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6/11/2019 [ G.R. No.

L-63915, April 24, 1985 ]

220 Phil. 422

EN BANC

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

LORENZO M. TAÑADA, ABRAHAM F. SARMIENTO, AND MOVEMENT OF


ATTORNEYS FOR BROTHERHOOD, INTEGRITY AND NATIONALISM, INC.

[MABINI], PETITIONERS, VS. HON. JUAN C. TUVERA, IN HIS CAPACITY


AS EXECUTIVE ASSISTANT TO THE PRESIDENT, HON. JOAQUIN VENUS,
IN HIS CAPACITY AS DEPUTY EXECUTIVE ASSISTANT TO THE
PRESIDENT, MELQUIADES P. DE LA CRUZ, IN HIS CAPACITY AS
DIRECTOR, MALACAñANG RECORDS OFFICE, AND FLORENDO S. PABLO,
IN HIS CAPACITY AS DIRECTOR, BUREAU OF PRINTING,
RESPONDENTS.

DECISION

ESCOLIN, J.:

Invoking the people's 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:

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, 386,
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, 301-203, 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-
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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 not being "aggrieved parties" within
the meaning of Section 3, Rule 65 of the Rules of Court, which we quote:

"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."

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 vs.

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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 [Mitchell vs. 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]."

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:

"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."

The reasons given by the Court in recognizing a private citizen's 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:

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

The interpretation given by respondent is in accord with this Court's 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:

"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. x x x"

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.

Perhaps at no time since the establishment of the Philippine Republic has the publication of
laws taken so vital significance than 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 denominación genérica de leyes, se comprenden
también 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 x x x." The word "shall" used therein imposes upon respondent officials
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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 vs. COMELEC[7]:

"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."

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 Court's 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 vs. Baxter Bank[8]
to wit:

"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
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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."

Consistently with the above principle, this Court in Rutter vs. 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 x x x that an
all-inclusive statement of a principle of absolute retroactive invalidity cannot be justified."

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 vs. 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."

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., concurs.


Fernando, J., concurs in a separate opinion expressing the view that without publication, a
due process question may arise but that such publication need not be in the Official Gazette.
To that extent he concurs with the opinion of Justice Plana.
Teehankee, J., files a brief concurrence.
Makasiar and Abad Santos, JJ., concur in the opinion of Chief Justice Fernando.
Aquino, J., no part.
Concepcion, Jr., J., on leave.
Melencio-Herrera, J., see separate concurring opinion.
Plana, J., see separate opinion.
Gutierrez, Jr., J., concurs insofar as publication is necessary but reserves his 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.

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Cuevas and Alampay, JJ., concur in the opinion of the Chief Justice and Justice Plana.

[1] "SECTION 6. The right of the people to information on matters of public concern shall be

recognized, access to official records, and to documents and papers pertaining to official
acts, transactions, or decisions, shall be afforded the citizens subject to such limitation as
may be provided by law."

[2] Anti-Chinese League vs. Felix, 77 Phil. 1012; Costas vs. Aldanese, 45 Phil. 345; Almario

vs. City Mayor, 16 SCRA 151; Palting vs. San Jose Petroleum, 18 SCRA 924; Dumlao vs.
Comelec, 95 SCRA 392.

[3] 16 Phil. 366, 378.

[4] Camacho vs. Court of Industrial Relations, 80 Phil. 848; Mejia vs. Balolong, 81 Phil. 486;

Republic of the Philippines vs. Encarnacion, 87 Phil. 843; Philippine Blooming Mills, Inc. vs.
Social Security System, 17 SCRA 1077; Askay vs. Cosalan, 46 Phil. 179.

[5] 1 Manresa, Codigo Civil, 7th Ed., p. 146

[6] People vs. Que Po Lay, 94 Phil. 640; Balbuena et al. vs. Secretary of Education, et al., 110

Phil. 150.

[7] 82 SCRA 30, dissenting opinion.

[8] 308 U.S. 371, 374

[9] 93 Phil. 68

[10] The report was prepared by the Clerk of Court after Acting Director Florendo S. Pablo Jr.

of the Government Printing Office, failed to respond to her letter-request regarding the
respective dates of publication in the Official Gazette of the presidential issuances listed
therein. No report has been submitted by the Clerk of Court as to the publication or non-
publication of other presidential issuances.

[11] 129 SCRA 174

CONCURRING OPINION WITH QUALIFICATION

FERNANDO, C.J.:

There is on the whole acceptance on my part of the views expressed in the ably written
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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 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, 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
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prosecution, then, of course, its ex post facto character becomes evident.[5] In civil cases
though, retroactivity 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 clear 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.

[1] Separate Opinion of Justice Plana, first paragraph. He mentioned in this connection
Article 7, Sec. 21 of the Wisconsin Constitution and State ex rel. White v. Grand Superior Ct.,
71 ALR 1354, citing the Constitution of Indiana, U.S.A.

[2] Ibid, closing paragraph.

[3] Learned Hand, The Spirit of Liberty 104 (1960).

[4] Cardozo, The Growth of the Law, 3 (1924).

[5] Cf. Nuñez v. Sandiganbayan, G.R. No. 50581-50617, January 30, 1982, 111 SCRA 433.

[6] Cf. Alalayan v. National Power Corporation, L-24396, July 29, 1968, 24 SCRA 172.

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CONCURRING OPINION

MELENCIO-HERRERA, J.:

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.

SEPARATE OPINION

PLANA, J.:

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
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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.

* See, e.g., Wisconsin Constitution, Art. 7, Sec. 21: "The legislature shall provide publication

of all statute laws ... and no general law shall be in force until published." See also State ex
rel. White vs. Grand Superior Ct., 71 ALR 1354, citing the Constitution of Indiana, U.S.A.

CONCURRING OPINION

TEEHANKEE, J.:

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."

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."

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
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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 Code's 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.

[1] People vs. de Dios, G.R. No. 11003, Aug. 31, 1959, per the late Chief Justice Paras.

[2] Notes in brackets supplied.

[3] Respondents' comment, pp. 14-15.

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230 Phil. 528

EN BANC

[ G.R. No. 63915, December 29, 1986 ]

LORENZO M. TAÑADA, ABRAHAM F. SARMIENTO, ARID MOVEMENT OF


ATTORNEYS FOR BROTHERHOOD, INTEGRITY AND NATIONALISM, INC.
(MABINI), PETITIONERS, VS. HON. JUAN C. TUVERA, IN HIS CAPACITY
AS EXECUTIVE ASSISTANT TO THE PRESIDENT, HON. JOAQUIN VENUS,
IN HIS CAPACITY AS DEPUTY EXECUTIVE ASSISTANT TO THE
PRESIDENT, MELQUIADES P. DE LA CRUZ, ETC., ET AL., RESPONDENTS.

RESOLUTION

CRUZ, J.:

Due process was invoked by the petitioners in demanding the disclosure of a number of
presidential decrees which they claimed had not been published as required by law. The
government argued that while publication was necessary as a rule, it was not so when it was
"otherwise provided," as when the decrees themselves declared that they were to become
effective immediately upon their approval. In the decision of this case on April 24, 1985, the
Court affirmed the necessity for the publication of some of these decrees, declaring in the
dispostive portion as follows:

"WHEREFORE, the Court hereby orders respondents to publish in the Official


Gazette all unpublished presidential issuances which are of general application,
and unless so published, they shall have no binding force and effect."

The petitioners are now before us again, this time to move for reconsideration/clarification of
that decision.[1] Specifically, they ask the following questions:

1. What is meant by "law of public nature" or "general applicability"?

2. Must a distinction be made between laws of general applicability and laws which are
not?

3. What is meant by "publication"?

4. Where is the publication to be made?

5. When is the publication to be made?

Resolving their own doubts, the petitioners suggest that there should be no distinction
between laws of general applicability and those which are not; that publication means
complete publication; and that the publication must be made forthwith in the Official

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Gazette.[2]

In the Comment[3] required of the then Solicitor General, he claimed first that the motion
was a request for an advisory opinion and should therefore be dismissed, and, on the merits,
that the clause "unless it is otherwise provided" in Article 2 of the Civil Code meant that the
publication required therein was not always imperative; that publication, when necessary, did
not have to be made in the Official Gazette; and that in any case the subject decision was
concurred in only by three justices and consequently not binding. This elicited a Reply[4]
refuting these arguments. Came next the February Revolution and the Court required the
new Solicitor General to file a Rejoinder in view of the supervening events, under Rule 3,
Section 18, of the Rules of Court. Responding, he submitted that issuances intended only for
the internal administration of a government agency or for particular persons did not have to
be published; that publication when necessary must be in full and in the Official Gazette; and
that, however, the decision under reconsideration was not binding because it was not
supported by eight members of this Court.[5]

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

"ART. 2. Laws shall take effect after fifteen days following the completion of their
publication in the Official Gazette, unless it is otherwise provided. This Code shall
take effect one year after such publication."

After a careful study of this provision and of the arguments of the parties, both on the
original petition and on the instant motion, we have come to the conclusion, and so hold,
that the clause "unless it is otherwise provided" refers to the date of effectivity and not to
the requirement of publication itself, which cannot in any event be omitted. This clause does
not mean that the legislature may make the law effective immediately upon approval, or on
any other date, without its previous publication.

Publication is indispensable in every case, but the legislature may in its discretion provide
that the usual fifteen-day period shall be shortened or extended. An example, as pointed
out by the present Chief Justice in his separate concurrence in the original decision,[6] is the
Civil Code which did not become effective after fifteen days from its publication in the Official
Gazette but "one year after such publication." The general rule did not apply because it was
"otherwise provided."

It is not correct to say that under the disputed clause publication may be dispensed with
altogether. The reason is that such omission would offend due process insofar as it would
deny the public knowledge of the laws that are supposed to govern it. Surely, if the
legislature could validly provide that a law shall become effective immediately upon its
approval notwithstanding the lack of publication (or after an unreasonably short period after
publication), it is not unlikely that persons not aware of it would be prejudiced as a result;
and they would be so not because of a failure to comply with it but simply because they did
not know of its existence. Significantly, this is not true only of penal laws as is commonly
supposed. One can think of many non-penal measures, like a law on prescription, which
must also be communicated to the persons they may affect before they can begin to operate.

We note at this point the conclusive presumption that every person knows the law, which of

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course presupposes that the law has been published if the presumption is to have any legal
justification at all. It is no less important to remember that Section 6 of the Bill of Rights
recognizes "the right of the people to information on matters of public concern," and this
certainly applies to, among others, and indeed especially, [the legislative enactments of the
government.

The term "laws" should refer to all laws and not only to those of general application, for
strictly speaking all laws relate to the people in general albeit there are some that do not
apply to them directly. An example is a law granting citizenship to a particular individual,
like a relative of President Marcos who was decreed instant naturalization. It surely cannot
be said that such a law does not affect the public although it unquestionably does not apply
directly to all the people. The subject of such law is a matter of public interest which any
member of the body politic may question in the political forums or, if he is a proper party,
even in the courts of justice. In fact, a law without any bearing on the public would be
invalid as an intrusion of privacy or as class legislation or as an ultra vires act of the
legislature. To be valid, the law must invariably affect the public interest even if it might be
directly applicable only to one individual, or some of the people only, and not to the public as
a whole.

We hold therefore that all statutes, including those of local application and private laws, shall
be published as a condition for their effectivity, which shall begin fifteen days after
publication unless a different effectivity date is fixed by the legislature.

Covered by this rule are presidential decrees and executive orders promulgated by the
President in the exercise of legislative powers whenever the same are validly delegated by
the legislature or, at present, directly conferred by the Constitution. Administrative rules and
regulations must also be published if their purpose is to enforce or implement existing law
pursuant also to a valid delegation.

Interpretative regulations and those merely internal in nature, that is, regulating only the
personnel of the administrative agency and not the public, need not be published. Neither is
publication required of the so called letters of instructions issued by administrative superiors
concerning the rules or guidelines to be followed by their subordinates in the performance of
their duties.

Accordingly, even the charter of a city must be published notwithstanding that it applies to
only a portion of the national territory and directly affects only the inhabitants of that place.
All presidential decrees must be published, including even, say, those naming a public place
after a favored individual or exempting him from certain prohibitions or requirements. The
circulars issued by the Monetary Board must be published if they are meant not merely to
interpret but to "fill in the details" of the Central Bank Act which that body is supposed to
enforce.

However, no publication is required of the instructions issued by, say, the Minister of Social
Welfare on the case studies to be made in petitions for adoption or the rules laid down by the
head of a government agency on the assignments or workload of his personnel or the
wearing of office uniforms. Parenthetically, municipal ordinances are not covered by this rule
but by the Local Government Code.

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We agree that the publication must be in full or it is no publication at all since its purpose is
to inform the public of the contents of the laws. As correctly pointed out by the petitioners,
the mere mention of the number of the presidential decree, the title of such decree, its
whereabouts (e.g., "with Secretary Tuvera"), the supposed date of effectivity, and in a mere
supplement of the Official Gazette cannot satisfy the publication requirement. This is not
even substantial compliance. This was the manner, incidentally, in which the General
Appropriations Act for FY 1975, a presidential decree undeniably of general applicability and
interest, was "published" by the Marcos administration.[7] The evident purpose was to
withhold rather than disclose information on this vital law.

Coming now to the original decision, it is true that only four justices were categorically for
publication in the Official Gazette[8] and that six others felt that publication could be made
elsewhere as long as the people were sufficiently informed.[9] One reserved his vote[10] and
another merely acknowledged the need for due publication without indicating where it should
be made.[11] It is therefore necessary for the present membership of this Court to arrive at a
clear consensus on this matter and to lay down a binding decision supported by the
necessary vote.

There is much to be said of the view that the publication need not be made in the Official
Gazette, considering its erratic releases and limited readership. Undoubtedly, newspapers of
general circulation could better perform the function of communicating the laws to the people
as such periodicals are more easily available, have a wider readership, and come out
regularly. The trouble, though, is that this kind of publication is not the one required or
authorized by existing law. As far as we know, no amendment has been made of Article 2 of
the Civil Code. The Solicitor General has not pointed to such a law, and we have no
information that it exists. If it does, it obviously has not yet been published.

At any rate, this Court is not called upon to rule upon the wisdom of a law or to repeal or
modify it if we find it impractical. That is not our function. That function belongs to the
legislature. Our task is merely to interpret and apply the law as conceived and approved by
the political departments of the government in accordance with the prescribed procedure.
Consequently, we have no choice but to pronounce that under Article 2 of the Civil Code, the
publication of laws must be made in the Official Gazette, and not elsewhere, as a
requirement for their effectivity after fifteen days from such publication or after a different
period provided by the legislature.

We also hold that the publication must be made forthwith, or at least as soon as possible, to
give effect to the law pursuant to the said Article 2. There is that possibility, of course,
although not suggested by the parties, that a law could be rendered unenforceable by a
mere refusal of the executive, for whatever reason, to cause its publication as required. This
is a matter, however, that we do not need to examine at this time.

Finally, the claim of the former Solicitor General that the instant motion is a request for an
advisory opinion is untenable, to say the least, and deserves no further comment.

The days of the secret laws and the unpublished decrees are over. This is once again an
open society, with all the acts of the government subject to public scrutiny and available
always to public cognizance. This has to be so if our country is to remain democratic, with
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sovereignty residing in the people and all government authority emanating from them.

Although they have delegated the power of legislation, they retain the authority to review
the work of their delegates and to ratify or reject it according to their lights, through their
freedom of expression and their right of suffrage. This they cannot do if the acts of the
legislature are concealed.

Laws must come out in the open in the clear light of the sun instead of skulking in the
shadows with their dark, deep secrets. Mysterious pronouncements and rumored rules
cannot be recognized as binding unless their existence and contents are confirmed by a valid
publication intended to make full disclosure and give proper notice to the people. The furtive
law is like a scabbarded saber that cannot feint, parry or cut unless the naked blade is
drawn.

WHEREFORE, it is hereby declared that all laws as above defined shall immediately upon
their approval, or as soon thereafter as possible, be published in full in the Official Gazette,
to become effective only after fifteen days from their publication, or on another date
specified by the legislature, in accordance with Article 2 of the Civil Code.

SO ORDERED.

Teehankee, C.J., Feria, Yap, Narvasa, Melencio-Herrera, Alampay, Gutierrez, Jr., and Paras,
JJ., concur.
Fernan, J., concurs, added a few observations in a separate opinion.
Feliciano, J., see separate opinion.

[1] Rollo, pp. 242-250.

[2] Ibid., pp. 244-248.

[3] Id., pp. 271-280.

[4] Id., pp. 288-299.

[5] Id., pp. 320-322.

[6] 136 SCRA 27, 46.

[7] Rollo, p. 246.

[8] Justices Venicio Escolin (ponente), Claudio Teehankee, Ameurfina Melencio-Herrera, and

Lorenzo Relova.

[9] Chief Justice Enrique M. Fernando and Justices Felix V. Makasiar, Vicente Abad-Santos,

Efren I. Plana, Serafin P. Cuevas, and Nestor B. Alampay.


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[10] Justice Hugo E. Gutierrez, Jr.

[11] Justice B. S. de la Fuente.

CONCURRING OPINION

FERNAN, J.:

While concurring in the Court's opinion penned by my distinguished colleague, Mr. Justice
Isagani A. Cruz, I would like to add a few observations. Even as a Member of the defunct
Batasang Pambansa, I took a strong stand against the insidious manner by which the
previous dispensation had promulgated and made effective thousands of decrees, executive
orders, letters of instructions, etc. Never has the law-making power which traditionally
belongs to the legislature been used and abused to satisfy the whims and caprices of a one-
man legislative mill as it happened in the past regime. Thus, in those days, it was not
surprising to witness the sad spectacle of two presidential decrees bearing the same number,
although covering two different subject matters. In point is the case of two presidential
decrees bearing number 1686 issued on March 19, 1980, one granting Philippine citizenship
to Michael M. Keon, the then President's nephew and the other imposing a tax on every
motor vehicle equipped with airconditioner. This was further exacerbated by the issuance of
PD No. 1686-A also on March 19, 1980 granting Philippine citizenship to basketball players
Jeffrey Moore and Dennis George Still.

The categorical statement by this Court on the need for publication before any law may be
made effective seeks to prevent abuses on the part of the lawmakers and, at the same time,
ensures to the people their constitutional right to due process and to information on matters
of public concern.

CONCURRING OPINION

FELICIANO, J.:

I agree entirely with the opinion of the Court so eloquently written by Mr. Justice Isagani A.
Cruz. At the same time, I wish to add a few statements to reflect my understanding of what
the Court is saying.

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A statute which by its terms provides for its coming into effect immediately upon approval
thereof, is properly interpreted as coming into effect immediately upon publication thereof in
the Official Gazette as provided in Article 2 of the Civil Code. Such statute, in other words,
should not be regarded as purporting literally to come into effect immediately upon its
approval or enactment and without need of publication. For so to interpret such statute
should be to collide with the constitutional obstacle posed by the due process clause. The
enforcement of prescriptions which are both unknown to and unknowable by those subjected
to the statute, has been throughout history common tool of tyrannical governments. Such
application and enforcement constitute at bottom a negation of fundamental principle of
legality in the relations between a government and its people.

At the same time, it is clear that the requirement of publication of a statute in the Official
Gazette, as distinguished from any other medium such as a newspaper of general circulation,
is embodied in a statutory norm and is not a constitutional command. The statutory norm is
set out in Article 2 of the Civil Code and is supported and reinforced by Section 1 of
Commonwealth Act No. 638 and Section 35 of the Revised Administrative Code. A
specification of the Official Gazette as the prescribed medium of publication may therefore be
changed. Article 2 of the Civil Code could, without creating a constitutional problem, be
amended by a subsequent statute providing, for instance, for publication either in the Official
Gazette or in a newspaper of general circulation in the country. Until such an amendatory
statute is in fact enacted, Article 2 of the Civil Code must be obeyed and publication effected
in the Official Gazette and not in any other medium.

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69 Phil. 217

[ G.R. No. 46623, December 07, 1939 ]

MARCIAL KASILAG, PETITIONER, VS. RAFAELA RODRIGUEZ, URBANO


ROQUE, SEVERO MAPILISAN AND IGNACIO DEL ROSARIO,
RESPONDENTS.

DECISION

IMPERIAL, J.:

This is an appeal taken by the defendant-petitioner from the decision of the Court of Appeals
which modified that rendered by the Court of First Instance of Bataan in civil case No. 1504
of said court and held: that the contract, Exhibit "1" is entirely null and void and without
effect; that the plaintiffs-respondents, then appellants, are the owners of the disputed land,
with its improvements, in common ownership with their brother Gavino Rodriguez, hence,
they are entitled to the possession thereof; that the defendant-petitioner should yield
possession of the land in their favor, with all the improvements thereon and free from any
lien; that the plaintiffs-respondents jointly and severally pay to the defendant-petitioner the
sum of P1,000 with interest at 6 per cent per annum from the date of the decision; and
absolved the plaintiffs-respondents from the cross-complaint' relative to the value of the
improvements claimed by the defendant-petitioner. The appealed decision also ordered the
registrar of deeds of Bataan to cancel certificate of title No. 325, in the name of the deceased
Emiliana Ambrosio and to issue in lieu thereof another certificate of title in favor of the
plaintiffs-respondents and their brother Gavino Rodriguez, as undivided owners in equal
parts, free of all liens and incumbrances except those expressly provided by law, without
special pronouncement as to the costs.

The respondents, children and heirs of the deceased Emiliana Ambrosio, commenced the
aforesaid civil case to the end that they recover from the petitioner the possession of the
land and its improvements granted by way of homestead to Emiliana Ambrosio under patent
No. 16074 issued on January 11, 1931, with certificate of title No. 325 issued by the
registrar of deeds of Bataan on June 27, 1931 in her favor, under section 122 of Act. No.
496, which land was surveyed and identified in the cadastre of the municipality of Limay,
Province of Bataan, as lot No. 285; that the petitioner pay to them the sum of P650 being
the approximate value of the fruits which he received from the land; that the petitioner sign
all the necessary documents to transfer the land and its possession to the respondents; that
the petitioner be restrained, during the pendency of the case, from conveying or
encumbering the land and its improvements; that the registrar of deeds of Bataan cancel
certificate of title No. 325 and issue in lieu thereof another in favor of the respondents, and
that the petitioner pay the costs of suit.

The petitioner denied in his answer all the material allegations of the complaint and by way
of special defense alleged that he was in possession of the land and that he was receiving
the fruits thereof by virtue of a mortgage contract, entered into between him and the
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deceased Emiliana Ambrosio on May 16, 1932, which was duly ratified by a notary public;
and in counterclaim asked that the respondents pay him the sum of P1,000 with 12 per cent
interest per annum which the deceased owed him and that, should the respondents be
declared to have a better right to the possession of the land, that they be sentenced to pay
him the sum of P5,000 as value of all the improvements which he introduced upon the land.

On May 16, 1932 Emiliana Ambrosio, in life, and the petitioner executed the following public
deed:

"This agreement, made and entered into this 16th day of May, 1932, by and
between Emiliana Ambrosio, Filipino, of legal age, widow and resident of Limay,
Bataan, P. I., hereinafter called the party of the first part, and Marcial Kasilag,
Filipino, of legal age, married to Asuncion Roces, and resident at 312 Perdigon
Street, Manila, P. I., hereinafter called party of the second part.

"WITNESSETH : That the parties hereto hereby covenant and agree to and with
each other as follows:

"ARTICLE I. That the party of the first part is the absolute registered
owner of a parcel of land in the barrio of Alngan, municipality of Limay,
Province of Bataan, her title thereto being evidenced by homestead
certificate of title No. 325 issued by the bureau of Lands on June 11,
1931, said land being lot No. 285 of the Limay Cadastre, General Land
Registration Office Cadastral Record No. 1054, bounded and described
as follows:

"Beginning at point marked 1 on plan E-57394, N. 84° 32'


W. 614.82 m. from B. B. M. No. 3, thence N. 66° 35' E.
307.15 m. to point "2"; S. 5° 07' W. to point "5"; S. 6° 10'
E. 104.26 m. to point "4"; S. 82° 17' W. to point "5"; S. 28°
53' W. 72.26 m. to point "6"; N. 71° 09' W. to point "7"; N.
1° 42' E. 173.72 m. to point 1, point of beginning,

"Containing an area of 6.7540 hectares.

"Points 1, 2, 6 and 7, B. L.; points 3, 4 and 5, stakes; points


4, 5 and 6 on bank of Alangan River.

"Bounded on the North, by property claimed by Maria


Ambrocio; on the East, by Road; on the South, by Alangan
River and property claimed by Maxima de la Cruz; and on
the West, by property claimed by Jose del Rosario.

"Bearing true. Declination 0° 51' E.

"Surveyed under authority of sections 12-22, Act No. 2874


and in accordance with existing regulations of the Bureau of
Lands, by Mamerto Jacinto, public land surveyor, on July 8,
1927 and approved on February 25, 1931.

"ARTICLE II. That the improvements on the above described land


consist of the following:
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"Four (4) mango trees, fruit bearing: one hundred ten (110)
hills of bamboo trees; one (1) tamarind and six (6) bonga
trees.

"ARTICLE III. That the assessed value of the land is P940 and the
assessed value of the improvements is P860, as evidenced by tax
declaration No. 3531 of the municipality of Limay, Bataan.

"ARTICLE IV. That for and in consideration of the sum of one thousand
pesos (P1,000) Philippine currency, paid by the party of second part to
the party of the first part, receipt whereof is hereby acknowledged, the
party of the first part hereby encumbers and hypothecates, by way of
mortgage, only the improvements described in Articles II and III
hereof, of which improvements the party of the first part is the
absolute owner.

"ARTICLE V. That the condition of said mortgage is such that if the


party of the first part shall well and truly pay, or cause to be paid to
the party of the second part, his heirs, assigns, or executors, on or
before the 16th day of November, 1936, or four and one-half (4 ½)
years after date of the execution of this instrument, the aforesaid sum
of one thousand pesos (P1,000) with interest at 12 per cent per
annum, then said mortgage shall be and become null and void;
otherwise the same shall be and shall remain in full force and effect,
and subject to foreclose in the manner and form provided by law for
the amount due thereunder, with costs and also attorney's fees in the
event of such foreclosure.

"ARTICLE VI. That the party of the first part shall pay all taxes and
assessments which are or may become due on the above described
land and improvements during the term of this agreement.

"ARTICLE VII. That within thirty (30) days after date of execution of
this agreement, the party of the first part shall file a motion before the
Court of First Instance at Balanga, Bataan, P. I., requesting
cancellation of Homestead Certificate of Title No. 325 referred to in
Article I hereof and the issuance, in lieu thereof, of a certificate of title
under the provisions of Land Registration Act No. 496, as amended by
Act 3901.

"ARTICLE VIII. It is further agreed that if upon the expiration of the


period of time (4 ½) years stipulated in this mortgage, the mortgagor
should fail to redeem this mortgage, she would execute a deed of
absolute sale of the property herein described for the same amount as
this mortgage, including all unpaid interests at the rate of 12 per cent
per annum, in favor of the mortgagee.

"ARTICLE IX. That in the event the contemplated motion under Article
VII hereof is not approved by the Court, the foregoing contract of sale

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shall automatically become null and void, and the mortgage stipulated
under Article IV and V shall remain in full force and effect.

"In testimony whereof, the parties hereto have hereunto set their hands the day
and year first hereinbefore written.

(Sgd.) "MARCIAL KASILAG

(Sgd.) EMILIANA AMBROSIO

"Signed in the presence of:

(Sgd.) "ILLEGIBLE

(Sgd.) GAVINO RODRIGUEZ

Philippine Islands
Balanga, Bataan ss.

"Before me this day personally appeared Emiliana Ambrosio without cedula by


reason of her sex, to me known and known to me to be the person who signed
the foregoing instrument, and acknowledged to me that she executed the same
as her free and voluntary act and deed.

"I hereby certify that this instrument consists of three (3) pages including this
page of the acknowledgment and that each page thereof is signed by the parties
to the instrument and the witnesses in their presence and in the presence of each
other, and that the land treated in this instrument consists of only one parcel.

"In witness whereof I have hereunto set my hand and affixed my notarial seal,
this 16th day of May, 1932.

(Sgd.) "Nicolas Navarro


Notary Public
My commission expires December 31, 1983

"Doc. No. 178


Page 36 of my register
Book No. IV"

One year after the execution of the aforequoted deed, that is, in 1933, it came to pass that
Emiliana Ambrosio was unable to pay the stipulated interest as well as the tax on the land
and its improvements. For this reason, she and the petitioner entered into another verbal
contract whereby she conveyed to the latter the possession of the land on condition that the
latter would not collect the interest on the loan, would attend to the payment of the land tax,
would benefit by the fruits of the land, and would introduce improvements thereon. By virtue
of this verbal contract, the petitioner entered upon the possession of the land, gathered the
products thereof, did not collect the interest on the loan, introduced improvements upon the
land valued at P5,000, according to him and on May 22, 1934 the tax declaration was
transferred in his name and on March 6, 1936 the assessed value of the land was increased
from P1,020 to P2,180.

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After an analysis of the conditions of Exhibit "1" the Court of Appeals came to the conclusion
and so held that the contract entered into by and between the parties, set out in the said
public deed, was one of absolute purchase and sale of the land and its improvements. And
upon this ruling it held null and void and without legal effect the entire Exhibit 1 as well as
the subsequent verbal contract entered into between the parties, ordering, however, the
respondents to pay to the petitioner, jointly and severally, the loan of P1,000, with legal
interest at 6 per cent per annum from the date of the decision. In this first assignment of
error the petitioner contends that the Court of Appeals violated the law in holding that
Exhibit 1 is an absolute deed of sale of the land and its improvements and that it is void and
without any legal effect.

The cardinal rule in the interpretation of contracts is to the effect that the intention of the
contracting parties should always prevail because their will has the force of law between
them. Article 1281 of the Civil Code consecrates this rule and provides, that if the terms of a
contract are clear and leave no doubt as to the intention of the contracting parties, the literal
sense of its stipulations shall be followed; and if the words appear to be contrary to the
evident intention of the contracting parties, the intention shall prevail. The contract set out in
Exhibit I should be interpreted in accordance with these rules. As the terms thereof are clear
and leave no room for doubt, it should be interpreted according to the literal meaning of its
clauses. The words used by the contracting parties in Exhibit 1 clearly show that they
intended to enter into the principal contract of loan in the amount of P1,000, with interest at
12 per cent per annum, and into the accessory contract of mortgage of the improvements on
the land acquired as homestead, the parties having, moreover, agreed upon the pacts and
conditions stated in the deed. In other words, the parties entered into a contract of mortgage
of the improvements on the land acquired as homestead, to secure the payment of the
indebtedness for P1,000 and the stipulated interest thereon. In clause V the parties
stipulated that Emiliana Ambrosio was to pay, within four and a half years, or until November
16, 1936, the debt with interest thereon, in which event the mortgage would not have any
effect; in clause VI the parties agreed that the tax on the land and its improvements, during
the existence of the mortgage, should be paid by the owner of the land; in clause VII it was
covenanted that within thirty days from the date of the contract, the owner of the land would
file a motion in the Court of First Instance of Bataan asking that certificate of title No. 325 be
cancelled and that in lieu thereof another be issued under the provisions of the Land
Registration Act, No. 496, as amended by Act No. 3901; in clause VIII the parties agreed
that should Emiliana Ambrosio fail to redeem the mortgage within the stipulated period of
four years and a half, she would execute an absolute deed of sale of the land in favor of the
mortgagee, the petitioner, for the same amount of the loan of P1,000 including unpaid
interest; and in clause IX it was stipulated that in case the motion to be presented under
clause VII should be disapproved by the Court of First Instance of Bataan, the contract of
sale would automatically become void and the mortgage would subsist in all its force.

Another fundamental rule in the interpretation of contracts, not less important than those
indicated, is to the effect that the terms, clauses and conditions contrary to law, morals and
public order should be separated from the valid and legal contract when such separation can
be made because they are independent of the valid contract which expresses the will of the
contracting parties. Manresa, commenting on article 1255 of the Civil Code and stating the
rule of separation just mentioned, gives his views as follows:

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"On the supposition that the various pacts, clauses or conditions are valid, no
difficulty is presented; but should they be void, the question is as to what extent
they may produce the nullity of the principal obligation. Under the view that such
features of the obligation are added to it and do not go to its essence, a criterion
based upon the stability of juridical relations should tend to consider the nullity as
confined to the clause or pact suffering therefrom, except in case where the latter,
by an established connection or by manifest intention of the parties, is
inseparable from the principal obligation, and is a condition, juridically speaking,
of that the nullity of which it would also occasion." (Manresa, Commentaries on
the Civil Code, Volume 8, p. 575.)

The same view prevails in the Anglo-American law, as condensed in the following words:

"Where an agreement founded on a legal consideration contains several promises,


or a promise to do several things, and a part only of the things to be done are
illegal, the promises which can be separated, or the promise, so far as it can be
separated, from the illegality, may be valid. The rule is that a lawful promise
made for a lawful consideration is not invalid merely because an unlawful promise
was made at the same time and for the same consideration, and this rule applies,
although the invalidity is due to violation of a statutory provision, unless the
statute expressly or by necessary implication declares the entire contract void. *
* *" (13 C. J., par. 470, p. 512; New York Cent. etc. R. Co. v. Gray, 239 U. S.,
583; 60 Law. ed., 451; U. S. v. Mora, 97 U. S., 413, 24 Law. ed., 1017; U. S. v.
Hodson, 10 Wall, 395; 19 Law ed. 937; Gelpcke v. Dubuque, 1 Wall. 175, 17 Law.
ed., 520; U. S. v. Bradly, 10 Pet. 343, 9 Law. ed., 448; Borland v. Prindle, 144
Fed. 713; Western Union Tel. Co. v. Kansas Pac. R. Co., 4 Fed., 284; Northern
Pac. R. Co. v. U. S., 15 Ct. CL, 428.)

Addressing ourselves now to the contract entered into by the parties, set out in Exhibit 1, we
stated that the principal contract is that of loan and the accessory that of mortgage of the
improvements upon the land acquired as a homestead. There is no question that the first of
these contracts is valid as it is not against the law. The second, or the mortgage of the
improvements, is expressly authorized by section 116 of Act No. 2874, as amended by
section 23 of Act No. 3517, reading:

"SEC. 116. Except in favor of the Government or any of its branches, units, or
institutions, or legally constituted banking corporations, lands acquired under the
free patent or homestead provisions shall not be subject to encumbrance or
alienation from the date of the approval of the application and for a term of five
years from and after the date of issuance of the patent or grant, nor shall they
become liable to the satisfaction of any debt contracted prior to the expiration of
said period; but the improvements or crops on the land may be mortgaged or
pledged to qualified persons, associations, or corporations."

It will be recalled that by clause VIII of Exhibit 1 the parties agreed that should Emiliana
Ambrosio fail to redeem the mortgage within the stipulated period of four and a half years,
by paying the loan together with interest, she would execute in favor of the petitioner an
absolute deed of sale of the land for P1,000, including the interest stipulated and owing. This
stipulation was verbally modified by the same parties after the expiration of one year, in the
sense that the petitioner would take possession of the land and would benefit by the fruits
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thereof on condition that he would condone the payment of interest upon the loan and he
would attend to the payment of the land tax. These pacts made by the parties
independently were calculated to alter the mortgage contract clearly entered into, converting
the latter into a contract of antichresis. (Article 1881 of the Civil Code.) The contract of
antichresis, being a real encumbrance burdening the land, is illegal and void because it is
condemned by section 116 of Act No, 2874, as amended, but the clauses regarding the
contract of antichresis, being independent of and separable from the contract of mortgage,
can be eliminated, thereby leaving the latter in being because it is legal and valid.

The foregoing considerations bring us to the conclusion that the first assignment of error is
well-founded and that error was committed in holding that the contract entered into between
the parties was one of absolute sale of the land and its improvements and that Exhibit 1 is
null and void.

In the second assignment of error the petitioner contends that the Court of Appeals erred in
holding that he is guilty of violating the Public Land Act because he entered into the contract,
Exhibit 1. The assigned error is vague and not specific. If it attempts to show that the said
document is valid in its entirety, it is not well-founded because we have already said that
certain pacts thereof are illegal because they are prohibited by section 116 of Act No. 2874,
as amended.

In the third assignment of error the petitioner insists that his testimony, as to the verbal
agreement entered into between him and Emiliana Ambrosio, should have been accepted by
the Court of Appeals; and in the fourth and last assignment of error the same petitioner
contends that the Court of Appeals erred in holding that he acted in bad faith in taking
possession of the land and in taking advantage of the fruits thereof, resulting in the denial of
his right to be reimbursed for the value of the improvements introduced by him.

We have seen that subsequent to the execution of the contract, Exhibit 1, the parties entered
into another verbal contract whereby the petitioner was authorized to take possession of the
land, to receive the fruits thereof and to introduce improvements thereon, provided that he
would renounce the payment of stipulated interest and he would assume payment of the
land tax. The possession by the petitioner and his receipt of the fruits of the land, considered
as integral elements of the contract of antichresis, are illegal and void agreements because,
as already stated, the contract of antichresis is a lien and as such is expressly prohibited by
section 116 of Act No. 2874, as amended. The Court of Appeals held that the petitioner acted
in bad faith in taking possession of the land because he knew that the contract he made with
Emiliana Ambrosio was an absolute deed of sale and, further, that the latter could not sell the
land because it is prohibited by section 116. The Civil Code does not expressly define what is
meant by bad faith, but section 433 provides that "Every person who is unaware of any flaw
in his title, or in the manner of its acquisition, by which it is invalidated, shall be deemed a
possessor in good faith"; and provides, further, that "Possessors aware of such flaw are
deemed possessors in bad faith." Article 1950 of the same Code, covered by Chapter II
relative to prescription of ownership and other real rights, provides, in turn, that "Good faith
on the part of the possessor consists in his belief that the person from whom he received the
thing was the owner of the same, and could transmit the title thereto." We do not have
before us a case of prescription of ownership, hence, the last article is not squarely in point.
In resume, it may be stated that a person is deemed a possessor in bad faith when he knows
that there is a flaw in his title or in the manner of its acquisition, by which it is invalidated.

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Borrowing the language of Article 433, the question to be answered is whether the petitioner
should be deemed a possessor in good faith because he was unaware of any flaw in his title
or in the manner of its acquisition by which it is invalidated. It will be noted that ignorance
of the flaw is the keynote of the rule. From the facts found established by the Court of
Appeals we can neither deduce nor presume that the petitioner was aware of a flaw in his
title or in the manner of its acquisition, aside from the prohibition contained in section 116.
This being the case, the question is whether good faith may be premised upon ignorance of
the laws. Manresa, commenting on article 434 in connection with the preceding article,
sustains the affirmative. He says:

"We do not believe that in real life there are not many cases of good faith founded
upon an error of law. When the acquisition appears in a public document, the
capacity of the parties has already been passed upon by competent authority, and
even established by appeals taken from final judgments and administrative
remedies against the qualification of registrars, and the possibility of error is
remote under such circumstances; but, unfortunately, private documents and
even verbal agreements far exceed public documents in number, and while no one
should be ignorant of the law, the truth is that even we who are called upon to
know and apply it fall into error not infrequently. However, a clear, manifest, and
truly unexcusable ignorance is one thing, to which undoubtedly refers article 2,
and another and different thing is possible and excusable error arising from
complex legal principles and from the interpretation of conflicting doctrines.

"But even ignorance of the law may be based upon an error of fact, or better still,
ignorance of a fact is possible as to the capacity to transmit and as to the
intervention of certain persons, compliance with certain formalities and
appreciation of certain acts, and an error of law is possible in the interpretation of
doubtful doctrines." (Manresa, Commentaries on the Spanish Civil Code, Volume
IV, pp. 100, 101 and 102.)

According to this author, gross and inexcusable ignorance of the law may not be the basis of
good faith, but possible, excusable ignorance may be such basis. It is a fact that the
petitioner is not conversant with the laws because he is not a lawyer. In accepting the
mortgage of the improvements he proceeded on the well-grounded belief that he was not
violating the prohibition regarding the alienation of the land. In taking possession thereof
and in consenting to receive its fruits, he did not know, as clearly as a jurist does, that the
possession and enjoyment of the fruits are attributes of the contract of antichresis and that
the latter, as a lien, was prohibited by section 116. These considerations again bring us to
the conclusion that, as to the petitioner, his ignorance of the provisions of section 116 is
excusable and may, therefore, be the basis of his good faith. We do not give much
importance to the change of the tax declaration, which consisted in making the petitioner
appear as the owner of the land, because such an act may only be considered as a sequel to
the change of possession and enjoyment of the fruits by the petitioner, to about which we
have stated that the petitioner's ignorance of the law is possible and excusable. We,
therefore, hold that the petitioner acted in good faith in taking possession of the land and
enjoying its fruits.

The petitioner being a possessor in good faith within the meaning of article 433 of the Civil
Code and having introduced the improvements upon the land as such, the provisions of
article 361 of the same Code are applicable; wherefore, the respondents are entitled to have
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the improvements and plants upon indemnifying the petitioner the value thereof which we fix
at P3,000, as appraised by the trial court; or the respondents may elect to compel the
petitioner to have the land by paying its market value to be fixed by the court of origin.

The respondents also prayed in their complaint that the petitioner be compelled to pay them
the sum of F650, being the approximate value of the fruits obtained by the petitioner from
the land. The Court of Appeals affirmed the judgment of the trial court denying the claim or
indemnity for damages, being of the same opinion as the trial court that the respondents
have not established such damages. Under the verbal contract between the petitioner and
the deceased Emiliana Ambrosio, during the latter's lifetime, the former would take
possession of the land and would receive the fruits of the mortgaged improvements on
condition that he would no longer collect the stipulated interest and that he would attend to
the payment of the land tax. This agreement, at bottom, is tantamount to the stipulation
that the petitioner should apply the value of the fruits of the land to the payment of
stipulated interest on the loan of P1,000 which is, in turn, another of the elements
characterizing the contract of antichresis under article 1881 of the Civil Code. It was not
possible for the parties to stipulate further that the value of the fruits be also applied to the
payment of the capital, because the truth was that nothing remained after paying the
interest at 12% per This interest, at the rate fixed, amounted to P120 per annum, whereas
the market value of the fruits obtainable from the land hardly reached said amount in view of
the fact that the assessed value of said improvements was, according to the decision, P860.
To this should be added the fact that, under the verbal agreement, from the value of the
fruits had to be taken a certain amount to pay the annual land tax. We mention these data
here to show that the petitioner is also not bound to render an accounting of the value of the
fruits of the mortgaged improvements for the reason stated that said value hardly covers the
interest earned by the secured indebtedness.

For all the foregoing considerations, the appealed decision is reversed, and we hereby
adjudge: (1) that the contract of mortgage of the improvements, set out in Exhibit 1, is valid
and binding; (2) that the contract of antichresis agreed upon verbally by the parties is a real
incumbrance which burdens the land and, as such, is null and without effect; (3) that the
petitioner is a possessor in good faith; (4) that the respondents may elect to have the
improvements introduced by the petitioner by paying the latter the value thereof, P3,000, or
to compel the petitioner to buy and have the land where the improvements or plants are
found, by paying them its market value to be fixed by the court of origin, upon hearing the
parties; (5) that the respondents have a right to the possession of the land and to enjoy the
mortgaged improvements; and (6) that the respondents may redeem the mortgage of the
improvements by paying to the petitioner within three months the amount of P1,000,
without interest, as that stipulated is set off by the value of the fruits of the mortgaged
improvements which the petitioner received; and in default thereof the petitioner may ask
for the public sale of said improvements for the purpose of applying the proceeds thereof to
the payment of his said credit. Without special pronouncement as to the costs in all
instances. So ordered.

Diaz, J., concur.


Avanceña, C.J., concurs in the dissenting opinion of J. Moran.
Laurel, J., concurs in the result.
Villa-Real, J., see concurring and dissenting opinion.
Concepcion and Moran, JJ., see dissenting opinion

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CONCURRING AND DISSENTING OPINION

VILLA-REAL, J.:

According to the contract entered into on May 16, 1932, between Emiliana Ambrosio, in life,
and the petitioner Marcial Kasilag, the first, in consideration of the sum of P1,000 given to
her by the second, constituted a mortgage on the improvements only of the land which she
acquired by way of homestead. The improvements which she mortgaged consisted of four
fruit-bearing mango trees, one hundred ten hills of bamboo trees, 1 tamarind tree and 6
betelnut trees, the assessed value of which was P660. The conditions of the loan were that if
the mortgagor should pay the mortgagee on November 16, 1936, that is, four and a half
years after the execution of the deed, said sum of P1,000 with interest thereon at 12% per
annum, the aforesaid mortgage would become null and void, otherwise it would remain in
full force and effect and would be subject to foreclosure in the manner provided by law; that
the mortgagor would pay all the land taxes on the land and its improvements during the
duration of the contract; and that if after the expiration of the said period of four and a half
years the mortgagor should fail to redeem the mortgage, she would execute in favor of the
mortgagee an absolute deed of sale of the property described in the contract for the same
sum of P1,000 plus interest due and unpaid at the rate of 12 per cent per annum.

The principal rule in the interpretation of contracts is that "If the terms of a contract are clear
and leave no doubt as to the intention of the contracting parties, the literal sense of its
stipulations shall be followed. If the words appear to be contrary to the evident intention of
the contracting parties, the intention shall prevail" (article 1281, Civil Code). "In order to
judge as to the intention of the contracting parties, attention must be paid principally to their
conduct at the time of making the contract and subsequently thereto." (Article 1282.)

Now, then, what is the true nature of the contract entered into between the parties by virtue
of the deed of sale executed by them on May 16, 1932? The Court of Appeals held that it is
an absolute deed of sale of a land with a homestead certificate of title, under the guise of a
loan secured by a mortgage upon its improvements in order to go around the prohibition
contained in section 116 of Act No. 2874, as amended by section 23 of Act No. 3517.

Closely examined, the only clauses of the contract which may lead to the conclusion that it is
one of sale are those which state that if at the expiration of the period of four years and a
half the mortgagor should fail to pay the amount of the loan plus interest due and unpaid at
the rate of 12 per cent per annum, she would execute in favor of the mortgagee a deed of
absolute sale of the land whose improvements were mortgaged for the amount of the loan
and the interest owing. It will be seen that the sale would not be made until after the lapse
of four and a half years from the execution of the deed, if the morgagor should fail or should
not wish to redeem the mortgaged improvements. Consequently, the obligation contracted
by said mortgagor was no more than a conditional promise to sell. Now, then, is this promise

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to sell valid? Like any other onerous, consensual and mutually binding contract, that of
promise to sell requires for its legal existence and validity the concurrence of consent,
consideration and subject-matter. The contract before us does not show what is the cause or
consideration for such promise to sell. Assuming that it was the economic impotence of the
mortgagor to redeem the mortgaged improvements, before she could be compelled to
comply with her obligation to sell, there is need to wait until she should fail to exercise the
right to redeem either due to lack of funds or to abandonment. The cause will come into
being only upon the happening of said event after the four and a half years and only then
will the said contract of promise to sell have juridical existence. The P1,000 and its interest,
should the mortgagor fail to redeem the improvements upon the maturity of the
indebtedness, would be the consideration of the sale; because the promise to sell is a
contract different and distinct from that of sale and each requires a consideration for its legal
existence and validity.

The terms of the contract are clear and explicit and do not leave room for doubt that the
intention of the contracting parties was to constitute a mortgage on the improvements of the
land in litigation to secure the payment of the loan for P1,000, with interest thereon at 12
per cent per annum. It cannot be said that this contract is simulated because the assessed
value of the improvements is P860 only. It is well known that rural properties are valued for
assessment purposes not less than half of their market value. The true value of the said
improvements may therefore be P1,720, and the mortgagee may have considered that
adequate. Moreover, the petitioner could not have the property whose improvements were
mortgaged to him even should the mortgagor default in the payment of interest. He could
only have the mortgaged improvements in case of foreclosure should he bid therefor at the
sale. Neither could the mortgagor sell the same property to the mortgagee, even after the
expiration of five years from the issuance of the homestead certificate of title, for then the
sale would be in satisfaction of an obligation contracted during the five years, which is
prohibited by the oft-mentioned section 116 of Act No. 2874, as amended by section 23 of
Act No. 3517. The fact that after one year the contracting parties had novated the contract of
loan secured by a mortgage, converting the same into a contract of antichresis because of
the mortgagor's failure to pay the accrued interest, does not show that they intended to
enter into a contract of sale, because the conversion in this case of the contract of loan
secured by a mortgage into one of antichresis was accidental, due to the mortgagor's default
in the payment of unpaid interest for the first year. If the parties' intention from the
beginning had been to sell the property, the mortgagee would have immediately entered
upon the possession of the land instead of waiting until after the expiration of one year. The
transfer of the Torrens certificate of title to the homestead by the original owner to the
mortgagee in 1934 was only a consequence of the conversion of the mortgage loan into an
antichretic loan, the parties having erroneously believed that it was necessary to make such
a transfer. The setting off of the interest on the debt against the fruits of the property given
in antichresis finds authority in article 1885 of the Civil Code. There is, therefore, no
ambiguity in the terms of the contract warranting the search outside its four corners for the
true intention of the contracting parties other than that of entering into a contract of loan
secured by the said improvements. If the true intention of the contracting parties, as clearly
gathered from the terms of the contract, was to enter into a contract of loan secured by a
mortgage upon the improvements, although they should convert it into a contract of
antichresis after one year and although after the maturity of the loan with interest they may
wish to convert it into one of absolute sale-both conversions being illegal and, hence, void,-
the original intention of entering into a contract of loan secured by a mortgage upon the
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improvements would prevail, the said contract of loan being the only one legal and valid, and
the petitioner having acted in good faith in making it.

The verbal contract of antichresis, entered into by the petitioner Marcial Kasilag and Emiliana
Ambrosio, being null and void ab initio and without any legal effect because it is in violation
of the express prohibition of section 116 of Act No. 2874, as amended by section 23 of Act
No. 3517, (article 4 of the Civil Code), the contracting parties should restore to each other
the things which have been the subject-matter of the contract, together with their fruits, and
the price paid therefor, together with interest, pursuant to Article 1303 of the same Code.
Marcial Kasilag, therefore, should return to Emiliana Ambrosio or to her heirs the possession
of the homestead and the improvements thereon with its fruits, and Emiliana Ambrosio or
her heirs should pay him the sum of P1,000, being the amount of the loan, plus interest due
and unpaid.

As to the improvements introduced upon the land by the petitioner, having done so with the
knowledge and consent of its owner Emiliana Ambrosio, the former acted in good faith, and
under article 361 of the Civil Code, the owner of the land may have the said improvements
upon paying the indemnity provided in articles 453 and 454, or may compel the said Marcial
Kasilag, who introduced the said improvements, to pay the price of the land. If the herein
respondents, as heirs of Emiliana Ambrosio, do not wish or are unable to pay for said
improvements, and Marcial Kasilag does not wish or is unable to pay for the land, said
petitioner would lose his right of retention over the same (Bernardo vs. Batclan, 37 Off. G.,
No. 74, p. 1382), provided that he may remove the improvements which he had introduced
in good faith.

In view of the foregoing, I concur in the majority opinion except insofar as it holds that the
interest is set off against the fruits of the mortgaged improvements, because as a result of
the nullity of the contract of antichresis the petitioner should return to the respondents the
products of the mortgaged improvements, and the latter should pay to the petitioner the
amount of the loan plus interest due and unpaid at the rate of 12 per cent per annum from
the date of the contract until fully paid.

CONCURRING OPINION

LAUREL, J.:

On August 27, 1918, Emiliana Ambrosio put in a homestead application for lot No, 285 of the
Limay Cadastre, Province of Bataan. After complying with the requisite legal formalities, she
obtained therefor homestead patent No. 16074 and homestead certificate of title 325 on
June 11, 1931, the same having been recorded in the Registry of Deeds of Bataan on June
26, 1931. On May 16, 1932, she entered with the herein petitioner, Marcial Kasilag, into a
contract, Exhibit 1, inserted in the foregoing majority opinion.

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Sometime in 1933, or a year after the execution of the aforequoted deed, the patentee failed
to pay the stipulated interest and land taxes, whereupon, the mortgagee, Marcial Kasilag,
and the mortgagor, Emiliana Ambrosio, verbally agreed that the former would pay the land
taxes and waive the unpaid interest, enter into the possession of the property in question,
introducing improvements thereon, and thereafter be reimbursed for the value of such
improvements. Under this verbal pact, Kasilag went into possession of the property, planted
it with fruit trees allegedly valued at P5,000, and, on May 22, 1934, declared the same for
taxation purposes. In 1934 the original homesteader, Emiliana Ambrosio, died leaving as
heirs her children, Rafaela Rodriguez, Severo Mapilisan, Ignacio del Rosario and Gavino
Rodriguez.

On May 16, 1936, the said heirs, with the exception of Gavino Rodriguez who testified for the
defendant, sued Marcial Kasilag in the Court of First Instance of Bataan to recover the
possession of the aforesaid property belonging to their mother. For answer, the defendant
put in as a general denial plea, a special defense that his possession was in good faith with
the knowledge and tolerance of the plaintiffs, a counterclaim for P1,000 representing the
loan to the deceased homesteader with stipulated interest thereon, and a recoupment for
P5,000 allegedly the value of the improvements he had introduced upon the land. On the
issues thus joined, the trial court gave judgment for the defendant couched in the following
language:

"Resuming all that has been said above, the court finds and declares that the
deed of combined mortgage and sale executed by Emiliana Ambrosio in favor of
the defendant Marcial Kasilag and dated May 16, 1932, is null and void as a
contract for a future conveyance or sale of the homestead, but valid as an
equitable mortgage on the improvements for the sum of P1,000; and that the
possession of the homestead by the defendant Marcial Kasilag by virtue of said
contract or by virtue of any other agreement is null and void, but that the making
of the improvements thereon by him, which the court finds to be valued at
P3,000, by virtue of the verbal agreement entered into after the executing of the
original instrument of mortgage, was in good faith, entitling the said Marcial
Kasilag to be reimbursed of their actual value, the above-mentioned amount.
Wherefore, let judgment be entered declaring that the plaintiffs are entitled to the
possession as owners of the homestead subject of the present suit, lot No. 285 of
the Limay cadastral survey, subject to an encumbrance of the improvements for
the sum of P1,000 in favor of the defendant, ordering the defendant to deliver
unto the plaintiffs the possession of said homestead, and directing the said
plaintiffs in turn to pay unto the defendant jointly and severally, as heirs of their
deceased mother Rafaela Rodriguez the sum of P3,000, value of improvements
introduced on said homestead by defendant. Let there be no pronouncement as to
costs." On appeal by the plaintiffs, the Third Division of the Court of Appeals
reached a different result and modified the judgment of the trial court as follows:

"Wherefore, the appealed judgment is hereby modified by declaring that the


contract, Exhibit '1', is entirely null and void; that the plaintiffs and appellants are
the owners of the lot in question together with all the improvements thereon in
common with their brother, Gavino Rodriguez, and are, therefore, entitled to the
possession thereof; ordering the defendant and appellee to vacate and deliver the
possession of the aforesaid lot together with all the improvements thereon to the

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aforementioned plaintiffs and appellants free from any encumbrance; requiring


the latter, however, to pay jointly and severally to the said appellee the sum of
P1,000 with interest thereon at the rate of 6 per cent per annum from and
including the date this decision becomes final; and absolving the said plaintiffs
and appellants from the cross-complaint with respect to the value of the
improvements claimed by the appellee.

"It is further ordered that the register of deeds of Bataan cancel the certificate of
title No, 325 in the name of the deceased, Emiliana Ambrosio, and issue in lieu
thereof a new certificate of title in favor of the herein plaintiffs and appellants and
their brother, Gavino Rodriguez, as owners pro indiviso and in equal shares free
from any lien or encumbrance except those expressly provided by law.

"Without special pronouncement as to the costs."

The case is before us on petition for certiorari which was given due course, filed by
defendant-appellee, Marcial Kasilag, now petitioner, against plaintiffs-appellants, Rafaela
Rodriguez and others, now respondents. The burden of petitioner's case is condensed in the
following assignments of error:

The Honorable Court of Appeals erred:

"I. In having interpreted that document Exhibit '1' is an absolute sale and
declared it entirely null and void, and, in not having interpreted and declared that
it is a deed of combined mortgage and future sale which, if void as a contract for
the future conveyance of the homestead in question is, however, valid as an
equitable mortgage on the improvements thereof for the sum of P1,000 loaned by
the petitioner Marcial Kasilag to the homestead owner Emiliana Ambrosio.

"II. In holding that the petitioner was guilty of the violation of the public land law
for having entered into said contract Exhibit '1'.

"III. In not giving probative value to the uncontradicted testimony of the


petitioner Marcial Kasilag that he was expressly authorized by the homestead
owner Emiliana Ambrosio to introduce improvements in said homestead.

"IV. In not declaring that the possession by the petitioner Marcial Kasilag of said
homestead and the introduction by him of improvements therein by virtue of the
verbal agreement entered into after the execution of the original instrument of
mortgage was in good faith, entitling him to be reimbursed of the actual value of
improvements he introduced."

Boiled down to the fundamentals, there are only two propositions which stand to be resolved
in this appeal: (1) What is the legal nature of the agreement, Exhibit 1, entered into by and
between the parties? and (2) Is Marcial Kasilag guilty of bad faith in entering upon the
possession of the homestead, paying the land tax and introducing improvements thereon?

The numerous adjudications in controversies of this nature will show that each case must be
decided in the light of the attendant circumstances and the situation of the parties which,
upon the whole, mark its character. However, for the purpose of ascertaining the manner and
extent to which persons have intended to be bound by their written agreements, the safe

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criterion, the time honored test, is their intention which is intimately woven into the
instrument itself. It is true that resort to extrinsic evidence is imperative when the contract is
ambiguous and is susceptible of divergent interpretations; nevertheless, the primary
obligation of the courts is to discover the intention of the contracting parties, as it is
expressed by the language of the document itself. We are not authorized to make a contract
for the parties.

In the trial court as in the Court of Appeals, the discussion centered on the nature and
validity of the document, Exhibit 1. This is the correct approach. The Court of Appeals,
however, rejected the conclusion of the trial court that it is a deed of combined mortgage and
sale, and ruled that it is an absolute deed of sale which is null and void in its entirety
because it is banned by section 116, as amended of the Public Land Act. The ruling is now
assailed by the petitioner. I share petitioner's view that the deed is not what it was
construed to be by the Court of Appeals.

From Article I to III thereof is a description of the homestead and the improvements existing
thereon. By its Article IV the homesteader, Emiliana Ambrosio, "encumbers and hipothecates,
by way of mortgage, only the improvements described in Articles II and III" under the
conditions set out in Articles V, VI and VII. Its closing Articles VIII and IX, particularly relied
upon by the Court of Appeals, speak, not of a present deed of absolute sale, but of one to be
executed "upon the expiration of the period of, time (4 ½ years) stipulated in the mortgage"
if "the mortgagor should fail to redeem this mortgage". In other words, the redemption of
the mortgage by the payment of the loan may bring about the frustration of the
contemplated sale, hence, to hold unqualifiedly that the whole of Exhibit 1, or even a part
thereof, is an absolute deed of sale would be to do violence to the terms of the document
itself.

Still other tokens drive home the same conviction. The intimation by the Court of Appeals
that the petitioner "know, therefore, that the land subject of the patent could not be
alienated by express prohibition of law," is an argument that the petitioner could not have
brazenly disregarded the law by intending Exhibit 1 to be an absolute deed of sale. Its
further observation that "the stipulation under article VIII of the contract, Exhibit '1' * * *
clearly indicates that there was nothing left to be done except the execution of the deed of
absolute sale," is a concession that no such sale has yet been executed. Finally, it will be
recalled that under Article VII of Exhibit 1, "within thirty (30) days after date of execution of
this agreement the party of the first part shall file a motion before the Court of First Instance
of Balanga, Bataan, P. I., requesting cancellation of homestead certificate of title No. 325
referred to in Article 1 hereof and the issuance, in lieu thereof, of a certificate of title under
the provisions of Land Registration Act 496, as amended by Act 3901." And by its Article IX it
provides "That in the event the contemplated motion under Article VII hereof is not approved
by the Court, the foregoing contract of sale shall automatically become mill and void."
(Underlining is mine.) We have nothing in the record to show that the required motion was
filed within thirty days or thereafter, by Emiliana Ambroso in life, or by her successors-in-
interest after her death. Indeed, Homestead Certificate of Title No. 325, sought to be
substituted by another through the said motion, still stands. It is, evident, therefore, that
the projected sale has and may never come into being, because under Article IX of Exhibit 1,
it became automatically null and void. This view, incidentally, precludes further consideration
of the validity or invalidity of the sale clause of Exhibit 1, as it will be purely academic to

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dwell upon the nature and effect of a contract that has passed out of existence in the
contemplation of the parties.

Having reached the conclusion, upon its plain language and unequivocal import, that Exhibit
1 is essentially and fundamentally a mortgage upon the improvements found on the
questioned homestead, with a conditional clause for the future sale of said homestead and
improvements which has become a "dead twig" still attached to a living tree because the
condition has never been performed, I would, under Articles 1281 and 1283 of the Civil
Code, be otherwise content in resting our decision of this aspect of the case on this
interpretation. But I do not propose to so limit my inquiry in view of the fact that the Court
of Appeals points to contemporaneous and subsequent circumstances, beyond the four
corners of the document, Exhibit 1, allegedly revelatory of petitioner's concealed but evident
intention to circumvent the law. I may state, at the outset, that these circumstances are
fairly susceptible of legitimate explanations. The appealed decision could not conceive of a
man, of petitioner's intelligence, who "would accept improvements valued at only P860 as
security for the payment of a larger amount of P1,000." But we are concerned with an
assessed valuation which is not always nor even frequently the value that it can command in
the market. To ignore this is to live in monastic seclusion. The appealed decision would
imply from the fact that petitioner subsequently paid the land taxes and from the further fact
that Emiliana never paid stipulated interest on the one thousand-peso loan, that Exhibit 1
was meant to vest absolute title irretrievably in the petitioner. It could hardly be supposed at
the time of the execution of Exhibit 1 that the homesteader would fail to make these
payments, nor does it seem just to draw from these circumstances, induced by Emiliana's
own neglect, deductions unfavorable to the petitioner. That the petitioner went upon the
possession of the questioned property is not proof that he was even then already the would-
be owner thereof, for as elsewhere stated, the said possession came practically at the
suggestion of or at least with the consent of Emiliana Ambrosio as a result of her failure to
live up to her part of the bargain. Finally, the Court of Appeals asked: "If the real purpose
was to mortgage the improvements only as specified in article IV of the contract, why is it
that in article VIII thereof it was provided that in case of failure to redeem the alleged
mortgage the grantor would be required to execute a deed of absolute sale of the property
described therein for the same amount of the mortgage in favor of the grantee, and not of
'the improvements only'?" The precaution which the petitioner took to have the sale clause of
Exhibit I so phrased that the said sale would not be effected until after the expiration of the
five-year period prohibited by law, at which time the alienation of the homestead would then
have been perfectly legitimate, may not be without significance to show petitioner's respect
for and intention to be on the side of the law. The very mention of the word "sale" in the
document in question argues against any attempt at concealment, for if the said document
was intended as a cover and cloak of an illegal alienation, then the reference to the contract
of sale therein was illtimed and foolhardy.

The question next at hand is whether or not the mortgage constituted upon the
improvements of the homestead is valid. It is, under express provisions of section 116 of the
Public Land Act, before and after its amendment, reading pertinently that "the improvements
or crops on the land may be mortgaged or pledged to qualified persons, associations, or
corporations." I find no occasion to dispute this legislative policy however mistaken it may
be. It is sufficient to observe that what the law permits may be done. Upon the other hand, I
find no occasion to test the legality of the sale provisions of Exhibit 1 for, as I have
heretofore said, this question is, in my opinion, moot. Moreover, the petitioner, technically, is

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barred from raising this question, as he did not appeal from and, therefore, abided by the
decision of the trial court which outlawed this sale clause as violative of the provisions of
section 116 of the Public Land Act. This part of the decision of the trial court was affirmed by
the Court of Appeals when the latter struck down Exhibit 1 in its entirety and, even now,
petitioner does not complain against the destruction of Exhibit 1 with respect to its sale
clause. In other words, counsel for petitioner concedes all along that the said sale clause
may be properly legislated out. As the mortgage provisions of Exhibit 1 are independent of
and severable from the rest thereof, the same are perfectly enforceable. Where a part of the
contract is perfectly valid and separable from the rest, the valid portion should not be
avoided. (Ollendorf vs. Abrahamson, 38 Phil., 585.)

The question yet to be answered is whether the petitioner's possession of the questioned
homestead was in good faith so as to entitle him to reimbursement for improvements
introduced upon the land. The basis of petitioner's possession was a verbal agreement with
the original homesteader whereby, for failure of the latter to comply with her obligations to
pay land taxes and stipulated interest on the loan, the former assumed the said obligations
for the privilege of going into possession of the property, introducing improvements thereon,
and thereafter being reimbursed for the value of such improvements. The petitioner did enter
upon such possession, planted the land to fruit trees valued at P5,000, according to him, and
P3,000, according to the trial judge. It should be stated, in passing, that the Court of
Appeals was unable to belie this verbal agreement, although it was of the opinion "that the
trial court erred in giving probative value to the testimony of the appellee with reference to
the alleged verbal agreement". Its reason for the opinion is not because the testimony is
untrue, but because even if it were true, "it only tends to corroborate the allegation that he
acted in bad faith when he took possession of the property and made improvements thereon,
because then he knew full well that the homestead owner could not enter into an agreement
involving the future final and absolute alienation of the homestead in his favor." As the said
opinion and the reason back of it does not involve a question of strict fact, it is in our power
to inquire into its soundness. The weakness of the argument lies, first, in its (a)
inconsistency and (b) in the misconception of the legal principle involved: inconsistency,
because it considers entry of possession, payment of land tax as facts tending to show the
real character of the transaction and as evidencing bad faith on the part of the petitioner, but
at the same time it improperly rejects the verbal agreement by which such facts are
established. It is clear that we cannot directly reject the verbal agreement between the
parties in so far as it is favorable to Ambrosio and indirectly reject it in so far as it is
favorable to the petitioner. The misconception proceeds from the erroneous legal conclusion
that, upon the facts, the good faith is attributable to the petitioner alone and that Ambrosio
was not to be blamed for the prohibited alienation of the homestead, as I shall presently
proceed to discuss.

In holding that the petitioner was a possessor in bad faith, the decision sought to be
reviewed first laid down the premise that such possession is banned by law at least for1 five
years from the issuance of patent (section 116, Public Land Act), assumed that the petitioner
had knowledge of such law, and then drew the conclusion that petitioner was aware of the
illegality of his possession. We think that the assumption and conclusion are precipitate. As
observed in the foregoing majority opinion-citing Manresa-knowledge of a legal provision
does not necessarily mean knowledge of its true meaning and scope, or of the interpretation
which the courts may place upon it. In this particular case, what section 116 of the Public
Land Act prohibits is the "incumbrance or alienation" of land acquired thereunder within the

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period prescribed therein. We may concede, as assumed by the appealed decision, that the
petitioner was cognizant of said section 116, but this is not saying that petitioner knew that
his possession came under the phrase "incumbrance or alienation" prohibited by law, and
that the petitioner, therefore, knew that his possession was illegal. The import of the phrase
"incumbrance or alienation" is a subject upon which "men of reason may reasonably differ,"
in the same way that we ourselves have differed in the deliberation of this case. It is not
correct to assume that the petitioner had knowledge of the illegality of his possession. The
contrary assumption, namely, that petitioner had no idea of such illegality, would have been
more in accord with the experience of everyday, for petitioner would not have invested
money and labor in the land and assumed obligations incumbent upon the homesteader if he
had even the least suspicion that all his efforts would count for nothing and would in the end
entangle him in a mild scandal. As possession in bad faith does not necessarily mean
possession illegal under the law, is being necessary that the possessor be aware of such
illegality, it follows that the petitioner's possession of the homestead of the respondents was
in good faith. (Art. 433, Civil Code.) "Good faith is always presumed, and the burden of
proving bad faith on the part of the possessor rests upon the person alleging it" (article 434,
Civil Code.) As a bona fide possessor, and it being unquestioned that the improvements
introduced by him upon the land redounded to its benefit, the petitioner is by law entitled to
be paid for the value of such improvements in the amount of P3,000, as found by the trial
judge. "Useful expenditures shall be paid the possessor in good faith with the same right of
retention, the person who has defeated him in his possession having the option of refunding
the amount of such expenditures or paying him the increase in value which the thing has
acquired by reason thereof." (Article 453, 2nd par., Civil Code). The reimbursement in this
particular case is the more in order in view of the express undertaking of respondents'
predecessor-in-interest to pay therefor.

Even the equities of the case militate against the respondents and in favor of the petitioner.
There is a concession that the petitioner's possession was neither imposed upon nor wrested
from the homesteader; on the contrary, it came about by virtue of a mutual agreement
whereby the said homesteader; and the herein respondents were spared the burden of
paying for land taxes and stipulated interest and extended the benefit of having their land
improved on condition that they pay the value of such improvements upon redeeming the
land. We also have uncontradicted fact that P400 of the one thousand-peso loan were given
to the herein respondents and the balance kept by their mother. They may not reap and
retain these benefits and at the same time repudiate and go back upon contractual
obligations solemnly entered into.

But let me grant that the contract, Exhibit 1, is one of absolute sale, as found by the Court of
Appeals, what then? As the land could not be alienated for five years from the date of the
issuance of the patent, the sale was illegal and void because it was entered into in violation
of section 116 of the Public Land Act, as amended. By whom was the law violated? Certainly,
not by Kasilag alone but by Ambrosio as well. Both are presumed to know the law, and we
cannot justly charge Kasilag alone with that knowledge on the alleged reason that Kasilag is
rich and Ambrosio is poor. Neither can we proceed on the bare assumption that because
Exhibit 1 was written in English it was prepared by Kasilag as if he were the only English-
speaking person in the Province of Bataan where the document was executed. Are we
already living in the midst of a communistic society that we shall have to incline invariably
the balance in favor of a litigant because he happens to be poor and against the litigant who
happens to be well-to-do, regardless of the merits of the case? And to this end, shall we, by

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a series of assumptions and deductions, impute to a party malice aforethought dishonesty


and bad faith, in entering into a transaction made in the open sun, publicly recorded and
whose effectiveness was even conditioned by the approval of a court of justice? If so, then I
dare say that we have not profited by the admonition of Aristotle in his Metaphysics
centuries ago that "justice is a virtue of the soul which discards party, friendship and
sentiment and is therefore always represented as blind." There is a charm in rhetoric but its
value in cool judicial reasoning is nil.

And if—as we are confidently told—we should relax the legal principle with reference to
Ambrosio, because she was "poor and ignorant," I am reluctant to believe that she was
ignorant of the condition against the alienation inserted in all homestead patents, and my
knowledge of the Public Land Law, of the activities of the Department and bureau charged
with the administration of public lands, gives me just the contrary impression. Every
homestead patent contains that condition. Circulars and instructions and general information
have been issued in pursuance with law. (Sec. 5, Act No. 2874; see also sec. 5,
Commonwealth Act No. 141.) I must presume that the Government and its officials charged
with the administration of public lands have complied with the law and their duties in this
connection, and I cannot believe that Ambrosio, when she alienated the property, was
unaware of the legal prohibition. Under the circumstances, then, it is reasonable to conclude
that on the hypothesis that the document, Exhibit 1, was a contract of absolute sale between
Kasilag and Ambrosio, both of them were guilty of infraction of the law. If this is correct,
what is the legal situation of the parties?

Justinian who, by his Corpus Juris Civiles, still speaks through practically all the civil codes of
Continental Europe, considers both as having acted in good faith, "Realmente," bluntly
observes Manresa, "si los dos que se encuentran en lucha sobre la propiedad han provocado
el conflicto por su iroluntad; a ciencia y paciencia del dueno del suelo, ante cuya vista las
obras se han ejecutado, y con conciencia, por parte del que edifica o planta, de que el
terreno no es suyo, no hay razon alguna que abone derecho preferente en favor de ninguno
de los dos; deben, por tanto, tratarse como si los dos hubiesen obrado de buena fe; la mala
fe del uno extingue y neutraliza, en justa reciprocidad, la del otro" (Manresa, Codigo Civil,
segunda edicion Tomo III pag. 203.) Article 364 of our Civil Code then comes into play.
"When there has been bad faith, not only on the part of the person who built, sewed, or
planted on another's land, but also on the part of the owner of the latter, the rights of both
shall be the same as if they had acted in good faith. Bad faith on the part of the owner is
deemed to exist whenever the act has been done in his presence, with his knowledge and
tolerance, and without opposition on his part." (Article 364, Civil Code; see also arts. 1303,
1306 ibid.) The codal section is evidently based upon the venerable maxim of equity that one
who comes into equity must come with clean hands. A court which seeks to enforce on the
part of the defendant uprightness, fairness, and conscientiousness also insists that, if relief is
to be granted, it must be to a plaintiff whose conduct is not inconsistent with the standards
he seeks to have applied to his adversary.

Fundamenta justitiae sunt, ut ne cui noceatur, delude ut communi serviatur. I therefore


concur in the result.

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DISSENTING OPINION

CONCEPCION, J.:

In view of the findings of fact of the Court of Appeals, which are final according to law, I
dissent from the majority opinion as to the legal denomination of the contract really entered
into by the petitioner and the now deceased Emiliana Ambrosio.

The facts according to the decision of the Court of Appeals are as follows:

"On August 27, 1918, the deceased, Emiliana Ambrosio applied for the land in
question as a homestead, now known as lot No. 285 of the Limay cadastral survey
of Bataan, and the application was approved on September 10, 1919. A final proof
was submitted on November 10, 1927 which was approved on October 17, 1929.
The homestead patent No. 16074 and homestead certificate of title No. 325 were
issued in favor of the applicant on June 11, 1931 which were recorded on June
26, 1931 in the office of the register of deeds in accordance with the provisions of
section 122 of Act 496.

"On or about May 16, 1932, the homestead owner, Emiliana Ambrosio offered to
sell the property to the defendant and appellee, Marcial Kasilag, The latter, upon
examining her title found that it was a homestead patent and knew, therefore,
that the land subject of the patent could not be alienated by express prohibition of
law, so he devised a means by which the proposed sale might not appear in any
document and had the patentee, Emiliana Ambrosio, execute a public instrument,
Exhibit '1', purporting to be a mere mortgage of the improvements thereon
consisting of four mango trees, fruit bearing; 110 hills of bamboo trees, 1
tamarind, and 6 bonga trees, with the assessed value of P860, in consideration of
the sum of P1,000 alleged to have been loaned by the said Kasilag to the said
patentee, Emiliana Ambrosio. It was expressly stipulated in that document that
the aforementioned amount should be paid within four and a half years from the
date of the instrument (May 16, 1932), the condition being that if she would fail
to redeem the alleged mortgage at the expiration of the stipulated period, she
would execute a deed of absolute sale of the property therein described for the
same amount of the alleged mortgage (P1,000) including all unpaid interest at the
rate of 12 per cent per annum in favor of the alleged mortgagee. It was further
stipulated therein that the said Emiliana should pay all the taxes and assessment
which might become due on the land and improvements during the term of the
agreement and that within thirty days after the date of the execution thereof she
should file a motion before the Court of First Instance of Bataan requesting the
cancellation of the homestead certificate No. 325 above referred to and the
issuance in lieu thereof a certificate of title under the provisions of the Land
Registration Act 496, as amended by Act 3901.

"The lot in question was originally declared for land tax purposes in the name of
the homestead (owner) Emiliana Ambrosio, and assessed at P1,020 in 1933; but

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on May 22, 1934, the tax declaration was transferred in the name of the appellee,
Marcial Kasilag, and on March 6, 1936 the assessed value was raised to P2,180.

"Emiliana, however, never paid any interest on the alleged loan of P1,000 or paid
taxes on the land since the execution of the contract.

"The evidence further discloses that the appellant entered upon the actual
possession of the land and had been holding the same up to the present time,
having planted various kinds of fruit trees valued according to him at P5,000, and
collected the products thereof for his own exclusive benefit."

Relying upon the foregoing facts, the majority contends that the contract executed by the
parties was one of mortgage, as per Exhibit 1, with a promise to sell the land in question. I
cannot hold to these rulings of the majority, because the nature of the contract of mortgage
is inconsistent with the idea that the creditor should immediately enter upon the possession
of the mortgaged land; that he should pay the land tax; that he should introduce
improvements thereon, and that he should accept as security something whose values does
not cover the amount of the loan sought to be secured, for in this case the supposed loan
was P1,000, and what were mortgaged were only the improvements consisting of 4 mango
trees, 110 hills of bamboo trees, 1 tamarind tree and 6 betelnut trees, assessed at P860.

I believe that the contract which the parties intended to execute is a promise to sell the land,
for which reason Ambrosio retained the right of ownership of the land and its improvements
while the deed of the promised sale had not been executed. Under the terms of the deed
Exhibit 1, Kasilag could not be considered the owner of the land, nor could he execute any
act premised upon the assumption of ownership, nor could he alienate the same as he had
no title to it. But the parties, in consideration of the fact that Kasilag paid in advance the
price of the land and assumed the obligation to pay the tax thereon, which Ambrosio could
not pay, agreed that Kasilag may enter upon the enjoyment of the land until the promise to
sell is converted in fact into an absolute sale by the execution of the corresponding deed by
Ambrosio. It was stipulated, however, that if the sale is not approved by the Court, Kasilag
would collect the amount of P1,000 paid by him as a mortgage credit, with all the interest
due and payable.

Under these circumstances, the conclusion of law that Kasilag acted in bad faith is not
supported by the established facts.

Wherefore, the plaintiffs are bound to comply with the contract as heirs of Ambrosio, by
executing in favor of Kasilag the deed of sale of the land, but should the sale, for any reason,
be not approved, Kasilag may collect the amount of P1,000 with all the interests thereon,
and may execute the judgment obtained by him upon the land and all its improvements,
deducting, however, in his favor the value of the improvements which he introduced upon the
land in good faith.

In view of the foregoing, I am of the opinion that the decision of the Court of Appeals should
be reversed and that another should be entered against the respondents, requiring them to
execute the deed of sale of the land in favor of the petitioner, provided that if the sale, for
any reason, be not approved by the court, the petitioner may execute his credit upon the
land and all its improvements, after deducting the value of the improvements introduced by
him upon the land.

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DISSENTING OPINION

MORAN, J.:

According to section 116 of Act No. 2874, as amended by section 23 of Act No. 3517, "lands
acquired under the free patent or homestead provisions shall not be subject to encumbrance
or alienation from the date of the approval of the application and for a term of five years
from and after the date of issuance of the patent or grant, nor shall they become liable to
the satisfaction of any debt contracted prior to the expiration of said period."

About June 11, 1931, homestead patent No. 16074 was issued to Emiliana Ambrosio, now
deceased. On May 16, 1932 Emiliana Ambrosio offered the sale of the said homestead to the
herein petitioner, Marcial Kasilag, and in view of the above-quoted legal prohibition, the
parties executed the document Exhibit 1, copied in the majority decision. The heirs of
Emiliana Ambrosio filed a complaint for the annulment of the contract in the Court of First
Instance of Bataan, and from the judgment rendered by said court an appeal was taken to
the Court of Appeals, which held that the true contract between the parties is one of absolute
sale, wherefore, it is null and void under the already cited legal prohibition. Marcial Kasilag
comes to this court on certiorari, and this Court reverses the decision of the Court of
Appeals.

The only question is as to the true contract between the parties at the time of the execution
of the deed Exhibit 1: Kasilag contends that the contract is that set out in the document
Exhibit 1, that is, a mortgage of the improvements of the homestead to secure a loan of one
thousand pesos given to Emiliana Ambrosio; and the latter's heirs, in turn, contend that the
contract is one of absolute sale of the homestead, wherefore, it is null and void. The findings
of the Court of Appeals are as follows:

"The pertinent facts as disclosed by the evidence of record are as follows:

"On August 27, 1918 the deceased, Emiliana Ambrosio, applied for the
land in question as a homestead, now known as lot No. 285 of the
Limay cadastral survey of Bataan, and the application was approved on
September 10, 1919. A final proof was submitted on November 10,
1927 which was approved on October 17, 1929. The homestead patent
No. 16074 and homestead certificate of title No. 325 were issued in
favor of the applicant on June 11, 1931 which were recorded on June
26, 1931 in the office of the register of deeds in accordance with the
provisions of Section 122 of Act No. 496.

"On or about May 16, 1932, the homestead owner Emiliana Ambrosio
offered to sell the property to the defendant and appellee, Marcial
Kasilag. The latter, upon examining her title found that its was a
homestead patent and knew, therefore, that the land subject of the
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patent could not be alienated by express prohibition of law, so here


devised means by which the proposed sale might not appear in any
document and had the patentee, Emiliana Ambrosio, execute mortgage
of the improvements thereon consisting of four mango trees, fruit
bearing; one hundred ten hills of bamboo trees, one thousand and six
boñga trees, with the assessed value of P860, in consideration of the
sum of P1,000 alleged to have been loaned by the said Kasilag to the
said patentee Emiliana Ambrosio. It was expressly stipulated in that
document that the aforementioned amount should be paid within four
and a half years from the date of the instrument (May 16, 1932), the
condition being that if she failed to redeem the alleged mortgage at
the expiration of the stipulated period, she would execute a deed of
absolute sale of the property therein described for the same amount of
the alleged mortgage (P1,000) including all unpaid interest at the rate
of 12 per cent per annum in favor of the alleged mortgagee. It was
further stipulated therein that the said Emiliana should pay all the
taxes and assessment which might become due on the land and
improvements during the term of the agreement and that within thirty
days after the date of the execution thereof she should file a motion
before the Court of First Instance of Bataan requesting the cancellation
of the homestead certificate No. 325 above referred to and the
issuance in lieu thereof of a certificate of title under the provisions of
the Land Registration Act No. 496, as amended by Act No. 3901.

"The lot in question was originally declared for land tax purposes in the
name of the homestead owner, Emiliana Ambrosio, and assessed at
P1,020 in 1933; but on May 22, 1934, the tax declaration was
transferred in the name of the appellee, Marcial Kasilag, and on March
6, 1936 the assessed value was raised to P2,180.

"Emiliana, however, never paid any interest on the alleged loan of


P1,000 or paid taxes on the land since the execution of the contract.

"The evidence further discloses that the appellee entered upon the
actual possession of the land and had been holding the same up to the
present time, having planted various kinds of fruit trees valued
according to him at P5,000, and collected the products thereof for his
own exclusive benefit.

"Construing the contract, Exhibit 1, in the light of all the foregoing


facts and circumstances under which it was executed in relation to the
subsequent acts of the contracting parties, we are led to the
inescapable conclusion that their real intention was to execute an
agreement of absolute sale of the "homestead together with the
improvements thereon. The stipulation concerning an alleged
mortgage in the instrument is a mere devise to circumvent the law
which expressly prohibits the alienation or encumbrance of the
homestead during the period of five years from the date of the
issuance of the homestead patent. (Sec. 116 of Act No. 2874 as
amended by Act No. 3517.)
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"It is inconceivable, and, therefore, we refuse to believe that the


appellee, Marcial Kasilag, being an intelligent man far above the
average, would accept improvements valued at only P860 as security
for the payment of a larger amount of P1,000, the alleged loan. We
entertain no doubt that at the time the execution of the contract,
Exhibit 1, the appellee knew that the homestead owner, Emiliana
Ambrosio, a poor ignorant woman, was badly in need of money and
that she was determined to dispose of and alienate definitely her
homestead, as evidenced by the fact testified to by Gavino Rodriguez
as witness for the said appellee that she actually offered to sell the
land to the latter. He also knew that she would not be able to pay back
to him such a large amount with interest of 12 per cent per annum
because she had no other income except what she would derive from
the homestead. Under such circumstances, there is reason to believe
that she was no longer concerned with the form in which the contract
would be drawn, as long as she could obtain the amount of P1,000
which was agreeable to her as the price of the homestead she offered
to sell to the appellee. This conclusion is supported in part by the
subsequent action of Emiliana in not paying any interest on the alleged
ban of P1,000 or the land taxes thereon since the execution of the
contract and by the action of the appellee in declaring the land for tax
purposes in his own name as owner thereof, notwithstanding that he
had no interest in the land, as he alleged, except in the improvements
only.

"The contract of absolute sale was consummated, because the grantor,


Emiliana, received full payment of the purchase price disguised as a
loan of P1,000 and placed the grantee, Marcial Kasilag, in absolute
possession and control of the land conveyed to him with all the
improvements thereon. The stipulation under article VIII of the
contract, Exhibit 1, to the effect that the grantor 'would execute a deed
of absolute sale of the property herein described for the said amount of
this mortgage including all unpaid interest at the rate of 12 per cent
per annum in favor of the mortgagee,' clearly indicates that there was
nothing left to be done except the execution of the deed of absolute
sale, which is merely a matter of form in contracts of this nature,
which was postponed until after the expiration of four and a half years
because by that time the period of five years within which the property
could not be alienated nor encumbered in any way, as provided by
section 116 of Act No. 2874 as amended by Act No. 3517, supra,
would have already expired. If the real purpose was to mortgage the
improvements only as specified in article IV of the contract, why is it
that in article VIII thereof it was provided that in case of failure to
redeem the alleged mortgage the grantor would be required to execute
a deed of absolute sale of the property described therein for the same
amount of the mortgage in favor of the grantee and not of 'the
improvements only'? It is clear, therefore, that the real contract under
Exhibit 1, was one of absolute sale and not a mortgage with future
sale."
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In other words, although the document Exhibit 1 states that it is a mortgage of the
improvements, with a stipulation regarding a future sale of the land in case of failure to
comply with the mortgage obligations, in reality the true contract between the parties is one
of absolute sale in the light of the circumstances of the case, among them the following:

First. Emiliana Ambrosio offered the sale, not the mortgage, of her homestead to Marcial
Kasilag, and it is a fact found established by the Court of Appeals that she was agreeable to
the sum of one thousand pesos as the price of the sale offered by her. If this is so, it is
unlikely that Kasilag would refuse the offer of sale of the homestead and would accept in lieu
thereof a simple mortgage of the improvements, for the same sum of one thousand pesos;

Second. In the deed it is stipulated that, if at the expiration of the period of four and a half
years, the debtor should fail to redeem the mortgage, she would execute in favor of the
creditor, Marcial Kasilag, a deed of absolute sale not only of the mortgaged improvements
but also of the land for the same amount of the loan of one thousand pesos. This magic
conversion of the mortgage of the improvements into an absolute sale of the land at the
expiration of four and a half years and without any additional consideration can only mean
that the two contracts are one and the same thing, and that the first has been availed of to
go around the legal prohibition. The scheme is very obvious, and to make any attempt to
reconcile it with good faith is simply to fall into it.

The mortgage of the improvements could not have been intended because the supposed loan
which it guaranteed was the same price of the stipulated sale to be later executed, and
further because Kasilag knew, according to the findings of fact of the Court of Appeals, that
Emiliana Ambrosio was a poor and ignorant woman who was not in a position to return the
one thousand pesos;

Third. Kasilag had always considered the contract as one of sale of the land and not as a
mortgage of the improvements, because he put the tax declaration of the land in his name,
paid the corresponding land tax, took possession of the land, received the fruits thereof for
his exclusive use, and introduced thereon permanent improvements, one of them being a
summer house, all of which were valued at about five thousand pesos. It is not an attribute
of a contract of mortgage that the creditor should take possession of the mortgaged
property, or that he should pay the taxes thereon. Kasilag would not spend five thousand
pesos for permanent improvements if he knew that his possession was precarious.

Fourth. In the document it is stipulated that the debtor would pay interest, but she did not
pay any, and the alleged mortgage was not foreclosed thereby, which shows that the
stipulation was nothing but a ruse.

Fifth. The deed Exhibit 1 was drawn by Kasilag, because it is in English, and the other party
is a poor and ignorant woman, wherefore, all doubts and uncertainties arising therefrom
should be resolved against Kasilag. It is to be noted that in this document are phrases
indicative of the real contract between the parties. For instance: in clause IV the word paid
and not loaned is used in referring to the loan of one thousand pesos; and clause IX of the
document states "the foregoing contract of sale".

Under all these circumstances, the irresistible conclusion is that the real contract between
the parties is an absolute sale, and that the contract of mortgage was made to appear in the
document Exhibit 1 for the sole purpose of defeating the legal prohibition. Nevertheless, the

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majority of this Court, brushing aside the findings of fact made by the Court of Appeals
without stating its reasons therefor, holds as to the document Exhibit 1, that "as the terms
thereof are clear and leave no room for doubt, it should be interpreted according to the
literal meaning of its clauses." I have already shown in speaking of the second circumstance,
that the context itself of the document Exhibit 1 discloses strong tokens that the contract
between the parties was one of sale and not of mortgage. Moreover, the rule relied upon by
the majority is only applicable in the absence of any allegation that the document does not
express the real contract between the parties. Under section 285, No. 1, of Act No. 190, a
document, however clear its conditions may be, may and should be rejected when it is
alleged and shown by evidence aliunde that it does not express the true intent of the parties.
We have often considered a document, by its terms a contract of absolute sale, as one of
mortgage because it has been so alleged and established by convincing oral evidence.
(Cuyugan vs. Santos, 34 Phil., 100; Villa vs. Santiago, 38 Phil., 157; Laureano vs. Kilayco,
34 Phil., 148; Cuyugan vs. Santos, 39 Phil., 970; Rodriguez vs. Pamintuan, 37 Phil., 876; see
also Manalo vs. Gueco, 42 Phil., 925; Gatmaitan vs. Nepomuceno, 42 Phil., 295.)

The majority decision does not only pass over the findings of fact made by the Court of
Appeals, but, further, gives weight to certain facts which said court finds not to have been
established. For instance, we have the following passages from the majority decision:

"One year after the execution of the aforequoted deed, that is, in 1933, it came to
pass that Emiliana Ambrosio was unable to pay the stipulated interest as well as
the tax on the land and its improvements. For this reason, she and the petitioner
entered into another verbal contract whereby she conveyed to the latter the
possession of the land on condition that the latter would not collect the interest on
the loan, would attend to the payment of the land tax, would benefit by the fruits
of the land, and would introduce improvements thereon. * * *.

"* * * This stipulation was verbally modified by the same parties after the
expiration of one year, in the sense that the petitioner would take possession of
the land and would benefit by the fruits thereof on condition that he would
condone the payment of interest upon the loan and he would attend to the
payment of the land tax. * * *."

These two paragraphs state as an established fact the supposed verbal contract between the
parties which Kasilag tried to prove by his testimony. However, the Court of Appeals
expressly held: "We believe, however, that the trial court erred in giving probative value to
the testimony of the appellee (Marcial Kasilag) with reference to the alleged verbal
agreement with the deceased, Emiliana Ambrosio, and based thereon the conclusion that the
appellee acted in good faith." (Words in parenthesis are mine.)

Rule 47, paragraph (b), of our Rules, provides expressly that in appeals to this court on
certiorari, "only questions of law may be raised and must be distinctly set forth." And we
have held in various decisions that in passing upon the legal conclusions of the Court of
Appeals, we shall abide by the findings of fact of said court.

I, moreover, find certain ambiguities in the majority decision, for while it states on the one
hand that the verbal contract had for its purpose the "alteration of the mortgage contract
clearly entered into, converting the latter into a contract of antichresis," (underscoring mine)
thereby implying that the mortgage contract was abandoned by the parties and ceased to

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exist, in the dispositive part of its decision, the majority holds that the mortgage of the
improvements is valid and binding, and gives to the respondents the right to "redeem the
mortgage of the improvements by paying to the petitioner within three months the amount
of P1,000 * * *." It, therefore, requires compliance with a contract that has ceased to exist.

While on the one hand the majority states that the aforesaid verbal contract is one of
antichresis and that it is void, on the other hand, it gives force thereto by holding that the
interest on the loan of one thousand pesos is sufficiently "set off by the value of the fruits of
the mortgaged improvements which the petitioner received." And, furthermore, why should
the interest be set off against the fruits of the improvements only and not against those of
the entire land? And if the verbal contract of antichresis is void, why is Kasilag not required
to render an accounting of the fruits of the land received by him which may exceed the total
amount of interest, taxes and even the principal itself?

The majority states that Kasilag, in taking possession of the homestead, receiving its fruits
and introducing improvements thereon, did so under the void contract of antichresis, and did
so in good faith as he was excusably unaware of the legal provision which prohibits the
incumbrance of the homestead within the period of five years. Whether Kasilag was aware or
unaware of the legal prohibition is again a factual question resolved by the Court of Appeals
as follows: "the appellee (Marcial Kasilag) was also aware of these provisions which were
incorporated in the homestead patent shown to him at the beginning of the transaction"
(Words in parenthesis are mine). I do not understand how we can disturb this factual finding.

I found, moreover, that in the majority decision it is ordered that, if the heirs of Emiliana
Ambrosio cannot pay the value of the permanent improvements introduced by Marcial
Kasilag, the latter may have the homestead by paying to them its price in the market. The
improvements were appraised by the trial court at three thousand pesos, and as the heirs of
Emiliana Ambrosio probably inherited nothing from the latter but poverty, they will
eventually be unable to pay the said amount and, in the last analysis, will lose the
homestead of their mother. The practical effect, therefore, of the majority decision is that
the heirs of Emiliana Ambrosio will be deprived of the homestead by virtue of a void
antichretic obligation contracted by her within the period of five years from the granting of
the homestead. And this, at least, is in violation of the spirit of section 116 of the Homestead
Act.

I have other reasons which I need not set out to bring this dissent to a close. But before I
conclude, I should like to state that the Homestead Act has been enacted for the welfare and
protection of the poor. The law gives a needy citizen a piece of land where he may build a
modest house for himself and family and plant what is necessary for subsistence and for the
satisfaction of life's other needs. The right of the citizens to their homes and to the things
necessary for their subsistence is as vital as the right to life itself. They have a right to live
with a certain degree of comfort as become human beings, and the State which looks after
the welfare of the people's happiness is under a duty to safeguard the satisfaction of this
vital right. Moreover, a man with a home and a means of subsistence is a lover of peace and
order and will profess affection for his country, whereas one without a home and in penury is
not only a social parasite but also a dangerous element in the social order. The Homestead
Act at once aims at the promotion of wholesome and happy citizenship and the wiping out of
the germs of social discontent found everywhere.

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Considering the social and economic ends of the Homestead Act, the courts should exercise
supreme care and strict vigilance towards faithful compliance with all its benign provisions
and against the defeat, directly or indirectly, of its highly commendable purposes. And it is
my firm conviction that where, as in the present case, a rich and clever man attempts to
wrest a homestead granted to a poor and ignorant woman, the slightest tokens of illegality
should be enough to move the courts to apply the strong arm of the law.

I dissent from the majority decision and vote for the affirmance of the decision of the Court
of Appeals.

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322 Phil. 6

THIRD DIVISION

[ G.R. No. 104528, January 18, 1996 ]

PHILIPPINE NATIONAL BANK, PETITIONER, VS. OFFICE OF THE


PRESIDENT, HOUSING AND LAND USE REGULATORY BOARD, ALFONSO
MAGLAYA, ANGELINA MAGLAYA P. REYES, JORGE C. BERNARDINO,
CORAZON DE LEON, VICTORIANO ACAYA, FLORENCIA CULTURA, MARIA
CAMPOS, ERNESTO SARMIENTO, SANTIAGO TAMONAN, APOLONIA
TADIAQUE, SIMEON DE LEON, NATIVIDAD J. CRUZ, NATIVIDAD B.
LORESCO, FELICIDAD GARCIA, ANA ANITA TAN, LUCAS SERVILLION,
JOSE NARAWAL, REPRESENTED BY THEIR DULY AUTHORIZED
ATTORNEY-IN-FACT, CORAZON DE LEON AND SPOUSES LEOPOLDO AND
CARMEN SEBASTIAN, RESPONDENTS.

RESOLUTION

PANGANIBAN, J.:

May a buyer of a property at a foreclosure sale dispossess prior purchasers on installment of


individual lots therein, or compel them to pay again for the lots which they previously bought
from the defaulting mortgagor-subdivision developer, on the theory that P.D. 957, "The
Subdivision and Condominium Buyers’ Protective Decree," is not applicable to the mortgage
contract in question, the same having been executed prior to the enactment of P.D. 957?
This is the question confronting the Court in this Petition challenging the Decision dated
March 10, 1992 of the Office of the President of the Philippines in O.P. Case No. 4249, signed
by. the Executive Secretary, Franklin M. Drilon, "by authority of the President."

Private respondents were buyers on installment of subdivision lots from Marikina Village, Inc.
(represented by spouses Antonio and Susana Astudillo). Notwithstanding the land purchase
agreements it executed over said lots, the subdivision developer mortgaged the lots in favor
of the petitioner, Philippine National Bank. Unaware of this mortgage, private respondents
duly complied with their obligations as lot buyers and constructed their houses on the lots in
question.

Subsequently, the subdivision developer defaulted and PNB foreclosed on the mortgage. As
highest bidder at the foreclosure sale, the bank became owner of the lots.

Acting on suits brought by private respondents (which were later consolidated), the HLURB
Office of Appeals, Adjudication and Legal Affairs (OAALA) in a decision rendered on October
28, 1988 ruled that PNB -- without prejudice to seeking relief against Marikina Village, -- Inc.
may collect from private respondents only the "remaining amortizations, in accordance with
the land purchase agreements they had previously entered into with" Marikina Village, Inc.,
and cannot compel private respondents to pay all over again for the lots they had already

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bought from said subdivision developer. On May 2, 1989, the Housing and Land Use
Regulatory Board affirmed this decision. On March 10, 1992, the Office of the President,
invoking P.D. 957, likewise concurred with the HLURB. Hence, the present recourse to this
Court.

Under Revised Administrative Circular No. 1-95, "appeals from judgments or final orders of
the x x x Office of the President x x x may be taken to the Court of Appeals x x x." However,
in order to hasten the resolution of this case, which was deemed submitted for decision three
years ago, the Court resolved to make an exception to the said Circular in the interest of
speedy justice.

Petitioner bank raised the following issues:

1. The Office of the President erred in applying P.D. 957 because said law was
enacted only on July 12, 1976, while the subject mortgage was executed on
December 18, 1975; and

2. Petitioner Bank is not privy to the contracts between private respondents and
mortgagor-subdivision developer, hence, the Office of the President erred in
ordering petitioner Bank to accept private respondents’ remaining amortizations
and issue the corresponding titles after payment thereof.

Normally, pursuant to Article 4 of the Civil Code, "(1)aws shall have no retroactive effect,
unless the contrary is provided." However, it is obvious and indubitable that P.D. 957 was
intended to cover even those real estate mortgages, like the one at issue here, executed
prior to its enactment, and such intent (as succinctly captured in the preamble quoted
below) must be given effect if the laudable purpose of protecting innocent purchasers is to
be achieved:

"WHEREAS, it is the policy of the State to afford its inhabitants the requirements
of decent human settlement and to provide them with ample opportunities for
improving their quality of life;

"WHEREAS, numerous reports reveal that many real estate subdivision owners,
developers, operators, and/or sellers have reneged on their representations and
obligations to provide and maintain properly subdivision roads, drainage,
sewerage, water systems, lighting systems, and other similar basic requirements,
thus endangering the health and safety of home and lot buyers;

"WHEREAS, reports of alarming magnitude also show cases of swindling and


fraudulent manipulations perpetrated by unscrupulous subdivision and
condominium sellers and operators, such as failure to deliver titles to the buyers
or titles free from liens and encumbrances, and to pay real estate taxes, and
fraudulent sales of the same subdivision lots to different innocent purchasers for
value;"[1] (Italics supplied).

While P.D. 957 did not expressly provide for retroactivity in its entirety, yet the same can be
plainly inferred from the, unmistakable intent of the law to protect innocent lot buyers from
scheming subdivision developers. As between these small lot buyers and the gigantic

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financial institutions which the developers deal with, it is obvious that the law -- as an
instrument of social justice -- must favor the weak. Indeed, the petitioner Bank had at its
disposal vast resources with which it could adequately protect its loan activities, and
therefore is presumed to have conducted the usual "due diligence" checking and ascertained
(whether thru ocular inspection or other modes of investigation) the actual status, condition,
utilization and occupancy of the property offered as collateral. It could not have been
unaware that the property had been built on by small lot buyers. On the other hand, private
respondents obviously were powerless to discover the attempt of the land developer to
hypothecate the property being sold to them. It was precisely in order to deal with this kind
of situation that P.D. 957 was enacted, its very essence and intendment being to provide a
protective mantle over helpless citizens who may fall prey to the razzmatazz of what P.D.
957 termed "unscrupulous subdivision and condominium sellers."

The intent of the law, as culled from its preamble and from the situation, circumstances and
condition it sought to remedy, must be enforced. Sutherland, in his well-known treatise on
Statutory Construction (quoted with approval by this Court in an old case of consequence,
Ongsiako vs. Gamboa[2]), says:

"The intent of a statute is the law. If a statute is valid it is to have effect according
to the purpose and intent of the lawmaker. The intent is the vital part, the
essence of the law, and the primary rule of construction is to ascertain and give
effect to the intent. The intention of the legislature in enacting a law is the law
itself, and must be enforced when ascertained, although it may not be consistent
with the strict letter of the statute. Courts will not follow the letter of a statute
when it leads away- from the true intent and purpose of the legislature and to
conclusions inconsistent with the general purpose of the act. Intent is the spirit
which gives life to a legislative enactment. In construing statutes the proper
course is to start out and follow the true intent of the legislature and to adopt that
sense which harmonizes best with the context and promotes in the fullest manner
the apparent policy and, objects of the legislature."[3]

Truly, this Court cannot allow the injustice that will be wrought by a strictly prospective
application of the law. Little people who have toiled for years through blood and tears would
be deprived of their homes through no fault of their own. As the Solicitor General, in his
comment, argues:

"Verily, if P.D. 957 were to exclude from its coverage the aforecited mortgage
contract, the vigorous regulation which PD. 957 seeks to impose on
unconscientious subdivision sellers will be translated into a feeble exercise of
police power just because the iron hand of the State cannot particularly touch
mortgage contracts badged with the fortunate accident of having been constituted
prior to the enactment of P.D. 957. Indeed, it would be illogical in the extreme if
P.D. 957 is to be given full force and effect and yet, the fraudulent practices and
manipulations it seeks to curb in the first instance can nevertheless be liberally
perpetrated precisely because PD. 957 cannot be applied to existing antecedent
mortgage contracts. The legislative intent could not have conceivably permitted a
loophole which all along works to the prejudice of subdivision lot buyers (private
respondents)."[4]

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Likewise noteworthy are certain provisions of P.D. 957, which themselves constitute strong
arguments in favor of the retroactivity of PD. 957 as a whole. These are Sections 20, 21 and
23 thereof, which by their very terms have retroactive effect and will impact upon even those
contracts and transactions entered into prior to PD. 9575 enactment:

"SEC. 20. Time of Completion.-- Every owner or developer shall construct and
provide the facilities, improvements, infrastructures and other forms of
development, including water supply and lighting facilities, which are offered and
indicated in the approved subdivision or condominium plans, brochures,
prospectus, printed matters, letters or in any form of advertisement, within one
year from the date of the issuance of the license for the subdivision or
condominium project or such other period of time as may be fixed by the
Authority.

"SEC. 21. Sales Prior to Decree.-- In cases of subdivision lots or condominium


units sold or disposed of prior to the effectivity of this Decree, it shall be
incumbent upon the owner or developer of the subdivision or condominium
project to complete compliance with his or its obligations as provided in the
preceding section within two years from the date of this Decree unless otherwise
extended by the Authority or unless an adequate performance bond is filed in
accordance with Section 6 hereof.

"Failure of the owner or developer to comply with the obligations under this and
the preceding provisions shall constitute a violation punishable under Section 38
and 39 of this Decree.

"SEC. 23. Non-Forfeiture of Payments.--No installment payment made by a buyer


in a subdivision or condominium project for the lot or unit he contracted to buy
shall be forfeited in favor of the owner or developer when the buyer, after due
notice to the owner or developer, desists from further payment due to the failure
of the owner or developer to develop the subdivision or condominium project
according to the approved plans and within the time limit for complying with the
same. Such buyer may, at his option, be reimbursed the total amount paid
including amortization interests but excluding delinquency interests, with interest
thereon at the legal rate." (Italics supplied)

As for objections about a possible violation of the impairment clause, we find the following
statements of Justice Isagani Cruz enlightening and pertinent to the case at bench:

"Despite the impairment clause, a contract valid at the time of its execution may
be legally modified or even completely invalidated by a subsequent law. If the law
is a proper exercise of the police power, it will prevail over the contract.

"Into each contract are read the provisions of existing law and, always, a
reservation of the police power as long as the agreement deals with a matter
affecting the public welfare. Such a contract, it has been held, suffers a congenital
infirmity, and this is its susceptibility to change by the legislature as a postulate of
the legal order."[5]

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This Court ruled along similar lines in Juarez vs. Court of Appeals[6]:

"The petitioner complains that the retroactive application of the law would violate
the impairment clause. The argument does not impress. The impairment clause is
now no longer inviolate; in fact, there are many who now believe it is an
anachronism in the present-day society. It was quite useful before in protecting
the integrity of private agreements from government meddling, but that was
when such agreements did not affect the community in general. They were indeed
purely private agreements then. Any interference with them at that time was
really an unwarranted intrusion that could properly struck down.

"But things are different now. More and more, the interests of the public have
become involved in what are supposed to be still private agreements, which have
as a result been removed from the protection of the impairment clause. These
agreements have come within the embrace of the police power, that obtrusive
protector of the public interest. It is a ubiquitous policeman indeed. As long as the
contract affects the public welfare one way or another so as to require the
interference of the State, then must the police power be asserted, and prevail,
over the impairment clause."

The decision of the Court of Appeals in Breta and Hamor vs. Lao, et al.[7], penned by then
Court of Appeals Associate Justice Jose A. R. Melo, now a respected member of this Court, is
persuasive, the. factual circumstances therein being of great similarity to the antecedent
facts of the case at bench:

"Protection must be afforded small homeowners who toil and save if only to
purchase on installment a tiny home lot they can call their own. The consuming
dream of every Filipino is to be able to buy a lot, no matter how small, so that he
may somehow build a house. It has, however, been seen of late that these
honest, hard-living individuals are taken advantage of, with the delivery of titles
delayed, the subdivision facilities, including the most essential such as water
installations not completed, or worse yet, as in the instant case, after almost
completing the payments for the property and after constructing a house, the
buyer is suddenly confronted by the stark reality, contrived or otherwise, in which
another person would now appear to be owner.

xxx xxx xxx

"We cannot over emphasize the fact that the BANK cannot barefacedly argue that
simply because the title or titles offered as security were clean of any
encumbrance or lien, that it was thereby relieved of taking any other step to
verify the over-reaching implications should the subdivision be auctioned on
foreclosure. The BANK could not have closed its eyes that it was dealing over a
subdivision where there were already houses constructed. Did it not enter the
mind of the responsible officers of the BANK that there may even be subdivision
residents who have almost completed their installment payments?" (Id., pp. 7 &
9).

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By the foregoing citation, this Court thus adopts by reference the foregoing as part of this
Decision.

The real estate mortgage in the above cited case, although constituted in 1975 and outside
the beneficial aegis of P.D. 957, was struck down by the Court of Appeals which found in
favor of subdivision lot buyers when the rights of the latter clashed with the mortgagee
bank’s right to foreclose the property. The Court of Appeals in that case upheld the decision
of the trial court declaring the real estate mortgage as null and void.

As to the second issue of non-privity, petitioner avers that, in view of the provisions of Article
13 11 of the Civil Code, PNB, being a "total stranger to the land purchase agreement,"
cannot be made to take the developer’s place.

We disagree. P.D. 957 being applicable, Section 18 of said law obliges petitioner Bank to
accept the payment of the remaining unpaid amortizations tendered by private respondents.

"SEC. 18. Mortgages. -- No mortgage on any unit or lot shall be made by the
owner or developer without prior written approval of the Authority. Such approval
shall not be granted unless it is shown that the proceeds of the mortgage loan
shall be used for the development of the condominium or subdivision project and
effective measures have been provided to ensure such utilization. The loan value
of each lot or unit covered by the mortgage shall be determined and the buyer
thereof, if any, shall be notified before the release of the loan. The buyer may, at
his option, pay his installment for the lot or unit directly to the mortgagee who
shall apply the payments to the corresponding mortgage indebtedness secured by
the particular lot or unit being paid for, with a view to enabling said buyer to
obtain title over the lot or unit promptly after full payment thereof." (Italics
supplied)

Privity of contracts as a defense does not apply in this case for the law explicitly grants to
the buyer the option to pay the installment payment for his lot or unit directly to the
mortgagee (petitioner), which is required to apply such payments to reduce the
corresponding portion of the mortgage indebtedness secured by the particular lot or unit
being paid for. And, as stated earlier, this is without prejudice to petitioner Bank’s seeking
relief against the subdivision developer.

Finally, before closing this Resolution, we enjoin petitioner Bank to focus not only on the
strictly legal issues involved in this case but also to take another look at the larger issues
including social justice and the protection of human rights as enshrined in the Constitution;
firstly, because legal issues are raised and decided not in a vacuum but within the context of
existing social, economic and political conditions, law being merely a brick in the up-building
of the social edifice; and secondly, petitioner, being THE state bank, is for all intents and
purposes an instrument for the implementation of state policies so cherished in our
fundamental law. These consideration are obviously far more weighty than the winning of
any particular suit or the acquisition of any specific property. Thus, as the country strives to
move ahead towards economic self-sufficiency and to achieve dreams of "NIC-hood" and
social well-being for the majority of our countrymen, we hold that petitioner Bank, the
premier bank in the country, which has in recent years made record earnings and acquired
an enviable international stature, with branches and subsidiaries in key financial centers

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around the world, should be equally as happy with the disposition of this case as the private
respondents, who were almost deprived and dispossessed of their very homes purchased
through their hard work and with their meager savings.

WHEREFORE, in view of the foregoing considerations, the petition is hereby DENIED,


petitioner having failed to show any REVERSIBLE ERROR or GRAVE ABUSE OF DISCRETION
in the assailed decision. No costs.

SO ORDERED.

Narvasa, C.J. (Chairman), Davide Jr., Melo, and Francisco, JJ., concur.

[1] Preamble, Presidential Decree No. 957.

[2] 2 86 Phil. 50 (April 8, 1950).

[3] Vol. II,Sutherland, Statutory Construction, pp. 693-695.

[4] Comment filed by the Solicitor General on behalf of the public -respondent, p. 9;

[5] Rollo, p. 78.

[6] 6 214 SCRA 475,480 (October 7, 1992).

[7] CA-G.R. No. 58728-R, promulgated on November 11, 1981.

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327 Phil. 521

EN BANC

[ G.R. No. 120295, June 28, 1996 ]

JUAN G. FRIVALDO, PETITIONER, VS. COMMISSION ON ELECTIONS,


AND RAUL R. LEE, RESPONDENTS.

[G.R. NO. 123755. JUNE 28, 1996]

RAUL R. LEE, PETITIONER, VS. COMMISSION ON ELECTIONS AND JUAN


G. FRIVALDO, RESPONDENTS.

DECISION

PANGANIBAN, J.:

The ultimate question posed before this Court in these twin cases is: Who should be declared
the rightful governor of Sorsogon--

(i) Juan G. Frivaldo, who unquestionably obtained the highest number of votes in three
successive elections but who was twice declared by this Court to be disqualified to hold such
office due to his alien citizenship, and who now claims to have re-assumed his lost Philippine
citizenship thru repatriation;

(ii) Raul R. Lee, who was the second placer in the canvass, but who claims that the votes
cast in favor of Frivaldo should be considered void; that the electorate should be deemed to
have intentionally thrown away their ballots; and that legally, he secured the most number of
valid votes; or

(iii) The incumbent Vice-Governor, Oscar G. Deri, who obviously was not voted directly to the
position of governor, but who according to prevailing jurisprudence should take over the said
post inasmuch as, by the ineligibility of Frivaldo, a "permanent vacancy in the contested
office has occurred"?

In ruling for Frivaldo, the Court lays down new doctrines on repatriation,
clarifies/reiterates/amplifies existing jurisprudence on citizenship and elections, and upholds
the superiority of substantial justice over pure legalisms.

G.R. No. 123755.

This is a special civil action under Rules 65 and 58 of the Rules of Court for certiorari and
preliminary injunction to review and annul a Resolution of the respondent Commission on
Elections (Comelec), First Division,[1] promulgated on December 19,1995[2] and another

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Resolution of the Comelec en bane promulgated February 23, 1996[3] denying petitioner's
motion for reconsideration.

The Facts

On March 20, 1995, private respondent Juan G. Frivaldo filed his Certificate of Candidacy for
the office of Governor of Sorsogon in the May 8, 1995 elections. On March 23, 1995,
petitioner Raul R. Lee, another candidate, filed a petition[4] with the Comelec docketed as
SPA No. 95-028 praying that Frivaldo "be disqualified from seeking or holding any public
office or position by reason of not yet being a citizen of the Philippines," and that his
Certificate of Candidacy be cancelled. On May 1, 1995, the Second Division of the Comelec
promulgated a Resolution[5] granting the petition with the following disposition:[6]

"WHEREFORE, this Division resolves to GRANT the petition and declares that
respondent is DISQUALIFIED to run for the Office of Governor of Sorsogon on the
ground that he is NOT a citizen of the Philippines. Accordingly, respondent's
certificate of candidacy is cancelled."

The Motion for Reconsideration filed by Frivaldo remained unacted upon until after the May 8,
1995 elections. So, his candidacy continued and he was voted for during the elections held
on said date. On May 11, 1995, the Comelec en banc[7] affirmed the aforementioned
Resolution of the Second Division.

The Provincial Board of Canvassers completed the canvass of the election returns and a
Certificate of Votes[8].dated May 27, 1995 was issued showing the following votes obtained
by the candidates for the position of Governor of Sorsogon:

Antonio H. Escudero, Jr. 51,060


Juan G. Frivaldo 73,440
RaulR.Lee 53,304
Isagani P. Ocampo 1,925

On June 9, 1995, Lee filed in said SPA No. 95-028, a (supplemental) petition[9] praying for
his proclamation as the duly-elected Governor of Sorsogon.

In an order[10] dated June 21, 1995, but promulgated according to the petition "only on June
29, 1995," the Comelec en bane directed "the Provincial Board of Canvassers of Sorsogon to
reconvene for the purpose of proclaiming candidate Raul Lee as the winning gubernatorial
candidate in the province of Sorsogon on June 29,1995 x x x." Accordingly, at 8:30 in the
evening of June 30,1995, Lee was proclaimed governor of Sorsogon.

On July 6, 1995, Frivaldo filed with the Comelec a new petition,[11] docketed as SPC No. 95-
317, praying for the annulment of the June 30, 1995 proclamation of Lee and for his own

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proclamation. He alleged that on June 30, 1995, at 2:00 in the afternoon, he took his oath of
allegiance as a citizen of the Philippines after "his petition for repatriation under P.D. 725
which he filed with the Special Committee on Naturalization in September 1994 had been
granted." As such, when "the said order (dated June 21, 1995) (of the Comelec) x x x was
released and received by Frivaldo on June 30, 1995 at 5:30 o'clock in the evening, there was
no more legal impediment to the proclamation (of Frivaldo) as governor x x x." In the
alternative, he averred that pursuant to the two cases of Labo vs. Comelec,[12] the Vice-
Governor-- not Lee -- should occupy said position of governor.

On December 19, 1995, the Comelec First Division promulgated the herein assailed
Resolution[13] holding that Lee, "not having garnered the highest number of votes," was not
legally entitled to be proclaimed as duly-elected governor; and that Frivaldo, "having
garnered the highest number of votes, and xxx having reacquired his Filipino citizenship by
repatriation on June 30, 1995 under the provisions of Presidential Decree No. 725 xxx (is)
qualified to hold the office of governor of Sorsogon"; thus:

"PREMISES CONSIDERED, the Commission (First Division), therefore RESOLVES


to GRANT the Petition.

Consistent with the decisions of the Supreme Court, the proclamation of Raul R.
Lee as Governor of Sorsogon is hereby ordered annulled, being contrary to law,
he not having garnered the highest number of votes to warrant his proclamation.

Upon the finality of the annulment of the proclamation of Raul R. Lee, the
Provincial Board of Canvassers is directed to immediately reconvene and, on the
basis of the completed canvass, proclaim petitioner Juan G. Frivaldo as the duly
elected Governor of Sorsogon having garnered the highest number of votes, and
he having reacquired his Filipino citizenship by repatriation on June 30,1995
under the provisions of Presidential Decree No. 725 and, thus, qualified to hold
the office of Governor of Sorsogon.

Conformably with Section 260 of the Omnibus Election Code (B.P. Blg. 881), the
Clerk of the Commission is directed to notify His Excellency the President of the
Philippines, and the Secretary of the Sangguniang Panlalawigan of the Province of
Sorsogon of this resolution immediately upon the due implementation thereof."

On December 26,1995, Lee filed a motion for reconsideration which was denied
by the Comelec en banc in its Resolution[14] promulgated on February 23, 1996.
On February 26, 1996, the present petition was filed. Acting on the prayer for a
temporary restraining order, this Court issued on February 27, 1996 a Resolution
which inter alia directed the parties "to maintain the status quo prevailing prior to
the filing of this petition."

The Issues in G.R. No. 123755

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Petitioner Lee's "position on the matter at hand briefly be capsulized in the following
propositions":[15]

"First - The initiatory petition below was so far insufficient in form and substance
to warrant the exercise by the COMELEC of its jurisdiction with the result that, in
effect, the COMELEC acted without jurisdiction in taking cognizance of and
deciding said petition;

Second- The judicially declared disqualification of respondent was a continuing


condition and rendered him ineligible to run for, to be elected to and to hold the
Office of Governor;

Third - The alleged repatriation of respondent was neither valid nor is the effect
thereof retroactive as to cure his ineligibility and qualify him to hold the Office of
Governor; and

Fourth - Correctly read and applied, the Labo Doctrine fully supports the validity
of petitioner's proclamation as duly elected Governor of Sorsogon."

G.R. No. 120295

This is a petition to annul three Resolutions of the respondent Comelec, the first two of which
are also at issue in G.R. No. 123755, as follows:

1. Resolution[16] of the Second Division, promulgated on May 1, 1995,


disqualifying Frivaldo from running for governor of Sorsogon in the May 8, 1995
elections "on the ground that he is not a citizen of the Philippines";

2. Resolution[17] of the Comelec en banc, promulgated on May 11, 1995; and

3. Resolution[18] of the Comelec en banc, promulgated also on May 11, 1995


suspending the proclamation of, among others, Frivaldo.

The Facts and the Issue

The facts of this case are essentially the same as those in G.R. No. 123755. However,
Frivaldo assails the above-mentioned resolutions on a different ground: that under Section
78 of the Omnibus Election Code, which is reproduced hereinunder:

"Section 78. Petition to deny due course or to cancel a certificate of candidacy.-- A


verified petition seeking to deny due course or to cancel a certificate of candidacy
may be filed by any person exclusively on the ground that any material

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representation contained therein as required under Section 74 hereof is false. The


petition may be filed at any time not later than twenty-five days from the time of
the filing of the certificate of candidacy and shall be decided, after notice and
hearing, not later than fifteen days before the election." (Italics supplied.)

the Comelec had no jurisdiction to issue said Resolutions because they were not rendered
"within the period allowed by law," i.e., "not later than fifteen days before the election."

Otherwise stated, Frivaldo contends that the failure of the Comelec to act on the petition for
disqualification within the period of fifteen days prior to the election as provided by law is a
jurisdictional defect which renders the said Resolutions null and void.

By Resolution on March 12, 1996, the Court consolidated G.R. Nos. 120295 and 123755
since they are intimately related in their factual environment and are identical in the ultimate
question raised, viz., who should occupy the position of governor of the province of
Sorsogon.

On March 19, 1995, the Court heard oral argument from the parties and required them
thereafter to file simultaneously their respective memoranda.

The Consolidated Issues

From the foregoing submissions, the consolidated issues may be restated as follows:

1. Was the repatriation of Frivaldo valid and legal? If so, did it seasonably cure his
lack of citizenship as to qualify him to be proclaimed and to hold the Office of
Governor? If not, may it be given retroactive effect? If so, from when?

2. Is Frivaldo's "judicially declared" disqualification for lack of Filipino citizenship a


continuing bar to his eligibility to run for, be elected to or hold the governorship of
Sorsogon?

3. Did the respondent Comelec have jurisdiction over the initiatory petition in SPC
No. 95-317 considering that : said petition is not "a pre-proclamation case, an
election protest or a quo warranto case"?

4. Was the proclamation of Lee, a runner-up in the election, valid and legal in
light of existing jurisprudence?

5. Did the respondent Commission on Elections exceed its jurisdiction in


promulgating the assailed Resolutions, all of which prevented Frivaldo from
assuming the governorship of Sorsogon, considering that they were not rendered
within ( the period referred to in Section 78 of the Omnibus Election Code, viz.,
"not later than fifteen days before the elections"?

The First Issue: Frivaldo's Repatriation

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The validity and effectivity of Frivaldo's repatriation is the lis mota, the threshold legal issue
in this case. All the other matters raised are secondary to this.

The Local Government Code of 1991[19] expressly requires Philippine citizenship as a


qualification for elective local officials, including that of provincial governor, thus:

"Sec. 39. Qualifications.--(a) An elective local official must be a citizen of the


Philippines; a registered voter in the barangay, municipality, city, or province or, in
the case of a member of the sangguniang panlalawigan, sangguniang panlungsod,
or sangguniang bayan, the district where he intends to be elected; a resident
therein for at least one (1) year immediately preceding the day of the election;
and able to read and write Filipino or any other local language or dialect.

(b) Candidates for the position of governor, vice governor or member of the
sangguniang panlalawigan, or mayor, vice mayor or member of the sangguniang
panlungsod of highly urbanized cities must be at least twenty-three (23) years of
age on election day.

xxx xxx xxx

Inasmuch as Frivaldo had been declared by this Court[20] as a non-citizen, it is therefore


incumbent upon him to show that he has reacquired citizenship; in fine, that he possesses
the qualifications prescribed under the said statute (R. A. 7160).

Under Philippine law,[21] citizenship may be reacquired by direct act of Congress, by


naturalization or by repatriation. Frivaldo told this Court in G.R. No. 104654[22] and during
the oral argument in this case that he tried to resume his citizenship by direct act of
Congress, but that the bill allowing him to do so "failed to materialize, notwithstanding the
endorsement of several members of the House of Representatives" due, according to him, to
the "maneuvers of his political rivals." In the same case, his attempt at naturalization was
rejected by this Court because of jurisdictional, substantial and procedural defects.

Despite his lack of Philippine citizenship, Frivaldo was overwhelmingly elected governor by
the electorate of Sorsogon, with a margin of 27,000 votes in the 1988 elections, 57,000 in
1992, and 20,000 in 1995 over the same opponent Raul Lee. Twice, he was judicially
declared a non-Filipino and thus twice disqualified from holding and discharging his popular
mandate. Now, he comes to us a third time, with a fresh vote from the people of Sorsogon
and a favorable decision from the Commission on Elections to boot. Moreover, he now boasts
of having successfully passed through the third and last mode of reacquiring citizenship: by
repatriation under P.D. No. 725, with no less than the Solicitor General himself, who was the
prime opposing counsel in the previous cases he lost, this time, as counsel for co-respondent
Comelec, arguing the validity of his cause (in addition to his able private counsel Sixto S.
Brillantes, Jr.). That he took his oath of allegiance under the provisions of said Decree at
2:00 p.m. on June 30, 1995 is not disputed. Hence, he insists that he--not Lee--should have

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been proclaimed as the duly-elected governor of Sorsogon when the Provincial Board of
Canvassers met at 8:30 p.m. on the said date since, clearly and unquestionably, he garnered
the highest number of votes in the elections and since at that time, he already reacquired his
citizenship.

En contrario, Lee argues that Frivaldo's repatriation is tainted ; with serious defects, which
we shall now discuss in seriatim.

First, Lee tells us that P.D. No. 725 had "been effectively repealed," asserting that "then
President Corazon Aquino exercising legislative powers under the Transitory Provisions of the
1987 Constitution, forbade the grant of citizenship by Presidential Decree or Executive
Issuances as the same poses a serious and contentious issue of policy which the present
government, in the exercise of prudence and sound discretion, should best leave to the
judgment of the first Congress under the 1987 Constitution," adding that in her
memorandum dated March 27,1987 to the members of the Special Committee on
Naturalization constituted for purposes of Presidential Decree No. 725, President Aquino
directed them "to cease and desist from undertaking any and all proceedings within your
functional area of responsibility as defined under Letter of Instructions (LOI) No. 270 dated
April 11, 1975, as amended."[23]

This memorandum dated March 27, 198724 cannot by any stretch of legal hermeneutics be
construed as a law sanctioning or authorizing a repeal of P.D. No. 725. Laws are repealed
only by subsequent ones25 and a repeal may be express or implied. It is obvious that no
express repeal was made because then President Aquino in her memorandum-- based on the
copy furnished us by Lee-- did not categorically and/or impliedly state that P.D. 725 was
being repealed or was being rendered without any legal effect. In fact, she did not even
mention it specifically by its number or text. On the other hand, it is a basic rule of statutory
construction that repeals by implication are not favored. An implied repeal will not be allowed
"unless it is convincingly and unambiguously demonstrated that the two laws are clearly
repugnant and patently inconsistent that they cannot co-exist."[26]

The memorandum of then President Aquino cannot even be regarded as a legislative


enactment, for not every pronouncement of the Chief Executive even under the Transitory
Provisions of the 1987 Constitution can nor should be regarded as an exercise of her law-
making powers. At best, it could be treated as an executive policy addressed to the Special
Committee to halt the acceptance and processing of applications for repatriation pending
whatever "judgment the first Congress under the 1987 Constitution" might make. In other
words, the former President did not repeal P.D. 725 but left it to the first Congress--once
created--to deal with the matter. If she had intended to repeal such law, she should have
unequivocally said so instead of referring the matter to Congress. The fact is she carefully
couched her presidential issuance in terms that clearly indicated the intention of "the present
government, in the exercise of prudence and sound discretion" to leave the matter of repeal
to the new Congress. Any other interpretation of the said Presidential Memorandum, such as
is now being proffered to the Court by Lee, would visit unmitigated violence not only upon
statutory construction but on common sense as well.

Second. Lee also argues that "serious congenital irregularities flawed the repatriation
proceedings," asserting that Frivaldo's application therefor was "filed on June 29, 1995 x x x

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(and) was approved in just one day or on June 30, 1995 x x x," which "prevented a judicious
review and evaluation of the merits thereof." Frivaldo counters that he filed his application
for repatriation with the Office of the President in Malacanang Palace on August 17, 1994.
This is confirmed by the Solicitor General. However, the Special Committee was reactivated
only on June 8, 1995, when presumably the said Committee started processing his
application. On June 29, 1995, he filled up and re-submitted the FORM that the Committee
required. Under these circumstances, it could not be said that there was "indecent haste" in
the processing of his application.

Anent Lee's charge that the "sudden reconstitution of the Special Committee on
Naturalization was intended solely for the personal interest of respondent,"[27] the Solicitor
General explained during the oral argument on March 19, 1996 that such allegation is simply
baseless as there were many others who applied and were considered for repatriation, a list
of whom was submitted by him to this Court, through a Manifestation[28] filed on April 3,
1996.

On the basis of the parties' submissions, we are convinced that the presumption of regularity
in the performance of official duty and the presumption of legality in the repatriation of
Frivaldo have not been successfully rebutted by Lee. The mere fact that the proceedings
were speeded up is by itself not a ground to conclude that such proceedings were necessarily
tainted. After all, the requirements of repatriation under P.D. No. 725 are not difficult to
comply with, nor are they tedious and cumbersome. In fact, P.D. 725[29] itself requires very
little of an applicant, and even the rules and regulations to implement the said decree were
left to the Special Committee to promulgate. This is not unusual since, unlike in
naturalization where an alien covets a first-time entry into Philippine political life, in
repatriation the applicant is a former natural-born Filipino who is merely seeking to reacquire
his previous citizenship. In the case of Frivaldo, he was undoubtedly a natural-born citizen
who openly and faithfully served his country and his province prior to his naturalization in the
United States -- a naturalization he insists was made necessary only to escape the iron
clutches of a dictatorship he abhorred and could not in conscience embrace -- and who, after
the fall of the dictator and the re-establishment of democratic space, wasted no time in
returning to his country of birth to offer once more his talent and services to his people.

So too, the fact that ten other persons, as certified to by the Solicitor General, were granted
repatriation argues convincingly and conclusively against the existence of favoritism
vehemently posited by Raul Lee. At any rate, any contest on the legality of Frivaldo's
repatriation should have been pursued before the Committee itself, and, failing there, in the
Office of the President, pursuant to the doctrine of exhaustion of administrative remedies.

Third. Lee further contends that assuming the assailed repatriation to be valid, nevertheless
it could only be effective as at 2:00 p.m. of June 30, 1995 whereas the citizenship
qualification prescribed by the Local Government Code "must exist on the date of his
election, if not when the certificate of candidacy is filed," citing our decision in G.R.
104654[30] which held that "both the Local Government Code and the Constitution require
that only Philippine citizens can run and be elected to Public office" Obviously, however, this
was a mere obiter as the only issue in said case was whether Frivaldo's naturalization was
valid or not -- and NOT the effective date thereof. Since the Court held his naturalization to
be invalid, then the issue of when an aspirant for public office should be a citizen was NOT
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resolved at all by the Court. Which question we shall now directly rule on.

Under Sec. 39 of the Local Government Code, "(a)n elective local official must be:

* a citizen of the Philippines;

* a registered voter in the barangay, municipality, city, or province x x x where he


intends to be elected;

* a resident therein for at least one (1) year immediately preceding the day of the
election;

* able to read and write Filipino or any other local language or dialect."

* In addition, "candidates for the position of governor x x x must be at least


twenty-three (23) years of age on election day."

From the above, it will be noted that the law does not specify any particular date or time
when the candidate must possess citizenship, unlike that for residence (which must consist
of at least one year's residency immediately preceding the day of election) and age (at least
twenty three years of age on election day).

Philippine citizenship is an indispensable requirement for holding an elective public office,[31]


and the purpose of the citizenship qualification is none other than to ensure that no alien,
i.e., no person owing allegiance to another nation, shall govern our people and our country
or a unit of territory thereof. Now, an official begins to govern or to discharge his functions
only upon his proclamation and on the day the law mandates his term of office to begin.
Since Frivaldo re-assumed his citizenship on June 30, 1995--the very day[32] the term of
office of governor (and other elective officials) began--he was therefore already qualified to
be proclaimed, to hold such office and to discharge the functions and responsibilities thereof
as of said date. In short, at that time, he was already qualified to govern his native
Sorsogon. This is the liberal interpretation that should give spirit, life and meaning to our law
on qualifications consistent with the purpose for which such law was enacted. So too, even
from a literal (as distinguished from liberal) construction, it should be noted that Section 39
of the Local Government Code speaks of "Qualifications" of "ELECTIVE OFFICIALS," not of
candidates. Why then should such qualification be required at the time of election or at the
time of the filing of the certificates of candidacies, as Lee insists? Literally, such qualifications
-- unless otherwise expressly conditioned, as in the case of age and residence -- should thus
be possessed when the "elective [or elected] official" begins to govern, i.e., at the time he is
proclaimed and at the start of his term -- in this case, on June 30, 1995. Paraphrasing this
Court's ruling in Vasquez vs. Giapand Li Seng Giap & Sons,[33] if the purpose of the
citizenship requirement is to ensure that our people and country do not end up being
governed by aliens, i.e., persons owing allegiance to another nation, that aim or purpose
would not be thwarted but instead achieved by construing the citizenship qualification as
applying to the time of proclamation of the elected official and at the start of his term.

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But perhaps the more difficult objection was the one raised during the oral argument[34] to
the effect that the citizenship qualification should be possessed at the time the candidate (or
for that matter the elected official) registered as a voter. After all, Section 39, apart from
requiring the official to be a citizen, also specifies as another item of qualification, that he be
a "registered voter." And, under the law[35] a "voter" must be a citizen of the Philippines. So
therefore, Frivaldo could not have been a voter--much less a validly registered one -- if he
was not a citizen at the time of such registration.

The answer to this problem again lies in discerning the purpose of the requirement. If the
law intended the citizenship qualification to be possessed prior to election consistent with the
requirement of being a registered voter, then it would not have made citizenship a SEPARATE
qualification. The law abhors a redundancy. It therefore stands to reason that the law
intended CITIZENSHIP to be a qualification distinct from being a VOTER, even if being a
voter presumes being a citizen first. It also stands to reason that the voter requirement was
included as another qualification (aside from "citizenship"), not to reiterate the need for
nationality but to require that the official be registered as a voter IN THE AREA OR
TERRITORY he seeks to govern, i.e., the law states: "a registered voter in the barangay,
municipality, city, or province x x x where he intends to be elected." It should be emphasized
that the Local Government Code requires an elective official to be a registered voter. It does
not require him to vote actually. Hence, registration--not the actual voting--is the core of this
"qualification." In other words, the law's purpose in this second requirement is to ensure that
the prospective official is actually registered in the area he seeks to govern--and not
anywhere else.

Before this Court, Frivaldo has repeatedly emphasized--and Lee has not disputed--that he
"was and is a registered voter of Sorsogon, and his registration as a voter has been
sustained as valid by judicial declaration x x x In fact, he cast his vote in his precinct on May
8, 1995."[36]

So too, during the oral argument, his counsel stead-fastly maintained that "Mr. Frivaldo has
always been a registered voter of Sorsogon. He has voted in 1987,1988,1992, then he voted
again in 1995. In fact, his eligibility as a voter was questioned, but the court dismissed (sic)
his eligibility as a voter and he was allowed to vote as in fact, he voted in all the previous
elections including on May 8,1995.[37]

It is thus clear that Frivaldo is a registered voter in the province where he intended to be
elected.

There is yet another reason why the prime issue of citizenship should be reckoned from the
date of proclamation, not necessarily the date of election or date of filing of the certificate of
candidacy. Section 253 of the Omnibus Election Code[38] gives any voter, presumably
including the defeated candidate, the opportunity to question the ELIGIBILITY (or the
disloyalty) of a candidate. This is the only provision of the Code that authorizes a remedy on
how to contest before the Comelec an incumbent's ineligibility arising from failure to meet
the qualifications enumerated under Sec. 39 of the Local Government Code. Such remedy of
Quo Warranto can be availed of "within ten days after proclamation" of the winning
candidate. Hence, it is only at such time that the issue of ineligibility may be taken
cognizance of by the Commission. And since, at the very moment of Lee's proclamation
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(8:30 p.m., June 30, 1995), Juan G. Frivaldo was already and indubitably a citizen, having
taken his oath of allegiance earlier in the afternoon of the same day, then he should have
been the candidate proclaimed as he unquestionably garnered the highest number of votes
in the immediately preceding elections and such oath had already cured his previous
"judicially-declared" alienage. Hence, at such time, he was no longer ineligible.

But to remove all doubts on this important issue, we also hold that the repatriation of
Frivaldo RETRO ACTED to the date of the filing of his application on August 17,1994.

It is true that under the Civil Code of the Philippines,[39] "(l)aws shall have no retroactive
effect, unless the contrary is provided." But there are settled exceptions[40] to this general
rule, such as when the statute is CURATIVE or REMEDIAL in nature or when it CREATES NEW
RIGHTS.

According to Tolentino,[41] curative statutes are those which undertake to cure errors and
irregularities, thereby validating judicial or administrative proceedings, acts of public officers,
or private deeds and contracts which otherwise would not produce their intended
consequences by reason of some statutory disability or failure to comply with some technical
requirement. They operate on conditions already existing, and are necessarily retroactive in
operation. Agpalo,[42] on the other hand, says that curative statutes are "healing acts x x x
curing defects and adding to the means of enforcing existing obligations x x x (and) are
intended to supply defects, abridge superfluities in existing laws, and curb certain evils x x x
By their very nature, curative statutes are retroactive xxx (and) reach back to past events to
correct errors or irregularities and to render valid and effective attempted acts which would
be otherwise ineffective for the purpose the parties intended."

On the other hand, remedial or procedural laws, i.e., those statutes relating to remedies or
modes of procedure, which do not create new or take away vested rights, but only operate in
furtherance of the remedy or confirmation of such rights, ordinarily do not come within the
legal meaning of a retrospective law, nor within the general rule against the retrospective
operation of statutes.[43]

A reading of P.D. 725 immediately shows that it creates a new right, and also provides for a
new remedy, thereby filling certain voids in our laws. Thus, in its preamble, P.D. 725
expressly recognizes the plight of "many Filipino women (who) had lost their Philippine
citizenship by marriage to aliens" and who could not, under the existing law (C. A. No. 63, as
amended) avail of repatriation until "after the death of their husbands or the termination of
their marital status" and who could neither be benefitted by the 1973 Constitution's new
provision allowing "a Filipino woman who marries an alien to retain her Philippine citizenship
xxx" because "such provision of the new Constitution does not apply to Filipino women who
had married aliens before said constitution took effect." Thus, P.D. 725 granted a new right
to these women--the right to re-acquire Filipino citizenship even during their marital
coverture, which right did not exist prior to P.D. 725. On the other hand, said statute also
provided a new remedy and a new right in favor of other "natural born Filipinos who (had)
lost their Philippine citizenship but now desire to re-acquire Philippine citizenship," because
prior to the promulgation of P.D. 725 such former Filipinos would have had to undergo the
tedious and cumbersome process of naturalization, but with the advent of P.D. 725 they
could now re-acquire their Philippine citizenship under the simplified procedure of
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repatriation.

The Solicitor General[44] argues:

"By their very nature, curative statutes are retroactive, (DBP vs. CA, 96 SCRA
342), since they are intended to supply defects, abridge superfluities in existing
laws (Del Castillo vs. Securities and Exchange Commission, 96 Phil. 119) and curb
certain evils (Santos vs. Duata, 14 SCRA 1041).

In this case, P.D. No. 725 was enacted to cure the defect in the existing
naturalization law, specifically C. A. No. 63 wherein married Filipino women are
allowed to repatriate only upon the death of their husbands, and natural-born
Filipinos who lost their citizenship by naturalization and other causes faced the
difficulty of undergoing the rigid procedures of C.A. 63 for reacquisition of Filipino
citizenship by naturalization.

Presidential Decree No. 725 provided a remedy for the aforementioned legal
aberrations and thus its provisions are considered essentially remedial and
curative."

In light of the foregoing, and prescinding from the wording of the preamble, it is unarguable
that the legislative intent was precisely to give the statute retroactive operation. "(A)
retrospective operation is given to a statute or amendment where the intent that it should so
operate clearly appears from a consideration of the act as a whole, or from the terms
thereof."[45] It is obvious to the Court that the statute was meant to "reach back" to those
persons, events and transactions not otherwise covered by prevailing law and jurisprudence.
And inasmuch as it has been held that citizenship is a political and civil right equally as
important as the freedom of speech, liberty of abode, the right against unreasonable
searches and seizures and other guarantees enshrined in the Bill of Rights, therefore the
legislative intent to give retrospective operation to P.D. 725 must be given the fullest effect
possible. "(I)t has been said that a remedial statute must be so construed as to make it
effect the evident purpose for -which it was enacted, so that if the reason of the statute
extends to past transactions, as well as to those in the future, then it will be so applied
although the statute does not in terms so direct, unless to do so would impair some vested
right or violate some constitutional guaranty."[46] This is all the more true of P.D. 725, which
did not specify any restrictions on or delimit or qualify the right of repatriation granted
therein.

At this point, a valid question may be raised: How can the retroactivity of P.D. 725 benefit
Frivaldo considering that said law was enacted on June 5,1975, while Frivaldo lost his Filipino
citizenship much later, on January 20, 1983, and applied for repatriation even later, on
August 17, 1994?

While it is true that the law was already in effect at the time that Frivaldo became an
American citizen, nevertheless, it is not only the law itself (P.D. 725) which is tobe given
retroactive effect, but even the repatriation granted under said law to Frivaldo on June 30,

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1995 is to be deemed to have retroacted to the date of his application therefor, August 17,
1994. The reason for this is simply that if, as in this case, it was the intent of the legislative
authority that the law should apply to past events -- i.e., situations and transactions existing
even before the law came into being-- in order to benefit the greatest number of former
Filipinos possible thereby enabling them to enjoy and exercise the constitutionally
guaranteed right of citizenship, and such legislative intention is to be given the fullest effect
and expression, then there is all the more reason to have the law apply in a retroactive or
retrospective manner to situations, events and transactions subsequent to the passage of
such law. That is, the repatriation granted to Frivaldo on June 30, 1995 can and should be
made to take effect as of date of his application. As earlier mentioned, there is nothing in the
law that would bar this or would show a contrary intention on the part of the legislative
authority; and there is no showing that damage or prejudice to anyone, or anything unjust
or injurious would result from giving retroactivity to his repatriation. Neither has Lee shown
that there will result the impairment of any contractual obligation, disturbance of any vested
right or breach of some constitutional guaranty.

Being a former Filipino who has served the people repeatedly, Frivaldo deserves a liberal
interpretation of Philippine laws and whatever defects there were in his nationality should
now be deemed mooted by his repatriation.

Another argument for retroactivity to the date of filing is that it would prevent prejudice to
applicants. If P.D. 725 were not to be given retroactive effect, and the Special Committee
decides not to act, i.e., to delay the processing of applications for any substantial length of
time, then the former Filipinos who may be stateless, as Frivaldo--having already renounced
his American citizenship -- was, may be prejudiced for causes outside their control. This
should not be. In case of doubt in the interpretation or application of laws, it is to be
presumed that the law-making body intended right and justice to prevail.[47]

And as experience will show, the Special Committee was able to process, act upon and grant
applications for repatriation within relatively short spans of time after the same were filed.
[48] The fact that such interregna were relatively insignificant minimizes the likelihood of

prejudice to the government as a result of giving retroactivity to repatriation. Besides, to the


mind of the Court, direct prejudice to the government is possible only where a person's
repatriation has the effect of wiping out a liability of his to the government arising in
connection with or as a result of his being an alien, and accruing only during the interregnum
between application and approval, a situation that is not present in the instant case.

And it is but right and just that the mandate of the people, already twice frustrated, should
now prevail. Under the circumstances, there is nothing unjust or iniquitous in treating
Frivaldo's repatriation as having become effective as of the date of his application, i.e., on
August 17, 1994. This being so, all questions about his possession of the nationality
qualification-- whether at the date of proclamation (June 30, 1995) or the date of election
(May 8, 1995) or date of filing his certificate of candidacy (March 20, 1995) would become
moot.

Based on the foregoing, any question regarding Frivaldo's status as a registered voter would
also be deemed settled. Inasmuch as he is considered as having been repatriated--i.e., his
Filipino citizenship restored -- as of August 17, 1994, his previous registration as a voter is

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likewise deemed validated as of said date.

It is not disputed that on January 20, 1983 Frivaldo became an American. Would the
retroactivity of his repatriation not effectively give him dual citizenship, which under Sec. 40
of the Local Government Code would disqualify him "from running for any elective local
position?"[49] We answer this question in the negative, as there is cogent reason to hold that
Frivaldo was really STATELESS at the time he took said oath of allegiance and even before
that, when he ran for governor in 1988. In his Comment, Frivaldo wrote that he "had long
renounced and had long abandoned his American citizenship--long before May 8, 1995. At
best, Frivaldo was stateless in the interim -- when he abandoned and renounced his US
citizenship but before he was repatriated to his Filipino citizenship."[50]

On this point, we quote from the assailed Resolution dated December 19, 1995:[51]

"By the laws of the United States, petitioner Frivaldo lost his American citizenship
when he took his oath of allegiance to the Philippine Government when he ran for
Governor in 1988, in 1992, and in 1995. Every certificate of candidacy contains an
oath of allegiance to the Philippine Government."

These factual findings that Frivaldo has lost his foreign nationality long before the elections
of 1995 have not been effectively rebutted by Lee. Furthermore, it is basic that such findings
of the Commission are conclusive upon this Court, absent any showing of capriciousness or
arbitrariness or abuse.[52]

The Second Issue: Is Lack of Citizenship a Continuing Disqualification?

Lee contends that the May 1,1995 Resolution53 of the Comelec Second Division in SPA No.
95-028 as affirmed in toto by Comelec En Banc in its Resolution of May 11, 1995 "became
final and executory after five (5) days or on May 17,1995, no restraining order having been
issued by this Honorable Court."[54] Hence, before Lee "was proclaimed as the elected
governor on June 30, 1995, there was already a final and executory judgment disqualifying"
Frivaldo. Lee adds that this Court's two rulings (which Frivaldo now concedes were legally
"correct") declaring Frivaldo an alien have also become final and executory way before the
1995 elections, and these "judicial pronouncements of his political status as an American
citizen absolutely and for all time disqualified (him) from running for, and holding any public
office in the Philippines."

We do not agree.

It should be noted that our first ruling in G.R. No. 87193 disqualifying Frivaldo was rendered
in connection with the 1988 elections while that in G.R. No. 104654 was in connection with
the 1992 elections. That he was disqualified for such elections is final and can no longer be
changed. In the words of the respondent Commission (Second Division) in its assailed
Resolution:[55]

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"The records show that the Honorable Supreme Court had decided that Frivaldo
was not a Filipino citizen and thus disqualified for the purpose of the 1988 and
1992 elections. However, there is no record of any 'final judgment' of the
disqualification of Frivaldo as a candidate for the May 8, 1995 elections. What the
Commission said in its Order of June 21, 1995 (implemented on June 30, 1995),
directing the proclamation of Raul R. Lee, was that Frivaldo was not a Filipino
citizen 'having been declared by the Supreme Court in its Order dated March 25,
1995, not a citizen of the Philippines.' This declaration of the Supreme Court,
however, was in connection with the 1992 elections."

Indeed, decisions declaring the acquisition or denial of citizenship cannot govern a person's
future status with finality. This is because a person may subsequently reacquire, or for that
matter lose, his citizenship under any of the modes recognized by law for the purpose.
Hence, in Lee vs. Commissioner of Immigration,[56] we held:

"Everytime the citizenship of a person is material or indispensable in a judicial or


administrative case, whatever the corresponding court or administrative authority
decides therein as to such citizenship is generally not considered res judicata,
hence it has to be threshed out again and again, as the occasion demands."

The Third Issue: Comelec's Jurisdiction


Over The Petition in SPC No. 95-317

Lee also avers that respondent Comelec had no jurisdiction to entertain the petition in SPC
No. 95-317 because the only "possible types of proceedings that may be entertained by the
Comelec are a pre-proclamation case, an election protest or a quo warranto case." Again,
Lee reminds us that he was proclaimed on June 30, 1995 but that Frivaldo filed SPC No. 95-
317 questioning his (Lee's) proclamation only on July 6, 1995 -- "beyond the 5-day
reglementary period." Hence, according to him, Frivaldo's "recourse was to file either an
election protest or a quo warranto action."

This argument is not meritorious. The Constitution[57] has given the Comelec ample power
to "exercise exclusive original jurisdiction over all contests relating to the elections, returns
and qualifications of all elective x x x provincial x x x officials." Instead of dwelling at length
on the various petitions that Comelec, in the exercise of its constitutional prerogatives, may
entertain, suffice

it to say that this Court has invariably recognized the Commission's authority to hear and
decide petitions for annulment of proclamations —of which SPC No. 95-317 obviously is one.
[58] Thus, in Mentang vs. COMELEC,[59] we ruled:

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"The petitioner argues that after proclamation and assumption of office, a pre-
proclamation controversy is no longer viable. Indeed, we are aware of cases
holding that pre-proclamation controversies may no longer be entertained by the
COMELEC after the winning candidate has been proclaimed, (citing Gallardo vs.
Rimando, 187 SCRA 463; Salvacion vs. COMELEC, 170 SCRA 513; Casimiro vs.
COMELEC, 171 SCRA 468.) This rule, however, is premised on an assumption that
the proclamation is no proclamation at all and the proclaimed candidate's
assumption of office cannot deprive the COMELEC of the power to make such
declaration of nullity. (citing Aguam vs. COMELEC, 23 SCRA 883; Agbayani vs.
COMELEC, 186 SCRA 484.)"

The Court however cautioned that such power to annul a proclamation must "be done within
ten (10) days following the proclamation." Inasmuch as Frivaldo's petition was filed only six
(6) days after Lee's proclamation, there is no question that the Comelec correctly acquired
jurisdiction over the same.

The Fourth Issue: Was Lee's Proclamation Valid

Frivaldo assails the validity of the Lee proclamation. We uphold him for the following
reasons:

First. To paraphrase this Court in Labo vs. COMELEC,[60] "the fact remains that he (Lee) was
not the choice of the sovereign will," and in Aquino vs. COMELEC,[61] Lee is "a second placer,
xxx just that, a second placer."

In spite of this, Lee anchors his claim to the governorship on the pronouncement of this
Court in the aforesaid Labo[62] case, as follows:

"The rule would have been different if the electorate fully aware in fact and in law
of a candidate's disqualification so as to bring such awareness within the realm of
notoriety, would nonetheless cast their votes in favor of the ineligible candidate.
In such case, the electorate may be said to have waived the validity and efficacy
of their votes by notoriously misapplying their franchise or throwing away their
votes, in which case, the eligible candidate obtaining the next higher number of
votes may be deemed elected."

But such holding is qualified by the next paragraph, thus:

"But this is not the situation obtaining in the instant dispute. It has not been
shown, and none was alleged, that petitioner Labo was notoriously known as an
ineligible candidate, much less the electorate as having known of such fact. On
the contrary, petitioner Labo was even allowed by no less than the Comelec itself

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in its resolution dated May 10, 1992 to be voted for the office of the city mayor as
its resolution dated May 9,1992 denying due course to petitioner Labo's certificate
of candidacy had not yet become final and subject to the final outcome of this
case."

The last-quoted paragraph in Labo, unfortunately for Lee, is the ruling appropriate in this
case because Frivaldo was in 1995 in an identical situation as Labo was in 1992 when the
Comelec's cancellation of his certificate of candidacy was not yet final on election day as
there was in both cases a pending motion for reconsideration, for which reason Comelec
issued an (omnibus) resolution declaring that Frivaldo (like Labo in 1992) and several others
can still be voted for in the May 8, 1995 election, as in fact, he was.

Furthermore, there has been no sufficient evidence presented to show that the electorate of
Sorsogon was "fully aware in fact and in law" of Frivaldo's alleged disqualification as to "bring
such awareness within the realm of notoriety", in other words, that the voters intentionally
wasted their ballots knowing that, in spite of their voting for him, he was ineligible. If Labo
has any relevance at all, it is that the vice-governor and not Lee--should be proclaimed,
since in losing the election, Lee was, to paraphrase Labo again, "obviously not the choice of
the people" of Sorsogon. This is the emphatic teaching of Labo:

"The rule, therefore, is: the ineligibility of a candidate receiving majority votes
does not entitle the eligible candidate receiving the next highest number of votes
to be declared elected. A minority or defeated candidate cannot be deemed
elected to the office."

Second. As we have earlier declared Frivaldo to have seasonably re-acquired his citizenship
and inasmuch as he obtained the highest number of votes in the 1995 elections, he--not
Lee--should be proclaimed. Hence, Lee's proclamation was patently erroneous and should
now be corrected.

The Fifth Issue: Is Section 78 of the Election Code Mandatory?

In G.R. No. 120295, Frivaldo claims that the assailed Resolution of the Comelec (Second
Division) dated May 1, 1995 and the confirmatory en banc Resolution of May 11, 1995
disqualifying him for want of citizenship should be annulled because they were rendered
beyond the fifteen (15) day period prescribed by Section 78 of the Omnibus Election Code
which reads as follows:

"Section 78. Petition to deny due course or to cancel a certificate of candidacy.-- A


verified petition seeking to deny due course or to cancel a certificate of candidacy
may be filed by any person exclusively on the ground that any material
representation contained therein as required under Section 74 hereof is false. The
petition may be filed at any time not later than twenty-five days from the time of
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the filing of the certificate of candidacy and shall be decided after notice and
hearing, not later than fifteen days before the election" (italics supplied.)

This claim is now moot and academic inasmuch as these resolutions are deemed superseded
by the subsequent ones issued by the Commission (First Division) on December 19, 1995,
affirmed en banc[63] on February 23, 1996, which both upheld his election. At any rate, it is
obvious that Section 78 is merely directory as Section 6 of R.A. No. 6646 authorizes the
Commission to try and decide petitions for disqualifications even after the elections, thus:

"SEC. 6. Effect of Disqualification Case.-- Any candidate who has been declared by
final judgment to be disqualified shall not be voted for, and the votes cast for him
shall not be counted. If for any reason a candidate is not declared by final
judgment before an election to be disqualified and he is voted for and receives the
-winning number of votes in such election, the Court or Commission shall continue
with the trial and hearing of the action, inquiry or protest and, upon motion of the
complainant or any intervenor, may during the pendency thereof order the
suspension of the proclamation of such candidate whenever the evidence of his
guilt is strong." (Italics supplied)

Refutation of Mr. Justice Davide's Dissent

In his dissenting opinion, the esteemed Mr. Justice Hilario G. Davide, Jr. argues that
President Aquino's memorandum dated March 27, 1987 should be viewed as a suspension
(not a repeal, as urged by Lee) of P.D. 725. But whether it decrees a suspension or a repeal
is a purely academic distinction because the said issuance is not a statute that can amend or
abrogate an existing law. The existence and subsistence of P.D. 725 were recognized in the
first Frivaldo case;[64] viz, "(u)nder CA No. 63 as amended by CA No. 473 and P.D. No. 725,
Philippine citizenship maybe reacquired by xxx repatriation" He also contends that by
allowing Frivaldo to register and to remain as a registered voter, the Comelec and in effect
this Court abetted a "mockery" of our two previous judgments declaring him a non-citizen.
We do not see such abetting or mockery. The retroactivity of his repatriation, as discussed
earlier, legally cured whatever defects there may have been in his registration as a voter for
the purpose of the 1995 elections. Such retroactivity did not change his disqualifications in
1988 and 1992, which were the subjects of such previous rulings.

Mr. Justice Davide also believes that Quo Warranto is not the sole remedy to question the
ineligibility of a candidate, citing the Comelec's authority under Section 78 of the Omnibus
Election Code allowing the denial of a certificate of candidacy on the ground of a false
material representation therein as required by Section 74. Citing Loong, he then states his
disagreement with our holding that Section 78 is merely directory. We really have no quarrel.
Our point is that Frivaldo was in error in his claim in G.R. No. 120295 that the Comelec
Resolutions promulgated on May 1, 1995 and May 11, 1995 were invalid because they were
issued "not later than fifteen days before the election" as prescribed by Section 78. In
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dismissing the petition in G.R. No. 120295, we hold that the Comelec did not commit grave
abuse of discretion because "Section 6 of R. A. 6646 authorizes the Comelec to try and
decide disqualifications even after the elections." In spite of his disagreement with us on this
point, i.e., that Section 78 "is merely directory," we note that just like us, Mr. Justice Davide
nonetheless votes to "DISMISS G.R. No. 120295." One other point. Loong, as quoted in the
dissent, teaches that a petition to deny due course under Section 78 must be filed within the
25-day period prescribed therein. The present case however deals with the period during
which the Comelec may decide such petition. And we hold that it may be decided even after
the fifteen day period mentioned in Section 78. Here, we rule that a decision promulgated by
the Comelec even after the elections is valid but Loong held that a petition filed beyond the
25-day period is out of time. There is no inconsistency nor conflict.

Mr. Justice Davide also disagrees with the Court's holding that, given the unique factual
circumstances of Frivaldo, repatriation may be given retroactive effect. He argues that such
retroactivity "dilutes" our holding in the first Frivaldo case. But the first (and even the second
Frivaldo) decision did not directly involve repatriation as a mode of acquiring citizenship. If
we may repeat, there is no question that Frivaldo was not a Filipino for purposes of
determining his qualifications in the 1988 and 1992 elections. That is settled. But his
supervening repatriation has changed his political status--not in 1988 or 1992, but only in
the 1995 elections.

Our learned colleague also disputes our holding that Frivaldo was stateless prior to his
repatriation, saying that "informal renunciation or abandonment is not a ground to lose
American citizenship." Since our courts are charged only with the duty of the determining
who are Philippine nationals, we cannot rule on the legal question of who are or who are not
Americans. It is basic in international law that a State determines ONLY those who are its
own citizens--not who are the citizens of other countries.[65] The issue here is: the Comelec
made a finding of fact that Frivaldo was stateless and such finding has not been shown by
Lee to be arbitrary or whimsical. Thus, following settled case law, such finding is binding and
final.

The dissenting opinion also submits that Lee who lost by chasmic margins to Frivaldo in all
three previous elections, should be declared winner because "Frivaldo's ineligibility for being
an American was publicly known." First, there is absolutely no empirical evidence for such
"public" knowledge. Second, even if there is, such knowledge can be true post facto only of
the last two previous elections. Third, even the Comelec and now this Court were/are still
deliberating on his nationality before, during and after the 1995 elections. How then can
there be such "public" knowledge?

Mr. Justice Davide submits that Section 39 of the Local Government Code refers to the
qualifications of elective local officials, i.e., candidates, and not elected officials, and that the
citizenship qualification [under par. (a) of that section] must be possessed by candidates, not
merely at the commencement of the term, but by election day at the latest. We see it
differently. Section 39, par. (a) thereof speaks of "elective local official" while par. (b) to (f)
refer to "candidates." If the qualifications under par. (a) were intended to apply to
"candidates" and not elected officials, the legislature would have said so, instead of
differentiating par. (a) from the rest of the paragraphs. Secondly, if Congress had meant that
the citizenship qualification should be possessed at election day or prior thereto, it would

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have specifically stated such detail, the same way it did in pars. (b) to (f) for other
qualifications of candidates for governor, mayor, etc.

Mr. Justice Davide also questions the giving of retroactive effect to Frivaldo's repatriation on
the ground, among others, that the law specifically provides that it is only after taking the
oath of allegiance that applicants shall be deemed to have reacquired Philippine citizenship.
We do not question what the provision states. We hold however that the provision should be
understood thus: that after taking the oath of allegiance the applicant is deemed to have
reacquired Philippine citizenship, which reacquisition (or repatriation) is deemed for all
purposes and intents to have retroacted to the date of his application therefor.

In any event, our "so too" argument regarding the literal meaning of the word "elective" in
reference to Section 39 of the Local Government Code, as well as regarding Mr. Justice
Davide's thesis that the very wordings of P.D. 725 suggest non-retroactivity, were already
taken up rather extensively earlier in this Decision.

Mr. Justice Davide caps his paper with a clarion call: "This Court must be the first to uphold
the Rule of Law." We agree -- we must all follow the rule of law. But that is NOT the issue
here. The issue is how should the law be interpreted and applied in this case so it can be
followed, so it can rule!

At balance, the question really boils down to a choice of philosophy and perception of how to
interpret and apply laws relating to elections: literal or liberal; the letter or the spirit; the
naked provision or its ultimate purpose; legal syllogism or substantial justice; in isolation or
in the context of social conditions; harshly against or gently in favor of the voters' obvious
choice. In applying election laws, it would be far better to err in favor of popular sovereignty
than to be right in complex but little understood legalisms. Indeed, to inflict a thrice rejected
candidate upon the electorate of Sorsogon would constitute unmitigated judicial tyranny and
an unacceptable assault upon this Court's conscience.

EPILOGUE

In sum, we rule that the citizenship requirement in the Local Government Code is to be
possessed by an elective official at the latest as of the time he is proclaimed and at the start
of the term of office to which he has been elected. We further hold P.D. No. 725 to be in full
force and effect up to the present, not having been suspended or repealed expressly nor
impliedly at any time, and Frivaldo's repatriation by virtue thereof to have been properly
granted and thus valid and effective. Moreover, by reason of the remedial or curative nature
of the law granting him a new right to resume his political status and the legislative intent
behind it, as well as his unique situation of having been forced to give up his citizenship and
political aspiration as his means of escaping a regime he abhorred, his repatriation is to be
given retroactive effect as of the date of his application therefor, during the pendency of
which he was stateless, he having given ' up his U. S. nationality. Thus, in contemplation of
law, he possessed the vital requirement of Filipino citizenship as of the start of the term of
office of governor, and should have been proclaimed instead of Lee. Furthermore, since his
reacquisition of citizenship retroacted to August 17, 1994, his registration as a voter of
Sorsogon is deemed to have been validated as of said date as well. The foregoing, of course,
are precisely consistent with our holding that lack of the citizenship requirement is not a
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continuing disability or disqualification to run for and hold public office. And once again, we
emphasize herein our previous rulings recognizing the Comelec's authority and jurisdiction to
hear and decide petitions for annulment of proclamations.

This Court has time and again liberally and equitably construed the electoral laws of our
country to give fullest effect to the manifest will of our people,[66] for in case of doubt,
political laws must be interpreted to give life and spirit to the popular mandate freely
expressed through the ballot. Otherwise stated, legal niceties and technicalities cannot stand
in the way of the sovereign will. Consistently, we have held:

"x x x (L)aws governing election contests must be liberally construed to the end
that the will of the people in the choice of public officials may not be defeated by
mere technical objections (citations omitted)."[67]

The law and the courts must accord Frivaldo every possible protection, defense and refuge,
in deference to the popular will. Indeed, this Court has repeatedly stressed the importance of
giving effect to the sovereign will in order to ensure the survival of our democracy. In any
action involving the possibility of a reversal of the popular electoral choice, this Court must
exert utmost effort to resolve the issues in a manner that would give effect to the will of the
majority, for it is merely sound public policy to cause elective offices to be filled by those who
are the choice of the majority. To successfully challenge a winning candidate's qualifications,
the petitioner must clearly demonstrate that the ineligibility is so patently antagonistic[68] to
constitutional and legal principles that overriding such ineligibility and thereby giving effect
to the apparent will of the people, would ultimately create greater prejudice to the very
democratic institutions and juristic traditions that our Constitution and laws so zealously
protect and promote. In this undertaking, Lee has miserably failed.

In Frivaldo's case, it would have been technically easy to find fault with his cause. The Court
could have refused to grant retroactivity to the effects of his repatriation and hold him still
ineligible due to his failure to show his citizenship at the time he registered as a voter before
the 1995 elections. Or, it could have disputed the factual findings of the Comelec that he was
stateless at the time of repatriation and thus hold his consequent dual citizenship as a
disqualification "from running for any elective local position." But the real essence of justice
does not emanate from quibblings over patchwork legal technicality. It proceeds from the
spirit's gut consciousness of the dynamic role of law as a brick in the ultimate development
of the social edifice. Thus, the Court struggled against and eschewed the easy, legalistic,
technical and sometimes harsh anachronisms of the law in order to evoke substantial justice
in the larger social context consistent with Frivaldo's unique situation approximating
venerability in Philippine political life. Concededly, he sought American citizenship only to
escape the clutches of the dictatorship. At this stage, we cannot seriously entertain any
doubt about his loyalty and dedication to this country. At the first opportunity, he returned to
this land, and sought to serve his people once more. The people of Sorsogon overwhelmingly
voted for him three times. He took an oath of allegiance to this Republic every time he filed
his certificate of candidacy and during his failed naturalization bid. And let it not be
overlooked, his demonstrated tenacity and sheer determination to re-assume his nationality

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of birth despite several legal set-backs speak more loudly, in spirit, in fact and in truth than
any legal technicality, of his consuming intention and burning desire to re-embrace his native
Philippines even now at the ripe old age of 81 years. Such loyalty to and love of country as
well as nobility of purpose cannot be lost on this Court of justice and equity. Mortals of lesser
mettle would have given up. After all, Frivaldo was assured of a life of ease and plenty as a
citizen of the most powerful country in the world. But he opted, nay, single-mindedly insisted
on returning to and serving once more his struggling but beloved land of birth. He therefore
deserves every liberal interpretation of the law which can be applied in his favor. And in the
final analysis, over and above Frivaldo himself, the indomitable people of Sorsogon most
certainly deserve to be governed by a leader of their overwhelming choice.

WHEREFORE, in consideration of the foregoing:

(1) The petition in G.R. No. 123755 is hereby DISMISSED. The assailed Resolutions of the
respondent Commission are AFFIRMED.

(2) The petition in G.R. No. 120295 is also DISMISSED for being moot and academic. In any
event, it has no merit.

No costs.

SO ORDERED.

Davide, Jr., J. dissenting opinion


Puno., J. concurring opinion
Francisco, Hermosisima, Jr., and Torres, JJ., concur.
Padilla, Regalado, Romero, and Bellosillo, JJ., pro hac vice.
Melo, Vitug, and Kapunan, JJ., concur in the result.
Narvasa, C.J. and Mendoza, J., took no part.

[1] Composed of Pres. Comm. Regalado E. Maambong, ponente; Comm. Graduacion A.R.

Claravall, concurring, and Comm. Julio F. Desamito, dissenting.

[2] In SPC No. 95-317, entitled Juan G. Frivaldo, petitioner, vs. Raul R. Lee, respondent;

Rollo, pp. 110-129.

[3] Signed by Chairman Bernardo P. Pardo, Comms. Regalado E. Maambong, Remedios A.

Salazar-Fernando, Manolo B. Gorospe and Teresita Dy-Liaco Flores. Chairman Pardo certified
that "Commissioner Julio F. Desamito was on official travel at the time of the deliberation and
resolution of this case. However, the Commission has reserved to Comm. Desamito the right
to submit a dissenting opinion." Rollo, pp. 159-171.

[4] Rollo, pp. 46-49.

[5] Rollo, pp. 50-55. The Second Division was composed of Pres. Comm. Remedies A.

Salazar-Fernando, ponente; Comm. Teresita Dy-Liaco Flores, concurring, and Comm. Manolo
B. Gorospe ("on official business").
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[6] Frivaldo was naturalized as an American citizen on January 20, 1983. In G.R. No. 87193,

Frivaldo vs. Commission on Elections, 174 SCRA 245 (June 23, 1989), the Supreme Court,
by reason of such naturalization, declared Frivaldo "not a citizen of the Philippines and
therefore DISQUALIFIED from serving as Governor of the Province of Sorsogon." On
February 28, 1992, the Regional Trial Court of Manila granted the petition for naturalization
of Frivaldo. However, the Supreme Court in G.R. No. 104654, Republic of the Philippines vs.
De la Rosa, et al, 232 SCRA 785 (June 6,1994), overturned this grant, and Frivaldo was
"declared not a citizen of the Philippines" and ordered to vacate his office. On the basis of
this latter Supreme Court ruling, the Comelec disqualified Frivaldo in SPA No. 95-028.

[7] Signed by Chairman Bernardo P. Pardo and the six incumbent commissioners, namely,

Regalado E. Maambong, Remedios A. Salazar-Femando, Manolo B. Gorospe, Graduacion A.


Reyes-Claravall, Julio F. Desamito and Teresita Dy-Liaco Flores; Rollo, pp. 56-57.

[8] Rollo, p. 60.

[9] Rollo, pp. 61-67.

[10] Rollo, pp. 86-87. The Comelec considered the votes cast for Frivaldo as "stray votes,"

and thus Lee was held as having garnered the "highest number of votes."

[11] Rollo, pp. 88-97. This is the forerunner of the present case.

[12] 211 SCRA 297 (July 3, 1992) and 176 SCRA 1 (August 1, 1989).

[13] Rollo, pp. 110-128.

[14] Rollo, pp. 159-170.

[15] Rollo, pp. 16-17; petition, pp. 14-15.

[16] Rollo, pp. 10-15. This is the same resolution referred to in footnote no. 5.

[17] Rollo, pp. 16-17. This is the same resolution referred to in footnote no. 7.

[18] Rollo, pp. 18-21. This is signed also by the Chairman and the six other Comelec

Commissioners

[19] Republic Act No. 7160.

[20] See footnote no. 6, supra.

21 In debunking Frivaldo's claim of citizenship, this Court in G.R. No. 87193, supra, p. 254,
observed that "(i)f he (Frivaldo) really wanted to disavow his American citizenship and
reacquire Philippine citizenship, petitioner should have done so in accordance with the laws
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of our country. Under C.A. No. 63 as amended by C.A. No. 473 and P.D. 725, Philippine
citizenship may be reacquired by direct act of Congress, by naturalization, or by
repatriation."

[22] Supra, p. 794.

[23] Petition, p. 27; Rollo, p. 29.

[24] The full text of said memorandum reads as follows:

"MEMORANDUM

TO : The Solicitor General

The Undersecretary of Foreign Affairs

The Director-General

National Intelligence Coordinating Agency

The previous administration's practice of granting citizenship by Presidential Decree or any


other executive issuance, and the derivative administrative authority thereof, poses a serious
and contentious issue of policy which the present government, in the exercise of prudence
and sound discretion, should best leave to the judgment of the first Congress under the 1987
Constitution.

In view of the foregoing, you as Chairman and members of the Special Committee on
Naturalization, are hereby directed to cease and desist from undertaking any and all
proceedings within your functional area of responsibility, as defined in Letter of Instructions
No. 270 dated April 11, 1975, as amended, Presidential Decree No. 836 dated December 3,
1975, as amended, and Presidential Decree No. 1379 dated May 17, 1978, relative to the
grant of citizenship under the said laws, and any other related laws, orders, issuances and
rules and regulations.

(Sgd.) Corazon C. Aquino

Manila, March 27, 1987. "

[25] Art. 7, Civil Code of the Philippines.

[26] Cf. Ty, et al. vs. Trampe, et al, G.R. No. 117577 (December 1, 1995).

[27] Petition, p. 28; Rollo p. 30.

[28] The aforesaid Manifestation reads as follows:

"MANIFESTATION

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The Solicitor General, as Chairman of the Special Committee on Naturalization, hereby


manifests that the following persons have been repatriated by virtue of Presidential Decree
No. 725, since June 8, 1995:

1. Juan Gallanosa Frivaldo R-000900

2. Manuel Reyes Sanchez 901

3. Ma. Nelly Dessalla Ty 902

4. Terry Herrera and

Antonio Ching 903

5. Roberto Salas Benedicto 904

6. Winthrop Santos Liwag 905

7. Samuel M. Buyco 906

8. Joselito Holganza Ruiz 907

9. Samuel Villanueva 908

10. Juan Leonardo Collas, Jr. 909

11. Felicilda Otilla Sacnanas-Chua 910"

[29] The text of P.D. 725 is reproduced below:

"PRESIDENTIAL DECREE No. 725

PROVIDING FOR REPATRIATION OF FILIPINO WOMEN WHO HAD LOST THEIR PHILIPPINE
CITIZENSHIP BY MARRIAGE TO ALIENS AND OF NATURAL BORN FILIPINOS.

WHEREAS, there are many Filipino women who had lost their Philippine citizenship by
marriage to aliens;

WHEREAS, while the new Constitution allows a Filipino woman who marries an alien to retain
her Philippine citizenship unless by her act or omission, she is deemed under the law to have
renounced her Philippine citizenship, such provision of the new Constitution does not apply to
Filipino women who had married aliens before said constitution took effect;

WHEREAS, the existing law (C.A. No. 63, as amended) allows the repatriation of Filipino
women who lost their citizenship by reason of their marriage to aliens only after the death of
their husbands or the termination of their marital status; and

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WHEREAS, there are natural born Filipinos who have lost their Philippine citizenship but now
desire to re-acquire Philippine citizenship;

Now, THEREFORE, I, FERDINAND E. MARCOS, President of the Philippines, by virtue of the


powers in me vested by the Constitution, do hereby decree and order that: (1) Filipino
women who lost their Philippine citizenship by marriage to aliens; and (2) natural born
Filipinos who have lost their Philippine citizenship may reacquire Philippine citizenship
through repatriation by applying with the Special Committee on Naturalization created by
Letter of Instructions No. 270, and, if their applications are approved, taking the necessary
oath of allegiance to the Republic of the Philippines, after which they shall be deemed to
have reacquired Philippine citizenship. The Commission on Immigration and Deportation shall
thereupon cancel their certificate of registration.

The aforesaid Special Committee is hereby authorized to promulgate rules and regulations
and prescribe the appropriate forms and the required fees for the effective implementation of
this Decree.

This Decree shall take effect immediately.

Done in the City of Manila, this 5th day of June, in the year of Our Lord, nineteen hundred
and seventy-five. "

[30] See footnote no. 6, supra

[31] Cf. Labo, Jr. vs. Comelec, 211 SCRA 297 (July 3, 1992).

[32] "The term of office of all local elective officials elected after the effectivity of this Code

shall be three (3) years, starting from noon of June 30, 1992 or such date as may be
provided for by law, x x x." Sec. 43, Local Government Code.

[33] 96 Phil. 447,453 (1955).

[34] The following are excerpts from the transcript of stenographic notes of the oral argument

held on March 19, 1996:

"JUSTICE PANGANIBAN: Mr. Counsel, it is your position then that the candidate should be a
citizen at the time of proclamation?

ATTY. BRILLANTES: Yes, Your Honor, it is required that he must be a citizen at the time of
proclamation and not only that, at the time that he assumes the office he must have the
continuing qualification as a citizen.

JUSTICE PANGANIBAN: Should that not be reckoned from the time of filing of certificate of
candidacy or at least the day of the election?

ATTY. BRILLANTES: Yes, Your Honor, there are positions taken that it should be reckoned
from the date of certificate of candidacy as in the case of qualification for Batasang
Pambansa before under B.P. 53-it says that for purposes of residence it must be reckoned x x
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x from the time of the filing of the certificate, for purposes of age, from the time of the date
of the election. But when we go over all the provisions of law under current laws, Your Honor,
there is no qualification requirement insofar as citizenship is concern(ed) as to when, as to
when you should be a citizen of the Philippines and we say that if there is no provision under
any existing law which requires that you have to be a citizen of the Philippines on the date of
the filing or on the date of election then it has to be equitably interpreted to mean that if you
are already qualified at the time that the office is supposed to be assumed then you should
be allowed to assume the office.

JUSTICE PANGANIBAN: Is it not also true that under the Local Autonomy Code the candidate
should also be a registered voter and to be a registered voter one must be a citizen?

ATTY. BRILLANTES: Yes, Your Honor, in fact, Mr. Frivaldo has always been a registered voter
of Sorsogon. He has voted in 1987, 1988, 1992, then he voted again in 1995. In fact, his
eligibility as a voter was questioned but the Court dismissed (sic) his eligibility as a voter and
he was allowed to vote as in fact, he voted in all the previous elections including on May 8,
1995.

JUSTICE PANGANIBAN: But the fact that he voted does not make him a citizen. The fact is,
he was declared not a citizen by this Court twice.

ATTY. BRILLANTES: That is true, Your Honor, we admit that he has been twice declared not
citizen and we admit the ruling of the Supreme Court is correct but the fact is, Your Honor,
the matter of his eligibility to vote as being a registered voter was likewise questioned before
the judiciary. There was a ruling by the Municipal Court, there was a ruling by the Regional
Trial Court and he was sustained as a valid voter, so he voted.

JUSTICE PANGANIBAN: I raised this question in connection with your contention that
citizenship should be determined as of the time of proclamation and not as of the time of the
election or at the time'of the filing of the certificate of candidacy.

ATTY. BRILLANTES: That is true, Your Honor.

JUSTICE PANGANIBAN: And is it your contention that under the law, particularly the Local
Autonomy Code, the law does not specify when citizenship should be possessed by the
candidate, is that not correct?

ATTY. BRILLANTES: That is right, Your Honor, there is no express provision.

JUSTICE PANGANIBAN: I am also asking you that under the Local Autonomy Code the
candidate for governor or for other local positions should be a voter and to be a voter one
must be a citizen?

ATTY. BRILLANTES: That is right, Your Honor, but the fact of voting is not an issue here
because he was allowed to vote and . he did in fact vote and in fact, he was a registered
voter." (TSN, March 19. 1996.)

35 Section 117, Batas Pambansa Blg. 881, otherwise known as "The Omnibus Election Code
of the Philippines," as amended, provides for the various qualifications of voters, one of
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which is Filipino citizenship

[36] Comment, p. 11; Rollo, p. 259.

[37] See footnote no. 33.

[38] Section 253 reads as follows:

"Section 253. Petition for quo warranto.--Any voter contesting the election of any member of
the Congress, regional, provincial, or city officer on the ground of ineligibility or of disloyalty
to the Republic of the Philippines shall file a sworn petition for quo warranto with the
Commission within ten days after the proclamation of the results of the election. (Art. XIV,
Sec. 60, BP 697; Art. XVIII, Sec. 189, par. 2, 1978 EC).

Any voter contesting the election of any municipal or barangay officer on the ground of
ineligibility or of disloyally to the Republic of the Philippines shall file a sworn petition for quo
warranto with the regional trial court or metropolitan or municipal trial court, respectively,
within ten days after the proclamation of the results of the election. (Art. XVIII, Sec. 189,
par. 2, 1978 EC)."

[39] Art. 4, New Civil Code. See also Gallardo vs. Borromeo, 161 SCRA 500 (May 25,1988),

and Nilo vs. Court of Appeals, 128 SCRA 519 (April 2,1984).

[40] Tolentino, Commentaries and Jurisprudence on the Civil Code of the Philippines, Vol. I,

1990 ed., p. 23 states:

"Exceptions to Rule.--Statutes can be given retroactive effect in the following cases: (1)
when the law itself so expressly provides, (2) in case of remedial statutes, (3) in case of
curative statutes, (4) in case of laws interpreting others, and (5) in case of laws creating new
rights."

[41] id., p. 25.

[42] Agpalo, Statutory Construction, 1990 ed., pp. 270-271.

[43] 73 Am Jur 2d, sec. 354, p. 489, cited in Castro vs. Sagales, 94 Phil. 208,210 (1953).

[44] Memorandum, p. 9.

[45] 73 Am Jur 2d, Sec. 351, p. 488.

[46] 73 Am Jur 2d, Sec. 354, p. 490; italics supplied.

[47] Art. 10, Civil Code of the Philippines.

[48] Based on the "Corrected Compliance" dated May 16, 1996 filed by Solicitor General, it

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appears that, excluding the case of Frivaldo, the longest interval between date of filing of an
application for repatriation and its approval was three months and ten days; the swiftest
action was a same-day approval.

[49] "SEC. 40. Disqualifications.--The following persons are disqualified from running for any

elective local position:

xxx xxx xxx

(d) Those with dual citizenship";

[50] P. 11; Rollo, p. 259.

[51] Resolution, p. 12; Rollo, p. 121.

[52] Cf. Navarro vs. Commission on Elections, 228 SCRA 596 (December 17, 1993); Arao vs.

Commission on Elections, 210 SCRA 290 (June 23, 1992).

[53] The dispositive portion of said Resolution reads:

"WHEREFORE, this Division resolves to GRANT the petition and declares that respondent is
DISQUALIFIED to run for the office of Provincial Governor of Sorsogon on the ground that he
is not a citizen of the Philippines. Accordingly respondent's certificate of candidacy is
cancelled."

[54] Petition, p. 19; Rollo, p. 21.

[55] Resolution promulgated on December 19, 1995, p. 7; Rollo, p. 116

[56] 42 SCRA 561, 565 (December 20, 1971), citing Moy Ya Lim Yao vs. Commissioner of

Immigration, L-21289, October 4, 1971.

[57] Art. IX, Sec. 2.

[58] SPC No. 95-317 is entitled "Annulment of Proclamation" and contains the following

prayer:

"WHEREFORE, it is most respectfully prayed of this Honorable Commission that after due
notice and hearing an Oder (sic) /Resolution/ Decision be issued as follows:

a) Annulling/setting aside the 30 June 1995 proclamation of respondent as the duly election
(sic), Governor of Sorsogon for being contrary to law;

b) Ordering the proclamation of the petitioner as duly elected governor of Sorsogon;

xxx xxx xxx

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[59] 229 SCRA 666, 674 (February 4, 1994).

[60] 211 SCRA 297, 309 (July 3, 1992),

[61] G.R. No. 120265, September 18, 1995.

[62] Supra, at p. 312.

[63] See footnotes 2 and 3.

[64] 174 SCRA 245, 254 (June 23,1959).

[65] Salonga and Yap, Public International Law, 1966 ed., p. 239.

[66] In Espinosa vs. Aquino, (Electoral Case No. 9, Senate Electoral Tribunal [SET]), the

election of the late Senator Benigno S. Aquino, Jr. was upheld, despite his not being of the
required age on the day of the election, although he celebrated his thirty-fifth birthday
before his proclamation. Much later, in 1990, this Court held in Aznar vs. Comelec (185 SCRA
703, May 25, 1990) that even if Emilio "Lito" Osmena held an Alien Certificate of Registration
as an American citizen, he was still not disqualified from occupying the local elective post of
governor, since such certificate did not preclude his being "still a Filipino." The holding in
Aquino was subsequently nullified by the adoption of the 1987 Constitution (Art. VI, Sec. 3),
which specified that the age qualification must be possessed on the day of the elections, and
not on the day of the proclamation of the winners by the board of canvassers. On the other
hand, Sec. 40 of Republic Act No. 7160 (Local Government Code of 1991 ) which took effect
on January 1, 1992 , provides that those with dual citizenship are disqualified from running
for any elective local position, and effectively overturns the ruling in Aznar. But the point is
that to the extent possible, and unless there exist provisions to the contrary, the laws have
always been interpreted to give fullest effect to the political will.

[67] Benito vs. Commission on Elections, 235 SCRA 436, 442 (August 17, 1994).

[68] This antagonism was clearly present in the two earlier cases involving Frivaldo. See

footnote no. 6.

PUNO, J., Concurring:

I concur with the path-breaking ponencia of Mr. Justice Panganiban which is pro-people and
pierces the myopia of legalism. Upholding the sovereign will of the people which is the be-all
and the end-all of republicanism, it rests on a foundation that will endure time and its
tempest.

The sovereignty of our people is the primary postulate of the 1987 Constitution. For this
reason, it appears as the first in our declaration of principles and state policies. Thus, Section
1 of Article II of our fundamental law proclaims that "[t]he Philippines is a democratic and
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republican State. Sovereignty resides in the people and all government authority emanates
from them," The same principle served as the bedrock of our 1973 and 1935 Constitutions.1
It is one of the few principles whose truth has been cherished by the Americans as self-
evident. Section 4, Article IV of the U.S. Constitution makes it a duty of the Federal
government to guarantee to every state a "republican form of government." With
understandable fervor, the American authorities imposed republicanism as the cornerstone of
our 1935 Constitution then being crafted by its Filipino framers.2

Borne out of the 1986 people power EDSA revolution, our 1987 Constitution is more people-
oriented. Thus, Section 4 of Article II provides as a state policy that the prime duty of the
Government is "to serve and protect the people." Section 1, Article XI also provides that "x x
x public officers x x x must at all times be accountable to the people x x x" Sections 15 and
16 of Article XIII define the role and rights of people's organizations. Section 5(2) of Article
XVI mandates that "[t]he state shall strengthen the patriotic spirit and nationalist
consciousness of the military, and respect for people's rights in the performance of their
duty." And Section 2 of Article XVII provides that "amendments to this Constitution may
likewise be directly proposed by the people through initiative x x x" All these provisions and
more are intended to breathe more life to the sovereignty of our people.

To be sure, the sovereignty of our people is not a kabalistic principle whose dimensions are
buried in mysticism. Its metes and bounds are familiar to the framers of our Constitutions.
They knew that in its broadest sense, sovereignty is meant to be supreme, the jus summi
imperu, the absolute right to govern.3 Former Dean Vicente Sinco4 states that an essential
quality of sovereignty is legal omnipotence, viz: "Legal theory establishes certain essential
qualities inherent in the nature of sovereignty. The first is legal omnipotence. This means
that the sovereign is legally omnipotent and absolute in relation to other legal institutions. It
has the power to determine exclusively its legal competence. Its powers are original, not
derivative. It is the sole judge of what it should do at any given time."5 Citing Barker,6 he
adds that a more amplified definition of sovereignty is that of "a final power of final legal
adjustment of all legal issues." The U.S. Supreme Court expressed the same thought in the
landmark case of Yick Wo v. Hopkins,7 where it held that "x x x sovereignty itself is, of
course, not subject to law, for it is the author and source of law; but in our system, while
sovereign powers are delegated to the agencies of government, sovereignty itself remains
with the people, by whom and for whom all government exists and acts."

In our Constitution, the people established a representative democracy as distinguished from


a pure democracy. Justice Isagani Cruz explains:8

"xxx xxx xxx

A republic is a representative government, a government run by and for the people. It is not
a pure democracy where the people govern themselves directly. The essence of
republicanism is representation and renovation, the selection by the citizenry of a corps of
public functionaries who derive their mandate from the people and act on their behalf,
serving for a limited period only, after which they are replaced or retained, at the option of
their principal. Obviously, a republican government is a responsible government whose
officials hold and discharge their position as a public trust and shall, according to the
Constitution, 'at all times be accountable to the people' they are sworn to serve. The purpose
of a republican government it is almost needless to state, is the promotion of the common
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welfare according to the will of the people themselves. "

I appreciate the vigorous dissent of Mr. Justice Davide. I agree that sovereignty is indivisible
but it need not always be exercised by the people together, all the time.9 For this reason, the
Constitution and our laws provide when the entire electorate or only some of them can elect
those who make our laws and those who execute our laws. Thus, the entire electorate votes
for our senators but only our district electorates vote for our congressmen, only our
provincial electorates vote for the members of our provincial boards, only our city electorates
vote for our city councilors, and only our municipal electorates vote for our councilors. Also,
the entire electorate votes for our President and Vice-President but only our provincial
electorates vote for our governors, only our city electorates vote for our mayors, and only
our municipal electorates vote for our mayors. By defining and delimiting the classes of
voters who can exercise the sovereignty of the people in a given election, it cannot be
claimed that said sovereignty has been fragmented.

It is my respectful submission that the issue in the case at bar is not whether the people of
Sorsogon should be given the right to defy the law by allowing Frivaldo to sit as their
governor. Rather, the issue is: whether the will of the voters of Sorsogon clearly choosing
Frivaldo as governor ought to be given a decisive value considering the uncertainty of the
law on when a candidate ought to satisfy the qualification of citizenship. The uncertainty of
law and jurisprudence, both here and abroad, on this legal issue cannot be denied. In the
United States,10 there are two (2) principal schools of thought on the matter. One espouses
the view that a candidate must possess the qualifications for office at the time of his
election. The other ventures the view that the candidate should satisfy the qualifications at
the time he assumes the powers of the office. I am unaware of any Philippine decision that
has squarely resolved this difficult question of law. The ponencia of Mr. Justice Panganiban
adhered to the second school of thought while Mr. Justice Davide dissents.

I emphasize the honest-to-goodness difference in interpreting our law on the matter for this
is vital to dispel the fear of Mr. Justice Davide that my opinion can bring about ill effects to
the State. Mr. Justice Davide's fear is based on the assumption that Frivaldo continues to be
disqualified and we cannot allow him to sit as governor without transgressing the law. I do
not concede this assumption for as stressed above, courts have been sharply divided by this
mind boggling issue. Given this schism, I do not see how we can derogate on the sovereignty
of the people by according more weight to the votes of the people of Sorsogon.

Mr. Justice Davide warns that should the people of Batanes stage a rebellion, we cannot
prosecute them "because of the doctrine of people's sovereignty." With due respect, the
analogy is not appropriate. In his hypothetical case, rebellion is concededly a crime, a
violation of Article 134 of the Revised Penal Code, an offense against the sovereignty of our
people. In the case at bar, it cannot be held with certitude that the people of Sorsogon
violated the law by voting for Frivaldo as governor. Frivaldo's name was in the list of
candidates allowed by COMELEC to run for governor. At that time too, Frivaldo was taking all
steps to establish his Filipino citizenship. And even our jurisprudence has not settled the
issue when a candidate should possess the qualification of citizenship. Since the meaning of
the law is arguable then and now, I cannot imagine how it will be disastrous for the State if
we tilt the balance in the case at bar in favor of the people of Sorsogon.

In sum, I respectfully submit that the sovereign will of our people should be resolutory of the
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case at bar which is one of its kind, unprecedented in our political history. For three (3)
times, Frivaldo ran as governor of the province of Sorsogon. For two (2) times, he was
disqualified on the ground of citizenship. The people of Sorsogon voted for him as their
governor despite his disqualification. The people never waffled in their support for Frivaldo.
In 1988, they gave him a winning margin of 27,000; in 1992, they gave him a winning
spread of 57,000; in 1995, he posted a margin of 20,000. Clearly then, Frivaldo is the
overwhelming choice of the people of Sorsogon. In election cases, we should strive to align
the will of the legislature as expressed in its law with the will of the sovereign people as
expressed in their ballots. For law to reign, it must respect the will of the people. For in the
eloquent prose of Mr. Justice Laurel, "x x x an enfranchised citizen is a particle of popular
sovereignty and is the ultimate source of established authority."11 The choice of the
governed on who shall be their governor merits the highest consideration by all agencies of
government. In cases where the sovereignty of the people is at stake, we must not only be
legally right but also politically correct. We cannot-fail by making the people succeed.

[1] The 1987 Constitution added the word "democratic" in the statement of the principle.

[2] Section 24(a) of the Tydings-McDuffie Law which authorized the Filipino people to draft a

Constitution in 1934 required that the "constitution formulated and drafted shall be
republican in form."

This Court has observed that even before the Tydings-McDuffie Law, the Philippine Bill and
the Jones Law have "x x x extended the powers of a republican form of government modeled
after that of the United States to the Philippines." Roa v. Collector of Customs, 23 Phil. 315,
340 [19l2], Severino v. Gov. General, 16 Phil. 366, 383 [1910], US v. Bull, 15 Phil. 7, 27
[1910].

[3] Words and Phrases, Vol. 39 A., p. 68 citing Cherokee Nation v. Southern Kan. R. Co., 33 F.

900, 906.

[4] Dean of the UP College of Law; later President of U.P., and Delegate to the 1971

Constitutional Convention.

[5] Sinco, Philippine Political Law, Principles and Concepts, 1954, ed., p. 22.

[6] Barker, Principles of Social and Political Theory, p. 59 (1952 ed.).

[7] 118 US 356.

[8] Cruz, Philippine Political Law, p. 49, [1991 ed]. 9 Sinco, op. cit., pp. 23-24.

[9] Sinco, op. cit., pp. 23-24.

[10] 3 AM JUR 2d 889-890; 63 AM JUR 2d 653; 67 CSJ 926.

[11] Moyav. delFierro, 69 Phil. 199.

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DAVIDE, JR., J., Dissenting:

After deliberating on the re-formulated issues and the conclusions reached by my


distinguished colleague, Mr. Justice Artemio V. Panganiban, I find myself unable to join him.

I agree with petitioner Lee that Frivaldo's repatriation was void, but not on the ground that
President Corazon C. Aquino's 27 March 1987 memorandum "effectively repealed" P.D. No.
725. In my view, the said memorandum only suspended the implementation of the latter
decree by divesting the Special Committee on Naturalization of its authority to further act on
grants of citizenship under LOI No. 270, as amended; P.D. No. 836, as amended; P.D. No.
1379; and "any other related laws, orders, issuances and rules and regulations." A reading of
the last paragraph of the memorandum can lead to no other conclusion, thus:

In view of the foregoing, you as Chairman and members of the Special Committee
on Naturalization, are hereby directed to cease and desist from undertaking any
and all proceedings within your functional area of responsibility, as defined in
Letter of Instruct on No. 270 dated April 11, 1975 as amended, Presidential
Decree No 836 dated December 3. 1975, as amended, and Presidential Decree No
1379 dated May 17, 1978, relative to the grant of citizenship under the said laws,
and any other related laws, orders, issuances and rules and regulations. (Italics
supplied)

It is self-evident that the underscored clause can only refer to those related to LOI No. 270,
P.D. No. 836, and P.D. No. 1379. There is no doubt in my mind that P.D. No. 725 is one such
"related law" as it involves the reacquisition of Philippine citizenship by repatriation and
designates the Special Committee on Naturalization created under LOI No. 270 to receive
and act on (i.e., approve or disapprove) applications under the said decree. The power of
President Aquino to suspend these issuances by virtue of the 27 March 1987 memorandum is
beyond question considering that under Section 6, Article XVIII of the 1987 Constitution, she
exercised legislative power until the Congress established therein convened on the fourth
Monday of July 1987.

I disagree with the view expressed in the ponencia that the memorandum of 27 March 1987
was merely a declaration of "executive policy," and not an exercise of legislative power. LOI
No. 270, P.D. No. 836, P.D. No. 1379 and "any other related laws," such as P.D. No. 725,
were issued by President Ferdinand E. Marcos in the exercise of his legislative powers -- not
executive power. These laws relate to the acquisition (by naturalization) and reacquisition (by
repatriation) of Philippine citizenship, and in light of Sections 1(4) and 3, Article IV of the
1987 Constitution (naturalization and reacquisition of Philippine citizenship shall be in
accordance with law), it is indubitable that these subjects are a matter of legislative
prerogative. In the same vein, the creation of the Special Committee on Naturalization by
LOI No. 270 and the conferment of the power to accept and act on applications under P.D.

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No. 725 are clearly legislative acts.

Accordingly, the revocation of the cease and desist order and the reactivation or revival of
the Committee can be done only by legislative fiat, i.e., by Congress, since the President had
long lost his authority to exercise "legislative power." Considering that Congress has not seen
it fit to do so, the President cannot, in the exercise of executive power, lift the cease and
desist order nor reactivate/reconstitute/revive the Committee. A multo fortiori, the
Committee cannot validly accept Frivaldo's application for repatriation and approve it.

II

Even assuming arguendo that Frivaldo's repatriation is valid, it did not "cure his lack of
citizenship." I depart from the view in the ponencia that Section 39 of the Local Government
Code of 1991 does not specify the time when the citizenship requirement must be met, and
that being the case, then it suffices that citizenship be possessed upon commencement of
the term of the office involved; therefore, since Frivaldo "re-assumed" his Philippine
citizenship at 2:00 p.m. on 30 June 1995 and the term of office of Governor commenced at
12:00 noon of that day, he had, therefore, complied with the citizenship requirement.

In the first place, Section 3 9 actually prescribes the qualifications of elective local officials
and not those of an elected local official. These adjectives are not synonymous, as the
ponencia seems to suggest. The first refers to the nature of the office, which requires the
process of voting by the electorate involved; while the second refers to a victorious candidate
for an elective office. The section unquestionably refers to elective " not elected" local
officials. It falls under Title Two entitled ELECTIVE OFFICIALS; under Chapter 1 entitled
Qualifications and Election, and paragraph (a) thereof begins with the phrase "An elective
local official," while paragraphs (b) to (f) thereof speak of candidates. It reads as follows:

SEC. 39. Qualifications--(a) An elective local official must be a citizen of the


Philippines; a registered voter in the barangay, municipality, city, or province or, in
the case of a member of the sangguniang panlalawigan, sangguniang panlungsod,
or sangguniang bayan, the district where he intends to be elected; a resident
therein for at least one (1) year immediately preceding the day of the election;
and able to read and write Filipino or any other local language or dialect.

(b) Candidates for the position of governor, vice governor or member of the
sangguniang panlalawigan, or mayor, vice mayor or member of the sangguniang
panlungsod of highly urbanized cities must be at least twenty-three (23) years of
age on election day.

(c) Candidates for the position of mayor or vice mayor of independent component
cities, component cities, or municipalities must be at least twenty-one (21) years
of age on election day.

(d) Candidates for the position of member of the sangguniang panlungsod or


sangguniang bayan must be at least eighteen (18) years of age on election day.

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(e) Candidates for the position of punong barangay or member of the


sangguniang barangay must be at least eighteen (18) years of age on election
day.

(f) Candidates for the sangguniang kabataan must be at least fifteen (15) years
of age but not more than twenty-one (21) years of age on election day (emphasis
supplied)

It is thus obvious that Section 39 refers to no other than the qualifications of candidates for
elective local offices and their election. Hence, in no way may the section be construed to
mean that possession of qualifications should be reckoned from the commencement of the
term of office of the elected candidate.

For another, it is not at all true that Section 39 does not specify the time when the citizenship
requirement must be possessed. I submit that the requirement must be satisfied, or that
Philippine citizenship must be possessed, not merely at the commencement of the term, but
at an earlier time, the latest being election day itself. Section 39 is not at all ambiguous nor
uncertain that it meant this to be, as one basic qualification of an elective local official is that
he be "A REGISTERED VOTER IN THE BARANGAY, MUNICIPALITY, CITY OR PROVINCE x x x
WHERE HE INTENDS TO VOTE." This simply means that he possesses all the qualifications to
exercise the right of suffrage. The fundamental qualification for the exercise of this sovereign
right is the possession of Philippine citizenship. No less than the Constitution makes it the
first qualification, as Section 1, Article V thereof provides:

Section 1. Suffrage may be exercised by all citizens of the Philippines not


otherwise disqualified by law, who are at least eighteen years of age, and who
shall have resided in the Philippines for at least one year and in the place wherein
they propose to vote for at least six months immediately preceding the election x
x x (Italics supplied)

And Section 117 of the Omnibus Election Code of the Philippines (B.P. Blg. 881) expressly
provides for the qualifications of a voter. Thus:

SEC. 117. Qualifications of a voter.-- Every citizen of the Philippines, not


otherwise disqualified by law, eighteen years of age or over, who shall have
resided in the Philippines for one year and in the city or municipality wherein he
proposes to vote for at least six months immediately preceding the election, may
be a registered voter. (Italics supplied)

It is undisputed that this Court twice voided Frivaldo's election as Governor in the 1988 and
1992 elections on the ground that for lack of Philippine citizenship"he being a naturalized
citizen of the United States of America"he was DISQUALIFIED to be elected as such and to
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serve the position (Frivaldo vs. Commission on Elections, 174 SCRA 245 [1989], Republic of
the Philippines vs. De la Rosa, 232 SCRA 785 [1994]). This disqualification inexorably
nullified Frivaldo's registration as a voter and declared it void ab initio. Our judgments
therein were self-executory and no further act, e.g., a COMELEC order to cancel his
registration as a voter or the physical destruction of his voter's certificate, was necessary for
the ineffectivity. Thus, he was never considered a registered voter for the elections of May
1992, and May 1995, as there is no showing that Frivaldo registered anew as a voter for the
latter elections. Even if he did "in obvious defiance of his decreed disqualification"this did not
make him a Filipino citizen, hence it was equally void ab initio. That he filed his certificate of
candidacy for the 1995 elections and was even allowed to vote therein were of no moment.
Neither act made him a Filipino citizen nor nullified the judgments of this Court. On the
contrary, said acts made a mockery of our judgments. For the Court now to validate
Frivaldo's registration as a voter despite the judgments of disqualification is to modify the
said judgments by making their effectivity and enforceability dependent on a COMELEC order
cancelling his registration as a voter, or on the physical destruction of his certificate of
registration as a voter which, of course, was never our intention. Moreover, to sanction
Frivaldo's registration as a voter would be to sacrifice substance in favor of form (the piece of
paper that is the book of voters or list of voters or voter's ID), and abet the COMELEC' s
incompetence in failing to cancel Frivaldo's registration and allowing him to vote.

The second reason in the ponencia as to why the citizenship disqualification should be
reckoned not from the date of the election nor the filing of the certificate of candidacy, but
from the date of proclamation, is that the only available remedy to question the meligibility
(or disloyalty) of a candidate is a petition for quo warranto which, under Section 253 of the
Omnibus Election Code, may be filed only within ten days from proclamation and not earlier.

I beg to differ.

Clearly, quo warranto is not the sole remedy available to question a candidate's ineligibility
for public office. Section 78 of the Omnibus Election Code allows the filing of a petition to
deny due course to or cancel the certificate of candidacy on the ground that any material
representation contained therein, as required by Section 74, is false. Section 74, in turn,
requires that the person filing the certificate of candidacy must state, inter alia, that he is
eligible for the office, which means that he has all the qualifications (including, of course,
fulfilling the citizenship requirement) and none of the disqualifications as provided by law.
The petition under Section 78 may be filed at any time not later than 25 days from the filing
of the certificate of candidacy. The section reads in full as follows:

SEC. 78. Petition to deny due course to or cancel a certificate of candidacy.-- A


verified petition seeking to deny due course or to cancel a certificate of candidacy
may be filed by any person exclusively on the ground that any material
representation contained therein as required under Section 74 hereof is false. The
petition may be filed at any time not later than twenty-five days from the time of
the filing of the certificate of candidacy and shall be decided, after due notice and
hearing, not later than fifteen days before the election.

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This remedy was recognized in Loong vs. Commission on Elections, (216 SCRA 760, 768
[1992]), where this Court held:

Thus, if a person qualified to file a petition to disqualify a certain candidate fails to


file the petition within the 25-day period prescribed by Section 78 of the Code for
whatever reasons, the election laws do not leave him completely helpless as he
has another chance to raise the disqualification of the candidate by filing a
petition for quo warranto within ten (10) days from the proclamation of the
results of the election, as provided under Section 253 of the Code. Section 1, Rule
21 of the Comelec Rules of Procedure similarly provides that any voter contesting
the election of any regional, provincial or city official on the ground of ineligibility
or of disloyalty to the Republic of the Philippines may file a petition for quo
warranto with the Electoral Contest Adjudication Department. The petition may be
filed within ten (10) days from the date the respondent is proclaimed (Section 2).

Likewise, Rule 25 of the Revised COMELEC Rules of Procedure allows the filing of a petition
for disqualification on the ground of failure to possess all the qualifications of a candidate as
provided by the Constitution or by existing laws, "any day after the last day for filing of
certificates of candidacy but not later than the date of proclamation." Sections 1 and 3
thereof provide:

Rule 25: Disqualification of Candidates.

SECTION 1. Grounds for Disqualification.-- Any candidate who does not possess
all the qualifications of a candidate as provided for by the Constitution or by
existing law or who commits any act declared by law to be grounds for
disqualification may be disqualified from continuing as a candidate.

xxx xxx xxx

SECTION 3. Period to File Petition.-- The petition shall be filed any day after the
last day for filing of certificates of candidacy but not later than the date of
proclamation.

While the validity of this rule insofar as it concerns petitions for disqualification on the ground
of lack of all qualifications may be doubtful, its invalidity is not in issue here.

In this connection, it would seem appropriate to take up the last issue grappled within the
ponencia, viz., is Section 78 of the Omnibus Election Code mandatory? The answer is
provided in Loong.

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We also do not find merit in the contention of respondent Commission that in the
light of the provisions of Sections 6 and 7 of Rep. Act No. 6646, a petition to deny
due course to or cancel a certificate of candidacy may be filed even beyond the
25-day period prescribed by Section 78 of the Code, as long as it is filed within a
reasonable time from the discovery of the ineligibility.

Sections 6 and 7 of Rep. Act No. 6646 are here re-quoted:

SEC. 6. Effect of Disqualification case.-- Any candidate who has been declared by
final judgment to be disqualified shall not be voted for, and the votes cast for him
shall not be counted. If for any reason a candidate is not declared by final
judgment before an election to be disqualified and he is voted for and receives the
winning number of votes in such election, the Court or Commission shall continue
with the trial and hearing of the action, inquiry or protest and, upon motion of the
complainant or any intervenor, may during the pendency thereof order the
suspension of the proclamation of such candidate whenever the evidence of his
guilt is strong.

SEC. 7. Petition to Deny Due Course To or Cancel a Certificate of Candidacy.--


The procedure hereinabove provided shall apply to petitions to deny due course to
or cancel a certificate of candidacy as provided in Section 78 of Batas Pambansa
Blg. 881.

It will be noted that nothing in Sections 6 or 7 modifies or alters the 25-day period
prescribed by Section 78 of the Code for filing the appropriate action to cancel a certificate of
candidacy on account of any false representation made therein. On the contrary, said Section
7 affirms and reiterates Section 78 of the Code.

We note that Section 6 refers only to the effects of a disqualification case which may be
based on grounds other than that provided under Section 78 of the Code. But Section 7 of
Rep. Act No. 6646 also makes the effects referred to in Section 6 applicable to
disqualification cases filed under Section 78 of the Code. Nowhere in Sections 6 and 7 of
Rep. Act No. 6646 is mention made of the period within which these disqualification cases
may be filed. This is because there are provisions in the Code which supply the periods
within which a petition relating to disqualification of candidates must be filed, such as
Section 78, already discussed, and Section 253 on petitions for quo warranto.

I then disagree with the asseveration in the ponencia that Section 78 is merely directory
because Section 6 of R. A. No. 6646 authorizes the COMELEC to try and decide petitions for
disqualification even after elections. I submit that Section 6 refers to disqualifications under
Sections 12 and 68 of the Omnibus Election Code and consequently modifies Section 72
thereof. As such, the proper court or the COMELEC are granted the authority to continue
hearing the case after the election, and during the pendency of the case, suspend the
proclamation of the victorious candidate, if the evidence against him is strong. Sections 12,

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68, and 72 of the Code provide:

SEC. 12. Disqualifications.-- Any person who has been declared by competent
authority insane or incompetent, or has been sentenced by final judgment for
subversion, insurrection, rebellion or for any offense for which he has been
sentenced to a penalty of more than eighteen months or for a crime involving
moral turpitude, shall be disqualified to be a candidate and to hold any office,
unless he has been given plenary pardon or granted amnesty.

The disqualifications to be a candidate herein provided shall be deemed removed


upon declaration by competent authority that said insanity or incompetence had
been removed or after the expiration of a period of five years from his service of
sentence, unless within the same period he again becomes disqualified.

xxx xxx xxx

SEC. 68. Disqualifications--Any candidate who, in an action or protest in which he


is a party is declared by final decision of a competent court guilty of, or found by
the Commission of having (a) given money or other material consideration to
influence, induce or corrupt the voters or public officials performing electoral
functions; (b) committed acts of terrorism to enhance his candidacy; (c) spent in
his election campaign an amount in excess of that allowed by this Code; (d)
solicited, received or made any contribution prohibited under Sections 89, 95, 96,
97 and 104; or (e) violated any of Sections 80, 83, 85, 86 and 261, paragraphs d,
e, k, v, and cc, sub-paragraph 6, shall be disqualified from continuing as a
candidate, or if he has been elected, from holding the office. Any person who is a
permanent resident of or an immigrant to a foreign country shall not be qualified
to run for any elective office under this Code, unless said person has waived his
status as permanent resident or immigrant of a foreign country in accordance
with the residence requirement provided for in the election laws. (Sec. 25, 1971
EC)

SEC. 72. Effects of disqualification cases and priority.-- The Commission and the
courts shall give priority to cases of disqualification by reason of violation of this
Act to the end that a final decision shall be rendered not later than seven days
before the election in which the disqualification is sought.

Any candidate who has been declared by final judgment to be disqualified shall
not be voted for, and the votes cast for him shall not be counted. Nevertheless, if
for any reason, a candidate is not declared by final judgment before an election to
be disqualified and he is voted for and receives the winning number of votes in
such election, his violation of the provisions of the preceding sections shall not
prevent his proclamation and assumption to office.

III

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Still assuming that the repatriation is valid, I am not persuaded by the arguments in support
of the thesis that Frivaldo's repatriation may be given retroactive effect, as such goes against
the spirit and letter of P.D. No. 725. The spirit adheres to the principle that acquisition or re-
acquisition of Philippine citizenship is not a right, but a mere privilege. Before the advent of
P.D. No. 725, only the following could apply for repatriation: (a) Army, Navy, or Air Corps
deserters; and (b) a woman who lost her citizenship by reason of her marriage to an alien
after the death of her spouse (Section 2[2], C.A. No. 63). P.D. No. 725 expanded this to
include Filipino women who lost their Philippine citizenship by marriage to aliens even before
the death of their alien husbands, or the termination of their marital status and to natural-
bom Filipino citizens who lost their Philippine citizenship but subsequently desired to
reacquire the latter.

Turning now to the letter of the law, P.D. No. 725 expressly provides that repatriation takes
effect only after taking the oath of allegiance to the Republic of the Philippines, thus:

... may reacquire Philippine citizenship ... by applying with the Special Committee
on Naturalization created by Letter of Instruction No. 270, and, if their
applications are approved, taking the necessary oath of allegiance to the Republic
of the Philippines, AFTER WHICH THEY SHALL BE DEEMED TO HAVE REACQUIRED
PHILIPPINE CITIZENSHIP, (italicization and capitalization supplied for emphasis)

Clearly then, the steps to reacquire Philippine citizenship by repatriation under the decree
are: (1) filing the application; (2) action by the committee; and (3) taking of the oath of
allegiance if the application is approved. It is only UPON TAKING THE OATH OF ALLEGIANCE
that the applicant is deemed ipso jure to have reacquired Philippine citizenship. If the decree
had intended the oath taking to retroact to the date of the filing of the application, then it
should not have explicitly provided otherwise.

This theory in the ponencia likewise dilutes this Court's pronouncement in the first Frivaldo
case that what reacquisition of Filipino citizenship requires is an act "formally rejecting [the]
adopted state and reaffirming...allegiance to the Philippines." That act meant nothing less
than taking of the oath of allegiance to the Republic of the Philippines. If we now take this
revision of doctrine to its logical end, then it would also mean that if Frivaldo had chosen and
reacquired Philippine citizenship by naturalization or through Congressional action, such
would retroact to the filing of the petition for naturalization or the bill granting him Philippine
citizenship. This is a proposition which both the first and second Frivaldo cases soundly
rejected.

The other reason adduced in the ponencia in support of the proposition that P.D. No. 725 can
be given retroactive effect is its alleged curative or remedial nature.

Again, I disagree. In the first place, by no stretch of legal hermeneutics may P.D. No. 725 be
characterized as a curative or remedial statute:

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Curative or remedial statutes are healing acts. They are remedial by curing
defects and adding to the means of enforcing existing obligations. The rule in
regard to curative statutes is that if the thing omitted or failed to be done, and
which constitutes the defect sought to be removed or made harmless, is
something the legislature might have dispensed with by a previous statute, it may
do so by a subsequent one.

Curative statutes are intended to supply defects, abridge superfluities in existing


laws, and curb certain evils. They are intended to enable a person to carry into
effect that which they have designed and intended, but has failed of expected
legal consequence by reason of some statutory disability or irregularity in their
own action. They make valid that which, before the enactment of the statute, was
invalid. (RUBEN E. AGPALO, Statutory Construction, Second ed. [1990], 270-271,
citations omitted).

P.D. No. 725 provides for the reacquisition of Philippine citizenship lost through the marriage
of a Filipina to an alien and through naturalization in a foreign country of natural-bom Filipino
citizens. It involves then the substantive, nay primordial, right of citizenship. To those for
whom it is intended, it means, in reality, the acquisition of "a new right," as the ponencia
cannot but concede. Therefore, it may not be said to merely remedy or cure a defect
considering that one who has lost Philippine citizenship does not have the right to reacquire
it. As earlier stated, the Constitution provides that citizenship, once lost, may only be
reacquired in the manner provided by law. Moreover, it has also been observed that:

The idea is implicit from many of the cases that remedial statutes are statutes
relating to procedure and not substantive rights. (Sutherland, Statutory
Construction, Vol. 3, Third ed. [1943], §5704 at 74, citations omitted).

If we grant for the sake of argument, however, that P.D. No. 725 is a curative or remedial
statute, it would be an inexcusable error to give it a retroactive effect since it explicitly
provides the date of its effectivity. Thus:

This Decree shall take effect immediately.

Done in the city of Manila, this 5th day of June, in the year of Our Lord, nineteen
hundred and seventy five.

Nevertheless, if the retroactivity is to relate only to the reacquisition of Philippine citizenship,


then nothing therein supports such theory, for as the decree itself unequivocally provides, it
is only after taking the oath of allegiance to the Republic of the Philippines that the applicant
is DEEMED TO HAVE REACQUIRED PHILIPPINE CITIZENSHIP.

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IV

Assuming yet again, for the sake of argument, that taking the oath of allegiance retroacted
to the date of Frivaldo's application for repatriation, the same could not be said insofar as it
concerned the United States of America, of which he was a citizen. For under the laws of the
United States of America, Frivaldo remained an American national until he renounced his
citizenship and allegiance thereto at 2:00 p.m. on 30 June 1995, when he took his oath of
allegiance to the Republic of the Philippines. Section 401 of the Nationality Act of 1940 of the
United States of America provides that a person who is a national of the United States of
America, whether by birth or naturalization, loses his nationality by, inter alia, "(b) faking an
oath or making an affirmation or other formal declaration of allegiance to a foreign state"
(SIDNEY KANSAS, U.S. Immigration Exclusion and Deportation and Citizenship of the United
States of America. Third ed., [1948] 341-342). It follows then that on election day and until
the hour of the commencement of the term for which he was elected " noon of 30 June 1995
as per Section 43 of the Local Government Code " Frivaldo possessed dual citizenship, viz.,
(a) as an American citizen; and (b) as a Filipino citizen through the adoption of the theory
that the effects of his taking the oath of allegiance were retrospective. Hence, he was
disqualified to run for Governor foryet another reason: possession of dual citizenship, in
accordance with Section 40(d) of the Local Government Code.

The assertion in the ponencia that Frivaldo may be considered STATELESSon the basis of his
claim that he "had long renounced and had long abandoned his American citizenship"long
before May 8, 1985" " is untenable, for the following reasons: first, it is based on Frivaldo's
unproven, self-serving allegation; second, informal renunciation or abandonment is not a
ground to lose American citizenship; and third, simply put, never did the status of a
STATELESS person attach to Frivaldo.

Statelessness may be either de jure, which is the status of individuals stripped of their
nationality by their former government without having an opportunity to acquire another; or
de facto, which is the status of individuals possessed of a nationality whose country does not
give them protection outside their own country, and who are commonly, albeit imprecisely,
referred to as refugees (JORGE R. COQUIA, et al, Conflict of Laws Cases, Materials and
Comments. 1995 ed., 290)

Specifically, under Chapter 1, Article 1 of the United Nations Convention Regarding the
Status of Stateless Persons (Philippine Treaty. Series, Compiled and Annotated by Haydee B.
Yorac, vol. III, 363), a stateless person is defined as "a person who is not considered as a
national by any State under the operation of its law." However, it has not been shown that
the United States of America ever ceased to consider Frivaldo its national at any time before
he took his oath of allegiance to the Republic of the Philippines on 30 June 1995.

VI

Finally, I find it in order to also express my view on the concurring opinion of Mr. Justice
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Reynato S. Puno. I am absolutely happy to join him in his statement that "[t]he sovereignty
of our people is the primary postulate of the 1987 Constitution" and that the said
Constitution is "more people-oriented," "borne [as it is] out of the 1986 people power EDSA
revolution." I would even go further by saying that this Constitution is pro-God (Preamble),
pro-people (Article n, Sections 1, 3,4, 5,9, 15, 16; Article XI, Section I; Article XII, Sections
1, 6; Article XIII, Sections 1, 11, 15, 16. 18; Article XVI, Sections 5[2], 6), pro-Filipino
(Article XII, Sections 1, 2. 10, 11, 12, 14. Article XIV, Sections 1,4[2], 13; Article XVI,
Section 11), pro-poor (Article II. Sections 9, 10, 18, 21; Article XII, Sections 1, 2[3]; Article
XIII, Sections 1, 3, 4, 5, 6, 7, 9, 10, 11, 13), pro-life (Article II, Section 12), and pro-family
(Article II, Section 12; Article XV).

Nevertheless, I cannot be with him in carrying out the principle of sovereignty beyond what I
perceive to be the reasonable constitutional parameters. The doctrine of people's sovereignty
is founded on the principles of democracy and republicanism and refers exclusively to the
sovereignty of the people of the Philippines. Section 1 of Article II is quite clear on this, thus:

SECTION 1. The Philippines is a democratic and republican State. Sovereignly


resides in the people and all government authority emanates from them.

And the Preamble makes it clear when it solemnly opens it with a clause "We, the sovereign
Filipino people . . ." Thus, this sovereignty is an attribute of the Filipino people as one
people, one body.

That sovereign power of the Filipino people cannot be fragmentized by looking at it as the
supreme authority of the people of any of the political subdivisions to determine their own
destiny; neither can we convert and treat every fragment as the whole. In such a case, this
Court would provide the formula for the division and destruction of the State and render the
Government ineffective and inutile. To illustrate the evil, we may consider the enforcement of
laws or the pursuit of a national policy by the executive branch of the government, or the
execution of a judgment by the courts. If these are opposed by the overwhelming majority of
the people of a certain province, or even a municipality, it would necessarily follow that the
law, national policy, or judgment must not be enforced, implemented, or executed in the said
province or municipality. More concretely, if, for instance, the vast majority of the people of
Batanes rise publicly and take up arms against the Government for the purpose of removing
from the allegiance to the said Government or its laws, the territory of the Republic of the
Philippines or any part thereof, or any body of land, naval, or other armed forces, or
depriving the Chief Executive or the Legislature, wholly or partially, of any of their powers or
prerogatives, then those who did so " and which are composed of the vast majority of the
people of Batanes"a political subdivision"cannot be prosecuted for or be held guilty of
rebellion in violation of Article 134 of the Revised Penal Code because of the doctrine of
peoples' sovereignty. Indeed, the expansion of the doctrine of sovereignty by investing upon
the people of a mere political subdivision that which the Constitution places in the entire
Filipino people, may be disastrous to the Nation.

So it is in this case if we follow the thesis in the concurring opinion. Thus, simply because
Frivaldo had obtained a margin of 20,000 votes over his closest rival, Lee, i.e., a vast

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majority of the voters of Sorsogon had expressed their sovereign will for the former, then
this Court must yield to that will and must, therefore, allow to be set aside, for Frivaldo, not
just the laws on qualifications of candidates and elective officials and naturalization and
reacquisition of Philippine citizenship, but even the final and binding decisions of this Court
affecting him.

This Court must be the first to uphold the Rule of Law. I vote then to DISMISS G.R. No.
120295 and GRANT G.R. No. 123755.

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570 Phil. 151

SECOND DIVISION

[ G.R. No. 162894, February 26, 2008 ]

RAYTHEON INTERNATIONAL, INC., Petitioner, vs. STOCKTON W.


ROUZIE, JR., Respondent.

DECISION

TINGA, J,:

Before this Court is a petition for review on certiorari under Rule 45 of the 1997 Rules of Civil
Procedure which seeks the reversal of the Decision[1] and Resolution[2] of the Court of
Appeals in CA-G.R. SP No. 67001 and the dismissal of the civil case filed by respondent
against petitioner with the trial court.

As culled from the records of the case, the following antecedents appear:

Sometime in 1990, Brand Marine Services, Inc. (BMSI), a corporation duly organized and
existing under the laws of the State of Connecticut, United States of America, and
respondent Stockton W. Rouzie, Jr., an American citizen, entered into a contract whereby
BMSI hired respondent as its representative to negotiate the sale of services in several
government projects in the Philippines for an agreed remuneration of 10% of the gross
receipts. On 11 March 1992, respondent secured a service contract with the Republic of the
Philippines on behalf of BMSI for the dredging of rivers affected by the Mt. Pinatubo eruption
and mudflows.[3]

On 16 July 1994, respondent filed before the Arbitration Branch of the National Labor
Relations Commission (NLRC) a suit against BMSI and Rust International, Inc. (RUST),
Rodney C. Gilbert and Walter G. Browning for alleged nonpayment of commissions, illegal
termination and breach of employment contract.[4] On 28 September 1995, Labor Arbiter
Pablo C. Espiritu, Jr. rendered judgment ordering BMSI and RUST to pay respondent’s money
claims.[5] Upon appeal by BMSI, the NLRC reversed the decision of the Labor Arbiter and
dismissed respondent’s complaint on the ground of lack of jurisdiction.[6] Respondent
elevated the case to this Court but was dismissed in a Resolution dated 26 November 1997.
The Resolution became final and executory on 09 November 1998.

On 8 January 1999, respondent, then a resident of La Union, instituted an action for


damages before the Regional Trial Court (RTC) of Bauang, La Union. The Complaint,[7]
docketed as Civil Case No. 1192-BG, named as defendants herein petitioner Raytheon
International, Inc. as well as BMSI and RUST, the two corporations impleaded in the earlier
labor case. The complaint essentially reiterated the allegations in the labor case that BMSI
verbally employed respondent to negotiate the sale of services in government projects and

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that respondent was not paid the commissions due him from the Pinatubo dredging project
which he secured on behalf of BMSI. The complaint also averred that BMSI and RUST as well
as petitioner itself had combined and functioned as one company.

In its Answer,[8] petitioner alleged that contrary to respondent’s claim, it was a foreign
corporation duly licensed to do business in the Philippines and denied entering into any
arrangement with respondent or paying the latter any sum of money. Petitioner also denied
combining with BMSI and RUST for the purpose of assuming the alleged obligation of the
said companies.[9] Petitioner also referred to the NLRC decision which disclosed that per the
written agreement between respondent and BMSI and RUST, denominated as “Special Sales
Representative Agreement,” the rights and obligations of the parties shall be governed by the
laws of the State of Connecticut.[10] Petitioner sought the dismissal of the complaint on
grounds of failure to state a cause of action and forum non conveniens and prayed for
damages by way of compulsory counterclaim.[11]

On 18 May 1999, petitioner filed an Omnibus Motion for Preliminary Hearing Based on
Affirmative Defenses and for Summary Judgment[12] seeking the dismissal of the complaint
on grounds of forum non conveniens and failure to state a cause of action. Respondent
opposed the same. Pending the resolution of the omnibus motion, the deposition of Walter
Browning was taken before the Philippine Consulate General in Chicago.[13]

In an Order[14] dated 13 September 2000, the RTC denied petitioner’s omnibus motion. The
trial court held that the factual allegations in the complaint, assuming the same to be
admitted, were sufficient for the trial court to render a valid judgment thereon. It also ruled
that the principle of forum non conveniens was inapplicable because the trial court could
enforce judgment on petitioner, it being a foreign corporation licensed to do business in the
Philippines.[15]

Petitioner filed a Motion for Reconsideration[16] of the order, which motion was opposed by
respondent.[17] In an Order dated 31 July 2001,[18] the trial court denied petitioner’s
motion. Thus, it filed a Rule 65 Petition[19] with the Court of Appeals praying for the issuance
of a writ of certiorari and a writ of injunction to set aside the twin orders of the trial court
dated 13 September 2000 and 31 July 2001 and to enjoin the trial court from conducting
further proceedings.[20]

On 28 August 2003, the Court of Appeals rendered the assailed Decision[21] denying the
petition for certiorari for lack of merit. It also denied petitioner’s motion for reconsideration
in the assailed Resolution issued on 10 March 2004.[22]

The appellate court held that although the trial court should not have confined itself to the
allegations in the complaint and should have also considered evidence aliunde in resolving
petitioner’s omnibus motion, it found the evidence presented by petitioner, that is, the
deposition of Walter Browning, insufficient for purposes of determining whether the
complaint failed to state a cause of action. The appellate court also stated that it could not
rule one way or the other on the issue of whether the corporations, including petitioner,
named as defendants in the case had indeed merged together based solely on the evidence
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presented by respondent. Thus, it held that the issue should be threshed out during trial.[23]
Moreover, the appellate court deferred to the discretion of the trial court when the latter
decided not to desist from assuming jurisdiction on the ground of the inapplicability of the
principle of forum non conveniens.

Hence, this petition raising the following issues:

WHETHER OR NOT THE COURT OF APPEALS ERRED IN REFUSING TO DISMISS


THE COMPLAINT FOR FAILURE TO STATE A CAUSE OF ACTION AGAINST
RAYTHEON INTERNATIONAL, INC.

WHETHER OR NOT THE COURT OF APPEALS ERRED IN REFUSING TO DISMISS


THE COMPLAINT ON THE GROUND OF FORUM NON CONVENIENS.[24]

Incidentally, respondent failed to file a comment despite repeated notices. The Ceferino
Padua Law Office, counsel on record for respondent, manifested that the lawyer handling the
case, Atty. Rogelio Karagdag, had severed relations with the law firm even before the filing of
the instant petition and that it could no longer find the whereabouts of Atty. Karagdag or of
respondent despite diligent efforts. In a Resolution[25] dated 20 November 2006, the Court
resolved to dispense with the filing of a comment.

The instant petition lacks merit.

Petitioner mainly asserts that the written contract between respondent and BMSI included a
valid choice of law clause, that is, that the contract shall be governed by the laws of the
State of Connecticut. It also mentions the presence of foreign elements in the dispute –
namely, the parties and witnesses involved are American corporations and citizens and the
evidence to be presented is located outside the Philippines – that renders our local courts
inconvenient forums. Petitioner theorizes that the foreign elements of the dispute necessitate
the immediate application of the doctrine of forum non conveniens.

Recently in Hasegawa v. Kitamura,[26] the Court outlined three consecutive phases involved
in judicial resolution of conflicts-of-laws problems, namely: jurisdiction, choice of law, and
recognition and enforcement of judgments. Thus, in the instances[27] where the Court held
that the local judicial machinery was adequate to resolve controversies with a foreign
element, the following requisites had to be proved: (1) that the Philippine Court is one to
which the parties may conveniently resort; (2) that the Philippine Court is in a position to
make an intelligent decision as to the law and the facts; and (3) that the Philippine Court has
or is likely to have the power to enforce its decision.[28]

On the matter of jurisdiction over a conflicts-of-laws problem where the case is filed in a
Philippine court and where the court has jurisdiction over the subject matter, the parties and
the res, it may or can proceed to try the case even if the rules of conflict-of-laws or the
convenience of the parties point to a foreign forum. This is an exercise of sovereign
prerogative of the country where the case is filed.[29]

Jurisdiction over the nature and subject matter of an action is conferred by the Constitution

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and the law[30] and by the material allegations in the complaint, irrespective of whether or
not the plaintiff is entitled to recover all or some of the claims or reliefs sought therein.[31]
Civil Case No. 1192-BG is an action for damages arising from an alleged breach of contract.
Undoubtedly, the nature of the action and the amount of damages prayed are within the
jurisdiction of the RTC.

As regards jurisdiction over the parties, the trial court acquired jurisdiction over herein
respondent (as party plaintiff) upon the filing of the complaint. On the other hand,
jurisdiction over the person of petitioner (as party defendant) was acquired by its voluntary
appearance in court.[32]

That the subject contract included a stipulation that the same shall be governed by the laws
of the State of Connecticut does not suggest that the Philippine courts, or any other foreign
tribunal for that matter, are precluded from hearing the civil action. Jurisdiction and choice of
law are two distinct concepts. Jurisdiction considers whether it is fair to cause a defendant to
travel to this state; choice of law asks the further question whether the application of a
substantive law which will determine the merits of the case is fair to both parties.[33] The
choice of law stipulation will become relevant only when the substantive issues of the instant
case develop, that is, after hearing on the merits proceeds before the trial court.

Under the doctrine of forum non conveniens, a court, in conflicts-of-laws cases, may refuse
impositions on its jurisdiction where it is not the most “convenient” or available forum and
the parties are not precluded from seeking remedies elsewhere.[34] Petitioner’s averments of
the foreign elements in the instant case are not sufficient to oust the trial court of its
jurisdiction over Civil Case No. No. 1192-BG and the parties involved.

Moreover, the propriety of dismissing a case based on the principle of forum non conveniens
requires a factual determination; hence, it is more properly considered as a matter of
defense. While it is within the discretion of the trial court to abstain from assuming
jurisdiction on this ground, it should do so only after vital facts are established, to determine
whether special circumstances require the court’s desistance.[35]

Finding no grave abuse of discretion on the trial court, the Court of Appeals respected its
conclusion that it can assume jurisdiction over the dispute notwithstanding its foreign
elements. In the same manner, the Court defers to the sound discretion of the lower courts
because their findings are binding on this Court.

Petitioner also contends that the complaint in Civil Case No. 1192-BG failed to state a cause
of action against petitioner. Failure to state a cause of action refers to the insufficiency of
allegation in the pleading.[36] As a general rule, the elementary test for failure to state a
cause of action is whether the complaint alleges facts which if true would justify the relief
demanded.[37]

The complaint alleged that petitioner had combined with BMSI and RUST to function as one
company. Petitioner contends that the deposition of Walter Browning rebutted this allegation.
On this score, the resolution of the Court of Appeals is instructive, thus:

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x x x Our examination of the deposition of Mr. Walter Browning as well as other


documents produced in the hearing shows that these evidence aliunde are not
quite sufficient for us to mete a ruling that the complaint fails to state a cause of
action.

Annexes “A” to “E” by themselves are not substantial, convincing and conclusive
proofs that Raytheon Engineers and Constructors, Inc. (REC) assumed the
warranty obligations of defendant Rust International in the Makar Port Project in
General Santos City, after Rust International ceased to exist after being absorbed
by REC. Other documents already submitted in evidence are likewise meager to
preponderantly conclude that Raytheon International, Inc., Rust International[,]
Inc. and Brand Marine Service, Inc. have combined into one company, so much so
that Raytheon International, Inc., the surviving company (if at all) may be held
liable for the obligation of BMSI to respondent Rouzie for unpaid commissions.
Neither these documents clearly speak otherwise.[38]

As correctly pointed out by the Court of Appeals, the question of whether petitioner, BMSI
and RUST merged together requires the presentation of further evidence, which only a full-
blown trial on the merits can afford.

WHEREFORE, the instant petition for review on certiorari is DENIED. The Decision and
Resolution of the Court of Appeals in CA-G.R. SP No. 67001 are hereby AFFIRMED. Costs
against petitioner.

SO ORDERED.

Carpio, (Acting Chairperson), Sandoval-Gutierrez, Carpio-Morales, and Velasco, Jr., JJ.,


concur.

** As replacement of Justice Leonardo A. Quisumbing who inhibited himself per


Administrative Circular No. 84-2007.

[1] Rollo, pp. 42-46. Dated 28 August 2003; penned by Associate Justice Arsenio J. Magpale

and concurred in by Associate Justices Bienvenido L. Reyes, Acting Chairperson of the


Special Ninth Division, and Rebecca De Guia-Salvador.

[2] Id. at 47. Dated 10 March 2004.

[3] Id. at 48-49.

[4] Id. at 61-62.

[5] Id. at 63-74.

[6] Id. at 75-90.

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[7] Id. at 48-54.

[8] Id. at 91-99.

[9] Id. at 94.

[10] Id. at 96.

[11] Id. at 97-98.

[12] Id. at 100-111.

[13] Records, Vol. I, pp. 180-238.

[14] Rollo, pp. 127-131.

[15] Id. at 130.

[16] Id. at 132-149.

[17] Id. at 150-151.

[18] Id. at 162.

[19] Id. at 163-192.

[20] Id. at 191.

[21] Supra note 1.

[22] Supra note 2.

[23] Id. at 44.

[24] Id. at 18.

[25] Id. at 318.

[26] G.R. No. 149177, 23 November 2007.

[27] Bank of America NT & SA v. Court of Appeals, 448 Phil. 181 (2003); Puyat v. Zabarte,

405 Phil. 413 (2001); Philsec Investment Corporation v. Court of Appeals, G.R. No. 103493,
19 June 1997, 274 SCRA 102.

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[28] The Manila Hotel Corp. v. NLRC, 397 Phil. 1, 16-17 (2000); Communication Materials

and Design, Inc. v. CA, 329 Phil. 487, 510-511 (1996).

[29] Agpalo, Ruben E. CONFLICT OF LAWS (Private International Law), 2004 Ed., p. 491.

[30] Heirs of Julian Dela Cruz and Leonora Talaro v. Heirs of Alberto Cruz, G.R. No. 162890,

22 November 2005, 475 SCRA 743, 756.

[31] Laresma v. Abellana, G.R. No. 140973, 11 November 2004, 442 SCRA 156, 168.

[32] See Arcelona v. CA, 345 Phil. 250, 267 (1997).

[33] Hasegawa v. Kitamura, supra note 26.

[34] Bank of America NT & SA v. Court of Appeals, supra note 27.

[35] Philsec Investment Corporation v. Court of Appeals, supra note 27 at 113.

[36] Bank of America NT & SA v. Court of Appeals, supra note 27 at 194.

[37] Banco Filipino Savings and Mortgage Bank v. Court of Appeals, G.R. No. 143896, 8 July

2005, 463 SCRA 64, 73.

[38] Rollo, p. 44.

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50 Phil. 867

[ G.R. No. 22595, November 01, 1924 ]

TESTATE ESTATE OF JOSEPH G. BRIMO. JUAN MICIANO,


ADMINISTRATOR, PETITIONER AND APPELLEE, VS. ANDRE BRIMO,
OPPONENT AND APPELLANT.

DECISION

ROMUALDEZ, J.:

The partition of the estate left by the deceased Joseph G. Brimo is in question in this case.

The judicial administrator of this estate filed a scheme of partition. Andre Brimo, one of the
brothers of the deceased, opposed it. The court, however, approved it.

The errors which the oppositor-appellant assigns are: (1) The approval of said scheme
of partition; (2) the denial of his participation in the inheritance; (3) the denial of the
motion for reconsideration of the order approving the partition; (4) the approval of the
purchase made by Pietro Lanza of the deceased's business and the deed of transfer of said
business; and (5) the declaration that the Turkish laws are impertinent to this cause, and
the failure not to postpone the approval of the scheme of partition and the delivery of the
deceased's business to Pietro Lanza until the receipt of the depositions requested in
reference to the Turkish laws.

The appellant's opposition is based on the fact that the partition in question puts into
effect the provisions of Joseph G. Brimo's will which are not in accordance with the laws of
his Turkish nationality, for which reason they are void as being in violation of article 10 of
the Civil Code which, among other things, provides the following:

"Nevertheless, legal and testamentary successions, in respect to the order of


succession as well as to the amount of the successional rights and the intrinsic
validity of their provisions, shall be regulated by the national law of the person
whose succession is in question, whatever may be the nature of the property or
the country in which it may be situated."

But the fact is that the oppositor did not prove that said testamentary dispositions are not in
accordance with the Turkish laws, inasmuch as he did not present any evidence showing
what the Turkish laws are on the matter, and in the absence of evidence on such laws, they
are presumed to be the same as those of the Philippines. (Lim and Urn vs. Collector of
Customs, 36 Phil., 472.)

It has not been proved in these proceedings what the Turkish laws are. He, himself,
acknowledges it when he desires to be given an opportunity to present evidence on this
point; so much so that he assigns as an error of the court in not having deferred the
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approval of the scheme of partition until the receipt of certain testimony requested
regarding the Turkish laws on the matter. The refusal to give the oppositor another
opportunity to prove such laws does not constitute an error. It is discretionary with the trial
court, and, taking into consideration that the oppositor was granted ample opportunity to
introduce competent evidence, we find no abuse of discretion on the part of the court in
this particular.

There is, therefore, no evidence in the record that the national law of the testator Joseph G.
Brimo was violated in the testamentary dispositions in question which, not being contrary to
our laws in force, must be complied with and executed.

Therefore, the approval of the scheme of partition in this respect was not erroneous.

In regard to the first assignment of error which deals with the exclusion of the herein
appellant as a legatee, inasmuch as he is one of the persons designated as such in the
will, it must be taken into consideration that such exclusion is based on the last part of the
second clause of the will, which says:

"Second. I likewise desire to state that although, by law, I am a Turkish


citizen, this citizenship having been conferred upon me by conquest and not by
free choice, nor by nationality and, on the other hand, having resided for a
considerable length of time in. the Philippine Islands where I succeeded in
acquiring all of the property that I now possess, it is my wish that the
distribution of my property and everything in connection with this, my will, be
made and disposed of in accordance with the laws in force in the Philippine
Islands, requesting all of my relatives to respect this wish, otherwise, I annul and
cancel beforehand whatever disposition found in this will favorable to the person
or persons who fail to comply with this request."

The institution of legatees in this will is conditional, and the condition is that the instituted
legatees must respect the testator's will to distribute his property, not in accordance with
the laws of his nationality, but in accordance with the laws of the Philippines.

If this condition as it is expressed were legal and valid, any legatee who fails to comply
with it, as the herein oppositor who, by his attitude in these proceedings has not
respected the will of the testator, as expressed, is prevented from receiving his legacy.

The fact is, however, that the said condition is void, being contrary to law, for article 792
of the Civil Code provides the following:

"Impossible conditions and those contrary to law or good morals shall be


considered as not imposed and shall not prejudice the heir or legatee in any
manner whatsoever, even should the testator otherwise provide."

And said condition is contrary to law because it expressly ignores the testator's national
law when, according to article 10 of the Civil Code above quoted, such national law of the
testator is the one to govern his testamentary dispositions.

Said condition then, in the light of the legal provisions above cited, is considered unwritten,
and the institution of legatees in said will is unconditional and consequently valid and
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effective even as to the herein oppositor.

It results from all this that the second clause of the will regarding the law which shall govern
it, and to the condition imposed upon the legatees, is null and void, being contrary to law.

All of the remaining clauses of said will with all their dispositions and requests are perfectly
valid and effective it not appearing that said clauses are contrary to the testator's national
laws.

Therefore, the orders appealed from are modified and it is directed that the distribution of
this estate be made in such a manner as to include the herein appellant Andre Brimo as
one of the legatees, and the scheme of partition submitted by the judicial administrator is
approved in all other respects, without any pronouncement as to costs. So ordered.

Street, Malcolm, Avanceña, Villamor, and Ostrand, JJ., concur.

Johnson, J., dissents.

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117 Phil. 96

[ G. R. No. L-16749, January 31, 1963 ]

IN THE MATTER OF THE TESTATE ESTATE OF EDWARD E. CHRISTENSEN,


DECEASED. ADOLFO C. AZNAR, EXECUTOR AND LUCY CHRISTENSEN,
HEIR OF THE DECEASED, EXECUTOR AND HEIR-APPELLEES, VS. HELEN
CHRISTENSEN GARCIA, OPPOSITOR AND APPELLANT.

DECISION

LABRADOR, J.:

This is an appeal from a decision of the Court of First Instance of Davao, Hon. Vicente N.
Cusi, Jr., presiding, in Special Proceeding No. 622 of said court, dated September 14, 1949,
approving among other things the final accounts of the executor, directing the executor to
reimburse Maria Lucy Christensen the amount of P3,600 paid by her to Helen Christensen
Garcia as her legacy, and declaring Maria Lucy Christensen entitled to the residue of the
property to be enjoyed during her lifetime, and in case of death without issue, one-half of
said residue to be payable to Mrs. Carrie Louise C. Borton, etc., in accordance with the
provisions of the will of the testator Edward E. Christensen. The Will was executed in Manila
on March 5, 1951 and contains the following provisions:

"3. I declare * * * that I have but one (1) child, named Maria Lucy Christensen
(now Mrs. Bernard Daney), who was born in the Philippines about twenty-eight
years ago, and who is now residing at No. 665 Rodger Young Village, Los Angeles,
California, U.S.A.

"4. I further declare that I now have no living ascendants, and no descendants
except my above named daughter, Maria Lucy Christensen Daney.

* * * * * * *

"7. I give, devise and bequeath unto Maria Helen Christensen, now married to
Eduardo Garcia, about eighteen years of age and who, notwithstanding the fact
that she was baptized Christensen, is not in any way related to me, nor has she
"been at any time adopted by me, and who, from all information I have now
resides in Egpit, Digos, Davao, Philippines, the sum of Three Thousand Six
Hundred Pesos (P3,600.00), Philippine Currency, the same to be deposited in trust
for the said Maria Helen Christensen with the Davao Branch of the Philippine
National Bank, and paid to her at the rate of One Hundred Pesos (P100.00),
Philippine Currency per month until the principal thereof as well as any interest
which may have accrued thereon, is exhausted.

* * * * * * *

"'12. I hereby give, devise and bequeath, unto my well-beloved daughter, the said
Maria Lucy Christensen Daney (Mrs. Bernard Daney), now residing as aforesaid at

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No. 665 Rodger Young Village, Los Angeles, California, U.S.A., all the Income from
the rest, remainder, and residue of my property and estate, real, personal and/ or
mixed, of whatsoever kind or character, and wheresoever situated, of which I may
he possessed at my death and which may have come to me from any source
whatsoever, during her lifetime: * * *"

It is in accordance with the above-quoted provisions that the executor in his final account
and project partition ratified the payment of only P3,600 to Helen Christensen Garcia and
proposed that the residue of the estate be transferred to his daughter, Maria Lucy
Christensen.

Opposition to the approval of the project of partition was filed by Helen Christensen Garcia,
insofar as it deprives her (Helen) of her legitime as an acknowledged natural child, she
having been declared by Us in G.R. Nos. L-11483-84 an acknowledged natural child of the
deceased Edward E. Christensen. The legal grounds of opposition are (a) that the distribution
should be governed by the laws of the Philippines , and (b) that said order of distribution is
contrary thereto insofar as it denies to Helen Christensen, one of two acknowledged natural
children, one-half of the estate in full ownership. In amplification of the above grounds it was
alleged that the law that should govern the estate of the deceased Christensen should not be
the internal law of California alone, but the entire law thereof because several foreign
elements are involved, that the forum is the Philippines and even if the case were decided in
California, Section 946 of the California Civil Code, which requires that the domicile of the
decedent apply, should be applicable. It was also alleged that Maria Helen Christensen
having been declared an acknowledged natural child of the decedent, she is deemed for all
purposes legitimate from the time of her birth.

The court below ruled that as Edward E. Christensen was a citizen of the United States and
of the State of California at the time of his death, the successional rights and intrinsic validity
of the provisions in his will are to be governed by the law of California, in accordance with
which a testator has the right to dispose of his property in the way he desires, because the
right of absolute dominion over his property is sacred and inviolable (In re McDaniel's Estate,
77 Cal. Appl. 2d 877, 176 P. 2d 952, and In re Kaufman, 117 Cal. 286, 49 Pac. 192, cited in
page 179, Record on Appeal). Oppositor Maria Helen Christensen, through counsel, filed
various motions for reconsideration, but these were denied. Hence this appeal.

The most important assignments of error are as follows:

The lower court erred in ignoring the decision of the Honorable Supreme Court
that Helen is the acknowledged natural child of Edward E. Christensen and,
consequently, in depriving her of her just share in the inheritance.

II

The lower Court erred in entirely ignoring and/or failing to recognize the existence
of several factors, elements and circumstances calling for the application of
international law.

III

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The lower court erred in failing to recognize that under international law,
particularly under the Renvoi Doctrine, the intrinsic validity of the testamentary
disposition or the distribution of the estate o£ the deceased Edward E.
Christensen should be governed by the laws of the Philippines.

IV

"The lower court erred in not declaring that the schedule of distribution submitted
by the executor is contrary to the Philippine laws.

The lower Court erred in not declaring that under the Philippine Laws Helen
Christensen Garcia. U entitled to one-half (1/2) of the estate in full ownership.
There is no question that Edward E. Christensen was a citizen of the United States
and of the State of California at the time of his death. But there is also no
question that at the time of his death he was domiciled in the Philippines , as
witness the following facts admitted by the executor himself in appellee's brief:

"In the proceedings for admission of the will to probate, the facts of record show
that the deceased Edward E. Christensen was born on November 29, 1875 , in
Now York City , N. Y., U.S.A. ; his first arrival in the Philippines , as an appointed
school teacher, was on July 1, 1901 , on board the U.S. Army Transport 'Sheridan'
with Port of Embarkation as the City of San . Francisco, in the State of California ,
U.S.A. Ho stayed in the, Philippines until 1904.

"In December, 1904, Mr. Christensen returned to the United States and stayed
there for the following nine years until 1913, during which time he resided in, and
was teaching school in Sacramento , California .

"Mr. Christensen's next arrival in the Philippines was in July of the year 1913.
However, in 1928, he again departed the Philippines for the United States and
came back here the following year, 1929. Some nine years later, in 1938, he again
returned to his own country, and came back to the Philippines the following year,
1939.

"Being an American citizen, Mr. Christensen was interned by the Japanese Military
Forces in the Philippines during "World War II. Upon liberation, in April 1945, he
left for the United States but returned to the Philippines in December, 1945.
Appellees' Collective Exhibits '6’, CFI Davao , Sp. Proc. 622, as Exhibits 'AA', 'BB’
and 'CC-Paney'; Exhs. 'MM', ‘MM-1', 'MM-2-Daney', and p. 473, t.s.n., July 21,
1953 .

"In April, 1901, Edward E. Christensen returned once more to California shortly
after the making of his last will and testament (now in question herein) which he
executed at his lawyers' offices in Manila on March 5, 1951 . He died at the St.
Luke's Hospital in the City of Manila on April 30, 1953 ." (Pp. 2-3)

In arriving at the conclusion that the domicile of the deceased is the Philippines, we are
persuaded by the fact that he was born in Now York, migrated to California and resided there
for nine years, and since he came to the Philippines in 1913 he returned to California very

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rarely and only for short visits (perhaps to relatives), and considering that he appears never
to have owned or acquired a home or properties in that state, which would indicate that he
would ultimately abandon the Philippines and make home in the State of California.

"Sec. 16. Residence is a term used with many shades of meaning from mere
temporary presence to the most permanent abode. Generally, however, it is used
to denote something more than mere physical presence." (Goodrich on Conflict of
Laws, p. 29)

As to his citizenship, however, we find that the citizenship that he acquired in California when
he resided in Sacramento, California from 1904 to 1913, was never lost by his stay in the
Philippines, for the latter was a territory of the United States (not a state) until 1946 and the
deceased appears to have considered himself as a citizen of California by the fact that when
he executed his will in 1951 he declared that he was a citizen of that Estate; so that he
appears never to have intended to abandon his California citizenship by acquiring another.
This conclusion is in accordance with the following principle expounded by Goodrich in his
Conflict of Laws.

"The terms 'residence' and 'domicile' might well be taken to mean the same thing,
a place of permanent abode. But domicile, as has been shown, has acquired a
technical meaning. Thus one may be domiciled in a place where he has never
been. And he may reside in a place where he has no domicile. The man with two
homes, between which he divides his time, certainly resides in each one, while
living in it. But if he went on business which would require his presence for
several weeks or months, he might properly be said to have sufficient connection
with the place to be called a resident. It is clear, however, that, if he treated his
settlement as continuing: only for the particular business in hand, not giving up
his former "home," he could not "he a domiciled New Yorker. Acquisition of a
domicile of choice requires the exercise of intention as well as physical presence.
'Residence simply requires bodily presence as an inhabitant in a given places
while domicile requires bodily presence in that place and also an intention to
make it one's domicile.' Residence, however, is a term used with many shades of
meaning, from the merest temporary presence to the most permanent abode, and
it is not safe to insist that any one use is the only proper one." (Goodrich, p. 29)

The law that governs the Validity of his testamentary dispositions is defined in Article 16 of
the Civil Code of the Philippines , which is as follows:

"Art. 16. Real property as well as personal property is subject to the law of the
country where it is situated.
"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."

The application of this article in the case at bar requires the determination of the meaning of
the term "national law" as used therein.

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There is no single American law governing the validity of testamentary provisions in the
United States, each State of the Union having its own private law applicable to its citizens
only and in force only within the state, The "national law" indicated in Article 16 of the Civil
Code above quoted can not, therefore, possibly mean or apply to any general American law.
So it can refer to no other than the private law of the state of which the decedent is a citizen,
in the case at bar, the private law of the State of California .

The next question is: "What is the law in California governing the disposition of personal
property? The decision of the court below, sustains the contention of the executor-appellee
that under the California Probate Code, a testator may dispose of his property by will in the
form and manner he desires, citing the case of Estate of Mc Daniel, 77 Cal. Appl. 2d 877,
176 P. 2d 952. But appellant invokes the provisions of Article 946 of the Civil Code of
California, which is as follows:

"If there is no law to the contrary, in the place where personal property is
situated, it is deemed to follow the person of its owner, and is governed by the
law of his domicile."

The existence of this' provision is alleged in appellant's opposition and is not denied. We
have checked it in the California Civil Code and it is there. Appellee, on the other hand, relies
on the case cited in the decision and testified to by a witness. (Only the case Kaufman is
correctly cited.) It is argued on executor's behalf that as the deceased Christensen was a
citizen of the State of California, the internal law thereof, which is that given in the above-
cited case, should govern the determination of the validity of the testamentary provisions of
Christensen's will, such law being in force in the State of California of which Christensen was
a citizen. Appellant, on the other hand, insists that Article 946 should be applicable, and in
accordance therewith and following the doctrine of renvoi, the question of the validity of the
testamentary provision in question should be referred back to the law of the decedent's
domicile, which is the Philippines .

The theory or doctrine of renvoi has been defined by various authors, thus:

"The problem has been stated in this way: 'When the Conflict of Laws rule of the
forum refers a jural matter to a foreign law for decision, is the reference to the
corresponding rule of the Conflict of Law of that foreign law, or is the reference to
the purely internal rules of law of the foreign system; i.e., to the totality of the
foreign law, minus its Conflict of Laws rules?’

"On logic, the solution, is' not an easy one. The Michigan court chose, to accept
the renvoi, that is, applied the Conflict of Laws rule of Illinois which referred the
matter back to Michigan law. But once having: determined that the Conflict of
Laws principle is the rule looked to, it is difficult to see why the reference back
should not have been to Michigan Conflict of Laws. This would have resuited in the
'endless chain of references' which has so often been criticized by legal writers.
The opponents of the renvoi would have looked merely to the internal law of
Illinois , thus rejecting the renvoi or the reference back. Yet there seems no
compelling logical reason why the original reference should be to the internal law
rather than to the Conflict of Laws rule. It is true that such a solution avoids going
on a merry-go-round, but those who have accepted the renvoi theory avoid this
inextricabilis circulus by getting off at the second reference and at that point

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applying internal law. Perhaps the opponents of the renvoi are a bit more
consistent for they look always to internal law as the rule of reference.

"Strangely enough, both the advocates for and the objectors to the renvoi plead
that greater uniformity will result from adoption of their respective views. And still
more strange is the fact that the only way to achieve uniformity in this choice-of-
law problem is if in the dispute the two states whose laws form the legal basis of
the litigation disagree as to whether the renvoi should be accepted. It both reject,
or both accept the doctrine, the result of the litigation will vary with the choice of
the forum. In the case stated above, had the Michigan court rejected the renvoi,
judgment would have been against the woman; if the suit had been brought in
the Illinois courts, and they too rejected the renvoi, judgment would be for the
woman. The game result "would happen, though the courts would switch with
respect to which would hold liability, if both courts accepted the renvoi.

"The Restatement accepts the renvoi theory in two instances: where the title to
land is in question, and where the validity of a decree of divorce is challenged. In
these cases, the Conflict of Laws rule of the situs of the land, or the domicile of
the parties in the divorce case, is applied by the forum, but any further reference
goes only to the internal law. Thus, a person's title to land, recognized by the
situs, will be recognized by every court; and every divorce, valid by the domicile
of the parties, will be valid everywhere." (Goodrich, Conflict of Laws, Sec. 7, pp.
18-14.)

"X, a citizen of Massachusetts , dies intestate, domiciled in France , leaving


movable property in Massachusetts , England , and France . The question arises
as to how this property is to be distributed among X's nest of kin.

"Assume (1) that this question arises in a Massachusetts court. There the rule of
the conflict of laws as to intestate succession to movables calls for an application
of the law of the deceased's last domicile. Since by hypothesis X's last domicile
was France, the natural thing for the Massachusetts court to do would be to turn
to French statute of distributions, or whatever corresponds thereto in French law,
and decree a distribution accordingly. An examination of French law, however,
would show that if a French court were called upon to determine how this
property should be distributed, it would refer the distribution to, the national law
of the deceased, thus applying the Massachusetts state of distributions. So on the
surface of things the Massachusetts court has open to it alternative course of
action: (a) either to apply the French laws as to intestate succession, or (b) to
resolve itself into a French court and apply the Massachusetts statute of
distributions, on the assumption that this is what, a French court would do. If it
accepts the so-called renvoi doctrine, it will follow the latter course, thus applying
its own law.

"This is one type of renvoi. A jural matter is presented which the conflict-of-laws
rule of the forum refers to a foreign law; the conflict-of-laws rule of which, in turn
refers the matter back again to the law of the forum. This is renvoi in the
norrower sense. The German term for this judicial process is 'Ruckverweisung.'"
(Harvard Law Review, Vol. 31, pp. 523-571.)

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"After a decision has been arrived at that a foreign law is to be resorted to as


governing a particular case, the further question may arise: Are the rules as to
the conflict of laws contained in such foreign law also to be resorted to? This is a
question which, while it has been considered by the courts in but a few instances,
has been the subject of frequent discussion by textwriters and essayists; and the
doctrine involved has been descriptively designated by them as the 'Renvoyer' to
send back, or the Ruchverswisung', or the 'Weiterverweisung', since an affirmative
answer to the question postulated and the operation of the adoption of the foreign
law in toto would in many cases result in returning the main controversy to be
decided according to the law of the forum' * * *" (15 C.J.S. 872.)

"Another theory, known as the 'doctrine of renvoi', has been advanced. The theory
of the doctrine of renvoi is that the court of the forum, in determining the
question before it, must take into account the whole law of the other jurisdiction,
but also its rules as to conflict of laws, and then apply the law to the actual
question which the rules of the other jurisdiction prescribe. This may be the law of
the forum. The doctrine of the renvoi has generally been repudiated by the
American authorities." (2 Am. Jur. 296.)

The scope of the theory of renvoi has also been defined and the reasons for its application in
a country explained by Prof. Lorenzen in an article in the Yale Law Journal, Vol. 27, 1917-
1918, pp. 509-531. The pertinent parts of the article are quoted herein below:

"The recognition of the renvoi theory implies that the rules of the conflict of laws
are to be understood as incorporating not only the ordinary or internal law of the
foreign state or country, but its rules of the conflict of laws as well. According to
this theory the law of a country’ means the whole of its law.

* * * * * * *

"Von Bar presented his views at the meeting of the institute of International Law ,
at Neuchatel, in 1900, in the form of the following theses:

"(1) Every court shall observe the law of its country as regards the application of
foreign laws.

"(2) Provided that no express provision to the contrary exists, the court shall
respect:

"(a) The provisions of a foreign law which disclaims the right to bind its
nationals abroad as regards their personal statute, and desires that
said personal statute shall be determined by law of the domicile, or
even by the law of the place where the act in question occurred.

"(b) The decision of two or more foreign systems of law, provided it be


certain that one of them is necessarily competent, which agree in
attributing the determination of a question to the same system of law.

* * * * * * *

"If, for example, the English Law directs its judge to distribute the personal estate
of an Englishman who has died domiciled in Belgium in accordance with the law of
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his domicile, he must first inquire whether the law of Belgium would, distribute
personal property upon death in accordance with the law of domicile, and if he
finds that the Belgian law would make the distribution in accordance with the law
of nationality—that is the English law,—he must accept this reference back to his
own law."

We note that Article 946 of the California Civil Code as its conflict of laws rule while the rule
applied in In re Kaufman, supra, its internal law. If the law on succession and the conflict of,
law rules of California are to be enforced jointly, each in its own intended and appropriate
sphere, the principle cited In re Kaufman should apply to citizens living in the State, but
Article 946 should apply to such of its citizens as are not domiciled in California but in other
jurisdictions. The rule laid down of resorting to the law of the domicile in the determination
of matters with foreign element involved is in accord with the general principle of American
law that the domiciliary law should govern in most matters or rights which follow the person
of the owner.

"When a man dies leaving personal property in one or more states, and leaves a
will directing the manner of distribution of the property, the law of the state where
he was domiciled at the time of his death win be looked to in deciding legal
questions about the will, almost as completely as the law of the situs is consulted
in questions about the devise of land. It is logical that, since the domiciliary rules
control devolution of the personal estate in ease of intestate succession, the same
rules should determine the validity of an attempted testamentary disposition of
the property. Here, also, it is not that the domiciliary has effect beyond the
borders of the domiciliary state. The rules of the domicile are recognized as
controlling by the Conflict of Laws rules at the situs of the property, and the
reason for the recognition as in the case of intestate succession, is the general
convenience of the doctrine. The New York court has said on the point; 'The
general principle that a disposition of personal property, valid at the domicile of
the owner, is valid everywhere, is one of universal application. It had its origin in
that international comity which was one of the first fruits of civilization, and in this
age, when business intercourse and the process of accumulating1 property take
but little notice of boundary lines, the practical wisdom and justice of the rule is
more apparent than ever.'" (Goodrich, Conflict of Laws, Sec. 164, pp. 442-443.)

Appellees argue that what Article 16 of the Civil Code of the Philippines pointed out as the
national law is the internal law of California . But as above explained, the laws of California
have prescribed two sets of laws for its citizens, one for residents therein and. another for
those domiciled in other jurisdictions. Reason demands that We should enforce the California
, internal law prescribed for its citizens residing therein, and enforce the conflict of law rules
law for the citizens domiciled abroad. If we must enforce the law of California as in comity
we are bound to do, as so declared in Article 16 of our Civil Code, then we must enforce the
law of California in accordance with the express mandate thereof and as above explained,
i.e., apply the internal law for residents therein, and its conflict of laws rule for those
domiciled abroad.

It is argued on appellees behalf that the clause "if there is no law to the contrary in the place
where the property is situated" in. Sec. 946 of the California Civil Coda refers to Article 16 of
the Civil Code of the Philippines and that the law to the contrary in the Philippines is the
provision in said Article 16 that the national of the deceased should govern. This contention
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can not be sustained. As explained in the various authorities cited above the national law
mentioned in Article 16 of our Civil Code is the law on conflict of laws in the California Civil
Code, i.e., Article 946, which authorizes the reference or return of the question to the law of
the testator's domicile. The conflict of law rule in California, Article 946, Civil Code, precisely
refers back the case, when a decedent is not domiciled in California, to the law of his
domicile, the Philippines in the case at bar. The court of the domicile can not and should not
refer the case back to California; such action would leave the issue incapable of
determination because the case will then be like a football, tossed back and forth between
the two states, between the country of which the decedent was a citizen and the country of
his domicile. The Philippine court must apply its own law as directed in the conflict of law rule
of the state of the decedent, if the question has to be decided, especially as the application
of the internal law of California provides no legitime for children while the Philippine law,
Arts. 887 (4) and 894, Civil Code of the Philippines , makes natural children legally
acknowledged forced heirs of the parent recognizing them.

The Philippine cases (In Re Estate of Johnson, 39 Phil., 156; Riera vs. Palmaroli, 40 Phil.,
105; Miciano vs. Brimo, 50 Phil., 867; Babcock Templeton vs. Rider Babcock, 52 Phil., 130;
and Gibbs vs. Government, 59 Phil., 293.) cited by appellees to support the decision can not
possibly apply in the case at bar, for two important reasons, i.e., the subject in each case
does not appear to be a citizen of a state in the United States but with domicile in the
Philippines, and it does not appear in each case that there exists in the state of which the
subject is a citizen, a law similar to or identical with Art. 946 of the California Civil Code.

We therefore find that as the domicile of the deceased Christensen, a citizen of California , is
the Philippines , the validity of the provisions of his will depriving his acknowledged natural
child, the appellant, should be governed by the Philippine law, the domicile, pursuant to Art.
946 of the Civil Code of California, not by the internal law of California .

Wherefore, the decision appealed from is hereby reversed and the case returned to the lower
court with instructions that the partition be made as the Philippine law on succession
provides. Judgment reversed, with costs against appellees.

Padilla, Bautista Angelo, Concepcion, Reyes J.B.L., Barrera, Paredes, Dizon, Regala and
Makalintal, JJ., concur.

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583 Phil. 64

THIRD DIVISION

[ G.R. No. 147597, August 06, 2008 ]

CLARISSA U. MATA, DOING BUSINESS UNDER THE FIRM NAME


BESSANG PASS SECURITY AGENCY, PETITIONER, VS. ALEXANDER M.
AGRAVANTE, EDDIE E. SANTILLAN, PATRICIO A. ARMODIA,
ALEJANDRO A. ALMADEN AND HERMENEGILDO G. SALDO,
RESPONDENTS.

DECISION

NACHURA, J.:

Before us is a petition for review on certiorari assailing the decision[1] of the Court of Appeals
(CA) which dismissed petitioner's complaint for damages filed against the respondents.

The antecedent facts are as follows:

Respondents Eddie E. Santillan, Patricio A. Armodia, Alejandro A. Almaden and Hermenegildo


G. Saldo were former security guards of the Bessang Pass Security Agency, owned by herein
petitioner Clarissa Mata.

On October 27, 1993, the respondents, assisted by their counsel, Atty. Alexander Agravante,
filed a complaint with the National Labor Relations Commission (NLRC) in Cebu City for non-
payment of salaries/wages and other benefits.[2] Subsequently, they filed an affidavit-
complaint with the Philippine National Police (PNP) in Cramp Crame, Quezon City requesting
an investigation of the Bessang Pass Security Agency and cancellation of its license to
operate as security agency for violation of labor laws. Copies of this affidavit-complaint were
likewise sent to the following offices: (1) Office of the President, (2) Office of the Secretary
of Public Works and Highways, (3) Office of the PNP Director General, (4) PNP Chief
Superintendent Warlito Capitan, (5) Office of the DILG Secretary, (6) Ombudsman Conrado
Vasquez and (7) Office of the Vice-President.

On January 6, 1994, petitioner instituted an action for damages against the respondents
averring that respondents filed unfounded, baseless complaints before the NLRC for alleged
violation of the labor laws and with the PNP for cancellation of its license to operate. She
further alleged that by furnishing the government offices copies of these complaints,
especially the Department of Public Works and Highways which was its biggest client, the
agency's reputation was besmirched, resulting in the loss of contracts/projects and income in
the amount of at least P5,000,000.00. Petitioner then declared that respondents' deliberate
and concerted campaign of hate and vilification against the Bessang Pass Security Agency
violated the provisions of Articles 19, 20, and 21 of the Civil Code, and thus, prayed that the
respondents be held jointly and severally liable to pay her the sum of P1,000,000.00 as

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moral damages, attorney's fees in the amount of P200,000.00 and other reliefs.

On August 4, 1999, the trial court rendered judgment, the dispositive portion of which reads,
as follows:

WHEREFORE, premises considered, judgment is hereby rendered in favor of


plaintiff and against defendants ordering the latter to pay plaintiff the sum of ONE
MILLION (P1,000,000.00) PESOS as moral damages.[3]

On the basis of the evidence adduced by the petitioner ex parte, the trial court found
preponderant evidence enough to justify petitioner's cause of action. It gave credence to the
petitioner's contentions that the respondents had no other motive in sending the letter to the
seven (7) government offices except to unduly prejudice her good name and reputation. The
trial court, however, did not award the sum of P5,000,000.00 as petitioner's estimated loss
of income for being speculative.

On appeal, the CA reversed and set aside the trial court's decision. It dismissed the
complaint for lack of merit.

Hence, this petition anchored on the following grounds:

WITH ALL DUE RESPECT, THE HONORABLE COURT OF APPEALS COMMITTED A


SERIOUS REVERSIBLE ERROR, AMOUNTING TO GRAVE ABUSE OF DISCRETION
WHEN IT REVERSED AND SET ASIDE THE DECISION OF THE REGIONAL TRIAL
COURT, BRANCH 89 IN QUEZON CITY AND FURTHER CONCLUDED THAT
RESPONDENTS' ACT OF FURNISHING COPIES OF THEIR LETTER-COMPLAINT NOT
ONLY TO SEVEN (7) NATIONAL AGENCIES BUT ALSO TO PETITIONER'S BIGGEST
CLIENT, WAS NOT TAINTED WITH BAD FAITH AND WITH THE SOLE MOTIVE TO
MALIGN THE GOOD NAME AND REPUTATION OF PETITIONER.

WITH ALL DUE RESPECT, THE HONORABLE COURT OF APPEALS COMMITTED


SERIOUS ERROR IN THE APPRECIATION OF FACTS AND APPLICATION OF LAWS,
WHICH IF NOT RECTIFIED, WOULD CAUSE IRREPARABLE INJURY AND DAMAGE
TO HEREIN PETITIONER.

WITH ALL DUE RESPECT, THE HONORABLE COURT OF APPEALS COMMITTED A


SERIOUS REVERSIBLE ERROR, AMOUNTING TO GRAVE ABUSE OF DISCRETION,
WHEN IT REVERSED AND SET ASIDE THE DECISION OF THE REGIONAL TRIAL
COURT, BRANCH 89 IN QUEZON CITY, NOTWITHSTANDING RESPONDENTS
HAVING BEEN DECLARED IN DEFAULT.[4]

Petitioner contends that the respondents were so driven by unrestrained hatred and revenge
that they not only succeeded in disseminating the letter-complaint to the 7 government
offices but to the DPWH, her biggest client, with the intention to destroy her reputation and,
more importantly, her business. She posits that this would mean a loss of employment for
numerous employees throughout the country who solely depend on the security agency for
their existence, and that respondents obviously failed to see this fact. She claims that the
respondents have abused their rights, to her prejudice, and that of the security agency which
has tried very hard to protect its name and hard-earned reputation. Petitioner then

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concludes that the respondents have violated Articles 19 and 21 of the Civil Code and should
be held liable for damages.[5]

We are not impressed. We are more in accord with the findings and conclusions of the
respondent court that petitioner is not entitled to any award of damages. We agree with the
respondent court's explanation, viz.:

In filing the letter-complaint (Exhibit "D") with the Philippine National Police and
furnishing copies thereof to seven (7) other executive offices of the national
government, the defendants-appellants may not be said to be motivated simply
by the desire to "unduly prejudice the good name and reputation" of plaintiff-
appellee. Such act was consistent with and a rational consequence of seeking
justice through legal means for the alleged abuses defendants-appellants suffered
in the course of their employment with plaintiff-appellee, which started with the
case for illegal dismissal and non-payment of backwages and benefits earlier filed
with the NLRC Regional Arbitration Branch in Cebu City. In exhausting the legal
avenues to air their legitimate grievances, the paramount and overriding concern
of the defendants-appellants - who had already suffered from retaliatory acts of
their employer when they manifested their desire to take formal action on the
violations of labor laws committed by employer - is to secure government
intervention or action to correct or punish their employer, plaintiff-appellee, in
accordance with the provisions of existing laws or rules and regulations which
may be applicable to their situation. And in this process, the intervention of the
Philippine National Police was sought in view of its mandated role of
administrative supervision over security agencies like plaintiff-appellee.

Section 8 of Republic Act No. 5487, otherwise known as the "Private Security
Agency Law," empowered the Chief of the former Philippine Constabulary (PC) at
any time "to suspend or cancel the licenses of private watchman or security guard
agency found violating any of the provisions of this Act or of the rules and
regulations promulgated by the Chief of Constabulary pursuant thereto." With the
enactment of Republic Act No. 6975 ("Department of the Interior and Local
Government Act of 1990"), the PC-INP was abolished and in its place, a new
police force was established, the Philippine National Police (PNP). Among the
administrative support units of the PNP under the new law is the Civil Security
Unit which shall provide administrative services and general supervision over the
organization, business operation and activities of all organized private detectives,
watchmen, security guard agencies and company guard houses. It was thus but
logical for defendants-appellants, as advised by their counsel, to also
communicate their grievances against their employer security guard agency with
the PNP. The act of furnishing copies to seven (7) other executive offices,
including that of the Office of the President, was merely to inform said offices of
the fact of filing of such complaint, as is usually done by individual complainants
seeking official government action to address their problems or grievances. Their
pending case with the NLRC would not preclude them from seeking assistance
from the PNP as said agency is the national body that exercises general
supervision over all security guard agencies in the country, the defendants-
appellants were of the honest belief that the violation of labor laws committed by
their employer will elicit proper action from said body, providing them with a relief
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(cancellation of license) distinct from those reliefs sought by them from the NLRC
(payment of backwages and benefits). Certainly, defendants-appellants had good
reason to believe that bringing the matter to PNP is justified as no private security
agency found to be violating labor laws should remain in good standing with or
[be] tolerated by the PNP. Despite the pendency of the NLRC case, such request
for investigation of plaintiff-appellee could not in any way be tainted with malice
and bad faith where the same was made by the very individuals who suffered
from the illegal labor practices of plaintiff-appellee. Moreover, no liability could
arise from defendants-appellants' act of filing of the labor case with the NLRC
which plaintiff-appellee claimed to have resulted in the agency's not being able to
secure contracts because of such pending labor case, defendants-appellants
merely exercised a right granted to them by our labor laws.[6]

It has been held that Article 19,[7] known to contain what is commonly referred to as the
principle of abuse of rights, is not a panacea for all human hurts and social grievances. The
object of this article is to set certain standards which must be observed not only in the
exercise of one's rights but also in the performance of one's duties. These standards are the
following: act with justice, give everyone his due, and observe honesty and good faith. Its
antithesis is any act evincing bad faith or intent to injure.[8] Article 21 refers to acts contra
bonos mores and has the following elements: (1) an act which is legal; (2) but which is
contrary to morals, good custom, public order or public policy; and (3) is done with intent to
injure. The common element under Articles 19 and 21 is that the act complained of must be
intentional,[9] and attended with malice or bad faith. There is 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 this principle has been violated, resulting in damages under
Articles 20 and 21,[10] or other applicable provision of law, depends on the circumstances of
each case.[11] In the case before us, as correctly pointed out by the CA, the circumstances
do not warrant an award of damages. Thus, the award of P1,000,000.00 as moral damages
is quite preposterous. We agree with the appellate court that in the action of the
respondents, there was no malicious intent to injure petitioner's good name and reputation.
The respondents merely wanted to call the attention of responsible government agencies in
order to secure appropriate action upon an erring private security agency and obtain redress
for their grievances. So, we reiterate the basic postulate that in the absence of proof that
there was malice or bad faith on the part of the respondents, no damages can be awarded.

WHEREFORE, the petition is DENIED. The Decision of the Court of Appeals is AFFIRMED.

SO ORDERED.

Ynares-Santiago, (Chairperson), Austria-Martinez, Chico-Nazario, and Reyes, JJ., concur.

[1] Penned by Associate Justice Martin S. Villarama, Jr., with Associate Justices Conrado M.

Vasquez, Jr. and Perlita J. TriaTirona, concurring; rollo, pp. 38-44.

[2] NLRC Case No. RAB-VII-10-0899-93.

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[3] Rollo, p. 75.

[4] Id. at 18-19.

[5] Id. at 24.

[6] Id. at 42-43.

[7] Art. 19. Every person must in the exercise of his rights and in the performance of his

duties, act with justice, give everyone his due, and observe honesty and good faith.

[8] Nikko Hotel Manila Garden v. Reyes, G.R. No. 154259, February 28, 2005, 452 SCRA 532,

546-547.

[9] Id. at 547.

[10] Art. 20. Every person who, contrary to law, willfully or negligently causes damage to

another, shall indemnify the latter for the same.

Art. 21. Any person who willfully causes loss or injury to another in a manner that is contrary
to morals, good customs or public policy shall compensate the latter for the damage.

[11] Albenson Enterprises Corporation v. Court of Appeals, G.R. No. 88694, January 11,

1993, 217 SCRA 16, 25.

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492 Phil. 615

SECOND DIVISION

[ G.R. NO. 154259, February 28, 2005 ]

NIKKO HOTEL MANILA GARDEN AND RUBY LIM, PETITIONERS, VS.


ROBERTO REYES, A.K.A. “AMAY BISAYA,” RESPONDENT.

DECISION

CHICO-NAZARIO, J.:

In this petition for review on certiorari, petitioners Nikko Hotel Manila Garden (Hotel Nikko)
[1] and Ruby Lim assail the Decision[2] of the Court of Appeals dated 26 November 2001

reversing the Decision[3] of the Regional Trial Court (RTC) of Quezon City, Branch 104, as
well as the Resolution[4] of the Court of Appeals dated 09 July 2002 which denied petitioners’
motion for reconsideration.

The cause of action before the trial court was one for damages brought under the human
relations provisions of the New Civil Code. Plaintiff thereat (respondent herein) Roberto
Reyes, more popularly known by the screen name “Amay Bisaya,” alleged that at around
6:00 o’clock in the evening of 13 October 1994, while he was having coffee at the lobby of
Hotel Nikko,[5] he was spotted by his friend of several years, Dr. Violeta Filart, who then
approached him.[6] Mrs. Filart invited him to join her in a party at the hotel’s penthouse in
celebration of the natal day of the hotel’s manager, Mr. Masakazu Tsuruoka.[7] Mr. Reyes
asked if she could vouch for him for which she replied: “of course.”[8] Mr. Reyes then went up
with the party of Dr. Filart carrying the basket of fruits which was the latter’s present for the
celebrant.[9] At the penthouse, they first had their picture taken with the celebrant after
which Mr. Reyes sat with the party of Dr. Filart.[10] After a couple of hours, when the buffet
dinner was ready, Mr. Reyes lined-up at the buffet table but, to his great shock, shame and
embarrassment, he was stopped by petitioner herein, Ruby Lim, who claimed to speak for
Hotel Nikko as Executive Secretary thereof.[11] In a loud voice and within the presence and
hearing of the other guests who were making a queue at the buffet table, Ruby Lim told him
to leave the party (“huwag ka nang kumain, hindi ka imbitado, bumaba ka na lang”).[12] Mr.
Reyes tried to explain that he was invited by Dr. Filart.[13] Dr. Filart, who was within hearing
distance, however, completely ignored him thus adding to his shame and humiliation.[14] Not
long after, while he was still recovering from the traumatic experience, a Makati policeman
approached and asked him to step out of the hotel.[15] Like a common criminal, he was
escorted out of the party by the policeman.[16] Claiming damages, Mr. Reyes asked for One
Million Pesos actual damages, One Million Pesos moral and/or exemplary damages and Two
Hundred Thousand Pesos attorney’s fees.[17]

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Ruby Lim, for her part, admitted having asked Mr. Reyes to leave the party but not under the
ignominious circumstance painted by the latter. Ms. Lim narrated that she was the Hotel’s
Executive Secretary for the past twenty (20) years.[18] One of her functions included
organizing the birthday party of the hotel’s former General Manager, Mr. Tsuruoka.[19] The
year 1994 was no different. For Mr. Tsuruoka’s party, Ms. Lim generated an exclusive guest
list and extended invitations accordingly.[20] The guest list was limited to approximately sixty
(60) of Mr. Tsuruoka’s closest friends and some hotel employees and that Mr. Reyes was not
one of those invited.[21] At the party, Ms. Lim first noticed Mr. Reyes at the bar counter
ordering a drink.[22] Mindful of Mr. Tsuruoka’s wishes to keep the party intimate, Ms. Lim
approached Mr. Boy Miller, the “captain waiter,” to inquire as to the presence of Mr. Reyes
who was not invited.[23] Mr. Miller replied that he saw Mr. Reyes with the group of Dr. Filart.
[24] As Dr. Filart was engaged in conversation with another guest and as Ms. Lim did not

want to interrupt, she inquired instead from the sister of Dr. Filart, Ms. Zenaida Fruto, who
told her that Dr. Filart did not invite Mr. Reyes.[25] Ms. Lim then requested Ms. Fruto to tell
Mr. Reyes to leave the party as he was not invited.[26] Mr. Reyes, however, lingered
prompting Ms. Lim to inquire from Ms. Fruto who said that Mr. Reyes did not want to leave.
[27] When Ms. Lim turned around, she saw Mr. Reyes conversing with a Captain Batung

whom she later approached.[28] Believing that Captain Batung and Mr. Reyes knew each
other, Ms. Lim requested from him the same favor from Ms. Fruto, i.e., for Captain Batung to
tell Mr. Reyes to leave the party as he was not invited.[29] Still, Mr. Reyes lingered. When Ms.
Lim spotted Mr. Reyes by the buffet table, she decided to speak to him herself as there
were no other guests in the immediate vicinity.[30] However, as Mr. Reyes was already
helping himself to the food, she decided to wait.[31] When Mr. Reyes went to a corner and
started to eat, Ms. Lim approached him and said: “alam ninyo, hindo ho kayo dapat nandito.
Pero total nakakuha na ho kayo ng pagkain, ubusin na lang ninyo at pagkatapos kung pwede
lang po umalis na kayo.”[32] She then turned around trusting that Mr. Reyes would show
enough decency to leave, but to her surprise, he began screaming and making a big scene,
and even threatened to dump food on her.[33]

Dr. Violeta Filart, the third defendant in the complaint before the lower court, also gave her
version of the story to the effect that she never invited Mr. Reyes to the party.[34] According
to her, it was Mr. Reyes who volunteered to carry the basket of fruits intended for the
celebrant as he was likewise going to take the elevator, not to the penthouse but to Altitude
49.[35] When they reached the penthouse, she reminded Mr. Reyes to go down as he was not
properly dressed and was not invited.[36] All the while, she thought that Mr. Reyes already
left the place, but she later saw him at the bar talking to Col. Batung.[37] Then there was a
commotion and she saw Mr. Reyes shouting.[38] She ignored Mr. Reyes.[39] She was
embarrassed and did not want the celebrant to think that she invited him.[40]

After trial on the merits, the court a quo dismissed the complaint,[41] giving more credence
to the testimony of Ms. Lim that she was discreet in asking Mr. Reyes to leave the party. The
trial court likewise ratiocinated that Mr. Reyes assumed the risk of being thrown out of the
party as he was uninvited:

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Plaintiff had no business being at the party because he was not a guest of Mr.
Tsuruoka, the birthday celebrant. He assumed the risk of being asked to leave for
attending a party to which he was not invited by the host. Damages are pecuniary
consequences which the law imposes for the breach of some duty or the violation
of some right. Thus, no recovery can be had against defendants Nikko Hotel and
Ruby Lim because he himself was at fault (Garciano v. Court of Appeals, 212
SCRA 436). He knew that it was not the party of defendant Violeta Filart even if
she allowed him to join her and took responsibility for his attendance at the party.
His action against defendants Nikko Hotel and Ruby Lim must therefore fail.[42]

On appeal, the Court of Appeals reversed the ruling of the trial court as it found more
commanding of belief the testimony of Mr. Reyes that Ms. Lim ordered him to leave in a loud
voice within hearing distance of several guests:

In putting appellant in a very embarrassing situation, telling him that he should


not finish his food and to leave the place within the hearing distance of other
guests is an act which is contrary to morals, good customs . . ., for which
appellees should compensate the appellant for the damage suffered by the latter
as a consequence therefore (Art. 21, New Civil Code). The liability arises from the
acts which are in themselves legal or not prohibited, but contrary to morals or
good customs. Conversely, even in the exercise of a formal right, [one] cannot
with impunity intentionally cause damage to another in a manner contrary to
morals or good customs.[43]

The Court of Appeals likewise ruled that the actuation of Ms. Lim in approaching several
people to inquire into the presence of Mr. Reyes exposed the latter to ridicule and was
uncalled for as she should have approached Dr. Filart first and both of them should have
talked to Mr. Reyes in private:

Said acts of appellee Lim are uncalled for. What should have been done by
appellee Lim was to approach appellee Mrs. Filart and together they should have
told appellant Reyes in private that the latter should leave the party as the
celebrant only wanted close friends around. It is necessary that Mrs. Filart be the
one to approach appellant because it was she who invited appellant in that
occasion. Were it not for Mrs. Filart’s invitation, appellant could not have suffered
such humiliation. For that, appellee Filart is equally liable.

...

The acts of [appellee] Lim are causes of action which are predicated upon mere
rudeness or lack of consideration of one person, which calls not only protection of
human dignity but respect of such dignity. Under Article 20 of the Civil Code,
every person who violates this duty becomes liable for damages, especially if said
acts were attended by malice or bad faith. Bad faith does not simply connote bad
judgment or simple negligence. It imports a dishonest purpose or some moral
obliquity and conscious doing of a wrong, a breach of a known duty to some
motive or interest or ill-will that partakes of the nature of fraud (Cojuangco, Jr. v.
CA, et al., 309 SCRA 603).[44]

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Consequently, the Court of Appeals imposed upon Hotel Nikko, Ruby Lim and Dr. Violeta
Filart the solidary obligation to pay Mr. Reyes (1) exemplary damages in the amount of Two
Hundred Thousand Pesos (P200,000); (2) moral damages in the amount of Two Hundred
Thousand Pesos (P200,000); and (3) attorney’s fees in the amount of Ten Thousand Pesos
(P10,000).[45] On motion for reconsideration, the Court of Appeals affirmed its earlier
decision as the argument raised in the motion had “been amply discussed and passed upon
in the decision sought to be reconsidered.”[46]

Thus, the instant petition for review. Hotel Nikko and Ruby Lim contend that the Court of
Appeals seriously erred in –

I.
… NOT APPLYING THE DOCTRINE OF VOLENTI NON FIT INJURIA CONSIDERING
THAT BY ITS OWN FINDINGS, AMAY BISAYA WAS A GATE-CRASHER

II.
… HOLDING HOTEL NIKKO AND RUBY LIM JOINTLY AND SEVERALLY LIABLE WITH
DR. FILART FOR DAMAGES SINCE BY ITS OWN RULING, AMAY BISAYA “COULD
NOT HAVE SUFFERED SUCH HUMILIATION,” “WERE IT NOT FOR DR. FILART’S
INVITATION”

III.
… DEPARTING FROM THE FINDINGS OF FACT OF THE TRIAL COURT AS REGARDS
THE CIRCUMSTANCES THAT ALLEGEDLY CAUSED THE HUMILIATION OF AMAY
BISAYA

IV.
… IN CONCLUDING THAT AMAY BISAYA WAS TREATED UNJUSTLY BECAUSE OF
HIS POVERTY, CONSIDERING THAT THIS WAS NEVER AN ISSUE AND NO
EVIDENCE WAS PRESENTED IN THIS REGARD

V.
… IN FAILING TO PASS UPON THE ISSUE ON THE DEFECTS OF THE APPELLANT’S
BRIEF, THEREBY DEPARTING FROM THE ACCEPTED AND USUAL COURSE OF
JUDICIAL PROCEEDINGS

Petitioners Lim and Hotel Nikko contend that pursuant to the doctrine of volenti non fit
injuria, they cannot be made liable for damages as respondent Reyes assumed the risk of
being asked to leave (and being embarrassed and humiliated in the process) as he was a
“gate-crasher.”

The doctrine of volenti non fit injuria (“to which a person assents is not esteemed in law as
injury”[47]) refers to self-inflicted injury[48] or to the consent to injury[49] which precludes
the recovery of damages by one who has knowingly and voluntarily exposed himself to
danger, even if he is not negligent in doing so.[50] As formulated by petitioners, however, this
doctrine does not find application to the case at bar because even if respondent Reyes
assumed the risk of being asked to leave the party, petitioners, under Articles 19 and 21 of
the New Civil Code, were still under obligation to treat him fairly in order not to expose him

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to unnecessary ridicule and shame.

Thus, the threshold issue is whether or not Ruby Lim acted abusively in asking Roberto
Reyes, a.k.a. “Amay Bisaya,” to leave the party where he was not invited by the celebrant
thereof thereby becoming liable under Articles 19 and 21 of the Civil Code. Parenthetically,
and if Ruby Lim were so liable, whether or not Hotel Nikko, as her employer, is solidarily
liable with her.

As the trial court and the appellate court reached divergent and irreconcilable conclusions
concerning the same facts and evidence of the case, this Court is left without choice but to
use its latent power to review such findings of facts. Indeed, the general rule is that we are
not a trier of facts as our jurisdiction is limited to reviewing and revising errors of law.[51]
One of the exceptions to this general rule, however, obtains herein as the findings of the
Court of Appeals are contrary to those of the trial court.[52] The lower court ruled that Ms.
Lim did not abuse her right to ask Mr. Reyes to leave the party as she talked to him politely
and discreetly. The appellate court, on the other hand, held that Ms. Lim is liable for
damages as she needlessly embarrassed Mr. Reyes by telling him not to finish his food and to
leave the place within hearing distance of the other guests. Both courts, however, were in
agreement that it was Dr. Filart’s invitation that brought Mr. Reyes to the party.

The consequential question then is: Which version is credible?

From an in depth review of the evidence, we find more credible the lower court’s findings of
fact.

First, let us put things in the proper perspective.

We are dealing with a formal party in a posh, five-star hotel,[53] for-invitation-only, thrown
for the hotel’s former Manager, a Japanese national. Then came a person who was clearly
uninvited (by the celebrant)[54] and who could not just disappear into the crowd as his face
is known by many, being an actor. While he was already spotted by the organizer of the
party, Ms. Lim, the very person who generated the guest list, it did not yet appear that the
celebrant was aware of his presence. Ms. Lim, mindful of the celebrant’s instruction to keep
the party intimate, would naturally want to get rid of the “gate-crasher” in the most hush-
hush manner in order not to call attention to a glitch in an otherwise seamless affair and, in
the process, risk the displeasure of the celebrant, her former boss. To unnecessarily call
attention to the presence of Mr. Reyes would certainly reflect badly on Ms. Lim’s ability to
follow the instructions of the celebrant to invite only his close friends and some of the hotel’s
personnel. Mr. Reyes, upon whom the burden rests to prove that indeed Ms. Lim loudly and
rudely ordered him to leave, could not offer any satisfactory explanation why Ms. Lim would
do that and risk ruining a formal and intimate affair. On the contrary, Mr. Reyes, on cross-
examination, had unwittingly sealed his fate by admitting that when Ms. Lim talked to him,
she was very close. Close enough for him to kiss:

Q: And, Mr. Reyes, you testified that Miss Lim approached you while you were at
the buffet table? How close was she when she approached you?

A: Very close because we nearly kissed each other.

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Q: And yet, she shouted for you to go down? She was that close and she
shouted?

A: Yes. She said, “wag kang kumain, hindi ka imbitado dito, bumaba ka na lang.”

Q: So, you are testifying that she did this in a loud voice?

...

A: Yes. If it is not loud, it will not be heard by many.[55]

In the absence of any proof of motive on the part of Ms. Lim to humiliate Mr. Reyes and
expose him to ridicule and shame, it is highly unlikely that she would shout at him from a
very close distance. Ms. Lim having been in the hotel business for twenty years wherein
being polite and discreet are virtues to be emulated, the testimony of Mr. Reyes that she
acted to the contrary does not inspire belief and is indeed incredible. Thus, the lower court
was correct in observing that –

Considering the closeness of defendant Lim to plaintiff when the request for the
latter to leave the party was made such that they nearly kissed each other, the
request was meant to be heard by him only and there could have been no
intention on her part to cause embarrassment to him. It was plaintiff’s reaction to
the request that must have made the other guests aware of what transpired
between them. . .

Had plaintiff simply left the party as requested, there was no need for the police
to take him out.[56]

Moreover, another problem with Mr. Reyes’s version of the story is that it is unsupported. It is
a basic rule in civil cases that he who alleges proves. Mr. Reyes, however, had not presented
any witness to back his story up. All his witnesses – Danny Rodinas, Pepito Guerrero and
Alexander Silva - proved only that it was Dr. Filart who invited him to the party.[57]

Ms. Lim, not having abused her right to ask Mr. Reyes to leave the party to which he was not
invited, cannot be made liable to pay for damages under Articles 19 and 21 of the Civil Code.
Necessarily, neither can her employer, Hotel Nikko, be held liable as its liability springs from
that of its employee.[58]

Article 19, known to contain what is commonly referred to as the principle of abuse of rights,
[59] is not a panacea for all human hurts and social grievances. Article 19 states:

Art. 19. Every person must, in the exercise of his rights and in the performance of
his duties, act with justice, give everyone his due, and observe honesty and good
faith.

Elsewhere, we explained that 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 responsible.”[60] The object of this
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article, therefore, is to set certain standards which must be observed not only in the exercise
of one’s rights but also in the performance of one’s duties.[61] These standards are the
following: act with justice, give everyone his due and observe honesty and good faith.[62] Its
antithesis, necessarily, is any act evincing bad faith or intent to injure. Its elements 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.[63] When Article 19 is violated, an action for
damages is proper under Articles 20 or 21 of the Civil Code. Article 20 pertains to damages
arising from a violation of law[64] which does not obtain herein as Ms. Lim was perfectly
within her right to ask Mr. Reyes to leave. Article 21, on the other hand, states:

Art. 21. Any person who willfully causes loss or injury to another in a manner that
is contrary to morals, good customs or public policy shall compensate the latter
for the damage.

Article 21[65] refers to 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; and (3) it is done with intent to injure.[66]

A common theme runs through Articles 19 and 21,[67] and that is, the act complained of
must be intentional.[68]

As applied to herein case and as earlier discussed, Mr. Reyes has not shown that Ms. Lim was
driven by animosity against him. These two people did not know each other personally
before the evening of 13 October 1994, thus, Mr. Reyes had nothing to offer for an
explanation for Ms. Lim’s alleged abusive conduct except the statement that Ms. Lim, being
“single at 44 years old,” had a “very strong bias and prejudice against (Mr. Reyes) possibly
influenced by her associates in her work at the hotel with foreign businessmen.”[69] The
lameness of this argument need not be belabored. Suffice it to say that a complaint based on
Articles 19 and 21 of the Civil Code must necessarily fail if it has nothing to recommend it
but innuendos and conjectures.

Parenthetically, the manner by which Ms. Lim asked Mr. Reyes to leave was likewise
acceptable and humane under the circumstances. In this regard, we cannot put our
imprimatur on the appellate court’s declaration that Ms. Lim’s act of personally approaching
Mr. Reyes (without first verifying from Mrs. Filart if indeed she invited Mr. Reyes) gave rise to
a cause of action “predicated upon mere rudeness or lack of consideration of one person,
which calls not only protection of human dignity but respect of such dignity.”[70] Without
proof of any ill-motive on her part, Ms. Lim’s act of by-passing Mrs. Filart cannot amount to
abusive conduct especially because she did inquire from Mrs. Filart’s companion who told her
that Mrs. Filart did not invite Mr. Reyes.[71] If at all, Ms. Lim is guilty only of bad judgment
which, if done with good intentions, cannot amount to bad faith.

Not being liable for both actual and moral damages, neither can petitioners Lim and Hotel
Nikko be made answerable for exemplary damages[72] especially for the reason stated by
the Court of Appeals. The Court of Appeals held –

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Not a few of the rich people treat the poor with contempt because of the latter’s
lowly station in life. This has to be limited somewhere. In a democracy, such a
limit must be established. Social equality is not sought by the legal provisions
under consideration, but due regard for decency and propriety (Code Commission,
pp. 33-34). And by way of example or correction for public good and to avert
further commission of such acts, exemplary damages should be imposed upon
appellees.[73]

The fundamental fallacy in the above-quoted findings is that it runs counter with the very
facts of the case and the evidence on hand. It is not disputed that at the time of the incident
in question, Mr. Reyes was “an actor of long standing; a co-host of a radio program over
DZRH; a Board Member of the Music Singer Composer (MUSICO) chaired by popular singer
Imelda Papin; a showbiz Coordinator of Citizen Crime Watch; and 1992 official candidate of
the KBL Party for Governor of Bohol; and an awardee of a number of humanitarian
organizations of the Philippines.”[74] During his direct examination on rebuttal, Mr. Reyes
stressed that he had income[75] and nowhere did he say otherwise. On the other hand, the
records are bereft of any information as to the social and economic standing of petitioner
Ruby Lim. Consequently, the conclusion reached by the appellate court cannot withstand
scrutiny as it is without basis.

All told, and as far as Ms. Lim and Hotel Nikko are concerned, any damage which Mr. Reyes
might have suffered through Ms. Lim’s exercise of a legitimate right done within the bounds
of propriety and good faith, must be his to bear alone.

WHEREFORE, premises considered, the petition filed by Ruby Lim and Nikko Hotel Manila
Garden is GRANTED. The Decision of the Court of Appeals dated 26 November 2001 and its
Resolution dated 09 July 2002 are hereby REVERSED and SET ASIDE. The Decision of the
Regional Trial Court of Quezon City, Branch 104, dated 26 April 1999 is hereby AFFIRMED. No
costs.

SO ORDERED.

Puno, (Chairman), Austria-Martinez, Callejo, Sr., and Tinga, JJ., concur.

[1] Now Dusit Hotel Nikko.

[2] Penned by Associate Justice Eugenio S. Labitoria with Justices Teodoro P. Regino and

Rebecca de Guia-Salvador concurring (Rollo, pp. 48-57).

[3] Penned by Judge Thelma A. Ponferrada.

[4] Penned by Associate Justice Eugenio S. Labitoria with Justices Teodoro P. Regino and

Rebecca de Guia-Salvador concurring (Rollo, pp. 59-60).

[5] TSN, 08 March 1995, p. 8.

[6] Id. at 10.

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[7] Ibid.

[8] Id. 11.

[9] Id. at 13.

[10] Id. at 13 & 16.

[11] COMPLAINT, RTC Record, p. 2.

[12] Supra, note 5 at 17.

[13] Supra, note 11.

[14] Ibid.

[15] Id. at 2-3.

[16] Id. at 3.

[17] Ibid.

[18] TSN, 27 July 1996, p. 9.

[19] Id. at 10.

[20] Id. at 12-13, 15.

[21] Id. at 15-17, 25.

[22] Id. at 25.

[23] Id. at 27.

[24] Ibid.

[25] Id. at 31-32.

[26] Id. at 33.

[27] Id. at 37.

[28] Id. at 38-39.

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[29] Ibid.

[30] Petition, Rollo, p. 18.

[31] Supra, note 29 at 41-42.

[32] Id. at 42-43.

[33] Answer, pp. 32-33, RTC Records; RTC Decision, Rollo p. 62; TSN, 27 July 1995, pp. 43-

46.

[34] TSN, 05 November 1997, p. 15.

[35] Violeta Filart’s “ANSWER WITH COMPULSORY COUNTERCLAIM,” RTC Records, p. 21.

[36] Supra, note 34 at 17.

[37] Or “Captain Batung” from the testimony of Ruby Lim; Id. at 18.

[38] Id. at 19.

[39] Ibid.

[40] Ibid.

[41] Dismissed as well were the counterclaims filed by then defendants Nikko Hotel Manila

Garden, Ruby Lim and Violeta Filart, RTC Records, p. 347.

[42] RTC Records, p. 342.

[43] CA Rollo, p. 205.

[44] Id. at 208-209.

[45] Id. at 238.

[46] CA Rollo, pp. 239-240.

[47] E.L. Pineda, Torts and Damages Annotated, p. 52 (2004 ed).

[48] Garciano v. Court of Appeals, G.R. No. 96126, 10 August 1992, 212 SCRA 436, 440.

[49] cf. Servicewide Specialists, Inc. v. Intermediate Appellate Court, G.R. No. 74553, 08

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June 1989, 174 SCRA 80, 88.

[50] Sangco, Torts and Damages Vol.1 , pp. 83-84.

[51] Floro v. Llenado, G.R. No. 75723, 02 June 1995, 244 SCRA 713, 720.

[52] Ibid.

[53] TSN, 22 May 1999, p. 11.

[54] Admitted by Mr. Reyes, see TSN, 15 March 1995, p. 10.

[55] TSN, 15 March 1995, p. 20.

[56] RTC Records, pp. 340-341.

[57] Danny Rodinas and Pepito Guerrero (TSN, 18 May 1995), Alexander Silva (TSN, 21 June

1995).

[58] Article 2180, Civil Code.

[59] Globe-Mackay Cable and Radio Corp. v. Court of Appeals, G.R. No. 81262, 25 August

1989, 176 SCRA 779, 783.

[60] Albenson Enterprises Corp. v. Court of Appeals, G.R. No. 88694, 11 January 1993, 217

SCRA 16, 25.

[61] Supra, note 61 at 783-784.

[62] Ibid.

[63] Supra, note 62.

[64] Art. 20. Every person who, contrary to law, willfully or negligently causes damage to

another, shall indemnify the latter for the same. See Globe Mackay, supra, note 61 at 784.

[65] Civil Code.

[66] Supra, note 62 at 25.

[67] Civil Code.

[68] Ibid.

[69] “COMMENT,” Rollo, p. 302; “MEMORANDUM,” Rollo, p. 417.

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[70] CA Rollo, p. 209.

[71] In fact, Mrs. Filart herself, in her testimony and in her pleadings, consistently disclaimed

having invited Mr. Reyes to the party such that when Mr. Reyes was being escorted out of the
penthouse, she lifted nary a finger to his rescue.

[72] Art. 2234, Civil Code.

[73] CA Rollo, pp. 209-210.

[74] Appellant’s Brief, CA Rollo, p. 27; see also TSN, 08 March 1995, pp. 7-8.

[75] TSN, 29 October 1998, p. 11.

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373 Phil. 148

SECOND DIVISION

[ G.R. No. 128927, September 14, 1999 ]

REMEDIOS NOTA SAPIERA, PETITIONER, VS. COURT OF APPEALS AND


RAMON SUA, RESPONDENTS.

DECISION

BELLOSILLO, J.:

REMEDIOS NOTA SAPIERA appeals to us through this petition for review the Decision of the
Court of Appeals[1] which acquitted her of the crime of estafa but held her liable nonetheless
for the value of the checks she indorsed in favor of private respondent Ramon Sua.

On several occasions petitioner Remedios Nota Sapiera, a sari-sari store owner, purchased
from Monrico Mart certain grocery items, mostly cigarettes, and paid for them with checks
issued by one Arturo de Guzman: (a) PCIB Check No. 157059 dated 26 February 1987 for
P140,000.00; (b) PCIB Check No. 157073 dated 26 February 1987 for P28,000.00; (c) PCIB
Check No. 157057 dated 27 February 1987 for P42,150.00; and, d) Metrobank Check No.
DAG - 045104758 PA dated 2 March 1987 for P125,000.00. These checks were signed at the
back by petitioner. When presented for payment the checks were dishonored because the
drawer’s account was already closed. Private respondent Ramon Sua informed Arturo de
Guzman and petitioner about the dishonor but both failed to pay the value of the checks.
Hence, four (4) charges of estafa were filed against petitioner with the Regional Trial Court of
Dagupan City, docketed as Crim. Cases Nos. D-8728, D-8729, D-8730 and D-8731. Arturo
de Guzman was charged with two (2) counts of violation of B.P. Blg. 22, docketed as Crim.
Cases Nos. D-8733 and D-8734. These cases against petitioner and de Guzman were
consolidated and tried jointly.

On 27 December 1989 the court a quo[2] acquitted petitioner of all the charges of estafa but
did not rule on whether she could be held civilly liable for the checks she indorsed to private
respondent. The trial court found Arturo de Guzman guilty of Violation of B.P. Blg. 22 on two
(2) counts and sentenced him to suffer imprisonment of six (6) months and one (1) day in
each of the cases, and to pay private respondent P167,150.00 as civil indemnity.

Private respondent filed a notice of appeal with the trial court with regard to the civil aspect
but the court refused to give due course to the appeal on the ground that the acquittal of
petitioner was absolute. Private respondent then filed a petition for mandamus with the
Court of Appeals, docketed as CA-GR SP No. 24626, praying that the court a quo be ordered
to give due course to the appeal on the civil aspect of the decision. The Court of Appeals
granted the petition and ruled that private respondent could appeal with respect to the civil
aspect the judgment of acquittal by the trial court.

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On 22 January 1996, the Court of Appeals in CA-GR CV No. 36376 rendered the assailed
Decision insofar as it sustained the appeal of private respondent on the civil aspect and
ordering petitioner to pay private respondent P335,000.00 representing the aggregate face
value of the four (4) checks indorsed by petitioner plus legal interest from the notice of
dishonor.

Petitioner filed a motion for reconsideration of the Decision. On 19 March 1997 the Court of
Appeals issued a Resolution noting the admission of both parties that private respondent had
already collected the amount of P125,000.00 from Arturo de Guzman with regard to his civil
liability in Crim. Cases Nos. 8733 and 8734. The appellate court noted that private
respondent was the same offended party in the criminal cases against petitioner and against
de Guzman. Criminal Cases Nos. 8733 and 8734 against De Guzman, and Crim. Cases Nos.
8730 and 8729 against petitioner, involved the same checks, to wit: PCIB Checks Nos.
157057 for P42,150.00 and Metrobank Check No. DAG-045104758 PA for P125,000.00.

Thus, the Court of Appeals ruled that private respondent could not recover twice on the same
checks. Since he had collected P125,000.00 as civil indemnity in Crim. Cases Nos. 8733 and
8734, this amount should be deducted from the sum total of the civil indemnity due him
arising from the estafa cases against petitioner. The appellate court then corrected its
previous award, which was erroneously placed at P335,000.00, to P335,150.00 as the sum
total of the amounts of the four (4) checks involved. Deducting the amount of P125,000.00
already collected by private respondent, petitioner was adjudged to pay P210,150.00 as civil
liability to private respondent. Hence, this petition alleging that respondent Court of Appeals
erred in holding petitioner civilly liable to private respondent because her acquittal by the
trial court from charges of estafa in Crim. Cases Nos. D-8728, D-8729, D-8730 and D-8731
was absolute, the trial court having declared in its decision that the fact from which the civil
liability might have arisen did not exist.

We cannot sustain petitioner. The issue is whether respondent Court of Appeals committed
reversible error in requiring petitioner to pay civil indemnity to private respondent after the
trial court had acquitted her of the criminal charges. Section 2, par. (b), of Rule 111 of the
Rules of Court, as amended, specifically provides: "Extinction of the penal action does not
carry with it extinction of the civil, unless the extinction proceeds from a declaration in a final
judgment that the fact from which the civil might arise did not exist.

The judgment of acquittal extinguishes the liability of the accused for damages only when it
includes a declaration that the fact from which the civil liability might arise did not exist.
Thus, the civil liability is not extinguished by acquittal where: (a) the acquittal is based on
reasonable doubt; (b) where the court expressly declares that the liability of the accused is
not criminal but only civil in nature; and, (c) where the civil liability is not derived from or
based on the criminal act of which the accused is acquitted.[3] Thus, under Art. 29 of the
Civil Code -

When the accused in a criminal prosecution is acquitted on the ground that his
guilt has not been proved beyond reasonable doubt, a civil action for damages for
the same act or omission may be instituted. Such action requires only a
preponderance of evidence. Upon motion of the defendant, the court may require
the plaintiff to file a bond to answer for damages in case the complaint should be
found to be malicious.
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In a criminal case where the judgment of acquittal is based upon reasonable


doubt, the court shall so declare. In the absence of any declaration to that effect,
it may be inferred from the text of the decision whether or not acquittal is due to
that ground.

An examination of the decision in the criminal cases reveals these findings of the trial court -

Evidence for the prosecution tends to show that on various occasions, Remedios
Nota Sapiera purchased from Monrico Mart grocery items (mostly cigarettes)
which purchases were paid with checks issued by Arturo de Guzman; that those
purchases and payments with checks were as follows:

(a) Sales Invoice No. 20104 dated February 26, 1987 in the amount of
P28,000.00; that said items purchased were paid with PCIBank Check No. 157073
dated February 26, 1987;

(b) Sales Invoice No. 20108 dated February 26, 1987 in the amount of
P140,000.00; that said items purchased were paid with PCIBank No. 157059
dated February 26, 1987;

(c) Sales Invoice No. 20120 dated February 27, 1987 in the amount of
P42,150.00; that said items were paid with PCIBank Check No. 157057 dated
February 27, 1987;

(d) Sales Invoice No. 20148 and 20149 both dated March 2, 1987 in the amount
of P120,103.75; said items were paid with Metrobank Check No. 045104758
dated March 2, 1987 in the amount of P125,000.00.

That all these checks were deposited with the Consolidated Bank and Trust
Company, Dagupan Branch, for collection from the drawee bank;

That when presented for payment by the collecting bank to the drawee bank, said
checks were dishonored due to account closed, as evidenced by check return
slips; x x x x.

From the evidence, the Court finds that accused Remedios Nota Sapiera is the
owner of a sari-sari store inside the public market; that she sells can(ned) goods,
candies and assorted grocery items; that she knows accused Arturo De Guzman,
a customer since February 1987; that de Guzman purchases from her grocery
items including cigarettes; that she knows Ramon Sua; that she has business
dealings with him for 5 years; that her purchase orders were in clean sheets of
paper; that she never pays in check; that Ramon Sua asked her to sign subject
checks as identification of the signature of Arturo de Guzman; that she pays in
cash; sometimes delayed by several days; that she signed the four (4) checks on
the reverse side; that she did not know the subject invoices; that de Guzman
made the purchases and he issued the checks; that the goods were delivered to
de Guzman; that she was not informed of dishonored checks; and that counsel for
Ramon Sua informed de Guzman and told him to pay x x x x

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In the case of accused Remedios Nota Sapiera, the prosecution failed to prove
conspiracy.

Based on the above findings of the trial court, the exoneration of petitioner of the charges of
estafa was based on the failure of the prosecution to present sufficient evidence showing
conspiracy between her and the other accused Arturo de Guzman in defrauding private
respondent. However, by her own testimony, petitioner admitted having signed the four (4)
checks in question on the reverse side. The evidence of the prosecution shows that petitioner
purchased goods from the grocery store of private respondent as shown by the sales invoices
issued by private respondent; that these purchases were paid with the four (4) subject
checks issued by de Guzman; that petitioner signed the same checks on the reverse side;
and when presented for payment, the checks were dishonored by the drawee bank due to
the closure of the drawer’s account; and, petitioner was informed of the dishonor.

We affirm the findings of the Court of Appeals that despite the conflicting versions of the
parties, it is undisputed that the four (4) checks issued by de Guzman were signed by
petitioner at the back without any indication as to how she should be bound thereby and,
therefore, she is deemed to be an indorser thereof. The Negotiable Instruments Law clearly
provides -

Sec. 17. Construction where instrument is ambiguous. - Where the language of


the instrument is ambiguous, or there are admissions therein, the following rules
of construction apply: x x x x (f) Where a signature is so placed upon the
instrument that it is not clear in what capacity the person making the same
intended to sign, he is deemed an indorser. x x x x

Sec. 63. When person deemed indorser. - A person placing his signature upon an
instrument otherwise than as maker, drawer or acceptor, is deemed to be an
indorser unless he clearly indicates by appropriate words his intention to be bound
in some other capacity.

Sec. 66. Liability of general indorser. - Every indorser who indorses without
qualification, warrants to all subsequent holders in due course: (a) The matters
and things mentioned in subdivisions (a), (b) and (c) of the next preceding
section; and (b) That the instrument is, at the time of the indorsement, valid and
subsisting;

And, in addition, he engages that, on due presentment, it shall be accepted or


paid or both, as the case may be, according to its tenor, and that if it be
dishonored and the necessary proceedings on dishonor be duly taken, he will pay
the amount thereof to the holder or to any subsequent indorser who may be
compelled to pay it.

The dismissal of the criminal cases against petitioner did not erase her civil liability since the
dismissal was due to insufficiency of evidence and not from a declaration from the court that
the fact from which the civil action might arise did not exist.[4] An accused acquitted of
estafa may nevertheless be held civilly liable where the facts established by the evidence so
warrant. The accused should be adjudged liable for the unpaid value of the checks signed by

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her in favor of the complainant.[5]

The rationale behind the award of civil indemnity despite a judgment of acquittal when
evidence is sufficient to sustain the award was explained by the Code Commission in
connection with Art. 29 of the Civil Code, to wit:

The old rule that the acquittal of the accused in a criminal case also releases him
from civil liability is one of the most serious flaws in the Philippine legal system. It
has given rise to numberless instances of miscarriage of justice, where the
acquittal was due to a reasonable doubt in the mind of the court as to the guilt of
the accused. The reasoning followed is that inasmuch as the civil responsibility is
derived from the criminal offense, when the latter is not proved, civil liability
cannot be demanded.

This is one of those cases where confused thinking leads to unfortunate and
deplorable consequences. Such reasoning fails to draw a clear line of demarcation
between criminal liability and civil responsibility, and to determine the logical
result of the distinction. The two liabilities are separate and distinct from each
other. One affects the social order and the other private rights. One is for
punishment or correction of the offender while the other is for reparation of
damages suffered by the aggrieved party x x x x It is just and proper that for the
purposes of imprisonment of or fine upon the accused, the offense should be
proved beyond reasonable doubt. But for the purpose of indemnifying the
complaining party, why should the offense also be proved beyond reasonable
doubt? Is not the invasion or violation of every private right to be proved only by
preponderance of evidence? Is the right of the aggrieved person any less private
because the wrongful act is also punishable by the criminal law?[6]

Finally, with regard to the computation of the civil liability of petitioner, the finding of the
Court of Appeals that petitioner is civilly liable for the aggregate value of the unpaid four (4)
checks subject of the criminal cases in the sum of P335,150.00, less the amount of
P125,000.00 already collected by private respondent pending appeal, resulting in the amount
of P210,150.00 still due private respondent, is a factual matter which is binding and
conclusive upon this Court.

WHEREFORE, the petition is DENIED. The Decision of the Court of Appeals dated 22 January
1996 as amended by its Resolution dated 19 March 1997 ordering petitioner Remedios Nota
Sapiera to pay private respondent Ramon Sua the remaining amount of P210,150.00 as civil
liability, is AFFIRMED. Costs against petitioners.

SO ORDERED.

Mendoza, Quisumbing, and Buena, JJ., concur.

[1] Penned by then Associate Justice Buenaventura J. Guerrero and concurred in by Associate

Justices Minerva P. Gonzales-Reyes (now an Associate Justice of the Supreme Court) and
Romeo A. Brawner.
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[2] Regional Trial Court of Dagupan City, Br. 40, presided by Judge Deodoro J. Sison.

[3] Sadio v. RTC of Antique, G.R. No. 94143, 24 September 1991, 201 SCRA 744.

[4] Belen v. Batoy, G.R. No. 76042, 23 February 1990, 182 SCRA 549.

[5] People v. Tugbang, G.R. No. 76212, 26 April 1991, 196 SCRA 341

[6] Report cited in Padilla v. Court of Appeals, No. L-39999, 31 May 1984, 129 SCRA 558.

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391 Phil. 648

FIRST DIVISION

[ G.R. No. 138509, July 31, 2000 ]

IMELDA MARBELLA-BOBIS, PETITIONER, VS. ISAGANI D. BOBIS,


RESPONDENT.

DECISION

YNARES-SANTIAGO, J.:

On October 21, 1985, respondent contracted a first marriage with one Maria Dulce B. Javier.
Without said marriage having been annulled, nullified or terminated, the same respondent
contracted a second marriage with petitioner Imelda Marbella-Bobis on January 25, 1996 and
allegedly a third marriage with a certain Julia Sally Hernandez. Based on petitioner's
complaint-affidavit, an information for bigamy was filed against respondent on February 25,
1998, which was docketed as Criminal Case No. Q98-75611 of the Regional Trial Court,
Branch 226, Quezon City. Sometime thereafter, respondent initiated a civil action for the
judicial declaration of absolute nullity of his first marriage on the ground that it was
celebrated without a marriage license. Respondent then filed a motion to suspend the
proceedings in the criminal case for bigamy invoking the pending civil case for nullity of the
first marriage as a prejudicial question to the criminal case. The trial judge granted the
motion to suspend the criminal case in an Order dated December 29, 1998.[1] Petitioner filed
a motion for reconsideration, but the same was denied.

Hence, this petition for review on certiorari. Petitioner argues that respondent should have
first obtained a judicial declaration of nullity of his first marriage before entering into the
second marriage, inasmuch as the alleged prejudicial question justifying suspension of the
bigamy case is no longer a legal truism pursuant to Article 40 of the Family Code.[2]

The issue to be resolved in this petition is whether the subsequent filing of a civil action for
declaration of nullity of a previous marriage constitutes a prejudicial question to a criminal
case for bigamy.

A prejudicial question is one which arises in a case the resolution of which is a logical
antecedent of the issue involved therein.[3] It is a question based on a fact distinct and
separate from the crime but so intimately connected with it that it determines the guilt or
innocence of the accused.[4] It must appear not only that the civil case involves facts upon
which the criminal action is based, but also that the resolution of the issues raised in the civil
action would necessarily be determinative of the criminal case.[5] Consequently, the defense
must involve an issue similar or intimately related to the same issue raised in the criminal
action and its resolution determinative of whether or not the latter action may proceed.[6] Its

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two essential elements are:[7]

(a) the civil action involves an issue similar or intimately related


to the issue raised in the criminal action; and

(b) the resolution of such issue determines whether or not the


criminal action may proceed.

A prejudicial question does not conclusively resolve the guilt or innocence of the accused but
simply tests the sufficiency of the allegations in the information in order to sustain the
further prosecution of the criminal case. A party who raises a prejudicial question is deemed
to have hypothetically admitted that all the essential elements of a crime have been
adequately alleged in the information, considering that the prosecution has not yet presented
a single evidence on the indictment or may not yet have rested its case. A challenge of the
allegations in the information on the ground of prejudicial question is in effect a question on
the merits of the criminal charge through a non-criminal suit.

Article 40 of the Family Code, which was effective at the time of celebration of the second
marriage, requires a prior judicial declaration of nullity of a previous marriage before a party
may remarry. The clear implication of this is that it is not for the parties, particularly the
accused, to determine the validity or invalidity of the marriage.[8] Whether or not the first
marriage was void for lack of a license is a matter of defense because there is still no judicial
declaration of its nullity at the time the second marriage was contracted. It should be
remembered that bigamy can successfully be prosecuted provided all its elements concur -
two of which are a previous marriage and a subsequent marriage which would have been
valid had it not been for the existence at the material time of the first marriage.[9]

In the case at bar, respondent's clear intent is to obtain a judicial declaration of nullity of his
first marriage and thereafter to invoke that very same judgment to prevent his prosecution
for bigamy. He cannot have his cake and eat it too. Otherwise, all that an adventurous
bigamist has to do is to disregard Article 40 of the Family Code, contract a subsequent
marriage and escape a bigamy charge by simply claiming that the first marriage is void and
that the subsequent marriage is equally void for lack of a prior judicial declaration of nullity
of the first. A party may even enter into a marriage aware of the absence of a requisite -
usually the marriage license - and thereafter contract a subsequent marriage without
obtaining a declaration of nullity of the first on the assumption that the first marriage is void.
Such scenario would render nugatory the provisions on bigamy. As succinctly held in
Landicho v. Relova:[10]

(P)arties to a marriage should not be permitted to judge for themselves its nullity,
only competent courts having such authority. Prior to such declaration of nullity,
the validity of the first marriage is beyond question. A party who contracts a
second marriage then assumes the risk of being prosecuted for bigamy.

Respondent alleges that the first marriage in the case before us was void for lack of a
marriage license. Petitioner, on the other hand, argues that her marriage to respondent was
exempt from the requirement of a marriage license. More specifically, petitioner claims that
prior to their marriage, they had already attained the age of majority and had been living
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together as husband and wife for at least five years.[11] The issue in this case is limited to
the existence of a prejudicial question, and we are not called upon to resolve the validity of
the first marriage. Be that as it may, suffice it to state that the Civil Code, under which the
first marriage was celebrated, provides that "every intendment of law or fact leans toward
the validity of marriage, the indissolubility of the marriage bonds."[12] Hence, parties should
not be permitted to judge for themselves the nullity of their marriage, for the same must be
submitted to the determination of competent courts. Only when the nullity of the marriage is
so declared can it be held as void, and so long as there is no such declaration the
presumption is that the marriage exists.[13] No matter how obvious, manifest or patent the
absence of an element is, the intervention of the courts must always be resorted to. That is
why Article 40 of the Family Code requires a "final judgment," which only the courts can
render. Thus, as ruled in Landicho v. Relova,[14] he who contracts a second marriage before
the judicial declaration of nullity of the first marriage assumes the risk of being prosecuted
for bigamy, and in such a case the criminal case may not be suspended on the ground of the
pendency of a civil case for declaration of nullity. In a recent case for concubinage, we held
that the pendency of a civil case for declaration of nullity of marriage is not a prejudicial
question.[15] This ruling applies here by analogy since both crimes presuppose the
subsistence of a marriage.

Ignorance of the existence of Article 40 of the Family Code cannot even be successfully
invoked as an excuse.[16] The contracting of a marriage knowing that the requirements of
the law have not been complied with or that the marriage is in disregard of a legal
impediment is an act penalized by the Revised Penal Code.[17] The legality of a marriage is a
matter of law and every person is presumed to know the law. As respondent did not obtain
the judicial declaration of nullity when he entered into the second marriage, why should he
be allowed to belatedly obtain that judicial declaration in order to delay his criminal
prosecution and subsequently defeat it by his own disobedience of the law? If he wants to
raise the nullity of the previous marriage, he can do it as a matter of defense when he
presents his evidence during the trial proper in the criminal case.

The burden of proof to show the dissolution of the first marriage before the second marriage
was contracted rests upon the defense,[18] but that is a matter that can be raised in the trial
of the bigamy case. In the meantime, it should be stressed that not every defense raised in
the civil action may be used as a prejudicial question to obtain the suspension of the criminal
action. The lower court, therefore, erred in suspending the criminal case for bigamy.
Moreover, when respondent was indicted for bigamy, the fact that he entered into two
marriage ceremonies appeared indubitable. It was only after he was sued by petitioner for
bigamy that he thought of seeking a judicial declaration of nullity of his first marriage. The
obvious intent, therefore, is that respondent merely resorted to the civil action as a potential
prejudicial question for the purpose of frustrating or delaying his criminal prosecution. As has
been discussed above, this cannot be done.

In the light of Article 40 of the Family Code, respondent, without first having obtained the
judicial declaration of nullity of the first marriage, can not be said to have validly entered into
the second marriage. Per current jurisprudence, a marriage though void still needs a judicial
declaration of such fact before any party can marry again; otherwise the second marriage
will also be void.[19] The reason is that, without a judicial declaration of its nullity, the first
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marriage is presumed to be subsisting. In the case at bar, respondent was for all legal
intents and purposes regarded as a married man at the time he contracted his second
marriage with petitioner.[20] Against this legal backdrop, any decision in the civil action for
nullity would not erase the fact that respondent entered into a second marriage during the
subsistence of a first marriage. Thus, a decision in the civil case is not essential to the
determination of the criminal charge. It is, therefore, not a prejudicial question. As stated
above, respondent cannot be permitted to use his own malfeasance to defeat the criminal
action against him.[21]

WHEREFORE, the petition is GRANTED. The order dated December 29, 1998 of the Regional
Trial Court, Branch 226 of Quezon City is REVERSED and SET ASIDE and the trial court is
ordered to IMMEDIATELY proceed with Criminal Case No. Q98-75611.

SO ORDERED.

Davide, Jr., C.J., (Chairman), Puno, Kapunan, and Pardo, JJ., concur.

[1] Rollo, pp. 29-30.

[2] Petition, p. 6; Rollo, p. 23.

[3] Fortich-Celdran v. Celdran, 19 SCRA 502 (1967); Zapanta v. Montessa; 114 Phil. 428

(1962); Merced v. Diez, 109 Phil. 155 (1960); See also People v. Aragon, 94 Phil. 357
(1954) cited in Dichaves v. Judge Apalit, AM-MTJ-00-1274, June 8, 2000.

[4] Yap v. Paras, 205 SCRA 625 (1992); Donato v. Luna, 160 SCRA 441 (1988); Quiambao v.

Osorio, 158 SCRA 674 (1988); Mendiola v. Macadaeg, 1 SCRA 593 (1961); Aleria v.
Mendoza, 83 Phil. 427 (1949); Berbari v. Concepcion, 40 Phil. 837 (1920)

[5] Ras v. Rasul, 100 SCRA 125 (1980); Benitez v. Concepcion, Jr., 2 SCRA 178 (1961) citing

De Leon v. Mabanag, 70 Phil. 202 (1940)

[6] Yap v. Paras, 205 SCRA 625 (1992)

[7] Rules of Court, Rule 111, Sec. 5. Elements of prejudicial question. -- The two (2)

essential elements of a prejudicial question are: (a) the civil action involves an issue similar
or intimately related to the issue raised in the criminal action; and (b) the resolution of such
issue determines whether or not the criminal action may proceed. (See also Prado v. People,
218 Phil. 571)

[8] Niñal v. Badayog, G.R. No. 133778, March 14, 2000.

[9] People v. Dumpo, 62 Phil. 246 (1935). The elements of bigamy are: (1) the offender has

been legally married; (2) that the first marriage has not been legally dissolved, or in case his
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or her spouse is absent, the absent spouse has not been judicially declared presumptively
dead; (3) that he contracts a subsequent marriage; (4) the subsequent marriage would have
been valid had it not been for the existence of the first. The exception to prosecution for
bigamy are those covered by Article 41 of the Family Code and by P.D. 1083 otherwise
known as the Code of Muslim Personal Laws of the Philippines, which provides that penal
laws relative to the crime of bigamy "shall not apply to a person married xxx under Muslim
Law" where the requirements set therein are met. See also Sulu Islamic Association v. Malik,
226 SCRA 193 (1993); Merced v. Diez, 109 Phil. 155 (1960)

[10] 22 SCRA 731, 735 (1968)

[11] Civil Code, Article 76.

[12] Civil Code, Article 220.

[13] Landicho v. Relova, supra.

[14] Supra.

[15] Beltran v. People of the Philippines, G.R. No. 137567, June 20, 2000.

[16] Civil Code, Article 3.

[17] Revised Penal Code, Article 350.

[18] People v. Dungao, 56 Phil. 805 (1931)

[19] Apiag v. Judge Cantero, 268 SCRA 47, 61 (1997)

[20] Wiegel v. Hon. Sempio-Dy, 143 SCRA 499, 501 (1986)

[21] People v. Aragon, 94 Phil. 357, 360 (1954)

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685 Phil. 429

THIRD DIVISION

[ G.R. No. 170290, April 11, 2012 ]

PHILIPPINE DEPOSIT INSURANCE CORPORATION, PETITIONER, VS.


CITIBANK, N.A. AND BANK OF AMERICA, S.T. & N.A., RESPONDENTS.

DECISION

MENDOZA, J.:

This is a petition for review under Rule 45 of the 1997 Revised Rules of Civil Procedure,
assailing the October 27, 2005 Decision[1] of the Court of Appeals (CA) in CA-G.R. CV No.
61316, entitled “Citibank, N.A. and Bank of America, S.T. & N.A. v. Philippine Deposit
Insurance Corporation.”

The Facts

Petitioner Philippine Deposit Insurance Corporation (PDIC) is a government instrumentality


created by virtue of Republic Act (R.A.) No. 3591, as amended by R.A. No. 9302.[2]

Respondent Citibank, N.A. (Citibank) is a banking corporation while respondent Bank of


America, S.T. & N.A. (BA) is a national banking association, both of which are duly organized
and existing under the laws of the United States of America and duly licensed to do business
in the Philippines, with offices in Makati City.[3]

In 1977, PDIC conducted an examination of the books of account of Citibank. It discovered


that Citibank, in the course of its banking business, from September 30, 1974 to June 30,
1977, received from its head office and other foreign branches a total of P11,923,163,908.00
in dollars, covered by Certificates of Dollar Time Deposit that were interest-bearing with
corresponding maturity dates.[4] These funds, which were lodged in the books of Citibank
under the account “Their Account-Head Office/Branches-Foreign Currency,” were not reported
to PDIC as deposit liabilities that were subject to assessment for insurance.[5] As such, in a
letter dated March 16, 1978, PDIC assessed Citibank for deficiency in the sum of
P1,595,081.96.[6]

Similarly, sometime in 1979, PDIC examined the books of accounts of BA which revealed that
from September 30, 1976 to June 30, 1978, BA received from its head office and its other
foreign branches a total of P629,311,869.10 in dollars, covered by Certificates of Dollar Time
Deposit that were interest-bearing with corresponding maturity dates and lodged in their
books under the account “Due to Head Office/Branches.”[7] Because BA also excluded these
from its deposit liabilities, PDIC wrote to BA on October 9, 1979, seeking the remittance of
P109,264.83 representing deficiency premium assessments for dollar deposits.[8]
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Believing that litigation would inevitably arise from this dispute, Citibank and BA each filed a
petition for declaratory relief before the Court of First Instance (now the Regional Trial Court)
of Rizal on July 19, 1979 and December 11, 1979, respectively.[9] In their petitions, Citibank
and BA sought a declaratory judgment stating that the money placements they received
from their head office and other foreign branches were not deposits and did not give rise to
insurable deposit liabilities under Sections 3 and 4 of R.A. No. 3591 (the PDIC Charter) and,
as a consequence, the deficiency assessments made by PDIC were improper and erroneous.
[10] The cases were then consolidated.[11]

On June 29, 1998, the Regional Trial Court, Branch 163, Pasig City (RTC) promulgated its
Decision[12] in favor of Citibank and BA, ruling that the subject money placements were not
deposits and did not give rise to insurable deposit liabilities, and that the deficiency
assessments issued by PDIC were improper and erroneous. Therefore, Citibank and BA were
not liable to pay the same. The RTC reasoned out that the money placements subject of the
petitions were not assessable for insurance purposes under the PDIC Charter because said
placements were deposits made outside of the Philippines and, under Section 3.05(b) of the
PDIC Rules and Regulations,[13] such deposits are excluded from the computation of deposit
liabilities. Section 3(f) of the PDIC Charter likewise excludes from the definition of the term
“deposit” any obligation of a bank payable at the office of the bank located outside the
Philippines. The RTC further stated that there was no depositor-depository relationship
between the respondents and their head office or other branches. As a result, such deposits
were not included as third-party deposits that must be insured. Rather, they were
considered inter-branch deposits which were excluded from the assessment base, in
accordance with the practice of the United States Federal Deposit Insurance Corporation
(FDIC) after which PDIC was patterned.

Aggrieved, PDIC appealed to the CA which affirmed the ruling of the RTC in its October 27,
2005 Decision. In so ruling, the CA found that the money placements were received as part
of the bank’s internal dealings by Citibank and BA as agents of their respective head offices.
This showed that the head office and the Philippine branch were considered as the same
entity. Thus, no bank deposit could have arisen from the transactions between the Philippine
branch and the head office because there did not exist two separate contracting parties to
act as depositor and depositary.[14] Secondly, the CA called attention to the purpose for the
creation of PDIC which was to protect the deposits of depositors in the Philippines and not
the deposits of the same bank through its head office or foreign branches.[15] Thirdly,
because there was no law or jurisprudence on the treatment of inter-branch deposits
between the Philippine branch of a foreign bank and its head office and other branches for
purposes of insurance, the CA was guided by the procedure observed by the FDIC which
considered inter-branch deposits as non-assessable.[16] Finally, the CA cited Section 3(f) of
R.A. No. 3591, which specifically excludes obligations payable at the office of the bank
located outside the Philippines from the definition of a deposit or an insured deposit. Since
the subject money placements were made in the respective head offices of Citibank and BA
located outside the Philippines, then such placements could not be subject to assessment
under the PDIC Charter.[17]

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Hence, this petition.

The Issues

PDIC raises the issue of whether or not the subject dollar deposits are assessable for
insurance purposes under the PDIC Charter with the following assigned errors:

A.

The appellate court erred in ruling that the subject dollar deposits are
money placements, thus, they are not subject to the provisions of
Republic Act No. 6426 otherwise known as the “Foreign Currency Deposit
Act of the Philippines.”

B.

The appellate court erred in ruling that the subject dollar deposits are not
covered by the PDIC insurance.[18]

Respondents similarly identify only one issue in this case:

Whether or not the money placements subject matter of these petitions


are assessable for insurance purposes under the PDIC Act.[19]

The sole question to be resolved in this case is whether the funds placed in the Philippine
branch by the head office and foreign branches of Citibank and BA are insurable deposits
under the PDIC Charter and, as such, are subject to assessment for insurance premiums.

The Court’s Ruling

The Court rules in the negative.

A branch has no separate legal personality;


Purpose of the PDIC

PDIC argues that the head offices of Citibank and BA and their individual foreign branches
are separate and independent entities. It insists that under American jurisprudence, a
bank’s head office and its branches have a principal-agent relationship only if they operate in
the same jurisdiction. In the case of foreign branches, however, no such relationship exists
because the head office and said foreign branches are deemed to be two distinct entities.
[20] Under Philippine law, specifically, Section 3(b) of R.A. No. 3591, which defines the terms

“bank” and “banking institutions,” PDIC contends that the law treats a branch of a foreign
bank as a separate and independent banking unit.[21]

The respondents, on the other hand, initially point out that the factual findings of the RTC
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and the CA, with regard to the nature of the money placements, the capacity in which the
same were received by the respondents and the exclusion of inter-branch deposits from
assessment, can no longer be disturbed and should be accorded great weight by this Court.
[22] They also argue that the money placements are not deposits. They postulate that for a

deposit to exist, there must be at least two parties – a depositor and a depository – each
with a legal personality distinct from the other. Because the respondents’ respective head
offices and their branches form only a single legal entity, there is no creditor-debtor
relationship and the funds placed in the Philippine branch belong to one and the same bank.
A bank cannot have a deposit with itself.[23]

This Court is of the opinion that the key to the resolution of this controversy is the
relationship of the Philippine branches of Citibank and BA to their respective head offices and
their other foreign branches.

The Court begins by examining the manner by which a foreign corporation can establish its
presence in the Philippines. It may choose to incorporate its own subsidiary as a domestic
corporation, in which case such subsidiary would have its own separate and independent
legal personality to conduct business in the country. In the alternative, it may create a
branch in the Philippines, which would not be a legally independent unit, and simply obtain a
license to do business in the Philippines.[24]

In the case of Citibank and BA, it is apparent that they both did not incorporate a separate
domestic corporation to represent its business interests in the Philippines. Their Philippine
branches are, as the name implies, merely branches, without a separate legal personality
from their parent company, Citibank and BA. Thus, being one and the same entity, the funds
placed by the respondents in their respective branches in the Philippines should not be
treated as deposits made by third parties subject to deposit insurance under the PDIC
Charter.

For lack of judicial precedents on this issue, the Court seeks guidance from American
jurisprudence. In the leading case of Sokoloff v. The National City Bank of New York,[25]
where the Supreme Court of New York held:

Where a bank maintains branches, each branch becomes a separate


business entity with separate books of account. A depositor in one branch
cannot issue checks or drafts upon another branch or demand payment from such
other branch, and in many other respects the branches are considered separate
corporate entities and as distinct from one another as any other bank.
Nevertheless, when considered with relation to the parent bank they are
not independent agencies; they are, what their name imports, merely
branches, and are subject to the supervision and control of the parent
bank, and are instrumentalities whereby the parent bank carries on its business,
and are established for its own particular purposes, and their business conduct
and policies are controlled by the parent bank and their property and assets
belong to the parent bank, although nominally held in the names of the particular
branches. Ultimate liability for a debt of a branch would rest upon the
parent bank. [Emphases supplied]

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This ruling was later reiterated in the more recent case of United States v. BCCI Holdings
Luxembourg[26] where the United States Court of Appeals, District of Columbia Circuit,
emphasized that “while individual bank branches may be treated as independent of one
another, each branch, unless separately incorporated, must be viewed as a part of the parent
bank rather than as an independent entity.”

In addition, Philippine banking laws also support the conclusion that the head office of a
foreign bank and its branches are considered as one legal entity. Section 75 of R.A. No.
8791 (The General Banking Law of 2000) and Section 5 of R.A. No. 7221 (An Act Liberalizing
the Entry of Foreign Banks) both require the head office of a foreign bank to guarantee the
prompt payment of all the liabilities of its Philippine branch, to wit:

Republic Act No. 8791:

Sec. 75. Head Office Guarantee. – In order to provide effective protection of the
interests of the depositors and other creditors of Philippine branches of a foreign
bank, the head office of such branches shall fully guarantee the prompt payment
of all liabilities of its Philippine branch.

Residents and citizens of the Philippines who are creditors of a branch in the
Philippines of foreign bank shall have preferential rights to the assets of such
branch in accordance with the existing laws.

Republic Act No. 7721:

Sec. 5. Head Office Guarantee. – The head office of foreign bank branches shall
guarantee prompt payment of all liabilities of its Philippine branches.

Moreover, PDIC must be reminded of the purpose for its creation, as espoused in Section 1 of
R.A. No. 3591 (The PDIC Charter) which provides:

Section 1. There is hereby created a Philippine Deposit Insurance Corporation


hereinafter referred to as the “Corporation” which shall insure, as herein provided,
the deposits of all banks which are entitled to the benefits of insurance under this
Act, and which shall have the powers hereinafter granted.

The Corporation shall, as a basic policy, promote and safeguard the interests of
the depositing public by way of providing permanent and continuing insurance
coverage on all insured deposits.

R.A. No. 9576, which amended the PDIC Charter, reaffirmed the rationale for the
establishment of the PDIC:

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Section 1. Statement of State Policy and Objectives. - It is hereby declared to be


the policy of the State to strengthen the mandatory deposit insurance coverage
system to generate, preserve, maintain faith and confidence in the country's
banking system, and protect it from illegal schemes and machinations.

Towards this end, the government must extend all means and mechanisms
necessary for the Philippine Deposit Insurance Corporation to effectively fulfill its
vital task of promoting and safeguarding the interests of the depositing public by
way of providing permanent and continuing insurance coverage on all insured
deposits, and in helping develop a sound and stable banking system at all times.

The purpose of the PDIC is to protect the depositing public in the event of a bank closure. It
has already been sufficiently established by US jurisprudence and Philippine statutes that the
head office shall answer for the liabilities of its branch. Now, suppose the Philippine branch
of Citibank suddenly closes for some reason. Citibank N.A. would then be required to answer
for the deposit liabilities of Citibank Philippines. If the Court were to adopt the posture of
PDIC that the head office and the branch are two separate entities and that the funds placed
by the head office and its foreign branches with the Philippine branch are considered deposits
within the meaning of the PDIC Charter, it would result to the incongruous situation where
Citibank, as the head office, would be placed in the ridiculous position of having to reimburse
itself, as depositor, for the losses it may incur occasioned by the closure of Citibank
Philippines. Surely our law makers could not have envisioned such a preposterous
circumstance when they created PDIC.

Finally, the Court agrees with the CA ruling that there is nothing in the definition of a “bank”
and a “banking institution” in Section 3(b) of the PDIC Charter[27] which explicitly states that
the head office of a foreign bank and its other branches are separate and distinct from their
Philippine branches.

There is no need to complicate the matter when it can be solved by simple logic bolstered by
law and jurisprudence. Based on the foregoing, it is clear that the head office of a bank and
its branches are considered as one under the eyes of the law. While branches are treated as
separate business units for commercial and financial reporting purposes, in the end, the head
office remains responsible and answerable for the liabilities of its branches which are under
its supervision and control. As such, it is unreasonable for PDIC to require the respondents,
Citibank and BA, to insure the money placements made by their home office and other
branches. Deposit insurance is superfluous and entirely unnecessary when, as in this case,
the institution holding the funds and the one which made the placements are one and the
same legal entity.

Funds not a deposit under the definition


of the PDIC Charter;
Excluded from assessment

PDIC avers that the funds are dollar deposits and not money placements. Citing R.A. No.
6848, it defines money placement as a deposit which is received with authority to invest.
Because there is no evidence to indicate that the respondents were authorized to invest the
subject dollar deposits, it argues that the same cannot be considered money placements.
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[28] PDIC then goes on to assert that the funds received by Citibank and BA are deposits, as

contemplated by Section 3(f) of R.A. No. 3591, for the following reasons: (1) the dollar
deposits were received by Citibank and BA in the course of their banking operations from
their respective head office and foreign branches and were recorded in their books as
“Account-Head Office/Branches-Time Deposits” pursuant to Central Bank Circular No. 343
which implements R.A. No. 6426; (2) the dollar deposits were credited as dollar time
accounts and were covered by Certificates of Dollar Time Deposit which were interest-
bearing and payable upon maturity, and (3) the respondents maintain 100% foreign currency
cover for their deposit liability arising from the dollar time deposits as required by Section 4
of R.A. No. 6426.[29]

To refute PDIC’s allegations, the respondents explain the inter-branch transactions which
necessitate the creation of the accounts or placements subject of this case. When the
Philippine branch needs to procure foreign currencies, it will coordinate with a branch in
another country which handles foreign currency purchases. Both branches have existing
accounts with their head office and when a money placement is made in relation to the
acquisition of foreign currency from the international market, the amount is credited to the
account of the Philippine branch with its head office while the same is debited from the
account of the branch which facilitated the purchase. This is further documented by the
issuance of a certificate of time deposit with a stated interest rate and maturity date. The
interest rate represents the cost of obtaining the funds while the maturity date represents
the date on which the placement must be returned. On the maturity date, the amount
previously credited to the account of the Philippine branch is debited, together with the cost
for obtaining the funds, and credited to the account of the other branch. The respondents
insist that the interest rate and maturity date are simply the basis for the debit and credit
entries made by the head office in the accounts of its branches to reflect the inter-branch
accommodation.[30] As regards the maintenance of currency cover over the subject money
placements, the respondents point out that they maintain foreign currency cover in excess of
what is required by law as a matter of prudent banking practice.[31]

PDIC attempts to define money placement in order to impugn the respondents’ claim that
the funds received from their head office and other branches are money placements and not
deposits, as defined under the PDIC Charter. In the process, it loses sight of the important
issue in this case, which is the determination of whether the funds in question are subject to
assessment for deposit insurance as required by the PDIC Charter. In its struggle to find an
adequate definition of “money placement,” PDIC desperately cites R.A. No. 6848, The
Charter of the Al-Amanah Islamic Investment Bank of the Philippines. Reliance on the said
law is unfounded because nowhere in the law is the term “money placement” defined.
Additionally, R.A. No. 6848 refers to the establishment of an Islamic bank subject to the
rulings of Islamic Shari’a to assist in the development of the Autonomous Region of Muslim
Mindanao (ARMM),[32] making it utterly irrelevant to the case at bench. Since Citibank and
BA are neither Islamic banks nor are they located anywhere near the ARMM, then it should
be painfully obvious that R.A. No. 6848 cannot aid us in deciding this case.

Furthermore, PDIC heavily relies on the fact that the respondents documented the money
placements with certificates of time deposit to simply conclude that the funds involved are
deposits, as contemplated by the PDIC Charter, and are consequently subject to assessment
for deposit insurance. It is this kind of reasoning that creates non-existent obscurities in the
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law and obstructs the prompt resolution of what is essentially a straightforward issue,
thereby causing this case to drag on for more than three decades.

Noticeably, PDIC does not dispute the veracity of the internal transactions of the respondents
which gave rise to the issuance of the certificates of time deposit for the funds the subject of
the present dispute. Neither does it question the findings of the RTC and the CA that the
money placements were made, and were payable, outside of the Philippines, thus, making
them fall under the exclusions to deposit liabilities. PDIC also fails to impugn the truth of the
testimony of John David Shaffer, then a Fiscal Agent and Head of the Assessment Section of
the FDIC, that inter-branch deposits were excluded from the assessment base. Therefore,
the determination of facts of the lower courts shall be accepted at face value by this Court,
following the well-established principle that factual findings of the trial court, when adopted
and confirmed by the CA, are binding and conclusive on this Court, and will generally not be
reviewed on appeal.[33]

As explained by the respondents, the transfer of funds, which resulted from the inter-branch
transactions, took place in the books of account of the respective branches in their head
office located in the United States. Hence, because it is payable outside of the Philippines, it
is not considered a deposit pursuant to Section 3(f) of the PDIC Charter:

Sec. 3(f) The term “deposit” means the unpaid balance of money or its equivalent
received by a bank in the usual course of business and for which it has given or is
obliged to give credit to a commercial, checking, savings, time or thrift account or
which is evidenced by its certificate of deposit, and trust funds held by such bank
whether retained or deposited in any department of said bank or deposit in
another bank, together with such other obligations of a bank as the Board of
Directors shall find and shall prescribe by regulations to be deposit liabilities of
the Bank; Provided, that any obligation of a bank which is payable at the
office of the bank located outside of the Philippines shall not be a deposit
for any of the purposes of this Act or included as part of the total
deposits or of the insured deposits; Provided further, that any insured bank
which is incorporated under the laws of the Philippines may elect to include for
insurance its deposit obligation payable only at such branch. [Emphasis supplied]

The testimony of Mr. Shaffer as to the treatment of such inter-branch deposits by the FDIC,
after which PDIC was modelled, is also persuasive. Inter-branch deposits refer to funds of
one branch deposited in another branch and both branches are part of the same parent
company and it is the practice of the FDIC to exclude such inter-branch deposits from a
bank’s total deposit liabilities subject to assessment.[34]

All things considered, the Court finds that the funds in question are not deposits within the
definition of the PDIC Charter and are, thus, excluded from assessment.

WHEREFORE, the petition is DENIED. The October 27, 2005 Decision of the Court of
Appeals in CA-G.R. CV No. 61316 is AFFIRMED.

SO ORDERED:
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Velasco, Jr., (Chairperson), Peralta, Abad, and Reyes,* JJ., concur.

* Designated as additional member of the Third Division in lieu of Associate Justice Estela M.

Perlas-Bernabe, per Special Order No. 1210 dated March 23, 2012.

[1] Rollo, pp. 34-46; penned by Associate Justice Aurora Santiago-Lagman and concurred in

by Associate Justice Ruben T. Reyes (retired member of this Court) and Associate Justice
Rebecca de Guia-Salvador of the Fourth Division.

[2] Id. at 13-14.

[3] Id. at 47 and 56.

[4] Id. at 35 and 83.

[5] Id. at 35 and 244.

[6] Id. at 79.

[7] Id. at 36 and 84.

[8] Id. at 83-84.

[9] Id. at 36.

[10] Id. at 55 and 62.

[11] Id at 36.

[12] Id. at 78-93; penned by Judge Aurelio C. Trampe.

[13] “Section 3.05 Exclusions from Deposit Liabilities. For assessment purposes, the
following items may be excluded in computing the total deposit liabilities:

xxx

b. Deposit liabilities of a bank which are payable at an office of the bank located outside the
Philippines unless the insured bank which is incorporated under the laws of the Philippines
and which maintains a branch outside the Philippines has elected to include for insurance its
deposit obligations payable only at such branch in which case such deposit liabilities should
be included as part of the total deposit liabilities.”

[14] Rollo, pp. 41-42.

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[15] Id. at 42.

[16] Id. at 43.

[17] Id. at 45.

[18] Id. at 21, 247-248.

[19] Id. at 283.

[20] Id. at 254-255.

[21] Id. at 260.

[22] Id. at 285-286.

[23] Id. at 290.

[24] Campos, Jose Jr. and Campos, Maria Clara L., The Corporation Code: Comments, Notes

and Selected Cases, Vol. II, p. 484.

[25] 130 Misc. 66, 224 N.Y.S. 102 (Sup. Ct. 1927), aff’d without opinion, 223 A.D. 754, 227

N.Y.S. 907, aff’d 250 N.Y.S. 69.

[26] 48 F.3d 551, 554 (D.C.Cir.1995), aff'd 833 F.Supp. 32 (D.D.C.1993), cert. denied sub

nom. Liquidation Commission for BCCI (Overseas) Ltd., Macau v. United States, 516 U.S.
1008, 116 S.Ct. 563, 133 L.Ed.2d 489 (1995).

[27] The term “Bank” and “Banking Institution” shall be synonymous and interchangeable

and shall include banks, commercial banks, savings banks, mortgage banks, rural banks,
development banks, cooperative banks, stock savings and loan associations and branches
and agencies in the Philippines of foreign banks and all other corporations authorized to
perform banking functions in the Philippines (as amended by Republic Act No. 7400 and
9302).

[28] Rollo, p. 252.

[29] Id. at 256-257.

[30] Id. at 297-300.

[31] Id. at 302.

[32] Republic Act No. 6848, The Charter of the Al-Amanah Islamic Investment Bank of the

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Philippines (1990), Section 3.

[33] Eterton Multi-Resources Corporation v. Filipino Pipe and Foundry Corporation, G.R. No.

179812, July 6, 2010, 624 SCRA 148,154.

[34] Rollo, p. 90.

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615 Phil. 62

THIRD DIVISION

[ G.R. No. 180863, September 08, 2009 ]

ANGELITA VALDEZ, PETITIONER, VS. REPUBLIC OF THE PHILIPPINES,


RESPONDENT.

DECISION

NACHURA, J.:

Before this Court is a Petition for Review on Certiorari under Rule 45 of the Rules of Court
assailing the Decision of the Regional Trial Court (RTC) of Camiling, Tarlac dated November
12, 2007 dismissing petitioner Angelita Valdez's petition for the declaration of presumptive
death of her husband, Sofio Polborosa (Sofio).

The facts of the case are as follows:

Petitioner married Sofio on January 11, 1971 in Pateros, Rizal. On December 13, 1971,
petitioner gave birth to the spouses' only child, Nancy. According to petitioner, she and Sofio
argued constantly because the latter was unemployed and did not bring home any money. In
March 1972, Sofio left their conjugal dwelling. Petitioner and their child waited for him to
return but, finally, in May 1972, petitioner decided to go back to her parents' home in Bancay
1st, Camiling, Tarlac. Three years passed without any word from Sofio. In October 1975,
Sofio showed up at Bancay 1st. He and petitioner talked for several hours and they agreed to
separate. They executed a document to that effect.[1] That was the last time petitioner saw
him. After that, petitioner didn't hear any news of Sofio, his whereabouts or even if he was
alive or not.[2]

Believing that Sofio was already dead, petitioner married Virgilio Reyes on June 20, 1985.[3]
Subsequently, however, Virgilio's application for naturalization filed with the United States
Department of Homeland Security was denied because petitioner's marriage to Sofio was
subsisting.[4] Hence, on March 29, 2007, petitioner filed a Petition before the RTC of
Camiling, Tarlac seeking the declaration of presumptive death of Sofio.

The RTC rendered its Decision[5] on November 12, 2007, dismissing the Petition for lack of
merit. The RTC held that Angelita "was not able to prove the well-grounded belief that her
husband Sofio Polborosa was already dead." It said that under Article 41 of the Family Code,
the present spouse is burdened to prove that her spouse has been absent and that she has a
well-founded belief that the absent spouse is already dead before the present spouse may
contract a subsequent marriage. This belief, the RTC said, must be the result of proper and
honest-to-goodness inquiries and efforts to ascertain the whereabouts of the absent spouse.

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The RTC found that, by petitioner's own admission, she did not try to find her husband
anymore in light of their mutual agreement to live separately. Likewise, petitioner's daughter
testified that her mother prevented her from looking for her father. The RTC also said there is
a strong possibility that Sofio is still alive, considering that he would have been only 61 years
old by then, and people who have reached their 60s have not become increasingly low in
health and spirits, and, even assuming as true petitioner's testimony that Sofio was a chain
smoker and a drunkard, there is no evidence that he continues to drink and smoke until now.

Petitioner filed a motion for reconsideration.[6] She argued that it is the Civil Code that
applies in this case and not the Family Code since petitioner's marriage to Sofio was
celebrated on January 11, 1971, long before the Family Code took effect. Petitioner further
argued that she had acquired a vested right under the provisions of the Civil Code and the
stricter provisions of the Family Code should not be applied against her because Title XIV of
the Civil Code, where Articles 384 and 390 on declaration of absence and presumption of
death, respectively, can be found, was not expressly repealed by the Family Code. To apply
the stricter provisions of the Family Code will impair the rights petitioner had acquired under
the Civil Code.

The RTC denied the Motion for Reconsideration in a Resolution dated December 10, 2007.[7]

Petitioner now comes before this Court seeking the reversal of the RTC Decision and Motion
for Reconsideration.

In its Manifestation and Motion,[8] the Office of the Solicitor General (OSG) recommended
that the Court set aside the assailed RTC Decision and grant the Petition to declare Sofio
presumptively dead. The OSG argues that the requirement of "well-founded belief" under
Article 41 of the Family Code is not applicable to the instant case. It said that petitioner could
not be expected to comply with this requirement because it was not yet in existence during
her marriage to Virgilio Reyes in 1985. The OSG further argues that before the effectivity of
the Family Code, petitioner already acquired a vested right as to the validity of her marriage
to Virgilio Reyes based on the presumed death of Sofio under the Civil Code. This vested
right and the presumption of Sofio's death, the OSG posits, could not be affected by the
obligations created under the Family Code.[9]

Next, the OSG contends that Article 390 of the Civil Code was not repealed by Article 41 of
the Family Code.[10] Title XIV of the Civil Code, the OSG said, was not one of those expressly
repealed by the Family Code. Moreover, Article 256 of the Family Code provides that its
provisions shall not be retroactively applied if they will prejudice or impair vested or acquired
rights.[11]

The RTC Decision, insofar as it dismissed the Petition, is affirmed. However, we must state
that we are denying the Petition on grounds different from those cited in the RTC Decision.

Initially, we discuss a procedural issue. Under the Rules of Court, a party may directly appeal
to this Court from a decision of the trial court only on pure questions of law. A question of
law lies, on one hand, when the doubt or difference arises as to what the law is on a certain
set of facts; on the other hand, a question of fact exists when the doubt or difference arises

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as to the truth or falsehood of the alleged facts. Here, the facts are not disputed; the
controversy merely relates to the correct application of the law or jurisprudence to the
undisputed facts.[12]

The RTC erred in applying the provisions of the Family Code and holding that petitioner
needed to prove a "well-founded belief" that Sofio was already dead. The RTC applied Article
41 of the Family Code, to wit:

Art. 41. A marriage contracted by any person during subsistence of a previous


marriage shall be null and void, unless before the celebration of the subsequent
marriage, the prior spouse had been absent for four consecutive years and the
spouse present has a well-founded belief that the absent spouse was already
dead. In case of disappearance where there is danger under the circumstances
set forth in the provisions of Article 391 of the Civil Code, an absence of only two
years shall be sufficient.

For the purpose of contracting a subsequent marriage under the preceding


paragraph, the spouse present must institute a summary proceeding as provided
in this Code for the declaration of presumptive death of the absentee, without
prejudice to the effect of reappearance of the absent spouse.

It is readily apparent, however, that the marriages of petitioner to Sofio and Virgilio on
January 11, 1971 and June 20, 1985, respectively, were both celebrated under the auspices
of the Civil Code.

The pertinent provision of the Civil Code is Article 83:

Art. 83. Any marriage subsequently contracted by any person during the lifetime
of the first spouse of such person with any person other than such first spouse
shall be illegal and void from its performance, unless:

(1) The first marriage was annulled or dissolved; or

(2) The first spouse had been absent for seven consecutive years at the time of
the second marriage without the spouse present having news of the absentee
being alive, of if the absentee, though he has been absent for less than seven
years, is generally considered as dead and believed to be so by the spouse
present at the time of contracting such subsequent marriage, or if the absentee is
presumed dead according to Articles 390 and 391. The marriage so contracted
shall be valid in any of the three cases until declared null and void by a competent
court.

Article 390 of the Civil Code states:

Art. 390. After an absence of seven years, it being unknown whether or not the
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absentee still lives, he shall be presumed dead for all purposes, except for those
of succession.

The absentee shall not be presumed dead for the purpose of opening his succession till after
an absence of ten years. If he disappeared after the age of seventy-five years, an absence of
five years shall be sufficient in order that his succession may be opened.

The Court, on several occasions, had interpreted the above-quoted provision in this wise:

For the purposes of the civil marriage law, it is not necessary to have the former
spouse judicially declared an absentee. The declaration of absence made in
accordance with the provisions of the Civil Code has for its sole purpose to enable
the taking of the necessary precautions for the administration of the estate of the
absentee. For the celebration of civil marriage, however, the law only requires
that the former spouse has been absent for seven consecutive years at the time
of the second marriage, that the spouse present does not know his or her former
spouse to be living, that such former spouse is generally reputed to be dead and
the spouse present so believes at the time of the celebration of the marriage.[13]

Further, the Court explained that presumption of death cannot be the subject of court
proceedings independent of the settlement of the absentee's estate.

In re Szatraw[14] is instructive. In that case, petitioner contracted marriage with a Polish


national in 1937. They lived together as husband and wife for three years. Sometime in
1940, the husband, on the pretext of visiting some friends, left the conjugal abode with their
child and never returned. After inquiring from friends, petitioner found that her husband
went to Shanghai, China. However, friends who came from Shanghai told her that the
husband was not seen there. In 1948, petitioner filed a petition for the declaration of
presumptive death of her husband arguing that since the latter had been absent for more
than seven years and she had not heard any news from him and about her child, she
believes that he is dead. In deciding the case, the Court said:

The petition is not for the settlement of the estate of Nicolai Szatraw, because it
does not appear that he possessed property brought to the marriage and because
he had acquired no property during his married life with the petitioner. The rule
invoked by the latter is merely one of evidence which permits the court to
presume that a person is dead after the fact that such person had been unheard
from in seven years had been established. This presumption may arise and be
invoked and made in a case, either in an action or in a special proceeding, which
is tried or heard by, and submitted for decision to, a competent court.
Independently of such an action or special proceeding, the presumption
of death cannot be invoked, nor can it be made the subject of an action or
special proceeding. In this case, there is no right to be enforced nor is there a
remedy prayed for by the petitioner against her absent husband. Neither is there
a prayer for the final determination of his right or status or for the ascertainment

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of a particular fact (Hagans v. Wislizenus, 42 Phil. 880), for the petition does not
pray for a declaration that the petitioner's husband is dead, but merely asks for a
declaration that he be presumed dead because he had been unheard from in
seven years. If there is any pretense at securing a declaration that the petitioner's
husband is dead, such a pretension cannot be granted because it is unauthorized.
The petition is for a declaration that the petitioner's husband is presumptively
dead. But this declaration, even if judicially made, would not improve the
petitioner's situation, because such a presumption is already established by law. A
judicial pronouncement to that effect, even if final and executory, would
still be a prima facie presumption only. It is still disputable. It is for that
reason that it cannot be the subject of a judicial pronouncement or
declaration, if it is the only question or matter involved in a case, or upon
which a competent court has to pass. The latter must decide finally the
controversy between the parties, or determine finally the right or status of a party
or establish finally a particular fact, out of which certain rights and obligations
arise or may arise; and once such controversy is decided by a final judgment, or
such right or status determined, or such particular fact established, by a final
decree, then the judgment on the subject of the controversy, or the decree upon
the right or status of a party or upon the existence of a particular fact, becomes
res judicata, subject to no collateral attack, except in a few rare instances
especially provided by law. It is, therefore, clear that a judicial declaration that
a person is presumptively dead, because he had been unheard from in
seven years, being a presumption juris tantum only, subject to contrary
proof, cannot reach the stage of finality or become final. Proof of actual
death of the person presumed dead because he had been unheard from in seven
years, would have to be made in another proceeding to have such particular fact
finally determined. If a judicial decree declaring a person presumptively dead,
because he had not been heard from in seven years, cannot become final and
executory even after the lapse of the reglementary period within which an appeal
may be taken, for such presumption is still disputable and remains subject to
contrary proof, then a petition for such a declaration is useless, unnecessary,
superfluous and of no benefit to the petitioner.[15]

In Lukban v. Republic,[16] petitioner Lourdes G. Lukban contracted marriage with Francisco


Chuidian on December 10, 1933. A few days later, on December 27, Francisco left Lourdes
after a violent quarrel. She did not hear from him after that day. Her diligent search,
inquiries from his parents and friends, and search in his last known address, proved futile.
Believing her husband was already dead since he had been absent for more than twenty
years, petitioner filed a petition in 1956 for a declaration that she is a widow of her husband
who is presumed to be dead and has no legal impediment to contract a subsequent
marriage. On the other hand, the antecedents in Gue v. Republic[17] are similar to Szatraw.
On January 5, 1946, Angelina Gue's husband left Manila where they were residing and went
to Shanghai, China. From that day on, he had not been heard of, had not written to her, nor
in anyway communicated with her as to his whereabouts. Despite her efforts and diligence,
she failed to locate him. After 11 years, she asked the court for a declaration of the
presumption of death of Willian Gue, pursuant to the provisions of Article 390 of the Civil
Code of the Philippines.

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In both cases, the Court reiterated its ruling in Szatraw. It held that a petition for judicial
declaration that petitioner's husband is presumed to be dead cannot be entertained because
it is not authorized by law.[18]

From the foregoing, it can be gleaned that, under the Civil Code, the presumption of death is
established by law[19] and no court declaration is needed for the presumption to arise. Since
death is presumed to have taken place by the seventh year of absence,[20] Sofio is to be
presumed dead starting October 1982.

Consequently, at the time of petitioner's marriage to Virgilio, there existed no impediment to


petitioner's capacity to marry, and the marriage is valid under paragraph 2 of Article 83 of
the Civil Code.

Further, considering that it is the Civil Code that applies, proof of "well-founded belief" is not
required. Petitioner could not have been expected to comply with this requirement since the
Family Code was not yet in effect at the time of her marriage to Virgilio. The enactment of
the Family Code in 1988 does not change this conclusion. The Family Code itself states:

Art. 256. This Code shall have retroactive effect insofar as it does not prejudice or
impair vested or acquired rights in accordance with the Civil Code or other laws.

To retroactively apply the provisions of the Family Code requiring petitioner to exhibit "well-
founded belief" will, ultimately, result in the invalidation of her second marriage, which was
valid at the time it was celebrated. Such a situation would be untenable and would go
against the objectives that the Family Code wishes to achieve.

In sum, we hold that the Petition must be dismissed since no decree on the presumption of
Sofio's death can be granted under the Civil Code, the same presumption having arisen by
operation of law. However, we declare that petitioner was capacitated to marry Virgilio at the
time their marriage was celebrated in 1985 and, therefore, the said marriage is legal and
valid.

WHEREFORE, the foregoing premises considered, the Petition is DENIED.

SO ORDERED.

Ynares-Santiago, (Chairperson), Chico-Nazario, Velasco, Jr., and Peralta, JJ., concur.

[1] Rollo, p. 33.

[2] Id. at 5-6.

[3] Id. at 10.

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[4] Id. at 11.

[5] Penned by Judge Jose S. Vallo, id. at 35-39.

[6] Rollo, pp. 40-55.

[7] Id. at 56-61.

[8] Id. at 86-98.

[9] Id. at 92-93.

[10] Id. at 94.

[11] Id. at 96.

[12] Philippine Veterans Bank v. Monillas, G.R. No. 167098, March 28, 2008, 550 SCRA 251.

(Citations omitted.)

[13] Jones v. Hortigüela, 64 Phil. 179, 183 (1937).

[14] In re Szatraw, 81 Phil. 461 (1948).

[15] Id. at 462-463. (Emphasis supplied.)

[16] 98 Phil. 574 (1956).

[17] 107 Phil. 381 (1960).

[18] Id. at 386.

[19] In re Szatraw, supra note 14.

[20] Tolentino, Civil Code of the Philippines, Vol. 1, 5th ed., p. 738.

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