ARIS (Phil.) Inc., v. National Labor Relations Commission, et.

al
GR 90501 August 5, 1991

DOCTRINE: Laws are presumed constitutional. To justify nullification of a law, there

must be a clear and unequivocal breach of the constitution, not a doubtful and
argumentative implication; a law shall not be declared invalid unless the conflict
with the constitution is clear beyond reasonable doubt.

FACTS:
• April 11, 1988 - the employees of ARIS (Phil.) Inc. (private respondents)
requested for a grievance conference for the failure of the management to
attend to their complaints concerning their working surroundings.
Unfortunately, the grievance conference was not arranged, thus, the
employees resorted to conduct a rally and to protest the management’s long
silence and inaction to their complaints
• April 12, 1988 – the management issued a memorandum to those employees
who actively participated in the rally and required them to explain why they
should not be terminated from the service of their conduct. Despite their
explanation, the employees were still dismissed for violation of company
rules and regulations.
• The dismissed employees filed a complaint for illegal dismissal against ARIS
and Mr. Gavino Bayan with NLCR-NCR.
• June 22, 1989 – Labor Arbiter Felipe Garduque III handed down a decision
ordering ARIS to reinstate within 10 days from receipt of the decision the
dismissed employees to their former respective positions or any substantial
equivalent positions if already filled up, w/o loss of seniority right and
privileges but with limited backwages of six months except complainant
Leodegario de Guzman.
• July 19, 1989 – the dismissed employees filed a Motion for Issuance of a Writ
of Execution pursuant to Sec. 12 of RA 6715. For the succeeding days, the
petitioner and private respondents filed an appeal and counter-appeal.
• August 29, 1989 – ARIS filed an Opposition to the motion for execution

CONTENTIONS:

Petitioner: Sec.12 of RA 6715 on execution pending appeal cannot be applied

retroactively on cases pending at the time of its effectivity because it does not
expressly provide that it shall be given retroactive effect and to give retroactive
effect to Sec. 12 thereof to pending cases would not only result in the imposition of
additional obligation on petitioner but would also dilute its right to appeal since it
would be burdened with the consequences of reinstatement w/o the benefit of a
final judgment.

Respondents (NLRC thru OSG): Sec. 12 of RA 6715 being merely procedural in

nature, it can apply to cases pending at the time of its effectivity on the theory that
no one can claim a vested right in a rule of procedure. Such a law is compatible with
the constitutional provision on protection to labor.
Petitioner: Sec. 12 of RA 6715 is violative of constitutional guaranty of due process –
it being oppressive and unreasonable.

Respondents (NLRC thru OSG): The provision concerning the mandatory and
automatic reinstatement of an employee whose dismissal is found unjustified by the
labor arbiter is a valid exercise of the police power of the state and the contested
provision is then a police legislation.

ISSUE: Whether or not Sec. 12 of RA 6715 is unconstitutional.

RULING: Sec. 12 of RA 6715 is not unconstitutional. The validity of the questioned

law is not only supported and sustained by the foregoing consideration. As
contended by the SG, it is a valid exercise of the police power of the State.
Certainly, if the right of an employer to freely discharge his employees is subject to
regulation by the State, basically in the exercise of its permanent police power on
the theory that the preservation of the lives of the citizens is the basic duty of the
State, that is more vital than the preservation of corporate profits. Then, by and
pursuant to the same power, the State may authorize and immediate
implementation, pending appeal, of a decision reinstating a dismissed or separated
employee since that saving act is designed to stop, although temporarily since the
appeal may be decided in favor of the appellant, a continuing threat of danger to
the survival or even the life of the dismissed or separated employee and his family.

* PETITION DISMISSED.
 Mecano v. Commission on Audit
GR 103982 December 11, 1992

DOCTRINE: Repeal of statute by implication is not favored. In order to effect a

repeal by implication, the later statute must be so irreconcilably inconsistent and
repugnant with the existing law that they cannot be made to reconcile and stand
together.

FACTS:
• Antonio Mecano is a Director II of NBI who was hospitalized for cholecystitis in
less than two weeks from which he incurred medical and hospitalization
expenses, the total amount of which he is claiming from COA.
• May 11, 1990 – thru a memo to Director Lim of NBI, Mecano requested for
reimbursement for his expenses on the ground that he is entitled to the
benefits under Sec. 699 of RAC: xxx In case of sickness caused by or
connected directly with the performance of some act in the line of duty, the
Department head may in his discretion authorize the payment of the
necessary hospital fees. Xxx
• June 22, 1990 – Director Lim forwarded Mecano’s claim (thru 1st
Endorsement) to the Secretary of Justice together with the comment and
recommendation of Chief, LED of the NBI. Finding Mecano’s illness to be
service-connected, the Committee on Physical Examination of the
Department of Justice favorably recommended the payment of Mecano’s
claim.
• November 21, 1990 – in a 4th Endorsement, the then Usec Bello of Justice
Department returned Mecano’s claim to Director Lim having considered the
statements of COA Chairman that the RAC being relied upon by Mecano was
repealed by the Administrative Code of 1987.
• In response, Mecano re-submitted his claim to Director Lim with the copy of
Opinion No, 73 of then Sec. of Justice Franklin Drilon stating that the issuance
of the Administrative Code of 1987 aid not operate to repeal or abrogate in
its entirety the RAC, the particular Sec. 699 of RAC.
• May 10, 1991 – Director Lim transmitted anew Mecano’s claim to then Usec
Bello for favorable consideration.
• July 2, 1991 – Sec. Drilon forwarded Mecano’s claim to the COA Chairman.
• January 16, 1992 – COA Chair Domingo denied Mecano’s claim on the ground
that Sec. 699 of RAC has been repealed by the Administrative Code of 1987,
solely for the reason that the same section was not re-stated nor re-enacted
in the Administrative Code of 1987. He commented that the claim may be
 filed with ECC considering that the illness of Mecano occurred after the
effectivity of the Administrative Code of 1987.
• February 7, 1992 – Usec Montenegro returned Mecano’s claim to Director Lim
with the advice that Mecano may elevate the matter to Supreme Court if he
so desires.

CONTENTIONS:

Petitioner: Sec. 699 of RAC was not repealed by the Administrative Code of 1987
based on Opinion No. 73 of Sec. Drilon. In the event that his claim is filed in ECC, as
suggested by COA, he would still not be barred from filing a claim under Sec. 699 of
RAC.

Respondent:
(1) The enactment of the Administrative Code of 1987 operated to revoke or
supplant in its entirety the RAC of 1917. From the “whereas clauses” of the
new Administrative Code, it can be gleaned that it was the intent of the
legislature to repeal the old Code.
(2) Employment-related sickness, injury or death is adequately covered by ECC’s
Program under PD 626 such that to allow simultaneous recovery of benefits
under both laws on account of the same contingency would be unfair and
unjust to the Government.

ISSUE: Whether or not the enactment of the Administrative Code of 1987 operates
to repeal the Revised Administrative Code of 1917.

RULING: The enactment of the Administrative Code of 1987 did not operate to
repeal the Revised Administrative Code of 1917. The Repealing Clause indicated in
Sec. 27 of the Administrative Code of 1987 is not an express repealing clause
because it fails to identify or designate the act or acts that are intended to be
repealed. It is a clause which predicates the intended repeal under the condition
that a substantial conflict must be found in existing and prior acts. The failure to
add a specific repealing clause indicates that the intent was not to repeal any
existing law, unless an irreconcilable inconsistency and repugnancy exist in the
terms of the new and old laws. This latter situation falls under the category of an
implied repeal.

Comparing the two Codes, it is apparent that the new Code does not cover nor
attempt to cover the entire subject matter of the Old Code. There are several
matters treated in the Old Code which are not found in the new Code, such as the
provisions on notaries public, the leave law, the public bonding law, military
reservations, claims for sickness benefits under Sec. 699 and still others.

It is a well-settled rule of statutory construction that repeals of statutes by

implication are not favored. The presumption is against inconsistency and
repugnancy for the legislature is presumed to know the existing laws on the subject
and not to have enacted inconsistent or conflicting statutes.

*PETITION GRANTED AND COA WAS ORDERED TO GIVE DUE COURSE TO

PETITIONER’S CLAIM FOR BENEFITS.

Additional Info:

Two Categories of Implied Repeal:

(1) Where provisions in the two acts on the same subject matter are in an
irreconcilable conflict, the later act to the extent of the conflict constitutes an
implied repeal of the earlier one.
(2) If the later act covers the whole subject of the earlier one and is clearly
intended as a substitute, it will operate to repeal the earlier law.

Commissioner of Internal Revenue v. Esso Standard Eastern, Inc.

DOCTRINE: Statutes must receive a sensible construction such as will give effect to
the legislative intention so as to avoid an unjust or absurd conclusion.

FACTS:
• ESSO overpaid its 1959 income tax by P221,033.00. It was accordingly
granted a tax credit in this amount by the Commissioner on August 5, 1964.
• 1960 – ESSO’s payment of its income tax for 1960 was found to be short by
P367,994.00.
• July 10, 1964 – the Commissioner wrote to ESSO demanding payment of the
deficiency tax, together with interest for the period from April 18, 1961 to
April 18,1964.
• August 10, 1964 – ESSO paid under protest the amount alleged to be due,
including the interest as reckoned by the Commissioner. ESSO protested the
computation of interest, contending it was more than that properly due. It
claimed that it should not have been required to pay interest on the total
amount of the deficiency tax, P367,994.00, but only on the amount of
P146,961.00, the difference of said deficiency (P367,994.00), and ESSO’s
earlier overpayment of P221,033.00 (for which it had been granted a tax
credit). ESSO thus asked for a refund.
• The Commissioner of Internal Revenue denied the claim for refund. ESSO
appealed to the Court of Tax Appeals. That Court ordered payment to ESSO
of its refund-claim in the amount of P39,787.94 as overpaid interest. Hence,
this appeal by the Commissioner
CONTENTION:
Petitioner: Income taxes are determined and paid on annual basis, and that such
determination and payment of annual taxes are separate and independent
transactions; and that a tax credit could not be considered until it has been finally
approved and the taxpayer duly notified thereof. Since in this case, the tax credit of
P221,033.00 was approved only on August 5, 1964, it could not be availed of in
reduction of ESSO’s earlier tax deficiency for the year 1960; as of that year, 1960,
there was as yet no tax credit to speak of, which would reduce the deficiency tax
liability for 1960.

ISSUE: Whether or not ESSO is entitled to refund for the difference between
deficiency tax and ESSO’s earlier overpayment.

RULING: ESSO is entitled to refund for the difference between deficiency tax and
ESSO’s earlier overpayment. The fact is that, as respondent Court of Tax Appeals
has stressed, as early as July 15, 1960,the Government already had in its hands the
sum of P221,033.00 representing excess payment. Having been paid and received
by mistake, as petitioner Commissioner subsequently acknowledged, that sum
unquestionably belonged to ESSO.

*PETITION FOR REVIEW DENIED.