Republic of the Philippines

SUPREME COURT
Manila
EN BANC
G.R. No. L-2348 February 27, 1950
GREGORIO PERFECTO, plaintiff-appellee,
vs.
BIBIANO MEER, Collector of Internal Revenue, defendant-appellant.
First Assistant Solicitor General Roberto A. Gianzon and Solicitor Francisco Carreon for oppositor and appellant.
Gregorio Perfecto in his own behalf.
BENGZON, J.:
In April, 1947 the Collector of Internal Revenue required Mr. Justice Gregorio Perfecto to pay income tax upon his salary as member
of this Court during the year 1946. After paying the amount (P802), he instituted this action in the Manila Court of First Instance
contending that the assessment was illegal, his salary not being taxable for the reason that imposition of taxes thereon would
reduce it in violation of the Constitution.
The Manila judge upheld his contention, and required the refund of the amount collected. The defendant appealed.
The death of Mr. Justice Perfecto has freed us from the embarrassment of passing upon the claim of a colleague. Still, as the
outcome indirectly affects all the members of the Court, consideration of the matter is not without its vexing feature. Yet
adjudication may not be declined, because (a) we are not legally disqualified; (b) jurisdiction may not be renounced, ad it is the
defendant who appeals to this Court, and there is no other tribunal to which the controversy may be referred; (c) supreme courts in
the United States have decided similar disputes relating to themselves; (d) the question touches all the members of the judiciary
from top to bottom; and (e) the issue involves the right of other constitutional officers whose compensation is equally protected by
the Constitution, for instance, the President, the Auditor-General and the members of the Commission on Elections. Anyway the
subject has been thoroughly discussed in many American lawsuits and opinions, and we shall hardly do nothing more than to borrow
therefrom and to compare their conclusions to local conditions. There shall be little occasion to formulate new propositions, for the
situation is not unprecedented.
Our Constitution provides in its Article VIII, section 9, that the members of the Supreme Court and all judges of inferior courts "shall
receive such compensation as may be fixed by law, which shall not be diminished during their continuance in office." It also provides
that "until Congress shall provide otherwise, the Chief Justice of the Supreme Court shall receive an annual compensation of sixteen
thousand pesos". When in 1945 Mr. Justice Perfecto assumed office, Congress had not "provided otherwise", by fixing a different
salary for associate justices. He received salary at the rate provided by the Constitution, i.e., fifteen thousand pesos a year.
Now, does the imposition of an income tax upon this salary in 1946 amount to a diminution thereof?.
A note found at page 534 of volume 11 of the American Law Reports answers the question in the affirmative. It says:
Where the Constitution of a state provides that the salaries of its judicial officers shall not be dismissed during their continuance in
office, it had been held that the state legislature cannot impose a tax upon the compensation paid to the judges of its court. New
Orleans v. Lea (1859) 14 La. Ann. 194; Opinion of Attorney-General if N. C. (1856) 48 N. C. (3 Jones, L.) Appx. 1; Re Taxation of
Salaries of Judges (1902) 131 N. C. 692, 42 S. E. 970; Com. ex. rel. Hepburn v. Mann (1843) 5 Watts & S,. (Pa.) 403 [but see to the
contrary the earlier and much criticized case of Northumberland county v. Chapman (1829) 2 Rawle (Pa.) 73]
*

A different rule prevails in Wisconsin, according to the same annotation. Another state holding the contrary view is Missouri.
The Constitution of the United States, likes ours, forbids the diminution of the compensation of Judges of the Supreme Court and of
inferior courts. The Federal Governments has an income tax law. Does it embrace the salaries of federal judges? In answering this
question, we should consider four periods:
First period. No attempts was made to tax the compensation of Federal judges up to 1862
1
.
Second period. 1862-1918. In July, 1862, a statute was passed subjecting the salaries of "civil officers of the United States" to an
income tax of three per cent. Revenue officers, construed it as including the compensation of all judges; but Chief Justice Taney,
speaking for the judiciary, wrote to the Secretary of the Treasury a letter of protest saying, among other things:
The act in question, as you interpret it, diminishes the compensation of every judge 3 per cent, and if it can be diminished to that
extent by the name of a tax, it may, in the same way, be reduced from time to time, at the pleasure of the legislature.
The judiciary is one of the three great departments of the government, created and established by the Constitution. Its duties and
powers are specifically set forth, and are of a character that requires it to be perfectly independent of the two other departments,
and in order to place it beyond the reach and above even the suspicion of any such influence, the power to reduce their
compensation is expressly withheld from Congress, and excepted from their powers of legislation.
Language could not be more plain than that used in the Constitution. It is, moreover, one of its most important and essential
provisions. For the articles which limits the powers of the legislative and executive branches of the government, and those which
provide safeguards for the protection of the citizen in his person and property, would be of little value without a judiciary to uphold
and maintain them, which was free from every influence, direct and indirect, that might by possibility in times of political excitement
warp their judgments.
Upon these grounds I regard an act of Congress retaining in the Treasury a portion of the Compensation of the judges, as
unconstitutional and void
2
.
The protest was unheeded, although it apparently bore the approval of the whole Supreme Court, that ordered it printed among its
records. But in 1869 Attorney-General Hoar upon the request of the Secretary of the Treasury rendered an opinion agreeing with the
Chief Justice. The collection of the tax was consequently discontinued and the amounts theretofore received were all refunded. For
half a century thereafter judges' salaries were not taxed as income.
3

Third period. 1919-1938. The Federal Income Tax Act of February 24, 1919 expressly provided that taxable income shall include "the
compensation of the judges of the Supreme Court and inferior courts of the United States". Under such Act, Walter Evans, United
States judge since 1899, paid income tax on his salary; and maintaining that the impost reduced his compensation, he sued to
recover the money he had delivered under protest. He was upheld in 1920 by the Supreme Court in an epoch-making decision.
*
,
explaining the purpose, history and meaning of the Constitutional provision forbidding impairment of judicial salaries and the effect
of an income tax upon the salary of a judge.
With what purpose does the Constitution provide that the compensation of the judges "shall not be diminished during their
continuance in office"? Is it primarily to benefit the judges, or rather to promote the public weal by giving them that independence
which makes for an impartial and courageous discharge of the judicial function? Does the provision merely forbid direct diminution,
such as expressly reducing the compensation from a greater to a less sum per year, and thereby leave the way open for indirect, yet
effective, diminution, such as withholding or calling back a part as tax on the whole? Or does it mean that the judge shall have a sure
and continuing right to the compensation, whereon he confidently may rely for his support during his continuance in office, so that
he need have no apprehension lest his situation in this regard may be changed to his disadvantage?
The Constitution was framed on the fundamental theory that a larger measure of liberty and justice would be assured by vesting the
three powers the legislative, the executive, and the judicial in separate departments, each relatively independent of the others
and it was recognized that without this independence if it was not made both real and enduring the separation would fail of its
purpose. all agreed that restraints and checks must be imposed to secure the requisite measure of independence; for otherwise the
legislative department, inherently the strongest, might encroach on or even come to dominate the others, and the judicial, naturally
the weakest, might be dwarf or swayed by the other two, especially by the legislative.
The particular need for making the judiciary independent was elaborately pointed our by Alexander Hamilton in the Federalist, No.
78, from which we excerpt the following:
x x x x x x x x x
At a later period John Marshall, whose rich experience as lawyer, legislator, and chief justice enable him to speak as no one else
could, tersely said (debates Va. Gonv. 1829-1831, pp. 616, 619): . . . Our courts are the balance wheel of our whole constitutional
system; and our is the only constitutional system so balanced and controlled. Other constitutional systems lacks complete poise and
certainly of operation because they lack the support and interpretation of authoritative, undisputable courts of law. It is clear
beyond all need of exposition that for the definite maintenance of constitutional understandings it is indispensable, alike for the
preservation of the liberty of the individual and for the preservation of the integrity of the powers of the government, that there
should be some nonpolitical forum in which those understandings can be impartially debated and determined. That forum our
courts supply. There the individual may assert his rights; there the government must accept definition of its authority. There the
individual may challenge the legality of governmental action and have it adjudged by the test of fundamental principles, and that
test the government must abide; there the government can check the too aggressive self-assertion of the individual and establish its
power upon lines which all can comprehend and heed. The constitutional powers of the courts constitute the ultimate safeguard
alike of individual privilege and of governmental prerogative. It is in this sense that our judiciary is the balance wheel of our entire
system; it is meant to maintain that nice adjustment between individual rights and governmental powers which constitutes political
liberty. Constitutional government in the United States, pp. 17, 142.
Conscious in the nature and scope of the power being vested in the national courts, recognizing that they would be charge with
responsibilities more delicate and important than any ever before confide to judicial tribunals, and appreciating that they were to
be, in the words of George Washington, "the keystone of our political fabric", the convention with unusual accord incorporated in
the Constitution the provision that the judges "shall hold their offices during good behavior, and shall at stated times receive for
their services a compensation which shall not be diminished during their continuance in office." Can there be any doubt that the two
things thus coupled in place the clause in respect of tenure during good behaviour and that in respect of an undiminishable
compensation-were equally coupled in purpose? And is it not plain that their purposes was to invest the judges with an
independence in keeping with the delicacy and importance of their task, and with the imperative need for its impartial and fearless
performance? Mr. Hamilton said in explanation and support of the provision (Federalist No. 79): "Next to permanency in office,
nothing can contribute more to the independence of the judges than a fixed provision for their support. . . . In the general course of
human nature, a power over a man's subsistence amounts to a power over his will.
x x x x x x x x x
These considerations make it very plain, as we think, that 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 admiration of justice without respect to persons, and with equal concern for the poor and the rich.
x x x x x x x x x
But it is urged that what plaintiff was made to pay back was an income tax, and that a like tax was exacted of others engaged in
private employment.
If the tax in respect of his compensation be prohibited, it can find no justification in the taxation of other income as to which there is
no prohibition, for, of course, doing what the Constitution permits gives no license to do what it prohibits.
The prohibition is general, contains no excepting words, and appears to be directed against all diminution, whether for one purpose
or another; and the reason for its adoption, as publicly assigned at the time and commonly accepted ever since, make with impelling
force for the conclusion that the fathers of the Constitution intended to prohibit diminution by taxation as well as otherwise, that
they regarded the independence of the judges as of far greater importance than any revenue that could come from taxing their
salaries. (American law Reports, annotated, Vol. 11, pp. 522-25; Evans vs. Gore, supra.)
In September 1, 1919, Samuel J. Graham assumed office as judge of the Unites States court of claims. His salary was taxed by virtue
of the same time income tax of February 24, 1919. At the time he qualified, a statute fixed his salary at P7,500. He filed action for
reimbursement, submitting the same theory on which Evans v. Gore had been decided. The Supreme Court of the United States in
1925 reaffirmed that decision. It overruled the distinction offered by Solicitor-General Beck that Judge Graham took office after the
income tax had been levied on judicial salaries, (Evans qualified before), and that Congress had power "to impose taxes which should
apply to the salaries of Federal judges appointed after the enactment of the taxing statute." (The law had made no distinction as to
judges appointed before or after its passage)
Fourth period. 1939 Foiled in their previous attempts, the Revenue men persisted, and succeeded in inserting in the United States
Revenue Act of June, 1932 the modified proviso that "gross income" on which taxes were payable included the compensation "of
judges of courts of the United States taking office after June 6, 1932". Joseph W. Woodrough qualified as United States circuit judge
on May 1, 1933. His salary as judge was taxed, and before the Supreme Court of the United States the issue of decrease of
remuneration again came up. That court, however, ruled against him, declaring (in 1939) that Congress had the power to adopt the
law. It said:
The question immediately before us is whether Congress exceeded its constitutional power in providing that United States judges
appointed after the Revenue Act of 1932 shall not enjoy immunity from the incidence of taxation to which everyone else within the
defined classes of income is subjected. Thereby, of course, Congress has committed itself to the position that a non-discriminatory
tax laid generally on net income is not, when applied to the income of federal judge, a diminution of his salary within the prohibition
of Article 3, Sec. 1 of the Constitution. To suggest that it makes inroads upon the independence of judges who took office after the
Congress has thus charged them with the common duties of citizenship, by making them bear their aliquot share of the cost of
maintaining the Government, is to trivialize the great historic experience on which the framers based the safeguards of Article 3,
Sec. 1. To subject them to a general tax is merely to recognize that judges also are citizens, and that their particular function in
government does not generate an immunity from sharing with their fellow citizens the material burden of the government whose
Constitution and laws they are charged with administering. (O'Malley vs. Woodrough, 59 S. Ct. 838, A. L. R. 1379.)
Now, the case for the defendant-appellant Collector of Internal Revenue is premised mainly on this decision (Note A). He claims it
holds "that federal judges are subject to the payment of income taxes without violating the constitutional prohibition against the
reduction of their salaries during their continuance in office", and that it "is a complete repudiation of the ratio decidenci of Evans
vs. Gore". To grasp the full import of the O'Malley precedent, we should bear in mind that:
1. It does not entirely overturn Miles vs. Graham. "To the extent that what the Court now says is inconsistent with what said in Miles
vs. Graham, the latter can not survive", Justice Frankfurter announced.
2. It does not expressly touch nor amend the doctrine in Evans vs, Gore, although it indicates that the Congressional Act in dispute
avoided in part the consequences of that case.
Carefully analyzing the three cases (Evans, Miles and O'Malley) and piecing them together, the logical conclusion may be reached
that although Congress may validly declare by law that salaries of judges appointed thereaftershall be taxed as income (O'Malley vs.
Woodrough) it may not tax the salaries of those judges already in office at the time of such declaration because such taxation would
diminish their salaries (Evans vs. Gore; Miles vs. Graham). In this manner the rationalizing principle that will harmonize the allegedly
discordant decision may be condensed.
By the way, Justice Frankfurter, writing the O'Malley decision, says the Evans precedent met with disfavor from legal scholarship
opinion. Examining the issues of Harvard Law review at the time of Evans vs. Gore (Frankfurter is a Harvard graduate and professor),
we found that such school publication criticized it. Believing this to be the "inarticulate consideration that may have influenced the
grounds on which the case went off"
4
, we looked into the criticism, and discovered that it was predicated on the position that the
16th Amendment empowered Congress "to collect taxes on incomes from whatever source derived" admitting of no exception. Said
the Harvard Law Journal:
In the recent case of Evans vs. Gore the Supreme Court of the United States decided that by taxing the salary of a federal judge as a
part of his income, Congress was in effect reducing his salary and thus violating Art. III, sec. 1, of the Constitution. Admitting for the
present purpose that such a tax really is a reduction of salary, even so it would seem that the words of the amendment giving power
to tax 'incomes, from whatever source derived', are sufficiently strong to overrule pro tanto the provisions of Art. III, sec. 1. But, two
years ago, the court had already suggested that the amendment in no way extended the subjects open to federal taxation. The
decision in Evans vs. Gore affirms that view, and virtually strikes from the amendment the words "from whatever source derived".
(Harvard law Review, vol. 34, p. 70)
The Unites States Court's shift of position
5
might be attributed to the above detraction which, without appearing on the surface, led
to Frankfurter's sweeping expression about judges being also citizens liable to income tax. But it must be remembered that
undisclosed factor the 16th Amendment has no counterpart in the Philippine legal system. Our Constitution does not repeat it.
Wherefore, as the underlying influence and the unuttered reason has no validity in this jurisdiction, the broad generality loses much
of its force.
Anyhow the O'Malley case declares no more than that Congress may validly enact a law taxing the salaries of judges appointed after
its passage. Here in the Philippines no such law has been approved.
Besides, it is markworthy that, as Judge Woodrough had qualified after the express legislative declaration taxing salaries, he could
not very well complain. The United States Supreme Court probably had in mind what in other cases was maintained, namely, that
the tax levied on the salary in effect decreased the emoluments of the office and therefore the judge qualified with such reduced
emoluments.
6

The O'Malley ruling does not cover the situation in which judges already in office are made to pay tax by executive interpretation,
without express legislative declaration. That state of affairs is controlled by the administrative and judicial standards herein-before
described in the "second period" of the Federal Government, namely, the views of Chief Justice Taney and of Attorney-General Hoar
and the constant practice from 1869 to 1938, i.e., when the Income Tax Law merely taxes "income" in general, it does not include
salaries of judges protected from diminution.
In this connection the respondent would make capital of the circumstance that the Act of 1932, upheld in the O'Malley case, has
subsequently been amended by making it applicable even to judges who took office before1932. This shows, the appellant argues,
that Congress interprets the O'Malley ruling to permit legislative taxation of the salary of judges whether appointed before the tax
or after. The answer to this is that the Federal Supreme Court expressly withheld opinion on that amendment in the O'Malley case.
Which is significant. Anyway, and again, there is here no congressional directive taxing judges' salaries.
Wherefore, unless and until our Legislature approves an amendment to the Income Tax Law expressly taxing "that salaries of judges
thereafter appointed", the O'Malley case is not relevant. As in the United States during the second period, we must hold that
salaries of judges are not included in the word "income" taxed by the Income Tax Law. Two paramount circumstances may
additionally be indicated, to wit: First, when the Income Tax Law was first applied to the Philippines 1913, taxable "income" did not
include salaries of judicial officers when these are protected from diminution. That was the prevailing official belief in the United
States, which must be deemed to have been transplanted here;
7
and second, when the Philippine Constitutional Convention
approved (in 1935) the prohibition against diminution off the judges' compensation, the Federal principle was known that income
tax on judicial salaries really impairs them. Evans vs. Gore and Miles vs. Graham were then outstanding doctrines; and the inference
is not illogical that in restraining the impairment of judicial compensation the Fathers of the Constitution intended to preclude
taxation of the same.
8

It seems that prior to the O'Malley decision the Philippine Government did not collect income tax on salaries of judges. This may be
gleaned from General Circular No. 449 of the Department of Finance dated March 4, 1940, which says in part:
x x x x x x x x x
The question of whether or not the salaries of judges should be taken into account in computing additional residence taxes is closely
linked with the liability of judges to income tax on their salaries, in fact, whatever resolution is adopted with respect to either of said
taxes be followed with respect to the other. The opinion of the Supreme Court of the United States in the case of O'Malley v.
Woodrough, 59 S. Ct. 838, to which the attention of this department has been drawn, appears to have enunciated a new doctrine
regarding the liability of judges to income tax upon their salaries. In view of the fact that the question is of great significance, the
matter was taken up in the Council of State, and the Honorable, the Secretary of Justice was requested to give an opinion on
whether or not, having in mind the said decision of the Supreme Court of the United States in the case of O'Malley v. Woodrough,
there is justification in reversing our present ruling to the effect that judges are not liable to tax on their salaries. After going over the
opinion of the court in the said case, the Honorable, the Secretary of Justice, stated that although the ruling of the Supreme Court of
the United States is not binding in the Philippines, the doctrine therein enunciated has resolved the issue of the taxability of judges'
salaries into a question of policy. Forthwith, His Excellency the President decided that the best policy to adopt would be to collect
income and additional residence taxes from the President of the Philippines, the members of the Judiciary, and the Auditor General,
and the undersigned was authorized to act accordingly.
In view of the foregoing, income and additional residence taxes should be levied on the salaries received by the President of the
Philippines, members of the Judiciary, and the Auditor General during the calendar year 1939 and thereafter. . . . . (Emphasis ours.)
Of course, the Secretary of Justice correctly opined that the O'Malley decision "resolved the issue of taxability of judges' salaries into
a question of policy." But that policy must be enunciated by Congressional enactment, as was done in the O'Malley case, not by
Executive Fiat or interpretation.
This is not proclaiming a general tax immunity for men on the bench. These pay taxes. Upon buying gasoline, or other commodities,
they pay the corresponding duties. Owning real property, they pay taxes thereon. And on incomes other than their judicial salary,
assessments are levied. It is only when the tax is charged directly on their salary and the effect of the tax is to diminish their official
stipend that the taxation must be resisted as an infringement of the fundamental charter.
Judges would indeed be hapless guardians of the Constitution if they did not perceive and block encroachments upon their
prerogatives in whatever form. The undiminishable character of judicial salaries is not a mere privilege of judges personal and
therefore waivable but a basic limitation upon legislative or executive action imposed in the public interest. (Evans vs. Gore)
Indeed the exemption of the judicial salary from reduction by taxation is not really a gratuity or privilege. Let the highest court of
Maryland speak:
The exemption of the judicial compensation from reduction is not in any true sense a gratuity, privilege or exemption. It is essentially
and primarily compensation based upon valuable consideration. The covenant on the part of the government is a guaranty whose
fulfillment is as much as part of the consideration agreed as is the money salary. The undertaking has its own particular value to the
citizens in securing the independence of the judiciary in crises; and in the establishment of the compensation upon a permanent
foundation whereby judicial preferment may be prudently accepted by those who are qualified by talent, knowledge, integrity and
capacity, but are not possessed of such a private fortune as to make an assured salary an object of personal concern. On the other
hand, the members of the judiciary relinquish their position at the bar, with all its professional emoluments, sever their connection
with their clients, and dedicate themselves exclusively to the discharge of the onerous duties of their high office. So, it i s irrefutable
that they guaranty against a reduction of salary by the imposition of a tax is not an exemption from taxation in the sense of freedom
from a burden or service to which others are liable. The exemption for a public purpose or a valid consideration is merely a nominal
exemption, since the valid and full consideration or the public purpose promoted is received in the place of the tax. Theory and
Practice of Taxation (1900), D. A. Wells, p. 541. (Gordy vs. Dennis (Md.) 1939, 5 Atl. Rep. 2d Series, p. 80)
It is hard to see, appellants asserts, how the imposition of the income tax may imperil the independence of the judicial department.
The danger may be demonstrated. Suppose there is power to tax the salary of judges, and the judiciary incurs the displeasure of the
Legislature and the Executive. In retaliation the income tax law is amended so as to levy a 30 per cent on all salaries of government
officials on the level of judges. This naturally reduces the salary of the judges by 30 per cent, but they may not grumble because the
tax is general on all receiving the same amount of earning, and affects the Executive and the Legislative branches in equal measure.
However, means are provided thereafter in other laws, for the increase of salaries of the Executive and the Legislative branches, or
their perquisites such as allowances, per diems, quarters, etc. that actually compensate for the 30 per cent reduction on their
salaries. Result: Judges compensation is thereby diminished during their incumbency thanks to the income tax law. Consequence:
Judges must "toe the line" or else. Second consequence: Some few judges might falter; the great majority will not. But knowing the
frailty of human nature, and this chink in the judicial armor, will the parties losing their cases against the Executive or the Congress
believe that the judicature has not yielded to their pressure?
Respondent asserts in argumentation that by executive order the President has subjected his salary to the income tax law. In our
opinion this shows obviously that, without such voluntary act of the President, his salary would not be taxable, because of
constitutional protection against diminution. To argue from this executive gesture that the judiciary could, and should act in like
manner is to assume that, in the matter of compensation and power and need of security, the judiciary is on a par with the
Executive. Such assumption certainly ignores the prevailing state of affairs.
The judgment will be affirmed. So ordered.
Moran, C.J., Pablo, Padilla, Tuason, Montemayor, Reyes and Torres, JJ., concur.


Separate Opinions
OZAETA., J., dissenting:
It is indeed embarrassing that this case was initiated by a member of this Court upon which devolves the duty to decide it finally. The
question of whether the salaries of the judges, the members of the Commission on Elections, the Auditor General, and the President
of the Philippines are immune from taxation, might have been raised by any interested party other than a justice of the Supreme
Court with less embarrassment to the latter.
The question is simple and not difficult of solution. We shall state our opinion as concisely as possible.
The first income tax law of the Philippines was Act No. 2833, which was approved on March 7, 1919, to take effect on January 1,
1920. Section 1 (a) of said Act provided:
There shall be levied, assessed, collected, and paid annually upon the entire net income received in the preceding calendar year
from all sources by every individual, a citizen or resident of the Philippine Islands, a tax of two per centum upon such income. . . .
(Emphasis ours.)
Section 2 (a) of said Act provided:
Subject only to such exemptions and deductions as are hereinafter allowed, the taxable net income of a person shall include gains,
profits, and income derived from salaries, wages or compensation for personal service of whatever kind and is whatever form paid,
or from professions, vocations, businesses, trade, commerce, sales, or dealings in property, whether real or personal, growing out of
the ownership or use of or interest in real or personal property, also from interest, rent, dividends, securities, or the transaction of
any business carried on for gain or profit, or gains, profits, and income derived from any source whatever.
That income tax law has been amended several times, specially as to the rates of the tax, but the above-quoted provisions (except as
to the rate) have been preserved intact in the subsequent Acts. The present income tax law is Title II of the National Internal
Revenue Code, Commonwealth Act No. 466, sections 21, 28 and 29 of which incorporate the texts of the above-quoted provisions of
the original Act in exactly the same language. There can be no dispute whatsoever that judges (who are individuals) and their
salaries (which are income) are as clearly comprehended within the above-quoted provisions of the law as if they were specifically
mentioned therein; and in fact all judges had been and were paying income tax on their salaries when the Constitution of the
Philippines was discussed and approved by the Constitutional Convention and when it was submitted to the people for confirmation
in the plebiscite of May 14, 1935.
Now, the Constitution provides that the members of the Supreme Court and all judges of inferior courts "shall receive such
compensation as may be fixed by law, which shall not be diminished during their continuance in office." (Section 9, Article VIII,
emphasis ours.)
a

The simple question is: In approving the provisions against the diminution of the compensation of judges and other specified officers
during their continuance in office, did the framers of the Constitution intend to nullify the then existing income tax law insofar as it
imposed a tax on the salaries of said officers ? If they did not, then the income tax law, which has been incorporated in the present
National Internal Revenue Code, remains in force in its entirety and said officers cannot claim exemption therefrom on their salaries.
Section 2 of Article XVI of the Constitution provides that all laws of the Philippine Islands shall remain operative, unless inconsistent
with this Constitution, until amended, altered, modified. or repealed by the Congress of the Philippines.
In resolving the question at bar, we must take into consideration the following well-settled rules:
"A constitution shall be held to be prepared and adopted in reference to existing statutory laws, upon the provisions of which in
detail it must depend to be set in practical operation" (People vs. Potter, 47 N. Y. 375; People vs. Draper, 15 N. Y. 537; Cass vs. Dillon,
2 Ohio St. 607; People vs. N. Y., 25 Wend. (N. Y. 22). (Barry vs. Traux, 3 A. & E. Ann. Cas 191, 193.).
Courts are bound to presume that the people adopting a constitution are familiar with the previous and existing laws upon the
subjects to which its provisions relate, and upon which they express their judgment and opinion in its adoption (Baltimore vs. State,
15 Md. 376, 480; 74 Am. Dec. 572; State vs. Mace, 5 Md. 337; Bandel vs. Isaac, 13 Md. 202; Manly vs. State, 7 Md. 135; Hamilton vs.
St. Louis County Ct., 15 Mo. 5; People vs. Gies, 25 Mich. 83; Servis vs. Beatty, 32 Miss. 52; Pope vs. Phifer, 3 Heisk. (Tenn.) 686;
People vs. Harding, 53 Mich. 48, 51 Am. Rep. 95; Creve Coeur Lake Ice Co. vs. Tamm, 138 Mo. 385, 39 S. W. Rep. 791). (Idem.)
A constitutional provision must be presumed to have been framed and adopted in the light and understanding of prior and existing
laws and with reference to them. Constitutions, like statutes, are properly to be expounded in the light of conditions existing at the
time of their adoption, the general spirit of the times, and the prevailing sentiments among the people. Reference may be made to
the historical facts relating to the original or political institutions of the community or to prior well-known practices and usages. (11
Am. Ju., Constitutional Law, 676-678.)
The salaries provided in the Constitution for the Chief Justice and each associate Justice, respectively, of the Supreme Court were
the same salaries ]which they were receiving at the time the Constitution was framed and adopted and on which they were paying
income tax under the existing income tax law. It seems clear to us that for them to receive the same salaries, subject to the same
tax, after the adoption of the Constitution as before does not involve any diminution at all. The fact that the plaintiff was not a
member of the Court when the Constitution took effect, makes no difference. The salaries of justices and judges were subject to
income tax when he was appointed in the early part of 1945. In fact he must have declared and paid income tax on his salary for
19454 he claimed exemption only beginning 1946. It seems likewise clear that when the framers of the Constitution fixed those
salaries, they must have taken into consideration that the recipients were paying income tax thereon. There was no necessity to
provide expressly that said salaries shall be subject to income tax because they knew that already so provided. On the other hand, if
exemption from any tax on said salaries had been intended, it would have been specifically to so provide, instead of merely saying
that the compensation as fixed "shall not be diminished during their continuance in office."
In the light of the antecedents, the prohibition against diminution cannot be interpreted to include or refer to general taxation but
to a law by which said salaries may be fixed. The sentence in question reads: "They shall receive such compensation as may be fixed
by law, which shall not be diminished during their continuance in office." The next sentence reads: "Until the Congress shall provide
otherwise, the Chief Justice of the Supreme Court shall receive an annual compensation of P16,000, and each associate Justice,
P15,000." It is plain that the Constitution authorizes the Congress to pass a law fixing another rate of compensation, but that such
rate must be higher than that which the justices receive at he time of its enactment or, if lower, it must not affect those justice
already in office. In other words, Congress may approve a law increasing the salaries of the justices at any time, but it cannot
approve a law decreasing their salaries unless such law is made effective only as to justices appointed after its approval.
It would be a strained and unreasonable construction of the prohibition against diminution to read into it an exemption from
taxation. There is no justification for the belief or assumption that the framers of the Constitution intended to exempt the salaries of
said officers from taxes. They knew that it was and is the unavoidable duty of every citizen to bear his aliquot share of the cost of
maintaining the Government; that taxes are the very blood that sustains the life of the Government. To make all citizens share the
burden of taxation equitably, the Constitution expressly provides that "the rule of taxation shall be uniform." (Section 22 [1], Article
VI.) We think it would be a contravention of this provision to read into the prohibition against diminution of the salaries of the
judges and other specified officers an exemption from taxes on their salaries. How could the rule of income taxation be uniform if it
should not be applied to a group of citizens in the same situation as other income earners ? It is to us inconceivable that the framers
ever intended to relieve certain officers of the Government from sharing with their fellows citizens the material burden of the
Government to exempt their salaries from taxes. Moreover, the Constitution itself specifies what properties are exempt from
taxes, namely: "Cemeteries, churches, and parsonages or convents appurtenant thereto, and all lands, buildings, and improvements
used exclusively for religious, charitable, or educational purposes." (Sec. 22 [3], Article VI.) The omission of the salaries in question
from this enumeration is in itself an eloquent manifestation of intention to continue the imposition of taxes thereon as provided in
the existing law. Inclusio est exclusio alterius.
We have thus far read and construed the pertinent portions of our own Constitution and income tax law in the light of the
antecedent circumstances and of the operative factors which prevailed at the time our Constitution was framed, independently of
the construction now prevailing in the United States of similar provisions of the federal Constitution in relation to the present
federal income tax law, under which the justices of the Supreme Court, and the federal judges are now, and since the case
of O'Malley vs. Woodrough was decided on May 22, 1939, have been, paying income tax on their salaries. Were this a majority
opinion, we could end here with the consequent reversal of the judgment appealed from. But ours is a voice in the wilderness, and
we may permit ourselves to utter it with more vehemence and emphasis so that future players on this stage perchance may hear
and heed it. Who knows? The Gospel itself was a voice in the wilderness at the time it was uttered.
We have to comment on Anglo-American precedents since the majority decision from which we dissent is based on some of them.
Indeed, the majority say they "hardly do nothing more than to borrow therefrom and to compare their conclusions to local
conditions." which we shall presently show did not obtain in the United States at the time the federal and state Constitutions were
adopted. We shall further show that in any event what they now borrow is not usable because it has long been withdrawn from
circulation.
When the American Constitution was framed and adopted, there was no income tax law in the United States. To this circumstance
may be attributed the claim made by some federal judges headed by Chief Justice Taney, when under the Act of Congress of July 1,
1862, their salaries were subjected to an income tax, that such tax was a diminution of their salaries and therefore prohibited by the
Constitution. Chief Justice Taney's claim and his protest against the tax were not heeded, but no federal judge deemed it proper to
sue the Collector of Internal Revenue to recover the taxes they continued to pay under protest for several years. In 1869, the
Secretary of the Treasury referred the question to Atty. General Hoar, and that officer rendered an opinion in substantial accord
with Chief Justice Taney's protest, and also advised that the tax on the President's compensation was likewise invalid. No judicial
pronouncement, however, was made of such invalidity until June 1, 1920, when the case of Evans vs. Gore(253 U.S. 245, 64 L. ed.
887) was decided upon the constitutionality of section 213 of the Act of February 24, 1919, which required the computation of
incomes for the purpose of taxation to embrace all gains, profits, income and the like, "including in the case of the President of the
United States, the judges of the Supreme and inferior courts of the United States, [and others] . . . the compensation received as
such." The Supreme Court of the United States, speaking through Mr. Justice Van Devanter, sustained the suit with the dissent of
Justice Holmes and Brandeis. The doctrine of Evans vs. Gore holding in effect that an income tax on a judge's salary is a diminution
thereof prohibited by the Constitution, was reaffirmed in 1925 in Miles vs. Graham, 69 L. ed 1067.
In 1939, however, the case of O'Malley vs. Woodrough (59 S. Ct. 838, 122 A. L. R. 1379) was brought up to the test the validity of
section 22 of the Revenue Act of June 6, 1932, which included in the "gross income," on the basis of which taxes were to be paid, the
compensation of "judges of courts of the United States taking office after June 6, 1932." And in that case the Supreme Court of the
United States, with only one dissent (that of Justice Butler), abandoned the doctrine of Evans vs. Gore and Miles vs. Graham by
holding:
To subject them [the judges] to a general tax is merely to recognize that judges are also citizens, and that their particular function in
government does not generate an immunity from sharing with their fellow citizens the material burden of the government whose
Constitution and laws they are charged with administering.
The decision also says:
To suggest that it [the law in question] makes inroads upon the independence of judges who took office after Congress had thus
charged them with the common duties of citizenship, by making them bear their aliquot share of the cost of maintaining the
Government, is to trivialize the great historic experience on which the framers based the safeguard of Article 3, section 1.
Commenting on the above-quoted portions of the latest decision of the Supreme Court of the United States on the subject, Prof.
William Bennett, Munro, in his book, The Government of the United States, which is used as a text in various universities, says: ". . .
All of which seems to be common sense, for surely the framers of the Constitution from ever cutting a judge's salary, did not intend
to relieve all federal judges from the general obligations of citizenship. As for the President, he has never raised the issue; every
occupant of the White House since 1913 has paid his income tax without protest. (Pages 371-372.)
We emphasize that the doctrine of Evans vs. Gore and Miles vs. Graham is no longer operative, and that all United States judges,
including those who took office before June 6, 1932, are subject to and pay income tax on their salaries; for after the submission of
O'Malley vs. Woodrough for decision the Congress of the United States, by section 3 of the Public Salary Act of 1939, amended
section 22 (a) of the Revenue Act of June 6, 1932, so as to make it applicable to "judges of courts of the United States who took
office on or before June 6, 1932." And the validity of that Act, in force for more than a decade, has not been challenged.
Our colleagues import and transplant here the dead limbs of Evans vs. Gore and Miles vs. Graham and attempt to revive and nurture
them with painstaking analyses and diagnoses that they had not suffered a fatal blow fromO'Malley vs. Woodrough. We refuse to
join this heroic attempt because we believe it is futile.
They disregard the actual damage and minimize it by trying to discover the process by which it was inflicted and he motivations that
led to the infliction. They say that the chief axe-wielder, Justice Frankfurter, was a Harvard graduate and professor and that the
Harvard Law Journal had criticized Evans vs. Gore; that the dissenters in said case (Holmes and Brandeis) were Harvard men like
Frankfurter; and that they believe this to be the "inarticulate consideration that may have influenced the grounds on which the case
[O'Malley vs. Woodrough] went off." This argument is not valid, in our humble belief. It was not only the Harvard Law Journal that
had criticized Evans vs. Gore. Justice Frankfurter and his colleagues said that the decision in that case "met with wide and steadily
growing disfavor from legal scholarship and professional opinion," and they cited the following: Clark, Furthermore Limitations Upon
Federal Income Taxation, 30 Yale L. J. 75; Corwin, Constitutional Law in 1919-1920, 15 Am. Pol. Sci. Rev. 635, 641-644;
Fellman, Diminution of Judicial Salaries, 24 Iowa L. Rev. 89; Lowndes, Taxing Income of Federal Judiciary, 19 Va. L. Rev. 153;
Powell, Constitutional Law in 1919-1920, 19 Mich. L. Rev. 117, 118; Powell,The Sixteenth Amendment and Income from State
Securities, National Income Tax Magazine (July, 1923), 5, 6; 20 Columbia L. Rev. 794; 43 Harvard L. Rev. 318; 20 Ill. L. Rev. 376; 45
Law Quarterly Rev. 291; 7 Va. L. Rev. 69; 3 University of Chicago L. Rev. 141. Justice Frankfurter and his colleagues also said that
"Evans vs. Gore itself was rejected by most of the courts before whom the matter came after that decision." Is not the intention to
throw Evans vs. Gore into the graveyard of abandoned cases manifest from all this and from the holding that judges are also citizens,
liable to income tax on their salaries?
The majority say that "unless and until our legislature approves an amendment to the income tax law expressly taxing 'the salaries of
judges thereafter appointed,' the O'Malley case is not relevant." We have shown that our income tax law taxes the salaries of judges
as clearly as if they are specifically mentioned therein, and that said law took effect long before the adoption of the Constitution and
long before the plaintiff was appointed.
We agree that the purpose of the constitutional provision against diminution of the salaries of judges during their continuance in
office is to safeguard the independence of the Judicial Department. But we disagree that to subject the salaries of judges to a
general income tax law applicable to all income earners would in any way affect their independence. Our own experience since the
income tax law went effect in 1920 is the best refutation of such assumption.
The majority give an example by which the independence of judges may be imperiled thru the imposition of a tax on their salaries.
They say: Suppose there is power to tax the salaries of judges and the judiciary incurs the displeasure of the Legislature and the
Executive. In retaliation the income tax law is amended so as to levy a 30 per cent tax on all salaries of government officials on the
level of judges, and by means of another law the salaries of the executive and the legislative branches are increased to compensate
for the 30 per cent reduction of their salaries. To this we reply that if such a vindictive measure is ever resorted to (which we cannot
imagine), we shall be the first ones to vote to strike it down as a palpable violation of the Constitution. There is no parity between
such hypothetical law and the general income tax law invoked by the defendant in this case. We believe that an income tax law
applicable only against the salaries of judges and not against those or all other income earners may be successfully assailed as being
in contravention not only of the provision against diminution of the salaries of judges but also of the uniformity of the rule of
taxation as well as of the equal protection clause of the Constitution. So the danger apprehended by the majority is not real but
surely imaginary.
We vote for the reversal of the judgment appealed from the dismissal of plaintiff's complaint.
Paras J., concurs.
=========================================

Republic of the Philippines
SUPREME COURT
Manila
EN BANC
G.R. No. L-6355-56 August 31, 1953
PASTOR M. ENDENCIA and FERNANDO JUGO, plaintiffs-appellees,
vs.
SATURNINO DAVID, as Collector of Internal Revenue, defendant-appellant.
Office of the Solicitor General Juan R. Liwag and Solicitor Jose P. Alejandro for appellant.
Manuel O. Chan for appellees.
MONTEMAYOR, J.:
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 wel l-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.
Pablo, Bengzon, Padilla, Tuason, Reyes, and Labrador, JJ., concur.


Separate Opinions
BAUTISTA ANGELO, J., concurring:
Without expressing any opinion on the doctrine laid down by this Court in the case of Perfecto vs. Meer, G. R. No. L-2314, in view of
the part I had in that case as former Solicitor General, I wish however to state that I concur in the opinion of the majority to the
effect that section 13, Republic Act No. 590, in so far as it provides that taxing of the salary of a judicial officer shall be considered
"not to be a diminution of his compensation fixed by the Constitution or by law", constitutes an invasion of the province and
jurisdiction of the judiciary. In this sense, I am of the opinion that said section is null and void, it being a transgression of the
fundamental principle underlying the separation of powers.


PARAS, C.J., concurring and dissenting:
I dissent for the same reasons stated in the dissenting opinion of Mr. Justice Ozaeta in Perfecto vs. Meer, 85 Phil., 552, in which I
concurred. But I disagree with the majority in ruling that no legislation may provide that it be held valid although against a provision
of the Constitution.
FACTS:
Saturnino David was the Internal Revenue Collector who ordered Judges Endencio and Jugos salaries. A case was filed. However,
upon construing Article VIII Section 9 of the constitution, it shows that judicial officers are exempt from paying tax from their salaries
and thus considered that the deduction of salaries from the said judges as a violation from the compensation received by judicial
officers.

ISSUE: Whether or not Section 13 of RA 590 is constitutional.

RULING:
No, the Section 13 of RA 590 is unconstitutional. The collection of income taxes in judicial officers is considered as against the
provisions given by the Article VIII Sec 9 of the Constitution. The compensation shall not be diminished during their continuance of
their service. Section 13 of RA 590 stated that no salary received by any public officer of the republic shall be exempted from paying
its taxes. This specific part of RA 590 is in contrary with what is Article VIII Sec 9 has provided.

====================================
David G. Nitafan, Wenceslao M. Polo, and Maximo A. Savellano, Jr., petitioners, vs. Commissioner Of Internal Revenue and The
Financial Officer, Supreme Court Of The Philippines, respondents.



Facts: Petitioners, the duly appointed and qualified Judges presiding over Branches 52, 19 and 53, respectively, of the Regional Trial
Court, National Capital Judicial Region, all with stations in Manila, seek to prohibit and/or perpetually enjoin respondents, the
Commissioner of Internal Revenue and the Financial Officer of the Supreme Court, from making any deduction of withholding taxes
from their salaries.


Issue: Whether or not members of the Judiciary are exempt from income taxes.


Ruling: Yes. The Court held that the salaries of Justices and Judges are properly subject to a general income tax law applicable to all
income earners and that the payment of such income tax by Justices and Judges does not fall within the constitutional protection
against decrease of their salaries during their continuance in office and the ruling that "the imposition of income tax upon the salary
of judges is a diminution thereof, and so violates the Constitution" in Perfecto vs. Meer, as affirmed in Endencia vs. David must be
declared discarded. The framers of the fundamental law, as the alter ego of the people, have expressed in clear and unmistakable
terms the meaning and import of Section 10, Article VIII, of the 1987 Constitution that they have adopted.

NITAFAN vs. COMMISSIONER OF INTERNAL REVENUE
G.R. No. 78780, July 23, 1987, 152 SCRA 284

FACTS:
Petitioners, the duly appointed and qualified Judges presiding over Branches 52, 19 and 53, respectively, of the Regional Trial Court,
National Capital Judicial Region, all with stations in Manila, seek to prohibit and/or perpetually enjoin respondents, the
Commissioner of Internal Revenue and the Financial Officer of the Supreme Court, from making any deduction of withholding taxes
from their salaries.

They submit that "any tax withheld from their emoluments or compensation as judicial officers constitutes a decrease or diminution
of their salaries, contrary to the provision of Section 10, Article VIII of the 1987 Constitution mandating that during their continuance
in office, their salary shall not be decreased," even as it is anathema to the Ideal of an independent judiciary envisioned i n and by
said Constitution."

It may be pointed out that, early on, the Court had dealt with the matter administratively in response to representations that the
Court shall direct its Finance Officer to discontinue the withholding of taxes from salaries of members of the Bench. Thus, on June 4,
1987, it was reaffirmed by the Court en banc.

ISSUE:
Whether or not members of the Judiciary are exempt from income taxes.

HELD:
No. The debates, interpellations and opinions expressed regarding the constitutional provision in question until it was final ly
approved by the Commission disclosed that the true intent of the framers of the 1987 Constitution, in adopting it, was to make the
salaries of members of the Judiciary taxable. The ascertainment of that intent is but in keeping with the fundamental principle of
constitutional construction that the intent of the framers of the organic law and of the people adopting it should be given effect. The
primary task in constitutional construction is to ascertain and thereafter assure the realization of the purpose of the framers and of
the people in the adoption of the Constitution. It may also be safely assumed that the people in ratifying the Constitution were
guided mainly by the explanation offered by the framers.

The ruling that "the imposition of income tax upon the salary of judges is a dimunition thereof, and so violates the Constitution",
in Perfecto vs. Meer, as affirmed in Endencia vs. David must be declared discarded. The framers of the fundamental law, as the alter
ego of the people, have expressed in clear and unmistakable terms the meaning and import of Section 10, Article VIII, of the 1987
Constitution that they have adopted

Stated otherwise, we accord due respect to the intent of the people, through the discussions and deliberations of their
representatives, in the spirit that all citizens should bear their aliquot part of the cost of maintaining the government and should
share the burden of general income taxation equitably. Therefore, the petition for Prohibition is hereby dismissed.

Republic of the Philippines
SUPREME COURT
Manila
EN BANC
G.R. No. 78780 July 23, 1987
DAVID G. NITAFAN, WENCESLAO M. POLO, and MAXIMO A. SAVELLANO, JR., petitioners,
vs.
COMMISSIONER OF INTERNAL REVENUE and THE FINANCIAL OFFICER, SUPREME COURT OF THE PHILIPPINES, respondents.
R E S O L U T I O N
MELENCIO-HERRERA, J.:
Petitioners, the duly appointed and qualified Judges presiding over Branches 52, 19 and 53, respectively, of the Regional Trial Court,
National Capital Judicial Region, all with stations in Manila, seek to prohibit and/or perpetually enjoin respondents, the
Commissioner of Internal Revenue and the Financial Officer of the Supreme Court, from making any deduction of withholding taxes
from their salaries.
In a nutshell, they submit that "any tax withheld from their emoluments or compensation as judicial officers constitutes a decrease
or diminution of their salaries, contrary to the provision of Section 10, Article VIII of the 1987 Constitution mandating that "(d)uring
their continuance in office, their salary shall not be decreased," even as it is anathema to the Ideal of an independent judiciary
envisioned in and by said Constitution."
It may be pointed out that, early on, the Court had dealt with the matter administratively in response to representations that the
Court direct its Finance Officer to discontinue the withholding of taxes from salaries of members of the Bench. Thus, on June 4,
1987, the Court en banc had reaffirmed the Chief Justice's directive as follows:
RE: Question of exemption from income taxation. The Court REAFFIRMED the Chief Justice's previous and standing directive to the
Fiscal Management and Budget Office of this Court to continue with the deduction of the withholding taxes from the salaries of the
Justices of the Supreme Court as well as from the salaries of all other members of the judiciary.
That should have resolved the question. However, with the filing of this petition, the Court has deemed it best to settle the legal
issue raised through this judicial pronouncement. As will be shown hereinafter, the clear intent of the Constitutional Commission
was to delete the proposed express grant of exemption from payment of income tax to members of the Judiciary, so as to "give
substance to equality among the three branches of Government" in the words of Commissioner Rigos. In the course of the
deliberations, it was further expressly made clear, specially with regard to Commissioner Joaquin F. Bernas' accepted amendment to
the amendment of Commissioner Rigos, that the salaries of members of the Judiciary would be subject to the general income tax
applied to all taxpayers.
This intent was somehow and inadvertently not clearly set forth in the final text of the Constitution as approved and ratified in
February, 1987 (infra, pp. 7-8). Although the intent may have been obscured by the failure to include in the General Provisions a
proscription against exemption of any public officer or employee, including constitutional officers, from payment of income tax, the
Court since then has authorized the continuation of the deduction of the withholding tax from the salaries of the members of the
Supreme Court, as well as from the salaries of all other members of the Judiciary. The Court hereby makes of record that it had then
discarded the ruling in Perfecto vs. Meer and Endencia vs. David, infra, that declared the salaries of members of the Judiciary exempt
from payment of the income tax and considered such payment as a diminution of their salaries during their continuance in office.
The Court hereby reiterates that the salaries of Justices and Judges are properly subject to a general income tax law applicable to all
income earners and that the payment of such income tax by Justices and Judges does not fall within the constitutional protection
against decrease of their salaries during their continuance in office.
A comparison of the Constitutional provisions involved is called for. The 1935 Constitution provided:
... (The members of the Supreme Court and all judges of inferior courts) shall receive such compensation as may be fixed by law,
which shall not be diminished during their continuance in office ...
1
(Emphasis supplied).
Under the 1973 Constitution, the same provision read:
The salary of the Chief Justice and of the Associate Justices of the Supreme court, and of judges of inferior courts shall be fixed by
law, which shall not be decreased during their continuance in office. ...
2
(Emphasis ours).
And in respect of income tax exemption, another provision in the same 1973 Constitution specifically stipulated:
No salary or any form of emolument of any public officer or employee, including constitutional officers, shall be exempt from
payment of income tax.
3

The provision in the 1987 Constitution, which petitioners rely on, reads:
The salary of the Chief Justice and of the Associate Justices of the Supreme Court, and of judges of lower courts shall be fixed by law.
During their continuance in office, their salary shall not be decreased.
4
(Emphasis supplied).
The 1987 Constitution does not contain a provision similar to Section 6, Article XV of the 1973 Constitution, for which reason,
petitioners claim that the intent of the framers is to revert to the original concept of "non-diminution "of salaries of judicial officers.
The deliberations of the 1986 Constitutional Commission relevant to Section 10, Article VIII, negate such contention.
The draft proposal of Section 10, Article VIII, of the 1987 Constitution read:
Section 13. The salary of the Chief Justice and the Associate Justices of the Supreme Court and of judges of the lower courts shall be
fixed by law. During their continuance in office, their salary shall not be diminished nor subjected to income tax. Until the National
Assembly shall provide otherwise, the Chief Justice shall receive an annual salary of _____________ and each Associate Justice
______________ pesos.
5
(Emphasis ours)
During the debates on the draft Article (Committee Report No. 18), two Commissioners presented their objections to the provision
on tax exemption, thus:
MS. AQUINO. Finally, on the matter of exemption from tax of the salary of justices, does this not violate the principle of the
uniformity of taxation and the principle of equal protection of the law? After all, tax is levied not on the salary but on the combined
income, such that when the judge receives a salary and it is comingled with the other income, we tax the income, not the salary.
Why do we have to give special privileges to the salary of justices?
MR. CONCEPCION. It is the independence of the judiciary. We prohibit the increase or decrease of their salary during their term. This
is an indirect way of decreasing their salary and affecting the independence of the judges.
MS. AQUINO. I appreciate that to be in the nature of a clause to respect tenure, but the special privilege on taxation might, in effect,
be a violation of the principle of uniformity in taxation and the equal protection clause.
6

x x x x x x x x x
MR. OPLE. x x x
Of course, we share deeply the concern expressed by the sponsor, Commissioner Roberto Concepcion, for whom we have the
highest respect, to surround the Supreme Court and the judicial system as a whole with the whole armor of defense against the
executive and legislative invasion of their independence. But in so doing, some of the citizens outside, especially the humble
government employees, might say that in trying to erect a bastion of justice, we might end up with the fortress of privileges, an
island of extra territoriality under the Republic of the Philippines, because a good number of powers and rights accorded to the
Judiciary here may not be enjoyed in the remotest degree by other employees of the government.
An example is the exception from income tax, which is a kind of economic immunity, which is, of course, denied to the entire
executive department and the legislative.
7

And during the period of amendments on the draft Article, on July 14, 1986, Commissioner Cirilo A. Rigos proposed that the term
"diminished" be changed to "decreased" and that the words "nor subjected to income tax" be deleted so as to "give substance to
equality among the three branches in the government.
Commissioner Florenz D. Regalado, on behalf of the Committee on the Judiciary, defended the original draft and referred to the
ruling of this Court in Perfecto vs. Meer
8
that "the independence of the judges is of far greater importance than any revenue that
could come from taxing their salaries." Commissioner Rigos then moved that the matter be put to a vote. Commissioner Joaquin G.
Bernas stood up "in support of an amendment to the amendment with the request for a modification of the amendment," as
follows:
FR. BERNAS. Yes. I am going to propose an amendment to the amendment saying that it is not enough to drop the phrase "shall not
be subjected to income tax," because if that is all that the Gentleman will do, then he will just fall back on the decision in Perfecto vs.
Meer and in Dencia vs. David [should be Endencia and Jugo vs. David, etc., 93 Phil. 696[ which excludes them from income tax, but
rather I would propose that the statement will read: "During their continuance in office, their salary shall not be diminished BUT
MAY BE SUBJECT TO GENERAL INCOME TAX."IN support of this position, I would say that the argument seems to be that the justice
and judges should not be subjected to income tax because they already gave up the income from their practice. That is true also of
Cabinet members and all other employees. And I know right now, for instance, there are many people who have accepted
employment in the government involving a reduction of income and yet are still subject to income tax. So, they are not the only
citizens whose income is reduced by accepting service in government.
Commissioner Rigos accepted the proposed amendment to the amendment. Commissioner Rustico F. de los Reyes, Jr. then moved
for a suspension of the session. Upon resumption, Commissioner Bernas announced:
During the suspension, we came to an understanding with the original proponent, Commissioner Rigos, that his amendment on page
6,. line 4 would read: "During their continuance in office, their salary shall not be DECREASED."But this is on the understanding that
there will be a provision in the Constitution similar to Section 6 of Article XV, the General Provisions of the 1973 Constitution, which
says:
No salary or any form of emolument of any public officer or employee, including constitutional officers, shall be exempt from
payment of income tax.
So, we put a period (.) after "DECREASED" on the understanding that the salary of justices is subject to tax.
When queried about the specific Article in the General Provisions on non-exemption from tax of salaries of public officers,
Commissioner Bernas replied:
FR BERNAS. Yes, I do not know if such an article will be found in the General Provisions. But at any rate, when we put a period (.)
after "DECREASED," it is on the understanding that the doctrine in Perfecto vs. Meer and Dencia vs. David will not apply anymore.
The amendment to the original draft, as discussed and understood, was finally approved without objection.
THE PRESIDING OFFICER (Mr. Bengzon). The understanding, therefore, is that there will be a provision under the Article on General
Provisions. Could Commissioner Rosario Braid kindly take note that the salaries of officials of the government including
constitutional officers shall not be exempt from income tax? The amendment proposed herein and accepted by the Committee now
reads as follows: "During their continuance in office, their salary shall not be DECREASED"; and the phrase "nor subjected to income
tax" is deleted.
9

The debates, interpellations and opinions expressed regarding the constitutional provision in question until it was finally approved
by the Commission disclosed that the true intent of the framers of the 1987 Constitution, in adopting it, was to make the salaries of
members of the Judiciary taxable. The ascertainment of that intent is but in keeping with the fundamental principle of constitutional
construction that the intent of the framers of the organic law and of the people adopting it should be given effect.
10
The primary
task in constitutional construction is to ascertain and thereafter assure the realization of the purpose of the framers and of the
people in the adoption of the Constitution.
11
it may also be safely assumed that the people in ratifying the Constitution were guided
mainly by the explanation offered by the framers.
12
1avvphi1
Besides, construing Section 10, Articles VIII, of the 1987 Constitution, which, for clarity, is again reproduced hereunder:
The salary of the Chief Justice and of the Associate Justices of the Supreme Court, and of judges of lower courts shall be fixed by law.
During their continuance in office, their salary shall not be decreased. (Emphasis supplied).
it is plain that the Constitution authorizes Congress to pass a law fixing another rate of compensation of Justices and Judges but such
rate must be higher than that which they are receiving at the time of enactment, or if lower, it would be applicable only to those
appointed after its approval. It would be a strained construction to read into the provision an exemption from taxation in the light of
the discussion in the Constitutional Commission.
With the foregoing interpretation, and as stated heretofore, the ruling that "the imposition of income tax upon the salary of judges
is a dimunition thereof, and so violates the Constitution" in Perfecto vs. Meer,
13
as affirmed inEndencia vs. David
14
must be declared
discarded. The framers of the fundamental law, as the alter ego of the people, have expressed in clear and unmistakable terms the
meaning and import of Section 10, Article VIII, of the 1987 Constitution that they have adopted
Stated otherwise, we accord due respect to the intent of the people, through the discussions and deliberations of their
representatives, in the spirit that all citizens should bear their aliquot part of the cost of maintaining the government and should
share the burden of general income taxation equitably.
WHEREFORE, the instant petition for Prohibition is hereby dismissed.
Teehankee, C.J., Fernan, Narvasa, Gutierrez, Jr., Cruz, Paras, Feliciano, Gancayco, Padilla, Bidin, Sarmiento and Cortes, JJ., concur.
Yap, J., is on leave.
===========================================================
Republic of the Philippines
SUPREME COURT
Manila
EN BANC
G.R. No. L-26702 October 18, 1979
JUAN AUGUSTO B. PRIMICIAS, plaintiff-appellee,
vs.
THE MUNICIPALITY OF URDANETA, PANGASINAN, ET AL., defendants-appellants.
Ambrosio Padilla Law Offices for appellee.
Primicias, Castillo & Macaraeg for appellants.

DE CASTRO, J.:
The main issue in this appeal is the validity of Ordinance No. 3, Series of 1964, enacted on March 13,1964 by the Municipal Council
of Urdaneta, Pangasinan, which was declared null and void by the Court of First Instance of Lingayen, Pangasinan, in its decision
dated June 29, 1966, the dispositive portion of which reads as follows:
WHEREFORE, this Court renders decision declaring Ordinance No, 3, Series of 1964, to be null and void; making the writ of
preliminary injunction heretofore issued against the defendant, Felix D. Soriano definite and permanent; and further restraining the
defendants, Amadeo R. Perez, Jr., Lorenzo G. Suyat and Estanislao Andrada, from enforcing the said ordinance all throughout
Urdaneta; and ordering the said defendants to return to the plaintiff his drivers (sic) license CIN 017644, a copy of which is Exhibit D-
1, and to pay the costs of suit.
1

From the aforecited decision, defendants appealed to this Court. The antecedent facts of this case are as follows:
2

On February 8, 1965, Juan Augusta B. Primacias plaintiff appellee, was driving his car within the jurisdiction of Urdaneta when a
member of Urdaneta's Municipal Police asked him to stop. He was told, upon stopping, that he had violated Municipal Ordinance
No. 3, Series of 1964, "and more particularly, for overtaking a truck." The policeman then asked for plaintiff's license which he
surrendered, and a temporary operator's permit was issued to him. This incident took place about 200 meters away from a school
building, at Barrio Nancamaliran, Urdaneta.
Thereafter, a criminal complaint was filed in the Municipal Court of Urdaneta against Primicias for violation of Ordinance No. 3,
Series of 1964. Due to the institution of the criminal case, plaintiff Primicias initiated an action for the annulment of said ordinance
with prayer for the issuance of preliminary injunction for the purpose of restraining defendants Municipality of Urdaneta, Mayor
Perez, Police Chief Suyat, Judge Soriano and Patrolman Andrada from enforcing the ordinance. The writ was issued and Judge
Soriano was enjoined from further proceeding in the criminal case.
After trial, the Court of First Instance rendered the questioned decision holding that the ordinance was null and void and had been
repealed by Republic Act No. 4136, otherwise known as the Land Transportation and Traffic Code. Now, defendants, appellants
herein, allege that the lower court erred in:
3

1. declaring that Municipal Ordinance No. 3 (Series of 1964) of Urdaneta is null and void;
2. requiring the municipal council of Urdaneta in the enactment of said ordinance to give maximum allowable speed and to make
classification of highways;
3. holding that said ordinance is in conflict with section 35 par. b(4) of Republic Act 4136;
4. requiring that said ordinance be approved by the Land Transportation Commissioner;
5. holding that said ordinance is not clear and definite in its terms;
6. issuing ex-parte a writ of injunction to restrain the proceedings in criminal case no. 3140.
The ordinance in question provides:
4

SECTION 1 - That the following speed limits for vehicular traffic along the National Highway and the Provincial Roads within the
territorial limits of Urdaneta shall be as follows:
a. Thru crowded streets approaching intersections at 'blind corners, passing school zones or thickly populated areas, duly marked
with sign posts, the maximum speed limit allowable shall be 20 kph.
SECTION 2 - That any person or persons caught driving any motor vehicle violating the provisions of this ordinance shall be fined
P10.00 for the first offense; P20.00 for the second offense; and P30.00 for the third and succeeding offenses, the Municipal Judge
shall recommend the cancellation of the license of the offender to the Motor Vehicle's Office (MVO); or failure to pay the fine
imposed, he shall suffer a subsidiary imprisonment in accordance with law.
Appellants contend that the Ordinance is valid, being "patterned after and based on Section 53,
5
par. 4 of Act No. 3992, as amended
(Revised Motor Vehicle Law)." In so arguing, appellants fail to note that Act No. 3992 has been superseded by Republic Act No. 4136,
the Land Transportation and 'Traffic Code, which became effective on June 20, 1964, about three months after the questioned
ordinance was approved by Urdaneta's Municipal Council. The explicit repeal of the aforesaid Act is embodied in Section 63,
Republic Act No. 4136, to wit:
Act Numbered thirty-nine hundred ninety-two (3992) as amended, and all laws, executive orders, ordinance, resolutions, regulations
or paints thereof in conflict with the provisions of this Act are repealed.
By this express repeal, and the general rule that a later law prevails over an earlier law,
6
appellants are in error in contending that "a
later enactment of the law relating to the same subject matter as that of an earlier statute is not sufficient to cause an implied
repeal of the original law." Pursuant to Section 63, Republic Act No. 4136, the ordinance at bar is thus placed within the ambit of
Republic Act No. 4136, and not Act No. 3992. The validity of Ordinance No. 3, Series of 1964, must therefore be determined vis-a-vis
Republic Act No. 4136, the "mother statute" so to speak, which was in force at the time the criminal case was brought against
Primicias for the violation of the said ordinance.
An essential requisite for a valid ordinance is, among others, that is "must not contravene . . . the statute,"
7
for it is a "fundamental
principle that municipal ordinances are inferior in status and subordinate to the laws of the state."
8
Following this general rule,
whenever there is a conflict between an ordinance and a statute, the ordinance "must give way.
9

Since the Ordinance is aimed at regulating traffic, Chapter IV Traffic Rules), Article I (Speed Limits and Keeping to the Right),
consisting of sections 35, to 38 of Republic Act No. 4136, particularly Sections 35, 36, 38 contain the provisions material to its
validity. Section 35 (b), Republic Act No. 4136, which took the place of Section 53, par. (4), Act No. 3992, provides restrictions as to
speed thus:
MAXIMUM ALLOWABLE SPEEDS
Passenger cars and Motor trucks
motorcycle and buses
1. On open country roads, with
"blind corners" not closely bordered
by habitation. 80 km. 50 km.
2. On through streets or per hour per hour
boulevards, clear of traffic, with "no
blind corners" when so designated. 40 km. 30 km.
3. On city and municipal per hour per hour
streets, with light traffic, when not
designated "through streets." 30 km. 30 km.
4. Through crowded streets ap per hour per hour
proaching intersection at "blind cor
ners," passing school zones, passing
other vehicles which are stationary, or
for similar circumstances. 20 km. 20 km.
per hour per hour
A look at the aforecited section and Section 1, par. (a) of the Ordinance shows that the latter is more or less a restatement only of
number (4), par. (b), Section 35. As observed by the trial court, the Ordinance "refers to only one of the four classifications
mentioned in paragraph (b), Section 35."
10
limiting the rates of speed for
vehicular traffic along the national highway and The provincial roads within the territorial limits of Urdaneta to 20 kilometers per
hour without regard to whether the road is an open country roads (six), or through streets or boulevards, or city or municipal streets
with light traffic.
11

As also found correctly by the lower court, the Municipal Council of Urdaneta did not make any classification of its thoroughfares,
contrary to the explicit requirement laid down by Section 38, Republic Act No. 4136, which provides:
Classification of highways. - Public highways shall be properly classified for traffic purposes by the provincial board or city council
having jurisdiction over them, and said provincial board, municipal board or city council shall provide appropriate signs therefor,
subject to the approval of the Commissioner. It shall be the duty of every provincial, city and municipal secretary to certify to the
Commissioner the names, locations, and limits of all "through streets" designated as such by the provincial board, municipal board
or council.
Under this section, a local legislative body intending to control traffic in public highways
12
is supposed to classify, first, and then
mark them with proper signs, all to be approved by the Land Transportation Commissioner. To hold that the provisions of Section 38
are mandatory is sanctioned by a ruling
13
that
statutes which confer upon a public body or officer . . . power to perform acts which concern the public interests or rights of
individuals, are generally, regarded as mandatory although the language is permissive only since the are construed as imposing
duties rather than conferring privileges.
The classifications which must be based on Section 35 are necessary in view of Section 36 which states that "no provincial, city or
municipal authority shall enact or enforce any ordinance or resolution specifying maximum allowable speeds other than those
provided in this Act." In this case, however, there is no showing that the marking of the streets and areas falling under Section 1, par.
(a), Ordinance No. 3, Series of 1964, was done with the approval of the Land Transportation Commissioner. Thus, on this very
ground alone, the Ordinance becomes invalid. Since it lacks the requirement imposed by Section 38, the provincial, city, or municipal
board or council is enjoined under Section 62 of the Land Transportation and Traffic Code from "enacting or enforcing any ordinance
or resolution in conflict with the provisions of this Act."
Regarding the contention that the lower court erred in holding that said "Ordinance is not clear and definite in its terms." We agree
with the Court a quo that when the Municipal Council of Urdaneta used the phrase "vehicular traffic" (Section 1, Ordinance) it "did
not distinguish between passenger cars and motor vehicles and motor trucks and buses."
14
This conclusion is bolstered by the fact
that nowhere in the Ordinance is "vehicular traffic" defined. Considering that this is a regulatory ordinance, its clearness,
definiteness and certainty are all the more important so that "an average man should be able with due care, after reading it,, to
understand and ascertain whether he will incur a penalty for particular acts or courses of conduct."
15
In comparison, Section 35(b),
Republic Act No. 4136 on which Section 1 of the Ordinance must be based, stated that the rates of speed enumerated therein refer
to motor vehicle,
16
specifying the speed for each kind of vehicle. At the same time, to avoid vagueness, Art. 11, Section 3 defines
what a motor vehicle is and passenger automobiles are.
On the issue of whether a writ of injunction can restrain the proceedings in Criminal Case No. 3140, the general rule is that
"ordinarily, criminal prosecution may not be blocked by court prohibition or injunction."
17
Exceptions however are allowed in the
following instances:
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;
5. in proper cases, because the statute relied upon is unconstitutional or was held invalid.
18

The local statute or ordinance at bar being invalid, the exception just cited obtains in this case. Hence, the lower court did not err in
issuing the writ of injunction against defendants. Moreover, considering that "our law on municipal corporations is in principle
patterned after that of the United States, "
19
it would not be amiss for Us to adopt in this instance the ruling that to enjoin the
enforcement of a void ordinance, "injunction has frequently been sustained in order to prevent a multiplicity of prosecutions under
it."
20

In view of the foregoing, the appealed decision is hereby affirmed.
SO ORDERED.
Teehankee, Acting C.J., Barredo, Makasiar, Concepcion Jr., Santos, Fernandez, Guerrero, and Melencio-Herrera, JJ., concur.
Aquino, J., took no part.
Antonio, J., is on leave.


Separate Opinions

ABAD SANTOS, J., concurring:
The ordinance in question was in effect a speed trap for unwary motorists for which Urdaneta had become notorious.


# Separate Opinions
ABAD SANTOS, J., concurring:
The ordinance in question was in effect a speed trap for unwary motorists for which Urdaneta had become notorious.
===========================
Republic of the Philippines
SUPREME COURT
Manila
SECOND DIVISION
G.R. No. L-22036 April 30, 1979
TESTATE ESTATE OF THE LATE REVEREND FATHER PASCUAL RIGOR. THE PARISH PRIEST OF THE ROMAN CATHOLIC CHURCH OF
VICTORIA, TARLAC, petitioner-appellant,
vs.
BELINA RIGOR, NESTORA RIGOR, FRANCISCA ESCOBAR DE RIGOR and JOVITA ESCOBAR DE FAUSTO,respondents-appellees.
D. Taedo, Jr. for appellants.
J. Palanca, Sr. for appellee.

AQUINO, J.:
This case is about the efficaciousness or enforceability of a devise of ricelands located at Guimba, Nueva Ecija, with a total area of
around forty- four hectares That devise was made in the will of the late Father Pascual Rigor, a native of Victoria Tarlac, in favor of
his nearest male relative who would study for the priesthood.
The parish priest of Victoria, who claimed to be a trustee of the said lands, appealed to this Court from the decision of the Court of
Appeals affirming the order of the probate court declaring that the said devise was inoperative (Rigor vs. Parish Priest of the Roman
Catholic Church of Victoria, Tarlac, CA-G.R. No. 24319-R, August 1, 1963).
The record discloses that Father Rigor, the parish priest of Pulilan, Bulacan, died on August 9, 1935, leaving a will executed on
October 29, 1933 which was probated by the Court of First Instance of Tarlac in its order of December 5, 1935. Named as devisees in
the will were the testators nearest relatives, namely, his three sisters: Florencia Rigor-Escobar, Belina Rigor-Manaloto and Nestora
Rigor-Quiambao. The testator gave a devise to his cousin, Fortunato Gamalinda.
In addition, the will contained the following controversial bequest (paragraphing supplied to facilitate comprehension of the
testamentary provisions):
Doy y dejo como legado CUATRO (4) PARCELAS de terreno palayeros situados en el municipiooo de Guimba de la provinciaaa de
NUEVA ECIJA, cuyo num. de CERTIFICADO DE TRANSFERENCIA DE TITULO SON; Titulo Num. 6530, mide 16,249 m. cuadrados de
superficie Titulo Num. 6548, mide 242,998 m. cuadrados de superficie y annual 6525, mide 62,665 m. cuadrados de superficie; y
Titulo Num. 6521, mide 119,251 m. cuadrados de superficie; a cualquier pariente mio varon mas cercano que estudie la carrera
eclesiatica hasta ordenarse de Presbiterado o sea Sacerdote; las condiciones de estate legado son;
(1.a) Prohibe en absoluto la venta de estos terrenos arriba situados objectos de este legado;
(2.a) Que el legatario pariente mio mas cercano tendra derecho de empezar a gozar y administrar de este legado al principiar a
curzar la Sagrada Teologio, y ordenado de Sacerdote, hasta su muerte; pero que pierde el legatario este derecho de administrar y
gozar de este legado al dejar de continuar sus estudios para ordenarse de Presbiterado (Sacerdote).
Que el legatario una vez Sacerdote ya estara obligado a celebrar cada ao VEINTE (20) Misas rezadas en sufragio de mi alma y de mis
padres difuntos, y si el actual legatario, quedase excomulgado, IPSO FACTO se le despoja este legado, y la administracion de esto
pasara a cargo del actual Parroco y sus sucesores de la Iglecia Catolica de Victoria, Tarlac.
Y en intervalo de tiempo que no haya legatario acondicionado segun lo arriba queda expresado, pasara la administracion de este
legado a cargo del actual Parroco Catolico y sus sucesores, de Victoria, Tarlac.
El Parroco administrador de estate legado, acumulara, anualmente todos los productos que puede tener estate legado, ganando o
sacando de los productos anuales el CINCO (5) por ciento para su administracion, y los derechos correspondientes de las VEINTE (20)
Misas rezadas que debiera el Parroco celebrar cada ao, depositando todo lo restante de los productos de estate legado, en un
banco, a nombre de estate legado.
To implement the foregoing bequest, the administratix in 1940 submitted a project containing the following item:
5. LEGACY OF THE CHURCH
That it be adjudicated in favor of the legacy purported to be given to the nearest male relative who shall take the priesthood, and in
the interim to be administered by the actual Catholic Priest of the Roman Catholic Church of Victoria, Tarlac, Philippines, or his
successors, the real properties hereinbelow indicated, to wit:
Title No. Lot No. Area in Has. Tax Dec. Ass. Value
T-6530 3663 1.6249 18740 P 340.00
T-6548 3445-C 24.2998 18730 7,290.00
T-6525 3670 6.2665 18736 1,880.00
T-6521 3666 11.9251 18733 3,580.00
Total amount and value 44.1163 P13,090.00
Judge Roman A. Cruz in his order of August 15, 1940, approving the project of partition, directed that after payment of the
obligations of the estate (including the sum of P3,132.26 due to the church of the Victoria parish) the administratrix should deliver to
the devisees their respective shares.
It may be noted that the administratrix and Judge Cruz did not bother to analyze the meaning and implications of Father Rigor's
bequest to his nearest male relative who would study for the priesthood. Inasmuch as no nephew of the testator claimed the devise
and as the administratrix and the legal heirs believed that the parish priest of Victoria had no right to administer the ricelands, the
same were not delivered to that ecclesiastic. The testate proceeding remained pending.
About thirteen years after the approval of the project of partition, or on February 19, 1954, the parish priest of Victoria filed in the
pending testate proceeding a petition praying for the appointment of a new administrator (succeeding the deceased administration
Florencia Rigor), who should deliver to the church the said ricelands, and further praying that the possessors thereof be ordered to
render an accounting of the fruits. The probate court granted the petition. A new administrator was appointed. On January 31, 1957
the parish priest filed another petition for the delivery of the ricelands to the church as trustee.
The intestate heirs of Father Rigor countered with a petition dated March 25, 1957 praying that the bequest be d inoperative and
that they be adjudged as the persons entitled to the said ricelands since, as admitted by the parish priest of Victoria, "no nearest
male relative of" the testator "has ever studied for the priesthood" (pp. 25 and 35, Record on Appeal). That petition was opposed by
the parish priest of Victoria.
Finding that petition to be meritorious, the lower court, through Judge Bernabe de Aquino, declared the bequest inoperative and
adjudicated the ricelands to the testator's legal heirs in his order of June 28, 1957. The parish priest filed two motions for
reconsideration.
Judge De Aquino granted the respond motion for reconsideration in his order of December 10, 1957 on the ground that the testator
had a grandnephew named Edgardo G. Cunanan (the grandson of his first cousin) who was a seminarian in the San Jose Seminary of
the Jesuit Fathers in Quezon City. The administrator was directed to deliver the ricelands to the parish priest of Victoria as trustee.
The legal heirs appealed to the Court of Appeals. It reversed that order. It held that Father Rigor had created a testamentary trust for
his nearest male relative who would take the holy orders but that such trust could exist only for twenty years because to enforce it
beyond that period would violate "the rule against perpetuities. It ruled that since no legatee claimed the ricelands within twenty
years after the testator's death, the same should pass to his legal heirs, citing articles 888 and 912(2) of the old Civil Code and article
870 of the new Civil Code.
The parish priest in this appeal contends that the Court of Appeals erred in not finding that the testator created a public charitable
trust and in not liberally construing the testamentary provisions so as to render the trust operative and to prevent intestacy.
As refutation, the legal heirs argue that the Court of Appeals d the bequest inoperative because no one among the testator's nearest
male relatives had studied for the priesthood and not because the trust was a private charitable trust. According to the legal heirs,
that factual finding is binding on this Court. They point out that appellant priest's change of theory cannot be countenanced in this
appeal .
In this case, as in cases involving the law of contracts and statutory construction, where the intention of the contracting parties or of
the lawmaking body is to be ascertained, the primary issue is the determination of the testator's intention which is the law of the
case (dicat testor et erit lex. Santos vs. Manarang, 27 Phil. 209, 215; Rodriguez vs. Court of Appeals, L-28734, March 28, 1969, 27
SCRA 546).
The will of the testator is the first and principal law in the matter of testaments. When his intention is clearly and precisely
expressed, any interpretation must be in accord with the plain and literal meaning of his words, except when it may certainly appear
that his intention was different from that literally expressed (In re Estate of Calderon, 26 Phil. 333).
The intent of the testator is the cardinal rule in the construction of wills." It is "the life and soul of a will It is "the first greatest rule,
the sovereign guide, the polestar, in giving effect to a will". (See Dissent of Justice Moreland in Santos vs. Manarang, 27 Phil. 209,
223, 237-8.)
One canon in the interpretation of the testamentary provisions is that "the testator's intention is to be ascertained from the words
of the wilt taking into consideration the circumstances under which it was made", but excluding the testator's oral declarations as to
his intention (Art. 789, Civil Code of the Philippines).
To ascertain Father Rigor's intention, it may be useful to make the following re-statement of the provisions of his will.
1. that he bequeathed the ricelands to anyone of his nearest male relatives who would pursue an ecclesiastical career until his
ordination as a priest.
2. That the devisee could not sell the ricelands.
3. That the devisee at the inception of his studies in sacred theology could enjoy and administer the ricelands, and once ordained as
a priest, he could continue enjoying and administering the same up to the time of his death but the devisee would cease to enjoy
and administer the ricelands if he discontinued his studies for the priesthood.
4. That if the devisee became a priest, he would be obligated to celebrate every year twenty masses with prayers for the repose of
the souls of Father Rigor and his parents.
5. That if the devisee is excommunicated, he would be divested of the legacy and the administration of the riceland would pass to
the incumbent parish priest of Victoria and his successors.
6. That during the interval of time that there is no qualified devisee as contemplated above, the administration of the ricelands
would be under the responsibility of the incumbent parish priest of Victoria and his successors, and
7. That the parish priest-administrator of the ricelands would accumulate annually the products thereof, obtaining or getting from
the annual produce five percent thereof for his administration and the fees corresponding to the twenty masses with prayers that
the parish priest would celebrate for each year, depositing the balance of the income of the devise in the bank in the name of his
bequest.
From the foregoing testamentary provisions, it may be deduced that the testator intended to devise the ricelands to his nearest
male relative who would become a priest, who was forbidden to sell the ricelands, who would lose the devise if he discontinued his
studies for the priesthood, or having been ordained a priest, he was excommunicated, and who would be obligated to say annually
twenty masses with prayers for the repose of the souls of the testator and his parents.
On the other hand, it is clear that the parish priest of Victoria would administer the ricelands only in two situations: one, during the
interval of time that no nearest male relative of the testator was studying for the priesthood and two, in case the testator's nephew
became a priest and he was excommunicated.
What is not clear is the duration of "el intervalo de tiempo que no haya legatario acondicionado", or how long after the testator's
death would it be determined that he had a nephew who would pursue an ecclesiastical vocation. It is that patent ambiguity that
has brought about the controversy between the parish priest of Victoria and the testator's legal heirs.
Interwoven with that equivocal provision is the time when the nearest male relative who would study for the priesthood should be
determined. Did the testator contemplate only his nearest male relative at the time of his death? Or did he have in mind any of his
nearest male relatives at anytime after his death?
We hold that the said bequest refers to the testator's nearest male relative living at the time of his death and not to any indefinite
time thereafter. "In order to be capacitated to inherit, the heir, devisee or legatee must be living at the moment the succession
opens, except in case of representation, when it is proper" (Art. 1025, Civil Code).
The said testamentary provisions should be sensibly or reasonably construed. To construe them as referring to the testator's nearest
male relative at anytime after his death would render the provisions difficult to apply and create uncertainty as to the disposition of
his estate. That could not have been his intention.
In 1935, when the testator died, his nearest leagal heirs were his three sisters or second-degree relatives, Mrs. Escobar, Mrs.
Manaloto and Mrs. Quiambao. Obviously, when the testator specified his nearest male relative, he must have had in mind his
nephew or a son of his sister, who would be his third-degree relative, or possibly a grandnephew. But since he could not
prognosticate the exact date of his death or state with certitude what category of nearest male relative would be living at the time
of his death, he could not specify that his nearest male relative would be his nephew or grandnephews (the son of his nephew or
niece) and so he had to use the term "nearest male relative".
It is contended by the legal heirs that the said devise was in reality intended for Ramon Quiambao, the testator's nephew and
godchild, who was the son of his sister, Mrs. Quiambao. To prove that contention, the legal heirs presented in the lower court the
affidavit of Beatriz Gamalinda, the maternal grandmother of Edgardo Cunanan, who deposed that after Father Rigor's death her own
son, Valentin Gamalinda, Jr., did not claim the devise, although he was studying for the priesthood at the San Carlos Seminary,
because she (Beatriz) knew that Father Rigor had intended that devise for his nearest male relative beloning to the Rigor family (pp.
105-114, Record on Appeal).
Mrs. Gamalinda further deposed that her own grandchild, Edgardo G. Cunanan, was not the one contemplated in Father Rigor's will
and that Edgardo's father told her that he was not consulted by the parish priest of Victoria before the latter filed his second motion
for reconsideration which was based on the ground that the testator's grandnephew, Edgardo, was studying for the priesthood at
the San Jose Seminary.
Parenthetically, it should be stated at this juncture that Edgardo ceased to be a seminarian in 1961. For that reason, the legal heirs
apprised the Court of Appeals that the probate court's order adjudicating the ricelands to the parish priest of Victoria had no more
leg to stand on (p. 84, Appellant's brief).
Of course, Mrs. Gamalinda's affidavit, which is tantamount to evidence aliunde as to the testator's intention and which is hearsay,
has no probative value. Our opinion that the said bequest refers to the testator's nephew who was living at the time of his death,
when his succession was opened and the successional rights to his estate became vested, rests on a judicious and unbiased reading
of the terms of the will.
Had the testator intended that the "cualquier pariente mio varon mas cercano que estudie la camera eclesiatica" would include
indefinitely anyone of his nearest male relatives born after his death, he could have so specified in his will He must have known that
such a broad provision would suspend for an unlimited period of time the efficaciousness of his bequest.
What then did the testator mean by "el intervalo de tiempo que no haya legatario acondicionado"? The reasonable view is that he
was referring to a situation whereby his nephew living at the time of his death, who would like to become a priest, was still in grade
school or in high school or was not yet in the seminary. In that case, the parish priest of Victoria would administer the ricelands
before the nephew entered the seminary. But the moment the testator's nephew entered the seminary, then he would be entitled
to enjoy and administer the ricelands and receive the fruits thereof. In that event, the trusteeship would be terminated.
Following that interpretation of the will the inquiry would be whether at the time Father Rigor died in 1935 he had a nephew who
was studying for the priesthood or who had manifested his desire to follow the ecclesiastical career. That query is categorically
answered in paragraph 4 of appellant priest's petitions of February 19, 1954 and January 31, 1957. He unequivocally alleged therein
that "not male relative of the late (Father) Pascual Rigor has ever studied for the priesthood" (pp. 25 and 35, Record on Appeal).
Inasmuch as the testator was not survived by any nephew who became a priest, the unavoidable conclusion is that the bequest in
question was ineffectual or inoperative. Therefore, the administration of the ricelands by the parish priest of Victoria, as envisaged
in the wilt was likewise inoperative.
The appellant in contending that a public charitable trust was constituted by the testator in is favor assumes that he was a trustee or
a substitute devisee That contention is untenable. A reading of the testamentary provisions regarding the disputed bequest not
support the view that the parish priest of Victoria was a trustee or a substitute devisee in the event that the testator was not
survived by a nephew who became a priest.
It should be understood that the parish priest of Victoria could become a trustee only when the testator's nephew living at the time
of his death, who desired to become a priest, had not yet entered the seminary or, having been ordained a priest, he was
excommunicated. Those two contingencies did not arise, and could not have arisen in this case because no nephew of the testator
manifested any intention to enter the seminary or ever became a priest.
The Court of Appeals correctly ruled that this case is covered by article 888 of the old Civil Code, now article 956, which provides
that if "the bequest for any reason should be inoperative, it shall be merged into the estate, except in cases of substitution and
those in which the right of accretion exists" ("el legado ... por qualquier causa, no tenga efecto se refundira en la masa de la
herencia, fuera de los casos de sustitucion y derecho de acrecer").
This case is also covered by article 912(2) of the old Civil Code, now article 960 (2), which provides that legal succession takes place
when the will "does not dispose of all that belongs to the testator." There being no substitution nor accretion as to the said ricelands
the same should be distributed among the testator's legal heirs. The effect is as if the testator had made no disposition as to the said
ricelands.
The Civil Code recognizes that a person may die partly testate and partly intestate, or that there may be mixed succession. The old
rule as to the indivisibility of the testator's win is no longer valid. Thus, if a conditional legacy does not take effect, there will be
intestate succession as to the property recovered by the said legacy (Macrohon Ong Ham vs. Saavedra, 51 Phil. 267).
We find no merit in the appeal The Appellate Court's decision is affirmed. Costs against the petitioner.
SO ORDERED
Fernando, C.J.(Actg. ), Barredo (Actg. Chairman), Antonio, Concepcion, Jr., and Santos, JJ., concur.
Abad Santos, J., took no part.
==========================================
EN BANC
[G.R. No. 116422. November 4, 1996]
AVELINA B. CONTE and LETICIA BOISER-PALMA, petitioners, vs. COMMISSION ON AUDIT (COA),respondent.
D E C I S I O N
PANGANIBAN, J.:
Are the benefits provided for under Social Security System Resolution No. 56 to be considered simply as financial assistance
for retiring employees, or does such scheme constitute a supplementary retirement plan proscribed by Republic Act No. 4968?
The foregoing question is addressed by this Court in resolving the instant petition for certiorari which seeks to reverse and set
aside Decision No. 94-126
[1]
dated March 15, 1994 of respondent Commission on Audit, which denied petitioners request for
reconsideration of its adverse ruling disapproving claims for financial assistance under SSS Resolution No. 56.
The Facts
Petitioners Avelina B. Conte and Leticia Boiser-Palma were former employees of the Social Security System (SSS) who retired
from government service on May 9, 1990 and September 13, 1992, respectively. They availed of compulsory retirement benefits
under Republic Act No. 660.
[2]

In addition to retirement benefits provided under R.A. 660, petitioners also claimed SSS financial assistance benefits granted
under SSS Resolution No. 56, series of 1971.
A brief historical backgrounder is in order. SSS Resolution No. 56,
[3]
approved on January 21, 1971, provides financial incentive
and inducement to SSS employees qualified to retire to avail of retirement benefits under RA 660 as amended, rather than the
retirement benefits under RA 1616 as amended, by giving them financial assistance equivalent in amount to the difference
between what a retiree would have received under RA 1616, less what he was entitled to under RA 660. The said SSS Resolution No.
56 states:
RESOLUTION NO. 56
WHEREAS, the retirement benefits of SSS employees are provided for under Republic Acts 660 and 1616 as amended;
WHEREAS, SSS employees who are qualified for compulsory retirement at age 65 or for optional retirement at a lower age are
entitled to either the life annuity under R.A. 660, as amended, or the gratuity under R.A. 1616, as amended;
WHEREAS, a retirement benefit to be effective must be a periodic income as close as possible to the monthly income that would
have been due to the retiree during the remaining years of his life were he still employed;
WHEREAS, the life annuity under R.A. 660, as amended, being closer to the monthly income that was lost on account of old age than
the gratuity under R.A. 1616, as amended, would best serve the interest of the retiree;
WHEREAS, it is the policy of the Social Security Commission to promote and to protect the interest of all SSS employees, with a view
to providing for their well-being during both their working and retirement years;
WHEREAS, the availment of life annuities built up by premiums paid on behalf of SSS employees during their working years would
mean more savings to the SSS;
WHEREAS, it is a duty of the Social Security Commission to effect savings in every possible way for economical and efficient
operations;
WHEREAS, it is the right of every SSS employee to choose freely and voluntarily the benefit he is entitled to solely for his own benefit
and for the benefit of his family;
NOW, THEREFORE, BE IT RESOLVED, That all the SSS employees who are simultaneously qualified for compulsory retirement at age
65 or for optional retirement at a lower age be encouraged to avail for themselves the life annuity under R.A. 660, as amended;
RESOLVED, FURTHER, That SSS employees who availed themselves of the said life annuity, in appreciation and recognition of their
long and faithful service, be granted financial assistance equivalent to the gratuity plus return of contributions under R.A. 1616, as
amended, less the five year guaranteed annuity under R.A. 660, as amended;
RESOLVED, FINALLY, That the Administrator be authorized to act on all applications for retirement submitted by SSS employees and
subject to availability of funds, pay the corresponding benefits in addition to the money value of all accumulated leaves.
(underscoring supplied)
Long after the promulgation of SSS Resolution No. 56, respondent Commission on Audit (COA) issued a ruling, captioned as
3rd Indorsement dated July 10, 1989,
[4]
disallowing in audit all such claims for financial assistance under SSS Resolution No. 56,
for the reason that: --
x x x the scheme of financial assistance authorized by the SSS is similar to those separate retirement plan or incentive/separation
pay plans adopted by other government corporate agencies which results in the increase of benefits beyond what is allowed under
existing retirement laws. In this regard, attention x x x is invited to the view expressed by the Secretary of Budget and Management
dated February 17, 1988 to the COA General Counsel against the proliferation of retirement plans which, in COA Decision No. 591
dated August 31, 1988, was concurred in by this Commission. x x x.
Accordingly, all such claims for financial assistance under SSS Resolution No. 56 dated January 21, 1971 should be disallowed in
audit. (underscoring supplied)
Despite the aforequoted ruling of respondent COA, then SSS Administrator Jose L. Cuisia, Jr. nevertheless wrote
[5]
on February
12, 1990 then Executive Secretary Catalino Macaraig, Jr., seeking presidential authority for SSS to continue implementing its
Resolution No. 56 dated January 21, 1971 granting financial assistance to its qualified retiring employees.
However, in a letter-reply dated May 28, 1990,
[6]
then Executive Secretary Macaraig advised Administrator Cuisia that the
Office of the President is not inclined to favorably act on the herein request, let alone overrule the disallowance by COA of such
claims, because, aside from the fact that decisions, order or actions of the COA in the exercise of its audit functions are appealable
to the Supreme Court
[7]
pursuant to Sec. 50 of PD 1445, the benefits under said Res. 56, though referred to as financial assistance,
constituted additional retirement benefits, and the scheme partook of the nature of a supplementary pension/retirement plan
proscribed by law.
The law referred to above is RA 4968 (The Teves Retirement Law), which took effect June 17, 1967 and amended CA 186
(otherwise known as the Government Service Insurance Act, or the GSIS Charter), making Sec. 28 (b) of the latter act read as follows:
(b) Hereafter, no insurance or retirement plan for officers or employees shall be created by employer. All supplementary
retirement or pension plans heretofore in force in any government office, agency or instrumentality or corporation owned or
controlled by the government, are hereby declared inoperative or abolished;Provided, That the rights of those who are already
eligible to retire thereunder shall not be affected. (underscoring supplied)
On January 12, 1993, herein petitioners filed with respondent COA their letter-appeal/protest
[8]
seeking reconsideration of
COAs ruling ofJuly 10, 1989 disallowing claims for financial assistance under Res. 56.
On November 15, 1993, petitioner Conte sought payment from SSS of the benefits under Res. 56. On December 9, 1993, SSS
Administrator Renato C. Valencia denied
[9]
the request in consonance with the previous disallowance by respondent COA, but
assured petitioner that should the COA change its position, the SSS will resume the grant of benefits under said Res. 56.
On March 15, 1994, respondent COA rendered its COA Decision No. 94-126 denying petitioners request for reconsideration.
Thus this petition for certiorari under Rule 65 of the Rules of Court.
The Issues
The issues
[10]
submitted by petitioners may be simplified and re-stated thus: Did public respondent abuse its discretion when it
disallowed in audit petitioners claims for benefits under SSS Res. 56?
Petitioners argue that the financial assistance under Res. 56 is not a retirement plan prohibited by RA 4968, and that Res. 56
provides benefits different from and aside from what a retiring SSS employee would be entitled to under RA 660. Petitioners
contend that it is a social amelioration and economic upliftment measure undertaken not only for the benefit of the SSS but more
so for the welfare of its qualified retiring employees. As such, it should be interpreted in a manner that would give the x x x most
advantage to the recipient -- the retiring employees whose dedicated, loyal, lengthy and faithful service to the agency of
government is recognized and amply rewarded -- the rationale for the financial assistance plan. Petitioners reiterate the argument
in their letter dated January 12, 1993 to COA that:
Motivation can be in the form of financial assistance, during their stay in the service or upon retirement, as in the SSS Financial
Assistance Plan. This is so, because Government has to have some attractive remuneration programs to encourage well-qualified
personnel to pursue a career in the government service, rather than in the private sector or in foreign countries ...
A more developmental view of the financial institutions grant of certain forms of financial assistance to its personnel, we believe,
would enable government administrators to see these financial forms of remuneration as contributory to the national
developmental efforts for effective and efficient administration of the personnel programs in different institutions.
[11]

The Courts Ruling
Petitioners contentions are not supported by law. We hold that Res. 56 constitutes a supplementary retirement plan.
A cursory examination of the preambular clauses and provisions of Res. 56 provides a number of clear indications that its
financial assistance plan constitutes a supplemental retirement/pension benefits plan. In particular, the fifth preambular clause
which provides that it is the policy of the Social Security Commission to promote and to protect the interest of all SSS employees,
with a view to providing for their well-being during both their working and retirement years, and the wording of the resolution
itself which states Resolved, further, that SSS employees who availed themselves of the said life annuity (under RA 660), in
appreciation and recognition of their long and faithful service, be granted financial assistance x x x can only be interpreted to mean
that the benefit being granted is none other than a kind of amelioration to enable the retiring employee to enjoy (or survive) his
retirement years and a reward for his loyalty and service. Moreover, it is plain to see that the grant of said financial assistance is
inextricably linked with and inseparable from the application for and approval of retirement benefits under RA 660, i.e., that
availment of said financial assistance under Res. 56 may not be done independently of but only in conjunction with the availment of
retirement benefits under RA 660, and that the former is in augmentation or supplementation of the latter benefits.
Likewise, then SSS Administrator Cuisias historical overview of the origins and purpose of Res. 56 is very instructive and sheds
much light on the controversy:
[12]

Resolution No. 56, x x x, applies where a retiring SSS employee is qualified to claim under either RA 660 (pension benefit, that is, 5
year lump sum pension and after 5 years, life time pension), or RA 1616 (gratuity benefit plus return of contribution), at his
option. The benefits under RA 660 are entirely payable by GSIS while those under RA 1616 are entirely shouldered by SSS except the
return of contribution by GSIS.
Resolution No. 56 came about upon observation that qualified SSS employees have invariably opted to retire under RA 1616 instead
of RA 660 because the total benefit under the former is much greater than the 5-year lump sum under the latter. As a consequence,
the SSS usually ended up virtually paying the entire retirement benefit, instead of GSIS which is the main insurance carrier for
government employees. Hence, the situation has become so expensive for SSS that a study of the problem became inevitable.
As a result of the study and upon the recommendation of its Actuary, the SSS Management recommended to the Social Security
Commission that retiring employees who are qualified to claim under either RA 660 or 1616 should be encouraged to avail for
themselves the life annuity under RA 660, as amended, with the SSS providing a financial assistance equivalent to
the difference between the benefit under RA 1616 (gratuity plus return of contribution) and the 5-year lump sum pension under RA
660.
The Social Security Commission, as the policy-making body of the SSS approved the recommendation in line with its mandate to
insure the efficient, honest andeconomical administration of the provisions and purposes of this Act. (Section 3 (c) of the Social
Security Law).
Necessarily, the situation was reversed with qualified SSS employees opting to retire under RA No. 660 or RA 1146 instead of RA
1616, resulting in substantial savings for the SSS despite its having to pay financial assistance.
Until Resolution No. 56 was questioned by COA. (underscoring part of original text; italics ours)
Although such financial assistance package may have been instituted for noble, altruistic purposes as well as from self-interest
and a desire to cut costs on the part of the SSS, nevertheless, it is beyond any dispute that such package effectively constitutes a
supplementary retirement plan. The fact that it was designed to equalize the benefits receivable from RA 1616 with those payable
under RA 660 and make the latter program more attractive, merely confirms the foregoing finding.
That the Res. 56 package is labelled financial assistance does not change its essential nature. Retirement benefits are, after
all, a form of reward for an employees loyalty and service to the employer, and are intended to help the employee enjoy the
remaining years of his life, lessening the burden of worrying about his financial support or upkeep.
[13]
On the other hand, a pension
partakes of the nature of retained wages of the retiree for a dual purpose: to entice competent people to enter the government
service, and to permit them to retire from the service with relative security, not only for those who have retained their vigor, but
more so for those who have been incapacitated by illness or accident.
[14]

Is SSS Resolution No. 56 then within the ambit of and thus proscribed by Sec. 28 (b) of CA 186 as amended by RA 4968?
We answer in the affirmative. Said Sec. 28 (b) as amended by RA 4968 in no uncertain terms bars the creation of any insurance
or retirement plan -- other than the GSIS -- for government officers and employees, in order to prevent the undue and inequitous
proliferation of such plans. It is beyond cavil that Res. 56 contravenes the said provision of law and is therefore invalid, void and of
no effect. To ignore this and rule otherwise would be tantamount to permitting every other government office or agency to put up
its own supplementary retirement benefit plan under the guise of such financial assistance.
We are not unmindful of the laudable purposes for promulgating Res. 56, and the positive results it must have had, not only in
reducing costs and expenses on the part of the SSS in connection with the pay-out of retirement benefits and gratuities, but also in
improving the quality of life for scores of retirees. But it is simply beyond dispute that the SSS had no authority to maintain and
implement such retirement plan, particularly in the face of the statutory prohibition. The SSS cannot, in the guise of rule-making,
legislate or amend laws or worse, render them nugatory.
It is doctrinal that in case of conflict between a statute and an administrative order, the former must prevail.
[15]
A rule or
regulation must conform to and be consistent with the provisions of the enabling statute in order for such rule or regulation to be
valid.
[16]
The rule-making power of a public administrative body is a delegated legislative power, which it may not use either to
abridge the authority given it by the Congress or the Constitution or to enlarge its power beyond the scope intended. Constitutional
and statutory provisions control with respect to what rules and regulations may be promulgated by such a body, as well as with
respect to what fields are subject to regulation by it. It may not make rules and regulations which are inconsistent with the
provisions of the Constitution or a statute, particularly the statute it is administering or which created it, or which are in derogation
of, or defeat, the purpose of a statute.
[17]
Though well-settled is the rule that retirement laws are liberally interpreted in favor of the
retiree,
[18]
nevertheless, there is really nothing to interpret in either RA 4968 or Res. 56, and correspondingly, the absence of any
doubt as to the ultra-vires nature and illegality of the disputed resolution constrains us to rule against petitioners.
As a necessary consequence of the invalidity of Res. 56, we can hardly impute abuse of discretion of any sort to respondent
Commission for denying petitioners request for reconsideration of the 3rd Indorsement of July 10, 1989. On the contrary, we hold
that public respondent in its assailed Decision acted with circumspection in denying petitioners claim. It reasoned thus:
After a careful evaluation of the facts herein obtaining, this Commission finds the instant request to be devoid of merit. It bears
stress that the financial assistance contemplated under SSS Resolution No. 56 is granted to SSS employees who opt to retire under
R.A. No. 660. In fact, by the aggrieved parties own admission (page 2 of the request for reconsideration dated January 12, 1993), it
is a financial assistance granted by the SSS management to its employees, in addition to the retirement benefits under Republic Act
No. 660. (underscoring supplied for emphasis) There is therefore no question, that the said financial assistance partakes of the
nature of a retirement benefit that has the effect of modifying existing retirement laws particularly R.A. No. 660.
Petitioners also asseverate that the scheme of financial assistance under Res. 56 may be likened to the monetary benefits of
government officials and employees who are paid, over and above their salaries and allowances as provided by statute, an
additional honorarium in varying amounts. We find this comparison baseless and misplaced. As clarified by the Solicitor General:
[19]

Petitioners comparison of SSS Resolution No. 56 with the honoraria given to government officials and employees of the National
Prosecution Service of the Department of Justice, Office of the Government Corporate Counsel and even in the Office of the
Solicitor General is devoid of any basis. The monetary benefits or honoraria given to these officials or employees are categorized as
travelling and/or representation expenses which are incurred by them in the course of handling cases, attending
court/administrative hearings, or performing other field work. These monetary benefits are given upon rendition of service while the
financial benefits under SSS Resolution No. 56 are given upon retirement from service.
In a last-ditch attempt to convince this Court that their position is tenable, petitioners invoke equity. They believe that they
are deserving of justice and equity in their quest for financial assistance under SSS Resolution No. 56, not so much because the SSS is
one of the very few stable agencies of government where no doubt this recognition and reputation is earned x x x but more so due
to the miserable scale of compensation granted to employees in various agencies to include those obtaining in the SSS.
[20]

We must admit we sympathize with petitioners in their financial predicament as a result of their misplaced decision to avail of
retirement benefits under RA 660, with the false expectation that financial assistance under the disputed Res. 56 will also
materialize. Nevertheless, this Court has always held that equity, which has been aptly described as justice outside legality, is
applied only in the absence of, and never against, statutory law or judicial rules of procedure.
[21]
In this case, equity cannot be
applied to give validity and effect to Res. 56, which directly contravenes the clear mandate of the provisions of RA 4968.
Likewise, we cannot but be aware that the clear imbalance between the benefits available under RA 660 and those under RA
1616 has created an unfair situation for it has shifted the burden of paying such benefits from the GSIS (the main insurance carrier of
government employees) to the SSS. Without the corrective effects of Res. 56, all retiring SSS employees without exception will be
impelled to avail of benefits under RA 1616. The cumulative effect of such availments on the financial standing and stability of the
SSS is better left to actuarians. But the solution or remedy for such situation can be provided only by Congress. Judicial hands
cannot, on the pretext of showing concern for the welfare of government employees, bestow equity contrary to the clear provisions
of law.
Nevertheless, insofar as herein petitioners are concerned, this Court cannot just sit back and watch as these two erstwhile
government employees, who after spending the best parts of their lives in public service have retired hoping to enjoy their
remaining years, face a financially dismal if not distressed future, deprived of what should have been due them by way of additional
retirement benefits, on account of a bureaucratic boo-boo improvidently hatched by their higher-ups. It is clear to our mind that
petitioners applied for benefits under RA 660 only because of the incentives offered by Res. 56, and that absent such incenti ves,
they would have without fail availed of RA 1616 instead. We likewise have no doubt that petitioners are simply innocent bystanders
in this whole bureaucratic rule-making/financial scheme-making drama, and that therefore, to the extent possible, petitioners ought
not be penalized or made to suffer as a result of the subsequently determined invalidity of Res. 56, the promulgation and
implementation of which they had nothing to do with.
And here is where equity may properly be invoked: since SSS employees who are qualified for compulsory retirement at age
65 or for optional retirement at a lower age are entitled to either the life annuity under R.A. 660, as amended, or the gratuity under
R.A. 1616, as amended,
[22]
it appears that petitioners, being qualified to avail of benefits under RA 660, may also readily qualify
under RA 1616. It would therefore not be misplaced to enjoin the SSS to render all possible assistance to petitioners for the prompt
processing and approval of their applications under RA 1616, and in the meantime, unless barred by existing regulations, to advance
to petitioners the difference between the amounts due under RA 1616, and the amounts they already obtained, if any, under RA
660.
WHEREFORE, the petition is hereby DISMISSED for lack of merit, there having been no grave abuse of discretion on the part of
respondent Commission. The assailed Decision of public respondent is AFFIRMED, and SSS Resolution No. 56 is hereby
declared ILLEGAL,VOID AND OF NO EFFECT. The SSS is hereby urged to assist petitioners and facilitate their applications under RA
1616, and to advance to them, unless barred by existing regulations, the corresponding amounts representing the difference
between the two benefits programs. No costs.
SO ORDERED.
Narvasa, C.J., Padilla, Regalado, Davide, Jr., Romero, Bellosillo, Melo, Puno, Vitug, Kapunan, Mendoza, Francisco, Hermosisima,
Jr.,and Torres, Jr., JJ., concur.