1

EN BANC

G.R. No. 106724 February 9, 1994

THE NATIONAL POLICE COMMISSION, represented by its
Acting Chairman, Cesar Sarino, Teodolo C. Natividad,
Vice-Chairman and Executive Officer, Brig. Gen. Virgilio H.
David, Edgar Dula Torre, Guillermo P. Enriquez,
Commissioners, and Chief Supt. Levy D. Macasiano
Director for Personnel, petitioners,
vs.
Honorable Judge Salvador de Guzman, Jr., Chief Supt.
Norberto M. Lina, Chief Supt. Ricardo Trinidad, Jr., Sr.
Supt. Manuel Suarez, Supt. Justito B. Tagum, Sr. Supt.
Tranquilino Aspiras, Sr., Supt. Ramon I. Navarro,
Sr. Supt. Ramon I. Navarro, Sr. Supt. Jose P. Suria, Sr.
Supt. Agaton Abiera, Chief Insp. Bienvenido Torres, and
the National (ROTC) Alumni Association Inc. (NARRA),
represented by its President Col. Benjamin Gundran, and
Director Hermogenes Peralta, Jr., respondents.
The Solicitor General for petitioners.
Renecio R. Espiritu for private respondents.
Diosdado P. Peralta for respondent-intervenor.

BIDIN, J.:

The case at bar had its origin in the implementation of the

compulsory retirement of PNP officers as mandated in Sec.
39, RA 6975, otherwise known as "An Act Establishing the
Philippine National Police Under a Reorganized Department of
the Interior and Local Government", which took effect on
January 2, 1991. Among others, RA 6975 provides for a
uniform retirement system for PNP members. Section 39
thereof reads:
Sec. 39. Compulsory Retirement.
Compulsory retirement, for officer and nonofficer, shall be upon the attainment of age fiftysix (56); Provided, That, in case of any officer
with the rank of chief superintendent, director or
deputy director general, the Commission may
allow his retention in the service for an
unextendible period of one (1) year.
Based on the above provision, petitioners sent notices of
retirement to private respondents who are all members of the
defunct Philippine Constabulary and have reached the age of
fifty-six (56).
In response, private respondents filed a complaint on
December 19, 1991 for declaratory relief with prayer for the
issuance of an ex parte restraining order and/or injunction
(docketed as Civil Case No. 91-3498) before the Regional Trial
Court of Makati, Branch 142. In their complaint, respondents
aver that the age of retirement set at fifty-six (56) by Section
39 of RA 6975 cannot be applied to them since they are also
covered by Sec. 89 thereof which provides:
Any provision hereof to the contrary
notwithstanding, and within the transition period
of four (4) years following the effectivity of this

2
Act, the following members of the INP shall be
considered compulsorily retired:
a) Those who shall attain the age of sixty (60)
on the first year of the effectivity of this Act.
b) Those who shall attain the age of fifty-nine
(59) on the second year of the effectivity of this
Act.
c) Those who shall attain the age of fifty-eight
(58) on the third year of the effectivity of this
Act.
d) Those who shall attain the age of fifty-seven
(57) on the fourth year of the effectivity of this
Act.
It is the submission of respondents that the term "INP"
includes both the former members of the Philippine
Constabulary and the local police force who were earlier
constituted as the Integrated National Police (INP) by virtue of
PD 765 in 1975.
On the other hand, it is the belief of petitioners that the 4-year
transition period provided in Section 89 applies only to the
local police forces who previously retire, compulsorily, at age
sixty (60) for those in the ranks of Police/Fire Lieutenant or
higher (Sec. 33, PD 1184); while the retirement age for the PC
had already been set at fifty-six (56) under the AFP law.
On December 23, 1991, respondent judge issued a restraining
order followed by a writ of injunction on January 8, 1992 upon
posting of a P100,000.00 bond by private respondents.

After the parties have submitted their respective pleadings, the

case was submitted for resolution and on August 14, 1992, the
respondent judge rendered the assailed decision, the decretal
portion of which reads:
WHEREFORE, the court hereby declares that
the term "INP" in Section 89 of the PNP Law
includes all members of the present Philippine
National Police, irrespective of the original
status of the present members of the Philippine
National Police before its creation and
establishment, and that Section 39 thereof shall
become operative after the lapse of the
four-year transition period.
The preliminary injunction issued is made
permanent.
SO ORDERED. (Rollo, pp. 29-30)
Petitioners filed the instant petition on October 8, 1992 seeking
the reversal of the above judgment. On January 12, 1993, the
Court resolved to treat the respondents' Comment as Answer
and gave due course to the petition.
In ruling in favor of private respondents, respondent judge
observed, among others, that:
It may have been the intention of Congress to
refer to the local police forces as the "INP" but
the PNP Law failed to define who or what
constituted the INP. The natural recourse of the
court is to trace the source of the "INP" as
courts are permitted to look to prior laws on the
same subject and to investigate the
antecedents involved. There is nothing extant in

3
the statute books except that which was created
and established under
PD 765 pursuant to the mandate of Article XV of
the 1973 Constitution providing that the "State
shall establish and maintain an integrated
national police force whose organization,
administration and operation shall be provided
by law." Heretofore, INP was unknown. And the
said law categorically declared the PC "as the
principal component of the Integrated National
Police" (Sec. 5, PD 765).
The court was supplied by respondents
(petitioners herein) with excerpts taken from the
discussion amongst the members of Congress
concerning the particular provision of Section
89. The court is not persuaded by said
discussion; it was a simple matter for the
members of the legislature to state precisely in
clear and unequivocal terms their meaning,
such as "integrated police" as used in PD 765.
Instead, they employed "INP", a generic term
that includes the PC as the principal component
of the INP, supra. In failing to categorically
restrict the application of Section 89 as the
members of legislature are said to have
intended, it gave rise to the presumption that it
has not limited nor intended to limit the
meaning of the word when the bill was finally
passed into law. It is not difficult for the court to
also presume that in drafting the wording of the
PNP Law, the legislators were aware of the
historical legislative origin of the "INP".
xxx xxx xxx

The court takes particular note of the fact that

Section 89 is found in the Transitory Provisions
of the law which do not provide for any
distinction between the former PC officers and
those belonging to the civilian police forces.
These provision are specifically enacted to
regulate the period covering the dissolution of
the PC and the creation of the PNP, a period
that necessarily would be attended by
imbalances and or confusion occasioned by the
wholesale and mass integration. In fact, the
retirement payment scheme of the INP is still to
be formulated, leaving the impression that
nothing is really settled until after the transition
of four years has lapsed. Section 89 therefore
prevails over Section 39 up to the year 1995
when the retirement age for the members of the
PNP shall then be age 56; after the year 1995,
Section 39 shall then be the applicable law on
retirement of PNP members. (Rollo, pp. 27-28;
emphasis supplied)
Petitioners disagree and claim that the use of the term INP in
Sec. 89 does not imply the same meaning contemplated under
PD 765 wherein it is provided:
Sec. 1. Constitution of the Integrated National
Police. There is hereby established and
constituted the Integrated National Police (INP)
which shall be composed of the Philippine
Constabulary as the nucleus, and the integrated
police forces as established by Presidential
Decrees
Nos. 421, 482, 531, 585 and 641, as
components, under the Department of National
Defense.

4
On the other hand, private respondents assert that being the
nucleus of the Integrated National Police (INP) under PD 765,
former members of the Philippine Constabulary (PC) should
not be discriminated against from the coverage of the term
"INP" in Sec. 89, RA 6975. Clearly, it is argued, the term "INP"
found in Section 89 of RA 6975 refers to the INP in PD 765.
Thus, where the law does not distinguish, the courts should
not distinguish.
Does the law, RA 6975, distinguish INP from the PC?
Petitioners submit that it does and cite Sections 23 and 85 to
stress the point, viz.:
Sec. 23. Composition. Subject to the limitations
provided for in this Act, the Philippine National Police,
hereinafter referred to as the PNP, is hereby
established, initially consisting of the members of the
police forces who were integrated into the Integrated
National Police (INP) pursuant to Presidential Decree
No. 765, and the officers and enlisted personnel of the
Philippine Constabulary (PC). . .

Sec. 85. Phase of Implementation. The

implementation of this Act shall be undertaken in three
(3) phases, to wit:
Phase I Exercise of option by the uniformed
members of the Philippine Constabulary, the PC
elements assigned with the Narcotics Command, CIS,
and the personnel of the technical services of the AFP
assigned with the PC to include the regular CIS
investigating agents and the operatives and agents of
the NAPOLCOM Inspection, Investigation and
Intelligence Branch, and the personnel of the absorbed
National Action Committee on Anti-Hijacking (NACAH)
of the Department of National Defense, to be
completed within six (6) months from the date of the
effectivity of this Act. At the end of this phase, all
personnel from the INP, PC, technical Services,
NACAH, and NAPOLCOM Inspection, Investigation
and Intelligence Branch shall have been covered by
official orders assigning them to the PNP . . .
xxx xxx xxx

xxx xxx xxx

The permanent civilian employees of the present PC,
INP, Narcotics Command, CIS and the technical
command of the AFP assigned with the PC, including
NAPOLCOM hearing officers holding regular items as
such, shall be absorbed by the Department as
employees thereof, subject to existing laws and
regulations.
xxx xxx xxx

. . . Any PC-INP officer or enlisted personnel may,

within the twelve-month period from the effectivity of
this Act, retire . . .
Phase III . . . To accomplish the tasks of Phase III,
the Commission shall create a Board of Officers
composed of the following: NAPOLCOM Commissioner
as Chairman and one (1) representative each from the
PC, INP, Civil Service Commission and the Department
of Budget and Management.
Section 86 of the same law further provides:

5
Sec. 86. Assumption by the PNP of Police Functions.
The PNP shall absorb the functions of the PC, the
INP and the Narcotics Command upon the effectivity of
this Act.
From a careful perusal of the above provisions, it appears
therefore that the use of the term INP is not synonymous with
the PC. Had it been otherwise, the statute could have just
made a uniform reference to the members of the whole
Philippine National Police (PNP) for retirement purposes and
not just the INP. The law itself distinguishes INP from the PC
and it cannot be construed that "INP" as used in Sec. 89
includes the members of the PC.
And contrary to the pronouncement of respondent judge that
the law failed to define who constitutes the INP, Sec. 90 of RA
6975 has in fact defined the same. Thus,
Sec. 90. Status of Present NAPOLCOM, PC-INP.
Upon the effectivity of this Act, the present National
Police Commission and the Philippine ConstabularyIntegrated National Police shall cease to exist. The
Philippine Constabulary, which is the nucleus of the
Philippine Constabulary-Integrated National Police
shall cease to be a major service of the Armed Forces
of the Philippines. The Integrated National Police,
which is the civilian component of the Philippine
Constabulary-Integrated National Police, shall cease to
be the national police force and lieu thereof, a new
police force shall be established and constituted
pursuant to this Act. (emphasis supplied)
It is not altogether correct to state, therefore, that the
legislature failed to define who the members of the INP are. In
this regard, it is of no moment that the legislature failed to
categorically restrict the application of the transition period in

Sec. 89 specifically in favor of the local police forces for it

would be a mere superfluity as the PC component of the INP
was already retirable at age fifty-six (56).
Having defined the meaning of INP, the trial court need not
have belabored on the supposed dubious meaning of the term.
Nonetheless, if confronted with such a situation, courts are not
without recourse in determining the construction of the statute
with doubtful meaning for they may avail themselves of the
actual proceedings of the legislative body. In case of doubt as
to what a provision of a statute means, the meaning put to the
provision during the legislative deliberations may be adopted
(De Villa v. Court of Appeals,
195 SCRA 722 [1991] citing Palanca v. City of Manila, 41 Phil.
125 [1920]; Arenas v. City of San Carlos, 82 SCRA 318
[1978]).
Courts should not give a literal interpretation to the letter of the
law if it runs counter to the legislative intent (Yellow Taxi and
Pasay Transportation Workers' Association v. Manila Yellow
Taxi Cab. Co., 80 Phil. 83 [1948]).
Examining the records of the Bicameral Conference
Committee, we find that the legislature did intent to exclude
the members of the PC from the coverage of Sec. 89 insofar
as the retirement age is concerned, thus:
THE CHAIRMAN. (SEN. MACEDA). Well, it seems
what people really want is one common rule, so if it is
fifty-six, fifty-six; of course, the PC wants sixty for
everybody. Of course, it is not acceptable to us in the
sense that we tied this up really to the question of: If
you are lax in allowing their (the PC) entry into the
PNP, then tighten up the retirement. If we will be strict
in, like requiring examinations and other conditions for
their original entry, then since we have sifted out a

6
certain amount of undesirables, then we can allow a
longer retirement age. That was the rationale, that was
the tie-up. Since we are relaxing the entry, we should
speed up . . .

REP. GUTANG. On the third year, 58.

THE CHAIRMAN. (REP. GUTANG). Exit.

REP. GUTANG. Oo.

THE CHAIRMAN. (SEN. MACEDA) . . . the retirement,

the exit.

SEN. SAGUISAG. So kung 55, when the law becomes

effective . . .

THE CHAIRMAN. (REP. GUTANG). So let me get it

very clear, Mr. Chairman. Fifty-six, let's say, that will not
make any adjustment in the PC because there (they)
are (retirable at age) fifty-six.

THE CHAIRMAN. (SEN. MACEDA). He will retire at 58,

doon siya aabot.

THE CHAIRMAN. (SEN. MACEDA). Kaya nga, wala na

silang masasabi.

SEN. SAGUISAG. Dahil 'yon, may time to . . .

THE CHAIRMAN. (REP. GUTANG). In the case of the

Police, since they are retireable now at sixty, for the
officers, it will be
applicable to them on a one-year every year basis for a
total period of four years transition. (Bicameral
Conference Committee on National Defense, March
12, 1990)
REP. GUTANG. On the first year of effectivity, the
police will retire at 60 years.
THE CHAIRMAN. (SEN. MACEDA). Sixty.
REP. GUTANG. On the second year, 59.
THE CHAIRMAN. (SEN. MACEDA). Oo.

THE CHAIRMAN. (SEN. MACEDA). Fifty-eight. So

'yung 55, on the third year, 58, doon siya re-retire.

REP. UNICO. Pwede.

THE CHAIRMAN. (SEN. MACEDA). Walang problema

dito sa transition ng pulis, acceptable ito, eh.
THE CHAIRMAN. (REP. COJUANGCO). Sa PC?
THE CHAIRMAN. (SEN. MACEDA). PC, walang
mawawala sa kanila, 56 ang retirement age nilang
talaga, eh. Kaya ayaw ko
ngang dagdagan 'yung 56 nila at 'yon din ang sa
Armed Forces, 56. (Ibid., May 22, 1990)
In applying the provisions of Sec. 89 in favor of the local police
force as established in PD 765, the Court does not, in any
manner, give any
undue preferential treatment in favor of the other group. On
the contrary, the Court is merely giving life to the real intent of
the legislators based on the deliberations of the Bicameral

7
Conference Committee that preceded the enactment of RA
6975.
The legislative intent to classify the INP in such manner that
Section 89 of RA 6975 is applicable only to the local police
force is clear. The question now is whether the classification is
valid. The test for this is reasonableness such that it must
conform to the following requirements: (1) It must be based
upon substantial distinctions; (2) It must be germane to the
purpose of the law; (3) It must not be limited to existing
conditions only; (4) It must apply equally to all members of the
same class (People vs. Cayat, 68 Phil. 12 [1939]).
The classification is based upon substantial distinctions. The
PC, before the effectivity of the law (RA 6975), were already
retirable at age 56 while the local police force were retirable at
60, and governed by different laws
(P.D. 1184, Sec. 33 and Sec. 50). The distinction is relevant for
the purpose of the statute, which is to enable the local police
force to plan for their retirement which would be earlier than
usual because of the new law. Section 89 is merely transitory,
remedial in nature, and loses its force and effect once the fouryear transitory period has elapsed. Finally, it applies not only to
some but to all local police officers.
It may be appropriate to state at this point that it seems absurd
that a law will grant an extension to PC officers' retirable age
from 56 to 60 and then gradually lower it back to 56 without
any cogent reason at all. Why should the retirement age of PC
officers be increased during the transitory period to the
exclusion of other PC officers who would retire at age 56 after
such period? Such absurdity was never contemplated by the
law and would defeat its purpose of providing a uniform
retirement age for PNP members.

WHEREFORE, the petition is GRANTED. The writ of injunction

issued on January 8, 1992 is hereby LIFTED and the assailed
decision of respondent judge is REVERSED and SET ASIDE.
SO ORDERED.
Narvasa, C.J., Cruz, Feliciano, Padilla, Regalado, Davide, Jr.,
Romero, Bellosillo, Melo, Quiason, Puno, Vitug and Kapunan,
JJ., concur.
Nocon, J., is on leave.

SECOND DIVISION

G.R. No. 113092 September 1, 1994

MARTIN CENTENO, petitioner,
vs.
HON. VICTORIA VILLALON-PORNILLOS, Presiding Judge
of the Regional Trial Court of Malolos, Bulacan, Branch 10,
and THE PEOPLE OF THE PHILIPPINES, respondents.
Santiago V. Marcos, Jr. for petitioner.

REGALADO, J.:
It is indeed unfortunate that a group of elderly men, who were
moved by their desire to devote their remaining years to the
service of their Creator by forming their own civic organization
for that purpose, should find themselves enmeshed in a
criminal case for making a solicitation from a community
member allegedly without the required permit from the
Department of Social Welfare and Development.
The records of this case reveal that sometime in the last
quarter of 1985, the officers of a civic organization known as

the Samahang Katandaan ng Nayon ng Tikay launched a fund

drive for the purpose of renovating the chapel of Barrio Tikay,
Malolos, Bulacan. Petitioner Martin Centeno, the chairman of
the group, together with Vicente Yco, approached Judge
Adoracion G. Angeles, a resident of Tikay, and solicited from
her a contribution of P1,500.00. It is admitted that the
solicitation was made without a permit from the Department of
Social Welfare and Development.
As a consequence, based on the complaint of Judge Angeles,
an information 1 was filed against petitioner Martin Centeno,
together with Religio Evaristo and Vicente Yco, for violation of
Presidential Decree No. 1564, or the Solicitation Permit Law,
before the Municipal Trial Court of Malolos, Bulacan, Branch 2,
and docketed as Criminal Case No. 2602. Petitioner filed a
motion to quash the information 2 on the ground that the facts
alleged therein do not constitute an offense, claiming that
Presidential Decree No. 1564 only covers solicitations made
for charitable or public welfare purposes, but not those made
for a religious purpose such as the construction of a chapel.
This was denied 3 by the trial court, and petitioner's motion for
reconsideration having met the same fate, trial on the merits
ensued.
On December 29, 1992, the said trial court rendered
judgment 4 finding accused Vicente Yco and petitioner
Centeno guilty beyond reasonable doubt and sentencing them
to each pay a fine of P200.00. Nevertheless, the trial court
recommended that the accused be pardoned on the basis of
its finding that they acted in good faith, plus the fact that it
believed that the latter should not have been criminally liable
were it not for the existence of Presidential Decree
No. 1564 which the court opined it had the duty to apply in the
instant case.

9
Both accused Centeno and Yco appealed to the Regional Trial
Court of Malolos, Bulacan, Branch 10. However, accused Yco
subsequently withdrew his appeal, hence the case proceeded
only with respect to petitioner Centeno. On May 21, 1993,
respondent Judge Villalon-Pornillos affirmed the decision of
the lower court but modified the penalty, allegedly because of
the perversity of the act committed which caused damage and
prejudice to the complainant, by sentencing petitioner Centeno
to suffer an increased penalty of imprisonment of 6 months
and a fine of P1,000.00, without subsidiary imprisonment in
case of insolvency. 5 The motion for reconsideration of the
decision was denied by the court. 6
Thus it is that a fine of P200.00 imposed as a penalty by the
lowest court in the judicial hierarchy eventually reached this
highest tribunal, challenged on the sole issue of whether
solicitations for religious purposes are within the ambit of
Presidential Decree No. 1564. Quantitatively, the financial
sanction is a nominal imposition but, on a question of principle,
it is not a trifling matter. This Court is gratified that it can now
grant this case the benefit of a final adjudication.
Petitioner questions the applicability of Presidential Decree
No. 1564 to solicitations for contributions intended for religious
purposes with the submissions that (1) the term "religious
purpose" is not expressly included in the provisions of the
statute, hence what the law does not include, it excludes;
(2) penal laws are to be construed strictly against the State
and liberally in favor of the accused; and (3) to subject to State
regulation solicitations made for a religious purpose would
constitute an abridgment of the right to freedom of religion
guaranteed under the Constitution.
Presidential Decree No. 1564 (which amended Act No. 4075,
otherwise known as the Solicitation Permit Law), provides as
follows:

Sec. 2. Any person, corporation, organization, or

association desiring to solicit or receive contributions
for charitable or public welfare purposes shall first
secure a permit from the Regional Offices of the
Department of Social Services and Development as
provided in the Integrated Reorganization Plan. Upon
the filing of a written application for a permit in the form
prescribed by the Regional Offices of the Department
of Social Services and Development, the Regional
Director or his duly authorized representative may, in
his discretion, issue a permanent or temporary permit
or disapprove the application. In the interest of the
public, he may in his discretion renew or revoke any
permit issued under Act 4075.
The main issue to be resolved here is whether the phrase
"charitable purposes" should be construed in its broadest
sense so as to include a religious purpose. We hold in the
negative.
I. Indeed, it is an elementary rule of statutory construction that
the express mention of one person, thing, act, or consequence
excludes all others. This rule is expressed in the familiar
maxim "expressio unius est exclusio alterius." Where a statute,
by its terms, is expressly limited to certain matters, it may not,
by interpretation or construction, be extended to others. The
rule proceeds from the premise that the legislature would not
have made specified enumerations in a statute had the
intention been not to restrict its meaning and to confine its
terms to those expressly mentioned. 7
It will be observed that the 1987 Constitution, as well as
several other statutes, treat the words "charitable" and
"religious" separately and independently of each other. Thus,
the word "charitable" is only one of three descriptive words
used in Section 28 (3), Article VI of the Constitution which

10
provides that "charitable institutions, churches and personages
. . ., and all lands, buildings, and improvements, actually,
directly, and exclusively used for religious, charitable, or
educational purposes shall be exempt from taxation." There
are certain provisions in statutes wherein these two terms are
likewise dissociated and individually mentioned, as for
instance, Sections 26 (e) (corporations exempt from income
tax) and 28 (8) (E) (exclusions from gross income) of the
National Internal Revenue Code; Section 88 (purposes for the
organization of non-stock corporations) of the Corporation
Code; and
Section 234 (b) (exemptions from real property tax) of the
Local Government Code.
That these legislative enactments specifically spelled out
"charitable" and "religious" in an enumeration, whereas
Presidential Decree No. 1564 merely stated "charitable or
public welfare purposes," only goes to show that the framers of
the law in question never intended to include solicitations for
religious purposes within its coverage. Otherwise, there is no
reason why it would not have so stated expressly.
All contributions designed to promote the work of the church
are "charitable" in nature, since religious activities depend for
their support on voluntary contributions. 8 However, "religious
purpose" is not interchangeable with the expression "charitable
purpose." While it is true that there is no religious purpose
which is not also a charitable purpose, yet the converse is not
equally true, for there may be a "charitable" purpose which is
not "religious" in the legal sense of the term.9 Although the
term "charitable" may include matters which are "religious," it
is a broader term and includes matters which are not
"religious," and, accordingly, there is a distinction between
"charitable purpose" and "religious purpose," except where the
two terms are obviously used synonymously, or where the
distinction has been done away with by statute. 10 The word

"charitable," therefore, like most other words, is capable of

different significations. For example, in the law, exempting
charitable uses from taxation, it has a very wide meaning, but
under Presidential Decree No. 1564 which is a penal law, it
cannot be given such a broad application since it would be
prejudicial to petitioners.
To illustrate, the rule is that tax exemptions are generally
construed strictly against the taxpayer. However, there are
cases wherein claims for exemption from tax for "religious
purposes" have been liberally construed as covered in the law
granting tax exemptions for "charitable purposes." Thus, the
term "charitable purposes," within the meaning of a statute
providing that the succession of any property passing to or for
the use of any institution for purposes only of public charity
shall not be subject to succession tax, is deemed to include
religious purposes. 11 A gift for "religious purposes" was
considered as a bequest for "charitable use" as regards
exemption from inheritance tax. 12
On the other hand, to subsume the "religious" purpose of the
solicitation within the concept of "charitable" purpose which
under Presidential Decree
No. 1564 requires a prior permit from the Department of Social
Services and Development, under paid of penal liability in the
absence thereof, would be prejudicial to petitioner. Accordingly,
the term "charitable" should be strictly construed so as to
exclude solicitations for "religious" purposes. Thereby, we
adhere to the fundamental doctrine underlying virtually all
penal legislations that such interpretation should be adopted
as would favor the accused.
For, it is a well-entrenched rule that penal laws are to be
construed strictly against the State and liberally in favor of the
accused. They are not to be extended or enlarged by
implications, intendments, analogies or equitable

11
considerations. They are not to be strained by construction to
spell out a new offense, enlarge the field of crime or multiply
felonies. Hence, in the interpretation of a penal statute, the
tendency is to subject it to careful scrutiny and to construe it
with such strictness as to safeguard the rights of the accused.
If the statute is ambiguous and admits of two reasonable but
contradictory constructions, that which operates in favor of a
party accused under its provisions is to be preferred. The
principle is that acts in and of themselves innocent and lawful
cannot be held to be criminal unless there is a clear and
unequivocal expression of the legislative intent to make them
such. Whatever is not plainly within the provisions of a penal
statute should be regarded as without its intendment. 13
The purpose of strict construction is not to enable a guilty
person to escape punishment through a technicality but to
provide a precise definition of forbidden acts. 14 The word
"charitable" is a matter of description rather than of precise
definition, and each case involving a determination of that
which is charitable must be decided on its own particular facts
and circumstances. 15 The law does not operate in vacuo nor
should its applicability be determined by circumstances in the
abstract.
Furthermore, in the provisions of the Constitution and the
statutes mentioned above, the enumerations therein given
which include the words "charitable" and "religious" make use
of the disjunctive "or." In its elementary sense, "or" as used in
a statute is a disjunctive article indicating an alternative. It
often connects a series of words or propositions indicating a
choice of either. When "or" is used, the various members of
the enumeration are to be taken separately.16 Accordingly,
"charitable" and "religious," which are integral parts of an
enumeration using the disjunctive "or" should be given
different, distinct, and disparate meanings. There is no
compelling consideration why the same treatment or usage of

these words cannot be made applicable to the questioned

provisions of Presidential Decree No. 1564.
II. Petitioner next avers that solicitations for religious purposes
cannot be penalized under the law for, otherwise, it will
constitute an abridgment or restriction on the free exercise
clause guaranteed under the Constitution.
It may be conceded that the construction of a church is a
social concern of the people and, consequently, solicitations
appurtenant thereto would necessarily involve public welfare.
Prefatorily, it is not implausible that the regulatory powers of
the State may, to a certain degree, extend to solicitations of
this nature. Considering, however, that such an activity is
within the cloak of the free exercise clause under the right to
freedom of religion guaranteed by the Constitution, it becomes
imperative to delve into the efficaciousness of a statutory grant
of the power to regulate the exercise of this constitutional right
and the allowable restrictions which may possibly be imposed
thereon.
The constitutional inhibition of legislation on the subject of
religion has a double aspect. On the one hand, it forestalls
compulsion by law of the acceptance of any creed or the
practice of any form of worship. Freedom of conscience and
freedom to adhere to such religious organization or form of
worship as the individual may choose cannot be restricted by
law. On the other hand, it safeguards the free exercise of the
chosen form of religion. Thus, the constitution embraces two
concepts, that is, freedom to believe and freedom to act. The
first is absolute but, in the nature of things, the second cannot
be. Conduct remains subject to regulation for the protection of
society. The freedom to act must have appropriate definitions
to preserve the enforcement of that protection. In every case,
the power to regulate must be so exercised, in attaining a

12
permissible end, as not to unduly infringe on the protected
freedom. 17
Whence, even the exercise of religion may be regulated, at
some slight inconvenience, in order that the State may protect
its citizens from injury. Without doubt, a State may protect its
citizens from fraudulent solicitation by requiring a stranger in
the community, before permitting him publicly to solicit funds
for any purpose, to establish his identity and his authority to
act for the cause which he purports to represent. The State is
likewise free to regulate the time and manner of solicitation
generally, in the interest of public safety, peace, comfort, or
convenience. 18
It does not follow, therefore, from the constitutional guaranties
of the free exercise of religion that everything which may be so
called can be tolerated. 19 It has been said that a law
advancing a legitimate governmental interest is not necessarily
invalid as one interfering with the "free exercise" of religion
merely because it also incidentally has a detrimental effect on
the adherents of one or more religion. 20 Thus, the general
regulation, in the public interest, of solicitation, which does not
involve any religious test and does not unreasonably obstruct
or delay the collection of funds, is not open to any
constitutional objection, even though the collection be for a
religious purpose. Such regulation would not constitute a
prohibited previous restraint on the free exercise of religion or
interpose an inadmissible obstacle to its exercise. 21
Even with numerous regulative laws in existence, it is
surprising how many operations are carried on by persons and
associations who, secreting their activities under the guise of
benevolent purposes, succeed in cheating and defrauding a
generous public. It is in fact amazing how profitable the
fraudulent schemes and practices are to people who
manipulate them. The State has authority under the exercise

of its police power to determine whether or not there shall be

restrictions on soliciting by unscrupulous persons or for
unworthy causes or for fraudulent purposes. That solicitation of
contributions under the guise of charitable and benevolent
purposes is grossly abused is a matter of common knowledge.
Certainly the solicitation of contributions in good faith for
worthy purposes should not be denied, but somewhere should
be lodged the power to determine within reasonable limits the
worthy from the unworthy. 22 The objectionable practices of
unscrupulous persons are prejudicial to worthy and proper
charities which naturally suffer when the confidence of the
public in campaigns for the raising of money for charity is
lessened or destroyed.23 Some regulation of public solicitation
is, therefore, in the public interest. 24
To conclude, solicitation for religious purposes may be subject
to proper regulation by the State in the exercise of police
power. However, in the case at bar, considering that
solicitations intended for a religious purpose are not within the
coverage of Presidential Decree No. 1564, as earlier
demonstrated, petitioner cannot be held criminally liable
therefor.
As a final note, we reject the reason advanced by respondent
judge for increasing the penalty imposed by the trial court,
premised on the supposed perversity of petitioner's act which
thereby caused damage to the complainant. It must be here
emphasized that the trial court, in the dispositive portion of its
decision, even recommended executive clemency in favor of
petitioner and the other accused after finding that the latter
acted in good faith in making the solicitation from the
complainant, an observation with which we fully agree. After
all, mistake upon a doubtful and difficult question of law can be
the basis of good faith, especially for a layman.

13
There is likewise nothing in the findings of respondent judge
which would indicate, impliedly or otherwise, that petitioner
and his co-accused acted abusively or malevolently. This could
be reflective upon her objectivity, considering that the
complainant in this case is herself a judge of the Regional Trial
Court at Kalookan City. It bears stressing at this point that a
judge is required to so behave at all times as to promote public
confidence in the integrity and impartiality of the
judiciary, 25 should be vigilant against any attempt to subvert its
independence, and must resist any pressure from whatever
source. 26
WHEREFORE, the decision appealed from is hereby
REVERSED and SET ASIDE, and petitioner Martin Centeno is
ACQUITTED of the offense charged, with costs de oficio.
SO ORDERED.
Narvasa, C.J. and Puno, JJ., concur.
Separate Opinions
MENDOZA, J.:
I concur in the result reached in this case that the solicitation
of donations for the repair of a chapel is not covered by P.D.
No. 1564 which requires a permit for the solicitation of
contributions for "charitable or public welfare purposes." My
reasons are three-fold.
First. Solicitation of contributions for the construction of a
church is not solicitation for "charitable or public welfare
purpose" but for a religious purpose, and a religious purpose is
not necessarily a charitable or public welfare purpose. A fund
campaign for the construction or repair of a church is not like
fund drives for needy families or victims of calamity or for the

construction of a civic center and the like. Like solicitation of

subscription to religious magazines, it is part of the
propagation of religious faith or evangelization. Such
solicitation calls upon the virtue of faith, not of charity, save as
those solicited for money or aid may not belong to the same
religion as the solicitor. Such solicitation does not engage the
philantrophic as much as the religious fervor of the person who
is solicited for contribution.
Second. The purpose of the Decree is to protect the public
against fraud in view of the proliferation of fund campaigns for
charity and other civic projects. On the other hand, since
religious fund drives are usually conducted among those
belonging to the same religion, the need for public protection
against fraudulent solicitations does not exist in as great a
degree as does the need for protection with respect to
solicitations for charity or civic projects so as to justify state
regulation.
Third. To require a government permit before solicitation for
religious purpose may be allowed is to lay a prior restraint on
the free exercise of religion. Such restraint, if followed, may
well justify requiring a permit before a church can make
Sunday collections or enforce tithing. But in American Bible
Society v. City of Manila, 1 we precisely held that an ordinance
requiring payment of a license fee before one may engage in
business could not be applied to the appellant's sale of bibles
because that would impose a condition on the exercise of a
constitutional right. It is for the same reason that religious
rallies are exempted from the requirement of prior permit for
public assemblies and other uses of public parks and
streets. 2 To read the Decree, therefore, as including within its
reach solicitations for religious purposes would be to construe
it in a manner that it violates the Free Exercise of Religion
Clause of the Constitution, when what we are called upon to
do is to ascertain whether a construction of the statute is not

14
fairly possible by which a constitutional violation may be
avoided.

The Case

For these reasons, I vote to reverse the decision appealed

from and to acquit petitioner.
Padilla, J., concurs.

Filed against appellant were four Informations,[2] all signed

by Assistant Regional State Prosecutor Ricardo G. Cabaron
and dated September 25, 1997. The first Information[3] was for
maintaining a den for the use of regulated drugs. It reads as
follows:

THIRD DIVISION
[G.R. Nos. 136149-51. September 19, 2000]
PEOPLE OF THE PHILIPPINES, appellee,
vs. WALPAN
LADJAALAM y MIHAJIL
WARPAN, appellant.

Walpan Ladjaalam y Mihajil, also known as Warpan,

appeals before us the September 17, 1998 Decision[1] of the
Regional Trial Court (RTC) of Zamboanga City (Branch 16),
which found him guilty of three out of the four charges lodged
against him.

alias

DECISION
PANGANIBAN, J.:
Republic Act No. 8294 penalizes simple illegal possession
of firearms, provided that the person arrested committed no
other crime. Furthermore, if the person is held liable for murder
or homicide, illegal possession of firearms is an aggravating
circumstance, but not a separate offense. Hence, where an
accused was convicted of direct assault with multiple
attempted homicide for firing an unlicensed M-14 rifle at
several policemen who were about to serve a search warrant,
he cannot be held guilty of the separate offense of illegal
possession of firearms. Neither can such unlawful act be
considered to have aggravated the direct assault.

ThatonoraboutSeptember24,1997,intheCityofZamboanga,
Philippines,andwithinthejurisdictionofthisHonorableCourt,the
abovenamedaccused,WalpanLadjaalambeingthentheownerofa
residentialhouselocatedatRioHondo,[4]this City, conspiring and
confederating together, mutually aiding and assisting x x x his
co-accused wife Nur-in Ladjaalam and Ahmad Sailabbi y
Hajaraini, did then and there wilfully, unlawfully and feloniously,
maintain said house as a den, where regulated drug [was]
used in any form.[5]
The second Information[6] charged appellant with illegal
possession of firearms and ammunition. We quote it below:
ThatonoraboutSeptember24,1997,intheCityofZamboanga,
Philippines,andwithinthejurisdictionofthisHonorableCourt,the
abovenamedaccused,conspiringandconfederatingtogether,
mutuallyaidingandassistingwithoneanother,withoutany
justifiablereasonorpurposeotherthantouseitinthecommissionof
crime,didthenandthere,wilfully,unlawfully,andfeloniouslyhave
intheirpossessionandundertheircustodyandcontrol,thefollowing
weapons,towit:one(1)M14riflewithSN1555225withmagazines
andseven(7)roundsofliveammunition;two(2)magazineswith

15
twenty(20)andtwenty[one](21)roundsoflive[ammunition];one
(1)homemadecaliber.38revolverwithfive(5)liveammunition;
one(1)M79(single)riflewithpouchandwithfive(5)empty
shell[s];one(1)homemadecaliber.38withSN311092withfive
liveammunitionandoneemptyshellof[a]cal.38xxxSmithand
Wesson;two(2).38CaliberpaltikrevolverwithSerialNumber
311092andonedefacedM79grenadelauncherpaltik,withoutfirst
havingobtainedthenecessarylicenseandorpermitthereforfrom
authoritiesconcerned,inflagrantviolationoftheaforementioned
law.[7]
[8]

The third Information, for multiple attempted murder with

direct assault, was worded thus:
ThatonoraboutSeptember24,1997,intheCityofZamboanga,
Philippines,andwithinthejurisdictionofthisHonorableCourt,the
abovenamedaccusedbeingthenarmedwithM14ArmaliteRifles,
M16ArmaliteRiflesandotherassortedfirearmsandexplosives,
conspiringandconfederatingtogether,mutuallyaidingandassisting
xxxoneanotherandwithintenttokill,didthenandtherewilfully,
unlawfullyandfeloniouslytryandattempttokillSPO1WILLIAM
B.JONES,JR.,PO3ENRIQUEC.RIVERA[,]SPO1AMADOA.
MIRASOL,JR.,andSPO1RICARDOJ.LACASTESANTOS,in
thefollowingmanner,towit:bythenandtherefiringtheirM14xx
xArmaliteRifles,M16ArmaliteRiflesandotherassortedfirearms
andexplosives,aimedanddirectedatthefatalpartsofthebodiesof
theabovenamedpoliceofficers,wellknowntotheaccusedas
membersofthePhilippineNationalPolice,ZamboangaCityPolice
Office,andassuch,agentsofapersoninauthority,whoatthetime
oftheattackwereengagedintheperformanceoftheirduties,thatis,
ontheoccasionwhensaidofficerswereabouttoservetheSearch
WarrantlegallyissuedbytheRegionalTrialCourt,thisCity,tothe
personoftheaccusedthuscommencingthecommissionofcrimeof
multiplemurderdirectlybyovertacts,andiftheaccuseddidnot
accomplishtheirunlawfulpurpose,thatis,tokilltheabovenamed

PoliceOfficers,itwasnotbyreasonoftheirownvoluntary
desistancebutratherbecauseofthefactthatalltheabovenamed
policeofficerswereabletoseekcoverduringthefiringandwerenot
hitbythebulletsandexplosivesfiredbytheaccusedandalsobythe
factsaidpoliceofficerswereabletowrestlewithtwo(2)ofthe
accusednamely:WalpanLadjaalamyMihajila.k.a.Warpanand
AhmadSailabbiyHajairani,whoweresubduedandsubsequently
placedunderarrest;whereasaccusedPO2NurhakimT.Hadjulawas
abletomakegoodhisescapeandhasremainedatlarge. [9]
In the fourth Information, appellant was charged with
illegal possession of drugs.[10]
On December 21, 1997, the cases against Nur-in
Ladjaalam and Ahmad Sailabbi y Hajaraini were dismissed
upon motion of the Office of the City Prosecutor, which had
conducted a reinvestigation of the cases as ordered by the
lower court. The accused were consequently released from
jail.
The arraignment of appellant on all four (4) charges took
place on January 6, 1998, during which he entered a plea of
not guilty.[11] After pretrial, the assailed Decision was rendered,
the dispositive part of which reads:
WHEREFORE,theCourtfindsaccusedWALPAN
LADJAALAMyMIHAJILa.k.a.WARPAN
1.inCriminalCaseNo.14636,GUILTYBEYOND
REASONABLEDOUBTofViolationofSection15A,ArticleIII,
ofRepublicActNo.6425,otherwiseknownastheDangerousDrugs
Actof1972,asamended,andSENTENCESsaidaccusedtothe
penaltyofRECLUSIONPERPETUAandtopayafineofFIVE
HUNDREDTHOUSAND(P500,000.00)andtopaythecosts;

16
2.InCriminalCaseNo.14637,NOTGUILTYofViolationof
Section16,ArticleIII,inrelationtoSection21,ArticleIV,of
RepublicActNo.6425,otherwiseknownastheDangerousDrugs
Actof1972,asamended,andACQUITShimofsaidcrimewith
costsdeoficio;
3.inCriminalCaseNo.14638,GUILTYBEYOND
REASONABLEDOUBTofthecrimeofIllegalPossessionof
FirearmandAmmunitionpenalizedunderPresidentialDecreeNo.
1866,asamendedbyRepublicAct.No.8294,
andSENTENCESsaidaccusedtosufferanindeterminatepenalty
ofSIX(6)YEARSofprisioncorreccionalasminimumtoEIGHT
(8)YEARSofprisionmayorasmaximumandtopayafine
[of]THIRTYTHOUSAND(P30,000.00)andpaythecosts;
4.inCriminalCaseNo.14639,GUILTYBEYOND
REASONABLEDOUBTofthecrimeofDirectAssaultwith
MultipleAttemptedHomicideandSENTENCESsaidaccusedtoan
indeterminatepenaltyofTWO(2)YEARSandFOUR(4)
MONTHSofprisioncorreccionalasminimumtoSIX(6)
YEARSofprisioncorreccionalasmaximumandtopayafine
ofONETHOUSAND(P1,000.00)andtopaythecosts.(emphasis
intheoriginal)
Hence, this appeal.[12]
The Facts
Prosecutions Version
In its Brief,[13] the Office of the Solicitor General presents
the facts in this wise:

At1:45p.m.ofSeptember24,1997,PO3AllanMarcosObutfiled
anapplicationfortheissuanceofasearchwarrantagainstappellant,
hiswifeandsomeJohnDoes(Exh.C).Afterthesearchwarrantwas
issuedabout2:30p.m.ofthesameday,abriefingwasconducted
insidetheofficeoftheAntiVice/NarcoticsUnitoftheZamboanga
CityPoliceOfficeinconnectionwiththeserviceofthesearch
warrant.ThebriefingwasconductedbySPO2FelipeGaganting,
ChiefoftheAntiVice/NarcoticsUnit.Duringthebriefing,PO3
RenatoDelaPeawasassignedaspresentorofthewarrant.SPO1
RicardoLacastesantosandPO3EnriqueRiveraweredesignatedto
conductthesearch.Otherpolicemenwereassignedasperimeter
guards(TSN,March3,1998,pp.3336).
Afterthebriefing,morethanthirty(30)policemenheadedbyPolice
SuperintendentEdwinSoledadproceededtothehouseofappellant
andhiswifeatRioHondoonboardseveralpolicevehicles(TSN,
March4,1998,p.32;April22,1998,p.54).Beforetheycouldreach
appellantshouse,three(3)personssittingatanearbystoreran
towardsthehouseshouting,[P]olice,raid,raid(Ibid.,March3,1998,
pp.41,4344;April23,1998,p.4).Whenthepolicemenwereabout
ten(10)metersfromthemaingateofthehouse,theyweremetbya
rapidburstofgunfirecomingfromthesecondfloorofthe
house.Therewasalsogunfireatthebackofthehouse(Ibid.,March
5,1998,pp.1416).
SPO1Mirasol,SPO2Lacastesantos,PO3Rivera,andPO3DelaPea
whowerewiththefirstgroupofpolicemensawappellantfirean
M14rifletowardsthem.Theyallknewappellant.Whentheywere
firedupon,thegroup,togetherwithSPO2Gaganting,PO3Obutand
SuperintendentSoledad,soughtcoverattheconcretefenceto
observethemovementsatthesecondfloorofthehousewhileother
policemensurroundedthehouse(Ibid.,March4,1998,pp.5051).
Infrontofthehousewasanextensionbuildingconnectedtothe
concretefence(Ibid.,pp.4546,5759,7376).Gaganting,Mirasol,

17
Lacastesantos,Gregorio,andObutenteredthedooroftheextension
building.Gagantingopenedthemain(steel)gateofthehouse.The
othermembersoftheteamthenentered.LacastesantosandMirasol
enteredthehousethroughthemaindoorandwentinsidethesalaof
thegroundfloorwhileotherpolicemensurroundedthehouse.Two
(2)oldwomenwereinthesalatogetherwithayounggirlandthree
(3)children.Oneoftheoldwomentookthechildrentothesecond
floorwhiletheyounggirlremainedseatedatthecorner(Ibid.,pp.
1921).

AfterLacastesantosandMirasolenteredappellantshouse,Rivera,
DelaPea,GregorioandObutfollowedandenteredthehouse.After
identifyingthemselvesasmembersofthePNPAntiVice/Narcotics
Unit,Obutpresentedtotheoldwomenacopyofthesearch
warrant.DelaPeaandRiverathensearchedappellantsroomonthe
groundfloorinthepresenceofPunongBarangayElhano(TSN,
March3,1998,pp.4143).Ontopofatablewasapencilcase(Exh.
J)withfifty(50)foldedaluminumfoilsinside(Exhs.J1toJ50),
eachcontainingmethamphetaminehydrochlorideorshabu.

LacastesantosandMirasolproceededtothesecondfloorwherethey
earliersawappellantfiringanM14rifleatthemthroughthe
window.Whiletheyweregoingupstairs,appellantnoticedtheir
presence.Hewentinsidethebedroomand,afterbreakingand
removingthejalousies,jumpedfromthewindowtotheroofofa
neighboringhouse.Seeingthis,Mirasolrusheddownstairsandasked
helpfromtheothermembersoftheraidingteamtoarrest
appellant.Lacastesantoswenttothesecondfloorandshoutedtothe
policemenoutsidenottofireinthedirectionofthesecondfloor
becausetherewerechildren.MirasolandSPO1CesarRabuya
arrestedappellantatthebackofhishouseafterabriefchase(Ibid.,
pp.2123).

Otheritemswerefoundduringthesearch,namely,assortedcoinsin
differentdenominations(Exh.W;TSN,April28,1998,pp.2325),
one(1)homemade.38caliberrevolver(Exh.B2)withfive(5)live
[ammunition],one(1)M79singleriflewith[a]pouchcontaining
five(5)emptyshellsofanM79rifle(Exh.B4),andone(1)empty
shellofanM14rifle(TSN,April23,1998,pp.3032).

Atthesecondfloor,LacastesantossawanM14rifle(Exh.B3)with
magazineontopofthesofaatthesalaonthesecondfloor(Ibid.,P.
27).TherifleboreSerialNo.1555225.Heremovedthemagazine
fromtherifleandthebulletinsidethechamberoftherifle.He
countedseventeen(17)liveammunitioninsidethemagazine.Hesaw
two(2)moreM14riflemagazinesonthesofa,onewithtwenty(20)
liveammunition(Exh.G3)andanotherwithtwentyone(21)live
ammunition(Exh.G4).Helikewisesawthree(3)M16rifle
magazines(Exh.G2)inacorneratthesecondfloor(TSN,March5,
1998,pp.2332,5357).

RinoBartolomeLocsonwasaninformeroftheAntiVice/Narcotics
UnitoftheZamboangaPolice.[O]nthemorningofSeptember24,
1997,hewasinstructedbySPO2Gagantingtogotoappellants
housetobuyshabu.Locsonknewappellantasasellerofshabu
(TSN,April22,1998,p.5)andhadbeentoappellantshouseabout
fifteen(15)timesbefore.HewenttoRioHondoandarrivedat
appellantshouseat3:20p.m.HeboughtP300.00worthofshabu
fromappellant.Thelattergotthree(3)decksofshabufromhiswaist
bag.AppellantinstructedLocsontogobehindthecurtainwhere
therewasatable.Thereweresix(6)personsalreadysmoking.There
wasalightedkerosenelampmadeofamedicinebottleplacedonthe
table.TheyaskedLocsontosmokeshabuandLocsonobliged.He
placedthethree(3)decksofshabuheboughtonthetable(Ibid.,pp.
815).
Whiletheyweresmokingshabu,Locsonheardgunfirecomingfrom
appellantshouse.Theyallstoodandenteredappellantscompound
butwereinstructedtopass[through]theotherside.Theymet

18
appellantatthebackofhishouse.Appellanttoldthemtoescape
becausethepolicearealreadyhere.Theyscamperedandranaway
becausetherewerealreadyshots.Locsonjumpedoverthefenceand
rantowardstheseashore.UponreachingaplaceneartheFisheries
School,hetookatricycleandwenthome(Ibid.,pp.1719).
Thefollowingday,September25,1997,hewenttothepolicestation
andexecutedanaffidavit(Exh.M)narratingwhattranspiredat
appellantshouse[o]ntheafternoonofSeptember24,1997.
Afterthesearchandbeforereturningtothepolicestation,P03Dela
PeapreparedaReceiptforPropertySeized(Exh.P&3)listingthe
propertiesseizedduringthesearch.ThereceiptwassignedbyDela
Peaastheseizureofficer,andbyPunongBarangayHadjiHussin
ElhanoandradioreporterJunCayonaaswitnesses.Acopyofthe
receiptwasgiventoappellantbutherefusedtoacknowledgethe
propertiesseized(TSN,April23,1998,pp.1112).
AnexaminationconductedbyPoliceInspectorMercedesD.Diestro,
ForensicChemistofthePNPCrimeLaboratoryServiceOffice9,on
theparaffincaststakenfrombothhandsofappellantyieldedpositive
forgunpowdernitrates(Exh.A3),givingrisetothepossibilitythat
appellanthadfiredagunbeforetheexamination(TSN,March3,
1998,p.11).Gunpowderresidueexaminationsconductedon
September26,1997showedthatthefollowingfirearmswerefired
(Exh.B5):a.38caliberrevolver(homemade)withSerialNo.
311092(Exh.B1),another.38caliberrevolver(homemade)without
aserialnumber(Exh.B2),aCal.7.62mmM14U.S.riflewith
SerialNo.1555225(Exh.B3),andanM79riflewithoutaserial
number(Exh.B4).Theywerefiredwithinfive(5)dayspriortothe
examination(TSN,March3,1998,pp.1621).
Withrespecttothecrystallinesubstances,anexaminationconducted
byPoliceInspectorSusanM.Cayabyab,likewiseaForensicChemist
ofthePNPCrimeLaboratoryServiceOffice9,onthefifty(50)

piecesoffoldedaluminumfoilseachcontainingwhitecrystalline
granuleswithatotalweightof1.7426grams(Exh.J1toJ50)
yieldedpositiveresultsforthepresenceofmethamphetamine
hydrochloride(shabu)(Exh.L).However,theexaminationofone(1)
crystallinestoneweighing83.2674grams(Exh.K)yieldednegative
resultsforthepresenceofmethamphetaminehydrochloride(Exh.L).
TherecordsoftheRegionalOperationandPlansDivisionofthe
PNPFirearmandExplosiveSectionshowthatappellanthadnot
applied/filedanyapplicationforlicensetopossessfirearmand
ammunitionorxxxbeengivenauthoritytocarry[a]firearmoutside
ofhisresidence(Exh.X)[14]
Defenses Version
Appellant Ladjaalam agrees with the narration of facts
given by the lower court. [15] Hence, we quote the pertinent
parts of the assailed Decision:
AccusedWalpanLadjaalamyMihajila.k.a.Warpan,30yearsold,
married,gavehisoccupationassmuggling(tsn,p.2,May4,
1998).HeusedtogotoLabuaninMalaysiaandbringcigarettesto
thePhilippineswithoutpayingtaxes(tsn,pp.4041,id).Hesaidthat
histruename[was]AbdulNasserAbdurakmanandthatWarpanor
WalpanLadjaalam[was]onlyhisalias.However,headmittedthat
morepeoplekn[e]whimasWalpanLadjaalamratherthanAbdul
NasserAbdurakman(tsn.pp.3940;4647,id).Hetestifiedthat[o]n
theafternoonofSeptember24,1997,whenhewasarrestedbythe
police,hewassleepinginthehouseofDandao,arelativeofhis
wife.Hewasalone.HesleptinDandaoshouseandnotinhishouse
becausetheyha[d]asortofaconferenceasDandaosdaughterwas
leavingforSaudiArabia.Henoticedthepresenceofpolicemenin
hisneighborhoodatAplaya,RioHondowhenheheardshots.He
wokeupandwentoutofthehouseandthatwasthetimethathewas
arrested.Hesaidhewasarrestedxxx[at]theothersideofmyhouse;

19
attheothersideofthefencewhereIwassleeping.xxx.Attheback
ofmyhouse(tsn,p.7,id.).Hedoesnotknowwhoarrested
himconsideringthattheonewhoarrestedmedoesnothave
nameplate.Hewasarrestedbyfour(4)persons.Notoneofthose
whoarrestedhimtestifiedinCourt.Hewashandcuffedandplaced
insideajeepparkedatRioHondoElementarySchool.Accordingto
him,hedidnotfireagunatthepolicemenfrom[t]hesecondfloorof
hishouse.Hesaidthepolicemen[were]theone[s]whofire[d]at
us(tsn,p.5,id.).Ifhefiredagunatthepolicemenforsurethey
[would]die[b]ecausethedoorisverynearxxxthevicinityofmy
house.HedoesnotowntheM14rifle(Exh.B3)whichaccordingto
policemen,heusedinfiringatthem.Thegundoesnotbelongto
him.Hedoesnothaveagunlikethat(tsn,p.15,id.).Apoliceman
alsoownsanM14riflebuthedoesnotknowthepoliceman(tsn,pp.
1617,id).HesaidthattheM79rifle(Exh.B4),thethree(3)empty
M16riflemagazines(Exh.G;G1toG2),thetwo(2)M14
magazineswithliveammunition(Exh.G3;G4);thetwo(2)caliber
.38revolvers(Exhs.B1;B2),thefifty(50)aluminumfoilseach
containingshabu(Exhs.J1toJ50)placedinsideapencilcase(Exh.
J,theassortedcoinsplacedinsideabluebag(Exh.W)andthewhite
crystallinestone(Exh.K)alldonotbelongtohim.Hesaidthatthe
policemenjustproducedthosethingsastheirevidence.Thefirearms
donotbelongtohim.Theywerebroughtbythepolicemen(tsn,p.
43,May4,1998).Regardingthebluebagcontainingassortedcoins,
hesaid:thatisnotours,Ithinkthis(is)theirs,xxxtheyjustbrought
thatastheirevidence(tsn,pp.1524,id.)
WalpanLadjaalamdeclaredtherewereoccupantswhowererenting
hisextensionhouse.Heaffirmedthatheownsthathouse.Four(4)
personswerestayingintheextensionhouse.Hecouldonly
recognizethehusbandwhosenameisMomoy.Theyarefrom
Jolo.Theylefttheplacealreadybecausetheywereafraidwhenthe
policeraidedtheplace.(tsn,pp.810,May4,1998).Hedoesnot
knowprosecutionwitnessRinoLocsonyBartolome.Although
Locsonrecognizedhim,inhiscasehedoesnotknowLocsonandhe

doesnotrecognizehim(tsn,p.11,id).Hedidnotsellanythingto
Locsonanddidnotentertainhim.Heisnotsellingshabubuthe
knowsforafactthatthereareplentyofpersonwhoareengagedin
sellingshabuinthatplace,inthatareaknownasAplaya,Rio
Hondo.OneofthemisHadjiAgbi(tsn,pp.1114,id).
AfterhisarrestWalpanLadjaalamwasbroughttothepolicestation
wherehestayedforonedayandonenightbeforehewastransferred
totheCityjail.Whileatthepolicestation,hewasnotabletotakea
bath.Hesmokestwopacksofcigaretteaday.Whilehewasatthe
policestation,hesmoked[a]cigarettegiventohimbyhisyounger
sister.Helightedthecigaretteswith[a]match.Fromthepolice
station,hewasbroughttothePNPRegionalOfficeatR.T.Lim
Boulevardwherehewassubjecttoparaffinexamination(tsn,pp.24
26,May4,1998).
Duringtheraidconductedonhishouse,hiscousinBoyLadjaalam,
AtingSapadi,andJecar(Sikkal)Usman,theyoungerbrotherofhis
wifewerekilled.WalpanLadjaalamsaidthathesawthatitwasthe
policemanwhoshotthem[,]onlyIdonotknowhisname.Theywere
killedatthebackofhishouse.Hesaidthatnochargeswerefiled
againsttheoneresponsiblefortheirdeath(tsn,pp.3033May4,
1998).
AnilhawaAhamad,moreorless80yearsold,awidowwasinthe
houseofWalpanLadjaalamwhomhecallsHadjiIdatthetimethe
policeraidedthehouse.SheisthemotherofAhmaSailabbi.Shewas
togetherwithBaboDandan,twosmallchildrenandahelper
whensoldiersenteredthehouse.(W)hentheyarrived,theykepton
firing(theirguns)eveninsidethehouse(tsn,p.5,May5,
1998).Theywerearmedwithshortandlongfirearms.Theysearched
thehouseandscatteredthingsandgotwhattheywanted.They
enteredtheroomofWalpanLadjaalam.Theytriedtoopenabag
containingjewelry.WhenAnilhawatriedtobringthebagoutsidethe
room,theygrabbedthebagfromherandpokedagunather.Atthat

20
timeWalpanLadjaalamwasnotinthehouse.AhamadSailabbiwas
alsonotinthehouse.ASearchWarrantwasshowntoAnilhawa
afterthesearchwasconductedandjustbeforethepolicemenleftthe
place.AnilhawaAhamadsaidthatitwasalreadylateinthe
afternoon[;]beforetheyleftthatwasthetimetheSearchWarrant
(was)giventousbyxxxBarangayCaptainHussinElhano(tsn,pp.6
8,May5,1998).BarangayChairmanElhanoarrivedalreadylatein
theafternoon,almostsundown(tsn,p.9,id).Anilhawdeclaredthat
asidefromabagcontainingjewelryandabagfullofmoney,shehad
notseenanythingelsethatwastakenfromWalpanLadjaalamshouse
(tsn,pp.912,id).
Akmad(Ahmad)Sailabbi,37yearsold,marriedtestifiedthatabout
4:00oclock[o]ntheafternoonofSeptember24,1997,hawas
standinginfrontofhishousewhenpolicemenarrivedand
immediatelyarrestedhim.HewasabouttogototheCityProperto
buyarticleshewasintendingtobringtoSabah.Hehadaround
P50,000.00placedinsideawaistbagtiedaroundhiswaist.The
policementoldhimtoliedowninpronepositionandapoliceman
searchedhisback.TheypulledhiswaistbagandtookhisDiaStar
wristwatch.Hewasshotthreetimesandwashitontheforehead
leavingascar.Hisinjurywasnottreated.Hewastakentothepolice
stationwherehewasdetainedforonedayandonenight.Hewas
detainedattheCityJailforthreemonthsandfivedaysafterwhich
hewasreleased(tsn,pp.2529,May5,1998).
MelbaUsma,20yearsold,awidow,testifiedthat[o]ntheafternoon
ofSeptember24,1997,shewasinthehouseofherparentslying
togetherwithherhusbandSikkalUsma.Thereisonlyonehouse
betweenherparentshouseandthehouseofWalpanLadjaalam.Her
husbandSikkalUsmanisthebrotherofNurinLadjaalam,Walpans
wife.WhenMelbaheardshots,shewentdownstairs.Apoliceman
waslookingforherhusband.Thepolicemancalledher
husband.Whenherhusbandwentdown,hewasinstructedbythe
policemantoliedowninproneposition.Thenthepolicemanshother

husband.Thepolicemanhadtwoothercompanionswhoalsoshot
herhusbandwhilehewaslyingdowninproneposition(tsn,pp.27,
May5,1998).
MurkisaUsman,30yearsold,married,declaredthat[o]nthe
afternoonofSeptember24,1997,shewassittingatthedoorofher
housewatchingherchildrenplayingwhenamotorcyle,drivenbya
person,stoppednearherhouse.ThedriverwasGagantingwhomshe
calledasoldier.Hewentdownfromhismotorcycle,pulledagun
andpokeditatMurkisa.Murkisastoodupandraisedherhands.She
gotherchildrenandwhenshewasabouttoentertheroomofher
house,Gagantingagainpokedagunatherandtherewasashot.Asa
resultoffiring,threepersonsdied,namely,SikkalUsman,Boy
LadjaalamandAtipSapaliSali(tsn,pp.810,May5,1998).
BarangayCaptainHadjiHussinElhano,51yearsold,testifiedthat
about4:00oclock[o]ntheafternoonofSeptember24,1997,hewas
fetchedbytwopolicemenatCatabanganwherehewasattendinga
seminar.Becauseoftrafficalongtheway,theyarrivedattheRio
Hondoalreadylateintheafternoon.Hesawpolicemenwerealready
insidethehouse.Uponenteringthegate,hesawWalpanatthegate
alreadyhandcuffed.Walpancalledhimbutthepoliceadvisedhim
nottoapproachWalpan.Thesearchwasalreadyoverandthings
werealreadytakeninsidethehouse.Whenhewentinsidethehouse,
hesawthethingsthatthey(policemen)searched,thefirearmsand
theshabu(tsn,p.17.May8,1998).HedidnotseetheSearch
Warrant.Whatwasshowntohimwerethethingsrecoveredduring
thesearchwhichwerebeinglisted.Theywerebeingcountedand
placedonatable.Uponseeingthethingsthatwererecoveredduring
thesearch,Ijustsignedthereceipt(Exh.P;P1)ofthethingsxxx
takenduringthesearch(tsn,pp.1718.May8,1998).Hesawthree
deadbodiesatthesideofthefencewhenhewenttotheothersideof
thehouse.ThethreepersonswerekilledoutsidethefenceofWalpan
Ladjaalam(tsn,p.18,id).[16]

21
The Trial Courts Ruling
The trial court observed that the house of appellant was
raided on September 24, 1997 by virtue of Search Warrant No.
20 issued on the same day. However, the lower court nullified
the said Warrant because it had been issued for more than
one specific offense,[17] in violation of Section 3, Rule 126 of
the Rules of Court.[18] The court a quo ruled:
ItshouldbestatedattheoutsetthatSearchWarrantNo.20is
totallynullandvoidbecauseitwasissuedformorethanonespecific
offensexxxcontrarytoSection3,Rule1[2]6oftheRulesofCourt
whichprovidesthatAsearchwarrantshallnotissuebutupon
probablecauseinconnectionwithonespecificoffensexxx.In
Tambasanvs.People,246SCRA184(1995),theSupremeCourt
ruledthatasearchwarrantformorethanoneoffenseascattershot
warrantviolatesSection3,Rule126ofthe[R]evisedRulesof
Courtandistotallynullandvoid.[19](emphasisintheoriginal)
Nevertheless, the trial court deemed appellants arrest as
valid. It emphasized that he had shot at the officers who were
trying to serve the void search warrant. This fact was
established by the testimonies of several police officers,[20] who
were participants in the raid, and confirmed by the laboratory
report on the paraffin tests conducted on the firearms and
appellant.[21] Additionally, the judge noted that Appellant
Ladjaalam, based on his statements in his Counter Affidavit,
impliedly contradicted his assertions in open court that there
had been no exchange of gunfire during the raid. [22] The trial
court concluded that the testimonies of these officers must
prevail over appellants narration that he was not in his house
when the raid was conducted.
Prescinding from this point, the court a quo validated the
arrest of appellant, reasoning thus:

Underthecircumstances,thepolicemenhadauthoritytopursueand
arrestWalpanLadjaalamandconfiscatethefirearmheusedin
shootingatthepolicemenandtoenterhishousetoeffectsaidarrest
andconfiscationofthefirearm.UnderRule113,Section5(a),ofthe
RulesofCourt,Apeaceofficeroraprivatepersonmay,withouta
warrant,arrestapersonxxx(w)heninhispresence,thepersontobe
arrestedhascommitted,isactuallycommitting,orisattemptingto
commitanoffense.Anoffenseiscommittedinthepresenceorwithin
theviewofanofficer,withinthemeaningoftheruleauthorizingan
arrestwithoutawarrant,whentheofficerseestheoffense,although
atadistance,orhearsthedisturbancescreatedtherebyandproceeds
atoncetothescenethereof.Atthetimethepolicemenenteredthe
houseofaccusedWalpanLadjaalamafterhehadfiredshotsatthe
policemenwhointendedtoservetheSearchWarranttohim,the
accusedwasengagedinthecommissionofacrime,andwaspursued
andarrestedafterhecommittedthecrimeofshootingatthe
policemenwhowereabouttoservetheSearchWarrant. [23]
As a consequence of the legal arrest, the seizure of the
following was also deemed valid: the M14 rifle (with a
magazine containing seventeen live ammunition)[24] used by
appellant against the police elements, two M14 magazines,
and three other M16 rifle magazines. [25] The trial court
observed that these items were in plain view of the pursuing
police officers. Moreover, it added that these same items were
evidence [of] the commission of a crime and/or contraband
and therefore, subject to seizure[26] since appellant had not
applied for a license to possess firearm and had not been
given authority to carry firearm outside his residence.[27]
For being incredible and unsupported by evidence,
appellants claim that the items that were seized by the police
officers had been planted was disbelieved by the trial court.It
ruled that if the police officers wanted to plant evidence to
incriminate him, they could have done so during the previous
raids or those conducted after his arrest. To its mind, it was

22
unbelievable that they would choose to plant evidence, when
they were accompanied by the barangay chairman and a radio
reporter who might testify against them. It then dismissed
these allegations, saying that frame-up, like alibi, was an
inherently weak defense.[28]
The trial court also convicted the accused of the crime of
maintaining a drug den. It reasoned as follows:
ThetestimonyofRinoBartolomeLocson,corroboratedbySPO1
RicardoLacastesantosandSPO1AmadoMirasol,Jr.clearly
establishedthatWalpanLadjaalamoperatedandmaintainedadrug
deninhisextensionhousewhereshabuormethamphetamine
hydrochloride,aregulateddrug,wassold,andwherepersonsor
customersboughtandusedshabuormethamphetamine
hydrochloridebyburningthesaidregulateddrugandsniffingits
smokewiththeuseofanaluminumfoiltooter.Adrugdenisalairor
hideawaywhereprohibitedorregulateddrugsareusedinanyform
orarefound.Itsexistence[maybe]provednotonlybydirect
evidencebutmayalsobeestablishedbyproofoffactsand
circumstances,includingevidenceofthegeneralreputationofthe
house,oritsgeneralreputationamongpoliceofficers.The
uncorroboratedtestimonyofaccusedWalpanLadjaalam
a.k.a.Warpanthathedidnotmaintainanextensionhouseoraroom
wheredruguserswhoallegedlybuyshabufromhiminhalesor
smokesshabucannotprevailoverthetestimoniesofLocson,SPO1
Lacastesantos,andSPO1Mirasol.Headmittedthatheistheowner
oftheextensionhousebutheallegedthattherewerefour(4)
occupantswhorentedthatextensionhouse.Heknewthenameof
onlyoneofthefouroccupantswhoareallegedlyfromJolo,acertain
Momoy,thehusband.Asidefrombeinguncorroborated,Walpans
testimonywasnotelaboratedbyevidenceastowhenorforhowlong
wastheextensionhouserented,theamountofrentalpaid,orbyany
otherdocumentshowingthattheextensionhousewasinfact
rented.ThedefenseofdenialputupbyaccusedWalpanLadjaalam
a.k.a.'Warpanisaweakdefense.Denialistheweakestdefenseand

cannotprevailoverthepositiveandcategoricaltestimoniesofthe
prosecutionwitnesses.Denials,ifunsubstantiatedbyclearand
convincingevidence,arenegativeandselfservingevidencewhich
deservenoweightinlawandcannotbegivenevidentiaryweight
overthetestimonyofcrediblewitnesseswhotestifyonaffirmative
matters.Asbetweenthepositivedeclarationoftheprosecution
witnessesandthenegativestatementsoftheaccused,theformer
deservemorecredence.[29]
In conclusion, the trial court explained appellants liability
in this manner:
xxx.TheactoftheaccusedinfiringanM14rifletothepolicemen
whowereabouttoenterhishousetoserveasearchwarrant
constitutesthecrimeofdirectassaultwithmultipleattempted
homicide[,]notmultipleattemptedmurderwithdirectassault[,]
consideringthatnopolicemanwashitandinjuredbytheaccusedand
nocircumstancewasprovedtoqualifytheattemptedkillingto
attemptedmurder.
TheaccusedWalpanLadjaalama.k.a.Warpancannotbeheldliable
[for]thecrimeofViolationofSection16,ArticleIII,inrelationto
Section21,ArticleIV,ofRepublicAct6425otherwiseknownasthe
DangerousDrugsActof1992,asamended,becausethefifty(50)
piecesoffoldedaluminumfoilshavingatotalweightof1.7426
gramsallcontainingmethamphetaminehydrochlorideorshabu
allegedlyfoundinhishouseareinadmissibleasevidenceagainsthim
consideringthattheywereseizedafter[a]searchconductedbyvirtue
ofSearchWarrantNo.20whichistotallynullandvoidasitwas
issuedformorethanoneoffense,andwerenotfoundinplainviewof
thepoliceofficerswhoseizedthem.Neithercouldtheaccusedbe
heldliableforillegalpossessionoffirearmsandammunitionexcept
forthe(1)M14riflewithSerialNumber1555225andwithmagazine
containingfifteen(15)liveammunitionandtwomoreM14rifle
magazineswithtwenty(20)andtwentyone(21)liveammunition

23
respectivelyconsideringthatthepolicemenwhorecoveredorseized
theotherfirearmsandammunitiondidnottestifyincourt.Theblue
bagcontainingassortedcoinscannotbereturnedtotheaccused
WalpanLadjaalama.k.a.Warpanbecauseaccordingtotheaccused
thebluebagandassortedcoinsdonotbelongtohim[;]insteadthe
saidassortedcoinsshouldbeturnedovertotheNationalTreasury. [30]

of frame-up. In addition, we shall also discuss the proper

crimes and penalties to be imposed on appellant.

The Issues

First Issue: Denial of Request for Ocular Inspection

In his Brief, appellant submits the following Assignment of

Errors:
I
ThetrialcourterredwhenitconcludedthatappellantWalpan
LadjaalamyMihajil[had]firedfirstatthepoliceofficerswhowent
tohishousetoserveasearchwarrantuponhimwhichledtoan
exchangeoffirebetweenLadjaalamandthepoliceofficer.
II
Thetrialcourterredwhenitdeniedtheappellanttherightand
opportunityforanocularinspectionofthesceneofthefirefightand
wherethehouseoftheappellant[was]located.
III
Thetrialcourterredwhenitruledthatthepresumptionofregularity
intheperformanceoftheirduties[excluded]theclaimofthe
appellantthatthefirearmsandmethamphetaminehydrochloride(i.e.
shabu)wereplantedbythepolice.[31]
In the interest of simplicity, we shall take up these
issues seriatim: (a) denial of the request for ocular inspection,
(b) credibility of the prosecution witnesses, and (c) the defense

The Courts Ruling

The appeal has no merit.

Appellant insists that the trial court erred in denying his

request for an ocular inspection of the Ladjaalam
residence. He argues that an ocular inspection would have
afforded the lower court a better perspective and an idea with
respect to the scene of the crime.[32] We do not agree.
We fail to see the need for an ocular inspection in this
case, especially in the light of the clear testimonies of the
prosecution witnesses.[33] We note in particular that the
defense had even requested SPO1 Amado Mirasol Jr. to
sketch the subject premises to give the lower court a fairly
good idea of appellants house.[34] Viewing the site of the raid
would have only delayed the proceedings.[35] Moreover, the
question whether to view the setting of a relevant event has
long been recognized to be within the discretion of the trial
judge.[36] Here, there is no reason to disturb the exercise of that
discretion.[37]
Second Issue: Credibility of Prosecution Witnesses
Appellant, in essence, questions the credibility of the
prosecution witnesses.[38] Suffice it to state that the trial courts
assessment of their credibility is generally accorded respect,
even finality.[39] After carefully examining the records and
finding no material inconsistencies to support appellants claim,

24
we cannot exempt this case from the general rule. [40] Quite the
contrary, the testimonies of these witnesses positively showed
that appellant had fired upon the approaching police elements,
and that he had subsequently attempted to escape. SPO1
Amado Mirasol Jr.[41] testified thus:
PROSECUTOR NUVAL:
Q: And, this trail is towards the front of the house of the
accused?

Q: Now, when this gate was opened, you said you went
inside the house, right?
A: Yes.
Q: What did you see inside the house?
A: I, together with SPO1 Ricardo Lacastesantos, entered
the main door of the house of Walfran [sic] Ladjaalam
at the ground floor. We went inside the sala on the
ground floor of his house[;] I saw two old woman.

A: Yes.

xxxxxxxxx

Q: And its there where you were met by a volley of fire?

A: Yes, Your Honor.

PROSECUTOR NUVAL:
Q: Now, what did you do with these two old women?

COURT:
Q: How far were you from the concrete fen[c]e when you
were met by a volley of fire? ... You said you were fired
upon?
A: More or less, five (5) meters.
xxxxxxxxx

A: I did not mind those two old women because those two
women were sitting on the ground floor. I was
concentrating on the second floor because Ladjaalam
was firing towards our group so, I, together with
Ricardo Lacastesantos, went upstairs to the second
floor of the house.
Q: Were you able to go to the second floor of the house?

PROSECUTOR NUVAL:

A: Yes.

Q: Now, you said you were able to enter the house after the
gate was opened by your colleague Felipe
Gaganting ... I will reform that question.

Q: What happened when you were already on the second

floor?

Q: Who opened the gate Mr. Witness?

A: SPO2 Felipe Gaganting, Efren Gregorio and Allan
Marcos Obut.
Q: And, at that time you were hiding at the concrete fence?
A: Yes.

A: While we were proceeding to the second floor, Walfan

[sic] Ladjaalam, noticed our presence and immediately
went inside the bedroom [o]n the second floor and he
went immediately and jumped from the window of his
house x x x leading to the roof of the neighbors house.
xxxxxxxxx
COURT:
Reform. That is leading

25
Q: What happened when you entered and he jumped to the
roofing of the neighbors house?

Q: Can you still identify that M14 rifle which you said you
recovered from the sale set?

A: Immediately, I myself, we immediately went downstairs

and asked the assistance of the members of the
raiding team to arrest Walfan Ladjaalam.

A: Yes.

xxxxxxxxx
PROSECUTOR NUVAL:

Q: Why can you identify that?

A: The Serial No. of M14 is 1555225 and I marked it with
my initial.

Q: Were you able to go down?

Q: Now, I have here M14 rifle[;] will you please tell us where
is the Serial No. of this?

A: Yes.

A: 1555225 and I put my initial, RJL.

Q: What happened when you were there?

FISCAL NUVAL:

A: We immediately went out and I asked the assistance of

the members of the raiding team and the investigator of
the unit especially SPO1 Cesar Rabuya. I was able to
manage to arrest Walfan Ladjaalam.[42]

This is already marked as our Exhibit B-3 with magazine,

one magazine and seven round [ammunition].

What happened thereafter was narrated by Senior Police

Officer Ricardo Lacastesantos,[43] as follows:

A: When I recovered it I removed the bullets inside the

chamber[.] I removed the magazine and I turned it over
to the investigator.

Q: What did you notice [o]n the second floor?

Q: After recovering this, what did you do with this firearm?

Q: Where did you turn it over?

A: I went where the firing came from, so, I saw [an] M14
rifle and I shouted from the outside, do not fire at the
second floor because there [are] a lot of children here.

A: At the crime scene.

Q: Now, that rifle you said [was an] M14, where did you find
this?

A: Yes.

A: At the sala set.

Q: This sala set where is this located?
A: Located [on] the second floor of the house.
Q: Is there a sala [o]n the second floor?
A: Yes.

Q: Now, that magazine, can you still identify this?

Q: Why?
A: I put x x x markings.
xxxxxxxxx
COURT:
So, a[si]de from the magazine attached to the M14 rifle you
found six more magazines?

26
A: Yes, so, all in all six magazines, three empty M16 rifle
magazines and three M14.
Q: The M16 magazines [were] empty?

A: The result of the examination [was] that both hands of

the subject person, ha[d] presence of gun powder
nitrates.

A: Empty.

Q: What do you mean Madam Witness, what does that

indicate?

Q: How about the M14?

A: It indicates there is presence of powder nitrates.

A: Found with [ammunition].

Q: Can we conclude that he fired a gun?

xxxxxxxxx
Q: So, where are the three M16 magazines?
A: In the corner.
Q: What did you do with [these] three magazines of M16?
A: I turned [them] over to the investigator.
Q: Can you identify them?
A: Yes, because of my initials[.]
Q: Where are your initials?
A: On the magazines.
Q: RJL?
A: RJL.[44]
These were confirmed by the results of the paraffin tests
conducted on appellant and on the weapons seized during the
raid. Both of his hands as well as the weapons, particularly the
M-14 which he had used, were positive for gunpowder
nitrate. Police Inspector Mercedes Delfin-Diestro explained in
open court:
Q: Okay. Now, what was the result of your examination,
Madam Witness?

A: I cannot conclude that he fired a gun because there are

so many circumstances [why] a person [would be]
positive on his hands for gun powder nitrates.
Q: But, most likely, he fired a gun?
A: Yes.
xxxxxxxxx
PROSECUTOR NUVAL:
Q: What about, Madam Witness this Exhibit B-3, which is
the M14 rifle. What did you do with this?
A: SPO3 Abu did the swabbing both in the chamber and the
barrel wherein I observed there [were] black and traces
of brown residue on the bolt, chamber and in the barrel.
Q: And, that indicates Madam Witness...?
A: It indicates that the gun was fired.
Q: Recently?
A: Because of the traces of brown residue, it could be
possible that the gun was fired before the incident x x
x.
COURT:
Q: There is also black residue?

27
A: Yes.
Q: What does it indicate?
A: It indicates that the firearm was recently fired.
Q: And, where is this swab used at the time of the swabbing
of this Exhibit?
A: This one.
PROSECUTOR NUVAL:
May we ask that this be marked as Exhibit B-3-A.
COURT:
Q: The firing there indicates that the gun was recently fired,
during the incident?
A: Yes.

Third Issue: Defense of Frame-up

From the convoluted arguments strewn before us by
appellant, we gather that the main defense he raises is frameup. He claims that the items seized from his house were
planted, and that the entire Zamboanga police force was out to
get him at all cost.
This Court has invariably held that the defense of frameup is inherently weak, since it is easy to fabricate, but terribly
difficult to disprove.[50] Absent any showing of an improper
motive on the part of the police officers,[51] coupled with the
presumption of regularity in the performance of their duty, such
defense cannot be given much credence.[52]Indeed, after
examining the records of this case, we conclude that appellant
has failed to substantiate his claim. On the contrary, his
statements in his Counter Affidavit are inconsistent with his
testimony during the trial.[53] He testified thus:

Q: And also before the incident it was fired because of the

brown residue?

Q Now, Mr. Witness, do you remember having executed an

Affidavit/ a Counter-Affidavit?

A: Yes, Your Honor.[45] (emphasis supplied)

A I could not remember.

Duly proven from the foregoing were the two

elements[46] of the crime of illegal possession of
firearms. Undoubtedly, the established fact that appellant had
fired an M-14 rifle upon the approaching police officers clearly
showed the existence of the firearm or weapon and his
possession thereof. Sufficing to satisfy the second element
was the prosecutions Certification[47] stating that he had not
filed any application for license to possess a firearm, and that
he had not been given authority to carry any outside his
residence.[48] Further, it should be pointed out that his
possession and use of an M-14 rifle were obviously
unauthorized because this weapon could not be licensed in
favor of, or carried by, a private individual.[49]

Q I have here a Counter-Affidavit and it was signed before

this representation on the 8th day of December 1997[;]
tell us whose signature is this appearing above the
typewritten name
FISCAL NUVAL:
Q . . . . Walpan Ladjaalam, whose signature is this?
(Showing)
A Yes, Sir. This is mine.
Q Now, in paragraph[s] 1,2,3,4,5,6,7 and 8; you stated in
this Counter-Affidavit which I quote: that I was resting
and sleeping when I heard the gunshots and I noticed
that the shots were directed towards our house.. and I

28
inspected and x x x we were attacked by armed
persons.. and I was apprehended by the persons who
attacked x x x our house; [the] house you are referring
to [in] this paragraph, whose house [are you] referring
to, is this [what] you are referring to [as] your house or
the house of your neighbors [from] which you said you
heard gunshots?
A Our house.
Q Now, in paragraph 6 of your Counter-Affidavit you stated
and I quote: that [o]n that afternoon of September 24,
1997, I was at home in my house Aplaya, Riohondo,
Bo. Campo Muslim, my companions in my house
[were] the two old women and my children, is this
correct?

homicide, and (3) illegal possession of firearms. We will

discuss each of these.
Maintenance of a Drug Den
We agree with the trial court that appellant was guilty of
maintenance of a drug den, an offense for which he was
correctly sentenced to reclusion perpetua. His guilt was clearly
established by the testimony of Prosecution Witness Rino
Bartolome Locson, who himself had used the extension house
of appellant as a drug den on several occasions, including the
time of the raid. The formers testimony was corroborated by all
the raiding police officers who testified before the court. That
appellant did not deny ownership of the house and its
extension lent credence to the prosecutions story.

A They were not there.

Direct Assault with Multiple Attempted Homicide

Q Now, in that statement Mr. Witness, you said that you

were at home in [your] house at Aplaya, Riohondo, Bo.
Campo Muslim[;] which is which now, you were in your
house or you were in your neighbors[] house at that
time when you heard gunshots?

The trial court was also correct in convicting appellant of

direct assault[55] with multiple counts of attempted homicide. It
found that [t]he act of the accused [of] firing an M14 rifle [at]
the policemen[,] who were about to enter his house to serve a
search warrant x x x constituted such complex crime.[56]

A I was in the house near my house.

We note that direct assault with the use of a weapon

carries the penalty of prision correccional in its medium and
maximum periods, while attempted homicide carries the
penalty of prision correccional.[57] Hence, for the present
complex crime, the penalty for direct assault, which constitutes
the most serious crime, should be imposed and applied in its
maximum period.[58]

Q So, your statement particularly paragraph 6 of your

Counter-Affidavit that you were at home in [your] house
at Aplaya Riohondo Bo. Campo Muslim, is x x x not
correct?
A Yes, Sir. This is not correct.[54]
Crime and Punishment
The trial court convicted appellant of three crimes: (1)
maintenance of a drug den, (2) direct assault with attempted

Illegal Possession of Firearms

Aside from finding appellant guilty of direct assault with
multiple attempted homicide, the trial court convicted him also
of the separate offense of illegal possession of firearms under

29
PD 1866, as amended by RA 8294, and sentenced him to 6
years of prision correccional to 8 years of prision mayor.
The Office of the Solicitor General (OSG) disagrees, on
the ground that the trial court should not have applied the new
law. It contends that under the facts of the case, the applicable
law should have been PD 1866, as worded prior to its
amendment by RA 8294.
The trial courts ruling and the OSGs submission exemplify
the legal communitys difficulty in grappling with the changes
brought about by RA 8294. Hence, before us now are
opposing views on how to interpret Section 1 of the new law,
which provides as follows:
SECTION1.Section1ofPresidentialDecreeNo.1866,asamended,
isherebyfurtheramendedtoreadasfollows:
Section1.UnlawfulManufacture,Sale,Acquisition,Dispositionor
PossessionofFirearmsorAmmunitionInstrumentsUsedor
IntendedtobeUsedintheManufactureofFirearmsor
Ammunition.Thepenaltyofprisioncorreccionalinitsmaximum
periodandafineofnotlessthanFifteenthousandpesos(P15,000)
shallbeimposeduponanypersonwhoshallunlawfullymanufacture,
dealin,acquire,dispose,orpossessanylowpoweredfirearm,such
asrimfirehandgun,.380or.32andotherfirearmofsimilar
firepower,partoffirearm,ammunition,ormachinery,toolor
instrumentusedorintendedtobeusedinthemanufactureofany
firearmorammunition:Provided,Thatnoothercrimewas
committed.
Thepenaltyofprisionmayorinitsminimumperiodandafineof
Thirtythousandpesos(P30,000)shallbeimposedifthefirearmis
classifiedashighpoweredfirearmwhichincludesthosewithbores
biggerindiameterthan.30caliberand9millimetersuchascaliber.
40,.41,.44,.45andalsolessercaliberedfirearmsbutconsidered

powerfulsuchascaliber.357andcaliber.22centerfiremagnumand
otherfirearmswithfiringcapabilityoffullautomaticandbyburstof
twoorthree:Provided,however,Thatnoothercrimewascommitted
bythepersonarrested.
Ifhomicideormurderiscommittedwiththeuseofanunlicensed
firearm,suchuseofanunlicensedfirearmshallbeconsideredasan
aggravatingcircumstance.
IftheviolationofthisSectionisinfurtheranceoforincidentto,orin
connectionwiththecrimeofrebellionorinsurrection,sedition,or
attemptedcoupdetat,suchviolationshallbeabsorbedasanelement
ofthecrimeofrebellionorinsurrection,sedition,orattemptedcoup
detat.
Thesamepenaltyshallbeimposedupontheowner,president,
manager,directororotherresponsibleofficerofanypublicorprivate
firm,company,corporationorentity,whoshallwillfullyor
knowinglyallowanyofthefirearmsownedbysuchfirm,company,
corporationorentitytobeusedbyanypersonorpersonsfound
guiltyofviolatingtheprovisionsoftheprecedingparagraphsor
willfullyorknowinglyallowanyofthemtouseunlicensedfirearms
orfirearmswithoutanylegalauthoritytobecarriedoutsideoftheir
residenceinthecourseoftheiremployment.
Thepenaltyofarrestomayorshallbeimposeduponanypersonwho
shallcarryanylicensedfirearmoutsidehisresidencewithoutlegal
authoritytherefor.
Citing People v. Jayson,[59] the OSG argues that the
foregoing provision does not cover the specific facts of this
case. Since another crime -- direct assault with multiple
unlawful homicide -- was committed, appellant cannot be
convicted of simple illegal possession of firearms under the
second paragraph of the aforecited provision. Furthermore,

30
since there was no killing in this case, illegal possession
cannot be deemed as an aggravating circumstance under the
third paragraph of the provision. Based on these premises, the
OSG concludes that the applicable law is not RA 8294, but PD
1866 which, as worded prior the new law, penalizes simple
illegal possession of firearms even if another crime is
committed at the same time.[60]
Applying a different interpretation, the trial court posits that
appellant should be convicted of illegal possession of firearms,
in addition to direct assault with multiple attempted homicide. It
did not explain its ruling, however. Considering that it could not
have been ignorant of the proviso[61] in the second paragraph,
it seemed to have construed no other crime as referring only to
homicide and murder, in both of which illegal possession of
firearms is an aggravating circumstance. In other words, if a
crime other than murder or homicide is committed, a person
may still be convicted of illegal possession of firearms. In this
case, the other crime committed was direct assault with
multiple attempted homicide; hence, the trial court found
appellant guilty of illegal possession of firearms.
We cannot accept either of these interpretations because
they ignore the plain language of the statute. A simple reading
thereof shows that if an unlicensed firearm is used in the
commission of any crime, there can be no separate offense of
simple illegal possession of firearms. Hence, if the other crime
is murder or homicide, illegal possession of firearms becomes
merely an aggravating circumstance, not a separate
offense. Since direct assault with multiple attempted homicide
was committed in this case, appellant can no longer be held
liable for illegal possession of firearms.
Moreover, penal laws are construed liberally in favor of the
accused.[62] In this case, the plain meaning of RA 8294s simple
language is most favorable to herein appellant.Verily, no other
interpretation is justified, for the language of the new law
demonstrates the legislative intent to favor the accused.

[63]

Accordingly, appellant cannot be convicted of two separate

offenses of illegal possession of firearms and direct assault
with attempted homicide. Moreover, since the crime committed
was direct assault and not homicide or murder, illegal
possession of firearms cannot be deemed an aggravating
circumstance.
We reject the OSGs contention that PD 1866, as worded
prior to its amendment by RA 8294, should be applied in this
case. When the crime was committed on September 24, 1997,
the original language of PD 1866 had already been expressly
superseded by RA 8294 which took effect on July 6, 1997.[64] In
other words, no longer in existence was the earlier provision of
PD 1866, which justified a conviction for illegal possession of
firearms separate from any other crime. It was replaced by RA
8294 which, among other amendments to PD 1866, contained
the specific proviso that no other crime was committed.
Furthermore, the OSGs reliance on People v. Jayson[65] is
misplaced. True, this Court sustained the conviction of
appellant for illegal possession of firearms, although he had
also committed homicide. We explained, however, that the
criminal case for homicide [was] not before us for
consideration.
Just as unacceptable is the interpretation of the trial
court. We find no justification for limiting the proviso in the
second paragraph to murder and homicide. The law is
clear:the accused can be convicted of simple illegal
possession of firearms, provided that no other crime was
committed by the person arrested. If the intention of the law in
the second paragraph were to refer only to homicide and
murder, it should have expressly said so, as it did in the third
paragraph. Verily, where the law does not distinguish, neither
should we.
The Court is aware that this ruling effectively exonerates
appellant of illegal possession of an M-14 rifle, an offense

31
which normally carries a penalty heavier than that for direct
assault. While the penalty for the first is prision mayor, for the
second it is only prision correccional. Indeed, the accused may
evade conviction for illegal possession of firearms by using
such weapons in committing an even lighter offense,[66] like
alarm and scandal[67] or slight physical injuries,[68] both of which
are punishable by arresto menor.[69] This consequence,
however, necessarily arises from the language of RA 8294,
whose wisdom is not subject to the Courts review. Any
perception that the result reached here appears unwise should
be addressed to Congress. Indeed, the Court has no
discretion to give statutes a new meaning detached from the
manifest intendment and language of the legislature. Our task
is constitutionally confined only to applying the law and
jurisprudence[70] to the proven facts, and we have done so in
this case.
WHEREFORE,
the
appealed
Decision
is
hereby AFFIRMED with the MODIFICATION that appellant is
found guilty only of two offenses: (1) direct assault and multiple
attempted homicide with the use of a weapon, for which he is
sentenced to 2 years and 4 months to 6 years of prision
correccional; and (2) maintaining a drug den, for which he was
correctly sentenced by the trial court to reclusion
perpetua. Costs against appellant.
Let a copy of this Decision be furnished the Congress of
the Philippines for a possible review, at its sound discretion, of
RA 8294.
SO ORDERED.
Melo, (Chairman), Vitug, Purisima, and Gonzaga-Reyes,
JJ., concur.

[1]

Written by Judge Jesus C. Carbon Jr.

[2]

Rollo, pp. 10-15.

[3]

The appellant was charged together with his wife Nur-In

Ladjaalam and one Ahmad Sailabbi. Charges against the latter
were later dropped.
[4]

Also spelled Riohondo.

[5]

Rollo, p. 10.

[6]

Appellant was charged here together with Nur-In Ladjaalam

and Ahmad Sailabbi y Hajaraini. The charge against the latter
two was subsequently dismissed.
[7]

Rollo, p. 12.

[8]

In this Information, charged were appellant together with one

PO2
Nurhakim
T.
Hadjula
and
Ahmad
Sailabbi y Hajaraini. Charges against Sailabbi were later
dropped; Hadjula still remains at large.
[9]

Rollo, pp. 14-15.

[10]

No copy of the fourth Information was attached to the

records. In any event, the trial court acquitted him of this
charge.
[11]

Assisted by counsel de parte, Atty. Jose E. Fernandez.

[12]

Notice of Appeal was filed on September 25, 1998. This

case was deemed submitted for resolution after the Courts
receipt of the Brief for the Appellee on May 19, 2000. The filing
of a reply brief was deemed waived, as none was submitted
within the reglementary period.
[13]

Signed by Solicitor General Ricardo P. Galvez, Assistant

Solicitor General Carlos N. Ortega and Associate Solicitor
Rico Sebastian D. Liwanag.
[14]

Appellees Brief, pp. 9-16; rollo, pp. 247-254.

32
[15]

Appellants Brief, p. 5; rollo, p. 149. This Brief was signed by

Atty. Jose E. Fernandez.
[16]

Decision, pp. 23-32; rollo, pp. 51-60.

[17]

[23]

Decision, pp. 37-38; rollo, pp. 63-64.

[24]

Seen by SPO1 Lacastesantos lying on top of a sofa on the

second story of appellants house when he pursued appellant.

These are: 1) violation of 16, Article III of RA 6495,

otherwise known as the Dangerous Drugs Act of 1972; 2)
violation of PD 1866 penalizing illegal possession of firearm
and ammunition.

[25]

Seen at a corner on the same floor.

[26]

Decision, p. 38; rollo, p. 66.

[27]

Ibid.

[18]

[28]

Ibid. p. 51; rollo, p. 79.

[29]

Ibid., pp. 48-50; pp. 76-78.

[30]

Ibid., pp. 53-54; pp. 81-82.

[31]

Appellants Brief, p. 1; rollo, p. 145.

[32]

Appellants Brief, p. 19; rollo, 163.

It provides:

SEC. 3. Requisite for issuing search warrant. -- A search

warrant shall not issue but upon probable cause in connection
with one specific offense to be determined personally by the
judge after examination under oath or affirmation of the
complainant and the witnesses he may produce, and
particularly describing the place to be searched and the things
to be seized.
[19]

Decision, pp. 32-33; rollo, pp. 60-61.

[20]

These are, inter alia, SPO1 Amado Mirasol Jr., SPO1

Ricardo Lacastesantos, PO3 Enrique Rivera and PO3 Renato
Dela Pea.
[21]

Decision, pp. 42-43; rollo, pp. 70-71. Both appellant and the
firearms seized tested positive for gunpowder nitrates.
[22]

The trial court quoted the same thus:

[O]n the afternoon of September 24, 1998, I was at home in

my house at Aplaya, Rio Hondo, Barangay Campo Muslim xxx
(and) I was resting and sleeping when I heard the sound of
gun reports, which awakened me. Then I noticed that the
shots were directed towards our house, hence I suspected
that we were under attack by armed persons. I tried to escape
and jumped outside, but I was apprehended by the persons
who attacked our house, before I learned they were police
officers. (Decision p. 35; rollo, p. 63.)

[33]

As shown by the pertinent portions quoted below. See

People v. Baniel, 275 SCRA 472, July 15, 1997.
[34]

TSN, March 4, 1998, pp. 37-38.

[35]

See People v. Baniel, supra.

[36]

Paras, Rules of Court Annotated, 2nd ed., p. 78, citing

Graham on Evidence. See also Appellees Brief, pp. 21-22.
[37]

See People v. Moreno, 83 Phil. 286, April 7, 1949.

[38]

Appellants first assignment of error is herein taken up as

the second issue.
[39]

See People v. Elamparo, GR No. 121572, March 31, 2000;

People v. Cupino, et al., GR No. 125688, March 31, 2000;
People v. Estorco, GR No. 111941, April 27, 2000;
People v. Sultan, GR No. 132470, April 27, 2000;
People v. Mendoza, GR No. 128890, May 31, 2000;
People v. Geral, GR No. 122283, June 15, 2000;

33
[50]

People v. Rios, GR No. 132632, June 19, 2000;

People v. Molina, infra.

See People v. Barita et al., GR No. 123541, February 8,

2000; Dizon v. CA, 311 SCRA 1, July 22, 1999.

[40]

[51]

People v. Narvasa, 298 SCRA 637, November 16, 1998.

[41]

The witness is a member of the team that went to

Ladjaalams house on September 24, 1997. He was tasked to
bring the barangay captain to appellants house to serve as a
witness to the search.
[42]

TSN, March 4, 1998, pp. 18-23.

[43]

Also a member or the raiding team. Lacastesantos, together

with SPO1 Mirasol, went inside the house. When appellant
tried to escape, Mirasol pursued him; Lacastesantos
proceeded to the second floor.
[44]

TSN, March 5, 1998, pp. 23-24, 28-29.

[45]

TSN, March 3, 1998, pp. 10-11, 19-20.

[46]

In the en banc case of People v. Molina (292 SCRA 742,

777, July 22, 1998), we said:
In crimes involving illegal possession of firearms, the
prosecution has the burden of proving the elements
thereof: (1) the existence of the subject firearm; and (2) the
fact that the accused, who owned or possessed the firearm,
did not have the corresponding license or permit to possess or
carry the same outside his residence. (footnote omitted)
See also People v. Castillo, GR No. 131592-93, February 15,
2000; People v. Lazaro, GR No. 112090, October 26, 1999;
People v. Narvasa, 298 SCRA 637, November 16, 1998.
[47]

Signed by Police Senior Inspector Ruperto Rugay Regis Jr.

[48]

People v. Lazaro, supra., citing several cases. See also

People v. Narvasa, supra.; People v. Molina, supra.;
People v. Villanueva, 275 SCRA 489, July 15, 1997.
[49]

People v. Molina, supra.

In fact, appellant admits that he did not have any

misunderstanding with the arresting officers. Neither could he
think of any reason why they would file false charges against
him. (TSN, May 4, 1998, p. 42)
[52]

See People v. Dizon, supra.

[53]

TSN, May 4, 1998, pp. 37-39.

[54]

Ibid.

[55]

Article 148 of the RPC reads:

ART. 148. Direct assaults. -- Any person or persons who,

without public uprising, shall employ force or intimidation for
the attainment of any of the purposes enumerated in defining
the crimes of rebellion and sedition, or shall attack, employ
force, or seriously intimidate or resist any person in authority
or any of his agents, while engaged in the performance of
official duties, or on occasion of such performance, shall suffer
the penalty of prision correccional in its medium and maximum
periods and a fine not exceeding 1,000 pesos, when the
assault is committed with a weapon or when the offender is a
public officer or employee, or when the offender lays hands
upon a person in authority. xxx.
[56]

Article 48 of the Revised Penal Code (RPC) reads:

ART. 48. Penalty for complex crimes. -- When a single act

constitutes two or more grave or less grave felonies, or when
an offense is a necessary means for committing the other, the
penalty for the most serious crime shall be imposed, the same
to be applied in its maximum period. (emphasis ours)
[57]
[58]

Article 249; cf. 51, RPC.

Section 1 of the Indeterminate Sentence Law provides that

the court shall sentence the accused to an indeterminate

34
sentence the maximum term of which shall be that which, in
view of the attending circumstances, could be properly
imposed under the rules of the said Code, and the minimum of
which shall be within the range of the penalty next lower to
that prescribed by the Code for the offense. An authority on
criminal law writes that when the accused is guilty of a
complex crime, the penalty immediately lower is the next
below the penalty provided for the gravest crime. (Reyes, The
Revised Penal Code, Book One,1981 ed., p. 769.) Since direct
assault is punishable with prision correccional in its medium
and maximum period, the penalty next lower in degree
is arresto mayor (maximum) to prision
correccional (minimum).Accordingly, the indeterminate penalty
for direct assault with multiple attempted homicide is 2 years
and 4 months to 6 years of prision correccional.
[59]

282 SCRA 166, 176-177, November 18, 1997.

[60]

People v. Quijada, 259 SCRA 191, July 24, 1996;

People v. Tac-an, 182 SCRA 601, February 26, 1990.
[61]

That no other crime was committed by the person arrested.

[62]

See People v. Atop, 286 SCRA 157, February 10, 1998;

People v. Deleverio, 289 SCA 547, April 24, 1998.
[63]

See Tanada v. Yulo, 61 Phil. 515, May 31, 1935;

Regalado v. Yulo, 61 Phil. 173, February 15, 1935.
[64]

People v. Jayson, supra.

[65]

Supra at p. 177, per Mendoza, J.

[66]

Offenses under the Revised Penal Code which carry a

penalty lighter than that for illegal possession of a highpowered firearm include (1) indirect assault (Article 149), (2)
tumults and other disturbances (Article 153), (3) discharge of
firearms (Article 254), (4) light threats (Article 285), and (5)
light coercion (Article 287).

[67]

Article 155 (1) of the Revised Penal code provides the

penalty of arresto menor or fine not exceeding 200 pesos
upon "[a]ny person who within any town or public place, shall
discharge any firearm, rocket, firecracker or other explosive
calculated to cause alarm or danger."
[68]

Article 266 (1) imposes the penalty of arresto menor "when

an offender has inflicted physical injuries which shall
incapacitate the offended party for labor from one to nine days,
or shall require medical attention during the same period." For
example, when a person hits the head of another with the butt
of an unlicensed M-14 rifle, thereby incapacitating the latter for
one to nine days, the accused may be charged only with slight
physical injuries, not illegal possession of firearms.
[69]

Under Article 27 of the Revised Penal Code, the duration

of arresto menor is one to thirty days.
[70]

That penal laws should be liberally interpreted in favor of

the accused.

35
FIRST DIVISION

G.R. No. 86020 August 5, 1994

RAMON CORPORAL, petitioner,
vs.
EMPLOYEES' COMPENSATION COMMISSION and
GOVERNMENT SERVICE INSURANCE SYSTEM,
respondents.
Public Attorney's Office for petitioner.

QUIASON, J.:
This is a petition for certiorari questioning the decision of the
Employees' Compensation Commission which denied
petitioner's claim for death benefits under Presidential Decree
No. 626, as amended.
I
Norma Peralta Corporal was employed as a public school
teacher with assignment in Juban, Sorsogon. On November
28 to November 30, 1977, she was confined at the Esteves
Memorial Hospital for acute coronary insufficiency and
premature ventricular contractions.
On June 30, 1983, she was assigned to the Banadero
Elementary School in Daraga, Albay. Norma had to walk three
kilometers to and from said school as no transportation was
available to ferry her and other teachers from the national

36
highway to the school. During her fourth pregnancy, Norma
suffered a complete abortion and was hospitalized for two
days at the Albay Provincial Hospital. After her maternity leave,
Norma reported back to work.

action of denial for the same reason . . . that her cause of

death is non-work-connected as contemplated under the law"
and neither did her job as a teacher increase the risk of
contracting her ailment (Rollo, p. 25).

In March of 1984, she again conceived. However, in

September of the same year, she was transferred to the
Kilicao Elementary School, where she had to walk more than
one kilometer of rough road. On December 2, 1984, she gave
birth to a baby boy with the help of a "hilot." An hour later, she
was rushed to the Immaculate Conception Hospital due to
profuse vaginal bleeding. She underwent a hysterectomy but
unfortunately, she died on the same day due to "shock, severe
hemorrhage" resulting from a "prolapse(d) uterus post
partum." Norma was 40 years old when she died.

Petitioner appealed to the Employees' Compensation

Commission (ECC). The ECC requested the GSIS to reevaluate petitioner's claim and to finally determine
compensability, with instruction that in case the claim is denied
once more by the System, the entire record of the case be
elevated to the ECC. The GSIS reiterated its denial of
petitioner's claim.

Her husband, Ramon Corporal, petitioner herein, filed a claim

for compensation benefit with the Government Service
Insurance System (GSIS). The GSIS denied petitioner's claim
thus:
Please be advised that on the basis of the
proofs and evidences (sic) submitted to the
System, the cause of death of your wife, Shock
secondary to Severe Hemorrhage, Uterine
PROLAPSE is not considered an occupational
disease as contemplated under the abovementioned law (P.D. No. 626). Neither was
there any showing that her position as Teacher,
MECS, Albay had increased the risk of
contracting her ailment (Rollo, p. 23).
Petitioner filed several motions for the reconsideration of the
denial of his claim to no avail, because a re-evaluation of the
claim by the Medical Evaluation and Underwriting Group of the
GSIS showed that there was "no basis to alter its previous

On September 7, 1988, the ECC rendered a decision also

denying petitioner's claim. It said:
Medical studies show that Prolapsed Uterus may occur
in infants and nulliparous women as well as multiparas.
Defects in innervation and in the basic integrity of the
supporting structures account(s) for prolapse(d) in the
first two and childbirth trauma for the latter. The cervix
usually elongates because the weight of the nagging
vaginal tissues pulls it downward, whereas the
attached but weak cardinal ligaments tend(s) to support
it. In third degree or complete prolapse(d) both the
cervix and the body of the uterus have passed through
the introitus and the entire vaginal canal is inverted.
(Obstetrics and Gynecology, Wilson, Beecham,
Carrington, 3rd Edition, p. 585).
On the other hand Acute Coronary Insufficiency are
terms often used to describe a syndrome characterized
by prolonged substernal pain, usually not relieved by
vasodilators of a short period of rest due to a more
severe inadequacy of coronary circulation. The
symptoms in this condition are more intense and

37
prolonged than in angina pectoris, but abnormal ECG
and other laboratory findings associated with
myocardial infarction are absent. The syndrome is
covered by a temporary inability of one's coronary
arteries to supply sufficient oxygenated blood to the
heart muscle. (Merck, Manual of Diagnosis & Therapy,
pp. 100-101).

Norma's long walks to and from her place of teaching

Banadero Elementary School, which is situated on the side of
the Mayon Volcano. Moreover, the roads leading to the school
are full of ruts and rocks, and, during the rainy season, are
flooded and slippery. Petitioner asserts that inspite of these,
Norma continued to discharge her duties as a public servant,
notwithstanding her pregnancy and her prolapsed uterus.

Based on the above medical discussion of the subject

ailments, we believe that the development of the fatal
illness has no relation whatsoever with the duties and
working conditions of the late teacher. There is no
showing that the nature of her duties caused the
development of prolapse of the uterus. The ailment
was a complication of childbirth causing profuse
vaginal bleeding during the late stage. We also
consider Acute Coronary Insufficiency as non-workconnected illness for the reason that it is caused by
temporary inability of one coronary arteries (sic) to
supply oxygenated blood to the heart muscle. There is
no damage to heart muscle. In view thereof, we have
no recourse but to sustain respondent's denial of the
instant claim (Rollo, pp. 29-31).

Petitioner also contends that the findings of the respondents

contravene the constitutional provision on social justice. He
alleges that since the workmen's compensation law is a social
legislation, its provisions should be interpreted liberally in favor
of the employees whose rights it intends to protect.

Hence, petitioner filed the instant petition, asserting

compensability of the death of his wife.

Under P.D. No. 626, as amended, for sickness and the

resulting death of an employee to be compensable, the
claimant must show either: (a) that it is a result of an
occupational disease listed under Annex A of the Amended
Rules on Employees' Compensation with the conditions set
therein satisfied; or (b) that the risk of contracting the disease
is increased by the working conditions (Santos v. Employees'
Compensation Commission, 221 SCRA 182 [1993]; Quizon v.
Employees' Compensation Commission, 203 SCRA 426
[1991]). Clearly, then, the principle of aggravation and
presumption of compensability under the old Workmen's
Compensation Act no longer applies (Latagan v. Employees'
Compensation Commission, 213 SCRA 715 [1992]).

II
Petitioner contends that although prolapsed uterus is not one
of occupational diseases listed by the ECC, his claim should
proper under the increased risk theory. He anchors such claim
on the fact that as early as January 1984 or before Norma's
fifth pregnancy, he had noticed a spherical tissue which
appeared like a tomato protruding out of Norma's vagina and
rectum. He avers that such condition was attributable to

Since petitioner admits that his wife died of an ailment which is

not listed as compensable by the ECC and he merely anchors
his claim on the second rule, he must positively show that the
risk of contracting Norma's illness was increased by her
working conditions. Petitioner failed to satisfactorily discharge
the onus imposed by law.

38
The fact that Norma had to walk six kilometers everyday and
thereafter, a shorter distance of more than one kilometer just
to reach her place of work, was not sufficient to establish that
such condition caused her to develop prolapse of the uterus.
Petitioner did not even present medical findings on the veracity
of his claim that Norma had a tomato-like spherical tissue
protruding from her vagina and rectum.
Norma developed prolapse of the uterus because she was
multiparas, or one who had more than one child, and quite
beyond the safe child-bearing age when she gave birth to her
fifth child she was already forty years old.Novak's Textbook
on Gynecology describes prolapse of the uterus (descensus
uteri) as follows:
An extremely common condition, being far more
frequent in elderly than in young patients. This is
explained by the increasing laxity and atony of the
muscular and fascial structures in later life. The effects
of childbirth injuries may thus make themselves
evident, in the form of uterine prolapse, many years
after the last pregnancy. Pregnancies in a prolapsed
uterus may lead to numerous complications, as noted
by Piver and Spezia.
The important factor in the mechanism of the prolapse
is undoubtedly injury or overstretching of the pelvic
floor, and especially of the cardinal ligaments
(Mackenrodt) in the bases of the broad
ligaments.Combined with this there is usually extensive
injury to the perineal structures, producing marked
vaginal relaxation and also frequent injury to the fascia
or the anterior or posterior vaginal walls, with the
production of cystocele or rectocele. Usually, various
combinations of these conditions are seen, although at
times little or no cystocele or rectocele is associated

with the prolapse. Occasional cases are seen for that

matter, in women who have never borne children, and
in these the prolapse apparently represents a hernia of
the uterus through a defect in the pelvic fascial
floor (Emphasis supplied).
The 1986 Current Medical Diagnosis & Treatment also
describes the condition as follows:
Uterine prolapse most commonly occurs as a delayed
result of childbirth injury to the pelvic floor (particularly
the transverse cervical and uterosacral ligaments).
Unrepaired obstetric lacerations of the levator
musculature and perineal body augment the weakness.
Attenuation of the pelvic structures with aging and
congenital weakness can accelerate the development
of prolapse.
The determination of whether the prolapse of Norma's uterus
developed before or after her fifth pregnancy is therefore
immaterial since this illness is the result of the physiological
structure and changes in the body on pregnancy and
childbirth.
With the evidence presented in support of the claim,
petitioner's prayer cannot be granted. While as a rule labor
and social welfare legislation should be liberally construed in
favor of the applicant, (Tria v. Employees' Compensation
Commission, 208 SCRA 834 [1992]), there is also the rule that
such liberal construction and interpretation of labor laws may
not be applied where the pertinent provisions of the Labor
Code and P.D. No. 626, as amended, are clear and leave no
room for interpretation.
The Court commiserates with the petitioner and his children for
the loss of a loved one. We also recognize the importance of

39
the services rendered by public elementary school teachers
inspite of their meager salaries which are not proportionate to
their immense responsibility in molding the values and
character of the youth in this country (De Vera v. Employees'
Compensation Commission, 133 SCRA 685 [1984]).
But under the legal milieu of the case, we can only suggest,
not mandate, that respondents grant ex gratia some form of
relief to their members similarly situated as petitioner's wife.
WHEREFORE, the petition is DENIED.

FIRST DIVISION
G.R. No. L-69344

April 26, 1991

REPUBLIC OF THE PHILIPPINES, petitioner,

vs.
INTERMEDIATE APPELLATE COURT and SPOUSES
ANTONIO and CLARA PASTOR, respondents.
Roberto L. Bautista for private respondents.

SO ORDERED.
Cruz, Davide, Jr. and Kapunan, JJ., concur.
Bellosillo, J., is on leave.

GRIO-AQUINO, J.:
The legal issue presented in this petition for review is whether
or not the tax amnesty payments made by the private
respondents on October 23, 1973 bar an action for recovery of
deficiency income taxes under P.D.'s Nos. 23, 213 and 370.
On April 15, 1980, the Republic of the Philippines, through the
Bureau of Internal Revenue, commenced an action in the
Court of First Instance (now Regional Trial Court) of Manila,
Branch XVI, to collect from the spouses Antonio Pastor and
Clara Reyes-Pastor deficiency income taxes for the years
1955 to 1959 in the amount of P17,117.08 with a 5%
surcharge and 1% monthly interest, and costs.
The Pastors filed a motion to dismiss the complaint, but the
motion was denied.1wphi1 On August 2, 1975, they filed an
answer admitting there was an assessment against them of
P17,117.08 for income tax deficiency but denying liability
therefor. They contended that they had availed of the tax
amnesty under P.D.'s Nos. 23, 213 and 370 and had paid the
corresponding amnesty taxes amounting to P10,400 or 10% of
their reported untaxed income under P.D. 23, P2,951.20 or

40
20% of the reported untaxed income under P.D. 213, and a
final payment on October 26, 1973 under P.D. 370 evidenced
by the Government's Official Receipt No. 1052388.
Consequently, the Government is in estoppel to demand and
compel further payment of income taxes by them.
The parties agreed that there were no issues of fact to be
litigated, hence, the case was submitted for decision upon the
pleadings and memoranda on the lone legal question of:
whether or not the payment of deficiency income tax under the
tax amnesty, P.D. 23, and its acceptance by the Government
operated to divest the Government of the right to further
recover from the taxpayer, even if there was an existing
assessment against the latter at the time he paid the amnesty
tax.
It is not disputed that as a result of an investigation made by
the Bureau of Internal Revenue in 1963, it was found that the
private respondents owed the Government P1,283,621.63 as
income taxes for the years 1955 to 1959, inclusive of the 50%
surcharge and 1% monthly interest. The defendants protested
against the assessment. A reinvestigation was conducted
resulting in the drastic reduction of the assessment to only
P17,117.08.
It appears that on April 27, 1978, the private respondents
offered to pay the Bureau of Internal Revenue the sum of
P5,000 by way of compromise settlement of their income tax
deficiency for the questioned years, but Assistant
Commissioner Bernardo Carpio, in a letter addressed to the
Pastor spouses, rejected the offer stating that there was no
legal or factual justification for accepting it. The Government
filed the action against the spouses in 1980, ten (10) years
after the assessment of the income tax deficiency was made.

On a motion for judgment on the pleadings filed by the

Government, which the spouses did not oppose, the trial court
rendered a decision on February 28, 1980, holding that the
defendants spouses had settled their income tax deficiency for
the years 1955 to 1959, not under P.D. 23 or P.D. 370, but
under P.D. 213, as shown in the Amnesty Income Tax Returns'
Summary Statement and the tax Payment Acceptance Order
for P2,951.20 with its corresponding official receipt, which
returns also contain the very assessment for the questioned
years. By accepting the payment of the amnesty income taxes,
the Government, therefore, waived its right to further recover
deficiency incomes taxes "from the defendants under the
existing assessment against them because:
1. the defendants' amnesty income tax returns'
Summary Statement included therein the deficiency
assessment for the years 1955 to 1959;
2. tax amnesty payment was made by the defendants
under Presidential Decree No. 213, hence, it had the
effect of remission of the income tax deficiency for the
years 1955 to 1959;
3. P.D. No. 23 as well as P.D. No. 213 do not make any
exceptions nor impose any conditions for their
application, hence, Revenue Regulation No. 7-73
which excludes certain taxpayers from the coverage of
P.D. No. 213 is null and void, and
4. the acceptance of tax amnesty payment by the
plaintiff-appellant bars the recovery of deficiency taxes.
(pp. 3-4, IAC Decision, pp. 031-032, Rollo.)
The Government appealed to the Intermediate Appellant Court
(AC G.R. CV No. 68371 entitled, "Republic of the Philippines
vs. Antonio Pastor, et al."), alleging that the private

41
respondents were not qualified to avail of the tax amnesty
under P.D. 213 for the benefits of that decree are available
only to persons who had no pending assessment for unpaid
taxes, as provided in Revenue Regulations Nos. 8-72 and 773. Since the Pastors did in fact have a pending assessment
against them, they were precluded from availing of the
amnesty granted in P.D.'s Nos. 23 and 213. The Government
further argued that "tax exemptions should be
interpreted strictissimi juris against the taxpayer."
The respondent spouses, on the other hand, alleged that P.D.
213 contains no exemptions from its coverage and that, under
Letter of Instruction LOI 129 dated September 18, 1973, the
immunities granted by P.D. 213 include:
II-Immunities Granted.
Upon payment of the amounts specified in the Decree,
the following shall be observed:
1. . . . .
2. The taxpayer shall not be subject to any
investigation, whether civil, criminal or administrative,
insofar as his declarations in the income tax returns
are concerned nor shall the same be used as evidence
against, or to the prejudice of the declarant in any
proceeding before any court of law or body, whether
judicial, quasi-judicial or administrative, in which he is a
defendant or respondent, and he shall be exempt from
any liability arising from or incident to his failure to file
his income tax return and to pay the tax due thereon,
as well as to any liability for any other tax that may be
due as a result of business transactions from which
such income, now voluntarily declared may have been
derived. (Emphasis supplied; p. 040, Rollo.)

There is nothing in the LOI which can be construed as

authority for the Bureau of Internal Revenue to introduce
exceptions and/or conditions to the coverage of the law.
On November 23, 1984, the Intermediate Appellate Court (now
Court of Appeals) rendered a decision dismissing the
Government's appeal and holding that the payment of
deficiency income taxes by the Pastors under PD. No. 213,
and the acceptance thereof by the Government, operated to
divest the latter of its right to further recover deficiency income
taxes from the private respondents pursuant to the existing
deficiency tax assessment against them. The appellate court
held that if Revenue Regulation No. 7-73 did provide an
exception to the coverage of P.D. 213, such provision was null
and void for being contrary to, or restrictive of, the clear
mandate of P.D. No. 213 which the regulation should
implement. Said revenue regulation may not prevail over the
provisions of the decree, for it would then be an act of
administrative legislation, not mere implementation, by the
Bureau of Internal Revenue.
On February 4, 1986, the Republic of the Philippines, through
the Solicitor General, filed this petition for review of the
decision dated November 23, 1984 of the Intermediate
Appellate Court affirming the dismissal, by the Court of First
Instance of Manila, of the Government's complaint against the
respondent spouses.
The petition is devoid of merit.
Even assuming that the deficiency tax assessment of
P17,117.08 against the Pastor spouses were correct, since the
latter have already paid almost the equivalent amount to the
Government by way of amnesty taxes under P.D. No. 213, and
were granted not merely an exemption, but an amnesty, for
their past tax failings, the Government is estopped from

42
collecting the difference between the deficiency tax
assessment and the amount already paid by them as amnesty
tax.
A tax amnesty, being a general pardon or intentional
overlooking by the State of its authority to impose
penalties on persons otherwise guilty of evasion or
violation of a revenue or tax law, partakes of an
absolute forgiveness or waiver by the Government of
its right to collect what otherwise would be due it, and
in this sense, prejudicial thereto, particularly to give tax
evaders, who wish to relent and are willing to reform a
chance to do so and thereby become a part of the new
society with a clean slate (Commission of Internal
Revenue vs. Botelho Corp. and Shipping Co., Inc., 20
SCRA 487).
The finding of the appellate court that the deficiency income
taxes were paid by the Pastors, and accepted by the
Government, under P.D. 213, granting amnesty to persons
who are required by law to file income tax returns but who
failed to do so, is entitled to the highest respect and may not
be disturbed except under exceptional circumstances which
have already become familiar (Rule 45, Sec. 4, Rules of Court;
e.g., where: (1) the conclusion is a finding grounded entirely
on speculation, surmise and conjecture; (2) the inference
made is manifestly mistaken; (3) there is grave abuse of
discretion; (4) the judgment is based on misapprehension of
facts; (5) the Court of Appeals went beyond the issues of the
case and its findings are contrary to the admissions of both the
appellant and the appellee; (6) the findings of fact of the Court
of Appeals are contrary to those of the trial court; (7) said
findings of fact are conclusions without citation of specific
evidence in which they are based; (8) the facts set forth in the
petition as well as in the petitioner's main and reply briefs are
not disputed by the respondents; and (9) when the finding of

fact of the Court of Appeals is premised on the absense of

evidence and is contradicted by the evidence on record
(Thelma Fernan vs. CA, et al., 181 SCRA 546, citing Tolentino
vs. de Jesus, 56 SCRA 67; People vs. Traya, 147 SCRA 381),
none of which is present in this case.
The rule is that in case of doubt, tax statutes are to be
construed strictly against the Government and liberally in favor
of the taxpayer, for taxes, being burdens, are not to be
presumed beyond what the applicable statute (in this case P.D.
213) expressly and clearly declares (Commission of Internal
Revenue vs. La Tondena, Inc. and CTA, 5 SCRA
665, citing Manila Railroad Company vs. Collector of Customs,
52 Phil, 950).
WHEREFORE, the petition for review is denied. No costs.
SO ORDERED.
Narvasa, Cruz, Gancayco and Medialdea, JJ., concur.

43
SECOND DIVISION

G.R. No. 108524 November 10, 1994

MISAMIS ORIENTAL ASSOCIATION OF COCO TRADERS,
INC., petitioner,
vs.
DEPARTMENT OF FINANCE SECRETARY, COMMISSIONER
OF THE BUREAU OF INTERNAL REVENUE (BIR), AND
REVENUE DISTRICT OFFICER, BIR MISAMIS
ORIENTAL, respondents.
Damasing Law Office for petitioner.

MENDOZA, J.:
This is a petition for prohibition and injunction seeking to nullify
Revenue Memorandum Circular No. 47-91 and enjoin the
collection by respondent revenue officials of the Value Added Tax
(VAT) on the sale of copra by members of petitioner
organization. 1
Petitioner Misamis Oriental Association of Coco Traders, Inc. is a
domestic corporation whose members, individually or collectively,
are engaged in the buying and selling of copra in Misamis
Oriental. The petitioner alleges that prior to the issuance of
Revenue Memorandum Circular 47-91 on June 11, 1991, which
implemented VAT Ruling 190-90, copra was classified as
agricultural food product under $ 103(b) of the National Internal
Revenue Code and, therefore, exempt from VAT at all stages of
production or distribution.

44
Respondents represent departments of the executive branch of
government charged with the generation of funds and the
assessment, levy and collection of taxes and other imposts.
The pertinent provision of the NIRC states:
Sec. 103. Exempt Transactions. The following
shall be exempt from the value-added tax:
(a) Sale of nonfood agricultural, marine and forest
products in their original state by the primary
producer or the owner of the land where the same
are produced;
(b) Sale or importation in their original state of
agricultural and marine food products, livestock
and poultry of a kind generally used as, or yielding
or producing foods for human consumption, and
breeding stock and genetic material therefor;
Under 103(a), as above quoted, the sale of agricultural non-food
products in their original state is exempt from VAT only if the sale
is made by the primary producer or owner of the land from which
the same are produced. The sale made by any other person or
entity, like a trader or dealer, is not exempt from the tax. On the
other hand, under 103(b) the sale of agricultural food products in
their original state is exempt from VAT at all stages of production
or distribution regardless of who the seller is.
The question is whether copra is an agricultural food or non-food
product for purposes of this provision of the NIRC. On June 11,
1991, respondent Commissioner of Internal Revenue issued the
circular in question, classifying copra as an agricultural non-food
product and declaring it "exempt from VAT only if the sale is made
by the primary producer pursuant to Section 103(a) of the Tax
Code, as amended." 2

The reclassification had the effect of denying to the petitioner the

exemption it previously enjoyed when copra was classified as an
agricultural food product under 103(b) of the NIRC. Petitioner
challenges RMC No. 47-91 on various grounds, which will be
presently discussed although not in the order raised in the petition
for prohibition.
First. Petitioner contends that the Bureau of Food and Drug of the
Department of Health and not the BIR is the competent
government agency to determine the proper classification of food
products. Petitioner cites the opinion of Dr. Quintin Kintanar of the
Bureau of Food and Drug to the effect that copra should be
considered "food" because it is produced from coconut which is
food and 80% of coconut products are edible.
On the other hand, the respondents argue that the opinion of the
BIR, as the government agency charged with the implementation
and interpretation of the tax laws, is entitled to great respect.
We agree with respondents. In interpreting 103(a) and (b) of the
NIRC, the Commissioner of Internal Revenue gave it a strict
construction consistent with the rule that tax exemptions must be
strictly construed against the taxpayer and liberally in favor of the
state. Indeed, even Dr. Kintanar said that his classification of
copra as food was based on "the broader definition of food which
includes agricultural commodities and other components used in
the manufacture/processing of food." The full text of his letter
reads:

10 April 1991
Mr. VICTOR A. DEOFERIO, JR.
Chairman VAT Review Committee
Bureau of Internal Revenue
Diliman, Quezon City

45
Dear Mr. Deoferio:
This is to clarify a previous communication made by this Office
about copra in a letter dated 05 December 1990 stating that
copra is not classified as food. The statement was made in the
context of BFAD's regulatory responsibilities which focus mainly
on foods that are processed and packaged, and thereby copra is
not covered.
However, in the broader definition of food which include
agricultural commodities and other components used in the
manufacture/ processing of food, it is our opinion that copra
should be classified as an agricultural food product since copra is
produced from coconut meat which is food and based on
available information, more than 80% of products derived from
copra are edible products.
Very truly yours,
QUINTIN L. KINTANAR, M.D., Ph.D.
Director
Assistant Secretary of Health for Standards and Regulations
Moreover, as the government agency charged with the
enforcement of the law, the opinion of the Commissioner of
Internal Revenue, in the absence of any showing that it is plainly
wrong, is entitled to great weight. Indeed, the ruling was made by
the Commissioner of Internal Revenue in the exercise of his
power under 245 of the NIRC to "make rulings or opinions in
connection with the implementation of the provisions of internal
revenue laws, including rulings on the classification of articles for
sales tax and similar purposes."
Second. Petitioner complains that it was denied due process
because it was not heard before the ruling was made. There is a
distinction in administrative law between legislative rules and
interpretative rules. 3 There would be force in petitioner's argument if

the circular in question were in the nature of a legislative rule. But it

is not. It is a mere interpretative rule.

The reason for this distinction is that a legislative rule is in the

nature of subordinate legislation, designed to implement a
primary legislation by providing the details thereof. In the same
way that laws must have the benefit of public hearing, it is
generally required that before a legislative rule is adopted there
must be hearing. In this connection, the Administrative Code of
1987 provides:
Public Participation. If not otherwise required
by law, an agency shall, as far as practicable,
publish or circulate notices of proposed rules and
afford interested parties the opportunity to submit
their views prior to the adoption of any rule.
(2) In the fixing of rates, no rule or final order shall
be valid unless the proposed rates shall have
been published in a newspaper of general
circulation at least two (2) weeks before the first
hearing thereon.
(3) In case of opposition, the rules on contested
cases shall be observed. 4
In addition such rule must be published. 5 On the other hand,
interpretative rules are designed to provide guidelines to the law
which the administrative agency is in charge of enforcing.
Accordingly, in considering a legislative rule a court is free to
make three inquiries: (i) whether the rule is within the delegated
authority of the administrative agency; (ii) whether it is
reasonable; and (iii) whether it was issued pursuant to proper
procedure. But the court is not free to substitute its judgment as
to the desirability or wisdom of the rule for the legislative body, by
its delegation of administrative judgment, has committed those

46
questions to administrative judgments and not to judicial
judgments. In the case of an interpretative rule, the inquiry is not
into the validity but into the correctness or propriety of the rule. As
a matter of power a court, when confronted with an interpretative
rule, is free to (i) give the force of law to the rule; (ii) go to the
opposite extreme and substitute its judgment; or (iii) give some
intermediate degree of authoritative weight to the interpretative
rule. 6
In the case at bar, we find no reason for holding that respondent
Commissioner erred in not considering copra as an "agricultural
food product" within the meaning of 103(b) of the NIRC. As the
Solicitor General contends, "copra per se is not food, that is, it is
not intended for human consumption. Simply stated, nobody eats
copra for food." That previous Commissioners considered it so, is
not reason for holding that the present interpretation is wrong.
The Commissioner of Internal Revenue is not bound by the ruling
of his predecessors. 7 To the contrary, the overruling of decisions is
inherent in the interpretation of laws.
Third. Petitioner likewise claims that RMC No. 47-91 is
discriminatory and violative of the equal protection clause of the
Constitution because while coconut farmers and copra producers
are exempt, traders and dealers are not, although both sell copra
in its original state. Petitioners add that oil millers do not enjoy tax
credit out of the VAT payment of traders and dealers.
The argument has no merit. There is a material or substantial
difference between coconut farmers and copra producers, on the
one hand, and copra traders and dealers, on the other. The
former produce and sell copra, the latter merely sell copra. The
Constitution does not forbid the differential treatment of persons
so long as there is a reasonable basis for classifying them
differently. 8
It is not true that oil millers are exempt from VAT. Pursuant to
102 of the NIRC, they are subject to 10% VAT on the sale of
services. Under 104 of the Tax Code, they are allowed to credit

the input tax on the sale of copra by traders and dealers, but
there is no tax credit if the sale is made directly by the copra
producer as the sale is VAT exempt. In the same manner, copra
traders and dealers are allowed to credit the input tax on the sale
of copra by other traders and dealers, but there is no tax credit if
the sale is made by the producer.
Fourth. It is finally argued that RMC No. 47-91 is
counterproductive because traders and dealers would be forced
to buy copra from coconut farmers who are exempt from the VAT
and that to the extent that prices are reduced the government
would lose revenues as the 10% tax base is correspondingly
diminished.
This is not so. The sale of agricultural non-food products is
exempt from VAT only when made by the primary producer or
owner of the land from which the same is produced, but in the
case of agricultural food products their sale in their original state
is exempt at all stages of production or distribution. At any rate,
the argument that the classification of copra as agricultural nonfood product is counterproductive is a question of wisdom or
policy which should be addressed to respondent officials and to
Congress.
WHEREFORE, the petition is DISMISSED.
SO ORDERED.
Narvasa, C.J., Regalado and Puno, JJ., concur.

#Footnotes
1 The value-added tax is a percentage tax on the sale,
barter, exchange or importation of goods or services.
(NIRC, 99) Insofar as the sale, barter or exchange of

47
goods is concerned, the tax is equivalent to 10% of the
gross selling price or gross value in money of the goods
sold, bartered or exchanged, such tax to be paid by the
seller or transferor. ( 100(a)) The tax is determined as
follows:
(d) Determination of the tax. (1) Tax billed as separate
item in the invoice. If the tax is billed as a separate item in
the invoice, the tax shall be based on the gross selling
price, excluding the tax. "Gross selling price" means the
total amount of money or its equivalent which the
purchaser pays or is obligated to pay to the seller in the
consideration of the sale, barter or exchange of the
goods, excluding the value-added tax. The excise tax, if
any, on such goods shall form part of the gross selling
price.
(2) Tax not billed separately or is billed erroneously in the
invoice. In case the tax is not billed separately or is
billed erroneously in the invoice, the tax shall be
determined by multiplying the gross selling price,
including the amount intended by the seller to cover the
tax or the tax billed erroneously, by the factor 1/11 or such
factor as may be prescribed by regulations in case of
persons partially exempt under special laws.
(3) Sales returns, allowances and sales discounts. The
value of goods sold and subsequently returned or for
which allowances were granted by a VAT-registered
person may be deducted from the gross sales or receipts
for the quarter in which a refund is made or a credit
memorandum or refund is issued. Sales discounts
granted and indicated in the invoice at the time of sale
may be excluded from the gross sales within the same
quarter. (100(d))
2 This circular is based on VAT Ruling No. 190-90 dated
August 17, 1990 which revoked VAT Ruling No. 009-88

and VAT Ruling No. 279-88, June 30, 1988, classifying

copra as an agricultural food product.
3 See Victorias Milling Co. v. Social Security Commission,
114 Phil. 555 (1962); Philippine Blooming Mills v. Social
Security System, 124 Phil. 499 (1966).
4 Bk. VII, Ch. 2, 9.
5 Taada v. Tuvera, 146 SCRA 446 (1986). See Victorias
Milling Co. v. SSC, supra note 3.
6 K. DAVIS, Administrative Law 116 (1965).
7 Petitioner's claim that RMC No. 47-91 erroneously
revoked irrelevant VAT rulings of the BIR is not correct.
RMC No. 47-91 revoked VAT Rulings No. 009-88 and No.
279-88, which dealt with the question whether copra is an
agricultural food or non-food product. VAT ruling No. 00988 held that "copra as an agricultural product is exempt
from VAT in all stages of distribution." On the other hand,
VAT Ruling No. 279-88 treated "copra . . . as an
agricultural food product in its original state" and,
therefore, "exempt from VAT under Section 103(b) of the
TAX Code, as amended by EO 273 regardless of whether
the sale is made by producer or subsequent sale."
8 Kapatiran ng mga Naglilingkod sa Pamahalaan ng
Pilipinas, Inc. v. Tan, 163 SCRA 371 (1988) (sustaining
the validity of E.O. 273 adopting the VAT); Sison, Jr. v.
Ancheta, 130 SCRA 653 (1984) (sustaining the validity of
B.P. Blg. 135 providing for taxable income taxation).

48
G.R. No. L-44899 April 22, 1981
MARIA E. MANAHAN, petitioner,
vs.
EMPLOYEES' COMPENSATION COMMISSION and GSIS
(LAS PIAS MUNICIPAL HIGH SCHOOL),respondents.

FERNANDEZ, J.:
This is a petition to review the decision of the Employees'
Compensation Commission in ECC Case No. 0070 (Nazario
Manahan, Jr., deceased), entitled "Maria Manahan, Appellant,
versus Government Service Insurance System, (Las Pias
Municipal High School), Respondent" affirming the decision of
the Government Service Insurance System which denied the
claim for death benefit. 1
The claimant, petitioner herein, Maria E. Manahan, is the
widow of Nazario Manahan, Jr., who died of "Enteric Fever"
while employed as classroom teacher in Las Pias Municipal
High School, Las Pias Rizal, on May 8, 1975.
The petitioner filed a claim with the Government Service
Insurance for death benefit under Presidential Decree 626. In
a letter dated June 19, 1975, the Government Service
Insurance denied the claim on a finding that the ailment of
Nazario Manahan, Jr., typhoid fever, is not an occupational
disease.
The petitioner filed a motion for reconsideration on the ground
that the deceased, Nazario Manahan, Jr., was in perfect health
when admitted to the service and that the ailment of said
deceased was attributable to his employment.

49
The Government Service Insurance System affirmed the
denial of the claim on the ground that enteric fever or
paratyphoid is similar in effect to typhoid fever, in the sense
that both are produced by Salmonella organisms.
The petitioner appealed to the Employees' Compensation
Commission which affirmed the decision of the Government
Service Insurance System on a finding that the ailment of the
deceased, enteric fever, was not induced by or aggravated by
the nature of the duties of Nazario Manahan, Jr. as a teacher. 2
To support her theory that the disease of Nazario Manahan,
Jr., enteric fever, resulted from his employment as classroom
teacher of the Las Pias Municipal High School, the petitioner
cites the following authority:
EPIDEMOLOGY AND PATHOLOGY
OF ENTERIC FEVER
THE SOURCE OF INFECTION is feces or urine from
patients and carriers. Family contacts may be transient
carriers and 2 to 5% of patients become chronic
carriers. In poorly sanitized communities, water is the
most frequent vehicle of transmission; food, especially
milk, is the next most important. In modern urban
areas, food, contaminated by healthy carriers who are
food handlers, is the principal vehicle. Flies may spread
the organism from feces to food. Direct contact
infection is infrequent.
The organism enters the body through the
gastrointestinal tract, invading the blood stream by way
of the lymphatic channels. There is hyperplasia and
often ulceration of Pyeris patches, especially in the
ileum and cecum. When the ulcers heals, no scar

results. The kidneys and liver usually show cloudly

swelling and the latter may reveal a patchy necrosis
The spleen is enlarged and soft. Rarely, the lungs show
pneumonic changes. (Merck Manual 10th Edit., P.
842) 3
The factual findings of the respondent Commission indicate
that the deceased was in perfect health when he entered
government service on July 20, 1969, and that in the course of
his employment in 1974, he was treated for epigastric pain. He
succumbed to enteric fever on May 8, 1975.
Enteric fever is referred to in medical books as typhoid fever
(Dorlands Illustrated Medical Dictionary, 24th Ed., p. 548) or
paratyphoid fever (Harrison's Principles of Internal Medicine,
6th Ed., p. 817). Its symptoms include abdominal pain (id., p.
810). In discussing the clinical manifestations of the disease,
Mr. Harrison states that recovery (from enteric or paratyphoid
fever) may be followed by continued excretion of the causative
organism in the stools for several months (id., p. 817). This
lingering nature of the species producing enteric fever points
out the possibility that the illness which afflicted the deceased
in 1974 was the same as, or at least, related to, his 1975
illness.
The medical record of the deceased shows that he had a
history of ulcer-like symptoms (p. 3, ECC rec.). This butresses
the claimant's claim that her husband had been suffer from
ulcer several months before his death on May 8, 1975. This is
likewise sustained by the medical certificate (p. 12, ECC rec.)
issued by Dr. Aquilles Bernabe to the effect that "Nazario
Manahan was treated for epigastric pain probably due to
hyper-acidity on December 10, 1974." Epigastric pain is a
symptom of ulcer, and ulcer is a common complication of
typhoid fever. There is even such a thing as "typhoidal ulcer"
(p. 812, supra).

50
Because of these circumstances, the illness that claimed the
life of the deceased could have had its onset months before
December 10, 1974. Such being the case, his cause of action
accrued before December 10, 1974.
In the case of Corales vs. ECI (L-44063, Feb. 27, 1979), We
ruled that:
... Article 294, Title III (Transitory and Final Provisions)
of the New Labor Code provides that all actions and
claims accruing prior to the effectivity of this Code shall
be determined in accordance with the laws in force at
the time of their accrual and under the third paragraph
of Article 292, Title 11 Prescription of Offenses and
Claims, workmen's compensation claims accruing prior
to the effectivity of this Code and during the period from
November 1, 1974 up to December 31, 1974 shall be
processed and adjudicated in accordance with the laws
and rules at the time their causes of action accrued.
Hence, this Court applied the provisions of the
Workmen's Compensation Act, as amended, on
passing upon petitioner's claim.
Pursuant to such doctrine and applying now the provisions of
the Workmen's Compensation Act in this case, the
presumption of compensability subsists in favor of the
claimant.
In any case, We have always maintained that in case of doubt,
the same should be resolved in favor of the worker, and that
social legislations like the Workmen's Compensation Act and
the Labor Code should be liberally construed to attain their
laudable objective, i.e., to give relief to the workman and/or his
dependents in the event that the former should die or sustain
an injury.

Moreover, the constitutional guarantee of social justice and

protection to labor make Us take a second look at the
evidence presented by the claimant.
As a teacher of the Las Pias Municipal High School at Las
Pias Rizal, the deceased used to eat his meals at the school
canteen. He also used the toilet and other facilities of the
school. Said the respondent Commission," ... it is not
improbable that the deceased might have contracted the
illness during those rare moments that he was away from his
family, since it is medically accepted that enteric fever is
caused by salmonella organisms which are acquired by
ingestion of contaminated food or drinks. Contamination of
food or water may come from the excretion of animals such as
rodents flies, or human beings who are sick or who are
carriers, or infection in meat of animals as food. Meat, milk and
eggs are the foods most frequently involved in the
transmission of this type of species, since the organism may
multiply even before ingestion. ..." These findings of the
respondent Commission lead to the conclusion that the risk of
contracting the fatal illness was increased by the decedent's
working condition.
In view of the foregoing, the petition for review is meritorious.
WHEREFORE, the decision of the Employees' Compensation
Commission sought to be reviewed is hereby set aside the
Government Service Insurance System is ordered:
1. To pay the petitioner the amount of SIX THOUSAND
PESOS (P6,000.00) as death compensation benefit;
2. To pay the petitioner the amount of SIX HUNDRED PESOS
(P600.00) as attorney's fees;

51
3. To reimburse the petitioner expenses incurred for medical
services, hospitalization and medicines of the deceased
Nazario Manahan, Jr., duly supported by proper receipts; and
4. To pay administrative fees.
SO ORDERED.
Teehankee (Chairman), Makasiar, Guerrero and De Castro,
JJ., concur.

G.R. No. 110170 February 21, 1994

ROLETO A. PAHILAN, petitioner,
vs.
RUDY A. TABALBA, COMMISSION ON ELECTIONS, and
HONORABLE JUDGE SINFOROSO V. TABAMO, JR.,
BRANCH 28, MAMBAJAO, CAMIGUIN, respondents.
Pimentel, Apostol, Layosa & Sibayan Law Office for petitioner.
Marciano Ll. Aparte, Jr. for Rudy A. Tabalba.

Separate Opinions
REGALADO, J.:
MELENCIO-HERRERA, J., concurring:
I concur. Although enteric fever is not an occupational disease,
considering the cause of said illness, the risk of contracting it
could have been increased by the working conditions of the
deceased, a teacher, who used to eat his meals at the school
canteen and used the comfort room and other facilities of the
school.

This original action for certiorari impugns the Order 1 of

respondent Commission on Elections, dated January 19,
1993, dismissing the appeal filed by petitioner Roleto A.
Pahilan for the latter's failure to file a notice of appeal with the
Regional Trial Court of Mumbajao, Camiguin, and, necessarily
on the same rationale, the Resolution 2 promulgated by said
respondent on May 6, 1993 denying petitioner's motion for
reconsideration.
Petitioner Pahilan and private respondent Tabalba were
candidates for Mayor of Guinsiliban, Camiguin during the local
elections held on May 11, 1992. On May 13, 1992, the
Municipal Board of Canvassers proclaimed Tabalba as the
duly elected Mayor of Guinsilban, the latter having garnered
1,087 votes as against 806 votes for Pahilan.

EN BANC

Thereafter, Pahilan filed an election protest 3 which he sent by

registered mail on May 23, 1992, addressed to the Clerk of
Court of the Regional Trial Court of Mambajao, Camiguin,
attaching thereto P200.00 in cash as payment for docket fees.

52
In a letter 4 dated May 28, 1992, the OIC-Clerk of Court of the
Regional Trial Court of Mambajao, Camiguin, Branch 28,
informed Pahilan that the correct fees that where supposed to
be paid amounted to P620.00, and that, accordingly, the
petition would not be entered in the court docket and
summons would not be issued pending payment of the
balance of P420.00.
On June 16, 1992, upon receipt of the latter, Pahilan paid the
required balance in the total amount P470.00. 5
Subsequently, on June 22, 1992, Tabalba filed his answer with
Counterclaim, 6 alleging as one of his affirmative defenses lack
of jurisdiction on the part of the trial court to entertain the
election protest for having been filed beyond the ten-day
period provided by law.
On August 17, 1992, Pahilan filed a Motion for Inhibition, dated
August 14, 1992, because of alleged serious and grave doubts
that the presiding judge could impartially hear and decide his
election protest with the cold neutrality of an impartial judge,
as the latter allegedly belongs to and had supported a political
group adverse to the candidacy of petitioner.
On August 18, 1992, the trial court proceeded with the pre-trial
conference, heard the defense on the allegation of lack of
jurisdiction for non-payment of docket fees, and thereafter
ordered the parties to submit their respective memoranda.
Tabalba filed his Memorandum in Support of Affirmative
Defense of Lack of Jurisdiction, 7 dated September 4, 1992.
Under date of September 22, 1992, Pahilan filed a
Memorandum 8 as well as a Motion to Resolve Motion for
Inhibition Prior to Resolution of Affirmative Defenses. 9

On October 2, 1992, the trial court issued an Order 10 denying

the motion for inhibition and dismissing the election protest for
"non-payment on time of the required fees for filing an initiatory
pleading." Pahilan's counsel received a copy of said order on
October 12, 1992 in Cagayan de Oro City.
On October 17, 1992 and within the 5-day period to appeal,
Pahilan filed a verified appeal brief 11 in respondent
Commission on Elections, with copies duly served on the
Regional Trial Court of Mambajao, Camiguin and the counsel
for herein private respondent.
On December 12, 1992, the Comelec Contests Adjudication
Department directed the Clerk of Court, Regional Trial Court,
Camiguin, Branch 28, to immediately transmit the complete
records of EP case No. 3(92) which was being appealed by
herein petitioner. 12 Thereafter, in a letter 13 dated January 7,
1993, the said Clerk of Court informed respondent
Commission that "to this very late date, this office has not
received any notice of appeal from the aggrieved party." As a
consequence, respondent Commission, in an Order dated
January 19, 1993, dismissed Pahilan's verified appeal for
failure to appeal within the prescribed period.
Pahilan filed a motion for reconsideration 14 of the order
dismissing his appeal. Both parties were required by
respondent Commission to file their respective memoranda.
Finally, on May 6, 1993, respondent Commission issued its
aforestated resolution denying Pahilan's motion for
reconsideration.
Hence, this petition on the bases of the following assigned
errors:
1. Whether or not respondent Commission validly
dismissed the verified "Appeal" of petitioner which

53
contains all the elements of a "notice of appeal" and
more expressive of the intent to elevate the case for
review by said appellate body, and furnishing copies
thereof to the respondent trial judge and counsel for
the adverse party, aside from the incomplete payment
of the appeal fee; and
2. Whether or not the respondent trial judge validly
dismissed the petition of protest of petitioner for nonpayment on time of the required fee.
We find cogency and merit in the petition.
The bone of contention in this petition is the alleged erroneous
dismissal of petitioner's appeal by respondent Commission
because of the failure of petitioner to file a notice of appeal
before the Regional Trial Court of Mambajao, Camiguin which,
in turn, dismissed the election protest of petitioner for nonpayment of docket fees.
The COMELEC RULES OF PROCEDURE provide for the
manner in which appeals from decisions of courts in election
contests shall be made, to wit:
RULE 22 Appeals from Decisions of Courts
in Election Protest Cases
Sec. 1. Caption and title of appealed cases. In all
election contests involving the elections, returns, and
qualifications of municipal or barangay officials, the
party interposing the appeal shall be called the
"Appellant" and the adverse party the "Appellee", but
the title of the case shall remain as it was in the court of
origin.
xxx xxx xxx

Sec. 3. Notice of Appeal. Within five (5) days after

promulgation of the decision of the court, the aggrieved
party may file with said court a notice of appeal, and
serve a copy thereof upon the attorney of record of the
adverse party.
Sec. 4. Immediate transmittal of records of the
case. The Clerk of the court concerned shall, within
fifteen (15) days from the filing of the notice of appeal,
transmit to the Electoral Contests Adjudication
Department the complete records of the case, together
with all the evidence, including the original and three(3)
copies of the transcript of stenographic notes of the
proceedings.
Sec. 5. Filing of briefs. The Clerk of Court
concerned, upon receipt of the complete records of the
case, shall notify the appellant or his counsel to file with
the Electoral Contests Adjudication Department within
thirty (30) days from receipt of such notice, ten (10)
legible copies of his brief with proof of service thereof
upon the appellee.
Within thirty (30) days from receipt of the brief of the
appellant, the appellee shall file ten (10) legible copies
of his brief with proof of service thereof upon the
appellant.
xxx xxx xxx
Sec. 9. Grounds for dismissal of appeal. The appeal
may be dismissed upon motion of either party or at the
instance of the Commission on any of the following
grounds:
(a) Failure of the appellant to pay the appeal fee;

54
(b) Failure of the appellant to file copies of his brief
within the time provided by these rules;
(c) Want of specific assignment of errors in the
appellant's brief; and
(d) Failure to file notice of appeal within the prescribed
period.
In the case at bar, petitioner received a copy of the trial court's
order dismissing his election protest on October 12, 1992. As
earlier stated, herein petitioner, instead of filing a notice of
appeal as required by the rules, filed with respondent
Commission a verified appeal brief within the five-day
reglementary period by registered mail under Registry Receipt
No. 43093, dated October 17, 1992. It will be noted, however,
that on even date, petitioner likewise sent by registered mail
copies of his appeal brief to the Regional Trial Court of
Mambajao, Camiguin, under Registry Receipt No. 43091, and
to the counsel of herein private respondent, under Registry
Receipt No. 43092. 15
The question now posed by the foregoing factual situation is
whether the notice of appeal can be validly substituted by an
appeal brief. We firmly believe and so hold, under the
considerations hereinunder discussed, that the same may be
allowed.
First, in cases where a record on appeal is required under the
Rules of Court, it has been consistently held that the filing or
presentation and approval of the record on appeal on time
necessarily implies or involves the filing of the notice of
appeal, 16 because the act of taking or perfecting an appeal is
more expressive of the intention to appeal than the filing of a
mere notice to do so. 17

If the courts can deign to be indulgent and lenient in the

interpretation of the rules respecting ordinary civil actions
involving private parties representing private interests, with
more reason should the rules involving election cases, which
are undoubtedly impressed with public interest, be construed
with the same or even greater forbearance and liberality.
It has been frequently decided, it may be stated as a general
rule recognized by all courts, that statutes providing for
election contests are to be liberally construed to the end that
the will of the people in the choice of public officers may not be
defeated by mere technical objections. An election contest,
unlike an ordinary action, is imbued with public interest since it
involves not only the adjudication of the private interests of
rival candidates but also the paramount need of dispelling the
uncertainty which beclouds the real choice of the electorate
with respect to who shall discharge the prerogatives of the
office within their gift. Moreover, it is neither fair nor just to
keep in office for an uncertain period one whose right to it is
under suspicion. It is imperative that his claim be immediately
cleared not only for the benefit of the winner but for the sake of
public interest, which can only be achieved by brushing aside
technicalities of procedure with protract and delay the trial of
an ordinary
action. 18
For this reason, broad perspectives of public policy impose
upon courts the imperative duty to ascertain by all means
within their command who is the real candidate elected in as
expeditious a manner as possible, without being fettered by
technicalities and procedural barriers to the end that the will of
the people may not be frustrated. 19
It is true that perfection of an appeal in the manner and within
the period laid down by law is not only mandatory but also
jurisdictional, and that the failure to perfect an appeal as

55
required by the rules has the effect of defeating the right of
appeal of a party and precluding the appellate court from
acquiring jurisdiction over the case. 20Nevertheless, in some
instances, this Court has disregarded such unintended lapses
so as to give due course to appeals on the basis of strong and
compelling reasons, such as serving the ends of justice and
preventing a grave miscarriage thereof in the exercise of our
equity
jurisdiction. 21

appeal is taken. A perusal of herein petitioner's appeal brief will

disclose the following information: that the parties to the case
are Roleto A. Pahilan as protestant-appellant and Rudy A
Tabalba as protestee-appellee; that appellant therein is
appealing from the order of the Regional Trial Court of
Mambajao, Camiguin, dismissing the petition for election
contest in Election Case No. 3(92); and that the appeal is
being made pursuant to Section 22 of Republic Act No. 7166,
that is, before the Commission on Elections.

It is our considered opinion that public interest is of far greater

importance than the justifications of substantial justice and
equity in seeking an exception to the general rule. Hence,
election cases, by their very nature, should and ought to merit
a similar exemption from a strict application of technical rules
of procedure.

Accordingly, there is no gainsaying the fact that the particulars

which ought to be reflected in the notice of appeal have been
specifically and categorically spelled out in the appeal brief of
petitioner. Perforce, and in light of the foregoing disquisitions,
we find and so hold that petitioner is entitled to the relief
prayed for.

Second, it has been shown and it is not even denied that the
Regional Trial Court of Camiguin, as well as the counsel for
private respondent, was furnished copies of the appeal brief
which were sent by registered mail on October 17, 1992,
within the reglementary period to appeal. This fact was never
refuted by the Solicitor General in his Comment.
Concomitantly, although the Clerk of Court claimed that he had
not received any notice of appeal from herein petitioner, it
would be safe to assume, under the circumstances, that the
appeal brief duly directed mailed was received in the regular
course of the
mail 22 and was, therefore, deemed filed with the trial court as
of the date of mailing.

We now proceed to resolve the issue anent the dismissal of

petitioner's election protest by the Regional Trial Court for nonpayment, or more accurately the incomplete payment, of
docket fees. Ordinarily, with the reversal of the respondent
Commission's questioned order, this case should be remanded
to said court for adjudication on the merits. Considering,
however, the exigencies of time appurtenant to the disposition
of election cases, and considering further that the issue has at
any rate been squarely raised in this petition, it is now
incumbent upon this Court to act on the propriety of the trial
court's order dismissing the election protest for failure of
petitioner to pay the correct amount of docket fees.

Third, applying suppletorily the provisions of the Rules of

Court, 23 particularly Section 4, Rule 41 thereof, the
requirement is that a notice of appeal shall specify the parties
to the appeal; shall designate the judgment or order, or part
thereof, appealed from; and shall specify the court to which the

In dismissing petitioner's action, the trial court relied on the

rulings enunciated in the cases of Malimit vs. Degamo 24(an
action for quo warranto), Magaspi, et al. vs. Ramolete, et
al. 25 (a suit for recovery of possession and ownership of
land),Lee vs. Republic 26 (a petition for declaration of intention
to become a Filipino citizen), Manchester Development

56
Corporation vs. Court of Appeals, et al. 27 (an action for a sum
of money and damages), Sun Insurance Office, Ltd., (SIOL) et
al. vs.Asuncion. 28 (a suit for a sum of money and damages),
and Tacay, et al. vs. Regional Trial Court of Tagum, Davao del
Norte, etc., et al. 29 (an action for damages). It bears emphasis
that the foregoing cases, except for Malimit vs. Degamo, are
ordinary civil actions. This fact alone would have sufficed for a
declaration that there was no basis for the dismissal of
petitioner's protest for the simple reason that an election
contest is not an ordinary civil action. Consequently the rules
governing ordinary civil actions are not necessarily binding on
special actions like an election contest wherein public interest
will be adversely affected.
The case of Malimit vs. Degamo, on its part, is not on all fours
with the present case. In that case, the petition forquo
warranto was mailed to the clerk of Court on December 14,
1959 and was received by the latter on December 17, 1959.
The docket fee was deemed paid only on January 5, 1960,
because the petitioner therein failed to prove his allegation that
a postal money order for the docket fee was attached to his
petition. Hence, the petition for quo warranto was correctly
dismissed.
In the case at bar, it cannot be gainsaid that the sum of
P200.00 was attached to the petition mailed to the Regional
Trial Court of Camiguin and this fact was even acknowledged
by the Clerk of Court thereof when he requested herein
petitioner to pay the balance of the correct docket fee.
In Malimit, there was no docket fee paid at all at the time of
mailing; in the present case, the docket fee was paid except
that the amount given was not correct. Considering the fact
that there was an honest effort on the part of herein petitioner
to pay the full amount of docket fees, we are not inclined to
insist on a stringent application of the rules.

Furthermore, there are strong and compelling reasons to rule

that the doctrine we have established in Manchesterand cases
subsequent thereto cannot be made to apply to election cases.
As we have earlier stated, the cases cited are ordinary civil
actions whereas election cases are not. The rules which apply
to ordinary civil actions may not necessarily serve the purpose
of election cases, especially if we consider the fact that
election laws are to be accorded utmost liberality in their
interpretation and application, bearing in mind always that the
will of the people must be upheld. Ordinary civil actions would
generally involve private interests while all elections cases are,
at all times, invested with public interest which cannot be
defeated by mere procedural or technical infirmities.
Again, the Court in Manchester made its ruling in view of its
finding that there existed the unethical practice of lawyers and
parties of filing an original complaint without specifying in the
prayer the amount of damages which, however, is stated in the
body of the complaint. This stratagem is clearly intended for no
other purpose than to evade the payment of the correct filing
fees by misleading the docket clerk in the assessment thereof.
Thus, the court therein held that jurisdiction shall be acquired
only upon payment of the prescribed docket fee.
That ruling was later relaxed in the case of Sun
Insurance which allowed the subsequent payment of the
correct docket fees provided it is made within the reglementary
period or before prescription has set in. The reason given was
that there was no intent on the part of the petitioners therein to
defraud the government, unlike the plaintiff in the case
of Manchester.
In Tacay, et al. vs. Tagum, et al., it was stated that this Court,
inspired by the doctrine laid down in Manchester,issued
Circular No. 7 on March 24, 1988, which was aimed at the

57
practice of certain parties who omit from the prayer of their
complaints any specification of the amount of damages, the
omission being clearly intended for no other purpose than to
evade the payment of the correct filing fees by deluding the
docket clerk in his assessment of the same. In all these cases,
the rule was applied for failure of the plaintiff to include in the
prayer of the complaint the total amount of damages sought
against the defendant. The reason for this, according to
the Tacay case, is because the amount of damages will help
determine two things: first, the jurisdiction of the court; and,
second, the amount of docket fees to be paid.

reason why only two hundred pesos was remitted at the same
time with the petition." 30

In the case now before us, and in election cases in general, it

is not the amount of damages, if any, that is sought to be
recovered which vests in the courts the jurisdiction to try the
same. Rather, it is the nature of the action which is
determinative of jurisdiction. Thus, regardless of the amount of
damages claimed, the action will still have to be filed with the
Regional Trial Court. In such a case, the evil sought to be
avoided in Manchester and like cases will never arise.
Peremptorily, there will be no occasion to apply the rulings in
the cases mentioned. In addition, the filing fee to be paid in an
election case is a fixed amount of P300.00. There will
consequently be no opportunity for a situation to arise wherein
an election contest will have to be dismissed for failure to state
the exact amount of damages and thus evince an intent to
deprive the Government of the docket fees due.

WHEREFORE, the Order of the Commission on Elections

dated January 19, 1993, as well as its Resolution promulgated
on May 6, 1993, both in EAC No. 24-92; and the Order of the
Regional Trial court of Mambajao, Camiguin, dated October 2,
1992, in Election Case No. 3(92) are hereby REVERSED and
SET ASIDE, and the records of this case are hereby ordered
REMANDED to the court a quo for the expeditious
continuation of the proceedings in and the adjudication of the
election protest pending therein as early as practicable.

Finally, in Manchester, there was a deliberate attempt on the

part of the plaintiffs therein to evade payment of the correct
docket fees. In the case of petitioner, he already explained,
and this we find acceptable and justified, that "since the
schedule of the new rates of court fees was not then available
and the filing of the petition for election contests was done thru
the mails, the old rates readily came to mind, and this was the

#Footnotes

To summarize, the evil sought to be avoided

in Manchester and similar cases can never obtain in election
cases since (1) the filing fee in an election cases is fixed and
not dependent on the amount of damages sought to be
recovered, if any; and (2) a claim for damages in an election
case is merely ancillary to the main cause of action and is not
even determinative of the court's jurisdiction which is governed
by the nature of the election filed.

SO ORDERED.
Narvasa, C.J., Cruz, Feliciano, Padilla, Bidin, Davide, Jr.,
Romero, Nocon, Bellosillo, Melo, Quiason, Puno, Vitug and
Kapunan, JJ., concur.

1 Annex O, Petition; Rollo, 125.

2 Annex S, id.; ibid., 189
3 Annex A, id.: ibid., 31.
4 Annex C, id.; ibid., 36.
5 Annexes D to D-4, id.; ibid., 37-39.
6 Annex E, id.; ibid., 40.

58
7 Annex H, id.; ibid., 53.
8 Annex I, id.; ibid., 57.
9 Annex G. id.; ibid., 61.
10 Annex K, id.; ibid., 63.
11 Annex L, id.; ibid., 77.
12 Annex M, id.; ibid., 123.
13 Annex N, id.; ibid., 124.
14 Annex P, id.; ibid., 127.
15 Rollo, 88.
16 Lopez vs. Lopez, et al., 77 Phil. 133 (1946).
17 Peralta vs. Solon, 77 Phil. 610 (1946).
18 Unda vs. Commission on Elections, et al., G.R. No.
94090, October 18, 1990, 190 SCRA 827.
19 Vda. de De Mesa, et al. vs. Mencias, et al., G.R. No.
L-24583, October 29, 1966, 18 SCRA 533.
20 Villanueva vs. Court of Appeals, et al., G.R. No.
99357, January 27, 1992, 205 SCRA 537.
21 Imperial Textile Mills, Inc. vs. National Labor
Relations Commission, et al., G.R. No. 101527,
January 19, 1993, 217 SCRA 237.
22 Section 3(v), Rule 131, Rules of Court.
23 This is expressly authorized by Section 1, Rule 43
of the comelec Rules of Procedure.
24 G.R. No. L-17850, Nov. 28, 1964, 12 SCRA 450.
25 G.R. No. L-34840, July 20, 1982, 115 SCRA 193.
26 G.R. No. L-15027, January 31, 1964, 10 SCRA 65.
27 G.R. No. 75919, May 7, 1987, 149 SCRA 562.
28 G.R Nos. 79937-38, February 13, 1989, 170 SCRA
274.
29 G.R. Nos. 88075-77, December 20, 1989, 180
SCRA 433.
30 Rollo, 58.

THIRD DIVISION

G.R. No. L-36378 January 27, 1992

PIO BALATBAT, petitioner,
vs.
COURT OF APPEALS and DOMINGO PASION, respondents.
Bureau of Agrarian Legal Assistance for petitioner.
Roberto Y. Miranda for private respondent.

DAVIDE, JR., J.:

This is a petition for review on certiorari under Rule 45 of the
Rules of Court filed by an agricultural lessee who was ordered
ejected in an action for ejectment filed by the new owner of the
landholding on the basis of the latter's claim that he will
personally cultivate the land pursuant to Section 36 (1) of R.A.
No. 3844.
The antecedent facts, as gathered from the pleadings, are not
controverted.
Petitioner is the agricultural lessee of a parcel of land located
at Santiago, Sta. Ana, Pampanga containing an area of 18,490
square meters, more or less, which is owned by Daniel Garcia.
The latter sold the land to private respondent Domingo Pasion
and had declared for taxation purposes under Tax Declaration
No. 126. Sometime after the sale, Domingo Pasion, on a claim
that he will personally cultivate the land, filed on 15 June 1970
with the Court of Agrarian Relations, Fifth Regional District,
Branch II at San Fernando, Pampanga, a complaint to eject
petitioner alleging therein that he had notified petitioner of his

59
intention to personally cultivate the landholding, but despite
the lapse of one (1) agricultural year from receipt of the notice
thereof, petitioner refused to vacate the land.
In his amended answer with counterclaim, petitioner denied
having received any notice from the private respondent and by
way of special and affirmative defenses, he alleged that: (a)
the jurisdictional requirements of the law have not been
complied with by private respondent; (b) the latter has another
palay landholding situated at Santiago, Sta. Ana, Pampanga
with an area of
2 1/2 hectares which is being worked by a hired helper; (c)
private respondent is physically unfit to perform the different
phases of farm work; and (d) that private respondent filed the
case merely to harass petitioner because of the latter's
adoption of the agricultural leasehold system and refusal to
shift back to the 50-50 sharing arrangement with the former. In
his counterclaim, petitioner sought to exercise his right of
redemption over the subject landholding pursuant to the
provisions of R.A. No. 3844 in view of the failure of the former
owner, Daniel Garcia, to notify him beforehand of the intended
sale of the landholding. Private respondent filed his Answer to
the Counterclaim.
At the pre-trial conference of the case, the parties could only
stipulate on their being of legal age, their residences and on
the fact that private respondent is the owner of the landholding
in question, which is cultivated by petitioner under the
leasehold system.
After trial on the merits, the agrarian court rendered a decision
against petitioner, the dispositive portion of which reads:
IN VIEW OF ALL THE FOREGOING, judgment is
hereby rendered granting authority to plaintiff Domingo
Pasion to eject defendant Pio Balatbat from the

landholding in question described in the complaint and

to personally cultivate his landholding, and ordering
said defendant to vacate the said premises and to
deliver the possession thereof to the said plaintiff,
subject, however, to the second proviso contained in
Section 36(1) and to the provisions of Section 25 of
Republic Act No. 3844.
The claim for damages of plaintiff is DENIED for lack of
basis.
The counterclaim of the defendants is hereby
DISMISSED for lack of merit.
No pronouncement as to costs.
SO ORDERED. 1
Petitioner appealed the decision to the Court of Appeals which
docketed it as C.A.-G.R. No. 00479-R; he urged said court to
reverse it because the agrarian court gravely erred in: (a)
ordering his ejectment, completely denying the fact that private
respondent, due to his sickness, is physically incapable of
personally cultivating the subject landholding and that private
respondent filed the complaint out of vindictiveness, and (b) in
dismissing the counterclaim for redemption, contrary to the
facts and law. 2
On 16 December 1972, the Court of Appeals promulgated its
decision 3 in C.A.-G.R. No. 00479-R affirming the decision of
the agrarian court. In disposing of the assigned errors, said
Court ruled that private respondent complied with the
requirement of notice of at least one (1) agricultural year. And
although private respondent was already 69 years old at the
time he testified, there is nothing on record to indicate that he
is suffering from any physical ailment; besides, in this age of

60
advanced technology, most of the back-breaking processes of
farming have been lightened by machinery. As regards the
asserted right of redemption pursuant to Section 11 of R.A. No.
3844, the Court held that the petitioner "failed to comply with
the requirements" and took note of petitioner's petition before
the lower court to litigate as pauper as "a circumstance that is
highly indicative of lack of funds on his part." 4 His motion to
reconsider 5 the decision having been denied in the resolution
of 25 January 1973, 6 petitioner took the instant recourse to
present the following legal issues for this Court's resolution:
1. What is the effect of Section 7 of R.A. No. 6389,
abolishing personal cultivation by landowners as a
ground for dispossession of tenants from their
landholdings, on pending appealed cases?
2. Should pending appealed cases on personal
cultivation be decided in the light of Section 7 of R.A.
No. 6389?
Expectedly, petitioner maintains that this case should have
been decided in the light of Section 7 of R.A. No. 6389 since,
in view of the appeal, the private respondent did not yet
acquire a vested right to personally cultivate the landholding.
In short, the application of the repealing law warrants the
dismissal of the action for ejectment.
Republic Act No. 6389 took effect on 10 September 1971,
during the pendency of this case before the Court of Appeals.
After private respondent filed his comment 7 in compliance with
the resolution of 13 March 1973, this Court resolved to give
due course to the petition 8 and thereafter required the
petitioner to file his Brief, 9 which he complied with on 22 June
1973; 10 he makes the following assignment of errors:

I
The Court a quo gravely erred in ordering the
ejectment of herein petitioner on the ground of
personal cultivation.
II
The Honorable Court of Appeals erred in not dismissing
private respondent's complaint for cultivation in view of
the repeal of Section 36(1) Rep. Act 3844 by Section 7
of Rep. Act 6389.
Private respondent filed his Brief on 25 September 1973.
In support of the first assigned error, petitioner asserts that
during the pendency of the appeal in the Court of Appeals,
Congress passed Republic Act No. 6389, Section 7 of which
amended Section 36(1) of R.A. No. 3844. As amended,
personal cultivation is no longer a ground to dispossess an
agricultural lessee of his landholding. Section 36(1) of R.A. No.
3844 originally read as follows:
Sec. 36. Possession of Landholding; Exceptions.
Notwithstanding any agreement as to the period or
future surrender of the land, an agricultural lessee shall
continue in the enjoyment and possession of his
landholding except when his dispossession has been
authorized by the Court in a judgment that is final and
executory if after due hearing it is shown that:
(1) The agricultural lessorowner or a member
of his immediate family will personally cultivate
the landholding or will convert the landholding, if
suitably located, into residential, factory,
hospital or school site or other useful non-

61
agricultural purposes: Provided, That the
agricultural lessee shall be entitled to
disturbance compensation equivalent to five
years rental on his landholding in addition to his
rights under Sections twenty-five and thirty-four,
except when the land owned and leased by the
agricultural lessor, is not more than five
hectares, in which case instead of disturbance
compensation the lessee may be entitled to an
advance notice of at least one agricultural year
before ejectment proceedings are filed against
him: Provided, further, That should the
landholder not cultivate the land himself for
three years or fail to substantially carry out such
conversion within one year after the
dispossession of the tenant, it shall be
presumed that he acted in bad faith and the
tenant shall have the right to demand
possession of the land and recover damages
for any loss incurred by him because of said
dispossession.
xxx xxx xxx
Section 7 of R.A. No. 6389 reads as follows:
Sec. 7. Section 36(1) of the same Code is hereby
amended to read as follows:
(1) The landholding is declared by the
department head upon recommendation of the
National Planning Commission to be suited for
residential, commercial, industrial or some other
urban purposes: Provided, That the agricultural
lessee shall be entitled to disturbance
compensation equivalent to five times the

average of the gross harvest on his landholding

during the last five preceding calendar years;
Since under the original provision of Section 36(1) of R.A. No.
3844, the dispossession of the agricultural lessee on the
ground of personal cultivation by the agricultural lessor-owner
can only take place when "authorized by the Court in a
judgment that is final and executory," it follows then that since
the repeal of the provision took effect before the judgment in
this case became final and executory, private respondent may
no longer dispossess petitioner on that ground because it had
been removed from the statute books. Counsel for petitioner,
Atty. Greta-Diosa Quitorio, Trial Attorney of the Bureau of
Agrarian Legal Assistance, made a thorough study of the
history of R.A. No. 6389 and came up with the conclusion that,
as gathered from the questions and answers of Senators
Diokno and Laurel, the legislative intent to give retroactive
effect to said law or to make it applicable to pending cases of
ejectment on ground of personal cultivation, appeared clear.
She further summoned to the aid of petitioner an arsenal of
impressive doctrines in statutory construction to protect the
cause and strengthen the case of the petitioner. All of her
efforts, which are undoubtedly commendable, are futile. As
early as 1984, in Nilo vs. Court of Appeals, et al., and Castro
vs. Castro, 11 this Court, per Justice Hugo E. Gutierrez, Jr.,
ruled that Section 7 of R.A. No. 6389 cannot be given
retroactive effect because, while during the debates on the bill
which was eventually enacted into Republic Act No. 6389,
there were statements made on the floor that "the owner will
lose the right to eject after the enactment of this measure"
even in cases where the owner has not really succeeded in
ejecting the
tenants, 12 Congress failed to express an intention to make
Republic Act No. 6389 retroactive and to cover ejectment
cases on the ground of personal cultivation then pending
adjudication by the courts. This Court thus stated:

62
xxx xxx xxx
Article 3 of the old Civil Code (now Article 4 of the New
Civil Code) provides that: "Laws shall not have a
retroactive effect unless therein otherwise provided."
According to this provision of law, in order that a law
may have retroactive effect it is necessary that an
express provision to this effect be made in the law,
otherwise nothing should be understood which is not
embodied in the law. Furthermore, it must be borne in
mind that a law is a rule established to guide our
actions with no binding effect until it is enacted,
wherefore, it has no application to past times but only
to future time, and that is why it is said that the law
looks to the future only and has no retroactive effect
unless the legislator may have formally given that effect
to some legal provisions (Lopez and Lopez v. Crow, 40
Phil. 997).
As early as 1913, this Court with Justice Moreland
as ponente announced:
The Act contains, as is seen, no express words
giving it a retrospective or retroactive effect, nor
is there anything found therein which indicates
an intention to give it such an effect. Its effect is,
rather, by clear intendment, prospective.
It is a rule of statutory construction that all
statutes are to construed as having only a
prospective operation unless the purpose and
intention of the Legislature to give them a
retrospective effect is expressly declared or is
necessarily implied from the language used. In
every case of doubt, the doubt must be solved
against the retrospective effect. The cases

supporting this rule are almost without number. .

..
xxx xxx xxx
The doctrine of non-retroactivity was reiterated in the
case of Segovia v. Noel (47 Phil. 543.). Thus
A sound canon of statutory construction is that a
statute operates prospectively only and never
retroactively, unless the legislative intent to the
contrary is made manifest either by the express
terms of the statute or by necessary implication.
Following the lead of the United States
Supreme Court and putting the rule more
strongly, a statute ought not to receive a
construction making it act retroactively, unless
the words used are so clear, strong, and
imperative that no other meaning can annexed
to them, or unless the intention of the legislature
cannot be otherwise satisfied. No court will hold
a statute to be retroactive when the legislature
has not said so. . . . (Farrel v. Pingree (1888), 5
Utah, 443; 16 Pac., 843; Greer v. City of
Asheville [1894], 114 N.C., 495; United States
Fidelity & Guaranty Co. v. Struthers Wells Co.
[1907], 209 U.S., 306)
xxx xxx xxx
Our decision to deny retroactive effect to the
amendatory provision gains added strength from later
developments.
Under the 1973 Constitution, it is even more
emphasized that property ownership is impressed with

63
a social function. This means that the owner has the
obligation to use his property not only to benefit himself
but society as well. Hence, the Constitution provides
under Section 6 of Article II that in the promotion of
social justice, the State "shall regulate the acquisition,
ownership, use, enjoyment, and disposition of private
property, and equitably diffuse property ownership and
profits." The Constitution also ensures that the worker
shall have a just and living wage which should assure
for himself and his family an existence worthy of human
dignity and give him opportunities for a better life
(Sections 7 and 9, Article II) (Alfanta vs. Noe, 53 SCRA
76; Almeda vs. Court of Appeals, 78 SCRA 194).
In line with the above mandates, this Court upheld the
constitutionality of Presidential Decree No. 27, which
decrees the emancipation of tenants from the bondage
of the soil and transferred to them the ownership of the
land they till, in Gonzales v. Estrella (91 SCRA 294).
We noted the imperative need for such a decree
in Chavez v. Zobel (55 SCRA 26). We held in the latter
case that "on this vital policy question, one of the
utmost concern, the need for what for some is a radical
solution in its pristine sense, one that goes at the root,
was apparent. Presidential Decree No. 27 was thus
conceived. . . . There is no doubt then, as set forth
expressly therein, that the goal is emancipation. What
is more, the decree is now part and parcel of the law of
the land according to the present Constitution.
Significantly, P.D. No. 27, which decrees the
emancipation of the tenant from the bondage of the
soil, transfers to him the ownership of the land he tills,
and provides instruments and mechanisms therefor,
has (sic) recognized personal cultivation as a ground
for retention and, therefore, exemption from the land

transfer decree. Personal cultivation cannot be effected

unless the tenant gives up the land to the owner.
Presidential Decree No. 27 provides:
In all cases, the landowner may retain an area
of not more than seven (7) hectares if such
landowner is cultivating such area or will now
cultivate it.
The redistribution of land, restructuring of property
ownership, democratization of political power, and
implementation of social justice do not require that a
landowner should be deprived of everything he owns
and that even small parcels as in these two cases now
before us may not be worked by the owner himself.
The evil sought to be remedied by agrarian reform is
the ancient anachronism where one person owns the
land while another works on it. The evil is not present in
cases of personal cultivation by the owner.
Taking over by the landowner is subject to strict
requirements. In addition to proof of ownership
and the required notices to the tenant, the
bona-fide intention to cultivate must be proved
to the satisfaction of the court. And as earlier
stated, the tenant is protected in case the owner
fails to cultivate the land within one year or to
work the land himself for three years.
The seven hectares retention under P.D. No. 27
is applicable only to landowners who do not
own other agricultural lands containing an
aggregate of more than seven hectares or lands
used for residential, commercial, industrial, or
other urban purposes where they derive

64
adequate income to support themselves and
their families. (Letter of Instruction No. 472
dated October 21, 1976).
The subsequent cases of Diga vs. Adriano, et
al. 13 and Gallardo vs. Borromeo 14 reiterated the rule We laid
in the Niloand Castro cases.
WHEREFORE, for want of merit, the instant petition is hereby
DISMISSED.
No pronouncement as to costs.
IT IS SO ORDERED.
Gutierrez, Jr., Feliciano, Bidin and Romero, JJ., concur.

SECOND DIVISION
[G.R. No. 104215. May 8, 1996]

ERECTORS, INC., petitioner, vs. NATIONAL LABOR

RELATIONS COMMISSION, HON. JULIO ANDRES,
JR. and FLORENCIO BURGOS, respondents.
SYLLABUS
1. REMEDIAL LAW; JURISDICTION; JURISDICTION OVER
THE SUBJECT MATTER, DETERMINED BY LAW IN
FORCE AT THE COMMENCEMENT OF ACTION;
LABOR ARBITER HAS JURISDICTION OVER MONEY
CLAIMS OF OVERSEAS WORKER FILED ON MARCH
31, 1982. - The rule is that jurisdiction over the subject
matter is determined by the law in force at the time of the
commencement of the action. On March 31, 1982, at the
time private respondent filed his complaint against the
petitioner, the prevailing laws were Presidential Decree
No. 1691 and Presidential Decree No. 1391 which vested
the Regional Offices of the Ministry of Labor and the
Labor Arbiters with "original and exclusive jurisdiction over
all cases involving employer-employee relations including
money claims arising out of any law or contracts involving
Filipino workers for overseas employment." At the time of
the filing of the complaint, the Labor Arbiter had clear
jurisdiction over the same.
2. LABOR AND SOCIAL LEGISLATION; EXECUTIVE
ORDER NO. 797 CREATING THE PHILIPPINE
OVERSEAS EMPLOYMENT ADMINISTRATION (POEA);
WITHOUT RETROACTIVE APPLICATION; LABOR
ARBITER NOT DIVESTED OF JURISDICTION BY
EFFECTIVITY OF E.O. 797. - E.O. No. 797 did not divest
the Labor Arbiter's authority to hear and decide the case
filed by private respondent prior to its effectivity. Laws
should only be applied prospectively unless the legislative
intent to give them retroactive effect is expressly declared
or is necessarily implied from the language used. We fail
to perceive in the language of E.O. No. 797 an intention to
give it retroactive effect. The law at bar, E.O. No. 797, is

65
not a curative statute. It was not intended to remedy any
defect in the law. It created the POEA to assume the
functions of the Overseas Employment Development
Board, the National Seamen Board and the overseas
employment functions of the Bureau of Employment
Services. Accordingly, it gave the POEA "original and
exclusive jurisdiction over all cases, including money
claims, involving employer-employee relations arising out
of or by virtue of any law or contract involving Filipino
workers for overseas employment, including seamen."
The rule on prospectivity of laws should therefore apply to
E.O. No. 797. It should not affect jurisdiction over cases
filed prior to its effectivity.
3. STATUTORY CONSTRUCTION; STATUTES; CURATIVE
STATUTE; DEFINED. - A curative statute is enacted to
cure defects in a prior law or to validate legal proceedings,
instruments or acts of public authorities which would
otherwise be void for want of conformity with certain
existing legal requirements.
APPEARANCES OF COUNSEL
Bengzon, Zarraga, Narciso, Ardala, Pecson, Bengzon,
and Jimenez for petitioner.
Fabian Gappi for private respondent.
DECISION
PUNO, J.:
Petitioner Erectors, Inc. challenges the jurisdiction of
respondent Labor Arbiter Julio F. Andres, Jr. to hear and
decide the complaint[1] for underpayment of wages and nonpayment of overtime pay filed by private respondent Florencio
Burgos, an overseas contract worker.
The facts are undisputed:

In September 1979, petitioner recruited private

respondent to work as service contract driver in Saudi Arabia
for a period of twelve (12) months with a salary of US$165.00
and an allowance of US$165.00 per month. They further
agreed that private respondent shall be entitled to a bonus of
US$ 1,000.00 if after the 12-month period, he renews or
extends his employment contract without availing of his
vacation or home leave. Their contract dated September 20,
1979, was duly approved by the Ministry of Labor and
Employment.
The aforesaid contract was not implemented. In
December, 1979, petitioner notified private respondent that the
position of service driver was no longer available. On
December 14, 1979, they executed another contract which
changed the position of private respondent into that of
helper/laborer with a salary of US$105.00 and an allowance of
US$105.00 per month. The second contract was not submitted
to the Ministry of Labor and Employment for approval.
On December 18, 1979, private respondent left the
country and worked at petitioner's Buraidah Sports Complex
project in Saudi Arabia, performing the job of a
helper/laborer. He received a monthly salary and allowance of
US$210.00, in accordance with the second contract. Private
respondent renewed his contract of employment after one
year. His salary and allowance were increased to US$231.00.
Private respondent returned to the Philippines on August
24, 1981. He then invoked his first employment contract. He
demanded from the petitioner the difference between his
salary and allowance as indicated in the said contract, and the
amount actually paid to him, plus the contractual bonus which
should have been awarded to him for not availing of his
vacation or home leave credits. Petitioner denied private
respondent's claim.

66
On March 31, 1982, private respondent filed with the
Labor Arbiter a complaint against the petitioner for
underpayment of wages and non-payment of overtime pay and
contractual bonus.
On May 1, 1982, while the case was still in the conciliation
stage, Executive Order (E.O.) No. 797 creating the Philippine
Overseas
Employment
Administration
(POEA)
took
effect. Section 4(a) of E.O. No. 797 vested the POEA with
"original and exclusive jurisdiction over all cases, including
money claims, involving employer-employee relations arising
out of or by virtue of any law or contract involving Filipino
workers for overseas employment.[2]
Despite E.O. No. 797, respondent Labor Arbiter
proceeded to try the case on the merits. On September 23,
1983, he rendered a Decision[3] in favor of private respondent,
the dispositive portion of which reads:
"WHEREFORE,judgmentisherebyrenderedorderingthe
respondenttopaythecomplainantasfollows:
1.ThesumofUS$2,496.00initspesoequivalentonAugust25,
1981asdifferencebetweenhisallowanceasServiceDriveras
againsthispositionasHelper/Laborer;
2.ThesumofUS$1,000.00initspesoequivalentasofthesame
date,ashiscontractualbonus.
Thecomplaintsfornonpayment/underpaymentofovertimepayand
unpaidwagesorcommissionareDISMISSEDforlackofmerit. [4]
Petitioner appealed to respondent National Labor
Relations Commission (NLRC). It questioned the jurisdiction of
the Labor Arbiter over the case in view of the enactment of
E.O. No. 797.

In a Resolution dated July 17, 1991, [5] respondent NLRC

dismissed the petitioner's appeal and upheld the Labor
Arbiter's jurisdiction. It ruled:
"Tobeginwith,theLaborArbiterhastheauthoritytodecidethis
case.OnMay29,1978,theLaborArbiterswereintegratedintothe
RegionalOfficesunderP.D.1391.OnMay1,1980,P.D.1691was
promulgatedgivingtheRegionalOfficesoftheMinistryofLabor
andEmploymenttheoriginalandexclusivejurisdictionoverall
casesarisingoutoforbyvirtueofanylaworcontractinvolving
Filipinoworkersforoverseasemployment.Thereisnodisputethat
theLaborArbiterhadthelegalauthorityoverthecaseonhand,
whichaccruedandwasfiledwhenthetwoabovementioned
PresidentialDecreeswereinforce. [6]
Petitioner
filed
this
special
for certiorari reiterating the argument that:

civil

action

"TheNLRCcommittedgraveabuseofdiscretiontantamounttolack
ofjurisdictioninaffirmingtheLaborArbiter'svoidjudgmentinthe
caseaquo."[7]
It asserts that E.O. No. 797 divested the Labor Arbiter of
his authority to try and resolve cases arising from overseas
employment contract. Invoking this Court's ruling in Briad Agro
Developinent Corp. vs. Dela Cerna,[8] petitioner argues that
E.O. No. 797 applies retroactively to affect pending cases,
including the complaint filed by private respondent.
The petition is devoid of merit.
The rule is that jurisdiction over the subject matter is
determined by the law in force at the time of the
commencement of the action.[9] On March 31, 1982, at the time
private respondent filed his complaint against the petitioner,
the prevailing laws were Presidential Decree No. 1691 [10] and

67
Presidential Decree No. 1391[11] which vested the Regional
Offices of the Ministry of Labor and the Labor Arbiters with
"original and exclusive jurisdiction over all cases involving
employer-employee relations including money claims arising
out of any law or contracts involving Filipino workers for
overseas employment."[12] At the time of the filing of the
complaint, the Labor Arbiter had clear jurisdiction over the
same.
E.O. No. 797 did not divest the Labor Arbiter's authority to
hear and decide the case filed by private respondent prior to
its effectivity. Laws should only be applied prospectively unless
the legislative intent to give them retroactive effect is expressly
declared or is necessarily implied from the language used.
[13]
We fail to perceive in the language of E.O. No. 797 an
intention to give it retroactive effect.
The case of Briad Agro Development Corp. vs. Dela
Cerna[14] cited by the petitioner is not applicable to the case at
bar. In Briad, the Court applied the exception rather than the
general rule. In this case, Briad Agro Development Corp. and
L.M. Camus Engineering Corp. challenged the jurisdiction of
the Regional Director of the Department of Labor and
Employment over cases involving workers' money claims,
since Article 217 of the Labor Code, the law in force at the time
of the filing of the complaint, vested in the Labor Arbiters
exclusive jurisdiction over such cases. The Court dismissed
the petition in its Decision dated June 29, 1989.[15] It ruled that
the enactment of E.O. No. 111, amending Article 217 of the
Labor Code, cured the Regional Director's lack of jurisdiction
by giving the Labor Arbiter and the Regional Director
concurrent jurisdiction over all cases involving money
claims. However, on November 9,1989, the Court, in a
Resolution,[16] reconsidered and set aside its June 29 Decision
and referred the case to the Labor Arbiter for proper
proceedings, in view of the promulgation of Republic Act (R.A.)
6715 which divested the Regional Directors of the power to

hear money claims. It bears emphasis that the Court accorded

E.O. No. 111 and R.A. 6715 a retroactive application because
as curative statutes, they fall under the exceptions to the rule
on prospectivity of laws.
E.O. No.111, amended Article 217 of the Labor Code to
widen the workers' access to the government for redress of
grievances by giving the Regional Directors and Labor Arbiters
concurrent jurisdiction over cases involving money claims. This
amendment, however, created a situation where the
jurisdiction of the Regional Directors and the Labor Arbiters
overlapped. As a remedy, R.A. 6715 further amended Article
217 by delineating their respective jurisdictions. Under R.A.
6715, the Regional Director has exclusive original jurisdiction
over cases involving money claims provided: (1) the claim is
presented by an employer or person employed in domestic or
household service, or househelper under the Code; (2) the
claimant, no longer being employed, does not seek
reinstatement; and (3) the aggregate money claim of the
employee or househelper does not exceed P5,000.00. All
other cases are within the exclusive and original jurisdiction of
the Labor Arbiter. E.O. No. 111 and R.A. 6715 are therefore
curative statutes. A curative statute is enacted to cure defects
in a prior law or to validate legal proceedings, instruments or
acts of public authorities which would otherwise be void for
want of conformity with certain existing legal requirements.
The law at bar, E.O. No. 797, is not a curative statute. It
was not intended to remedy any defect in the law. It created
the POEA to assume the functions of the Overseas
Employment Development Board, the National Seamen Board
and the overseas employment functions of the Bureau of
Employment Services. Accordingly, it gave the POEA "original
and exclusive jurisdiction over all cases, including money
claims, involving employer-employee relations arising out of or
by virtue of any law or contract involving Filipino workers for
overseas employment, including seamen."[17] The rule on

68
prospectivity of laws should therefore apply to E.O. No. 797. It
should not affect jurisdiction over cases filed prior to its
effectivity.
Our ruling in Philippine-Singapore Ports Corp. vs.
NLRC[18] is more apt to the case at bar. In this case, PSPC
hired Jardin to work in Saudi Arabia. Jardin filed a complaint
against PSPC for illegal dismissal and recovery of backwages
on January 31, 1979 with the Labor Arbiter. PSPC questioned
the jurisdiction of the Labor Arbiter because at that time, the
power to hear and decide cases involving overseas workers
was vested in the Bureau of Employment Services. We held:
"WhenJardinfiledthecomplaintforillegaldismissalonJanuary31,
1979,Art.217(5)oftheLaborCodeprovidedthatLaborArbiters
andtheNLRCshallhaveexclusivejurisdictiontohearanddecideall
casesarisingfromemployeremployeerelationsunlessexpressly
excludedbythisCode.AtthattimeArt.15ofthesameCodehad
beenamendedbyP.D.No.1412whichtookeffectonJune9,
1978.Thepertinentprovisionofthesaidpresidentialdecreestates:
Article15.BureauofEmploymentServices.
(a)xxxxxxxxx
(b)TheBureaushallhavetheoriginalandexclusivejurisdictionover
allmattersorcasesinvolvingemployeremployeerelationsincluding
moneyclaims,arisingoutoforbyvirtueofanylaworcontracts
involvingFilipinoworkersforoverseasemployment,except
seamen.ThedecisionsoftheBureaushallbefinalandexecutory
subjecttoappealtotheSecretaryofLaborwhosedecisionshallbe
finalandinappealable.
ConsideringthatprivaterespondentJardin'sclaimsundeniablyarose
outofanemployeremployeerelationshipwithpetitionerPSPCand

thatprivaterespondentworkedoverseasorinSaudiArabia,the
BureauofEmploymentServicesandnottheLaborArbiterhad
jurisdictionoverthecase.xxx
Art.15wasfurtheramendedbyP.D.No.1691whichtookeffecton
May1,1990.Suchamendmentqualifiesthejurisdictionofthe
BureauofEmploymentServicesasfollows:
(b)TheregionalofficesoftheMinistryofLaborshallhavethe
originalandexclusivejurisdictionoverallmattersorcasesinvolving
employeremployeerelationsincludingmoneyclaims,arisingoutof
orbyvirtueofanylaworcontractsinvolvingFilipinoworkersfor
overseasemploymentexceptseamen:ProvidedthattheBureauof
EmploymentServicesmay,inthecaseoftheNationalCapital
Region,exercisesuchpower,whenevertheMinisterofLabordeems
itappropriate.ThedecisionsoftheregionalofficesortheBureauof
EmploymentServicesifsoauthorizedbytheMinisterofLaboras
providedinthisArticle,shallbeappealabletotheNationalLabor
RelationsCommissionuponthesamegroundsprovidedinArticle
223hereof.ThedecisionsoftheNationalLaborRelations
Commissionshallbefinalandinappealable.
Hence,asfurtheramended,Art.15providedforconcurrent
jurisdictionbetweentheregionalofficesofthethenMinistryof
LaborandBureauofEmploymentServicesintheNationalCapital
Region.ItisnoteworthythatP.D.No.1691,whilelikewise
amendingArt.217oftheLaborCode,didnotaltertheprovisionthat
LaborArbitersshallhavejurisdictionoverallclaimsarisingfrom
employeremployeerelationsunlessexpresslyexcludedbythis
Code.
The functions of the Bureau of Employment Services
were subsequently assumed by the Philippine Overseas
Employment Administration (POEA) on May 1, 1982 by
virtue of Executive Order No. 797 by granting the POEA

69
original and exclusive jurisdiction over all cases,
including money claims, involving employer-employee
relations arising out of or by virtue of any law or contract
involving Filipino workers for overseas employment,
including seamen. (Sec. 4 (a); Eastern Shipping Lines v.
Philippine Overseas Employment Administration [POEA], 200
SCRA 663 [1991]). This development showed the legislative
authority's continuing intent toexclude from the Labor Arbiter's
jurisdiction claims arising from overseas employment.
These amendments notwithstanding, when the
complaint for illegal dismissal was filed on January 31,
1979, under Art. 15, as amended by P.D. No. 1412, it was
the Bureau of Employment Services which had
jurisdiction over the case and not the Labor Arbiters. It is
a settled rule that jurisdiction is determined by the statute
in force at the time of the commencement of the
action (Municipality of Sogod v. Rosal, 201 SCRA 632, 637
[1991]). P.D. 1691 which gave the regional offices of the
Ministry of Labor concurrent jurisdiction with the Bureau of
Employment Services, was promulgated more than a year
after the complaint was filed. (Italics supplied)
In sum, we hold that respondent NLRC did not commit
grave abuse of discretion in upholding the jurisdiction of
respondent Labor Arbiter over the complaint filed by private
respondent against the petitioner.
IN VIEW WHEREOF, the Petition is DISMISSED. Costs
against petitioner.
SO ORDERED.
Regalado (Chairman), Romero, Mendoza, and Torres, Jr.,
JJ., concur.

[1]

Docketed as NLRC-NCR-3-3142-82.

[2]

Official Gazette, Vol. 78, No. 21, May 24, 1982, pp. 2368-7 2638-13.
[3]

Rollo, pp. 13-23.

[4]

Rollo, p. 23.

[5]

Rollo, pp. 26-30.

[6]

Rollo, p. 28.

[7]

Rollo, p. 7.

[8]

179 SCRA 269, November 9, 1989.

[9]

Tiongson vs. Court of Appeals, 214 SCRA 197 (1992).

[10]

Took effect on May 1, 1980.

[11]

Took effect on May 29, 1978.

[12]

Article 15 (b) of the Labor Code, as amended by P.D. 1691

and P.D. 1391.
[13]

Article 4, New Civil Code; Gailardo vs. Borromeo, 161

SCRA 500 (1988); Nilo vs. Court of Appeals, 128 SCRA 519
(1984).
[14]

179 SCRA 269 (November 9, 1989).

[15]

174 SCRA 525.

[16]

179 SCRA 269.

[17]

Section 4 of Executive Order No. 797.

[18]

218 SCRA 77 (1993).

70
EN BANC

G.R. No. 100776 October 28, 1993

ALBINO S. CO, petitioner,
vs.
COURT OF APPEALS and PEOPLE OF THE
PHILIPPINES, respondents.
Antonio P. Barredo for petitioner.
The Solicitor General for the people.

NARVASA, C.J.:
In connection with an agreement to salvage and refloat a
sunken vessel and in payment of his share of the expenses
of the salvage operations therein stipulated petitioner Albino
Co delivered to the salvaging firm on September 1, 1983 a
check drawn against the Associated Citizens' Bank, postdated
November 30, 1983 in the sum of P361,528.00. 1 The check
was deposited on January 3, 1984. It was dishonored two
days later, the tersely-stated reason given by the bank being:
"CLOSED ACCOUNT."
A criminal complaint for violation of Batas Pambansa Bilang
22 2 was filed by the salvage company against Albino Co with
the Regional Trial Court of Pasay City. The case eventuated in
Co's conviction of the crime charged, and his being sentenced
to suffer a term of imprisonment of sixty (60) days and to
indemnify the salvage company in the sum of P361,528.00.

71
Co appealed to the Court of Appeals. There he sought
exoneration upon the theory that it was reversible error for the
Regional Trial Court to have relied, as basis for its verdict of
conviction, on the ruling rendered on September 21, 1987 by
this Court in Que v. People, 154 SCRA 160 (1987) 3 i.e.,
that a check issued merely to guarantee the performance of an
obligation is nevertheless covered by B.P. Blg. 22. This was
because at the time of the issuance of the check
on September 1, 1983, some four (4) years prior to the
promulgation of the judgment in Que v. People on September
21, 1987, the delivery of a "rubber" or "bouncing" check as
guarantee for an obligation was not considered a punishable
offense, an official pronouncement made in a Circular of the
Ministry of Justice. That Circular (No. 4), dated December 15,
1981, pertinently provided as follows:
2.3.4. Where issuance of bouncing check is
neither estafa nor violation of B.P. Blg. 22.
Where the check is issued as part of an
arrangement to guarantee or secure the
payment of an obligation, whether pre-existing
or not, the drawer is not criminally liable for
either estafa or violation of B.P. Blg. 22 (Res.
No. 438, s. 1981, Virginia Montano vs. Josefino
Galvez, June 19, 1981; Res. No. 707, s. 1989;
Alice Quizon vs. Lydia Calingo, October 23,
1981, Res. No. 769, s. 1981, Alfredo Guido vs.
Miguel A. Mateo, et. al., November 17, 1981;
Res. No. 589, s. 1981, Zenaida Lazaro vs.
Maria Aquino, August 7, 1981).
This administrative circular was subsequently reversed by
another issued on August 8, 1984 (Ministry Circular No. 12)
almost one (1) year after Albino Co had delivered the
"bouncing" check to the complainant on September 1, 1983.

Said Circular No. 12, after observing inter alia that Circular No.
4 of December 15, 1981 appeared to have been based on "a
misapplication of the deliberation in the Batasang Pambansa, .
. . (or) the explanatory note on the original bill, i.e. that the
intention was not to penalize the issuance of a check to secure
or guarantee the payment of an obligation," as follows: 4
Henceforth, conforming with the rule that an
administrative agency having interpreting
authority may reverse its administration
interpretation of a statute, but that its review
interpretation applies only prospectively
(Waterbury Savings Bank vs. Danaher, 128
Conn., 476; 20 a2d 455 (1941), in all cases
involving violation of Batas Pambansa Blg.
22 where the check in question is issued after
this date, the claim that the check is issued as a
guarantee or part of an arrangement to secure
an obligation collection will no longer be
considered a valid defense.
Co's theory was rejected by the Court of Appeals which
affirmed his conviction. Citing Senarillos v. Hermosisima, 101
Phil. 561, the Appellate Court opined that the Que doctrine did
not amount to the passage of new law but was merely a
construction or interpretation of a pre-existing one, i.e., BP 22,
enacted on April 3, 1979.
From this adverse judgment of the Court of Appeals, Albino Co
appealed to this Court on certiorari under Rule 45 of the Rules
of Court. By Resolution dated September 9, 1991, the Court
dismissed his appeal. Co moved for reconsideration under
date of October 2, 1991. The Court required comment thereon
by the Office of the Solicitor General. The latter complied and,
in its comment dated December 13, 1991, extensively argued
against the merits of Albino Co's theory on appeal, which was

72
substantially that proffered by him in the Court of Appeals. To
this comment, Albino Co filed a reply dated February 14, 1992.
After deliberating on the parties' arguments and contentions,
the Court resolved, in the interests of justice, to reinstate
Albino Co's appeal and adjudicate the same on its merits.
Judicial decisions applying or interpreting the
laws or the Constitution shall form a part of the
legal system of the Philippines," according to
Article 8 of the Civil Code. "Laws shall have no
retroactive effect, unless the contrary is
provided," declares Article 4 of the same Code,
a declaration that is echoed by Article 22 of the
Revised Penal Code: "Penal laws shall have, a
retroactive effect insofar as they favor the
person guilty of a felony, who is not a habitual
criminal . . . 5
The principle of prospectivity of statutes, original or
amendatory, has been applied in many cases. These include:
Buyco v. PNB, 961 2 SCRA 682 (June 30, 1961), holding that
Republic Act No. 1576 which divested the Philippine National
Bank of authority to accept back pay certificates in payment of
loans, does not apply to an offer of payment made before
effectivity of the act; Largado v. Masaganda, et al., 5 SCRA
522 (June 30, 1962), ruling that RA 2613, s amended by RA
3090 on June, 1961, granting to inferior courts jurisdiction over
guardianship cases, could not be given retroactive effect, in
the absence of a saving clause; Larga v. Ranada, Jr., 64
SCRA 18, to the effect that Sections 9 and 10 of Executive
Order No. 90, amending Section 4 of PD 1752, could have no
retroactive application; People v. Que Po Lay, 94 Phil. 640,
holding that a person cannot be convicted of violating Circular
No. 20 of the Central, when the alleged violation occurred
before publication of the Circular in the Official Gazette;
Baltazar v. C.A., 104 SCRA 619, denying retroactive

application to P.D. No. 27 decreeing the emancipation of

tenants from the bondage of the soil, and P.D. No. 316
prohibiting ejectment of tenants from rice and corn farm
holdings, pending the promulgation of rules and regulations
implementing P.D. No. 27; Nilo v. Court of Appeals, 128 SCRA
519, adjudging that RA 6389 which removed "personal
cultivation" as a ground for the ejectment of a tenant cannot be
given retroactive effect in the absence of a statutory statement
for retroactivity; Tac-An v. CA, 129 SCRA 319, ruling that the
repeal of the old Administrative Code by RA 4252 could not be
accorded retroactive effect; Ballardo v. Borromeo, 161 SCRA
500, holding that RA 6389 should have only prospective
application; (see also Bonifacio v. Dizon, 177 SCRA 294 and
Balatbat v. CA, 205 SCRA 419).
The prospectivity principle has also been made to apply to
administrative rulings and circulars, to wit: ABS-CBN
Broadcasting Corporation v. CTA, Oct. 12, 1981, 108 SCRA
142, holding that a circular or ruling of the Commissioner of
Internal Revenue may not be given retroactive effect adversely
to a taxpayer: Sanchez v. COMELEC, 193 SCRA 317, ruling
that Resolution No. 90-0590 of the Commission on Elections,
which directed the holding of recall proceedings, had no
retroactive application; Romualdez v. CSC, 197 SCRA 168,
where it was ruled that CSC Memorandum Circular No. 29, s.
1989 cannot be given retrospective effect so as to entitle to
permanent appointment an employee whose temporary
appointment had expired before the Circular was issued.
The principle of prospectivity has also been applied to judicial
decisions which, "although in themselves not laws, are
nevertheless evidence of what the laws mean, . . . (this being)
the reason why under Article 8 of the New Civil Code, 'Judicial
decisions applying or interpreting the laws or the Constitution
shall form a part of the legal system . . .'"

73
So did this Court hold, for example, in Peo. v. Jabinal, 55
SCRA 607, 611:
It will be noted that when appellant was appointed
Secret Agent by the Provincial Government in 1962,
and Confidential Agent by the Provincial commander in
1964, the prevailing doctrine on the matter was that laid
down by Us in People v. Macarandang (1959)
and People v. Lucero (1958). 6 Our decision in People
v. Mapa, 7 reversing the aforesaid doctrine, came only
in 1967. The sole question in this appeal is: should
appellant be acquitted on the basis of Our rulings
in Macarandang and Lucero, or should his conviction
stand in view of the complete reverse of the
Macarandang and Lucero doctrine in Mapa? . . .
Decisions of this Court, although in themselves not
laws, are nevertheless evidence of what the laws
mean, and this is the reason why under Article 8 of the
New Civil Code, "Judicial decisions applying or
interpreting the laws or the Constitution shall form a
part of the legal system . . ."The interpretation upon a
law by this Court constitutes, in a way, a part of the law
as of the date that law was originally passed, since this
Court's construction merely establishes the
contemporaneous legislative intent that the law thus
construed intends to effectuate. The settled rule
supported by numerous authorities is a restatement of
the legal maxim "legis interpretation legis vim
obtinet" the interpretation placed upon the written
law by a competent court has the force of law. The
doctrine laid down in Lucero and Macarandang was
part of the jurisprudence, hence, of the law, of the land,
at the time appellant was found in possession of the
firearm in question and where he was arraigned by the
trial court. It is true that the doctrine was overruled in

the Mapa case in 1967, but when a doctrine of this

Court is overruled and a different view is adopted, the
new doctrine should be applied prospectively, and
should not apply to parties who had relied on, the old
doctrine and acted on the faith thereof. This is
especially true in the construction and application of
criminal laws, where it is necessary that the
punishment of an act be reasonably foreseen for the
guidance of society.
So, too, did the Court rule in Spouses Gauvain and Bernardita
Benzonan v. Court of Appeals, et al. (G.R. No. 97973)
and Development Bank of the Philippines v. Court of Appeals,
et al (G.R. No 97998), Jan. 27, 1992, 205 SCRA 515, 527528: 8
We sustain the petitioners' position, It is undisputed
that the subject lot was mortgaged to DBP on February
24, 1970. It was acquired by DBP as the highest bidder
at a foreclosure sale on June 18, 1977, and then sold
to the petitioners on September 29, 1979.
At that time, the prevailing jurisprudence interpreting
section 119 of R.A. 141 as amended was that
enunciated in Monge and Tupas cited above. The
petitioners Benzonan and respondent Pe and the DBP
are bound by these decisions for pursuant to Article 8
of the Civil Code "judicial decisions applying or
interpreting the laws or the Constitution shall form a
part of the legal system of the Philippines." But while
our decisions form part of the law of the land, they are
also subject to Article 4 of the Civil Code which
provides that "laws shall have no retroactive effect
unless the contrary is provided." This is expressed in
the familiar legal maxim lex prospicit, non respicit, the
law looks forward not backward. The rationale against

74
retroactivity is easy to perceive. The retroactive
application of a law usually divests rights that have
already become vested or impairs the obligations of
contract and hence, is unconstitutional (Francisco vs.
Certeza, 3 SCRA 565 [1061]).
The same consideration underlies our rulings
giving only prospective effect to decisions
enunciating new doctrines. Thus, we
emphasized in People v. Jabinal, 55 SCRA 607
[1974]" . . . when a doctrine of this Court is
overruled and a different view is adopted, the
new doctrine should be applied prospectively
and should not apply to parties who had relied
on the old doctrine and acted on the faith
thereof.
A compelling rationalization of the prospectivity principle of
judicial decisions is well set forth in the oft-cited case ofChicot
County Drainage Dist. v. Baxter States Bank, 308 US 371, 374
[1940]. The Chicot doctrine advocates the imperative necessity
to take account of the actual existence of a statute prior to its
nullification, as an operative fact negating acceptance of "a
principle of absolute retroactive invalidity.
Thus, in this Court's decision in Taada
v. Tuvera, 9 promulgated on April 24, 1985 which declared
"that presidential issuances of general application, which have
not been published, shall have no force and effect," and as
regards which declaration some members of the Court
appeared "quite apprehensive about the possible unsettling
effect . . . (the) decision might have on acts done in reliance on
the validity of these presidential decrees . . ." the Court
said:

. . . . The answer is all too familiar. In similar situation is

in the past this Court, had taken the pragmatic and
realistic course set forth in Chicot County Drainage
District vs. Baxter Bank (308 U.S. 371, 374) to wit:
The courts below have proceeded on the theory that
the Act of Congress, having found to be
unconstitutional, was not a law; that it was inoperative,
conferring no rights and imposing no duties, and hence
affording no basis for the challenged decree. Norton vs.
Shelby County, 118 US 425, 442; Chicago, I. & L. Ry.
Co. v. Hackett, 228 U. S. 559, 566. It is quite clear,
however, that such broad statements as to the effect of
a determination of unconstitutionality must be taken
with qualifications. The actual existence of a statute,
prior to such a determination, is an operative fact and
may have consequences which cannot justly be
ignored. The past cannot always be erased by a new
judicial declaration. The effect of the subsequent ruling
as to invalidity may have to be considered in various
aspects with respect to particular conduct, private
and official. Questions of rights claimed to have
become vested, of status, of prior determinations
deemed to have finality and acted upon accordingly, of
public policy in the light of the nature both of the statute
and of its previous application, demand examination.
These questions are among the most difficult of those
who have engaged the attention of courts, state and
federal, and it is manifest from numerous decisions that
an all-inclusive statement of a principle of absolute
retroactive invalidity cannot be justified.
Much earlier, in De Agbayani v. PNB, 38 SCRA 429
concerning the effects of the invalidation of "Republic Act No.
342, the moratorium legislation, which continued Executive
Order No. 32, issued by the then President Osmea,

75
suspending the enforcement of payment of all debts and other
monetary obligations payable by war sufferers," and which had
been "explicitly held in Rutter v. Esteban (93 Phil. 68 [1953] 10 .
. . (to be) in 1953 'unreasonable and oppressive, and should
not be prolonged a minute longer . . ." the Court made
substantially the same observations, to wit:11
. . . . The decision now on appeal reflects the orthodox
view that an unconstitutional act, for that matter an
executive order or a municipal ordinance likewise
suffering from that infirmity, cannot be the source of
any legal rights or duties. Nor can it justify any official
act taken under it. Its repugnancy to the fundamental
law once judicially declared results in its being to all
intents and purposes amere scrap of paper. . . . It is
understandable why it should be so, the Constitution
being supreme and paramount. Any legislative or
executive act contrary to its terms cannot survive.
Such a view has support in logic and possesses the
merit of simplicity. lt may not however be sufficiently
realistic. It does not admit of doubt that prior to the
declaration of nullity such challenged legislative or
executive act must have been in force and had to be
compiled with. This is so as until after the judiciary, in
an appropriate case, declares its invalidity,, it is entitled
to obedience and respect. Parties may have acted
under it and may have changed their positions, what
could be more fitting than that in a subsequent litigation
regard be had to what has been done while such
legislative or executive act was in operation and
presumed to be valid in all respects. It is now accepted
as a doctrine that prior to its being nullified, its
existence is a fact must be reckoned with. This is
merely to reflect awareness that precisely because the
judiciary is the governmental organ which has the final

say on whether or not a legislative or executive

measure is valid, a, period of time may have elapsed
before it can exercise the power of judicial review that
may lead to a declaration of nullity. It would be to
deprive the law of its quality of fairness and justice
then, if there be no recognition of what had transpired
prior to such adjudication.
In the language of an American Supreme Court
decision: 'The actual existence of a statute, prior to
such a determination [of unconstitutionality], is an
operative fact and may have consequences which
cannot justly be ignored. The past cannot always be
erased by a new judicial declaration. The effect of the
subsequent ruling as to invalidity may have to be
considered in various aspects, with respect to
particular relations, individual and corporate, and
particular conduct, private and official (Chicot County
Drainage Dist. v. Baxter States Bank, 308 US 371, 374
[1940]). This language has been quoted with approval
in a resolution in Araneta v. Hill (93 Phil. 1002 [1953])
and the decision in Manila Motor Co. Inc. v. Flores (99
Phil. 738 [1956]). An even more recent instance is the
opinion of Justice Zaldivar speaking for the Court in
Fernandez v. Cuerva and Co. (L-21114, Nov. 28, 1967,
21 SCRA 1095).
Again, treating of the effect that should be given to its decision
in Olaguer v. Military Commission No 34, 12 declaring invalid
criminal proceedings conducted during the martial law regime
against civilians, which had resulted in the conviction and
incarceration of numerous persons this Court, in Tan
vs. Barrios, 190 SCRA 686, at p. 700, ruled as follows:
In the interest of justice and consistently, we hold that
Olaguer should, in principle, be applied prospectively

76
only to future cases and cases still ongoing or not yet
final when that decision was promulgated. Hence, there
should be no retroactive nullification of final judgments,
whether of conviction or acquittal, rendered by military
courts against civilians before the promulgation of the
Olaguer decision. Such final sentences should not be
disturbed by the State. Only in particular cases where
the convicted person or the State shows that there was
serious denial of constitutional rights of the accused,
should the nullity of the sentence be declared and a
retrial be ordered based on the violation of the
constitutional rights of the accused and not on the
Olaguer doctrine. If a retrial is no longer possible, the
accused should be released since judgment against
him is null on account of the violation of his
constitutional rights and denial of due process.
xxx xxx xxx
The trial of thousands of civilians for common crimes
before the military tribunals and commissions during
the ten-year period of martial rule (1971-1981) which
were created under general orders issued by President
Marcos in the exercise of his legislative powers is an
operative fact that may not just be ignored. The belated
declaration in 1987 of the unconstitutionality and
invalidity of those proceedings did not erase the reality
of their consequences which occurred long before our
decision in Olaguer was promulgated and which now
prevent us from carrying Olaguer to the limit of its logic.
Thus did this Court rule in Municipality of Malabang
v. Benito, 27 SCRA 533, where the question arose as
to whether the nullity of creation of a municipality by
executive order wiped out all the acts of the local
government abolished. 13

It would seem then, that the weight of authority is decidedly in

favor of the proposition that the Court's decision of September
21, 1987 in Que v. People, 154 SCRA 160 (1987) 14 that a
check issued merely to guarantee the performance of an
obligation is nevertheless covered by B.P. Blg. 22 should
not be given retrospective effect to the prejudice of the
petitioner and other persons situated, who relied on the official
opinion of the Minister of Justice that such a check did not fall
within the scope of B.P. Blg. 22.
Inveighing against this proposition, the Solicitor General
invokes U.S. v. Go Chico, 14 Phil. 128, applying the familiar
doctrine that in crimes mala prohibita, the intent or motive of
the offender is inconsequential, the only relevant inquiry being,
"has the law been violated?" The facts in Go Chico are
substantially different from those in the case at bar. In the
former, there was no official issuance by the Secretary of
Justice or other government officer construing the special law
violated; 15 and it was there observed, among others, that "the
defense . . . (of) an honest misconstruction of the law under
legal advice" 16 could not be appreciated as a valid defense. In
the present case on the other hand, the defense is that
reliance was placed, not on the opinion of a private lawyer but
upon an official pronouncement of no less than the attorney of
the Government, the Secretary of Justice, whose opinions,
though not law, are entitled to great weight and on which
reliance may be placed by private individuals is reflective of
the correct interpretation of a constitutional or statutory
provision; this, particularly in the case of penal statutes, by the
very nature and scope of the authority that resides in as
regards prosecutions for their violation. 17 Senarillos
vs. Hermosisima, supra, relied upon by the respondent Court
of Appeals, is crucially different in that in said case, as
in U.S. v. Go Chico, supra, no administrative interpretation
antedated the contrary construction placed by the Court on the
law invoked.

77
This is after all a criminal action all doubts in which, pursuant
to familiar, fundamental doctrine, must be resolved in favor of
the accused. Everything considered, the Court sees no
compelling reason why the doctrine of mala prohibita should
override the principle of prospectivity, and its clear implications
as herein above set out and discussed, negating criminal
liability.
WHEREFORE, the assailed decisions of the Court of Appeals
and of the Regional Trial Court are reversed and set aside,
and the criminal prosecution against the accused-petitioner is
DISMISSED, with costs de oficio.

promulgated by the Special Former Second

Division of the Court on September 21, 1987,
written for the division by Paras,J., with whom
concurred Fernan, Gutierrez, Jr., Padilla, Bidin
and Cortes, JJ. In that resolution, the Court
gave its "stamp of approval" on the decision of
the Court of Appeals holding inter alia that "It is
now settled that Batas Pambansa Bilang 22
applies even in cases where dishonored checks
are issued merely in the form of a deposit or a
guarantee."
4 Emphasis supplied.

SO ORDERED.
Padilla, Regalado, Nocon and Puno, JJ., concur.

# Footnotes
1 As found by the Court of Appeals, the
agreement was between Co, representing
Mayflower Shipping Corporation, and Geronimo
B. Bella, representing Tans-Pacific Towage, Inc.
The expenses for refloating were apportioned
chiefly between FGU Insurance and
Development Bank of the Philippines, which
respectively contributed P2,329,022.00 and
P1,579,000.00. SEE Rollo, pp. 9, 20-21.
2 Otherwise known as the "Bouncing Checks
Law".
3 The ruling is contained in an extended
resolution on a motion for reconsideration,

5 Exceptions to the rule of prospectivity are

collated, e.g., in the textbook of retired Justice
Edgardo A. Paras (Civil Code of the Philippines
Annotated, 1984 ed., Vol. 1, pp. 22-23) viz : 1)
laws remedial in nature; 2) penal law favorable
to accused, if ; after not habitual delinquent; 3)
laws of emergency nature under police power :
e.g., tenancy relations (Vda. de Ongsiako v.
Gamboa, 47 O.G. 4259, Valencia et al. v.
Surtida et al., May 31, 1961); 4) curative laws;
5) substantive right declared for first time unless
vested rights impaired (Unson v. del Rosario,
Jan. 29, 1953; Belen v. Belen, 49 O.G. 997;
Peo v. Alejaga, 49 OG 2833).
6 106 Phil. 713 and 103 Phil. 500, respectively,
both involving prosecutions for illegal
possession of firearms, and both holding that
appointment by the Provincial Governor or
Provincial Commander of a person as a "secret
agent" or "confidential agent" "sufficiently
placed him under the category of a 'peace

78
officer' . . . who under section 879 of the
Revised Administrative Code is exempted from
the requirements relating to the issuance of
license to possess firearm.

13 SEE also Cruz v. Enrile, 160 SCRA 700

[1988] and Res. of February 26, 1991; and
Drilon v. Court of Appeals, 202 SCRA 378
[1991].

7 SEE Ilagan v. People, Jan. 29, 1974, 55

SCRA 361.

14 SEE footnote 3, supra.

8 The title of the cited Monge case is Monge, et

al. v. Angeles, et al., and is reported in 101
Phil., 563 [1957], while that of the cited Tupas
case is Tupas v. Damasco, et al., reported in
132 SCRA 593 [1984].

15 Act No. 1696 of the Philippine Commission

punishing any person who shall expose, or
cause or permit to be exposed, to public view . .
. any flag, banner, emblem, or device used
during the late insurrection in the Philippine
Islands to designate or identify those in armed
rebellion against the United States, . . .

9 136 SCRA 27, 40-41.

16 14 Phil. 128, 133-134.
10 And several other rulings set forth in a
corresponding footnote in the text of the
decision.
11 SEE also Olaguer v. Military Commission
No. 34, 150 SCRA 144 (1987)
(Citing Municipality of Malabang v. Benito, 27
SCRA 533 where the question arose as to
whether the judicial nullification of an executive
order creating a municipality wiped out all the
acts of the local government abolished); Tan v.
Barrios, 190 SCRA 686 (1990); Drilon v. Court
of Appeals, 202 SCRA 378 (1991); Union of
Filipino Employees v. Vivar, Jr., 205 SCRA 200
(1992); Peralta v. Civil Service Commission,
212 SCRA 425.
12 150 SCRA 144 (1987).

17 Estrella vs. Orendain, 37 SCRA 640;

Noblejas vs. Salas, 67 SCRA 47.

79
SECOND DIVISION
G.R. No. 79060 December 8, 1989
ANICETO C. OCAMPO, petitioner,
vs.
THE COURT OF APPEALS and THE PEOPLE OF THE
PHILIPPINES (University of the Philippines),respondents.
Pedro F. Martinez for petitioner.

PARAS, J.:
This is a petition for review on certiorari to reverse or set aside
the judgment of public respondent Court of Appeals dated May
8, 1987 which affirmed the trial court's decision finding
petitioner guilty of violation of Presidential Decree No. 772
(Anti-Squatting Law) and sentencing him to suffer
imprisonment for one (1) year, with the accessories provided
by law and to remove the house constructed on the land in
question within thirty (30) days from the finality of judgment,
otherwise, private respondent University of the Philippines was
authorized to demolish or dismantle the house at the expense
of the petitioner.
The facts are not disputed.
At about 10:00 o'clock in the morning of August 15,
1984, the desk officer of the U.P. Police Force received
a telephone call; the caller reported that somebody was
constructing a house at the U.P. Arboretum.

80
Villanueva, Ladip and Ernesto were directed to
investigate (pp. 4-5, TSN, June 21, 1985; p. 4, TSN,
July 22, 1985).

Squatter's Team, and insisted that he bought the land

from Mr. Pael (p. 9, TSN, July 22, 1985; p. 10, TSN,
June 21, 1985).

Villanueva and Ladip are members of the U.P. Police

Force connected or assigned with the U.P. Squatter's
Relocation Team. The U.P. Arboretum is located at the
back of the U.P. Petron, beside the U.P. Hydraulic
Research Center (p. 5, TSN, June 21, 1985). They
proceeded to said place and there they saw some
people constructing a house. They asked the
carpenters who owned the house and were told that
the accused, Aniceto Ocampo, is the owner. Aniceto
Ocampo who was present at the time, was asked
whether he had a building permit. The accused
admitted that he had no building permit, although he
claimed that he bought the parcel of land on which his
house was being constructed from a certain Roberto
Pael (p. 5, TSN, July 22, 1985; p. 6, TSN, June 21,
1985).

The team reported the matter to their Chief, Captain

Madrigal, and executed an affidavit (Exh. "A") which
they submitted to the U.P. Legal Department (p. 9,
TSN, July 22, 1985; p. 10, tsn, June 21, 1985).

The accused was informed that the land belongs to the

University of the Philippines and that he should stop
the construction of his aforesaid house. The accused
complied (pp. 6-7, TSN, June 21, 1985; p. 6, TSN, July
22, 1985).
However, on August 24, 1984, the accused resumed
the construction of his aforesaid house. The
aforenamed prosecution witnesses reminded the
accused that he was violating Presidential Decree No.
772 (pp. 7-8, TSN, June 21, 1985; pp. 6-7, TSN, July
22, 1985).
The accused was again told to stop the construction of
his house. The accused ignored the U.P. Police

A picture of the house constructed by the accused was

also taken" (Exhibit "B"). (pp. 2-3, Comment; pp. 22-23,
Rollo).
After the preliminary investigation had been conducted, an
information dated March 25, 1985, was filed against Aniceto
Ocampo charging him with violation of Presidential Decree No.
772, docketed as Criminal Case No. Q-38997.
Upon arraignment, accused-appellant (now petitioner) pleaded
"not guilty".
After the prosecution rested its case, petitioner waived the
presentation of his evidence and instead filed a motion to
dismiss (demurrer to evidence) on the ground that the
prosecution did not present Transfer Certificate of Title No.
192689 to prove ownership of the land in question and that it
failed to prove that the land on which the petitioner constructed
his house belongs to the University of the Philippines.
The trial court denied the motion to dismiss for lack of merit,
arriving at the following conclusion:
The prosecution did not present in evidence Transfer
Certificate of Title No. 192689 to prove that the land in
question, indeed, belongs to the University of the
Philippines. The absence of this piece of evidence, in

81
the considered view of this Court, did not cripple the
fact that the accused, Aniceto Ocampo, is not the
owner of said property. And since there is no showing
that the accused occupied the lot in question and
constructed his residential house thereat with the
knowledge and/or consent of the owner thereof, the
accused is a squatter within the contemplation of
Presidential Decree No. 772. "Section 1 of Presidential
Decree No. 772 reads:
Any person, who with the use of force, intimidation or
threat, or taking advantage of the absence or tolerance
of the landowner, succeeds in occupying or possessing
the property of the latter against his will for residential,
commercial or any other purposes, shall be punished
by an imprisonment ranging from six months to one
year or a fine of not less than one thousand nor more
than five thousand pesos at the discretion of the court,
with subsidiary imprisonment in case of insolvency.
(p. 5, Comment; p. 25, Rollo)
On October 7, 1985, the trial court found Aniceto Ocampo
guilty beyond reasonable doubt of the offense charged.
Accused then appealed to the Court of Appeals alleging that
the trial court erred in: (a) applying Section 15, Rule 119 of the
1985 Rule of Criminal Procedure; (b) convicting appellant on
the basis of evidence which does not measure to the degree of
proof as required by law; and (c) not applying the principle of
presumption of innocence in favor of appellant.
Respondent Court of Appeals affirmed the decision of the
lower court, finding said appealed decision to be in
accordance with law and supported by evidence as well.

Hence, accused-appellant filed the instant petition for review

on certiorari.
In this petition, two issues are presented involving purely
questions of law:
1. Whether or not the failure of the prosecution to
present evidence of ownership is not a fatal defect in
finding the accused-petitioner guilty beyond reasonable
doubt of the crime of squatting; and
2. Is the Motion to Dismiss filed by accused-petitioner a
bar for him to present evidence?
For failure of the petitioner to file his reply within the period
which expired on December 20, 1987, this Court, in a
resolution dated February 3, 1988, resolved to dispense with
the aforesaid reply and considered the case submitted for
deliberation.
Petitioner alleges that the very essence of the case is the
proof of ownership of the land involved herein. We do not
agree.
The law involved in this case is Section 1 of Presidential
Decree No. 772, otherwise known as the Anti-Squatting Law,
which embraces three (3) elements, namely: (a) accused is
not the owner of the land; (b) that he succeeded in occupying
or possessing the property through force, intimidation, or
threat or by taking advantage of the absence or tolerance of
the owner; and (c) such occupation of the property is without
the consent or against the will of the owner. In the case at bar,
all three (3) elements have been established beyond
reasonable doubt.

82
The evidence presented by the prosecution manifested that
Aniceto Ocampo was not the owner of the land on which he
constructed his house and that he did so against the owner's
will or without its consent. Prosecution witnesses testified that
as early as May, 1983, petitioner was told that the area is U.P.
property; that he began constructing his house without a
permit from the owner; that petitioner had no building permit
and that he had been informed that he was violating the AntiSquatting Law. Besides, it was also confirmed that petitioner
had never shown title to the land he claims to have purchased
from one Roberto Pael. Yet, he failed to present any deed of
sale or any title in his name. This alleged sale is a defense
which the petitioner could have successfully utilized to his
advantage but failed to substantiate it with evidence at the
trial. When petitioner moved for dismissal of the case, he
forfeited his chance to prove his claim. It must be noted also
that this Roberto Pael was shown by testimonial evidence to
be not the owner of the land and that said land is the subject of
a criminal case against Pael for squatting.
Neither did the petitioner exhibit any building or sanitary permit
to the U.P. Security Force or in court, such being attached only
to his motion for reconsideration. Worthy of note is the fact that
such permits are both dated June 26, 1985, which is more
than ten (10) months after the illegal construction took place
and three (3) months after the case had been filed against
petitioner. (p. 29, Rello)
We concur with the Court of Appeals in affirming the trial
court's decision which maintained that the failure of the
prosecution to present title to prove ownership by the
University of the Philippines of the land in question is not
material in proving the guilt of the petitioner beyond
reasonable doubt. The ownership of U.P. is not in issue in this
case. Withal, the property has been widely and publicly known
to be part of the U.P. grounds. The crucial issue is the act of

squatting of the petitioner and his non-ownership of the

property, both of which have been proven beyond reasonable
doubt.
As regard the second issue presented, the answer is in the
affirmative. Section 15, Rule 119 of the Rules on Criminal
Procedure, as amended, provides:
Section 15. Demurrer to Evidence. after the
prosecution has rested its case, the court may dismiss
the case on the ground of insufficiency of evidence (1)
on its own initiative after giving the prosecution an
opportunity to be heard; or (2) on motion of the
accused filed with prior leave of court.
If the court denies the motion for dismissal, the
accused may adduce evidence in his defense. When
the accused files such motion to dismiss without
express leave of court, he waives the right to present
evidence and submits the case for judgment on the
basis of the evidence for the prosecution. (Emphasis
supplied).
The amendment to Section 15, Rule 119 of the 1985 Rules on
Criminal Procedure took effect only on October 1, 1988, but
the same was given retroactive effect in the case of Bonalos
vs. People, in its resolution dated, September 19, 1988. Wellsettled is the rule that "statutes regulating the procedure of the
court will be construed as applicable to actions pending and
undetermined at the time of their passage. Procedural laws
are retrospective in that sense and to that extent" (People vs.
Sumilang, 77 Phil. 784; Alday vs. Canilon, 120 SCRA 522).
The amendment would therefore apply in this case.
In the case at bar, nowhere does the record show that
accused-petitioner's demurrer to evidence was filed with prior

83
leave of court, the retroactive effect of the amendment
aforestated would therefore work against herein petitioner.

EN BANC
G.R. No. 82805 June 29, 1989

By moving to dismiss on the ground of insufficiency of

evidence, accused-petitioner waives his right to present
evidence to substantiate his defense and in effect submits the
case for judgment on the basis of the evidence for the
prosecution. This is exactly what petitioner did, and he cannot
now claim denial of his right to adduce his own evidence. As
the Solicitor General aptly opined, "petitioner gambled on
securing an acquittal, a gamble which he lost." (pp. 31-32,
Rollo)
More than that, petitioner raises as issue whether his motion to
dismiss bars him from presenting his evidence, but nowhere in
his petition does he endeavor to argue in his favor. Such a
question should have been raised by the petitioner in the court
a quo and on appeal yet he failed to do the same.
WHEREFORE, the petition is DENIED. The decision of the
public respondent is hereby AFFIRMED in toto.
SO ORDERED.
Padilla, Sarmiento and Regalado, JJ., concur.
Melencio-Herrera (Chairperson), J., is on leave.

BRIAD AGRO DEVELOPMENT CORPORATION, petitioner,

vs.
HONORABLE DIONISIO DELA SERNA, IN HIS CAPACITY
AS UNDERSECRETARY OF THE DEPARTMENT OF LABOR
AND EMPLOYMENT, TRADE UNIONS OF THE
PHILIPPINES AND ALLIED SERVICES (TUPAS)-WFTU
LOCAL CHAPTER NO. R01-005, ALFRED DELA CRUZ, ET
AL., * respondents.
G.R. No. 83225 June 29, 1989
L.M. CAMUS ENGINEERING CORPORATION, petitioner,
vs.
THE HON. SECRETARY OF LABOR, THE HON.
UNDERSECRETARY DIONISIO C. DELA SERNA,
VICTORIANO ATIENZA, JR., JOSNERI DIOCARES,
REYNALDO PAREO, WINNIE ORTOSIT, NELEN
SEVERINO, MARLON RESONABLE, ROLANDO
ALDANESE, ALICIO SEBIAO, CARLINTO PAQUERO,
JULIAN GOSONA, ROLANDO CASIMERO, ALFREDO DE
LEON, VICTORIANO MACHANG, ARMANDO SALAZAR,
ANITO DE JESUS, FRANCISCO DELGADO, PAQUITO
PITULAN, DANILO CENTINO, ROMEO DELOS SANTOS,
RUBEN LARA, ROGELIO MAGHUYOR, BEN ABDANI,
RUDY PALASUGLO, WILLIAM BALDADO, ROMEO
LABIGAN, TANNY JANOLO and EDGAR A.
OREZ, respondents.
Corazon R. Paulino for petitioner in G.R. No. 82805.
Raoul B. Agrava & Associates for petitioner in G.R. No. 83225.

84
Lar, Comia, Manala & Associates for respondents in G.R. No.
82805.
Jesus Balicanta for respondents in G.R. No. 83225.

SARMIENTO, J.:
Submitted for decision are these two consolidated cases, both
in the nature of challenges to the jurisdiction of the various
Regional Directors of the Department of Labor and
Employment to act on money claims. 1
ANTECEDENT FACTS AND PROCEEDINGS.
I. G.R. No. 82805.
This case originated from a complaint filed on February 21,
1987 to recover unpaid wages and wage supplements filed
with Regional Director Filomeno Balbin of the Labor
Department's Regional Office No. I sitting in San Fernando, La
Union. The facts appear in his order:
This case arose out of a complaint filed by TRADE
UNION OF THE PHILIPPINES AND ALLIED
SERVICES (TUPAS) WFTU Local Chapter No. ROI005, against respondent agricultural firm, for alleged
underpayment/non-payment of minimum wage,
ECOLA, overtime pay, legal holiday pay, night shift
differential pay, 13th month pay and service incentive
leave pay.
Acting on this complaint and pursuant to a
corresponding authority issued, a routine inspection
was conducted on subject establishment by Labor

Standards and Welfare Officer Dalo T. Basa on May 20,

1987, but the same did not materialize since no
records were presented for examination, as the same
are allegedly all being kept at the firm's Manila Office.
Nevertheless, LSWO Basa advised the firm's Officer-inCharge, Mr. Virgilio Villa-Real to present the said
records for verification at our Dagupan Labor Office.
However, to date and despite the fact that respondent
has been duly notified to present the same, no records
were presented for verification.
xxx xxx xxx
Respondent's repeated failure to appear during the
scheduled conferences despite due notices, is
construed as a waiver of its right to adduce evidence to
controvert the above-noted claims. Likewise, its failure
to present the required employment records is
presumed to mean that the presentation of the same
will be against the interest of the respondent and said
records will prove the claims of herein complainants.
Based on the records on hand, the workers/members
of the complaining Union have been found to be
underpaid of their wages and unpaid of their ECOLA,
holiday pay, service incentive leave pay and 13th
month pay from January 1984 to April 1987. The claims
for non-payment of overtime pay and night shift
differential pay have not been clearly shown and
proven, hence, are not included in the computed
deficiencies. 2
Director Balbin then held against Briad Agro Development
Corporation, and disposed as follows:

85
WHEREFORE, PREMISES CONSIDERED, and
considering further that said deficiencies form part of
the legal remuneration of herein employees,
respondent is hereby ordered to satisfy the a and pay
the total amount of FIVE MILLION THREE HUNDRED
SIXTY NINE THOUSAND NINE HUNDRED NINE
PESOS and 30/100 (P5,369,909.30) in the manner
above-stated, within fifteen (15) days from receipt
hereof, and to submit proof of payment within the same
period. Otherwise, a Writ of Execution win be issued to
the proper sheriffs to enforce this Order. The claims for
non-payment of overtime pay and night shift differential
pay, are hereby DISMISSED for lack of merit.
Let the parties be notified accordingly.
SO ORDERED. 3
In its appeal to the National Labor Relations Commission,
Briad Agro Development contended that the Regional Director
has no authority to entertain pecuniary claims of workers,
following this Court's ruling in Zambales Base Metals, Inc. v.
Minister of Labor, 4 in which we held that money claims are the
exclusive domain of the labor arbiters. The National Labor
Relations Commission dismissed the appeal on the strength of
Executive Order No. 111, 5 amending Article 128(b) of the
Labor Code, in which jurisdiction to so act on monetary claims
was supposedly granted to regional directors. In its petition to
this Court, Briad Agro Development reiterates its jurisdictional
challenge.
II. G.R. No. 83225.
The money award in this case, as and for unpaid emergency
cost of living allowances, and thirteenth-month and holiday
pays, was granted originally in favor of seventy-four

employees of L.M. Camus Engineering following an inspection

by Regional Director David Kong of the Department of Labor's
Regional Office No. IX, Zamboanga City. In his order, issued
on May 16, 1983, Director Kong condemned the corporation to
pay a total of P146,181.20. Forty-seven employees were,
however, later dropped from the case following an amicable
settlement with the petitioner. The facts are as follows:
Records disclosed that on the basis of the complaint
filed by the herein complainants, an inspection was
conducted in respondent's premises but both the
project manager and the project engineer were out of
town, except the internal auditor who informed the
Labor Regulations Officer (now known as Labor
Standards and Welfare Officer) that he had no authority
to produce the employment records needed; that the
internal auditor promised to inform the project manager
and the project engineer about the required
employment records but no information was received
since then. Consequently, a subpoena duces tecum
was issued by the Regional Director on August 20,
1982, addressed to the Manager of respondent
company ordering the latter to submit the pertinent
employment records before the Field Service Division,
Regional Office No. IX, Zamboanga City on August 25,
1982 at 9:30 a.m. Notwithstanding receipt of such
subpoena duces tecum and the follow-up letter to the
said Manager of respondent, plus another subpoena
addressed to respondent's project manager,
respondent failed to submit the required pertinent
records. Consequently, on October 25, 1982 the
Regional Director issued the Order in dispute, copy of
which was received by respondent on November 1982.
On November 18, 1982, counsel for respondent, Atty.
Nicolito L. Bustos, filed a motion for extension of time

86
to file his motion to set aside and/or reconsider Order
dated 25 October 1982.
On November 24, 1982, respondent filed a Motion to
Set Aside and/or Reconsider the Order dated 25
October 1982 on the following grounds namely:
1. That the Order dated 25 October 1982 was issued
without notice and hearing.
2. That the questioned Order is not supported by the
facts and the law of the case.
Respondent argues that the awards are void because
the composition of each award was not indicated; that
complainants were either its employees or that of its
subcontractor Carlos Balinagay; that of the 74
complainants only three, namely: Julian Gajana, Jose
Casimora and Jose Roxas failed to execute quitclaims;
and that for these reasons the disputed Order may be
validly set aside and/or reconsidered.
Complainants, thru counsel, filed their opposition to the
aforesaid Motion to Set. Aside Order dated 25 October
1982. They maintain that the Order in question was
issued in the valid exercise of the visitorial and
enforcement power of the Minister (now Secretary) of
Labor and Employment, thru the Regional Director as
his duly authorized representative; that before the said
Order was issued, respondent or its representative was
directed time and again by the Regional Director to
submit the pertinent employment records of
complainants but respondent chose to ignore the said
directives; that during the hearing of respondent's
motion on November 25, 1982 each complainant
testified that no quitclaim was ever executed by them,

although they remembered having signed a certain

document which respondent thru its representative
made them believe to be simply an evidence of
payment of salary and not a quitclaim.
On May 16, 1983, the Regional Director issued an
Order denying respondent's motion.
On May 27, 1983, a Motion to Dismiss was filed
alleging that "the parties have agreed to settle amicably
the individual claims of the various complainants who
are listed in the order of 25 October 1982."
Respondent likewise moved for the reconsideration of
the May 16, 1983-Order on the ground that the
Regional Office never had any jurisdiction over the
nature of the dispute. 6
The petitioner then appealed to the Office of the Secretary of
Labor, an appeal that did not prosper. On behalf of the
Secretary, Undersecretary Dionisio de la Serna affirmed
Director Kong's award, as modified.
The petitioner moved for reconsideration, impugning the
authority of the Regional Director. Undersecretary Dionisio
dela Serna denied reconsideration and sustained the Regional
Director's jurisdiction.
The petitioner, in this petition, primarily questions Regional
Directors' jurisdiction to pass upon money claims.
III. The cases before the Court; the question of
jurisdiction.
The petitioners in these two consolidated cases submit that
the jurisdiction over money claims is exclusive on the Labor

87
Arbiters of the National Labor Relations Commission, by force
of Article 217 of the Labor Code:
ART. 217. Jurisdiction of Labor Arbiters and the
Commission. (a) The Labor Arbiters shall have the
original and exclusive jurisdiction to hear and decide
within thirty (30) working days after submission of the
case by the parties for decision, the following cases
involving all workers, whether agricultural or nonagricultural:
1. Unfair labor practice cases;
2. Those that workers may file involving wages, hours
of work and other terms and conditions of employment;
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.
4. Cases involving household services; and
5. Cases arising from any violation of Article 265 of this
Code, including questions involving the legality of
strikes and lockouts.
(b) The Commission shall have exclusive appellate
jurisdiction over all cases decided by Labor Arbiters. 7
The Solicitor General, on the other hand, relies on the
provisions of Executive Order No. 111, amending, among other
things, Article 128, paragraph (b), of the Labor Code:

(b) The provisions of Article 217 of this Code to the

contrary notwithstanding and in cases where the
relationship of employer-employee still exists the
Minister of Labor and Employment or his duly
authorized representatives shall have the power to
order and administer, after due notice and hearing,
compliance with the labor standards provisions of this
Code and other labor legislation based on the findings
of labor regulation officers or industrial safety engineers
made in the course of inspection, and to issue writs of
execution to the appropriate authority for the
enforcement of their orders except in case where the
employer contests the findings of the labor regulation
officer and raises issues which cannot be resolved
without considering evidentiary matters that are not
verifiable in the normal course of inspection. 8
He further submits that, as a consequence, Zambales Base
Metals, Inc. v. Minister of Labor is no longer controlling
(although in his comment in G.R. No. 83225, he maintains that
it is still in force and effect. 9 )
IV. The Court's decision.
The Court rules that, in view of the promulgation of Executive
Order No. 111, Zambales Base Metals v. Minister of Labor is
no longer good law. Executive Order No. 111 is in the
character of a curative law, that is to say, it was intended to
remedy a defect that, in the opinion of the legislature (the
incumbent Chief Executive in this case, in the exercise of her
lawmaking powers under the Freedom Constitution) had
attached to the provision subject of the amendment. This is
clear from the proviso: "The provisions of Article 217 of this
Code to the contrary notwithstanding . . ." Plainly, the
amendment was meant to make both the Secretary of Labor

88
(or the various Regional Directors) and the Labor Arbiters
share jurisdiction.
Curative statutes have long been considered valid in this
jurisdiction. Their purpose is to give validity to acts done that
would have been invalid under existing laws, as if existing laws
have been complied with. They are, however, subject to
exceptions. For one, they must not be against the Constitution
and for another, they cannot impair vested rights or the
obligation of contracts. 10 It has not been shown in this case
that these exceptions apply.
That Executive Order No. 111 intended to. make the
jurisdiction to pass upon money claims, among the other
cases mentioned by Article 217 of the Labor Code, concurrent
between the Secretary of Labor (or Regional Directors) and
the Labor Arbiters is clear from its perambulatory clauses, to
wit:
WHEREAS, the welfare of the workers is a primary
concern of the government.
WHEREAS, it is necessary to amend or repeal
provisions of laws that repress the rights of workers
and of their trade unions. 11
Executive Order No. 111, it is obvious, was enacted to widen
workers' access to the Government for redress of grievances.
The language of the provision is indeed broad enough to
encompass cases over which Labor Arbiters had hitherto
exercised exclusive jurisdiction. We quote, in part:
... the Minister of Labor and Employment or his duly
authorized representatives shall have the power to
order and administer, after due notice and hearing,

compliance with the labor standards provisions of this

Code and other labor legislation ... 12
We can no longer accept the contention that the Regional
Directors' singular concern, under the said provision, is to
ensure compliance with labor standards, such as industrial
safety and similar concerns. In Zambales Base Metals, it was
our reading of Section 128(b) of the Code that the aforesaid
labor officials' authority stopped there, 13 but we have, in view
of the amendment under Executive Order No. 111, since taken
a second look. As we said, the Executive Order vests in
Regional Directors jurisdiction, "[t]he provisions of Article 217
of this Code to the contrary notwithstanding", it would have
rendered such a proviso-and the amendment itself-useless to
say that they (Regional Directors) retained the self-same
restricted powers, despite such an amendment. It is
fundamental that a statute is to be read in a manner that would
breathe life into it, rather than defeat it. At any rate, and as we
have observed, the language of Executive Order No. 111 is
comprehensive enough to extend to the resolution of
employer-employee controversies covered by Article 217.
It is interesting to note that the Government itself (through the
Solicitor General) considers Zambales Base Metals v. Minister
of Labor as Executive Order No. 11l's very raison d'etre. 14 If
this is so, the intent of the legislator to grant Regional Directors
the jurisdiction now impugned cannot any more be clearer.
Being a curative statute, the Executive Order in question has
retrospective effect. In Garcia v. Martinez, 15 we held that
legislation "which is in the nature of a curative statute" 16 has
"retrospective application to a pending proceeding." 17Hence,
these cases should be decided in the light of the presidential
issuance in question, although they might have come pending
further proceedings. Be that as it may, the records show that
G.R. No. 82805 had come about during the effectivity of

89
Executive Order No. 111. (In G.R. No. 82805, the complaint
was filed on February 21, 1987; in G.R. No. 83225, the
material dates do not appear in the records but the order
decreeing the money award was issued on October 25, 1982
and a subpoena duces tecum appears to have been issued, in
connection with the inspections that prefaced the complaint,
on August 20, 1982. 18 ) With respect to G.R. No. 82805,
therefore, the Executive Order squarely applies, while insofar
as G.R. No. 83225 is concerned, we give it a retroactive
operation.
With respect moreover, to Camus Engineering's petition (G.R.
No. 83225), it is the Court's considered opinion that the
petitioner is estopped from assailing Director Kong's
jurisdiction. The rule is that a party may not attack a tribunal's
jurisdiction and at the same time ask for affirmative
relief 19 The records disclose that the petitioner had entered
into an amicable settlement with a total of forty-seven
employees and had it approved by Director Kong. The
petitioner must, therefore, be said to have accepted Director
Kong's jurisdiction. It cannot now assail it.
Accordingly, we sustain the jurisdiction of the respondents
Regional Directors.
WHEREFORE, these petitions are DISMISSED. No costs.
SO ORDERED.
Melencio-Herrera, Paras, Feliciano, Gancayco Padilla, Bidin,
Cortes, Grio-Aquino, Medialdea and Regalado, JJ., concur.
Fernan, C.J. and Cruz, Gutierrez, Jr. JJ., concur.

Separate Opinions
NARVASA, J., Concurring Opinion:
While, for the reasons hereinafter stated, I concur in the result
reached in the main opinion, I cannot quite bring myself to
agree with its express or clearly implied postulate that
Executive Order No. 111 worked any substantive change in the
law previous thereto as far as concerns the extent and
character of the authority vested in the Secretary of Labor and
Employment or his representatives in labor standards
disputes. A survey of the state of the law prior to and after the
issuance of said Executive Order will, I hope, make the point
clearer.
1. The Law Prior to EO 111. 1
a. Exclusive 0riginal Jurisdiction of Labor Arbiters. Prior to
the effectivity of EO 111, the Labor Arbiters had "original and
exclusive jurisdiction (inter alia) to hear and decide" (1)
"cases ... that workers may file involving wages, hours of work
and other terms and conditions of employment ...," and (2) "all
money claims of workers involving non-payment or
underpayment of wages, overtime or premium compensation,
maternity or service incentive leave, separation pay and other
money claims arising from employer-employee relations,
except claims for employee's compensation, social security
and medicare benefits and as otherwise provided in Article 127
of (the Labor) Code ..." 2
b. Power Granted to Secretary of Labor or Representative.
Notwithstanding that the jurisdiction of the Labor Arbiters
above mentioned was pronounced to be original and
exclusive, some power over the same subject matter (over
wages [e.g., non-payment or under-payment], hours of work
[e.g., overtime or premium compensation], and other terms

90
and conditions of employment [e.g., separation pay, maternity
and other leave benefits]) was in measure also vested in the
Secretary of Labor or his duly authorized representative, i.e.,
the Regional Director.

prescribed; (c) the complaint patently partook (of) the nature of

harassment; and (d) the complaint was barred by prior
judgment. The denial of the certification could however be
subject of appeal by the Bureau of Labor Standards.

(1) Article 128 of the Labor Code. Article 128 of the Labor
Code, 3 as amended by P.D. No. 850, 4 conferred on the
"Secretary of Labor or his duly authorized representatives ...
the power to order and administer, after due notice and
hearing, compliance with the labor standards provisions of ...
(the) Code based on the findings of labor regulation officers or
industrial safety engineers made in the course of inspection,
and to issue writs of execution to the appropriate authority for
the enforcement of their order."

(4) Policy Instructions No. 14. Policy Instructions No. 14, on

the subject, "Termination Cases," effective April 23, 1976,
recognized the jurisdiction of the Regional Director to conduct
a summary investigation of applications for clearance to
dismiss employees and decide whether or not to deny the
application; but "if he does not deny the application, he shall
immediately certify the case to the Executive Arbiter for
hearing and decision on the merits." 7

(2) Labor Standards Provisions. The "abor standards

provisions" referred to are, of course, those concerning wages,
hours of work, separation pay, maternity and other leaves,
industrial or occupational safety, medical and dental treatment,
etc. 5
(3) Rules and Regulations Implementing the Labor Code.
The Rules and Regulations implementing the Labor Code
promulgated on February 16, 1976 provided, among other
things, 6 that the Regional Director had power to cause
investigation of complaints filed by aggrieved parties if
employer-employee relationship still existed between the
parties, and take such other action as may be necessary in
accordance with Article 128 of the Code; but if the employment
relation no longer existed, the case would be assigned to a
Conciliator for determination of the issues and effecting of an
amicable settlement, and if no settlement was reached, the
case would be certified to the Appropriate Labor Arbiter.
However, the Regional Director could deny certification of the
case to the Labor Arbiter if: (a) the complaint patently lacked
cause of action; (b) the causes of action had already

c. Allocation of Jurisdiction.Considering that apart from the

Regional Director (in representation of the Secretary of Labor)
and the Labor Arbiter, there were other officers, i.e., the
Conciliators in the Bureau of Labor Relations, who also had
some power relative to "labor standards cases," it was thought
necessary to define more precisely the competence of the
different officials on the matter. This was done in Policy
Instructions No. 6 issued by the Ministry of Labor and
Employment on April 23, 1976, dealing explicitly with the
subject, "Distribution of Jurisdiction over Labor Cases."
(1) The Regional Director. Placed within the exclusive
original jurisdiction of the REGIONAL DIRECTOR were labor
standards cases "arising from violations of labor standard laws
discovered in the course of inspection or complaints where
employer-employee relations still exist." 8
(2) The Conciliation Section. Placed within the exclusive
original jurisdiction of the CONCILIATION SECTION were
labor standards cases "where employer-employee relations no
longer exist." 9

91
(3) The Labor Arbiters. Declared as "CERTIFIABLE" to the
Labor Arbiters were cases which were "not settled by the
Conciliation Section of the Regional Office" "where employeremployee relations no longer exist" or those concerning (a)
"questions of law," or (b) "claims involving an amount
exceeding P100,000 or 40% of the paid-up capital of the
employer, whichever is lower, or (c) evidentiary matters not
disclosed or verified in the normal course of inspection." 10
d. Additional Prescriptions. Further refinement of the power
of the Regional Directors over Labor Standards Cases was
effected by Policy Instructions No. 7. Policy Instructions No. 7
declared that a Regional Director could exercise jurisdiction
over labor standards controversies except in those cases
(1) where questions of law are involved as determined by the
Regional Director; 11
(2) where the amount involved exceeds P100,000 or over 40%
of the equity of the employer, whichever is lower;
(3) where evidentiary matters not disclosed or verified in the
normal course of inspection are required; or
(4) where there is no more employer-employee relationship
p. 12
e. Later Rules.
(1) PD 1367. Presidential Decree No. 1367 confirmed the
jurisdiction of Labor Arbiters over "cases arising from
employer-employee relations duly indorsed (or "certified") by
the Regional Directors." 13
(2) Policy Instructions No. 37. Policy Instructions No. 37,
issued on October 7, 1978 in connection with PD 1391,

provided that "cases, involving violation of labor standards

laws where employer-employee relationship still exists shall be
assigned to the Labor Arbiters where: (a) intricate questions of
law are involved; or (b) evidentiary matters not disclosed or
verified in the normal course of inspection by labor regulations
officers are required for their proper disposition." 14 It declared,
too, that the so-called "conciliable cases" theretofore under the
jurisdiction of the defunct Conciliation Section for purposes of
conciliation or amicable settlement, became immediately
assignable to the Arbitration Branch for joint conciliation and
compulsory arbitration. 15
(3) PD 1691. PD 1691 Further amended Article 127
(renumbered 128) by the addition of a proviso relative to the
situation referred to in Policy Instructions Numbered 7 and
37, supra, i.e., where the employer contests the findings of
labor regulations officers, viz.: 16
xxx xxx xxx
(b) The Minister of Labor or his duly authorized representative
shall have the power to order and administer, after due notice
and hearing, compliance with the labor standard provisions of
this code based on the findings of labor regulation officers or
industrial safety engineers made in the course of inspection,
and to issue writs of execution to the appropriate authority for
the enforcement of their order, except in cases where the
employer contests the findings of the labor regulation officer
and raises issues which cannot be resolved without
considering evidentiary matters that are not verifiable in the
normal course of inspection.
f. Restatement of Power of Secretary of Laboror
Representative Prior to EO 111. In light of the laws and
rules just cited, and the pronouncement in Policy Instructions
No. 7 that labor standards cases had been taken from

92
thearbitration system and placed under the enforcement
system to the end that "the worker need not litigate to get what
legally belongs to him," the fact of the matter is that the power
of Regional Directors over labor standards cases prior to EO
111 consisted merely of the enforcement of UNCONTESTED
MONEY CLAIMS OF PERSONS STILL EMPLOYED, i.e.,
money claims of persons arising from violations of labor
standards provisions of the Labor Code (or other statute)
discovered by labor regulations officers in the course of
normal inspection, where the employment relationship still
existed, or the employer did not contest or otherwise raise any
issue respecting the findings of said labor regulations officers.
(1) No adjudicatory power. Indeed, no adjudicative power
as that possessed by Labor Arbiters was ever reposed in the
Regional Director, in the sense of trying and deciding (or
hearing and determining) legal controversies or justiciable
causes involving labor standards laws. The Regional Director
actually did not have the power or faculty known as
"jurisdiction," vested in a judge, for instance, or a labor arbiter,
i.e., to receive evidence adduced by parties involved in a labor
standards controversy, determine on the basis thereof the
factual issues, and apply the law to the facts thus deemed
established, in order that the controversy or litigation might be
authoritatively resolved. He did not have the power to resolve
controversies (understood in the popular sense, as clashes of
opposing views). He merely had functions that can only be
described as ministerial. He had visitorial power, as
representative of the Minister or Secretary of Labor, to cause
inspection of establishments to ascertain observance of labor
standards provisions, and in the event of discovered violations
thereof, to require compliance therewith if the employer
admitted the infractions; but if it should appear, at the hearing
required to be held after discovery of the infractions, that a
controversy existed, i.e., the employer was not accepting but
was on the contrary contesting said officers' findings, or that

no employment relationship existed any longer, the Regional

Director himself could not try and decide the case but had to
refer or certify it to the appropriate Labor Arbiter for hearing
and judgment. There was, in fine, no sharing by the Regional
Director of the original and exclusive jurisdiction reposed by
law in Labor Arbiters even with respect to money claims
arising from alleged breach of labor standards provisions of
the Labor Code.
3. Relevant Jurisprudence. It was in this sense of the
regional Director's lack of adjudicatory authority, or the power
of compulsory arbitration that the law was applied
in Zambales Base Metals v. Minister of Labor, 146 SCRA 50
(Nov. 26,1986), concerning money claims 17 arising from
alleged violations of labor standards provisions not discovered
in the course of normal inspection, Oreshoot Mining Co. v.
Arellano, 156 SCRA 500 (Dec. 14, 1987), involving, among
others, employees whose employment had been
terminated, 18 and Ong v. Parel, 156 SCRA 768 (Dec. 21,
1987), in which the employer inter alia disputed the adequacy
of the evidentiary foundation (employees' affidavits) of the
findings of the labor standards inspectors. Noteworthy is that,
as observed in Ong v. Parel, the Solicitor General had taken
the position (as late as January, 1987) that the respondent
Regional Director was "not empowered to adjudicate money
claims because such authority is reposed in the Labor Arbiter
and the National Labor Relations Commission as provided
under Art. 127 of the same Code, as amended ... (and) that
the visitorial and enforcement powers of the public respondent
under Art. 128 of the Labor Code are limited to awards not
exceeding P100,000.00 pursuant to MOLE Policy Instruction
No. 7." 19
4. Amendments Under EO 111. Another amendment of
paragraph (b) of Article 128 of the Labor Code was made by
Executive Order No. 111 which took effect, as aforestated, on

93
March 3, 1987. The amendment consisted merely in the
intercalation of two (2) clauses, to wit: (a) "The provisions of
article 217 of this code to the contrary notwithstanding and in
cases where the relationship of employer-employee still
exists," and (b) "and other labor legislation." As thus
amended, 20 paragraph (b) Article 128 now reads:
(b) The provisions of Article 217 of this Code to the
contrary notwithstanding and in cases where the
relationship of employer-employee still exists, the
Minister of Labor and Employment or his duly
authorized representatives shall have the power to
order and administer, after due notice and hearing,
compliance with the labor standards provisions of this
Code and other labor Legislation based on the findings
of labor regulations officers or industry safety engineers
made in the course of inspection, and to issue writs of
execution to the appropriate authority for the
enforcement of their orders, except in cases where the
employer contests the findings of the labor regulations
officer and raises issues which cannot be resolved
without considering evidentiary matters that are not
verifiable in the normal course of inspection.
5. Actual Effect of EO 111. According to the Solicitor
General, Executive Order No. 111 was promulgated precisely
to revise the law as pronounced and applied in the Zambales
Base Metals decision. 21 If this be so the formulation of the
executive order falls short of the purpose, and is, in light of the
prior state of the law, inefficacious to bring about the intended
revision.
The insertion of the clause, "where the relationship of
employer-employee still exists," to qualify the power of the
Minister (now Secretary) of Labor and Employment or his duly
authorized representatives-the necessary implication being

that where the employment relation no longer existed, said

Minister (Secretary) or his representatives had no such power
was quite unnecessary for in Policy Instructions Numbered 6,
7 and 37, supra, it was explicity acknowledged that these
officials really had no jurisdiction over cases where the
relationship of employer and employee no longer existed.
The inclusion of the phrase, "and other labor legislation," was
also unnecessary for it is obvious that labor standards
provisions may be found in the Labor Code as well as in other
statutes. In any event, the phrase did not affect the subject of
jurisdiction of Regional Directors.
Neither does the intercalation of the phrase, "the provisions of
Article 217 of this Code to the contrary notwithstanding," work
a change in the existing law. For even before the effectivity of
EO 111 and notwithstanding that under said Article 217
Labor Arbiters had exclusive original jurisdiction over cases ...
(and all) money claims of workers involving non-payment or
underpayment of wages, overtime or premium compensation,
maternity or service incentive leave, separation pay and other
money claims arising from employer-employee relations,
except claims for employee's compensation, social security
and medicare benefits-the Minister (Secretary) of Labor or his
duly authorized representatives already had the power (albeit
not truly adjudicative)-where the employer-employee
relationship still existed
... to order and administer, after due notice and
hearing, compliance with the labor standards
provisions of this code based on the findings of labor
regulation officers or industrial safety engineers made
in the course of inspection, and to issue writs of
execution to the appropriate authority for the
enforcement of their order, except in cases where the
employer contests the findings of the labor regulation

94
officer and raises issues which cannot be resolved
without considering evidentiary matters that are not
verifiable in the normal course of inspection.
In other words, even without the qualifying phrase, "the
provisions of Article 217 of this Code to the contrary
notwithstanding," the Secretary of Labor or his duly authorized
representatives already "shared" in some measure the
jurisdiction of Labor Arbiters to order observance of labor laws
denominated exclusive and original in said Article 217 in
that in UNCONTESTED MONEY CLAIMS OF PERSONS
STILL EMPLOYED, Regional Directors had power to "order
and administer ... compliance with the labor standards
provisions ... and to issue writs of execution to the appropriate
authority for the enforcement of their order." The principle has
not been changed. Even under EO 111 no other aspect of the
Labor Arbiter's jurisdiction may be deemed to be shared by the
Secretary or his representatives, in view of the retention of the
provisos requiring (1) the existence of the employment
relationship and (2) the absence of a contest or issue raised
by the employer anent the findings of the labor regulations
officers. Whether under EO 111 or the prior law, therefore, the
Secretary of Labor or his representatives could,
notwithstanding the exclusive original jurisdiction conferred on
Labor Arbiters, order compliance with the legal provisions
governing wages, hours of employment and other terms of
employment, found to have been violated in the normal course
of inspection, provided that (1) the employment relationship
still existed and (2) the case was uncontested, i.e., the
employer did not contest or raise any issue relative to the
findings of the labor standards officers.
To recapitulate, under EO 111, the Regional Directors, in
representation of the Secretary of Labor and
notwithstanding the grant of exclusive original jurisdiction to
Labor Arbiters by Article 217 of the Labor Code, as amended

have power to hear cases involving violations of labor

standards provisions of the Labor Code or other legislation
discovered in the course of normal inspection, and order
compliance therewith, provided that:
1) the alleged violations of the employer involve persons who
are still his employees, i.e., not dismissed: and
2) the employer does not contest the findings of the labor
regulations officer or raise issues which cannot be resolved
without considering evidentiary matters that are not verifiable
in the normal course of inspection.
These propositions relative to uncontested cases are reflected
in Rule III of the Rules Implementing Executive Order 111
governing the "Endorsement of Cases to the National Labor
Relations Commission," viz.:
Section 1. Contested Cases.
a) In cases where the employer contests the findings of
the Labor Standards and Welfare Officers and the
issues cannot be resolved without considering
evidentiary matters that are not verifiable in the normal
course of inspection, the Regional Director shall
endorse such case to the appropriate Arbitration
Branch of the National Labor Relations Commission.
b) The employer shall raise such objections during the
hearing of the case or at any time after receipt of the
notice of inspection results. The issue of whether or not
the case shall be endorsed to the NLRC shall be
resolved by the Regional Director in the final
disposition of the case.

95
Section 2. Labor Standards and Welfare Officers
(LSWOSs) as witnessesIn cases that have been
endorsed to the NLRC, the (LSWOSs) who participated
in the investigation shall make themselves available as
witnesses in the proceedings before the Labor Arbiter
concerned.
It may finally be observed that the hearing to be conducted by
the Regional Director is limited to a determination of whether
or not (1) the employment relationship still exists, and/or (2)
the employer accepts the findings of the (LSWOSs) and raises
no issues which cannot be resolved without considering
evidentiary matters that are not verifiable in the normal course
of inspection. In the affirmative case, the Regional Director
may properly order compliance with the legal provisions
violated and issue writs of execution to the appropriate
authority for the enforcement of this order; otherwise, the
Regional Director ceases to have competence to take
cognizance of and decide the case but must refer or certify it
to the Labor Arbiter for hearing and judgment.
6. Application of the Law to Cases at Bar. In G.R. No.
82805 (Briad Agro Development Corporation v. de la Serna),
the employer refused to present its records for inspection by
the Regional Office. This may be deemed a waiver of the right
to contest the conclusions of the Labor Inspectors drawn from
the evidence and records at hand. Under Executive Order 111,
which is applicable since the violations of labor standards took
place after its effectivity, it was within the authority of the
Regional Director to order compliance with the labor standards
statutes, and to issue a writ of execution to the appropriate
authority to enforce his order.
In G.R. No. 83255 (L.M. Camus Engineering Corporation v.
Secretary of Labor), the employer similarly refused to produce
its relevant records, despite several requests therefor by the

Regional Office. Its refusal may be regarded as a waiver of the

right to contest the Director's findings made on the basis of the
records and evidence available, including the fact that the
employer had impliedly acknowledged the imputed infractions
of labor standards when it made payments on account thereof
to several of its employees by way of amicable settlement.
Under the law prior to Executive Order 111, the Regional
Director had the power, in cases where the employment
relationship still existed, to order compliance with labor
standards and issue a writ of execution to the appropriate
authorities for the enforcement of his awards. In any event,
said Executive Order, as a "curative statute ... has
retrospective application to a pending proceeding." 22
I suggest that in both cases, even without the sanction of
Executive Order 111, which neither enlarged nor otherwise
altered the authority of the Secretary of Labor and the
Regional Directors as regards labor standards cases, the
assailed actions of said officials may be sustained as properly
within the powers vested in them by the law in force before the
effectivity of said enactment. Upon this proposition, the
dismissal of both petitions is entirely in order.
7. Republic Act No. 6715.What in fact conferred upon
Regional Directors adjudicative power in the true sense of the
term, i.e., the power take cognizance of, receive evidence on
and determine legal controversies brought before them, is
Republic Act No. 6715, signed into law on March 2, 1988 and
effective "fifteen (15) days after its publication in the Official
Gazette or in at least two (2) national newspapers of general
circulation, whichever comes earlier."
a. Amendment of Article 129.RA 6715 amended Article 129
of the Labor Code to read as follows:

96
ART. 129. Recovery of wages, simple money claims
and other benefits.Upon complaint of any interested
party, the Regional Director of the Department of Labor
and Employment or any of the duly authorized hearing
officers of the Department is empowered, through
summary proceeding and after due notice, to hear and
decide any matter involving the recovery of wages and
other monetary claims and benefits, including legal
interest, owing to an employee or person employed in
domestic or household service or househelper under
this code, arising from employer-employee
relations;Provided, That such complaint does not
include a claim for reinstatement: Provided, further,
That the aggregate money claims of each employee or
househelper do not exceed five thousand pesos
(P5,000.00). The Regional Director or hearing officer
shall decide or resolve the complaint within thirty (30)
calendar days from the date of the filing of the same. ...
Any decision or resolution of the Regional Director or
hearing officer pursuant to this provision may be
appealed on the same grounds provided in Article 223
of this Code, within five (5) calendar days from receipt
of a copy of said decision or resolution, to the National
Labor Relations Commission which shall resolve the
appeal within ten (10) calendar days from the
submission of the last pleading required or allowed
under its rules.
xxx xxx xxx
b. Amendment of Article 217. Amended by RA 6715, too,
was Article 217 of the same Code, to read as follows:
ART. 217. Jurisdiction of Labor Arbiters and the
Commission.-Except as otherwise provided under this

code, the Labor Arbiters shall have original and

exclusive jurisdiction to hear and decide, within thirty
(30) calendar days after the submission of the case by
the parties for decision without extension, even in the
absence of stenographic notes, the following cases
involving all workers, whether agricultural or nonagricultural:
(1) Unfair labor practice cases;
(2) Termination disputes;
(3) If accompanied with a claim of reinstatement, those
cases that workers may file involving wages, rates of
pay, hours of work and other terms and conditions of
employment;
(4) Claims for actual, moral, exemplary and other forms
of damages arising from the employer-employee
relation;
(5) Cases arising from any violation of Article 264 of
this Code, including questions involving the legality of
strikes and lockouts; and
(6) Except claims for employees compensation, social
security, medicare and maternity benefits, all other
claims arising from employer-employee relations,
including those of persons in domestic or household
service, involving an amount exceeding five thousand
pesos (P5,000.00), whether or not accompanied with a
claim for reinstatement.
xxx xxx xxx

97
c. Requisites for Exercise of Jurisdiction by Regional Director,
etc.Quite clearly, under the provisions of said Act, Regional
Directors and other hearing officers of the Department of Labor
(aside from the Labor Arbiters) have real jurisdiction-i.e., they
may try and decide, or hear and determine-any claim brought
before them for recovery of wages and other monetary claims
and benefits, including legal interest, if the following requisites
concur, to wit:
1) the claim is presented by an employee or person employed
in domestic or household service, or househelper under the
Code;
2) the claimant, no longer being employed, does not seek
reinstatement; and
3) the aggregate money claim of the employee or househelper
does not exceed five thousand pesos (P5,000.00).
d. When Labor Arbiter has exclusive jurisdiction. Where
these three (3) requisites do not co-exist, the Labor Arbiters
have exclusive original jurisdiction over all claims arising from
employer-employee relations, other than those for employees'
compensation, social security, medicare and maternity
benefits.

EN BANC
G.R. No. 82805 June 29, 1989
BRIAD AGRO DEVELOPMENT CORPORATION, petitioner,
vs.
HONORABLE DIONISIO DELA SERNA, IN HIS CAPACITY
AS UNDERSECRETARY OF THE DEPARTMENT OF LABOR
AND EMPLOYMENT, TRADE UNIONS OF THE
PHILIPPINES AND ALLIED SERVICES (TUPAS)-WFTU
LOCAL CHAPTER NO. R01-005, ALFRED DELA CRUZ, ET
AL., * respondents.
G.R. No. 83225 June 29, 1989
L.M. CAMUS ENGINEERING CORPORATION, petitioner,
vs.
THE HON. SECRETARY OF LABOR, THE HON.
UNDERSECRETARY DIONISIO C. DELA SERNA,
VICTORIANO ATIENZA, JR., JOSNERI DIOCARES,
REYNALDO PAREO, WINNIE ORTOSIT, NELEN
SEVERINO, MARLON RESONABLE, ROLANDO
ALDANESE, ALICIO SEBIAO, CARLINTO PAQUERO,
JULIAN GOSONA, ROLANDO CASIMERO, ALFREDO DE
LEON, VICTORIANO MACHANG, ARMANDO SALAZAR,
ANITO DE JESUS, FRANCISCO DELGADO, PAQUITO
PITULAN, DANILO CENTINO, ROMEO DELOS SANTOS,
RUBEN LARA, ROGELIO MAGHUYOR, BEN ABDANI,
RUDY PALASUGLO, WILLIAM BALDADO, ROMEO
LABIGAN, TANNY JANOLO and EDGAR A.
OREZ, respondents.
Corazon R. Paulino for petitioner in G.R. No. 82805.
Raoul B. Agrava & Associates for petitioner in G.R. No. 83225.

98
Lar, Comia, Manala & Associates for respondents in G.R. No.
82805.
Jesus Balicanta for respondents in G.R. No. 83225.

SARMIENTO, J.:
Submitted for decision are these two consolidated cases, both
in the nature of challenges to the jurisdiction of the various
Regional Directors of the Department of Labor and
Employment to act on money claims. 1
ANTECEDENT FACTS AND PROCEEDINGS.
I. G.R. No. 82805.
This case originated from a complaint filed on February 21,
1987 to recover unpaid wages and wage supplements filed
with Regional Director Filomeno Balbin of the Labor
Department's Regional Office No. I sitting in San Fernando, La
Union. The facts appear in his order:
This case arose out of a complaint filed by TRADE
UNION OF THE PHILIPPINES AND ALLIED
SERVICES (TUPAS) WFTU Local Chapter No. ROI005, against respondent agricultural firm, for alleged
underpayment/non-payment of minimum wage,
ECOLA, overtime pay, legal holiday pay, night shift
differential pay, 13th month pay and service incentive
leave pay.
Acting on this complaint and pursuant to a
corresponding authority issued, a routine inspection
was conducted on subject establishment by Labor

Standards and Welfare Officer Dalo T. Basa on May 20,

1987, but the same did not materialize since no
records were presented for examination, as the same
are allegedly all being kept at the firm's Manila Office.
Nevertheless, LSWO Basa advised the firm's Officer-inCharge, Mr. Virgilio Villa-Real to present the said
records for verification at our Dagupan Labor Office.
However, to date and despite the fact that respondent
has been duly notified to present the same, no records
were presented for verification.
xxx xxx xxx
Respondent's repeated failure to appear during the
scheduled conferences despite due notices, is
construed as a waiver of its right to adduce evidence to
controvert the above-noted claims. Likewise, its failure
to present the required employment records is
presumed to mean that the presentation of the same
will be against the interest of the respondent and said
records will prove the claims of herein complainants.
Based on the records on hand, the workers/members
of the complaining Union have been found to be
underpaid of their wages and unpaid of their ECOLA,
holiday pay, service incentive leave pay and 13th
month pay from January 1984 to April 1987. The claims
for non-payment of overtime pay and night shift
differential pay have not been clearly shown and
proven, hence, are not included in the computed
deficiencies. 2
Director Balbin then held against Briad Agro Development
Corporation, and disposed as follows:

99
WHEREFORE, PREMISES CONSIDERED, and
considering further that said deficiencies form part of
the legal remuneration of herein employees,
respondent is hereby ordered to satisfy the a and pay
the total amount of FIVE MILLION THREE HUNDRED
SIXTY NINE THOUSAND NINE HUNDRED NINE
PESOS and 30/100 (P5,369,909.30) in the manner
above-stated, within fifteen (15) days from receipt
hereof, and to submit proof of payment within the same
period. Otherwise, a Writ of Execution win be issued to
the proper sheriffs to enforce this Order. The claims for
non-payment of overtime pay and night shift differential
pay, are hereby DISMISSED for lack of merit.
Let the parties be notified accordingly.
SO ORDERED. 3
In its appeal to the National Labor Relations Commission,
Briad Agro Development contended that the Regional Director
has no authority to entertain pecuniary claims of workers,
following this Court's ruling in Zambales Base Metals, Inc. v.
Minister of Labor, 4 in which we held that money claims are the
exclusive domain of the labor arbiters. The National Labor
Relations Commission dismissed the appeal on the strength of
Executive Order No. 111, 5 amending Article 128(b) of the
Labor Code, in which jurisdiction to so act on monetary claims
was supposedly granted to regional directors. In its petition to
this Court, Briad Agro Development reiterates its jurisdictional
challenge.
II. G.R. No. 83225.
The money award in this case, as and for unpaid emergency
cost of living allowances, and thirteenth-month and holiday
pays, was granted originally in favor of seventy-four

employees of L.M. Camus Engineering following an inspection

by Regional Director David Kong of the Department of Labor's
Regional Office No. IX, Zamboanga City. In his order, issued
on May 16, 1983, Director Kong condemned the corporation to
pay a total of P146,181.20. Forty-seven employees were,
however, later dropped from the case following an amicable
settlement with the petitioner. The facts are as follows:
Records disclosed that on the basis of the complaint
filed by the herein complainants, an inspection was
conducted in respondent's premises but both the
project manager and the project engineer were out of
town, except the internal auditor who informed the
Labor Regulations Officer (now known as Labor
Standards and Welfare Officer) that he had no authority
to produce the employment records needed; that the
internal auditor promised to inform the project manager
and the project engineer about the required
employment records but no information was received
since then. Consequently, a subpoena duces tecum
was issued by the Regional Director on August 20,
1982, addressed to the Manager of respondent
company ordering the latter to submit the pertinent
employment records before the Field Service Division,
Regional Office No. IX, Zamboanga City on August 25,
1982 at 9:30 a.m. Notwithstanding receipt of such
subpoena duces tecum and the follow-up letter to the
said Manager of respondent, plus another subpoena
addressed to respondent's project manager,
respondent failed to submit the required pertinent
records. Consequently, on October 25, 1982 the
Regional Director issued the Order in dispute, copy of
which was received by respondent on November 1982.
On November 18, 1982, counsel for respondent, Atty.
Nicolito L. Bustos, filed a motion for extension of time

100
to file his motion to set aside and/or reconsider Order
dated 25 October 1982.
On November 24, 1982, respondent filed a Motion to
Set Aside and/or Reconsider the Order dated 25
October 1982 on the following grounds namely:
1. That the Order dated 25 October 1982 was issued
without notice and hearing.
2. That the questioned Order is not supported by the
facts and the law of the case.
Respondent argues that the awards are void because
the composition of each award was not indicated; that
complainants were either its employees or that of its
subcontractor Carlos Balinagay; that of the 74
complainants only three, namely: Julian Gajana, Jose
Casimora and Jose Roxas failed to execute quitclaims;
and that for these reasons the disputed Order may be
validly set aside and/or reconsidered.
Complainants, thru counsel, filed their opposition to the
aforesaid Motion to Set. Aside Order dated 25 October
1982. They maintain that the Order in question was
issued in the valid exercise of the visitorial and
enforcement power of the Minister (now Secretary) of
Labor and Employment, thru the Regional Director as
his duly authorized representative; that before the said
Order was issued, respondent or its representative was
directed time and again by the Regional Director to
submit the pertinent employment records of
complainants but respondent chose to ignore the said
directives; that during the hearing of respondent's
motion on November 25, 1982 each complainant
testified that no quitclaim was ever executed by them,

although they remembered having signed a certain

document which respondent thru its representative
made them believe to be simply an evidence of
payment of salary and not a quitclaim.
On May 16, 1983, the Regional Director issued an
Order denying respondent's motion.
On May 27, 1983, a Motion to Dismiss was filed
alleging that "the parties have agreed to settle amicably
the individual claims of the various complainants who
are listed in the order of 25 October 1982."
Respondent likewise moved for the reconsideration of
the May 16, 1983-Order on the ground that the
Regional Office never had any jurisdiction over the
nature of the dispute. 6
The petitioner then appealed to the Office of the Secretary of
Labor, an appeal that did not prosper. On behalf of the
Secretary, Undersecretary Dionisio de la Serna affirmed
Director Kong's award, as modified.
The petitioner moved for reconsideration, impugning the
authority of the Regional Director. Undersecretary Dionisio
dela Serna denied reconsideration and sustained the Regional
Director's jurisdiction.
The petitioner, in this petition, primarily questions Regional
Directors' jurisdiction to pass upon money claims.
III. The cases before the Court; the question of
jurisdiction.
The petitioners in these two consolidated cases submit that
the jurisdiction over money claims is exclusive on the Labor

101
Arbiters of the National Labor Relations Commission, by force
of Article 217 of the Labor Code:
ART. 217. Jurisdiction of Labor Arbiters and the
Commission. (a) The Labor Arbiters shall have the
original and exclusive jurisdiction to hear and decide
within thirty (30) working days after submission of the
case by the parties for decision, the following cases
involving all workers, whether agricultural or nonagricultural:
1. Unfair labor practice cases;
2. Those that workers may file involving wages, hours
of work and other terms and conditions of employment;
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.
4. Cases involving household services; and
5. Cases arising from any violation of Article 265 of this
Code, including questions involving the legality of
strikes and lockouts.
(b) The Commission shall have exclusive appellate
jurisdiction over all cases decided by Labor Arbiters. 7
The Solicitor General, on the other hand, relies on the
provisions of Executive Order No. 111, amending, among other
things, Article 128, paragraph (b), of the Labor Code:

(b) The provisions of Article 217 of this Code to the

contrary notwithstanding and in cases where the
relationship of employer-employee still exists the
Minister of Labor and Employment or his duly
authorized representatives shall have the power to
order and administer, after due notice and hearing,
compliance with the labor standards provisions of this
Code and other labor legislation based on the findings
of labor regulation officers or industrial safety engineers
made in the course of inspection, and to issue writs of
execution to the appropriate authority for the
enforcement of their orders except in case where the
employer contests the findings of the labor regulation
officer and raises issues which cannot be resolved
without considering evidentiary matters that are not
verifiable in the normal course of inspection. 8
He further submits that, as a consequence, Zambales Base
Metals, Inc. v. Minister of Labor is no longer controlling
(although in his comment in G.R. No. 83225, he maintains that
it is still in force and effect. 9 )
IV. The Court's decision.
The Court rules that, in view of the promulgation of Executive
Order No. 111, Zambales Base Metals v. Minister of Labor is
no longer good law. Executive Order No. 111 is in the
character of a curative law, that is to say, it was intended to
remedy a defect that, in the opinion of the legislature (the
incumbent Chief Executive in this case, in the exercise of her
lawmaking powers under the Freedom Constitution) had
attached to the provision subject of the amendment. This is
clear from the proviso: "The provisions of Article 217 of this
Code to the contrary notwithstanding . . ." Plainly, the
amendment was meant to make both the Secretary of Labor

102
(or the various Regional Directors) and the Labor Arbiters
share jurisdiction.
Curative statutes have long been considered valid in this
jurisdiction. Their purpose is to give validity to acts done that
would have been invalid under existing laws, as if existing laws
have been complied with. They are, however, subject to
exceptions. For one, they must not be against the Constitution
and for another, they cannot impair vested rights or the
obligation of contracts. 10 It has not been shown in this case
that these exceptions apply.
That Executive Order No. 111 intended to. make the
jurisdiction to pass upon money claims, among the other
cases mentioned by Article 217 of the Labor Code, concurrent
between the Secretary of Labor (or Regional Directors) and
the Labor Arbiters is clear from its perambulatory clauses, to
wit:
WHEREAS, the welfare of the workers is a primary
concern of the government.
WHEREAS, it is necessary to amend or repeal
provisions of laws that repress the rights of workers
and of their trade unions. 11
Executive Order No. 111, it is obvious, was enacted to widen
workers' access to the Government for redress of grievances.
The language of the provision is indeed broad enough to
encompass cases over which Labor Arbiters had hitherto
exercised exclusive jurisdiction. We quote, in part:
... the Minister of Labor and Employment or his duly
authorized representatives shall have the power to
order and administer, after due notice and hearing,

compliance with the labor standards provisions of this

Code and other labor legislation ... 12
We can no longer accept the contention that the Regional
Directors' singular concern, under the said provision, is to
ensure compliance with labor standards, such as industrial
safety and similar concerns. In Zambales Base Metals, it was
our reading of Section 128(b) of the Code that the aforesaid
labor officials' authority stopped there, 13 but we have, in view
of the amendment under Executive Order No. 111, since taken
a second look. As we said, the Executive Order vests in
Regional Directors jurisdiction, "[t]he provisions of Article 217
of this Code to the contrary notwithstanding", it would have
rendered such a proviso-and the amendment itself-useless to
say that they (Regional Directors) retained the self-same
restricted powers, despite such an amendment. It is
fundamental that a statute is to be read in a manner that would
breathe life into it, rather than defeat it. At any rate, and as we
have observed, the language of Executive Order No. 111 is
comprehensive enough to extend to the resolution of
employer-employee controversies covered by Article 217.
It is interesting to note that the Government itself (through the
Solicitor General) considers Zambales Base Metals v. Minister
of Labor as Executive Order No. 11l's very raison d'etre. 14 If
this is so, the intent of the legislator to grant Regional Directors
the jurisdiction now impugned cannot any more be clearer.
Being a curative statute, the Executive Order in question has
retrospective effect. In Garcia v. Martinez, 15 we held that
legislation "which is in the nature of a curative statute" 16 has
"retrospective application to a pending proceeding." 17Hence,
these cases should be decided in the light of the presidential
issuance in question, although they might have come pending
further proceedings. Be that as it may, the records show that
G.R. No. 82805 had come about during the effectivity of

103
Executive Order No. 111. (In G.R. No. 82805, the complaint
was filed on February 21, 1987; in G.R. No. 83225, the
material dates do not appear in the records but the order
decreeing the money award was issued on October 25, 1982
and a subpoena duces tecum appears to have been issued, in
connection with the inspections that prefaced the complaint,
on August 20, 1982. 18 ) With respect to G.R. No. 82805,
therefore, the Executive Order squarely applies, while insofar
as G.R. No. 83225 is concerned, we give it a retroactive
operation.
With respect moreover, to Camus Engineering's petition (G.R.
No. 83225), it is the Court's considered opinion that the
petitioner is estopped from assailing Director Kong's
jurisdiction. The rule is that a party may not attack a tribunal's
jurisdiction and at the same time ask for affirmative
relief 19 The records disclose that the petitioner had entered
into an amicable settlement with a total of forty-seven
employees and had it approved by Director Kong. The
petitioner must, therefore, be said to have accepted Director
Kong's jurisdiction. It cannot now assail it.
Accordingly, we sustain the jurisdiction of the respondents
Regional Directors.
WHEREFORE, these petitions are DISMISSED. No costs.
SO ORDERED.
Melencio-Herrera, Paras, Feliciano, Gancayco Padilla, Bidin,
Cortes, Grio-Aquino, Medialdea and Regalado, JJ., concur.
Fernan, C.J. and Cruz, Gutierrez, Jr. JJ., concur.

Separate Opinions
NARVASA, J., Concurring Opinion:
While, for the reasons hereinafter stated, I concur in the result
reached in the main opinion, I cannot quite bring myself to
agree with its express or clearly implied postulate that
Executive Order No. 111 worked any substantive change in the
law previous thereto as far as concerns the extent and
character of the authority vested in the Secretary of Labor and
Employment or his representatives in labor standards
disputes. A survey of the state of the law prior to and after the
issuance of said Executive Order will, I hope, make the point
clearer.
1. The Law Prior to EO 111. 1
a. Exclusive 0riginal Jurisdiction of Labor Arbiters. Prior to
the effectivity of EO 111, the Labor Arbiters had "original and
exclusive jurisdiction (inter alia) to hear and decide" (1)
"cases ... that workers may file involving wages, hours of work
and other terms and conditions of employment ...," and (2) "all
money claims of workers involving non-payment or
underpayment of wages, overtime or premium compensation,
maternity or service incentive leave, separation pay and other
money claims arising from employer-employee relations,
except claims for employee's compensation, social security
and medicare benefits and as otherwise provided in Article 127
of (the Labor) Code ..." 2
b. Power Granted to Secretary of Labor or Representative.
Notwithstanding that the jurisdiction of the Labor Arbiters
above mentioned was pronounced to be original and
exclusive, some power over the same subject matter (over
wages [e.g., non-payment or under-payment], hours of work
[e.g., overtime or premium compensation], and other terms

104
and conditions of employment [e.g., separation pay, maternity
and other leave benefits]) was in measure also vested in the
Secretary of Labor or his duly authorized representative, i.e.,
the Regional Director.

prescribed; (c) the complaint patently partook (of) the nature of

harassment; and (d) the complaint was barred by prior
judgment. The denial of the certification could however be
subject of appeal by the Bureau of Labor Standards.

(1) Article 128 of the Labor Code. Article 128 of the Labor
Code, 3 as amended by P.D. No. 850, 4 conferred on the
"Secretary of Labor or his duly authorized representatives ...
the power to order and administer, after due notice and
hearing, compliance with the labor standards provisions of ...
(the) Code based on the findings of labor regulation officers or
industrial safety engineers made in the course of inspection,
and to issue writs of execution to the appropriate authority for
the enforcement of their order."

(4) Policy Instructions No. 14. Policy Instructions No. 14, on

the subject, "Termination Cases," effective April 23, 1976,
recognized the jurisdiction of the Regional Director to conduct
a summary investigation of applications for clearance to
dismiss employees and decide whether or not to deny the
application; but "if he does not deny the application, he shall
immediately certify the case to the Executive Arbiter for
hearing and decision on the merits." 7

(2) Labor Standards Provisions. The "abor standards

provisions" referred to are, of course, those concerning wages,
hours of work, separation pay, maternity and other leaves,
industrial or occupational safety, medical and dental treatment,
etc. 5
(3) Rules and Regulations Implementing the Labor Code.
The Rules and Regulations implementing the Labor Code
promulgated on February 16, 1976 provided, among other
things, 6 that the Regional Director had power to cause
investigation of complaints filed by aggrieved parties if
employer-employee relationship still existed between the
parties, and take such other action as may be necessary in
accordance with Article 128 of the Code; but if the employment
relation no longer existed, the case would be assigned to a
Conciliator for determination of the issues and effecting of an
amicable settlement, and if no settlement was reached, the
case would be certified to the Appropriate Labor Arbiter.
However, the Regional Director could deny certification of the
case to the Labor Arbiter if: (a) the complaint patently lacked
cause of action; (b) the causes of action had already

c. Allocation of Jurisdiction.Considering that apart from the

Regional Director (in representation of the Secretary of Labor)
and the Labor Arbiter, there were other officers, i.e., the
Conciliators in the Bureau of Labor Relations, who also had
some power relative to "labor standards cases," it was thought
necessary to define more precisely the competence of the
different officials on the matter. This was done in Policy
Instructions No. 6 issued by the Ministry of Labor and
Employment on April 23, 1976, dealing explicitly with the
subject, "Distribution of Jurisdiction over Labor Cases."
(1) The Regional Director. Placed within the exclusive
original jurisdiction of the REGIONAL DIRECTOR were labor
standards cases "arising from violations of labor standard laws
discovered in the course of inspection or complaints where
employer-employee relations still exist." 8
(2) The Conciliation Section. Placed within the exclusive
original jurisdiction of the CONCILIATION SECTION were
labor standards cases "where employer-employee relations no
longer exist." 9

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(3) The Labor Arbiters. Declared as "CERTIFIABLE" to the
Labor Arbiters were cases which were "not settled by the
Conciliation Section of the Regional Office" "where employeremployee relations no longer exist" or those concerning (a)
"questions of law," or (b) "claims involving an amount
exceeding P100,000 or 40% of the paid-up capital of the
employer, whichever is lower, or (c) evidentiary matters not
disclosed or verified in the normal course of inspection." 10
d. Additional Prescriptions. Further refinement of the power
of the Regional Directors over Labor Standards Cases was
effected by Policy Instructions No. 7. Policy Instructions No. 7
declared that a Regional Director could exercise jurisdiction
over labor standards controversies except in those cases
(1) where questions of law are involved as determined by the
Regional Director; 11
(2) where the amount involved exceeds P100,000 or over 40%
of the equity of the employer, whichever is lower;
(3) where evidentiary matters not disclosed or verified in the
normal course of inspection are required; or
(4) where there is no more employer-employee relationship
p. 12
e. Later Rules.
(1) PD 1367. Presidential Decree No. 1367 confirmed the
jurisdiction of Labor Arbiters over "cases arising from
employer-employee relations duly indorsed (or "certified") by
the Regional Directors." 13
(2) Policy Instructions No. 37. Policy Instructions No. 37,
issued on October 7, 1978 in connection with PD 1391,

provided that "cases, involving violation of labor standards

laws where employer-employee relationship still exists shall be
assigned to the Labor Arbiters where: (a) intricate questions of
law are involved; or (b) evidentiary matters not disclosed or
verified in the normal course of inspection by labor regulations
officers are required for their proper disposition." 14 It declared,
too, that the so-called "conciliable cases" theretofore under the
jurisdiction of the defunct Conciliation Section for purposes of
conciliation or amicable settlement, became immediately
assignable to the Arbitration Branch for joint conciliation and
compulsory arbitration. 15
(3) PD 1691. PD 1691 Further amended Article 127
(renumbered 128) by the addition of a proviso relative to the
situation referred to in Policy Instructions Numbered 7 and
37, supra, i.e., where the employer contests the findings of
labor regulations officers, viz.: 16
xxx xxx xxx
(b) The Minister of Labor or his duly authorized representative
shall have the power to order and administer, after due notice
and hearing, compliance with the labor standard provisions of
this code based on the findings of labor regulation officers or
industrial safety engineers made in the course of inspection,
and to issue writs of execution to the appropriate authority for
the enforcement of their order, except in cases where the
employer contests the findings of the labor regulation officer
and raises issues which cannot be resolved without
considering evidentiary matters that are not verifiable in the
normal course of inspection.
f. Restatement of Power of Secretary of Laboror
Representative Prior to EO 111. In light of the laws and
rules just cited, and the pronouncement in Policy Instructions
No. 7 that labor standards cases had been taken from

106
thearbitration system and placed under the enforcement
system to the end that "the worker need not litigate to get what
legally belongs to him," the fact of the matter is that the power
of Regional Directors over labor standards cases prior to EO
111 consisted merely of the enforcement of UNCONTESTED
MONEY CLAIMS OF PERSONS STILL EMPLOYED, i.e.,
money claims of persons arising from violations of labor
standards provisions of the Labor Code (or other statute)
discovered by labor regulations officers in the course of
normal inspection, where the employment relationship still
existed, or the employer did not contest or otherwise raise any
issue respecting the findings of said labor regulations officers.
(1) No adjudicatory power. Indeed, no adjudicative power
as that possessed by Labor Arbiters was ever reposed in the
Regional Director, in the sense of trying and deciding (or
hearing and determining) legal controversies or justiciable
causes involving labor standards laws. The Regional Director
actually did not have the power or faculty known as
"jurisdiction," vested in a judge, for instance, or a labor arbiter,
i.e., to receive evidence adduced by parties involved in a labor
standards controversy, determine on the basis thereof the
factual issues, and apply the law to the facts thus deemed
established, in order that the controversy or litigation might be
authoritatively resolved. He did not have the power to resolve
controversies (understood in the popular sense, as clashes of
opposing views). He merely had functions that can only be
described as ministerial. He had visitorial power, as
representative of the Minister or Secretary of Labor, to cause
inspection of establishments to ascertain observance of labor
standards provisions, and in the event of discovered violations
thereof, to require compliance therewith if the employer
admitted the infractions; but if it should appear, at the hearing
required to be held after discovery of the infractions, that a
controversy existed, i.e., the employer was not accepting but
was on the contrary contesting said officers' findings, or that

no employment relationship existed any longer, the Regional

Director himself could not try and decide the case but had to
refer or certify it to the appropriate Labor Arbiter for hearing
and judgment. There was, in fine, no sharing by the Regional
Director of the original and exclusive jurisdiction reposed by
law in Labor Arbiters even with respect to money claims
arising from alleged breach of labor standards provisions of
the Labor Code.
3. Relevant Jurisprudence. It was in this sense of the
regional Director's lack of adjudicatory authority, or the power
of compulsory arbitration that the law was applied
in Zambales Base Metals v. Minister of Labor, 146 SCRA 50
(Nov. 26,1986), concerning money claims 17 arising from
alleged violations of labor standards provisions not discovered
in the course of normal inspection, Oreshoot Mining Co. v.
Arellano, 156 SCRA 500 (Dec. 14, 1987), involving, among
others, employees whose employment had been
terminated, 18 and Ong v. Parel, 156 SCRA 768 (Dec. 21,
1987), in which the employer inter alia disputed the adequacy
of the evidentiary foundation (employees' affidavits) of the
findings of the labor standards inspectors. Noteworthy is that,
as observed in Ong v. Parel, the Solicitor General had taken
the position (as late as January, 1987) that the respondent
Regional Director was "not empowered to adjudicate money
claims because such authority is reposed in the Labor Arbiter
and the National Labor Relations Commission as provided
under Art. 127 of the same Code, as amended ... (and) that
the visitorial and enforcement powers of the public respondent
under Art. 128 of the Labor Code are limited to awards not
exceeding P100,000.00 pursuant to MOLE Policy Instruction
No. 7." 19
4. Amendments Under EO 111. Another amendment of
paragraph (b) of Article 128 of the Labor Code was made by
Executive Order No. 111 which took effect, as aforestated, on

107
March 3, 1987. The amendment consisted merely in the
intercalation of two (2) clauses, to wit: (a) "The provisions of
article 217 of this code to the contrary notwithstanding and in
cases where the relationship of employer-employee still
exists," and (b) "and other labor legislation." As thus
amended, 20 paragraph (b) Article 128 now reads:
(b) The provisions of Article 217 of this Code to
the contrary notwithstanding and in cases
where the relationship of employer-employee
still exists, the Minister of Labor and
Employment or his duly authorized
representatives shall have the power to order
and administer, after due notice and hearing,
compliance with the labor standards provisions
of this Code and other labor Legislation based
on the findings of labor regulations officers or
industry safety engineers made in the course of
inspection, and to issue writs of execution to the
appropriate authority for the enforcement of
their orders, except in cases where the
employer contests the findings of the labor
regulations officer and raises issues which
cannot be resolved without considering
evidentiary matters that are not verifiable in the
normal course of inspection.
5. Actual Effect of EO 111. According to the Solicitor
General, Executive Order No. 111 was promulgated precisely
to revise the law as pronounced and applied in the Zambales
Base Metals decision. 21 If this be so the formulation of the
executive order falls short of the purpose, and is, in light of the
prior state of the law, inefficacious to bring about the intended
revision.

The insertion of the clause, "where the relationship of

employer-employee still exists," to qualify the power of the
Minister (now Secretary) of Labor and Employment or his duly
authorized representatives-the necessary implication being
that where the employment relation no longer existed, said
Minister (Secretary) or his representatives had no such power
was quite unnecessary for in Policy Instructions Numbered 6,
7 and 37, supra, it was explicity acknowledged that these
officials really had no jurisdiction over cases where the
relationship of employer and employee no longer existed.
The inclusion of the phrase, "and other labor legislation," was
also unnecessary for it is obvious that labor standards
provisions may be found in the Labor Code as well as in other
statutes. In any event, the phrase did not affect the subject of
jurisdiction of Regional Directors.
Neither does the intercalation of the phrase, "the provisions of
Article 217 of this Code to the contrary notwithstanding," work
a change in the existing law. For even before the effectivity of
EO 111 and notwithstanding that under said Article 217
Labor Arbiters had exclusive original jurisdiction over cases ...
(and all) money claims of workers involving non-payment or
underpayment of wages, overtime or premium compensation,
maternity or service incentive leave, separation pay and other
money claims arising from employer-employee relations,
except claims for employee's compensation, social security
and medicare benefits-the Minister (Secretary) of Labor or his
duly authorized representatives already had the power (albeit
not truly adjudicative)-where the employer-employee
relationship still existed
... to order and administer, after due notice and
hearing, compliance with the labor standards
provisions of this code based on the findings of
labor regulation officers or industrial safety

108
engineers made in the course of inspection, and
to issue writs of execution to the appropriate
authority for the enforcement of their order,
except in cases where the employer contests
the findings of the labor regulation officer and
raises issues which cannot be resolved without
considering evidentiary matters that are not
verifiable in the normal course of inspection.

To recapitulate, under EO 111, the Regional Directors, in

representation of the Secretary of Labor and
notwithstanding the grant of exclusive original jurisdiction to
Labor Arbiters by Article 217 of the Labor Code, as amended
have power to hear cases involving violations of labor
standards provisions of the Labor Code or other legislation
discovered in the course of normal inspection, and order
compliance therewith, provided that:

In other words, even without the qualifying phrase, "the

provisions of Article 217 of this Code to the contrary
notwithstanding," the Secretary of Labor or his duly authorized
representatives already "shared" in some measure the
jurisdiction of Labor Arbiters to order observance of labor laws
denominated exclusive and original in said Article 217 in
that in UNCONTESTED MONEY CLAIMS OF PERSONS
STILL EMPLOYED, Regional Directors had power to "order
and administer ... compliance with the labor standards
provisions ... and to issue writs of execution to the appropriate
authority for the enforcement of their order." The principle has
not been changed. Even under EO 111 no other aspect of the
Labor Arbiter's jurisdiction may be deemed to be shared by the
Secretary or his representatives, in view of the retention of the
provisos requiring (1) the existence of the employment
relationship and (2) the absence of a contest or issue raised
by the employer anent the findings of the labor regulations
officers. Whether under EO 111 or the prior law, therefore, the
Secretary of Labor or his representatives could,
notwithstanding the exclusive original jurisdiction conferred on
Labor Arbiters, order compliance with the legal provisions
governing wages, hours of employment and other terms of
employment, found to have been violated in the normal course
of inspection, provided that (1) the employment relationship
still existed and (2) the case was uncontested, i.e., the
employer did not contest or raise any issue relative to the
findings of the labor standards officers.

1) the alleged violations of the employer involve persons who

are still his employees, i.e., not dismissed: and
2) the employer does not contest the findings of the labor
regulations officer or raise issues which cannot be resolved
without considering evidentiary matters that are not verifiable
in the normal course of inspection.
These propositions relative to uncontested cases are reflected
in Rule III of the Rules Implementing Executive Order 111
governing the "Endorsement of Cases to the National Labor
Relations Commission," viz.:
Section 1. Contested Cases.
a) In cases where the employer contests the
findings of the Labor Standards and Welfare
Officers and the issues cannot be resolved
without considering evidentiary matters that are
not verifiable in the normal course of inspection,
the Regional Director shall endorse such case
to the appropriate Arbitration Branch of the
National Labor Relations Commission.
b) The employer shall raise such objections
during the hearing of the case or at any time
after receipt of the notice of inspection results.

109
The issue of whether or not the case shall be
endorsed to the NLRC shall be resolved by the
Regional Director in the final disposition of the
case.
Section 2. Labor Standards and Welfare
Officers (LSWOSs) as witnessesIn cases that
have been endorsed to the NLRC, the
(LSWOSs) who participated in the investigation
shall make themselves available as witnesses
in the proceedings before the Labor Arbiter
concerned.
It may finally be observed that the hearing to be conducted by
the Regional Director is limited to a determination of whether
or not (1) the employment relationship still exists, and/or (2)
the employer accepts the findings of the (LSWOSs) and raises
no issues which cannot be resolved without considering
evidentiary matters that are not verifiable in the normal course
of inspection. In the affirmative case, the Regional Director
may properly order compliance with the legal provisions
violated and issue writs of execution to the appropriate
authority for the enforcement of this order; otherwise, the
Regional Director ceases to have competence to take
cognizance of and decide the case but must refer or certify it
to the Labor Arbiter for hearing and judgment.
6. Application of the Law to Cases at Bar. In G.R. No.
82805 (Briad Agro Development Corporation v. de la Serna),
the employer refused to present its records for inspection by
the Regional Office. This may be deemed a waiver of the right
to contest the conclusions of the Labor Inspectors drawn from
the evidence and records at hand. Under Executive Order 111,
which is applicable since the violations of labor standards took
place after its effectivity, it was within the authority of the
Regional Director to order compliance with the labor standards

statutes, and to issue a writ of execution to the appropriate

authority to enforce his order.
In G.R. No. 83255 (L.M. Camus Engineering Corporation v.
Secretary of Labor), the employer similarly refused to produce
its relevant records, despite several requests therefor by the
Regional Office. Its refusal may be regarded as a waiver of the
right to contest the Director's findings made on the basis of the
records and evidence available, including the fact that the
employer had impliedly acknowledged the imputed infractions
of labor standards when it made payments on account thereof
to several of its employees by way of amicable settlement.
Under the law prior to Executive Order 111, the Regional
Director had the power, in cases where the employment
relationship still existed, to order compliance with labor
standards and issue a writ of execution to the appropriate
authorities for the enforcement of his awards. In any event,
said Executive Order, as a "curative statute ... has
retrospective application to a pending proceeding." 22
I suggest that in both cases, even without the sanction of
Executive Order 111, which neither enlarged nor otherwise
altered the authority of the Secretary of Labor and the
Regional Directors as regards labor standards cases, the
assailed actions of said officials may be sustained as properly
within the powers vested in them by the law in force before the
effectivity of said enactment. Upon this proposition, the
dismissal of both petitions is entirely in order.
7. Republic Act No. 6715.What in fact conferred upon
Regional Directors adjudicative power in the true sense of the
term, i.e., the power take cognizance of, receive evidence on
and determine legal controversies brought before them, is
Republic Act No. 6715, signed into law on March 2, 1988 and
effective "fifteen (15) days after its publication in the Official

110
Gazette or in at least two (2) national newspapers of general
circulation, whichever comes earlier."

days from the submission of the last pleading

required or allowed under its rules.

a. Amendment of Article 129.RA 6715 amended Article 129

of the Labor Code to read as follows:

xxx xxx xxx

ART. 129. Recovery of wages, simple money

claims and other benefits.Upon complaint of
any interested party, the Regional Director of
the Department of Labor and Employment or
any of the duly authorized hearing officers of
the Department is empowered, through
summary proceeding and after due notice, to
hear and decide any matter involving the
recovery of wages and other monetary claims
and benefits, including legal interest, owing to
an employee or person employed in domestic
or household service or househelper under this
code, arising from employer-employee
relations;Provided, That such complaint does
not include a claim for reinstatement: Provided,
further, That the aggregate money claims of
each employee or househelper do not exceed
five thousand pesos (P5,000.00). The Regional
Director or hearing officer shall decide or
resolve the complaint within thirty (30) calendar
days from the date of the filing of the same. ...
Any decision or resolution of the Regional
Director or hearing officer pursuant to this
provision may be appealed on the same
grounds provided in Article 223 of this Code,
within five (5) calendar days from receipt of a
copy of said decision or resolution, to the
National Labor Relations Commission which
shall resolve the appeal within ten (10) calendar

b. Amendment of Article 217. Amended by RA 6715, too,

was Article 217 of the same Code, to read as follows:
ART. 217. Jurisdiction of Labor Arbiters and the
Commission.-Except as otherwise provided
under this code, the Labor Arbiters shall have
original and exclusive jurisdiction to hear and
decide, within thirty (30) calendar days after the
submission of the case by the parties for
decision without extension, even in the absence
of stenographic notes, the following cases
involving all workers, whether agricultural or
non-agricultural:
(1) Unfair labor practice cases;
(2) Termination disputes;
(3) If accompanied with a claim of
reinstatement, those cases that workers may
file involving wages, rates of pay, hours of work
and other terms and conditions of employment;
(4) Claims for actual, moral, exemplary and
other forms of damages arising from the
employer-employee relation;
(5) Cases arising from any violation of Article
264 of this Code, including questions involving
the legality of strikes and lockouts; and

111
(6) Except claims for employees compensation,
social security, medicare and maternity benefits,
all other claims arising from employer-employee
relations, including those of persons in domestic
or household service, involving an amount
exceeding five thousand pesos (P5,000.00),
whether or not accompanied with a claim for
reinstatement.
xxx xxx xxx
c. Requisites for Exercise of Jurisdiction by Regional Director,
etc.Quite clearly, under the provisions of said Act, Regional
Directors and other hearing officers of the Department of Labor
(aside from the Labor Arbiters) have real jurisdiction-i.e., they
may try and decide, or hear and determine-any claim brought
before them for recovery of wages and other monetary claims
and benefits, including legal interest, if the following requisites
concur, to wit:
1) the claim is presented by an employee or person employed
in domestic or household service, or househelper under the
Code;
2) the claimant, no longer being employed, does not seek
reinstatement; and

FIRST DIVISION
G.R. No. 80593 December 18, 1989
PHILIPPINE NATIONAL BANK, petitioner,
vs.
TERESITA CRUZ, JOSE AGRIPINO, BERNARDO BAUZON,
LUCRECIA BILBAO, MA. LUISA CABRERA, FRANCIS
BAACLO GUADALUPE CAMACHO, LUZ DE LEON, MIKE
VILLAVERDE, NEPOMUCENO MEDINA, EDGARDO
MENDOZA, JENNIFER VELEZ, AMELIA MEDINA,
EDUARDO ESPEJO and RICARDO BATTO, respondents.
The Chief Legal Officer for petitioner.
Romualdo C. Delos Santos for respondents.

GANCAYCO, J.:
The focus of the instant petition for certiorari is the application
of Article 110 of the Labor Code. The said article provides that
workers shall enjoy first preference with regard to wages due
them in cases of bankruptcy or liquidation of an employer's
business.

3) the aggregate money claim of the employee or househelper

does not exceed five thousand pesos (P5,000.00).

The antecedent facts of the case are as follows:

d. When Labor Arbiter has exclusive jurisdiction. Where

these three (3) requisites do not co-exist, the Labor Arbiters
have exclusive original jurisdiction over all claims arising from
employer-employee relations, other than those for employees'
compensation, social security, medicare and maternity
benefits.

Sometime in 1980 Aggregate Mining Exponents (AMEX) laidoff about seventy percent (70%) of its employees because it
was experiencing business reverses. The retained employees
constituting thirty percent (30%) of the work force however,
were not paid their wages. This non-payment of salaries went
on until July 1982 when AMEX completely ceased operations
and instead entered into an operating agreement with T.M.

112
San Andres Development Corporation whereby the latter
would be leasing the equipment and machineries of AMEX.
The unpaid employees sought redress from the Labor
Arbiter 1 who, on August 27,1986 rendered a decision finding
their claim valid and meritorious. The dispositive part of the
said decision, reads:
WHEREFORE, finding the claims of
complainants for payment of unpaid wages and
separation pay to be valid and meritorious,
respondents Aggregate Mining Exponent and its
president Luis Tirso Revilla should, as they are
hereby ordered to pay the same to said
complainants in the following amounts:

Rate

Separation Pay

Backwages

P1,300.00

P5,200.00

P6,174.96

1,900.00

8,550.00

11,712.85

2,300.00

8,050.00

19,247.00

113

2,700.00

16,200.00

23,485.70

740.00

740.00

4,287.66

1,800.00

2,700.00

5,004.35

740.00

740.00

6,822.81

3,500.00

12,550.00

32,986.90

970.00

1,940.00

234.10

1,300.00

3,900.00

3,227.15

3,000.00

10,500.00

9,874.70

1,300.00

3,250.00

3,110.85

83,360.00

136,092.03

1,500.00

4,500.00

4,793.80

1,200.00

3,000.00

4,287.10

920.00

1,840.00

832.10

in the total amount of P219,452.03. To properly

effectuate the payment of the same, the necessary
arrangement should be made between respondents
Amex and T.M. San Andres Development Corp. and
Philippine National Bank (PNB) on their respective
role and participation herein. For should the principal
respondent be unable to satisfy these Awards, the
same can be satisfied from the proceeds or fruits of its
machineries and equipment being operated by
respondent T.M. San Andres Dev. Corp. either by
operating agreement with respondent Amex or thru
lease of the same from PNB.

114
To obviate any further differences between
complainants and their counsel to the latter's attorney's
fees which seems to be the cause of their earlier
misunderstanding, as can be gleaned from the
Charging Lien filed by said counsel, respondents are,
moreover, ordered to segregate and pay the same
directly to said counsel, the amount of which is to be
computed pursuant to their agreement on July 14,
1983 (Annex A of Position to Enter Attorney's Charging
Lien in the Record of the Case). 2
AMEX and its President, Tirso Revilla did not appeal from this
decision. But PNB, in its capacity as mortgagee-creditor of
AMEX interposed an appeal with the respondent Commission,
not being satisfied with the outcome of the case. The appeal
was primarily based on the allegation that the workers' lien
covers unpaid wages only and not the termination or
severance pay which the workers likewise claimed they were
entitled to. In a resolution 3 dated October 27, 1987, the
National Labor Relations Commission affirmed the decision
appealed from. Hence the instant petition filed by the petitioner
bank based on the following grounds:
I. ARTICLE 110 OF THE LABOR CODE MUST BE
READ IN RELATION TO ARTICLES 2241, 2242, 2243,
2244 AND 2245 OF THE CIVIL CODE CONCERNING
THE CLASSIFICATION, CONCURRENCE AND
PREFERENCE OF CREDITS.
II. ARTICLE 110 OF THE LABOR CODE DOES NOT
PURPORT TO CREATE A LIEN IN FAVOR OF
WORKERS OR EMPLOYEES FOR UNPAID WAGES
EITHER UPON ALL OF THE PROPERTIES OR UPON
ANY PARTICULAR PROPERTY OWNED BY THEIR
EMPLOYER. 4

The petition is devoid of merit.

At the outset, petitioner PNB did not question the validity of the
workers' claim for unpaid wages with respect to the mortgaged
properties of AMEX, provided that the same be limited to the
unpaid wages, and to the exclusion of termination pay. In the
instant petition however, PNB starts off with the question of
whether or not the workers' lien take precedence over any
other claim considering that this Court has ruled otherwise
in Republic vs. Peralta. 5
This Court cannot allow the petitioner to alter its stance at this
stage inasmuch as it is deemed to have acquiesced in the
decision of the labor arbiter concerning payment of unpaid
wages. The records reveal that the petitioner failed to question
the same on appeal. Hence, it is now barred from claiming that
the workers' lien applies only to the products of their labor and
not to other properties of the employer which are encumbered
by mortgage contracts or otherwise.
Notwithstanding the foregoing, an attempt on the part of the
petitioner to seek relief from that portion of the decision would
still be in vain.
Article 110 of the Labor Code provides that:
Art. 110. Worker preference in case of bankruptcy. In
the event of bankruptcy or liquidation of an employer's
business - his workers shall enjoy first preference as
regards their unpaid wages and other monetary claims,
any provision of law to the contrary notwithstanding.
Such unpaid wages and monetary claims, shall be paid
in full before claims of the government and other
creditors may be paid.6

115
This Court must uphold the preference accorded to the private
respondents in view of the provisions of Article 110 of the
Labor Code which are clear and which admit of no other
interpretation. The phrase "any provision of law to the contrary
notwithstanding" indicates that such preference shall prevail
despite the order set forth in Articles 2241 to 2245 of the Civil
Code. 6-a No exceptions were provided under the said article,
henceforth, none shall be considered. Furthermore, the Labor
Code was signed into Law decades after the Civil Code took
effect.
In Herman vs. Radio Corporation of the Philippines, 7 this
Court declared that whenever two statutes of different dates
and of contrary tenor are of equal theoretical application to a
particular case, the statute of later date must prevail being a
later expression of legislative will. Applying the aforecited case
in the instant petition, the Civil Code provisions cited by the
petitioner must yield to Article 110 of the Labor Code.
Moreover, Our pronouncement in A. C. Ransom Labor UnionCCLU vs. NLRC, 8 reinforces the above-mentioned
interpretation where this Court, speaking through Associate
Justice Melencio-Herrera, explicitly stated that "(t)he worker
preference applies even if the employer's properties are
encumbered by means of a mortgage contract ... So that,
when (the) machinery and equipment of RANSOM were sold
to Revelations Manufacturing Corporation for P2M in 1975, the
right of the 22 laborers to be paid from the proceeds should
have been recognized ... " 9
Reliance by the petitioners on Republic vs. Peralta is without
basis. The said case involved a question of workers'
preference as against the tax claims of the State. In the said
case the Court held that the State must prevail in that instance
since "it has been frequently said that taxes are the very
lifeblood of government. The effective collection of taxes is a

task of highest importance for the sovereign. It is critical

indeed for its own survival ." 10
Nevertheless, under Article 110 of the Labor Code as
amended, the unpaid wages and other monetary claims of
workers should be paid in full before the claims of the
Government and other creditors. Thus not even tax claims
could have preference over the workers' claim.
Consistent with the ruling of this Court in Volkschel Labor
Union vs. Bureau of Labor Relations, 11 this court adopts the
doctrine that "(i)n the implementation and interpretation of the
provisions of the Labor Code and its implementing regulations,
the workingman's welfare should be the primordial and
paramount consideration." 12 Bearing this in mind, this Court
must reiterate the dictum laid down in A.C. Ransom that the
conflict between Article 110 of the Labor Code and Article 2241
to 2245 of the Civil Code must be resolved in favor of the
former. A contrary ruling would defeat the purpose for which
Article 110 was intended; that is, for the protection of the
working class, pursuant to the never-ending quest for social
justice.
Petitioner next advances the theory that "even if the worker's
lien applies in the instant case, the same should cover only
unpaid wages excluding termination or severance pay. 13 To
support this contention, petitioner cites Section 7, Rule 1, Book
VI of the Rules and Regulations implementing the Labor Code
which provides that:
The just causes for terminating the services of an
employee shall be those provided under article 283 of
the Code. The separation from work of an employee for
a just cause does not entitle him to termination pay
provided in the Code, emphasis supplied)

116
Based on that premise, petitioner contends that the claim for
termination pay should not be enforced against AMEX
properties mortgaged to petitioner PNB because Article 110 of
the Labor Code refers only to "wages due them for services
rendered during the period prior to bankruptcy or
liquidation." 14 Citing serious financial losses as the basis for
the termination of the private respondents, petitioner alleges
that the employees are not entitled to the termination pay
which they claim.
This contention is, again, bereft of merit.
The respondent Commission noted that "AMEX failed to
adduce convincing evidence to prove that the financial
reverses were indeed serious." 15 After a careful study of the
records of the case, this Court finds no reason to alter the
findings of the respondent Commission.
In Garcia vs. National Labor Relations Commission , 16 it was
held that "it is essentially required that the alleged losses in
business operations must be proved. " 17 This policy was
adopted to obviate the possibility of an employer fabricating
business reverses in order to ease out employees for no
apparent reason. Hence, no departure shall be made by this
Court from the ruling in Philippine Commercial and Industrial
Bank vs. National Mines and Allied Workers Union (NAMAWUMIF) 18where it was categorically stated that the term "wages"
includes not only remunerations or earnings payable by an
employer for services rendered or to be rendered, but also
covers all benefits of the employees under a Collective
Bargaining Agreement like severance pay, educational
allowance, accrued vacation leave earned but not enjoyed, as
well as workmen's compensation awards and unpaid salaries
for services rendered. All of these benefits fall under the term
"wages" which enjoy first preference over all other claims
against the employer. 19

Furthermore, in Peralta, this Court held that for purposes of

the application of Article 110, "termination pay is reasonably
regarded as forming part of the remuneration or other money
benefits accruing to employees or workers by reason of their
having previously rendered services..." 20 Hence, separation
pay must be considered as part of remuneration for services
rendered or to be rendered.
Indeed Article 110 of the Labor Code, as amended, aforecited,
now provides that the workers' preference covers not only
unpaid wages but also other monetary claims.
The respondent Commission was, therefore, not in error when
it awarded the termination pay claimed by the private
respondents. As far as the latter are concerned, the
termination pay which they so rightfully claim is an additional
remuneration for having rendered services to their employer
for a certain period of time. Noteworthy also is the relationship
between termination pay and services rendered by an
employee, that in computing the amount to be given to an
employee as termination pay, the length of service of such
employee is taken into consideration such that the former must
be considered as part and parcel of wages. Under these
circumstances then, this Court holds that the termination or
severance pay awarded by the respondent Commission to the
private respondents is proper and should be sustained.
Lastly, it must be noted that the amount claimed by petitioner
PNB for the satisfaction of the obligations of AMEX is relatively
insubstantial and is not significant enough as to drain its
coffers. By contrast, that same amount could mean
subsistence or starvation for the workingman. Quoting further
from Philippine Commercial and Industrial Bank, this Court
supports the equitable principle that "it is but humane and
partakes of the divine that labor, as human beings, must be
treated over and above chattels, machineries and other kinds

117
of properties and the interests of the employer who can afford
and survive the hardships of life better than their workers.
Universal sense of human justice, not to speak of our specific
social justice and protection to labor constitutional injunctions
dictate the preferential lien that the above provision accord to
labor. 21 In line with this policy, measures must be undertaken
to ensure that such constitutional mandate on protection to
labor is not rendered meaningless by an erroneous
interpretation of the applicable laws.
WHEREFORE, premises considered, the petition is hereby
DISMISSED for lack of merit. No costs.
SO ORDERED.
Narvasa, Grio-Aquino and Medialdea, JJ, concur.
Separate Opinions

before). There is no question now that under Article 110 of the

Labor Code as reworded the claims of the laborer prevail over
those of all others, including the Government itself, in the
interest of social justice. It is for me a cause for deep elation.
EN BANC
G.R. No. 87119

April 16, 1991

HON. GEMILIANO C. LOPEZ, JR., in his capacity as City

Mayor of Manila, petitioner,
vs.
THE CIVIL SERVICE COMMISSION, HON. DANILO R.
LACUNA, in his capacity as Vice-Mayor and Presiding
Officer of the City Council of Manila, and THE CITY
COUNCIL OF MANILA, respondents.
The City Legal Officer for petitioner.
Lacuna, Bello & Associates Law Offices for Danilo B. Lacuna.

CRUZ, J.,concurring:
I can perhaps be allowed a little immodesty in taking this
occasion to point out that in Republic of the Philippines v.
Peralta, cited in the ponencia, I was the only one who held the
view that the claims of the laborers should take precedence
over those of even the Government under Article 110 of the
Labor Code.
Interpreting the said provision, I submitted that it should be
read according to its literal import and obvious philosophy, to
favor and protect the laborer pursuant to the social justice
policy. None of my thirteen colleagues then agreed with me.
With the amendment of the article, evidently to correct the
meaning given to it in Peralta, all doubt has been removed as
to its original intention (which I feel was quite clear even

SARMIENTO, J.:
The only question in this petition, denominated as a "direct
appeal under Article VIII, Section 5 (2) (e), of the Constitution
and Section 9(3), of Batas Blg. 129," is whether the City
Council of Manila still has the power to appoint Council officers
and employees under Republic Act No. 409, otherwise known
as the Charter of the City of Manila, or whether the power is
now vested with the City Mayor pursuant to Republic Act No.
5185, the Decentralization Law, and Batas Blg. 337, the Local
Government Code. The facts are as follows:
On September 13, 1988, the Vice-Mayor of Manila and
Presiding Officer of the City Council of Manila, the Hon. Danilo

118
R. Lacuna, submitted to the Civil Service Commission, through
the Regional Director of the National Capital Region, the
appointments of nineteen officers and employees in the
Executive Staff of the Office of the Presiding Officer, City
Council of Manila, pursuant to the provisions of Section 15, of
said Republic Act No. 409, as amended, which reads:

Council and the signatory of individual appointments

thus issued is the City Vice-Mayor of Manila.4
As we stated at the outset, the issue is whether or not Section
15, supra, of the Charter of the City of Manila has been
repealed, and as a result, the City Council can no longer
tender appointments to Council positions.

Sec. 15. . . . .
xxx

xxx

xxx

. . . The Board shall appoint and the Vice Mayor shall

sign all appointments of the other employees of the
Board.1
The City Budget Officer of Manila later sought from the
Personnel Bureau of the Mayor's office "comment and/or
recommendation" on whether the payroll of the newly
appointed employees of the City Council may be paid on the
basis of appointments signed by the Vice-Mayor.2 The
Personnel Bureau then forwarded the query to the City Legal
Officer who, in a 3rd endorsement dated September 19,
1988,3 rendered an opinion that the proper appointing officer is
the City Mayor and not the City Council. This opinion was
transmitted by the Secretary to the City Mayor to the
Commission.
On February 1, 1989, the Commission promulgated Resolution
No. 89-075, and held that contrary to the opinion of the City
Legal Officer, it is the City Council to which the appointing
power is vested. The dispositive portion thereof is as follows:
WHEREFORE, foregoing premises considered, the
Commission resolved to rule, as it hereby rules that the
proper appointing authority of the officers and
employees of the City Council of Manila is the City

As we also mentioned at the outset, this petition has been

brought by way of a "direct appeal" from the resolution of the
Civil Service Commission pursuant supposedly to the
Constitution and Batas Blg. 129. In this connection, we have
held that no appeal lies from the decisions of the Civil Service
Commission, and that parties aggrieved thereby may proceed
to this Court alone on certiorari under Rule 65 of the Rules of
Court, within thirty days from receipt of a copy thereof,
pursuant to Section 7, Article IX, of the Constitution. We quote:
Sec. 7. Unless otherwise provided by this Constitution
or by law, any decision, order, or ruling of each
Commission may be brought to the Supreme Court on
certiorari by the aggrieved party within thirty days from
receipt of a copy thereof.5
As we held, the Civil Service Commission, under the
Constitution, is the single arbiter of all contests relating to the
civil service and as such, its judgments are unappeasable and
subject only to this Court's certiorari jurisdiction.6
The petitioner's omission notwithstanding, we are nevertheless
accepting the petition and because of the important public
interest it involves, we are considering it as a petition
for certiorari under Rule 65, considering further that it was filed
within the thirty-day period.7

119
As the petitioner contends, Section 15 of Republic Act No. 409
as amended has supposedly been repealed by Republic Act
No. 5185, specifically, Section 4 thereof, which we quote, in
part:
xxx

xxx

xxx

The City Assessor, City Agriculturist, City Chief of

Police and City Chief of Fire Department and other
heads of offices entirely paid out of city funds and their
respective assistants or deputies shall, subject to civil
service law, rules and regulations, be appointed by the
City Mayor: Provided, however, That this section shall
not apply to Judges, Auditors, Fiscals, City
Superintendents of Schools, Supervisors, Principals,
City Treasurers, City Health Officers and City
Engineers.
xxx

xxx

xxx

All other employees, except teachers, paid out of

provincial, city or municipal general funds, road and
bridge funds, school funds, and other local funds, shall,
subject to civil service law, rules and regulations, be
appointed by the Provincial Governor, City or Municipal
Mayor upon recommendation of the office head
concerned. . . .8

xxx

xxx

xxx

(h) Appoint, in accordance with civil service law, rules

and regulations, all officers and employees of the city,
whose appointments are not otherwise provided in this
Code;9
There is no doubt that Republic Act No. 409, which provides
specifically for the organization of the Government of the City
of Manila, is a special law, and whereas Republic Act No. 5185
and Batas Blg. 337, which apply to municipal governments in
general, are general laws. As the Solicitor General points out,
and we agree with him, it is a canon of statutory construction
that a special law prevails over a general law regardless of
their dates of passage and the special is to be considered
as remaining an exception to the general.10
So also, every effort must be exerted to avoid a conflict
between statutes. If reasonable construction is possible, the
laws must be reconciled in that manner.
Repeals of laws by implication moreover are not favored, and
the mere repugnancy between two statutes should be very
clear to warrant the court in holding that the later in time
repeals the other.11
Why a special law prevails over a general law has been put by
the Court as follows:

and by Batas Blg. 337, we likewise quote:

xxx
Sec. 171. Chief Executive; Compensation, Powers, and
Duties.
xxx
(2) The city mayor shall:

xxx

xxx

xxx

xxx

. . . The Legislature consider and make provision for all

the circumstances of the particular case.1wphi1 The
Legislature having specially considered all of the facts
and circumstances in the particular case in granting a
special charter, it will not be considered that the

120
Legislature, by adopting a general law containing
provisions repugnant to the provisions of the charter,
and without making any mention of its intention to
amend or modify the charter, intended to amend,
repeal, or modify the special act. (Lewis vs. Cook
County, 74 I11. App., 151; Philippine Railway Co. vs.
Nolting 34 Phil., 401.)12
In one case, we held that Republic Act No. 5185 did not divest
the Mayor of Manila of his power under the Charter of the City
of Manila to approve the city budget.13
We also agree with the Civil Service Commission that the
provisions of Republic Act No. 5185, giving mayors the power
to appoint all officials "entirely paid out by city funds14 and
those of Batas Blg. 337, empowering local executives with the
authority to appoint "all officers and employees of the
city,"15 were meant not to vest the city mayors per se with
comprehensive powers but rather, to underscore the transfer
of the power of appointment over local officials and employees
from the President to the local governments and to highlight
the autonomy of local governments. They were not meant,
however, to deprive the City Council of Manila for instance, its
appointing power granted by existing statute, and after all, that
arrangement is sufficient to accomplish the objectives of both
the Decentralization Act and the Local Government Code, that
is, to provide teeth to local autonomy.
In the light of an the foregoing, we do not find any grave abuse
of discretion committed by the respondent Commission.
WHEREFORE, the petition is DISMISSED. No costs.
SO ORDERED.

Fernan, C.J., Narvasa, Melencio-Herrera, Gutierrez, Jr., Cruz,

Paras, Feliciano, Gancayco, Padilla, Bidin, Grio-Aquino,
Medialdea, Regalado and Davide, Jr., JJ., concur.
FIRST DIVISION
G.R. No. L-55230 November 8, 1988
HON. RICHARD J. GORDON, in his capacity as City Mayor
of Olongapo, petitioner,
vs.
JUDGE REGINO T. VERIDIANO II and Spouses EDUARDO
and ROSALINDA YAMBAO, respondents.

CRUZ, J.:
The issue before the Court is the conflict between the Food
and Drug Administration and the mayor of Olongapo City over
the power to grant and revoke licenses for the operation of
drug stores in the said city. While conceding that the FDA
possesses such power, the mayor claims he may
nevertheless, in the exercise of his own power, prevent the
operation of drug stores previously permitted by the former.
There are two drug stores involved in this dispute, to wit, the
San Sebastian Drug Store and the Olongapo City Drug Store,
both owned by private respondent Rosalinda Yambao. 1 They
are located a few meters from each other in the same building
on Hospital Road, Olongapo City. 2 They were covered by
Mayor's Permits Nos. 1954 and 1955, respectively, issued for
the year 1980, 3 and licenses to operate issued by the FDA for
the same year. 4

121
This case arose when on March 21, 1980, at about 5:00
o'clock in the afternoon, a joint team composed of agents from
the FDA and narcotics agents from the Philippine
Constabulary conducted a "test buy" at San Sebastian Drug
Store and was sold 200 tablets of Valium 10 mg. worth
P410.00 without a doctor's prescription.. 5
A report on the operation was submitted to the petitioner, as
mayor of Olongapo City, on April 9, 1980. 6 On April 17, 1980,
he issued a letter summarily revoking Mayor's Permit No.
1954, effective April 18, 1980, "for rampant violation of R.A.
5921, otherwise known as the Pharmacy Law and R.A. 6425
or the Dangerous Drugs Act of 1972." 7 Later, when the
petitioner went to Singapore, Vice-Mayor Alfredo T. de Perio,
Jr. caused the posting of a signboard at the San Sebastian
Drug Store announcing its permanent closure. 8
Acting on the same investigation report of the "test-buy," and
after hearing, FDA Administrator Arsenio Regala, on April 25,
1980, directed the closure of the drug store for three days and
its payment of a P100.00 fine for violation of R.A. No. 3720.
He also issued a stern warning to Yambao against a repetition
of the infraction. 9 On April 29, 1980, the FDA lifted its closure
order after noting that the penalties imposed had already been
discharged and allowed the drug store to resume
operations. 10
On April 30, 1980, Yambao, through her counsel, wrote a letter
to the petitioner seeking reconsideration of the revocation of
Mayor's Permit No. 1954. 11 On May 7, 1980, having received
no reply, she and her husband filed with the Regional Trial
Court of Olongapo City a complaint for mandamus and
damages, with a prayer for a writ of preliminary injunction,
against the petitioner and Vice-Mayor de Perio. 12

On the same date, Yambao requested permission from the

FDA to exchange the locations of the San Sebastian Drug
Store and the Olongapo City Drug Store for reasons of
"business preference." 13
The request was granted. 14 But when informed of this action,
the petitioner, in a letter to the private respondent dated May
13, 1980, disapproved the transfers and suspended Mayor's
Permit No. 1955 for the Olongapo City Drug Store. 15
The Yambaos then filed on May 15, 1980, a supplemental
complaint questioning the said suspension and praying for the
issuance of a preliminary writ of prohibitory injunction. 16 On
the same day, the respondent judge issued an order directing
the maintenance of the status quo with respect to the
Olongapo City Drug Store pending resolution of the issues. 17
On May 21, 1980, the petitioner wrote the FDA requesting
reconsideration of its order of April 29, 1980, allowing
resumption of the operation of the San Sebastian Drug
Store. 18 The request was denied by the FDA in its reply dated
May 27, 1980. 19
A motion for reconsideration of the status quo order had earlier
been filed on May 1, 1980 by the petitioner. After a joint
hearing and an exchange of memoranda thereon, the
respondent judge issued an order on July 16, 1980, 20 the
dispositive portion of which read as follows:
WHEREFORE, the defendants' motion for
reconsideration of the status quo order dated May 15,
1980, is hereby DENIED and the letter of the defendant
city mayor dated April 17, 1980, for the revocation of
Mayor's Permit No. 1954 for the San Sebastian Drug
Store is declared null and void.

122
Accordingly, a writ of preliminary prohibitory injunction
is heretofore issued enjoining defendants from doing
acts directed towards the closure of the San Sebastian
Drug Store and the suspension of the Olongapo City
Drug Store both situated at Hospital Road, Olongapo
City. Further, the signboard posted at San Sebastian
Drug Store by the defendants is ordered removed in
order that the said drug store will resume its normal
business operation.
The hearing of the main petition for damages is set on
August 14, 1980, at 1:30 o'clock in the afternoon.
The petitioner's motion for reconsideration of the above stated
order was denied in an order dated September 4,
1980. 21 The petitioner thereupon came to this Court in this
petition for certiorari and prohibition with preliminary,
injunction, to challenge the aforesaid orders.
We issued a temporary restraining order against the
respondent judge on October 2 7, 1980, 22 but lifted it on
December 10, 1980, for failure of the petitioner to file his
comment on the private respondents' motion to lift the said
order and/or for issuance of a counter restraining order. 23
First, let us compare the bases of the powers and functions
respectively claimed by the FDA and the petitioner as mayor of
Olongapo City.
The task of drug inspection was originally lodged with the
Board of Pharmaceutical Examiners pursuant to Act 2762, as
amended by Act 4162. By virtue of Executive Order No. 392
dated January 1, 1951 (mandating reorganization of various
departments and agencies), this was assumed by the
Department of Health and exercised through an office in the
Bureau of Health known as the Drug Inspection Section. This

section was empowered "to authorize the opening of

pharmacies, drug stores and dispensaries, and similar
establishments after inspection by persons authorized by law."
The Food and Drug Administration was created under R.A. No.
3720 (otherwise known as the Food, Drug and Cosmetic Act),
approved on June 22, 1963, and vested with all drug
inspection functions in line with "the policy of the State to
insure safe and good quality supply of food, drug and
cosmetics, and to regulate the production, sale and traffic of
the same to protect the health of the people." Section 5 of this
Act specifically empowers it:
(e) to issue certificates of compliance with technical
requirements to serve as basis for the issuance of
license and spotcheck for compliance with regulations
regarding operation of food, drug and cosmetic
manufacturers and establishments.
For a more effective exercise of this function, the Department
of Health issued on March 5, 1968, Administrative Order No.
60, series of 1968, laying down the requirements for the
application to be filed with the FDA for authorization to operate
or establish a drug establishment. The order provides that
upon approval of the application, the FDA shall issue to the
owner or administrator of the drug store or similar
establishment a "License to Operate" which "shall be renewed
within the first 3 months of each year upon payment of the
required fees." This license contains the following reservation:
However, should during the period of issue, a violation
of any provisions of the Food, Drug and Cosmetic Act
and/or the regulations issued thereunder be committed,
this License shall be subject to suspension or
revocation.

123
When the drug addiction problem continued to aggravate, P.D.
No. 280 was promulgated on August 27, 1973, to give more
teeth to the powers of the FDA, thus:
Section 1. Any provision of law to the contrary
notwithstanding, the Food and Drug Administrator is
hereby authorized to order the closure, or suspend or
revoke the license of any drug establishment which
after administrative investigation is found guilty of
selling or dispensing drugs medicines and other similar
substances in violation of the Food, Drug and Cosmetic
Act, and Dangerous Drugs Act of 1972, or other laws
regulating the sale or dispensation of drugs, or rules
and regulations issued pursuant thereto.
Sec. 2. The administrative investigation shall be
summary in character. The owner of the drug store
shall be given an opportunity to be heard. (P.D. 280,
emphasis supplied.)
For his part, the petitioner, traces his authority to the charter of
Olongapo City, R.A. No. 4645, which inter alia empowers the
city mayor under Section 10 thereof:
k. to grant or refuse municipal licenses to operate or
permits of all classes and to revoke the same for
violation of the conditions upon which they were
granted, or if acts prohibited by law or city ordinances
are being committed under protection of such licenses
or in the premises in which the business for which the
same have been granted is carried on, or for any other
good reason of general interest.
The charter also provides, in connection with the powers of the
city health officer, that:

Sec. 6 (k). He and his representatives shall have the

power to arrest violators of health laws, ordinances,
rules and regulations and to recommend the revocation
or suspension of the permits of the different
establishments to the City Mayor for violation of health
laws, ordinances, rules and regulations. (Emphasis
supplied.)
An application to establish a drug store in Olongapo City must
be filed with the Office of the Mayor and must show that the
applicant has complied with the existing ordinances on health
and sanitation, location or zoning, fire or building, and other
local requirements. If the application is approved, the applicant
is granted what is denominated a "Mayor's Permit" providing
inter alia that it "is valid only at the place stated above and until
(date), unless sooner revoked for cause." 24
Courts of justice, when confronted with apparently conflicting
statutes, should endeavor to reconcile the same instead of
declaring outright the invalidity of one as against the other.
Such alacrity should be avoided. The wise policy is for the
judge to harmonize them if this is possible, bearing in mind
that they are equally the handiwork of the same legislature,
and so give effect to both while at the same time also
according due respect to a coordinate department of the
government. It is this policy the Court will apply in arriving at
the interpretation of the laws above-cited and the conclusions
that should follow therefrom.
A study of the said laws will show that the authorization to
operate issued by the FDA is a condition precedent to the
grant of a mayor's permit to the drug store seeking to operate
within the limits of the city. This requirement is imperative. The
power to determine if the opening of the drug store is
conformable to the national policy and the laws on the
regulation of drug sales belongs to the FDA. Hence, a permit

124
issued by the mayor to a drug store not previously cleared with
and licensed by the said agency will be a nullity.
This is not to say, however, that the issuance of the mayor's
permit is mandatory once it is shown that the FDA has
licensed the operation of the applicant drug store. This is not a
necessary consequence. For while it may appear that the
applicant has complied with the pertinent national laws and
policies, this fact alone will not signify compliance with the
particular conditions laid down by the local authorities like
zoning, building, health, sanitation, and safety regulations, and
other municipal ordinances enacted under the general welfare
clause. This compliance still has to be ascertained by the
mayor if the permit is to be issued by his office. Should he find
that the local requirements have not been observed, the mayor
must then, in the exercise of his own authority under the
charter, refuse to grant the permit sought.
The power to approve a license includes by implication,. even
if not expressly granted, the power to revoke it. By extension,
the power to revoke is limited by the authority to grant the
license, from which it is derived in the first place. Thus, if the
FDA grants a license upon its finding that the applicant drug
store has complied with the requirements of the general laws
and the implementing administrative rules and regulations, it is
only for their violation that the FDA may revoke the said
license. By the same token, having granted the permit upon
his ascertainment that the conditions thereof as applied
particularly to Olongapo City have been complied with, it is
only for the violation of such conditions that the mayor may
revoke the said permit.
Conversely, the mayor may not revoke his own permit on the
ground that the compliance with the conditions laid down and
found satisfactory by the FDA when it issued its license is in
his own view not acceptable. This very same principle also

operates on the FDA. The FDA may not revoke its license on
the ground that the conditions laid down in the mayor's permit
have been violated notwithstanding that no such finding has
been made by the mayor.
In the present case, the closure of the San Sebastian Drug
Store was ordered by the FDA for violation of its own
conditions, which it certainly had the primary power to enforce.
By revoking the mayor's permit on the same ground for which
the San Sebastian Drug Store had already been penalized by
the FDA, the mayor was in effect reversing the derision of the
latter on a matter that came under its jurisdiction. As the
infraction involved the pharmacy and drug laws which the FDA
had the direct responsibility to execute, the mayor had no
authority to interpose his own findings on the matter and
substitute them for the decision already made by the FDA.
It would have been different if the offense condoned by the
FDA was a violation of, say, a city ordinance requiring
buildings to be provided with safety devices or equipment, like
fire extinguishers. The city executive may ignore such
condonation and revoke the mayor's permit just the same. In
this situation, he would be acting properly because the
enforcement of the city ordinance is his own prerogative. In the
present case, however, the condition allegedly violated related
to a national law, not to a matter of merely local concern, and
so came under the 'jurisdiction of the FDA.
Settled is the rule that the factual findings of administrative
authorities are accorded great respect because of their
acknowledged expertise in the fields of specialization to which
they are assigned. 25 Even the courts of justice, including this
Court, are concluded by such findings in the absence of a
clear showing of a grave abuse of discretion, which is not
present in the case at bar. For all his experience in the
enforcement of city ordinances, the petitioner cannot claim the

125
superior aptitudes of the FDA in the enforcement of the
pharmacy and drug addiction laws. He should therefore also
be prepared, like the courts of justice themselves, to accept its
decisions on this matter.

In view of the above, Mayors Permit No. 1954 heretofore

issued in your name for the operation of a drug store (San
Sebastian) at the Annex Building of the Fil-Am (IYC), along
Hospital Road, this City, is REVOKED effective April 18, 1980.

The petitioner magnifies the infraction committed by the San

Sebastian Drug Store but the FDA minimizes it. According to
the FDA Administrator, Valium is not even a prohibited drug,
which is why the penalty imposed was only a 3-day closure of
the drug store and a fine of P100.00. 26 Notably, the criminal
charges filed against the private respondent for the questioned
transaction were dismissed by the fiscal's office. 27

PLEASE BE GUIDED ACCORDINGLY.

It is also worth noting that the San Sebastian Drug Store was
penalized by the FDA only after a hearing held on April 25,
1980, at which private respondent Yambao, assisted by her
lawyer-husband, appeared and testified. 28 By contrast, the
revocation of the mayor's permit was communicated to her in a
letter 29 reading simply as follows:
April 17, 1980
Rosalinda Yambao
c/o San Sebastian Drug Store
Hospital Road, Olongapo City
Madame:
Based on a report submitted by PC Major Virtus V. Gil, Chief 3
RFO, Dis. B, Task Force "Bagong Buhay," "you are rampantly
violating the provisions of Republic Act 5921 otherwise known
as the 'Pharmacy Law."
Aside from this, there is evidence that you are dispensing
regulated drugs contrary to the provisions of R.A. 6425
otherwise known as the Dangerous Drugs Act of 1972.

Very truly yours,

(SGD.) RICHARD J. GORDON
City Mayor

If only for the violation of due process which is manifest from

this letter, the mayor's arbitrary action can be annulled.
The indefinite suspension of the mayor's permit for Olongapo
City Drug Store was based on the transfer thereof to the site of
the San Sebastian Drug Store as approved by the FDA but
without permission from the petitioner. On this matter, the
Court believes that the final decision rested with the mayor.
The condition violated related more to the location in Olongapo
City of business establishments in general than to the
regulation of drug stores in particular. It therefore came under
the petitioner's jurisdiction.
The FDA would have the right to disapprove the site of the
drug store only if it would impair the health or other interests of
the customers in contravention of the national laws or policies,
as where the drug store is located in an unsanitary site. But
the local executive would have reason to object to the location,
even if approved by the FDA, where it does not conform to,
say, a zoning ordinance intended to promote the comfort and
convenience of the city residents.

126
The reason given by the petitioner in disapproving the transfer
was violation of Mayor's Permit No. 1955, which by its terms
was valid only at the place stated therein. In the letter of May
13, 1980 30 the private respondent was clearly informed that
for violation of the condition of Mayor's Permit No. 1955
granting her the of operating the Olongapo City Drug Store at
No. 1-B Fil-Am Bldg., Hospital Road, the said permit was
"hereby suspended." We find that that reason was valid
enough. The permit clearly allowed the drug store to operate in
the address given and not elsewhere. No hearing was
necessary because the transfer without the mayor's
permission is not disputed and was in fact impliedly admitted
by the private respondent.
If the private respondent wanted to transfer her drug store,
what she should have done was to secure the approval not
only of the FDA but also, and especially, of the mayor. Merely
notifying the petitioner of the change in the location of her drug
stores as allowed by the FDA was not enough. The FDA had
no authority to revoke that particular condition of the mayor's
permits indicating the sites of the two drug stores as approved
by the mayor in the light of the needs of the city. Only the
mayor could.
We assume that Mayor's Permit No. 1954 could also have
been validly suspended for the same reason (as the sites of
the two drug stores were exchanged without amendment of
their respective permits) were it not for the fact that such
permit was revoked by the petitioner on the more serious
ground of violation of the Pharmacy Law and the Dangerous
Drugs Act of 1972.
It is understood, however, that the suspension should be
deemed valid only as the two drug stores have not returned to
their original sites as specified in their respective permits.
Indefinite suspension will amount to a permanent revocation,

which will not be a commensurate penalty with the degree of

the violation being penalized.
The Court adds that denial of the request for transfer, if
properly made by the private respondents, may not be validly
denied by the judge in the absence of a clear showing that the
transfer sought will prejudice the residents of the city. As the
two drug stores are only a few meters from each other, and in
the same building, there would seem to be no reason why the
mere exchange of their locations should not be permitted.
Notably, the location of the two drug stores had previously
been approved in Mayor's Permit Nos. 1954 and 1955.
Our holding is that the petitioner acted invalidly in revoking
Mayor's Permit No. 1954 after the FDA had authorized the
resumption of operations of the San Sebastian Drug Store
following the enforcement of the penalties imposed upon it.
However, it was competent for the petitioner to suspend
Mayor's Permit No. 1955 for the transfer of the Olongapo City
Drug Store in violation of the said permit. Such suspension
should nevertheless be effective only pending the return of the
drug store to its authorized original site or the eventual
approval by the mayor of the requested transfer if found to be
warranted.
The petitioner is to be commended for his zeal in the
promotion of the campaign against drug addiction, which has
sapped the vigor and blighted the future of many of our
people, especially the youth. The legal presumption is that he
acted in good faith and was motivated only by his concern for
the residents of Olongapo City when he directed the closure of
the first drug store and the suspension of the permit of the
other drug store. It appears, though, that he may have
overreacted and was for this reason properly restrained by the
respondent judge.

127
WHEREFORE, the challenged Orders of July 6, 1980 and
September 4, 1980, are MODIFIED in the sense that the
suspension of Mayor's Permit No. 1955 shall be considered
valid but only until the San Sebastian Drug Store and the
Olongapo City Drug Store return to their original sites as
specified in the FDA licenses and the mayor's permits or until
the request for transfer, if made by the private respondents, is
approved by the petitioner. The rest of the said Orders are
AFFIRMED, with costs against the petitioner.

9 Id., pp, 24-26.

SO ORDERED.

14 Id

Narvasa (Chairman), Gancayco, Grio-Aquino and Medialdea,

JJ., concur.

15 pp. 36-37.

10 Id., p. 26.
11 Id., pp. 27-28.
12 Id., pp. 14-21.
13 Id., p. 34.

16 Id., pp. 29-33.

17 Id., p. 38.

Footnotes
1 Rollo, p. 47.
2 Ibid.
3 Id.
4 Id., P. 96.
5 Id., pp. 48,15.
6 Id.
7 Id., p. 23.
8 Id., p. 48.

18 Id., pp. 98-100.

19 Id., p. 104.
20 Id., pp. 47-54.
21 Id., P. 64.
22 Id., pp. 65-67.
23 Id., pp. 160-162.
24 Id., p. 211.
25 Tagum Doctors Enterprises v. Gregorio
Apsay, et al., G.R. No. 81188, August 30,1988;
Antonio de Leon v. Heirs of Gregorio Reyes, et

128
al., 152 SCRA 584; Liangga Bay Logging Co.,
Inc. v. Hon. Enage, et al., 152 SCRA 80;
Packaging Products Corp. v. NLRC, 152 SCRA
21 0, and the cases cited therein; Ateneo de
Manila University v. CA, 145 SCRA 100.
26 Rollo, p. 25.

EN BANC
G.R. No. L-23052

January 29, 1968

CITY OF MANILA, petitioner,

vs.
GENARO N. TEOTICO and COURT OF
APPEALS, respondents.

27 Ibid., pp. 234-242.

28 Id., p. 14.

City Fiscal Manuel T. Reyes for petitioner.

Sevilla, Daza and Associates for respondents.

29 Id., p. 23.

CONCEPCION, C.J.:

30 Id., P. 36.

Appeal by certiorari from a decision of the Court of Appeals.

On January 27, 1958, at about 8:00 p.m., Genaro N. Teotico
was at the corner of the Old Luneta and P. Burgos Avenue,
Manila, within a "loading and unloading" zone, waiting for a
jeepney to take him down town. After waiting for about five
minutes, he managed to hail a jeepney that came along to a
stop. As he stepped down from the curb to board the jeepney,
and took a few steps, he fell inside an uncovered and
unlighted catch basin or manhole on P. Burgos Avenue. Due to
the fall, his head hit the rim of the manhole breaking his
eyeglasses and causing broken pieces thereof to pierce his
left eyelid. As blood flowed therefrom, impairing his vision,
several persons came to his assistance and pulled him out of
the manhole. One of them brought Teotico to the Philippine
General Hospital, where his injuries were treated, after which
he was taken home. In addition to the lacerated wound in his
left upper eyelid, Teotico suffered contusions on the left thigh,
the left upper arm, the right leg and the upper lip apart from an
abrasion on the right infra-patella region. These injuries and
the allergic eruption caused by anti-tetanus injections
administered to him in the hospital, required further medical

129
treatment by a private practitioner who charged therefor
P1,400.00.
As a consequence of the foregoing occurrence, Teotico filed,
with the Court of First Instance of Manila, a complaint which
was, subsequently, amended for damages against the City
of Manila, its mayor, city engineer, city health officer, city
treasurer and chief of police. As stated in the decision of the
trial court, and quoted with approval by the Court of Appeals,
At the time of the incident, plaintiff was a practicing
public accountant, a businessman and a professor at
the University of the East. He held responsible
positions in various business firms like the Philippine
Merchandising Co., the A.U. Valencia and Co., the
Silver Swan Manufacturing Company and the Sincere
Packing Corporation. He was also associated with
several civic organizations such as the Wack Wack
Golf Club, the Chamber of Commerce of the
Philippines, Y's Men Club of Manila and the Knights of
Rizal. As a result of the incident, plaintiff was prevented
from engaging in his customary occupation for twenty
days. Plaintiff has lost a daily income of about P50.00
during his incapacity to work. Because of the incident,
he was subjected to humiliation and ridicule by his
business associates and friends. During the period of
his treatment, plaintiff was under constant fear and
anxiety for the welfare of his minor children since he
was their only support. Due to the filing of this case,
plaintiff has obligated himself to pay his counsel the
sum of P2,000.00.
On the other hand, the defense presented evidence,
oral and documentary, to prove that the Storm Drain
Section, Office of the City Engineer of Manila, received
a report of the uncovered condition of a catchbasin at

the corner of P. Burgos and Old Luneta Streets, Manila,

on January 24, 1958, but the same was covered on the
same day (Exhibit 4); that again the iron cover of the
same catch basin was reported missing on January 30,
1958, but the said cover was replaced the next day
(Exhibit 5); that the Office of the City Engineer never
received any report to the effect that the catchbasin in
question was not covered between January 25 and 29,
1968; that it has always been a policy of the said office,
which is charged with the duty of installation, repair and
care of storm drains in the City of Manila, that
whenever a report is received from whatever source of
the loss of a catchbasin cover, the matter is
immediately attended to, either by immediately
replacing the missing cover or covering the catchbasin
with steel matting that because of the lucrative scrap
iron business then prevailing, stealing of iron
catchbasin covers was rampant; that the Office of the
City Engineer has filed complaints in court resulting
from theft of said iron covers; that in order to prevent
such thefts, the city government has changed the
position and layout of catchbasins in the City by
constructing them under the sidewalks with concrete
cement covers and openings on the side of the gutter;
and that these changes had been undertaken by the
city from time to time whenever funds were available.
After appropriate proceedings the Court of First Instance of
Manila rendered the aforementioned decision sustaining the
theory of the defendants and dismissing the amended
complaint, without costs.
On appeal taken by plaintiff, this decision was affirmed by the
Court of Appeals, except insofar as the City of Manila is
concerned, which was sentenced to pay damages in the

130
aggregate sum of P6,750.00. 1 Hence, this appeal by the City
of Manila.
The first issue raised by the latter is whether the present case
is governed by Section 4 of Republic Act No. 409 (Charter of
the City of Manila) reading:
The city shall not be liable or held for damages or
injuries to persons or property arising from the failure of
the Mayor, the Municipal Board, or any other city
officer, to enforce the provisions of this chapter, or any
other law or ordinance, or from negligence of said
Mayor, Municipal Board, or other officers while
enforcing or attempting to enforce said provisions.
or by Article 2189 of the Civil Code of the Philippines which
provides:
Provinces, cities and municipalities shall be liable for
damages for the death of, or injuries suffered by, any
person by reason of defective conditions of road,
streets, bridges, public buildings, and other public
works under their control or supervision.
Manila maintains that the former provision should prevail over
the latter, because Republic Act 409, is a special law, intended
exclusively for the City of Manila, whereas the Civil Code is a
general law, applicable to the entire Philippines.
The Court of Appeals, however, applied the Civil Code, and,
we think, correctly. It is true that, insofar as its territorial
application is concerned, Republic Act No. 409 is a special law
and the Civil Code a general legislation; but, as regards the
subject-matter of the provisions above quoted, Section 4 of
Republic Act 409 establishes a general rule regulating the
liability of the City of Manila for: "damages or injury to persons

or property arising from the failure of" city officers "to enforce
the provisions of" said Act "or any other law or ordinance, or
from negligence" of the city "Mayor, Municipal Board, or other
officers while enforcing or attempting to enforce said
provisions." Upon the other hand, Article 2189 of the Civil
Code constitutes a particular prescription making "provinces,
cities and municipalities . . . liable for damages for the death
of, or injury suffered by any person by reason" specifically
"of the defective condition of roads, streets, bridges, public
buildings, and other-public works under their control or
supervision." In other words, said section 4 refers to liability
arising from negligence, in general, regardless of the object
thereof, whereas Article 2189 governs liability due to "defective
streets," in particular. Since the present action is based upon
the alleged defective condition of a road, said Article 2189 is
decisive thereon.
It is urged that the City of Manila cannot be held liable to
Teotico for damages: 1) because the accident involving him
took place in a national highway; and 2) because the City of
Manila has not been negligent in connection therewith.
As regards the first issue, we note that it is based upon an
allegation of fact not made in the answer of the City. Moreover,
Teotico alleged in his complaint, as well as in his amended
complaint, that his injuries were due to the defective condition
of a street which is "under the supervision and control" of the
City. In its answer to the amended complaint, the City, in turn,
alleged that "the streets aforementioned were and have been
constantly kept in good condition and regularly inspected and
the storm drains and manholes thereof covered by the
defendant City and the officers concerned" who "have been
ever vigilant and zealous in the performance of their
respective functions and duties as imposed upon them by
law." Thus, the City had, in effect, admitted that P. Burgos
Avenue was and isunder its control and supervision.

131
Moreover, the assertion to the effect that said Avenue is a
national highway was made, for the first time, in its motion for
reconsideration of the decision of the Court of Appeals. Such
assertion raised, therefore, a question of fact, which had not
been put in issue in the trial court, and cannot be set up, for
the first time, on appeal, much less after the rendition of the
decision of the appellate court, in a motion for the
reconsideration thereof.
At any rate, under Article 2189 of the Civil Code, it is not
necessary for the liability therein established to attach that the
defective roads or streets belong to the province, city or
municipality from which responsibility is exacted. What said
article requires is that the province, city or municipality have
either "control or supervision" over said street or road. Even if
P. Burgos Avenue were, therefore, a national highway, this
circumstance would not necessarily detract from its "control or
supervision" by the City of Manila, under Republic Act 409. In
fact Section 18(x) thereof provides:
Sec. 18. Legislative powers. The Municipal Board
shall have the following legislative powers:
xxx

xxx

xxx

(x) Subject to the provisions of existing law to provide

for the laying out, construction and improvement, and
to regulate the use of streets, avenues, alleys,
sidewalks, wharves, piers, parks, cemeteries, and other
public places; to provide for lighting, cleaning, and
sprinkling of streets and public places; . . . to provide
for the inspection of, fix the license fees for and
regulate the openings in the same for the laying of gas,
water, sewer and other pipes, the building and repair of
tunnels, sewers, and drains, and all structures in and
under the same and the erecting of poles and the

stringing of wires therein; to provide for and regulate

cross-works, curbs, and gutters therein, . . . to regulate
traffic and sales upon the streets and other public
places; to provide for the abatement of nuisances in the
same and punish the authors or owners thereof; to
provide for the construction and maintenance, and
regulate the use, of bridges, viaducts and culverts; to
prohibit and regulate ball playing, kite-flying, hoop
rolling, and other amusements which may annoy
persons using the streets and public places, or frighten
horses or other animals; to regulate the speed of
horses and other animals, motor and other vehicles,
cars, and locomotives within the limits of the city;
to regulate the lights used on all vehicles, cars, and
locomotives; . . . to provide for and change the location,
grade, and crossing of railroads, and compel any such
railroad to raise or lower its tracks to conform to such
provisions or changes; and to require railroad
companies to fence their property, or any part thereof,
to provide suitable protection against injury to persons
or property, and to construct and repair ditches, drains,
sewers, and culverts along and under their tracks, so
that the natural drainage of the streets and adjacent
property shall not be obstructed.
This authority has been neither withdrawn nor restricted by
Republic Act No. 917 and Executive Order No. 113, dated May
2, 1955, upon which the City relies. Said Act governs the
disposition or appropriation of the highway funds and the
giving of aid to provinces, chartered cities and municipalities in
the construction of roads and streets within their respective
boundaries, and Executive Order No. 113 merely implements
the provisions of said Republic Act No. 917, concerning the
disposition and appropriation of the highway funds. Moreover,
it provides that "the construction, maintenance and
improvement of national primary, national secondary and

132
national aid provincial and city roads shall be accomplished by
the Highway District Engineers and Highway City Engineers
under the supervision of the Commissioner of Public Highways
and shall be financed from such appropriations as may be
authorized by the Republic of the Philippines in annual or
special appropriation Acts."
Then, again, the determination of whether or not P. Burgos
Avenue is under the control or supervision of the City of Manila
and whether the latter is guilty of negligence, in connection
with the maintenance of said road, which were decided by the
Court of Appeals in the affirmative, is one of fact, and the
findings of said Court thereon are not subject to our review.
WHEREFORE, the decision appealed from should be as it is
hereby affirmed, with costs against the City of Manila. It is so
ordered.1wph1.t
Reyes, J.B.L., Dizon, Makalintal, Bengzon, J.P., Zaldivar,
Sanchez, Castro, Angeles and Fernando, JJ., concur.

FIRST DIVISION
G.R. No. L-34024 April 5, 1978
ISIDRO G. ARENAS, petitioner,
vs.
CITY OF SAN CARLOS (PANGASINAN), CITY COUNCIL OF
SAN CARLOS CITY, JUAN C. LOMIBAO, BENJAMIN
POSADAS, DOUGLAS D. SORIANO, BASILIO BULATAO,
CATALINA B. CAGAMPAN, EUGENIO RAMOS,
FRANCISCO CANCINO, ALFREDO VINLUAN, MARCELO
LAPEA, LEOPOLDO C. TULAGAN and TORIBIO
PAULINO, in their official capacities as City Mayor, City
Vice Mayor, City Councilors and City Treasurer,
respectively, and Honorable Presiding Judge, COURT OF
FIRST INSTANCE OF SAN CARLOS CITY (PANGASINAN),
BRANCH X, respondents.
Daniel C. Macaraeg and Alfredo P. Arenas for petitioner.
Abelardo P. Fermin & Antonio Ruiz for respondents.

Footnotes
1

Medical fees P1,400.00; Lost income P350.00;

Moral damages P3,000.00; and Attorney's fees
P2,000.00.

FERNANDEZ, J.:
This is a petition for certiorari to review the decision of the
Court of First Instance of Pangasinan at San Carlos City,
Branch X, dismissing the petition for mandamus in Civil Case
No. SCC-182. 1
In January 1971, Isidro G. Arenas, a City Judge of San Carlos
City (Pangasinan), instituted against the City of San Carlos
(Pangasinan), City Council of San Carlos City and the Mayor,
Vice-Mayor, City Councilors and City Treasurer of San Carlos

133
City, a petition for mandamus in the Court of First Instance of
Pangasinan.
The petition alleged that the petitioner, Isidro G. Arenas, is the
incumbent City Judge of San Carlos City (Pangasinan, that the
respondent City of San Carlos, from the time of its creation in
1966 up to the present, has been classified as a third class
city; that Republic Act No. 5967 which became effective on
June 21, 1969 provides that the basic salaries of city judges of
second and third class cities shall be P18,000.00 per annum;
that the petitioner was then actually receiving a monthly salary
of P1,000.00 of which P350.00 was the share of the national
government and P650.00 is the share of the city government,
which salary was P500.00 below the basic monthly salary of a
City Judge of a third class city; that under Republic Act No.
5967, the difference between the salary actually being
received by a City Judge and the basic salary established in
said act shall be paid by the city government; that from June
21, 1969 up to the filing of the petition on January 21, 1971,
the petitioner was entitled to a salary differential of P9,500.00
with the respondent City of San Carlos (Pangasinan); that the
petitioner had repeatedly requested the respondents to enact
the necessary budget and to pay him the said differential but
the respondents, without any justification, whatsoever, refused
and still refuse to do the same; that it is the clear duty of the
respondent to enact the necessary budget providing for the
payment of the salary of the petitioner as provided for in
Republic Act No. 5967; that petitioner has no other plain,
adequate and speedy remedy except the present action for
mandamus; and that because of the refusal of the respondent
to comply with their obligation as provided in Republic Act No.
5967, the petitioner was forced to engage the services of a
lawyer to file this action for which he was to pay the sum of
P2,000.00 as attorney's
fees. 2

In their answer dated February 10, 1971, the respondents

admitted and denied the allegations in the petition and alleged
that Republic Act No. 5967 further provides, among other
things, that the salary of the city judge shall at least be one
hundred pesos per month less than that of a city mayor; that
the city judge receives an annual salary of P12,000.00 which
is P100.00 per month less than the salary being received by
the city mayor which is P13,200.00 yearly; that assuming the
existence of a salary difference, in view of the provision of
Republic Act No. 5967, that the payment of the salary
difference shall be subject to the implementation of the
respective city government, which is discretionary on the part
of the city government as to whether it would or would not
implement the payment of the salary difference, and in view of
the financial difficulties of the city which has a big overdraft,
the payment of the salary difference of the city judge cannot be
made; and that the petitioner should pay his lawyer and should
not charge the attorney's fees to the respondents who have
not violated any rights of the petitioner. 3
The Court of First Instance of San Carlos City (Pangasinan),
Branch X, rendered its decision dated May 31, 1971
dismissing the petition, without pronouncement as to costs.
The pertinent portion of Section 7, Republic Act No. 5967
reads:
Sec. 7. Unless the City Charter or any special law
provides higher salary, the city judge in chartered cities
shall receive a basic salary which shall not be lower
than the sums as provided thereinbelow:
xxx xxx xxx
(c) For second and third class cities, eighteen thousand
pesos per annum;

134
xxx xxx xxx
For the cities of Baguio, Quezon, Pasay and other first
class cities, the city judge shall receive one thousand
pesos less than that fixed for the district judge, and for
second and third class cities, the city judge shall
receive one thousand five hundred pesos less than that
fixed for the district judge, and for other cities, the city
judge shall receive two thousand pesos less than that
fixed for the district judge: Provided, however, That the
salary of a city judge shall be at least one hundred
pesos per month less than that of the city mayor.
The petitioner contends that "... if the last proviso of said
Section 7 of Republic Act No. 5967 would be interpreted as the
controlling measure for fixing the salary of the city judges, then
the principal provision of Section 7 fixing the salaries of City
Judges at rate very much higher than that of a City Mayor
(particularly in the case of second and third class cities) would
be rendered totally useless." The petitioner submitted "that
since the principal intention of the legislature in enacting
Section 7 of Republic Act 5967 is to increase the salary of the
city judges, then the last proviso of said Section 7 should give
way to the provisions of said section preceding said proviso."
The record shows that when Republic Act No. 5967 took effect
on June 21, 1969, San Carlos City (Pangasinan) was a third
class city; that the petitioner as city judge received an annual
salary of P12,000.00; and that the city mayor of San Carlos
City received an annual salary of P13,200.00 which was
exactly P100.00 a month more than the salary of the city
judge.
During the deliberation in the Senate on House Bill No. 17046,
which became Republic Act No. 5967, the following discussion
took place:

SENATOR GANZON Because with the bill as

drafted, I recall that there will be some cities where the
city judges will receive salaries higher than those of the
mayors. And in all charters, Your Honor, the city judge
is considered a department head theoretically, at
least, under the mayor. It would not be fair for the
purposes of public administration that a city department
head should receive a salary higher than that of the
chief executive of the city.
SENATOR LAUREL. That point is very well taken, and I
would like to congratulate Your Honor.
SENATOR LAUREL. No. Mr. President, I understand
the concern of the distinguished gentleman from
Davao. But in this particular amendment prepared by
the distinguished lady from La Union, this will not
require the council to pay it at P100.00 exactly less
than the salary of the mayor. It is just the limit
the maximum but they may fix it at much less than
that. That is why the words "at least" were suggested
by the Committee. It need not be exactly just P100.00
less. It may be P500.00 less.
SENATOR ALMENDRAS. Your Honor, take for
example the cities of Iloilo, Cebu, Bacolod or Manila for
that matter. The Mayors are receiving at least P1,500 a
month. Now, under the amendment of the lady from La
Union, Nueva Ecija and
Davao which has already been accepted by the
sponsor does it mean that if the salary of the city
mayor is P1,500, the city judges will receive P1,400?
xxx xxx xxx

135
SENATOR ANTONINO I would like to call his
attention to lines 13 to 20. We presented this
amendment because it says here: "For the cities of
Baguio, Quezon, Pasay and other first class cities, the
city judge shall receive one thousand pesos less than
that fixed for the district judge". So it will happen, and
my attention was called by the gentlemen from Iloilo
that the city judge win be receiving more salary than
the city mayor. Hence the amendment, Mr. President.

Inasmuch as the city mayor of San Carlos City (Pangasinan)

was receiving an annual salary of P13,200.00, the
respondents cannot be compelled to provide for an annual
salary of P18,000.00 for the petitioner as city judge of the said
city.

xxx xxx xxx

SO ORDERED.

I conferred with the gentlemen from Iloilo and

Batangas, and this was their objection. We have
proposed this amendment to at least solve this
problem, so that no city judge will be receiving more
than the city mayor. So they will be receiving less
than what is proposed in this Bill. (Vol. IV, No. 61,
Senate Congressional Records, pages 2773-2787.
(Emphasis supplied .) 4

Teehankee, (Chairman) Makasiar, Muoz Palma and

Guerrero, JJ., concur.

It is clear from the deliberation of the Senate that the intention

of Congress in enacting Republic Act No. 5967 was that the
salary of a city judge should not be higher than the salary of
the city mayor. The saving clause "Provided, however, That the
salary of a city judge shall be at least P100.00 per month less
than that of the city mayor" qualifies the earlier provision which
fixes the salary of city judges for second and third class cities
at P18,000.00 per annum.
The primary purpose of a proviso is to limit the general
language of a statute. When there is irreconcilable repugnancy
between the proviso and the body of the statute the former is
given precedence over the latter on the ground that it is the
latest expression of the intent of the legislature.

WHEREFORE, the petition for review is hereby dismissed and

the decision appealed from is affirmed, without pronouncement
as to cost.

Footnotes
1 Annex "A" of the Petition, Rollo, pp. 21-24.
2 Annex "B" to the Petition, Rollo, pp. 25-30.
3 Annex "C" to the Petition, Rollo, pp. 31-32.
4 Answer, Rollo, pp. 41-42.

136
FIRST DIVISION

G.R. Nos. 120865-71 December 7, 1995

LAGUNA LAKE DEVELOPMENT AUTHORITY, petitioner,
vs.
COURT OF APPEALS; HON. JUDGE HERCULANO TECH,
PRESIDING JUDGE, BRANCH 70, REGIONAL TRIAL
COURT OF BINANGONAN RIZAL; FLEET DEVELOPMENT,
INC. and CARLITO ARROYO; THE MUNICIPALITY OF
BINANGONAN and/or MAYOR ISIDRO B.
PACIS, respondents.
LAGUNA LAKE DEVELOPMENT AUTHORITY, petitioner,
vs.
COURT OF APPEALS; HON. JUDGE AURELIO C. TRAMPE,
PRESIDING JUDGE, BRANCH 163, REGIONAL TRIAL
COURT OF PASIG; MANILA MARINE LIFE BUSINESS
RESOURCES, INC. represented by, MR. TOBIAS REYNALD
M. TIANGCO; MUNICIPALITY OF TAGUIG, METRO MANILA
and/or MAYOR RICARDO D. PAPA, JR., respondents.
LAGUNA LAKE DEVELOPMENT AUTHORITY, petitioner,
vs.
COURT OF APPEALS; HON. JUDGE ALEJANDRO A.
MARQUEZ, PRESIDING JUDGE, BRANCH 79, REGIONAL
TRIAL COURT OF MORONG, RIZAL; GREENFIELD
VENTURES INDUSTRIAL DEVELOPMENT CORPORATION
and R. J. ORION DEVELOPMENT CORPORATION;
MUNICIPALITY OF JALA-JALA and/or MAYOR WALFREDO
M. DE LA VEGA, respondents.
LAGUNA LAKE DEVELOPMENT AUTHORITY, petitioner,
vs.

137
COURT OF APPEALS; HON. JUDGE MANUEL S.
PADOLINA, PRESIDING JUDGE, BRANCH 162, REGIONAL
TRIAL COURT OF PASIG, METRO MANILA; IRMA FISHING
& TRADING CORP.; ARTM FISHING CORP.; BDR
CORPORATION, MIRT CORPORATION and TRIM
CORPORATION; MUNICIPALITY OF BINANGONAN and/or
MAYOR ISIDRO B. PACIS, respondents.
LAGUNA LAKE DEVELOPMENT AUTHORITY, petitioner,
vs.
COURT OF APPEALS; HON. JUDGE ARTURO A. MARAVE,
PRESIDING JUDGE, BRANCH 78, REGIONAL TRIAL
COURT OF MORONG, RIZAL; BLUE LAGOON FISHING
CORP. and ALCRIS CHICKEN GROWERS, INC.;
MUNICIPALITY OF JALA-JALA and/or MAYOR WALFREDO
M. DE LA VEGA, respondents.
LAGUNA LAKE DEVELOPMENT AUTHORITY, petitioner,
vs.
COURT OF APPEALS; HON. JUDGE ARTURO A. MARAVE,
PRESIDING JUDGE, BRANCH 78, REGIONAL TRIAL
COURT OF MORONG, RIZAL; AGP FISH VENTURES, INC.,
represented by its PRESIDENT ALFONSO PUYAT;
MUNICIPALITY OF JALA-JALA and/or MAYOR WALFREDO
M. DE LA VEGA, respondents.
LAGUNA LAKE DEVELOPMENT AUTHORITY, petitioner,
vs.
COURT OF APPEALS; HON. JUDGE EUGENIO S.
LABITORIA, PRESIDING JUDGE, BRANCH 161,
REGIONAL TRIAL COURT OF PASIG, METRO MANILA;
SEA MAR TRADING CO. INC.; EASTERN LAGOON
FISHING CORP.; MINAMAR FISHING CORP.;
MUNICIPALITY OF BINANGONAN and/or MAYOR ISIDRO
B. PACIS,respondents.

HERMOSISIMA, JR., J.:

It is difficult for a man, scavenging on the garbage dump
created by affluence and profligate consumption and
extravagance of the rich or fishing in the murky waters of the
Pasig River and the Laguna Lake or making a clearing in the
forest so that he can produce food for his family, to understand
why protecting birds, fish, and trees is more important than
protecting him and keeping his family alive.
How do we strike a balance between environmental protection,
on the one hand, and the individual personal interests of
people, on the other?
Towards environmental protection and ecology, navigational
safety, and sustainable development, Republic Act No. 4850
created the "Laguna Lake Development Authority." This
Government Agency is supposed to carry out and effectuate
the aforesaid declared policy, so as to accelerate the
development and balanced growth of the Laguna Lake area
and the surrounding provinces, cities and towns, in the act
clearly named, within the context of the national and regional
plans and policies for social and economic development.
Presidential Decree No. 813 of former President Ferdinand E.
Marcos amended certain sections of Republic Act No. 4850
because of the concern for the rapid expansion of Metropolitan
Manila, the suburbs and the lakeshore towns of Laguna de
Bay, combined with current and prospective uses of the lake
for municipal-industrial water supply, irrigation, fisheries, and
the like. Concern on the part of the Government and the
general public over: the environment impact of development
on the water quality and ecology of the lake and its related
river systems; the inflow of polluted water from the Pasig River,

138
industrial, domestic and agricultural wastes from developed
areas around the lake; the increasing urbanization which
induced the deterioration of the lake, since water quality
studies have shown that the lake will deteriorate further if
steps are not taken to check the same; and the floods in
Metropolitan Manila area and the lakeshore towns which will
influence the hydraulic system of Laguna de Bay, since any
scheme of controlling the floods will necessarily involve the
lake and its river systems, likewise gave impetus to the
creation of the Authority.
Section 1 of Republic Act No. 4850 was amended to read as
follows:
Sec. 1. Declaration of Policy. It is hereby declared to be
the national policy to promote, and accelerate the
development and balanced growth of the Laguna Lake
area and the surrounding provinces, cities and towns
hereinafter referred to as the region, within the context
of the national and regional plans and policies for social
and economic development and to carry out the
development of the Laguna Lake region with due
regard and adequate provisions for environmental
management and control, preservation of the quality of
human life and ecological systems, and the prevention
of undue ecological disturbances, deterioration and
pollution. 1
Special powers of the Authority, pertinent to the issues in this
case, include:
Sec. 3. Section 4 of the same Act is hereby further
amended by adding thereto seven new paragraphs to
be known as paragraphs (j), (k), (l), (m), (n), (o), and
(p) which shall read as follows:

xxx xxx xxx

(j) The provisions of existing laws to the
contrary notwithstanding, to engage in fish
production and other aqua-culture projects in
Laguna de Bay and other bodies of water within
its jurisdiction and in pursuance thereof to
conduct studies and make experiments,
whenever necessary, with the collaboration and
assistance of the Bureau of Fisheries and
Aquatic Resources, with the end in view of
improving present techniques and
practices.Provided, that until modified, altered
or amended by the procedure provided in the
following sub-paragraph, the present laws, rules
and permits or authorizations remain in force;
(k) For the purpose of effectively regulating and
monitoring activities in Laguna de Bay, the
Authority shall have exclusive jurisdiction to
issue new permit for the use of the lake waters
for any projects or activities in or affecting the
said lake including navigation, construction, and
operation of fishpens, fish enclosures, fish
corrals and the like, and to impose necessary
safeguards for lake quality control and
management and to collect necessary fees for
said activities and projects: Provided, That the
fees collected for fisheries may be shared
between the Authority and other government
agencies and political sub-divisions in such
proportion as may be determined by the
President of the Philippines upon
recommendation of the Authority's
Board: Provided, further, That the Authority's
Board may determine new areas of fishery

139
development or activities which it may place
under the supervision of the Bureau of Fisheries
and Aquatic Resources taking into account the
overall development plans and programs for
Laguna de Bay and related bodies of
water: Provided, finally, That the Authority shall
subject to the approval of the President of the
Philippines promulgate such rules and
regulations which shall govern fisheries
development activities in Laguna de Bay which
shall take into consideration among others the
following: socio-economic amelioration of
bonafide resident fishermen whether
individually or collectively in the form of
cooperatives, lakeshore town development, a
master plan for fishpen construction and
operation, communal fishing ground for lake
shore town residents, and preference to lake
shore town residents in hiring laborer for fishery
projects;
(l) To require the cities and municipalities
embraced within the region to pass appropriate
zoning ordinances and other regulatory
measures necessary to carry out the objectives
of the Authority and enforce the same with the
assistance of the Authority;
(m) The provisions of existing laws to the
contrary notwithstanding, to exercise water
rights over public waters within the Laguna de
Bay region whenever necessary to carry out the
Authority's projects;
(n) To act in coordination with existing
governmental agencies in establishing water

quality standards for industrial, agricultural and

municipal waste discharges into the lake and to
cooperate with said existing agencies of the
government of the Philippines in enforcing such
standards, or to separately pursue enforcement
and penalty actions as provided for in Section 4
(d) and Section 39-A of this Act: Provided, That
in case of conflict on the appropriate water
quality standard to be enforced such conflict
shall be resolved thru the NEDA Board. 2
To more effectively perform the role of the Authority under
Republic Act No. 4850, as though Presidential Decree No. 813
were not thought to be completely effective, the Chief
Executive, feeling that the land and waters of the Laguna Lake
Region are limited natural resources requiring judicious
management to their optimal utilization to insure renewability
and to preserve the ecological balance, the competing options
for the use of such resources and conflicting jurisdictions over
such uses having created undue constraints on the
institutional capabilities of the Authority in the light of the
limited powers vested in it by its charter, Executive Order No.
927 further defined and enlarged the functions and powers of
the Authority and named and enumerated the towns, cities and
provinces encompassed by the term "Laguna de Bay Region".
Also, pertinent to the issues in this case are the following
provisions of Executive Order No. 927 which include in
particular the sharing of fees:
Sec 2. Water Rights Over Laguna de Bay and Other
Bodies of Water within the Lake Region: To effectively
regulate and monitor activities in the Laguna de Bay
region, the Authority shall have exclusive jurisdiction to
issue permit for the use of all surface water for any
projects or activities in or affecting the said region

140
including navigation, construction, and operation of
fishpens, fish enclosures, fish corrals and the like.
For the purpose of this Executive Order, the term
"Laguna de Bay Region" shall refer to the Provinces of
Rizal and Laguna; the Cities of San Pablo, Pasay,
Caloocan, Quezon, Manila and Tagaytay; the towns of
Tanauan, Sto. Tomas and Malvar in Batangas
Province; the towns of Silang and Carmona in Cavite
Province; the town of Lucban in Quezon Province; and
the towns of Marikina, Pasig, Taguig, Muntinlupa, and
Pateros in Metro Manila.
Sec 3. Collection of Fees. The Authority is hereby
empowered to collect fees for the use of the lake water
and its tributaries for all beneficial purposes including
but not limited to fisheries, recreation, municipal,
industrial, agricultural, navigation, irrigation, and waste
disposal purpose; Provided, that the rates of the fees to
be collected, and the sharing with other government
agencies and political subdivisions, if necessary, shall
be subject to the approval of the President of the
Philippines upon recommendation of the Authority's
Board, except fishpen fee, which will be shared in the
following manner; 20 percent of the fee shall go to the
lakeshore local governments, 5 percent shall go to the
Project Development Fund which shall be administered
by a Council and the remaining 75 percent shall
constitute the share of LLDA. However, after the
implementation within the three-year period of the
Laguna Lake Fishery Zoning and Management Plan,
the sharing will be modified as follows: 35 percent of
the fishpen fee goes to the lakeshore local
governments, 5 percent goes to the Project
Development Fund and the remaining 60 percent shall
be retained by LLDA; Provided, however, that the

share of LLDA shall form part of its corporate funds and

shall not be remitted to the National Treasury as an
exception to the provisions of Presidential Decree No.
1234. (Emphasis supplied)
It is important to note that Section 29 of Presidential Decree
No. 813 defined the term "Laguna Lake" in this manner:
Sec 41. Definition of Terms.
(11) Laguna Lake or Lake. Whenever Laguna Lake or
lake is used in this Act, the same shall refer to Laguna
de Bay which is that area covered by the lake water
when it is at the average annual maximum lake level of
elevation 12.50 meters, as referred to a datum 10.00
meters below mean lower low water (M.L.L.W). Lands
located at and below such elevation are public lands
which form part of the bed of said lake.
Then came Republic Act No. 7160, the Local Government
Code of 1991. The municipalities in the Laguna Lake Region
interpreted the provisions of this law to mean that the newly
passed law gave municipal governments the exclusive
jurisdiction to issue fishing privileges within their municipal
waters because R.A. 7160 provides:
Sec. 149. Fishery Rentals, Fees and Charges.
(a) Municipalities shall have the exclusive authority to
grant fishery privileges in the municipal waters and
impose rental fees or charges therefor in accordance
with the provisions of this Section.
(b) The Sangguniang Bayan may:

141
(1) Grant fishing privileges to erect fish corrals, oyster,
mussel or other aquatic beds or bangus fry areas,
within a definite zone of the municipal waters, as
determined by it; . . . .
(2) Grant privilege to gather, take or catch bangus fry,
prawn fry or kawag-kawag or fry of other species and
fish from the municipal waters by nets, traps or other
fishing gears to marginal fishermen free from any rental
fee, charges or any other imposition whatsoever.
xxx xxx xxx
Sec. 447. Power, Duties, Functions and Compensation.
....
xxx xxx xxx
(XI) Subject to the provisions of Book II of this Code,
grant exclusive privileges of constructing fish corrals or
fishpens, or the taking or catching of bangus fry, prawn
fry orkawag-kawag or fry of any species or fish within
the municipal waters.
xxx xxx xxx

Municipal governments thereupon assumed the authority to

issue fishing privileges and fishpen permits. Big fishpen
operators took advantage of the occasion to establish fishpens
and fishcages to the consternation of the Authority.
Unregulated fishpens and fishcages, as of July, 1995,
occupied almost one-third of the entire lake water surface
area, increasing the occupation drastically from 7,000 hectares
in 1990 to almost 21,000 hectares in 1995. The Mayor's permit
to construct fishpens and fishcages were all undertaken in
violation of the policies adopted by the Authority on fishpen
zoning and the Laguna Lake carrying capacity.
To be sure, the implementation by the lakeshore municipalities
of separate independent policies in the operation of fishpens
and fishcages within their claimed territorial municipal waters
in the lake and their indiscriminate grant of fishpen permits
have already saturated the lake area with fishpens, thereby
aggravating the current environmental problems and
ecological stress of Laguna Lake.
In view of the foregoing circumstances, the Authority served
notice to the general public that:
In compliance with the instructions of His Excellency
PRESIDENT FIDEL V. RAMOS given on June 23, 1993
at Pila, Laguna pursuant to Republic Act 4850 as
amended by Presidential Decree 813 and Executive
Order 927 series of 1983 and in line with the policies
and programs of the Presidential Task Force on Illegal
Fishpens and Illegal Fishing, the general public is
hereby notified that:
1. All fishpens, fishcages and other aqua-culture
structures in the Laguna de Bay Region, which were
not registered or to which no application for registration
and/or permit has been filed with Laguna Lake

142
Development Authority as of March 31, 1993 are
hereby declared outrightly as illegal.
2. All fishpens, fishcages and other aqua-culture
structures so declared as illegal shall be subject to
demolition which shall be undertaken by the
Presidential Task Force for Illegal Fishpen and Illegal
Fishing.
3. Owners of fishpens, fishcages and other aquaculture structures declared as illegal shall, without
prejudice to demolition of their structures be criminally
charged in accordance with Section 39-A of Republic
Act 4850 as amended by P.D. 813 for violation of the
same laws. Violations of these laws carries a penalty of
imprisonment of not exceeding 3 years or a fine not
exceeding Five Thousand Pesos or both at the
discretion of the court.
All operators of fishpens, fishcages and other aquaculture structures declared as illegal in accordance with
the foregoing Notice shall have one (1) month on or
before 27 October 1993 to show cause before the
LLDA why their said fishpens, fishcages and other
aqua-culture structures should not be
demolished/dismantled.
One month, thereafter, the Authority sent notices to the
concerned owners of the illegally constructed fishpens,
fishcages and other aqua-culture structures advising them to
dismantle their respective structures within 10 days from
receipt thereof, otherwise, demolition shall be effected.
Reacting thereto, the affected fishpen owners filed injunction
cases against the Authority before various regional trial courts,
to wit: (a) Civil Case No. 759-B, for Prohibition, Injunction and

Damages, Regional Trial Court, Branch 70, Binangonan, Rizal,

filed by Fleet Development, Inc. and Carlito Arroyo; (b) Civil
Case No. 64049, for Injunction, Regional Trial Court, Branch
162, Pasig, filed by IRMA Fishing and Trading Corp., ARTM
Fishing Corp., BDR Corp., MIRT Corp. and TRIM Corp.; (c)
Civil Case No. 566, for Declaratory Relief and Injunction,
Regional Trial Court, Branch 163, Pasig, filed by Manila Marine
Life Business Resources, Inc. and Tobias Reynaldo M. Tianco;
(d) Civil Case No. 556-M, for Prohibition, Injunction and
Damages, Regional Trial Court, Branch 78, Morong, Rizal,
filed by AGP Fishing Ventures, Inc.; (e) Civil Case No. 522-M,
for Prohibition, Injunction and Damages, Regional Trial Court,
Branch 78, Morong, Rizal, filed by Blue Lagoon and Alcris
Chicken Growers, Inc.; (f) Civil Case No. 554-,
forCertiorari and Prohibition, Regional Trial Court, Branch 79,
Morong, Rizal, filed by Greenfields Ventures Industrial Corp.
and R.J. Orion Development Corp.; and (g) Civil Case No.
64124, for Injunction, Regional Trial Court, Branch 15, Pasig,
filed by SEA-MAR Trading Co., Inc. and Eastern Lagoon
Fishing Corp. and Minamar Fishing Corporation.
The Authority filed motions to dismiss the cases against it on
jurisdictional grounds. The motions to dismiss were invariably
denied. Meanwhile, temporary restraining order/writs of
preliminary mandatory injunction were issued in Civil Cases
Nos. 64124, 759 and 566 enjoining the Authority from
demolishing the fishpens and similar structures in question.
Hence, the herein petition for certiorari, prohibition and
injunction, G.R. Nos. 120865-71, were filed by the Authority
with this court. Impleaded as parties-respondents are
concerned regional trial courts and respective private parties,
and the municipalities and/or respective Mayors of
Binangonan, Taguig and Jala-jala, who issued permits for the
construction and operation of fishpens in Laguna de Bay. The
Authority sought the following reliefs, viz.:

143
(A) Nullification of the temporary restraining order/writs
of preliminary injunction issued in Civil Cases Nos.
64125, 759 and 566;
(B) Permanent prohibition against the regional trial
courts from exercising jurisdiction over cases involving
the Authority which is a co-equal body;
(C) Judicial pronouncement that R.A. 7610 (Local
Government Code of 1991) did not repeal, alter or
modify the provisions of R.A. 4850, as amended,
empowering the Authority to issue permits for fishpens,
fishcages and other aqua-culture structures in Laguna
de Bay and that, the Authority the government agency
vested with exclusive authority to issue said permits.
By this Court's resolution of May 2, 1994, the Authority's
consolidated petitions were referred to the Court of Appeals.
In a Decision, dated June 29, 1995, the Court of Appeals
dismissed the Authority's consolidated petitions, the Court of
Appeals holding that: (A) LLDA is not among those quasijudicial agencies of government whose decision or order are
appealable only to the Court of Appeals; (B) the LLDA charter
does vest LLDA with quasi-judicial functions insofar as
fishpens are concerned; (C) the provisions of the LLDA charter
insofar as fishing privileges in Laguna de Bay are concerned
had been repealed by the Local Government Code of 1991;
(D) in view of the aforesaid repeal, the power to grant permits
devolved to and is now vested with their respective local
government units concerned.
Not satisfied with the Court of Appeals decision, the Authority
has returned to this Court charging the following errors:

1. THE HONORABLE COURT OF APPEALS

PROBABLY COMMITTED AN ERROR WHEN IT
RULED THAT THE LAGUNA LAKE DEVELOPMENT
AUTHORITY IS NOT A QUASI-JUDICIAL AGENCY.
2. THE HONORABLE COURT OF APPEALS
COMMITTED SERIOUS ERROR WHEN IT RULED
THAT R.A. 4850 AS AMENDED BY P.D. 813 AND E.O.
927 SERIES OF 1983 HAS BEEN REPEALED BY
REPUBLIC ACT 7160. THE SAID RULING IS
CONTRARY TO ESTABLISHED PRINCIPLES AND
JURISPRUDENCE OF STATUTORY
CONSTRUCTION.
3. THE HONORABLE COURT OF APPEALS
COMMITTED SERIOUS ERROR WHEN IT RULED
THAT THE POWER TO ISSUE FISHPEN PERMITS IN
LAGUNA DE BAY HAS BEEN DEVOLVED TO
CONCERNED (LAKESHORE) LOCAL GOVERNMENT
UNITS.
We take a simplistic view of the controversy. Actually, the main
and only issue posed is: Which agency of the Government
the Laguna Lake Development Authority or the towns and
municipalities comprising the region should exercise
jurisdiction over the Laguna Lake and its environs insofar as
the issuance of permits for fishery privileges is concerned?
Section 4 (k) of the charter of the Laguna Lake Development
Authority, Republic Act No. 4850, the provisions of Presidential
Decree No. 813, and Section 2 of Executive Order No. 927,
cited above, specifically provide that the Laguna Lake
Development Authority shall have exclusive jurisdiction to
issue permits for the use of all surface water for any projects
or activities in or affecting the said region, including navigation,
construction, and operation of fishpens, fish enclosures, fish

144
corrals and the like. On the other hand, Republic Act No. 7160,
the Local Government Code of 1991, has granted to the
municipalities the exclusive authority to grant fishery privileges
in municipal waters. The Sangguniang Bayan may grant
fishery privileges to erect fish corrals, oyster, mussels or other
aquatic beds or bangus fry area within a definite zone of the
municipal waters.

special law is to be taken as an exception to the general law in

the absence of special circumstances forcing a contrary
conclusion. This is because implied repeals are not favored
and as much as possible, effect must be given to all
enactments of the legislature. A special law cannot be
repealed, amended or altered by a subsequent general law by
mere implication. 4

We hold that the provisions of Republic Act No. 7160 do not

necessarily repeal the aforementioned laws creating the
Laguna Lake Development Authority and granting the latter
water rights authority over Laguna de Bay and the lake region.

Thus, it has to be concluded that the charter of the Authority

should prevail over the Local Government Code of 1991.

The Local Government Code of 1991 does not contain any

express provision which categorically expressly repeal the
charter of the Authority. It has to be conceded that there was
no intent on the part of the legislature to repeal Republic Act
No. 4850 and its amendments. The repeal of laws should be
made clear and expressed.

Considering the reasons behind the establishment of the

Authority, which are environmental protection, navigational
safety, and sustainable development, there is every indication
that the legislative intent is for the Authority to proceed with its
mission.

It has to be conceded that the charter of the Laguna Lake

Development Authority constitutes a special law. Republic Act
No. 7160, the Local Government Code of 1991, is a general
law. It is basic in statutory construction that the enactment of a
later legislation which is a general law cannot be construed to
have repealed a special law. It is a well-settled rule in this
jurisdiction that "a special statute, provided for a particular
case or class of cases, is not repealed by a subsequent
statute, general in its terms, provisions and application, unless
the intent to repeal or alter is manifest, although the terms of
the general law are broad enough to include the cases
embraced in the special law." 3

We are on all fours with the manifestation of petitioner Laguna

Lake Development Authority that "Laguna de Bay, like any
other single body of water has its own unique natural
ecosystem. The 900 km lake surface water, the eight (8)
major river tributaries and several other smaller rivers that
drain into the lake, the 2,920 km basin or watershed
transcending the boundaries of Laguna and Rizal provinces,
greater portion of Metro Manila, parts of Cavite, Batangas, and
Quezon provinces, constitute one integrated delicate natural
ecosystem that needs to be protected with uniform set of
policies; if we are to be serious in our aims of attaining
sustainable development. This is an exhaustible natural
resource a very limited one which requires judicious
management and optimal utilization to ensure renewability and
preserve its ecological integrity and balance."

Where there is a conflict between a general law and a special

statute, the special statute should prevail since it evinces the
legislative intent more clearly than the general statute. The

"Managing the lake resources would mean the implementation

of a national policy geared towards the protection,
conservation, balanced growth and sustainable development

145
of the region with due regard to the inter-generational use of
its resources by the inhabitants in this part of the earth. The
authors of Republic Act 4850 have foreseen this need when
they passed this LLDA law the special law designed to
govern the management of our Laguna de Bay lake
resources."
"Laguna de Bay therefore cannot be subjected to fragmented
concepts of management policies where lakeshore local
government units exercise exclusive dominion over specific
portions of the lake water. The garbage thrown or sewage
discharged into the lake, abstraction of water therefrom or
construction of fishpens by enclosing its certain area, affect not
only that specific portion but the entire 900 km of lake water.
The implementation of a cohesive and integrated lake water
resource management policy, therefore, is necessary to
conserve, protect and sustainably develop Laguna de Bay." 5
The power of the local government units to issue fishing
privileges was clearly granted for revenue purposes. This is
evident from the fact that Section 149 of the New Local
Government Code empowering local governments to issue
fishing permits is embodied in Chapter 2, Book II, of Republic
Act No. 7160 under the heading, "Specific Provisions On The
Taxing And Other Revenue Raising Power Of Local
Government Units."
On the other hand, the power of the Authority to grant permits
for fishpens, fishcages and other aqua-culture structures is for
the purpose of effectively regulating and monitoring activities in
the Laguna de Bay region (Section 2, Executive Order No.
927) and for lake quality control and management. 6 It does
partake of the nature of police power which is the most
pervasive, the least limitable and the most demanding of all
State powers including the power of taxation. Accordingly, the
charter of the Authority which embodies a valid exercise of

police power should prevail over the Local Government Code

of 1991 on matters affecting Laguna de Bay.
There should be no quarrel over permit fees for fishpens,
fishcages and other aqua-culture structures in the Laguna de
Bay area. Section 3 of Executive Order No. 927 provides for
the proper sharing of fees collected.
In respect to the question as to whether the Authority is a
quasi-judicial agency or not, it is our holding that, considering
the provisions of Section 4 of Republic Act No. 4850 and
Section 4 of Executive Order No. 927, series of 1983, and the
ruling of this Court in Laguna Lake Development Authority
vs. Court of Appeals, 231 SCRA 304, 306, which we quote:
xxx xxx xxx
As a general rule, the adjudication of pollution cases
generally pertains to the Pollution Adjudication Board
(PAB), except in cases where the special law provides
for another forum. It must be recognized in this regard
that the LLDA, as a specialized administrative agency,
is specifically mandated under Republic Act No. 4850
and its amendatory laws to carry out and make
effective the declared national policy of promoting and
accelerating the development and balanced growth of
the Laguna Lake area and the surrounding provinces of
Rizal and Laguna and the cities of San Pablo, Manila,
Pasay, Quezon and Caloocan with due regard and
adequate provisions for environmental management
and control, preservation of the quality of human life
and ecological systems, and the prevention of undue
ecological disturbances, deterioration and pollution.
Under such a broad grant of power and authority, the
LLDA, by virtue of its special charter, obviously has the
responsibility to protect the inhabitants of the Laguna

146
Lake region from the deleterious effects of pollutants
emanating from the discharge of wastes from the
surrounding areas. In carrying out the aforementioned
declared policy, the LLDA is mandated, among others,
to pass upon and approve or disapprove all plans,
programs, and projects proposed by local government
offices/agencies within the region, public corporations,
and private persons or enterprises where such plans,
programs and/or projects are related to those of the
LLDA for the development of the region.
xxx xxx xxx

Authority as provided for in its charter, the Regional Trial

Courts have jurisdiction.
In view of the foregoing, this Court holds that Section 149 of
Republic Act No. 7160, otherwise known as the Local
Government Code of 1991, has not repealed the provisions of
the charter of the Laguna Lake Development Authority,
Republic Act No. 4850, as amended. Thus, the Authority has
the exclusive jurisdiction to issue permits for the enjoyment of
fishery privileges in Laguna de Bay to the exclusion of
municipalities situated therein and the authority to exercise
such powers as are by its charter vested on it.

. . . . While it is a fundamental rule that an

administrative agency has only such powers as are
expressly granted to it by law, it is likewise a settled
rule that an administrative agency has also such
powers as are necessarily implied in the exercise of its
express powers. In the exercise, therefore, of its
express powers under its charter, as a regulatory and
quasi-judicial body with respect to pollution cases in the
Laguna Lake region, the authority of the LLDA to issue
a "cease and desist order" is, perforce, implied.
Otherwise, it may well be reduced to a "toothless"
paper agency.

Removal from the Authority of the aforesaid licensing authority

will render nugatory its avowed purpose of protecting and
developing the Laguna Lake Region. Otherwise stated, the
abrogation of this power would render useless its reason for
being and will in effect denigrate, if not abolish, the Laguna
Lake Development Authority. This, the Local Government
Code of 1991 had never intended to do.

there is no question that the Authority has express powers

as a regulatory and quasi-judicial body in respect to
pollution cases with authority to issue a "cease and desist
order" and on matters affecting the construction of illegal
fishpens, fishcages and other aqua-culture structures in
Laguna de Bay. The Authority's pretense, however, that it
is co-equal to the Regional Trial Courts such that all
actions against it may only be instituted before the Court of
Appeals cannot be sustained. On actions necessitating the
resolution of legal questions affecting the powers of the

The restraining orders and/or writs of injunction issued by

Judge Arturo Marave, RTC, Branch 78, Morong, Rizal; Judge
Herculano Tech, RTC, Branch 70, Binangonan, Rizal; and
Judge Aurelio Trampe, RTC, Branch 163, Pasig, Metro Manila,
are hereby declared null and void and ordered set aside for
having been issued with grave abuse of discretion.

WHEREFORE, the petitions for prohibition, certiorari and

injunction are hereby granted, insofar as they relate to the
authority of the Laguna Lake Development Authority to grant
fishing privileges within the Laguna Lake Region.

The Municipal Mayors of the Laguna Lake Region are hereby

prohibited from issuing permits to construct and operate
fishpens, fishcages and other aqua-culture structures within

147
the Laguna Lake Region, their previous issuances being
declared null and void. Thus, the fishing permits issued by
Mayors Isidro B. Pacis, Municipality of Binangonan; Ricardo D.
Papa, Municipality of Taguig; and Walfredo M. de la Vega,
Municipality of Jala-jala, specifically, are likewise declared null
and void and ordered cancelled.
The fishpens, fishcages and other aqua-culture structures put
up by operators by virtue of permits issued by Municipal
Mayors within the Laguna Lake Region, specifically, permits
issued to Fleet Development, Inc. and Carlito Arroyo; Manila
Marine Life Business Resources, Inc., represented by, Mr.
Tobias Reynald M. Tiangco; Greenfield Ventures Industrial
Development Corporation and R.J. Orion Development
Corporation; IRMA Fishing And Trading Corporation, ARTM
Fishing Corporation, BDR Corporation, Mirt Corporation and
Trim Corporation; Blue Lagoon Fishing Corporation and
ALCRIS Chicken Growers, Inc.; AGP Fish Ventures, Inc.,
represented by its President Alfonso Puyat; SEA MAR Trading
Co., Inc., Eastern Lagoon Fishing Corporation, and MINAMAR
Fishing Corporation, are hereby declared illegal structures
subject to demolition by the Laguna Lake Development
Authority.

EN BANC
[G.R. No. 143596. December 11, 2003]

JUDGE TOMAS C. LEYNES, petitioner,

vs. THE COMMISSION ON AUDIT (COA), HON. GREGORIA
S. ONG, DIRECTOR, COMMISSION ON AUDIT and
HON.
SALVACION
DALISAY,
PROVINCIAL
AUDITOR, respondents.

DECISION

SO ORDERED.
Davide, Jr., Bellosillo and Kapunan, JJ., concur.

CORONA, J.:
Before us is a petition for certiorari under Rule 65 in
relation to Section 2, Rule 64 of the Rules of Court, seeking to
reverse and set aside the decision[1] dated September 14,
1999 of the Commission on Audit (COA), affirming the
resolution of COA Regional Director Gregoria S. Ong dated
March 29, 1994 which in turn affirmed the opinion dated
October 19, 1993 of the Provincial Auditor of
Oriental Mindoro, Salvacion M. Dalisay. All three denied the

148
grant of P1,600 monthly allowance to petitioner Judge Tomas
C. Leynes by the Municipality of Naujan, Oriental Mindoro.
FACTUAL ANTECEDENTS
Petitioner Judge Tomas C. Leynes who, at present, is the
presiding judge of the Regional Trial Court of Calapan City,
Oriental Mindoro, Branch 40 was formerly assigned to
the Municipality of Naujan, Oriental Mindoro as the sole
presiding judge of the Municipal Trial Court thereof. As such,
his salary and representation and transportation allowance
(RATA) were drawn from the budget of the Supreme Court. In
addition, petitioner received a monthly allowance of P944 from
the local funds[2] of the Municipality of Naujanstarting 1984.[3]
On March 15, 1993, the Sangguniang Bayan of Naujan,
through Resolution No. 057, sought the opinion of the
Provincial Auditor and the Provincial Budget Officer regarding
any budgetary limitation on the grant of a monthly allowance
by the municipality to petitioner judge. On May 7, 1993,
the Sangguniang Bayan unanimously approved Resolution
No. 101 increasing petitioner judges monthly allowance
from P944 to P1,600 (an increase of P656) starting May 1993.
[4]
By virtue of said resolution, the municipal government (the
Municipal Mayor and the Sangguniang Bayan) approved a
supplemental budget which was likewise approved by
the Sangguniang Panlalawigan and the Office of Provincial
Budget and Management of Oriental Mindoro. In 1994, the
Municipal Government of Naujan again provided for petitioner
judges P1,600 monthly allowance in its annual budget which
was again approved by the Sangguniang Panlalawigan and
the Office of Provincial Budget and Management of
Oriental Mindoro.[5]
On February
17,
1994,
Provincial
Auditor Salvacion M. Dalisay sent a letter to the Municipal

Mayor and the Sangguniang Bayan of Naujan directing them

to stop the payment of the P1,600 monthly allowance or RATA
to petitioner judge and to require the immediate refund of the
amounts previously paid to the latter. She opined that
the Municipality ofNaujan could not grant RATA to petitioner
judge in addition to the RATA the latter was already receiving
from the Supreme Court. Her directive was based on the
following:

Section36,RANo.7645,GeneralAppropriationsActof1993
RepresentationandTransportationAllowances.Thefollowing
officialsandthoseofequivalentrankasmaybedeterminedbythe
DepartmentofBudgetandManagement(DBM)whileintheactual
performanceoftheirrespectivefunctionsareherebygranted
monthlycommutablerepresentationandtransportationallowances
payablefromtheprogrammedappropriationsprovidedfortheir
respectiveoffices,notexceedingtheratesindicatedbelow...
NationalCompensationCircularNo.67datedJanuary1,1992,ofthe
DepartmentofBudgetandManagement
Subject:RepresentationandTransportationAllowancesofNational
GovernmentOfficialsandEmployees
xxxxxxxxx
4.FundingSource:Inallcases,commutableandreimbursable
RATAshallbepaidfromtheamountappropriatedforthepurpose
andotherpersonalservicessavingsoftheagencyorprojectfrom
wheretheofficialsandemployeescoveredunderthisCirculardraw

149
theirsalaries.NooneshallbeallowedtocollectRATAfrommore
thanonesource.[6](emphasissupplied)

d.ThattheLGUhasalreadycreatedmandatorypositions
prescribedinRA7160;and

Petitioner
judge
appealed
to
COA
Regional
Director Gregoria S. Ong who, however, upheld the opinion of
Provincial Auditor Dalisay and who added that Resolution No.
101,
Series
of
1993
of
the Sangguniang Bayan of Naujan failed to comply with
Section 3 of Local Budget Circular No. 53 dated September 1,
1993 outlining the conditions for the grant of allowances to
judges and other national officials or employees by the local
government units (LGUs). Section 3 of the said budget circular
provides that:

e.Thatsimilarallowances/additionalcompensationarenot
grantedbythenationalgovernmenttothe
officials/employeesassignedtotheLGU.[7]

Sec.3Allowances.LGUsmaygrantallowances/additional
compensationtothenationalgovernmentofficials/employees
assignedtotheirlocalityatratesauthorizedbylaw,rulesand
regulationsandsubjecttothefollowingpreconditions:
a.Thattheannualincomeorfinancesofthemunicipality,
cityorprovinceascertifiedbytheAccountant
concernedwillallowthegrantofthe
allowances/additionalcompensationwithout
exceedingthegenerallimitationsforpersonal
servicesunderSection325ofRA7160;
b.ThatthebudgetaryrequirementsunderSection324of
RA7160includingthefullrequirementofRA6758
havebeensatisfiedandprovidedfullyinthebudget
ascertifiedbytheBudgetOfficerandCOA
representativeintheLGUconcerned;
c.ThattheLGUhasfullyimplementedthedevolutionof
personnel/functionsinaccordancewiththe
provisionsofRA7160;

Petitioner judge appealed the unfavorable resolution of

the Regional Director to the Commission on Audit. In the
meantime, a disallowance of the payment of the P1,600
monthly allowance to petitioner was issued. Thus he received
his P1,600
monthly
allowance
from
the Municipality of Naujan only for the period May 1993 to
January 1994.
On September 14, 1999, the COA issued its decision
affirming the resolution of Regional Director Gregoria S. Ong:
Themainissue...iswhetherornottheMunicipalityofNaujan,
OrientalMindorocanvalidlyprovideRATAtoitsMunicipalJudge,
inadditiontothatprovidedbytheSupremeCourt.
Generally,thegrantof(RATA)[sic]toqualifiednational
governmentofficialsandemployeespursuanttoSection36ofR.A.
7645[GeneralAppropriationsActof1993]andNCCNo.67dated
01January1992issubjecttothefollowingconditionstowit:
1.Payablefromtheprogrammed/appropriatedamountand
othersfrompersonalservicessavingsofthe
respectiveofficeswheretheofficialsoremployees
drawtheirsalaries;
2.NotexceedingtheratesprescribedbytheAnnual
GeneralAppropriationsAct;

150
3.Officials/employeesondetailwithotherofficesor
assignedtoserveotherofficesoragenciesshallbe
paidfromtheirparentagencies;
4.NooneshallbeallowedtocollectRATAfrommore
thanonesource.
Ontheotherhand,themunicipalgovernmentmayprovideadditional
allowancesandotherbenefitstojudgesandothernational
governmentofficialsoremployeesassignedorstationedinthe
municipality,provided,thatthefinancesofthemunicipalityallow
thegrantthereofpursuanttoSection447,Par.1(xi),R.A.7160,and
providedfurther,thatsimilarallowance/additionalcompensationare
notgrantedbythenationalgovernmenttotheofficial/employee
assignedtothelocalgovernmentunitasprovidedunderSection3(e)
ofLocalBudgetCircularNo.53,dated01September1993.
TheconflictingprovisionsofSection447,Par.(1)(xi)oftheLocal
GovernmentCodeof1991andSection36oftheGeneral
AppropriationsActof1993[RA7645]havebeenharmonizedbythe
LocalBudgetCircularNo.53dated01September1993,issuedby
theDepartmentofBudgetandManagementpursuanttoitspowers
underSection25andSection327oftheLocalGovernment
Code.Thesaidcircularmustbeadheredtobythelocalgovernment
unitsparticularlySection3thereofwhichprovidestheimplementing
guidelinesofSection447,Par.(1)(xi)oftheLocalGovernment
Codeof1991inthegrantofallowancestonationalgovernment
officials/employeesassignedorstationedintheirrespectivelocal
governmentunits.
Consequently,thesubjectSBResolutionNo.101dated11May
1993oftheSangguniangBayanofNaujan,OrientalMindoro,having
failedtocomplywiththeinherentpreconditionasdefinedinSection
3(e)...isnullandvoid.Furthermore,theHonorableJudgeTomas
C.Leynes,beinganationalgovernmentofficialisprohibitedto

receiveadditionalRATAfromthelocalgovernmentfundpursuantto
Section36oftheGeneralAppropriationsAct(R.A.7645for1993)
andNationalCompensationCircularNo.67dated1January1992.
[8]
(emphasisours)
ASSIGNMENTS OF ERROR
Petitioner judge filed a motion for reconsideration of the
above decision but it was denied by the Commission in a
resolution dated May 30, 2000. Aggrieved, petitioner filed the
instant petition, raising the following assignments of error for
our consideration:
I
WHETHERORNOTRESOLUTIONNO.1O1,SERIESOF1993
OFNAUJAN,ORIENTALMINDORO,WHICHGRANTED
ADDITIONALALLOWANCETOTHEMUNICIPALTRIAL
JUDGEOFNAUJAN,ORIENTALMINDOROAND
INCREASINGHISCURRENTREPRESENTATIONAND
TRAVELLINGALLOWANCE(RATA)TOANAMOUNT
EQUIVALENTTOTHATRECEIVEDMONTHLYBY
SANGGUNIANGMEMBERSINPESOS:ONETHOUSANDSIX
HUNDRED(P1,600.00)EFFECTIVE1993,ISVALID.
II
WHETHERORNOTTHEPOWEROFMUNICIPAL
GOVERNMENTSTOGRANTADDITIONALALLOWANCES
ANDOTHERBENEFITSTONATIONALGOVERNMENT
EMPLOYEESSTATIONEDINTHEIRMUNICIPALITYISVERY
EXPLICITANDUNEQUIVOCALUNDERTHELOCAL
GOVERNMENTCODEOF1991PARTICULARLYSECTION447
INRELATIONTOSECTIONS17AND22THEREOF.

151
III
WHETHERORNOTTHEDEPARTMENTOFBUDGETAND
MANAGEMENT(DBM)CAN,BYTHEISSUANCEOFBUDGET
CIRCULARS,RESTRICTAMUNICIPALGOVERNMENT
FROMEXERCISINGITSGIVENLEGISLATIVEPOWERSOF
PROVIDINGADDITIONALALLOWANCESANDOTHER
BENEFITSTONATIONALEMPLOYEESSTATIONEDOR
ASSIGNEDTOTHEIRMUNICIPALITYFORASLONGAS
THEIRFINANCESSOALLOW.
IV
WHETHERORNOTTHELOCALGOVERNMENTCODEOF
1991PARTICULARLYSECTION447(a)(1)(xi)WAS
EXPRESSLYORIMPLIEDLYREPEALEDORMODIFIEDBY
REPUBLICACT7645ANDTHEGENERALAPPROPRIATIONS
ACTOF1993.
V
WHETHERORNOTPETITIONERWASENTITLEDTO
RECEIVETHEADDITIONALALLOWANCESGRANTEDTO
HIMBYTHEMUNICIPALITYOFNAUJAN,ORIENTAL
MINDOROBYVIRTUEOFITSRESOLUTIONNO.101,SERIES
OF1993.
POSITION OF COA
Respondent Commission on Audit opposes the grant by
the Municipality of Naujan of the P1,600 monthly allowance to
petitioner Judge Leynes for the reason that the municipality
could not grant RATA to judges in addition to the RATA already
received from the Supreme Court.[9] Respondent bases its
contention on the following:

1. National Compensation Circular No. 67 (hereafter NCC

No. 67) dated January 1, 1992 of the Department of
Budget and Management (DBM) which provides that
(a) the RATA of national officials and employees shall
be payable from the programmed appropriations or
personal services savings of the agency where such
officials or employees draw their salary and (b) no
one shall be allowed to collect RATA from more than
one source;
2. the General Appropriations Act of 1993 (RA 7645)
which provided that the RATA of national officials
shall be payable from the programmed appropriations
of their respective offices and
3. Local Budget Circular No. 53 (hereafter LBC No. 53)
dated September 1, 1993 of the DBM which prohibits
local government units from granting allowances to
national government officials or employees stationed
in their localities when such allowances are also
granted by the national government or are similar to
the allowances granted by the national government to
such officials or employees.[10]
POSITION OF PETITIONER
Petitioner judge, on the other hand, asserts that the
municipality is expressly and unequivocally empowered by RA
7160 (the Local Government Code of 1991) to enact
appropriation ordinances granting allowances and other
benefits to judges stationed in its territory. Section 447(a)(1)(xi)
of the Local Government Code of 1991 imposes only one
condition, that is, when the finances of the municipal
government allow. The Code does not impose any other
restrictions in the exercise of such power by the municipality.
Petitioner also asserts that the DBM cannot amend or modify a

152
substantive law like the Local Government Code of 1991
through mere budget circulars. Petitioner emphasizes that
budget circulars must conform to, not modify or amend, the
provisions of the law it seeks to implement.[11]
HISTORY OF GRANT OF
ALLOWANCES TO JUDGES
The power of local government units (LGUs) to grant
allowances to judges stationed in their respective territories
was originally provided by Letter of Instruction No. 1418 dated
July 18, 1984 (hereafter LOI No. 1418):
WHEREAS,theStateiscognizantoftheneedtomaintainthe
independenceoftheJudiciary;
WHEREAS,thebudgetaryallotmentoftheJudiciaryconstitutes
onlyasmallpercentageofthenationalbudget;
WHEREAS,presenteconomicconditionsadverselyaffectedthe
livelihoodofthemembersoftheJudiciary;
WHEREAS,somelocalgovernmentunitsareready,willingandable
topayadditionalallowancestoJudgesofvariouscourts withintheir
respectiveterritorialjurisdiction;
NOW,THEREFORE,I,FERDINANDE.MARCOS,Presidentof
theRepublicofthePhilippines,doherebydirect:
1.Section3ofLetterofImplementationNo.96is
herebyamendedtoreadasfollows:
3.Theallowancesprovidedinthislettershallbe
borneexclusivelybytheNational

Government.However,provincial,cityand
municipalgovernmentsmaypayadditional
allowancestothemembersandpersonnel
oftheJudiciaryassignedintheirrespective
areasoutofavailablelocalfunds butnotto
exceedP1,500.00;Provided,thatin
MetropolitanManila,thecityand
municipalgovernmentsthereinmaypay
additionalallowancesnot
exceedingP3,000.00.(emphasisours)[12]
On June 25, 1991, the DBM issued Circular No. 91-7
outlining the guidelines for the continued receipt of allowances
by judges from LGUs:
Consistentwiththeconstitutionalprovisiononthefiscalautonomy
ofthejudiciaryandthepolicyoftheNationalGovernmentof
allowinggreaterautonomytolocalgovernmentunits,judgesofthe
Judiciaryareherebyallowedtocontinuetoreceiveallowancesat
thesamerateswhichtheyhavebeenreceivingfromtheLocal
GovernmentUnitsasofJune30,1989,subjecttothefollowing
guidelines:
1.Thatthecontinuanceofpaymentofsubjectallowanceto
therecipientjudgeshallbeentirelyvoluntaryand
noncompulsoryonthepartoftheLocal
GovernmentUnits;
2.Thatpaymentoftheaboveshallalwaysbesubjecttothe
availabilityoflocalfunds;
3.Thatitshallbemadeonlyincompliancewiththepolicy
ofnondiminutionofcompensationreceivedbythe
recipientjudgebeforetheimplementationofthe
salarystandardization;

153
4.Thatthesubjectallowanceshallbegivenonlytojudges
whowerereceivingthesameasofJune30,
1989andshallbecoterminouswiththeincumbent
judges;and
5.Thatthesubjectallowanceshallautomaticallyterminate
upontransferofajudgefromonelocalgovernment
unittoanotherlocalgovernmentunit.(emphasis
ours)
On October 10, 1991, Congress enacted RA 7160,
otherwise known as the Local Government Code of 1991.
[13]
The power of the LGUs to grant allowances and other
benefits to judges and other national officials stationed in their
respective territories was expressly provided in Sections
447(a)(1)(xi), 458(a)(1)(xi) and 468(a)(1)(xi) of the Code.
On March 15, 1994, the DBM issued Local Budget
Circular No. 55 (hereafter LBC No. 55) setting out the
maximum amount of allowances that LGUs may grant to
judges. For provinces and cities, the amount should not
exceed P1,000 and for municipalities, P700.
On December 3, 2002, we struck down the above circular
in Dadole, et al. vs. COA.[14] We ruled there that the Local
Government Code of 1991 clearly provided that LGUscould
grant allowances to judges, subject only to the condition that
the finances of the LGUs allowed it. We held that setting a
uniform amount for the grant of allowances (was) an
inappropriate way of enforcing said criterion. Accordingly, we
declared that the DBM exceeded its power of supervision
over LGUs by imposing a prohibition that did not jibe with the
Local Government Code of 1991.[15]
ESTABLISHED PRINCIPLES INVOLVED

From the foregoing history of the power of LGUs to grant

allowances to judges, the following principles should be noted:
1. the power of LGUs to grant allowances to judges
long been recognized (since 1984 by virtue of
No. 1418) and, at present, it is expressly
unequivocally provided in Sections 447, 458
468 of the Local Government Code of 1991;

has
LOI
and
and

2. the issuance of DBM Circular No. 91-7 dated June 25,

1991 and
LBC
No.
55
dated March
15,
1994 indicates that the national government
recognizes the power of LGUsto grant such
allowances to judges;
3. in

Circular No. 91-7, the national government

merely provides the guidelines for the continued
receipt of allowances by judges from LGUs while in
LBC No. 55, the national government merely tries to
limit the amount of allowances LGUs may grant to
judges and

4. in the recent case of Dadole, et al. vs. COA, the Court

upheld the constitutionally enshrined autonomy
of LGUs to grant allowances to judges in any
amount deemed
appropriate,
depending
on
availability of funds, in accordance with the Local
Government Code of 1991.
OUR RULING
We rule in favor of petitioner judge. Respondent COA
erred in opposing the grant of the P1,600 monthly allowance
by the Municipality of Naujan to petitioner Judge Leynes.
DISCUSSION OF OUR RULING

154
Section 447(a)(1)(xi) of RA 7160, the Local Government
Code of 1991, provides:
(a)Thesangguniangbayan,asthelegislativebodyofthe
municipality,shallenactordinances,approveresolutionsand
appropriatefundsforthegeneralwelfareofthemunicipalityandits
inhabitants...,andshall:
(1)Approveordinancesandpassresolutionsnecessaryforan
efficientandeffectivemunicipalgovernment,andinthisconnection
shall:
xxxxxxxxx
(xi)Whenthefinancesofthemunicipalgovernmentallow,provide
foradditionalallowancesandotherbenefitstojudges,prosecutors,
publicelementaryandhighschoolteachers,andothernational
governmentofficialsstationedinorassignedtothemunicipality;
(emphasisours)
Respondent COA, however, contends that the above
section has been repealed, modified or amended by NCC No.
67 dated January 1, 1992, RA 7645 (the General
Appropriations Act of 1993) and LBC No. 53 dated September
1, 1993.[16]
It is elementary in statutory construction that an
administrative circular cannot supersede, abrogate, modify or
nullify a statute. A statute is superior to an administrative
circular, thus the latter cannot repeal or amend it. [17] In the
present case, NCC No. 67, being a mere administrative
circular, cannot repeal a substantive law like RA 7160.
It is also an elementary principle in statutory construction
that repeal of statutes by implication is not favored, unless it is

manifest that the legislature so intended. The legislature is

assumed to know the existing laws on the subject and cannot
be presumed to have enacted inconsistent or conflicting
statutes.[18] Respondent COA alleges that Section 36 of RA
7645 (the GAA of 1993) repealed Section 447(a)(l)(xi) of RA
7160 (the LGC of 1991). A review of the two laws, however,
shows that this was not so. Section 36 of RA 7645 merely
provided for the different rates of RATA payable to national
government officials or employees, depending on their
position, and stated that these amounts were payable from the
programmed appropriations of the parent agencies to which
the concerned national officials or employees belonged.
Furthermore, there was no other provision in RA 7645 from
which a repeal of Section 447(a) (l)(xi) of RA 7160 could be
implied. In the absence, therefore, of any clear repeal of
Section 447(a)(l)(xi) of RA 7160, we cannot presume such
intention on the part of the legislature.
Moreover, the presumption against implied repeal
becomes stronger when, as in this case, one law is special
and the other is general.[19] The principle is expressed in the
maxim generalia specialibus non derogant, a general law does
not nullify a specific or special law. The reason for this is that
the legislature, in passing a law of special character, considers
and makes special provisions for the particular circumstances
dealt with by the special law. This being so, the legislature, by
adopting a general law containing provisions repugnant to
those of the special law and without making any mention of its
intention to amend or modify such special law, cannot be
deemed to have intended an amendment, repeal or
modification of the latter.[20]
In this case, RA 7160 (the LGC of 1991) is a special
law[21] which exclusively deals with local government units
(LGUs), outlining their powers and functions in consonance
with the constitutionally mandated policy of local autonomy. RA

155
7645 (the GAA of 1993), on the other hand, was a general
law[22] which outlined the share in the national fund of all
branches of the national government. RA 7645 therefore,
being a general law, could not have, by mere implication,
repealed RA 7160. Rather, RA 7160 should be taken as the
exception to RA 7645 in the absence of circumstances
warranting a contrary conclusion.[23]
The controversy actually centers on the seemingly
sweeping provision in NCC No. 67 which states that no one
shall be allowed to collect RATA from more than one source.
Does this mean that judges cannot receive allowances
from LGUs in addition to the RATA from the Supreme Court?
For reasons that will hereinafter be discussed, we answer in
the negative.
The pertinent provisions of NCC No. 67 read:
3.RulesandRegulations:
3.1.1PaymentofRATA,whethercommutableor
reimbursable,shallbeinaccordancewith
theratesprescribedforeachofthefollowing
officialsandemployeesandthoseof
equivalentranks,andtheconditions
enumeratedunderthepertinentsectionsof
theGeneralProvisionsoftheannualGeneral
AppropriationsAct(GAA):
xxxxxxxxx
4.FundingSource:
Inallcases,commutableandreimbursableRATAshallbepaidfrom
theamountappropriatedforthepurposeandotherpersonalservices

savingsoftheagencyorprojectfromwheretheofficialsand
employeescoveredunderthisCirculardrawtheirsalaries.Noone
shallbeallowedtocollectRATAfrommorethanone
source.(emphasisours)
In construing NCC No. 67, we apply the principle in
statutory construction that force and effect should not be
narrowly given to isolated and disjoined clauses of the law but
to its spirit, broadly taking all its provisions together in one
rational view.[24] Because a statute is enacted as a whole and
not in parts or sections, that is, one part is as important as the
others, the statute should be construed and given effect as a
whole. A provision or section which is unclear by itself may be
clarified by reading and construing it in relation to the whole
statute.[25]
Taking NCC No. 67 as a whole then, what it seeks to
prevent is the dual collection of RATA by a national official from
the budgets of more than one national agency. We emphasize
that the other source referred to in the prohibition is another
national agency. This can be gleaned from the fact that the
sentence no one shall be allowed to collect RATA from more
than one source (the controversial prohibition) immediately
follows the sentence that RATA shall be paid from the budget
of the national agency where the concerned national officials
and employees draw their salaries. The fact that the other
source is another national agency is supported by RA 7645
(the GAA of 1993) invoked by respondent COA itself and, in
fact, by all subsequent GAAs for that matter, because
the GAAs all essentially provide that (1) the RATA of national
officials shall be payable from the budgets of their respective
national agencies and (2) those officials on detail with other
national agencies shall be paid their RATA only from the
budget of their parent national agency:
Section36,RA7645,GeneralAppropriationsActof1993:

156
RepresentationandTransportationAllowances.Thefollowing
officialsandthoseofequivalentrankasmaybedeterminedbythe
DepartmentofBudgetandManagement(DBM)whileintheactual
performanceoftheirrespectivefunctionsareherebygranted
monthlycommutablerepresentationandtransportationallowances
payablefromtheprogrammedappropriationsprovidedfortheir
respectiveoffices,notexceedingtheratesindicatedbelow,which
shallapplytoeachtypeofallowance:
xxxxxxxxx
Officialsondetailwithotheroffices,includingofficialsofthe
CommissionofAuditassignedtoserveotherofficesoragencies,
shallbepaidtheallowancehereinauthorizedfromthe
appropriationsoftheirparentagencies.(emphasisours)
Clearly therefore, the prohibition in NCC No. 67 is only
against the dual or multiple collection of RATA by a national
official from the budgets of two or more national
agencies.Stated otherwise, when a national official is on detail
with another national agency, he should get his RATA only
from his parent national agency and not from the other
national agency he is detailed to.

Since the other source referred in the controversial

prohibition is another national agency, said prohibition clearly
does not apply to LGUs like the Municipality of Naujan.
National agency of course refers to the different offices,
bureaus and departments comprising the national
government. The budgets of these departments or offices are
fixed annually by Congress in the General Appropriations Act.
[26]
An LGU is obviously not a national agency. Its annual
budget
is
fixed
by
its
own
legislative
council
(SangguniangBayan, Panlungsod or Panlalawigan), not by
Congress. Without doubt, NCC No. 67 does not apply
to LGUs.
The prohibition in NCC No. 67 is in fact an administrative
tool of the DBM to prevent the much-abused practice of
multiple allowances, thus standardizing the grant of RATA by
national agencies. Thus, the purpose clause of NCC No. 67
reads:
ThisCircularisbeingissuedtoensureuniformityandconsistencyof
actionsonclaimsforrepresentationandtransportationallowance
(RATA)whichisprimarilygrantedbylawtonationalgovernment
officialsandemployeestocoverexpensesincurredinthedischarge
orperformanceoftheirdutiesandresponsibilities.
By no stretch of the imagination can NCC No. 67 be
construed as nullifying the power of LGUs to grant allowances
to judges under the Local Government Code of 1991. It was
issued primarily to make the grant of RATA to national officials
under the national budget uniform. In other words, it applies
only to the national funds administered by the DBM, not the
local funds of LGUs.
To rule against the power of LGUs to grant allowances to
judges as what respondent COA would like us to do will
subvert the principle of local autonomy zealously guaranteed

157
by the Constitution.[27] The Local Government Code of 1991
was specially promulgated by Congress to ensure the
autonomy of local governments as mandated by the
Constitution. By upholding, in the present case, the power
of LGUs to grant allowances to judges and leaving to their
discretion the amount of allowances they may want to grant,
depending on the availability of local funds, we ensure the
genuine and meaningful local autonomy of LGUs.
We now discuss the next contention of respondent COA:
that the
resolution
of
the Sangguniang Bayan of Naujan granting
the P1,600
monthly allowance to petitioner judge was null and void
because it failed to comply with LBC No. 53 dated September
1, 1993:
Sec.3Allowances.LGUsmaygrantallowances/additional
compensationtothenationalgovernmentofficials/employees
assignedtotheirlocalityatratesauthorizedbylaw,rulesand
regulationsandsubjecttothefollowingpreconditions:
a.Thattheannualincomeorfinancesofthe
municipality,cityorprovinceascertifiedby
theAccountantconcernedwillallowthe
grantoftheallowances/additional
compensationwithoutexceedingthegeneral
limitationsforpersonalservicesunder
Section325ofRA7160;
b.ThatthebudgetaryrequirementsunderSection324
ofRA7160includingthefullrequirementof
RA6758havebeensatisfiedandprovided
fullyinthebudgetascertifiedbytheBudget
OfficerandCOArepresentativeintheLGU
concerned;

c.ThattheLGUhasfullyimplementedthedevolution
ofpersonnel/functionsinaccordancewith
theprovisionsofRA7160;
d.ThattheLGUhasalreadycreatedmandatory
positionsprescribedinRA7160.
e.Thatsimilarallowances/additionalcompensation
arenotgrantedbythenationalgovernment
totheofficials/employeesassignedtothe
LGU.
Though LBC No. 53 of the DBM may be considered within
the ambit of the President's power of general supervision
over LGUs,[28] we rule that Section 3, paragraph (e) thereof is
invalid. RA 7160, the Local Government Code of 1991, clearly
provides that provincial, city and municipal governments may
grant allowances to judges as long as their finances
allow. Section 3, paragraph (e) of LBC No. 53,
by outrightly prohibiting LGUs from granting allowances to
judges whenever such allowances are (1) also granted by the
national government or (2) similar to the allowances granted
by the national government, violates Section 447(a)(l)(xi) of
the Local Government Code of 1991.[29] As already stated, a
circular must conform to the law it seeks to implement and
should not modify or amend it.[30]
Moreover,
by
prohibiting LGUs from
granting
allowances similar to the allowances granted by the national
government, Section 3 (e) of LBC No. 53 practically
prohibits LGUsfrom granting allowances to judges and, in
effect, totally nullifies their statutory power to do so. Being
unduly restrictive therefore of the statutory power of LGUs to
grant allowances to judges and being violative of their
autonomy guaranteed by the Constitution, Section 3,
paragraph (e) of LBC No. 53 is hereby declared null and void.

158
Paragraphs (a) to (d) of said circular, however, are valid
as they are in accordance with Sections 324[31] and 325[32] of
the Local Government Code of 1991; these respectively
provide for the budgetary requirements and general limitations
on the use of provincial, city and municipal funds. Paragraphs
(a) to (d) are proper guidelines for the condition provided in
Sections 447, 458 and 468 of the Local Government Code of
1991 that LGUs may grant allowances to judges if their funds
allow.[33]
Respondent COA also argues that Resolution No. 101 of
the Sangguniang Bayan of Naujan failed to comply with
paragraphs (a) to (d) of LBC No. 53, thus it was null and void.
The argument is misplaced.
Guidelines
(a)
to
(d)
were
met
when
the Sangguniang Panlalawigan of Oriental Mindoro approved
Resolution
No.
101
of
the Sangguniang Bayan of Naujan granting theP1,600 monthly
allowance to petitioner judge as well as the corresponding
budgets of the municipality providing for the said monthly
allowance to petitioner judge. Under Section 327 of the Local
Government
Code
of
1991,
the Sangguniang Panlalawigan was specifically tasked to
review the appropriation ordinances of its component
municipalities to ensure compliance with Sections 324 and 325
of
the
Code.
Considering
said
duty
of
the Sangguniang Panlalawigan, we will assume, in the
absence
of
proof
to
the
contrary,
that
the Sangguniang Panlalawigan of Oriental Mindoro performed
what the law required it to do, that is, review the resolution and
the corresponding budgets of the Municipality ofNaujan to
make sure that they complied with Sections 324 and 325 of
the
Code.[34] We
presume
the
regularity
of
the Sangguniang Panlalawigans official act.

Moreover, it is well-settled that an ordinance must be

presumed valid in the absence of evidence showing that it is
not in accordance with the law.[35] Respondent COA had the
burden of proving that Resolution No. 101 of
the Sangguniang Bayan of Naujan did not comply with the
condition provided in Section 447 of the Code, the budgetary
requirements and general limitations on the use of municipal
funds provided in Sections 324 and 325 of the Code and the
implementing guidelines issued by the DBM, i.e., paragraphs
(a) to (d), Section 3 of LBC No. 53. Respondent COA also had
the burden of showing that the Sangguniang Panlalawigan of
Oriental Mindoro erroneously approved said resolution despite
its non-compliance with the requirements of the law. It failed to
discharge such burden. On the contrary, we find that the
resolution of the Municipality ofNaujan granting the P1,600
monthly allowance to petitioner judge fully complied with the
law. Thus, we uphold its validity.
In
sum,
we
hereby
affirm
the
power
of
the Municipality of Naujan to grant the questioned allowance to
petitioner Judge Leynes in accordance with the constitutionally
mandated policy of local autonomy and the provisions of the
Local Government Code of 1991. We also sustain the validity
of
Resolution
No.
101,
Series
of
1993,
of
theSangguniang Bayan of Naujan for being in accordance with
the law.
WHEREFORE, the petition is hereby GRANTED. The
assailed decision dated September 14, 1999 of the
Commission of Audit is hereby SET ASIDE and Section 3,
paragraph (e) of LBC No. 53 is hereby declared NULL and
VOID.
No costs.
SO ORDERED.

159
Davide, Jr., C.J., Puno, Vitug, Panganiban, Quisumbing,
Ynares-Santiago,
Sandoval-Gutierrez,
Carpio, AustriaMartinez, Carpio-Morales, Callejo, Sr., Azcuna, and Tinga,
JJ., concur.

[1]

Penned by Chairman Celso D. Gagan and Commissioners

Raul C. Flores and Emmanuel M. Dalman.

increase of P656), COA opposed the grant of the

whole P1,600 monthly allowance because the
municipality supposedly could not grant RATA to
petitioner judge in addition to the RATA already granted
by the Supreme Court. See Comment dated October
23,
2000 and
Memorandum
dated June
26,
2001, Rollo, pp. 53, 103.
[10]

Rollo, pp. 22-25, 31-33, 36-38, 57-64.

[11]

Rollo, pp. 10-17.

In Allarde vs. Commission on Audit, 218 SCRA 227 [1993],
we ruled that the use of the word may in LOI No. 1418
signifies that the allowance may not be demanded as a
matter of right, but

[2]

Respondent COA erroneously considered the P944 monthly

allowance as RATA from the Supreme Court in its
Comment dated October 23, 2000 and Memorandum
dated June 26, 2001. Rollo, pp. 53, 103.

[12]

[3]

Annex "D," Certification of the Office of the Municipal

Accountant; Petition for Certiorari, p. 5.

[4]

Annex "E," Resolution No. 101, Series of 1991, Rollo, p. 35.

[5]

Petition for Certiorari, p. 4.

is entirely dependent on the will of the municipality concerned.

It should be treated as an honorarium, an amount that
is given not as a matter of obligation but in appreciation
of services rendered, a voluntary donation in
consideration for services which admit of no
compensation in money (Santiago vs. Commission on
Audit, 199 SCRA 128, 130).

[6]

Rollo, p. 38.

[13]

The law took effect on January 1, 1992.

Rollo, pp. 40-42.

[14]

G.R. No. 125350, December 3, 2002.

Rollo, pp. 22-25.

[15]

Instead of filing a comment on behalf of respondent

COA in this case, the Solicitor General filed a
manifestation supporting the position of petitioner
judges. The Solicitor General argued that (1) DBM
only enjoyed the power to review and determine
whether disbursement of funds were made in
accordance with the ordinance passed by a LGU while

[7]

[8]

[9]

Respondent
COA erroneously considered
the P944
monthly allowance being received by petitioner judge
from the local funds of the municipality since 1984 as
RATA from the Supreme Court. Thus, in 1993 when the
municipality increased said allowance to P1,600 (an

160
(2) the COA had no more than auditorial visitation
powers over the LGUs pursuant to Section 348 of RA
7160 which provides for the power to inspect at any
time the financial accounts of LGUs. Moreover, the
Solicitor General opined that the DBM and the
respondent are only authorized under RA 7160 to
promulgate a Budget Operations Manual for LGUs, to
improve and systematize methods, techniques and
procedures
employed
in
budget
preparation,
authorization, execution and accountability pursuant to
Section 354 of RA 7160. The Solicitor General pointed
out that LBC 55 was not exercised under any of the
aforementioned provisions.
[16]

Rollo, pp. 22-25.

[17]

China Banking Corporation vs. Court of Appeals, 265 SCRA

327 [1996].

[18]

U.S. vs. Palacio, 33 Phil 208 [1916]; Maceda vs. Macaraeg,

197 SCRA 771 [1991].

[19]

Manila Railroad Co. vs. Rafferty, 40 Phil 224 [1919];

Commissioner of Internal Revenue vs. Court of
Appeals, 207 SCRA 487 [1992].

[20]

De Villa vs. Court of Appeals, 195 SCRA 722 [1991].

[21]

A special law is one which relates to particular persons or

things of a class, or to a particular portion or section of
the state only. U.S. vs. Serapio, 23 Phil 584 [1912].

[22]

A general law is one which affects all people of the state or

all of a particular class of persons in the state or
embraces a class of subjects or places and does not
omit any subject or place naturally belonging to such

class. U.S. vs. Serapio,

23
Phil
[1912]; Valera vs. Tuason, 80 Phil
823
Villegas vs. Subido, 41 SCRA 190 [1971].

584
[1948];

[23]

Villegas vs. Subido, 41 SCRA 190 [1971].

[24]

Araneta vs. Concepcion, 99 Phil 709 [1956]; Sotto vs. Sotto,

43 Phil 688 [1922].

[25]

Maddumba vs. Ozaeta,

82
Phil
345
[1948];
Lopez vs. El Hogar Filipino, 47 Phil 249 [1925].

[26]

National agencies included in the national budget are

Congress, Office of the President, Office of the VicePresident, DA, DAR, DBM, DECS, DENR, DOF, DFA,
DOH, DILG, DOJ, DOLE, DND, DPWH, DOST, DSWD,
DOT, DTI, DOTC, NEDA, Office of the Press Secretary,
the Judiciary, Constitutional Offices, Commission on
Human Rights, State Universities and Colleges and
Autonomous Regions. See the GAA of 1993 as
example.

[27]

Section 25, Article II; Section 2, Article X, 1987 Constitution.

[28]

The LBC No. 53 was issued by the DBM by virtue of

Administrative Order No. 42 which clarified

the role of the DBM in the administration of the compensation

and position classification systems in the LGUs and
mandated it, among other things, to provide guidelines
for the grant of allowances and additional forms of
compensation by the LGUs. AO No. 42 was issued by
the President by virtue of his power of general
supervision over the LGUs under Section 25 of the
Local Government Code of 1991.

161
[29]

Also Section 458(a)(1)(xi) and Section 468(a)(1)(xi), Local

Government Code of 1991.

[30]

Supra note 17.

[31]

Section 324. Budgetary Requirements. - The budgets of

local government units for any fiscal year shall comply
with the following requirements:

(a) The aggregate amount appropriated shall not exceed the

estimates of income;
(b) Full provision shall be made for all statutory and
contractual obligations of the local government unit
concerned: Provided, however, that the amount of
appropriations for debt servicing shall not exceed
twenty percent (20%) of the regular income of the local
government unit concerned;
(c) In the case of provinces, cities, and municipalities, aid to
component barangays shall be provided in amounts of
not less than One thousand pesos (P1,000.00)
per barangay; and
(d) Five percent (5%) of the estimated revenue from regular
sources shall be set aside as an annual lump sum
appropriation for unforeseen expenditures arising from
the occurrence of calamities: Provided, however, that
such appropriation shall be used only in the area, or a
portion thereof, of the local government unit or other
areas declared in a state of calamity by the President.
[32]

Section 325. General Limitations. - The use of the

provincial, city and municipal funds shall be subject to
the following limitations:

(a) The total appropriations, whether annual or supplemental,

for personal services of a local government unit for one
(1) fiscal year shall not exceed forty-five (45%) in the
case of first to third class provinces, cities, and
municipalities, and fifty-five percent (55%) in the case
of fourth class or lower, of the total annual income from
regular sources realized in the next preceding fiscal
year. The appropriations for salaries, wages,
representation and transportation allowances of
officials and employees of the public utilities and
economic
enterprises
owned,
operated,
and
maintained by the local government unit concerned
shall not be included in the annual budget or in the
computation of the maximum amount for personal
services. The appropriations for the personal services
of such economic enterprises shall be charged to their
respective budgets;
(b) No official or employee shall be entitled to a salary rate
higher than the maximum fixed for his position or other
positions of equivalent rank by applicable laws or rules
and regulations issued thereunder;
(c) No local fund shall be appropriated to increase or adjust
salaries or wages of officials and employees of the
national government, except as may be expressly
authorized by law;
(d) In cases of abolition of positions and the creation of new
ones resulting from the abolition of existing positions in
the career service, such abolition or creation shall be
made in accordance with pertinent provisions of this
code and the civil service law, rules and regulations;
(e) Positions in the official plantilla for career positions which
are occupied by incumbents holding permanent

162
appointments shall
appropriations;

be

covered

by

adequate

(f) No changes in designation or nomenclature of positions

resulting in a promotion or demotion in rank or increase
or decrease in compensation shall be allowed, except
when the position is actually vacant, and the filling of
such positions shall be strictly made in accordance with
the civil service law, rules and regulations;
(g) The creation of new positions and salary increases or
adjustments shall in no case be made retroactive; and
(h) The annual appropriations for discretionary purposes of the
local chief executive shall not exceed two percent (2%)
of the actual receipts derived from basic real property
tax in the next preceding calendar year. Discretionary
funds shall be disbursed only for public purposes to be
supported by appropriate vouchers and subject to such
guidelines as may be prescribed by law. No amount
shall be appropriated for the same purpose except as
authorized under this Section.

[33]

Paragraph (a) should be read in conjunction with the recent

circular of the DBM, Local Budget

Circular No. 75 dated July 12, 2002 entitled Guidelines on

Personal Services Limitation. Section 5.5 thereof
entitled Honoraria of National Government Personnel
provides: The appropriation intended to be granted as
honoraria and similar benefits to national government
personnel shall be classified as Maintenance and Other
Operating Expenses (MOOE) since these are not
personal services costs of the local government unit.
[34]

Figuerres vs. Court of Appeals, 305 SCRA 206 [1999].

[35]

Ibid.