G.R. No. L-19650 September 29, 1966CALTEX (PHILIPPINES), INC., petitioner-appellee, vs.

ENRICO PALOMAR, in his capacity as THE POSTMASTER GENERAL, respondent-appellant. In the year 1960 the Caltex (Philippines) Inc. (hereinafter referred to as Caltex) conceived and laid the groundwork for a promotional scheme calculated to drum up patronage for its oil products. Denominated "Caltex Hooded Pump Contest", it calls for participants therein to estimate the actual number of liters a hooded gas pump at each Caltex station will dispense during a specified period. Employees of the Caltex (Philippines) Inc., its dealers and its advertising agency, and their immediate families excepted, participation is to be open indiscriminately to all "motor vehicle owners and/or licensed drivers". For the privilege to participate, no fee or consideration is required to be paid, no purchase of Caltex products required to be made. Entry forms are to be made available upon request at each Caltex station where a sealed can will be provided for the deposit of accomplished entry stubs. A three-staged winner selection system is envisioned. At the station level, called "Dealer Contest", the contestant whose estimate is closest to the actual number of liters dispensed by the hooded pump thereat is to be awarded the first prize; the next closest, the second; and the next, the third. Prizes at this level consist of a 3-burner kerosene stove for first; a thermos bottle and a Ray-O-Vac hunter lantern for second; and an Everready Magnet-lite flashlight with batteries and a screwdriver set for third. The first-prize winner in each station will then be qualified to join in the "Regional Contest" in seven different regions. The winning stubs of the qualified contestants in each region will be deposited in a sealed can from which the first-prize, secondprize and third-prize winners of that region will be drawn. The regional first-prize winners will be entitled to make a three-day all-expensespaid round trip to Manila, accompanied by their respective Caltex dealers, in order to take part in the "National Contest". The regional second-prize and third-prize winners will receive cash prizes of P500 and P300, respectively. At the national level, the stubs of the seven regional first-prize winners will be placed inside a sealed can from which the drawing for the final first-prize, second-prize and third-prize winners will be made. Cash prizes in store for winners at this final stage are: P3,000 for first; P2,000 for second; Pl,500 for third; and P650 as consolation prize for each of the remaining four participants. Foreseeing the extensive use of the mails not only as amongst the media for publicizing the contest but also for the transmission of communications relative thereto, representations were made by Caltex with the postal authorities for the contest to be cleared in advance for mailing, having in view sections 1954(a), 1982 and 1983 of the Revised Administrative Code, the pertinent provisions of which read as follows: SECTION 1954. Absolutely non-mailable matter. No matter belonging to any of the following classes, whether sealed as first-class matter or not, shall be imported into the Philippines through the mails, or to be deposited in or carried by the mails of the Philippines, or be delivered to its addressee by any officer or employee of the Bureau of Posts: Written or printed matter in any form advertising, describing, or in any manner pertaining to, or conveying or purporting to convey any information concerning any lottery, gift enterprise, or similar scheme depending in whole or in part upon lot or chance, or any scheme, device, or enterprise for obtaining any money or property of any kind by means of false or fraudulent pretenses, representations, or promises. "SECTION 1982. Fraud orders.Upon satisfactory evidence that any person or company is engaged in conducting any lottery, gift enterprise, or scheme for the distribution of money, or of any real or personal property by lot, chance, or drawing of any kind, or that any person or company is conducting any scheme, device, or enterprise for obtaining money or property of any kind through the mails by means of false or fraudulent pretenses, representations, or promises, the Director of Posts may instruct any postmaster or other officer or

employee of the Bureau to return to the person, depositing the same in the mails, with the word "fraudulent" plainly written or stamped upon the outside cover thereof, any mail matter of whatever class mailed by or addressed to such person or company or the representative or agent of such person or company. SECTION 1983. Deprivation of use of money order system and telegraphic transfer service.The Director of Posts may, upon evidence satisfactory to him that any person or company is engaged in conducting any lottery, gift enterprise or scheme for the distribution of money, or of any real or personal property by lot, chance, or drawing of any kind, or that any person or company is conducting any scheme, device, or enterprise for obtaining money or property of any kind through the mails by means of false or fraudulent pretenses, representations, or promise, forbid the issue or payment by any postmaster of any postal money order or telegraphic transfer to said person or company or to the agent of any such person or company, whether such agent is acting as an individual or as a firm, bank, corporation, or association of any kind, and may provide by regulation for the return to the remitters of the sums named in money orders or telegraphic transfers drawn in favor of such person or company or its agent. The overtures were later formalized in a letter to the Postmaster General, dated October 31, 1960, in which the Caltex, thru counsel, enclosed a copy of the contest rules and endeavored to justify its position that the contest does not violate the anti-lottery provisions of the Postal Law. Unimpressed, the then Acting Postmaster General opined that the scheme falls within the purview of the provisions aforesaid and declined to grant the requested clearance. In its counsel's letter of December 7, 1960, Caltex sought a reconsideration of the foregoing stand, stressing that there being involved no consideration in the part of any contestant, the contest was not, under controlling authorities, condemnable as a lottery. Relying, however, on an opinion rendered by the Secretary of Justice on an unrelated case seven years before (Opinion 217, Series of 1953), the Postmaster General maintained his view that the contest involves consideration, or that, if it does not, it is nevertheless a "gift enterprise" which is equally banned by the Postal Law, and in his letter of December 10, 1960 not only denied the use of the mails for purposes of the proposed contest but as well threatened that if the contest was conducted, "a fraud order will have to be issued against it (Caltex) and all its representatives". Caltex thereupon invoked judicial intervention by filing the present petition for declaratory relief against Postmaster General Enrico Palomar, praying "that judgment be rendered declaring its 'Caltex Hooded Pump Contest' not to be violative of the Postal Law, and ordering respondent to allow petitioner the use of the mails to bring the contest to the attention of the public". After issues were joined and upon the respective memoranda of the parties, the trial court rendered judgment as follows: In view of the foregoing considerations, the Court holds that the proposed 'Caltex Hooded Pump Contest' announced to be conducted by the petitioner under the rules marked as Annex B of the petitioner does not violate the Postal Law and the respondent has no right to bar the public distribution of said rules by the mails. The respondent appealed. The parties are now before us, arrayed against each other upon two basic issues: first, whether the petition states a sufficient cause of action for declaratory relief; and second, whether the proposed "Caltex Hooded Pump Contest" violates the Postal Law. We shall take these up in seriatim. 1. By express mandate of section 1 of Rule 66 of the old Rules of Court, which was the applicable legal basis for the remedy at the time it was invoked, declaratory relief is available to any person "whose rights are affected by a statute . . . to determine any question of construction or validity arising under the . . . statute and for a declaration of his rights thereunder" (now section 1, Rule 64, Revised Rules of Court). In amplification, this Court, conformably to established jurisprudence on the matter, laid down certain conditions sine qua nontherefor, to wit:

(1) there must be a justiciable controversy; (2) the controversy must be between persons whose interests are adverse; (3) the party seeking declaratory relief must have a legal interest in the controversy; and (4) the issue involved must be ripe for judicial determination (Tolentino vs. The Board of Accountancy, et al., G.R. No. L-3062, September 28, 1951; Delumen, et al. vs. Republic of the Philippines, 50 O.G., No. 2, pp. 576, 578-579; Edades vs. Edades, et al., G.R. No. L-8964, July 31, 1956). The gravamen of the appellant's stand being that the petition herein states no sufficient cause of action for declaratory relief, our duty is to assay the factual bases thereof upon the foregoing crucible. As we look in retrospect at the incidents that generated the present controversy, a number of significant points stand out in bold relief. The appellee (Caltex), as a business enterprise of some consequence, concededly has the unquestioned right to exploit every legitimate means, and to avail of all appropriate media to advertise and stimulate increased patronage for its products. In contrast, the appellant, as the authority charged with the enforcement of the Postal Law, admittedly has the power and the duty to suppress transgressions thereof particularly thru the issuance of fraud orders, under Sections 1982 and 1983 of the Revised Administrative Code, against legally nonmailable schemes. Obviously pursuing its right aforesaid, the appellee laid out plans for the sales promotion scheme hereinbefore detailed. To forestall possible difficulties in the dissemination of information thereon thru the mails, amongst other media, it was found expedient to request the appellant for an advance clearance therefor. However, likewise by virtue of his jurisdiction in the premises and construing the pertinent provisions of the Postal Law, the appellant saw a violation thereof in the proposed scheme and accordingly declined the request. A point of difference as to the correct construction to be given to the applicable statute was thus reached. Communications in which the parties expounded on their respective theories were exchanged. The confidence with which the appellee insisted upon its position was matched only by the obstinacy with which the appellant stood his ground. And this impasse was climaxed by the appellant's open warning to the appellee that if the proposed contest was "conducted, a fraud order will have to be issued against it and all its representatives." Against this backdrop, the stage was indeed set for the remedy prayed for. The appellee's insistent assertion of its claim to the use of the mails for its proposed contest, and the challenge thereto and consequent denial by the appellant of the privilege demanded, undoubtedly spawned a live controversy. The justiciability of the dispute cannot be gainsaid. There is an active antagonistic assertion of a legal right on one side and a denial thereof on the other, concerning a real not a mere theoretical question or issue. The contenders are as real as their interests are substantial. To the appellee, the uncertainty occasioned by the divergence of views on the issue of construction hampers or disturbs its freedom to enhance its business. To the appellant, the suppression of the appellee's proposed contest believed to transgress a law he has sworn to uphold and enforce is an unavoidable duty. With the appellee's bent to hold the contest and the appellant's threat to issue a fraud order therefor if carried out, the contenders are confronted by the ominous shadow of an imminent and inevitable litigation unless their differences are settled and stabilized by a tranquilizing declaration (Pablo y Sen, et al. vs. Republic of the Philippines, G.R. No. L-6868, April 30, 1955). And, contrary to the insinuation of the appellant, the time is long past when it can rightly be said that merely the appellee's "desires are thwarted by its own doubts, or by the fears of others" which admittedly does not confer a cause of action. Doubt, if any there was, has ripened into a justiciable controversy when, as in the case at bar, it was translated into a positive claim of right which is actually contested (III Moran, Comments on the Rules of Court, 1963 ed., pp. 132-133, citing: Woodward vs. Fox West Coast Theaters, 36 Ariz., 251, 284 Pac. 350). We cannot hospitably entertain the appellant's pretense that there is here no question of construction because the said appellant "simply applied the clear provisions of the law to a given set of facts as embodied in the rules of the contest", hence, there is no room for declaratory relief. The infirmity of this pose lies in the fact that it proceeds from the assumption that, if the circumstances here presented, the construction of the legal provisions can be divorced from the matter of their application to the appellee's contest. This is not feasible. Construction, verily, is the art or process of discovering and expounding the meaning and intention of the authors of the law with respect to its application to a given case, where that intention

is rendered doubtful, amongst others, by reason of the fact that the given case is not explicitly provided for in the law (Black, Interpretation of Laws, p. 1). This is precisely the case here. Whether or not the scheme proposed by the appellee is within the coverage of the prohibitive provisions of the Postal Law inescapably requires an inquiry into the intended meaning of the words used therein. To our mind, this is as much a question of construction or interpretation as any other. Nor is it accurate to say, as the appellant intimates, that a pronouncement on the matter at hand can amount to nothing more than an advisory opinion the handing down of which is anathema to a declaratory relief action. Of course, no breach of the Postal Law has as yet been committed. Yet, the disagreement over the construction thereof is no longer nebulous or contingent. It has taken a fixed and final shape, presenting clearly defined legal issues susceptible of immediate resolution. With the battle lines drawn, in a manner of speaking, the propriety nay, the necessity of setting the dispute at rest before it accumulates the asperity distemper, animosity, passion and violence of a full-blown battle which looms ahead (III Moran, Comments on the Rules of Court, 1963 ed., p. 132 and cases cited), cannot but be conceded. Paraphrasing the language in Zeitlin vs. Arnebergh 59 Cal., 2d., 901, 31 Cal. Rptr., 800, 383 P. 2d., 152, cited in 22 Am. Jur., 2d., p. 869, to deny declaratory relief to the appellee in the situation into which it has been cast, would be to force it to choose between undesirable alternatives. If it cannot obtain a final and definitive pronouncement as to whether the anti-lottery provisions of the Postal Law apply to its proposed contest, it would be faced with these choices: If it launches the contest and uses the mails for purposes thereof, it not only incurs the risk, but is also actually threatened with the certain imposition, of a fraud order with its concomitant stigma which may attach even if the appellee will eventually be vindicated; if it abandons the contest, it becomes a self-appointed censor, or permits the appellant to put into effect a virtual fiat of previous censorship which is constitutionally unwarranted. As we weigh these considerations in one equation and in the spirit of liberality with which the Rules of Court are to be interpreted in order to promote their object (section 1, Rule 1, Revised Rules of Court) which, in the instant case, is to settle, and afford relief from uncertainty and insecurity with respect to, rights and duties under a law we can see in the present case any imposition upon our jurisdiction or any futility or prematurity in our intervention. The appellant, we apprehend, underrates the force and binding effect of the ruling we hand down in this case if he believes that it will not have the final and pacifying function that a declaratory judgment is calculated to subserve. At the very least, the appellant will be bound. But more than this, he obviously overlooks that in this jurisdiction, "Judicial decisions applying or interpreting the law shall form a part of the legal system" (Article 8, Civil Code of the Philippines). In effect, judicial decisions assume the same authority as the statute itself and, until authoritatively abandoned, necessarily become, to the extent that they are applicable, the criteria which must control the actuations not only of those called upon to abide thereby but also of those in duty bound to enforce obedience thereto. Accordingly, we entertain no misgivings that our resolution of this case will terminate the controversy at hand. It is not amiss to point out at this juncture that the conclusion we have herein just reached is not without precedent. In Liberty Calendar Co. vs. Cohen, 19 N.J., 399, 117 A. 2d., 487, where a corporation engaged in promotional advertising was advised by the county prosecutor that its proposed sales promotion plan had the characteristics of a lottery, and that if such sales promotion were conducted, the corporation would be subject to criminal prosecution, it was held that the corporation was entitled to maintain a declaratory relief action against the county prosecutor to determine the legality of its sales promotion plan. In pari materia, see also: Bunis vs. Conway, 17 App. Div. 2d., 207, 234 N.Y.S. 2d., 435; Zeitlin vs. Arnebergh, supra; Thrillo, Inc. vs. Scott, 15 N.J. Super. 124, 82 A. 2d., 903. In fine, we hold that the appellee has made out a case for declaratory relief. 2. The Postal Law, chapter 52 of the Revised Administrative Code, using almost identical terminology in sections 1954(a), 1982 and 1983

thereof, supra, condemns as absolutely non-mailable, and empowers the Postmaster General to issue fraud orders against, or otherwise deny the use of the facilities of the postal service to, any information concerning "any lottery, gift enterprise, or scheme for the distribution of money, or of any real or personal property by lot, chance, or drawing of any kind". Upon these words hinges the resolution of the second issue posed in this appeal. Happily, this is not an altogether untrodden judicial path. As early as in 1922, in "El Debate", Inc. vs. Topacio, 44 Phil., 278, 283284, which significantly dwelt on the power of the postal authorities under the abovementioned provisions of the Postal Law, this Court declared that While countless definitions of lottery have been attempted, the authoritative one for this jurisdiction is that of the United States Supreme Court, in analogous cases having to do with the power of the United States Postmaster General, viz.: The term "lottery" extends to all schemes for the distribution of prizes by chance, such as policy playing, gift exhibitions, prize concerts, raffles at fairs, etc., and various forms of gambling. The three essential elements of a lottery are: First, consideration; second, prize; and third, chance. (Horner vs. States [1892], 147 U.S. 449; Public Clearing House vs. Coyne [1903], 194 U.S., 497; U.S. vs. Filart and Singson [1915], 30 Phil., 80; U.S. vs. Olsen and Marker [1917], 36 Phil., 395; U.S. vs. Baguio [1919], 39 Phil., 962; Valhalla Hotel Construction Company vs. Carmona, p. 233, ante.) Unanimity there is in all quarters, and we agree, that the elements of prize and chance are too obvious in the disputed scheme to be the subject of contention. Consequently as the appellant himself concedes, the field of inquiry is narrowed down to the existence of the element of consideration therein. Respecting this matter, our task is considerably lightened inasmuch as in the same case just cited, this Court has laid down a definitive yard-stick in the following terms In respect to the last element of consideration, the law does not condemn the gratuitous distribution of property by chance, if no consideration is derived directly or indirectly from the party receiving the chance, but does condemn as criminal schemes in which a valuable consideration of some kind is paid directly or indirectly for the chance to draw a prize. Reverting to the rules of the proposed contest, we are struck by the clarity of the language in which the invitation to participate therein is couched. Thus No puzzles, no rhymes? You don't need wrappers, labels or boxtops? You don't have to buy anything? Simply estimate the actual number of liter the Caltex gas pump with the hood at your favorite Caltex dealer will dispense from to , and win valuable prizes . . . ." . Nowhere in the said rules is any requirement that any fee be paid, any merchandise be bought, any service be rendered, or any value whatsoever be given for the privilege to participate. A prospective contestant has but to go to a Caltex station, request for the entry form which is available on demand, and accomplish and submit the same for the drawing of the winner. Viewed from all angles or turned inside out, the contest fails to exhibit any discernible consideration which would brand it as a lottery. Indeed, even as we head the stern injunction, "look beyond the fair exterior, to the substance, in order to unmask the real element and pernicious tendencies which the law is seeking to prevent" ("El Debate", Inc. vs. Topacio, supra, p. 291), we find none. In our appraisal, the scheme does not only appear to be, but actually is, a gratuitous distribution of property by chance. There is no point to the appellant's insistence that non-Caltex customers who may buy Caltex products simply to win a prize would actually be indirectly paying a consideration for the privilege to join the contest. Perhaps this would be tenable if the purchase of any Caltex

product or the use of any Caltex service were a pre-requisite to participation. But it is not. A contestant, it hardly needs reiterating, does not have to buy anything or to give anything of value.1awphl.nt Off-tangent, too, is the suggestion that the scheme, being admittedly for sales promotion, would naturally benefit the sponsor in the way of increased patronage by those who will be encouraged to prefer Caltex products "if only to get the chance to draw a prize by securing entry blanks". The required element of consideration does not consist of the benefit derived by the proponent of the contest. The true test, as laid down in People vs. Cardas, 28 P. 2d., 99, 137 Cal. App. (Supp.) 788, is whether the participant pays a valuable consideration for the chance, and not whether those conducting the enterprise receive something of value in return for the distribution of the prize. Perspective properly oriented, the standpoint of the contestant is all that matters, not that of the sponsor. The following, culled from Corpus Juris Secundum, should set the matter at rest: The fact that the holder of the drawing expects thereby to receive, or in fact does receive, some benefit in the way of patronage or otherwise, as a result of the drawing; does not supply the element of consideration. Griffith Amusement Co. vs. Morgan, Tex. Civ. App., 98 S.W., 2d., 844" (54 C.J.S., p. 849). Thus enlightened, we join the trial court in declaring that the "Caltex Hooded Pump Contest" proposed by the appellee is not a lottery that may be administratively and adversely dealt with under the Postal Law. But it may be asked: Is it not at least a "gift enterprise, or scheme for the distribution of money, or of any real or personal property by lot, chance, or drawing of any kind", which is equally prescribed? Incidentally, while the appellant's brief appears to have concentrated on the issue of consideration, this aspect of the case cannot be avoided if the remedy here invoked is to achieve its tranquilizing effect as an instrument of both curative and preventive justice. Recalling that the appellant's action was predicated, amongst other bases, upon Opinion 217, Series 1953, of the Secretary of Justice, which opined in effect that a scheme, though not a lottery for want of consideration, may nevertheless be a gift enterprise in which that element is not essential, the determination of whether or not the proposed contest wanting in consideration as we have found it to be is a prohibited gift enterprise, cannot be passed over sub silencio. While an all-embracing concept of the term "gift enterprise" is yet to be spelled out in explicit words, there appears to be a consensus among lexicographers and standard authorities that the term is commonly applied to a sporting artifice of under which goods are sold for their market value but by way of inducement each purchaser is given a chance to win a prize (54 C.J.S., 850; 34 Am. Jur., 654; Black, Law Dictionary, 4th ed., p. 817; Ballantine, Law Dictionary with Pronunciations, 2nd ed., p. 55; Retail Section of Chamber of Commerce of Plattsmouth vs. Kieck, 257 N.W., 493, 128 Neb. 13; Barker vs. State, 193 S.E., 605, 56 Ga. App., 705; Bell vs. State, 37 Tenn. 507, 509, 5 Sneed, 507, 509). As thus conceived, the term clearly cannot embrace the scheme at bar. As already noted, there is no sale of anything to which the chance offered is attached as an inducement to the purchaser. The contest is open to all qualified contestants irrespective of whether or not they buy the appellee's products. Going a step farther, however, and assuming that the appellee's contest can be encompassed within the broadest sweep that the term "gift enterprise" is capable of being extended, we think that the appellant's pose will gain no added comfort. As stated in the opinion relied upon, rulings there are indeed holding that a gift enterprise involving an award by chance, even in default of the element of consideration necessary to constitute a lottery, is prohibited (E.g.: Crimes vs. States, 235 Ala 192, 178 So. 73; Russell vs. Equitable Loan & Sec. Co., 129 Ga. 154, 58 S.E., 88; State ex rel. Stafford vs. Fox-Great Falls Theater Corporation, 132 P. 2d., 689, 694, 698, 114 Mont. 52). But this is only one side of the coin. Equally impressive authorities declare that, like a lottery, a gift enterprise comes within the prohibitive statutes only if it exhibits the tripartite elements of prize, chance and consideration (E.g.: Bills vs. People, 157 P. 2d., 139, 142,

113 Colo., 326; D'Orio vs. Jacobs, 275 P. 563, 565, 151 Wash., 297; People vs. Psallis, 12 N.Y.S., 2d., 796; City and County of Denver vs. Frueauff, 88 P., 389, 394, 39 Colo., 20, 7 L.R.A., N.S., 1131, 12 Ann. Cas., 521; 54 C.J.S., 851, citing: Barker vs. State, 193 S.E., 605, 607, 56 Ga. App., 705; 18 Words and Phrases, perm. ed., pp. 590-594). The apparent conflict of opinions is explained by the fact that the specific statutory provisions relied upon are not identical. In some cases, as pointed out in 54 C.J.S., 851, the terms "lottery" and "gift enterprise" are used interchangeably (Bills vs. People, supra); in others, the necessity for the element of consideration or chance has been specifically eliminated by statute. (54 C.J.S., 351-352, citing Barker vs. State, supra; State ex rel. Stafford vs. Fox-Great Falls Theater Corporation, supra). The lesson that we derive from this state of the pertinent jurisprudence is, therefore, that every case must be resolved upon the particular phraseology of the applicable statutory provision. Taking this cue, we note that in the Postal Law, the term in question is used in association with the word "lottery". With the meaning of lottery settled, and consonant to the well-known principle of legal hermeneuticsnoscitur a sociis which Opinion 217 aforesaid also relied upon although only insofar as the element of chance is concerned it is only logical that the term under a construction should be accorded no other meaning than that which is consistent with the nature of the word associated therewith. Hence, if lottery is prohibited only if it involves a consideration, so also must the term "gift enterprise" be so construed. Significantly, there is not in the law the slightest indicium of any intent to eliminate that element of consideration from the "gift enterprise" therein included. This conclusion firms up in the light of the mischief sought to be remedied by the law, resort to the determination thereof being an accepted extrinsic aid in statutory construction. Mail fraud orders, it is axiomatic, are designed to prevent the use of the mails as a medium for disseminating printed matters which on grounds of public policy are declared non-mailable. As applied to lotteries, gift enterprises and similar schemes, justification lies in the recognized necessity to suppress their tendency to inflame the gambling spirit and to corrupt public morals (Com. vs. Lund, 15 A. 2d., 839, 143 Pa. Super. 208). Since in gambling it is inherent that something of value be hazarded for a chance to gain a larger amount, it follows ineluctably that where no consideration is paid by the contestant to participate, the reason behind the law can hardly be said to obtain. If, as it has been held Gratuitous distribution of property by lot or chance does not constitute "lottery", if it is not resorted to as a device to evade the law and no consideration is derived, directly or indirectly, from the party receiving the chance, gambling spirit not being cultivated or stimulated thereby. City of Roswell vs. Jones, 67 P. 2d., 286, 41 N.M., 258." (25 Words and Phrases, perm. ed., p. 695, emphasis supplied). we find no obstacle in saying the same respecting a gift enterprise. In the end, we are persuaded to hold that, under the prohibitive provisions of the Postal Law which we have heretofore examined, gift enterprises and similar schemes therein contemplated are condemnable only if, like lotteries, they involve the element of consideration. Finding none in the contest here in question, we rule that the appellee may not be denied the use of the mails for purposes thereof. Recapitulating, we hold that the petition herein states a sufficient cause of action for declaratory relief, and that the "Caltex Hooded Pump Contest" as described in the rules submitted by the appellee does not transgress the provisions of the Postal Law. ACCORDINGLY, the judgment appealed from is affirmed. Nocosts. G.R. No. L-29906 January 30, 1976 RODOLFO GENERAL and CARMEN GONTANG, petitioners, vs. LEONCIO BARRAMEDA, respondent.

Petition for certiorari to review the decision of the Court of Appeals (Second Division) in CA-G.R. No. 38363-R, entitled "Leoncio Barrameda, plaintiff-appellant, vs. Development Bank of the Philippines (Naga Branch, Naga City), Rodolfo General and Carmen Gontang, defendants-appellees," which reversed the decision of the Court of First Instance of Camarines Sur in its Civil Case No. 5697, "dismissing the complaint with costs against plaintiff". Appellate Court's decision has the following dispositive portion: We therefore find that the appealed judgment should be reversed and set aside and another one entered declaring (1) null and void the sale executed on September 3, 1963, by defendant Development Bank of the Philippines in favor of its defendants Rodolfo General and Carmen Gontang, (2) T.C.T. No. 5003 cancelled and (3) the mortgaged property redeemed; and ordering the Clerk of the lower court to deliver the amount of P7,271.22 deposited to defendants Rodolfo General and Carmen Gontang and the Register of Deeds to issue a new Transfer Certificate of Title in the name of plaintiff in lieu of T.C.T. No. 5003 upon payment by him of corresponding fees; with costs against the defendants in both instances. Undisputed facts are: Plaintiff seeks to redeem the land formerly embraced in Transfer Certificate of Title No. 1418, containing an area of 59.4687 hectares, situated in barrio Taban, Minalabac Camarines Sur; to annul any and all contracts affecting said property between the Development Bank of the Philippines (DBP) and Rodolfo General and Carmen Gontang and to recover damages, attorney's fees and costs. The land in dispute was mortgaged by plaintiff to the DBP to secure a loan of P22,000.00. For failure of the mortgagor to pay in full the installments as they fall due, the mortgagee foreclosed extrajudicially pursuant to the provisions of Act 3135. On April 23, 1962, the provincial sheriff conducted an auction sale in which the mortgagee, as the highest bidder, bought the mortgaged property for P7,271.22. On May 13, 1963, the sheriff executed a final deed of sale in favor of the DBP (Exhibit 2) and the DBP executed an affidavit of consolidation of ownership (Exhibit 3). Upon registration of the sale and affidavit on September 2, 1963 (Exhibit 1), TCT No. 1418 in the name of plaintiff was cancelled and TCT No. 5003 issued to the DBP (Exhibit-5) in its stead. On September 3, 1963, defendants Rodolfo General and Carmen Gontang purchased the land from their codefendant. The sale in their favor was annotated on TCT No. 5003 on November 26, 1963 only. Prior to the date last mentioned, or on November 20, 1963, plaintiff offered to redeem the land. In view of the refusal of the DBP to allow the redemption, plaintiff commenced this suit. The original complaint was filed in court on November 23, 1963. On August 12, 1964, plaintiff deposited with the clerk of court the sum of P7,271.22, representing the repurchase price of the land. The trial court held that the one-year period of redemption began to run on April 23, 1962, when the sale at public auction was held, and ended on April 24, 1963; that the plaintiff's offer to redeem on November 20, 1963 and the deposit of the redemption price on August 12, 1964 were made beyond the redemption period; and that defendants Rodolfo General and Carmen Gontang 'are legitimate purchasers for value. Two principal issues raised are: (1) In the interpretation and application of Section 31, Commonwealth Act 459 (Law that created the Agricultural and Industrial Bank, now Development Bank of the Philippines) which provides: The Mortgagor or debtor to the Agricultural and Industrial Bank whose real property was sold at public auction, judicially or extra- judicially, for the full or partial payment of an obligation to said bank shall, within one year from the date of' the auction sale, have the right to redeem the real property ... (Emphasis supplied), shall the period of redemption start from the date of auction sale or the date of the registration of the sale in the register of deeds as the respondent Appellate Court held?

(2) Were petitioners under obligation to look beyond what appeared in the certificate of title of their vendor the Development Bank of the Philippines and investigate the validity of its title before they could be classified as purchasers in good faith? Petitioners' principal contentions are: that Section 31 of Commonwealth Act No. 459 which created the Agricultural and Industrial Bank, predecessor of the Rehabilitation Finance Corporation and the Development Bank of the Philippines, clearly provides that the right to redeem the real property sold at public auction judicially or extra-judicially may only be exercised "within one year from the date of the auction sale"; that there is no provision in Commonwealth Act No. 459 expressly stating that the redemption period of one year shall start from the registration of the certificate of sale in the register of deeds; that Sec. 31 of C. A. 459 is a specific provision of law which governs redemption of real property foreclosed by the Agricultural and Industrial Bank (now the Development Bank of the Philippines), and prescribes the redemption period for both judicial and extra-judicial foreclosures of mortgage; that insofar as foreclosures of mortgage by banking and financial institutions are concerned, the period of redemption applicable must be the one prescribed in their respective charters as, in the case at bar, Section 31, C.A. No. 459; that the ruling in the case of Agbulos vs. Alberto, G.R. No. L-17483, July 31, 1962, cited by respondent Appellate Court as a basis for its decision, is not applicable to the case at bar because this Court based its Agbulos ruling on Section 26 (now Sec. 90) of Rule 39 of the Rules of Court, wherein it is not clear when the period of redemption should start (date when execution sale was conducted, or when the certificate of sale was executed by sheriff, or when the certificate of sale was registered in the registry of deeds), and this Court ruled that as the land involved in that case is registered under the Torrens system, the date of redemption should begin to run from the date of registration, unlike in the case at bar where Section 31 of Commonwealth Act 459 specifically and clearly provides that the running of the redemption period shall start from the date of the auction sale; and that the ruling of this Court in Gonzales vs. P.N.B., 48 Phil. 824, also invoked by respondent Appellate Court as a basis for its decision, is likewise not applicable to the case at bar because the provisions on the matter of the P.N.B. Charter, Act No. 2938, are different from that of Commonwealth Act 459. Section 32 of Act 2938, which is now Section 20 of R.A. No. 1300 (PNB Charter) provides that the mortgagor shall have the right to redeem within one year the sale of the real estate. This is Identical to the provision appearing in Sec. 26, now Sec. 30, Rule 39, Rules of Court, while under Sec. 31 of Commonwealth Act 459, the period of redemption should star, on the date of the auction sale, and the latter provision is applicable specifically and expressly to the case at bar. It is also petitioners' principal argument that the ruling in Metropolitan Insurance Company, substituted by spouses Loreto Z. Marcaida and Miguel de Marcaida vs. Pigtain 101 Phil. 1111, 1115-1116, wherein this Court, in construing Sec. 6 of Act No. 3135, categorically stated that the one year redemption period shall start from the date of sale and not from the report of the sale or the registration of the sale certificate in the office of the Register of Deeds, is more applicable to the present case. The pertinent portion of the decision in the Marcaida case follows: But again the appellants claim that in this particular case, the statutory redemption period of one year should begin from December 17, 1954, when the auction sale was actually recorded in the office of the Register of Deeds of Manila and not from December 15, 1953, when the sale at public auction of the properties in question took place. We find its contention to be also untenable in view of the clear provision of the aforesaid Section 6 of Act No. 3135 to the effect that the right of redemption should be exercised within one year from the date of the sale. It should not be overlooked that the extrajudicial sale in question was for foreclosure of a mortgage and was not by virtue of an ordinary writ of execution in a civil case. ... And since the appeallants had failed to redeem the land in question within the time allowed by Section 6 of Act 3135, the appellee has perfect right to require the cancellation of the attachment lien in question. (Emphasis supplied) Notwithstanding the impressive arguments presented by petitioners, the crucial issue to determine is the choice of what rule to apply in determining the start of the one year redemption period, whether from the date of the auction sale or from that of the registration of the sale with the registry of deeds. In other words it is whether a literal interpretation of the provision of Section 31 of Commonwealth Act 459 that the period of redemption shall start from the date of the auction

sale shall govern, or whether the words, "auction sale" shall be considered in their ordinary meaning or in the same sense that site is used in the texts of Section 26, now 30, of Rule 39 of the Rules of Court, and Section 26 of Act 2938, now Section 20, R.A. 1300 (Charter of PNB). Stated differently, should the word "sale" used in the above indicated provisions of the Rules of Court and the PNB Charter, under whichWe ruled that the redemption period shall start from the registration of the sale in the registry of deeds be applied to foreclosure sales for the DBP and give to the words auction sale" in its charter the same meaning of "sale" as used in connection with registered land? We are of the view that a correct solution to the foregoing issue must entail not merely trying to determine the meaning of the words auction sale" and "sale" in different legislative enactments, but, more importantly, a determination of the legislative intent which is quite a task to achieve as it depends more on a determination of the purpose and objective of the law in giving mortgagors a period of redemptiom of their foreclosed properties. Mortgagors whose properties are foreclosed and are purchased by the mortgagee as highest bidder at the auction sale are decidedly at a great disadvatage because almost invariably mortgagors forfeit their properties at a great loss as they are purchased at nominal costs by the mortgagee himself who ordinarily bids in no more than his credit or the balance threof at the auction sale. That is the reason why the law gives them a chance to redeem their properties within a fixed period. It cannot be denied that in all foreclosures of mortgages and sale of property pursuan to execution, whether judicial or extrajudicial in nature, under different legislative enactments, a public auction sale is a indispensable pre-requisite to the valid disposal of properties used as collateral for the obligation. So that whether the legislators in different laws used as collateral for the obligation. So that whether the legislators in different laws used the term "sale" or "auction sale" is of no moment, since the presumption is that when they used those words "sale" and "auction sale" interchangeable in different laws they really referred to only one act the sale at public auction indispensably necessary in the disposition of mortgaged properties and those levied upon to pay civil obligations of their owners. In the case of Ernesto Salazar, et al. vs. Flor De Lis Meneses, et al.,G.R. No. L-15378, promulgated July 31, 1963, this Court stated: The issue decisive of this appeal is the one raised by appellants in their third assignment of error, which is to this effect: that the lower court erred in not holding that the period of redemption in this case, as far as appellants are concerned, started only on May 26, 1956, registered. Should We rule to this effect, it is clear that hen appellants attempted to exercise their right to redeem, as judgment creditors of the deceased mortgagor by judgment subsequent to the extrajudicial foreclosure sale, and when they initiated the present action on October 1, 1956, the period of redemption had not yer expired. We find appellants' contention to be meritorious. In the case of Agbulos vs. Alberto, G.R. No. L-17483, promulgated on July 31, 1962, We held: The property involved in the present case is registered land. It is the law in this jurisdiction that when property brought under the operation of the Land Registration Act sold, the operative act is the registration of the deed of conveyance. The deed of sale does not take effect this a conveyance or bind the land it is registered. (Section 50, Act 496; Tuason vs. Raymundo, 28 Phil. 635; Sikatuna vs. Guevara, 43 Phil. 371; Worcester vs. Ocampo, 34 Phil. 646) (Emphasis supplied) We find no compelling reason to deviate from the aforequoted ruling and not apply the same to the present case. To Us petitioners' main contention that there is a great deal of difference in legislative intent in the use of the words 94 auction sale" in Sec. 31 of Commonwealth Act 459 and the word "sale" in See. 32 of Act 2938, and See. 30 of Rule 39 of the Rules of Court, pales into insignificance in the light of Our stand that those words used interchangeably refer to one thing, and that is the public auction sale required by law in the disposition of properties foreclosed or levied upon. Our stand in the Salazar case and in those mentioned therein (Garcia vs. Ocampo, G.R. No. L-13029, June 30, 1959; Gonzales et al. vs. Philippine National Bank et al. 48 Phil. 824) is firmly planted on the premise that registration of the deed of conveyance for properties brought under the Torrens System is the operative act to transfer title to the property and registration is also the

notice to the whole world that a transaction involving the same had taken place. To affirm the previous stand this Court has taken on the question of when the one year period of redemption should start (from the time of registration of the sale) would better serve the ends of justice and equity especially in this case, since to rule otherwise would result in preventing the respondent-mortgagor from redeeming his 59.4687 hectares of land which was acquired by the Development Bank of the Philippines as the highest bidder at the auction sale for the low price of only P7,271.22 which was simply the unpaid balance of the mortgage debt of P22,000.00 after the respondent-mortgagor had paid the sum of P14,728.78. As it is, affirmance of the Appellate Court's decision would not result in any loss to petitioners since the amount of P7,271.22 they paid to the Bank will be returned to 'them. What further strengthen's Our stand is the fact found by the respondent Appellate Court that respondent Barrameda has always been in possession of the disputed land. IN THE LIGHT OF THE FOREGOING, We find it no longer necessary to determine whether the petitioners are purchasers in good faith of the land involved, since the respondent Barrameda redeemed the mortgaged property within the legal period of redemption and, consequently the sale of the property executed on September 3, 1963, by the Development Bank of the Philippine in favor of the petitioners is null and void. WHEREFORE, the decision of the respondent Appellate Court is affirmed, with costs against petitioners.

April 4, 1918G.R. No. L-11988 JACINTO MOLINA, plaintiff-appellee,vs. JAMES J. RAFFERTY, as Collector of Internal Revenue, defendant-appellant. The facts are not in dispute. Plaintiff is the owner of various fish ponds (pesquerias) in the municipality of Bulacan, Province of Bulacan. Between January 1 and September 30, 1915, plaintiff consigned to a commission merchant in Manila quantities of fish which sold for P5,264.89. The commission merchant paid the merchants percentage and fixed taxes due under the Internal Revenue Law. Plaintiff, however, had not previously paid the merchants tax, although from August 1. 1904, the date when the first Internal Revenue Law became effective, until October 26, 1915, plaintiff had been engaged in this business, Plaintiff had been paid the real estate tax on the land upon which the fishponds are located. On the date last mentioned, on demand of a representative of the Bureau of Internal revenue, plaintiff paid under protest P71.81, the total internal-revenue tax on the gross sum received for the first three-quarters of the year 1915. The ground of the protest was that plaintiff is an agriculturist and not a merchant and therefore exempt from the taxes imposed by the Internal Revenue Law upon the gross sales of merchants. The protest was denied by the Collector of Internal Revenue, who held that the plaintiff was a merchant. Suit to recover this amount of P71.81 was thereupon instituted in the Court of First Instance of the city of Manila against the defendant as collector of internal revenue. After trial on an agreed statement of facts, the Honorable Jose Abreu in a carefully prepared decision ordered defendant to refund the P71.81 paid by plaintiff as internal-revenue taxes and penalties under protest, with legal interest thereon from November 26, 1915, the date of such payment under protest. Defendant appealed making four assignments of error, all of which, however, with the exception of the last, which need not be considered, center around the question which we set out in the beginning of this decision. Both appellee and appellant have further favored the court with an exceptionally able presentation of their respective contentions. We are given to understand that this is in the nature of a test case, concerning not alone the comparatively small amount involved but affecting the taxes of numerous other persons in an amount which will run up into thousands of pesos. In addition to the foregoing statement of the case, we must note the nature of the fishponds and of the fish. As to the first, before the lands are suitable for use as fishponds, it is necessary for the land to be prepared by the erection of dikes and cleaning out and deepening the bottom. The presence of caretakers is necessary to see that the fishponds do not become damaged and to regulate the entrance and exit of water through the floodgates. The fish are of the species known bagus. These fish are obtained from small fishes (semillas), which are

placed in the fishponds. These small fishes are first put in a comparatively small compartment, surrounded by walls of earth, which is found within the fishery itself. Afterwards when they get to be about the size of a cigarette, they are let loose into the other compartments of the same fishery. This compartment for semillas is allowed to dry and is cleaned well before the semillas are placed therein; it is even plowed to kill all the bugs that may eat up the fish. In order to make marine plants grow, a small amount of sea water is allowed to enter. When the fish have become large an endeavor is made to fill the fishery with water. From time to time the water contained in the fishery is renewed to avoid the killing of the fish. The walls of a fishery are constructed to preserve and to retain the water and the fishes inside the fishery. These walls are constructed on a swampy lands and in some cases on rice fields bounded by a river or the sea. The food of the bagus includes marine plants. These algae are of seven classes, their scientific names being cladophora, chaetomorpha, oscillatoria, oedogonium, lyngbya, enteromorpha, and najas. One of these plants is rooted. Some of the others are very loosely attached to the ground, but not rooted. Generally the algae float in the water. LAW. The provisions of the law which it is necessary to construe are not extensive. The different internal-revenue laws have provided for a merchants tax. Merchant, as used in the law, means a person engaged in the sale, barter, or exchange of personal property of whatever character. (Act No. 2339, sec. 40; Administrative Code [1917] sec. 1459.) The succeeding section (Act no. 2339, sec. 41; Administrative Code [1917], sec. 1460) is entitled Sales not subject to merchants tax. The section provides: In computing the tax above imposed transactions in the following commodities shall be excluded: . . . . (c) Agricultural products when sold by the producer or owner of the land where grown, whether in their original state or not. With the facts and the law before us, we return to the question first suggested. QUESTION. Are fish an agricultural product within the meaning of the exemption provisions of the Internal revenue Law? OPINION. Different methods of approach to this question are possible. For example, all argument could disposed of peremptorily with the bald statement that in accordance with the rule of stare decisis, the decision of this court in The United States vs. Laxa ([1917], 36 Phil. Rep., 670) is decisive. Justice Araullo, in his opinion, held that fish are not an agricultural product, that the owner of a fishpond who sells the fish at the fishpond is a merchant, that such a merchant is not entitled to the exemption provided by the Internal Revenue Law, and that the said owner is guilty of violation of the Internal Revenue Law. We prefer not to take such a stand, although we are confident that it could be defended, because of the vigorous objection to a decision in a criminal prosecution becoming a precedent in a civil action for the recovery of taxes. As opposed to the Laxa decision, counsel for plaintiff invites special attention to the cases of Mapa vs. Insular Government ([1908] 10 Phil., 175) and Mercado vs. Collector of Internal Revenue ([1915] 32 Phil. Rep., 271). In the first case, the Supreme Court said The question before us is not what is agricultural land, but what definition has been given to that phrase by the Act of Congress. The Philippine Bill, it was found, classified land as agricultural public land in order to distinguish such land from timber or mineral land. Neither Congress nor the court gave any definition of agricultural land as such or of the products of the land. Moreover, the court made the observation that, The land in question in this case, which is used as a fishery, could be filled up and any kind of crops raised thereon. If the case can be considered as an authority, it must be that the court recognizes that agricultural land, as the term is used in the Act of Congress, may be devoted to other than agricultural purposes, and that using agricultural land for a fishpond is a use other than agricultural. In the second case of Mercado vs. Collector of Internal Revenue, following Mapa vs. Insular Government (supra), the Court said It is, then unquestionable that bakawan firewood is an agricultural product, differing from other kinds of firewood obtained from the forest trees because the bakawan plant grows only on land subject to overflow, which require clearing and care by workers skilled in agricultural pursuits, in order that it may thrive. It is also to be noted that up to the present time mangrove swamps have been found suitable for no other useful crop. But it is plainly a far cry from holding that bakawan, planted and grown through the culture of the soil, is an agricultural product, to finding that fish are in similar sense planted and grown as a result of

the culture of the soil. Whatever comfort can be derived from these decisions are persuasive authority is more than nullified by the later case of The United States vs. Laxa ([1917] 36 Phil. Rep., 670). Just, therefore, as the facts and the law are indisputable, so do we prefer to forget these three cases for the time being and to rest our decision on the plain and ordinary meaning of the law disclosed by the elementary rules of statutory construction. And first, in order to dispose of the question, is the owner of a fishpond, such as the plaintiff, who sells fish taken from a fishpond, a merchant as defined in the Internal revenue Law? Recalling this definition of a merchant, it would appear undeniable that the plaintiff is properly included in such classification. To paraphrase the law, he is a person engaged in the sale of fish. Under our law, whatever may be the usual conception of a merchant, buying and selling are not essential; to sell only is sufficient. (See also In re Cameron Town Mut. Fire, Lightning and Windstorm Ins. Co. [1899], 96 Fed., 756.) If such a man is a merchant, does his sale of fish place him under the exemption of the Internal Revenue Law? We know the meaning of fish. In the authoritative work by Dr. C. L. G. Gunther on the Study of Fishes, we find the following: According to the views generally adopted at present, all those vertebrate animals are referred to the class of fishes, which, living in water, breathe air dissolved in water by means of gills or branchiae; whose heart consists of a single ventricle and single atrium; whose limbs, if present, are modified into fins, supplemented by unpaired median fins; and whose skin is either naked, or covered with scales or osseous plates or bucklers . . . . We then have left to define merely the words agricultural products. Agriculture is defined by Webster as the art or science of cultivating the ground, including the preparation of the soil, the planting of seeds, the raising and harvesting of crops, and the rearing, feeding, and management of live stock. Let us test our facts by this definition. The ground of the fishpond is cultivated. The soil is prepared. We, however, greatly doubt that seeds (of fish) are planted or that crops (of fish) are raised and harvested. Certainly, the seeds of fish are not sown in the ground as one would sow corn, while as distinguished from the rearing, feeding, and management of live stock, which consumes the products of the farm, the fish living in water depending upon water for life, only receive nourishment from marine plants most of which have little or no connection with the land. To proceed. The equivalent of agriculture in husbandry. And husbandry is defined by Webster as the business of a farmer, comprehending agriculture or tillage of the ground, the raising, managing, and fattening of cattle and other domestic animals, the management of the dairy and whatever the land produces. Again, we are far from confident that a farmer is generally understood to be a fisherman, and that the land can be said to produce fish. In a case in which these definitions were considered, the supreme court of Tennessee said that agriculture means in its original sense, the cultivation of the ground for the purpose of procuring vegetables and fruits for the use of man and beast, or the act of preparing the soil, sowing and planting seeds, dressing the plants, and removing the crops. In this sense of the word includes gardening or horticulture, and also the raising and feeding of cattle or stock; but in a more common and appropriate sense is used to signify that specie of cultivation which is intended to raise grain and other field crops for a man and beast. (Simons vs. Lovell [1872], 54 Tenn. [7 Heisk.], 510; see also In re Drake [1902], 114 Fed., 229.) To proceed. Agricultural products, the supreme court of Georgia has held, in ordinary usage, is confined to the yield of the soil, as corn, wheat, rye, hay, etc. (Davis and Co. vs. Mayor and Council of Macon [1879], 64 Ga., 128.) The court had here to determine if beef cattle were exempt from taxation as an agricultural product. The court asked And when it is thought of closely, would it not be rather an unusual application of the phrase agricultural products to make it comprehend beef cattle? In ordinary usage, is not the phrase confined to the yield of the soil, as corn, wheat, rye. oats, hay, etc., in its primary form? When there has been conversion of the fruits of the soil into animal tissues are still to apply the phrase? And suppose we are to disregard the change in its first stage, and call a cow or a steer an agricultural product, must we carry the name forward to the steak or roast which the butcher sells us from the slaughter animal? If cattle fall under the denomination, so do hogs; and if beef, so does bacon. (See also State vs. Patterson [1887], 4 S. E., 47.) Another case, coming from the supreme court of the District of Columbia, gives a much broader meaning to the phrase. (District of Columbia vs. Oyster [1885], 4 Am. Rep., 275.) The court said The common parlance of the country, and the common practice of the county, have been to consider all those things as farming products or

agricultural products which had the situs of their production upon the farm, and which were brought into condition for the uses of society by the labor of those engaged in agricultural pursuits, as contradistinguished from manufacturing or other industrial pursuits. The product of the dairy or the product of the poultry yard, while it does not come directly out of the soil, is necessarily connected with the soil and with those who are engaged in the culture of the soil. It is, in every sense of the word, a part of the farm product. It is depended upon and looked upon as one of the results and one of the means of income of the farm, and in a just sense, therefore, it may be considered produce. To indicate further the wide sweep of the term agricultural products, and to show how such terminology influences those who disagree with us, agricultural products has been held to include swine, horses, meat cattle, sheep, manure, cordwood, hay, poultry, vegetables, fruit, eggs, milk, butter, and lard. (See Mayor vs. Davis, 6 W. and S., 279.) But never by any court to include fish. Like everything else in the world, it must be that there is a limit to the things which can be included in the term agricultural products. The District of Columbia case, much relied upon by the plaintiff, gives the clue. Agriculture is but one pursuit. Agriculture and what it includes is contradistinguished from other occupations and professions, as manufacturing and we believe, fishing. Thus, of fisheries the Encyclopedia Britannica (p. 429) says For the most part the operations of fishing have been comparable with those of primitive hunting rather than with agriculture. Fisheries, while possibly in concomitance with the soil, are even more certainly concerned with the water in which the fish live and have their being, If fishing is farming, then conversely farming must be fishing. Waiving all the technical definitions, does the ordinary man when he speaks of agriculture and farming think of a farmer as a fisherman, and when he speaks of fisheries does he think of a fisherman as a farmer? One other word in the law, grown is necessarily included and must be considered in finding the proper meaning. The law provides that agricultural products must be grown. Again referring to Webster, grown means to cause to grow; to cultivate; to produce; as, to grow a crop; to grow wheat, hops, or tobacco. The fish taken from the fishponds and sold are certainly not the natural products of such land. They are retained therein by the construction of artificial dykes. They are animals farae nature, They have none of the characteristics of the natural products of the soil. Fish are not grown as wheat, hops, or tobacco are grown. The question as to whether or not a similar exemption in favor of agriculturists contained in the Internal Revenue Law of 1904 operated to exclude from the merchants tax, receipts from the sale of fish, arose shortly after the passage of that Act. The Attorney-General in an opinion rendered on March 14, 1906 (3 Op. Atty. gen., 65), held in effect that the culture of the soil was determining factor in considering what products are or are not agricultural products. As to quarrymen and fishermen. the Attorney-General observed The occupation of the lumberman and the stockman, in the historical development of these industries, as well as in present day practice, has never been confused with that of the agriculturist; while as to quarrymen and fishermen it may be observed that tillers of the soil are not wont to plow the fields in quest of rock or in anticipation of a crop of fishes or of pearls. This opinion of the Attorney-General was concurred in by the then Governor-General and Acting Secretary of Finance Justice, who had helped draft the law. The Collector of the Internal Revenue thereupon published the opinion in full in Bureau of Internal Revenue Circular, No. 106. This official ruling of the executive officials is now entitled to consideration by the courts. Courts will and should respect the contemporaneous construction placed upon a statue by the executive officers whose duty it is to enforce it, and unless such interpretation is clearly erroneous will ordinarily be controlled thereby. (In re Allen [1903], 2 Phil., 630, following Pennoyer vs. McConnaughy [1890], 140 U. S., 363; Government of the Philippine Islands Ex Rel. Municipality of Cardona vs. Municipality of Binangonan [1916], 34 Phil. Rep., 518.) We have thus far considered the etymology of the words. We frankly admit to a slight doubt of exact interpretation by this method. We, however, believe that viewed from the standpoint of the most elementary of all rules of statutory construction there is but one possible result. In other words, our sole duty is to ascertain and give effect to the intention of the lawmaking body. We can best discover this intention through the medium of the action taken by the Legislature in the enactment of other laws. The first Internal revenue law (Act No. 1189) was enacted by the Philippine Commission. It is plain that the Commissioners must have had in mind agriculture as known to them in the United States. The organization of the American Government includes a Department of

Agriculture, the Bureau of Fisheries is under the Department of Commerce. Agriculture and fishing are therefore separate and distinct. In Great Britain there is a Board of Agriculture and Fisheries. Moreover, the same Philippine Legislature which provided an exemption from taxation for agricultural products was also interested in establishing a Bureau of Agriculture. In enumerating the functions of this Bureau, not one word is said of fish or fisheries. We rather doubt if the experts in agronomy in the Bureau of Agriculture would consider themselves competent to advise as to piscatology. On the contrary, you find a section of fisheries established not in the Bureau of Agriculture but in the Bureau of Science. Instead, also, you find special laws unrelated to agriculture dealing with the granting of fishery privileges. The purpose of the Legislature in exempting agricultural products from taxation under the Internal Revenue Law was to encourage farming and not fishing. This court has herefore held, and we reiterate, that where language is plain, subtle refinements which tinge words so as to give them the color of a particular judicial theory are not only unnecessary but decidedly harmful. (Yangco vs. Court of First Instance of Manila and Yangco [1915], 29 Phil., 183.) Chief Justice Marshall in the historic case of Gibbons vs. Ogden, ([1824], 9 Wheat., 1) said: As men, whose intentions require no concealment, generally employ the words which most directly and aptly express the ideas they intend to convey, the enlightened patriots who framed our Constitution, and the people who adopted it must be understood to have employed words in their natural sense, and to have intended what they have said. The answer to our question are A person engaged in the sale of fish is a merchant. Fish are not an agriculture product. This merchant is not entitled to exemption under the Internal Revenue Law. The further objection is made that the particular tax would constitute double taxation. It is sufficient to note in this respect that this court in Gil Hermanos vs. Hord ([1908] 10 Phil., 218) said: It is very apparent that tax under discussion is not a tax upon property. It is rather a tax upon the occupation or industry in which a person is engaged. The internal-revenue tax is also uniform for all of a class. In opposition to such a contention, it could be advanced if necessary that the burden is on plaintiff to establish that the surrender of the taxing power is manifested by words too plain to be mistaken. When exemption is claimed, it must be shown indubitably to exist. (Farrington vs. Tennessee [1877], 95 U. S., 697, 686.) The presumption is always against any surrender of the taxing power. (Tennessee vs. Whitworth [1885], 117 U. S., 129, 136.) We have permitted our discussion of the question raised by this appeal to proceed much farther than is really necessary for the decision of the case. If we have fallen into the mire of proximity, it has been because we approached the subject with a desire to accede, if possible, to the request of the plaintiff. We are as much interested in upholding legislation which will assist in the commercial development of the Islands as any one. We cannot, however, step outside the settled and ordinary meaning of the law and by judicial legislation give to the law a meaning not intended. If redress is proper, under these circumstances, complainants must look to the Legislature and not to the courts. The judgment of the lower court is reversed and the defendant is absolved of the complaint, with the costs of the first instance against the plaintiff, and without special finding as to costs of this instance. So ordered. Carson, Araullo and Street, JJ., concur. Separate Opinions JONHSON, J., with whom concurs ARELLANO, C.J., dissenting: The only important question presented by this appeal is whether or not the products of a vivero de peces should be considered as an agricultural product and as such relieved from the internal-revenue tax in accordance with paragraph (c) of article 41 of Act No. 2339. The Court of First Instance, in a very well-reasoned opinion, held that said products were exempt from the internal-revenue tax under said Act. This court, by a majority opinion, held that said products were not exempt from the payment of the internal-revenue tax and reversed the judgment of the lower court. We think the majority opinion misses both the spirit and purposes of the law, and woks a great imjustice and a severe hardship upon thousands of the inhabitants of the Philippine Islands who are engaged in purely agricultural pursuits. Said decision places a great burden upon those who are least able to bear it. By reason of the very small profits of the agriculturist, earned by the hardest of labor, every intendment of the law should be, at least, liberally construed in his favor. Paragraph (c) of section 41 of Act No. 2339 provides that the tax imposed under said law shall not be imposed upon agricultural

products when sold by the producer or owner of the land where grown, whether in their original state or not. Under the interpretation given in the majority opinion, the Collector of Internal Revenue may collect taxes upon every grain of rice produced by the farmers of the Philippine Islands, unless he sells the same where grown. Such an interpretation, in our opinion, was never intended by the lawmaker. The majority opinion has fallen into error, in our opinion, in not distinguishing a pesqueria from a vivero de peces. no contention is made that the products of a pesquera, as the terms is generally used, should be relieved from the internal-revenue tax. Our contention is simply that the products of a vivero de peces should be relieved from the internal-revenue tax, upon the theory that they are as much of an agricultural product as any other product of the farm by reason of the method employed in producing them. The majority opinion admits [that] whether a particular product is or is not an agricultural product depends upon the methods used in producing it. A pesqueria, as distinguished from a vivero de peces, may be defined as a specie of trap placed upon the farm in which fish are caught from time to time. While a vivero de peces may be defined as apart of the same as is done in the production of corn, sugar cane, rice, bananas, coconuts, ducks, chickens, eggs, milk, butter, lard, hay, wood, cattle, horses, sheep, or any other great variety of products produced by the farmers in the Philippine Islands, the only difference being one of degree of the care and labor necessary for production. The error which the majority opinion has fallen into may best illustrated by an example: A is the owner of a farm. A portion of the same is dry land capable of producing sugar cane, or corn, or other varieties of farm products which can only be produced upon dry land. A portion of said farm, by virtue of its location with reference to water, sunlight, and air may be used for the production of abaca, bananas, or some of the various classes of fruits. Another portion of the farm is low land, upon which rice or certain classes of vegetables only can be produced profitably. Still another portion of the farm is swamp land, covered by water and incapable of being properly drained. Another portion of the farm is mountainous so that it cannot be cultivated at all. Upon the mountainous portion of said farm the owner raises cattle, sheep, goats, horses, hogs, chickens, turkeys, eggs, lard, butter, wool and hides. Another portion of the farm can most profitably be devoted to the production of bacauan which was held to be an agricultural product. (Mercado vs. Collector of Internal Revenue, 32 Phil. Rep., 271.) The swamp land of his farm is of such a character that it can not profitably be devoted to the production of rice or any of the cereals, and is too swampy upon which to raise cattle, sheep, horses, goats, etc. The farmer, therefore, utilizes that portion for the production of geese, ducks, and other domestic fowls, as well as for the production of eggs. There comes a time when the swamp land ceases to be profitable for the production of rice as well as for the production of said fowls and eggs. All of said farm, including the various classes of land as above described, is taxed as agricultural land; and it is a matter of common knowledge that the vivero de peces are taxed as agricultural land, and equally as high, if not higher, than other lands devoted to the production of rice, corn or sugar cane, etc. A great demand may arise for fish in the country. The farmer, in order to reap the advantage of said demand, ceases to produce eggs, or ducks, or geese upon the swamp lands of his farm and turn the same into a vevero de peces. He, thus, wisely utilizing the different portions of the farm for the production of all of the products which farmers generally produce, is greatly increasing the wealth of the State. The majority opinion admits that domestic fowls chickens, ducks, geese, turkeys and eggs, butter, lard, milk, vegetables, fruit, etc., are agricultural products, but argues that nothing is, or may be considered, an agricultural product which does not result from a cultivation of the soil. To admit that eggs, butter, lard and milk are agricultural products, and to argue that nothing is an agricultural product which does not result from a cultivation of the soil presents a consistency in argument and conclusion which we are unable to understand. It is admitted that the land for the vevero de peces is specially prepared. A certain cultivation and preparation is necessary for the creation of a vivero de peces. It is difficult to understand what special preparation of the soil is necessary for the production of hens eggs, butter, lard, milk, or cattle, or sheep or horses or hogs, or goats which makes those products agricultural products. It is a matter of common knowledge that land may be specially prepared for the production of rice this year and then changed into a vivero de peces next year and vice versa. Under what interpretation of the law and under what definition of agricultural products may we conclude that the year in which the same parcel of land produces rice produces an agricultural product while in the year it is producing fish is not also producing an agricultural products? Of

course, as we stated above, a vivero de peces must not be confused with a pesqueria which is used as a trap for the purpose of catching fish. No contention is made that the products of the latter is in any sense an agricultural product any more than the product of a trap placed in the fields for the purpose of catching wild animals, which from time to time pass upon the land, is an agricultural product. It is admitted in the majority opinion that the land for a vivero de peces must be specially prepared by first building dykes and cultivating the land preparatory to the planting of the fish. the only difference, therefore, between the preparation of a vivero de peces and the preparation of a rice paddy is one in extent of labor employed. In both cases the land is specially prepared for the particular purpose to which the farmer desires to devote it. Forgetting for a moment the stereotyped and the lexicographers definition of agricultural products, and forgetting for a moment that there is no more difference, so far as the method of production is concerned, between the production of corn and the production of ducks and eggs, we will find ourselves driven to the conclusion that from the standpoint of method of production there is no difference between the production of fish in a vivero de peces and the production of ducks upon land which is recognized as agricultural lands. The majority opinion has fallen into error by trying to make a 15th century definition apply to 20th century conditions. The judgment of the lower court should be affirmed with costs. G.R. No. L-6355-56 August 31, 1953 PASTOR M. ENDENCIA and FERNANDO JUGO, plaintiffsappellees, vs.SATURNINO DAVID, as Collector of Internal Revenue, defendant-appellant. This is a joint appeal from the decision of the Court of First Instance of Manila declaring section 13 of Republic Act No. 590 unconstitutional, and ordering the appellant Saturnino David as Collector of Internal Revenue to re-fund to Justice Pastor M. Endencia the sum of P1,744.45, representing the income tax collected on his salary as Associate Justice of the Court of Appeals in 1951, and to Justice Fernando Jugo the amount of P2,345.46, representing the income tax collected on his salary from January 1,1950 to October 19, 1950, as Presiding Justice of the Court of Appeals, and from October 20, 1950 to December 31,1950, as Associate Justice of the Supreme Court, without special pronouncement as to costs. Because of the similarity of the two cases, involving as they do the same question of law, they were jointly submitted for determination in the lower court. Judge Higinio B. Macadaeg presiding, in a rather exhaustive and well considered decision found and held that under the doctrine laid down by this Court in the case of Perfecto vs. Meer, 85 Phil., 552, the collection of income taxes from the salaries of Justice Jugo and Justice Endencia was a diminution of their compensation and therefore was in violation of the Constitution of the Philippines, and so ordered the refund of said taxes. We see no profit and necessity in again discussing and considering the proposition and the arguments pro and cons involved in the case of Perfecto vs. Meer, supra, which are raised, brought up and presented here. In that case, we have held despite the ruling enunciated by the United States Federal Supreme Court in the case of O 'Malley vs. Woodrought 307 U. S., 277, that taxing the salary of a judicial officer in the Philippines is a diminution of such salary and so violates the Constitution. We shall now confine our-selves to a discussion and determination of the remaining question of whether or not Republic Act No. 590, particularly section 13, can justify and legalize the collection of income tax on the salary of judicial officers. According to the brief of the Solicitor General on behalf of appellant Collector of Internal Revenue, our decision in the case of Perfecto vs. Meer, supra, was not received favorably by Congress, because immediately after its promulgation, Congress enacted Republic Act No. 590. To bring home his point, the Solicitor General reproduced what he considers the pertinent discussion in the Lower House of House Bill No. 1127 which became Republic Act No. 590. For purposes of reference, we are reproducing section 9, Article VIII of our Constitution:. SEC. 9. The members of the Supreme Court and all judges of inferior courts shall hold office during good behavior, until they reach the age of seventy years, or become incapacitated to discharge the duties of

their office. They shall receive such compensation as may be fixed by law, which shall not be diminished during their continuance in office. Until the Congress shall provide otherwise, the Chief Justice of the Supreme Court shall receive an annual compensation of sixteen thousand pesos, and each Associate Justice, fifteen thousand pesos. As already stated construing and applying the above constitutional provision, we held in the Perfecto case that judicial officers are exempt from the payment of income tax on their salaries, because the collection thereof by the Government was a decrease or diminution of their salaries during their continuance in office, a thing which is expressly prohibited by the Constitution. Thereafter, according to the Solicitor General, because Congress did not favorably receive the decision in the Perfecto case, Congress promulgated Republic Act No. 590, if not to counteract the ruling in that decision, at least now to authorize and legalize the collection of income tax on the salaries of judicial officers. We quote section 13 of Republic Act No. 590: SEC 13. No salary wherever received by any public officer of the Republic of the Philippines shall be considered as exempt from the income tax, payment of which is hereby declared not to be dimunition of his compensation fixed by the Constitution or by law. So we have this situation. The Supreme Court in a decision interpreting the Constitution, particularly section 9, Article VIII, has held that judicial officers are exempt from payment of income tax on their salaries, because the collection thereof was a diminution of such salaries, specifically prohibited by the Constitution. Now comes the Legislature and in section 13, Republic Act No. 590, says that "no salary wherever received by any public officer of the Republic (naturally including a judicial officer) shall be considered as exempt from the income tax," and proceeds to declare that payment of said income tax is not a diminution of his compensation. Can the Legislature validly do this? May the Legislature lawfully declare the collection of income tax on the salary of a public official, specially a judicial officer, not a decrease of his salary, after the Supreme Court has found and decided otherwise? To determine this question, we shall have to go back to the fundamental principles regarding separation of powers. Under our system of constitutional government, the Legislative department is assigned the power to make and enact laws. The Executive department is charged with the execution of carrying out of the provisions of said laws. But the interpretation and application of said laws belong exclusively to the Judicial department. And this authority to interpret and apply the laws extends to the Constitution. Before the courts can determine whether a law is constitutional or not, it will have to interpret and ascertain the meaning not only of said law, but also of the pertinent portion of the Constitution in order to decide whether there is a conflict between the two, because if there is, then the law will have to give way and has to be declared invalid and unconstitutional. Defining and interpreting the law is a judicial function and the legislative branch may not limit or restrict the power granted to the courts by the Constitution. (Bandy vs. Mickelson et al., 44N. W., 2nd 341, 342.) When it is clear that a statute transgresses the authority vested in the legislature by the Constitution, it is the duty of the courts to declare the act unconstitutional because they cannot shrink from it without violating their oaths of office. This duty of the courts to maintain the Constitution as the fundamental law of the state is imperative and unceasing; and, as Chief Justice Marshall said, whenever a statute is in violation of the fundamental law, the courts must so adjudge and thereby give effect to the Constitution. Any other course would lead to the destruction of the Constitution. Since the question as to the constitutionality of a statute is a judicial matter, the courts will not decline the exercise of jurisdiction upon the suggestion that action might be taken by political agencies in disregard of the judgment of the judicial tribunals. (11 Am. Jur., 714-715.) Under the American system of constitutional government, among the most important functions in trusted to the judiciary are the interpreting of Constitutions and, as a closely connected power, the determination of whether laws and acts of the legislature are or are not contrary to the provisions of the Federal and State Constitutions. (11 Am. Jur., 905.).

By legislative fiat as enunciated in section 13, Republic Act NO. 590, Congress says that taxing the salary of a judicial officer is not a decrease of compensation. This is a clear example of interpretation or ascertainment of the meaning of the phrase "which shall not be diminished during their continuance in office," found in section 9, Article VIII of the Constitution, referring to the salaries of judicial officers. This act of interpreting the Constitution or any part thereof by the Legislature is an invasion of the well-defined and established province and jurisdiction of the Judiciary. The rule is recognized elsewhere that the legislature cannot pass any declaratory act, or act declaratory of what the law was before its passage, so as to give it any binding weight with the courts. A legislative definition of a word as used in a statute is not conclusive of its meaning as used elsewhere; otherwise, the legislature would be usurping a judicial function in defining a term. (11 Am. Jur., 914, emphasis supplied) The legislature cannot, upon passing a law which violates a constitutional provision, validate it so as to prevent an attack thereon in the courts, by a declaration that it shall be so construed as not to violate the constitutional inhibition. (11 Am. Jur., 919, emphasis supplied) We have already said that the Legislature under our form of government is assigned the task and the power to make and enact laws, but not to interpret them. This is more true with regard to the interpretation of the basic law, the Constitution, which is not within the sphere of the Legislative department. If the Legislature may declare what a law means, or what a specific portion of the Constitution means, especially after the courts have in actual case ascertain its meaning by interpretation and applied it in a decision, this would surely cause confusion and instability in judicial processes and court decisions. Under such a system, a final court determination of a case based on a judicial interpretation of the law of the Constitution may be undermined or even annulled by a subsequent and different interpretation of the law or of the Constitution by the Legislative department. That would be neither wise nor desirable, besides being clearly violative of the fundamental, principles of our constitutional system of government, particularly those governing the separation of powers. So much for the constitutional aspect of the case. Considering the practical side thereof, we believe that the collection of income tax on a salary is an actual and evident diminution thereof. Under the old system where the in-come tax was paid at the end of the year or sometime thereafter, the decrease may not be so apparent and clear. All that the official who had previously received his full salary was called upon to do, was to fulfill his obligation and to exercise his privilege of paying his income tax on his salary. His salary fixed by law was received by him in the amount of said tax comes from his other sources of income, he may not fully realize the fact that his salary had been decreased in the amount of said income tax. But under the present system of withholding the income tax at the source, where the full amount of the income tax corresponding to his salary is computed in advance and divided into equal portions corresponding to the number of pay-days during the year and actually deducted from his salary corresponding to each payday, said official actually does not receive his salary in full, because the income tax is deducted therefrom every payday, that is to say, twice a month. Let us take the case of Justice Endencia. As Associate Justice of the Court of Appeals, his salary is fixed at p12,000 a year, that is to say, he should receive P1,000 a month or P500 every payday, fifteenth and end of month. In the present case, the amount collected by the Collector of Internal Revenue on said salary is P1,744.45 for one year. Divided by twelve (months) we shall have P145.37 a month. And further dividing it by two paydays will bring it down to P72.685, which is the income tax deducted form the collected on his salary each half month. So, if Justice Endencia's salary as a judicial officer were not exempt from payment of the income tax, instead of receiving P500 every payday, he would be actually receiving P427.31 only, and instead of receiving P12,000 a year, he would be receiving but P10,255.55. Is it not therefor clear that every payday, his salary is actually decreased by P72.685 and every year is decreased by P1,744.45? Reading the discussion in the lower House in connection with House Bill No. 1127, which became Republic Act No. 590, it would seem that one of the main reasons behind the enactment of the law was the feeling among certain legislators that members of the Supreme Court

should not enjoy any exemption and that as citizens, out of patriotism and love for their country, they should pay income tax on their salaries. It might be stated in this connection that the exemption is not enjoyed by the members of the Supreme Court alone but also by all judicial officers including Justices of the Court of Appeals and judges of inferior courts. The exemption also extends to other constitutional officers, like the President of the Republic, the Auditor General, the members of the Commission on Elections, and possibly members of the Board of Tax Appeals, commissioners of the Public Service Commission, and judges of the Court of Industrial Relations. Compares to the number of all these officials, that of the Supreme Court Justices is relatively insignificant. There are more than 990 other judicial officers enjoying the exemption, including 15 Justices of the Court of Appeals, about 107 Judges of First Instance, 38 Municipal Judges and about 830 Justices of the Peace. The reason behind the exemption in the Constitution, as interpreted by the United States Federal Supreme Court and this Court, is to preserve the independence of the Judiciary, not only of this High Tribunal but of the other courts, whose present membership number more than 990 judicial officials. The exemption was not primarily intended to benefit judicial officers, but was grounded on public policy. As said by Justice Van Devanter of the United States Supreme Court in the case of Evans vs. Gore (253 U. S., 245): The primary purpose of the prohibition against diminution was not to benefit the judges, but, like the clause in respect of tenure, to attract good and competent men to the bench and to promote that independence of action and judgment which is essential to the maintenance of the guaranties, limitations and pervading principles of the Constitution and to the administration of justice without respect to person and with equal concern for the poor and the rich. Such being its purpose, it is to be construed, not as a private grant, but as a limitation imposed in the public interest; in other words, not restrictively, but in accord with its spirit and the principle on which it proceeds. Having in mind the limited number of judicial officers in the Philippines enjoying this exemption, especially when the great bulk thereof are justices of the peace, many of them receiving as low as P200 a month, and considering further the other exemptions allowed by the income tax law, such as P3,000 for a married person and P600 for each dependent, the amount of national revenue to be derived from income tax on the salaries of judicial officers, were if not for the constitutional exemption, could not be large or substantial. But even if it were otherwise, it should not affect, much less outweigh the purpose and the considerations that prompted the establishment of the constitutional exemption. In the same case of Evans vs. Gore, supra, the Federal Supreme Court declared "that they (fathers of the Constitution) regarded the independence of the judges as far as greater importance than any revenue that could come from taxing their salaries. When a judicial officer assumed office, he does not exactly ask for exemption from payment of income tax on his salary, as a privilege . It is already attached to his office, provided and secured by the fundamental law, not primarily for his benefit, but based on public interest, to secure and preserve his independence of judicial thought and action. When we come to the members of the Supreme Court, this excemption to them is relatively of short duration. Because of the limited membership in this High Tribunal, eleven, and due to the high standards of experience, practice and training required, one generally enters its portals and comes to join its membership quite late in life, on the aver-age, around his sixtieth year, and being required to retire at seventy, assuming that he does not die or become incapacitated earlier, naturally he is not in a position to receive the benefit of exemption for long. It is rather to the justices of the peace that the exemption can give more benefit. They are relatively more numerous, and because of the meager salary they receive, they can less afford to pay the income tax on it and its diminution by the amount of the income tax if paid would be real, substantial and onerous. Considering exemption in the abstract, there is nothing unusual or abhorrent in it, as long as it is based on public policy or public interest. While all other citizens are subject to arrest when charged with the commission of a crime, members of the Senate and House of Representatives except in cases of treason, felony and breach of the peace are exempt from arrest, during their attendance in the session of the Legislature; and while all other citizens are generally liable for any speech, remark or statement, oral or written, tending to cause the

dishonor, discredit or contempt of a natural or juridical person or to blacken the memory of one who is dead, Senators and Congressmen in making such statements during their sessions are extended immunity and exemption. And as to tax exemption, there are not a few citizens who enjoy this exemption. Persons, natural and juridical, are exempt from taxes on their lands, buildings and improvements thereon when used exclusively for educational purposes, even if they derive income therefrom. (Art. VI, Sec. 22 [3].) Holders of government bonds are exempted from the payment of taxes on the income or interest they receive therefrom (sec. 29 (b) [4], National Internal Revenue Code as amended by Republic Act No. 566). Payments or income received by any person residing in the Philippines under the laws of the United States administered by the United States Veterans Administration are exempt from taxation. (Republic Act No. 360). Funds received by officers and enlisted men of the Philippine Army who served in the Armed Forces of the United States, allowances earned by virtue of such services corresponding to the taxable years 1942 to 1945, inclusive, are exempted from income tax. (Republic Act No. 210). The payment of wages and allowances of officers and enlisted men of the Army Forces of the Philippines sent to Korea are also exempted from taxation. (Republic Act No. 35). In other words, for reasons of public policy and public interest, a citizen may justifiably by constitutional provision or statute be exempted from his ordinary obligation of paying taxes on his income. Under the same public policy and perhaps for the same it not higher considerations, the framers of the Constitution deemed it wise and necessary to exempt judicial officers from paying taxes on their salaries so as not to decrease their compensation, thereby insuring the independence of the Judiciary. In conclusion we reiterate the doctrine laid down in the case of Perfecto vs. Meer, supra, to the effect that the collection of income tax on the salary of a judicial officer is a diminution thereof and so violates the Constitution. We further hold that the interpretation and application of the Constitution and of statutes is within the exclusive province and jurisdiction of the Judicial department, and that in enacting a law, the Legislature may not legally provide therein that it be interpreted in such a way that it may not violate a Constitutional prohibition, thereby tying the hands of the courts in their task of later interpreting said statute, specially when the interpretation sought and provided in said statute runs counter to a previous interpretation already given in a case by the highest court of the land. In the views of the foregoing considerations, the decision appealed from is hereby affirmed, with no pronouncement as to costs. G.R. No. L-45081 July 15, 1936

(2) That on October 7, 1935, the provincial board of canvassers, proclaimed the petitioner as member-elect of the National Assembly for the said district, for having received the most number of votes; (3) That on November 15, 1935, the petitioner took his oath of office; (4) That on December 3, 1935, the National Assembly in session assembled, passed the following resolution: [No. 8] RESOLUCION CONFIRMANDO LAS ACTAS DE AQUELLOS DIPUTADOS CONTRA QUIENES NO SE HA PRESENTADO PROTESTA. Se resuelve: Que las actas de eleccion de los Diputados contra quienes no se hubiere presentado debidamente una protesta antes de la adopcion de la presente resolucion sean, como por la presente, son aprobadas y confirmadas. Adoptada, 3 de diciembre, 1935. (5) That on December 8, 1935, the herein respondent Pedro Ynsua filed before the Electoral Commission a "Motion of Protest" against the election of the herein petitioner, Jose A. Angara, being the only protest filed after the passage of Resolutions No. 8 aforequoted, and praying, among other-things, that said respondent be declared elected member of the National Assembly for the first district of Tayabas, or that the election of said position be nullified; (6) That on December 9, 1935, the Electoral Commission adopted a resolution, paragraph 6 of which provides: 6. La Comision no considerara ninguna protesta que no se haya presentado en o antes de este dia. (7) That on December 20, 1935, the herein petitioner, Jose A. Angara, one of the respondents in the aforesaid protest, filed before the Electoral Commission a "Motion to Dismiss the Protest", alleging (a) that Resolution No. 8 of Dismiss the Protest", alleging (a) that Resolution No. 8 of the National Assembly was adopted in the legitimate exercise of its constitutional prerogative to prescribe the period during which protests against the election of its members should be presented; (b) that the aforesaid resolution has for its object, and is the accepted formula for, the limitation of said period; and (c) that the protest in question was filed out of the prescribed period; (8) That on December 27, 1935, the herein respondent, Pedro Ynsua, filed an "Answer to the Motion of Dismissal" alleging that there is no legal or constitutional provision barring the presentation of a protest against the election of a member of the National Assembly after confirmation; (9) That on December 31, 1935, the herein petitioner, Jose A. Angara, filed a "Reply" to the aforesaid "Answer to the Motion of Dismissal"; (10) That the case being submitted for decision, the Electoral Commission promulgated a resolution on January 23, 1936, denying herein petitioner's "Motion to Dismiss the Protest." The application of the petitioner sets forth the following grounds for the issuance of the writ prayed for: (a) That the Constitution confers exclusive jurisdiction upon the electoral Commission solely as regards the merits of contested elections to the National Assembly; (b) That the Constitution excludes from said jurisdiction the power to regulate the proceedings of said election contests, which power has been reserved to the Legislative Department of the Government or the National Assembly; (c) That like the Supreme Court and other courts created in pursuance of the Constitution, whose exclusive jurisdiction relates solely to deciding the merits of controversies submitted to them for decision and to matters involving their internal organization, the Electoral Commission can regulate its proceedings only if the National Assembly has not availed of its primary power to so regulate such proceedings;

JOSE A. ANGARA, petitioner, vs. THE ELECTORAL COMMISSION, PEDRO YNSUA, MIGUEL CASTILLO, and DIONISIO C. MAYOR, respondents. Godofredo Reyes for petitioner. Office of the Solicitor General Hilado for respondent Electoral Commission. Pedro Ynsua in his own behalf. No appearance for other respondents. LAUREL, J.: This is an original action instituted in this court by the petitioner, Jose A. Angara, for the issuance of a writ of prohibition to restrain and prohibit the Electoral Commission, one of the respondents, from taking further cognizance of the protest filed by Pedro Ynsua, another respondent, against the election of said petitioner as member of the National Assembly for the first assembly district of the Province of Tayabas. The facts of this case as they appear in the petition and as admitted by the respondents are as follows: (1) That in the elections of September 17, 1935, the petitioner, Jose A. Angara, and the respondents, Pedro Ynsua, Miguel Castillo and Dionisio Mayor, were candidates voted for the position of member of the National Assembly for the first district of the Province of Tayabas;

(d) That Resolution No. 8 of the National Assembly is, therefore, valid and should be respected and obeyed; (e) That under paragraph 13 of section 1 of the ordinance appended to the Constitution and paragraph 6 of article 7 of the Tydings-McDuffie Law (No. 127 of the 73rd Congress of the United States) as well as under section 1 and 3 (should be sections 1 and 2) of article VIII of the Constitution, this Supreme Court has jurisdiction to pass upon the fundamental question herein raised because it involves an interpretation of the Constitution of the Philippines. On February 25, 1936, the Solicitor-General appeared and filed an answer in behalf of the respondent Electoral Commission interposing the following special defenses: (a) That the Electoral Commission has been created by the Constitution as an instrumentality of the Legislative Department invested with the jurisdiction to decide "all contests relating to the election, returns, and qualifications of the members of the National Assembly"; that in adopting its resolution of December 9, 1935, fixing this date as the last day for the presentation of protests against the election of any member of the National Assembly, it acted within its jurisdiction and in the legitimate exercise of the implied powers granted it by the Constitution to adopt the rules and regulations essential to carry out the power and functions conferred upon the same by the fundamental law; that in adopting its resolution of January 23, 1936, overruling the motion of the petitioner to dismiss the election protest in question, and declaring itself with jurisdiction to take cognizance of said protest, it acted in the legitimate exercise of its quasi-judicial functions a an instrumentality of the Legislative Department of the Commonwealth Government, and hence said act is beyond the judicial cognizance or control of the Supreme Court; (b) That the resolution of the National Assembly of December 3, 1935, confirming the election of the members of the National Assembly against whom no protest had thus far been filed, could not and did not deprive the electoral Commission of its jurisdiction to take cognizance of election protests filed within the time that might be set by its own rules: (c) That the Electoral Commission is a body invested with quasijudicial functions, created by the Constitution as an instrumentality of the Legislative Department, and is not an "inferior tribunal, or corporation, or board, or person" within the purview of section 226 and 516 of the Code of Civil Procedure, against which prohibition would lie. The respondent Pedro Ynsua, in his turn, appeared and filed an answer in his own behalf on March 2, 1936, setting forth the following as his special defense: (a) That at the time of the approval of the rules of the Electoral Commission on December 9, 1935, there was no existing law fixing the period within which protests against the election of members of the National Assembly should be filed; that in fixing December 9, 1935, as the last day for the filing of protests against the election of members of the National Assembly, the Electoral Commission was exercising a power impliedly conferred upon it by the Constitution, by reason of its quasi-judicial attributes; (b) That said respondent presented his motion of protest before the Electoral Commission on December 9, 1935, the last day fixed by paragraph 6 of the rules of the said Electoral Commission; (c) That therefore the Electoral Commission acquired jurisdiction over the protest filed by said respondent and over the parties thereto, and the resolution of the Electoral Commission of January 23, 1936, denying petitioner's motion to dismiss said protest was an act within the jurisdiction of the said commission, and is not reviewable by means of a writ of prohibition; (d) That neither the law nor the Constitution requires confirmation by the National Assembly of the election of its members, and that such confirmation does not operate to limit the period within which protests should be filed as to deprive the Electoral Commission of jurisdiction over protest filed subsequent thereto; (e) That the Electoral Commission is an independent entity created by the Constitution, endowed with quasi-judicial functions, whose decision are final and unappealable;

( f ) That the electoral Commission, as a constitutional creation, is not an inferior tribunal, corporation, board or person, within the terms of sections 226 and 516 of the Code of Civil Procedure; and that neither under the provisions of sections 1 and 2 of article II (should be article VIII) of the Constitution and paragraph 13 of section 1 of the Ordinance appended thereto could it be subject in the exercise of its quasi-judicial functions to a writ of prohibition from the Supreme Court; (g) That paragraph 6 of article 7 of the Tydings-McDuffie Law (No. 127 of the 73rd Congress of the united States) has no application to the case at bar. The case was argued before us on March 13, 1936. Before it was submitted for decision, the petitioner prayed for the issuance of a preliminary writ of injunction against the respondent Electoral Commission which petition was denied "without passing upon the merits of the case" by resolution of this court of March 21, 1936. There was no appearance for the other respondents. The issues to be decided in the case at bar may be reduced to the following two principal propositions: 1. Has the Supreme Court jurisdiction over the Electoral Commission and the subject matter of the controversy upon the foregoing related facts, and in the affirmative, 2. Has the said Electoral Commission acted without or in excess of its jurisdiction in assuming to the cognizance of the protest filed the election of the herein petitioner notwithstanding the previous confirmation of such election by resolution of the National Assembly? We could perhaps dispose of this case by passing directly upon the merits of the controversy. However, the question of jurisdiction having been presented, we do not feel justified in evading the issue. Being a case prim impressionis, it would hardly be consistent with our sense of duty to overlook the broader aspect of the question and leave it undecided. Neither would we be doing justice to the industry and vehemence of counsel were we not to pass upon the question of jurisdiction squarely presented to our consideration. The separation of powers is a fundamental principle in our system of government. It obtains not through express provision but by actual division in our Constitution. Each department of the government has exclusive cognizance of matters within its jurisdiction, and is supreme within its own sphere. But it does not follow from the fact that the three powers are to be kept separate and distinct that the Constitution intended them to be absolutely unrestrained and independent of each other. The Constitution has provided for an elaborate system of checks and balances to secure coordination in the workings of the various departments of the government. For example, the Chief Executive under our Constitution is so far made a check on the legislative power that this assent is required in the enactment of laws. This, however, is subject to the further check that a bill may become a law notwithstanding the refusal of the President to approve it, by a vote of two-thirds or three-fourths, as the case may be, of the National Assembly. The President has also the right to convene the Assembly in special session whenever he chooses. On the other hand, the National Assembly operates as a check on the Executive in the sense that its consent through its Commission on Appointments is necessary in the appointments of certain officers; and the concurrence of a majority of all its members is essential to the conclusion of treaties. Furthermore, in its power to determine what courts other than the Supreme Court shall be established, to define their jurisdiction and to appropriate funds for their support, the National Assembly controls the judicial department to a certain extent. The Assembly also exercises the judicial power of trying impeachments. And the judiciary in turn, with the Supreme Court as the final arbiter, effectively checks the other departments in the exercise of its power to determine the law, and hence to declare executive and legislative acts void if violative of the Constitution. But in the main, the Constitution has blocked out with deft strokes and in bold lines, allotment of power to the executive, the legislative and the judicial departments of the government. The overlapping and interlacing of functions and duties between the several departments, however, sometimes makes it hard to say just where the one leaves off and the other begins. In times of social disquietude or political

excitement, the great landmarks of the Constitution are apt to be forgotten or marred, if not entirely obliterated. In cases of conflict, the judicial department is the only constitutional organ which can be called upon to determine the proper allocation of powers between the several departments and among the integral or constituent units thereof. As any human production, our Constitution is of course lacking perfection and perfectibility, but as much as it was within the power of our people, acting through their delegates to so provide, that instrument which is the expression of their sovereignty however limited, has established a republican government intended to operate and function as a harmonious whole, under a system of checks and balances, and subject to specific limitations and restrictions provided in the said instrument. The Constitution sets forth in no uncertain language the restrictions and limitations upon governmental powers and agencies. If these restrictions and limitations are transcended it would be inconceivable if the Constitution had not provided for a mechanism by which to direct the course of government along constitutional channels, for then the distribution of powers would be mere verbiage, the bill of rights mere expressions of sentiment, and the principles of good government mere political apothegms. Certainly, the limitation and restrictions embodied in our Constitution are real as they should be in any living constitution. In the United States where no express constitutional grant is found in their constitution, the possession of this moderating power of the courts, not to speak of its historical origin and development there, has been set at rest by popular acquiescence for a period of more than one and a half centuries. In our case, this moderating power is granted, if not expressly, by clear implication from section 2 of article VIII of our constitution. The Constitution is a definition of the powers of government. Who is to determine the nature, scope and extent of such powers? The Constitution itself has provided for the instrumentality of the judiciary as the rational way. And when the judiciary mediates to allocate constitutional boundaries, it does not assert any superiority over the other departments; it does not in reality nullify or invalidate an act of the legislature, but only asserts the solemn and sacred obligation assigned to it by the Constitution to determine conflicting claims of authority under the Constitution and to establish for the parties in an actual controversy the rights which that instrument secures and guarantees to them. This is in truth all that is involved in what is termed "judicial supremacy" which properly is the power of judicial review under the Constitution. Even then, this power of judicial review is limited to actual cases and controversies to be exercised after full opportunity of argument by the parties, and limited further to the constitutional question raised or the very lis mota presented. Any attempt at abstraction could only lead to dialectics and barren legal questions and to sterile conclusions unrelated to actualities. Narrowed as its function is in this manner, the judiciary does not pass upon questions of wisdom, justice or expediency of legislation. More than that, courts accord the presumption of constitutionality to legislative enactments, not only because the legislature is presumed to abide by the Constitution but also because the judiciary in the determination of actual cases and controversies must reflect the wisdom and justice of the people as expressed through their representatives in the executive and legislative departments of the governments of the government. But much as we might postulate on the internal checks of power provided in our Constitution, it ought not the less to be remembered that, in the language of James Madison, the system itself is not "the chief palladium of constitutional liberty . . . the people who are authors of this blessing must also be its guardians . . . their eyes must be ever ready to mark, their voice to pronounce . . . aggression on the authority of their constitution." In the Last and ultimate analysis, then, must the success of our government in the unfolding years to come be tested in the crucible of Filipino minds and hearts than in consultation rooms and court chambers. In the case at bar, the national Assembly has by resolution (No. 8) of December 3, 1935, confirmed the election of the herein petitioner to the said body. On the other hand, the Electoral Commission has by resolution adopted on December 9, 1935, fixed said date as the last day for the filing of protests against the election, returns and qualifications of members of the National Assembly, notwithstanding the previous confirmation made by the National Assembly as aforesaid. If, as contended by the petitioner, the resolution of the National Assembly has the effect of cutting off the power of the Electoral Commission to entertain protests against the election, returns and qualifications of members of the National Assembly, submitted after December 3, 1935,

then the resolution of the Electoral Commission of December 9, 1935, is mere surplusage and had no effect. But, if, as contended by the respondents, the Electoral Commission has the sole power of regulating its proceedings to the exclusion of the National Assembly, then the resolution of December 9, 1935, by which the Electoral Commission fixed said date as the last day for filing protests against the election, returns and qualifications of members of the National Assembly, should be upheld. Here is then presented an actual controversy involving as it does a conflict of a grave constitutional nature between the National Assembly on the one hand, and the Electoral Commission on the other. From the very nature of the republican government established in our country in the light of American experience and of our own, upon the judicial department is thrown the solemn and inescapable obligation of interpreting the Constitution and defining constitutional boundaries. The Electoral Commission, as we shall have occasion to refer hereafter, is a constitutional organ, created for a specific purpose, namely to determine all contests relating to the election, returns and qualifications of the members of the National Assembly. Although the Electoral Commission may not be interfered with, when and while acting within the limits of its authority, it does not follow that it is beyond the reach of the constitutional mechanism adopted by the people and that it is not subject to constitutional restrictions. The Electoral Commission is not a separate department of the government, and even if it were, conflicting claims of authority under the fundamental law between department powers and agencies of the government are necessarily determined by the judiciary in justifiable and appropriate cases. Discarding the English type and other European types of constitutional government, the framers of our constitution adopted the American type where the written constitution is interpreted and given effect by the judicial department. In some countries which have declined to follow the American example, provisions have been inserted in their constitutions prohibiting the courts from exercising the power to interpret the fundamental law. This is taken as a recognition of what otherwise would be the rule that in the absence of direct prohibition courts are bound to assume what is logically their function. For instance, the Constitution of Poland of 1921, expressly provides that courts shall have no power to examine the validity of statutes (art. 81, chap. IV). The former Austrian Constitution contained a similar declaration. In countries whose constitutions are silent in this respect, courts have assumed this power. This is true in Norway, Greece, Australia and South Africa. Whereas, in Czechoslovakia (arts. 2 and 3, Preliminary Law to constitutional Charter of the Czechoslovak Republic, February 29, 1920) and Spain (arts. 121-123, Title IX, Constitutional of the Republic of 1931) especial constitutional courts are established to pass upon the validity of ordinary laws. In our case, the nature of the present controversy shows the necessity of a final constitutional arbiter to determine the conflict of authority between two agencies created by the Constitution. Were we to decline to take cognizance of the controversy, who will determine the conflict? And if the conflict were left undecided and undetermined, would not a void be thus created in our constitutional system which may be in the long run prove destructive of the entire framework? To ask these questions is to answer them. Natura vacuum abhorret, so must we avoid exhaustion in our constitutional system. Upon principle, reason and authority, we are clearly of the opinion that upon the admitted facts of the present case, this court has jurisdiction over the Electoral Commission and the subject mater of the present controversy for the purpose of determining the character, scope and extent of the constitutional grant to the Electoral Commission as "the sole judge of all contests relating to the election, returns and qualifications of the members of the National Assembly." Having disposed of the question of jurisdiction, we shall now proceed to pass upon the second proposition and determine whether the Electoral Commission has acted without or in excess of its jurisdiction in adopting its resolution of December 9, 1935, and in assuming to take cognizance of the protest filed against the election of the herein petitioner notwithstanding the previous confirmation thereof by the National Assembly on December 3, 1935. As able counsel for the petitioner has pointed out, the issue hinges on the interpretation of section 4 of Article VI of the Constitution which provides: "SEC. 4. There shall be an Electoral Commission composed of three Justice of the Supreme Court designated by the Chief Justice, and of six Members chosen by the National Assembly, three of whom shall be nominated by the party having the largest number of votes, and three by the party having the second largest number of votes therein. The

senior Justice in the Commission shall be its Chairman. The Electoral Commission shall be the sole judge of all contests relating to the election, returns and qualifications of the members of the National Assembly." It is imperative, therefore, that we delve into the origin and history of this constitutional provision and inquire into the intention of its framers and the people who adopted it so that we may properly appreciate its full meaning, import and significance. The original provision regarding this subject in the Act of Congress of July 1, 1902 (sec. 7, par. 5) laying down the rule that "the assembly shall be the judge of the elections, returns, and qualifications of its members", was taken from clause 1 of section 5, Article I of the Constitution of the United States providing that "Each House shall be the Judge of the Elections, Returns, and Qualifications of its own Members, . . . ." The Act of Congress of August 29, 1916 (sec. 18, par. 1) modified this provision by the insertion of the word "sole" as follows: "That the Senate and House of Representatives, respectively, shall be the sole judges of the elections, returns, and qualifications of their elective members . . ." apparently in order to emphasize the exclusive the Legislative over the particular case s therein specified. This court has had occasion to characterize this grant of power to the Philippine Senate and House of Representatives, respectively, as "full, clear and complete" (Veloso vs. Boards of Canvassers of Leyte and Samar [1919], 39 Phil., 886, 888.) The first step towards the creation of an independent tribunal for the purpose of deciding contested elections to the legislature was taken by the sub-committee of five appointed by the Committee on Constitutional Guarantees of the Constitutional Convention, which sub-committee submitted a report on August 30, 1934, recommending the creation of a Tribunal of Constitutional Security empowered to hear legislature but also against the election of executive officers for whose election the vote of the whole nation is required, as well as to initiate impeachment proceedings against specified executive and judicial officer. For the purpose of hearing legislative protests, the tribunal was to be composed of three justices designated by the Supreme Court and six members of the house of the legislature to which the contest corresponds, three members to be designed by the majority party and three by the minority, to be presided over by the Senior Justice unless the Chief Justice is also a member in which case the latter shall preside. The foregoing proposal was submitted by the Committee on Constitutional Guarantees to the Convention on September 15, 1934, with slight modifications consisting in the reduction of the legislative representation to four members, that is, two senators to be designated one each from the two major parties in the Senate and two representatives to be designated one each from the two major parties in the House of Representatives, and in awarding representation to the executive department in the persons of two representatives to be designated by the President. Meanwhile, the Committee on Legislative Power was also preparing its report. As submitted to the Convention on September 24, 1934 subsection 5, section 5, of the proposed Article on the Legislative Department, reads as follows: The elections, returns and qualifications of the members of either house and all cases contesting the election of any of their members shall be judged by an Electoral Commission, constituted, as to each House, by three members elected by the members of the party having the largest number of votes therein, three elected by the members of the party having the second largest number of votes, and as to its Chairman, one Justice of the Supreme Court designated by the Chief Justice. The idea of creating a Tribunal of Constitutional Security with comprehensive jurisdiction as proposed by the Committee on Constitutional Guarantees which was probably inspired by the Spanish plan (art. 121, Constitution of the Spanish Republic of 1931), was soon abandoned in favor of the proposition of the Committee on Legislative Power to create a similar body with reduced powers and with specific and limited jurisdiction, to be designated as a Electoral Commission. The Sponsorship Committee modified the proposal of the Committee on Legislative Power with respect to the composition of the Electoral Commission and made further changes in phraseology to suit the project of adopting a unicameral instead of a bicameral legislature. The draft as finally submitted to the Convention on October 26, 1934, reads as follows:

(6) The elections, returns and qualifications of the Members of the National Assembly and all cases contesting the election of any of its Members shall be judged by an Electoral Commission, composed of three members elected by the party having the largest number of votes in the National Assembly, three elected by the members of the party having the second largest number of votes, and three justices of the Supreme Court designated by the Chief Justice, the Commission to be presided over by one of said justices. During the discussion of the amendment introduced by Delegates Labrador, Abordo, and others, proposing to strike out the whole subsection of the foregoing draft and inserting in lieu thereof the following: "The National Assembly shall be the soled and exclusive judge of the elections, returns, and qualifications of the Members", the following illuminating remarks were made on the floor of the Convention in its session of December 4, 1934, as to the scope of the said draft: xxx xxx xxx

Mr. VENTURA. Mr. President, we have a doubt here as to the scope of the meaning of the first four lines, paragraph 6, page 11 of the draft, reading: "The elections, returns and qualifications of the Members of the National Assembly and all cases contesting the election of any of its Members shall be judged by an Electoral Commission, . . ." I should like to ask from the gentleman from Capiz whether the election and qualification of the member whose elections is not contested shall also be judged by the Electoral Commission. Mr. ROXAS. If there is no question about the election of the members, there is nothing to be judged; that is why the word "judge" is used to indicate a controversy. If there is no question about the election of a member, there is nothing to be submitted to the Electoral Commission and there is nothing to be determined. Mr. VENTURA. But does that carry the idea also that the Electoral Commission shall confirm also the election of those whose election is not contested? Mr. ROXAS. There is no need of confirmation. As the gentleman knows, the action of the House of Representatives confirming the election of its members is just a matter of the rules of the assembly. It is not constitutional. It is not necessary. After a man files his credentials that he has been elected, that is sufficient, unless his election is contested. Mr. VENTURA. But I do not believe that that is sufficient, as we have observed that for purposes of the auditor, in the matter of election of a member to a legislative body, because he will not authorize his pay. Mr. ROXAS. Well, what is the case with regards to the municipal president who is elected? What happens with regards to the councilors of a municipality? Does anybody confirm their election? The municipal council does this: it makes a canvass and proclaims in this case the municipal council proclaims who has been elected, and it ends there, unless there is a contest. It is the same case; there is no need on the part of the Electoral Commission unless there is a contest. The first clause refers to the case referred to by the gentleman from Cavite where one person tries to be elected in place of another who was declared elected. From example, in a case when the residence of the man who has been elected is in question, or in case the citizenship of the man who has been elected is in question. However, if the assembly desires to annul the power of the commission, it may do so by certain maneuvers upon its first meeting when the returns are submitted to the assembly. The purpose is to give to the Electoral Commission all the powers exercised by the assembly referring to the elections, returns and qualifications of the members. When there is no contest, there is nothing to be judged. Mr. VENTURA. Then it should be eliminated. Mr. ROXAS. But that is a different matter, I think Mr. Delegate. Mr. CINCO. Mr. President, I have a similar question as that propounded by the gentleman from Ilocos Norte when I arose a while ago. However I want to ask more questions from the delegate from Capiz. This paragraph 6 on page 11 of the draft cites cases contesting

the election as separate from the first part of the sections which refers to elections, returns and qualifications. Mr. ROXAS. That is merely for the sake of clarity. In fact the cases of contested elections are already included in the phrase "the elections, returns and qualifications." This phrase "and contested elections" was inserted merely for the sake of clarity. Mr. CINCO. Under this paragraph, may not the Electoral Commission, at its own instance, refuse to confirm the elections of the members." Mr. ROXAS. I do not think so, unless there is a protest. Mr. LABRADOR. Mr. President, will the gentleman yield? THE PRESIDENT. The gentleman may yield, if he so desires. Mr. ROXAS. Willingly. Mr. LABRADOR. Does not the gentleman from Capiz believe that unless this power is granted to the assembly, the assembly on its own motion does not have the right to contest the election and qualification of its members? Mr. ROXAS. I have no doubt but that the gentleman is right. If this draft is retained as it is, even if two-thirds of the assembly believe that a member has not the qualifications provided by law, they cannot remove him for that reason. Mr. LABRADOR. So that the right to remove shall only be retained by the Electoral Commission. Mr. ROXAS. By the assembly for misconduct. Mr. LABRADOR. I mean with respect to the qualifications of the members. Mr. ROXAS. Yes, by the Electoral Commission. Mr. LABRADOR. So that under this draft, no member of the assembly has the right to question the eligibility of its members? Mr. ROXAS. Before a member can question the eligibility, he must go to the Electoral Commission and make the question before the Electoral Commission. Mr. LABRADOR. So that the Electoral Commission shall decide whether the election is contested or not contested. Mr. ROXAS. Yes, sir: that is the purpose. Mr. PELAYO. Mr. President, I would like to be informed if the Electoral Commission has power and authority to pass upon the qualifications of the members of the National Assembly even though that question has not been raised. Mr. ROXAS. I have just said that they have no power, because they can only judge. In the same session, the first clause of the aforesaid draft reading "The election, returns and qualifications of the members of the National Assembly and" was eliminated by the Sponsorship Committee in response to an amendment introduced by Delegates Francisco, Ventura, Vinzons, Rafols, Lim, Mumar and others. In explaining the difference between the original draft and the draft as amended, Delegate Roxas speaking for the Sponsorship Committee said: xxx xxx xxx

protesta contra las actas." Before the amendment of Delegate Labrador was voted upon the following interpellation also took place: El Sr. CONEJERO. Antes de votarse la enmienda, quisiera El Sr. PRESIDENTE. Que dice el Comite? El Sr. ROXAS. Con mucho gusto. El Sr. CONEJERO. Tal como esta el draft, dando tres miembros a la mayoria, y otros tres a la minoria y tres a la Corte Suprema, no cree Su Seoria que esto equivale practicamente a dejar el asunto a los miembros del Tribunal Supremo? El Sr. ROXAS. Si y no. Creemos que si el tribunal o la Commission esta constituido en esa forma, tanto los miembros de la mayoria como los de la minoria asi como los miembros de la Corte Suprema consideraran la cuestion sobre la base de sus meritos, sabiendo que el partidismo no es suficiente para dar el triunfo. El Sr. CONEJERO. Cree Su Seoria que en un caso como ese, podriamos hacer que tanto los de la mayoria como los de la minoria prescindieran del partidismo? El Sr. ROXAS. Creo que si, porque el partidismo no les daria el triunfo. xxx xxx xxx

The amendment introduced by Delegates Labrador, Abordo and others seeking to restore the power to decide contests relating to the election, returns and qualifications of members of the National Assembly to the National Assembly itself, was defeated by a vote of ninety-eight (98) against fifty-six (56). In the same session of December 4, 1934, Delegate Cruz (C.) sought to amend the draft by reducing the representation of the minority party and the Supreme Court in the Electoral Commission to two members each, so as to accord more representation to the majority party. The Convention rejected this amendment by a vote of seventy-six (76) against forty-six (46), thus maintaining the non-partisan character of the commission. As approved on January 31, 1935, the draft was made to read as follows: (6) All cases contesting the elections, returns and qualifications of the Members of the National Assembly shall be judged by an Electoral Commission, composed of three members elected by the party having the largest number of votes in the National Assembly, three elected by the members of the party having the second largest number of votes, and three justices of the Supreme Court designated by the Chief Justice, the Commission to be presided over by one of said justices. The Style Committee to which the draft was submitted revised it as follows: SEC. 4. There shall be an Electoral Commission composed of three Justices of the Supreme Court designated by the Chief Justice, and of six Members chosen by the National Assembly, three of whom shall be nominated by the party having the largest number of votes, and three by the party having the second largest number of votes therein. The senior Justice in the Commission shall be its chairman. The Electoral Commission shall be the sole judge of the election, returns, and qualifications of the Members of the National Assembly. When the foregoing draft was submitted for approval on February 8, 1935, the Style Committee, through President Recto, to effectuate the original intention of the Convention, agreed to insert the phrase "All contests relating to" between the phrase "judge of" and the words "the elections", which was accordingly accepted by the Convention. The transfer of the power of determining the election, returns and qualifications of the members of the legislature long lodged in the legislative body, to an independent, impartial and non-partisan tribunal, is by no means a mere experiment in the science of government. Cushing, in his Law and Practice of Legislative Assemblies (ninth edition, chapter VI, pages 57, 58), gives a vivid account of the

Sr. ROXAS. La diferencia, seor Presidente, consiste solamente en obviar la objecion apuntada por varios Delegados al efecto de que la primera clausula del draft que dice: "The elections, returns and qualifications of the members of the National Assembly" parece que da a la Comision Electoral la facultad de determinar tambien la eleccion de los miembros que no ha sido protestados y para obviar esa dificultad, creemos que la enmienda tien razon en ese sentido, si enmendamos el draft, de tal modo que se lea como sigue: "All cases contesting the election", de modo que los jueces de la Comision Electoral se limitaran solamente a los casos en que haya habido

"scandalously notorious" canvassing of votes by political parties in the disposition of contests by the House of Commons in the following passages which are partly quoted by the petitioner in his printed memorandum of March 14, 1936: 153. From the time when the commons established their right to be the exclusive judges of the elections, returns, and qualifications of their members, until the year 1770, two modes of proceeding prevailed, in the determination of controverted elections, and rights of membership. One of the standing committees appointed at the commencement of each session, was denominated the committee of privileges and elections, whose functions was to hear and investigate all questions of this description which might be referred to them, and to report their proceedings, with their opinion thereupon, to the house, from time to time. When an election petition was referred to this committee they heard the parties and their witnesses and other evidence, and made a report of all the evidence, together with their opinion thereupon, in the form of resolutions, which were considered and agreed or disagreed to by the house. The other mode of proceeding was by a hearing at the bar of the house itself. When this court was adopted, the case was heard and decided by the house, in substantially the same manner as by a committee. The committee of privileges and elections although a select committee. The committee of privileges and elections although a select committee was usually what is called an open one; that is to say, in order to constitute the committee, a quorum of the members named was required to be present, but all the members of the house were at liberty to attend the committee and vote if they pleased. 154. With the growth of political parties in parliament questions relating to the right of membership gradually assumed a political character; so that for many years previous to the year 1770, controverted elections had been tried and determined by the house of commons, as mere party questions, upon which the strength of contending factions might be tested. Thus, for Example, in 1741, Sir Robert Walpole, after repeated attacks upon his government, resigned his office in consequence of an adverse vote upon the Chippenham election. Mr. Hatsell remarks, of the trial of election cases, as conducted under this system, that "Every principle of decency and justice were notoriously and openly prostituted, from whence the younger part of the house were insensibly, but too successfully, induced to adopt the same licentious conduct in more serious matters, and in questions of higher importance to the public welfare." Mr. George Grenville, a distinguished member of the house of commons, undertook to propose a remedy for the evil, and, on the 7th of March, 1770, obtained the unanimous leave of the house to bring in a bill, "to regulate the trial of controverted elections, or returns of members to serve in parliament." In his speech to explain his plan, on the motion for leave, Mr. Grenville alluded to the existing practice in the following terms: "Instead of trusting to the merits of their respective causes, the principal dependence of both parties is their private interest among us; and it is scandalously notorious that we are as earnestly canvassed to attend in favor of the opposite sides, as if we were wholly self-elective, and not bound to act by the principles of justice, but by the discretionary impulse of our own inclinations; nay, it is well known, that in every contested election, many members of this house, who are ultimately to judge in a kind of judicial capacity between the competitors, enlist themselves as parties in the contention, and take upon themselves the partial management of the very business, upon which they should determine with the strictest impartiality." 155. It was to put an end to the practices thus described, that Mr. Grenville brought in a bill which met with the approbation of both houses, and received the royal assent on the 12th of April, 1770. This was the celebrated law since known by the name of the Grenville Act; of which Mr. Hatsell declares, that it "was one of the nobles works, for the honor of the house of commons, and the security of the constitution, that was ever devised by any minister or statesman." It is probable, that the magnitude of the evil, or the apparent success of the remedy, may have led many of the contemporaries of the measure to the information of a judgement, which was not acquiesced in by some of the leading statesmen of the day, and has not been entirely confirmed by subsequent experience. The bill was objected to by Lord North, Mr. De Grey, afterwards chief justice of the common pleas, Mr. Ellis, Mr. Dyson, who had been clerk of the house, and Mr. Charles James Fox, chiefly on the ground, that the introduction of the new system was an essential alteration of the constitution of parliament, and a total abrogation of one of the most important rights and jurisdictions of the house of commons.

As early as 1868, the House of Commons in England solved the problem of insuring the non-partisan settlement of the controverted elections of its members by abdicating its prerogative to two judges of the King's Bench of the High Court of Justice selected from a rota in accordance with rules of court made for the purpose. Having proved successful, the practice has become imbedded in English jurisprudence (Parliamentary Elections Act, 1868 [31 & 32 Vict. c. 125] as amended by Parliamentary Elections and Corrupt Practices Act. 1879 [42 & 43 Vict. c. 75], s. 2; Corrupt and Illegal Practices Preventions Act, 1883 [46 & 47 Vict. c. 51;, s. 70; Expiring Laws Continuance Act, 1911 [1 & 2 Geo. 5, c. 22]; Laws of England, vol. XII, p. 408, vol. XXI, p. 787). In the Dominion of Canada, election contests which were originally heard by the Committee of the House of Commons, are since 1922 tried in the courts. Likewise, in the Commonwealth of Australia, election contests which were originally determined by each house, are since 1922 tried in the High Court. In Hungary, the organic law provides that all protests against the election of members of the Upper House of the Diet are to be resolved by the Supreme Administrative Court (Law 22 of 1916, chap. 2, art. 37, par. 6). The Constitution of Poland of March 17, 1921 (art. 19) and the Constitution of the Free City of Danzig of May 13, 1922 (art. 10) vest the authority to decide contested elections to the Diet or National Assembly in the Supreme Court. For the purpose of deciding legislative contests, the Constitution of the German Reich of July 1, 1919 (art. 31), the Constitution of the Czechoslovak Republic of February 29, 1920 (art. 19) and the Constitution of the Grecian Republic of June 2, 1927 (art. 43), all provide for an Electoral Commission. The creation of an Electoral Commission whose membership is recruited both from the legislature and the judiciary is by no means unknown in the United States. In the presidential elections of 1876 there was a dispute as to the number of electoral votes received by each of the two opposing candidates. As the Constitution made no adequate provision for such a contingency, Congress passed a law on January 29, 1877 (United States Statutes at Large, vol. 19, chap. 37, pp. 227-229), creating a special Electoral Commission composed of five members elected by the Senate, five members elected by the House of Representatives, and five justices of the Supreme Court, the fifth justice to be selected by the four designated in the Act. The decision of the commission was to be binding unless rejected by the two houses voting separately. Although there is not much of a moral lesson to be derived from the experience of America in this regard, judging from the observations of Justice Field, who was a member of that body on the part of the Supreme Court (Countryman, the Supreme Court of the United States and its Appellate Power under the Constitution [Albany, 1913] Relentless Partisanship of Electoral Commission, p. 25 et seq.), the experiment has at least abiding historical interest. The members of the Constitutional Convention who framed our fundamental law were in their majority men mature in years and experience. To be sure, many of them were familiar with the history and political development of other countries of the world. When , therefore, they deemed it wise to create an Electoral Commission as a constitutional organ and invested it with the exclusive function of passing upon and determining the election, returns and qualifications of the members of the National Assembly, they must have done so not only in the light of their own experience but also having in view the experience of other enlightened peoples of the world. The creation of the Electoral Commission was designed to remedy certain evils of which the framers of our Constitution were cognizant. Notwithstanding the vigorous opposition of some members of the Convention to its creation, the plan, as hereinabove stated, was approved by that body by a vote of 98 against 58. All that can be said now is that, upon the approval of the constitutional the creation of the Electoral Commission is the expression of the wisdom and "ultimate justice of the people". (Abraham Lincoln, First Inaugural Address, March 4, 1861.) From the deliberations of our Constitutional Convention it is evident that the purpose was to transfer in its totality all the powers previously exercised by the legislature in matters pertaining to contested elections of its members, to an independent and impartial tribunal. It was not so much the knowledge and appreciation of contemporary constitutional precedents, however, as the long-felt need of determining legislative contests devoid of partisan considerations which prompted the people, acting through their delegates to the Convention, to provide for this body known as the Electoral Commission. With this end in view, a composite body in which both the majority and minority parties are equally represented to off-set partisan influence in its deliberations was

created, and further endowed with judicial temper by including in its membership three justices of the Supreme Court. The Electoral Commission is a constitutional creation, invested with the necessary authority in the performance and execution of the limited and specific function assigned to it by the Constitution. Although it is not a power in our tripartite scheme of government, it is, to all intents and purposes, when acting within the limits of its authority, an independent organ. It is, to be sure, closer to the legislative department than to any other. The location of the provision (section 4) creating the Electoral Commission under Article VI entitled "Legislative Department" of our Constitution is very indicative. Its compositions is also significant in that it is constituted by a majority of members of the legislature. But it is a body separate from and independent of the legislature. The grant of power to the Electoral Commission to judge all contests relating to the election, returns and qualifications of members of the National Assembly, is intended to be as complete and unimpaired as if it had remained originally in the legislature. The express lodging of that power in the Electoral Commission is an implied denial of the exercise of that power by the National Assembly. And this is as effective a restriction upon the legislative power as an express prohibition in the Constitution (Ex parte Lewis, 45 Tex. Crim. Rep., 1; State vs. Whisman, 36 S.D., 260; L.R.A., 1917B, 1). If we concede the power claimed in behalf of the National Assembly that said body may regulate the proceedings of the Electoral Commission and cut off the power of the commission to lay down the period within which protests should be filed, the grant of power to the commission would be ineffective. The Electoral Commission in such case would be invested with the power to determine contested cases involving the election, returns and qualifications of the members of the National Assembly but subject at all times to the regulative power of the National Assembly. Not only would the purpose of the framers of our Constitution of totally transferring this authority from the legislative body be frustrated, but a dual authority would be created with the resultant inevitable clash of powers from time to time. A sad spectacle would then be presented of the Electoral Commission retaining the bare authority of taking cognizance of cases referred to, but in reality without the necessary means to render that authority effective whenever and whenever the National Assembly has chosen to act, a situation worse than that intended to be remedied by the framers of our Constitution. The power to regulate on the part of the National Assembly in procedural matters will inevitably lead to the ultimate control by the Assembly of the entire proceedings of the Electoral Commission, and, by indirection, to the entire abrogation of the constitutional grant. It is obvious that this result should not be permitted. We are not insensible to the impassioned argument or the learned counsel for the petitioner regarding the importance and necessity of respecting the dignity and independence of the national Assembly as a coordinate department of the government and of according validity to its acts, to avoid what he characterized would be practically an unlimited power of the commission in the admission of protests against members of the National Assembly. But as we have pointed out hereinabove, the creation of the Electoral Commission carried with it ex necesitate rei the power regulative in character to limit the time with which protests intrusted to its cognizance should be filed. It is a settled rule of construction that where a general power is conferred or duty enjoined, every particular power necessary for the exercise of the one or the performance of the other is also conferred (Cooley, Constitutional Limitations, eight ed., vol. I, pp. 138, 139). In the absence of any further constitutional provision relating to the procedure to be followed in filing protests before the Electoral Commission, therefore, the incidental power to promulgate such rules necessary for the proper exercise of its exclusive power to judge all contests relating to the election, returns and qualifications of members of the National Assembly, must be deemed by necessary implication to have been lodged also in the Electoral Commission. It is, indeed, possible that, as suggested by counsel for the petitioner, the Electoral Commission may abuse its regulative authority by admitting protests beyond any reasonable time, to the disturbance of the tranquillity and peace of mind of the members of the National Assembly. But the possibility of abuse is not argument against the concession of the power as there is no power that is not susceptible of abuse. In the second place, if any mistake has been committed in the creation of an Electoral Commission and in investing it with exclusive jurisdiction in all cases relating to the election, returns, and

qualifications of members of the National Assembly, the remedy is political, not judicial, and must be sought through the ordinary processes of democracy. All the possible abuses of the government are not intended to be corrected by the judiciary. We believe, however, that the people in creating the Electoral Commission reposed as much confidence in this body in the exclusive determination of the specified cases assigned to it, as they have given to the Supreme Court in the proper cases entrusted to it for decision. All the agencies of the government were designed by the Constitution to achieve specific purposes, and each constitutional organ working within its own particular sphere of discretionary action must be deemed to be animated with the same zeal and honesty in accomplishing the great ends for which they were created by the sovereign will. That the actuations of these constitutional agencies might leave much to be desired in given instances, is inherent in the perfection of human institutions. In the third place, from the fact that the Electoral Commission may not be interfered with in the exercise of its legitimate power, it does not follow that its acts, however illegal or unconstitutional, may not be challenge in appropriate cases over which the courts may exercise jurisdiction. But independently of the legal and constitutional aspects of the present case, there are considerations of equitable character that should not be overlooked in the appreciation of the intrinsic merits of the controversy. The Commonwealth Government was inaugurated on November 15, 1935, on which date the Constitution, except as to the provisions mentioned in section 6 of Article XV thereof, went into effect. The new National Assembly convened on November 25th of that year, and the resolution confirming the election of the petitioner, Jose A. Angara was approved by that body on December 3, 1935. The protest by the herein respondent Pedro Ynsua against the election of the petitioner was filed on December 9 of the same year. The pleadings do not show when the Electoral Commission was formally organized but it does appear that on December 9, 1935, the Electoral Commission met for the first time and approved a resolution fixing said date as the last day for the filing of election protest. When, therefore, the National Assembly passed its resolution of December 3, 1935, confirming the election of the petitioner to the National Assembly, the Electoral Commission had not yet met; neither does it appear that said body had actually been organized. As a mater of fact, according to certified copies of official records on file in the archives division of the National Assembly attached to the record of this case upon the petition of the petitioner, the three justices of the Supreme Court the six members of the National Assembly constituting the Electoral Commission were respectively designated only on December 4 and 6, 1935. If Resolution No. 8 of the National Assembly confirming non-protested elections of members of the National Assembly had the effect of limiting or tolling the time for the presentation of protests, the result would be that the National Assembly on the hypothesis that it still retained the incidental power of regulation in such cases had already barred the presentation of protests before the Electoral Commission had had time to organize itself and deliberate on the mode and method to be followed in a matter entrusted to its exclusive jurisdiction by the Constitution. This result was not and could not have been contemplated, and should be avoided. From another angle, Resolution No. 8 of the National Assembly confirming the election of members against whom no protests had been filed at the time of its passage on December 3, 1935, can not be construed as a limitation upon the time for the initiation of election contests. While there might have been good reason for the legislative practice of confirmation of the election of members of the legislature at the time when the power to decide election contests was still lodged in the legislature, confirmation alone by the legislature cannot be construed as depriving the Electoral Commission of the authority incidental to its constitutional power to be "the sole judge of all contest relating to the election, returns, and qualifications of the members of the National Assembly", to fix the time for the filing of said election protests. Confirmation by the National Assembly of the returns of its members against whose election no protests have been filed is, to all legal purposes, unnecessary. As contended by the Electoral Commission in its resolution of January 23, 1936, overruling the motion of the herein petitioner to dismiss the protest filed by the respondent Pedro Ynsua, confirmation of the election of any member is not required by the Constitution before he can discharge his duties as such member. As a matter of fact, certification by the proper provincial board of canvassers is sufficient to entitle a member-elect to a seat in the national Assembly and to render him eligible to any office in said

body (No. 1, par. 1, Rules of the National Assembly, adopted December 6, 1935). Under the practice prevailing both in the English House of Commons and in the Congress of the United States, confirmation is neither necessary in order to entitle a member-elect to take his seat. The return of the proper election officers is sufficient, and the member-elect presenting such return begins to enjoy the privileges of a member from the time that he takes his oath of office (Laws of England, vol. 12, pp. 331. 332; vol. 21, pp. 694, 695; U. S. C. A., Title 2, secs. 21, 25, 26). Confirmation is in order only in cases of contested elections where the decision is adverse to the claims of the protestant. In England, the judges' decision or report in controverted elections is certified to the Speaker of the House of Commons, and the House, upon being informed of such certificate or report by the Speaker, is required to enter the same upon the Journals, and to give such directions for confirming or altering the return, or for the issue of a writ for a new election, or for carrying into execution the determination as circumstances may require (31 & 32 Vict., c. 125, sec. 13). In the United States, it is believed, the order or decision of the particular house itself is generally regarded as sufficient, without any actual alternation or amendment of the return (Cushing, Law and Practice of Legislative Assemblies, 9th ed., sec. 166). Under the practice prevailing when the Jones Law was still in force, each house of the Philippine Legislature fixed the time when protests against the election of any of its members should be filed. This was expressly authorized by section 18 of the Jones Law making each house the sole judge of the election, return and qualifications of its members, as well as by a law (sec. 478, Act No. 3387) empowering each house to respectively prescribe by resolution the time and manner of filing contest in the election of member of said bodies. As a matter of formality, after the time fixed by its rules for the filing of protests had already expired, each house passed a resolution confirming or approving the returns of such members against whose election no protests had been filed within the prescribed time. This was interpreted as cutting off the filing of further protests against the election of those members not theretofore contested (Amistad vs. Claravall [Isabela], Second Philippine Legislature, Record First Period, p. 89; Urguello vs. Rama [Third District, Cebu], Sixth Philippine Legislature; Fetalvero vs. Festin [Romblon], Sixth Philippine Legislature, Record First Period, pp. 637-640; Kintanar vs. Aldanese [Fourth District, Cebu], Sixth Philippine Legislature, Record First Period, pp. 1121, 1122; Aguilar vs. Corpus [Masbate], Eighth Philippine Legislature, Record First Period, vol. III, No. 56, pp. 892, 893). The Constitution has repealed section 18 of the Jones Law. Act No. 3387, section 478, must be deemed to have been impliedly abrogated also, for the reason that with the power to determine all contest relating to the election, returns and qualifications of members of the National Assembly, is inseparably linked the authority to prescribe regulations for the exercise of that power. There was thus no law nor constitutional provisions which authorized the National Assembly to fix, as it is alleged to have fixed on December 3, 1935, the time for the filing of contests against the election of its members. And what the National Assembly could not do directly, it could not do by indirection through the medium of confirmation. Summarizing, we conclude: (a) That the government established by the Constitution follows fundamentally the theory of separation of power into the legislative, the executive and the judicial. (b) That the system of checks and balances and the overlapping of functions and duties often makes difficult the delimitation of the powers granted. (c) That in cases of conflict between the several departments and among the agencies thereof, the judiciary, with the Supreme Court as the final arbiter, is the only constitutional mechanism devised finally to resolve the conflict and allocate constitutional boundaries. (d) That judicial supremacy is but the power of judicial review in actual and appropriate cases and controversies, and is the power and duty to see that no one branch or agency of the government transcends the Constitution, which is the source of all authority. (e) That the Electoral Commission is an independent constitutional creation with specific powers and functions to execute and perform,

closer for purposes of classification to the legislative than to any of the other two departments of the governments. (f ) That the Electoral Commission is the sole judge of all contests relating to the election, returns and qualifications of members of the National Assembly. (g) That under the organic law prevailing before the present Constitution went into effect, each house of the legislature was respectively the sole judge of the elections, returns, and qualifications of their elective members. (h) That the present Constitution has transferred all the powers previously exercised by the legislature with respect to contests relating to the elections, returns and qualifications of its members, to the Electoral Commission. (i) That such transfer of power from the legislature to the Electoral Commission was full, clear and complete, and carried with it ex necesitate rei the implied power inter alia to prescribe the rules and regulations as to the time and manner of filing protests. ( j) That the avowed purpose in creating the Electoral Commission was to have an independent constitutional organ pass upon all contests relating to the election, returns and qualifications of members of the National Assembly, devoid of partisan influence or consideration, which object would be frustrated if the National Assembly were to retain the power to prescribe rules and regulations regarding the manner of conducting said contests. (k) That section 4 of article VI of the Constitution repealed not only section 18 of the Jones Law making each house of the Philippine Legislature respectively the sole judge of the elections, returns and qualifications of its elective members, but also section 478 of Act No. 3387 empowering each house to prescribe by resolution the time and manner of filing contests against the election of its members, the time and manner of notifying the adverse party, and bond or bonds, to be required, if any, and to fix the costs and expenses of contest. (l) That confirmation by the National Assembly of the election is contested or not, is not essential before such member-elect may discharge the duties and enjoy the privileges of a member of the National Assembly. (m) That confirmation by the National Assembly of the election of any member against whom no protest had been filed prior to said confirmation, does not and cannot deprive the Electoral Commission of its incidental power to prescribe the time within which protests against the election of any member of the National Assembly should be filed. We hold, therefore, that the Electoral Commission was acting within the legitimate exercise of its constitutional prerogative in assuming to take cognizance of the protest filed by the respondent Pedro Ynsua against the election of the herein petitioner Jose A. Angara, and that the resolution of the National Assembly of December 3, 1935 can not in any manner toll the time for filing protests against the elections, returns and qualifications of members of the National Assembly, nor prevent the filing of a protest within such time as the rules of the Electoral Commission might prescribe. In view of the conclusion reached by us relative to the character of the Electoral Commission as a constitutional creation and as to the scope and extent of its authority under the facts of the present controversy, we deem it unnecessary to determine whether the Electoral Commission is an inferior tribunal, corporation, board or person within the purview of sections 226 and 516 of the Code of Civil Procedure. The petition for a writ of prohibition against the Electoral Commission is hereby denied, with costs against the petitioner. So ordered. G.R. No. L-33628 December 29, 1987

BIENVENIDO A. EBARLE, SANTIAGO EISMA, MIRUFO CELERIAN, JOSE SAYSON, CESAR TABILIRAN, and MAXIMO ADLAWAN, petitioners, vs.

HON. JUDGE MELQUIADES B. SUCALDITO, RUFINO LABANG, MENELEO MESINA, ARTURO GUILLERMO, IN THEIR RESPECTIVE CAPACITIES AS JUDGE OF THE COURT OF FIRST INSTANCE OF ZAMBOANGA DEL SUR, CITY FISCAL OF PAGADIAN CITY AND STATE PROSECUTOR, and ANTI-GRAFT LEAGUE OF THE PHILIPPINES, INC., respondents. No. L-34162 December 29, 1987

expire on November 2, 1969; that nevertheless the said amount was paid and it was made to appear that it was collected by Tecson Trucking Company, although there was nothing due from tile latter and the voucher was never indorsed or signed by the operator of Tecson Trucking; and that in facilitating and consummating the aforecited collection, respondent officials, hereinabove cited, conspired and connived to the great prejudice and damage of the Provincial Government of Zamboanga del Sur. 1 xxx xxx xxx

BIENVENIDO A. EBARLE, petitioner, vs. HON. JUDGE ASAALI S. ISNANI, RUFINO LABANG, ALBERTO S. LIM, JR., JESUS ACEBES, IN THEIR RESPECTIVE CAPACITIES AS JUDGE OF THE COURT OF FIRST INSTANCE OF ZAMBOANGA DEL SUR, CITY FISCAL OF PAGADIAN CITY AND STATE PROSECUTORS, ANTI-GRAFT LEAGUE OF THE PHILIPPINES, INC., and ARTEMIO ROMANILLOS, respondents.

On the same date, the private respondent commenced Criminal Case No. 2-71 of the respondent City Fiscal, another proceeding for violation of Republic Act No. 3019 as well as Article 171 of the Revised Penal Code. The complaint reads as follows: xxx xxx xxx

SARMIENTO, J.: The petitioner, then provincial Governor of Zamboanga del Sur and a candidate for reelection in the local elections of 1971, seeks injunctive relief in two separate petitions, to enjoin further proceedings in Criminal Cases Nos. CCC XVI-4-ZDS, CCC XVI-6-ZDS, and CCC XVI8-ZDS of the then Circuit Criminal Court sitting in Pagadian City, as well as I.S. Nos. 1-70, 2-71, 4-71, 5-71, 6-71, and 7-71 of the respondent Fiscal's office of the said city, all in the nature of prosecutions for violation of certain provisions of the Anti-Graft and Corrupt Practices Act (Republic Act No. 3019) and various provisions of the Revised Penal Code, commenced by the respondent Anti-Graft League of the Philippines, Inc. On June 16, 1971 and October 8, 1971, respectively, we issued temporary restraining orders directing the respondents (in both petitions) to desist from further proceedings in the cases in question until further orders from the Court. At the same time, we gave due course to the petitions and accordingly, required the respondents to answer. The petitions raise pure question of law. The facts are hence, undisputed. On September 26, 1970, the private respondent Anti-Graft League of the Philippines, Inc., filed a complaint with the respondent City Fiscal, docketed as Criminal Case No. 1-70 thereof, for violation of the provisions of the Anti-Graft Law as well as Article 171 of the Revised Penal Code, as follows: xxx xxx xxx

That on or about April 8, 1970, a bidding was held for the construction of the right wing portion of the Capitol Building of the Province of Zamboanga del Sur, by the Bidding Committee composed of respondents cited hereinabove; that the said building was maliciously manipulated so as to give wholly unwarranted advantage and preference in favor of the, supposed winning bidder, Codeniera Construction, allegedly owned and managed by Wenceslao Codeniera, brother-in-law of the wife of respondent Bienvenido Ebarle; that respondent official is interested for personal gain because he is responsible for the approval of the manifestly irregular and unlawful award and contract aforecited; and that, furthermore, respondent, being a Member of the Bidding Committee, also violated Article 171 of the Revised Penal Code, by making it appear in the very abstract of bids that another interested bidder, was not interested in the bidding, when in truth and in fact, it was not so. 2 xxx xxx xxx

On January 26, 1971, the private respondent instituted I.S. No. 4-71 of the respondent Fiscal, a prosecution for violation of Articles 182, 183, and 318 of the Revised Penal Code, as follows: xxx xxx xxx

That on or about April 4, 1967, in Pagadian City, said respondent testified falsely under oath in Cadastral Case No. N-17, LRC CAD REC. NO. N-468, for registration of title to Lot No. 2545 in particular; That respondent BIENVENIDO EBARLE testified falsely under oath during the hearing and reception of evidence that he acquired said lot by purchase from a certain Brigido Sanchez and that he is the owner, when in truth and in fact Lot 2545 had been previously acquired and is owned by the provincial Government of Zamboanga del Sur, where the provincial jail building is now located. 2. That aforesaid deceit, false testimony and untruthful statement of respondent in said Cadastral case were made knowingly to the great damage and prejudice of the Provincial Government of Zamboanga del Sur in violation of aforecited provisions of the Revised Penal Code. 3 On February 10, 1971, finally, the private respondent filed a complaint, docketed as I.S. No. 5-71 of the respondent Fiscal, an action for violation of Republic Act No. 3019 and Articles 171 and 213 of the Revised Penal Code, as follows: xxx xxx xxx

SPECIFICATION NO. I That on or about October 10, 1969, above-named respondents, conspiring and confabulating together, allegedly conducted a bidding for the supply of gravel and sand for the Province of Zamboanga del Sur: that it was made to appear that Tabiliran Trucking Company won the bidding; that, thereafter, the award and contract pursuant to the said simulated bidding were effected and executed in favor of Tabiliran Trucking Company; that, in truth and in fact, the said bidding was really simulated and the papers on the same were falsified to favor Tabiliran Trucking Company, represented by the private secretary of respondent Bienvenido Ebarle, formerly confidential secretary of the latter; that said awardee was given wholly unwarranted advantage and preference by means of manifest partiality; that respondent officials are hereby also charged with interest for personal gain for approving said award which was manifestly irregular and grossly unlawful because the same was facilitated and committed by means of falsification of official documents. SPECIFICATION NO. II That after the aforecited award and contract, Tabiliran Trucking Company, represented by respondent Cesar Tabiliran, attempted to collect advances under his trucking contract in the under his trucking contract in the amount of P4,823.95 under PTA No. 3654; that the same was not passed in audit by the Provincial Auditor in view of the then subsisting contract with Tecson Trucking Company; which was to

We hereby respectfully charge the above-named respondents for violation of Sec. 3, R.A. No. 3019, otherwise known as the Anti-Graft and Corrupt Practices Act, Articles 171 and 213, Revised Penal Code and the rules and regulations of public bidding, committed as follows: 1. That on June 16, 1970, without publication, respondents conducted the so-called "bidding" for the supply of gravel and sand for the province of Zamboanga del Sur; that said respondents, without any valid or legal ground, did not include or even open the bid of one Jesus Teoson that was seasonably submitted, despite the fact that he is a registered duly qualified operator of "Teoson Trucking Service," and notwithstanding his compliance with all the rules and requirements on public bidding; that, instead, aforecited respondents illegally and

irregularly awarded said contract to Cesar Tabiliran, an associate of respondent Governor Bienvenido Ebarle; and 2. That in truth and in fact, aforesaid "bidding" was really simulated and papers were falsified or otherwise "doctored" to favor respondent Cesar Tabiliran thereby giving him wholly unwarranted advantage, preference and benefits by means of manifest partiality; and that there is a statutory presumption of interest for personal gain because the transaction and award were manifestly irregular and contrary to applicable law, rules and regulations. 4 xxx xxx xxx

and there unlawfully and feloniously made untruthful statements in a narration of facts by accomplishing and issuing a certificate, to wit: c. That the provisions of law and rules on promotion, seniority and nepotism have been observed. required by law in such cases, in support of the appointment he extended to TERESITO MONTESCLAROS, husband of his niece Elizabeth Ebarle, as Motor Pool Dispatcher, Office of the Provincial Engineer of Zamboanga del Sur, although he well knew that the latter is related with him within the third degree affinity. CONTRARY TO LAW. 7

The petitioner initially moved to dismiss the aforesaid preliminary investigations, but the same having been denied, he went to the respondent Court of First Instance of Zamboanga del Sur, the Honorable Melquiades Sucaldito presiding, on prohibition and mandamus (Special Case No. 1000) praying at the same time, for a writ of preliminary injunction to enjoin further proceedings therein. The court granted preliminary injunctive relief (restraining order) for which the Anti-Graft League filed a motion to have the restraining order lifted and to have the petition itself dismissed. On May 14, 1971, the respondent, Judge Sucaldito, handed down the first of the two challenged orders, granting Anti-Graft League's motion and dismissing Special Case No. 1000. On June 11, 1971, the petitioner came to this Court on certiorari with prayer for a temporary restraining order (G.R. No. 33628). As we said, we issued a temporary restraining order on June 16, 1971. Meanwhile, and in what would begin yet another series of criminal prosecutions, the private respondent, on April 26, 1971, filed three complaints, subsequently docketed as Criminal Cases Nos. CCC XVI-4ZDS, CCC XVI-6-ZDS, and CCC XVI-8-ZDS of the Circuit Criminal Court of Pagadian City for violation of various provisions of the AntiGraft Law as well as Article 171(4) of the Revised Penal Code, as follows: xxx xxx xxx

xxx

xxx

xxx

Subsequently, on August 23, 1971, the private respondent brought I.S. No. 6-71 of the respondent Pagadian City Fiscal against the petitioner, still another proceeding for violation of Republic Act No. 3019 and Article 171 (4) of the Revised Penal Code, thus: xxx xxx xxx

First Count. That on or about December 1, 1969, in Pagadian City, BIENVENIDO A. EBARLE, Provincial Governor of Zamboanga del Sur, did then and there unlawfully and feloniously extended and gave MARIO EBARLE, son of his brother, his relative by consanguinity within the third degree, an appointment as SECURITY GUARD in the Office of the Provincial Engineer of Zamboanga del Sur although he well knew that the latter is related with him in the third degree by consanguinity and is not qualified under the Civil Service Law. Second Count. That in January, 1970, at Pagadian City, Gov. BIENVENIDO A. EBARLE replaced JOHNNY ABABON who was then the incumbent Motor Pool Dispatcher in the Office of the Provincial Engineer of Zamboanga del Sur with his nephew-in-law TERESITO MONTESCLAROS relative by affinity within the third Civil degree, in violation of the Civil Service Law, this knowingly causing undue injury in the discharge of his administrative function through manifest partiality against said complaining employee. Third Count: That on or about December 18, 1969, in Pagadian City, BIENVENIDO A. EBARLE, Provincial Governor of Zamboanga del Sur, did then and there unlawfully and feloniously extended and gave ELIZABETH EBARLE MONTESCLAROS, daughter of his brother, his relative by consanguinity within the third degree, an appointment as Private Secretary in the Office of the Provincial Governor of Zamboanga del Sur, although he well know that the latter is related with him within the third degree of consanguinity, and said appointment is in violation of the Civil Service Law. Fourth Count. That on or about January 22, 1970, in Pagadian City, BIENVENIDO A. EBARLE, Provincial Governor of Zamboanga del Sur, did then and there unlawfully and feloniously extended and gave ZACARIAS UGSOD, JR., son of the younger sister of Governor Ebarle, his relative by consanguinity within the third degree, an appointment as Architectural Draftsman in the Office of the Provincial Engineer of Zamboanga del Sur although he well know that the latter is related with him in the third degree of consanguinity. Fifth Count. That on February 5, 1970, at Pagadian City, BIENVENIDO A. EBARLE, Provincial Governor of Zamboanga del Sur, did then and there unlawfully and feloniously extended and gave TERESITO MONTESCLAROS, husband of his niece ELIZABETH EBARLE, his relative by affinity within the third degree, an appointment as Motor Pool Dispatcher, Office of the Provincial Engineer of Zamboanga del Sur, although he wen knew then that the latter was not qualified to such appointment as it was in violation of the Civil Service Law, thereby knowingly granting and giving unwarranted advantage and

That on or about December 18, 1969, in Pagadian City, and within the jurisdiction of this Honorable Court, BIENVENIDO A. EBARLE, Provincial Governor of Zamboanga del Sur, did then and there unlawfully and feloniously extended and gave ELIZABETH EBARLE MONTESCLAROS, daughter of his brother, his relative by consanguinity within the third degree, and appointment as Private Secretary in the Office of the Provincial Governor of Zamboanga del Sur, although he well know that the latter is related with him within the third degree by consanguinity. CONTRARY TO LAW. 5 xxx xxx xxx xxx xxx xxx

That on or about December 18, 1969, in Pagadian City, and within the jurisdiction of this Honorable Court, BIENVENIDO A. EBARLE, then and there unlawfully and feloniously made untruthful statements in a narration of facts by accomplishing and issuing a certificate, to wit: , c. That the provisions of law and rules on promotion, seniority and nepotism have been observed. required by law in such cases, in support of the appointment he extended to ELIZABETH EBARLE-MONTESCLAROS as Private Secretary in the Office of the Provincial Governor of Zamboanga del Sur, although he well know that the latter is related with him within the third degree of consanguinity. CONTRARY TO LAW. 6 xxx xxx xxx xxx xxx xxx

That on or about December 18, 1969, in Pagadian City, and within the jurisdiction of this Honorable Court, BIENVENIDO A. EBARLE, then

preference in the discharge of his administrative function through manifest partiality. II. 3019 SPECIFICATION FOR VIOLATION OF SECTION 4 (b), R.A.

appointment as DRIVER of the Provincial Engineer's Office, Pagadian City, although he well knew that Jesus Ebarle is related to him within the third civil degree by consanguinity and is not qualified under the Civil Service Law. Third Count. That on or about November 1, 1969, at Pagadian City, BIENVENIDO EBARLE, Provincial Governor of Zamboanga del Sur, did then and there unlawfully and feloniously extend and give unwarranted benefits and privileges PHENINA CODINERA, sister-in-law of said respondent, an appointment as CONFIDENTIAL ASSISTANT in the Office of the Provincial Governor, Pagadian City, although he well knew that Phenina Codinera is related to him in the second civil degree of consanguinity and is not qualified under the Civil Service Law. ALL CONTRARY TO AFORECITED LAW. Please give due course to the above complaint and please set the case for immediate preliminary investigation pursuant to the First Indorsement dated August 27, 1971 of the Secretary of Justice, and in the paramount interest of good government. 9 xxx xxx xxx

That on August 19, 1967, respondent BIENVENIDO A. EBARLE, Governor of Zamboanga del Sur, taking advantage of his position caused, persuaded, induced, or influence the Presiding Judge to perform irregular and felonious act in violation of applicable law or constituting an offense into awarding and decreeing Lot 2645 of the Pagadian Public Lands subdivision to him who, according to the records of the case, failed to establish his rights of ownership pursuant to the provisions of the Land Registration law and the Public Land Act, it appearing that the Provincial Government of Zamboanga del Sur as and is a claimant and in adverse possession of Lot 2545 whereon the Provincial Jail Building thereon still stands. III. SPECIFICATION FOR VIOLATION OF ARTICLE 171 (4), REVISED PENAL CODE First Count. That on or about December 18, 1969, in Pagadian City, BIENVENIDO A. EBARLE, then and there unlawfully and feloniously made untruthful statement in a narration of facts by accomplishing and issuing a certificate, to wit: c. That the provisions of law and rules on promotion, seniority and nepotism have been observed. required by law in such cases, in support of the appointment he extended to TERESITO MONTESCLAROS, husband of his niece ELIZABETH EBARLE, as Motor Pool Dispatcher, Office of the Provincial Engineer of Zamboanga del Sur, although he wen knew that the latter is related with him within the third degree of affinity and is in violation of the Civil Service Law. Second Count. That on or about December 18, 1969, in Pagadian City, BIENVENIDO A. EBARLE, then and there unlawfully and feloniously made untruthful statements a certificate, to wit: c. That the provisions of the law and rules on promotion, seniority and nepotism have been observed. required by law in such cases, in support of the appointment he extended to ELIZABETH EBARLE-MONTESCLAROS as Private Secretary in the Office of the Provincial Governor of Zamboanga del Sur, although he well knew that the latter is related with him within the third degree of consanguinity, and is in violation of the Civil Service Law. CONTRARY to aforecited laws. 8 xxx xxx xxx

The petitioner thereafter went to the respondent Court of First Instance of Zamboanga del Sur, the Honorable Asaali Isnani presiding, on a special civil action (Special Civil Case No. 1048) for prohibition and certiorari with preliminary injunction. The respondent Court issued a restraining order. The respondent Anti-Graft League moved to have the same lifted and the case itself dismissed. On September 27, 1971, Judge Isnani issued an order, dismissing the case. On October 6, 1971, the petitioner instituted G.R. No. 34162 of this Court, a special civil action for certiorari with preliminary injunction. As earlier noted, we on October 8, 1971, stayed the implementation of dismissal order. Subsequently, we consolidated both petitions and considered the same submitted for decision. Principally, the petitioner relies (in both petitions) on the failure of the respondents City Fiscal and the Anti-Graft League to comply with the provisions of Executive Order No. 264, "OUTLINING THE PROCEDUE BY WHICH COMPLAINANTS CHARGING GOVERNMENT OFFICIALS AND EMPLOYEES WITH COMMISSION OF IRREGULARITIES SHOULD BE GUIDED," 10 preliminary to their criminal recourses. At the same time, he assails the standing of the respondent Anti-Graft League to commence the series of prosecutions below (G.R. No. 33628). He likewise contends that the respondent Fiscal (in G.R. No. 34162), in giving due course to the complaints notwithstanding the restraining order we had issued (in G.R. No. 33628), which he claims applies as well thereto, committed a grave abuse of discretion. He likewise submits that the prosecutions in question are politically motivated, initiated by his rivals, he being, as we said, a candidate for reelection as Governor of Zamboanga del Sur. We dismiss these petitions. The petitioner's reliance upon the provisions of Executive Order No. 264 has no merit. We reproduce the Order in toto: MALACAANG RESIDENCE OF THE PRESIDENT OF THE PHILIPPINES MANILA BY THE PRESIDENT OF THE PHILIPPINES EXECUTIVE ORDER NO. 264

On September 21, 1971, the private respondent instituted I.S. No. 7-71 of the said City Fiscal, again charging the petitioner with further violations of Republic Act No. 3019 thus: xxx xxx xxx

First Count. That on or about December 2, 1969, in Pagadian City, BIENVENIDO EBARLE, Provincial Governor of Zamboanga del Sur, did then and there unlawfully and feloniously extend and give unwarranted benefits and privileges BONINDA EBARLE, wife of his brother Bertuldo Ebarle, the former being his relative by affinity within the second civil degree, an appointment as LABORATORY TECHNICIAN in Pagadian City, although he well knew that the latter is related to him in the second degree by affinity and is not qualified under the Civil Service Law. Second Count. That on or about January 1, 1970, at Pagadian City, BIENVENIDO EBARLE, Provincial Governor of Zamboanga del Sur, did then and there unlawfully and feloniously extend and give unwarranted benefits and privileges JESUS EBARLE, nephew of said respondent, an

OUTLINING THE PROCEDURE BY WHICH COMPLAINANTS CHARGING GOVERNMENT OFFICIALS AND EMPLOYEES WITH COMMISSION OF IRREGULARITIES SHOULD BE GUIDED. WHEREAS, it is necessary that the general public be duly informed or reminded of the procedure provided by law and regulations by which complaints against public officials and employees should be presented and prosecuted. WHEREAS, actions on complaints are at times delayed because of the failure to observe the form.91 requisites therefor, to indicate with sufficient clearness and particularity the charges or offenses being aired or denounced, and to file the complaint with the proper office or authority; WHEREAS, without in any way curtailing the constitutional guarantee of freedom of expression, the Administration believes that many complaints or grievances could be resolved at the lower levels of government if only the provisions of law and regulations on the matter are duly observed by the parties concerned; and WHEREAS, while all sorts of officials misconduct should be eliminated and punished, it is equally compelling that public officials and employees be given opportunity afforded them by the constitution and law to defend themselves in accordance with the procedure prescribed by law and regulations; NOW, THEREFORE, I, FERDINAND E. MARCOS, President of the Philippines, by virtue of the powers vested in me by law, do hereby order: 1. Complaints against public officials and employees shall be in writing, subscribed and sworn to by the complainants, describing in sufficient detail and particularity the acts or conduct complained of, instead of generalizations. 2. Complaints against presidential appointees shag be filed with the Office of the President or the Department Head having direct supervision or control over the official involved. 3. Those against subordinate officials and employees shall be lodged with the proper department or agency head. 4. Those against elective local officials shall be filed with the Office of the President in case of provincial and city officials, with the provincial governor or board secretary in case of municipal officials, and with the municipal or city mayor or secretary in case of barrio officials. 5. Those against members of police forces shall be filed with the corresponding local board of investigators headed by the city or municipal treasurer, except in the case of those appointed by the President which should be filed with the Office of the President. 6. Complaints against public officials and employees shall be promptly acted upon and disposed of by the officials or authorities concerned in accordance with pertinent laws and regulations so that the erring officials or employees can be soonest removed or otherwise disciplined and the innocent, exonerated or vindicated in like manner, and to the end also that other remedies, including court action, may be pursued forthwith by the interested parties after administrative remedies shall have been exhausted. Done in the City of Manila, this 6th day of October, in the year of Our Lord, nineteen hundred and seventy. (Sgd.) FERDINAND E. MARCOS President of the Philippines By the President: (Sgd.) ALEJANDRO MELCHOR Executive Secretary 11 It is plain from the very wording of the Order that it has exclusive application to administrative, not criminal complaints. The Order itself shows why.

The very title speaks of "COMMISSION OF IRREGULARITIES." There is no mention, not even by implication, of criminal "offenses," that is to say, "crimes." While "crimes" amount to "irregularities," the Executive Order could have very well referred to the more specific term had it intended to make itself applicable thereto. The first perambulatory clause states the necessity for informing the public "of the procedure provided by law and regulations by which complaints against public officials and employees should be presented and prosecuted. 12 To our mind, the "procedure provided by law and regulations" referred to pertains to existing procedural rules with respect to the presentation of administrative charges against erring government officials. And in fact, the aforequoted paragraphs are but restatements thereof. That presidential appointees are subject to the disciplinary jurisdiction of the President, for instance, is a reecho of the long-standing doctrine that the President exercises the power of control over his appointees. 13 Paragraph 3, on the other hand, regarding subordinate officials, is a mere reiteration of Section 33 of Republic Act No. 2260, the Civil Service Act (of 1959) then in force, placing jurisdiction upon "the proper Head of Department, the chief of a bureau or office" 14 to investigate and decide on matters involving disciplinary action. Paragraph 4, which refers to complaints filed against elective local officials, reiterates, on the other hand, the Decentralization Act of 1967, providing that "charges against any elective provincial and city officials shall be preferred before the President of the Philippines; against any elective municipal official before the provincial governor or the secretary of the provincial board concerned; and against any elective barrio official before the municipal or secretary concerned. 15 Paragraph 5, meanwhile, is a reproduction of the provisions of the Police Act of 1966, vesting upon a "Board of Investigators" 16 the jurisdiction to try and decide complaints against members of the Philippine police. Clearly, the Executive Order simply consolidates these existing rules and streamlines the administrative apparatus in the matter of complaints against public officials. Furthermore, the fact is that there is no reference therein to judicial or prejudicial (like a preliminary investigation conducted by the fiscal) recourse, not because it makes such a resort a secondary measure, but because it does not intend to serve as a condition precedent to, much less supplant, such a court resort. To be sure, there is mention therein of "court action[s] [being] pursued forthwith by the interested parties, " 17 but that does not, so we hold, cover proceedings such as criminal actions, which do not require a prior administrative course of action. It will indeed be noted that the term is closely shadowed by the qualification, "after administrative remedies shall have been exhausted," 18 which suggests civil suits subject to previous administrative action. It is moreover significant that the Executive Order in question makes specific reference to "erring officials or employees ... removed or otherwise vindicated. 19 If it were intended to apply to criminal prosecutions, it would have employed such technical terms as "accused", "convicted," or "acquitted." While this is not necessarily a controlling parameter for all cases, it is here material in construing the intent of the measure. What is even more compelling is the Constitutional implications if the petitioner's arguments were accepted. For Executive Order No. 264 was promulgated under the 1935 Constitution in which legislative power was vested exclusively in Congress. The regime of Presidential lawmaking was to usher in yet some seven years later. If we were to consider the Executive Order law, we would be forced to say that it is an amendment to Republic Act No. 5180, the law on preliminary investigations then in effect, a situation that would give rise to a Constitutional anomaly. We cannot accordingly countenace such a view. The challenge the petitioner presents against the personality of the Anti-Graft League of the Philippines to bring suit is equally without merit. That the Anti-Graft League is not an "offended party" within the meaning of Section 2, Rule 110, of the Rules of Court (now Section 3 of the 1985 Rules on Criminal Procedure), cannot abate the complaints in question.

A complaint for purposes of preliminary investigation by the fiscal need not be filed by the "offended party." The rule has been that, unless the offense subject thereof is one that cannot be prosecuted de oficio, the same may be filed, for preliminary investigation purposes, by any competent person. 20 The "complaint" referred to in the Rule 110 contemplates one filed in court, not with the fiscal, In that case, the proceeding must be started by the aggrieved party himself. 21 For as a general rule, a criminal action is commenced by complaint or information, both of which are filed in court. In case of a complaint, it must be filed by the offended party; with respect to an information, it is the fiscal who files it. But a "complaint" filed with the fiscal prior to a judicial action may be filed by any person. The next question is whether or not the temporary restraining order we issued in G.R. No. 33628 embraced as well the complaint subject of G.R. No. 34162. It is noteworthy that the charges levelled against the petitioner whether in G.R. No. 33628 or 34162 refer invariably to violations of the Anti-Graft Law or the Revised Penal Code. That does not, however, make such charges Identical to one another. The complaints involved in G.R. No. 34162 are, in general, nepotism under Sections 3(c) and (j) of Republic Act No. 3019; exerting influence upon the presiding Judge of the Court of First Instance of Zamboanga del Sur to award a certain parcel of land in his favor, over which the provincial government itself lays claims, contrary to the provisions of Section 4(b) of Republic Act No. 3019; and making untruthful statements in the certificates of appointment of certain employees in his office. On the other hand, the complaints subject matter of G.R. No. 33628 involve charges of simulating bids for the supply of gravel and sand for certain public works projects, in breach of Section 3 of the Anti-Graft statute; manipulating bids with respect to the construction of the capitol building; testifying falsely in connection with Cadastral Case No. N-17, LRC Cad. Rec. N-468, in which the petitioner alleged that he was the owner of a piece of land, in violation of Articles 182, 183, and 318 of the Revised Penal Code; and simulating bids for the supply of gravel and sand in connection with another public works project. It is clear that the twin sets of complaints are characterized by major differences. When, therefore, we restrained further proceedings in I.S. Nos. 1-71, 2-71, and 4-71, subject of G.R. No. 33628. we did not consequently stay the proceedings in CCC-XVI-4-ZDS, CCC XVI-6ZDS, CCC XVI-8-ZDS, and I.S. Nos. 6-71 and 7-71, the same proceedings we did restrain in G.R. No. 34162. This brings us to the last issue: whether or not the complaints in question are tainted with a political color.

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-4631316. Norberto L. Apostol for respondent Panchito Refuncion. Hon. Amante P. Purisima for and in his own behalf.

MUOZ PALMA, J.: It is not our business to resolve complaints the disposition of which belongs to another agency, in this case, the respondent Fiscal. But more than that, and as a general rule, injunction does not lie to enjoin criminal prosecutions. 22 The rule is subject to exceptions, to wit: (1) for the orderly administration of justice; (2) to prevent the use of the strong arm of the law in an oppressive and vindictive manner; (3) to avoid multiplicity of actions; (4) to afford adequate protection to constitutional rights; and (5) because the statute relied on is constitutionally infirm or otherwise void. 23 We cannot perceive any of the exceptions applicable here. The petitioner cries foul, in a manner of speaking, with respect to the deluge of complaints commenced by the private respondent below, but whether or not they were filed for harassment purposes is a question we are not in a position to decide. The proper venue, we believe, for the petitioner's complaint is precisely in the preliminary investigations he wishes blocked here. WHEREFORE, the petitions are DISMISSED. The temporary restraining orders are LIFTED and SET ASIDE. Costs against the petitioners. It is so ORDERED. G.R. No. L-42050-66 November 20, 1978 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?

THE PEOPLE OF THE PHILIPPINES, petitioner, vs.

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

CRIM. CASE NO. 933 For: ILLEGAL POSSESSION OF

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 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 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 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.

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) 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:

... 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 L-42050-66) 2. Judge Maceren in turn gave his grounds for dismissing the charges as follows: xxx xxx xxx

xxx

xxx

xxx

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 that abets 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

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 L46997) 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. 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:

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

PRESIDENTIAL DECREE NO. 9 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-inChief 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

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.

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

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.

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

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. 114-115, 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-inChief 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

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

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

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.

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.

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

G.R. No. 83736

January 15, 1992

COMMISSIONER OF INTERNAL REVENUE, petitioner, vs. TMX SALES, INC. and THE COURT OF TAX APPEALS, respondents. F.R. Quiogue for private respondent.

The Tax Court, in granting the petition, viewed the quarterly income tax paid as a portion or installment of the total annual income tax due. Said the Tax Court in its assailed decision: xxx xxx xxx

GUTIERREZ, JR., J.: In a case involving corporate quarterly income tax, does the two-year prescriptive period to claim a refund of erroneously collected tax provided for in Section 292 (now Section 230) of the National Internal Revenue Code commence to run from the date the quarterly income tax was paid, as contended by the petitioner, or from the date of filing of the Final Adjustment Return (final payment), as claimed by the private respondent? Section 292 (now Section 230) of the National Internal Revenue Code provides: Sec. 292. Recovery of tax erroneously or illegally collected. No suit or proceeding shall be maintained in any court for the recovery of any national internal revenue tax hereafter alleged to have been erroneously or illegally assessed or collected, or of any penalty claimed to have been collected without authority, or of any sum alleged to have been excessive or in any manner wrongfully collected, until a claim for refund or credit has been duly filed with the Commissioner of Internal Revenue; but such suit or proceeding may be maintained, whether or not such tax, penalty, or sum has been paid under protest or duress. In any case no such suit or proceeding shall be begun after the expiration of two years from the date of payment of that tax or penalty regardless of any supervening cause that may arise after payment: . . . (Emphasis supplied) The facts of this case are uncontroverted. Private respondent TMX Sales, Inc., a domestic corporation, filed its quarterly income tax return for the first quarter of 1981, declaring an income of P571,174.31, and consequently paying an income tax thereon of P247,010.00 on May 15, 1981. During the subsequent quarters, however, TMX Sales, Inc. suffered losses so that when it filed on April 15, 1982 its Annual Income Tax Return for the year ended December 31, 1981, it declared a gross income of P904,122.00 and total deductions of P7,060,647.00, or a net loss of P6,156,525.00 (CTA Decision, pp. 1-2; Rollo, pp. 45-46). Thereafter, on July 9, 1982, TMX Sales, Inc. thru its external auditor, SGV & Co. filed with the Appellate Division of the Bureau of Internal Revenue a claim for refund in the amount of P247,010.00 representing overpaid income tax. (Rollo, p. 30) This claim was not acted upon by the Commissioner of Internal Revenue. On March 14, 1984, TMX Sales, Inc. filed a petition for review before the Court of Tax Appeals against the Commissioner of Internal Revenue, praying that the petitioner, as private respondent therein, be ordered to refund to TMX Sales, Inc. the amount of P247,010.00, representing overpaid income tax for the taxable year ended December 31, 1981. In his answer, the Commissioner of Internal Revenue averred that "granting, without admitting, the amount in question is refundable, the petitioner (TMX Sales, Inc.) is already barred from claiming the same considering that more than two (2) years had already elapsed between the payment (May 15, 1981) and the filing of the claim in Court (March 14, 1984). (Sections 292 and 295 of the Tax Code of 1977, as amended)." On April 29, 1988, the Court of Tax Appeals rendered a decision granting the petition of TMX Sales, Inc. and ordering the Commissioner of Internal Revenue to refund the amount claimed.

When a tax is paid in installments, the prescriptive period of two years provided in Section 306 (now Section 292) of the Revenue Code should be counted from the date of the final payment or last installment. . . . This rule proceeds from the theory that in contemplation of tax laws, there is no payment until the whole or entire tax liability is completely paid. Thus, a payment of a part or portion thereof, cannot operate to start the commencement of the statute of limitations. In this regard the word "tax" or words "the tax" in statutory provisions comparable to section 306 of our Revenue Code have been uniformly held to refer to the entire tax and not a portion thereof (Clark v. U.S., 69 F. 2d 748; A.S. Kriedner Co. v. U.S., 30 F Supp. 274; Hills v. U.S., 50 F 2d 302, 55 F 2d 1001), and the vocable "payment of tax" within statutes requiring refund claim, refer to the date when all the tax was paid, not when a portion was paid (Braun v. U.S., 8 F supp. 860, 863; Collector of Internal Revenue v. Prieto, 2 SCRA 1007; Commissioner of Internal Revenue v. Palanca, 18 SCRA 496). Petitioner Commissioner of Internal Revenue is now before this Court seeking a reversal of the above decision. Thru the Solicitor General, he contends that the basis in computing the two-year period of prescription provided for in Section 292 (now Section 230) of the Tax Code, should be May 15, 1981, the date when the quarterly income tax was paid and not April 15, 1982, when the Final Adjustment Return for the year ended December 31, 1981 was filed. He cites the case of Pacific Procon Limited v. Commissioner of Internal Revenue (G.R. No. 68013, November 12, 1984) involving a similar set of facts, wherein this Court in a minute resolution affirmed the Court of Appeals' decision denying the claim for refund of the petitioner therein for being barred by prescription. A re-examination of the aforesaid minute resolution of the Court in the Pacific Procon case is warranted under the circumstances to lay down a categorical pronouncement on the question as to when the two-year prescriptive period in cases of quarterly corporate income tax commences to run. A full-blown decision in this regard is rendered more imperative in the light of the reversal by the Court of Tax Appeals in the instant case of its previous ruling in the Pacific Procon case. Section 292 (now Section 230) of the National Internal Revenue Code should be interpreted in relation to the other provisions of the Tax Code in order to give effect to legislative intent and to avoid an application of the law which may lead to inconvenience and absurdity. In the case of People vs. Rivera (59 Phil 236 [1933]), this Court stated that statutes should receive a sensible construction, such as will give effect to the legislative intention and so as to avoid an unjust or an absurd conclusion. INTERPRETATIO TALIS IN AMBIGUIS SEMPER FRIENDA EST, UT EVITATUR INCONVENIENS ET ABSURDUM. Where there is ambiguity, such interpretation as will avoid inconvenience and absurdity is to be adopted. Furthermore, courts must give effect to the general legislative intent that can be discovered from or is unraveled by the four corners of the statute, and in order to discover said intent, the whole statute, and not only a particular provision thereof, should be considered. (Manila Lodge No. 761, et al. v. Court of Appeals, et al., 73 SCRA 162 [1976]) Every section, provision or clause of the statute must be expounded by reference to each other in order to arrive at the effect contemplated by the legislature. The intention of the legislator must be ascertained from the whole text of the law and every part of the act is to be taken into view. (Chartered Bank v. Imperial, 48 Phil. 931 [1921]; Lopez v. El Hogar Filipino, 47 Phil. 249, cited in Aboitiz Shipping Corporation v. City of Cebu, 13 SCRA 449 [1965]). Thus, in resolving the instant case, it is necessary that we consider not only Section 292 (now Section 230) of the National Internal Revenue Code but also the other provisions of the Tax Code, particularly Sections 84, 85 (now both incorporated as Section 68), Section 86 (now Section 70) and Section 87 (now Section 69) on Quarterly Corporate Income Tax Payment and Section 321 (now Section 232) on keeping of books of accounts. All these provisions of the Tax Code should be harmonized with each other.

Section 292 (now Section 230) provides a two-year prescriptive period to file a suit for a refund of a tax erroneously or illegally paid, counted from the tile the tax was paid. But a literal application of this provision in the case at bar which involves quarterly income tax payments may lead to absurdity and inconvenience. Section 85 (now Section 68) provides for the method of computing corporate quarterly income tax which is on a cumulative basis, to wit: Sec. 85. Method of computing corporate quarterly income tax. Every corporation shall file in duplicate a quarterly summary declaration of its gross income and deductions on a cumulative basis for the preceding quarter or quarters upon which the income tax, as provided in Title II of this Code shall be levied, collected and paid. The tax so computed shall be decreased by the amount of tax previously paid or assessed during the preceding quarters and shall be paid not later than sixty (60) days from the close of each of the first three (3) quarters of the taxable year, whether calendar or fiscal year. (Emphasis supplied) while Section 87 (now Section 69) requires the filing of an adjustment returns and final payment of income tax, thus: Sec. 87. Filing of adjustment returns final payment of income tax. On or before the fifteenth day of April or on or before the fifteenth day of the fourth month following the close of the fiscal year, every taxpayer covered by this Chapter shall file an Adjustment Return covering the total net taxable income of the preceding calendar or fiscal year and if the sum of the quarterly tax payments made during that year is not equal to the tax due on the entire net taxable income of that year the corporation shall either (a) pay the excess tax still due or (b) be refunded the excess amount paid as the case may be. . . . (Emphasis supplied) In the case at bar, the amount of P247,010.00 claimed by private respondent TMX Sales, Inc. based on its Adjustment Return required in Section 87 (now Section 69), is equivalent to the tax paid during the first quarter. A literal application of Section 292 (now Section 230) would thus pose no problem as the two-year prescriptive period reckoned from the time the quarterly income tax was paid can be easily determined. However, if the quarter in which the overpayment is made, cannot be ascertained, then a literal application of Section 292 (Section 230) would lead to absurdity and inconvenience. The following application of Section 85 (now Section 68) clearly illustrates this point: FIRST QUARTER:

========= Tax Due Thereon Less: Tax Paid Creditable Income Tax THIRD QUARTER: Gross Income 2nd Quarter 3rd Quarter Less: Deductions 2nd Quarter 3rd Quarter 100,000.00 ========= Tax Due Thereon Less: Tax Paid 2nd Quarter 25,000.00 1st Quarter 12,500.00 1st Quarter 75,000.00 25,000.00 150,000.00 50,000.00 1st Quarter 50,000.00 100,000.00 250,000.00 100,000.00 (6,250.00) 6,250.00 1st Quarter 12,500.00

12,500.00

========= FOURTH QUARTER: (Adjustment Return required in Sec. 87) Gross Income 2nd Quarter 3rd Quarter 1st Quarter 50,000.00 100,000.00 75,000.00 325,000.00 100,000.00

Gross Income Less: Deductions

100,000.00 50,000.00

4th Quarter Less: Deductions 2nd Quarter

1st Quarter 75,000.00 25,000.00 100,000.00

50,000.00

Net Taxable Income 50,000.00 ========= Tax Due & Paid [Sec. 24 NIRC (25%)] ========= SECOND QUARTER: Net Taxable Income 75,000.00 Gross Income 2nd Quarter Less: Deductions 2nd Quarter Net Taxable Income 25,000.00 Creditable Income Tax (to be REFUNDED) (6,250.00) 1st Quarter 75,000.00 50,000.00 125,000.00 1st Quarter 50,000.00 100,000.00 150,000.00 Tax Due Thereon Less: Tax Paid 2nd Quarter 3rd Quarter 18,750.00 1st Quarter 12,500.00 25,000.00 12,500.00 ========= 12,500.00 4th Quarter 250,000.00 3rd Quarter

========= Based on the above hypothetical data appearing in the Final Adjustment Return, the taxpayer is entitled under Section 87 (now Section 69) of the Tax Code to a refund of P6,250.00. If Section 292 (now Section 230) is literally applied, what then is the reckoning date in computing the two-year prescriptive period? Will it be the 1st quarter when the taxpayer paid P12,500.00 or the 3rd quarter when the taxpayer also paid P12,500.00? Obviously, the most reasonable and logical application of the law would be to compute the two-year prescriptive period at the time of filing the Final Adjustment Return or the Annual Income Tax Return, when it can be finally ascertained if the taxpayer has still to pay additional income tax or if he is entitled to a refund of overpaid income tax. Furthermore, Section 321 (now Section 232) of the National Internal Revenue Code requires that the books of accounts of companies or persons with gross quarterly sales or earnings exceeding Twenty Five Thousand Pesos (P25,000.00) be audited and examined yearly by an independent Certified Public Accountant and their income tax returns be accompanied by certified balance sheets, profit and loss statements, schedules listing income producing properties and the corresponding incomes therefrom and other related statements. It is generally recognized that before an accountant can make a certification on the financial statements or render an auditor's opinion, an audit of the books of accounts has to be conducted in accordance with generally accepted auditing standards. Since the audit, as required by Section 321 (now Section 232) of the Tax Code is to be conducted yearly, then it is the Final Adjustment Return, where the figures of the gross receipts and deductions have been audited and adjusted, that is truly reflective of the results of the operations of a business enterprise. Thus, it is only when the Adjustment Return covering the whole year is filed that the taxpayer would know whether a tax is still due or a refund can be claimed based on the adjusted and audited figures. Therefore, the filing of quarterly income tax returns required in Section 85 (now Section 68) and implemented per BIR Form 1702-Q and payment of quarterly income tax should only be considered mere installments of the annual tax due. These quarterly tax payments which are computed based on the cumulative figures of gross receipts and deductions in order to arrive at a net taxable income, should be treated as advances or portions of the annual income tax due, to be adjusted at the end of the calendar or fiscal year. This is reinforced by Section 87 (now Section 69) which provides for the filing of adjustment returns and final payment of income tax. Consequently, the two-year prescriptive period provided in Section 292 (now Section 230) of the Tax Code should be computed from the time of filing the Adjustment Return or Annual Income Tax Return and final payment of income tax. In the case of Collector of Internal Revenue v. Antonio Prieto (2 SCRA 1007 [1961]), this Court held that when a tax is paid in installments, the prescriptive period of two years provided in Section 306 (Section 292) of the National internal Revenue Code should be counted from the date of the final payment. This ruling is reiterated in Commission of Internal Revenue v. Carlos Palanca (18 SCRA 496 [1966]), wherein this Court stated that where the tax account was paid on installment, the computation of the two-year prescriptive period under Section 306 (Section 292) of the Tax Code, should be from the date of the last installment. In the instant case, TMX Sales, Inc. filed a suit for a refund on March 14, 1984. Since the two-year prescriptive period should be counted from the filing of the Adjustment Return on April 15, 1982, TMX Sales, Inc. is not yet barred by prescription. WHEREFORE, IN VIEW OF THE FOREGOING, the petition is hereby DENIED. The decision of the Court of Tax Appeals dated April 29, 1988 is AFFIRMED. No costs. SO ORDERED. G.R. No. L-25326 May 29, 1970

vs. POLICARPIO HIDALGO, SERGIO DIMAANO, MARIA ARDE, SATURNINO HIDALGO, BERNARDINA MARQUEZ, VICENTE DIMAANO, ARCADIA DIMAANO, TEODULA DIMAANO, THE REGISTER OF DEEDS and THE PROVINCIAL ASSESSOR OF THE PROVINCE OF BATANGAS, respondents. G.R. No. L-25327 May 29, 1970

HILARIO AGUILA and ADELA HIDALGO, petitioners, vs. POLICARPIO HIDALGO, SERGIO DIMAANO, MARIA ARDE, SATURNINO HIDALGO, BERNARDINA MARQUEZ, VICENTE DIMAANO, ARCADIA DIMAANO, TEODULA DIMAANO, THE REGISTER OF DEEDS and THE PROVINCIAL ASSESSOR OF THE PROVINCE OF BATANGAS, respondents. Jose O. Lara for petitioners. Pedro Panganiban y Tolentino for respondents.

TEEHANKEE, J.: Two petitions for review of decisions of the Court of Agrarian Relations dismissing petitioners' actions as share tenants for the enforcerment of the right to redeem agricultural lands, under the provisions of section 12 of the Agricultural Land Reform Code. As the same issue of law is involved and the original landowner and vendees in both cases are the same, the two cases are herein jointly decided. Respondent-vendor Policarpio Hidalgo was until the time of the execution of the deeds of sale on September 27, 1963 and March 2, 1964 in favor of his seven above-named private co-respondents, the owner of the 22,876-square meter and 7,638-square meter agricultural parcels of land situated in Lumil, San Jose, Batangas, described in the decisions under review. In Case L-25326, respondent-vendor sold the 22,876-square meter parcel of land, together with two other parcels of land for P4,000.00. Petitioners-spouses Igmidio Hidalgo and Martina Resales, as tenants thereof, alleging that the parcel worked by them as tenants is fairly worth P1,500.00, "taking into account the respective areas, productivities, accessibilities, and assessed values of three lots, seek by way of redemption the execution of a deed of sale for the same amount of P1,500.00 by respondents-vendees 1 in their favor. In Case L-25327, respondent-vendor sold the 7,638-square meter parcel of land for P750.00, and petitioners-spouses Hilario Aguila and Adela Hidalgo as tenants thereof, seek by way of redemption the execution of a deed of sale for the same price of P750.00 by respondents-vendees in their favor. As stated in the decisions under review, since the parties stipulated on the facts in both cases, petitioners-tenants have for several years been working on the lands as share tenants. No 90-day notice of intention to sell the lands for the exercise of the right of pre-emption prescribed by section 11 of the Agricultural Land Reform Code (Republic Act No. 3844, enacted on August 8, 1963) was given by respondent-vendor to petitioners-tenants. Subsequently, the deeds of sale executed by respondent-vendor were registered by respondents register of deeds and provincial assessor of Batangas in the records of their respective offices notwithstanding the non-execution by respondent-vendor of the affidavit required by section 13 of the Land Reform Code. 2 The actions for redemption were timely filled on March 26, 1965 by petitionerstenants within the two-year prescriptive period from registration of the sale, prescribed by section 12 of the said Code. The agrarian court rendered on July 19, 1965 two identical decisions dismissing the petitions for redemption. It correctly focused on the sole issue of law as follows: "(T)he only issue in this case is whether or not plaintiffs, as share tenants, are entitled to redeem the parcel of land they are working from the purchasers thereof, where no notice was previously given to them by the vendor, who was their landholder, of the latter's intention to sell the property

IGMIDIO HIDALGO and MARTINA ROSALES, petitioners,

and where the vendor did not execute the affidavit required by Sec. 13 of Republic Act No. 3844 before the registration of the deed of sale. In other words, is the right of redemption granted by Sec. 12 of Republic Act No. 3844 applicable to share tenants?" But proceeding from several erroneous assumptions and premises, it arrived at its erroneous conclusion that the right of redemption granted by section 12 of the Land Reform Code is available to leasehold tenants only but not to share tenants, and thus dismissed the petitions: "(S)ec 12 of Republic Act No. 3844, which comes under Chapter I of said Act, under the heading 'Agricultural Leasehold System,' reads as follows: 'SEC. 12. Lessee's Right of Redemption. In case the landholding is sold to a third person without the knowledge of the agricultural lessee, the latter shall have the right to redeem the same at a reasonable price and consideration: Provided: further, That where there are two or more agricultural lessees, each shall be entitled to said right of redemption only to the extent of the area actually cultivated by him. The right of redemption under this Section may be exercised within two years from the registration of the sale, and shall have priority over any other right of legal redemption.' The systems of agricultural tenancy recognized in this jurisdiction are share tenancy and leasehold tenancy. (Sec. 4, Republic Act No. 1199; Sec. 4, Republic Act No. 3844). A share tenant is altogether different from a leasehold tenant and their respective rights and obligations are not co-extensive or co-equal. (See Secs. 22 to 41, inclusive, and Secs. 42 to 48, inclusive, of Republic Act No. 1199; see also Secs. 4 to 38, inclusive, of Republic Act No. 3844). It is our considered view that the right of redemption granted by Section 12 of Republic Act No. 3844 is applicable to leasehold tenants only, but not to share tenants, because said provision of law clearly, definitely, and unequivocally grants said right to the 'agricultural lessee,' and to nobody else. In enacting the Agricultural Land Reform Code, Congress was fully aware of the existence of share tenancy and in fact provided for the abolition of the agricultural share tenancy system. (Sec. 4, Republic Act No. 3844.) If it were the intention of Congress to grant the right of redemption to share tenants, it would have unmistakably and unequivocally done so. We cannot extend said right to share tenants through judicial legislation, wherever our sympathies may lie. The agrarian court fell into several erroneous assumptions and premises in holding that agricultural share tenancy remains recognized in this jurisdiction; that "a share tenant is altogether different from a leasehold tenant and their respective rights and obligations are not coextensive or co-equal"; and that the right of redemption granted by section 12 of the Land Reform Code" is applicable to leasehold tenants only, but not to share tenants, because said provision of law clearly, definitely, and unequivocally grants said right to the 'agricultural lessee,' and to nobody else." 1. The very essence of the Agricultural Land Reform Code is the abolition of agricultural share tenancy as proclaimed in its title. Section 4 of the Code expressly outlaws agricultural share tenancy as "contrary to public policy" and decrees its abolition. 3 Section 2 of the Code expressly declares it to be the policy of the State, inter alia, "to establish owner cultivatorship and the economic family-size farm as the basis of Philippine agriculture and, as a consequence, divert landlord capital in agriculture to industrial development; to achieve a dignified existence for the small farmers free from pernicious institutional restraints and practices; ... and to make the small farmers more independent, selfreliant and responsible citizens, and a source of strength in our democratic society." 4 It was error, therefore, for the agrarian court to state the premise after the Land Reform Code had already been enacted, that "the systems of agricultural tenancy recognized in this jurisdiction are share tenancy and leasehold tenancy." A more accurate statement of the premise is that based on the transitory provision in the first proviso of section 4 of the Code, i.e. that existing share tenancy contracts are allowed to continue temporarily in force and effect, notwithstanding their express abolition, until whichever of the following events occurs earlier: (a) the end of the agricultural year when the National Land Reform Council makes the proclamation declaring the region or locality a land reform area; or (b) the shorter period provided in the share tenancy contracts expires; or (c) the share tenant sooner exercises his option to elect the leasehold system.

In anticipation of the expiration of share tenancy contracts whether by contractual stipulation or the tenant's exercise of his option to elect the leasehold system instead or by virtue of their nullity occuring before the proclamation of the locality as a land reform area, the same section 4 has further declared in the third proviso thereof that in such event, the tenant shall continue in possession of the land for cultivation and "there shall be presumed to exist a leasehold relationship under the provisions of this Code." 2. The foregoing exposes the error of the agrarian court's corollary premise that "a share tenant is altogether different from a leasehold tenant." The agrarian court's dictum that "their respective rights and obligations are not co-extensive or co-equal "refer to their contractual relations with the landowner, with respect to the contributions given, management, division or payment of the produce. 5 But the Land Reform Code forges by operation of law, between the landowner and the farmer be a leasehold tenant or temporarily a share tenant a vinculum juris with certain vital juridical consequences, such as security of tenure of the tenant and the tenant's right to continue in possession of the land he works despite the expiration of the contract or the sale or transfer of the land to third persons, and now, more basically, the farmer's pre-emptive right to buy the land he cultivates under section 11 of the Code 6 as well as the right to redeem the land, if sold to a third person without his knowledge, under section 12 of the Code. This is an essential and indispensable mandate of the Code to implement the state's policy of establishing owner-cultivatorship and to achieve a dignified and self-reliant existence for the small farmers that would make them a pillar of strength of our Republic. Aside from expropriation by the Land Authority of private agricultural land for resale in economic family-size farm units "to bona fide tenants, occupants and qualified farmers," 7 the purchase by farmers of the lands cultivated by them, when the owner decides to sell the same through rights of pre-emption and redemption are the only means prescribed by the Code to achieve the declared policy of the State. 3. The agrarian court therefore facilely let itself fall into the error of concluding that the right of redemption (as well as necessarily the right of pre-emption) imposed by the Code is available to leasehold tenants only and excludes share tenants for the literal reason that the Code grants said rights only to the "agricultural lessee and to nobody else." For one, it immediately comes to mind that the Code did not mention tenants, whether leasehold or share tenants, because it outlaws share tenancy and envisions the agricultural leasehold system as its replacement. Thus, Chapter I of the Code, comprising sections 4 to 38, extensively deals with the establishment of "agricultural leasehold relation," defines the parties thereto and the rights and obligations of the "agricultural lessor" and of the "agricultural lessee" (without the slightest mention of leasehold tenants) and the statutory consideration or rental for the leasehold to be paid by the lessee. There is a studied omission in the Code of the use of the term tenant in deference to the "abolition of tenancy" as proclaimed in the very title of the Code, and the elevation of the tenant's status to that of lessee. Then, the terms "agricultural lessor" and "agricultural lessee" are consistently used throughout the Chapter and carried over the particular sections (11 and 12) on pre-emption and redemption. The agrarian court's literal construction would wreak havoc on and defeat the proclaimed and announced legislative intent and policy of the State of establishing owner-cultivatorship for the farmers, who invariably were all share tenants before the enactment of the Code and whom the Code would now uplift to the status of lessees. A graphic instance of this fallacy would be found in section 11 providing that "In case the agricultural lessor decides to sell the landholding the agricultural lessee shall have the preferential right to buy the same under reasonable terms and conditions." It will be seen that the term "agricultural lessor" is here used interchangeably with the term "landowner"; which conflicts with the Code's definition of "agricultural lessor" to mean "a person natural or juridical, who, either as owner, civil law lessee, usufructuary, or legal possessor, lets or grants to another the cultivation and use of his land for a price certains." 8 Obviously, the Code precisely referred to the "agricultural lessor (who) decides to sell the landholding," when it could have more precisely referred to the "landowner," who alone as such, rather than a civil law lessee, usufructuary or legal possessor, could sell the landholding, but

it certainly cannot be logically contended that the imprecision should defeat the clear spirit and intent of the provision. 4. We have, here, then a case of where the true intent of the law is clear that calls for the application of the cardinal rule of statutory construction that such intent or spirit must prevail over the letter thereof, for whatever is within the spirit of a statute is within the statute, since adherence to the letter would result in absurdity, injustice and contradictions and would defeat the plain and vital purpose of the statute. Section 11 of the Code providing for the "agricultural lessee's" preferential right to buy the land he cultivates provides expressly that "the entire landholding offered for sale must be pre-empted by the Land Authority if the landowner so desires, unless the majority of the lessees object to such acquisition," presumably for being beyond their capabilities. Taken together with the provisions of Chapter III of the Code on the organization and functions of the Land Authority and Chapter VII on the Land Project Administration and the creation and functions of the National Land Reform Council, (in which chapters the legislature obviously was not laboring under the inhibition of referring to the term tenants as it was in Chapter I establishing the agricultural leasehold system and decreeing the abolition of share tenancy, 9 the Code's intent, policy and objective to give both agricultural lessees and farmers who transitionally continue to be share tenants notwithstanding the Code's enactment, the same priority and preferential rights over the lands under their cultivation, in the event of acquisition of the lands, by expropriation or voluntary sale, for distribution or resale that may be initiated by the Land Authority or the National Land Reform Council, are clearly and expressly stated. Thus Chapter III, section 51 of the Code decrees it the responsibility of the Land Authority "(1) To initiate and prosecute expropriation proceedings for the acquisition of private agricultural lands as defined in Section one hundred sixty-six of chapter XI of this Code for the purpose of subdivision into economic family size farm units and resale of said farm units to bona fide tenants, occupants and qualified farmers ... and "(2) To help bona fide farmers without lands of agricultural owner-cultivators of uneconomic-size farms to acquire and own economic family-size farm units ...." Similarly, Chapter VII, section 128 of the Code, in enjoining the National Land Reform Council to formulate the necessary rules and regulations to implement the Code's provisions for selection of agricultural land to be acquired and distributed and of the beneficiaries of the family farms, ordains the giving of the same priority "to the actual occupants personally cultivating the land either as agricultural lessees or otherwise with respect to the area under their cultivation." 5. It would certainly result in absurdity, contradictions and injustice if a share tenant would be denied the rights of pre-emption and redemption which he seeks to exercise on his own resources, notwithstanding that the National Land Reform Council has not yet proclaimed that all the government machineries and agencies in the region or locality envisioned in the Code are operating which machineries and agencies, particularly, the Land Bank were precisely created "to finance the acquisition by the Government of landed estates for division and resale to small landholders, as well as the purchase of the landholding by the agricultural lessee from the landowner." 10 The non-operation in the interval of the Land Bank and the government machineries and agencies in the region which are envisioned in the Code to assist the share tenant in shedding off the yoke of tenancy and afford him the financial assistance to exercise his option of electing the leasehold system and his preferential right of purchasing the land cultivated by him could not possibly have been intended by Congress to prevent the exercise of any of these vital rights by a share tenant who is able to do so, e.g. to purchase the land, on his own and without government assistance. It would be absurd and unjust that while the government is unable to render such assistance, the share tenant would be deemed deprived of the very rights granted him by the Code which he is in a position to exercise even without government assistance. 6. Herein lies the distinction between the present case and Basbas vs. Entena 11 where the Court upheld the agrarian court's dismissal of the therein tenant's action to redeem the landholding sold to a third party by virtue of the tenant's failure to tender payment or consign the purchase price of the property. There, the tenantredemptioner was shown by the evidence to have no funds and had merely applied for them to the Land Authority which was not yet

operating in the locality and hence, the Court held that no part of the Code "indicates or even hints that the 2-year redemption period will not commence to run (indefinitely) until the tenant obtains financing from the Land Bank, or stops the tenant from securing redemption funds from some other source." 12 In the present case, the petitionerstenants' possession of funds and compliance with the requirements of redemption are not questioned, the case having been submitted and decided on the sole legal issue of the right of redemption being available to them as share tenants. The clear and logical implication of Basbas is where the tenant has his own resources or secures redemption funds from sources other than the Land Bank or government agencies under the Code, the fact that the locality has not been proclaimed a land reform area and that such government machineries and agencies are not operating therein is of no relevance and cannot prejudice the tenant's rights under the Code to redeem the landholding. 7. Even from the landowner's practical and equitable viewpoint, the landowner is not prejudiced in the least by recognizing the share tenant's right of redemption. The landowner, having decided to sell his land, has gotten his price therefor from his vendees. (The same holds true in case of the tenant's exercise of the pre-emptive right by the tenant who is called upon to pay the landowner the price, if reasonable, within ninety days from the landowner's written notice.) As for the vendees, neither are they prejudiced for they will get back from the tenant-redemptioner the price that they paid the vendor, if reasonable, since the Code grants the agricultural lessee or tenant the top priority of redemption of the landholding cultivated by him and expressly decrees that the same "shall have priority over any other right of legal redemption." In the absence of any provision in the Code as to manner of and amounts payable on redemption, the pertinent provisions of the Civil Code apply in a suppletory character. 13 Hence, the vendees would be entitled to receive from the redemptioners the amount of their purchase besides "(1) the expenses of the contract, and any other legitimate payments made by reason of the sale; (and) (2) the necessary and useful expenses made on the thing sold." 14 8. The historical background for the enactment of the Code's provisions on pre-emption and redemption further strengthens the Court's opinion. It is noted by Dean Montemayor 15 that "(T)his is a new right which has not been granted to tenants under the Agricultural Tenancy Act. It further bolsters the security of tenure of the agricultural lessee and further encourages agricultural lessees to become owner-cultivators. In the past, a landlord often ostensibly sold his land being cultivated by his tenant to another tenant, who in turn filed a petition for ejectment against the first tenant on the ground of personal cultivation. While many of such sales were simulated, there was a formal transfer of title in every case, and the first tenant was invariably ordered ejected. There is indication in this case of the same pattern of sale by the landowner to another tenant, 16 in order to effect the ejectment of petitioners-tenants. This is further bolstered by the fact that the sales were executed by respondent-vendor on September 27, 1963 and March 2, 1954 shortly after the enactment on August 8, 1963 of the Land Reform Code which furnishes still another reason for upholding ... petitioners-tenants' right of redemption, for certainly a landowner cannot be permitted to defeat the Code's clear intent by precipitately disposing of his lands, even before the tenant has been given the time to exercise his newly granted option to elect the new agricultural leasehold system established by the Code as a replacement for the share tenancy outlawed by it. 9. Clearly then, the Code intended, as above discussed, to afford the farmers' who transitionally continued to be share tenants after its enactment but who inexorably would be agricultural lessees by virtue of the Code's proclaimed abolition of tenancy, the same priority and preferential right as those other share tenants, who upon the enactment of the Code or soon thereafter were earlier converted by fortuitous circumstance into agricultural lessees, to acquire the lands under their cultivation in the event of their voluntary sale by the owner or of their acquisition, by expropriation or otherwise, by the Land Authority. It then becomes the court's duty to enforce the intent and will of the Code, for "... (I)n fact, the spirit or intention of a statute prevails over the letter thereof.' (Taada vs. Cuenco, L-10520, Feb. 23, 1957, citing 82 C.J.S., p. 526.) A statute 'should be construed according to its spirit or intention, disregarding as far as necessary, the letter of the law.' (Lopez & Sons, Inc. vs. Court of Tax Appeals, 100 Phil. 855.)

By this, we do not correct the act of the Legislature, but rather ... carry out and give due course to 'its intent.' (Lopez & Sons, Inc. vs. Court of Tax Appeals, 100 Phil. 850)." 17 The Court has consistently held in line with authoritative principles of statutory construction that, it will reject a narrow and literal interpretation, such as that given by the agrarian court, that would defeat and frustrate rather than foster and give life to the law's declared policy and intent. 18 Finally, under the established jurisprudence of the Court, in the interpretation of tenancy and labor legislation, it will be guided by more than just an inquiry into the letter of the law as against its spirit and will ultimately resolve grave doubts in favor of the tenant and worker. 19 The agrarian court's dismissal of the cases at bar should therefore be reversed and petitioners-tenants' right to redeem the landholdings recognized section 12 of the Code. In Case L-25326, however, the deed of sale executed by respondentvendor in favor of respondents-vendees for the price of P4,000.00 covers three parcels of land, while what is sought to be redeemed is only the first parcel of land of 22,876 square meters, described in the deed. Petitioners-tenants' allegation that the proportionate worth of said parcel "taking into account the respective areas, productivities, accessibilities and assessed values of the three lots," is P1,500.00, was traversed by respondents in their answer, with the claim that "the said land is fairly worth P20,000.00. 20 While the vendor would be bound by, and cannot claim more than, the price stated in the deed, and the Code precisely provides that the farmer shall have "the preferential right to buy the (landholding) under reasonable terms and conditions" or "redeem the same at a reasonable price and consideration" 21 with a view to affording the farmer the right to seek judicial assistance and relief to fix such reasonable price and terms when the landowner places in the notice to sell or deed an excessive or exorbitant amount in collusion with the vendee, we note that in this case the deed of sale itself acknowledged that the selling price of P4,000.00 therein stated was not the fair price since an additional consideration therein stated was that the vendees would support the vendor during his lifetime and take care of him, should he fall ill, and even assumed the expenses of his burial upon his death: Ang halagang P4,000.00 ay hindi kaulat sa tunay na halaga ng mga lupa subalit ang mga bumili ay may katungkulan na sostentohin ako habang ako'y nabubuhay, ipaanyo at ipagamot ako kung ako ay may sakit, saka ipalibing ako kung ako ay mamatay sa kanilang gastos at ito ay isa sa alang-alang o consideracion ng bilihang ito. Under these circumstances, since the agrarian court did not rule upon conflicting claims of the parties as to what was the proportionate worth of the parcel of land in the stated price of P4,000.00 whether P1,500.00 as claimed by petitioners or a little bit more, considering the proportionate values of the two other parcels, but the whole total is not to exceed the stated price of P4,000.00, since the vendor is bound thereby and likewise, what was the additional proportionate worth of the expenses assumed by the vendees, assuming that petitioners are not willing to assume the same obligation, the case should be remanded to the agrarian court solely for the purpose of determining the reasonable price and consideration to be paid by petitioners for redeeming the landholding, in accordance with these observations. In Case L-25327, there is no question as to the price of P750.00 paid by the vendees and no additional consideration or expenses, unlike in Case L-25326, supra, assumed by the vendees. Hence, petitioners therein are entitled to redeem the landholding for the same stated price. ACCORDINGLY, the decisions appealed from are hereby reversed, and the petitions to redeem the subject landholdings are granted. In Case L-25326, however, the case is remanded to the agrarian court solely for determining the reasonable price to be paid by petitioners therein to respondents-vendees for redemption of the landholding in accordance with the observations hereinabove made. No pronouncement as to costs. G.R. No. L-8888 November 29, 1957 SONG KIAT CHOCOLATE FACTORY, plaintiff-appellant, vs.

CENTRAL BANK OF THE PHILIPPINES and VICENTE GELLA, in his capacity as Treasurer of the Philippines, defendants-appellees. Rogelio M. Jalandoni for appellant. Office of the Solicitor General Ambrosio Padilla and Solicitor Jose P. Alejandro for appellee, Vicente Gella. Nat. M. Balbao and F. E. Evangelista for appellee, Central Bank of the Philippines. BENGZON, J.: The question in this appeal is whether cocoa beans may be considered as "chocolate" for the purposes of exemption from the foreign exchange tax imposed by Republic Act No. 601 as amended. During the period from January 8, 1953 to October 9, 1953, the plaintiff appellant imported sun dried cocoa beans for which it paid the foreign exchange tax of 17 per cent totalling P74,671.04. Claiming exemption from said tax under section 2 of same Act, it sued the Central Bank that had exacted payment; and in its amended complaint it included the Treasurer of the Philippines. The suit was filed in the Manila Court of First Instance, wherein defendants submitted in due time a motion to dismiss on the grounds: first, the complaint stated no cause of action because cocoa beans were not "chocolate"; and second, it was a suit against the Government without the latter's consent. . The Hon. Gregorio S. Narvasa, Judge, sustained the motion, and dismissed the case by his order of November 19, 1954. Hence this appeal. The lower court, appellant contends, erred in dismissing the case and in holding that the term "chocolate" does not include sun dried cocoa beans. SEC. 2 of the aforesaid Act provides that "the tax collected or foreign exchange used for the payment of costs transportation and/or other charges incident to importation into the Philippines of rice, flour ..soya beans, butterfat, chocolate, malt syrup .. shall be refunded to any importer making application therefor, upon satisfactory proof of actual importation . . ." In support of its contention appellant quotes from dictionaries and encyclopedias interchangeably using the words "chocolate", "cacao" and "cocoa". Yet we notice that the quotations refer to "cocoa" as chocolate nut" "chocolate bean" or "chocolate tree." And the legal exemption refers to "chocolate" not the bean, nor the nut nor the tree. We agree with the Solicitor General and the other counsel of respondents that in common parlance the law is presumed to refer to it1 chocolate is a manufactured or finished product made out of cocoa beans, or "cacao" beans as they are locally known. We may take notice of the fact that grocery stores sell powdered cocoa beans as chocolate, labeled "cocoa powder", or simply "cocoa". They are, however, really chocolate; they are not cocoa beans. The manufacture of chocolate involves several processes, such as selecting and drying the cocoa beans, then roasting, grinding, sieving and blending.2 Cocoa beans do not become chocolate unless and until they have undergone the manufacturing processes above described. The first is raw material, the other finished product. The courts regard "chocolate" as "Chocolate" is a preparation of roasted cacao beans without the abstraction of the butter and always contains sugar and added cacao butter. Rockwood & Co., vs. American President Lines, D. C. N. J., 68 F. Supp. 224, 226. Chocolate is a cocoa bean roasted, cracked, shelled, crushed, ground, and molded in cakes. It contains no sugar, and is in general use in families. Sweetened chocolate is manufactured in the same way but the paste is mixed wit sugar, and is used by confectioners in making chocolate confections. In re Schiling, 53 F. 81, 82, 3 C. C. A. 440. In view of the foregoing, and having in mind the principle of strict construction of statutes exempting from taxation,3 we are of the opinion and so hold, that the exemption for "chocolate" in the above section 2 does not include "cocoa beans". The one is raw material, the other manufactured consumer product; the latter is ready for human consumption; the former is not.

However, we cannot stop here, because in August 1954 suit was brought in May 1954 Congress approved Republic Act 1197 amending section 2 by substituting "cocoa beans" for "chocolate." This shows, maintains the appellant, the Legislature's intention to include cocoa beans in the word "chocolate." In fact, it goes on, the Committee Chairman who reported House Bill No. 2676 which became Republic Act 1197, declared before the House. Mr. ROCES: Mr. SPEAKER, on line 8 page 1, after the word 'canned', strike out the words, 'fresh, frozen and' and also the words 'other beef', on line 9 and on the same line, line 9, after the word 'chocolate', insert the words '(COCOA BEANS)' in parenthesis ( ). I am proposing to insert the words '(COCOA BEANS)' in parenthesis ( ) after the word chocolate, Mr. Speaker, in order to clarify any doubt and manifest the intention of the past Congress that the word 'chocolate' should mean 'cocoa beans. In reply to this, appellees point out that said chairman could not have spoken of the Congressional intention in approving Republic Act 601 because he was not a member of the Congress that passed said Act. Naturally, all he could state was his own interpretation of such piece of legislation. Courts do not usually give decisive weight to one legislator's opinion, expressed in Congressional debates concerning the application of existing laws.4 Yet even among the legislators taking part in the consideration of the amendatory statute (Republic Act 1197) the impression prevailed that, as the law then stood5 chocolate candy or chocolate bar was exempted, but cocoa beans were not. Here are Senator Peralta's statements during the discussion of the same House Bill No. 2576: SENATOR PERALTA: I signed that conference report and I am really bound by it, but, Mr. President, a few hours ago I received some information which maybe the chairman would like to know, to the effect that we allow chocolate bar, chocolate candy to come this country except from the 17 per cent tax when we do not allow cocoa beans, out of which our local manufacturers can make chocolate candy, exempted. So why do we not take off that exemption for chocolate and instead put 'cocoa beans' so as to benefit our manufacturers of chocolate candy? xxx xxx xxx.

The order of dismissal is affirmed, with costs against appellant. G.R. No. 106719 September 21, 1993 DRA. BRIGIDA S. BUENASEDA, Lt. Col. ISABELO BANEZ, JR., ENGR. CONRADO REY MATIAS, Ms. CORA S. SOLIS and Ms. ENYA N. LOPEZ, petitioners, vs. SECRETARY JUAN FLAVIER, Ombudsman CONRADO M. VASQUEZ, and NCMH NURSES ASSOCIATION, represented by RAOULITO GAYUTIN, respondents. Renato J. Dilag and Benjamin C. Santos for petitioners. Danilo C. Cunanan for respondent Ombudsman. Crispin T. Reyes and Florencio T. Domingo for private respondent.

QUIASON, J.: This is a Petition for Certiorari, Prohibition and Mandamus, with Prayer for Preliminary Injunction or Temporary Restraining Order, under Rule 65 of the Revised Rules of Court. Principally, the petition seeks to nullify the Order of the Ombudsman dated January 7, 1992, directing the preventive suspension of petitioners, Dr. Brigida S. Buenaseda, Chief of Hospital III; Isabelo C. Banez, Jr., Administrative Officer III; Conrado Rey Matias, Technical Assistant to the Chief of Hospital; Cora C. Solis, Accountant III; and Enya N. Lopez, Supply Officer III, all of the National Center for Mental Health. The petition also asks for an order directing the Ombudsman to disqualify Director Raul Arnaw and Investigator Amy de Villa-Rosero, of the Office of the Ombudsman, from participation in the preliminary investigation of the charges against petitioner (Rollo, pp. 2-17; Annexes to Petition, Rollo, pp. 19-21). The questioned order was issued in connection with the administrative complaint filed with the Ombudsman (OBM-ADM-0-91-0151) by the private respondents against the petitioners for violation of the AntiGraft and Corrupt Practices Act. According to the petition, the said order was issued upon the recommendation of Director Raul Arnaw and Investigator Amy de Villa-Rosero, without affording petitioners the opportunity to controvert the charges filed against them. Petitioners had sought to disqualify Director Arnaw and Investigator Villa-Rosero for manifest partiality and bias (Rollo, pp. 4-15). On September 10, 1992, this Court required respondents' Comment on the petition. On September 14 and September 22, 1992, petitioners filed a "Supplemental Petition (Rollo, pp. 124-130); Annexes to Supplemental Petition; Rollo pp. 140-163) and an "Urgent Supplemental Manifestation" (Rollo, pp. 164-172; Annexes to Urgent Supplemental Manifestation; Rollo, pp. 173-176), respectively, averring developments that transpired after the filing of the petition and stressing the urgency for the issuance of the writ of preliminary injunction or temporary restraining order. On September 22, 1992, this Court ". . . Resolved to REQUIRE the respondents to MAINTAIN in the meantime, the STATUS QUO pending filing of comments by said respondents on the original supplemental manifestation" (Rollo, p. 177). On September 29, 1992, petitioners filed a motion to direct respondent Secretary of Health to comply with the Resolution dated September 22, 1992 (Rollo, pp. 182-192, Annexes, pp. 192-203). In a Resolution dated October 1, 1992, this Court required respondent Secretary of Health to comment on the said motion. On September 29, 1992, in a pleading entitled "Omnibus Submission," respondent NCMH Nurses Association submitted its Comment to the Petition, Supplemental Petition and Urgent Supplemental Manifestation. Included in said pleadings were the motions to hold the

Senator PERALTA: Yes, I agree with the chairman, only I was just wondering if the chairman, might not consider the fact that in view of the information, this seems to be inconsistent we allow chocolate to come here exempt and not exempt cocoa beans which is used by our manufacturers in making chocolate candy. And Senator Puyat is quoted as saying, in the same connection: MR. PRESIDENT, On the same page (page 1), line 9, delete "cocoa beans". The text as it came to the Senate was misleading. In the original law the exemption is for chocolate and the version that we got from the Lower House is "(cocoa beans)" giving the impression that chocolate and cocoa beans are synonymous. Now I think this is a sort of a rider, so your committee recommends the deletion of those words. (Journal of the Senate, July 30, 1954, re H. B. No. 2576, Emphasis ours.) Other parts of the Congressional record quoted in the briefs would seem to show that in approving House Bill No. 2576, the Congress agreed to exempt "cocoa beans" instead of chocolate with a view to favoring local manufacturers of chocolate products.6 A change of legislative policy, as appellees contend7 not a declaration or clarification of previous Congressional purpose. In fact, as indicating, the Government's new policy of exempting for the first time importations of "cocoa beans," there is the President's proclamation No. 62 of September 2, 1954 issued in accordance with Republic Act No. 1197 specifying that said exemption (of cocoa beans) shall operate from and after September 3, 1954 not before. As a general rule, it may be added, statutes operate prospectively. Observe that appellant's cocoa beans had been imported during January-October 1953, i.e. before the exemption decree. After the foregoing discussion, it is hardly necessary to express our approval of the lower court's opinion about plaintiff's cause of action, or the lack of it. And it becomes unnecessary to consider the other contention of defendants that this is a suit against the Government without its consent.

lawyers of petitioners in contempt and to disbar them (Rollo, pp. 210267). Attached to the "Omnibus Submission" as annexes were the orders and pleadings filed in Administrative Case No. OBM-ADM-091-1051 against petitioners (Rollo, pp. 268-480). The Motion for Disbarment charges the lawyers of petitioners with: (1) unlawfully advising or otherwise causing or inducing their clients petitioners Buenaseda, et al., to openly defy, ignore, disregard, disobey or otherwise violate, maliciously evade their preventive suspension by Order of July 7, 1992 of the Ombudsman . . ."; (2) "unlawfully interfering with and obstructing the implementation of the said order (Omnibus Submission, pp. 50-52; Rollo, pp. 259-260); and (3) violation of the Canons of the Code of Professional Responsibility and of unprofessional and unethical conduct "by foisting blatant lies, malicious falsehood and outrageous deception" and by committing subornation of perjury, falsification and fabrication in their pleadings (Omnibus Submission, pp. 52-54; Rollo, pp. 261-263). On November 11, 1992, petitioners filed a "Manifestation and Supplement to 'Motion to Direct Respondent Secretary of Health to Comply with 22 September 1992 Resolution'" (Manifestation attached to Rollo without pagination between pp. 613 and 614 thereof). On November 13, 1992, the Solicitor General submitted its Comment dated November 10, 1992, alleging that: (a) "despite the issuance of the September 22, 1992 Resolution directing respondents to maintain the status quo, respondent Secretary refuses to hold in abeyance the implementation of petitioners' preventive suspension; (b) the clear intent and spirit of the Resolution dated September 22, 1992 is to hold in abeyance the implementation of petitioners' preventive suspension, the status quo obtaining the time of the filing of the instant petition; (c) respondent Secretary's acts in refusing to hold in abeyance implementation of petitioners' preventive suspension and in tolerating and approving the acts of Dr. Abueva, the OIC appointed to replace petitioner Buenaseda, are in violation of the Resolution dated September 22, 1992; and (d) therefore, respondent Secretary should be directed to comply with the Resolution dated September 22, 1992 immediately, by restoring the status quo ante contemplated by the aforesaid resolution" (Comment attached to Rollo without paginations between pp. 613-614 thereof). In the Resolution dated November 25, 1992, this Court required respondent Secretary to comply with the aforestated status quo order, stating inter alia, that: It appearing that the status quo ante litem motam, or the last peaceable uncontested status which preceded the present controversy was the situation obtaining at the time of the filing of the petition at bar on September 7, 1992 wherein petitioners were then actually occupying their respective positions, the Court hereby ORDERS that petitioners be allowed to perform the duties of their respective positions and to receive such salaries and benefits as they may be lawfully entitled to, and that respondents and/or any and all persons acting under their authority desist and refrain from performing any act in violation of the aforementioned Resolution of September 22, 1992 until further orders from the Court (Attached to Rollo after p. 615 thereof). On December 9, 1992, the Solicitor General, commenting on the Petition, Supplemental Petition and Supplemental Manifestation, stated that (a) "The authority of the Ombudsman is only to recommend suspension and he has no direct power to suspend;" and (b) "Assuming the Ombudsman has the power to directly suspend a government official or employee, there are conditions required by law for the exercise of such powers; [and] said conditions have not been met in the instant case" (Attached to Rollo without pagination). In the pleading filed on January 25, 1993, petitioners adopted the position of the Solicitor General that the Ombudsman can only suspend government officials or employees connected with his office. Petitioners also refuted private respondents' motion to disbar petitioners' counsel and to cite them for contempt (Attached to Rollo without pagination). The crucial issue to resolve is whether the Ombudsman has the power to suspend government officials and employees working in offices other than the Office of the Ombudsman, pending the investigation of the administrative complaints filed against said officials and employees.

In upholding the power of the Ombudsman to preventively suspend petitioners, respondents (Urgent Motion to Lift Status Quo, etc, dated January 11, 1993, pp. 10-11), invoke Section 24 of R.A. No. 6770, which provides: Sec. 24. Preventive Suspension. The Ombudsman or his Deputy may preventively suspend any officer or employee under his authority pending an investigation, if in his judgment the evidence of guilt is strong, and (a) the charge against such officer or employee involves dishonesty, oppression or grave misconduct or neglect in the performance of duty; (b) the charge would warrant removal from the service; or (c) the respondent's continued stay in office may prejudice the case filed against him. The preventive suspension shall continue until the case is terminated by the Office of Ombudsman but not more than six months, without pay, except when the delay in the disposition of the case by the Office of the Ombudsman is due to the fault, negligence or petition of the respondent, in which case the period of such delay shall not be counted in computing the period of suspension herein provided. Respondents argue that the power of preventive suspension given the Ombudsman under Section 24 of R.A. No. 6770 was contemplated by Section 13 (8) of Article XI of the 1987 Constitution, which provides that the Ombudsman shall exercise such other power or perform such functions or duties as may be provided by law." On the other hand, the Solicitor General and the petitioners claim that under the 1987 Constitution, the Ombudsman can only recommend to the heads of the departments and other agencies the preventive suspension of officials and employees facing administrative investigation conducted by his office. Hence, he cannot order the preventive suspension himself. They invoke Section 13(3) of the 1987 Constitution which provides that the Office of the Ombudsman shall have inter alia the power, function, and duty to: Direct the officer concerned to take appropriate action against a public official or employee at fault, and recommend his removal, suspension, demotion, fine, censure or prosecution, and ensure compliance therewith. The Solicitor General argues that under said provision of the Constitutions, the Ombudsman has three distinct powers, namely: (1) direct the officer concerned to take appropriate action against public officials or employees at fault; (2) recommend their removal, suspension, demotion fine, censure, or prosecution; and (3) compel compliance with the recommendation (Comment dated December 3, 1992, pp. 9-10). The line of argument of the Solicitor General is a siren call that can easily mislead, unless one bears in mind that what the Ombudsman imposed on petitioners was not a punitive but only a preventive suspension. When the constitution vested on the Ombudsman the power "to recommend the suspension" of a public official or employees (Sec. 13 [3]), it referred to "suspension," as a punitive measure. All the words associated with the word "suspension" in said provision referred to penalties in administrative cases, e.g. removal, demotion, fine, censure. Under the rule of Noscitor a sociis, the word "suspension" should be given the same sense as the other words with which it is associated. Where a particular word is equally susceptible of various meanings, its correct construction may be made specific by considering the company of terms in which it is found or with which it is associated (Co Kim Chan v. Valdez Tan Keh, 75 Phil. 371 [1945]; Caltex (Phils.) Inc. v. Palomar, 18 SCRA 247 [1966]). Section 24 of R.A. No. 6770, which grants the Ombudsman the power to preventively suspend public officials and employees facing administrative charges before him, is a procedural, not a penal statute. The preventive suspension is imposed after compliance with the requisites therein set forth, as an aid in the investigation of the administrative charges. Under the Constitution, the Ombudsman is expressly authorized to recommend to the appropriate official the discipline or prosecution of erring public officials or employees. In order to make an intelligent

determination whether to recommend such actions, the Ombudsman has to conduct an investigation. In turn, in order for him to conduct such investigation in an expeditious and efficient manner, he may need to suspend the respondent. The need for the preventive suspension may arise from several causes, among them, the danger of tampering or destruction of evidence in the possession of respondent; the intimidation of witnesses, etc. The Ombudsman should be given the discretion to decide when the persons facing administrative charges should be preventively suspended. Penal statutes are strictly construed while procedural statutes are liberally construed (Crawford, Statutory Construction, Interpretation of Laws, pp. 460-461; Lacson v. Romero, 92 Phil. 456 [1953]). The test in determining if a statute is penal is whether a penalty is imposed for the punishment of a wrong to the public or for the redress of an injury to an individual (59 Corpuz Juris, Sec. 658; Crawford, Statutory Construction, pp. 496-497). A Code prescribing the procedure in criminal cases is not a penal statute and is to be interpreted liberally (People v. Adler, 140 N.Y. 331; 35 N.E. 644). The purpose of R.A. No. 6770 is to give the Ombudsman such powers as he may need to perform efficiently the task committed to him by the Constitution. Such being the case, said statute, particularly its provisions dealing with procedure, should be given such interpretation that will effectuate the purposes and objectives of the Constitution. Any interpretation that will hamper the work of the Ombudsman should be avoided. A statute granting powers to an agency created by the Constitution should be liberally construed for the advancement of the purposes and objectives for which it was created (Cf. Department of Public Utilities v. Arkansas Louisiana Gas. Co., 200 Ark. 983, 142 S.W. (2d) 213 [1940]; Wallace v. Feehan, 206 Ind. 522, 190 N.E., 438 [1934]). In Nera v. Garcia, 106 Phil. 1031 [1960], this Court, holding that a preventive suspension is not a penalty, said: Suspension is a preliminary step in an administrative investigation. If after such investigation, the charges are established and the person investigated is found guilty of acts warranting his removal, then he is removed or dismissed. This is the penalty. To support his theory that the Ombudsman can only preventively suspend respondents in administrative cases who are employed in his office, the Solicitor General leans heavily on the phrase "suspend any officer or employee under his authority" in Section 24 of R.A. No. 6770. The origin of the phrase can be traced to Section 694 of the Revised Administrative Code, which dealt with preventive suspension and which authorized the chief of a bureau or office to "suspend any subordinate or employee in his bureau or under his authority pending an investigation . . . ." Section 34 of the Civil Service Act of 1959 (R.A. No. 2266), which superseded Section 694 of the Revised Administrative Code also authorized the chief of a bureau or office to "suspend any subordinate officer or employees, in his bureau or under his authority." However, when the power to discipline government officials and employees was extended to the Civil Service Commission by the Civil Service Law of 1975 (P.D. No. 805), concurrently with the President, the Department Secretaries and the heads of bureaus and offices, the phrase "subordinate officer and employee in his bureau" was deleted, appropriately leaving the phrase "under his authority." Therefore, Section 41 of said law only mentions that the proper disciplining authority may preventively suspend "any subordinate officer or employee under his authority pending an investigation . . ." (Sec. 41). The Administrative Code of 1987 also empowered the proper disciplining authority to "preventively suspend any subordinate officer or employee under his authority pending an investigation" (Sec. 51). The Ombudsman Law advisedly deleted the words "subordinate" and "in his bureau," leaving the phrase to read "suspend any officer or employee under his authority pending an investigation . . . ." The conclusion that can be deduced from the deletion of the word "subordinate" before and the words "in his bureau" after "officer or employee" is that the Congress intended to empower the Ombudsman

to preventively suspend all officials and employees under investigation by his office, irrespective of whether they are employed "in his office" or in other offices of the government. The moment a criminal or administrative complaint is filed with the Ombudsman, the respondent therein is deemed to be "in his authority" and he can proceed to determine whether said respondent should be placed under preventive suspension. In their petition, petitioners also claim that the Ombudsman committed grave abuse of discretion amounting to lack of jurisdiction when he issued the suspension order without affording petitioners the opportunity to confront the charges against them during the preliminary conference and even after petitioners had asked for the disqualification of Director Arnaw and Atty. Villa-Rosero (Rollo, pp. 613). Joining petitioners, the Solicitor General contends that assuming arguendo that the Ombudsman has the power to preventively suspend erring public officials and employees who are working in other departments and offices, the questioned order remains null and void for his failure to comply with the requisites in Section 24 of the Ombudsman Law (Comment dated December 3, 1992, pp. 11-19). Being a mere order for preventive suspension, the questioned order of the Ombudsman was validly issued even without a full-blown hearing and the formal presentation of evidence by the parties. In Nera, supra, petitioner therein also claimed that the Secretary of Health could not preventively suspend him before he could file his answer to the administrative complaint. The contention of petitioners herein can be dismissed perfunctorily by holding that the suspension meted out was merely preventive and therefore, as held in Nera, there was "nothing improper in suspending an officer pending his investigation and before tho charges against him are heard . . . (Nera v. Garcia., supra). There is no question that under Section 24 of R.A. No. 6770, the Ombudsman cannot order the preventive suspension of a respondent unless the evidence of guilt is strong and (1) the charts against such officer or employee involves dishonesty, oppression or grave misconduct or neglect in the performance of duty; (2) the charge would warrant removal from the service; or (3) the respondent's continued stay in office may prejudice the case filed against him. The same conditions for the exercise of the power to preventively suspend officials or employees under investigation were found in Section 34 of R.A. No. 2260. The import of the Nera decision is that the disciplining authority is given the discretion to decide when the evidence of guilt is strong. This fact is bolstered by Section 24 of R.A. No. 6770, which expressly left such determination of guilt to the "judgment" of the Ombudsman on the basis of the administrative complaint. In the case at bench, the Ombudsman issued the order of preventive suspension only after: (a) petitioners had filed their answer to the administrative complaint and the "Motion for the Preventive Suspension" of petitioners, which incorporated the charges in the criminal complaint against them (Annex 3, Omnibus Submission, Rollo, pp. 288-289; Annex 4, Rollo, pp. 290-296); (b) private respondent had filed a reply to the answer of petitioners, specifying 23 cases of harassment by petitioners of the members of the private respondent (Annex 6, Omnibus Submission, Rollo, pp. 309-333); and (c) a preliminary conference wherein the complainant and the respondents in the administrative case agreed to submit their list of witnesses and documentary evidence. Petitioners herein submitted on November 7, 1991 their list of exhibits (Annex 8 of Omnibus Submission, Rollo, pp. 336-337) while private respondents submitted their list of exhibits (Annex 9 of Omnibus Submission, Rollo, pp. 338-348). Under these circumstances, it can not be said that Director Raul Arnaw and Investigator Amy de Villa-Rosero acted with manifest partiality and bias in recommending the suspension of petitioners. Neither can it be said that the Ombudsman had acted with grave abuse of discretion in acting favorably on their recommendation. The Motion for Contempt, which charges the lawyers of petitioners with unlawfully causing or otherwise inducing their clients to openly defy and disobey the preventive suspension as ordered by the Ombudsman and the Secretary of Health can not prosper (Rollo, pp. 259-261). The Motion should be filed, as in fact such a motion was filed, with the Ombudsman. At any rate, we find that the acts alleged to constitute indirect contempt were legitimate measures taken by said

lawyers to question the validity and propriety of the preventive suspension of their clients. On the other hand, we take cognizance of the intemperate language used by counsel for private respondents hurled against petitioners and their counsel (Consolidated: (1) Comment on Private Respondent" "Urgent Motions, etc.; (2) Adoption of OSG's Comment; and (3) Reply to Private Respondent's Comment and Supplemental Comment, pp. 4-5). A lawyer should not be carried away in espousing his client's cause. The language of a lawyer, both oral or written, must be respectful and restrained in keeping with the dignity of the legal profession and with his behavioral attitude toward his brethren in the profession (Lubiano v. Gordolla, 115 SCRA 459 [1982]). The use of abusive language by counsel against the opposing counsel constitutes at the same time a disrespect to the dignity of the court of justice. Besides, the use of impassioned language in pleadings, more often than not, creates more heat than light. The Motion for Disbarment (Rollo, p. 261) has no place in the instant special civil action, which is confined to questions of jurisdiction or abuse of discretion for the purpose of relieving persons from the arbitrary acts of judges and quasi-judicial officers. There is a set of procedure for the discipline of members of the bar separate and apart from the present special civil action. WHEREFORE, the petition is DISMISSED and the Status quo ordered to be maintained in the Resolution dated September 22, 1992 is LIFTED and SET ASIDE. SO ORDERED. G.R. No. L-6835 March 30, 1954 THE PEOPLE OF THE PHILIPPINES, Plaintiff-Appellant, vs. FAUSTO YADAO, ET AL., Defendants-Appellees. Office of the Solicitor General Juan R. Liwag and Solicitor Augusto M. Luciano for appellant. Jose T. Cajulis for appellees. BENGZON, J.:

(c) Any person assisting a claimant . . . who shall collect his fee before the claim is actually paid.chanroblesvirtualawlibrary chanrobles virtual law library In all the three instances the person must be one "assisting" the claimant. 1 The principle "assisting" and the clause "assisting a claimant in the preparation etc." qualify "any person" as antecedent of the pronoun "who" in the phrases, "who shall solicit", "who shall attempt to solicit" or "who shall collect".chanroblesvirtualawlibrary chanrobles virtual law library Examining the information, we find it does not aver that the defendants assisted or were assisting the claimant for veterans benefits. It merely asserts they offered to assist, and it is evident that violation is committed only when a person receives or attempts to solicit etc. more than is permitted by law. One who offers to assist, but does not assist, is not included within the penal prohibition, which by its nature must be restrictively interpreted, or strictly construed against the government. 2 Of course there was an attempt to commit the offense described by Republic Act No. 145. But the said statute does not expressly punish attempts to commit the offense, and the provisions of the Penal Code about attempts (tentativas) do not apply. 3 chanrobles virtual law library The prosecution relies upon Sanchez vs. U.S. 134 Fed. (2nd) 279, 63 S. Ct. 1325, 319 U.S. 768 wherein this was said: A showing that an excessive fee was solicited, contracted for, charged or received for assistance in preparation and execution of necessary papers in any application to Veterans' Administration will support a conviction of violation of fee limitation for assistance in such application regardless of whether such assistance was in fact rendered. But such adjudication is not conclusive, because the statute therein construed differs materially from ours. It punishes "any person who shall directly or indirectly contract for, charge or receive, or who shall attempt to solicit, contract for excessive compensation." The section does not contain the phrase "assisting a claimant" after the words "any person" and before the words "who shall etc". That phrase conditions each and every violation of section 1 of Republic Act No. 145. The appealed decision quashing the indictment is, therefore, affirmed, without costs. G.R. No. 86738 November 13, 1991

The sole question for decision is whether the information filed against defendant-appellees in the Court of First Instance of Rizal sufficiently describes a violation of section 1 of Republic Act No. 145, which reads as follows: Any person assisting a claimant in the preparation, presentation and prosecution of his claim for benefits under the laws of the United States administered by the United States Veterans Administration, who shall, directly or indirectly, solicit, contract, for charge, or receive, or who shall attempt to solicit, contract for, charge, or receive any fee or compensation exceeding twenty pesos in any one claim, or who shall collect his fee before the claim is actually paid to a beneficiary or claimant, shall be deemed guilty of an offense and upon conviction thereof shall for every offense be fined not exceeding one thousand pesos or imprisoned not exceeding two years, or both, in the discretion of the court. Said information alleges that defendants conspiring together, willfully did "offer to assist one Floverto Jazmin in the prosecution and expeditious approval of his legitimate claim of $2,207 for benefits under the laws of the United States administered in the Philippines by the United States Veterans Administration, and as consideration for which, said accused directly solicited and/or charged said Floverto Jazmin as fee or compensation the sum of P800 which is in excess of the lawful charge of P20 in any one claim." The Honorable Julio Villamor, Judge, upheld a motion to quash, on the ground that the facts charged did not constitute a public offense. Hence this appeal by the prosecution, raising the juridical issue above stated. It is clear, in our opinion, that section 1 of Republic Act 145 punishes: (a) Any person assisting a claimant etc., . . . who shall directly or indirectly solicit . . . a fee exceeding twenty pesos; (b) Any person assisting a claimant . . . who shall attempt to solicit, . . . a fee exceeding twenty pesos; and chanrobles virtual law library

NESTLE PHILIPPINES, INC., petitioner, vs. COURT OF APPEALS and SECURITIES AND EXCHANGE COMMISSION, respondents. Nepomuceno, Hofilena & Guingona for petitioner.

FELICIANO, J.:p Sometime in February 1983, the authorized capital stock of petitioner Nestle Philippines Inc. ("Nestle") was increased from P300 million divided into 3 million shares with a par value of P100.00 per share, to P600 million divided into 6 million shares with a par value of P100.00 per share. Nestle underwent the necessary procedures involving Board and stockholders approvals and effected the necessary filings to secure the approval of the increase of authorized capital stock by respondent Securities and Exchange Commission ("SEC"), which approval was in fact granted. Nestle also paid to the SEC the amount of P50,000.00 as filing fee in accordance with the Schedule of Fees and Charges being implemented by the SEC under the Corporation Code. 1 Nestle has only two (2) principal stockholders: San Miguel Corporation and Nestle S.A. The other stockholders, who are individual natural persons, own only one (1) share each, for qualifying purposes, i.e., to qualify them as members of the Board of Directors being elected thereto on the strength of the votes of one or the other principal shareholder. On 16 December 1983, the Board of Directors and stockholders of Nestle approved resolutions authorizing the issuance of 344,500 shares out of the previously authorized but unissued capital stock of Nestle,

exclusively to San Miguel Corporation and to Nestle S.A. San Miguel Corporation subscribed to and completely paid up 168,800 shares, while Nestle S.A. subscribed to and paid up the balance of 175,700 shares of stock. On 28 March 1985, petitioner Nestle filed a letter signed by its Corporate Secretary, M.L. Antonio, with the SEC seeking exemption of its proposed issuance of additional shares to its existing principal shareholders, from the registration requirement of Section 4 of the Revised Securities Act and from payment of the fee referred to in Section 6(c) of the same Act. In that letter, Nestle requested confirmation of the correctness of two (2) propositions submitted by it: 1. That there is no need to file a petition for exemption under Section 6(b) of the Revised Securities Act with respect to the issuance of the said 344,600 additional shares to our existing stockholders out of our unissued capital stock; and 2. That the fee provided in Section 6(c) of [the Revised Securities] Act is not applicable to the said issuance of additional shares. 2 The principal, indeed the only, argument presented by Nestlewas that Section 6(a) (4) of the Revised Securities Act which provides as follows: Sec. 6. Exempt transactions. a) The requirement of registration under subsection (a) of Section four of this Act shall not apply to the sale of any security in any of the following transactions: xxx xxx xxx

In a letter dated 26 June 1986, the SEC through its then Chairman Julio A. Sulit, Jr. responded adversely to petitioner's requests and ruled that the proposed issuance of shares did not fall under Section 6 (a) (4) of the Revised Securities Act, since Section 6 (a) (4) is applicable only where there is an increase in the authorized capital stock of a corporation. Chairman Sulit held, however, that the proposed transaction could be considered by the Commission under the provisions of Section 6 (b) of the Revised Securities Act which reads as follows: (b) The Commission may, from time to time and subject to such terms and conditions as it may prescribe, exempt transactions other than those provided in the preceding paragraph, if it finds that the enforcement of the requirements of registration under this Act with respect to such transactions is not necessary in the public interest and for the protection of the investors by reason of the small amount involved or the limited character of the public offering. The Commission then advised petitioner to file the appropriate request for exemption and to pay the fee required under Section 6 (c) of the statute, which provides: (c) A fee equivalent to one-tenth of one per centum of the maximum aggregate price or issued value of the securities shall be collected by the Commission for granting a general or particular exemption from the registration requirements of this Act. Petitioner moved for reconsideration of the SEC ruling, without success. On 3 July 1987, petitioner sought review of the SEC ruling before this Court which, however, referred the petition to the Court of Appeals. In a decision dated 13 January 1989, the Court of Appeals sustained the ruling of the SEC. Dissatisfied with the Decision of the Court of Appeals, Nestle is now before this Court on a Petition for Review, raising the very same issues that it had raised before the SEC and the Court of Appeals. Examining the words actually used in Section 6 (a) (4) of the Revised Securities Act, and bearing in mind common corporate usage in this jurisdiction, it will be seen that the statutory phrase "issuance of additional capital stock" is indeed infected with a certain degree of ambiguity. This phrase may refer either to: a) the issuance of capital stock as part of and in the course of increasing the authorized capital stock of a corporation; or (b) issuance of already authorized but still unissued capital stock. By the same token, the phrase "increased capital stock" found at the end of Section 6 (a) (4), may refer either: 1) to newly or contemporaneously authorized capital stock issued in the course of increasing the authorized capital stock of a corporation; or 2) to previously authorized but unissued capital stock. Under Section 38 of the Corporation Code, a corporation engaged in increasing its authorized capital stock, with the required vote of its Board of Directors and of its stockholders, must file a sworn statement of the treasurer of the corporation showing that at least twenty-five percent (25%) of "such increased capital stock" has been subscribed and that at least twenty-five percent (25%) of the amount subscribed has been paid either in actual cash or in property transferred to the corporation. In other words, the corporation must issue at least twenty-five percent (25%) of the newly or contemporaneously authorized capital stock in the course of complying with the requirements of the Corporation Code for increasing its authorized capital stock. In contrast, after approval by the SEC of the increase of its authorized capital stock, and from time to time thereafter, the corporation, by a vote of its Board of Directors, and without need of either stockholder or SEC approval, may issue and sell shares of its already authorized but still unissued capital stock to existing shareholders or to members of the general public. 5 Both the SEC and the Court of Appeals resolved the ambiguity by construing Section 6 (a) (4) as referring only to the issuance of shares of stock as part of and in the course of increasing the authorized capital stock of Nestle. In the case at bar, since the 344,500 shares of Nestle capital stock are proposed to be issued from already authorized but still

(4) The distribution by a corporation, actively engaged in the business authorized by its articles of incorporation, of securities to its stockholders or other security holders as a stock dividend or other distribution out of surplus; or the issuance of securities to the security holder or other creditors of a corporation in the process of a bona fide reorganization of such corporation made in good faith and not for the purpose of avoiding the provisions of this Act, either in exchange for the securities of such security holders or claims of such creditors or partly for cash and partly in exchange for the securities or claims of such security holders or creditors; or the issuance of additional capital stock of a corporation sold or distributed by it among its own stockholders exclusively, where no commission or other remuneration is paid or given directly or indirectly in connection with the sale or distribution of such increased capital stock. (Emphasis supplied) embraces "not only an increase in the authorized capital stock but also the issuance of additional shares to existing stockholders of the unissued portion of the unissued capital stock". 3 Nestle urged that interpretation upon the following argument. The use of the term "increased capital stock" should be interpreted to refer to additional capital stock or equity participation of the existing stockholders as a consequence of either an increase of the authorized capital stock or the issuance of unissued capital stock. If the intention of the pertinent legal provision [were] to limit the exemption to subscription to proposed increases in the authorized capital stock of a corporation, we see no reason why the law should not have been more specific or accurate about it. It certainly should have mentioned "increase in the authorized capital stock of the corporation" rather than merely the expression "the issuance of additional capital stock 4 (Emphasis supplied) Nestle expressly represented in the same letter that all the additional shares proposed to be issued would be issued only to San Miguel Corporation and Nestle S.A. and that no commission or other form of remuneration had been given, directly or indirectly, in connection with the issuance or distribution of such additional shares of stock. In respect of its claimed exemption from the fee provided for in Section 6(c) of the Revised Securities Act, Nestle contended that since Section 6 (a) (4) of the statute declares (in Nestle's view) the proposed issuance of 344,500 previously authorized but unissued shares of Nestle's capital stock to its existing shareholders as an exempt transaction, the SEC could not collect fees for "the same transaction" twice. Nestle adverted to its payment back in 21 February 1983 of the amount of P50,000.00 as filing fees to the SEC when it applied for and eventually received approval of the increase of its authorized capital stock effected by Board and shareholder action last 16 December 1983.

unissued capital stock and since the present authorized capital stock of 6,000,000 shares with a par value of P100.00 per share is not proposed to be further increased, the SEC and the Court of Appeals rejected Nestle's petition. We believe and so hold that the construction thus given by the SEC and the Court of Appeals to Section 6 (a) (4) of the Revised Securities Act must be upheld. In the first place, it is a principle too well established to require extensive documentation that the construction given to a statute by an administrative agency charged with the interpretation and application of that statute is entitled to great respect and should be accorded great weight by the courts, unless such construction is clearly shown to be in sharp conflict with the governing statute or the Constitution and other laws. As long ago as 1903, this Court said in In re Allen 6 that [t]he principle that the contemporaneous construction of a statute by the executive officers of the government, whose duty is to execute it, is entitled to great respect, and should ordinarily control the construction of the statute by the courts, is so firmly embedded in our jurisdiction that no authorities need be cited to support it. 7 The rationale for this rule relates not only to the emergence of the multifarious needs of a modern or modernizing society and the establishment of diverse administrative agencies for addressing and satisfying those needs; it also relates to accumulation of experience and growth of specialized capabilities by the administrative agency charged with implementing a particular statute. 8 In Asturias Sugar Central, Inc. v. Commissioner of Customs 9 the Court stressed that executive officials are presumed to have familiarized themselves with all the considerations pertinent to the meaning and purpose of the law, and to have formed an independent, conscientious and competent expert opinion thereon. The courts give much weight to contemporaneous construction because of the respect due the government agency or officials charged with the implementation of the law, their competence, expertness, experience and informed judgment, and the fact that they frequently are the drafters of the law they interpret. 10 In the second place, and more importantly, consideration of the underlying statutory purpose of Section 6(a) (4) compels us to sustain the view taken by the SEC and the Court of Appeals. The reading by the SEC of the scope of application of Section 6(a) (4) permits greater opportunity for the SEC to implement the statutory objective of protecting the investing public by requiring proposed issuers of capital stock to inform such public of the true financial conditions and prospects of the corporation. By limiting the class of exempt transactions contemplated by the last clause of Section 6(a) (4) to issuances of stock done in the course of and as part of the process of increasing the authorized capital stock of a corporation, the SEC is enabled to examine issuances by a corporation of previously authorized but theretofore unissued capital stock, on a case-to-case basis, under Section 6(b); and thereunder, to grant or withhold exemption from the normal registration requirements depending upon the perceived level of need for protection by the investing public in particular cases. When capital stock is issued in the course of and in compliance with the requirements of increasing its authorized capital stock under Section 38 of the Corporation Code, the SEC as a matter of course examines the financial condition of the corporation, and hence there is no real need for exercise of SEC authority under the Revised Securities Act. Thus, one of the multiple documentation requirements under the current regulations of the SEC in respect of filing a certificate of increase of authorized capital stock, is submission of "a financial statement duly certified by an independent Certified Public Accountant (CPA) as of the latest date possible or as of the date of the meeting when stockholders approved the increase/decrease in capital stock or thereabouts. 11 When all or part of the newly authorized capital stock is proposed to be issued as stock dividends, the SEC requirements are even more exacting; they require, in addition to the regular audited financial statements, the submission by the corporation of a "detailed or Long Form Report of the certifying Auditor." Moreover, since approval of an increase in authorized capital stock by the stockholders holding two-thirds (2/3) of the outstanding capital stock is required by Section 38 of the Corporation Code, at a stockholders meeting held for that purpose, the directors and officers of the corporation may be expected to take pains to inform the shareholders of the financial condition and prospects of the corporation and of the proposed utilization of the fresh capital sought to be raised.

Upon the other hand, as already noted, issuance of previously authorized but theretofore unissued capital stock by the corporation requires only Board of Directors approval. Neither notice to nor approval by the shareholders or the SEC is required for such issuance. There would, accordingly, under the view taken by petitioner Nestle, no opportunity for the SEC to see to it that shareholders (especially the small stockholders) have a reasonable opportunity to inform themselves about the very fact of such issuance and about the condition of the corporation and the potential value of the shares of stock being offered. Under the reading urged by petitioner Nestle of the reach and scope of the third clause of Section 6(a) (4), the issuance of previously authorized but unissued capital stock would automatically constitute an exempt transaction, without regard to the length of time which may have intervened between the last increase in authorized capital stock and the proposed issuance during which time the condition of the corporation may have substantially changed, and without regard to whether the existing stockholders to whom the shares are proposed to be issued are only two giant corporations as in the instant case, or are individuals numbering in the hundreds or thousands. In contrast, under the ruling issued by the SEC, an issuance of previously authorized but still unissued capital stock may, in a particular instance, be held to be an exempt transaction by the SEC under Section 6(b) so long as the SEC finds that the requirements of registration under the Revised Securities Act are "not necessary in the public interest and for the protection of the investors" by reason, inter alia, of the small amount of stock that is proposed to be issued or because the potential buyers are very limited in number and are in a position to protect themselves. In fine, petitioner Nestle's proposed construction of Section 6(a) (4) would establish an inflexible rule of automatic exemption of issuances of additional, previously authorized but unissued, capital stock. We must reject an interpretation which may disable the SEC from rendering protection to investors, in the public interest, precisely when such protection may be most needed. Petitioner Nestle's second claim for exemption is from payment of the fee provided for in Section 6 (c) of the Revised Securities Act, a claim based upon petitioner's contention that Section 6 (a) (4) covers both issuance of stock in the course of complying with the statutory requirements of increase of authorized capital stock and issuance of previously authorized and unissued capital stock. Petitioner claims that to require it now to pay one-tenth of one percent (1%) of the issued value of the 344,500 shares of stock proposed to be issued, is to require it to pay a second time for the same service on the part of the SEC. Since we have above rejected petitioner's reading of Section 6 (a) (4), last clause, petitioner's claim about the additional fee of one-tenth of one percent (1%) of the issue value of the proposed issuance of stock (amounting to P34,450 plus P344.50 for other fees or a total of P37,794.50) need not detain us for long. We think it clear that the fee collected in 21 February 1983 by the SEC was assessed in connection with the examination and approval of the certificate of increase of authorized capital stock then submitted by petitioner. The fee, upon the other hand, provided for in Section 6 (c) which petitioner will be required to pay if it does file an application for exemption under Section 6 (b), is quite different; this is a fee specifically authorized by the Revised Securities Act, (not the Corporation Code) in connection with the grant of an exemption from normal registration requirements imposed by that Act. We do not find such fee either unreasonable or exorbitant. WHEREFORE, for all the foregoing, the Petition for Review on Certiorari is hereby DENIED for lack of merit and the Decision of the Court of Appeals dated 13 January 1989 in C.A.-G.R. No. SP-13522, is hereby AFFIRMED. Costs against petitioner. SO ORDERED. [G.R. No. 99859. September 20, 1996] PHILIPPINE SCOUT VETERANS SECURITY & INVESTIGATION AGENCY, INC., petitioner, vs. NATIONAL LABOR RELATIONS COMMISSION and PORPING REGALADO, respondents. DECISION

PANGANIBAN, J.: Does the Labor Code, prior to its amendment by Republic Act No. 7641,[1] authorize the payment of retirement pay in the absence of a provision therefor in a collective bargaining agreement or other applicable employment contract? The instant petition for certiorari seeks to nullify the Decision of the National Labor Relations Commission[2] promulgated January 10, 1991, in NLRC Case No. 00-05-02236-89, entitled Porping Regalado vs. Phil. Scout Veterans Security & Investigation Agency, Inc. and/or Col. Cesar Sa Macalalad, affirming the labor arbiters[3] award of retirement pay to private respondent. The Antecedent Facts Private respondent worked for the petitioner as a security guard since September 1963 until his retirement at the age of 60 on March 20, 1989, with a monthly salary of P1,480.00. He formally requested petitioner for payment of his retirement pay, but petitioner refused, stating that it would give him financial assistance instead, without specifying the amount, which offer was refused by the private respondent. On May 11, 1989, private respondent filed a complaint for nonpayment of retirement benefits against petitioner, docketed as NLRC Case No. 00-05-02236-89. Petitioner, in its position paper, alleged that private respondent was not entitled to retirement pay since there was no company policy which provided for nor any collective bargaining agreement granting it. On September 19, 1989, the arbiter rendered his decision in favor of private respondent.[4] Inasmuch as his ratiocination may be indicative of the mind-set of our labor officialdom, we quote the same below: It is admitted that it is provided in Article 287 of the Labor Code that in case of retirement, the employee shall be entitled to receive such retirement benefits as he may have earned under existing laws and any CBA or other agreement. Since there is no CBA nor company policy granting the same, we have to look into other articles of the Labor Code. Article 283 of the Labor Code requires employer to give separation pay to employees who were retrenched at the rate of one month salary for every year of service when the termination is a result of installation of labor saving device and one-half month pay for every year of service in case of retrenchment due to prevent losses (sic), closure or cessation of operations of establishment or undertaking not due to serious business losses or financial reverses. Article 284 of the Labor Code also requires employer to pay an employee his separation pay at the rate of one-half month salary for every year of service when terminated due to incurable disease. An analysis of this article will reveal that it is the intention of the Code to provide same financial assistance to these people who are dislocated either because of loss of employment or due to disease and yet, an employee who retires and ironically whose company does not have any CBA nor policy providing for retirement pay will not receive any retirement pay for him to augment and supply his needs during his old age. This matter has to be correct(ed) and it will be an injustice if such retirement pay will be denied to complainant. After all, the company has benefitted from the service of the employee, hence, it is only fitting for the company to provide him some funds for his old age. Also, equity demands that in cases where there is no CBA nor company policy providing a retirement pay, an employer must pay its employee the needed retirement pay. WHEREFORE, judgment is hereby rendered ordering the respondent Phil. Scout Veterans Security and Investigation Agency, Inc. to pay complainant his retirement pay at the rate of one-half month salary for every year of service, a fraction of at least six (6) months considered as one year of service. Petitioner appealed to the respondent National Labor Relations Commission, which in its now-assailed Decision[5] affirmed the arbiter: An employee is entitled to retirement benefits even in the absence of a company retirement plan or collective bargaining agreement. This is the import of Article 287 of the Labor Code, as amended, and implemented by Sections 13 and 14, Rule I, Book V (sic) of the Rules Implementing the Labor Code. Thus in a case, this Commission (1st Division) ruled: With respect to the award of retirement benefits, the contention of respondent-appellant that complainant is not entitled to his claim of retirement benefits or to his termination or separation pay because he was not retired under the bonafide retirement plan or under an individual or collective bargaining agreement or under company policy, is highly untenable because Rule I, Sections 13 and 14, Book VI of the Rules Implementing the Labor Code taken together clearly states that, with or without a retirement plan, individual or collective bargaining agreement or company policy, an employee who retires or is retired at the age of sixty (60) or over, is entitled to termination pay equivalent to one-half month salary for every year of service, a fraction of at least six (6) months being considered as one whole year. Moreover, if social justice and compassion to labor demand that termination pay be granted to victims of mechanization, redundancy, retrenchment to avoid losses and which are, from the standpoint of affected employees usually temporary contingency that do not prevent them from sooner or later being gainfully employed again, we feel that there is far greater need to cushion retired employees from the difficulties attendant to old age and permanent idleness. And in protecting retired employees, we are also protecting their dependents. This is the essence of social justice. (Angel T. Tolentino vs. Standard Wood Products Company, Inc., NLRC Case No. NCR-5-3847-82, NLRC First Division, Promulgated July 8, 1987.) Petitioner moved for reconsideration but respondent Commission denied the same for lack of merit. Hence, this recourse. This Court issued a temporary restraining order on June 10, 1991, enjoining respondent Commission and its representatives from enforcing its January 10, 1991 Decision. In a Manifestation in Lieu of Comment dated July 25, 1991, the Solicitor General agreed with the petitioners position. The Issues Petitioner alleges that respondent Commission acted with grave abuse of discretion: A x x x IN APPLYING THE PROVISIONS OF ARTICLE 283 AND ARTICLE 284 OF THE LABOR CODE OF THE PHILIPPINES, AS AMENDED, AS THE LAW THAT PROVIDE FOR RETIREMENT PAY TO PRIVATE RESPONDENT. B x x x IN ISSUING THE QUESTIONED RESOLUTION WHICH RESULTED IN ADMINISTRATIVE LEGISLATION. In a nutshell, the issue here is whether or not private respondent is legally entitled to retirement benefits. The Courts Ruling The main contention of both petitioner and the Solicitor General is that there is no contractual nor statutory basis for the grant of retirement pay, hence, said award is improper. The petition is impressed with merit. The applicable provisions of the Labor Code on the matter of retirement are Art. 287 of the Labor Code, and Sections 13 and 14(a) of Rule I, Book VI of the Implementing Rules, which read as follows: Article 287. Retirement. Any employee may be retired upon reaching the retirement age established in the collective bargaining agreement or other applicable employment contract. In case of retirement, the employee shall be entitled to receive such retirement benefits as he may have earned under existing laws and any collective bargaining or other agreement. xxx xxx xxx

Sec. 13. Retirement. In the absence of any collective bargaining agreement or other applicable agreement concerning terms and

conditions of employment which provides for retirement at an older age, an employee may be retired upon reaching the age of sixty (60) years. Sec. 14. Retirement Benefits. (a) An employee who is retired pursuant to a bona-fide retirement plan or in accordance with the applicable individual or collective agreement or established employer policy shall be entitled to all the retirement benefits provided therein or to termination pay equivalent at least to one-half month salary for every year of service, whichever is higher, a fraction of at least six (6) months being considered as one whole year. It is at once apparent from a cursory reading of the arbiters decision that, in making the award of retirement pay, he was confronted by the lack of contractual or statutory basis therefor. Undaunted, he scavenged for a basis from among the other provisions of the Labor Code. Seizing upon Articles 283 and 284, he concluded that it is ironical and unjust that some financial assistance is provided for people who are dismissed from their jobs and who can presumably still find other work and continue to earn a livelihood, but not for those who are retired and facing the difficulties attendant to old age and permanent idleness. This reflection exudes wisdom; unfortunately, it lacks legal basis. Going even deeper, respondent Commission, instead of clearing up the confusion, added to it by construing Sections 13 and 14(a) of Rule I, Book VI of the Implementing Rules in relation to Art. 287 as basis for the grant of retirement benefits to private respondent. But far from being novel, this issue had already been settled in Abaquin Security and Detective Agency, Inc. vs. Atienza,[6] where this Court held: Construing these provisions in relation to the same issue presented in this petition, this Court in the case of Llora Motors, Inc., and/or Constantino Carlota, Jr. vs. Hon. Franklin Drilon, et al., (G.R. No. 82895, November 7, 1989) clarified that Article 288 (now 287) does not itself purport to impose any obligation upon employers to set up a retirement scheme for their employees over and above that already established under existing laws. In other words, Article 287 recognizes that existing laws already provide for a scheme by which retirement benefits may be earned or accrue in favor of employees, as part of a broader social security system that provides not only for retirement benefits but also death and funeral benefits, permanent disability benefits, sickness benefits and maternity leave benefits. In Llora Motors, Inc. vs. Drilon,[7] this Court sought to end the confusion caused by the wording of Section 14 abovequoted, and differentiated between the concepts of termination pay and retirement benefits. We clarified that the phrase pay equivalent at least one-half month salary for every year of service, whichever is higher pertains to termination pay: x x x Section 14 (a) refers to termination pay equivalent to at least one-half (1/2) month for every year of service while Section 14 (b) mentions termination pay to which the employee would have been entitled had there been no such retirement fund as well as termination pay the employee is entitled to receive. It should be recalled that Sections 13 and 14 are found in Implementing Rule I which deals with both termination of employment and retirement. It is important to keep the two (2) concepts of termination pay and retirement benefits separate and distinct from each other. Termination pay or separation pay is required to be paid by an employer in particular situations identified by the Labor Code itself or by Implementing Rule I. Termination pay where properly due and payable under some applicable provision of the Labor Code or under Section 4 (b) of Implementing Rule I, must be paid whether or not an additional retirement plan has been set up under an agreement with the employer or under an established employer policy. What needs to be stressed, however, is that Section 14 of Implementing Rule I, like Article 287 of the Labor Code, does not purport to require termination pay to be paid to an employee who may want to retire but for whom no additional retirement plan had been set up by prior agreement with the employer. Thus, Section 14 itself speaks of an employee who is retired pursuant to a bonafide retirement plan or in accordance with the applicable individual or collective agreement or established employer policy x x x. (italics in the original text.)

Consequently, the Decision in question has to be struck down for being legally indefensible. While Article 287 has since been amended by Republic Act No. 7641 (approved on December 9, 1992) to read as follows: x x x xxx xxx

In the absence of a retirement plan or agreement providing for retirement benefits of employees in the establishment, an employee upon reaching the age of sixty (60) years or more, but not beyond sixtyfive (65) years which is hereby declared the compulsory retirement age, who has served at least five (5) years in the said establishment, may retire and shall be entitled to retirement pay equivalent to at least onehalf (1/2) month salary for every year of service, a fraction of at least six (6) months being considered as one whole year. Unless the parties provide for broader inclusions, the term one half (1/2) month salary shall mean fifteen (15) days plus one-twelfth (1/12) of the 13th month pay and the cash equivalent of not more than five (5) days of service incentive leaves. xxx xxx x x x

nevertheless, the aforequoted provisions, which could have saved the day for the private respondent, cannot be applied in this case, since private respondent retired on March 20, 1989, or about three years prior to the approval of the new retirement law. RA 7641 is to be effective prospectively, absent a clear intention on the part of the legislature to give it retroactivity.[8] It is a rule of statutory construction that all statutes are to be construed as having only a prospective operation unless the purpose and intention of the Legislature to give them a retrospective effect is expressly declared or is necessarily implied from the language used. In every case of doubt, the doubt must be resolved against the retrospective effect.[9] The fact that respondent Commission had a prior ruling in a similar case[10]granting retirement benefits is of no moment. Although it may be true that the contemporaneous construction of a statute by executive officers tasked to enforce and implement said statute should be given great weight by the courts, nevertheless, if such construction is erroneous[11] or is clearly shown to be in conflict with the governing statute or the Constitution or other laws,[12] the same must be declared null and void. It is the role of the Judiciary to refine and, when necessary, correct constitutional (and/or statutory) interpretation, in the context of the interactions of the three branches of the government.[13] Had respondent Commission simply followed our ruling in Llora Motors, this problem would not have reached this far. Besides, with Lloras promulgation in 1989, the ruling in the Tolentino case was effectively superseded. It has been held that (i)t is axiomatic that retirement laws are liberally construed and administered in favor of the persons intended to be benefited. All doubts as to the intent of the law should be resolved in favor of the retiree to achieve its humanitarian purposes.[14] The intention is to provide for the retirees sustenance and hopefully even comfort, when he no longer has the stamina to continue earning his livelihood. Unfortunately, such interpretation cannot be made in this case in the light of the clear lack of consensual and statutory basis of the grant of retirement benefits to private respondent. In all, it has been sufficiently shown that respondent Commission acted in grave abuse of discretion by affirming the grant of retirement benefits to private respondent despite our pronouncements on the matter. WHEREFORE, the instant petition is hereby GRANTED and the assailed Decision SET ASIDE. No costs. SO ORDERED. G.R. No. 168617 February 19, 2007

BERNADETTE L. ADASA, petitioner, vs. CECILLE S. ABALOS, Respondent.

DECISION CHICO-NAZARIO, J.: This Petition for Review under Rule 45 of the Rules of Court, filed by petitioner Bernadette L. Adasa, seeks to nullify and set aside the 21 July 2004 Decision1 and 10 June 2005 Resolution2 of the Court of Appeals in CA-G.R. SP No. 76396 which nullified the Resolutions of the Department of Justice (DOJ). The Resolutions of the DOJ reversed and set aside the Resolution of the Office of the City Prosecutor of Iligan City, which found on reinvestigation probable cause against petitioner, and directed the Office of the City Prosecutor of Iligan City to withdraw the information for Estafa against petitioner. The instant case emanated from the two complaints-affidavits filed by respondent Cecille S. Abalos on 18 January 2001 before the Office of the City Prosecutor of Iligan City, against petitioner for Estafa. Respondent alleged in the complaints-affidavits that petitioner, through deceit, received and encashed two checks issued in the name of respondent without respondents knowledge and consent and that despite repeated demands by the latter, petitioner failed and refused to pay the proceeds of the checks. On 23 March 2001, petitioner filed a counter-affidavit admitting that she received and encashed the two checks issued in favor of respondent. In her Supplemental Affidavit filed on 29 March 2001, petitioner, however, recanted and alleged instead that it was a certain Bebie Correa who received the two checks which are the subject matter of the complaints and encashed the same; and that said Bebie Correa left the country after misappropriating the proceeds of the checks. On 25 April 2001, a resolution was issued by the Office of the City Prosecutor of Iligan City finding probable cause against petitioner and ordering the filing of two separate Informations for Estafa Thru Falsification of Commercial Document by a Private Individual, under Article 315 in relation to Articles 171 and 172 of the Revised Penal Code, as amended. Consequently, two separate criminal cases were filed against petitioner docketed as Criminal Cases No. 8781 and No. 8782, raffled to Branches 4 and 5, Regional Trial Court of Iligan City, respectively. This instant petition pertains only to Criminal Case No. 8782. On 8 June 2001, upon motion of the petitioner, the trial court in Criminal Case No. 8782 issued an order directing the Office of the City Prosecutor of Iligan City to conduct a reinvestigation. After conducting the reinvestigation, the Office of the City Prosecutor of Iligan City issued a resolution dated 30 August 2001, affirming the finding of probable cause against petitioner. Meanwhile, during her arraignment on 1 October 2001 in Criminal Case No. 8782, petitioner entered an unconditional plea of not guilty.3 Dissatisfied with the finding of the Office of the City Prosecutor of Iligan City, petitioner filed a Petition for Review before the DOJ on 15 October 2001. In a Resolution dated 11 July 2002, the DOJ reversed and set aside the 30 August 2001 resolution of the Office of the City Prosecutor of Iligan City and directed the said office to withdraw the Information for Estafa against petitioner. The said DOJ resolution prompted the Office of the City Prosecutor of Iligan City to file a "Motion to Withdraw Information" on 25 July 2002. On 26 July 2002, respondent filed a motion for reconsideration of said resolution of the DOJ arguing that the DOJ should have dismissed outright the petition for review since Section 7 of DOJ Circular No. 70 mandates that when an accused has already been arraigned and the aggrieved party files a petition for review before the DOJ, the Secretary of Justice cannot, and should not take cognizance of the petition, or even give due course thereto, but instead deny it outright. Respondent

claimed Section 12 thereof mentions arraignment as one of the grounds for the dismissal of the petition for review before the DOJ. In a resolution dated 30 January 2003, the DOJ denied the Motion for Reconsideration opining that under Section 12, in relation to Section 7, of DOJ Circular No. 70, the Secretary of Justice is not precluded from entertaining any appeal taken to him even where the accused has already been arraigned in court. This is due to the permissive language "may" utilized in Section 12 whereby the Secretary has the discretion to entertain an appealed resolution notwithstanding the fact that the accused has been arraigned. Meanwhile, on 27 February 2003, the trial court issued an order granting petitioners "Motion to Withdraw Information" and dismissing Criminal Case No. 8782. No action was taken by respondent or any party of the case from the said order of dismissal. Aggrieved by the resolution of the DOJ, respondent filed a Petition for Certiorari before the Court of Appeals. Respondent raised the following issues before the appellate court: 1. Whether or not the Department of Justice gravely abused its discretion in giving due course to petitioners petition for review despite its having been filed after the latter had already been arraigned; 2. Whether or not there is probable cause that the crime of estafa has been committed and that petitioner is probably guilty thereof; 3. Whether or not the petition before the Court of Appeals has been rendered moot and academic by the order of the Regional Trial Court dismissing Criminal Case No. 8782. The Court of Appeals in a Decision dated 21 July 2004 granted respondents petition and reversed the Resolutions of the DOJ dated 11 July 2002 and 30 January 2003. In resolving the first issue, the Court of Appeals, relying heavily on Section 7 of DOJ Circular No. 70 which states "[i]f an information has been filed in court pursuant to the appealed resolution, the petition shall not be given due course if the accused had already been arraigned," ruled that since petitioner was arraigned before she filed the petition for review with the DOJ, it was imperative for the DOJ to dismiss such petition. It added that when petitioner pleaded to the charge, she was deemed to have waived her right to reinvestigation and right to question any irregularity that surrounds it. Anent the second issue, the Court of Appeals declared that the existence of probable cause or the lack of it, cannot be dealt with by it since factual issues are not proper subjects of a Petition for Certiorari. In disposing of the last issue, the Court of Appeals held that the order of the trial court dismissing the subject criminal case pursuant to the assailed resolutions of the DOJ did not render the petition moot and academic. It said that since the trial courts order relied solely on the resolutions of the DOJ, said order is void as it violated the rule which enjoins the trial court to assess the evidence presented before it in a motion to dismiss and not to rely solely on the prosecutors averment that the Secretary of Justice had recommended the dismissal of the case. Dissatisfied by the Court of Appeals ruling, petitioner filed a Motion for Reconsideration setting forth the following grounds: 1. that the over-all language of Sections 7 and 12 of Department Circular No. 70 is permissive and directory such that the Secretary of Justice may entertain an appeal despite the fact that the accused had been arraigned; 2. that the contemporaneous construction by the Secretary of Justice should be given great weight and respect; 3. that Section 7 of the Circular applies only to resolutions rendered pursuant to a preliminary investigation, not on a reinvestigation; 4. that the trial courts order of dismissal of the criminal case has rendered the instant petition moot and academic; 5. that her arraignment was null and void it being conducted despite her protestations; and

6. that despite her being arraigned, the supposed waiver of her right to preliminary investigation has been nullified or recalled by virtue of the trial courts order of reinvestigation.4 The Court of Appeals stood firm by its decision. This time, however, it tried to construe Section 7 side by side with Section 12 of DOJ Circular No. 70 and attempted to reconcile these two provisions. According to the appellate court, the phrase "shall not" in paragraph two, first sentence of Section 7 of subject circular, to wit: If an information has been filed in court pursuant to the appealed resolution, the petition shall not be given due course if the accused had already been arraigned. x x x. (Emphasis supplied.) employed in the circular denotes a positive prohibition. Applying the principle in statutory construction - that when a statute or provision contains words of positive prohibition, such as "shall not," "cannot," or "ought not" or which is couched in negative terms importing that the act shall not be done otherwise than designated, that statute or provision is mandatory, thus rendering the provision mandatory it opined that the subject provision simply means that the Secretary of Justice has no other course of action but to deny or dismiss a petition before him when arraignment of an accused had already taken place prior to the filing of the petition for review. On the other hand, reading Section 12 of the same circular which reads: The Secretary may reverse, affirm or modify the appealed resolution. He may, motu proprio or upon motion, dismiss the petition for review on any of the following grounds: xxxx (e) That the accused had already been arraigned when the appeal was taken; x x x. the Court of Appeals opined that the permissive word "may" in Section 12 would seem to imply that the Secretary of Justice has discretion to entertain an appeal notwithstanding the fact that the accused has been arraigned. This provision should not be treated separately, but should be read in relation to Section 7. The two provisions, taken together, simply meant that when an accused was already arraigned when the aggrieved party files a petition for review, the Secretary of Justice cannot, and should not take cognizance of the petition, or even give due course thereto, but instead dismiss or deny it outright. The appellate court added that the word "may" in Section 12 should be read as "shall" or "must" since such construction is absolutely necessary to give effect to the apparent intention of the rule as gathered from the context. As to the contemporaneous construction of the Secretary of Justice, the Court of Appeals stated that the same should not be given weight since it was erroneous. Anent petitioners argument that Section 7 of the questioned circular applies only to original resolutions that brought about the filing of the corresponding informations in court, but not to resolutions rendered pursuant to a motion for reinvestigation, the appellate court simply brushed aside such contention as having no basis in the circular questioned. It also rejected petitioners protestation that her arraignment was forced upon her since she failed to present any evidence to substantiate the same. It is petitioners contention that despite her being arraigned, the supposed waiver of her right to preliminary investigation has been nullified by virtue of the trial courts order or reinvestigation. On this score, the Court of Appeals rebuffed such argument stating that there was no "supposed waiver of preliminary investigation" to speak of for the reason that petitioner had actually undergone preliminary investigation. Petitioner remained unconvinced with the explanations of the Court of Appeals. Hence, the instant petition.

Again, petitioner contends that the DOJ can give due course to an appeal or petition for review despite its having been filed after the accused had already been arraigned. It asserts that the fact of arraignment of an accused before the filing of an appeal or petition for review before the DOJ "is not at all relevant" as the DOJ can still take cognizance of the appeal or Petition for Review before it. In support of this contention, petitioner set her sights on the ruling of this Court in Crespo v. Mogul,5 to wit: The rule therefore in this jurisdiction is that once a complaint or information is filed in Court any disposition of the case as to its dismissal or the conviction or acquittal of the accused rests in the sound discretion of the Court. Although the fiscal retains the direction and control of the prosecution of criminal cases even while the case is already in Court he cannot impose his opinion on the trial court. The Court is the best and sole judge on what to do with the case before it. The determination of the case is within its exclusive jurisdiction and competence. A motion to dismiss the case filed by the fiscal should be addressed to the Court who has the option to grant or deny the same. It does not matter if this is done before or after the arraignment of the accused or that the motion was filed after a reinvestigation or upon instructions of the Secretary of Justice who reviewed the records of the investigation. (Emphasis supplied.) To bolster her position, petitioner cites Roberts v. Court of Appeals,6 which stated: There is nothing in Crespo vs. Mogul which bars the DOJ from taking cognizance of an appeal, by way of a petition for review, by an accused in a criminal case from an unfavorable ruling of the investigating prosecutor. It merely advised the DOJ to, "as far as practicable, refrain from entertaining a petition for review or appeal from the action of the fiscal, when the complaint or information has already been filed in Court. x x x. (Emphasis supplied.) Petitioner likewise invokes Marcelo v. Court of Appeals7 where this Court declared: Nothing in the said ruling forecloses the power or authority of the Secretary of Justice to review resolutions of his subordinates in criminal cases. The Secretary of Justice is only enjoined to refrain as far as practicable from entertaining a petition for review or appeal from the action of the prosecutor once a complaint or information is filed in court. In any case, the grant of a motion to dismiss, which the prosecution may file after the Secretary of Justice reverses an appealed resolution, is subject to the discretion of the court. The Court is unconvinced. A cursory reading of Crespo v. Mogul reveals that the ruling therein does not concern the issue of an appeal or petition for review before the DOJ after arraignment. Verily, the pronouncement therein has to do with the filing of a motion to dismiss and the courts discretion to deny or grant the same. As correctly pointed out by respondent, the emphasized portion in the Crespo ruling is a parcel of the entire paragraph which relates to the duty and jurisdiction of the trial court to determine for itself whether or not to dismiss a case before it, and which states that such duty comes into play regardless of whether such motion is filed before or after arraignment and upon whose instructions. The allusion to the Secretary of Justice as reviewing the records of investigation and giving instructions for the filing of a motion to dismiss in the cited ruling does not take into consideration of whether the appeal or petition before the Secretary of Justice was filed after arraignment. Significantly, in the Crespo case, the accused had not yet been arraigned when the appeal or petition for review was filed before the DOJ. Undoubtedly, petitioners reliance on the said case is misplaced. Also unavailing is petitioners invocation of the cases of Roberts v. Court of Appeals and Marcelo v. Court of Appeals. As in Crespo v. Mogul, neither Roberts v. Court of Appeals nor Marcelo v. Court of Appeals took into account of whether the appeal or petition before the Secretary of Justice was filed after arraignment. Just like in the Crespo case, the accused in both Roberts v. Court of Appeals and Marcelo v. Court of Appeals had not yet been arraigned when the appeal or petition for review was filed before the DOJ. Moreover, petitioner asserts that the Court of Appeals interpretation of the provisions of DOJ Circular No. 70 violated three basic rules in

statutory construction. First, the rule that the provision that appears last in the order of position in the rule or regulation must prevail. Second, the rule that the contemporaneous construction of a statute or regulation by the officers who enforce it should be given weight. Third, petitioner lifted a portion from Agpalos Statutory Construction8 where the word "shall" had been construed as a permissive, and not a mandatory language. The all too-familiar rule in statutory construction, in this case, an administrative rule9 of procedure, is that when a statute or rule is clear and unambiguous, interpretation need not be resorted to.10 Since Section 7 of the subject circular clearly and categorically directs the DOJ to dismiss outright an appeal or a petition for review filed after arraignment, no resort to interpretation is necessary. Petitioners reliance to the statutory principle that "the last in order of position in the rule or regulation must prevail" is not applicable. In addition to the fact that Section 7 of DOJ Circular No. 70 needs no construction, the cited principle cannot apply because, as correctly observed by the Court of Appeals, there is no irreconcilable conflict between Section 7 and Section 12 of DOJ Circular No. 70. Section 7 of the circular provides: SECTION 7. Action on the petition. The Secretary of Justice may dismiss the petition outright if he finds the same to be patently without merit or manifestly intended for delay, or when the issues raised therein are too unsubstantial to require consideration. If an information has been filed in court pursuant to the appealed resolution, the petition shall not be given due course if the accused had already been arraigned. Any arraignment made after the filing of the petition shall not bar the Secretary of Justice from exercising his power of review. (Italics supplied.) On the other hand, Section 12 of the same circular states: SECTION 12. Disposition of the Appeal. The Secretary may reverse, affirm or modify the appealed resolution. He may, motu proprio or upon motion, dismiss the petition for review on any of the following grounds: (a) That the petition was filed beyond the period prescribed in Section 3 hereof; (b) That the procedure or any of the requirements herein provided has not been complied with; (c) That there is no showing of any reversible error; (d) That the appealed resolution is interlocutory in nature, except when it suspends the proceedings based on the alleged existence of a prejudicial question; (e) That the accused had already been arraigned when the appeal was taken; (f) That the offense has already prescribed; and (g) That other legal or factual grounds exist to warrant a dismissal. (Emphases supplied.) It is noteworthy that the principle cited by petitioner reveals that, to find application, the same presupposes that "one part of the statute cannot be reconciled or harmonized with another part without nullifying one in favor of the other." In the instant case, however, Section 7 is neither contradictory nor irreconcilable with Section 12. As can be seen above, Section 7 pertains to the action on the petition that the DOJ must take, while Section 12 enumerates the options the DOJ has with regard to the disposition of a petition for review or of an appeal. As aptly observed by respondent, Section 7 specifically applies to a situation on what the DOJ must do when confronted with an appeal or a petition for review that is either clearly without merit, manifestly intended to delay, or filed after an accused has already been arraigned, i.e., he may dismiss it outright if it is patently without merit or manifestly intended to delay, or, if it was filed after the acccused has already been arraigned, the Secretary shall not give it due course.

Section 12 applies generally to the disposition of an appeal. Under said section, the DOJ may take any of four actions when disposing an appeal, namely: 1. reverse the appealed resolution; 2. modify the appealed resolution; 3. affirm the appealed resolution; 4. dismiss the appeal altogether, depending on the circumstances and incidents attendant thereto. As to the dismissal of a petition for review or an appeal, the grounds are provided for in Section 12 and, consequently, the DOJ must evaluate the pertinent circumstances and the facts of the case in order to determine which ground or grounds shall apply. Thus, when an accused has already been arraigned, the DOJ must not give the appeal or petition for review due course and must dismiss the same. This is bolstered by the fact that arraignment of the accused prior to the filing of the appeal or petition for review is set forth as one of the grounds for its dismissal. Therefore, in such instance, the DOJ, noting that the arraignment of an accused prior to the filing of an appeal or petition for review is a ground for dismissal under Section 12, must go back to Section 7 and act upon as mandated therein. In other words, the DOJ must not give due course to, and must necessarily dismiss, the appeal. Likewise, petitioners reliance on the principle of contemporary construction, i.e., the DOJ is not precluded from entertaining appeals where the accused had already been arraigned, because it exercises discretionary power, and because it promulgated itself the circular in question, is unpersuasive. As aptly ratiocinated by the Court of Appeals: True indeed is the principle that a contemporaneous interpretation or construction by the officers charged with the enforcement of the rules and regulations it promulgated is entitled to great weight by the court in the latters construction of such rules and regulations. That does not, however, make such a construction necessarily controlling or binding. For equally settled is the rule that courts may disregard contemporaneous construction in instances where the law or rule construed possesses no ambiguity, where the construction is clearly erroneous, where strong reason to the contrary exists, and where the court has previously given the statute a different interpretation. If through misapprehension of law or a rule an executive or administrative officer called upon to implement it has erroneously applied or executed it, the error may be corrected when the true construction is ascertained. If a contemporaneous construction is found to be erroneous, the same must be declared null and void. Such principle should be as it is applied in the case at bar.11 Petitioners posture on a supposed exception to the mandatory import of the word "shall" is misplaced. It is petitioners view that the language of Section 12 is permissive and therefore the mandate in Section 7 has been transformed into a matter within the discretion of the DOJ. To support this stance, petitioner cites a portion of Agpalos Statutory Construction which reads: For instance, the word "shall" in Section 2 of Republic Act 304 which states that "banks or other financial institutions owned or controlled by the Government shall, subject to availability of funds xxx, accept at a discount at not more than two per centum for ten years such (backpay) certificate" implies not a mandatory, but a discretionary, meaning because of the phrase "subject to availability of funds." Similarly, the word "shall" in the provision to the effect that a corporation violating the corporation law "shall, upon such violation being proved, be dissolved by quo warranto proceedings" has been construed as "may."12 After a judicious scrutiny of the cited passage, it becomes apparent that the same is not applicable to the provision in question. In the cited passage, the word "shall" departed from its mandatory import connotation because it was connected to certain provisos/conditions: "subject to the availability of funds" and "upon such violation being proved." No such proviso/condition, however, can be found in Section

7 of the subject circular. Hence, the word "shall" retains its mandatory import. At this juncture, the Court of Appeals disquisition in this matter is enlightening: Indeed, if the intent of Department Circular No. 70 were to give the Secretary of Justice a discretionary power to dismiss or to entertain a petition for review despite its being outrightly dismissible, such as when the accused has already been arraigned, or where the crime the accused is being charged with has already prescribed, or there is no reversible error that has been committed, or that there are legal or factual grounds warranting dismissal, the result would not only be incongruous but also irrational and even unjust. For then, the action of the Secretary of Justice of giving due course to the petition would serve no purpose and would only allow a great waste of time. Moreover, to give the second sentence of Section 12 in relation to its paragraph (e) a directory application would not only subvert the avowed objectives of the Circular, that is, for the expeditious and efficient administration of justice, but would also render its other mandatory provisions - Sections 3, 5, 6 and 7, nugatory.13 In her steadfast effort to champion her case, petitioner contends that the issue as to whether the DOJ rightfully entertained the instant case, despite the arraignment of the accused prior to its filing, has been rendered moot and academic with the order of dismissal by the trial court dated 27 February 2003. Such contention deserves scant consideration. It must be stressed that the trial court dismissed the case precisely because of the Resolutions of the DOJ after it had, in grave abuse of its discretion, took cognizance of the petition for review filed by petitioner. Having been rendered in grave abuse of its discretion, the Resolutions of the DOJ are void. As the order of dismissal of the trial court was made pursuant to the void Resolutions of the DOJ, said order was likewise void. The rule in this jurisdiction is that a void judgment is a complete nullity and without legal effect, and that all proceedings or actions founded thereon are themselves regarded as invalid and ineffective for any purpose.14 That respondent did not file a motion for reconsideration or appeal from the dismissal order of the trial court is of no moment. Since the dismissal was void, there was nothing for respondent to oppose. Petitioner further asserts that Section 7 of DOJ Circular No. 70 applies only to appeals from original resolution of the City Prosecutor and does not apply in the instant case where an appeal is interposed by petitioner from the Resolution of the City Prosecutor denying her motion for reinvestigation. This claim is baseless.1avvphi1.net A reading of Section 7 discloses that there is no qualification given by the same provision to limit its application to appeals from original resolutions and not to resolutions on reinvestigation. Hence, the rule stating that "when the law does not distinguish, we must not distinguish"15 finds application in this regard. Petitioner asserts that her arraignment was null and void as the same was improvidently conducted. Again, this contention is without merit. Records reveal that petitioners arraignment was without any restriction, condition or reservation.16 In fact she was assisted by her counsels Atty. Arthur Abudiente and Atty. Maglinao when she pleaded to the charge.17 Moreover, the settled rule is that when an accused pleads to the charge, he is deemed to have waived the right to preliminary investigation and the right to question any irregularity that surrounds it.18 This precept is also applicable in cases of reinvestigation as well as in cases of review of such reinvestigation. In this case, when petitioner unconditionally pleaded to the charge, she effectively waived the reinvestigation of the case by the prosecutor as well as the right to appeal the result thereof to the DOJ Secretary. Thus, with the arraignment of the petitioner, the DOJ Secretary can no longer entertain the appeal or petition for review because petitioner had already waived or abandoned the same. Lastly, while there is authority19 permitting the Court to make its own determination of probable cause, such, however, cannot be made applicable in the instant case. As earlier stated, the arraignment of petitioner constitutes a waiver of her right to preliminary investigation or reinvestigation. Such waiver is tantamount to a finding of probable

cause. For this reason, there is no need for the Court to determine the existence or non-existence of probable cause. Besides, under Rule 45 of the Rules of Court, only questions of law may be raised in, and be subject of, a petition for review on certiorari since this Court is not a trier of facts. This being the case, this Court cannot review the evidence adduced by the parties before the prosecutor on the issue of the absence or presence of probable cause.20 WHEREFORE, the petition is DENIED. The Decision of the Court of Appeals dated 21 July 2004 and its Resolution dated 10 June 2005 in CA-G.R. SP No. 76396 are AFFIRMED. Costs against petitioner. SO ORDERED. [G.R. No. 98239. April 25, 1996] CONSUELO VALDERRAMA, petitioner, vs. NATIONAL LABOR RELATIONS COMMISSION, FIRST DIVISION AND MARIA ANDREA SAAVEDRA, respondents. SYLLABUS 1. REMEDIAL LAW; CIVIL PROCEDURE; RULE ON FINALITY OF JUDGMENTS; EXCEPTIONS; WHERE CIRCUMSTANCES RENDER ITS EXECUTION IMPOSSIBLE. - The rule that once a judgment becomes final it can no longer be disturbed, altered, or modified is not an inflexible one. It admits of exceptions, as where facts and circumstances transpire after a judgment has become final and executory which render its execution impossible or unjust. In such a case the modification of the decision may be sought by the interested party and the court will modify and alter the judgment to harmonize it with justice and the facts. 2. ID.; ID.; ID.; ID.; MODIFICATION OF JUDGMENT IN LABOR CASE APPROPRIATE AS WHERE CLAIM IN COMPANY NO LONGER FEASIBLE, EMPLOYEE CAN GO AFTER ITS OFFICERS. Modification of the judgment is appropriate considering that the company is no longer in operation and there is no showing that it has filed bankruptcy proceedings in which private respondent might file a claim and pursue her remedy under Article 110 of the Labor Code. Holding petitioner officer personally liable for the judgment in this case is eminently just and proper considering that, although the dispositive portion of the decision mentions only the respondent company, the text repeatedly mentions respondents in assessing liability for the illegal dismissal of private respondent. There can be no doubt of their personal liability. The mere happenstance that only the company is mentioned should not, therefore, be allowed to obscure the fact that in the text of the decision petitioner and her corespondents below were found guilty of having illegally dismissed private respondent and of claiming that private respondents employment was terminated because of retrenchment, when the truth was that she was dismissed for pregnancy. Hence they should be held personally liable for private respondents reinstatement with backwages. Indeed it is well said that to get the true intent and meaning of a decision, no specific portion thereof should be resorted to but same must be considered in its entirety. 3. LABOR LAW AND SOCIAL LEGISLATION; EMPLOYER CORPORATION AND ITS OFFICERS; LIABILITY. - Under the Labor Code, petitioner officer is herself considered an employer. In A. C. Ransom Labor Union-CCLU v. NLRC, we held: Employer includes any person acting in the interest of an employer, directly or indirectly. Since RANSOM is an artificial person, it must have an officer who can be presumed to be the employer, being the person acting in the interest of (the) employer. The corporation, only in the technical sense, is the employer. The responsible officer of an employer corporation can be held personally, not to say even criminally, liable for the non-payment of backwages. A corporation can only act through its officers and agents. Any decision against the company can be enforced against the officers in their personal capacities should the corporation fail to satisfy the judgment against it. Where the employer corporation is no longer existing and [is] unable to satisfy the judgment in favor of the employee, the officer should be held liable for acting on behalf of the corporation. In this case, documents show that petitioner controlled the company owning 1,993 of its 2,000 shares.

4. ID.; TECHNICAL RULES OF PROCEDURE MAY BE DISREGARDED FOR THE PROTECTION OF LABOR. - There was really no amendment of the decision but only a clarification. But even if appeal was required in order to correct the error, in the interest of substantial justice, especially in cases involving rights of workers, the procedural lapse in this case may be disregarded. APPEARANCES OF COUNSEL Chaves Hechanova Lim Law Offices for petitioner. Ramon A. Gonzales for private respondent. DECISION MENDOZA, J.: On October 27, 1983, Maria Andrea Saavedra, herein private respondent, filed a complaint against the COMMODEX (Phils.), Inc., petitioner Consuelo Valderrama as owner, Tranquilino Valderrama as executive vice president and Jose Ma. Togle as vice president and general manager, for reinstatement and backwages.[1] On December 2, 1986, the Labor Arbiter rendered a decision, finding private respondent to have been illegally dismissed and holding the respondent COMMODEX liable. It was shown that private respondent had been dismissed from her employment due to her pregnancy, contrary to allegations of petitioner and her corespondents therein that the termination of her employment was due to redundancy and retrenchment.[2] The dispositive portion of the Labor Arbiters decision reads: WHEREFORE, judgment is hereby rendered ordering respondent company: 1. to reinstate complainant to her former position with full backwages at the rate of P1,474.00 per month from the date she was illegally dismissed on 16 March 1983 until actually reinstated without loss of seniority right and other benefits which she could have earned were it not for her illegal dismissal; 2. to pay complainant moral and exemplary damages in the amount of P20,000.00 and P5,000.00, respectively; and, 3. to pay complainant attorneys fees equivalent to ten (10%) percent of the total award. A writ of execution was granted, but it was returned unsatisfied.[3] The sheriff reported that COMMODEX had ceased operation, while the individual officers, who were corespondents in the case, took the position that the writ could not be enforced against them on the ground that the dispositive portion of the decision mentioned only COMMODEX. Private respondent filed a Motion for Clarification in which she prayed: WHEREFORE, it is most respectfully prayed that the dispositive part of the decision be clarified to read as follows: WHEREFORE, judgment is hereby rendered ordering respondents jointly and severally: 1. to reinstate complainant to her former position with full backwages at the rate of P 1,474.00 per month from the date she was illegally dismissed on 16 March 1983 until actually reinstated without loss of seniority right and other benefits which she could have earned were it not for her illegal dismissal; 2. to pay complainant moral and exemplary damages in the amount of P20,000.00 and P5,000.00, respectively; and 3. to pay complainant attorneys fee equivalent to ten (10%) percent of the total award. Private respondent contended that the body of the decision clearly held the petitioner and her corespondents therein to be liable and that [t]herefore, this Office is not precluded from correcting the inadvertence by clarifying the words respondent company which ought to have been respondents jointly and severally in order to make the fallo or dispositive part correspond or correlate with the body of the final decision, considering that the unjust dismissal of the

complainant constitutes tort or quasidelict. (Article 2176, New Civil Code). Petitioner and her corespondents therein filed an opposition to the motion for clarification. They contended that the decision of the Labor Arbiter had become final and executory and could no longer be amended.[4] In reply private respondent argued that no amendment of a final decision was being sought but only the correction of a mistake or a clarification of an ambiguity because the exclusion [of the other respondents] in the dispositive part of the decision is merely a clerical error or mistake, since in the body of the decision they [petitioner and corespondents therein] were included, hence said error or mistake can yet be corrected even if the decision is already final.[5] On April 12, 1988, the Labor Arbiter, citing our ruling in A. C. Ransom Labor Union-CCLU v. NLRC,[6] which held the president of a corporation responsible and personally liable for payment of backwages, granted the private respondents motion and set it for hearing for reception of evidence of the relationship of the petitioner and her corespondents therein to COMMODEX. Private respondent then presented the Articles of Incorporation, List of Stockholders and the General Information Sheet of COMMODEX,[7] which showed that of the 2,000 shares of stocks of the corporation, Consuelo Valderrama owned 1,993[8] and that she was chairman of the board and president of respondent company.[9] On July 25, 1988, the Labor Arbiter declared petitioner Consuelo Valderrama liable for the payment of the monetary awards contained in the dispositive portion of the decision dated December 2, 1986,[10] thus: WHEREFORE, respondent Consuelo Valderrama, as Chairman of the Board and President of respondent COMMODEX (Phils.), Inc. who is originally impleaded is hereby deemed included as party respondent and she should, as she is hereby held liable for the awards to complainant Maria Andrea L. Saavedra. To obviate the further issuance of a Writ of Execution against her, she should, as she is hereby ordered to pay aforenamed complainant the monetary awards ordained in the Decision herein. SO ORDERED. Petitioner appealed to the NLRC. In a resolution dated February 26, 1991, the First Division of the NLRC affirmed the Labor Arbiters order and dismissed the appeal for lack of merit.[11] Hence, this petition. Petitioner alleges that: 1. The Decision dated 02 December 1986 has become final and executory, and, hence, can no longer be substantially amended as to include liability on the part of herein Petitioner, who was originally not named as liable in the dispositive portion of the said Decision; and 2. Petitioner cannot and should not be held personally liable jointly and severally with Commodex (Phils.), Inc. for the awards adjudged in favor of herein Private Respondent Saavedra. We find these contentions to be without merit. First. The rule that once a judgment becomes final it can no longer be disturbed, altered, or modified is not an inflexible one. It admits of exceptions, as where facts and circumstances transpire after a judgment has become final and executory which render its execution impossible or unjust. In such a case the modification of the decision may be sought by the interested party and the court will modify and alter the judgment to harmonize it with justice and the facts.[12] In the case at bar, modification of the judgment is appropriate considering that the company is no longer in operation and there is no showing that it has filed bankruptcy proceedings in which private respondent might file a claim and pursue her remedy under Article 110 of the Labor Code. Holding petitioner personally liable for the judgment in this case is eminently just and proper considering that, although the dispositive portion of the decision mentions only the respondent company, the text repeatedly mentions respondents in assessing liability for the illegal dismissal of private respondent. For indeed petitioner and others were respondents below and there can be

no doubt of their personal liability. The mere happenstance that only the company is mentioned should not, therefore, be allowed to obscure the fact that in the text of the decision petitioner and her corespondents below were found guilty of having illegally dismissed private respondent and of claiming that private respondents employment was terminated because of retrenchment, when the truth was that she was dismissed for pregnancy. Hence they should be held personally liable for private respondents reinstatement with backwages.[13] Indeed it is well said that to get the true intent and meaning of a decision, no specific portion thereof should be resorted to but same must be considered in its entirety (Escarella vs. Director of Lands, 83 Phil. 491; 46 Off. Gaz. No. 11 p. 5487; I Morans Comments on the Rules of Court, 1957 ed., p. 478).[14] Second. Not only is it clear by reference to the text of the decision of the Labor Arbiter that COMMODEX as well as its officers were being held liable so that no substantial amendment of the decision was really made by the Labor Arbiter in ordering petitioner to comply with that decision, but under the Labor Code, petitioner is herself considered an employer. In A. C. Ransom Labor Union-CCLU v. NLRC,[15] we held: (a) Article 265 of the Labor Code, in part, expressly provides: Any worker whose employment has been terminated as a consequence of an unlawful lockout shall be entitled to reinstatement with full backwages. Article 273 of the Code provides that: Any person violating any of the provisions of Article 265 of this Code shall be punished by a fine of not exceeding five hundred pesos and/or imprisonment for not less than one (1) day nor more than six (6) months. (b) How can the foregoing provisions be implemented when the employer is a corporation? The answer is found in Article 212 (c) of the Labor Code which provides: (c) Employer includes any person acting in the interest of an employer, directly or indirectly. The term shall not include any labor organization or any of its officers or agents except when acting as employer. The foregoing was culled from Section 2 of RA 602, the Minimum Wage Law. Since RANSOM is an artificial person, it must have an officer who can be presumed to be the employer, being the person acting in the interest of (the) employer RANSOM. The corporation, only in the technical sense, is the employer. The responsible officer of an employer corporation can be held personally, not to say even criminally, liable for the non-payment of back wages. That is the policy of the law. In the Minimum Wage Law, Section 15 (b) provided: (b) If any violation of this Act is committed by a corporation, trust, partnership or association, the manager or in his default, the person acting as such when the violation took place, shall be responsible. In the case of a government corporation, the managing head shall be made responsible, except when shown that the violation was due to an act or commission of some other person, over whom he has no control, in which case the latter shall be held responsible. In P.D. 525, where a corporation fails to pay the emergency allowance therein provided, the prescribed penalty shall be imposed upon the guilty officer or officers of the corporation. (c) If the policy of the law were otherwise, the corporation employer can have devious ways for evading payment of backwages. In the instant case, it would appear that RANSOM, in 1969, forseeing the possibility or probability of payment of backwages to the 22 strikers, organized ROSARIO to replace RANSOM, with the latter to be eventually phased out if the 22 strikers win their case. RANSOM actually ceased operations on May 1, 1973, after the December 19, 1972 Decision of the Court of Industrial Relations was promulgated against RANSOM.

(d) The record does not clearly identify the officer or officers of RANSOM directly responsible for failure to pay the back wages of the 22 strikers: In the absence of definite proof in that regard, we believe it should be presumed that the responsible officer is the President of the corporation who can be deemed the chief operation officer thereof. Thus, in R.A. 602, criminal responsibility is with the Manager or in his default, the person acting as such. In RANSOM, the President appears to be the Manager. (e) Considering that non-payment of the back wages of the 22 strikers has been a continuing situation, it is our opinion that the personal liability of the RANSOM President, at the time the back wages were ordered to be paid should also be a continuing joint and several personal liabilities of all who may have thereafter succeeded to the office of president; otherwise the 22 strikers may be deprived of their rights by the election of a president without leviable assets. Petitioner seeks to distinguish that case from the one at bar on the ground that the dispositive portion of the decision in that case actually ordered the officers and agents of A. C. Ransom to cease and desist from committing further acts of certain labor practice thus: IN VIEW OF ALL THE FOREGOING, . . . the A. C. Ransom Philippine Corporation is guilty of unfair labor practice of interference and discrimination hereinabove held and specified, ordering its officers and agents to cease and desist from committing the same, finding the strike legal and justified; and to reinstate immediately . . . to their respective positions with backwages from July 25, 1969 until actually reinstated, without loss of seniority rights and other privileges appurtenant to their employment.[16] A corporation can only act through its officers and agents. That is why the cease and desist order was directed to the officers and agents of A. C. Ransom, which was actually found guilty of unfair labor practice. But that case clearly also holds that any decision against the company can be enforced against the officers in their personal capacities should the corporation fail to satisfy the judgment against it. The quoted portion of that decision explaining the basis for such ruling makes that clear. Agreeably with the ruling in A. C. Ransom Labor Union-CCLU it was held in another case that where the Employer corporation is no longer existing and [is] unable to satisfy the judgment in favor of the employee, the officer should be held liable for acting on behalf of the corporation.[17] Similarly it was held in Carmeicraft Corp. v. NLRC:[18] We also find untenable the contention of Carmen Yulo that she is not liable for the acts of the petitioner company, assuming it had acted illegally, because the Carmelcraft Corporation is a distinct and separate entity with a legal personality of its own. Yulo claims she is only an agent of the company carrying out the decisions of its board of directors. We do not agree. Our finding is that she is in fact and legal effect the corporation, being not only its president and general manager but also its owner. In this case, the documents presented by the private respondent show that petitioner controlled the company owning 1,993 of its 2,000 shares, with the rest of the stockholders owning only nominal amounts. Third. Petitioner says the failure of private respondent to make a timely appeal bars her from enforcing the decision in her favor against her (petitioner) and the officers of the corporation because the decision of December 2, 1986 of the Labor Arbiter is now final and can no longer be amended. We have already explained that there was really no amendment of the decision but only a clarification. But even if appeal was required in order to correct the error, in the interest of substantial justice, especially in cases involving rights of workers, the procedural lapse in this case may be disregarded. As held in General Baptist Bible College v. NLRC:[19] Technicalities have no room in labor cases, where the Rules of Court are applicable only in order to effectuate the objectives of the Labor Code and not to defeat them. The pertinent provisions of the Revised Rules of Court of the Philippines and prevailing jurisprudence may be applied by analogy or in a suppletory character to effect an expeditious resolution of labor controversies in a practical and convenient manner.

We are inclined to overlook a procedural defect if only to promote substantial justice. General rules of procedure are merely suppletory in character vis-a-vis labor disputes which are primarily governed by labor laws.[20] Furthermore, as provided in Art. 4 of the Labor Code, all doubts in the implementation and interpretation of this code, including its implementing rules and regulations shall be rendered in favor of labor.[21] The rule that the NLRC may disregard technical rules of procedure in order to give life to the constitutional mandate for the protection of labor is well settled.[22] WHEREFORE, the petition is DISMISSED for lack of merit. SO ORDERED.