. [1887], 12 A. C., 518), it had appeared that this
hold had been gnawed by the rats prior to this voyage and the owners, after having their attention directed to it, had failed
to make adequate repairs, the ship would have been liable.

The three decisions in the House of Lords above referred to contain elaborate discussions concerning the liability of
shipowners and insurers, respectively, for damage happening to cargo in the course of a sea voyage; and it would be
presumptuous for us to undertake to add to what has been there said by the learned judges of that high court. Suffice it to
say that upon the authority of those cases there is no room to doubt the liability of the shipowner for such a loss as
occurred in this case. By parity of reasoning the insurer is not liable; for, generally speaking, the shipowner excepts the
perils of the sea from his engagement under the bill of lading, while this is the very peril against which the insurer intends
to give protection. As applied to the present case it results that the owners of the damages rice must look to the shipowner
for redress and not to the insurer.

The same conclusion must be reached if the question be discussed with reference to the seaworthiness of the ship. It is
universally accepted that in every contract of insurance upon anything which is the subject of marine insurance, a warranty
is implied that the ship shall be seaworthy at the time of the inception of the voyage. This rule is accepted in our own
Insurance Law (Act No. 2427, sec. 106). It is also well settled that a ship which is seaworthy for the purpose of insurance
upon the ship may yet be unseaworthy for the purpose of insurance upon the cargo (Act No. 2427, sec. 106). In
Steel vs. State Line Steamship Co. ([1877], L. R. 3 A. C., 72), a cargo of wheat was laden upon a ship which had a port-hole
insecurely fastened at the time of the lading. This port-hole was about one foot above the water line; and in the course of
the voyage sea water entered the compartment where the wheat was stores and damaged the cargo. It was held that the
ship was unseaworthy with reference to the cargo in question. In Gilroy, Sons & Co. vs. Price & Co. ([1893], 18 A. C., 56), a
cargo of jute was shipped. During the voyage the vessel encountered stormy weather, as a consequence of which the cargo
shifted its position and broke a pipe leading down through the hold from the water closet, with result that water entered
the vessel and the jute was damaged. It was found that the cargo was improperly stowed and that the owners of the ship
were chargeable with negligence for failure to protect the pipe by putting a case over it. It was accordingly held that the
ship was unseaworthy.

From what has been said it follows that the trial court committed no error in absolving the defendant from the complaint.
The judgment must therefore be affirmed, and it is so ordered, with costs.

Arellano, C.J., Johnson, Araullo, Malcolm, Avacena and Moir, JJ., concur.

Separate Opinions

TORRES, J., dissenting:

And is of the opinion that the judgment appealed from should be reversed.
G.R. No. 78413 November 8, 1989

CAGAYAN VALLEY ENTERPRISES, INC., Represented by its President, Rogelio Q. Lim, petitioner,
vs.
THE HON. COURT OF APPEALS and LA TONDEA, INC., respondents.

Efren M. Cacatian for petitioners.

San Jose, Enrique, Lacas, Santos and Borje for private respondent.

REGALADO, J.:

This petition for review on certiorari seeks the nullification of the decision of the Court of Appeals of December 5, 1986 in
CA-G.R. CV No. 06685 which reversed the decision of the trial court, and its resolution dated May 5, 1987 denying
petitioner's motion for reconsideration.

The following antecedent facts generative of the present controversy are not in dispute.

Sometime in 1953, La Tondea, Inc. (hereafter, LTI for short) registered with the Philippine Patent Office pursuant to
Republic Act No. 623 1 the 350 c.c. white flint bottles it has been using for its gin popularly known as "Ginebra San Miguel".
This registration was subsequently renewed on December 4, 1974. 2

On November 10, 1981, LTI filed Civil Case No. 2668 for injunction and damages in the then Branch 1, Court of First
Instance of Isabela against Cagayan Valley Enterprises, Inc. (Cagayan, for brevity) for using the 350 c.c., white flint bottles
with the mark "La Tondea Inc." and "Ginebra San Miguel" stamped or blown-in therein by filling the same with Cagayan's
liquor product bearing the label "Sonny Boy" for commercial sale and distribution, without LTI's written consent and in
violation of Section 2 of Republic Act No. 623, as amended by Republic Act No. 5700. On the same date, LTI further filed
an ex parte petition for the issuance of a writ of preliminary injunction against the defendant therein. 3 On November 16,
1981, the court a quo issued a temporary restraining order against Cagayan and its officers and employees from using the
350 c.c. bottles with the marks "La Tondea" and "Ginebra San Miguel." 4

Cagayan, in its answer, 5 alleged the following defenses:

1. LTI has no cause of action due to its failure to comply with Section 21 of Republic Act No. 166 which
requires the giving of notice that its aforesaid marks are registered by displaying and printing the words
"Registered in the Phil. Patent Office" or "Reg Phil. Pat. Off.," hence no suit, civil or criminal, can be filed
against Cagayan;

2. LTI is not entitled to any protection under Republic Act No. 623, as amended by Republic Act No. 5700,
because its products, consisting of hard liquor, are not among those contemplated therein. What is
protected under said law are beverages like Coca-cola, Royal Tru-Orange, Lem-o-Lime and similar
beverages the bottles whereof bear the words "Reg Phil. Pat. Off.;"

3. No reservation of ownership on its bottles was made by LTI in its sales invoices nor does it require any deposit for the
retention of said bottles; and

4. There was no infringement of the goods or products of LTI since Cagayan uses its own labels and trademark on its
product.

In its subsequent pleadings, Cagayan contended that the bottles they are using are not the registered bottles of LTI since
the former was using the bottles marked with "La Tondea, Inc." and "Ginebra San Miguel" but without the words "property
of" indicated in said bottles as stated in the sworn statement attached to the certificate of registration of LTI for said
bottles.

On December 18, 1981, the lower court issued a writ of preliminary injunction, upon the filing of a bond by LTI in the sum
of P50,000.00, enjoining Cagayan, its officers and agents from using the aforesaid registered bottles of LTI. 6
After a protracted trial, which entailed five (5) motions for contempt filed by LTI against Cagayan, the trial court rendered
judgment 7 in favor of Cagayan, ruling that the complaint does not state a cause of action and that Cagayan was not guilty
of contempt. Furthermore, it awarded damages in favor of Cagayan.

LTI appealed to the Court of Appeals which, on December 5, 1986 rendered a decision in favor of said appellant, the
dispositive portion whereof reads:

WHEREFORE, the decision appealed from is hereby SET ASIDE and judgment is rendered permanently
enjoining the defendant, its officers and agents from using the 350 c.c. white flint bottles with the marks
of ownership "La Tondea, Inc." and "Ginebra San Miguel", blown-in or stamped on said bottles as
containers for defendant's products.

The writ of preliminary injunction issued by the trial court is therefore made permanent.

Defendant is ordered to pay the amounts of:

(1) P15,000.00 as nominal or temperate damages;

(2) P50,000.00 as exemplary damages;

(3) P10,000.00 as attorney's fees; and

8
(4) Costs of suit.

On December 23, 1986, Cagayan filed a motion for reconsideration which was denied by the respondent court in its
resolution dated May 5, 1987, hence the present petition, with the following assignment of errors:

I. The Court of Appeals gravely erred in the decision granting that "there is, therefore,
no need for plaintiff to display the words "Reg. Phil. Pat. Off." in order for it to succeed
in bringing any injunction suit against defendant for the illegal use of its bottles. Rep.
Act No. 623, as amended by Rep. Act No. 5700 simply provides and requires that the
marks or names shall be stamped or marked on the containers."

II. The Court of Appeals gravely erred in deciding that "neither is there a reason to
distinguish between the two (2) sets of marked bottles-those which contain the marks
"Property of La Tondea, Inc., Ginebra San Miguel," and those simply marked La Tondea
Inc., Ginebra San Miguel'. By omitting the words "property of" plaintiff did not open
itself to violation of Republic Act No. 623, as amended, as having registered its marks or
names it is protected under the law."

III. The Honorable Court of Appeals gravely erred in deciding that the words "La
Tondea, Inc. and Ginebra San Miguel" are sufficient notice to the defendant which
should have inquired from the plaintiff or the Philippine Patent Office, if it was lawful
for it to re-use the empty bottles of the plaintiff.

IV. The Honorable Court of Appeals gravely erred in deciding that defendant-appellee
cannot claim good faith from using the bottles of plaintiff with marks "La Tondea, Inc."
alone, short for the description contained in the sworn statement of Mr. Carlos Palanca,
Jr., which was a requisite of its original and renewal registrations.

V. The Honorable Court of Appeals gravely erred in accommodating the appeal on the
dismissals of the five (5) contempt charges.

VI. The Honorable Court of Appeals gravely erred in deciding that the award of damages
in favor of the defendant-appellee, petitioner herein, is not in order. Instead it awarded
nominal or temperate, exemplary damages and attorney's fees without proof of bad
faith. 9

The pertinent provisions of Republic Act No. 623, as amended by Republic Act No. 5700, provides:
 SECTION 1. Persons engaged or licensed to engage in the manufacture, bottling, or selling of soda water,
mineral or aerated waters, cider, milk, cream or other lawful beverages in bottles, boxes, casks, kegs, or
barrels and other similar containers, or in the manufacturing, compressing or selling of gases such as
oxygen, acytelene, nitrogen, carbon dioxide ammonia, hydrogen, chloride, helium, sulphur, dioxide,
butane, propane, freon, melthyl chloride or similar gases contained in steel cylinders, tanks, flasks,
accumulators or similar containers, with the name or the names of their principals or products, or other
marks of ownership stamped or marked thereon, may register with the Philippine Patent Office a
description of the names or marks, and the purpose for which the containers so marked and used by
them, under the same conditions, rules, and regulations, made applicable by law or regulation to the
issuance of trademarks.

SEC. 2. It shall be unlawful for any person, without the written consent of the manufacturer, bottler, or
seller, who has succesfully registered the marks of ownership in accordance with the provisions of the
next preceding section, to fill such bottles, boxes, kegs, barrels, steel cylinders, tanks, flasks,
accumulators or other similar containers so marked or stamped, for the purpose of sale, or to sell,
disposed of, buy or traffic in, or wantonly destroy the same, whether filled or not, to use the same, for
drinking vessels or glasses or drain pipes, foundation pipes, for any other purpose than that registered by
the manufacturer, bottler or seller. Any violation of this section shall be punished by a fine of not more
than one thousand pesos or imprisonment of not more than one year or both.

SEC. 3. The use by any person other than the registered manufacturer, bottler or seller, without written
permission of the latter of any such bottle, cask, barrel, keg, box, steel cylinders, tanks, flask,
accumulators, or other similar containers, or the possession thereof without written permission of the
manufacturer, by any junk dealer or dealer in casks, barrels, kegs boxes, steel cylinders, tanks, flasks,
accumulators or other similar containers, the same being duly marked or stamped and registered as
herein provided, shall give rise to a prima facie presumption that such use or possession is unlawful.

The above-quoted provisions grant protection to a qualified manufacturer who successfully registered with the Philippine
Patent Office its duly stamped or marked bottles, boxes, casks and other similar containers. The mere use of registered
bottles or containers without the written consent of the manufacturer is prohibited, the only exceptions being when they
are used as containers for "sisi," bagoong," "patis" and similar native products. 10

It is an admitted fact that herein petitioner Cagayan buys from junk dealers and retailers bottles which bear the marks or
names La Tondea Inc." and "Ginebra San Miguel" and uses them as containers for its own liquor products. The contention of
Cagayan that the aforementioned bottles without the words "property of" indicated thereon are not the registered bottles
of LTI, since they do not conform with the statement or description in the supporting affidavits attached to the original
registration certificate and renewal, is untenable.

Republic Act No. 623 which governs the registration of marked bottles and containers merely requires that the bottles, in
order to be eligible for registration, must be stamped or marked with the names of the manufacturers or the names of their
principals or products, or other marks of ownership. No drawings or labels are required but, instead, two photographs of
the container, duly signed by the applicant, showing clearly and legibly the names and other marks of ownership sought to
be registered and a bottle showing the name or other mark or ownership, irremovably stamped or marked, shall be
submitted. 11

The term "Name or Other Mark of Ownership" 12 means the name of the applicant or the name of his principal, or of the
product, or other mark of ownership. The second set of bottles of LTI without the words "property of" substantially
complied with the requirements of Republic Act No. 623, as amended, since they bear the name of the principal, La
Tondea Inc., and of its product, Ginebra San Miguel. The omitted words "property of" are not of such vital indispensability
such that the omission thereof will remove the bottles from the protection of the law. The owner of a trade-mark or trade-
name, and in this case the marked containers, does not abandon it by making minor modifications in the mark or name
itself. 13 With much more reason will this be true where what is involved is the mere omission of the words "property of"
since even without said words the ownership of the bottles is easily Identifiable. The words "La Tondea Inc." and "Ginebra
San Miguel" stamped on the bottles, even without the words "property of," are sufficient notice to the public that those
bottles so marked are owned by LTI.

The claim of petitioner that hard liquor is not included under the term "other lawful beverages" as provided in Section I of
Republic Act No. 623, as amended by Republic Act No. 5700, is without merit. The title of the law itself, which reads " An
Act to Regulate the Use of Duly Stamped or Marked Bottles, Boxes, Casks, Kegs, Barrels and Other Similar Containers"
clearly shows the legislative intent to give protection to all marked bottles and containers of all lawful beverages regardless
of the nature of their contents. The words "other lawful beverages" is used in its general sense, referring to all beverages
not prohibited by law. Beverage is defined as a liquor or liquid for drinking. 14 Hard liquor, although regulated, is not
prohibited by law, hence it is within the purview and coverage of Republic Act No. 623, as amended.

Republic Act No. 623, as amended, has for its purpose the protection of the health of the general public and the prevention
of the spread of contagious diseases. It further seeks to safeguard the property rights of an important sector of Philippine
industry. 15 As held by this Court in Destileria Ayala, Inc. vs. Tan Tay & Co., 16 the purpose of then Act 3070, was to afford a
person a means of Identifying the containers he uses in the manufacture, preservation, packing or sale of his products so
that he may secure their registration with the Bureau of Commerce and Industry and thus prevent other persons from using
them. Said Act 3070 was substantially reenacted as Republic Act No. 623. 17

The proposition that Republic Act No. 623, as amended, protects only the containers of the soft drinks enumerated by
petitioner and those similar thereto, is unwarranted and specious. The rule of ejusdem generiscannot be applied in this
case. To limit the coverage of the law only to those enumerated or of the same kind or class as those specifically mentioned
will defeat the very purpose of the law. Such rule of ejusdem generis is to be resorted to only for the purpose of
determining what the intent of the legislature was in enacting the law. If that intent clearly appears from other parts of the
law, and such intent thus clearly manifested is contrary to the result which would be reached by the appreciation of the
rule of ejusdem generis, the latter must give way. 18

Moreover, the above conclusions are supported by the fact that the Philippine Patent Office, which is the proper and
competent government agency vested with the authority to enforce and implement Republic Act No. 623, registered the
bottles of respondent LTI as containers for gin and issued in its name a certificate of registration with the following
findings:

It appearing, upon due examination that the applicant is entitled to have the said MARKS OR NAMES
registered under R.A. No. 623, the said marks or names have been duly registered this day in the PATENT
OFFICE under the said Act, for gin, Ginebra San Miguel. 19

While executive construction is not necessarily binding upon the courts, it is entitled to great weight and consideration.
The reason for this is that such construction comes from the particular branch of government called upon to implement the
particular law involved. 20

Just as impuissant is petitioners contention that respondent court erred in holding that there is no need for LTI to display
the words "Reg Phil. Pat. Off." in order to succeed in its injunction suit against Cagayan for the illegal use of the bottles. To
repeat, Republic Act No. 623 governs the registration of marked bottles and containers and merely requires that the bottles
and/or containers be marked or stamped by the names of the manufacturer or the names of their principals or products or
other marks of ownership. The owner upon registration of its marked bottles, is vested by law with an exclusive right to use
the same to the exclusion of others, except as a container for native products. A violation of said right gives use to a cause
of action against the violator or infringer.

While Republic Act No. 623, as amended, provides for a criminal action in case of violation, a civil action for damages is
proper under Article 20 of the Civil Code which provides that every person who, contrary to law, wilfully or negligently
causes damage to another, shall indemnify the latter for the same. This particular provision of the Civil Case was clearly
meant to complement all legal provisions which may have inadvertently failed to provide for indemnification or reparation
of damages when proper or called for. In the language of the Code Commission "(t)he foregoing rule pervades the entire
legal system, and renders it impossible that a person who suffers damage because another has violated some legal
provisions, should find himself without relief." 21Moreover, under Section 23 of Republic Act No. 166, as amended, a person
entitled to the exclusive use of a registered mark or tradename may recover damages in a civil action from any person who
infringes his rights. He may also, upon proper showing, be granted injunction.

It is true that the aforesaid law on trademarks provides:

SEC. 21. Requirements of notice of registration of trade-mark.-The registrant of a trade-mark,

heretofore registered or registered under the provisions of this Act, shall give notice that his mark is
registered by displaying with the same as used the words 'Registered in the Philippines Patent Office' or
'Reg Phil. Pat. Off.'; and in any suit for infringement under this Act by a registrant failing so to mark the
goods bearing the registered trade-mark, no damages shall be recovered under the provisions of this Act,
unless the defendant has actual notice of the registration.
Even assuming that said provision is applicable in this case, the failure of LTI to make said marking will not bar civil action
against petitioner Cagayan. The aforesaid requirement is not a condition sine qua non for filing of a civil action against the
infringer for other reliefs to which the plaintiff may be entitled. The failure to give notice of registration will not deprive
the aggrieved party of a cause of action against the infringer but, at the most, such failure may bar recovery of damages
but only under the provisions of Republic Act No. 166.

However, in this case an award of damages to LTI is ineluctably called for. Petitioner cannot claim good faith. The record
shows that it had actual knowledge that the bottles with the blown-in marks "La Tondea Inc." and "Ginebra San Miguel" are
duly registered. In Civil Case No. 102859 of the Court of First Instance of Manila, entitled "La Tondea Inc. versus Diego Lim,
doing business under the name and style 'Cagayan Valley Distillery,' " a decision was rendered in favor of plaintiff therein on
the basis of the admission and/or acknowledgment made by the defendant that the bottles marked only with the words "La
Tondea Inc." and "Ginebra San Miguel" are registered bottles of LTI. 22

Petitioner cannot avoid the effect of the admission and/or acknowledgment made by Diego Lim in the said case. While a
corporation is an entity separate and distinct from its stock-holders and from other corporations with which it may be
connected, where the discreteness of its personality is used to defeat public convenience, justify wrong, protect fraud, or
defend crime, the law will regard the corporation as an association of persons, or in the case of two corporations, merge
them into one. When the corporation is the mere alter ego or business conduit of a person, it may be disregaded. 23

Petitioner's claim that it is separate and distinct from the former Cagayan Valley Distillery is belied by the evidence on
record. The following facts warrant the conclusion that petitioner, as a corporate entity, and Cagayan Valley Distillery are
one and the same. to wit: (1) petitioner is being managed by Rogelio Lim, the son of Diego Lim, the owner and manager of
Cagayan Valley Distellery; (2) it is a family corporation; 24 (3) it is an admitted fact that before petitioner was incorporated
it was under a single proprietorship; 25 (4) petitioner is engaged in the same business as Cagayan Valley Distillery, the
manufacture of wines and liquors; and (5) the factory of petitioner is located in the same place as the factory of the former
Cagayan Valley Distillery.

It is thus clear that herein petitioner is a mere continuation and successor of Cagayan Valley Distillery. It is likewise
indubitable that the admission made in the former case, as earlier explained, is binding on it as cogent proof that even
before the filing of this case it had actual knowledge that the bottles in dispute were registered containers of LTI As held
in La Campana Coffee Factory, Inc., et al. vs. Kaisahan Ng Mga Manggagawa sa La Campana (KKM), et al., 26 where the main
purpose in forming the corporation was to evade one's subsidiary liability for damages in a criminal case, the corporation
may not be heard to say that it has a personality separate and distinct from its members, because to allow it to do so would
be to sanction the use of the fiction of corporate entity as a shield to further an end subversive of justice.

Anent the several motions of private respondent LTI to have petitioner cited for contempt, we reject the argument of
petitioner that an appeal from a verdict of acquittal in a contempt, proceeding constitutes double jeopardy. A failure to do
something ordered by the court for the benefit of a party constitutes civil contempt. 27 As we held inConverse Rubber
Corporation vs. Jacinto Rubber & Plastics Co., Inc.:

...True it is that generally, contempt proceedings are characterized as criminal in nature, but the more
accurate juridical concept is that contempt proceedings may actually be either civil or criminal, even if
the distinction between one and the other may be so thin as to be almost imperceptible. But it does exist
in law. It is criminal when the purpose is to vindicate the authority of the court and protect its outraged
dignity. It is civil when there is failure to do something ordered by a court to be done for the benefit of a
party (3 Moran Rules of Court, pp. 343-344, 1970 ed.; see also Perkins vs. Director of Prisons, 58 Phil. 272;
Harden vs. Director of Prisons, 81 Phil. 741.) And with this distinction in mind, the fact that the injunction
in the instant case is manifestly for the benefit of plaintiffs makes of the contempt herein involved civil,
not criminal. Accordingly, the conclusion is inevitable that appellees have been virtually found by the trial
court guilty of civil contempt, not criminal contempt, hence, the rule on double jeopardy may not be
invoked. 28

The contempt involved in this case is civil and constructive in nature, it having arisen from the act of Cagayan in violating
the writ of preliminary injunction of the lower court which clearly defined the forbidden act, to wit:

NOW THEREFORE, pending the resolution of this case by the court, you are enjoined from using the 350
c.c. white flint bottles with the marks La Tondea Inc.,' and 'Ginebra San Miguel' blown-in or stamped into
the bottles as containers for the defendant's products. 19

On this incident, two considerations must be borne in mind. Firstly, an injunction duly issued must be obeyed, however
erroneous the action of the court may be, until its decision is overruled by itself or by a higher court. 30Secondly, the
American rule that the power to judge a contempt rests exclusively with the court contemned does not apply in this
Jurisdiction. The provision of the present Section 4, Rule 71 of the Rules of Court as to where the charge may be filed is
permissive in nature and is merely declaratory of the inherent power of courts to punish contumacious conduct. Said rules
do not extend to the determination of the jurisdiction of Philippine courts. 31 In appropriate case therefore, this Court may,
in the interest of expedient justice, impose sanctions on contemners of the lower courts.

Section 3 of Republic Act No. 623, as amended, creates a prima facie presumption against Cagayan for its unlawful use of
the bottles registered in the name of LTI Corollarily, the writ of injunction directing petitioner to desist from using the
subject bottles was properly issued by the trial court. Hence, said writ could not be simply disregarded by Cagayan without
adducing proof sufficient to overcome the aforesaid presumption. Also, based on the findings of respondent court, and the
records before us being sufficient for arbitrament without remanding the incident to the court a quo petitioner can be
adjudged guilty of contempt and imposed a sanction in this appeal since it is a cherished rule of procedure for this Court to
always strive to settle the entire controversy in a single proceeding, 32 We so impose such penalty concordant with the
preservative principle and as demanded by the respect due the orders, writs and processes of the courts of justice.

WHEREFORE, judgment is hereby rendered DENYING the petition in this case and AFFIRMING the decision of respondent
Court of Appeals. Petitioner is hereby declared in contempt of court and ORDERED to pay a fine of One Thousand Pesos
(P1,000.00), with costs.

SO ORDERED.

Paras, Padilla and Sarmiento, JJ., concur.

Melencio-Herrera (Chairperson), J., is on leave.

G.R. No. L-47757-61 January 28, 1980

THE PEOPLE OF THE PHILIPPINES, ABUNDIO R. ELLO, As 4th Assistant of Provincial Bohol VICENTE DE LA SERNA. JR., as
complainant all private prosecutor, petitioners,
vs.
HON. VICENTE B. ECHAVES, JR., as Judge of the Court of First Instance of Bohol Branch II, ANO DACULLO, GERONIMO
OROYAN, MARIO APARICI, RUPERTO CAJES and MODESTO S SUELLO,respondents.

AQUINO, J.:p

The legal issue in this case is whether Presidential Decree No. 772, which penalizes squatting and similar acts, applies to
agricultural lands. The decree (which took effect on August 20, 1975) provides:

SECTION 1. Any person who, with the use of force, intimidation or threat, or taking advantage of the
absence or tolerance of the landowner, succeeds in occupying or possessing the property of the latter
against his will for residential, commercial or any other purposes, shall be punished by an imprisonment
ranging from six months to one year or a fine of not less than one thousand nor more than five thousand
pesos at the discretion of the court, with subsidiary imprisonment in case of insolvency. (2nd paragraph is
omitted.)

The record shows that on October 25, 1977 Fiscal Abundio R. Ello filed with the lower court separate informations against
sixteen persons charging them with squatting as penalized by Presidential Decree No. 772. The information against Mario
Aparici which is similar to the other fifteen informations, reads:

That sometime in the year 1974 continuously up to the present at barangay Magsaysay, municipality of
Talibon, province of Bohol, Philippines and within the jurisdiction of this Honorable Court, the above-
named accused, with stealth and strategy, enter into, occupy and cultivate a portion of a grazing land
physically occupied, possessed and claimed by Atty. Vicente de la Serna, Jr. as successor to the pasture
applicant Celestino de la Serna of Pasture Lease Application No. 8919, accused's entrance into the area
has been and is still against the win of the offended party; did then and there willfully, unlawfully, and
feloniously squat and cultivate a portion of the said grazing land; said cultivating has rendered a nuisance
to and has deprived the pasture applicant from the full use thereof for which the land applied for has
been intended, that is preventing applicant's cattle from grazing the whole area, thereby causing damage
and prejudice to the said applicant-possessor-occupant, Atty. Vicente de la Serna, Jr. (sic)

Five of the informations, wherein Ano Dacullo, Geronimo Oroyan, Mario Aparici, Ruperto Cajes and Modesto Suello were the
accused, were raffled to Judge Vicente B. Echaves, Jr. of Branch II (Criminal Cases Nos. 1824, 1828, 1832, 1833 and 1839,
respectively).

Before the accused could be arraigned, Judge Echaves motu proprio issued an omnibus order dated December 9, 1977
dismissing the five informations on the grounds (1) that it was alleged that the accused entered the land through "stealth
and strategy", whereas under the decree the entry should be effected "with the use of force, intimidation or threat, or
taking advantage of the absence or tolerance of the landowner", and (2) that under the rule of ejusdem generis the decree
does not apply to the cultivation of a grazing land.

Because of that order, the fiscal amended the informations by using in lieu of "stealth and strategy" the expression "with
threat, and taking advantage of the absence of the ranchowner and/or tolerance of the said ranchowner". The fiscal asked
that the dismissal order be reconsidered and that the amended informations be admitted.

The lower court denied the motion. It insisted that the phrase "and for other purposes" in the decree does not include
agricultural purposes because its preamble does not mention the Secretary of Agriculture and makes reference to the
affluent class.

From the order of dismissal, the fiscal appealed to this Court under Republic Act No. 5440. The appeal is devoid of merit.

We hold that the lower court correctly ruled that the decree does not apply to pasture lands because its preamble shows
that it was intended to apply to squatting in urban communities or more particularly to illegal constructions in squatter
areas made by well-to-do individuals. The squating complained of involves pasture lands in rural areas.
The preamble of the decree is quoted below:

WHEREAS, it came to my knowledge that despite the issuance of Letter of Instruction No. 19 dated
October 2, 1972, directing the Secretaries of National Defense, Public Work. 9 and communications, Social
Welfare and the Director of Public Works, the PHHC General Manager, the Presidential Assistant on
Housing and Rehabilitation Agency, Governors, City and Municipal Mayors, and City and District Engineers,
"to remove an illegal constructions including buildings on and along esteros and river banks, those along
railroad tracks and those built without permits on public and private property." squatting is still a major
problem in urban communities all over the country;

WHEREAS, many persons or entities found to have been unlawfully occupying public and private lands
belong to the affluent class;

WHEREAS, there is a need to further intensify the government's drive against this illegal and nefarious
practice.

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

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

SECTION 1. It shall be unlawful for any person corporation or association to enter or occupy, through
force, intimidation, threat, strategy or stealth, any public agriculture land including such public lands as
are granted to private individuals under the provision of the Public Land Act or any other laws providing
for the of public agriculture lands in the Philippines and are duly covered by the corresponding
applications for the notwithstanding standing the fact that title thereto still remains in the Government
or for any person, natural or judicial to investigate induce or force another to commit such acts.

Violations of the law are punished by a fine of not exceeding one thousand or imprisonment for not more than one year, or
both such fine and imprisonment in the discretion of the court, with subsidiary imprisonment in case of insolvency. (See
People vs. Lapasaran 100 Phil. 40.)

The rule of ejusdem generis (of the same kind or species) invoked by the trial court does not apply to this case. Here, the
intent of the decree is unmistakable. It is intended to apply only to urban communities, particularly to illegal constructions.
The rule of ejusdem generis is merely a tool of statutory construction which is resorted to when the legislative intent is
uncertain (Genato Commercial Corp. vs. Court of Tax Appeals, 104 Phil. 615,618; 28 C.J.S. 1049-50).

WHEREFORE, the trial court's order of dismissal is affirmed. No costs.

SO ORDERED.

Barredo, Antonio, Concepcion Jr. and Abad Santos, J., concur.

 [G. R. No. 5000. March 11, 1909.]
THE UNITED STATES, Plaintiff-Appellant, vs. VICTOR SANTO NIO, Defendant-Appellee.

DECISION
WILLARD, J.:
Act No. 1780 is entitled as follows: An Act to regulate the importation, acquisition, possession, use, and transfer of
firearms, and to prohibit the possession of same except in compliance with the provisions of this Act.
Section 26 of this Act is in part as follows:
It shall be unlawful for any person to carry concealed about his person any bowie knife, dirk, dagger, kris, or
other deadly weapon: Provided, That this prohibition shall not apply to firearms in possession of persons who have
secured a license therefor or who are entitled to carry same under the provisions of this Act.
The amended complaint in this case is as follows:
The undersigned accuses Victor Santo Nino of the violation of Act No. 1780, committed as follows:
That on or about the 16th day of August, 1908, in the city of Manila, Philippine Islands, the said Victor Santo Nino,
voluntarily, unlawfully, and criminally, had in his possession and concealed about his person a deadly weapon, to
wit: One (1) iron bar, about 15 inches in length provided with an iron ball on one end and a string on the other to
tie to the wrist, which weapon had been designed and made for use in fighting, and as a deadly weapon.
With violation of the provisions of section 26 of Act No. 1780 of the Philippine Commission.
A demurrer to this complaint was sustained in the court below the Government has appealed.
The basis for the holding of the court below was that
The words or other deadly weapon only signify a kind of weapon included within the preceding classification. In
other words, the rule of ejusdem generis must be applied in the interpretation of this law, which rule is as
follows: chanrobles virtualawlibrary
The most frequent application of this rule is found where specific and generic terms of the same nature
are employed in the same act, the latter following the former. While in the abstract, general terms are to
be given their natural and full signification, yet where they follow specific words of a like nature they
take their meaning from the latter, and are presumed to embrace only things or persons of the kind
designated by them.
In short, the court below held that the carrying of a revolver concealed about the person would not be a violation of this
Act. The rule of construction above referred to is resorted to only for the purpose of determining what the intent of the
legislature was in enacting the law. If that intent clearly appears from other parts of the law, and such intent thus clearly
manifested is contrary to the result which would reached by application of the rule of ejusdem generis, the latter must give
way. In this case the proviso of the Act clearly indicates that in the view of the legislature the carrying of an unlicensed
revolver would be a violation of the Act. By the proviso it manifested its intention to include in the prohibition weapons
other than the armas blancas therein specified.
The judgment of the court below is reversed, and the case is remanded for further proceedings.
No costs will be allowed to either party in this court. SO ORDERED.
Arellano, C.J., Torres, Mapa, Johnson and Carson, JJ., concur.
G.R. No. L-15045 January 20, 1961

IN RE: PETITION FOR EXEMPTION FROM COVERAGE BY THE SOCIAL SECURITY SYSTEM. ROMAN CATHOLIC ARCHBISHOP OF
MANILA, petitioner-appellant,
vs.
SOCIAL SECURITY COMMISSION, respondent-appellee.

Feria, Manglapus and Associates for petitioner-appellant.

Legal Staff, Social Security System and Solicitor General for respondent-appellee.

GUTIERREZ DAVID, J.:

On September 1, 1958, the Roman Catholic Archbishop of Manila, thru counsel, filed with the Social Security Commission a
request that "Catholic Charities, and all religious and charitable institutions and/or organizations, which are directly or
indirectly, wholly or partially, operated by the Roman Catholic Archbishop of Manila," be exempted from compulsory
coverage of Republic Act No. 1161, as amended, otherwise known as the Social Security Law of 1954. The request was
based on the claim that the said Act is a labor law and does not cover religious and charitable institutions but is limited to
businesses and activities organized for profit. Acting upon the recommendation of its Legal Staff, the Social Security
Commission in its Resolution No. 572, series of 1958, denied the request. The Roman Catholic Archbishop of Manila,
reiterating its arguments and raising constitutional objections, requested for reconsideration of the resolution. The
request, however, was denied by the Commission in its Resolution No. 767, series of 1958; hence, this appeal taken in
pursuance of section 5(c) of Republic Act No. 1161, as amended.

Section 9 of the Social Security Law, as amended, provides that coverage "in the System shall be compulsory upon all
members between the age of sixteen and sixty rears inclusive, if they have been for at least six months a the service of an
employer who is a member of the System, Provided, that the Commission may not compel any employer to become member
of the System unless he shall have been in operation for at least two years and has at the time of admission, if admitted for
membership during the first year of the System's operation at least fifty employees, and if admitted for membership the
following year of operation and thereafter, at least six employees x x x." The term employer" as used in the law is defined
as any person, natural or juridical, domestic or foreign, who carries in the Philippines any trade, business, industry,
undertaking, or activity of any kind and uses the services of another person who is under his orders as regards the
employment, except the Government and any of its political subdivisions, branches or instrumentalities, including
corporations owned or controlled by the Government" (par. [c], see. 8), while an "employee" refers to "any person who
performs services for an 'employer' in which either or both mental and physical efforts are used and who receives
compensation for such services" (par. [d], see. 8). "Employment", according to paragraph [i] of said section 8, covers any
service performed by an employer except those expressly enumerated thereunder, like employment under the Government,
or any of its political subdivisions, branches or instrumentalities including corporations owned and controlled by the
Government, domestic service in a private home, employment purely casual, etc.

From the above legal provisions, it is apparent that the coverage of the Social Security Law is predicated on the existence
of an employer-employee relationship of more or less permanent nature and extends to employment of all kinds except
those expressly excluded.

Appellant contends that the term "employer" as defined in the law should following the principle of ejusdem generis be
limited to those who carry on "undertakings or activities which have the element of profit or gain, or which are pursued for
profit or gain," because the phrase ,activity of any kind" in the definition is preceded by the words "any trade, business,
industry, undertaking." The contention cannot be sustained. The rule ejusdem generis applies only where there is
uncertainty. It is not controlling where the plain purpose and intent of the Legislature would thereby be hindered and
defeated. (Grosjean vs. American Paints Works [La], 160 So. 449). In the case at bar, the definition of the term "employer"
is, we think, sufficiently comprehensive as to include religious and charitable institutions or entities not organized for
profit, like herein appellant, within its meaning. This is made more evident by the fact that it contains an exception in
which said institutions or entities are not included. And, certainly, had the Legislature really intended to limit the operation
of the law to entities organized for profit or gain, it would not have defined an "employer" in such a way as to include the
Government and yet make an express exception of it.

It is significant to note that when Republic Act No. 1161 was enacted, services performed in the employ of institutions
organized for religious or charitable purposes were by express provisions of said Act excluded from coverage thereof (sec.
8, par. [j] subpars. 7 and 8). That portion of the law, however, has been deleted by express provision of Republic Act No.
1792, which took effect in 1957. This is clear indication that the Legislature intended to include charitable and religious
institutions within the scope of the law.

In support of its contention that the Social Security Law was intended to cover only employment for profit or gain,
appellant also cites the discussions of the Senate, portions of which were quoted in its brief. There is, however, nothing
whatsoever in those discussions touching upon the question of whether the law should be limited to organizations for profit
or gain. Of course, the said discussions dwelt at length upon the need of a law to meet the problems of industrializing
society and upon the plight of an employer who fails to make a profit. But this is readily explained by the fact that the
majority of those to be affected by the operation of the law are corporations and industries which are established primarily
for profit or gain.

Appellant further argues that the Social Security Law is a labor law and, consequently, following the rule laid down in the
case of Boy Scouts of the Philippines vs. Araos (G.R. No. L-10091, January 29, 1958) and other cases1, applies only to
industry and occupation for purposes of profit and gain. The cases cited, however, are not in point, for the reason that the
law therein involved expressly limits its application either to commercial, industrial, or agricultural establishments, or
enterprises. .

Upon the other hand, the Social Security Law was enacted pursuant to the "policy of the Republic of the Philippines to
develop, establish gradually and perfect a social security system which shall be suitable to the needs of the people
throughout the Philippines and shall provide protection to employees against the hazards of disability, sickness, old age and
death." (See. 2, Republic Act No. 1161, as amended.) Such enactment is a legitimate exercise of the police power. It affords
protection to labor, especially to working women and minors, and is in full accord with the constitutional provisions on the
"promotion of social justice to insure the well-being and economic security of all the people." Being in fact a social
legislation, compatible with the policy of the Church to ameliorate living conditions of the working class, appellant cannot
arbitrarily delimit the extent of its provisions to relations between capital and labor in industry and agriculture.

There is no merit in the claim that the inclusion of religious organizations under the coverage of the Social Security Law
violates the constitutional prohibition against the application of public funds for the use, benefit or support of any priest
who might be employed by appellant. The funds contributed to the System created by the law are not public funds, but
funds belonging to the members which are merely held in trust by the Government. At any rate, assuming that said funds
are impressed with the character of public funds, their payment as retirement death or disability benefits would not
constitute a violation of the cited provisions of the Constitution, since such payment shall be made to the priest not
because he is a priest but because he is an employee.

Neither may it be validly argued that the enforcement of the Social Security Law impairs appellant's right to disseminate
religious information. All that is required of appellant is to make monthly contributions to the System for covered
employees in its employ. These contributions, contrary to appellant's contention, are not in the nature of taxes on
employment." Together with the contributions imposed upon the employees and the Government, they are intended for the
protection of said employees against the hazards of disability, sickness, old age and death in line with the constitutional
mandate to promote social justice to insure the well-being and economic security of all the people.

IN VIEW OF THE FOREGOING, Resolutions Nos. 572 kind 767, series of 1958, of the Social Security Commission are hereby
affirmed. So ordered with costs against appellant.

Paras, C.J., Padilla, Bautista Angelo, Paredes and Dizon, JJ., concur.
Concepcion, Reyes, J.B.L. and Barrera, JJ., concur in the result.
Bengzon, J., reserves his vote.
COMMISSIONER OF G.R. No. 152609
INTERNAL REVENUE, Petitioner, Present:
Panganiban, J.,
Chairman,
Sandoval-Gutierrez,
- versus - Corona,
Carpio Morales, and
Garcia, JJ
AMERICAN EXPRESS
INTERNATIONAL, INC. Promulgated:
(PHILIPPINE BRANCH),
Respondent. June 29, 2005

DECISION

PANGANIBAN, J.:

A
s a general rule, the value-added tax (VAT) system uses the destination principle. However, our VAT law itself provides for a

clear exception, under which the supply of service shall be zero-rated when the following requirements are met: (1) the

service is performed in the Philippines; (2) the service falls under any of the categories provided in Section 102(b) of the

Tax Code; and (3) it is paid for in acceptable foreign currency that is accounted for in accordance with the regulations of

the Bangko Sentral ng Pilipinas. Since respondents services meet these requirements, they are zero-rated. Petitioners

Revenue Regulations that alter or revoke the above requirements are ultra vires and invalid.

The Case

Before us is a Petition for Review[1] under Rule 45 of the Rules of Court, assailing the February 28, 2002

Decision[2] of the Court of Appeals (CA) in CA-GR SP No. 62727. The assailed Decision disposed as follows:

WHEREFORE, premises considered, the petition is hereby DISMISSED for lack of merit. The
assailed decision of the Court of Tax Appeals (CTA) is AFFIRMED in toto.[3]

The Facts

Quoting the CTA, the CA narrated the undisputed facts as follows:

[Respondent] is a Philippine branch of American Express International, Inc., a corporation duly

organized and existing under and by virtue of the laws of the State of Delaware, U.S.A., with office in the
Philippines at the Ground Floor, ACE Building, corner Rada and de la Rosa Streets, Legaspi Village, Makati
City. It is a servicing unit of American Express International, Inc. - Hongkong Branch (Amex-HK) and is
engaged primarily to facilitate the collections of Amex-HK receivables from card members situated in the
Philippines and payment to service establishments in the Philippines.

Amex Philippines registered itself with the Bureau of Internal Revenue (BIR), Revenue District
Office No. 47 (East Makati) as a value-added tax (VAT) taxpayer effective March 1988 and was issued VAT
Registration Certificate No. 088445 bearing VAT Registration No. 32A-3-004868. For the period January 1,
1997 to December 31, 1997, [respondent] filed with the BIR its quarterly VAT returns as follows:
 Exhibit Period Covered Date Filed

D 1997 1st Qtr. April 18, 1997

F 2nd Qtr. July 21, 1997
G 3rd Qtr. October 2, 1997
H 4th Qtr. January 20, 1998

On March 23, 1999, however, [respondent] amended the aforesaid returns and declared the
following:

Taxable Output Zero-rated Domestic Input

Exh 1997 Sales VAT Sales Purchases VAT

I 1st qtr P59,597.20 P5,959.72 P17,513,801.1 P6,778,182.30 P677,818.23

1
J 2nd qtr 67,517.20 6,751.72 17,937,361.51 9,333,242.90 933,324.29
K 3rd qtr 51,936.60 5,193.66 19,627,245.36 8,438,357.00 843,835.70
L 4th qtr 67,994.30 6,799.43 25,231,225.22 13,080,822.10 1,308,082.21

Total P247,045.3 P24,704.53 P80,309,633.2 P37,630,604.3 P3,763,060.4

0 0 0 3

On April 13, 1999, [respondent] filed with the BIR a letter-request for the refund of its 1997
excess input taxes in the amount of P3,751,067.04, which amount was arrived at after deducting from its
total input VAT paid of P3,763,060.43 its applied output VAT liabilities only for the third and fourth
quarters of 1997 amounting to P5,193.66 and P6,799.43, respectively. [Respondent] cites as basis therefor,
Section 110 (B) of the 1997 Tax Code, to state:

Section 110. Tax Credits. -

xxxxxxxxx

(B) Excess Output or Input Tax. - If at the end of any taxable quarter the output
tax exceeds the input tax, the excess shall be paid by the VAT-registered person. If the
input tax exceeds the output tax, the excess shall be carried over to the succeeding
quarter or quarters. Any input tax attributable to the purchase of capital goods or to
zero-rated sales by a VAT-registered person may at his option be refunded or credited
against other internal revenue taxes, subject to the provisions of Section 112.

There being no immediate action on the part of the [petitioner], [respondents] petition was filed
on April 15, 1999.

In support of its Petition for Review, the following arguments were raised by [respondent]:

A. Export sales by a VAT-registered person, the consideration for which is paid

for in acceptable foreign currency inwardly remitted to the Philippines and accounted
for in accordance with existing regulations of the Bangko Sentral ng Pilipinas, are
subject to [VAT] at zero percent (0%). According to [respondent], being a VAT-registered
entity, it is subject to the VAT imposed under Title IV of the Tax Code, to wit:

Section 102.(sic) 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 o[r] 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) xxx
(2) Services other than those mentioned in
the preceding subparagraph, the consideration is
paid for in acceptable foreign currency
which is remitted inwardly to the Philippines
and accounted for in accordance with the
rules and regulations of the BSP. x x x.

In addition, [respondent] relied on VAT Ruling No. 080-89, dated April 3, 1989,
the pertinent portion of which reads as follows:

In Reply, please be informed that, as a VAT registered entity

whose service is paid for in acceptable foreign currency which is
remitted inwardly to the Philippines and accounted for in accordance
with the rules and regulations of the Central [B]ank of the Philippines,
your service income is automatically zero rated effective January 1,
1998. [Section 102(a)(2) of the Tax Code as amended]. [4] For this, there
is no need to file an application for zero-rate.

B. Input taxes on domestic purchases of taxable goods and services related to

zero-rated revenues are available as tax refund in accordance with Section 106 (now
Section 112) of the [Tax Code] and Section 8(a) of [Revenue] Regulations [(RR)] No. 5-87,
to state:

Section 106. Refunds or tax credits of input tax. -

(A) Zero-rated or effectively Zero-rated Sales. - Any VAT-

registered person, except those covered by paragraph (a) above,
whose sales are zero-rated or are effectively zero-rated, may, within
two (2) years after the close of the taxable quarter when such sales
were made, apply for the issuance of tax credit certificate or refund
of the input taxes due or attributable to such sales, to the extent that
such input tax has not been applied against output tax. x x x. [Section
106(a) of the Tax Code][5]

Section 8. Zero-rating. - (a) In general. - A zero-rated sale is

a taxable transaction for value-added tax purposes. A sale by a VAT-
registered person of goods and/or services taxed at zero rate shall not
result in any output tax. The input tax on his purchases of goods or
services related to such zero-rated sale shall be available as tax credit
or refundable in accordance with Section 16 of these Regulations. x x
x. [Section 8(a), [RR] 5-87].[6]

[Petitioner], in his Answer filed on May 6, 1999, claimed by way of Special and Affirmative
Defenses that:

7. The claim for refund is subject to investigation by the Bureau of Internal

Revenue;

8. Taxes paid and collected are presumed to have been made in accordance
with laws and regulations, hence, not refundable. Claims for tax refund are construed
strictly against the claimant as they partake of the nature of tax exemption from tax
and it is incumbent upon the [respondent] to prove that it is entitled thereto under the
law and he who claims exemption must be able to justify his claim by the clearest grant
of organic or statu[t]e law. An exemption from the common burden [cannot] be
permitted to exist upon vague implications;

9. Moreover, [respondent] must prove that it has complied with the governing
rules with reference to tax recovery or refund, which are found in Sections 204(c) and
229 of the Tax Code, as amended, which are quoted as follows:

Section 204. Authority of the Commissioner to Compromise,

Abate and Refund or Credit Taxes. - The Commissioner may - x x x.

(C) Credit or refund taxes erroneously or illegally received or

penalties imposed without authority, refund the value of internal
revenue stamps when they are returned in good condition by the
 purchaser, and, in his discretion, redeem or change unused stamps
that have been rendered unfit for use and refund their value upon
proof of destruction. No credit or refund of taxes or penalties shall be
allowed unless the taxpayer files in writing with the Commissioner a
claim for credit or refund within two (2) years after payment of the
tax or penalty: Provided, however, That a return filed with an
overpayment shall be considered a written claim for credit or refund.

Section 229. Recovery of tax erroneously or illegally

collected.- No suit or proceeding shall be maintained in any court for
the recovery of any national internal revenue tax hereafter alleged to
have been erroneously or illegally assessed or collected, or of any
penalty claimed to have been collected without authority, or of any
sum alleged to have been excessively or in any manner wrongfully
collected, until a claim for refund or credit has been duly filed with
the Commissioner; but such suit or proceeding may be maintained,
whether or not such tax, penalty or sum has been paid under protest
or duress.

In any case, no such suit or proceeding shall be begun (sic)

after the expiration of two (2) years from the date of payment of the
tax or penalty regardless of any supervening cause that may arise
after payment: Provided, however, That the Commissioner may, even
without written claim therefor, refund or credit any tax, where on the
face of the return upon which payment was made, such payment
appears clearly to have been erroneously paid.

From the foregoing, the [CTA], through the Presiding Judge Ernesto D. Acosta rendered a
decision[7] in favor of the herein respondent holding that its services are subject to zero-rate pursuant to
Section 108(b) of the Tax Reform Act of 1997 and Section 4.102-2 (b)(2) of Revenue Regulations 5-96, the
decretal portion of which reads as follows:

WHEREFORE, in view of all the foregoing, this Court finds the [petition]
meritorious and in accordance with law. Accordingly, [petitioner] is
hereby ORDERED to REFUND to [respondent] the amount of P3,352,406.59 representing
the latters excess input VAT paid for the year 1997.[8]

Ruling of the Court of Appeals

In affirming the CTA, the CA held that respondents services fell under the first type enumerated in Section 4.102-2(b)(2) of
RR 7-95, as amended by RR 5-96. More particularly, its services were not of the same class or of the same nature as project
studies, information, or engineering and architectural designs for non-resident foreign clients; rather, they were services
other than the processing, manufacturing or repacking of goods for persons doing business outside the Philippines. The
consideration in both types of service, however, was paid for in acceptable foreign currency and accounted for in
accordance with the rules and regulations of the Bangko Sentral ng Pilipinas.

Furthermore, the CA reasoned that reliance on VAT Ruling No. 040-98 was unwarranted. By requiring that respondents
services be consumed abroad in order to be zero-rated, petitioner went beyond the sphere of interpretation and into that
of legislation. Even granting that it is valid, the ruling cannot be given retroactive effect, for it will be harsh and oppressive
to respondent, which has already relied upon VAT Ruling No. 080-89 for zero rating.

Hence, this Petition.[9]

The Issue

Petitioner raises this sole issue for our consideration:

Whether or not the Court of Appeals committed reversible error in holding that respondent is entitled to
the refund of the amount of P3,352,406.59 allegedly representing excess input VAT for the year 1997. [10]
 The Courts Ruling

The Petition is unmeritorious.

Sole Issue:
Entitlement to Tax Refund

Section 102 of the Tax Code[11] provides:

Sec. 102. 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 x x x.

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
x x x persons engaged in milling, processing, manufacturing or repacking goods for others; x x x services
of banks, non-bank financial intermediaries and finance companies; x x x 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:

xxxxxxxxx
(3) The supply of x x x commercial knowledge or information;
(4) The supply of any assistance that is ancillary and subsidiary to and is
furnished as a means of enabling the application or enjoyment of x x x any such
knowledge or information as is mentioned in subparagraph (3);
xxxxxxxxx
(6) The supply of technical advice, assistance or services rendered in
connection with technical management or administration of any x x x commercial
undertaking, venture, project or scheme;

xxxxxxxxx

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

"(b) Transactions subject to zero percent (0%) rate. -- The following services performed in the
Philippines by VAT-registered persons shall be subject to zero percent (0%) rate[:]

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

business outside the Philippines which goods are subsequently exported, where the
services are paid for in acceptable foreign currency and accounted for in accordance
with the rules and regulations of the Bangko Sentral ng Pilipinas (BSP);

(2) Services other than those mentioned in the preceding subparagraph, the
consideration for which is paid for in acceptable foreign currency and accounted for in
accordance with the rules and regulations of the [BSP];

xxxxxxxxx

Zero Rating of
Other Services

The law is very clear. Under the last paragraph quoted above, services performed by VAT-registered persons in the
Philippines (other than the processing, manufacturing or repacking of goods for persons doing business outside the
Philippines), when paid in acceptable foreign currency and accounted for in accordance with the rules and regulations of
the BSP, are zero-rated.
Respondent is a VAT-registered person that facilitates the collection and payment of receivables belonging to its non-
resident foreign client, for which it gets paid in acceptable foreign currency inwardly remitted and accounted for in
conformity with BSP rules and regulations. Certainly, the service it renders in the Philippines is not in the same category as
processing, manufacturing or repacking of goods and should, therefore, be zero-rated. In reply to a query of respondent,
the BIR opined in VAT Ruling No. 080-89 that the income respondent earned from its parent companys regional operating
centers (ROCs) was automatically zero-rated effective January 1, 1988. [12]
Service has been defined as the art of doing something useful for a person or company for a fee [13] or useful labor or work
rendered or to be rendered by one person to another.[14] For facilitating in the Philippines the collection and payment of
receivables belonging to its Hong Kong-based foreign client, and getting paid for it in duly accounted acceptable foreign
currency, respondent renders service falling under the category of zero rating. Pursuant to the Tax Code, a VAT of zero
percent should, therefore, be levied upon the supply of that service.[15]

The Credit Card System

and Its Components

For sure, the ancillary business of facilitating the said collection is different from the main business of issuing credit cards.
[16]
Under the credit card system, the credit card company extends credit accommodations to its card holders for the
purchase of goods and services from its member establishments, to be reimbursed by them later on upon proper billing.
Given the complexities of present-day business transactions, the components of this system can certainly function as
separate billable services.

Under RA 8484,[17] the credit card that is issued by banks [18] in general, or by non-banks in particular, refers to any card x x x
or other credit device existing for the purpose of obtaining x x x goods x x x or services x x x on credit; [19] and is being used
usually on a revolving basis.[20] This means that the consumer-credit arrangement that exists between the issuer and the
holder of the credit card enables the latter to procure goods or services on a continuing basis as long as the outstanding
balance does not exceed a specified limit.[21] The card holder is, therefore, given the power to obtain present control of
goods or service on a promise to pay for them in the future.[22]

Business establishments may extend credit sales through the use of the credit card facilities of a non-bank credit card
company to avoid the risk of uncollectible accounts from their customers. Under this system, the establishments do not
deposit in their bank accounts the credit card drafts [23] that arise from the credit sales. Instead, they merely record their
receivables from the credit card company and periodically send the drafts evidencing those receivables to the latter.

The credit card company, in turn, sends checks as payment to these business establishments, but it does not redeem the
drafts at full price. The agreement between them usually provides for discounts to be taken by the company upon its
redemption of the drafts.[24] At the end of each month, it then bills its credit card holders for their respective drafts
redeemed during the previous month. If the holders fail to pay the amounts owed, the company sustains the loss. [25]

In the present case, respondents role in the consumer credit [26] process described above primarily consists of gathering the
bills and credit card drafts of different service establishments located in the Philippines and forwarding them to the ROCs
outside the country. Servicing the bill is not the same as billing. For the former type of service alone, respondent already
gets paid.

The parent company -- to which the ROCs and respondent belong -- takes charge not only of redeeming the drafts from the
ROCs and sending the checks to the service establishments, but also of billing the credit card holders for their respective
drafts that it has redeemed. While it usually imposes finance charges [27]upon the holders, none may be exacted by
respondent upon either the ROCs or the card holders.

Branch and Home Office

By designation alone, respondent and the ROCs are operated as branches. This means that each of them is a unit, an
offshoot, lateral extension, or division [28] located at some distance from the home office [29] of the parent company; carrying
separate inventories; incurring their own expenses; and generating their respective incomes. Each may conduct sales
operations in any locality as an extension of the principal office.[30]

The extent of accounting activity at any of these branches depends upon company policy,[31] but the financial reports of the
entire business enterprise -- the credit card company to which they all belong -- must always show its financial position,
results of operation, and changes in its financial position as a single unit. [32] Reciprocal accounts are reconciled or
eliminated, because they lose all significance when the branches and home office are viewed as a single entity.[33] In like
manner, intra-company profits or losses must be offset against each other for accounting purposes.

Contrary to petitioners assertion,[34] respondent can sell its services to another branch of the same parent company.[35] In
fact, the business concept of a transfer price allows goods and services to be sold between and among intra-company units
at cost or above cost.[36] A branch may be operated as a revenue center, cost center, profit center or investment center,
depending upon the policies and accounting system of its parent company.[37] Furthermore, the latter may choose not to
make any sale itself, but merely to function as a control center, where most or all of its expenses are allocated to any of its
branches.[38]

Gratia argumenti that the sending of drafts and bills by service establishments to respondent is equivalent to the act of
sending them directly to its parent company abroad, and that the parent companys subsequent redemption of these drafts
and billings of credit card holders is also attributable to respondent, then with greater reason should the service rendered
by respondent be zero-rated under our VAT system. The service partakes of the nature of export sales as applied to goods,
[39]
especially when rendered in the Philippines by a VAT-registered person [40] that gets paid in acceptable foreign currency
accounted for in accordance with BSP rules and regulations.

VAT Requirements for

the Supply of Service

The VAT is a tax on consumption [41] expressed as a percentage of the value added to goods or services [42]purchased by the
producer or taxpayer.[43] As an indirect tax[44] on services,[45] its main object is the transaction[46] itself or, more concretely,
the performance of all kinds of services [47] conducted in the course of trade or business in the Philippines. [48] These services
must be regularly conducted in this country; undertaken in pursuit of a commercial or an economic activity; [49] for a
valuable consideration; and not exempt under the Tax Code, other special laws, or any international agreement. [50]

Without doubt, the transactions respondent entered into with its Hong Kong-based client meet all these requirements.

First, respondent regularly renders in the Philippines the service of facilitating the collection and payment of receivables
belonging to a foreign company that is a clearly separate and distinct entity.

Second, such service is commercial in nature; carried on over a sustained period of time; on a significant scale; with a
reasonable degree of frequency; and not at random, fortuitous or attenuated.

Third, for this service, respondent definitely receives consideration in foreign currency that is accounted for in conformity
with law.

Finally, respondent is not an entity exempt under any of our laws or international agreements.

Services Subject to
Zero VAT

As a general rule, the VAT system uses the destination principle as a basis for the jurisdictional reach of the tax. [51] Goods
and services are taxed only in the country where they are consumed. Thus, exports are zero-rated, while imports are
taxed.

Confusion in zero rating arises because petitioner equates the performance of a particular type of service with
the consumption of its output abroad. In the present case, the facilitation of the collection of receivables is different from
the utilization or consumption of the outcome of such service. While the facilitation is done in the Philippines,
the consumption is not. Respondent renders assistance to its foreign clients -- the ROCs outside the country -- by receiving
the bills of service establishments located here in the country and forwarding them to the ROCs abroad.
The consumption contemplated by law, contrary to petitioners administrative interpretation, [52] does not imply that the
service be done abroad in order to be zero-rated.

Consumption is the use of a thing in a way that thereby exhausts it. [53] Applied to services, the term means the performance
or successful completion of a contractual duty, usually resulting in the performers release from any past or future liability x
x x.[54] The services rendered by respondent are performed or successfully completed upon its sending to its foreign client
the drafts and bills it has gathered from service establishments here. Its services, having been performed in the Philippines,
are therefore also consumed in the Philippines.

Unlike goods, services cannot be physically used in or bound for a specific place when their destination is determined.
Instead, there can only be a predetermined end of a course [55] when determining the service location or position x x x for
legal purposes.[56] Respondents facilitation service has no physical existence, yet takes place upon rendition, and therefore
upon consumption, in the Philippines. Under the destination principle, as petitioner asserts, such service is subject to VAT
at the rate of 10 percent.

Respondents Services Exempt

from the Destination Principle

However, the law clearly provides for an exception to the destination principle; that is, for a zero percent VAT rate for
services that are performed in the Philippines, paid for in acceptable foreign currency and accounted for in accordance
with the rules and regulations of the [BSP]. [57] Thus, for the supply of service to be zero-rated as an exception, the law
merely requires that first, the service be performed in the Philippines; second, the service fall under any of the categories
in Section 102(b) of the Tax Code; and, third,it be paid in acceptable foreign currency accounted for in accordance with
BSP rules and regulations.

Indeed, these three requirements for exemption from the destination principle are met by respondent. Its facilitation
service is performed in the Philippines. It falls under the second category found in Section 102(b) of the Tax Code, because
it is a service other than processing, manufacturing or repacking of goods as mentioned in the provision. Undisputed is the
fact that such service meets the statutory condition that it be paid in acceptable foreign currency duly accounted for in
accordance with BSP rules. Thus, it should be zero-rated.

Performance of Service versus

Product Arising from Performance

Again, contrary to petitioners stand, for the cost of respondents service to be zero-rated, it need not be tacked in as part of the
cost of goods exported.[58] The law neither imposes such requirement nor associates services with exported goods. It simply states
that the services performed by VAT-registered persons in the Philippines -- services other than the processing, manufacturing or
repacking of goods for persons doing business outside this country -- if paid in acceptable foreign currency and accounted for in
accordance with the rules and regulations of the BSP, are zero-rated. The service rendered by respondent is clearly different from
the product that arises from the rendition of such service. The activity that creates the income must not be confused with the
main business in the course of which that income is realized.[59]

Tax Situs of a
Zero-Rated Service

The law neither makes a qualification nor adds a condition in determining the tax situs of a zero-rated service. Under this
criterion, the place where the service is rendered determines the jurisdiction [60] to impose the VAT.[61] Performed in the
Philippines, such service is necessarily subject to its jurisdiction, [62]for the State necessarily has to have a substantial
connection[63] to it, in order to enforce a zero rate. [64]The place of payment is immaterial; [65] much less is the place where
the output of the service will be further or ultimately used.

Statutory Construction
or Interpretation Unnecessary

As mentioned at the outset, Section 102(b)(2) of the Tax Code is very clear. Therefore, no statutory construction or
interpretation is needed. Neither can conditions or limitations be introduced where none is provided for. Rewriting the law
is a forbidden ground that only Congress may tread upon.

The Court may not construe a statute that is free from doubt. [66] [W]here the law speaks in clear and categorical language,
there is no room for interpretation. There is only room for application. [67] The Court has no choice but to see to it that its
mandate is obeyed.[68]
No Qualifications
Under RR 5-87

In implementing the VAT provisions of the Tax Code, RR 5-87 provides for the zero rating of services other than the
processing, manufacturing or repacking of goods -- in general and without qualifications -- when paid for by the person to
whom such services are rendered in acceptable foreign currency inwardly remitted and duly accounted for in accordance
with the BSP (then Central Bank) regulations. Section 8 of RR 5-87 states:

SECTION 8. Zero-rating. -- (a) In general. -- A zero-rated sale is a taxable transaction for value-
added tax purposes. A sale by a VAT-registered person of goods and/or services taxed at zero rate shall not
result in any output tax. The input tax on his purchases of goods or services related to such zero-rated
sale shall be available as tax credit or refundable in accordance with Section 16 of these Regulations.

xxxxxxxxx

(c) Zero-rated sales of services. -- The following services rendered by VAT-registered

persons are zero-rated:

(1) Services in connection with the processing, manufacturing

or repacking of goods for persons doing business outside the
Philippines, where such goods are actually shipped out of the
Philippines to said persons or their assignees and the services are paid
for in acceptable foreign currency inwardly remitted and duly
accounted for under the regulations of the Central Bank of the
Philippines.

xxxxxxxxx
(3) Services performed in the Philippines other than those
mentioned in subparagraph (1) above which are paid for by the person
or entity to whom the service is rendered in acceptable foreign
currency inwardly remitted and duly accounted for in accordance with
Central Bank regulations. Where the contract involves payment in both
foreign and local currency, only the service corresponding to that paid
in foreign currency shall enjoy zero-rating. The portion paid for in
local currency shall be subject to VAT at the rate of 10%.

RR 7-95
Broad Enough

RR 7-95, otherwise known as the Consolidated VAT Regulations,[69] reiterates the above-quoted provision and further presents as
examples only the services performed in the Philippines by VAT-registered hotels and other service establishments. Again, the
condition remains that these services must be paid in acceptable foreign currency inwardly remitted and accounted for in
accordance with the rules and regulations of the BSP. The term other service establishments is obviously broad enough to
cover respondents facilitation service. Section 4.102-2 of RR 7-95 provides thus:

SECTION 4.102-2. Zero-Rating. -- (a) In general. -- A zero-rated sale by a VAT registered person,
which is a taxable transaction for VAT purposes, shall not result in any output tax. However, the input tax
on his purchases of goods, properties or services related to such zero-rated sale shall be available as tax
credit or refund in accordance with these regulations.

(b) Transaction subject to zero-rate. -- 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, where the
services are paid for in acceptable foreign currency and accounted for in accordance
with the rules and regulations of the BSP;

(2) Services other than those mentioned in the preceding subparagraph, e.g.
those rendered by hotels and other service establishments, the consideration for which
is paid for in acceptable foreign currency and accounted for in accordance with the
rules and regulations of the BSP;

xxxxxxxxx
Meaning of as well as
in RR 5-96
Section 4.102-2(b)(2) of RR 7-95 was subsequently amended by RR 5-96 to read as follows:

Section 4.102-2(b)(2) -- Services other than processing, manufacturing or repacking for other
persons doing business outside the Philippines for goods which are subsequently exported, as well as
services by a resident to a non-resident foreign client such as project studies, information services,
engineering and architectural designs and other similar services, the consideration for which is paid for in
acceptable foreign currency and accounted for in accordance with the rules and regulations of the BSP."

Aside from the already scopious coverage of services in Section 4.102-2(b)(2) of RR 7-95, the amendment introduced by RR
5-96 further enumerates specific services entitled to zero rating. Although superfluous, these sample services are meant to
be merely illustrative. In this provision, the use of the term as well as is not restrictive. As a prepositional phrase with an
adverbial relation to some other word, it simply means in addition to, besides, also or too. [70]

Neither the law nor any of the implementing revenue regulations aforequoted categorically defines or limits the services
that may be sold or exchanged for a fee, remuneration or consideration. Rather, both merely enumerate the items of
service that fall under the term sale or exchange of services. [71]

Ejusdem Generis
Inapplicable

The canon of statutory construction known as ejusdem generis or of the same kind or specie does not apply to Section
4.102-2(b)(2) of RR 7-95 as amended by RR 5-96.
First, although the regulatory provision contains an enumeration of particular or specific words, followed by the general
phrase and other similar services, such words do not constitute a readily discernible class and are patently not of the same
kind.[72] Project studies involve investments or marketing; information services focus on data technology; engineering and
architectural designs require creativity. Aside from calling for the exercise or use of mental faculties or perhaps producing
written technical outputs, no common denominator to the exclusion of all others characterizes these three services.
Nothing sets them apart from other and similar general services that may involve advertising, computers, consultancy,
health care, management, messengerial work -- to name only a few.

Second, there is the regulatory intent to give the general phrase and other similar services a broader meaning. [73] Clearly,
the preceding phrase as well as is not meant to limit the effect of and other similar services.

Third, and most important, the statutory provision upon which this regulation is based is by itself not restrictive. The scope
of the word services in Section 102(b)(2) of the Tax Code is broad; it is not susceptible of narrow interpretation. [74]

VAT Ruling
Nos. 040-98 and 080-89

VAT Ruling No. 040-98 relied upon by petitioner is a less general interpretation at the administrative level, [75] rendered by
the BIR commissioner upon request of a taxpayer to clarify certain provisions of the VAT law. As correctly held by the CA,
when this ruling states that the service must be destined for consumption outside of the Philippines [76] in order to qualify for
zero rating, it contravenes both the law and the regulations issued pursuant to it. [77] This portion of VAT Ruling No. 040-98 is
clearly ultra vires and invalid.[78]

Although [i]t is widely accepted that the interpretation placed upon a statute by the executive officers, whose duty is to
enforce it, is entitled to great respect by the courts, [79] this interpretation is not conclusive and will have to be ignored if
judicially found to be erroneous [80] and clearly absurd x x x or improper.[81]An administrative issuance that overrides the law
it merely seeks to interpret, instead of remaining consistent and in harmony with it, will not be countenanced by this
Court.[82]

In the present case, respondent has relied upon VAT Ruling No. 080-89, which clearly recognizes its zero rating. Changing
this status will certainly deprive respondent of a refund of the substantial amount of excess input taxes to which it is
entitled.

Again, assuming arguendo that VAT Ruling No. 040-98 revoked VAT Ruling No. 080-89, such revocation could not be
given retroactive effect if the application of the latter ruling would only be prejudicial to respondent. [83] Section 246 of the
Tax Code categorically declares that [a]ny revocation x x x of x x x any of the rulings x x x promulgated by the
Commissioner shall not be given retroactive application if the revocation x x x will be prejudicial to the taxpayers. [84]

It is also basic in law that no x x x rule x x x shall be given retrospective effect [85] unless explicitly stated.[86] No indication of
such retroactive application to respondent does the Court find in VAT Ruling No. 040-98. Neither do the exceptions
enumerated in Section 246[87] of the Tax Code apply.
Though vested with the power to interpret the provisions of the Tax Code [88] and not bound by predecessors acts or rulings,
the BIR commissioner may render a different construction to a statute [89] only if the new interpretation is in congruence
with the law. Otherwise, no amount of interpretation can ever revoke, repeal or modify what the law says.

Consumed Abroad
Not Required by Legislature

Interpellations on the subject in the halls of the Senate also reveal a clear intent on the part of the legislators not to
impose the condition of being consumed abroad in order for services performed in the Philippines by a VAT-registered
person to be zero-rated. We quote the relevant portions of the proceedings:

Senator Maceda: Going back to Section 102 just for the moment. Will the Gentleman kindly explain to me
- I am referring to the lower part of the first paragraph with the Provided. Section 102. Provided that the
following services performed in the Philippines by VAT registered persons shall be subject to zero percent.
There are three here. What is the difference between the three here which is subject to zero percent and
Section 103 which is exempt transactions, to being with?

Senator Herrera: Mr. President, in the case of processing and manufacturing or repacking goods for
persons doing business outside the Philippines which are subsequently exported, and where the services
are paid for in acceptable foreign currencies inwardly remitted, this is considered as subject to 0%. But if
these conditions are not complied with, they are subject to the VAT.

In the case of No. 2, again, as the Gentleman pointed out, these three are zero-rated and the other one
that he indicated are exempted from the very beginning. These three enumerations under Section 102 are
zero-rated provided that these conditions indicated in these three paragraphs are also complied with. If
they are not complied with, then they are not entitled to the zero ratings. Just like in the export of
minerals, if these are not exported, then they cannot qualify under this provision of zero rating.

Senator Maceda: Mr. President, just one small item so we can leave this. Under the proviso, it is required
that the following services be performed in the Philippines.

Under No. 2, services other than those mentioned above includes, let us say, manufacturing computers
and computer chips or repacking goods for persons doing business outside the Philippines. Meaning to say,
we ship the goods to them in Chicago or Washington and they send the payment inwardly to the
Philippines in foreign currency, and that is, of course, zero-rated.

Now, when we say services other than those mentioned in the preceding subsection[,] may I have some
examples of these?

Senator Herrera: Which portion is the Gentleman referring to?

Senator Maceda: I am referring to the second paragraph, in the same Section 102. The first paragraph is
when one manufactures or packages something here and he sends it abroad and they pay him, that is
covered. That is clear to me. The second paragraph says Services other than those mentioned in the
preceding subparagraph, the consideration of which is paid for in acceptable foreign currency

One example I could immediately think of -- I do not know why this comes to my mind tonight -- is for
tourism or escort services. For example, the services of the tour operator or tour escort -- just a good
name for all kinds of activities -- is made here at the Midtown Ramada Hotel or at the Philippine Plaza,
but the payment is made from outside and remitted into the country.

Senator Herrera: What is important here is that these services are paid in acceptable foreign currency
remitted inwardly to the Philippines.

Senator Maceda: Yes, Mr. President. Like those Japanese tours which include $50 for the services of a
woman or a tourist guide, it is zero-rated when it is remitted here.

Senator Herrera: I guess it can be interpreted that way, although this tourist guide should also be
considered as among the professionals. If they earn more than P200,000, they should be covered.

xxxxxxxxx

Senator Maceda: So, the services by Filipino citizens outside the Philippines are subject to VAT, and I am
talking of all services. Do big contractual engineers in Saudi Arabia pay VAT?

Senator Herrera: This provision applies to a VAT-registered person. When he performs services in the
Philippines, that is zero-rated.
Senator Maceda: That is right."[90]
Legislative Approval
By Reenactment

Finally, upon the enactment of RA 8424, which substantially carries over the particular provisions on zero rating of services
under Section 102(b) of the Tax Code, the principle of legislative approval of administrative interpretation by reenactment
clearly obtains. This principle means that the reenactment of a statute substantially unchanged is persuasive indication of
the adoption by Congress of a prior executive construction. [91]

The legislature is presumed to have reenacted the law with full knowledge of the contents of the revenue regulations then
in force regarding the VAT, and to have approved or confirmed them because they would carry out the legislative
purpose. The particular provisions of the regulations we have mentioned earlier are, therefore, re-enforced. When a
statute is susceptible of the meaning placed upon it by a ruling of the government agency charged with its enforcement and
the [l]egislature thereafter [reenacts] the provisions [without] substantial change, such action is to some extent
confirmatory that the ruling carries out the legislative purpose. [92]

In sum, having resolved that transactions of respondent are zero-rated, the Court upholds the formers entitlement to the
refund as determined by the appellate court. Moreover, there is no conflict between the decisions of the CTA and CA.
This Court respects the findings and conclusions of a specialized court like the CTA which, by the nature of its functions, is
dedicated exclusively to the study and consideration of tax cases and has necessarily developed an expertise on the
subject.[93]

Furthermore, under a zero-rating scheme, the sale or exchange of a particular service is completely freed from the VAT,
because the seller is entitled to recover, by way of a refund or as an input tax credit, the tax that is included in the cost of
purchases attributable to the sale or exchange. [94] [T]he tax paid or withheld is not deducted from the tax base. [95] Having
been applied for within the reglementary period,[96]respondents refund is in order.

WHEREFORE, the Petition is hereby DENIED, and the assailed Decision AFFIRMED. No pronouncement as to costs.

SO ORDERED.

ARTEMIO V. PANGANIBAN
Associate Justice
Chairman, Third Division

WECONCUR:

ANGELINA SANDOVAL-GUTIERREZ RENATO C. CORONA

Associate Justice Associate Justice

CONCHITA CARPIO MORALES CANCIO C. GARCIA

Associate Justice Associate Justice

ATTESTATION

I attest that the conclusions in the above Decision had been reached in consultation before the case was assigned to the
writer of the opinion of the Courts Division.

ARTEMIO V. PANGANIBAN
Associate Justice
Chairman, Third Division

CERTIFICATION

Pursuant to Section 13, Article VIII of the Constitution, and the Division Chairmans Attestation, it is hereby
certified that the conclusions in the above Decision had been reached in consultation before the case was assigned to the
writer of the opinion of the Courts Division.
HILARIO G. DAVIDE, JR.
Chief Justice
G.R. No. L-35376 September 11, 1980

REPUBLIC OF THE PHILIPPINES and THE DIRECTOR OF LANDS, petitioners,

vs.
HON. NUMERIANO G. ESTENZO, ETC., ET AL., respondents.

DE CASTRO, J.:

Petitioners Republic of the Philippines and The Director of Lands seek the review of the decision dated July 22, 1972 of the
respondent Judge in Cad. Case No. 27, GLRO Rec. No. 1714, Lot No. 4273, Ormoc Cadastre entitled, "The Director of Lands,
petitioner, versus Tiburcio, Florencia, Fabian and Gonzala, all surnamed Aotes, claimants-movants", the dispositive portion
of which reads:

WHEREFORE, the decision of this Court dated September 28, 1940, declaring Lot No. 4273 Public Land is
set aside and said Lot No. 4273 of the Ormoc Cadastre is hereby adjudicated in favor of herein movants in
undivided interests and in equal share of each to GONZALA AOTES, married to Victorino Gormanes;
TIBURCIO AOTES, married to Epefania Maglasang; FLORENCIA AOTES, married to Basilio Barabad; and
FABIAN AOTES, married to Dulcisima Barabad; all adjudicatees are Filipinos, of legal ages, the first named
is residing in Can-adiong, Ormoc City, Philippines; and as soon as this decision shall have become final, let
the Commissioner of Land Registration Commission, Quezon City, issue the corresponding decree of
aforesaid parcel of land in the names of herein adjudicatees, subject to the liability and claims of
creditors, Hens, or other persons for the full period of two (2) years after their distribution as imposed by
Section 4 of Rule 74 of the Rules of Court. 1

The following facts are undisputed in the instant case:

In a decision dated September 28, 1940 by the Cadastral Court, Lot No. 4273 of the Ormoc Cadastre was declared public
land.

On February 23, 1972, private respondents Aotes filed with the Court of First Instance of Leyte, Branch V, Ormoc City,
presided by the respondent Judge a petition to reopen the aforesaid decision dated September 28, 1940 under Rep. Act 931
as amended by Rep. Act 6236 claiming to be the owners and possessors of Lot No. 4273 of the Ormoc Cadastre by virtue of
hereditary succession but, due to their non-appearance on the date of the hearing of the Cadastral Case because of
ignorance and excusable neglect, said land was declared public land and that they had been in adverse, peaceful and
notorious possession of the said parcel of land since the time immemorial, paying all the taxes, interests and penalties.
They pray that the decision of the Cadastral Court affecting Lot No. 4273, Ormoc Cadastre be reopened, and that they be
allowed to file their cadastral answer.

On March 16, 1972, petitioners filed an opposition to the aforesaid petition on the ground that such petition is barred by
the expiration of the period for reopening cadastral proceedings under Rep. Act 931 which expired on December 31, 1968
and this period has not been extended under the provisions of Rep. Act 6236 because the latter applies only to the
extensions of time limit for the filing of applications for free patent and for judicial confirmation of imperfect or
incomplete titles.

Respondent Judge in its order dated May 9, 1972, denied the opposition for lack of sufficient merit and set the case for
hearing on June 24, 1972.

On July 22, 1972, respondent judge rendered decision setting aside the decision of the cadastral court dated September 28,
1940 declaring Lot No. 4273 public land and adjudicating said lot in favor of the private respondents in undivided interest in
equal share of one-fourth (1/4) each.

Dissatisfied with the decision of the lower court, petitioners filed this instant petition assigning only one error to writ: The
trial court erred in assuming jurisdiction over the petition for reopening of Cadastral Proceedings.

In the Brief, 2 petitioners argue that the lower court has no jurisdiction over the proceedings for reopening of the cadastral
case because under the provision of Rep. Act 931, the period for reopening of cadastral proceedings expired on December
31, 1968, and that period has not been extended by Rep. Act 6236 which applies only to the extension of the time limit for
the filing of applications for free patent and for judicial confirmation of imperfect or incomplete titles and not to
reopening of cadastral proceedings. In the Manifestation and Motion, 3 respondents Aotes claim that considering the time
limit for firing applications for free patents and for judicial confirmation of incomplete and imperfect titles has been
extended up to December 31, 1980, the reopening of cadastral cases should also be extended until December 31, 1980 in
fairness and justice to them.

The sole issue to be resolved, considering the above facts, is whether or not Rep. Act 6236 which provides for the extension
of the time limit to file applications for free patent and for judicial confirmation of imperfect or incomplete titles to
December 31, 1976 applies also to the reopening of cadastral proceedings on certain lands which were declared public
lands.

There is merit in the petition.

By way of background, Rep. Act 931, which was approved on June 20, 1953, is an act to authorize the filing in the proper
court, under certain conditions, of certain claims of title to parcels of land that have been declared public land, by virtue
of judicial decisions rendered within the forty years next preceding the approval of this act. Under this aforesaid act, all
persons claiming title to parcels of land that have been the object of cadastral proceedings, who at the time of the survey
were in actual possession of the same but for some justifiable reason had been unable to file their claim in the proper court
during the time limit established by law, in case such parcels of land, on account of their failure to file such claims, have
been, or are about to be declared land of the public domain, by virtue of judicial proceedings instituted within the forty
years next preceding the approval of this act, are granted the right within five years after the date on which this act shall
take effect, to petition for a reopening of the judicial proceedings under the provisions of Act 2259. Rep. Act 2061, which
took effect on June 13, 1958, refers to an act setting a new time limit for the filing of applications for free patents, for the
judicial confirmation of imperfect or incomplete titles, and for the reopening of judicial proceedings on certain lands which
were declared public lands. Under this act the time for filing applications shall not extend beyond December 31, 1968. Rep.
Act 6236, approved on June 19, 1971, however, extended the time limit for the filing of applications for free patents and
for the judicial confirmation of imperfect or incomplete titles not to extend beyond December 31, 1976. In resume, Rep.
Act 931 granted a right within 5 years from June 20, 1953 to petition for a reopening of cadastral proceedings. Rep. Act
2061 fixed a new time limit which is up to December 31, 1968 to file applications for free patents, for the judicial
confirmation of imperfect or incomplete titles and for the reopening of judicial proceedings on certain lands which were
declared public land. Rep. Act 6236 extended the time limit which is up to December 31, 1976 for the filing of applications
for free patents and for the judicial confirmation of imperfect or incomplete titles.

Respondent Aotes filed on February 23, 1972 a petition to reopen the decision of the Cadastral Court under Rep. Act 931 as
amended by Rep. Act 6236. Respondents Aotes claim that since the time limit for filing applications for free patents and
applications for judicial confirmation of incomplete and imperfect titles have been extended up to December 31, 1980, the
reopening of cadastral cases is also extended until December 31, 1980. Rep. Act 6236, the very law on which respondents
Aotes bases his petition to reopen the cadastral proceedings fails to supply any basis for respondents' contention. It will be
noted that while Rep. Act 2061 fixed the time to reopen cadastral cases which shall not extend beyond December 31, 1968,
no similar provision is found in Rep. Act 6236 expressly 'extending the time limit for the reopening of cadastral proceedings
on parcels of land declared public land. As correctly pointed out by petitioners, the extension as provided for by the Rep.
Act 6236 makes no reference to reopening of cadastral cases as the earlier law, Rep. Act 2061, expressly did. Under the
legal maxim of statutory construction, expressio unius est exclusio alterius (Express Mention is Implied Exclusion), the
express mention of one thing in a law, as a general rule, means the exclusion of others not expressly mentioned. This rule,
as a guide to probable legislative intent, is based upon the rules of logic and the natural workings of the human mind. 4 If
Rep. Act 6236 had intended that the extension it provided for applies also to reopening of cadastral cases, it would have so
provided in the same way that it provided the extension of time to file applications for free patent and for judicial
confirmation of imperfect or incomplete title. The intention to exclude the reopening of cadastral proceedings or certain
lands which were declared public land in Rep. Act 6236 is made clearer by reference to Rep. Act 2061 which includes the
reopening of cadastral cases, but not so included in Rep. Act 6236.

We hold, therefore, that the extension provided for by Rep. Act 6236 which is the sole basis for filing the respondents Aotes'
petition to reopen the cadastral proceedings applies only to the filing of applications for free patent and for judicial
confirmation of imperfect or incomplete titles and not to reopening of cadastral proceedings like the instant case, a
proceeding entirely different from "filing an application for a free patent or for judicial confirmation of imperfect or
incomplete titles."

Parenthetically, in setting aside the decision dated September 28, 1940, the respondent Judge has concluded that Rep. Act
6236 is applicable also to reopening of cadastral proceedings, thereby, altering Rep. Act 6236. That cannot be done by the
judiciary. That is a function that properly pertains to the legislative branch. As was pointed out in Gonzaga vs. Court of
Appeals: 5 "It has been repeated time and again that where the statutory norm speaks unequivocally, there is nothing for
the courts to do except to apply it. The law, leaving no doubt as to the scope of its operation, must be obeyed. Our
decisions have consistently been to that effect. 6 Likewise, it is a cardinal rule of statutory construction that where the
terms of the statute are clear and unambiguous, no interpretation is called for, and the law is applied as written, 7 for
application is the first duty of courts, and interpretation, only were literal application is impossible or inadequate. 8

More importantly, the lower court has no longer jurisdiction to entertain the petition filed by respondents for reopening the
cadastral proceedings because the latter, as we have noted, did not file the aforesaid petition within the period fixed by
the applicable laws to wit: Rep. Act 931 and 2061. Consequently, the decision dated September 30, 1940 of the Cadastral
Court declaring the land in question a public land has become final and conclusive. It has also acquired the status of res
judicata. It must be remembered that generally, the fundamental principle of res judicata applies to all cases and
proceedings, including land registration or cadastral proceedings. 9 The doctrine of res judicata precludes parties from
relitigating issues actually litigated and determined by a prior and final judgment. It is well-settled that a prior judgment is
conclusive in a subsequent suit between the same parties on the subject matter, and on the same cause of action, not only
as to matters which were decided in the first action, but also as to every other matter which the parties could have
properly set up in the prior suit. 10 Indeed, settled is the rule that a cadastral case is a judicial proceeding in rem, which, as
such binds the whole world. 11 The final judgment rendered therein is deemed to have settled the status of the land subject
thereof, if not noted thereon, like those of the petitioner, are deemed barred under the principle of res judicata. 12 In the
case of Cano vs. De Camacho, this Court held:

Although the title of Jesus Vao over said Lot 1-B is not as yet indefeasible, no decree having been issued
in his favor, all rights, interests or claims existing before said date are deemed barred by said decision,
under the principle of res judicata, once the decision become final, upon expiration of the thirty-day
period to appeal therefrom. 13

By reiterating its ruling, this Court once more stresses and emphasizes that Rep. Act 6236 does not apply to the reopening
of cadastral proceedings and as a consequence, the respondent Judge has no jurisdiction over the petition of the
respondents Aotes to reopen the cadastral proceedings.

WHEREFORE, judgment is hereby rendered setting aside the decisions dated July 22, 1972 of the respondent Judge and
reiterating that of the Cadastral Court dated September 28, 1940. No pronouncement as to costs.

SO ORDERED.

Teehankee (Chairman), Makasiar, Fernandez, Guerrero and Melencio-Herrera, JJ., concur.

G.R. No. 2122 September 13, 1905

PEDRO T. ACOSTA, plaintiff-appellant,

vs.
DAVID FLOR, defendant-appellee.

W.A. Kincaid for appellant.

Hartigan, Marple, Solignac and Gutierrez for appellee.

MAPA, J.:

It is alleged in the complaint that at the municipal elections held on the 1st day of December, 1903, in the town of Laoag,
Province of Ilocos Norte, the plaintiff and the defendant were candidates for the office of municipal president of the said
town; that as a result of the said election the plaintiff was elected to the said office by a majority of 100 votes, and that
notwithstanding this fact the defendant has usurped said office and unlawfully held the same since the plaintiff was the
person entitled to the exercise of said office. The complaint further sets out other acts in regard to illegalities alleged to
have been committed during the election. The prayer of the complaint is to the effect that judgment be entered against
the defendant, excluding him from the exercise of such office and that the plaintiff be declared to be entitled to the same
and that he be given possession thereof, and for such other and further relief as the facts in the case would warrant in
favor of the plaintiff.

The case having proceeded to trial, the plaintiff introduced various witnesses, all and each of whom testified to facts
which, if true, would more or less gravely affect the legality of the election. Not a single witness, however, confirmed the
allegations contained in the complaint, to the effect that the plaintiff had obtained a majority of 100 votes at the said
election, nor can it be inferred from the evidence introduced by the plaintiff that he, as a result of the said election, or for
any other reason, was entitled to the office of municipal president of Laoag, now held by the defendant.

In view of the evidence introduced at the trial by the plaintiff, and before the defendant had presented his, the court, on
the latter's motion, acquitted the defendant, imposing the costs upon the plaintiff. The court based its action upon the
following grounds: (1) That the plaintiff could not maintain the action brought by him because he had failed to establish his
alleged right to the exercise of the office in question; and (2) that there was no necessity to inquire into the right of the
defendant to hold the said office for the reason that this question had already been determined by the provincial board
after a consideration of the various protests presented to it in regard to irregularities committed during the last election
held at Laoag for the office of municipal president and other municipal officials, and for the further reason that the
presumption is that a person holding a public office was duly appointed or elected thereto.

The plaintiff excepted to his ruling of the court, moved for a new trial, and thereafter brought the case to this court for
review. An examination of the evidence of record supports the finding of the court below to the effect that the plaintiff has
failed to prove in any way, shape, or form that he was entitled to the office in question, as alleged by him in his complaint.
There is no dispute upon this question. The appellant, himself, when the motion of the defendant to dismiss was argued,
and from the decision of which he appealed to this court, clearly admitted that he had failed to establish his right to the
exercise of the office in question. (Page 17 of the bill of exceptions.) And on page 52 of his brief, he also assumes that he
had been unable to establish his alleged right to the office in question.

The question that we have to decide, therefore, is whether, notwithstanding what has already been said, and
notwithstanding the fact that the plaintiff has failed to show that he had any right to the office of municipal president of
Laoag, he can maintain an action such as this for the purpose of excluding the defendant from the exercise of said office on
account of illegalities alleged to have been committed in the elections.

The right to maintain such an action is especially and expressly governed by the provisions of sections 197 to 216 of the
Code of Civil Procedure.

The code, after enumerating in sections 197 and 198 the cases in which such an action may be brought and the persons
against whom they may be brought, goes on to determine with careful distinction those who have the right to maintain such
action.

Section 199 provides that "the Attorney-General of the Islands, or the fiscal of any province, when directed by the Chief
Executive of the Islands, must commence any such action; and when upon the complaint or otherwise he has good reason to
believe that any case specified in the two preceding sections can be established by proof, he must commence such action."
Section 200 provides that "the Attorney-General of the Islands or the fiscal for a province, may, at his own instance, bring
such an action, or he may, on leave of the court in which the action is to be commenced, or a judge thereof in vacation,
bring the action upon the relation of and at the request of another person; but, if the action is brought at the request of
and upon the relation of another person, the officer bringing it may require an indemnity for expenses and costs of the
action, to be given to him by the party at whose request and upon whose relation the same is brought, before commencing
it."

Finally, section 201, under the heading "An individual may commence such action," provides as follows: "A person claiming
to be entitled to a public office, unlawfully held and exercised by another, may bring an action therefor."

If the legislator had intended to give to all citizens alike the right to maintain an action for usurpation of public office, he
would have plainly said so in order to avoid doubt on a subject of such far-reaching importance. A simple provision would
have sufficed for this purpose. Far from it, the legislator has on the contrary especially and specifically provided in sections
199, 200, and 201 who must and who may bring such actions; and it is very clear that it was his intention to give such right
to those expressly mentioned in the above-cited sections and to no other, following the well-known rule of law "inclusio
unius est exclusio alterius." It has been noticed that the above referred to three sections only mention the Attorney-
General, the provincial fiscal, and the individual claiming to be entitled to the office unlawfully held and exercised by
another. It is to be inferred from this last provision that the individual who does not claim to have such a right can not bring
an action for usurpation of public office.

This inference is supported by the provisions of section 202 which says that when the action is against a person for usurping
an office, the complaint shall set forth the name of the person who claims to be entitled thereto, with an averment of his
right to the same. Why should this be required as an essential requisite if it were not necessary that the individual bringing
the action should claim the right to exercise the office in question?

Our opinion is that the law has reserved to the Attorney-General and to the provincial fiscals, as the case may be, the right
to bring such action, an in but one case does the law authorize an individual to bring such an action, to wit, when that
person claims to have the right to the exercise of the office unlawfully held and exercised by another. Aside from this case
an individual can not maintain such action. The law, in our opinion, does not allow of any other construction. If an
individual, whether or not he has the right to the office alleged to have been usurped by another were to be permitted to
maintain such an action, it would serve no purpose and section 201 would be evidently superfluous. It would be a useless
and redundant provision of the code.

As a consequence of what has been said no individual can bring a civil action relating to the usurpation of a public office
without averring that he has a right to the same; and at any stage of the proceedings, if it be shown that such individual
has no such right, the action may be dismissed because there is no legal ground upon which it may proceed when the
fundamental basis of such action is destroyed as is the case here. This is what actually happened in this case. After all of
the evidence presented by the plaintiff had been introduced, it was found, and he himself so admitted that he had failed to
establish in any way, shape, or form that he had any right to the office of municipal president of the town of Laoag as he
had alleged in his complaint without foundation for such allegation. Consequently the judge very properly acquitted the
defendant of the complaint.

The appellant contends that the court below should have first inquired into the right of the defendant to the office in
question and that no other question can be raised or investigated until this point has been determined, and alleges that the
question of the right of the plaintiff to the said office does not arise until it has been determined that the defendant is not
entitled to the exercise of such office. In support of his contention he relies upon the provisions of section 202 of the Code
of Civil Procedure.

This section provides as follows: "When the action is against a person for usurping an office, the complaint shall set forth
the name of the person who claims to be entitled thereto, with an averment of his right to the same; and that the
defendant is unlawfully in possession of the same; and judgment may be rendered upon the right of the defendant, and
also upon the right of the person so averred to be entitled, or only upon the right of the defendant, as justice requires."

From the words above italicized the appellant infers that the court below should have first passed upon the right of the
defendant and afterwards upon the right of the plaintiff. In our opinion this should be done at the same time and in the
same judgment. It is immaterial what method the court may follow in the statement and determination of the questions in
the rendition of his judgment because even though the court may pass upon the right of the plaintiff first, and the right of
the defendant afterwards, or vice versa, this procedure would not vitiate the judgment, provided the court does not fail to
state therein what the rights of the contending parties to the office are. But all of this, of course, presupposes that the
action has been properly brought and duly prosecuted to a judgment. This, at the same time, presupposes that the plaintiff
had a right to maintain his action upon the evidence submitted by him at the trial. It is impossible to prosecute a suit
without a cause of action. Therefore, whenever before judgment it is conclusively proven that the plaintiff has no right to
maintain the action since he has not the essential conditions required by law in order to bring and maintain such action, his
complaint should be dismissed and it becomes unnecessary to pass upon the right of the defendant who has a perfect right
to the undisturbed possession of his office, unless action is brought by a person having a right to maintain the same under
the law.

It may be said that under section 202 the court may only pass upon the right of the defendant when the justice of the case
so demands. This is true, but this only refers to cases where the action is brought by the Attorney-General or by the
provincial fiscal, as the case may be. In such cases it is not necessary that there be a person claiming to be entitled to the
office alleged to have been usurped, because although there be no such person, as in the case of a vacant office, for
instance, the fiscal could and even should bring such action against the person usurping the office in accordance with the
provisions of sections 200 and 199, respectively, as the case may be. The manner in which judgment should be rendered
according to section 202 perfectly meets the various cases provided for in the three preceding sections; and it becomes the
duty of the court to pass upon the rights of the defendants only whenever it is not an essential requisite for the due
prosecution of the action that there be a person claiming to be entitled to the office thus usurped, something which only
happens where the Attorney-General or the fiscal of any province brings the action against the usurper.

As a result of the foregoing, we can not here pass upon the validity or nullity of the election of the defendant, for the
reason, among others which it is not necessary to state here, that the defendant has no right to maintain such an action as
this.

The order of the court below appealed from, is hereby affirmed. After the expiration of twenty days let judgment be
entered in accordance herewith and let the case be remanded to the court from whence it came for further proceedings in
accordance with the law. So ordered.

Arellano, C.J., Torres, Johnson, and Carson, JJ., concur.

Willard, J., did not sit in this case.
G.R. No. L-22301 August 30, 1967

THE PEOPLE OF THE PHILIPPINES, plaintiff-appellee,

vs.
MARIO MAPA Y MAPULONG, defendant-appellant.

Francisco P. Cabigao for defendant-appellant.

Office of the Solicitor General Arturo A. Alafriz, Assistant Solicitor General F. R. Rosete and Solicitor O. C. Hernandez for
plaintiff-appellee.

FERNANDO, J.:

The sole question in this appeal from a judgment of conviction by the lower court is whether or not the appointment to and
holding of the position of a secret agent to the provincial governor would constitute a sufficient defense to a prosecution
for the crime of illegal possession of firearm and ammunition. We hold that it does not.

The accused in this case was indicted for the above offense in an information dated August 14, 1962 reading as follows:
"The undersized accuses MARIO MAPA Y MAPULONG of a violation of Section 878 in connection with Section 2692 of the
Revised Administrative Code, as amended by Commonwealth Act No. 56 and as further amended by Republic Act No. 4,
committed as follows: That on or about the 13th day of August, 1962, in the City of Manila, Philippines, the said accused did
then and there wilfully and unlawfully have in his possession and under his custody and control one home-made revolver
(Paltik), Cal. 22, without serial number, with six (6) rounds of ammunition, without first having secured the necessary
license or permit therefor from the corresponding authorities. Contrary to law."

When the case was called for hearing on September 3, 1963, the lower court at the outset asked the counsel for the
accused: "May counsel stipulate that the accused was found in possession of the gun involved in this case, that he has
neither a permit or license to possess the same and that we can submit the same on a question of law whether or not an
agent of the governor can hold a firearm without a permit issued by the Philippine Constabulary." After counsel sought from
the fiscal an assurance that he would not question the authenticity of his exhibits, the understanding being that only a
question of law would be submitted for decision, he explicitly specified such question to be "whether or not a secret agent
is not required to get a license for his firearm."

Upon the lower court stating that the fiscal should examine the document so that he could pass on their authenticity, the
fiscal asked the following question: "Does the accused admit that this pistol cal. 22 revolver with six rounds of ammunition
mentioned in the information was found in his possession on August 13, 1962, in the City of Manila without first having
secured the necessary license or permit thereof from the corresponding authority?" The accused, now the appellant,
answered categorically: "Yes, Your Honor." Upon which, the lower court made a statement: "The accused admits, Yes, and
his counsel Atty. Cabigao also affirms that the accused admits."

Forthwith, the fiscal announced that he was "willing to submit the same for decision." Counsel for the accused on his part
presented four (4) exhibits consisting of his appointment "as secret agent of the Hon. Feliciano Leviste," then Governor of
Batangas, dated June 2, 1962;1 another document likewise issued by Gov. Leviste also addressed to the accused directing
him to proceed to Manila, Pasay and Quezon City on a confidential mission; 2the oath of office of the accused as such secret
agent,3 a certificate dated March 11, 1963, to the effect that the accused "is a secret agent" of Gov. Leviste. 4 Counsel for
the accused then stated that with the presentation of the above exhibits he was "willing to submit the case on the question
of whether or not a secret agent duly appointed and qualified as such of the provincial governor is exempt from the
requirement of having a license of firearm." The exhibits were admitted and the parties were given time to file their
respective memoranda.1wph1.t

Thereafter on November 27, 1963, the lower court rendered a decision convicting the accused "of the crime of illegal
possession of firearms and sentenced to an indeterminate penalty of from one year and one day to two years and to pay the
costs. The firearm and ammunition confiscated from him are forfeited in favor of the Government."

The only question being one of law, the appeal was taken to this Court. The decision must be affirmed.

The law is explicit that except as thereafter specifically allowed, "it shall be unlawful for any person to . . . possess any
firearm, detached parts of firearms or ammunition therefor, or any instrument or implement used or intended to be used in
the manufacture of firearms, parts of firearms, or ammunition." 5 The next section provides that "firearms and ammunition
regularly and lawfully issued to officers, soldiers, sailors, or marines [of the Armed Forces of the Philippines], the Philippine
Constabulary, guards in the employment of the Bureau of Prisons, municipal police, provincial governors, lieutenant
governors, provincial treasurers, municipal treasurers, municipal mayors, and guards of provincial prisoners and jails," are
not covered "when such firearms are in possession of such officials and public servants for use in the performance of their
official duties."6

The law cannot be any clearer. No provision is made for a secret agent. As such he is not exempt. Our task is equally clear.
The first and fundamental duty of courts is to apply the law. "Construction and interpretation come only after it has been
demonstrated that application is impossible or inadequate without them." 7 The conviction of the accused must stand. It
cannot be set aside.

Accused however would rely on People v. Macarandang,8 where a secret agent was acquitted on appeal on the assumption
that the appointment "of the accused as a secret agent to assist in the maintenance of peace and order campaigns and
detection of crimes, sufficiently put him within the category of a "peace officer" equivalent even to a member of the
municipal police expressly covered by section 879." Such reliance is misplaced. It is not within the power of this Court to
set aside the clear and explicit mandate of a statutory provision. To the extent therefore that this decision conflicts with
what was held in People v. Macarandang, it no longer speaks with authority.

Wherefore, the judgment appealed from is affirmed.

Concepcion, C.J., Reyes, J.B.L., Dizon, Makalintal, Bengzon, J.P., Zaldivar, Sanchez, Castro and Angeles, JJ., concur.
G.R. No. 14129 July 31, 1962

PEOPLE OF THE PHILIPPINES, plaintiff-appellant,

vs.
GUILLERMO MANANTAN, defendant-appellee.

Office of the Solicitor General for plaintiff-appellant.

Padilla Law Office for defendant-appellee.

REGALA, J.:

This is an appeal of the Solicitor General from the order of the Court of First Instance of Pangasinan dismissing the
information against the defendant.

The records show that the statement of the case and the facts, as recited in the brief of plaintiff-appellant, is complete
and accurate. The same is, consequently, here adopted, to wit:

In an information filed by the Provincial Fiscal of Pangasinan in the Court of First Instance of that Province,
defendant Guillermo Manantan was charged with a violation Section 54 of the Revised Election Code. A preliminary
investigation conducted by said court resulted in the finding a probable cause that the crime charged as
committed by defendant. Thereafter, the trial started upon defendant's plea of not guilty, the defense moved to
dismiss the information on the ground that as justice of the peace the defendant is one of the officers enumerated
in Section 54 of the Revised Election Code. The lower court denied the motion to dismiss holding that a justice of
the peace is within the purview Section 54. A second motion was filed by defense counsel who cited in support
thereof the decision of the Court of Appeals in People vs. Macaraeg, (CA-G.R. No. 15613-R, 54 Off. Gaz., pp. 1873-
76) where it was held that a justice of the peace is excluded from the prohibition of Section 54 of the Revised
Election Code. Acting on this second motion to dismiss, the answer of the prosecution, the reply of the defense,
and the opposition of the prosecution, the lower court dismissed the information against the accused upon the
authority of the ruling in the case cited by the defense.

Both parties are submitting this case upon the determination of this single question of law: Is a justice the peace included
in the prohibition of Section 54 of the Revised Election Code?

Section 54 of the said Code reads:

No justice, judge, fiscal, treasurer, or assessor of any province, no officer or employee of the Army, no member of
the national, provincial, city, municipal or rural police force and no classified civil service officer or employee
shall aid any candidate, or exert any influence in any manner in a election or take part therein, except to vote, if
entitled thereto, or to preserve public peace, if he is a peace officer.

Defendant-appellee argues that a justice of the peace is not comprehended among the officers enumerated in Section 54 of
the Revised Election Code. He submits the aforecited section was taken from Section 449 of the Revised Administrative
Code, which provided the following:

SEC. 449. Persons prohibited from influencing elections. No judge of the First Instance, justice of the peace, or
treasurer, fiscal or assessor of any province and no officer or employee of the Philippine Constabulary, or any
Bureau or employee of the classified civil service, shall aid any candidate or exert influence in any manner in any
election or take part therein otherwise than exercising the right to vote.

When, therefore, section 54 of the Revised Election Code omitted the words "justice of the peace," the omission revealed
the intention of the Legislature to exclude justices of the peace from its operation.

The above argument overlooks one fundamental fact. It is to be noted that under Section 449 of the Revised Administrative
Code, the word "judge" was modified or qualified by the phrase "of First instance", while under Section 54 of the Revised
Election Code, no such modification exists. In other words, justices of the peace were expressly included in Section 449 of
the Revised Administrative Code because the kinds of judges therein were specified, i.e., judge of the First Instance and
justice of the peace. In Section 54, however, there was no necessity therefore to include justices of the peace in the
enumeration because the legislature had availed itself of the more generic and broader term, "judge." It was a term not
modified by any word or phrase and was intended to comprehend all kinds of judges, like judges of the courts of First
Instance, Judges of the courts of Agrarian Relations, judges of the courts of Industrial Relations, and justices of the peace.

It is a well known fact that a justice of the peace is sometimes addressed as "judge" in this jurisdiction. It is because a
justice of the peace is indeed a judge. A "judge" is a public officer, who, by virtue of his office, is clothed with judicial
authority (U.S. v. Clark, 25 Fed. Cas. 441, 422). According to Bouvier Law Dictionary, "a judge is a public officer lawfully
appointed to decide litigated questions according to law. In its most extensive sense the term includes all officers
appointed to decide litigated questions while acting in that capacity, including justices of the peace, and even jurors, it is
said, who are judges of facts."

A review of the history of the Revised Election Code will help to justify and clarify the above conclusion.

The first election law in the Philippines was Act 1582 enacted by the Philippine Commission in 1907, and which was later
amended by Act. Nos. 1669, 1709, 1726 and 1768. (Of these 4 amendments, however, only Act No. 1709 has a relation to
the discussion of the instant case as shall be shown later.) Act No. 1582, with its subsequent 4 amendments were later on
incorporated Chapter 18 of the Administrative Code. Under the Philippine Legislature, several amendments were made
through the passage of Acts Nos. 2310, 3336 and 3387. (Again, of these last 3 amendments, only Act No. 3587 has pertinent
to the case at bar as shall be seen later.) During the time of the Commonwealth, the National Assembly passed
Commonwealth Act No. 23 and later on enacted Commonwealth Act No. 357, which was the law enforced until June 1947,
when the Revised Election Code was approved. Included as its basic provisions are the provisions of Commonwealth Acts
Nos. 233, 357, 605, 666, 657. The present Code was further amended by Republic Acts Nos. 599, 867, 2242 and again,
during the session of Congress in 1960, amended by Rep. Acts Nos. 3036 and 3038. In the history of our election law, the
following should be noted:

Under Act 1582, Section 29, it was provided:

No public officer shall offer himself as a candidate for elections, nor shall he be eligible during the time that he
holds said public office to election at any municipal, provincial or Assembly election, except for reelection to the
position which he may be holding, and no judge of the First Instance, justice of the peace, provincial fiscal, or
officer or employee of the Philippine Constabulary or of the Bureau of Education shall aid any candidate or
influence in any manner or take part in any municipal, provincial, or Assembly election under the penalty of being
deprived of his office and being disqualified to hold any public office whatsoever for a term of 5 year: Provide,
however, That the foregoing provisions shall not be construe to deprive any person otherwise qualified of the right
to vote it any election." (Enacted January 9, 1907; Took effect on January 15, 1907.)

Then, in Act 1709, Sec. 6, it was likewise provided:

. . . No judge of the First Instance, Justice of the peace provincial fiscal or officer or employee of the Bureau of
Constabulary or of the Bureau of Education shall aid any candidate or influence in any manner to take part in any
municipal provincial or Assembly election. Any person violating the provisions of this section shall be deprived of
his office or employment and shall be disqualified to hold any public office or employment whatever for a term of
5 years, Provided, however, that the foregoing provisions shall not be construed to deprive any person otherwise
qualified of the right to vote at any election. (Enacted on August 31, 1907; Took effect on September 15, 1907.)

Again, when the existing election laws were incorporated in the Administrative Code on March 10, 1917, the provisions in
question read:

SEC. 449. Persons prohibited from influencing elections. No judge of the First Instance, justice of the peace, or
treasurer, fiscal or assessor of any province and no officer or employee of the Philippine Constabulary or any
Bureau or employee of the classified civil service, shall aid any candidate or exert influence in any manner in any
election or take part therein otherwise than exercising the right to vote. (Emphasis supplied)

After the Administrative Code, the next pertinent legislation was Act No. 3387. This Act reads:

SEC. 2636. Officers and employees meddling with the election. Any judge of the First Instance, justice of the
peace, treasurer, fiscal or assessor of any province, any officer or employee of the Philippine Constabulary or of
the police of any municipality, or any officer or employee of any Bureau of the classified civil service, who aids any
candidate or violated in any manner the provisions of this section or takes part in any election otherwise by
exercising the right to vote, shall be punished by a fine of not less than P100.00 nor more than P2,000.00, or by
imprisonment for not less than 2 months nor more than 2 years, and in all cases by disqualification from public
 office and deprivation of the right of suffrage for a period of 5 years. (Approved December 3, 1927.) (Emphasis
supplied.)

Subsequently, however, Commonwealth Act No. 357 was enacted on August 22, 1938. This law provided in Section 48:

SEC. 48. Active Interventation of Public Officers and Employees. No justice, judge, fiscal, treasurer or assessor
of any province, no officer or employee of the Army, the Constabulary of the national, provincial, municipal or
rural police, and no classified civil service officer or employee shall aid any candidate, nor exert influence in any
manner in any election nor take part therein, except to vote, if entitled thereto, or to preserve public peace, if he
is a peace officer.

This last law was the legislation from which Section 54 of the Revised Election Code was taken.

It will thus be observed from the foregoing narration of the legislative development or history of Section 54 of the Revised
Election Code that the first omission of the word "justice of the peace" was effected in Section 48 of Commonwealth Act
No. 357 and not in the present code as averred by defendant-appellee. Note carefully, however, that in the two instances
when the words "justice of the peace" were omitted (in Com. Act No. 357 and Rep. Act No. 180), the word "judge" which
preceded in the enumeration did not carry the qualification "of the First Instance." In other words, whenever the word
"judge" was qualified by the phrase "of the First Instance", the words "justice of the peace" would follow; however, if the
law simply said "judge," the words "justice of the peace" were omitted.

The above-mentioned pattern of congressional phraseology would seem to justify the conclusion that when the legislature
omitted the words "justice of the peace" in Rep. Act No. 180, it did not intend to exempt the said officer from its operation.
Rather, it had considered the said officer as already comprehended in the broader term "judge".

It is unfortunate and regrettable that the last World War had destroyed congressional records which might have offered
some explanation of the discussion of Com. Act No. 357 which legislation, as indicated above, has eliminated for the first
time the words "justice of the peace." Having been completely destroyed, all efforts to seek deeper and additional
clarifications from these records proved futile. Nevertheless, the conclusions drawn from the historical background of Rep.
Act No. 180 is sufficiently borne out by reason hid equity.

Defendant further argues that he cannot possibly be among the officers enumerated in Section 54 inasmuch as under that
said section, the word "judge" is modified or qualified by the phrase "of any province." The last mentioned phrase,
defendant submits, cannot then refer to a justice of the peace since the latter is not an officer of a province but of a
municipality.

Defendant's argument in that respect is too strained. If it is true that the phrase "of any province" necessarily removes
justices of the peace from the enumeration for the reason that they are municipal and not provincial officials, then the
same thing may be said of the Justices of the Supreme Court and of the Court of Appeals. They are national officials. Yet,
can there be any doubt that Justices of the Supreme Court and of the Court of Appeals are not included in the prohibition?
The more sensible and logical interpretation of the said phrase is that it qualifies fiscals, treasurers and assessors who are
generally known as provincial officers.

The rule of "casus omisus pro omisso habendus est" is likewise invoked by the defendant-appellee. Under the said rule, a
person, object or thing omitted from an enumeration must be held to have been omitted intentionally. If that rule is
applicable to the present, then indeed, justices of the peace must be held to have been intentionally and deliberately
exempted from the operation of Section 54 of the Revised Election Code.

The rule has no applicability to the case at bar. The maxim "casus omisus" can operate and apply only if and when the
omission has been clearly established. In the case under consideration, it has already been shown that the legislature did
not exclude or omit justices of the peace from the enumeration of officers precluded from engaging in partisan political
activities. Rather, they were merely called by another term. In the new law, or Section 54 of the Revised Election Code,
justices of the peace were just called "judges."

In insisting on the application of the rule of "casus omisus" to this case, defendant-appellee cites authorities to the effect
that the said rule, being restrictive in nature, has more particular application to statutes that should be strictly construed.
It is pointed out that Section 54 must be strictly construed against the government since proceedings under it are criminal
in nature and the jurisprudence is settled that penal statutes should be strictly interpreted against the state.

Amplifying on the above argument regarding strict interpretation of penal statutes, defendant asserts that the spirit of fair
play and due process demand such strict construction in order to give "fair warning of what the law intends to do, if a
certain line is passed, in language that the common world will understand." (Justice Holmes, in McBoyle v. U.S., 283 U.S.
25, L. Ed. 816).

The application of the rule of "casus omisus" does not proceed from the mere fact that a case is criminal in nature, but
rather from a reasonable certainty that a particular person, object or thing has been omitted from a legislative
enumeration. In the present case, and for reasons already mentioned, there has been no such omission. There has only
been a substitution of terms.

The rule that penal statutes are given a strict construction is not the only factor controlling the interpretation of such laws;
instead, the rule merely serves as an additional, single factor to be considered as an aid in determining the meaning of
penal laws. This has been recognized time and again by decisions of various courts. (3 Sutherland, Statutory Construction,
p. 56.) Thus, cases will frequently be found enunciating the principle that the intent of the legislature will govern (U.S. vs.
Corbet, 215 U.S. 233). It is to be noted that a strict construction should not be permitted to defeat the policy and purposes
of the statute (Ash Sheep Co. v. U.S., 252 U.S. 159). The court may consider the spirit and reason of a statute, as in this
particular instance, where a literal meaning would lead to absurdity, contradiction, injustice, or would defeat the clear
purpose of the law makers (Crawford, Interpretation of Laws, Sec. 78, p. 294). A Federal District court in the U.S. has well
said:

The strict construction of a criminal statute does not mean such construction of it as to deprive it of the meaning
intended. Penal statutes must be construed in the sense which best harmonizes with their intent and purpose.
(U.S. v. Betteridge 43 F. Supp. 53, 56, cited in 3 Sutherland Statutory Construction 56.)

As well stated by the Supreme Court of the United States, the language of criminal statutes, frequently, has been narrowed
where the letter includes situations inconsistent with the legislative plan (U.S. v. Katz, 271 U.S. 354; See also Ernest
Brunchen, Interpretation of the Written Law (1915) 25 Yale L.J. 129.)

Another reason in support of the conclusion reached herein is the fact that the purpose of the statute is to enlarge the
officers within its purview. Justices of the Supreme Court, the Court of Appeals, and various judges, such as the judges of
the Court of Industrial Relations, judges of the Court of Agrarian Relations, etc., who were not included in the prohibition
under the old statute, are now within its encompass. If such were the evident purpose, can the legislature intend to
eliminate the justice of the peace within its orbit? Certainly not. This point is fully explained in the brief of the Solicitor
General, to wit:

On the other hand, when the legislature eliminated the phrases "Judge of First Instance" and justice of the peace",
found in Section 449 of the Revised Administrative Code, and used "judge" in lieu thereof, the obvious intention
was to include in the scope of the term not just one class of judges but all judges, whether of first Instance
justices of the peace or special courts, such as judges of the Court of Industrial Relations. . . . .

The weakest link in our judicial system is the justice of the peace court, and to so construe the law as to allow a
judge thereof to engage in partisan political activities would weaken rather than strengthen the judiciary. On the
other hand, there are cogent reasons found in the Revised Election Code itself why justices of the peace should be
prohibited from electioneering. Along with Justices of the appellate courts and judges of the Court of First
Instance, they are given authority and jurisdiction over certain election cases (See Secs. 103, 104, 117-123).
Justices of the peace are authorized to hear and decided inclusion and exclusion cases, and if they are permitted
to campaign for candidates for an elective office the impartiality of their decisions in election cases would be
open to serious doubt. We do not believe that the legislature had, in Section 54 of the Revised Election Code,
intended to create such an unfortunate situation. (pp. 708, Appellant's Brief.)

Another factor which fortifies the conclusion reached herein is the fact that the administrative or executive department
has regarded justices of the peace within the purview of Section 54 of the Revised Election Code.

In Tranquilino O. Calo, Jr. v. The Executive Secretary, the Secretary of Justice, etc. (G.R. No. L-12601), this Court did not
give due course to the petition for certiorari and prohibition with preliminary injunction against the respondents, for not
setting aside, among others, Administrative Order No. 237, dated March 31, 1957, of the President of the Philippines,
dismissing the petitioner as justice of the peace of Carmen, Agusan. It is worthy of note that one of the causes of the
separation of the petitioner was the fact that he was found guilty in engaging in electioneering, contrary to the provisions
of the Election Code.

Defendant-appellee calls the attention of this Court to House Bill No. 2676, which was filed on January 25, 1955. In that
proposed legislation, under Section 56, justices of the peace are already expressly included among the officers enjoined
from active political participation. The argument is that with the filing of the said House Bill, Congress impliedly
acknowledged that existing laws do not prohibit justices of the peace from partisan political activities.

The argument is unacceptable. To begin with, House Bill No. 2676 was a proposed amendment to Rep. Act No. 180 as a
whole and not merely to section 54 of said Rep. Act No. 180. In other words, House Bill No. 2676 was a proposed re-
codification of the existing election laws at the time that it was filed. Besides, the proposed amendment, until it has
become a law, cannot be considered to contain or manifest any legislative intent. If the motives, opinions, and the reasons
expressed by the individual members of the legislature even in debates, cannot be properly taken into consideration in
ascertaining the meaning of a statute (Crawford, Statutory Construction, Sec. 213, pp. 375-376), a fortiori what weight can
We give to a mere draft of a bill.

On law reason and public policy, defendant-appellee's contention that justices of the peace are not covered by the
injunction of Section 54 must be rejected. To accept it is to render ineffective a policy so clearly and emphatically laid
down by the legislature.

Our law-making body has consistently prohibited justices of the peace from participating in partisan politics. They were
prohibited under the old Election Law since 1907 (Act No. 1582 and Act No. 1709). Likewise, they were so enjoined by the
Revised Administrative Code. Another which expressed the prohibition to them was Act No. 3387, and later, Com. Act No.
357.

Lastly, it is observed that both the Court of Appeals and the trial court applied the rule of "expressio unius, est exclusion
alterius" in arriving at the conclusion that justices of the peace are not covered by Section 54. Said the Court of Appeals:
"Anyway, guided by the rule of exclusion, otherwise known as expressio unius est exclusion alterius, it would not be beyond
reason to infer that there was an intention of omitting the term "justice of the peace from Section 54 of the Revised
Election Code. . . ."

The rule has no application. If the legislature had intended to exclude a justice of the peace from the purview of Section
54, neither the trial court nor the Court of Appeals has given the reason for the exclusion. Indeed, there appears no reason
for the alleged change. Hence, the rule of expressio unius est exclusion alterius has been erroneously applied. (Appellant's
Brief, p. 6.)

Where a statute appears on its face to limit the operation of its provisions to particular persons or things by
enumerating them, but no reason exists why other persons or things not so enumerated should not have been
included, and manifest injustice will follow by not so including them, the maxim expressio unius est exclusion
alterius, should not be invoked. (Blevins v. Mullally 135 p. 307, 22 Cal. App. 519.) .

FOR THE ABOVE REASONS, the order of dismissal entered by the trial court should be set aside and this case is remanded for
trial on the merits.

Bengzon, C.J., Bautista Angelo, Labrador, Concepcion, Barrera and Makalintal, JJ., concur.
Padilla and Dizon, JJ., took no part.
Reyes, J.B.L., J., is on leave.
G.R. No. L-32441 March 29, 1930

DOMINADOR GOMEZ, plaintiff-appellant,

vs.
HONORIO VENTURA, Secretary of the Interior of the Government of the Philippine Islands, and the
BOARD OF MEDICAL EXAMINERS OF THE PHILIPPINE ISLANDS, defendants-appellees.

Jose Varela Calderon for appellant.

Attorney-General Jaranilla for appellees.

ROMUALDEZ, J.:

In this cause, the plaintiff prays for judgment, as follows:

1. Annulling and setting aside the aforementioned investigation proceedings, and particularly the decision of the
Board of Medical Examiners of the Philippine Islands dated March 30, 1926, forever revoking the plaintiff's license
to practice medicine and surgery.

2. Ordering the defendants to restore the plaintiff to his status before the investigation and the decision of March
30, 1926, that is, as if there had never been an investigation and an adverse decision.

3. Ordering said defendants to issue in favor of the plaintiff a license for the practice of medicine and surgery in
the Philippine Islands, such as he had prior to the investigation and adverse decision.

4. Granting the plaintiff any proper legal remedy. (Pages 5 and 6, bill of exemptions.)

The defendants answered with a general denial and prayed that the complaint be dismissed.

After trial the Court of First Instance of Manila dismissed the complaint with costs against the plaintiff.

Counsel for plaintiff contends that the court below erred:

1. In holding that Assistant Fiscal Alfonso Felix of the City of Manila was authorized to appear and institute
administrative proceedings against Dr. Dominador Gomez before the Board of Medical Examiners of the Philippines.

2. In not holding that Assistant Fiscal Alfonso Felix, of the City of Manila, had personality nor power to institute
administrative proceedings against Dr. Dominador Gomez before the Board of Medical Examiners of the Philippines.

3. In admitting in its decision that section 9 of Act No. 2381, known as the Opium Law, is valid.

4. In not holding that section 9 of Act No. 2381, known as the Opium Law, is unconstitutional, and therefore null
and void.

5. In holding that section 9 Act No. 2381, known as the Opium Law, is in force.

6. In not holding that section 9 Act No. 2381 has been repealed, even on the supposition that it was valid.

7. In rendering the judgment appealed from.

8. In denying the motion for avoidance, and for a new trial, filed by appellant.

The first two assignments of error relate to the validity of the charges against the plaintiff, preferred by Assistant Fiscal
Alfonso Felix of the City of Manila, who, according to the plaintiff is not authorized by law to file charges with the Board of
Medical Examiners, which therefore acquired no jurisdiction over the matter.

According to section 780 of Administrative Code, as amended by Act No. 3111, the procedure to be observed in revoking a
certificate of registration is the following:
 Proceedings for revocation of a certificate of registration shall be begun by filing a written charge or charges
against the accused. These charges may be preferred by any person or persons, firm or corporation, or the Board
of Medical Examiners itself may direct its executive officer to prepare said charges. Said charges shall be filed with
the executive officer of the Board of Medical Examiners and a copy thereof, together with written notice of the
time and place when they will be heared and determined, shall be served upon the accused or his counsel, at least
two weeks before the date actually fixed for said hearing. (Sec. 12, Act No. 3111.)

The law does not require that the charges be preferred by a public officer or by any specified person; it even permits the
Board of Medical Examiners itself to require its executive officer to prefer said charges. From the wording of the law we
infer that any person, including a public officer, may prefer the charges referred to in the above-quoted provision.
Wherefore, the fact that the charges were filed by Assistant Fiscal Alfonso Felix of the City of Manila, does not deprive the
Board of Medical Examiners of jurisdiction to hear said charges and to take the proper action according to law.

The appellant contends in his third and fourth assignments of error that section 9 of Act No. 2381 is null and void on the
ground of unconstitutionality, since said section is foreign to the subject of said Act, in violation of section 3 of the Jones
Law prohibiting the enactment of any bill embracing more than one subject and providing that the subject be expressed in
the title of the bill.

Our opinion is that the matter contained in section 9 of Act No. 2381 is not foreign to the end pursued in said Act, and that
in view in the provision of said section it cannot be maintained that Act No. 2381 includes more than one subject. The
penalty provided in said section for the physician or dentist who prescribes opium for a patient whose physical condition
does not require the use of said drug, is one of the means employed by the Legislature to attain the purpose of Act No.
2381, which is, to prohibit unnecessary use of opium; it is one of the details subordinate to the purpose in view. Such
punishment is not the end contemplated in Act No. 2381, but, as we have just said, it is a means employed to regulate the
use of opium.

In passing said Act No. 2381, the Legislature merely exercised the police power expressly granted by the Act of Congress of
March 3, 1905, for the protection of the health, comfort, and general welfare of the people of the Philippine Islands.

ID.; ID.; POWER OF PHILIPPINE LEGISLATURE TO LEGISLATE UPON THE SUBJECT. The Philippine Legislature is
expressly authorized by the Act of Congress of March 3, 1905, to adopt legislation upon the importation and sale of
opium in the Philippine Islands. The purpose of such legislation was to protect the health, comfort, and general
welfare of the people of the Philippine Islands. Such legislation was an exercise of the police power of the State.
(United States vs. Wayne Shoup, 35 Phil., 56.)

And, as we have stated, the provisions contained in section 9 of Act No. 2381 relative to the physicians and dentist are
simply detailes and means conducive to the ultimate purpose of said Act, which details and means need not be stated in the
title of the Act for the very reason that properly speaking, they are not foreign matter.

The general purpose of these provisions is accomplished when a law has but one general object, which is fairly
indicated by its title. To require every end and means necessary or convenient for the accomplishment of this
general object to be provided for by a separate act relating to that alone, would not only be unreasonable, but
would actually render legislation impossible. (Cooley on Constitutional Limitations, pp. 296-297.)

The constitutional requirement is addressed to the subject, not to the details of the act. The subject must be
single; the provisions, to accomplished the object involved in that subject, may be multifarious. . . . None of the
provisions of a statute will be held unconstitutional when they all relate, directly or indirectly, to the same
subject, have natural connection, and are not foreign to the subject expressed in the title. As very frequently
expressed by the courts, any provisions that are germane to the subject expressed in the title may properly be
included in the act. (I Sutherland on Stat. Const., par. 118.)

In order to hold that section 9 of Act No. 2381 is unconstitutional on the ground alleged by the plaintiff, the violation of the
constitutional provision must be substantial and manifest. It is not so in the case at bar.

2. To warrant the setting aside of statutes because their subjects are not expressed in the titles, the violation of
the rule must be substantial and plain. (Posadas vs. Menzi, Decision of the United States Supreme Court, page 388,
No. 11, May 15, 1929, United States Supreme Court Advance Opinions.)

At all events the validity of this Opium Law, Act No. 2381, has already been upheld by this court, not only in the above
cited case, United States vs. Wayne Shoup, supra, but also in the subsequent case of United States vs.Jao Li Sing (37 Phil.,
211).
Passing to the fifth and sixth assignments of error, wherein counsel for appellant contends that even granting that section 9
of Act No. 2381 is valid, it was repealed by Act No. 2493 and later by section 780 of the Administrative Code, we note, first,
that there is no express repeal of section 9 of Act No. 2381. Secondly, it cannot be held that it has been impliedly repealed,
for the reason that the provisions of section 9, Act No. 2381, are neither contrary to, nor incompatible with, the provisions
of section 780 of the Administrative Code, as amended. Upon this point, we approve and adopt the following statements
made by the trial judge:

Counsel contends, in support of the above, that Act No. 2493 being complete, and "covering the field" by
implication repealed all laws relating to the practice of medicine, powers of the Board of Medical Examiners and
allied matters; hence, the said law, expressly providing the causes for revocation of medical licenses, necessarily
excluded all others, even though embodied in prior enactments.

Act No. 310 provided that the Board of medical Examiners could revoke licenses for "unprofessional conduct,"
without defining the term. Act No. 1761 (the Opium Law) provided that illegaly prescribing opium should be cause
for revocation of medical licenses. Clearly, the Opium Law did not repeal Act No. 310. Act No. 2381 also an
Opium Law in its section 9, repeated the provision as to doctors and dentists. The repetition did not repeal Act
No. 310. Act No. 2493, section 11 (Ad. Code, sec. 780), provided that certificates of physicians are revocable for
"unprofessional conduct," without defining the phrase. In other words, so far as revocation of licenses is
concerned, Act No. 2493 is mere reenactment of Act No. 310. The reenactment of the said portion of Act No. 310
did not repeal section 9 of the Opium Law. If said section 9 has been repealed, it must be by Act No. 3111, which
amends Act No. 2493 (Ad. Code, sec. 780), by an addition after the words "unprofessional conduct" of the
following:

"The words "unprofessional conduct, immoral, or dishonorable conduct" as used in this chapter shall be
construed to include the following acts: (1) Procuring, aiding or abeting a criminal abortion; (2)
advertising, either in his own name or in the name of any other person, firm, association, or corporation,
in any written or printed paper, or document, of medical business in which untruthful or improbable
promises are made, or being employed by, or in the service of any person, firm, association or corporation
so advertising, or advertising in any obscene manner derogatory to good morals; (3) habitual
intemperance or addition to the use of morphine, opium, cocaine or other drugs having a similar effect;
(4) conviction of a crime or misdemeanor involving dishonorable conduct; and (5) willfully betraying a
professional secret."

It cannot be seriously contended that aside from the five examples specified there can be no other conduct of a
physician deemed "unprofessional" conduct theretofore deemed grounds for revocation licenses. The
maxim expressio unius est exclussio alterius should be applied only as a means of discovering legislative intent and
should not be permitted to defeat the plain indicated purpose of the Legislature. It does not apply when words are
mentioned by way of example, or to remove doubts. (See Cyc., 1122.) If, therefore, there exists, "unprofessional
conduct" not specified in the laws, with more reason does the criminal use of opium remain a specific cause for
revocation of license. (Pages 11, 12 and 13, bill of exceptions.)

As to the seventh and eighth assignments of error, we find the judgment and appealed from correctly rendered, and the
motion of avoidance and new trial properly denied.

As the Attorney-General correctly observes, the powers vested in the Board of Medical Examiners to suspend or revoke a
physician's certificate of registration and the authority granted the Secretary of the Interior of confirming or reversing the
decision of said board of examiners, partake of a quasi-judicial character, that is, involve the use of discretion. For this
reason, the exercise thereof cannot be reviewed by mandamus, which is the nature of this cause on its merits.

As in the case of courts and judicial officers, it is a rule of general application that mandamus will not lie to
review or control the acts of executive officers and boards of state and federal governments in respect of matters
as to which they are vested with discretion. In other words, they cannot be compelled to act or render a decision
in any particular way, and this is so, even though the exercise of this discretion requires the construction and
interpretation of statutes. Where public officials exercise their discretion, it is said that their conclusions,
although disputable, are impregnable to mandamus. (38 C. J., 659-660.)

That this action is really a mandamus proceeding, appears clearly from the terms of the complaint filed herein.

Finding no merit in the assignments of error, the judgment appealed from is affirmed, with costs against the appellant. So
ordered.
Malcolm, Ostrand, Johns and Villa-Real, JJ., concur.
Villamor, J., reserves his vote.
G.R. No. 147749 June 22, 2006

SAN PABLO MANUFACTURING CORPORATION, Petitioner,

vs.
COMMISSIONER OF INTERNAL REVENUE,* Respondent.

DECISION

CORONA, J.:

In this petition for review under Rule 45 of the Rules of Court, San Pablo Manufacturing Corporation (SPMC) assails the July
19, 20001 and April 3, 2001 resolutions of the Court of Appeals in CA-G.R. SP No. 59139.

SPMC is a domestic corporation engaged in the business of milling, manufacturing and exporting of coconut oil and other
allied products. It was assessed and ordered to pay by the Commissioner of Internal Revenue the total amount
of P8,182,182.852 representing deficiency millers tax and manufacturers sales tax,3 among other deficiency taxes,4 for
taxable year 1987. The deficiency millers tax was imposed on SPMCs sales of crude oil to United Coconut Chemicals, Inc.
(UNICHEM) while the deficiency sales tax was applied on its sales of corn and edible oil as manufactured products.

SPMC opposed the assessments but the Commissioner denied its protest. SPMC appealed the denial of its protest to the
Court of Tax Appeals (CTA) by way of a petition for review docketed as CTA Case No. 5423.

In its March 10, 2000 decision, the CTA cancelled SPMCs liability for deficiency manufacturers tax on the sales of corn and
edible oils but upheld the Commissioners assessment for the deficiency millers tax. SPMC moved for the partial
reconsideration of the CTA affirmation of the millers tax assessment but it was denied.

SPMC elevated the case to the Court of Appeals via a petition for review of the CTA decision insofar as it upheld the
deficiency millers tax assessment. In its July 19, 2000 resolution, the appellate court dismissed the petition on the
principal ground5 that the verification attached to it was signed merely by SPMCs chief financial officer without the
corporate secretarys certificate, board resolution or power of attorney authorizing him to sign the verification and
certification against forum shopping. SPMC sought a reconsideration of the resolution but the same was denied. Hence, this
petition.

Did the Court of Appeals err when it dismissed SPMCs appeal?

SPMC contends that its appeal should have been given due course since it substantially complied with the requirements on
verification and certification against forum shopping. It insists on the liberal application of the rules because, on the merits
of the petition, SPMC was not liable for the 3% millers tax. It maintains that the crude oil which it sold to UNICHEM was
actually exported by UNICHEM as an ingredient of fatty acid and glycerine, hence, not subject to millers tax pursuant to
Section 168 of the 1987 Tax Code.

For SPMC, Section 168 of the 1987 Tax Code contemplates two exemptions from the millers tax: (a) the milled products in
their original state were actually exported by the miller himself or by another person, and (b) the milled products sold by
the miller were actually exported as an ingredient or part of any manufactured article by the buyer or manufacturer of the
milled products. The exportation may be effected by the miller himself or by the buyer or manufacturer of the milled
products. Since UNICHEM, the buyer of SPMCs milled products, subsequently exported said products, SPMC should be
exempted from the millers tax.

The petition must fail.

Under Rule 43, Section 5 of the Rules of Court, appeals from the CTA and quasi-judicial agencies to the Court of Appeals
should be verified. A pleading required to be verified which lacks proper verification shall be treated as an unsigned
pleading.6

Moreover, a petition for review under Rule 43 requires a sworn certification against forum shopping. 7 Failure of the
petitioner to comply with any of the requirements of a petition for review is sufficient ground for the dismissal of the
petition.8

A corporation may exercise the powers expressly conferred upon it by the Corporation Code and those that are implied by
or are incidental to its existence through its board of directors and/or duly authorized officers and agents. 9 Hence, physical
acts, like the signing of documents, can be performed only by natural persons duly authorized for the purpose by corporate
by-laws or by specific act of the board of directors.10 In the absence of authority from the board of directors, no person, not
even the officers of the corporation, can bind the corporation. 11
SPMCs petition in the Court of Appeals did not indicate that the person who signed the verification/certification on non-
forum shopping was authorized to do so. SPMC merely relied on the alleged inherent power of its chief financial officer to
represent SPMC in all matters regarding the finances of the corporation including, among others, the filing of suits to
defend or protect it from assessments and to recover erroneously paid taxes. SPMC even admitted that no power of
attorney, secretarys certificate or board resolution to prove the affiants authority was attached to the petition. Thus, the
petition was not properly verified. Since the petition lacked proper verification, it was to be treated as an unsigned
pleading subject to dismissal.12

In PET Plans, Inc. v. Court of Appeals,13 the Court upheld the dismissal by the Court of Appeals of the petition on the ground
that the verification and certification against forum shopping was signed by PET Plans, Inc.s first vice-president for legal
affairs/corporate secretary without any certification that he was authorized to sign in behalf of the corporation.

In BPI Leasing Corporation v. Court of Appeals,14 the Court ruled that the petition should be dismissed outright on the
ground that the verification/certification against forum shopping was signed by BPI Leasing Corporations counsel with no
specific authority to do so. Since the counsel was purportedly acting for the corporation, he needed a resolution issued by
the board of directors that specifically authorized him to institute the petition and execute the certification. Only then
would his actions be legally binding on the corporation. 15

In this case, therefore, the appellate court did not commit an error when it dismissed the petition on the ground that it was
signed by a person who had not been issued any authority by the board of directors to represent the corporation.

Neither can the Court subscribe to SPMCs claim of substantial compliance or to its plea for a liberal application of the
rules. Save for the most persuasive of reasons, strict compliance with procedural rules is enjoined to facilitate the orderly
administration of justice.16 Substantial compliance will not suffice in a matter involving strict observance such as the
requirement on non-forum shopping,17 as well as verification. Utter disregard of the rules cannot justly be rationalized by
harping on the policy of liberal construction.18

But even if the fatal procedural infirmity were to be disregarded, the petition must still fail for lack of merit.

As the CTA correctly ruled, SPMCs sale of crude coconut oil to UNICHEM was subject to the 3% millers tax. Section 168 of
the 1987 Tax Code provided:

Sec. 168. Percentage tax upon proprietors or operators of rope factories, sugar central mills, coconut oil mills, palm oil
mills, cassava mills and desiccated coconut factories. Proprietors or operators of rope factories, sugar central and mills,
coconut oil mills, palm oil mills, cassava mills and desiccated coconut factories, shall pay a tax equivalent to three percent
(3%) of the gross value in money of all the rope, sugar, coconut oil, palm oil, cassava flour or starch, dessicated coconut,
manufactured, processed or milled by them, including the by-product of the raw materials from which said articles are
produced, processed or manufactured, such tax to be based on the actual selling price or market value of these articles at
the time they leave the factory or mill warehouse:Provided, however, That this tax shall not apply to rope, coconut oil,
palm oil and the by-product of copra from which it is produced or manufactured and dessicated coconut, if such rope,
coconut oil, palm oil, copra by-products and dessicated coconuts, shall be removed for exportation by the proprietor
or operator of the factory or the miller himself, and are actually exported without returning to the Philippines,
whether in their original state or as an ingredient or part of any manufactured article or products: Provided further,
That where the planter or the owner of the raw materials is the exporter of the aforementioned milled or manufactured
products, he shall be entitled to a tax credit of the miller's taxes withheld by the proprietor or operator of the factory or
mill, corresponding to the quantity exported, which may be used against any internal revenue tax directly due from him:
and Provided, finally, That credit for any sales, miller's or excise taxes paid on raw materials or supplies used in the milling
process shall not be allowed against the miller's tax due, except in the case of a proprietor or operator of a refined sugar
factory as provided hereunder. (emphasis supplied)

The language of the exempting clause of Section 168 of the 1987 Tax Code was clear. The tax exemption applied only to the
exportation of rope, coconut oil, palm oil, copra by-products and dessicated coconuts, whether in their original state or as
an ingredient or part of any manufactured article or products, by the proprietor or operator of the factory or by the miller
himself.

The language of the exemption proviso did not warrant the interpretation advanced by SPMC. Nowhere did it provide that
the exportation made by the purchaser of the materials enumerated in the exempting clause or the manufacturer of
products utilizing the said materials was covered by the exemption. Since SPMCs situation was not within the ambit of the
exemption, it was subject to the 3% millers tax imposed under Section 168 of the 1987 Tax Code.

SPMCs proposed interpretation unduly enlarged the scope of the exemption clause. The rule is that the exemption must not
be so enlarged by construction since the reasonable presumption is that the State has granted in express terms all it
intended to grant and that, unless the privilege is limited to the very terms of the statute, the favor would be intended
beyond what was meant.19
Where the law enumerates the subject or condition upon which it applies, it is to be construed as excluding from its effects
all those not expressly mentioned. Expressio unius est exclusio alterius. Anything that is not included in the enumeration is
excluded therefrom and a meaning that does not appear nor is intended or reflected in the very language of the statute
cannot be placed therein.20 The rule proceeds from the premise that the legislature would not have made specific
enumerations in a statute if it had the intention not to restrict its meaning and confine its terms to those expressly
mentioned.21

The rule of expressio unius est exclusio alterius is a canon of restrictive interpretation.22 Its application in this case is
consistent with the construction of tax exemptions in strictissimi juris against the taxpayer. To allow SPMCs claim for tax
exemption will violate these established principles and unduly derogate sovereign authority.

WHEREFORE, the petition is hereby DENIED.

Costs against petitioner.

SO ORDERED.

RENATO C. CORONA
Associate Justice

WE CONCUR:

REYNATO S. PUNO
Associate Justice
Chairperson

ANGELINA SANDOVAL-GUTIERREZ ADOLFO S. AZCUNA

Associate Justice Asscociate Justice
CANCIO C. GARCIA
Associate Justice

AT T E S TAT I O N

I attest that the conclusions in the above Decision had been reached in consultation before the case was assigned to the
writer of the opinion of the Courts Division.

REYNATO S. PUNO
Associate Justice
Chairperson, Second Division

C E R T I F I C AT I O N

Pursuant to Section 13, Article VIII of the Constitution, and the Division Chairpersons Attestation, I certify that the
conclusions in the above decision had been reached in consultation before the case was assigned to the writer of the
opinion of the Courts Division.

ARTEMIO V. PANGANIBAN
Chief Justice
 [G.R. No. 132527. July 29, 2005]

COCONUT OIL REFINERS ASSOCIATION, INC. represented by its President, JESUS L. ARRANZA, PHILIPPINE ASSOCIATION
OF MEAT PROCESSORS, INC. (PAMPI), represented by its Secretary, ROMEO G. HIDALGO, FEDERATION OF FREE
FARMERS (FFF), represented by its President, JEREMIAS U. MONTEMAYOR, and BUKLURAN NG MANGGAGAWANG
PILIPINO (BMP), represented by its Chairperson, FELIMON C. LAGMAN, petitioners, vs. HON. RUBEN TORRES, in
his capacity as Executive Secretary; BASES CONVERSION AND DEVELOPMENT AUTHORITY, CLARK DEVELOPMENT
CORPORATION, SUBIC BAY METROPOLITAN AUTHORITY, 88 MART DUTY FREE, FREEPORT TRADERS, PX CLUB,
AMERICAN HARDWARE, ROYAL DUTY FREE SHOPS, INC., DFS SPORTS, ASIA PACIFIC, MCI DUTY FREE
DISTRIBUTOR CORP. (formerly MCI RESOURCES, CORP.), PARK & SHOP, DUTY FREE COMMODITIES, L.
FURNISHING, SHAMBURGH, SUBIC DFS, ARGAN TRADING CORP., ASIPINE CORP., BEST BUY, INC., PX CLUB, CLARK
TRADING, DEMAGUS TRADING CORP., D.F.S. SPORTS UNLIMITED, INC., DUTY FREE FIRST SUPERSTORE, INC.,
FREEPORT, JC MALL DUTY FREE INC. (formerly 88 Mart [Clark] Duty Free Corp.), LILLY HILL CORP., MARSHALL,
PUREGOLD DUTY FREE, INC., ROYAL DFS and ZAXXON PHILIPPINES, INC., respondents.
DECISION
AZCUNA, J.:

This is a Petition for Prohibition and Injunction seeking to enjoin and prohibit the Executive Branch, through the public
respondents Ruben Torres in his capacity as Executive Secretary, the Bases Conversion Development Authority (BCDA), the
Clark Development Corporation (CDC) and the Subic Bay Metropolitan Authority (SBMA), from allowing, and the private
respondents from continuing with, the operation of tax and duty-free shops located at the Subic Special Economic Zone
(SSEZ) and the Clark Special Economic Zone (CSEZ), and to declare the following issuances as unconstitutional, illegal, and
void:
1. Section 5 of Executive Order No. 80,[1] dated April 3, 1993, regarding the CSEZ.
2. Executive Order No. 97-A, dated June 19, 1993, pertaining to the SSEZ.
3. Section 4 of BCDA Board Resolution No. 93-05-034,[2] dated May 18, 1993, pertaining to the CSEZ.
Petitioners contend that the aforecited issuances are unconstitutional and void as they constitute executive
lawmaking, and that they are contrary to Republic Act No. 7227 [3] and in violation of the Constitution, particularly Section
1, Article III (equal protection clause), Section 19, Article XII (prohibition of unfair competition and combinations in
restraint of trade), and Section 12, Article XII (preferential use of Filipino labor, domestic materials and locally produced
goods).
The facts are as follows:
On March 13, 1992, Republic Act No. 7227 was enacted, providing for, among other things, the sound and balanced
conversion of the Clark and Subic military reservations and their extensions into alternative productive uses in the form of
special economic zones in order to promote the economic and social development of Central Luzon in particular and the
country in general. Among the salient provisions are as follows:
SECTION 12. Subic Special Economic Zone.

...

The abovementioned zone shall be subject to the following policies:

(a) Within the framework and subject to the mandate and limitations of the Constitution and the pertinent provisions of the
Local Government Code, the Subic Special Economic Zone shall be developed into a self-sustaining, industrial, commercial,
financial and investment center to generate employment opportunities in and around the zone and to attract and promote
productive foreign investments;

(b) The Subic Special Economic Zone shall be operated and managed as a separate customs territory ensuring free flow or
movement of goods and capital within, into and exported out of the Subic Special Economic Zone, as well as provide
incentives such as tax and duty-free importations of raw materials, capital and equipment. However, exportation or
removal of goods from the territory of the Subic Special Economic Zone to the other parts of the Philippine territory shall
be subject to customs duties and taxes under the Customs and Tariff Code and other relevant tax laws of the Philippines;[4]

(c) The provision of existing laws, rules and regulations to the contrary notwithstanding, no taxes, local and national, shall
be imposed within the Subic Special Economic Zone. In lieu of paying taxes, three percent (3%) of the gross income earned
by all businesses and enterprises within the Subic Special Ecoomic Zone shall be remitted to the National Government, one
percent (1%) each to the local government units affected by the declaration of the zone in proportion to their population
area, and other factors. In addition, there is hereby established a development fund of one percent (1%) of the gross
income earned by all businesses and enterprises within the Subic Special Economic Zone to be utilized for the development
of municipalities outside the City of Olangapo and the Municipality of Subic, and other municipalities contiguous to the base
areas.

...

SECTION 15. Clark and Other Special Economic Zones. Subject to the concurrence by resolution of the local government
units directly affected, the President is hereby authorized to create by executive proclamation a Special Economic Zone
covering the lands occupied by the Clark military reservations and its contiguous extensions as embraced, covered and
defined by the 1947 Military Bases Agreement between the Philippines and the United States of America, as amended,
located within the territorial jurisdiction of Angeles City, Municipalities of Mabalacat and Porac, Province of Pampanga and
the Municipality of Capas, Province of Tarlac, in accordance with the policies as herein provided insofar as applicable to the
Clark military reservations.

The governing body of the Clark Special Economic Zone shall likewise be established by executive proclamation with such
powers and functions exercised by the Export Processing Zone Authority pursuant to Presidential Decree No. 66 as amended.

The policies to govern and regulate the Clark Special Economic Zone shall be determined upon consultation with the
inhabitants of the local government units directly affected which shall be conducted within six (6) months upon approval of
this Act.

Similarly, subject to the concurrence by resolution of the local government units directly affected, the President shall
create other Special Economic Zones, in the base areas of Wallace Air Station in San Fernando, La Union (excluding areas
designated for communications, advance warning and radar requirements of the Philippine Air Force to be determined by
the Conversion Authority) and Camp John Hay in the City of Baguio.

Upon recommendation of the Conversion Authority, the President is likewise authorized to create Special Economic Zones
covering the Municipalities of Morong, Hermosa, Dinalupihan, Castillejos and San Marcelino.

On April 3, 1993, President Fidel V. Ramos issued Executive Order No. 80, which declared, among others, that Clark
shall have all the applicable incentives granted to the Subic Special Economic and Free Port Zone under Republic Act No.
7227. The pertinent provision assailed therein is as follows:
SECTION 5. Investments Climate in the CSEZ. Pursuant to Section 5(m) and Section 15 of RA 7227, the BCDA shall
promulgate all necessary policies, rules and regulations governing the CSEZ, including investment incentives, in
consultation with the local government units and pertinent government departments for implementation by the CDC.

Among others, the CSEZ shall have all the applicable incentives in the Subic Special Economic and Free Port Zone under RA
7227 and those applicable incentives granted in the Export Processing Zones, the Omnibus Investments Code of 1987, the
Foreign Investments Act of 1991 and new investments laws which may hereinafter be enacted.

The CSEZ Main Zone covering the Clark Air Base proper shall have all the aforecited investment incentives, while the CSEZ
Sub-Zone covering the rest of the CSEZ shall have limited incentives. The full incentives in the Clark SEZ Main Zone and the
limited incentives in the Clark SEZ Sub-Zone shall be determined by the BCDA.

Pursuant to the directive under Executive Order No. 80, the BCDA passed Board Resolution No. 93-05-034 on May 18,
1993, allowing the tax and duty-free sale at retail of consumer goods imported via Clark for consumption outside the CSEZ.
The assailed provisions of said resolution read, as follows:
Section 4. SPECIFIC INCENTIVES IN THE CSEZ MAIN ZONE. The CSEZ-registered enterprises/businesses shall be entitled to all
the incentives available under R.A. No. 7227, E.O. No. 226 and R.A. No. 7042 which shall include, but not limited to, the
following:

I. As in Subic Economic and Free Port Zone:

A. Customs:. . .

4. Tax and duty-free purchase and consumption of goods/articles (duty free shopping) within the CSEZ Main
Zone.

5. For individuals, duty-free consumer goods may be brought out of the CSEZ Main Zone into the Philippine
Customs territory but not to exceed US$200.00 per month per CDC-registered person, similar to the
limits imposed in the Subic SEZ. This privilege shall be enjoyed only once a month. Any excess shall be
levied taxes and duties by the Bureau of Customs.
 On June 10, 1993, the President issued Executive Order No. 97, Clarifying the Tax and Duty Free Incentive Within the
Subic Special Economic Zone Pursuant to R.A. No. 7227. Said issuance in part states, thus:
SECTION 1. On Import Taxes and Duties Tax and duty-free importations shall apply only to raw materials, capital goods and
equipment brought in by business enterprises into the SSEZ. Except for these items, importations of other goods into the
SSEZ, whether by business enterprises or resident individuals, are subject to taxes and duties under relevant Philippine
laws.

The exportation or removal of tax and duty-free goods from the territory of the SSEZ to other parts of the Philippine
territory shall be subject to duties and taxes under relevant Philippine laws.

Nine days after, on June 19, 1993, Executive Order No. 97-A was issued, Further Clarifying the Tax and Duty-Free
Privilege Within the Subic Special Economic and Free Port Zone. The relevant provisions read, as follows:
SECTION 1. The following guidelines shall govern the tax and duty-free privilege within the Secured Area of the Subic
Special Economic and Free Port Zone:

1.1 The Secured Area consisting of the presently fenced-in former Subic Naval Base shall be the only completely tax and
duty-free area in the SSEFPZ. Business enterprises and individuals (Filipinos and foreigners) residing within the Secured Area
are free to import raw materials, capital goods, equipment, and consumer items tax and duty-free. Consumption items,
however, must be consumed within the Secured Area. Removal of raw materials, capital goods, equipment and consumer
items out of the Secured Area for sale to non-SSEFPZ registered enterprises shall be subject to the usual taxes and duties,
except as may be provided herein.

1.2. Residents of the SSEFPZ living outside the Secured Area can enter the Secured Area and consume any quantity of
consumption items in hotels and restaurants within the Secured Area. However, these residents can purchase and bring out
of the Secured Area to other parts of the Philippine territory consumer items worth not exceeding US$100 per month per
person. Only residents age 15 and over are entitled to this privilege.

1.3. Filipinos not residing within the SSEFPZ can enter the Secured Area and consume any quantity of consumption items in
hotels and restaurants within the Secured Area. However, they can purchase and bring out [of] the Secured Area to other
parts of the Philippine territory consumer items worth not exceeding US$200 per year per person. Only Filipinos age 15 and
over are entitled to this privilege.

Petitioners assail the $100 monthly and $200 yearly tax-free shopping privileges granted by the aforecited provisions
respectively to SSEZ residents living outside the Secured Area of the SSEZ and to Filipinos aged 15 and over residing outside
the SSEZ.
On February 23, 1998, petitioners thus filed the instant petition, seeking the declaration of nullity of the assailed
issuances on the following grounds:
I.
EXECUTIVE ORDER NO. 97-A, SECTION 5 OF EXECUTIVE ORDER NO. 80, AND SECTION 4 OF BCDA BOARD RESOLUTION NO. 93-
05-034 ARE NULL AND VOID [FOR] BEING AN EXERCISE OF EXECUTIVE LAWMAKING.

II.
EXECUTIVE ORDER NO. 97-A, SECTION 5 OF EXECUTIVE ORDER NO. 80, AND SECTION 4 OF BCDA BOARD RESOLUTION NO. 93-
05-034 ARE UNCONSTITUTIONAL FOR BEING VIOLATIVE OF THE EQUAL PROTECTION CLAUSE AND THE PROHIBITION AGAINST
UNFAIR COMPETITION AND PRACTICES IN RESTRAINT OF TRADE.

III.
EXECUTIVE ORDER NO. 97-A, SECTION 5 OF EXECUTIVE ORDER NO. 80, AND SECTION 4 OF BCDA BOARD RESOLUTION NO. 93-
05-034 ARE NULL AND VOID [FOR] BEING VIOLATIVE OF REPUBLIC ACT NO. 7227.

IV.
THE CONTINUED IMPLEMENTATION OF THE CHALLENGED ISSUANCES IF NOT RESTRAINED WILL CONTINUE TO CAUSE
PETITIONERS TO SUFFER GRAVE AND IRREPARABLE INJURY.[5]

In their Comments, respondents point out procedural issues, alleging lack of petitioners legal standing, the
unreasonable delay in the filing of the petition, laches, and the propriety of the remedy of prohibition.
Anent the claim on lack of legal standing, respondents argue that petitioners, being mere suppliers of the local
retailers operating outside the special economic zones, do not stand to suffer direct injury in the enforcement of the
issuances being assailed herein. Assuming this is true, this Court has nevertheless held that in cases of paramount
importance where serious constitutional questions are involved, the standing requirements may be relaxed and a suit may
be allowed to prosper even where there is no direct injury to the party claiming the right of judicial review.[6]
In the same vein, with respect to the other alleged procedural flaws, even assuming the existence of such defects,
this Court, in the exercise of its discretion, brushes aside these technicalities and takes cognizance of the petition
considering the importance to the public of the present case and in keeping with the duty to determine whether the other
branches of the government have kept themselves within the limits of the Constitution. [7]
Now, on the constitutional arguments raised:
As this Court enters upon the task of passing on the validity of an act of a co-equal and coordinate branch of the
Government, it bears emphasis that deeply ingrained in our jurisprudence is the time-honored principle that a statute is
presumed to be valid.[8] This presumption is rooted in the doctrine of separation of powers which enjoins upon the three
coordinate departments of the Government a becoming courtesy for each others acts. [9] Hence, to doubt is to sustain. The
theory is that before the act was done or the law was enacted, earnest studies were made by Congress, or the President, or
both, to insure that the Constitution would not be breached. [10] This Court, however, may declare a law, or portions thereof,
unconstitutional where a petitioner has shown a clear and unequivocal breach of the Constitution, not merely a doubtful or
argumentative one.[11] In other words, before a statute or a portion thereof may be declared unconstitutional, it must be
shown that the statute or issuance violates the Constitution clearly, palpably and plainly, and in such a manner as to leave
no doubt or hesitation in the mind of the Court.[12]
The Issue on Executive Legislation

Petitioners claim that the assailed issuances (Executive Order No. 97-A; Section 5 of Executive Order No. 80; and
Section 4 of BCDA Board Resolution No. 93-05-034) constitute executive legislation, in violation of the rule on separation of
powers. Petitioners argue that the Executive Department, by allowing through the questioned issuances the setting up of
tax and duty-free shops and the removal of consumer goods and items from the zones without payment of corresponding
duties and taxes, arbitrarily provided additional exemptions to the limitations imposed by Republic Act No. 7227, which
limitations petitioners identify as follows:
(1) [Republic Act No. 7227] allowed only tax and duty-free importation of raw materials, capital and equipment.
(2) It provides that any exportation or removal of goods from the territory of the Subic Special Economic Zone to
other parts of the Philippine territory shall be subject to customs duties and taxes under the Customs and
Tariff Code and other relevant tax laws of the Philippines.
Anent the first alleged limitation, petitioners contend that the wording of Republic Act No. 7227 clearly limits the
grant of tax incentives to the importation of raw materials, capital and equipment only. Hence, they claim that the assailed
issuances constitute executive legislation for invalidly granting tax incentives in the importation of consumer goods such as
those being sold in the duty-free shops, in violation of the letter and intent of Republic Act No. 7227.
A careful reading of Section 12 of Republic Act No. 7227, which pertains to the SSEZ, would show that it does not
restrict the duty-free importation only to raw materials, capital and equipment. Section 12 of the cited law is partly
reproduced, as follows:
SECTION 12. Subic Special Economic Zone.

...

The abovementioned zone shall be subject to the following policies:

...

(b) The Subic Special Economic Zone shall be operated and managed as a separate customs territory ensuring
free flow or movement of goods and capital within, into and exported out of the Subic Special Economic
Zone, as well as provideincentives such as tax and duty-free importations of raw materials, capital and
equipment. However, exportation or removal of goods from the territory of the Subic Special Economic
Zone to the other parts of the Philippine territory shall be subject to customs duties and taxes under the
Customs and Tariff Code and other relevant tax laws of the Philippines. [13]
While it is true that Section 12 (b) of Republic Act No. 7227 mentions only raw materials, capital and equipment, this
does not necessarily mean that the tax and duty-free buying privilege is limited to these types of articles to the exclusion
of consumer goods. It must be remembered that in construing statutes, the proper course is to start out and follow the true
intent of the Legislature and to adopt that sense which harmonizes best with the context and promotes in the fullest
manner the policy and objects of the Legislature.[14]
In the present case, there appears to be no logic in following the narrow interpretation petitioners urge. To limit the
tax-free importation privilege of enterprises located inside the special economic zone only to raw materials, capital and
equipment clearly runs counter to the intention of the Legislature to create a free port where the free flow of goods or
capital within, into, and out of the zones is insured.
The phrase tax and duty-free importations of raw materials, capital and equipment was merely cited as an example of
incentives that may be given to entities operating within the zone. Public respondent SBMA correctly argued that the
maximexpressio unius est exclusio alterius, on which petitioners impliedly rely to support their restrictive interpretation,
does not apply when words are mentioned by way of example. [15] It is obvious from the wording of Republic Act No. 7227,
particularly the use of the phrase such as, that the enumeration only meant to illustrate incentives that the SSEZ is
authorized to grant, in line with its being a free port zone.
Furthermore, said legal maxim should be applied only as a means of discovering legislative intent which is not
otherwise manifest, and should not be permitted to defeat the plainly indicated purpose of the Legislature. [16]
The records of the Senate containing the discussion of the concept of special economic zone in Section 12 (a) of
Republic Act No. 7227 show the legislative intent that consumer goods entering the SSEZ which satisfy the needs of the
zone and are consumed there are not subject to duties and taxes in accordance with Philippine laws, thus:
Senator Guingona. . . . The concept of Special Economic Zone is one that really includes the concept of a free port, but it
is broader. While a free port is necessarily included in the Special Economic Zone, the reverse is not true that a free port
would include a special economic zone.

Special Economic Zone, Mr. President, would include not only the incoming and outgoing of vessels, duty-free and tax-free,
but it would involve also tourism, servicing, financing and all the appurtenances of an investment center. So, that is the
concept, Mr. President. It is broader. It includes the free port concept and would cater to the greater needs of Olangapo
City, Subic Bay and the surrounding municipalities.

Senator Enrile. May I know then if a factory located within the jurisdiction of Morong, Bataan that was originally a part of
the Subic Naval reservation, be entitled to a free port treatment or just a special economic zone treatment?

Senator Guingona. As far as the goods required for manufacture is concerned, Mr. President, it would have privileges of
duty-free and tax-free. But in addition, the Special Economic Zone could embrace the needs of tourism, could embrace the
needs of servicing, could embrace the needs of financing and other investment aspects.

Senator Enrile. When a hotel is constructed, Mr. President, in this geographical unit which we call a special economic zone,
will the goods entering to be consumed by the customers or guests of the hotel be subject to duties?

Senator Guingona. That is the concept that we are crafting, Mr. President.

Senator Enrile. No. I am asking whether those goods will be duty-free, because it is constructed within a free port.

Senator Guingona. For as long as it services the needs of the Special Economic Zone, yes.

Senator Enrile. For as long as the goods remain within the zone, whether we call it an economic zone or a free port, for
as long as we say in this law that all goods entering this particular territory will be duty-free and tax-free, for as long as
they remain there, consumed there or reexported or destroyed in that place, then they are not subject to the duties and
taxes in accordance with the laws of the Philippines?

Senator Guingona. Yes.[17]

Petitioners rely on Committee Report No. 1206 submitted by the Ad Hoc Oversight Committee on Bases Conversion on
June 26, 1995. Petitioners put emphasis on the reports finding that the setting up of duty-free stores never figured in the
minds of the authors of Republic Act No. 7227 in attracting foreign investors to the former military baselands. They
maintain that said law aimed to attract manufacturing and service enterprises that will employ the dislocated former
military base workers, but not investors who would buy consumer goods from duty-free stores.
The Court is not persuaded. Indeed, it is well-established that opinions expressed in the debates and proceedings of
the Legislature, steps taken in the enactment of a law, or the history of the passage of the law through the Legislature,
may be resorted to as aids in the interpretation of a statute with a doubtful meaning. [18] Petitioners posture, however,
overlooks the fact that the 1995 Committee Report they are referring to came into being well after the enactment of
Republic Act No. 7227 in 1993. Hence, as pointed out by respondent Executive Secretary Torres, the aforementioned report
cannot be said to form part of Republic Act No. 7227s legislative history.
Section 12 of Republic Act No. 7227, provides in part, thus:
SEC. 12. Subic Special Economic Zone. -- . . .

The abovementioned zone shall be subject to the following policies:

(a) Within the framework and subject to the mandate and limitations of the Constitution and the pertinent provisions of the
Local Government Code, the Subic Special Economic Zone shall be developed into a self-sustaining, industrial, commercial,
financial and investment center to generate employment opportunities in and around the zone and to attract and promote
productive foreign investments.[19]

The aforecited policy was mentioned as a basis for the issuance of Executive Order No. 97-A, thus:
WHEREAS, Republic Act No. 7227 provides that within the framework and subject to the mandate and limitations of the
Constitution and the pertinent provisions of the Local Government Code, the Subic Special Economic and Free Port Zone
(SSEFPZ) shall be developed into a self-sustaining industrial, commercial, financial and investment center to generate
employment opportunities in and around the zone and to attract and promote productive foreign investments; and

WHEREAS, a special tax and duty-free privilege within a Secured Area in the SSEFPZ subject, to existing laws has been
determined necessary to attract local and foreign visitors to the zone.

Executive Order No. 97-A provides guidelines to govern the tax and duty-free privileges within the Secured Area of the
Subic Special Economic and Free Port Zone. Paragraph 1.6 thereof states that (t)he sale of tax and duty-free consumer
items in the Secured Area shall only be allowed in duly authorized duty-free shops.
The Court finds that the setting up of such commercial establishments which are the only ones duly authorized to sell
consumer items tax and duty-free is still well within the policy enunciated in Section 12 of Republic Act No. 7227
that . . .the Subic Special Economic Zone shall be developed into a self-sustaining, industrial, commercial, financial
and investment center to generate employment opportunities in and around the zone and to attract and promote
productive foreign investments. (Emphasis supplied.)
However, the Court reiterates that the second sentences of paragraphs 1.2 and 1.3 of Executive Order No. 97-A,
allowing tax and duty-free removal of goods to certain individuals, even in a limited amount, from the Secured Area of the
SSEZ, are null and void for being contrary to Section 12 of Republic Act No. 7227. Said Section clearly provides that
exportation or removal of goods from the territory of the Subic Special Economic Zone to the other parts of the Philippine
territory shall be subject to customs duties and taxes under the Customs and Tariff Code and other relevant tax laws of the
Philippines.
On the other hand, insofar as the CSEZ is concerned, the case for an invalid exercise of executive legislation is
tenable.
In John Hay Peoples Alternative Coalition, et al. v. Victor Lim, et al.,[20] this Court resolved an issue, very much like
the one herein, concerning the legality of the tax exemption benefits given to the John Hay Economic Zone under
Presidential Proclamation No. 420, Series of 1994, CREATING AND DESIGNATING A PORTION OF THE AREA COVERED BY THE
FORMER CAMP JOHN AS THE JOHN HAY SPECIAL ECONOMIC ZONE PURSUANT TO REPUBLIC ACT NO. 7227.
In that case, among the arguments raised was that the granting of tax exemptions to John Hay was an invalid and
illegal exercise by the President of the powers granted only to the Legislature. Petitioners therein argued that Republic Act
No. 7227 expressly granted tax exemption only to Subic and not to the other economic zones yet to be established. Thus,
the grant of tax exemption to John Hay by Presidential Proclamation contravenes the constitutional mandate that [n]o law
granting any tax exemption shall be passed without the concurrence of a majority of all the members of Congress. [21]
This Court sustained the argument and ruled that the incentives under Republic Act No. 7227 are exclusive only to the
SSEZ. The President, therefore, had no authority to extend their application to John Hay. To quote from the Decision:
More importantly, the nature of most of the assailed privileges is one of tax exemption. It is the legislature, unless limited
by a provision of a state constitution, that has full power to exempt any person or corporation or class of property from
taxation, its power to exempt being as broad as its power to tax. Other than Congress, the Constitution may itself provide
for specific tax exemptions, or local governments may pass ordinances on exemption only from local taxes.

The challenged grant of tax exemption would circumvent the Constitutions imposition that a law granting any tax
exemption must have the concurrence of a majority of all the members of Congress. In the same vein, the other kinds of
privileges extended to the John Hay SEZ are by tradition and usage for Congress to legislate upon.

Contrary to public respondents suggestions, the claimed statutory exemption of the John Hay SEZ from taxation should be
manifest and unmistakable from the language of the law on which it is based; it must be expressly granted in a statute
stated in a language too clear to be mistaken. Tax exemption cannot be implied as it must be categorically and
unmistakably expressed.

If it were the intent of the legislature to grant to John Hay SEZ the same tax exemption and incentives given to the Subic
SEZ, it would have so expressly provided in R.A. No. 7227.[22]

In the present case, while Section 12 of Republic Act No. 7227 expressly provides for the grant of incentives to the
SSEZ, it fails to make any similar grant in favor of other economic zones, including the CSEZ. Tax and duty-free incentives
being in the nature of tax exemptions, the basis thereof should be categorically and unmistakably expressed from the
 language of the statute. Consequently, in the absence of any express grant of tax and duty-free privileges to the CSEZ in
Republic Act No. 7227, there would be no legal basis to uphold the questioned portions of two issuances: Section 5 of
Executive Order No. 80 and Section 4 of BCDA Board Resolution No. 93-05-034, which both pertain to the CSEZ.
Petitioners also contend that the questioned issuances constitute executive legislation for allowing the removal of
consumer goods and items from the zones without payment of corresponding duties and taxes in violation of Republic Act
No. 7227 as Section 12 thereof provides for the taxation of goods that are exported or removed from the SSEZ to other
parts of the Philippine territory.
On September 26, 1997, Executive Order No. 444 was issued, curtailing the duty-free shopping privileges in the SSEZ
and the CSEZ to prevent abuse of duty-free privilege and to protect local industries from unfair competition. The pertinent
provisions of said issuance state, as follows:
SECTION 3. Special Shopping Privileges Granted During the Year-round Centennial Anniversary Celebration in 1998. Upon
effectivity of this Order and up to the Centennial Year 1998, in addition to the permanent residents, locators and
employees of the fenced-in areas of the Subic Special Economic and Freeport Zone and the Clark Special Economic Zone
who are allowed unlimited duty free purchases, provided these are consumed within said fenced-in areas of the Zones, the
residents of the municipalities adjacent to Subic and Clark as respectively provided in R.A. 7227 (1992) and E.O. 97-A s.
1993 shall continue to be allowed One Hundred US Dollars (US$100) monthly shopping privilege until 31 December
1998. Domestic tourists visiting Subic and Clark shall be allowed a shopping privilege of US$25 for consumable goods which
shall be consumed only in the fenced-in area during their visit therein.

SECTION 4. Grant of Duty Free Shopping Privileges Limited Only To Individuals Allowed by Law. Starting 1 January 1999, only
the following persons shall continue to be eligible to shop in duty free shops/outlets with their corresponding purchase
limits:

a. Tourists and Filipinos traveling to or returning from foreign destinations under E.O. 97-A s. 1993 One Thousand US Dollars
(US$1,000) but not to exceed Ten Thousand US Dollars (US$10,000) in any given year;

b. Overseas Filipino Workers (OFWs) and Balikbayans defined under R.A. 6768 dated 3 November 1989 Two Thousand US Dollars
(US$2,000);

c. Residents, eighteen (18) years old and above, of the fenced-in areas of the freeports under R.A. 7227 (1992) and E.O. 97-A s.
1993 Unlimited purchase as long as these are for consumption within these freeports.

The term "Residents" mentioned in item c above shall refer to individuals who, by virtue of domicile or employment, reside
on permanent basis within the freeport area. The term excludes (1) non-residents who have entered into short- or long-
term property lease inside the freeport, (2) outsiders engaged in doing business within the freeport, and (3) members of
private clubs (e.g., yacht and golf clubs) based or located within the freeport. In this regard, duty free privileges granted
to any of the above individuals (e.g., unlimited shopping privilege, tax-free importation of cars, etc.) are hereby revoked.
[23]

A perusal of the above provisions indicates that effective January 1, 1999, the grant of duty-free shopping privileges
to domestic tourists and to residents living adjacent to SSEZ and the CSEZ had been revoked. Residents of the fenced-in
area of the free port are still allowed unlimited purchase of consumer goods, as long as these are for consumption within
these freeports. Hence, the only individuals allowed by law to shop in the duty-free outlets and remove consumer goods out
of the free ports tax-free are tourists and Filipinos traveling to or returning from foreign destinations, and Overseas Filipino
Workers and Balikbayans as defined under Republic Act No. 6768.[24]
Subsequently, on October 20, 2000, Executive Order No. 303 was issued, amending Executive Order No. 444. Pursuant
to the limited duration of the privileges granted under the preceding issuance, Section 2 of Executive Order No. 303
declared that [a]ll special shopping privileges as granted under Section 3 of Executive Order 444, s. 1997, are hereby
deemed terminated. The grant of duty free shopping privileges shall be restricted to qualified individuals as provided by
law.
It bears noting at this point that the shopping privileges currently being enjoyed by Overseas Filipino Workers,
Balikbayans, and tourists traveling to and from foreign destinations, draw authority not from the issuances being assailed
herein, but from Executive Order No. 46 [25] and Republic Act No. 6768, both enacted prior to the promulgation of Republic
Act No. 7227.
From the foregoing, it appears that petitioners objection to the allowance of tax-free removal of goods from the
special economic zones as previously authorized by the questioned issuances has become moot and academic.
In any event, Republic Act No. 7227, specifically Section 12 (b) thereof, clearly provides that exportation or removal
of goods from the territory of the Subic Special Economic Zone to the other parts of the Philippine territory shall be subject
to customs duties and taxes under the Customs and Tariff Code and other relevant tax laws of the Philippines.
 Thus, the removal of goods from the SSEZ to other parts of the Philippine territory without payment of said customs
duties and taxes is not authorized by the Act. Consequently, the following italicized provisions found in the second
sentences of paragraphs 1.2 and 1.3, Section 1 of Executive Order No. 97-A are null and void:
1.2 Residents of the SSEFPZ living outside the Secured Area can enter and consume any quantity of consumption items
in hotels and restaurants within the Secured Area. However, these residents can purchase and bring out of the
Secured Area to other parts of the Philippine territory consumer items worth not exceeding US $100 per month
per person. Only residents age 15 and over are entitled to this privilege.

1.3 Filipinos not residing within the SSEFPZ can enter the Secured Area and consume any quantity of consumption
items in hotels and restaurants within the Secured Area. However, they can purchase and bring out of the
Secured Area to other parts of the Philippine territory consumer items worth not exceeding US $200 per year
per person. Only Filipinos age 15 and over are entitled to this privilege. [26]

A similar provision found in paragraph 5, Section 4(A) of BCDA Board Resolution No. 93-05-034 is also null and void.
Said Resolution applied the incentives given to the SSEZ under Republic Act No. 7227 to the CSEZ, which, as aforestated, is
without legal basis.
Having concluded earlier that the CSEZ is excluded from the tax and duty-free incentives provided under Republic Act
No. 7227, this Court will resolve the remaining arguments only with regard to the operations of the SSEZ. Thus, the assailed
issuance that will be discussed is solely Executive Order No. 97-A, since it is the only one among the three questioned
issuances which pertains to the SSEZ.
Equal Protection of the Laws

Petitioners argue that the assailed issuance (Executive Order No. 97-A) is violative of their right to equal protection of
the laws, as enshrined in Section 1, Article III of the Constitution. To support this argument, they assert that private
respondents operating inside the SSEZ are not different from the retail establishments located outside, the products sold
being essentially the same. The only distinction, they claim, lies in the products variety and source, and the fact that
private respondents import their items tax-free, to the prejudice of the retailers and manufacturers located outside the
zone.
Petitioners contention cannot be sustained. It is an established principle of constitutional law that the guaranty of the
equal protection of the laws is not violated by a legislation based on a reasonable classification. [27] Classification, to be
valid, must (1) rest on substantial distinction, (2) be germane to the purpose of the law, (3) not be limited to existing
conditions only, and (4) apply equally to all members of the same class. [28]
Applying the foregoing test to the present case, this Court finds no violation of the right to equal protection of the
laws.First, contrary to petitioners claim, substantial distinctions lie between the establishments inside and outside the
zone, justifying the difference in their treatment. In Tiu v. Court of Appeals,[29] the constitutionality of Executive Order No.
97-A was challenged for being violative of the equal protection clause. In that case, petitioners claimed that Executive
Order No. 97-A was discriminatory in confining the application of Republic Act No. 7227 within a secured area of the SSEZ,
to the exclusion of those outside but are, nevertheless, still within the economic zone.
Upholding the constitutionality of Executive Order No. 97-A, this Court therein found substantial differences between
the retailers inside and outside the secured area, thereby justifying a valid and reasonable classification:
Certainly, there are substantial differences between the big investors who are being lured to establish and operate their
industries in the so-called secured area and the present business operators outside the area. On the one hand, we are
talking of billion-peso investments and thousands of new jobs. On the other hand, definitely none of such magnitude. In the
first, the economic impact will be national; in the second, only local. Even more important, at this time the business
activities outside the secured area are not likely to have any impact in achieving the purpose of the law, which is to turn
the former military base to productive use for the benefit of the Philippine economy. There is, then, hardly any reasonable
basis to extend to them the benefits and incentives accorded in R.A. 7227. Additionally, as the Court of Appeals pointed
out, it will be easier to manage and monitor the activities within the secured area, which is already fenced off, to prevent
fraudulent importation of merchandise or smuggling.

It is well-settled that the equal-protection guarantee does not require territorial uniformity of laws. As long as there are
actual and material differences between territories, there is no violation of the constitutional clause. And of course,
anyone, including the petitioners, possessing the requisite investment capital can always avail of the same benefits by
channeling his or her resources or business operations into the fenced-off free port zone. [30]

The Court in Tiu found real and substantial distinctions between residents within the secured area and those living
within the economic zone but outside the fenced-off area. Similarly, real and substantial differences exist between the
establishments herein involved. A significant distinction between the two groups is that enterprises outside the zones
maintain their businesses within Philippine customs territory, while private respondents and the other duly-registered zone
enterprises operate within the so-called separate customs territory. To grant the same tax incentives given to enterprises
within the zones to businesses operating outside the zones, as petitioners insist, would clearly defeat the statutes intent to
carve a territory out of the military reservations in Subic Bay where free flow of goods and capital is maintained.
The classification is germane to the purpose of Republic Act No. 7227. As held in Tiu, the real concern of Republic Act
No. 7227 is to convert the lands formerly occupied by the US military bases into economic or industrial areas. In
furtherance of such objective, Congress deemed it necessary to extend economic incentives to the establishments within
the zone to attract and encourage foreign and local investors. This is the very rationale behind Republic Act No. 7227 and
other similar special economic zone laws which grant a complete package of tax incentives and other benefits.
The classification, moreover, is not limited to the existing conditions when the law was promulgated, but to future
conditions as well, inasmuch as the law envisioned the former military reservation to ultimately develop into a self-
sustaining investment center.
And, lastly, the classification applies equally to all retailers found within the secured area. As ruled in Tiu, the
individuals and businesses within the secured area, being in like circumstances or contributing directly to the achievement
of the end purpose of the law, are not categorized further. They are all similarly treated, both in privileges granted and in
obligations required.
With all the four requisites for a reasonable classification present, there is no ground to invalidate Executive Order
No. 97-A for being violative of the equal protection clause.
Prohibition against Unfair Competition
and Practices in Restraint of Trade

Petitioners next argue that the grant of special tax exemptions and privileges gave the private respondents undue
advantage over local enterprises which do not operate inside the SSEZ, thereby creating unfair competition in violation of
the constitutional prohibition against unfair competition and practices in restraint of trade.
The argument is without merit. Just how the assailed issuance is violative of the prohibition against unfair competition
and practices in restraint of trade is not clearly explained in the petition. Republic Act No. 7227, and consequently
Executive Order No. 97-A, cannot be said to be distinctively arbitrary against the welfare of businesses outside the zones.
The mere fact that incentives and privileges are granted to certain enterprises to the exclusion of others does not render
the issuance unconstitutional for espousing unfair competition. Said constitutional prohibition cannot hinder the Legislature
from using tax incentives as a tool to pursue its policies.
Suffice it to say that Congress had justifiable reasons in granting incentives to the private respondents, in accordance
with Republic Act No. 7227s policy of developing the SSEZ into a self-sustaining entity that will generate employment and
attract foreign and local investment. If petitioners had wanted to avoid any alleged unfavorable consequences on their
profits, they should upgrade their standards of quality so as to effectively compete in the market. In the alternative, if
petitioners really wanted the preferential treatment accorded to the private respondents, they could have opted to
register with SSEZ in order to operate within the special economic zone.
Preferential Use of Filipino Labor, Domestic Materials
and Locally Produced Goods

Lastly, petitioners claim that the questioned issuance (Executive Order No. 97-A) openly violated the State policy of
promoting the preferential use of Filipino labor, domestic materials and locally produced goods and adopting measures to
help make them competitive.
Again, the argument lacks merit. This Court notes that petitioners failed to substantiate their sweeping conclusion
that the issuance has violated the State policy of giving preference to Filipino goods and labor. The mere fact that said
issuance authorizes the importation and trade of foreign goods does not suffice to declare it unconstitutional on this
ground.
Petitioners cite Manila Prince Hotel v. GSIS[31] which, however, does not apply. That case dealt with the policy
enunciated under the second paragraph of Section 10, Article XII of the Constitution, [32] applicable to the grant of rights,
privileges, and concessions covering the national economy and patrimony, which is different from the policy invoked in this
petition, specifically that of giving preference to Filipino materials and labor found under Section 12 of the same Article of
the Constitution. (Emphasis supplied).
In Taada v. Angara,[33] this Court elaborated on the meaning of Section 12, Article XII of the Constitution in this wise:
[W]hile the Constitution indeed mandates a bias in favor of Filipino goods, services, labor and enterprises, at the same
time, it recognizes the need for business exchange with the rest of the world on the bases of equality and reciprocity and
limits protection of Filipino enterprises only against foreign competition and trade practices that are unfair. In other words,
the Constitution did not intend to pursue an isolationist policy. It did not shut out foreign investments, goods and services in
the development of the Philippine economy. While the Constitution does not encourage the unlimited entry of foreign
goods, services and investments into the country, it does not prohibit them either. In fact, it allows an exchange on the
basis of equality and reciprocity, frowning only on foreign competition that is unfair.[34]
 This Court notes that the Executive Department, with its subsequent issuance of Executive Order Nos. 444 and 303,
has provided certain measures to prevent unfair competition. In particular, Executive Order Nos. 444 and 303 have
restricted the special shopping privileges to certain individuals. [35] Executive Order No. 303 has limited the range of items
that may be sold in the duty-free outlets, [36] and imposed sanctions to curb abuses of duty-free privileges. [37] With these
measures, this Court finds no reason to strike down Executive Order No. 97-A for allegedly being prejudicial to Filipino
labor, domestic materials and locally produced goods.
WHEREFORE, the petition is PARTLY GRANTED. Section 5 of Executive Order No. 80 and Section 4 of BCDA Board
Resolution No. 93-05-034 are hereby declared NULL and VOID and are accordingly declared of no legal force and effect.
Respondents are hereby enjoined from implementing the aforesaid void provisions. All portions of Executive Order No. 97-A
are valid and effective, except the second sentences in paragraphs 1.2 and 1.3 of said Executive Order, which are hereby
declared INVALID.
No costs.
SO ORDERED.
Davide, Jr., C.J., Puno, Panganiban, Quisumbing, Ynares-Santiago, Sandoval-Gutierrez, Austria-Martinez, Carpio-
Morales, Callejo, Sr., Tinga, Chico-Nazario, and Garcia, JJ., concur.
Carpio, J., no part.
Corona, J., on official leave.

G.R. No. L-8782 April 28, 1956

MARCELINO B. FLORENTINO and LOURDES T. ZANDUETA, petitioners-appellants,

vs.
PHILIPPINE NATIONAL BANK, respondent-appellee.

Marcelino B. Florentino for appellants.

Ramon de los Reyes for appellee.

JUGO, J.:

The petitioners and appellants filed with the Court of First Instance of La Union a petition for mandamus against
respondent and appellee, Philippine National Bank, to compel it to accept the backpay certificate of petitioner Marcelino
B. Florentino issued to him by the Republic of the Philippines, to pay an indebtedness to the Philippine National Bank in the
sum of P6,800 secured by real estate mortgage on certain properties.

The case was submitted on an agreed statement of facts, which reads as follows:

Parties herein represented by counsel, have agreed on the following facts:

1. That the petitioners are indebted to the respondent bank in the amount of P6,800 plus interest, the same
having been incurred on January 2, 1953, which is due on January 2, 1954;.

2. That the said loan is secured by a mortgage of real properties;.

3. That the petitioner Marcelino B. Florentino is a holder of Backpay Acknowledgment No. 1721 dated October 6,
1954, in the amount of P22,896.33 by virtue of Republic Act No. 897 approved on June 20, 1953; and.

4. That on December 27, 1953, petitioners offered to pay their loan with the respondent bank with their backpay
certificate, but the respondent bank, on December 29, 1953, refused to accept petitioner's offer to pay the said
indebtedness with the latter's backpay certificate;

The legal provision involved is section 2 of Republic Act No. 879, which provides:

SEC. 2. Section two of the said Act (Republic Act 304) as amended by Republic Act Numbered Eight hundred, is
further amended to read:

SEC. 2. The Treasurer of the Philippines shall, upon application of all persons specified in section one hereof and
within one year from the approval of this Act, and under such rules and regulations as may be promulgated by the
 Secretary of Finance, acknowledge and file requests for the recognition of the right of the salaries or wages as
provided in section one hereof, and notice of such acknowledgment shall be issued to the applicant which shall
state the total amount of such salaries or wages due the applicant, and certify that it shall be redeemed by the
Government of the Philippines within ten years from the date of their issuance without interest: Provided, That
upon application and subject to such rules and regulations as may be approved by the Secretary of Finance a
certificate of indebtedness may be issued by the Treasurer of the Philippines covering the whole or a part of the
total salaries or wages the right to which has been duly acknowledged and recognized, provided that the face
value of such certificate of indebtedness shall not exceed the amount that the applicant may need for the
payment of (1) obligations subsisting at the time of the approval of this amendatory Act for which the applicant
may directly be liable to the Government or to any of its branches or instrumentalities, or the corporations owned
or control by the Government, or to any citizen of the Philippines, or to any association or corporation organized
under the laws of the Philippines, who may be willing to accept the same for such settlement.

The question raised is whether the clause "who may be willing to accept the same for settlement" refers to all antecedents
"the Government, any of its branches or instrumentalities, the corporations owned or controlled by the Government, etc.,"
or only the last antecedent "any citizen of the Philippines, or any association or corporation organized under the laws of the
Philippines.

The contention of the respondent-appellee, Philippine National Bank is that said qualifying clause refers to all the
antecedents, whereas the appellant's contention is that it refers only to the last antecedent.

Incidentally, it may be stated that one of the purposes of Republic Act No. 879 was to include veterans of the Philippine
Army and their wives or orphans among the beneficiaries of the Backpay Law, Republic Act No. 304, in recognition of their
great sacrifices in the resistance movement. as shown by the following quotation from the Congressional Record:

. . . This particular bill, House Bill No. 1228, has been filed by this public servant for three objectives: First, to
serve as a source of financial aid to needy veterans, like crippled or disabled veterans, and to their wives or
orphans. Secondly, to give recognition to the sacrifices of those who joined the last war, and particularly to those
who have given their all for the cause of the last war. And thirdly, to eliminate the discrimination that has been
committed either through oversight, or on purpose, against the members of the Philippine Army, the Philippine
Scouts, and guerrillas or the so-called civilian volunteers, who joined the resistance movement. (Congressional
Record No. 61, 2nd Congress, 4th Regular Session, May 6, 1953, page 74; quoted in Appellant's brief, pages 13-14.).

Grammatically, the qualifying clause refers only to the last antecedent; that is, "any citizen of the Philippines or any
association or corporation organized under the laws of the Philippines." It should be noted that there is a comma before the
words "or to any citizen, etc.," which separates said phrase from the preceding ones.

But even disregarding the grammatical construction, as done by the appellee, still there are cogent and powerful reasons
why the qualifying clause should be limited to the last antecedent. In the first place, to make the acceptance of the
backpay certificates obligatory upon any citizen, association, or corporation, which are not government entities or owned
or controlled by the government, would render section 2 of Republic Act No. 897 unconstitutional, for it would amount to
an impairment of the obligation of contracts by compelling private creditors to accept a sort of promissory note payable
within ten years with interest at a rate very much lower than the current or even the legal one.

The other reason is found in the Congressional Record, which says:

Mr. TIBLE: On page 4, lines 17, between the words "this" and "act", insert the word "amendatory".

Mr. ZOSA: What is the purpose of the amendment?.

Mr. TIBLE: The purpose of the amendment is to clarify the provision of section 2. I believe, gentleman from Cebu,
that section 2, as amended in this amendatory bill permits the use of backpay certificates as payment for
obligations and indebtedness in favor of the government. (Congressional Record No. 64, 2nd Congress, 4th Regular
Session May 11, 1953 page 41; quoted in Appellants brief, p. 15.).

As there would have been no need to permit by law the use of backpay certificates in payment of debts to private persons,
if they are willing to accept them, the permission necessarily refers to the Government of the Philippines, its agencies or
other instrumentalities, etc.

Another reason is that it is matter of general knowledge that many officials and employees of the Philippine Government,
who had served during the Japanese Occupation, have already received their backpay certificates and used them for the
payment of the obligations to the Government and its entities for debts incurred before the approval of Republic Act No.
304.

The case of Diokno vs. Rehabilitation Finance Corporation, 91 Phil., 608 (July 11, 1952), is different from the present one.
In the Diokno case, his debt to the Rehabilitation Finance Corporation was incurred on January 27, 1950. He brought the
action on November 10, 1950, under the provisions of Republic Act No. 304 (section 2), which was approved on June 18,
1948; that is, one year and almost eight months before Diokno could not avail himself of the provisions of section 2 of Act
No. 304, because said section provides that the application for recognition of backpay must have been filed within one year
after the approval of said Act No. 304, and the debt must be subsisting at the time of said approval, Diokno having incurred
the debt on January 27, 1950, and brought action on November 10, 1950. It was, therefore, discretionary in the Diokno case
for the Rehabilitation Finance Corporation to accept or not his backpay certificate in payment.

The Secretary of Justice, in his Opinion No. 226, series of 1948, held that the phrase "who may be willing to accept the
same for such settlement" qualifies only its immediate antecedent and does not apply to the Government or its agencies.

The appellee asserts in his brief that the Secretary of Justice, in his letter of June 19, 1953, remarked that the clause "who
may be willing to accept such settlement" refers to all antecedents, including the Government and its agencies. We are not
impressed with this observation of the Secretary, for we believe that his Opinion No. 226, series of 1948, correct for the
reasons we have stated above.

In the present case, Marcelino B. Florentino incurred his debt to the Philippine National Bank on January 2, 1953; hence,
the obligation was subsisting when the Amendatory Act No. 897 was approved. Consequently, the present case falls squarely
under the provisions of section 2 of the Amendatory Act No. 897.

In view of the foregoing, the decision appealed from is reversed, and the appellee is ordered to accept the backpay
certificate above mentioned of the appellant, Marcelino B. Florentino, in payment of his above cited debt to the appellee,
without interest from December 27, 1953, the date when he offered said backpay certificate in payment. Without
pronouncement as to costs. It is ordered.

Paras, Bengzon, C.J., Montemayor, Reyes, A., Jugo, Bautista Angelo, Concepcion, Reyes, J. B. L. and Endencia, JJ., concur.
G.R. Nos. L-22160 & L-22161 January 21, 1974

THE PEOPLE OF THE PHILIPPINES, plaintiff-appellee,

vs.
TEODORO TAMANI, accused-appellant.

Office of the Solicitor General Antonio P. Barredo, Assistant Solicitor General Felicisimo R. Rosete and Solicitor Norberto P.
Eduardo for plaintiff-appellee.

Constancio S. Vitug for accused-appellant.

AQUINO, J.:

This is an appeal of defendant Teodoro Tamani y Marinay from the decision of the Court of First Instance of Isabela, (a)
sentencing him to "life imprisonment" for the murder of Jose Siyang and ordering him to indemnify the victim's heirs
in the sum of P6,000 and (b) further sentencing him to an indeterminate penalty of two (2) years, four (4) months and
one (1) day of prision correccional to eight (8) years and twenty-one (21) days of prision mayor for the attempted
murder of Eduardo Domingo and ordering him to indemnify the victim in the sum of P2,000 (Crim. Cases Nos. II-192
and II-198).

Issue as to dismissal of the appeal.After the appellant had filed his brief, the Solicitor General filed a motion to
dismiss the appeal on the ground that the notice of appeal was forty-seven days late. Appellant's counsel de oficio did
not oppose the motion. Action thereon was "deferred until this case is considered on the merits". (Resolution of March
7, 1967). The motion to dismiss is reiterated in appellee's brief. That preliminary question should first be resolved.

The lower court's decision convicting defendant Tamani was promulgated on February 14, 1963. A copy thereof was
served on his counsel on February 25, 1963. On March 1, 1963 he filed a motion for reconsideration. It was denied. A
copy of the order of denial was served by registered mail on July 13, 1963 on defendant's counsel through his wife. He
had eleven days or up to July 24, 1963 within which to appeal (if the reglementary fifteen-day period for appeal
should be computed from the date of notification and not from the date of promulgation of the decision). He filed his
notice of appeal only on September 10, 1963 or forty eight days from July 24th.

Silvestre B. Bello, defendant's counsel, filed a sworn statement, accompanying the notice of appeal. In that affidavit,
he stated that the trial court's order, denying his motion for reconsideration, although admittedly received by his wife
on July 13th, was never brought to his attention and that he came to know of the order only on September 7th when
he verified the expediente of the case and discovered that an order of denial had been issued. He averred that his
wife must have lost the envelope containing the order.

The trial court opined that the wife's affidavit should have been submitted and that the defendant should have filed a
motion praying that the tardy appeal be given due course.

After considering the gravity of the two penalties imposed on the accused and the earnest plea of defense counsel,
the trial court gave due course to the appeal without prejudice to the right of the Solicitor General to "raise the
question of jurisdiction on the ground of a very much belated appeal".

Rule 122 of the Rules of Court provides:

SEC. 6. When appeal to be taken.An appeal must be taken within fifteen (15) days from
promulgation or notice of the judgment or order appealed from. This period for perfecting an appeal
shall be interrupted from the time a motion for new trial is filed until notice of the order overruling
the motion shall have been served upon the defendant or his attorney.

The word "must" in section 6 is synonymous with "ought". It connotes compulsion or mandatoriness. The clear terms of
section 6 leave no room for doubt that the appeal should be effected within fifteen days from the promulgation of the
judgment.
The counsel for appellant Tamani must have so understood that import of section 6 (which is confirmed by the practice
in trial courts) as evinced by the fact that his motion for reconsideration was filed on March 1st, which was the
fifteenth or last day of the reglementary period.

The assumption that the fifteen-day period should be counted from February 25, 1963, when a copy of the decision
was allegedly served on appellant's counsel by registered mail, is not well-taken. The word "promulgation" in section 6
should be construed as referring to "judgment" (see section 6 of Rule 120), while the word "notice" should be
construed as referring to "order". That construction is sanctioned by the rule of reddendo singula singulis: "referring
each to each; referring each phrase or expression to its appropriate object", or "let each be put in its proper place,
that is, the words should be taken distributively" (76 C. J. S. 175).

Therefore, when the order denying appellant's motion for reconsideration was served by registered mail on July 13th
on appellant's counsel, he had only one (1) day within which to file his notice of appeal and not eleven days. That
construction is an application by analogy or in a suppletory character of the rule governing appeals in civil cases which
is embodied in section 3, Rule 41 of the Rules of Court.

Appellant Tamani's notice of appeal, filed on September 10, 1963, was fifty-eight days late. A regoristic application of
section 6 justifies the dismissal of his appeal, as prayed for by the prosecution.

However, considering that appellants right to seek a review of his case was lost by reason of his counsel's inadvertence
and considering further that the briefs have been submitted, the Court has resolved to review the record to obviate
any possible miscarriage of justice (Cf. Marbury vs. Madison, 1 Cranch 135, 2 L. ed. 60, where Chief Justice Marshall
discussed the merits of a mandamus action although the Court held that it had no power to issue that writ).

Uncontroverted facts.There is no dispute that sometime after twilight on the night of June 11, 1953 in the place
called Centro at the commercial street of Angadanan, Isabela, Jose Siyang (Syang), the town assistant sanitary
inspector, was mortally wounded by gunfire. Death resulted from internal hemorrhage caused by the following four (4)
through and through gunshot wounds which followed an oblique direction from the point of entry to exit:

1. Entry, chest about 2- inches from level of the nipple. Exit, at the back level of twelfth dorsal
vertebrae to the right side.

2. Entry, above right clavicle (suprasternal notch) middle portion. Exit, at the back at the level of the
right angle of scapula.

3. Entry, anterior aspect of left shoulder. Exit, at the back of shoulder about 2- inches from tip of
armpit (left side).

4. Entry, anterior aspect of right forearm middle in slight oblique direction from the point of entry to
exit. (Exh. F. Certificate issued by Pablo H. Gaffud, M.D.).

By means of the same gunfire, an attempt was made to kill Mayor Eduardo Domingo. He sustained a through and
through wound in the palm of his right hand which caused his confinement in the Isabela Provincial Hospital from June
11 to 22, 1953 (Exh. E, Certificate issued by J. L. Maddela, Sr., Resident Physician).

More than three years from the time that tragedy transpired, or on October 2 and 3, 1956, appellant Tamani signed
and thumbmarked two sworn statements before the agents of the National Bureau of Investigation (NBI), wherein he
confessed that he was the one who shot Siyang and Mayor Domingo; that his companion on the occasion of the
shooting was Domingo Cadawan; that on the morning of June 11, 1953 he and Cadawan were dismissed as policemen
and that Vice-Mayor Villamor Tamani, Matias de la Fuente and Rufino de los Santos instigated him to liquidate Mayor
Domingo (Exh. A and B). The two statements are in English, a language which Tamani understands (19 tsn II Valencia).

Inasmuch as the crimes, murder and attempted murder, have been proven, meaning that the corpus delicti had been
established, and appellant Tamani had confessed having committed the same, there should be an airtight case against
him. Rule 133 of the Rules of Court provides:

SEC. 3. Extrajudicial confession, not sufficient ground for conviction.An extrajudicial confession
made by an accused, shall not be sufficient ground for conviction, unless corroborated by evidence
of corpus delicti. (Same as See. 96, Rule 123, 1940 Rules of Court).
Tamani's confession is corroborated by the undisputed evidence of the corpus delicti.

However, during the trial, he repudiated his confession. He assailed its voluntariness. He set up the defense of alibi.
Through his principal witness, Francisco Siyang, the father of the deceased Jose Siyang, he endeavored to prove that
the latter was shot by Policemen Gaspar Ibarra and Melchor Tumaneng. Thus, a simple case, where the extrajudicial
confession is corroborated by evidence of thecorpus delicti, became controversial, complicated and perplexing.

Version of the prosecution.In addition to Tamani's extrajudicial confession (Exh. A and B), the prosecution offered
the testimonies of complainant Domingo, Doctor Pablo H. Gaffud, Juana Vittori Vda. de Ibarra, Emiteria Ibarra, Ilustre
D. Mendoza, Mariano G. Almeda, Teodoro Colobong and Martin Caniero.

The prosecution's evidence discloses that Domingo was the mayor of Angadanan since 1947. Prior to June 11, 1953,
he was suspended from office by the Governor. During Domingo's suspension, Villamor Tamani, the vice-mayor,
functioned as acting mayor. He appointed as policeman his second cousin, appellant Teodoro Tamani who was then
twenty-four years old. The vice-mayor used to appoint Teodoro Tamani as policeman whenever Domingo was
suspended. Teodoro Tamani resigned as policeman shortly before June 11th. In the afternoon of June 10th, Domingo
was reinstated and he reassumed the office of mayor.

The reinstatement of Domingo was obviously resented by Vice-Mayor Villamor Tamani because it meant the
termination of his tenure as acting mayor. On June 10th Teodoro Tamani and Domingo Cadawan (also a former
policeman like Teodoro Tamani) were summoned for a conference by the vice-mayor to his house at Barrio Aniog,
Angadanan. Present at the conference were the vice-mayor and his men, Matias de la Fuente and Rufino de los Santos.
It was decided at that meeting that Mayor Domingo should be liquidated. De la Fuente handed to Teodoro Tamani a
carbine.

Appellant Tamani and Cadawan spent the night in the vice-mayor's house. On the following morning of June 11th,
Cadawan was sent on a mission to the poblacion of Angadanan to ascertain the whereabouts of the quarry, Mayor
Domingo. At around seven o'clock in the evening, Cadawan returned to the vice-mayor's house and apprised appellant
Tamani that Domingo was in front of the store of Pedro Pua at the town's commercial street.

Cadawan and Teodoro Tamani proceeded with dispatch to the poblacion, making shortcuts by passing through the
yards of neighboring houses. Tamani carried the carbine. On entering the yard of the house adjoining Pedro Pua's
store, Cadawan stumbled. The resulting noise attracted the attention of the owner of the house, Mrs. Ibarra, who
focused a flashlight at Tamani and, on recognizing him, uttered his nickname, Doro. She had known Doro since
childhood. She saw that he was carrying a gun.

She had just taken her supper. She and her daughter, Emiteria Ibarra, were sitting on the veranda. It was while
chewing her buyo that Mrs. Ibarra heard somebody trip in her yard on the cement floor intended as the base of a tank.
Almost simultaneously, she heard the grunting (ngik-ngik) of her pig. When she trained her flashlight on the intruder
and recognized Doro (appellant Tamani) with a gun and called him, the latter answered, "Tia" (Aunt).

Mrs. Ibarra saw that Teodoro Tamani passed under the eaves of her house, crossed the bamboo fence separating her
from the vacant lot of Pedro Pua and proceeded to the corner of the vacant lot near the gate of galvanized iron sheets
and the edge of the cemented pavement which was in front of Pedro Pua's store (see sketch, Exh. C). As appellant
Tamani passed the fence, he produced a "cracking noise". Emiteria Ibarra testified:

Q. Who say (saw) Teodoro Tamani? A. My mother and myself, sir.

Q. What was the appearance of Teodoro Tamani when you saw him after your mother
lighted him with the light of the flashlight? A. When my mother flashed the
flashlight towards him at the same time my mother called, "Doro" and then he
answered "TIA" and he was carrying a firearm, sir.

Q. Why do you know that when you and your mother heard the cracking of the fence
Teodoro Tamani went inside the fence? A. We know it because of the cracking of
the fence, besides that we saw him proceeded towards the fence, sir.

Q. After Teodoro Tamani entered that fence as you say, what happened, if any? A.
He proceeded towards the gate of the Chinese, sir.
 Q. What happened, if any, after Teodoro Tamani went to that gate? A. Upon
arriving at the gate we heard the gun reports, sir.

Q. How many gun reports, if you remember? A. Maybe eight (8) or nine (9), sir.

Q. Do you know where the gun reports came from? A. Yes, sir, because I saw the
sparks of the bullets when they were fired, sir.

Q. Did you know who fired? A. I know, sir.

Q. Who? A. Teodoro Tamani, because he was the only one who entered with a gun,
sir (74-75 tsn Jan. 16, 1959).

Q. Who fired? A. Teodoro Tamani, sir.

Q. Why do you say that he was the one who fired? A. Because the gun reports
came from the place where he stood at the gate, sir (77 tsn Jan. 16, 1959).

From the place where Cadawan and Tamani had positioned themselves, they had a good view, through the holes of the
gate, of Mayor Domingo and his group in front of Pua's store (Exh. A). The mayor was engaged in conversation with a
group of persons on the cemented pavement ( pasillo of sidewalk) in the front of the store in Centro at the town's
commercial street. Standing near the wall of the store were Hermoso Alicam, Liberato Tanam, Primitivo Tallog, Martin
Caniero, Toedoro Colobong, Gaspar Ibarra, Francisco Siyang and Gonzalo Siyang. Mayor Domingo was standing in front
of the group, walking and gesticulating as he talked. Jose Siyang was leaning against a post somewhat apart from the
group (Exh. C, 6 tsn March 3, 1959).

Mayor Domingo was recounting his experience in Manila during his suspension. He was standing on the culvert which
bridged the canal separating the pasillo and the street (See Exh. C). As he talked, he gestured and swung his hands up
and down with palms open, facing Pua's store and his audience. Jose Siyang, who was apart from the group of
listeners, was about two to three meters on Mayor Domingo's right, leaning one of the post which supported the roof
shading the pasillo or cemented pavement. Jose Siyang was in line with Mayor Domingo while, in contrast, the group
of listeners was standing side by side close to the galvanized iron wall of the store, facing Mayor Domingo who was
telling stories.

In the meanwhile, Teodoro Tamani and Cadawan were standing on the vacant lot in close proximity to the gate of
galvanized iron sheets where the pasillo ended. Cadawan opened a hole in the gate, about three inches in diameter,
through which Teodoro Tamani inserted the barrel of the carbine. Tamani fired at Mayor Domingo who was the target.
Jose Siyang, a second cousin of Teodoro Tamani, like Vice-Mayor Tamani, "was farther on the right side of Mayor
Domingo along the line of fire" (Exh. A). Appellant Tamani fired two volleys. Mrs. Ibarra and her daughter saw from the
veranda the flashes of fire emitted by the carbine of Teodoro Tamani.<re||an1w> They left the veranda and went
inside the house.

At the moment the first volley of gunshots was fired, which was between seven and seven-thirty, Mayor Domingo had
raised his right hand. The palm of his right hand was hit. Jose Siyang was also hit. Domingo and his listeners dispersed
and sought refuge inside Pua's store. While Domingo ran for cover, a second volley was fired. The volley's came from
behind the iron gate on the vacant lot or "from the southwest end" of the cemented pavement behind the gate. While
inside the store, Mayor Domingo heard the moaning of someone in an agony of pain. That person turned out to be Jose
Siyang who had sustained four gunshot wounds and was hovering between life and death. Siyang died before eleven
o'clock that same night.

Constabulary soldiers and peace officers arrived at the scene of the shooting and conducted an investigation. Mayor
Domingo was taken to the provincial hospital. Doctor Gaffud conducted an autopsy on the body of Jose Siyang in the
municipal building. On the following day empty shells were found by the Constabulary soldiers near the galvanized
iron gate (6 tsn. III Calixto).

Teodoro Tamani and Cadawan left the scene of the shooting. They ran, passing the same route that they had taken in
coming, and went direct to the house of Vice-Mayor Villamor Tamani in Barrio Aniog. Teodoro Tamani stayed overnight
in the house of the vice-mayor. Cadawan, who reported to the vice-mayor that Mayor Domingo was dead, proceeded
to Barrio Clakcab and returned the murder weapon to Matias de la Fuente.
The trial court accepted the foregoing version as the basis of the judgment of conviction. It noted that in 1956 when
NBI Agent Mariano G. Almeda arranged a confrontation between Teodoro Tamani and Mrs. Ibarra, she identified him as
the person whom she saw in her yard in the evening of June 11, 1953. During the confrontation, Tamani trembled,
became pale and remained silent.

Teodoro Tamani sometime after the shooting went into hiding at Cabagan and Santo Tomas, Isabela, where he was
arrested by Mayor Domingo by virtue of a warrant of arrest issued in Criminal Cases Nos. 245 and 246 of the justice of
the peace court of Angadanan (Exh. 3, 4, 5 and 6, 11 tsn March 3, 1959). Appellant went into hiding although his wife
was about to deliver her baby.

As to the motive for shooting Mayor Domingo, Teodoro Tamani explained that Vice-Mayor Villamor Tamani, his second
cousin, ordered the liquidation of the mayor so that he could not assume office and the vice-mayor would become
mayor (Exh. A). Appellant Tamani was chosen to execute that task because he had lost his job as policeman when
Mayor Domingo was reinstated (Exh. A, p. 2).

On the other hand, Mayor Domingo said that when Teodoro Tamani was still a policeman, the mayor had scolded him
for not reporting for work and for working as cook of Vice-Mayor Villamor Tamani and plowing his field. The other
motive was that since Teodoro Tamani is a relative of the vice-mayor, who was a "political enemy" of the mayor, he
(appellant Tamani) could act as a policeman when the vice-mayor became mayor after the elimination of the
incumbent mayor (11 tsn March 3, 1959).

On the credibility of the prosecution eyewitness, Mrs. Ibarra, the trial judge made the following findings:

The Court concentrated attention on the attitude and observed the gestures, features, demeanor and
manner of testifying and the emphasis, gestures and inflection of the voice of prosecution witness
Juana Vitorri de Ibarra during all the time she was on the witness stand in the direct and cross-
examination, and her answers were prompt, concise, responsive to interrogatories, outspoken, and
entirely devoid of evasion or any semblance of shuffling, and her entire testimony was given with
calm, self-possession, an erect front, and unhesitating accent. The Court is convinced of her sincerity
and credibility and the truthfulness of her testimony, in great contrast with defendant's manner of
testifying. (pp. 859-60, Record).

The trial court concluded that the intended victim was Mayor Domingo and not Jose Siyang.

Appellant's version and contentions.In this appeal appellant's counsel de oficio argues that the trial court erred (1)
in disbelieving Tamani's alibi; (2) in assuming that his extrajudicial confession was voluntary; (3) in not giving credence
to the testimony of defense witness Francisco Siyang, that his son, Jose Siyang, was shot by Policemen Gaspar Ibarra
and Melchor Tumaneng; (4) in giving credence to circumstantial evidence, and (5) in the alternative, in not holding
that appellant Tamani committed the complex crime of homicide with lesiones grave.

Appellant Tamani, having abjured his confession, gave the following version of the case by means of his testimony and
the testimony of his other witness, Francisco Siyang(Syang):

Francisco Siyang was the father of Jose Siyang, the town sanitary inspector, who with his wife and four children,
resided with Francisco Siyang at his house in Centro, Angadanan. Francisco Siyang is an uncle of Vice-Mayor Villamor
Tamani. At around six-thirty in the evening of June 11, 1953 Venancio Respicio dropped at the house of Jose Siyang
and invited him for a walk. Francisco Siyang followed his son to the store of Pedro Pua which was around four blocks
from their house.

Francisco Siyang noticed that Jose Siyang was in front of Pua's store with Mayor Domingo, Policemen Alfonso Gomez,
Gaspar Ibarra, Graciano Manguelod and Melchor Tumaneng, teachers Primitivo Tallog, Teodoro Colobong and Martin
Caniero, Mariano Dalodad (a barber) and Juaning Aliangan, a farmer. Jose Siyang was leaning against a post, obliquely
at the right of Mayor Domingo. Francisco Siyang allegedly approached Jose and told him that his wife and children
were waiting for him so that they could take supper. Jose answered "yes, father".

While Francisco Siyang and Jose Siyang were standing side by side in front of Pua's store, Mayor Domingo made a signal
by stretching and raising his hand with open palm and bringing it down. Suddenly, Policeman Ibarra, who was standing
in front of Jose Siyang, fired his carbine at the latter, hitting Jose Siyang in the chest. Policeman Tumaneng followed
by firing with his carbine successive shots at Jose Siyang, hitting the latter in the breast. Tumaneng was on the right
side of Ibarra, obliquely facing Jose Siyang.
After Jose Siyang fell, Francisco Siyang went to his succor and raised him. Jose Siyang told his father: "Father, I am
dying, my children." When Jose Siyang was brought to the municipal building, he was breathing feebly. He could not
talk anymore. He expired in the municipal building. His body was brought home by Francisco Siyang.

In the morning of June 12th, Vice-Mayor Villamor Tamani with some Constabulary soldiers arrived at the house of
Francisco Siyang while the remains of Jose Siyang still lay in state. After the burial of Jose Siyang in the afternoon, a
Constabulary sergeant investigated Francisco Siyang and took him to Ilagan, where he was further investigated. He
gave a sworn statement accusing Ibarra and Tumaneng of having killed Jose Siyang (Exh. 1).

On the basis of that statement, a criminal complaint for the murder of Jose Siyang was filed on June 20, 1953 by
Constabulary Lieutenant Tomas P. Gonzales in the justice of the peace court of Angadanan against Venancio Respicio
and Policemen Ibarra, Tumaneng and Manguelod (Exh. 2, Crim. Case No. 244). The complaint was dismissed on August
12, 1953.

Other complaints for the murder of Jose Siyang and for frustrated murder perpetrated on Mayor Domingo were filed in
the justice of the peace court against Villamor Tamani, Teodoro Tamani, Domingo Cadawan, Rufino de los Santos and
Matias de la Fuente but they were later dismiss (Exh. 3 to 6, Crim. Cases Nos. 245 and 246).

In October, 1956 Mariano G. Almeda of the NBI headed a team of agents that investigated the shooting of Jose Siyang
and Mayor Domingo. Francisco Siyang was investigated orally in Ilagan by Almeda. The investigation was interrupted by
former Congressman Samuel Reyes. It was not finished.

Appellant Tamani, in support of his alibi, testified that Jose Siyang was his second cousin. Tamani was a resident of
Centro in the poblacion of Angadanan. At around three o'clock in the afternoon of June 11, 1953 he was in the house
of Vice-Mayor Villamor Tamani in Barrio Aniog. He wanted a recommendation for a job in the Angadanan Sawmill. The
place known as Centro in the poblacion, where Pedro Pua's store is located, is around two kilometers from Barrio
Aniog. Vice-Mayor Tamani gave to Teodoro Tamani the recommendation between four and five o'clock. The vice-mayor
prevailed upon Teodoro Tamani to stay and they agreed to go to town on the following day.

So, Teodoro Tamani slept in the house of his cousin, the vice-mayor, on the night of June 11th. On the morning of
June 12th, Vice-Mayor Tamani and Teodoro Tamani went together to Centro in the poblacion. When they reached
Centro, they learned of Jose Siyang's death, for which reason they viewed his body in the house of Francisco Siyang.
They arrived at Siyang's house at around eight and eight-thirty in the morning. They learned that Jose Siyang was shot
in front of Pedro Pua's store.

Teodoro Tamani did not go to the Angadanan Sawmill on June 12th. He delivered the letter of recommendation on
June 13th to the manager of the sawmill. He worked in the sawmill as laborer for two weeks only. He resigned due to
the heavy work. He could not remember the name of the manager of the sawmill.

He denied that he shot Jose Siyang and Mayor Domingo. He did not participate in the commission of the crime. He said
that he was in the house of Vice-Mayor Tamani on the night of June 11th.

On October 2, 1956 NBI Agent Almeda picked him up from his house for questioning in connection with the shooting of
Siyang and Mayor Domingo. Almeda was accompanied by Alfonso Salvador, a Constabulary soldier. Tamani was brought
to the municipal building. From there, he was taken to Ilagan. He was brought by Almeda to the provincial jail at
Calamagui, Isabela, where he (Tamani) was delivered to Pedro Tamayo, a prisoner who was acted as mayor of the cell
(brigada). Tamani was formally received by the provincial guard from Almeda at around six and six-thirty in the
evening of October 2nd.

Upon delivering Tamani to Tamayo, Almeda allegedly told Tamayo: "Bahala kayo rian, Tamayo, at ako ang bahala sa iyo".
Twenty minutes later, Pedro Tamayo, Juanito Dassig, Juan Pecano, Ernesto Castaeda and other convicts started
maltreating Tamani. The alleged maltreatment consisted of the following:

First, they ordered Tamani to squat on the cemented floor inside the cell (brigada).

Second, after squatting on the cement floor, they ordered Tamani to stand and then started boxing
him for one hour.
 Third, they removed all his clothings and put Tamani inside a drum where prisoners dropped their
human waste. He was required to stay inside the drum for five minutes, after which they brought him
out and poured on him water to was his body from the human waste.

Fourth, they made Tamani pulverized pepper and they placed the pulverized pepper in his anus,
penis and testicles.

Tamani was maltreated because the tormentors wanted him to admit that he was the one who shot Jose Siyang and
Mayor Domingo. As he could not endure the maltreatment he admitted he had shot Siyang and Domingo. The
maltreatment was stopped after he made the admission.

Around ten to ten-thirty on that same night, Almeda returned to the jail and asked Tamayo: "Does he admit now?"
Tamayo answered in the affirmative. Almeda then took Tamani out of the jail and brought him to the second floor of
Puring's Restaurant. Almeda called for NBI Agent No. 101 who came out of a room with a typewriter. Agent No. 101
placed his typewriter on a table. Almeda told Tamani "Now, I am going to take your statement that you shot Jose
Siyang and Mayor Domingo."

At first Tamani told Almeda that he knew nothing about the shooting because he was in Barrio Aniog when Domingo
and Siyang were shot. Thereupon, Almeda told Tamani not to deny the shooting because Juana Vitorri Vda. de Ibarra
recognized him when he stumbled before the shooting at a place near the fence between the lots of Pedro Pua and
Mrs. Ibarra. Tamani maintained his innocence about the shooting.

Thereafter, Almeda and NBI Agent No. 101 slapped the face of Tamani. They brought him to a toilet. They pushed his
head into the toilet bowl (iniodoro). They held his hair and pushed his face toward the mouth of the toilet bowl for
five minutes. When Tamani could not endure the torture anymore, he told Almeda that he would admit the crime.
Almeda and Agent No. 101 brought Tamani to the table on the second floor of Puring's Restaurant. Almeda told Tamani:
"You better admit now that you shot the two victims, that you took the gun from Matias de la Fuente and that Villamor
Tamani and Rufino de los Santos are the masterminds".

Tamani admitted that version for fear that he would again be maltreated. His affidavit, Exhibit A, was signed at
Puring's Restaurant on the night of October 2, 1956. The contents of Exhibit A "are all the versions of Director
Almeda". Tamani admitted his signature and thumbmarks in Exhibit A. On the following morning of October 3rd,
Almeda and Agent No. 101 brought back Tamani to the jail.

Tamani admits that he signed Exhibit B also, his supplementary confession. However, he insists that he signed it on the
night of October 2nd and not on October 3rd. He said that he never excluded Domingo Cadawan and that he never
incriminated himself as the triggerman. He might have signed Exhibit B in connection with his signing of Exhibit A on
the night of October 2nd because when he signed Exhibit A, there were several sheets of paper which he signed and
thumbmarked. He allegedly did not know the contents of Exhibit B when he affixed his signature thereon. He says that
the incriminatory statements in Exhibits A and B are not true. (See pp. 3-4, 17-28, Appellant's Brief).

The trial court rejected the foregoing version of the defense after noting the improbabilities in Francisco Siyang's
testimony and after concluding that the appellant had not overcome the presumption that his confession was
voluntarily executed.

The shooting incident was undoubtedly another episode in the political rivalry between Mayor Domingo and Vice-
Mayor Tamani. That circumstance has given a political complexion to these two cases. It may explain why the evidence
has become muddled, if not baffling. It was to be expected that, to suit the ulterior motivations of the contending
parties there would be same insidious manipulation of the evidence.

Thus, on June 12th, the day following the shooting and before Jose Siyang was interred, Constabulary soldiers,
accompanied by Vice-Mayor Villamor Tamani, investigated Francisco Siyang (51-52 tsn Aug. 26, 1960). On June 14,
1953, or four days after the shooting and while Mayor Domingo was in the hospital, Francisco Siyang (the uncle of
Villamor Tamani and the star witness for the defense and the father of the victim, Jose Siyang) executed an affidavit
in Ilagan about the shooting. He made it appear in that statement that Patrolmen Ibarra and Tumaneng, two followers
of Mayor Domingo, were the killers of Jose Siyang and that they commenced to shoot Siyang when Mayor Domingo
made a prearranged signal (Exh. 1).

As already noted, on the basis of that affidavit, Constabulary Lieutenant Tomas P. Gonzales filed in the justice of the
peace court of Angadanan a complaint for murder against Policemen Ibarra, Tumaneng and Manguelod and one
Venancio Respicio, an alleged nephew of the mayor (Exh. 2, Crim. Case No. 244). According to Francisco Siyang's
affidavit, Respicio, a compadre of Jose Siyang, acted as decoy in bringing Jose Siyang to the place where he was
assassinated. Domingo repeatedly denied that Respicio was his relative by consanguinity or affinity. Francisco Siyang
made it appear that his son was murdered because he testified against Domingo in the case where the latter was
charged with theft. Because of that theft case Domingo was suspended. That murder complaint (Exh. 2) against the
followers of Mayor Domingo was dismissed.

After the mayor was released from the hospital, he and the chief of police investigated the shooting. The chief of the
police filed a complaint for murder dated July 8, 1953 against Vice-Mayor Tamani, Teodoro Tamani, Rufino de los
Santos, Matias de la Fuente, Arsenio Dayang and Medardo Tamani.<re||an1w> The complaint was amended by
including Domingo Cadawan as a defendant and excluding Dayang and Medardo Tamani (Exh. 3 and 4, Crim. Case No.
245). For the shooting of Mayor Domingo, a complaint for frustrated murder was filed by the chief of police against the
same persons (Exh. 5 and 6, Crim. Case No. 246).

Both complaints were dismissed apparently for lack of evidence. As the shooting was unsolved crime, the intervention
of the NBI became necessary.

On June 4, 1956 Francisco Siyang executed an affidavit in Ilagan before NBI Agent No. 39. He deviated from his 1953
affidavit by naming Melchor Tumaneng alone ("Melchor Tomines") as the assassin of his son, Jose Siyang. He stuck to his
original theory that Mayor Domingo masterminded the assassination of his son (Exh. G).

As already noted, four months later, or on October 2 and 3, 1956, an NBI investigating team headed by Mariano G.
Almeda, a lawyer and an assistant to the NBI Director, secured a confession from appellant Teodoro Tamani that he,
with the assistance of Domingo Cadawan, shot Mayor Domingo and Jose Siyang (Exh. A and B). It may be assumed that
the NBI was asked to handle the case so that political considerations would not color and influence the course and
outcome of the investigation.

Before Tamani executed his confession, Almeda and his agents, assisted by Constabulary soldiers, interviewed several
persons in Angadanan and made an ocular inspection of the scene of the crime. They investigated Mrs. Ibarra and her
daughter. They learned that Teodoro Tamani had entered Mrs. Ibarra's yard and was recognized by her and that,
immediately thereafter, she heard gunshots from the direction where Tamani had posted himself. Thus, Tamani
became a prime suspect. He was apprehended and brought to the house of Mrs. Ibarra for a confrontation. Almeda
testified:

Q. What did you do, if any, when Teodoro Tamani was brought to the house of Juana
Vittori Vda. de Ibarra? A. In the presence of Juana Vittori Vda. de Ibarra and her
daughter I confronted them and asked Juana Vittori Vda. de Ibarra and her daughter
whether they knew Teodoro Tamani and both claimed that he is the very same
fellow who entered the yard that night with a gun and also they heard shots from
the direction of the said accused Teodoro Tamani after which Teodoro Tamani was
trembling and he became pale.

Q. And did Teodoro Tamani say anything when he was pointed out by Juana Vittori
Vda. de Ibarra and her daughter? A. He did not utter anything. He simply became
pale and trembling. (16 tsn June 12, 1958, II Valencia).

Tamani's confession (Exh. A and B) was the basis of the information for murder and frustrated murder against him in
these two cases.

Findings: Appellant Tamani's defense of alibi, which can be fabricated with facility, cannot be given serious
consideration. Assuming that he was in Barrio Aniog in the afternoon and night of June 11th, it was physically possible
for him to be at the scene of the shooting at the time that it was perpetrated and return to the house of Vice-Mayor
Tamani in Barrio Aniog. That place was only two kilometers from the store of Pedro Pua. The victim was shot in front
of the store.

The settled rule is that an alibi, to be tenable, must be such as to preclude the possibility of the presence of the
accused at the scene of the crime or its immediate vicinity at the time of its commission. "The accused must show that
he was at some other place for such period of time that it was impossible for him to have been at the place where the
crime was committed at the time of its commission" (People vs. Lumantas, L-28355, July 17, 1969, 2 SCRA 764, 768).

Appellant's alibi does not satisfy that basic requirement. Moreover, it was not corroborated by Vice-Mayor Tamani or by
any other person. Its concocted character is manifest.
Appellant Tamani argues that he signed his confession, Exhibit A, because he was tortured or maltreated. He claim
that he does not remember having signed his supplementary confession (Exh. B) although he admits the authenticity
of his signature and thumbmark therein.

NBI Agents Almeda and Mendoza testified that Tamani's sworn statements were freely executed. Tamani's testimony on
the alleged maltreatment was not corroborated. As correctly noted by the Solicitor General, certain details in the
confession, which only Tamani could have supplied, are indications of its voluntariness and give it spontaneity and
coherence.

Those details are (a) that Teodoro Tamani and Cadawan conferred with Vice-Mayor Villamor Tamani in the latter's
house at Aniog at three o'clock in the afternoon of the day preceding the shooting; (b) that Matias de la Fuente and
Rufino de los Santos were present at the conference and it was decided to liquidate Mayor Domingo to enable the vice
mayor to act as mayor; (c) that De la Fuente handed to Tamani and Cadawan the carbine to be used in the killing; (d)
that Cadawan and Tamani slept in the vice-mayor's house on the night of June 10, 1953; (e) that Cadawan went to the
poblacion in the morning of June 11th in order to ascertain the whereabouts of Mayor Domingo; (f) that Cadawan
returned in the afternoon and informed Tamani that Domingo was at Pua's store; (g) that Cadawan stumbled in the
yard of Mrs. Ibarra; (h) that after firing the shots, the two returned to the vice-mayor's house; (i) that Teodoro Tamani
slept in the house of the vice-mayor after the assassination; (j) that Jose Siyang was standing on the right side of
Mayor Domingo "along the line of fire"; (k) that Jose Siyang was his second cousin and the second cousin of the vice-
mayor and (l) that the hole in the gate was three inches in diameter.

Those circumstances might not have been known if the confession had been executed under duress. NBI Agents
Almeda and Mendoza could not have manufactured all these details.

There is one significant inconsistency in appellant Tamani's testimony on March 26, 1962 which impairs his credibility.
He claimed that his supplementary confession, Exh. B, was translate to him in Tagalog but that he did not understand
Tagalog on or before October 3, 1956 (117 tsn I Valencia). However, when he testified on January 11, 1962 and he was
asked to repeat what NBI Agent Almeda told in Tagalog to the prisoner, Pedro Tamayo, Tamani was able to repeat
verbatim the word: "Bahala kayo rian Tamayo at ako ang bahala sa iyo" (83 tsn II Calixto). He repeated the same
Tagalog words in the later part of his testimony (86 tsn) and at the hearing on April 5, 1962 (127 tsn I Valencia).

Agent Almeda testified that appellant Tamani understands English, being a former policeman, and that Tamani read
Exhibit B, which is in English and which NBI Agent Mendoza translated to him in Ilocano. Tamani did not deny that he
knows English. His petition to this Court that he be granted bail, which petition bears his signature, is in English.
(See Rollo).

There is no merit in appellant Tamani's contention that the trial court erred in not giving credence to the testimony of
Francisco Siyang (Syang) that Jose Siyang was shot by policemen Ibarra and Tumaneng, the latter being allegedly a
houseboy of Mayor Domingo. The inconsistencies on vital details in Siyang's two affidavits and his testimony signify
that he deliberately perverted the truth. His testimony exhibits the earmarks of untrustworthiness. It was squarely
refuted by Martin Caniero and Teodoro Colobong. It should be underscored that Francisco Siyang is the uncle of the
vice-mayor (58 tsn Aug. 26, 1960).

In his 1953 affidavit (Exh. 1) he declared that Policemen Ibarra and Tumaneng shot his son, Jose Siyang, whereas, in
his 1965 affidavit (Exh. G) he alleged that only Tumaneng (Tomines) shot his son.

Francisco Siyang, a farmer, was already seventy-six years old when he testified in 1960. On direct examination he
testified that his son was shot in the breast by Gaspar Ibarra, who was immediately followed by Melchor Tumaneng.
Tumaneng allegedly hit Jose Siyang in the left part of the breast below the clavicle (48 tsn I Valencia). That was also
Francisco Siyang's declaration in his 1953 affidavit (Exh. 1): that Ibarra fired first.

However, Francisco Siyang on cross-examination testified differently. He declared that Tumaneng fired first and that
the second shot was fired by Ibarra. Francisco Siyang said that he was sure that Tumaneng fired first at his son (89, 92,
93 tsn I Valencia). The following is an example of his confusing testimony:

Q. How many shots did Gaspar Ibarra fire at your son? A. Only one, sir.

Q. Who fired the two first shots, if you know? A. Melchor Tumaneng, sir.

Q. Did you actually see or not the two successive shots at your son? A. I saw him,
sir.
 Q. Who fired the other two shots which according to you your son was hit by five (5)
gunshots A. Gaspar Ibarra, sir.

Q. Do you mean to say that Gaspar Ibarra fired first one shot and then two shots, all
in all three shots? A. Gaspar Ibarra fired only one, sir. (93 tsn I Valencia).

Q. Who was the first who shot your son, according to you? A. Melchor Tumaneng.

Q. Where was Melchor Tumaneng at the moment he shot you? A. He was at the
gate of the fence.

Q. But he was inside with the group of persons at the media de agua of the store of
Pedro Pua. Is it? A. Yes, sir (21 tsn I Calixto).

NBI Agent Almeda, after investigating Francisco Siyang, found his theory incredible. Almeda did not believe that
Francisco Siyang could have seen or identified the assailant who was behind the fence. According to Almeda, Francisco
Siyang merely suspected certain person as the killers of his son. He could not identify positively the killers.

Other grave inconsistencies in Francisco Siyang's affidavits and testimony are discussed in the trial court's decision.

Appellant Tamani further contends that the trial court erred in relying on thirteen circumstances in order to convince
itself that Tamani was the culprit. Among those circumstances are that Tamani went into hiding sometime after the
shooting and that the motive for the attempted murder of Mayor Domingo was to prevent his reinstatement and to
enable the vice-mayor to become permanent mayor and ensure that appellant Tamani would again become a
policemen.

Judge Pedro C. Quinto's painstaking analysis of the evidence and his conscientious scrutiny of the discrepancies in the
testimony and affidavits of Francisco Siyang demonstrate that the guilt of Tamani has been proven beyond reasonable
doubt. A thorough perusal of the record leads to the conclusion that the trial court did not commit the errors imputed
to it by the appellant.

The act of shooting Siyang at a distance, without the least expectation on his part that he would be assaulted, is
murder because of the attendance of the qualifying circumstance of treachery (alevosia). Appellant Tamani
deliberately employed a mode of execution which tended directly and specially to ensure the consummation of the
killing without any risk to himself arising from the defense which the victim could have made (Par. 16, Art. 14, Revised
Penal Code). Siyang, unarmed and without any intimation that the gunshots intended for Mayor Domingo would hit
him, was not in a position to defend himself against the unseen assailant. Treachery may be appreciated even if there
was a mistake as to the victim (People vs. Mabug-at, 51 Phil. 967; People vs. Guillen, 85 Phil. 307).

As to Mayor Domingo, the accused was not able to perform all the acts of execution which would consummate the
killing (Art. 6, Revised Penal Code). The accused was not able to do so, not because of his spontaneous desistance but
because he failed to inflict on the mayor a mortal wound. The mayor was able to avoid the second volley by taking
refuge in the store of Pedro Pua. But there is no doubt that the accused was animated by the intent to kill and that the
shooting was perpetrated in a treacherous manner. Hence, the offense against the mayor is attempted murder (People
vs. Kalalo, 59 Phil. 715).

The alternative contention of appellant Tamani that should be convicted of the complex crime of homicide
with lesiones graves is not well-taken. As already pointed out, the killing of Siyang cannot be characterized as
homicide. It was qualified by treachery. There was intent to kill in the shooting of the mayor. So, the wound inflicted
on him cannot be regarded as a mere physical injury. It was overt act manifesting the willful design of the accused to
liquidate the mayor.

The infliction of the four fatal gunshot wounds on Siyang and of the wound in the palm of the mayor's right hand was
not the result of a single act.<re||an1w> The injuries were the consequences of two volley of gunshots. Hence,
the assaults on Siyang and the mayor cannot be categorized as a complex crime.

To convict the accused of the complex crime of murder with attempted murder would result in the imposition of the
death penalty. That eventuality would be worse for him.
There being no mitigating nor aggravating circumstances, the penalty of reclusion perpetua should be imposed on the
appellant for the killing of Siyang. (Arts. 64 [1] and 248, Revised Penal Code). The use of the term "life imprisonment"
is not proper (People vs. Mobe, 81 Phil. 58).

WHEREFORE, the appeal is dismissed with costs against the appellant. So ordered.

Zaldivar, Fernando and Fernandez, JJ., concur.1wph1.t

Barredo, J., took no part.

Separate Opinions

ANTONIO, J., concurring.:

In the dismissal of the appeal on the ground that the judgment of the laws must become final after the lapse of the
period for perfecting an appeal. (Sec. 7, Rule 120.)

Separate Opinions

ANTONIO, J., concurring.:

In the dismissal of the appeal on the ground that the judgment of the laws must become final after the lapse of the
period for perfecting an appeal. (Sec. 7, Rule 120.)
G.R. No. L-47745 April 15, 1988

JOSE S. AMADORA, LORETA A. AMADORA, JOSE A. AMADORA JR., NORMA A. YLAYA PANTALEON A. AMADORA, JOSE A.
AMADORA III, LUCY A. AMADORA, ROSALINDA A. AMADORA, PERFECTO A. AMADORA, SERREC A. AMADORA, VICENTE A.
AMADORA and MARIA TISCALINA A. AMADORA, petitioners
vs.
HONORABLE COURT OF APPEALS, COLEGIO DE SAN JOSE-RECOLETOS, VICTOR LLUCH SERGIO P. DLMASO JR., CELESTINO
DICON, ANIANO ABELLANA, PABLITO DAFFON thru his parents and natural guardians, MR. and MRS. NICANOR GUMBAN,
and ROLANDO VALENCIA, thru his guardian, A. FRANCISCO ALONSO, respondents.

Jose S. Amadora & Associates for petitioners.

Padilla Law Office for respondents.

CRUZ, J.:

Like any prospective graduate, Alfredo Amadora was looking forward to the commencement exercises where he would
ascend the stage and in the presence of his relatives and friends receive his high school diploma. These ceremonies were
scheduled on April 16, 1972. As it turned out, though, fate would intervene and deny him that awaited experience. On April
13, 1972, while they were in the auditorium of their school, the Colegio de San Jose-Recoletos, a classmate, Pablito Damon,
fired a gun that mortally hit Alfredo, ending all his expectations and his life as well. The victim was only seventeen years
old. 1

Daffon was convicted of homicide thru reckless imprudence . 2 Additionally, the herein petitioners, as the victim's parents,
filed a civil action for damages under Article 2180 of the Civil Code against the Colegio de San Jose-Recoletos, its rector the
high school principal, the dean of boys, and the physics teacher, together with Daffon and two other students, through their
respective parents. The complaint against the students was later dropped. After trial, the Court of First Instance of Cebu
held the remaining defendants liable to the plaintiffs in the sum of P294,984.00, representing death compensation, loss of
earning capacity, costs of litigation, funeral expenses, moral damages, exemplary damages, and attorney's fees . 3 On
appeal to the respondent court, however, the decision was reversed and all the defendants were completely absolved . 4

In its decision, which is now the subject of this petition for certiorari under Rule 45 of the Rules of Court, the respondent
court found that Article 2180 was not applicable as the Colegio de San Jose-Recoletos was not a school of arts and trades
but an academic institution of learning. It also held that the students were not in the custody of the school at the time of
the incident as the semester had already ended, that there was no clear identification of the fatal gun and that in any
event the defendant, had exercised the necessary diligence in preventing the injury. 5

The basic undisputed facts are that Alfredo Amadora went to the San Jose-Recoletos on April 13, 1972, and while in its
auditorium was shot to death by Pablito Daffon, a classmate. On the implications and consequences of these facts, the
parties sharply disagree.

The petitioners contend that their son was in the school to show his physics experiment as a prerequisite to his graduation;
hence, he was then under the custody of the private respondents. The private respondents submit that Alfredo Amadora
had gone to the school only for the purpose of submitting his physics report and that he was no longer in their custody
because the semester had already ended.

There is also the question of the identity of the gun used which the petitioners consider important because of an earlier
incident which they claim underscores the negligence of the school and at least one of the private respondents. It is not
denied by the respondents that on April 7, 1972, Sergio Damaso, Jr., the dean of boys, confiscated from Jose Gumban an
unlicensed pistol but later returned it to him without making a report to the principal or taking any further action . 6 As
Gumban was one of the companions of Daffon when the latter fired the gun that killed Alfredo, the petitioners contend that
this was the same pistol that had been confiscated from Gumban and that their son would not have been killed if it had not
been returned by Damaso. The respondents say, however, that there is no proof that the gun was the same firearm that
killed Alfredo.

Resolution of all these disagreements will depend on the interpretation of Article 2180 which, as it happens, is invoked by
both parties in support of their conflicting positions. The pertinent part of this article reads as follows:
 Lastly, teachers or heads of establishments of arts and trades shall be liable for damages caused by their
pupils and students or apprentices so long as they remain in their custody.

Three cases have so far been decided by the Court in connection with the above-quoted provision, to wit: Exconde v.
Capuno 7 Mercado v. Court of Appeals, 8 and Palisoc v. Brillantes. 9 These will be briefly reviewed in this opinion for a better
resolution of the case at bar.

In the Exconde Case, Dante Capuno, a student of the Balintawak Elementary School and a Boy Scout, attended a Rizal Day
parade on instructions of the city school supervisor. After the parade, the boy boarded a jeep, took over its wheel and
drove it so recklessly that it turned turtle, resulting in the death of two of its passengers. Dante was found guilty of double
homicide with reckless imprudence. In the separate civil action flied against them, his father was held solidarily liable with
him in damages under Article 1903 (now Article 2180) of the Civil Code for the tort committed by the 15-year old boy.

This decision, which was penned by Justice Bautista Angelo on June 29,1957, exculpated the school in an obiter dictum (as
it was not a party to the case) on the ground that it was riot a school of arts and trades. Justice J.B.L. Reyes, with whom
Justices Sabino Padilla and Alex Reyes concurred, dissented, arguing that it was the school authorities who should be held
liable Liability under this rule, he said, was imposed on (1) teachers in general; and (2) heads of schools of arts and trades
in particular. The modifying clause "of establishments of arts and trades" should apply only to "heads" and not "teachers."

Exconde was reiterated in the Mercado Case, and with an elaboration. A student cut a classmate with a razor blade during
recess time at the Lourdes Catholic School in Quezon City, and the parents of the victim sued the culprits parents for
damages. Through Justice Labrador, the Court declared in another obiter (as the school itself had also not been sued that
the school was not liable because it was not an establishment of arts and trades. Moreover, the custody requirement had
not been proved as this "contemplates a situation where the student lives and boards with the teacher, such that the
control, direction and influences on the pupil supersede those of the parents." Justice J.B.L. Reyes did not take part but
the other members of the court concurred in this decision promulgated on May 30, 1960.

In Palisoc vs. Brillantes, decided on October 4, 1971, a 16-year old student was killed by a classmate with fist blows in the
laboratory of the Manila Technical Institute. Although the wrongdoer who was already of age was not boarding in the
school, the head thereof and the teacher in charge were held solidarily liable with him. The Court declared through Justice
Teehankee:

The phrase used in the cited article "so long as (the students) remain in their custody" means the
protective and supervisory custody that the school and its heads and teachers exercise over the pupils and
students for as long as they are at attendance in the school, including recess time. There is nothing in the
law that requires that for such liability to attach, the pupil or student who commits the tortious act must
live and board in the school, as erroneously held by the lower court, and the dicta in Mercado (as well as
in Exconde) on which it relied, must now be deemed to have been set aside by the present decision.

This decision was concurred in by five other members, 10 including Justice J.B.L. Reyes, who stressed, in answer to the
dissenting opinion, that even students already of age were covered by the provision since they were equally in the custody
of the school and subject to its discipline. Dissenting with three others, 11 Justice Makalintal was for retaining the custody
interpretation in Mercado and submitted that the rule should apply only to torts committed by students not yet of age as
the school would be acting only in loco parentis.

In a footnote, Justice Teehankee said he agreed with Justice Reyes' dissent in the Exconde Case but added that "since the
school involved at bar is a non-academic school, the question as to the applicability of the cited codal provision to
academic institutions will have to await another case wherein it may properly be raised."

This is the case.

Unlike in Exconde and Mercado, the Colegio de San Jose-Recoletos has been directly impleaded and is sought to be held
liable under Article 2180; and unlike in Palisoc, it is not a school of arts and trades but an academic institution of learning.
The parties herein have also directly raised the question of whether or not Article 2180 covers even establishments which
are technically not schools of arts and trades, and, if so, when the offending student is supposed to be "in its custody."

After an exhaustive examination of the problem, the Court has come to the conclusion that the provision in question should
apply to all schools, academic as well as non-academic. Where the school is academic rather than technical or vocational in
nature, responsibility for the tort committed by the student will attach to the teacher in charge of such student, following
the first part of the provision. This is the general rule. In the case of establishments of arts and trades, it is the head
thereof, and only he, who shall be held liable as an exception to the general rule. In other words, teachers in general shall
be liable for the acts of their students except where the school is technical in nature, in which case it is the head thereof
who shall be answerable. Following the canon ofreddendo singula singulis "teachers" should apply to the words "pupils and
students" and "heads of establishments of arts and trades" to the word "apprentices."

The Court thus conforms to the dissenting opinion expressed by Justice J.B.L. Reyes in Exconde where he said in part:

I can see no sound reason for limiting Art. 1903 of the Old Civil Code to teachers of arts and trades and
not to academic ones. What substantial difference is there between them insofar as concerns the proper
supervision and vice over their pupils? It cannot be seriously contended that an academic teacher is
exempt from the duty of watching that his pupils do not commit a tort to the detriment of third Persons,
so long as they are in a position to exercise authority and Supervision over the pupil. In my opinion, in the
phrase "teachers or heads of establishments of arts and trades" used in Art. 1903 of the old Civil Code, the
words "arts and trades" does not qualify "teachers" but only "heads of establishments." The phrase is only
an updated version of the equivalent terms "preceptores y artesanos" used in the Italian and French Civil
Codes.

If, as conceded by all commentators, the basis of the presumption of negligence of Art. 1903 in
someculpa in vigilando that the parents, teachers, etc. are supposed to have incurred in the exercise of
their authority, it would seem clear that where the parent places the child under the effective authority
of the teacher, the latter, and not the parent, should be the one answerable for the torts committed
while under his custody, for the very reason/that the parent is not supposed to interfere with the
discipline of the school nor with the authority and supervision of the teacher while the child is under
instruction. And if there is no authority, there can be no responsibility.

There is really no substantial distinction between the academic and the non-academic schools insofar as torts committed by
their students are concerned. The same vigilance is expected from the teacher over the students under his control and
supervision, whatever the nature of the school where he is teaching. The suggestion in the Exconde and Mercado Cases is
that the provision would make the teacher or even the head of the school of arts and trades liable for an injury caused by
any student in its custody but if that same tort were committed in an academic school, no liability would attach to the
teacher or the school head. All other circumstances being the same, the teacher or the head of the academic school would
be absolved whereas the teacher and the head of the non-academic school would be held liable, and simply because the
latter is a school of arts and trades.

The Court cannot see why different degrees of vigilance should be exercised by the school authorities on the basis only of
the nature of their respective schools. There does not seem to be any plausible reason for relaxing that vigilance simply
because the school is academic in nature and for increasing such vigilance where the school is non-academic. Notably, the
injury subject of liability is caused by the student and not by the school itself nor is it a result of the operations of the
school or its equipment. The injury contemplated may be caused by any student regardless of the school where he is
registered. The teacher certainly should not be able to excuse himself by simply showing that he is teaching in an academic
school where, on the other hand, the head would be held liable if the school were non-academic.

These questions, though, may be asked: If the teacher of the academic school is to be held answerable for the torts
committed by his students, why is it the head of the school only who is held liable where the injury is caused in a school of
arts and trades? And in the case of the academic or non- technical school, why not apply the rule also to the head thereof
instead of imposing the liability only on the teacher?

The reason for the disparity can be traced to the fact that historically the head of the school of arts and trades exercised a
closer tutelage over his pupils than the head of the academic school. The old schools of arts and trades were engaged in the
training of artisans apprenticed to their master who personally and directly instructed them on the technique and secrets
of their craft. The head of the school of arts and trades was such a master and so was personally involved in the task of
teaching his students, who usually even boarded with him and so came under his constant control, supervision and
influence. By contrast, the head of the academic school was not as involved with his students and exercised only
administrative duties over the teachers who were the persons directly dealing with the students. The head of the academic
school had then (as now) only a vicarious relationship with the students. Consequently, while he could not be directly
faulted for the acts of the students, the head of the school of arts and trades, because of his closer ties with them, could
be so blamed.

It is conceded that the distinction no longer obtains at present in view of the expansion of the schools of arts and trades,
the consequent increase in their enrollment, and the corresponding diminution of the direct and personal contract of their
heads with the students. Article 2180, however, remains unchanged. In its present state, the provision must be interpreted
by the Court according to its clear and original mandate until the legislature, taking into account the charges in the
situation subject to be regulated, sees fit to enact the necessary amendment.
The other matter to be resolved is the duration of the responsibility of the teacher or the head of the school of arts and
trades over the students. Is such responsibility co-extensive with the period when the student is actually undergoing studies
during the school term, as contended by the respondents and impliedly admitted by the petitioners themselves?

From a reading of the provision under examination, it is clear that while the custody requirement, to repeatPalisoc v.
Brillantes, does not mean that the student must be boarding with the school authorities, it does signify that the student
should be within the control and under the influence of the school authorities at the time of the occurrence of the injury.
This does not necessarily mean that such, custody be co-terminous with the semester, beginning with the start of classes
and ending upon the close thereof, and excluding the time before or after such period, such as the period of registration,
and in the case of graduating students, the period before the commencement exercises. In the view of the Court, the
student is in the custody of the school authorities as long as he is under the control and influence of the school and within
its premises, whether the semester has not yet begun or has already ended.

It is too tenuous to argue that the student comes under the discipline of the school only upon the start of classes
notwithstanding that before that day he has already registered and thus placed himself under its rules. Neither should such
discipline be deemed ended upon the last day of classes notwithstanding that there may still be certain requisites to be
satisfied for completion of the course, such as submission of reports, term papers, clearances and the like. During such
periods, the student is still subject to the disciplinary authority of the school and cannot consider himself released
altogether from observance of its rules.

As long as it can be shown that the student is in the school premises in pursuance of a legitimate student objective, in the
exercise of a legitimate student right, and even in the enjoyment of a legitimate student right, and even in the enjoyment
of a legitimate student privilege, the responsibility of the school authorities over the student continues. Indeed, even if the
student should be doing nothing more than relaxing in the campus in the company of his classmates and friends and
enjoying the ambience and atmosphere of the school, he is still within the custody and subject to the discipline of the
school authorities under the provisions of Article 2180.

During all these occasions, it is obviously the teacher-in-charge who must answer for his students' torts, in practically the
same way that the parents are responsible for the child when he is in their custody. The teacher-in-charge is the one
designated by the dean, principal, or other administrative superior to exercise supervision over the pupils in the specific
classes or sections to which they are assigned. It is not necessary that at the time of the injury, the teacher be physically
present and in a position to prevent it. Custody does not connote immediate and actual physical control but refers more to
the influence exerted on the child and the discipline instilled in him as a result of such influence. Thus, for the injuries
caused by the student, the teacher and not the parent shag be held responsible if the tort was committed within the
premises of the school at any time when its authority could be validly exercised over him.

In any event, it should be noted that the liability imposed by this article is supposed to fall directly on the teacher or the
head of the school of arts and trades and not on the school itself. If at all, the school, whatever its nature, may be held to
answer for the acts of its teachers or even of the head thereof under the general principle ofrespondeat superior, but then
it may exculpate itself from liability by proof that it had exercised the diligence of abonus paterfamilias.

Such defense is, of course, also available to the teacher or the head of the school of arts and trades directly held to answer
for the tort committed by the student. As long as the defendant can show that he had taken the necessary precautions to
prevent the injury complained of, he can exonerate himself from the liability imposed by Article 2180, which also states
that:

The responsibility treated of in this article shall cease when the Persons herein mentioned prove that they
observed all the diligence of a good father of a family to prevent damages.

In this connection, it should be observed that the teacher will be held liable not only when he is acting in loco parentis for
the law does not require that the offending student be of minority age. Unlike the parent, who wig be liable only if his
child is still a minor, the teacher is held answerable by the law for the act of the student under him regardless of the
student's age. Thus, in the Palisoc Case, liability attached to the teacher and the head of the technical school although the
wrongdoer was already of age. In this sense, Article 2180 treats the parent more favorably than the teacher.

The Court is not unmindful of the apprehensions expressed by Justice Makalintal in his dissenting opinion in Palisoc that the
school may be unduly exposed to liability under this article in view of the increasing activism among the students that is
likely to cause violence and resulting injuries in the school premises. That is a valid fear, to be sure. Nevertheless, it should
be repeated that, under the present ruling, it is not the school that will be held directly liable. Moreover, the defense of
due diligence is available to it in case it is sought to be held answerable as principal for the acts or omission of its head or
the teacher in its employ.
The school can show that it exercised proper measures in selecting the head or its teachers and the appropriate supervision
over them in the custody and instruction of the pupils pursuant to its rules and regulations for the maintenance of discipline
among them. In almost all cases now, in fact, these measures are effected through the assistance of an adequate security
force to help the teacher physically enforce those rules upon the students. Ms should bolster the claim of the school that it
has taken adequate steps to prevent any injury that may be committed by its students.

A fortiori, the teacher himself may invoke this defense as it would otherwise be unfair to hold him directly answerable for
the damage caused by his students as long as they are in the school premises and presumably under his influence. In this
respect, the Court is disposed not to expect from the teacher the same measure of responsibility imposed on the parent for
their influence over the child is not equal in degree. Obviously, the parent can expect more obedience from the child
because the latter's dependence on him is greater than on the teacher. It need not be stressed that such dependence
includes the child's support and sustenance whereas submission to the teacher's influence, besides being coterminous with
the period of custody is usually enforced only because of the students' desire to pass the course. The parent can instill more
las discipline on the child than the teacher and so should be held to a greater accountability than the teacher for the tort
committed by the child.

And if it is also considered that under the article in question, the teacher or the head of the school of arts and trades is
responsible for the damage caused by the student or apprentice even if he is already of age and therefore less tractable
than the minor then there should all the more be justification to require from the school authorities less accountability
as long as they can prove reasonable diligence in preventing the injury. After all, if the parent himself is no longer liable for
the student's acts because he has reached majority age and so is no longer under the former's control, there is then all the
more reason for leniency in assessing the teacher's responsibility for the acts of the student.

Applying the foregoing considerations, the Court has arrived at the following conclusions:

1. At the time Alfredo Amadora was fatally shot, he was still in the custody of the authorities of Colegio de San Jose-
Recoletos notwithstanding that the fourth year classes had formally ended. It was immaterial if he was in the school
auditorium to finish his physics experiment or merely to submit his physics report for what is important is that he was there
for a legitimate purpose. As previously observed, even the mere savoring of the company of his friends in the premises of
the school is a legitimate purpose that would have also brought him in the custody of the school authorities.

2. The rector, the high school principal and the dean of boys cannot be held liable because none of them was the teacher-
in-charge as previously defined. Each of them was exercising only a general authority over the student body and not the
direct control and influence exerted by the teacher placed in charge of particular classes or sections and thus immediately
involved in its discipline. The evidence of the parties does not disclose who the teacher-in-charge of the offending student
was. The mere fact that Alfredo Amadora had gone to school that day in connection with his physics report did not
necessarily make the physics teacher, respondent Celestino Dicon, the teacher-in-charge of Alfredo's killer.

3. At any rate, assuming that he was the teacher-in-charge, there is no showing that Dicon was negligent in enforcing
discipline upon Daffon or that he had waived observance of the rules and regulations of the school or condoned their non-
observance. His absence when the tragedy happened cannot be considered against him because he was not supposed or
required to report to school on that day. And while it is true that the offending student was still in the custody of the
teacher-in-charge even if the latter was physically absent when the tort was committed, it has not been established that it
was caused by his laxness in enforcing discipline upon the student. On the contrary, the private respondents have proved
that they had exercised due diligence, through the enforcement of the school regulations, in maintaining that discipline.

4. In the absence of a teacher-in-charge, it is probably the dean of boys who should be held liable especially in view of the
unrefuted evidence that he had earlier confiscated an unlicensed gun from one of the students and returned the same later
to him without taking disciplinary action or reporting the matter to higher authorities. While this was clearly negligence on
his part, for which he deserves sanctions from the school, it does not necessarily link him to the shooting of Amador as it
has not been shown that he confiscated and returned pistol was the gun that killed the petitioners' son.

5. Finally, as previously observed, the Colegio de San Jose-Recoletos cannot be held directly liable under the article
because only the teacher or the head of the school of arts and trades is made responsible for the damage caused by the
student or apprentice. Neither can it be held to answer for the tort committed by any of the other private respondents for
none of them has been found to have been charged with the custody of the offending student or has been remiss in the
discharge of his duties in connection with such custody.

In sum, the Court finds under the facts as disclosed by the record and in the light of the principles herein announced that
none of the respondents is liable for the injury inflicted by Pablito Damon on Alfredo Amadora that resulted in the latter's
death at the auditorium of the Colegio de San Jose-Recoletos on April 13, 1972. While we deeply sympathize with the
petitioners over the loss of their son under the tragic circumstances here related, we nevertheless are unable to extend
them the material relief they seek, as a balm to their grief, under the law they have invoked.

WHEREFORE, the petition is DENIED, without any pronouncement as to costs. It is so ordered.

Yap, Narvasa, Paras, Feliciano, Gancayco, Bidin, Sarmiento, Cortes and Grio-Aquino, JJ., concur.

Fernan, Padilla and Teehankee, C.J., JJ, took no part.

Separate Opinions

MELENCIO-HERRERA, J., concurring and dissenting:

I concur, except with respect to the restricted meaning given the term "teacher" in Article 2180 of the Civil Code as
"teacher-in-charge." This would limit liability to occasions where there are classes under the immediate charge of a teacher,
which does not seem to be the intendment of the law.

As I understand it, the philosophy of the law is that whoever stands in loco parentis will have the same duties and
obligations as parents whenever in such a standing. Those persons are mandatorily held liable for the tortious acts of pupils
and students so long as the latter remain in their custody, meaning their protective and supervisory custody.

Thus Article 349 of the Civil Code enumerates the persons who stand in loco parentis and thereby exercise substitute
parental authority:

Art. 349 The following persons shall exercise substitute parental authority:

xxx xxx xxx

2) Teachers and professors

xxx xxx xxx

4) Directors of trade establishments, with regard to apprentices;'

Article 352 of the Civil Code further provides:

Art. 362. The relations between teacher and pupil, professor and student, are fixed by government
regulations and those of each school or institution....

But even such rules and regulations as may be fixed can not contravene the concept of substitute parental authority.

The rationale of liability of school heads and teachers for the tortious acts of their pupils was explained in Palisoc vs.
Brillantes (41 SCRA 548), thus:

The protective custody of the school heads and teachers is mandatorily substituted for that of the
parents, and hence, it becomes their obligation as well as that of the school itself to provide proper
supervision of the students' activities during the whole time that they are at attendance in the
school,including recess time, as well as to take the necessary precautions to protect the students in their
custody from dangers and hazards that would reasonably be anticipated, including injuries that some
students themselves may inflict wilfully or through negligence on their fellow students. (Emphasis
supplied)

Of course, as provided for in the same Article 2180, the responsibility treated of shall cease when the persons mentioned
prove that they observed all the diligence of a good father of a family to prevent damage.
And while a school is, admittedly, not directly liable since Article 2180 speaks only of teachers and schools heads, yet, by
virtue of the same provision, the school, as their employer, may be held liable for the failure of its teachers or school heads
to perform their mandatory legal duties as substitute parents (Sangco, Philippine Law on Torts & Damages, 1978 ed., p.
201). Again, the school may exculpate itself from liability by proving that it had exercised the diligence of a good father of
the family.

Art. 2180. x x x

Employers shall be liable for the damages caused by their employees and household helpers acting within
the scope of their assigned tasks, even though the former are not engaged in any business or industry.

xxx xxx xxx

Parenthetically, from the enumeration in Article 349 of the Civil Code, supra, it is apparent that the Code Commission had
already segregated the classification of "teachers and professors" vis-a-vis their pupils, from "directors of trade
establishments, with regard to their apprentices."

GUTIERREZ, JR., J., concurring:

I concur in the Court's opinion so carefully analyzed and crafted by Justice Isagani A. Cruz. However, I would like to stress
the need for a major amendment to, if not a complete scrapping of, Article 2180 of the Civil Code insofar as it refers to
teachers or heads of establishments of arts and trades in relation to pupils and students or apprentices. The seventh
paragraph of Art. 2180 is a relic of the past and contemplates a situation long gone and out of date. In a Palisoc v.
Brillantes (41 SCRA 548) situation, it is bound to result in mischief and injustice.

First, we no longer have masters and apprentices toiling in schools of arts and trades. Students in "technological" colleges
and universities are no different from students in liberal arts or professional schools. Apprentices now work in regular shops
and factories and their relationship to the employer is covered by laws governing the employment relationship and not by
laws governing the teacherstudent relationship.

Second, except for kindergarten, elementary, and perhaps early high school students, teachers are often no longer objects
of veneration who are given the respect due to substitute parents. Many students in their late teens or early adult years
view some teachers as part of a bourgeois or reactionary group whose advice on behaviour, deportment, and other non-
academic matters is not only resented but actively rejected. It ,seems most unfair to hold teachers liable on a
presumption juris tantum of negligence for acts of students even under circumstances where strictly speaking there could
be no in loco parentis relationship. Why do teachers have to prove the contrary of negligence to be freed from solidary
liability for the acts f bomb-throwing or pistol packing students who would just as soon hurt them as they would other
members of the so-called-establishment.

The ordinary rules on quasi-delicta should apply to teachers and schools of whatever nature insofar as grown up students
are concerned. The provision of Art. 2180 of the Civil Code involved in this case has outlived its purpose. The Court cannot
make law. It can only apply the law with its imperfections. However, the Court can suggest that such a law should be
amended or repealed.

Separate Opinions

MELENCIO-HERRERA, J., concurring and dissenting:

I concur, except with respect to the restricted meaning given the term "teacher" in Article 2180 of the Civil Code as
"teacher-in-charge." This would limit liability to occasions where there are classes under the immediate charge of a teacher,
which does not seem to be the intendment of the law.

As I understand it, the philosophy of the law is that whoever stands in loco parentis will have the same duties and
obligations as parents whenever in such a standing. Those persons are mandatorily held liable for the tortious acts of pupils
and students so long as the latter remain in their custody, meaning their protective and supervisory custody.
Thus Article 349 of the Civil Code enumerates the persons who stand in loco parentis and thereby exercise substitute
parental authority:

Art. 349 The following persons shall exercise substitute parental authority:

xxx xxx xxx

2) Teachers and professors

xxx xxx xxx

4) Directors of trade establishments, with regard to apprentices;'

Article 352 of the Civil Code further provides:

Art. 362. The relations between teacher and pupil, professor and student, are fixed by government
regulations and those of each school or institution....

But even such rules and regulations as may be fixed can not contravene the concept of substitute parental authority.

The rationale of liability of school heads and teachers for the tortious acts of their pupils was explained in Palisoc vs.
Brillantes (41 SCRA 548), thus:

The protective custody of the school heads and teachers is mandatorily substituted for that of the
parents, and hence, it becomes their obligation as well as that of the school itself to provide proper
supervision of the students' activities during the whole time that they are at attendance in the
school,including recess time, as well as to take the necessary precautions to protect the students in their
custody from dangers and hazards that would reasonably be anticipated, including injuries that some
students themselves may inflict wilfully or through negligence on their fellow students. (Emphasis
supplied)

Of course, as provided for in the same Article 2180, the responsibility treated of shall cease when the persons mentioned
prove that they observed all the diligence of a good father of a family to prevent damage.

And while a school is, admittedly, not directly liable since Article 2180 speaks only of teachers and schools heads, yet, by
virtue of the same provision, the school, as their employer, may be held liable for the failure of its teachers or school heads
to perform their mandatory legal duties as substitute parents (Sangco, Philippine Law on Torts & Damages, 1978 ed., p.
201). Again, the school may exculpate itself from liability by proving that it had exercised the diligence of a good father of
the family.

Art. 2180. x x x

Employers shall be liable for the damages caused by their employees and household helpers acting within
the scope of their assigned tasks, even though the former are not engaged in any business or industry.

xxx xxx xxx

Parenthetically, from the enumeration in Article 349 of the Civil Code, supra, it is apparent that the Code Commission had
already segregated the classification of "teachers and professors" vis-a-vis their pupils, from "directors of trade
establishments, with regard to their apprentices."

GUTIERREZ, JR., J., concurring:

I concur in the Court's opinion so carefully analyzed and crafted by Justice Isagani A. Cruz. However, I would like to stress
the need for a major amendment to, if not a complete scrapping of, Article 2180 of the Civil Code insofar as it refers to
teachers or heads of establishments of arts and trades in relation to pupils and students or apprentices. The seventh
paragraph of Art. 2180 is a relic of the past and contemplates a situation long gone and out of date. In a Palisoc v.
Brillantes (41 SCRA 548) situation, it is bound to result in mischief and injustice.
First, we no longer have masters and apprentices toiling in schools of arts and trades. Students in "technological" colleges
and universities are no different from students in liberal arts or professional schools. Apprentices now work in regular shops
and factories and their relationship to the employer is covered by laws governing the employment relationship and not by
laws governing the teacherstudent relationship.

Second, except for kindergarten, elementary, and perhaps early high school students, teachers are often no longer objects
of veneration who are given the respect due to substitute parents. Many students in their late teens or early adult years
view some teachers as part of a bourgeois or reactionary group whose advice on behaviour, deportment, and other non-
academic matters is not only resented but actively rejected. It ,seems most unfair to hold teachers liable on a
presumption juris tantum of negligence for acts of students even under circumstances where strictly speaking there could
be no in loco parentis relationship. Why do teachers have to prove the contrary of negligence to be freed from solidary
liability for the acts f bomb-throwing or pistol packing students who would just as soon hurt them as they would other
members of the so-called-establishment.

The ordinary rules on quasi-delicta should apply to teachers and schools of whatever nature insofar as grown up students
are concerned. The provision of Art. 2180 of the Civil Code involved in this case has outlived its purpose. The Court cannot
make law. It can only apply the law with its imperfections. However, the Court can suggest that such a law should be
amended or repealed.
G.R. No. L-4465 July 12, 1951

CHINESE FLOUR IMPORTERS ASSOCIATION, MANILA, PHILIPPINES, petitioner-appellee,

vs.
PRICE STABILIZATION BOARD (PRISCO), respondent-appellants.
MANUEL RUSTIA, ERNESTO Y. SIBAL and other members of the Philippine Flour Institute, Inc.intervenors-appellants.

Government Corporate Counsel Pompeyo Diaz and Second Assistant Corporate Counsel Hilarion U. Jarencio for respondents
and appellants.
Claro M. Recto, Manuel O. Chan Vicente Formoso, Jr., Tan and Nuguid for appellee.

BAUTISTA, J.:

This is an appeal interposed by respondents as well as intervenors from a decision of the Court of First Instance of Manila
ordering the Price Stabilization Corporation (PRISCO) to grant flour quota allocations to the members of the petitioner
association and other qualified importers pursuant to the provision of sections 12 and 14 of Republic Act No. 426 on the
basis of their quota allocations for the years 1948 and 1949, and dismissing the complaint of the intervenors.

On September 5, 1950, the Chinese Flour Importers Association, Manila Philippines, filed in the Court of First Instance of
Manila a petition for mandamus to compel the Philippine Relief and Trade Rehabilitation Administration (PRATRA) and the
Philippine Wheat Flour Board to issue in favor of petitioner's members the import quota allocations of wheat flour to which
they claim to be entitled under sections 12 and 14 of Republic Act No. 426, known as Import Control Law, with a prayer that
a writ of preliminary injunction be issued to restrain that a writ of preliminary injunction be issued to restrain the PRATRA
and the Wheat Flour Board from granting flour allocations and imports licenses therefor to new importers in excess of the
latter's shares in the portion reserved for new importers by the provision of Republic Act No. 246. After hearing, the writ
was granted. In the meantime, Manuel S. Rustia, Ernesto Y. Sibal, and other allowed to intervene. The parties having agreed
to submit the case on the pleadings and on their respective memoranda, because it involves only a question of law, the trial
court rendered judgment as stated in the early part of this decision. From this judgment respondent and intervenors
appealed. On November 16, 1950, petitioner filed motion for a writ of execution pending appeal from the judgment of the
trial court. The motion was granted over the objection of the respondent were allowed to file a superseades bond. The case
is now before us purely on question of law.

The background of this case is as follows: On March 23, 1949, the Republic of the Philippines signed the International Wheat
Agreement together with the governments of forty-one (41) other countries, which was entered into for the purpose of
assuring supplies of wheat to importing countries and markets of wheat to exporting countries at equitable and stable
prices (Part 1, article 1). The agreement fixes the quantities of wheat representing the guaranteed sales of an exporting
country to the importing countries and the guaranteed purchases of an importing country from the exporting countries, and
specifies the prices for such sales and purchases (arts. III and VI). The guaranteed purchases of the Philippines as an
importing country, is 196,000 metric tons, of wheat every crop year during the period of the agreement which expires on
July 31, 1953, (Annex A to art. III). The Agreement also provides that the exporting and importing countries shall be free to
fulfill their guaranteed quantities through private channels or otherwise (art. III).

By a resolution approved on February 17, 1950, the Senate of the Philippines concurred in the Agreement by the President
"with the understanding that nothing contained in this Agreement shall be construed as in any way curtailing or abridging
the right, authority and discretion of the Philippine Government to distribute and allocate among the private importers the
Philippines the guaranteed purchases of the Philippine Government." This Agreement respect to the Philippines on February
27, 1950.

On March 17, 1950, the President issued Executive Order No. 305 regulating the importation of wheat flour into the
Philippines by way of implementation of the International Wheat Agreement and authorizing the PRATRA to control its
importation and distribution. The Order provides that from March 17, 1950, no flour should be imported into the Philippines
without any import license duly issued by the PRATRA which shall be signed by its General Manager by authority of the
President . It also provides that the 196,000 metric tons, of wheat which the Philippine Government has guaranteed to
purchase yearly under the International Wheat Agreement, shall be imported in the name of the Republic of the Philippines
and that the said quantity of wheat shall in turn be allocated to local consumers, dealers and/or importers of flour who
may be authorized by the General Manager of the PRATRA pursuant to the rules and regulations to be promulgated by the
Philippine Wheat Flour Board created in said order. On the same date, the Philippine Flour Board issued circular No. 1,
containing the required rules and regulations, and since said date, the PRATRA began allocating the importation of wheat
flour into the Philippines under the Agreement of Executive Order No. 305. On May 19, 1950, Republic Act No. 426 was
approved. This Act provides for the allocation of import commodities to old and new importers, and lays down the pattern
to be followed with respect to the amount of quota allocations. It provides that 70 per cent, 60 percent and 50 per cent of
the total import quota for the fiscal years 1950-51, 1951-52, and 1952-53 respectively shall be allocated to old importers
(section 14). It designates the Import Control Commissioner as the various importers, with the exception of wheat flour for
the allocation of which the PRATRA was given exclusive power and authority.
On October 3. 1950, Executive Order No. 35O was issued by the President creating the Price Stabilization Corporation,
known as PRISCO, and dissolving the PRATRA effective as of that date. In view thereof, the PRISCO was substituted for
PRATRA as party in this case. Appellee is an association of fifty-nine (59) licensed Chinese importers of flour which was
organized under the laws of the Philippines and was registered in the Securities and Exchange Commission. Its members
individually imported wheat flour in 1946, 1947 and 1948, and as such are old importers within the meaning of section I of
Republic Act-No. 426, They are duly licensed to do business in the Philippines and have individually filed with the PRATRA
the prescribed applications for wheat flour import quota allocations and for licenses to import their quota into the
Philippines. They made representations and demands upon the PRATRA and the Philippine Wheat Flour Board in order that
they may be given import quota allocations of wheat flour in the amount which should correspond to them in accordance
with section 14 of Republic Act No. 426, but their demands were disregarded and their representation ignored. They made
the same representations and demand upon the Prisco, but with the same result. Considering this attitude of the PRATRA to
be discriminatory, unfair and oppressive, appellee filed the present action.

Stripped of unnecessary verbiage, the basic issue involved in this case may be boiled down as follows: Shall the PRATRA,
now PRISCO, make the allocation of import quota on wheat flour in accordance with the provisions of Republic Act No. 426,
as claimed by the appellee, or shall it make such allocation in accordance with sections 1 and 2 of Executive Order No. 305
in conjunction with section 15 of Republic Act No. 426, as claimed by the appellants?

Let us discuss both theories.

Appellant's theory is "that the importation and allocation of wheat flour must be governed by sections 1 and 2 of Executive
Order No. 305, in conjunction with the section 15 of Republic Act No. 426." They allege that the allocation of wheat flour is
not subject to the provisions of Republic Act No. 426; that wheat flour being considered as class by itself, Republic Act No.
426 does not apply to this particular commodity; and that in so far as wheat flour is concerned, the PRATRA, now PRISCO,
has the exclusive power to use its discretion in the allocation of wheat flour, which discretion is not subject to judicial
control.

On the other hand, it is appellee's theory (1) that being old importers of wheat flour, appellee's members are entitled as
matter of right to quota allocations in the amount which should be determined in accordance with section 14 of Republic
Act No. 426; (2) that as the agency designated by section 15 of said Act and charged with the function of determining and
regulating the allocation of wheat flour among importers, it is the duty of the of the PRATRA, now PRISCO, to allocate this
commodity in accordance with section 14; (3)that in denying neglecting, and refusing to give import quota allocations to
appellee's members in the amount indicated in section 14, the PRATRA, now PRISCO, has unlawfully neglected the
performance of an act which is especially enjoined upon it by section 14, and as thereby excluded appellee's members from
the use and enjoyment of their rightful shares in the wheat flour quota under section 14; and (4) that appellee's remedy
is mandamus.

The theory of appellants "that the importation and allocation of wheat flour must be governed by sections 1 and 2 of
executive Order No. 305, in conjunction with section 15 of Republic Act No. 426", is mainly based upon the provisions of
section 15 and appendix "C" of Republic Act No. 426. It is therefore important to examine and analyze these provisions.

Section 15 of said Act provides:

Any existing law, executive or regulation to the contrary notwithstanding, no Government, office, agency, or
instrumentality, except the Import Control Commissioner, shall allocate the import quota among the various
importers: Provided, That the Philippine Rehabilitation and Trade Rehabilitation Administration shall have exclusive
power and authority to determine and regulate the allocation of wheat flour, among importers.

Quota allocations of any importer for any particular article including wheat flour, shall not be transferable.

It shall be illegal to cede, transfer, sell, rent lease, or donate, his or its import quota allocation or license either
directly or indirectly by the use of any simulation, strategy or scheme under the provision of this Act, and any
violation thereof shall be punishable with the forfeiture by the Commissioner of the import quota or license of the
erring party without prejudice to his subjection to the penal provision of this Act.

Appendix "C" likewise provides in part:

(Controlled Non-essential Imports)

Flour, all kinds, except wheat flour.

It is contended that, under the above quoted provisions, wheat flour has been removed from the scope and operation of
Republic Act No. 426 and placed under Executive Order No. 305 and the rules and regulations promulgated thereunder by
the Wheat Flour Board because, while on one hand, section 15 of said Act declares that no government office, agency or
instrumentality, except the Import Control Commissioner, shall allocate the import quota among the various imports, on the
other hand, the same section declares in its proviso that PRATRA shall have exclusive power and authority to determine and
regulate the allocation of wheat flour among importers, and while Appendix "C' of Republic Act No. 426 contains a list of all
controlled non essential imports, however in the group of flour of all kinds listed therein wheat flour is excepted or
excluded therefrom. The said proviso and exclusion, appellant claim, confirm their view that wheat flour has been
excluded from the operation of Republic Act No. 426.

This argument is met by appellee in this wise: In arguing that because wheat flour is excluded in Appendix "C" this
commodity is deemed removed from the scope and operation of Republic Act No. 426, appellants have completely
misunderstood the purpose of the appendices. These appendices were made part of the Act merely to establish a range of
percentage reductions on items listed therein which shall guide the Import Control Board in fixing the import route of said
items in accordance with section 7 where express reference is made to the appendices. If wheat flour was expected from
Appendix "C", it is because the amount of wheat flour which may be imported into the Philippine and its price are already
fixed and determined in the International Wheat Agreement. There is, therefore, no need for fixing the import quota of
wheat flour.

We agree with this line of reasoning of counsel for the appellee. The only purpose of the appendices is to itemize the
commodities which are deemed controlled, the import quota of which need to be fixed by the Import Control Board in
accordance with section 7 of the law for the purpose of allocating them to the importers. They do not necessarily indicate
that those excluded therefrom are not subject to the operation of said Act, because they also come under the provisions of
section 9 which have reference to the items of import not enumerated in the appendices. In this connection, we also
notice, as pointed out by counsel for the appellee, that, aside from wheat flour, there are other commodities that are
excepted from Appendix "C", among which may be mentioned: Oats and infant foods, umbrella fabrics, salmon and sardines,
corned beef, hams and shoulders, master records, yarn and threads, industrial starch and table cutlery. Other articles are
similarly excepted in appendix "D". Certainly, appellants can not seriously contend that these articles are not within the
purview of Republic Act No. 426 by the mere fact that, like wheat flour, they are excepted in appendices "C" and "D". To our
mind, their importation is governed by section 9 we have already adverted to, which has reference to items of import not
enumerated in the appendices. This section provides that no such items of import shall be allowed an import license and
exchange cover in excess of its excess of its import value (C.I.F.) for the year 1948, except agricultural machineries,
equipment and other machinery, and materials and equipment for dollar-producing and dollar-saving industries, which
means that as regards those articles not mentioned in the appendices they can also be imported by those who had imported
them in 1948, subject only to the limitation that the import quota shall not exceed their import value in 1948, and to the
reservation in favor of new importers provided for in section 14 of Republic Act No. 426.

As regards appellants' contention that the second part of section 15, which is preceded by the word "provided" operates as
an exception to exclude wheat flour from the provisions of the Act, we likewise find more tenable the line of reasoning of
the appellee on the matter. Said proviso, in our opinion, can only refer to the clause immediately preceding it in section 15
and can have no other meaning than that the function of allocating the wheat flour instead of being assigned to the Import
Control Commissioner was assigned to the PRATRA which heretofore has been charged with said duty by Executive Order No.
305. It simply means that the authority to determine and grant flour quota allocations was taken from the Import Control
Commissioner and given to the PRATRA, now PRISCO, which must have been done presumably because of the practice and
experience heretofore enjoyed by said office in so far as the allocation of wheat flour import quota is concerned under the
provisions of Executive Order No. 305, which was issued to implement and carry out the objective of the International
Wheat Flour Agreement. If the intention of the law is to exempt said wheat flour from the provisions of Republic Act No.
426, the proper place of said proviso would be in section 22, which contains the repealing clause, and not in section 15.
Indeed, if the intention of the law is to except Executive Order No. 305 from the operation of Act No. 426, that exception
would have been clearly stated in said section 22.

The proviso is to be construed with reference to the immediately preceding parts of the clause, to which it is
attached. Lewis' Sutherland, Statutory Construction, sections 352, 420; Friedlman vs. Sullivan, 48 Ark. 213, 2 S. W.
785; United States vs. Babbit, 1 Black 55, 17 L. Ed. 94; McRae vs. Holcomb, 46 Ark. (306), 310; Towson vs. Denson,
74 Ark. 302, 306, 86 S. W. 661. (Hackney vs. Southwest Hotels, 195 S. W. 2d. 55, 58.)

The term "provided", is frequently regarded as used, not as qualifying the operation of the statue, but as
conjunctive to an independent paragraph. Provisos have therefore frequently been held to bring in new matter
rather than to limit or explain that which has gone before. (50 Am. Jur., sec. 436.)

The natural and appropriate office of a proviso is to modify the operation of that part of the statue immediately
preceding the proviso, or to restrain or qualify the generality of the language that it follows. Indeed, the
presumption is that a proviso in a statue refers only to the provision to which it is attached, and, immediately
preceding clause or provision. (50 Am. Jur., sec. 438.)

The operation of a proviso is usually and properly confined to the clause or distinct portion of the enactment
which immediately precedes it, and does not extend to or qualify other sections, unless the legislative intent that
it shall so operate is clearly disclosed; and, a fortiori, a proviso contained in an amendatory statue will not be
extended to the original act. (50 Am. Jur., sec. 640.)
 Since the proviso in sec. 7205 applies only to that section, and not to sec. 7204, it follows that there is no
limitation of liability as to the value of property entrusted by the guest to the hotel keeper under sec. 7204. (59 C.
J. 1090).

To bolster up the contention that the proviso of section 15 of Act No. 426 has the effect of excluding the importation of
wheat flour from the operation of said Act, counsel for appellants lay stress in the phraseology used by the law in that,
while the first part provides that the Import Control Commissioner shall allocate the import quota the proviso prescribes
that the PRATRA shall have power and authority to determine and regulate the allocation. In other words, the first part
uses the word "allocate" with respect to Import Control Commissioner, whereas the proviso employs the phrase "to
determine and regulate the allocation" which, it is contended, is broader in scope and confers absolute discretion upon the
PRATRA to make the allocation without following the pattern set in section 14 of the same Act.

The claim is based upon a misconception of the true import of the terms used in the law. The reason why the first part of
section 15 merely employs the word allocate when referring to Import Control Commissioner is because the fixing of quota
is a function that the law gives to the Import Control Board (section 3) in accordance with the schedule and pattern set in
section 7 and 14 of Republic Act No. 426, so that once the quotas are fixed, the allocation thereof becomes the concern of
the Import Control Commissioner. The Import Control Board is the policy-determining body that fixes and allocates the
import quota, whereas the Import Control Commissioner is the executive officer charged with the execution of the policy
and directives of the Board. Upon the other hand, the proviso gives to the PRATRA exclusive power and authority to
determine and regulate the allocation because the intention is to give to that office the power and authority not only to
allocate the quota but also to pass on the financial capacity and other requisite qualifications of the importers to whom the
quota should be allocated. This is a function which the PRATRA has been exercising before the approval of Republic Act No.
426 in the light of the rules and regulations adopted by the Import Flour Board under the provisions of Executive Order No.
305, and the PRATRA has the machinery for determining and passing upon the fitness and financial qualifications of the
importers, and that machinery is the one contemplated in that proviso. But in allocating the import quota of the importers
once they have been screened and determined, it is our opinion that the PRATRA should follow the pattern set in section 14
of Republic Act No. 426.

We wish to take note of the inference drawn by appellants from the use of the phrase "including wheat flour" in the second
paragraph of section 25 which prohibits the transfer of quota allocations of any importer for any particular article pointing
out that by the use of that phrase, the legislator meant to exclude wheat flour from the other provisions of the Act,
specially the provisions of sections 12 and 14 relative to the quota allocations. The argument is specious, for it fails to
recognize that the intention of Congress, in inserting said phrase is precisely to dispel the doubt that may be engendered by
the proviso of the first paragraph of section 15. The preceding paragraph excluded wheat flour from among the imported
commodities which the Import Control Commissioner is called upon to allocate, and the insertion becomes necessary to
avoid any inference that wheat flour is also excepted from the second paragraph of the section. The insertion was made
just to leave no doubt that wheat flour comes within the purview of Republic Act No. 426.

Appellants may inquire, what are the provisions of Executive Order No. 305 which are the inconsistent with Republic Act
No. 426? The answer is simple. There are several that may be mentioned, the most important of which are: on the matter
of allocation, the Executive Order provides that wheat flour shall be allocated to local consumers, dealers and/or importers
(sec. 2), whereas Act No. 426 provides that the wheat flour shall be allocated only among importers within the meaning of
said Act (sec. 15). While the Executive Orders does not classify who are qualified importers, nor give any pattern for the
allocation of quota, the Act divides the importers into old and new importers, prescribes their qualifications (sections 1 and
14), and establishes the basis to be followed in determining the amount of quota allocations which may be given to them
(sections 9, 12, 13 and 14). The Executive Order creates a Board which is authorized to issue rules and regulations to be
followed by the PRATRA in the allocation of wheat flour (section 3), whereas the Act provides that the determination and
regulation of wheat flour among importers is a function that is exclusively given to the PRATRA, which as a consequence it
may exercise without necessarily being bound by such rules and regulations (section 13). Needless to say that, as far as the
issue involved in this case is concerned, where the provisions of Executive Order are inconsistent with or repugnant to the
provisions of the Act, the mandate of the Act must prevail and must be followed. In this connection, we note that section 5
of the Rules and regulations adopted by the Wheat Flour Board to implement the provisions of Executive Order No. 305,
provides that 20 percent of wheat flour to be imported may be reserved for direct importation by the PRATRA for
stabilization purposes, and the 80 per cent shall be distributed first to direct consumers who are financially able and who
by themselves have been regularly importing their flour requirements, then to qualified Filipino importers, and finally to
other importers. Because these provisions are repugnant to the pattern set for the allocation of quota in section 14 of
Republic Act No. 426, they must be deemed to have been impliedly repealed by section 22 of the same Act. It follows that
PRATRA can only make the allocation of wheat flour now by observing the pattern set in said section 14.

We are urged to interpret the provisions of Act No. 426 in a way that may exclude wheat flour from its operation in order to
allow PRATRA to carry out its policy of placing the importation of wheat flour exclusively in the hands of Filipino importers
in line with the policy of our Government to encourage and foster the spirit of nationalism among our people in business,
commerce and industry in the Philippines. We have informed, and have taken notice of the claim, that the PRATRA recently
in line with the above mentioned policy of nationalism has determined to allocate the import quota of wheat flour
exclusively among the new importers, to the complete exclusion of the old importers, under the claim that it has absolute
discretion to do so subject only to the restrictions that may be imposed by the Chief Executive.
We are not obvious of this policy of our Government which is indeed very plausible and should be encouraged to give a
break to our countrymen so that they may have greater share in our local trade, business and commerce in line with the
spirit of nationalism underlying our Constitution, but plausible and patriotic though it may be, such policy should, however,
be adopted gradually so as not to cause injustice and discrimination to alien firms or businessmen of long standing in the
Philippines and who have been long engaged in the particular trade thereby contributing with their money and efforts to
the economic development of our country. In fact, this is the policy that our Congress has set in an unmistakable manner in
Republic Act No. 426. This is also the policy that our President has expressed in the letter he sent to the PRATRA relative to
determination of the import quota allocations of wheat flour.1 When the PRATRA decided to ignore entirely the rights of the
old importers, simply because they are aliens, in complete disregard of this policy of our Government, these importers have
the right to recur to the sanctuary of justice for redress, for they too are entitled to certain rights under our Constitution.

Aliens within the state of their residence enjoy certain rights and privileges like those enjoyed by its citizens, such
as free access to the courts and the equal protection of the laws. Nor may aliens be deprived of life, liberty, or
property without due process of law. Citizens may, of course, be preferred to non-citizen without violating
constitutional guaranties. They are excluded from the enjoyment of political rights, such as the right to vote and
to hold public office. Other restrictions may be imposed for reasons of public policy and in the exercise of the
police power. (Padilla's Civil Code, pp. 95-96).

It is claimed that wheat flour as a commodity is a class by itself because it has been the subject of an International Wheat
Agreement and as such should be excepted from the provisions of Republic Act No. 426. What is their special in wheat flour
which should make it a class by itself? This commodity is an import, as are other import items, and the International Wheat
Agreement is merely a trade agreement the objectives of which are to assure supplies of wheat to importing countries and
markets for wheat to exporting countries at equitable and stable prices. The Agreement merely regulates the outflow and
inflow of flour between and among the countries signatories thereto. But the agreement does not interfere with the
internal laws of the signatory countries regarding imports and exports, and as a matter of fact it provides in Article II that
"Nothing in this Agreement shall be construed to exempt any private trader from any laws or regulations to which he is
otherwise subject", and in the resolution approved by the Senate on February 17, 1950, the Senate concurred in its
acceptance by the President "with the understanding that nothing contained in this Agreement shall be construed as in any
way curtailing or abridging the right, authority and discretion of the Philippine Government to distribute and allocate
among the private importers in the Philippines the guaranteed purchase of the Philippine Government."

Wheat flour is, therefore, like any other commodity whose importation should be regulated, and as such should be included
within the Purview of Act No. 426. A perusal of this act will show that it is all-comprehensive and covers the whole field of
imports. It is the general and basic law on imports intended to replace and substitute all prior laws, executive orders, and
rules and regulations on the same subject. Section 22 which provides that "Any Act or executive order, rules or regulations
whose provisions are contrary to, or in contravention with any provision of this Act are hereby repealed", clearly reveals the
intent of Congress to establish a uniform system of rules on imports and to nullify the heretofore existing laws, executive
orders, and rules and regulations which may be inconsistent with the Act. No reason is perceived, therefore, why wheat
flour shall be regarded as a class by itself and should be excluded from its operation simply because it has been the subject
of an international agreement.

To the foregoing consideration we may add that to interpret Republic Act No. 426 as excluding wheat flour from its
operation, as contended by appellants, would be tantamount to an undue delegation of powers to the PRATRA and would
render the Act unconstitutional and void. As a general rule, the functions of legislation may not be delegated by the
legislative to the executive department or to any executive or administrative officer, board, or commission, except as such
delegation may be expressly authorized by a constitutional provision. And a statute that vests an arbitrary discretion in
administrative officers with respect to an ordinary lawful business, profession or appliance, or fails to prescribe a uniform
rule of action or to lay down a guide or standard whereby the exercise of discretion may be measured, is void and
unconstitutional. We are not prepared to adopt such interpretation.

As the general rule is stated in Corpus Juris, which statement has been cited and quoted with the approval, the
functions of legislation may not be delegated by the legislative to the executive department or to any executive or
administrative officer, board, or commission except as such delegation may be expressly authorized by a
constitutional provision, and the constitution affords the measure of the powers which may be granted to purely
administrative boards or officers. Hence, where executive officers or bodies are charged with the administration
of statutes, the legislature must ordinarily prescribe a policy, standard, or rule for their guidance and must not
vest them with an arbitrary or uncontrolled discretion with regard thereof or as to the matters or persons to which
the statutes shall be applied. So the legislature cannot vest in executive officers or bodies an uncontrolled power
to vary, change or suspend a statute unless the constitution so provides. (16 C. J. S. pp. 348-349.)

The practical question which arises in this problem is the determination of what is a proper and reasonable
discretion and what is an invalid arbitrary discretion. The general accepted rule as to this question is to the effect
that a statute or ordinance vests an arbitrary discretion in administrative officers with respect to an ordinarily
lawful business, profession, or appliance, if it fails to prescribe a uniform rule of action or fails to lay down a guide
or standard whereby the exercise of discretion may be measured. Any law which authorizes the issuing or
withholding of licenses, permits or approvals or sanctions other administrative functions in such a manner as the
 designated officials arbitrarily choose, without reference to all the class to which the law under consideration was
intended to apply and without being controlled or guided by any definite rule or specified conditions to which all
similarly situated may conform, is unconstitutional and void. (11 Am. Jur., p. 947.)

Our attention has been invited to resolution No. 43, approved by the Senate of the Philippines after this case has been
decided by the lower court, in which it is reiterated that the intent and policy of the Senate in inserting in the law
the proviso under consideration is to afford Filipino business enterprises more substantial participation in the vital wheat
flour import trade. Indeed, in that resolution, it is intimated that the proviso of section 15 of Act No. 426 came into being
as an amendment of the Senate with the considered object of utilizing the PRATRA as the sole arbiter in fixing wheat flour
allocations in consonance with the national policy to advance the field of Filipino participation in the business enterprises
in the Philippines. But it is to be written into the law, and the resolution has been concurred in by the House, and as such it
does not have any binding effect in the determination of this case. The resolution does not have the effect of law. The
same cannot serve this Court from its constitutional duty to interpret the law in accordance with well-known rules of
statutory construction.

While a court may not inquire into the intent of a legislator, it is bound to ascertain the legislative intent from
what was done by the legislature as an entity. (People vs. Marxhauson, 171 N. W. p. 537.)

A legislative construction placed on a prior statute is without binding force in a judicial proceeding and court is
free to place its own construction on the prior statute. In re Cauldwell's Estate, 36 N. Y. Swd 48, 178 Misc. 916. (4O
Fifth Dec. Digest, p. 1527.)

A legislative declaration of opinion as to meaning of earlier statute, without a positive legislative act, is not
binding on the court in the construction of the earlier statute, since statutory construction is a "judicial" not a
"legislative function". State ex Washington-Oregon I vs. Co. Dobson, 130 P 2d 939, 169, Or. 546. (40 Fifth Dec.
Digest, p. 1528.).

. . . under the general rule that a legislative resolution does not have force or effect as a law, a legislative
resolution as to the proper construction of a statute is not binding on the courts. Boyer-Campbell Co. vs.Fry, 271
Mich. 221, 260 N. W. 165, 98 ALR. 827 (50 Am. Jur. p. 331.)

The other point stressed by the appellants is that mandamus does not lie in this case because the power vested in the
PRISCO to determine and regulate the allocation of wheat flour among importers requires exercise of discretion. They claim
that it is elementary that mandamus will not lie compel the performance of a discretionary duty, and in issuing the writ,
the trial court in effect has ordered the PRISCO not merely to act, but to act in a particular manner, to wit: to give wheat
flour allocations to Chinese importers. The contention presupposes that the power and authority vested in the PRISCO to
determine and regulate the allocation of wheat flour among importers is to be governed exclusively by the provisions of
Executive Order No. 305. Under this theory, the claim is indeed well taken, for there is no doubt that the aforesaid order
gives to the PRISCO wide range of discretion to allocate the import quota of wheat flour to the importers. But the
assumption runs counter to our theory that, while the PRISCO is given the power and authority to determine and regulate
the allocation of wheat flour, the allocation shall be made in accordance with the pattern set in section 14 of Republic Act
No. 426. Such being the case, the guaranteed purchases of wheat flour must be allocated among old and new importers in
accordance with the mandatory provisions of section 14. And being old importers of wheat flour, the members of the
appellee are entitled as a matter of rights to quota allocations of this commodity, hence their remedy is mandamus.

The claim that appellee has a plain, speedy and adequate remedy in the ordinary course of law, other than the special civil
action for mandamus, by a direct appeal to the President of the Philippines, would be tenable if Executive Order No. 90,
creating the PRATRA, now PRISCO, contain a provision requiring such appeal before action could be taken in court against
the PRATRA in connection with the performance of its functions. But no such appeal is therein provided, and the PRATRA,
now PRISCO, being an agency created by the President, it is presumed that its actions bear his official approval. Such
appeal, therefore, is deemed unnecessary. Neither can the acts of the PRATRA be considered as acts of the President even if
the import licenses to be issued by the PRATRA are to be signed by authority of the President, because the PRATRA is a mere
agency or instrumentality of the executive branch of the Government whose functions can be looked into by the Courts
without infringing the principle of the separation of powers. .

In addition to the various federal boards and officers considered supra this section, mandamus may lie, in a proper
case, to compel action by other federal boards or officers. Thus it has been held that a collector of customs may
be compelled by mandamus to perform purely ministerial duties; (55 C. J. S. p. 202).

Mandamus lies to compel the interstate commerce commission to perform a purely legal duty, in the performance
of which no act of judgment is involved; also to proceed and decide a case according to its judgment and
discretion, where it refuses to proceed at all on the ground that it is without jurisdiction and where in fact the law
requires it to do so. (55 C. J. S. p. 202).
 Mandamus lies to compel the commissioner of patent to perform ministerial duties; and it is proper remedy where
he acts beyond his authority and without warrant of law. (55 C. J. S. p. 201).

The remaining question to be determined refers to the claim that the Chinese Flour Importers Association is not the real
party in interest in this case and, therefore, the petition should be dismissed. It is true that the petition has been filed in
the name of the association, but it is likewise true that the association has filed the petition in behalf of its members who
are all old importers and are entitled to import quota allocations under the law. This association dealt with the PRATRA
directly, and vice versa, in so far as the subject matter of litigation is concerned, and it is this association that filed the
bond for the issuance of the writ of preliminary injunction prayed for in the petition. In Gallego et al. vs. Kapisanan
Timbulan ng mga Manggagawa,* 46 Off. Gaz., 4245, it was held that a labor organization has legal personality to file a
complaint in representation of its members. By analogy, the appellee has legal personality to represent its members in this
case. This case can also be considered as suit under section 12, Rule 3 of the Rules of Court.

Wherefore, the decision appealed from is affirmed, with costs against the appellants. The writ of preliminary injunction
issued by the lower court is hereby made final.

Paras, C. J., Bengzon, Padilla, Tuason, Montemayor, and Jugo, JJ., concur.

PARAS, C.J.:

Mr. Justice Feria voted with the majority.

G.R. No. L-11554 May 27, 1959
SEVERINO DAGDAG, JR., petitioner,
vs.
HON. DELFIN FLORES, ETC., ET AL., respondents.
Gervasio A. Sipin for petitioner.
Rafael Ruiz and Graciano Regala for respondents.
PARAS, C.J.:
This is a petition for certiorari and prohibition seeking to
annul the auction sale of the certificate of public
convenience of Virginia Sembrano in favor of the Estate
of Florencio P. Buan, conducted by the Deputy Sheriff of
Ilocos Norte on November 18, 1957, pursuant to a third
alias writ of execution issued by the judge of the Court
of First Instance of the same province, all made
respondents herein, and to prevent the approval of the
sale by the respondents Public Service Commission.
In a compromise agreement conditionally approved by
the Court of First Instance of Ilocos Norte in Civil Case
No. 1377, Alfredo Formoso and Virginia R. Sembrano
transferred to Isabel, Miguela and Maximo, all surnamed
Quirit, all their rights and interest in Public Convenience
covered by Certificate No. 69144. On March 23, 1953, all
the said Quirits executed in favor of above petitioner a
Deed of Sale of the rights over the said certificate of
public convenience. On June 27 1956, the Deputy
Provincial Sheriff of the same court, in accordance with a
second alias writ of execution issued by the said court in
Civil Case No. 1734, levied on the lines covered by the
aforesaid certificate. Petitioner immediately filed a
"Third Party Claim" with the said sheriff as a consequence
of which the movant for the second alias writ of
execution was required to file a bond of P1,000 so as not
to stay execution. On August 4, 1956, petitioner filed
with same court, against the said deputy sheriff, a
complaint for damages with preliminary injunction,
which was subsequently dismissed for lack of cause of
action. On appeal to this Court, the order of dismissal
was affirmed. Upon the issuance of a third alias writ of
execution (in the said Civil Case No. 1734), the lines
were conditionally sold at public auction. Thus the
present petition with this Court.
Petitioner insists that he is a party in interest and is
entitled to all his prayers, because there exists a "speed
of Sale of Rights" by which the Quirits had transferred
and sold to him their rights and interests in the said
lines; that the order of the respondent sheriff fixing the
bond in the amount of P2,000 to be filed by the plaintiffs
in Civil Case No. 1734 is null and void.
The primary consideration in the resolution of the case at
bar is the determination of the petitioner's right to
institute the case. Petitioner premises his action on the
Deed of Transfer executed in his favor by the Quirits. By
virtue thereof, he claims that he has acquired ownership
of the certificate in question.
We are brought therefore to the question did the said
Deed of Transfer ever become effective as to yield the
desired consequences? The deed in question recited the
Transfer of the Quirits' rights over the said certificate
which were to have been acquired for the Sembranos by
virtue of a compromise settlement, the validity and
effectivity of which was in turn conditioned on its
approval by the court before which the case involving the
said compromise settlement was pending. The court's
approval was further subject to a prior approval of the
transfer by the Public Service Commission. The said
compromise settlement conditionally approved by the
said court did not therefore become effective, the
conditions imposed for its approval not having been
fulfilled. There was no approval by the Public Service
Commission. Our Civil Code provides:
Article 1181. In conditional obligations, the
acquisition of rights, as well as the
extinguishment or loss of those already
acquired, shall depend upon the happening of
the event which constitutes the condition.
Inasmuch as petitioner's grantors or transferors acquired
no rights over the said certificate, nothing passed unto
the former. A grantee cannot acquire better rights than
what his grantor had.
We have pointed out that the transfer without the
approval and consent of the Public Service Commission,
of a property covered by a franchise is not binding
against said Commission and against third persons, and
that the original grantee continues to be responsible
under the franchise. (See case of Montoya vs. Ignacio, 94
Phil., 182; 50 Off. Gaz. [1], 108; Flores vs.
Miranda, supra, p. 266; 57 Off. Gaz. [44], 7938).
In view of the foregoing the present petition is dismissed,
with costs against petitioner. So ordered.
Bengzon, Padilla, Montemayor, Reyes, A., Bautista
Angelo, Labrador and Endencia, JJ., concur.
Concepcion, J., concurs in the result.
 Republic of the Philippines
SUPREME COURT
Manila

EN BANC

G.R. No. L-1206 October 30, 1947

THE MANILA ELECTRIC COMPANY, petitioner,

vs.
THE PUBLIC UTILITIES EMPLOYEES' ASSOCIATION, respondent.

Ross, Selph, Carrascoso and Janda for petitioner.

Ferdinand E. Marcos for respondent.
Eulogio R. Lerum as amicus curriae.

FERIA, J.:

This is an appeal by certiorari under Rule 44 of the Rules of Court interposed by the petitioner Manila Electric Company
against the decision of July 15, 1946 of the Court of Industrial Relations, which reads as follows:

Although the practice of the company, according to the manifestations of counsel for said company, has been to
grant one day vacationwith pay to every workingman who had worked for seven consecutivedays including
Sundays, the Court considers justified the oppositionpresented by the workingmen to the effect that they need
Sundays andholidays for the observance of their religion and for rest. The Court,therefore, orders the respondent
company to pay 50 per cent increasefor overtime work done on ordinary days and 50 per cent increase for work
done during Sundays and legal holidays irrespective of the numberof days they work during the week.

The appellant contends that the said decision of the Court of IndustrialRelations is against the provision of section 4,
Commonwealth Act No. 444, which reads as follows:

No person, firm, or corporation, business establishment or place or center of labor shall compel an employee or
laborer to work during Sundays and legal holidays, unless he is paid an additionalsum of at least twenty-five per
centum of his regular remuneration: Provided, however, Thast this prohibition shall not apply to publicutilities
performing some public service such as supplying gas,electricity, power, water, or providing means of
transportationor communication.

After a careful consideration of the issue involved in this appeal, we are of the opinion and so hold that the decision of the
Court of Industrial Relations is erroneous od contrary to the clear and express provision of the above quoted provisions. The
power of theCourt to settle industrial disputes between capital and labor, which include the fixing of wages of employees or
laborers, granted by the general provisions of section 1 of Commonwealth Act No. 103, has beenrestricted by the above
quoted special provisions of Commonwealth ActNo. 444, in the sense that public utilities supplying electricity,gas, power,
water, or providing means of transportation or communication may compel their employees or laborers to work
duringSundays and legal holidays without paying them an additional compensation of not less than 25 per cent of their
regular remuneration on said days.

Since the provisions of the above quoted section 4, are plain and unambiguous and convey a clear and definite meaning,
there is no need of resorting to the rules of statutory interpretation orconstruction in order to determine the intention of
the Legislature.Said section 1 consists of two parts: the first, which is the enactmentclause, prohibits a person, firm or
corporation, business establishment,or place or center of labor from compelling an employee or laborer towork during
Sundays and legal holidays, unless the former pays thelatter an additional sum of at least twenty five per centum of his
regular remuneration; and the second part, which is an exception,exempts public utilities performing some public service,
such assupplying gas, electricity, power, water or providing means oftransportation or communication, from the prohibition
establishedin the enactment clause. As the appellant is a public utility that supplies the electricity and provides means of
transportation to the public, it is evident that the appellant is exempt from the qualifiedprohibition established in the
enactment clause, and may compel its employees or laborers to work during Sundays and legal holidays without paying
them said extra compensation.
To hold that the exception or second part of section 4, CommonwealthAct No. 444, only exempts public utilities mentioned
therein from the prohibition to compel employees or laborers to work during Sundaysand legal holidays, but not from the
obligation to pay them an extraor additional compensation for compelling them to work during thosedays, is to make the
exception meaningless or a superfluity, thatis, an exception to a general rule that does not exist, because theprohibition in
the enactment clause is not an absolute prohibitionto compel a laborer or employee to work during Sundays and legal
holidays. The prohibition to compel a laborer or employee to workduring those days is qualified by the clause "unless he is
paid anadditional sum of at least twenty five per centum of his regular remuneration," which is inseparable from the
prohibition whichthey qualify and of which they are a part and parcel. The secondportion of section 1 is in reality an
exception and not a provisoalthough it is introduced by the word "provided"; and it is elementalthat an exception takes out
of an enactment something which wouldotherwise be part of the subject matter of it.

To construe section 4, Commonwealth Act No. 444, as exempting public utilities, like the appellant, from the obligation to
pay the additional remuneration required by said section 4 should they compel their employees or laborers to work on
Sundays and legalholidays, would not make such exception a class legislation, violative of the constitutional guaranty of
equal protectionof the laws (section 1 [1] Art. III of our Constitution). For itis a well-settled rule in constitutional law that a
legislation which affects with equal force all persons of the same class and notthose of another, is not a class legislation and
does not infringesaid constitutional guaranty of equal protection of the laws, if thedivision into classes is not arbitrary and
is based on differenceswhich are apparent and reasonable. (Magonn vs. Illinois Trust Savings Bank, 170 N. S., 283, 294;
State vs. Garbroski, 111 Iowa, 496; 56 L. R. A., 570.) And it is evident that the division made by section 4, of
Commonwealth Act No. 444, of persons, firms, and corporations into two classes: one composed of public utilities
performing somepublic service such as supplying gas, electricity, power, water orproviding means of transportation; and
another composed of persons,firms, and corporations which are not public utilities and do notperform said public service ,
is not arbitrary and is based ondifferences which are apparent and reasonable.

The division is not arbitrary, and the basis thereof is reasonable. Public utilities exempted from the prohibition set forth in
the enactment clause of section 4, Commonwealth Act No. 444, are required to perform a continuous service including
Sundays andlegal holidays to the public, since the public good so demands,and are not allowed to collect an extra charge
for services performed on those days; while the others are not required to do so and are free to operate or not their shops,
business, or industries on Sundays and legal holidays. If they operate andcompel their laborers to work on those days it is
but just andnatural that they should pay an extra compensation to them, because it is to be presumed that they can make
money or business by operating on those days even if they have to pay such extra remuneration. It would be unfair for the
law to compel publicutilities like the appellant to pay an additional or extra compensation to laborers whom they have to
compel to work duringSundays and legal holidays, in order to perform a continuous service to the public. To require public
utilities performingservice to do so, would be tantamount to penalize them forperforming public service during said days in
compliance withthe requirement of the law and public interest.

The conclusion on which the dissenting opinion is based, which is alsosubstantially the basis of the resolution of the lower
court, is that "As to them [referring to public utilities like the petitioner] section4 of Commonwealth Act No. 444 may be
considered as not having been enacted at all. . . . Therefore, when there is a labor dispute as in the present case, and the
dispute is submitted to the Court of Industrial Relations for decision or settlement, the court is free to providewhat it may
deem just and more beneficial to the interested parties,and that freedom to settle and decide the case certainly
includesthe power to grant additional compensation to workers who work onSundays and holidays. The general power
granted by section 1, 4, and13 of Commonwealth Act No. 103, are not affected in any way or senseby section 4 of
Commonwealth Act No. 444."

This conclusion finds no support in law, reason or logic. It is a well settled rule of statutory construction adopted by courts
of last resort in the States that if one statute enacts some thing in general terms,and afterwards another statute is passed
on the same subject, whichalthough expressed in affirmative language introduces special conditions or restrictions, the
subsequent statute will usually be considered asrepealing by implication the former regarding the matter covered by the
subsequent act; and more specially so when the latter act is expressed in negative terms , as where for example it prohibits
a certain thing for being done, or where it declares that a given act shall be performed in a certain manner and not
otherwise. (See Black on Interpretation of Laws, 2d ed., p. 354, and Sutherland, Statutory Construction, 3d ed., Vol. 1,
section 1922, and cases therein cited.)

In accordance with this rule, the provision of Commonwealth Act No. 103 which confers upon the Court of Industrial
Relations power to settle dispute between employers and employees in general, including those relating to compulsion of
laborers to work on Sundays and legalholidays and additional compensation for those working on those days,should be
considered as impliedly repealed by section 4 of Act No. 444,which limits or restricts the minimum of the additional
compensationand specifies the persons, firms or corporation who may be requered to pay said compensation. That is, that
the Court of Industrial Relations may, under the provision of said section 4, order a person, firm orcorporation or business
establishment or place or center of labor whocompel an employee or laborer to work on Sundays and legal holidays,to pay
him an additional compensation of at least 25 per centum of his regular remuneration; but said court can not require public
utilities performing public service mentioned therein to pay saidextra compensation to laborers and employees required by
them towork on Sundays and legal holidays, because the necessity of publicservice so requires.lawphil.net

It is evident that the principal purpose of the Legislature in enactingsaid section 4, is not only to restrict the general power
of the Court of Industrial Relations granted by Act No. 103, to fix the minimumadditional compensation which an employer
may be required to pay a laborer compelled to work on those days, but principally to exemptpublic utilities affected with
public interest, from the payment ofsuch additional compensation. If it were the intention of the lawmakersin enacting
section 4 of the Act No. 444 to fix the limit of the minimum of additional compensation of laborers working on those days,
withoutexempting the public utilities, that is, leaving intact the general power of the court to require the public utilities to
pay said additional compensation, the law would have only provided, in substance, that allemployers are prohibited from
compelling their laborers to work onSundays and legal holidays without paying them an additional compensationof not less
than 50 per cent of their regular remuneration.

That the intention of the Legislature is to exempt the public utilitiesunder consideration from the prohibition set forth in
the enactmentclause of section 4, Act No. 444, is supported by the provision ofsection 19 of Act No. 103. As amended this
section provides "that with exception of employers engaged in the operation of public services orin the business coupled
with a public interest, employers will notbe allowed to engage the services of the strike breakers within fifteendays after
the declaration of the strike; which shows a contrario sensu that public utilities performing public services are permitted to
engage the services of strike breakers within fifteen days, that is,immediately upon the declaration of the strike. The same
public interest, the reason of the exception in the above quoted provision, underlies the exception provided in section 4, of
Act No. 444.

Therefore, the ruling of the Court of Industrial Relations quoted in the first part of this decision appealed from, being
contrary to law, is set aside. So ordered.

Paras, Pablo, Hilado, Bengzon, Briones, Padilla, and Tuason, JJ., concur.

MORAN, C. J.:

I concur in the result.

Separate Opinions

PERFECTO, J., dissenting:

The petitioner complains against the following judgment of the Court of Industrial Relations with reference to respondent's
demand for 100per cent overtime pay on Sundays and holidays and 50 per cent increase in pay after eigght hours work:

Although the practice of the Company, according to the manifestations of counsel for said company, has been to
grant one day vacation with pay to every workingman who had worked for seven consecutive daysincluding
Sundays, the Court considers justified the opposition presentedby the workingmen to the effect that they need
Sundays and holidaysfor observance of their religion and for rest. The Court, therefore,orders the respondent
company to pay 50 per cent increase for overtimework done on ordinary days and 50 per cent work done during
Sundays and legal holidays, irrespective of the number of days they workduring the week.

The power and jurisdiction of the Court of Industrial Relations torender said judgment under the authority given by section
1, 4, and 13 of Commonwealth Act No. 103, quoted below, cannot be disputed.

SECTION 1. The Judge: his appointment, qualifications, compensation, tenure. There is hereby created a Court
of Industrial Relations, whichshall have jurisdiction over the entire Philippines, to consider,investigate, decide, and
settle any question, matter, controversy ordispute arising between, and/or affecting, employers and employees or
laborers and landlords and tenants or farm-laborers, and regulate the relation between them, subject to, and in
accordance with, the provisionsof thei Act. . . .

SEC. 4. Strikes and lockouts. The Court shall take cognizance forpurposes of prevention, arbitration, decision
and settlement, ofany industrial or agricultural dispute causing or likely to cause a strike or lockout, arising from
differences as regards to wages,shares or compensation, hours of labor or conditions of tenancy or employment,
between employers and employees or laborers and between landlords and tenants or farm-laborers, provided that
 the number of employees, laborers or tenants or farm-laborers involved exceeds thirty, and such industrial or
agricultural dispute is submittedto the Court by the Secretary of Labor, or by any or both of the parties to the
controversy and certified by the Secretary of Laboras existing and proper to be dealt with by the Court for the
sake of public interest. In all such cases, the Secretary of Labor orthe party or parties submitting the disputes,
shall clearly andspecifically state in writing the questions to be decided. Upon thesubmission of such a controversy
or question by the Secretary ofLabor, his intervention therein as authorized by law, shall cease.

The Court shall, before hearing the dispute and in the course ofsuch hearing, endeavor to reconcile the parties and
induce them to settle the dispute by amicable agreement. If any agreement as to the whole or any part of the
dispute is arrived at by the parties, a memorandum of its terms shall be made in writing, signed and acknowledged
by the parties thereto before the Judge of the Court or any official acting in his behalf and authorized to
administer oaths or acknowledgments,or, before a notary public. The memorandum shall be filed in the office of
the Clerk of the Court, and, unless otherwise ordered by the Court, shall, as between the parties to the
agreement, have the same effect as, and be deemed to be, a decision or award.

SEC. 13. Character of the errand. In making an award, order or decision, under the provisions of section four of
this Act, the Court shall not be restricted to the specific relief claimed or demands made by the parties to the
industrial or agricultural dispute, but may include in the award, order or decision any matter or determination
which may be deemed necessary or expedient for the purpose of settling the dispute or of preventing further
industrial or agricultural disputes.

The question raised by petitioner refers to the applicabilityto the controversy of section 4 of CommonwealthAct No. 444,
which reads as follows:

No person, firm or corporation, business establishments or placeor center of labor shall compel an employee or
laborer to work duringSundays and legal holidays, unless he is paid an additional sum of at least twenty-five per
centum of his regular renumeration: Provided, however, That this prohibition shall not apply to public utilities
performing some public service such as supplying gas,electricity, power, water, or providing means of
transportation or communication.

Petitioner prayed that the part of the decision of the Court of Industrial Relations of July 15, 1946, relating todemand No. 4
of the respondent Labor Union, above quoted,and the order of the same court of October 15, 1946, overruling petitioner's
motion to set aside said part and for a new trial, be vacated.

As petitioner invokes the authority of section 4 of Commonwealth Act No. 444, above quoted, the whole controversy in the
in this case hinges upon the interpretation of said section.

No correct interpretation can be given unless the documentin dispute is read correctly. Section 4 of CommonwealthAct No.
444 appears to be composed of two parts; a general provision and an exception. The main provision is prohibitory in nature.
It says that "no person, firm or corporation, business establishment or place or center of labor shall compel employees or
laborers to work during Sundays and legal holidays unless he is paid an additional sum of at least twenty-five per centum of
the regular renumeration." The exception excludes from the prohibitory general provision public utilities performing public
service such as supplying gas, electricity, power, water or providing means of transportation or communication.

It will be seen that section 4 of Commonwealth Act No.444 divides the employers into two classes: 1. Those notengaged in
public utilities, and 2. those engaged in publicutilities. The first class cannot compel their employees orlaborers to work on
Sundays and holidays without givingthem an additional salary or renumeration equivalent to not less than twenty-five per
centum of the basic remuneration. There is no limit as to the time or circumstances under which the additional
compensation is to be paid.Employers engaged in public utilities are excluded from theprohibition. This means simply that
employers engaged in public utilities may or may not pay the additional compensation or any additional compensation for
compelling their laborers to work on Sundays and holidays.The exception should not be interpreted as providing
thatemployers engaged in public utilities cannot be compelledto pay additional compensation to workers required to work
on Sundays and holidays. As to them, section 4of Commonwealth Act No. 444 may be considered as nothaving been enacted
at all. Exception or exemption from a negative or prohibitory legal provision is not a positive or affirmative provision
commanding the excepted or exempted person to do what is enjoined in the general provision.

The general provision of said section does not work eitherway with respect to public utilities. Therefore, when there is a
labor dispute as in the present case, and the dispute is submitted to the Court of Industrial Relations fordecision or
settlement, the court is free to provide what it may deem just and more beneficial to the interested parties,and that
freedom to settle and decide the case certainlyincludes the power to grant additional compensation toworkers who work on
Sundays and holidays. The general power granted by sections 1, 4, and 13 of Commonwealth Act No. 103,above quoted, are
not affected in any way or sense by section 4 of Commonwealth Act No. 444.

The right to collect an additional sum of at least twenty-five per centum of the basic remuneration is guaranteed to
allworklers and employees not engaged in public utilities and that right is enforceable not only in the Court ofIndustrial
Relations but in any other competent court ofjustice. It must be remembered that the jurisdiction ofthe Court of Industrial
Relations is limited to labor disputes in which a minimum number of laborers are involved.Under section 4 of
Commonwealth Act No. 444, a singlelaborer may claim in a competent ordinary court of justicefor the additional
compensation provided therein in case he is compelled to work on Sundays and holidays.

Under the powers granted by sections 1, 4, and 13 of Commonwealth Act No. 103, the Court of Industrial Relations had and
still has perfect power and authority to make the award with respect to demand No. 4 in the way expressed in the
judgment quoted at the beginning of this opinion. In granting 50 per cent increase for work or service done on Sundays and
legal holidays, the Court of Industrial Relations undoubtedly had taken into consideration the circumstances of thecase.

Furthermore, it is a fact that Sundays and legal holidaysare set aside by law as days of rest. The life, existence,and
happiness of a person do not depend only on the satisfaction of his physical needs. There are moral, intellectual and
spiritual needs as imperative as the physical ones. Ordinarily, Sundays and legal holidays are dedicated to reading and
instruction so as to fill the mindwith culture or some sort of advancement. On those days the laborerenjoyslonger hours in
the company of his family. That gives him an opportunity to satisfy his moral needs. During Sundays and holidays more time
is dedicated to worship and other religious services. That givesa laborer an opportunity to satisfy his spiritual needs.The
deprivation of that opportunity to satisfy mental, moral, and spiritual needs should not be ignored, and should be properly
compensated.

For all the foregoing, we are of opinion and so we vote, that the petitionshould be dismissed.
 Republic of the Philippines
SUPREME COURT
Manila

EN BANC

G.R. No. 115455 October 30, 1995

ARTURO M. TOLENTINO, petitioner,

vs.
THE SECRETARY OF FINANCE and THE COMMISSIONER OF INTERNAL REVENUE, respondents.

G.R. No. 115525 October 30, 1995

JUAN T. DAVID, petitioner,

vs.
TEOFISTO T. GUINGONA, JR., as Executive Secretary; ROBERTO DE OCAMPO, as Secretary of Finance; LIWAYWAY
VINZONS-CHATO, as Commissioner of Internal Revenue; and their AUTHORIZED AGENTS OR
REPRESENTATIVES, respondents.

G.R. No. 115543 October 30, 1995

RAUL S. ROCO and the INTEGRATED BAR OF THE PHILIPPINES, petitioners,

vs.
THE SECRETARY OF THE DEPARTMENT OF FINANCE; THE COMMISSIONERS OF THE BUREAU OF INTERNAL REVENUE AND
BUREAU OF CUSTOMS, respondents.

G.R. No. 115544 October 30, 1995

PHILIPPINE PRESS INSTITUTE, INC.; EGP PUBLISHING CO., INC.; KAMAHALAN PUBLISHING CORPORATION; PHILIPPINE
JOURNALISTS, INC.; JOSE L. PAVIA; and OFELIA L. DIMALANTA, petitioners,
vs.
HON. LIWAYWAY V. CHATO, in her capacity as Commissioner of Internal Revenue; HON. TEOFISTO T. GUINGONA, JR., in
his capacity as Executive Secretary; and HON. ROBERTO B. DE OCAMPO, in his capacity as Secretary of
Finance, respondents.

G.R. No. 115754 October 30, 1995

CHAMBER OF REAL ESTATE AND BUILDERS ASSOCIATIONS, INC., (CREBA), petitioner,

vs.
THE COMMISSIONER OF INTERNAL REVENUE, respondent.

G.R. No. 115781 October 30, 1995

KILOSBAYAN, INC., JOVITO R. SALONGA, CIRILO A. RIGOS, ERME CAMBA, EMILIO C. CAPULONG, JR., JOSE T. APOLO,
EPHRAIM TENDERO, FERNANDO SANTIAGO, JOSE ABCEDE, CHRISTINE TAN, FELIPE L. GOZON, RAFAEL G. FERNANDO,
RAOUL V. VICTORINO, JOSE CUNANAN, QUINTIN S. DOROMAL, MOVEMENT OF ATTORNEYS FOR BROTHERHOOD,
INTEGRITY AND NATIONALISM, INC. ("MABINI"), FREEDOM FROM DEBT COALITION, INC., and PHILIPPINE BIBLE SOCIETY,
INC. and WIGBERTO TAADA,petitioners,
vs.
THE EXECUTIVE SECRETARY, THE SECRETARY OF FINANCE, THE COMMISSIONER OF INTERNAL REVENUE and THE
COMMISSIONER OF CUSTOMS, respondents.

G.R. No. 115852 October 30, 1995

PHILIPPINE AIRLINES, INC., petitioner,
vs.
THE SECRETARY OF FINANCE and COMMISSIONER OF INTERNAL REVENUE, respondents.

G.R. No. 115873 October 30, 1995

COOPERATIVE UNION OF THE PHILIPPINES, petitioner,

vs.
HON. LIWAYWAY V. CHATO, in her capacity as the Commissioner of Internal Revenue, HON. TEOFISTO T. GUINGONA,
JR., in his capacity as Executive Secretary, and HON. ROBERTO B. DE OCAMPO, in his capacity as Secretary of
Finance, respondents.

G.R. No. 115931 October 30, 1995

PHILIPPINE EDUCATIONAL PUBLISHERS ASSOCIATION, INC. and ASSOCIATION OF PHILIPPINE BOOK SELLERS, petitioners,
vs.
HON. ROBERTO B. DE OCAMPO, as the Secretary of Finance; HON. LIWAYWAY V. CHATO, as the Commissioner of Internal
Revenue; and HON. GUILLERMO PARAYNO, JR., in his capacity as the Commissioner of Customs, respondents.

RESOLUTION

MENDOZA, J.:

These are motions seeking reconsideration of our decision dismissing the petitions filed in these cases for the declaration of
unconstitutionality of R.A. No. 7716, otherwise known as the Expanded Value-Added Tax Law. The motions, of which there
are 10 in all, have been filed by the several petitioners in these cases, with the exception of the Philippine Educational
Publishers Association, Inc. and the Association of Philippine Booksellers, petitioners in G.R. No. 115931.

The Solicitor General, representing the respondents, filed a consolidated comment, to which the Philippine Airlines, Inc.,
petitioner in G.R. No. 115852, and the Philippine Press Institute, Inc., petitioner in G.R. No. 115544, and Juan T. David,
petitioner in G.R. No. 115525, each filed a reply. In turn the Solicitor General filed on June 1, 1995 a rejoinder to the PPI's
reply.

On June 27, 1995 the matter was submitted for resolution.

I. Power of the Senate to propose amendments to revenue bills. Some of the petitioners (Tolentino, Kilosbayan, Inc.,
Philippine Airlines (PAL), Roco, and Chamber of Real Estate and Builders Association (CREBA)) reiterate previous claims
made by them that R.A. No. 7716 did not "originate exclusively" in the House of Representatives as required by Art. VI, 24
of the Constitution. Although they admit that H. No. 11197 was filed in the House of Representatives where it passed three
readings and that afterward it was sent to the Senate where after first reading it was referred to the Senate Ways and
Means Committee, they complain that the Senate did not pass it on second and third readings. Instead what the Senate did
was to pass its own version (S. No. 1630) which it approved on May 24, 1994. Petitioner Tolentino adds that what the Senate
committee should have done was to amend H. No. 11197 by striking out the text of the bill and substituting it with the text
of S. No. 1630. That way, it is said, "the bill remains a House bill and the Senate version just becomes the text (only the
text) of the House bill."

The contention has no merit.

The enactment of S. No. 1630 is not the only instance in which the Senate proposed an amendment to a House revenue bill
by enacting its own version of a revenue bill. On at least two occasions during the Eighth Congress, the Senate passed its
own version of revenue bills, which, in consolidation with House bills earlier passed, became the enrolled bills. These were:

R.A. No. 7369 (AN ACT TO AMEND THE OMNIBUS INVESTMENTS CODE OF 1987 BY EXTENDING FROM FIVE (5) YEARS TO TEN
YEARS THE PERIOD FOR TAX AND DUTY EXEMPTION AND TAX CREDIT ON CAPITAL EQUIPMENT) which was approved by the
President on April 10, 1992. This Act is actually a consolidation of H. No. 34254, which was approved by the House on
January 29, 1992, and S. No. 1920, which was approved by the Senate on February 3, 1992.
R.A. No. 7549 (AN ACT GRANTING TAX EXEMPTIONS TO WHOEVER SHALL GIVE REWARD TO ANY FILIPINO ATHLETE WINNING A
MEDAL IN OLYMPIC GAMES) which was approved by the President on May 22, 1992. This Act is a consolidation of H. No.
22232, which was approved by the House of Representatives on August 2, 1989, and S. No. 807, which was approved by the
Senate on October 21, 1991.

On the other hand, the Ninth Congress passed revenue laws which were also the result of the consolidation of House and
Senate bills. These are the following, with indications of the dates on which the laws were approved by the President and
dates the separate bills of the two chambers of Congress were respectively passed:

1. R.A. NO. 7642

AN ACT INCREASING THE PENALTIES FOR TAX EVASION, AMENDING FOR THIS PURPOSE THE PERTINENT
SECTIONS OF THE NATIONAL INTERNAL REVENUE CODE (December 28, 1992).

House Bill No. 2165, October 5, 1992

Senate Bill No. 32, December 7, 1992

2. R.A. NO. 7643

AN ACT TO EMPOWER THE COMMISSIONER OF INTERNAL REVENUE TO REQUIRE THE PAYMENT OF THE VALUE-
ADDED TAX EVERY MONTH AND TO ALLOW LOCAL GOVERNMENT UNITS TO SHARE IN VAT REVENUE,
AMENDING FOR THIS PURPOSE CERTAIN SECTIONS OF THE NATIONAL INTERNAL REVENUE CODE (December
28, 1992)

House Bill No. 1503, September 3, 1992

Senate Bill No. 968, December 7, 1992

3. R.A. NO. 7646

AN ACT AUTHORIZING THE COMMISSIONER OF INTERNAL REVENUE TO PRESCRIBE THE PLACE FOR PAYMENT
OF INTERNAL REVENUE TAXES BY LARGE TAXPAYERS, AMENDING FOR THIS PURPOSE CERTAIN PROVISIONS OF
THE NATIONAL INTERNAL REVENUE CODE, AS AMENDED (February 24, 1993)

House Bill No. 1470, October 20, 1992

Senate Bill No. 35, November 19, 1992

4. R.A. NO. 7649

AN ACT REQUIRING THE GOVERNMENT OR ANY OF ITS POLITICAL SUBDIVISIONS, INSTRUMENTALITIES OR

AGENCIES INCLUDING GOVERNMENT-OWNED OR CONTROLLED CORPORATIONS (GOCCS) TO DEDUCT AND
WITHHOLD THE VALUE-ADDED TAX DUE AT THE RATE OF THREE PERCENT (3%) ON GROSS PAYMENT FOR THE
PURCHASE OF GOODS AND SIX PERCENT (6%) ON GROSS RECEIPTS FOR SERVICES RENDERED BY
CONTRACTORS (April 6, 1993)

House Bill No. 5260, January 26, 1993

Senate Bill No. 1141, March 30, 1993

5. R.A. NO. 7656

AN ACT REQUIRING GOVERNMENT-OWNED OR CONTROLLED CORPORATIONS TO DECLARE DIVIDENDS UNDER

CERTAIN CONDITIONS TO THE NATIONAL GOVERNMENT, AND FOR OTHER PURPOSES (November 9, 1993)

House Bill No. 11024, November 3, 1993

 Senate Bill No. 1168, November 3, 1993

6. R.A. NO. 7660

AN ACT RATIONALIZING FURTHER THE STRUCTURE AND ADMINISTRATION OF THE DOCUMENTARY STAMP TAX,
AMENDING FOR THE PURPOSE CERTAIN PROVISIONS OF THE NATIONAL INTERNAL REVENUE CODE, AS
AMENDED, ALLOCATING FUNDS FOR SPECIFIC PROGRAMS, AND FOR OTHER PURPOSES (December 23, 1993)

House Bill No. 7789, May 31, 1993

Senate Bill No. 1330, November 18, 1993

7. R.A. NO. 7717

AN ACT IMPOSING A TAX ON THE SALE, BARTER OR EXCHANGE OF SHARES OF STOCK LISTED AND TRADED
THROUGH THE LOCAL STOCK EXCHANGE OR THROUGH INITIAL PUBLIC OFFERING, AMENDING FOR THE
PURPOSE THE NATIONAL INTERNAL REVENUE CODE, AS AMENDED, BY INSERTING A NEW SECTION AND
REPEALING CERTAIN SUBSECTIONS THEREOF (May 5, 1994)

House Bill No. 9187, November 3, 1993

Senate Bill No. 1127, March 23, 1994

Thus, the enactment of S. No. 1630 is not the only instance in which the Senate, in the exercise of its power to propose
amendments to bills required to originate in the House, passed its own version of a House revenue measure. It is
noteworthy that, in the particular case of S. No. 1630, petitioners Tolentino and Roco, as members of the Senate, voted to
approve it on second and third readings.

On the other hand, amendment by substitution, in the manner urged by petitioner Tolentino, concerns a mere matter of
form. Petitioner has not shown what substantial difference it would make if, as the Senate actually did in this case, a
separate bill like S. No. 1630 is instead enacted as a substitute measure, "taking into Consideration . . . H.B. 11197."

Indeed, so far as pertinent, the Rules of the Senate only provide:

RULE XXIX

AMENDMENTS

xxx xxx xxx

68. Not more than one amendment to the original amendment shall be considered.

No amendment by substitution shall be entertained unless the text thereof is submitted in writing.

Any of said amendments may be withdrawn before a vote is taken thereon.

69. No amendment which seeks the inclusion of a legislative provision foreign to the subject matter of a
bill (rider) shall be entertained.

xxx xxx xxx

70-A. A bill or resolution shall not be amended by substituting it with another which covers a subject
distinct from that proposed in the original bill or resolution. (emphasis added).

Nor is there merit in petitioners' contention that, with regard to revenue bills, the Philippine Senate possesses less power
than the U.S. Senate because of textual differences between constitutional provisions giving them the power to propose or
concur with amendments.
Art. I, 7, cl. 1 of the U.S. Constitution reads:

All Bills for raising Revenue shall originate in the House of Representatives; but the Senate may propose or
concur with amendments as on other Bills.

Art. VI, 24 of our Constitution reads:

All appropriation, revenue or tariff bills, bills authorizing increase of the public debt, bills of local
application, and private bills shall originate exclusively in the House of Representatives, but the Senate
may propose or concur with amendments.

The addition of the word "exclusively" in the Philippine Constitution and the decision to drop the phrase "as on other Bills"
in the American version, according to petitioners, shows the intention of the framers of our Constitution to restrict the
Senate's power to propose amendments to revenue bills. Petitioner Tolentino contends that the word "exclusively" was
inserted to modify "originate" and "the words 'as in any other bills' (sic) were eliminated so as to show that these bills were
not to be like other bills but must be treated as a special kind."

The history of this provision does not support this contention. The supposed indicia of constitutional intent are nothing but
the relics of an unsuccessful attempt to limit the power of the Senate. It will be recalled that the 1935 Constitution
originally provided for a unicameral National Assembly. When it was decided in 1939 to change to a bicameral legislature, it
became necessary to provide for the procedure for lawmaking by the Senate and the House of Representatives. The work of
proposing amendments to the Constitution was done by the National Assembly, acting as a constituent assembly, some of
whose members, jealous of preserving the Assembly's lawmaking powers, sought to curtail the powers of the proposed
Senate. Accordingly they proposed the following provision:

All bills appropriating public funds, revenue or tariff bills, bills of local application, and private bills shall
originate exclusively in the Assembly, but the Senate may propose or concur with amendments. In case of
disapproval by the Senate of any such bills, the Assembly may repass the same by a two-thirds vote of all
its members, and thereupon, the bill so repassed shall be deemed enacted and may be submitted to the
President for corresponding action. In the event that the Senate should fail to finally act on any such bills,
the Assembly may, after thirty days from the opening of the next regular session of the same legislative
term, reapprove the same with a vote of two-thirds of all the members of the Assembly. And upon such
reapproval, the bill shall be deemed enacted and may be submitted to the President for corresponding
action.

The special committee on the revision of laws of the Second National Assembly vetoed the proposal. It deleted everything
after the first sentence. As rewritten, the proposal was approved by the National Assembly and embodied in Resolution No.
38, as amended by Resolution No. 73. (J. ARUEGO, KNOW YOUR CONSTITUTION 65-66 (1950)). The proposed amendment
was submitted to the people and ratified by them in the elections held on June 18, 1940.

This is the history of Art. VI, 18 (2) of the 1935 Constitution, from which Art. VI, 24 of the present Constitution was
derived. It explains why the word "exclusively" was added to the American text from which the framers of the Philippine
Constitution borrowed and why the phrase "as on other Bills" was not copied. Considering the defeat of the proposal, the
power of the Senate to propose amendments must be understood to be full, plenary and complete "as on other Bills." Thus,
because revenue bills are required to originate exclusively in the House of Representatives, the Senate cannot enact
revenue measures of its own without such bills. After a revenue bill is passed and sent over to it by the House, however, the
Senate certainly can pass its own version on the same subject matter. This follows from the coequality of the two chambers
of Congress.

That this is also the understanding of book authors of the scope of the Senate's power to concur is clear from the following
commentaries:

The power of the Senate to propose or concur with amendments is apparently without restriction. It
would seem that by virtue of this power, the Senate can practically re-write a bill required to come from
the House and leave only a trace of the original bill. For example, a general revenue bill passed by the
lower house of the United States Congress contained provisions for the imposition of an inheritance tax .
This was changed by the Senate into a corporation tax. The amending authority of the Senate was
declared by the United States Supreme Court to be sufficiently broad to enable it to make the alteration.
[Flint v. Stone Tracy Company, 220 U.S. 107, 55 L. ed. 389].

(L. TAADA AND F. CARREON, POLITICAL LAW OF THE PHILIPPINES 247 (1961))
 The above-mentioned bills are supposed to be initiated by the House of Representatives because it is
more numerous in membership and therefore also more representative of the people. Moreover, its
members are presumed to be more familiar with the needs of the country in regard to the enactment of
the legislation involved.

The Senate is, however, allowed much leeway in the exercise of its power to propose or concur with
amendments to the bills initiated by the House of Representatives. Thus, in one case, a bill introduced in
the U.S. House of Representatives was changed by the Senate to make a proposed inheritance tax a
corporation tax. It is also accepted practice for the Senate to introduce what is known as an amendment
by substitution, which may entirely replace the bill initiated in the House of Representatives.

(I. CRUZ, PHILIPPINE POLITICAL LAW 144-145 (1993)).

In sum, while Art. VI, 24 provides that all appropriation, revenue or tariff bills, bills authorizing increase of the public
debt, bills of local application, and private bills must "originate exclusively in the House of Representatives," it also adds,
"but the Senate may propose or concur with amendments." In the exercise of this power, the Senate may propose an
entirely new bill as a substitute measure. As petitioner Tolentino states in a high school text, a committee to which a bill is
referred may do any of the following:

(1) to endorse the bill without changes; (2) to make changes in the bill omitting or adding sections or
altering its language; (3) to make and endorse an entirely new bill as a substitute, in which case it will be
known as a committee bill; or (4) to make no report at all.

(A. TOLENTINO, THE GOVERNMENT OF THE PHILIPPINES 258 (1950))

To except from this procedure the amendment of bills which are required to originate in the House by prescribing that the
number of the House bill and its other parts up to the enacting clause must be preserved although the text of the Senate
amendment may be incorporated in place of the original body of the bill is to insist on a mere technicality. At any rate
there is no rule prescribing this form. S. No. 1630, as a substitute measure, is therefore as much an amendment of H. No.
11197 as any which the Senate could have made.

II. S. No. 1630 a mere amendment of H. No. 11197. Petitioners' basic error is that they assume that S. No. 1630 is
an independent and distinct bill. Hence their repeated references to its certification that it was passed by the Senate
"in substitution of S.B. No. 1129, taking into consideration P.S. Res. No. 734 and H.B. No. 11197," implying that there is
something substantially different between the reference to S. No. 1129 and the reference to H. No. 11197. From this
premise, they conclude that R.A. No. 7716 originated both in the House and in the Senate and that it is the product of two
"half-baked bills because neither H. No. 11197 nor S. No. 1630 was passed by both houses of Congress."

In point of fact, in several instances the provisions of S. No. 1630, clearly appear to be mere amendments of the
corresponding provisions of H. No. 11197. The very tabular comparison of the provisions of H. No. 11197 and S. No. 1630
attached as Supplement A to the basic petition of petitioner Tolentino, while showing differences between the two bills, at
the same time indicates that the provisions of the Senate bill were precisely intended to be amendments to the House bill.

Without H. No. 11197, the Senate could not have enacted S. No. 1630. Because the Senate bill was a mere amendment of
the House bill, H. No. 11197 in its original form did not have to pass the Senate on second and three readings. It was
enough that after it was passed on first reading it was referred to the Senate Committee on Ways and Means. Neither was it
required that S. No. 1630 be passed by the House of Representatives before the two bills could be referred to the
Conference Committee.

There is legislative precedent for what was done in the case of H. No. 11197 and S. No. 1630. When the House bill and
Senate bill, which became R.A. No. 1405 (Act prohibiting the disclosure of bank deposits), were referred to a conference
committee, the question was raised whether the two bills could be the subject of such conference, considering that the bill
from one house had not been passed by the other and vice versa. As Congressman Duran put the question:

MR. DURAN. Therefore, I raise this question of order as to procedure: If a House bill is passed by the
House but not passed by the Senate, and a Senate bill of a similar nature is passed in the Senate but
never passed in the House, can the two bills be the subject of a conference, and can a law be enacted
from these two bills? I understand that the Senate bill in this particular instance does not refer to
investments in government securities, whereas the bill in the House, which was introduced by the
Speaker, covers two subject matters: not only investigation of deposits in banks but also investigation of
 investments in government securities. Now, since the two bills differ in their subject matter, I believe
that no law can be enacted.

Ruling on the point of order raised, the chair (Speaker Jose B. Laurel, Jr.) said:

THE SPEAKER. The report of the conference committee is in order. It is precisely in cases like this where a
conference should be had. If the House bill had been approved by the Senate, there would have been no
need of a conference; but precisely because the Senate passed another bill on the same subject matter,
the conference committee had to be created, and we are now considering the report of that committee.

(2 CONG. REC. NO. 13, July 27, 1955, pp. 3841-42 (emphasis added))

III. The President's certification. The fallacy in thinking that H. No. 11197 and S. No. 1630 are distinct and unrelated
measures also accounts for the petitioners' (Kilosbayan's and PAL's) contention that because the President separately
certified to the need for the immediate enactment of these measures, his certification was ineffectual and void. The
certification had to be made of the version of the same revenue bill which at the momentwas being considered. Otherwise,
to follow petitioners' theory, it would be necessary for the President to certify as many bills as are presented in a house of
Congress even though the bills are merely versions of the bill he has already certified. It is enough that he certifies the bill
which, at the time he makes the certification, is under consideration. Since on March 22, 1994 the Senate was considering
S. No. 1630, it was that bill which had to be certified. For that matter on June 1, 1993 the President had earlier certified H.
No. 9210 for immediate enactment because it was the one which at that time was being considered by the House. This bill
was later substituted, together with other bills, by H. No. 11197.

As to what Presidential certification can accomplish, we have already explained in the main decision that the phrase
"except when the President certifies to the necessity of its immediate enactment, etc." in Art. VI, 26 (2) qualifies not only
the requirement that "printed copies [of a bill] in its final form [must be] distributed to the members three days before its
passage" but also the requirement that before a bill can become a law it must have passed "three readings on separate
days." There is not only textual support for such construction but historical basis as well.

Art. VI, 21 (2) of the 1935 Constitution originally provided:

(2) No bill shall be passed by either House unless it shall have been printed and copies thereof in its final
form furnished its Members at least three calendar days prior to its passage, except when the President
shall have certified to the necessity of its immediate enactment. Upon the last reading of a bill, no
amendment thereof shall be allowed and the question upon its passage shall be taken immediately
thereafter, and the yeas and nays entered on the Journal.

When the 1973 Constitution was adopted, it was provided in Art. VIII, 19 (2):

(2) No bill shall become a law unless it has passed three readings on separate days, and printed copies
thereof in its final form have been distributed to the Members three days before its passage, except when
the Prime Minister certifies to the necessity of its immediate enactment to meet a public calamity or
emergency. Upon the last reading of a bill, no amendment thereto shall be allowed, and the vote thereon
shall be taken immediately thereafter, and the yeas and nays entered in the Journal.

This provision of the 1973 document, with slight modification, was adopted in Art. VI, 26 (2) of the present Constitution,
thus:

(2) No bill passed by either House shall become a law unless it has passed three readings on separate
days, and printed copies thereof in its final form have been distributed to its Members three days before
its passage, except when the President certifies to the necessity of its immediate enactment to meet a
public calamity or emergency. Upon the last reading of a bill, no amendment thereto shall be allowed,
and the vote thereon shall be taken immediately thereafter, and the yeasand nays entered in the Journal.

The exception is based on the prudential consideration that if in all cases three readings on separate days are required and
a bill has to be printed in final form before it can be passed, the need for a law may be rendered academic by the
occurrence of the very emergency or public calamity which it is meant to address.
Petitioners further contend that a "growing budget deficit" is not an emergency, especially in a country like the Philippines
where budget deficit is a chronic condition. Even if this were the case, an enormous budget deficit does not make the need
for R.A. No. 7716 any less urgent or the situation calling for its enactment any less an emergency.

Apparently, the members of the Senate (including some of the petitioners in these cases) believed that there was an urgent
need for consideration of S. No. 1630, because they responded to the call of the President by voting on the bill on second
and third readings on the same day. While the judicial department is not bound by the Senate's acceptance of the
President's certification, the respect due coequal departments of the government in matters committed to them by the
Constitution and the absence of a clear showing of grave abuse of discretion caution a stay of the judicial hand.

At any rate, we are satisfied that S. No. 1630 received thorough consideration in the Senate where it was discussed for six
days. Only its distribution in advance in its final printed form was actually dispensed with by holding the voting on second
and third readings on the same day (March 24, 1994). Otherwise, sufficient time between the submission of the bill on
February 8, 1994 on second reading and its approval on March 24, 1994 elapsed before it was finally voted on by the Senate
on third reading.

The purpose for which three readings on separate days is required is said to be two-fold: (1) to inform the members of
Congress of what they must vote on and (2) to give them notice that a measure is progressing through the enacting process,
thus enabling them and others interested in the measure to prepare their positions with reference to it. (1 J. G.
SUTHERLAND, STATUTES AND STATUTORY CONSTRUCTION 10.04, p. 282 (1972)). These purposes were substantially achieved
in the case of R.A. No. 7716.

IV. Power of Conference Committee. It is contended (principally by Kilosbayan, Inc. and the Movement of Attorneys for
Brotherhood, Integrity and Nationalism, Inc. (MABINI)) that in violation of the constitutional policy of full public disclosure
and the people's right to know (Art. II, 28 and Art. III, 7) the Conference Committee met for two days in executive session
with only the conferees present.

As pointed out in our main decision, even in the United States it was customary to hold such sessions with only the
conferees and their staffs in attendance and it was only in 1975 when a new rule was adopted requiring open sessions.
Unlike its American counterpart, the Philippine Congress has not adopted a rule prescribing open hearings for conference
committees.

It is nevertheless claimed that in the United States, before the adoption of the rule in 1975, at least staff members were
present. These were staff members of the Senators and Congressmen, however, who may be presumed to be their
confidential men, not stenographers as in this case who on the last two days of the conference were excluded. There is no
showing that the conferees themselves did not take notes of their proceedings so as to give petitioner Kilosbayan basis for
claiming that even in secret diplomatic negotiations involving state interests, conferees keep notes of their meetings.
Above all, the public's right to know was fully served because the Conference Committee in this case submitted a report
showing the changes made on the differing versions of the House and the Senate.

Petitioners cite the rules of both houses which provide that conference committee reports must contain "a detailed,
sufficiently explicit statement of the changes in or other amendments." These changes are shown in the bill attached to the
Conference Committee Report. The members of both houses could thus ascertain what changes had been made in the
original bills without the need of a statement detailing the changes.

The same question now presented was raised when the bill which became R.A. No. 1400 (Land Reform Act of 1955) was
reported by the Conference Committee. Congressman Bengzon raised a point of order. He said:

MR. BENGZON. My point of order is that it is out of order to consider the report of the conference
committee regarding House Bill No. 2557 by reason of the provision of Section 11, Article XII, of the Rules
of this House which provides specifically that the conference report must be accompanied by a detailed
statement of the effects of the amendment on the bill of the House. This conference committee report is
not accompanied by that detailed statement, Mr. Speaker. Therefore it is out of order to consider it.

Petitioner Tolentino, then the Majority Floor Leader, answered:

MR. TOLENTINO. Mr. Speaker, I should just like to say a few words in connection with the point of order
raised by the gentleman from Pangasinan.

There is no question about the provision of the Rule cited by the gentleman from Pangasinan, butthis
provision applies to those cases where only portions of the bill have been amended. In this case before
 us an entire bill is presented; therefore, it can be easily seen from the reading of the bill what the
provisions are. Besides, this procedure has been an established practice.

After some interruption, he continued:

MR. TOLENTINO. As I was saying, Mr. Speaker, we have to look into the reason for the provisions of the
Rules, and the reason for the requirement in the provision cited by the gentleman from Pangasinan is
when there are only certain words or phrases inserted in or deleted from the provisions of the bill
included in the conference report, and we cannot understand what those words and phrases mean and
their relation to the bill. In that case, it is necessary to make a detailed statement on how those words
and phrases will affect the bill as a whole; but when the entire bill itself is copied verbatim in the
conference report, that is not necessary. So when the reason for the Rule does not exist, the Rule does
not exist.

(2 CONG. REC. NO. 2, p. 4056. (emphasis added))

Congressman Tolentino was sustained by the chair. The record shows that when the ruling was appealed, it was upheld
by viva voce and when a division of the House was called, it was sustained by a vote of 48 to 5. (Id.,
p. 4058)

Nor is there any doubt about the power of a conference committee to insert new provisions as long as these are germane to
the subject of the conference. As this Court held in Philippine Judges Association v. Prado, 227 SCRA 703 (1993), in an
opinion written by then Justice Cruz, the jurisdiction of the conference committee is not limited to resolving differences
between the Senate and the House. It may propose an entirely new provision. What is important is that its report is
subsequently approved by the respective houses of Congress. This Court ruled that it would not entertain allegations that,
because new provisions had been added by the conference committee, there was thereby a violation of the constitutional
injunction that "upon the last reading of a bill, no amendment thereto shall be allowed."

Applying these principles, we shall decline to look into the petitioners' charges that an amendment was
made upon the last reading of the bill that eventually became R.A. No. 7354 and that copiesthereof in its
final form were not distributed among the members of each House. Both the enrolled bill and the
legislative journals certify that the measure was duly enacted i.e., in accordance with Article VI, Sec. 26
(2) of the Constitution. We are bound by such official assurances from a coordinate department of the
government, to which we owe, at the very least, a becoming courtesy.

(Id. at 710. (emphasis added))

It is interesting to note the following description of conference committees in the Philippines in a 1979 study:

Conference committees may be of two types: free or instructed. These committees may be given
instructions by their parent bodies or they may be left without instructions. Normally the conference
committees are without instructions, and this is why they are often critically referred to as "the little
legislatures." Once bills have been sent to them, the conferees have almost unlimited authority to change
the clauses of the bills and in fact sometimes introduce new measures that were not in the original
legislation. No minutes are kept, and members' activities on conference committees are difficult to
determine. One congressman known for his idealism put it this way: "I killed a bill on export incentives for
my interest group [copra] in the conference committee but I could not have done so anywhere else." The
conference committee submits a report to both houses, and usually it is accepted. If the report is not
accepted, then the committee is discharged and new members are appointed.

(R. Jackson, Committees in the Philippine Congress, in COMMITTEES AND LEGISLATURES: A COMPARATIVE
ANALYSIS 163 (J. D. LEES AND M. SHAW, eds.)).

In citing this study, we pass no judgment on the methods of conference committees. We cite it only to say that conference
committees here are no different from their counterparts in the United States whose vast powers we noted in Philippine
Judges Association v. Prado, supra. At all events, under Art. VI, 16(3) each house has the power "to determine the rules of
its proceedings," including those of its committees. Any meaningful change in the method and procedures of Congress or its
committees must therefore be sought in that body itself.

V. The titles of S. No. 1630 and H. No. 11197. PAL maintains that R.A. No. 7716 violates Art. VI, 26 (1) of the Constitution
which provides that "Every bill passed by Congress shall embrace only one subject which shall be expressed in the title
thereof." PAL contends that the amendment of its franchise by the withdrawal of its exemption from the VAT is not
expressed in the title of the law.

Pursuant to 13 of P.D. No. 1590, PAL pays a franchise tax of 2% on its gross revenue "in lieu of all other taxes, duties,
royalties, registration, license and other fees and charges of any kind, nature, or description, imposed, levied, established,
assessed or collected by any municipal, city, provincial or national authority or government agency, now or in the future."

PAL was exempted from the payment of the VAT along with other entities by 103 of the National Internal Revenue Code,
which provides as follows:

103. Exempt transactions. The following shall be exempt from the value-added tax:

xxx xxx xxx

(q) Transactions which are exempt under special laws or international agreements to which the Philippines
is a signatory.

R.A. No. 7716 seeks to withdraw certain exemptions, including that granted to PAL, by amending 103, as follows:

103. Exempt transactions. The following shall be exempt from the value-added tax:

xxx xxx xxx

(q) Transactions which are exempt under special laws, except those granted under Presidential Decree
Nos. 66, 529, 972, 1491, 1590. . . .

The amendment of 103 is expressed in the title of R.A. No. 7716 which reads:

AN ACT RESTRUCTURING THE VALUE-ADDED TAX (VAT) SYSTEM, WIDENING ITS TAX BASE AND ENHANCING
ITS ADMINISTRATION, AND FOR THESE PURPOSES AMENDING AND REPEALING THE RELEVANT PROVISIONS OF
THE NATIONAL INTERNAL REVENUE CODE, AS AMENDED, AND FOR OTHER PURPOSES.

By stating that R.A. No. 7716 seeks to "[RESTRUCTURE] THE VALUE-ADDED TAX (VAT) SYSTEM [BY] WIDENING ITS TAX BASE
AND ENHANCING ITS ADMINISTRATION, AND FOR THESE PURPOSES AMENDING AND REPEALING THE RELEVANT PROVISIONS OF
THE NATIONAL INTERNAL REVENUE CODE, AS AMENDED AND FOR OTHER PURPOSES," Congress thereby clearly expresses its
intention to amend any provision of the NIRC which stands in the way of accomplishing the purpose of the law.

PAL asserts that the amendment of its franchise must be reflected in the title of the law by specific reference to P.D. No.
1590. It is unnecessary to do this in order to comply with the constitutional requirement, since it is already stated in the
title that the law seeks to amend the pertinent provisions of the NIRC, among which is 103(q), in order to widen the base
of the VAT. Actually, it is the bill which becomes a law that is required to express in its title the subject of legislation. The
titles of H. No. 11197 and S. No. 1630 in fact specifically referred to 103 of the NIRC as among the provisions sought to be
amended. We are satisfied that sufficient notice had been given of the pendency of these bills in Congress before they were
enacted into what is now R.A.
No. 7716.

In Philippine Judges Association v. Prado, supra, a similar argument as that now made by PAL was rejected. R.A. No. 7354 is
entitled AN ACT CREATING THE PHILIPPINE POSTAL CORPORATION, DEFINING ITS POWERS, FUNCTIONS AND RESPONSIBILITIES,
PROVIDING FOR REGULATION OF THE INDUSTRY AND FOR OTHER PURPOSES CONNECTED THEREWITH. It contained a provision
repealing all franking privileges. It was contended that the withdrawal of franking privileges was not expressed in the title
of the law. In holding that there was sufficient description of the subject of the law in its title, including the repeal of
franking privileges, this Court held:

To require every end and means necessary for the accomplishment of the general objectives of the
statute to be expressed in its title would not only be unreasonable but would actually render legislation
impossible. [Cooley, Constitutional Limitations, 8th Ed., p. 297] As has been correctly explained:

The details of a legislative act need not be specifically stated in its title, but matter
germane to the subject as expressed in the title, and adopted to the accomplishment of
the object in view, may properly be included in the act. Thus, it is proper to create in
 the same act the machinery by which the act is to be enforced, to prescribe the
penalties for its infraction, and to remove obstacles in the way of its execution. If such
matters are properly connected with the subject as expressed in the title, it is
unnecessary that they should also have special mention in the title. (Southern Pac. Co.
v. Bartine, 170 Fed. 725)

(227 SCRA at 707-708)

VI. Claims of press freedom and religious liberty. We have held that, as a general proposition, the press is not exempt from
the taxing power of the State and that what the constitutional guarantee of free press prohibits are laws which single out
the press or target a group belonging to the press for special treatment or which in any way discriminate against the press
on the basis of the content of the publication, and R.A. No. 7716 is none of these.

Now it is contended by the PPI that by removing the exemption of the press from the VAT while maintaining those granted
to others, the law discriminates against the press. At any rate, it is averred, "even nondiscriminatory taxation of
constitutionally guaranteed freedom is unconstitutional."

With respect to the first contention, it would suffice to say that since the law granted the press a privilege, the law could
take back the privilege anytime without offense to the Constitution. The reason is simple: by granting exemptions, the
State does not forever waive the exercise of its sovereign prerogative.

Indeed, in withdrawing the exemption, the law merely subjects the press to the same tax burden to which other businesses
have long ago been subject. It is thus different from the tax involved in the cases invoked by the PPI. The license tax
in Grosjean v. American Press Co., 297 U.S. 233, 80 L. Ed. 660 (1936) was found to be discriminatory because it was laid on
the gross advertising receipts only of newspapers whose weekly circulation was over 20,000, with the result that the tax
applied only to 13 out of 124 publishers in Louisiana. These large papers were critical of Senator Huey Long who controlled
the state legislature which enacted the license tax. The censorial motivation for the law was thus evident.

On the other hand, in Minneapolis Star & Tribune Co. v. Minnesota Comm'r of Revenue, 460 U.S. 575, 75 L. Ed. 2d 295
(1983), the tax was found to be discriminatory because although it could have been made liable for the sales tax or, in lieu
thereof, for the use tax on the privilege of using, storing or consuming tangible goods, the press was not. Instead, the press
was exempted from both taxes. It was, however, later made to pay a specialuse tax on the cost of paper and ink which
made these items "the only items subject to the use tax that were component of goods to be sold at retail." The U.S.
Supreme Court held that the differential treatment of the press "suggests that the goal of regulation is not related to
suppression of expression, and such goal is presumptively unconstitutional." It would therefore appear that even a law that
favors the press is constitutionally suspect. (See the dissent of Rehnquist, J. in that case)

Nor is it true that only two exemptions previously granted by E.O. No. 273 are withdrawn "absolutely and unqualifiedly" by
R.A. No. 7716. Other exemptions from the VAT, such as those previously granted to PAL, petroleum concessionaires,
enterprises registered with the Export Processing Zone Authority, and many more are likewise totally withdrawn, in addition
to exemptions which are partially withdrawn, in an effort to broaden the base of the tax.

The PPI says that the discriminatory treatment of the press is highlighted by the fact that transactions, which are profit
oriented, continue to enjoy exemption under R.A. No. 7716. An enumeration of some of these transactions will suffice to
show that by and large this is not so and that the exemptions are granted for a purpose. As the Solicitor General says, such
exemptions are granted, in some cases, to encourage agricultural production and, in other cases, for the personal benefit
of the end-user rather than for profit. The exempt transactions are:

(a) Goods for consumption or use which are in their original state (agricultural, marine and forest
products, cotton seeds in their original state, fertilizers, seeds, seedlings, fingerlings, fish, prawn
livestock and poultry feeds) and goods or services to enhance agriculture (milling of palay, corn, sugar
cane and raw sugar, livestock, poultry feeds, fertilizer, ingredients used for the manufacture of feeds).

(b) Goods used for personal consumption or use (household and personal effects of citizens returning to
the Philippines) or for professional use, like professional instruments and implements, by persons coming
to the Philippines to settle here.

(c) Goods subject to excise tax such as petroleum products or to be used for manufacture of petroleum
products subject to excise tax and services subject to percentage tax.
 (d) Educational services, medical, dental, hospital and veterinary services, and services rendered under
employer-employee relationship.

(e) Works of art and similar creations sold by the artist himself.

(f) Transactions exempted under special laws, or international agreements.

(g) Export-sales by persons not VAT-registered.

(h) Goods or services with gross annual sale or receipt not exceeding P500,000.00.

(Respondents' Consolidated Comment on the Motions for Reconsideration, pp. 58-60)

The PPI asserts that it does not really matter that the law does not discriminate against the press because "even
nondiscriminatory taxation on constitutionally guaranteed freedom is unconstitutional." PPI cites in support of this assertion
the following statement in Murdock v. Pennsylvania, 319 U.S. 105, 87 L. Ed. 1292 (1943):

The fact that the ordinance is "nondiscriminatory" is immaterial. The protection afforded by the First
Amendment is not so restricted. A license tax certainly does not acquire constitutional validity because it
classifies the privileges protected by the First Amendment along with the wares and merchandise of
hucksters and peddlers and treats them all alike. Such equality in treatment does not save the ordinance.
Freedom of press, freedom of speech, freedom of religion are in preferred position.

The Court was speaking in that case of a license tax, which, unlike an ordinary tax, is mainly for regulation. Its imposition
on the press is unconstitutional because it lays a prior restraint on the exercise of its right. Hence, although its application
to others, such those selling goods, is valid, its application to the press or to religious groups, such as the Jehovah's
Witnesses, in connection with the latter's sale of religious books and pamphlets, is unconstitutional. As the U.S. Supreme
Court put it, "it is one thing to impose a tax on income or property of a preacher. It is quite another thing to exact a tax on
him for delivering a sermon."

A similar ruling was made by this Court in American Bible Society v. City of Manila, 101 Phil. 386 (1957) which invalidated a
city ordinance requiring a business license fee on those engaged in the sale of general merchandise. It was held that the tax
could not be imposed on the sale of bibles by the American Bible Society without restraining the free exercise of its right to
propagate.

The VAT is, however, different. It is not a license tax. It is not a tax on the exercise of a privilege, much less a
constitutional right. It is imposed on the sale, barter, lease or exchange of goods or properties or the sale or exchange of
services and the lease of properties purely for revenue purposes. To subject the press to its payment is not to burden the
exercise of its right any more than to make the press pay income tax or subject it to general regulation is not to violate its
freedom under the Constitution.

Additionally, the Philippine Bible Society, Inc. claims that although it sells bibles, the proceeds derived from the sales are
used to subsidize the cost of printing copies which are given free to those who cannot afford to pay so that to tax the sales
would be to increase the price, while reducing the volume of sale. Granting that to be the case, the resulting burden on the
exercise of religious freedom is so incidental as to make it difficult to differentiate it from any other economic imposition
that might make the right to disseminate religious doctrines costly. Otherwise, to follow the petitioner's argument, to
increase the tax on the sale of vestments would be to lay an impermissible burden on the right of the preacher to make a
sermon.

On the other hand the registration fee of P1,000.00 imposed by 107 of the NIRC, as amended by 7 of R.A. No. 7716,
although fixed in amount, is really just to pay for the expenses of registration and enforcement of provisions such as those
relating to accounting in 108 of the NIRC. That the PBS distributes free bibles and therefore is not liable to pay the VAT
does not excuse it from the payment of this fee because it also sells some copies. At any rate whether the PBS is liable for
the VAT must be decided in concrete cases, in the event it is assessed this tax by the Commissioner of Internal Revenue.

VII. Alleged violations of the due process, equal protection and contract clauses and the rule on taxation. CREBA asserts
that R.A. No. 7716 (1) impairs the obligations of contracts, (2) classifies transactions as covered or exempt without
reasonable basis and (3) violates the rule that taxes should be uniform and equitable and that Congress shall "evolve a
progressive system of taxation."
With respect to the first contention, it is claimed that the application of the tax to existing contracts of the sale of real
property by installment or on deferred payment basis would result in substantial increases in the monthly amortizations to
be paid because of the 10% VAT. The additional amount, it is pointed out, is something that the buyer did not anticipate at
the time he entered into the contract.

The short answer to this is the one given by this Court in an early case: "Authorities from numerous sources are cited by the
plaintiffs, but none of them show that a lawful tax on a new subject, or an increased tax on an old one, interferes with a
contract or impairs its obligation, within the meaning of the Constitution. Even though such taxation may affect particular
contracts, as it may increase the debt of one person and lessen the security of another, or may impose additional burdens
upon one class and release the burdens of another, still the tax must be paid unless prohibited by the Constitution, nor can
it be said that it impairs the obligation of any existing contract in its true legal sense." (La Insular v. Machuca Go-Tauco and
Nubla Co-Siong, 39 Phil. 567, 574 (1919)). Indeed not only existing laws but also "the reservation of the essential attributes
of sovereignty, is . . . read into contracts as a postulate of the legal order." (Philippine-American Life Ins. Co. v. Auditor
General, 22 SCRA 135, 147 (1968)) Contracts must be understood as having been made in reference to the possible exercise
of the rightful authority of the government and no obligation of contract can extend to the defeat of that authority.
(Norman v. Baltimore and Ohio R.R., 79 L. Ed. 885 (1935)).

It is next pointed out that while 4 of R.A. No. 7716 exempts such transactions as the sale of agricultural products, food
items, petroleum, and medical and veterinary services, it grants no exemption on the sale of real property which is equally
essential. The sale of real property for socialized and low-cost housing is exempted from the tax, but CREBA claims that
real estate transactions of "the less poor," i.e., the middle class, who are equally homeless, should likewise be exempted.

The sale of food items, petroleum, medical and veterinary services, etc., which are essential goods and services was
already exempt under 103, pars. (b) (d) (1) of the NIRC before the enactment of R.A. No. 7716. Petitioner is in error in
claiming that R.A. No. 7716 granted exemption to these transactions, while subjecting those of petitioner to the payment
of the VAT. Moreover, there is a difference between the "homeless poor" and the "homeless less poor" in the example given
by petitioner, because the second group or middle class can afford to rent houses in the meantime that they cannot yet buy
their own homes. The two social classes are thus differently situated in life. "It is inherent in the power to tax that the
State be free to select the subjects of taxation, and it has been repeatedly held that 'inequalities which result from a
singling out of one particular class for taxation, or exemption infringe no constitutional limitation.'" (Lutz v. Araneta, 98
Phil. 148, 153 (1955). Accord, City of Baguio v. De Leon, 134 Phil. 912 (1968); Sison, Jr. v. Ancheta, 130 SCRA 654, 663
(1984); Kapatiran ng mga Naglilingkod sa Pamahalaan ng Pilipinas, Inc. v. Tan, 163 SCRA 371 (1988)).

Finally, it is contended, for the reasons already noted, that R.A. No. 7716 also violates Art. VI, 28(1) which provides that
"The rule of taxation shall be uniform and equitable. The Congress shall evolve a progressive system of taxation."

Equality and uniformity of taxation means that all taxable articles or kinds of property of the same class be taxed at the
same rate. The taxing power has the authority to make reasonable and natural classifications for purposes of taxation. To
satisfy this requirement it is enough that the statute or ordinance applies equally to all persons, forms and corporations
placed in similar situation. (City of Baguio v. De Leon, supra; Sison, Jr. v. Ancheta, supra)

Indeed, the VAT was already provided in E.O. No. 273 long before R.A. No. 7716 was enacted. R.A. No. 7716 merely expands
the base of the tax. The validity of the original VAT Law was questioned in Kapatiran ng Naglilingkod sa Pamahalaan ng
Pilipinas, Inc. v. Tan, 163 SCRA 383 (1988) on grounds similar to those made in these cases, namely, that the law was
"oppressive, discriminatory, unjust and regressive in violation of Art. VI, 28(1) of the Constitution." (At 382) Rejecting the
challenge to the law, this Court held:

As the Court sees it, EO 273 satisfies all the requirements of a valid tax. It is uniform. . . .

The sales tax adopted in EO 273 is applied similarly on all goods and services sold to the public, which are
not exempt, at the constant rate of 0% or 10%.

The disputed sales tax is also equitable. It is imposed only on sales of goods or services by persons
engaged in business with an aggregate gross annual sales exceeding P200,000.00. Small corner sari-sari
stores are consequently exempt from its application. Likewise exempt from the tax are sales of farm and
marine products, so that the costs of basic food and other necessities, spared as they are from the
incidence of the VAT, are expected to be relatively lower and within the reach of the general public.

(At 382-383)
The CREBA claims that the VAT is regressive. A similar claim is made by the Cooperative Union of the Philippines, Inc. (CUP),
while petitioner Juan T. David argues that the law contravenes the mandate of Congress to provide for a progressive system
of taxation because the law imposes a flat rate of 10% and thus places the tax burden on all taxpayers without regard to
their ability to pay.

The Constitution does not really prohibit the imposition of indirect taxes which, like the VAT, are regressive. What it simply
provides is that Congress shall "evolve a progressive system of taxation." The constitutional provision has been interpreted
to mean simply that "direct taxes are . . . to be preferred [and] as much as possible, indirect taxes should be minimized."
(E. FERNANDO, THE CONSTITUTION OF THE PHILIPPINES 221 (Second ed. (1977)). Indeed, the mandate to Congress is not
to prescribe, but to evolve, a progressive tax system. Otherwise, sales taxes, which perhaps are the oldest form of indirect
taxes, would have been prohibited with the proclamation of Art. VIII, 17(1) of the 1973 Constitution from which the
present Art. VI, 28(1) was taken. Sales taxes are also regressive.

Resort to indirect taxes should be minimized but not avoided entirely because it is difficult, if not impossible, to avoid
them by imposing such taxes according to the taxpayers' ability to pay. In the case of the VAT, the law minimizes the
regressive effects of this imposition by providing for zero rating of certain transactions (R.A. No. 7716, 3, amending 102
(b) of the NIRC), while granting exemptions to other transactions. (R.A. No. 7716, 4, amending 103 of the NIRC).

Thus, the following transactions involving basic and essential goods and services are exempted from the VAT:

(a) Goods for consumption or use which are in their original state (agricultural, marine and forest
products, cotton seeds in their original state, fertilizers, seeds, seedlings, fingerlings, fish, prawn
livestock and poultry feeds) and goods or services to enhance agriculture (milling of palay, corn sugar
cane and raw sugar, livestock, poultry feeds, fertilizer, ingredients used for the manufacture of feeds).

(b) Goods used for personal consumption or use (household and personal effects of citizens returning to
the Philippines) and or professional use, like professional instruments and implements, by persons coming
to the Philippines to settle here.

(c) Goods subject to excise tax such as petroleum products or to be used for manufacture of petroleum
products subject to excise tax and services subject to percentage tax.

(d) Educational services, medical, dental, hospital and veterinary services, and services rendered under
employer-employee relationship.

(e) Works of art and similar creations sold by the artist himself.

(f) Transactions exempted under special laws, or international agreements.

(g) Export-sales by persons not VAT-registered.

(h) Goods or services with gross annual sale or receipt not exceeding P500,000.00.

(Respondents' Consolidated Comment on the Motions for Reconsideration, pp. 58-60)

On the other hand, the transactions which are subject to the VAT are those which involve goods and services which are used
or availed of mainly by higher income groups. These include real properties held primarily for sale to customers or for lease
in the ordinary course of trade or business, the right or privilege to use patent, copyright, and other similar property or
right, the right or privilege to use industrial, commercial or scientific equipment, motion picture films, tapes and discs,
radio, television, satellite transmission and cable television time, hotels, restaurants and similar places, securities, lending
investments, taxicabs, utility cars for rent, tourist buses, and other common carriers, services of franchise grantees of
telephone and telegraph.

The problem with CREBA's petition is that it presents broad claims of constitutional violations by tendering issues not at
retail but at wholesale and in the abstract. There is no fully developed record which can impart to adjudication the impact
of actuality. There is no factual foundation to show in the concrete the application of the law to actual contracts and
exemplify its effect on property rights. For the fact is that petitioner's members have not even been assessed the VAT.
Petitioner's case is not made concrete by a series of hypothetical questions asked which are no different from those dealt
with in advisory opinions.
 The difficulty confronting petitioner is thus apparent. He alleges arbitrariness. A mere allegation, as here,
does not suffice. There must be a factual foundation of such unconstitutional taint. Considering that
petitioner here would condemn such a provision as void on its face, he has not made out a case. This is
merely to adhere to the authoritative doctrine that where the due process and equal protection clauses
are invoked, considering that they are not fixed rules but rather broad standards, there is a need for
proof of such persuasive character as would lead to such a conclusion. Absent such a showing, the
presumption of validity must prevail.

(Sison, Jr. v. Ancheta, 130 SCRA at 661)

Adjudication of these broad claims must await the development of a concrete case. It may be that postponement of
adjudication would result in a multiplicity of suits. This need not be the case, however. Enforcement of the law may give
rise to such a case. A test case, provided it is an actual case and not an abstract or hypothetical one, may thus be
presented.

Nor is hardship to taxpayers alone an adequate justification for adjudicating abstract issues. Otherwise, adjudication would
be no different from the giving of advisory opinion that does not really settle legal issues.

We are told that it is our duty under Art. VIII, 1, 2 to decide whenever a claim is made that "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."
This duty can only arise if an actual case or controversy is before us. Under Art . VIII, 5 our jurisdiction is defined in terms
of "cases" and all that Art. VIII, 1, 2 can plausibly mean is that in the exercise of that jurisdiction we have the judicial
power to determine questions of grave abuse of discretion by any branch or instrumentality of the government.

Put in another way, what is granted in Art. VIII, 1, 2 is "judicial power," which is "the power of a court to hear and decide
cases pending between parties who have the right to sue and be sued in the courts of law and equity" (Lamb v. Phipps, 22
Phil. 456, 559 (1912)), as distinguished from legislative and executive power. This power cannot be directly appropriated
until it is apportioned among several courts either by the Constitution, as in the case of Art. VIII, 5, or by statute, as in the
case of the Judiciary Act of 1948 (R.A. No. 296) and the Judiciary Reorganization Act of 1980 (B.P. Blg. 129). The power thus
apportioned constitutes the court's "jurisdiction," defined as "the power conferred by law upon a court or judge to take
cognizance of a case, to the exclusion of all others." (United States v. Arceo, 6 Phil. 29 (1906)) Without an actual case
coming within its jurisdiction, this Court cannot inquire into any allegation of grave abuse of discretion by the other
departments of the government.

VIII. Alleged violation of policy towards cooperatives. On the other hand, the Cooperative Union of the Philippines (CUP),
after briefly surveying the course of legislation, argues that it was to adopt a definite policy of granting tax exemption to
cooperatives that the present Constitution embodies provisions on cooperatives. To subject cooperatives to the VAT would
therefore be to infringe a constitutional policy. Petitioner claims that in 1973, P.D. No. 175 was promulgated exempting
cooperatives from the payment of income taxes and sales taxes but in 1984, because of the crisis which menaced the
national economy, this exemption was withdrawn by P.D. No. 1955; that in 1986, P.D. No. 2008 again granted cooperatives
exemption from income and sales taxes until December 31, 1991, but, in the same year, E.O. No. 93 revoked the
exemption; and that finally in 1987 the framers of the Constitution "repudiated the previous actions of the government
adverse to the interests of the cooperatives, that is, the repeated revocation of the tax exemption to cooperatives and
instead upheld the policy of strengthening the cooperatives by way of the grant of tax exemptions," by providing the
following in Art. XII:

1. The goals of the national economy are a more equitable distribution of opportunities, income, and
wealth; a sustained increase in the amount of goods and services produced by the nation for the benefit
of the people; and an expanding productivity as the key to raising the quality of life for all, especially the
underprivileged.

The State shall promote industrialization and full employment based on sound agricultural development
and agrarian reform, through industries that make full and efficient use of human and natural resources,
and which are competitive in both domestic and foreign markets. However, the State shall protect Filipino
enterprises against unfair foreign competition and trade practices.

In the pursuit of these goals, all sectors of the economy and all regions of the country shall be given
optimum opportunity to develop. Private enterprises, including corporations, cooperatives, and similar
collective organizations, shall be encouraged to broaden the base of their ownership.
 15. The Congress shall create an agency to promote the viability and growth of cooperatives as
instruments for social justice and economic development.

Petitioner's contention has no merit. In the first place, it is not true that P.D. No. 1955 singled out cooperatives by
withdrawing their exemption from income and sales taxes under P.D. No. 175, 5. What P.D. No. 1955, 1 did was to
withdraw the exemptions and preferential treatments theretofore granted to private business enterprises in general, in
view of the economic crisis which then beset the nation. It is true that after P.D. No. 2008, 2 had restored the tax
exemptions of cooperatives in 1986, the exemption was again repealed by E.O. No. 93, 1, but then again cooperatives
were not the only ones whose exemptions were withdrawn. The withdrawal of tax incentives applied to all, including
government and private entities. In the second place, the Constitution does not really require that cooperatives be granted
tax exemptions in order to promote their growth and viability. Hence, there is no basis for petitioner's assertion that the
government's policy toward cooperatives had been one of vacillation, as far as the grant of tax privileges was concerned,
and that it was to put an end to this indecision that the constitutional provisions cited were adopted. Perhaps as a matter
of policy cooperatives should be granted tax exemptions, but that is left to the discretion of Congress. If Congress does not
grant exemption and there is no discrimination to cooperatives, no violation of any constitutional policy can be charged.

Indeed, petitioner's theory amounts to saying that under the Constitution cooperatives are exempt from taxation. Such
theory is contrary to the Constitution under which only the following are exempt from taxation: charitable institutions,
churches and parsonages, by reason of Art. VI, 28 (3), and non-stock, non-profit educational institutions by reason of Art.
XIV, 4 (3).

CUP's further ground for seeking the invalidation of R.A. No. 7716 is that it denies cooperatives the equal protection of the
law because electric cooperatives are exempted from the VAT. The classification between electric and other cooperatives
(farmers cooperatives, producers cooperatives, marketing cooperatives, etc.) apparently rests on a congressional
determination that there is greater need to provide cheaper electric power to as many people as possible, especially those
living in the rural areas, than there is to provide them with other necessities in life. We cannot say that such classification
is unreasonable.

We have carefully read the various arguments raised against the constitutional validity of R.A. No. 7716. We have in fact
taken the extraordinary step of enjoining its enforcement pending resolution of these cases. We have now come to the
conclusion that the law suffers from none of the infirmities attributed to it by petitioners and that its enactment by the
other branches of the government does not constitute a grave abuse of discretion. Any question as to its necessity,
desirability or expediency must be addressed to Congress as the body which is electorally responsible, remembering that,
as Justice Holmes has said, "legislators are the ultimate guardians of the liberties and welfare of the people in quite as
great a degree as are the courts." (Missouri, Kansas & Texas Ry. Co. v. May, 194 U.S. 267, 270, 48 L. Ed. 971, 973 (1904)). It
is not right, as petitioner in G.R. No. 115543 does in arguing that we should enforce the public accountability of legislators,
that those who took part in passing the law in question by voting for it in Congress should later thrust to the courts the
burden of reviewing measures in the flush of enactment. This Court does not sit as a third branch of the legislature, much
less exercise a veto power over legislation.

WHEREFORE, the motions for reconsideration are denied with finality and the temporary restraining order previously issued
is hereby lifted.

SO ORDERED.

Narvasa, C.J., Feliciano, Melo, Kapunan, Francisco and Hermosisima, Jr., JJ., concur.

Padilla and Vitug, JJ., maintained their separate opinion.

Regalado, Davide, Jr., Romero, Bellosillo and Puno, JJ, maintained their dissenting opinion.

Panganiban, J., took no part.

 [G.R. No. L-5606. August 28, 1952.]

SIMPLICIO PENDON, Petitioner-Appellant, v. JULITO DIASNES, Respondent-Appellee.

G. D. Demaisip, F. Hortillas and C. D. Dolar for Appellant.

Golez & Del Rosario for Appellee.

SYLLABUS

1. ELECTION LAW; RIGHT TO VOTE AND TO HOLD ELECTIVE OFFICE; REPUBLIC ACT NO. 108, SECTION 99 AS AMENDED BY
REPUBLIC ACT NO. 599. Construing together paragraphs a and b of section 99 of Republic Act No. 180 as amended by
Republic Act No. 599, they should read thus: Absolute pardon for any crime for which one year of imprisonment or more was
meted out restores the prisoner to his political rights. Where the penalty in less than one year, disqualification does not
attach, except when the crime committed is one against property, in which case the prisoner has to have a pardon, as in
the cases provided in paragraph a if he is to be allowed to vote. For illustrations: (1) A was prosecuted for physical injuries
and condemned to suffer 10 months imprisonment. Though not pardoned, he is not, under paragraph a, disqualified. (2) B
was prosecuted for theft and sentenced to imprisonment for 10 months. Under paragraph b he may not vote unless he is
pardoned. (3) C was prosecuted and sentenced to four years for physical injuries or estafa. C has to be pardoned if he is to
exercise the right of suffrage. This is the class of cases envisaged by paragraph a; the nature of the crime is immaterial.

2. EVIDENCE; SECONDARY EVIDENCE; APPEAL ON QUESTIONS OF LAW ONLY. The appellant having elevated the case to the
Supreme Court for review on the express statement that only questions of law would be raised, the findings of the trial
court on the admissibility and competency of secondary evidence presented are conclusive as far as the Supreme Court is
concerned.

DECISION

TUASON, J.:

This is an appeal by the plaintiff in a quo warranto proceeding instituted in the Court of First Instance of Iloilo. The
petitioner sought to have the defendant, who had been elected municipal mayor of Dumangas, Iloilo, in the general
election of November 13, 1951, declared ineligible to that office by reason of a previous conviction for a criminal offense.

It is admitted that Julito Diasnes, the defendant, was found guilty of estafa and sentenced to one year and one day of
imprisonment by the Court of First Instance of Iloilo in 1932, a sentence which was fully extinguished partly in the
provincial jail of Iloilo and partly in Bilibid Prison, the prisoner having been released on September 25, 1933. But the
defendant alleged that he had been granted absolute pardon by the Governor General sometime in 1934.

Only oral evidence was presented to prove the alleged pardon, as copies of it, as well as the original, were said to have
been unavailable, and the question on which the appellant devotes much space in his brief deals with the admissibility and
sufficiency of this evidence.

To prove the unavailability of any copy of the pardon, the defendant introduced (1) deposition (Exhibit "6") of Atty.
Honorato B. Masakayan, Executive Officer and Secretary of the Board of Pardon and Parole, who declared that all the
records of his office had been destroyed in the last war; (2) deposition (Exhibit "7") of Emilio Punzal, Chief of the Records
Division of the Office of the President who tesfified to the same effect with reference to the records of the office; (3)
deposition (Exhibit "U") of Jose M. Abrigo, Identification Clerk and Custodian of the Records of the Bureau of Prisons, taken
in behalf of the appellant himself, stating that there was no record of the plaintiffs pardon in that bureau but that when
pardon was granted after the release of the prisoner copy thereof was not always furnished to the prison authorities; (4)
certificate and testimony by the Clerk of Court of Iloilo to the effect that all pre-war records of his office had been
destroyed; (5) certificate by the Director of Civil Service stating that there was no record of Diasnes pardon in his office
and that some of the records of said office "were lost or destroyed during the last Pacific War." Regarding the original, the
defendant testified that it was burned along with his house when the dwelling was set on fire by the Japanese during the
occupation.

All these proofs, including the certificates, were admissible in evidence and competent, and constitute sufficient
foundation for the introduction of secondary evidence of the nature and contents of the pardon. Such nature and contents
were testified to by the defendant and other witnesses who claimed to have seen or helped procure the pardon, and found
by the trial court to be as averred in the answer.

These findings are conclusive as far as this court is concerned, the appellant having elevated the case to the Supreme Court
for review on the express statement that only questions of law would be raised. What is more, if we are to believe, as the
court below believed, that executive clemency was extended to the defendant, the pardon could not have been other than
plenary and absolute, considering the purpose for which it was issued, namely: to enable the beneficiary to exercise the
right of suffrage.

The other contention is "that the court below erred in not holding that pardon does not remove the incapacity or
disqualifications as a voter in matters of convictions of crime against property," (14th assignment of error). This question
stemned from the apparent ambiguity of section 99 of Republic Act No. 180 as amended by Republic Act No. 599, which
provides:jgc:chanrobles.com.ph

"The following persons shall not be qualified to vote:jgc:chanrobles.com.ph

"(a) Any person who has been sentenced by final judgment to suffer one year or more of imprisonment, such disability not
having been removed by plenary pardon.

"(b) Any person who has been declared by final judgment guilty of any crime against property.

"(c) Any person who has violated his allegiance to the Republic of the Philippines.

"(d) Insane or feeble-minded persons.

"(e) Person who can not prepare their ballots themselves."cralaw virtua1aw library

The same problem was posed in the case of Cristobal v. Labrador, 71 Phil., 34, arising from substantially the same facts as
those in the present case: prior conviction for estafa and pardon after service of the penalty.

In that case this court held that "An absolute pardon not only blots out the crime committed, but removes all disabilities
resulting from the conviction," and that, "when granted after the term of imprisonment has expired, absolute pardon
removes all that is left of the consequences of conviction." Commenting upon "the suggestion that the disqualification
imposed in paragraph (b) of section 94 of Commonwealth Act No. 357 [now paragraph (b) of section 99 of Republic Act No.
180 as amended], does not fall within the purview of the pardoning power of the Chief Executive," the court noted that this
"would lead to the impairment of the pardoning power of the Chief Executive, not contemplated in the Constitution, and
will lead furthermore to the result that there will be no way of restoring the political privilege in the case of this nature
except through legislative action."cralaw virtua1aw library

The contention in the above-cited case assumed, and the Court seemed to have taken for granted, perhaps for the sake of
argument, that paragraph (b) intended to disqualify from voting any person who has been convicted of any crime.

As a matter of fact, that, in our opinion, is not the legislative intent. Actually there is no conflict between paragraphs (a)
and (b), and paragraph (b) in no way encroaches upon the pardoning power of the Chief Executive.

Paragraph (b) must be construed in conjunction with paragraph (a). Thus construed, it modifies that part of paragraph (a)
which refers to sentences for less than a year and not that which refers to the nature of the crime committed. Paragraph
(a) is comprehensive, making no distinction between crimes against property and other classes of crimes. By the terms of
this clause (paragraph [a]), all persons convicted of crime of whatever nature and sentenced to one year or more are
disqualified to vote. But it makes two exceptions each of which is independent of the other, to wit: (1) when the penalty
imposed is less than one year and (2) when pardon is granted. Paragraph (b) qualifies or further limits the first exceptions
but not the second. It creates an exception to the exception of paragraph (a) that persons sentenced to less than one year
may vote. It is not meant to say that conviction for a crime against property bars the convict from voting irrespective of the
penalty and irrespective of whether or not pardon has been granted. Construing paragraphs (a) and (b) together, as stated,
they should read thus: Absolute pardon for any crime for which one year of imprisonment or more was meted out restores
the prisoner to his political rights. Where the penalty is less than one year, disqualification does not attach, except when
the crime committed is one against property, in which case, the prisoner has to have a pardon, as in the cases provided in
paragraph (a), if he is to be allowed to vote. For illustrations: (1) A was prosecuted for physical injuries and condemned to
suffer 10 months imprisonment. Though not pardoned, he is not, under paragraph (a), disqualified. (2) B was prosecuted for
theft and sentenced to imprisonment for 10 months. Under paragrap (b) he may not vote unless he is pardoned. (3) C was
prosecuted and sentenced to four years for physical injuries or estafa. C has to be pardoned if he is to exercise the right of
suffrage. This is the class of cases envisaged by paragraph (a); the nature of the crime is immaterial.

Carried to its logical conclusion, the appellants interpretation of section 99 of Republic Act No. 180 as amended would lead
to absurd consequences. Under this interpretation, the right to vote of a person who has been sentenced to one month for
stealing one peso is beyond restoration by the Chief Executive, while one who has been found guilty of the most heinous
crime in the statute book and sentenced to death could recover his political rights through executive clemency.

But, it would be asked, why should paragraph (b) discriminate against crimes against property? And why should it confine
itself to crimes punishable with less than one year imprisonment?

The answer is that major crimes always involve a high degree of moral turpitude. When it comes to lesser crimes, or rather
crimes punishable with lighter penalty, the concept is reversed. Petty thefts and petty deceits and embezzlement always
involve dishonesty and are reprehensible, while assaults and battery, calumnies, violations of municipal ordinance and
traffic regulations, are, more likely than not, the products of violent passion or emotion, negligence or ignorance of law.
It is argued that "had the law intended to extend the effects of plenary pardon to those kinds of persons, the law would
have so stated." As has been seen, paragraph (a) is all-embracing and it would be more logical to say that if the Congress
had intended to exclude crimes against property from the benefits of a plenary pardon, it would have said so directly and
explicitly in the same paragraph.

The appealed judgment of the lower court is, therefore, affirmed with costs against the Appellant.

Paras, C.J., Pablo, Bengzon, Padilla, Montemayor, Bautista Angelo and Labrador, JJ., concur.