G.R. No.

L-63915 : December 29, 1986

LORENZO M. TA;ADA, ABRAHAM F. SARMIENTO, and MOVEMENT OF ATTORNEYS FOR
BROTHERHOOD, INTEGRITY AND NATIONALISM, INC. (MABINI), Petitioners, vs. HON.
JUAN C. TUVERA, in his capacity as Executive Assistant to the President, HON.
JOAQUIN VENUS, in his capacity as Deputy Executive Assistant to the President,
MELQUIADES P. DE LA CRUZ, ETC., ET AL., Respondents.
RESOLUTION
CRUZ, J.:
Due process was invoked by the petitioners in demanding the disclosure of a number of
presidential decrees which they claimed had not been published as required by law. The
government argued that while publication was necessary as a rule, it was not so when it was
"otherwise provided," as when the decrees themselves declared that they were to become
effective immediately upon their approval. In the decision of this case on April 24, 1985, the
Court affirmed the necessity for the publication of some of these decrees, declaring in the
dispositive portion as follows:
WHEREFORE, the Court hereby orders respondents to publish in the Official Gazette all
unpublished presidential issuances which are of general application, and unless so published,
they shall have no binding force and effect.
The petitioners are now before us again, this time to move for reconsideration/clarification of
that decision. 1 Specifically, they ask the following questions:
1. What is meant by "law of public nature" or "general applicability"?
2. Must a distinction be made between laws of general applicability and laws which are not?
3. What is meant by "publication"?
4. Where is the publication to be made?
5. When is the publication to be made?
Resolving their own doubts, the petitioners suggest that there should be no distinction between
laws of general applicability and those which are not; that publication means complete
publication; and that the publication must be made forthwith in the Official Gazette. 2
In the Comment 3 required of the then Solicitor General, he claimed first that the motion was a
request for an advisory opinion and should therefore be dismissed, and, on the merits, that the
clause "unless it is otherwise provided" in Article 2 of the Civil Code meant that the publication
required therein was not always imperative; that publication, when necessary, did not have to
be made in the Official Gazette; and that in any case the subject decision was concurred in only
by three justices and consequently not binding. This elicited a Reply 4 refuting these arguments.
Came next the February Revolution and the Court required the new Solicitor General to file a
Rejoinder in view of the supervening events, under Rule 3, Section 18, of the Rules of Court.
Responding, he submitted that issuances intended only for the internal administration of a
government agency or for particular persons did not have to be 'Published; that publication
when necessary must be in full and in the Official Gazette; and that, however, the decision
under reconsideration was not binding because it was not supported by eight members of this
Court. 5

The subject of contention is Article 2 of the Civil Code providing as follows:

ART. 2. Laws shall take effect after fifteen days following the completion of their publication in
the Official Gazette, unless it is otherwise provided. This Code shall take effect one year after
such publication.
After a careful study of this provision and of the arguments of the parties, both on the original
petition and on the instant motion, we have come to the conclusion and so hold, that the clause
"unless it is otherwise provided" refers to the date of effectivity and not to the requirement of
publication itself, which cannot in any event be omitted. This clause does not mean that the
legislature may make the law effective immediately upon approval, or on any other date,
without its previous publication.
Publication is indispensable in every case, but the legislature may in its discretion provide that
the usual fifteen-day period shall be shortened or extended. An example, as pointed out by the
present Chief Justice in his separate concurrence in the original decision, 6 is the Civil Code
which did not become effective after fifteen days from its publication in the Official Gazette but
"one year after such publication." The general rule did not apply because it was "otherwise
provided. "
It is not correct to say that under the disputed clause publication may be dispensed with
altogether. The reason. is that such omission would offend due process insofar as it would deny
the public knowledge of the laws that are supposed to govern the legislature could validly
provide that a law e effective immediately upon its approval notwithstanding the lack of
publication (or after an unreasonably short period after publication), it is not unlikely that
persons not aware of it would be prejudiced as a result and they would be so not because of a
failure to comply with but simply because they did not know of its existence, Significantly, this is
not true only of penal laws as is commonly supposed. One can think of many non-penal
measures, like a law on prescription, which must also be communicated to the persons they
may affect before they can begin to operate.
We note at this point the conclusive presumption that every person knows the law, which of
course presupposes that the law has been published if the presumption is to have any legal
justification at all. It is no less important to remember that Section 6 of the Bill of Rights
recognizes "the right of the people to information on matters of public concern," and this
certainly applies to, among others, and indeed especially, the legislative enactments of the
government.
The term "laws" should refer to all laws and not only to those of general application, for strictly
speaking all laws relate to the people in general albeit there are some that do not apply to them
directly. An example is a law granting citizenship to a particular individual, like a relative of
President Marcos who was decreed instant naturalization. It surely cannot be said that such a
law does not affect the public although it unquestionably does not apply directly to all the
people. The subject of such law is a matter of public interest which any member of the body
politic may question in the political forums or, if he is a proper party, even in the courts of
justice. In fact, a law without any bearing on the public would be invalid as an intrusion of
privacy or as class legislation or as an ultra vires act of the legislature. To be valid, the law must
invariably affect the public interest even if it might be directly applicable only to one individual,
or some of the people only, and t to the public as a whole.
We hold therefore that all statutes, including those of local application and private laws, shall be
published as a condition for their effectivity, which shall begin fifteen days after publication
unless a different effectivity date is fixed by the legislature.
Covered by this rule are presidential decrees and executive orders promulgated by the President
in the exercise of legislative powers whenever the same are validly delegated by the legislature

or, at present, directly conferred by the Constitution. administrative rules and regulations must
a also be published if their purpose is to enforce or implement existing law pursuant also to a
valid delegation.
Interpretative regulations and those merely internal in nature, that is, regulating only the
personnel of the administrative agency and not the public, need not be published. Neither is
publication required of the so-called letters of instructions issued by administrative superiors
concerning the rules or guidelines to be followed by their subordinates in the performance of
their duties.
Accordingly, even the charter of a city must be published notwithstanding that it applies to only
a portion of the national territory and directly affects only the inhabitants of that place. All
presidential decrees must be published, including even, say, those naming a public place after a
favored individual or exempting him from certain prohibitions or requirements. The circulars
issued by the Monetary Board must be published if they are meant not merely to interpret but
to "fill in the details" of the Central Bank Act which that body is supposed to enforce.
However, no publication is required of the instructions issued by, say, the Minister of Social
Welfare on the case studies to be made in petitions for adoption or the rules laid down by the
head of a government agency on the assignments or workload of his personnel or the wearing
of office uniforms. Parenthetically, municipal ordinances are not covered by this rule but by the
Local Government Code.
We agree that publication must be in full or it is no publication at all since its purpose is to
inform the public of the contents of the laws. As correctly pointed out by the petitioners, the
mere mention of the number of the presidential decree, the title of such decree, its
whereabouts (e.g., "with Secretary Tuvera"), the supposed date of effectivity, and in a mere
supplement of the Official Gazette cannot satisfy the publication requirement. This is not even
substantial compliance. This was the manner, incidentally, in which the General Appropriations
Act for FY 1975, a presidential decree undeniably of general applicability and interest, was
"published" by the Marcos administration. 7 The evident purpose was to withhold rather than
disclose information on this vital law.
Coming now to the original decision, it is true that only four justices were categorically for
publication in the Official Gazette 8 and that six others felt that publication could be made
elsewhere as long as the people were sufficiently informed. 9 One reserved his vote 10 and
another merely acknowledged the need for due publication without indicating where it should be
made. 11 It is therefore necessary for the present membership of this Court to arrive at a clear
consensus on this matter and to lay down a binding decision supported by the necessary vote.
There is much to be said of the view that the publication need not be made in the Official
Gazette, considering its erratic releases and limited readership. Undoubtedly, newspapers of
general circulation could better perform the function of communicating, the laws to the people
as such periodicals are more easily available, have a wider readership, and come out regularly.
The trouble, though, is that this kind of publication is not the one required or authorized by
existing law. As far as we know, no amendment has been made of Article 2 of the Civil Code.
The Solicitor General has not pointed to such a law, and we have no information that it exists. If
it does, it obviously has not yet been published.
At any rate, this Court is not called upon to rule upon the wisdom of a law or to repeal or modify
it if we find it impractical. That is not our function. That function belongs to the legislature. Our
task is merely to interpret and apply the law as conceived and approved by the political
departments of the government in accordance with the prescribed procedure. Consequently, we
have no choice but to pronounce that under Article 2 of the Civil Code, the publication of laws
must be made in the Official Gazett and not elsewhere, as a requirement for their effectivity
after fifteen days from such publication or after a different period provided by the legislature.

We also hold that the publication must be made forthwith or at least as soon as possible, to give
effect to the law pursuant to the said Article 2. There is that possibility, of course, although not
suggested by the parties that a law could be rendered unenforceable by a mere refusal of the
executive, for whatever reason, to cause its publication as required. This is a matter, however,
that we do not need to examine at this time.
Finally, the claim of the former Solicitor General that the instant motion is a request for an
advisory opinion is untenable, to say the least, and deserves no further comment.
The days of the secret laws and the unpublished decrees are over. This is once again an open
society, with all the acts of the government subject to public scrutiny and available always to
public cognizance. This has to be so if our country is to remain democratic, with sovereignty
residing in the people and all government authority emanating from them.
Although they have delegated the power of legislation, they retain the authority to review the
work of their delegates and to ratify or reject it according to their lights, through their freedom
of expression and their right of suffrage. This they cannot do if the acts of the legislature are
concealed.
Laws must come out in the open in the clear light of the sun instead of skulking in the shadows
with their dark, deep secrets. Mysterious pronouncements and rumored rules cannot be
recognized as binding unless their existence and contents are confirmed by a valid publication
intended to make full disclosure and give proper notice to the people. The furtive law is like a
scabbarded saber that cannot feint parry or cut unless the naked blade is drawn.
WHEREFORE, it is hereby declared that all laws as above defined shall immediately upon their
approval, or as soon thereafter as possible, be published in full in the Official Gazette, to
become effective only after fifteen days from their publication, or on another date specified by
the legislature, in accordance with Article 2 of the Civil Code.
SO ORDERED.
Teehankee, C.J., Feria, Yap, Narvasa, Melencio-Herrera, Alampay, Gutierrez, Jr., and
Paras, JJ., concur.
Separate Opinions
FERNAN, J., concurring:
While concurring in the Court's opinion penned by my distinguished colleague, Mr. Justice
Isagani A. Cruz, I would like to add a few observations. Even as a Member of the defunct
Batasang Pambansa, I took a strong stand against the insidious manner by which the previous
dispensation had promulgated and made effective thousands of decrees, executive orders,
letters of instructions, etc. Never has the law-making power which traditionally belongs to the
legislature been used and abused to satisfy the whims and caprices of a one-man legislative mill
as it happened in the past regime. Thus, in those days, it was not surprising to witness the sad
spectacle of two presidential decrees bearing the same number, although covering two different
subject matters. In point is the case of two presidential decrees bearing number 1686 issued on
March 19, 1980, one granting Philippine citizenship to Michael M. Keon the then President's
nephew and the other imposing a tax on every motor vehicle equipped with airconditioner. This
was further exacerbated by the issuance of PD No. 1686-A also on March 19, 1980 granting
Philippine citizenship to basketball players Jeffrey Moore and Dennis George Still
The categorical statement by this Court on the need for publication before any law may be
made effective seeks prevent abuses on the part of the lawmakers and, at the same time,

ensures to the people their constitutional right to due process and to information on matters of
public concern.
FELICIANO, J., concurring:
I agree entirely with the opinion of the court so eloquently written by Mr. Justice Isagani A.
Cruz. At the same time, I wish to add a few statements to reflect my understanding of what the
Court is saying.
A statute which by its terms provides for its coming into effect immediately upon approval
thereof, is properly interpreted as coming into effect immediately upon publication thereof in the
Official Gazette as provided in Article 2 of the Civil Code. Such statute, in other words, should
not be regarded as purporting literally to come into effect immediately upon its approval or
enactment and without need of publication. For so to interpret such statute would be to collide
with the constitutional obstacle posed by the due process clause. The enforcement of
prescriptions which are both unknown to and unknowable by those subjected to the statute, has
been throughout history a common tool of tyrannical governments. Such application and
enforcement constitutes at bottom a negation of the fundamental principle of legality in the
relations between a government and its people.
At the same time, it is clear that the requirement of publication of a statute in the Official
Gazette, as distinguished from any other medium such as a newspaper of general circulation, is
embodied in a statutory norm and is not a constitutional command. The statutory norm is set
out in Article 2 of the Civil Code and is supported and reinforced by Section 1 of Commonwealth
Act No. 638 and Section 35 of the Revised Administrative Code. A specification of the Official
Gazette as the prescribed medium of publication may therefore be changed. Article 2 of the Civil
Code could, without creating a constitutional problem, be amended by a subsequent statute
providing, for instance, for publication either in the Official Gazette or in a newspaper of general
circulation in the country. Until such an amendatory statute is in fact enacted, Article 2 of the
Civil Code must be obeyed and publication effected in the Official Gazette and not in any other
medium.

cralaw Endnotes:
1 Rollo pp. 242-250.
2 Ibid, pp. 244-248.
3 Id, pp. 271-280.
4 Id, pp. 288-299.
5 Id, pp. 320-322.
6 136 SCRA 27,46.
7 Rollo, p. 24,6.
8 Justices Venicio Escolin (ponente), Claudio Teehankee. Ameurfina Melencio-Herrera, and
Lorenzo Relova.

9 Chief Justice Enrique M. Fernando and Justices Felix V. Makasiar, Vicente Abad-Santos, Efren
1. Plana Serafin P. Cuevas. and Nestor B. Alampay.
10 Justice Hugo E. Gutierrez, Jr.
11 Justice B. S. de la Fuente.

FIRST DIVISION
G. R. No. 187587, June 05, 2013
NAGKAKAISANG MARALITA NG SITIO MASIGASIG, INC., Petitioner, v. MILITARY
SHRINE SERVICES PHILIPPINE VETERANS AFFAIRS OFFICE, DEPARTMENT OF
NATIONAL DEFENSE,Respondent.
RESOLUTION
[G. R. NO. 187654]
WESTERN BICUTAN LOT OWNERS ASSOCIATION, INC., REPRESENTED BY ITS BOARD
OF DIRECTORS, Petitioner, v. MILITARY SHRINE SERVICES PHILIPPINE VETERANS
AFFAIRS OFFICE, DEPARTMENT OF NATIONAL DEFENSE, Respondent.
DECISION
SERENO, C.J.:
Before us are consolidated Petitions for Review under Rule 45 of the Rules of Court assailing the
Decision1 promulgated on 29 April 2009 of the Court of Appeals in CA-G.R. SP No. 97925.
THE FACTS
The facts, as culled from the records, are as follows:cralavvonlinelawlibrary
On 12 July 1957, by virtue of Proclamation No. 423, President Carlos P. Garcia reserved parcels
of land in the Municipalities of Pasig, Taguig, Paraaque, Province of Rizal and Pasay City for a
military reservation. The military reservation, then known as Fort William McKinley, was later on
renamed Fort Andres Bonifacio (Fort Bonifacio).
On 28 May 1967, President Ferdinand E. Marcos (President Marcos) issued Proclamation No.
208, amending Proclamation No. 423, which excluded a certain area of Fort Bonifacio and
reserved it for a national shrine. The excluded area is now known as Libingan ng mga
Bayani, which is under the administration of herein respondent Military Shrine Services
Philippine Veterans Affairs Office (MSS-PVAO).
Again, on 7 January 1986, President Marcos issued Proclamation No. 2476, further amending
Proclamation No. 423, which excluded barangays Lower Bicutan, Upper Bicutan and Signal
Village from the operation of Proclamation No. 423 and declared it open for disposition under
the provisions of Republic Act Nos. (R.A.) 274 and 730.
At the bottom of Proclamation No. 2476, President Marcos made a handwritten addendum,
which reads:cralavvonlinelawlibrary
P.S. This includes Western Bicutan
(SGD.) Ferdinand E. Marcos2
The crux of the controversy started when Proclamation No. 2476 was published in the Official
Gazette3 on 3 February 1986, without the above-quoted addendum.
Years later, on 16 October 1987, President Corazon C. Aquino (President Aquino) issued
Proclamation No. 172 which substantially reiterated Proclamation No. 2476, as published, but

this time excluded Lots 1 and 2 of Western Bicutan from the operation of Proclamation No. 423
and declared the said lots open for disposition under the provisions of R.A. 274 and 730.
Memorandum Order No. 119, implementing Proclamation No. 172, was issued on the same day.
Through the years, informal settlers increased and occupied some areas of Fort Bonifacio
including portions of the Libingan ng mga Bayani. Thus, Brigadier General Fredelito Bautista
issued General Order No. 1323 creating Task Force Bantay (TFB), primarily to prevent further
unauthorized occupation and to cause the demolition of illegal structures at Fort Bonifacio.
On 27 August 1999, members of petitioner Nagkakaisang Maralita ng Sitio Masigasig, Inc.
(NMSMI) filed a Petition with the Commission on Settlement of Land Problems (COSLAP), where
it was docketed as COSLAP Case No. 99-434. The Petition prayed for the following: (1) the
reclassification of the areas they occupied, covering Lot 3 of SWO-13-000-298 of Western
Bicutan, from public land to alienable and disposable land pursuant to Proclamation No. 2476;
(2) the subdivision of the subject lot by the Director of Lands; and (3) the Land Management
Bureaus facilitation of the distribution and sale of the subject lot to its bona fide occupants. 4
On 1 September 2000, petitioner Western Bicutan Lot Owners Association, Inc. (WBLOAI) filed a
Petition-in-Intervention substantially praying for the same reliefs as those prayed for by NMSMI
with regard to the area the former then occupied covering Lot 7 of SWO-00-001302 in Western
Bicutan.5
Thus, on 1 September 2006, COSLAP issued a Resolution6 granting the Petition and declaring
the portions of land in question alienable and disposable, with Associate Commissioner Lina
Aguilar-General dissenting.7
The COSLAP ruled that the handwritten addendum of President Marcos was an integral part of
Proclamation No. 2476, and was therefore, controlling. The intention of the President could not
be defeated by the negligence or inadvertence of others. Further, considering that Proclamation
No. 2476 was done while the former President was exercising legislative powers, it could not be
amended, repealed or superseded, by a mere executive enactment. Thus, Proclamation No. 172
could not have superseded much less displaced Proclamation No. 2476, as the latter was issued
on October 16, 1987 when President Aquinos legislative power had ceased.
In her Dissenting Opinion, Associate Commissioner Lina Aguilar-General stressed that pursuant
to Article 2 of the Civil Code, publication is indispensable in every case. Likewise, she held that
when the provision of the law is clear and unambiguous so that there is no occasion for the
court to look into legislative intent, the law must be taken as it is, devoid of judicial addition or
subtraction.8 Finally, she maintained that the Commission had no authority to supply the
addendum originally omitted in the published version of Proclamation No. 2476, as to do so
would be tantamount to encroaching on the field of the legislature.
Herein respondent MSS-PVAO filed a Motion for Reconsideration,9 which was denied by the
COSLAP in a Resolution dated 24 January 2007.10
MSS-PVAO filed a Petition with the Court of Appeals seeking to reverse the COSLAP Resolutions
dated 1 September 2006 and 24 January 2007.
Thus, on 29 April 2009, the then Court of Appeals First Division rendered the assailed Decision
granting MSS-PVAOs Petition, the dispositive portion of which reads:cralavvonlinelawlibrary
IN VIEW OF ALL THE FOREGOING, the instant petition is hereby GRANTED. The Resolutions
dated September 1, 2006 and January 24, 2007 issued by the Commission on the Settlement of
Land Problems in COSLAP Case No. 99-434 are herebyREVERSED and SET ASIDE. In lieu
thereof, the petitions of respondents in COSLAP Case No. 99-434 are DISMISSED, for lack of
merit, as discussed herein. Further, pending urgent motions filed by respondents are
likewise DENIED.

SO ORDERED.11 (Emphasis in the original)

Both NMSMI12 and WBLOAI13 appealed the said Decision by filing their respective Petitions for
Review with this Court under Rule 45 of the Rules of Court.
THE ISSUES
Petitioner NMSMI raises the following issues:cralavvonlinelawlibrary
I
WHETHER OR NOT THE HONORABLE COURT OF APPEALS SERIOUSLY ERRED IN RULING THAT
PROCLAMATION NO. 2476 DID NOT INCLUDE ANY PORTION OF WESTERN BICUTAN AS THE
HANDWRITTEN NOTATION BY PRESIDENT MARCOS ON THE SAID PROCLAMATION WAS NOT
PUBLISHED IN THE OFFICIAL GAZETTE.
II
WHETHER OR NOT THE HONORABLE COURT OF APPEALS SERIOUSLY ERRED IN RULING THAT
PROCLAMATION NO. 172 LIKEWISE EXCLUDED THE PORTION OF LAND OCCUPIED BY MEMBER
OF HEREIN PETITIONER.
III
WHETHER OR NOT THE HONORABLE COURT OF APPEALS ERRED IN NOT CONSIDERING THAT
THE HON. COSLAP HAS BROAD POWERS TO RECOMMEND TO THE PRESIDENT INNOVATIVE
MEASURES TO RESOLVE EXPEDITIOUSLY VARIOUS LAND CASES.14
On the other hand, petitioner WBLOAI raises this sole issue:cralavvonlinelawlibrary
WHETHER OR NOT THE HONORABLE COURT OF APPEALS ERRED IN HOLDING THAT THE
SUBJECT PROPERTY WAS NOT DECLARED ALIENABLE AND DISPOSABLE BY VIRTUE OF
PROCLAMATION NO. 2476 BECAUSE THE HANDWRITTEN ADDENDUM OF PRESIDENT
FERDINAND E. MARCOS INCLUDING WESTERN BICUTAN IN PROCLAMATION NO. 2476 WAS
NOT INCLUDED IN THE PUBLICATION.15
Both Petitions boil down to the principal issue of whether the Court of Appeals erred in ruling
that the subject lots were not alienable and disposable by virtue of Proclamation No. 2476 on
the ground that the handwritten addendum of President Marcos was not included in the
publication of the said law.
THE COURTS RULING
We deny the Petitions for lack of merit.
Considering that petitioners were occupying Lots 3 and 7 of Western Bicutan (subject lots), their
claims were anchored on the handwritten addendum of President Marcos to Proclamation No.
2476. They allege that the former President intended to include all Western Bicutan in the
reclassification of portions of Fort Bonifacio as disposable public land when he made a notation
just below the printed version of Proclamation No. 2476.
However, it is undisputed that the handwritten addendum was not included when Proclamation
No. 2476 was published in the Official Gazette.
The resolution of whether the subject lots were declared as reclassified and disposable lies in
the determination of whether the handwritten addendum of President Marcos has the force and
effect of law. In relation thereto, Article 2 of the Civil Code expressly
provides:cralavvonlinelawlibrary

ART. 2. Laws shall take effect after fifteen days following the completion of their publication in
the Official Gazette, unless it is otherwise provided. This Code shall take effect one year after
such publication.
Under the above provision, the requirement of publication is indispensable to give effect to the
law, unless the law itself has otherwise provided. The phrase unless otherwise provided refers
to a different effectivity date other than after fifteen days following the completion of the laws
publication in the Official Gazette, but does not imply that the requirement of publication may
be dispensed with. The issue of the requirement of publication was already settled in the
landmark case Taada v. Hon. Tuvera,16 in which we had the occasion to rule
thus:cralavvonlinelawlibrary
Publication is indispensable in every case, but the legislature may in its discretion
provide that the usual fifteen-day period shall be shortened or extended. An example,
as pointed out by the present Chief Justice in his separate concurrence in the original decision,
is the Civil Code which did not become effective after fifteen days from its publication in the
Official Gazette but one year after such publication. The general rule did not apply because it
was otherwise provided.
It is not correct to say that under the disputed clause publication may be dispensed with
altogether. The reason is that such omission would offend due process insofar as it would deny
the public knowledge of the laws that are supposed to govern it. Surely, if the legislature could
validly provide that a law shall become effective immediately upon its approval notwithstanding
the lack of publication (or after an unreasonably short period after publication), it is not unlikely
that persons not aware of it would be prejudiced as a result; and they would be so not because
of a failure to comply with it but simply because they did not know of its existence. Significantly,
this is not true only of penal laws as is commonly supposed. One can think of many non-penal
measures, like a law on prescription, which must also be communicated to the persons they
may affect before they can begin to operate.
xxxx
The term "laws" should refer to all laws and not only to those of general application, for strictly
speaking all laws relate to the people in general albeit there are some that do not apply to them
directly. An example is a law granting citizenship to a particular individual, like a relative of
President Marcos who was decreed instant naturalization. It surely cannot be said that such a
law does not affect the public although it unquestionably does not apply directly to all the
people. The subject of such law is a matter of public interest which any member of the
body politic may question in the political forums or, if he is a proper party, even in the
courts of justice. In fact, a law without any bearing on the public would be invalid as an
intrusion of privacy or as class legislation or as an ultra vires act of the legislature. To be valid,
the law must invariably affect the public interest even if it might be directly applicable only to
one individual, or some of the people only, and not to the public as a whole.
We hold therefore that all statutes, including those of local application and private laws,
shall be published as a condition for their effectivity, which shall begin fifteen days
after publication unless a different effectivity date is fixed by the legislature.
Covered by this rule are presidential decrees and executive orders promulgated by the
President in the exercise of legislative powers whenever the same are validly delegated by
the legislature or, at present, directly conferred by the Constitution. Administrative rules and
regulations must also be published if their purpose is to enforce or implement existing law
pursuant also to a valid delegation.
xxxx
Accordingly, even the charter of a city must be published notwithstanding that it applies to only
a portion of the national territory and directly affects only the inhabitants of that place. All
presidential decrees must be published, including even, say, those naming a public place

after a favored individual or exempting him from certain prohibitions or requirements. The
circulars issued by the Monetary Board must be published if they are meant not merely to
interpret but to "fill in the details" of the Central Bank Act which that body is supposed to
enforce.
xxxx
We agree that the publication must be in full or it is no publication at all since its
purpose is to inform the public of the contents of the laws. As correctly pointed out by
the petitioners, the mere mention of the number of the presidential decree, the title of such
decree, its whereabouts (e.g., "with Secretary Tuvera"), the supposed date of effectivity, and in
a mere supplement of the Official Gazette cannot satisfy the publication requirement. This is not
even substantial compliance. This was the manner, incidentally, in which the General
Appropriations Act for FY 1975, a presidential decree undeniably of general applicability and
interest, was "published" by the Marcos administration. The evident purpose was to withhold
rather than disclose information on this vital law.
xxxx
Laws must come out in the open in the clear light of the sun instead of skulking in the shadows
with their dark, deep secrets. Mysterious pronouncements and rumored rules cannot be
recognized as binding unless their existence and contents are confirmed by a valid
publication intended to make full disclosure and give proper notice to the people. The
furtive law is like a scabbarded saber that cannot feint, parry or cut unless the naked blade is
drawn. (Emphases supplied)
Applying the foregoing ruling to the instant case, this Court cannot rely on a handwritten note
that was not part of Proclamation No. 2476 as published. Without publication, the note never
had any legal force and effect.
Furthermore, under Section 24, Chapter 6, Book I of the Administrative Code, [t]he publication
of any law, resolution or other official documents in the Official Gazette shall be prima facie
evidence of its authority. Thus, whether or not President Marcos intended to include Western
Bicutan is not only irrelevant but speculative. Simply put, the courts may not speculate as to
the probable intent of the legislature apart from the words appearing in the law.17 This Court
cannot rule that a word appears in the law when, evidently, there is none. In Pagpalain Haulers,
Inc. v. Hon. Trajano,18 we ruled that [u]nder Article 8 of the Civil Code, [j]udicial decisions
applying or interpreting the laws or the Constitution shall form a part of the legal system of the
Philippines. This does not mean, however, that courts can create law. The courts exist for
interpreting the law, not for enacting it. To allow otherwise would be violative of the principle of
separation of powers, inasmuch as the sole function of our courts is to apply or interpret the
laws, particularly where gaps or lacunae exist or where ambiguities becloud issues, but it will
not arrogate unto itself the task of legislating. The remedy sought in these Petitions is not
judicial interpretation, but another legislation that would amend the law to include petitioners
lots in the reclassification.
WHEREFORE, in view of the foregoing, the instant petitions are hereby DENIED for lack of
merit. The assailed Decision of the Court of Appeals in CA-G.R. CV No. 97925 dated 29 April
2009 isAFFIRMED in toto. Accordingly, this Courts status quo order dated 17 June 2009 is
hereby LIFTED. Likewise, all pending motions to cite respondent in contempt
is DENIED, having been rendered moot. No costs.
SO ORDERED.
Leonardo-De Castro, Bersamin, Villarama, Jr., and Reyes, JJ., concur.

Endnotes:

Penned by Presiding Justice Conrado M. Vasquez, Jr., with Associate Justices Jose C. Mendoza
(now a member of this Court) and Ramon M. Bato, Jr., concurring, rollo (G.R. No. 187587), pp.
62-82.cralawlibrary
1

CA rollo, p. 664.cralawlibrary

Vol. 82, No. 5, pp. 801-805.cralawlibrary

Supra note 2, at 68-69.cralawlibrary

Id. at 72-76.cralawlibrary

Id. at 205-212.cralawlibrary

Id. at 213-218.cralawlibrary

Insular Lumber Co. v. Court of Tax Appeals, 192 Phil. 221, 231 (1981).cralawlibrary
CA rollo, pp. 112-113.cralawlibrary

10

Id. at pp. 219-222.cralawlibrary

11

Id. at 1285.cralawlibrary

12

Rollo (G.R. No. 187587), pp. 39-61.cralawlibrary

13

Rollo (G.R. No. 187654), pp. 3-26.cralawlibrary

14

Rollo (G.R. No. 187587), p. 47.cralawlibrary

15

Rollo (G.R. No. 187654 ), pp. 15-16.cralawlibrary

16

17

18

230 Phil. 528, 533-538 (1986).cralawlibrary

Aparri v. CA, 212 Phil. 215, 224 (1984).cralawlibrary
369 Phil. 617, 626 (1999).

SECOND DIVISION
[G.R. No. 104215. May 8, 1996.]
ERECTORS, INC., Petitioner, v. NATIONAL LABOR RELATIONS COMMISSION, HON.
JULIO ANDRES, JR. and FLORENCIO BURGOS, Respondents.
SYLLABUS
1. REMEDIAL LAW; JURISDICTION; JURISDICTION OVER THE SUBJECT MATTER, DETERMINED
BY LAW IN FORCE AT THE COMMENCEMENT OF ACTION; LABOR ARBITER HAS JURISDICTION
OVER MONEY CLAIMS OF OVERSEAS WORKER FILED ON MARCH 31, 1982. The rule is that
jurisdiction over the subject matter is determined by the law in force at the time of the
commencement of the action. On March 31, 1982, at the time private respondent filed his
complaint against the petitioner, the prevailing laws were Presidential Decree No. 1691 and
Presidential Decree No. 1391 which vested the Regional Offices of the Ministry of Labor and the
Labor Arbiters with "original and exclusive jurisdiction over all cases involving employeremployee relations including money claims arising out of any law or contracts involving Filipino
workers for overseas employment." At the time of the filing of the complaint, the Labor Arbiter
had clear jurisdiction over the same.
2. LABOR AND SOCIAL LEGISLATION; EXECUTIVE ORDER NO. 797 CREATING THE PHILIPPINE
OVERSEAS EMPLOYMENT ADMINISTRATION (POEA); WITHOUT RETROACTIVE APPLICATION;
LABOR ARBITER NOT DIVESTED OF JURISDICTION BY EFFECTIVITY OF E.O. 797. E.O. No.
797 did not divest the Labor Arbiters authority to hear and decide the case filed by private
respondent prior to its effectivity. Laws should only be applied prospectively unless the
legislative intent to give them retroactive effect is expressly declared or is necessarily implied
from the language used. We fail to perceive in the language of E.O. No. 797 an intention to give
it retroactive effect. The law at bar, E.O. No. 797, is not a curative statute. It was not intended
to remedy any defect in the law. It created the POEA to assume the functions of the Overseas
Employment Development Board, the National Seamen Board and the overseas employment
functions of the Bureau of Employment Services. Accordingly, it gave the POEA "original and
exclusive jurisdiction over all cases, including money claims, involving employer-employee
relations arising out of or by virtue of any law or contract involving Filipino workers for overseas
employment, including seamen." The rule on prospectivity of laws should therefore apply to
E.O. No. 797. It should not affect jurisdiction over cases filed prior to its effectivity.
3. STATUTORY CONSTRUCTION; STATUTES; CURATIVE STATUTE; DEFINED. A curative
statute is enacted to cure defects in a prior law or to validate legal proceedings, instruments or
acts of public authorities which would otherwise be void for want of conformity with certain
existing legal requirements.
DECISION
PUNO, J.:
Petitioner Erectors, Inc. challenges the jurisdiction of respondent Labor Arbiter Julio F. Andres,
Jr. to hear and decide the complaint 1 for underpayment of wages and non-payment of overtime
pay filed by private respondent Florencio Burgos, an overseas contract worker.
The facts are undisputed:chanrob1es virtual 1aw library
In September 1979, petitioner recruited private respondent to work as service contract driver in

Saudi Arabia for a period of twelve (12) months with a salary of US$165.00 and an allowance of
US$165.00 per month. They further agreed that private respondent shall be entitled to a bonus
of US$1,000.00 if after the 12- month period, he renews or extends his employment contract
without availing of his vacation or home leave. Their contract dated September 20, 1979, was
duly approved by the Ministry of Labor and Employment.
The aforesaid contract was not implemented. In December, 1979, petitioner notified private
respondent that the position of service driver was no longer available. On December 14, 1979,
they executed another contract which changed the position of private respondent into that of
helper/laborer with a salary of US$105.00 and an allowance of US$105.00 per month. The
second contract was not submitted to the Ministry of Labor and Employment for approval.
On December 18, 1979, private respondent left the country and worked at petitioners Buraidah
Sports Complex project in Saudi Arabia, performing the job of a helper/laborer. He received a
monthly salary and allowance of US$210.00, in accordance with the second contract. Private
respondent renewed his contract of employment after one year. His salary and allowance were
increased to US$231.00.
Private respondent returned to the Philippines on August 24, 1981. He then invoked his first
employment contract. He demanded from the petitioner the difference between his salary and
allowance as indicated in the said contract, and the amount actually paid to him, plus the
contractual bonus which should have been awarded to him for not availing of his vacation or
home leave credits. Petitioner denied private respondents claim.
On March 31, 1982, private respondent filed with the Labor Arbiter a complaint against the
petitioner for underpayment of wages and non-payment of overtime pay and contractual bonus.
On May 1, 1982, while the case was still in the conciliation stage, Executive Order (E.O.) No.
797 creating the Philippine Overseas Employment Administration (POEA) took effect. Section
4(a) of E.O. No. 797 vested the POEA with "original and exclusive jurisdiction over all cases,
including money claims, involving employer-employee relations arising out of or by virtue of any
law or contract involving Filipino workers for overseas employment." 2
Despite E.O. No. 797, respondent Labor Arbiter proceeded to try the case on the merits. On
September 23, 1983, he rendered a Decision 3 in favor of private respondent, the dispositive
portion of which reads:jgc:chanrobles.com.ph
"WHEREFORE, judgment is hereby rendered ordering the respondent to pay the complainant as
follows:chanrob1es virtual 1aw library
1. The sum of US$2,496.00 in its peso equivalent on August 25, 1981 as difference between his
allowance as Service Driver as against his position as Helper/Laborer;
2. The sum of US$1,000.00 in its peso equivalent as of the same date, as his contractual bonus.
The complaints for non-payment/underpayment of overtime pay and unpaid wages or
commission are DISMISSED for lack of merit." 4
Petitioner appealed to respondent National Labor Relations Commission (NLRC). It questioned
the jurisdiction of the Labor Arbiter over the case in view of the enactment of E.O. No. 797.
In a Resolution dated July 17, 1991, 5 respondent NLRC dismissed the petitioners appeal and
upheld the Labor Arbiters jurisdiction. It ruled:jgc:chanrobles.com.ph
"To begin with, the Labor Arbiter has the authority to decide this case. On May 29, 1978, the
Labor Arbiters were integrated into the Regional Offices under P.D. 1391. On May 1, 1980, P.D.
1691 was promulgated giving the Regional Offices of the Ministry of Labor and Employment the

original and exclusive jurisdiction over all cases arising out of or by virtue of any law or contract
involving Filipino workers for overseas employment. There is no dispute that the Labor Arbiter
had the legal authority over the case on hand, which accrued and was filed when the two above
mentioned Presidential Decrees were in force." 6
Petitioner filed this special civil action for certiorari reiterating the argument
that:jgc:chanrobles.com.ph
"The NLRC committed grave abuse of discretion tantamount to lack of jurisdiction in affirming
the Labor Arbiters void judgment in the case a quo." 7
It asserts that E.O. No. 797 divested the Labor Arbiter of his authority to try and resolve cases
arising from overseas employment contract. Invoking this Courts ruling in Briad Agro
Development Corp. v. Dela Cerna, 8 petitioner argues that E.O. No. 797 applies retroactively to
affect pending cases, including the complaint filed by private Respondent.
The petition is devoid of merit.
The rule is that jurisdiction over the subject matter is determined by the law in force at the time
of the commencement of the action. 9 On March 31, 1982, at the time private respondent filed
his complaint against the petitioner, the prevailing laws were Presidential Decree No. 1691 10
and Presidential Decree No. 1391 11 which vested the Regional Offices of the Ministry of Labor
and the Labor Arbiters with "original and exclusive jurisdiction over all cases involving employeremployee relations including money claims arising out of any law or contracts involving Filipino
workers for overseas employment." 12 At the time of the filing of the complaint, the Labor
Arbiter had clear jurisdiction over the same.
E.O. No. 797 did not divest the Labor Arbiters authority to hear and decide the case filed by
private respondent prior to its effectivity. Laws should only be applied prospectively unless the
legislative intent to give them retroactive effect is expressly declared or is necessarily implied
from the language used. 13 We fail to perceive in the language of E.O. No. 797 an intention to
give it retroactive effect.
The case of Briad Agro Development Corp. v. Dela Cerna 14 cited by the petitioner is not
applicable to the case at bar. In Briad, the Court applied the exception rather than the general
rule. In this case, Briad Agro Development Corp. and L.M. Camus Engineering Corp. challenged
the jurisdiction of the Regional Director of the Department of Labor and Employment over cases
involving workers money claims, since Article 217 of the Labor Code, the law in force at the
time of the filing of the complaint, vested in the Labor Arbiters exclusive jurisdiction over such
cases. The Court dismissed the petition in its Decision dated June 29, 1989. 15 It ruled that the
enactment of E.O. No. 111, amending Article 217 of the Labor Code, cured the Regional
Directors lack of jurisdiction by giving the Labor Arbiter and the Regional Director concurrent
jurisdiction over all cases involving money claims. However, on November 9, 1989, the Court, in
a Resolution, 16 reconsidered and set aside its June 29 Decision and referred the case to the
Labor Arbiter for proper proceedings, in view of the promulgation of Republic Act (R.A.) 6715
which divested the Regional Directors of the power to hear money claims. It bears emphasis
that the Court accorded E.O. No. 111 and R.A. 6715 a retroactive application because as
curative statutes, they fall under the exceptions to the rule on prospectivity of laws.
E.O. No. 111, amended Article 217 of the Labor Code to widen the workers access to the
government for redress of grievances by giving the Regional Directors and Labor Arbiters
concurrent jurisdiction over cases involving money claims. This amendment, however, created a
situation where the jurisdiction of the Regional Directors and the Labor Arbiters overlapped. As
a remedy, R.A. 6715 further amended Article 217 by delineating their respective jurisdictions.
Under R.A. 6715, the Regional Director has exclusive original jurisdiction over cases involving
money claims provided: (1) the claim is presented by an employer or person employed in
domestic or household service, or househelper under the Code; (2) the claimant, no longer

being employed, does not seek reinstatement; and (3) the aggregate money claim of the
employee or househelper does not exceed P5,000.00. All other cases are within the exclusive
and original jurisdiction of the Labor Arbiter. E.O. No. 111 and R.A. 6715 are therefore curative
statutes. A curative statute is enacted to cure defects in a prior law or to validate legal
proceedings, instruments or acts of public authorities which would otherwise be void for want of
conformity with certain existing legal requirements.
The law at bar, E.O. No. 797, is not a curative statute. It was not intended to remedy any defect
in the law. It created the POEA to assume the functions of the Overseas Employment
Development Board, the National Seamen Board and the overseas employment functions of the
Bureau of Employment Services. Accordingly, it gave the POEA "original and exclusive
jurisdiction over all cases, including money claims, involving employer-employee relations
arising out of or by virtue of any law or contract involving Filipino workers for overseas
employment, including seamen." 17 The rule on prospectivity of laws should therefore apply to
E.O. No. 797. It should not affect jurisdiction over cases filed prior to its effectivity.
Our ruling in Philippine-Singapore Ports Corp. v. NLRC 18 is more apt to the case at bar. In this
case, PSPC hired Jardin to work in Saudi Arabia. Jardin filed a complaint against PSPC for illegal
dismissal and recovery of backwages on January 31, 1979 with the Labor Arbiter. PSPC
questioned the jurisdiction of the Labor Arbiter because at that time, the power to hear and
decide cases involving overseas workers was vested in the Bureau of Employment Services. We
held:jgc:chanrobles.com.ph
"When Jardin filed the complaint for illegal dismissal on January 31, 1979, Art. 217 (5) of the
Labor Code provided that Labor Arbiters and the NLRC shall have exclusive jurisdiction to hear
and decide all cases arising from employer-employee relations unless expressly excluded by
this Code. At that time Art. 15 of the same Code had been amended by P.D. No. 1412 which
took effect on June 9, 1978. The pertinent provision of the said presidential decree
states:chanrob1es virtual 1aw library
ARTICLE 15. Bureau of Employment Services.
(a) . . .
(b) The Bureau shall have the original and exclusive jurisdiction over all matters or cases
involving employer-employee relations including money claims, arising out of or by virtue of any
law or contracts involving Filipino workers for overseas employment, except seamen. The
decisions of the Bureau shall be final and executory subject to appeal to the Secretary of Labor
whose decision shall be final and inappealable.
Considering that private respondent Jardins claims undeniably arose out of an employeremployee relationship with petitioner PSPC and that private respondent worked overseas or in
Saudi Arabia, the Bureau of Employment Services and not the Labor Arbiter had jurisdiction
over the case. . . .
Art. 15 was further amended by P.D. No. 1691 which took effect on May 1, 1990. Such
amendment qualifies the jurisdiction of the Bureau of Employment Services as
follows:chanrob1es virtual 1aw library
(b) The regional offices of the Ministry of Labor shall have the original and exclusive jurisdiction
over all matters or cases involving employer-employee relations including money claims, arising
out of or by virtue of any law or contracts involving Filipino workers for overseas employment
except seamen: Provided that the Bureau of Employment Services may, in the case of the
National Capital Region, exercise such power, whenever the Minister of Labor deems it
appropriate. The decisions of the regional offices or the Bureau of Employment Services if so
authorized by the Minister of Labor as provided in this Article, shall be appealable to the
National Labor Relations Commission upon the same grounds provided in Article 223 hereof. The

decisions of the National Labor Relations Commission shall be final and inappealable.
Hence, as further amended, Art. 15 provided for concurrent jurisdiction between the regional
offices of the then Ministry of Labor and Bureau of Employment Services in the National Capital
Region. It is noteworthy that P.D. No. 1691, while likewise amending Art. 217 of the Labor
Code, did not alter the provision that Labor Arbiters shall have jurisdiction over all claims arising
from employer-employee relations unless expressly excluded by this Code.
The functions of the Bureau of Employment Services were subsequently assumed by the
Philippine Overseas Employment Administration (POEA) on May 1, 1982 by virtue of Executive
Order No. 797 by granting the POEA original and exclusive jurisdiction over all cases, including
money claims, involving employer-employee relations arising out of or by virtue of any law or
contract involving Filipino workers for overseas employment, including seamen. (Sec. 4 (a);
Eastern Shipping Lines v. Philippine Overseas Employment Administration [POEA], 200 SCRA
663 [1991]). This development showed the legislative authoritys continuing intent to exclude
from the Labor Arbiters jurisdiction claims arising from overseas employment.
These amendments notwithstanding, when the complaint for illegal dismissal was filed on
January 31, 1979, under Art. 15, as amended by P.D. No. 1412, it was the Bureau of
Employment Services which had jurisdiction over the case and not the Labor Arbiters. It is a
settled rule that jurisdiction is determined by the statute in force at the time of the
commencement of the action (Municipality of Sogod v. Rosal, 201 SCRA 632, 637 [1991]). P.D.
1691 which gave the regional offices of the Ministry of Labor concurrent jurisdiction with the
Bureau of Employment Services, was promulgated more than a year after the complaint was
filed.(Emphasis supplied)
In sum, we hold that respondent NLRC did not commit grave abuse of discretion in upholding
the jurisdiction of respondent Labor Arbiter over the complaint filed by private respondent
against the petitioner.
IN VIEW WHEREOF, the Petition is DISMISSED. Costs against petitioner.
SO ORDERED.
Regalado, Romero, Mendoza and Torres, Jr., JJ., concur.
Endnotes:

1. Docketed as NLRC-NCR-3-3142-82.
2. Official Gazette, Vol. 78, No. 21, May 24, 1982, pp. 2368-7 2638-13.
3. Rollo, pp. 13-23.
4. Rollo, p. 23.
5. Rollo, pp. 26-30.
6. Rollo, p. 28.
7. Rollo, p. 7.
8. 179 SCRA 269, November 9, 1989.
9. Tiongson v. Court of Appeals, 214 SCRA 197 (1992).

10. Took effect on May 1, 1980.

11. Took effect on May 29, 1978.
12. Article 15 (b) of the Labor Code, as amended by P.D. 1691 and P.D. 1391.
13. Article 4, New Civil Code; Gallardo v. Borromeo, 161 SCRA 500 (1988); Nilo v. Court of
Appeals, 128 SCRA 519 (1984).
14. 179 SCRA 269 (November 9, 1989).
15. 174 SCRA 525.
16. 179 SCRA 269.
17. Section 4 of Executive Order No. 797.
18. 218 SCRA 77 (1993).

FIRST DIVISION
[G.R. NO. 147964. January 20, 2004]
FAR EAST BANK & TRUST CO., Petitioner, v. ARTURO L. MARQUEZ, Respondent.
DECISION
PANGANIBAN, J.:
Under PD 957, the mortgage of a subdivision lot or a condominium unit is void, if executed by a
property developer without the prior written approval of the Housing and Land Use Regulatory
Board (HLURB). That an encumbrance has been constituted over an entire property, of which
the subject lot or unit is merely a part, does not affect the invalidity of the lien over the specific
portion at issue.
The Case
Before us is a Petition for Review1 under Rule 45 of the Rules of Court, assailing the April 27,
2001 Decision2 of the Court of Appeals (CA) in CA-GR SP No. 56813. The decretal portion of the
Decision reads as follows:rbl rl l lbrr
WHEREFORE, the Petition for Review is DENIED, for lack of merit.3
The Facts
The undisputed facts of the case are summarized in the CA Decision as
follows:rbl rl l lbrr
1. On 13 March 1989, respondent [Arturo] Marquez entered into a Contract to Sell with
Transamerican Sales and Exposition (TSE), through the latters Owner/General Manager Engr.
Jesus Garcia, involving a 52.5 sq. m. lot in Diliman, Quezon City with a three-storey townhouse
unit denominated as Unit No. 10 to be constructed thereon for a total consideration
of P800,000.00. The parcel of land in question is a portion of that property covered by TCT No.
156254 (now TCT No. 383697).
2. On 22 May 1989, TSE obtained a loan from petitioner FEBTC in the amount ofP7,650,000.00
and mortgaged the property covered by TCT No. 156254.
3. For failure of TSE to pay its obligation, petitioner FEBTC extrajudicially foreclosed the real
estate mortgage and became the highest bidder (P15.7 million) in the auction sale conducted
for the purpose.
4. Respondent had already paid a total of P600,000.00 when he stopped payment because the
construction of his townhouse unit slackened. He discovered later on that this was due to the
foreclosure.
"5. Consequently, [respondent] instituted a case with the Office of Appeals, Adjudication and
Legal Affairs (OAALA) of the Housing and Land Use Regulatory Board (HLURB) on 29 January
1991 entitled Arturo Marquez v. Transamerican Sales, et al docketed as HLRB Case No. REM012991-4712 to compel TSE to complete the construction of the townhouse and to prevent the
enforceability of the extra-judicial foreclosure made by petitioner FEBTC and to have the
mortgage between TSE and petitioner FEBTC declared invalid, said mortgage having been
entered into by the parties in violation of section 18 of P.D. 957.

6. The OAALA ruled in favor of the respondent via a Decision dated 11 November 1991, the
decretal portion of which reads as follows:rbl rl l lbrr
WHEREFORE, premises considered, judgment is hereby rendered as
follows:rbl rl l lbrr
1. Declaring the mortgage executed by and between x x x Engr. Jesus Garcia/Transamerican
Sales and Exposition and Far East Bank and Trust Company to be unenforceable against
[respondent];chanroblesvirtuallawlibrary
2. Ordering the x x x Far East Bank and Trust Company to compute and/or determine the loan
value of the [respondent] who was not able to complete or make full payment and accept
payment and/or receive the amortization from the [respondent] and upon full payment to
deliver the title corresponding to Unit No. 10 of that Townhouse Project located at No. 10 Panay
Ave., Quezon City;chanroblesvirtuallawlibrary
3. Ordering the Register of Deeds of Quezon City to cancel the annotations of the mortgage
indebtedness between x x x Engr. Jesus Garcia and Far East Bank and Trust
Company;chanroblesvirtuallawlibrary
4. Ordering, likewise, the Register of Deeds of Quezon City to cancel the annotation of the
Certificate of Sale in favor of the Far East Bank and Trust Company on Transfer Certificate of
Title No. 156254 to which the lot subject of this case is a part thereof, without prejudice to its
right to require x x x Engr. Jesus Garcia/Transamerican Sales and Exposition to constitute new
collateral in lieu of said title sufficient in value to cover the mortgage obligation.
xxx xxxxx x
7. Petitioner FEBTC interposed a Petition for Review from the decision issued by the OAALA with
the Board of Commissioners of the HLURB, docketed as HLRB Case No. REM-A-1126, which in a
Decision dated 18 July 1994 affirmed in toto the OAALA decision.
8. Hence, petitioner FEBTC appealed the Decision dated 18 July 1994 to the Office of the
President xxx. crvll
xxx xxxxx x
9. The Office of the President dismissed the appeal and affirmed the Decision dated 18 July
1994 x x x.4 (Citations omitted) chanroblesvirtuallawlibrary
Petitioner then elevated the case to the CA through a Petition for review under Rule 43.
Ruling of the Court of Appeals
The CA found that petitioner had known that a subdivision was forthcoming inasmuch as the
loan was obtained by TSE to partially finance the construction of a 20-unit townhouse project,
as stated in the Whereas clause in the mortgage contract.5 Thus, the CA ruled that petitioner
should not have merely relied on the representation of TSE that it had obtained the approval
and authorization of the proper government agencies but should have required the submission
of said documents.6 rll
Further, the appellate court found that the Certification against forum shopping attached to the
Petition before it had not been made under oath, in violation of the Rules of Court.
Hence, this Petition.7

The Issues
Petitioner raises the following issues for our consideration:rbl rl l lbrr
Whether or not the mortgage contract violated Section 18 of P.D. 957, hence, void insofar as
third persons are concerned.
Assuming arguendo that the mortgage contract violated Section 18 of P.D. 957, whether or not
the remedy granted and imposed by the HLURB, as sustained by the Office of the President and
the Court of Appeals, is proper.
Whether or not the inadvertent failure of the notary public to affix his signature on the
Certification against forum shopping executed by petitioner FEBTC in connection with the
Petition for Review it filed with the Court of Appeals provided a sufficient basis for the dismissal
of the appeal.8
The Court's Ruling
The Petition is partly meritorious.
First Issue:
Violation of Section 18 of PD 957
Section 18 of PD 9579 provides as follows:rbl rl l lbrr
SEC. 18.Mortgages. - No mortgage on any unit or lot shall be made by the owner or developer
without prior written approval of the Authority. Such approval shall not be granted unless it is
shown that the proceeds of the mortgage loan shall be used for the development of the
condominium or subdivision project and effective measures have been provided to ensure such
utilization.The loan value of each lot or unit covered by the mortgage shall be determined and
the buyer thereof, if any, shall be notified before the release of the loan. The buyer may, at his
option, pay his installment for the lot or unit directly to the mortgagee who shall apply the
payments to the corresponding mortgage indebtedness secured by the particular lot or unit
being paid for, with a view to enabling said buyer to obtain title over the lot or unit promptly
after full payment thereof.
Petitioner contends that the above-quoted provision does not apply to this case, because the
land mortgaged to it was one whole parcel, not of a subdivision lot, but of an unsubdivided one.
It insists that the written approval of the National Housing Authority (now the Housing and Land
Use Regulatory Board) was not a requirement for the constitution of a mortgage on the
property.
We are not persuaded. It is undisputed that the subject 52.5-square-meter lot with a threestorey town house unit denominated as Unit No. 10 (the lot) is part of the property mortgaged
to petitioner and is covered by TCT No. 156254. The lot was technically described and
segregated in a Contact to Sell that had been entered into before the mortgage loan was
contracted. The fact that the lot had no separate TCT did not make it less of a "subdivision lot"
entitled to the protection of PD 957.
That the subject of the mortgage loan was the entire land, not the individual subdivided lots,
does not take the loan beyond the coverage of Section 18 of PD 957. Undeniably, the lot was
also mortgaged when the entire parcel of land, of which it was a part, was encumbered.

Petitioner also contends that Section 18 of PD 957 is merely a directory provision,

noncompliance with which does not render the mortgage transaction void.
In determining whether a law is mandatory, it is necessary to ascertain the legislative intent, as
stated by Sen. Arturo M. Tolentino, an authority on civil law:rbl rl l lbrr
There is no well-defined rule by which a mandatory or prohibitory law may, in all circumstances,
be distinguished from one which is directory, suppletory, or permissive. In the determination of
this question, the prime object is to ascertain the legislative intention. Generally speaking, those
provisions which are mere matter of form, or which are not material, do not affect any
substantial right, and do not relate to the essence of the thing to be done, so that compliance is
a matter of convenience rather that substance, are considered to be directory. On the other
hand, statutory provisions which relate to matters of substance, affect substantial rights and are
the very essence of the thing required to be done, are regarded as mandatory.10 rll
In Philippine National Bank v. Office of the President,11 we had occasion to mull over the intent
of PD 957 thus:rbl rl l lbrr
x x x [T]he unmistakable intent of the law [is] to protect innocent lot buyers from scheming
subdivision developers. As between these small lot buyers and the gigantic financial institutions
which the developers deal with, it is obvious that the law -- as an instrument of social justice -must favor the weak. Indeed, the petitioner Bank had at its disposal vast resources with which
it could adequately protect its loan activities, and therefore is presumed to have conducted the
usual due diligence checking and ascertaining (whether thru ocular inspection or other modes of
investigation) the actual status, condition, utilization and occupancy of the property offered as
collateral, x x x On the other hand, private respondents obviously were powerless to discover
the attempt of the land developer to hypothecate the property being sold to them. It was
precisely in order to deal with this kind of situation that P.D. 957 was enacted, its very essence
and intendment being to provide a protective mantle over helpless citizens who may fall prey to
the razzmatazz of what P.D. 957 termed unscrupulous subdivision and condominium
sellers.12rll
Concededly, PD 957 aims to protect innocent lot buyers. Section 18 of the decree directly
addresses the problem of fraud committed against buyers when the lot they have contracted to
purchase, and which they have religiously paid for, is mortgaged without their knowledge. The
avowed purpose of PD 957 compels the reading of Section 18 as prohibitory -- acts committed
contrary to it are void.13 Such construal ensures the attainment of the purpose of the law: to
protect lot buyers, so that they do not end up still homeless despite having fully paid for their
home lots with their hard-earned cash.
Petitioner argues that it is an innocent mortgagee whose lien must be respected and protected,
since the title offered as security was clean of any encumbrance or lien. We do not agree.
x xx. As a general rule, where there is nothing on the certificate of title to indicate any cloud or
vice in the ownership of the property, or any encumbrance thereon, the purchaser is not
required to explore further than what the Torrens Title upon its face indicates in quest for any
hidden defect or inchoate right that may subsequently defeat his right thereto. This rule,
however, admits of an exception as where the purchaser or mortgagee has knowledge of a
defect or lack of title in the vendor, or that he was aware of sufficient facts to induce a
reasonably prudent man to inquire into the status of the property in litigation.14 rll
Petitioner bank should have considered that it was dealing with a town house project that was
already in progress. A reasonable person should have been aware that, to finance the project,
sources of funds could have been used other than the loan, which was intended to serve the
purpose only partially. Hence, there was need to verify whether any part of the property was
already the subject of any other contract involving buyers or potential buyers. In granting the

loan, petitioner bank should not have been content merely with a clean title, considering the
presence of circumstances indicating the need for a thorough investigation of the existence of
buyers like respondent. Having been wanting in care and prudence, the latter cannot be
deemed to be an innocent mortgagee.
Petitioner cannot claim to be a mortgagee in good faith. Indeed it was negligent, as found by
the Office of the President and by the CA. Petitioner should not have relied only on the
representation of the mortgagor that the latter had secured all requisite permits and licenses
from the government agencies concerned. The former should have required the submission of
certified true copies of those documents and verified their authenticity through its own
independent effort.
Having been negligent in finding out what respondents rights were over the lot, petitioner must
be deemed to possess constructive knowledge of those rights.15
Second Issue:
Remedy Granted
To retain possession of the lot, petitioner claims that its rights as the buyer in the foreclosure
sale are superior to those of respondent.
We are not persuaded. Aside from being a buyer of the lot, petitioner was also the mortgagee,
which, as previously discussed, was presumed to know the rights of respondent over that lot.
The conversion of the status of the former from mortgagee to buyer-owner will not lessen the
importance of such knowledge. Neither will the conversion set aside the consequences of its
negligence as a mortgagee.
The lot was mortgaged in violation of Section 18 of PD 957. Respondent, who was the buyer of
the property, was not notified of the mortgage before the release of the loan proceeds by
petitioner. Acts executed against the provisions of mandatory or prohibitory laws shall be
void.16 Hence, the mortgage over the lot is null and void insofar as private respondent is
concerned.17 rll
The remedy granted by the HLURB and sustained by the Office of the President is proper only
insofar as it refers to the lot of respondent. In short, the mortgage contract is void as against
him. Since there is no law stating the specifics of what should be done under the circumstances,
that which is in accord with equity should be ordered. The remedy granted by the HLURB in the
first and the second paragraphs of the dispositive portion of its Decision insofar as it referred to
respondent's lot is in accord with equity.
The HLURB, however, went overboard in its disposition in paragraphs 3 and 4, which pertained
not only to the lot but to the entire parcel of land mortgaged. Such ruling was improper. The
subject of this litigation is limited only to the lot that respondent is buying, not to the entire
parcel of land. He has no personality or standing to bring suit on the whole property, as he has
actionable interest over the subject lot only.
Third Issue :
Certification Against Forum Shopping
We find no cogent reason to alter the ruling of the CA regarding the Certification against forum
shopping that did not bear the notary public's signature. It is worth emphasizing that despite
petitioner's noncompliance with the technical requirements regarding the Certification, the CA

still ruled on the merits of the case.18 In fact, there is no more need to pass upon this issue
inasmuch as, on the merits, we have already turned down petitioners plea against respondent.
WHEREFORE, the Petition is PARTLY GRANTED.The Decision of the HLURB is AFFIRMED, but it
shall be applicable only to the 52.5-square-meter lot with a three-storey town house unit
denominated as Unit No. 10.No costs.
SO ORDERED
Davide Jr., C.J., (Chairman), Ynares-Santiago, Carpio andAzcuna, JJ., concur.
Endnotes:

Rollo, pp. 8-32.

Id., pp. 35-46.Sixth Division. Penned by Justice Marina L. Buzon, with the concurrence of
Justices Eubulo G. Verzola (Division chairman) and Bienvenido I,. Reyes (member).
2

CA Decision, p. 12; rollo, p. 45.

Id., pp. 1-5 & 35-39.

Id., pp. 12 & 45.

Ibid.

This case was deemed submitted for resolution on October 17, 2002, upon receipt by the
Court of petitioner's Memorandum signed by Attys. Armando M. Marcelo, Francisco J. Rivera and
Joseph B. Sagandoy Jr. Respondent's Memorandum, signed by Atty. Wendell E. Coronel, was
filed with the Court onSeptember 2, 2002.
7

Petitioner's Memorandum, p. 5; rollo, p. 207. Original in upper case.

Entitled Regulating the Sale of Subdivision Lots and Condominiums, Providing Penalties for
Violations Thereof.
9

Tolentino, Commentaries and jurisprudence on the Civil Code of the Philippines, Vol. I (1990
ed.), p. 26.
10

11

322 Phil. 6, January 18, 1996.

12

Id., p. 13, per Panganiban, J.

13

Article 5 of the Civil Code states:rbl rl l lbrr

Art. 5. Acts executed against the provisions of mandatory or prohibitory laws shall be void,
except when the law itself authorizes their validity.
Col. De la Merced v. Government Service Insurance System, 417 Phil. 324, 338, September
11, 2001, per Ynares-Santiago, J.; citing State Investment House, Inc. v. Court of Appeals, 254
SCRA 368, March 5, 1996.
14

15

Ibid.

16

Art. 5 of the Civil Code.

17

PNB v. Office of the President, supra.

18

See CA Decision, pp. 7-12; rollo, pp. 41-45.