TITLE

May 29, 1959 G.R. No. L-11860 COMMISSIONER OF CUSTOMS, petitioner, vs. LT. COL. LEOPOLDO RELUNIA, respondent. Assistant Solicitor General Jose P. Alejandro and Solicitor Frine C. Zaballero for petitioner. Ricardo C. Arcilla for respondent. Montemayor, J.: This is an appeal by the Commissioner of Customs from the decision of the Court of Tax Appeals, the dispositive portion of which reads: FOR THE FOREGOING CONSIDERATION, we are of the opinion that the forfeiture of the electric range in question under Section 1363 (g.) is illegal. Accordingly, it is hereby ordered that the said article be released to the herein petitioner upon payment of the corresponding customs duties, taxes or charges. Without pronouncement as to costs. On December 10, 1953, the RPS "MISAMIS ORIENTAL"' a unit of the Philippine Navy was dispatched to Japan to transport contingents of the 14th BCT bound for Pusan, Korea, and carry Christmas gifts for our soldiers there. It seems that thereafter, it was used for transportation purposes in connection with the needs of our soldiers there and made trips between Korea and Japan, so that it did not return to the Philippine until September 2, 1954. While in Japan, it loaded 180 cases containing various articles subject to customs duties. These articles have been classified into three groups, to wit: "(1) those supposed to be for the Philippine Army Post Exchange, with an appraised value of $24,197.53, (2) those pertaining to the Philippine Navy Officers Base Commissary, Cavite, with an appraised value of $1,590.04, and (3) those belonging to individuals, consisting of nine Philippine Army and Navy Officers and crew and two private persons, with an appraised value of $1,772.00." The rest of the facts which are not in dispute, as well as the issues involved, particularly the legal ones, are well stated in the decision of the Court of Tax Appeals now before us on appeal. We are reproducing pertinent portions of said decision: . . All these articles were declared forfeited by the Collector of Customs of Manila for violations of the Customs Law in a decision rendered on March 18, 1955. One of the cases containing an electric range "GE" with four burners, brought by the RPS "MISAMIS ORIENTAL" is consigned to petitioner herein. The said article was forfeited pursuant to Section 1363 (g) of the Administrative Code as an unmanifested cargo. On appeal to the Commissioner of Customs, the dispositive portion of the decision of the Collector of Customs of Manila was affirmed in toto; hence this appeal. Section 1363 (g) of the Administrative Code, upon which the decree of forfeiture is based, reads as follows: SEC. 1363. Property subject to forfeiture under customs laws. Vessels, cargo, merchandise, and other objects and things shall, under the conditions hereinbelow specified, be subject to forfeiture: xxxxxxxxx "(g) Unmanifested merchandise found on any vessel, a manifest therefor being required." The only question to be decided is whether or not a manifest is required of the RPS "MISAMIS ORIENTAL" and, if so, whether or not the aforesaid electric range is an unmanifested merchandise within the meaning of Section 1363 (g) of the Administrative Code. The law provides that an "unmanifested merchandise found on any vessel, a manifest therefor being required" is subject to forfeiture. This means that where a vessel is required by law, or by regulations promulgated pursuant to law, to make and submit a manifest of its cargo to the customs authorities and it fails to do so, merchandise not manifested shall be forfeited. Is the RPS "MISAMIS ORIENTAL" required under the Customs Law to make and submit to the customs authorities a manifest of its cargo? The Collector of Customs of Manila says it is, and he has been sustained by respondent Commissioner of Customs. It is argued that Section 1221, 1225 and 1228 of the Administrative Code require masters of Government vessels to submit cargo

manifests. Section 1221 provides: "SEC. 1221. Ports open to vessels engaged in foreign trade Duty of vessel to make entry. Vessels engaged in the foreign carrying trade shall touch at ports of entry only, except as otherwise specially allowed; and every such vessel arriving within a customs collection district of the Philippines from a foreign port shall make entry at the port of entry for such district and shall be subject to the authority of the collector of customs of the port while within his jurisdiction. The Master of any war vessel or vessel employed by any foreign government shall not be required to report and enter on arrival in the Philippines, unless engaged in the transportation of merchandise in the way of trade." The term "report and enter" appearing in the last paragraph of Section 1221 means, according to the Collector of Customs, "the entrance of a vessel from a foreign port into a Philippine port of entry as contemplated in Section 1125" which reads in part: SEC. 1225. Documents to be produced by master upon entry of vessel. For the purpose of making entry of a vessel engaged in foreign trade, the master thereof shall present the following documents, duly certified by him, to the boarding officer of customs. (a) The original manifest of all cargo destined for the port, to be returned with boarding officer's indorsement. xxxxxxxxx And Section 1228 provides: "SEC. 1228. Manifest required of vessel from foreign port. Every vessel from a foreign port or place must have on board complete written or typewritten manifests of all her cargo. "All of the cargo intended to be landed at a port in the Philippines must be described in separate manifests for each port of call therein. Each manifest shall include the port of departure and the port of delivery with the marks, numbers, quantity, and description of the packages and the names of the consignees thereof. Every vessel from a foreign port or place must have on board complete manifests of passengers, immigrants, and their baggage, in the prescribed form, setting forth their destination and all particulars required by the immigration laws; and every such vessel shall have prepared for presentation to the proper customs official upon arrival in the ports of the Philippines a complete list of all ship's store then on board. If the vessel does not carry cargo, passengers, or immigrants, there must still be a manifest showing that no cargo is carried from the port of departure to the port of destination in the Philippines nVB0NnfF. "A cargo manifest shall in no case be changed or altered, except after entry of the vessel, by means of an amendment by the master, consignee, or agent thereof, under oath, and attached to the original manifest." One, if not the main, reason given by the Court of Tax Appeals in holding that the RPS "MISAMIS ORIENTAL" was not required to present any manifest to the customs authorities upon its arrival; in Manila was that Sections 1221, 1225 and 1228 of the Administrative Code aforequoted are found under Article VI of the Customs Law, the title of which reads: "Entrance of vessels in foreign trade"; that the said article lays down rules governing entry of vessels engaged in foreign trade; and that inasmuch as the navy vessel in question was not engaged in foreign trade it was not required to submit the manifest provide for in section 1225. The Tax Court took the view that under said Article VI of the Customs Law including the different sections of the Administrative Code under it, only vessels engaged in foreign trade are required to submit manifest upon entering any Philippine port. The Tax Court apparently overlooked the reason behind the requirement of presenting a manifest and allowed itself to be swayed by the title of the law. Resort to the title of a statute as an aid in interpretation thereof is an unsafe criterion, and is not entitled to much weight. (50 Am. Jur. 301). The title be resorted to as an aid where there is doubt as to the meaning of the law or the intention of the legislature in enacting it, not otherwise. The Tax Court also overlooked or failed to give due consideration to the provisions of Section 1228 which requires that every vessel from a foreign port or place must have on board complete written or typewritten manifests of all her cargoes. Said provision is quite comprehensive, if not all inclusive, with the exception perhaps of vessels mentioned in the second paragraph of Section 1221, namely, war vassels or vessels employed by any foreign government. This is presumably out of international practice. In our opinion all other vessels coming from foreign ports, whether or not engaged in foreign trade, arriving or touching upon any port in the Philippines should be provided with a manifest which must be presented to the customs authorities. The reason for requiring a manifest is well stated in the brief for the Commissioner of Customs which we quote with favor: Whether the vessel be engaged in foreign trade (Section 1221 and 1225, Revised Administrative Code) or not (Section 1228), and even when the vessel belongs to the army or the navy (Section 1234), the universal requirement from a reading of all the foregoing provisions is that they be provided with a manifest. As reason is obvious, and must stem from marine experience. As the name of the document suggests, a manifest is obviously meant to place beyond doubt the nature of the load or of the cargo that a vessel carries. The manifest is therefore intended to be an indication, if not an open declaration, that the vessel is not engaged in smuggling or in surreptitious practices and activities. If the making of a manifest were be a monopoly of vessels engaged in foreign trade, it is plain

that other vessels would be understood as licensed to engage in undesirable marine activities, a consequence so absurd as to need no further explanation. The reason for requiring a manifest in the United States is also stated in the case of U.S. vs. Sischo, 262 U.S. 165: The collection of duties is not the only purpose of a manifest, as is shown by the requirement of one for outward-bound cargoes and from vessels in the coasting trade bound for a port in another collection . . . A government wants to know, without being put a search, what articles are brought into the country, and to make up its own mind not only what duties it will demand but whether it will allow the goods to enter at all. It would seem strange if it should except from the manifest demanded those things which it has the greatest need be informed, if in that one case it should take a chance of being able to find what it forbids to come in, requiring the master to tell what he knows. It would seem doubly strange when, at the same time, it required any other person who had knowledge that the forbidden article was on the vessel to report the fact to the master. 19 USCA. p. 821. Were we to confine the requirement about the preparation and presentation of a manifest to vessels engaged in foreign trade, what about private vessels, yachts, pleasure boats or cruiser or steamships on a world cruise for tourists, and ships chartered for a special mission or purpose, all of which tough not engaged in foreign trade, nevertheless could bring into the country not only dutiable goods, but also articles of prohibited importation? The customs laws could not have intended to exempt all these vessels from the requirement to present a manifest. Then we have Section 1234 of the Revised Administrative Code which we quote below: SEC. 1234. Entry of transport or supply ships of the United States Army or Navy. The master or other officer in charge of a transport or supply ship of the United States Army or Navy, arriving from a foreign port at any port in the Philippines, shall, for the purpose of making entry of his vessel, present a manifest in duplicate, containing the following information, duly certified by him to the boarding officer or collector of customs: (a) A list of all supplies of the United States Government, for use of the Army, Navy, or Public Health Service, or of the Government of the Republic of the Philippines. (b) A list of all property of officers and enlisted men aboard or of civilians carried as passengers. (c) A list of all other goods, wares, merchandise, or effects on board. (d) A list of all passengers on board, other than enlisted men of the Army, Navy, or other department of service, giving the name, sex, age, occupation, status, or rank, last permanent residence, port of embarkation, and destination, of each such passenger. The number of enlisted men on board should be stated, giving their designation, regiment, or department. In connection with this legal provision above quoted, the Commissioner of Customs in his decision appealed to the Court of Tax Appeals said the following: . . . Even before our country attained its independence, and while the United States sovereignty was supreme over the Philippines, the master or other officers in charge of a transport or supply ship of the United States Army and Navy was required by law (Sec. 1234 of the Revised Administrative Code) to present to the boarding officer or the Collector of Customs, a duly certified manifest in duplicate, containing, among others, a list of all properties of officers and enlisted men, or of civilians carried as passengers, and a list of all other goods, wares, merchandise, or effects on board. To sustain the proposition that vessels owned by the government are not within the pale of the customs laws and regulations is not only absurd but also fraught with serious implications, for the irony thereof is that such vessels may bring, unhampered, into this country dutiable and/or prohibited merchandise and goods, or, to state it bluntly, they may engage in the very activity which they are called upon to prevent and suppress. But the Court of Tax Appeals equally held that Section 1234 is not applicable to vessels of the Philippine Navy for the reason that said section applies only to ships of the United States Army or Navy, and that if our legislature had really wanted or intended to make its provisions applicable to our navy ships, it should have made the corresponding change or amendment of the section. We agree that it should have been done. But we believe that there was no necessity where as in the present case the application of said section to our navy ships is so clear and manifest, considering that the reasons for requiring a manifest for transport and supply ships of the army and navy of the United States are and with more reason applicable to our navy ships to carry out the policy of the government, and because we have complete control over them. We therefore believe and hold that the RPS "MISAMIS ORIENTAL" was required to present a manifest upon its arrival in Manila on September 2, 1954. The Court of Tax Appeals, however, believed and found that even if a manifest were required of the RPS "MISAMIS ORIENTAL", still, one was actually presented by one of its officers to customs authorities through one Mr. Casimiro de la Ysla on September 3, 1954. This, Ysla denied. And after carefully studying the evidence on record and considering the circumstances attending the case, we are inclined to agree with the Collector of Customs and the Commissioner of Customs who upheld him that no such manifest required by law was submitted to the customs authorities upon the arrival of the RPS "MISAMIS ORIENTAL" XZTPYOz2.

If a manifest had really been delivered to the customs authorities upon the arrival of the RPS "MISAMIS ORIENTAL" there was no reason whatsoever for Ysla to deny receipt thereof; and there would have been no occasion or reason for the Acting Collector of Customs on September 17, 1954 to write to the Chief of Staff of the Armed Forces of the Philippines stating that according to his information "a copy of the ship's manifest covering said cargo had been secured by that office from the Commanding Officer of the vessel" and request that two copies thereof be furnished the Bureau of Customs. Why manifest if as claimed by the navy authorities such manifest had already been delivered to them? Again, it had always been the contention and the belief of the navy authorities that Philippine navy vessels were not required to prepare and deliver this manifest upon their arrival in the Philippines from foreign ports. In fact there is evidence to the effect that on two different occasion prior to the arrival of RPS "MISAMIS ORIENTAL" on September 2, 1954, Philippine Navy vessels had arrived from abroad with merchandise presumably for personal use of officers and men of the Philippine navy and that no manifest had been presented covering said goods, which goods never went through customs. This belief and attitude of the Philippine navy authorities is reflected in the letter of Commodore Francisco, dated October 9, 1954, answering the letter of inquiry and request of the Acting Collector of Customs, dated September 17, 1954 wherein he said: In this connection, this Command feels that the pertinent provisions of the Revised Administrative Code relative to vessels coming from foreign ports are not applicable to vessels of the Philippine Navy as the same are war vessels, exempted under Section 1221 of said code. If your office holds a contrary opinion, a clarification of this matter is requested. With this belief and attitude of the Philippine navy authorities, it was not likely that a manifest of the goods carried by the RPS "MISAMIS ORIENTAL" was prepared on board while the boat was still in Japan, much less was a copy of the manifest if made, was delivered to customs authorities. Furthermore, according to the Commissioner of Customs, we quote from his decision: . . . The record shows that the officers of the RPS "MISAMIS ORIENTAL" insistently pleaded for the exemption of their vessel from customs requirements regarding the presentation of cargo manifest, perhaps not realizing that laws must be equally enforced among public officers and private citizens alike. Besides, to accord the vessel with such exceptional privilege may result in government vessels comprising public trust and duty and serving two incompatible masters the government on one hand, and the tax-evader on the other. Thus the government is rendered helpless in such cases to prevent its being defrauded of lawful duties and taxes. If a manifest had already been prepared by the officers of the ship, and that a copy thereof had been presented to the customs, why all this insistence and plea, that they be excused from and relieved of the duty of presenting a manifest when they were found to be without one? Moreover, if said manifest had actually been delivered to customs authorities upon the arrival of the RPS "MISAMIS ORIENTAL" in Manila, then in the regular course of things the customs authorities would have inspected the same, assessed customs duties on them if found dutiable, or released them if otherwise. And yet the only time when the customs authorities learned of the existence of the goods and merchandise on board the RPS "MISAMIS ORIENTAL" was when according to the decision of the Collector of Customs a confidential information was received in the office of the Port Patrol Division of the Bureau regarding the presence of commercial goods on board the RPS "MISAMIS ORIENTAL" and after interception by the Port Patrol Policeman Consorcio Javier of a truckload of cases leaving the customs zone from the navy boat. We further quote from the decision of the Collector of Customs: . . . To verify the truth of this information, Col. Manuel Turingan, then General Supervisor of the Security Division of the Bureau of Customs, and Atty. Salvador Mascardo, Chief of the Investigation Section of the Port Patrol Division, went to Pier 5 on September 6, 1954 where the Philippine Navy boat mentioned above was then docked. Upon arrival thereat, they were met by the Commanding Officer of the above-named vessel, who, when asked, informed them that there were really commercial goods on board his ship. When the merchandise were brought to and examined at the customhouse, they were found to be not covered by the required cargo manifest, bills of lading, consular invoices, and Central Bank licenses and release certificates. Hence, the seizure. Besides, according to the regulations of the Bureau of Customs, as well as the practice of that office, when a vessel arrives from a foreign port, a customs boarding officer boards the ship and a copy or copies of the cargo manifests are delivered to him by the master of the vessel, and he makes a proper indorsement thereof including the date of delivery to him (boarding officer). And according to Section 1229 of the Revised Administrative Code, the master of the vessel shall immediately mail to the Auditor General a copy of the cargo manifest properly indorsed by the boarding officer. If as claimed by the navy authorities, the law about cargo manifests had been fully complied with and that a copy of said manifest was delivered to an officer of the Bureau of Customs who had the duty of indorsing and dating the same and that a copy thereof had been mailed to the Auditor General, it was not explained why said navy authorities failed to produce at the hearing their copy of said manifest duly indorsed by the boarding officer; neither did they try to subpoena the Auditor General to produce the copy which should have been mailed to him. All these point to the conclusion that no such cargo manifest was ever delivered to the customs authorities upon the arrival of the RPS "MISAMIS ORIENTAL".

In conclusion, we hold that all vessels whether private or government owned, including ships of the Philippine navy, coming from a foreign port, with the possible exception of war vessels or vessels employed by any foreign government, not engaged in the transportation of merchandise in the way of trade, as provided for in the second paragraph of Section 1221 of the Revised Administrative Code, are required to prepare and present a manifest to the customs authorities upon arrival at any Philippine port. In view of the foregoing, the appealed decision of the Court of Tax Appeals as regards the forfeiture of the electric range in question is set aside, and the decision of the Commissioner of Customs affirming that of the Collector of Customs, as regards the same article is hereby affirmed. No costs. Paras, C.J., Bengzon, Reyes, A., Bautista Angelo, Labrador, Concepcion and Endencia, JJ., concur. .

On September 14, 1962, the cadastral court reversed its own ruling of May 8, 1962, allowed petitioners to cross-examine the witnesses of respondent Lutes. On October 16, 1962, Lutes replied to and moved to dismiss private petitioners' opposition to his reopening petition. On October 25, 1962, private petitioners' rejoinder was filed. On August 5, 1963, the cadastral court dismissed private petitioners' opposition to the reopening. A motion to reconsider was rejected by the court on November 5, 1963. On January 6, 1964, it was the turn of the City of Baguio to lodge a motion to dismiss the petition to reopen. This motion was adopted as its own by the Reforestation Administration. They maintained the position that the declaratory judgment in Civil Case 946 was not binding on those not parties thereto. Respondent Lutes opposed on February 24, 1964. On April 6, 1964, private petitioners reiterated their motion to dismiss on jurisdictional grounds. On September 17, 1964, the court denied for lack of merit the City's motion as well as the April 6, 1964 motion to dismiss made by private petitioners. On November 13, 1964, all the petitioners went to the Court of Appeals on certiorari, prohibition, and mandamus with preliminary injunction. 1 They then questioned the cadastral court's jurisdiction over the petition to reopen and the latter's order of August 5, 1963 dismissing private petitioners' opposition. The appellate court issued a writ of preliminary injunction upon a P500bond. Then came the judgment of the Court of Appeals of September 30, 1965. The court held that petitioners were not bound by the declaratory judgment heretofore hated. Nevertheless, the appellate court ruled that as lessees, private petitioners had no right to oppose the reopening of the cadastral case. Petitioners moved to reconsider. It was thwarted on May 6, 1966. Petitioners now seek redress from this Court. On July 6, 1966, respondents moved to dismiss the petition before us. On August 5, 1966, petitioners opposed. On August 12, 1966, we gave due course. 1. Do private petitioners have personality to appear in the reopening proceedings? First, to the controlling statute, Republic Act 931, effective June 20, 1953. The title of the Act reads AN ACT TO AUTHORIZE THE FILING IN THE PROPER COURT, UNDER CERTAIN CONDITIONS, OF CERTAIN CLAIMS OF TITLE TO PARCELS OF LAND THAT HAVE BEEN DECLARED PUBLIC LAND, BY VIRTUE OF JUDICIAL DECISIONS RENDERED WITHIN THE FORTY YEARS NEXT PRECEDING THE APPROVAL OF THIS ACT. Section 1 thereof provides SECTION 1. All persons claiming title to parcels of land that have been the object of cadastral proceedings, who at the time of the survey were in actual possession of the same, but for some justifiable reason had been unable to file their claim in the proper court during the time limit established by law, in case such parcels of land, on account of their failure to file such claims, have been, or are about to be declared land of the public domain by virtue of judicial proceedings instituted within the forty years next preceding the approval of this Act, are hereby granted the right within five years 2 after the date on which this Act shall take effect, to petition for a reopening of the judicial proceedings under the provisions of Act Numbered Twenty-two hundred and fifty-nine, as amended, only with respect to such of said parcels of land as have not been alienated, reserved, leased, granted, or otherwise provisionally or permanently disposed of by the Government, and the competent Court of First Instance, upon receiving such petition, shall notify the Government through the Solicitor General, and if after hearing the parties, said court shall find that all conditions herein established have been complied with, and that all taxes, interests and penalties thereof have been paid from the time when land tax should have been collected until the day when the motion is presented, it shall order said judicial proceedings reopened as if no action has been taken on such parcels.3

G.R. No. L-26100 February 28, 1969CITY OF BAGUlO, REFORESTATION ADMINISTRATION, FRANCISCO G. JOAQUIN, SR., FRANCISCO G. JOAQUIN, JR., and TERESITA J. BUCHHOLZ petitioners, vs. HON. PIO R. MARCOS, Judge of the Court of First Instance of Baguio, BELONG LUTES, and the HONORABLE COURT OF APPEALS, respondents. 1st Assistant City Fiscal Dionisio C. Claridad, Augusto Tobias and Feria, Feria, Lugtu and La'O for petitioners. Bernardo C. Ronquillo for respondents. SANCHEZ, J.: Petitioners attack the jurisdiction of the Court of First Instance of Baguio to reopen cadastral proceedings under Republic Act 931. Private petitioner's specifically question the ruling of the Court of Appeals that they have no personality to oppose reopening. The three-pronged contentions of all the petitioners are: (1) the reopening petition was filed outside the 40-year period next preceding the approval of Republic Act 931; (2) said petition was not published; and (3) private petitioners, as lessees of the public land in question, have court standing under Republic Act 931. The facts follow: On April 12, 1912, the cadastral proceedings sought to be reopened, Civil Reservation Case No. 1, GLRO Record No. 211, Baguio Townsite, were instituted by the Director of Lands in the Court of First Instance of Baguio. It is not disputed that the land here involved (described in Plan Psu-186187) was amongst those declared public lands by final decision rendered in that case on November 13, 1922. On July 25, 1961, respondent Belong Lutes petitioned the cadastral court to reopen said Civil Reservation Case No. 1 as to the parcel of land he claims. His prayer was that the land be registered in his name upon the grounds that: (1) he and his predecessors have been in actual, open, adverse, peaceful and continuous possession and cultivation of the land since Spanish times, or before July 26, 1894, paying the taxes thereon; and (2) his predecessors were illiterate Igorots without personal notice of the cadastral proceedings aforestated and were not able to file their claim to the land in question within the statutory period. On December 18, 1961, private petitioners Francisco G. Joaquin, Sr., Francisco G. Joaquin, Jr., and Teresita J. Buchholz registered opposition to the reopening. Ground: They are tree farm lessees upon agreements executed by the Bureau of Forestry in their favor for 15,395.65 square meters on March. 16, 1959, for 12,108 square meters on July 24, 1959, and for 14,771 square meters on July 17, 1959, respectively. On May 5, 1962, the City of Baguio likewise opposed reopening. On May 8, 1962, upon Lutes' opposition, the cadastral court denied private petitioners' right to intervene in the case because of a final declaratory relief judgment dated March 9, 1962 in Yaranon vs. Castrillo [Civil Case 946, Court of First Instance of Baguio] which declared that such tree farm leases were null and void. On May 18, 1962, private petitioners moved to reconsider. They averred that said declaratory relief judgment did not bind them, for they were not parties to that action.

We concede that in Leyva vs. Jandoc, L-16965, February 28, 1962, a land registration case where oppositors were "foreshore lessees of public land", a principle was hammered out that although Section 34, Land Registration Act, 4 "apparently authorizes any person claiming any kind of interest to file an opposition to an application for registration, ... nevertheless ... the opposition must be based on a right of dominion or some other real right independent of, and not at all subordinate to, the rights of the Government."5 The opposition, according to the Leyva decision, "must necessarily be predicated upon the property in question being part of the public domain." Leyva thus pronounced that "it is incumbent upon the duly authorized representatives of the Government to represent its interests as well as private claims intrinsically dependent upon it." But the Leyva case concerned an ordinary land registration proceeding under the provisions of the Land Registration Act. Normally and logically, lessees cannot there present issues of ownership. The case at bar, however, stands on a different footing. It involves a special statute R.A. 931, which allows a petition for reopening on lands "about to be declared" or already "declared land of the public domain" by virtue of judicial proceedings. Such right, however, is made to cover limited cases, i.e., "only with respect to such of said parcels of land as have not been alienated, reserved, leased, granted, or otherwise provisionally or permanently disposed of by the Government." 6 The lessee's right is thus impliedly recognized by R.A. 931. This statutory phrase steers the present case clear from the impact of the precept forged by Leyva. So it is, that if the land subject of a petition to reopen has already been leased by the government, that petition can no longer prosper. This was the holding in Director of Land vs. Benitez, L-21368, March 31, 1966. The reopening petition there filed was opposed by the Director of Lands in behalf of 62 lessees of public land holding revocable permits issued by the government. We struck down the petition in that Case because the public land, subject-matter of the suit,had already been leased by the government to private persons. Of course, the Benitez ruling came about not by representations of the lessees alone, but through the Director of Lands. But we may well scale the heights of injustice or abet violations of R.A. 931 if we entertain the view that only the Director of Lands 7 can here properly oppose the reopening petition. Suppose the lands office fails to do so? Will legitimate lessees be left at the mercy of government officials? Should the cadastral court close its eyes to the fact of lease that may be proved by the lessees themselves, and which is enough to bar the reopening petition? R.A. 931 could not have intended that this situation should happen. The point is that, with the fact of lease, no question of ownership need be inquired into pursuant to R.A. 931. From this standpoint, lessees have sufficient legal interest in the proceedings. The right of private petitioners to oppose a reopening petition here becomes the more patent when we take stock of their averment that they have introduced improvements on the land affected. It would seem to us that lessees insofar as R.A. 931 is concerned, come within the purview of those who, according to the Rules of Court, 8may intervene in an action. For, they are persons who have "legal interest in the matter in litigation, or in the success of either of the parties." 9 In the event herein private petitioners are able to show that they are legitimate lessees, then their lease will continue. And this because it is sufficient that it be proven that the land is leased to withdraw it from the operation of Republic Act 931 and place it beyond the reach of a petition for reopening. 10 In line with the Court of Appeals' conclusion, not disputed by respondent Lutes herein, the cadastral court should have ruled on the validity of private petitioners 'tree farm leases on the merits. Because there is need for Lutes' right to reopen and petitioners' right to continue as lessees to be threshed out in that court. We, accordingly, hold that private petitioners, who aver that they are lessees, have the necessary personality to intervene in and oppose respondent Lutes' petition for reopening. 2. Petitioners next contend that the reopening petition below, filed under R.A. 931, should have been published in accordance with the Cadastral Act. To resolve this contention, we need but refer to a very recent decision of this Court in De Castro vs. Marcos, supra, involving exactly the same set of facts bearing upon the question. We there held, after a discussion of law and jurisprudence, that: "In sum, the subject matter of the petition for reopening a parcel of land claimed by respondent Akia was already embraced in the cadastral proceedings filed by the Director of Lands. Consequently, the Baguio cadastral court already acquired jurisdiction over the said property. The petition, therefore, need not be published." We find no reason to break away from such conclusion. Respondent Lutes attached to the record a certified true copy of the November 13, 1922 decision in the Baguio Townsite Reservation case to show, amongst others, that the land here involved was part of that case. Petitioners do not take issue with respondent Lutes on this point of fact.

We here reiterate our ruling in De Castro, supra, that the power of the cadastral court below over petitions to reopen, as in this case, is not jurisdictionally tainted by want of publication. 3. A question of transcendental importance is this: Does the cadastral court have power to reopen the cadastral proceedings upon the application of respondent Lutes? The facts are: The cadastral proceedings sought to be reopened were instituted on April 12, 1912. Final decision was rendered on November 13, 1922. Lutes filed the petition to reopen on July 25, 1961. It will be noted that the title of R.A. 931, heretofore transcribed, authorizes "the filing in the proper court, under certain conditions, of certain claims of title to parcels of land that have been declared public land, by virtue of judicial decisions rendered within the forty years next preceding the approval of this Act." The body of the statute, however, in its Section 1, speaks of parcels of land that "have been, or are about to be declared land of the public domain, by virtue of judicial proceedings instituted within the forty years next preceding the approval of this Act." There thus appears to be a seeming inconsistency between title and body. It must be stressed at this point that R.A. 931 is not under siege on constitutional grounds. No charge has been made hero or in the courts below that the statute offends the constitutional injunction that the subject of legislation must be expressed in the title thereof. Well-entrenched in constitutional law is the precept that constitutional questions will not be entertained by courts unless they are "specifically raised, insisted upon and adequately argued." 11 At any rate it cannot be seriously disputed that the subject of R.A. 931 is expressed in its title. This narrows our problem down to one of legal hermeneutics. Many are the principles evolved in the interpretation of laws. It is thus not difficult to stray away from the true path of construction, unless we constantly bear in mind the goal we seek. The office of statutory interpretation, let us not for a moment forget, is to determine legislative intent. In the words of a well-known authority, "[t]he true object of all interpretation is to ascertain the meaning and will of the law-making body, to the end that it may be enforced." 12 In varying language, "the, purpose of all rules or maxims" in interpretation "is to discover the true intention of the law." 13 They "are only valuable when they subserve this purpose." 14 In fact, "the spirit or intention of a statute prevails over the letter thereof." 15 A statute "should be construed according to its spirit and reason, disregarding as far as necessary, the letter of the law." 16 By this, we do not "correct the act of the Legislature, but rather ... carry out and give due course to" its true intent. 17 It should be certain by now that when engaged in the task of construing an obscure expression in the law 18or where exact or literal rendering of the words would not carry out the legislative intent, 19 the title thereof may be resorted to in the ascertainment of congressional will. Reason therefor is that the title of the law may properly be regarded as an index of or clue or guide to legislative intention. 20 This is especially true in this jurisdiction. For the reason that by specific constitutional precept, "[n]o bill which may be enacted into law shall embrace more than one subject which shall be expressed in the title of the bill." 21 In such case, courts "are compelled by the Constitution to consider both the body and the title in order to arrive at the legislative intention." 22 With the foregoing guideposts on hand, let us go back to the situation that confronts us. We take another look at the title of R.A. 931, viz: "AN ACT TO AUTHORIZE THE FILING IN THE PROPER COURT, UNDER CERTAIN CONDITIONS, OF CERTAIN CLAIMS OF TITLE TO PARCELS OF LAND THAT HAVE BEEN DECLARED PUBLIC LAND, BY VIRTUE OF JUDICIAL DECISIONS RENDERED WITHIN THE FORTY YEARS NEXT PRECEDING THE APPROVAL OF THIS ACT." Readily to be noted is that the title is not merely composed of catchwords. 23 It expresses in language clear the very substance of the law itself. From this, it is easy to see that Congress intended to give some effect to the title of R.A. 931. To be carefully noted is that the same imperfection in the language of R.A. 931 aforesaid from which surfaces a seeming inconsistency between the title and the body attended Commonwealth Act 276, the present statute's predecessor. That prior law used the very same language in the body thereof and in its title. We attach meaning to this circumstance. Had the legislature meant to shake off any legal effects that the title of the statute might have, it had a chance to do so in the reenactment of the law. Congress could have altered with great facility the wording of the title of R.A. 931. The fact is that it did not. It has been observed that "in modern practice the title is adopted by the Legislature, more thoroughly read than the act itself, and in many states is the subject of constitutional regulation." 24 The constitutional in jurisdiction that the subject of the statute must be expressed in the title of the bill, breathes the spirit of command because "the Constitution does not exact of Congress the obligation to read during its deliberations the entire text of the bill." 25 Reliance, therefore, may be placed on the title of a bill, which,

while not an enacting part, no doubt "is in some sort a part of the act, although only a formal part." 26 These considerations are all the more valid here because R.A. 931 was passed without benefit of congressional debate in the House from which it originated as House Bill 1410, 27 and in the Senate. 28 The title now under scrutiny possesses the strength of clarity and positiveness. It recites that it authorizes court proceedings of claims to parcels of land declared public land "by virtue of judicial decisions rendered within the forty years next preceding the approval of this Act." That title is written "in capital letters" by Congress itself; such kind of a title then "is not to be classed with words or titles used by compilers of statutes" because "it is the legislature speaking." 29 Accordingly, it is not hard to come to a deduction that the phrase last quoted from R.A. 931 "by virtue of judicial decisions rendered" was but inadvertently omitted from the body. Parting from this premise, there is, at bottom, no contradiction between title and body. In line with views herein stated, the title belongs to that type of titles which; should be regarded as part of the rules or provisions expressed in the body. 30At the very least, the words "by virtue of judicial decisions rendered" in the title of the law stand in equal importance to the phrase in Section 1 thereof, "by virtue of judicial proceedings instituted." Given the fact then that there are two phrases to consider the choice of construction we must give to the statute does not need such reflection. We lean towards a liberal view. And this, because of the principle long accepted that remedial legislation should receive the blessings of liberal construction. 31 And, there should be no quibbling as to the fact that R.A. 931 is a piece of remedial legislation. In essence, it provides a mode of relief to landowners who, before the Act, had no legal means of perfecting their titles. This is plainly evident from the explanatory note thereof, which reads: This bill is intended to give an opportunity to any person or claimant who has any interest in any parcel of land which has been declared as public land in cadastral proceeding for failure of said person or claimant to present his claim within the time prescribed by law. There are many meritorious cases wherein claimants to certain parcels of land have not had the opportunity to answer or appear at the hearing of cases affecting their claims in the corresponding cadastral proceedings for lack of sufficient notice or for other reasons and circumstances which are beyond their control. Under C.A. No. 276, said persons or claimants have no more legal remedy as the effectivity of said Act expired in 1940. This measure seeks to remedy the lack of any existing law within said persons or claimants with meritorious claims or interests in parcels of land may seek justice and protection. This bill proposes to give said persons or claimants their day in court. Approval of this bill is earnestly requested. In fine, we say that lingual imperfections in the drafting of a statute should never be permitted to hamstring judicial search for legislative intent, which can otherwise be discovered. Legal technicalities should not abort the beneficent effects intended by legislation. The sum of all the foregoing is that, as we now view Republic Act 931, claims of title that may be filed thereunder embrace those parcels of land that have been declared public land "by virtue of judicial decisions rendered within the forty years next preceding the approval of this Act." Therefore, by that statute, the July 25, 1961 petition of respondent Belong Lutes to reopen Civil Reservation Case No. 1, GLRO Record No. 211 of the cadastral court of Baguio, the decision on which was rendered on November 13, 1922, comes within the 40-year period.lawphi1.nt FOR THE REASONS GIVEN, the petition for certiorari is hereby granted; the cadastral court's orders of August 5, 1963, November 5, 1963 and September 17, 1964 are hereby declared null and void and the cadastral court is hereby directed to admit petitioners' oppositions and proceed accordingly. No costs. So ordered. Reyes, J.B.L., Dizon, Makalintal, Zaldivar, Fernando, Teehankee and Barredo, JJ., concur. Concepcion, C.J., Castro and Capistrano, JJ., took no part..

ANTONIO YABUT, defendant-appellant. Felipe S. Abeleda for appellant. Office of the Solicitor-General Hilado for appellee. Butte, J.:

This is an appeal from the judgment of the Court of First Instance of Manila, convicting the appellant of the crime of murder and assessing the death penalty. The appellant, Yabut, was charged in the Court of First Instance of Manila with the crime of murder upon the following information: That on or about the 1st day of August, 1932, in the City of Manila, Philippine Islands, the accused Antonio Yabut, then a prisoner serving sentence in the Bilibid Prison, in said city, did then and there, with intent to kill, wilfully, unlawfully, feloniously and treacherously, assault, beat and use personal violence upon one Sabas Aseo, another prisoner also serving sentence in Bilibid, by then and there hitting the said Sabas Aseo suddenly and unexpectedly from behind with a wooden club, without any just cause, thereby fracturing the skull of said Sabas Aseo and inflicting upon him various other physical injuries on different parts of the body which caused the death of the latter about twenty-four (24) hours thereafter. That at the time of the commission of this offense, the said Antonio Yabut was a recidivist, he having previously been convicted twice of the crime of homicide and once of serious physical injuries, by virtue of final sentences rendered by competent tribunals. Upon arraignment, the accused plead not guilty. The court below made the following findings of fact which, from an independent examination of the entire testimony, we are convinced, are supported by the evidence beyond reasonable doubt: La brigada de presos, conocida como Brigada 8-A Carcel, el 1. de agosto de 1932, estaba compuesta de unos 150 o mas penados, de largas condenas, al mando del preso Jose Villafuerte, como Chief Squad Leader, y del preso Vicente santos, como su auxiliar. forman parte de esta brigada el occiso Sabas Aseo, o Asayo, el acusado Antonio Yabut y los presos llamados Apolonio Saulo, Isaias Carreon, Melecio Castro, Mateo Bailon y los moros Taladie y Hasan 8Bmp. Entre siete y media y ocho de la noche de la fecha de autos, estando ya cerrado el pabellon de la brigada, pues se aproximaba la hora del descanso y silencio dentro de la prision, mientras el jefe bastonero Villafuerte se hallaba sentado sobre su mesa dentro de la brigada, vio al preso Carreon cerca de el, y en aquel instante el acusado Yabut, dirigiendose a Carreon, le dijo que, si no cobrada a uno que la debia, el (Yabut) le abofetearia. El jefe bastonero Villafuerte trato de imponer silencio y dijo a los que hablaban que se apaciguaran; pero, entre tanto, el preso Carreon se encaro con el otro preso Saulo cobrandole dos cajetillas de cigarillos de diez centimos cada una que le debia. Saulo contesto que ya le pagaria, pero Carreon, por toda contestacion, pego en la cara a saulo y este quedo desvanecido. En vista de esto, el jefe bastonero se dirigio a su cama para sacar la porra queestaba autorizado a llevar. Simultaneamente Villafuerte vio que el preso Yabut pegaba con un palo (Exhibit C) al otro preso Sabas Aseo, o Asayo, primeramente en la nuca y despues en la cabeza, mientras estaba de espaldas el agregido Sabas, quien, al recibir el golpe en la nuca, se inclino hacia delante, como si se agachara, y en ese momento el acusado Yabut dio un paso hacia delante y con el palo de madera que portaba dio otro golpe en la cabeza a Sabas Aseo, quien cayo al suelo. El jefe bastonero Villafuerte se acerco al agresor Yabut para desarmarle, pero este le dijo: "No te acerques; de otro modo, moriras." No obstante la actitud amenazadora de Yabut, Villafuerte se acerco y Yabut quiso darle un golpe que iba dirigido a la cabeza, pero Villafuerte lo pudo desviar pcon la porra que Ilevaba. Los dos lucharon y Ilegaron a abrazarse hasta que se le deslizo a Villafuerte la porra que llevaba. Continuaron luchando ambos y el acusado Yabut llego a soltar el palo Exhibit C conque acometia a Villafuerte y habia malherido al preso Sabas Aseo. Despues de aquello, Yabut consiguio zafarse de Villafuerte y se dirigio al otro extremo de la brigada, escondiendose dentro del bao y alli fue cogido inmediatamente despues del suceso por el preso Proceso Carangdang, quedesempenaba el cargo de sargento de los policias de la prision. We reject, as unworthy of belief, the testimony of Yabut that it was Villafuerte, not he, who gave the fatal blow to the deceased Aseo. The testimonies of Santiago Estrada, resident physician of the Bureau of Prisons and Dr. Pablo Anzures of the Medico Legal Department of the University of the Philippines, clearly establish that the death of Aseo was caused by subdural and cerebral hemorrhages following the fracture of the skull resulting from the blow on the head of Aseo. They further confirm the testimony of the four eyewitnesses that the deceased was struck from behind lIEysmRp8. On appeal to this court, the appellant advances the following assignments of error: 1. The lower court erred in applying article 160 of the Revised Penal Code. 2. The lower court erred in holding that the evidence of the defense are contradictory and not corroborated.

September 27, 1933 G.R. No. 39085 THE PEOPLE OF THE PHILIPPINE ISLANDS, plaintiff-appelle, vs.

[G.R. No. 140563. July 14, 2000] 3. The lower court erred in holding that the crime of murder was established by appreciating the qualifying circumstance of alevosia. 4. The lower court erred in finding the accused guilty of the crime of murder beyond reasonable doubt. In connection with the first assignment of error, we quote article 160 of the Revised Penal Code, in the Spanish text, which is decisive: Comision de un nuevo delito durante el tiempo de la condena por otro anterior Pena. Los quecomentieren algun delito despues de haber sino condenados por sentencia firme no empezada a cumpir, o durante el tiempo de su condena, seran castigados con la pena sealada por la ley para el nuevo delito, en su grado maximo, sin perjuicio de lo dispuesto en la regla 5.a del articulo 62. El penado conprendidoen este articulo se no fuere un delincuente habitual sera indultado a los setenta aos, si hubiere ya cumplido la condena primitiva, o cuando llegare a cumplirla despues de la edad sobredicha, a no ser que por su conducta a por otras circunstancias no fuere digno de la gracia. The English translation of article 160 is as follows: Commission of another crime during service of penalty imposed for another previous offense Penalty. Besides the provisions of rule 5 of article 62, any person who shall commit a felony after having been convicted by final judgment, before beginning to serve such sentence, or while serving the same, shall be punished by the maximum period of the penalty prescribed by law for the new felony. Any convict of the class referred to in this article, who is not a habitual criminal, shall be pardoned at the age of seventy years if he shall have already served out his original sentence, or when he shall complete it after reaching said age, unless by reason of his conduct or other circumstances he shall not be worthy of such clemency. The appellant places much stress upon the word "another" appearing in the English translation of the headnote of article 160 and would have us accept his deduction from the headnote that article 160 is applicable only when the new crime which is committed by a person already serving sentence is different from the crime for which he is serving sentence. Inasmuch as the appellant was serving sentence for the crime of homicide, the appellant contends the court below erred in applying article 160 in the present case which was a prosecution for murder (involving homicide). While we do not concede that the appellant is warranted in drawing the deduction mentioned from the English translation of the caption of article 160, it is clear that no such deduction could be drawn from the caption. Apart from this, however, there is no warrant whatever for such a deduction (and we do not understand the appellant to assert it) from the text itself of article 160. The language is plain and unambiguous. There is not the slightest intimation in the text of article 160 that said article applies only in cases where the new offense is different in character from the former offense for which the defendant is serving the penalty. It is familiar law that when the text itself of a statute or a treaty is clear and unambiguous, there is neither necessity nor propriety in resorting to the preamble or headings or epigraphs of a section of interpretation of the text, especially where such epigraphs or headings of sections are mere catchwords or reference aids indicating the general nature of the text that follows. (Cf. In re Estate of Johnson, 39 Phil. 156, 166.) A mere glance at the titles to the articles of the Revised Penal code will reveal that they were not intended by the Legislature to be used as anything more than catchwords conveniently suggesting in a general way the subject matter of each article. Being nothing more than a convenient index to the contents of the articles of the Code, they cannot, in any event have the effect of modifying or limiting the unambiguous words of the text. Secondary aids may be consulted to remove, not to create doubt. The remaining assignments of error relate to the evidence. We have come to the conclusion, after a thorough examination of the record, that the findings of the court below are amply sustained by the evidence, except upon the fact of the existence of treachery (alevosia). As some members of the court entertain a reasonable doubt that the existence of treachery (alevosia) was established, it results that the penalty assessed by the court below must be modified. We find the defendant guilty of homicide and, applying article 249 of the Revised Penal Code in connection with article 160 of the same, we sentence the defendant- appellant to the maximum degree of reclusion temporal, that is to say, to twenty years of confinement and to indemnify the heirs of the deceased Sabas Aseo (alias Sabas Asayo), in the sum of P1,000. Costs de oficio. Avancea, C.J., Street, Malcolm, Villa-Real, Abad Santos, Hull, Vickers, and Imperial, JJ., concur. . DANTE M. POLLOSO, petitioner, vs. HON. CELSO D. GANGAN, Chairman, COMMISSION ON AUDIT, HON. RAUL C. FLORES, COMMISSIONER, COMMISSION ON AUDIT, HON. EMMANUEL M. DALMAN, COMMISSIONER, COMMISSION ON AUDIT. respondents. DECISION KAPUNAN, J.: Before this Court is a petition for review from the decision of the Commission on Audit (COA), dated 28 September 1999 of herein petitioner Dante M. Polloso, from the disallowance by the COA Unit Auditor of the amount of P283,763.39 representing payment of legal services rendered by Atty. Benemerito A. Satorre to the National Power Corporation (NPC). The facts of the case are undisputed. In 1994, the National Power Corporation (NPC), represented by its President Dr. Francisco L. Viray entered into a service contract with Atty. Benemerito A. Satorre. Under said contract, Satorre was to perform the following services for the Leyte-Cebu and LeyteLuzon Interconnection Projects of the NPC: 1.....Provide services on administrative and legal matters. 2.....Facilitate, coordinate between the Office of the Project Director and the Project Manager, and the Office of the Regional Legal Counsel and other NPC Offices, Local Government Units and Agencies of Government involving administrative cases and legal problems. 3.....Provide direction, supervision, coordination and control of right-of-way activities in the project. 4.....Perform other pertinent services as may be assigned him by the Project Director and Project Manager from time to time.[1] The contract provided that in consideration for services rendered, Satorre would receive a monthly salary P21,749.00 plus representation and transportation allowance of P5,300.[2] On 12 January 1995, Unit Auditor Alexander A. Tan, NPC-VRC, Cebu City issued Notice of Disallowance No. 95-0001-135-94 for the payment of the services rendered by Atty. Satorre for the period covering March to December 1995 in the total amount of P283,763.39. The following reasons were cited for said disallowance: 1)....The contract for services did not have the written conformity and acquiescence of the Solicitor General or the Corporate Counsel and concurrence of the Commission on Audit as required under COA Circular No. 86255 dated April 2, 1986. 2)....The contract was not supported with Certificate of Availability of Funds as required under Sec. 86 of P.D. 1445. 3)....The contract was not submitted to the Civil Service Commission for final review and was not forwarded to the Compensation and Position Confirmation and Classification Bureau, DBM for appropriate action as required in CSC MC # 5 Series of 1985.[3] Accordingly, the following were held to be personally liable for the amounts due to Atty. Satorre: Dr. Francisco Viray, NPC contracting party; Manolo C. Marquez, for certifying the claim as necessary, lawful and authorized; Andrea B. Roa and Romeo Gallego, for verifying the supporting documents to be complete and proper; Jesus Alio, for reviewing the supporting documents to be complete and proper; Dante M. Polloso, Project Manager II, Leyte-Cebu Interconnection Project (LCIP), National Power Corporation-Visayas Regional Center, for approving the claim; and Benemerito Satorre, as the payee.[4]

EN BANC

To test the accuracy of such an interpretation, an examination of the subject COA Circular is in order: On 27 January 1995, only petitioner Dante Polloso submitted a letter-explanation refuting the alleged violation contained in the Notice of Disallowance and sought reconsideration thereof.[5]This was denied by the Unit Auditor in a resolution, dated 30 March 1995.[6] On 10 October 1995, petitioner appealed the denial of the Unit Auditor to the Regional Director, COA Regional Office No. VII;[7] the latter denied the same.[8] On 29 June 1998, a petition for review was filed before the Commission Proper, Commission on Audit, Central Office.[9] On 29 October 1999, the COA issued the decision assailed before this Court. The dispositive portion thereof, reads: Thus, it is crystal clear from the aforequoted provision of law and regulations that the service contract entered into by and between the National Power Corporation and Atty. Satorre is in contravention thereof. Upon the foregoing considerations, the instant appeal of MR. DANTE M. POLLOSO, has to be, as it is hereby denied. Accordingly, the disallowance of P283,763.39 is hereby affirmed.[10] Hence, this appeal, petitioner raising the following issues: I DOES THE PROHIBITION UNDER COA CIRCULAR NO. 86-255 DATED APRIL 2, 1986 AND SEC. 212 OF THE GOVERNMENT ACCOUNTING AND AUDITING MANUAL IMPOSED ON GOVERNMENT AGENCIES FROM HIRING PRIVATE LAWYERS "TO HANDLE THEIR LEGAL CASES" APPLY TO A LAWYER HIRED BY VIRTUE OF A SERVICE CONTRACT BUT WHO ACTUALLY HANDLE PURELY RIGHT-OF-WAY MATTERS (EXCLUDING HANDLING OF COURT CASES)? II WILL COA CIRCULAR NO. 86-255 DATED APRIL 2, 1986 AND SEC. 212, VOLUME I OF THE GOVERNMENT ACCOUNTING AND AUDITING MANUAL OPERATE TO RESTRICT THE PRACTICE OF THE LAW PROFESSION AND THEREFORE REPUGNANT TO SEC. 5, ARTICLE VII OF THE 1987 PHILIPPINE CONSTITUTION? III DOES SECTION 38, CHAPTER 9, BOOK I OF EXECUTIVE ORDER NO. 292, OTHERWISE KNOWN AS THE ADMINISTRATIVE CODE OF 1987 APPLY TO PETITIONER FOR HAVING ACTED IN GOOD FAITH AND WITHOUT MALICE AND MERELY IMPLEMENTED A VALID CONTRACT ENTERED INTO BY THE PRESIDENT OF THE NATIONAL POWER CORPORATION? IV DOES THE PRINCIPLE OF "QUANTUM MERUIT" APPLY TO THE SERVICES RENDERED BY ATTY. SATORRE WHICH BENEFITTED THE NATIONAL POWER CORPORATION?[11] The petition is without merit. In the main, petitioner posits that the phrase "handling of legal cases" should be construed to mean as conduct of cases or handling of court cases or litigation and not to other legal matters, such as legal documentation, negotiations, counseling or right of way matters. SUBJECT: Inhibition against employment by government agencies and instrumentalities, including government-owned or controlled corporations, of private lawyers to handle their legal cases. It has come to the attention of this Commission that notwithstanding restrictions or prohibitions on the matter under existing laws, certain government agencies, instrumentalities, and government-owned and/or controlled corporations, notably government banking and financing institutions, persist in hiring or employing private lawyers or law practitioners to render legal services for them and/or to handle their legal cases in consideration of fixed retainer fees, at times in unreasonable amounts, paid from public funds. In keeping with the retrenchment policy of the present administration, this Commission frowns upon such a practice. Accordingly, it is hereby directed that, henceforth, the payment out of public funds of retainer fees to private law practitioners who are so hired or employed without the prior written conformity and acquiescence of the Office of the Solicitor General or the Government Corporate Counsel, as the case may be, as well as the written concurrence of the Commission on Audit shall be disallowed in audit and the same shall be a personal liability of the officials concerned. [underscoring supplied] What can be gleaned from a reading of the above circular is that government agencies and instrumentalities are restricted in their hiring of private lawyers to render legal services or handle their cases. No public funds will be disbursed for the payment to private lawyers unless prior to the hiring of said lawyer, there is a written conformity and acquiescence from the Solicitor General or the Government Corporate Counsel. Contrary to the view espoused by petitioner, the prohibition covers the hiring of private lawyers to render any form of legal service. It makes no distinction as to whether or not the legal services to be performed involve an actual legal controversy or court litigation. Petitioner insists that the prohibition pertains only to "handling of legal cases," perhaps because this is what is stated in the title of the circular. To rely on the title of the circular would go against a basic rule in statutory construction that a particular clause should not be studied as a detached and isolated expression, but the whole and every part of the statute must be considered in fixing the meaning of any of its part.[12] Petitioner, likewise, insists that the service contract in question falls outside the ambit of the circular as what is being curtailed is the payment of retainer fees and not the payment of fees for legal services actually rendered. A retainer fee has been defined as a "preliminary fee to an attorney or counsel to insure and secure his future services, and induce him to act for the client. It is intended to remunerate counsel for being deprived, by being retained by one party, of the opportunity of rendering services to the other and of receiving pay from him, and payment of such fee, in the absence of an express understanding to the contrary, is neither made nor received in payment of the services contemplated; its payment has no relation to the obligation of the client to pay his attorney for the services for which he has retained him to perform."[13] To give such a technical interpretation to the term "retainer fees" would go against the purpose of the circular and render the same ineffectual. In his resolution, Unit Auditor Alexander Tan expounded on the purpose of the circular, as enunciated therein: On the claim that COA Circular 86-255 is not applicable in this case because the inhibition provided for in said Circular relates to the handling of legal cases of a government agency and that the contractor was not hired in that capacity but to handle legal matters (sic) involving right-of-way, it is maintained that the contracted service falls within the scope of the inhibition which clearly includes "the hiring or employing private lawyers or law practitioners to render legal services for them and/or to handle their legal cases" Moreover, it is important to mention that the intention of said Circular is to curb the observed and persistent violation of existing laws and regulations, including CSC MC # 5 series of 1985 pertaining to the employment of private lawyers on a contractual basis in government agencies which involves the disbursement of public funds by subjecting the same to the conformity and concurrence requirements of said Circular. Being so, the manner of agreed payment or consideration, whether termed as a fixed retainer basis or a fixed contract price patterned after existing salary scale of existing and comparable positions in NPC-VRC is immaterial as both still involve the outlay of public funds and also the contractual employment/hiring of a private lawyer. Hence, while the circular uses the phrase "retainer fees," such should not be given its technical interpretation but should mean any "fee" paid for any legal service rendered. As pointed out by the Office of the Solicitor General, any interpretation of subject circular to the contrary would open the floodgate to future circumventions thereof by the simple expedience of hiring private lawyers to service the legal needs of the government not on a retainer basis but by way of service contract akin to that which Atty. Satorre and the NPC entered into.[14] No dictum is more fundamental in statutory

interpretation than that the intent of the law must prevail over the letter thereof, for whatever is within the spirit of the statute is within the statute, since adherence to the letter would result in an absurdity, injustice and contradictions and would defeat the plain and vital purpose of the statute.[15] It bears repeating that the purpose of the circular is to curtail the unauthorized and unnecessary disbursement of public funds to private lawyers for services rendered to the government. This is in line with the Commission on Audits constitutional mandate to promulgate accounting and auditing rules and regulations including those for the prevention and disallowance of irregular, unnecessary, excessive, extravagant or unconscionable expenditures or uses of government funds and properties.[16] Having determined the intent of the law, this Court has the imperative duty to give it effect even if the policy goes beyond the letter or words of the statute.[17] Hence, as the hiring of Atty. Satorre was clearly done without the prior conformity and acquiescence of the Office of the Solicitor General or the Government Corporate Counsel, as well as the written concurrence of the Commission on Audit, the payment of fees to Atty. Satorre was correctly disallowed in audit by the COA. Thus being said, it is no longer necessary to delve into whether or not the hiring of Atty. Satorre is in accord with the rules of the Civil Service Commission. Petitioners claim that the Circular is unconstitutional for being an invalid restriction to the practice of the law profession, is clearly bereft of any merit. The Government has its own counsel, which is the Office of the Solicitor General headed by the Solicitor General,[18] while the Office of the Government Corporate Counsel (OGCC) acts as the principal law office of the government-owned or controlled corporations.[19] It is only in special cases where these government entities may engage the services of private lawyers because of their expertise in certain fields. The questioned COA circular simply sets forth the prerequisites for a government agency instrumentality in hiring a private lawyer, which are reasonable safeguards to prevent irregular, unnecessary, excessive, extravagant or unconscionable expenditures or uses of government funds and properties. We fail to see how the restrictions contained in the COA circular can be considered as a curtailment on the practice of the legal profession. Anent petitioners argument that he cannot be held liable for effecting payment of the disallowed amount because he is not privy to the service contract, we find the same to be unmeritorious. This is because petitioners liability arose from the fact that as project manager, he approved the said claim. In addition, his assertion that a refusal on his part to certify payment of the same would subject him to criminal and civil liabilities cannot hold water simply because it was his duty not to approve the same for payment upon finding that such was irregular and in contravention of COA Circular No. 86255, dated 2 April 1986. We cannot grant the prayer of the petitioner that Atty. Satorre should be compensated based on the principle of quantum meruit, on the ground that the government will be unjustly enriched at the expense of another. We do not deny that Atty. Satorre has indeed rendered legal services to the government. However to allow the disbursement of public funds to pay for his services, despite the absence of requisite consent to his hiring from the OSG or OGCC would precisely allow circumvention of COA Circular No. 86-255. In any event, it is not Atty. Satorre who is liable to return the money already paid him, rather the same shall be the responsibility of the officials concerned, among whom include herein petitioner. WHEREFORE, the petition is hereby DENIED for lack of showing that the respondents committed a reversible error. SO ORDERED. Davide, Jr., C.J., Bellosilllo, Melo, Puno, Vitug, Mendoza, Panganiban, Quisumbing, Purisima, Pardo, Buena, GonzagaReyes, Ynares-Santiago, and De Leon, Jr., JJ., concur. FACTS: The National Power Corporation (NAPOCOR) hired the legal service of petitioner, a private lawyer. The Commission on Audit disallowed the payment of his compensation, since he was hired without complying with Circular No. 86-255 which requires prior written approval by the Solicitor General as well as the Commission on Audit. Petitioner argued that circular is unconstitutional because it restricted the practice of law. HELD: The claim is bereft of merit. The circular simply sets forth the prerequisite for the government agency in hiring a private lawyer which are reasonable safeguards to prevent irregular, unnecessary, excessive and extravagant expenditures of government funds.

G.R. No. L-42050-66 November 20, 1978 THE PEOPLE OF THE PHILIPPINES, petitioner, vs. HONORABLE JUDGE AMANTE P. PURISIMA, COURT OF FIRST INSTANCE OF MANILA, BRANCH VII, and PORFIRIO CANDELOSAS, NESTOR BAES, ELIAS L. GARCIA, SIMEON BUNDALIAN, JR., JOSEPH C. MAISO, EDUARDO A. LIBORDO, ROMEO L. SUGAY, FEDERICO T. DIZON, GEORGE M. ALBINO, MARIANO COTIA, JR., ARMANDO L. DIZON, ROGELIO B. PARENO, RODRIGO V. ESTRADA, ALFREDO A. REYES, JOSE A. BACARRA, REYNALDO BOGTONG, and EDGARDO M. MENDOZA, respondents. G.R. No. L-46229-32 November 20, 1978 THE PEOPLE OF THE PHILIPPINES, petitioner, vs. JUDGE MAXIMO A. MACEREN, COURT OF FIRST INSTANCE OF MANILA, BRANCH XVIII, and REYNALDO LAQUI Y AQUINO, ELPIDIO ARPON, VICTOR EUGENIO Y ROQUE and ALFREDO VERSOZA, respondents. G.R. No. L-46313-16 November 20, 1978 THE PEOPLE OF THE PHILIPPINES, petitioner, vs. JUDGE MAXIMO A. MACEREN, COURT OF FIRST INSTANCE OF MANILA, BRANCH XVIII, and JUANITO DE LA CRUZ Y NUNEZ, SABINO BUENO Y CACAL, TIRSO ISAGAN Y FRANCISCO and BEN CASTILLO Y UBALDO, respondents. G.R. No. L-46997 November 20, 1978 THE PEOPLE OF THE PHILIPPINES, petitioner, vs. THE HONORABLE WENCESLAO M. POLO, Judge of the Court of First Instance of Samar, and PANCHITO REFUNCION, respondents. Jose L. Gamboa, Fermin Martin, Jr. & Jose D. Cajucom, Office of the City of Fiscal of Manila and the Office of Provincial Fiscal of Samar for petitioners. Norberto Parto for respondents Candelosas, Baes and Garcia. Amado C. de la Marced for respondents Simeon Bundalian Jr., et al. Manuel F. de Jesus for all the respondents in L-46229-32 and L-46313-16. Norberto L. Apostol for respondent Panchito Refuncion. Hon. Amante P. Purisima for and in his own behalf.

MUOZ PALMA, J.: These twenty-six (26) Petitions for Review filed by the People of the Philippines represented, respectively, by the Office of the City Fiscal of Manila, the Office of the Provincial Fiscal of Samar, and joined by the Solicitor General, are consolidated in this one Decision as they involve one basic question of law. These Petitions or appeals involve three Courts of First Instance, namely: the Court of First Instance of Manila, Branch VII, presided by Hon. Amante P. Purisima (17 Petitions), the Court of First Instance of Manila, Branch XVIII, presided by Hon. Maximo A. Maceren (8 Petitions) and, the Court of First Instance of Samar, with Hon. Wenceslao M. Polo, presiding, (1 Petition). Before those courts, Informations were filed charging the respective accused with "illegal possession of deadly weapon" in violation of Presidential Decree No. 9. On a motion to quash filed by the accused, the three Judges mentioned above issued in the respective cases filed before them the details of which will be recounted below an Order quashing or dismissing the Informations, on

a common ground, viz, that the Information did not allege facts which constitute the offense penalized by Presidential Decree No. 9 because it failed to state one essential element of the crime. Thus, are the Informations filed by the People sufficient in form and substance to constitute the offense of "illegal possession of deadly weapon" penalized under Presidential Decree (PD for short) No. 9? This is the central issue which we shall resolve and dispose of, all other corollary matters not being indispensable for the moment. A The Information filed by the People 1. In L-42050-66, one typical Information filed with the Court presided by Judge Purisima follows: THE PEOPLE OF THE PHILIPPINES, plaintiff, versus PORFIRIO CANDELOSAS Y DURAN, accused. Crim. Case No. 19639 VIOLATION OF PAR. 3, PRES. DECREE No. 9 OF PROCLAMATION 1081 INFORMATION The undersigned accuses PORFIRIO CANDELOSAS Y DURAN of a violation of paragraph 3, Presidential Decree No. 9 of Proclamation 1081, committed as follows: That on or about the 14 th day of December, 1974, in the City of Manila, Philippines, the said accused did then and there wilfully, unlawfully, feloniously and knowingly have in his possession and under his custody and control one (1) carving knife with a blade of 6- inches and a wooden handle of 5-1/4 inches, or an overall length of 11- inches, which the said accused carried outside of his residence, the said weapon not being used as a tool or implement necessary to earn his livelihood nor being used in connection therewith. Contrary to law. (p. 32, rollo of L-42050-66)

The other Informations are likewise similarly worded except for the name of the accused, the date and place of the commission of the crime, and the kind of weapon involved. 3. In L-46997, the Information before the Court of First Instance of Samar is quoted hereunder: PEOPLE OF THE PHILIPPINES, complainant, versus PANCHITO REFUNCION, accused. CRIM. CASE NO. 933 For: ILLEGAL POSSESSION OF DEADLY WEAPON (VIOLATION OF PD NO. 9) INFORMATION The undersigned First Assistant Provincial Fiscal of Samar, accuses PANCHITO REFUNCION of the crime of ILLEGAL POSSESSION OF DEADLY WEAPON or VIOLATION OF PD NO. 9 issued by the President of the Philippines on Oct. 2, 1972, pursuant to Proclamation No. 1081 dated Sept. 21 and 23, 1972, committed as follows: That on or about the 6th day of October, 1976, in the evening at Barangay Barruz, Municipality of Matuginao, Province of Samar Philippines, and within the jurisdiction of this Honorabe Court, the abovenamed accused, knowingly, wilfully, unlawfully and feloniously carried with him outside of his residence a deadly weapon called socyatan, an instrument which from its very nature is no such as could be used as a necessary tool or instrument to earn a livelihood, which act committed by the accused is a Violation of Presidential Decree No. 9. CONTRARY TO LAW. (p. 8, rollo of L-46997)

The other Informations are similarly worded except for the name of the accused, the date and place of the commission of the crime, and the kind of weapon involved. 2. In L-46229-32 and L-46313-16, the Information filed with the Court presided by Judge Maceren follows: THE PEOPLE OF THE PHILIPPINES, plaintiff, versus REYNALDO LAQUI Y AQUINO, accused. CRIM. CASE NO. 29677

B. The Orders of dismissal In dismissing or quashing the Informations the trial courts concurred with the submittal of the defense that one essential element of the offense charged is missing from the Information, viz: that the carrying outside of the accused's residence of a bladed, pointed or blunt weapon is in furtherance or on the occasion of, connected with or related to subversion, insurrection, or rebellion, organized lawlessness or public disorder. 1. Judge Purisima reasoned out, inter alia, in this manner:

VIOL. OF PAR. 3, PD 9 IN REL. TO LOI No. 266 of the Chief Executive dated April 1, 1975 INFORMATION The undersigned accuses REYNALDO LAQUI Y AQUINO of a VIOLATION OF PARAGRAPH 3, PRESIDENTIAL DECREE NO. 9 in relation to Letter of Instruction No. 266 of the Chief Executive dated April 1, 1975, committed as follows: That on or about the 28 th day of January, 1977, in the City of Manila, Philippines, the said accused did then and there wilfully, unlawfully and knowingly carry outside of his residence a bladed and pointed weapon, to wit: an ice pick with an overall length of about 8 inches, the same not being used as a necessary tool or implement to earn his livelihood nor being used in connection therewith. Contrary to law. (p. 14, rollo of L-46229-32) ... the Court is of the opinion that in order that possession of bladed weapon or the like outside residence may be prosecuted and tried under P.D. No. 9, the information must specifically allege that the possession of bladed weapon charged was for the purpose of abetting, or in furtherance of the conditions of rampant criminality, organized lawlessness, public disorder, etc. as are contemplated and recited in Proclamation No. 1081, as justification therefor. Devoid of this specific allegation, not necessarily in the same words, the information is not complete, as it does not allege sufficient facts to constitute the offense contemplated in P.D. No. 9. The information in these cases under consideration suffer from this defect. xxx xxx xxx And while there is no proof of it before the Court, it is not difficult to believe the murmurings of detained persons brought to Court upon a charge of possession of bladed weapons under P.D. No. 9, that more than ever before, policemen - of course not all can be so heartless now have in their hands P.D. No. 9 as a most convenient tool for extortion, what with the terrifying risk of being sentenced to imprisonment of five to ten years for a rusted kitchen knife or a pair of scissors, which only God knows where it came from. Whereas before martial law an extortion-minded peace officer had to have a stock of the cheapest paltik, and even that could only convey the coercive message of one year in jail, now anything that has the semblance of a sharp edge or pointed object, available even in trash cans, may already serve the same purpose, and yet five to ten times more incriminating than the infamous paltik. For sure, P.D. No. 9 was conceived with the best of intentions and wisely applied, its necessity can never be assailed. But it seems it is back-firing, because it is too hot in the hands of policemen who are inclined to backsliding.

The checkvalves against abuse of P.D. No. 9 are to be found in the heart of the Fiscal and the conscience of the Court, and hence this resolution, let alone technical legal basis, is prompted by the desire of this Court to apply said checkvalves. (pp. 55-57, rollo of L42050-66) 2. Judge Maceren in turn gave his grounds for dismissing the charges as follows:

C. The law under which the Informations in question were filed by the People. As seen from the Informations quoted above, the accused are charged with illegal possession of deadly weapon in violation of Presidential Decree No. 9, Paragraph 3. We quote in full Presidential Decree No. 9, to wit:

xxx xxx xxx PRESIDENTIAL DECREE NO. 9 As earlier noted the "desired result" sought to be attained by Proclamation No. 1081 is the maintenance of law and order throughout the Philippines and the prevention and suppression of all forms of lawless violence as well as any act of insurrection or rebellion. It is therefore reasonable to conclude from the foregoing premises that the carrying of bladed, pointed or blunt weapons outside of one's residence which is made unlawful and punishable by said par. 3 of P.D. No. 9 is one thatabets subversion, insurrection or rebellion, lawless violence, criminality, chaos and public disorder or is intended to bring about these conditions. This conclusion is further strengthened by the fact that all previously existing laws that also made the carrying of similar weapons punishable have not been repealed, whether expressly or impliedly. It is noteworthy that Presidential Decree No. 9 does not contain any repealing clause or provisions. xxx xxx xxx The mere carrying outside of one's residence of these deadly weapons if not concealed in one's person and if not carried in any of the aforesaid specified places, would appear to be not unlawful and punishable by law. With the promulgation of Presidential Decree No. 9, however, the prosecution, through Assistant Fiscal Hilario H. Laqui, contends in his opposition to the motion to quash, that this act is now made unlawful and punishable, particularly by paragraph 3 thereof, regardless of the intention of the person carrying such weapon because the law makes it "mala prohibita". If the contention of the prosecution is correct, then if a person happens to be caught while on his way home by law enforcement officers carrying a kitchen knife that said person had just bought from a store in order that the same may be used by one's cook for preparing the meals in one's home, such person will be liable for punishment with such a severe penalty as imprisonment from five to ten years under the decree. Such person cannot claim that said knife is going to be used by him to earn a livelihood because he intended it merely for use by his cook in preparing his meals. This possibility cannot be discounted if Presidential Decree No. 9 were to be interpreted and applied in the manner that that the prosecution wants it to be done. The good intentions of the President in promulgating this decree may thus be perverted by some unscrupulous law enforcement officers. It may be used as a tool of oppression and tyranny or of extortion. xxx xxx xxx It is therefore the considered and humble view of this Court that the act which the President intended to make unlawful and punishable by Presidential Decree No. 9, particularly by paragraph 3 thereof, is one that abets or is intended to abet subversion, rebellion, insurrection, lawless violence, criminality, chaos and public disorder. (pp. 28-30, rollo of L-46229-32) 3. Judge Polo of the Court of First Instance of Samar expounded his order dismissing the Information filed before him, thus: ... We believe that to constitute an offense under the aforcited Presidential decree, the same should be or there should be an allegation that a felony was committed in connection or in furtherance of subversion, rebellion, insurrection, lawless violence and public disorder. Precisely Proclamation No. 1081 declaring a state of martial law throughout the country was issued because of wanton destruction to lives and properties widespread lawlessness and anarchy. And in order to restore the tranquility and stability of the country and to secure the people from violence anti loss of lives in the quickest possible manner and time, carrying firearms, explosives and deadly weapons without a permit unless the same would fall under the exception is prohibited. This conclusion becomes more compelling when we consider the penalty imposable, which is from five years to ten years. A strict enforcement of the provision of the said law would mean the imposition of the Draconian penalty upon the accused. xxx xxx xxx It is public knowledge that in rural areas, even before and during martial law, as a matter of status symbol, carrying deadly weapons is very common, not necessarily for committing a crime nor as their farm implement but for self-preservation or self-defense if necessity would arise specially in going to and from their farm. (pp. 18-19, rollo of L-46997) In most if not all of the cases, the orders of dismissal were given before arraignment of the accused. In the criminal case before the Court of (First Instance of Samar the accused was arraigned but at the same time moved to quash the Information. In all the cases where the accused were under arrest, the three Judges ordered their immediate release unless held on other charges. DECLARING VIOLATIONS OF GENERAL ORDERS NO. 6 and NO. 7 DATED SEPTEMBER 22, 1972, AND SEPTEMBER 23, 1972, RESPECTIVELY, TO BE UNLAWFUL AND PROVIDING PENALTIES THEREFORE. WHEREAS, pursuant to Proclamation No. 1081 dated September 21, 1972, the Philippines has been placed under a state of martial law; WHEREAS, by virtue of said Proclamation No. 1081, General Order No. 6 dated September 22, 1972 and General Order No. 7 dated September 23, 1972, have been promulgated by me; WHEREAS, subversion, rebellion, insurrection, lawless violence, criminality, chaos and public disorder mentioned in the aforesaid Proclamation No. 1081 are committed and abetted by the use of firearms, explosives and other deadly weapons; NOW, THEREFORE, I, FERDINAND E. MARCOS, Commander-in-Chief of all the Armed Forces of the Philippines, in older to attain the desired result of the aforesaid Proclamation No. 1081 and General Orders Nos. 6 and 7, do hereby order and decree that: 1. Any violation of the aforesaid General Orders Nos. 6 and 7 is unlawful and the violator shall, upon conviction suffer: (a) The mandatory penalty of death by a firing squad or electrocution as a Military, Court/Tribunal/Commission may direct, it the firearm involved in the violation is unlicensed and is attended by assault upon, or resistance to persons in authority or their agents in the performance of their official functions resulting in death to said persons in authority or their agent; or if such unlicensed firearm is used in the commission of crimes against persons, property or chastity causing the death of the victim used in violation of any other General Orders and/or Letters of Instructions promulgated under said Proclamation No. 1081: (b) The penalty of imprisonment ranging from twenty years to life imprisonment as a Military Court/Tribunal/commission may direct, when the violation is not attended by any of the circumstances enumerated under the preceding paragraph; (c) The penalty provided for in the preceding paragraphs shall be imposed upon the owner, president, manager, members of the board of directors or other responsible officers of any public or private firms, companies, corporations or entities who shall willfully or knowingly allow any of the firearms owned by such firm, company, corporation or entity concerned to be used in violation of said General Orders Nos. 6 and 7. 2. It is unlawful to posses deadly weapons, including hand grenades, rifle grenades and other explosives, including, but not limited to, "pill box bombs," "molotov cocktail bombs," "fire bombs," or other incendiary device consisting of any chemical, chemical compound, or detonating agents containing combustible units or other ingredients in such proportion, quantity, packing, or bottling that ignites by fire, by friction, by concussion, by percussion, or by detonation of all or part of the compound or mixture which may cause such a sudden generation of highly heated gases that the resultant gaseous pressures are capable of producing destructive effects on continguous objects or of causing injury or death of a person; and any person convicted thereof shall be punished by imprisonment ranging from ten to fifteen years as a Military Court/Tribunal/Commission may direct. 3. It is unlawful to carry outside of residence any bladed, pointed or blunt weapon such as "fan knife," "spear," "dagger," "bolo," "balisong," "barong," "kris," or club, except where such articles are being used as necessary tools or implements to earn a livelihood and while being used in connection therewith; and any person found guilty thereof shall suffer the penalty of imprisonment ranging from five to ten years as a Military Court/Tribunal/Commission may direct. 4. When the violation penalized in the preceding paragraphs 2 and 3 is committed during the commission of or for the purpose of committing, any other crime, the penalty shall be imposed upon the offender in its maximum extent, in addition to the penalty provided for the particular offenses committed or intended to be committed. Done in the City of Manila, this 2nd day of October in the year of Our Lord, nineteen hundred and seventy-two. (SGD) FERDINAND E. MARCOS

President Republic of the Philippines D. The arguments of the People In the Comment filed in these cases by the Solicitor General who as stated earlier joins the City Fiscal of Manila and the Provincial Fiscal of Samar in seeking the setting aside of the questioned orders of dismissal, the main argument advanced on the issue now under consideration is that a perusal of paragraph 3 of P.D. 9 'shows that the prohibited acts need not be related to subversive activities; that the act proscribed is essentially a malum prohibitum penalized for reasons of public policy. 1 The City Fiscal of Manila in his brief adds further that in statutory offenses the intention of the accused who commits the act is immaterial; that it is enough if the prohibited act is voluntarily perpetuated; that P.D. 9 provides and condemns not only the carrying of said weapon in connection with the commission of the crime of subversion or the like, but also that of criminality in general, that is, to eradicate lawless violence which characterized pre-martial law days. It is also argued that the real nature of the criminal charge is determined not from the caption or preamble of the information nor from the specification of the provision of law alleged to have been violated but by the actual recital of facts in the complaint or information. 2 E. Our Ruling on the matter 1. It is a constitutional right of any person who stands charged in a criminal prosecution to be informed of the nature and cause of the accusation against him. 3 Pursuant to the above, Section 5, Rule 110 of the Rules of Court, expressly requires that for a complaint or information to be sufficient it must, inter alia state the designation of the offense by the statute, and the acts or omissions complained of as constituting the offense. This is essential to avoid surprise on the accused and to afford him the opportunity to prepare his defense accordingly. 4 To comply with these fundamental requirements of the Constitution and the Rules on Criminal Procedure, it is imperative for the specific statute violated to be designated or mentioned 4 in the charge. In fact, another compelling reason exists why a specification of the statute violated is essential in these cases. As stated in the order of respondent Judge Maceren the carrying of so-called "deadly weapons" is the subject of another penal statute and a Manila city ordinance. Thus, Section 26 of Act No. 1780 provides: Section 26. It should be unlawful for any person to carry concealed about his person any bowie knife, dirk dagger, kris, or other deadly weapon: ... Any person violating the provisions of this section shall, upon conviction in a court of competent jurisdiction, be punished by a fine not exceeding five hundred pesos, or by imprisonment for a period not exceeding six months, or both such fine and imprisonment, in the discretion of the court. Ordinance No. 3820 of the City of Manila as amended by Ordinance No. 3928 which took effect on December 4, 1957, in turn penalizes with a fine of not more than P200.00 or imprisonment for not more than one months, or both, at the discretion of the court, anyone who shall carry concealed in his person in any manner that would disguise its deadly character any kind of firearm, bowie knife, or other deadly weapon ... in any public place.Consequently, it is necessary that the particular law violated be specified as there exists a substantial difference between the statute and city ordinance on the one hand and P.D. 9 (3) on the other regarding the circumstances of the commission of the crime and the penalty imposed for the offense. We do not agree with petitioner that the above-mentioned statute and the city ordinance are deemed repealed by P.D. 9 (3). 5 P. D. 9(3) does not contain any repealing clause or provision, and repeal by implication is not favored.6 This principle holds true with greater force with regards to penal statutes which as a rule are to be construed strictly against the state and liberally in favor of the accused. 7 In fact, Article 7 of the New Civil Code provides that laws are repealed only by subsequent ones and their violation or non- observance shall not be excused by disuse, or custom or practice to the contrary. Thus we are faced with the situation where a particular act may be made to fall, at the discretion of a police officer or a prosecuting fiscal, under the statute, or the city ordinance, or the presidential decree. That being the case, the right becomes more compelling for an accused to be confronted with the facts constituting the essential elements of the offense charged against him, if he is not to become an easy pawn of oppression and harassment, or of negligent or misguided official action a fear understandably shared by respondent Judges who by the nature of their judicial functions are daily exposed to such dangers. 2. In all the Informations filed by petitioner the accused are charged in the caption as well as in the body of the Information with a violation of paragraph 3, P.D. 9. What then are the elements of the offense treated in the presidential decree in question? We hold that the offense carries two elements: first, the carrying outside one's residence of any bladed, blunt, or pointed weapon, etc. not used as a necessary tool or implement for a livelihood; and second, that the act of carrying the weapon was either in

furtherance of, or to abet, or in connection with subversion, rebellion, insurrection, lawless violence, criminality, chaos, or public disorder. It is the second element which removes the act of carrying a deadly weapon, if concealed, outside of the scope of the statute or the city ordinance mentioned above. In other words, a simple act of carrying any of the weapons described in the presidential decree is not a criminal offense in itself. What makes the act criminal or punishable under the decree is the motivation behind it. Without that motivation, the act falls within the purview of the city ordinance or some statute when the circumstances so warrant. Respondent Judges correctly ruled that this can be the only reasonably, logical, and valid construction given to P.D. 9(3). 3. The position taken by petitioner that P.D. 9(3) covers one and all situations where a person carries outside his residence any of the weapons mentioned or described in the decree irrespective of motivation, intent, or purpose, converts these cases into one of "statutory construction." That there is ambiguity in the presidential decree is manifest from the conflicting views which arise from its implementation. When ambiguity exists, it becomes a judicial task to construe and interpret the true meaning and scope of the measure, guided by the basic principle that penal statutes are to be construed and applied liberally in favor of the accused and strictly against the state. 4. In the construction or interpretation of a legislative measure a presidential decree in these cases the primary rule is to search for and determine the intent and spirit of the law. Legislative intent is the controlling factor, for in the words of this Court in Hidalgo v. Hidalgo, per Mr. Justice Claudio Teehankee, whatever is within the spirit of a statute is within the statute, and this has to be so if strict adherence to the letter would result in absurdity, injustice and contradictions. 8 There are certain aids available to Us to ascertain the intent or reason for P.D. 9(3). First, the presence of events which led to or precipitated the enactment of P.D. 9. These events are clearly spelled out in the "Whereas" clauses of the presidential decree, thus: (1) the state of martial law in the country pursuant to Proclamation 1081 dated September 21, 1972; (2) the desired result of Proclamation 1081 as well as General Orders Nos. 6 and 7 which are particularly mentioned in P.D. 9; and (3) the alleged fact that subversion, rebellion, insurrection, lawless violence, criminality, chaos, aid public disorder mentioned in Proclamation 1081 are committed and abetted by the use of firearms and explosives and other deadly weapons. The Solicitor General however contends that a preamble of a statute usually introduced by the word "whereas", is not an essential part of an act and cannot enlarge or confer powers, or cure inherent defects in the statute (p. 120, rollo of L-42050-66); that the explanatory note or enacting clause of the decree, if it indeed limits the violation of the decree, cannot prevail over the text itself inasmuch as such explanatory note merely states or explains the reason which prompted the issuance of the decree. (pp. 114115, rollo of 46997) We disagree with these contentions. Because of the problem of determining what acts fall within the purview of P.D. 9, it becomes necessary to inquire into the intent and spirit of the decree and this can be found among others in the preamble or, whereas" clauses which enumerate the facts or events which justify the promulgation of the decree and the stiff sanctions stated therein. A "preamble" is the key of the statute, to open the minds of the makers as to the mischiefs which are to be remedied, and objects which are to be accomplished, by the provisions of the statute." (West Norman Timber v. State, 224 P. 2d 635, 639, cited in Words and Phrases, "Preamble"; emphasis supplied) While the preamble of a statute is not strictly a part thereof, it may, when the statute is in itself ambiguous and difficult of interpretation, be resorted to, but not to create a doubt or uncertainty which otherwise does not exist." (James v. Du Bois, 16 N.J.L. (1 Har.) 285, 294, cited in Words and Phrases, "Preamble") In Aboitiz Shipping Corporation, et al. v. The City of Cebu, et al. this Court had occasion to state that '(L)egislative intent must be ascertained from a consideration of the statute as a whole, and not of an isolated part or a particular provision alone. This is a cardinal rule of statutory construction. For taken in the abstract, a word or phrase might easily convey a meaning quite different from the one actually intended and evident when the word or phrase is considered with those with which it is associated. Thus, an apparently general provision may have a limited application if read together with other provisions. 9 Second, the result or effects of the presidential decree must be within its reason or intent. In the paragraph immediately following the last "Whereas" clause, the presidential decree states: NOW, THEREFORE, I , FERDINAND E. MARCOS, Commander-in-Chief of an the Armed Forces of the Philippines, in order to attain the desired result of the aforesaid Proclamation No. 1081 and General Orders Nos. 6 and 7, do hereby order and decree that:

xxx xxx xxx From the above it is clear that the acts penalized in P.D. 9 are those related to the desired result of Proclamation 1081 and General Orders Nos. 6 and 7. General Orders Nos. 6 and 7 refer to firearms and therefore have no relevance to P.D. 9(3) which refers to blunt or bladed weapons. With respect to Proclamation 1081 some of the underlying reasons for its issuance are quoted hereunder: WHEREAS, these lawless elements having taken up arms against our duly constituted government and against our people, and having committed and are still committing acts of armed insurrection and rebellion consisting of armed raids, forays, sorties, ambushes, wanton acts of murders, spoilage, plunder, looting, arsons, destruction of public and private buildings, and attacks against innocent and defenseless civilian lives and property, all of which activities have seriously endangered and continue to endanger public order and safety and the security of the nation, ... xxx xxx xxx WHEREAS, it is evident that there is throughout the land a state of anarchy and lawlessness, chaos and disorder, turmoil and destruction of a magnitude equivalent to an actual war between the forces of our duly constituted government and the New People's Army and their satellite organizations because of the unmitigated forays, raids, ambuscades, assaults, violence, murders, assassinations, acts of terror, deceits, coercions, threats, intimidations, treachery, machinations, arsons, plunders and depredations committed and being committed by the aforesaid lawless elements who have pledged to the whole nation that they will not stop their dastardly effort and scheme until and unless they have fully attained their primary and ultimate purpose of forcibly seizing political and state power in this country by overthrowing our present duly constituted government, ... (See Book I, Vital Documents on the Declaration of Martial Law in the Philippines by the Supreme Court of the Philippines, pp. 13-39) It follows that it is only that act of carrying a blunt or bladed weapon with a motivation connected with or related to the afore-quoted desired result of Proclamation 1081 that is within the intent of P.D. 9(3), and nothing else. Statutes are to be construed in the light of purposes to be achieved and the evils sought to be remedied. (U.S. v. American Tracking Association, 310 U.S. 534, cited in LVN Pictures v. Philippine Musicians Guild, 110 Phil. 725, 731; emphasis supplied) When construing a statute, the reason for its enactment should be kept in mind, and the statute should be construed with reference to its intended scope and purpose. (Statutory Construction by E.T. Crawford, pp. 604-605, cited in Commissioner of Internal Revenue v. Filipinas Compania de Seguros, 107 Phil. 1055, 1060; emphasis supplied) 5. In the construction of P.D. 9(3) it becomes relevant to inquire into the consequences of the measure if a strict adherence to the letter of the paragraph is followed. It is a salutary principle in statutory construction that there exists a valid presumption that undesirable consequences were never intended by a legislative measure, and that a construction of which the statute is fairly susceptible is favored, which will avoid all objectionable, mischievous, indefensible, wrongful, evil, and injurious consequences. 9-a It is to be presumed that when P.D. 9 was promulgated by the President of the Republic there was no intent to work a hardship or an oppressive result, a possible abuse of authority or act of oppression, arming one person with a weapon to impose hardship on another, and so on. 10 At this instance We quote from the order of Judge Purisima the following: And while there is no proof of it before the Court, it is not difficult to believe the murmurings of detained persons brought to Court upon a charge of possession of bladed weapons under P.D. No. 9, that more than ever before, policemen - of course not all can be so heartless now have in their hands P.D. No. 9 as a most convenient tool for extortion, what with the terrifying risk of being sentenced to imprisonment of five to ten years for a rusted kitchen knife or a pair of scissors, which only God knows where it came from. Whereas before martial law an extortion-minded peace officer had to have a stock of the cheapest paltik, and even that could only convey the coercive message of one year in jail, now anything that has the semblance of a sharp edge or pointed object, available even in trash cans, may already serve the same purpose, and yet five to ten times more incriminating than the infamous paltik. (pp. 72-73, rollo L-42050-66) And as respondent Judge Maceren points out, the people's interpretation of P.D. 9(3) results in absurdity at times. To his example We may add a situation where a law-abiding citizen, a lawyer by profession, after gardening in his house remembers to return the bolo used by him to his neighbor who lives about 30 meters or so away and while crossing the street meets a policeman. The latter upon seeing the bolo being carried by that citizen places him under arrest and books him for a violation of P.D. 9(3). Could the presidential decree have been conceived to produce such absurd, unreasonable, and insensible results?

6. Penal statutes are to be construed strictly against the state and liberally in favor of an accused. American jurisprudence sets down the reason for this rule to be "the tenderness of the law of the rights of individuals; the object is to establish a certain rule by conformity to which mankind would be safe, and the discretion of the court limited." 11 The purpose is not to enable a guilty person to escape punishment through a technicality but to provide a precise definition of forbidden acts. 12 Our own decisions have set down the same guidelines in this manner, viz: Criminal statutes are to be construed strictly. No person should be brought within their terms who is not clearly within them, nor should any act be pronounced criminal which is not made clearly so by the statute. (U.S. v. Abad Santos, 36 Phil. 243, 246) The rule that penal statutes are given a strict construction is not the only factor controlling the interpretation of such laws, instead, the rule merely serves as an additional, single factor to be considered as an aid in determining the meaning of penal laws. (People v. Manantan, 5 SCRA 684, 692) F. The Informations filed by petitioner are fatally defective. The two elements of the offense covered by P.D. 9(3) must be alleged in the Information in order that the latter may constitute a sufficiently valid charged. The sufficiency of an Information is determined solely by the facts alleged therein. 13 Where the facts are incomplete and do not convey the elements of the crime, the quashing of the accusation is in order. Section 2(a), Rule 117 of the Rules of Court provides that the defendant may move to quash the complaint or information when the facts charged do not constitute an offense. In U.S.U. Gacutan, 1914, it was held that where an accused is charged with knowingly rendering an unjust judgment under Article 204 of the Revised Penal Code, failure to allege in the Information that the judgment was rendered knowing it to be unjust, is fatal. 14 In People v. Yadao, 1954, this Court through then Justice Cesar Bengzon who later became Chief Justice of the Court affirmed an order of the trial court which quashed an Information wherein the facts recited did not constitute a public offense as defined in Section 1, Republic Act 145. 15 G. The filing of these Petitions was unnecessary because the People could have availed itself of other available remedies below. Pertinent provisions of the Rules of Court follow: Rule 117, Section 7. Effect of sustaining the motion to quash. If the motion to quash is sustained the court may order that another information be filed. If such order is made the defendant, if in custody, shall remain so unless he shall be admitted to bail. If such order is not made or if having been made another information is not filed withuntime to be specified in the order, or within such further time as the court may allow for good cause shown, the defendant, if in custody, shall be discharged therefrom, unless he is in custody on some other charge. Rule 110, Section 13. Amendment. The information or complaint may be amended, in substance or form, without leave of court, at any time before the defendant pleads; and thereafter and during the trial as to all matters of form, by leave and at the discretion of the court, when the same can be done without prejudice to the rights of the defendant. xxx xxx xxx Two courses of action were open to Petitioner upon the quashing of the Informations in these cases, viz: First, if the evidence on hand so warranted, the People could have filed an amended Information to include the second element of the offense as defined in the disputed orders of respondent Judges. We have ruled that if the facts alleged in the Information do not constitute a punishable offense, the case should not be dismissed but the prosecution should be given an opportunity to amend the Information. 16 Second, if the facts so justified, the People could have filed a complaint either under Section 26 of Act No. 1780, quoted earlier, or Manila City Ordinance No. 3820, as amended by Ordinance No. 3928, especially since in most if not all of the cases, the dismissal was made prior to arraignment of the accused and on a motion to quash. Section 8. Rule 117 states that:

An order sustaining the motion to quash is not a bar to another prosecution for the same offense unless the motion was based on the grounds specified in section 2, subsections (f) and (h) of this rule. Under the foregoing, the filing of another complaint or Information is barred only when the criminal action or liability had been extinguished (Section 2[f]) or when the motion to quash was granted for reasons of double jeopardy. (ibid., [h]) As to whether or not a plea of double jeopardy may be successfully invoked by the accused in all these cases should new complaints be filed against them, is a matter We need not resolve for the present. H. We conclude with high expectations that police authorities and the prosecuting arm of the government true to the oath of office they have taken will exercise utmost circumspection and good faith in evaluating the particular circumstances of a case so as to reach a fair and just conclusion if a situation falls within the purview of P.D. 9(3) and the prosecution under said decree is warranted and justified. This obligation becomes a sacred duty in the face of the severe penalty imposed for the offense. On this point, We commend the Chief State Prosecutor Rodolfo A. Nocon on his letter to the City Fiscal of Manila on October 15, 1975, written for the Secretary, now Minister of Justice, where he stated the following: In any case, please study well each and every case of this nature so that persons accused of carrying bladed weapons, specially those whose purpose is not to subvert the duly constituted authorities, may not be unduly indicted for the serious offenses falling under P.D. No. 9. 17 Yes, while it is not within the power of courts of justice to inquire into the wisdom of a law, it is however a judicial task and prerogative to determine if official action is within the spirit and letter of the law and if basic fundamental rights of an individual guaranteed by the Constitution are not violated in the process of its implementation. We have to face the fact that it is an unwise and unjust application of a law, necessary and justified under prevailing circumstances, which renders the measure an instrument of oppression and evil and leads the citizenry to lose their faith in their government. WHEREFORE, We DENY these 26 Petitions for Review and We AFFIRM the Orders of respondent Judges dismissing or quashing the Information concerned, subject however to Our observations made in the preceding pages 23 to 25 of this Decision regarding the right of the State or Petitioner herein to file either an amended Information under Presidential Decree No. 9, paragraph 3, or a new one under other existing statute or city ordinance as the facts may warrant. Without costs. SO ORDERED.

emblem, or device of the Katipunan Society, or which is commonly known as such, shall be punished by a fine of not less that five hundred pesos for more than five thousand pesos, or by imprisonment for not less than three months nor more than five years, or by both such fine and imprisonment, in the discretion of the court.

The defendant was tried in the Court of First Instance of the city of Manila on the 8th day of September, 1908. After hearing the evidence adduced the court adjudged the defendant guilty of the crime charged and sentenced him under that judgment to pay a fine of P500, Philippine currency, and to pay the costs of the action, and to suffer subsidiary imprisonment during the time and in the form and in the place prescribed by law until said fine should be paid. From that judgment and sentence the defendant appealed to this court. A careful examination of the record brought to this court discloses the following facts: That on or about the 4th day of August, 1908, in the city of Manila, the appellant Go Chico displayed in one of the windows and one of the show cases of his store, No. 89 Calle Rosario, a number of medallions, in the form of a small button, upon the faces of which were imprinted in miniature the picture of Emilio Aguinaldo, and the flag or banner or device used during the late insurrection in the Philippine Islands to designate and identify those in armed insurrection against the United States. On the day previous to the one above set forth the appellant had purchased the stock of goods in said store, of which the medallions formed a part, at a public sale made under authority of the sheriff of the city of Manila. On the day in question, the 4th of August aforesaid, the appellant was arranging his stock of goods for the purpose of displaying them to the public and in so doing placed in his showcase and in one of the windows of his store the medallions described. The appellant was ignorant of the existence of a law against the display of the medallions in question and had consequently no corrupt intention. The facts above stated are admitted. The appellant rests his right to acquittal upon two propositions:

First. That before a conviction under the law cited can be had, a criminal intent upon the part of the accused must be proved beyond a reasonable doubt.

Second. That the prohibition of the law is directed against the use of the identical banners, devices, or emblems actually used during the Philippine insurrection by those in armed rebellion against the United States.

September 15, 1909 G.R. No. 4963 THE UNITED STATES, plaintiff-appellee, vs. GO CHICO, defendant-appellant. Gibbs and Gale for appellant. Office of the Solicitor-General Harvey for appellee. Moreland, J.: The defendant is charged with the violation of section 1 of Act No. 1696 of the Philippine Commission, which reads as follows:

In the opinion of this court it is not necessary that the appellant should have acted with the criminal intent. In many crimes, made such by statutory enactment, the intention of the person who commits the crime is entirely immaterial. This is necessarily so. If it were not, the statute as a deterrent influence would be substantially worthless. It would be impossible of execution. In many cases the act complained of is itself that which produces the pernicious effect which the statute seeks to avoid. In those cases the pernicious effect is produced with precisely the same force and result whether the intention of the person performing the act is good or bad. The case at bar is a perfect illustration of this. The display of a flag or emblem used particularly within a recent period, by the enemies of the Government tends to incite resistance to governmental functions and insurrection against governmental authority just as effectively if made in the best of good faith as if made with the most corrupt intent. The display itself, without the intervention of any other factor, is the evil. It is quite different from that large class of crimes, made such by the common law or by statute, in which the injurious effect upon the public depends upon the corrupt intention of the person perpetrating the act. If A discharges a loaded gun and kills B, the interest which society has in the act depends, not upon B's death, upon the intention with which A consummated the act. If the gun were discharged intentionally, with the purpose of accomplishing the death of B, then society has been injured and its security violated; but if the gun was discharged accidentally on the part of A, then society, strictly speaking, has no concern in the matter, even though the death of B results. The reason for this is that A does not become a danger to society and institutions until he becomes a person with a corrupt mind. The mere discharge of the gun and the death of B do not of themselves make him so. With those two facts must go the corrupt intent to kill. In the case at bar, however, the evil to society and the Governmental does not depend upon the state of mind of the one who displays the banner, but upon the effect which that display has upon the public mind. In the one case the public is affected by the intention of the actor; in the other by the act itself. It is stated in volume 12 of Cyc., page 148, that

Any person who shall expose, or cause or permit to be exposed, to public view on his own premises, or who shall expose, or cause to be exposed, to public view, either on his own premises or elsewhere, 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, or any flag, banner, emblem, or device used or adopted at any time by the public enemies of the United States in the Philippine Island for the purpose of public disorder or of rebellion or insurrection against the authority of the United States in the Philippine Islands, or any flag, banner,

The legislature, however, may forbid the doing of an act and make its commission a crime without regard to the intent of the doer, and if such an intention appears the courts must give it effect although the intention may have been innocent. Whether or not in a given case the statute is to be so construed is to be determined by the court by considering the subject-matter of the prohibition as well as the language of the statute, and thus ascertaining the intention of the legislature.

In the case of The People vs. Kibler (106 N.Y. 321) the defendant was charged with the sale of adulterated milk under a statute reading as follows:

xxx xxx xxx

No person or persons shall sell or exchange or expose for sale or exchange any impure, unhealthy, adulterated, of unwholesome milk.

It was proved in that case that one Vandeburg purchased at the defendant's store 1 pint of milk which was shown to contain a very small percentage of water more than that permitted by the statute. There was no dispute about the facts, but the objection made by the defendant was that he was not allowed, upon the trial, to show an absence of criminal intent, or to go the jury upon the question whether it existed, but was condemned under a charge from the court which made his intent totally immaterial and his guilt consist in having sold the adulterated article whether he knew it or not and however carefully he may have sought to keep on hand and sell the genuine article. The opinion of the court in that case says:

In this case, if the defendants could have shown that they believed that in fact notice had been given to the inspector, although it had not, they would not have been guilty of the offense, because the intention to do the act would have been wanting. Their plea is: True, we intended to remove the inspector without notice, but we thought the law permitted it. This was a mistake of law, and is not strictly a defense.

xxx xxx xxx

As the law stands, knowledge or intention forms no elements of the offense. The act alone, irrespective of its motive, constitutes the crime.

If the offense is merely technical, the punishment can be made correspondingly nominal; while a rule requiring proof of a criminal intent to violate the statute, independent of an intent to do the act which the statute declares shall constitute the offense, would, in many cases, prevent the restraining influence which the statute was designed to secure.

In the case of Fiedler vs. Darrin (50 N.Y. 437) the court says: xxx xxx xxx But when an act is illegal, the intent of the offender is immaterial. It is notorious that the adulteration of food products has grown to proportions so enormous as to menace the health and safety of the people. Ingenuity keeps pace with greed, and the careless and heedless consumers are exposed to increasing perils. To redress such evils is a plain duty but a difficult task. Experience has taught the lesson that repressive measures which depend for their efficiency upon proof of the dealer's knowledge or of his intent to deceive and defraud are of title use and rarely accomplish their purpose. Such an emergency may justify legislation which throws upon the seller the entire responsibility of the purity and soundness of what he sells and compels him to know and certain.

In the case of The Commonwealth vs. Murphy (165 Mass. 66) the court says:

In general, it may be said that there must be malus animus, or a criminal intent. But there is a large class of cases in which, on grounds of public policy, certain acts are made punishable without proof that the defendant understands the facts that give character to his act.

In the case of Gardner vs. The People (62 N.Y. 299) the question arose under a statute which provided that an inspector of elections of the city of New York should not be removed from office except "after notice in writing to the officer sought to be removed, which notice shall set forth clearly and distinctly the reasons for his removal," and further provided that any person who removed such an officer without such notice should be guilty of a misdemeanor. An officer named Sheridan was removed by Gardener, the defendant, without notice. Gardener was arrested and convicted of a misdemeanor under the statute. He appealed from the judgment of conviction and the opinion from which the following quotation is made was written upon the decision of that appeal. Chief Justice Church, writing the opinion of the court, says in relation to criminal intent:

In such cases it is deemed best to require everybody at his peril to ascertain whether his act comes within the legislative prohibition.

xxx xxx xxx

In short, the defense was an honest misconstruction of the law under legal device. The court ruled out the evidence offered, and held that intentionally doing the act prohibited constituted the offense. It is quite clear that the facts offered to be shown, if true, would relieve the defendant from the imputation of a corrupt intent, and, indeed, from any intent to violate the statute. The defendants made a mistake of law. Such mistakes do not excuse the commission of prohibited acts. "The rule on the subject appears to be, that in acts mala in se, intent governs but in those mala prohibita, the only inquiry is, has the law been violated?

Considering the nature of the offense, the purpose to be accomplished, the practical methods available for the enforcement of the law, and such other matters as throw light upon the meaning of the language, the question in interpreting a criminal statute is whether the intention of the legislature was to make knowledge of the facts an essential element of the offense, or to put upon everyone the burden of finding out whether his contemplated act is prohibited, and of refraining from it if it is.

xxx xxx xxx

The authorities seem to establish that sustain and indictment for doing a prohibited act, it is sufficient to prove that the act was knowingly and intentionally done.

In the case of Halsted vs. The State (41 N.J.L. 552; 32 Am. Rep. 247), the question of a criminal intent arose under a statute, under which the defendant was convicted of a crime, providing that if any township committee or other body shall disburse or vote for the disbursement of public moneys in excess of appropriations made for the purpose, the persons constituting such board shall be guilty of a crime. The defendant was one who violated this law by voting to incur obligations in excess of the appropriation. He was convicted and appealed and the opinion from which the quotation is taken was written upon a decision of that appeal. That court says:

When the State had closed, the defense offered to show that the defendant, in aiding in the passage and effectuation of the resolution which I have pronounced to be illegal, did so under the advice of counsel and in good faith, and from pure and honest motives, and that he therein exercise due care and caution.

necessary element of the crime. The statutory definition of the offense embraces no word implying that the prohibited act shall be done knowingly or willfully. The wording is plain. The Act means what it says. Nothing is left to the interpretation. Care must be exercised in distinguishing the differences between the intent to commit the crime and the intent to perpetrate the act. The accused did not consciously intend to commit a crime; but he did intend to commit an act, and the act is, by the very nature of things, the crime itself intent and all. The wording of the law is such that the intent and the act are inseparable. The act is the crime. The accused intended to put the device in his window. Nothing more is required to commit the crime. We do not believe that the second proposition of the accused, namely, that the law is applicable only to the identical banners, etc., actually used in the late insurrection, and not to duplicates of those banners, can be sustained.

xxx xxx xxx

As there is an undoubted competency in the lawmaker to declare an act criminal, irrespective of the knowledge or motive of the doer of such act, there can be of necessity, no judicial authority having the power to require, in the enforcement of the law, such knowledge or motive to be shown. In such instances the entire function of the court is to find out the intention of the legislature, and to enforce the law in absolute conformity to such intention. And in looking over the decided cases on the subject it will be found that in the considered adjudications this inquiry has been the judicial guide.

It is impossible that the Commission should have intended to prohibit the display of the flag or flags actually used in the insurrection, and, at the same time, permit exact duplicates thereof (saving, perhaps, size) to be displayed without hindrance. In the case before us, to say that the display of a certain banner is a crime and that the display of its exact duplicate is not is to say nonsense. The rules governing the interpretation of statutes are rules of construction not destruction. To give the interpretation contended for by the appellant would, as to this particular provision, nullify the statute altogether. The words "used during the late insurrection in the Philippine Islands to designate or identity those in armed rebellion against the United States" mean not only the identical flags actually used in the insurrection, but any flag which is of that type. This description refers not to a particular flag, but to a type of flag. That phrase was used because there was and is no other way of describing that type of flag. While different words might be employed, according to the taste of the draftsman, the method of description would have to be the same. There is no concrete word known by which that flag could be aptly or properly described. There was no opportunity, within the scope of a legislative enactment, to describe the physical details. It had no characteristics whatever, apart from its use in the insurrection, by which it could, in such enactment, be identified. The great and the only characteristic which it had upon the which the Commission could seize as a means of description and identification was the fact that it was used in the insurrection. There was, therefore, absolutely no way in which the Commission could, in the Act, describe the flag except by reciting where and how it was used. It must not be forgotten that the Commission, by the words and phrases used, was not attempting to describe a particular flag, but a type of flag. They were not describing a flag used upon a particular field or in a certain battle, but a type of flag used by an army a flag under which many persons rallied and which stirred their sentiments and feelings wherever seen or in whatever form it appeared. It is a mere incident of description that the flag was used upon a particular field or in a particular battle. They were describing the flag not a flag. It has a quality and significance and an entity apart from any place where or form in which it was used.

In the case of Rex vs. Ogden (6 C. & P. 631; 25 E.C.L. 611), the prisoner was indicted for unlawfully transposing from one piece of wrought plate to another the lion-poisson contrary to the statutes. It was conceded that the act was done without any fraudulent intention. The court said:

There are no words in the act of Parliament referring to any fraudulent intention. The words of it are, 'Shall transpose or remove, or cause of procure to be transposed or removed, from one piece of wrought plate to another.

In the case of The State vs. McBrayer (98 N.C. 623) the court stated:

It is a mistaken notion that positive, willful intent to violate the criminal law is an essential ingredient in every criminal offense, and that where is an absence of such intent there is no offense; this is especially true as to statutory offenses. When the statute plainly forbids an act to be done, and it is done by some person, the law implies conclusively the guilty intent, although the offender was honestly mistaken as to the meaning of the law he violates. When the language is plain and positive, and the offense is not made to depend upon the positive, willful intent and purpose, nothing is left to interpretation.

In the case of the Commonwealth vs. Weiss (139 Pa. St. 247), the question arose on an appeal by the defendant from a judgment requiring him to pay a penalty for a violation of the statute of the State which provided that any person would be liable to pay a penalty "who shall manufacture, sell, or offer or expose for sale, or have in his possession with intent to sell," oleomargarine, etc. At the trial the defendant requested the court to instruct the injury that if they believed, from the evidence, that the defendant did not knowingly furnish or authorize to be furnished, or knew of there furnished, to any of his customers any oleomargarine, but, as far as he knew, furnished genuine butter, then the verdict must be for the defendant. The court refused to make the charge as requested and that is the only point upon which the defendant appealed. The court says:

Language is rarely so free from ambiguity as to be incapable of being used in more than one sense, and the literal interpretation of a statute may lead to an absurdity or evidently fail to give the real intent of the legislature. When this is the case, resort is had to the principle that the spirit of a law controls the letter, so that a thing which is within the intention of a statute is as much within the statute as if it were within the letter, and a thing which is within the letter of the statute is not within the statute unless it be within the intention of the makers, and the statute should be construed as to advance the remedy and suppress the mischief contemplated by the framers. (U.S. vs. Kirby, 7 Wall. 487; State Bolden, 107 La. 116, 118; U.S. vs. Buchanan, 9 Fed. Rep. 689; Green vs. Kemp, 13 Mass. 515; Lake Shore R. R. Co. vs. Roach, 80 N.Y. 339; Delafield vs. Brady, 108 N.Y. 524 Doyle vs. Doyle, 50 Ohio State 330.)

The intention of the legislature and the object aimed at, being the fundamental inquiry in judicial construction, are to control the literal interpretation of particular language in a statute, and language capable of more than one meaning is to be taken in that sense which will harmonize with such intention and object, and effect the purpose of the enactment. (26 Am. & Eng. Ency. of Law 602.)

The prohibition is absolute and general; it could not be expressed in terms more explicit and comprehensive. The statutory definition of the offense embraces no word implying that the forbidden act shall be done knowingly or willfully, and if it did, the designed purpose of the act would be practically defeated. The intention of the legislature is plain, that persons engaged in the traffic so engage in it at their peril and that they can not set up their ignorance of the nature and qualities of the commodities they sell, as a defense.

Literally hundreds of cases might be cited to sustain this proposition.

The following authorities are to the same effect: State vs. Gould (40 Ia. 374); Commonwealth vs. Farren (9 Allen 489); Commonwealth vs. Nichols (10 Allen 199); Commonwealth vs. Boyton (2 Allen 160); Wharton's Criminal Law, section 2442; Commonwealth vs. Sellers (130 Pa. 32); 3 Greenleaf on Evidence, section 21; Farrell vs. The State (32 Ohio State 456); Beekman vs. Anthony (56 Miss. 446); The People vs. Roby (52 Mich. 577) sLxZ. It is clear from the authorities cited that in the act under consideration the legislature did not intend that a criminal intent should be a

The preamble is no part of the statute, but as setting out the object and intention of the legislature, it is considered in the construction of an act. Therefore, whenever there is ambiguity, or wherever the words of the act have more than one meaning, and there is no doubt as to the subject-matter to which they are to be applied, the preamble may be used." (U.S. vs. Union Pacific R. R. Co., 91 U.S. 72; Platt vs. Union Pacific R. R. Co., 99 U.S. 48; Myer vs. Western Car Co., 102 U.S. 1; Holy Trinity Church vs. U.S., 143 U.S. 457; Coosaw Mining Co. vs. South Carolina, 144 U.S. 550; Cohn vs. Barrett, 5 Cal. 195; Barnes vs. Jones, 51 Cal. 303; Field vs. Gooding, 106 Mass. 310; People vs. Molineaux, 40 N.Y. 113; Smith vs. The People, 47 N.Y. 330; The People vs. Davenport, 91 N.Y. 547; The People vs. O'Brien, 111 N.Y. 1)

The statute, then, being penal, must be construed with such strictness as to carefully safeguard the rights of the defendant and at the same time preserve the obvious intention of the legislature. If the language be plain, it will be construed as it reads, and the words of the statute given their full meaning; if ambiguous, the court will lean more strongly in favor of the defendant than it would if the statute were remedial. In both cases it will endeavor to effect substantial justice." (Bolles vs. Outing Co., 175 U.S. 262, 265; U.S. vs. Wiltberger, 5 Wheat. 76, 95; U.S. vs. Reese, 92 U.S. 214)

Acting on complaints for non-development docketed as NHA Cases Nos. 2619 and 2620 filed by the Delta Village Homeowners Association, Inc., the National Housing Authority rendered a resolution on January 17, 1979 inter alia ordering petitioner to cease and desist from making further sales of lots in said village or in any project owned by him. While NHA Cases Nos. 2619 and 2620 were still pending, private respondent filed with the Office of Appeals, Adjudication and Legal Affairs (OAALA) of the Human Settlements Regulatory Commission (HSRC), a complaint (Case No. 80-589) against petitioner and spouses Rodolfo and Adelina Relevo alleging that, in view of the above NHA resolution, he suspended payment of his amortizations, but that petitioner resold one of the two lots to the said spouses Relevo, in whose favor title to the said property was registered. Private respondent further alleged that he suspended his payments because of petitioners failure to develop the village. Private respondent prayed for the annulment of the sale to the Relevo spouses and for reconveyance of the lot to him. On October 11, 1983, the OAALA rendered a decision upholding the right of petitioner to cancel the contract with private respondent and dismissed private respondents complaint. On appeal, the Commission Proper of the HSRC reversed the OAALA and, applying P.D. 957, ordered petitioner to complete the subdivision development and to reinstate private respondents purchase contract over one lot, and as to the other, it appearing that Transfer Certificate of Title No. 269546 has been issued to x x x spouses Rodolfo and Ad(e)lina Relevo x x x, the management of E & S Delta Village is hereby ordered to immediately refund to the complainant-appellant (herein private respondent) all payments made thereon, plus interests computed at legal rates from date of receipt hereof until fully paid. The respondent Executive Secretary, on appeal, affirmed the decision of the HSRC and denied the subsequent Motion for Reconsideration for lack of merit and for having been filed out of time. Petitioner has now filed this Petition for review before the Supreme Court. Under Revised Administrative Circular No. 1-95, appeals from judgments or final orders of the x x x Office of the President x x x may be taken to the Court of Appeals x x x. However, in order to hasten the resolution of this case, which was deemed submitted for decision one and a half years ago, the Court resolved to make an exception to the said Circular in the interest of speedy justice. In his Petition before this Court, petitioner avers that the Executive Secretary erred in applying P.D. 957 and in concluding that the non-development of the E & S Delta Village justified private respondents non-payment of his amortizations. Petitioner avers that inasmuch as the land purchase agreements were entered into in 1972, prior to the effectivity of P.D. 957 in 1976, said law cannot govern the transaction. We hold otherwise, and herewith rule that respondent Executive Secretary did not abuse his discretion, and that P.D. 957 is to be given retroactive effect so as to cover even those contracts executed prior to its enactment in 1976. P.D. 957 did not expressly provide for retroactivity in its entirety, but such can be plainly inferred from the unmistakable intent of the law. The intent of the law, as culled from its preamble and from the situation, circumstances and conditions it sought to remedy, must be enforced. On this point, a leading authority on statutory construction stressed: The intent of a statute is the law x x x. The intent is the vital part, the essence of the law, and the primary rule of construction is to ascertain and give effect to the intent. The intention of the legislature in enacting a law is the law itself and must be enforced when ascertained, although it may not be consistent with the strict letter of the statute. Courts will not follow the letter of a statute when it leads away from the true intent and purpose of the legislature and to conclusions inconsistent with the general purpose of the act x x x. In construing statutes the proper course is to start out and follow the true intent of the legislature and to adopt that sense which harmonizes best with the context and promotes in the fullest manner the apparent policy and objects of the legislature.1 (italics supplied.) It goes without saying that, as an instrument of social justice, the law must favor the weak and the disadvantaged, including, in this instance, small lot buyers and aspiring homeowners. P.D. 957 was enacted with no other end in view than to provide a protective mantle over helpless citizens who may fall prey to the manipulations and machinations of unscrupulous subdivision and condominium sellers, and such intent is nowhere expressed more clearly than in its preamble, pertinent portions of which read as follows: WHEREAS, it is the policy of the State to afford its inhabitants the requirements of decent human settlement and to provide them with ample opportunities for improving their quality of life;

It is said that notwithstanding this rule (the penal statutes must be construed strictly) the intention of the lawmakers must govern in the construction of penal as well as other statutes. This is true, but this is not a new, independent rule which subverts the old. It is a modification of the known maxim and amounts to this -- that though penal statutes are to be construed strictly, they are not be construed so strictly as to defeat the obvious purpose of the legislature. (U.S. vs. Wiltberger, 5 Wheat. 76; Taylor vs. Goodwin, L.R. 4, Q.B.Civ. 228.)

In the latter case it was held that under a statute which imposed a penalty for "furiously driving any sort of carriage" a person could be convicted for immoderately driving a bicycle.

It is presumed that the legislature intends to impart to its enactments such a meaning as will render then operative and effective, and to prevent persons from eluding or defeating them. Accordingly, in case of any doubt or obscurity, the construction will be such as to carry out these objects. (Black, Interpretation of Laws, p. 106.)

In The People vs. Supervisors (43 N.Y. 130) the court said:

The occasion of the enactment of a law always be referred to in interpreting and giving effect to it. The court should place itself in the situation of the legislature and ascertain the necessity and probable object of the statute, and then give such construction to the language used as to carry the intention of the legislature into effect so far as it can be ascertained from the terms of the statute itself. (U. S. vs. Union Pacific R. R. Co., 91 U.S. 72, 79.)

We do not believe that in construing the statute in question there is necessity requiring that clauses should be taken from the position given them and placed in other portions of the statute in order to give the whole Act a reasonable meaning. Leaving all of the clauses located as they now are in the statute, a reasonable interpretation, based upon the plain and ordinary meaning of the words used, requires that the Act should be held applicable to the case at bar. The judgment of the court below and the sentence imposed thereunder are hereby affirmed. So ordered.

[G.R. No. 109404. January 22, 1996]FLORENCIO EUGENIO, doing business under the name E & S Delta Village, petitioner, vs. EXECUTIVE SECRETARY FRANKLIN M. DRILON, HOUSING AND LAND USE. REGULATORY BOARD (HLURB) AND PROSPERO PALMIANO, respondents. RESOLUTION PANGANIBAN, J.: Did the failure to develop a subdivision constitute legal justification for the non-payment of amortizations by a buyer on installment under land purchase agreements entered into prior to the enactment of P.D. 957, The Subdivision and Condominium Buyers Protective Decree? This is the major question raised in the instant Petition seeking to set aside the Decision of the respondent Executive Secretary dated March 10, 1992 in O.P. Case No. 3761, which affirmed the order of the respondent HLURB dated September 1, 1987. On May 10, 1972, private respondent purchased on installment basis from petitioner and his co-owner/ developer Fermin Salazar, two lots in the E & S Delta Village in Quezon City.

WHEREAS, numerous reports reveal that many real estate subdivision owners, developers, operators, and/or sellers have reneged on their representations and obligations to provide and maintain properly subdivision roads, drainage, sewerage, water systems, lighting systems, and other similar basic requirements, thus endangering the health and safety of home and lot buyers; WHEREAS, reports of alarming magnitude also show cases of swindling and fraudulent manipulations perpetrated by unscrupulous subdivision and condominium sellers and operators, such as failure to deliver titles to the buyers or titles free from liens and encumbrances, and to pay real estate taxes, and fraudulent sales of the same subdivision lots to different innocent purchasers for value;2 (italics supplied.) From a dedicated reading of the preamble, it is manifest and unarguable that the legislative intent must have been to remedy the alarming situation by having P.D. 957 operate retrospectively even upon contracts already in existence at the time of its enactment. Indeed, a strictly prospective application of the statute will effectively emasculate it, for then the State will not be able to exercise its regulatory functions and curb fraudulent schemes and practices perpetrated under or in connection with those contracts and transactions which happen to have been entered into prior to P.D. 957, despite obvious prejudice to the very subdivision lot buyers sought to be protected by said law. It is hardly conceivable that the legislative authority intended to permit such a loophole to remain and continue to be a source of misery for subdivision lot buyers well into the future. Adding force to the arguments for the retroactivity of P.D. 957 as a whole are certain of its provisions, viz., Sections 20, 21 and 23 thereof, which by their very terms have retroactive effect and will impact upon even those contracts and transactions entered into prior to P.D. 957s enactment: Sec. 20. Time of Completion. - Every owner or developer shall construct and provide the facilities, improvements, infrastructures and other forms of development, including water supply and lighting facilities, which are offered and indicated in the approved subdivision or condominium plans, brochures, prospectus, printed matters, letters or in any form of advertisement, within one year from the date of the issuance of the license for the subdivision or condominium project or such other period of time as may be fixed by the Authority. Sec. 21. Sales Prior to Decree. - In cases of subdivision lots or condominium units sold or disposed of prior to the effectivity of this Decree, it shall be incumbent upon the owner or developer of the subdivision or condominium project to complete compliance with his or its obligations as provided in the preceding section within two years from the date of this Decree unless otherwise extended by the Authority or unless an adequate performance bond is filed in accordance with Section 6 hereof. Failure of the owner or developer to comply with the obligations under this and the preceding provisions shall constitute a violation punishable under Sections 38 and 39 of this Decree. Sec. 23. Non-Forfeiture of Payments. - No installment payment made by a buyer in a subdivision or condominium project for the lot or unit he contracted to buy shall be forfeited in favor of the owner or developer when the buyer, after due notice to the owner or developer, desists from further payment due to the failure of the owner or developer to develop the subdivision or condominium project according to the approved plans and within the time limit for complying with the same. Such buyer may, at his option, be reimbursed the total amount paid including amortization interests but excluding delinquency interests, with interest thereon at the legal rate. (italics supplied) On the other hand, as argued by the respondent Executive Secretary, the application of P.D. 957 to the contracts in question will be consistent with paragraph 4 of the contracts themselves, which expressly provides: (4) The party of the First Part hereby binds himself to subdivide, develop and improve the entire area covered by Transfer Certificate of Title No. 168119 of which the parcels of lands subject of this contract is a part in accordance with the provisions of Quezon City Ordinance No. 6561, S-66 and the Party of the First Part further binds himself to comply with and abide by all laws, rules and regulations respecting the subdivision and development of lots for residential purposes as may be presently in force or may hereafter be required by laws passed by the Congress of the Philippines or required by regulations of the Bureau of Lands, the General Registration Office and other government agencies. (italics supplied) Moreover, as P.D. 957 is undeniably applicable to the contracts in question, it follows that Section 23 thereof had been properly invoked by private respondent when he desisted from making further payment to petitioner due to petitioners failure to develop the subdivision project according to the approved plans and within the time limit for complying with the same. (Such incomplete development of the subdivision and non-performance of specific contractual and statutory obligations on the part of the subdivisionowner had been established in the findings of the HLURB which in turn were confirmed by the respondent Executive Secretary in his assailed Decision.) Furthermore, respondent Executive Secretary also gave due weight to the following matters: although private respondent started to default on amortization payments beginning May 1975, so that by the end of July 1975 he had already incurred three consecutive arrearages in payments, nevertheless, the petitioner, who had the cancellation option available to him under the contract, did not exercise or utilize the same in timely fashion but delayed until May 1979 when he finally made up his mind to cancel

the contracts. But by that time the land purchase agreements had already been overtaken by the provisions of P.D. 957, promulgated on July 12, 1976. (In any event, as pointed out by respondent HLURB and seconded by the Solicitor General, the defaults in amortization payments incurred by private respondent had been effectively condoned by the petitioner, by reason of the latters tolerance of the defaults for a long period of time.) Likewise, there is no merit in petitioners contention that respondent Secretary exceeded his jurisdiction in ordering the refund of private respondents payments on Lot 12 although (according to petitioner) only Lot 13 was the subject of the complaint. Respondent Secretary duly noted that the supporting documents submitted substantiating the claim of non-development justified such order inasmuch as such claim was also the basis for non-payment of amortizations on said Lot 12. Finally, since petitioners motion for reconsideration of the (Executive Secretarys) Decision dated March 10, 1992 was filed only on the 21st day from receipt thereof, said decision had become final and executory, pursuant to Section 7 of Administrative Order No. 18 dated February 12, 1987, which provides that (d)ecisions/ resolutions! orders of the Office of the President shall, except as otherwise provided for by special laws, become final after the lapse of fifteen (15) days from receipt of a copy thereof x x x , unless a motion for reconsideration thereof is filed within such period. WHEREFORE, there being no showing of grave abuse of discretion, the petition is DENIED due course and is hereby DISMISSED. No costs. SO ORDERED. Narvasa, C.J. (Chairman), Davide Jr., Melo, and Francisco, JJ., concur.

CONTEXT AS A WHOLE G.R. No. L-39419 April 12, 1982 MAPALAD AISPORNA, petitioner, vs. THE COURT OF APPEALS and THE PEOPLE OF THE PHILIPPINES, respondents.

DE CASTRO, J.: In this petition for certiorari, petitioner-accused Aisporna seeks the reversal of the decision dated August 14, 19741 in CA-G.R. No. 13243-CR entitled "People of the Philippines, plaintiff-appellee, vs. Mapalad Aisporna, defendant-appellant" of respondent Court of Appeals affirming the judgment of the City Court of Cabanatuan 2rendered on August 2, 1971 which found the petitioner guilty for having violated Section 189 of the Insurance Act (Act No. 2427, as amended) and sentenced her to pay a fine of P500.00 with subsidiary imprisonment in case of insolvency, and to pay the costs. Petitioner Aisporna was charged in the City Court of Cabanatuan for violation of Section 189 of the Insurance Act on November 21, 1970 in an information 3 which reads as follows: That on or before the 21st day of June, 1969, in the City of Cabanatuan, Republic of the Philippines, and within the jurisdiction of this Honorable Court, the above-named accused, did then and there, wilfully, unlawfully and feloniously act as agent in the solicitation or procurement of an application for insurance by soliciting therefor the application of one Eugenio S. Isidro, for and in behalf of Perla Compania de Seguros, Inc., a duly organized insurance company, registered under the laws of the Republic of the Philippines, resulting in the issuance of a Broad Personal Accident Policy No. 28PI-RSA 0001 in the amount not exceeding FIVE THOUSAND PESOS (P5,000.00) dated June 21, 1969, without said accused having first secured a certificate of authority to act as such agent from the office of the Insurance Commissioner, Republic of the Philippines. CONTRARY TO LAW. The facts, 4 as found by the respondent Court of Appeals are quoted hereunder: IT RESULTING: That there is no debate that since 7 March, 1969 and as of 21 June, 1969, appellant's husband, Rodolfo S. Aisporna was duly licensed by Insurance Commission as agent to Perla Compania de Seguros, with license to expire on 30 June,

1970, Exh. C; on that date, at Cabanatuan City, Personal Accident Policy, Exh. D was issued by Perla thru its author representative, Rodolfo S. Aisporna, for a period of twelve (12) months with beneficiary as Ana M. Isidro, and for P5,000.00; apparently, insured died by violence during lifetime of policy, and for reasons not explained in record, present information was filed by Fiscal, with assistance of private prosecutor, charging wife of Rodolfo with violation of Sec. 189 of Insurance Law for having, wilfully, unlawfully, and feloniously acted, "as agent in the solicitation for insurance by soliciting therefore the application of one Eugenio S. Isidro for and in behalf of Perla Compaa de Seguros, ... without said accused having first secured a certificate of authority to act as such agent from the office of the Insurance Commission, Republic of the Philippines." and in the trial, People presented evidence that was hardly disputed, that aforementioned policy was issued with active participation of appellant wife of Rodolfo, against which appellant in her defense sought to show that being the wife of true agent, Rodolfo, she naturally helped him in his work, as clerk, and that policy was merely a renewal and was issued because Isidro had called by telephone to renew, and at that time, her husband, Rodolfo, was absent and so she left a note on top of her husband's desk to renew ... Consequently, the trial court found herein petitioner guilty as charged. On appeal, the trial court's decision was affirmed by the respondent appellate court finding the petitioner guilty of a violation of the first paragraph of Section 189 of the Insurance Act. Hence, this present recourse was filed on October 22, 1974. 5 In its resolution of October 28, 1974, 6 this Court resolved, without giving due course to this instant petition, to require the respondent to comment on the aforesaid petition. In the comment 7 filed on December 20, 1974, the respondent, represented by the Office of the Solicitor General, submitted that petitioner may not be considered as having violated Section 189 of the Insurance Act. 8 On April 3, 1975, petitioner submitted his Brief 9 while the Solicitor General, on behalf of the respondent, filed a manifestation 10 in lieu of a Brief on May 3, 1975 reiterating his stand that the petitioner has not violated Section 189 of the Insurance Act. In seeking reversal of the judgment of conviction, petitioner assigns the following errors
11

Any person or company violating the provisions of this section shall be fined in the sum of five hundred pesos. On the conviction of any person acting as agent, sub-agent, or broker, of the commission of any offense connected with the business of insurance, the Insurance Commissioner shall immediately revoke the certificate of authority issued to him and no such certificate shall thereafter be issued to such convicted person. A careful perusal of the above-quoted provision shows that the first paragraph thereof prohibits a person from acting as agent, subagent or broker in the solicitation or procurement of applications for insurance without first procuring a certificate of authority so to act from the Insurance Commissioner, while its second paragraph defines who is an insurance agent within the intent of this section and, finally, the third paragraph thereof prescribes the penalty to be imposed for its violation. The respondent appellate court ruled that the petitioner is prosecuted not under the second paragraph of Section 189 of the aforesaid Act but under its first paragraph. Thus ... it can no longer be denied that it was appellant's most active endeavors that resulted in issuance of policy to Isidro, she was there and then acting as agent, and received the pay thereof her defense that she was only acting as helper of her husband can no longer be sustained, neither her point that she received no compensation for issuance of the policy because any person who for compensation solicits or obtains insurance on behalf of any insurance company or transmits for a person other than himself an application for a policy of insurance to or from such company or offers or assumes to act in the negotiating of such insurance, shall be an insurance agent within the intent of this section, and shall thereby become liable to all the duties, requirements, liabilities, and penalties, to which an agent of such company is subject. paragraph 2, Sec. 189, Insurance Law, now it is true that information does not even allege that she had obtained the insurance, for compensation which is the gist of the offense in Section 189 of the Insurance Law in its 2nd paragraph, but what appellant apparently overlooks is that she is prosecuted not under the 2nd but under the 1st paragraph of Sec. 189 wherein it is provided that, No person shall act as agent, sub-agent, or broker, in the solicitation or procurement of applications for insurance, or receive for services in obtaining new insurance any commission or other compensation from any insurance company doing business in the Philippine Island, or agent thereof, without first procuring a certificate of authority to act from the insurance commissioner, which must be renewed annually on the first day of January, or within six months thereafter. therefore, there was no technical defect in the wording of the charge, so that Errors 2 and 4 must be overruled.12 From the above-mentioned ruling, the respondent appellate court seems to imply that the definition of an insurance agent under the second paragraph of Section 189 is not applicable to the insurance agent mentioned in the first paragraph. Parenthetically, the respondent court concludes that under the second paragraph of Section 189, a person is an insurance agent if he solicits and obtains an insurance for compensation, but, in its first paragraph, there is no necessity that a person solicits an insurance for compensation in order to be called an insurance agent. We find this to be a reversible error. As correctly pointed out by the Solicitor General, the definition of an insurance agent as found in the second paragraph of Section 189 is intended to define the word "agent" mentioned in the first and second paragraphs of the aforesaid section. More significantly, in its second paragraph, it is explicitly provided that the definition of an insurance agent is within the intent of Section 189. Hence Any person who for compensation ... shall be an insurance agent within the intent of this section, ... Patently, the definition of an insurance agent under the second paragraph holds true with respect to the agent mentioned in the other two paragraphs of the said section. The second paragraph of Section 189 is a definition and interpretative clause intended to qualify the term "agent" mentioned in both the first and third paragraphs of the aforesaid section. Applying the definition of an insurance agent in the second paragraph to the agent mentioned in the first and second paragraphs would give harmony to the aforesaid three paragraphs of Section 189. Legislative intent must be ascertained from a consideration of the statute as a whole. The particular words, clauses and phrases should not be studied as detached and isolated expressions, but the whole and every part of the statute must be considered in fixing the meaning of any of its parts and in order to produce harmonious whole. 13 A statute must be so construed as to harmonize and give effect to all its provisions whenever possible. 14 The meaning of the law, it must be borne in mind, is not to be extracted from any single part, portion or section or from isolated words and phrases, clauses or sentences but from a general consideration or view of the act as a whole. 15 Every part of the statute must be interpreted with reference to the context. This means that every part of the statute must be considered together with the other

allegedly committed by the appellate court:

1. THE RESPONDENT COURT OF APPEALS ERRED IN FINDING THAT RECEIPT OF COMPENSATION IS NOT AN ESSENTIAL ELEMENT OF THE CRIME DEFINED BY THE FIRST PARAGRAPH OF SECTION 189 OF THE INSURANCE ACT. 2. THE RESPONDENT COURT OF APPEALS ERRED IN GIVING DUE WEIGHT TO EXHIBITS F, F-1, TO F-17, INCLUSIVE SUFFICIENT TO ESTABLISH PETITIONER'S GUILT BEYOND REASONABLE DOUBT. 3. THE RESPONDENT COURT OF APPEALS ERRED IN NOT ACQUITTING HEREIN PETITIONER. We find the petition meritorious. The main issue raised is whether or not a person can be convicted of having violated the first paragraph of Section 189 of the Insurance Act without reference to the second paragraph of the same section. In other words, it is necessary to determine whether or not the agent mentioned in the first paragraph of the aforesaid section is governed by the definition of an insurance agent found on its second paragraph. The pertinent provision of Section 189 of the Insurance Act reads as follows: No insurance company doing business within the Philippine Islands, nor any agent thereof, shall pay any commission or other compensation to any person for services in obtaining new insurance, unless such person shall have first procured from the Insurance Commissioner a certificate of authority to act as an agent of such company as hereinafter provided. No person shall act as agent, sub-agent, or broker in the solicitation of procurement of applications for insurance, or receive for services in obtaining new insurance, any commission or other compensation from any insurance company doing business in the Philippine Islands, or agent thereof, without first procuring a certificate of authority so to act from the Insurance Commissioner, which must be renewed annually on the first day of January, or within six months thereafter. Such certificate shall be issued by the Insurance Commissioner only upon the written application of persons desiring such authority, such application being approved and countersigned by the company such person desires to represent, and shall be upon a form approved by the Insurance Commissioner, giving such information as he may require. The Insurance Commissioner shall have the right to refuse to issue or renew and to revoke any such certificate in his discretion. No such certificate shall be valid, however, in any event after the first day of July of the year following the issuing of such certificate. Renewal certificates may be issued upon the application of the company. Any person who for compensation solicits or obtains insurance on behalf of any insurance company, or transmits for a person other than himself an application for a policy of insurance to or from such company or offers or assumes to act in the negotiating of such insurance, shall be an insurance agent within the intent of this section, and shall thereby become liable to all the duties, requirements, liabilities, and penalties to which an agent of such company is subject.

parts, and kept subservient to the general intent of the whole enactment, not separately and independently. 16 More importantly, the doctrine of associated words (Noscitur a Sociis) provides that where a particular word or phrase in a statement is ambiguous in itself or is equally susceptible of various meanings, its true meaning may be made clear and specific by considering the company in which it is found or with which it is associated. 17 Considering that the definition of an insurance agent as found in the second paragraph is also applicable to the agent mentioned in the first paragraph, to receive a compensation by the agent is an essential element for a violation of the first paragraph of the aforesaid section. The appellate court has established ultimately that the petitioner-accused did not receive any compensation for the issuance of the insurance policy of Eugenio Isidro. Nevertheless, the accused was convicted by the appellate court for, according to the latter, the receipt of compensation for issuing an insurance policy is not an essential element for a violation of the first paragraph of Section 189 of the Insurance Act. We rule otherwise. Under the Texas Penal Code 1911, Article 689, making it a misdemeanor for any person for direct or indirect compensation to solicit insurance without a certificate of authority to act as an insurance agent, an information, failing to allege that the solicitor was to receive compensation either directly or indirectly, charges no offense. 18 In the case of Bolen vs. Stake, 19 the provision of Section 3750, Snyder's Compiled Laws of Oklahoma 1909 is intended to penalize persons only who acted as insurance solicitors without license, and while acting in such capacity negotiated and concluded insurance contracts for compensation. It must be noted that the information, in the case at bar, does not allege that the negotiation of an insurance contracts by the accused with Eugenio Isidro was one for compensation. This allegation is essential, and having been omitted, a conviction of the accused could not be sustained. It is well-settled in Our jurisprudence that to warrant conviction, every element of the crime must be alleged and proved. 20 After going over the records of this case, We are fully convinced, as the Solicitor General maintains, that accused did not violate Section 189 of the Insurance Act. WHEREFORE, the judgment appealed from is reversed and the accused is acquitted of the crime charged, with costs de oficio. SO ORDERED.

On December 31, 1983, Eligia Romero, an officer of petitioner, opted to retire under Republic Act No. 1616 and received a total of P286,780.00 as gratuity benefits for services rendered from 1955 to 1983. Immediately re-hired on contractual basis, it appears that said employee remained in the service of petitioner until her compulsory retirement on April 27, 2000. In receipt of retirement benefits in the total sum of P1,013,952.00 for the period July 1, 1955 to April 27, 2000, net of the P286,70.00 gratuity benefits she received in 1983, Ms. Romero filed a July 16, 2001 request, seeking from petitioner payment of retirement differentials on the strength of Section 6 of Executive Order No. 756. Said provision states that any officer or employee who retires, resigns, or is separated from the service shall be entitled to one month pay for every year of service computed at highest salary received including allowances, in addition to the other benefits provided by law, regardless of any provision of law or regulations to the contrary.[2]

Confronted with the question of whether the computation of Ms. Romeros retirement benefits should include the allowances she had received while under its employ, petitioner sent queries to respondent and the Office of the Government Corporate Counsel regarding the application of Section 6 of Executive Order No. 756. On August 20, 2002, then Government Corporate Counsel Amado D. Valdez issued Opinion No. 197, Series of 2002, espousing a literal interpretation and application of the aforesaid provision. Invoking the principle that retirement laws should be liberally construed and administered in favor of the persons intended to be benefited thereby, said opinion declared that, pursuant to the subject provision, the basis for the computation of the retirement benefits of petitioners employees should be the highest basic salary received by them, including allowances not integrated into the basic pay.[3]

On the other hand, on July 4, 2003, COA Assistant Commissioner and General Counsel Raquel R. Habitan issued the first assailed ruling, the 6th Indorsement dated July 4, 2003, finding the denial of Ms. Romeros claim for retirement differentials in order. Taking appropriate note of the fact that the Reserve for Retirement Gratuity and Commutation of Leave Credits of petitioners employees did not include allowances outside of the basic salary, said officer ruled that Executive Order No. 756 was a special law issued only for the specific purpose of reorganizing petitioner corporation. Although it was subsequently adverted to in Executive Order No. 877, Section 6 of Executive Order No. 756 was determined to be intended for employees retired, separated or resigned in connection with petitioners reorganization and was not meant to be a permanent retirement scheme for its employees.[4]

Philippine International Trading Corporation v. Commission on Audit, G.R. No. 183517

PEREZ, J.: Elevated by petitioner on appeal before the respondent,[5] the foregoing ruling was affirmed in the second assailed ruling, the Decision No. 2008-023 dated February 15, 2008,[6] which likewise discounted the legal basis for Ms. Romeros claim for retirement differentials. Finding that Section 6 of Executive Order No. 756 was simply an incentive to encourage employees to resign or retire at the height of petitioners reorganization, said decision went on to make the following pronouncements, to wit:

The inclusion of allowances in the computation of the retirement/separation benefits of the employees of petitioner Philippine International Trading Corporation (PITC) is at issue in this petition for certiorari filed pursuant to Rules 64 and 65 of the 1997 Rules of Civil Procedure, seeking the nullification and setting aside of the adverse rulings dated July 4, 2003 and February 15, 2008 issued by respondent Commission on Audit (COA).

Moreover, RA No. 4968 prohibits the creation of any insurance retirement plan by any government agency and government-owned or controlled corporation other than the GSIS, viz.:

Section 10. Subsection (b) of Section twenty-eight of the same Act, as amended is hereby amended to read as follows: The Facts (b) Hereafter no insurance or retirement plan for officers or employees shall be created by the employer. All supplementary retirement or pension plans heretofore in force in any government office, agency, or instrumentality or corporation owned or controlled by the government, are hereby declared inoperative or abolished: Provided, That the rights of those who are already eligible to retire thereunder shall not be affected.

Created pursuant to Presidential Decree No. 252 dated July 21, 1973, petitioner is a government-owned and controlled corporation tasked with promoting and developing Philippine trade in pursuance of national economic development. Subsequent to the repeal of said law with the May 9, 1977 issuance of Presidential Decree No. 1071, otherwise known as the Revised Charter of the Philippine International Trading Corporation, then President Ferdinand E. Marcos issued Executive Order No. 756 on December 28, 1981, authorizing the reorganization of petitioner pursuant to his legislative powers to amend charters of government corporations through executive orders in turn issued pursuant to Presidential Decree No. 1416, as amended by Presidential Decree No. 1772. On February 18, 1983, President Marcos issued Executive Order No. 877, authorizing further the reorganization of petitioner for the purpose of accelerating and expanding the countrys export concerns.[1]

The Supreme Court explained the rationale of the above provisions in Avelina B. Conte et al. vs. Commission on Audit, G.R. No. 116422, November 4, 1996, thusly:

THAT ALL DOUBTS AS TO THE INTENT OF THE LAW SHOULD BE RESOLVED IN FAVOR OF THE RETIREE TO ACHIEVE ITS HUMANITARIAN PURPOSES. Said Sec. 28 (b) as amended by RA 4968 in no uncertain terms bars the creation of any insurance or retirement plan other than the GSIS for government officers and employees, in order to prevent the undue and iniquitous proliferation of such plans. It is beyond cavil that Res. 56 contravenes the said provision of law and is therefore invalid, void and of no effect. To ignore this and rule otherwise would be tantamount to permitting every other government office or agency to put up its own supplementary retirement benefit plan under the guise of such financial assistance. (Emphasis ours)

D.

To hold that Section 6 of E.O. 756 is a retirement law for PTIC employees other than the GSIS law would run counter to the policy of the state to prevent the undue and iniquitous proliferation of retirement plans that would unduly promote the inequality of treatment in the retirement benefits of government employees.[7]

RESPONDENT COMMISSION GRAVELY ABUSED ITS DISCRETION AMOUNTING TO LACK OR EXCESS OF JURISDICTION IN RELYING ON SECTION 10 of RA 4968 AS TO THE ALLEGED PROHIBITION AGAINST ANY INSURANCE OR RETIREMENT PLAN OR RETIREMENT PLAN OTHER THAN THE GSIS, SAID LAW HAVING BEEN PASSED PRIOR TO THE ISSUANCE OF EO 756. OTHERWISE STATED, SECTION 10 OF RA 4968 IS DEEMED REVISED, AMENDED, SUPERSEDED OR REPEALED BY EO 756 PURSUANT TO THE REPEALING CLAUSE OF SAID EO 756.[8]

The Courts Ruling Hence, this petition.

We find the petition bereft of merit. The Issues

Petitioner seeks the nullification and setting aside of the assailed rulings on the following grounds, to wit:

A.

It is a rule in statutory construction that every part of the statute must be interpreted with reference to the context, i.e., that every part of the statute must be considered together with the other parts, and kept subservient to the general intent of the whole enactment.[9] Because the law must not be read in truncated parts, its provisions must be read in relation to the whole law. The statute's clauses and phrases must not, consequently, be taken as detached and isolated expressions, but the whole and every part thereof must be considered in fixing the meaning of any of its parts in order to produce a harmonious whole.[10] Consistent with the fundamentals of statutory construction, all the words in the statute must be taken into consideration in order to ascertain its meaning.
[11]

RESPONDENT COMMISSION GRAVELY ABUSED ITS DISCRETION AMOUNTING TO LACK OR EXCESS OF JURISDICTION IN ISSUING THE FIRST ASSAILED RULING, OPINING THAT SECTION 6 OF EO 756 WAS NOT MEANT TO BE A PERMANENT RETIREMENT SCHEME OF THE PITC.

B.

RESPONDENT COMMISSION GRAVELY ABUSED ITS DISCRETION AMOUNTING TO LACK OR EXCESS OF JURISDICTION IN ISSUING THE SECOND ASSAILED RULING DENYING PITCS REQUEST FOR RECONSIDERATION OF THE ABOVE OPINION OF COA GENERAL COUNSEL RAQUEL HABITAN, LIKEWISE HOLDING THAT SECTION 6 of EO 756 WAS NOT MEANT TO BE A PERMANENT SCHEME OF THE PITC.

Applying the foregoing principles to the case at bench, we find it well worth emphasizing at the outset that Executive Order No. 756[12] was meant to reorganize petitioners corporate set-up. While incorporating amendments of petitioners Revised Charter under Presidential Decree No. 1071 with provisions relating to the subscription of its capital,[13] the establishment of subsidiaries, including joint ventures,[14] the composition[15] and grant of additional powers to its Board of Directors,[16] the appointment of its President,[17] the grant of incentive scheme to its officers and employees[18] as well as its authority to deputize commercial attaches[19] and to grant franchises to operate Philippine trade houses abroad,[20] Section 4 (1) of Executive Order No. 756 specifically authorized petitioners Board of Directors to reorganize the structure of the Corporation, in accordance with its expanded role in the development of Philippine trade, with such officers and employees as may be needed and determine their competitive salaries and reasonable allowances and other benefits to effectively carry out its powers and functions. For this purpose, Section 6 of the same law provides as follows:

C.

RESPONDENT COMMISSION GRAVELY ABUSED ITS DISCRETION AMOUNTING TO LACK OR EXCESS OF JURISDICTION IN ISSUING THE ASSAILED RULINGS WHICH ARE CONTRARY TO SETTLED JURISPRUDENCE THAT RETIREMENT LAWS ARE LIBERALLY CONSTRUED AND ADMINISTERED IN FAVOR OF THE PERSONS INTENDED TO BE BENEFITTED AND

SECTION 6. Exemption from OCPC. In recognition of the special nature of its operations, the Corporation shall continue to be exempt from the application of the rules and regulations of the Office of the Compensation and Position Classification or any other similar agencies that may be established hereafter as provided under Presidential Decree No. 1071. Likewise, any officer or employee who retires, resigns, or is separated from the service shall be entitled to one month pay for every year of service computed at highest salary received including all allowances, in addition to the other benefits provided by law, regardless of any provision of law or regulations to the contrary; Provided, That the employee shall have served in the Corporation continuously for at least two years: Provided, further, That in case of separated employees, the separation or dismissal is not due to conviction for any offense the penalty for which includes forfeiture of benefits: and Provided, finally, That in the commutation of leave credits earned, the employees who resigned, retired or is separated shall be entitled to the full payment therefor computed with all the allowances then being enjoyed at the time of resignation, retirement of separation regardless of any restriction or limitation provided for in other laws, rules or regulations. (Italics supplied)

AUTHORIZING THE REORGANIZATION OF THE PHILIPPINE INTERNATIONAL TRADING CORPORATION CREATED UNDER PRESIDENTIAL DECREE NO. 1071, AS AMENDED As an adjunct to the reorganization mandated under Executive Order No. 756, we find that the foregoing provision cannot be interpreted independent of the purpose or intent of the law. Rather than the permanent retirement law for its employees that petitioner now characterizes it to be, we find that the provision of gratuities equivalent to one month pay for every year of service computed at highest salary received including all allowances was clearly meant as an incentive for employees who retire, resign or are separated from service during or as a consequence of the reorganization petitioners Board of Directors was tasked to implement. As a temporary measure, it cannot be interpreted as an exception to the general prohibition against separate or supplementary insurance and/or retirement or pension plans under Section 28, Subsection (b) of Commonwealth Act No. 186, [21] amended. Pursuant to Section 10 of Republic Act No. 4968[22] which was approved on June 17, 1967, said latter provision was amended to read as follows:

WHEREAS, it is the declared policy of the New Republic to pursue national development with renewed dedication and determination;

WHEREAS, there is a need to position and gear up the country's export marketing resources in anticipation of a recovery in the world economy;

Section 10. Subsection (b) of Section twenty-eight of the same Act, as amended is hereby further amended to read as follows: WHEREAS, the Philippine International Trading Corporation, hereinafter referred to as the Corporation, is in the vanguard of marketing Philippine exports worldwide; (b) Hereafter no insurance or retirement plan for officers or employees shall be created by any employer. All supplementary retirement or pension plans heretofore in force in any government office, agency, or instrumentality or corporation owned or controlled by the government, are hereby declared inoperative or abolished: Provided, That the rights of those who are already eligible to retire thereunder shall not be affected.

WHEREAS, in order to accelerate and expand its exports, there is a need to upgrade the management and marketing expertise of the Corporation consistent with the requirements of international marketing;

WHEREAS, in the light of the foregoing, the reorganization of the Corporation becomes imperative; In reconciling Section 6 of Executive Order No. 756 with Section 28, Subsection (b) of Commonwealth Act No. 186,[23] as amended, uppermost in the mind of the Court is the fact that the best method of interpretation is that which makes laws consistent with other laws which are to be harmonized rather than having one considered repealed in favor of the other.[24] Time and again, it has been held that every statute must be so interpreted and brought in accord with other laws as to form a uniform system of jurisprudence interpretere et concordare legibus est optimus interpretendi.[25] Thus, if diverse statutes relate to the same thing, they ought to be taken into consideration in construing any one of them, as it is an established rule of law that all acts in pari materia are to be taken together, as if they were one law.[26] We find that a temporary and limited application of the more beneficent gratuities provided under Section 6 of Executive Order No. 756 is in accord with the pre-existing and general prohibition against separate or supplementary insurance retirement and/or pension plans under Section 28, Subsection (b) of Commonwealth Act No. 186.

WHEREAS, under Presidential Decree No. 1416, as amended, the President is empowered to undertake such organizational changes as may be necessary in the light of changing circumstances and development;

NOW, THEREFORE, I, FERDINAND E. MARCOS, President of the Philippines, by virtue of the powers vested in me by the Constitution, and the authority vested on me by Presidential Decree No. 1416, as amended, do hereby order and direct:

In the absence of a manifest and specific intent from which the same may be gleaned, moreover, Section 6 of Executive Order No. 756 cannot be construed as an additional alternative to existing general retirement laws and/or an exception to the prohibition against separate or supplementary insurance retirement or pension plans as aforesaid. Aside from the fact that a meaning that does not appear nor is intended or reflected in the very language of the statute cannot be placed therein by construction,[27] petitioner would likewise do well to remember that repeal of laws should be made clear and express. Repeals by implication are not favored as laws are presumed to be passed with deliberation and full knowledge of all laws existing on the subject,[28] the congruent application of which the courts must generally presume.[29] For this reason, it has been held that the failure to add a specific repealing clause particularly mentioning the statute to be repealed indicates that the intent was not to repeal any existing law on the matter, unless an irreconcilable inconsistency and repugnancy exists in the terms of the new and old laws.[30]

1. Reorganization. The Minister of Trade and Industry is hereby designated Chief Executive Officer of the Corporation with full powers to restructure and reorganize the Corporation and to determine or fix its staffing pattern, compensation structure and related organizational requirements. The Chairman shall complete such restructuring and reorganization within six (6) months from the date of this Executive Order. All personnel of the Corporation who are not reappointed by the Chairman under the new reorganized structure of the Corporation shall be deemed laid off; provided, that personnel so laid off shall be entitled to the benefits accruing to separated employees under Executive Order No. 756 amending the Revised Chapter of the Corporation.

2. The dearth of merit in petitioners position is rendered even more evident when it is borne in mind that Executive Order No. 756 was subsequently repealed by Executive Order No. 877 which was issued on February 18, 1983 to hasten the reorganization of petitioner, in light of changing circumstances and developments in the world market. For purposes of clarity, the full text of Executive Order No 877 is reproduced hereunder, viz.:

Functions of Chairman. The Chairman of the Corporation shall have the following functions and powers:

a. Exercise all the powers incident to the functions of a Chief Executive Officer, including supervision and control over all personnel of the Corporation; b. Review, develop, supervise and direct the export marketing thrusts and strategy of the Corporation;

EXECUTIVE ORDER NO. 877

c. Upon recommendation of the President of the Corporation, appoint personnel of the Corporation in executive and senior management positions; d. Call meetings of the Board of Directors and of the Executive Committee of the Corporation.

3. Personnel Recruitment and Other Services. In recognition of the special nature of its operation, the Corporation shall, in recruiting personnel and in availing of outside technical services, continue to be exempt from OCPC rules and regulations pursuant to Section 6 of Executive Order No. 756 and Section 28 of Presidential Decree No. 1071. In addition, the provision of Section 7 of Executive Order No. 756 is hereby reaffirmed.

In the context of petitions for certiorari like the one at bench, grave abuse of discretion is understood to be such capricious and whimsical exercise of jurisdiction as is equivalent to lack of jurisdiction.[38] It is tantamount to an evasion of a positive duty or to virtual refusal to perform a duty enjoined by law, or to act at all in contemplation of law, as when the power is exercised in an arbitrary or despotic manner by reason of passion or personal hostility.[39] As the Constitutional office tasked with the duty to examine, audit and settle all accounts pertaining to the revenue, and receipts of and expenditures or uses of funds and property, owned or held in trust by or pertaining to the government or any of its subdivisions,[40] respondent committed no grave abuse of discretion in disapproving petitioners utilization of Section 6 of Executive Order No. 756 in the computation of its employees retirement benefits.

4. Repealing Clause. All provisions of Presidential Decree No. 1071 and Executive Order No. 756, as well as of other laws, decrees, executive orders or issuances, or parts thereof, that are in conflict with this Executive Order, are hereby repealed or modified accordingly.

WHEREFORE, the petition is DENIED for lack of merit.

5.

Effectivity. This Executive Order shall take effect immediately.

SO ORDERED.

DONE in the City of Manila, this 18th day of February, in the year of Our Lord, Nineteen Hundred and Eighty-Three. (Italics supplied)

Specifically mandated to be accomplished within the limited timeframe of six months from the issuance of the law, the reorganization under Executive Order No. 877 clearly supplanted that which was provided under Executive Order No. 756. Nowhere is this more evident than Section 4 of said latter law which provides that, All provisions of Presidential Decree No. 1071 and Executive Order No. 756, as well as of other laws, decrees, executive orders or issuances, or parts thereof that are in conflict with this Executive Order, are hereby repealed or modified accordingly. In utilizing the computation of the benefits provided under Section 6 of Executive Order No. 756 for employees considered laid off for not being reappointed under petitioners new reorganized structure, Executive Order No. 877 was correctly interpreted by respondent to evince an intent not to extend said gratuity beyond the six-month period within which the reorganization is to be accomplished.

In the case of Conte v. Commission on Audit,[31] this Court ruled that the prohibition against separate or supplementary insurance and/or retirement plan under Section 28, Subsection (b) of Commonwealth Act No. 186 was meant to prevent the undue and iniquitous proliferation of such plans in different government offices. Both before the issuance and after the effectivity of Executive Order Nos. 756 and 877, petitioners employees were governed by and availed of the same retirement laws applicable to other government employees in view of the absence of a specific provision thereon under Presidential Decree No. 252,[32] its organic law, and Presidential Decree No. 1071, otherwise known as theRevised Charter of the PITC. As appropriately pointed out by respondent, petitioners observance of said general retirement laws may be gleaned from the fact that the Reserve for Retirement Gratuity and Commutation of Leave Credits for its employees were based only on their basic salary and did not include allowances they received. No less than Eligia Romero, petitioners employee whose claim for retirement differentials triggered the instant inquiry, was granted benefits under Republic Act No. 1616 upon her retirement on December 31, 1983.

It doesnt help petitioners cause any that Section 6 of Executive Order No. 756, in relation to Section 3 of Executive Order No. 877, was further amended by Republic Act No. 6758,[33] otherwise known as the Compensation and Classification Act of 1989. Mandated under Article IX B, Section 5[34] of the Constitution,[35] Section 4[36] of Republic Act No. 6758 specifically extends its coverage to government owned and controlled corporations like petitioner. With this Courts ruling in Philippine International Trading Corporation v. Commission on Audit[37] to the effect that petitioner is included in the coverage of Republic Act No. 6758, it is evidently no longer exempted from OCPC rules and regulations, in keeping with said laws intent to do away with multiple allowances and other incentive packages as well as the resultant differences in compensation among government personnel.

HEADNOTES AND EPIGRAPHS

November 16, 1918 G.R. No. L-12767 In the matter of the estate of EMIL H. JOHNSON. EBBA INGEBORG JOHNSON, applicant-appellant, Hartigan & Welch for applicant and appellant. Hartford Beaumont for Victor Johnson and others as appellees. Chas. E. Tenney for Alejandra Ibaez de Johnson, personally and as guardian, and for Simeona Ibaez, appellees. Street, J.: On February 4, 1916, Emil H. Johnson, a native of Sweden and a naturalized citizen of the United States, died in the city of Manila, leaving a will, dated September 9, 1915, by which he disposed of an estate, the value of which, as estimated by him, was P231,800. This document is an holographic instrument, being written in the testator's own handwriting, and is signed by himself and two witnesses only, instead of three witnesses required by section 618 of the Code of Civil Procedure. This will, therefore, was not executed in conformity with the provisions of law generally applicable to wills executed by inhabitants of these Islands, and hence could not have been proved under section 618. On February 9, 1916, however, a petition was presented in the Court of First Instance of the city of Manila for the probate of this will, on the ground that Johnson was at the time of his death a citizen of the State of Illinois, United States of America; that the will was duly executed in accordance with the laws of that State; and hence could properly be probated here pursuant to section 636 of the Code of Civil Procedure. This section reads as follows: Will made here by alien. A will made within the Philippine Islands by a citizen or subject of another state or country, which is executed in accordance with the law of the state or country of which he is a citizen or subject, and which might be proved and allowed by the law of his own state or country, may be proved, allowed, and recorded in the Philippine Islands, and shall have the same effect as if executed according to the laws of these Islands. The hearing on said application was set for March 6, 1916, and three weeks publication of notice was ordered in the "Manila Daily Bulletin." Due publication was made pursuant to this order of the court. On March 6, 1916, witnesses were examined relative to the execution of the will; and upon March 16th thereafter the document was declared to be legal and was admitted to probate. At the same time an order was made nominating Victor Johnson and John T. Pickett as administrators of the estate, with the sill annexed. Shortly thereafter Pickett signified his desire not to serve, and Victor Johnson was appointed sole administrator. By the will in question the testator gives to his brother Victor one hundred shares of the corporate stock in the Johnson-Pickett Rope Company; to his father and mother in Sweden, the sum of P20,000; to his daughter Ebba Ingeborg, the sum of P5,000; to his wife, Alejandra Ibaez, the sum of P75 per month, if she remains single; to Simeona Ibaez, spinster, P65 per month, if she remains single. The rest of the property is left to the testator's five children Mercedes, Encarnacion, Victor, Eleonor and Alberto. The biographical facts relative to the deceased necessary to an understanding of the case are these: Emil H. Johnson was born in Sweden, May 25, 1877, from which country he emigrated to the United States and lived in Chicago, Illinois, from 1893 to 1898. On May 9, 1898, at Chicago, he was married to Rosalie Ackeson, and immediately thereafter embarked for the Philippine Islands as a soldier in the Army of the United States. As a result of relations between Johnson and Rosalie Ackeson a daughter, named Ebba Ingeborg, was born a few months after their marriage. This child was christened in Chicago by a pastor of the Swedish Lutheran Church upon October 16, 1898. After Johnson was discharged as a soldier from the service of the United States he continued to live in the Philippine Islands, and on November 20, 1902, the wife, Rosalie Johnson, was granted a decree of divorce from him in the Circuit Court of Cook County, Illinois, on the ground of desertion. A little later Johnson appeared in the United States on a visit and on January 10, 1903, procured a certificate of naturalization at Chicago. From Chicago he appears to have gone to Sweden, where a photograph, exhibited in

evidence in this case, was taken in which he appeared in a group with his father, mother, and the little daughter, Ebba Ingeborg, who was then living with her grandparents in Sweden. When this visit was concluded, the deceased returned to Manila, where he prospered in business and continued to live until his death. In this city he appears to have entered into marital relations with Alejandra Ibaez, by whom he had three children, to wit, Mercedes, baptized May 31, 1903; Encarnacion, baptized April 29, 1906; and Victor, baptized December 9, 1907. The other two children mentioned in the will were borne to the deceased by Simeona Ibaez. On June 12, 1916, or about three months after the will had been probated, the attorneys for Ebba Ingeborg Johnson entered an appearance in her behalf and noted an exception to the other admitting the will to probate. On October 31, 1916, the same attorneys moved the court to vacate the order of March 16 and also various other orders in the case. On February 20, 1917, this motion was denied, and from this action of the trial court the present appeal has been perfected vDjp. As will be discerned, the purpose of the proceeding on behalf of the petitioner is to annul the decree of probate and put the estate into intestate administration, thus preparing the way for the establishment of the claim of the petitioner as the sole legitimate heir of her father. The grounds upon which the petitioner seeks to avoid the probate are four in number and may be stated, in the same sequence in which they are set forth in the petition, as follows: (1) Emil H. Johnson was a resident of the city of Manila and not a resident of the State of Illinois at the time the will in question was executed; (2) The will is invalid and inadequate to pass real and personal property in the State of Illinois; (3) The order admitting the will to probate was made without notice to the petitioner; and (4) The order in question was beyond the jurisdiction of the court. It cannot of course be maintained that a court of first instance lacks essential jurisdiction over the probate of wills. The fourth proposition above stated must, accordingly, be interpreted in relation with the third and must be considered as a corollary deduced from the latter. Moreover, both the third and fourth grounds stated take precedence, by reason of their more fundamental implications, over the first two; and a logical exposition of the contentions of the petitioner is expressed in the two following propositions: (I) The order admitting the will to probate was beyond the jurisdiction of the court and void because made without notice to the petitioner; (II) The judgment from which the petitioner seeks relief should be set aside because the testator was not a resident of the State of Illinois and the will was not in conformity with the laws of that State. In the discussion which is to follow we shall consider the problems arising in this cae in the order last above indicated. Upon the question, then, of the jurisdiction of the court, it is apparent from an inspection of the record of the proceedings in the court below that all the steps prescribed by law as prerequisites to the probate of a will were complied with in every respect and that the probate was effected in external conformity with all legal requirements. This much is unquestioned. It is, however, pointed out in the argument submitted in behalf of the petitioner, that, at the time the court made the order of publication, it was apprised of the fact that the petitioner lived in the United States and that as daughter and heir she was necessarily interested in the probate of the will. It is, therefore, insisted that the court should have appointed a date for the probate of the will sufficiently far in the future to permit the petitioner to be present either in person or by representation; and it is said that the failure of the court thus to postpone the probate of the will constitutes an infringement of that provision of the Philippine Bill which declared that property shall not be taken without due process of law. On this point we are of the opinion that the proceedings for the probate of the will were regular and that the publication was sufficient to give the court jurisdiction to entertain the proceeding and to allow the will to be probated.

As was said in the case of In re Davis (136 Cal., 590, 596), "the proceeding as to the probate of a will is essentially one in rem, and in the very nature of things the state is allowed a wide latitude in determining the character of the constructive notice to be given to the world in a proceeding where it has absolute possession of the res. It would be an exceptional case where a court would declare a statute void, as depriving a party of his property without due process of law, the proceeding being strictly in rem, and the res within the state, upon the ground that the constructive notice prescribed by the statute was unreasonably short." In that case the petitioner had been domiciled in the Hawaiian Islands at the time of the testator's death; and it was impossible, in view of the distance and means of communication then existing, for the petitioner to appear and oppose the probate on the day set for the hearing in California. It was nevertheless held that publication in the manner prescribed by statute constituted due process of law. (See Estate of Davis, 151 Cal., 318; Tracy vs. Muir, 151 Cal., 363.) In the Davis case (136 Cal., 590) the court commented upon the fact that, under the laws of California, the petitioner had a full year within which she might have instituted a proceeding to contest the will; and this was stated as one of the reasons for holding that publication in the manner provided by statute was sufficient. The same circumstance was commented upon in O'Callaghan vs. O'Brien (199 U. S., 89), decided in the Supreme Court of the United States. This case arose under the laws of the State of Washington, and it was alleged that a will had been there probated without the notice of application for probate having been given as required by law. It was insisted that this was an infringement of the Fourteenth Amendment of the Constitution of the United States. This contention was, however, rejected and it was held that the statutory right to contest the will within a year was a complete refutation of the argument founded on the idea of a violation of the due process provision. The laws of these Islands, in contrast with the laws in force in perhaps all of the States of the American Union, contain no special provision, other than that allowing an appeal in the probate proceedings, under which relief of any sort can be obtained from an order of a court of first instance improperly allowing or disallowing a will. We do, however, have a provision of a general nature authorizing a court under certain circumstances to set aside any judgment, order, or other proceeding whatever. This provision is found in section 113 of the Code of Civil Procedure, which reads as follows: Upon such terms as may be just the court may relieve a party or his legal representative from a judgment, order or other proceeding taken against him through his mistake, inadvertence, surprise or excusable neglect; Provided, That application therefor be made within a reasonable time, but in no case exceeding six months after such judgment, order, or proceeding was taken. The use of the word "judgment, order or other proceeding" in this section indicates an intention on the part of the Legislature to give a wide latitude to the remedy here provided, and in our opinion its operation is not to be restricted to judgments or orders entered in ordinary contentious litigation where a plaintiff impleads a defendant and brings him into court by personal service of process. In other words the utility of the provision is not limited to actions proper but extends to all sorts of judicial proceedings. In the second section of the Code of Civil Procedure it is declared that the provisions of this Code shall be liberally construed to promote its object and to assist the parties in obtaining speedy justice. We think that the intention thus exhibited should be applied in the interpretation of section 113; and we hold that the word "party," used in this section, means any person having an interest in the subject matter of the proceeding who is in a position to be concluded by the judgment, order, to other proceeding taken. The petitioner, therefore, in this case could have applied, under the section cited, at any time within six months for March 16, 1916, and upon showing that she had been precluded from appearing in the probate proceedings by conditions over which she had no control and that the order admitting the will to probate had been erroneously entered upon insufficient proof or upon a supposed state of facts contrary to the truth, the court would have been authorized to set the probate aside and grant a rehearing. It is no doubt true that six months was, under the circumstances, a very short period of time within which to expect the petitioner to appear and be prepared to contest the probate with the proof which she might have desired to collect from remote countries. Nevertheless, although the time allowed for the making of such application was inconveniently short, the remedy existed; and the possibility of its use is proved in this case by the circumstance that on June 12, 1916, she in fact here appeared in court by her attorneys and excepted to the order admitting the will to probate. It results that, in conformity with the doctrine announced in the Davis case, above cited, the proceedings in the court below were conducted in such manner as to constitute due process of law. The law supplied a remedy by which the petitioner might have gotten a hearing and have obtained relief from the order by which she is supposed to have been injured; and though the period within which the application should have been made was short, the remedy was both possible and practicable.

From what has been said it follows that the order of March 16, 1916, admitting the will of Emil H. Johnson to probate cannot be declared null and void merely because the petitioner was unavoidably prevented from appearing at the original hearing upon the matter of the probate of the will in question. Whether the result would have been the same if our system of procedure had contained no such provision as that expressed in section 113 is a matter which we need not here consider. Intimately connected with the question of the jurisdiction of the court, is another matter which may be properly discussed at this juncture. This relates to the interpretation to be placed upon section 636 of the Code of Civil Procedure. The position is taken by the appellant that this section is applicable only to wills of liens; and in this connection attention is directed to the fact that the epigraph of this section speaks only of the will made here by an alien and to the further fact that the word "state" in the body of the section is not capitalized. From this it is argued that section 636 is not applicable to the will of a citizen of the United States residing in these Islands. We consider these suggestions of little weight and are of the opinion that, by the most reasonable interpretation of the language used in the statute, the words "another state or country" include the United States and the States of the American Union, and that the operation of the statute is not limited to wills of aliens. It is a rule of hermeneutics that punctuation and capitalization are aids of low degree in interpreting the language of a statute and can never control against the intelligible meaning of the written words. Furthermore, the epigraph, or heading,, of a section, being nothing more than a convenient index to the contents of the provision, cannot have the effect of limiting the operative words contained in the body of the text. It results that if Emil H. Johnson was at the time of his death a citizen of the United States and of the State of Illinois, his will was provable under this section in the courts of the Philippine Islands, provided the instrument was so executed as to be admissible to probate under the laws of the State of Illinois. We are thus brought to consider the second principal proposition stated at the outset of this discussion, which raises the question whether the order f probate can be set aside in this proceeding on the other ground stated in the petition, namely, that the testator was not a resident of the State of Illinois and that the will was not made in conformity with the laws of that State. The order of the Court of First Instance admitting the will to probate recites, among other things: That upon the date when the will in question was executed Emil H. Johnson was a citizen of the United States, naturalized in the State of Illinois, County of Cook, and that the will in question was executed in conformity with the dispositions of the law f the State of Illinois. We consider this equivalent to a finding that upon the date of the execution of the will the testator was a citizen of the State of Illinois and that the will was executed in conformity with the laws of that State. Upon the last point the finding is express; and in our opinion the statement that the testator was a citizen of the United States, naturalized in the State of Illinois, should be taken to imply that he was a citizen of the State of Illinois, as well as of the United States. The naturalization laws of the United States require, as a condition precedent to the granting of the certificate of naturalization, that the applicant should have resided at least five years in the United States and for one year within the State or territory where the court granting the naturalization papers is held; and in the absence of clear proof to the contrary it should be presumed that a person naturalized in a court of a certain State thereby becomes a citizen of that State as well as of the United States. In this connection it should be remembered that the Fourteenth Amendment to the Constitution of the United States declares, in its opening words, that all persons naturalized in the United States, and subject to the jurisdiction thereof, are citizens of the United States and of the State wherein they reside. It is noteworthy that the petition by which it is sought to annul the probate of this will does not assert that the testator was not a citizen of Illinois at the date when the will was executed. The most that is said on this point is he was "never a resident of the State of Illinois after the year 1898, but became and was a resident of the city of Manila," etc. But residence in the Philippine Islands is compatible with citizenship in Illinois; and it must be considered that the allegations of the petition on this point are, considered in their bearing as an attempt to refute citizenship in Illinois, wholly insufficient. As the Court of First Instance found that the testator was a citizen of the State of Illinois and that the will was executed in conformity with the laws of that State, the will was necessarily and properly admitted to probate. And how is it possible to evade the effect of these findings?

In Section 625 of the Code of Civil Procedure it is declared that "the allowance by the court of a will of real or personal property shall be conclusive as to its due execution." The due execution of a will involves conditions relating to a number of matters, such as the age and mental capacity of the testator, the signing of the document by the testator, or by someone in his behalf, and the acknowledgment of the instrument by him in the presence of the required number of witnesses who affix their signatures to the will to attest the act. The proof of all these requisites is involved in the probate; and as to each and all of them the probate is conclusive. (Castaeda vs. Alemany, 3 Phil. Rep., 426; Pimentel vs. Palanca, 5 Phil. Rep., 436; Chiong Joc-Soy vs. Vao, 8 Phil. Rep., 119; Sanchez vs. Pascual, 11 Phil. Rep., 395; Montaano vs. Suesa, 14 Phil. Rep., 676.) Our reported cases do not contain the slightest intimation that a will which has been probated according to law, and without fraud, can be annulled, in any other proceeding whatever, on account of any supposed irregularity or defect in the execution of the will or on account of any error in the action of the court upon the proof adduced before it. This court has never been called upon to decide whether, in case the probate of a will should be procured by fraud, relief could be granted in some other proceeding; and no such question is now presented. But it is readily seen that if fraud were alleged, this would introduce an entirely different factor in the cae. In Austrua vs. Ventenilla (21 Phil. Rep., 180, 184), it was suggested but not decided that relief might be granted in case the probate of a will were procured by fraud. The circumstance that the judgment of the trial court recites that the will was executed in conformity with the law of Illinois and also, in effect, that the testator was a citizen of that State places the judgment upon an unassailable basis so far as any supposed error apparent upon the fact of the judgment is concerned. It is, however, probable that even if the judgment had not contained these recitals, there would have been a presumption from the admission of the will to probate as the will of a citizen of Illinois that the facts were as recited in the order of probate. As was said by this court in the case of Banco Espaol-Filipino vs. Palanca (37 Phil. Rep., 921), "There is no principle of law better settled than that after jurisdiction has once been acquired, every act of a court of general jurisdiction shall be presumed to have been rightly done. This rule is applied to every judgment or decree rendered in the various stages of the proceedings from their initiation to their completion (Voorhees vs. United States Bank, 10 Pet., 314; 35 U. S., 449); and if the record is silent with respect to any fact which must have established before the court could have rightly acted, it will be presumed that such fact was properly brought to its knowledge." The Court of First Instance is a court of original and general jurisdiction; and there is no difference in its faculties in this respect whether exercised in matters of probate or exerted in ordinary contentious litigation. The trial court therefore necessarily had the power to determine the facts upon which the propriety of admitting the will to probate depended; and the recital of those facts in the judgment was probably not essential to its validity. No express ruling is, however, necessary on this point. What has been said effectually disposes of the petition considered in its aspect as an attack upon the order of probate for error apparent on the face of the record. But the petitioner seeks to have the judgment reviewed, it being asserted that the findings of the trial court especially on the question of the citizenship of the testator are not supported by the evidence. It needs but a moment's reflection, however, to show that in such a proceeding as this it is not possible to reverse the original order on the ground that the findings of the trial court are unsupported by the proof adduced before that court. The only proceeding in which a review of the evidence can be secured is by appeal, and the case is not before us upon appeal from the original order admitting the will to probate. The present proceedings by petition to set aside the order of probate, and the appeal herein is from the order denying this relief. It is obvious that on appeal from an order refusing to vacate a judgment it is not possible to review the evidence upon which the original judgment was based. To permit this would operate unduly to protract the right of appeal opLMPcR6. However, for the purpose of arriving at a just conception of the case from the point of view of the petitioner, we propose to examine the evidence submitted upon the original hearing, in connection with the allegations of the petition, in order to see, first, whether the evidence submitted to the trial court was sufficient to justify its findings, and, secondly, whether the petition contains any matter which would justify the court in setting the judgment, aside. In this connection we shall for a moment ignore the circumstance that the petition was filed after the expiration of the six months allowed by section 113 of the Code of Civil Procedure. The principal controversy is over the citizenship of the testator. The evidence adduced upon this point in the trial court consists of the certificate of naturalization granted upon January 10, 1903, in the Circuit Court of Cook County, Illinois, in connection with certain biographical facts contained in the oral evidence. The certificate of naturalization supplies incontrovertible proof that upon the date

stated the testator became a citizen of the United States, and inferentially also a citizen of said State. In the testimony submitted to the trial court it appears that, when Johnson first came to the United States as a boy, he took up his abode in the State of Illinois and there remained until he came as a soldier in the United States Army to the Philippine Islands. Although he remained in these Islands for sometime after receiving his discharge, no evidence was adduced showing that at the time he returned to the United States, in the autumn of 1902, he had then abandoned Illinois as the State of his permanent domicile, and on the contrary the certificate of naturalization itself recites that at that time he claimed to be a resident of Illinois oJ0RRNaQ. Now, if upon January 10, 1903, the testator became a citizen of the United States and of the State of Illinois, how has he lost the character of citizen with respect to either of these jurisdictions? There is no law in force by virtue of which any person of foreign nativity can become a naturalized citizen of the Philippine Islands; and it was, therefore, impossible for the testator, even if he had so desired, to expatriate himself from the United States and change his political status from a citizen of the United States to a citizen of these Islands. This being true, it is to be presumed that he retained his citizenship in the State of Illinois along with his status as a citizen of the United States. It would be novel doctrine to Americans living in the Philippine Islands to be told that by living here they lose their citizenship in the State of their naturalization or nativity. We are not unmindful of the fact that when a citizen of one State leaves it and takes up his abode in another State with no intention of returning, he immediately acquires citizenship in the State of his new domicile. This is in accordance with that provision of the Fourteenth Amendment to the Constitution of the United States which says that every citizen of the United States is a citizen of the State where in he resides. The effect of this provision necessarily is that a person transferring his domicile from one State to another loses his citizenship in the State of his original above upon acquiring citizenship in the State of his new abode. The acquisition of the new State citizenship extinguishes the old. That situation, in our opinion, has no analogy to that which arises when a citizen of an American State comes to reside in the Philippine Islands. Here he cannot acquire a new citizenship; nor by the mere change of domicile does he lose that which he brought with him. The proof adduced before the trial court must therefore be taken as showing that, at the time the will was executed, the testator was, as stated in the order of probate, a citizen of the State of Illinois. This, in connection with the circumstance that the petition does not even so much as deny such citizenship but only asserts that the testator was a resident of the Philippine Islands, demonstrates the impossibility of setting the probate aside for lack of the necessary citizenship on the part of the testator. As already observed, the allegation of the petition on this point is wholly insufficient to justify any relief whatever gFLcKCFJ. Upon the other point as to whether the will was executed in conformity with the statutes of the State of Illinois we note that it does not affirmatively appear from the transaction of the testimony adduced in the trial court that any witness was examined with reference to the law of Illinois on the subject of the execution of will. The trial judge no doubt was satisfied that the will was properly executed by examining section 1874 of the Revised Statutes of Illinois, as exhibited in volume 3 of Starr & Curtis's Annotated Illinois Statutes, 2nd ed., p. 426; and he may have assumed that he could take judicial notice of the laws of Illinois under section 275 of the Code of Civil Procedure. If so, he was in our opinion mistaken. that section authorizes the courts here to take judicial notice, among other things, of the acts of the legislative department of the United States. These words clearly have reference to Acts of the Congress of the United States; and we would hesitate to hold that our courts can, under this provision, take judicial notice of the multifarious laws of the various American States. Nor do we think that any such authority can be derived from the broader language, used in the same action, where it is said that our courts may take judicial notice of matters of public knowledge "similar" to those therein enumerated. The proper rule we think is to require proof of the statutes of the States of the American Union whenever their provisions are determinative of the issues in any action litigated in the Philippine courts. Nevertheless, even supposing that the trial court may have erred in taking judicial notice of the law of Illinois on the point in question, such error is not now available to the petitioner, first, because the petition does not state any fact from which it would appear that the law of Illinois is different from what the court found, and, secondly, because the assignment of error and argument for the appellant in this court raises no question based on such supposed error. Though the trial court may have acted upon pure conjecture as to the law prevailing in the State of Illinois, its judgment could not be set aside, even upon application made within six months under section 113 of the Code of Civil procedure, unless it should be made to appear affirmatively that the conjecture was wrong. The petitioner, it is true, states in general terms that the will in question is invalid and inadequate to pass real and personal property in the State of Illinois, but this is merely a conclusion of law. The affidavits by which the petition is accompanied contain no reference to the subject, and we are cited to no authority in the appellant's brief which might tent to raise a doubt as to the correctness of the conclusion of the trial court. It is very clear, therefore, that this point cannot be urged as of serious moment. But it is insisted in the brief for the appellant that the will in question was not properly admissible to probate because it contains

provisions which cannot be given effect consistently with the laws of the Philippine Islands; and it is suggested that as the petitioner is a legitimate heir of the testator she cannot be deprived of the legitime to which she is entitled under the law governing testamentary successions in these Islands. Upon this point it is sufficient to say that the probate of the will does not affect the intrinsic validity of its provisions, the decree of probate being conclusive only as regards the due execution of the will. (Code of Civil Procedure, secs. 625, 614; Sahagun vs. De Gorostiza, 7 Phil. Rep., 347, 349; Chiong Joc-Soy vs. Vao, 8 Phil. Rep., 119, 121; Limjuco vs. Ganara, 11 Phil. Rep., 393, 395.) If, therefore, upon the distribution of this estate, it should appear that any legacy given by the will or other disposition made therein is contrary to the law applicable in such case, the will must necessarily yield upon that point and the law must prevail. Nevertheless, it should not be forgotten that the intrinsic validity of the provisions of this will must be determined by the law of Illinois and not, as the appellant apparently assumes, by the general provisions here applicable in such matters; for in the second paragraph of article 10 of the Civil Code it is declared that "legal and testamentary successions, with regard to the order of succession, as well as to the amount of the successional rights and to the intrinsic validity of their provisions, shall be regulated by the laws of the nation of the person whose succession is in question, whatever may be the nature of the property and the country where it may be situate." From what has been said, it is, we think, manifest that the petition submitted to the court below on October 31, 1916, was entirely insufficient to warrant the setting aside of the other probating the will in question, whether said petition be considered as an attack on the validity of the decree for error apparent, or whether it be considered as an application for a rehearing based upon the new evidence submitted in the affidavits which accompany the petition. And in this latter aspect the petition is subject to the further fatal defect that it was not presented within the time allowed by law. It follows that the trial court committed no error in denying the relief sought. The order appealed from is accordingly affirmed with costs. So ordered. Torres, Johnson, Malcolm, Avancea and Fisher, JJ., concur. .

INTENT OR SPIRIT OF THE LAW

Dumaguete Cathedral Credit Coop vs. CIR, G.R. No. 182722, January 2010

On June 26, 2002, petitioner received two Pre-Assessment Notices for deficiency withholding taxes for taxable years 1999 and 2000 which were protested by petitioner onJuly 23, 2002.[9] Thereafter, on October 16, 2002, petitioner received two other PreAssessment Notices for deficiency withholding taxes also for taxable years 1999 and 2000.[10] The deficiency withholding taxes cover the payments of the honorarium of the Board of Directors, security and janitorial services, legal and professional fees, and interest on savings and time deposits of its members.

DECISION

On October 22, 2002, petitioner informed BIR Regional Director Sonia L. Flores that it would only pay the deficiency withholding taxes corresponding to the honorarium of the Board of Directors, security and janitorial services, legal and professional fees for the year 1999 in the amount of P87,977.86, excluding penalties and interest.[11]

DEL CASTILLO, J.:

In another letter dated November 8, 2002, petitioner also informed the BIR Assistant Regional Director, Rogelio B. Zambarrano, that it would pay the withholding taxes due on the honorarium and per diems of the Board of Directors, security and janitorial services, commissions and legal & professional fees for the year 2000 in the amount ofP119,889.37, excluding penalties and interest, and that it would avail of the Voluntary Assessment and Abatement Program (VAAP) of the BIR under Revenue Regulations No. 17-2002.[12] On November 29, 2002, petitioner availed of the VAAP and paid the amounts of P105,574.62 and P143,867.24[13] corresponding to the withholding taxes on the payments for the compensation, honorarium of the Board of Directors, security and janitorial services, and legal and professional services, for the years 1999 and 2000, respectively.

The clashing interests of the State and the taxpayers are again pitted against each other. Two basic principles, the States inherent power of taxation and its declared policy of fostering the creation and growth of cooperatives come into play. However, the one that embodies the spirit of the law and the true intent of the legislature prevails.

This Petition for Review on Certiorari under Section 11 of Republic Act (RA) No. 9282, in relation to Rule 45 of the Rules of Court, seeks to set aside the December 18, 2007 Decision[2] of the Court of Tax Appeals (CTA), ordering petitioner to pay deficiency withholding taxes on interest from savings and time deposits of its members for taxable years 1999 and 2000, pursuant to Section 24(B)(1) of the National Internal Revenue Code of 1997 (NIRC), as well as the delinquency interest of 20% per annum under Section 249(C) of the same Code. It also assails the April 11, 2008 Resolution[3] denying petitioners Motion for Reconsideration.

[1]

On April 24, 2003, petitioner received from the BIR Regional Director, Sonia L. Flores, Letters of Demand Nos. 00027-2003 and 00026-2003, with attached Transcripts of Assessment and Audit Results/Assessment Notices, ordering petitioner to pay the deficiency withholding taxes, inclusive of penalties, for the years 1999 and 2000 in the amounts of P1,489,065.30 and P1,462,644.90, respectively.[14]

Proceedings before the Commissioner of Internal Revenue Factual Antecedents On May 9, 2003, petitioner protested the Letters of Demand and Assessment Notices with the Commissioner of Internal Revenue (CIR).[15] However, the latter failed to act on the protest within the prescribed 180-day period. Hence, on December 3, 2003, petitioner filed a Petition for Review before the CTA, docketed as C.T.A. Case No. 6827.[16]

Petitioner Dumaguete Cathedral Credit Cooperative (DCCCO) is a credit cooperative duly registered with and regulated by the Cooperative Development Authority (CDA).[4] It was established on February 17, 1968[5] with the following objectives and purposes: (1) to increase the income and purchasing power of the members; (2) to pool the resources of the members by encouraging savings and promoting thrift to mobilize capital formation for development activities; and (3) to extend loans to members for provident and productive purposes.[6] It has the power (1) to draw, make, accept, endorse, guarantee, execute, and issue promissory notes, mortgages, bills of exchange, drafts, warrants, certificates and all kinds of obligations and instruments in connection with and in furtherance of its business operations; and (2) to issue bonds, debentures, and other obligations; to contract indebtedness; and to secure the same with a mortgage or deed of trust, or pledge or lien on any or all of its real and personal properties.[7]

Proceedings before the CTA First Division

The case was raffled to the First Division of the CTA which rendered its Decision on February 6, 2007, disposing of the case in this wise:

On November 27, 2001, the Bureau of Internal Revenue (BIR) Operations Group Deputy Commissioner, Lilian B. Hefti, issued Letters of Authority Nos. 63222 and 63223, authorizing BIR Officers Tomas Rambuyon and Tarcisio Cubillan of Revenue Region No. 12, Bacolod City, to examine petitioners books of accounts and other accounting records for all internal revenue taxes for the taxable years 1999 and 2000.[8]

IN VIEW OF ALL THE FOREGOING, the Petition for Review is hereby PARTIALLY GRANTED. Assessment Notice Nos. 000262003 and 00027-2003 are hereby MODIFIED and the assessment for deficiency withholding taxes on the honorarium and per diems of petitioners Board of Directors, security and janitorial services, commissions and legal and professional fees are hereby CANCELLED. However, the assessments for deficiency withholding taxes on interests are hereby AFFIRMED.

Proceedings before the BIR Regional Office

Accordingly, petitioner is ORDERED TO PAY the respondent the respective amounts of P1,280,145.89 and P1,357,881.14 representing deficiency withholding taxes on interests from savings and time deposits of its members for the taxable years 1999 and 2000. In addition, petitioner is ordered to pay the 20% delinquency interest from May 26, 2003 until the amount of deficiency withholding taxes are fully paid pursuant to Section 249 (C) of the Tax Code.

xxxx

SO ORDERED.[17]

(B)

Rate of Tax on Certain Passive Income:

Dissatisfied, petitioner moved for a partial reconsideration, but it was denied by the First Division in its Resolution dated May 29, 2007.[18]

(1) Interests, Royalties, Prizes, and Other Winnings. A final tax at the rate of twenty percent (20%) is hereby imposed upon the amount of interest from any currency bank deposit and yield or any other monetary benefit from deposit substitutes and from trust funds and similar arrangements; x x x

Proceedings before the CTA En Banc

On July 3, 2007, petitioner filed a Petition for Review with the CTA En Banc,[19] interposing the lone issue of whether or not petitioner is liable to pay the deficiency withholding taxes on interest from savings and time deposits of its members for taxable years 1999 and 2000, and the consequent delinquency interest of 20% per annum.[20]

applies only to banks and not to cooperatives, since the phrase similar arrangements is preceded by terms referring to banking transactions that have deposit peculiarities. Petitioner thus posits that the savings and time deposits of members of cooperatives are not included in the enumeration, and thus not subject to the 20% final tax. To bolster its position, petitioner cites BIR Ruling No. 551888[23] and BIR Ruling [DA-591-2006][24] where the BIR ruled that interests from deposits maintained by members of cooperative are not subject to withholding tax under Section 24(B)(1) of the NIRC. Petitioner further contends that pursuant to Article XII, Section 15 of the Constitution[25] and Article 2 of Republic Act No. 6938 (RA 6938) or the Cooperative Code of the Philippines,[26] cooperatives enjoy a preferential tax treatment which exempts their members from the application of Section 24(B)(1) of the NIRC.

Finding no reversible error in the Decision dated February 6, 2007 and the Resolution dated May 29, 2007 of the CTA First Division, the CTA En Banc denied the Petition for Review[21] as well as petitioners Motion for Reconsideration.[22]

Respondents Arguments

The CTA En Banc held that Section 57 of the NIRC requires the withholding of tax at source. Pursuant thereto, Revenue Regulations No. 2-98 was issued enumerating the income payments subject to final withholding tax, among which is interest from any peso bank deposit and yield, or any other monetary benefit from deposit substitutes and from trust funds and similar arrangements x x x. According to the CTA En Banc, petitioners business falls under the phrase similar arrangements; as such, it should have withheld the corresponding 20% final tax on the interest from the deposits of its members.

As a counter-argument, respondent invokes the legal maxim Ubi lex non distinguit nec nos distinguere debemos (where the law does not distinguish, the courts should not distinguish). Respondent maintains that Section 24(B)(1) of the NIRC applies to cooperatives as the phrase similar arrangements is not limited to banks, but includes cooperatives that are depositaries of their members. Regarding the exemption relied upon by petitioner, respondent adverts to the jurisprudential rule that tax exemptions are highly disfavored and construed strictissimi juris against the taxpayer and liberally in favor of the taxing power. In this connection, respondent likewise points out that the deficiency tax assessments were issued against petitioner not as a taxpayer but as a withholding agent.

Issue

Our Ruling

Hence, the present recourse, where petitioner raises the issue of whether or not it is liable to pay the deficiency withholding taxes on interest from savings and time deposits of its members for the taxable years 1999 and 2000, as well as the delinquency interest of 20% per annum.

The petition has merit. Petitioners invocation of BIR Ruling No. 551-888, reiterated in BIR Ruling [DA-591-2006], is proper.

Petitioners Arguments On November 16, 1988, the BIR declared in BIR Ruling No. 551-888 that cooperatives are not required to withhold taxes on interest from savings and time deposits of their members. The pertinent BIR Ruling reads: Petitioner argues that Section 24(B)(1) of the NIRC which reads in part, to wit: November 16, 1988 SECTION 24. Income Tax Rates. BIR RULING NO. 551-888

24 369-88 551-888

The CTA First Division, however, disregarded the above quoted ruling in determining whether petitioner is liable to pay the deficiency withholding taxes on interest from the deposits of its members. It ratiocinated in this wise:

Gentlemen: This Court does not agree. As correctly pointed out by respondent in his Memorandum, nothing in the above quoted resolution will give the conclusion that savings account and time deposits of members of a cooperative are tax-exempt. What is entirely clear is the opinion of the Commissioner that the proper party to withhold the corresponding taxes on certain specified items of income is the payor-corporation and/or person. In the same way, in the case of interests earned from Philippine currency deposits made in a bank, then it is the bank which is liable to withhold the corresponding taxes considering that the bank is the payor-corporation. Thus, the ruling that a cooperative is not the proper party to withhold the corresponding taxes on the aforementioned accounts is correct. However, this ruling does not hold true if the savings and time deposits are being maintained in the cooperative, for in this case, it is the cooperative which becomes the payor-corporation, a separate entity acting no more than an agent of the government for the collection of taxes, liable to withhold the corresponding taxes on the interests earned. [27] (Underscoring ours)

This refers to your letter dated September 5, 1988 stating that you are a corporation established under P.D. No. 175 and duly registered with the Bureau of Cooperatives Development as full fledged cooperative of good standing with Certificate of Registration No. FF 563-RR dated August 8, 1985; and that one of your objectives is to provide and strengthen cooperative endeavor and extend assistance to members and non-members through credit scheme both in cash and in kind.

Based on the foregoing representations, you now request in effect a ruling as to whether or not you are exempt from the following: The CTA En Banc affirmed the above-quoted Decision and found petitioners invocation of BIR Ruling No. 551-88 misplaced. According to the CTA En Banc, the BIR Ruling was based on the premise that the savings and time deposits were placed by the members of the cooperative in the bank.[28] Consequently, it ruled that the BIR Ruling does not apply when the deposits are maintained in the cooperative such as the instant case.

1. 2. 3. ours)

Payment of sales tax Filing and payment of income tax Withholding taxes from compensation of employees and savings account and time deposits of members. (Underscoring

We disagree. There is nothing in the ruling to suggest that it applies only when deposits are maintained in a bank. Rather, the ruling clearly states, without any qualification, that since interest from any Philippine currency bank deposit and yield or any other monetary benefit from deposit substitutes are paid by banks, cooperatives are not required to withhold the corresponding tax on the interest from savings and time deposits of their members. This interpretation was reiterated in BIR Ruling [DA-591-2006] dated October 5, 2006, which was issued by Assistant Commissioner James H. Roldan upon the request of the cooperatives for a confirmatory ruling on several issues, among which is the alleged exemption of interest income on members deposit (over and above the share capital holdings) from the 20% final withholding tax. In the said ruling, the BIR opined that:

In reply, please be informed that Executive Order No. 93 which took effect on March 10, 1987 withdrew all tax exemptions and preferential privileges e.g., income tax and sales tax, granted to cooperatives under P.D. No. 175 which were previously withdrawn by P.D. No. 1955 effective October 15, 1984 and restored by P.D. No. 2008 effective January 8, 1986. However, implementation of said Executive Order insofar as electric, agricultural, irrigation and waterworks cooperatives are concerned was suspended until June 30, 1987. (Memorandum Order No. 65 dated January 21, 1987 of the President) Accordingly, your tax exemption privilege expired as of June 30, 1987. Such being the case, you are now subject to income and sales taxes.

xxxx Moreover, under Section 72(a) of the Tax Code, as amended, every employer making payment of wages shall deduct and withhold upon such wages a tax at the rates prescribed by Section 21(a) in relation to section 71, Chapter X, Title II, of the same Code as amended by Batas Pambansa Blg. 135 and implemented by Revenue Regulations No. 6-82 as amended. Accordingly, as an employer you are required to withhold the corresponding tax due from the compensation of your employees. Furthermore, under Section 50(a) of the Tax Code, as amended, the tax imposed or prescribed by Section 21(c) of the same Code on specified items of income shall be withheld by payor-corporation and/or person and paid in the same manner and subject to the same conditions as provided in Section 51 of the Tax Code, as amended. Such being the case, and since interest from any Philippine currency bank deposit and yield or any other monetary benefit from deposit substitutes are paid by banks, you are not the party required to withhold the corresponding tax on the aforesaid savings account and time deposits of your members. (Underscoring ours)

3. Exemption of interest income on members deposit (over and above the share capital holdings) from the 20% Final Withholding Tax.

The National Internal Revenue Code states that a final tax at the rate of twenty percent (20%) is hereby imposed upon the amount of interest on currency bank deposit and yield or any other monetary benefit from the deposit substitutes and from trust funds and similar arrangement x x x for individuals under Section 24(B)(1) and for domestic corporations under Section 27(D)(1). Considering the members deposits with the cooperatives are not currency bank deposits nor deposit substitutes, Section 24(B)(1) and Section 27(D)(1), therefore, do not apply to members of cooperatives and to deposits of primaries with federations, respectively.

Very truly yours, (SGD.) BIENVENIDO A. TAN, JR. Commissioner It bears stressing that interpretations of administrative agencies in charge of enforcing a law are entitled to great weight and consideration by the courts, unless such interpretations are in a sharp conflict with the governing statute or the Constitution and other laws.[29] In this case, BIR Ruling No. 551-888 and BIR Ruling [DA-591-2006] are in perfect harmony with the Constitution and the laws they seek to implement. Accordingly, the interpretation in BIR Ruling No. 551-888 that cooperatives are not required to withhold the corresponding tax on the interest from savings and time deposits of their members, which was reiterated in BIR Ruling [DA-591-2006], applies to the instant case.

Members of cooperatives deserve a preferential tax treatment pursuant to RA 6938, as amended by RA 9520.

Thus, we interpret and apply the law not independently of but in consonance with justice. Law and justice are inseparable, and we must keep them so. To be sure, there are some laws that, while generally valid, may seem arbitrary when applied in a particular case because of its peculiar circumstances. In such a situation, we are not bound, because only of our nature and functions, to apply them just the same, [is] slavish obedience to their language. What we do instead is find a balance between the word and the will, that justice may be done even as the law is obeyed.

Given that petitioner is a credit cooperative duly registered with the Cooperative Development Authority (CDA), Section 24(B)(1) of the NIRC must be read together with RA 6938, as amended by RA 9520.

Under Article 2 of RA 6938, as amended by RA 9520, it is a declared policy of the State to foster the creation and growth of cooperatives as a practical vehicle for promoting self-reliance and harnessing people power towards the attainment of economic development and social justice. Thus, to encourage the formation of cooperatives and to create an atmosphere conducive to their growth and development, the State extends all forms of assistance to them, one of which is providing cooperatives a preferential tax treatment.

As judges, we are not automatons. We do not and must not unfeelingly apply the law as it is worded, yielding like robots to the literal command without regard to its cause and consequence. Courts are apt to err by sticking too closely to the words of a law, so we are warned, by Justice Holmes again, where these words import a policy that goes beyond them. While we admittedly may not legislate, we nevertheless have the power to interpret the law in such a way as to reflect the will of the legislature. While we may not read into the law a purpose that is not there, we nevertheless have the right to read out of it the reason for its enactment. In doing so, we defer not to the letter that killeth but to the spirit that vivifieth, to give effect to the lawmakers will.

The legislative intent to give cooperatives a preferential tax treatment is apparent in Articles 61 and 62 of RA 6938, which read:

The spirit, rather than the letter of a statute determines its construction, hence, a statute must be read according to its spirit or intent. For what is within the spirit is within the statute although it is not within the letter thereof, and that which is within the letter but not within the spirit is not within the statute. Stated differently, a thing which is within the intent of the lawmaker is as much within the statute as if within the letter; and a thing which is within the letter of the statute is not within the statute unless within the intent of the lawmakers. (Underscoring ours)

ART. 61. Tax Treatment of Cooperatives. Duly registered cooperatives under this Code which do not transact any business with non-members or the general public shall not be subject to any government taxes and fees imposed under the Internal Revenue Laws and other tax laws. Cooperatives not falling under this article shall be governed by the succeeding section.

It is also worthy to note that the tax exemption in RA 6938 was retained in RA 9520. The only difference is that Article 61 of RA 9520 (formerly Section 62 of RA 6938) now expressly states that transactions of members with the cooperatives are not subject to any taxes and fees. Thus:

ART. 62. Tax and Other Exemptions. Cooperatives transacting business with both members and nonmembers shall not be subject to tax on their transactions to members. Notwithstanding the provision of any law or regulation to the contrary, such cooperatives dealing with nonmembers shall enjoy the following tax exemptions; x x x.

This exemption extends to members of cooperatives. It must be emphasized that cooperatives exist for the benefit of their members. In fact, the primary objective of every cooperative is to provide goods and services to its members to enable them to attain increased income, savings, investments, and productivity.[30] Therefore, limiting the application of the tax exemption to cooperatives would go against the very purpose of a credit cooperative. Extending the exemption to members of cooperatives, on the other hand, would be consistent with the intent of the legislature. Thus, although the tax exemption only mentions cooperatives, this should be construed to include the members, pursuant to Article 126 of RA 6938, which provides:

ART. 61. Tax and Other Exemptions. Cooperatives transacting business with both members and non-members shall not be subjected to tax on their transactions with members. In relation to this, the transactions of members with the cooperative shall not be subject to any taxes and fees, including but not limited to final taxes on members deposits and documentary tax. Notwithstanding the provisions of any law or regulation to the contrary, such cooperatives dealing with nonmembers shall enjoy the following tax exemptions: (Underscoring ours)

xxxx

ART. 126. Interpretation and Construction. In case of doubt as to the meaning of any provision of this Code or the regulations issued in pursuance thereof, the same shall be resolved liberally in favor of the cooperatives and their members.

This amendment in Article 61 of RA 9520, specifically providing that members of cooperatives are not subject to final taxes on their deposits, affirms the interpretation of the BIR that Section 24(B)(1) of the NIRC does not apply to cooperatives and confirms that such ruling carries out the legislative intent. Under the principle of legislative approval of administrative interpretation by reenactment, the reenactment of a statute substantially unchanged is persuasive indication of the adoption by Congress of a prior executive construction.[33] Moreover, no less than our Constitution guarantees the protection of cooperatives. Section 15, Article XII of the Constitution considers cooperatives as instruments for social justice and economic development. At the same time, Section 10 of Article II of the Constitution declares that it is a policy of the State to promote social justice in all phases of national development. In relation thereto, Section 2 of Article XIII of the Constitution states that the promotion of social justice shall include the commitment to create economic opportunities based on freedom of initiative and self-reliance. Bearing in mind the foregoing provisions, we find that an interpretation exempting the members of cooperatives from the imposition of the final tax under Section 24(B)(1) of the NIRC is more in keeping with the letter and spirit of our Constitution.

We need not belabor that what is within the spirit is within the law even if it is not within the letter of the law because the spirit prevails over the letter.[31] Apropos is the ruling in the case of Alonzo v. Intermediate Appellate Court,[32] to wit:

But as has also been aptly observed, we test a law by its results; and likewise, we may add, by its purposes. It is a cardinal rule that, in seeking the meaning of the law, the first concern of the judge should be to discover in its provisions the intent of the lawmaker. Unquestionably, the law should never be interpreted in such a way as to cause injustice as this is never within the legislative intent. An indispensable part of that intent, in fact, for we presume the good motives of the legislature, is to render justice.

All told, we hold that petitioner is not liable to pay the assessed deficiency withholding taxes on interest from the savings and time deposits of its members, as well as the delinquency interest of 20% per annum.

On September 6, 2004, the BIR denied the protest filed by SM Prime and ordered it to pay the VAT deficiency for taxable year 2000 in the amount of P124,035,874.12.[11] In closing, cooperatives, including their members, deserve a preferential tax treatment because of the vital role they play in the attainment of economic development and social justice. Thus, although taxes are the lifeblood of the government, the States power to tax must give way to foster the creation and growth of cooperatives. To borrow the words of Justice Isagani A. Cruz: The power of taxation, while indispensable, is not absolute and may be subordinated to the demands of social justice.[34]

On October 15, 2004, SM Prime filed a Petition for Review before the CTA docketed as CTA Case No. 7079.[12]

WHEREFORE, the Petition is hereby GRANTED. The assailed December 18, 2007 Decision of the Court of Tax Appeals and the April 11, 2008 Resolution areREVERSED and SET ASIDE. Accordingly, the assessments for deficiency withholding taxes on interest from the savings and time deposits of petitioners members for the taxable years 1999 and 2000 as well as the delinquency interest of 20% per annum are hereby CANCELLED.

CTA Case No. 7085

On May 15, 2002, the BIR sent First Asia a PAN for VAT deficiency on DECISION COMMISSIONER OF INTERNAL REVENUE, DEL CASTILLO, J.: Petitioner, Present: G.R. No. 183505

When the intent of the law is not apparent as worded, or when the application of the law would lead to absurdity or injustice, legislative history is all important. In such cases, courts may take judicial notice of the origin and history of the law,[1] the deliberations during the enactment,[2] as well as prior laws on the same subject matter[3] to ascertain the true intent or spirit of the law.

CARPIO, J., Chairperson, - versus BRION, DEL CASTILLO, ABAD, and

This Petition for Review on Certiorari under Rule 45 of the Rules of Court, in relation to Republic Act (RA) No. 9282,[4] seeks to set aside the April 30, 2008 Decision[5]and the June 24, 2008 Resolution[6] of the Court of Tax Appeals (CTA). Factual Antecedents

SM PRIME HOLDINGS, INC. and FIRST ASIA REALTY DEVELOPMENT CORPORATION,

PEREZ, JJ.

Promulgated: February 26, 2010

Respondents SM Prime Holdings, Inc. (SM Prime) and First Asia Realty Development Corporation (First Asia) are domestic corporations duly organized and existing under the laws of the Republic of the Philippines. Both are engaged in the business of operating cinema houses, among others.[7]

Respondents.

cinema ticket sales for taxable year 1999 in the total amount of P35,823,680.93.[13] First Asia protested the PAN in a letter dated July 9, 2002.[14]

CTA Case No. 7079

Subsequently, the BIR issued a Formal Letter of Demand for the alleged VAT deficiency which was protested by First Asia in a letter dated December 12, 2002.[15]

On September 26, 2003, the Bureau of Internal Revenue (BIR) sent SM Prime a Preliminary Assessment Notice (PAN) for value added tax (VAT) deficiency on cinema ticket sales in the amount of P119,276,047.40 for taxable year 2000.[8] In response, SM Prime filed a letter-protest dated December 15, 2003.[9]

On September 6, 2004, the BIR rendered a Decision denying the protest and ordering First Asia to pay the amount of P35,823,680.93 for VAT deficiency for taxable year 1999.[16]

On December 12, 2003, the BIR sent SM Prime a Formal Letter of Demand for the alleged VAT deficiency, which the latter protested in a letter dated January 14, 2004.[10]

Accordingly, on October 20, 2004, First Asia filed a Petition for Review before the CTA, docketed as CTA Case No. 7085.[17]

CTA Case No. 7111

The Commissioner of Internal Revenue (CIR) filed his Answers to the Petitions filed by SM Prime and First Asia.[27] On April 16, 2004, the BIR sent a PAN to First Asia for VAT deficiency on cinema ticket sales for taxable year 2000 in the amount of P35,840,895.78. First Asia protested the PAN through a letter dated April 22, 2004.[18] On July 1, 2005, SM Prime filed a Motion to Consolidate CTA Case Nos. 7085, 7111 and 7272 with CTA Case No. 7079 on the grounds that the issues raised therein are identical and that SM Prime is a majority shareholder of First Asia. The motion was granted.[28] Thereafter, the BIR issued a Formal Letter of Demand for alleged VAT deficiency.[19] First Asia protested the same in a letter dated July 9, 2004.[20] Upon submission of the parties respective memoranda, the consolidated cases were submitted for decision on the sole issue of whether gross receipts derived from admission tickets by cinema/theater operators or proprietors are subject to VAT.[29] On October 5, 2004, the BIR denied the protest and ordered First Asia to pay the VAT deficiency in the amount of P35,840,895.78 for taxable year 2000.[21] Ruling of the CTA First Division This prompted First Asia to file a Petition for Review before the CTA on December 16, 2004. The case was docketed as CTA Case No. 7111.[22] On September 22, 2006, the First Division of the CTA rendered a Decision granting the Petition for Review. Resorting to the language used and the legislative history of the law, it ruled that the activity of showing cinematographic films is not a service covered by VAT under the National Internal Revenue Code (NIRC) of 1997, as amended, but an activity subject to amusement tax under RA 7160, otherwise known as the Local Government Code (LGC) of 1991. Citing House Joint Resolution No. 13, entitled Joint Resolution Expressing the True Intent of Congress with Respect to the Prevailing Tax Regime in the Theater and Local Film Industry Consistent with the States Policy to Have a Viable, Sustainable and Competitive Theater and Film Industry as One of its Partners in National Development,[30] the CTA First Division held that the House of Representatives resolved that there should only be one business tax applicable to theaters and movie houses, which is the 30% amusement tax imposed by cities and provinces under the LGC of 1991. Further, it held that consistent with the States policy to have a viable, sustainable and competitive theater and film industry, the national government should be precluded from imposing its own business tax in addition to that already imposed and collected by local government units. The CTA First Division likewise found that Revenue Memorandum Circular (RMC) No. 28-2001, which imposes VAT on gross receipts from admission to cinema houses, cannot be given force and effect because it failed to comply with the procedural due process for tax issuances under RMC No. 20-86.[31] Thus, it disposed of the case as follows:

CTA Case No. 7272

Re: Assessment Notice No. 008-02

A PAN for VAT deficiency on cinema ticket sales for the taxable year 2002 in the total amount of P32,802,912.21 was issued against First Asia by the BIR. In response, First Asia filed a protest-letter dated November 11, 2004. The BIR then sent a Formal Letter of Demand, which was protested by First Asia on December 14, 2004.[23]

Re: Assessment Notice No. 003-03

IN VIEW OF ALL THE FOREGOING, this Court hereby GRANTS the Petitions for Review. Respondents Decisions denying petitioners protests against deficiency value-added taxes are hereby REVERSED. Accordingly, Assessment Notices Nos. VT-00000098, VT-99-000057, VT-00-000122, 003-03 and 008-02 are ORDERED cancelled and set aside.

A PAN for VAT deficiency on cinema ticket sales in the total amount of P28,196,376.46 for the taxable year 2003 was issued by the BIR against First Asia. In a letter datedSeptember 23, 2004, First Asia protested the PAN. A Formal Letter of Demand was thereafter issued by the BIR to First Asia, which the latter protested through a letter datedNovember 11, 2004. [24]

SO ORDERED.[32]

On May 11, 2005, the BIR rendered a Decision denying the protests. It ordered First Asia to pay the amounts of P33,610,202.91 and P28,590,826.50 for VAT deficiency for taxable years 2002 and 2003, respectively.[25]

Aggrieved, the CIR moved for reconsideration which was denied by the First Division in its Resolution dated December 14, 2006.[33]

Ruling of the CTA En Banc Thus, on June 22, 2005, First Asia filed a Petition for Review before the CTA, docketed as CTA Case No. 7272.
[26]

Consolidated Petitions

Thus, the CIR appealed to the CTA En Banc.[34] The case was docketed as CTA EB No. 244.[35] The CTA En Banc however denied[36] the Petition for Review and dismissed[37] as well petitioners Motion for Reconsideration. The CTA En Banc held that Section 108 of the NIRC actually sets forth an exhaustive enumeration of what services are intended to be subject to VAT. And since the showing or exhibition of motion pictures, films or movies by cinema operators or proprietors is not among the enumerated activities contemplated in the phrase sale or exchange of services, then gross receipts derived by cinema/

theater operators or proprietors from admission tickets in showing motion pictures, film or movie are not subject to VAT. It reiterated that the exhibition or showing of motion pictures, films, or movies is instead subject to amusement tax under the LGC of 1991. As regards the validity of RMC No. 28-2001, the CTA En Banc agreed with its First Division that the same cannot be given force and effect for failure to comply with RMC No. 20-86.

(3) In misconstruing the NIRC of 1997 to conclude that the showing of motion pictures is merely subject to the amusement tax imposed by the Local Government Code; and

(4) Issue

In invalidating Revenue Memorandum Circular (RMC) No. 28-2001.[38]

Simply put, the issue in this case is whether the gross receipts derived by operators or proprietors of cinema/theater houses from admission tickets are subject to VAT. Hence, the present recourse, where petitioner alleges that the CTA En Banc seriously erred:

Petitioners Arguments (1) In not finding/holding that the gross receipts derived by operators/proprietors of cinema houses from admission tickets [are] subject to the 10% VAT because: Petitioner argues that the enumeration of services subject to VAT in Section 108 of the NIRC is not exhaustive because it covers all sales of services unless exempted by law. He claims that the CTA erred in applying the rules on statutory construction and in using extrinsic aids in interpreting Section 108 because the provision is clear and unambiguous. Thus, he maintains that the exhibition of movies by cinema operators or proprietors to the paying public, being a sale of service, is subject to VAT.

(a) THE EXHIBITION OF MOVIES BY CINEMA OPERATORS/PROPRIETORS TO THE PAYING PUBLIC IS A SALE OF SERVICE;

(b) UNLESS EXEMPTED BY LAW, ALL SALES OF SERVICES ARE EXPRESSLY SUBJECT TO VAT UNDER SECTION 108 OF THE NIRC OF 1997;

Respondents Arguments

(c) SECTION 108 OF THE NIRC OF 1997 IS A CLEAR PROVISION OF LAW AND THE APPLICATION OF RULES OF STATUTORY CONSTRUCTION AND EXTRINSIC AIDS IS UNWARRANTED;

(d) GRANTING WITHOUT CONCEDING THAT RULES OF CONSTRUCTION ARE APPLICABLE HEREIN, STILL THE HONORABLE COURT ERRONEOUSLY APPLIED THE SAME AND PROMULGATED DANGEROUS PRECEDENTS;

Respondents, on the other hand, argue that a plain reading of Section 108 of the NIRC of 1997 shows that the gross receipts of proprietors or operators of cinemas/theaters derived from public admission are not among the services subject to VAT. Respondents insist that gross receipts from cinema/theater admission tickets were never intended to be subject to any tax imposed by the national government. According to them, the absence of gross receipts from cinema/theater admission tickets from the list of services which are subject to the national amusement tax under Section 125 of the NIRC of 1997 reinforces this legislative intent. Respondents also highlight the fact that RMC No. 28-2001 on which the deficiency assessments were based is an unpublished administrative ruling.

Our Ruling (e) THERE IS NO VALID, EXISTING PROVISION OF LAW EXEMPTING RESPONDENTS SERVICES FROM THE VAT IMPOSED UNDER SECTION 108 OF THE NIRC OF 1997; The petition is bereft of merit. (f) QUESTIONS ON THE WISDOM OF THE LAW ARE NOT PROPER ISSUES TO BE TRIED BY THE HONORABLE COURT; and

The enumeration of services subject to VAT under Section 108 of the NIRC is not exhaustive (g) RESPONDENTS WERE TAXED BASED ON THE PROVISION OF SECTION 108 OF THE NIRC.

(2)

In ruling that the enumeration in Section 108 of the NIRC of 1997 is exhaustive in coverage; Section 108 of the NIRC of the 1997 reads:

SEC. 108. Value-added Tax on Sale of Services and Use or Lease of Properties. Since the activity of showing motion pictures, films or movies by cinema/ theater operators or proprietors is not included in the enumeration, it is incumbent upon the court to the determine whether such activity falls under the phrase similar services. The intent of the legislature must therefore be ascertained.

(A) Rate and Base of Tax. There shall be levied, assessed and collected, a value-added tax equivalent to ten percent (10%) of gross receipts derived from the sale or exchange of services, including the use or lease of properties. The phrase sale or exchange of services means the performance of all kinds of services in the Philippines for others for a fee, remuneration or consideration, including those performed or rendered by construction and service contractors; stock, real estate, commercial, customs and immigration brokers; lessors of property, whether personal or real; warehousing services; lessors or distributors of cinematographic films; persons engaged in milling, processing, manufacturing or repacking goods for others; proprietors, operators or keepers of hotels, motels, rest houses, pension houses, inns, resorts; proprietors or operators of restaurants, refreshment parlors, cafes and other eating places, including clubs and caterers; dealers in securities; lending investors; transportation contractors on their transport of goods or cargoes, including persons who transport goods or cargoes for hire and other domestic common carriers by land, air and water relative to their transport of goods or cargoes; services of franchise grantees of telephone and telegraph, radio and television broadcasting and all other franchise grantees except those under Section 119 of this Code; services of banks, non-bank financial intermediaries and finance companies; and non-life insurance companies (except their crop insurances), including surety, fidelity, indemnity and bonding companies; and similar services regardless of whether or not the performance thereof calls for the exercise or use of the physical or mental faculties. The phrase sale or exchange of services shall likewise include:

The legislature never intended operators or proprietors of cinema/theater houses to be covered by VAT

(1) The lease or the use of or the right or privilege to use any copyright, patent, design or model, plan, secret formula or process, goodwill, trademark, trade brand or other like property or right;

Under the NIRC of 1939,[41] the national government imposed amusement tax on proprietors, lessees, or operators of theaters, cinematographs, concert halls, circuses, boxing exhibitions, and other places of amusement, including cockpits, race tracks, and cabaret.[42] In the case of theaters or cinematographs, the taxes were first deducted, withheld, and paid by the proprietors, lessees, or operators of such theaters or cinematographs before the gross receipts were divided between the proprietors, lessees, or operators of the theaters or cinematographs and the distributors of the cinematographic films. Section 11[43] of the Local Tax Code, [44] however, amended this provision by transferring the power to impose amusement tax[45] on admission from theaters, cinematographs, concert halls, circuses and other places of amusements exclusively to the local government. Thus, when the NIRC of 1977[46] was enacted, the national government imposed amusement tax only on proprietors, lessees or operators of cabarets, day and night clubs, Jai-Alai and race tracks.[47]

xxxx

On January 1, 1988, the VAT Law[48] was promulgated. It amended certain provisions of the NIRC of 1977 by imposing a multi-stage VAT to replace the tax on original and subsequent sales tax and percentage tax on certain services. It imposed VAT on sales of services under Section 102 thereof, which provides:

(7) The lease of motion picture films, films, tapes and discs; and SECTION 102. Value-added tax on sale of services. (a) Rate and base of tax. There shall be levied, assessed and collected, a value-added tax equivalent to 10% percent of gross receipts derived by any person engaged in the sale of services. The phrase sale of services means the performance of all kinds of services for others for a fee, remuneration or consideration, including those performed or rendered by construction and service contractors; stock, real estate, commercial, customs and immigration brokers; lessors of personal property; lessors or distributors of cinematographic films; persons engaged in milling, processing, manufacturing or repacking goods for others; and similar services regardless of whether or not the performance thereof calls for the exercise or use of the physical or mental faculties: Provided That the following services performed in the Philippines by VATregistered persons shall be subject to 0%:

(8) The lease or the use of or the right to use radio, television, satellite transmission and cable television time.

x x x x (Emphasis supplied)

A cursory reading of the foregoing provision clearly shows that the enumeration of the sale or exchange of services subject to VAT is not exhaustive. The words, including, similar services, and shall likewise include, indicate that the enumeration is by way of example only.[39]

(1) Processing manufacturing or repacking goods for other persons doing business outside the Philippines which goods are subsequently exported, x x x

Among those included in the enumeration is the lease of motion picture films, films, tapes and discs. This, however, is not the same as the showing or exhibition of motion pictures or films. As pointed out by the CTA En Banc:

xxxx

Exhibition in Blacks Law Dictionary is defined as To show or display. x x x To produce anything in public so that it may be taken into possession (6th ed., p. 573). While the word lease is defined as a contract by which one owning such property grants to another the right to possess, use and enjoy it on specified period of time in exchange for periodic payment of a stipulated price, referred to as rent (Blacks Law Dictionary, 6th ed., p. 889). x x x[40]

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

(b) Determination of the tax. (1) Tax billed as a 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 receipts, excluding the tax.

tax from the proprietors, lessees, or operators of theaters, cinematographs, concert halls, circuses and other places of amusements was no longer included.

(2) Tax not billed separately or is billed erroneously in the invoice. If the tax is not billed separately or is billed erroneously in the invoice, the tax shall be determined by multiplying the gross receipts (including the amount intended to cover the tax or the tax billed erroneously) by 1/11. (Emphasis supplied) Persons subject to amusement tax under the NIRC of 1977, as amended, however, were exempted from the coverage of VAT.[49]

In 1994, RA 7716 restructured the VAT system by widening its tax base and enhancing its administration. Three years later, RA 7716 was amended by RA 8241. Shortly thereafter, the NIRC of 1997[51] was signed into law. Several amendments[52] were made to expand the coverage of VAT. However, none pertain to cinema/theater operators or proprietors. At present, only lessors or distributors of cinematographic films are subject to VAT. While persons subject to amusement tax[53] under the NIRC of 1997 are exempt from the coverage of VAT.[54] Based on the foregoing, the following facts can be established:

On February 19, 1988, then Commissioner Bienvenido A. Tan, Jr. issued RMC 8-88, which clarified that the power to impose amusement tax on gross receipts derived from admission tickets was exclusive with the local government units and that only the gross receipts of amusement places derived from sources other than from admission tickets were subject to amusement tax under the NIRC of 1977, as amended. Pertinent portions of RMC 8-88 read:

(1) Historically, the activity of showing motion pictures, films or movies by cinema/theater operators or proprietors has always been considered as a form of entertainment subject to amusement tax.

Under the Local Tax Code (P.D. 231, as amended), the jurisdiction to levy amusement tax on gross receipts arising from admission to places of amusement has been transferred to the local governments to the exclusion of the national government.

(2)

Prior to the Local Tax Code, all forms of amusement tax were imposed by the national government.

xxxx

(3) When the Local Tax Code was enacted, amusement tax on admission tickets from theaters, cinematographs, concert halls, circuses and other places of amusements were transferred to the local government.

Since the promulgation of the Local Tax Code which took effect on June 28, 1973 none of the amendatory laws which amended the National Internal Revenue Code, including the value added tax law under Executive Order No. 273, has amended the provisions of Section 11 of the Local Tax Code. Accordingly, the sole jurisdiction for collection of amusement tax on admission receipts in places of amusement rests exclusively on the local government, to the exclusion of the national government. Since the Bureau of Internal Revenue is an agency of the national government, then it follows that it has no legal mandate to levy amusement tax on admission receipts in the said places of amusement.

(4) Under the NIRC of 1977, the national government imposed amusement tax only on proprietors, lessees or operators of cabarets, day and night clubs, Jai-Alai and race tracks.

(5) services.

The VAT law was enacted to replace the tax on original and subsequent sales tax and percentage tax on certain

Considering the foregoing legal background, the provisions under Section 123 of the National Internal Revenue Code as renumbered by Executive Order No. 273 (Sec. 228, old NIRC) pertaining to amusement taxes on places of amusement shall be implemented in accordance with BIR RULING, dated December 4, 1973 and BIR RULING NO. 231-86 dated November 5, 1986 to wit:

(6) When the VAT law was implemented, it exempted persons subject to amusement tax under the NIRC from the coverage of VAT.

(7) When the Local Tax Code was repealed by the LGC of 1991, the local government continued to impose amusement tax on admission tickets from theaters, cinematographs, concert halls, circuses and other places of amusements. x x x Accordingly, only the gross receipts of the amusement places derived from sources other than from admission tickets shall be subject to x x x amusement tax prescribed under Section 228 of the Tax Code, as amended (now Section 123, NIRC, as amended by E.O. 273). The tax on gross receipts derived from admission tickets shall be levied and collected by the city government pursuant to Section 23 of Presidential Decree No. 231, as amended x x x or by the provincial government, pursuant to Section 11 of P.D. 231, otherwise known as the Local Tax Code. (Emphasis supplied)

(8) Amendments to the VAT law have been consistent in exempting persons subject to amusement tax under the NIRC from the coverage of VAT.

On October 10, 1991, the LGC of 1991 was passed into law. The local government retained the power to impose amusement tax on proprietors, lessees, or operators of theaters, cinemas, concert halls, circuses, boxing stadia, and other places of amusement at a rate of not more than thirty percent (30%) of the gross receipts from admission fees under Section 140 thereof.[50] In the case of theaters or cinemas, the tax shall first be deducted and withheld by their proprietors, lessees, or operators and paid to the local government before the gross receipts are divided between said proprietors, lessees, or operators and the distributors of the cinematographic films. However, the provision in the Local Tax Code expressly excluding the national government from collecting

(9)

Only lessors or distributors of cinematographic films are included in the coverage of VAT.

These reveal the legislative intent not to impose VAT on persons already covered by the amusement tax. This holds true even in the case of cinema/theater operators taxed under the LGC of 1991 precisely because the VAT law was intended to replace the percentage tax on certain services. The mere fact that they are taxed by the local government unit and not by the national

government is immaterial. The Local Tax Code, in transferring the power to tax gross receipts derived by cinema/theater operators or proprietor from admission tickets to the local government, did not intend to treat cinema/theater houses as a separate class. No distinction must, therefore, be made between the places of amusement taxed by the national government and those taxed by the local government.

not grant nor restore to the national government the power to impose amusement tax on cinema/theater operators or proprietors. Neither did it expand the coverage of VAT. Since the imposition of a tax is a burden on the taxpayer, it cannot be presumed nor can it be extended by implication. A law will not be construed as imposing a tax unless it does so clearly, expressly, and unambiguously.[59] As it is, the power to impose amusement tax on cinema/theater operators or proprietors remains with the local government.

To hold otherwise would impose an unreasonable burden on cinema/theater houses operators or proprietors, who would be paying an additional 10%[55] VAT on top of the 30% amusement tax imposed by Section 140 of the LGC of 1991, or a total of 40% tax. Such imposition would result in injustice, as persons taxed under the NIRC of 1997 would be in a better position than those taxed under the LGC of 1991. We need not belabor that a literal application of a law must be rejected if it will operate unjustly or lead to absurd results.[56] Thus, we are convinced that the legislature never intended to include cinema/theater operators or proprietors in the coverage of VAT.

Revenue Memorandum Circular No. 28-2001 is invalid

On this point, it is apropos to quote the case of Roxas v. Court of Tax Appeals,[57] to wit:

Considering that there is no provision of law imposing VAT on the gross receipts of cinema/theater operators or proprietors derived from admission tickets, RMC No. 28-2001 which imposes VAT on the gross receipts from admission to cinema houses must be struck down. We cannot overemphasize that RMCs must not override, supplant, or modify the law, but must remain consistent and in harmony with, the law they seek to apply and implement.[60]

The power of taxation is sometimes called also the power to destroy. Therefore, it should be exercised with caution to minimize injury to the proprietary rights of a taxpayer. It must be exercised fairly, equally and uniformly, lest the tax collector kill the hen that lays the golden egg. And, in order to maintain the general public's trust and confidence in the Government this power must be used justly and not treacherously.

In view of the foregoing, there is no need to discuss whether RMC No. 28-2001 complied with the procedural due process for tax issuances as prescribed under RMC No. 20-86.

Rule on tax exemption does not apply The repeal of the Local Tax Code by the LGC of 1991 is not a legal basis for the imposition of VAT

Petitioner, in issuing the assessment notices for deficiency VAT against respondents, ratiocinated that:

Moreover, contrary to the view of petitioner, respondents need not prove their entitlement to an exemption from the coverage of VAT. The rule that tax exemptions should be construed strictly against the taxpayer presupposes that the taxpayer is clearly subject to the tax being levied against him.[61] The reason is obvious: it is both illogical and impractical to determine who are exempted without first determining who are covered by the provision.[62] Thus, unless a statute imposes a tax clearly, expressly and unambiguously, what applies is the equally well-settled rule that the imposition of a tax cannot be presumed.[63] In fact, in case of doubt, tax laws must be construed strictly against the government and in favor of the taxpayer.[64]

Basically, it was acknowledged that a cinema/theater operator was then subject to amusement tax under Section 260 of Commonwealth Act No. 466, otherwise known as the National Internal Revenue Code of 1939, computed on the amount paid for admission. With the enactment of the Local Tax Code under Presidential Decree (PD) No. 231, dated June 28, 1973, the power of imposing taxes on gross receipts from admission of persons to cinema/theater and other places of amusement had, thereafter, been transferred to the provincial government, to the exclusion of the national or municipal government (Sections 11 & 13, Local Tax Code). However, the said provision containing the exclusive power of the provincial government to impose amusement tax, had also been repealed and/or deleted by Republic Act (RA) No. 7160, otherwise known as the Local Government Code of 1991, enacted into law on October 10, 1991. Accordingly, the enactment of RA No. 7160, thus, eliminating the statutory prohibition on the national government to impose business tax on gross receipts from admission of persons to places of amusement, led the way to the valid imposition of the VAT pursuant to Section 102 (now Section 108) of the old Tax Code, as amended by the Expanded VAT Law (RA No. 7716) and which was implemented beginning January 1, 1996.[58] (Emphasis supplied)

WHEREFORE, the Petition is hereby DENIED. The assailed April 30, 2008 Decision of the Court of Tax Appeals En Banc holding that gross receipts derived by respondents from admission tickets in showing motion pictures, films or movies are not subject to value-added tax under Section 108 of the National Internal Revenue Code of 1997, as amended, and its June 24, 2008 Resolution denying the motion for reconsideration are AFFIRMED.

SO ORDERED. Adong vs Cheong Seng Gee, G.R. No. 18081,March 3, 1922 Republic of the Philippines SUPREME COURT Manila EN BANC

We disagree.

The repeal of the Local Tax Code by the LGC of 1991 is not a legal basis for the imposition of VAT on the gross receipts of cinema/theater operators or proprietors derived from admission tickets. The removal of the prohibition under the Local Tax Code did

G.R. No. 18081 March 3, 1922

IN THE MATTER OF THE ESTATE OF CHEONG BOO, deceased. MORA ADONG, petitioner-appellant, vs. CHEONG SENG GEE, opponent-appellant. Kincaid, Perkins & Kincaid and P. J. Moore for petitioner-appellant. Carlos A. Sobral for opponent-appellant. MALCOLM, J.: The two question presented for determination by these appeals may be framed as follows: Is a marriage contracted in China and proven mainly by an alleged matrimonial letter, valid in the Philippines? Are the marriage performed in the Philippines according to the rites of the Mohammedan religion valid? As the decision of the Supreme Court on the last point will affect marriages consummated by not less than one hundred and fifty thousand Moros who profess the Mohammedan faith, the transcendental importance of the cause can be realized. We proposed to give to the subject the serious consideration which it deserves. Cheong Boo, a native of China, died intestate in Zamboanga, Philippine Islands, on August 5, 1919. He left property worth nearly P100,000. The estate of the deceased was claimed, on the one hand, by Cheong Seng Gee, who alleged that he was a legitimate child by a marriage contracted by Cheong Boo with Tan Dit in China in 1895. The estate was claimed, on the other hand, by the Mora Adong who alleged that she had been lawfully married to Cheong Boo in 1896 in Basilan, Philippine Islands, and her daughters, Payang, married to Cheng Bian Chay, and Rosalia Cheong Boo, unmarried. The conflicting claims to the estate of Cheong Boo were ventilated in the Court of First Instance of Zamboanga. The trial judge, the Honorable Quirico Abeto, after hearing the evidence presented by both sides, reached the conclusion, with reference to the allegations of Cheong Seng Gee, that the proof did not sufficiently establish the Chinese marriage, but that because Cheong Seng Gee had been admitted to the Philippine Islands as the son of the deceased, he should share in the estate as a natural child. With reference to the allegations of the Mora Adong and her daughters Payang and Rosalia, the trial judge reached the conclusion that the marriage between the Mora Adong and the deceased had been adequately proved but that under the laws of the Philippine Islands it could not be held to be a lawful marriage; accordingly, the daughters Payang and Rosalia would inherit as natural children. The order of the trial judge, following these conclusions, was that there should be a partition of the property of the deceased Cheong Boo between the natural children, Cheong Seng Gee, Payang, and Rosalia. From the judgment of the Judge of First Instance both parties perfected appeals. As to the facts, we can say that we agree in substance with the findings of the trial court. As to the legal issues submitted for decision by the numerous assignments of error, these can best be resolved under two heads, namely: (1) The validity of the Chinese marriage; and (2) the validity of the Mohammedan marriage. 1. Validity of the Chinese Marriage The theory advanced on behalf of the claimant Cheong Seng Gee was that Cheong Boo was married in the city of Amoy, China, during the second moon of the twenty-first year of the Emperor Quang Su, or, according to the modern count, on February 16, 1985, to a young lady named Tan Dit. Witnesses were presented who testified to having been present at the marriage ceremony. There was also introduced in evidence a document in Chinese which in translation reads as follows: One hundred years of life and health for both. Your nephew, Tan Chao, respecfully answers the venerable Chiong Ing, father of the bridegroom, accepting his offer of marriage, and let this document serve as proof of the acceptance of said marriage which is to be celebrated during the merry season of the flowers. I take advantage of this occasion to wish for your and the spouses much happiness, a long life, and prolific issue, as noble and great as that which you brought forth. I consider the marriage of your son Boo with my sister Lit Chia as a mandate of God and I hope that they treat each other with great love and mutual courtesy and that both they and their parents be very happy.

Given during the second moon of the twenty-first year of the reign of the Emperor Quang Su. Cheong Boo is said to have remained in China for one year and four months after his marriage during which time there was born to him and his wife a child named Cheong Seng Gee. Cheong Boo then left China for the Philippine Islands and sometime thereafter took to himself a concubine Mora by whom he had two children. In 1910, Cheong Boo was followed to the Philippines by Cheong Seng Gee who, as appears from documents presented in evidence, was permitted to land in the Philippine Islands as the son of Cheong Boo. The deceased, however, never returned to his native hearth and seems never to have corresponded with his Chinese wife or to have had any further relations with her except once when he sent her P10. The trial judge found, as we have said, that the proof did not sustain the allegation of the claimant Cheong Seng Gee, that Cheong Boo had married in China. His Honor noted a strong inclination on the part of the Chinese witnesses, especially the brother of Cheong Boo, to protect the interests of the alleged son, Cheong Seng Gee, by overstepping the limits of truthfulness. His Honor also noted that reliable witnesses stated that in the year 1895, when Cheong Boo was supposed to have been in China, he was in reality in Jolo, in the Philippine Islands. We are not disposed to disturb this appreciation of fact by the trial court. The immigration documents only go to show the relation of parent and child existing between the deceased Cheong Boo and his son Cheong Seng Gee and do not establish the marriage between the deceased and the mother of Cheong Seng Gee. Section IV of the Marriage Law (General Order No. 68) provides that "All marriages contracted without these Islands, which would be valid by the laws of the country in which the same were contracted, are valid in these Islands." To establish a valid foreign marriage pursuant to this comity provision, it is first necessary to prove before the courts of the Islands the existence of the foreign law as a question of fact, and it is then necessary to prove the alleged foreign marriage by convincing evidence. As a case directly in point is the leading one of Sy Joc Lieng vs. Encarnacion ([1910]), 16 Phil., 137; [1913], 228 U.S., 335). Here, the courts of the Philippines and the Supreme Court of the United States were called upon to decide, as to the conflicting claims to the estate of a Chinese merchant, between the descendants of an alleged Chinese marriage and the descendants of an alleged Philippine marriage. The Supreme Courts of the Philippine Islands and the United States united in holding that the Chinese marriage was not adequately proved. The legal rule was stated by the United States Supreme Court to be this: A Philippine marriage, followed by forty years of uninterrupted marital life, should not be impugned and discredited, after the death of the husband and administration of his estate, though an alleged prior Chinese marriage, "save upon proof so clear, strong, and unequivocal as to produce a moral conviction of the existence of such impediment." Another case in the same category is that of Son Cui vs. Guepangco ([1912], 22 Phil., 216). In the case at bar there is no competent testimony as to what the laws of China in the Province of Amoy concerning marriage were in 1895. As in the Encarnacion case, there is lacking proof so clear, strong, and unequivocal as to produce a moral conviction of the existence of the alleged prior Chinese marriage. Substitute twenty-three years for forty years and the two cases are the same. The lower court allowed the claimant, Cheong Seng Gee, the testamentary rights of an acknowledged natural child. This finding finds some support in Exhibit 3, the affidavit of Cheong Boo before the American Vice-Consul at Sandakan, British North Borneo. But we are not called upon to make a pronouncement on the question, because the oppositor-appellant indicates silent acquiescence by assigning no error. 2. Validity of the Mohammedan Marriage The biographical data relating to the Philippine odyssey of the Chinaman Cheong Boo is fairly complete. He appears to have first landed on Philippine soil sometime prior to the year 1896. At least, in the year las mentioned, we find him in Basilan, Philippine Islands. There he was married to the Mora Adong according to the ceremonies prescribed by the book on marriage of the Koran, by the Mohammedan Iman (priest) Habubakar. That a marriage ceremony took place is established by one of the parties to the marriage, the Mora Adong, by the Iman who solemnized the marriage, and by other eyewitnesses, one of whom was the father of the bride, and another, the chief of the rancheria, now a municipal councilor. The groom complied with Quranic law by giving to the bride a dowry of P250 in money and P250 in goods. The religious rites began with the bride and groom seating themselves in the house of the father of the bride, Marahadja Sahibil. The Iman read from the Koran. Then the Iman asked the parents if they had any objection to the marriage. The marital act was consummated by the groom entering the woman's mosquito net. From the marriage day until the death of Cheong Boo, twenty-three years later, the Chinaman and the Mora Adong cohabited as husband and wife. To them were born five children, two of whom, Payang and Rosalia, are living. Both in his relations with Mora Adong and with third persons during his lifetime, Cheong Boo treated Adong as his lawful wife. He admitted this relationship in several private and public documents. Thus, when different legal documents were executed, including decrees of registration,

Cheong Boo stated that he was married to the Mora Adong while as late as 1918, he gave written consent to the marriage of his minor daughter, Payang. Notwithstanding the insinuation of counsel for the Chinese appellant that the custom is prevalent among the Moros to favor in their testimony, a relative or friend, especially when they do not swear on the Koran to tell the truth, it seems to us that proof could not be more convincing of the fact that a marriage was contracted by the Chinaman Cheong Boo and the Mora Adong, according to the ceremonies of the Mohammedan religion. It is next incumbent upon us to approach the principal question which we announced in the very beginning of this decision, namely, Are the marriages performed in the Philippines according to the rites of the Mohammedan religion valid? Three sections of the Marriage Law (General Order No. 68) must be taken into consideration. Section V of the Marriage Law provides that "Marriage may be solemnized by either a judge of any court inferior to the Supreme Court, justice of the peace, or priest or minister of the Gospel of any denomination . . ." Counsel, failing to take account of the word "priest," and only considering the phrase "minister of the Gospel of any denomination" would limit the meaning of this clause to ministers of the Christian religion. We believe this is a strained interpretation. "Priest," according to the lexicographers, means one especially consecrated to the service of a divinity and considered as the medium through whom worship, prayer, sacrifice, or other service is to be offered to the being worshipped, and pardon, blessing, deliverance, etc., obtained by the worshipper, as a priest of Baal or of Jehovah; a Buddhist priest. "Minister of the Gospel" means all clergymen of every denomination and faith. A "denomination" is a religious sect having a particular name. (Haggin vs. Haggin [1892], 35 Neb., 375; In re Reinhart, 9 O. Dec., 441; Hale vs. Everett [1868], 53 N. H. 9.) A Mohammedan Iman is a "priest or minister of the Gospel," and Mohammedanism is a "denomination," within the meaning of the Marriage Law. The following section of the Marriage Law, No. VI, provides that "No particular form for the ceremony of marriage is required, but the parties must declare, in the presence of the person solemnizing the marriage, that they take each other as husband and wife." The law is quite correct in affirming that no precise ceremonial is indispensable requisite for the creation of the marriage contract. The two essentials of a valid marriage are capacity and consent. The latter element may be inferred from the ceremony performed, the acts of the parties, and habit or repute. In this instance, there is no question of capacity. Nor do we think there can exist any doubt as to consent. While it is true that during the Mohammedan ceremony, the remarks of the priest were addressed more to the elders than to the participants, it is likewise true that the Chinaman and the Mora woman did in fact take each other to be husband and wife and did thereafter live together as husband and wife. (Travers vs. Reinhardt [1907], 205 U.S., 423. It would be possible to leave out of view altogether the two sections of the Marriage Law which have just been quoted and discussed. The particular portion of the law which, in our opinion, is controlling, is section IX, reading as follows: "No marriage heretofore solemnized before any person professing to have authority therefor shall be invalid for want of such authority or on account of any informality, irregularity, or omission, if it was celebrated with the belief of the parties, or either of them, that he had authority and that they have been lawfully married." The trial judge in construing this provision of law said that he did not believe that the legislative intention in promulgating it was to validate marriages celebrated between Mohammedans. To quote the judge: This provisions relates to marriages contracted by virtue of the provisions of the Spanish law before revolutionary authorized to solemnized marriages, and it is not to be presumed that the legislator intended by this law to validate void marriages celebrated during the Spanish sovereignty contrary to the laws which then governed. What authority there is for this statement, we cannot conceive. To our mind, nothing could be clearer than the language used in section IX. Note for a moment the all embracing words found in this section: "No marriage" Could more inclusive words be found? "Heretofore solemnized" Could any other construction than that of retrospective force be given to this phrase? "Before any person professing to have authority therefor shall be invalid for want of such authority" Could stronger language than this be invoked to announce legislative intention? "Or on account of any informality, irregularity, or omission" Could the legislative mind frame an idea which would more effectively guard the marriage relation against technicality? "If it was celebrated with the belief of the parties, or either of them, that he had authority and that they have been lawfully married" What was the purpose of the legislator here, if it was not to legalize the marriage, if it was celebrated by any person who thought that he had authority to perform the same, and if either of the parties thought that they had been married? Is there any word or hint of any word which would restrict the curative provisions of section IX of the Marriage Law to Christian marriages? By what system of mental gymnastics would it be possible to evolve from such precise language the curious idea that it was restricted to marriages performed under the Spanish law before the revolutionary authorities? In view of the importance of the question, we do not desire to stop here but would ascertain from other sources the meaning and scope of Section IX of General Order No. 68.

The purpose of the government toward the Mohammedan population of the Philippines has, time and again, been announced by treaty, organic law, statutory law, and executive proclamation. The Treaty of Paris in its article X, provided that "The inhabitants of the territories over which Spain relinquishes or cedes her sovereignty shall be secured Instructions to the Philippine Commission imposed on every branch of the Government of the Philippine Islands the inviolable rule "that no law shall be made respecting an establishment of religion or prohibiting the free exercise thereof, and that the free exercise and enjoyment of religious profession and worship, without discrimination or preference, shall forever be allowed ... That no form of religion and no minister of religion shall be forced upon any community or upon any citizen of the Islands; that, upon the other hand, no minister of religion shall be interfered with or molested in following his calling, and that the separation between state and church shall be real, entire, and absolute." The notable state paper of President McKinley also enjoined the Commission, "to bear in mind that the Government which they are establishing is designed . . . for the happiness, peace, and prosperity of the people of the Philippine Islands" and that, therefore, "the measures adopted should be made to conform to their customs, their habits, and even their prejudices. . . . The Philippine Bill and the Jones Law reproduced the main constitutional provisions establishing religious toleration and equality. Executive and legislative policy both under Spain and the United States followed in the same path. For instance, in the Treaty of April 30, 1851, entered into by the Captain General of the Philippines and the Sultan of Sulu, the Spanish Government guaranteed "with all solemnity to the Sultan and other inhabitants of Sulu the free exercise of their religion, with which it will not interfere in the slightest way, and it will also respect their customs." (See further Decree of the Governor-General of January 14, 1881.) For instance, Act No. 2520 of the Philippine Commission, section 3, provided that "Judges of the Court of First Instance and justices of the peace deciding civil cases in which the parties are Mohammedans or pagans, when such action is deemed wise, may modify the application of the law of the Philippine Islands, except laws of the United States applicable to the Philippine Islands, taking into account local laws and customs. . . ." (See further Act No. 787, sec. 13 [ j]; Act No. 1283, sec. 6 [b]; Act No. 114 of the Legislative Council amended and approved by the Philippine Commission; Cacho vs. Government of the United States [1914], 28 Phil., 616.) Various responsible officials have so oft announced the purpose of the Government not to interfere with the customs of the Moros, especially their religious customs, as to make quotation of the same superfluous. The retrospective provisions of the Philippine Marriage Law undoubtedly were inspired by the governmental policy in the United States, with regard to the marriages of the Indians, the Quakers, and the Mormons. The rule as to Indians marriages is, that a marriage between two Indians entered into according to the customs and laws of the people at a place where such customs and laws are in force, must be recognized as a valid marriage. The rule as to the Society of Quakers is, that they will be left to their own customs and that their marriages will be recognized although they use no solemnization. The rule as to Mormon marriages is that the sealing ceremony entered into before a proper official by members of that Church competent to contract marriage constitutes a valid marriage. The basis of human society throughout the civilized world is that of marriage. Marriage in this jurisdiction is not only a civil contract, but, it is a new relation, an institution in the maintenance of which the public is deeply interested. Consequently, every intendment of the law leans toward legalizing matrimony. Persons dwelling together in apparent matrimony are presumed, in the absence of any counter-presumption or evidence special to the case, to be in fact married. The reason is that such is the common order of society, and if the parties were not what they thus hold themselves out as being, they would be living in the constant violation of decency and of law. A presumption established by our Code of Civil Procedure is "that a man and woman deporting themselves as husband and wife have entered into a lawful contract of marriage.:" (Sec. 334, No. 28.) Semper praesumitur pro matrimonio Always presume marriage. (U. S. vs. Villafuerte and Rabano [1905], 4 Phil., 476; Son Cuivs. Guepangco, supra; U.S. vs. Memoracion and Uri [1916], 34 Phil., 633; Teter vs. Teter [1884], 101 Ind., 129.) Section IX of the Marriage Law is in the nature of a curative provision intended to safeguard society by legalizing prior marriages. We can see no substantial reason for denying to the legislative power the right to remove impediments to an effectual marriage. If the legislative power can declare what shall be valid marriages, it can render valid, marriages which, when they took place, were against the law. Public policy should aid acts intended to validate marriages and should retard acts intended to invalidate marriages. (Coghsen vs. Stonington [1822], 4 Conn, 209; Baity vs. Cranfill [1884], 91 N. C., 273.) The courts can properly incline the scales of their decisions in favors of that solution which will mot effectively promote the public policy. That is the true construction which will best carry legislative intention into effect. And here the consequences, entailed in holding that the marriage of the Mora Adong and the deceased Cheong Boo, in conformity with the Mohammedan religion and Moro customs, was void, would be far reaching in disastrous result. The last census shows that there are at least one hundred fifty thousand Moros who have been married according to local custom. We then have it within our power either to nullify or to validate all of these marriages; either to make all of the children born of these unions bastards or to make them legitimate; either to proclaim immorality or to sanction morality; either to block or to advance settled governmental policy. Our duty is a obvious as the law is plain. In moving toward our conclusion, we have not lost sight of the decisions of this court in the cases of United States vs. Tubban ([1915]), 29 Phil., 434) and United States vs. Verzola ([1916, 33 Phil., 285). We do not, however, believe these decisions to be controlling. In the first place, these were criminal actions and two Justice dissented.. In the second place, in the Tubban case, the marriage in question was a tribal marriage of the Kalingas, while in the Verzola case, the marriage had been performed during the Spanish regime by a lieutenant of the Guardia Civil. In neither case, in deciding as to whether or not the accused should be given the

benefit of the so-called unwritten law, was any consideration given to the provisions of section IX of General Order No. 68. We are free to admit that, if necessary, we would unhesitatingly revoke the doctrine announced in the two cases above mentioned. We regard the evidence as producing a moral conviction of the existence of the Mohammedan marriage. We regard the provisions of section IX of the Marriage law as validating marriages performed according to the rites of the Mohammedan religion. There are other questions presented in the various assignments of error which it is unnecessary to decide. In resume, we find the Chinese marriage not to be proved and that the Chinaman Cheong Seng Gee has only the rights of a natural child, and we find the Mohammedan marriage to be proved and to be valid, thus giving to the widow and the legitimate children of this union the rights accruing to them under the law. Judgment is reversed in part, and the case shall be returned to the lower court for a partition of the property in accordance with this decision, and for further proceedings in accordance with law. Without special findings as to costs in this instance, it is so ordered

Office of the City Treasurer of Manila; and HON. ANTHONY ACEVEDO, in his capacity as City Treasurer of Manila, petitioners, vs. HON. COURT OF APPEALS and GALICIANO P. MANAPAT, respondents.

FELICIANO, J.: On 29 February 1972, private respondent Galicano Manapat retired from the government service as Chief of the Legal Division of the office of the Municipal Board of Manila. He retired under the provisions of R.A. No. 1616, as amended, having then rendered twenty (20) years of service to petitioner City of Manila and received the amount of P24,479.02 representing his full retirement benefit. On April 1977, Manapat was reemployed by the City of Manila this time as Secretary of the City of Manila Board of Tax Assessment Appeals, with a monthly salary of P3,993.33. He occupied that position until he reached the compulsory retirement age of sixty-five (65) years on 27 June 1989. The City of Manila extended his period of service for six (6) months, i.e., up to 27 December 1989. During this additional period of service, i.e., on 1 July 1989, the Salary Standardization Law (R.A. No. 6758) took effect and increased Manapat's monthly salary from P3,993.33 to P11,385.00. Upon expiration of private respondent Manapat's six (6)-month extended period of service, he filed with the Government Service Insurance System ("GSIS") an application for retirement under R.A. No. 1616, as amended. This application was approved by the GSIS on 6 April 1990, initially on the basis of his previous salary of P3,993.33 per month; on that basis, he was entitled to a total retirement gratuity of P179,274.04, less the amount of P24,479.02 previously received as retirement pay when he first retired on 29 February 1972, making a net balance of P154,795.02. On 16 May 1990, the GSIS adjusted Manapat's approved application for retirement to conform with his last standardized monthly salary of P11,385.00. This adjustment resulted in a total collectible retirement pay or gratuity of P486,634.84 for Manapat. The approved adjusted claim of Manapat for retirement benefits was forwarded by the GSIS to the Board of Tax Assessment Appeals of the City of Manila. The Assistant Department Head of that Board in turn transmitted the papers to the Chairman of the Committee on the Settlement of Claims for Retirement Gratuity and Terminal Leave Pay ("Committee") by an Indorsement dated 21 May 1990. The next day, however, the Chairman of that Committee returned the papers to the Manila Board of Tax Assessment Appeals without acting on the retirement gratuity claim of Manapat, upon the ground that it was existing policy of the City of Manila that an employee who has reached the compulsory retirement age of sixty-five (65) years must retire under R.A. No. 660 and not under the provisions of R.A. No. 1616, as amended. Manapat appealed the action of the Chairman of the Committee to the City Budget Officer. The latter officer replied by informing Manapat that his claim for retirement pay was forwarded to the then Mayor of the City of Manila, petitioner Gemiliano Lopez, Jr., as well as to the City Legal Officer for legal advice. On 1 October 1990, the City Legal Officer of the City of Manila rendered a written opinion to the effect that the City, as employer, had discretionary authority to allow or disallow a claim to retire under R.A. No. 1616, as amended, considering that retirement under that law was optional and payment of retirement benefits thereunder was subject to the availability if funds. A week later, on 8 October 1990, Manapat received a letter from petitioner City Mayor advising that his (Manapat's) request for settlement of his claim for retirement gratuity under R.A. No. 1616 could not be favorably acted upon due to financial constraints upon the City Government. Manapat then commenced in the Regional Trial Court of the City of Manila, a special civil action for mandamus to compel petitioner officials of the city of Manila to allow Manapat to retire under the provisions of R.A. No. 1616, as amended. The trial court dismissed the petition. On appeal, the Court of Appeal reversed the decision of the trial court and issued a writ of mandamus ordering petitioner officials to pay the retirement claim of Mr. Manapat in the amount of P486,636.84 with legal interest from the time of filling of the petition for mandamus and awarded as well Mr. Manapat P30,000.00 as moral damages and another P30,000.00 as attorney's fees. In the present Petition for Review, petitioner officials of the City of Manila pose the very same issues they had raised before the Court of Appeals, namely: (1) Whether a government employee, who has reached the compulsory retirement age of 65 years, may opt to retire under R.A. No. 1616 as amended or, alternatively, is entitled only to retirement benefits under the mandatory retirement clause of R.A. No. 660; and

CASE DIGEST: GR. No. 18081 March 3, 1922 Mora Adong, petitioner and appellant vs. Cheong Seng Gee, opponent and appellant Agpalos Statutory Construction quoted this case to wit: The policy of the law, once ascertained should be given effect by the judiciary. One way of accomplishing this mandate is to give a statute of doubtful meaning, a construction that will promote public policy. FACTS: Cheong Boo, a native of China died in Zamboanga, Philippine Islands on August 5, 1919 and left property worth nearly P100,000 which is now being claimed by two parties - (1) Cheong Seng Gee who alleged that he was a legitimate child by marriag contracted by Cheong Boo with Tan Bit in China in 1985, and (2) Mora Adong who alleged that she had been lawfully married to Cheong Boo in 1896 in Basilan, Philippine Islands and had two daughters with the deceased namely Payang and Rosalia. The conflicting claims to Cheong Boos estate were ventilated in the lower court that ruled that Cheong Seng Gee failed to sufficiently establish the Chinese marriage through a mere letter testifying that Cheong Boo and Tan Bit married each other but that because Cheong Seng Gee had been admitted to the Philippine Islands as the son of the deceased, he should share in the estate as a natural child. With reference to the allegations of Mora Adong and her daughters, the trial court reached the conclusion that the marriage between Adong and Cheong Boo had been adequately proved but that under the laws of the Philippine Islands it could not be held to be a lawful marriage and thus the daughter Payang and Rosalia would inherit as natural children. The lower court believes that Mohammedan marriages are not valid under the Philippine Islands laws this as an Imam as a solemnizing officer and under Quaranic laws. ISSUES: Whether or not the Chinese marriage between Cheong Boo and Tan Dit is valid Whether or not the Mohammedan marriage between Cheong Boo and Mora Adong is valid RULING: The Supreme Court found the (1) Chinese marriage not proved and Chinaman Cheong Seng Gee has only the rights of a natural child while (2) it found the Mohammedan marriage to be proved and to be valid, thus giving to the widow Mora Adong and the legitimate children Payang and Rosalia the rights accruing to them under the law. HELD: (FOR STATCON) The Supreme Court held that marriage in this jurisdiction is not only a civil contract but it is a new relation, an instruction in the maintenance of which the public is deeply interested. The presumption as to marriage is that every intendment of the law leans toward legalizing matrimony. Persons dwelling together in apparent matrimony are presumed, in the absence of counter-presumption or evidence special to the case, to be in fact married. The reason is that such is the common order of society, and if the parties were not what they thus hold themselves out as being, they would be living in the constant violation of decency of the law. As to retroactive force, marriage laws is in the nature of a curative provision intended to safeguard society by legalizing prior marriages. Public policy should aid acts intended to validate marriages and should retard acts intended to invalidate marriages. This as for public policy, the courts can properly incline the scales of their decision in favor of that solution which will most effectively promote the public policy. That is the true construction which will best carry legislative intention into effect. (FOR PERSONS) Sec. IV of the Marriage law provides that all marriages contracted outside the islands, which would be valid by the laws of the country in which the same were contracted, are valid in these islands. To establish a valid foreign marriage pursuant to this comity provision, it is first necessary to prove before the courts ofthe Islands the existence of the foreign law as a question of fact, and it is then necessary to prove the alleged foreign marriage by convincing evidence. A Philippine marriage followed by 23 years of uninterrupted marital life, should not be impugned and discredited, after the death of the husband through an alleged prior Chinese marriage, save upon proof so clear, strong and unequivocal as to produce a moral conviction of the existence of such impediment. A marriage alleged to have been contracted in China and proven mainly by a so-called matrimonial letter held not to be valid in the Philippines. G.R. No. 104158 November 6, 1992 HON. GEMILIANO LOPEZ, JR., in his capacity as Mayor of Manila; EUFEMIA DOMIGUEZ, in her capacity as City Budget Officer; HERMINIO ARCEO, in his capacity as Chairman, Committee for Retirement Gratuity and Terminal Leave Pay of the

(2) Whether the City of Manila as employer may be compelled to pay the retirement benefits of its employees under R.A. No. 1616, notwithstanding lack of available funds for that purpose. We are aware of the very practical considerations which underlie the respective positive taken by petitioners and private respondent. Petitioners are insisting that private respondent Manapat retire under the provisions of R.A. No. 660 because, under those provisions, the GSIS is bound to pay the retirement benefits properly accruing to Manapat, while it is the City of Manila as employer which is liable for the retirement gratuity appertaining under R.A. No. 1616 as amended to Manapat. Upon the other hand, Manapat wishes to retire under the provisions of R.A. No. 1616 as amended because the amount of the gratuity under that law will be significantly higher than the gratuity which would be payable under the terms of R.A. No. 660. 1 Both R.A. No. 660 and R.A. No. 1616 were amendments to Commonwealth Act ("C.A.") No. 186, otherwise known as the Government Service Insurance System Charter. Section 12, C.A. No. 186, as amended by both R.A. No. 660 and R.A. No. 1616 provides, in relevant part, as follows: SECTION 12. Conditions for retirement. . . . (a) On completion of thirty years of total service and attainment of age fifty-seven years, a member shall have the option to retire. In all cases of retirement under this Act, the last three years of service before retirement must be continuous and he must have made contributions for at least five years,which contributions may, upon his request approved by the Board, be deducted from his life annuity under such terms and conditions as the Board may prescribe: . . . In all cases no one shall be entitled to retirement benefit if his age is below fifty-two years or his total service is less than fifteen years. (b) Notwithstanding the provisions of the preceding paragraph, a member may be allowed to retire after rendering a total service of thirty years, regardless of age, the retiring employee to receive a monthly annuity for life, but the benefits for service rendered after June sixteen, nineteen hundred and fifty-one, shall be whatever amount of annuity can be purchased by the accumulated government and personal contributions to the credit of a member plus interest allowed by the system on the date of retirement. Said annuity shall be computed in accordance with the mortality table and the rate of interest adopted by the system. This benefit for service rendered prior to June sixteen, nineteen hundred and fifty-one as provided in section eleven (A) of this Act. (c) Retirement is likewise allowed to any official or employee, appointive or elective, regardless of ageand employment status, who has rendered a total of at least twenty years of service, the last three years of which are continuous. The benefit shall, in addition to the return of his personal contributions with interest compounded monthly and the payment of the corresponding employer's premiums described in subsection (a) of Section five hereof, without interest, be only a gratuity equivalent to one month's salary for every year of the first twenty years of service, plus one and one-half month's salary of every years of service over twenty but below thirty years and two month's salary for every year of service over thirty years in case of employees based on the highest rate received and in case of elected officials on the rates of pay as provided by law. This gratuity us payable by the employer or officer concerned which is hereby authorized to provide the necessary appropriation or pay the same from any unexpended items of appropriations or savings in its appropriations. Officials and employees retired under this Act shall be entitled to the commutation of the unused vacation and sick leave, based on the highest rate received, which they may have to their credit at the time of retirement. xxx xxx xxx (e) Retirement shall be automatic and compulsory at the age of sixty-five years with lump sum payment of present value of annuity for the first five years and future annuity to be paid monthly, and future annuity to be paid monthly, and future annuity to be paid monthly, and other benefits given to a compulsory retired member as provided for in Republic Act Number Six hundred and sixty as amended, if he has completed fifteen years of service and if he has not been separated from the service during the last three years of service prior to retirement; otherwise he shall be allowed to continue in the service until he shall have completed the required length of service, unless he is otherwise eligible for disability retirement. This paragraph shall not apply to elective officials and constitutional officers whose tenure of office is guaranteed. Upon specific approval of the President of the Philippines, the President of the Senate, the Speaker of the House of Representatives or the Chief Justice of the Supreme Court, as the case may be, an employee may be allowed to continue to serve in the executive, legislative or judicial branch of the government after the age of sixtyfive years if he possesses special qualifications and the corresponding Department Secretary certifies in writing that his services are needed. The automatic and compulsory retirement age for members of the judiciary shall be seventy years under the conditions and with all the benefits provided for in the next preceding paragraph. If a member exercises the option to retire pursuant to the provisions of Subsection (a) above at age sixty-three years, he shall likewise be entitled to all the benefits provided for in the first paragraph of this subsection. If the option is exercised at age sixty or over but below sixty-three years, the retiree shall be entitled to a lump sum payment of present value of annuity for the first three years, with the balance of the five-year guaranteed annuity payable in lump sum upon reaching the age of sixty-three years, and

future annuity to be paid monthly, in addition to other benefits provided for in Republic Act Numbered Six hundred and sixty, as amended. It shall be the duty of the employer concerned to notify each employee under its direction of the date of his automatic separation from the service at least sixty days in advance thereof. xxx xxx xxx 2 (Emphasis supplied) Petitioners do not disputed the fact that private respondent Manapat had, at the time of his second retirement on 27 December 1989, rendered a total of thirty-five (35) years of government service, with the result that he had complied with the requirement for retirement under each and every one of the four (4) modes of retirement provided in Section 12 of C.A. No. 186 as amended, quoted above, to wit: Section 12(a) 30 years of government service and attainment of age 57 years; 12(b) 30 years of government service "regardless of age;" 12(c) 20 years of government service "regardless of age;" and 12(e) 15 years of government service and attainment of age 65 years. Petitioners, however, insist that a government employee who has reached the compulsory retirement age of sixty-five (65) years, with at least fifteen (15) years of service in the government, has no choice save to retire under the provisions of Section 12(e) of C.A. No. 186 as amended (i.e., R.A. No. 660), retirement thereunder being "automatic and compulsory." The Court is unable to agree. While Section 12(e) of C.A. No. 186 as amended provides that "[r]etirement shall be automatic and compulsory at the age of 65 years," there is nothing in the statute to suggest that a government employee who, like private respondent Manapat, happens to satisfy the requirements not only of Section 12(e). but also Section 12(a), 12(b) and 12(c), must necessarily retire under Section 12(e). We find it very difficult to understand why a government employee who reaches the compulsory retirement age of sixty-five (65) but who has served a total, not of fifteen (15) years (the minimum required under 12[e]) but rather thirty-five (35) years (i.e., more than the years of service specified under 12[a], 12[b] and 12[c]), should be regarded as deprived of the right to retire under 12(c) (i.e., R.A. No. 1616 as amended), where the required number of years of services is only twenty (20). The interpretation urged by petitioners is conspicuously at war with the basic policy purpose of C.A. No. 186 as amended by R.A. No. 1616 which is, of course, to create an added incentive for qualified government employees to remain in the service of the government. The basic principles for the construction of statutes tell us that a statute must be read in such a way as to give effect to the purpose projected in the statute. Under this principle of effectiveness, retirement statutes, in case of a real as distinguished from a merely ostensible doubt or ambiguity, must be so construed as to give meaning and effect to their humanitarian purposes and so as reasonably to benefit employees who had opted to stay in the services of the government for so many years. 3 Thus, we read Section 12(c) as applicable in respect of private respondent Manapat who had complied with the requirement of that subsection of at least twenty (20) years of service. The benefits of Section 12(c) are, under its express terms, available to anyone who shall have rendered at least twenty (20) years of service, "regardless of [the] age" reached by the retiree at the time of his retirement. We agree, therefore, with the respondent Court of Appeals which held that Section 12(e) of C.A.. No. 186 as amended "cannot and should not be construed as limiting the mode of retirement of [a] government employee who was has reached the age of 65 years:" This provision of law . . . is mandatory only [in respect of] those who have reached the age of [sixty -five] 65 years and have rendered at least fifteen [15] years of government service but not [in respect of] those who have rendered at least twenty (20) years of service. For, in the latter case, the retiree is given the option to retire under the provisions of Republic Act No. 1616 [i.e. s. 12 (c), C.A. No. 186], amending Commonwealth Act No. 186. And this is true regardless of the age of the retiree. . . . xxx xxx xxx The enactment of Republic Act No. 1616 is exactly intended to provide for two [2] other modes of retirement, and these are: (1) retirement after rendering a total service of thirty (30) years, regardless of age;

(2) retirement after rendering at least twenty (20) years of service, regardless of age; It is crystal clear, therefore, that a retiree, regardless of age, that is, whether or not he is 65 [sixty-five] years at the time of his retirement, for as long as he has rendered at least twenty (20) years of service or has rendered a total service of thirty (30) years, can retire under the provisions of Republic Act No. 1616. 4 (Emphasis supplied) We should also note that the phrase "regardless of age" found in Section 12(c) becomes particularly meaningful when it is recalled that Section 12(e), which declares that "retirement shall be automatic and compulsory at age 65," nonetheless gives an employee who has already reached sixty-five (65) years of age the option to remain in the government service in order to complete the 15-year minimum service requirement. 5 We consider, therefore, and so hold that an employee who shall have satisfied the requirements for retirement under more than one (1) subsection of Section 12 of C.A. No. 186 as amended is entitled to choose the subsection (whose requirement he has complied with and) under which he shall retire. The option of retiring under Section 12(c) or Section 12(e), in the circumstances of this case, belongs to private respondent Manapat and notto his employer, the City of Manila. That option cannot be taken away from the retiree by the employer, which is precisely what petitioners purported to do through the medium of the "policy" of restricting the options open to a retiree who has reached the age of sixty-five (65) to retirement under Section 12(e) even though such retiree simultaneously satisfies the requisites of retirement under some other subsection or subsections of Section 12. To sustain the petitioners' alleged "policy" would in effect constitute an amendment of the terms of the applicable statute something which neither this Court nor petitioners are authorized to do. We turn to the second issue of whether or not petitioners may be compelled by mandamus to pay the retirement benefit due to private respondent Manapat notwithstanding the lack of funds for that purpose asserted by petitioners. The application for retirement of Manapat having been approved and adjusted under the provisions of Section 12(c), C.A. No. 186 as amended, it became ministerial on the part of petitioner City of Manila as employer of Manapat to provide the funds necessary to pay the latter's lawfully accrued retirement gratuity. We expressly reject the argument of petitioners that the funding of private respondent's retirement gratuity under Section 12(c) is "discretionary" on the part of such employer. The fact that petitioner City of Manila may have no item in its General Appropriation Ordinance specifically earmarking an amount of P486,634.84 for payment to Mr. Manapat, presents no legal obstacle. In Baldivia, et al. v.Lota, etc., 6 the petitioners were denied payment of their terminal leave pay because allegedly the Municipality of Taal, Batangas, had no budget or appropriation ordinance setting aside the sums necessary to pay petitioners' terminal leave pay. This Court, through the then Mr. Justice and later Mr. Chief Justice Roberto Concepcion held that: Indeed, respondent could have, and should have, either included the claim of petitioners herein in the general budget he is bound to submit, pursuant to section 2295 of the Revised Administrative Code, or prepared a special budget for said claim, and urged the municipal council to appropriate the sum necessary therefor. In any event, if the municipal mayor fails or refuses to make the necessary appropriation, petitioners may bring an action against the municipality for the recovery of what is due them and after securing a judgment therefor, seek a writ of mandamus against the municipal council and the municipal mayor to compel the enactment of approval of the appropriation ordinance necessary therefor. 7 (Emphasis supplied) In the more recent case of Municipality of Makati v. Court of Appeals, 8 the Court went a little further and held thatmandamus was available to compel, not only the enactment and approval of the necessary appropriation ordinance but also the corresponding payment of municipal funds therefor: Nevertheless, this is not to say that private respondent and [PNB] are left with no legal recourse. Where a municipality fails or refuses, without justifiable reason, to effect payment of a final money judgment rendered against it, the claimant may avail of the remedy of mandamus in order to compel the enactment and approval of the necessary appropriation ordinance, and the corresponding disbursement of municipal funds therefor. (See Viuda De Tan Toco v. The Municipal Council of Iloilo, 49 Phil. 52 [1926]; Baldivia v. Lota, 107 Phil. 1099 [1960]; Yuviengco v. Gonzales, 108 Phil. 247 [1960]). 9 In fact, however, the Court of Appeals has pointed out that the City of Manila does have an appropriation authorizing payment of retirement claims like those of Mr. Manapat: Even assuming, for the sake of argument, that payment of retirement gratuities under R.A. 1616 is indeed subject to the availability of funds, still respondents-appellees cannot escape or without payment to petitioner-appellant for the following reason:

In 1990, the City of Manila had an annual appropriation for retirement benefits in the amount of P14,000,000.00(Exhibit "J-1"). In view of its failure to enact a new budget for the fiscal year 1991 (the year this case was filed),its budget for 1990 was considered reenacted, hence, the aforementioned appropriation for retirement purpose was deemed in force and effect at the time of the filling of this case on January 22, 1991. Therefore, respondents-appellees cannot claim that the City of Manila had no available funds for the purpose. And this is especially true considering that the said appropriation cannot be used for any other purpose, the same being classified as "Statutory and Contractual Obligation" (Exhibit "J-2"), and the assurance of the City Budget Officer, Eufemia Domiguez, to indicate the source of funds to pay petitioner-appellant's claim provided only that his (petitioner-appellant) "request will be acted upon favorably by the foregoing officials." (Exhibit "G")." 10(Emphasis supplied) We must, moreover, underscore that Section 12(c), C.A. No. 186 as amended, in fact effectively dispenses with the need for enacting an ordinance specifically appropriating private respondent Manapat's retirement pay, or inserting an appropriate item to that effect in a General Appropriation Ordinance of the City of Manila. For Section 12(c) provides in part as follows: This gratuity is payable by the employer or officer concerned which is hereby authorized to provide the necessary appropriation or pay the same from any unexpended items of appropriations or savings of its appropriations. . . . .(Emphasis supplied) In other words, Section 12(c) itself furnishes statutory authority to petitioners to pay Manapat's claim out of any savings the City of Manila may have from its other appropriations. One final point. The Court of Appeals awarded private respondent the amount of P30,000.00 as moral damages and another P30,000.00 as attorney's fees. Viewed as a whole, the record does not show, in a clear and convincing manner, the evident bad faith and arbitrariness on the part of petitioners which generate liability for moral damages; we therefore delete this award. Upon the other hand, the award of attorney's fees is entirely just and equitable since petitioners' act or omission compelled private respondent Manapat, a life-long government employee, to have recourse to litigation to protect his right to retirement benefits. 11 WHEREFORE, the Petition for Review is hereby DENIED for lack of merit and the questioned Decision of the respondent Court of Appeals is hereby AFFIRMED, expected that the award of P30,000.00 "as and for moral damages" is hereby DELETED. Costs against petitioners. SO ORDERED.

G.R. No. L-42935

February 15, 1935

FELIPE REGALADO, petitioner, vs. JOSE YULO, Secretary of Justice, JUAN G. LESACA, Judge of First Instance of Albay, and ESTEBAN T. VILLAR, respondents. L.R. Pea for petitioner. Office of the Solicitor-General Hilado for respondents. Respondent Villar in his own behalf. MALCOLM, J.: This is an action of quo warranto originally brought in this court to determine the respective rights of the petitioner Felipe Regalado and one of the respondents, Esteban T. Villar, to the office of justice of the peace of Malinao, Albay. The issue in the case is whether or not under the provisions of section 203 of the Administrative Code, as amended by Act No. 3899, the justices of the peace and auxiliary justices of the peace appointed prior to the approval of the last mentioned Act who reached the age of sixty-five years after said Act took effect shall cease to hold office upon reaching the age of sixty-five years. The facts as stipulated are principally the following: Felipe Regalado qualified for the office of justice of the peace of Malinao, Albay, on April 12, 1906. On September 13, 1934, Regalado became sixty-five years of age. As a consequence, shortly thereafter, the judge of first instance of Albay, acting in accordance with instructions from the Secretary of Justice, designated Esteban T. Villar, justice of the peace of Tabaco, Albay, to act as justice of the peace of Malinao, Albay. Regalado surrendered the office to Villar under protest. On December 17, 1934, Villar qualified as justice of the peace of Malinao, Albay, and entered upon the discharge of the duties of the office.

The text of section 203 of the Administrative Code, as amended by Act No. 3899, reads in Spanish, the language in which this Act was enacted by the Philippine Legislature, as follows: ART. 203. Nombramiento y distribucion de jueces de paz. El Gobernador General nombrara, con el consejo y consentimiento del Senado de Filipinas, un juez de paz y un juez de paz auxilizr para la Ciudad de Baguio y para cada municipio, township, y distrito municipal da las Islas Filipinas y si el interes publico asi lo exigiere para cualquier otra division politica de menos importancia y territorio no organizado en dichas Islas:Entendiendose, Que los jueces de paz y jueces de paz auxiliares seran nombrados para servir cumplir sesenta y cinco aos de edad: Entendiendose, ademas, Que los actuales jueces de paz y jueces de paz auxiliares que al tiempo de la vigencia de esta Ley hayan cumplido sesenta y cinco aos de edad, cesaran el primero de enero de mil novecientos treinta y tres en sus cargos; y el Gobernador General, con el consejo y consentimiento del Senado de Filipinas, hara nuevos nombramientos para cubrir las vacantes que habran de ocurir por ministerio de esta Ley. The English version of the same codal section, as amended, reads as follows: SEC. 203. Appointment and distribution of justices of the peace. One justice of the peace and one auxiliary justice of the peace shall be appointed by the Governor-General, with the advise and consent of the Philippine Senate, for the City of Baguio, and for each municipality, township, and municipal district in the Philippine Islands, and if the public interests shall so require, for any other minor political division or unorganized territory in said Islands: Provided, That justices and auxiliary justices of the peace shall be appointed to serve until they have reached the age of sixty-five years: Provided, further, That the present justices and auxiliary justices of the peace who shall, at the time this Act takes effect, have completed sixty-five years of age, shall automatically cease to hold office on January first, nineteen hundred and thirty-three; and the Governor-General, with the advise and consent of the Philippine Senate, shall make new appointments to cover the vacancies occurring by operation of this Act. Petitioner Regalado insists that the law is clear and accordingly needs no interpretation. The meaning of the law according to him is that only those justice of the peace and auxiliary justices of the peace ceased to hold office who had completed sixty-five years of age on or before November 16, 1931, when Act No. 3899 took effect. On the other hand, the Solicitor-General, as attorney for the respondents, admits that the provisions of the second proviso added to section 203 of the Administrative Code by Act No. 3899, are not very specific, but that according to the real intention of the law the only sensible and proper construction that could be place on the proviso in question in that under its provisions all justices of the peace and auxiliary justices of the peace, whether appointed prior to the approval of the Act or subsequent thereto, who had completed the age of sixty-five years of age at the time of the approval of the Act, and those who shall complete that age thereafter, shall cease to hold office, the former on January 1, 1933, and the latter at the time they complete that age. All are agreed that the language which should prevail in the interpretation of Act No. 3899 is Spanish, but that the English text may be consulted to explain the Spanish. The English text is deficient in that it includes the word "automatically", the equivalent of which does not appear in the Spanish. Also, in the Administrative Code containing a compilation of section 203, as amended, the word "office" was omitted after the word "hold". Finally, the spanish uses the term "al teimpo de la vigencia de esta ley", translated into English as "at the time this Act takes effect". But the Solicitor-General insists that the equivalent of the term "al" is "at" and that "at" can be construed as equivalent to "during". The Solicitor-General properly invites attention to the history of the law and from that history would deduce the legislative intention to be effectuated. Let us briefly notice this point. Originally judges of first instance and justices of the peace had no age limits on their tenures of office. Eventually, however, the Philippine Legislature enacted Act No. 2347. That law not only provided that judges of first instance shall serve until they have reached the age of sixty-five years, but it further provided that "... the present judges of Courts of First Instance ... vacate their positions on the taking effect of this Act: and the Governor-General, with the advice and consent of the Philippine Commission, shall make new appointments of judges of the Courts of First Instance ... ." This law was held valid. (Chanco vs. Imperial [1916], 34 Phil., 329.) Subsequently section 203 of the Administrative Code, relating to justices of the peace, was amended by section 1 of Act No. 3107 by adding at the end thereof the following proviso: "... Provided, That justices and auxiliary justices of the peace shall be appointed to serve until they have reached the age of sixty-five years." It was held that the law should be given prospective effect only and was not applicable to justices and auxiliary justices of the peace appointed before it went into effect. (Segovia vs. Noel [1925], 47 Phil., 543.) Thereafter the matter again came before the Philippine Legislature and apparently it was in the mind of certain members of the Legislature to make the law fixing the age limit for justices of the peace retroactive in nature. At least the bill as introduced in the Senate, and providing: "Entendiendose, ademas, Que los actuales jueces de paz y jueces de paz auxiliares que al tiempo de la vigencia de esta Ley hayan cumplido sesenta y cinco aos de edad, cesaran automaticamente en sus cargos; y el Gobernador General, con el consejo y consentimiento del Senado de Filipinas, hara nuevos nombramientos para cubrir las vacantes que habran de ocurrir por ministerio de esta ley," appears to have had this purpose both because of the langage used and because of what can be gleaned from the debates on the bill while it was under consideration in the Senate. But when the bill left the Philippine Legislature it was in a different form, for the word "automaticamente" had been omitted and instead there was to be found the words "el primero de enero de mil novecientos treinta y tres". The Solicitor-General finally points out that the Secretary of Justice has consistently interpreted the proviso in question as meaning, that all justices of the peace and auxiliary justices of the peace no matter when appointed who had completed the age of sixty-five

years prior to the approval of the law and those who shall complete that age thereafter, shall cease to hold office upon their attaining that age. It is of course a cardinal rule that the practical construction of a statute by the department whose duty it is to carry it into execution is entitled to great weight. Nevertheless the court is not bound by such construction and the rule does not apply in cases where the construction is not doubtful. The fundamental purpose in enacting Act No. 3899, it is argued, was to correct the phraseology of the first proviso to section 203 of the Administrative Code added thereto by Act No. 3107, and to place justices of the peace and auxiliary justices of the peace on the same footing as regards their cessation from office by reason of age. We are asked for effectuate this legislative purpose. We would accede if that result was obtainable by any logical construction of the law whether strict or liberal. But we cannot reach that result when to do so compels us to rewrite a law and to insert words or phrases not found in it. If the court should do that it would pass beyond the bounds of judicial power to usurp legislative power. The intent of the Legislature to be ascertained and enforced is the intent expressed in the words of the statute. If legislative intent is not expressed in some appropriate manner, the courts cannot by interpretation speculate as to an intent and supply a meaning not found in the phraseology of the law. In other words, the courts cannot assume some purpose in no way expressed and then construe the statute to accomplish this supposed intention. Delving a little more deeply into the meaning of the law as applied to the case of the petitioner, at the time Act No. 3899 took effect he was one of the "actuales jueces de paz" (present justices of the peace). Giving the term "al tiempo de la vigencia de la ley" the ordinary meaning of "at the time this Act takes effect," which was on November 16, 1931, on that date the petitioner was not sixtyfive years of age. Proceeding further, the phrase "hayan cumplido se senta cinco aos de edad", appearing in English as "have completed sixty-five years of age", is of the past tense and could not regularly be taken to contemplate the future. Finally the phrase "el primero de enero de mil novecientos treinta y tres", in English "on January first nineteen hundred and thirty-three", is also a date in the past, for on that date the petitioner had not yet reached the age of sixty-five. Before we conclude, let us again return to the consideration of the law and see if it would be possible under any logical interpretation, to give the law the meaning which the Government insists it should have. Supposing we give to the phrase "al tiempo de la vigencia de esta ley" the unusual meaning of "within the time this Act is effective", but having done so, we then reach the barrier that the petitioner within the time this Act is effective must have completed sixty-five years of age and cease to hold office on January 1, 1933. The petitioner having become sixty-five years of age on September 13, 1934, could not be included under a law which required justices of the peace sixty-five years of age to cease to hold office on January 1, 1933. For the reasons given, we are of the opinion that the natural and reasonable meaning of the language used in Act No. 3899 leaves room for no other deduction than that a justice of the peace appointed prior to the approval of the Act and who completed sixty-five years of age on September 13, 1934, subsequent to the approval of the Act, which was on November 16, 1931, and who by the law was required to cease to hold office on January 1, 1933, is not affected by the said Act. Accordingly it is our judgment that the respondent Esteban T. Villar be ousted from the office of justice of the peace of Malinao, Albay, and that the petitioner Felipe Regalado be placed in possession of the same. So ordered, without special pronouncement as to the costs.