L-5162
Petitioner contends that Commissioner Ocampo acted in a manner contrary to the ruling of the Supreme
Court when he allowed the re-submission of the evidence of the applicant, instead of requiring her to
present her evidence de novo, over the objection of the petitioner. For this reason, petitioner contends, the
decision of Commissioner Ocampo should be set aside and rendered without effect.
The interpretation placed on the above ruling of this Court by Commissioner Ocampo is indeed erroneous,
as it fails to grasp its real import and significance. The rationale of the rule is none other than to make the
Commission, or any of the Commissioners who may be authorized for this purpose, to try the case or,
receive the evidence itself, as the law requires, so that it may have the necessary opportunity for
observation and appreciation of the evidence to enable it to reach an accurate and intelligent conclusion.
Mere re-submission of the evidence already presented would not meet this compelling objective, the only
exception being when the opposing parties agree to such re-submission. This is a privilege that can
exercise or waive in the use of their discretion. Inasmuch as Commissioner Ocampo has not observed the
directive contained in the decision adverted to and it appearing that this decision has been concurred in by
the other two Commissioners, we are of the opinion that the respondent Commission has committed an
abuse of discretion in overruling the petitioner to the re-submission of the evidence presented by the
applicant before Attorney Aspillera.
We notice, however, that the incident relative to the resubmission of the evidence of the application took
place in connection only with the hearing set by the Commission for the purpose of determining if said
applicant could be given a provisional or authority to continue operating her 10-ton ice plant in Lipa City
pending hearing and final determination of the case. The hearing was set at the express instance of the
applicant in view of the attitude of the oppositor in asking for an indefinite postponement of the hearing on
the merits. The Commission found that the applicant had made considerable investment to acquire and
install her 10-ton ice plant in the city of Lipa and that there was an urgent need for ice not only by the
people of that city but also of the towns of Cuenca, Alitagtag and Ibaan, which condition had existed and
continued to exist since the original decision in this case had been rendered, for which reasons the
Commission found sufficient warrant the issuance of a provisional permit. In so granting such provisional
permit, the Commission partly said: "If the best interests and convenience of the public are to be
subserved, applicant should be granted a provisional permit, to continue operating her plant while this case
is being litigated. To order the closing down of applicant's plant in the face of the evidence showing that the
public needs her service would be a disservice to the public. This provisional authority should be granted
because the public's need for the service is urgent and the hearing and final determination of this case will
necessarily take time."
We are of the opinion that while the evidence presented by the applicant has been admitted in violation of
the directive of this Court, however, such evidence may serve as justification, if the Commission so finds it,
to warrant the issuance of a provisional permit. There is nothing in the law which prohibits the Commission
from receiving any pertinent evidence for the purpose of acting on a petition for the provisional permit. The
law is silent as to the procedure to be followed with regard to provisional permit. The law even empowers
the Commission to act, without hearing, on certain matters of public interest, "subject to established
limitations and exceptions and saving provisions, to the contrary" (section 17, Com. Act 146, as amended).
There being no express prohibition in the law, nor any provision to the contrary, we hold that the resubmitted evidence may serve as basis for the issuance of a provisional permit to the applicant.
A case in point Peck vs. Public Utilities Commission, 170 N.E. 364. In this case, certificates 82 and 83, for
interstate bus transportation between Toledo and Sylvania, Ohio, were owned by the Black Hawk Lines,
Inc., and such company was conducting operations thereunder. Upon the application of certain creditors, a
receiver was appointed. Later, Michigan-Ohio Bus Lines, Inc., filed an application for an extension of its
certificate No 84 to cover the same route theretofore operated on under certificates 82 and 83 by the Black
Hawk Lines, Inc. The Commission, without notice to the receiver or to the Black Hawks Lines, Inc., issued
an order granting temporarily an extension of certificate No. 847 to operate over what had theretofore
been routes 82 and 83. On appeal, the grant of this temporary permit was assigned as error. The Supreme
Court of Ohio justified the action of the Commission saying on this point as follows:
Believing in good faith that the public living along the line of this route was without transportation
service, that the transportation company then holding the certificate serving such territory did not
provide the service required or the particular kind of equipment necessary to furnish such service,
and that the public was practically without transportation, we cannot find that such temporary order,
issued as an emergency measure, violated the letter or spirit of section 614-87, General Code.
(Peck vs. Public Utilities Commission, 170 N.E. 366).
As regards the contention of petitioner that Public Service Commission has no power to grant temporary or
provisional permit under the law, it suffices for us to state that the Commission has such power when the
purpose of the permit is to meet an urgent public necessity (Javellana vs. La Paz Ice Plant and Cold
Storage Co., 64 Phil., 893; Ablaza Transportation Co., Inc., vs. Pampanga Bus Inc., 88 Phil., 412).
Wherefore, the petition is denied with costs against the petitioner.
G.R. No. L-3629
ERROR I. That section 3 prohibits a hearing before any person other than a Commissioner in
contested cases; consequently, the delegation made by the Commission to Attorney Aspillera is
illegal and contrary to law.
ERROR II. That the decision is not supported by evidence to warrant the Grant of the certificate
to applicant-respondent Belen Cabrera.
We shall address ourselves to the first assigned error because the determination of the same disposes of
this appeal. The legal point raised in this assignment of error was also raised before the Commission. At the
beginning of the hearing before Attorney Aspillera, counsel for oppositors, Silva, now petitioner, asked that
the hearing be had before one of the Commissioners because it was a contested case. When his petition
was overruled, he made it of record that his continuing "with the hearing of this case shall not be
understood as a waiver of our objection" (t. s. n., p. 3). It is therefore clear that petitioner is not raising
this issue here for the first time.
While petitioner Silva contends that the delegation made by the Commission to Attorney Aspillera to take
the testimony of witnesses was illegal and contrary to the provisions of section 3 of the Public Service Act
as amended by Republic Act No. 178, respondent equally claims that said delegation is perfectly proper and
legal. It will be remembered that the delegation to receive testimony was made under the provisions of
section 32 of the Public Service Act (Com. Act No. 146). Said section reads as follows:
SEC. 32. The Commission may, in any investigation or hearing, by its order in writing, cause the
depositions of witnesses residing within or without the Philippines to be taken in the manner
prescribed by the Code of Civil Procedure. The Commission may also, by proper order, commission
any of the attorneys of the Commission or chiefs of division to receive evidence, and it may likewise
commission any clerk the court of first instance of justice of the Peace of the Philippines to take the
testimony of the witnesses any case pending before the Commission where such witnesses reside in
places distant from Manila and it would be inconvenient and expensive for them to appear
personally before the Commission. It shall be the duty of the clerk of the Court of First Instance or
justice of the peace so commissioned to designate promptly a date or dates for the taking of such
evidence, giving timely notice to the parties, and on such date to proceed to take the evidence,
reducing it to writing. After the evidence has been taken, the justice of the peace shall forthwith
certify to the correctness of the testimony of the witnesses and forward it to the Commission. It
shall be the duty of the respective parties to furnish stenographers for taking and transcribing the
testimony taken. In case there was no stenographers available, the testimony shall be taken in
long-hand by such person as the justice of the peace may designate. For the convenience of the
parties the Commission may also commission any other person to take the evidence in the same
manner.
For purpose of reference we are also reproducing the pertinent portion of section 3 of the same Act as
amended by Republic Act No. 178, relied upon by the petitioner:
All the powers herein vested upon the Commission shall be considered vested upon any of the
Commissioner, acting either individually or jointly as hereinafter provided. The Commissioners shall
equitably divide among themselves all pending cases and those that may hereafter be submitted to
the Commission, in such manner and from as they determine, and shall proceed to hear and
determine the cases assigned to each; Provided, however, That (1) all contested cases, (2) all cases
involving the fixing of rates, and (3) all petitions for reconsideration of orders or decisions shall be
heard by the Commission in banc, and the affirmative vote of at least two Commissioner shall be
necessary for the promulgation of a decision or a non-interlocutory order: And, provided, further,
That in cases (1) and (2) the Commission may delegate the reception of the evidence to one of the
Commissioners, who shall report to the Commission in banc, the evidence so received by him to
enable it to render its decision. (Underlining is ours)
After examining the law, particularly the language used in section 3 and 32, above-quoted, we agree with
the petitioner that the delegation made to Attorney Aspillera especially considering the manner in which he
received the evidence, was contrary to the provisions of the public Service Act.
The law (sec. 3) is clear that in a contested case like the present, only the Commission in banc is
authorized to conduct the hearing, although said Commission may delegate the reception of the evidence
to one of the Commissioners who shall report to the Commission in banc, the evidence so received by him.
Under Commonwealth Act No. 146 before it was amended by Republic Act No. 178, the Public Service
Commission only of a Public Service Commissioner and a deputy Commissioner. The Deputy Commissioner
acted only on matters delegated to him by the Public Service Commissioner, and in case of the latter's
absence, illness or incapacity, he acted in his stead. The Public Service Commissioner alone heard and
disposed of all cases, contested and non-contested. There could therefore be no hearing or decision in
banc. The Legislature in promulgating Commonwealth Act 146 evidently believed that one Commissioner,
either the Public Service Commissioner or his deputy if properly commissioned, was sufficient to hear and
decide even contested cases and cases involving the fixing of rates. Under said Commonwealth Act 146
before amendment, particularly section 32 thereof, the Commission besides authorizing the taking of
depositions and the testimonies of the witnesses by clerk of courts of first instance and justice of the peace
in the provinces, also authorized the reception of evidence by the Commission's attorneys and chiefs of
divisions. Then came Republic Act 178 amending sections 2 and 3 of Commonwealth Act 146 making the
Commission to consist of one Public Service Commissioners and two Associate Public Service Commissioner
under the second section, and under section 3, as already seen from the reproduction of said section,
requiring that all contested cases involving the fixing of rates, he heard and decided by the three
Commissioners in banc although the reception of evidence may be delegated to one of the Commissioners
alone. The inference is obvious. In contested cases like present, the Legislature did not wish to entrust the
holding of a hearing and the reception of evidence to anyone but the three Commissioners acting in banc or
one of them when properly authorized.
It is urged on the part of the respondent that the order of delegation in favor of Atty. Aspillera "was a mere
authority `to take the testimony of witnesses in the above-entitled case', which in fact is in the form of a
deposition and not a reception of evidence, much less a hearing" (p. 9, brief for respondent), and so does
not violate section 3. An examination of the record does not support this contention. What Atty. Aspillera
did was to represent the Commission, act as a sort of Commissioner, conduct hearings, receive evidence,
oral and documentary, and pass upon petitions and objections as they came up in the course of said
hearing. He even addressed questions to the witnesses. He passed upon the competency and admissibility
of exhibits and admitted them. In the transcript of the stenographic notes, Atty. Aspillera is repeatedly
referred to as the "Commission" and the proceedings had before him on different dates as "hearings". (t. s.
n. pp. 1, 3, 52, 62, 86, 90.) After the submission of the evidence Atty. Aspillera declared the "Case
submitted". (t. s. n. p. 227.) It is obvious that the evidence received by Atty. Aspillera were not mere
depositions or testimonies, and that his actuation that of a mere official like a justice of the peace receiving
a deposition under the provisions of Rule 18 of the Rules of Court. The role played by Atty. Aspillera was
rather that of a Commissioner under Rule 34 wherein he acted as a representative of the Commission that
made the delegation to him, passed upon petitions and objections during the trial, either overruling or
sustaining the same and ordered witnesses to answer if the objection to the question was overruled, and
then making his findings and report to the body that commissioned him.
Respondent cites the case of Abel G. Flores, applicant vs. A. L. Ammen Transportation Co., Inc., oppositor,
case No. 27141 of the Public Service Commission wherein the same point of the legality of a delegation to
take testimony was involved. The oppositor in that case believing that the Commission exceeded its
jurisdiction in making the delegation, brought the case to this Supreme Court under G.R. No. L-1637 but its
petition for certiorari was dismissed for lack of merit. From this, respondent infers that even in contested
cases the reception of evidence may be delegated to a person other than one of the Commissioners. We
have examined that case and we find that the authority given there was not to receive evidence but to take
a deposition and that the person delegated was a justice of the peace. We quote a portion of the order of
Associate Commissioner Gabriel P. Prieto in that case:
Es verdad que el articulo 3 de la Ley claramente dispone que en los asuntos contenciosos y en que
envuelven la fijacion de tarifas la Comision solo puede delegar la recepcion de lads pruebas a
cualquiera de sus Comisionados. Pero tambien es cierto, que la deposicion no una delegacion de la
recepcion de las pruebas, porque al funcionario que la toma, la ley no le concede las facultades del
tribunal que ha ordenado dicha deposicion. En efecto, la Regla 18 de los Reglamentos que regula
esta actuacion, no autoriza al funcionario que toma la deposicion para resolver las cuestiones que
surgen o se suscitan durante su actuacion; no le faculta para hacer sus conclusiones de hecho o de
derecho; ni le permite, siquiera, rendir informe o report de todo lo actuado. Su unica ogligacion es
certificar la declaracion tal como ha sido prestada por el deponente. El que toma la deposicion no es
como el arbitro o comisionado de que habla la Regla 34 de los Reglamentos, que actua por
delegacion y obra en representacion del tribunal que le ha nombrado.
It will readily be noticed from the portion of the order above-quoted that Commissioner Prieto admits that
under section 3 as amended, in contested cases and cases involving the fixing of rates, the Commission
may delegate the reception of evidence only to one of the Commissioners and to no one else.
The respondent also calls our attention to the case of Cebu Transit Co. Inc., vs. Jereza, (58 Phil., 760),
wherein this court held that the Commission was authorized to designate Commissioners for the purpose of
receiving evidence, and that the law did not contain any prohibition. That case is inapplicable for at that
time in the year 1933 when the case was decided, Republic Act 178 had not yet been promulgated, said
Act having passed only in 1947.
In conclusion, we hold that under the provisions of section 3 of the Public Service Act as amended by
Republic Act 178, the reception of evidence in a contested case may be delegated only to one of the
Commissioners and to no one else, it being understood that such reception of evidence consists in
conducting hearings, receiving evidence, oral and documentary, passing upon the relevancy and
competency of the same, ruling upon petitions and objections that come up in course of the hearings, and
receiving and rejecting evidence in accordance with said rulings. However, under section 32, of the same
Act, even in contested cases or cases involving the fixing of rates, any attorney of chief of division of the
Commission, a clerk of court of Courts of First Instance, or a Justice of the Peace, may be authorized to
take depositions or receive the testimonies of witnesses, provided that the same is done under provisions
of Rule 18 of the Rules of Court.
We realize that our present ruling will greatly handicap the Public Service Commission and slow down its
tempo in the disposal of contested cases and cases involving the fixing of rates, especially where the
witnesses reside in the provinces; but where the law is clear, neither this court nor the commission may on
grounds of convenience, expediency or prompt dispatch of cases, disregard the law or circumvent the
same. The remedy lies with the Legislature if it could be convinced of the necessity of amending the law,
and persuaded to approve a suitable amendment.
Finding that the delegation of the reception of evidence in this case as well as the exercise of the authority
so given, are in violation of section 3 of the Public Service Act as amended, we set aside the order of
delegation of July 14, 1949, and declare all the proceedings had thereunder to be null and void. Setting
aside the decision appealed from, let this case be returned to the Public Service Commission so that
evidence may be submitted by the parties in a hearings before the Commission in banc of before any of the
Commissioners if properly authorized, unless of course, said parties agree at said hearing or hearings to resubmit the evidence already presented and taken down, with such modifications and under such conditions
as they may agree upon, including such other evidence which they may wish to present. There is no
pronouncement as to costs. So ordered.
G.R. No. L-22301
Forthwith, the fiscal announced that he was "willing to submit the same for decision." Counsel for the
accused on his part presented four (4) exhibits consisting of his appointment "as secret agent of the Hon.
Feliciano Leviste," then Governor of Batangas, dated June 2, 1962;1 another document likewise issued by
Gov. Leviste also addressed to the accused directing him to proceed to Manila, Pasay and Quezon City on a
confidential mission;2 the oath of office of the accused as such secret agent,3 a certificate dated March 11,
1963, to the effect that the accused "is a secret agent" of Gov. Leviste. 4 Counsel for the accused then
stated that with the presentation of the above exhibits he was "willing to submit the case on the question
of whether or not a secret agent duly appointed and qualified as such of the provincial governor is exempt
from the requirement of having a license of firearm." The exhibits were admitted and the parties were
given time to file their respective memoranda.1wph1.t
Thereafter on November 27, 1963, the lower court rendered a decision convicting the accused "of the crime
of illegal possession of firearms and sentenced to an indeterminate penalty of from one year and one day
to two years and to pay the costs. The firearm and ammunition confiscated from him are forfeited in favor
of the Government."
The only question being one of law, the appeal was taken to this Court. The decision must be affirmed.
The law is explicit that except as thereafter specifically allowed, "it shall be unlawful for any person to . . .
possess any firearm, detached parts of firearms or ammunition therefor, or any instrument or implement
used or intended to be used in the manufacture of firearms, parts of firearms, or ammunition." 5 The next
section provides that "firearms and ammunition regularly and lawfully issued to officers, soldiers, sailors, or
marines [of the Armed Forces of the Philippines], the Philippine Constabulary, guards in the employment of
the Bureau of Prisons, municipal police, provincial governors, lieutenant governors, provincial treasurers,
municipal treasurers, municipal mayors, and guards of provincial prisoners and jails," are not covered
"when such firearms are in possession of such officials and public servants for use in the performance of
their official duties."6
The law cannot be any clearer. No provision is made for a secret agent. As such he is not exempt. Our task
is equally clear. The first and fundamental duty of courts is to apply the law. "Construction and
interpretation come only after it has been demonstrated that application is impossible or inadequate
without them."7 The conviction of the accused must stand. It cannot be set aside.
Accused however would rely on People v. Macarandang,8 where a secret agent was acquitted on appeal on
the assumption that the appointment "of the accused as a secret agent to assist in the maintenance of
peace and order campaigns and detection of crimes, sufficiently put him within the category of a "peace
officer" equivalent even to a member of the municipal police expressly covered by section 879." Such
reliance is misplaced. It is not within the power of this Court to set aside the clear and explicit mandate of
a statutory provision. To the extent therefore that this decision conflicts with what was held in People v.
Macarandang, it no longer speaks with authority.
Wherefore, the judgment appealed from is affirmed.
G.R. Nos. 24116-17
FERNANDO, J.:
In two separate actions, plaintiff-appellant Cebu Portland Cement Company sought to test the validity of
the distraint and thereafter the sale at public auction by the principal defendant-appellee, Municipality of
Naga, Cebu, of 100,000 bags of cement for the purpose of satisfying its alleged deficiency in the payment
of the municipal license tax for 1960, municipal license tax for 1961 as well as the penalty, all in the total
sum of P204,300.00. The lower court rendered a joint decision sustaining the validity of the action taken by
defendant-appellee Municipality of Naga. The case is now before us on appeal. We affirm.
According to the appealed decision: "From all the evidence, mostly documentary, adduced during the
hearing the following facts have been established. The efforts of the defendant Treasurer to collect from the
plaintiff the municipal license tax imposed by Amended Ordinance No. 21. Series of 1959 on cement
factories located within the Municipality of Naga, Cebu, have met with rebuff time and again. The demands
made on the taxpayer ... have not been entirely successful. Finally, the defendant Treasurer decided on
June 26, 1961 to avail of the Civil remedies provided for under Section 2304 of the Revised Administrative
Code and gave the plaintiff a period of ten days from receipt thereof within which to settle the account,
computed as follows ...: Deficiency Municipal License Tax for 1960 P80,250.00; Municipal License Tax for
1961 P90,000.00; and 20% Penalty P34,050.00, stating in exasperation, "This is our last recourse as
we had exhausted all efforts for an amicable solution of our problem." "1
It was further shown: "On July 6, 1961, at 11:00 A.M., the defendant Treasurer notified the Plant Manager
of the plaintiff that he was "distraining 100,000 bags of Apo cement in satisfaction of your delinquency in
municipal license taxes in the total amount of P204,300.00" ... This notice was received by the acting
officer in charge of the plaintiff's plant, Vicente T. Garaygay, according to his own admission. At first, he
was not in accord with the said letter, asking the defendant Treasurer for time to study the same, but in the
afternoon he [acknowledged the] distraint ..." 2
As was noted in the decision, the defendant Treasurer in turn "signed the receipt for goods, articles or
effects seized under authority of Section 2304 of the Revised Administrative Code, certifying that he has
constructively distrained on July 6, 1961 from the Cebu Portland Cement Company at its plant at Tina-an,
Naga, Cebu, 100,000 bags of Apo cement in tanks, and that "the said articles or goods will be sold at public
auction to the highest bidder on July 27, 1961, and the proceeds thereof will be utilized in part satisfaction
of the account of the said company in municipal licenses and penalties in the total amount of P204,300.00
due the Municipality of Naga Province of Cebu" ..."3
The lower court likewise found as a fact that on the same day, July 6, 1961, the municipal treasurer posted
the notice of sale to the effect that pursuant to the provisions of Section 2305 of the Revised Administrative
Code, he would sell at public auction for cash to the highest bidder at the main entrance of the municipal
building of the Municipality of Naga, Province of Cebu, Philippines on the 27th day of July, 1961, at 9
o'clock in the morning, the property seized and distrained or levied upon from the Cebu Portland Cement
Company in satisfaction of the municipal license taxes and penalties in the amount of P204,300.00,
specifying that what was to be sold was 100,000 bags of Apo cement.4 No sale, as thus announced, was
held on July 27, 1961. It was likewise stated in the appealed decision that there was stipulation by the
parties to this effect: "1. The auction sale took place on January 30, 1962, ..."5
In this appeal from the above joint decision, plaintiff-appellant Cebu Portland Cement Company upholds the
view that the distraint of the 100,000 bags of cement as well as the sale at public auction thereafter made
ran counter to the law. As earlier noted, we do not see it that way.
1. On the validity of the distraint In the first two errors assigned, plaintiff-appellant submits as illegal the
distraint of 100,000 bags of cement made on July 6, 1961. Its contention is premised on the fact that in
the letter of defendant-appellee dated June 26, 1961, requiring plaintiff-appellant to settle its account of
P204,300.00, it was given a period of 10 days from receipt within which it could pay, failure to do so being
the occasion for the distraint of its property. It is now alleged that the 10-day period of grace was not
allowed to lapse, the distraint having taken place on July 6, 1961.
It suffices to answer such a contention by referring to the explicit language of the law. According to the
Revised Administrative Code: "The remedy by distraint shall proceed as follows: Upon the failure of the
person owing any municipal tax or revenue to pay the same, at the time required, the municipal treasurer
may seize and distrain any personal property belonging to such person or any property subject to the tax
lien, in sufficient quantity to satisfy the tax or charge in question, together with any increment thereto
incident to delinquency, and the expenses of the distraint."6
The clear and explicit language of the law leaves no room for doubt. The municipal treasurer "may seize
and distrain any personal property" of the individual or entity subject to the tax upon failure "to pay the
same, at the time required ..." There was such a failure on the part of plaintiff-appellant to pay the
municipal tax at the time required. The power of the municipal treasurer in accordance with the above
provision therefore came into play.1wph1.t
Whatever might have been set forth in the letter of the municipal treasurer could not change or amend the
law it has to be enforced as written. That was what the lower court did. What was done then cannot be
rightfully looked upon as a failure to abide by what the statutory provision requires. Time and time again, it
has been repeatedly declared by this Court that where the law speaks in clear and categorical language,
there is no room for interpretation. There is only room for application. That was what occurred in this case. 7
2. On the validity of the auction sale The validity of the auction sale held on January 30, 1962 is
challenged in the next two errors assigned as allegedly committed by the lower court. Plaintiff-appellant's
argument is predicated on the fact that it was not until January 16, 1962 that it was notified that the public
auction sale was to take place on January 29, 1962. It is its view that under the Revised Administrative
Code8 the sale of the distrained property cannot take place "less than twenty days after notice to the owner
or possessor of the property [distrained] ... and the publication or posting of such notice."
Why such a contention could not prosper is explained clearly by the lower court in the appealed decision.
Thus: "With respect to the claim that the auction sale held on January 30, 1962 pursuant to the distraint
was null and void for being contrary to law because not more than twenty days have elapsed from the date
of notice, it is believed that the defendant Municipality of Naga and Municipal Treasurer of Naga have
substantially complied with the requirements provided for by Section 2305 of the Revised Administrative
Code. From the time that the plaintiff was first notified of the distraint on July 6, 1961 up to the date of the
sale on January 30, 1962, certainly, more than twenty days have elapsed. If the sale did not take place, as
advertised, on July 27, 1961, but only on January 30, 1962, it was due to the requests for deferment made
by the plaintiff which unduly delayed the proceedings for collection of the tax, and the said taxpayer should
not be allowed now to complain that the required period has not yet elapsed when the intention of the tax
collector was already well-publicized for many months."9 The reasonableness of the above observation of
the lower court cannot be disputed. Under the circumstances, the allegation that there was no observance
of the twenty-day period hardly carries conviction.
The point is further made that the auction sale took place not on January 29, 1962, as stated in the notice
of sale, but on the next day, January 30, 1962. According to plaintiff-appellant: "On this score alone, the
sale ..., was illegal as it was not made on the time stated in the notice." 10
There is no basis to sustain such a plea as the finding of the lower court is otherwise. Thus: "On January
16, 1962, the defendant Treasurer informed Garaygay that he would cause the readvertisement for sale at
public auction of the 100,000 bags of Apo cement which were under constructive distraint ... On January
19, 1962, the said defendant issued the corresponding notice of sale, which fixed January 30, 1962, at
10:00 A.M., as the date of sale, posting the said notice in public places and delivering copies thereof to the
interested parties in the previous notice, ... Ultimately, the bidding was conducted on that day, January 30,
1962, with the representatives of the Provincial Auditor and Provincial Treasurer present. Only two bidders
submitted sealed bids. After the bidding, the defendant-treasurer informed the plaintiff that an award was
given to the winning bidder, ..." 11
This being a direct appeal to us, plaintiff-appellant must be deemed to have accepted as conclusive what
the lower court found as established by the evidence, only questions of law being brought to us for review.
It is the established rule that when a party appeals directly to this Court, he is deemed to have waived the
right to dispute any finding of fact made by the court below. 12
WHEREFORE, the decision of the lower court dated 23, 1964, is affirmed in toto. With costs against
plaintiff-appellant.1wph1.t
G.R. No. L-26712-16
UNITED CHRISTIAN MISSIONARY SOCIETY, UNITED CHURCH BOARD FOR WORLD MINISTERS,
BOARD OF FOREIGN MISSION OF THE REFORMED CHURCH IN AMERICA, BOARD OF MISSION OF
THE EVANGELICAL UNITED PRESBYTERIAN CHURCH, COMMISSION OF ECUMENICAL MISSION
ON RELATIONS OF THE UNITED PRESBYTERIAN CHURCH, petitioners,
vs.
SOCIAL SECURITY COMMISSION and SOCIAL SECURITY SYSTEM, respondents.
Sedfrey A. Ordoez for petitioners.
Office of the Solicitor General Antonio P. Barredo, Assistant Solicitor General Felicisimo R. Rosete and
Solicitor Buenaventura J. Guerrero for respondents.
TEEHANKEE, J.:
In this appeal from an order of the Social Security Commission, we uphold the Commission's Order
dismissing the petition before it, on the ground that in the absence of an express provision in the Social
Security Act1 vesting in the Commission the power to condone penalties, it has no legal authority to
condone, waive or relinquish the penalty for late premium remittances mandatorily imposed under the
Social Security Act.
The five petitioners originally filed on November 20, 1964 separate petitions with respondent Commission,
contesting the social security coverage of American missionaries who perform religious missionary work in
the Philippines under specific employment contracts with petitioners. After several hearings, however,
petitioners commendably desisted from further contesting said coverage, manifesting that they had
adopted a policy of cooperation with the Philippine authorities in its program of social amelioration, with
which they are in complete accord. They instead filed their consolidated amended petition dated May 7,
1966, praying for condonation of assessed penalties against them for delayed social security premium
remittances in the aggregate amount of P69,446.42 for the period from September, 1958 to September,
1963.
In support of their request for condonation, petitioners alleged that they had labored under the impression
that as international organizations, they were not subject to coverage under the Philippine Social Security
System, but upon advice by certain Social Security System officials, they paid to the System in October,
1963, the total amount of P81,341.80, representing their back premiums for the period from September,
1958 to September, 1963. They further claimed that the penalties assessed against them appear to be
inequitable, citing several resolutions of respondent Commission which in the past allegedly permitted
condonation of such penalties.
On May 25, 1966, respondent System filed a Motion to Dismiss on the ground that "the Social Security
Commission has no power or authority to condone penalties for late premium remittance, to which
petitioners filed their opposition of June 15, 1966, and in turn, respondent filed its reply thereto of June 22,
1966.
Respondent Commission set the Motion to Dismiss for hearing and oral argument on July 20, 1966. At the
hearing, petitioners' counsel made no appearance but submitted their Memorandum in lieu of oral
argument. Upon petition of the System's Counsel, the Commission gave the parties a further period of
fifteen days to submit their Memorandum consolidating their arguments, after which the motion would be
deemed submitted for decision. Petitioners stood on their original memorandum, and respondent System
filed its memorandum on August 4, 1966.
On September 22, 1966, respondent Commission issued its Order dismissing the petition, as follows:
Considering all of the foregoing, this Commission finds, and so holds, that in the absence of an
express provision in the Social Security Act vesting in the Commission the power to condone
penalties, it cannot legally do so. The policy enunciated in Commission Resolution No. 536, series of
1964, cited by the parties, in their respective pleadings, has been reiterated in Commission
Resolution No. 878, dated August 18, 1966, wherein the Commission adopting the recommendation
of the Committee on Legal Matters and Legislation of the Social Security Commission ruled that it
"has no power to condone, waive or relinquish the penalties for late premium remittances which
may be imposed under the Social Security Act."
WHEREFORE, the petition is hereby dismissed and petitioners are directed to pay the respondent
System, within thirty (30) days from receipt of this Order, the amount of P69,446.42 representing
the penalties payable by them, broken down as follows:
P5,253.53
7,891.74
12,353.75
33,019.36
10,928.04
TOTAL
P
69,446.42
Upon failure of the petitioners to comply with this Order within the period specified herein, a warrant
shall be issued to the Sheriff of the Province of Rizal to levy and sell so much of the property of the
petitioners as may be necessary to satisfy the aforestated liability of the petitioners to the System.
This Court is thus confronted on appeal with this question of first impression as to whether or not
respondent Commission erred in ruling that it has no authority under the Social Security Act to condone the
penalty prescribed by law for late premium remittances.
We find no error in the Commission's action.
1. The plain text and intent of the pertinent provisions of the Social Security Act clearly rule out petitioners'
posture that the respondent Commission should assume, as against the mandatory imposition of the 3%
penalty per month for late payment of premium remittances, the discretionary authority of condoning,
waiving or relinquishing such penalty.
The pertinent portion of Section 22 (a) of the Social Security Act peremptorily provides that:
SEC 22. Remittance of premiums. (a) The contributions imposed in the preceding sections shall
be remitted to the System within the first seven days of each calendar month following the month
for which they are applicable or within such time as the Commission may prescribe. "Every
employer required to deduct and to remit such contribution shall be liable for their payment and if
any contribution is not paid to the system, as herein prescribed, he shall pay besides the
contribution a penalty thereon of three per centum per month from the date the contribution falls
due until paid . . .2
No discretion or alternative is granted respondent Commission in the enforcement of the law's mandate
that the employer who fails to comply with his legal obligation to remit the premiums to the System within
the prescribed period shall pay a penalty of three 3% per month. The prescribed penalty is evidently of a
punitive character, provided by the legislature to assure that employers do not take lightly the State's
exercise of the police power in the implementation of the Republic's declared policy "to develop, establish
gradually and perfect a social security system which shall be suitable to the needs of the people throughout
the Philippines and (to) provide protection to employers against the hazards of disability, sickness, old age
and death."3 In this concept, good faith or bad faith is rendered irrelevant, since the law makes no
distinction between an employer who professes good reasons for delaying the remittance of premiums and
another who deliberately disregards the legal duty imposed upon him to make such remittance. From the
moment the remittance of premiums due is delayed, the penalty immediately attaches to the delayed
premium payments by force of law.
2. Petitioners contend that in the exercise of the respondent Commission's power of direction and control
over the system, as provided in Section 3 of the Act, it does have the authority to condone the penalty for
late payment under Section 4 (1), whereby it is empowered to "perform such other acts as it may deem
appropriate for the proper enforcement of this Act." The law does not bear out this contention. Section 4 of
the Social Security Act precisely enumerates the powers of the Commission. Nowhere from said powers of
the Commission may it be shown that the Commission is granted expressly or by implication the authority
to condone penalties imposed by the Act.
3. Moreover, the funds contributed to the System by compulsion of law have already been held by us to be
"funds belonging to the members which are merely held in trust by the Government." 4 Being a mere
trustee of the funds of the System which actually belong to the members, respondent Commission cannot
legally perform any acts affecting the same, including condonation of penalties, that would diminish the
property rights of the owners and beneficiaries of such funds without an express or specific authority
therefor.
4. Where the language of the law is clear and the intent of the legislature is equally plain, there is no room
for interpretation and construction of the statute. The Court is therefore bound to uphold respondent
Commission's refusal to arrogate unto itself the authority to condone penalties for late payment of social
security premiums, for otherwise we would be sanctioning the Commission's reading into the law
discretionary powers that are not actually provided therein, and hindering and defeating the plain purpose
and intent of the legislature.
5. Petitioners cite fourteen instances in the past wherein respondent Commission had granted condonation
of penalties on delayed premium payments. They charge the Commission with grave abuse of discretion in
not having uniformly applied to their cases its former policy of granting condonation of penalties. They
invoke more compelling considerations of equity in their cases, in that they are non-profit religious
organizations who minister to the spiritual needs of the Filipino people, and that their delay in the payment
of their premiums was not of a contumacious or deliberate defiance of the law but was prompted by a wellfounded belief that the Social Security Act did not apply to their missionaries.
The past instances of alleged condonation granted by the Commission are not, however, before the Court,
and the unilateral conclusion asserted by petitioners that the Commission had granted such condonations
would be of no avail, without a review of the pertinent records of said cases. Nevertheless, assuming such
conclusion to be correct, the Commission, in its appealed Order of September 22, 1966 makes of record
that since its Resolution No. 536, series of 1964, which it reiterated in another resolution dated August 18,
1966, it had definitely taken the legal stand, pursuant to the recommendation of its Committee on Legal
Matters and Legislation, that in the absence of an express provision in the Social Security Act vesting in the
Commission the power to condone penalties, it "has no power to condone, waive or relinquish the penalties
for late premium remittances which may be imposed under the Social Security Act."
6. The Commission cannot be faulted for this correct legal position. Granting that it had erred in the past in
granting condonation of penalties without legal authority, the Court has held time and again that "it is a
well-known rule that erroneous application and enforcement of the law by public officers do not block
subsequent correct application of the statute and that the Government is never estopped by mistake or
error on the part of its agents."5 Petitioners' lack of intent to deliberately violate the law may be conceded,
and was borne out by their later withdrawal in May, 1966 of their original petitions in November, 1964
contesting their social security coverage. The point, however, is that they followed the wrong procedure in
questioning the applicability of the Social Security Act to them, in that they failed for five years to pay the
premiums prescribed by law and thus incurred the 3% penalty thereon per month mandatorily imposed by
law for late payment. The proper procedure would have been to pay the premiums and then contest their
liability therefor, thereby preventing the penalty from attaching. This would have been the prudent course,
considering that the Act provides in Section 22 (b) thereof that the premiums which the employer refuses
or neglects to pay may be collected by the System in the same manner as taxes under the National
Internal Revenue Code, and that at the time they instituted their petitions in 1964 contesting their
coverage, the Court had already ruled in effect against their contest three years earlier, when it held
in Roman Catholic Archbishop vs. Social Security Commission6 that the legislature had clearly intended to
include charitable and religious institutions and other non-profit institutions, such as petitioners, within the
scope and coverage of the Social Security Act.
7. No grave abuse of discretion was committed, therefore, by the Commission in issuing its Order
dismissing the petition for condonation of penalties for late payment of premiums, as claimed by petitioners
in their second and last error assigned. Petitioners were duly heard by the Commission and were given due
opportunity to adduce all their arguments, as in fact they filed their Memorandum in lieu of oral argument
and waived the presentation of an additional memorandum. The mere fact that there was a pending appeal
in the Court of Appeals from an identical ruling of the Commission in an earlier case as to its lack of
authority to condone penalties does not mean, as petitioners contend, that the Commission was thereby
shorn of its authority and discretion to dismiss their petition on the same legal ground.7 The Commission's
action has thus paved the way for a final ruling of the Court on the matter.
ACCORDINGLY, the order appealed from is hereby affirmed, without pronouncement as to costs.
G.R. No. L-26419 October 16, 1970
GEDEON G. QUIJANO and EUGENIA T. QUIJANO, petitioners-appellants,
vs.
THE DEVELOPMENT BANK OF THE PHILIPPINES and THE EX-OFICIO SHERIFF OF MISAMIS
OCCIDENTAL, respondents-appellees.
J. Alaric P. Acosta for petitioners-appellant.
Esperanza Valenzoga for respondents-appellees.
BARREDO, J.:.
Appeal from the decision of the Court of First Instance of Misamis Occidental in its Special Civil Case No.
2519, dismissing the petition for mandamus with prayer for a writ of preliminary injunction filed therein by
the herein petitioners-appellants Gedeon G. Quijano and Eugenio T. Quijano to compel the herein
respondent-appellee Development Bank of the Philippines to accept said petitioners-appellants' back pay
certificate payment of their loan from the said appellee Bank, and to restrain the herein respondentappellee ex-oficio sheriff of the province of Misamis Occidental from proceeding with the scheduled
foreclosure sale of the real properties the above-named appellant spouses had mortgaged with the
Development Bank of the Philippines to secure the loan aforementioned.
The said appealed decision was based on the following:
STIPULATION OF FACTS.
The undersigned parties, thru counsels, hereby submit the foregoing stipulation of facts, to
wit:
I. That the petitioners filed an application for an urban estate loan with the Rehabilitation
Finance Corporation (RFC), predecessor-in-interest of the herein respondent-bank, in the
amount of P19,500.00;
II. That the petitioners' urban real estate loan was approved per RFC Board Resolution No.
2533 on April 30, 1953;
III. That the mortgage contract was executed by the petitioners in favor of the respondentbank on March 23, 1954;
IV. That the said loan of P19,500.00 was to be received by the petitioners in several releases,
subject among others, to the following conditions:.
"(1) That the amount of P4,200.00 shall be released only after:.
"(a) the execution and registration of the mortgage contract;
"(b) the presentation of a duly approved building permit;
"(c) the construction has been started and the value of the work
done amounted to P6,500.00;.
"(d) the submission of the certificate of title covering Psu136173, free form any encumbrance and
Upon these facts and the submission of the parties that the only issue is whether or not the obligation of
the petitioners was subsisting at the time of the approval of Republic Act No. 897, the Amendatory Act of
Julie 20, 1953 to Republic Act 304, the original back pay law, the trial court dismissed the petition, as
already stated, and directed respondent sheriff to proceed and continue with the public auction sale of the
property mortgaged in accordance with the foreclosure application of respondent Development Bank of the
Philippines after due notice to petitioners. In their appeal, petitioners' sole assignment of error is that: "The
trial court erred in declaring that the loan of the petitioners-appellants was not subsisting when Republic
Act No. 897 was enacted on June 20, 1953."
The appeal has no merit.
The pertinent portions of the controlling provisions of the aforementioned Back Pay Law, as amended by
Republic Act No. 897 on June 20, 1953,1 read as follows:.
SEC. 2. The Treasurer of the Philippines shall, upon application of all persons specified in
section one hereof and within one year from the approval of this Amendatory Act, and under
such rules and regulations as may be promulgated by the Secretary of Finance, acknowledge
and file requests for the recognition of the right to the Salaries and wages as provided in
section one hereof and notice of such acknowledgment shall be issued to the applicant which
shall state the total amount of such salaries or wages due the applicant, and certify that it
shall be redeemed by the Government of the Philippines within ten years from the date of
their issuance without interests: Provided, That upon application and subject to such rules
and regulations as may be approved by the Secretary of Finance a certificate of indebtedness
may be issued by the Treasurer of the Philippines covering the whole or a part of the total
salaries and wages the right to which has been duly acknowledged and recognized, provided
that the face value of such certificate of indebtedness shall not exceed the amount that the
applicant may need for the payment of (1) obligations subsisting at the time of the approval
of this Amendatory Act for which the applicant may directly be liable to the government or to
any of its branches or instrumentalities, or the corporations owned or controlled by the
Government, or to any citizen of the Philippines, or to any association or corporation
organized under the laws of the Philippines, who may be willing to accept the same for such
settlement; ...
It is indeed settled that under the above provisions, the Government or any of its agencies does not have
any discretion in the acceptance of back pay certificates, 2 when they are used by the applicants or original
holders themselves for the settlement of any of the obligations or liabilities specifically enumerated in the
law.3 It is equally clear, however, that the same provisions expressly require that the obligations for
which certificates of indebtedness may be accepted as payments of must be subsisting at the time of the
approval of Republic Act No. 897; hence when, as in the instant case, such back pay certificates are offered
in payment to a government-owned corporation of an obligation thereto which was not subsisting at the
time of the enactment of said amendatory Act on June 20, 1953, which corporation may not, legally be
compelled to accept the certificates.
It is true that appellants' application for an urban real estate loan was approved by appellee bank on April
80, 1953. It appears, however, that appellants did not avail of it until much later, as in fact, they executed
the mortgage contract only on March 23, 1954, and furthermore, that the release of the amount of the said
loan of P19,500.00 was to be made in installments and subject to compliance with certain conditions by
said appellants. Under these circumstances, Our ruling in the case of Rodriguez vs. Development Bank of
the Philippines 4 is controlling.
In that case, Rodriguez obtained a loan from the said Development Bank of the Philippines to be received
by him in several releases and to be paid later in installments, under the terms and conditions specified in
the loan agreement. Pursuant to said agreement, Rodriguez received the first release in the sum of
P5,000.00 on May 27, 1953, while the subsequent releases covering the P9,000.00 balance of the loan
were all availed of and received by him later than June, 1953. Later, Rodriguez paid the installments as
they fell due. When a balance of about P10,000.00 remained unpaid, Rodriguez offered to pay the said
outstanding balance of the loan with his back pay certificate. The Bank refused at first to accept the said
tender of payment in certificate, and when it accepted the same later, it limited its acceptance only to the
amount of P5,000.00 representing the portion of the loan released before the passage of Republic Act No.
897, although the amount of the back pay certificate offered by Rodriguez was more than sufficient to
cover the total unpaid balance of the loan. So, Rodriguez instituted an action for mandamus in the Court of
First Instance of Davao to compel the Bank to accept his back pay certificate in payment of his whole
outstanding obligation or, in other words, even for the portions of the loan corresponding to the releases
made after June 20, 1953. This action was dismissed by the trial court and upon appeal to this Court, the
dismissal was affirmed upon the following rationale:.
It can not be said that appellant became indebted to the Bank for the total amount of
P14,000.00 from the date of the agreement. The releases of the balance of the agreed loan
were made dependent on certain conditions (see additional conditions mentioned in
paragraph 4 of the stipulation of facts, supra) among which is the availability of funds. Noncompliance with any of these conditions will not entitle the appellant to the release of the
balance of the agreed loan and conversely, will not entitle the bank to hold the appellant
liable for the unreleased amounts. Consequently, we hold, as did the trial court, that:.
"... the amounts released in July, 1953 and thereafter cannot be considered as
obligations subsisting in June, 1953. The defendant may be compelled to
accept a back pay certificate in payment of obligations subsisting when the
Amendatory Act was approved (Sec. 2, Republic Act 897).t.
hqw Republic Act 897 was approved on June 20, 1953. The defendant may
not be compelled to accept plaintiff's back pay certificate in payment of the
amounts released after June 20, 1953."
The case of Sabelino v. RFC (G.R. No. L-11790, Sept. 30, 1958) relied upon by appellant is
irrelevant, as the mortgage indebtedness sought to be paid with appellee's back pay
certificate therein, appears to have subsisted prior to the approval of Republic Act No.
897. ...
Herein appellants' situation is even worse than that of Rodriguez. Here appellants actually availed of their
approved loan only about nine (9) months after the enactment of Republic Act 897 and the corresponding
releases thereof were received by appellants only after the execution of the mortgage contract on March
23, 1954. Undoubtedly, notwithstanding the approval by the appellee Development Bank of the Philippines
(RFC) of appellants' loan application on April 30, 1953, appellants did not thereby incur any obligation to
pay the same; only after the corresponding amounts were released to appellants after March 23, 1954 did
such obligation attach; and it cannot, therefore, be said that the said loan was an obligation subsisting at
the time of the approval of Republic Act No. 897 on June 20, 1953.
It may be truly said, as contended by appellants, that when their application for the loan was approved by
the appellee Bank on April 30, 1953, an agreement was perfected between them and said Bank, but it
should be noted that under such agreement the only enforceable obligation that was created was that of
the Bank to grant the loan applied for, whereas the obligation of appellants to pay the same could not have
arisen until after the amount of the loan has been actually released to them; and said release was even
subject to their compliance with certain conditions specified in the mortgage contract executed after the
approval already of Republic Act 897. Appellants' appeal that a more liberal construction of the law would
enable "many crippled or disabled veterans, or their wives and orphans, or those who had in one way or
another unselfishly sacrificed or contributed to the cause of the last war" to take advantage of their back
pay certificates, does deserve sympathy, for indeed, among the avowed purposes of the said law are:
"First, to serve as a source of financial aid to needy veterans, like crippled or disabled veterans, and to
their wives and orphans. Secondly, to give recognition to the sacrifices of those who joined the last war,
and particularly to those who have given their all for the cause of the last war." (Congressional Record No.
61, 2nd Congress, 4th Regular Session, May 6, 1953, page 74, as quoted in Florentino, et al. vs. PNB, 98
Phil. 959, 961-963).t.hqw On the other hand, however, We cannot see any room for interpretation or
construction in the clear and unambiguous language of the above-quoted provision of law. This Court has
steadfastly adhered to the doctrine that its first and fundamental duty is the application of the law
according to its express terms, interpretation being called for only when such literal application is
impossible.5 No process of interpretation or construction need be resorted to here a provision of law
peremptorily calls for application. Where a requirement or condition is made in explicit and unambiguous
terms, no discretion is left to the judiciary. It must see to it that its mandate is obeyed. 6 Thus, even before
the amendment of the Back Pay Law, when said law limited the applicability of back pay certificates to
"obligations subsisting at the time of the approval of this Act," this Court has ruled that obligations
contracted after its enactment on June 18, 1948 cannot come within its purview.
Since the debt of appellants was contracted on November 24, 1948, they could not validly
seek to discharge it by application of their back pay certificate under Republic Act 304, on
June 18, 1948, because that Act, in terms, limited any such application to "obligations
subsisting at the time of the approval of this Act". (Sec. 2)7
WHEREFORE, the judgment of the trial court is affirmed. No costs.
G.R. No. L-28463 May 31, 1971
REPUBLIC FLOUR MILLS INC., petitioner,
vs.
THE COMMISSIONER OF CUSTOMS and THE COURT OF TAX APPEALS, respondents.
Agrava & Agrava for petitioner.
Office of the Solicitor General Antonio P. Barredo, Assistant Solicitor General Pacifico P. de Castro and
Solicitor Santiago M. Kapunan for respondents.
FERNANDO, J.:
It is a novel question that this petition for the review of a decision of respondent Court of Tax Appeals
presents. Petitioner Republic Flour Mills, Inc. would have this Court construe the words "products of the
Philippines" found in Section 2802 of the Tariff and Custom Code 1 as excluding bran (ipa) and pollard
(darak) on the ground that, coming as they do from wheat grain which is imported in the Philippines, they
are merely waste and not the products, which is the flour produced. 2 That way, it would not be liable at all
for the wharfage dues assessed under such section by respondent Commission of Customs. It elevated the
matter to respondent Court, as the construction it would place on the aforesaid section appears too
strained and far remote from the ordinary meaning of the text, not to mention the policy of the Act. We
affirm.
In the decision of respondent Court now sought to be reviewed, after stating that what was before it was
an appeal from a decision of the Commissioner of Customs holding petitioner liable for the sum of
P7,948.00 as wharfage due the facts were set forth as follows: "Petitioner, Republic Flour Mills, Inc., is a
domestic corporation, primarily engaged in the manufacture of wheat flour, and produces pollard (darak)
and bran (ipa) in the process of milling. During the period from December, 1963 to July, 1964, inclusive,
petitioner exported Pollard and/or bran which was loaded from lighters alongside vessels engaged in
foreign trade while anchored near the breakwater The respondent assessed the petitioner by way of
wharfage dues on the said exportations in the sum of P7,948.00, which assessment was paid by petitioner
under protest." 3 The only issue, in the opinion of respondent Court, is whether or not such collection of
wharfage dues was in accordance with law. The main contention before respondent Court of petitioner was
"that inasmuch as no government or private wharves or government facilities [were] utilized in exporting
the pollard and/or bran, the collection of wharfage dues is contrary to law." 4 On the other hand, the stand
of respondent Commissioner of Customs was that petitioner was liable for wharfage dues "upon receipt or
discharge of the exported goods by a vessel engaged in foreign trade regardless of the non-use of
government-owned or private wharves." 5 Respondent Court of Tax Appeals sustained the action taken by
the Commissioner of Customs under the appropriate provision of the Tariff and Customs Code, relying on
our decision in Procter & Gamble Phil. Manufacturing Corp. v. Commissioner of Customs. 6 It did not feel
called upon to answer the question now before us as, in its opinion, petitioner only called its attention to it
for the first time in its memorandum.
Hence, this petition for review. The sole error assigned by petitioner is that it should not, under its
construction of the Act, be liable for wharfage dues on its exportation of bran and pollard as they are not
"products of the Philippines", coming as they did from wheat grain which were imported from abroad, and
being "merely parts of the wheat grain milled by Petitioner to produce flour which had become waste." 7 We
find, to repeat, such contention unpersuasive and affirm the decision of respondent Court of Tax Appeals.
1. The language of Section 2802 appears to be quite explicit: "There shall be levied, collected and paid on
all articles imported or brought into the Philippines, and on products of the Philippines ... exported from the
Philippines, a charge of two pesos per gross metric ton as a fee for wharfage ...." One category refers to
what is imported. The other mentions products of the Philippines that are exported. Even without undue
scrutiny, it does appear quite obvious that as long as the goods are produced in the country, they fall within
the terms of the above section. Petitioner appeared to have entertained such a nation. In its petition for
review before respondent Court, it categorically asserted: "Petitioner is primarily engaged in the
manufacture of flour from wheat grain. In the process of milling the wheat grain into flour, petitioner also
produces 'bran' and 'pollard' which it exports abroad." 8 It does take a certain amount of hair-splitting to
exclude from its operation what petitioner calls "waste" resulting from the production of flour processed
from the wheat grain in petitioner's flour mills in the Philippines. It is always timely to remember that, as
stressed by Justice Moreland: "The first and fundamental duty of courts, in our judgment, is to apply the
law. Construction and interpretation come only after it has been demonstrated that application is
impossible or inadequate without them." 9 Petitioner ought to have been aware that deference to such a
doctrine precludes an affirmative response to its contention. The law is clear; it must be obeyed. It is as
simple, as that. 10
2. There is need of confining familiar language of a statute to its usual signification. While statutory
construction involves the exercise of choice, the temptation to roam at will and rely on one's predilections
as to what policy should prevail is to be resisted. The search must be for a reasonable interpretation. It is
best to keep in mind the reminder from Holmes that "there is no canon against using common sense in
construing laws as saying what obviously means." 11 To paraphrase Frankfurter, interpolation must be
eschewed but evisceration avoided. Certainly, the utmost effort should be exerted lest the interpretation
arrived at does violence to the statutory language in its total context. It would be then to ignore what has
been stressed time and time again as to limits of judicial freedom in the construction of statutes to accept
their view advanced by petitioner.
3. Then, again, there is the fundamental postulate in statutory construction requiring fidelity to the
legislative purpose. What Congress intended is not to be frustrates. Its objective must be carried out. Even
if there be doubt as to the meaning of the language employed, the interpretation should not be at war with
the end sought to be attained. No undue reflection is needed to show that if through an ingenious
argument, the scope of a statute may be contracted, the probability that other exceptions may be thought
of is not remote. If petitioner were to prevail, subsequent pleas motivated by the same desire to be
excluded from the operation of the Tariff and Customs Code would likewise be entitled to sympathetic
consideration. It is desirable then that the gates to such efforts at undue restriction of the coverage of the
Act be kept closed. Otherwise, the end result would be not respect for, but defiance of, a clear legislative
mandate. That kind of approach in statutory construction has never recommended itself. It does not
now. 12
WHEREFORE, the decision of respondent Court of Tax Appeals of November 27, 1967 is affirmed. With
costs against petitioner.
G.R. No. L-61236 January 31, 1984
NATIONAL FEDERATION OF LABOR and ZAMBOWOOD MONTHLY EMPLOYEES UNION, ITS
OFFICERS AND MEMBERS, petitioners,
vs.
THE HONORABLE CARLITO A. EISMA, LT. COL. JACOB CARUNCHO, COMMANDING OFFICER,
ZAMBOANGA DISTRICT COMMAND, PC, AFP, and ZAMBOANGA WOOD PRODUCTS, respondents.
Jose C. Espina and Potenciano Flores for petitioners.
The Solicitor General for public respondents.
Gaspar V. Tagalo for private respondent Zamboanga Wood Products.
FERNANDO, C.J.:
This Court is confronted once again with the question of whether or not it is a court or a labor arbiter that
can pass on a suit for damages filed by the employer, here private respondent Zamboanga Wood Products.
Respondent Judge Carlito A. Eisma 1 then of the Court of First Instance, now of the Regional Trial Court of
Zamboanga City, was of the view that it is a court and denied a motion to dismiss filed by petitioners
National Federation of labor and Zambowood Monthly Employees Union, its officers and members. It was
such an order dated July 20, 1982 that led to the filing of this certiorari and prohibition proceeding. In the
order assailed, it was required that the officers and members of petitioner union appear before the court to
show cause why a writ of preliminary injunction should not be issued against them and in the meanwhile
such persons as well as any other persons acting under their command and on their behalf were
"temporarily restrained and ordered to desist and refrain from further obstructing, impeding and impairing
plaintiff's use of its property and free ingress to or egress from plaintiff's Manufacturing Division facilities at
Lumbayao, Zamboanga City and on its road right of way leading to and from said plaintiff's facilities,
pending the determination of the litigation, and unless a contrary order is issued by this Court." 2
The record discloses that petitioner National Federation of Labor, on March 5, 1982, filed with the Ministry
of Labor and Employment, Labor Relations Division, Zamboanga City, a petition for direct certification as
the sole exclusive collective bargaining representative of the monthly paid employees of the respondent
Zamboanga Wood Products, Inc. at its manufacturing plant in Lumbayao, Zamboanga City. 3 Such
employees, on April 17, 1982 charged respondent firm before the same office of the Ministry of Labor for
underpayment of monthly living allowances. 4Then came, on May 3, 1982, from petitioner union, a notice
of strike against private respondent, alleging illegal termination of Dionisio Estioca, president of the said
local union; unfair labor practice, non-payment of living allowances; and "employment of oppressive alien
management personnel without proper permit. 5 It was followed by the union submitting the minutes of the
declaration of strike, "including the ninety (90) ballots, of which 79 voted for yes and three voted for
no." 6 The strike began on May 23, 1982. 7 On July 9, 1982, private respondent Zambowood filed a
complaint with respondent Judge against the officers and members of petitioners union, for "damages for
obstruction of private property with prayer for preliminary injunction and/or restraining order." 8 It was
alleged that defendants, now petitioners, blockaded the road leading to its manufacturing division, thus
preventing customers and suppliers free ingress to or egress from such premises. 9 Six days later, there
was a motion for the dismissal and for the dissolution of the restraining order and opposition to the
issuance of the writ of preliminary injunction filed by petitioners. It was contended that the acts complained
of were incidents of picketing by defendants then on strike against private respondent, and that therefore
the exclusive jurisdiction belongs to the Labor Arbiter pursuant to Batas Pambansa Blg. 227, not to a court
of first instance.10 There was, as noted earlier, a motion to dismiss, which was denied. Hence this petition
for certiorari.
Four days after such petition was filed, on August 3, 1982, this Court required respondents to answer and
set the plea for a preliminary injunction to be heard on Thursday, August 5, 1982. 11 After such hearing, a
temporary restraining order was issued, "directing respondent Judge and the commanding officer in
Zamboanga and his agents from enforcing the ex-parte order of injunction dated July 20, 1982; and to
restrain the respondent Judge from proceeding with the hearing of the until otherwise case effective as of
[that] date and continuing ordered by [the] Court. In the exercise of the right to peaceful picketing,
petitioner unions must abide strictly with Batas Pambansa Blg. 227, specifically Section 6 thereof,
amending Article 265 of the Labor Code, which now reads: '(e) No person engaged in picketing shall
commit any act of violence, coercion or intimidation or obstruct the free ingress to or egress from the
employer's premises for lawful purposes, or obstruct public thoroughfares.' " 12
On August 13, 1982, the answer of private respondent was filed sustaining the original jurisdiction of
respondent Judge and maintaining that the order complained of was not in excess of such jurisdiction, or
issued with grave abuse of discretion. Solicitor General Estelito P. Mendoza, 13 on the other hand, instead
of filing an answer, submitted a Manifestation in lieu thereof. He met squarely the issue of whether or not
respondent Judge had jurisdiction, and answered in the negative. He (i)ncluded that "the instant petition
has merit and should be given due course."
He traced the changes undergone by the Labor Code, citing at the same time the decisions issued by this
Court after each of such changes. As pointed out, the original wording of Article 217 vested the labor
arbiters with jurisdictional. 14 So it was applied by this Court in Garcia v. Martinez 15 and in Bengzon v.
Inciong. 16 On May 1, 1978, however, Presidential Decree No. 1367 was issued, amending Article 217, and
provided "that the Regional Directors shall not indorse and Labor Arbiters shall not entertain claims for
moral and other forms of damages." 17The ordinary courts were thus vested with jurisdiction to award
actual and moral damages in the case of illegal dismissal of employees. 18 That is not, as pointed out by
the Solicitor General, the end of the story, for on May 1, 1980, Presidential Decree No. 1691 was issued,
further amending Article 217, returning the original jurisdiction to the labor arbiters, thus enabling them to
decide "3. All money claims of workers, including those based on non-payment or underpayment of wages,
overtime compensation, separation pay and other benefits provided by law or appropriate agreement,
except claims for employees compensation, social security, medicare and maternity benefits; [and] (5) All
other claims arising from employer-employee relations unless expressly excluded by tills Code." 19 An
equally conclusive manifestation of the lack of jurisdiction of a court of first instance then, a regional trial
court now, is Batas Pambansa Blg. 130, amending Article 217 of the Labor Code. It took effect on August
21, 1981. Subparagraph 2, paragraph (a) is now worded thus: "(2) those that involve wages, hours of work
and other terms and conditions of employment." 20 This is to be compared with the former phraseology "(2)
unresolved issue in collective bargaining, including those that involve wages, hours of work and other terms
and conditions of employment." 21 It is to be noted that Batas Pambansa Blg. 130 made no change with
respect to the original and exclusive jurisdiction of Labor Arbiters with respect to money claims of workers
or claims for damages arising from employer-employee relations.
Nothing becomes clearer, therefore, than the meritorious character of this petition. certiorari and
prohibition lie, respondent Judge being devoid of jurisdiction to act on the matter.
1. Article 217 is to be applied the way it is worded. The exclusive original jurisdiction of a labor arbiter is
therein provided for explicitly. It means, it can only mean, that a court of first instance judge then, a
regional trial court judge now, certainly acts beyond the scope of the authority conferred on him by law
when he entertained the suit for damages, arising from picketing that accompanied a strike. That was
squarely within the express terms of the law. Any deviation cannot therefore be tolerated. So it has been
the constant ruling of this Court even prior to Lizarraga Hermanos v. Yap Tico, 22 a 1913 decision. The
ringing words of the ponencia of Justice Moreland still call for obedience. Thus, "The first and fundamental
duty of courts, in our judgment, is to apply the law. Construction and interpretation come only after it has
been demonstrated that application is impossible or inadequate without them." 23 It is so even after the
lapse of sixty years. 24
2. On the precise question at issue under the law as it now stands, this Court has spoken in three
decisions. They all reflect the utmost fidelity to the plain command of the law that it is a labor arbiter, not a
court, that ossesses original and exclusive jurisdiction to decide a claim for damages arising from picketing
or a strike. In Pepsi-Cola Bottling Co. v. Martinez, 25 the issue was set forth in the opening paragraph, in
the ponencia of Justice Escolin: "This petition for certiorari, prohibition and mandamus raises anew the
legal question often brought to this Court: Which tribunal has exclusive jurisdiction over an action filed by
an employee against his employer for recovery of unpaid salaries, separation benefits and damages the
court of general jurisdiction or the Labor Arbiter of the National Labor Relations Commission [NLRC]?" 26 It
was categorically held: "We rule that the Labor Arbiter has exclusive jurisdiction over the case." 27 Then
came this portion of the opinion: "Jurisdiction over the subject matter in a judicial proceeding is conferred
by the sovereign authority which organizes the court; and it is given only by law. Jurisdiction is never
presumed; it must be conferred by law in words that do not admit of doubt. Since the jurisdiction of courts
and judicial tribunals is derived exclusively from the statutes of the forum, the issue before us should be
resolved on the basis of the law or statute now in force. We find that law in presidential Decree 1691 which
took effect on May 1, 1980, Section 3 of which reads as follows: ... Article 217. Jurisdiction of Labor
Arbiters and the Commission. (a) The Labor Arbiters shall have the original and exclusive jurisdiction to
hear and decide the following cases involving all workers, whether agricultural or non-agricultural: ... 3. All
money claims of workers, including those based on nonpayment or underpayment of wages, overtime
compensation, separation pay and other benefits provided by law or appropriate agreement, except claims
for employees' compensation, social security, medicare and maternity benefits; 4. Cases involving
household services; and 5. All other claims arising from employer-employee relations, unless expressly
excluded by this Code." 28 That same month, two other cases were similarly decided, Ebon v. De
Guzman 29 and Aguda v. Vallejos. 30
3. It is regrettable that the ruling in the above three decisions, decided in March of 1982, was not followed
by private respondent when it filed the complaint for damages on July 9, 1982, more than four months
later. 31 On this point, reference may be made to our decision in National Federation of Labor, et al. v. The
Honorable Minister of Labor and Employment, 32 promulgated on September 15, 1983. In that case, the
question involved was the failure of the same private respondent, Zamboanga Wood Products, Inc., to
admit the striking petitioners, eighty-one in number, back to work after an order of Minister Blas F. Ople
certifying to the National Labor Relations Commission the labor dispute for compulsory arbitration pursuant
to Article 264 (g) of the Labor Code of the Philippines. It was noted in the first paragraph of our opinion in
that case: "On the face of it, it seems difficult to explain why private respondent would not comply with
such order considering that the request for compulsory arbitration came from it. It ignored this notification
by the presidents of the labor unions involved to its resident manager that the striking employees would lift
their picket line and start returning to work on August 20, 1982. Then, too, Minister Ople denied a partial
motion for reconsideration insofar as the return-to-work aspect is concerned which reads: 'We find no merit
in the said Motion for Reconsideration. The Labor code, as amended, specifically Article 264 (g), mandates
that whenever a labor dispute is certified by the Minister of Labor and Employment to the National Labor
Relations Commission for compulsory arbitration and a strike has already taken place at the time of
certification, "all striking employees shall immediately return to work and the employees shall immediately
resume operations and readmit all workers under the same terms and conditions prevailing before the
strike." ' " 33 No valid distinction can be made between the exercise of compulsory arbitration vested in the
Ministry of Labor and the jurisdiction of a labor arbiter to pass over claims for damages in the light of the
express provision of the Labor Code as set forth in Article 217. In both cases, it is the Ministry, not a court
of justice, that is vested by law with competence to act on the matter.
4. The issuance of Presidential Decree No. 1691 and the enactment of Batas Pambansa Blg. 130, made
clear that the exclusive and original jurisdiction for damages would once again be vested in labor arbiters.
It can be affirmed that even if they were not that explicit, history has vindicated the view that in the
appraisal of what was referred to by Philippine American Management & Financing Co., Inc. v. Management
& Supervisors Association of the Philippine-American Management & Financing Co., Inc. 34 as "the rather
thorny question as to where in labor matters the dividing line is to be drawn" 35 between the power lodged
in an administrative body and a court, the unmistakable trend has been to refer it to the former. Thus:
"Increasingly, this Court has been committed to the view that unless the law speaks clearly and
unequivocally, the choice should fall on [an administrative agency]." 36Certainly, the present Labor Code is
even more committed to the view that on policy grounds, and equally so in the interest of greater
promptness in the disposition of labor matters, a court is spared the often onerous task of determining
what essentially is a factual matter, namely, the damages that may be incurred by either labor or
management as a result of disputes or controversies arising from employer-employee relations.
WHEREFORE, the writ of certiorari is granted and the order of July 20, 1982, issued by respondent Judge,
is nullified and set aside. The writ of prohibition is likewise granted and respondent Judge, or whoever acts
in his behalf in the Regional Trial Court to which this case is assigned, is enjoin from taking any further
action on Civil Case No. 716 (2751), except for the purpose of dismissing it. The temporary restraining
order of August 5, 1982 is hereby made permanent.
G.R. No. L-25316 February 28, 1979
KAPISANAN NG MGA MANGGAGAWA SA MANILA RAILROAD COMPANY CREDIT UNION,
INC., petitioner-appellant,
vs.
MANILA RAILROAD COMPANY, respondent appellee.
Gregorio E. Fajardo for appellant.
Gregorio Baroque for appellee.
FERNANDO, J.:
In this mandamus petition dismissed by the lower court, petitioner-appellant would seek a reversal of such
decision relying on what it considered to be a right granted by Section 62 of the Republic Act No. 2023,
more specifically the first two paragraphs thereof: "... (1) A member of a cooperative may, notwithstanding
the provisions of existing laws, execute an agreement in favor of the co-operative authorizing his employer
to deduct from the salary or wages payable to him by the employer such amount as may be specified in the
agreement and to pay the amount so deducted to the co-operative in satisfaction of any debt or other
demand owing from the member to the co-operative. (2) Upon the exemption of such agreement the
employer shall if so required by the co-operative by a request in writing and so long as such debt or other
demand or any part of it remains unpaid, make the claimant and remit forth with the amount so deducted
to the co-operative." 1
To show that such is futile, the appealed decision, as quoted in the brief for petitioner-appellant, stated the
following: "Then petitioner contends that under the above provisions of Rep. Act 2023, the loans granted
by credit union to its members enjoy first priority in the payroll collection from the respondent's employees'
wages and salaries. As can be clearly seen, there is nothing in the provision of Rep. Act 2023 hereinabove
quoted which provides that obligation of laborers and employees payable to credit unions shall enjoy first
priority in the deduction from the employees' wages and salaries. The only effect of Rep. Act 2023 is to
compel the employer to deduct from the salaries or wages payable to members of the employees'
cooperative credit unions the employees' debts to the union and to pay the same to the credit union. In
other words, if Rep. Act 2023 had been enacted, the employer could not be compelled to act as the
collecting agent of the employees' credit union for the employees' debt to his credit union but to contend
that the debt of a member of the employees cooperative credit union as having first priority in the matter
of deduction, is to write something into the law which does not appear. In other words, the mandatory
character of Rep. Act 2023 is only to compel the employer to make the deduction of the employees' debt
from the latter's salary and turn this over to the employees' credit union but this mandatory character does
not convert the credit union's credit into a first priority credit. If the legislative intent in enacting pars. 1
and 2 of Sec. 62 of Rep. Act 2023 were to give first priority in the matter of payments to the obligations of
employees in favor of their credit unions, then, the law would have so expressly declared. Thus, the
express provisions of the New Civil Code, Arts. 2241, 2242 and 2244 show the legislative intent on
preference of credits. 2
Such an interpretation, as could be expected, found favor with the respondent-appellee, which, in its brief,
succinctly pointed out "that there is nothing in said provision from which it could be implied that it gives top
priority to obligations of the nature of that payable to petitioner, and that, therefore, respondent company,
in issuing the documents known as Exhibit "3" and Exhibit "P", which establish the order of priority of
payment out of the salaries of the employees of respondent-appellee, did not violate the above-quoted
Section 62 of Republic Act 2023. In promulgating Exhibit "3", [and] Exhibit "P" respondent, in effect,
implemented the said provision of law. 3
This petition being one for mandamus and the provision of law relied upon being clear on its face, it would
appear that no favorable action can be taken on this appeal. We affirm.
1. The applicable provision of Republic Act No. 2023 quoted earlier, speaks for itself. There is no ambiguity.
As thus worded, it was so applied. Petitioner-appellant cannot therefore raise any valid objection. For the
lower court to view it otherwise would have been to alter the law. That cannot be done by the judiciary.
That is a function that properly appertains to the legislative branch. As was pointed out in Gonzaga v.
Court of Appeals: 4 "It has been repeated time and time again that where the statutory norm speaks
unequivocally, there is nothing for the courts to do except to apply it. The law, leaving no doubt as to the
scope of its operation, must be obeyed. Our decisions have consistently born to that effect. 5.
2. Clearly, then, mandamus does not lie. Petitioner-appellant was unable to show a clear legal right. The
very law on which he would base his action fails to supply any basis for this petition. A more rigorous
analysis would have prevented him from instituting a a suit of this character. In J.R.S. Business Corporation
v. Montesa, 6 this Court held. "Man-damus is the proper remedy if it could be shown that there was neglect
on the part of a tribunal in the performance of an act, which specifically the law enjoins as a duty or an
unlawful exclusion of a party from the use and enjoyment of a right to which he is entitled. 7 The opinion
continued in this wise:"According to former Chief Justice Moran," only specific legal rights may be enforced
by mandamus if they are clear and certain. If the legal rights are of the petitioner are not well defined,
clear, and certain, the petition must be dismissed. In support of the above view, Viuda e Hijos de Crispulo
Zamora v. Wright was cited. As was there categorically stated: "This court has held that it is fundamental
that the duties to be enforced by mandamus must be those which are clear and enjoined by law or by
reason of official station, and that petitioner must have a clear, legal right to the thing and that it must be
the legal duty of the defendant to perform the required act.' As expressed by the then Justice Recto in a
subsequent opinion: "It is well establish that only specific legal rights are enforceable by mandamus, that
the right sought to be enforced must be certain and clear, and that the writ not issue in cases where the
right is doubtful." To the same effect is the formulation of such doctrine by former Justice Barrera: "Stated
otherwise, the writ never issues in doubtful cases. It neither confers powers nor imposes duties. It is simply
a command to exercise a power already possessed and to perform a duty already imposed." 8 So it has
been since then. 9 The latest reported case,Province. of Pangasinan v. Reparations Commission, 10 this
court speaking through Justice Concepcion Jr., reiterated such a well-settled doctrine: "It has also been
held that it is essential to the issuance of the writ of mandamus that the plaintiff should have a clear legal
right to the thing demanded, and it must be the imperative duty of the defendant to perform the act
required. It never issues in doubtful cases. 11
WHEREFORE, the appealed decision is affirmed. No pronouncement as to costs.
In 1968, the petitioner established a radio telegraph service in Sorsogon, Sorsogon. In 1971, another radio
telegraph service was put up in San Jose, Mindoro followed by another in Catarman, Samar in 1976. The
installation of radio telephone services started in 1971 in San Jose, Mindoro; then in Sorsogon, Sorsogon
and Catarman, Samar in 1983.
In a decision dated June 24, 1980 in NTC Case No. 80-08, private respondent Kayumanggi Radio Network
Incorporated was authorized by the public respondent to operate radio communications systems in
Catarman, Samar and in San Jose, Mindoro.
On December 14, 1983, the private respondent filed a complaint with the NTC alleging that the petitioner
was operating in Catarman, Samar and in San Jose, Mindoro without a certificate of public covenience and
necessity. The petitioner, on the other hand, counter-alleged that its telephone services in the places
subject of the complaint are covered by the legislative franchise recognized by both the public respondent
and its predecessor, the Public Service Commission. In its supplemental reply, the petitioner further stated
that it has been in operation in the questioned places long before private respondent Kayumanggi filed its
application to operate in the same places.
After conducting a hearing, NTC, in its decision dated August 22, 1984 ordered petitioner RCPI to
immediately cease or desist from the operation of its radio telephone services in Catarman Northern
Samar; San Jose, Occidental Mindoro; and Sorsogon, Sorsogon stating that under Executive Order No.
546, a certificate of public convenience and necessity is mandatory for the operation of communication
utilities and services including radio communications.
On September 4, 1984, the petitioner filed a motion for reconsideration which was denied in an order dated
September 12, 1984.
On October 1, 1984, the present petition was filed raising the issue of whether or not petitioner RCPI, a
grantee of a legislative franchise to operate a radio company, is required to secure a certificate of public
convenience and necessity before it can validly operate its radio stations including radio telephone services
in Catarman, Northern Samar; San Jose, Occidental Mindoro; and Sorsogon, Sorsogon.
The petitioner's main argument states that the abolition of the Public Service Commission under
Presidential Decree No. 1 and the creation of the National Telecommunications Commission under Executive
Order No. 546 to replace the defunct Public Service Commission did not affect sections 14 and 15 of the
Public Service Law (Commonwealth Act. No. 146, as amended).
The provisions of the Public Service Law pertinent to the petitioner's allegation are as follows:
Section 13. (a) the Commission shall have jurisdiction, supervision, and control over all
public services and their franchises, equipment and other properties, and in the exercise of
its authority, it shall have the necessary powers and the aid of public force: ...
Section 14. The following are exempted from the provisions of the preceding section:
xxx xxx xxx
(d) Radio companies except with respect to the fixing of rates;
xxx xxx xxx
Section 15. With the exception of those enumerated in the preceding section, no public
service shall operate in the Philippines without possessing a valid and subsisting certificate
from the Public Service Commission, known as "certificate of public convenience," or
"certificate of convenience and public necessity," as the case may be, to the effect that the
operation of said service and the authorization to do business will promote the public
interests in a proper and suitable manner. ...
We find no merit in the petitioner's contention.
Pursuant to Presidential Decree No. 1 dated September 23,1972, reorganizing the executive branch of the
National Government, the Public Service Commission was abolished and its functions were transferred to
three specialized regulatory boards, as follows: the Board of Transportation, the Board of Communications
and the Board of Power and Waterworks. The functions so transferred were still subject to the limitations
provided in sections 14 and 15 of the Public Service Law, as amended. With the enactment of Executive
Order No. 546 on July 23, 1979 implementing P.D. No.1, the Board of Communications and the
Telecommunications Control Bureau were abolished and their functions were transferred to the National
Telecommunications Commission (Sec. 19(d), Executive Order No. 546). Section 15 of said Executive Order
spells out the functions of the National Telecommunications Commission as follows:
Sec. 15. Functions of the Commission.-The Commission shall exercise the following functions:
a. Issue Certificate of Public Convenience for the operation of communications utilities and
services, radio communications petitions systems, wire or wireless telephone or telegraph
system, radio and television broadcasting system and other similar public utilities;
b. Establish, prescribe and regulate areas of operation of particular operators of public
service communications; and determine and prescribe charges or rates pertinent to the
operation of such public utility facilities and services except in cases where charges or rates
are established by international bodies or associations of which the Philippines is a
participating member or by bodies recognized by the Philippine Government as the proper
arbiter of such charges or rates;
c. Grant permits for the use of radio frequencies for wireless telephone and telegraph
systems and radio communication systems including amateur radio stations and radio and
television broadcasting systems;
d. Sub-allocate series of frequencies of bands allocated by the International
Telecommunications Union to the specific services;
e. Establish and prescribe rules, regulations, standards, specifications in all cases related to
the issued Certificate of Public Convenience and administer and enforce the same;
f. Coordinate and cooperate with government agencies and other entities concerned with any
aspect involving communications with a view to continuously improve the communications
service in the country;
g. Promulgate such rules and regulations, as public safety and interest may require, to
encourage a larger and more effective use of communications, radio and television
broadcasting facilities, and to maintain effective competition among private entities in these
activities whenever the Commission finds it reasonably feasible;
h. Supervise and inspect the operation of radio stations and telecommunications facilities;
i. Undertake the examination and licensing of radio operators;
j. Undertake, whenever necessary, the registration of radio transmitters and transceivers;
and
k. Perform such other functions as may be prescribed by law.
It is clear from the aforequoted provision that the exemption enjoyed by radio companies from the
jurisdiction of the Public Service Commission and the Board of Communications no longer exists because of
the changes effected by the Reorganization Law and implementing executive orders. The petitioner's claim
that its franchise cannot be affected by Executive Order No. 546 on the ground that it has long been in
operation since 1957 cannot be sustained.
A franchise started out as a "royal privilege or (a) branch of the King's prerogative, subsisting in the hands
of a subject." This definition was given by Finch, adopted by Blackstone, and accepted by every authority
since (State v. Twin Village Water Co., 98 Me 214, 56 A 763 (1903)). Today, a franchise, being merely a
privilege emanating from the sovereign power of the state and owing its existence to a grant, is subject to
regulation by the state itself by virtue of its police power through its administrative agencies. We ruled
in Pangasinan transportation Co., Inc. v. Public Service Commission (70 Phil. 221) that:
... statutes enacted for the regulation of public utilities, being a proper exercise by the State
of its police power, are applicable not only to those public utilities coming into existence after
its passage, but likewise to those already established and in operation ...
Executive Order No. 546, being an implementing measure of P.D. No. I insofar as it amends the Public
Service Law (CA No. 146, as amended) is applicable to the petitioner who must be bound by its provisions.
The petitioner cannot install and operate radio telephone services on the basis of its legislative franchise
alone.
The position of the petitioner that by the mere grant of its franchise under RA No. 2036 it can operate a
radio communications system anywhere within the Philippines is erroneous. Section 1 of said statute reads:
Section 1. Subject to the provisions of the Constitution, and to the provisions, not
inconsistent herewith, of Act Numbered Three thousand eight hundred and forty-six,
entitled.' An Act providing for the regulation of radio stations and radio communications in
the Philippine Islands, and for other purposes;' Commonwealth Act Numbered One hundred
forty-six, known as the Public Service Act, and their amendments, and other applicable
laws, there is hereby granted to the Radio Communications of the Philippines, its successors
or assigns, the right and privilege of constructing, installing, establishing and operating in
the Philippines, at such places as the said corporation may select and the Secretary of Public
Works and Communications may approve, radio stations for the reception and transmission
of wireless messages on radiotelegraphy and/or radiotelephone, including both coastal and
marine telecommunications, each station to consist of two radio apparatus comprising of a
receiving and sending radio apparatus. (Emphasis supplied).
Section 4(a) of the same Act further provides that:
Sec. 4(a). This franchise shall not take effect nor shall any powers thereunder be exercised
by the grantee until the Secretary of Public works and Communications shall have allotted to
the grantee the frequencies and wave lengths to be used, and issued to the grantee a license
for such case. (Emphasis supplied)
Thus, in the words of R.A. No. 2036 itself, approval of the then Secretary of Public Works and
Communications was a precondition before the petitioner could put up radio stations in areas where it
desires to operate. It has been repeated time and again that where the statutory norm speaks
unequivocally, there is nothing for the courts to do except to apply it. The law, leaving no doubt as to the
scope of its operation, must be obeyed. (Gonzaga v. Court of Appeals, 51 SCRA 381).
The records of the case do not show any grant of authority from the then Secretary of Public Works and
Communications before the petitioner installed the questioned radio telephone services in San Jose,
Mindoro in 1971. The same is true as regards the radio telephone services opened in Sorsogon, Sorsogon
and Catarman, Samar in 1983. No certificate of public convenience and necessity appears to have been
secured by the petitioner from the public respondent when such certificate,was required by the applicable
public utility regulations (See executive Order No. 546, sec. 15, supra.; Philippine Long Distance Telephone
Co. v. City of Davao, 15 SCRA 75; Olongapo Electric Light and Power Corp. v. National Power Corporation,
et al., G.R. No. L-24912, promulgated April 9, 1987.)
It was well within the powers of the public respondent to authorize the installation by the private
respondent network of radio communications systems in Catarman, Samar and San Jose, Mindoro. Under
the circumstances of this case, the mere fact that the petitioner possesses a franchise to put up and
operate a radio communications system in certain areas is not an insuperable obstacle to the public
respondent's issuing the proper certificate to an applicant desiring to extend the same services to those
areas. The Constitution mandates that a franchise cannot be exclusive in nature nor can a franchise be
granted except that it must be subject to amendment, alteration, or even repeal by the legislature when
the common good so requires. (Art. XII, sec. 11 of the 1986 Constitution). There is an express provision in
the petitioner's franchise which provides compliance with the above mandate R.A. 2036, sec. 15).
In view of the foregoing, we find no reason to disturb the public respondent's findings of fact, and
conclusions of law insofar as the private respondent was authorized to operate in Catarman, Samar and
San Jose, Mindoro. As a rule, the Commission's findings of fact, if supported by substantial evidence, are
conclusive upon this Court. We may modify or ignore them only when it clearly appears that there is no
evidence to support reasonably such a conclusion. (Halili v. Daplas, 14 SCRA 14). The petitioner has not
shown why the private respondent should be denied the authority to operate its services in Samar and
Mindoro. It has not overcome the presumption that when the public respondent disturbed the petitioner's
monopoly in certain areas, it was doing so pursuant to public interest and the common good.
WHEREFORE, the challenged order of the public respondent dated August 22, 1984 is hereby AFFIRMED.
The petition is dismissed for lack of merit.
SO ORDERED.
G.R. No. 122165. February 17, 1997]
ALA MODE GARMENTS, INC., petitioner, vs. NATIONAL LABOR RELATIONS COMMISSION, (First
Division) LUCRECIA V. GABA and ELSA I. MELARPES, respondents.
DECISION
HERMOSISIMA, JR., J.:
Before us is a petition for certiorari seeking to annul and set aside the Resolutions[1] of the National Labor
Relations Commission (NLRC.) dated November 24, 1994 and June 26, 1995 in an illegal dismissal case.[2]
The following facts are not disputed:
Petitioner is a garments manufacturer and exporter. Private respondents were both employees of petitioner
until May 7, 1993 when, upon reporting for work, private respondents were disallowed from entering
petitioner's premises.
Private respondents were first hired as sewers. They were, in time, promoted to the position of line leaders,
each tasked with supervising thirty-six (36) sewers.
On May 5 and 6, 1993, all the line leaders in petitioner's establishment did not report for work. Acting on
what appeared to be a concerted action to boycott petitioner's operations, petitioner verbally required
private respondents to submit written explanations as to their absence.
On May 7, 1993, private respondents were not allowed to enter the premises of petitioner.
On May 10, 1993, both private respondents tendered their explanation letters to petitioner. Private
respondent Gaba's letter states, thus:
"5-10-93
Dear Sir:
Ipagpaumanhin ninyo ang hindi ko pagpapasok ngayon dahil ang anak ko po ay dadalhin ko sa Doctor at
baka po dalawan (sic) araw akong hindi makakapasok dahil po sa aking anak na (______) ay naloloko sa
kaya (sic) barkada kaya aking inaasikaso pa.
Sana po ay ako ay maunawaan ninyo.
Lubos na Gumagalang,
(Sgd)
Lucrecia"
On the other hand, private respondent Melarpes gave the following reason for her absence in her letter:
"May 10, 1993
Dear Sir:
Ipagpaumanhin ninyo ang pag-absent ko noong May 5-6, 1993 dahil masakit ang pos-on ko at may dalang
nag-tatai at nagsusuka, at sorry po kung hindi ako nakapadala nang sulat o kaya tumawag sa telephone.
Aasahan ko po ang inyong consideration.
Respectfully yours,
(Sgd)
Elsa Melarpes"
Thus, private respondent Gaba was absent on May 5 and 6, 1993 because her child was sick, while private
respondent Melarpes was also absent because she was ill on said dates due to her pregnancy.
Notwithstanding the submission by private respondents of their explanation letters, they were not allowed
to resume their work. Petitioner alleged that it advised private respondents to await the decision of
management, pending a company investigation as to whether or not the real reason for their absence was
an intent to sabotage the operations of petitioner.
Significantly, however, petitioner never denied that the other line leaders who were also absent on May 5
and 6, 1993, had been immediately allowed to resume their work despite their two-day absence.
On May 17, 1993, private respondents filed with the NLRC separate complaints for, among others, illegal
dismissal.
After submission of position papers, replies and rejoinders, the Labor Arbiter rendered a Decision dated
April 25, 1994 finding that private respondents were illegally dismissed from service on the mere suspicion
that their two-day absence was actually a boycott to derail the operations of petitioner. The Labor Arbiter
held that such suspicion was utterly unsupported by any evidence. The Labor Arbiter also found that
private respondents' right to due process was violated in the absence of compliance by petitioner with the
twin requirements of notice and hearing. The Labor Arbiter ruled, thus:
"Well-settled is the rule that in termination cases, the employer has the burden of proof to show that the
dismissal was for cause. Failure in this regard, renders the dismissal unjustified and therefore, illegal
(Gesulgon vs. NLRC, 219 SCRA 561). In the case at bar, except for respondent's bare allegation that
complainants sabotage[d] its business operations which resulted in huge losses, no evidence was adduced
to support its contention. Neither did respondent submitted [sic] proof that the company indeed incurred
losses as a result of complainants' concerted action. Decisions could not be based on mere conjectures or
surmises but must be supported by evidence.
Furthermore, records are bereft of any showing that complainants were indeed afforded the due process
requirement of the law. What complainants submitted were letters-explanations regarding their absence
but not with respect to the charge of sabotage as alleged by respondent. s
Moreover, granting arguendo, that complainants violated the company rules and regulations for having
been absent without prior approval by the management, still the penalty of dismissal is too severe a
penalty, considering that this is the first offense/infraction committed by them during their three (3) years
of service with the company.
All told, complainants were indeed dismissed from the service without cause and due process. As such,
they should be reinstated to their former positions without loss of seniority rights with backwages not
exceeding three (3) years x x x"[3]
Understandably, petitioner appealed the aforecited decision of the Labor Arbiter to respondent NLRC. Such
appeal, however, was dismissed on November 24, 1994.
Before respondent NLRC; petitioner advanced the theory that it could not be liable for illegal dismissal,
since private respondents have not been in fact dismissed from the service. Petitioner complained that after
having told private respondents to wait for the decision of management, private respondents "jumped the
gun" on them, so to speak, by filing the complaint for illegal dismissal. Respondent NLRC, however, was the
least persuaded; it ruled:
"With the record clearly showing that complainants were able to satisfactorily explain their absences with
valid reasons, and that they actually presented themselves for work on May 7, 1993, except that they were
not accepted back by respondent, we cannot but affirm the decision below."[4]
Petitioner filed a Motion for Reconsideration of the aforecited decision, but respondent NLRC denied the
same in a Resolution dated June 26, 1995 for having been filed out of time. Hence, this petition.
Petitioner raises the following as grounds justifying the nullification of the herein assailed resolutions of
respondent NLRC:
A.
THE NLRC GRAVELY ABUSED ITS DISCRETION WHEN IT RULED THAT PRIVATE RESPONDENTS WERE
DISMISSED BY PETITIONER WHEN THE EVIDENCE ON RECORD SHOWS THAT PRIVATE RESPONDENTS
WERE SIMPLY INSTRUCTED TO AWAIT MANAGEMENT'S DECISION REGARDING THE PENDING
ADMINISTRATIVE INVESTIGATION.
B.
PETITIONER HAD REASONABLE GROUND TO CONCLUDE THAT PRIVATE RESPONDENTS' FAILURE TO
REPORT FOR WORK WAS A FORM OF CONCERTED ACTION DESIGNED TO SABOTAGE ITS OPERATIONS.
THE NLRC GRAVELY ABUSED ITS DISCRETION WHEN IT RULED OTHERWISE.
C.
THE NLRC GRAVELY ABUSED ITS DISCRETION WHEN IT CONCLUDED THAT DISMISSAL WAS TOO
SEVERE A PENALTY FOR PRIVATE RESPONDENTS' INFRACTIONS. PRIVATE RESPONDENTS WERE GUILTY OF
SABOTAGING THE OPERATIONS OF PETITIONER. HENCE, THE PENALTY OF DISMISSAL IS COMMENSURATE
TO THE INFRACTIONS COMMITTED BY PRIVATE RESPONDENTS.
D.
THE NLRC GRAVELY ABUSED ITS DISCRETION IN CONCLUDING THAT PETITIONER FAILED TO
OBSERVE THE REQUIREMENTS OF DUE PROCESS.
E.
THE NLRC GRAVELY ABUSED ITS DISCRETION IN HOLDING PETITIONER LIABLE FOR BACKWAGES.
HOLIDAY PAY, SERVICE INCENTIVE LEAVE PAY, AND ATTORNEY'S FEES WHEN ITS FINDING OF ILLEGAL
DISMISSAL IS NOT EVEN SUBSTANTIATED BY EVIDENCE.
The petition fails to convince us that respondent NLRC is guilty of grave abuse of discretion.
The crux of petitioner's argument is that it cannot be held guilty of illegal dismissal because there was no
dismissal effected in the first place. This claim is belied by the fact, undisputed by the petitioner, that
private respondents were barred from entering the work premises while the other line leaders supposedly
part of the boycott were allowed to return to work. The failure of the petitioner to accept the private
respondents back after their absences constitutes constructive discharge or dismissal. A constructive
discharge or dismissal is defined as a "quitting because continued employment is rendered impossible,
unreasonable or unlikely; as an offer involving a demotion in rank and a diminution in pay." Private
respondents herein found it well nigh impossible to continue their employment, having been denied access
into their workplace. The case of Valiant Machinery and Metal Corp. vs. NLRC,[5] wherein this Court found
the employer guilty of illegal dismissal when it did not allow its workers to enter the company premises
finds application to the situation at hand. As held therein:
"The Court finds substantial evidence in support of the ruling of the NLRC that the private respondents
were indeed dismissed without cause. While there was no outright or open termination of the services of
the employees, there is reason to believe the company barred them from work because they were absent
practically for one week when they were badly needed in the factory."
Finding that there was, indeed, a dismissal, We hold that the same was made without compliance with the
requirements laid down by law and jurisprudence. In order to constitute a valid dismissal, two requisites
must concur: (a) the dismissal must be for any of the causes expressed in Art. 282 of the Labor Code, and
(b) the employee must be accorded due process, basic of which are the opportunity to be heard and to
defend himself.[6] Herein, the Labor Arbiter found that records are bereft of any showing that private
respondents were indeed afforded the due process requirement of the law. What private respondents
submitted were letters-explanations regarding their absences but not with respect to the charge of
sabotage as alleged by petitioner.[7]
Petitioner claims that the private respondents were only made to wait for the decision of the management
pending investigation of the alleged "sabotage" or boycott. It will be noted, however, that the private
respondents were already barred from entering the company as early as May 7, 1993. They filed their
complaint on May 17 of the same year. Ten days had lapsed before the said complaints were filed. Within
those ten days the private respondents were not allowed to work in the company and their status remained
unclear. As aptly noted by the Solicitor General:
"Even assuming ex gratia argumenti that there was a company investigation being then conducted, still
petitioner should not have ordered private respondents to await its decision on the matter but instead
imposed on the latter preventive suspension in conformity with Sections 3 and 4 of Rule XIV of Book V of
the Implementing Rules of the Labor Code, considering that private respondents were accused of having
sabotaged petitioner's operations which resulted in business losses, a clear example of a serious and
imminent, if not actual, threats to petitioner's property. Hence, having been placed in suspended
animation, so to speak, by petitioner, private respondents had every reason to believe that they were
dismissed by the former, as they actually were, thereby warranting the filing of the complaints for illegal
dismissal."[8]
The private respondents were never summoned by the management to air their side regarding the
accusations of sabotage, but were only required to give explanations regarding their absences. Thus, even
if, as petitioner claims, that the dismissal was due to the role played by the respondents in the alleged
sabotage, the said dismissal is still invalid, as no notice was given and no hearing was conducted. To
reiterate, the twin requirements of notice and hearing constitute essential elements of due process in the
dismissal of employees.[9]
Moreover, the petitioner is inconsistent in its arguments. While contending that private respondents were
not dismissed, it goes on to state that dismissal in this instance is valid as petitioner had "reasonable
ground to suspect that the absences were a form of concerted action."[10] It also insists that private
respondent Inocencio's absence due to abdominal pains, accompanied by loose bowel movement and
vomiting, to be flimsy at best, despite the fact that said private respondent submitted a medical certificate
to substantiate her claim.[11]
On the contrary, as noted by the Solicitor General, the Labor Arbiter gave credence and weight to the
justification given by private respondents for their two-day absence as consistent with the truth, against
petitioner's mere conjecture that the absences were a form of sabotage. Well entrenched is the rule that
when the conclusions of the labor arbiter are sufficiently corroborated by the evidence on record, the same
should be respected by appellate tribunals since he is in a better position to assess and evaluate the
credibility of the contending parties.[12] If ever there is anything that may be considered flimsy in this case,
it should be the petitioner's lame justification for the dismissal of the private respondents. As succinctly put
by the NLRC:
"Absent any proof that complainants (private respondents in this case) actually initiated what it termed a
concerted action of its line leaders to sabotage its business operations by absenting themselves all at the
same time on May 5 and 6, 1993, the respondent (herein petitioner) cannot just invoke sabotage that does
not exist. Besides, what makes it difficult for respondent to charge complainants of illegal strike, if such
existed? That it miserably failed to show that there were other line leaders (aside from complainants) who
were likewise absent on said dates, we cannot but consign this defense to the 'dustbin' of afterthoughts" [13]
We come now to the petitioner's claim that the NLRC gravely abused its discretion in holding it liable for
backwages, holiday pay, service Incentive leave pay, and attorney's fees. Other than the award for
backwages, this Court finds no reason why the petitioner should not be made so liable. As noted by the
Labor Arbiter, and affirmed by respondent NLRC, petitioner failed to show proof that the holiday pay and
service incentive leave pay had been paid. Having been also compelled to litigate, the award of attorney's
fees equivalent to five percent (5%) of the total judgment award is also proper.[14] We find no reason to
disturb said findings.
Anent the issue of backwages, We find that the Labor Arbiter erred in limiting the award of back wages for
only a period not exceeding three (3) years. Prior to the effectivity of Republic Act No. 6715, the rule was
that an employee, who was illegally dismissed, was entitled to an award of backwages equivalent to three
years (where his case is not terminated sooner).[15] Republic Act No. 6715, which amended Art. 279 of the
Labor Code took effect on March 21, 1989. It states in part:
"ART. 279. Security of Tenure. . . . An employee who is unjustly dismissed from work shall be entitled to
reinstatement without loss of seniority rights and other privileges and tohis full backwages inclusive of
allowances and to his other benefits or their monetary equivalent computed from the time his
compensation is withheld from him up to the time of his actual reinstatement." (emphasis ours)
Private respondents' cause of action against the petitioner arose on May 7, 1993, their complaint for illegal
dismissal was filed on May 17, 1993. Since the dismissal took place after the passage of such law, and
following the doctrine laid down in the case of Caltex Refinery Employees Association (CREA) vs. National
Labor Relations Commission (Third Division),[16] We hold that the private respondents are entitled to
reinstatement without loss of seniority rights, as well as to other privileges and their full backwages
inclusive of allowances, and to their other benefits or their monetary equivalent computed from the time
their compensation was withheld from them up to the time of their actual reinstatement. Moreover, no
deduction shall be allowed in accordance with the doctrine enunciated in the recent case of Bustamante vs.
National Labor Relations Commission and Evergreen Farms, Inc.[17] wherein this Court took the opportunity
to clarify how Republic Act No. 6715 is to be interpreted:
"The Court deems it appropriate, however, to reconsider such earlier ruling on the computation of
backwages as enunciated in said Pines City Educational Center case, by now holding that conformably with
the evident legislative intent as expressed in Rep. Act No. 6715, x x x backwages to be awarded to an
illegally dismissed employee, should not, as a general rule, be diminished or reduced by the earnings
derived by him during the period of his illegal dismissal. The underlying reason for this ruling is that the
employee, while litigating the legality ([or] illegality) of his dismissal, must still earn a living to support
himself and family, while full backwages have to be paid by the employer as part of the price or penalty he
has to pay for illegally dismissing his employee. The clear legislative intent of the amendment in Rep. Act
No. 6715 is to give more benefits to workers than was previously given them under the Mercury Drug rule
or the 'deduction of earnings elsewhere' rule. Thus, a closer adherence to the legislative policy behind Rep.
Act No. 6715 points to 'full backwages' as meaning exactly that, i.e., without deducting from backwages
the earnings derived elsewhere by the concerned employee during the period of his illegal dismissal. In
other words, the provision calling for 'full backwages' to illegally dismissed employees is clear, plain and
free from ambiguity, and, therefore, must be applied without attempted or strained interpretation. Index
animi sermo est."
Should reinstatement no longer be feasible due to strained relations, the award of separation pay
equivalent to one (1) month salary for every year of service, a fraction of six (6) months to be considered
as one (1) year.
WHEREFORE, the, Petition is hereby DISMISSED, and the Resolution of the National Labor Relations
Commission dated November 24, 1994 is AFFIRMED with MODIFICATION that the award of backwages or
separation pay be computed according to the foregoing discussion.
Costs against the Petitioners.
SO ORDERED.