Republic of the Philippines

SUPREME COURT
Manila
SECOND DIVISION
G.R. No. L-69809 October 16, 1986
EDGARDO A. GAANAN, petitioner,
vs.
INTERMEDIATE APPELLATE COURT and PEOPLE OF THE PHILIPPINES, respondents.
GUTIERREZ, JR., J.:
This petition for certiorari asks for an interpretation of Republic Act (RA) No. 4200, otherwise
known as the Anti-Wiretapping Act, on the issue of whether or not an extension telephone is
among the prohibited devices in Section 1 of the Act, such that its use to overhear a private
conversation would constitute unlawful interception of communications between the two
parties using a telephone line.
The facts presented by the People and narrated in the respondent court's decision are not
disputed by the petitioner.
In the morning of October 22, 1975, complainant Atty. Tito Pintor and his client
Manuel Montebon were in the living room of complainant's residence discussing the
terms for the withdrawal of the complaint for direct assault which they filed with the
Office of the City Fiscal of Cebu against Leonardo Laconico. After they had decided
on the proposed conditions, complainant made a telephone call to Laconico (tsn,
August 26, 1981, pp. 3-5).
That same morning, Laconico telephoned appellant, who is a lawyer, to come to his
office and advise him on the settlement of the direct assault case because his
regular lawyer, Atty. Leon Gonzaga, went on a business trip. According to the
request, appellant went to the office of Laconico where he was briefed about the
problem. (Exhibit 'D', tsn, April 22, 1982, pp. 4-5).
When complainant called up, Laconico requested appellant to secretly listen to the
telephone conversation through a telephone extension so as to hear personally the
proposed conditions for the settlement. Appellant heard complainant enumerate the
following conditions for withdrawal of the complaint for direct assault.
(a) the P5,000.00 was no longer acceptable, and that the figure had been increased
to P8,000.00. A breakdown of the P8,000.00 had been made together with other
demands, to wit: (a) P5,000.00 no longer for the teacher Manuel Montebon, but for
Atty. Pintor himself in persuading his client to withdraw the case for Direct Assault
against Atty. Laconico before the Cebu City Fiscal's Office;
(b) Public apology to be made by Atty. Laconico before the students of Don Bosco
Technical High School;
(c) Pl,000.00 to be given to the Don Bosco Faculty club;
(d) transfer of son of Atty. Laconico to another school or another section of Don
Bosco Technical High School;

(e) Affidavit of desistance by Atty. Laconico on the Maltreatment case earlier filed
against Manuel Montebon at the Cebu City Fiscal's Office, whereas Montebon's
affidavit of desistance on the Direct Assault Case against Atty. Laconico to be filed
later;
(f) Allow Manuel Montebon to continue teaching at the Don Bosco Technical School;
(g) Not to divulge the truth about the settlement of the Direct Assault Case to the
mass media;
(h) P2,000.00 attorney s fees for Atty. Pintor. (tsn, August 26, 1981, pp. 47-48).
Twenty minutes later, complainant called up again to ask Laconico if he was
agreeable to the conditions. Laconico answered 'Yes'. Complainant then told
Laconico to wait for instructions on where to deliver the money. (tsn, March 10,
1983, pp. 2-12).
Complainant called up again and instructed Laconico to give the money to his wife
at the office of the then Department of Public Highways. Laconico who earlier
alerted his friend Colonel Zulueta of the Criminal Investigation Service of the
Philippine Constabulary, insisted that complainant himself should receive the money.
(tsn, March 10, 1982, pp. 26-33). When he received the money at the Igloo
Restaurant, complainant was arrested by agents of the Philippine Constabulary.
Appellant executed on the following day an affidavit stating that he heard
complainant demand P8,000.00 for the withdrawal of the case for direct assault.
Laconico attached the affidavit of appellant to the complainant for robbery/extortion
which he filed against complainant. Since appellant listened to the telephone
conversation without complainant's consent, complainant charged appellant and
Laconico with violation of the Anti-Wiretapping Act.
After trial on the merits, the lower court, in a decision dated November 22, 1982, found both
Gaanan and Laconico guilty of violating Section 1 of Republic Act No. 4200. The two were
each sentenced to one (1) year imprisonment with costs. Not satisfied with the decision, the
petitioner appealed to the appellate court.
On August 16, 1984, the Intermediate Appellate Court affirmed the decision of the trial court,
holding that the communication between the complainant and accused Laconico was private
in nature and, therefore, covered by Rep. Act No. 4200; that the petitioner overheard such
communication without the knowledge and consent of the complainant; and that the extension
telephone which was used by the petitioner to overhear the telephone conversation between
complainant and Laconico is covered in the term "device' as provided in Rep. Act No. 4200.
In this petition for certiorari, the petitioner assails the decision of the appellate court and raises
the following issues; (a) whether or not the telephone conversation between the complainant
and accused Laconico was private in nature; (b) whether or not an extension telephone is
covered by the term "device or arrangement" under Rep. Act No. 4200; (c) whether or not the
petitioner had authority to listen or overhear said telephone conversation and (d) whether or
not Rep. Act No. 4200 is ambiguous and, therefore, should be construed in favor of the
petitioner.
Section 1 of Rep. Act No. 4200 provides:
Section 1. It shall be unlawful for any person, not being authorized by all the parties
to any private communication or spoken word, to tap any wire or cable or by using
any other device or arrangement, to secretly overhear, intercept, or record such
communication or spoken word by using a device commonly known as a dictaphone

or dictagraph or detectaphone or walkie-talkie or tape-recorder, or however

otherwise described:
It shall be unlawful for any person, be he a participant or not in the act or acts
penalized in the next preceeding sentence, to knowingly possess any tape record,
wire record, disc record, or any other such record, or copies thereof, of any
communication or spoken word secured either before or after the effective date of
this Act in the manner prohibited by this law; or to replay the same for any other
person or persons; or to communicate the contents thereof, either verbally or in
writing, or to furnish transcriptions thereof, whether complete or partial, to any other
person: Provided, that the use of such record or any copies thereof as evidence in
any civil, criminal investigation or trial of offenses mentioned in Section 3 hereof,
shall not be covered by this prohibition.
We rule for the petitioner.
We are confronted in this case with the interpretation of a penal statute and not a rule of
evidence. The issue is not the admissibility of evidence secured over an extension line of a
telephone by a third party. The issue is whether or not the person called over the telephone
and his lawyer listening to the conversation on an extension line should both face prison
sentences simply because the extension was used to enable them to both listen to an alleged
attempt at extortion.
There is no question that the telephone conversation between complainant Atty. Pintor and
accused Atty. Laconico was "private" in the sense that the words uttered were made between
one person and another as distinguished from words between a speaker and a public. It is
also undisputed that only one of the parties gave the petitioner the authority to listen to and
overhear the caller's message with the use of an extension telephone line. Obviously,
complainant Pintor, a member of the Philippine bar, would not have discussed the alleged
demand for an P8,000.00 consideration in order to have his client withdraw a direct assault
charge against Atty. Laconico filed with the Cebu City Fiscal's Office if he knew that another
lawyer was also listening. We have to consider, however, that affirmance of the criminal
conviction would, in effect, mean that a caller by merely using a telephone line can force the
listener to secrecy no matter how obscene, criminal, or annoying the call may be. It would be
the word of the caller against the listener's.
Because of technical problems caused by the sensitive nature of electronic equipment and the
extra heavy loads which telephone cables are made to carry in certain areas, telephone users
often encounter what are called "crossed lines". An unwary citizzen who happens to pick up
his telephone and who overhears the details of a crime might hesitate to inform police
authorities if he knows that he could be accused under Rep. Act 4200 of using his own
telephone to secretly overhear the private communications of the would be criminals. Surely
the law was never intended for such mischievous results.
The main issue in the resolution of this petition, however, revolves around the meaning of the
phrase "any other device or arrangement." Is an extension of a telephone unit such a device
or arrangement as would subject the user to imprisonment ranging from six months to six
years with the accessory penalty of perpetual absolute disqualification for a public officer or
deportation for an alien? Private secretaries with extension lines to their bosses' telephones
are sometimes asked to use answering or recording devices to record business conversations
between a boss and another businessman. Would transcribing a recorded message for the

use of the boss be a proscribed offense? or for that matter, would a "party line" be a device or
arrangement under the law?
The petitioner contends that telephones or extension telephones are not included in the
enumeration of "commonly known" listening or recording devices, nor do they belong to the
same class of enumerated electronic devices contemplated by law. He maintains that in 1964,
when Senate Bill No. 9 (later Rep. Act No. 4200) was being considered in the Senate,
telephones and extension telephones were already widely used instruments, probably the
most popularly known communication device.
Whether or not listening over a telephone party line would be punishable was discussed on
the floor of the Senate. Yet, when the bill was finalized into a statute, no mention was made of
telephones in the enumeration of devices "commonly known as a dictaphone or dictagraph,
detectaphone or walkie talkie or tape recorder or however otherwise described." The omission
was not a mere oversight. Telephone party lines were intentionally deleted from the provisions
of the Act.
The respondent People argue that an extension telephone is embraced and covered by the
term "device" within the context of the aforementioned law because it is not a part or portion of
a complete set of a telephone apparatus. It is a separate device and distinct set of a movable
apparatus consisting of a wire and a set of telephone receiver not forming part of a main
telephone set which can be detached or removed and can be transferred away from one place
to another and to be plugged or attached to a main telephone line to get the desired
communication corning from the other party or end.
The law refers to a "tap" of a wire or cable or the use of a "device or arrangement" for the
purpose of secretly overhearing, intercepting, or recording the communication. There must be
either a physical interruption through a wiretap or the deliberate installation of a device or
arrangement in order to overhear, intercept, or record the spoken words.
An extension telephone cannot be placed in the same category as a dictaphone, dictagraph or
the other devices enumerated in Section 1 of RA No. 4200 as the use thereof cannot be
considered as "tapping" the wire or cable of a telephone line. The telephone extension in this
case was not installed for that purpose. It just happened to be there for ordinary office use. It
is a rule in statutory construction that in order to determine the true intent of the legislature,
the particular clauses and phrases of the statute 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. (see Commissioner of Customs v. Esso Estandard Eastern, Inc., 66 SCRA
113,120).
In the case of Empire Insurance Com any v. Rufino (90 SCRA 437, 443-444), we ruled:
Likewise, Article 1372 of the Civil Code stipulates that 'however general the terms of
a contract may be, they shall not be understood to comprehend things that are
distinct and cases that are different from those upon which the parties intended to
agree.' Similarly, Article 1374 of the same Code provides that 'the various
stipulations of a contract shall be interpreted together, attributing to the doubtful
ones that sense which may result from all of them taken jointly.
xxx xxx xxx
Consequently, the phrase 'all liabilities or obligations of the decedent' used in
paragraph 5(c) and 7(d) should be then restricted only to those listed in the
Inventory and should not be construed as to comprehend all other obligations of the
decedent. The rule that 'particularization followed by a general expression will

ordinarily be restricted to the former' is based on the fact in human experience that
usually the minds of parties are addressed specially to the particularization, and that
the generalities, though broad enough to comprehend other fields if they stood
alone, are used in contemplation of that upon which the minds of the parties are
centered. (Hoffman v. Eastern Wisconsin R., etc., Co., 134 Wis. 603, 607, 115 NW
383, cited in Francisco, Revised Rules of Court (Evidence), 1973 ed, pp. 180-181).
Hence, the phrase "device or arrangement" in Section 1 of RA No. 4200, although not
exclusive to that enumerated therein, should be construed to comprehend instruments of the
same or similar nature, that is, instruments the use of which would be tantamount to tapping
the main line of a telephone. It refers to instruments whose installation or presence cannot be
presumed by the party or parties being overheard because, by their very nature, they are not
of common usage and their purpose is precisely for tapping, intercepting or recording a
telephone conversation.
An extension telephone is an instrument which is very common especially now when the
extended unit does not have to be connected by wire to the main telephone but can be moved
from place ' to place within a radius of a kilometer or more. A person should safely presume
that the party he is calling at the other end of the line probably has an extension telephone
and he runs the risk of a third party listening as in the case of a party line or a telephone unit
which shares its line with another. As was held in the case of Rathbun v. United States (355,
U.S. 107, 2 L Ed 2d 137-138):
Common experience tells us that a call to a particular telephone number may cause
the bell to ring in more than one ordinarily used instrument. Each party to a
telephone conversation takes the risk that the other party may have an extension
telephone and may allow another to overhear the conversation. When such takes
place there has been no violation of any privacy of which the parties may complain.
Consequently, one element of 605, interception, has not occurred.
In the same case, the Court further ruled that the conduct of the party would differ in no way if
instead of repeating the message he held out his hand-set so that another could hear out of it
and that there is no distinction between that sort of action and permitting an outsider to use an
extension telephone for the same purpose.
Furthermore, it is a general rule that penal statutes must be construed strictly in favor of the
accused. Thus, in case of doubt as in the case at bar, on whether or not an extension
telephone is included in the phrase "device or arrangement", the penal statute must be
construed as not including an extension telephone. In the case of People v. Purisima, 86
SCRA 542, 562, we explained the rationale behind the rule:
American jurisprudence sets down the reason for this rule to be the tenderness of the law of
the rights of individuals; the object is to establish a certain rule by conformity to which mankind
would be safe, and the discretion of the court limited. (United States v. Harris, 177 US 305, 44
L Ed 780, 20 S Ct 609; Braffith v. Virgin Islands (CA3) 26 F2d 646; Caudill v. State, 224 Ind
531, 69 NE2d; Jennings v. Commonwealth, 109 VA 821,63 SE 1080, all cited in 73 Am Jur 2d
452). The purpose is not to enable a guilty person to escape punishment through a
technicality but to provide a precise definition of forbidden acts." (State v. Zazzaro, 20 A 2d
737, quoted in Martin's Handbook on Statutory Construction, Rev. Ed. pp. 183-184).
In the same case of Purisima, we also ruled that on the construction or interpretation of a
legislative measure, the primary rule is to search for and determine the intent and spirit of the
law. A perusal of the Senate Congressional Records will show that not only did our lawmakers

not contemplate the inclusion of an extension telephone as a prohibited device or

arrangement" but of greater importance, they were more concerned with penalizing the act of
recording than the act of merely listening to a telephone conversation.
xxx xxx xxx
Senator Taada. Another possible objection to that is entrapment which is
certainly objectionable. It is made possible by special amendment which
Your Honor may introduce.
Senator Diokno.Your Honor, I would feel that entrapment would be less
possible with the amendment than without it, because with the
amendment the evidence of entrapment would only consist of government
testimony as against the testimony of the defendant. With this
amendment, they would have the right, and the government officials and
the person in fact would have the right to tape record their conversation.
Senator Taada. In case of entrapment, it would be the government.
Senator Diokno. In the same way, under this provision, neither party could
record and, therefore, the court would be limited to saying: "Okay, who is
more credible, the police officers or the defendant?" In these cases, as
experienced lawyers, we know that the Court go with the peace offices.
(Congressional Record, Vol. 111, No. 33, p. 628, March 12, 1964).
xxx xxx xxx
Senator Diokno. The point I have in mind is that under these conditions,
with an agent outside listening in, he could falsify the testimony and there
is no way of checking it. But if you allow him to record or make a recording
in any form of what is happening, then the chances of falsifying the
evidence is not very much.
Senator Taada. Your Honor, this bill is not intended to prevent the
presentation of false testimony. If we could devise a way by which we
could prevent the presentation of false testimony, it would be wonderful.
But what this bill intends to prohibit is the use of tape record and other
electronic devices to intercept private conversations which later on will be
used in court.
(Congressional Record, Vol. III, No. 33, March 12, 1964, p. 629).
It can be readily seen that our lawmakers intended to discourage, through punishment,
persons such as government authorities or representatives of organized groups from installing
devices in order to gather evidence for use in court or to intimidate, blackmail or gain some
unwarranted advantage over the telephone users. Consequently, the mere act of listening, in
order to be punishable must strictly be with the use of the enumerated devices in RA No. 4200
or others of similar nature. We are of the view that an extension telephone is not among such
devices or arrangements.
WHEREFORE, the petition is GRANTED. The decision of the then Intermediate Appellate
Court dated August 16, 1984 is ANNULLED and SET ASIDE. The petitioner is hereby
ACQUITTED of the crime of violation of Rep. Act No. 4200, otherwise known as the AntiWiretapping Act.
SO ORDERED.

Feria (Chairman), Fernan, Alampay and Paras, JJ., concur.

Republic of the Philippines

SUPREME COURT
Manila
G.R. No. L-63915 December 29, 1986
LORENZO M. TAADA, ABRAHAM F. SARMIENTO, and MOVEMENT OF ATTORNEYS
FOR BROTHERHOOD, INTEGRITY AND NATIONALISM, INC. (MABINI), petitioners,
vs.
HON. JUAN C. TUVERA, in his capacity as Executive Assistant to the President, HON.
JOAQUIN VENUS, in his capacity as Deputy Executive Assistant to the President,
MELQUIADES P. DE LA CRUZ, ETC., ET AL., respondents.
RESOLUTION
CRUZ, J.:
Due process was invoked by the petitioners in demanding the disclosure of a number of
presidential decrees which they claimed had not been published as required by law. The
government argued that while publication was necessary as a rule, it was not so when it was
"otherwise provided," as when the decrees themselves declared that they were to become
effective immediately upon their approval. In the decision of this case on April 24, 1985, the
Court affirmed the necessity for the publication of some of these decrees, declaring in the
dispositive portion as follows:
WHEREFORE, the Court hereby orders respondents to publish in the Official Gazette all
unpublished presidential issuances which are of general application, and unless so published,
they shall have no binding force and effect.
The petitioners are now before us again, this time to move for reconsideration/clarification of
that decision. 1 Specifically, they ask the following questions:
1. What is meant by "law of public nature" or "general applicability"?
2. Must a distinction be made between laws of general applicability and laws which are not?
3. What is meant by "publication"?
4. Where is the publication to be made?
5. When is the publication to be made?
Resolving their own doubts, the petitioners suggest that there should be no distinction
between laws of general applicability and those which are not; that publication means
complete publication; and that the publication must be made forthwith in the Official Gazette. 2
In the Comment 3 required of the then Solicitor General, he claimed first that the motion was a
request for an advisory opinion and should therefore be dismissed, and, on the merits, that the
clause "unless it is otherwise provided" in Article 2 of the Civil Code meant that the publication
required therein was not always imperative; that publication, when necessary, did not have to
be made in the Official Gazette; and that in any case the subject decision was concurred in
only by three justices and consequently not binding. This elicited a Reply 4 refuting these

arguments. Came next the February Revolution and the Court required the new Solicitor
General to file a Rejoinder in view of the supervening events, under Rule 3, Section 18, of the
Rules of Court. Responding, he submitted that issuances intended only for the internal
administration of a government agency or for particular persons did not have to be 'Published;
that publication when necessary must be in full and in the Official Gazette; and that, however,
the decision under reconsideration was not binding because it was not supported by eight
members of this Court. 5
The subject of contention is Article 2 of the Civil Code providing as follows:
ART. 2. Laws shall take effect after fifteen days following the completion of their publication in
the Official Gazette, unless it is otherwise provided. This Code shall take effect one year after
such publication.
After a careful study of this provision and of the arguments of the parties, both on the original
petition and on the instant motion, we have come to the conclusion and so hold, that the
clause "unless it is otherwise provided" refers to the date of effectivity and not to the
requirement of publication itself, which cannot in any event be omitted. This clause does not
mean that the legislature may make the law effective immediately upon approval, or on any
other date, without its previous publication.
Publication is indispensable in every case, but the legislature may in its discretion provide that
the usual fifteen-day period shall be shortened or extended. An example, as pointed out by the
present Chief Justice in his separate concurrence in the original decision, 6 is the Civil Code
which did not become effective after fifteen days from its publication in the Official Gazette but
"one year after such publication." The general rule did not apply because it was "otherwise
provided. "
It is not correct to say that under the disputed clause publication may be dispensed with
altogether. The reason. is that such omission would offend due process insofar as it would
deny the public knowledge of the laws that are supposed to govern the legislature could
validly provide that a law e effective immediately upon its approval notwithstanding the lack of
publication (or after an unreasonably short period after publication), it is not unlikely that
persons not aware of it would be prejudiced as a result and they would be so not because of a
failure to comply with but simply because they did not know of its existence, Significantly, this
is not true only of penal laws as is commonly supposed. One can think of many non-penal
measures, like a law on prescription, which must also be communicated to the persons they
may affect before they can begin to operate.
We note at this point the conclusive presumption that every person knows the law, which of
course presupposes that the law has been published if the presumption is to have any legal
justification at all. It is no less important to remember that Section 6 of the Bill of Rights
recognizes "the right of the people to information on matters of public concern," and this
certainly applies to, among others, and indeed especially, the legislative enactments of the
government.
The term "laws" should refer to all laws and not only to those of general application, for strictly
speaking all laws relate to the people in general albeit there are some that do not apply to
them directly. An example is a law granting citizenship to a particular individual, like a relative
of President Marcos who was decreed instant naturalization. It surely cannot be said that such
a law does not affect the public although it unquestionably does not apply directly to all the
people. The subject of such law is a matter of public interest which any member of the body
politic may question in the political forums or, if he is a proper party, even in the courts of

justice. In fact, a law without any bearing on the public would be invalid as an intrusion of
privacy or as class legislation or as an ultra vires act of the legislature. To be valid, the law
must invariably affect the public interest even if it might be directly applicable only to one
individual, or some of the people only, and t to the public as a whole.
We hold therefore that all statutes, including those of local application and private laws, shall
be published as a condition for their effectivity, which shall begin fifteen days after publication
unless a different effectivity date is fixed by the legislature.
Covered by this rule are presidential decrees and executive orders promulgated by the
President in the exercise of legislative powers whenever the same are validly delegated by the
legislature or, at present, directly conferred by the Constitution. administrative rules and
regulations must a also be published if their purpose is to enforce or implement existing law
pursuant also to a valid delegation.
Interpretative regulations and those merely internal in nature, that is, regulating only the
personnel of the administrative agency and not the public, need not be published. Neither is
publication required of the so-called letters of instructions issued by administrative superiors
concerning the rules or guidelines to be followed by their subordinates in the performance of
their duties.
Accordingly, even the charter of a city must be published notwithstanding that it applies to only
a portion of the national territory and directly affects only the inhabitants of that place. All
presidential decrees must be published, including even, say, those naming a public place after
a favored individual or exempting him from certain prohibitions or requirements. The circulars
issued by the Monetary Board must be published if they are meant not merely to interpret but
to "fill in the details" of the Central Bank Act which that body is supposed to enforce.
However, no publication is required of the instructions issued by, say, the Minister of Social
Welfare on the case studies to be made in petitions for adoption or the rules laid down by the
head of a government agency on the assignments or workload of his personnel or the wearing
of office uniforms. Parenthetically, municipal ordinances are not covered by this rule but by the
Local Government Code.
We agree that publication must be in full or it is no publication at all since its purpose is to
inform the public of the contents of the laws. As correctly pointed out by the petitioners, the
mere mention of the number of the presidential decree, the title of such decree, its
whereabouts (e.g., "with Secretary Tuvera"), the supposed date of effectivity, and in a mere
supplement of the Official Gazette cannot satisfy the publication requirement. This is not even
substantial compliance. This was the manner, incidentally, in which the General Appropriations
Act for FY 1975, a presidential decree undeniably of general applicability and interest, was
"published" by the Marcos administration. 7 The evident purpose was to withhold rather than
disclose information on this vital law.
Coming now to the original decision, it is true that only four justices were categorically for
publication in the Official Gazette 8 and that six others felt that publication could be made
elsewhere as long as the people were sufficiently informed. 9 One reserved his vote 10 and
another merely acknowledged the need for due publication without indicating where it should
be made. 11 It is therefore necessary for the present membership of this Court to arrive at a
clear consensus on this matter and to lay down a binding decision supported by the necessary
vote.
There is much to be said of the view that the publication need not be made in the Official
Gazette, considering its erratic releases and limited readership. Undoubtedly, newspapers of

general circulation could better perform the function of communicating, the laws to the people
as such periodicals are more easily available, have a wider readership, and come out
regularly. The trouble, though, is that this kind of publication is not the one required or
authorized by existing law. As far as we know, no amendment has been made of Article 2 of
the Civil Code. The Solicitor General has not pointed to such a law, and we have no
information that it exists. If it does, it obviously has not yet been published.
At any rate, this Court is not called upon to rule upon the wisdom of a law or to repeal or
modify it if we find it impractical. That is not our function. That function belongs to the
legislature. Our task is merely to interpret and apply the law as conceived and approved by
the political departments of the government in accordance with the prescribed procedure.
Consequently, we have no choice but to pronounce that under Article 2 of the Civil Code, the
publication of laws must be made in the Official Gazett and not elsewhere, as a requirement
for their effectivity after fifteen days from such publication or after a different period provided
by the legislature.
We also hold that the publication must be made forthwith or at least as soon as possible, to
give effect to the law pursuant to the said Article 2. There is that possibility, of course, although
not suggested by the parties that a law could be rendered unenforceable by a mere refusal of
the executive, for whatever reason, to cause its publication as required. This is a matter,
however, that we do not need to examine at this time.
Finally, the claim of the former Solicitor General that the instant motion is a request for an
advisory opinion is untenable, to say the least, and deserves no further comment.
The days of the secret laws and the unpublished decrees are over. This is once again an open
society, with all the acts of the government subject to public scrutiny and available always to
public cognizance. This has to be so if our country is to remain democratic, with sovereignty
residing in the people and all government authority emanating from them.
Although they have delegated the power of legislation, they retain the authority to review the
work of their delegates and to ratify or reject it according to their lights, through their freedom
of expression and their right of suffrage. This they cannot do if the acts of the legislature are
concealed.
Laws must come out in the open in the clear light of the sun instead of skulking in the
shadows with their dark, deep secrets. Mysterious pronouncements and rumored rules cannot
be recognized as binding unless their existence and contents are confirmed by a valid
publication intended to make full disclosure and give proper notice to the people. The furtive
law is like a scabbarded saber that cannot feint parry or cut unless the naked blade is drawn.
WHEREFORE, it is hereby declared that all laws as above defined shall immediately upon
their approval, or as soon thereafter as possible, be published in full in the Official Gazette, to
become effective only after fifteen days from their publication, or on another date specified by
the legislature, in accordance with Article 2 of the Civil Code.
SO ORDERED.
Teehankee, C.J., Feria, Yap, Narvasa, Melencio-Herrera, Alampay, Gutierrez, Jr., and Paras,
JJ., concur.
Separate Opinions
FERNAN, J., concurring:

While concurring in the Court's opinion penned by my distinguished colleague, Mr. Justice
Isagani A. Cruz, I would like to add a few observations. Even as a Member of the defunct
Batasang Pambansa, I took a strong stand against the insidious manner by which the
previous dispensation had promulgated and made effective thousands of decrees, executive
orders, letters of instructions, etc. Never has the law-making power which traditionally belongs
to the legislature been used and abused to satisfy the whims and caprices of a one-man
legislative mill as it happened in the past regime. Thus, in those days, it was not surprising to
witness the sad spectacle of two presidential decrees bearing the same number, although
covering two different subject matters. In point is the case of two presidential decrees bearing
number 1686 issued on March 19, 1980, one granting Philippine citizenship to Michael M.
Keon the then President's nephew and the other imposing a tax on every motor vehicle
equipped with airconditioner. This was further exacerbated by the issuance of PD No. 1686-A
also on March 19, 1980 granting Philippine citizenship to basketball players Jeffrey Moore and
Dennis George Still
The categorical statement by this Court on the need for publication before any law may be
made effective seeks prevent abuses on the part of the lawmakers and, at the same time,
ensures to the people their constitutional right to due process and to information on matters of
public concern.
FELICIANO, J., concurring:
I agree entirely with the opinion of the court so eloquently written by Mr. Justice Isagani A.
Cruz. At the same time, I wish to add a few statements to reflect my understanding of what the
Court is saying.
A statute which by its terms provides for its coming into effect immediately upon approval
thereof, is properly interpreted as coming into effect immediately upon publication thereof in
the Official Gazette as provided in Article 2 of the Civil Code. Such statute, in other words,
should not be regarded as purporting literally to come into effect immediately upon its approval
or enactment and without need of publication. For so to interpret such statute would be to
collide with the constitutional obstacle posed by the due process clause. The enforcement of
prescriptions which are both unknown to and unknowable by those subjected to the statute,
has been throughout history a common tool of tyrannical governments. Such application and
enforcement constitutes at bottom a negation of the fundamental principle of legality in the
relations between a government and its people.
At the same time, it is clear that the requirement of publication of a statute in the Official
Gazette, as distinguished from any other medium such as a newspaper of general circulation,
is embodied in a statutory norm and is not a constitutional command. The statutory norm is set
out in Article 2 of the Civil Code and is supported and reinforced by Section 1 of
Commonwealth Act No. 638 and Section 35 of the Revised Administrative Code. A
specification of the Official Gazette as the prescribed medium of publication may therefore be
changed. Article 2 of the Civil Code could, without creating a constitutional problem, be
amended by a subsequent statute providing, for instance, for publication either in the Official
Gazette or in a newspaper of general circulation in the country. Until such an amendatory
statute is in fact enacted, Article 2 of the Civil Code must be obeyed and publication effected
in the Official Gazette and not in any other medium.
Footnotes

1 Rollo pp. 242-250.

2 Ibid, pp. 244-248.
3 Id, pp. 271-280.
4 Id, pp. 288-299.
5 Id, pp. 320-322.
6 136 SCRA 27,46.
7 Rollo, p. 24,6.
8 Justices Venicio Escolin (ponente), Claudio Teehankee. Ameurfina Melencio-Herrera, and
Lorenzo Relova.
9 Chief Justice Enrique M. Fernando and Justices Felix V. Makasiar, Vicente Abad-Santos,
Efren 1. Plana Serafin P. Cuevas. and Nestor B. Alampay.
10 Justice Hugo E. Gutierrez, Jr.
11 Justice B. S. de la Fuente.

Republic of the Philippines

SUPREME COURT
Manila
EN BANC
G.R. No. L-41631 December 17, 1976
HON. RAMON D. BAGATSING, as Mayor of the City of Manila; ROMAN G. GARGANTIEL,
as Secretary to the Mayor; THE MARKET ADMINISTRATOR; and THE MUNICIPAL
BOARD OF MANILA, petitioners,
vs.
HON. PEDRO A. RAMIREZ, in his capacity as Presiding Judge of the Court of First
Instance of Manila, Branch XXX and the FEDERATION OF MANILA MARKET VENDORS,
INC., respondents.
Santiago F. Alidio and Restituto R. Villanueva for petitioners.
Antonio H. Abad, Jr. for private respondent.
Federico A. Blay for petitioner for intervention.
MARTIN, J.:
The chief question to be decided in this case is what law shall govern the publication of a tax
ordinance enacted by the Municipal Board of Manila, the Revised City Charter (R.A. 409, as
amended), which requires publication of the ordinance before its enactment and after its
approval, or the Local Tax Code (P.D. No. 231), which only demands publication after
approval.
On June 12, 1974, the Municipal Board of Manila enacted Ordinance No. 7522, "AN
ORDINANCE REGULATING THE OPERATION OF PUBLIC MARKETS AND PRESCRIBING
FEES FOR THE RENTALS OF STALLS AND PROVIDING PENALTIES FOR VIOLATION
THEREOF AND FOR OTHER PURPOSES." The petitioner City Mayor, Ramon D. Bagatsing,
approved the ordinance on June 15, 1974.
On February 17, 1975, respondent Federation of Manila Market Vendors, Inc. commenced
Civil Case 96787 before the Court of First Instance of Manila presided over by respondent
Judge, seeking the declaration of nullity of Ordinance No. 7522 for the reason that (a) the
publication requirement under the Revised Charter of the City of Manila has not been
complied with; (b) the Market Committee was not given any participation in the enactment of
the ordinance, as envisioned by Republic Act 6039; (c) Section 3 (e) of the Anti-Graft and
Corrupt Practices Act has been violated; and (d) the ordinance would violate Presidential
Decree No. 7 of September 30, 1972 prescribing the collection of fees and charges on
livestock and animal products.

Resolving the accompanying prayer for the issuance of a writ of preliminary injunction,
respondent Judge issued an order on March 11, 1975, denying the plea for failure of the
respondent Federation of Manila Market Vendors, Inc. to exhaust the administrative remedies
outlined in the Local Tax Code.
After due hearing on the merits, respondent Judge rendered its decision on August 29, 1975,
declaring the nullity of Ordinance No. 7522 of the City of Manila on the primary ground of noncompliance with the requirement of publication under the Revised City Charter. Respondent
Judge ruled:
There is, therefore, no question that the ordinance in question was not published at
all in two daily newspapers of general circulation in the City of Manila before its
enactment. Neither was it published in the same manner after approval, although it
was posted in the legislative hall and in all city public markets and city public
libraries. There being no compliance with the mandatory requirement of publication
before and after approval, the ordinance in question is invalid and, therefore, null
and void.
Petitioners moved for reconsideration of the adverse decision, stressing that (a) only a postpublication is required by the Local Tax Code; and (b) private respondent failed to exhaust all
administrative remedies before instituting an action in court.
On September 26, 1975, respondent Judge denied the motion.
Forthwith, petitioners brought the matter to Us through the present petition for review on
certiorari.
We find the petition impressed with merits.
1. The nexus of the present controversy is the apparent conflict between the Revised Charter
of the City of Manila and the Local Tax Code on the manner of publishing a tax ordinance
enacted by the Municipal Board of Manila. For, while Section 17 of the Revised Charter
provides:
Each proposed ordinance shall be published in two daily newspapers of general
circulation in the city, and shall not be discussed or enacted by the Board until after
the third day following such publication. * * * Each approved ordinance * * * shall be
published in two daily newspapers of general circulation in the city, within ten days
after its approval; and shall take effect and be in force on and after the twentieth day
following its publication, if no date is fixed in the ordinance.
Section 43 of the Local Tax Code directs:
Within ten days after their approval, certified true copies of all provincial, city,
municipal and barrio ordinances levying or imposing taxes, fees or other charges
shall be published for three consecutive days in a newspaper or publication widely
circulated within the jurisdiction of the local government, or posted in the local
legislative hall or premises and in two other conspicuous places within the territorial
jurisdiction of the local government. In either case, copies of all provincial, city,
municipal and barrio ordinances shall be furnished the treasurers of the respective
component and mother units of a local government for dissemination.
In other words, while the Revised Charter of the City of Manila requires publication before the
enactment of the ordinance and after the approval thereof in two daily newspapers of general
circulation in the city, the Local Tax Code only prescribes for publication after the approval of
"ordinances levying or imposing taxes, fees or other charges" either in a newspaper or
publication widely circulated within the jurisdiction of the local government or by posting the

ordinance in the local legislative hall or premises and in two other conspicuous places within
the territorial jurisdiction of the local government. Petitioners' compliance with the Local Tax
Code rather than with the Revised Charter of the City spawned this litigation.
There is no question that the Revised Charter of the City of Manila is a special act since it
relates only to the City of Manila, whereas the Local Tax Code is a general law because it
applies universally to all local governments. Blackstone defines general law as a universal rule
affecting the entire community and special law as one relating to particular persons or things
of a class. 1 And the rule commonly said is that a prior special law is not ordinarily repealed by
a subsequent general law. The fact that one is special and the other general creates a
presumption that the special is to be considered as remaining an exception of the general,
one as a general law of the land, the other as the law of a particular case. 2 However, the rule
readily yields to a situation where the special statute refers to a subject in general, which the
general statute treats in particular. The exactly is the circumstance obtaining in the case at
bar. Section 17 of the Revised Charter of the City of Manila speaks of "ordinance" in general,
i.e., irrespective of the nature and scope thereof, whereas, Section 43 of the Local Tax Code
relates to "ordinances levying or imposing taxes, fees or other charges" in particular. In regard,
therefore, to ordinances in general, the Revised Charter of the City of Manila is doubtless
dominant, but, that dominant force loses its continuity when it approaches the realm of
"ordinances levying or imposing taxes, fees or other charges" in particular. There, the Local
Tax Code controls. Here, as always, a general provision must give way to a particular
provision. 3 Special provision governs. 4 This is especially true where the law containing the
particular provision was enacted later than the one containing the general provision. The City
Charter of Manila was promulgated on June 18, 1949 as against the Local Tax Code which
was decreed on June 1, 1973. The law-making power cannot be said to have intended the
establishment of conflicting and hostile systems upon the same subject, or to leave in force
provisions of a prior law by which the new will of the legislating power may be thwarted and
overthrown. Such a result would render legislation a useless and Idle ceremony, and subject
the law to the reproach of uncertainty and unintelligibility. 5
The case of City of Manila v. Teotico 6 is opposite. In that case, Teotico sued the City of Manila
for damages arising from the injuries he suffered when he fell inside an uncovered and
unlighted catchbasin or manhole on P. Burgos Avenue. The City of Manila denied liability on
the basis of the City Charter (R.A. 409) exempting the City of Manila from any liability for
damages or injury to persons or property arising from the failure of the city officers to enforce
the provisions of the charter or any other law or ordinance, or from negligence of the City
Mayor, Municipal Board, or other officers while enforcing or attempting to enforce the
provisions of the charter or of any other law or ordinance. Upon the other hand, Article 2189 of
the Civil Code makes cities liable for damages for the death of, or injury suffered by any
persons by reason of the defective condition of roads, streets, bridges, public buildings, and
other public works under their control or supervision. On review, the Court held the Civil Code
controlling. It is true that, insofar as its territorial application is concerned, the Revised City
Charter is a special law and the subject matter of the two laws, the Revised City Charter
establishes a general rule of liability arising from negligence in general, regardless of the
object thereof, whereas the Civil Code constitutes a particular prescription for liability due to
defective streets in particular. In the same manner, the Revised Charter of the City prescribes
a rule for the publication of "ordinance" in general, while the Local Tax Code establishes a rule
for the publication of "ordinance levying or imposing taxes fees or other charges in particular.

In fact, there is no rule which prohibits the repeal even by implication of a special or specific
act by a general or broad one. 7 A charter provision may be impliedly modified or superseded
by a later statute, and where a statute is controlling, it must be read into the charter
notwithstanding any particular charter provision. 8 A subsequent general law similarly
applicable to all cities prevails over any conflicting charter provision, for the reason that a
charter must not be inconsistent with the general laws and public policy of the state. 9 A
chartered city is not an independent sovereignty. The state remains supreme in all matters not
purely local. Otherwise stated, a charter must yield to the constitution and general laws of the
state, it is to have read into it that general law which governs the municipal corporation and
which the corporation cannot set aside but to which it must yield. When a city adopts a
charter, it in effect adopts as part of its charter general law of such character. 10
2. The principle of exhaustion of administrative remedies is strongly asserted by petitioners as
having been violated by private respondent in bringing a direct suit in court. This is because
Section 47 of the Local Tax Code provides that any question or issue raised against the
legality of any tax ordinance, or portion thereof, shall be referred for opinion to the city fiscal in
the case of tax ordinance of a city. The opinion of the city fiscal is appealable to the Secretary
of Justice, whose decision shall be final and executory unless contested before a competent
court within thirty (30) days. But, the petition below plainly shows that the controversy between
the parties is deeply rooted in a pure question of law: whether it is the Revised Charter of the
City of Manila or the Local Tax Code that should govern the publication of the tax ordinance. In
other words, the dispute is sharply focused on the applicability of the Revised City Charter or
the Local Tax Code on the point at issue, and not on the legality of the imposition of the tax.
Exhaustion of administrative remedies before resort to judicial bodies is not an absolute rule. It
admits of exceptions. Where the question litigated upon is purely a legal one, the rule does
not apply. 11 The principle may also be disregarded when it does not provide a plain, speedy
and adequate remedy. It may and should be relaxed when its application may cause great and
irreparable damage. 12
3. It is maintained by private respondent that the subject ordinance is not a "tax ordinance,"
because the imposition of rentals, permit fees, tolls and other fees is not strictly a taxing power
but a revenue-raising function, so that the procedure for publication under the Local Tax Code
finds no application. The pretense bears its own marks of fallacy. Precisely, the raising of
revenues is the principal object of taxation. Under Section 5, Article XI of the New
Constitution, "Each local government unit shall have the power to create its own sources of
revenue and to levy taxes, subject to such provisions as may be provided by law." 13 And one
of those sources of revenue is what the Local Tax Code points to in particular: "Local
governments may collect fees or rentals for the occupancy or use of public markets and
premises * * *." 14 They can provide for and regulate market stands, stalls and privileges, and,
also, the sale, lease or occupancy thereof. They can license, or permit the use of, lease, sell
or otherwise dispose of stands, stalls or marketing privileges. 15
It is a feeble attempt to argue that the ordinance violates Presidential Decree No. 7, dated
September 30, 1972, insofar as it affects livestock and animal products, because the said
decree prescribes the collection of other fees and charges thereon "with the exception of antemortem and post-mortem inspection fees, as well as the delivery, stockyard and slaughter
fees as may be authorized by the Secretary of Agriculture and Natural Resources." 16 Clearly,
even the exception clause of the decree itself permits the collection of the proper fees for

livestock. And the Local Tax Code (P.D. 231, July 1, 1973) authorizes in its Section 31: "Local
governments may collect fees for the slaughter of animals and the use of corrals * * * "
4. The non-participation of the Market Committee in the enactment of Ordinance No. 7522
supposedly in accordance with Republic Act No. 6039, an amendment to the City Charter of
Manila, providing that "the market committee shall formulate, recommend and adopt, subject
to the ratification of the municipal board, and approval of the mayor, policies and rules or
regulation repealing or maneding existing provisions of the market code" does not infect the
ordinance with any germ of invalidity. 17 The function of the committee is purely
recommendatory as the underscored phrase suggests, its recommendation is without binding
effect on the Municipal Board and the City Mayor. Its prior acquiescence of an intended or
proposed city ordinance is not a condition sine qua non before the Municipal Board could
enact such ordinance. The native power of the Municipal Board to legislate remains
undisturbed even in the slightest degree. It can move in its own initiative and the Market
Committee cannot demur. At most, the Market Committee may serve as a legislative aide of
the Municipal Board in the enactment of city ordinances affecting the city markets or, in plain
words, in the gathering of the necessary data, studies and the collection of consensus for the
proposal of ordinances regarding city markets. Much less could it be said that Republic Act
6039 intended to delegate to the Market Committee the adoption of regulatory measures for
the operation and administration of the city markets. Potestas delegata non delegare potest.
5. Private respondent bewails that the market stall fees imposed in the disputed ordinance are
diverted to the exclusive private use of the Asiatic Integrated Corporation since the collection
of said fees had been let by the City of Manila to the said corporation in a "Management and
Operating Contract." The assumption is of course saddled on erroneous premise. The fees
collected do not go direct to the private coffers of the corporation. Ordinance No. 7522 was not
made for the corporation but for the purpose of raising revenues for the city. That is the object
it serves. The entrusting of the collection of the fees does not destroy the public purpose of the
ordinance. So long as the purpose is public, it does not matter whether the agency through
which the money is dispensed is public or private. The right to tax depends upon the ultimate
use, purpose and object for which the fund is raised. It is not dependent on the nature or
character of the person or corporation whose intermediate agency is to be used in applying it.
The people may be taxed for a public purpose, although it be under the direction of an
individual or private corporation. 18
Nor can the ordinance be stricken down as violative of Section 3(e) of the Anti-Graft and
Corrupt Practices Act because the increased rates of market stall fees as levied by the
ordinance will necessarily inure to the unwarranted benefit and advantage of the corporation.
19
We are concerned only with the issue whether the ordinance in question is intra vires. Once
determined in the affirmative, the measure may not be invalidated because of consequences
that may arise from its enforcement. 20
ACCORDINGLY, the decision of the court below is hereby reversed and set aside. Ordinance
No. 7522 of the City of Manila, dated June 15, 1975, is hereby held to have been validly
enacted. No. costs.
SO ORDERED.
Castro, C.J., Barredo, Makasiar, Antonio, Muoz Palma, Aquino and Concepcion, Jr., JJ.,
concur.
Teehankee, J., reserves his vote.

Separate Opinions
FERNANDO, J., concurring:
But qualifies his assent as to an ordinance intra vires not being open to question "because of
consequences that may arise from its enforcement."
Footnotes
1 Cooley, The Law of Taxation, Vol. 2, 4th ed.
2 Butuan Sawmill, Inc. vs. City of Butuan, L-21516, April 29, 1966, 16 SCRA 758, citing State
v. Stoll, 17 Wall. 425.
3 Lichauco & Co. v. Apostol, 44 Phil. 145 (1922).
4 Crawford, Construction of Statutes, 265, citing U.S. v. Jackson, 143 Fed. 783.
5 See Separate Opinion of Justice Johns in Lichauco, fn. 3, citing Lewis' Sutherland Statutory
Construction, at 161.
6 L-23052, January 29, 1968, 22 SCRA 270.
7 See 73 Am Jur 2d 521.
8 McQuillin, Municipal Corporation, Vol. 6, 3rd ed., 223.
9 See Bowyer v. Camden, 11 Atl. 137.
10 McQuillin, Municipal Corporation, Vol. 6, 3rd ed., 229-230.
11 Tapales v. President and Board of Regents of the U.P., L-17523, March 30, 1963, 7 SCRA
553; C.N. Hodges v. Municipal Board of the City of Iloilo, L-18276, January 12, 1967, 19
SCRA 32-33; Aguilar v. Valencia, L-30396, July 30, 1971, 40 SCRA 214;. Mendoza v. SSC, L29189, April 11, 1972, 44 SCRA 380.
12 Cipriano v. Marcelino, L-27793, February 28, 1972, 43 SCRA 291; Del Mar v. PVA, L27299, June 27, 1973, 51 SCRA 346, citing cases.
13 See City of Bacolod v. Enriquez, L-27408, July 25, 1975, Second Division, per Fernando,
J., 65 SCRA 384-85.
14 Article 5, Section 30, Chapter II.
15 McQuillin, Municipal Corporations, Vol. 7, 3rd ed., 275.
16 P.D. 7 was amended by P.D. 45 on November 10, 1972, so as to allow local governments
to charge the ordinary fee for the issuance of certificate of ownership and one peso for the
issuance of transfer certificate for livestock.
17 The market committee is composed of the market administrator as chairman, and a
representative of each of the city treasurer, the municipal board, the Chamber of Filipino
Retailers, Inc. and the Manila Market Vendors Association Inc. as members.
18 Cooley, The Law of Taxation, Vol. 1, 394-95.
19 Section 3 (e) causing any undue injury to any party, including the government, or giving
any private party any unwarranted benefits, advantage or preference in the discharge of his
official administrative or judicial functions through manifest partiality, evident bad faith or gross
inexcusable negligence.* * *
20 Willoughby, The Constitutional Law of the United States, 668 et seq.

Republic of the Philippines

SUPREME COURT
Manila
EN BANC
G.R. No. L-23052

January 29, 1968

CITY OF MANILA, petitioner,

vs.
GENARO N. TEOTICO and COURT OF APPEALS, respondents.
City Fiscal Manuel T. Reyes for petitioner.Sevilla, Daza and Associates for respondents.
CONCEPCION, C.J.:
Appeal by certiorari from a decision of the Court of Appeals.
On January 27, 1958, at about 8:00 p.m., Genaro N. Teotico was at the corner of the Old
Luneta and P. Burgos Avenue, Manila, within a "loading and unloading" zone, waiting for a
jeepney to take him down town. After waiting for about five minutes, he managed to hail a
jeepney that came along to a stop. As he stepped down from the curb to board the jeepney,
and took a few steps, he fell inside an uncovered and unlighted catch basin or manhole on P.
Burgos Avenue. Due to the fall, his head hit the rim of the manhole breaking his eyeglasses
and causing broken pieces thereof to pierce his left eyelid. As blood flowed therefrom,
impairing his vision, several persons came to his assistance and pulled him out of the
manhole. One of them brought Teotico to the Philippine General Hospital, where his injuries
were treated, after which he was taken home. In addition to the lacerated wound in his left
upper eyelid, Teotico suffered contusions on the left thigh, the left upper arm, the right leg and
the upper lip apart from an abrasion on the right infra-patella region. These injuries and the
allergic eruption caused by anti-tetanus injections administered to him in the hospital, required
further medical treatment by a private practitioner who charged therefor P1,400.00.
As a consequence of the foregoing occurrence, Teotico filed, with the Court of First Instance of
Manila, a complaint which was, subsequently, amended for damages against the City of
Manila, its mayor, city engineer, city health officer, city treasurer and chief of police. As stated
in the decision of the trial court, and quoted with approval by the Court of Appeals,

At the time of the incident, plaintiff was a practicing public accountant, a

businessman and a professor at the University of the East. He held responsible
positions in various business firms like the Philippine Merchandising Co., the A.U.
Valencia and Co., the Silver Swan Manufacturing Company and the Sincere Packing
Corporation. He was also associated with several civic organizations such as the
Wack Wack Golf Club, the Chamber of Commerce of the Philippines, Y's Men Club
of Manila and the Knights of Rizal. As a result of the incident, plaintiff was prevented
from engaging in his customary occupation for twenty days. Plaintiff has lost a daily
income of about P50.00 during his incapacity to work. Because of the incident, he
was subjected to humiliation and ridicule by his business associates and friends.
During the period of his treatment, plaintiff was under constant fear and anxiety for
the welfare of his minor children since he was their only support. Due to the filing of
this case, plaintiff has obligated himself to pay his counsel the sum of P2,000.00.
On the other hand, the defense presented evidence, oral and documentary, to prove
that the Storm Drain Section, Office of the City Engineer of Manila, received a report
of the uncovered condition of a catchbasin at the corner of P. Burgos and Old
Luneta Streets, Manila, on January 24, 1958, but the same was covered on the
same day (Exhibit 4); that again the iron cover of the same catch basin was reported
missing on January 30, 1958, but the said cover was replaced the next day (Exhibit
5); that the Office of the City Engineer never received any report to the effect that
the catchbasin in question was not covered between January 25 and 29, 1968; that
it has always been a policy of the said office, which is charged with the duty of
installation, repair and care of storm drains in the City of Manila, that whenever a
report is received from whatever source of the loss of a catchbasin cover, the matter
is immediately attended to, either by immediately replacing the missing cover or
covering the catchbasin with steel matting that because of the lucrative scrap iron
business then prevailing, stealing of iron catchbasin covers was rampant; that the
Office of the City Engineer has filed complaints in court resulting from theft of said
iron covers; that in order to prevent such thefts, the city government has changed
the position and layout of catchbasins in the City by constructing them under the
sidewalks with concrete cement covers and openings on the side of the gutter; and
that these changes had been undertaken by the city from time to time whenever
funds were available.
After appropriate proceedings the Court of First Instance of Manila rendered the
aforementioned decision sustaining the theory of the defendants and dismissing the amended
complaint, without costs.
On appeal taken by plaintiff, this decision was affirmed by the Court of Appeals, except insofar
as the City of Manila is concerned, which was sentenced to pay damages in the aggregate
sum of P6,750.00. 1 Hence, this appeal by the City of Manila.
The first issue raised by the latter is whether the present case is governed by Section 4 of
Republic Act No. 409 (Charter of the City of Manila) reading:
The city shall not be liable or held for damages or injuries to persons or property
arising from the failure of the Mayor, the Municipal Board, or any other city officer, to
enforce the provisions of this chapter, or any other law or ordinance, or from
negligence of said Mayor, Municipal Board, or other officers while enforcing or
attempting to enforce said provisions.

or by Article 2189 of the Civil Code of the Philippines which provides:

Provinces, cities and municipalities shall be liable for damages for the death of, or
injuries suffered by, any person by reason of defective conditions of road, streets,
bridges, public buildings, and other public works under their control or supervision.
Manila maintains that the former provision should prevail over the latter, because Republic Act
409, is a special law, intended exclusively for the City of Manila, whereas the Civil Code is a
general law, applicable to the entire Philippines.
The Court of Appeals, however, applied the Civil Code, and, we think, correctly. It is true that,
insofar as its territorial application is concerned, Republic Act No. 409 is a special law and the
Civil Code a general legislation; but, as regards the subject-matter of the provisions above
quoted, Section 4 of Republic Act 409 establishes a general rule regulating the liability of the
City of Manila for: "damages or injury to persons or property arising from the failure of" city
officers "to enforce the provisions of" said Act "or any other law or ordinance, or from
negligence" of the city "Mayor, Municipal Board, or other officers while enforcing or attempting
to enforce said provisions." Upon the other hand, Article 2189 of the Civil Code constitutes a
particular prescription making "provinces, cities and municipalities . . . liable for damages for
the death of, or injury suffered by any person by reason" specifically "of the defective
condition of roads, streets, bridges, public buildings, and other-public works under their control
or supervision." In other words, said section 4 refers to liability arising from negligence, in
general, regardless of the object thereof, whereas Article 2189 governs liability due to
"defective streets," in particular. Since the present action is based upon the alleged defective
condition of a road, said Article 2189 is decisive thereon.
It is urged that the City of Manila cannot be held liable to Teotico for damages: 1) because the
accident involving him took place in a national highway; and 2) because the City of Manila has
not been negligent in connection therewith.
As regards the first issue, we note that it is based upon an allegation of fact not made in the
answer of the City. Moreover, Teotico alleged in his complaint, as well as in his amended
complaint, that his injuries were due to the defective condition of a street which is "under the
supervision and control" of the City. In its answer to the amended complaint, the City, in turn,
alleged that "the streets aforementioned were and have been constantly kept in good
condition and regularly inspected and the storm drains and manholes thereof covered by the
defendant City and the officers concerned" who "have been ever vigilant and zealous in the
performance of their respective functions and duties as imposed upon them by law." Thus, the
City had, in effect, admitted that P. Burgos Avenue was and is under its control and
supervision.
Moreover, the assertion to the effect that said Avenue is a national highway was made, for the
first time, in its motion for reconsideration of the decision of the Court of Appeals. Such
assertion raised, therefore, a question of fact, which had not been put in issue in the trial
court, and cannot be set up, for the first time, on appeal, much less after the rendition of the
decision of the appellate court, in a motion for the reconsideration thereof.
At any rate, under Article 2189 of the Civil Code, it is not necessary for the liability therein
established to attach that the defective roads or streets belong to the province, city or
municipality from which responsibility is exacted. What said article requires is that the
province, city or municipality have either "control or supervision" over said street or road. Even
if P. Burgos Avenue were, therefore, a national highway, this circumstance would not

necessarily detract from its "control or supervision" by the City of Manila, under Republic Act
409. In fact Section 18(x) thereof provides:
Sec. 18. Legislative powers. The Municipal Board shall have the following
legislative powers:
xxx
xxx
xxx
(x) Subject to the provisions of existing law to provide for the laying out, construction
and improvement, and to regulate the use of streets, avenues, alleys, sidewalks,
wharves, piers, parks, cemeteries, and other public places; to provide for lighting,
cleaning, and sprinkling of streets and public places; . . . to provide for the
inspection of, fix the license fees for and regulate the openings in the same for the
laying of gas, water, sewer and other pipes, the building and repair of tunnels,
sewers, and drains, and all structures in and under the same and the erecting of
poles and the stringing of wires therein; to provide for and regulate cross-works,
curbs, and gutters therein, . . . to regulate traffic and sales upon the streets and
other public places; to provide for the abatement of nuisances in the same and
punish the authors or owners thereof; to provide for the construction and
maintenance, and regulate the use, of bridges, viaducts and culverts; to prohibit and
regulate ball playing, kite-flying, hoop rolling, and other amusements which may
annoy persons using the streets and public places, or frighten horses or other
animals; to regulate the speed of horses and other animals, motor and other
vehicles, cars, and locomotives within the limits of the city; to regulate the lights
used on all vehicles, cars, and locomotives; . . . to provide for and change the
location, grade, and crossing of railroads, and compel any such railroad to raise or
lower its tracks to conform to such provisions or changes; and to require railroad
companies to fence their property, or any part thereof, to provide suitable protection
against injury to persons or property, and to construct and repair ditches, drains,
sewers, and culverts along and under their tracks, so that the natural drainage of the
streets and adjacent property shall not be obstructed.
This authority has been neither withdrawn nor restricted by Republic Act No. 917 and
Executive Order No. 113, dated May 2, 1955, upon which the City relies. Said Act governs the
disposition or appropriation of the highway funds and the giving of aid to provinces, chartered
cities and municipalities in the construction of roads and streets within their respective
boundaries, and Executive Order No. 113 merely implements the provisions of said Republic
Act No. 917, concerning the disposition and appropriation of the highway funds. Moreover, it
provides that "the construction, maintenance and improvement of national primary, national
secondary and national aid provincial and city roads shall be accomplished by the Highway
District Engineers and Highway City Engineers under the supervision of the Commissioner of
Public Highways and shall be financed from such appropriations as may be authorized by the
Republic of the Philippines in annual or special appropriation Acts."
Then, again, the determination of whether or not P. Burgos Avenue is under the control or
supervision of the City of Manila and whether the latter is guilty of negligence, in connection
with the maintenance of said road, which were decided by the Court of Appeals in the
affirmative, is one of fact, and the findings of said Court thereon are not subject to our review.
WHEREFORE, the decision appealed from should be as it is hereby affirmed, with costs
against the City of Manila. It is so ordered.

Reyes, J.B.L., Dizon, Makalintal, Bengzon, J.P., Zaldivar, Sanchez, Castro, Angeles and
Fernando, JJ., concur.
Footnotes
1

Medical fees P1,400.00; Lost income P350.00; Moral damages P3,000.00; and
Attorney's fees P2,000.00.

*Insert
Civil Service
Commission
vs. Asensi

(December 17,
2004 case)
Here*
Will post
pictures, not

available in
the internet

Republic of the Philippines

SUPREME COURT
Manila
EN BANC
G.R. No. 154182

December 17, 2004

EDGAR Y. TEVES and TERESITA Z. TEVES, petitioners,

vs.
THE SANDIGANBAYAN, respondent.
DECISION
DAVIDE, JR., C.J.
The pivotal issue in this petition is whether a public official charged with violation of Section
3(h) of Republic Act No. 3019, as amended, otherwise known as the Anti-Graft and Corrupt

Practices Act, for unlawful intervention, in his official capacity, in the issuance of a license in
favor of a business enterprise in which he has a pecuniary interest may be convicted, together
with his spouse, of violation of that same provision premised on his mere possession of such
interest.
Edgar Y. Teves, former Mayor of Valencia, Negros Oriental, and his wife Teresita Z. Teves
seeks to annul and set aside the 16 July 2002 Decision 1 of the Sandiganbayan in Criminal
Case No. 2337 convicting them of violation of Section 3(h) of the Anti-Graft Law for
possessing direct pecuniary interest in the Valencia Cockpit and Recreation Center in
Valencia.
The indictment reads:2
The undersigned Special Prosecution Officer II, Office of the Special Prosecutor,
hereby accuses EDGAR Y. TEVES and TERESITA TEVES of violation of Section
3(h) of Republic Act No. 3019, otherwise known as the Anti-Graft and Corrupt
Practices Act, committed as follows:
That on or about February 4, 1992, and sometime subsequent thereto, in
Valencia, Negros Oriental, Philippines, and within the jurisdiction of this
Honorable Court, accused Edgar Y. Teves, a public officer, being then the
Municipal Mayor of Valencia, Negros Oriental, committing the crime-herein
charged in relation to, while in the performance and taking advantage of
his official functions, and conspiring and confederating with his wife,
herein accused Teresita Teves, did then and there willfully, unlawfully and
criminally cause the issuance of the appropriate business permit/license to
operate the Valencia Cockpit and Recreation Center in favor of one Daniel
Teves, said accused Edgar Y. Teves having a direct financial or pecuniary
interest therein considering the fact that said cockpit arena is actually
owned and operated by him and accused Teresita Teves.
CONTRARY TO LAW.
Upon their arraignment on 12 May 1997, the petitioners pleaded "not guilty." Pre-trial and trial
were thereafter set.
The petitioners and the prosecution agreed on the authenticity of the prosecutions
documentary evidence. Thus, the prosecution dispensed with the testimonies of witnesses
and formally offered its documentary evidence marked as Exhibits "A" to "V." 3
On 23 February 1998, the petitioners filed their Comment/Objections to the evidence offered
by the prosecution and moved for leave of court to file a demurrer to evidence. 4 On 29 July
1998, the Sandiganbayan admitted Exhibits "A" to "S" of the prosecutions evidence but
rejected Exhibits "T," "U," and "V."5 It also denied petitioners demurrer to evidence,6 as well as
their motion for reconsideration.7 This notwithstanding, the petitioners filed a Manifestation that
they were, nonetheless, dispensing with the presentation of witnesses because the evidence
on record are inadequate to support their conviction.
On 16 July 2002, the Sandiganbayan promulgated a decision 8 (1) convicting petitioners Edgar
and Teresita Teves of violation of Section 3(h) of the Anti-Graft Law; (2) imposing upon them
an indeterminate penalty of imprisonment of nine years and twenty-one days as minimum to
twelve years as maximum; and (3) ordering the confiscation of all their rights, interests, and
participation in the assets and properties of the Valencia Cockpit and Recreation Center in
favor of the Government, as well as perpetual disqualification from public office. 9 The
conviction was anchored on the finding that the petitioners possessed pecuniary interest in the

said business enterprise on the grounds that (a) nothing on record appears that Mayor Teves
divested himself of his pecuniary interest in said cockpit; (b) as of April 1992, Teresita Teves
was of record the "owner/licensee" of the cockpit; and (c) since Mayor Teves and Teresita
remained married to each other from 1983 until 1992, their property relations as husband and
wife, in the absence of evidence to the contrary, was that of the conjugal partnership of gains.
Hence, the cockpit is a conjugal property over which the petitioners have pecuniary interest.
This pecuniary interest is prohibited under Section 89(2) of R.A. No. 7160, otherwise known
as the Local Government Code (LGC) of 1991, and thus falls under the prohibited acts
penalized in Section 3(h) of the Anti-Graft Law.
The Sandiganbayan, however, absolved the petitioners of the charge of causing the issuance
of a business permit or license to operate the Valencia Cockpit and Recreation Center on or
about 4 February 1992 for not being well-founded.
On 26 August 2002, the petitioners filed the instant petition for review on certiorari10 seeking to
annul and set aside the 16 July 2002 Decision of the Sandiganbayan.
At first, we denied the petition for failure of the petitioners to sufficiently show that the
Sandiganbayan committed any reversible error in the challenged decision as to warrant the
exercise by this Court of its discretionary appellate jurisdiction. 11 But upon petitioners motion
for reconsideration,12 we reinstated the petition.13
The petitioners assert that the Sandiganbayan committed serious and palpable errors in
convicting them. In the first place, the charge was for alleged unlawful intervention of Mayor
Teves in his official capacity in the issuance of a cockpit license in violation of Section 3(h) of
the Anti-Graft Law. But they were convicted of having a direct financial or pecuniary interest in
the Valencia Cockpit and Recreation Center prohibited under Section 89(2) of the LGC of
1991, which is essentially different from the offense with which they were charged. Thus, the
petitioners insist that their constitutional right to be informed of the nature and cause of the
accusation against them was transgressed because they were never apprised at any stage of
the proceedings in the Sandiganbayan that they were being charged with, and arraigned and
tried for, violation of the LGC of 1991. The variance doctrine invoked by the respondent is but
a rule of procedural law that should not prevail over their constitutionally-guaranteed right to
be informed of the nature and cause of accusation against them.
Second, according to the petitioners, their alleged prohibited pecuniary interest in the Valencia
Cockpit in 1992 was not proved. The Sandiganbayan presumed that since Mayor Teves was
the cockpit operator and licensee in 1989, said interest continued to exist until 1992. It also
presumed that the cockpit was the conjugal property of Mayor Teves and his wife, and that
their pecuniary interest thereof was direct. But under the regime of conjugal partnership of
gains, any interest thereon is at most inchoate and indirect.
Also assigned as glaring error is the conviction of Teresita Teves, who is not a public officer. In
the information, only Mayor Teves was accused of "having a direct financial or pecuniary
interest in the operation of the Valencia Cockpit and Recreation Center in Negros Oriental."
His wife was merely charged as a co-conspirator of her husbands alleged act of "while in the
performance and taking advantage of his official functions, willfully, unlawfully and
criminally caus[ing] the issuance of the appropriate business permit/license to operate" the
said cockpit arena. Teresita Teves could not be convicted because conspiracy was not
established. Besides, the Sandiganbayan had already absolved the petitioners of this offense.
On the other hand, the Sandiganbayan, through the Office of the Special Prosecutor (OSP),
insists that the uncontroverted documentary evidence proved that petitioner Edgar Teves had

direct pecuniary interest over the cockpit in question as early as 26 September 1983. That
interest continued even though he transferred the management thereof to his wife Teresita
Teves in 1992, since their property relations were governed by the conjugal partnership of
gains. The existence of that prohibited interest is by itself a criminal offense under Section
89(2) of the LGC of 1991. It is necessarily included in the offense charged against the
petitioners, i.e., for violation of Section 3(h) of the Anti-Graft Law, which proscribes the
possession of a direct or indirect financial or pecuniary interest in any business, contract, or
transaction in connection with which the person possessing the financial interest intervenes in
his official capacity, or in which he is prohibited by the Constitution or any law from having any
interest. The use of the conjunctive word "or" demonstrates the alternative mode or nature of
the manner of execution of the final element of the violation of the provision. Although the
information may have alleged only one of the modalities of committing the offense, the other
mode is deemed included in the accusation to allow proof thereof. There was, therefore, no
violation of the constitutional right of the accused to be informed of the nature or cause of the
accusation against them in view of the variance doctrine, which finds statutory support in
Sections 4 and 5 of Rule 120 of the Rules of Court.
The petition is not totally devoid of merit.
Section 3(h) of the Anti-Graft Law provides:
Section 3. Corrupt practices of public officers. In addition to acts or omissions of
public officers already penalized by existing law, the following shall constitute corrupt
practices of any public officer and are hereby declared to be unlawful:

(h) Directly or indirectly having financial or pecuniary interest in any

business, contract or transaction in connection with which he intervenes or
takes part in his official capacity, or in which he is prohibited by the
Constitution or by any law from having any interest.
The essential elements set out in the afore-quoted legislative definition of the crime of
violation of Section 3(h) of the Anti-Graft Law are as follows:
1. The accused is a public officer;
2. He has a direct or indirect financial or pecuniary interest in any business,
contract, or transaction;
3. He either
a. intervenes or takes part in his official capacity in connection with such
interest; or
b. is prohibited from having such interest by the Constitution or by any law.
There are, therefore, two modes by which a public officer who has a direct or indirect financial
or pecuniary interest in any business, contract, or transaction may violate Section 3(h) of the
Anti-Graft Law. The first mode is if in connection with his pecuniary interest in any business,
contract or transaction, the public officer intervenes or takes part in his official capacity. The
second mode is when he is prohibited from having such interest by the Constitution or any
law.
We quote herein the Sandiganbayans declaration regarding petitioners culpability anent the
first mode:
[T]hat portion of the Information which seeks to indict the spouses Teves for
his causing the issuance of a business permit/license to operate the Valencia
cockpit on or about February 4, 1992 is not well-founded.

 Mayor Edgar Teves could not have issued a permit to operate the cockpit in
the year 1992 because as of January 1, 1992 the license could be issued only by
the Sangguniang Bayan. He may have issued the permit or license in 1991 or even
before that when he legally could, but that is not the charge. The charge is for acts
committed in 1992.14 [Emphasis supplied].
The Sandiganbayan found that the charge against Mayor Teves for causing the issuance of
the business permit or license to operate the Valencia Cockpit and Recreation Center is "not
well-founded." This it based, and rightly so, on the additional finding that only the
Sangguniang Bayan could have issued a permit to operate the Valencia Cockpit in the year
1992. Indeed, under Section 447(3)15 of the LGC of 1991, which took effect on 1 January
1992, it is the Sangguniang Bayan that has the authority to issue a license for the
establishment, operation, and maintenance of cockpits. Unlike in the old LGC, Batas
Pambansa Blg. 337, wherein the municipal mayor was the presiding officer of the
Sangguniang Bayan,16 under the LGC of 1991, the mayor is not so anymore and is not even a
member of the Sangguniang Bayan. Hence, Mayor Teves could not have intervened or taken
part in his official capacity in the issuance of a cockpit license during the material time, as
alleged in the information, because he was not a member of the Sangguniang Bayan. 17
A fortiori, there is no legal basis to convict Teresita Teves as a co-conspirator in the absence of
a finding that Mayor Teves himself is guilty of the offense charged. In short, the
Sandiganbayan correctly absolved the petitioners of the charge based on the first mode. And
there is no need to belabor this point.
The Sandiganbayan, however, convicted the petitioners of violation of Section 3(h) of the AntiGraft Law based on the second mode. It reasoned that the evidence overwhelmingly evinces
that Mayor Teves had a pecuniary interest in the Valencia Cockpit, which is prohibited under
Section 89(2) of the LGC of 1991.
The information accuses petitioner Edgar Teves, then Municipal Mayor of Valencia, Negros
Oriental, of causing, "while in the performance and taking advantage of his official functions,
and conspiring and confederating with his wife the issuance of the appropriate business
permit/license to operate the Valencia Cockpit and Recreation Center in favor of one Daniel
Teves." The last part of the dispositive portion of the information states that "said accused
Edgar Y. Teves having a direct financial or pecuniary interest therein considering the fact that
said cockpit arena is actually owned and operated by him and accused Teresita Teves."
A careful reading of the information reveals that the afore-quoted last part thereof is merely an
allegation of the second element of the crime, which is, that he has a direct or indirect
"financial or pecuniary interest in any business, contract or transaction." Not by any stretch of
imagination can it be discerned or construed that the afore-quoted last part of the information
charges the petitioners with the second mode by which Section 3(h) of the Anti-Graft Law may
be violated. Hence, we agree with the petitioners that the charge was for unlawful intervention
in the issuance of the license to operate the Valencia Cockpit. There was no charge for
possession of pecuniary interest prohibited by law.
However, the evidence for the prosecution has established that petitioner Edgar Teves, then
mayor of Valencia, Negros Oriental,18 owned the cockpit in question. In his sworn application
for registration of cockpit filed on 26 September 198319 with the Philippine Gamefowl
Commission, Cubao, Quezon City, as well as in his renewal application dated 6 January
198920 he stated that he is the owner and manager of the said cockpit. Absent any evidence
that he divested himself of his ownership over the cockpit, his ownership thereof is rightly to

be presumed because a thing once proved to exist continues as long as is usual with things of
that nature.21 His affidavit22 dated 27 September 1990 declaring that effective January 1990 he
"turned over the management of the cockpit to Mrs. Teresita Z. Teves for the reason that [he]
could no longer devote a full time as manager of the said entity due to other work pressure" is
not sufficient proof that he divested himself of his ownership over the cockpit. Only the
management of the cockpit was transferred to Teresita Teves effective January 1990. Being
the owner of the cockpit, his interest over it was direct.
Even if the ownership of petitioner Edgar Teves over the cockpit were transferred to his wife,
still he would have a direct interest thereon because, as correctly held by respondent
Sandiganbayan, they remained married to each other from 1983 up to 1992, and as such their
property relation can be presumed to be that of conjugal partnership of gains in the absence
of evidence to the contrary. Article 160 of the Civil Code provides that all property of the
marriage is presumed to belong to the conjugal partnership unless it be proved that it pertains
exclusively to the husband or to the wife. And Section 143 of the Civil Code declares all the
property of the conjugal partnership of gains to be owned in common by the husband and
wife. Hence, his interest in the Valencia Cockpit is direct and is, therefore, prohibited under
Section 89(2) of the LGC of 1991, which reads:
Section 89. Prohibited Business and Pecuniary Interest. (a) It shall be unlawful
for any local government official or employee, directly or indirectly, to:

(2) Hold such interests in any cockpit or other games licensed by a

local government unit. [Emphasis supplied].
The offense proved, therefore, is the second mode of violation of Section 3(h) of the Anti-Graft
Law, which is possession of a prohibited interest. But can the petitioners be convicted thereof,
considering that it was not charged in the information?
The answer is in the affirmative in view of the variance doctrine embodied in Section 4, in
relation to Section 5, Rule 120, Rules of Criminal Procedure, which both read:
Sec. 4. Judgment in case of variance between allegation and proof. When there is
a variance between the offense charged in the complaint or information and that
proved, and the offense as charged is included in or necessarily includes the
offense proved, the accused shall be convicted of the offense proved which is
included in the offense charged, or of the offense charged which is included in the
offense proved.
Sec. 5. When an offense includes or is included in another. An offense charged
necessarily includes the offense proved when some of the essential elements or
ingredients of the former, as alleged in the complaint or information, constitutes the
latter. And an offense charged is necessarily included in the offense proved when
the essential ingredients of the former constitute or form part of those constituting
the latter.
The elements of the offense charged in this case, which is unlawful intervention in the
issuance of a cockpit license in violation of Section 3(h) of the Anti-Graft Law, are
1. The accused is a public officer;
2. He has a direct or indirect financial or pecuniary interest in any business,
contract, or transaction, whether or not prohibited by law; and
3. He intervenes or takes part in his official capacity in connection with such interest.

On the other hand, the essential ingredients of the offense proved, which is possession of
prohibited interest in violation of Section 3(h) of the Anti-Graft Law, are as follows:
1. The accused is a public officer;
2. He has a direct or indirect financial or pecuniary interest in any business, contract
or transaction; and
3. He is prohibited from having such interest by the Constitution or any law.
It is clear that the essential ingredients of the offense proved constitute or form part of those
constituting the offense charged. Put differently, the first and second elements of the offense
charged, as alleged in the information, constitute the offense proved. Hence, the offense
proved is necessarily included in the offense charged, or the offense charged necessarily
includes the offense proved. The variance doctrine thus finds application to this case, thereby
warranting the conviction of petitioner Edgar Teves for the offense proved.
The next question we have to grapple with is under what law should petitioner Edgar Teves be
punished. It must be observed that Section 3(h) of the Anti-Graft Law is a general provision, it
being applicable to all prohibited interests; while Section 89(2) of the LGC of 1991 is a special
provision, as it specifically treats of interest in a cockpit. Notably, the two statutes provide for
different penalties. The Anti-Graft Law, particularly Section 9, provides as follows:
SEC. 9. Penalties for violations. (a) Any public official or private person committing
any of the unlawful acts or omissions enumerated in Sections 3, 4, 5, and 6 of this
Act shall be punished by imprisonment of not less than six years and one month nor
more than fifteen years, perpetual disqualification from public office, and
confiscation or forfeiture in favor of the Government of any prohibited interest.
On the other hand, Section 514 of the LGC of 1991 prescribes a lighter penalty; thus:
SECTION 514. Engaging in Prohibited Business Transactions or Possessing Illegal
Pecuniary Interest. Any local official and any person or persons dealing with him
who violate the prohibitions provided in Section 89 of Book I hereof shall be
punished with imprisonment for six months and one day to six years, or a fine of not
less than Three thousand pesos (P3,000.00) nor more than Ten Thousand Pesos
(P10,000.00), or both such imprisonment and fine at the discretion of the court.
It is a rule of statutory construction that where one statute deals with a subject in general
terms, and another deals with a part of the same subject in a more detailed way, the two
should be harmonized if possible; but if there is any conflict, the latter shall prevail regardless
of whether it was passed prior to the general statute. 23 Or where two statutes are of contrary
tenor or of different dates but are of equal theoretical application to a particular case, the one
designed therefor specially should prevail over the other. 24
Conformably with these rules, the LGC of 1991, which specifically prohibits local officials from
possessing pecuniary interest in a cockpit licensed by the local government unit and which, in
itself, prescribes the punishment for violation thereof, is paramount to the Anti-Graft Law,
which penalizes possession of prohibited interest in a general manner. Moreover, the latter
took effect on 17 August 1960, while the former became effective on 1 January 1991. Being
the earlier statute, the Anti-Graft Law has to yield to the LGC of 1991, which is the later
expression of legislative will.25
In the imposition on petitioner Edgar Teves of the penalty provided in the LGC of 1991, we
take judicial notice of the fact that under the old LGC, mere possession of pecuniary interest in
a cockpit was not among the prohibitions enumerated in Section 41 26 thereof. Such
possession became unlawful or prohibited only upon the advent of the LGC of 1991, which

took effect on 1 January 1992. Petitioner Edgar Teves stands charged with an offense in
connection with his prohibited interest committed on or about 4 February 1992, shortly after
the maiden appearance of the prohibition. Presumably, he was not yet very much aware of the
prohibition. Although ignorance thereof would not excuse him from criminal liability, such
would justify the imposition of the lighter penalty of a fine of P10,000 under Section 514 of the
LGC of 1991.
Petitioner Teresita Teves must, however, be acquitted. The charge against her is conspiracy in
causing "the issuance of the appropriate business permit/license to operate the Valencia
Cockpit and Recreation Center." For this charge, she was acquitted. But as discussed earlier,
that charge also includes conspiracy in the possession of prohibited interest.
Conspiracy must be established separately from the crime itself and must meet the same
degree of proof, i.e., proof beyond reasonable doubt. While conspiracy need not be
established by direct evidence, for it may be inferred from the conduct of the accused before,
during, and after the commission of the crime, all taken together, the evidence must
reasonably be strong enough to show community of criminal design. 27
Certainly, there is no conspiracy in just being married to an erring spouse. 28 For a spouse or
any person to be a party to a conspiracy as to be liable for the acts of the others, it is essential
that there be intentional participation in the transaction with a view to the furtherance of the
common design. Except when he is the mastermind in a conspiracy, it is necessary that a
conspirator should have performed some overt act as a direct or indirect contribution in the
execution of the crime planned to be committed. The overt act must consist of active
participation in the actual commission of the crime itself or of moral assistance to his coconspirators.29
Section 4(b) of the Anti-Graft Law, the provision which applies to private individuals, states:
SEC. 4. Prohibitions on private individuals.
(b) It shall be unlawful for any person knowingly to induce or cause any
public official to commit any of the offenses defined in Section 3 hereof.
We find no sufficient evidence that petitioner Teresita Teves conspired with, or knowingly
induced or caused, her husband to commit the second mode of violation of Section 3(h) of the
Anti-Graft Law.
As early as 1983, Edgar Teves was already the owner of the Valencia Cockpit. Since then until
31 December 1991, possession by a local official of pecuniary interest in a cockpit was not yet
prohibited. It was before the effectivity of the LGC of 1991, or on January 1990, that he
transferred the management of the cockpit to his wife Teresita. In accordance therewith it was
Teresita who thereafter applied for the renewal of the cockpit registration. Thus, in her sworn
applications for renewal of the registration of the cockpit in question dated 28 January 1990 30
and 18 February 1991,31 she stated that she is the Owner/Licensee and Operator/Manager of
the said cockpit. In her renewal application dated 6 January 1992, 32 she referred to herself as
the Owner/Licensee of the cockpit. Likewise in the separate Lists of Duly Licensed Personnel
for Calendar Years 199133 and 1992,34 which she submitted on 22 February 1991 and 17
February 1992, respectively, in compliance with the requirement of the Philippine Gamefowl
Commission for the renewal of the cockpit registration, she signed her name as
Operator/Licensee.
The acts of petitioner Teresita Teves can hardly pass as acts in furtherance of a conspiracy to
commit the violation of the Anti-Graft Law that would render her equally liable as her husband.
If ever she did those acts, it was because she herself was an owner of the cockpit. Not being

a public official, she was not prohibited from holding an interest in cockpit. Prudence, however,
dictates that she too should have divested herself of her ownership over the cockpit upon the
effectivity of the LGC of 1991; otherwise, as stated earlier, considering her property relation
with her husband, her ownership would result in vesting direct prohibited interest upon her
husband.
In criminal cases, conviction must rest on a moral certainty of guilt. 35 The burden of proof is
upon the prosecution to establish each and every element of the crime and that the accused is
either responsible for its commission or has conspired with the malefactor. Since no
conspiracy was proved, the acquittal of petitioner Teresita Teves is, therefore, in order.
WHEREFORE, premises considered, the 16 July 2002 Decision of the Sandiganbayan, First
Division, in Criminal Case No. 2337 is hereby MODIFIED in that (1) EDGAR Y. TEVES is
convicted of violation of Section 3(h) of Republic Act No. 3019, or the Anti-Graft and Corrupt
Practices Act, for possession of pecuniary or financial interest in a cockpit, which is prohibited
under Section 89(2) of the Local Government Code of 1991, and is sentenced to pay a fine of
P10,000; and (2) TERESITA Z. TEVES is hereby ACQUITTED of such offense.
Costs de oficio.
SO ORDERED.
Davide, Jr., C.J., Puno, Panganiban, Quisumbing, Ynares-Santiago, Sandoval-Gutierrez,
Carpio, Austria-Martinez, Corona, Carpio-Morales, Azcuna, Chico-Nazario, and Garcia, JJ.,
concur.
Callejo, Sr., J., on leave, but left his oath of concurrence with the dissent of J. Tinga.
Tinga, J., dissenting opinion.
DISSENTING OPINION
TINGA, J.:
It is imperative for this Court as guardian of the peoples fundamental liberties, to redeem
persons inflicted with the classic Kafkaesque nightmare conviction for a crime the indictment
for which the accused has no knowledge of. I sense that the majority recognizes, albeit tacitly,
the absurdity of the convictions challenged in this petition. Thus the proposed quantum
downgrading of the penalty of accused Edgardo Teves (Teves) from imprisonment of at least
nine years, imposed by the Sandiganbayan, to a mere fine. However, I submit that Teves
should be extenuated not as a matter of grace, but as a matter of right in consonance with the
Constitution.
My submission is ultimately premised on constitutional considerations that Teves cannot be
convicted of the present charges against him without violating his constitutional right to be
informed of the nature and cause of the accusation against him. 1 Furthermore, the punishment
of Teves for a crime of which he was neither legally nor actually informed constitutes a
violation of the constitutional right to due process of law. 2 While the variance doctrine is a rule
of long-standing, its mechanical application cannot supplant the Bill of Rights which occupies
a position of primacy within our fundamental law. 3 I believe that the variance between the
offense charged to Teves, on one hand, and the offense of which the majority intends to
convict him, on the other, is material and prejudicial enough so as to affect his substantial
rights as an accused.4
In particular, the Information filed against Teves is deficient for the purpose of convicting him,
as charged, of violating Section 3(h) of the Anti-Graft and Corrupt Practices Act, or for violating
Section 89(b) of the Local Government Code, as is the wont of the majority.

The offense of which Teves is charged is defined under Section 3(h) of the Anti-Graft and
Corrupt Practices Act,5 which states:
Section 3. Corrupt practices of public officers. In addition to acts or omissions of
public officers already penalized by existing law, the following shall constitute corrupt
practices of any public officer and are hereby declared to be unlawful:
xxx
(h) Directly or indirectly having financial or pecuniary interest in any business,
contract or transaction in connection with which he intervenes or takes part in his
official capacity, or in which he is prohibited by the Constitution or by any law from
having any interest.
As the majority correctly points out, there are two modes by which a public officer who has a
direct or indirect financial or pecuniary interest in any business, contract or transaction may
violate Section 3(h). The first is where the public officer, in connection with his financial or
pecuniary interest in a business, contract or transaction, intervenes or takes part in his official
capacity (First Mode). The second is where the public officer possesses such financial or
pecuniary interest and said possession is prohibited by the Constitution or of any other law
(Second Mode).
The Information clearly charges the Teves spouses with violating Section 3(h) through the
First Mode:
The undersigned Special Prosecution Officer II, Office of the Special Prosecutor,
hereby accuses EDGAR Y. TEVES and TERESITA TEVES of violation of Section
3(h) of Republic Act No. 3019, otherwise known as the Anti-Graft and Corrupt
Practices Act, committed as follows:
That on or about February 4, 1992, and sometime subsequent thereto, in
Valencia, Negros Oriental, Philippines, and within the jurisdiction of this
Honorable Court, accused Edgar Y. Teves, a public officer, being then the
Municipal Mayor of Valencia, Negros Oriental, commiting the crime herein
charged in relation to, while in the performance and taking advantage of
his official functions, and conspiring and confederating with his wife,
herein accuse[d] Teresita Teves, did then and there willfully, unlawfully and
criminally cause the issuance of the appropriate business permit/license to
operate the Valencia Cockpit and Recreation Center in favor of one Daniel
Teves, said accused Edgar Y. Teves having a direct or pecuniary interest
therein considering the fact that said cockpit arena is actually owned and
operated by him and accused Teresita Teves.
CONTRARY TO LAW.6
The Sandiganbayan found that Teves could not have caused the issuance of the permit to
operate the cockpit in 1992, as alleged in the Information. Hence, the offense through the
First Mode for which Teves was charged was not proved. Still, the Sandiganbayan found the
Teves spouses guilty of violating Section 3(h), through the Second Mode, although it was not
at all alleged in the Information. In justifying the conviction, the Sandiganbayan merely noted
that the fact of Teves pecuniary interest in the cockpit was unrebutted, 7 and that Section 89(b)
of the Local Government Code barred Teves from holding an interest in a cockpit. The
Sandiganbayan was silent as to why the Teves spouses were convicted of an offense different
from that charged in the Information.

The ponencia fills in the blank, contending that conviction can be had by applying the
"variance doctrine" encapsulated in Sections 4 and 5, Rule 120 of the Rules of Criminal
Procedure. According to the majority, the offense proved the violation of Section 3(h) through
holding the prohibited pecuniary interest, is necessarily included in the offense chargedthe
violation of Section 3(h) through intervening/taking part in an official capacity in connection
with a financial or pecuniary interest in any business, contract or transaction. However, the
majority would prefer to convict Teves instead and fine him Ten Thousand Pesos (P10,000.00)
for violating Section 89(b) of the Local Government Code, the law which specifically prohibits
Teves from maintaining an interest in a cockpit. The deviation is sought to be justified by
noting that Section 89(b) of the Local Government Code is more specific in application than
the general proscription under Section 3(h) of the Anti-Graft and Corrupt Practices Act, a law
which happens to antecede the Local Government Code. The ponencia would also do away
with a sentence of imprisonment, imposing instead a fine as earlier adverted to.
That an accused cannot be convicted of an offense not charged or included in the information
is based upon the right to be informed of the true nature and cause of the accusation against
him.8 This right was long ago established in English law, and is expressly guaranteed under
Section 14(2), Article III of the Constitution. This right requires that the offense be charged with
clearness and all necessary certainty to inform the accused of the crime of which he stands
charged, in sufficient detail to enable him to prepare a defense. 9 The peculiarities attaching to
the Information herein preclude his conviction of any offense other than violation of Section
3(h) through the First Mode.
Second Mode Not Necessarily Included in First Mode
With due respect, I find unacceptable the general proposition that the Second Mode of
violating Section 3(h) is necessarily included in the First Mode.
Under Section 5, Rule 120 of the Rules of Criminal Procedure, the offense charged
necessarily includes the offense proved when some of the essential elements or
ingredients of the former constitute the latter. Thus, it should be established that the
Second Mode is constituted of the essential elements of the First Mode.
In analyzing the question, the majority makes the following pronouncement:
The elements of the offense charged in this case, which is unlawful intervention in
the issuance of a cockpit license in violation of Section 3(h) of the Anti-Graft Law,
are
1. The accused is a public officer;
2. He has a direct or indirect financial or pecuniary interest in any
business, contract or transaction, whether or not prohibited by law; and
3. He intervenes or takes part in his official capacity in connection with
such interest.
On the other hand, the essential ingredients of the offense proved, which is
possession of prohibited interest in violation of Section 3(h) of the Anti-Graft Law,
are as follows:
1. The accused is a public officer;
2. He has a direct or indirect financial or pecuniary interest in any
business, contract or transaction; and
3. He is prohibited from having such interest by the Constitution or any
law.

It is clear that the essential ingredients of the offense proved constitute or form part of those
constituting the offense charged. Put differently, the first and second elements of the offense
charged, as alleged in the information, constitute the offense proved. Hence, the offense
proved is necessarily included in the offense charged, or the offense charged necessarily
includes the offense proved. The variance doctrine thus finds application to this case, thereby
warranting the conviction of petitioner Edgar Teves for the offense proved. 10
The essential common ingredient appreciated by the majority is clearly the existence of "direct
or indirect financial or pecuniary interest." Yet the element of "financial or pecuniary interest"
contemplated under the Second Mode is one prohibited by law, a qualification not present in
the First Mode.
Under the First Mode, the element considered is simply that the public official
maintains a financial or pecuniary interest, whether or not prohibited by law. This
contrasts to the Second Mode, wherein such interest is particularly qualified as one
prohibited by the Constitution or by any other statute. Thus, while the pecuniary interest
of a town mayor who possesses an ownership share in a real estate firm may be cause for
liability under the First Mode if the other requisites thereof concur, it is not cause for liability
under the Second Mode as such ownership is not prohibited either by the Constitution or by
any other law.
It should be taken into the account that the proper application of the variance doctrine
ordinarily does not run afoul of the Constitution because it is expected that the accused has
been given the opportunity to defend himself/herself not only of the offense charged, but also
of the offense eventually proven. This is because the essential elements of the offense proved
are already necessarily included in the offense charged. 11 For the variance doctrine to apply,
there must be a commonality of elements within the offense charged and offense proved, to
the extent that an Information detailing the offense charged can be deemed as well as an
Information detailing the offense proven.
Hence, the threshold question should be whether violation of Section 3(h) through the Second
Mode is necessarily included in a violation of Section 3(h) through the First Mode. An
affirmative answer is precluded by the difference in the nature of the pecuniary interest that
respectively lie at the core of the two modes.
Information Deficient To Sustain Conviction for Any Crime Other than the First Mode of
Violation of Section 3(h)
An even more crucial reason why Teves should be acquitted pertains to the particular
Information charged against him.
In relation to Tevess pecuniary interest in the cockpit, all the Information alleges is that Teves
had a direct financial or pecuniary interest in the cockpit. It does not allege that such
pecuniary interest violates either the Constitution or any other law. It does not even state
that maintaining the pecuniary interest in the cockpit is in itself unlawful. Moreover, it
does not make any reference to Section 89(b) of the Local Government Code, more so
of the fact that such pecuniary interest is prohibited under the said statute.
Even the majority concedes that the Information does not charge the Teves spouses with
violating the Second Mode. The ponencia notes that:
"[n]ot by any stretch of imagination can it be discerned or construed that the aforequoted last part of the information charges the petitioners with the second mode by
which Section 3(h) of the Anti-Graft Law may be violated. Hence, we agree with the
petitioners that the charge was for unlawful intervention in the issuance of the

license to operate the Valencia Cockpit. There was no charge for possession of
pecuniary interest prohibited by law."12
In short, the Information does not give any indication that the Office of the Special Prosecutor,
which had lodged the charge sheet, was genuinely aware that the fact of Tevess ownership of
the cockpit actually constitutes a violation of a law, or any law for that matter. But before the
Court chalks it up as a lucky break for the government, it should first examine whether Tevess
constitutional rights as an accused would be impaired if he were found guilty of a charge on
the basis of an Information clearly predicated on a different ground.
Clearly, the Information is sufficient to convict Teves for the First Mode of violating Section
3(h), had the evidence warranted conviction. It amply informs Teves of that particular charge
to the extent that he could adequately prepare a defense in his behalf. However, would the
same Information similarly suffice to have allowed Teves to defend himself against a charge
that maintaining the financial/pecuniary interest in the cockpit is itself illegal? Clearly, it would
not and I so maintain.
Our holding in Esguerra v. People13 is in point. The accused was charged with estafa under
Article 315, paragraph 1-b of the Revised Penal Code, which pertains to misappropriating
personal property received by the offender reposed with trust to preserve or deliver it to
another. However, while the Court of Appeals found that Esguerra could not be held liable for
Estafa under Article 315, paragraph 1-b, he still could be held responsible for violation of the
same Article, but under paragraph 3(2-a), which pertains to false pretenses or fraudulent acts
committed by making misrepresentations as to his identity or status. 14 The Court reversed the
conviction, noting that:
It is undisputed that the information contains no allegation of misrepresentation, bad
faith or false pretenses, essential element in the crime of which appellant was found
guilty by the Court of Appeals. This is so, evidently, because, as already stated, the
fiscal and the private prosecutor avowedly were prosecuting the accused for the
crime of misappropriation and conversion committed with unfaithfulness and abuse
of confidence for which the appellant went to trial and was convicted by the lower
court. It is true the information states that "the accused, upon representations (not
misrepresentations) that the accused had copras ready for delivery to it, took and
received" the sum of P4,400.00. Nowhere does it appear in the information that
these "representations" were false or fraudulent, or that the accused had no such
copra at the time he allegedly made such "representations." The falsity or
fraudulentness of the pretense or representation or act being the very
constitutive element of the offense, allegation to that effect, either in the
words of the law or in any other language of similar import, must be made in
the information if the right of the accused to be informed of the nature and
cause of the accusation against him is to be preserved. xxx15
In the case at bar, the constitutive element of the Second Mode for violating Section 3(h) is the
possession of a pecuniary interest that the public officer is prohibited from having by law.
Necessarily then, the Information should spell out which law prohibits such financial or
pecuniary interest if conviction could be had based on the possession of such interest. Such
fact would be critical in order to afford the accused the opportunity to prepare an intelligent
defense. Had the Information notified Teves of his possible culpability hinging on Section 89(b)
of the Local Government Code, Teves would have had the chance to study the provision and
prepare accordingly. There are several avenues the defense could have pursued, such as an

examination of relevant jurisprudential precedents regarding Section 89(b) or of its legislative

history. Teves could have even conducted a contextual analysis of Section 89(b) in relation to
the rest of the Local Government Code or of other statutes. Indeed, the validity itself of
Section 89(b) could be fair game for judicial review, and it would be understood if Teves had
pursued that line of argument, considering that the invalidity of the provision would equate to
his absolution from criminal charges that may arise from Section 89(b).
But the simple fact remains that Teves could not have pursued these plausible defenses
because Section 89(b) was not put in issue by the Information. Had he raised any matter
relating to Section 89(b) during trial, these would have been deemed irrelevant as it bears no
relation to the charge at hand. Indeed, the prosecution made no effort to demonstrate that
Tevess interest in the cockpit was illegal under Section 89(b), as can be gleaned from the
documentary evidence submitted16 on the basis of which judgment was rendered.17 Instead,
intensive efforts were exerted by the prosecution to establish that Teves, in his official
capacity, had caused the issuance of a license on or about 4 February 1992 to operate the
cockpit in question. Confronted with the culpable acts alleged in the Information, Teves
accordingly devoted his own defense to disprove the allegation that he had indeed issued the
licenses for the operation of the cockpit. There is no indication that during the trial, the parties
or the Sandiganbayan dwelt on the aspect that a municipal mayor may not hold an interest in
a cockpit under Section 89(b), which is understandable considering that the Information itself
does not proffer aspect as an issue.
Yet the Sandiganbayan anyway based its finding of guilt on Section 89(b), in relation to the
Second Mode, despite the fact that the aspect had not been raised, much more the accused
afforded the opportunity to offer a defense against such claim. It would be simplistic to justify
the finding by pointing out that the accused had anyway admitted the facts that constitute a
violation of Section 89(b). Even if the questions of fact are settled, the accused remains
entitled to raise a question of law on the scope and reach, if not validity, of Section 89(b).
I am not arguing that Section 89(b) is invalid, but I am defending Tevess putative right to
argue in such manner, or to be allowed the opportunity to raise any similarly-oriented
arguments pertaining to the provision. It may run counterintuitive to sustain a legal doctrine
that extenuates the penalty of the seemingly or obviously guilty, but precisely our Constitution
is a document that is not necessarily attuned to common sense if legal sense dictates
otherwise. Thus, the Constitution regards every criminally accused as innocent at the onset of
trial, even an accused who murders another person in front of live television cameras to the
horror of millions who witnessed the crime on their television sets. In such an instance,
everybody "knows" that the accused is guilty, yet a judicial trial still becomes necessary to
warrant for a conviction conformably to the dictates of due process. 18 It should be kept in mind
that the question of guilt is not merely a factual question of did he/she do it, such being the
usual treatment in the court of public opinion. In legal contemplation, it also requires a
determination of several possible legal questions such as "is he/she justified in committing the
culpable act;"19 "is he/she exempt from criminal liability despite committing the culpable act;" 20
or even whether the acts committed actually constitute an offense. It is thus very possible that
even if it has been factually established that the accused had committed the acts constituting
a crime, acquittal may still be legally ordained.
Therefore, it was not satisfactory on the part of the Sandiganbayan to have relied merely on
the uncontroverted fact that Teves had a financial or pecuniary interest in the cockpit despite
the prohibition under Section 89(b). That was not the charge lodged in the Information, nor is it

even necessarily included in the offense actually alleged in the Information. The Anti-Graft
Courts conclusion of guilt is based on a de novo finding which the accused had neither an
opportunity to defend against, nor even would have expected as a proper matter of inquiry
considering the silence of the Information or the trial proceedings on the question of Section
89(b).
Even more galling is that nowhere in the Information is it even alleged that maintaining
an interest in a cockpit is actually illegal. Not only is the charge sheet silent as to which
law was violated, but such fact of owning an interest in a cockpit actually constitutes
an offense. For that reason, I am confident that my view does not run counter to the well
settled ruling of the Court in U.S. v. Tolentino21 that "where an offense may be committed in
any several different modes, and the offense is alleged to have been committed in two or
modes specified, it is sufficient to prove the offense committed in any one of them, provided
that it be such as to constitute the substantive offense." 22 The Information was crafted in such
a way that only one particular offense was charged, and the alleged manner through which
such offense was committed did not constitute ground for conviction for another offense.
There may have been stronger basis to uphold the conviction had the Information
alleged that the mere act of possession of the pecuniary interest in the cockpit was in
itself a violation of law, even if which law transgressed was not denominated in the
Information. At least in such a case, Teves would have been put on guard that the
legality of his ownership of the cockpit was a controversial issue and thus prepared
accordingly, even if it would have to entail his having to research as to which law was
actually violated by his ownership. But the Information herein is not so formulated. It
was evidently crafted by persons who had no intention of putting into issue the illegality of
Teves ownership of the cockpit, but arguing instead that Teves illegally abused his office by
issuing a license in connection with such cockpit.
My submission to acquit Edgar Teves necessarily results in the acquittal of his wife, Teresita.
She is charged as a conspirator to the commission of her husbands felonious acts, and thus
the exoneration of her husband should lead to a similar result in her favor. This observation is
made without disputing the finding of the majority that there is no sufficient evidence that
Teresita Teves conspired with her husband to commit a violation of Section 3(h) of the AntiGraft Law.
Perhaps there is some reluctance in acquitting a public official accused of malfeasance in
connection with the public office held. Such a result bolsters the general government crusade
against graft and corruption, and is usually popular with the public at large. Still, the most vital
essence of the democratic way of life is the protection of the bedrock guarantees extended by
the Constitution to all persons regardless of rank. These rights cannot be bargained away,
especially when they stand as the sole barrier to the deprivation of ones cherished right to
liberty. A due process violation cannot be obviated by the technical application of a procedural
rule.
I cannot join the Court in giving imprimatur to a conviction for a crime against which the
accused was deprived the opportunity to defend himself. I respectfully DISSENT, and vote to
ACQUIT Edgar and Teresita Teves.
Footnotes
1
Rollo, 30-47.
2
Id., 52-53.

Id., 56-63.
Rollo, 69-71.
5
Id., 80-81.
6
Id., 72-79.
7
Id., 82-90, 93.
8
Id., 30-47.
9
Id., 46.
10
Rollo, 8-29.
11
Id., 139.
12
Id., 152-169.
13
Id., 194.
14
Rollo, 43.
15
Section 447. Powers, Duties, Functions and Compensation. (a) The sangguniang bayan,
as the legislative body of the municipality, shall enact ordinances, approve resolutions and
appropriate funds for the general welfare of the municipality and its inhabitants pursuant to
Section 16 of this Code and in the proper exercise of the corporate powers of the municipality
as provided for under Section 22 of this Code, and shall

(3) Subject to the provisions of Book II of this Code, grant franchises, enact ordinances
authorizing the issuance of permit or licenses, or enact ordinances levying taxes, fees and
charges upon such conditions and for such purposes intended to promote the general welfare
of the inhabitants of the municipality, and pursuant to this legislative authority shall:

(v) Any law to the contrary notwithstanding, authorize and license the establishment,
operation, and maintenance of cockpits, and regulate cockfighting and commercial
breeding of gamecocks: Provided, that existing rights should not be prejudiced. [Emphasis
supplied].
16
Section 146 (1), B.P. Blg. 337.
17
Section 446. Composition (a) The sangguniang bayan, the legislative body of the
municipality, shall be composed of the municipal vice mayor as the presiding officer, the
regular sanggunian members, the president of the municipal chapter of the liga ng mga
barangay, the president of the pambayang pederasyon ng mga sangguniang kabataan, and
the sectoral representatives, as members.
18
Exh. "R," Rollo, 317.
19
Exh. "A," Rollo, 298.
20
Exh. "B," Rollo, 299.
21
Section 3 (ee), Rule 131, Rules on Evidence.
22
Exh. "E," Rollo, 302.
23
Laxamana v. Baltazar, 92 Phil. 32, 35 (1952).
24
Wil Wilhemsen, Inc v. Baluyut, Nos. L-27350-51, 11 May 19778, 83 SCRA 38, 53; Leveriza
v. Intermediate Appellate Court, No. L-66614, 25 January 1988, 157 SCRA 282.
25
City of Naga v. Agna, No. L-36049, 31 May 1976, 71 SCRA 176.
26
SEC. 41. Officials not to Engage in Business Transactions or Possess Pecuniary Interest.
It shall be unlawful for any local government official, directly or indirectly, individually or as a
member of a firm:
4

(1) To engage in any business transaction with the local government unit of which he is an
official or over which he has power of supervision, or with any of its authorized officials,
boards, agents, or attorneys, whereby money is to be paid, or property or any other thing of
value is to be transferred, directly or indirectly, out of the resources of the local government
unit to such person or firm;
(2) To purchase any real estate or other property forfeited in favor of such unit which shall be
sold for unpaid taxes or assessment, or by virtue of legal process at the suit of said unit;
(3) To be a surety for any person having contract or doing business with the local government
unit for the performance of which surety may be required.
27
Lecaroz v. Sandiganbayan, 364 Phil. 890, 911 (1999), citing Magsuci v. Sandiganbayan, 310
Phil. 14,19 (1995).
28
Id.
29
Pecho v. Sandiganbayan, 331 Phil. 6 (1996).
30
Exh. "F," Rollo, 303.
31
Exh. "J," Rollo, 306.
32
Exh. "M," Rollo, 311.
33
Exh. "I," Rollo, 307.
34
Exh. "N," Rollo, 312.
35
Timbal v. Court of Appeals, G.R. No. 136487, 14 December 2001, 372 SCRA 358 citing
People v. Quindipan, 323 Phil. 497, 507 (1996).
TINGA, J.:
1
See Section 14(2), Art. III, Const.
2
See People v. Despavellador, 110 Phil. 800, 804 (1961).
3
See People v. Tudtud, G.R. No. 14037, 26 September 2003, 412 SCRA 142, 168.
4
"Once it is shown or determined that a variance exists, the issue is whether the variance is
material or prejudicial, so that it affects substantial rights of the accused." 41 Am Jur 2d 259;
citing cases.
5
Republic Act No. 3019.
6
Rollo, p. 52.
7
Id. at 44.
8
Koh Tieck Heng v. People, G.R. Nos. 48535-36, 21 December 1990, 192 SCRA 533, 543;
citing U.S. v. Campo, 23 Phil. 368 (1912); Esguerra v. People, 108 Phil. 1078 (1960); People
v. Despavellador, 110 Phil. 800 (1961). "Having the right to be informed of the criminal charge
that he or she is to meet at trial, the accused cannot be tried for or convicted of an offense not
charged in the indictment or information. Put simply, not only must the government prove the
crime it charges, it must charge the crime it proves." 41 Am Jur 2d 257, citing cases.
9
21 Am Jur 2d 325.
10
Decision, pp. 10-11.
11
"An indictment for a particular offense serves as an indictment for all included offenses,
even though the latter are not specifically set forth in the indictment" 41 Am Jur 2d 259; citing
People v. Schmidt, 126 Ill 2d 179, 127 Ill Dec 816, 533 NE2d 898, 1988 Ill LEXIS 187.
12
Decision, p. 9-10.
13
108 Phil. 1078 (1960).
14
Id. at 1082.
15
Id. at 1083-1084.
16
See Rollo, pp. 32-36.

17

No testimonial evidence was received into evidence, the parties agreeing to the authenticity
of the documentary evidence. Rollo, p. 31.
18
"The right to a fair and impartial trial applies whether an accused is innocent or guilty and is
in no degree impaired or diminished by the strength or compelling character of the evidence
against him." 21 Am Jur 2d 234. "If an accused has not been afforded a fair trial before an
impartial tribunal, it is obvious that he has not been afforded due process." B. Schwartz,
Constitutional Law (1972), at 206.
19
See Article 11, Revised Penal Code, pertaining to Justifying Circumstances.
20
See Article 12, Revised Penal Code, pertaining to Exempting Circumstances.
21
5 Phil. 682 (1906).
22
U.S. v. Tolentino, supra note 11, at 685. See also Jurado v. Suy Yan, 148 Phil. 677, 686
(1971); Ko Bu Lin v. Court of Appeals, 204 Phil. 211, 220 (1982).

SECOND DIVISION
G.R. No. 144681

June 21, 2004

PROFESSIONAL REGULATION COMMISSION (PRC), CHAIRMAN HERMOGENES P.

POBRE, ASSOCIATE COMMISSIONER ARMANDO PASCUAL, BOARD OF MEDICINE,
CHAIRMAN RODOLFO P. DE GUZMAN, JOSE S. RAMIREZ, JUANITO B. BILLOTE,
RUBEN R. POLICARPIO, EDGARDO T. FERNANDO and RICARDO D. FULGENCIO II,
petitioners,
vs.
ARLENE V. DE GUZMAN, VIOLETA V. MENESES, CELERINA S. NAVARRO, JOSE
RAMONCITO P. NAVARRO, ARNEL V. HERRERA and GERALDINE ELIZABETH M.
PAGILAGAN, ELNORA R. RAQUENO, MARISSA A. REGODON, LAURA M. SANTOS,
KARANGALAN D. SERRANO, DANILO A. VILLAVER, MARIA ROSARIO L. LEONOR,
ALICIA S. LIZANO, MARITEL M. ECHIVERRI, BERNADETTE T. MENDOZA, FERNANDO F.
MANDAPAT, ALELI A. GOLLAYAN, ELCIN C. ARRIOLA, HERMINIGILDA E. CONEJOS,
SALLY B. BUNAGAN, ROGELIO B. ANCHETA, OSCAR H. PADUA, JR., EVELYN D.
GRAJO, EVELYN S. ACOSTA, MARGARITA BELINDA L. VICENCIO, VALENTINO P.
ARBOLEDA, EVELYN O. RAMOS, ACHILLES J. PERALTA, CORAZON M. CRUZ,
LEUVINA P. CHICO, JOSEPH A. JAO, MA. LUISA S. GUTIERREZ, LYDIA C. CHAN,
OPHELIA C. HIDALGO, FERNANDO T. CRUZ, MELVIN M. USITA, RAFAEL I. TOLENTINO,
GRACE E. UY, CHERYL R. TRIGUERO, MICHAEL L. SERRANO, FEDERICO L.
CASTILLO, MELITA J. CAEDO, SAMUEL B. BANGOY, BERNARDITA B. SY, GLORIA T.
JULARBAL, FREDERICK D. FRANCISCO, CARLOS M. BERNARDO, JR., HUBERT S.
NAZARENO, CLARISSA B. BACLIG, DAYMINDA G. BONTUYAN, BERNADETTE H.
CABUHAT, NANCY J. CHAVEZ, MARIO D. CUARESMA, ERNESTO L. CUE, EVELYN C.
CUNDANGAN, RHONEIL R. DEVERATURDA, DERILEEN D. DORADO, SAIBZUR N.
EDDING, VIOLETA C. FELIPE, HERMINIO V. FERNANDEZ, JR., MARIA VICTORIA M.
LACSAMANA, NORMA G. LAFAVILLA, RUBY B. LANTIN, MA. ELOISA Q. MALLARI,
CLARISA SJ. NICOLAS, PERCIVAL H. PANGILINAN, ARNULFO A. SALVADOR, ROBERT
B. SANCHEZ, MERLY D. STA. ANA and YOLANDA P. UNICA, respondents.
DECISION
TINGA, J.:

Republic of the Philippines

SUPREME COURT
Manila

This petition for review under Rule 45 of the 1997 Rules of Civil Procedure seeks to nullify the
D E C I S I O N,1 dated May 16, 2000, of the Court of Appeals in CA-G.R. SP No. 37283. The
appellate court affirmed the judgment2 dated December 19, 1994, of the Regional Trial Court
(RTC) of Manila, Branch 52, in Civil Case No. 93-66530. The trial court allowed the
respondents to take their physicians oath and to register as duly licensed physicians. Equally
challenged is the R E S O L U T I O N3 promulgated on August 25, 2000 of the Court of
Appeals, denying petitioners Motion for Reconsideration.
The facts of this case are as follows:
The respondents are all graduates of the Fatima College of Medicine, Valenzuela
City, Metro Manila. They passed the Physician Licensure Examination conducted in

February 1993 by the Board of Medicine (Board). Petitioner Professional Regulation

Commission (PRC) then released their names as successful examinees in the
medical licensure examination.
Shortly thereafter, the Board observed that the grades of the seventy-nine
successful examinees from Fatima College in the two most difficult subjects in the
medical licensure exam, Biochemistry (Bio-Chem) and Obstetrics and Gynecology
(OB-Gyne), were unusually and exceptionally high. Eleven Fatima examinees
scored 100% in Bio-Chem and ten got 100% in OB-Gyne, another eleven got 99%
in Bio-Chem, and twenty-one scored 99% in OB-Gyne. The Board also observed
that many of those who passed from Fatima got marks of 95% or better in both
subjects, and no one got a mark lower than 90%. A comparison of the performances
of the candidates from other schools was made. The Board observed that strangely,
the unusually high ratings were true only for Fatima College examinees. It was a
record-breaking phenomenon in the history of the Physician Licensure Examination.
On June 7, 1993, the Board issued Resolution No. 19, withholding the registration as
physicians of all the examinees from the Fatima College of Medicine. 4 The PRC asked the
National Bureau of Investigation (NBI) to investigate whether any anomaly or irregularity
marred the February 1993 Physician Licensure Examination.
Prior to the NBI investigation, the Board requested Fr. Bienvenido F. Nebres, S.J., an expert
mathematician and authority in statistics, and later president of the Ateneo de Manila
University, to conduct a statistical analysis of the results in Bio-Chem and Ob-Gyne of the said
examination.
On June 10, 1993, Fr. Nebres submitted his report. He reported that a comparison of the
scores in Bio-Chem and Ob-Gyne, of the Fatima College examinees with those of examinees
from De La Salle University and Perpetual Help College of Medicine showed that the scores of
Fatima College examinees were not only incredibly high but unusually clustered close to each
other. He concluded that there must be some unusual reason creating the clustering of scores
in the two subjects. It must be a cause "strong enough to eliminate the normal variations that
one should expect from the examinees [of Fatima College] in terms of talent, effort, energy,
etc."5
For its part, the NBI found that "the questionable passing rate of Fatima examinees in the
[1993] Physician Examination leads to the conclusion that the Fatima examinees gained early
access to the test questions."6
On July 5, 1993, respondents Arlene V. De Guzman, Violeta V. Meneses, Celerina S. Navarro,
Jose Ramoncito P. Navarro, Arnel V. Herrera, and Geraldine Elizabeth M. Pagilagan (Arlene V.
De Guzman et al., for brevity) filed a special civil action for mandamus, with prayer for
preliminary mandatory injunction docketed as Civil Case No. 93-66530 with the Regional Trial
Court (RTC) of Manila, Branch 52. Their petition was adopted by the other respondents as
intervenors.
Meanwhile, the Board issued Resolution No. 26, dated July 21, 1993, charging respondents
with "immorality, dishonest conduct, fraud, and deceit" in connection with the Bio-Chem and
Ob-Gyne examinations. It recommended that the test results of the Fatima examinees be
nullified. The case was docketed as Adm. Case No. 1687 by the PRC.
On July 28, 1993, the RTC issued an Order in Civil Case No. 93-66530 granting the
preliminary mandatory injunction sought by the respondents. It ordered the petitioners to

administer the physicians oath to Arlene V. De Guzman et al., and enter their names in the
rolls of the PRC.
The petitioners then filed a special civil action for certiorari with the Court of Appeals to set
aside the mandatory injunctive writ, docketed as CA-G.R. SP No. 31701.
On October 21, 1993, the appellate court decided CA-G.R. SP No. 31701, with the dispositive
portion of the Decision ordaining as follows:
WHEREFORE, this petition is GRANTED. Accordingly, the writ of preliminary
mandatory injunction issued by the lower court against petitioners is hereby nullified
and set aside.
SO ORDERED.7
Arlene V. de Guzman, et al., then elevated the foregoing Decision to this Court in G.R. No.
112315. In our Resolution dated May 23, 1994, we denied the petition for failure to show
reversible error on the part of the appellate court.
Meanwhile, on November 22, 1993, during the pendency of the instant petition, the pre-trial
conference in Civil Case No. 93-66530 was held. Then, the parties, agreed to reduce the
testimonies of their respective witnesses to sworn questions-and-answers. This was without
prejudice to cross-examination by the opposing counsel.
On December 13, 1993, petitioners counsel failed to appear at the trial in the mistaken belief
that the trial was set for December 15. The trial court then ruled that petitioners waived their
right to cross-examine the witnesses.
On January 27, 1994, counsel for petitioners filed a Manifestation and Motion stating the
reasons for her non-appearance and praying that the cross-examination of the witnesses for
the opposing parties be reset. The trial court denied the motion for lack of notice to adverse
counsel. It also denied the Motion for Reconsideration that followed on the ground that
adverse counsel was notified less than three (3) days prior to the hearing.
Meanwhile, to prevent the PRC and the Board from proceeding with Adm. Case No. 1687, the
respondents herein moved for the issuance of a restraining order, which the lower court
granted in its Order dated April 4, 1994.
The petitioners then filed with this Court a petition for certiorari docketed as G.R. No. 115704,
to annul the Orders of the trial court dated November 13, 1993, February 28, 1994, and April
4, 1994. We referred the petition to the Court of Appeals where it was docketed as CA-G.R.
SP No. 34506.
On August 31, 1994, the appellate court decided CA-G.R. SP No. 34506 as follows:
WHEREFORE, the present petition for certiorari with prayer for temporary
restraining order/preliminary injunction is GRANTED and the Orders of December
13, 1993, February 7, 1994, February 28, 1994, and April 4, 1994 of the RTCManila, Branch 52, and all further proceedings taken by it in Special Civil Action No.
93-66530 are hereby DECLARED NULL and VOID. The said RTC-Manila is ordered
to allow petitioners counsel to cross-examine the respondents witnesses, to allow
petitioners to present their evidence in due course of trial, and thereafter to decide
the case on the merits on the basis of the evidence of the parties. Costs against
respondents.
IT IS SO ORDERED.8
The trial was then set and notices were sent to the parties.
A day before the first hearing, on September 22, 1994, the petitioners filed an Urgent Ex-Parte
Manifestation and Motion praying for the partial reconsideration of the appellate courts

decision in CA-G.R. SP No. 34506, and for the outright dismissal of Civil Case No. 93-66530.
The petitioners asked for the suspension of the proceedings.
In its Order dated September 23, 1994, the trial court granted the aforesaid motion, cancelled
the scheduled hearing dates, and reset the proceedings to October 21 and 28, 1994.
Meanwhile, on October 25, 1994, the Court of Appeals denied the partial motion for
reconsideration in CA-G.R. SP No. 34506. Thus, petitioners filed with the Supreme Court a
petition for review docketed as G.R. No. 117817, entitled Professional Regulation
Commission, et al. v. Court of Appeals, et al.
On November 11, 1994, counsel for the petitioners failed to appear at the trial of Civil Case
No. 93-66530. Upon motion of the respondents herein, the trial court ruled that herein
petitioners waived their right to cross-examine the herein respondents. Trial was reset to
November 28, 1994.
On November 25, 1994, petitioners counsel moved for the inhibition of the trial court judge for
alleged partiality. On November 28, 1994, the day the Motion to Inhibit was to be heard,
petitioners failed to appear. Thus, the trial court denied the Motion to Inhibit and declared Civil
Case No. 93-66530 deemed submitted for decision.
On December 19, 1994, the trial court handed down its judgment in Civil Case No. 93-66530,
the fallo of which reads:
WHEREFORE, judgment is rendered ordering the respondents to allow the
petitioners and intervenors (except those with asterisks and footnotes in pages 1 &
2 of this decision) [sic],9 to take the physicians oath and to register them as
physicians.
It should be made clear that this decision is without prejudice to any administrative
disciplinary action which may be taken against any of the petitioners for such
causes and in the manner provided by law and consistent with the requirements of
the Constitution as any other professionals.
No costs.
SO ORDERED.10
As a result of these developments, petitioners filed with this Court a petition for review on
certiorari docketed as G.R. No. 118437, entitled Professional Regulation Commission v. Hon.
David G. Nitafan, praying inter alia, that (1) G.R. No. 118437 be consolidated with G.R. No.
117817; (2) the decision of the Court of Appeals dated August 31, 1994 in CA-G.R. SP No.
34506 be nullified for its failure to decree the dismissal of Civil Case No. 93-66530, and in the
alternative, to set aside the decision of the trial court in Civil Case No. 93-66530, order the trial
court judge to inhibit himself, and Civil Case No. 93-66530 be re-raffled to another branch.
On December 26, 1994, the petitioners herein filed their Notice of Appeal11 in Civil Case No.
93-66530, thereby elevating the case to the Court of Appeals, where it was docketed as CAG.R. SP No. 37283.
In our Resolution of June 7, 1995, G.R. No. 118437 was consolidated with G.R. No. 117817.
On July 9, 1998, we disposed of G.R. Nos. 117817 and 118437 in this wise:
WHEREFORE, the petition in G.R. No. 117817 is DISMISSED for being moot. The
petition in G.R. No. 118437 is likewise DISMISSED on the ground that there is a
pending appeal before the Court of Appeals. Assistant Solicitor General Amparo M.
Cabotaje-Tang is advised to be more circumspect in her dealings with the courts as
a repetition of the same or similar acts will be dealt with accordingly.
SO ORDERED.12

While CA-G.R. SP No. 37283 was awaiting disposition by the appellate court, Arnel V.
Herrera, one of the original petitioners in Civil Case No. 93-66530, joined by twenty-seven
intervenors, to wit: Fernando F. Mandapat, Ophelia C. Hidalgo, Bernadette T. Mendoza, Ruby
B. Lantin-Tan, Fernando T. Cruz, Marissa A. Regodon, Ma. Eloisa Q. Mallari-Largoza, Cheryl
R. Triguero, Joseph A. Jao, Bernadette H. Cabuhat, Evelyn S. Acosta-Cabanes, Laura M.
Santos, Maritel M. Echiverri, Bernadette C. Escusa, Carlosito C. Domingo, Alicia S. Lizano,
Elnora R. Raqueno-Rabaino, Saibzur N. Edding, Derileen D. Dorado-Edding, Robert B.
Sanchez, Maria Rosario L. Leonor-Lacandula, Geraldine Elizabeth M. Pagilagan-Palma,
Margarita Belinda L. Vicencio-Gamilla, Herminigilda E. Conejos, Leuvina P. Chico-Paguio,
Elcin C. Arriola-Ocampo, and Jose Ramoncito P. Navarro, manifested that they were no longer
interested in proceeding with the case and moved for its dismissal. A similar manifestation and
motion was later filed by intervenors Mary Jean I. Yeban-Merlan, Michael L. Serrano, Norma
G. Lafavilla, Arnulfo A. Salvador, Belinda C. Rabara, Yolanda P. Unica, Dayminda G.
Bontuyan, Clarissa B. Baclig, Ma. Luisa S. Gutierrez, Rhoneil R. Deveraturda, Aleli A.
Gollayan, Evelyn C. Cundangan, Frederick D. Francisco, Violeta V. Meneses, Melita J.
Caedo, Clarisa SJ. Nicolas, Federico L. Castillo, Karangalan D. Serrano, Danilo A. Villaver,
Grace E. Uy, Lydia C. Chan, and Melvin M. Usita. The Court of Appeals ruled that its decision
in CA-G.R. SP No. 37283 would not apply to them.
On May 16, 2000, the Court of Appeals decided CA-G.R. SP No. 37283, with the following
fallo, to wit:
WHEREFORE, finding no reversible error in the decision appealed from, We hereby
AFFIRM the same and DISMISS the instant appeal.
No pronouncement as to costs.
SO ORDERED.13
In sustaining the trial courts decision, the appellate court ratiocinated that the respondents
complied with all the statutory requirements for admission into the licensure examination for
physicians in February 1993. They all passed the said examination. Having fulfilled the
requirements of Republic Act No. 2382,14 they should be allowed to take their oaths as
physicians and be registered in the rolls of the PRC.
Hence, this petition raising the following issues:
I
WHETHER OR NOT RESPONDENTS HAVE A VALID CAUSE OF ACTION FOR
MANDAMUS AGAINST PETITIONERS IN THE LIGHT OF THE RESOLUTION OF THIS
HONORABLE COURT IN G.R. NO. 112315 AFFIRMING THE COURT OF APPEALS
DECISION DECLARING THAT IF EVER THERE IS SOME DOUBT AS TO THE MORAL
FITNESS OF EXAMINEES, THE ISSUANCE OF LICENSE TO PRACTICE MEDICINE IS
NOT AUTOMATICALLY GRANTED TO THE SUCCESSFUL EXAMINEES.
II
WHETHER OR NOT THE PETITION FOR MANDAMUS COULD PROCEED DESPITE THE
PENDENCY OF ADMINISTRATIVE CASE NO. 1687, WHICH WAS PRECISELY LODGED TO
DETERMINE THE MORAL FITNESS OF RESPONDENTS TO BECOME DOCTORS. 15
To our mind, the only issue is: Did the Court of Appeals commit a reversible error of law in
sustaining the judgment of the trial court that respondents are entitled to a writ of mandamus?
The petitioners submit that a writ of mandamus will not lie in this case. They point out that for
a writ of mandamus to issue, the applicant must have a well-defined, clear and certain legal
right to the thing demanded and it is the duty of the respondent to perform the act required.

Thus, mandamus may be availed of only when the duty sought to be performed is a ministerial
and not a discretionary one. The petitioners argue that the appellate courts decision in CAG.R. SP No. 37283 upholding the decision of the trial court in Civil Case No. 93-66530
overlooked its own pronouncement in CA-G.R. SP No. 31701. The Court of Appeals held in
CA-G.R. SP No. 31701 that the issuance of a license to engage in the practice of medicine
becomes discretionary on the PRC if there exists some doubt that the successful examinee
has not fully met the requirements of the law. The petitioners stress that this Courts
Resolution dated May 24, 1994 in G.R. No. 112315 held that there was no showing "that the
Court of Appeals had committed any reversible error in rendering the questioned judgment" in
CA-G.R. SP No. 31701. The petitioners point out that our Resolution in G.R. No. 112315 has
long become final and executory.
Respondents counter that having passed the 1993 licensure examinations for physicians, the
petitioners have the obligation to administer to them the oath as physicians and to issue their
certificates of registration as physicians pursuant to Section 20 16 of Rep. Act No. 2382. The
Court of Appeals in CA-G.R. SP No. 37283, found that respondents complied with all the
requirements of Rep. Act No. 2382. Furthermore, respondents were admitted by the Medical
Board to the licensure examinations and had passed the same. Hence, pursuant to Section 20
of Rep. Act No. 2382, the petitioners had the obligation to administer their oaths as physicians
and register them.
Mandamus is a command issuing from a court of competent jurisdiction, in the name of the
state or the sovereign, directed to some inferior court, tribunal, or board, or to some
corporation or person requiring the performance of a particular duty therein specified, which
duty results from the official station of the party to whom the writ is directed, or from operation
of law.17 Section 3 of Rule 6518 of the 1997 Rules of Civil Procedure outlines two situations
when a writ of mandamus may issue, when any tribunal, corporation, board, officer or person
unlawfully (1) neglects the performance of an act which the law specifically enjoins as a duty
resulting from an office, trust, or station; or (2) excludes another from the use and enjoyment
of a right or office to which the other is entitled.
We shall discuss the issues successively.
1. On The Existence of a Duty of the Board of Medicine To Issue Certificates of Registration
as Physicians under Rep. Act No. 2382.
For mandamus to prosper, there must be a showing that the officer, board, or official
concerned, has a clear legal duty, not involving discretion. 19 Moreover, there must be statutory
authority for the performance of the act,20 and the performance of the duty has been refused. 21
Thus, it must be pertinently asked now: Did petitioners have the duty to administer the
Hippocratic Oath and register respondents as physicians under the Medical Act of 1959?
As found by the Court of Appeals, on which we agree on the basis of the records:
It bears emphasizing herein that petitioner-appellees and intervenor-appellees have
fully complied with all the statutory requirements for admission into the licensure
examinations for physicians conducted and administered by the respondentappellants on February 12, 14, 20 and 21, 1993. Stress, too, must be made of the
fact that all of them successfully passed the same examinations. 22
The crucial query now is whether the Court of Appeals erred in concluding that petitioners
should allow the respondents to take their oaths as physicians and register them, steps which
would enable respondents to practice the medical profession 23 pursuant to Section 20 of the
Medical Act of 1959?

The appellate court relied on a single provision, Section 20 of Rep. Act No. 2382, in
concluding that the petitioners had the ministerial obligation to administer the Hippocratic Oath
to respondents and register them as physicians. But it is a basic rule in statutory construction
that each part of a statute should be construed in connection with every other part to produce
a harmonious whole, not confining construction to only one section. 24 The intent or meaning of
the statute should be ascertained from the statute taken as a whole, not from an isolated part
of the provision. Accordingly, Section 20, of Rep. Act No. 2382, as amended should be read in
conjunction with the other provisions of the Act. Thus, to determine whether the petitioners
had the ministerial obligation to administer the Hippocratic Oath to respondents and register
them as physicians, recourse must be had to the entirety of the Medical Act of 1959.
A careful reading of Section 20 of the Medical Act of 1959 discloses that the law uses the word
"shall" with respect to the issuance of certificates of registration. Thus, the petitioners "shall
sign and issue certificates of registration to those who have satisfactorily complied with the
requirements of the Board." In statutory construction the term "shall" is a word of command. It
is given imperative meaning. Thus, when an examinee satisfies the requirements for the grant
of his physicians license, the Board is obliged to administer to him his oath and register him
as a physician, pursuant to Section 20 and par. (1) of Section 22 25 of the Medical Act of 1959.
However, the surrounding circumstances in this case call for serious inquiry concerning the
satisfactory compliance with the Board requirements by the respondents. The unusually high
scores in the two most difficult subjects was phenomenal, according to Fr. Nebres, the
consultant of PRC on the matter, and raised grave doubts about the integrity, if not validity, of
the tests. These doubts have to be appropriately resolved.
Under the second paragraph of Section 22, the Board is vested with the power to conduct
administrative investigations and "disapprove applications for examination or registration,"
pursuant to the objectives of Rep. Act No. 2382 as outlined in Section 1 26 thereof. In this case,
after the investigation, the Board filed before the PRC, Adm. Case No. 1687 against the
respondents to ascertain their moral and mental fitness to practice medicine, as required by
Section 927 of Rep. Act No. 2382. In its Decision dated July 1, 1997, the Board ruled:
WHEREFORE, the BOARD hereby CANCELS the respondents[] examination
papers in the Physician Licensure Examinations given in February 1993 and further
DEBARS them from taking any licensure examination for a period of ONE (1) YEAR
from the date of the promulgation of this DECISION. They may, if they so desire,
apply for the scheduled examinations for physicians after the lapse of the period
imposed by the BOARD.
SO ORDERED.28
Until the moral and mental fitness of the respondents could be ascertained, according to
petitioners, the Board has discretion to hold in abeyance the administration of the Hippocratic
Oath and the issuance of the certificates to them. The writ of mandamus does not lie to
compel performance of an act which is not duly authorized.
The respondents nevertheless argue that under Section 20, the Board shall not issue a
certificate of registration only in the following instances: (1) to any candidate who has been
convicted by a court of competent jurisdiction of any criminal offense involving moral turpitude;
(2) or has been found guilty of immoral or dishonorable conduct after the investigation by the
Board; or (3) has been declared to be of unsound mind. They aver that none of these
circumstances are present in their case.

Petitioners reject respondents argument. We are informed that in Board Resolution No. 26, 29
dated July 21, 1993, the Board resolved to file charges against the examinees from Fatima
College of Medicine for "immorality, dishonesty, fraud, and deceit in the Obstetrics-Gynecology
and Biochemistry examinations." It likewise sought to cancel the examination results obtained
by the examinees from the Fatima College.
Section 830 of Rep. Act No. 2382 prescribes, among others, that a person who aspires to
practice medicine in the Philippines, must have "satisfactorily passed the corresponding Board
Examination." Section 22, in turn, provides that the oath may only be administered "to
physicians who qualified in the examinations." The operative word here is "satisfactorily,"
defined as "sufficient to meet a condition or obligation" or "capable of dispelling doubt or
ignorance."31 Gleaned from Board Resolution No. 26, the licensing authority apparently did not
find that the respondents "satisfactorily passed" the licensure examinations. The Board
instead sought to nullify the examination results obtained by the respondents.
2. On the Right Of The Respondents To Be Registered As Physicians
The function of mandamus is not to establish a right but to enforce one that has been
established by law. If no legal right has been violated, there can be no application of a legal
remedy, and the writ of mandamus is a legal remedy for a legal right. 32 There must be a welldefined, clear and certain legal right to the thing demanded. 33 It is long established rule that a
license to practice medicine is a privilege or franchise granted by the government. 34
It is true that this Court has upheld the constitutional right 35 of every citizen to select a
profession or course of study subject to a fair, reasonable, and equitable admission and
academic requirements.36 But like all rights and freedoms guaranteed by the Charter, their
exercise may be so regulated pursuant to the police power of the State to safeguard health,
morals, peace, education, order, safety, and general welfare of the people. 37 Thus, persons
who desire to engage in the learned professions requiring scientific or technical knowledge
may be required to take an examination as a prerequisite to engaging in their chosen careers.
This regulation takes particular pertinence in the field of medicine, to protect the public from
the potentially deadly effects of incompetence and ignorance among those who would practice
medicine. In a previous case, it may be recalled, this Court has ordered the Board of Medical
Examiners to annul both its resolution and certificate authorizing a Spanish subject, with the
degree of Licentiate in Medicine and Surgery from the University of Barcelona, Spain, to
practice medicine in the Philippines, without first passing the examination required by the
Philippine Medical Act.38 In another case worth noting, we upheld the power of the State to
upgrade the selection of applicants into medical schools through admission tests. 39
It must be stressed, nevertheless, that the power to regulate the exercise of a profession or
pursuit of an occupation cannot be exercised by the State or its agents in an arbitrary,
despotic, or oppressive manner. A political body that regulates the exercise of a particular
privilege has the authority to both forbid and grant such privilege in accordance with certain
conditions. Such conditions may not, however, require giving up ones constitutional rights as a
condition to acquiring the license.40 Under the view that the legislature cannot validly bestow
an arbitrary power to grant or refuse a license on a public agency or officer, courts will
generally strike down license legislation that vests in public officials discretion to grant or
refuse a license to carry on some ordinarily lawful business, profession, or activity without
prescribing definite rules and conditions for the guidance of said officials in the exercise of
their power.41

In the present case, the aforementioned guidelines are provided for in Rep. Act No. 2382, as
amended, which prescribes the requirements for admission to the practice of medicine, the
qualifications of candidates for the board examinations, the scope and conduct of the
examinations, the grounds for denying the issuance of a physicians license, or revoking a
license that has been issued. Verily, to be granted the privilege to practice medicine, the
applicant must show that he possesses all the qualifications and none of the disqualifications.
Furthermore, it must appear that he has fully complied with all the conditions and
requirements imposed by the law and the licensing authority. Should doubt taint or mar the
compliance as being less than satisfactory, then the privilege will not issue. For said privilege
is distinguishable from a matter of right, which may be demanded if denied. Thus, without a
definite showing that the aforesaid requirements and conditions have been satisfactorily met,
the courts may not grant the writ of mandamus to secure said privilege without thwarting the
legislative will.
3. On the Ripeness of the Petition for Mandamus
Lastly, the petitioners herein contend that the Court of Appeals should have dismissed the
petition for mandamus below for being premature. They argue that the administrative
remedies had not been exhausted. The records show that this is not the first time that
petitioners have sought the dismissal of Civil Case No. 93-66530. This issue was raised in
G.R. No. 115704, which petition we referred to the Court of Appeals, where it was docketed as
CA-G.R. SP No. 34506. On motion for reconsideration in CA-G.R. SP No. 34506, the
appellate court denied the motion to dismiss on the ground that the prayers for the nullification
of the order of the trial court and the dismissal of Civil Case No. 93-66530 were inconsistent
reliefs. In G.R. No. 118437, the petitioners sought to nullify the decision of the Court of
Appeals in CA-G.R. SP No. 34506 insofar as it did not order the dismissal of Civil Case No.
93-66530. In our consolidated decision, dated July 9, 1998, in G.R. Nos. 117817 & 118437,
this Court speaking through Justice Bellosillo opined that:
Indeed, the issue as to whether the Court of Appeals erred in not ordering the
dismissal of Civil Case No. 93-66530 sought to be resolved in the instant petition
has been rendered meaningless by an event taking place prior to the filing of this
petition and denial thereof should follow as a logical consequence. 42 There is no
longer any justiciable controversy so that any declaration thereon would be of no
practical use or value.43 It should be recalled that in its decision of 19 December
1994 the trial court granted the writ of mandamus prayed for by private respondents,
which decision was received by petitioners on 20 December 1994. Three (3) days
after, or on 23 December 1994, petitioners filed the instant petition. By then, the
remedy available to them was to appeal the decision to the Court of Appeals, which
they in fact did, by filing a notice of appeal on 26 December 1994. 44
The petitioners have shown no cogent reason for us to reverse the aforecited ruling. Nor will
their reliance upon the doctrine of the exhaustion of administrative remedies in the instant
case advance their cause any.
Section 2645 of the Medical Act of 1959 provides for the administrative and judicial remedies
that respondents herein can avail to question Resolution No. 26 of the Board of Medicine,
namely: (a) appeal the unfavorable judgment to the PRC; (b) should the PRC ruling still be
unfavorable, to elevate the matter on appeal to the Office of the President; and (c) should they
still be unsatisfied, to ask for a review of the case or to bring the case to court via a special
civil action of certiorari. Thus, as a rule, mandamus will not lie when administrative remedies

are still available.46 However, the doctrine of exhaustion of administrative remedies does not
apply where, as in this case, a pure question of law is raised. 47 On this issue, no reversible
error may, thus, be laid at the door of the appellate court in CA-G.R. SP No. 37283, when it
refused to dismiss Civil Case No. 93-66530.
As we earlier pointed out, herein respondents Arnel V. Herrera, Fernando F. Mandapat,
Ophelia C. Hidalgo, Bernadette T. Mendoza, Ruby B. Lantin-Tan, Fernando T. Cruz, Marissa
A. Regodon, Ma. Eloisa Q. Mallari-Largoza, Cheryl R. Triguero, Joseph A. Jao, Bernadette H.
Cabuhat, Evelyn S. Acosta-Cabanes, Laura M. Santos, Maritel M. Echiverri, Bernadette C.
Escusa, Carlosito C. Domingo, Alicia S. Lizano, Elnora R. Raqueno-Rabaino, Saibzur N.
Edding, Derileen D. Dorado-Edding, Robert B. Sanchez, Maria Rosario Leonor-Lacandula,
Geraldine Elizabeth M. Pagilagan-Palma, Margarita Belinda L. Vicencio-Gamilla, Herminigilda
E. Conejos, Leuvina P. Chico-Paguio, Elcin C. Arriola-Ocampo, and Jose Ramoncito P.
Navarro manifested to the Court of Appeals during the pendency of CA-G.R. SP No. 37283,
that they were no longer interested in proceeding with the case and moved for its dismissal
insofar as they were concerned. A similar manifestation and motion were later filed by
intervenors Mary Jean I. Yeban-Merlan, Michael L. Serrano, Norma G. Lafavilla, Arnulfo A.
Salvador, Belinda C. Rabarra, Yolanda P. Unica, Dayminda G. Bontuyan, Clarissa B. Baclig,
Ma. Luisa S. Gutierrez, Rhoneil R. Deveraturda, Aleli A. Gollayan, Evelyn C. Cundangan,
Frederick D. Francisco, Violeta V. Meneses, Melita J. Caedo, Clarisa SJ. Nicolas, Federico L.
Castillo, Karangalan D. Serrano, Danilo A. Villaver, Grace E. Uy, Lydia C. Chan, and Melvin M.
Usita. Following these manifestations and motions, the appellate court in CA-G.R. SP No.
37283 decreed that its ruling would not apply to them. Thus, inasmuch as the instant case is a
petition for review of the appellate courts ruling in CA-G.R. SP No. 37283, a decision which is
inapplicable to the aforementioned respondents will similarly not apply to them.
As to Achilles J. Peralta, Evelyn O. Ramos, Sally B. Bunagan, Rogelio B. Ancheta, Oscar H.
Padua, Jr., Evelyn D. Grajo, Valentino P. Arboleda, Carlos M. Bernardo, Jr., Mario D.
Cuaresma, Violeta C. Felipe, Percival H. Pangilinan, Corazon M. Cruz and Samuel B. Bangoy,
herein decision shall not apply pursuant to the Orders of the trial court in Civil Case No. 9366530, dropping their names from the suit.
Consequently, this Decision is binding only on the remaining respondents, namely: Arlene V.
de Guzman, Celerina S. Navarro, Rafael I. Tolentino, Bernardita B. Sy, Gloria T. Jularbal,
Hubert S. Nazareno, Nancy J. Chavez, Ernesto L. Cue, Herminio V. Fernandez, Jr., Maria
Victoria M. Lacsamana and Merly D. Sta. Ana, as well as the petitioners.
WHEREFORE, the instant petition is GRANTED. Accordingly, (1) the assailed decision dated
May 16, 2000, of the Court of Appeals, in CA-G.R. SP No. 37283, which affirmed the judgment
dated December 19, 1994, of the Regional Trial Court of Manila, Branch 52, in Civil Case No.
93-66530, ordering petitioners to administer the physicians oath to herein respondents as well
as the resolution dated August 25, 2000, of the appellate court, denying the petitioners motion
for reconsideration, are REVERSED and SET ASIDE; and (2) the writ of mandamus, issued in
Civil Case No. 93-66530, and affirmed by the appellate court in CA-G.R. SP No. 37283 is
NULLIFIED AND SET ASIDE.
SO ORDERED.
Puno, Quisumbing, Austria-Martinez, and Callejo, Sr., JJ., concur.
Footnotes

Rollo, pp. 44-67. Penned by Associate Justice Cancio C. Garcia, with Associate Justices
B.A. Adefuin-De la Cruz, and Renato C. Dacudao concurring.
2
CA Rollo, pp. 140-175.
3
Supra, note 1 at 408. Penned by Associate Justice Cancio C. Garcia, with Associate Justices
B.A. Adefuin-De la Cruz, and Renato C. Dacudao, concurring.
4
Id. at 69.
5
Id. at 96.
6
Id. at 92.
7
Id. at 175. Penned by Associate Justice Alfredo L. Benipayo and concurred in by Presiding
Justice Santiago M. Kapunan (later a member of the Supreme Court and now retired) and
Associate Justice Ma. Alicia Austria-Martinez (now a member of the Second Division of the
Supreme Court).
8
Rollo, pp. 199-200. Penned by Associate Justice Jaime M. Lantin, with Associate Justices
Angelina S. Gutierrez (now a member of the Supreme Court), and Conchita Carpio Morales
(likewise a present member of the Supreme Court) concurring.
9
Of the intervenors in Civil Case No. 93-66530, Achilles Peralta and Evelyn Ramos were
dropped as parties per Order of the trial court dated August 24, 1993. The case was dismissed
as to Sally Bunagan, Reogelio Ancheta, Oscar Padua, Evelyn Grajo, Valentino Arboleda,
Carlos Bernardo, Jr., Mario Cuaresma, Violeta Felipe, and Percival Pangilinan as per Order
dated November 25, 1994. Corazon Cruz and Samuel Bangoy were deemed by the trial court
no longer entitled to the avails of the suit for seeking extrajudicial relief from the Board of
Medicine, as per its Order dated November 25, 1994. See CA Rollo, pp. 140-141.
10
CA Rollo, pp. 174-175.
11
Id. at 205.
12
G.R. Nos. 117817 and 118437, 9 July 1998, 292 SCRA 155, 167. Penned by Associate
Justice Josue N. Bellosillo, with Associate Justices Hilario G. Davide, Jr., Jose C. Vitug,
Artemio V. Panganiban, and Leonardo A. Quisumbing concurring.
13
Rollo, p. 67.
14
The Medical Act of 1959.
15
Rollo, pp. 28-29.
16
SEC. 20. Issuance of Certificates of Registration, grounds for refusal of [the] same. The
Commissioner of Civil Service (now Professional Regulation Commission) the chairman, the
members and the Secretary of the Board of Medical Examiners (now Medical Board) shall
sign and issue certificates of registration to those who have satisfactorily complied with the
requirements of the Board. They shall not issue a certificate of registration to any candidate
who has been convicted by a court of competent jurisdiction of any criminal offense involving
moral turpitude, or has been found guilty of immoral or dishonorable conduct after the
investigation by the Board of Medical Examiners (now Medical Board), or has been declared
to be of unsound mind. (As amended by Rep. Act No. 4224, which took effect June 19, 1965).
17
See United States v. Boutwell, 17 Wall (US) 604, 21 L. Ed 721; Laizure v. Baker, 11 P. 2d
560; State ex rel Lyons v. McDowell, 57 A. 2d 94; Rader v. Burton, 122 N.E. 2d 856; Board of
Managers v. City of Wilmington, 70 S.E. 2d 833.
18
SEC. 3. Petition for mandamus. When any tribunal, corporation, board, officer or person
unlawfully neglects the performance of an act which the law specifically enjoins as a duty
resulting from an office, trust, or station, or unlawfully excludes another from the use and
enjoyment of a right or office to which such other is entitled, and there is no other plain,

speedy and adequate remedy in the ordinary course of law, the person aggrieved thereby may
file a verified petition in the proper court, alleging the facts with certainty and praying that
judgment be rendered commanding the respondent, immediately or at some other time to be
specified by the court, to do the act required to be done to protect the rights of the petitioner,
and to pay the damages sustained by the petitioner by reason of the wrongful acts of the
respondent.
The petition shall also contain a sworn certification of non-forum shopping as provided in the
third paragraph of section 3, Rule 46.
19
See Potter v. Anderson, 392 P. 2d 650; State ex rel Jester v. Paige, 213 P. 2d 441; State ex
rel. Sharp v. Cross, 211 P. 2d 760; St. George v. Hanson, et al., 78 S.E. 2d 885; State ex rel
Vander v. Board of County Comrs. et al., 135 N.E. 2d 701.
20
See State ex rel Jester v. Paige, supra; Pedroso v. De Walt, et al., 340 S.W. 2d 566.
21
See State Board of Barber Examiners v. Walker, 192 P. 2d 723; State ex rel Sharp v. Cross,
supra; State ex rel Hacharedi v. Baxter, 74 N.E. 2d 242, 332 US 827, 92 L. Ed 402, 68 S. Ct
209.
22
Rollo, p. 58.
23
Id. at 59.
24
Sotto v. Sotto, No. 17768, 1 September 1922, 43 Phil. 688, 694. See also Araneta v.
Concepcion and Araneta, No. L-9667, 31 July 1956, 99 Phil. 709, 712.
25
SEC. 22. Administrative investigations. In addition to the functions provided for in the
preceding sections, the Board of Medical Examiners (now Medical Board) shall perform the
following duties: (1) to administer oath to physicians who qualified in the examinations (stress
supplied); (2) to study the conditions affecting the practice of medicine in all parts of the
Philippines; (3) to exercise the powers conferred upon it by this article with the view of
maintaining the ethical and professional standards of the medical profession; (4) to subpoena
or subpoena duces tecum witnesses for all purposes required in the discharge of its duties;
and (5) to promulgate, with the approval of the Commissioner of Civil Service (now
Professional Regulation Commission), such rules and regulations as it may deem necessary
for the performance of its duties in harmony with the provisions of this Act and necessary for
the proper practice of medicine in the Philippines.
Administrative investigations shall be conducted by at least two members of the Medical
Board with one legal officer sitting during the investigation, otherwise the proceedings shall be
considered void. The existing rules of evidence shall be observed during all administrative
investigations. The Board may disapprove applications for examination or registration,
reprimand erring physicians, or suspend or revoke registration certificates, if the respondents
are found guilty after due investigation. (As amended by Rep. Act No. 4224, effective June 19,
1965.)
26
SEC. 1. Objectives. This Act provides for and shall govern (a) the standardization and
regulation of medical education; (b) the examination for registration of physicians; and (c) the
supervision, control, and regulation of the practice of medicine in the Philippines.
27
SEC. 9. Candidates for board examinations. Candidates for Board examinations shall
have the following qualifications:
(1) He shall be a citizen of the Philippines or a citizen of any foreign country who has
submitted competent and conclusive documentary evidence, confirmed by the Department of
Foreign Affairs, showing that his countrys existing laws permit citizens of the Philippines to
practice medicine under the same rules and regulations governing citizens thereof;

(2) He shall be of good moral character;

(3) He shall be of sound mind;
(4) He shall not have been convicted by a court of competent jurisdiction of any offense
involving moral turpitude;
(5) He shall be a holder of the Degree of Doctor of Medicine or its equivalent conferred by a
college of medicine duly recognized by the Government; and
(6) He must have completed a calendar year of technical training known as internship the
nature of which shall be prescribed by the Board of Medical Education undertaken in hospitals
and health centers approved by the Board. (As amended by Rep. Act No. 5946, approved
June 21, 1969).
28
Rollo, p. 419.
29
Id. at 99.
30
SEC. 8. Prerequisite to the practice of medicine. No person shall engage in the practice of
medicine in the Philippines unless he is at least twenty-one years of age, has satisfactorily
passed the corresponding Board Examination, and is a holder of a valid Certificate of
Registration duly issued to him by the Board of Medical Examiners (now Medical Board).
31
Websters New International Dictionary 2017 (1993 ed.).
32
See Fosdick v. Terry, 117 So. 2d 397, 398; Puritan Coal Corp. v. Davis, 42 S.E. 2d 807, 813.
33
Lemi v. Valencia, No. L-20768, 29 November 1968, 26 SCRA 203, 210; Ocampo v. Subido,
No. L-28344, 27 August 1976, 72 SCRA 443, 452-453.
34
See Morse v. State Board of Medical Examiners, 122 S.W. 446, 448 (1909).
35
Const. Art. XIV, Sec. 5 (3).
36
Reyes v. Court of Appeals, G.R. Nos. 94961 and 96491, 25 February 1991, 194 SCRA 402,
409-410.
37
Primicias v. Fugoso, No. L-1800, 27 January 1948, 80 Phil. 71, 75.
38
Philippine Medical Association v. Board of Medical Examiners, No. L-25135, 21 September
1968, 25 SCRA 29.
39
Tablarin v. Judge Angelina S. Gutierrez, No. L-78164, 31 July 1987, 152 SCRA 730, 743.
40
See Manchester Press Club v. State Liquor Commission, 200 A. 407, 116 ALR 1093.
41
See Yick Wo v. Hopkins, 118 US 356, 30 L.Ed. 220, 6 S. Ct. 1064; City Council of
Montgomery v. West, 42 So. 1000; In Re Porterfield, 168 P. 2d 706, 167 ALR 675; Anderson v.
City of Wellington, 19 P. 719; State v. Harris, 6 S.E. 2d 854.
42
Citing Bautista v. Board of Energy, G.R. No. 75016, 13 January 1989, 169 SCRA 167.
43
Citing Gancho-on v. Secretary of Labor and Employment, G.R. No. 108033, 14 April 1997,
271 SCRA 204, 208.
44
Rollo, pp. 340-341.
45
SEC. 26. Appeal from judgment. The decision of the Board of Medical Examiners (now
Medical Board) shall automatically become final thirty days after the date of its promulgation
unless the respondent, during the same period, has appealed to the Commissioner of the Civil
Service (now Professional Regulation Commission) and later to the Office of the President of
the Philippines. If the final decision is not satisfactory, the respondent may ask for a review of
the case, or may file in court a petition for certiorari.
46
Ang Tuan Kai & Co. v. Import Control Commission, No. L-4427, 21 April 1952, 91 Phil. 143,
145; Peralta v. Salcedo, etc., No. L-10771, 30 April 1957, 101 Phil. 452, 454.
47
See Madrigal v. Lecaroz, G.R. No. 46218, 23 October 1990, 191 SCRA 20, 26.

Republic of the Philippines

SUPREME COURT
Manila
EN BANC
G.R. No. 144104
June 29, 2004
LUNG CENTER OF THE PHILIPPINES, petitioner,
vs.
QUEZON CITY and CONSTANTINO P. ROSAS, in his capacity as City Assessor of
Quezon City, respondents.
DECISION
CALLEJO, SR., J.:
This is a petition for review on certiorari under Rule 45 of the Rules of Court, as amended, of
the Decision1 dated July 17, 2000 of the Court of Appeals in CA-G.R. SP No. 57014 which
affirmed the decision of the Central Board of Assessment Appeals holding that the lot owned
by the petitioner and its hospital building constructed thereon are subject to assessment for
purposes of real property tax.
The Antecedents
The petitioner Lung Center of the Philippines is a non-stock and non-profit entity established
on January 16, 1981 by virtue of Presidential Decree No. 1823. 2 It is the registered owner of a
parcel of land, particularly described as Lot No. RP-3-B-3A-1-B-1, SWO-04-000495, located at
Quezon Avenue corner Elliptical Road, Central District, Quezon City. The lot has an area of
121,463 square meters and is covered by Transfer Certificate of Title (TCT) No. 261320 of the
Registry of Deeds of Quezon City. Erected in the middle of the aforesaid lot is a hospital
known as the Lung Center of the Philippines. A big space at the ground floor is being leased to
private parties, for canteen and small store spaces, and to medical or professional
practitioners who use the same as their private clinics for their patients whom they charge for
their professional services. Almost one-half of the entire area on the left side of the building
along Quezon Avenue is vacant and idle, while a big portion on the right side, at the corner of
Quezon Avenue and Elliptical Road, is being leased for commercial purposes to a private
enterprise known as the Elliptical Orchids and Garden Center.
The petitioner accepts paying and non-paying patients. It also renders medical services to outpatients, both paying and non-paying. Aside from its income from paying patients, the
petitioner receives annual subsidies from the government.
On June 7, 1993, both the land and the hospital building of the petitioner were assessed for
real property taxes in the amount of P4,554,860 by the City Assessor of Quezon City. 3
Accordingly, Tax Declaration Nos. C-021-01226 (16-2518) and C-021-01231 (15-2518-A) were
issued for the land and the hospital building, respectively. 4 On August 25, 1993, the petitioner

filed a Claim for Exemption5 from real property taxes with the City Assessor, predicated on its
claim that it is a charitable institution. The petitioners request was denied, and a petition was,
thereafter, filed before the Local Board of Assessment Appeals of Quezon City (QC-LBAA, for
brevity) for the reversal of the resolution of the City Assessor. The petitioner alleged that under
Section 28, paragraph 3 of the 1987 Constitution, the property is exempt from real property
taxes. It averred that a minimum of 60% of its hospital beds are exclusively used for charity
patients and that the major thrust of its hospital operation is to serve charity patients. The
petitioner contends that it is a charitable institution and, as such, is exempt from real property
taxes. The QC-LBAA rendered judgment dismissing the petition and holding the petitioner
liable for real property taxes.6
The QC-LBAAs decision was, likewise, affirmed on appeal by the Central Board of
Assessment Appeals of Quezon City (CBAA, for brevity)7 which ruled that the petitioner was
not a charitable institution and that its real properties were not actually, directly and exclusively
used for charitable purposes; hence, it was not entitled to real property tax exemption under
the constitution and the law. The petitioner sought relief from the Court of Appeals, which
rendered judgment affirming the decision of the CBAA. 8
Undaunted, the petitioner filed its petition in this Court contending that:
A. THE COURT A QUO ERRED IN DECLARING PETITIONER AS NOT ENTITLED
TO REALTY TAX EXEMPTIONS ON THE GROUND THAT ITS LAND, BUILDING
AND IMPROVEMENTS, SUBJECT OF ASSESSMENT, ARE NOT ACTUALLY,
DIRECTLY AND EXCLUSIVELY DEVOTED FOR CHARITABLE PURPOSES.
B. WHILE PETITIONER IS NOT DECLARED AS REAL PROPERTY TAX EXEMPT
UNDER ITS CHARTER, PD 1823, SAID EXEMPTION MAY NEVERTHELESS BE
EXTENDED UPON PROPER APPLICATION.
The petitioner avers that it is a charitable institution within the context of Section 28(3), Article
VI of the 1987 Constitution. It asserts that its character as a charitable institution is not altered
by the fact that it admits paying patients and renders medical services to them, leases
portions of the land to private parties, and rents out portions of the hospital to private medical
practitioners from which it derives income to be used for operational expenses. The petitioner
points out that for the years 1995 to 1999, 100% of its out-patients were charity patients and
of the hospitals 282-bed capacity, 60% thereof, or 170 beds, is allotted to charity patients. It
asserts that the fact that it receives subsidies from the government attests to its character as a
charitable institution. It contends that the "exclusivity" required in the Constitution does not
necessarily mean "solely." Hence, even if a portion of its real estate is leased out to private
individuals from whom it derives income, it does not lose its character as a charitable
institution, and its exemption from the payment of real estate taxes on its real property. The
petitioner cited our ruling in Herrera v. QC-BAA9 to bolster its pose. The petitioner further
contends that even if P.D. No. 1823 does not exempt it from the payment of real estate taxes,
it is not precluded from seeking tax exemption under the 1987 Constitution.
In their comment on the petition, the respondents aver that the petitioner is not a charitable
entity. The petitioners real property is not exempt from the payment of real estate taxes under
P.D. No. 1823 and even under the 1987 Constitution because it failed to prove that it is a
charitable institution and that the said property is actually, directly and exclusively used for
charitable purposes. The respondents noted that in a newspaper report, it appears that graft
charges were filed with the Sandiganbayan against the director of the petitioner, its
administrative officer, and Zenaida Rivera, the proprietress of the Elliptical Orchids and

Garden Center, for entering into a lease contract over 7,663.13 square meters of the property
in 1990 for only P20,000 a month, when the monthly rental should be P357,000 a month as
determined by the Commission on Audit; and that instead of complying with the directive of
the COA for the cancellation of the contract for being grossly prejudicial to the government,
the petitioner renewed the same on March 13, 1995 for a monthly rental of only P24,000. They
assert that the petitioner uses the subsidies granted by the government for charity patients
and uses the rest of its income from the property for the benefit of paying patients, among
other purposes. They aver that the petitioner failed to adduce substantial evidence that 100%
of its out-patients and 170 beds in the hospital are reserved for indigent patients. The
respondents further assert, thus:
13. That the claims/allegations of the Petitioner LCP do not speak well of its record
of service. That before a patient is admitted for treatment in the Center, first
impression is that it is pay-patient and required to pay a certain amount as deposit.
That even if a patient is living below the poverty line, he is charged with high
hospital bills. And, without these bills being first settled, the poor patient cannot be
allowed to leave the hospital or be discharged without first paying the hospital bills
or issue a promissory note guaranteed and indorsed by an influential agency or
person known only to the Center; that even the remains of deceased poor patients
suffered the same fate. Moreover, before a patient is admitted for treatment as free
or charity patient, one must undergo a series of interviews and must submit all the
requirements needed by the Center, usually accompanied by endorsement by an
influential agency or person known only to the Center. These facts were heard and
admitted by the Petitioner LCP during the hearings before the Honorable QC-BAA
and Honorable CBAA. These are the reasons of indigent patients, instead of
seeking treatment with the Center, they prefer to be treated at the Quezon Institute.
Can such practice by the Center be called charitable? 10
The Issues
The issues for resolution are the following: (a) whether the petitioner is a charitable institution
within the context of Presidential Decree No. 1823 and the 1973 and 1987 Constitutions and
Section 234(b) of Republic Act No. 7160; and (b) whether the real properties of the petitioner
are exempt from real property taxes.
The Courts Ruling
The petition is partially granted.
On the first issue, we hold that the petitioner is a charitable institution within the context of the
1973 and 1987 Constitutions. To determine whether an enterprise is a charitable
institution/entity or not, the elements which should be considered include the statute creating
the enterprise, its corporate purposes, its constitution and by-laws, the methods of
administration, the nature of the actual work performed, the character of the services
rendered, the indefiniteness of the beneficiaries, and the use and occupation of the
properties.11
In the legal sense, a charity may be fully defined as a gift, to be applied consistently with
existing laws, for the benefit of an indefinite number of persons, either by bringing their minds
and hearts under the influence of education or religion, by assisting them to establish
themselves in life or otherwise lessening the burden of government. 12 It may be applied to
almost anything that tend to promote the well-doing and well-being of social man. It embraces
the improvement and promotion of the happiness of man. 13 The word "charitable" is not

restricted to relief of the poor or sick.14 The test of a charity and a charitable organization are
in law the same. The test whether an enterprise is charitable or not is whether it exists to carry
out a purpose reorganized in law as charitable or whether it is maintained for gain, profit, or
private advantage.
Under P.D. No. 1823, the petitioner is a non-profit and non-stock corporation which, subject to
the provisions of the decree, is to be administered by the Office of the President of the
Philippines with the Ministry of Health and the Ministry of Human Settlements. It was
organized for the welfare and benefit of the Filipino people principally to help combat the high
incidence of lung and pulmonary diseases in the Philippines. The raison detre for the creation
of the petitioner is stated in the decree, viz:
Whereas, for decades, respiratory diseases have been a priority concern, having
been the leading cause of illness and death in the Philippines, comprising more than
45% of the total annual deaths from all causes, thus, exacting a tremendous toll on
human resources, which ailments are likely to increase and degenerate into serious
lung diseases on account of unabated pollution, industrialization and unchecked
cigarette smoking in the country;
Whereas, the more common lung diseases are, to a great extent, preventable, and
curable with early and adequate medical care, immunization and through prompt
and intensive prevention and health education programs;
Whereas, there is an urgent need to consolidate and reinforce existing programs,
strategies and efforts at preventing, treating and rehabilitating people affected by
lung diseases, and to undertake research and training on the cure and prevention of
lung diseases, through a Lung Center which will house and nurture the above and
related activities and provide tertiary-level care for more difficult and problematical
cases;
Whereas, to achieve this purpose, the Government intends to provide material and
financial support towards the establishment and maintenance of a Lung Center for
the welfare and benefit of the Filipino people. 15
The purposes for which the petitioner was created are spelled out in its Articles of
Incorporation, thus:
SECOND: That the purposes for which such corporation is formed are as follows:
1. To construct, establish, equip, maintain, administer and conduct an integrated medical
institution which shall specialize in the treatment, care, rehabilitation and/or relief of lung and
allied diseases in line with the concern of the government to assist and provide material and
financial support in the establishment and maintenance of a lung center primarily to benefit the
people of the Philippines and in pursuance of the policy of the State to secure the well-being
of the people by providing them specialized health and medical services and by minimizing
the incidence of lung diseases in the country and elsewhere.
2. To promote the noble undertaking of scientific research related to the prevention of lung or
pulmonary ailments and the care of lung patients, including the holding of a series of relevant
congresses, conventions, seminars and conferences;
3. To stimulate and, whenever possible, underwrite scientific researches on the biological,
demographic, social, economic, eugenic and physiological aspects of lung or pulmonary
diseases and their control; and to collect and publish the findings of such research for public
consumption;

4. To facilitate the dissemination of ideas and public acceptance of information on lung

consciousness or awareness, and the development of fact-finding, information and reporting
facilities for and in aid of the general purposes or objects aforesaid, especially in human lung
requirements, general health and physical fitness, and other relevant or related fields;
5. To encourage the training of physicians, nurses, health officers, social workers and medical
and technical personnel in the practical and scientific implementation of services to lung
patients;
6. To assist universities and research institutions in their studies about lung diseases, to
encourage advanced training in matters of the lung and related fields and to support
educational programs of value to general health;
7. To encourage the formation of other organizations on the national, provincial and/or city and
local levels; and to coordinate their various efforts and activities for the purpose of achieving a
more effective programmatic approach on the common problems relative to the objectives
enumerated herein;
8. To seek and obtain assistance in any form from both international and local foundations and
organizations; and to administer grants and funds that may be given to the organization;
9. To extend, whenever possible and expedient, medical services to the public and, in general,
to promote and protect the health of the masses of our people, which has long been
recognized as an economic asset and a social blessing;
10. To help prevent, relieve and alleviate the lung or pulmonary afflictions and maladies of the
people in any and all walks of life, including those who are poor and needy, all without regard
to or discrimination, because of race, creed, color or political belief of the persons helped; and
to enable them to obtain treatment when such disorders occur;
11. To participate, as circumstances may warrant, in any activity designed and carried on to
promote the general health of the community;
12. To acquire and/or borrow funds and to own all funds or equipment, educational materials
and supplies by purchase, donation, or otherwise and to dispose of and distribute the same in
such manner, and, on such basis as the Center shall, from time to time, deem proper and
best, under the particular circumstances, to serve its general and non-profit purposes and
objectives;
13. To buy, purchase, acquire, own, lease, hold, sell, exchange, transfer and dispose of
properties, whether real or personal, for purposes herein mentioned; and
14. To do everything necessary, proper, advisable or convenient for the accomplishment of
any of the powers herein set forth and to do every other act and thing incidental thereto or
connected therewith.16
Hence, the medical services of the petitioner are to be rendered to the public in general in any
and all walks of life including those who are poor and the needy without discrimination. After
all, any person, the rich as well as the poor, may fall sick or be injured or wounded and
become a subject of charity.17
As a general principle, a charitable institution does not lose its character as such and its
exemption from taxes simply because it derives income from paying patients, whether outpatient, or confined in the hospital, or receives subsidies from the government, so long as the
money received is devoted or used altogether to the charitable object which it is intended to
achieve; and no money inures to the private benefit of the persons managing or operating the
institution.18 In Congregational Sunday School, etc. v. Board of Review,19 the State Supreme
Court of Illinois held, thus:

 [A]n institution does not lose its charitable character, and consequent exemption
from taxation, by reason of the fact that those recipients of its benefits who are able
to pay are required to do so, where no profit is made by the institution and the
amounts so received are applied in furthering its charitable purposes, and those
benefits are refused to none on account of inability to pay therefor. The fundamental
ground upon which all exemptions in favor of charitable institutions are based is the
benefit conferred upon the public by them, and a consequent relief, to some extent,
of the burden upon the state to care for and advance the interests of its citizens. 20
As aptly stated by the State Supreme Court of South Dakota in Lutheran Hospital Association
of South Dakota v. Baker:21
[T]he fact that paying patients are taken, the profits derived from attendance
upon these patients being exclusively devoted to the maintenance of the charity,
seems rather to enhance the usefulness of the institution to the poor; for it is a
matter of common observation amongst those who have gone about at all amongst
the suffering classes, that the deserving poor can with difficulty be persuaded to
enter an asylum of any kind confined to the reception of objects of charity; and that
their honest pride is much less wounded by being placed in an institution in which
paying patients are also received. The fact of receiving money from some of the
patients does not, we think, at all impair the character of the charity, so long as the
money thus received is devoted altogether to the charitable object which the
institution is intended to further.22
The money received by the petitioner becomes a part of the trust fund and must be devoted to
public trust purposes and cannot be diverted to private profit or benefit. 23
Under P.D. No. 1823, the petitioner is entitled to receive donations. The petitioner does not
lose its character as a charitable institution simply because the gift or donation is in the form of
subsidies granted by the government. As held by the State Supreme Court of Utah in
Yorgason v. County Board of Equalization of Salt Lake County:24
Second, the government subsidy payments are provided to the project. Thus,
those payments are like a gift or donation of any other kind except they come from
the government. In both Intermountain Health Care and the present case, the crux is
the presence or absence of material reciprocity. It is entirely irrelevant to this
analysis that the government, rather than a private benefactor, chose to make up
the deficit resulting from the exchange between St. Marks Tower and the tenants by
making a contribution to the landlord, just as it would have been irrelevant in
Intermountain Health Care if the patients income supplements had come from
private individuals rather than the government.
Therefore, the fact that subsidization of part of the cost of furnishing such housing is
by the government rather than private charitable contributions does not dictate the
denial of a charitable exemption if the facts otherwise support such an exemption,
as they do here.25
In this case, the petitioner adduced substantial evidence that it spent its income, including the
subsidies from the government for 1991 and 1992 for its patients and for the operation of the
hospital. It even incurred a net loss in 1991 and 1992 from its operations.
Even as we find that the petitioner is a charitable institution, we hold, anent the second issue,
that those portions of its real property that are leased to private entities are not exempt from

real property taxes as these are not actually, directly and exclusively used for charitable
purposes.
The settled rule in this jurisdiction is that laws granting exemption from tax are construed
strictissimi juris against the taxpayer and liberally in favor of the taxing power. Taxation is the
rule and exemption is the exception. The effect of an exemption is equivalent to an
appropriation. Hence, a claim for exemption from tax payments must be clearly shown and
based on language in the law too plain to be mistaken. 26 As held in Salvation Army v. Hoehn:27
An intention on the part of the legislature to grant an exemption from the taxing
power of the state will never be implied from language which will admit of any other
reasonable construction. Such an intention must be expressed in clear and
unmistakable terms, or must appear by necessary implication from the language
used, for it is a well settled principle that, when a special privilege or exemption is
claimed under a statute, charter or act of incorporation, it is to be construed strictly
against the property owner and in favor of the public. This principle applies with
peculiar force to a claim of exemption from taxation . 28
Section 2 of Presidential Decree No. 1823, relied upon by the petitioner, specifically provides
that the petitioner shall enjoy the tax exemptions and privileges:
SEC. 2. TAX EXEMPTIONS AND PRIVILEGES. Being a non-profit, non-stock
corporation organized primarily to help combat the high incidence of lung and
pulmonary diseases in the Philippines, all donations, contributions, endowments and
equipment and supplies to be imported by authorized entities or persons and by the
Board of Trustees of the Lung Center of the Philippines, Inc., for the actual use and
benefit of the Lung Center, shall be exempt from income and gift taxes, the same
further deductible in full for the purpose of determining the maximum deductible
amount under Section 30, paragraph (h), of the National Internal Revenue Code, as
amended.
The Lung Center of the Philippines shall be exempt from the payment of taxes,
charges and fees imposed by the Government or any political subdivision or
instrumentality thereof with respect to equipment purchases made by, or for the
Lung Center.29
It is plain as day that under the decree, the petitioner does not enjoy any property tax
exemption privileges for its real properties as well as the building constructed thereon. If the
intentions were otherwise, the same should have been among the enumeration of tax exempt
privileges under Section 2:
It is a settled rule of statutory construction that the express mention of one person,
thing, or consequence implies the exclusion of all others. The rule is expressed in
the familiar maxim, expressio unius est exclusio alterius.
The rule of expressio unius est exclusio alterius is formulated in a number of ways.
One variation of the rule is the principle that what is expressed puts an end to that
which is implied. Expressium facit cessare tacitum. Thus, where a statute, by its
terms, is expressly limited to certain matters, it may not, by interpretation or
construction, be extended to other matters.
...
The rule of expressio unius est exclusio alterius and its variations are canons of
restrictive interpretation. They are based on the rules of logic and the natural
workings of the human mind. They are predicated upon ones own voluntary act and

not upon that of others. They proceed from the premise that the legislature would
not have made specified enumeration in a statute had the intention been not to
restrict its meaning and confine its terms to those expressly mentioned. 30
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 at all, and that unless the
privilege is limited to the very terms of the statute the favor would be intended beyond what
was meant.31
Section 28(3), Article VI of the 1987 Philippine Constitution provides, thus:
(3) Charitable institutions, churches and parsonages or convents appurtenant
thereto, mosques, non-profit cemeteries, and all lands, buildings, and
improvements, actually, directly and exclusively used for religious, charitable or
educational purposes shall be exempt from taxation. 32
The tax exemption under this constitutional provision covers property taxes only.33 As Chief
Justice Hilario G. Davide, Jr., then a member of the 1986 Constitutional Commission,
explained: ". . . what is exempted is not the institution itself . . .; those exempted from real
estate taxes are lands, buildings and improvements actually, directly and exclusively used for
religious, charitable or educational purposes."34
Consequently, the constitutional provision is implemented by Section 234(b) of Republic Act
No. 7160 (otherwise known as the Local Government Code of 1991) as follows:
SECTION 234. Exemptions from Real Property Tax. The following are exempted
from payment of the real property tax:
...
(b) Charitable institutions, churches, parsonages or convents appurtenant thereto,
mosques, non-profit or religious cemeteries and all lands, buildings, and
improvements actually, directly, and exclusively used for religious, charitable or
educational purposes.35
We note that under the 1935 Constitution, "... all lands, buildings, and improvements used
exclusively for charitable purposes shall be exempt from taxation." 36 However, under
the 1973 and the present Constitutions, for "lands, buildings, and improvements" of the
charitable institution to be considered exempt, the same should not only be "exclusively" used
for charitable purposes; it is required that such property be used "actually" and "directly" for
such purposes.37
In light of the foregoing substantial changes in the Constitution, the petitioner cannot rely on
our ruling in Herrera v. Quezon City Board of Assessment Appeals which was promulgated on
September 30, 1961 before the 1973 and 1987 Constitutions took effect. 38 As this Court held
in Province of Abra v. Hernando:39
Under the 1935 Constitution: "Cemeteries, churches, and parsonages or
convents appurtenant thereto, and all lands, buildings, and improvements used
exclusively for religious, charitable, or educational purposes shall be exempt from
taxation." The present Constitution added "charitable institutions, mosques, and
non-profit cemeteries" and required that for the exemption of "lands, buildings, and
improvements," they should not only be "exclusively" but also "actually" and
"directly" used for religious or charitable purposes. The Constitution is worded
differently. The change should not be ignored. It must be duly taken into
consideration. Reliance on past decisions would have sufficed were the words
"actually" as well as "directly" not added. There must be proof therefore of the actual

and direct use of the lands, buildings, and improvements for religious or charitable
purposes to be exempt from taxation.
Under the 1973 and 1987 Constitutions and Rep. Act No. 7160 in order to be entitled to the
exemption, the petitioner is burdened to prove, by clear and unequivocal proof, that (a) it is a
charitable institution; and (b) its real properties are ACTUALLY, DIRECTLY and
EXCLUSIVELY used for charitable purposes. "Exclusive" is defined as possessed and
enjoyed to the exclusion of others; debarred from participation or enjoyment; and "exclusively"
is defined, "in a manner to exclude; as enjoying a privilege exclusively." 40 If real property is
used for one or more commercial purposes, it is not exclusively used for the exempted
purposes but is subject to taxation.41 The words "dominant use" or "principal use" cannot be
substituted for the words "used exclusively" without doing violence to the Constitutions and the
law.42 Solely is synonymous with exclusively.43
What is meant by actual, direct and exclusive use of the property for charitable purposes is
the direct and immediate and actual application of the property itself to the purposes for which
the charitable institution is organized. It is not the use of the income from the real property that
is determinative of whether the property is used for tax-exempt purposes. 44
The petitioner failed to discharge its burden to prove that the entirety of its real property is
actually, directly and exclusively used for charitable purposes. While portions of the hospital
are used for the treatment of patients and the dispensation of medical services to them,
whether paying or non-paying, other portions thereof are being leased to private individuals for
their clinics and a canteen. Further, a portion of the land is being leased to a private individual
for her business enterprise under the business name "Elliptical Orchids and Garden Center."
Indeed, the petitioners evidence shows that it collected P1,136,483.45 as rentals in 1991 and
P1,679,999.28 for 1992 from the said lessees.
Accordingly, we hold that the portions of the land leased to private entities as well as those
parts of the hospital leased to private individuals are not exempt from such taxes. 45 On the
other hand, the portions of the land occupied by the hospital and portions of the hospital used
for its patients, whether paying or non-paying, are exempt from real property taxes.
IN LIGHT OF ALL THE FOREGOING, the petition is PARTIALLY GRANTED. The respondent
Quezon City Assessor is hereby DIRECTED to determine, after due hearing, the precise
portions of the land and the area thereof which are leased to private persons, and to compute
the real property taxes due thereon as provided for by law.
SO ORDERED.
Davide, Jr., Puno, Vitug, Panganiban, Quisumbing, Ynares-Santiago, Sandoval-Gutierrez,
Carpio, Austria-Martinez, Corona, Carpio Morales, Azcuna, and Tinga, JJ., concur.
Footnotes
*
On official leave.
**
On leave.
1
Penned by Associate Justice Remedios A. Salazar-Fernando, with Associate Justices Fermin
A. Martin, Jr. and Salvador J. Valdez, Jr. concurring.
2
SECTION 1. CREATION OF THE LUNG CENTER OF THE PHILIPPINES. There is hereby
created a trust, under the name and style of Lung Center of the Philippines, which, subject to
the provisions of this Decree, shall be administered, according to the Articles of Incorporation,
By-Laws and Objectives of the Lung Center of the Philippines, Inc., duly registered (reg. No.
85886) with the Securities and Exchange Commission of the Republic of the Philippines, by

the Office of the President, in coordination with the Ministry of Human Settlements and the
Ministry of Health.
3
Annex "C," Rollo, p. 49.
4
Annexes "2" & "2-A," id. at 93-94.
5
Annex "D," id. at 50-52.
6
Annex "E," id. at 53-55.
7
Annexes "4" & "5," id. at 100-109.
8
Annex "A," id. at 33-41.
9
3 SCRA 187 (1961).
10
Rollo, pp. 83-84.
11
See Workmens Circle Educational Center of Springfield v. Board of Assessors of City of
Springfield, 51 N.E.2d 313 (1943).
12
Congregational Sunday School & Publishing Society v. Board of Review, 125 N.E. 7 (1919),
citing Jackson v. Philipps, 14 Allen (Mass.) 539.
13
Bader Realty & Investment Co. v. St. Louis Housing Authority, 217 S.W.2d 489 (1949).
14
Board of Assessors of Boston v. Garland School of Homemaking, 6 N.E.2d 379.
15
Rollo, pp. 119-120.
16
Id. at 123-125.
17
Scripps Memorial Hospital v. California Employment Commission, 24 Cal.2d 669, 151 P.2d
109 (1944).
18
Sisters of Third Order of St. Frances v. Board of Review of Peoria County, 83 N.E. 272.
19
See note 12.
20
Id. at 10.
21
167 N.W. 148 (1918), citing State v. Powers, 10 Mo. App. 263, 74 Mo. 476.
22
Id. at 149.
23
See Obrien v. Physicians Hospital Association, 116 N.E. 975 (1917).
24
714 P.2d 653 (1986).
25
Id. at 660-661.
26
Commissioner of Internal Revenue v. Court of Appeals, 298 SCRA 83 (1998).
27
188 S.W.2d. 826 (1945).
28
Id. at 829.
29
Rollo, p. 120. (Underscoring supplied.)
30
Malinias v. COMELEC, 390 SCRA 480 (2002).
31
St. Louis Young Mens Christian Association v. Gehner, 47 S.W.2d 776 (1932).
32
Underscoring supplied.
33
Commissioner of Internal Revenue v. Court of Appeals, supra.
34
Ibid. Citing II RECORDS OF THE CONSTITUTIONAL COMMISSION 90.
35
Underscoring supplied.
36
Article VI, Section 22, par. (3) of the 1935 Constitution provides that, "Cemeteries, churches
and parsonages or convents appurtenant thereto, and all lands, buildings, and improvements
used exclusively for religious, charitable, or educational purposes shall be exempt from
taxation."
37
Article VIII, Section 17, par. (3) of the 1973 Constitution provides that, "Charitable
institutions, churches, parsonages or convents appurtenant thereto, mosques, and non-profit
cemeteries, and all lands, buildings, and improvements actually, directly, and exclusively used
for religious or charitable purposes shall be exempt from taxation."

38

3 SCRA 186 (1961).

107 SCRA 105 (1981).
40
Young Mens Christian Association of Omaha v. Douglas County, 83 N.W. 924 (1900).
41
St. Louis Young Mens Christian Association v. Gehner, supra.
42
See State ex rel Koeln v. St. Louis Y.M.C.A., 168 S.W. 589 (1914).
43
Lodge v. Nashville, 154 S.W. 141.
44
Christian Business College v. Kalamanzoo, 131 N.W. 553.
45
See Young Mens Christian Association of Omaha v. Douglas County, supra; Martin v. City
of New Orleans, 58 Am. 194 (1886).
39

FIRST DIVISION
[G.R. No. 47800. December 2, 1940.]
MAXIMO CALALANG, Petitioner, v. A. D. WILLIAMS, ET AL., Respondents.
Maximo Calalang in his own behalf.
Solicitor General Ozaeta and Assistant Solicitor General Amparo for respondents
Williams, Fragante and Bayan
City Fiscal Mabanag for the other respondents.
SYLLABUS
1. CONSTITUTIONAL LAW; CONSTITUTIONALITY OF COMMONWEALTH ACT No. 648;
DELEGATION OF LEGISLATIVE POWER; AUTHORITY OF DIRECTOR OF PUBLIC WORKS
AND SECRETARY OF PUBLIC WORKS AND COMMUNICATIONS TO PROMULGATE
RULES AND REGULATIONS. The provisions of section 1 of Commonwealth Act No. 648
do not confer legislative power upon the Director of Public Works and the Secretary of Public
Works and Communications. The authority therein conferred upon them and under which they
promulgated the rules and regulations now complained of is not to determine what public
policy demands but merely to carry out the legislative policy laid down by the National
Assembly in said Act, to wit, "to promote safe transit upon, and avoid obstructions on, roads
and streets designated as national roads by acts of the National Assembly or by executive
orders of the President of the Philippines" and to close them temporarily to any or all classes
of traffic "whenever the condition of the road or the traffic thereon makes such action
necessary or advisable in the public convenience and interest." The delegated power, if at all,
therefore, is not the determination of what the law shall be, but merely the ascertainment of
the facts and circumstances upon which the application of said law is to be predicated. To

promulgate rules and regulations on the use of national roads and to determine when and how
long a national road should be closed to traffic, in view of the condition of the road or the traffic
thereon and the requirements of public convenience and interest, is an administrative function
which cannot be directly discharged by the National Assembly. It must depend on the
discretion of some other government official to whom is confided the duty of determining
whether the proper occasion exists for executing the law. But it cannot be said that the
exercise of such discretion is the making of the law.
2. ID.; ID.; POLICE POWER; PERSONAL LIBERTY; GOVERNMENTAL AUTHORITY.
Commonwealth Act No. 548 was passed by the National Assembly in the exercise of the
paramount police power of the state. Said Act, by virtue of which the rules and regulations
complained of were promulgated, aims to promote safe transit upon and avoid obstructions on
national roads, in the interest and convenience of the public. In enacting said law, therefore,
the National Assembly was prompted by considerations of public convenience and welfare. It
was inspired by a desire to relieve congestion of traffic, which is, to say the least, a menace to
public safety. Public welfare, then, lies at the bottom of the enactment of said law, and the
state in order to promote the general welfare may interfere with personal liberty, with property,
and with business and occupations. Persons and property may be subjected to all kinds of
restraints and burdens, in order to secure the general comfort, health, and prosperity of the
state (U.S. v. Gomer Jesus, 31 Phil., 218). To this fundamental aim of our Government the
rights of the individual are subordinated. Liberty is a blessing without which life is a misery, but
liberty should not be made to prevail over authority because then society will fall into anarchy.
Neither should authority be made to prevail over liberty because then the individual will fall
into slavery. The citizen should achieve the required balance of liberty and authority in his
mind through education and, personal discipline, so that there may be established the
resultant equilibrium, which means peace and order and happiness for all. The moment
greater authority is conferred upon the government, logically so much is withdrawn from the
residuum of liberty which resides in the people. The paradox lies in the fact that the apparent
curtailment of liberty is precisely the very means of insuring its preservation.
3. ID.; ID.; SOCIAL JUSTICE. Social justice is "neither communism, nor despotism, nor
atomism, nor anarchy," but the humanization of laws and the equalization of social and
economic forces by the State so that justice in its rational and objectively secular conception
may at least be approximated. Social justice means the promotion of the welfare of all the
people, the adoption by the Government of measures calculated to insure economic stability
of all the competent elements of society, through the maintenance of a proper economic and
social equilibrium in the interrelations of the members of the community, constitutionally,
through the adoption of measures legally justifiable, or extra-constitutionally, through the
exercise of powers underlying the existence of all governments on the time-honored principle
of salus populi est suprema lex. Social justice, therefore, must be founded on the recognition
of the necessity of interdependence among divers and diverse units of a society and of the
protection that should be equally and evenly extended to all groups as a combined force in our
social and economic life, consistent with the fundamental and paramount objective of the state
of promoting the health, comfort, and quiet of all persons, and of bringing about "the greatest
good to the greatest number."

DECISION
LAUREL, J.:
Maximo Calalang, in his capacity as a private citizen and as a taxpayer of Manila, brought
before this court this petition for a writ of prohibition against the respondents, A. D. Williams,
as Chairman of the National Traffic Commission; Vicente Fragante, as Director of Public
Works; Sergio Bayan, as Acting Secretary of Public Works and Communications; Eulogio
Rodriguez, as Mayor of the City of Manila; and Juan Dominguez, as Acting Chief of Police of
Manila.
It is alleged in the petition that the National Traffic Commission, in its resolution of July 17,
1940, resolved to recommend to the Director of Public Works and to the Secretary of Public
Works and Communications that animal-drawn vehicles be prohibited from passing along
Rosario Street extending from Plaza Calderon de la Barca to Dasmarias Street, from 7:30
a.m. to 12:30 p.m. and from 1:30 p.m. to 5:30 p.m.; and along Rizal Avenue extending from
the railroad crossing at Antipolo Street to Echague Street, from 7 a.m. to 11 p.m., from a
period of one year from the date of the opening of the Colgante Bridge to traffic; that the
Chairman of the National Traffic Commission, on July 18, 1940 recommended to the Director
of Public Works the adoption of the measure proposed in the resolution aforementioned, in
pursuance of the provisions of Commonwealth Act No. 548 which authorizes said Director of
Public Works, with the approval of the Secretary of Public Works and Communications, to
promulgate rules and regulations to regulate and control the use of and traffic on national
roads; that on August 2, 1940, the Director of Public Works, in his first indorsement to the
Secretary of Public Works and Communications, recommended to the latter the approval of
the recommendation made by the Chairman of the National Traffic Commission as aforesaid,
with the modification that the closing of Rizal Avenue to traffic to animal-drawn vehicles be
limited to the portion thereof extending from the railroad crossing at Antipolo Street to
Azcarraga Street; that on August 10, 1940, the Secretary of Public Works and
Communications, in his second indorsement addressed to the Director of Public Works,
approved the recommendation of the latter that Rosario Street and Rizal Avenue be closed to
traffic of animal-drawn vehicles, between the points and during the hours as above indicated,
for a period of one year from the date of the opening of the Colgante Bridge to traffic; that the
Mayor of Manila and the Acting Chief of Police of Manila have enforced and caused to be
enforced the rules and regulations thus adopted; that as a consequence of such enforcement,
all animal-drawn vehicles are not allowed to pass and pick up passengers in the places
above-mentioned to the detriment not only of their owners but of the riding public as well.
It is contended by the petitioner that Commonwealth Act No. 548 by which the Director of
Public Works, with the approval of the Secretary of Public Works and Communications, is
authorized to promulgate rules and regulations for the regulation and control of the use of and
traffic on national roads and streets is unconstitutional because it constitutes an undue
delegation of legislative power. This contention is untenable. As was observed by this court in
Rubi v. Provincial Board of Mindoro (39 Phil, 660, 700), "The rule has nowhere been better
stated than in the early Ohio case decided by Judge Ranney, and since followed in a multitude
of cases, namely: The true distinction therefore is between the delegation of power to make

the law, which necessarily involves a discretion as to what it shall be, and conferring an
authority or discretion as to its execution, to be exercised under and in pursuance of the law.
The first cannot be done; to the latter no valid objection can be made. (Cincinnati, W. & Z. R.
Co. v. Commrs. Clinton County, 1 Ohio St., 88.) Discretion, as held by Chief Justice Marshall
in Wayman v. Southard (10 Wheat., 1) may be committed by the Legislature to an executive
department or official. The Legislature may make decisions of executive departments or
subordinate officials thereof, to whom it has committed the execution of certain acts, final on
questions of fact. (U.S. v. Kinkead, 248 Fed., 141.) The growing tendency in the decisions is to
give prominence to the necessity of the case."cralaw virtua1aw library
Section 1 of Commonwealth Act No. 548 reads as follows:jgc:chanrobles.com.ph
"SECTION 1. To promote safe transit upon, and avoid obstructions on, roads and streets
designated as national roads by acts of the National Assembly or by executive orders of the
President of the Philippines, the Director of Public Works, with the approval of the Secretary of
Public Works and Communications, shall promulgate the necessary rules and regulations to
regulate and control the use of and traffic on such roads and streets. Such rules and
regulations, with the approval of the President, may contain provisions controlling or regulating
the construction of buildings or other structures within a reasonable distance from along the
national roads. Such roads may be temporarily closed to any or all classes of traffic by the
Director of Public Works and his duly authorized representatives whenever the condition of the
road or the traffic thereon makes such action necessary or advisable in the public
convenience and interest, or for a specified period, with the approval of the Secretary of Public
Works and Communications."cralaw virtua1aw library
The above provisions of law do not confer legislative power upon the Director of Public Works
and the Secretary of Public Works and Communications. The authority therein conferred upon
them and under which they promulgated the rules and regulations now complained of is not to
determine what public policy demands but merely to carry out the legislative policy laid down
by the National Assembly in said Act, to wit, "to promote safe transit upon and avoid
obstructions on, roads and streets designated as national roads by acts of the National
Assembly or by executive orders of the President of the Philippines" and to close them
temporarily to any or all classes of traffic "whenever the condition of the road or the traffic
makes such action necessary or advisable in the public convenience and interest." The
delegated power, if at all, therefore, is not the determination of what the law shall be, but
merely the ascertainment of the facts and circumstances upon which the application of said
law is to be predicated. To promulgate rules and regulations on the use of national roads and
to determine when and how long a national road should be closed to traffic, in view of the
condition of the road or the traffic thereon and the requirements of public convenience and
interest, is an administrative function which cannot be directly discharged by the National
Assembly. It must depend on the discretion of some other government official to whom is
confided the duty of determining whether the proper occasion exists for executing the law. But
it cannot be said that the exercise of such discretion is the making of the law. As was said in
Lockes Appeal (72 Pa. 491): "To assert that a law is less than a law, because it is made to
depend on a future event or act, is to rob the Legislature of the power to act wisely for the
public welfare whenever a law is passed relating to a state of affairs not yet developed, or to

things future and impossible to fully know." The proper distinction the court said was this: "The
Legislature cannot delegate its power to make the law; but it can make a law to delegate a
power to determine some fact or state of things upon which the law makes, or intends to
make, its own action depend. To deny this would be to stop the wheels of government. There
are many things upon which wise and useful legislation must depend which cannot be known
to the law-making power, and, must, therefore, be a subject of inquiry and determination
outside of the halls of legislation." (Field v. Clark, 143 U. S. 649, 694; 36 L. Ed. 294.)
In the case of People v. Rosenthal and Osmea, G.R. Nos. 46076 and 46077, promulgated
June 12, 1939, and in Pangasinan Transportation v. The Public Service Commission, G.R. No.
47065, promulgated June 26, 1940, this Court had occasion to observe that the principle of
separation of powers has been made to adapt itself to the complexities of modern
governments, giving rise to the adoption, within certain limits, of the principle of "subordinate
legislation," not only in the United States and England but in practically all modern
governments. Accordingly, with the growing complexity of modern life, the multiplication of the
subjects of governmental regulations, and the increased difficulty of administering the laws,
the rigidity of the theory of separation of governmental powers has, to a large extent, been
relaxed by permitting the delegation of greater powers by the legislative and vesting a larger
amount of discretion in administrative and executive officials, not only in the execution of the
laws, but also in the promulgation of certain rules and regulations calculated to promote public
interest.
The petitioner further contends that the rules and regulations promulgated by the respondents
pursuant to the provisions of Commonwealth Act No. 548 constitute an unlawful interference
with legitimate business or trade and abridge the right to personal liberty and freedom of
locomotion. Commonwealth Act No. 548 was passed by the National Assembly in the exercise
of the paramount police power of the state.
Said Act, by virtue of which the rules and regulations complained of were promulgated, aims
to promote safe transit upon and avoid obstructions on national roads, in the interest and
convenience of the public. In enacting said law, therefore, the National Assembly was
prompted by considerations of public convenience and welfare. It was inspired by a desire to
relieve congestion of traffic. which is, to say the least, a menace to public safety. Public
welfare, then, lies at the bottom of the enactment of said law, and the state in order to promote
the general welfare may interfere with personal liberty, with property, and with business and
occupations. Persons and property may be subjected to all kinds of restraints and burdens, in
order to secure the general comfort, health, and prosperity of the state (U.S. v. Gomez Jesus,
31 Phil., 218). To this fundamental aim of our Government the rights of the individual are
subordinated. Liberty is a blessing without which life is a misery, but liberty should not be
made to prevail over authority because then society will fall into anarchy. Neither should
authority be made to prevail over liberty because then the individual will fall into slavery. The
citizen should achieve the required balance of liberty and authority in his mind through
education and personal discipline, so that there may be established the resultant equilibrium,
which means peace and order and happiness for all. The moment greater authority is
conferred upon the government, logically so much is withdrawn from the residuum of liberty
which resides in the people. The paradox lies in the fact that the apparent curtailment of liberty

is precisely the very means of insuring its preservation.

The scope of police power keeps expanding as civilization advances. As was said in the case
of Dobbins v. Los Angeles (195 U.S. 223, 238; 49 L. ed. 169), "the right to exercise the police
power is a continuing one, and a business lawful today may in the future, because of the
changed situation, the growth of population or other causes, become a menace to the public
health and welfare, and be required to yield to the public good." And in People v. Pomar (46
Phil., 440), it was observed that "advancing civilization is bringing within the police power of
the state today things which were not thought of as being within such power yesterday. The
development of civilization, the rapidly increasing population, the growth of public opinion, with
an increasing desire on the part of the masses and of the government to look after and care
for the interests of the individuals of the state, have brought within the police power many
questions for regulation which formerly were not so considered."cralaw virtua1aw library
The petitioner finally avers that the rules and regulations complained of infringe upon the
constitutional precept regarding the promotion of social justice to insure the well-being and
economic security of all the people. The promotion of social justice, however, is to be achieved
not through a mistaken sympathy towards any given group. Social justice is "neither
communism, nor despotism, nor atomism, nor anarchy," but the humanization of laws and the
equalization of social and economic forces by the State so that justice in its rational and
objectively secular conception may at least be approximated. Social justice means the
promotion of the welfare of all the people, the adoption by the Government of measures
calculated to insure economic stability of all the competent elements of society, through the
maintenance of a proper economic and social equilibrium in the interrelations of the members
of the community, constitutionally, through the adoption of measures legally justifiable, or
extra-constitutionally, through the exercise of powers underlying the existence of all
governments on the time-honored principle of salus populi est suprema lex.

Republic of the Philippines

SUPREME COURT
Manila
FIRST DIVISION
G.R. No. L-39419 April 12, 1982

Social justice, therefore, must be founded on the recognition of the necessity of

interdependence among divers and diverse units of a society and of the protection that should
be equally and evenly extended to all groups as a combined force in our social and economic
life, consistent with the fundamental and paramount objective of the state of promoting the
health, comfort, and quiet of all persons, and of bringing about "the greatest good to the
greatest number."cralaw virtua1aw library
In view of the foregoing, the writ of prohibition prayed for is hereby denied, with costs against
the petitioner. So ordered.
Avancea, C.J., Imperial, Diaz. and Horrilleno. JJ. concur.

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, plaintiffappellee, 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.
In seeking reversal of the judgment of conviction, petitioner assigns the following errors 11
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.

Footnotes
1 p. 21, Rollo.
2 p. 11, CA Rollo.
3 p. 10, CA Rollo.
4 pp. 21-22, Rollo.
5 p. 7, Rollo.
6 p. 36, Rollo.
7 p. 51, Rollo.
8 p. 58, Rollo.
9 p. 69, Rollo.
10 p. 71, Rollo.
11 p. 69, Rollo; p. 6, Brief for the Petitioner.
12 pp. 25 and 26, Rollo.
13 Araneta vs. Concepcion, 99 Phil. 709; Tamayo vs. Gsell, 35 Phil. 953; Lopez vs. El Hogar
Filipino, 47 Phil. 249; Chartered Bank vs. Imperial, 48 Phil. 931.
14 People vs. Polmon 86 Phil. 350.
15 82 C.J.S., Section 345, pp. 699-700.
16 Tamayo vs. Gsell, 35 Phil. 953.
17 Co Kim Cham vs. Valdez Tan Keh & Dizon, 75 Phil. 371.
18 Jasper vs. State, 73 Tex. Cr. R 197; 164 S.W. 851.
19 149 p. 1074, 11 Okla. Crim. 594.
20 People vs. Sy Gesiong, 60 Phil. 614.

*Insert

People vs.
Ladjaalam
(Crim Case)
Here*

*Insert

People vs.
Sultan (Crim
Case)
Here*
Republic of the Philippines
SUPREME COURT
Manila
EN BANC
G.R. No. L-19201

June 16, 1965

REV. FR. CASIMIRO LLADOC, petitioner,

vs.
The COMMISSIONER OF INTERNAL REVENUE and The COURT of TAX APPEALS,
respondents.
Hilado and Hilado for petitioner.Office of the Solicitor General for respondents.

PAREDES, J.:
Sometime in 1957, the M.B. Estate, Inc., of Bacolod City, donated P10,000.00 in cash to Rev.
Fr. Crispin Ruiz, then parish priest of Victorias, Negros Occidental, and predecessor of herein
petitioner, for the construction of a new Catholic Church in the locality. The total amount was
actually spent for the purpose intended.
On March 3, 1958, the donor M.B. Estate, Inc., filed the donor's gift tax return. Under date of
April 29, 1960, the respondent Commissioner of Internal Revenue issued an assessment for
donee's gift tax against the Catholic Parish of Victorias, Negros Occidental, of which petitioner
was the priest. The tax amounted to P1,370.00 including surcharges, interests of 1% monthly
from May 15, 1958 to June 15, 1960, and the compromise for the late filing of the return.
Petitioner lodged a protest to the assessment and requested the withdrawal thereof. The
protest and the motion for reconsideration presented to the Commissioner of Internal Revenue
were denied. The petitioner appealed to the Court of Tax Appeals on November 2, 1960. In the
petition for review, the Rev. Fr. Casimiro Lladoc claimed, among others, that at the time of the
donation, he was not the parish priest in Victorias; that there is no legal entity or juridical
person known as the "Catholic Parish Priest of Victorias," and, therefore, he should not be
liable for the donee's gift tax. It was also asserted that the assessment of the gift tax, even
against the Roman Catholic Church, would not be valid, for such would be a clear violation of
the provisions of the Constitution.
After hearing, the CTA rendered judgment, the pertinent portions of which are quoted below:
... . Parish priests of the Roman Catholic Church under canon laws are similarly situated as its
Archbishops and Bishops with respect to the properties of the church within their parish. They
are the guardians, superintendents or administrators of these properties, with the right of
succession and may sue and be sued.
xxx
xxx
xxx
The petitioner impugns the, fairness of the assessment with the argument that he should not
be held liable for gift taxes on donation which he did not receive personally since he was not
yet the parish priest of Victorias in the year 1957 when said donation was given. It is intimated
that if someone has to pay at all, it should be petitioner's predecessor, the Rev. Fr. Crispin
Ruiz, who received the donation in behalf of the Catholic parish of Victorias or the Roman
Catholic Church. Following petitioner's line of thinking, we should be equally unfair to hold that
the assessment now in question should have been addressed to, and collected from, the Rev.
Fr. Crispin Ruiz to be paid from income derived from his present parish where ever it may be.
It does not seem right to indirectly burden the present parishioners of Rev. Fr. Ruiz for donee's
gift tax on a donation to which they were not benefited.
xxx
xxx
xxx
We saw no legal basis then as we see none now, to include within the Constitutional
exemption, taxes which partake of the nature of an excise upon the use made of the
properties or upon the exercise of the privilege of receiving the properties. (Phipps vs.
Commissioner of Internal Revenue, 91 F [2d] 627; 1938, 302 U.S. 742.)
It is a cardinal rule in taxation that exemptions from payment thereof are highly disfavored by
law, and the party claiming exemption must justify his claim by a clear, positive, or express
grant of such privilege by law. (Collector vs. Manila Jockey Club, G.R. No. L-8755, March 23,
1956; 53 O.G. 3762.)

The phrase "exempt from taxation" as employed in Section 22(3), Article VI of the Constitution
of the Philippines, should not be interpreted to mean exemption from all kinds of taxes.
Statutes exempting charitable and religious property from taxation should be construed fairly
though strictly and in such manner as to give effect to the main intent of the lawmakers.
(Roman Catholic Church vs. Hastrings 5 Phil. 701.)
xxx
xxx
xxx
WHEREFORE, in view of the foregoing considerations, the decision of the respondent
Commissioner of Internal Revenue appealed from, is hereby affirmed except with regard to
the imposition of the compromise penalty in the amount of P20.00 (Collector of Internal
Revenue v. U.S.T., G.R. No. L-11274, Nov. 28, 1958); ..., and the petitioner, the Rev. Fr.
Casimiro Lladoc is hereby ordered to pay to the respondent the amount of P900.00 as
donee's gift tax, plus the surcharge of five per centum (5%) as ad valorem penalty under
Section 119 (c) of the Tax Code, and one per centum (1%) monthly interest from May 15, 1958
to the date of actual payment. The surcharge of 25% provided in Section 120 for failure to file
a return may not be imposed as the failure to file a return was not due to willful neglect.( ... )
No costs.
The above judgment is now before us on appeal, petitioner assigning two (2) errors allegedly
committed by the Tax Court, all of which converge on the singular issue of whether or not
petitioner should be liable for the assessed donee's gift tax on the P10,000.00 donated for the
construction of the Victorias Parish Church.
Section 22 (3), Art. VI of the Constitution of the Philippines, exempts from taxation cemeteries,
churches and parsonages or convents, appurtenant thereto, and all lands, buildings, and
improvements used exclusively for religious purposes. The exemption is only from the
payment of taxes assessed on such properties enumerated, as property taxes, as contra
distinguished from excise taxes. In the present case, what the Collector assessed was a
donee's gift tax; the assessment was not on the properties themselves. It did not rest upon
general ownership; it was an excise upon the use made of the properties, upon the exercise of
the privilege of receiving the properties (Phipps vs. Com. of Int. Rec. 91 F 2d 627). Manifestly,
gift tax is not within the exempting provisions of the section just mentioned. A gift tax is not a
property tax, but an excise tax imposed on the transfer of property by way of gift inter vivos,
the imposition of which on property used exclusively for religious purposes, does not
constitute an impairment of the Constitution. As well observed by the learned respondent
Court, the phrase "exempt from taxation," as employed in the Constitution (supra) should not
be interpreted to mean exemption from all kinds of taxes. And there being no clear, positive or
express grant of such privilege by law, in favor of petitioner, the exemption herein must be
denied.
The next issue which readily presents itself, in view of petitioner's thesis, and Our finding that
a tax liability exists, is, who should be called upon to pay the gift tax? Petitioner postulates that
he should not be liable, because at the time of the donation he was not the priest of Victorias.
We note the merit of the above claim, and in order to put things in their proper light, this Court,
in its Resolution of March 15, 1965, ordered the parties to show cause why the Head of the
Diocese to which the parish of Victorias pertains, should not be substituted in lieu of petitioner
Rev. Fr. Casimiro Lladoc it appearing that the Head of such Diocese is the real party in
interest. The Solicitor General, in representation of the Commissioner of Internal Revenue,
interposed no objection to such a substitution. Counsel for the petitioner did not also offer
objection thereto.

On April 30, 1965, in a resolution, We ordered the Head of the Diocese to present whatever
legal issues and/or defenses he might wish to raise, to which resolution counsel for petitioner,
who also appeared as counsel for the Head of the Diocese, the Roman Catholic Bishop of
Bacolod, manifested that it was submitting itself to the jurisdiction and orders of this Court and
that it was presenting, by reference, the brief of petitioner Rev. Fr. Casimiro Lladoc as its own
and for all purposes.
In view here of and considering that as heretofore stated, the assessment at bar had been
properly made and the imposition of the tax is not a violation of the constitutional provision
exempting churches, parsonages or convents, etc. (Art VI, sec. 22 [3], Constitution), the Head
of the Diocese, to which the parish Victorias Pertains, is liable for the payment thereof.
The decision appealed from should be, as it is hereby affirmed insofar as tax liability is
concerned; it is modified, in the sense that petitioner herein is not personally liable for the said
gift tax, and that the Head of the Diocese, herein substitute petitioner, should pay, as he is
presently ordered to pay, the said gift tax, without special, pronouncement as to costs.
Bengzon, C.J., Bautista Angelo, Concepcion, Reyes, J.B.L., Dizon, Regala, Makalintal,
Bengzon, J.P., and Zaldivar, JJ., concur.Barrera, J., took no part.

Republic of the Philippines

SUPREME COURT
Manila
EN BANC
G.R. No. L-24670 December 14, 1979
ORTIGAS & CO., LIMITED PARTNERSHIP, plaintiff-appellant,

vs.
FEATI BANK AND TRUST CO., defendant-appellee.
Ramirez & Ortigas for appellant.
Taada, Teehankee & Carreon for appellee.
SANTOS, J.:
An appeal interposed on June 23, 1965 by plaintiff-appellant, Ortigas & Co., Limited
Partnership, from the decision of the Court of First Instance of Rizal, Branch VI, at Pasig, Hon.
Andres Reyes presiding, which dismissed its complaint in Civil Case No. 7706, entitled,
"Ortigas & Company, Limited Partnership, plaintiff, v. Feati Bank and Trust Company,
defendant," for lack of merit.
The following facts a reproduction of the lower court's findings, which, in turn, are based on
a stipulation of facts entered into by the parties are not disputed. Plaintiff (formerly known as
"Ortigas, Madrigal y Cia") is a limited partnership and defendant Feati Bank and Trust Co., is a
corporation duly organized and existing in accordance with the laws of the Philippines. Plaintiff
is engaged in real estate business, developing and selling lots to the public, particularly the
Highway Hills Subdivision along Epifanio de los Santos Avenue, Mandaluyong, Rizal. 1
On March 4, 1952, plaintiff, as vendor, and Augusto Padilla y Angeles and Natividad Angeles,
as vendees, entered into separate agreements of sale on installments over two parcels of
land, known as Lots Nos. 5 and 6, Block 31, of the Highway Hills Subdivision, situated at
Mandaluyong, Rizal. On July 19, 1962, the said vendees transferred their rights and interests
over the aforesaid lots in favor of one Emma Chavez. Upon completion of payment of the
purchase price, the plaintiff executed the corresponding deeds of sale in favor of Emma
Chavez. Both the agreements (of sale on installment) and the deeds of sale contained the
stipulations or restrictions that:
1. The parcel of land subject of this deed of sale shall be used the Buyer exclusively for
residential purposes, and she shall not be entitled to take or remove soil, stones or gravel
from it or any other lots belonging to the Seller.
2. All buildings and other improvements (except the fence) which may be constructed at any
time in said lot must be, (a) of strong materials and properly painted, (b) provided with modern
sanitary installations connected either to the public sewer or to an approved septic tank, and
(c) shall not be at a distance of less than two (2) meters from its boundary lines. 2
The above restrictions were later annotated in TCT Nos. 101509 and 101511 of the Register
of Deeds of Rizal, covering the said lots and issued in the name of Emma Chavez. 3
Eventually, defendant-appellee acquired Lots Nos. 5 and 6, with TCT Nos. 101613 and
106092 issued in its name, respectively and the building restrictions were also annotated
therein. 4 Defendant-appellee bought Lot No. 5 directly from Emma Chavez, "free from all liens
and encumbrances as stated in Annex 'D', 5 while Lot No. 6 was acquired from Republic Flour
Mills through a "Deed of Exchange," Annex "E". 6 TCT No. 101719 in the name of Republic
Flour Mills likewise contained the same restrictions, although defendant-appellee claims that
Republic Flour Mills purchased the said Lot No. 6 "in good faith. free from all liens and
encumbrances," as stated in the Deed of Sale, Annex "F" 7 between it and Emma Chavez.
Plaintiff-appellant claims that the restrictions annotated on TCT Nos. 101509, 101511, 101719,
101613, and 106092 were imposed as part of its general building scheme designed for the
beautification and development of the Highway Hills Subdivision which forms part of the big

landed estate of plaintiff-appellant where commercial and industrial sites are also designated
or established. 8
Defendant-appellee, upon the other hand, maintains that the area along the western part of
Epifanio de los Santos Avenue (EDSA) from Shaw Boulevard to Pasig River, has been
declared a commercial and industrial zone, per Resolution No. 27, dated February 4, 1960 of
the Municipal Council of Mandaluyong, Rizal. 9 It alleges that plaintiff-appellant 'completely
sold and transferred to third persons all lots in said subdivision facing Epifanio de los Santos
Avenue" 10 and the subject lots thereunder were acquired by it "only on July 23, 1962 or more
than two (2) years after the area ... had been declared a commercial and industrial zone ... 11
On or about May 5, 1963, defendant-appellee began laying the foundation and commenced
the construction of a building on Lots Nos. 5 and 6, to be devoted to banking purposes, but
which defendant-appellee claims could also be devoted to, and used exclusively for,
residential purposes. The following day, plaintiff-appellant demanded in writing that defendantappellee stop the construction of the commerical building on the said lots. The latter refused to
comply with the demand, contending that the building was being constructed in accordance
with the zoning regulations, defendant-appellee having filed building and planning permit
applications with the Municipality of Mandaluyong, and it had accordingly obtained building
and planning permits to proceed with the construction. 12
On the basis of the foregoing facts, Civil Case No. 7706, supra, was submitted in the lower
court for decision. The complaint sought, among other things, the issuance of "a writ of
preliminary injunction ... restraining and enjoining defendant, its agents, assigns, and those
acting on its or their behalf from continuing or completing the construction of a commercial
bank building in the premises ... involved, with the view to commanding the defendant to
observe and comply with the building restrictions annotated in the defendant's transfer
certificate of title."
In deciding the said case, the trial court considered, as the fundamental issue, whether or not
the resolution of the Municipal Council of Mandaluyong declaring Lots Nos. 5 and 6, among
others, as part of the commercial and industrial zone of the municipality, prevailed over the
building restrictions imposed by plaintiff-appellant on the lots in question. 13 The records do not
show that a writ of preliminary injunction was issued.
The trial court upheld the defendant-appellee and dismissed the complaint, holding that the
subject restrictions were subordinate to Municipal Resolution No. 27, supra. It predicated its
conclusion on the exercise of police power of the said municipality, and stressed that private
interest should "bow down to general interest and welfare. " In short, it upheld the
classification by the Municipal Council of the area along Epifanio de los Santos Avenue as a
commercial and industrial zone, and held that the same rendered "ineffective and
unenforceable" the restrictions in question as against defendant-appellee. 14 The trial court
decision further emphasized that it "assumes said resolution to be valid, considering that there
is no issue raised by either of the parties as to whether the same is null and void. 15
On March 2, 1965, plaintiff-appellant filed a motion for reconsideration of the above decision,
16
which motion was opposed by defendant-appellee on March 17, 1965. 17 It averred, among
others, in the motion for reconsideration that defendant- appellee "was duty bound to comply
with the conditions of the contract of sale in its favor, which conditions were duly annotated in
the Transfer Certificates of Title issued in her (Emma Chavez) favor." It also invited the trial
court's attention to its claim that the Municipal Council had (no) power to nullify the contractual
obligations assumed by the defendant corporation." 18

The trial court denied the motion for reconsideration in its order of March 26, 1965. 19
On April 2, 1965 plaintiff-appellant filed its notice of appeal from the decision dismissing the
complaint and from the order of March 26, 1965 denying the motion for reconsideration, its
record on appeal, and a cash appeal bond." 20 On April 14, the appeal was given due course 21
and the records of the case were elevated directly to this Court, since only questions of law
are raised. 22
Plaintiff-appellant alleges in its brief that the trial court erred
I. When it sustained the view that Resolution No. 27, series of 1960 of the Municipal Council
of Mandaluyong, Rizal declaring Lots Nos. 5 and 6, among others, as part of the commercial
and industrial zone, is valid because it did so in the exercise of its police power; and
II. When it failed to consider whether or not the Municipal Council had the power to nullify the
contractual obligations assumed by defendant-appellee and when it did not make a finding
that the building was erected along the property line, when it should have been erected two
meters away from said property line. 23
The defendant-appellee submitted its counter-assignment of errors. In this connection, We
already had occasion to hold in Relativo v. Castro 24 that "(I)t is not incumbent on the appellee,
who occupies a purely defensive position, and is seeking no affirmative relief, to make
assignments of error, "
The only issues to be resolved, therefore, are: (1) whether Resolution No. 27 s-1960 is a valid
exercise of police power; and (2) whether the said Resolution can nullify or supersede the
contractual obligations assumed by defendant-appellee.
1. The contention that the trial court erred in sustaining the validity of Resolution No. 27 as an
exercise of police power is without merit. In the first place, the validity of the said resolution
was never questioned before it. The rule is that the question of law or of fact which may be
included in the appellant's assignment of errors must be those which have been raised in the
court below, and are within the issues framed by the parties. 25 The object of requiring the
parties to present all questions and issues to the lower court before they can be presented to
the appellate court is to enable the lower court to pass thereon, so that the appellate court
upon appeal may determine whether or not such ruling was erroneous. The requirement is in
furtherance of justice in that the other party may not be taken by surprise. 26 The rule against
the practice of blowing "hot and cold" by assuming one position in the trial court and another
on appeal will, in the words of Elliot, prevent deception. 27 For it is well-settled that issues or
defenses not raised 28 or properly litigated 29 or pleaded 30 in the Court below cannot be raised
or entertained on appeal.
In this particular case, the validity of the resolution was admitted at least impliedly, in the
stipulation of facts below. when plaintiff-appellant did not dispute the same. The only
controversy then as stated by the trial court was whether or not the resolution of the Municipal
Council of Mandaluyong ... which declared lots Nos. 4 and 5 among others, as a part of the
commercial and industrial zone of the municipality, prevails over the restrictions constituting as
encumbrances on the lots in question. 31 Having admitted the validity of the subject resolution
below, even if impliedly, plaintiff-appellant cannot now change its position on appeal.
But, assuming arguendo that it is not yet too late in the day for plaintiff-appellant to raise the
issue of the invalidity of the municipal resolution in question, We are of the opinion that its
posture is unsustainable. Section 3 of R.A. No. 2264, otherwise known as the Local Autonomy
Act," 32 empowers a Municipal Council "to adopt zoning and subdivision ordinances or
regulations"; 33 for the municipality. Clearly, the law does not restrict the exercise of the power

through an ordinance. Therefore, granting that Resolution No. 27 is not an ordinance, it

certainly is a regulatory measure within the intendment or ambit of the word "regulation" under
the provision. As a matter of fact the same section declares that the power exists "(A)ny
provision of law to the contrary notwithstanding ... "
An examination of Section 12 of the same law 34 which prescribes the rules for its
interpretation likewise reveals that the implied power of a municipality should be "liberally
construed in its favor" and that "(A)ny fair and reasonable doubt as to the existence of the
power should be interpreted in favor of the local government and it shall be presumed to
exist." The same section further mandates that the general welfare clause be liberally
interpreted in case of doubt, so as to give more power to local governments in promoting the
economic conditions, social welfare and material progress of the people in the community. The
only exceptions under Section 12 are existing vested rights arising out of a contract between
"a province, city or municipality on one hand and a third party on the other," in which case the
original terms and provisions of the contract should govern. The exceptions, clearly, do not
apply in the case at bar.
2. With regard to the contention that said resolution cannot nullify the contractual obligations
assumed by the defendant-appellee referring to the restrictions incorporated in the deeds of
sale and later in the corresponding Transfer Certificates of Title issued to defendant-appellee
it should be stressed, that while non-impairment of contracts is constitutionally guaranteed,
the rule is not absolute, since it has to be reconciled with the legitimate exercise of police
power, i.e., "the power to prescribe regulations to promote the health, morals, peace,
education, good order or safety and general welfare of the people. 35 Invariably described as
"the most essential, insistent, and illimitable of powers" 36 and "in a sense, the greatest and
most powerful attribute of government, 37 the exercise of the power may be judicially inquired
into and corrected only if it is capricious, 'whimsical, unjust or unreasonable, there having
been a denial of due process or a violation of any other applicable constitutional guarantee. 38
As this Court held through Justice Jose P. Bengzon in Philippine Long Distance Company vs.
City of Davao, et al. 39 police power "is elastic and must be responsive to various social
conditions; it is not, confined within narrow circumscriptions of precedents resting on past
conditions; it must follow the legal progress of a democratic way of life." We were even more
emphatic in Vda. de Genuino vs. The Court of Agrarian Relations, et al., 40 when We declared:
"We do not see why public welfare when clashing with the individual right to property should
not be made to prevail through the state's exercise of its police power.
Resolution No. 27, s-1960 declaring the western part of highway 54, now E. de los Santos
Avenue (EDSA, for short) from Shaw Boulevard to the Pasig River as an industrial and
commercial zone, was obviously passed by the Municipal Council of Mandaluyong, Rizal in
the exercise of police power to safeguard or promote the health, safety, peace, good order
and general welfare of the people in the locality, Judicial notice may be taken of the conditions
prevailing in the area, especially where lots Nos. 5 and 6 are located. The lots themselves not
only front the highway; industrial and commercial complexes have flourished about the place.
EDSA, a main traffic artery which runs through several cities and municipalities in the Metro
Manila area, supports an endless stream of traffic and the resulting activity, noise and pollution
are hardly conducive to the health, safety or welfare of the residents in its route. Having been
expressly granted the power to adopt zoning and subdivision ordinances or regulations, the
municipality of Mandaluyong, through its Municipal 'council, was reasonably, if not perfectly,
justified under the circumstances, in passing the subject resolution.

The scope of police power keeps expanding as civilization advances, stressed this Court,
speaking thru Justice Laurel in the leading case of Calalang v. Williams et al., 41 ThusAs was said in the case of Dobbins v. Los Angeles (195 US 223, 238 49 L. ed. 169), 'the right
to exercise the police power is a continuing one, and a business lawful today may in the
future, because of changed situation, the growth of population or other causes, become a
menace to the public health and welfare, and be required to yield to the public good.' And in
People v. Pomar (46 Phil. 440), it was observed that 'advancing civilization is bringing within
the scope of police power of the state today things which were not thought of as being with in
such power yesterday. The development of civilization), the rapidly increasing population, the
growth of public opinion, with an increasing desire on the part of the masses and of the
government to look after and care for the interests of the individuals of the state, have brought
within the police power many questions for regulation which formerly were not so considered.
42
(Emphasis, supplied.)
Thus, the state, in order to promote the general welfare, may interfere with personal liberty,
with property, and with business and occupations. Persons may be subjected to all kinds of
restraints and burdens, in order to secure the general comfort health and prosperity of the
state 43 and to this fundamental aim of our Government, the rights of the individual are
subordinated. 44
The need for reconciling the non-impairment clause of the Constitution and the valid exercise
of police power may also be gleaned from Helvering v. Davis 45 wherein Mr. Justice Cardozo,
speaking for the Court, resolved the conflict "between one welfare and another, between
particular and general, thus
Nor is the concept of the general welfare static. Needs that were narrow or parochial a
century ago may be interwoven in our day with the well-being of the nation What is critical or
urgent changes with the times. 46
The motives behind the passage of the questioned resolution being reasonable, and it being a
" legitimate response to a felt public need," 47 not whimsical or oppressive, the non-impairment
of contracts clause of the Constitution will not bar the municipality's proper exercise of the
power. Now Chief Justice Fernando puts it aptly when he declared: "Police power legislation
then is not likely to succumb to the challenge that thereby contractual rights are rendered
nugatory." 48
Furthermore, We restated in Philippine American Life Ins. Co. v. Auditor General 49 that laws
and reservation of essential attributes of sovereign power are read into contracts agreed upon
by the parties. Thus
Not only are existing laws read into contracts in order to fix obligations as between the parties,
but the reservation of essential attributes of sovereign power is also read into contracts as a
postulate of the legal order. The policy of protecting contracts against impairments
presupposes the maintenance of a government by virtue of which contractual relations are
worthwhile a government which retains adequate authority to secure the peace and good
order of society.
Again, We held in Liberation Steamship Co., Inc. v. Court of Industrial Relations, 50 through
Justice J.B.L. Reyes, that ... the law forms part of, and is read into, every contract, unless
clearly excluded therefrom in those cases where such exclusion is allowed." The decision in
Maritime Company of the Philippines v. Reparations Commission, 51 written for the Court by
Justice Fernando, now Chief Justice, restates the rule.

One last observation. Appellant has placed unqualified reliance on American jurisprudence
and authorities 52 to bolster its theory that the municipal resolution in question cannot nullify or
supersede the agreement of the parties embodied in the sales contract, as that, it claims,
would impair the obligation of contracts in violation of the Constitution. Such reliance is
misplaced.
In the first place, the views set forth in American decisions and authorities are not per se
controlling in the Philippines, the laws of which must necessarily be construed in accordance
with the intention of its own lawmakers and such intent may be deduced from the language of
each law and the context of other local legislation related thereto. 53 and Burgess, et al v.
Magarian, et al., 55 two Of the cases cited by plaintiff-appellant, lend support to the conclusion
reached by the trial court, i.e. that the municipal resolution supersedes/supervenes over the
contractual undertaking between the parties. Dolan v. Brown, states that "Equity will not, as a
rule, enforce a restriction upon the use of property by injunction where the property has so
changed in character and environment as to make it unfit or unprofitable for use should the
restriction be enforced, but will, in such a case, leave the complainant to whatever remedy he
may have at law. 56 (Emphasis supplied.) Hence, the remedy of injunction in Dolan vs. Brown
was denied on the specific holding that "A grantor may lawfully insert in his deed conditions or
restrictions which are not against public policy and do not materially impair the beneficial
enjoyment of the estate. 57 Applying the principle just stated to the present controversy, We
can say that since it is now unprofitable, nay a hazard to the health and comfort, to use Lots
Nos. 5 and 6 for strictly residential purposes, defendants- appellees should be permitted, on
the strength of the resolution promulgated under the police power of the municipality, to use
the same for commercial purposes. In Burgess v. Magarian et al. it was, held that "restrictive
covenants running with the land are binding on all subsequent purchasers ... " However,
Section 23 of the zoning ordinance involved therein contained a proviso expressly declaring
that the ordinance was not intended "to interfere with or abrogate or annul any easements,
covenants or other agreement between parties." 58 In the case at bar, no such proviso is found
in the subject resolution.
It is, therefore, clear that even if the subject building restrictions were assumed by the
defendant-appellee as vendee of Lots Nos. 5 and 6, in the corresponding deeds of sale, and
later, in Transfer Certificates of Title Nos. 101613 and 106092, the contractual obligations so
assumed cannot prevail over Resolution No. 27, of the Municipality of Mandaluyong, which
has validly exercised its police power through the said resolution. Accordingly, the building
restrictions, which declare Lots Nos. 5 and 6 as residential, cannot be enforced.
IN VIEW OF THE FOREGOING, the decision appealed from, dismissing the complaint, is
hereby AFFIRMED. "without pronouncement as to costs.
SO ORDERED.
Makasiar, Antonio, Concepcion, Jr., Fernandez, Guerrero, De Castro and Melencio-Herrera,
JJ., concur.
Teehankee * and Aquino,JJ., took no part.
Separate Opinions
BARREDO, J., concurring:

I hold it is a matter of public knowledge that the place in question is commercial. It would be
worse if the same were to be left as residential and all around are already commercial.
FERNANDO, C.J., concurring:
The exhaustive and lucid opinion of the Court penned by Justice Guillermo S. Santos
commends itself for approval. I feel no hesitancy, therefore, in yielding concurrence, The
observation, however, in the dissent of Justice Vicente Abad Santos relative to restrictive
covenants calls, to my mind, for further reflection as to the respect to which they are entitled
whenever police power legislation, whether on the national or local level, is assailed. Before
doing so, however, it may not be amiss to consider further the effect of such all-embracing
attribute on existing contracts.
1. Reference was made in the opinion of the Court to Philippine American Life Insurance
Company v. Auditor General. 1 The ponente in that case was Justice Sanchez. A concurrence
came from me. It contained this qualification: "It cannot be said, without rendering nugatory
the constitutional guarantee of non-impairment, and for that matter both the equal protection
and due process clauses which equally serve to protect property rights, that at the mere
invocation of the police power, the objection on non-impairment grounds automatically loses
force. Here, as in other cases where governmental authority may trench upon property rights,
the process of balancing, adjustment or harmonization is called for. 2 After referring to three
leading United States Supreme Court decisions, Home Building and Loan Association v.
Blaisdell, 3 Nebbia v. New York, 4 and Norman v. Baltimore and Ohio Railroad Co., 5 I stated:
"All of the above decisions reflect the view that an enactment of a police power measure does
not per se call for the overruling of objections based on either due process or non-impairment
based on either due process or non-impairment grounds. There must be that balancing, or
adjustment, or harmonization of the conflicting claims posed by an exercise of state regulatory
power on the one hand and assertion of rights to property, whether of natural or of juridical
persons, on the other. 'That is the only way by which the constitutional guarantees may serve
the high ends that call for their inclusion in the Constitution and thus effectively preclude ally
abusive exercise of governmental authority." 6 Nor did my concurrence stop there: "In the
opinion of the Blaisdell case, penned by the then Chief Justice Hughes, there was this
understandable stress on balancing or harmonizing, which is called for in litigations of this
character: 'The policy of protecting contracts against impairment presupposes the
maintenance of a government by virtue of which contractual relations are worthwhile a
government which retains adequate authority to secure the peace and good order of society.
This principle of harmonizing the constitutional prohibition with the necessary residuum of
state power has had progressive recognition in the decisions of this Court.' Also to the same
effect: 'Undoubtedly, whatever is reserved of state power must be consistent with the fair
intent of the constitutional limitation of that power. The reserve power cannot be construed so
as to destroy the limitation, nor is the limitation to be construed to destroy the reserved power
in its essential aspects. 'They must be construed in harmony with each other. This principle
precludes a construction which would permit the State to adopt as its policy the repudiation of
debts or the destruction of contracts or the denial of means to enforce them. But it does not
follow that conditions may not arise in which a temporary restraint of enforcement may be
consistent with the spirit and purpose of the constitutional provision and thus be found to be
within the range of the reserved power of the State to protect the vital interests of the
community.' Further on, Chief Justice Hughes likewise stated: 'It is manifest from this review of

our decisions that there has been a growing appreciation of public needs and of the necessity
of finding ground for a rational compromise between individual rights and public welfare. " 7
This is the concluding paragraph of my concurrence in the Philippine American Life Insurance
Co. case: "If emphasis be therefore laid, as this concurring opinion does, on the pressing and
inescapable need for such an approach whenever a possible collision between state authority
and an assertion of constitutional right to property may exist, it is not to depart from what
sound constitutional orthodoxy dictates. It is rather to abide by what is compels. In litigations
of this character then, perhaps much more so than in other disputes, where there is a reliance
on a constitutional provision, the judiciary cannot escape what Holmes fitly referred to as the
sovereign prerogative of choice, the exercise of which might possibly be impugned if there be
no attempt, however slight, at such an effort of adjusting or reconciling the respective claims of
state regulatory power and constitutionally protected rights." 8
I adhere to such a view. This is not to say that there is a departure therefrom in the able and
scholarly opinion of Justice Santos. It is merely to stress what to my mind is a fundamental
postulate of our Constitution. The only point I would wish to add is that in the process of such
balancing and adjustment, the present Constitution, the Philippine American Life Insurance
Co. decision having been promulgated under the 1935 Charter, leaves no doubt that the claim
to property rights based on the non-impairment clause has a lesser weight. For as explicitly
provided by our present fundamental law: "The State shall promote social Justice to ensure
the dignity, welfare, and security of all the people. Towards this end, the
State shall regulate the acquisition, ownership, use, enjoyment, and disposition of private
property, and equitably diffuse property ownership and profits. 9
2. Now as to restrictive convenants, accurately included by Hart and Sacks under the category
of "private directive arrangements. " 10 Through them people are enable to agree on how to
order their affairs. They could be utilized to govern their affairs. They could be utilized to
govern their future conduct. It is a well-known fact that the common law relies to a great extent
on such private directive arrangements to attain a desirable social condition. More specifically,
such covenants are an important means of ordering one aspect of property relationships.
Through them, there could be delimitation of land use rights. It is quite understandable why
the law should ordinarily accord them deference, It does so, it has been said, both on grounds
of morality and utility. Nonetheless, there are limits to the literal enforcement of their terms. To
the extent that they ignore technological or economic progress, they are not automatically
entitled to judicial protection. Clearly, they must "speak from one point of time to another." 11
The parties, like all mortal, do not have the power of predicting the future with unfailing
certainty. In cases therefore where societal welfare calls for police power legislation, the
parties adversely affected should realize that arrangements dealing with property rights are
not impressed with sanctity. That approach, in my view, was the guiding principle of the
opinion of the Court. f fence my full and entire concurrence.
ABAD SANTOS, J:, dissenting:
Although Resolution No. 27, series of 1960, of the Municipal Council of Mandaluyong, Rizal, is
valid until otherwise declared, I do not believe that its enactment was by virtue of the police
power of that municipality. I do not here dispute the concept of police power as stated in
Primicias vs. Fugoso, 80 Phil. 77 (1948) for as a matter of fact I accept it. And I agree also that
it is elastic and must be responsive to various social conditions, etc. as ruled in PLDT vs. City
of Davao, L-23080, Oct. 26, 1965, 15 SCRA 244. But Resolution No. 27, cannot be described

as promotive of the health, morals, peace, education, good order or safety and general
welfare of the people of Mandaluyong. On the contrary, its effect is the opposite. For the
serenity, peace and quite of a residential section would by the resolution be replaced by the
chaos, turmoil and frenzy of commerce and industry. Where there would be no industrial and
noise pollution these bane of so-called progress would now pervade and suffocate the
environment to the detriment of the ecology. To characterize the ordinance as an exercise of
police power would be retrogressive. It will set back all the efforts of the Ministry of Human
Settlements to improve the quality of life especially in Metro Manila. It will make Metro Manila,
not the city of man as envisioned by its Governor but a city of commerce and industry.
Considering, therefore, that Resolution No, 2-1 was not enacted in the legitimate exercise of
police power, it cannot impair the restrictive covenants which go with the lands that were sold
by the plaintiff-appellant. I vote for the reversal of the appealed decision.
#Footnotes
1 Record on Appeal, p. 110.
2 Id., pp. 4-5. Emphasis supplied.
3 Id pp. 111-112.
4 Id., p. 112.
5 Id., p. 80.
6 Id., p. 86.
7 Id., p. 94.
8 Id., pp. 11 2-113.
9 Id., pp. 60 and 113.
10 Brief for Defendant-Appellee, p. 2.
11 Id, p. 3.
12 Record on Appeal, pp. 113-114.
13 Id., p. 114.
14 Id., pp. 114-115.
15 Id., p. 114.
16 Id., p. 116.
17 Id., p.118.
18 Id., p. 117.
19 Id., p. 127.
20 Id., pp. 127-129.
21 Id., p. 130.
22 Ibid.
23 See Brief for Defendant-Appellee, pp. 30-31.
24 76 Phil. 563, 567 (1946).
25 Sec. 18, Rule 46, Revised Rules of Court; Tan Machan v. De la Trinidad 3 Phil. 684,
(1946).
26 Francisco, The Revised Rules of Court, Vol. 111, 1968 Ed., p. 648, citing Jones v.
Seymour, 95 Art. 593, 597, 130 S.W. 560.
27 Id., pp.638-649, cit Elliot on Appellate Procedure, 416-417.
28 Sumerariz, et al. vs. Development Bank of the Philippines, et al., L-23764, Dec. 26, 1967,
21 SCRA 1374: San Miguel Brewery, et al. vs. Vda. de Joves. et al., L-24258, June 26, 1968,

23 SCRA 1093, 1097. See also Tuason vs. Hon. Arca, et al., L- 24346, June 29, 1968, 23
SCRA 1308, 1312.
29 Plaridel Surety and Ins. Co. vs. Commissioner of Internal Revenue, L-21520, Dec. 11,
1967, 21 SCRA 1187.
30 Manila Port Service, et al vs, Court of Appeals, et al., L21890, March 29. 1968, 22 SCRA
1364.
31 Record on Appeal, p. 114.
32 Sec. 3 reads:
Sec. 3. Additional powers of provincial boards, municipal boards or city councils and municipal
and regularly organized municipal district councils.
xxx xxx xxx
Power to adopt zoning and planning ordinances. Any provision of law to the contrary
notwithstanding Municipal Boards or City Councils in cities, and Municipal Councils in
municipalities are hereby authorized to adopt zoning and subdivision ordinances or
regulations for their respective cities and municipalities subject to the approval of the City
Mayor or Municipal Mayor, as the case may be. Cities and municipalities may, however,
consult the National Planning Commission on matters pertaining to planning and zoning.
(Emphasis supplied).
33 Emphasis supplied.
34 The full text of Section 12 follows:
SEC. 12. Rules for the Interpretation of the Local Autonomy Act.
1. Implied power of a province, a city or municipality shall be liberally construed in its favor.
Any fair and reasonable doubt as to the existence of the power should be interpreted infavor
of the local government and it shall be presumed to exist.
2. The general welfare clause be liberally interpreted in case of local governments in
promoting the economic condition, social welfare and material progress of the people in the
community.
3. Vested rights existing at the time of the promulgation of this arising out of a contract
between a province, city or municipality on one hand and third party on the other, should be
governed by the original terms and provisions of the same, and in no case would this act
infringe existing right.
35 Primicias vs. Fugoso 80 Phil, 77 (1948).
36 Smith Bell & Co. v. Natividad, 40 Phil. 136 (1919), citing earlier authorities, Justice Malcolm
ponente.
37 Edu v. Ericta, L-3206, Oct. 24, 1970, 35 SCRA 487, Justice Fernando, now Chief Justice,
speaking for the court.
38 See Ermita-Malate Hotel and Motel Operators Association, Inc. v. City Mayor of Manila, L24693, July 31, 1967, 20 SCRA 849, Justice Fernando, now Chief Justice, also wrote the
decision for the Court.
39 L-23080, Oct. 20, 1965, 15 SCRA 244, 247-248.
40 L-25035, Feb. 26, 1968, 22 SCRA 792, 797.
41 70 Phil. 726 (1940).
42 Id., P. 734; Emphasis supplied.
43 Id., p. 733, citing U.S. v. Gomez Jesus, 31 Phil. 218 (1915).
44 Id., p. 733.
45 301 U.S. 619 (1937).

46 Emphasis supplied.
47 Edu v. Ericta, supra, p. 489.
48 Fernando on the Philippine Constitution, 1974 ed., p. 558.
49 L-19255, January 18, 1968, 22 SCRA 135, citing Home Building and Loan Association v.
Blaisedell, 78 L. ed., 413, 428.
50 L-25389-90, June 27, 1968, 28 SCRA 1115, citing Manresa, Comm. Vol. 8, part 2 (5th Ed.)
p. 535.
51 L-29203, July 26, 1971, 40 SCRA 75.
52 Brief for Plaintiff-Appellant, pp. 9-17.
53 Proctor & Gamble Philippine Manufacturing Corporation vs. Commissioner of Customs, L24173, May 23, 1968, 23 SCRA 691.
54 170 NE 425, 428 Illinois (1930).
55 243 NW 356, 358-359 Iowa (1932).
56 Op. Cit at p. 427.
57 Id., Id.
58 Op. Cit. at p. 358.
1 L-19244, January 18, 1968, 22 SCRA 135.
2 Ibid, 148.
3 290 US 398 (1934).
* Justice Teehankee was co-counsel for defendant-appellee.
4 291 US 502 (1934).
5 294 US 240 (1935).
6 Ibid, 151-152.
7 Ibid., 152-153.
8 Ibid., 155.
9 Article II, Section 6 of the Constitution.
10 H. Hart and A. Sacks, The Legal Process, 124.
11 Ibid, 125.

Republic of the Philippines

SUPREME COURT
Manila
SECOND DIVISION
G.R. No. 117188 August 7, 1997
LOYOLA GRAND VILLAS HOMEOWNERS (SOUTH) ASSOCIATION, INC., petitioner,
vs.
HON. COURT OF APPEALS, HOME INSURANCE AND GUARANTY CORPORATION,
EMDEN ENCARNACION and HORATIO AYCARDO, respondents.
ROMERO, J.:
May the failure of a corporation to file its by-laws within one month from the date of its
incorporation, as mandated by Section 46 of the Corporation Code, result in its automatic
dissolution?
This is the issue raised in this petition for review on certiorari of the Decision 1 of the Court of
Appeals affirming the decision of the Home Insurance and Guaranty Corporation (HIGC). This
quasi-judicial body recognized Loyola Grand Villas Homeowners Association (LGVHA) as the
sole homeowners' association in Loyola Grand Villas, a duly registered subdivision in Quezon
City and Marikina City that was owned and developed by Solid Homes, Inc. It revoked the
certificates of registration issued to Loyola Grand Villas homeowners (North) Association
Incorporated (the North Association for brevity) and Loyola Grand Villas Homeowners (South)
Association Incorporated (the South Association).
LGVHAI was organized on February 8, 1983 as the association of homeowners and residents
of the Loyola Grand Villas. It was registered with the Home Financing Corporation, the
predecessor of herein respondent HIGC, as the sole homeowners' organization in the said
subdivision under Certificate of Registration No. 04-197. It was organized by the developer of
the subdivision and its first president was Victorio V. Soliven, himself the owner of the
developer. For unknown reasons, however, LGVHAI did not file its corporate by-laws.
Sometime in 1988, the officers of the LGVHAI tried to register its by-laws. They failed to do so.
2
To the officers' consternation, they discovered that there were two other organizations within
the subdivision the North Association and the South Association. According to private
respondents, a non-resident and Soliven himself, respectively headed these associations.
They also discovered that these associations had five (5) registered homeowners each who
were also the incorporators, directors and officers thereof. None of the members of the
LGVHAI was listed as member of the North Association while three (3) members of LGVHAI
were listed as members of the South Association. 3 The North Association was registered with
the HIGC on February 13, 1989 under Certificate of Registration No. 04-1160 covering Phases
West II, East III, West III and East IV. It submitted its by-laws on December 20, 1988.
In July, 1989, when Soliven inquired about the status of LGVHAI, Atty. Joaquin A. Bautista, the
head of the legal department of the HIGC, informed him that LGVHAI had been automatically

dissolved for two reasons. First, it did not submit its by-laws within the period required by the
Corporation Code and, second, there was non-user of corporate charter because HIGC had
not received any report on the association's activities. Apparently, this information resulted in
the registration of the South Association with the HIGC on July 27, 1989 covering Phases
West I, East I and East II. It filed its by-laws on July 26, 1989.
These developments prompted the officers of the LGVHAI to lodge a complaint with the HIGC.
They questioned the revocation of LGVHAI's certificate of registration without due notice and
hearing and concomitantly prayed for the cancellation of the certificates of registration of the
North and South Associations by reason of the earlier issuance of a certificate of registration
in favor of LGVHAI.
On January 26, 1993, after due notice and hearing, private respondents obtained a favorable
ruling from HIGC Hearing Officer Danilo C. Javier who disposed of HIGC Case No. RRM-5-89
as follows:
WHEREFORE, judgment is hereby rendered recognizing the Loyola Grand Villas
Homeowners Association, Inc., under Certificate of Registration No. 04-197 as the duly
registered and existing homeowners association for Loyola Grand Villas homeowners, and
declaring the Certificates of Registration of Loyola Grand Villas Homeowners (North)
Association, Inc. and Loyola Grand Villas Homeowners (South) Association, Inc. as hereby
revoked or cancelled; that the receivership be terminated and the Receiver is hereby ordered
to render an accounting and turn-over to Loyola Grand Villas Homeowners Association, Inc.,
all assets and records of the Association now under his custody and possession.
The South Association appealed to the Appeals Board of the HIGC. In its Resolution of
September 8, 1993, the Board 4 dismissed the appeal for lack of merit.
Rebuffed, the South Association in turn appealed to the Court of Appeals, raising two issues.
First, whether or not LGVHAI's failure to file its by-laws within the period prescribed by Section
46 of the Corporation Code resulted in the automatic dissolution of LGVHAI. Second, whether
or not two homeowners' associations may be authorized by the HIGC in one "sprawling
subdivision." However, in the Decision of August 23, 1994 being assailed here, the Court of
Appeals affirmed the Resolution of the HIGC Appeals Board.
In resolving the first issue, the Court of Appeals held that under the Corporation Code, a
private corporation commences to have corporate existence and juridical personality from the
date the Securities and Exchange Commission (SEC) issues a certificate of incorporation
under its official seal. The requirement for the filing of by-laws under Section 46 of the
Corporation Code within one month from official notice of the issuance of the certificate of
incorporation presupposes that it is already incorporated, although it may file its by-laws with
its articles of incorporation. Elucidating on the effect of a delayed filing of by-laws, the Court of
Appeals said:
We also find nothing in the provisions cited by the petitioner, i.e., Section 46 and 22,
Corporation Code, or in any other provision of the Code and other laws which provide or at
least imply that failure to file the by-laws results in an automatic dissolution of the corporation.
While Section 46, in prescribing that by-laws must be adopted within the period prescribed
therein, may be interpreted as a mandatory provision, particularly because of the use of the
word "must," its meaning cannot be stretched to support the argument that automatic
dissolution results from non-compliance.
We realize that Section 46 or other provisions of the Corporation Code are silent on the result
of the failure to adopt and file the by-laws within the required period. Thus, Section 46 and

other related provisions of the Corporation Code are to be construed with Section 6 (1) of P.D.
902-A. This section empowers the SEC to suspend or revoke certificates of registration on the
grounds listed therein. Among the grounds stated is the failure to file by-laws (see also II
Campos: The Corporation Code, 1990 ed., pp. 124-125). Such suspension or revocation, the
same section provides, should be made upon proper notice and hearing. Although P.D. 902-A
refers to the SEC, the same principles and procedures apply to the public respondent HIGC
as it exercises its power to revoke or suspend the certificates of registration or homeowners
association. (Section 2 [a], E.O. 535, series 1979, transferred the powers and authorities of
the SEC over homeowners associations to the HIGC.)
We also do not agree with the petitioner's interpretation that Section 46, Corporation Code
prevails over Section 6, P.D. 902-A and that the latter is invalid because it contravenes the
former. There is no basis for such interpretation considering that these two provisions are not
inconsistent with each other. They are, in fact, complementary to each other so that one
cannot be considered as invalidating the other.
The Court of Appeals added that, as there was no showing that the registration of LGVHAI
had been validly revoked, it continued to be the duly registered homeowners' association in
the Loyola Grand Villas. More importantly, the South Association did not dispute the fact that
LGVHAI had been organized and that, thereafter, it transacted business within the period
prescribed by law.
On the second issue, the Court of Appeals reiterated its previous ruling 5 that the HIGC has
the authority to order the holding of a referendum to determine which of two contending
associations should represent the entire community, village or subdivision.
Undaunted, the South Association filed the instant petition for review on certiorari. It elevates
as sole issue for resolution the first issue it had raised before the Court of Appeals, i.e.,
whether or not the LGVHAI's failure to file its by-laws within the period prescribed by Section
46 of the Corporation Code had the effect of automatically dissolving the said corporation.
Petitioner contends that, since Section 46 uses the word "must" with respect to the filing of bylaws, noncompliance therewith would result in "self-extinction" either due to non-occurrence of
a suspensive condition or the occurrence of a resolutory condition "under the hypothesis that
(by) the issuance of the certificate of registration alone the corporate personality is deemed
already formed." It asserts that the Corporation Code provides for a "gradation of violations of
requirements." Hence, Section 22 mandates that the corporation must be formally organized
and should commence transaction within two years from date of incorporation. Otherwise, the
corporation would be deemed dissolved. On the other hand, if the corporation commences
operations but becomes continuously inoperative for five years, then it may be suspended or
its corporate franchise revoked.
Petitioner concedes that Section 46 and the other provisions of the Corporation Code do not
provide for sanctions for non-filing of the by-laws. However, it insists that no sanction need be
provided "because the mandatory nature of the provision is so clear that there can be no
doubt about its being an essential attribute of corporate birth." To petitioner, its submission is
buttressed by the facts that the period for compliance is "spelled out distinctly;" that the
certification of the SEC/HIGC must show that the by-laws are not inconsistent with the Code,
and that a copy of the by-laws "has to be attached to the articles of incorporation." Moreover,
no sanction is provided for because "in the first place, no corporate identity has been
completed." Petitioner asserts that "non-provision for remedy or sanction is itself the tacit
proclamation that non-compliance is fatal and no corporate existence had yet evolved," and

therefore, there was "no need to proclaim its demise." 6 In a bid to convince the Court of its
arguments, petitioner stresses that:
. . . the word MUST is used in Sec. 46 in its universal literal meaning and corollary human
implication its compulsion is integrated in its very essence MUST is always enforceable
by the inevitable consequence that is, "OR ELSE". The use of the word MUST in Sec. 46 is
no exception it means file the by-laws within one month after notice of issuance of
certificate of registration OR ELSE. The OR ELSE, though not specified, is inextricably a part
of MUST . Do this or if you do not you are "Kaput". The importance of the by-laws to corporate
existence compels such meaning for as decreed the by-laws is "the government" of the
corporation. Indeed, how can the corporation do any lawful act as such without by-laws.
Surely, no law is indeed to create chaos. 7
Petitioner asserts that P.D. No. 902-A cannot exceed the scope and power of the Corporation
Code which itself does not provide sanctions for non-filing of by-laws. For the petitioner, it is
"not proper to assess the true meaning of Sec. 46 . . . on an unauthorized provision on such
matter contained in the said decree."
In their comment on the petition, private respondents counter that the requirement of adoption
of by-laws is not mandatory. They point to P.D. No. 902-A as having resolved the issue of
whether said requirement is mandatory or merely directory. Citing Chung Ka Bio v.
Intermediate Appellate Court, 8 private respondents contend that Section 6(I) of that decree
provides that non-filing of by-laws is only a ground for suspension or revocation of the
certificate of registration of corporations and, therefore, it may not result in automatic
dissolution of the corporation. Moreover, the adoption and filing of by-laws is a condition
subsequent which does not affect the corporate personality of a corporation like the LGVHAI.
This is so because Section 9 of the Corporation Code provides that the corporate existence
and juridical personality of a corporation begins from the date the SEC issues a certificate of
incorporation under its official seal. Consequently, even if the by-laws have not yet been filed,
a corporation may be considered a de facto corporation. To emphasize the fact the LGVHAI
was registered as the sole homeowners' association in the Loyola Grand Villas, private
respondents point out that membership in the LGVHAI was an "unconditional restriction in the
deeds of sale signed by lot buyers."
In its reply to private respondents' comment on the petition, petitioner reiterates its argument
that the word " must" in Section 46 of the Corporation Code is mandatory. It adds that, before
the ruling in Chung Ka Bio v. Intermediate Appellate Court could be applied to this case, this
Court must first resolve the issue of whether or not the provisions of P.D. No. 902-A
prescribing the rules and regulations to implement the Corporation Code can "rise above and
change" the substantive provisions of the Code.
The pertinent provision of the Corporation Code that is the focal point of controversy in this
case states:
Sec. 46. Adoption of by-laws. Every corporation formed under this Code, must within one
(1) month after receipt of official notice of the issuance of its certificate of incorporation by the
Securities and Exchange Commission, adopt a code of by-laws for its government not
inconsistent with this Code. For the adoption of by-laws by the corporation, the affirmative vote
of the stockholders representing at least a majority of the outstanding capital stock, or of at
least a majority of the members, in the case of non-stock corporations, shall be necessary.
The by-laws shall be signed by the stockholders or members voting for them and shall be kept
in the principal office of the corporation, subject to the stockholders or members voting for

them and shall be kept in the principal office of the corporation, subject to inspection of the
stockholders or members during office hours; and a copy thereof, shall be filed with the
Securities and Exchange Commission which shall be attached to the original articles of
incorporation.
Notwithstanding the provisions of the preceding paragraph, by-laws may be adopted and filed
prior to incorporation; in such case, such by-laws shall be approved and signed by all the
incorporators and submitted to the Securities and Exchange Commission, together with the
articles of incorporation.
In all cases, by-laws shall be effective only upon the issuance by the Securities and Exchange
Commission of a certification that the by-laws are not inconsistent with this Code.
The Securities and Exchange Commission shall not accept for filing the by-laws or any
amendment thereto of any bank, banking institution, building and loan association, trust
company, insurance company, public utility, educational institution or other special
corporations governed by special laws, unless accompanied by a certificate of the appropriate
government agency to the effect that such by-laws or amendments are in accordance with
law.
As correctly postulated by the petitioner, interpretation of this provision of law begins with the
determination of the meaning and import of the word "must" in this section Ordinarily, the word
"must" connotes an imperative act or operates to impose a duty which may be enforced. 9 It is
synonymous with "ought" which connotes compulsion or mandatoriness. 10 However, the word
"must" in a statute, like "shall," is not always imperative. It may be consistent with an exercise
of discretion. In this jurisdiction, the tendency has been to interpret "shall" as the context or a
reasonable construction of the statute in which it is used demands or requires. 11 This is
equally true as regards the word "must." Thus, if the languages of a statute considered as a
whole and with due regard to its nature and object reveals that the legislature intended to use
the words "shall" and "must" to be directory, they should be given that meaning. 12
In this respect, the following portions of the deliberations of the Batasang Pambansa No. 68
are illuminating:
MR. FUENTEBELLA. Thank you, Mr. Speaker.
On page 34, referring to the adoption of by-laws, are we made to understand here, Mr.
Speaker, that by-laws must immediately be filed within one month after the issuance? In other
words, would this be mandatory or directory in character?
MR. MENDOZA. This is mandatory.
MR. FUENTEBELLA. It being mandatory, Mr. Speaker, what would be the effect of the failure
of the corporation to file these by-laws within one month?
MR. MENDOZA. There is a provision in the latter part of the Code which identifies and
describes the consequences of violations of any provision of this Code. One such
consequences is the dissolution of the corporation for its inability, or perhaps, incurring certain
penalties.
MR. FUENTEBELLA. But it will not automatically amount to a dissolution of the corporation by
merely failing to file the by-laws within one month. Supposing the corporation was late, say,
five days, what would be the mandatory penalty?
MR. MENDOZA. I do not think it will necessarily result in the automatic or ipso facto
dissolution of the corporation. Perhaps, as in the case, as you suggested, in the case of El
Hogar Filipino where a quo warranto action is brought, one takes into account the gravity of
the violation committed. If the by-laws were late the filing of the by-laws were late by,

perhaps, a day or two, I would suppose that might be a tolerable delay, but if they are delayed
over a period of months as is happening now because of the absence of a clear
requirement that by-laws must be completed within a specified period of time, the corporation
must suffer certain consequences. 13
This exchange of views demonstrates clearly that automatic corporate dissolution for failure to
file the by-laws on time was never the intention of the legislature. Moreover, even without
resorting to the records of deliberations of the Batasang Pambansa, the law itself provides the
answer to the issue propounded by petitioner.
Taken as a whole and under the principle that the best interpreter of a statute is the statute
itself (optima statuli interpretatix est ipsum statutum), 14 Section 46 aforequoted reveals the
legislative intent to attach a directory, and not mandatory, meaning for the word "must" in the
first sentence thereof. Note should be taken of the second paragraph of the law which allows
the filing of the by-laws even prior to incorporation. This provision in the same section of the
Code rules out mandatory compliance with the requirement of filing the by-laws "within one (1)
month after receipt of official notice of the issuance of its certificate of incorporation by the
Securities and Exchange Commission." It necessarily follows that failure to file the by-laws
within that period does not imply the "demise" of the corporation. By-laws may be necessary
for the "government" of the corporation but these are subordinate to the articles of
incorporation as well as to the Corporation Code and related statutes. 15 There are in fact
cases where by-laws are unnecessary to corporate existence or to the valid exercise of
corporate powers, thus:
In the absence of charter or statutory provisions to the contrary, by-laws are not necessary
either to the existence of a corporation or to the valid exercise of the powers conferred upon it,
certainly in all cases where the charter sufficiently provides for the government of the body;
and even where the governing statute in express terms confers upon the corporation the
power to adopt by-laws, the failure to exercise the power will be ascribed to mere nonaction
which will not render void any acts of the corporation which would otherwise be valid. 16
(Emphasis supplied.)
As Fletcher aptly puts it:
It has been said that the by-laws of a corporation are the rule of its life, and that until by-laws
have been adopted the corporation may not be able to act for the purposes of its creation, and
that the first and most important duty of the members is to adopt them. This would seem to
follow as a matter of principle from the office and functions of by-laws. Viewed in this light, the
adoption of by-laws is a matter of practical, if not one of legal, necessity. Moreover, the
peculiar circumstances attending the formation of a corporation may impose the obligation to
adopt certain by-laws, as in the case of a close corporation organized for specific purposes.
And the statute or general laws from which the corporation derives its corporate existence
may expressly require it to make and adopt by-laws and specify to some extent what they
shall contain and the manner of their adoption. The mere fact, however, of the existence of
power in the corporation to adopt by-laws does not ordinarily and of necessity make the
exercise of such power essential to its corporate life, or to the validity of any of its acts. 17
Although the Corporation Code requires the filing of by-laws, it does not expressly provide for
the consequences of the non-filing of the same within the period provided for in Section 46.
However, such omission has been rectified by Presidential Decree No. 902-A, the pertinent
provisions on the jurisdiction of the SEC of which state:

Sec. 6. In order to effectively exercise such jurisdiction, the Commission shall possess the
following powers:
xxx xxx xxx
(1) To suspend, or revoke, after proper notice and hearing, the franchise or certificate of
registration of corporations, partnerships or associations, upon any of the grounds provided by
law, including the following:
xxx xxx xxx
5. Failure to file by-laws within the required period;
xxx xxx xxx
In the exercise of the foregoing authority and jurisdiction of the Commission or by a
Commissioner or by such other bodies, boards, committees and/or any officer as may be
created or designated by the Commission for the purpose. The decision, ruling or order of any
such Commissioner, bodies, boards, committees and/or officer may be appealed to the
Commission sitting en banc within thirty (30) days after receipt by the appellant of notice of
such decision, ruling or order. The Commission shall promulgate rules of procedures to govern
the proceedings, hearings and appeals of cases falling with its jurisdiction.
The aggrieved party may appeal the order, decision or ruling of the Commission sitting en
banc to the Supreme Court by petition for review in accordance with the pertinent provisions
of the Rules of Court.
Even under the foregoing express grant of power and authority, there can be no automatic
corporate dissolution simply because the incorporators failed to abide by the required filing of
by-laws embodied in Section 46 of the Corporation Code. There is no outright "demise" of
corporate existence. Proper notice and hearing are cardinal components of due process in
any democratic institution, agency or society. In other words, the incorporators must be given
the chance to explain their neglect or omission and remedy the same.
That the failure to file by-laws is not provided for by the Corporation Code but in another law is
of no moment. P.D. No. 902-A, which took effect immediately after its promulgation on March
11, 1976, is very much apposite to the Code. Accordingly, the provisions abovequoted supply
the law governing the situation in the case at bar, inasmuch as the Corporation Code and P.D.
No. 902-A are statutes in pari materia. Interpretare et concordare legibus est optimus
interpretandi. Every statute must be so construed and harmonized with other statutes as to
form a uniform system of jurisprudence. 18
As the "rules and regulations or private laws enacted by the corporation to regulate, govern
and control its own actions, affairs and concerns and its stockholders or members and
directors and officers with relation thereto and among themselves in their relation to it," 19 bylaws are indispensable to corporations in this jurisdiction. These may not be essential to
corporate birth but certainly, these are required by law for an orderly governance and
management of corporations. Nonetheless, failure to file them within the period required by
law by no means tolls the automatic dissolution of a corporation.
In this regard, private respondents are correct in relying on the pronouncements of this Court
in Chung Ka Bio v. Intermediate Appellate Court, 20 as follows:
. . . . Moreover, failure to file the by-laws does not automatically operate to dissolve a
corporation but is now considered only a ground for such dissolution.
Section 19 of the Corporation Law, part of which is now Section 22 of the Corporation Code,
provided that the powers of the corporation would cease if it did not formally organize and
commence the transaction of its business or the continuation of its works within two years

from date of its incorporation. Section 20, which has been reproduced with some modifications
in Section 46 of the Corporation Code, expressly declared that "every corporation formed
under this Act, must within one month after the filing of the articles of incorporation with the
Securities and Exchange Commission, adopt a code of by-laws." Whether this provision
should be given mandatory or only directory effect remained a controversial question until it
became academic with the adoption of PD 902-A. Under this decree, it is now clear that the
failure to file by-laws within the required period is only a ground for suspension or revocation
of the certificate of registration of corporations.
Non-filing of the by-laws will not result in automatic dissolution of the corporation. Under
Section 6(I) of PD 902-A, the SEC is empowered to "suspend or revoke, after proper notice
and hearing, the franchise or certificate of registration of a corporation" on the ground inter
alia of "failure to file by-laws within the required period." It is clear from this provision that there
must first of all be a hearing to determine the existence of the ground, and secondly, assuming
such finding, the penalty is not necessarily revocation but may be only suspension of the
charter. In fact, under the rules and regulations of the SEC, failure to file the by-laws on time
may be penalized merely with the imposition of an administrative fine without affecting the
corporate existence of the erring firm.
It should be stressed in this connection that substantial compliance with conditions
subsequent will suffice to perfect corporate personality. Organization and commencement of
transaction of corporate business are but conditions subsequent and not prerequisites for
acquisition of corporate personality. The adoption and filing of by-laws is also a condition
subsequent. Under Section 19 of the Corporation Code, a Corporation commences its
corporate existence and juridical personality and is deemed incorporated from the date the
Securities and Exchange Commission issues certificate of incorporation under its official seal.
This may be done even before the filing of the by-laws, which under Section 46 of the
Corporation Code, must be adopted "within one month after receipt of official notice of the
issuance of its certificate of incorporation." 21
That the corporation involved herein is under the supervision of the HIGC does not alter the
result of this case. The HIGC has taken over the specialized functions of the former Home
Financing Corporation by virtue of Executive Order No. 90 dated December 17, 1989. 22 With
respect to homeowners associations, the HIGC shall "exercise all the powers, authorities and
responsibilities that are vested on the Securities and Exchange Commission . . . , the
provision of Act 1459, as amended by P.D. 902-A, to the contrary notwithstanding." 23
WHEREFORE, the instant petition for review on certiorari is hereby DENIED and the
questioned Decision of the Court of Appeals AFFIRMED. This Decision is immediately
executory. Costs against petitioner.
SO ORDERED.
Regalado, Puno and Mendoza, JJ., concur.
Torres, Jr., J., is on leave.
Footnotes
1 Penned by Associate Justice Antonio M. Martinez and concurred in by Associate Justice
Quirino D. Abad Santos, Jr. and Godardo A. Jacinto.

2 On March 4, 1993, LGVHAI filed its by-laws with the HIGC. Its filing fee was duly receipted
for under O.R. No. 6393291 (Private Respondents' Comment, p. 5; Rollo, p. 72).
3 Private Respondents' Comment, pp. 3-4.
4 Fernando M. Miranda, Jr., Chairman, and Wilfredo F. Hernandez, Arthur G. Tan and Aida A.
Mendoza, Members.
5 This was in Bagong Lipunan Community Association v. HIGC, CA-G.R. SP No. 12592,
November 16, 1987.
6 Petition, pp. 7-10.
7 Ibid., p. 10-11.
8 G.R. No. 71837, July 26, 1988, 163 SCRA 534.
9 Soco v. Hon. Militante, et al., 208 Phil. 151, 154 (1983); Caltex Filipino Managers &
Supervisors Ass'n v. CIR, 131 Phil. 1022, 1029 (1968).
10 People v. Tamani, L-22160 & 22161, January 21, 1974, 55 SCRA 153, 157.
11 Diokno v. Rehabilitation Finance Corporation, 91 Phil. 608, 611 (1952).
12 27A WORDS AND PHRASES 650 citing Arkansas State Highway Commission v. Mabry,
315 S.W. 2d 900, 905, 229 Ark. 261.
13 Record of the Batasang Pambansa, Vol. III, November 12, 1979, p. 1303.
14 Lopez and Javelona v. El Hogan Filipino, 47 Phil. 249, 277 (1925) cited in AGPALO,
STATUTORY CONSTRUCTION, 3rd ed., p. 197.
15 CAMPOS, THE CORPORATION CODE, Vol. I, 1990 ed., p. 123.
16 18 C.J.S. 595-596.
17 8 FLETCHER, CYCLOPEDIA OF THE LAW OF PRIVATE CORPORATIONS 640.
18 Corona v. Court of Appeals, G.R. No. 97356, September 30, 1992, 214 SCRA 378, 392.
19 8 FLETCHER, supra, at p. 633.
20 Supra.
21 Ibid., at pp. 543-544.
22 The capitalization of HIGC was increased to P2,500,000,000 Rep. Act No. 7835.
23 No. 2 (a), Executive Order No. 535 dated May 3, 1979 (78 O.G. 6805).

Republic of the Philippines

SUPREME COURT
Manila
THIRD DIVISION
G.R. No. 116695 June 20, 1997
VICTORIA G. GACHON and ALEX GUEVARA, petitioners,
vs.
HON. NORBERTO C. DEVERA, JR., Presiding Judge, Branch XXIV, RTC, Iloilo City;
HON. JOSE R. ASTORGA, Presiding Judge, Branch I, Municipal Trial Court in Cities,
Iloilo City; and SUSANA GUEVARA, represented by her attorney-in-fact, ROSALIE
GUEVARA, respondents.
PANGANIBAN, J.:
May the Rule on Summary Procedure be interpreted liberally to allow the admission of an
answer filed out of time due to alleged "oversight"?
This is the main legal question raised in this petition for review assailing the Decision of the
Regional Trial Court of Iloilo City, Branch 24, 1 which dismissed a special civil action for
certiorari and injunction filed by herein petitioners. The dispositive portion of the assailed RTC
Decision reads: 2
WHEREFORE premises considered, the prayer for the issuance of a writ of preliminary
injunction is denied and, with respect to the merits, the instant case is hereby ordered
dismissed.
Double costs against petitioners.
Facts
The factual antecedents of this case as found by the Regional Trial Court are undisputed and
admitted as correct by the parties. A complaint for forcible entry 3 was filed by Private
Respondent Susana Guevara against Patricio Guevara and Petitioners Victoria Gachon and
Alex Guevara before the Municipal Trial Court for Cities (MTCC) of Iloilo City. Summons was
served on and received by petitioners on August 25, 1993, directing them to file an answer
within the reglementary period of ten (10) days. Patricio Guevara was abroad at that time;
hence, the MTCC did not acquire jurisdiction over him. On September 4, 1993, petitioners
filed with the MTCC an urgent motion for extension of time to file an answer. 4 On September

7, 1993, the MTCC denied the motion on the ground that it was a prohibited pleading under
the Rule on Summary Procedure. 5 On September 8, 1993, or more than ten days from their
receipt of the summons, petitioner submitted an urgent motion praying for the admission of
their answer, 6 which was attached thereto. Two days later, petitioners filed another motion
pleading for the admission of an amended answer. On September 23, 1993, the MTCC denied
the motions and considered the case submitted for resolution. 7 On October 27, 1993, the
MTCC also denied the petitioners' motion for reconsideration. 8 Thereafter, on November 26,
1993, the MTCC 9 issued a decision 10 resolving the complaint for forcible entry in favor of
herein private respondents.
Instead of filing an appeal, petitioners filed a petition for certiorari and injunction before the
Regional Trial Court (RTC) of Iloilo City, 11 Branch 24, praying mainly that the MTCC be
ordered to admit the amended answer and to conduct further proceedings in the civil case for
forcible entry. As prayed for, a temporary restraining order was issued by the RTC.
Thereafter, the RTC issued the assailed Decision 12 dismissing the petition. Respondent Judge
Norberto E. Devera, Jr. ratiocinated: 13
Section 36 of Batas Pambansa Blg. 129, otherwise known as The Judiciary Reorganization
Act of 1980 provides, among others, as follows:
Sec. 36 Summary Procedures in Special Cases . . . The Supreme Court shall adopt special
rules or procedures applicable to such cases in order to achieve an expeditions (sic) and
inexpensive determination thereof without regard to technical rules. Such simplified
procedures may provide that affidavits and counter-affidavits may be admitted in lieu of oral
testimony and that the periods for filing pleadings shall be non-extendible.
Pursuant to the aforequoted legislative mandate, the Supreme Court promulgated the Rule on
Summary Procedure, the pertinent provisions of which, as related to the issues raised in this
case, are hereunder set forth
II Civil Cases
Sec. 3. Pleadings
A. (P)leadings allowed The only pleadings allowed to be filed are the complaints,
compulsory counter-claims and cross-claims pleaded in the answer, and the answers thereto
xxx xxx xxx
Sec. 5. Answer Within ten (10) days from service of summons, the defendant shall file his
answer to the complaint and serve a copy thereof on the plaintiff . . .
Sec. 6. Effect of Failure to answer Should the defendant fail to answer the complaint within
the period above provided, the Court, motu proprio, or on motion of the plaintiff, shall render
judgment as may be warranted by the facts alleged in the complaint and limited to what is
prayed for therein: . . .
xxx xxx xxx
Sec. 19. Prohibited Pleadings and Motions The following pleadings, motions, or petitions
shall not be allowed in the cases covered by this Rule:
(a) Motion for extension of time to file pleadings, affidavits or any other paper.
xxx xxx xxx
The foregoing should underscore quite clearly the reality that the ten-day-period to file an
answer reckoned from the date of the receipt of the summons is mandatory and no reason of
any kind is acceptable to operate as an excuse. The rule is explicit. It is addressed more,
being one of procedure, to counsels than to litigants. Counsels, therefore cannot assert the
validity of their client's cause to evade the mandate of the law.

Accordingly, the Court cannot fault the respondent judge [referring to Judge Jose R. Astorga]
in acting the way he did in Civil Case No. 130 (93) taking into account the admitted facts and
circumstances.
Hence, this petition directly filed before this Court.
The Issues
Petitioners submit for resolution the following questions of law: 14
I. Are the provisions of the Rules on Summary Procedure on the period of pleadings to be
applied STRICTLY or LIBERALLY.
II. What is the legal effect of a belated answer under the Rules on Summary Procedure.
Petitioners argue that the "technical rules of procedure must yield to the higher interest of
justice." Petitioners explain that they filed the motion for extension of time to file an answer, a
prohibited pleading under the Rule on Summary Procedure, because of "oversight. That was
why immediately upon receipt of the denial of that motion, petitioners filed their motion to
admit answer which was later verified and had to be amended. All these (actions) were done
in a period of five (5) days from the lapse of the reglementary period to file an answer." 15
Furthermore, petitioners contend that "no prejudice to private respondent has been claimed or
alleged by reason of the delay" in filing an answer. 16 Petitioners also argue that their defense
in the action for forcible entry is based on substantial grounds, because they "were in prior
physical possession of the premises subject of the action and that their houses have long
been standing on the land in question because the land on which said houses are standing
are (sic) the common properties of the parties."
Citing Section 2, Rule 1 17 of the Rules of Court, petitioners pray that the provisions in the Rule
on Summary Procedure regarding prohibited pleadings and the period for filing an answer be
given liberal interpretation. Petitioners concede that said provisions appear to be couched in
mandatory language. They contend, however, that other similarly worded provisions in the
Rules of Court have nonetheless been liberally applied by this Court to promote substantial
justice. 18
Private respondent, on the other hand, submits that the provisions in question have to be
strictly construed in order to avoid delay, considering that the Rule on Summary Procedure is
aimed at inexpensive, expeditious and summary determination of cases. 19 Private respondent
adds that the petition can also be dismissed on the ground of violation of Revised Circular 2891 on forum shopping, because three (3) months after the rendition of the assailed Decision, a
"petition for quieting of title and partition, and damages, involving the same parcel of
residential land (Cadastral Lot No. 709 . . . ), was filed . . . docketed as Civil Case No. 21618,
by (Petitioner) Victoria Guevara-Gachon
(. . .), Patricio Guevara (father of Petitioner Alex Guevara), Lilia Guevara-Doreza and Fe
Guevara-Burgos against herein private respondent." Private respondent contends that the
subsequent case is the appropriate forum where ownership of the property in question may be
threshed out. 20
As observed at the outset, the issue to be resolved is whether, under the undisputed facts of
this case, the Rule on Summary Procedure may be liberally construed in order to allow the
admission of petitioners' answer which unquestionably was filed beyond the reglementary
period.
Preliminary Matter
It bears noting that petitioners filed directly before this Court a petition for review assailing the
RTC Decision. This remedy is allowed under paragraph 2 of Circular 2-90 21 which provides:

Sec. 2. Appeals from Regional Trial Courts to the Supreme Court. Except in criminal cases
where the penalty imposed is life imprisonment or reclusion perpetua, judgments of regional
trial courts may be appealed to the Supreme Court only by petition for review on certiorari in
accordance with Rule 45 of the Rules of Court in relation to Section 17 of the Judiciary Act of
1948, as amended, 22 this being the clear intendment of the provision of the Interim Rules that
"(a)ppeals to the Supreme Court shall be taken by petition for certiorari which shall be
governed by Rule 45 of the Rules of Court.
Petitioners ask the Court to interpret a provision of the Rule on Summary Procedure. This is a
pure question of law that may be properly raised in this petition for review.
The Court's Ruling
The petition has no merit.
First Issue: Interpretation of the Period
The pertinent provisions of the Rule on Summary Procedure are as follows:
Sec. 5. Answer. Within ten (10) days from service of summons, the defendant shall file his
answer to the complaint and serve a copy thereof on the plaintiff . . .
Sec. 6. Effect of failure to answer. Should the defendant fail to answer the complaint within
the period above provided, the Court, motu proprio, or on motion of the plaintiff, shall render
judgment as may be warranted by the facts alleged in the complaint and limited to what is
prayed for therein: . . .
xxx xxx xxx
Sec. 19. Prohibited pleadings and motions. The following pleadings, motions, or petitions
shall not be allowed in the cases covered by this Rule:
(a) Motion for extension of time to file pleadings, affidavits or any other paper.
xxx xxx xxx
(Emphasis supplied.)
The word "shall" ordinarily connotes an imperative and indicates the mandatory character of a
statute. 23 This, however, is not an absolute rule in statutory construction. The import of the
word ultimately depends upon a consideration of the entire provision, its nature, object and the
consequences that would follow from construing it one way or the other. 24
As a general principle, rules prescribing the time within which certain acts must be done, or
certain proceedings taken, are considered absolutely indispensable to the prevention of
needless delays and to the orderly and speedy discharge of judicial business. By their very
nature, these rules are regarded as mandatory. 25
The Rule on Summary Procedure, in particular, was promulgated for
the purpose of achieving "an expeditious and inexpensive determination of cases." 26 For this
reason, the Rule frowns upon delays and prohibits altogether the filing of motions for
extension of time. Consistent with this reasoning is Section 6 of the Rule which allows the trial
court to render judgment, even motu proprio, upon the failure of a defendant to file an answer
within the reglementary period.
Indeed, the Judiciary Reorganization Act of 1980, mandating the promulgation of the Rule on
Summary Procedure, authorizes the Court to stipulate that the period for filing pleadings in
cases covered by the Rule on Summary Procedure shall be "non-extendible." 27
Furthermore, speedy resolution of unlawful detainer cases is a matter of public policy, 28 and
this rule should equally apply with full force in forcible entry cases where the possession of the
premises at the start is already illegal.

From the foregoing, it is clear that the use of the word "shall" in the Rule on Summary
Procedure underscores the mandatory character of the challenged provisions. Giving the
provisions a directory application would subvert the nature of the Rule on Summary Procedure
and defeat its objective of expediting the adjudication of suits. Indeed, to admit a late answer,
as petitioners suggest, is to put premium on dilatory maneuvers the very mischief that the
Rule seeks to redress. In this light, petitioners' invocation of the general principle in Rule 1,
Section 2 of the Rules of Court is misplaced.
Other than a plea for the liberal interpretation of the Rule on Summary Procedure, petitioners
do not provide an adequate justification for the admission of their late answer. "Oversight,"
which they candidly cite as the reason for their filing a motion for extension of time to file an
answer, is not a justification. Oversight, at best, implies negligence; at worst, ignorance. The
negligence displayed by petitioners is clearly inexcusable; ignorance of so basic a rule, on the
other hand, can never be condoned. In either case, the directory application of the questioned
provision is not warranted.
Petitioners also cite Rosales vs. Court of Appeals 29 and Co Keng Kian vs. Intermediate
Appellate Court, 30 but these cases do not support their position.
In Rosales vs. Court of Appeals, 31 this Court applied the Rule on Summary Procedure liberally
when the defendant, instead of filing an answer, filed within the reglementary period a
pleading labeled as a motion to dismiss. In treating the motion to dismiss as an answer, the
Court ruled: 32
Parenthetically, petitioner argues in the present petition that, notwithstanding its being labeled
as a motion to dismiss, said pleading should have been considered as his answer pursuant to
the liberal interpretation accorded the rules and inasmuch as the grounds involved therein
also qualify as defenses proper in an answer. In this instance the Court agrees. Indeed, the
rule on summary procedure was conceptualized to facilitate the immediate resolution of cases
such as the present one. Well-settled is the rule that forcible entry and detainer cases being
summary in nature and involving disturbance of social order, procedural technicalities should
be carefully avoided and should not be allowed to override substantial justice. With this
premise in mind and having insisted, however erroneously, on its jurisdiction over the case, it
certainly would have been more prudent for the lower court to have treated the motion to
dismiss as the answer of petitioner and examined the case on its merits. As will be shown
shortly, the long drawn out proceedings that took place would have been avoided.
Furthermore, the said case did not involve the question of extension in the period for filing
pleadings under the Rule on Summary Procedure.
In Co Keng Kian vs. Intermediate Appellate Court, 33 this Court allowed the notice to vacate,
served upon the tenant, by registered mail instead of personal service as required by the
Rules of Court. We thus ruled: 34
At this juncture it bears repeating that actions for forcible entry and unlawful detainer are
summary in nature because they involve a disturbance a social order which must be abated
as promptly as possible without any undue reliance on technical and procedural rules which
only cause delays. In the ultimate analysis, it matters not how the notice to vacate was
conveyed, so long as the lessee or his agent has personally received the written demand,
whether handed to him by the lessor, his attorney, a messenger or even a postman. The
undisputed facts in the instant case show that the Manila Times Publishing Company, through
its manager, had informed petitioner that Plaza Arcade Inc. was the new owner of the subject
building; that on October 18, 1979, a demand letter was sent to petitioner advising him to

leave the premises but petitioner refused to receive the letter; that a second demand on
January 12, 1981 elicited the same reaction; that a final demand dated November 16, 1981
was sent to petitioner by registered mail which he again refused. And even on the supposition
that there was no personal service as claimed by petitioner, this could only be due to
petitioner's blatant attempts at evasion which compelled the new landlord to resort to
registered mail. The Court cannot countenance an unfair situation where the plaintiff in an
eviction case suffers further injustice by the unwarranted delay resulting from the obstinate
refusal of the defendant to acknowledge the existence of a valid demand.
In both cases, there was substantial compliance with the law, something that cannot be said of
herein petitioners.
Second Issue: Forum-Shopping
Private respondent assails petitioners for engaging in forum-shopping by pursuing the present
ejectment suit, notwithstanding the pendency of an action for quieting of title involving the
same property and parties. We are unable to find basis for this charge.
For forum-shopping to exist, both actions must involve the same transactions, essential facts
and circumstances; and the actions must raise identical causes of action, subject matter, and
issues. 35 Suffice it to say that an action for quieting of title and partition has a different cause
of action than that in an ejectment suit. As private respondent herself contended, ownership of
a certain portion of the property which is determined in a case of partition does not necessarily
mean that the successful litigant has the right to possess the property adjudged in his favor. In
ejectment cases, the only issue for resolution is physical or material possession of the
property involved, independent of any claim of ownership set forth by any of the party litigants.
Anyone of them who can prove prior possession de facto may recover such possession even
from the owner himself. This rule holds true regardless of the character of a party's
possession, provided that he has in his favor priority of time which entitles him to stay on the
property until he is lawfully ejected by a person having a better right by either accion
publiciana or accion reivindicatoria. 36 It has even been ruled that the institution of a separate
action for quieting of title is not a valid reason for defeating the execution of the summary
remedy of ejectment. 37
WHEREFORE, in view of the foregoing, the petition is DENIED and the assailed Decision is
AFFIRMED in toto. Double costs against petitioners.
SO ORDERED.
Narvasa, C.J., Davide, Jr. and Melo, JJ., concur.
Francisco, J., is on leave.
Footnotes
1 Presided by Respondent Judge Norberto E. Devera, Jr.
2 Rollo, p. 36.
3 Ibid., pp. 68-73; docketed as Civil Case 130-93.
4 Ibid., pp. 77-78.
5 Ibid., pp. 88.
6 Ibid., pp. 79-80.
7 Ibid., pp. 91-92.
8 Ibid., pp. 100-102.
9 Presided by Jose P. Astorga.
10 Rollo, pp. 103-108.
11 Ibid., pp. 48-67.

12 Ibid., pp. 34-36.

13 Ibid.
14 Ibid., p. 15.
15 Ibid., p. 18.
16 Ibid., p. 19.
17 Section 2. Construction. These rules shall be liberally construed in order to promote
their object and to assist the parties in obtaining just, speedy and inexpensive determination of
every action and proceeding.
18 Rollo, pp. 20 and 26.
19 Ibid., pp. 123-124.
20 Ibid., pp. 125-126.
21 Approved March 9, 1990.
22 Limiting the issues thus appealable to errors or questions of law, or questions involving the
constitutionality or validity of any treaty, executive agreement, law or ordinance, or executive
order or regulation; or the legality of any tax, impost, assessment or toll or penalty imposed in
relation thereto; or the jurisdiction of an inferior court. (Footnote found in the original.)
23 Bersabal vs. Salvador, 84 SCRA 176, 179-180, July 21, 1978, citing Dizon vs.
Encarnacion, 9 SCRA 714, 716-717, December 24, 1963.
24 De Mesa vs. Mencias, 18 SCRA 533, October 29, 1966.
25 Cf . Valdez vs. Ocumen, et al., 106 Phil. 929, 933, January 29, 1960; Alvero vs. De la
Rosa, 76 Phil. 428, 434, March 29, 1946. See also Agpalo, Statutory Construction, p. 243.
26 Section 36, B.P. 129; Rule on Summary Procedure.
27 Section 36, B.P. 129.
28 Bank of the Philippine Islands vs. Generoso, 249 SCRA 477, 480, October 25, 1995.
29 200 SCRA 300, August 5, 1991.
30 189 SCRA 112, August 29, 1990.
31 Supra.
32 Ibid., p. 306.
33 Supra.
34 Ibid., p. 116.
35 International Container Terminal Services, Inc. vs. Court of Appeals, 249 SCRA 389-395,
October 18, 1995.
36 Somodio vs. Court of Appeals, 235 SCRA 307, 311-312, August 15, 1994.
37 Oblea vs. Court of Appeals, 244 SCRA 101, 105, May 11, 1995.

Republic of the Philippines

SUPREME COURT
Manila
EN BANC
G.R. No. 72335-39 March 21, 1988
FRANCISCO S. TATAD, petitioner,
vs.
THE SANDIGANBAYAN, and THE TANODBAYAN, respondents.
YAP, J.:
In this petition for certiorari and prohibition, with preliminary injunction, dated October 16,
1985, petitioner seeks to annul and set aside the resolution of the Tanodbayan of April 7,
1985, and the resolutions of the Sandiganbayan, dated August 9, 1985, August 12,1985 and
September 17, 1985, and to enjoin the Tanodbayan and the Sandiganbayan from continuing
with the trial or any other proceedings in Criminal Cases Nos. 10499, 10500, 10501, 10502
and 10503, an entitled "People of the Philippines versus Francisco S. Tatad."
The petition alleges, among other things, that sometime in October 1974, Antonio de los
Reyes, former Head Executive Assistant of the then Department of Public Information (DPI)
and Assistant Officer-in-Charge of the Bureau of Broadcasts, filed a formal report with the
Legal Panel, Presidential Security Command (PSC), charging petitioner, who was then
Secretary and Head of the Department of Public Information, with alleged violations of
Republic Act No. 3019, otherwise known as the Anti-Graft and Corrupt Practices Act.
Apparently, no action was taken on said report.
Then, in October 1979, or five years later, it became publicly known that petitioner had
submitted his resignation as Minister of Public Information, and two months after, or on
December 12, 1979, Antonio de los Reyes filed a complaint with the Tanodbayan (TBP Case
No. 8005-16-07) against the petitioner, accusing him of graft and corrupt practices in the

conduct of his office as then Secretary of Public Information. The complaint repeated the
charges embodied in the previous report filed by complainant before the Legal Panel,
Presidential Security Command (PSC).
On January 26, 1980, the resignation of petitioner was accepted by President Ferdinand E.
Marcos. On April 1, 1980, the Tanodbayan referred the complaint of Antonio de los Reyes to
the Criminal Investigation Service (CIS) for fact-finding investigation. On June 16, 1980,
Roberto P. Dizon, CIS Investigator of the Investigation and Legal Panel, PSC, submitted his
Investigation Report, with the following conclusion, ". . . evidence gathered indicates that
former Min. TATAD have violated Sec. 3 (e) and Sec. 7 of RA 3019, respectively. On the other
hand, Mr. ANTONIO L. CANTERO is also liable under Sec. 5 of RA 3019," and recommended
appropriate legal action on the matter.
Petitioner moved to dismiss the complaint against him, claiming immunity from prosecution by
virtue of PD 1791, but the motion was denied on July 26, 1982 and his motion for
reconsideration was also denied on October 5, 1982. On October 25, 1982, all affidavits and
counter-affidavits were with the Tanodbayan for final disposition. On July 5, 1985, the
Tanodbayan approved a resolution, dated April 1, 1985, prepared by Special Prosecutor
Marina Buzon, recommending that the following informations be filed against petitioner before
the Sandiganbayan, to wit:
l. Violation of Section 3, paragraph (e) of RA. 3019 for giving D' Group, a private corporation
controlled by his brother-in-law, unwarranted benefits, advantage or preference in the
discharge of his official functions through manifest partiality and evident bad faith;
2. Violation of Section 3, paragraph (b) of RA. 3019 for receiving a check of P125,000.00 from
Roberto Vallar, President/General Manager of Amity Trading Corporation as consideration for
the release of a check of P588,000.00 to said corporation for printing services rendered for the
Constitutional Convention Referendum in 1973;
3. Violation of Section 7 of RA. 3019 on three (3) counts for his failure to file his Statement of
Assets and Liabilities for the calendar years 1973, 1976 and 1978.
Accordingly, on June 12, 1985, the following informations were flied with the Sandiganbayan
against the petitioner:
Re: Criminal Case No. 10499
The undersigned Tanodbayan Special Prosecutor accuses Francisco S. Tatad with Violation of
Section 3, paragraph (b) of Republic Act No. 3019, otherwise known as the Anti-Graft and
Corrupt Practices Act, committed as follows:
That on or about the 16th day of July, 1973 in the City of Manila, Philippines, and within the
jurisdiction of this Honorable Court, the above- named accused, being then the Secretary of
the Department (now Ministry) of Public Information, did then and there, wilfully and unlawfully
demand and receive a check for Pl25,000.00 from Roberto Vallar, President/General Manager
of Amity Trading Corporation as consideration for the payment to said Corporation of the sum
of P588,000.00, for printing services rendered for the Constitutional Convention Referendum
of January, 1973, wherein the accused in his official capacity had to intervene under the law in
the release of the funds for said project.
That the complaint against the above-named accused was filed with the Office of the
Tanodbayan on May 16, 1980.
CONTRARY TO LAW.
Re: Criminal Case No. 10500

The undersigned Tanodbayan Special Prosecutor accuses FRANCISCO S. TATAD with

Violation of Section 7 of Republic Act No. 3019, otherwise known as the Anti-Graft and Corrupt
Practice Act, committed as follows:
That on or about the 31st day of January, 1974 in the City of Manila, Philippines, and within
the jurisdiction of this Honorable Court, the above- named accused, a public officer being then
the Secretary of the Department (now Ministry) of Public Information, did then and there
wilfully and unlawfully fail to prepare and file with the Office of the President, a true detailed
and sworn statement of his assets and liabilities, as of December 31, 1973, including a
statement of the amounts and sources of his income, the amounts of his personal and family
expenses and the amount of income taxes paid for the next preceding calendar year (1973),
as required of every public officer.
That the complaint against the above-named accused was flied with the Office of the
Tanodbayan on June 20, 1980.
CONTRARY TO LAW.
Re: Criminal Case No. 10501
The undersigned Tanodbayan Special Prosecutor accuses FRANCISCO S. TATAD with
Violation of Section 3, paragraph (e) of Republic Act No. 3019, otherwise known as the AntiGraft and Corrupt Practices Act, committed as follows:
That on or about the month of May, 1975 and for sometime prior thereto, in the City of Manila,
Philippines, and within the jurisdiction of this Honorable Court, the above-named accused, a
public officer being then the Secretary of the Department (now Ministry) of Public Information,
did then and there, wilfully and unlawfully give Marketing Communication Group, Inc. (D'
Group), a private corporation of which his brother-in-law, Antonio L. Cantero, is the President,
unwarranted benefits, advantage or preference in the discharge of his official functions,
through manifest partiality and evident bad faith, by allowing the transfer of D' GROUP of the
funds, assets and ownership of South East Asia Research Corporation (SEARCH), allegedly a
private corporation registered with the Securities and Exchange Corporation on June 4, 1973,
but whose organization and operating expenses came from the confidential funds of the
Department of Public Information as it was organized to undertake research, projects for the
government, without requiring an accounting of the funds advanced by the Department of
Public Information and reimbursement thereof by D' GROUP, to the damage and prejudice of
the government.
That the complaint against the above-named accused was filed with the Office of the
Tanodbayan on May 16, 1980.
CONTRARY TO LAW.
Re: Criminal Case No. 10502
The undersigned Tanodbayan Special Prosecutor accuses FRANCISCO S. TATAD with
Violation of Section 7 of Republic Act No. 3019, otherwise known as the Anti-Graft and Corrupt
Practices Act, committed as follows:
That on or about the 31st day of January, 1977 in the City of Manila, Philippines, and within
the jurisdiction of this Honorable Court, the above-named accused, a public officer being then
the Secretary of the Department (now Ministry) of Public Information, did then and there
wilfully and unlawfully fail to prepare and file with the Office of the President, a true and sworn
statement of his assets and liabilities, as of December 31, 1976, including a statement of the
amounts of his personal and family expenses and the amount of income taxes paid for the
next preceding calendar year (1976), as required of every public officer.

That the complaint against the above-named accused was filed with the Office of the
Tanodbayan on June 20, 1988.
CONTRARY TO LAW.
Re: Criminal Case No. 10503
The undersigned Tanodbayan Special Prosecutor accuses FRANCISCO S. TATAD with
Violation of Section 7 of Republic Act No. 3019, otherwise known as the Anti-Graft and Corrupt
Practices Act, committed as follows:
That on or about the 15th day of April, 1979, in the City of Manila Philippines, and within the
jurisdiction of this Honorable Court, the above-named accused, a public officer being then the
Secretary of the Department (now Ministry) of Public Information, did then and there wilfully
and unlawfully fail to prepare and file with the Office of the President, a true, detailed and
sworn statement of his assets and liabilities, as of December 31, 1978, including a statement
of the amounts and sources of his income, the amounts of his personal and family expenses
and the amount of income taxes paid for the next preceding calendar year (1978), as required
of every public officer.
That the complaint against the above-named accused was filed with the Office of the
Tanodbayan on June 20, 1980.
CONTRARY TO LAW.
On July 22, 1985, petitioner filed with the Sandiganbayan a consolidated motion to quash the
informations on the follow grounds:
1 The prosecution deprived accused-movant of due process of law and of the right to a
speedy disposition of the cases filed against him, amounting to loss of jurisdiction to file the
informations;
2. Prescription of the offenses charged in Crim. Case Nos. 10499, 10500 and 10501;
3. The facts charged in Criminal Case No. 10500 (for failure to file Statement of Assets and
Liabilities for the year 1973) do not constitute an offense;
4. No prima facie case against the accused-movant exists in Criminal Cases Nos. 10500,
10502 and 10503;
5. No prima facie case against the accused-movant exists in Criminal Case No. 10199 for
Violation of Sec. 3, par. (b) of R.A. 3019, as amended;
6. No prima facie case against the accused-movant exists in Criminal Case No. 10501 (for
Violation of Sec. 3 (e) of R.A. 3019, as amended.
On July 26, 1985, the Tanodbayan filed its opposition to petitioner's consolidated motion to
quash, stating therein in particular that there were only two grounds in said motion that
needed refutation, namely:
1. The offense charged in Criminal Cases Nos. 10499,10500 and 10501, have already
prescribed and criminal liability is extinguished; and
2. The facts charged in the information (Criminal Case No. 10500 For failure to file
Statement of Assets and Liabilities for the year 1973) do not constitute an offense.
On the issue of prescription, Tanodbayan citing the case of Francisco vs. Court of Appeals,
122 SCRA 538, contended that the filing of the complaint or denuncia in the fiscal's office
interrupts the period of prescription. Since the above-numbered cases were filed with the
Office of the Tanodbayan in 1980 and the alleged offenses were committed on July 16, 1973,
January 31, 1974 and in May 1975, respectively, although the charges were actually filed in
Court only on July 9, 1985, the Tanodbayan has still the right to prosecute the same, it
appearing that the ten (10) year prescriptive period has not yet lapsed. Moreover, Tanodbayan

pointed out that a law such as Batas Pambansa Blg. 195, extending the period of limitation
with respect to criminal prosecution, unless the right to acquittal has been acquired, is
constitutional.
Tanodbayan likewise said that the requirement for the filing of the Statement of Assets and
Liabilities in P.D. 379 is separate and distinct from that required pursuant to the provisions of
the Anti-Graft Law, as amended. For while the former requires "any natural or juridical person
having gross assets of P50,000.00 or more..." to submit a statement of assets and liabilities
"... regardless of the networth," the mandate in the latter law is for ALL government employees
and officials to submit a statement of assets and liabilities. Hence, the prosecution under
these two laws are separate and distinct from each other. Tanodbayan also explained that
delay in the conduct of preliminary investigation does not impair the validity of the informations
filed and that neither will it render said informations defective. Finally, Tanodbayan added that
P.D. 911, the law which governs preliminary investigations is merely directory insofar as it fixes
a period of ten (10) days from its termination to resolve the preliminary investigation.
On August 9, 1985, the Sandiganbayan rendered its challenged resolution denying petitioner's
motion to quash, the dispositive portion of which reads:
WHEREFORE, prescinding therefrom, We find, and so hold, that the accused's "Consolidated
Motion to Quash" should be as it is hereby, denied for lack of merit. Conformably to Rule 117,
Section 4 of the 1985 Rules on Criminal Procedure, the defect in the information in Criminal
Case No. 10500 being one which could be cured by amendment, the Tanodbayan is hereby
directed to amend said information to change the date of the alleged commission of the
offense therein charged from January 31, 1974 to September 30, 1974 within five (5) days
from receipt hereof.
SO ORDERED.
On August 10, 1985, in compliance with the Sandiganbayan's resolution of August 8, 1985,
the Tanodbayan filed an amended information in Criminal Case No. 10500, changing the date
of the commission of the offense to September 30, 1974.
On August 30, 1985, petitioners filed a consolidated motion for reconsideration which was
denied by the Sandiganbayan September 17, 1985. Hence, petitioner filed this petition on
October 16, 1985 assailing the denial of his motion to quash. On October 22, 1985, the Court,
without giving due course the petition, resolved to require the respondents to comment
thereon and issued a temporary restraining order effective immediately and continuing until
further orders of the Court, enjoining the respondents Sandiganbayan and Tanodbayan from
continuing with the trial and other proceedings in Criminal Cases Nos. 10499, 10500, 10501,
10502 and 10503. In compliance with said resolution, the respondents, through ,Solicitor
General Estelito P. Mendoza, filed their comment on January 6, 1986.
On April 10, 1986, the Court required the parties to move in the premises considering the
supervening events, including the change of administration that had transpired, and the
provisions of Sec. 18, Rule 3 of the Rules of Court, insofar far as the Public respondents were
concerned, which requires the successor official to state whether or not he maintains the
action or position taken by his predecessor in office. On June 20, 1986, the new Tanodbayan
manifested that since "the charges are not political offenses and they have no political bearing
whatsoever," he had no alternative but to pursue the cases against the petitioner, should the
Court resolve to deny the petition; that in any event, petitioner is not precluded from pursuing
any other legal remedies under the law, such as the filing of a motion for re-evaluation of his

cases with the Tanodbayan. The new Solicitor General filed a manifestation dated June 27,
1986 in which he concurred with the position taken by the new Tanodbayan.
Pursuant to the above manifestation of the new Tanodbayan, the petitioner filed a motion for
re-evaluation with the Office of the Tanodbayan, dated July 21, 1986, praying that the cases in
question be re-evaluated and the informations be quashed. The Court is not aware of what
action, if any, has been taken thereon by the Tanodbayan. However, be that as it may, the
filing of the aforesaid motion for re-evaluation with the Tanodbayan has no material bearing
insofar as the duty of this Court to resolve the issues raised in the instant petition is
concerned.
Petitioner has raised the following issues in his petition:
1. Whether the prosecution's long delay in the filing of these cases with the Sandiganbayan
had deprived petitioner of his constitutional light to due process and the right to a speedy
disposition of the cases against him.
2. Whether the crimes charged has already prescribed.
3. Whether there is a discriminatory prosecution of the petitioner by the Tanodbayan.
4. Whether Sandiganbayan should have ruled on the question of amnesty raised by the
petitioner.
5. Whether petitioner's contention of the supposed lack or non- existence of prima facie
evidence to sustain the filing of the cases at bar justifies the quashal of the questioned
informations.
Petitioner claims that the Tanodbayan culpably violated the constitutional mandate of "due
process" and "speedy disposition of cases" in unduly prolonging the termination of the
preliminary investigation and in filing the corresponding informations only after more than a
decade from the alleged commission of the purported offenses, which amounted to loss of
jurisdiction and authority to file the informations. The respondent Sandiganbayan dismissed
petitioner's contention, saying that the applicability of the authorities cited by him to the case
at bar was "nebulous;" that it would be premature for the court to grant the "radical relief"
prayed for by petitioner at this stage of the proceeding; that the mere allegations of "undue
delay" do not suffice to justify acceptance thereof without any showing "as to the supposed
lack or omission of any alleged procedural right granted or allowed to the respondent accused
by law or administrative fiat" or in the absence of "indubitable proof of any irregularity or
abuse" committed by the Tanodbayan in the conduct of the preliminary investigation; that such
facts and circumstances as would establish petitioner's claim of denial of due process and
other constitutionally guaranteed rights could be presented and more fully threshed out at the
trial. Said the Sandiganbayan:
That there was a hiatus in the proceedings between the alleged termination of the
proceedings before the investigating fiscal on October 25, 1982 and its resolution on April 17,
1985 could have been due to certain factors which do not appear on record and which both
parties did not bother to explain or elaborate upon in detail. It could even be logically inferred
that the delay may be due to a painstaking an gruelling scrutiny by the Tanodbayan as to
whether the evidence presented during the preliminary investigation merited prosecution of a
former high-ranking government official. In this respect, We are the considered opinion that
the provision of Pres. Decree No. 911, as amended, regarding the resolution of a complaint by
the Tanodbayan within ten (10) days from termination of the preliminary investigation is merely
"directory" in nature, in view of the nature and extent of the proceedings in said office.

The statutory grounds for the quashal of an information are clearly set forth in concise
language in Rule 117, Section 2, of the 1985 Rules on Criminal Procedure and no other
grounds for quashal may be entertained by the Court prior to arraignment inasmuch as it
would be itself remiss in the performance of its official functions and subject to the charge that
it has gravely abused its discretion. Such facts and circumstances which could otherwise
justify the dismissal of the case, such as failure on the part of the prosecution to comply with
due process or any other constitutionally-guaranteed rights may presented during the trial
wherein evidence for and against the issue involved may be fully threshed out and
considered. Regrettably, the accused herein attempts to have the Court grant such a radical
relief during this stage of the proceedings which precludes a pre-cocious or summary
evaluation of insufficient evidence in support thereof.
This brings us to the crux of the issue at hand. Was petitioner deprived of his constitutional
right to due process and the right to "speedy disposition" of the cases against him as
guaranteed by the Constitution? May the court, ostrich like, bury its head in the sand, as it
were, at the initial stage of the proceedings and wait to resolve the issue only after the trial?
In a number of cases, 1 this Court has not hesitated to grant the so-called "radical relief" and to
spare the accused from undergoing the rigors and expense of a full-blown trial where it is
clear that he has been deprived of due process of law or other constitutionally guaranteed
rights. Of course, it goes without saying that in the application of the doctrine enunciated in
those cases, particular regard must be taken of the facts and circumstances peculiar to each
case.
Coming to the case at bar, the following relevant facts appear on record and are largely
undisputed. The complainant, Antonio de los Reyes, originally filed what he termed "a report"
with the Legal Panel of the Presidential Security Command (PSC) on October 1974,
containing charges of alleged violations of Rep. Act No. 3019 against then Secretary of Public
Information Francisco S. Tatad. The "report" was made to "sleep" in the office of the PSC until
the end of 1979 when it became widely known that Secretary (then Minister) Tatad had a
falling out with President Marcos and had resigned from the Cabinet. On December 12, 1979,
the 1974 complaint was resurrected in the form of a formal complaint filed with the
Tanodbayan and docketed as TBP Case No. 8005-16-07. The Tanodbayan acted on the
complaint on April 1, 1980-which was around two months after petitioner Tatad's resignation
was accepted by Pres. Marcos by referring the complaint to the CIS, Presidential Security
Command, for investigation and report. On June 16, 1980, the CIS report was submitted to
the Tanodbayan, recommending the filing of charges for graft and corrupt practices against
former Minister Tatad and Antonio L. Cantero. By October 25, 1982, all affidavits and counteraffidavits were in the case was already for disposition by the Tanodbayan. However, it was
only on July 5, 1985 that a resolution was approved by the Tanodbayan, recommending the
ring of the corresponding criminal informations against the accused Francisco Tatad. Five (5)
criminal informations were filed with the Sandiganbayan on June 12, 1985, all against
petitioner Tatad alone.
A painstaking review of the facts can not but leave the impression that political motivations
played a vital role in activating and propelling the prosecutorial process in this case. Firstly, the
complaint came to life, as it were, only after petitioner Tatad had a falling out with President
Marcos. Secondly, departing from established procedures prescribed by law for preliminary
investigation, which require the submission of affidavits and counter-affidavits by the

complainant and the respondent and their witnesses, the Tanodbayan referred the complaint
to the Presidential Security Command for finding investigation and report.
We find such blatant departure from the established procedure as a dubious, but revealing
attempt to involve an office directly under the President in the prosecutorial process, lending
credence to the suspicion that the prosecution was politically motivated. We cannot
emphasize too strongly that prosecutors should not allow, and should avoid, giving the
impression that their noble office is being used or prostituted, wittingly or unwittingly, for
political ends or other purposes alien to, or subversive of, the basic and fundamental objective
of serving the interest of justice even handedly, without fear or favor to any and all litigants
alike, whether rich or poor, weak or strong, powerless or mighty. Only by strict adherence to
the established procedure may the public's perception of the of the prosecutor be enhanced.
Moreover, the long delay in resolving the case under preliminary investigation can not be
justified on the basis of the facts on record. The law (P.D. No. 911) prescribes a ten-day period
for the prosecutor to resolve a case under preliminary investigation by him from its
termination. While we agree with the respondent court that this period fixed by law is merely
"directory," yet, on the other hand, it can not be disregarded or ignored completely, with
absolute impunity. It certainly can not be assumed that the law has included a provision that is
deliberately intended to become meaningless and to be treated as a dead letter.
We find the long delay in the termination of the preliminary investigation by the Tanodbayan in
the instant case to be violative of the constitutional right of the accused to due process.
Substantial adherence to the requirements of the law governing the conduct of preliminary
investigation, including substantial compliance with the time limitation prescribed by the law
for the resolution of the case by the prosecutor, is part of the procedural due process
constitutionally guaranteed by the fundamental law. Not only under the broad umbrella of the
due process clause, but under the constitutional guarantee of "speedy disposition" of cases as
embodied in Section 16 of the Bill of Rights (both in the 1973 and the 1987 Constitutions), the
inordinate delay is violative of the petitioner's constitutional rights. A delay of close to three (3)
years can not be deemed reasonable or justifiable in the light of the circumstance obtaining in
the case at bar. We are not impressed by the attempt of the Sandiganbayan to sanitize the
long delay by indulging in the speculative assumption that "the delay may be due to a
painstaking and gruelling scrutiny by the Tanodbayan as to whether the evidence presented
during the preliminary investigation merited prosecution of a former high ranking government
official." In the first place, such a statement suggests a double standard of treatment, which
must be emphatically rejected. Secondly, three out of the five charges against the petitioner
were for his alleged failure to file his sworn statement of assets and liabilities required by
Republic Act No. 3019, which certainly did not involve complicated legal and factual issues
necessitating such "painstaking and gruelling scrutiny" as would justify a delay of almost three
years in terminating the preliminary investigation. The other two charges relating to alleged
bribery and alleged giving of unwarranted benefits to a relative, while presenting more
substantial legal and factual issues, certainly do not warrant or justify the period of three
years, which it took the Tanodbayan to resolve the case.
It has been suggested that the long delay in terminating the preliminary investigation should
not be deemed fatal, for even the complete absence of a preliminary investigation does not
warrant dismissal of the information. True-but the absence of a preliminary investigation can
be corrected by giving the accused such investigation. But an undue delay in the conduct of a

preliminary investigation can not be corrected, for until now, man has not yet invented a
device for setting back time.
After a careful review of the facts and circumstances of this case, we are constrained to hold
that the inordinate delay in terminating the preliminary investigation and filing the information
in the instant case is violative of the constitutionally guaranteed right of the petitioner to due
process and to a speedy disposition of the cases against him. Accordingly, the informations in
Criminal Cases Nos. 10499, 10500, 10501, 10502 and 10503 should be dismissed. In view of
the foregoing, we find it unnecessary to rule on the other issues raised by petitioner.
Accordingly, the Court Resolved to give due course to the petition and to grant the same. The
informations in Criminal Cases Nos. 10499, 10500, 10501, 10502 and 10503, entitled "People
of the Philippines vs. Francisco S. Tatad" are hereby DISMISSED. The temporary restraining
order issued on October 22, 1985 is made permanent.
SO ORDERED.
Teehankee, C.J., Fernan, Narvasa, Melencio-Herrera, Gutierrez, Jr., Cruz, Paras, Feliciano,
Gancayco, Padilla, Bidin, Sarmiento, Cortes and Grio-Aquino, JJ., concur.
Footnotes
1 Salonga vs. Cruz Pano, et al., 134 SCRA 438; Mean vs. Argel, 115 SCRA 256; Yap vs.
Lutero, 105 Phil, 3007; People vs. Zulueta, 89 Phil. 880.

Republic of the Philippines

SUPREME COURT
Manila
EN BANC
G.R. No. 125955 June 19, 1997
WILMER GREGO, petitioner,
vs.
COMMISSION ON ELECTIONS and HUMBERTO BASCO, respondents.
ROMERO, J.:
The instant special civil action for certiorari and prohibition impugns the resolution of the
Commission on Elections (COMELEC) en banc in SPA No. 95-212 dated July 31, 1996,
dismissing petitioner's motion for reconsideration of an earlier resolution rendered by the
COMELEC's First Division on October 6, 1995, which also dismissed the petition for
disqualification 1 filed by petitioner Wilmer Grego against private respondent Humberto Basco.
The essential and undisputed factual antecedents of the case are as follows:
On October 31, 1981, Basco was removed from his position as Deputy Sheriff by no less than
this Court upon a finding of serious misconduct in an administrative complaint lodged by a
certain Nena Tordesillas. The Court held:

WHEREFORE, FINDING THE RESPONDENT DEPUTY SHERIFF HUMBERTO BASCO OF

THE CITY COURT OF MANILA GUILTY OF SERIOUS MISCONDUCT IN OFFICE FOR THE
SECOND TIME, HE IS HEREBY DISMISSED FROM THE SERVICE WITH FORFEITURE OF
ALL RETIREMENT BENEFITS AND WITH PREJUDICE TO REINSTATEMENT TO ANY
POSITION IN THE NATIONAL OR LOCAL GOVERNMENT, INCLUDING ITS AGENCIES AND
INSTRUMENTALITIES, OR GOVERNMENT-OWNED OR CONTROLLED CORPORATIONS.
xxx xxx xxx 2
Subsequently, Basco ran as a candidate for Councilor in the Second District of the City of
Manila during the January 18, 1988, local elections. He won and, accordingly, assumed office.
After his term, Basco sought re-election in the May 11, 1992 synchronized national elections.
Again, he succeeded in his bid and he was elected as one of the six (6) City Councilors.
However, his victory this time did not remain unchallenged. In the midst of his successful reelection, he found himself besieged by lawsuits of his opponents in the polls who wanted to
dislodge him from his position.
One such case was a petition for quo warranto 3 filed before the COMELEC by Cenon
Ronquillo, another candidate for councilor in the same district, who alleged Basco's ineligibility
to be elected councilor on the basis of the Tordesillas ruling. At about the same time, two more
cases were also commenced by Honorio Lopez II in the Office of the Ombudsman and in the
Department of Interior and Local Government. 4 All these challenges were, however,
dismissed, thus, paving the way for Basco's continued stay in office.
Despite the odds previously encountered, Basco remained undaunted and ran again for
councilor in the May 8, 1995, local elections seeking a third and final term. Once again, he
beat the odds by emerging sixth in a battle for six councilor seats. As in the past, however, his
right to office was again contested. On May 13, 1995, petitioner Grego, claiming to be a
registered voter of Precinct No. 966, District II, City of Manila, filed with the COMELEC a
petition for disqualification, praying for Basco's disqualification, for the suspension of his
proclamation, and for the declaration of Romualdo S. Maranan as the sixth duly elected
Councilor of Manila's Second District.
On the same day, the Chairman of the Manila City Board of Canvassers (BOC) was duly
furnished with a copy of the petition. The other members of the BOC learned about this
petition only two days later.
The COMELEC conducted a hearing of the case on May 14, 1995, where it ordered the
parties to submit simultaneously their respective memoranda.
Before the parties could comply with this directive, however, the Manila City BOC proclaimed
Basco on May 17, 1995, as a duly elected councilor for the Second District of Manila, placing
sixth among several candidates who vied for the seats. 5 Basco immediately took his oath of
office before the Honorable Ma. Ruby Bithao-Camarista, Presiding Judge, Metropolitan Trial
Court, Branch I, Manila.
In view of such proclamation, petitioner lost no time in filing an Urgent Motion seeking to annul
what he considered to be an illegal and hasty proclamation made on May 17, 1995, by the
Manila City BOC. He reiterated Basco's disqualification and prayed anew that candidate
Romualdo S. Maranan be declared the winner. As expected, Basco countered said motion by
filing his Urgent Opposition to: Urgent Motion (with Reservation to Submit Answer and/or
Motion to Dismiss Against Instant Petition for Disqualification with Temporary Restraining
Order).

On June 5, 1995, Basco filed his Motion to Dismiss Serving As Answer pursuant to the
reservation he made earlier, summarizing his contentions and praying as follows:
Respondent thus now submits that the petitioner is not entitled to relief for the following
reasons:
1. The respondent cannot be disqualified on the ground of Section 40 paragraph b of the Local
Government Code because the Tordesillas decision is barred by laches, prescription, res
judicata, lis pendens, bar by prior judgment, law of the case and stare decisis;
2. Section 4[0] par. B of the Local Government Code may not be validly applied to persons
who were dismissed prior to its effectivity. To do so would make it ex post facto, bill of
attainder, and retroactive legislation which impairs vested rights. It is also a class legislation
and unconstitutional on the account.
3. Respondent had already been proclaimed. And the petition being a preproclamation contest
under the Marquez v. Comelec Ruling, supra, it should be dismissed by virtue of said
pronouncement.
4. Respondent's three-time election as candidate for councilor constitutes implied pardon by
the people of previous misconduct (Aguinaldo v. Comelec G.R. 105128; Rice v. State 161
SCRA 401; Montgomery v. Newell 40 SW 2d 4181; People v. Bashaw 130 P. 2nd 237, etc.).
5. As petition to nullify certificate of candidacy, the instant case has prescribed; it was
premature as an election protest and it was not brought by a proper party in interest as such
protest.:
PRAYER
WHEREFORE it is respectfully prayed that the instant case be dismissed on instant motion to
dismiss the prayer for restraining order denied (sic). If this Honorable Office is not minded to
dismiss, it is respectfully prayed that instant motion be considered as respondent's answer. All
other reliefs and remedies just and proper in the premises are likewise hereby prayed for.
After the parties' respective memoranda had been filed, the COMELEC's First Division
resolved to dismiss the petition for disqualification on October 6, 1995, ruling that "the
administrative penalty imposed by the Supreme Court on respondent Basco on October 31,
1981 was wiped away and condoned by the electorate which elected him" and that on account
of Basco's proclamation on May 17, 1995, as the sixth duly elected councilor of the Second
District of Manila, "the petition would no longer be viable." 6
Petitioner's motion for reconsideration of said resolution was later denied by the COMELEC
en banc in its assailed resolution promulgated on July 31, 1996. 7 Hence, this petition.
Petitioner argues that Basco should be disqualified from running far any elective position since
he had been "removed from office as a result of an administrative case" pursuant to Section
40 (b) of Republic Act No. 7160, otherwise known as the Local Government Code (the Code),
which took effect on January 1, 1992. 8
Petitioner wants the Court to likewise resolve the following issues, namely:
1. Whether or not Section 40 (b) of Republic Act No. 7160 applies retroactively to those
removed from office before it took effect on January 1, 1992;
2. Whether or not private respondent's election in 1988, 1992 and in 1995 as City Councilor of
Manila wiped away and condoned the administrative penalty against him;
3. Whether or not private respondent's proclamation as sixth winning candidate on May 17,
1995, while the disqualification case was still pending consideration by COMELEC, is void ab
initio; and

4. Whether or not Romualdo S. Maranan, who placed seventh among the candidates for City
Councilor of Manila, may be declared a winner pursuant to Section 6 of Republic Act No.
6646.
While we do not necessarily agree with the conclusions and reasons of the COMELEC in the
assailed resolution, nonetheless, we find no grave abuse of discretion on its part in dismissing
the petition for disqualification. The instant petition must, therefore, fail.
We shall discuss the issues raised by petitioner in seriatim.
I. Does Section 40 (b) of Republic Act No. 7160 apply retroactively to those removed from
office before it took effect on January 1, 1992?
Section 40 (b) of the Local Government Code under which petitioner anchors Basco's alleged
disqualification to run as City Councilor states:
Sec. 40. Disqualifications. The following persons are disqualified from running for any
elective local position:
xxx xxx xxx
(b) Those removed from office as a result of an administrative case;
xxx xxx xxx
In this regard, petitioner submits that although the Code took effect only on January 1, 1992,
Section 40 (b) must nonetheless be given retroactive effect and applied to Basco's dismissal
from office which took place in 1981. It is stressed that the provision of the law as worded
does not mention or even qualify the date of removal from office of the candidate in order for
disqualification thereunder to attach. Hence, petitioner impresses upon the Court that as long
as a candidate was once removed from office due to an administrative case, regardless of
whether it took place during or prior to the effectivity of the Code, the disqualification applies. 9
To him, this interpretation is made more evident by the manner in which the provisions of
Section 40 are couched. Since the past tense is used in enumerating the grounds for
disqualification, petitioner strongly contends that the provision must have also referred to
removal from office occurring prior to the effectivity of the Code. 10
We do not, however, subscribe to petitioner's view. Our refusal to give retroactive application
to the provision of Section 40 (b) is already a settled issue and there exist no compelling
reasons for us to depart therefrom. Thus, in Aguinaldo v. COMELEC, 11 reiterated in the more
recent cases of Reyes v. COMELEC 12 and Salalima v. Guingona, Jr., 13 we ruled, thus:
The COMELEC applied Section 40 (b) of the Local Government Code (Republic Act 7160)
which provides:
Sec. 40. The following persons are disqualified from running for any elective local positions:
xxx xxx xxx
(b) Those removed from office as a result of an administrative case.
Republic Act 7160 took effect only on January 1, 1992.
The rule is:
xxx xxx xxx
. . . Well-settled is the principle that while the Legislature has the power to pass retroactive
laws which do not impair the obligation of contracts, or affect injuriously vested rights, it is
equally true that statutes are not to be construed as intended to have a retroactive effect so as
to affect pending proceedings, unless such intent is expressly declared or clearly and
necessarily implied from the language of the enactment. . . . (Jones v. Summers, 105 Cal.
App. 51, 286 Pac. 1093; U.S. v. Whyel 28 (2d) 30; Espiritu v. Cipriano, 55 SCRA 533 [1974],
cited in Nilo v. Court of Appeals, 128 SCRA 519 [1974]. See also Puzon v. Abellera, 169 SCRA

789 [1989]; Al-Amanah Islamic Investment Bank of the Philippines v. Civil Service
Commission, et al., G.R. No. 100599, April 8, 1992).
There is no provision in the statute which would clearly indicate that the same operates
retroactively.
It, therefore, follows that [Section] 40 (b) of the Local Government Code is not applicable to
the present case. (Emphasis supplied).
That the provision of the Code in question does not qualify the date of a candidate's removal
from office and that it is couched in the past tense should not deter us from applying the law
prospectively. The basic tenet in legal hermeneutics that laws operate only prospectively and
not retroactively provides the qualification sought by petitioner. A statute, despite the
generality in its language, must not be so construed as to overreach acts, events or matters
which transpired before its passage. Lex prospicit, non respicit. The law looks forward, not
backward. 14
II. Did private respondent's election to office as City Councilor of Manila in the 1988, 1992 and
1995 elections wipe away and condone the administrative penalty against him, thus restoring
his eligibility for public office?
Petitioner maintains the negative. He quotes the earlier ruling of the Court in Frivaldo v.
COMELEC 15 to the effect that a candidate's disqualification cannot be erased by the
electorate alone through the instrumentality of the ballot. Thus:
. . . (T)he qualifications prescribed for elective office cannot be erased by the electorate alone.
The will of the people as expressed through the ballot cannot cure the vice of ineligibility,
especially if they mistakenly believed, as in this case, that the candidate was qualified. . . .
At first glance, there seems to be a prima facie semblance of merit to petitioner's argument.
However, the issue of whether or not Basco's triple election to office cured his alleged
ineligibility is actually beside the point because the argument proceeds on the assumption that
he was in the first place disqualified when he ran in the three previous elections. This
assumption, of course, is untenable considering that Basco was NOT subject to any
disqualification at all under Section 40 (b) of the Local Government Code which, as we said
earlier, applies only to those removed from office on or after January 1, 1992. In view of the
irrelevance of the issue posed by petitioner, there is no more reason for the Court to still dwell
on the matter at length.
Anent Basco's alleged circumvention of the prohibition in Tordesillas against reinstatement to
any position in the national or local government, including its agencies and instrumentalities,
as well as government-owned or controlled corporations, we are of the view that petitioner's
contention is baseless. Neither does petitioner's argument that the term "any position" is broad
enough to cover without distinction both appointive and local positions merit any
consideration.
Contrary to petitioner's assertion, the Tordesillas decision did not bar Basco from running for
any elective position. As can be gleaned from the decretal portion of the said decision, the
Court couched the prohibition in this wise:
. . . AND WITH PREJUDICE TO REINSTATEMENT TO ANY POSITION IN THE NATIONAL
OR LOCAL GOVERNMENT, INCLUDING ITS AGENCIES AND INSTRUMENTALITIES, OR
GOVERNMENT-OWNED OR CONTROLLED CORPORATIONS.
In this regard, particular attention is directed to the use of the term "reinstatement." Under the
former Civil Service Decree, 16 the law applicable at the time Basco, a public officer, was

administratively dismissed from office, the term "reinstatement" had a technical meaning,
referring only to an appointive position. Thus:
Art. VIII. PERSONNEL POLICIES AND STANDARDS.
Sec. 24. Personnel Actions.
xxx xxx xxx
(d) Reinstatement. Any person who has been permanently APPOINTED to a position in the
career service and who has, through no delinquency or misconduct, been separated
therefrom, may be reinstated to a position in the same level for which he is qualified.
xxx xxx xxx
(Emphasis supplied).
The Rules on Personnel Actions and Policies issued by the Civil Service Commission on
November 10, 1975, 17 provides a clearer definition. It reads:
RULE VI. OTHER PERSONNEL ACTIONS
Sec. 7. Reinstatement is the REAPPOINTMENT of a person who was previously separated
from the service through no delinquency or misconduct on his part from a position in the
career service to which he was permanently appointed, to a position for which he is qualified.
(Emphasis supplied).
In light of these definitions, there is, therefore, no basis for holding that Basco is likewise
barred from running for an elective position inasmuch as what is contemplated by the
prohibition in Tordesillas is reinstatement to an appointive position.
III. Is private respondent's proclamation as sixth winning candidate on May 17, 1995, while the
disqualification case was still pending consideration by COMELEC, void ab initio?
To support its position, petitioner argues that Basco violated the provisions of Section 20,
paragraph (i) of Republic Act No. 7166, Section 6 of Republic Act No. 6646, as well as our
ruling in the cases of Duremdes v. COMELEC, 18 Benito v. COMELEC 19 and Aguam v.
COMELEC. 20
We are not convinced. The provisions and cases cited are all misplaced and quoted out of
context. For the sake of clarity, let us tackle each one by one.
Section 20, paragraph (i) of Rep. Act 7166 reads:
Sec. 20. Procedure in Disposition of Contested Election Returns.
xxx xxx xxx
(i) The board of canvassers shall not proclaim any candidate as winner unless authorized by
the Commission after the latter has ruled on the objections brought to it on appeal by the
losing party. Any proclamation made in violation hereof shall be void ab initio, unless the
contested returns will not adversely affect the results of the election.
xxx xxx xxx
The inapplicability of the abovementioned provision to the present case is very much patent
on its face considering that the same refers only to a void proclamation in relation to
contested returns and NOT to contested qualifications of a candidate.
Next, petitioner cites Section 6 of Rep. Act 6646 which states:
Sec. 6. Effect of Disqualification Case. Any candidate who has been declared by final
judgment to be disqualified shall not be voted for, and the votes cast for him shall not be
counted. If for any reason, a candidate is not declared by final judgment before an election to
be disqualified and he is voted for and receives the winning number of votes in such election,
the Court or Commission shall continue with the trial and hearing of the action, inquiry or
protest and, upon motion of the complainant or any intervenor, may during the pendency

thereof order the suspension of the proclamation of such candidate whenever the evidence of
his guilt is strong. (Emphasis supplied).
This provision, however, does not support petitioner's contention that the COMELEC, or more
properly speaking, the Manila City BOC, should have suspended the proclamation. The use of
the word "may" indicates that the suspension of a proclamation is merely directory and
permissive in nature and operates to confer discretion. 21 What is merely made mandatory,
according to the provision itself, is the continuation of the trial and hearing of the action,
inquiry or protest. Thus, in view of this discretion granted to the COMELEC, the question of
whether or not evidence of guilt is so strong as to warrant suspension of proclamation must be
left for its own determination and the Court cannot interfere therewith and substitute its own
judgment unless such discretion has been exercised whimsically and capriciously. 22 The
COMELEC, as an administrative agency and a specialized constitutional body charged with
the enforcement and administration of all laws and regulations relative to the conduct of an
election, plebiscite, initiative, referendum, and recall, 23 has more than enough expertise in its
field that its findings or conclusions are generally respected and even given finality. 24 The
COMELEC has not found any ground to suspend the proclamation and the records likewise
fail to show any so as to warrant a different conclusion from this Court. Hence, there is no
ample justification to hold that the COMELEC gravely abused its discretion.
It is to be noted that Section 5, Rule 25 of the COMELEC Rules of Procedure 25 states that:
Sec. 5. Effect of petition if unresolved before completion of canvass. . . . (H)is proclamation
shall be suspended notwithstanding the fact that he received the winning number of votes in
such election.
However, being merely an implementing rule, the same must not override, but instead remain
consistent with and in harmony with the law it seeks to apply and implement. Administrative
rules and regulations are intended to carry out, neither to supplant nor to modify, the law. 26
Thus, in Miners Association of the Philippines, Inc. v. Factoran, Jr., 27 the Court ruled that:
We reiterate the principle that the power of administrative officials to promulgate rules and
regulations in the implementation of a statute is necessarily limited only to carrying into effect
what is provided in the legislative enactment. The principle was enunciated as early as 1908 in
the case of United States v. Barrias. The scope of the exercise of such rule-making power was
clearly expressed in the case of United States v. Tupasi Molina, decided in 1914, thus: "Of
course, the regulations adopted under legislative authority by a particular department must be
in harmony with the provisions of the law, and for the sole purpose of carrying into effect its
general provisions. By such regulations, of course, the law itself can not be extended. So long,
however, as the regulations relate solely to carrying into effect the provision of the law, they
are valid.
Recently, the case of People v. Maceren gave a brief delineation of the scope of said power of
administrative officials:
Administrative regulations adopted under legislative authority by a particular department must
be in harmony with the provisions of the law, and should be for the sole purpose of carrying
into effect its general provisions. By such regulations, of course, the law itself cannot be
extended (U.S. v. Tupasi Molina, supra). An administrative agency cannot amend an act of
Congress (Santos v. Estenzo, 109 Phil. 419, 422; Teoxon vs. Members of the Board of
Administrators, L-25619, June 30, 1970, 33 SCRA 585; Manuel vs. General Auditing Office, L28952, December 29, 1971, 42 SCRA 660; Deluao v. Casteel, L-21906, August 29, 1969, 29
SCRA 350).

The rule-making power must be confined to details for regulating the mode or proceeding to
carry into effect the law as it has been enacted. The power cannot be extended to amending
or expanding the statutory requirements or to embrace matters not covered by the statute.
Rules that subvert the statute cannot be sanctioned (University of Santo Tomas v. Board of
Tax Appeals, 93 Phil. 376, 382, citing 12 C.J. 845-46. As to invalid regulations, see Collector
of Internal Revenue v. Villaflor, 69 Phil. 319; Wise & Co. v. Meer, 78 Phil. 655, 676; Del Mar v.
Phil. Veterans Administration, L-27299, June 27, 1973, 51 SCRA 340, 349).
xxx xxx xxx
. . . The rule or regulations should be within the scope of the statutory authority granted by the
legislature to the administrative agency (Davis, Administrative Law, p. 194, 197, cited in
Victorias Milling Co., Inc. v. Social Security Commission, 114 Phil. 555, 558).
In case of discrepancy between the basic law and a rule or regulation issued to implement
said law, the basic law prevails because said rule or regulations cannot go beyond the terms
and provisions of the basic law (People v. Lim, 108 Phil. 1091).
Since Section 6 of Rep. Act 6646, the law which Section 5 of Rule 25 of the COMELEC Rules
of Procedure seeks to implement, employed the word "may," it is, therefore, improper and
highly irregular for the COMELEC to have used instead the word "shall" in its rules.
Moreover, there is no reason why the Manila City BOC should not have proclaimed Basco as
the sixth winning City Councilor. Absent any determination of irregularity in the election
returns, as well as an order enjoining the canvassing and proclamation of the winner, it is a
mandatory and ministerial duty of the Board of Canvassers concerned to count the votes
based on such returns and declare the result. This has been the rule as early as in the case of
Dizon v. Provincial Board of Canvassers of Laguna 28 where we clarified the nature of the
functions of the Board of Canvassers, viz.:
The simple purpose and duty of the canvassing board is to ascertain and declare the apparent
result of the voting. All other questions are to be tried before the court or other tribunal for
contesting elections or in quo warranto proceedings. (9 R.C.L., p. 1110)
To the same effect is the following quotation:
. . . Where there is no question as to the genuineness of the returns or that all the returns are
before them, the powers and duties of canvassers are limited to the mechanical or
mathematical function of ascertaining and declaring the apparent result of the election by
adding or compiling the votes cast for each candidate as shown on the face of the returns
before them, and then declaring or certifying the result so ascertained. (20 C.J., 200-201)
[Emphasis supplied]
Finally, the cases of Duremdes, Benito and Aguam, supra, cited by petitioner are all irrelevant
and inapplicable to the factual circumstances at bar and serve no other purpose than to
muddle the real issue. These three cases do not in any manner refer to void proclamations
resulting from the mere pendency of a disqualification case.
In Duremdes, the proclamation was deemed void ab initio because the same was made
contrary to the provisions of the Omnibus Election Code regarding the suspension of
proclamation in cases of contested election returns.
In Benito, the proclamation of petitioner Benito was rendered ineffective due to the Board of
Canvassers' violation of its ministerial duty to proclaim the candidate receiving the highest
number of votes and pave the way to succession in office. In said case, the candidate
receiving the highest number of votes for the mayoralty position died but the Board of

Canvassers, instead of proclaiming the deceased candidate winner, declared Benito, a mere
second-placer, the mayor.
Lastly, in Aguam, the nullification of the proclamation proceeded from the fact that it was
based only on advanced copies of election returns which, under the law then prevailing, could
not have been a proper and legal basis for proclamation.
With no precedent clearly in point, petitioner's arguments must, therefore, be rejected.
IV. May Romualdo S. Maranan, a seventh placer, be legally declared a winning candidate?
Obviously, he may not be declared a winner. In the first place, Basco was a duly qualified
candidate pursuant to our disquisition above. Furthermore, he clearly received the winning
number of votes which put him in sixth place. Thus, petitioner's emphatic reference to Labo v.
COMELEC, 29 where we laid down a possible exception to the rule that a second placer may
not be declared the winning candidate, finds no application in this case. The exception is
predicated on the concurrence of two assumptions, namely: (1) the one who obtained the
highest number of votes is disqualified; and (2) the electorate is fully aware in fact and in law
of a candidate's disqualification so as to bring such awareness within the realm of notoriety
but would nonetheless cast their votes in favor of the ineligible candidate. Both assumptions,
however, are absent in this case. Petitioner's allegation that Basco was well-known to have
been disqualified in the small community where he ran as a candidate is purely speculative
and conjectural, unsupported as it is by any convincing facts of record to show notoriety of his
alleged disqualification. 30
In sum, we see the dismissal of the petition for disqualification as not having been attended by
grave abuse of discretion. There is then no more legal impediment for private respondent's
continuance in office as City Councilor for the Second District of Manila.
WHEREFORE, the instant petition for certiorari and prohibition is hereby DISMISSED for lack
of merit. The assailed resolution of respondent Commission on Elections (COMELEC) in SPA
95-212 dated July 31, 1996 is hereby AFFIRMED. Costs against petitioner.
SO ORDERED.
Narvasa, C.J., Regalado, Davide, Jr., Melo, Puno, Vitug, Mendoza, Hermosisima, Jr.,
Panganiban and Torres, Jr., JJ., concur.
Padilla, Bellosillo, Kapunan and Francisco, JJ., are on leave.
Footnotes
1 "In re: Petition to Disqualify Candidate for Councilor, Humberto Basco, Second District, City
of Manila, in the May 8, 1995 Local Elections," Annex, "A," Rollo, pp. 40-44.
2 Adm. Matter No. P-2363, 108 SCRA 551 (1981).
3 Docketed as SPC No. 92-93, Rollo, p. 183.
4 Rollo, p, 162.
5 Annex "B," Rollo, p. 46. The names of the winning candidates and their corresponding votes
are as follows:
(1) NESTOR C. PONCE 48,088
(2) MARLON M. LACSON 41,611
(3) FLAVIANO F. CONCEPCION, JR. 39,548
(4) FRANCISCO B. VARONA, JR. 37,635

(5) ABELARDO C. VICEO 37,183

(6) HUMBERTO B. BASCO 34,358
6 Rollo, pp. 101-102.
7 Supra, note 1.
8 Both parties made errors in their respective pleadings as to the date of effectivity of Rep. Act
7160.
9 Rollo, p. 14.
10 Id.
11 G.R. Nos. 105128-30, promulgated on June 9, 1992.
12 254 SCRA 514 (1996).
13 257 SCRA 55 (1996).
14 R.E. AGPALO, STATUTORY CONSTRUCTION 254 (2nd ed., 1990), citing Laceste v.
Santos, 56 Phil. 472. Cf . also Article 4, Civil Code.
15 174 SCRA 245 (1989).
16 Presidential Decree No. 807, issued on October 6, 1975. This law has been superseded by
Subtitle A, Title I, Book V of Executive Order No. 292, otherwise known as the Administrative
Code of 1987, which took effect on November 29, 1989, or two years after its publication in
the Official Gazette.
17 Implementing Rules of P.D. 807.
18 178 SCRA 746 (1989).
19 235 SCRA 436 (1994).
20 23 SCRA 883 (1968).
21 R.E. AGPALO, STATUTORY CONSTRUCTION 239 (2nd ed., 1990).
22 Provident Tree Farms, Inc. v. Batario, Jr., 231 SCRA 463 (1994).
23 Sec. 2, Sub-title C, Art. IX, 1987 Constitution.
24 Cf . Ting v. Court of Appeals, 237 SCRA 797 (1994); Sesbreno v. Ala, 208 SCRA 359
(1992); San Miguel Corp. v. Javate, Jr., 205 SCRA 469 (1992).
25 Published in the Official Gazette on June 27, 1988, Vol. 84, No. 26.
26 Commissioner of Internal Revenue v. Court of Appeals, 240 SCRA 368 (1995).
27 240 SCRA 100 (1995).
28 52 Phil. 47.
29 211 SCRA 456 (1992).
30 Frivaldo v. COMELEC, 257 SCRA 727 (1996).

Restituto G. Martinez and Patrocinio D. Francisco for petitioner.Jose H. Tecson for

respondents.
BENGZON, J.P., J.:

Republic of the Philippines

SUPREME COURT
Manila
EN BANC
G.R. No. L-20901

August 31, 1965

CIRIACA SANTOS, petitioner,

vs.
TEODORICA DUATA and THE COURT OF APPEALS, respondents.

Apolonio del Mundo and his brother, Dalmacio, were lessees of a parcel of land in the
Lolomboy Friar Lands Estate situated at Polo, Bulacan. On November 11, 1908 Apolonio del
Mundo sold his rights to the land to the spouses Pedro Duata and Epifania Aguilar for the sum
of P40.00. Since then until the present time, said spouses and later their daughter, Teodorica
Duata, have adverse, peaceful and uninterrupted possession of the land. This same property
subsequently became a part (one-fourth) of Lot No. 37 of the Malanday, Lolomboy Friar Lands
Estate covered by Transfer Certificate of Title No. 11938.
On March 23, 1933 Ciriaca Santos, Petrona Gaanan and Epifania Aguilar purchased Lot No.
37 from the Bureau of Lands with the previous agreement that Petrona Gaanan would receive
one-half of the lot and Ciriaca Santos and the Duata spouses would share equally the other
half. The portion allocated to the Duata spouses was the very same land over which Apolonio
del Mundo conveyed to them his rights in 1908. For convenience and facility in making
payments on the purchase price and in the issuance of the corresponding certificate of title,
Lot No. 37's title certificate was issued in the name of Ciriaca Santos.
On August 3, 1955 Teodorica Duata, the daughter of the Duata spouses, instituted an action in
the Court of First Instance of Bulacan against Ciriaca Santos for the reconveyance of onefourth of Lot No. 37. In her answer Ciriaca Santos denied the ownership of the Duata spouses
over one-fourth of Lot No. 37 and alleged that assuming the land in question belonged to the
Duata spouses, the same had already been sold to her by Epifania Aguilar. She later
produced in court a private document (Exhibit 3) purportedly executed by Epifania Aguilar on
September 25, 1938 wherein said Epifania Aguilar sold for and in consideration of P154.00 a
one-fourth interest in Lot No. 37, subject to repurchase within one year from September 25,
1938.
Ciriaca Santos died on February 8, 1957 and was substituted by her sole heir Juana Prodon
as defendant.
It was admitted by defendant during pre-trial and the trial court found that the spouses Pedro
Duata and Epifania Aguilar owned one-fourth of Lot No. 37; that Epifania Aguilar sold the onefourth interest to Ciriaca Santos on September 25, 1938 with right to repurchase the same
within one year from said date; that since the land was not repurchased within the time
stipulated, ownership over the same became vested in Ciriaca Santos. It, therefore, declared
the defendant owner of the property in question and dismissed the complaint.
Teodorica Duata appeal to the Court of Appeals.
The Court of Appeals considered the transaction between Ciriaca Santos and Epifania Aguilar
an equitable mortgage rather than a pacto de retro sale. It then set aside the judgment of the
trial court and entered another one which states:
WHEREFORE, the judgment appealed from is hereby set aside, and another entered, (1)
ordering defendant-appellee to execute the proper deed of conveyance and transfer over 1/2
of Lot 37-B of the Lolomboy estate in favor of plaintiff-appellant upon payment by the latter
within 90 days from the finality of this decision the mortgage loan of P154.00 to the former;
and (2) ordering said defendant-appellant to surrender T.C.T. No. 11938 to the Register of

Deeds of Bulacan for the annotation of the deed of conveyance and transfer. No
pronouncement as to costs.
Defendant appealed to this Court.
The sole issue is whether Ciriaca Santos and Epifania Aguilar in executing the document
marked Exhibit 3 intended a mortgage or sale with pacto de retro.
The pertinent portion of Exhibit 3 reads:
II. Na, alang-alang sa halagang ISANG DAAN AT LIMAMPU'T APAT NA PISO (P154.00) na
tinanggap ko at ibinayad sa akin ni Bb. Ciriaca Santos, filipina, may sapat na gulang, dalaga
at naninirahan sa Maykawayan, Bulacan, K. P., sa pamamagitan ng kasulatang ito ay aking
ipinagbibili ng biling mabibiling muli ang ika apat na bahagi ng nasabing lupa sa itaas nito sa
nasabi ng Bb. Ciriaca Santos sa ilalim ng kasunduang gaya ng mga sumusunod:
(a) Na bibilhin kong muli sa halagang P154.00 and nasabing pag-aari ko, sa loob ng isang
taon simula ngayon;
(b) Na, sakaling hindi ko mabiling muli ang nasabing lupa sa loob ng isang taon simula sa
fechang ito ay magiging lubusang pag-aari na ni Bb. Ciriaca Santos and nasabing pagaari, na
hindi na kakailanganin pa ang panibagong kasulatan ng bilihang lubusan.
The above-quoted stipulation, standing alone, would show a transfer by Epifania Aguilar to
Ciriaca Santos of one-fourth of Lot No. 37 by way of sale with pacto de retro. The coetaneous
actuations of Epifania Aguilar and Ciriaca Santos, however, indicate the contrary. For, despite
execution of Exhibit 3, Epifania Aguilar remained in possession of the land in the concept of
an owner. She and her daughter continued paying the land tax a burden attached to
ownership 1 on the property. Previous, simultaneous and subsequent acts of the parties are
properly cognizable indicia of their true intention. 2 The attendance of such circumstances
raises the presumption under Article 1602 of the New Civil Code that Exhibit 3 is an equitable
mortgage:
ART. 1602. The contract shall be presumed to be an equitable mortgage, in any of the
following cases:
(1) When the price of a sale with right to repurchase is unusually inadequate;
(2) When the vendor remains in possession as lessee or otherwise;
(3) When upon or after the expiration of the right to repurchase another instrument extending
the period of redemption or granting a new period is executed;
(4) When the purchaser retains for himself a part of the purchase price;
(5) When the vendor binds himself to pay the taxes on the thing sold;
(6) In any other case where it may be fairly inferred that the real intention of the parties is that
the transaction shall secure the payment of a debt or the performance of any other obligation.
In any of the foregoing cases, any money, fruits, or other benefit to be received by the vendee
as rent or otherwise shall be considered as interest which shall be subject to the usury laws.
Ciriaca Santos, however, maintains that mere possession of the land and payment of land
taxes due thereon by Duata would not warrant presumption that Exhibit 3 is an equitable
mortgage. Accordingly, she contends that there must be a "concurrence of an overwhelming
number of circumstances" before the presumption would arise. To this proposition we do not
agree. Article 1602, when it expressly states "in any of the following cases," contemplates the
existence of any of the circumstances enumerated therein.
Article 1602 is a new provision in the Civil Code designed primarily to curtail the evils brought
about by contracts of sale with right of repurchase, such as the circumvention of the usury law
and pactum commissorium. It particularly envisions contracts of sale with right of repurchase

where the real intention of the parties is that the pretended purchase price is money loaned,
and in order to secure the payment of the loan a contract purporting to be a sale with pacto de
retro is drawn up. 3
Being remedial in nature, Article 1602 may be applied retroactively to cases arising prior to the
effectivity of the New Civil Code.4 Hence, it may be applied in this case to determine the
nature of Exhibit 3.
The ania Aguilar obtained a loan from Ciriaca Santos for which she put up the land in question
as security; that the loan remained unpaid by reason of Ciriaca Santos' refusal to accept
payment; and that after Epifania Aguilar's death, her daughter, Teodorica Duata, on several
occasions tendered payment for her mother's indebtedness. These facts only confirm the
presumption under Article 1602 of the New Civil Code that the contract, Exhibit 3, executed by
Epifania Aguilar in favor of Ciriaca Santos was in reality an equitable mortgage, not a sale with
right of repurchase.
WHEREFORE, the decision appealed from is hereby affirmed. No costs. So ordered.
Bengzon, C.J., Bautista Angelo, Concepcion, Reyes, J.B.L., Dizon, Regala, Makalintal and
Zaldivar, JJ., concur.
Footnotes
1
Marquez v. Valencia, 77 Phil. 783, 787.
2
Bacordo v. Alcantara, L-20080, July 30, 1965.
3
See report of the Code Commission, pp. 61-63.
4
Casabar v. Sino Cruz, L-6882, Dec. 29, 1954.

DECISION
PANGANIBAN, J.:
The right to seek recognition granted by the Civil Code to illegitimate children who were still
minors at the time the Family Code took effect cannot be impaired or taken away. The minors
have up to four years from attaining majority age within which to file an action for recognition.
Statement of the Case
Before us is a Petition[1] for Review on Certiorari under Rule 45 of the Rules of Court, praying
for (1) the nullification of the July 7, 1999 Court of Appeals[2] (CA) Decision[3] in CA-GR CV
No. 51919 and the October 14, 1999 CA Resolution[4] denying petitioners Motion for
Reconsideration, as well as (2) the reinstatement of the two Orders issued by the Regional
Trial Court (RTC) of Pasay City (Branch 109) concerning the same case. The dispositive
portion of the assailed Decision reads as follows:
WHEREFORE, premises considered, the order of the lower court dismissing Civil Case No.
94-0562 is REVERSED and SET ASIDE. Let the records of this case be remanded to the
lower court for trial on the merits.[5]
The Facts
The undisputed facts are summarized by the Court of Appeals in this wise:
The late Fiscal Ernesto A. Bernabe allegedly fathered a son with his secretary of twenty-three
(23) years, herein plaintiff-appellant Carolina Alejo. The son was born on September 18, 1981
and was named Adrian Bernabe. Fiscal Bernabe died on August 13, 1993, while his wife
Rosalina died on December 3 of the same year, leaving Ernestina as the sole surviving heir.
On May 16, 1994, Carolina, in behalf of Adrian, filed the aforesaid complaint praying that
Adrian be declared an acknowledged illegitimate son of Fiscal Bernabe and as such he
(Adrian) be given his share in Fiscal Bernabes estate, which is now being held by Ernestina
as the sole surviving heir.
On July 16, 1995, the Regional Trial Court dismissed the complaint, ruling that under the
provisions of the Family Code as well as the case of Uyguangco vs. Court of Appeals, the
complaint is now barred x x x.[6]

THIRD DIVISION
[G.R. No. 140500. January 21, 2002]

Orders of the Trial Court

In an Order dated July 26, 1995, the trial court granted Ernestina Bernabes Motion for
Reconsideration of the trial courts Decision and ordered the dismissal of the Complaint for
recognition. Citing Article 175 of the Family Code, the RTC held that the death of the putative
father had barred the action.

ERNESTINA BERNABE, petitioner, vs. CAROLINA ALEJO as guardian ad litem for the minor
ADRIAN BERNABE, respondent.

In its Order dated October 6, 1995, the trial court added that since the putative father had not
acknowledged or recognized Adrian Bernabe in writing, the action for recognition should have

been filed during the lifetime of the alleged father to give him the opportunity to either affirm or
deny the childs filiation.

ART. 285. The action for the recognition of natural children may be brought only during the
lifetime of the presumed parents, except in the following cases:

Ruling of the Court of Appeals

On the other hand, the Court of Appeals ruled that in the interest of justice, Adrian should be
allowed to prove that he was the illegitimate son of Fiscal Bernabe. Because the boy was born
in 1981, his rights are governed by Article 285 of the Civil Code, which allows an action for
recognition to be filed within four years after the child has attained the age of majority. The
subsequent enactment of the Family Code did not take away that right.

(1) If the father or mother died during the minority of the child, in which case the latter may file
the action before the expiration of four years from the attainment of his majority;
(2) If after the death of the father or of the mother a document should appear of which nothing
had been heard and in which either or both parents recognize the child.
In this case, the action must be commenced within four years from the finding of the
document.

Hence, this appeal.[7]

Issues

The two exceptions provided under the foregoing provision, have however been omitted by
Articles 172, 173 and 175 of the Family Code, which we quote:

In her Memorandum,[8] petitioner raises the following issues for our consideration:
ART. 172. The filiation of legitimate children is established by any of the following:
I
Whether or not respondent has a cause of action to file a case against petitioner, the
legitimate daughter of the putative father, for recognition and partition with accounting after the
putative fathers death in the absence of any written acknowledgment of paternity by the latter.
II
Whether or not the Honorable Court of Appeals erred in ruling that respondents had four years
from the attainment of minority to file an action for recognition as provided in Art. 285 of the
Civil Code, in complete disregard of its repeal by the [express] provisions of the Family Code
and the applicable jurisprudence as held by the Honorable Court of Appeals.

(1) The record of birth appearing in the civil register or a final judgment; or
(2) An admission of legitimate filiation in a public document or a private handwritten instrument
and signed by the parent concerned.
In the absence of the foregoing evidence, the legitimate filiation shall be proved by:
(1) The open and continuous possession of the status of a legitimate child; or
(2) Any other means allowed by the Rules of Court and special laws.

III
Whether or not the petition for certiorari filed by the petition[er] is fatally defective for failure to
implead the Court of Appeals as one of the respondents.[9]
The Courts Ruling
The Petition has no merit.

ART. 173. The action to claim legitimacy may be brought by the child during his or her lifetime
and shall be transmitted to the heirs should the child die during minority or in a state of
insanity. In these cases, the heirs shall have a period of five years within which to institute the
action.
The action already commenced by the child shall survive notwithstanding the death of either
or both of the parties.

First and Second Issues: Period to File Action for Recognition

Because the first and the second issues are interrelated, we shall discuss them jointly.
Petitioner contends that respondent is barred from filing an action for recognition, because
Article 285 of the Civil Code has been supplanted by the provisions of the Family Code. She
argues that the latter Code should be given retroactive effect, since no vested right would be
impaired. We do not agree.
Article 285 of the Civil Code provides the period for filing an action for recognition as follows:

ART. 175. Illegitimate children may establish their illegitimate filiation in the same way and on
the same, evidence as legitimate children.
The action must be brought within the same period specified in Article 173, except when the
action is based on the second paragraph of Article 172, in which case the action may be
brought during the lifetime of the alleged parent.
Under the new law, an action for the recognition of an illegitimate child must be brought within
the lifetime of the alleged parent. The Family Code makes no distinction on whether the

former was still a minor when the latter died. Thus, the putative parent is given by the new
Code a chance to dispute the claim, considering that illegitimate children are usually begotten
and raised in secrecy and without the legitimate family being aware of their existence. x x x
The putative parent should thus be given the opportunity to affirm or deny the childs filiation,
and this, he or she cannot do if he or she is already dead.[10]
Nonetheless, the Family Code provides the caveat that rights that have already vested prior to
its enactment should not be prejudiced or impaired as follows:
ART. 255. This Code shall have retroactive effect insofar as it does not prejudice or impair
vested or acquired rights in accordance with the Civil Code or other laws.
The crucial issue to be resolved therefore is whether Adrians right to an action for recognition,
which was granted by Article 285 of the Civil Code, had already vested prior to the enactment
of the Family Code. Our answer is affirmative.
A vested right is defined as one which is absolute, complete and unconditional, to the exercise
of which no obstacle exists, and which is immediate and perfect in itself and not dependent
upon a contingency x x x.[11] Respondent however contends that the filing of an action for
recognition is procedural in nature and that as a general rule, no vested right may attach to
[or] arise from procedural laws.[12]
Bustos v. Lucero[13] distinguished substantive from procedural law in these words:
x x x. Substantive law creates substantive rights and the two terms in this respect may be said
to be synonymous. Substantive rights is a term which includes those rights which one enjoys
under the legal system prior to the disturbance of normal relations. Substantive law is that part
of the law which creates, defines and regulates rights, or which regulates the rights and duties
which give rise to a cause of action; that part of the law which courts are established to
administer; as opposed to adjective or remedial law, which prescribes the method of enforcing
rights or obtains redress for their invasion.[14] (Citations omitted)
Recently, in Fabian v. Desierto,[15] the Court laid down the test for determining whether a rule
is procedural or substantive:
[I]n determining whether a rule prescribed by the Supreme Court, for the practice and
procedure of the lower courts, abridges, enlarges, or modifies any substantive right, the test is
whether the rule really regulates procedure, that is, the judicial process for enforcing rights
and duties recognized by substantive law and for justly administering remedy and redress for
a disregard or infraction of them. If the rule takes away a vested right, it is not procedural. If
the rule creates a right such as the right to appeal, it may be classified as a substantive
matter; but if it operates as a means of implementing an existing right then the rule deals
merely with procedure.[16]
Applying the foregoing jurisprudence, we hold that Article 285 of the Civil Code is a
substantive law, as it gives Adrian the right to file his petition for recognition within four years

from attaining majority age. Therefore, the Family Code cannot impair or take Adrians right to
file an action for recognition, because that right had already vested prior to its enactment.
Uyguangco v. Court of Appeals[17] is not applicable to the case at bar, because the plaintiff
therein sought recognition as an illegitimate child when he was no longer a minor. On the
other hand, in Aruego Jr. v. Court of Appeals[18] the Court ruled that an action for recognition
filed while the Civil Code was in effect should not be affected by the subsequent enactment of
the Family Code, because the right had already vested.
Not Limited to Natural Children
To be sure, Article 285 of the Civil Code refers to the action for recognition of natural children.
Thus, petitioner contends that the provision cannot be availed of by respondent, because at
the time of his conception, his parents were impeded from marrying each other. In other
words, he is not a natural child.
A natural child is one whose parents, at the time of conception, were not disqualified by any
legal impediment from marrying each other. Thus, in De Santos v. Angeles,[19] the Court
explained:
A childs parents should not have been disqualified to marry each other at the time of
conception for him to qualify as a natural child.[20]
A strict and literal interpretation of Article 285 has already been frowned upon by this Court in
the aforesaid case of Aruego, which allowed minors to file a case for recognition even if their
parents were disqualified from marrying each other. There, the Complaint averred that the late
Jose Aruego Sr., a married man, had an extramarital liason with Luz Fabian. Out of this
relationship were born two illegitimate children who in 1983 filed an action for recognition. The
two children were born in 1962 and 1963, while the alleged putative father died in 1982. In
short, at the time of their conception, the two childrens parents were legally disqualified from
marrying each other. The Court allowed the Complaint to prosper, even though it had been
filed almost a year after the death of the presumed father. At the time of his death, both
children were still minors.
Moreover, in the earlier case Divinagracia v. Rovira,[21] the Court said that the rules on
voluntary and compulsory acknowledgment of natural children, as well as the prescriptive
period for filing such action, may likewise be applied to spurious children. Pertinent portions of
the case are quoted hereunder:
The so-called spurious children, or illegitimate children other than natural children, commonly
known as bastards, include those adulterous children or those born out of wedlock to a
married woman cohabiting with a man other than her husband or to a married man cohabiting
with a woman other than his wife. They are entitled to support and successional rights. But
their filiation must be duly proven.
How should their filiation be proven? Article 289 of the Civil Code allows the investigation of
the paternity or maternity or spurious children under the circumstances specified in articles

283 and 284 of the Civil Code. The implication is that the rules on compulsory recognition of
natural children are applicable to spurious children.
Spurious children should not be in a better position than natural children. The rules on proof of
filiation of natural children or the rules on voluntary and compulsory acknowledgment for
natural children may be applied to spurious children.
That does not mean that spurious children should be acknowledged, as that term is used with
respect to natural children. What is simply meant is that the grounds or instances for the
acknowledgment of natural children are utilized to establish the filiation of spurious children.
A spurious child may prove his filiation by means of a record of birth, a will, a statement before
a court of record, or in any authentic writing. These are the modes of voluntary recognition of
natural children.

WHEREFORE, the Petition is hereby DENIED and the assailed Decision and Resolution
AFFIRMED. Costs against petitioner.
SO ORDERED.
Melo, (Chairman), Sandoval-Gutierrez, and Carpio, JJ., concur.
Vitug, J., no part. Relationship with family.
[1] Rollo, pp. 3-14. The Petition was signed by Atty. Wenceslao B. Trinidad.
[2] Special First Division; penned by J. Jesus M. Elbinias (presiding justice and Division
chairman); concurred in by JJ Delilah Vidallon Magtolis and Edgardo P. Cruz (members).
[3] Rollo, pp. 33-37.

In case there is no evidence on the voluntary recognition of the spurious child, then his filiation
may be established by means of the circumstances or grounds for compulsory recognition
prescribed in the aforementioned articles 283 and 284.

[4] Rollo, p. 18. J. Andres B. Reyes Jr. signed for J. Magtolis who was on leave.
[5] Assailed Decision, p. 5; Rollo, p. 37.

The prescriptive period for filing the action for compulsory recognition in the case of natural
children, as provided for in article 285 of the Civil Code, applies to spurious children.[22]
(Citations omitted, italics supplied)
Thus, under the Civil Code, natural children have superior successional rights over spurious
ones.[23] However, Rovira treats them as equals with respect to other rights, including the
right to recognition granted by Article 285.

[6] Assailed Decision, pp. 1-2; Rollo, pp. 33-34.

[7] This case was deemed submitted for decision on August 16, 2000, upon this Courts receipt
of petitioners Memorandum signed by Atty. Jose Allan M. Tebelin. Respondents Memorandum,
signed by Attys. Felix D. Carao Jr. and R.A.V. Saguisag, was received by this Court on August
14, 2000.

To emphasize, illegitimate children who were still minors at the time the Family Code took
effect and whose putative parent died during their minority are thus given the right to seek
recognition (under Article 285 of the Civil Code) for a period of up to four years from attaining
majority age. This vested right was not impaired or taken away by the passage of the Family
Code.

[8] Rollo, pp. 103-116; original underscored and in upper case.

Indeed, our overriding consideration is to protect the vested rights of minors who could not
have filed suit, on their own, during the lifetime of their putative parents. As respondent aptly
points out in his Memorandum,[24] the State as parens patriae should protect a minors right.
Born in 1981, Adrian was only seven years old when the Family Code took effect and only
twelve when his alleged father died in 1993. The minor must be given his day in court.

[11] Reyes v. Commission on Audit, 305 SCRA 512, 518, March 29, 1999, per Pardo, J.

[9] Memorandum for petitioner, p. 4; Rollo, p. 106.

[10] Alicia V. Sempio-Diy, Handbook on the Family Code (1995 ed.), p. 282.

[12] Medina Investigation & Security Corporation v. Court of Appeals, GR No. 144074, March
20, 2001, per Gonzaga-Reyes, J.
[13] 81 Phil. 648, March 8, 1949.

Third Issue: Failure to Implead the CA

[14] Ibid., pp. 649-650, per Tuason, J.
Under Section 4(a) of Rule 45 of the current Rules of Court, it is no longer required to implead
the lower courts or judges x x x either as petitioners or respondents. Under Section 3,
however, the lower tribunal should still be furnished a copy of the petition. Hence, the failure of
petitioner to implead the Court of Appeals as a party is not a reversible error; it is in fact the
correct procedure.

[15] 295 SCRA 470, 492, September 16, 1998.

[16] Ibid., p. 492, per Regalado, J.

[17] 178 SCRA 684, October 26, 1989.

Republic of the Philippines

SUPREME COURT
Manila
THIRD DIVISION

[18] 254 SCRA 711, March 13, 1996.

[19] 251 SCRA 206, December 12, 1995.

G.R. No. 122641 January 20, 1997

[20] Ibid., p. 212, per Romero, J.

[22] Ibid., pp. 314-315, per Aquino, J. (later CJ).

BAYANI SUBIDO, JR. and RENE PARINA, petitioners,

vs.
THE HONORABLE SANDIGANBAYAN and THE PEOPLE OF THE PHILIPPINES,
respondents.

[23] Cf. Jose C. Vitug, Compendium of Civil Law and Jurisprudence, (1993 rev. ed.), p.218.

DAVIDE, JR., J.:

[24] Pages 12-15.

In this petition for certiorari under Rule 65 of the Rules of Court, the petitioners seek to set
aside, on ground of grave abuse of discretion amounting to lack of jurisdiction, the following
acts of the respondent Sandiganbayan in Criminal Case No. 22825: (a) the Resolution 1 of 25
October 1995 which denied the petitioners' Motion to Quash of 28 August 1995 and
Supplementary Motion to Quash of 7 October 1995; (b) the Order 2 of 10 November 1995
which denied the petitioners' motion for reconsideration; and (c) the Orders 3 of 10 November
1995 which entered a plea of not guilty for the petitioners and set pre-trial on 12 January
1996.
In Criminal Case No. 22825, the petitioners were charged with Arbitrary Detention, defined
and penalized by Article 124 of the Revised Penal Code (RPC), under an information dated 17
July 1995 (but filed on 28 July 1995), the accusatory portion of which reads as follows:
That on or about June 25, 1992, or sometime subsequent thereto, in Mandaluyong, Metro
Manila, Philippines and within the jurisdiction of this Honorable Court, the above-named
accused, Bayani Subido, Jr., being then a Commissioner of the Bureau of Immigration and
Deportation (BID) and accused Rene Parina, being then a BID Special Agent, while in the
performance of their official functions, and conspiring and confederating with each other, did
then and there wilfully, unlawfully and feloniously cause the issuance and implementation of a
warrant of arrest dated June 25, 1992 against James J. Maksimuk, said accused knowing fully
well that the BID Decision dated June 6, 1991, requiring Maksimuk's deportation has not as
yet become final and executory considering the pendency of a Motion for Reconsideration,
resulting in the detention of the latter for a period of forty-three (43) days and, thus, causing
him undue injury.
CONTRARY TO LAW. 4
The arraignment was originally set for 28 August 1995. 5
On 28 August 1995, however, the petitioners filed a Motion to Quash, 6 contending that in view
of the effectivity of R.A. No. 7975 7 on 6 May 1995, amending 4 of P.D. No. 1606, 8 the
Sandiganbayan had no jurisdiction over both the offense charged and the persons of the
accused. They argued that: (1) Arbitrary Detention did not fall within Chapter II, 2, Title VII of
the RPC, but within 1, Chapter 1, Title II (Crimes Against the Fundamental Laws of the
State), hence, not covered by R.A. No. 7975 and, therefore, the case should have been filed
with the Regional Trial Court (RTC) of Manila; (2) R.A. No. 7975 should be given prospective
application and at the time the case was filed, petitioner Subido was already a private person

[21] 72 SCRA 307, August 10, 1976.

since he was separated from the service on 28 February 1995; while petitioner Parina did not
hold a position corresponding to salary grade "27"; and (3) penal laws must be strictly
construed against the State.
In compliance with the order of the Sandiganbayan, the prosecution filed its Opposition to the
Motion to Quash 9 on 28 September 1995. It contended that it was clear from 4(b) of R.A.
No. 7975 that the Sandiganbayan had jurisdiction over both the offense charged and the
persons of the accused considering that "the basis of its jurisdiction . . . is the position of the
accused in the government service when the offense charged was committed and not the
nature of the offense charged, provided the said offense committed by the accused was in the
exercise of his duties and in relation to his office." The fact then that accused Subido was
already a private individual was of no moment.
In a Supplement to the Motion to Quash 10 filed on 9 October 1995, the petitioners further
asserted that: (1) the allegations in the information were vague; (2) under 1, Rule VIII of
Memorandum Order (MO) No. 04-92 (Rules of Procedure to Govern Deportation
Proceedings), the grant or denial of bail to an alien in a deportation proceeding was
discretionary upon the Commissioner, hence could not be subject to a charge of arbitrary
detention; (3) petitioner Subido was separated from the service before the effectivity of R.A.
No. 7975, hence retroactive application thereof would be prejudicial to him; and (4) at the time
the information was filed, petitioner Parina was not occupying a position corresponding to
salary grade "27" or higher, as prescribed by R.A. No. 6758. 11
In its Rejoinder 12 filed on 20 October 1995, the prosecution maintained that with 4 of MO No.
04-92, Salazar v. Achacoso, 13 and Gatchalian v.
CID, 14 the only instance when an alien facing deportation proceedings could be arrested by
virtue of a warrant of arrest was when the Commissioner issued the warrant to carry out a final
order of deportation, which was absent in this case due to the pendency of the motion for
reconsideration timely filed. It further reiterated that the basis of the Sandiganbayan's
jurisdiction over the case was the position of the accused when the crime was committed, not
when the information was filed; in any event, petitioner Subido's position as a Commissioner
of the Bureau of Immigration was classified even higher than grade "27" under the
Compensation and Classification Act of 1989.
In its Resolution 15 of 25 October 1995, the Sandiganbayan denied the petitioners' Motion to
Quash and the Supplement thereto, ruling:
1. [T]he jurisdiction of the Sandiganbayan remains not only over the specific offenses
enumerated in Sec. 4 of P.D. 1606 as Amended by R.A. 7975 but over offenses committed in
relation to their office, regardless of the penalty provided that the salary of the accused is at
Grade 27 under [R.A. 6758] or that he is occupying any of the position described in Sec. 4(a)e
of the law, which includes the position of Deputy Commissioner.
2. [A]t this time the position of the prosecution in response to this Court's misgivings stated in
its Order of August 28, 1995, appears to be that aliens may not be arrested except upon
execution of a deportation order, a matter which can be taken up at further proceedings after
the arraignment of the accused.
It likewise set arraignment on 10 November 1995. To abort arraignment, the petitioners filed
on 9 November 1995 a motion for reconsideration 16 and submitted that under the vast power
of the Commissioner of the Department of Immigration, he could authorize the arrest and
detention of an alien even though a deportation order had not yet become final, in light of the
preventive, not penal, nature of a deportation order. 17

On 10 November 1995, the Sandiganbayan issued an Order 18 denying the petitioners' motion
for reconsideration, and a second Order 19 entering a plea of not guilty in favor of the
petitioners since they objected to arraignment, setting pre-trial on 12 January 1996, and
making of record that arraignment was conducted with the reservation of the petitioners to
seek redress with this Court from the denial of their motion for reconsideration.
Hence, this special civil action, where the parties, in the main, reiterate the arguments they
raised before the Sandiganbayan. In due time, we resolved to give clue course to the petition
and required the parties to file their respective memoranda, which they subsequently complied
with.
The petition must be dismissed.
Sections 2 and 7 of R.A. No. 7975 pertinently provide as follows:
Sec. 2. Section 4 of [P.D. No. 1606] is hereby further amended to read as follows:
Sec. 4. Jurisdiction. The Sandiganbayan shall exercise original jurisdiction in all cases
involving:
a. Violations of Republic Act No. 3019, as amended, otherwise known as the Anti-Graft and
Corrupt Practices Act, Republic Act No. 1379, and Chapter II, Section 2, Title VII of the
Revised Penal Code, where one or more of the principal accused are officials occupying the
following positions in the government, whether in a permanent, acting or interim capacity, at
the time of the commission of the offense:
(1) Officials of the executive branch occupying the positions of regional director and higher,
otherwise classified as grade 27 and higher, of the Compensation and Position Classification
Act of 1989 (Republic Act No. 6758), specifically including:
xxx xxx xxx
(5) All other national and local officials classified as Grade "27" and higher under the
Compensation and Position Classification Act of 1989.
b. Other offenses or felonies committed by the public officials and employees mentioned in
subsection (a) of this section in relation to their office.
c. Civil and criminal cases filed pursuant to and in connection with Executive Order Nos. 1, 2,
14 and 14-A..
In cases where none of the principal accused are occupying positions corresponding to salary
grade "27" or higher, as prescribed in said Republic Act No. 6758, or PNP officers occupying
the rank of superintendent or higher, or their equivalent, exclusive jurisdiction thereof shall be
vested in the proper Regional Trial Court, Metropolitan Trial Court, Municipal Trial Court, and
Municipal Circuit Trial Court, as the case may be, pursuant to their respective jurisdiction as
provided in Batas Pambansa Blg. 129.
Sec. 7. Upon the effectivity of this Act, all criminal cases in which trial has not begun in the
Sandiganbayan shall be referred to the proper courts.
R.A. No. 7975 took effect on 16 May 1995, 20 or one year, ten months and twenty-one days
after the alleged commission of the crime charged in Criminal Case No. 22825 before the
Sandiganbayan. The provisions of 4 of P.D. No. 1606, as amended by E.O. No. 184, but prior
to their further amendment by R.A. No. 7975, are then the applicable provisions, 4 of P.D.
No. 1606 then pertinently provided as follows:
Sec. 4. Jurisdiction. The Sandiganbayan shall exercise:
(a) Exclusive appellate jurisdiction in all cases involving:

(1) violations of Republic Act No. 3019, as amended, otherwise known as the Anti-Graft and
practices Act, Republic Act No. 1379, and Chapter II, Section 2, Title VII of the Revised Penal
Code;
(2) other offenses or felonies committed by public officers and employees in relation to their
office, including those employed in government-owned or controlled corporations, whether
simple or complexed with other crimes, where the penalty prescribed by law is higher than
prision correccional or imprisonment for six (6) years, or a fine of P6,000.00: PROVIDED,
HOWEVER, that offenses or felonies mentioned in this paragraph where the penalty
prescribed by law does not exceed prision correccional or imprisonment of six (6) years or a
fine of P6,000.00 shall be tried by the proper Regional Trial Court, Metropolitan Trial Court,
Municipal Trial Court and Municipal Circuit Trial Court.
In Aguinaldo v. Domagas, 21 and subsequently in Sanchez v.
Demetriou, 22 Natividad v. Felix, 23 and Republic v. Asuncion, 24 we ruled that for the
Sandiganbayan to have exclusive original jurisdiction over offenses or felonies committed by
public officers or employees under the aforementioned 4(a)(2), it was not enough that the
penalty prescribed therefor was higher than prision correccional or imprisonment for six years,
or a fine of P6,000.00; it was likewise necessary that the offenses or felonies were committed
in relation to their office. 25
The information in Criminal Case No. 22825 before the Sandiganbayan charged the
petitioners with the crime of arbitrary detention which was committed "while in the
performance of their official functions," or, evidently, in relation to their office. As the detention
allegedly lasted for a period of 43 days, the prescribed penalty is prision mayor, 26 with a
duration of six years and one day to twelve years. Indisputably, the Sandiganbayan has
jurisdiction over the offense charged in Criminal Case No. 22825.
The petitioners, however, urge us to apply 4 of P.D. No. 1606, as amended by R.A. No. 7975,
the law in force at the time of the filing of the information in Criminal Case No. 22825. They
submit that under the new law, the Sandiganbayan has no jurisdiction over the offense
charged and their persons because at the time of the filing of the information, petitioner
Subido was already a private individual, while the classification of petitioner Parina's position
was lower than grade "27."
We are not persuaded. The petitioners overlook the fact that for purposes of 4 of P.D. No.
1606, as amended, the reckoning point is the time of the commission of the crime. This is
plain from the last clause of the opening sentence of paragraph (a), 4 of P.D. No. 1606, as
further amended by R.A. No. 7975.
Petitioner Subido never denied the respondents' claim that as "commissioner of Immigration
and Deportation [now Bureau of Immigration] at the time of the commission of the crime [he
was] classified as having a position even higher than grade 27." 27 Both parties are, however,
agreed that at such time petitioner Parina was holding a position with a classification much
lower than salary grade "27." There can, therefore, be no doubt that the Sandiganbayan had
jurisdiction over the crime allegedly committed by Subido.
That petitioner Parina held a position with a salary grade of less than "27" at the time of the
commission of the alleged arbitrary detention is of no moment. He is prosecuted as a coconspirator of petitioner Subido, a principal accused, who held a position higher than grade
"27." The following provision of 4 of P.D. No. 1606, as amended by R.A. No. 7975, then
applies:

In cases where none of the principal accused are occupying the positions corresponding to
salary grade "27" or higher, as prescribed in the said Republic Act No. 6758 . . . exclusive
jurisdiction therefor shall be vested in the proper Regional Trial Court, Metropolitan Trial Court,
Municipal Trial Court, and Municipal Circuit Trial Court, as the case may be, pursuant to their
respective jurisdiction as provided in Batas Pambansa Blg. 129.
Finally, the petitioners' invocation of the prohibition against the retroactivity of penal laws is
misplaced. Simply put, R.A. No. 7975 is not a penal law. Penal laws or statutes are those acts
of the Legislature which prohibit certain acts and establish penalties for their violation; 28 or
those that define crimes, treat of their nature, and provide for their punishment. 29 R.A. No.
7975, in further amending P.D. No. 1606 as regards the Sandiganbayan's jurisdiction, mode of
appeal, and other procedural matters, is clearly a procedural law, i.e., one which prescribes
rules and forms of procedure of enforcing rights or obtaining redress for their invasion, or
those which refer to rules of procedure by which courts applying laws of all kinds can properly
administer justice. 30 Moreover, the petitioners even suggest that it is likewise a curative or
remedial statute: one which cures defects and adds to the means of enforcing existing
obligations. 31 As noted by the petitioners, previous to the enactment of R.A. No. 7975:
As before, not [sic] matter what kind of offense, so long as it is alleged that the crime is
committed in relation to the office of the public official, the Sandiganbayan had jurisdiction to
try and hear the case, such that in many cases accused persons even from the far away parts
of the country, Mindanao, Visayas and the northern parts of Luzon had to come personally to
Manila to attend and appear for cases filed against them, considering that the Sandiganbayan
has its office/court in Manila.
The said R.A. No. 7975 changed this lamentable situation. For no as so provided in the said
law, there ha[s] been a modification that benefits [the] accused . . . in the sense that now
where none of the principal accused are occupying positions corresponding to salary grade
"27" or higher as prescribed by Republic Act No. 6758 . . . exclusive jurisdiction there shall be
vested now in the proper Regional Trial and Metropolitan Trial Court and Municipal Circuit Trial
Court, as the case may be . . . 32
All told, as a procedural and curative statute, R.A. No. 7975 may validly be given retroactive
effect, there being no impairment of contractual or vested rights. 33
WHEREFORE, the instant petition is DISMISSED, and the questioned resolution and orders
of the respondent Sandiganbayan are AFFIRMED.
Costs against the petitioners.
SO ORDERED.
Narvasa, C.J., Melo, Francisco and Panganiban, JJ., concur.
Footnotes
1 Original Record (OR), vol. 1, 69; Rollo, 16. Per Garchitorena, P.J., Balajadia and ChicoNazario, JJ.
2 Id., 86; Id., 17.
3 Id., 87-88; Id., 18-19.
4 OR, vol. 1, 1-2, Rollo, 20-21.

5 OR, vol. 1, 32.

6 Id., 35-37; Rollo, 22-24.
7 Entitled "An Act of Strengthen the Functional and Structural Organization of the
Sandiganbayan, Amending for that Purpose Presidential Decree No. 1606, as Amended."
8 Entitled "Revising Presidential Decree No. 1486 Creating a Special Court to be Known as
'Sandiganbayan' and for Other Purposes."
9 OR, vol. 1, 57-58; Rollo, 25-26.
10 Id., 61-64; Id., 27-30.
11 Compensation and Classification Act of 1989.
12 OR, vol. 1, 65-68; Rollo, 31-34.
13 182 SCRA 155 [1990].
14 197 SCRA 853 [1991].
15 Supra note 1.
16 OR, vol. 1, 77-82; Rollo, 35-40.
17 Citing Mahler v. Eby, 264 U.S. 32, U.S. v. De los Santos, 33 Phil. 397, [1916]; Kessler v.
Stracker, 307 U.S. 22, Murdock v. Clark, 53 F 2d. 15.
18 Supra note 2.
19 Supra note 3.
20 8 thereof provides that the Act "shall effect fifteen (15) days following its publication in the
Official Gazette or in two national newspaper of general circulation." It was published in the 21

April 1995 issues of the MALAYA and The PHILIPPINE JOURNAL, and in the 17 July 1995
issue of the Official Gazette.
21 G.R. No. 98452, En Banc Resolution, 26 September 1991.
22 227 SCRA 627 [1993].
23 229 SCRA 680 [1994].
24 231 SCRA 211 [1994].
25 See People v. Magallanes, 249 SCRA 212, 220-221 [1995].
26 Article 124(3), Revised Penal Code.
27 Rejoinder to the Comment/Opposition to the Motion to Quash, Rollo, 31; Comment to the
instant petition, Id., 31.
28 Lorenzo v. Posadas, 64 Phil. 353, 367, [1937].
29 Hernandez v. Albano, 19 SCRA 95, 102 [1967], note 13, citing 82 C.J.S., 922.
30 RUBEN E. AGPALO, STATUTORY CONSTRUCTION 268, [2d. 1990] (hereinafter
AGPALO).
31 See AGPALO, at 270-271.
32 Petitioners' Memorandum, 6; Rollo, 115 et. seq.
33 See AGPALO, at 268-272.