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EN BANC

[G.R. No. 63915. April 24, 1985.]

LORENZO M. TAADA, ABRAHAM F. SARMIENTO, and


MOVEMENT OF ATTORNEYS FOR BROTHERHOOD, INTEGRITY
AND NATIONALISM, INC. [MABINI], Petitioners, v. 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, in his capacity as Director, Malacaang Records Office,
and FLORENDO S. PABLO, in his capacity as Director, Bureau of
Printing, Respondents.

Lorenzo M. Taada, Abraham F. Sarmiento, Mabini Legal Aid


Committee for petitioners

Solicitor General for Respondents.

SYLLABUS

1. CONSTITUTIONAL LAW; STATUTES; PUBLICATION IN THE OFFICIAL


GAZETTE; LEGAL PERSONALITY OF PETITIONERS TO FILE MANDAMUS
TO COMPEL PUBLICATION, RECOGNIZED. The subject of the
petition is to compel the performance of a public duty and petitioners
maintain they need not show any specific interest for their petition to
be given due course. The right sought to be enforced by petitioners is
a public right recognized by no less than the fundamental law of the
land. If petitioners were not allowed to institute this proceeding, it
would indeed be difficult to conceive of any other person to initiate the
same, considering that the Solicitor General, the government officer
generally empowered to represent the people, has entered his
appearance for respondents in this case.

2. ID.; ID.; ID.; ARTICLE 2 CIVIL CODE DOES NOT PRECLUDE


PUBLICATION IN THE OFFICIAL GAZETTE EVEN IF THE LAW ITSELF
PROVIDES FOR DATE OF ITS EFFECTIVITY. That publication in the
Official Gazette is not a sine qua non requirement for the effectivity of
laws where the laws themselves provide for their own effectivity dates
is correct only insofar as it equates the effectivity of laws with the fact
of publication. Considered in the light of other statutes applicable to
the issue at hand, the conclusion is easily reached that said Article 2
does not preclude the requirement of publication in the Official
Gazette, even if the law itself provides for the date of its effectivity.

3. ID.; ID.; ID.; RATIONALE. The clear object of Article 2 of the Civil
Code is to give the general public adequate notice of the various laws
which are to regulate their actions and conduct as citizens. Without
such notice and publication, there would be no basis for the application
of the maxim "ignorantia legis non excusat." It would be the height of
injustice to punish or otherwise burden a citizen for the transgression
of a law of which he had no notice whatsoever, not even a constructive
one.

4. ID.; ID.; ID.; PUBLICATION OF PRESIDENTIAL ISSUANCES "OF A


PUBLIC NATURE" OR "OF GENERAL APPLICABILITY," A REQUIREMENT
OF DUE PROCESS; UNPUBLISHED PRESIDENTIAL ISSUANCES
WITHOUT FORCE AND EFFECT. The publication of all presidential
issuances "of a public nature" or "of general applicability" is mandated
by law. Obviously, presidential decrees that provide for fines,
forfeitures or penalties for their violation or otherwise impose a burden
on the people, such as tax and revenue measures, fall within this
category. Other presidential issuances which apply only to particular
persons such as administrative and executive orders need not be
published on the assumption that they have been circularized to all
concerned. (People v. Que Po Lay, 94 Phil. 640; Balbuena, Et. Al. v.
Secretary of Education, Et Al., 110 Phil. 150) It is needless to add that
the publication of presidential issuances "of a public nature" or "of
general applicability" is a requirement of due process. It is a rule of
law that before a person may be bound by law, he must first be
officially and specifically informed of its contents. The Court therefore
declares that presidential issuances of general application, which have
not been published, shall have no force and effect.

5. ID.; ID.; ID.; DECLARATION OF INVALIDITY OF UNPUBLISHED


PRESIDENTIAL DECREES DOES NOT AFFECT THOSE WHICH HAVE
BEEN ENFORCED OR IMPLEMENTED PRIOR TO THEIR PUBLICATION.
The implementation/enforcement of presidential decrees prior to their
publication in the Official Gazette is "an operative fact which may have
consequences which cannot be justly ignored. The past cannot always
be erased by a new judicial declaration . . .that an all inclusive
statement of a principle of absolute retroactive invalidity cannot be
justified."cralaw virtua1aw library

FERNANDO, C.J., concurring with qualification:chanrob1es virtual 1aw


library

1. CONSTITUTIONAL LAW; STATUTES; PUBLICATION REQUIREMENT


NEED NOT BE CONFINED TO THE OFFICIAL GAZETTE. It is of course
true that without the requisite publication, a due process question
would arise if made to apply adversely to a party who is not even
aware of the existence of any legislative or executive act having the
force and effect of law. But such publication required need not be
confined to the Official Gazette. From the pragmatic standpoint, there
is an advantage to be gained. It conduces to certainty. That is to be
admitted. It does not follow, however, that failure to do so would in all
cases and under all circumstances result in a statute, presidential
decree, or any other executive act of the same category being bereft
of any binding force and effect. To so hold would raise a constitutional
question. Such a pronouncement would lend itself to the interpretation
that such a legislative or presidential act is bereft of the attribute of
effectivity unless published in the Official Gazette. There is no such
requirement in the Constitution.

2. ID.; ID.; ID.; ID.; REQUIREMENT IN ART. 2 CIVIL CODE DOES NOT
HAVE THE JUDICIAL FORCE OF A CONSTITUTIONAL COMMAND. The
Chief Justices qualified concurrence goes no further than to affirm that
publication is essential to the effectivity of a legislative or executive
act of a general application. He is not in agreement with the view that
such publication must be in the Official Gazette. The Civil Code itself in
its Article 2 expressly recognizes that the rule as to laws taking effect
after fifteen days following the completion of their publication in the
Official Gazette is subject to this exception, "unless it is otherwise
provided." Moreover, the Civil Code is itself only a legislative
enactment, Republic Act No. 386. It does not and cannot have the
juridical force of a constitutional command. A later legislative or
executive act which has the force and effect of law can legally provide
for a different rule.

3. ID.; ID.; ID.; TO DECLARE UNPUBLISHED PRESIDENTIAL


ISSUANCES WITHOUT LEGAL FORCE AND EFFECT WOULD RESULT IN
UNDESIRABLE CONSEQUENCES. Nor does the Chief Justice agree
with the rather sweeping conclusion in the opinion of Justice Escolin
that presidential decrees and executive acts not thus previously
published in the Official Gazette would be devoid of any legal
character. That would be, in his opinion, to go too far. It may be
fraught, as earlier noted, with undesirable consequences. He finds
himself therefore unable to yield assent to such a pronouncement.

TEEHANKEE, J., concurring:chanrob1es virtual 1aw library

1. CONSTITUTIONAL LAW; STATUTES, PUBLICATION IN THE OFFICIAL


GAZETTE; NECESSARY PURSUANT TO THE BASIC CONSTITUTIONAL
REQUIREMENTS OF DUE PROCESS. The Rule of Law connotes a
body of norms and laws published and ascertainable and of equal
application to all similarly circumstanced and not subject to arbitrary
change but only under certain set procedure. The Court had
consistently stressed that "it is an elementary rule of fair play and
justice that a reasonable opportunity to be informed must be afforded
to the people who are commanded to obey before they can be
punished for its violation," (People v. de Dios, G.R. No. L-11003,
August 31, 1959, per the late Chief Justice Paras) citing the settled
principle based on due process enunciated in earlier cases that "before
the public is bound by its contents. especially its penal provisions, a
law, regulation or circular must first be published and the people
officially and specially informed of said contents and its penalties."
Without official publication in the Official Gazette as required by Article
2 of the Civil Code and Revised Administrative Code, there would be
no basis nor justification for the corollary rule of Article 3 of the Civil
Code (based on constructive notice that the provisions of the law are
ascertainable from the public and official repository where they are
duly published) that "Ignorance of the law excuses no one from
compliance therewith."cralaw virtua1aw library

2. ID.; ID.; ID.; RESPONDENTS CONTENTION THAT "ONLY LAWS


WHICH ARE SILENT AS TO THEIR EFFECTIVITY DATE NEED TO BE
PUBLISHED IN THE OFFICIAL GAZETTE FOR THEIR EFFECTIVITY,"
UNTENABLE. The plain text and meaning of the Civil Code is that
"laws shall take effect after fifteen days following the completion of
their publication in the Official Gazette, unless it is otherwise
provided," i.e. a different effectivity date is provided by the law itself.
This proviso perforce refers to a law that had been duly published
pursuant to the basic constitutional requirements of due process. The
best example of this is the Civil Code itself: the same Article 2
provides otherwise that it "shall take effect (only) one year (not 15
days) after such publication." To sustain respondents misreading that
"most laws or decrees specify the date of their effectivity and for this
reason, publication in the Official Gazette is not necessary for their
effectivity" would be to nullify and render nugatory the Civil Codes
indispensable and essential requirement of prior publication in the
Official Gazette by the simple expedient of providing for immediate
effectivity or an earlier effectivity date in the law itself before the
completion of 15 days following its publication which is the period
generally fixed by the Civil Code for its proper dissemination.

MELENCIO-HERRERA, J., concurring:chanrob1es virtual 1aw library

CONSTITUTIONAL LAW; STATUTES; PUBLICATION IN THE OFFICIAL


GAZETTE; RETROACTIVITY IN EFFECTIVITY DATE NOT ALLOWED
WHERE IT WILL RUN COUNTER TO CONSTITUTIONAL RIGHTS OR
DESTROY VESTED RIGHTS. There cannot be any question but that
even if a decree provides for a date of effectivity, it has to be
published. When a date effectivity is mentioned in the decree but the
decree becomes effective only fifteen (15) days after its publication in
the Official Gazette, it will not mean that the decree can have
retroactive effect to the date of effectivity mentioned in the decree
itself. There should be no retroactivity if the retroactivity will run
counter to constitutional rights or shall destroy vested rights.

PLANA, J., separate opinion:chanrob1es virtual 1aw library

1. CONSTITUTIONAL LAW; STATUTES; PUBLICATION IN THE OFFICIAL


GAZETTE NOT ESSENTIAL FOR EFFECTIVITY FOR EFFECTIVITY OF
LAWS. The Philippine Constitution does not require the publication
of laws as a prerequisite for their effectivity, unlike some Constitutions
elsewhere. It may be said though that the guarantee of due process
requires notice of laws to affected parties before they can be bound
thereby; but such notice is not necessarily by publication in the Official
Gazette. The due process clause is not that precise. Neither is the
publication in the Official Gazette required by any statute as a
prerequisite for their effectivity, if said laws already provide for their
effectivity date.
2. ID.; ID.; PUBLICATION MAY BE MADE ELSEWHERE THAN IN THE
OFFICIAL GAZETTE. Article 2 of the Civil Code provides that "laws
shall take effect after fifteen days following the completion of their
publication in the Official Gazette, unless it is otherwise provided." Two
things may be said of this provision: Firstly, it obviously does not apply
to a law with a built-in provision as to when it will take effect.
Secondly, it clearly recognizes that each law may provide not only a
different period for reckoning its effectivity date but also a different
mode of notice. Thus, a law may prescribe that it shall be published
elsewhere than in the Official Gazette.

3. ID.; ID.; COMMONWEALTH ACT 638 CANNOT NULLIFY OR


RESTRICT OPERATION OF A STATUTE WITH A PROVISION AS TO ITS
EFFECTIVITY. Not all legislative acts are required to be published in
the Official Gazette but only "important" ones "of a public nature."
Moreover, Commonwealth Act No. 638 does not provide that
publication in the Official Gazette is essential for the effectivity of laws.
This is as it should be, for all statutes are equal and stand on the same
footing. A law, especially an earlier one of general application such as
Commonwealth Act No. 638, cannot nullify or restrict the operation of
a subsequent statute that has a provision of its own as to when and
how it will take effect. Only a higher law, which is the Constitution, can
assume the role.

DECISION

ESCOLIN, J.:

Invoking the peoples right to be informed on matters of public


concern, a right recognized in Section 6, Article IV of the 1973
Philippine Constitution, 1 as well as the principle that laws to be valid
and enforceable must be published in the Official Gazette or otherwise
effectively promulgated, petitioners seek a writ of mandamus to
compel respondent public officials to publish, and or cause the
publication in the Official Gazette of various presidential decrees,
letters of instructions, general orders, proclamations, executive orders,
letter of implementation and administrative orders.
Specifically, the publication of the following presidential issuances is
sought:chanrob1es virtual 1aw library

a] Presidential Decrees Nos. 12, 22, 37, 38, 59, 64, 103, 171, 179,
184, 197, 200, 234, 265, 286, 298, 303, 312, 324, 325, 326, 337,
355, 358, 359, 360, 361, 368, 404, 406, 415, 427, 429, 445, 447,
473, 486, 491, 503, 504, 521, 528, 551, 566, 573, 574, 594, 599,
644, 658, 661, 718, 731, 733, 793, 800, 802, 835, 836, 923, 935,
961, 1017-1030, 1050, 1060-1061, 1085, 1143, 1165, 1166, 1242,
1246, 1250, 1278, 1279, 1300, 1644, 1772, 1808, 1810, 1813-1817,
1819-1826, 1829-1840, 1842-1847.

b] Letter of Instructions Nos.: 10, 39, 49, 72, 107, 108, 116, 130,
136, 141, 150, 153, 155, 161, 173, 180, 187, 188, 192, 193, 199,
202, 204, 205, 209, 211-213, 215-224, 226-228, 231-239, 241-245,
248-251, 253-261, 263-269, 271-273, 275-283, 285-289, 291, 293,
297-299, 301-303, 309, 312-315, 325, 327, 343, 346, 349, 357, 358,
362, 367, 370, 382, 385, 386, 396-397, 405, 438-440, 444-445, 473,
486, 488, 498, 501, 399, 527, 561, 576, 587, 594, 599, 600, 602,
609, 610, 611, 612, 615, 641, 642, 665, 702, 712-713, 726, 837-839,
878-879, 881, 882, 939-940, 964, 997, 1149-1178, 1180-1278.

c] General Orders Nos.: 14, 52, 58, 59, 60, 62, 63, 64 & 65.

d] Proclamation Nos.: 1126, 1144, 1147, 1151, 1196, 1270, 1281,


1319-1526, 1529, 1532, 1535, 1538, 1540-1547, 1550-1558, 1561-
1588, 1590-1595, 1594-1600, 1606-1609, 1612-1628, 1630-1649,
1694-1695, 1697-1701, 1705-1723, 1731-1734, 1737-1742, 1744,
1746-1751, 1752, 1754, 1762, 1764-1787, 1789-1795, 1797, 1800,
1802-1804, 1806-1807, 1812-1814, 1816, 1825-1826, 1829, 1831-
1832, 1835-1836, 1839-1840, 1843-1844, 1846-1847, 1849, 1853-
1858, 1860, 1866, 1868, 1870, 1876-1889, 1892, 1900, 1918, 1923,
1933, 1952, 1963, 1965-1966, 1968-1984, 1986-2028, 2030-2044,
2046-2145, 2147-2161, 2163-2244.

e] Executive Orders Nos.: 411, 413, 414, 427, 429-454, 457-471,


474-492, 494-507, 509-510, 522, 524-528, 531-532, 536, 538, 543-
544, 549, 551-553, 560, 563, 567-568, 570, 574, 593, 594, 598-604,
609, 611-647, 649-677, 679-703, 705-707, 712-786, 788-852, 854-
857.
f] Letters of Implementation Nos.: 7, 8, 9, 10, 11-22, 25-27, 39, 50,
51, 59, 76, 80-81, 92, 94, 95, 107, 120, 122, 123.

g] Administrative Orders Nos.: 347, 348, 352-354, 360-378, 380-433,


436-439.

The respondents, through the Solicitor General, would have this case
dismissed outright on the ground that petitioners have no legal
personality or standing to bring the instant petition. The view is
submitted that in the absence of any showing that petitioners are
personally and directly affected or prejudiced by the alleged non-
publication of the presidential issuances in question 2 said petitioners
are without the requisite legal personality to institute this mandamus
proceeding, they are not being "aggrieved parties" within the meaning
of Section 3, Rule 65 of the Rules of Court, which we quote:chanrobles
virtual lawlibrary

"SEC. 3. Petition for Mandamus. When any tribunal, corporation,


board or person unlawfully neglects the performance of an act which
the law specifically enjoins as a duty resulting from an office, trust, or
station, or unlawfully excludes another from the use and enjoyment of
a right or office to which such other is entitled, and there is no other
plain, speedy and adequate remedy in the ordinary course of law, the
person aggrieved thereby may file a verified petition in the proper
court alleging the facts with certainty and praying that judgment be
rendered commanding the defendant, immediately or at some other
specified time, to do the act required to be done to protect the rights
of the petitioner, and to pay the damages sustained by the petitioner
by reason of the wrongful acts of the defendant."cralaw virtua1aw
library

Upon the other hand, petitioners maintain that since the subject of the
petition concerns a public right and its object is to compel the
performance of a public duty, they need not show any specific interest
for their petition to be given due course.

The issue posed is not one of first impression. As early as the 1910
case of Severino v. Governor General, 3 this Court held that while the
general rule is that "a writ of mandamus would be granted to a private
individual only in those cases where he has some private or particular
interest to be subserved, or some particular right to be protected,
independent of that which he holds with the public at large," and "it is
for the public officers exclusively to apply for the writ when public
rights are to be subserved [Mithchell v. Boardmen, 79 M.e., 469],"
nevertheless, "when the question is one of public right and the object
of the mandamus is to procure the enforcement of a public duty, the
people are regarded as the real party in interest and the relator at
whose instigation the proceedings are instituted need not show that he
has any legal or special interest in the result, it being sufficient to
show that he is a citizen and as such interested in the execution of the
laws [High, Extraordinary Legal Remedies, 3rd ed., sec. 431]."cralaw
virtua1aw library

Thus, in said case, this Court recognized the relator Lope Severino, a
private individual, as a proper party to the mandamus proceedings
brought to compel the Governor General to call a special election for
the position of municipal president in the town of Silay, Negros
Occidental. Speaking for this Court, Mr. Justice Grant T. Trent
said:chanrobles virtual lawlibrary

"We are therefore of the opinion that the weight of authority supports
the proposition that the relator is a proper party to proceedings of this
character when a public right is sought to be enforced. If the general
rule in America were otherwise, we think that it would not be
applicable to the case at bar for the reason that it is always dangerous
to apply a general rule to a particular case without keeping in mind the
reason for the rule, because, if under the particular circumstances the
reason for the rule does not exist, the rule itself is not applicable and
reliance upon the rule may well lead to error.

"No reason exists in the case at bar for applying the general rule
insisted upon by counsel for the Respondent. The circumstances which
surround this case are different from those in the United States,
inasmuch as if the relator is not a proper party to these proceedings
no other person could be, as we have seen that it is not the duty of
the law officer of the Government to appear and represent the people
in cases of this character."cralaw virtua1aw library

The reasons given by the Court in recognizing a private citizens legal


personality in the aforementioned case apply squarely to the present
petition. Clearly, the right sought to be enforced by petitioners herein
is a public right recognized by no less than the fundamental law of the
land. If petitioners were not allowed to institute this proceeding, it
would indeed be difficult to conceive of any other person to initiate the
same, considering that the Solicitor General, the government officer
generally empowered to represent the people, has entered his
appearance for respondents in this case.

Respondents further contend that publication in the Official Gazette is


not a sine qua non requirement for the effectivity of laws where the
laws themselves provide for their own effectivity dates. It is thus
submitted that since the presidential issuances in question contain
special provisions as to the date they are to take effect, publication in
the Official Gazette is not indispensable for their effectivity. The point
stressed is anchored on Article 2 of the Civil
Code:jgc:chanrobles.com.ph

"Art. 2. Laws shall take effect after fifteen days following the
completion of their publication in the Official Gazette, unless it is
otherwise provided, . . ."cralaw virtua1aw library

The interpretation given by respondent is in accord with this Courts


construction of said article. In a long line of decisions, 4 this Court has
ruled that publication in the Official Gazette is necessary in those cases
where the legislation itself does not provide for its effectivity date
for then the date of publication is material for determining its date of
effectivity, which is the fifteenth day following its publication but not
when the law itself provides for the date when it goes into effect.

Respondents argument, however, is logically correct only insofar as it


equates the effectivity of laws with the fact of publication. Considered
in the light of other statutes applicable to the issue at hand, the
conclusion is easily reached that said Article 2 does not preclude the
requirement of publication in the Official Gazette, even if the law itself
provides for the date of its effectivity. Thus, Section 1 of
Commonwealth Act 638 provides as follows:jgc:chanrobles.com.ph

"Section 1. There shall be published in the Official Gazette [1] all


important legislative acts and resolutions of a public nature of the
Congress of the Philippines; [2] all executive and administrative orders
and proclamations, except such as have no general applicability; [3]
decisions or abstracts of decisions of the Supreme Court and the Court
of Appeals as may be deemed by said courts of sufficient importance
to be so published; [4] such documents or classes of documents as
may be required so to be published by law; and [5] such documents or
classes of documents as the President of the Philippines shall
determine from time to time to have general applicability and legal
effect, or which he may authorize so to be published. . . ."cralaw
virtua1aw library

The clear object of the above quoted provision is to give the general
public adequate notice of the various laws which are to regulate their
actions and conduct as citizens. Without such notice and publication,
there would be no basis for the application of the maxim "ignorantia
legis non excusat." It would be the height of injustice to punish or
otherwise burden a citizen for the transgression of a law of which he
had no notice whatsoever, not even a constructive one.chanrobles
virtual lawlibrary

Perhaps at no time since the establishment of the Philippine Republic


has the publication of laws taken so vital significance that at this time
when the people have bestowed upon the President a power
heretofore enjoyed solely by the legislature. While the people are kept
abreast by the mass media of the debates and deliberations in the
Batasan Pambansa and for the diligent ones, ready access to the
legislative records no such publicity accompanies the law-making
process of the President. Thus, without publication, the people have no
means of knowing what presidential decrees have actually been
promulgated, much less a definite way of informing themselves of the
specific contents and texts of such decrees. As the Supreme Court of
Spain ruled: "Bajo la denominacion genrica de leyes, se comprenden
tambin los reglamentos, Reales decretos, Instrucciones, Circulares y
Reales ordines dictadas de conformidad con las mismas por el
Gobierno en uso de su potestad." 5

The very first clause of Section 1 of Commonwealth Act 638 reads:


"There shall be published in the Official Gazette . . ." The word "shall"
used therein imposes upon respondent officials an imperative duty.
That duty must be enforced if the Constitutional right of the people to
be informed on matters of public concern is to be given substance and
reality. The law itself makes a list of what should be published in the
official Gazette. Such listing, to our mind, leaves respondents with no
discretion whatsoever as to what must be included or excluded from
such publication.
The publication of all presidential issuances "of a public nature" or "of
general applicability" is mandated by law. Obviously, presidential
decrees that provide for fines, forfeitures or penalties for their violation
or otherwise impose a burden on the people, such as tax and revenue
measures, fall within this category. Other presidential issuances which
apply only to particular persons or class of persons such as
administrative and executive orders need not be published on the
assumption that they have been circularized to all concerned. 6

It is needless to add that the publication of presidential issuances "of a


public nature" or "of general applicability" is a requirement of due
process. It is a rule of law that before a person may be bound by law,
he must first be officially and specifically informed of its contents. As
Justice Claudio Teehankee said in Peralta v. COMELEC 7
:jgc:chanrobles.com.ph

"In a time of proliferating decrees, orders and letters of instructions


which all form part of the law of the land, the requirement of due
process and the Rule of Law demand that the Official Gazette as the
official government repository promulgate and publish the texts of all
such decrees, orders and instructions so that the people may know
where to obtain their official and specific contents."cralaw virtua1aw
library

The Court therefore declares that presidential issuances of general


application, which have not been published, shall have no force and
effect. Some members of the Court, quite apprehensive about the
possible unsettling effect this decision might have on acts done in
reliance of the validity of those presidential decrees which were
published only during the pendency of this petition, have put the
question as to whether the Courts declaration of invalidity apply to
P.D.s which had been enforced or implemented prior to their
publication. The answer is all too familiar. In similar situations in the
past this Court had taken the pragmatic and realistic course set forth
in Chicot County Drainage District v. Baxter Bank 8 to wit:chanrobles
virtualawlibrary chanrobles.com:chanrobles.com.ph

"The courts below have proceeded on the theory that the Act of
Congress, having been found to be unconstitutional, was not a law;
that it was inoperative, conferring no rights and imposing no duties,
and hence affording no basis for the challenged decree. Norton v.
Shelby County, 118 U.S. 425, 442; Chicago, I. & L. Ry. Co. v. Hackett,
228 U.S. 559, 566. It is quite clear, however, that such broad
statements as to the effect of a determination of unconstitutionality
must be taken with qualifications. The actual existence of a statute,
prior to such a determination, is an operative fact and may have
consequences which cannot justly be ignored. The past cannot always
be erased by a new judicial declaration. The effect of the subsequent
ruling as to invalidity may have to be considered in various aspects
with respect to particular conduct, private and official. Questions of
rights claimed to have become vested, of status, of prior
determinations deemed to have finality and acted upon accordingly, of
public policy in the light of the nature both of the statute and of its
previous application, demand examination. These questions are among
the most difficult of those which have engaged the attention of courts,
state and federal, and it is manifest from numerous decisions that an
all-inclusive statement of a principle of absolute retroactive invalidity
cannot be justified."cralaw virtua1aw library

Consistently with the above principle, this Court in Rutter v. Esteban 9


sustained the right of a party under the Moratorium Law, albeit said
right had accrued in his favor before said law was declared
unconstitutional by this Court.

Similarly, the implementation/enforcement of presidential decrees


prior to their publication in the Official Gazette is "an operative fact
which may have consequences which cannot be justly ignored. The
past cannot always be erased by a new judicial declaration . . . that an
all-inclusive statement of a principle of absolute retroactive invalidity
cannot be justified."cralaw virtua1aw library

From the report submitted to the Court by the Clerk of Court, it


appears that of the presidential decrees sought by petitioners to be
published in the Official Gazette, only Presidential Decrees Nos. 1019
to 1030, inclusive, 1278, and 1937 to 1939, inclusive, have not been
so published. 10 Neither the subject matters nor the texts of these PDs
can be ascertained since no copies thereof are available. But whatever
their subject matter may be, it is undisputed that none of these
unpublished PDs has ever been implemented or enforced by the
government. In Pesigan v. Angeles, 11 the Court, through Justice
Ramon Aquino, ruled that "publication is necessary to apprise the
public of the contents of [penal] regulations and make the said
penalties binding on the persons affected thereby." The cogency of this
holding is apparently recognized by respondent officials considering
the manifestation in their comment that "the government, as a matter
of policy, refrains from prosecuting violations of criminal laws until the
same shall have been published in the Official Gazette or in some
other publication, even though some criminal laws provide that they
shall take effect immediately."cralaw virtua1aw library

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.

SO ORDERED.

Relova, J., concur.

Aquino, J., took no part.

Concepcion, Jr., J., is on leave.

Gutierrez, Jr., J., I concur insofar as publication is necessary but


reserve my vote as to the necessity of such publication being in the
Official Gazette.

De la Fuente, J., Insofar as the opinion declares the unpublished


decrees and issuances of a public nature or general applicability
ineffective, until due publication thereof.

Separate Opinions

FERNANDO, C.J., concurring with qualification:chanrob1es virtual 1aw


library

There is on the whole acceptance on my part of the views expressed in


the ably written opinion of Justice Escolin. I am unable, however, to
concur insofar as it would unqualifiedly impose the requirement of
publication in the Official Gazette for unpublished "presidential
issuances" to have binding force and effect.
I shall explain why.

1. It is of course true that without the requisite publication, a due


process question would arise if made to apply adversely to a party who
is not even aware of the existence of any legislative or executive act
having the force and effect of law. My point is that such publication
required need not be confined to the Official Gazette. From the
pragmatic standpoint, there is an advantage to be gained. It conduces
to certainty. That is too be admitted. It does not follow, however, that
failure to do so would in all cases and under all circumstances result in
a statute, presidential decree or any other executive act of the same
category being bereft of any binding force and effect. To so hold
would, for me, raise a constitutional question. Such a pronouncement
would lend itself to the interpretation that such a legislative or
presidential act is bereft of the attribute of effectivity unless published
in the Official Gazette. There is no such requirement in the
Constitution as Justice Plana so aptly pointed out. It is true that what
is decided now applies only to past "presidential issuances."
Nonetheless, this clarification is, to my mind, needed to avoid any
possible misconception as to what is required for any statute or
presidential act to be impressed with binding force or effectivity.

2. It is quite understandable then why I concur in the separate opinion


of Justice Plana. Its first paragraph sets forth what to me is the
constitutional doctrine applicable to this case. Thus: "The Philippine
Constitution does not require the publication of laws as a prerequisite
for their effectivity, unlike some Constitutions elsewhere. It may be
said though that the guarantee of due process requires notice of laws
to affected parties before they can be bound thereby; but such notice
is not necessarily by publication in the Official Gazette. The due
process clause is not that precise." 1 I am likewise in agreement with
its closing paragraph: "In fine, I concur in the majority decision to the
extent that it requires notice before laws become effective, for no
person should be bound by a law without notice. This is elementary
fairness. However, I beg to disagree insofar as it holds that such notice
shall be by publication in the Official Gazette." 2

3. It suffices, as was stated by Judge Learned Hand, that law as the


command of the government "must be ascertainable in some form if it
is to be enforced at all." 3 It would indeed be to reduce it to the level
of mere futility, as pointed out by Justice Cardozo, "if it is unknown
and unknowable." 4 Publication, to repeat, is thus essential. What I am
not prepared to subscribe to is the doctrine that it must be in the
Official Gazette. To be sure once published therein there is the
ascertainable mode of determining the exact date of its effectivity. Still
for me that does not dispose of the question of what is the jural effect
of past presidential decrees or executive acts not so published. For
prior thereto, it could be that parties aware of their existence could
have conducted themselves in accordance with their provisions. If no
legal consequences could attach due to lack of publication in the
Official Gazette, then serious problems could arise. Previous
transactions based on such "Presidential Issuances" could be open to
question. Matters deemed settled could still be inquired into. I am not
prepared to hold that such an effect is contemplated by our decision.
Where such presidential decree or executive act is made the basis of a
criminal prosecution, then, of course, its ex post facto character
becomes evident. 5 In civil cases though, retroactively as such is not
conclusive on the due process aspect. There must still be a showing of
arbitrariness. Moreover, where the challenged presidential decree or
executive act was issued under the police power, the non-impairment
clause of the Constitution may not always be successfully invoked.
There must still be that process of balancing to determine whether or
not it could in such a case be tainted by infirmity. 6 In traditional
terminology, there could arise then a question of unconstitutional
application. That is as far as it goes.

4. Let me make therefore that my qualified concurrence goes no


further than to affirm that publication is essential to the effectivity of a
legislative or executive act of a general application. I am not in
agreement with the view that such publication must be in the Official
Gazette. The Civil Code itself in its Article 2 expressly recognizes that
the rule as to laws taking effect after fifteen days following the
completion of their publication in the Official Gazette is subject to this
exception, "unless it is otherwise provided." Moreover, the Civil Code is
itself only a legislative enactment, Republic Act No. 386. It does not
and cannot have the juridical force of a constitutional command. A
later legislative or executive act which has the force and effect of law
can legally provide for a different rule.

5. Nor can I agree with the rather sweeping conclusion in the opinion
of Justice Escolin that presidential decrees and executive acts not thus
previously published in the Official Gazette would be devoid of any
legal character. That would be, in my opinion, to go too far. It may be
fraught, as earlier noted, with undesirable consequences. I find myself
therefore unable to yield assent to such a pronouncement.

I am authorized to state that Justices Makasiar, Abad Santos, Cuevas,


and Alampay concur in this separate opinion.

Makasiar, Abad Santos, Cuevas and Alampay, JJ., concur.

TEEHANKEE, J., concurring:chanrob1es virtual 1aw library

I concur with the main opinion of Mr. Justice Escolin and the
concurring opinion of Mme. Justice Herrera. The Rule of Law connotes
a body of norms and laws published and ascertainable and of equal
application to all similarly circumstanced and not subject to arbitrary
change but only under certain set procedures. The Court has
consistently stressed that "it is an elementary rule of fair play and
justice that a reasonable opportunity to be informed must be afforded
to the people who are commanded to obey before they can be
punished for its violation," 1 citing the settled principle based on due
process enunciated in earlier cases that "before the public is bound by
its contents, especially its penal provisions, a law, regulation or
circular must first be published and the people officially and specially
informed of said contents and its penalties."cralaw virtua1aw library

Without official publication in the Official Gazette as required by Article


2 of the Civil Code and the Revised Administrative Code, there would
be no basis nor justification for the corollary rule of Article 3 of the
Civil Code (based on constructive notice that the provisions of the law
are ascertainable from the public and official repository where they are
duly published) that "Ignorance of the law excuses no one from
compliance therewith."cralaw virtua1aw library

Respondents contention based on a misreading of Article 2 of the Civil


Code that "only laws which are silent as to their effectivity [date] need
be published in the Official Gazette for their effectivity" is manifestly
untenable. The plain text and meaning of the Civil Code is that "laws
shall take effect after fifteen days following the completion of their
publication in the Official Gazette, unless it is otherwise provided," i.e.
a different effectivity date is provided by the law itself. This proviso
perforce refers to a law that has been duly published pursuant to the
basic constitutional requirements of due process. The best example of
this is the Civil Code itself: the same Article 2 provides otherwise that
it "shall take effect [only] one year [not 15 days] after such
publication." 2 To sustain respondents misreading that "most laws or
decrees specify the date of their effectivity and for this reason,
publication in the Official Gazette is not necessary for their effectivity"
3 would be to nullify and render nugatory the Civil Codes
indispensable and essential requirement of prior publication in the
Official Gazette by the simple expedient of providing for immediate
effectivity or an earlier effectivity date in the law itself before the
completion of 15 days following its publication which is the period
generally fixed by the Civil Code for its proper
dissemination.chanrobles law library : red

MELENCIO-HERRERA, J., concurring:chanrob1es virtual 1aw library

I agree. There cannot be any question but that even if a decree


provides for a date of effectivity, it has to be published. What I would
like to state in connection with that proposition is that when a date of
effectivity is mentioned in the decree but the decree becomes effective
only fifteen (15) days after its publication in the Official Gazette, it will
not mean that the decree can have retroactive effect to the date of
effectivity mentioned in the decree itself. There should be no
retroactivity if the retroactivity will run counter to constitutional rights
or shall destroy vested rights.

PLANA, J., concurring and dissenting:chanrob1es virtual 1aw library

The Philippine Constitution does not require the publication of laws as


a prerequisite for their effectivity, unlike some Constitutions
elsewhere. * It may be said though that the guarantee of due process
requires notice of laws to affected parties before they can be bound
thereby; but such notice is not necessarily by publication in the Official
Gazette. The due process clause is not that precise. Neither is the
publication of laws in the Official Gazette required by any statute as a
prerequisite for their effectivity, if said laws already provide for their
effectivity date.

Article 2 of the Civil Code provides that "laws shall take effect after
fifteen days following the completion of their publication in the Official
Gazette, unless it is otherwise provided." Two things may be said of
this provision: Firstly, it obviously does not apply to a law with a built-
in provision as to when it will take effect. Secondly, it clearly
recognizes that each law may provide not only a different period for
reckoning its effectivity date but also a different mode of notice. Thus,
a law may prescribe that it shall be published elsewhere than in the
Official Gazette.

Commonwealth Act No. 638, in my opinion, does not support the


proposition that for their effectivity, laws must be published in the
Official Gazette. The said law is simply "An Act to Provide for the
Uniform Publication and Distribution of the Official Gazette."
Conformably therewith, it authorizes the publication of the Official
Gazette, determines its frequency, provides for its sale and
distribution, and defines the authority of the Director of Printing in
relation thereto. It also enumerates what shall be published in the
Official Gazette, among them, "important legislative acts and
resolutions of a public nature of the Congress of the Philippines" and
"all executive and administrative orders and proclamations, except
such as have no general applicability." It is noteworthy that not all
legislative acts are required to be published in the Official Gazette but
only "important" ones "of a public nature." Moreover, the said law does
not provide that publication in the Official Gazette is essential for the
effectivity of laws. This is as it should be, for all statutes are equal and
stand on the same footing. A law, especially an earlier one of general
application such as Commonwealth Act No. 638, cannot nullify or
restrict the operation of a subsequent statute that has a provision of
its own as to when and how it will take effect. Only a higher law, which
is the Constitution, can assume that role.

In fine, I concur in the majority decision to the extent that it requires


notice before laws become effective, for no person should be bound by
a law without notice. This is elementary fairness. However, I beg to
disagree insofar as it holds that such notice shall be by publication in
the Official Gazette.

Cuevas and Alampay, JJ., concur.


EN BANC

[G.R. No. L-15127. May 30, 1961.]

EMETERIO CUI, Plaintiff-Appellant, v. ARELLANO


UNIVERSITY, Defendant-Appellee.

G.A.S. Sipin, Jr., for Plaintiff-Appellant.

E. Voltaire Garcia,, for Defendant-Appellee.

SYLLABUS

1. CONTRACTS; STUDENTS AND EDUCATIONAL INSTITUTIONS;


SCHOLARSHIPS; STIPULATION WHEREBY STUDENT CANNOT
TRANSFER TO ANOTHER SCHOOL WITHOUT REFUNDING
SCHOLARSHIP CASH NULL AND VOID. The stipulation in a contract,
between a student and the school, that the students scholarship is
good only if he continues in the same school, and that he waives his
right to transfer to another school without refunding the equivalent of
his scholarship in cash, is contrary to public policy and, hence, null and
void, because scholarships are awarded in recognition of merit and to
help gifted students in whom society has an established interest or a
first lien, and not to keep outstanding students in school to bolster its
prestige and increase its business potential.

DECISION

CONCEPCION, J.:

Appeal by plaintiff Emeterio Cui from a decision of the Court of First


Instance of Manila, absolving defendant Arellano University from
plaintiffs complaint, with costs against the plaintiff, and dismissing
defendants counterclaim, for insufficiency of proof thereon.

In the language of the decision appealed from:jgc:chanrobles.com.ph

"The essential facts of this case are short and undisputed. As


established by the agreement of facts Exhibit X and by the respective
oral and documentary evidence introduced by the parties, it appears
conclusive that plaintiff, before the school year 1948-1949 took up
preparatory law course in the defendant University. After finishing his
preparatory law course plaintiff enrolled in the College of Law of the
defendant from the school year 1948-1949. Plaintiff finished his law
studies in the defendant university up to and including the first
semester of the fourth year. During all the school years in which
plaintiff was studying law in defendant law college, Francisco R.
Capistrano, brother of the mother of plaintiff, was the dean of the
College of Law and legal counsel of the defendant university. Plaintiff
enrolled for the last semester of his law studies in the defendant
university but failed to pay his tuition fees, because his uncle Dean
Francisco R. Capistrano having severed his connection with defendant
and having accepted the deanship and chancellorship of the College of
Law of Abad Santos University, plaintiff left the defendants law college
and enrolled for the last semester of his fourth year law in the college
of law of the Abad Santos University graduating from the college of
law of the latter university. Plaintiff, during all the time he was
studying law in defendant university was awarded scholarship grants,
for scholastic merit, so that his semestral tuition fees were returned to
him after the ends of semesters and when his scholarship grants were
awarded to him. The whole amount of tuition fees paid by plaintiff to
defendant and refunded to him by the latter from the first semester up
to and including the first semester of his last year in the college of law
or the fourth year, is in total P1,033.87. After graduating in law from
Abad Santos University he applied to take the bar examination. To
secure permission to take the bar he needed the transcripts of his
records in defendant Arellano University. Plaintiff petitioned the latter
to issue to him the needed transcripts. The defendant refused until
after he had paid back the P1,033.87 which defendant refunded to him
as above stated. As he could not take the bar examination without
those transcripts, plaintiff paid to defendant the said sum under
protest. This is the sum which plaintiff seeks to recover from
defendant in this case.
"Before defendant awarded to plaintiff the scholarship grants as above
stated, he was made to sign the following contract, covenant and
agreement:chanrob1es virtual 1aw library

In consideration of the scholarship granted to me by the University, I


hereby waive my right to transfer to another school without having
refunded to the University (defendant) the equivalent of my
scholarship cash.

(Sgd.) Emeterio Cui."cralaw virtua1aw library

It is admitted that, on August 16, 1949, the Director of Private Schools


issued Memorandum No. 38, series of 1949, on the subject of
"Scholarships", addressed to "All heads of private schools, colleges and
universities", reading:jgc:chanrobles.com.ph

"1. School catalogs and prospectuses submitted to this Bureau show


that some schools offer full or partial scholarships to deserving
students for excellence in scholarship or for leadership in
extracurricular activities. Such inducements to poor but gifted students
should be encouraged. But to stipulate the condition that such
scholarships are good only if the students concerned continue in the
same school nullifies the principle of merit in the award of these
scholarships.

"2. When students are given full or partial scholarships, it is


understood that such scholarships are merited and earned. The
amount in tuition and other fees corresponding to these scholarships
should not be subsequently charged to the recipient students when
they decide to quit school or to transfer to another institution.
Scholarships should not be offered merely to attract and keep students
in a school.

"3. Several complaints have actually been received from students who
have enjoyed scholarships, full or partial, to the effect that they could
not transfer to other schools since their credentials would not be
released unless they would pay the fees corresponding to the period of
the scholarships. Where the Bureau believes that the right of the
student to transfer is being denied on this ground, it reserves the right
to authorize such transfer."cralaw virtua1aw library
that defendant herein received a copy of this memorandum; that
plaintiff asked the Bureau of Private Schools to pass upon the issue on
his right to secure the transcript of his record in defendant University,
without being required to refund the sum of P1,033.87; that the
Bureau of Private Schools upheld the position taken by the plaintiff and
so advised the defendant; and that, this notwithstanding, the latter
refused to issue said transcript of record, unless said refund were
made, and even recommended to said Bureau that it issue a written
order directing the defendant to release said transcript of record, "so
that the case may be presented to the court for judicial action." As
above stated, plaintiff was, accordingly, constrained to pay, and did
pay under protest, said sum of P1,033.87, in order that he could take
the bar examinations in 1953. Subsequently, he brought this action for
the recovery of said amount, aside from P2,000 as moral damages,
P500 as exemplary damages, P2,000 as attorneys fees, and P500 as
expenses of litigation.

In its answer, defendant reiterated the stand it took vis-a-vis the


Bureau of Private Schools, namely, that the provisions of its contract
with plaintiff are valid and binding, and that the memorandum above-
referred to is null and void. It, likewise, set up a counterclaim for
P10,000.00 as damages, and P3,000 as attorneys fees.

The issue in this case is whether the above quoted provision of the
contract between plaintiff and the defendant whereby the former
waived his right to transfer to another school without refunding to the
latter the equivalent of his scholarships in cash, is valid or not. The
lower court resolved this question in the affirmative, upon the ground
that the aforementioned memorandum of the Director of Private
Schools is not a law; that the provisions thereof are advisory, not
mandatory in nature; and that, although the contractual provision
"may be unethical, yet it was more unethical for plaintiff to quit
studying with the defendant without good reasons and simply because
he wanted to follow the example of his uncle." Moreover, defendant
maintains in its brief that the aforementioned memorandum of the
Director of Private Schools is null and void because said officer had no
authority to issue it, and because it had been neither approved by the
corresponding department head nor published in the official gazette.

We do not deem it necessary or advisable to consider, as the lower


court did, the question whether plaintiff had sufficient reasons or not
to transfer from defendant University to the Abad Santos University.
The nature of the issue before us, and its far reaching effects,
transcend personal equations and demand a determination of the case
from a high impersonal plane. Neither do we deem it essential to pass
upon the validity of said Memorandum No. 38, for, regardless of the
same, we are of the opinion that the stipulation in question is contrary
to public policy and hence, null and void. The aforesaid memorandum
merely incorporates a sound principle of public policy. As the Director
of Private Schools correctly pointed out in his letter, Exhibit B, to the
defendant,

"There is one more point that merits refutation and that is whether or
not the contract entered into between Cui and Arellano University on
September 10, 1951 was void as against public policy. In the case of
Zeigler v. Illinois Trust and Savings Bank, 245 Ill. 180, 19 Ann. Case
127, the court said: In determining a public policy of the state, courts
are limited to a consideration of the Constitution, the judicial decisions,
the statutes, and the practice of government officers. It might take
more than a government bureau or office to lay down or establish a
public policy, as alleged in your communication, but courts consider
the practices of government officials as one of the four factors in
determining a public policy of the state. It has been consistently held
in America that under the principles relating to the doctrine of public
policy, as applied to the law of contracts, courts of justice will not
recognize or uphold a transaction which in its object, operation, or
tendency, is calculated to be prejudicial to the public welfare, to sound
morality, or to civic honesty (Ritter v. Mutual Life Ins. Co., 169 U. S.
139; Heding v. Gallaghere, 64 L.R.A. 811; Veazy v. Allen, 173 N.Y.
359). If Arellano University understood clearly the real essence of
scholarships and the motives which prompted this office to issue
Memorandum No. 38, s. 1949, it should have not entered into a
contract of waiver with Cui on September 10, 1951, which is a direct
violation of our Memorandum and an open challenge to the authority
of the Director of Private Schools because the contract was repugnant
to sound morality and civic honesty. And finally, in Gabriel v. Monte de
Piedad, Off. Gazette Supp. Dec. 6, 1941, p. 67 we read: In order to
declare a contract void as against public policy, a court must find that
the contract as to consideration or the thing to be done, contravenes
some established interest of society, or is inconsistent with sound
policy and good morals, or tends clearly to undermine the security of
individual rights. The policy enunciated in Memorandum No. 33, s.
1949 is sound policy. Scholarships are awarded in recognition of merit
not to keep outstanding students in school to bolster its prestige. In
the understanding of that university scholarships award is a business
scheme designed to increase the business potential of an educational
institution. Thus conceived it is not only inconsistent with sound policy
but also good morals. But what is morals? Manresa has this definition.
It is good customs; those generally accepted principles of morality
which have received some kind of social and practical confirmation.
The practice of awarding scholarships to attract students and keep
them in school is not good customs nor has it received some kind of
social and practical confirmation except in some private institutions as
in Arellano University. The University of the Philippines which
implements Section 5 of Article XIV of the Constitution with reference
to the giving of free scholarships to gifted children, does not require
scholars to reimburse the corresponding value of the scholarships if
they transfer to other schools. So also with the leading colleges and
universities of the United States after which our educational practices
or policies are patterned. In these institutions scholarships are granted
not to attract and to keep brilliant students in school for their
propaganda value but to reward merit or help gifted students in whom
society has an established interest or a first lien." (Emphasis
supplied.)

WHEREFORE, the decision appealed from is hereby reversed, and


another one shall be entered sentencing the defendant to pay to the
plaintiff the sum of P1,033.87, with interest thereon at the legal rate
from September 1, 1954, date of the institution of this case, as well as
the costs, and dismissing defendants counterclaim. It is so ordered.

Bengzon, C.J., Padilla, Labrador, Reyes, J.B.L., Barrera, Paredes,


Dizon, De Leon and Natividad, JJ., concur.

Bautista Angelo, J., reverses his vote.


FIRST DIVISION

[G.R. No. L-28040. August 18, 1972.]

TESTATE ESTATE OF JOSEFA TANGCO JOSE DE BORJA,


administrator-appellee, JOSE DE BORJA, as administrator,
CAYETANO DE BORJA, MATILDE DE BORJA and CRISANTO DE
BORJA (deceased) as Children of Josefa Tangco, Appellees, v.
TASIANA VDA. DE DE BORJA, Special Administratrix of the
Testate Estate of Francisco de Borja, Appellant.

[G.R. No. L-28568.]

TESTATE ESTATE OF THE LATE FRANCISCO DE BORJA, TASIANA


O. VDA. DE DE BORJA, special Administratrix appellee, v. JOSE
DE BORJA, Oppositor-Appellant.

[G.R. No. L-28611.]

TASIANA O. VDA. DE DE BORJA, as Administratrix of the


Testate Estate of the late Francisco de Borja, Plaintiff-Appellee,
v. JOSE DE BORJA, as Administrator of the Testate Estate of the
late Josefa Tangco, Defendant-Appellant.

Pelaez, Jalandoni & Jamir for administrator-appellee.

Quiogue & Quiogue for appellee Matilde de Borja.

Andres Matias for appellee Cayetano de Borja.

Sevilla & Aquino for Appellant.

Sevilla & Aquino for special administratrix-appellee.

Pelaez, Jalandoni & Jamir for Oppositor-Appellant.

Sevilla & Aquino for Plaintiff-Appellee.


Pelaez, Jalandoni & Jamir and David Guevara, for Defendant-
Appellant.

SYLLABUS

1. CIVIL LAW; WILLS AND SUCCESSION; HEREDITARY SHARE IN


ESTATE VESTS FROM THE MOMENT OF DEATH OF DECEDENT; SHARE
IMMEDIATELY DISPOSABLE. The hereditary share in a decedents
estate is transmitted or vested immediately from the moment of the
death of the causante or predecessor in interest (Civil Code of the
Philippines, Art. 777, [3], and there is no legal bar to a successor (with
requisite contracting capacity) disposing of her or his hereditary share
immediately after such death, even if the actual extent of such share
is not determined until the subsequent liquidation of the estate. The
effect of such alienation is to be deemed limited to what is ultimately
adjudicated to the vendor heir, but the aleatory character of the
contract does not affect the validity of the transaction.

2. ID.; ID.: PRESENTATION OF WILL FOR PROBATE NOT NEEDED IN


CONVEYANCE BY HEIR OF HER SHARE. The doctrine enunciated in
Guevara v. Guevara (74 Phil. 749) which states that the presentation
of a will for probate is mandatory and that the settlement and
distribution of an estate on the basis of intestacy when the decedent
left a will is against the law and public policy, is not applicable to the
cases at bar where there was no attempt to settle or distribute the
estate of Francisco De Borja among the heirs thereto before the
probate of his will, the clear object of the compromise contract
between Jose de Borja and Tasiana Ongsingco Vda. de Borja being
merely the conveyance by the latter of any and all her individual share
and interest, actual or eventual, in the estates of Francisco de Borja
and Josefa Tangco.

3. ID.; ID.; ID.; COMPROMISE CONTRACT BINDING ON PARTIES EVEN


IF WITHOUT PROBATE COURT APPROVAL. Since the compromise
contract was entered into by and between "Jose de Borja personally
and as administrator of the Testate Estate of Josefa Tangco" on the
one hand, and on the other, "the heir and surviving spouse of
Francisco de Borja by his second marriage, Tasiana Ongsingco Vda. de
de Borja," it is clear that the transaction was binding on both in their
individual capacities, upon the perfection of the contract, even without
previous authority of the court to enter into the same.

4. ID.; ID.; ID.; ID.; DIFFERENCE BETWEEN EXTRAJUDICIAL


COMPROMISE AND ONE APPROVED BY THE COURT. The only
difference between an extrajudicial compromise and one that is
submitted and approved by the court, is that the latter can be
enforced by execution proceedings.

5. ID.; ID.; ID.; ID., EFFECT OF CONTRACT ON PERSON NOT PARTY


THERETO, INSTANT CASE. The resolutory period of 60 days,
allegedly intended to limit the effectiveness of the compromise
agreement between Tasiana Ongsingco and Jose de Borja, but which
was embodied in another agreement between Ongsingco and the
brothers and sisters of De Borja, does not have any validity as far as
De Borja is concerned since De Borja was not a party to the second
agreement.

6. ID.; ID.; SUCCESSIONAL INTEREST OF COMPULSORY HEIR EXISTS


INDEPENDENT OF WILL OF TESTATOR, OR PROBATE THEREOF. The
prerequisite of a previous probate of a will established in the Guevara
and analogous cases, can not apply to the case of Tasiana Ongsingco
Vda. de de Borja who, as the surviving spouse of Francisco de Borja
was his compulsory heir under articles 995 et. seq. of the present Civil
Code and, barring unworthiness or valid disinheritance, her
successional interest existed independent of Francisco de Borjas last
will and testament and would exist even if such will were not probated
at all.

7. ID.; ID.; HEREDITARY SHARE CAN BE SOLD TO A CO-HEIR. The


owner of the undivided hereditary share could dispose of it in favor of
whomsoever such owner chose. Such alienation is expressly
recognized and provided for by article 1088 of the present Civil Code:
"Art. 1088. Should any of the heirs sell his hereditary rights to a
stranger before the partition, any or all of the co-heirs may be
subrogated to the rights of the purchaser by reimbursing him for the
price of the sale, provided they do so within the period of one month
from the time they were notified in writing of the sale by the vendor."
If a sale of a hereditary right can be made to a stranger, then a fortiori
sale thereof to a coheir could not be forbidden.
8. ID.: CONTRACTS; INABILITY TO REACH NOVATORY ACCORD DOES
NOT INVALIDATE ORIGINALLY VALID CONTRACT. The inability to
reach a novatory accord can not invalidate the original compromise
agreement entered into by the parties and justifies the act of one of
the parties in finally seeking a court order for its approval and
enforcement.

9. ID., PERSONS AND FAMILY RELATIONS; CONJUGAL PARTNERSHIP


PROPERTY; PRESUMPTION OF CONJUGAL CHARACTER OF PROPERTY
CONFIRMED IN INSTANT CASE. The legal presumption in favor of
the conjugal character of the Hacienda de Jalajala concededly acquired
by Francisco de Borja during his marriage to his first wife, cannot be
rebutted by testimony which is plain hearsay having a clearly
discernible ring of artificiality and a statement which is plainly self-
serving and which is not admissible in the absence of cross-
examination. Such legal presumption has actually been confirmed by
the clear admissions against the pecuniary interest of the declarants
Francisco de Borja and his executor-widow Tasiana Ongsingco
consisting of solemn admissions by the former in the Reamended
Inventory and Reamended Accounting in Special Proceedings No. 7866
of the CFI of Rizal and the latters inventory submitted in court listing
the Jalajala property as "Conjugal properties of the Spouses Francisco
de Borja and Josefa Tangco."cralaw virtua1aw library

10. SPECIAL PROCEEDINGS; SETTLEMENT OF ESTATES;


FLUCTUATION IN VALUE OF CURRENCY DOES NOT WARRANT
REVALUATION OF PROPERTIES OF ESTATE. The decision that
"estates, would never be settled if there were to be a revaluation with
every subsequent fluctuation in the values of currency and properties
of the estate," is particularly apposite in the present case where
Tasiana Ongsingco pleads that the time elapsed in the appeal has
affected her unfavorably because, while the purchasing power of the
agreed price of P800,000 has diminished, the value of the Jalajala
property has increased. The fact is that her delay in receiving the
payment of the agreed price for her hereditary interest was primarily
due to her attempts to nullify the agreement she had formally entered
into with the advice of her counsel.

DECISION
REYES, J.B.L., J.:

Of these case, the first, numbered L-28040 is an appeal by Tasiana


Ongsico Vda. de de Borja, special administratrix of the testate estate
of Francisco de Borja, 1 from the approval of a compromise agreement
by the Court of First Instance of Rizal, Branch I. In its Special
Proceeding No. R-7866, entitled, "Testate Estate of Josefa Tangco,
Jose de Borja, Administrator."cralaw virtua1aw library

Case No. L-28568 is an appeal by administrator Jose de Borja from the


disapproval of the same compromise agreement by the Court of First
Instance of Nueva Ecija, Branch II, in its Special Proceeding No. 832,
entitled, "Testate Estate of Francisco de Borja, Tasiana O. Vda. de de
Borja, Special Administratrix."

And Case No. L-28611 is an appeal by administrator Jose de Borja


from the decision of the Court of First Instance of Rizal, Branch X, in
its Civil Case No. 7452, declaring the Hacienda Jalajala Poblacion,
which is the main object of the aforesaid compromise agreement, as
the separate and exclusive property of the late Francisco de Borja and
not a conjugal asset of the community with his first wife, Josefa
Tangco, and that said hacienda pertains exclusively to his testate
estate, which is under administration in Special Proceeding No. 832 of
the Court of First Instance of Nueva Ecija, Branch II.

It is uncontested that Francisco de Borja, upon the death of his wife


Josefa Tangco on 6 October 1940, filed a petition for the probate of
her will which was docketed as Special Proceeding No. R-7866 of the
Court of First Instance of Rizal, Branch I. The will was probated on 2
April 1941. In 1946, Francisco de Borja was appointed executor and
administrator: in 1952, their son, Jose de Borja, was appointed co-
administrator. When Francisco died, on 14 April 1954, Jose became
the sole administrator of the testate estate of his mother, Jose Tangco
While a widower Francisco de Borja allegedly took unto himself a
second wife, Tasiana Ongsingco. Upon Franciscos death, Tasiana
instituted testate proceedings in the Court of First Instance of Nueva
Ecija, where, in 1955, she was appointed special administratrix. The
validity of Tasianas marriage to Francisco was questioned in said
proceeding.

The relationship between the children of the first marriage and Tasiana
Ongsingco has been plagued with several court suits and counter-
suits; including the three cases at bar, some eighteen (18) cases
remain pending determination in the courts. The testate estate of
Josefa Tangco alone has been unsettled for more than a quarter of a
century. In order to put an end to all these litigations, a compromise
agreement was entered into on 12 October 1963, 2 by and between"
[T]he heir and son of Francisco de Borja by his first marriage, namely,
Jose de Borja personally and as administrator of the Testate Estate of
Josefa Tangco," and" [T]he heir and surviving spouse of Francisco de
Borja by his second marriage, Tasiana Ongsingco Vda. de Borja,
assisted by her lawyer, Atty. Luis Panaguiton, Jr." The terms and
conditions of the compromise agreement are as
follows:jgc:chanrobles.com.ph

"A G R E E M E N T

THIS AGREEMENT made and entered into by and between

The heir and son of Francisco de Borja by his first marriage namely,
Jose de Borja personally and as administrator of the Testate Estate of
Josefa Tangco,

AND

The heir and surviving spouse of Francisco de Borja by his second


marriage, Tasiana Ongsingco Vda. de Borja, assisted by her lawyer,
Atty. Luis Panaguiton, Jr.

WITNESSETH

THAT it is the mutual desire of all the parties herein to terminate and
settle, with finality, the various court litigations, controversies, claims,
counterclaims, etc., between them in connection with the
administration, settlement, partition, adjudication and distribution of
the assets as well as liabilities of the estates of Francisco de Borja and
Josefa Tangco, first spouse of Francisco de Borja.

THAT with this end in view, the parties herein have agreed voluntarily
and without any reservations to enter into and execute this agreement
under the following terms and conditions:chanrob1es virtual 1aw
library

1. That the parties agree to sell the Poblacion portion of the Jalajala
properties situated in Jalajala, Rizal, presently under administration in
the Testate Estate of Josefa Tangco (SP. Proc. No. 7866, Rizal), more
specifically described as follows:chanrob1es virtual 1aw library

Linda al Norte con el Rio Puwang que la separa de la jurisdiccion del


Municipio de Pililla de la Provincia de Rizal, y con el pico del Monte
Zambrano; al Oeste con la Laguna de Bay; por el Sur con los
herederos de Marcelo de Borja; y por el Este con los terrenos de la
Familia Maronilla

with a segregated area of approximately 1,313 hectares at the amount


of P0.30 per square meter.

2. That Jose de Borja agrees and obligates himself to pay Tasiana


Ongsingco Vda. de de Borja the total amount of Eight Hundred
Thousand Pesos (P800,000) Philippine Currency, in cash, which
represent P200,000 as his share in the payment and P600,000 as pro-
rata shares of the heirs Crisanto, Cayetano, and Matilde, all surnamed
de Borja and this shall be considered as full and complete payment
and settlement of her hereditary share in the estate of the late
Francisco de Borja as well as the estate of Josefa Tangco, Sp. Proc.
No. 832-Nueva Ecija and Sp. Proc. No. 7866-Rizal, respectively, and to
any properties bequeathed or devised in her favor by the late
Francisco de Borja by Last Will and Testament or by Donation Inter
Vivos or Mortis Causa or purportedly conveyed to her for consideration
or otherwise. The funds for this payment shall be taken from and shall
depend upon the receipt of full payment of the proceeds of the sale of
Jalajala, Poblacion.

3. That Tasiana Ongsinco Vda. de de Borja hereby assumes payment


of that particular obligation incurred by the late Francisco de Borja in
favor of the Rehabilitation Finance Corporation, now Development
Bank of the Philippines, amounting to approximately P30,000.00 and
also assumes payment of her 1/5 share of the Estate and Inheritance
taxes on the Estate of the late Francisco de Borja or the sum of
P3,500.00, more or less, which shall be deducted by the buyer of
Jalajala, Poblacion from the payment to be made to Tasiana
Ongsingco Vda. de Borja under paragraph 2 of this Agreement and
paid directly to the Development Bank of the Philippines and the heirs-
children of Francisco de Borja.

4. Thereafter, the buyer of Jalajala Poblacion is hereby authorized to


pay directly Tasiana Ongsingco Vda. de de Borja the balance of the
payment due her under paragraph 2 of this Agreement (approximately
P766,500.00) and issue in the name of Tasiana Ongsingco Vda. de de
Borja, corresponding certified checks/treasury warrant, who, in turn,
will issue the corresponding receipt to Jose de Borja.

5. In consideration of above payment to Tasiana Ongsingco Vda. de de


Borja, Jose de Borja personally and as administrator of the Testate
Estate of Josefa Tangco, and Tasiana Ongsingco Vda. de de Borja, for
themselves and for their heirs, successors, executors, administrators,
and assigns, hereby forever mutually renounce, withdraw, waive,
remise, release and discharge any and all manner of action or actions,
cause or causes of action, suits, debts, sum or sums of money,
accounts, damages, claims and demands whatsoever, in law or in
equity, which they ever had, or now have or may have against each
other, more specifically Sp. Proceedings Nos. 7866 and 1955, CFI-
Rizal, and Sp. Proc. No 832-Nueva Ecija, Civil Case No. 3033, CFI-
Nueva Ecija and Civil Case No. 7452-CFI, Rizal, as well as the case
filed against Manuel Quijal for perjury with the Provincial Fiscal of
Rizal, the intention being to completely, absolutely and finally release
each other, their heirs, successors, and assigns, from any and all
liability, arising wholly or partially, directly or indirectly, from the
administration, settlement, and distribution of the assets as well as
liabilities of the estates of Francisco de Borja and Josefa Tangco, first
spouse of Francisco de Borja, and lastly, Tasiana Ongsingco Vda. de de
Borja expressly and specifically renounce absolutely her rights as heir
over any hereditary share in the estate of Francisco de Borja.

6. That Tasiana Ongsingco Vda. de de Borja, upon receipt of the


payment under paragraph 4 hereof, shall deliver to the heir Jose de
Borja all the papers, titles and documents belonging to Francisco de
Borja which are in her possession and said heir Jose de Borja shall
issue in turn the corresponding receipt thereof.

7. That this agreement shall take effect only upon the fulfillment of the
sale of the properties mentioned under paragraph 1 of this agreement
and upon receipt of the total and full payment of the proceeds of the
sale of the Jalajala property Poblacion, otherwise, the non-fulfillment
of the said sale will render this instrument NULL AND VOID AND
WITHOUT EFFECT THEREAFTER.

IN WITNESS WHEREOF, the parties hereto have hereunto set their


hands in the City of Manila, Philippines, this 12th of October,
1963."cralaw virtua1aw library

On 16 May 1966, Jose de Borja submitted for Court approval the


agreement of 12 October 1963 to the Court of First Instance of Rizal,
in Special Proceeding No. R-7866; and again, on 8 August 1966, to the
Court of First Instance of Nueva Ecija, in Special Proceeding No. 832.
Tasiana Ongsingco Vda. de de Borja opposed in both instances. The
Rizal court approved the compromise agreement, but the Nueva Ecija
court declared it void and unenforceable. Special administratrix
Tasiana Ongsingco Vda. de de Borja appealed the Rizal Courts order
of approval (now Supreme Court G.R. case No. L-28040), while
administrator Jose de Borja appealed the order of disapproval (G.R.
case No. L-28568) by the Court of First Instance of Nueva Ecija.

The genuineness and due execution of the compromise agreement of


12 October 1963 is not disputed, but its validity is, nevertheless,
attacked by Tasiana Ongsingco on the ground that: (1) the heirs
cannot enter into such kind of agreement without first probating the
will of Francisco de Borja; (2) that the same involves a compromise on
the validity of the marriage between Francisco de Borja and Tasiana
Ongsingco; and (3) that even if it were valid, it has ceased to have
force and effect.

In assailing the validity of the agreement of 12 October 1963, Tasiana


Ongsingco and the Probate Court of Nueva Ecija rely on this Courts
decision in Guevara v. Guevara. 74 Phil. 479, wherein the Courts
majority held the view that the presentation of a will for probate is
mandatory and that the settlement and distribution of an estate on the
basis of intestacy when the decedent left a will, is against the law and
public policy. It is likewise pointed out by appellant Tasiana Ongsingco
that Section 1 of Rule 74 of the Revised Rules explicitly conditions the
validity of an extrajudicial settlement of a decedents estate by
agreement between heirs, upon the facts that" (if) the decedent left no
will and no debts, and the heirs are all of age, or the minors are
represented by their judicial and legal representatives . . ." The will of
Francisco de Borja having been submitted to the Nueva Ecija Court
and still pending probate when the 1963 agreement was made, those
circumstances, it is argued, bar the validity of the agreement.

Upon the other hand, in claiming the validity of the compromise


agreement, Jose de Borja stresses that at the time it was entered into,
on 12 October 1963, the governing provision was Section 1, Rule 74 of
the original Rules of Court of 1940, which allowed the extrajudicial
settlement of the estate of a deceased person regardless of whether
he left a will or not. He also relies on the dissenting opinion of Justice
Moran, in Guevara v. Guevara, 74 Phil. 479, wherein was expressed
the view that if the parties have already divided the estate in
accordance with a decedents will, the probate of the will is a useless
ceremony; and if they have divided the estate in a different manner,
the probate of the will is worse than useless.

The doctrine of Guevara v. Guevara, ante, is not applicable to the case


at bar. This is apparent from an examination of the terms of the
agreement between Jose de Borja and Tasiana Ongsingco. Paragraph 2
of said agreement specifically stipulates that the sum of P800,000
payable to Tasiana Ongsingco

"shall be considered as full complete payment settlement of her


hereditary share in the estate of the late Francisco de Borja as well as
the estate of Josefa Tangco, . . . and to any properties bequeathed or
devised in her favor by the late Francisco de Borja by Last Will and
Testament or by Donation Inter Vivos or Mortis Causa or purportedly
conveyed to her for consideration or otherwise."cralaw virtua1aw
library

This provision evidences beyond doubt that the ruling in the Guevara
case is not applicable to the cases at bar. There was here no attempt
to settle or distribute the estate of Francisco de Borja among the heirs
thereto before the probate of his will. The clear object of the contract
was merely the conveyance by Tasiana Ongsingco of any and all her
individual share and interest, actual or eventual, in the estate of
Francisco de Borja and Josefa Tangco. There is no stipulation as to any
other claimant, creditor or legatee And as a hereditary share in a
decedents estate is transmitted or vested immediately from the
moment of the death of such causante or predecessor in interest (Civil
Code of the Philippines, Art. 777) 3 there is no legal bar to a successor
(with requisite contracting capacity) disposing of her or his hereditary
share immediately after such death, even if the actual extent of such
share is not determined until the subsequent liquidation of the estate.
4 Of course, the effect of such alienation is to be deemed limited to
what is ultimately adjudicated to the vendor heir. However, the
aleatory character of the contract does not affect the validity of the
transaction; neither does the coetaneous agreement that the
numerous litigations between the parties (the approving order of the
Rizal Court enumerates fourteen of them, Rec. App. pp. 79-82) are to
be considered settled and should be dismissed, although such
stipulation, as noted by the Rizal Court, gives the contract the
character of a compromise that the law favors, for obvious reasons, if
only because it serves to avoid a multiplicity of suits.

It is likewise worthy of note in this connection that as the surviving


spouse of Francisco de Borja, Tasiana Ongsingco was his compulsory
heir under article 995 et seq. of the present Civil Code. Wherefore,
barring unworthiness or valid disinheritance, her successional interest
existed independent of Francisco de Borjas last will and testament,
and would exist even if such will were not probated at all. Thus, the
prerequisite of a previous probate of the will, as established in the
Guevara and analogous cases, can not apply to the case of Tasiana
Ongsingco Vda. de de Borja.

Since the compromise contract Annex A was entered into by and


between "Jose de Borja personally and as administrator of the Testate
Estate of Josefa Tangco" on the one hand, and on the other, "the heir
and surviving spouse of Francisco de Borja by his second marriage,
Tasiana Ongsingco Vda. de de Borja", it is clear that the transaction
was binding on both in their individual capacities, upon the perfection
of the contract, even without previous authority of the Court to enter
into the same The only difference between an extrajudicial
compromise and one that is submitted and approved by the Court, is
that the latter can be enforced by execution proceedings. Art. 2037 of
the Civil Code is explicit on the point:chanrob1es virtual 1aw library

Art. 2037. A compromise has upon the parties the effect and authority
of res judicata; but there shall be no execution except in compliance
with a judicial compromise.
It is argued by Tasiana Ongsingco that while the agreement Annex A
expressed no definite period for its performance, the same was
intended to have a resolutory period of 60 days for its effectiveness. In
support of such contention, it is averred that such a limit was
expressly stipulated in an agreement in similar terms entered into by
said Ongsingco with the brothers and sister of Jose de Borja, to wit,
Crisanto, Matilde and Cayetano, all surnamed de Borja, except that the
consideration was fixed at P600,000 (Opposition, Annex/Rec. of
Appeal, L-28040, pp. 39-46) and which contained the following
clause:jgc:chanrobles.com.ph

"III. That this agreement shall take effect only upon the consummation
of the sale of the property mentioned herein and upon receipt of the
total and full payment of the proceeds of the sale by the herein owner
heirs-children of Francisco de Borja, namely, Crisanto, Cayetano and
Matilde, all surnamed de Borja; Provided that if no sale of the said
property mentioned herein is consummated, or the non-receipt of the
purchase price thereof by the said owners within the period of sixty
(60) days from the date hereof, this agreement will become null and
void and of no further effect."cralaw virtua1aw library

Ongsingcos argument loses validity when it is considered that Jose de


Borja was not a party to this particular contract (Annex 1), and that
the same appears not to have been finalized, since it bears no date,
the day being left blank "this day of October 1963" ; and while
signed by the parties, it was not notarized, although plainly intended
to be so done, since it carries a proposed notarial ratification clause.
Furthermore, the compromise contract with Jose de Borja (Annex A),
provides in its par. 2 heretofore transcribed that of the total
consideration of P800,000 to be paid to Ongsingco, P600,000
represent the "pro rata share of the heirs Crisanto, Cayetano and
Matilde, all surnamed de Borja" which corresponds to the consideration
of P600,000 recited in Annex 1, and that circumstance is proof that the
duly notarized contract entered into with Jose de Borja under date 12
October 1963 (Annex A), was designed to absorb and supersede the
separate unformalized agreement with the other three Borja heirs.
Hence, the 60 days resolutory term in the contract with the latter
(Annex 1) not being repeated in Annex A, can not apply to the formal
compromise with Jose de Borja. It is moreover manifest that the
stipulation that the sale of the Hacienda de Jalajala was to be made
within sixty days from the date of the agreement with Jose de Borjas
coheirs (Annex 1) was plainly omitted in Annex A as improper and
ineffective, since the Hacienda de Jalajala (Poblacion) that was to be
sold to raise the P800,000 to be paid to Ongsingco for her share
formed part of the estate of Francisco de Borja and could not be sold
until authorized by the Probate Court. The Court of First Instance of
Rizal so understood it, and in approving the compromise it fixed a
term of 120 days counted from the finality of the order now under
appeal, for the carrying out by the parties of the terms of the contract.

This brings us to the plea that the Court of First In stance of Rizal had
no jurisdiction to approve the compromise with Jose de Borja (Annex
A) because Tasiana Ongsingco was not an heir in the estate of Josefa
Tangco pending settlement in the Rizal Court, but she was an heir of
Francisco de Borja, whose estate was the object of Special Proceeding
No. 832 of the Court of First Instance of Nueva Ecija. This
circumstance is irrelevant, since what was sold by Tasiana Ongsingco
was only her eventual share in the estate of her late husband, not the
estate itself; and as already shown, that eventual share she owned
from the time of Franciscos death and the Court of Nueva Ecija could
not bar her selling it. As owner of her undivided hereditary share,
Tasiana could dispose of it in favor of whomsoever she chose Such
alienation is expressly recognized and provided for by article 1088 of
the present Civil Code:chanrob1es virtual 1aw library

Art. 1088. Should any of the heirs sell his hereditary rights to a
stranger before the partition, any or all of the co-heirs may be
subrogated to the rights of the purchaser by reimbursing him for the
price of the sale, provided they do so within the period of one month
from the time they were notified in writing of the sale of the
vendor."cralaw virtua1aw library

If a sale of a hereditary right can be made to a stranger, then a fortiori


sale thereof to a coheir could not be forbidden.

Tasiana Ongsingco further argues that her contract with Jose de Borja
(Annex "A") is void because it amounts to a compromise as to her
status and marriage with the late Francisco de Borja. The point is
without merit, for the very opening paragraph of the agreement with
Jose de Borja (Annex "A") describes her as "the heir and surviving
spouse of Francisco de Borja by his second marriage, Tasiana
Ongsingco Vda. de de Borja", which is in itself definite admission of
her civil status. There is nothing in the text of the agreement that
would show that this recognition of Ongsingcos status as the surviving
spouse of Francisco de Borja was only made in consideration of the
cession of her hereditary rights.

It is finally charged by appellant Ongsingco, as well as by the Court of


First Instance of Nueva Ecija in its order of 21 September 1964, in
Special Proceedings No. 832 (Amended Record on Appeal in L-28568,
page 157), that the compromise agreement of 13 October 1963
(Annex "A") had been abandoned, as shown by the fact that, after its
execution, the Court of First Instance of Nueva Ecija, in its order of 21
September 1964, had declared that "no amicable settlement had been
arrived at by the parties", and that Jose de Borja himself, in a motion
of 17 June 1964, had stated that the proposed amicable settlement
"had failed to materialize."

It is difficult to believe, however, that the amicable settlement referred


to in the order and motion above-mentioned was the compromise
agreement of 13 October 1963, which already had been formally
signed and executed by the parties and duly notarized. What the
record discloses is that some time after its formalization, Ongsingco
had unilaterally attempted to back out from the compromise
agreement, pleading various reasons restated in the opposition to the
Courts approval of Annex "A" (Record on Appeal, L-20840, page 23):
that the same was invalid because of the lapse of the allegedly
intended resolutory period of 60 days and because the contract was
not preceded by the probate of Francisco de Borjas will, as required
by this Courts Guevarra v. Guevara ruling; that Annex "A" involved a
compromise affecting Ongsingcos status as wife and widow of
Francisco de Borja, etc., all of which objections have been already
discussed. It was natural that in view of the widows attitude, Jose de
Borja should attempt to reach a new settlement or novatory
agreement before seeking judicial sanction and enforcement of Annex
"A", since the latter step might ultimately entail a longer delay in
attaining final remedy. That the attempt to reach another settlement
failed is apparent from the letter of Ongsingcos counsel to Jose de
Borja quoted in pages 35-36 of the brief for appellant Ongsingco in
G.R. No. L-28040; and it is more than probable that the order of 21
September 1964 and the motion of 17 June 1964 referred to the
failure of the parties quest for a more satisfactory compromise. But
the inability to reach a novatory accord can not invalidate the original
compromise (Annex "A") and justifies the act of Jose de Borja in finally
seeking a court order for its approval and enforcement from the Court
of First Instance of Rizal, which, as heretofore described, decreed that
the agreement be ultimately performed within 120 days from the
finality of the order, now under appeal.

We conclude that in so doing, the Rizal court acted in accordance with


law, and, therefore, its order should be upheld, while the contrary
resolution of the Court of First Instance of Nueva Ecija should be, and
is, reversed.

In her brief, Tasiana Ongsingco also pleads that the time elapsed in
the appeal has affected her unfavorably, in that while the purchasing
power of the agreed price of P800,000 has diminished, the value of the
Jalajala property has increased. But the fact is that her delay in
receiving the payment of the agreed price for her hereditary interest
was primarily due to her attempts to nullify the agreement (Annex
"A") she had formally entered into with the advice of her counsel,
Attorney Panaguiton. And as to the devaluation de facto of our
currency, what We said in Dizon Rivera v. Dizon, L-24561, 30 June
1970, 33 SCRA 554, that "estates would never be settled if there were
to be a revaluation with every subsequent fluctuation in the values of
currency and properties of the estate", is particularly opposite in the
present case.

Coming now to Case G.R. No. L-28611, the issue is whether the
Hacienda de Jalajala (Poblacion), concededly acquired by Francisco de
Borja during his marriage to his first wife, Josefa Tangco, is the
husbands private property (as contended by his second spouse,
Tasiana Ongsingco), or whether it forms part of the conjugal
(ganancial) partnership with Josefa Tangco The Court of First Instance
of Rizal (Judge Herminio Mariano, presiding) declared that there was
adequate evidence to overcome the presumption in favor of its
conjugal character established by Article 160 of the Civil Code.

We are of the opinion that this question as between Tasiana Ongsingco


and Jose de Borja has become moot and academic, in view of the
conclusion reached by this Court in the two preceding cases (G.R. No.
L-28568), upholding as valid the cession of Tasiana Ongsingcos
eventual share in the estate of her late husband, Francisco de Borja,
for the sum of P800,000 with the accompanying reciprocal quit-claims
between the parties. But as the question may affect the rights of
possible creditors and legatees, its resolution is still imperative.

It is undisputed that the Hacienda Jalajala, of around 4,363 hectares,


had been originally acquired jointly by Francisco de Borja, Bernardo de
Borja and Marcelo de Borja, and their title thereto was duly registered
in their names as co-owners in Land Registration Case No. 528 of the
province of Rizal, G.L.R.O. Rec. No. 26403 (De Barjo v. Jugo, 54 Phil.
465). Subsequently, in 1931, the Hacienda was partitioned among the
co-owners: the Punta section went to Marcelo de Borja; the
Bagombong section to Bernardo de Borja, and the part in Jalajala
proper (Poblacion) corresponded to Francisco de Borja (V. De Borja v.
De Borja, 101 Phil. 911, 932).

The lot allotted to Francisco was described as

"Una Parcela de terreno en Poblacion, jalajala: N. Puang Rier; E.


Hermogena Romero; S. Heirs of Marcelo de Borja, O. Laguna de Bay;
containing an area of 13,488,870 sq. m. more or less, assessed at
P297,410." (Record on Appeal, pages 7 and 105)

On 20 November 1962, Tasiana O. Vda. de Borja, as Administratrix of


the Testate Estate of Francisco de Borja, instituted a complaint in the
Court of First Instance of Rizal (Civil Case No. 7452) against Jose de
Borja, in his capacity as Administrator of Josefa Tangco (Francisco de
Borjas first wife), seeking to have the Hacienda above described
declared exclusive private property of Francisco, while in his answer
defendant (now appellant) Jose de Borja claimed that it was conjugal
property of his parents (Francisco de Borja and Josefa Tangco),
conformably to the presumption established by Article 160 of the
Philippine Civil Code (reproducing Article 1407 of the Civil Code of
1889), to the effect that:jgc:chanrobles.com.ph

"Art. 160. All property of the marriage is presumed to belong to the


conjugal partnership, unless it be proved that it pertains exclusively to
the husband or to the wife."cralaw virtua1aw library

Defendant Jose de Borja further counterclaimed for damages,


compensatory, moral and exemplary, as well as for attorneys fees.
After trial, the Court of First Instance of Rizal, per Judge Herminio
Mariano, held that the plaintiff had adduced sufficient evidence to
rebut the presumption, and declared the Hacienda de Jalajala
(Poblacion) to be the exclusive private property of the late Francisco
de Borja, and his Administratrix, Tasiana Ongsingco Vda. de Borja, to
be entitled to its possession. Defendant Jose de Borja then appealed to
this Court.

The evidence reveals, and the appealed order admits, that the
character of the Hacienda in question as owned by the conjugal
partnership De Borja-Tangco was solemnly admitted by the late
Francisco de Borja no less than two times: first, in the Reamended
Inventory that, as executor of the estate of his deceased wife Josefa
Tangco, he filed in the Special Proceedings No. 7866 of the Court of
First Instance of Rizal on 23 July 1953 (Exhibit "2"); and again, in the
Reamended Accounting of the same date, also filed in the proceedings
aforesaid (Exhibit "7"). Similarly, the plaintiff Tasiana O. Vda. de
Borja, herself, as oppositor in the Estate of Josefa Tangco, submitted
therein an inventory dated 7 September 1954 (Exhibit "3") listing the
Jalajala property among the "Conjugal Properties of the Spouses
Francisco de Borja and Josefa Tangco." And once more, Tasiana
Ongsingco, as administratrix of the Estate of Francisco de Borja, in
Special Proceedings No. 832 of the Court of First Instance of Nueva
Ecija, submitted therein in December, 1955, an inventory wherein she
listed the Jalajala Hacienda under the heading "Conjugal Property of
the Deceased Spouses Francisco de Borja and Josefa Tangco, which
are in the possession of the Administrator of the Testate Estate of the
Deceased Josefa Tangco in Special Proceedings No 7866 of the Court
of First Instance of Rizal" (Exhibit "4").

Notwithstanding the four statements aforesaid, and the fact that they
are plain admissions against interest made by both Francisco de Borja
and the Administratrix of his estate, in the course of judicial
proceedings in the Rizal and Nueva Ecija Courts, supporting the legal
presumption in favor of the conjugal community, the Court below
declared that the Hacienda de Jalajala (Poblacion) was not conjugal
property, but the private exclusive property of the late Francisco de
Borja. It did so on the strength of the following evidences: (a) the
sworn statement by Francisco de Borja on 6 August 1951 (Exhibit "F")
that
"He tomado posesion del pedazo de terreno ya delimitado (equivalente
a 1/4 parte, 337 hectareas) adjunto a mi terreno personal y exclusivo
(Poblacion de Jalajala, Rizal)."cralaw virtua1aw library

and (b) the testimony of Gregorio de Borja, son of Bernardo de Borja,


that the entire Hacienda had been bought at a foreclosure sale for
P40,100.00, of which amount P25,100 was contributed by Bernardo de
Borja and P15,000.00 by Marcelo de Borja; that upon receipt of a
subsequent demand from the provincial treasurer for realty taxes in
the sum of P17,000, Marcelo told his brother Bernardo that Francisco
(son of Marcelo) wanted also to be a co-owner, and upon Bernardos
assent to the proposal, Marcelo issued a check for P17,000.00 to pay
the back taxes and said that the amount would represent Franciscos
contribution in the purchase of the Hacienda. The witness further
testified that

"Marcelo de Borja said that money was entrusted to him by Francisco


de Borja when he was still a bachelor and which he derived from his
business transactions." (Hearing, 2 February 1965, t.s.n., pages 13-
15) (Emphasis supplied)

The Court below, reasoning that not only Franciscos sworn statement
overweighed the admissions in the inventories relied upon by
defendant-appellant Jose de Borja, since probate courts can not finally
determine questions of ownership of inventoried property, but that the
testimony of Gregorio de Borja showed that Francisco de Borja
acquired his share of the original Hacienda with his own private funds,
for which reason that share can not be regarded as conjugal
partnership property, but as exclusive property of the buyer, pursuant
to Article L-1396 (4) of the Civil Code of 1889 and Article 148 (4) of
the Civil Code of the Philippines.

"The following shall be the exclusive property of each


spouse:chanrob1es virtual 1aw library

x x x

"(4) That which is purchased with exclusive money of the wife or of


the husband."cralaw virtua1aw library
We find the conclusions of the lower court to be untenable. In the first
place, witness Gregorio de Borjas testimony as to the source of the
money paid by Francisco for his share was plain hearsay, hence
inadmissible and of no probative value, since he was merely repeating
what Marcelo de Borja had told him (Gregorio). There is no way of
ascertaining the truth of the statement, since both Marcelo and
Francisco de Borja were already dead when Gregorio testified. In
addition, the statement itself is improbable, since there was no need
or occasion for Marcelo de Borja to explain to Gregorio how and when
Francisco de Borja had earned the P17,000.00 entrusted to Marcelo. A
ring of artificiality is clearly discernible in this portion of Gregorios
testimony.

As to Francisco de Borjas affidavit, Exhibit "F", the quoted portion


thereof (ante, page 14) does not clearly demonstrate that the "mi
terreno personal y exclusivo (Poblacion de Jalajala, Rizal)" refers
precisely to the Hacienda in question. The inventories (Exhibits 3 and
4) disclose that there were two real properties in Jalajala owned by
Francisco de Borja, one of 72.038 sq. m., assessed at P44,600, and a
much bigger one of 1,357.260.70 sq. m., which is evidently the
Hacienda de Jalajala (Poblacion). To which of these lands did the
affidavit of Francisco de Borja (Exhibit "F") refer to? In addition,
Franciscos characterization of the land as "mi terreno personal y
exclusivo" is plainly self-serving, and not admissible in the absence of
cross examination.

It may be true that the inventories relied upon by defendant-appellant


(Exhibits "2", "3", "4" and "7") are not conclusive on the conjugal
character of the property in question; but as already noted, they are
clear admissions against the pecuniary interest of the declarants,
Francisco de Borja and his executor-widow, Tasiana Ongsingco, and as
such of much greater probative weight than the self-serving statement
of Francisco (Exhibit "F"). Plainly, the legal presumption in favor of the
conjugal character of the Hacienda de Jalajala (Poblacion) now in
dispute has not been rebutted but actually confirmed by proof. Hence,
the appealed order should be reversed and the Hacienda de Jalajala
(Poblacion) declared property of the conjugal partnership of Francisco
de Borja and Josefa Tangco.

No error having been assigned against the ruling of the lower court
that claims for damages should be ventilated in the corresponding
special proceedings for the settlement of the estates of the deceased,
the same requires no pronouncement from this Court.

IN VIEW OF THE FOREGOING, the appealed order of the Court of First


Instance of Rizal in Case No. L-28040 is hereby affirmed; while those
involved in Cases Nos. L-28568 and L-28611 are reversed and set
aside. Costs against the appellant Tasiana Ongsingco Vda. de Borja in
all three (3) cases.

Concepcion, C.J., Makalintal, Zaldivar, Castro, Teehankee, Barredo,


Makasiar, Antonio and Esguerra, JJ., concur.

Fernando, J., did not take part.

N BANC

[G.R. No. L-30642. April 30, 1985.]

PERFECTO S. FLORESCA, in his own behalf and on behalf of the


minors ROMULO and NESTOR S. FLORESCA; and ERLINDA
FLORESCA-GABUYO, PEDRO S. FLORESCA, JR., CELSO S.
FLORESCA, MELBA S. FLORESCA, JUDITH S. FLORESCA and
CARMEN S. FLORESCA;

LYDIA CARAMAT VDA. DE MARTINEZ in her own behalf and on


behalf of her minor children LINDA, ROMEO, ANTONIO, JEAN
and ELY, all surnamed Martinez; and DANIEL MARTINEZ and
TOMAS MARTINEZ;

SALUSTIANA ASPIRAS VDA. DE OBRA, in her own behalf and on


behalf of her minor children JOSE, ESTELA, JULITA, SALUD and
DANILO, all surnamed OBRA;

LYDIA CULBENGAN VDA. DE VILLAR, in her own behalf and on


behalf of her minor children EDNA, GEORGE and LARRY III, all
surnamed VILLAR;

DOLORES LOLITA ADER VDA. DE LANUZA, in her own behalf


and on behalf of her minor children EDITHA, ELIZABETH,
DIVINA, RAYMUNDO, NESTOR and AURELIO, JR., all surnamed
LANUZA;

EMERENCIANA JOSE VDA. DE ISLA, in her own behalf and on


behalf of her minor children JOSE, LORENZO, JR., MARIA,
VENUS and FELIX, all surnamed ISLA, Petitioners, v. PHILEX
MINING CORPORATION and HON. JESUS P. MORFE, Presiding
Judge of Branch XIII, Court of First Instance of
Manila, Respondents.

Rodolfo C. Pacampara, for Petitioners.

Tito M. Villaluna for Respondents.

SYLLABUS

1. REMEDIAL LAW; COMPLAINT FOR DAMAGES; CAUSE OF ACTION


ASCERTAINED FROM AVERMENTS IN THE COMPLAINT; CASE AT BAR.
It should be underscored that petitioners complaint is not for
compensation based on the Workmens Compensation Act but a
complaint for damages (actual, exemplary and moral) in the total
amount of eight hundred twenty-five thousand (P825,000.00) pesos.
Petitioners did not invoke the provisions of the Workmens
Compensation Act to entitle them to compensation thereunder. In fact,
no allegation appeared in the complaint that the employees died from
accident arising out of and in the course of their employments. The
complaint instead alleges gross and reckless negligence and deliberate
failure on the part of Philex to protect the lives of its workers as a
consequence of which a cave-in occurred resulting in the death of the
employees working underground. Settled is the rule that in
ascertaining whether or not the cause of action is in the nature of
workmens compensation claim or a claim for damages pursuant to the
provisions of the Civil Code, the test is the averments or allegations in
the complaint (Belandres v. Lopez Sugar Mill, Co., Inc., 97 Phil. 100).
In the present case, there exists between Philex and the deceased
employees a contractual relationship. The alleged gross and reckless
negligence and deliberate failure that amount to bad faith on the part
of Philex, constitute a breach of contract for which it may be held liable
for damages.

2. CIVIL LAW; AWARD OF COMPENSATION BENEFITS UNDER


WORKMENS COMPENSATION ACT; RATIONALE DIFFERS FROM
AWARD OF DAMAGES UNDER THE CIVIL CODE. The rationale in
awarding compensation under the Workmens Compensation Act
differs from that in giving damages under the Civil Code. The
compensation acts are based on a theory of compensation distinct
from the existing theories of damages, payments under the acts being
made as compensation and not as damages (99 C.J.S. 53).
Compensation is given to mitigate the harshness and insecurity of
industrial life for the workman and his family. Hence, an employer is
liable whether negligence exists or not since liability is created by law.
Recovery under the Act is not based on any theory of actionable wrong
on the part of the employer (99 C.J.S. 36). In other words, under the
compensation acts, the employer is liable to pay compensation
benefits for loss of income, as long as the death, sickness or injury is
work-connected or work-aggravated, even if the death or injury is not
due to the fault of the employer (Murillo v. Mendoza, 66 Phil. 689). On
the other hand, damages are awarded to one as a vindication of the
wrongful invasion of his rights. It is the indemnity recoverable by a
person who has sustained injury either in his person, property or
relative rights, through the act or default of another (25 C.J.S. 452).

3. ID.; ID.; CLAIM FOR DAMAGES UNDER THE N.C.C.; BURDEN OF


PROOF. The claimant for damages under the Civil Code has the
burden of proving the causal relation between the defendants
negligence and the resulting injury as well as the damages suffered.
While under the Workmens Compensation Act, there is a presumption
in favor of the deceased or injured employee that the death or injury is
work-connected or work-aggravated; and the employer has the burden
to prove otherwise (De los Angeles v. GSIS, 94 SCRA 308; Cario v.
WCC, 93 SCRA 551; Maria Cristina Fertilizer Corp. v. WCC, 60 SCRA
228).

4. ID.; ID.; ID.; LIABILITY OF EMPLOYER UNDER THE WORKMENS


ACT AND THE CIVIL CODE. Moreover, under the Workmens
Compensation Act, compensation benefits should be paid to an
employee who suffered an accident not due to the facilities or lack of
facilities in the industry of his employer but caused by factors outside
the industrial plant of his employer. Under the Civil Code, the liability
of the employer, depends on breach of contract or tort. The
Workmens Compensation Act was specifically enacted to afford
protection to the employees or workmen. It is a social legislation
designed to give relief to the workman who has been the victim of an
accident causing his death or ailment or injury in the pursuit of his
employment (Abong v. WCC, 54 SCRA 379).

5. ID.; ID.; ID.; CLAIMANTS NOT PRECLUDED FROM BRINGING


ACTION BEFORE THE REGULAR COURTS; RATIONALE. We hold that
although the other petitioners had received the benefits under the
Workmens Compensation Act, such may not preclude them from
bringing an action before the regular court because they became
cognizant of the fact that Philex has been remiss in its contractual
obligations with the deceased miners only after receiving
compensation under the Act. Had petitioners been aware of said
violation of government rules and regulations by Philex, and of its
negligence, they would not have sought redress under the Workmens
Compensation Commission which awarded a lesser amount for
compensation. The choice of the first remedy was based on ignorance
or a mistake of fact, which nullifies the choice as it was not an
intelligent choice. The case should therefore be remanded to the lower
court for further proceedings. However, should the petitioners be
successful in their bid before the lower court, the payments made
under the Workmens Compensation Act should be deducted from the
damages that may be decreed in their favor.

6. ID.; NEGLIGENCE; RECOVERY OF DAMAGES UNDER THE NEW CIVIL


CODE; SUPREME COURT DECISIONS FORM PART OF THE LAW OF THE
LAND. Recovery under the New Civil Code for damages arising from
negligence, is not barred by Article 173 of the New Labor Code. And
the damages recoverable under the New Civil Code are not
administered by the System provided for by the New Labor Code,
which defines the "System" as referring to the Government Service
Insurance System or the Social Security System (Art. 167 [c], [d] and
[e] of the New Labor Code). Furthermore, under Article 8 of the New
Civil Code, decisions of the Supreme Court form part of the law of the
land. WE ruled that judicial decisions of the Supreme Court assume
the same authority as the statute itself (Caltex v. Palomer, 18 SCRA
247; 124 Phil. 763).

7. CONSTITUTIONAL LAW; SOCIAL JUSTICE GUARANTEE; EMPLOYER


NOT RELIEVED FROM LIABILITY FOR DEATH OF HIS WORKERS. The
right to life is guaranteed specifically by the due process clause of the
Constitution. To relieve the employer from liability for the death of his
workers arising from his gross or wanton fault or failure to provide
safety devices for the protection of his employees or workers against
the dangers which are inherent in underground mining, is to deprive
the deceased worker and his heirs of the right to recover indemnity for
the loss of the life of the worker and the consequent loss to his family
without due process of law. The dissent in effect condones and
therefore encourages such gross or wanton neglect on the part of the
employer to comply with his legal obligation to provide safety
measures for the protection of the life, limb and health of his worker.
Even from the moral viewpoint alone, such attitude is un-Christian. It
is therefore patent that giving effect to the social justice guarantees of
the Constitution, as implemented by the provisions of the New Civil
Code, is not an exercise of the power of law-making, but is rendering
obedience to the mandates of the fundamental law and the
implementing legislation aforementioned.

8. LABOR AND SOCIAL LEGISLATIONS; LABOR LAW; NO-FAULT


LIABILITY OF EMPLOYER UNDER SEC. 5 OF WORKMENS
COMPENSATION ACT AND ART. 173, NEW LABOR CODE. It should
be stressed that the liability of the employer under Section 5 of the
Workmens Compensation Act or Article 173 of the New Labor Code is
limited to death, ailment or injury caused by the nature of the work,
without any fault on the part of the employers. It is correctly termed
no-fault liability. Section 5 of the Workmens Compensation Act, as
amended, or Article 173 of the New Labor Code, does not cover the
tortious liability of the employer occasioned by his fault or culpable
negligence in failing to provide the safety devices required by the law
for the protection of the life, limb and health of the workers. Under
either Section 5 or Article 173, the employer remains liable to pay
compensation benefits to the employee, whose death, ailment or
injury is work-connected, even if the employer has faithfully and
diligently furnished all the safety measures and contrivances decreed
by the law to protect the employee.
MELENCIO-HERERA, J., dissenting:chanrob1es virtual 1aw library

1. REMEDIAL LAW; ACTION FOR DAMAGES; DEATH COMPENSATION


OF WORKMEN; COMPLAINT REGULATED BY THE WORKMENS
COMPENSATION LAW. This case involves a complaint for damages
for the death of five employees of PHILEX Mining Corporation under
the general provisions of the Civil Code. The Civil Code itself, however,
provides for its non-applicability to the complaint. It is specifically
provided in Article 2196 of the Code, found in Title XVIII Damages,
that: "Compensation for Workmen and other employees in case of
death, injury or illness is regulated by special laws." By the very
provisions of the Civil Code, it is a "special law", not the Code itself,
which has to apply to the complaint involved in the instant case. That
"special law", in reference to the complaint, can be no other than the
Workmens Compensation Law.

2. ID.; ID.; OPTION TO SUE UNDER THE CIVIL CODE, FORECLOSED;


CASE AT BAR. There are two considerations why it is believed
petitioners should no longer be allowed to exercise the option to sue
under the Civil Code. In the first place, the proceedings under the
Workmens Compensation Act have already become the law in regards
to the "election of remedies", because those proceedings had become
a "finished transaction." In the second place, it should be plainly
equitable that, if a person entitled to an "election of remedies" makes
a first election and accepts the benefits thereof, he should no longer
be allowed to avail himself of the second option. At the very least, if he
wants to make a second election, in disregard of the first election he
has made, when he makes the second election he should surrender
the benefits he had obtained under the first election. This was not
done in the case before the court.

3. LABOR AND SOCIAL LEGISLATIONS; WORKMENS COMPENSATION


ACT; REMEDY UNDER THE ACT, EXCLUSIVE. In providing for
exclusiveness of the remedy under our Workmens Compensation Act,
the Philippine Legislature worded the first paragraph of Section 5 of
the Act as follows: "Sec. 5. Exclusive right to compensation. The
rights and remedies granted by this Act to an employee by reason of a
personal injury entitling him to compensation shall exclude all other
rights and remedies accruing to the employee, his personal
representatives, dependents or nearest of kin against the employer
under the Civil Code and other laws because of said injury."
(Paragraphing and underscoring supplied) There should be no question
but that the original first paragraph of Section 5 of the Workmens
Compensation Act, formulated in 1927, provided that an injured
worker or employee, or his heirs, if entitled to compensation under the
Act, cannot have independent recourse neither to the Civil Code nor to
any other law relative to the liability of the employer. After 1927, there
were occasions when the legislator had the opportunity to amend the
first paragraph of Section 5 such that the remedies under the Act
would not be exclusive; yet, the legislator refrained from doing so.
That shows the legislatives continuing intent to maintain the exclusory
provision of the first paragraph of Section 5 unless otherwise provided
in the Act itself.

GUTIERREZ, JR., J., dissenting:chanrob1es virtual 1aw library

1. LABOR AND SOCIAL LEGISLATIONS; WORKMENS COMPENSATION


ACT; REMOVAL OF EXCLUSORY PROVISION, A LEGISLATIVE
CONCERN. To grant the petition and allow the victims of industrial
accidents to file damages suits based on torts would be a radical
innovation not only contrary to the express provisions of the
Workmens Compensation Act but a departure from the principles
evolved in the long history of workmens compensation. At the very
least, it should be the legislature and not this Court which should
remove the exclusory provision of the Workmens Compensation Act, a
provision reiterated in the present Labor Code on employees
compensation. Workmens compensation evolved to remedy the evils
associated with the situation in the early years of the industrial
revolution when injured workingmen had to rely on damage suits to
get recompense.

2. ID.; ID.; LIABILITY OF EMPLOYER PREDETERMINED; RIGHT OF


INJURED WORKER TO FILE TORT SUIT, GIVEN UP. Workmens
compensation represents a compromise. In return for the near
certainty of receiving a sum of money fixed by law, the injured worker
gives up the right to subject the employer to a tort suit for huge
amounts of damages. Thus, liability not only disregards the element of
fault but it is also a pre-determined amount based on the wages of the
injured worker and in certain cases, the actual cost of rehabilitation.
The worker does not receive the total damages for his pain and
suffering which he could otherwise claim in a civil suit. The employer is
required to act swiftly on compensation claims. An administrative
agency supervises the program. And because the overwhelming mass
of workingmen are benefited by the compensation system, individual
workers who may want to sue for big amounts of damages must yield
to the interests of their entire working class.

DECISION

MAKASIAR, J.:

This is a petition to review the order of the former Court of First


Instance of Manila, Branch XIII, dated December 16, 1968 dismissing
petitioners complaint for damages on the ground of lack of
jurisdiction.

Petitioners are the heirs of the deceased employees of Philex Mining


Corporation (hereinafter referred to as Philex), who, while working at
its copper mines underground operations at Tuba, Benguet on June
28, 1967, died as a result of the cave-in that buried them in the
tunnels of the mine. Specifically, the complaint alleges that Philex, in
violation of government rules and regulations, negligently and
deliberately failed to take the required precautions for the protection of
the lives of its men working underground. Portion of the complaint
reads:cralawnad

"x x x

"9. That for sometime prior and up to June 28, 1967, the defendant
PHILEX, with gross and reckless negligence and imprudence and
deliberate failure to take the required precautions for the due
protection of the lives of its men working underground at the time, and
in utter violation of the laws and the rules and regulations duly
promulgated by the Government pursuant thereto, allowed great
amount of water and mud to accumulate in an open pit area at the
mine above Block 43-S-1 which seeped through and saturated the 600
ft. column of broken ore and rock below it, thereby exerting
tremendous pressure on the working spaces at its 4300 level, with the
result that, on the said date, at about 4 oclock in the afternoon, with
the collapse of all underground supports due to such enormous
pressure, approximately 500,000 cubic feet of broken ores, rocks, mud
and water, accompanied by surface boulders, blasted through the
tunnels and flowed out and filled in, in a matter of approximately five
(5) minutes, the underground workings, ripped timber supports and
carried off materials, machines and equipment which blocked all
avenues of exit, thereby trapping within its tunnels of all its men
above referred to, including those named in the next preceding
paragraph, represented by the plaintiffs herein;

"10. That out of the 48 mine workers who were then working at
defendant PHlLEXs mine on the said date, five (5) were able to escape
from the terrifying holocaust; 22 were rescued within the next 7 days;
and the rest, 21 in number, including those referred to in paragraph 7
herein above, were left mercilessly to their fate, notwithstanding the
fact that up to then, a great many of them were still alive, entombed
in the tunnels of the mine, but were not rescued due to defendant
PHlLEXs decision to abandon rescue operations, in utter disregard of
its bounded legal and moral duties in the premises;

"x x x;

"13. That defendant PHILEX not only violated the law and the rules
and regulations duly promulgated by the duly constituted authorities
as set out by the Special Committee above referred to, in their Report
of Investigation, pages 7-13, Annex `B hereof, but also failed
completely to provide its men working underground the necessary
security for the protection of their lives notwithstanding the fact that it
had vast financial resources, it having made, during the year 1966
alone, a total operating income of P38,220,254.00, or net earnings,
after taxes of P19,117,394.00, as per its 11th Annual Report for the
year ended December 31, 1966, and with aggregate assets totalling
P45,794,103.00 as of December 31, 1966;

"x x x" (pp. 42-44, rec.).

A motion to dismiss dated May 14, 1968 was filed by Philex alleging
that the causes of action of petitioners based on an industrial accident
are covered by the provisions of the Workmens Compensation Act
(Act 3428, as amended by RA 772) and that the former Court of First
Instance has no jurisdiction over the case. Petitioners filed an
opposition dated May 27, 1968 to the said motion to dismiss claiming
that the causes of action are not based on the provisions of the
Workmens Compensation Act but on the provisions of the Civil Code
allowing the award of actual, moral and exemplary damages,
particularly:chanrobles.com:cralaw:red

"Art. 2176. Whoever by act or omission causes damage to another,


there being fault or negligence, is obliged to pay for the damage done.
Such fault or negligence, if there is no pre-existing contractual relation
between the parties, is called a quasi-delict and is governed by the
provisions of this Chapter.

"Art. 2178. The provisions of articles 1172 to 1174 are also applicable
to a quasi-delict.

"(b) Art. 1173 The fault or negligence of the obligor consists in the
omission of that diligence which is required by the nature of the
obligation and corresponds with the circumstances of the persons, of
the time and of the place. When negligence shows bad faith, the
provisions of Articles 1171 and 2201, paragraph 2 shall apply.

"Art. 2201. . . .

"In case of fraud, bad faith, malice or wanton attitude, the obligor shall
be responsible for all damages which may be reasonably attributed to
the non-performance of the obligation.

"Art. 2231. In quasi-delicts, exemplary damages may be granted if the


defendant acted with gross negligence."cralaw virtua1aw library

After a reply and a rejoinder thereto were filed, respondent Judge


issued an order dated June 27, 1968 dismissing the case on the
ground that it falls within the exclusive jurisdiction of the Workmens
Compensation Commission. On petitioners motion for reconsideration
of the said order, respondent Judge, on September 23, 1968,
reconsidered and set aside his order of June 27, 1968 and allowed
Philex to file an answer to the complaint. Philex moved to reconsider
the aforesaid order which was opposed by petitioners.

On December 16, 1968, respondent Judge dismissed the case for lack
of jurisdiction and ruled that in accordance with the established
jurisprudence, the Workmens Compensation Commission has
exclusive original jurisdiction over damage or compensation claims for
work-connected deaths or injuries of workmen or employees,
irrespective of whether or not the employer was negligent, adding that
if the employers negligence results in work-connected deaths or
injuries, the employer shall, pursuant to Section 4-A of the Workmens
Compensation Act, pay additional compensation equal to 50% of the
compensation fixed in the Act.chanrobles virtual lawlibrary

Petitioners thus filed the present petition.

In their brief, petitioners raised the following assignment of


errors:chanrob1es virtual 1aw library

"THE LOWER COURT ERRED IN DISMISSING THE PLAINTIFFS-


PETITIONERS COMPLAINT FOR LACK OF JURISDICTION.

II

"THE LOWER COURT ERRED IN FAILING TO CONSIDER THE CLEAR


DISTINCTION BETWEEN CLAIMS FOR DAMAGES UNDER THE CIVIL
CODE AND CLAIMS FOR COMPENSATION UNDER THE WORKMENS
COMPENSATION ACT."cralaw virtua1aw library

In the first assignment of error, petitioners argue that the lower court
has jurisdiction over the cause of action since the complaint is based
on the provisions of the Civil Code on damages, particularly Articles
2176, 2178, 1173, 2201 and 2231, and not on the provisions of the
Workmens Compensation Act. They point out that the complaint
alleges gross and brazen negligence on the part of Philex in failing to
take the necessary security for the protection of the lives of its
employees working underground. They also assert that since Philex
opted to file a motion to dismiss in the court a quo, the allegations in
their complaint including those contained in the annexes are deemed
admitted.
In the second assignment of error, petitioners asseverate that
respondent Judge failed to see the distinction between the claims for
compensation under the Workmens Compensation Act and the claims
for damages based on gross negligence of Philex under the Civil Code.
They point out that workmens compensation refers to liability for
compensation for loss resulting from injury, disability or death of the
working man through industrial accident or disease, without regard to
the fault or negligence of the employer, while the claim for damages
under the Civil Code which petitioners pursued in the regular court,
refers to the employers liability for reckless and wanton negligence
resulting in the death of the employees and for which the regular court
has jurisdiction to adjudicate the same.

On the other hand, Philex asserts that work-connected injuries are


compensable exclusively under the provisions of Sections 5 and 46 of
the Workmens Compensation Act, which read:jgc:chanrobles.com.ph

"SEC. 5. Exclusive right to compensation. The rights and remedies


granted by this Act to an employee by reason of a personal injury
entitling him to compensation shall exclude all other rights and
remedies accruing to the employee, his personal representatives,
dependents or nearest of kin against the employer under the Civil
Code and other laws because of said injury . . .

"SEC. 46. Jurisdiction. The Workmens Compensation Commissioner


shall have exclusive jurisdiction to hear and decide claims for
compensation under the Workmens Compensation Act, subject to
appeal to the Supreme Court, . . ."cralaw virtua1aw library

Philex cites the case of Manalo v. Foster Wheeler (98 Phil. 855 [1956])
where it was held that "all claims of workmen against their employer
for damages due to accident suffered in the course of employment
shall be investigated and adjudicated by the Workmens Compensation
Commission," subject to appeal to the Supreme Court.chanrobles
virtual lawlibrary

Philex maintains that the fact that an employer was negligent, does
not remove the case from the exclusive character of recoveries under
the Workmens Compensation Act; because Section 4-A of the Act
provides an additional compensation in case the employer fails to
comply with the requirements of safety as imposed by law to prevent
accidents. In fact, it points out that Philex voluntarily paid the
compensation due the petitioners and all the payments have been
accepted in behalf of the deceased miners, except the heirs of Nazarito
Floresca who insisted that they are entitled to a greater amount of
damages under the Civil Code.

In the hearing of this case, then Undersecretary of Labor Israel


Bocobo, then Atty. Edgardo Angara, now President of the University of
the Philippines, Justice Manuel Lazaro, as corporate counsel and
Assistant General Manager of the GSIS Legal Affairs Department, and
Commissioner on Elections, formerly UP Law Center Director Froilan
Bacungan, appeared as amici curiae and thereafter, submitted their
respective memoranda.

The issue to be resolved as WE stated in the resolution of November


26, 1976, is:chanrobles virtual lawlibrary

"Whether the action of an injured employee or worker or that of his


heirs in case of his death under the Workmens Compensation Act is
exclusive, selective or cumulative, that is to say, whether his or his
heirs action is exclusively restricted to seeking the limited
compensation provided under the Workmens Compensation Act or
whether they have a right of selection or choice of action between
availing of the workers right under the Workmens Compensation Act
and suing in the regular courts under the Civil Code for higher
damages (actual, moral and/or exemplary) from the employer by
virtue of negligence (or fault) of the employer or of his other
employees or whether they may avail cumulatively of both actions,
i.e., collect the limited compensation under the Workmens
Compensation Act and sue in addition for damages in the regular
courts."cralaw virtua1aw library

There are divergent opinions in this case. Justice Lazaro is of the


opinion that an injured employee or worker, or the heirs in case of his
death, may initiate a complaint to recover damages (not compensation
under the Workmens Compensation Act) with the regular court on the
basis of negligence of an employer pursuant to the Civil Code
provisions. Atty. Angara believes otherwise. He submits that the
remedy of an injured employee for work-connected injury or accident
is exclusive in accordance with Section 5 of the Workmens
Compensation Act, while Atty. Bacungans position is that the action is
selective. He opines that the heirs of the employee in case of his death
have a right of choice to avail themselves of the benefits provided
under the Workmens Compensation Act or to sue in the regular court
under the Civil Code for higher damages from the employer by virtue
of negligence of the latter. Atty. Bocobos stand is the same as that of
Atty. Bacungan and adds that once the heirs elect the remedy
provided for under the Act, they are no longer entitled to avail
themselves of the remedy provided for under the Civil Code by filing
an action for higher damages in the regular court, and vice versa.

On August 3, 1978, petitioners-heirs of deceased employee Nazarito


Floresca filed a motion to dismiss on the ground that they have
amicably settled their claim with respondent Philex. In the resolution
of September 7, 1978, WE dismissed the petition only insofar as the
aforesaid petitioners are connected, it appearing that there are other
petitioners in this case.

WE hold that the former Court of First Instance has jurisdiction to try
the case.

It should be underscored that petitioners complaint is not for


compensation based on the Workmens Compensation Act but a
complaint for damages (actual, exemplary and moral) in the total
amount of eight hundred twenty-five thousand (P825,000.00) pesos.
Petitioners did not invoke the provisions of the Workmens
Compensation Act to entitle them to compensation thereunder. In fact,
no allegation appeared in the complaint that the employees died from
accident arising out of and in the course of their employments. The
complaint instead alleges gross and reckless negligence and deliberate
failure on the part of Philex to protect the lives of its workers as a
consequence of which a cave-in occurred resulting in the death of the
employees working underground. Settled is the rule that in
ascertaining whether or not the cause of action is in the nature of
workmens compensation claim or a claim for damages pursuant to the
provisions of the Civil Code, the test is the averments or allegations in
the complaint (Belandres v. Lopez Sugar Mill, Co., Inc., 97 Phil.
100).chanrobles.com:cralaw:red

In the present case, there exists between Philex and the deceased
employees a contractual relationship. The alleged gross and reckless
negligence and deliberate failure that amount to bad faith on the part
of Philex, constitute a breach of contract for which it may be held liable
for damages. The provisions of the Civil Code on cases of breach of
contract when there is fraud or bad faith, read:jgc:chanrobles.com.ph

"Art. 2232. In contracts and quasi-contracts, the court may award


exemplary damages if the defendant acted in a wanton, fraudulent,
reckless, oppressive or malevolent manner.

"Art. 2201. In contracts and quasi-contracts, the damages for which


the obligor who acted in good faith is liable shall be those that are the
natural and probable consequences of the breach of the obligation, and
which the parties have foreseen or could have reasonably foreseen at
the time the obligation was constituted.

"In cases of fraud, bad faith, malice or wanton attitude, the obligor
shall be responsible for all damages which may be reasonably
attributed to the non-performance of the obligation."cralaw virtua1aw
library

Furthermore, Articles 2216 et seq., Civil Code, allow the payment of all
kinds of damages, as assessed by the court.

The rationale in awarding compensation under the Workmens


Compensation Act differs from that in giving damages under the Civil
Code. The compensation acts are based on a theory of compensation
distinct from the existing theories of damages, payments under the
acts being made as compensation and not as damages (99 C.J.S. 53).
Compensation is given to mitigate the harshness and insecurity of
industrial life for the workman and his family. Hence, an employer is
liable whether negligence exists or not since liability is created by law.
Recovery under the Act is not based on any theory of actionable wrong
on the part of the employer (99 C.J.S. 36).

In other words, under the compensation acts, the employer is liable to


pay compensation benefits for loss of income, as long as the death,
sickness or injury is work-connected or work-aggravated, even if the
death or injury is not due to the fault of the employer (Murillo v.
Mendoza, 66 Phil. 689). On the other hand, damages are awarded to
one as a vindication of the wrongful invasion of his rights. It is the
indemnity recoverable by a person who has sustained injury either in
his person, property or relative rights, through the act or default of
another (25 C.J.S. 452).chanrobles.com.ph : virtual law library

The claimant for damages under the Civil Code has the burden of
proving the causal relation between the defendants negligence and
the resulting injury as well as the damages suffered. While under the
Workmens Compensation Act, there is a presumption in favor of the
deceased or injured employee that the death or injury is work-
connected or work-aggravated; and the employer has the burden to
prove otherwise (De los Angeles v. GSIS, 94 SCRA 308; Cario v.
WCC, 93 SCRA 551; Maria Cristina Fertilizer Corp. v. WCC, 60 SCRA
228).

The claim of petitioners that the case is not cognizable by the


Workmens Compensation Commission then, now Employees
Compensation Commission, is strengthened by the fact that unlike in
the Civil Code, the Workmens Compensation Act did not contain any
provision for an award of actual, moral and exemplary damages. What
the Act provided was merely the right of the heirs to claim limited
compensation for the death in the amount of six thousand (P6,000.00)
pesos plus burial expenses of two hundred (P200.00) pesos, and
medical expenses when incurred (Sections 8, 12 and 13, Workmens
Compensation Act), and an additional compensation of only 50% if the
complaint alleges failure on the part of the employer to "install and
maintain safety appliances or to take other precautions for the
prevention of accident or occupational disease" (Section 4-A, Ibid.). In
the case at bar, the amount sought to be recovered is over and above
that which was provided under the Workmens Compensation Act and
which cannot be granted by the Commission.

Moreover, under the Workmens Compensation Act, compensation


benefits should be paid to an employee who suffered an accident not
due to the facilities or lack of facilities in the industry of his employer
but caused by factors outside the industrial plant of his employer.
Under the Civil Code, the liability of the employer, depends on breach
of contract or tort. The Workmens Compensation Act was specifically
enacted to afford protection to the employees or workmen. It is a
social legislation designed to give relief to the workman who has been
the victim of an accident causing his death or ailment or injury in the
pursuit of his employment (Abong v. WCC, 54 SCRA 379).
WE now come to the query as to whether or not the injured employee
or his heirs in case of death have a right of selection or choice of
action between availing themselves of the workers right under the
Workmens Compensation Act and suing in the regular courts under
the Civil Code for higher damages (actual, moral and exemplary) from
the employers by virtue of the negligence or fault of the employers or
whether they may avail themselves cumulatively of both actions, i.e.,
collect the limited compensation under the Workmens Compensation
Act and sue in addition for damages in the regular courts.

In disposing of a similar issue, this Court in Pacaa v. Cebu Autobus


Company, 32 SCRA 442, ruled that an injured worker has a choice of
either to recover from the employer the fixed amounts set by the
Workmens Compensation Act or to prosecute an ordinary civil action
against the tortfeasor for higher damages but he cannot pursue both
courses of action simultaneously.chanrobles virtual lawlibrary

In Pacaa WE said:jgc:chanrobles.com.ph

"In the analogous case of Esguerra v. Muoz Palma, involving the


application of Section 6 of the Workmens Compensation Act on the
injured workers right to sue third-party tortfeasors in the regular
courts, Mr. Justice J.B.L. Reyes, again speaking for the Court, pointed
out that the injured worker has the choice of remedies but cannot
pursue both courses of action simultaneously and thus balanced the
relative advantage of recourse under the Workmens Compensation
Act as against an ordinary action.

"As applied to this case, petitioner Esguerra cannot maintain his action
for damages against the respondents (defendants below), because he
has elected to seek compensation under the Workmens Compensation
Law, and his claim (case No. 44549 of the Compensation Commission)
was being processed at the time he filed this action in the Court of
First Instance. It is argued for petitioner that as the damages
recoverable under the Civil Code are much more extensive than the
amounts that may be awarded under the Workmens Compensation
Act, they should not be deemed incompatible. As already indicated,
the injured laborer was initially free to choose either to recover from
the employer the fixed amounts set by the Compensation Law or else,
to prosecute an ordinary civil action against the tortfeasor for higher
damages. While perhaps not as profitable, the smaller indemnity
obtainable by the first course is balanced by the claimants being
relieved of the burden of proving the causal connection between the
defendants negligence and the resulting injury, and of having to
establish the extent of the damage suffered; issues that are apt to be
troublesome to establish satisfactorily. Having staked his fortunes on a
particular remedy, petitioner is precluded from pursuing the alternate
course, at least until the prior claim is rejected by the Compensation
Commission. Anyway, under the proviso of Section 6 aforequoted, if
the employer Franklin Baker Company recovers, by derivative action
against the alleged tortfeasors, a sum greater than the compensation
he may have paid the herein petitioner, the excess accrues to the
latter."cralaw virtua1aw library

Although the doctrine in the case of Esguerra v. Muoz Palma (104


Phil. 582), applies to third-party tortfeasor, said rule should likewise
apply to the employer-tortfeasor.

Insofar as the heirs of Nazarito Floresca are concerned, as already


stated, the petition has been dismissed in the resolution of September
7, 1978 in view of the amicable settlement reached by Philex and the
said heirs.

With regard to the other petitioners, it was alleged by Philex in its


motion to dismiss dated May 14, 1968 before the court a quo, that the
heirs of the deceased employees, namely Emerito Obra, Larry Villar,
Jr., Aurelio Lanuza, Lorenzo Isla and Saturnino Martinez submitted
notices and claims for compensation to the Regional Office No. 1 of the
then Department of Labor and all of them have been paid in full as of
August 25, 1967, except Saturnino Martinez whose heirs decided that
they be paid in installments (pp. 106-107, rec.). Such allegation was
admitted by herein petitioners in their opposition to the motion to
dismiss dated May 27, 1968 (pp. 121-122, rec.) in the lower court, but
they set up the defense that the claims were filed under the
Workmens Compensation Act before they learned of the official report
of the committee created to investigate the accident which established
the criminal negligence and violation of law by Philex, and which report
was forwarded by the Director of Mines to the then Executive
Secretary Rafael Salas in a letter dated October 19, 1967 only (p. 76,
rec.).chanrobles law library : red

WE hold that although the other petitioners had received the benefits
under the Workmens Compensation Act, such may not preclude them
from bringing an action before the regular court because they became
cognizant of the fact that Philex has been remiss in its contractual
obligations with the deceased miners only after receiving
compensation under the Act. Had petitioners been aware of said
violation of government rules and regulations by Philex, and of its
negligence, they would not have sought redress under the Workmens
Compensation Commission which awarded a lesser amount for
compensation. The choice of the first remedy was based on ignorance
or a mistake of fact, which nullifies the choice as it was not an
intelligent choice. The case should therefore be remanded to the lower
court for further proceedings. However, should the petitioners be
successful in their bid before the lower court, the payments made
under the Workmens Compensation Act should be deducted from the
damages that may be decreed in their favor.

Contrary to the perception of the dissenting opinion, the Court does


not legislate in the instant case. The Court merely applies and gives
effect to the constitutional guarantees of social justice then secured by
Section 5 of Article II and Section 6 of Article XIV of the 1935
Constitution, and now by Sections 6, 7, and 9 of Article II of the
DECLARATION OF PRINCIPLES AND STATE POLICIES of the 1973
Constitution, as amended, and as implemented by Articles 2176, 2177,
2178, 1173, 2201, 2216, 2231 and 2232 of the New Civil Code of
1950.

To emphasize, the 1935 Constitution declares


that:jgc:chanrobles.com.ph

"Sec. 5. The promotion of social justice to insure the well-being and


economic security of all the people should be the concern of the State"
(Art. II).

"Sec. 6. The State shall afford protection to labor, especially to


working women, and minors, and shall regulate the relations between
landowner and tenant, and between labor and capital in industry and
in agriculture. The State may provide for compulsory arbitration" (Art.
XIV).
The 1973 Constitution likewise commands the State to "promote social
justice to insure the dignity, welfare, and security of all the people;" ."
. . regulate the use . . . and disposition of private property, and
equitably diffuse property ownership and profits" ; "establish, maintain
and ensure adequate social services in the field of education, health,
housing, employment, welfare and social security to guarantee the
enjoyment by the people of a decent standard of living" (Sections 6
and 7, Art. II, 1973 Constitution);." . . afford protection to labor, . . .
and regulate the relations between workers and employers . . ., and
assure the rights of workers to . . . just and humane conditions of
work" (Sec. 9, Art. II, 1973 Constitution, Italics supplied).

The foregoing constitutional guarantees in favor of labor


institutionalized in Section 9 of Article II of the 1973 Constitution and
re-stated as a declaration of basic policy in Article 3 of the New Labor
Code, thus:jgc:chanrobles.com.ph

"Art 3. Declaration of basic policy. The State shall afford protection


to labor, promote full employment, ensure equal work opportunities
regardless of sex, race or creed, and regulate the relations between
workers and employers. The State shall assure the rights of workers to
self-organization, collective bargaining, security of tenure, and just
and humane conditions of work" (Italics supplied).

The aforestated constitutional principles as implemented by the


aforementioned articles of the New Civil Code cannot be impliedly
repealed by the restrictive provisions of Article 173 of the New Labor
Code. Section 5 of the Workmens Compensation Act (before it was
amended by R. A. No. 772 on June 20, 1952), predecessor of Article
173 of the New Labor Code, has been superseded by the aforestated
provisions of the New Civil Code, a subsequent law, which took effect
on August 30, 1950, which obey the constitutional mandates of social
justice enhancing as they do the rights of the workers as against their
employers. Article 173 of the New Labor Code seems to diminish the
rights of the workers and therefore collides with the social justice
guarantee of the Constitution and the liberal provisions of the New
Civil Code.chanrobles virtual lawlibrary

The guarantees of social justice embodied in Sections 6, 7 and 9 of


Article II of the 1973 Constitution are statements of legal principles to
be applied and enforced by the courts. Mr. Justice Robert Jackson in
the case of West Virginia State Board of Education v. Barnette, with
characteristic eloquence, enunciated:jgc:chanrobles.com.ph

"The very purpose of a Bill of Rights was to withdraw certain subjects


from the vicissitudes of political controversy, to place them beyond the
reach of majorities and officials and to establish them as legal
principles to be applied by the courts. Ones right to life, liberty, and
property, to free speech, a free press, freedom of worship and
assembly, and other fundamental rights may not be submitted to vote;
they depend on the outcome of no elections" (319 U.S. 625, 638, 87 L.
ed. 1638, Italics supplied).

In case of any doubt which may be engendered by Article 173 of the


New Labor Code, both the New Labor Code and the Civil Code direct
that the doubts should be resolved in favor of the workers and
employees.

Thus, Article 4 of the New Labor Code, otherwise known as Presidential


Decree No. 442, as amended, promulgated on May 1, 1974, but which
took effect six months thereafter, provides that "all doubts in the
implementation and interpretation of the provisions of this Code,
including its implementing rules and regulations, shall be resolved in
favor of labor" (Art. 2, Labor Code).

Article 10 of the New Civil Code states: "In case of doubt in the
interpretation or application of laws, it is presumed that the law-
making body intended right and justice to prevail."cralaw virtua1aw
library

More specifically, Article 1702 of the New Civil Code likewise directs
that. "In case of doubt, all labor legislation and all labor contracts shall
be construed in favor of the safety and decent living of the
laborer."cralaw virtua1aw library

Before it was amended by Commonwealth Act No. 772 on June 20,


1952, Section 5 of the Workmens Compensation Act
provided:jgc:chanrobles.com.ph

"Sec. 5. Exclusive right to compensation. The rights and remedies


granted by this Act to an employee by reason of a personal injury
entitling him to compensation shall exclude all other rights and
remedies accruing to the employee, his personal representatives,
dependents or nearest of kin against the employer under the Civil
Code and other laws, because of said injury (Italics supplied).

"Employers contracting laborers in the Philippine Islands for work


outside the same may stipulate with such laborers that the remedies
prescribed by this Act shall apply exclusively to injuries received
outside the Islands through accidents happening in and during the
performance of the duties of the employment; and all service contracts
made in the manner prescribed in this section shall be presumed to
include such agreement."cralaw virtua1aw library

Only the second paragraph of Section 5 of the Workmens


Compensation Act No. 3428, was amended by Commonwealth Act No.
772 on June 20, 1952, thus:jgc:chanrobles.com.ph

"Sec. 5. Exclusive right to compensation. The rights and remedies


granted by this Act to an employee by reason of a personal injury
entitling him to compensation shall exclude all other rights and
remedies accruing to the employee, his personal representatives,
dependents or nearest of kin against the employer under the Civil
Code and other laws, because of said injury.

"Employers contracting laborers in the Philippine Islands for work


outside the same shall stipulate with such laborers that the remedies
prescribed by this Act shall apply to injuries received outside the
Island through accidents happening in and during the performance of
the duties of the employment. Such stipulation shall not prejudice the
right of the laborers to the benefits of the Workmens Compensation
Law of the place where the accident occurs, should such law be more
favorable to them (As amended by section 5 of Republic Act No.
772)."cralaw virtua1aw library

Article 173 of the New Labor Code does not repeal expressly nor
impliedly the applicable provisions of the New Civil Code, because said
Article 173 provides:jgc:chanrobles.com.ph

"Art, 173. Exclusiveness of liability. Unless otherwise provided, the


liability of the State Insurance Fund under this Title shall be exclusive
and in place of all other liabilities of the employer to the employee, his
dependents or anyone otherwise entitled to receive damages on behalf
of the employee or his dependents. The payment of compensation
under this Title shall bar the recovery of benefits as provided for in
Section 699 of the Revised Administrative Code, Republic Act
Numbered Eleven hundred sixty-one, as amended, Commonwealth Act
Numbered One hundred eighty-six, as amended, Commonwealth Act
Numbered Six hundred ten, as amended, Republic Act Numbered
Forty-eight hundred Sixty-four, as amended, and other laws whose
benefits are administered by the System, during the period of such
payment for the same disability or death, and conversely" (Italics
supplied).

As above-quoted, Article 173 of the New Labor Code expressly


repealed only Section 699 of the Revised Administrative Code, R.A.
No. 1161, as amended, C.A. No. 186, as amended, R.A. No. 610, as
amended, R.A. No. 4864, as amended, and all other laws whose
benefits are administered by the System (referring to the GSIS or
SSS).chanroblesvirtualawlibrary

Unlike Section 5 of the Workmens Compensation Act as afore-quoted,


Article 173 of the New Labor Code does not even remotely, much less
expressly, repeal the New Civil Code provisions heretofore quoted.

It is patent, therefore, that recovery under the New Civil Code for
damages arising from negligence, is not barred by Article 173 of the
New Labor Code. And the damages recoverable under the New Civil
Code are not administered by the System provided for by the New
Labor Code, which defines the "System" as referring to the
Government Service Insurance System or the Social Security System
(Art. 167 [c], [d] and [e] of the New Labor Code).

Furthermore, under Article 8 of the New Civil Code, decisions of the


Supreme Court form part of the law of the land.

Article 8 of the New Civil Code provides:jgc:chanrobles.com.ph

"Art. 8. Judicial decisions applying or interpreting the laws or the


Constitution shall form a part of the legal system of the
Philippines."cralaw virtua1aw library

The Court, through the late Chief Justice Fred Ruiz Castro, in People v.
Licera, ruled:jgc:chanrobles.com.ph

"Article 8 of the Civil Code of the Philippines decrees that judicial


decisions applying or interpreting the laws or the Constitution form
part of this jurisdictions legal system. These decisions, although in
themselves not laws, constitute evidence of what the laws mean. The
application or interpretation placed by the Court upon a law is part of
the law as of the date of the enactment of the said law since the
Courts application or interpretation merely establishes the
contemporaneous legislative intent that the construed law purports to
carry into effect" (65 SCRA 270, 272-273 [1975]).

WE ruled that judicial decisions of the Supreme Court assume the


same authority as the statute itself (Caltex v. Palomer, 18 SCRA 247;
124 Phil. 763).

The afore-quoted provisions of Section 5 of the Workmens


Compensation Act, before and after it was amended by Commonwealth
Act No. 772 on June 20, 1952, limited the right of recovery in favor of
the deceased, ailing or injured employee to the compensation provided
for therein. Said Section 5 was not accorded controlling application by
the Supreme Court in the 1970 case of Pacaa v. Cebu Autobus
Company (32 SCRA 442) when WE ruled that an injured worker has a
choice of either to recover from the employer the fixed amount set by
the Workmens Compensation Act or to prosecute an ordinary civil
action against the tortfeasor for greater damages; but he cannot
pursue both courses of action simultaneously. Said Pacaa case
penned by Mr. Justice Teehankee, applied Article 1711 of the Civil
Code as against the Workmens Compensation Act, reiterating the
1969 ruling in the case of Valencia v. Manila Yacht Club (28 SCRA 724,
June 30, 1969) and the 1958 case of Esguerra v. Muoz Palma (104
Phil. 582), both penned by Justice J.B.L. Reyes. Said Pacaa case was
concurred in by Justices J.B.L. Reyes, Dizon, Makalintal, Zaldivar,
Castro, Fernando and Villamor.

Since the first sentence of Article 173 of the New Labor Code is merely
a re-statement of the first paragraph of Section 5 of the Workmens
Compensation Act, as amended, and does not even refer, neither
expressly nor impliedly, to the Civil Code as Section 5 of the
Workmens Compensation Act did, with greater reason said Article 173
must be subject to the same interpretation adopted in the cases of
Pacaa, Valencia and Esguerra aforementioned as the doctrine in the
aforesaid three (3) cases is faithful to and advances the social justice
guarantees enshrined in both the 1935 and 1973 Constitutions.

It should be stressed likewise that there is no similar provision on


social justice in the American Federal Constitution, nor in the various
state constitutions of the American Union. Consequently, the
restrictive nature of the American decisions on the Workmens
Compensation Act cannot limit the range and compass of OUR
interpretation of our own laws, especially Article 1711 of the New Civil
Code, vis-a-vis Article 173 of the New Labor Code, in relation to
Section 5 of Article II and Section 6 of Article XIV of the 1935
Constitution then, and now Sections 6, 7 and 9 of the Declaration of
Principles and State Policies of Article II of the 1973
Constitution.chanrobles lawlibrary : rednad

The dissent seems to subordinate the life of the laborer to the property
rights of the employer. The right to life is guaranteed specifically by
the due process clause of the Constitution. To relieve the employer
from liability for the death of his workers arising from his gross or
wanton fault or failure to provide safety devices for the protection of
his employees or workers against the dangers which are inherent in
underground mining, is to deprive the deceased worker and his heirs
of the right to recover indemnity for the loss of the life of the worker
and the consequent loss to his family without due process of law. The
dissent in effect condones and therefore encourages such gross or
wanton neglect on the part of the employer to comply with his legal
obligation to provide safety measures for the protection of the life,
limb and health of his worker. Even from the moral viewpoint alone,
such attitude is un-Christian.

It is therefore patent that giving effect to the social justice guarantees


of the Constitution, as implemented by the provisions of the New Civil
Code, is not an exercise of the power of law-making, but is rendering
obedience to the mandates of the fundamental law and the
implementing legislation aforementioned.

The Court, to repeat, is not legislating in the instant case.

It is axiomatic that no ordinary statute can override a constitutional


provision.
The words of Section 5 of the Workmens Compensation Act and of
Article 173 of the New Labor Code subvert the rights of the petitioners
as surviving heirs of the deceased mining employees. Section 5 of the
Workmens Compensation Act and Article 173 of the New Labor Code
are retrogressive; because they are a throwback to the obsolete
laissez-faire doctrine of Adam Smith enunciated in 1776 in his treatise
Wealth of Nations (Colliers Encyclopedia, Vol. 21, p. 93, 1964), which
has been discarded soon after the close of the 18th century due to the
Industrial Revolution that generated the machines and other
mechanical devices (beginning with Eli Whitneys cotton gin of 1793
and Robert Fultons steamboat of 1807) for production and
transportation which are dangerous to life, limb and health. The old
socio-political-economic philosophy of live-and-let-live is now
superdesed by the benign Christian shibboleth of live-and-help others
to live. Those who profess to be Christians should not adhere to Cains
selfish affirmation that he is not his brothers keeper. In this our
civilization, each one of us is our brothers keeper. No man is an
island. To assert otherwise is to be as atavistic and ante-deluvian as
the 1837 case of Prisley v. Fowler (3 MN 1,150 reprint 1030) invoked
by the dissent. The Prisley case was decided in 1837 during the era of
economic royalists and robber barons of America. Only ruthless,
unfeeling capitalistics and egoistic reactionaries continue to pay
obeisance to such un-Christian doctrine. The Prisley rule humiliates
man and debases him; because the decision derisively refers to the
lowly worker as "servant" and utilizes with aristocratic arrogance
"master" for "employer." It robs man of his inherent dignity and
dehumanizes him. To stress this affront to human dignity, WE only
have to restate the quotation from Prisley, thus: "The mere relation of
the master and the servant never can imply an obligation on the part
of the master to take more care of the servant than he may
reasonably be expected to do himself." This is the very selfish doctrine
that provoked the American Civil War which generated so much hatred
and drew so much precious blood on American plains and valleys from
1861 to 1864.

"Idolatrous reverence" for the letter of the law sacrifices the human
being. The spirit of the law insures mans survival and ennobles him.
In the words of Shakespeare, "the letter of the law killeth; its spirit
giveth life."cralaw virtua1aw library
C

It is curious that the dissenting opinion clings to the myth that the
courts cannot legislate.

That myth had been exploded by Article 9 of the New Civil Code, which
provides that "No judge or court shall decline to render judgment by
reason of the silence, obscurity or insufficiency of the laws."cralaw
virtua1aw library

Hence, even the legislator himself, through Article 9 of the New Civil
Code, recognizes that in certain instances, the court, in the language
of Justice Holmes, "do and must legislate" to fill in the gaps in the law;
because the mind of the legislator, like all human beings, is finite and
therefore cannot envisage all possible cases to which the law may
apply. Nor has the human mind the infinite capacity to anticipate all
situations.chanrobles.com : virtual law library

But about two centuries before Article 9 of the New Civil Code, the
founding fathers of the American Constitution foresaw and recognized
the eventuality that the courts may have to legislate to supply the
omissions or to clarify the ambiguities in the American Constitution
and the statutes.

Thus, Alexander Hamilton pragmatically admits that judicial legislation


may be justified but denies that the power of the Judiciary to nullify
statutes may give rise to Judicial tyranny (The Federalist, Modern
Library, pp. 503-511, 1937 ed.). Thomas Jefferson went farther to
concede that the court is even independent of the Nation itself (A.F.L.
v. American Sash Company, 1949 335 US 538).

Many of the great expounders of the American Constitution likewise


share the same view. Chief Justice Marshall pronounced: "It is
emphatically the province and duty of the Judicial department to say
what the law is" (Marbury v. Madison 1 Cranch 127 1803), which was
re-stated by Chief Justice Hughes when he said that "the Constitution
is what the judge says it is" (Address on May 3, 1907, quoted by
President Franklin Delano Roosevelt on March 9, 1937). This was
reiterated by Justice Cardozo who pronounced that "No doubt the
limits for the judge are narrower. He legislates only between gaps. He
fills the open spaces in the law." (The Nature of the Judicial Process, p.
113). In the language of Chief Justice Harlan F. Stone, "The only limit
to the judicial legislation is the restraint of the judge" (U.S. v. Butler
297 U.S. 1 Dissenting Opinion, p. 79), which view is also entertained
by Justice Frankfurter and Justice Robert Jackson. In the rhetoric of
Justice Frankfurter, "the courts breathe life, feeble or strong, into the
inert pages of the Constitution and all statute books."cralaw virtua1aw
library

It should be stressed that the liability of the employer under Section 5


of the Workmens Compensation Act or Article 173 of the New Labor
Code is limited to death, ailment or injury caused by the nature of the
work, without any fault on the part of the employers. It is correctly
termed no-fault liability. Section 5 of the Workmens Compensation
Act, as amended, or Article 173 of the New Labor Code, does not cover
the tortious liability of the employer occasioned by his fault or culpable
negligence in failing to provide the safety devices required by the law
for the protection of the life, limb and health of the workers. Under
either Section 5 or Article 173, the employer remains liable to pay
compensation benefits to the employee, whose death, ailment or
injury is work-connected, even if the employer has faithfully and
diligently furnished all the safety measures and contrivances decreed
by the law to protect the employee.

The written word is no longer the "sovereign talisman." In the


epigrammatic language of Mr. Justice Cardozo, "the law has outgrown
its primitive stage of formalism when the precise word was the
sovereign talisman, and every slip was fatal" (Wood v. Duff Gordon
222 NW 88; Cardozo, The Nature of the Judicial Process 100). Justice
Cardozo warned that: "Sometimes the conservatism of judges has
threatened for an interval to rob the legislation of its efficacy. . . .
Precedents established in those items exert an unhappy influence even
now" (citing Pound, Common Law and Legislation 21 Harvard Law
Review 383, 387).

Finally, Justice Holmes delivered the coup de grace when he


pragmatically admitted, although with a cautionary undertone: "that
judges do and must legislate, but they can do so only interstitially;
they are confined from molar to molecular motions" (Southern Pacific
Company v. Jensen, 244 US 204 1917). And in the subsequent case of
Springer v. Government (277 US 188, 210-212, 72 L. ed. 845, 852-
853), Justice Holmes pronounced:jgc:chanrobles.com.ph

"The great ordinances of the Constitution do not establish and divide


fields of black and white. Even the more specific of them are found to
terminate in a penumbra shading gradually from one extreme to the
other. . . . When we come to the fundamental distinctions it is still
more obvious that they must be received with a certain latitude or our
government could not go on.

"To make a rule of conduct applicable to an individual who but for such
action would be free from it is to legislate yet it is what the judges
do whenever they determine which of two competing principles of
policy shall prevail.

"x x x

"It does not seem to need argument to show that however we may
disguise it by veiling words we do not and cannot carry out the
distinction between legislative and executive action with mathematical
precision and divide the branches into waterlight compartments, were
it ever so desirable to do so, which I am far from believing that it is, or
that the Constitution requires."cralaw virtua1aw library

True, there are jurists and legal writers who affirm that judges should
not legislate, but grudgingly concede that in certain cases judges do
legislate. They criticize the assumption by the courts of such law-
making power as dangerous for it may degenerate into Judicial
tyranny. They include Blackstone, Jeremy Bentham, Justice Black,
Justice Harlan, Justice Roberts, Justice David Brewer, Ronald Dworkin,
Rolf Sartorious, Macklin Fleming and Beryl Harold Levy. But said
Justices, jurists or legal commentators, who either deny the power of
the courts to legislate in-between gaps of the law, or decry the
exercise of such power, have not pointed to examples of the exercise
by the courts of such law-making authority in the interpretation and
application of the laws in specific cases that gave rise to judicial
tyranny or oppression or that such judicial legislation has not protected
public interest or individual welfare, particularly the lowly workers or
the under-privileged.chanrobles virtualawlibrary
chanrobles.com:chanrobles.com.ph

On the other hand, there are numerous decisions interpreting the Bill
of Rights and statutory enactments expanding the scope of such
provisions to protect human rights. Foremost among them is the
doctrine in the cases of Miranda v. Arizona (384 US 436 1964), Gideon
v. Wainright (372 US 335), Escubedo v. Illinois (378 US 478), which
guaranteed the accused under custodial investigation his rights to
remain silent and to counsel and to be informed of such rights as even
as it protects him against the use of force or intimidation to extort
confession from him. These rights are not found in the American Bill of
Rights. These rights are now institutionalized in Section 20, Article IV
of the 1973 Constitution. Only the peace-and-order adherents were
critical of the activism of the American Supreme Court led by Chief
Justice Earl Warren.

Even the definition of identical offenses for purposes of the double


jeopardy provision was developed by American judicial decisions, not
by amendment to the Bill of Rights on double jeopardy (see Justice
Laurel in People v. Tarok, 73 Phil. 260, 261-268). And these judicial
decisions have been re-stated in Section 7 of Rule 117 of the 1985
Rules on Criminal Procedure, as well as in Section 9 of Rule 117 of the
1964 Revised Rules of Court. In both provisions, the second offense is
the same as the first offense if the second offense is an attempt to
commit the first or frustration thereof or necessarily includes or is
necessarily included in the first offense.

The requisites of double jeopardy are not spelled out in the Bill of
Rights. They were also developed by judicial decisions in the United
States and in the Philippines even before people v. Ylagan (58 Phil.
851-853).

Again, the equal protection clause was interpreted in the case of Plessy
v. Ferguson (163 US 537) as securing to the Negroes equal but
separate facilities, which doctrine was revoked in the case of Brown v.
Maryland Board of Education (349 US 294), holding that the equal
protection clause means that the Negroes are entitled to attend the
same schools attended by the whites equal facilities in the same
school which was extended to public parks and public buses. De-
segregation, not segregation, is now the governing principle.

Among other examples, the due process clause was interpreted in the
case of People v. Pomar (46 Phil. 440) by a conservative, capitalistic
court to invalidate a law granting maternity leave to working women
according primacy to property rights over human rights. The case of
People v. Pomar is no longer the rule.

As early as 1904, in the case of Lochner v. New York (198 US 45, 76,
49 L. ed. 937, 949), Justice Holmes had been railing against the
conservatism of Judges perverting the guarantee of due process to
protect property rights as against human rights or social justice for the
working man. The law fixing maximum hours of labor was invalidated.
Justice Holmes was vindicated finally in 1936 in the case of West Coast
Hotel v. Parish (300 US 377-79; 81 L. ed. 703) where the American
Supreme Court upheld the rights of workers to social justice in the
form of guaranteed minimum wage for women and minors, working
hours not exceeding eight (8) daily, and maternity leave for women
employees.

The power of judicial review and the principle of separation of powers


as well as the rule on political questions have been evolved and
grafted into the American Constitution by judicial decisions (Marbury v.
Madison, supra; Coleman v. Miller, 307 US 433, 83 L. ed. 1385;
Springer v. Government, 277 US 210-212, 72 L. ed. 852, 853).

It is noteworthy that Justice Black, who seems to be against judicial


legislation, penned a separate concurring opinion in the case of
Coleman v. Miller, supra, affirming the doctrine of political question as
beyond the ambit of judicial review. There is nothing in both the
American and Philippine Constitutions expressly providing that the
power of the courts is limited by the principle of separation of powers
and the doctrine on political questions. There are numerous cases in
Philippine jurisprudence applying the doctrines of separation of powers
and political questions and invoking American precedents.

Unlike the American Constitution, both the 1935 and 1973 Philippine
Constitutions expressly vest in the Supreme Court the power to review
the validity or constitutionality of any legislative enactment or
executive act.

WHEREFORE, THE TRIAL COURTS ORDER OF DISMISSAL IS HEREBY


REVERSED AND SET ASIDE AND THE CASE IS REMANDED TO IT FOR
FURTHER PROCEEDINGS. SHOULD A GREATER AMOUNT OF DAMAGES
BE DECREED IN FAVOR OF HEREIN PETITIONERS, THE PAYMENTS
ALREADY MADE TO THEM PURSUANT TO THE WORKMENS
COMPENSATION ACT SHALL BE DEDUCTED. NO COSTS.

SO ORDERED.

Fernando, C.J. Teehankee, Plana, Escolin, De la Fuente, Cuevas and


Alampay, JJ., concur.

Concepcion, Jr., J., is on leave.

Abad Santos and Relova, JJ., took no part.

Separate Opinions

MELENCIO-HERRERA, J., dissenting:chanrob1es virtual 1aw library

This case involves a complaint for damages for the death of five
employees of PHILEX Mining Corporation under the general provisions
of the Civil Code. The Civil Code itself, however, provides for its non-
applicability to the complaint. It is specifically provided in Article 2196
of the Code, found in Title XVIII Damages,
that:jgc:chanrobles.com.ph

"COMPENSATION FOR WORKMEN AND OTHER EMPLOYEES IN CASE OF


DEATH, INJURY OR ILLNESS IS REGULATED BY SPECIAL LAW."cralaw
virtua1aw library

Compensation and damages are synonymous. In Esguerra v. Muoz


Palma, etc., Et Al., 104 Phil. 582, 586, Justice J.B.L. Reyes had
said:jgc:chanrobles.com.ph

"Petitioner also avers that compensation is not damages. This


argument is but a play on words. The term compensation is used in
the law (Act 3812 and Republic Act 772) in the sense of indemnity for
damages suffered, being awarded for a personal injury caused or
aggravated by or in the course of employment. . . ."cralaw virtua1aw
library
By the very provisions of the Civil Code, it is a "special law", not the
Code itself, which has to apply to the complaint involved in the instant
case. That "special law", in reference to the complaint, can be no other
than the Workmens Compensation Law.chanroblesvirtualawlibrary

Even assuming, without conceding, that an employee is entitled to an


election of remedies, as the majority rules, both options cannot be
exercised simultaneously, and the exercise of one will preclude the
exercise of the other. The petitioners had already exercised their
option to come under the Workmens Compensation Act, and they
have already received compensation payable to them under that Act.
Stated differently, the remedy under the Workmens Compensation Act
had already become a "finished transaction."cralaw virtua1aw library

There are two considerations why it is believed petitioners should no


longer be allowed to exercise the option to sue under the Civil Code. In
the first place, the proceedings under the Workmens Compensation
Act have already become the law in regards to the "election of
remedies", because those proceedings had become a "finished
transaction."cralaw virtua1aw library

In the second place, it should be plainly equitable that, if a person


entitled to an "election of remedies" makes a first election and accepts
the benefits thereof, he should no longer be allowed to avail himself of
the second option. At the very least, if he wants to make a second
election, in disregard of the first election he has made, when he makes
the second election he should surrender the benefits he had obtained
under the first election. This was not done in the case before the
Court.

There is full concurrence on my part with the dissenting opinion of Mr.


Justice Gutierrez upholding "the exclusory provision of the Workmens
Compensation Act." I may further add:.

1. The Workmens Compensation Act (Act No. 3428) was approved on


December 10, 1927 and took effect on June 10, 1928. It was
patterned from Minnesota and Hawaii statutes.
"Act No. 3428 was adopted by the Philippine legislature, in Spanish
and some sections of the law were taken from the statutes of
Minnesota and Hawaii, (Chapter 209 of the Revised Laws of Hawaii,
1925)." [Morabe & Inton, Workmens Compensation Act, p. 2].

Under the Workmens Compensation Act of Hawaii, when the Act is


applicable, the remedy under the Act is exclusive. The following is
stated in 1 Schneider, Workmens Compensation Text, pp. 266,
267.chanrobles law library

"Sec. 112. Hawaii.

"Statutory Synopsis The act is compulsory as to employees in all


industrial employment and employees of the territory and its political
subdivisions. (Sections 7480-7481, S.S., Vol. 1, p. 713.).

Compensation is not payable when injury is due to employees willful


intention to injure himself or another or to his intoxication. (Sec. 7482,
S.S., p. 713.).

When the act is applicable the remedy thereunder is exclusive. (Sec.


7483, S.S., p. 714.)"

2. In providing for exclusiveness of the remedy under our Workmens


Compensation Act, the Philippine Legislature worded the first
paragraph of Section 5 of the Act as follows:jgc:chanrobles.com.ph

"SEC. 5. Exclusive right to compensation. The rights and remedies


granted by this Act to an employee.

by reason of a personal injury entitling him to compensation.

shall exclude all other rights and remedies accruing to the employee,
his personal representatives, dependents or nearest of kin against the
employer.

under the Civil Code and other laws, because of said injury."
(Paragraphing and Italics supplied)

In regards to the intent of the Legislature under the foregoing


provision:jgc:chanrobles.com.ph
"A cardinal rule in the interpretation of statutes is that the meaning
and intention of the law-making body must be sought, first of all, in
the words of the statute itself, read and considered in their natural,
ordinary, commonly-accepted and most obvious significations,
according to good and approved usage and without resorting to forced
or subtle construction. Courts, therefore, as a rule, cannot presume
that the law-making body does not know the meaning of words and
the rules of grammar. Consequently, the grammatical reading of a
statute must be presumed to yield its correct sense." (Espino v.
Cleofe, 52 SCRA 92, 98) [Italics supplied]

3. The original second paragraph of Section 5


provided:jgc:chanrobles.com.ph

"Employers contracting laborers in the Philippine Islands for work


outside the same shall stipulate with such laborers that the remedies
prescribed by this Act shall apply exclusively to injuries received
outside the Islands through accidents happening in and during the
performance of the duties of the employment." (Italics supplied)

The use of the word "exclusively is a further confirmation of the


exclusory provision of the Act, subject only to exceptions which may
be provided in the Act itself.chanrobles.com.ph : virtual law library

4. It might be mentioned that, within the Act itself, provision is made


for remedies other than within the Act itself. Thus, Section 6, in part,
provides:jgc:chanrobles.com.ph

"SEC. 6. Liability of third parties. In case an employee suffers an


injury for which compensation is due under this Act by any other
person besides his employer, it shall be optional with such injured
employee either to claim compensation from his employer, under this
Act, or sue such other person for damages. in accordance with law; . .
." (Italics supplied)

If the legislative intent under the first paragraph of Section 5 were to


allow the injured employee to sue his employer under the Civil Code,
the legislator could very easily have formulated the said first
paragraph of Section 5 according to the pattern of Section 6. That that
was not done shows the legislative intent not to allow any option to an
employee to sue the employer under the Civil Code for injuries
compensable under the Act.

5. There should be no question but that the original first paragraph of


Section 5 of the Workmens Compensation Act, formulated in 1927,
provided that an injured worker or employee, or his heirs, if entitled to
compensation under the Act, cannot have independent recourse
neither to the Civil Code nor to any other law relative to the liability of
the employer. After 1927, there were occasions when the legislator
had the opportunity to amend the first paragraph of Section 5 such
that the remedies under the Act would not be exclusive; yet, the
legislator refrained from doing so. That shows the legislatives
continuing intent to maintain the exclusory provision of the first
paragraph of Section 5 unless otherwise provided in the Act itself.

(a) The original second paragraph of Section 5


provided:jgc:chanrobles.com.ph

"Employers contracting laborers in the Philippine Islands for work


outside the same shall stipulate with such laborers that the remedies
prescribed by this Act shall apply (exclusively) to injuries received
outside the Islands through accidents happening in and during the
performance of the duties of the employment (and all service contracts
made in the manner prescribed in this section be presumed to include
such agreement)."cralaw virtua1aw library

On June 20, 1952, through RA 772, the foregoing second paragraph


was amended with the elimination of the underlined words in
parentheses, and the addition of this sentence at the end of the
paragraph:jgc:chanrobles.com.ph

"Such stipulation shall not prejudice the right of the laborers to the
benefits of the Workmens Compensation Law of the place where the
accident occurs, should such law be more favorable to them." (Italics
supplied)

It will be seen that, within the Act itself, the exclusory character of the
Act was amended. At that time, if he had so desired, the legislator
could have amended the first paragraph of Section 5 so that the
employee would have the option to sue the employer under the Act, or
under the Civil Code, should the latter be more favorable to him.
(b) The Workmens Compensation Act, which took effect in 1927,
grants compensation to an injured employee without regard to the
presence or absence of negligence on the part of the employer. The
compensation is deemed an expense chargeable to the industry
(Murillo v. Mendoza, 66 Phil. 689 [1938]).

In time, it must have been thought that it was inequitable to have the
amount of compensation, caused by negligence on the part of the
employer, to be the same amount payable when the employer was not
negligent. Based on that thinking, Section 4-A 1 was included into the
Act, on June 20, 1952, through RA 772. Said Section 4-A increased the
compensation payable by 50% in case there was negligence on the
part of the employer. That additional section evidenced the intent of
the legislator not to give an option to an employee, injured with
negligence on the part of the employer, to sue the latter under the
provisions of the Civil Code.

On June 20, 1964, Section 4-A was amended (insubstantially) by RA


4119. The legislator was again given the opportunity to provide, but
he did not, the option to an employee to sue under the Act or under
the Civil Code.cralawnad

When a Court gives effect to a statute not in accordance with the


intent of the lawmaker, the Court is unjustifiably legislating.

It is in view of the foregoing that I vote for affirmation of the trial


Courts dismissal of the Complaint.

GUTIERREZ, JR., J., dissenting:chanrob1es virtual 1aw library

To grant the petition and allow the victims of industrial accidents to file
damages suits based on torts would be a radical innovation not only
contrary to the express provisions of the Workmens Compensation Act
but a departure from the principles evolved in the long history of
workmens compensation. At the very least, it should be the legislature
and not this Court which should remove the exclusory provision of the
Workmens Compensation Act, a provision reiterated in the present
Labor Code on employees compensation.

Workmens compensation evolved to remedy the evils associated with


the situation in the early years of the industrial revolution when
injured workingmen had to rely on damage suits to get recompense.

Before workmens compensation, an injured worker seeking damages


would have to prove in a tort suit that his employer was either
negligent or in bad faith, that his injury was caused by the employer
and not a fellow worker, and that he was not guilty of contributory
negligence. The employer could employ not only his wealth in
defeating the claim for damages but a host of common law defenses
available to him as well. The worker was supposed to know what he
entered into when he accepted employment. As stated in the leading
case of Priestley v. Fowler (3 M. & W. 1, l50 Reprint 1030) decided in
1837 "the mere relation of the master and the servant never can imply
an obligation on the part of the master to take more care of the
servant than he may reasonably be expected to do of himself." By
entering into a contract of employment, the worker was deemed to
accept the risks of employment that he should discover and guard
against himself.chanrobles lawlibrary : rednad

The problems associated with the application of the fellow servant rule,
the assumption of risk doctrine, the principle of contributory
negligence, and the many other defenses so easily raised in protracted
damage suits illustrated the need for a system whereby workers had
only to prove the fact of covered employment and the fact of injury
arising from employment in order to be compensated.

The need for a compensation scheme where liability is created solely


by statute and made compulsory and where the element of fault
either the fault of the employer or the fault of the employee is
disregarded became obvious. Another objective was to have simplified,
expeditious, inexpensive, and nonlitigious procedures so that victims
of industrial accidents could more readily, if not automatically, receive
compensation for work-related injuries.

Inspite of common law defenses to defeat a claim being recognized,


employers liability acts were a major step in the desired direction.
However, employers liability legislation proved inadequate. Legislative
reform led to the workmens compensation.

I cite the above familiar background because workmens compensation


represents a compromise. In return for the near certainty of receiving
a sum of money fixed by law, the injured worker gives up the right to
subject the employer to a tort suit for huge amounts of damages.
Thus, liability not only disregards the element of fault but it is also a
pre-determined amount based on the wages of the injured worker and
in certain cases, the actual cost of rehabilitation. The worker does not
receive the total damages for his pain and suffering which he could
otherwise claim in a civil suit. The employer is required to act swiftly
on compensation claims. An administrative agency supervises the
program. And because the overwhelming mass of workingmen are
benefited by the compensation system, individual workers who may
want to sue for big amounts of damages must yield to the interests of
their entire working class.chanrobles lawlibrary : rednad

The nature of the compensation principle is explained as


follows:jgc:chanrobles.com.ph

"An appreciation of the nature of the compensation principle is


essential to an understanding or the acts and the cases interpreting
them.

"By the turn of the century it was apparent that the toll of industrial
accidents or both the avoidable and unavoidable variety had become
enormous, and government was faced with the problem of who was to
pay for the human wreckage wrought by the dangers of modern
industry. If the accident was avoidable and could be attributed to the
carelessness of the employer, existing tort principles offered some
measure of redress. Even here, however, the woeful inadequacy of the
fault principle was manifest. The uncertainty of the outcome of torts
litigation in court placed the employee at a substantial disadvantage.
So long as liability depended on fault there could be no recovery until
the finger of blame had been pointed officially at the employer or his
agents. In most cases both the facts and the law were uncertain. The
witnesses, who were usually fellow workers of the victim, were torn
between friendship or loyalty to their class, on the one hand, and fear
of reprisal by the employer, on the other. The expense and delay of
litigation often prompted the injured employee to accept a compromise
settlement for a fraction of the full value of his claim. Even if suit were
successfully prosecuted, a large share of the proceeds of the judgment
were exacted as contingent fees by counsel. Thus the employer
against whom judgment was cast often paid a substantial damage bill,
while only a part of this endured to the benefit of the injured employee
or his dependents. The employees judgment was nearly always too
little and too late.

x x x

"Workmens Compensation rests upon the economic principle that


those persons who enjoy the product of a business whether it be in
the form of goods or services should ultimately bear the cost of the
injuries or deaths that are incident to the manufacture, preparation
and distribution of the product. . . .

x x x

"Under this approach the element of personal fault either disappears


entirely or is subordinated to broader economic considerations. The
employer absorbs the cost of accident loss only initially; it is expected
that this cost will eventually pass down the stream of commerce in the
form of increase price until it is spread in dilution among the ultimate
consumers. So long as each competing unit in a given industry is
uniformly affected, no producer can gain any substantial competitive
advantage or suffer any appreciable loss by reason of the general
adoption of the compensation principle.

"In order that the compensation principle may operate properly and
with fairness to all parties it is essential that the anticipated accident
cost be predictable and that it be fixed at a figure that will not disrupt
too violently the traffic in the product of the industry affected. Thus
predictability and moderateness of cost are necessary from the broad
economic viewpoint. . . .

"Compensation, then, differs from the conventional damage suit in two


important respects: Fault on the part of either employer or employee
is eliminated; and compensation payable according to a definitely
limited schedule is substituted for damages. All compensation acts
alike work these two major changes, irrespective of how they may
differ in other particulars.

"Compensation, when regarded from the viewpoint of employer and


employee represents a compromise in which each party surrenders
certain advantages in order to gain others which are of more
importance both to him and to society. The employer gives up the
immunity he otherwise would enjoy in cases where he is not at fault,
and the employee surrenders his former right to full damages and
accepts instead a more modest claim for bare essentials, represented
by compensation.

"The importance of the compromise character of compensation cannot


be overemphasized. The statutes vary a great deal with reference to
the proper point of balance. The amount of weekly compensation
payments and the length of the period during which compensation is
to be paid are matters concerning which the acts differ considerably.
The interpretation of any compensation statute will be influenced
greatly by the courts reaction to the basic point of compromise
established in the Act. If the court feels that the basic compromise
unduly favors the employer, it will be tempted to restore what it
regards as a proper balance by adopting an interpretation that favors
the worker. In this way, a compensation act drawn in a spirit of
extreme conservatism may be transformed by a sympathetic court into
a fairly liberal instrument; and conversely, an act that greatly favors
the laborer may be so interpreted by the courts that employers can
have little reason to complain. Much of the unevenness and apparent
conflict in compensation decisions throughout the various jurisdictions
must be attributed to this." (Malone & Plant, Workmens
Compensation, American Casebook Series, pp. 63-65).

The schedule of compensation, the rates of payments, the


compensable injuries and diseases, the premiums paid by employers
to the present system, the actuarial stability of the trust fund and
many other interrelated parts have all been carefully studied before
the integrated scheme was enacted into law. We have a system whose
parts must mesh harmoniously with one another if it is to succeed. The
basic theory has to be followed.chanrobles law library : red

If this Court disregards this totality of the scheme and in a spirit of


generosity recasts some parts of the system without touching the
related others, the entire structure is endangered. For instance, I am
personally against stretching the law and allowing payment of
compensation for contingencies never envisioned to be compensable
when the law was formulated. Certainly, only harmful results to the
principle of workmens compensation can arise if workmen, whom the
law allows to receive employment compensation, can still elect to file
damage suits for industrial accidents. It was precisely for this reason
that Section 5 of the Workmens Compensation Act, which
reads:jgc:chanrobles.com.ph

"SEC. 5. Exclusive right to compensation. The rights and remedies


granted by this Act to an employee by reason of a personal injury
entitling him to compensation shall exclude all other rights and
remedies accruing to the employee, his personal representatives,
dependents or nearest of kin against the employer under the Civil
Code and other laws because of said injury . . ."cralaw virtua1aw
library

Article 173 of the Labor Code also provides:jgc:chanrobles.com.ph

"ART 173. Exclusiveness of liability. Unless otherwise provided, the


liability of the State Insurance Fund under this Title shall be exclusive
and in place of all other liabilities of the employer to the employee, his
dependents or anyone otherwise entitled to receive damages on behalf
of the employee or his dependents."cralaw virtua1aw library

I am against the Court assuming the role of legislator in a matter


calling for actuarial studies and public hearings. If employers already
required to contribute to the State Insurance Fund will still have to
bear the cost of damage suits or get insurance for that purpose, a
major study will be necessary. The issue before us is more far reaching
than the interests of the poor victims and their families. All workers
covered by workmens compensation and all employers who employ
covered employees are affected. Even as I have deepest sympathies
for the victims, I regret that I am constrained to dissent from the
majority opinion.

Aquino, J., concur.

Endnotes:

1. SEC. 4-A. Right to additional compensation. In case of the


employees death, injury or sickness due to the failure of the employer
to comply with any law, or with any order, rule or regulation of the
Workmens Compensation Commission or the Bureau of Labor
Standards or should the employer violate the provisions of Republic
Act Numbered Six hundred seventy-nine and its amendments or fail to
install and maintain safety appliances, or take other precautions for
the prevention of accidents or occupational disease, he shall be liable
to pay an additional compensation equal to fifty per centum of the
compensation fixed in this Act.

EN BANC

[G.R. No. L-28089. October 25, 1967.]

BARA LIDASAN, Petitioner, v. COMMISSION ON


ELECTIONS, Respondent.

Jalandoni & Jamir for Petitioner.

Ramon Barrios for the Comelec.

Solicitor General Antonio P. Barredo and Solicitor H. C. Fule for


the Republic of the Philippines.

SYLLABUS

1. CONSTITUTIONAL LAW; BILLS MUST NOT EMBRACE MORE THAN


ONE SUBJECT EXPRESSED IN THE TITLE This constitutional
provision contains dual limitations upon legislative power: (1)
Congress is to refrain from conglomeration, under one statute, of
heterogeneous subjects; (2) the title to the bills is to be couched in a
language sufficient to notify the . . . and those concerned of the import
of the single subject thereof.
2. ID.; BILLS, SUBJECT MUST BE EXPRESSED IN TITLE OF. This
constitution requirement breathes the spirit of command. Compliance
is imperative, given the fact that the Constitution does not exact of
Congress the obligation to read during its deliberations the entire text
of the bill. In fact, in the case of House Bill 1247, which became
Republic Act 4790, only its title was read from its introduction to its
final approval in the House where the same, being of local application,
originated.

3. ID.; ID.; MISLEADING AND DECEPTIVE TITLE UNCONSTITUTIONAL.


Where the title of the statute reads "An Act Creating The
Municipality of Dianaton, in The Province of Lanao del Sur" which
projects the impression that solely the province of Lanao del Sur is
affected by such creation although, in fact, the two-pronged purpose is
to create such municipality purportedly from twenty-one barrios in the
towns of Butig and Balabagan, Lanao del Sur, and to dismember at the
same time two municipalities in Cotabato, different from the province
of Lanao del Sur, such title is misleading and deceptive, because (1) it
did not inform the members of Congress as to the full impact of the
law; (2) it did not apprise the people in the towns of Buldon and
Parang in Cotabato and in the province of Cotabato itself that part of
their territory was being taken away from their towns and province
and being added to the adjacent province of Lanao del Sur; and (3) it
kept the public in the dark as to what towns and provinces were
actually affected by the bill. These are the pressures which weigh
heavily against the constitutionality of Republic Act 4790.

4. ID.; ID; SIZEABLE TERRITORIAL TRANSFER MUST BE REFLECTED


IN TITLE. Respondents stance that the change in boundaries of the
two provinces resulting in the substantial diminution of the territorial
limits of Cotabato province is merely the incidental legal results of the
definition of the boundary of the municipality of Dianaton and that,
therefore, reference to said diminution need not be expressed in the
title of the law, such posture but emphasizes the error of constitutional
dimensions in writing down the title of the bill, as transfer of a sizeable
portion of territory from one province to another of necessity involves
reduction of area, population and income of the first and the
corresponding increase of those of the other. This is as important as
the creation of a municipality; yet, the title failed to reflect this fact.

5. ID.; ID.; DOCTRINE IN FELWA VS. SALAS NOT APPLICABLE;


GERMANE MATTERS NEED NOT BE REFLECTED IN TITLE OF BILL.
(64 Off. Gaz. [35] 8822) where the constitutionality of the statute
reading "An Act Creating The Provinces of Benguet, Mountain Province,
Ifugao, and Kalinga-Apayao" has been upheld by the Court despite the
fact that no reference had been made as to the elective officials of the
provinces thus created, is not in focus, "for surely, an Act creating said
provinces must be expected to provide for the officers who shall run
the affairs thereof" which is "manifestly germane to the subject" of the
legislation, as set forth in its title. The statute at bar stands altogether
on a different footing. The lumping together of barrios in adjacent but
separate provinces under one statute is neither a natural nor logical
consequence of the creation of the new municipality of Dianaton, for a
change of boundaries of the two provinces may be made without
necessarily creating a new municipality and vice versa.

6. ID.; STATUTES; RULE OF SEPARABILITY OF CONSTITUTIONAL AND


UNCONSTITUTIONAL PORTIONS. Although the general rule is that
where part of a statute is void, as repugnant to the Organic Law, while
another part is valid, the valid portion, if separable from the invalid,
may stand and be enforced; yet, where parts of the statute are so
mutually dependent and connected, as conditions, considerations,
inducements, or compensations for each other, as to warrant a belief
that the legislature intended them as a whole, and that if all could not
be carried into effect, the legislature would not pass the residue
independently, then, if some parts are unconstitutional, all the
provisions which are thus dependent, conditional or connected, must
fall with them.

7. ID.; ID.; ID.; CASE AT BAR. Where the explanatory note to


House Bill 1247, now Republic Act 4790 states that the twenty-one
barrios (only 9 in Lanao del Sur and 12 in Cotabato, with the seat of
government in Togaig, Cotabato) comprising the new municipality of
Dianaton "is now a progressive community; the aggregate population
is large; and the collective income is sufficient to maintain an
independent municipality" and that "if enacted into law, will enable the
inhabitants concerned to govern themselves and enjoy the blessings of
municipal autonomy," unquestionably the totality of 21 barrios was in
the mind of the proponent thereof, and the Court may not now say
that Congress intended to create Dianaton with only nine out of
twenty-one barrios, with a seat of government still left to be
conjectured, for this unduly stretches judicial interpretation of
congressional intent beyond credibility point, and to do so indeed, is to
pass the line which circumscribes the judiciary and tread on legislative
premises. Paying due respect to the traditional separation of powers,
the Court may not now melt and recast Republic Act 4790 to read a
Dianaton town of nine instead of the originally intended twenty-one
barrios, and if these nine barrios are to constitute a town at all, it is
the function of Congress, not the Courts, to spell out that
congressional will. Republic Act 4790 is thus indivisible and it is
accordingly null and void in its totality.

8. ID.; A QUALIFIED VOTER AS PARTY IN INTEREST. Where the


Commission on Elections has resolved to implement Republic Act 4790
unless declared unconstitutional despite recommendation until
"clarified by correcting legislation," and where the right of every
citizen, taxpayer and voter of a community affected by legislation
creating a town to ascertain that the law so created is not
dismembering his place of residence has been recognized in this
jurisdiction, a qualified voter who expects to vote in the elections in his
own barrio before its annexation to the newly created town, is an
affected party, as he may not want to vote in a town different from his
actual residence; may not desire to be considered a part of hitherto
different communities which are formed into the new town; may prefer
to remain in the place where he is and as it was constituted, and
continue to enjoy the rights and benefits he acquired therein; may not
even know the candidates of the new town; may express a lack of
desire to vote for anyone of them; may feel that his vote should be
cast for the officials in the town before dismemberment, and it stands
to reason to say that when the constitutional right to vote on the part
of any citizen of that community is affected, he may become a suitor
to challenge the constitutionality of the Act as passed by
Congress.chanroblesvirtuallawlibrary

FERNANDO, J., dissenting:chanrob1es virtual 1aw library

1. CONSTITUTIONAL LAW; STATUTES; NO BILL SHOULD EMBRACE


MORE THAN ONE SUBJECT WHICH SHALL BE EXPRESSED IN ITS
TITLE. The constitutional requirement is that no bill which may be
enacted into law shall embrace more than one subject which shall be
expressed in the title of the bill. This provision is similar to those found
in the Constitution of many American States. It is aimed against the
evil of the so-called omnibus bills, and log-rolling legislation, and
against surreptitious or unconsidered enactments. Where the subject
of a bill is limited to a particular matter, the members of the
legislature as well as the people should be informed of the subject of
proposed legislative measures. This constitutional provision thus
precludes the insertion of riders in legislation, a rider being a provision
not germane to the subject matter of the bill.

2. ID.; ID.; ID.; REQUIREMENT SATISFIED IF ALL PARTS OF THE ACT


WHICH RELATES TO THE SUBJECT FINDS EXPRESSION IN ITS TITLE.
It is not to be narrowly construed though as to cripple or impede
proper legislation. The construction must be reasonable and not
technical. It is sufficient if the title be comprehensive enough
reasonably to include the general object which the statute seeks to
effect without expressing each and every end and means necessary for
the accomplishment of that object. Mere details need not be set forth.
The legislative is not required to make the title of the act a complete
index of its contents. The constitutional provision is satisfied if all parts
of all act which relates to its subject find expression in its title.

3. ID.; ID.; ID.; CONSTRUCTION TO BE GIVEN TO REPUBLIC ACT


4790. To avoid any doubt as to the validity of such statute, it must
be construed as to exclude from Dianaton all of such barrios
mentioned in Republic Act No. 4790 found in municipalities outside
Lanao del Sur. As thus interpreted, the statute can meet the test of
the most rigid scrutiny. Nor is this to do violence to the legislative
intent. What was created was a new municipality from barrios named
as found in Lanao del Sur. This construction assures precisely that.

4. ID.; ID.; ID.; ID.; ADOPTION OF INTERPRETATION TO SUPPORT


THE CONSTITUTIONALITY OF LEGISLATION. Both Philippine and
American decisions unite in the view that a legislative measure, in the
language of Van Devanter "should not be given a construction which
will imperil its validity where it is reasonably open to construction free
from such peril." (Chippewa Indians v. United States (1937) 301 US.
358, 376). Republic Act No. 4790 as above construed incurs no such
risk and is free from the peril of nullity.

DECISION
SANCHEZ, J.:

The question initially presented to the Commission on Elections 1 is


this: Is Republic Act 4790, which is entitled "An Act Creating the
Municipality of Dianaton in the Province of Lanao del Sur," but which
includes barrios located in another province - Cotabato - to be spared
from attack planted upon the constitutional mandate that "No bill
which may be enacted into law shall embrace more than one subject
which shall be expressed in the title of the bill?" Comelecs answer is in
the affirmative. Offshoot is the present original petition
for certiorari and prohibition.

On June 18, 1966, the Chief Executive signed into law House Bill 1247,
known as Republic Act 4790, now in dispute. The body of the statute,
reproduced in haec verba, reads:jgc:chanrobles.com.ph

"SECTION 1. Barrios Togaig, Madalum, Bayanga, Langkong, Sarakan,


Kat-bo, Digakapan, Magabo, Tabangao, Tiongko, Colodan,
Kabamawakan, Kapatagan, Bongabong, Aipang, Dagowan, Bakikis,
Bungabung, Losain, Matimos and Magolatung, in the Municipalities of
Butig and Balabagan, Province of Lanao del Sur, are separated from
said municipalities and constituted into a distinct and independent
municipality of the same province to be known as the Municipality of
Dianaton, Province of Lanao del Sur. The seat of government of the
municipality shall be in Togaig.

SECTION 2. The first mayor, vice-mayor and councilors of the new


municipality shall be elected in the nineteen hundred sixty-seven
general elections for local officials.

SECTION 3. This Act shall take effect upon its approval."cralaw


virtua1aw library

It came to light later that barrios Togaig and Madalum just mentioned
are within the municipality of Buldon, Province of Cotabato, and that
Bayanga, Langkong, Sarakan, Kat-bo, Digakapan, Magabo, Tabangao,
Tiongko, Colodan, and Kabamakawan are parts and parcel of another
municipality, the municipality of Parang, also in the Province of
Cotabato and not of Lanao del Sur.chanroblesvirtuallawlibrary
Prompted by the coming elections, Comelec adopted its resolution of
August 15, 1967, the pertinent portions of which
are:jgc:chanrobles.com.ph

"For purposes of establishment of precincts, registration of voters and


for other election purposes, the Commission RESOLVED that pursuant
to R.A. 4790, the new municipality of Dianaton, Lanao del Sur shall
comprise the barrios of Kapatagan, Bongabong, Aipang, Dagowan,
Bakikis, Bungabung, Losain, Matimos and Magolatung situated in the
municipality of Balabagan, Lanao del Sur, the barrios of Togaig and
Madalum situated in the municipality of Buldon, Cotabato, the barrios
of Bayanga, Langkong, Sarakan, Kat-bo, Digakapan, Magabo,
Tabangao, Tiongko, Colodan and Kabamakawan situated in the
municipality of Parang, also of Cotabato."cralaw virtua1aw library

Doubtless, as the statute stands, twelve barrios - in two municipalities


in the province of Cotabato are transferred to the province of Lanao
del Sur. This brought about a change in the boundaries of the two
provinces.

Apprised of this development, on September 7, 1967, the Office of the


President, through the Assistant Executive Secretary, recommended to
Comelec that the operation of the statute be suspended until "clarified
by correcting legislation."cralaw virtua1aw library

Comelec, by resolution of September 20, 1967, stood by its own


interpretation, declared that the statute "should be implemented
unless declared unconstitutional by the Supreme Court."cralaw
virtua1aw library

This triggered the present original action for certiorari and prohibition
by Bara Lidasan, a resident and taxpayer of the detached portion of
Parang, Cotabato, and a qualified voter for the 1967 elections. He
prays that Republic Act 4790 be declared unconstitutional; and that
Comelecs resolutions of August 15, 1967 and September 20, 1967
implementing the same for electoral purposes, be nullified.

1. Petitioner relies upon the constitutional requirement aforestated,


that" [n]o bill which may be enacted into law shall embrace more than
one subject which shall be expressed in the title of the bill. 2
It may be well to state, right at the outset, that the constitutional
provision contains dual limitations upon legislative power. First.
Congress is to refrain from conglomeration, under one statute, of
heterogeneous subjects. Second. The title of the bill is to be couched
in a language sufficient to notify the legislators and the public and
those concerned of the import of the single subject thereof.

Of relevance here is the second directive. The subject of the statute


must be "expressed in the title" of the bill. This constitutional
requirement "breathes the spirit of command." 3 Compliance is
imperative, given the fact that the Constitution does not exact of
Congress the obligation to read during its deliberations the entire text
of the bill. In fact, in the case of House Bill 1247, which became
Republic Act 4790, only its title was read from its introduction to its
final approval in the House of Representatives, 4 where the bill, being
of local application, originated. 5

Of course, the Constitution does not require Congress to employ in the


title of an enactment, language of such precision as to mirror, fully
index or catalogue all the contents and the minute details therein. It
suffices if the title should serve the purpose of the constitutional
demand that it inform the legislators, the persons interested in the
subject of the bill, and the public, of the nature, scope and
consequences of the proposed law and its operation. And this, to lead
them to inquire into the body of the bill, study and discuss the same,
take appropriate action thereon, and, thus, prevent surprise or fraud
upon the legislators. 6

In our task of ascertaining whether or not the title of a statute


conforms with the constitutional requirement, the following, we
believe, may be taken as guidelines:jgc:chanrobles.com.ph

"The test of the sufficiency of a title is whether or not it is misleading;


and, while technical accuracy is not essential, and the subject need not
be stated in express terms where it is clearly inferable from the details
set forth, a title which is so uncertain that the average person reading
it would not be informed of the purpose of the enactment or put on
inquiry as to its contents, or which is misleading, either in referring to
or indicating one subject where another or different one is really
embraced in the act, or in omitting any expression or indication of the
real subject or scope of the act, is bad.
x x x

In determining sufficiency of particular title its substance rather than


its form should be considered, and the purpose of the constitutional
requirement, of giving notice to all persons interested, should be kept
in mind by the court." 7

With the foregoing principles at hand, we take a hard look at the


disputed statute. The title "An Act Creating the Municipality of
Dianaton, in the Province of Lanao del Sur" 8 projects the
impression that solely the province of Lanao del Sur is affected by the
creation of Dianaton. Not the slightest intimation is there that
communities in the adjacent province of Cotabato are incorporated in
this new Lanao del Sur town. The phrase "in the Province of Lanao del
Sur," read without subtlety or contortion, makes the title misleading,
deceptive. For, the known fact is that the legislation has a two-
pronged purpose combined in one statute: (1) it creates the
municipality of Dianaton purportedly from twenty-one barrios in the
towns of Butig and Balabagan, both in the province of Lanao del Sur;
and (2) it also dismembers two municipalities in Cotabato, a province
different from Lanao del Sur.

The baneful effect of the defective title here presented is not so


difficult to perceive. Such title did not inform the members of Congress
as to the full impact of the law; it did not apprise the people in the
towns of Buldon and Parang in Cotabato and in the province of
Cotabato itself that part of their territory is being taken away from
their towns and province and added to the adjacent Province of Lanao
del Sur; it kept the public in the dark as to what towns and provinces
were actually affected by the bill. These are the pressures which
heavily weigh against the constitutionality of Republic Act 4790.

Respondents stance is that the change in boundaries of the two


provinces resulting in "the substantial diminution of the territorial
limits" of Cotabato province is "merely the incidental legal results of
the definition of the boundary" of the municipality of Dianaton and
that, therefore, reference to the fact that portions in Cotabato are
taken away "need not be expressed in the title of the law." This
posture we must say but emphasizes the error of constitutional
dimensions in writing down the title of the bill. Transfer of a sizeable
portion of territory from one province to another of necessity involves
reduction of area, population and income of the first and the
corresponding increase of those of the other. This is as important as
the creation of a municipality. And yet, the title did not reflect this
fact.chanrobles virtual lawlibrary

Respondent asks us to read Felwa v. Salas, L-16511, October 29,


1966, as controlling here. The Felwa case is not in focus. For there,
the title of the Act (Republic Act 4695) reads: "An Act Creating the
Provinces of Benguet, Mountain Province, Ifugao, and Kalinga-
Apayao." That title was assailed as unconstitutional upon the averment
that the provisions of the law (Section 8 thereof) in reference to the
elective officials of the provinces thus created, were not set forth in
the title of the bill. We there ruled that this pretense is devoid of merit
"for, surely, an Act creating said provinces must be expected to
provide for the officers who shall run the affairs thereof" which is
"manifestly germane to the subject" of the legislation, as set forth in
its title. The statute now before us stands altogether on a different
footing. The lumping together of barrios in adjacent but separate
provinces under one statute is neither a natural nor logical
consequence of the creation of the new municipality of Dianaton. A
change of boundaries of the two provinces may be made without
necessarily creating a new municipality and vice versa.

As we canvass the authorities on this point, our attention is drawn to


Hume v. Village of Fruitport, 219 NW 648, 649. There, the statute in
controversy bears the title "An Act to Incorporate the Village of
Fruitport, in the County of Muskegon." The statute, however, in its
Section 1 reads: "The people of the state of Michigan enact, that the
following described territory in the counties of Muskegon and Ottawa,
Michigan, to wit: . . . be, and the same is hereby constituted a village
corporate, by the name of the Village of Fruitport." This statute was
challenged as void by plaintiff, a resident of Ottawa county, in an
action to restrain the Village from exercising jurisdiction and control,
including taxing of his lands. Plaintiff based his claim on Section 20,
Article IV of the Michigan State Constitution, which reads: "No law
shall embrace more than one object, which shall be expressed in its
title." The Circuit Court decree voided the statute and defendant
appealed. The Supreme Court of Michigan voted to uphold the decree
of nullity. The following, said in Hume, may well apply to this
case:jgc:chanrobles.com.ph
"It may be that the words, `An act to incorporate the village of
Fruitport, would have been a sufficient title, and that the words, `in
the county of Muskegon, were unnecessary; but we do not agree with
appellant that the words last quoted may, for that reason, be
disregarded as surplusage.

. . . Under the guise of discarding surplusage, a court cannot reject a


part of the title of an act for the purpose of saving the act. Schmalz v.
Wooly, 56 N.J. Eq. 649, 39 A. 539.

A purpose of the provision of the Constitution is to `challenge the


attention of those affected by the act to its provisions. Savings Bank
v. State of Michigan, 228 Mich. 316, 200 NW 262.

The title here is restrictive. It restricts the operation of the act to


Muskegon county. The act goes beyond the restriction. As was said in
Schmalz v. Wooly, supra: `The title is erroneous in the worst degree,
for it is misleading." 9

Similar statutes aimed at changing boundaries of political subdivisions,


which legislative purpose is not expressed in the title, were likewise
declared unconstitutional. 10

We rule that Republic Act 4790 is null and void.

2. Suggestion was made that Republic Act 4790 may still be salvaged
with reference to the nine barrios in the municipalities of Butig and
Balabagan in Lanao del Sur, with the mere nullification of the portion
thereof which took away the twelve barrios in the municipalities of
Buldon and Parang in the other province of Cotabato. The reasoning
advocated is that the limited title of the Act still covers those barrios
actually in the province of Lanao del Sur.

We are not unmindful of the rule, buttressed on reason and of long


standing, that where a portion of a statute is rendered unconstitutional
and the remainder valid, the parts will be separated, and the
constitutional portion upheld. Black, however, gives the exception to
this rule, thus:jgc:chanrobles.com.ph

". . . But when the parts of the statute are so mutually dependent and
connected, as conditions, considerations, inducements, or
compensations for each other, as to warrant a belief that the
legislature intended them as a whole, and that if all could not be
carried into effect, the legislature would not pass the residue
independently, then, if some parts are unconstitutional, all the
provisions which are thus dependent, conditional, or connected, must
fall with them." 11

In substantially similar language, the same exception is recognized in


the jurisprudence of this Court, thus:jgc:chanrobles.com.ph

"The general rule is that where part of the statute is void, as


repugnant to the Organic Law, while another part is valid, the valid
portion, if separable from the invalid, may stand and be enforced. But
in order to do this, the valid portion must be so far independent of the
invalid portion that it is fair to presume that the Legislature would
have enacted it by itself if they had supposed that they could not
constitutionally enact the other. . . . Enough must remain to make a
complete, intelligible, and valid statute, which carries out the
legislative intent. . . . The language used in the invalid part of the
statute can have no legal force or efficacy for any purpose whatever,
and what remains must express the legislative will independently of
the void part, since the court has no power to legislate. . ." 12

Could we indulge in the assumption that Congress still intended, by


the Act, to create the restricted area of nine barrios in the towns of
Butig and Balabagan in Lanao del Sur into the town of Dianaton, if the
twelve barrios in the towns of Buldon and Parang, Cotabato, were to
be excluded therefrom? The answer must be in the negative.

Municipal corporations perform twin functions. Firstly. They serve as


an instrumentality of the State in carrying out the functions of
government. Secondly. They act as an agency of the community in the
administration of local affairs. It is in the latter character that they are
a separate entity acting for their own purposes and not a subdivision
of the State. 13

Consequently, several factors come to the fore in the consideration of


whether a group of barrios is capable of maintaining itself as an
independent municipality. Amongst these are population, territory, and
income. It was apparently these same factors which induced the
writing out of House Bill 1247 creating the town of Dianaton. Speaking
of the original twenty-one barrios which comprise the new
municipality, the explanatory note to House Bill 1247, now Republic
Act 4790, reads:jgc:chanrobles.com.ph

"The territory is now a progressive community; the aggregate


population is large; and the collective income is sufficient to maintain
in independent municipality.

This bill, if enacted into law, will enable the inhabitants concerned to
govern themselves and enjoy the blessings of municipal
autonomy."cralaw virtua1aw library

When the foregoing bill was presented in Congress, unquestionably,


the totality of the twenty-one barrios not nine barrioswas in the
mind of the proponent thereof. That this is so, is plainly evident by the
fact that the bill itself, thereafter enacted into law, states that the seat
of the government is in Togaig, which is a barrio in the municipality of
Buldon in Cotabato. And then the reduced area poses a number of
questions, thus: Could the observations as to progressive community,
large aggregate population, collective income sufficient to maintain an
independent municipality, still apply to a motely group of only nine
barrios out of the twenty-one? Is it fair to assume that the inhabitants
of the said remaining barrios would have agreed that they be formed
into a municipality, what with the consequent duties and liabilities of
an independent municipal corporation? Could they stand on their own
feet with the income to be derived in their community? How about the
peace and order, sanitation, and other corporate obligations? This
Court may not supply the answer to any of these disturbing questions.
And yet, to remain deaf to these problems, or to answer them in the
negative and still cling to the rule on separability, we are afraid, is to
impute to Congress an undeclared will. With the known premise that
Dianaton was created upon the basic considerations of progressive
community, large aggregate population and sufficient income, we may
not now say that Congress intended to create Dianaton with only
nineof the original twenty-onebarrios, with a seat of government
still left to be conjectured. For, this unduly stretches judicial
interpretation of congressional intent beyond credibility point. To do
so, indeed, is to pass the line which circumscribes the judiciary and
tread on legislative premises. Paying due respect to the traditional
separation of powers, we may not now melt and recast Republic Act
4790 to read a Dianaton town of nine instead of the originally intended
twenty-one barrios. Really, if these nine barrios are to constitute a
town at all, it is the function of Congress, not of this Court, to spell out
that congressional will.chanroblesvirtuallawlibrary

Republic Act 4790 is thus inseparable, and it is accordingly null and


void in its totality. 14

3. There remains for consideration the issue raised by respondent,


namely, that petitioner has no substantial legal interest adversely
affected by the implementation of Republic Act 4790. Stated
differently, respondents pose is that petitioner is not the real party in
interest.chanrobles virtual lawlibrary

Here, the validity of a statute is challenged on the ground that it


violates the constitutional requirement that the subject of the bill be
expressed in its title. Capacity to sue, therefore, hinges on whether
petitioners substantial rights or interests are impaired by lack of
notification in the title that the barrio in Parang, Cotabato, where he is
residing has been transferred to a different provincial hegemony.

The right of every citizen, taxpayer and voter of a community affected


by legislation creating a town to ascertain that the law so created is
not dismembering his place of residence "in accordance with the
Constitution" is recognized in this jurisdiction. 15

Petitioner is a qualified voter. He expects to vote in the 1967 elections.


His right to vote in his own barrio before it was annexed to a new town
is affected. He may not want, as is the case here, to vote in a town
different from his actual residence. He may not desire to be considered
a part of hitherto different communities which are formed into the new
town; he may prefer to remain in the place where he is and as it was
constituted, and continue to enjoy the rights and benefits he acquired
therein. He may not even know the candidates of the new town; he
may express a lack of desire to vote for anyone of them; he may feel
that his vote should be cast for the officials in the town before
dismemberment. Since by constitutional direction the purpose of a bill
must be shown in its title for the benefit, amongst others, of the
community affected thereby, 16 it stands to reason to say that when
the constitutional right to vote on the part of any citizen of that
community is affected, he may become a suitor to challenge the
constitutionality of the Act as passed by Congress.

For the reasons given, we vote to declare Republic Act 4790 null and
void, and to prohibit respondent Commission from implementing the
same for electoral purposes.

No costs allowed. So ordered.

Concepcion, C.J., Reyes, J.B.L., Dizon, Makalintal, Bengzon, J.P.,


Zaldivar, Castro and Angeles, JJ., concur.

Separate Opinions

FERNANDO, J., dissenting:chanrob1es virtual 1aw library

With regret and with due recognition of the merit of the opinion of the
Court, I find myself unable to give my assent. Hence these few words
to express my stand.

Republic Act No. 4790 deals with one subject matter, the creation of
the municipality of Dianaton in the province of Lanao del Sur. The title
makes evident what is the subject matter of such an enactment. The
mere fact that in the body of such statute barrios found in two other
municipalities of another province were included does not of itself
suffice for a finding of nullity by virtue of the constitutional provision
invoked. At the most, the statute to be free from the insubstantial
doubts about its validity must be construed as not including the
barrios, located not in the municipalities of Butig and Balabagan,
Lanao del Sur, but in Parang and Buldon, Cotabato.

The constitutional requirement is that no bill which may be enacted


into law shall embrace more than one subject which shall be expressed
in the title of the bill. 1 This provision is similar to those found in the
Constitution of many American States. It is aimed against the evils of
the so-called omnibus bills, and log-rolling legislation, and against
surreptitious or unconsidered enactments. 2 Where the subject of a bill
is limited to a particular matter, the members of the legislature as well
as the people should be informed of the subject of proposed legislative
measures. This constitutional provision thus precludes the insertion of
riders in legislation, a rider being a provision not germane to the
subject matter of the bill.chanroblesvirtuallawlibrary:red

It is not to be narrowly construed though as to cripple or impede


proper legislation. The construction must be reasonable and not
technical. It is sufficient if the title be comprehensive enough
reasonably to include the general object which the statute seeks to
effect without expressing each and every end and means necessary for
the accomplishment of that object. Mere details need not be set forth.
The legislature is not required to make the title of the act a complete
index of its contents. The constitutional provision is satisfied if all parts
of an act which relates to its subject find expression in its title. 3

The first decision of this Court, after the establishment of the


Commonwealth of the Philippines, in 1938, construing a provision of
this nature, Government v. Hongkong & Shanghai Bank, 4 held that
the inclusion of Section 11 of Act No. 4007, the Reorganization law,
providing for the mode in which the total annual expenses of the
Bureau of Banking may be reimbursed through assessment levied
upon all banking institutions subject to inspection by the Bank
Commissioner was not violative of such a requirement in the Jones
Law, the previous organic act. Justice Laurel, however, vigorously
dissented, his view being that while the main subject of the act was
reorganization, the provision assailed did not deal with reorganization
but with taxation. While the case of Government v. Hongkong &
Shanghai Bank was decided by a bare majority of four justices against
three, the present trend seems to be that the constitutional
requirement is to be given the liberal test as indicated in the majority
opinion penned by Justice Abad Santos, and not the strict test as
desired by the minority headed by Justice Laurel.

Such a trend has been reflected in subsequent decisions beginning


with Sumulong v. Commission on Elections, 5 up to and including
Felwa v. Salas, a 1966 decision, 6 the opinion coming from Chief
Justice Concepcion.

It is true of course that in Philconsa v. Gimenez, 7 one of the grounds


on which the invalidity of Republic Act No. 3836 was predicated was
the violation of the above constitutional provision. This Retirement Act
for senators and representatives was entitled "AN ACT AMENDING
SUBSECTION (c), SECTION TWELVE OF COMMONWEALTH ACT
NUMBERED ONE HUNDRED EIGHT-SIX, AS AMENDED BY REPUBLIC
ACT NUMBERED THIRTY HUNDRED NINETY-SIX." As we noted, the
paragraph in Republic Act No. 3836 deemed objectionable "refers to
members of Congress and to elective officers thereof who are not
members of the Government Service Insurance System. To provide
retirement benefits, therefore, for these officials, would relate to a
subject matter which is not germane to Commonwealth Act No. 186.
In other words, this portion of the amendment (re retirement benefits
for Members of Congress and appointive officers, such as the
Secretary and Sergeants-at-arms for each house) is not related in any
manner to the subject of Commonwealth Act No. 186 establishing the
Government Service Insurance System and which provides for both
retirement and insurance benefits for its members." Nonetheless our
opinion was careful to note that there was no abandonment of the
principle of liberality. Thus: "We are not unmindful of the fact that
there has been a general disposition in all courts to construe the
constitutional provision with reference to the subject and title of the
Act, liberally."cralaw virtua1aw library

It would follow therefore that the challenged legislation Republic Act


No. 4790 is not susceptible to the indictment that the constitutional
requirement as to legislation having only one subject which should be
expressed in his title was not met. The subject was the creation of the
municipality of Dianaton. That was embodied in the title.chanrobles
virtualawlibrary chanrobles.com:chanrobles.com.ph

It is in the light of the aforementioned judicial decisions of this Court,


some of the opinions coming from jurists illustrious for their mastery
of constitutional law and their acknowledged erudition, that, with all
due respect, I find the citation from Corpus Juris Secundum,
unnecessary and far from persuasive. The State decisions cited, I do
not deem controlling, as the freedom of this Court to accept or reject
doctrines therein announced cannot be doubted.

Wherein does the weakness of the statute lie then? To repeat, several
barrios of two municipalities outside Lanao del Sur were included in
the municipality of Dianaton of that province. That itself would not
have given rise to a constitutional question considering the broad,
well-high plenary powers possessed by Congress to alter provincial
and municipal boundaries. What justified resort to this Court was the
congressional failure to make explicit that such barrios in two
municipalities located in Cotabato would thereafter form part of the
newly created municipality of Dianaton, Lanao del Sur.

To avoid any doubt as to that validity of such statue, it must be


construed as to exclude from Dianaton all of such barrios mentioned in
Republic Act No. 4790 found in municipalities outside Lanao del Sur.
As thus interpreted, the statute can meet the test of the most rigid
scrutiny. Nor is this to do violence to the legislative intent. What was
created was a new municipality from barrios named as found in Lanao
del Sur. This construction assures precisely that.

This mode of interpreting Republic Act No. 4790 finds support in basic
principles underlying precedents, which if not precisely controlling,
have a persuasive ring. In Radiowealth v. Agregado, 8 certain
provisions of the Administrative Code were interpreted and given a
"construction which would be more in harmony with the tenets of the
fundamental law." In Sanchez v. Lyon Construction, 9 this Court had a
similar ruling: "Article 302 of the Code of Commerce must be applied
in consonance with [the relevant] provisions of our Constitution." The
above principle gained acceptance at a much earlier period in our
constitutional history. Thus in a 1913 decision, In re Guaria: 10 "In
construing a statute enacted by the Philippine Commission we deem it
our duty not to give it a construction which would be repugnant to an
Act of Congress, if the language of the statute is fairly susceptible of
another construction not in conflict with the higher law. In doing so,
we think we should not hesitate to disregard contentions touching the
apparent intention of the legislator which would lead to the conclusion
that the Commission intended to enact a law in violation of the Act of
Congress. However specious the argument may be in favor of one of
two possible constructions, it must be disregarded if on examination it
is found to rest on the contention that the legislator designed an
attempt to transcend the rightful limits of his authority, and that his
apparent intention was to enact an invalid law."cralaw virtua1aw
library

American Supreme Court decisions are equally explicit. The then


Justice, later Chief Justice, Stone, construed statutes "with an eye to
possible constitutional limitations so as to avoid doubts as to [their]
validity." 11 From the pen of the articulate jurist, Frankfurter: 12
"Accordingly, the phrase "lobbying activities" in the resolution must be
given the meaning that may fairly be attributed to it, having special
regard for the principle of constitutional adjudication which makes it
decisive in the choice of fair alternatives that one construction may
raise serious constitutional questions avoided by another." His opinion
in the Rumely case continues with the above pronouncement of Stone
and two other former Chief Justices: "In the words of Mr. Chief Justice
Taft, (i)t is our duty in the interpretation of federal statutes to reach
conclusion which will avoid serious doubt of their constitutionality,
Richmond Screw Anchor Co. v. United States, 275 US 331, 346, 48 S.
Ct. 194, 198, 72 L. ed. 303. . . . As phrased by Mr. Chief Justice
Hughes, "if a serious doubt of constitutionality is raised, it is a cardinal
principle that this Court will first ascertain whether a construction of
the statue is fairly possible by which the question may be avoided.
Crowell v. Benson, 285, 296, 76 L. ed. 598, and cases cited." The
prevailing doctrine then as set forth by Justice Clark in a 1963
decision, 13 is that courts "have consistently sought an interpretation
which supports the constitutionality of legislation." Phrased differently
by Justice Douglas, the judiciary favors "that interpretation of
legislation which gives it the greater change of surviving the test of
constitutionality." 14

It would follow then that both Philippine and American decisions unite
in the view that a legislative measure, in the language of Van Devanter
"should not be given a construction which will imperil its validity where
it is reasonably open to construction free from such peril." 15 Republic
Act No. 4790 as above construed incurs no such risk and is free from
the peril of nullity.

So I would view the matter, with all due acknowledgment of the


practical considerations clearly brought to light in the opinion of the
Court.

Endnotes:

1. Hereinafter referred to as Comelec.

2. Article VI, Sec. 21(1), Philippine Constitution.

3. Stiglitz v. Schiardien, 40 SW 2d 315, 317, 320.

4. Congressional Record, Vol. I, No. 40, p. 8; Vol. I, No. 50, pp. 40-41.
5. Section 18, Article VI of the Constitution,
provides:jgc:chanrobles.com.ph

"SEC. 18. All appropriation, revenue or tariff bills, bills authorizing


increase of the public debt, bills of local application, and private bills,
shall originate exclusively in the House of Representatives, but the
Senate may propose or concur with amendments."cralaw virtua1aw
library

6. Vidal de Roces v. Posadas, 58 Phil. 108, 111-112; Ichong v.


Hernandez, 101 Phil. 1155, 1188-1190.

7. 82 C.J.S., pp. 365, 370; Emphasis supplied.

8. Emphasis ours.

9. Emphasis supplied.

10. Examples: Wilcox v. Paddock, 31 NW 609, where the statute


entitled "An act making an appropriation of state swamp lands to aid
the county of Gratiot in improving the channel of Maple river . . ." but
the body of the act affected another county other than Gratiot.

State v. Burr. 238 p. 585, the statute entitled "An act to amend Secs.
4318 and 4327 of the Codes of Montana relating to changing the
boundaries of Fergus and Judith Basin counties" was rendered void
because the body of the act included the boundaries of Petroleum
county.

Atchison v. Kearney County, 48 p. 583, where the title of act


purported to attach Kearney county to Finney county but the body of
the act attached it to Hamilton county.

State v. Nelson, 98 So. 715, the title of the act purporting to alter or
re-arrange the boundaries of Decatur city and the body of the act
which actually diminished the boundary lines of the city were
considered by the court as dealing with incongruous matters. The
reading of the former would give no clear suggestion that the latter
would follow and be made the subject of the act. Jackson, Clerk v.
Sherrod, 92 So. 481; City of Ensley v. Simpson, 52 So. 61, cited,
Fairview v. City of Detroit, 113 NW 368, where the title gave notice
that the entire village of Fairview is annexed to Detroit when the body
affected only a portion.

11. Black, Interpretation of Laws, 2d, ed., p. 116.

12. Barrameda v. Moir, 25 Phil. 44, 47-48, quoted in Government v.


Springer, 50 Phil. 259, 292; Emphasis supplied.

13. I McQuillin, Municipal Corporations, 3d ed., pp. 456-464.

14. In the case of Fuqua v. City of Mobile, 121 So. 696, it was
asserted that the portion of the statute excluding a territory from
Mobile which was not expressed in the title "An act to alter and
rearrange the boundary lines of the city of Mobile in the state of
Alabama" should be the only portion invalidated. The court, using the
test whether or not after the objectionable feature is stricken off there
would still remain an act complete in itself, sensible, capable of being
executed, ruled that there can be no segregation of that portion
dealing with the excluded territory from that dealing with additional
territory because these two matters are all embraced and intermingled
in one section dealing with the corporate limits of the city.

In the case of Engle v. Bonnie, 204 SW 2d 963, the statute involved


was entitled "An Act relating to cities." Section 4 thereof "requires the
creation of a municipality on petition of a majority of voters or 500
voters." But some of the provisions were germane to the title of the
law. This statute was declared void in toto. The Court of Appeals of
Kentucky ruled as follows:jgc:chanrobles.com.ph

"The judgment declared only Section 4 [relative to the creation of a


municipality on petition of the voters] to be void and the remainder
valid. While some of the provisions of the act are germane to the title,
since they deal with the classification of cities to be created, they seem
merely to harmonize other sections of the statute which they amend
with a new creation of cities other than sixth class towns. To remove
only section 4 would be like taking the motor of an automobile which
leaves the machine of no use. We are quite sure that these provisions
would not have been enacted without Section 4; hence, they too must
fall."cralaw virtua1aw library
15. Macias v. The Commission on Elections, L-18684, September 14,
1961.

16. Brooks v. Hydorn, 42 NW 1122, 1123-1124; Fairview v. City of


Detroit, 113 NW 368, 370.

FERNANDO, J., dissenting:chanrob1es virtual 1aw library

1. Art. VI, Sec. 21, par. 1, Constitution.

2. Government v. Hongkong & Shanghai Bank (1938), 66 Phil. 483.

3. People v. Carlos (1947), 78 Phil. 535.

4. 66 Phil. 483.

5. 73 Phil. (1942) 288.

6. L-26511, October 29, 1960. The other cases that may be cited
follows People v. Carlos (1947), 78 Phil. 535; Nuval v. de la Fuente
(1953), 92 Phil. 1074; Ichong v. Hernandez (1951), 101 Phil. 1155;
Cordero v. Cabatuando, L-14542, Oct. 31, 1962; Municipality of Jose
Panganiban v. Shell Company, L-18349, July 30, 1966.

7. L-23326, December 18, 1965.

8. 86 Phil. 429 (1950).

9. 87 Phil. 309 (1950), Cf. City of Manila v. Arellano Law Colleges, Inc.
(1950), 85 Phil. 663.

10. 24 Phil. 37. Justice Carson who penned the opinion cited Black on
Interpretation of Laws to this effect: "Hence it follows that the courts
will not so construe the law as to make it conflict with the constitution,
but will rather put such an interpretation upon it as will avoid conflict
with the constitution and give it full force and effect, if this can be
done without extravagance. If there is doubt, or uncertainty as to the
meaning of the legislature, if the words or provisions of the statute are
obscure, or if the enactment is fairly susceptible of two or more
constructions, that interpretation will be adopted which will avoid the
effect of unconstitutionality, even though it may be necessary, for this
purpose, to disregard the more usual or apparent impact of the
language employed."cralaw virtua1aw library

11. Lucas v. Alexander (1928), 279 US 573, 577-578, citing United


States ex rel. Atty. Gen. v. Delaware & H. Co. 213 US 366, 407, 408,
53 L. ed. 836, 848, 849, 29 Sup. Ct. Rep. 527: United States v.
Standard Brewery, 251 US 210, 220, 64 L. ed. 229, 235, 40 Sup. Ct.
Rep. 139; Texas v. Eastern Texas R. Co. 258 US 204, 217, 66 L. ed.
566, 572, 42 Sup. Ct. Rep. 281; Bratton v. Chandleer, 260 US 110,
114, 67 L. ed. 157, 161, 43 Sup. Ct. Rep. 43; Panama R. Co. v.
Johnson, 264 US 375, 390, 68 L. ed. 748, 754, 44 Sup. Ct. Rep. 391.

12. United States v. Rumely (1953), 345 US 41, 45.

13. United States v. National Dairy Product Corp. 373 US 29, 32.

14. Ex parte Endo (1944), 323 US 283, 299-300.

15. Chippewa Indians v. United States (1937), 301 US 358, 376.

EN BANC

[G.R. No. L-19650. September 29, 1966.]

CALTEX (PHILIPPINES) INC., Petitioner-Appellee, v. ENRICO


PALOMAR, in his capacity as THE POSTMASTER
GENERAL, Respondent-Appellant.

Solicitor General for respondent and Appellant.

Ross, Selph & Carrascoso for petitioner and appellee.

SYLLABUS
1. DECLARATORY RELIEF; CONDITIONS SINE QUA NON BEFORE
RELIEF CAN BE AVAILED OF. In order that a declaratory relief may
be available, the following conditions must be present: (1) there must
be a justiciable controversy; (2) the controversy must be between
persons whose interests are adverse; (3) the party seeking declaratory
relief must have a legal interest in the controversy; and (4) the issue
involved must be ripe for judicial determination (Tolentino v. The
Board of Accountancy, Et Al., G. R. No. L-3062, September 28, 1951;
Delumen, Et. Al. v. Republic of the Philippines, 50 Off. Gaz., No. 2, pp.
578, 578-579; Edades v. Edades, Et Al., G. R. No. L-8964, July 31,
1956).

2. ID.; ELEMENT OF JUSTICIABLE CONTROVERSY; CASE AT BAR.


The appellees insistent assertion of its claim to the use of the mails for
its proposed contest, and the challenge thereto and consequent denial
by the appellant of the privilege demanded, undoubtedly spawned a
live controversy. There is an active antagonistic assertion of a legal
right on the part of the appellee and a denial thereof on the part of
appellant concerning a real question or issue. With the appellees bent
to hold the contest and the appellants threat to issue a fraud order
therefor if carried out, the contenders are confronted by the ominous
shadow of an imminent and inevitable litigation unless their differences
are settled and stabilized by a tranquilizing declaration (Pablo y Sen,
Et. Al. v. Republic of the Philippines, G. R. No. L-6868, April 30, 1955).
Doubt, if any there was, has ripened into a justiciable controversy
when it was translated into a positive claim of right which is actually
contested (III Moran, Comments on the Rules of Court, 1963 ed., pp.
132-133, citing: Woodward v. Fox West Theaters, 36 Ariz., 251, 284
Pac. 350).

3. STATUTORY CONSTRUCTION; CONSTRUCTION DEFINED; CASE AT


BAR. Construction is the art or process of discovering and
expounding the meaning and intention of the authors of the law with
respect to its application to a given case, where that intention is
rendered doubtful, among others, by reason of the fact that the given
case is not explicitly provided for in the law (Black, Interpretation of
Laws, p. 1). In the present case, the question of whether or not the
scheme proposed by the appellee is within the coverage of the
prohibitive provisions of the Postal Law inescapably requires an inquiry
into the intended meaning of the words used therein. This is as much a
question of construction or interpretation as any other.

4. ID.; WEIGHT OF JUDICIAL DECISIONS. In this jurisdiction,


judicial decisions assume the same authority as the statute itself and,
until authoritatively abandoned, necessarily become, to the extent that
they are applicable, the criteria which must control the actuations not
only of those called upon to abide thereby but also of those in duty
bound to enforce obedience thereto.

5. LOTTERY; ESSENTIAL ELEMENTS. The term "lottery" extends to


all schemes for the distribution of prizes by chance, such as policy
playing, gift exhibitions, prize concerts, raffles at fairs, etc., and
various forms of gambling. The three essential elements of a lottery
are: first, consideration; second, prize; and third, chance ("El Debate",
Inc. v. Topacio, 44 Phil., 278, 283-284, citing Horner v. United States
[1892], 147 U.S. 449; Public Clearing House v. Coyne [1903], 194
U.S. 497; U.S. v. Filart and Singson [1915], 30 Phil., 80; U.S. v. Olsen
and Marker [1917], 36 Phil., 395; U.S. v. Baguio [1919], 39 Phil.,
962; Valhalla Hotel Construction Company v. Carmona,p. 233, ante).

6. ID.; GRATUITOUS DISTRIBUTION OF PROPERTY BY CHANCE;


ELEMENT OF CONSIDERATION NOT PRESENT; CASE AT BAR. In
respect to the element of consideration, the law does not condemn the
gratuitous distribution of property by chance, if no consideration is
derived directly or indirectly from the party receiving the chance, but
does condemn as criminal schemes in which a valuable consideration
of some kind is paid directly or indirectly for the chance to draw a prize
("El Debate", Inc. v. Topacio, supra). Under the rules of the proposed
contest there is no requirement that any fee be paid, any merchandise
be bought, any service be rendered, or any value whatsoever be given
for the privilege to participate. A prospective contestant has but to go
to a Caltex station, request for the entry form which is available on
demand, and accomplish and submit the same for the drawing of the
winner. Viewed from all angles, the contest fails to exhibit any
discernible consideration which would brand it as a lottery. The
scheme is but a gratuitous distribution of property by chance.

7. ID.; TEST TO DETERMINE PRESENCE OF CONSIDERATION. The


element of consideration does not consist of the benefit derived by the
proponent of the contest. The true test is whether the participant pays
a valuable consideration for the chance, and not whether those
conducting the enterprise receive something of value in return for the
distribution of the prize (People v. Cardas, 28 P. 2d., 99, 137 Cal. App.
[Supp.] 788). The standpoint of the contestant, not that of the
sponsor, is all that matters.

8. ID.; MEANING OF TERM "GIFT ENTERPRISE" ; PROPOSED SCHEME


NOT EMBRACED BY THE TERM. The term "gift enterprise" is
commonly applied to a sporting artifice under which goods are sold for
their market value, but by way of inducement each purchaser is given
a chance to win a prize (54 C.J.S., 850; 34 Am. Jur., 654; Black, Law
Dictionary, 4th ed. 817; Ballantine, Law Dictionary with
Pronunciations, 2nd ed., p. 55; Retail Section of Chamber of
Commerce of Plattsmouth v. Kieck, 257 N.W., 493, 128 Neb. 13;
Barker v. State, 193 S.E.. 605, 56 Ga. App., 705; Bell v. State, 37
Tenn. 507, 509, 5 Sneed, 507, 509). As thus conceived, the term
clearly cannot embrace the scheme at bar, where there is no sale of
anything to which the chance offered is attached as an inducement to
the purchaser, and where the contest is open to all qualified
contestants irrespective of whether or not they buy the appellees
products.

9. POSTAL LAW; TERM "GIFT ENTERPRISE" IS USED IN ASSOCIATION


WITH WORD "LOTTERY." In the Postal Law the term "gift enterprise"
is used in association with the word "lottery." Consonant to the well-
known principle of legal hermeneutics noscitur a sociis, it is only logical
that the term be accorded no other meaning than that which is
consistent with the nature of the word associated therewith. Hence, if
lottery is prohibited only if it involves a consideration, so also must the
term "gift enterprise" be so construed. Significantly, there is not the
slightest indicium in the law of any intent to eliminate the element of
consideration from the "gift enterprise" therein included.

10. ID.; MAIL FRAUD ORDERS, PURPOSE OF. Mail fraud orders are
designed to prevent the use of the mails as a medium for
disseminating printed matters which on grounds of public policy are
declared non- mailable. As applied to lotteries, gift enterprises and
similar schemes, justification lies in the recognized necessity to
suppress their tendency to inflame the gambling spirit and to corrupt
public morals (Com. v. Lund, 15 A. 2d., 839, 143 Pa. Super. 208).
Since in gambling it is inherent that something of value be hazarded
for a chance to gain a larger amount, it follows ineluctably that where
no consideration is paid by the contestant to participate, the reason
behind the law can hardly be said to obtain.

11. ID.; WHEN GIFT ENTERPRISES ARE CONDEMNABLE; CASE AT


BAR. Under the prohibitive provisions of the Postal Law, gift
enterprises and similar schemes therein contemplated are
condemnable only if, like lotteries, they involve the element of
consideration. Because there is none in the contest herein in question,
the appellee may not be denied the use of the mails for purposes
thereof.

DECISION

CASTRO, J.:

In the year 1960 the Caltex (Philippines) Inc. (hereinafter referred to


as Caltex) conceived and laid the groundwork for a promotional
scheme calculated to drum up patronage for its oil products.
Denominated "Caltex Hooded Pump Contest", it calls for participants
therein to estimate the actual number of liters a hooded gas pump at
each Caltex station will dispense during a specified period. Employees
of the Caltex (Philippines) Inc., its dealers and its advertising agency,
and their immediate families excepted, participation is to be open
indiscriminately to all "motor vehicle owners and/or licensed drivers."
For the privilege to participate, no fee or consideration is required to
be paid, no purchase of Caltex products required to be made. Entry
forms are to be made available upon request at each Caltex station
where a sealed can will be provided for the deposit of accomplished
entry stubs.chanrobles virtual lawlibrary

A three-staged winner selection system is envisioned. At the station


level, called "Dealer Contest", the contestant whose estimate is closest
to the actual number of liters dispensed by the hooded pump thereat
is to be awarded the first prize; the next closest, the second; and the
next, the third. Prizes at this level consist of a 3-burner kerosene stove
for first; a thermos bottle and a Ray-O-Vac hunter lantern for second;
and an Eveready Magnet-lite flashlight with batteries and a screwdriver
set for third. The first-prize winner in each station will then be qualified
to join in the "Regional Contest" in seven different regions. The
winning stubs of the qualified contestants in each region will be
deposited in a sealed can from which the first-prize, second-prize and
third-prize winners of that region will be drawn. The regional first-prize
winners will be entitled to make a three-day all-expenses-paid round
trip to Manila, accompanied by their respective Caltex dealers in order
to take part in the "National Contest." The regional second-prize and
third-prize winners will receive cash prizes of P500 and P300,
respectively. At the national level, the stubs of the seven regional first-
prize winners will be placed inside a sealed can from which the
drawing for the final first-prize, second-prize and third-prize winners
will be made. Cash prizes in store for winners at this final stage are:
P3,000 for first; P2,000 for second; P1,500 for third; and P650 as
consolation prize for each of the remaining four participants.

Foreseeing the extensive use of the mails not only as amongst the
media for publicizing the contest but also for the transmission of
communications relative thereto, representations were made by Caltex
with the postal authorities for the contest to be cleared in advance for
mailing, having in view sections 1954(a), 1982 and 1983 of the
Revised Administrative Code, the pertinent provisions of which read as
follows:jgc:chanrobles.com.ph

"SECTION 1954. Absolutely non-mailable matter. No matter


belonging to any of the following classes, whether sealed as first- class
matter or not, shall be imported into the Philippines through the mails,
or be deposited in or carried by the mails of the Philippines, or be
delivered to its addressee by any officer or employee of the Bureau of
Posts:chanrob1es virtual 1aw library

(a) Written or printed matter in any form advertising, describing, or in


any manner pertaining to, or conveying or purporting to convey any
information concerning any lottery, gift enterprise, or similar scheme
depending in whole or in part upon lot or chance, or any scheme,
device, or enterprise for obtaining any money or property of any kind
by means of false or fraudulent pretenses, representations, or
promises."cralaw virtua1aw library

"SECTION 1982. Fraud orders. Upon satisfactory evidence that any


person or company is engaged in conducting any lottery, gift
enterprise, or scheme for the distribution of money, or of any real or
personal property by lot, chance, or drawing of any kind, or that any
person or company is conducting any scheme, device, or enterprise for
obtaining money or property of any kind through the mails by means
of false or fraudulent pretenses, representations, or promises, the
Director of Posts may instruct any postmaster or other officer or
employee of the Bureau to return to the person, depositing the same
in the mails, with the word fraudulent plainly written or stamped upon
the outside cover thereof, any mail matter of whatever class mailed by
or addressed to such person or company or the representative or
agent of such person or company."cralaw virtua1aw library

"SECTION 1983. Deprivation, of use of money order system and


telegraphic transfer service. The Director of Posts may, upon
evidence satisfactory to him that any person or company is engaged in
conducting any lottery, gift enterprise, or scheme for the distribution
of money, or of any reel or personal property by lot, chance, or
drawing of any kind, or that any person or company is conducting any
scheme, device, or enterprise for obtaining money or property of any
kind through the mails by means of false or fraudulent pretenses,
representations, or promise, forbid the issue or payment by any
postmaster of any postal money order or telegraphic transfer to said
person or company or to the agent of any such person or company,
whether such agent is acting as an individual or as a firm, bank,
corporation, or association of any kind, and may provide by regulation
for the return to the remitters of the sums named in money orders or
telegraphic transfers drawn in favor of such person or company or its
agent."cralaw virtua1aw library

The overtures were later formalized in a letter to the Postmaster


General, dated October 31, 1960, in which the Caltex, thru counsel,
enclosed a copy of the contest rules and endeavored to justify its
position that the contest does not violate the anti-lottery provisions of
the Postal Law. Unimpressed, the then Acting Postmaster General
opined that the scheme falls within the purview of the provisions
aforesaid and declined to grant the requested clearance. In its
counsels letter of December 7, 1960, Caltex sought a reconsideration
of the foregoing stand, stressing that there being involved no
consideration on the part of any contestant, the contest was not,
under controlling authorities, condemnable as a lottery. Relying,
however, on an opinion rendered by the Secretary of Justice on an
unrelated case seven years before (Opinion 217, Series of 1953), the
Postmaster General maintained his view that the contest involves
consideration, or that, if it does not, it is nevertheless a "gift
enterprise" which is equally banned by the Postal Law, and in his letter
of December 10, 1960 not only denied the use of the mails for
purposes of the proposed contest but as well threatened that if the
contest was conducted, "a fraud order will have to be issued against it
(Caltex) and all its representatives." chanrobles virtuallawlibrary

Caltex thereupon invoked judicial intervention by filing the present


petition for declaratory relief against Postmaster General Enrico
Palomar, praying "that judgment be rendered declaring its Caltex
Hooded Pump Contest not to be violative of the Postal Law, and
ordering respondent to allow petitioner the use of the mails to bring
the contest to the attention of the public." After issues were joined
upon the respective memoranda of the parties, the trial court rendered
judgment as follows:jgc:chanrobles.com.ph

"In view of the foregoing considerations, the Court holds that the
proposed Caltex Hooded Pump Contest announced to be conducted
by the petitioner under the rules marked as Annex B of the petition do
(sic) not violate the Postal Law and the respondent has no right to bar
the public distribution of said rules by the mails."cralaw virtua1aw
library

The respondent appealed.

The parties are now before us, arrayed against each other upon two
basic issues: first, whether the petition states a sufficient cause of
action for declaratory relief; and, second, whether the proposed
"Caltex Hooded Pump Contest" violates the Postal Law. We shall take
these up in seriatim.

1. By express mandate of section 1 of Rule 66 of the old Rules of


Court, which was the applicable legal basis for the remedy at the time
it was invoked, declaratory relief is available to any person "whose
rights are affected by a statute . . . to determine any question of
construction or validity arising under the . . . statute and for a
declaration of his rights or duties thereunder" (now section 1, Rule 64,
Revised Rules of Court). In amplification, this Court, conformably to
established jurisprudence on the matter, laid down certain conditions
sine qua non therefor to wit: (1) there must be a justiciable
controversy; (2) the controversy must be between persons whose
interests are adverse; (3) the party seeking declaratory relief must
have a legal interest in the controversy; and (4) the issue involved
must be ripe for judicial determination (Tolentino v. The Board of
Accountancy, Et. Al. 90 Phil., 83; Delumen, Et. Al. v. Republic of the
Philippines, 94 Phil., 287; 50 Off. Gaz., No. 2, pp. 578, 578-579;
Edades v. Edades, Et Al., 99 Phil., 675). The gravamen of the
appellants stand being that the petition herein states no sufficient
cause of action for declaratory relief, our duty is to assay the factual
bases thereof upon the foregoing crucible.

As we look in retrospect at the incidents that generated the present


controversy, a number of significant points stand out in bold relief. The
appellee (Caltex), as a business enterprise of some consequence,
concededly has the unquestioned light to exploit every legitimate
means, and to avail of all appropriate media to advertise and stimulate
increased patronage for its products. In contrast, the appellant, as the
authority charged with the enforcement of the Postal Law, admittedly
has the power and the duty to suppress transgressions thereof
particularly thru the issuance of fraud orders, under sections 1982 and
1983 of the Revised Administrative Code, against legally non-mailable
schemes. Obviously pursuing its right aforesaid, the appellee laid out
plans for the sales promotion scheme hereinbefore detailed. To
forestall possible difficulties in the dissemination of information
thereon thru the mails, amongst other media, it was found expedient
to request the appellant for an advance clearance therefor. However,
likewise by virtue of his jurisdiction in the premises and construing the
pertinent provisions of the Postal Law, the appellant saw a violation
thereof in the proposed scheme and accordingly declined the request.
A point of difference as to the correct construction to be given to the
applicable statute was thus reached. Communications in which the
parties expounded on their respective theories were exchanged. The
confidence with which the appellee insisted upon its position was
matched only by the obstinacy with which the appellant stood his
ground. And this impasse was climaxed by the appellants open
warning to the appellee that if the proposed contest was "conducted, a
fraud order will have to be issued against it and all its
representatives."cralaw virtua1aw library

Against this backdrop, the stage was indeed set for the remedy prayed
for. The appellees insistent assertion of its claim to the use of the
mails for its proposed contest, and the challenge thereto and
consequent denial by the appellant of the privilege demanded,
undoubtedly spawned a live controversy. The justiciability of the
dispute cannot be gainsaid. There is an active antagonistic assertion of
a legal right on one side and a denial thereof on the other, concerning
a real not a mere theoretical question or issue. The contenders
are as real as their interest are substantial. To the appellee, the
uncertainty occasioned by the divergence of views on the issue of
construction hampers or disturbs its freedom to enhance its business.
To the appellant, the suppression of the appellees proposed contest
believed to transgress a law he has sworn to uphold and enforce is an
unavoidable duty. With the appellees bent to hold the contest and the
appellants threat to issue a fraud order therefor if carried out, the
contenders are confronted by the ominous shadow of an imminent and
inevitable litigation unless their differences are settled and stabilized
by a tranquilizing declaration (Pablo y Sen, Et. Al. v. Republic of the
Philippines, G. R. No. L-6868, April 30, 1955). And, contrary to the
insinuation of the appellant, the time is long past when it can rightly
be said that merely the appellees "desires are thwarted by its own
doubts, or by the fears of others" which admittedly does not confer
a cause of action. Doubt, if any there was, has ripened into a
justiciable controversy when, as in the case at bar, it was translated
into a positive claim of right which is actually contested (III Moran,
Comments on the Rules of Court, 1963 ed., pp. 132-133, citing:
Woodward v. Fox West Coast Theaters, 36 Ariz., 251, 284 Pac. 350).

We cannot hospitably entertain the appellants pretense that there is


here no question of construction because the said appellant "simply
applied the clear provisions of the law to a given set of facts as
embodied in the rules of the contest", hence, there is no room for
declaratory relief. The infirmity of this pose lies in the fact that it
proceeds from the assumption that, in the circumstances here
presented, the construction of the legal provisions can be divorced
from the matter of their application to the appellees contest. This is
not feasible. Construction, verily, is the art or process of discovering
and expounding the meaning and intention of the authors of the law
with respect to its application to a given case, where that intention is
rendered doubtful, amongst others, by reason of the fact that the
given case is not explicitly provided for in the law (Black,
Interpretation of Laws, p. 1). This is precisely the case here. Whether
or not the scheme proposed by the appellee is within the coverage of
the prohibitive provisions of the Postal Law inescapably requires an
inquiry into the intended meaning of the words used therein. To our
mind, this is as much a question of construction or interpretation as
any other.

Nor is it accurate to say, as the appellant intimates, that a


pronouncement on the matter at hand can amount to nothing more
than an advisory opinion the handing down of which is anathema to a
declaratory relief action. Of course, no breach of the Postal Law has as
yet been committed. Yet, the disagreement over the construction
thereof is no longer nebulous or contingent. It has taken a fixed and
final shape, presenting clearly defined legal issues susceptible of
immediate resolution. With the battle lines drawn, in a manner of
speaking, the propriety nay, the necessity of setting the dispute
at rest before it accumulates the asperity, distemper, animosity,
passion and violence of a full-blown battle which looms ahead (III
Moran, Comments on the Rules of Court, 1963 ed., p. 132 and cases
cited), cannot but be conceded. Paraphrasing the language in Zeitlin v.
Arnebergh, 59 Cal., 2d., 901, 31 Cal. Rptr., 800, 383 P. 2d., 152, cited
in 22 Am. Jur., 2d., p. 869, to deny declaratory relief to the appellee in
the situation into which it has been cast, would be to force it to choose
between undesirable alternatives. If it cannot obtain a final and
definitive pronouncement as to whether the anti-lottery provisions of
the Postal Law apply to its proposed contest, it would be faced with
these choices: If it launches the contest and uses the mails for
purposes thereof, it not only incurs the risk, but is also actually
threatened with the certain imposition, of a fraud order with its
concomitant stigma which may attach even if the appellee will
eventually be vindicated; if it abandons the contest, it becomes a self-
appointed censor, or permits the appellant to put into effect a virtual
fiat of previous censorship which is constitutionally unwarranted. As
we weigh these considerations in one equation and in the spirit of
liberality with which the Rules of Court are to be interpreted in order to
promote their object (Section 1, Rule 1, Revised Rules of Court)
which, in the instant case, is to settle, and afford relief from
uncertainty and insecurity with respect to, rights and duties under a
law we cannot see in the present case any imposition upon our
jurisdiction or any futility or prematurity in our intervention.

The appellant, we apprehend, underrates the force and binding effect


of the ruling we hand down in this case if he believes that it will not
have the final and pacifying function that a declaratory judgment is
calculated to subserve. At the very least, the appellant will be bound.
But more than this, he obviously overlooks that in this jurisdiction,
"Judicial decisions applying or interpreting the law shall form a part of
the legal system" (Article 8, Civil Code of the Philippines). In effect,
judicial decision assume the same authority as the statute itself and,
until authoritatively abandoned, necessarily become, to the extent that
they are applicable, the criteria which must control the actuations not
only of those called upon to abide thereby but also of those in duty
bound to enforce obedience thereto. Accordingly, we entertain no
misgivings that our resolution of this case will terminate the
controversy at hand.

It is not amiss to point out at this juncture that the conclusion we have
herein just reached is not without precedent. In Liberty Calendar Co.
v. Cohen, 19 N. J., 399, 117 A. 2d., 487, where a corporation engaged
in promotional advertising was advised by the county prosecutor that
its proposed sales promotion plan had the characteristics of a lottery,
and that if such sales promotion were conducted, the corporation
would be subject to criminal prosecution, it was held that the
corporation was entitled to maintain a declaratory relief action against
the county prosecutor to determine the legality of its sales promotion
plan. In pari materia, see also: Bunis v. Conway, 17 App. Div. 2d.,
207, 234 N.Y.S. 2d., 435; Zeitlin v. Arnebergh, supra.; Thrillo, Inc. v.
Scott, 15 N.J. Super. 124, 82 A. 2d., 903.

In fine, we hold that the appellee has made out a case for declaratory
relief.

2. The Postal Law, chapter 52 of the Revised Administrative Code,


using almost identical terminology in sections 1954(a), 1982 and 1983
thereof, supra, condemns as absolutely non-mailable, and empowers
the Postmaster General to issue fraud orders against, or otherwise
deny the use of the facilities of the postal service to, any information
concerning "any lottery, gift enterprise, or scheme for the distribution
of money, or of any real or personal property by lot, chance, or
drawing of any kind." Upon these words hinges the resolution of the
second issue posed in this appeal.

Happily, this is not an altogether untrodden judicial path. As early as in


1922, in "El Debate", Inc. v. Topacio, 44 Phil., 278, 283-284, which
significantly dwelt on the power of the postal authorities under the
above-mentioned provisions of the Postal Law, this Court declared that

"While countless definitions of lottery have been attempted, the


authoritative one for this jurisdiction is that of the United States
Supreme Court, in analogous cases having, to do with the power of the
United States Postmaster General, viz.: The term lottery extends to
all schemes for the distribution of prizes by chance, such as policy
playing, gift exhibitions, prize concerts, raffles at fairs, etc., and
various forms of gambling. The three essential elements of a lottery
are: First, consideration; second, prize; and third, chance. (Horner v.
United States [1892], 147 U.S. 449; Public Clearing House v. Coyne
[1903], 194 U.S., 497; U.S. v. Filart and Singson [1915], 30 Phil., 80;
U.S. v. Olsen and Marker [1917], 36 Phil., 395; U.S. v. Baguio [1919],
39 Phil, 962; Valhalla Hotel Construction Company v. Carmona, p.
233, ante.)"

Unanimity there is in all quarters, and we agree, that the elements of


prize and chance are too obvious in the disputed scheme to be the
subject of contention. Consequently, as the appellant himself
concedes, the field of inquiry is narrowed down to the existence of the
element of consideration therein. Respecting this matter, our tasks is
considerably lightened inasmuch as in the same case just cited, this
Court has laid down a definitive yardstick in the following terms

"In respect to the last element of consideration, the law does not
condemn the gratuitous distribution of property by chance, if no
consideration is derived directly or indirectly from the party receiving
the chance, but does condemn as criminal schemes in which a valuable
consideration of some kind is paid directly or indirectly for the chance
to draw a prize."cralaw virtua1aw library

Reverting to the rules of the proposed contest, we are struck by the


clarity of the language in which the invitation to participate therein is
couched. Thus

"No puzzles. no rhymes? You dont need wrappers, labels or boxtops?


You dont have to buy anything? Simply estimate the actual number of
liters the Caltex gas pump with the hood at your favorite Caltex dealer
will dispense from . . . to . . ., and win valuable prizes. . . ."cralaw
virtua1aw library

Nowhere in the said rules is any requirement that any fee be paid, any
merchandise be bought, any service be rendered, or any value
whatsoever be given for the privilege to participate. A prospective
contestant has but to go to a Caltex station, request for the entry form
which is available on demand, and accomplish and submit the same
for the drawing of the winner. Viewed from all angles or turned inside
out, the contest fails to exhibit any discernible consideration which
would brand it as a lottery. Indeed, even as we heed the stern
injunction, "look beyond the fair exterior, to the substance, in order to
unmask the real element and pernicious tendencies which the law is
seeking to prevent" ("El Debate", Inc. v. Topacio, supra, p. 291), we
find none. In our appraisal, the scheme does not only appear to be,
but actually is, a gratuitous distribution of property by chance.

There is no point to the appellants insistence that non-Caltex


customers who may buy Caltex products simply to win a prize would
actually be indirectly paying a consideration for the privilege to join
the contest. Perhaps this would be tenable if the purchase of any
Caltex product or the use of any Caltex service were a pre-requisite to
participation. But it is not. A contestant, it hardly needs reiterating,
does not have to buy anything or to give anything of value.

Off-tangent, too, is the suggestion that the scheme, being admittedly


for sales promotion, would naturally benefit the sponsor in the way of
increased patronage by those who will be encouraged to prefer Caltex
products "if only to get the chance to draw a prize by securing entry
blanks." The required element of consideration does not consist of the
benefit derived by the proponent of the contest. The true test, as laid
down in People v. Cardas, 28 P. 2d. 99, 137 Cal. App. (Supp). 788, is
whether the participant pays a valuable consideration for the chance,
and not whether those conducting the enterprise receive something of
value in return for the distribution of the prize. Perspective properly
oriented, the standpoint of the contestant is all that matters, not that
of the sponsor. The following, culled from Corpus Juris Secundum,
should set the matter at rest:jgc:chanrobles.com.ph

"The fact that the holder of the drawing expects thereby to receive, or
in fact does receive, some benefit in the way of patronage or
otherwise, as a result of the drawing, does not supply the element of
consideration. Griffith Amusement Co. v. Morgan, Tex. Civ. App., 98
S.W. 2d., 844." (54 C.J.S., p. 849).

Thus enlightened, we join the trial court in declaring that the "Caltex
Hooded Pump Contest" proposed by the appellee is not a lottery that
may be administratively and adversely dealt with under the Postal
Law.chanrobles virtual lawlibrary

But it may be asked: Is it not at least a "gift enterprise, or scheme for


the distribution of money, or of any real or personal property by lot,
chance, or drawing of any kind", which is equally proscribed?
Incidentally, while the appellants brief appears to have concentrated
on the issue of consideration, this aspect of the case cannot be
avoided if the remedy here invoked is to achieve its tranquilizing effect
as an instrument of both curative and preventive justice. Recalling that
the appellants action was predicted, amongst other bases, upon
Opinion 217, Series 1953, of the Secretary of Justice, which opined in
effect that a scheme, though not a lottery for want of consideration,
may nevertheless be a gift enterprise in which that element is not
essential, the determination of whether or not the proposed contest
wanting in consideration as we have found it to be is a prohibited
gift enterprise, cannot be passed over sub silencio.

While an all-embracing concept of the term "gift enterprise" is yet to


be spelled out in explicit words, there appears to be a consensus
among lexicographers and standard authorities that the term is
commonly applied to a sporting artifice under which goods are sold for
their market value but by way of inducement each purchaser is given a
chance to win a prize (54 C.J.S., 850; 34 Am. Jur., 654; Black, Law
Dictionary, 4th ed., p. 817; Ballantine, Law Dictionary with
Pronunciations, 2nd ed., p. 55; Retail Section of Chamber of
Commerce of Plattsmouth v. Kieck, 257 N.W., 493, 128 Neb. 13;
Barker v. State, 193 S.E., 605, 56 Ga. App., 705; Bell v. State, 37
Tenn. 507, 509, 5 Sneed, 507, 509). As thus conceived, the term
clearly cannot embrace the scheme at bar. As already noted, there is
no sale of anything to which the chance offered is attached as an
inducement to the purchaser. The contest is open to all qualified
contestants irrespective of whether or not they buy the appellees
products.
Going a step farther, however, and assuming that the appellees
contest can be encompassed within the broadest sweep that the term
"gift enterprise" is capable of being extended, we think that the
appellants pose will gain no added comfort. As stated in the opinion
relied upon, rulings there are indeed holding that a gift enterprise
involving an award by chance, even in default of the element of
consideration necessary to constitute a lottery, is prohibited (E.g.:
Crimes v. State, 235 Ala. 192, 178 So. 73; Russell v. Equitable Loan &
Sec. Co., 129 Ga., 154, 58 S.E, 88; State ex rel. Stafford v. Fox- Great
Falls Theater Corporation, 132 P. 2d., 689, 694, 698, 114 Mont. 52).
But this is only one side of the coin. Equally impressive authorities
declare that, like a lottery, a gift enterprise comes within the
prohibitive statutes only if it exhibits the tripartite elements of prize,
chance and consideration (E.g.: Bills v. People, 157 P. 2d., 139, 142,
113 Colo., 326; DOrio v. Jacobs, 275 P. 563, 565, 151 Wash., 297;
People v. Psallis, 12 N.Y.S., 2d., 796; City and County of Denver v.
Frueauff, 88 P., 389, 394, 39 Colo. 20, 7 L.R.A., N. S. 1131, 12 Ann.
Cas., 521; 54 C.J.S., 851, citing: Barker v. State, 193 S.E., 605, 607,
56 Ga. App., 705; 18 Words and Phrases, perm. ed., pp. 590-594).
The apparent conflict of opinions is explained by the fact that the
specific statutory provisions relied upon are not identical. In some
cases, as pointed out in 54 C.J.S., 851, the terms "lottery" and "gift
enterprise" are used interchangeably (Bills v. People, supra,); in
others, the necessity for the element of consideration or chance has
been specifically eliminated by statute (54 C.J.S., 351-352, citing
Barker v. State, supra; State ex rel. Stafford v. Fox-Great Falls
Theater Corporation, supra). The lesson that we derive from this state
of the pertinent jurisprudence is, therefore, that every case must be
resolved upon the particular phraseology of the applicable statutory
provision.

Taking this cue, we note that in the Postal Law, the term in question is
used in association with the word "lottery." With the meaning of lottery
settled, and consonant to the well-known principle of legal
hermeneutics noscitur a sociis which Opinion 217 aforesaid also
relied upon although only in so far as the element of chance is
concerned it is only logical that the term under construction should
be accorded no other meaning than that which is consistent with the
nature of the word associated therewith. Hence, if lottery is prohibited
only if it involves a consideration, so also must the term "gift
enterprise" be so construed. Significantly, there is not in the law the
slightest indicium of any intent to eliminate that element of
consideration from the "gift enterprise" therein included.

This conclusion firms up in the light of the mischief sought to be


remedied by the law, resort to the determination thereof being an
accepted extrinsic aid in statutory construction. Mail fraud orders, it is
axiomatic, are designed to prevent the use of the mails as a medium
for disseminating printed matters which on grounds of public policy are
declared non-mailable. As applied to lotteries, gift enterprises and
similar schemes, justification lies in the recognized necessity to
suppress their tendency to inflame the gambling spirit and to corrupt
public morals (Com. v. Lund, 15 A. 2d., 839, 143 Pa. Super. 208).
Since in gambling it is inherent that something of value be hazarded
for a chance to gain a larger amount, it follows ineluctably that where
no consideration is paid by the contestant to participate, the reason
behind the law can hardly be said to obtain. If, as it has been held

"Gratuitous distribution of property by lot or chance does not


constitute lottery, if it is not resorted to as a device to evade the law
and no consideration is derived, directly or indirectly, from the party
receiving the chance, gambling spirit not being cultivated or stimulated
thereby. City of Roswell v. Jones, 67 P. 2d., 286, 41 N.M., 258." (25
Words and Phrases, perm. ed., p. 695, Emphasis supplied).

we find no obstacle in saying the same respecting a gift enterprise. In


the end, we are persuaded to hold that, under the prohibitive
provisions of the Postal Law which we have heretofore examined, gift
enterprises and similar schemes therein contemplated are
condemnable only if, like lotteries, they involve the element of
consideration. Finding none in the contest here in question, we rule
that the appellee may not be denied the use of the mails for purposes
thereof.chanroblesvirtual|awlibrary

Recapitulating, we hold that the petition herein states a sufficient


cause of action for declaratory relief, and that the "Caltex Hooded
Pump Contest" as described in the rules submitted by the appellee
does not transgress the provisions of the Postal Law.

ACCORDINGLY, the judgment appealed from is affirmed. No costs.


Concepcion, C.J., Reyes, J.B.L., Barrera, Dizon, Regala Makalintal,
Bengzon, J.P., Zaldivar and Sanchez, JJ., concur.

SECOND DIVISION

[G.R. No. L-30061. February 27, 1974.]

THE PEOPLE OF THE PHILIPPINES, Plaintiffs-Appellees, v. JOSE


JABINAL Y CARMEN, Defendant-Appellant.

Solicitor General Felix V . Makasiar and Solicitor Antonio M.


Martinez for Plaintiff-Appellee.

Pedro Panganiban y Tolentino, for Defendant-Appellant.

DECISION

ANTONIO, J.:

Appeal from the judgment of the Municipal Court of Batangas


(provincial capital), Batangas, in Criminal Case No. 889, finding the
accused guilty of the crime of Illegal Possession of Firearm and
Ammunition and sentencing him to suffer an indeterminate penalty
ranging from one (1) year and one (1) day to two (2) years
imprisonment, with the accessories provided by law, which raises in
issue the validity of his conviction based on a retroactive application of
Our ruling in People v. Mapa. 1

The complaint filed against the accused reads:jgc:chanrobles.com.ph


"That on or about 9:00 oclock, p.m., the 5th day of September, 1964,
in the poblacion, Municipality of Batangas, Province of Batangas,
Philippines, and within the jurisdiction of this Honorable Court, the
above-named accused, a person not authorized by law, did then and
there wilfully, unlawfully and feloniously keep in his possession,
custody and direct control a revolver Cal. .22, RG-8 German made
with one (1) live ammunition and four (4) empty shells without first
securing the necessary permit or license to possess the same."cralaw
virtua1aw library

At the arraignment on September 11, 1964, the accused entered a


plea of not guilty, after which trial was accordingly held.

The accused admitted that on September 5, 1964, he was in


possession of the revolver and the ammunition described in the
complaint, without the requisite license or permit. He, however,
claimed to be entitled to exoneration because, although he had no
license or permit, he had an appointment as Secret Agent from the
Provincial Governor of Batangas and an appointment as Confidential
Agent from the PC Provincial Commander, and the said appointments
expressly carried with them the authority to possess and carry the
firearm in question.

Indeed, the accused had appointments from the above-mentioned


officials as claimed by him. His appointment from Governor Feliciano
Leviste, dated December 10, 1962, reads:jgc:chanrobles.com.ph

"Reposing special trust and confidence in your civic spirit, and trusting
that you will be an effective agent in the detection of crimes and in the
preservation of peace and order in the province of Batangas, especially
with respect to the suppression of trafficking in explosives, jueteng,
illegal cockfighting, cattle rustling, robbery and the detection of
unlicensed firearms, you are hereby appointed a SECRET AGENT of the
undersigned, the appointment to take effect immediately, or as soon
as you have qualified for the position. As such Secret Agent, your
duties shall be those generally of a peace officer and particularly to
help in the preservation of peace and order in this province and to
make reports thereon to me once or twice a month. It should be
clearly understood that any abuse of authority on your part shall be
considered sufficient ground for the automatic cancellation of your
appointment and immediate separation from the service. In
accordance with the decision of the Supreme Court in G.R. No. L-
12088 dated December 23, 1969, you will have the right to bear a
firearm, particularly described below, for use in connection with the
performance of your duties.

"By virtue hereof, you may qualify and enter upon the performance of
your duties by taking your oath of office and filing the original thereof
with us.

Very truly yours,

(Sgd.) FELICIANO LEVISTE

Provincial Governor

FIREARM AUTHORIZED TO CARRY:chanrob1es virtual 1aw library

Kind: ROHM-Revolver

Make: German

SN: 64

Cal: .22"

On March 15, 1964, the accused was also appointed by the PC


Provincial Commander of Batangas as Confidential Agent with duties to
furnish information regarding smuggling activities wanted persons,
loose firearms, subversives and other similar subjects that night affect
the peace and order condition in Batangas province, and in connection
with these duties he was temporarily authorized to possess an ROHM
revolver, Cal. .22 RG-8 SN-64, for his personal protection while in the
performance of official duties.

The accused contended before the court a quo that in view of his
above-mentioned appointments as Secret Agent and Confidential
Agent, with authority to possess the firearm subject matter of the
prosecution, he was entitled to acquittal on the basis of the Supreme
Courts decisions in People v. Macarandang 2 and People v. Lucero. 3
The trial court, while conceding that on the basis of the evidence of
record the accused had really been appointed Secret Agent and
Confidential Agent by the Provincial Governor and the PC Provincial
Commander of Batangas, respectively, with authority to possess and
carry the firearm described in the complaint, nevertheless held the
accused in its decision dated December 27, 1968, criminally liable for
illegal possession of a firearm and ammunition on the ground that the
rulings of the Supreme Court in the cases of Macarandang and Lucero
were reversed and abandoned in People v. Mapa, supra. The court
considered as mitigating circumstances the appointments of the
accused as Secret Agent and Confidential Agent.

Let us advert to Our decisions in People v. Macarandang, supra, People


v. Lucero, supra, and People v. Mapa, supra. In Macarandang, We
reversed the trial courts judgment of conviction against the accused
because it was shown that at the time he was found to possess a
certain firearm and ammunition without license or permit, he had an
appointment from the Provincial Governor as Secret Agent to assist in
the maintenance of peace and order and in the detection of crimes,
with authority to hold and carry the said firearm and ammunition. We
there held that while it is true that the Governor has no authority to
issue any firearm license or permit, nevertheless, section 879 of the
Revised Administrative Code provides that "peace officers" are
exempted from the requirements relating to the issuance of license to
possess firearms; and Macarandangs appointment as Secret Agent to
assist in the maintenance of peace and order and detection of crimes,
sufficiently placed him in the category of a "peace officer" equivalent
even to a member of the municipal police who under section 879 of
the Revised Administrative Code are exempted from the requirements
relating to the issuance of license to possess firearms. In Lucero, We
held that under the circumstances of the case, the granting of the
temporary use of the firearm to the accused was a necessary means to
carry out the lawful purpose of the battalion commander and must be
deemed incident to or necessarily included in the duty and power of
said military commander to effect the capture of a Huk leader. In
Mapa, expressly abandoning the doctrine in Macarandang, and by
implication, that in Lucero, We sustained the judgment of conviction
on the following ground:jgc:chanrobles.com.ph

"The law is explicit that except as thereafter specifically allowed, it


shall be unlawful for any person to . . . possess any firearm, detached
parts of firearms or ammunition therefor, or any instrument or
implement used or intended to be used in the manufacture of firearms,
parts of firearms, or ammunition. (Sec. 878, as amended by Republic
Act No. 4, Revised Administrative Code.) The next section provides
that firearms and ammunition regularly and lawfully issued to officers,
soldiers, sailors, or marines [of the Armed Forces of the Philippines],
the Philippine Constabulary, guards in the employment of the Bureau
of Prisons, municipal police, provincial governors, lieutenant
governors, provincial treasurers, municipal treasurers, municipal
mayors, and guards of provincial prisoners and jails, are not covered
when such firearms are in possession of such officials and public
servants for use in the performance of their official duties. (Sec. 879,
Revised Administrative Code.)

The law cannot be any clearer. No provision is made for a secret


agent. As such he is not exempt. . . ."cralaw virtua1aw library

It will be noted that when appellant was appointed Secret Agent by the
Provincial Government in 1962, and Confidential Agent by the
Provincial Commander in 1964, the prevailing doctrine on the matter
was that laid down by Us in People v. Macarandang (1959) and People
v. Lucero (1958). Our decision in People v. Mapa reversing the
aforesaid doctrine came only in 1967. The sole question in this appeal
is: Should appellant be acquitted on the basis of Our rulings in
Macarandang and Lucero, or should his conviction stand in view of the
complete reversal of the Macarandang and Lucero doctrine in Mapa?
The Solicitor General is of the first view, and he accordingly
recommends reversal of the appealed judgment.

Decisions of this Court, although in themselves not laws, are


nevertheless evidence of what the laws mean, and this is the reason
why under Article 8 of the New Civil Code, "Judicial decisions applying
or interpreting the laws or the Constitution shall form a part of the
legal system . . ." The interpretation upon a law by this Court
constitutes, in a way, a part of the law as of the date that law was
originally passed, since this Courts construction merely establishes the
contemporaneous legislative intent that the law thus construed intends
to effectuate. The settled rule supported by numerous authorities is a
restatement of the legal maxim "legis interpretatio legis vim obtinet"
the interpretation placed upon the written law by a competent court
has the force of law. The doctrine laid down in Lucero and
Macarandang was part of the jurisprudence, hence, of the law, of the
land, at the time appellant was found by possession of the firearm in
question and when he was arraigned by the trial court. It is true that
the doctrine was overruled in the Mapa case in 1967, but when a
doctrine of this Court is overruled and a different view is adopted, the
new doctrine should be applied prospectively, and should not apply to
parties who had relied on the old doctrine and acted on the faith
thereof. This is especially true in the construction and application of
criminal laws, where it is necessary that the punishability of an act be
reasonably foreseen for the guidance of society.

It follows, therefore, that considering that appellant was conferred his


appointments as Secret Agent and Confidential Agent and authorized
to possess a firearm pursuant to the prevailing doctrine enunciated in
Macarandang and Lucero, under which no criminal liability would
attach to his possession of said firearm in spite of the absence of a
license and permit therefor, appellant must he absolved. Certainly,
appellant may not be punished for an act which at the time it was
done was held not to be punishable.

WHEREFORE, the judgment appealed from is hereby reversed, and


appellant is acquitted, with costs de oficio.

Zaldivar, Barredo, Fernandez and Aquino, JJ., concur.

Fernando, J., did not take part.

EN BANC

G.R. No. L-23678 June 6, 1967

TESTATE ESTATE OF AMOS G. BELLIS, deceased.


PEOPLE'S BANK and TRUST COMPANY, executor.
MARIA CRISTINA BELLIS and MIRIAM PALMA
BELLIS, oppositors-appellants, vs. EDWARD A. BELLIS, ET
AL., heirs-appellees.
Vicente R. Macasaet and Jose D. Villena for oppositors appellants.
Paredes, Poblador, Cruz and Nazareno for heirs-appellees E. A. Bellis,
et al.
Quijano and Arroyo for heirs-appellees W. S. Bellis, et al.
J. R. Balonkita for appellee People's Bank & Trust Company.
Ozaeta, Gibbs and Ozaeta for appellee A. B. Allsman.

BENGZON, J.P., J.:chanrobles virtual law library

This is a direct appeal to Us, upon a question purely of law, from an


order of the Court of First Instance of Manila dated April 30, 1964,
approving the project of partition filed by the executor in Civil Case
No. 37089 therein.chanroblesvirtualawlibrarychanrobles virtual law
library

The facts of the case are as follows:chanrobles virtual law library

Amos G. Bellis, born in Texas, was "a citizen of the State of Texas and
of the United States." By his first wife, Mary E. Mallen, whom he
divorced, he had five legitimate children: Edward A. Bellis, George
Bellis (who pre-deceased him in infancy), Henry A. Bellis, Alexander
Bellis and Anna Bellis Allsman; by his second wife, Violet Kennedy,
who survived him, he had three legitimate children: Edwin G. Bellis,
Walter S. Bellis and Dorothy Bellis; and finally, he had three
illegitimate children: Amos Bellis, Jr., Maria Cristina Bellis and Miriam
Palma Bellis.chanroblesvirtualawlibrarychanrobles virtual law library

On August 5, 1952, Amos G. Bellis executed a will in the Philippines, in


which he directed that after all taxes, obligations, and expenses of
administration are paid for, his distributable estate should be divided,
in trust, in the following order and manner: (a) $240,000.00 to his
first wife, Mary E. Mallen; (b) P120,000.00 to his three illegitimate
children, Amos Bellis, Jr., Maria Cristina Bellis, Miriam Palma Bellis, or
P40,000.00 each and (c) after the foregoing two items have been
satisfied, the remainder shall go to his seven surviving children by his
first and second wives, namely: Edward A. Bellis, Henry A. Bellis,
Alexander Bellis and Anna Bellis Allsman, Edwin G. Bellis, Walter S.
Bellis, and Dorothy E. Bellis, in equal
shares.chanroblesvirtualawlibrarychanrobles virtual law library
Subsequently, or on July 8, 1958, Amos G. Bellis died a resident of
San Antonio, Texas, U.S.A. His will was admitted to probate in the
Court of First Instance of Manila on September 15,
1958.chanroblesvirtualawlibrarychanrobles virtual law library

The People's Bank and Trust Company, as executor of the will, paid all
the bequests therein including the amount of $240,000.00 in the form
of shares of stock to Mary E. Mallen and to the three (3) illegitimate
children, Amos Bellis, Jr., Maria Cristina Bellis and Miriam Palma Bellis,
various amounts totalling P40,000.00 each in satisfaction of their
respective legacies, or a total of P120,000.00, which it released from
time to time according as the lower court approved and allowed the
various motions or petitions filed by the latter three requesting partial
advances on account of their respective
legacies.chanroblesvirtualawlibrarychanrobles virtual law library

On January 8, 1964, preparatory to closing its administration, the


executor submitted and filed its "Executor's Final Account, Report of
Administration and Project of Partition" wherein it reported, inter alia,
the satisfaction of the legacy of Mary E. Mallen by the delivery to her
of shares of stock amounting to $240,000.00, and the legacies of
Amos Bellis, Jr., Maria Cristina Bellis and Miriam Palma Bellis in the
amount of P40,000.00 each or a total of P120,000.00. In the project of
partition, the executor - pursuant to the "Twelfth" clause of the
testator's Last Will and Testament - divided the residuary estate into
seven equal portions for the benefit of the testator's seven legitimate
children by his first and second
marriages.chanroblesvirtualawlibrarychanrobles virtual law library

On January 17, 1964, Maria Cristina Bellis and Miriam Palma Bellis
filed their respective oppositions to the project of partition on the
ground that they were deprived of their legitimes as illegitimate
children and, therefore, compulsory heirs of the
deceased.chanroblesvirtualawlibrarychanrobles virtual law library

Amos Bellis, Jr. interposed no opposition despite notice to him, proof


of service of which is evidenced by the registry receipt submitted on
April 27, 1964 by the executor.1chanrobles virtual law library

After the parties filed their respective memoranda and other pertinent
pleadings, the lower court, on April 30, 1964, issued an order
overruling the oppositions and approving the executor's final account,
report and administration and project of partition. Relying upon Art. 16
of the Civil Code, it applied the national law of the decedent, which in
this case is Texas law, which did not provide for
legitimes.chanroblesvirtualawlibrarychanrobles virtual law library

Their respective motions for reconsideration having been denied by the


lower court on June 11, 1964, oppositors-appellants appealed to this
Court to raise the issue of which law must apply - Texas law or
Philippine law.chanroblesvirtualawlibrarychanrobles virtual law library

In this regard, the parties do not submit the case on, nor even discuss,
the doctrine of renvoi, applied by this Court in Aznar v. Christensen
Garcia, L-16749, January 31, 1963. Said doctrine is usually pertinent
where the decedent is a national of one country, and a domicile of
another. In the present case, it is not disputed that the decedent was
both a national of Texas and a domicile thereof at the time of his
death.2 So that even assuming Texas has a conflict of law rule
providing that the domiciliary system (law of the domicile) should
govern, the same would not result in a reference back (renvoi) to
Philippine law, but would still refer to Texas law. Nonetheless, if Texas
has a conflicts rule adopting the situs theory (lex rei sitae) calling for
the application of the law of the place where the properties are
situated, renvoi would arise, since the properties here involved are
found in the Philippines. In the absence, however, of proof as to the
conflict of law rule of Texas, it should not be presumed different from
ours.3 Appellants' position is therefore not rested on the doctrine of
renvoi. As stated, they never invoked nor even mentioned it in their
arguments. Rather, they argue that their case falls under the
circumstances mentioned in the third paragraph of Article 17 in
relation to Article 16 of the Civil
Code.chanroblesvirtualawlibrarychanrobles virtual law library

Article 16, par. 2, and Art. 1039 of the Civil Code, render applicable
the national law of the decedent, in intestate or testamentary
successions, with regard to four items: (a) the order of succession; (b)
the amount of successional rights; (e) the intrinsic validity of the
provisions of the will; and (d) the capacity to succeed. They provide
that -
ART. 16. Real property as well as personal property is subject to the
law of the country where it is
situated.chanroblesvirtualawlibrarychanrobles virtual law library

However, intestate and testamentary successions, both with respect to


the order of succession and to the amount of successional rights and
to the intrinsic validity of testamentary provisions, shall be regulated
by the national law of the person whose succession is under
consideration, whatever may he the nature of the property and
regardless of the country wherein said property may be
found.chanroblesvirtualawlibrarychanrobles virtual law library

ART. 1039. Capacity to succeed is governed by the law of the nation of


the decedent.

Appellants would however counter that Art. 17, paragraph three, of


the Civil Code, stating that -

Prohibitive laws concerning persons, their acts or property, and those


which have for their object public order, public policy and good
customs shall not be rendered ineffective by laws or judgments
promulgated, or by determinations or conventions agreed upon in a
foreign country.

prevails as the exception to Art. 16, par. 2 of the Civil Code afore-
quoted. This is not correct. Precisely, Congress deleted the phrase,
"notwithstanding the provisions of this and the next preceding article"
when they incorporated Art. 11 of the old Civil Code as Art. 17 of the
new Civil Code, while reproducing without substantial change the
second paragraph of Art. 10 of the old Civil Code as Art. 16 in the new.
It must have been their purpose to make the second paragraph of Art.
16 a specific provision in itself which must be applied in testate and
intestate succession. As further indication of this legislative intent,
Congress added a new provision, under Art. 1039, which decrees that
capacity to succeed is to be governed by the national law of the
decedent.chanroblesvirtualawlibrarychanrobles virtual law library

It is therefore evident that whatever public policy or good customs


may be involved in our System of legitimes, Congress has not
intended to extend the same to the succession of foreign nationals. For
it has specifically chosen to leave, inter alia, the amount of
successional rights, to the decedent's national law. Specific provisions
must prevail over general ones.chanroblesvirtualawlibrarychanrobles
virtual law library

Appellants would also point out that the decedent executed two wills -
one to govern his Texas estate and the other his Philippine estate -
arguing from this that he intended Philippine law to govern his
Philippine estate. Assuming that such was the decedent's intention in
executing a separate Philippine will, it would not alter the law, for as
this Court ruled in Miciano v. Brimo, 50 Phil. 867, 870, a provision in a
foreigner's will to the effect that his properties shall be distributed in
accordance with Philippine law and not with his national law, is illegal
and void, for his national law cannot be ignored in regard to those
matters that Article 10 - now Article 16 - of the Civil Code states said
national law should govern.chanroblesvirtualawlibrarychanrobles
virtual law library

The parties admit that the decedent, Amos G. Bellis, was a citizen of
the State of Texas, U.S.A., and that under the laws of Texas, there are
no forced heirs or legitimes. Accordingly, since the intrinsic validity of
the provision of the will and the amount of successional rights are to
be determined under Texas law, the Philippine law on legitimes cannot
be applied to the testacy of Amos G.
Bellis.chanroblesvirtualawlibrarychanrobles virtual law library

Wherefore, the order of the probate court is hereby affirmed in toto,


with costs against appellants. So ordered.

Concepcion, C.J., Reyes, J.B.L., Dizon, Regala, Makalintal, Zaldivar,


Sanchez and Castro, JJ., concur.chanrobles virtual law library

Endnotes:
1
He later filed a motion praying that as a legal heir he be included in
this case as one of the oppositors-appellants; to file or adopt the
opposition of his sisters to the project of partition; to submit his brief
after paying his proportionate share in the expenses incurred in the
printing of the record on appeal; or to allow him to adopt the briefs
filed by his sisters - but this Court resolved to deny the motion.
2
San Antonio, Texas was his legal residence.
3
Lim vs. Collector, 36 Phil. 472; In re Testate Estate of Suntay, 95
Phil. 500.

Wala 124110

THIRD DIVISION

[G.R. No. 88694. January 11, 1993.]

ALBENSON ENTERPRISES CORP., JESSE YAP, AND BENJAMIN


MENDIONA, Petitioners, v. THE COURT OF APPEALS AND
EUGENIO S. BALTAO, Respondents.

Puruganan, Chato, Chato & Tan, for Petitioners.

Lino M. Patajo, Francisco Ma. Chanco, Ananiano Desierto and


Segundo Mangohig for Private Respondent.

SYLLABUS

1. CIVIL LAW; HUMAN RELATIONS; PRINCIPLE OF ABUSE OF RIGHTS;


CONSTRUED. Article 19, known to contain what is commonly
referred to as the principle of abuse of rights, sets certain standards
which may be observed not only in the exercise of ones rights but also
in the performance of ones duties. These standards are the following:
to act with justice; to give everyone his due; and to observe honesty
and good faith. The law, therefore, recognizes the primordial limitation
on all rights; that in their exercises, the norms of human conduct set
forth in Article 19 must be observed. A right, though by itself legal
because recognized or granted by law as such, may nevertheless
become the source of some illegality. When a right is exercised in a
manner which does not conform with the norms enshrined in Article 19
and results in damage to another, a legal wrong is thereby committed
for which the wrongdoer must be held responsible. Although the
requirements of each provision is different, these three (3) articles are
all related to each other. As the eminent Civilist Senator Arturo
Tolentino puts it: "With this article (Article 21), combined with Articles
19 and 20, the scope of our law on civil wrongs has been very greatly
broadened; it has become much more supple and adaptable that the
Anglo-American law on torts. It is now difficult to conceive of any
malevolent exercise of a right which could not be checked by the
application of these articles" (Tolentino, 1 Civil Code of the Philippines
72). There is however, no hard and fast rule which can be applied to
determine whether or not the principle of abuse of rights may be
invoked. The question of whether or not the principle of abuse of rights
has been violated, resulting in damages under Article 20 and 21 or
other applicable provision of law, depends on the circumstances of
each case. (Globe Mackay Cable and Radio Corporation v. Court of
Appeals, 176 SCRA 778 [1989]).

2. ID.; ID.; ID.; ELEMENTS. The elements of an abuse of right


under Article 19 are the following: (1) There is a legal right or duty;
(2) which is exercised in bad faith; (3) for the sole intent of prejudicing
or injuring another. Article 20 speaks of the general sanction for all
other provisions of law which do not especially provide for their own
sanction (Tolentino, supra, p. 71). Thus, anyone who, whether willfully
or negligently, in the exercise of his legal right or duty, causes damage
to another, shall indemnify his victim for injuries suffered thereby.
Article 21 deals with acts contra bonus mores, and has the following
elements: 1) There is an act which is legal; 2) but which is contrary to
morals, good custom, public order, or public policy; 3) and it is done
with intent to injure. Thus, under any of these three (3) provisions of
law, an act which causes injury to another may be made the basis for
an award of damages.

3. ID.; DAMAGES; MORAL DAMAGES; CANNOT BE AWARDED IN THE


ABSENCE OF WRONGFUL ACT OR OMISSION OR OF FRAUD OR BAD
FAITH. The criminal complaint filed against private respondent after
the latter refused to make good the amount of the bouncing check
despite demand was a sincere attempt on the part of petitioners to
find the best possible means by which they could collect the sum of
money due them. A person who has not been paid an obligation owed
to him will naturally seek ways to compel the debtor to pay him. It
was normal for petitioners to find means to make the issuer of the
check pay the amount thereof. In the absence of a wrongful act or
omission or of fraud or bad faith, moral damages cannot be awarded
and that the adverse result of an action does not per se make the
action wrongful and subject the actor to the payment of damages, for
the law could not have meant to impose a penalty on the right to
litigate (Rubio v. Court of Appeals, 141 SCRA 488 [1986]).

4. ID.; ID.; AWARD THEREOF ON BASIS ON MALICIOUS


PROSECUTION; ELEMENTS. To constitute malicious prosecution,
there must be proof that the prosecution was prompted by a sinister
design to vex and humiliate a person, and that it was initiated
deliberately by the defendant knowing that his charges were false and
groundless. Concededly, the mere act of submitting a case to the
authorities for prosecution. (Manila Gas Corporation v. Court of
Appeals, 100 SCRA 602 [1980]). Still, private respondent argues that
liability under Articles 19, 20, and 21 of the Civil Code is so
encompassing that it likewise includes liability for damages for
malicious prosecution under Article 2219 (8). True, a civil action for
damages for malicious prosecution is allowed under the New Civil
Code, more specifically Articles 19, 20, 26, 29, 32, 33, 35, and 2219
(8) thereof. In order that such a case can prosper, however, the
following three (3) elements must be present, to wit: (1) The fact of
the prosecution and the further fact that the defendant was himself
the prosecutor, and that the action was finally terminated with an
acquittal; (2) That in bringing the action, the prosecutor acted without
probable cause; (3) The prosecutor was actuated or impelled by legal
malice (Lao v. Court of Appeals, 199 SCRA 58, [1991]).

5. ID.; ID.; ID.; ID.; EXCEPTION. Thus, a party injured by the filing
of a court case against him, even if he is later on absolved, may file a
case for damages grounded either on the principle of abuse of rights,
or on malicious prosecution. As earlier stated, a complaint for damages
based on malicious prosecution will prosper only if the three (3)
elements aforecited are shown to exist. In the case at bar, the second
and third elements were not shown to exist. It is well-settled that one
cannot be held liable for maliciously instituting a prosecution where
one has acted with probable cause. "Probable cause is the existence of
such facts and circumstances as would excite the belief, in a
reasonable mind, acting on the facts within the knowledge of the
prosecutor, that the person charged was guilty of the crime for which
he was prosecuted. In other words, a suit will lie only in cases where a
legal prosecution has been carried on without probable cause. The
reason for this rule is that it would be a very great discouragement to
public justice, if prosecutors, who had tolerable ground of suspicion,
were liable to be sued at law when their indictment miscarried" (Que
v. Intermediate Appellate Court, 169 SCRA 137 [1989]). The presence
of probable cause signified, as a legal consequence, the absence of
malice. In the instant case, it is evident that petitioners were not
motivated by malicious intent or by sinister design to unduly harass
private respondent, but only by a well-founded anxiety to protect their
rights when they filed the criminal complaint against
private Respondent. "To constitute malicious prosecution, there must
be proof that the prosecution was prompted by a sinister design to vex
and humiliate a person, that it was initiated deliberately by the
defendant knowing that his charges where false and groundless.
Concededly, the mere act of submitting a case to the authorities for
prosecution does not make one liable for malicious prosecution. Proof
and motive that the institution of the action was prompted by a
sinister design to vex and humiliate a person must be clearly and
preponderantly established to entitle the victims to damages."cralaw
virtua1aw library

6. ID.; ID.; UNWARRANTED, WHERE THE ACTION WAS FILED IN


GOOD FAITH AND DAMAGE RESULTS FROM A PERSONS EXERCISING
HIS LEGAL RIGHTS. The root of the controversy in this case is
founded on a case of mistaken identity. It is possible that with a more
assiduous investigation, petitioners would have eventually discovered
that private respondent Eugenio S. Baltao is not the "Eugenio Baltao"
responsible for the dishonor check. However, the record shows that
petitioners did exert considerable effort in order to determine the
liability of private Respondent. Their investigation pointed to private
respondent as the "Eugenio Baltao" who issued and signed the
dishonored check as the president of the debtor-corporation
Guaranteed Enterprises. Their error in proceeding against the wrong
individual was obviously in the nature of an innocent mistake, and
cannot be characterized as having been committed in bad faith. This
error could have been discovered if respondent had submitted his
counter-affidavit before investigating fiscal Sumaway and was
immediately rectified by Provincial Fiscal Mauro Castro upon discovery
thereof, i.e., during the reinvestigation resulting in the dismissal of the
complaint. Furthermore, the adverse result of an action does not per
se make the act wrongful and subject the actor to the payment of
moral damages. The law could not have meant to impose a penalty on
the right to litigate, such right is so precious that moral damages may
be charged on those who may even exercise it erroneously. And an
adverse decision does not ipso facto justify the award of attorneys
fees to the winning party (Garcia v. Gonzales, 183 SCRA 72 [1990]).
Thus, an award of damages and attorneys fees is unwarranted where
the action was filed in good faith. If damage results from a persons
exercising his legal rights, it is damnum absque injuria (Ilocos Norte
Electric Company v. Court of Appeals, 179 SCRA 5 [1989]).

7. ID.; ID.; ACTUAL AND COMPENSATORY DAMAGES; PECUNIARY


LOSS MUST SUBSTANTIALLY BE PROVED. Coming now to the claim
of private respondent for actual or compensatory damages, the
records show that the same was based solely on his allegations
without proof to substantiate the same. He did not present proof of the
cost of the medical treatment which he claimed to have undergone as
a result of the nervous breakdown he suffered, not did he present
proof of the actual loss to his business cause by the unjust litigation
against him. In determining actual damages, the court cannot rely on
speculation, conjectures or guesswork as to the amount. Without the
actual proof of loss, the award of actual damages becomes erroneous
(Guilatco v. City of Dagupan, 171 SCRA 382 [1989]). Actual and
compensatory damages are those recoverable because of pecuniary
loss in business, trade, property, profession, job or occupation
and the same must be proved, otherwise, if the proof is flimsy and
unsubstantiated, no damages will be given (Rubio v. Court of Appeals,
141 SCRA 488 [1986]). For these reason, it was gravely erroneous for
respondent court to have affirmed the award of actual damages in
favor of private respondent in the absence of proof thereof.

8. LEGAL ETHICS; ATTORNEYS FEES; AWARD THEREOF MUST BE


DISALLOWED WHERE THE AWARD OF EXEMPLARY DAMAGES IS
ELIMINATED. The award of attorneys fees must be disallowed
where the award of exemplary damages is eliminated (Article 2208,
Civil Code; Agustin v. Court of Appeals, 186 SCRA 375 [1990]).
Moreover, in view of the fact that there was no malicious prosecution
against private respondent, attorneys fees cannot be awarded him on
that ground.

DECISION

BIDIN, J.:

This petition assails the decision of respondent Court of Appeals in CA-


GR CV No. 14948 entitled "Eugenio S. Baltao, plaintiff-appellee v.
Albenson Enterprises Corporation, et al, defendants-appellants", which
modified the judgment of the Regional Trial Court of Quezon City,
Branch XCVIII in Civil Case No. Q-40920 and ordered petitioner to pay
private respondent, among others, the sum of P500,000.00 as moral
damages and attorneys fees in the amount of P50,000.00.

The facts are not disputed.

In September, October, and November 1980, petitioner Albenson


Enterprises Corporation (Albenson for short) delivered to Guaranteed
Industries, Inc. (Guaranteed for short) located at 3267 V. Mapa Street,
Sta. Mesa, Manila, the mild steel plates which the latter ordered. As
part payment thereof, Albenson was given Pacific Banking Corporation
Check No. 136361 in the amount of P2,575.00 and drawn against the
account of E.L. Woodworks (Rollo, p. 148).

When presented for payment, the check was dishonored for the reason
"Account Closed." Thereafter, petitioner Albenson, through counsel,
traced the origin of the dishonored check. From the records of the
Securities and exchange Commission (SEC), Albenson discovered that
the president of Guaranteed, the recipient of the unpaid mild steel
plates, was one "Eugenio S. Baltao." Upon further inquiry, Albenson
was informed by the Ministry of Trade and Industry that E.L.
Woodworks, a single proprietorship business, was registered in the
name of one "Eugenio Baltao." In addition, upon verification with the
drawee bank, Pacific Banking Corporation, Albenson was advised that
the signature appearing on the subject check belonged to one
"Eugenio Baltao"

After obtaining the foregoing information, Albenson, through counsel,


made an extrajudicial demand upon private respondent Eugenio S.
Baltao, president of Guaranteed, to replace and/or make good the
dishonored check.

Respondent Baltao, through counsel, denied that he issued the check,


or that the signature appearing thereon is his. He further alleged that
Guaranteed was a defunct entity and hence, could not have transacted
business with Albenson.chanrobles virtual lawlibrary

On February 14, 1983, Albenson filed with the Office of the Provincial
Fiscal of Rizal a complaint against Eugenio S. Baltao for violation of
Batas Pambansa Bilang 22. Submitted to support said charges was an
affidavit of petitioner Benjamin Mendiona, an employee of Albenson. In
said affidavit, the above-mentioned circumstances were stated.

It appears, however, that private respondent has a namesake, his son


Eugenio Baltao III, who manages a business establishment, E. L.
Woodworks, on the ground floor of Baltao Building, 3267 V. Mapa
Street, Sta. Mesa, Manila, the very same business address of
Guaranteed.

On September 5, 1983, Assistant Fiscal Ricardo Sumaway filed an


information against Eugenio S. Baltao for Violation of Batas Pambansa
Bilang 22. In filing said information, Fiscal Sumaway claimed that he
had given Eugenio S. Baltao opportunity to submit controverting
evidence, but the latter failed to do so and therefore, was deemed to
have waived his right.

Respondent Baltao, claiming ignorance of the complaint against him,


immediately filed with the Provincial Fiscal of Rizal a motion for
reinvestigation, alleging that it was not true that he had been given an
opportunity to be heard in the preliminary investigation conducted by
Fiscal Sumaway, and that he never had any dealings with Albenson or
Benjamin Mendiona, consequently, the check for which he has been
accused of having issued without funds was not issued by him and the
signature in said check was not his.
On January 30, 1984, Provincial Fiscal Mauro M. Castro of Rizal
reversed the finding of Fiscal Sumaway and exonerated respondent
Baltao. He also instructed the Trial Fiscal to move for dismissal of the
information filed against Eugenio S. Baltao. Fiscal Castro found that
the signature in PBC Check No. 136361 is not the signature of Eugenio
S. Baltao. He also found that there is no showing in the records of the
preliminary investigation that Eugenio S. Baltao actually received
notice of the said investigation. Fiscal Castro then castigated Fiscal
Sumaway for failing to exercise care and prudence in the performance
of his duties, thereby causing injustice to respondent who was not
properly notified of the complaint against him and of the requirement
to submit his counter evidence.chanrobles virtual lawlibrary

Because of the alleged unjust filing of a criminal case against him for
allegedly issuing a check which bounced in violation of Batas
Pambansa Bilang 22 for a measly amount of P2,575.00, respondent
Baltao filed before the Regional Trial Court of Quezon City a complaint
for damages against herein petitioners Albenson Enterprises, Jesse
Yap, its owner, and Benjamin Mendiona, its employee.

In its decision, the lower court observed that "the check is drawn
against the account of E.L. Woodworks, not of Guaranteed Industries
of which plaintiff used to be President. Guaranteed Industries had been
inactive and had ceased to exist as a corporation since 1975 . . . The
possibility is that it was with Gene Baltao or Eugenio Baltao III, a son
of plaintiff who had a business on the ground floor of Baltao Building
located on V. Mapa Street, that the defendants may have been dealing
with. . . ." (Rollo, pp. 41-42).

The dispositive portion of the trial courts decision


reads:jgc:chanrobles.com.ph

"WHEREFORE, judgment is hereby rendered in favor of plaintiff and


against defendants ordering the latter to pay plaintiff jointly and
severally:chanrob1es virtual 1aw library

1. actual or compensatory damages of P133,350.00;

2. moral damages of P1,000,000.00 (1 million pesos);

3. exemplary damages of P200,000.00;


4. attorneys fees of P100,000.00;

5. costs.

"Defendants counterclaim against plaintiff and claim for damages


against Mercantile Insurance Co. on the bond for the issuance of the
writ of attachment at the instance of plaintiff are hereby dismissed for
lack of merit." (Rollo, pp. 38-39).

On appeal, respondent court modified the trial courts decision as


follows:jgc:chanrobles.com.ph

"WHEREFORE, the decision appealed from is MODIFIED by reducing


the moral damages awarded therein from P1,000,000.00 to
P500,000.00 and the attorneys fees from P100,000.00 to P50,000.00,
said decision being hereby affirmed in all its other aspects. With costs
against appellants." (Rollo, pp. 50-51)chanroblesvirtualawlibrary

Dissatisfied with the above ruling, petitioners Albenson Enterprises


Corp., Jesse Yap, and Benjamin Mendiona filed the instant Petition,
alleging that the appellate court erred in:jgc:chanrobles.com.ph

"1. Concluding that private respondents cause of action is not one


based on malicious prosecution but one for abuse of rights under
Article 21 of the Civil Code notwithstanding the fact that the basis of a
civil action for malicious prosecution is Article 2219 in relation to
Article 21 of Article 2176 of the Civil Code . . .

"2. Concluding that hitting at and in effect maligning (private


respondent) with an unjust criminal case was, without more, a plain
case of abuse of rights by misdirection and was therefore, actionable
by itself, and which became inordinately blatant and grossly
aggravated when . . . (private respondent) was deprived of his basic
right to notice and a fair hearing in the so-called preliminary
investigation . . .

"3. Concluding that petitioners actuations in this case were coldly


deliberate and calculated, no evidence having been adduced to
support such a sweeping statement.
"4. Holding the petitioner corporation, petitioner Yap and petitioner
Mendiona jointly and severally liable without sufficient basis in law and
in fact.

"5. Awarding respondents-

5.1. P133,350.00 as actual or compensatory damages, even in the


absence of sufficient evidence to show that such was actually suffered.

5.2. P500,000.00 as moral damages considering that the evidence in


this connection merely involved private respondents alleged
celebrated status as a businessman, there being no showing that the
act complained of adversely affected private respondents reputation
or that it resulted to material loss.

5.3. P200,000.00 as exemplary damages despite the fact that


petitioners were duly advised by counsel of their legal recourse.

5.4. P50,000.00 as attorneys fees, no evidence having been adduced


to justify such an award" (Rollo, pp. 4-6).

Petitioners contend that the civil case filed in the lower court was one
for malicious prosecution. Citing the case of Madera v. Lopez (102
SCRA 700 [1981]), they assert that the absence of malice on their part
absolves them from any liability for malicious prosecution. Private
respondent, on the other hand, anchored his complaint for Damages
on Article 19, 20 and 21 * of the Civil Code.

Article 19, known to contain what is commonly referred to as the


principle of abuse of rights, sets certain standards which may be
observed not only in the exercise of ones rights but also in the
performance of ones duties. These standards are the following: to act
with justice; to give everyone his due; and to observe honesty and
good faith. The law, therefore, recognizes the primordial limitation on
all rights: that in their exercise, the norms of human conduct set forth
in Article 19 must be observed. A right, though by itself legal because
recognized or granted by law as such, may nevertheless become the
source of some illegality. When a right is exercised in a manner which
does not conform with the norms enshrined in Article 19 and results in
damage to another, a legal wrong is thereby committed for which the
wrongdoer must be held responsible. Although the requirements of
each provision is different, these three (3) articles are all related to
each other. As the eminent Civilist Senator Arturo Tolentino puts it:
"With this article (Article 21), combined with articles 19 and 20, the
scope of our law on civil wrongs has been very greatly broadened; it
has become much more supple and adaptable than the Anglo-
American law on torts. It is now difficult to conceive of any malevolent
exercise of a right which could not be checked by the application of
these articles" (Tolentino, 1 Civil Code of the Philippines
72).chanrobles virtual lawlibrary

There is however, no hard and fast rule which can be applied to


determine whether or not the principle of abuse of rights may be
invoked. The question of whether or not the principle of abuse of rights
has been violated, resulting in damages under Articles 20 and 21 or
other applicable provision of law, depends on the circumstances of
each case. (Globe Mackay Cable and Radio Corporation v. Court of
Appeals, 176 SCRA 778 [1989]).

The elements of an abuse of right under Article 19 are the following:


(1) There is a legal right or duty; (2) which is exercised in bad faith;
(3) for the sole intent of prejudicing or injuring another. Article 20
speaks of the general sanction for all other provisions of law which do
not especially provide for their own sanction (Tolentino, supra, p. 71).
Thus, anyone who, whether willfully or negligently, in the exercise of
his legal right or duty, causes damage to another, shall indemnify his
victim for injuries suffered thereby. Article 21 deals with acts contra
bonus mores, and has the following elements: 1) There is an act which
is legal; 2) but which is contrary to morals, good custom, public order,
or public policy; 3) and it is done with intent to injure.

Thus, under any of these three (3) provisions of law, an act which
causes injury to another may be made the basis for an award of
damages.

There is a common element under Articles 19 and 21, and that is, the
act must be intentional. However, Article 20 does not distinguish: the
act may be done either "willfully", or "negligently." The trial court as
well as the respondent appellate court mistakenly lumped these three
(3) articles together, and cited the same as the bases for the award of
damages in the civil complaint filed against petitioners,
thus:jgc:chanrobles.com.ph
"With the foregoing legal provisions (Articles 19, 20, and 21) in focus,
there is not much difficulty in ascertaining the means by which
appellants first assigned error should be resolved, given the admitted
fact that when there was an attempt to collect the amount of
P2,575.00, the defendants were explicitly warned that plaintiff Eugenio
S. Baltao is not the Eugenio Baltao defendants had been dealing with
(supra, p.5). When the defendants nevertheless insisted and persisted
in filing a case a criminal case no less against plaintiff, said
defendants ran afoul of the legal provisions (Articles 19, 20, and 21 of
the Civil Code) cited by the lower court and heretofore quoted
(supra)."cralaw virtua1aw library

Defendants, not having been paid the amount of P2,575.00, certainly


had the right to complain. But that right is limited by certain
constraints. Beyond that limits is the area of excess, of abuse of
rights." (Rollo, pp. 44-45).chanrobles virtual lawlibrary

Assuming, arguendo, that all the three (3) articles, together and not
independently of each one, could be validly made the bases for an
award of damages based on the principle of "abuse of right", under the
circumstances, We see no cogent reason for such an award of
damages to be made in favor of private Respondent.

Certainly, petitioners could not be said to have violated the aforestated


principle of abuse of right. What prompted petitioners to file the case
for violation of Batas Pambansa Bilang 22 against private respondent
was their failure to collect the amount of P2,575.00 due on a bounced
check which they honestly believed was issued to them by
private Respondent. Petitioners had conducted inquiries regarding the
origin of the check, and yielded the following results: from the records
of the Securities and Exchange Commission, it was discovered that the
President of Guaranteed (the recipient of the unpaid mild steel plates),
was one "Eugenio S. Baltao" ; an inquiry with the Ministry of Trade and
Industry revealed that E.L. Woodworks, against whose account the
check was drawn, was registered in the name of one "Eugenio Baltao"
; verification with the drawee bank, the Pacific Banking Corporation,
revealed that the signature appearing on the check belonged to one
"Eugenio Baltao"

In a letter dated December 16, 1983, counsel for petitioners wrote


private respondent demanding that he make good the amount of the
check. Counsel for private respondent wrote back and denied, among
others, that private respondent ever transacted business with
Albenson Enterprises Corporation; that he ever issued the check in
question. Private respondents counsel even went further: he made a
warning to defendants to check the veracity of their claim. It is pivotal
to note at this juncture that in this same letter, if indeed private
respondent wanted to clear himself from the baseless accusation made
against his person, he should have made mention of the fact that
there are three (3) persons with the same name, i.e.: Eugenio Baltao
Sr., Eugenio S. Baltao, Jr. (private respondent), and Eugenio Baltao III
(private respondent), and Eugenio Baltao III (private respondents
son, who as it turned out later, was the issuer of the check). He,
however, failed to do this. The last two Baltaos were doing business in
the same building Baltao Building - located at 3267 V. Mapa Street,
Sta. Mesa, Manila. The mild steel plates were ordered in the name of
Guaranteed of which respondent Eugenio S. Baltao is the president
and delivered to Guaranteed at Baltao building. Thus, petitioners had
every reason to believe that the Eugenio Baltao who issued the
bouncing check is respondent Eugenio S. Baltao when their counsel
wrote respondent to make good the amount of the check and upon
refusal, filed the complaint for violation for BP Blg. 22.

Private respondent, however, did nothing to clarify the case of


mistaken identity at first hand. Instead, private respondent waited in
ambush and thereafter pounced on the hapless petitioners at a time he
thought was propituous by filing an action for damages. The Court will
not countenance this devious scheme.chanrobles virtual lawlibrary

The criminal complaint filed against private respondent after the latter
refused to make good the amount of the bouncing check despite
demand was a sincere attempt on the part of petitioners to find the
best possible means by which they could collect the sum of money due
them. A person who has not been paid an obligation owed to him will
naturally seek ways to compel the debtor to pay him. It was normal
for petitioners to find means to make the issuer of the check pay the
amount thereof. In the absence of a wrongful act or omission or of
fraud or bad faith, moral damages cannot be awarded and that the
adverse result of an action does not per se make the action wrongful
and subject the actor to the payment of damages, for the law could
not have meant to impose a penalty on the right to litigate (Rubio v.
Court of Appeals, 141 SCRA 488 [1986]).

In the case at bar, private respondent does not deny that the mild
steel plates were ordered by and delivered to Guaranteed at Baltao
building and as part payment thereof, the bouncing check was issued
by one Eugenio Baltao. Neither had private respondent conveyed to
petitioner that there are two Eugenio Baltaos conducting business in
the same building - he and his son Eugenio Baltao III. Considering that
Guaranteed, which received the goods in payment of which the
bouncing check was issued is owned by respondent, petitioner acted in
good faith and probable cause in filing the complaint before the
provincial fiscal:chanrob1es virtual 1aw library

To constitute malicious prosecution, there must be proof that the


prosecution was prompted by a sinister design to vex and humiliate a
person, and that it was initiated deliberately by the defendant knowing
that his charges were false and groundless. Concededly, the mere act
of submitting a case to the authorities for prosecution does not make
one liable for malicious prosecution. (Manila Gas Corporation v. Court
of Appeals, 100 SCRA 602 [1980]). Still, private respondent argues
that liability under Articles 19, 20, and 21 of the Civil Code is so
encompassing that it likewise includes liability for damages for
malicious prosecution under Article 2219 (8). True, a civil action for
damages for malicious prosecution is allowed under the New Civil
Code, more specifically Articles 19, 20, 26, 29, 32, 33, 35, and 2219
(8) thereof. In order that such a case can prosper, however, the
following three (3) elements must be present, to wit: (1) The fact of
the prosecution and the further fact that the defendant was himself
the prosecutor, and that the action was finally terminated with an
acquittal; (2) That in bringing the action, the prosecutor acted without
probable cause; (3) The prosecutor was actuated or impelled by legal
malice (Lao v. Court of Appeals, 199 SCRA 58, [1991]).

Thus, a party injured by the filing of a court case against him, even if
he is later on absolved, may file a case for damages grounded either
on the principle of abuse of rights, or on malicious prosecution. As
earlier stated, a complaint for damages based on malicious prosecution
will prosper only if the three (3) elements aforecited are shown to
exist. In the case at bar, the second and third elements were not
shown to exist. It is well-settled that one cannot be held liable for
maliciously instituting a prosecution where one has acted with
probable cause. "Probable cause is the existence of such facts and
circumstances as would excite the belief, in a reasonable mind, acting
on the facts within the knowledge of the prosecutor, that the person
charged was guilty of the crime for which he was prosecuted. In other
words, a suit will lie only in cases where a legal prosecution has been
carried on without probable cause. The reason for this rule is that it
would be a very great discouragement to public justice, if prosecutors,
who had tolerable ground of suspicion, were liable to be sued at law
when their indictment miscarried" (Que v. Intermediate Appellate
Court, 169 SCRA 137 [1989]).chanrobles virtualawlibrary
chanrobles.com:chanrobles.com.ph

The presence of probable cause signifies, as a legal consequence, the


absence of malice. In the instant case, it is evident that petitioners
were not motivated by malicious intent or by sinister design to unduly
harass private respondent, but only by a well-founded anxiety to
protect their rights when they filed the criminal complaint against
private Respondent.

"To constitute malicious prosecution, there must be proof that the


prosecution was prompted by a sinister design to vex and humiliate a
person, that it was initiated deliberately by the defendant knowing that
his charges were false and groundless. Concededly, the mere act of
submitting a case to the authorities for prosecution does not make one
liable for malicious prosecution. Proof and motive that the institution of
the action was prompted by a sinister design to vex and humiliate a
person must be clearly and preponderantly established to entitle the
victims to damages" (Ibid.).

In the case at bar, there is no proof of a sinister design on the part of


petitioners to vex or humiliate private respondent by instituting the
criminal case against him. While petitioners may have been negligent
to some extent in determining the liability of private respondent for
the dishonored check, the same is not so gross or reckless as to
amount to bad faith warranting an award of damages.

The root of the controversy in this case is founded on a case of


mistaken identity. It is possible that with a more assiduous
investigation, petitioners would have eventually discovered that
private respondent Eugenio S. Baltao is not the "Eugenio Baltao"
responsible for the dishonored check. However, the record shows that
petitioners did exert considerable effort in order to determine the
liability of private Respondent. Their investigation pointed to private
respondent as the "Eugenio Baltao" who issued and signed the
dishonored check as the president of the debtor-corporation
Guaranteed Enterprises. Their error in proceeding against the wrong
individual was obviously in the nature of an innocent mistake, and
cannot be characterized as having been committed in bad faith. This
error could have been discovered if respondent had submitted his
counter-affidavit before investigating fiscal Sumaway and was
immediately rectified by Provincial Fiscal Mauro Castro upon discovery
thereof, i.e., during the reinvestigation resulting in the dismissal of the
complaint.chanrobles law library : red

Furthermore, the adverse result of an action does not per se make the
act wrongful and subject the actor to the payment of moral damages.
The law could not have meant to impose a penalty on the right to
litigate, such right is so precious that moral damages may not be
charged on those who may even exercise it erroneously. And an
adverse decision does not ipso facto justify the award of attorneys
fees to the winning party (Garcia v. Gonzales, 183 SCRA 72 [1990]).

Thus, an award of damages and attorneys fees is unwarranted where


the action was filed in good faith. If damage results from a persons
exercising his legal rights, it is damnum absque injuria (Ilocos Norte
Electric Company v. Court of Appeals, 179 SCRA 5 [1989]).

Coming now to the claim of private respondent for actual or


compensatory damages, the records show that the same was based
solely on his allegations without proof to substantiate the same. He did
not present proof of the cost of the medical treatment which he
claimed to have undergone as a result of the nervous breakdown he
suffered, nor did he present proof of the actual loss to his business
caused by the unjust litigation against him. In determining actual
damages, the court cannot rely on speculation, conjectures or
guesswork as to the amount. Without the actual proof of loss, the
award of actual damages becomes erroneous (Guilatco v. City of
Dagupan, 171 SCRA 382 [1989]).

Actual and compensatory damages are those recoverable because of


pecuniary loss in business, trade, property, profession, job or
occupation and the same must be proved, otherwise, if the proof is
flimsy and unsubstantiated, no damages will be given (Rubio v. Court
of Appeals, 141 SCRA 488 [1986]). For these reasons, it was gravely
erroneous for respondent court to have affirmed the award of actual
damages in favor of private respondent in the absence of proof
thereof.

Where there is no evidence of the other party having acted in wanton,


fraudulent or reckless, or oppressive manner, neither may exemplary
damages be awarded (Dee Hua Liong Electrical Equipment Corporation
v. Reyes, 145 SCRA 488 [1986]).

As to the award of attorneys fees, it is well-settled that the same is


the exception rather than the general rule. Needless to say, the award
of attorneys fees must be disallowed where the award of exemplary
damages is eliminated (Article 2208, Civil Code; Agustin v. Court of
Appeals, 186 SCRA 375 [1990]). Moreover, in view of the fact that
there was no malicious prosecution against private respondent,
attorneys fees cannot be awarded him on that ground.chanrobles
virtual lawlibrary

In the final analysis, there is no proof or showing that petitioners acted


maliciously or in bad faith in the filing of the case against
private Respondent. Consequently, in the absence of proof of fraud
and bad faith committed by petitioners, they cannot be held liable for
damages (Escritor, Jr. v. Intermediate Appellate Court, 155 SCRA 577
[1987]). No damages can be awarded in the instant case, whether
based on the principle of abuse of rights, or for malicious prosecution.
The questioned judgment in the instant case attests to the propensity
of trial judges to award damages without basis. Lower courts are
hereby cautioned anew against awarding unconscionable sums as
damages without bases therefor.

WHEREFORE, the petition is GRANTED and the decision of the Court of


Appeals in C.A. G.R. C.V. No. 14948 dated May 13, 1989, is hereby
REVERSED and SET ASIDE. Costs against respondent Baltao.

SO ORDERED.

Gutierrez, Jr., Davide, Jr., Romero and Melo, JJ., concur.

Endnotes:
[G.R. No. 1299. November 16, 1903. ]

VICENTE PEREZ, Plaintiff-Appellee, v. EUGENIO POMAR, Agent


of the Compania-General de Tabacos, Defendant-Appellant.

Francisco Dominguez for Appellant.

Ledesma, Sumulong & Quintos for Appellee.

SYLLABUS

1. CONTRACTS; CONSENT. Contracts resulting from an implied


consent of the parties are valid and enforceable.

2. ID.; ID.; HIRING. Where one has rendered services to another,


and these services are accepted by the latter, in the absence of proof
that the service was rendered gratuitously, an obligation results to pay
the reasonable worth of the services rendered upon the implied
contract of hiring.

3. ID.; ID.; ID. Although no fixed amount may have been


determined as the consideration for the contract of hiring, the contract
is nevertheless valid if the amount of the implied compensation can be
determined by custom or frequent use in the place where the services
were rendered.

DECISION

TORRES, J. :
In a decision dated February 9, 1903, the judge of the Sixth Judicial
District, deciding a case brought by the plaintiff against the defendant
for the recovery of wages due and unpaid, gave judgment against the
latter for the sum of $600 and the costs of suit, less the sum of $50,
Mexican.

On August 27, 1902, Don Vicente Perez filed in the Court of First
Instance of Laguna a complaint, which was amended on the 17th of
January of this year, asking that the court determine the amount due
the plaintiff, at the customary rate of compensation for interpreting in
these Islands, for services rendered the Tabacalera Company, and
that, in view of the circumstances of the case, judgment be rendered
in his favor for such sum. The complaint also asked that the defendant
be condemned to the payment of damages in the sum of $3,200, gold,
together with the costs of suit. In this complaint it was alleged that
Don Eugenio Pomar, as general agent of the Compania General de
Tabacos in the said province, verbally requested the plaintiff on the
8th of December, 1901, to act as interpreter between himself and the
military authorities, that after the date mentioned the plaintiff
continued to render such services up to and including May 31, 1902;
that he had accompanied the defendant, Pomar during that time at
conferences between the latter and the colonel commanding the local
garrison, and with various officers and doctors residing in the capital,
and at conferences with Captain Lemen in the town of Pilar, and with
the major in command at the town of Pagsanjan, concerning the
shipment of goods from Manila, and with respect to goods shipped
from the towns of Santa Cruz, Pilar, and Pagsanjan to this city; that
the plaintiff during this period of time was at the disposal of the
defendant, Pomar, and held himself in readiness to render services
whenever required; that on this account his private business, and
especially a soap factory established in the capital, was entirely
abandoned; that to the end that such services might be punctually
rendered, the agent, Pomar, assured him that the Tabacalera
Company always generously repaid services rendered it, and that he
therefore did not trouble himself about his inability to devote the
necessary amount of time to his business, the defendant going so far
as to make him flattering promises of employment with the company,
which he did not accept; that these statements were made in the
absence of witnesses and that therefore his only proof as to the same
was Mr. Pomars word as a gentleman; that the employees of the
company did not understand English, and by reason of the plaintiffs
mediation between the agent and the military authorities large profits
were obtained, as would appear from the account and letterpress
books of the agency corresponding to those dates. In the amended
complaint it was added that the defendant, on behalf of the company,
offered to remunerate the plaintiff for the services rendered in the
most advantageous manner in which such services are compensated,
in view of the circumstances under which they were requested; and
that the plaintiff, by rendering the company such services, was obliged
to abandon his own business, the manufacture of soap, and thereby
suffered damages in the sum of $3,200, United States currency.

The defendant, on the 25th of September, 1902, filed an answer


asking for the dismissal of the complaint, with costs to the plaintiff. In
his answer the defendant denied the allegation in the first paragraph
of the complaint, stating that it was wholly untrue that the company,
and the defendant as its agent, had solicited the services of the
plaintiff as interpreter before the military authorities for the period
stated, or for any other period, or that the plaintiff had accompanied
Pomar at the conferences mentioned, concerning shipments from
Manila and exports from some of the towns of the province to this
capital. He stated that he especially denied paragraph 2 of the
complaint, as it was absolutely untrue that the plaintiff had been at the
disposal of the defendant for the purpose of rendering such services;
that he therefore had not been obliged to abandon his occupation or
his soap factory, and that the statement that an offer of employment
with the company had been made to him was false. The defendant
also denied that through the mediation of the plaintiff the company
and himself had obtained large profits. The statements in paragraphs
6, 7, 8, and 9 of the complaint were also denied. The defendant stated
that, on account of the friendly relations which sprang up between the
plaintiff and himself, the former borrowed from him from time to time
money amounting to $175 for the purposes of his business, and that
he had also delivered to the plaintiff 36 arrobas of oil worth $106, and
three packages of resin for use in coloring his soap; that the plaintiff
accompanied the defendant to Pagsanjan, Pilar, and other towns when
the latter made business trips to them for the purpose of extending his
business and mercantile relations therein; that on these excursions, as
well as on private and official visits which he had to make, the plaintiff
occasionally accompanied him through motives of friendship, and
especially because of the free transportation given him, and not on
behalf of the company of which he was never interpreter and for which
he rendered no services; that the plaintiff in these conferences acted
as interpreter of his own free will, without being requested to do so by
the defendant and without any offer of payment or compensation; that
therefore there existed no legal relation whatever between the
company and the plaintiff, and that the defendant, when accepting the
spontaneous voluntary, and officious services of the plaintiff, did so in
his private capacity and not as agent of the company, and that it was
for this reason that he refused to enter into negotiations with the
plaintiff, he being in no way indebted to the latter. The defendant
concluded by saying that he answered in his individual capacity.

A complaint having been filed against the Compania General de


Tabacos and Don Eugenio Polmar, its agent in the Province of Laguna,
the latter, having been duly summoned, replied to the complaint,
which was subsequently amended, and stated that he made such reply
in his individual capacity and not as agent of the company, with which
the plaintiff had no legal relations. The suit was instituted between the
plaintiff and Pomar, who, as such, accepted the issue and entered into
the controversy without objection, opposed the claim of the plaintiff,
and concluded by asking that the complaint be dismissed, with the
costs to the plaintiff. Under these circumstances and construing the
statutes liberally, we think it proper to decide the case pending
between both parties in accordance with law and the strict principles of
justice.

From the oral testimony introduced at the trial, it appears that the
plaintiff, Perez, did on various occasions render Don Eugenio Pomar
services as interpreter of English; and that he obtained passes and
accompanied the defendant upon his journeys to some of the towns in
the Province of Laguna. It does not appear from the evidence,
however, that the plaintiff was constantly at the disposal of the
defendant during the period of six months or that he rendered services
as such interpreter continuously and daily during that period of time.

It does not appear that any written contract was entered into between
the parties for the employment of the plaintiff as interpreter, or that
any other innominate contract was entered into; but whether the
plaintiffs services were solicited or whether they were offered to the
defendant for his assistance, inasmuch as these services were
accepted and made use of by the latter, we must consider that there
was a tacit and mutual consent as to the rendition of the services. This
gives rise to the obligation upon the person benefited by the services
to make compensation therefor, since the bilateral obligation to render
service as interpreter, on the one hand, and on the other to pay for
the services rendered, is thereby incurred. (Arts. 1088, 1089, and
1262 of the Civil Code). The supreme court of Spain in its decision of
February 12, 1889, holds, among other things, "that not only is there
an express and tacit consent which produces real contracts but there is
also a presumptive consent which is the basis of quasi contracts, this
giving rise to the multiple juridical relations which result in obligations
for the delivery of a thing or the rendition of a service."cralaw
virtua1aw library

Notwithstanding the denial of the defendant, it is unquestionable that


it was with his consent that the plaintiff rendered him-services as
interpreter, thus aiding him at a time when, owing to the existence of
an insurrection in the province, the most disturbed conditions
prevailed. It follows, hence, that there was consent on the part of both
in the rendition of such services as interpreter. Such service not being
contrary to law or to good custom, it was a perfectly licit object of
contract, and such a contract must necessarily have existed between
the parties, as alleged by the plaintiff. (Art. 1271, Civil Code.)

The consideration for the contract is also evident, it being clear that a
mutual benefit was derived in consequence of the service rendered. It
is to be supposed that the defendant accepted these services and that
the plaintiff in turn rendered them with the expectation that the
benefit would be reciprocal. This shows the concurrence of the three
elements necessary under article 1261 of the Civil Code to constitute a
contract of lease of service, or other innominate contract, from which
an obligation has arisen and whose fulfillment is now demanded.

Article 1254 of the Civil Code provides that a contract exists the
moment that one or more persons consent to be bound. With respect
to another or others, to deliver some thing or to render some service.
Article 1255 provides that the contracting parties may establish such
covenants, terms, and conditions as they deem convenient, provided
they are not contrary to law, morals, or public policy. Whether the
service was solicited or offered, the fact remains that Perez rendered
to Pomar services as interpreter. As it does not appear that he did this
gratuitously, the duty is imposed upon the defendant, he having
accepted the benefit of the service, to pay a just compensation
therefor, by virtue of the innominate contract of facio ut des implicitly
established.

The obligations arising from this contract are reciprocal, and, apart
from the general provisions with respect to contracts and obligations,
the special provisions concerning contracts for lease of services are
applicable by analogy.

In this special contract, as determined by article 1544 of the Civil


Code, one of the parties undertakes to render the other a service for a
price certain. The tacit agreement and consent of both parties with
respect to the service rendered by the plaintiff, and the reciprocal
benefits accruing to each, are the best evidence of the fact that there
was an implied contract sufficient to create a legal bond, from which
arose enforceable rights and obligations of a bilateral character.

In contracts the will of the contracting parties is law, this being a legal
doctrine based upon the provisions of articles 1254, 1258, 1262, 1278,
1281, 1282, and 1289 of the Civil Code. If it is a fact sufficiently
proven that the defendant, Pomar, on various occasions consented to
accept an interpreters services, rendered in his behalf and not
gratuitously, it is but just that he should pay a reasonable
remuneration therefor, because it is a well-known principle of law that
no one should be permitted to enrich himself to the damage of
another.

With respect to the value of the services rendered on different


occasions, the most important of which was the first, as it does not
appear that any salary was fixed upon by the parties at the time the
services were accepted, it devolves upon the court to determine, upon
the evidence presented, the value of such services, taking into
consideration the few occasions on which they were rendered. The fact
that no fixed or determined consideration for the rendition of the
services was agreed upon does not necessarily involve a violation of
the provisions of article 1544 of the Civil Code, because at the time of
the agreement this consideration was capable of being made certain.
The discretionary power of the court, conferred upon it by the law, is
also supported by the decisions of the supreme court of Spain, among
which may be cited that of October 18, 1899, which holds as follows:
"That as stated in the article of the Code cited, which follows the
provisions of law 1 title 8, of the fifth partida, the contract for lease of
services is one in which one of the parties undertakes to make some
thing or to render some service to the other for a certain price, the
existence of such a price being understood, as this court has held not
only when the price has been expressly agreed upon but also when it
may be determined by the custom and frequent use of the place in
which such services were rendered."cralaw virtua1aw library

No exception was taken to the judgment below by the plaintiff on


account of the rejection of his claim for damages. The decision upon
this point is, furthermore, correct.

Upon the supposition that the recovery of the plaintiff should not
exceed 200 Mexican pesos, owing to the inconsiderable number of
times he acted as interpreter, it is evident that the contract thus
implicitly entered into was not required to be in writing and that
therefore it does not fall within article 1280 of the Civil Code; nor is it
included within the provisions of section 335 of the Code of Civil
Procedure, as this innominate contract is not covered by that section.
The contract of lease of services is not included in any of the cases
expressly designated by that section of the procedural law, as affirmed
by the Appellant. The interpretation of the other articles of the Code
alleged to have been infringed has also been stated fully in this
opinion.

For the reasons stated, we are of the opinion that judgment should be
rendered against Don Eugenio Pomar for the payment to the plaintiff
of the sum of 200 Mexican pesos, from which will be deducted the sum
of 50 pesos due the defendant by the plaintiff. No special declaration is
made as to the costs of this instance. The judgment below is
accordingly affirmed in so far as it agrees with this opinion, and
reversed in so far as it may be in conflict therewith. Judgment will be
entered accordingly twenty days after this decision is filed.

Arellano, C.J., Willard and Mapa, JJ., concur.

Separate Opinions

McDONOUGH, J., with whom concurs COOPER, J.,


dissenting:chanrob1es virtual 1aw library
I dissent from the opinion of the majority. In my opinion there is no
legal evidence in the case from which the court may conclude that the
recovery should be 200 Mexican pesos. I am therefore in favor of
affirming the judgment.

Johnson, J., did not sit in this case.

tHIRD dIVISION

G.R. No. L-54598 April 15, 1988

JOSE B. LEDESMA, Petitioner, vs. HON. COURT OF APPEALS,


Spouses PACIFICO DELMO and SANCHA DELMO (as private
respondents), Respondents.

The Solicitor General for petitioner.chanrobles virtual law library

Luzel D. Demasu-ay for respondent.

GUTIERREZ, JR., J.:

This petition seeks to reverse the decision of the respondent Court of


Appeals which afirmed the decision of the Court of First Instance of
Iloilo, adjudging the petitioner, who was then the President of the
West Visayas College liable for damages under Article 27 of the Civil
Code of the Philippines for failure to graduate a student with
honors.chanroblesvirtualawlibrary chanrobles virtual law library

The facts are not disputed.chanroblesvirtualawlibrary chanrobles


virtual law library

An organization named Student Leadership Club was formed by some


students of the West Visayas College. They elected the late Violets
Delmo as the treasurer. In that capacity, Delmo extended loans from
the funds of the club to some of the students of the school. "the
petitioner claims that the said act of extending loans was against
school rules and regulations. Thus, the petitioner, as President of the
School, sent a letter to Delmo informing her that she was being
dropped from the membership of the club and that she would not be a
candidate for any award or citation from the
school.chanroblesvirtualawlibrary chanrobles virtual law library

Delmo asked for a reconsideration of the decision but the petitioner


denied it. Delmo, thus, appealed to the Office of the Director of the
Bureau of Public Schools.chanroblesvirtualawlibrary chanrobles virtual
law library

The Director after due investigation, rendered a decison on April 13,


1966 which provided:

Records of the preliminary investigation conducted by one of the legal


officers of this Office disclosed the following: That Violeta Delmo was
the treasurer of the Student Leadership Club, an exclusive student
organization; that pursuant to Article IX of the of the Constitution and
By-Laws of the club, it passed Resolution No. 2, authorizing the
treasurer to disburse funds of the Club to student for financial aid and
other humanitarian purposes; that in compliance with said resolution
and as treasurer of the Club, Violeta Delmo extended loans to some
officers and members of the Club upon proper application duly
approved by the majority of the members of the Executive Board; and
that upon receiving the report from Mr. Jesse Dagoon, adviser of the
funds of the Club, that Office conducted an investigation on the matter
and having been convinced of the guilt of Violets Delmo and the other
officers and members of the Club, that Office rendered the order or
decision in question. In justifying that Office's order or decision, it is
contended that approval by that Office of the Constitution and By-Laws
of the Club is necessary for its effectivity and validity and since it was
never submitted to that Office, the Club had no valid constitution and
By-Laws and that as a consequence, Resolution No. 2 which was
passed based on the Constitution and By-Laws- is without any force
and effect and the treasurer, Violeta Delmo, who extended loans to
some officers and members of the Club pursuant thereto are illegal
(sic), hence, she and the other students involved are deemed guilty of
misappropriating the funds of the Club. On the other hand, Raclito
Castaneda, Nestor Golez and Violeta Delmo, President, Secretary and
Treasurer of the Club, respectively, testified that the Club had adopted
its Constitution and By-Laws in a meeting held last October 3, 1965,
and that pursuant to Article I of said Constitution and By-Laws, the
majority of the members of the Executive Board passed Resolution No.
2, which resolution became the basis for the extension on of loans to
some officers and members of the Club, that the Club honestly
believed that its Constitution and By-Laws has been approved by the
superintendent because the adviser of the Club, Mr. Jesse Dagoon,
assured the President of the Club that he will cause the approval of the
Constitution and By-Laws by the Superintendent; the officers of the
Club have been inducted to office on October 9,1965 by the
Superintendent and that the Club had been likewise allowed to
cosponsor the Education Week
Celebration.chanroblesvirtualawlibrary chanrobles virtual law library

After a careful study of the records, this Office sustains the action
taken by the Superintendent in penalizing the adviser of the Club as
well as the officers and members thereof by dropping them from
membership therein. However, this Office is convinced that Violets M.
Delmo had acted in good faith, in her capacity as Club Treasurer, in
extending loans to the officers and members of the Student
partnership Club. Resolution No. 2 authorizing the Club treasurer to
discharge finds to students in need of financial assistance and other
humanitarian purposes had been approved by the Club adviser, Mr.
Jesse Dagoon, with the notation that approval was given in his
capacity as adviser of the Club and extension of the Superintendent's
personality. Aside from misleading the officers and members of the
Club, Mr. Dagoon, had unsatisfactorily explained why he failed to give
the Constitution and By-Laws of the Club to the Superintendent for
approval despite his assurance to the Club president that he would do
so. With this finding of negligence on the part of the Club adviser, not
to mention laxity in the performance of his duties as such, this Office
considers as too severe and unwarranted that portion of the
questioned order stating that Violeta Delmo "shall not be a candidate
for any award or citation from this school or any organization in this
school." Violeta Delmo, it is noted, has been a consistent full scholar of
the school and she alone has maintained her scholarship. The decision
in question would, therefore, set at naught all her sacrifice and
frustrate her dreams of graduating with honors in this year's
commencement exercises.chanroblesvirtualawlibrary chanrobles virtual
law library

In view of all the foregoing, this Office believes and so holds and
hereby directs that appellant Violeta. M. Delmo, and for that matter all
other Club members or officers involved in this case, be not deprived
of any award, citation or honor from the school, if they are otherwise
entitled thereto. (Rollo, pp. 28-30)

On April 27, 1966, the petitioner received by mail the decision of the
Director and all the records of the case. On the same day, petitioner
received a telegram stating the following:

"AIRMAIL RECORDS DELMO CASE MISSENT THAT OFFICE"

The Director asked for the return only of the records but the petitioner
allegedly mistook the telegram as ordering him to also send the
decision back. On the same day, he returned by mail all the records
plus the decision of the Director to the Bureau of Public
Schools.chanroblesvirtualawlibrary chanrobles virtual law library

The next day, the petitioner received another telegram from the
Director order him to furnish Delmo with a copy of the decision. The
petitioner, in turn, sent a night letter to the Director informing the
latter that he had sent the decision back and that he had not retained
a copy thereof..chanroblesvirtualawlibrary chanrobles virtual law
library

On May 3, 1966, the day of the graduation, the petitioner received


another telegram from the Director ordering him not to deprive Delmo
of any honors due her. As it was impossible by this time to include
Delmo's name in the program as one of the honor students, the
petitioner let her graduate as a plain student instead of being awarded
the Latin honor of Magna Cum
Laude.chanroblesvirtualawlibrarychanrobles virtual law library

To delay the matter further, the petitioner on May 5, 1966, wrote the
Director for a reconsideration of the latters" decision because he
believed that Delmo should not be allowed to graduate with honors.
The Director denied the petitioner's
request.chanroblesvirtualawlibrary chanrobles virtual law library

On July 12, 1966, the petitioner finally instructed the Registrar of the
school to enter into the scholastic records of Delmo the honor, "Magna
Cum Laude." chanrobles virtual law library
On July 30, 1966, Delmo, then a minor, was joined by her parents in
flag action for damages against the petitioner. During the pendency of
the action, however, Delmo passed away, and thus, an Amended and
Supplemental Complaint was filed by her parents as her sole and only
heirs.chanroblesvirtualawlibrary chanrobles virtual law library

The trial court after hearing rendered judgment against the petitioner
and in favor of the spouses Delmo. The court said:

Let us go to specific badges of the defendants (now petitioners) bad


faith. Per investigation of Violeta Delmo's appeal to Director Vitaliano
Bernardino of the Bureau of Public Schools (Exhibit L it was the
defendant who inducted the officers of the Student Leadership Club on
October 9, 1965. In fact the Club was allowed to cosponsor the
Education Week Celebration. (Exh. "L"). If the defendant he not
approve of the constitution and by-laws of the Club, why did he induct
the officers into office and allow the Club to sponsor the Education
Week Celebration"? It was through his own act that the students were
misled to do as they did. Coupled with the defendants tacit recognition
of the Club was the assurance of Mr. Jemm Dagoon, Club Adviser, who
made the students believe that he was acting as an extension of Mr.
Ledesma's personality. (Exhibit
"L").chanroblesvirtualawlibrarychanrobles virtual law library

Another badge of the defendan'ts want of good faith is the fact that,
although, he kaew as early as April 27,1966 that per on of r
Bernardino, Exhibit "L," he was directed to give honors to Miss Delmo,
he kept Id information to . He told the Court that he knew that the
letter of Director Bernardino directed him not to deprive Miss Delmo
the honors due her, but she (sic) says that he has not finished reading
the letter-decision, Exhibit "L," of Director Bernardino 0, him to give
honors to Miss Delmo. (Tsn, Feb. 5, 1974, testimony of Mr. Ledesma,
pp. .33-35). It could not be true that he has not finished reading the
letter-decision, Exh. "L," because said letter consisted of only three
pages, and the portion which directed that Miss Delmo "be not
deprived of any award, citation or honor from the school, if otherwise
entitled thereto is found at the last paragraph of the same. How did he
know the last paragraph if he did not read the
letter.chanroblesvirtualawlibrary chanrobles virtual law library
Defendants actuations regarding Miss Delmo's cam had been one of
bias and prejudice. When his action would favor him, he was deliberate
and aspect to the utter prejudice and detriment of Miss Delmo. Thus,
although, as early as April 27, 1966, he knew of the exoneration of
Miss Delino by Director Bernardino, he withheld the information from
Miss Delmo. This is eloquently dramatized by Exh. "11" and Exh. "13"
On April 29,1966, Director Bernardino cabled him to furnish Violeta
Delmo copy of the Decision, Exh. "L," but instead of informing Miss
Delmo about the decision, since he said he mailed back the decision on
April 28,1966, he sent a night letter on April 29,1966, to Director
Bernardino, informing the latter that he had returned the decision
(Exh. "l3"), together with the record. Why a night letter when the
matter was of utmost urgency to the parties in the case, because
graduation day was only four days ahead? An examination of the
telegrams sent by the defendant shows that he had been sending
ordinary telegram and not night letters. (Exh. "5", Exhibit "7"). At
least, if the defendant could not furnish a copy of the decision, (Exh.
"L"), to Miss Delmo, he should have told her about it or that Miss
Delmo's honors and citation in the commencement be announced or
indicated. But Mr. Ledesma is one who cannot admit a mistake. Very
ungentlemanly this is home out by his own testimony despite his
knowledge that his decision to deprive Miss Delmo of honors due to
her was overturned by Director Bernardino, he on his wrong belief. To
quote the defendant,1 believed that she did not deserve those
honors(Tsn Feb. 5, 1974, p. 43,Empasized supplied). Despite the
telegram of Director Bernardino which the defendant received hours
before the commencement executory on May 3-4,1966, he did not
obey Director Bernardino because he said in his testimony that he
would be embarrassment . Tan Feb 5,1974, P. 46). Evidently, he knew
only his embarrassment and not that of r Bernardino whose order was
being flagrantly and wantonly disregarded by bim And certainly, not
the least of Miss Delmo's embarrassment. His acts speak eloquently of
ho bad faith and unjust of mindwarped by his delicate sensitivity for
having been challenged by Miss Delmo, a mere
student.chanroblesvirtualawlibrarychanrobles virtual law library

xxx xxx xxxchanrobles virtual law library

Finally the defendant's behaviour relative to Miss s case smacks of


contemptuous arrogance, oppression and abuse of power. Come to
think of it. He refused to obey the directive of Be o and instead, chose
to feign ignorance of it." (Reward on Appeal, p. 72-76).

The trial court awarded P20,000.00 to the estate of Violeta Delmo and
P10,000.00 to her parents for moral damages; P5,000.00 for nominal
damages to Violeta's estate; exemplary damages of P10,000.00 and
P2,000.00 attorney's fees.chanroblesvirtualawlibrarychanrobles virtual
law library

On appeal, the Court of Appeals affirmed the decision. Hence, this


petition.chanroblesvirtualawlibrary chanrobles virtual law library

The issues raised in this petition can be reduced to the sole question of
whether or not the respondent Court of Appeals erred in affirming the
trial court's finding that petitioner is liable for damages under Article
27 of the New Civil Code.chanroblesvirtualawlibrary chanrobles virtual
law library

We find no reason why the findings of the trial and appellate courts
should be reversed. It cannot be disputed that Violeta Delmo went
through a painful ordeal which was brought about by the petitioner's
neglect of duty and callousness. Thus, moral damages are but proper.
As we have affirmed in the case of (Prudenciado v. Alliance Transport
System, Inc., 148 SCRA 440, 448):

There is no argument that moral damages include physical suffering,


mental anguish, fright, serious anxiety, besmirched reputation,
wounded feelings, moral shock, social humiliation, and similar injury.
Though incapable of pecuniary computation, moral damages may be
recovered if they are the proximate result of defendant's wrongly act
or omission." (People v. Baylon, 129 SCRA 62 (1984).

The Solicitor-General tries to cover-up the petitioner's deliberate


omission to inform Miss Delmo by stating that it was not the duty of
the petitioner to furnish her a copy of the Director's decision. Granting
this to be true, it was nevertheless the petitioner's duty to enforce the
said decision. He could have done so considering that he received the
decision on April 27, 1966 and even though he sent it back with the
records of the case, he undoubtedly read the whole of it which
consisted of only three pages. Moreover, the petitioner should have
had the decency to meet with Mr. Delmo, the girl's father, and inform
the latter, at the very least of the decision. This, the petitioner likewise
failed to do, and not without the attendant bad faith which the
appellate court correctly pointed out in its decision, to wit:

Third, assuming that defendant could not furnish Miss Delmo of a copy
of the decision, he could have used his discretion and plain common
sense by informing her about it or he could have directed the inclusion
of Miss Delmo's honor in the printed commencement program or
announced it during the commencement
exercises.chanroblesvirtualawlibrary chanrobles virtual law library

Fourth, defendant despite receipt of the telegram of Director


Benardino hours before the commencement exercises on May 3-4,
1966, disobeyed his superior by refusing to give the honors due Miss
Delmo with a lame excuse that he would be embarrassed if he did so,
to the prejudice of and in complete disregard of Miss Delmo's
rights.chanroblesvirtualawlibrary chanrobles virtual law library

Fifth, defendant did not even extend the courtesy of meeting Mr.
Pacifico Delmo, father of Miss Delmo, who tried several times to see
defendant in his office thus Mr. Delmo suffered extreme
disappointment and humiliation.chanroblesvirtualawlibrarychanrobles
virtual law library

xxx xxx xxxchanrobles virtual law library

Defendant, being a public officer should have acted with


circumspection and due regard to the rights of Miss Delmo. Inasmuch
as he exceeded the scope of his authority by defiantly disobeying the
lawful directive of his superior, Director Bernardino, defendant is liable
for damages in his personal capacity. . . . (Rollo, pp- 57-58)

Based on the undisputed facts, exemplary damages are also in order.


In the same case of Prudenciado v. Alliance Transport System,
Inc., supra., at p. 450, we ruled:

The rationale behind exemplary or corrective damages is, as the name


implies, to provide an example or correction for the public good
(Lopez, et al. v. Pan American World Airways, 16 SCRA
431).chanroblesvirtualawlibrarychanrobles virtual law library
However, we do not deem it appropriate to award the spouses Delmo
damages in the amount of P10,000.00 in their individual capacity,
separately from and in addition to what they are already entitled to as
sole heirs of the deceased Violeta Delmo. Thus, the decision is
modified insofar as moral damages are awarded to the spouses in their
own behalf.

WHEREFORE, the petition is DISMISSED for lack of merit. The decision


of the Court of Appeals is AFFIRMED with the slight modification as
stated in the preceding paragraph. This decision is immediately
executory.chanroblesvirtualawlibrarychanrobles virtual law library

SO ORDERED.

Fernan (Chairman), Feliciano, Bidin and Cortes, JJ., concur.