G.R. No.
L-63915 April 24, 1985 473, 486, 491, 503, 504, 521, 528, 551, 566, 573,
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.
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,
574, 594, 599, 644, 658, 661, 718, 731, 733, 793,
800, 802, 835, 836, 923, 935, 961, 1017-1030,
1050, 1060-1061, 1085, 1143, 1165, 1166, 1242,
1246, 1250, 1278, 1279, 1300, 1644, 1772, 1808,
1810, 1813-1817, 1819-1826, 1829-1840, 1842-
1847.
b] Letter of Instructions Nos.: 10, 39, 49, 72,
107, 108, 116, 130, 136, 141, 150, 153, 155, 161,
173, 180, 187, 188, 192, 193, 199, 202, 204, 205,
209, 211-213, 215-224, 226-228, 231-239, 241-
245, 248, 251, 253-261, 263-269, 271-273, 275-
283, 285-289, 291, 293, 297-299, 301-303, 309,
312-315, 325, 327, 343, 346, 349, 357, 358, 362,
367, 370, 382, 385, 386, 396-397, 405, 438-440,
444- 445, 473, 486, 488, 498, 501, 399, 527, 561,
576, 587, 594, 599, 600, 602, 609, 610, 611, 612,
615, 641, 642, 665, 702, 712-713, 726, 837-839,
878-879, 881, 882, 939-940, 964,997,1149-
1178,1180-1278.
c] General Orders Nos.: 14, 52, 58, 59, 60, 62,
63, 64 & 65.
d] Proclamation Nos.: 1126, 1144, 1147, 1151,
1196, 1270, 1281, 1319-1526, 1529, 1532, 1535,
1538, 1540-1547, 1550-1558, 1561-1588, 1590-
1595, 1594-1600, 1606-1609, 1612-1628, 1630-
1649, 1694-1695, 1697-1701, 1705-1723, 1731-
1734, 1737-1742, 1744, 1746-1751, 1752, 1754,
1762, 1764-1787, 1789-1795, 1797, 1800, 1802-
1804, 1806-1807, 1812-1814, 1816, 1825-1826,
1829, 1831-1832, 1835-1836, 1839-1840, 1843-
1844, 1846-1847, 1849, 1853-1858, 1860, 1866,
1868, 1870, 1876-1889, 1892, 1900, 1918, 1923,
 1933, 1952, 1963, 1965-1966, 1968-1984, 1986-
2028, 2030-2044, 2046-2145, 2147-2161, 2163-
2244.
e] Executive Orders Nos.: 411, 413, 414, 427,
429-454, 457- 471, 474-492, 494-507, 509-510,
522, 524-528, 531-532, 536, 538, 543-544, 549,
551-553, 560, 563, 567-568, 570, 574, 593, 594,
598-604, 609, 611- 647, 649-677, 679-703, 705-
707, 712-786, 788-852, 854-857.
f] Letters of Implementation Nos.: 7, 8, 9, 10,
11-22, 25-27, 39, 50, 51, 59, 76, 80-81, 92, 94,
95, 107, 120, 122, 123.
g] Administrative Orders Nos.: 347, 348, 352-
354, 360- 378, 380-433, 436-439.
The respondents, through the Solicitor General, would have
this case dismissed outright on the ground that petitioners
have no legal personality or standing to bring the instant
petition. The view is submitted that in the absence of any
showing that petitioners are personally and directly affected or
prejudiced by the alleged non-publication of the presidential
issuances in question 2 said petitioners are without the
requisite legal personality to institute this mandamus
proceeding, they are not being "aggrieved parties" within the
meaning of Section 3, Rule 65 of the Rules of Court, which we
quote:
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 a rd
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. Governor General, 3 this Court held
that while the general rule is that "a writ of mandamus would
be granted to a private individual only in those cases where he
has some private or particular interest to be subserved, or
some particular right to be protected, independent of that
which he holds with the public at large," and "it is for the
public officers exclusively to apply for the writ when public
rights are to be subserved [Mithchell 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:
Art. 2. Laws shall take effect after fifteen days
following the completion of their publication in
the Official Gazette, unless it is otherwise
provided, ...
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 legisiative
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. ...
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
that at this time when the people have bestowed upon the
President a power heretofore enjoyed solely by the legislature.
While the people are kept abreast by the mass media of the
debates and deliberations in the Batasan Pambansa—and for
the diligent ones, ready access to the legislative records—no
such publicity accompanies the law-making process of the
President. Thus, without publication, the people have no
means of knowing what presidential decrees have actually
been promulgated, much less a definite way of informing
themselves of the specific contents and texts of such decrees.
As the Supreme Court of Spain ruled: "Bajo la denominacion
generica de leyes, se comprenden tambien 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 I of Commonwealth Act 638
reads: "There shall be published in the Official Gazette ... ."
The word "shall" used therein imposes upon respondent
officials an imperative duty. That duty must be enforced if the
Constitutional right of the people to be informed on matters of
public concern is to be given substance and reality. The law
itself makes a list of what should be published in the Official
Gazette. Such listing, to our mind, leaves respondents with no
discretion whatsoever as to what must be included or excluded
from such publication.
The publication of all presidential issuances "of a public
nature" or "of general applicability" is mandated by law.
Obviously, presidential decrees that provide for fines,
forfeitures or penalties for their violation or otherwise impose
a burden or. 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, 1. & L. Ry. Co. v.
Hackett, 228 U.S. 559, 566. It is quite clear,
however, that such broad statements as to the
effect of a determination of unconstitutionality
must be taken with qualifications. The actual
existence of a statute, prior to such a
determination, is an operative fact and may
have consequences which cannot justly be
ignored. The past cannot always be erased by a
new judicial declaration. The effect of the
subsequent ruling as to invalidity may have to
be considered in various aspects-with respect to
particular conduct, private and official.
Questions of rights claimed to have become
vested, of status, of prior determinations
deemed to have finality and acted upon
accordingly, of public policy in the light of the
nature both of the statute and of its previous
application, demand examination. These
questions are among the most difficult of those
which have engaged the attention of courts,
state and federal and it is manifest from
numerous decisions that an all-inclusive
statement of a principle of absolute retroactive
invalidity cannot be justified.
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 ... 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.
G.R. No. 101279 August 6, 1992
PHILIPPINE ASSOCIATION OF SERVICE EXPORTERS,
INC., petitioner,
vs.
HON. RUBEN D. TORRES, as Secretary of the Department of
Labor & Employment, and JOSE N. SARMIENTO, as
Administrator of the PHILIPPINE OVERSEAS
EMPLOYMENT ADMINISTRATION, respondents.
De Guzman, Meneses & Associates for petitioner.
GRIÑO-AQUINO, J.:
This petition for prohibition with temporary restraining order
was filed by the Philippine Association of Service Exporters
(PASEI, for short), to prohibit and enjoin the Secretary of the
Department of Labor and Employment (DOLE) and the
Administrator of the Philippine Overseas Employment
Administration (or POEA) from enforcing and implementing
DOLE Department Order No. 16, Series of 1991 and POEA
Memorandum Circulars Nos. 30 and 37, Series of 1991,
temporarily suspending the recruitment by private
employment agencies of Filipino domestic helpers for Hong
Kong and vesting in the DOLE, through the facilities of the
POEA, the task of processing and deploying such workers.
PASEI is the largest national organization of private
employment and recruitment agencies duly licensed and
authorized by the POEA, to engaged in the business of
obtaining overseas employment for Filipino landbased
workers, including domestic helpers.
On June 1, 1991, as a result of published stories regarding the
abuses suffered by Filipino housemaids employed in Hong
Kong, DOLE Secretary Ruben D. Torres issued Department
Order No. 16, Series of 1991, temporarily suspending the
recruitment by private employment agencies of "Filipino
domestic helpers going to Hong Kong" (p. 30, Rollo). The
DOLE itself, through the POEA took over the business of
deploying such Hong Kong-bound workers.
In view of the need to establish mechanisms
that will enhance the protection for Filipino
domestic helpers going to Hong Kong, the
recruitment of the same by private employment
agencies is hereby temporarily
suspended effective 1 July 1991. As such, the
DOLE through the facilities of the Philippine
Overseas Employment Administration shall
take over the processing and deployment of
household workers bound for Hong Kong,
subject to guidelines to be issued for said
purpose.
In support of this policy, all DOLE Regional
Directors and the Bureau of Local
Employment's regional offices are likewise
directed to coordinate with the POEA in
maintaining a manpower pool of prospective
domestic helpers to Hong Kong on a regional
basis.
For compliance. (Emphasis ours; p. 30, Rollo.)
Pursuant to the above DOLE circular, the POEA issued
Memorandum Circular No. 30, Series of 1991, dated July 10,
1991, providing GUIDELINES on the Government processing
and deployment of Filipino domestic helpers to Hong Kong and
the accreditation of Hong Kong recruitment agencies
intending to hire Filipino domestic helpers.
Subject: Guidelines on the Temporary
Government Processing and Deployment of
Domestic Helpers to Hong Kong.
Pursuant to Department Order No. 16, series of
1991 and in order to operationalize the
temporary government processing and
deployment of domestic helpers (DHs) to Hong
Kong resulting from the temporary suspension
of recruitment by private employment agencies
for said skill and host market, the following
guidelines and mechanisms shall govern the
implementation of said policy.
X. Interim Arrangement
I. Creation of a joint POEA-OWWA Household
Workers Placement Unit (HWPU)
An ad hoc, one stop Household Workers
Placement Unit [or HWPU] under the
supervision of the POEA shall take charge of
the various operations involved in the Hong
Kong-DH industry segment:
The HWPU shall have the following functions
in coordination with appropriate units and
other entities concerned:
1. Negotiations with and Accreditation of Hong
Kong Recruitment Agencies
2. Manpower Pooling
3. Worker Training and Briefing
4. Processing and Deployment
5. Welfare Programs
II. Documentary Requirements and Other
Conditions for Accreditation of Hong Kong
Recruitment Agencies or Principals
Recruitment agencies in Hong Kong intending
to hire Filipino DHs for their employers may
negotiate with the HWPU in Manila directly or
through the Philippine Labor Attache's Office
in Hong Kong.
xxx xxx xxx
All contracts stamped in Hong Kong as of June
30 shall continue to be processed by POEA until
31 July 1991 under the name of the Philippine
agencies concerned. Thereafter, all contracts
shall be processed with the HWPU.
Recruitment agencies in Hong Kong shall
submit to the Philippine Consulate General in
Hong kong a list of their accepted applicants in
their pool within the last week of July. The last
day of acceptance shall be July 31 which shall
then be the basis of HWPU in accepting
contracts for processing. After the exhaustion of
their respective pools the only source of
applicants will be the POEA manpower pool.
For strict compliance of all concerned. (pp. 31-
35, Rollo.)
On August 1, 1991, the POEA Administrator also issued
Memorandum Circular No. 37, Series of 1991, on the
processing of employment contracts of domestic workers for
Hong Kong.
TO: All Philippine and Hong Kong Agencies
engaged in the recruitment of Domestic helpers
for Hong Kong
Further to Memorandum Circular No. 30, series
of 1991 pertaining to the government
processing and deployment of domestic helpers
(DHs) to Hong Kong, processing of employment
contracts which have been attested by the Hong
Kong Commissioner of Labor up to 30 June
1991 shall be processed by the POEA
Employment Contracts Processing Branch up to
15 August 1991 only.
Effective 16 August 1991, all Hong Kong
recruitment agent/s hiring DHs from the
Philippines shall recruit under the new scheme
which requires prior accreditation which the
POEA.
Recruitment agencies in Hong Kong may apply
for accreditation at the Office of the Labor
Attache, Philippine Consulate General where a
POEA team is posted until 31 August 1991.
Thereafter, those who failed to have themselves
accredited in Hong Kong may proceed to the
POEA-OWWA Household Workers Placement
Unit in Manila for accreditation before their
recruitment and processing of DHs shall be
allowed.
Recruitment agencies in Hong Kong who have
some accepted applicants in their pool after the
cut-off period shall submit this list of workers
upon accreditation. Only those DHs in said list
will be allowed processing outside of the HWPU
manpower pool.
For strict compliance of all concerned.
(Emphasis supplied, p. 36, Rollo.)
On September 2, 1991, the petitioner, PASEI, filed this
petition for prohibition to annul the aforementioned DOLE
and POEA circulars and to prohibit their implementation for
the following reasons:
1. that the respondents acted with grave abuse
of discretion and/or in excess of their rule-
making authority in issuing said circulars;
2. that the assailed DOLE and POEA circulars
are contrary to the Constitution, are
unreasonable, unfair and oppressive; and
3. that the requirements of publication and
filing with the Office of the National
Administrative Register were not complied
with.
There is no merit in the first and second grounds of the
petition.
Article 36 of the Labor Code grants the Labor Secretary the
power to restrict and regulate recruitment and placement
activities.
 Art. 36. Regulatory Power. — The Secretary of
Labor shall have the power to restrict and
regulate the recruitment and placement
activities of all agencies within the coverage of
this title [Regulation of Recruitment and
Placement Activities] and is hereby authorized
to issue orders and promulgate rules and
regulations to carry out the objectives and
implement the provisions of this title. (Emphasis
ours.)
On the other hand, the scope of the regulatory authority of the
POEA, which was created by Executive Order No. 797 on May
1, 1982 to take over the functions of the Overseas Employment
Development Board, the National Seamen Board, and the
overseas employment functions of the Bureau of Employment
Services, is broad and far-ranging for:
1. Among the functions inherited by the POEA
from the defunct Bureau of Employment
Services was the power and duty:
"2. To establish and maintain a
registration and/or licensing
system to regulate private sector
participation in the recruitment
and placement of workers, locally
and overseas, . . ." (Art. 15, Labor
Code, Emphasis supplied). (p.
13, Rollo.)
2. It assumed from the defunct Overseas
Employment Development Board the power and
duty:
3. To recruit and place workers
for overseas employment of
Filipino contract workers on a
government to government
arrangement and in such other
sectors as policy may dictate . . .
(Art. 17, Labor Code.) (p.
13, Rollo.)
3. From the National Seamen Board, the POEA
took over:
2. To regulate and supervise the
activities of agents or
representatives of shipping
companies in the hiring of
seamen for overseas
employment; and secure the best
possible terms of employment for
contract seamen workers and
secure compliance therewith.
(Art. 20, Labor Code.)
The vesture of quasi-legislative and quasi-judicial powers in
administrative bodies is not unconstitutional, unreasonable
and oppressive. It has been necessitated by "the growing
complexity of the modern society" (Solid Homes, Inc. vs.
Payawal, 177 SCRA 72, 79). More and more administrative
bodies are necessary to help in the regulation of society's
ramified activities. "Specialized in the particular field assigned
to them, they can deal with the problems thereof with more
expertise and dispatch than can be expected from the
legislature or the courts of justice" (Ibid.).
It is noteworthy that the assailed circulars do not prohibit the
petitioner from engaging in the recruitment and deployment of
Filipino landbased workers for overseas employment. A careful
reading of the challenged administrative issuances discloses
that the same fall within the "administrative and policing
powers expressly or by necessary implication conferred" upon
the respondents (People vs. Maceren, 79 SCRA 450). The
power to "restrict and regulate conferred by Article 36 of the
Labor Code involves a grant of police power (City of Naga vs.
Court of Appeals, 24 SCRA 898). To "restrict" means "to
confine, limit or stop" (p. 62, Rollo) and whereas the power to
"regulate" means "the power to protect, foster, promote,
preserve, and control with due regard for the interests, first
and foremost, of the public, then of the utility and of its
patrons" (Philippine Communications Satellite Corporation vs.
Alcuaz, 180 SCRA 218).
The Solicitor General, in his Comment, aptly observed:
. . . Said Administrative Order [i.e., DOLE
Administrative Order No. 16] merely restricted
the scope or area of petitioner's business
operations by excluding therefrom recruitment
and deployment of domestic helpers for Hong
Kong till after the establishment of the
"mechanisms" that will enhance the protection
of Filipino domestic helpers going to Hong
Kong. In fine, other than the recruitment and
deployment of Filipino domestic helpers for
Hongkong, petitioner may still deploy other
class of Filipino workers either for Hongkong
and other countries and all other classes of
Filipino workers for other countries.
Said administrative issuances, intended to
curtail, if not to end, rampant violations of the
rule against excessive collections of placement
and documentation fees, travel fees and other
charges committed by private employment
agencies recruiting and deploying domestic
helpers to Hongkong. [They are reasonable,
valid and justified under the general welfare
clause of the Constitution, since the recruitment
and deployment business, as it is conducted
today, is affected with public interest.
xxx xxx xxx
The alleged takeover [of the business of
recruiting and placing Filipino domestic helpers
in Hongkong] is merely a remedial measure,
and expires after its purpose shall have been
attained. This is evident from the tenor of
Administrative Order No. 16 that recruitment
of Filipino domestic helpers going to Hongkong
by private employment agencies are hereby
"temporarily suspended effective July 1, 1991."
The alleged takeover is limited in scope, being
confined to recruitment of domestic helpers
going to Hongkong only.
xxx xxx xxx
. . . the justification for the takeover of the
processing and deploying of domestic helpers
for Hongkong resulting from the restriction of
the scope of petitioner's business is confined
solely to the unscrupulous practice of private
employment agencies victimizing applicants for
employment as domestic helpers for Hongkong
and not the whole recruitment business in the
Philippines. (pp. 62-65, Rollo.)
The questioned circulars are therefore a valid exercise of the
police power as delegated to the executive branch of
Government.
Nevertheless, they are legally invalid, defective and
unenforceable for lack of power publication and filing in the
Office of the National Administrative Register as required in
Article 2 of the Civil Code, Article 5 of the Labor Code and
Sections 3(1) and 4, Chapter 2, Book VII of the Administrative
Code of 1987 which provide:
Art. 2. Laws shall take effect after fifteen (15)
days following the completion of their
publication in the Official Gazatte, unless it is
otherwise provided. . . . (Civil Code.)
Art. 5. Rules and Regulations. — The
Department of Labor and other government
agencies charged with the administration and
enforcement of this Code or any of its parts
shall promulgate the necessary implementing
rules and regulations. Such rules and
regulations shall become effective fifteen (15)
days after announcement of their adoption in
newspapers of general circulation. (Emphasis
supplied, Labor Code, as amended.)
Sec. 3. Filing. — (1) Every agency shall file with
the University of the Philippines Law Center,
three (3) certified copies of every rule adopted by
it. Rules in force on the date of effectivity of this
Code which are not filed within three (3)
months shall not thereafter be the basis of any
sanction against any party or persons.
(Emphasis supplied, Chapter 2, Book VII of the
Administrative Code of 1987.)
Sec. 4. Effectivity. — In addition to other rule-
making requirements provided by law not
inconsistent with this Book, each rule shall
become effective fifteen (15) days from the date
of filing as above provided unless a different
date is fixed by law, or specified in the rule in
cases of imminent danger to public health,
safety and welfare, the existence of which must
be expressed in a statement accompanying the
rule. The agency shall take appropriate
measures to make emergency rules known to
persons who may be affected by them.
(Emphasis supplied, Chapter 2, Book VII of the
Administrative Code of 1987).
Once, more we advert to our ruling in Tañada vs. Tuvera, 146
SCRA 446 that:
. . . Administrative rules and regulations must
also be published if their purpose is to enforce
or implement existing law pursuant also to a
valid delegation. (p. 447.)
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. (p. 448.)
We agree that publication must be in full or it is
no publication at all since its purpose is to
 inform the public of the content of the laws. (p.
448.)

For lack of proper publication, the administrative circulars in

question may not be enforced and implemented.

WHEREFORE, the writ of prohibition is GRANTED. The

implementation of DOLE Department Order No. 16, Series of
1991, and POEA Memorandum Circulars Nos. 30 and 37,
Series of 1991, by the public respondents is hereby
SUSPENDED pending compliance with the statutory
requirements of publication and filing under the
aforementioned laws of the land.

SO ORDERED.
G.R. No. L-46158 November 28, 1986
TAYUG RURAL BANK, plaintiff-appellee,
vs.
CENTRAL BANK OF THE PHILIPPINES, defendant-
appellant.
Bengzon, Bengzon, Villaroman & De Vera Law Office for
plaintiff-appellee.
Evangelista, Bautista & Valdehuesa Law Office for
defendant-appellant.
PARAS, J.:p
Submitted on May 20, 1977 for decision by this Court is this
appeal from the decision dated January 6, 1971 rendered by
the Court of First Instance of Manila, Branch III in Civil Case
No. 76920, the decretal portion of which states as follows:
WHEREFORE, judgment is rendered for the
plaintiff on the complaint and the defendant is
ordered to further credit the plaintiff the
amounts collected as 10% penalty in the sum of
P19,335.88 or up to July 15, 1969 and to refrain
from collecting the said 10% penalty on the
remaining past due loans of plaintiff with the
defendant.
With respect to defendant's counterclaim,
judgment is hereby rendered against the
plaintiff and the defendant is ordered to pay the
Central Bank of the Philippines the
outstanding balance of its past overdue
accounts in the sum of P444,809,45 plus
accrued interest at the rate of 1/2 of 1 % per
annum with respect to the promissory notes
(Annexes 1 to 1-E of defendant's Answer) and 2-
1/2% per annum with respect to the promissory
notes (Annexes 1-f to 1-i of the Answer). From
this amount shall be deducted the sum of
P19,335.88 collected as 10% penalty.
The facts of the case based on the parties' stipulation of facts
(Record on Appeal p. 67), are as follows:
Plaintiff-Appellee, Tayug Rural Bank, Inc., is a banking
corporation in Tayug, Pangasinan. During the period from
December 28, 1962 to July 30, 1963, it obtained thirteen (13)
loans from Defendant-Appellant, Central Bank of the
Philippines, by way of rediscounting, at the rate of 1/2 of 1%
per annum from 1962 to March 28, 1963 and thereafter at the
rate of 2-1/2% per anum. The loans, amounting to P813,000.00
as of July 30, 1963, were all covered by corresponding
promissory notes prescribing the terms and conditions of the
aforesaid loans (Record on Appea, pp. 15-53). As of July 15,
1969, the outstanding balance was P 444,809.45 (Record on
Appeal, p. 56).
On December 23, 1964, Appellant, thru the Director of the
Department of Loans and Credit, issued Memorandum
Circular No. DLC-8, informing all rural banks that an
additional penalty interest rate of ten per cent (10%) per
annum would be assessed on all past due loans beginning
January 4, 1965. Said Memorandum Circular was actually
enforced on all rural banks effective July 4, 1965.
On June 27, 1969, Appellee Rural Bank sued Appellant in the
Court of First Instance of Manila, Branch III, to recover the
10% penalty imposed by Appellant amounting to P16,874.97,
as of September 27, 1968 and to restrain Appellant from
continuing the imposition of the penalty. Appellant filed a
counterclaim for the outstanding balance and overdue
accounts of Appellee in the total amount of P444,809.45 plus
accrued interest and penalty at 10% per annum on the
outstanding balance until full payment. (Record on Appeal, p.
13). Appellant justified the imposition of the penalty by way of
affirmative and special defenses, stating that it was legally
imposed under the provisions of Section 147 and 148 of the
Rules and Regulations Governing Rural Banks promulgated
by the Monetary Board on September 5, 1958, under authority
of Section 3 of Republic Act No. 720, as amended (Record on
Appeal, p. 8, Affirmative and Special Defenses Nos. 2 and 3).
In its answer to the counterclaim, Appellee prayed for the
dismissal of the counterclaim, denying Appellant's allegations
stating that if Appellee has any unpaid obligations with
Appellant, it was due to the latter's fault on account of its
flexible and double standard policy in the granting of
rediscounting privileges to Appellee and its subsequent
arbitrary and illegal imposition of the 10% penalty (Record on
Appeal, p. 57). In its Memorandum filed on November 11,
1970, Appellee also asserts that Appellant had no basis to
impose the penalty interest inasmuch as the promissory notes
covering the loans executed by Appellee in favor of Appellants
do not provide for penalty interest rate of 10% per annum on
just due loans beginning January 4, 1965 (Record on Appeal p.
96).
The lower court, in its Order dated March 3, 1970, stated that
"only a legal question has been raised in the pleadings" and
upholding the stand of plaintiff Rural Bank, decided the case
in its favor. (Rollo, p. 34).
Appellant appealed the decision of the trial court to the Court
of Appeals, for determination of questions of facts and of law.
However, in its decision promulgated April 13, 1977, the Court
of Appeals, finding no controverted facts and taking note of the
statement of the lower court in its pre-trial Order dated March
3, 1970 that only a legal question has been raised in the
pleadings, (Record on Appeal, p. 61), ruled that the resolution
of the appeal will solely depend on the legal issue of whether
or not the Monetary Board had authority to authorize
Appellant Central Bank to impose a penalty rate of 10% per
annum on past due loans of rural banks which had failed to
pay their accounts on time and ordered the certification of this
case to this Court for proper determination (Rollo, pp. 34-35).
On April 20, 1977, the entire record of the case was forwarded
to this Court (Rollo, p. 36). In the resolution of May 20, 1977,
the First Division of this Court, ordered the case docketed and
as already stated declared the same submitted for decision
(Rollo, p. 38).
In its Brief, Appellant assigns the following errors:
I. THE LOWER COURT ERRED
IN HOLDING THAT IT IS
BEYOND THE REACH OF THE
MONETARY BOARD TO METE
OUT PENALTIES ON PAST
DUE LOANS OF RURAL
BANKS ESPECIALLY SINCE
NO PENAL CLAUSE HAS
BEEN INCLUDED IN THE
PROMISSORY NOTES.
II. THE LOWER COURT
ERRED IN HOLDING THAT
THE IMPOSITION OF THE
PENALTY IS AN IMPAIRMENT
OF THE OBLIGATION OF
 CONTRACT WITHOUT DUE
PROCESS.
III. THE LOWER COURT
ERRED IN NOT FINDING
JUDGMENT AGAINST
PLAINTIFF FOR 10% COST OF
COLLECTION OF THE
PROMISSORY NOTE AS
PROVIDED THEREIN.
It is undisputed that no penal clause has been included in the
promissory notes. For this reason, the trial court is of the view
that Memorandum Circular DLC-8 issued on December 23,
1964 prescribing retroactive effect on all past due loans,
impairs the obligation of contract and deprives the plaintiff of
its property without due process of law. (Record on Appel, p.
40).
On the other hand appellant without opposing appellee's right
against impairment of contracts, contends that when the
promissory notes were signed by appellee, it was chargeable
with knowledge of Sections 147 and 148 of the rules and
regulations authorizing the Central Bank to impose additional
reasonable penalties, which became part of the agreement.
(ibid).
Accordingly, the issue is reduced to the sole question as to
whether or not the Central Bank can validly impose the 10%
penalty on Appellee's past overdue loans beginning July 4,
1965, by virtue of Memorandum Circular No. DLC-8 dated
December 23, 1964.
The answer is in the negative.
Memorandum Circular No. DLC-8 issued by the Director of
Appellant's Department of Loans and Credit on December 23,
1964, reads as follows:
Pursuant to Monetary Board Resolution No.
1813 dated December 18, 1964, and in
consonance with Section 147 and 148 of the
Rules and Regulations Governing Rural Banks
concerning the responsibility of a rural bank to
remit immediately to the Central Bank
payments received on papers rediscounted with
the latter including the loan value of
rediscounted papers as they mature, and to
liquidate fully its maturing loan obligations
with the Central Bank, personal checks, for
purposes of repayment, shall considered only
after such personal checks shall have been
honored at clearing.
In addition, rural banks which shall default in
their loan obligations, thus incurring past due
accounts with the Central Bank, shall be
assessed an additional penalty interest rate of
ten per cent (10%) per annum on such past due
accounts with the Central Bank over and above
the customary interest rate(s) at which such
loans were originally secured from the Central
Bank. (Record on Appeal, p. 135).
The above-quoted Memorandum Circular was issued on the
basis of Sections 147 and 148 of the Rules and Regulations
Governing Rural Banks of the Philippines approved on
September 5, 1958, which provide:
Section 147. Duty of Rural Bank to turn over
payment received for papers discounted or used
 for collateral. — A Rural Bank receiving any
payment on account of papers discounted or
used for collateral must turn the same over to
the creditor bank before the close of the
banking day next following the receipt of
payment, as long as the aggregate discounting
on loan amount is not fully paid, unless the
Rural Bank substitutes the same with another
eligible paper with at least the same or earlier
maturity and the same or greater value.
A Rural Bank failing to comply with the
provisions of the preceding paragraph shall ipso
facto lose its right to the rediscounting or loan
period, without prejudice to the Central Bank
imposing additional reasonable penalties,
including curtailment or withdrawal of
financial assistance.
Sec. 148. Default and other violations of
obligation by Rural Bank, effect. — A Rural
Bank becomes in default upon the expiration of
the maturity period of its note, or that of the
papers discounted or used as collateral, without
the necessity of demand.
A Rural Bank incurring default, or in any other
manner, violating any of the stipulations in its
note, shall suffer the consequences provided in
the second paragraph of the preceding section.
(Record on Appeal, p. 136.)
The "Rules and Regulations Governing Rural Banks" was
published in the Official Gazette, 55 O.G., on June 13, 1959,
pp. 5186-5289. It is by virtue of these same Rules that Rural
Banks re-discount their loan papers with the Central Bank at
2-1/2% interest per annum and in turn lend the money to the
public at 12% interest per annum (Defendant's Reply to
Plaintiff's Memorandum, Record on Appeal, p. 130).
Appellant maintains that it is pursuant to Section 3 of R.A.
No. 720, as amended, that the Monetary Board has adopted
the set of Rules and Regulations Governing Rural Banks. It
reads:
SEC. 3. In furtherance of this policy, the
Monetary Board of the Central Bank of the
Philippines shall formulate the necessary rules
and regulations governing the establishment
and operatives of Rural Banks for the purpose
of providing adequate credit facilities to small
farmers and merchants, or to cooperatives of
such farmers or merchants and to supervise the
operation of such banks.
The specific provision under the law claimed as basis for
Sections 147 and 148 of the Rules and Regulations Governing
Rural Banks, that is, on Appellant's authority to extend loans
to Rural Banks by way of rediscounting is Section 13 of R.A.
720, as amended, which provides:
SEC. 13. In an emergency or when a financial
crisis is imminent the Central Bank may give a
loan to any Rural Bank against assets of the
Rural Bank which may be considered
acceptable by a concurrent vote of at least, five
members of the Monetary Board.
In normal times, the Central Bank may re-
discount against papers evidencing a loan
granted by a Rural Bank to any of its customers
which can be liquefied within a period of two
 hundred and seventy days: PROVIDED,
HOWEVER, That for the purpose of
implementing a nationwide program of
agricultural and industrial development, Rural
Banks are hereby authorized under such terms
and conditions as the Central Bank shall
prescribe to borrow on a medium or long term
basis, funds that the Central Bank or any other
government financing institutions shall borrow
from the International Bank for Reconstruction
and Development or other international or
foreign lending institutions for the specific
purpose of financing the above stated
agricultural and industrial program.
Repayment of loans obtained by the Central
Bank of the Philippines or any other
government financing institution from said
foreign lending institutions under this section
shall be guaranteed by the Republic of the
Philippines.
As to the supervising authority of the Monetary Board of the
Central Bank over Rural Banks, the same is spelled-out under
Section 10 of R.A. 720, as follows:
SEC. 10. The power to supervise the operation
of any Rural Bank by the Monetary Board of
the Central Bank as herein indicated, shall
consist in placing limits to the maximum credit
allowed any individual borrower; in prescribing
the interest rate; in determining the loan period
and loan procedure; in indicating the manner in
which technical assistance shall be extended to
Rural Banks; in imposing a uniform accounting
system and manner of keeping the accounts and
records of the Rural Banks; in undertaking
regular credit examination of the Rural Banks:
in instituting periodic surveys of loan and
lending procedures, audits, test check of cash
and other transactions of the Rural Banks; in
conducting training courses for personnel of
Rural Banks; and, in general in supervising the
business operation of the Rural Banks.
Nowhere in any of the above-quoted pertinent provisions of
R.A. 720 nor in any other provision of R.A. 720 for that matter,
is the monetary Board authorized to mete out on rural banks
an additional penalty rate on their past due accounts with
Appellant. As correctly stated by the trial court, while the
Monetary Board possesses broad supervisory powers,
nonetheless, the retroactive imposition of administrative
penalties cannot be taken as a measure supervisory in
character. (Record on Appeal, p. 141).
Administrative rules and regulations have the force and effect
of law (Valerio v. Hon. Secretary of Agriculture and Natural
Resources, 7 SCRA 719; Commissioner of Civil Service v. Cruz,
15 SCRA 638; R.B. Industrial Development Company, Ltd. v.
Enage, 24 SCRA 365; Director of Forestry v. Munoz, 23 SCRA
1183; Gonzalo Sy v. Central Bank of the Philippines, 70 SCRA
570).
There are, however, limitations to the rule-making power of
administrative agencies. A rule shaped out by jurisprudence is
that when Congress authorizes promulgation of
administrative rules and regulations to implement given
legislation, all that is required is that the regulation be not in
contradiction with it, but conform to the standards that the
law prescribes (Director of Forestry v. Munoz, 23 SCRA 1183).
The rule delineating the extent of the binding force to be given
to administrative rules and regulations was explained by the
Court in Teoxon v. Member of the Board of Administrators (33
SCRA 588), thus: "The recognition of the power of
administrative officials to promulgate rules in the
implementation of the statute, as necessarily limited to what
is provided for in the legislative enactment, may be found as
early as 1908 in the case of United States v. Barrias (11 Phil.
327) in 1914 U.S. v. Tupasi Molina (29 Phil. 119), in
1936 People v. Santos(63 Phil. 300), in 1951 Chinese Flour
Importers Ass. v. Price Stabilization Board (89 Phil. 439), and
in 1962 Victorias Milling Co., Inc. v. Social Security
Commission (4 SCRA 627). The Court held in the same case
that "A rule is binding on the courts so long as the procedure
fixed for its promulgation is followed and its scope is within
the statute granted by the legislature, even if the courts are
not in agreement with the policy stated therein or its innate
wisdom ...." On the other hand, "administrative interpretation
of the law is at best merely advisory, for it is the courts that
finally determine what the law means." Indeed, it cannot be
otherwise as the Constitution limits the authority of the
President, in whom all executive power resides, to take care
that the laws be faithfully executed. No lesser administrative,
executive office, or agency then can, contrary to the express
language of the Constitution, assert for itself a more extensive
prerogative. Necessarily, it is bound to observe the
constitutional mandate. There must be strict compliance with
the legislative enactment. The rule has prevailed over the
years, the latest restatement of which was made by the Court
in the case of Bautista v. Junio (L-50908, January 31, 1984,
127 SCRA 342).
In case of discrepancy between the basic law and a rule or
regulation issued to implement said law, the basic law prevails
because said rule or regulation cannot go beyond the terms
and provisions of the basic law (People v. Lim, 108 Phil. 1091).
Rules that subvert the statute cannot be sanctioned
(University of St. Tomas v. Board of Tax Appeals, 93 Phil. 376;
Del Mar v. Phil. Veterans Administration, 51 SCRA 340).
Except for constitutional officials who can trace their
competence to act to the fundamental law itself, a public
official must locate in the statute relied upon a grant of power
before he can exercise it. Department zeal may not be
permitted to outrun the authority conferred by statute (Radio
Communications of the Philippines, Inc. v. Santiago, L-29236,
August 21, 1974, 58 SCRA 493).
When promulgated in pursuance of the procedure or authority
conferred upon the administrative agency by law, the rules
and regulations partake of the nature of a statute, and
compliance therewith may be enforced by a penal sanction
provided in the law (Victorias Milling Co., Inc. v. Social
Security Commission, 114 Phil. 555; People v. Maceren, L-
32166, October 18, 1977, 79 SCRA 462; Daza v. Republic, L-
43276, September 28, 1984, 132 SCRA 267). Conversely, the
rule is likewise clear. Hence an administrative agency cannot
impose a penalty not so provided in the law authorizing the
promulgation of the rules and regulations, much less one that
is applied retroactively.
The records show that DLC Form No. 11 (Folder of Exhibits, p.
16) was revised December 23, 1964 to include the penal clause,
as follows:
In the event that this note becomes past due,
the undersigned shall pay a penalty at the rate
of _____ per cent ( ) per annum on such past due
account over and above the interest rate at
which such loan was originally secured from the
Central Bank.
Such clause was not a part of the promissory notes executed by
Appellee to secure its loans. Appellant inserted the clause in
the revised DLC Form No. 11 to make it a part of the
contractual obligation of rural banks securing loans from the
Central Bank, after December 23, 1964. Thus, while there is
now a basis for the imposition of the 10% penalty rate on
overdue accounts of rural banks, there was none during the
period that Appellee contracted its loans from Appellant, the
last of which loan was on July 30, 1963. Surely, the rule
cannot be given retroactive effect.
PREMISES CONSIDERED, the decision of the trial court is
hereby AFFIRMED with modification that Appellee Rural
Bank is ordered to pay a sum equivalent to 10% of the
outstanding balance of its past overdue accounts, but not in
any case less than P500.00 as attorney's fees and costs of suit
and collection.

Finally, on March 31, 1970, the Monetary Board in its SO ORDERED.

Resolution No. 475 effective April 1, 1970, revoked its
Resolution No. 1813, dated December 18, 1964 imposing the
questioned 10% per annum penalty rate on past due loans of
rural banks and amended sub-paragraph (a), Section 10 of the
existing guidelines governing rural banks' applications for a
loan or rediscount, dated May 7, 1969 (Folder of Exhibits, p.
19). As stated by the trial court, this move on the part of the
Monetary Board clearly shows an admission that it has no
power to impose the 10% penalty interest through its rules
and regulations but only through the terms and conditions of
the promissory notes executed by the borrowing rural banks.
Appellant evidently hoped that the defect could be adequately
accomplished by the revision of DLC Form No. 11.

The contention that Appellant is entitled to the 10% cost of

collection in case of suit and should therefore, have been
awarded the same by the court below, is well taken. It is
provided in all the promissory notes signed by Appellee that in
case of suit for the collection of the amount of the note or any
unpaid balance thereof, the Appellee Rural Bank shall pay the
Central Bank of the Philippines a sum equivalent to ten (10%)
per cent of the amount unpaid not in any case less than five
hundred (P500.00) pesos as attorney's fees and costs of suit
and collection. Thus, Appellee cannot be allowed to come to
Court seeking redress for an wrong done against it and then
be allowed to renege on its corresponding obligations.
G.R. No. 70479 February 27, 1987
FIRESTONE TIRE AND RUBBER COMPANY OF THE
PHILIPPINES, petitioner,
vs.
CARLOS LARIOSA and NATIONAL LABOR
RELATIONS COMMISSION, respondents.
FERNAN, J:
In this petition for certiorari, petitioner Firestone Tire and
Rubber Company of the Philippines [Firestone for brevity]
assails the decision of public respondent National Labor
Relations Commission which ordered the reinstatement
without backwages of Carlos Lariosa, a dismissed tire builder
of petitioner, as having been rendered with grave abuse of
discretion amounting to lack of jurisdiction.
The facts are as follows:
Carlos Lariosa started working with Firestone on January 3,
1972 as a factory worker. At the time of his dismissal, he was
a tire builder.
At around 2:00 o'clock in the afternoon of July 27, 1983, as he
was about to leave the company premises Lariosa submitted
himself to a routine check by the security guards at the west
gate. He was frisked by Security Guard Ambrosio Liso [Lizo]
while his personal bag was inspected by Security Guard
Virgilio Olvez. In the course of the inspection, sixteen [16] wool
flannel swabs, all belonging to the company, were found inside
his bag, tucked underneath his soiled clothes.
As a result of the incident, Firestone terminated Lariosa's
services on August 2, 1983, citing as grounds therefor:
"stealing company property and loss of trust." 1 Firestone also
filed a criminal complaint against him with the Rizal provincial
fiscal for attempted theft [IS No. 83-436-M]. 2
Lariosa, on the other hand, sued Firestone before the Ministry
of Labor and Employment for illegal dismissal, violation of
Batas Pambansa Blg. 130 and its related rules and
regulations, and damages. The Labor Arbiter, in his decision
dated May 8, 1984, found Lariosa's dismissal
justified. 3 However, on appeal, the National Labor Relations
Commission on December 28, 1984 reversed the decision of the
Labor Arbiter [with one commissioner voting for affirmance]
and held that the dismissal of Lariosa was too severe a
penalty. It therefore ordered Lariosa's reinstatement but
without backwages, the period when he was out of work to be
considered a suspension. 4
Petitioner Firestone, in this special civil action for certiorari,
contends that the NLRC erred in not dismissing Lariosa's
appeal for being late, in finding that Lariosa was not accorded
due process and in reversing the Labor Arbiter.
We shall deal first with the timeliness of the appeal. It is
admitted that Lariosa filed his appeal on June 7, 1984 or after
the lapse of fourteen days from notice of the decision of the
Labor Arbiter. Article 223 of the Labor Code clearly provides
for a reglementary period of ten days within which to appeal
decision of the Labor Arbiter to the NLRC. The ten-day period
has been interpreted by this Court in the case of Vir-jen
Shipping and Marine Services, Inc. vs. NLRC, G.R. No. 58011-
12, July 20, 1982, 115 SCRA 347, 361, to mean ten "calendar"
days and not ten "working" days. However, the "Notice of
Decision" which Lariosa's lawyer received together with a copy
of the arbiter's decision advised them that an appeal could be
taken to the NLRC within ten "working" days from receipt of
the said decision. 5
Mindful of the fact that Lariosa's counsel must have been
misled by the implementing rules of the labor commission and
considering that the shortened period for appeal is principally
intended more for the employees' benefit, rather than that of
the employer, We are inclined to overlook this particular
procedural lapse and to proceed with the resolution of the
instant case.
A review of the record shows that Lariosa was indubitably
involved in the attempted theft of the flannel swabs. During
the investigation called by the company's industrial relations
manager Ms. Villavicencio on July 28, 1983, or one day after
the incident, Security Guards Liso and Olvez contradicted
Lariosa's bare claim that he had no intention to bring home
the swabs and that he had simply overlooked that he had
earlier placed them inside his bag after they were given to him
by his shift supervisor while he was busy at work. Guard
Olvez stated that when he confronted Lariosa with the swabs,
the latter replied that they were for "home use." And when he
requested Lariosa to stay behind while he reported the matter
to the authorities, Lariosa refused and hurriedly left the
premises and boarded a passing jeepney. 6
From the records, it is likewise clear that Firestone did not act
arbitrarily in terminating Lariosa's services. On the contrary,
there are transcripts to prove that an investigation of the
incident was promptly conducted in the presence of the
employee concerned, the union president and the security
guards who witnessed the attempted asportation. Records also
belie the allegation that Lariosa was shown his walking
papers on the very day of the incident. The letter of Ms.
Villavicencio to Lariosa dated August 1, 1983 informing the
latter of his dismissal effective August 2, 1983 conclusively
shows that he was discharged only on August 2, 1983, after an
investigation was held to ventilate the truth about the July 27
incident. 7 Thus, we cannot agree with the NLRC's conclusion
that even if Firestone had found substantial proof of Lariosa's
misconduct, it did not observe the statutory requirements of
due process.
There is no gainsaying that theft committed by an employee
constitutes a valid reason for his dismissal by the employer.
Although as a rule this Court leans over backwards to help
workers and employees continue with their employment or to
mitigate the penalties imposed on them, acts of dishonesty in
the handling of company property are a different matter. 8
Thus, under Article 283 of the Labor Code, an employer may
terminate an employment for "serious misconduct" or for
"fraud or willful breach by the employee of the trust reposed in
him by his employer or representative."
If there is sufficient evidence that an employee has been guilty
of a breach of trust or that his employer has ample reasons to
distrust him, the labor tribunal cannot justly deny to the
employer the authority to dismiss such an employee. 9
As a tire builder, Lariosa was entrusted with certain materials
for use in his job. On the day in question, he was given two
bundles of wool flannel swabs [ten pieces per bundle] for
cleaning disks. He used four swabs from one pack and kept the
rest [sixteen pieces] in his "blue travelling bag." 10 Why he
placed the swabs in his personal bag, which is not the usual
receptacle for company property, has not been satisfactorily
explained.
If Lariosa, by his own wrong-doing, could no longer be trusted,
it would be an act of oppression to compel the company to
retain him, fully aware that such an employee could, in the
long run, endanger its very viability.

The employer's obligation to give his workers just

compensation and treatment carries with it the corollary right
to expect from the workers adequate work, diligence and good
conduct. 11

In view of the foregoing, We rule that Firestone had valid

grounds to dispense with the services of Lariosa and that the
NLRC acted with grave abuse of discretion in ordering his
reinstatement. However, considering that Lariosa had worked
with the company for eleven years with no known previous
bad record, the ends of social and compassionate justice would
be served if he is paid full separation pay but not
reinstatement without backages as decreed by the NLRC. 12

WHEREFORE, the petition is granted. The decision of the

National Labor Relations Commission dated December 28,
1984 is reversed and set aside. Petitioner Firestone Tire and
Rubber Company of the Philippines is directed to pay its
dismissed worker Carlos Lariosa the separation pay to which
he may be entitled under the law, or any collective bargaining
agreement or company rules or practice, whichever is higher.

SO ORDERED.
G.R. No. L-14858 December 29, 1960
MARIANO S. GONZAGA, petitioner-appellee,
vs.
AUGUSTO CE DAVID, as Registrar of the Motor
Vehicles Office of Cagayan, respondent-appellant.
Office of the Asst. Solicitor General Guillermo E. Torres and
Solicitor E. D. Ignacio for appellant.
Ventura V. Perez for appellee.
REYES, J.B.L., J.:
The essential antecedents of this case are not disputed. On
February, 1957, Mariano Gonzaga, as owner, registered with
the Motor Vehicles Office a cargo truck and a passenger bus,
paying the first installment for registration fees due on said
vehicles for 1957. To cover the second installment for
registration fees, Gonzaga remitted to the Provincial
Treasurer of Cagayan, by registered mail, P500.00, under
postal money orders Nos. 18553, 18554 and 18555, purchased
from and issued by the Post Office of Camalaniugan, Cagayan.
The postal cancellation mark on the envelope containing the
remittance of Gonzaga bears the date August 31, 1957; so does
the postal cancellation mark on the face of the money orders.
The Registrar of the Motor Vehicles Office of Cagayan ruled
that pursuant to Section 8 (1), Act 3992, otherwise known as
the Revised Motor Vehicle Law, the second installment for
registration fees was payable on or before the last working day
of August; that the last working day of August, 1957 was
Friday, August 30, 1957; that consequently, the remittance of
Gonzaga bearing postal cancellation mark dated August 31,
1957 was made beyond the time fixed by law. Accordingly, said
official sought to impose a 50% delinquency penalty, or
otherwise, threatened to confiscate the certificate of
registration for the two trucks (Annexes "B" & "C"). lawphil.net
Gonzaga brought this action in the Court of First Instance,
which, upon a stipulation of facts, rendered judgment, the
dispositive part reading —
POR TANTO, el Juzgado dicta decision declarando,
como por la presente declara, que el pago hecho con los
giros postales Nos. 18553, 18554 y 18555, por el
recurrente, se ha hecho dentro del plazo fijado por ley;
y, por tanto, el recurrente no ha incurrido con
morosidad en cuanto a dicho pago.
Se ordena al recurrido, sus agentes y representantes,
que se abstengan de confiscar el certificado de registro
de los dos trucks del recurrente, por la alegada
morosidad del citado pago.
Sin costas.
ASI SE ORDENA.
The only issue in this appeal is whether the remittance of
petitioner-appellee covering the second installment of
registration fees for 1957, made by registered mail with postal
cancellation dated August 31, 1957, was within the time fixed
by law.
The following are the pertinent provisions of Act 3992 as
amended —
Sec. 8 (I) ". . . The registration fees provided in this Act
for trucks may be payable in two equal installments,
 the first to be paid on or before the last working day of
February, and the second to be paid on or before the
last working day of August. (Emphasis supplied)
Sec. 6 (b) "The date of cancellation of the postage
stamps of envelopes containing money orders, checks,
or cash shall be considered as the date of
application. . . .
In support of its contention that August 30, and not August 31,
was the last working day of August, 1957, respondent-
appellant invokes Republic Act No. 1880, otherwise known as
the "40-Hour Week Law", pursuant to which government
offices are to hold office from Monday to Friday only, unless
one of those expressly exempted therefrom.
As correctly held by the court below, the fact that pursuant to
Republic Act 1880, the Motor Vehicles Office in Tuguegarao,
Cagayan, had no office on Saturday, Aug. 31, 1957, is
immaterial in the case. The last working day contemplated in
Sec. 8(I) of Act 3992 as amended should not necessarily mean
the last working day for Motor Vehicle Office. Under Sec. 6(b)
of said Act, providing for payment of registration fees by mail,
the date of cancellation of the postage stamps of the envelope
containing the remittance is considered the date of application.
Consequently, where the manner of payment falls under said
Section 6(b), the law, in recognizing the date of cancellation as
the date of application, impliedly permits of a remittance or
payment within that last day of August that the Post Office
may still effect cancellation; and the remittance, in fact, bears
a postal cancellation, dated August 31, 1957. Moreover, it is
not pretended by respondent-appellant that the Post Office
ceased or has ceased to transact business and discharge its
functions on Saturdays by reason alone of Republic Act No.
1880. Clearly, therefore,the remittance by petitioner-appellee
was within the by law, as provided in Section 8 (I), in
connection with Section 6 (b) of Act 3992, as amended. lawphil.net
The fact that August 31, 1957 was declared a special public
holiday by Proclamation No. 437 (dated August 21, 1957) of
the President of the Philippines did not have the effect of
making the preceding day, August 30, the last day for paying
registration fees without penalty. On the contrary, Section 31
of the Revised Administrative Code provides —
Sec. 31. Pretermission of holiday. — Where the day, or
the last day, for doing any act required or permitted by
law falls on a holiday, the act may be done the next
succeeding business day.
In Calano vs. Cruz, 91 Phil., 247, we ruled as follows:
The complaint filed by the petitioner herein was
presented in the court a quo on November 23, 1951,
exactly on the eight day after the proclamation of the
respondent as duly elected councilor for the
Municipality of Orion, Bataan. It happens, however,
that November 22, 1951, the last day of the seven-day
period prescribed by Section 173 of the Revised
Election Code, was declared a "Special Public Holiday
For National Thanksgiving" by Proclamation No. 290,
series of 1951, of the President of the Philippines. The
trial court held that the provisions of Section 1 of Rule
28 of the Rules of Court could not be applied to the case
at bar because it is an election case (Rule 132, Rules of
Court), and declared that the complaint was filed
outside of the period provided for by law. Assuming
that Section 1 of Rule 28 of the Rules of Court is not
applicable, the law applicable is Section 31 of the
Revised Administrative Code, which provides that
"Where the day, or the last day, for doing any act
 required or permitted by law falls on a holiday, the act
may be done on the next succeeding business day." The
court a quo, therefore, committed an error in declaring
that the complaint was filed out of time.

The ruling is on all fours on the issue before us, and against
respondent-appellant.

The decision appealed from is affirmed. Without costs..

G.R. No. L-32116 April 2l, 1981
RURAL BANK OF CALOOCAN, INC. and JOSE O.
DESIDERIO, JR., petitioners,
vs.
THE COURT OF APPEALS and MAXIMA
CASTRO, respondents.
This is a petition for review by way of certiorari of the
decision 1 of the Court of Appeals in CA-G.R. No. 39760-R
entitled "Maxima Castro, plaintiff-appellee, versus Severino
Valencia, et al., defendants; Rural Bank of Caloocan, Inc., Jose
Desiderio, Jr. and Arsenio Reyes, defendants-appellants,"
which affirmed in toto the decision of the Court of First
Instance of Manila in favor of plaintiff- appellee, the herein
private respondent Maxima Castro.
On December 7, 1959, respondent Maxima Castro,
accompanied by Severino Valencia, went to the Rural Bank of
Caloocan to apply for an industrial loan. It was Severino
Valencia who arranged everything about the loan with the
bank and who supplied to the latter the personal data required
for Castro's loan application. On December 11, 1959, after the
bank approved the loan for the amount of P3,000.00, Castro,
accompanied by the Valencia spouses, signed a promissory
note corresponding to her loan in favor of the bank.
On the same day, December 11, 1959, the Valencia spouses
obtained from the bank an equal amount of loan for P3,000.00.
They signed a promissory note (Exhibit "2") corresponding to
their loan in favor of the bank and had Castro affixed thereon
her signature as co-maker.
The two loans were secured by a real-estate mortgage (Exhibit
"6") on Castro's house and lot of 150 square meters, covered by
Transfer Certificate of Title No. 7419 of the Office of the
Register of Deeds of Manila.
On February 13, 1961, the sheriff of Manila, thru Acting Chief
Deputy Sheriff Basilio Magsambol, sent a notice of sheriff's
sale addressed to Castro, announcing that her property
covered by T.C.T. No. 7419 would be sold at public auction on
March 10, 1961 to satisfy the obligation covering the two
promissory notes plus interest and attorney's fees.
Upon request by Castro and the Valencias and with
conformity of the bank, the auction sale that was scheduled for
March 10, 1961 was postponed for April 10, 1961. But when
April 10, 1961 was subsequently declared a special holiday,
the sheriff of Manila sold the property covered by T.C.T. No.
7419 at a public auction sale that was held on April 11, 1961,
which was the next succeeding business day following the
special holiday.
Castro alleged that it was only when she received the letter
from the Acting Deputy Sheriff on February 13, 1961, when
she learned for the first time that the mortgage contract
(Exhibit "6") which was an encumbrance on her property was
for P6.000.00 and not for P3,000.00 and that she was made to
sign as co-maker of the promissory note (Exhibit "2") without
her being informed of this.
On April 4, 1961, Castro filed a suit denominated "Re: Sum of
Money," against petitioners Bank and Desiderio, the Spouses
Valencia, Basilio Magsambol and Arsenio Reyes as defendants
in Civil Case No. 46698 before the Court of First Instance of
Manila upon the charge, amongst others, that thru mistake on
her part or fraud on the part of Valencias she was induced to
sign as co-maker of a promissory note (Exhibit "2") and to
constitute a mortgage on her house and lot to secure the
questioned note. At the time of filing her complaint,
respondent Castro deposited the amount of P3,383.00 with the
court a quo in full payment of her personal loan plus interest.
In her amended complaint, Castro prayed, amongst other, for
the annulment as far as she is concerned of the promissory
note (Exhibit "2") and mortgage (Exhibit "6") insofar as it
exceeds P3,000.00; for the discharge of her personal obligation
with the bank by reason of a deposit of P3,383.00 with the
court a quo upon the filing of her complaint; for the annulment
of the foreclosure sale of her property covered by T.C.T. No.
7419 in favor of Arsenio Reyes; and for the award in her favor
of attorney's fees, damages and cost.
In their answers, petitioners interposed counterclaims and
prayed for the dismissal of said complaint, with damages,
attorney's fees and costs. 2
The pertinent facts arrived from the stipulation of facts
entered into by the parties as stated by respondent Court of
Appeals are as follows:
Spawning the present litigation are the facts
contained in the following stipulation of facts
submitted by the parties themselves:
1. That the capacity and addresses of all the
parties in this case are admitted .
2. That the plaintiff was the registered owner of
a residential house and lot located at Nos. 1268-
1270 Carola Street, Sampaloc, Manila,
containing an area of one hundred fifty (150)
square meters, more or less, covered by T.C.T.
No. 7419 of the Office of the Register of Deeds
of Manila;
3. That the signatures of the plaintiff appearing
on the following documents are genuine:
a) Application for Industrial Loan with the
Rural Bank of Caloocan, dated December 7,
1959 in the amount of P3,000.00 attached as
Annex A of this partial stipulation of facts;
b) Promissory Note dated December 11, 1959
signed by the plaintiff in favor of the Rural
Bank of Caloocan for the amount of P3,000.00
as per Annex B of this partial stipulation of
facts;
c) Application for Industrial Loan with the
Rural Bank of Caloocan, dated December 11,
1959, signed only by the defendants, Severino
Valencia and Catalina Valencia, attached as
Annex C, of this partial stipulation of facts;
d) Promissory note in favor of the Rural Bank of
Caloocan, dated December 11, 1959 for the
amount of P3000.00, signed by the spouses
Severino Valencia and Catalina Valencia as
borrowers, and plaintiff Maxima Castro, as a
co-maker, attached as Annex D of this partial
stipulation of facts;
e) Real estate mortgage dated December 11,
1959 executed by plaintiff Maxima Castro, in
favor of the Rural Bank of Caloocan, to secure
the obligation of P6,000.00 attached herein as
Annex E of this partial stipulation of facts;
All the parties herein expressly reserved their
right to present any evidence they may desire
on the circumstances regarding the execution of
the above-mentioned documents.
4. That the sheriff of Manila, thru Acting Chief
Deputy Sheriff, Basilio Magsambol, sent a
notice of sheriff's sale, address to the plaintiff,
dated February 13, 1961, announcing that
plaintiff's property covered by TCT No. 7419 of
the Register of Deeds of the City of Manila,
would be sold at public auction on March 10,
1961 to satisfy the total obligation of P5,728.50,
plus interest, attorney's fees, etc., as evidenced
by the Notice of Sheriff's Sale and Notice of
Extrajudicial Auction Sale of the Mortgaged
property, attached herewith as Annexes F and
F-1, respectively, of this stipulation of facts;
5. That upon the request of the plaintiff and
defendants-spouses Severino Valencia and
Catalina Valencia, and with the conformity of
the Rural Bank of Caloocan, the Sheriff of
Manila postponed the auction sale scheduled for
March 10, 1961 for thirty (30) days and the
sheriff re-set the auction sale for April 10, 1961;
6. That April 10, 1961 was declared a special
public holiday; (Note: No. 7 is omitted upon
agreement of the parties.)
8. That on April 11, 1961, the Sheriff of Manila,
sold at public auction plaintiff's property
covered by T.C.T. No. 7419 and defendant,
Arsenio Reyes, was the highest bidder and the
corresponding certificate of sale was issued to
him as per Annex G of this partial stipulation of
facts;
9. That on April 16, 1962, the defendant
Arsenio Reyes, executed an Affidavit of
Consolidation of Ownership, a copy of which is
hereto attached as Annex H of this partial
stipulation of facts;
10. That on May 9, 1962, the Rural Bank of
Caloocan Incorporated executed the final deed
of sale in favor of the defendant, Arsenio Reyes,
in the amount of P7,000.00, a copy of which is
attached as Annex I of this partial stipulation of
facts;
11. That the Register of Deeds of the City of
Manila issued the Transfer Certificate of Title
No. 67297 in favor of the defendant, Arsenio
Reyes, in lieu of Transfer Certificate of Title No.
7419 which was in the name of plaintiff,
Maxima Castro, which was cancelled;
12. That after defendant, Arsenio Reyes, had
consolidated his title to the property as per
T.C.T. No. 67299, plaintiff filed a notice of lis
pendens with the Register of Deeds of Manila
and the same was annotated in the back of
T.C.T. No. 67299 as per Annex J of this partial
stipulation of facts; and
13. That the parties hereby reserved their
rights to present additional evidence on matters
not covered by this partial stipulation of facts.
 WHEREFORE, it is respectfully prayed that
the foregoing partial stipulation of facts be
approved and admitted by this Honorable
Court.
As for the evidence presented during the trial, We quote from
the decision of the Court of Appeals the statement thereof, as
follows:
In addition to the foregoing stipulation of facts,
plaintiff claims she is a 70-year old widow who
cannot read and write the English language;
that she can speak the Pampango dialect only;
that she has only finished second grade (t.s.n.,
p. 4, December 11, 1964); that in December
1959, she needed money in the amount of
P3,000.00 to invest in the business of the
defendant spouses Valencia, who accompanied
her to the defendant bank for the purpose of
securing a loan of P3,000.00; that while at the
defendant bank, an employee handed to her
several forms already prepared which she was
asked to sign on the places indicated, with no
one explaining to her the nature and contents of
the documents; that she did not even receive a
copy thereof; that she was given a check in the
amount of P2,882.85 which she delivered to
defendant spouses; that sometime in February
1961, she received a letter from the Acting
Deputy Sheriff of Manila, regarding the
extrajudicial foreclosure sale of her property;
that it was then when she learned for the first
time that the mortgage indebtedness secured by
the mortgage on her property was P6,000.00
and not P3,000.00; that upon investigation of
her lawyer, it was found that the papers she
was made to sign were:
(a) Application for a loan of P3,000.00 dated
December 7, 1959 (Exh. B-1 and Exh. 1);
(b) Promissory note dated December 11, 1959
for the said loan of P3,000.00 (Exh- B-2);
(c) Promissory note dated December 11, 1959
for P3,000.00 with the defendants Valencia
spouses as borrowers and appellee as co-maker
(Exh. B-4 or Exh. 2).
The auction sale set for March 10, 1961 was
postponed co April 10, 1961 upon the request of
defendant spouses Valencia who needed more
time within which to pay their loan of P3,000.00
with the defendant bank; plaintiff claims that
when she filed the complaint she deposited with
the Clerk of Court the sum of P3,383.00 in full
payment of her loan of P3,000.00 with the
defendant bank, plus interest at the rate of 12%
per annum up to April 3, 1961 (Exh. D).
As additional evidence for the defendant bank,
its manager declared that sometime in
December, 1959, plaintiff was brought to the
Office of the Bank by an employee- (t.s.n., p 4,
January 27, 1966). She wept, there to inquire if
she could get a loan from the bank. The claims
he asked the amount and the purpose of the
loan and the security to he given and plaintiff
said she would need P3.000.00 to be invested in
a drugstore in which she was a partner (t.s.n.,
p. 811. She offered as security for the loan her
 lot and house at Carola St., Sampaloc, Manila,
which was promptly investigated by the
defendant bank's inspector. Then a few days
later, plaintiff came back to the bank with the
wife of defendant Valencia A date was allegedly
set for plaintiff and the defendant spouses for
the processing of their application, but on the
day fixed, plaintiff came without the defendant
spouses. She signed the application and the
other papers pertinent to the loan after she was
interviewed by the manager of the defendant.
After the application of plaintiff was made,
defendant spouses had their application for a
loan also prepared and signed (see Exh. 13). In
his interview of plaintiff and defendant spouses,
the manager of the bank was able to gather
that plaintiff was in joint venture with the
defendant spouses wherein she agreed to invest
P3,000.00 as additional capital in the
laboratory owned by said spouses (t.s.n., pp. 16-
17) 3
The Court of Appeals, upon evaluation of the evidence,
affirmed in toto the decision of the Court of First Instance of
Manila, the dispositive portion of which reads:
FOR ALL THE FOREGOING
CONSIDERATIONS, the Court renders
judgment and:
(1) Declares that the promissory note, Exhibit
'2', is invalid as against plaintiff herein;
(2) Declares that the contract of mortgage,
Exhibit '6', is null and void, in so far as the
amount thereof exceeds the sum of P3,000.00
representing the principal obligation of
plaintiff, plus the interest thereon at 12% per
annum;
(3) Annuls the extrajudicial foreclosure sale at
public auction of the mortgaged property held
on April 11, 1961, as well as all the process and
actuations made in pursuance of or in
implementation thereto;
(4) Holds that the total unpaid obligation of
plaintiff to defendant Rural Bank of Caloocan,
Inc., is only the amount of P3,000.00, plus the
interest thereon at 12% per annum, as of April
3, 1961, and orders that plaintiff's deposit of
P3,383.00 in the Office of the Clerk of Court be
applied to the payment thereof;
(5) Orders defendant Rural Bank of Caloocan,
Inc. to return to defendant Arsenio Reyes the
purchase price the latter paid for the mortgaged
property at the public auction, as well as
reimburse him of all the expenses he has
incurred relative to the sale thereof;
(6) Orders defendants spouses Severino D.
Valencia and Catalina Valencia to pay
defendant Rural Bank of Caloocan, Inc. the
amount of P3,000.00 plus the corresponding
12% interest thereon per annum from
December 11, 1960 until fully paid; and
Orders defendants Rural Bank of Caloocan,
Inc., Jose Desiderio, Jr. and spouses Severino
D. Valencia and Catalina Valencia to pay
plaintiff, jointly and severally, the sum of
 P600.00 by way of attorney's fees, as well as
costs.
In view of the conclusion that the court has
thus reached, the counterclaims of defendant
Rural Bank of Caloocan, Inc., Jose Desiderio,
Jr. and Arsenio Reyes are hereby dismissed, as
a corollary
The Court further denies the motion of
defendant Arsenio Reyes for an Order requiring
Maxima Castro to deposit rentals filed on
November 16, 1963, resolution of which was
held in abeyance pending final determination of
the case on the merits, also as a consequence of
the conclusion aforesaid. 4
Petitioners Bank and Jose Desiderio moved for the
reconsideration 5 of respondent court's decision. The motion
having been denied, 6 they now come before this Court in the
instant petition, with the following Assignment of Errors, to
wit:
I REGULARITY AND VALIDITY OF HER
THE COURT OF APPEALS ERRED IN
UPHOLDING THE PARTIAL ANNULMENT
OF THE PROMISSORY NOTE, EXHIBIT 2,
AND THE MORTGAGE, EXHIBIT 6,
INSOFAR AS THEY AFFECT RESPONDENT
MAXIMA CASTRO VIS-A-VIS PETITIONER
BANK DESPITE THE TOTAL ABSENCE OF
EITHER ALLEGATION IN THE COMPLAINT
OR COMPETENT PROOF IN THE EVIDENCE
OF ANY FRAUD OR OTHER UNLAWFUL
CONDUCT COMMITTED OR PARTICIPATED
IN BY PETITIONERS IN PROCURING THE
EXECUTION OF SAID CONTRACTS FROM
RESPONDENT CASTRO.
II
THE COURT OF APPEALS ERRED IN
IMPUTING UPON AND CONSIDERING
PREJUDICIALLY AGAINST PETITIONERS,
AS BASIS FOR THE PARTIAL ANNULMENT
OF THE CONTRACTS AFORESAID ITS
FINDING OF FRAUD PERPETRATED BY
THE VALENCIA SPOUSES UPON
RESPONDENT CASTRO IN UTTER
VIOLATION OF THE RES INTER ALIOS
ACTA RULE.
III
THE COURT OF APPEAL ERRED IN NOT
HOLDING THAT, UNDER THE FACTS
FOUND BY IT, RESPONDENT CASTRO IS
UNDER ESTOPPEL TO IMPUGN THE
QUESTIONED TRANSACTION WITH
PETITIONER BANK.
IV
THE COURT OF APPEALS ERRED IN NOT
FINDING THAT, BETWEEN PETITIONERS
AND RESPONDENT CASTRO, THE LATTER
SHOULD SUFFER THE CONSEQUENCES
OF THE FRAUD PERPETRATED BY THE
VALENCIA SPOUSES, IN AS MUCH AS IT
WAS THRU RESPONDENT CASTRO'S
 NEGLIGENCE OR ACQUIESCENSE IF NOT
ACTUAL CONNIVANCE THAT THE
PERPETRATION OF SAID FRAUD WAS
MADE POSSIBLE.
V fraud perpetrated on her by the Valencias who had abused her
THE COURT OF APPEALS ERRED IN
UPHOLDING THE VALIDITY OF THE
DEPOSIT BY RESPONDENT CASTRO OF
P3,383.00 WITH THE COURT BELOW AS A
TENDER AND CONSIGNATION OF
PAYMENT SUFFICIENT TO DISCHARGE
SAID RESPONDENT FROM HER
OBLIGATION WITH PETITIONER BANK.
VI
THE COURT OF APPEALS ERRED IN NOT
DECLARING AS VALID AND BINDING
UPON RESPONDENT CASTRO THE
HOLDING OF THE SALE ON
FORECLOSURE ON THE BUSINESS DAY
NEXT FOLLOWING THE ORIGINALLY
SCHEDULED DATE THEREFOR WHICH
WAS DECLARED A HOLIDAY WITHOUT
NECESSITY OF FURTHER NOTICE
THEREOF.
The issue raised in the first three (3) assignment of errors is
whether or not respondent court correctly affirmed the lower
court in declaring the promissory note (Exhibit 2) invalid
insofar as they affect respondent Castro vis-a-vis petitioner
bank, and the mortgage contract (Exhibit 6) valid up to the
amount of P3,000.00 only.
Respondent court declared that the consent of Castro to the
promissory note (Exhibit 2) where she signed as co-maker with
the Valencias as principal borrowers and her acquiescence to
the mortgage contract (Exhibit 6) where she encumbered her
property to secure the amount of P6,000.00 was obtained by
confidence, taking advantage of her old age and ignorance of
her financial need. Respondent court added that "the mandate
of fair play decrees that she should be relieved of her
obligation under the contract" pursuant to Articles 24 7 and
1332 8 of the Civil Code.
The decision in effect relieved Castro of any liability to the
promissory note (Exhibit 2) and the mortgage contract
(Exhibit 6) was deemed valid up to the amount of P3,000.00
only which was equivalent to her personal loan to the bank.
Petitioners argued that since the Valencias were solely
declared in the decision to be responsible for the fraud against
Castro, in the light of the res inter alios acta rule, a finding of
fraud perpetrated by the spouses against Castro cannot be
taken to operate prejudicially against the bank. Petitioners
concluded that respondent court erred in not giving effect to
the promissory note (Exhibit 2) insofar as they affect Castro
and the bank and in declaring that the mortgage contract
(Exhibit 6) was valid only to the extent of Castro's personal
loan of P3,000.00.
The records of the case reveal that respondent court's findings
of fraud against the Valencias is well supported by evidence.
Moreover, the findings of fact by respondent court in the
matter is deemed final. 9 The decision declared the Valencias
solely responsible for the defraudation of Castro. Petitioners'
contention that the decision was silent regarding the
participation of the bank in the fraud is, therefore, correct.
We cannot agree with the contention of petitioners that the
bank was defrauded by the Valencias. For one, no claim was
made on this in the lower court. For another, petitioners did
not submit proof to support its contention.
At any rate, We observe that while the Valencias defrauded
Castro by making her sign the promissory note (Exhibit 2) and
the mortgage contract (Exhibit 6), they also misrepresented to
the bank Castro's personal qualifications in order to secure its
consent to the loan. This must be the reason which prompted
the bank to contend that it was defrauded by the Valencias.
But to reiterate, We cannot agree with the contention for
reasons above-mentioned. However, if the contention deserves
any consideration at all, it is in indicating the admission of
petitioners that the bank committed mistake in giving its
consent to the contracts.
Thus, as a result of the fraud upon Castro and the
misrepresentation to the bank inflicted by the Valencias both
Castro and the bank committed mistake in giving their
consents to the contracts. In other words, substantial mistake
vitiated their consents given. For if Castro had been aware of
what she signed and the bank of the true qualifications of the
loan applicants, it is evident that they would not have given
their consents to the contracts.
Pursuant to Article 1342 of the Civil Code which provides:
Art. 1342. Misrepresentation by a third person
does not vitiate consent, unless such
misrepresentation has created substantial
mistake and the same is mutual.
We cannot declare the promissory note (Exhibit 2) valid
between the bank and Castro and the mortgage contract
(Exhibit 6) binding on Castro beyond the amount of P3,000.00,
for while the contracts may not be invalidated insofar as they
affect the bank and Castro on the ground of fraud because the
bank was not a participant thereto, such may however be
invalidated on the ground of substantial mistake mutually
committed by them as a consequence of the fraud and
misrepresentation inflicted by the Valencias. Thus, in the case
of Hill vs. Veloso, 10 this Court declared that a contract may be
annulled on the ground of vitiated consent if deceit by a third
person, even without connivance or complicity with one of the
contracting parties, resulted in mutual error on the part of the
parties to the contract.
Petitioners argued that the amended complaint fails to contain
even a general averment of fraud or mistake, and its mention
in the prayer is definitely not a substantial compliance with
the requirement of Section 5, Rule 8 of the Rules of Court. The
records of the case, however, will show that the amended
complaint contained a particular averment of fraud against
the Valencias in full compliance with the provision of the
Rules of Court. Although, the amended complaint made no
mention of mistake being incurred in by the bank and Castro,
such mention is not essential in order that the promissory note
(Exhibit 2) may be declared of no binding effect between them
and the mortgage (Exhibit 6) valid up to the amount of
P3,000.00 only. The reason is that the mistake they mutually
suffered was a mere consequence of the fraud perpetrated by
the Valencias against them. Thus, the fraud particularly
averred in the complaint, having been proven, is deemed
sufficient basis for the declaration of the promissory note
(Exhibit 2) invalid insofar as it affects Castro vis-a-vis the
bank, and the mortgage contract (Exhibit 6) valid only up to
the amount of P3,000.00.
The second issue raised in the fourth assignment of errors is
who between Castro and the bank should suffer the
consequences of the fraud perpetrated by the Valencias.
In attributing to Castro an consequences of the loss,
petitioners argue that it was her negligence or acquiescence if
not her actual connivance that made the fraud possible.
Petitioners' argument utterly disregards the findings of
respondent Court of Appeals wherein petitioners' negligence in
the contracts has been aptly demonstrated, to wit:
A witness for the defendant bank, Rodolfo
Desiderio claims he had subjected the plaintiff-
appellee to several interviews. If this were true
why is it that her age was placed at 61 instead
of 70; why was she described in the application
(Exh. B-1-9) as drug manufacturer when in fact
she was not; why was it placed in the
application that she has income of P20,000.00
when according to plaintiff-appellee, she his not
even given such kind of information -the true
fact being that she was being paid P1.20 per
picul of the sugarcane production in her
hacienda and 500 cavans on the palay
production. 11
From the foregoing, it is evident that the bank was as much ,
guilty as Castro was, of negligence in giving its consent to the
contracts. It apparently relied on representations made by the
Valencia spouses when it should have directly obtained the
needed data from Castro who was the acknowledged owner of
the property offered as collateral. Moreover, considering
Castro's personal circumstances – her lack of education,
ignorance and old age – she cannot be considered utterly
neglectful for having been defrauded. On the contrary, it is
demanded of petitioners to exercise the highest order of care
and prudence in its business dealings with the Valencias
considering that it is engaged in a banking business –a
business affected with public interest. It should have
ascertained Castro's awareness of what she was signing or
made her understand what obligations she was assuming,
considering that she was giving accommodation to, without
any consideration from the Valencia spouses.
Petitioners further argue that Castro's act of holding the
Valencias as her agent led the bank to believe that they were
authorized to speak and bind her. She cannot now be
permitted to deny the authority of the Valencias to act as her
agent for one who clothes another with apparent authority as
her agent is not permitted to deny such authority.
The authority of the Valencias was only to follow-up Castro's
loan application with the bank. They were not authorized to
borrow for her. This is apparent from the fact that Castro went
to the Bank to sign the promissory note for her loan of
P3,000.00. If her act had been understood by the Bank to be a
grant of an authority to the Valencia to borrow in her behalf, it
should have required a special power of attorney executed by
Castro in their favor. Since the bank did not, We can rightly
assume that it did not entertain the notion, that the Valencia
spouses were in any manner acting as an agent of Castro.
When the Valencias borrowed from the Bank a personal loan
of P3,000.00 evidenced by a promissory note (Exhibit 2) and
mortgaged (Exhibit 6) Castro's property to secure said loan,
the Valencias acted for their own behalf. Considering however
that for the loan in which the Valencias appeared as principal
borrowers, it was the property of Castro that was being
mortgaged to secure said loan, the Bank should have exercised
due care and prudence by making proper inquiry if Castro's
consent to the mortgage was without any taint or defect. The
possibility of her not knowing that she signed the promissory
note (Exhibit 2) as co-maker with the Valencias and that her
property was mortgaged to secure the two loans instead of her
own personal loan only, in view of her personal circumstances
– ignorance, lack of education and old age – should have
placed the Bank on prudent inquiry to protect its interest and
that of the public it serves. With the recent occurrence of
events that have supposedly affected adversely our banking
system, attributable to laxity in the conduct of bank business
by its officials, the need of extreme caution and prudence by
said officials and employees in the discharge of their functions
cannot be over-emphasized.
Question is, likewise, raised as to the propriety of respondent
court's decision which declared that Castro's consignation in
court of the amount of P3,383.00 was validly made. It is
contended that the consignation was made without prior offer
or tender of payment to the Bank, and it therefore, not valid.
In holding that there is a substantial compliance with the
provision of Article 1256 of the Civil Code, respondent court
considered the fact that the Bank was holding Castro liable for
the sum of P6,000.00 plus 12% interest per annum, while the
amount consigned was only P3,000.00 plus 12% interest; that
at the time of consignation, the Bank had long foreclosed the
mortgage extrajudicially and the sale of the mortgage property
had already been scheduled for April 10, 1961 for non-payment
of the obligation, and that despite the fact that the Bank
already knew of the deposit made by Castro because the
receipt of the deposit was attached to the record of the case,
said Bank had not made any claim of such deposit, and that
therefore, Castro was right in thinking that it was futile and
useless for her to make previous offer and tender of payment
directly to the Bank only in the aforesaid amount of P3,000.00
plus 12% interest. Under the foregoing circumstances, the
consignation made by Castro was valid. if not under the strict
provision of the law, under the more liberal considerations of
equity.
The final issue raised is the validity or invalidity of the
extrajudicial foreclosure sale at public auction of the
mortgaged property that was held on April 11, 1961.
Petitioners contended that the public auction sale that was
held on April 11, 1961 which was the next business day after
the scheduled date of the sale on April 10, 1961, a special
public holiday, was permissible and valid pursuant to the
provisions of Section 31 of the Revised Administrative Code
which ordains:
Pretermission of holiday. – Where the day, or
the last day, for doing any act required or
permitted by law falls on a holiday, the act may
be done on the next succeeding business day.
Respondent court ruled that the aforesaid sale is null and
void, it not having been carried out in accordance with Section
9 of Act No. 3135, which provides:
Section 9. – Notice shall be given by posting
notices of the sale for not less than twenty days
in at least three public places of the
municipality or city where the property is
situated, and if such property is worth more
than four hundred pesos, such notice shall also
be published once a week for at least three
consecutive weeks in a newspaper of general
circulation in the municipality or city.
We agree with respondent court. The pretermission of a
holiday applies only "where the day, or the last day for doing
any act required or permitted by law falls on a holiday," or
when the last day of a given period for doing an act falls on a
holiday. It does not apply to a day fixed by an office or officer
of the government for an act to be done, as distinguished from
a period of time within which an act should be done, which
may be on any day within that specified period. For example,
if a party is required by law to file his answer to a complaint
within fifteen (15) days from receipt of the summons and the
last day falls on a holiday, the last day is deemed moved to the
next succeeding business day. But, if the court fixes the trial of
a case on a certain day but the said date is subsequently
declared a public holiday, the trial thereof is not automatically
transferred to the next succeeding business day. Since April
10, 1961 was not the day or the last day set by law for the
extrajudicial foreclosure sale, nor the last day of a given period
but a date fixed by the deputy sheriff, the aforesaid sale
cannot legally be made on the next succeeding business day
without the notices of the sale on that day being posted as
prescribed in Section 9, Act No. 3135.

WHEREFORE, finding no reversible error in the judgment

under review, We affirm the same in toto. No pronouncement
as to cost.

SO ORDERED.
G.R. No. L-7234 May 21, 1955
THE PEOPLE OF THE PHILIPPINES, plaintiff-appellant,
vs.
PAZ M. DEL ROSARIO, defendant-appellee.
Assistant Solicitor General, Guillermo E. Torres and Solicitor
Pacifico P. de Castro for appellant.
A. Mendoza, E. del Rosario and G. Romero for appellee.
LABRADOR, J.:
On July 27, 1953, an information was filed in the Municipal
Court of Pasay City charging Paz M. del Rosario with slight
physical injuries committed on the 28th day of May, 1953. The
accused thereupon presented a motion to quash the
information on the ground that the offense charged had
already prescribed in accordance with the provisions of
Articles 90 and 91 of the Revised Penal Code. The municipal
court sustained this motion and dismissed the case. Against
the order of dismissal appeal is made directly to this Court
under the provisions of section 17, sub-paragraph 6 of the
Judiciary Act of 1948 as only questions of law are involved in
the appeal.
The pertinent provisions of Articles 90 and 91 of the Revised
Penal Code are as follows:
ART. 90. Prescription of crimes.— . . . .
The offenses of oral defamation and slander by deed
shall prescribe in six months.
Light offenses prescribe in two months.
ART. 91. Computation of prescription of offenses.— The
period of prescription shall commence to run from the
day on which the crime is discovered by the offended
party, the authorities or their agents, . . . ..
The court a quo held that in accordance with Article 13 of the
new Civil Code the "month" mentioned in Article 90 of the
Revised Penal Code should be one of 30 days, and since the
period of prescription commences to run from the day "on
which the crime is discovered by the offended party," i.e., in
this case on May 28, 1953 when it was committed, the two
months period provided for the prescription of the offense
already expired when the information was filed, because the
filing was on the 61st day. The Solicitor General in this appeal
argues that in the same manner that Article 13 of the new
Civil Code is applied to determine the length of the two
months period required for the prescription of the offense, its
provision (of the said Article 13) contained in paragraph 3
which reads "In computing a period, the first day shall be
excluded, and the last day included" should also be applied, so
that the information should be considered as filed on the 60th
day and not on the 61st day after the offense has been
committed. The resolution of the appeal involves the
determination of two legal issues, first, whether the
prescriptive period should commence from the very day on
which the crime was committed, or from the day following that
in which it was committed, in accordance with the third
paragraph of Article 13 of the Civil Code of the Philippines,
and second, whether the term "month" in the Revised Penal
Code should be understood to be a month of 30 days, instead of
the civil calendar or calendar month.
As to the first question, we note that Article 91 of the Revised
Penal Code provides that the period shall commence to
run from the day on which the offense is committed or
discovered. The title indicates that the provision merely
purports to prescribe the manner of computing the period of
prescription. In the computation of a period of time within
which an act is to be done, the law in this jurisdiction has
always directed the first day be excluded and the last included
(See section 1, Rule 28 of the Rules of Court; section 13, Rev.
Adm. Code and Art. 13, Civil Code of the Philippines). And in
the case of Surbano vs. Gloria, 51 Phil., 415, where the
question involved was whether an offense had prescribed, we
held that from February 18 to March 15, 1927 only a period of
25 days elapsed, because we excluded the first day (February
18) and included the last day (March 15). The above method of
computation was in force in this jurisdiction even before the
advent of the American regime (Article 7, Spanish Civil Code).
It is logical to presume, therefore, that the Legislature in
enacting Article 91 of the Revised Penal Code meant or
intended to mean that in the computation of the period
provided for therein, the first day is to be excluded and the last
one to be included, in accord with existing laws.
We find much sense in the argument of the Solicitor General
that if the Civil Code of the Philippines is to be resorted to in
the interpretation of the length of the month, so should it be
resorted to in the computation of the period of prescription.
Besides, Article 18 of the Civil Code (Article 16 of the old Civil
Code) expressly directs that any deficiency in any special law
(such as the Revised Penal Code) must be supplied by its
provisions. As the Revised Penal Code is deficient in that it
does not explicitly define how the period is to be computed,
resort must be had to its Article 13, which contains in detail
the manner of computing a period. We find, therefore, that the
trial court committed error in not excluding the first day in the
computation of the period of prescription of the offense.
The other question is whether a month mentioned in Article
90 should be considered as the calendar month and not the 30-
day month. It is to be noted that no provision of the Revised
Penal Code defines the length of the month. Article 7 of the old
Civil Code provided that a month shall be understood as
containing 30 days; but this concept was modified by section
13 of the Revised Administrative Code which provides that a
month means the civil or calendar month and not the regular
30-day month (Gutierrez vs. Carpio, 53 Phil., 334). With the
approval of the Civil Code of the Philippines (R.A. No. 386),
however, we have reverted to the provisions of the Spanish
Civil Code in accordance with which a month is to be
considered as the regular 30-day month (Article 13). This
provision of the new Civil Code has been intended for general
application in the interpretation of the laws. As the offense
charged in the information in the case at bar took place on
May 28, 1953, after the new Civil Code had come to effect, this
new provision should apply, and in accordance therewith the
month in Article 90 of the Revised Penal Code should be
understood to mean the regular 30 — day month.
In our conclusion that the term "month" used in the Revised
Penal Code should be interpreted in the sense that the new
Civil Code defines the said term, we find persuasive authority
in a decision of the Supreme Court of Spain. In a case decided
by it in the year 1887 (S. de 30 de Marzo de 1887), prior to the
approval of the Civil Code of Spain, it had declared that when
the law spoke of months, it meant the natural month or the
solar month, in the absence of express provisions to the
contrary. But after the promulgation of the Civil Code of
Spain, which provided in its Article 7 a general rule for the
interpretation of the laws, and with particular respect to
months, that a month shall be understood as a 30-day month,
said court held that the two months period for the prescription
of a light offense should be understood to mean 60 days, a
month being a 30-day month. (S. de 6 de abril de 1895, 3
Viada, p. 45). Similarly, we hold that in view of the express
provisions of Article 13 of the new Civil Code the term "month"
used in Article 90 of the Revised Penal Code should be
understood to mean the 30-day month and not the solar or
civil month.

We hold, therefore, that the offense charged in the information

prescribed in 60 days, said period to be counted by excluding
May 28, the commission of the offense, and we find that when
the information was filed on July 27, 1953 the offense had not
yet been prescribed because July 27 is the sixtieth day from
May 29.

The order of dismissal appealed from is hereby reversed and

the case ordered reinstated. Without costs.
filart_1919 September 27, 1919
In re the complaint against Attorney ANACLETO
FILART.
Acting Attorney-General Feria for the Government.
The respondent in his own behalf.
MALCOLM, J.:
These proceedings were instituted at the instance of thirty-
seven residents of Asingan, Pangasinan, who filed a complaint
against attorney Anacleto Filart for malpractice, alleging in
substance:
1. That while Filart was deputy fiscal of Pangasinan he
received of them the sum of P111 as fees for drafting a
memorandum in connection with Registration Case No. 3,
Record No. 8540;
2. That Filart was guilty of fraud and negligence in
prosecuting the appeal to the Supreme Court, he having
practically abandoned the case.
In connection with point No. 1, even admitting that Filart
while deputy fiscal received such a sum of complainants,
which respondent denies, Filart seems to have had a legal
right to receive compensation as an attorney, the office of
deputy provincial fiscal not being specifically included in
section 36 of the Code of Civil Procedure as amended by Act
No. 1702, as an official who shall not engage in private
practice. It is also to be noted that Filart did not take up the
case of his own volition but was ordered by the court to defend
the rights of petitioners because the attorney they formerly
retained was almost always in a state of intoxication.
In connection with point No. 2, the following facts are
important:
1. That having resigned as deputy fiscal, and having engaged
in the practice of law, complainants asked Filart to prosecute
the appeal of their case;
2. That Filart received from complainants sums of money,
P780 according to complainants, and P160 according to
respondent;
3. That the complainants were driven from their lands, and
their houses were destroyed, by order of the court.
The facts which support the allegation of fraud and negligence
on the part of respondent are:
1. The lapse of fifty-one days between the receipt of notice of
denial of motion for a new trial (March 7, 1917) until the filing
of the bill of exceptions (April 27, 1917) when the statutory
period is only thirty days (Act No. 2347), sec. 26);
2. Failure to perfect a satisfactory bill of exceptions after
repeated amendments and re-amendments;
3. Failure to file a bond in order to prevent execution;
4. Assurances made by respondent that all was right.
1. This is explained by the fact that the record was not in the
clerk's office. The date when the answers to Filart's questions
from the Land Registration Office reached Filart, which were
to be made a part of the bill of exceptions, does not appear in
the record. Filart also alleges he made an oral motion to
extend the period fixed by law for the filing of the bill of
exceptions, but that motion appears to have been overlooked
by the judge;
2. The parties are agreed that the bills of exceptions are
voluminous. Respondent further pleads pressure of work in his
law office;
3. Respondent says that he believed execution would not be
valid until after certiorari proceedings were decided;
4. The exact nature of the assurances do not clearly appear in
the record — possibly they are no more than what an attorney
fairly confident of success would make to a client.
The Acting Attorney-General believes that the facts are not
sufficient to support the complaint, and recommends dismissal
of the case. We agree to the extent that such gross misconduct
or negligence has not been shown as warrants disbarment or
suspension pursuant to sections 21 and 22 of the Code of Civil
Procedure. "That part of the profession," said Lord Mansfield
in Pitt vs. Yalden, ([1767], 4 Burr., 2060), "which is carried on
by attorneys is liberal and reputable, as well as useful to the
public, when they conduct themselves with honor and
integrity; and they ought to be protected when they act to the
best of their skill and knowledge. But every man is liable to
error; and I should be very sorry that it should be taken for
granted that an attorney is answerable for every error or
mistake. . . . A counsel may mistake as well as an attorney. . . .
Yet no one will say that a counsel who has been mistaken shall
be charged. . . . Not only counsel but judges may differ, or
doubt, or take time to consider. Therefore, an attorney ought
not to be liable in case of reasonable doubt." "No attorney,"
said Chief Justice Abbott, "is bound to know all the law; God
forbid that it should be imagined that an attorney or a counsel,
or even a judge, is bound to know all the law."
(Montorious vs. Jeffreys, 2 Car. & P., 113.)
The court, having in mind the many appeals which have been
dismissed because of the lack of diligence of counsel, cannot let
the occurrence pass without expressing a strong disapproval of
such criminal carelessness. While we would not wish to
assume a harsh and uncompromising attitude towards
attorneys-at-law, we would wish for them to know that by
indulging in such unprofessional tactics they become unworthy
of the trust which the law reposes in them. The lack of due
care is a breach of the attorney's undertaking with his client,
and is indicative of a disregard of the attorney's duties to the
court. We bring to the notice of clients whose rights have been
prejudiced by the failure or by the delay of an attorney in
preparing or filing pleadings necessary in the proper conduct
of a cause, and in taking such steps as may be required in the
progress of the case, that the client who has suffered damages
as the result of his attorney's negligence or misconduct may
recover therefor. In Drais vs. Hoggan ([1875], 50 Cal., 121),
although many other cases might be cited, it was held that "if
a judgment is obtained against a party upon a complaint
which is radically defective, and he desires to appeal, and
procures bondsmen, but his attorney neglects to do so until the
time for appeal expires, the attorney is guilty of gross
negligence, and is liable for the loss sustained by the client."
Without, therefore, desiring especially to overemphasize the
dereliction of Attorney Anacleto Filart for, sad to relate, he is
only one of a class, it does become our solemn duty to
reprimand him for carelessness and misconduct in attending
to the cause of poor clients. Let a copy of this order be
furnished to the respondent for his information with a
warning that a more severe punishment will be meted out to
him in case of a repetition of similar acts and omissions; and
let a copy hereof be filed with his personal papers in this court.
So ordered.
G.R. No. L-52306 October 12, 1981
ABS-CBN BROADCASTING CORPORATION, petitioner,
vs.
COURT OF TAX APPEALS and THE COMMISSIONER
OF INTERNAL REVENUE, respondents.
MELENCIO-HERRERA, J.:
On April 12, 1961, in implementation of the aforequoted
This is a Petition for Review on certiorari of the Decision of the
provision, the Commissioner of Internal Revenue issued
Court of Tax Appeals in C.T.A. Case No. 2809, dated
General Circular No. V-334 reading thus:
November 29, 1979, which affirmed the assessment by the
Commissioner of Internal Revenue, dated April 16, 1971, of a
deficiency withholding income tax against petitioner, ABS-
CBN Broadcasting Corporation, for the years 1965, 1966, 1967
and 1968 in the respective amounts of P75,895.24, P99,239.18,
P128,502.00 and P222, 260.64, or a total of P525,897.06.
During the period pertinent to this case, petitioner corporation
was engaged in the business of telecasting local as well as
foreign films acquired from foreign corporations not engaged
in trade or business within the Philippines. for which
petitioner paid rentals after withholding income tax of 30%of
one-half of the film rentals.
In so far as the income tax on non-resident corporations is
concerned, section 24 (b) of the National Internal Revenue
Code, as amended by Republic Act No. 2343 dated June 20,
1959, used to provide:
(b) Tax on foreign corporations.—(1) Non-
resident corporations.— There shall be levied,
collected, and paid for each taxable year, in lieu
of the tax imposed by the preceding paragraph,
upon the amount received by every foreign
corporation not engaged in trade or business
within the Philippines, from an sources within
the Philippines, as interest, dividends, rents,
salaries, wages, premiums, annuities,
compensations, remunerations, emoluments, or
other fixed or determinable annual or periodical
gains, profits, and income, a tax equal to
thirty per centum of such amount. (Emphasis
supplied)
In connection with Section 24 (b) of Tax Code,
the amendment introduced by Republic Act No.
2343, under which an income tax equal to 30%
is levied upon the amount received by every
foreign corporation not engaged in trade or
business within the Philippines from all sources
within this country as interest, dividends,
rents, salaries, wages, premiums, annuities,
compensations, remunerations, emoluments, or
other fixed or determinable annual or periodical
gains, profits, and income, it has been
determined that the tax is still imposed on
income derived from capital, or labor, or both
combined, in accordance with the basic
principle of income taxation (Sec. 39, Income
Tax Regulations), and that a mere return of
capital or investment is not income (Par. 5,06, 1
Mertens Law of Federal 'Taxation). Since
according to the findings of the Special Team
who inquired into business of the non-resident
foreign film distributors, the distribution or
 exhibition right on a film is invariably acquired
for a consideration, either for a lump sum or a
percentage of the film rentals, whether from a
parent company or an independent outside
producer, apart of the receipts of a non-resident
foreign film distributor derived from said film
represents, therefore, a return of investment.
xxx xxx xxx
4. The local distributor should withhold 30% of
one-half of the film rentals paid to the non-
resident foreign film distributor and pay the
same to this office in accordance with law
unless the non- resident foreign film distributor
makes a prior settlement of its income tax
liability. (Emphasis ours).
Pursuant to the foregoing, petitioner dutifully withheld and
turned over to the Bureau of Internal Revenue the amount of
30% of one-half of the film rentals paid by it to foreign
corporations not engaged in trade or business within the
Philippines. The last year that petitioner withheld taxes
pursuant to the foregoing Circular was in 1968.
On June 27, 1968, Republic Act No. 5431 amended Section 24
(b) of the Tax Code increasing the tax rate from 30 % to 35 %
and revising the tax basis from "such amount" referring to
rents, etc. to "gross income," as follows:
(b) Tax on foreign corporations.—(1) Non-
resident corporations.—A foreign corporation
not engaged in trade or business in the
Philippines including a foreign life insurance
company not engaged in the life insurance
business in the Philippines shall pay a tax
equal to thirty-five per cent of the gross income
received during each taxable year from all
sources within the Philippines, as interests,
dividends, rents, royalties, salaries, wages,
premiums, annuities, compensations,
remunerations for technical services or
otherwise, emoluments or other fixed or
determinable annual, periodical or casual gains,
profits, and income, and capital gains, Provided
however, That premiums shah not include
reinsurance premiums. (Emphasis supplied)
On February 8, 1971, the Commissioner of Internal Revenue
issued Revenue Memorandum Circular No. 4-71, revoking
General Circular No. V-334, and holding that the latter was
"erroneous for lack of legal basis," because "the tax therein
prescribed should be based on gross income without deduction
whatever," thus:
After a restudy and analysis of Section 24 (b) of
the National Internal Revenue Code, as
amended by Republic Act No. 5431, and guided
by the interpretation given by tax authorities to
a similar provision in the Internal Revenue
Code of the United States, on which the
aforementioned provision of our Tax Code was
patterned, this Office has come to the
conclusion that the tax therein
prescribed should be based on gross income
without t deduction whatever. Consequently,
the ruling in General Circular No. V-334, dated
April 12, 1961, allowing the deduction of the
proportionate cost of production or exhibition of
motion picture films from the rental income of
non- resident foreign corporations, is erroneous
for lack of legal basis.
 In view thereof, General Circular No. V-334, Add: 1/2% mo. int. fr. 4- 11,577.24
dated April 12, 1961, is hereby revoked and 16-66 to 4-16-69
henceforth, local films distributors and
exhibitors shall deduct and withhold 35% of the Total amount due & P 75,895.24
entire amount payable by them to non-resident collectible
foreign corporations, as film rental or royalty,
or whatever such payment may be
denominated, without any deduction whatever, 1966
pursuant to Section 24 (b), and pay the
withheld taxes in accordance with Section 54 of Total amount remitted P373,492.24
the Tax Code, as amended.
Withholding tax due 112,048.00
All rulings inconsistent with this Circular is thereon
likewise revoked. (Emphasis ours)
Less: Amount already 27,947.00
On the basis of this new Circular, respondent Commissioner of assessed
Internal Revenue issued against petitioner a letter of
Balance 84,101.00
assessment and demand dated April 15, 1971, but allegedly
released by it and received by petitioner on April 12, 1971, Add: 11/2%mo. int. fr. 15,138.18
requiring them to pay deficiency withholding income tax on 4-16-67 to 4-116-70
the remitted film rentals for the years 1965 through 1968 and
film royalty as of the end of 1968 in the total amount of Total amount due & P99,239.18
P525,897.06 computed as follows: collectible

1965
1967
Total amount remitted P 511,059.48 Total amount remitted P601,160.65
Withholding tax due 153,318.00
thereon Withholding tax 180,348.00
due thereon
Less: Amount already 89,000.00
assessed Less: Amount 71,448.00
already assessed
Balance P64,318.00
Balance 108,900.00
 Add: 1/2% mo. int. 19,602.00 For the reasons given, the Court finds the
fr. 4-16-68 to 4-16- assessment issued by respondent on April 16,
71 1971 against petitioner in the amounts of
P75,895.24, P 99,239.18, P128,502.00 and
Total amount due P128,502.00 P222,260.64 or a total of P525,897.06 as
& collectible deficiency withholding income tax for the years
1965, 1966, 1967 and 1968, respectively, in
accordance with law. As prayed for, the petition
1968 for review filed in this case is dismissed, and
petitioner ABS-CBN Broadcasting Corporation
Total amount remitted P881,816.92 is hereby ordered to pay the sum of P525,897.06
to respondent Commissioner of Internal
Withholding tax due 291,283.00 Revenue as deficiency withholding income tax
thereon for the taxable years 1965 thru 1968, plus the
surcharge and interest which have accrued
Less: Amount 92,886.00 thereon incident to delinquency pursuant to
already assessed Section 51 (e) of the National Internal Revenue
Code, as amended.
Balance P198,447.00
WHEREFORE, the decision appealed from is
Add: 1/2% mo. int. fr. 23,813.64
hereby affirmed at petitioner's cost.
4-16-69 to 4-29-71

Total amount due & P222,260.44 1 SO ORDERED. 2

collectible
The issues raised are two-fold:
On May 5, 1971, petitioner requested for a reconsideration and
I. Whether or not respondent can apply General
withdrawal of the assessment. However, without acting
Circular No. 4-71 retroactively and issue a
thereon, respondent, on April 6, 1976, issued a warrant of
deficiency assessment against petitioner in the
distraint and levy over petitioner's personal as well as real
amount of P 525,897.06 as deficiency
properties. The petitioner then filed its Petition for Review
withholding income tax for the years 1965,
with the Court of Tax Appeals whose Decision, dated
1966, 1967 and 1968.
November 29, 1979, is, in turn, the subject of this review. The
Tax Court held:
II. Whether or not the right of the
Commissioner of Internal Revenue to assess the
 deficiency withholding income tax for the year
196,5 has prescribed. 3
Upon the facts and circumstances of the case, review is
warranted.
In point is Sec. 338-A (now Sec. 327) of the Tax Code. As
inserted by Republic Act No. 6110 on August 9, 1969, it
provides:
Sec. 338-A. Non-retroactivity of rulings. — Any
revocation, modification, or reversal of and of
the rules and regulations promulgated in
accordance with the preceding section or any of
the rulings or circulars promulgated by the
Commissioner of Internal Revenue shall not be
given retroactive application if the relocation,
modification, or reversal will be prejudicial to
the taxpayers, except in the following cases: (a)
where the taxpayer deliberately mis-states or
omits material facts from his return or any
document required of him by the Bureau of
Internal Revenue: (b) where the facts
subsequently gathered by the Bureau of
Internal Revenue are materially different from
the facts on which the ruling is based; or (c)
where the taxpayer acted in bad faith. (italics
for emphasis)
It is clear from the foregoing that rulings or circulars
promulgated by the Commissioner of Internal Revenue have
no retroactive application where to so apply them would be
prejudicial to taxpayers. The prejudice to petitioner of the
retroactive application of Memorandum Circular No. 4-71 is
beyond question. It was issued only in 1971, or three years
after 1968, the last year that petitioner had withheld taxes
under General Circular No. V-334. The assessment and
demand on petitioner to pay deficiency withholding income tax
was also made three years after 1968 for a period of time
commencing in 1965. Petitioner was no longer in a position to
withhold taxes due from foreign corporations because it had
already remitted all film rentals and no longer had any control
over them when the new Circular was issued. And in so far as
the enumerated exceptions are concerned, admittedly,
petitioner does not fall under any of them.
Respondent claims, however, that the provision on non-
retroactivity is inapplicable in the present case in that General
Circular No. V-334 is a nullity because in effect, it changed the
law on the matter. The Court of Tax Appeals sustained this
position holding that: "Deductions are wholly and exclusively
within the power of Congress or the law-making body to grant,
condition or deny; and where the statute imposes a tax equal
to a specified rate or percentage of the gross or entire amount
received by the taxpayer, the authority of some administrative
officials to modify or change, much less reduce, the basis or
measure of the tax should not be read into law." 4 Therefore,
the Tax Court concluded, petitioner did not acquire any vested
right thereunder as the same was a nullity.
The rationale behind General Circular No. V-334 was clearly
stated therein, however: "It ha(d) been determined that the
tax is still imposed on income derived from capital, or labor, or
both combined, in accordance with the basic principle of
income taxation ...and that a mere return of capital or
investment is not income ... ." "A part of the receipts of a non-
resident foreign film distributor derived from said film
represents, therefore, a return of investment." The Circular
thus fixed the return of capital at 50% to simplify the
administrative chore of determining the portion of the rentals
covering the return of capital." 5
Were the "gross income" base clear from Sec. 24 (b), perhaps,
the ratiocination of the Tax Court could be upheld. It should
be noted, however, that said Section was not too plain and
simple to understand. The fact that the issuance of the
General Circular in question was rendered necessary leads to
no other conclusion than that it was not easy of comprehension
and could be subjected to different interpretations.
In fact, Republic Act No. 2343, dated June 20, 1959, supra,
which was the basis of General Circular No. V-334, was just
one in a series of enactments regarding Sec. 24 (b) of the Tax
Code. Republic Act No. 3825 came next on June 22, 1963
without changing the basis but merely adding a proviso (in
bold letters).
(b) Tax on foreign corporation.—(1) Non-
resident corporations. — There shall be levied,
collected and paid for each taxable year, in lieu
of the tax imposed by the preceding paragraph,
upon the amount received by every foreign
corporation not engaged in trade or business
within the Philippines, from all sources within
the Philippines, as interest, dividends, rents,
salaries, wages, premiums annuities,
compensations, remunerations, emoluments, or
other fixed or determinable annual or periodical
gains, profits, and income, a tax equal to
thirty per centum of such amount: PROVIDED,
HOWEVER, THAT PREMIUMS SHALL NOT
INCLUDE REINSURANCE PREMIUMS.
(double emphasis ours).
Republic Act No. 3841, dated likewise on June 22, 1963,
followed after, omitting the proviso and inserting some words
(also in bold letters).
(b) Tax on foreign corporations.—(1) Non-
resident corporations.—There shall be levied,
collected and paid for each taxable year, in lieu
of the tax imposed by the preceding paragraph,
upon the amount received by every foreign
corporation not engaged in trade or business
within the Philippines, from all sources within
the Philippines, as interest, dividends, rents,
salaries, wages, premiums, annuities,
compensations, remunerations, emoluments, or
other fixed or determinable annual or periodical
OR CASUAL gains, profits and income, AND
CAPITAL GAINS, a tax equal to thirty per
centum of such amount. 6 (double emphasis
supplied)
The principle of legislative approval of administrative
interpretation by re-enactment clearly obtains in this case. It
provides that "the re-enactment of a statute substantially
unchanged is persuasive indication of the adoption by
Congress of a prior executive construction. 7 Note should be
taken of the fact that this case involves not a mere opinion of
the Commissioner or ruling rendered on a mere query, but a
Circular formally issued to "all internal revenue officials" by
the then Commissioner of Internal Revenue.
It was only on June 27, 1968 under Republic Act No.
5431, supra, which became the basis of Revenue Memorandum
Circular No. 4-71, that Sec. 24 (b) was amended to refer
specifically to 35% of the "gross income."
This Court is not unaware of the well-entrenched principle
that the Government is never estopped from collecting taxes
because of mistakes or errors on the part of its
agents. 8 In fact, utmost caution should be taken in this
regard. 9 But, like other principles of law, this also admits of
exceptions in the interest of justice and fairplay. The insertion
of Sec. 338-A into the National Internal Revenue Code, as held
in the case of Tuason, Jr. vs. Lingad, 10 is indicative of
legislative intention to support the principle of good faith. In
fact, in the United States, from where Sec. 24 (b) was
patterned, it has been held that the Commissioner of Collector
is precluded from adopting a position inconsistent with one
previously taken where injustice would result therefrom, 11 or
where there has been a misrepresentation to the taxpayer. 12

We have also noted that in its Decision, the Court of Tax

Appeals further required the petitioner to pay interest and
surcharge as provided for in Sec. 51 (e) of the Tax Code in
addition to the deficiency withholding tax of P 525,897.06.
This additional requirement is much less called for because
the petitioner relied in good faith and religiously complied
with no less than a Circular issued "to all internal revenue
officials" by the highest official of the Bureau of Internal
Revenue and approved by the then Secretary of Finance. 13

With the foregoing conclusions arrived at, resolution of the

issue of prescription becomes unnecessary.

WHEREFORE, the judgment of the Court of Tax Appeals is

hereby reversed, and the questioned assessment set aside. No
costs.

SO ORDERED.
G.R. No. L-10712 August 10, 1916 The relation of master and servant, which was created by the
contract, cast certain duties and obligations upon the parties,
ANSELMO FERRAZZINI, plaintiff-appellee, which they were bound to discharge and fulfill; the foremost,
vs. on the part of the master, were those of furnishing the servant
CARLOS GSELL, defendant-appellant. with a reasonably safe place to work, to pay him for his
services, and not to discharge him until the expiration of six
William A. Kincaid and Thomas L. Hartigan for appellant. months after notice; and the foremost, on the part of the
Ramon Sotelo for appellee. servant, were those of loyalty, faithfulness, and obedience to
all reasonable orders not inconsistent with the contract.
TRENT, J.: Consequently, if the plaintiff's discharge were without just
cause, it was in violation of the contract of service and he is
entitled to recover. Otherwise, he is not, because the breach on
This action was brought to recover damages for an alleged
his part must necessarily have occurred before his discharge.
wrongful discharge of the plaintiff, who had been employed by
Hence, the defendant must prove justification for his act for
the defendant for an indefinite time to work in the latter's
the reason that it was in contravention of the six-months
industrial enterprises in the city of Manila. The defendant
clause in the contract. In order to justify the dismissal of the
admitted that he discharged the plaintiff without giving him
plaintiff, the defendant must show that the plaintiff was guilty
the "written advice of six months in advance" as provided in
of conduct which can be construed to be a breach of some
the contract, but alleged that the discharge was lawful on
express or implied provision in the contract of service. If it has
account of absence, unfaithfulness, and disobedience of orders.
been shown that the plaintiff's conduct was inconsistent with
The defendant sought affirmative relief for a further alleged
the relation of master and servant or incompatible with the
breach of the contract by the plaintiff after his discharge.
due and faithful performance of his duties, his discharge was
From a judgment in favor of the plaintiff the defendant
justified. In view of the fact that the determination of these
appealed and now urges that the trial court erred (1) in
questions necessarily requires a careful review of the evidence
finding that the plaintiff's discharge was not justified and (2)
and in view of the further fact that we cannot accept the trial
in declining to consider the counterclaim and enter judgment
court's findings upon these important points, we think it
in accordance therewith.
advisable to set forth briefly the substance of all of the
material testimony submitted by both parties.
1. The plaintiff engaged his "skilled service" to the defendant
for the entire existence "of this agreement" at a fixed monthly
ANSELMO FERRAZZINI: On Friday evening at
salary and agreed "to devote his entire time and efforts to the
supper there was some talk about Mr. Gsell measuring
best of his knowledge and skill exclusively in carrying out in
the goods for the umbrellas. Then I said that if Mr.
the most satisfactory manner possible all of the work which
Gsell does this, it is my idea that he has no confidence
may be entrusted to him during the existence of this contract
in his employees. I was talking to everybody in general.
and undertaking, furthermore, to exercise a strict discretion in
There were present Mr. Specht, Mr. Alberto Ferrazzini
all matters pertaining to the work so entrusted to him and the
and Mr. Inhelder. Mr. Specht was an employee of the
whole thereof, . . . ."
defendant at the time. I do not remember telling
Specht that he was not receiving sufficient salary. The
only thing I remember distinctly is that i said `that Mr.
Gsell does not seem to have any confidence in us.'
Q. Is it not a fact that shortly, or sometime before
your discharge, you have been in the habit of leaving
the factory for considerable periods in the morning to
go outside for the purpose of taking a drink? —
A. As long as I have been with the firm of Carlos
Gsell I was allowed in the morning ten or fifteen
minutes during the hot season to absent myself to have
a drink of beer or whisky and soda; and the same in the
afternoon.
Q. Is it not a fact that Mr. Bender, the manager of
the factory, had repeated spoken to you, or had several
times spoken to you about your habit of leaving the
factory for the purpose of taking a drink, and had
prohibited you from doing it, forbade you to do it? —
A. He merely told me not to do it in such an
ostentatious manner. Mr. Bender told me that Mr.
Gsell did not like to see me go out in the forenoon and
afternoon; I told him that Mr. Gsell himself had told
me on one occasion that if I had to have a drink I could
go out for it and it would be all right; this was in the
presence of Mr. Landvatter.
Q. Then, am I to understand that when you went
out to take a drink it was because you must have one?
— he had at the mess and he did not deny it. He said that
A. Yes, of course.
Q. Is it not a fact that Mr. Bender had
conversations with you, at least once in the month of
March, regarding this matter? —
A. I don't remember it.
Q. Were not you frequently spoken to about it? —
A. No, sir.
CARLOS GSELL: The first reason that led to his
dismissal was because several months, through April
and May, he had the habit of going out in the morning
and afternoon for having a drink; not one but many
drinks, because he was out sometimes an hour and an
hour and a half; and as I have a factory with 400
working people I have to see that certain discipline is
maintained in the factory. I gave instructions to the
manager. Mr. Bender, to see that this habit would be
dropped, but he (the plaintiff) would not do so. Now
what made me pleased to dismiss him was because on
a certain night at the mess where he ate with other
employees of my house, he provoked one of my
employees, a new arrival, and said that all the control I
had in the factory was one of mistrust; he said I was
suspicious; that I measured the cloth in my office for
the umbrellas and that he would not support such
treatment from my side; at the same time he said to
this newly arrived employee that the salary that he,
the new man, got under the contract was not sufficient
to live on and that he should not continue to work for
me. I asked the plaintiff about the conversation which
he did not mean it to be so bad. The factory was
prejudiced on account of the plaintiff absenting
himself, because sometimes I wanted to speak to him,
tell him something, and he was not there. I had to wait
for him, and then when he came back it was noon
perhaps, and it could not be done. I gave instructions to
Mr. Bender, the manager, to stop the plaintiff's going
out without permission. I did not exactly authorized
the plaintiff to go out to drink. I always wanted to stop
this. The plaintiff was the older of those who have gone
out to drink. The plaintiff held a responsible position.
In the first place it was his duty to make repairs to the
machinery in all the departments; later he was
entrusted with the various departments — not at the
same time; once he had the bleaching department; once
he had to help out in the umbrella factory; and then he
was in charge of the hat factory. The plaintiff had other
employees under him.
CARL BENDER: I came to the Philippine Islands in
the middle of March as the defendant's manager. I saw
that the plaintiff was frequently out of the factory. I
told him that we was not allowed to leave the factory
without my permission. HE kept up the habit of going
out in the morning and afternoon for an hour or more
and I told him the second time. He told me that he had
permission from the former manager to go out and take
a drink. I again told him he must not go out without
my permission. Notwithstanding these orders, he was
out one whole Saturday afternoon and I reported him
to the defendant. The plaintiff went out without
permission some thirty-five times after I ordered him
not to do so. I had the other employees search for him,
but they could not find him. He would go out four or
five times a week.
HERMAN INHELDER: I was present at the mess in
June when that conversation took place. We were
discussing several things, including the business and
the way the umbrella factory was run. The plaintiff
spoke in a manner that indicated that Mr. Gsell did not
trust Mr. Specht. I did not want to have this kind of a
conversation going on there and I told the plaintiff he
had better leave the house.
Q. Did the plaintiff say anything with respect to the
amount of salary, which Mr. Specht was receiving? —
If so, what? —
A. I won't pretend that Mr. Ferrazzini said it that
night, about the salary, but he said it on several
occasions before, and — well — what he did say was
that Mr. Specht ought not to work so much for such a
small salary.
ALBERTO FERRAZZINI: I was present when the
conversation took place in the mess one evening of
June last. A discussion arose about Mr. Gsell
exercising control over the merchandise or goods. Then
the plaintiff said that this seemed to show that Gsell
had no confidence in Mr. Specht. Mr. Specht was in
charge of the umbrella department. The conversation
was then carried on in German and I could not
understand what they said.
HANS SPECHT: I am foreman of the umbrella factor
of the defendant. During the conversation at the mass
the plaintiff told me that the defendant had no
confidence in me. I protested and then the plaintiff
tried to prove it by stating that the defendant was
investigating things in the umbrella factory, verifying
the goods for the umbrellas. The plaintiff said nothing
about my salary at that time, but on a previous
occasion he told me that I was foolish at my age to
 work for such a small salary. I reported the matter to
the defendant.
The plaintiff admits that he stated to those present at the
mess that if the defendant measured the cloth for the
umbrellas, "It is my idea that he has no confidence in his
employees." Mr. Specht, the foreman f the umbrella factory,
says that "During the conversation at the mess, the plaintiff
told me that the defendant had no confidence in me." The
plaintiff testified that he did not remember telling Specht that
he (Specht) was not receiving sufficient salary, while Inhelder
testified positively that the plaintiff stated on several
occasions that Specht ought not to work so much for such a
small salary, and Specht also testified positively that "he (the
plaintiff) told me that I was foolish at my age to work for such
a small salary." As to the plaintiff's absenting himself during
working hours for the purpose of drinking, we have, on the one
hand, the plaintiff's testimony to the effect that as long as he
had been with the firm of Gsell he had been "allowed in the
morning ten or fifteen minutes during the hot season to absent
himself to have a drink of beer or whiskey, and the same in
the afternoon," and that "the manager merely told me not to
do it in such an ostentatious manner." While, on the other
hand, we have the testimony of the defendant wherein he
states that he instructed his manager, Mr. Bender, to direct
the plaintiff to discontinue his habit of drinking during
working hours, and the testimony of the manager (Bender) to
the effect that he expressly directed the plaintiff not to go out
without permission. But the plaintiff violated his express
order some thirty-five times, keeping up the habit of going out
(for the purpose of drinking) in the morning and afternoon for
an hour or more at a time. All of the foregoing show a course of
conduct on the part of the plaintiff inconsistent with the due
and faithful performance of his duties as an employee of the
defendant. He sought to create a feeling of unrest among the
employees by inducing them to believe that the defendant had
no confidence in them and that at least one employee was not
receiving sufficiently salary. If it were true that the defendant
was measuring the cloth for the umbrellas, he had a right to
do so and this fact would not justify the plaintiff in saying that
the defendant had no confidence in the employees. Likewise, if
it be true that the defendant or his manager did at first
authorize the plaintiff to absent himself during working hours
for the purpose of drinking, the defendant had a perfect right
to withdraw this permission at anytime he saw fit to do so. In
fact, the defendant, through his manager, expressly directed
the plaintiff to cease leaving the factory for that purpose, but
the plaintiff violated this order numerous times. The plaintiff,
being at times foreman and at other times in charge of
important departments of the factory wherein some four
hundred employees were at work, it cannot be questioned but
that the defendant not only had a right to prohibit drinking
during working hours, but it was his duty to do so for his own
interests and the safety of his other employees. But it is
intimated in the record that the defendant discharged the
plaintiff on account of the conversation at the mess. If it be
true that the defendant gave this as his sole reason for so
acting at the time he discharged the plaintiff, yet he would not
be prevented from setting up at the trial the fact that the
plaintiff continued to disobey his orders with reference to
absenting himself for the purpose of drinking. The defendant
was, at the time he discharged the plaintiff, authorized to take
into consideration the latter's whole course of conduct in
determining whether the contract of employment should be
terminated. We are, therefore, convinced that real errors was
committed by the trial court in its findings of fact and that the
record fully justifies a reversal of such findings, and a
declaration to the effect that the defendant was justified in
terminating the contract of employment.
2. At the opening of the trial in the court below and before any
testimony had been taken, counsel for the defendant stated:
 I desire to amend my answer at this time by the
addition of the following paragraph:
The defendant further alleges for a second and further
defense to the complaint herein, and for a counterclaim
thereto, that the plaintiff has engaged in business in
the Philippine Islands since leaving the service of the
defendant and without the defendant's request or
consent, in violation of his contract with the defendant;
wherefore, the defendant demands judgment against
the plaintiff for the sum of ten thousand pesos.
By the COURT: If the plaintiff does not claim
any time to answer the new pleadings, the court
will grant the amendment as asked for.
By Mr. SOTELO: I note my exception to the
admission of a counterclaim at this time; I have
no time to prepare myself to meet it.
By the COURT: The court has stated that if
counsel for the plaintiff requires time to answer
or meet this counterclaim he will be granted
time to do so.
By Mr. SOTELO: The attorney for the plaintiff
answers to the court that much time has been
lost already since the filing of the complaint
and the trial, and he wants to go to trial in
order that the plaintiff may get what he is
justly entitled to.
Testimony in support of the counterclaim was duly introduced
before the close of the trial. In the final decision the court said:
The court is of the opinion that the defendant's so-
called amendment to his answer, dictated by counsel to
the official stenographer, and not `upon motion filed in
court, and after notice to the adverse party and an
opportunity to be heard,' must be disregarded in the
consideration of this case.
This is manifest error. The verbal petition was expressly
granted and the proferred amendment accepted by the court.
Plaintiff's counsel noted his exception to this ruling and
signified his willingness to proceed with the trial. All
thereafter considered the answer as thus amended. We must,
therefore, dispose of the defendant's counterclaim upon the
merits.
That portion of the contract upon which the defendant's
counterclaimed is based reads as follows:
That during the term of this contract, and for the
period of five years after the termination of the
employment of the said party of the second part,
whether this contract continue in force for the period of
one, two, three or more years, or be sooner terminated,
the said party of the second party shall not engage or
interest himself in any business enterprises similar to
or in competition with those conducted, maintained or
operated by the said party of the first day in the
Philippines, and shall not assist, aid or encourage any
such enterprise by the furnishing of information,
advice or suggestions of any kind, and shall not enter
into the employ of any enterprises in the Philippine
Islands, whatever, save and except after obtaining
special written permission therefor from the said party
of the first part. It is further stipulated and agreed that
the said party of the second part is hereby obligated
and bound to pay unto the party of the first part the
 sum of ten thousand pesos, Philippine currency
(P10,000) as liquidated damages for each and every
breach of the present clause of this contract, whether
such breach occurred during the employment of the
said party of the second part or at any time during the
period of five years from and after the termination of
said employment, and without regard to the cause of
the termination of said employment.
The plaintiff admits that he entered the employment of Mr.
Whalen in the Philippine Islands as a foreman on some
construction work for a cement factory within a few days after
his discharge and without the consent, either written or
verbal, of the defendant. This work was entirely different and
disassociated from that engaged in by the defendant Gsell, yet
this act of the plaintiff was a technical violation of the above-
quoted provisions of the contract wherein he expressly agreed
and obligated himself "not to enter into the employment of any
enterprise in the Philippine Islands, whatever, save and
except after obtaining special written permission therefor"
from the defendant. The question now arises whether these
provisions of the contract are valid and binding upon the
plaintiff.
Counsel for the defendant in their printed brief say:
There is no doubt as to the validity of the
contract, Gsell vs. Koch (16 Phil. Rep., 1) has settled
that question in a similar contract and that decision
has never been criticised, but is cited as recently as
1914 with approved. (Lambert vs. Fox, 26 Phil. Rep.,
588).
An examination of these cases, as well as others in point, is
necessary in order to determine whether or not the question
has been settled, and if we find that it is still an open one in
this jurisdiction, we must proceed with the case. In pursuing
this inquiry it is well to bear in mind (1) that the case under
consideration has been tried in both courts exclusively upon
the theory that the local law alone is applicable to the contract
and (2) that the business in which the plaintiff became
engaged was entirely different and distinct from that
conducted, maintained or operated by the defendant.
In Gsell vs. Koch, supra, a demurrer was sustained upon the
ground that the allegations in the complaint did not constitute
a cause of action, and after defendant declined to amend,
judgment was entered dismissing the action. On appeal this
order was reversed and the record returned with instructions
to direct the defendant to answer. The paragraph in the
written contract, upon which the judgment of this court rests,
reads:
Third. The said Pedro Koch binds himself to pay in
cash to Mr. Gsell the sum of ten thousand pesos if,
after leaving the firm of C. Gsell, and against the
latter's will, he shall engage directly or indirectly in
carrying on any business in which the said Carlos Gsell
is at present engaged, or within the two and one-half
years fixed for the duration of the present contract in
these Islands, either as an employee or member of a
firm or company, or on his own account; and he
furthermore binds himself to pay in cash to Mr. Gsell
an equal sum of ten thousand pesos for each violation
of any secret of the business entrusted him.
The plaintiff in that case was engaged solely and exclusively in
the manufacture of umbrellas, matches, and hats. The secret
process for making straw hats had cost the plaintiff some
P20,000 and the defendant Koch, after having entered the hat
factory under a contract of employment and after having
learned the secret process employed by the plaintiff, left the
plaintiff's service and engaged in the manufacture of straw
hats in violation of the above-quoted provisions of the contract,
using the trade secrets which he had thus learned. The
provisions in the contract against the engaging in the
manufacturing of straw hats in the Philippine Islands were
held to be reasonably necessary for the protection of the
plaintiff and not oppressive in so far as the defendant was
concerned. In the case under consideration the contract goes
far beyond that which formed the basis of the action in the
case just cited. Here the plaintiff Ferrazzini was prohibited
from engaging in any business or occupation whatever in the
Philippine Islands for a period of five years after the
termination of this contract of employment without special
written permission from the defendant. This plaintiff became
engaged, as we have said, as a foreman in a cement factory,
while the defendant in the other case became engaged in
identically the same business which his employer was carrying
on, that is, the manufacture of straw hats. Consequently, the
reasons which support the validity of the contract in the one
case are not applicable to the other. The same is true of the
case of Fornow vs. Hoffmeister (6 Phil. Rep., 33), wherein the
decision rests solely upon the question whether the contract
was in violation of the contract labor laws. No other question
was submitted or decided in that case. Therefore, whether the
clause under consideration is valid and enforcible is still an
open question.
Articles 1091 and 1255 of the Civil Code read:
ART. 1091. Obligations arising from contracts have
legal force between the contracting parties, and must
be fulfilled in accordance with their stipulations."
ART. 1255. The contracting parties may make the
agreement and establish the clauses and conditions
which they may deem advisable, provided they are not
in contravention of law, morals, or public order.
Hence, the policy of the law requires that the freedom of
persons to enter into contracts shall not be lightly interfered
with, but if a contract be not founded upon a legal
consideration (causa) or if it conflicts with the morals of the
times or contravenes some established interest of society, the
courts will not aid in its enforcement.
Passing over the question whether "consideration" of the
American law and the "causa" of the civil law are equivalent
and whether there was adequate or legal consideration or
"causa" on which the contract was founded, we will limit our
further inquiry to the determination of the question whether
that part of the contract under consideration is against public
policy (orden publico).
Manresa, Vol. 8 p. 606, says:
Public policy (orden publico) — which does not here
signify the material keeping of public order —
represents in the law of persons the public, social and
legal interest, that which is permanent and essential of
the institutions, that which, even if favoring an
individual in whom the right lies, cannot be left to his
own will. It is an idea which, in cases of the waiver of
any right, is manifested with clearness and force. Thus
the jurisprudence on the subject of mortgages contains
an interesting declarations on this point in a resolution
of January 24, 1898, wherein it was held that: `The
power of the husband to give marital permission
cannot be validly conferred upon any attorney-in-fact,
as the legislator has willed that, for reasons of the
interest of society and of family government and
discipline it should be vested only in the husband,
 being personal to him in the highest sense and
therefore not capable of being transmitted.'
Mucius Scaevola's (vol. 20, p., 505) conclusion is that:
Agreements in violation of orden publico must be
considered as those which conflict with law, whether
properly, strictly and wholly a public law (derecho) or
whether a law of the person, but law which in certain
respects affects the interest of society.
Articles 1893 and 1895 of Merrick's Revised Civil Code of
Louisiana, a civil law state, read:
ART. 1893. An obligation without a cause, or with a
false or unlawful cause, can have no effect.
ART. 1895. Illegal or immoral cause. — The cause is
unlawful, when it is forbidden by law, when it is contra
bonos mores or to public order.
In Fabacher vs. Bryant & Mather (46 La. Ann., 820), the
plaintiff and one Thomas Egan were engaged in the business
of hauling cotton for the presses in the city of New Orleans.
Both of these men were members of the Draymen's Association
which had adopted a tariff of charges and undertook to
distribute among the members the hauling of the various
presses. The owners of the press were not consulted either as
to the prices to be paid or as to those who should do the
hauling. They could not obtain draymen outside of the union.
They had to engage those designated by the union. The
defendants employed Egan on the latter's representation that
he had been so designated. Later the defendants employed the
plaintiff upon the same representations. Finally, after
investigation, the defendants declined to permit the plaintiff to
do the work and carried out their contract with Egan. The
plaintiff thereupon instituted this action for damages based
upon the breach of his contract by the defendants. On the
setting aside of a verdict in favor of the plaintiff by the trial
court and an appeal having been duly entered, the Supreme
Court affirmed the judgment, directing the dismissal of the
case, holding that the plaintiff's contract was plainly
repugnant to public policy, citing articles 1893 and
1895 supra. (India Bagging Association vs. Kock, 14 La. ann.,
168; Gravier vs. Carraby, 17 La., 118, 142, and cases collected
in 20 Hennen's Digest, p. 1007, No. 1.)
In India Bagging Association vs. Kock, supra, an association of
eight commercial firms in New Orleans, holders of 7,410 bales
of India cotton bagging, was formed, the members binding
themselves for the term of three months not to sell any
bagging, nor offer to sell any, except with the consent of the
majority of them expressed at a meeting; under the penalty of
ten dollars for every bale sold or offered for sale. This action
was brought against one of the members by the manager of the
association for the recovery of a penalty of $7,400 for having
sold 740 bales of bagging in contravention of the articles of the
association. From a judgment in favor of the association the
defendant member appealed and the Supreme Court reversed
the judgment saying:
The agreement between the parties was palpably and
unequivocably a combination in restraint of trade, and
to enhance the price in the market of an article of
primary necessity to cotton planters. Such combination
are contrary to public order, and cannot be enforced in
a court of justice.
By "public policy," as defined by the courts in the United
States and England, is intended that principle of the law
which holds that no subject or citizen can lawfully do that
which has a tendency to be injurious to the public or against
the public good, which may be termed the "policy of the law,"
or "public policy in relation to the administration of the law."
(Words & Phrases Judicially Defined, vol. 6, p. 5813, and cases
cited.) Public policy is the principle under which freedom of
contract or private dealing is restricted by law for the good of
the public. (Id., Id.) In determining whether a contract is
contrary to public policy the nature of the subject matter
determines the source from which such question is to be
solved. (Hartford Fire Ins. Co. vs. Chicago, M. & St. P. Ry. Co.,
62 Fed. 904, 906.)
The foregoing is sufficient to show that there is no difference
in principle between the public policy (orden publico) in the
two jurisdictions (the United States and the Philippine
Islands) as determined by the Constitution, laws, and judicial
decisions.
In the United States it is well settled that contracts in undue
or unreasonable restraint of trade are unenforcible because
they are repugnant to the established public policy in that
country. Such contracts are illegal in the sense that the law
will not enforce them. The Supreme Court of the United
States, in Oregon Steam Navigation Co. vs. Winsor (20 Wall.,
64), quoted with approval in Gibbs vs. Consolidated Gas Co. of
Baltimore (130 U. S., 396), said:
Cases must be judged according to their circumstances,
and can only be rightly judged when the reason and
grounds of the rule as carefully considered. There are
two principal grounds on which the doctrine is founded
that a contract in restraint of trade is void as against
public policy. One is, the injury to the public by being
deprived of the restricted party's industry; and the
other is, the injury to the party himself by being
precluded from pursuing his occupation, and thus
being prevented from supporting himself and his
family.
And in Gibbs vs. Consolidated Gas Co. of Baltimore, supra, the
court stated the rule thus:
Pubic welfare is first considered, and if it be not
involved, and the restraint upon one party is not
greater than protection to the other party requires,
that contract may be sustained. The question is,
whether, under the particular circumstances of the
case and the nature of the particular contract involved
in it, the contract is, or is not, unreasonable.
Chapter 5, title 13, book 2, of our Penal Code makes it a crime
for a person to solicit any gift or promise as a consideration for
agreeing to refrain from taking part in any public, auction, or
attempting to cause bidders to stay away from such auction by
means of threats, gifts, promises or any other artifice, with
intent to affect the price of the thing auctioned (Art. 542), or to
combine for the purpose of lowering or raising wages to an
abusive extent, or to regulate the conditions of labor (Art. 543),
or by spreading false rumors, or by making use of any other
artifice, succeeds in altering the prices which would naturally
be obtained in free competition for merchandise, stocks, public
and private securities, or any other thing which may be the
object of trade and commerce (Art. 544). And Act No. 98, as
amended, of the Philippine Commission likewise makes it a
crime for any person or corporation, engaged as a common
carrier, to subject any particular person, firm, company,
corporation, or locality, or any particular kind of traffic to any
undue or unreasonable prejudice or discrimination. To this
extent the Legislature has expressly covered the subject and
left to the courts to determine in each case whether any other
particular agreement or contract is contrary to public policy.
It needs no argument to show that an agreement or contract The contract under consideration, tested by the law, rules and
entered into for the purpose of accomplishing any of the principles above set forth, is clearly one in undue or
prohibited acts mentioned in the above cited provisions of the unreasonable restraint of trade and therefore against public
Penal Code or in Act No. 98 would be unenforcible as being in policy. It is limited as to time and space but not as to trade. It
violation of positive law. Those falling within the provisions of is not necessary for the protection of the defendant, as this is
articles 542 and 544 of the Penal Code and Act No. 98 would provided for in another part of the clause. It would force the
clearly be agreements or contracts in undue or unreasonable plaintiff to leave the Philippine Islands in order to obtain a
restraint of trade. The meaning given to the word "trade" livelihood in case the defendant declined to give him the
would determine the question whether those coming within written permission to work elsewhere in this country.
the provisions of article 543 would or would not be the same. If
the commercial meaning of the word should govern, and in The foregoing are our reasons upon which the short decision
this sense t has reference to the business of selling or and order for judgment, heretofore filed,1 were based.
exchanging some tangible substance or commodity for money,
or the business of dealing by way of sale in commodities, it
would appear that such would not be contract in restraint of
trade. This may be the most common significance of the word
"trade." but it is not the only one, nor the most comprehensive
meaning in which the word is properly used. In the broader
sense, it is any occupation or business carried on for
subsistence or profit. Anderson's Dictionary of Law gives the
following definition: "Generally equivalent to occupation,
employment, or business, whether manual or mercantile; any
occupation, employment or business carried on for profit, gain,
or livelihood, not in the liberal arts or in the learned
professions." In Abbott's Law Dictionary the word is defined as
"an occupation, employment or business carried on for gain or
profit." Among the definitions given in the Encyclopaedic
Dictionary is the following: "The business which a person has
learnt, and which he carries on for subsistence or profit;
occupation; particularly employment, whether manual or
mercantile, as distinguished from the liberal arts or the
learned professions and agriculture." Bouvier limits the
meaning to commerce and traffic and the handicraft of
mechanics. (In re Pinkney, 47 Kan., 89.) We are inclined to
adopt and apply the broader meaning given by the
lexicographers.
G.R. No. L-19628 December 4, 1922
LICHAUCO & COMPANY, INC., petitioner,
vs.
SILVERIO APOSTOL, as Director of Agriculture, and
RAFAEL CORPUS, as Secretary of Agriculture and
Natural Resources, respondents.
Gibbs, McDonough and Johnson for petitioner.
Attorney-General Villa-Real for respondents.
STREET, J.:
This is an original petition for the writs of mandamus and
injunction, filed in this court by Lichauco & Company against
the respondents, Silverio Apostol, as Director of Agriculture,
and Rafael Corpus, as Secretary of Agriculture and Natural
Resources. An order having been issued by this court requiring
the respondents to appear and show cause why the relief
prayed for should not be granted, the Attorney-General
presented a return, in the nature of a demurrer, in their
behalf; and the cause is now before us for the determination of
the questions thus presented.
It is alleged in the complaint that the petitioner is a
corporation duly organized under the laws of the Philippine
Islands and that it has been engaged for several years in the
business of importing carabao and other draft animals into the
Philippine Islands and that it is now desirous of importing
from Pnom-Pehn, in French Indo-China, a shipment of draft
cattle and bovine cattle for the manufacture of serum but that
the respondent Director of Agriculture refuses to admit said
cattle, except upon the condition, stated in Administrative
Order No. 21 of the Bureau of Agriculture, that said cattle
shall have been immunized from rinderpest before
embarcation at Pnom-Pehn. The petitioner therefore asks for
an order requiring the respondents to admit the contemplated
importation of cattle into the Islands and enjoining them from
the enforcement of said administrative order in the future.
The petitioner asserts that under the first proviso to section
1762 of the Administrative Code, as amended by Act No. 3052
of the Philippine Legislature, it has "an absolute and
unrestricted right to import carabao and other draft animals
and bovine cattle for the manufacture of serum from Pnom-
Pehn, Indo-China, into the Philippine Islands" and that the
respondents have no authority to impose upon the petitioner
the restriction referred to above, requiring the immunization
of the cattle before shipment.
The respondents, on the other hand, rely upon section 1770 of
the Administrative Code and upon Administrative Order No.
21 of the Bureau of Agriculture, promulgated on July 29, 1922,
by the Director of Agriculture, in relation with Department
Order No. 6, promulgated on July 28, 1922, by the Secretary of
Agriculture and Natural Resources, as supplying authority for
the action taken.
Such portions of the laws above-mentioned as are material to
the present controversy will be set out in full, preceded by
section 1762 of the Administrative Code, as originally enacted,
to which will be appended the pertinent parts of the orders
referred to and the communication of the Director of
Agriculture of August 31, 1922.
1. First paragraph of section 1762 of Administrative
Code in original form:
 SEC. 1762. Bringing of diseased animal into
Islands forbidden. — Except upon permission of
the Director of Agriculture, with the approval of
the head of Department first had, it shall be
unlawful for any person knowingly to ship or
otherwise bring into the Philippine Islands any
animal suffering from, infected with, or dead of
any dangerous communicable disease, or any
effects pertaining to such animal which are
liable to introduce such disease into the
Philippine Islands.
2. First paragraph of section 1762 of Administrative
Code, as amended by Act No. 3052 of the Philippine
Legislature:
SEC. 1762. Bringing of animals imported from
foreign countries into the Philippine Islands. —
It shall be unlawful for any person or
corporation to import, bring or introduce live
cattle into the Philippine Islands from any
foreign country. The Director of Agriculture
may, with the approval of the head of the
department first had, authorize the
importation, bringing or introduction of various
classes of thoroughbred cattle from foreign
countries for breeding the same to the native
cattle of these Islands, and such as may be
necessary for the improvement of the breed, not
to exceed five hundred head per
annum: Provided, however, That the Director of
Agriculture shall in all cases permit the
importation, bringing or introduction of draft
cattle and bovine cattle for the manufacture of
serum: Provided, further, That all live cattle
from foreign countries the importation, bringing
or introduction of which into the Islands is
authorized by this Act, shall be submitted to
regulations issued by the Director of
Agriculture, with the approval of the head of
the department, prior to authorizing its
transfer to other provinces.
3. Section 1770 of Administrative Code:
SEC. 1770. Prohibition against bringing of
animals from infected foreign countries. —
When the Department Head shall by general
order declare that a dangerous communicable
animal disease prevails in any foreign country,
port, or place and that there is danger of
spreading such disease by the importation of
domestic animals therefrom, it shall be
unlawful for any person knowingly to ship or
bring into the Philippine Islands any such
animal, animal effects, parts, or products from
such place, unless the importation thereof shall
be authorized under the regulation of the
Bureau of Agriculture.
4. Department Order No. 6, promulgated on July 28,
1922, by Secretary of Agriculture and Natural
Resources:
DEPARTMENT ORDER }
}Series of 1922.
NO. 6. }
Owing to the fact that a dangerous
communicable disease known as rinderpest
exist in Hongkong, French Indo-China and
British India, it is hereby declared, in
 accordance with the provisions of section 1770
of Act No. 2711 (Administrative Code of the
Philippine Islands of 1917), that rinderpest
prevails in said countries, and as there is
danger of spreading such disease by the
importation of cattle, carabaos, and pigs
therefrom, it shall be unlawful for any person
knowingly to ship or bring into the Philippine
Islands any such animal, animal effects, parts,
or products from Hongkong, French Indo-China
and British India, unless the importation
thereof shall be authorized under the
regulations of the Bureau of Agriculture.
The provisions of this order shall take effect on
and after August 1, 1922.
5. Administrative Order No. 21, of the Bureau of
Agriculture, promulgated July 29, 1922, by the Director
of Agriculture:
ADMINISTRATIVE ORDER }
}
NO. 21 } 1. Animals must be immunized by the
Re importation of cattle, carabaos, and pigs
from French Indo-China, Hongkong and India.
1. Pursuant to the provisions of Department
Order No. 6, series of 1922, of the Department
of Agriculture and Natural Resources, the
present regulations of the Bureau of
Agriculture governing the importation of
livestock from French Indo-China and
Hongkong are hereby amended to the effect
that the importation of livestock of the species
named in the aforementioned Department
Order is hereby prohibited from French Indo-
China, Hongkong and India. However, animals
immunized against rinderpest, for which the
importer before placing his order shall have
obtained from the Director of Agriculture a
written permit to import them from the above
named countries, may be allowed entrance into
the Philippine Islands.
2. This order shall take effect on and after
August 1, 1922.
6. Communication of August 31, 1922, from the Acting
Director of Agriculture to Faustino Lichauco (in part):
SIR: In reply to your application for permission
to import from 300 to 400 carabaos immunized
against rinderpest from Pnom-Pehn, French
Indo-China, I have the honor to inform you that
the permission is hereby granted, under the
following conditions:
simultaneous method before shipment. At least
10 c.c. of good virulent blood must be injected at
the first injection simultaneously with the
serum. Ten days after the simultaneous
inoculation all non-reactors must receive
another injection of not less than 10 c.c. of
virulent blood (alone).
2. The immunization must be done by a
veterinarian designated by the French
Government for the purpose, who must issue a
certificate stating the fact that the animal has
 been immunized according to the requirements
in number 1 and it must not be embarked until
ten days after the second injection of virulent
blood.
xxx xxx xxx
Very respectfully,
SILVERIO APOSTOL,
Acting Director of Agriculture.
Upon glancing over the matter above collated, it will be seen
at once that section 1770 of the Administrative Code on its
face authorizes the action taken by the Secretary of
Agriculture and Natural Resources in closing our ports (in the
manner and to the extent indicated in Department Order No.
6) to the importation of cattle and carabao from French Indo-
China, supposing of course, as everybody knows and as the
petitioner does not deny, that the disease of rinderpest exists
in that country.
It is claimed, however, that section 1762 of the Administrative
Code, so far as it authorizes restriction upon the importation
of draft cattle and bovine cattle for the manufacture of serum,
has been impliedly repealed by the amendatory Act No. 3052,
which is of later enactment that the Administrative Code; and
in this connection reliance is chiefly placed on the first proviso
to section 1762, as amended by said Act No. 3052, which is in
these words: "Provided, however, That the Director of
Agriculture shall in all cases permit the importation, bringing
or introduction of draft cattle and bovine cattle for the
manufacture of serum." This then is the first and principal
question in the case, namely, whether section 1770 has been
repealed by implication, in so far as it relates to draft animals
and bovine cattle for the manufacture of serum. We say
repealed by implication, for it will be noted that that Act No.
3052 has no repealing clause, and it contains only one
section, i. e., that amending section 1762 of the Administrative
Code.
We are of the opinion that the contention of the petitioner is
untenable, for the reason that section 1762, as amended, is
obviously of a general nature, while section 1770 deals with a
particular contingency not made the subject of legislation in
section 1762. Section 1770 is therefore not to be considered as
inconsistent with section 1762, as amended; on the other hand,
it must be treated as a special qualification of section 1762. Of
course the two provisions are different, in the sense that if
section 1762, as amended, is considered alone, the cattle which
the petitioner wishes to bring in can be imported without
restriction, while if section 1770 is still in force the cattle,
under the conditions stated in the petition, can be brought in
only upon compliance with the requirements of Administrative
Order No. 21. But this difference between the practical effect
of the two provisions does not make then inconsistent in the
sense that the earlier provision (sec. 1770) should be deemed
repealed by the amendatory Act (3052).
That section 1770 is special, in the sense of dealing with a
special contingency not dealt with in section 1762, is readily
apparent upon comparing the two provisions. Thus, we find
that while section 1762 relates generally to the subject of the
bringing of animals into the Island at any time and from any
place, section 1770 confers on the Department Head a special
power to deal with the situation which arises when a
dangerous communicable disease prevails in some defined
foreign country, and the provision is intended to operate only
so long as that situation continues. Section 1770 is the
backbone of the power to enforce animal quarantine in these
Islands in the special emergency therein contemplated; and if
that section should be obliterated, the administrative
authorities here would be powerless to protect the agricultural
industry of the Islands from the spread of animal infection
originating abroad.
We note that the argument for unrestricted importation
extends only to the importation of cattle for draft purposes and
bovine cattle for the manufacture of serum, leaving section
1770 theoretically in full effect as regards the importation of
cattle for other purposes, as where they are imported for
slaughter; but the importation of cattle for draft purposes is
the principal thing, and unless that can be regulated under
the conditions and to the extent attempted by the respondents
in this case, the power given in section 1770 is obviously
worthless.
In our opinion section 1762, as amended, and section 1770
must be construed in pari materia as harmonious parts of the
law dealing with animal quarantine; and section 1762, as
amended, can be given effect only in so far as it is not
restricted by section 1770. Here, as always, the general must
yield to the particular.
If the Congress of the United States should this day repeal the
Chinese Exclusion Law so far as it affects these Islands, and
should declare that all persons of Chinese nationality shall be
at liberty to enter the Philippine Islands without restriction,
would anybody suppose that such enactment would have the
effect of abolishing the power to maintain quarantine against
any Chinese port where cholera or bubonic plaque might
hereafter be raging in epidemic form? Yet the question now
before us is not fundamentally different from the one thus
supposed.
The judicial precedents are conclusive to the effect that no
implied repeal of a special provisions of the character of the
one now under consideration will result from the enactment of
broader provision of a general nature. In other words, a
general statute without negative words does not repeal a
previous statute which is particular, even though the
provisions of one be different from the other.
(Rymer vs. Luzerne County, 12 L. R. A., 192; Petri vs. F. E.
Creelman Lumber Co., 199 U. S., 487; 50 L. ed., 281.)
Wherever there is a particular enactment and a general
enactment in the same statute, and the latter, taken in its
most comprehensive sense, would overrule the former, the
particular enactment must be operative, and the general
enactment must be taken to affect only the other parts of the
statute to which it may properly apply. (Sir John Romilly,
Master of the Rolls, in Pretty vs. Solly, 26 Beav., 606, 610.)
The additional words of qualification needed to harmonize a
general and a prior special provision in the same statute
should be added to the general provision, rather than to the
special one. (Rodgers vs. United States, 185 U. S., 82; 46 L. ed.,
816.)
Specific legislation upon a particular subject is not affected by
a general law upon the same subject unless it clearly appears
that the provision of the two laws are so repugnant that the
legislature must have intended by the later to modify or repeal
the earlier legislation. The special act and the general law
must stand together, the one as the law of the particular
subject and the other as the general law of the land. (Ex
Parte United States, 226 U. S., 420; 57 L. ed., 281; Ex
Parte Crow Dog, 109 U. S., 556; 27 L. ed., 1030; Partee vs. St.
Louis & S. F. R. Co., 204 Fed. Rep., 970.)
Where there are two acts or provisions, one of which is special
and particular, and certainly includes the matter in question,
and the other general, which, if standing alone, would include
the same matter and thus conflict with the special act or
provision, the special must be taken as intended to constitute
an exception to the general act or provision, especially when
such general and special acts or provisions are
contemporaneous, as the Legislature is not to be presumed to
have intended a conflict. (Crane vs. Reeder and Reeder, 22
Mich., 322, 334; University of Utah vs. Richards, 77 Am. St.
Rep., 928.)
It is well settled that repeals by implication are not to be
favored. And where two statutes cover, in whole or in part, the
same matter, and are not absolutely irreconcilable, the duty of
the court — no purpose to repeal being clearly expressed or
indicated — is, if possible, to give effect to both. In other
words, it must not be supposed that the Legislature intended
by a latter statute to repeal a prior one on the same subject,
unless the last statute is so broad in its terms and so clear and
explicit in its words as to show that it was intended to cover
the whole subject, and therefore to displace the prior statute.
(Frost vs. Wenie, 157 U. S., 46; 39 L. ed., 614, 619.)
As stated in the pages of the two most authoritative legal
encyclopedias, the rule is that a prior legislative act will not be
impliedly repealed by a later act unless there is a plain,
unavoidable and irreconcilable repugnancy between the two. If
both acts can by any reasonable construction stand together,
both will be sustained. (36 Cyc., 1074- 1076; 26 Am. & Eng.
Encyc. Law, 2d ed., 725-726.)
A masterly analysis of the decisions of the United States
Courts pertinent to the matter now in hand will be found in
the monographic article on "Statutes and Statutory
Construction," written by Chas. C. Moore and prefixed as a
General Introduction to Federal Statutes Annotated. The
discussion there given is too lengthy to be here reproduced in
full, but some of the observations of the learned author are so
appropriate to the case before us that we cannot forego the
temptation to include the same in this opinion. Says the
writer: "The various provisions of an act should be read so that
all may, if possible, have their due and conjoint effect without
repugnancy or inconsistency. The sections of a code relative to
any subject must be harmonized and to that end the letter of
any section may sometimes be disregarded. But where
absolute harmony between parts of a statute is demonstrably
non-existent, the court must reject that one which is least in
accord with the general plan of the whole, or if there be no
such ground for choice between inharmonious section, the
later section being the last expression of the legislative mind
must, in construction, vacate the former to the extent of the
repugnancy." (1 Fed. Stat. Ann., 2d ed., 49-50.)
And speaking with reference to the rule by which special
provisions are held to dominate over general provisions in the
same or later laws, the author proceeds: " 'it is an old and
familiar rule,' said Mr. Justice Lamar, 'that where there is in
the same statute a particular enactment, and also a general
one, which in its most comprehensive sense would include
what is embraced in the former, the particular enactment
must be operative, and the general enactment must be taken
to affect only such cases within its general language as are not
within the provisions of the particular enactment.' And the
Justice proceeded to apply that rule in the construction of a
statute upon which there had been much ingenious argument
and a decided conflict of authority in the inferior federal
courts. The stature was an act of Congress of 1876, declaring
nonmailable 'every obscene . . . book, pamphlet, paper, writing,
print, or other publication of an indecent character,' and other
enumerated articles, and making it a misdemeanor to deposit
any of them for mailing. In a prosecution under the act, the
Circuit Court certified to the Supreme Court the following
question: 'Is the knowingly depositing in the mails of an
obscene letter, inclosed in an envelope or wrapper upon which
there is nothing but the name and address of the person to
whom the letter is written, an offense within the act?' On
behalf of the government it was contended that the word
'writing' comprehended such a letter, but the Supreme Court
held otherwise. In the course of his argument in support of the
view of the court, Justice Lamar pointed out that the statute,
after enumeration what articles shall be nonmailable, adds a
separate and distinct clause declaring that 'every letter upon
the envelope of which . . . indecent, lewd, obscene, or lascivious
delineations, epithets, terms, or language may be written or
printed . . . shall not be conveyed in the mails,' and the person
knowingly or willfully depositing the same in the mails 'shall
be deemed guilty of a misdemeanor,' etc. 'This distinctly
additional clause,' continued the Justice, 'specifically
designating and describing the particular class of letters which
shall be nonmailable, clearly limits the inhibitions of the
statute to that class of letters alone whose indecent matter is
exposed on the envelope.' " (1 Fed. Stat. Ann., 2d ed., 50-51;
also at pp. 164-166.)
The cases relating to the subject of repeal by implication all
proceed on the assumption that if the act of latter date clearly
reveals an intention on the part of the lawmaking power to
abrogate the prior law, this intention must be given effect; but
there must always be a sufficient revelation of this intention,
and it has become an unbending rule of statutory construction
that the intention to repeal a former law will not be imputed to
the Legislature when it appears that the two statute, or
provisions, with reference to which the question arises bear to
each other the relation of general to special. It is therefore idle
to speculate whether in the case before us the Philippine
Legislature may or may not have intended to modify or
abrogate section 1770 of the Administrative Code at the time
the amendment to section 1762 was enacted, for if any such
intention was entertained, it was not revealed in a way that
would justify a court in giving this intention effect. We may
add, however, that, in the opinion of the majority of the
Justices participating in this decision, the Legislature in
amending section 1762 could not possibly have entertained a
design to modify section 1770; for, as we have already shown,
the abrogation of that provision, even as regards draft animals
alone, would leave the animal industry of the Islands exposed
to the danger incident to the unrestricted importation of
infected animals from districts where rinderpest prevails. The
unreasonableness of this interpretation of the amendatory law
alone supplies sufficient warrant for rejecting it. The
Legislature could not possibly have intended to destroy the
effectiveness of quarantine as regards imported animals.
Our conclusion then is that section 1770 of the Administrative
Code remains in full force; and the determination of this
question is we think necessarily fatal to the petitioner's case.
It is insisted, however, that even supposing section 1770 of the
Administrative Code to be in force, nevertheless, the
requirement of immunization at the port of embarcation is
unreasonable, inasmuch as the immunization of the cattle at
that port, under the supervision of the Government
veterinarians of French Indo-China, is not unconditionally
accepted as efficacious by the Philippine authorities, as shown
by the fact that the latter further require tests to be made
upon the arrival of the cattle here, consisting of inoculation
with virulent blood of animals suffering from rinderpest —
which involves additional expenses and exposes the importer
to the loss of his entire herd.
Considerations of this nature are we think more proper to be
addressed to the authorities responsible for the regulations
than to this court. About the principal fact that rinderpest
exists in the regions referred to in Department Order No. 6,
there is, and can be no dispute; and when the Department
Head declared that the disease prevails in those regions and
that there is danger of spreading it by the importation of cattle
and carabao into this country, he was acting upon a matter
within his province, and we are not disposed to review the
conclusion.

It has been suggested that the regulative power vested in the

Director of Agriculture under section 1770 of the
Administrative Code with respect to the admission of cattle
into the Philippine Islands attaches only when the importation
has been effected; and that the said Director has no authority
to dictate the measures to be taken by the importer before the
cattle are embarked for transportation to these Islands. This
contention, in our opinion, reflects a mistaken point of view
with reference to the effect of the regulations; and the answer
is to be found in the consideration that the regulation in
question has prospective reference to the condition of the
cattle upon their arrival here. In other words, the prior
immunization of the cattle is made a condition precedent to
the right to bring them in; as much as to say, that only
animals conforming to the required type will be admitted. The
importer is thus left at entire liberty in respect to the taking of
the necessary measures to gain admittance for his cattle in our
ports; and if he fails to do so, the penalty merely is that the
cattle are not admitted.

Upon the whole we are of the opinion that the petition does
not show sufficient ground for granting the writs
of mandamus and injunction. The demurrer interposed thereto
by the respondents in their return to the order to show cause,
dated October 7, 1922, is therefore sustained, and the
temporary restraining order heretofore promulgated in this
cause, dated September 21, 1922, is dissolved; and unless
within five days after notification hereof the petitioner shall so
amend his petition as to show a sufficient cause of action, an
order absolute will be entered, dismissing the same, with
costs. So ordered.
G.R. No. L-11002 January 17, 1916
THE UNITED STATES, plaintiff-appellee,
vs.
MATEO P. PALACIO, defendant-appellant.
Antonio Belmonte for appellant.
Attorney-General Avanceña for appellee.
ARAULLO, J.:
These proceedings for violation of section 87 of Act No. 82, the
Municipal Code, were brought against the defendant, Mateo P.
Palacio, in the Court of First Instance of Leyte by the following
complaint filed therein by the fiscal on December 18, 1914.
The undersigned charges Mateo P. Palacio with having
violated section 87 of Act No. 82, in the following
manner, to wit: Said accused, on or about the 26th day
of September, 1914, in the municipality of Tacloban,
Province of Leyte, P.I., he being then and there a
deputy to the provincial assessor of Leyte, charged
with the duty of assessing real property, did wilfully,
unlawfully, and criminally upon revising the
assessment and in reassessing the property of
Francisco Madlonito, situated in the barrio of Di-it,
municipality of Tacloban, omit from the tax list certain
real properties and improvements belonging to said
Francisco Madlonito, knowing that the properties
omitted were lawfully taxable; in violation of law.
A demurrer having been filed by defendant's counsel on the
ground that the facts alleged in the complaint did not
constituted the crime provided for and punished by said
section 87 of Act No. 82, the same was overruled, and,
defendant having pleaded not guilty, the case came to trial.
Evidence was introduced by both the prosecution and the
defense, and, on January 15, 1915, said Court of First Instance
rendered judgment in which, insisting upon the overruling of
the demurrer interposed to the complaint, and finding of the
demurrer interposed to the complaint, and finding the
defendant guilty of the crime therein charged, he sentenced
him to the penalty of forty days' imprisonment in the
provincial jail, to pay a fine of P100, or, in case of insolvency,
to suffer the corresponding subsidiary imprisonment and to
pay the costs. Defendant has appealed from this judgment and
has assigned thereto various errors which, as stated by the
Attorney-General in his brief, may be reduced to the following:
1. That the lower court erred in holding that the
evidence adduced at trial proves defendant's guilt
beyond all reasonable doubt.
2. That the facts alleged in the complaint and proven at
trial do not constitute the infraction provided for and
punished by section 87 of Act No. 82, known as the
Municipal Code.
The evidence shows beyond all doubt that while defendant was
serving as a deputy to the provincial assessor of Leyte, duly
appointed and such, and having proceeded under orders of
said assessor, given in the month of September, 1914, to verify
the measurement, evaluation, and assessment of the
properties of one Francisco Madlonito, situated in the barrio of
Di-it, municipality of Tacloban of said province, he presented
in performance of his duty a report in which he recorded as
real property belonging to said Francisco Madlonito a
rectangular parcel of unirrigated land which was adjoined on
the north by the land of Anacleto Condes; on the east, by that
of Ventura Viñas; on the south, by that of Jose Guardino; and
on the west, by woods; it measured 3 hectares 51 ares and 23
centiares in area, the only improvements consisting of 500
hemp plants; that several days afterwards, in the following
month of October, the provincial assessor, having been advised
that defendant's report was false, proceeded in company with
another deputy to remeasure and to make a new valuation and
assessment of the same land, under guidance of and in
accordance with date furnished by the same Francisco
Madlonito who had previously conducted and furnished
information to defendant; as a result of this proceeding on the
part of said provincial assessor, it was ascertained that said
land was unirrigated hemp or corn land; that it was polygonal
in form and was adjoined on the north by the property of
Anacleto Condes and Basilio Espejo; on the east, by that of
Nicanor Dolina, Basilio Espejo and Ventura Viñas; on the
south, by the land of Tomas Tabosa and a wood; and by a wood
on the west; it was found to measure 15 hectares 17 ares and
65 centiares in extent, the improvements thereon consisting of
a plantation of hemp, a dwelling house of mixed material, 80
clumps of banana trees, 9 cacao trees, 24 coconut trees 5 years
of age, and one coconut tree in bearing. It was therefore
apparent that in the tax list of real property which, as deputy
to the provincial assessor, defendant was charged to prepare
— that is, the report presented by him — he had omitted real
property belonging to Francisco Madlonito, which property
consisted of 12 hectares 66 ares and 42 centares of land and all
the improvements mentioned, with the exception of the 500
hemp plants specified in this report.
Defendant endeavored in a way to explain this omission by
attributing it to the fact that in making his report he relied
upon the information furnished by Francisco Madlonito
himself, and, with respect to the area, on that given him at the
time by the two laborers who measured the land and who
assured him that said measurement was correct, because it
was the same as that which has been pointed out to them by
the owner of the land. Defendant further explained that he
also accepted the informations furnished by said laborers with
respect to the improvements specified in said report as
consisting of a plantation of hemp; that these men had told
him that there were no other improvements except the hemp
plantation and some banana trees of which he did not know
how many there were; with respect to the house, Francisco
Madlonito told him that it belonged to Emiliano, Francisco's
brother; that this latter was absent at the time and therefore
defendant did not measure the property, deciding to postpone
doing so until the 15th of January of the following year, when
he intended to return.
These explanations of the defendant are not satisfactory, nor
can they serve to exonerate him as he claims because, in the
first place, he should not have relied on what the interest
party himself, Francisco Madlonito, told him, nor upon the
information which, at the time he inspected and measured the
lands, was furnished him by the two laborers of whose services
he availed himself for the actual performance of that labor. He
himself ought to have verified the correctness of the
information and have informed himself of the true area of the
land and of all the improvements thereon, they being in sight,
in order to include them in the report which it was his duty to
render to the provincial assessor in fulfillment of the mission
confined to him. In the second place, Francisco Madlonito
himself testified at the trial that he had furnished defendant
with the same date and information which he subsequently
gave to the provincial assessor and to the latter's other deputy
when they both went to verify and investigate the defendant's
work, form which verification and investigation it was
disclosed that the land was larger by 12 hectares 66 ares and
42 centiares and that it contained many other improvements
such as clumps of coconut, cacao and banana trees, besides the
500 hemp plants mentioned in defendant's report. We
therefore fail to understand and it has not been explained how
said improvements could have been omitted from the report,
nor how defendant could have failed to mentioned therein such
a large tract of land as that of the 12 hectares above referred
to. This, together with the circumstances of defendant's having
passed the previous night in Francisco Madlonito's own house,
and having had, therefore, sufficient opportunity and time to
inform himself of exactly what the latter's property, which was
to be measure and recorded in said report, consisted of,
constitute proof that defendant (exception made in so far as
the house is concerned, for it might be true that it did belong
to Francisco Madlonito's brother), willfully omitted from his
report and extensive portion of Francisco Madlonito's real
property that he knew was lawfully taxable and which it was
his duty to record in said document. The lower court did not,
therefore, incur the first error assigned by defendant's counsel
in his brief.
Defendant's counsel alleges, however, that the act committed
by his client and which, as aforesaid, was proven at trial, does
not constitute an infraction provided for and punished by
section 87 of Act No. 82, known as the Municipal Code."
That section provides as follows:
Any officer charged with the duty of assessing real
property, who shall willfully omit from the tax lists
real property which he knows to be lawfully taxable,
shall be guilty of a misdemeanor and punishable by a
fine not exceeding one thousand pesos, or
imprisonment not exceeding two years, or both, in the
discretion of the court.
Section 49 of the same Act, No. 82, provides that the real
estate of the municipality shall be valued and assessed for
taxation by a board, to consist of the president, the municipal
treasurer, and a specially authorized deputy of the provincial
treasurer, which board shall be known as the municipal board
of assessors.
Said section 49 was amended by section 1 of Act No. 1930, so
that the aforementioned municipal board of assessors should
consist of the municipal president the municipal treasurer
and, instead of the deputy to the provincial treasurer, of a
third member to be appointed by the provincial board.
Subsequently, on February 11, 1913, Act No. 2238 was passed,
section 1 of which created the position of provincial assessor
for each province containing municipalities organized under
the provisions of the Municipal Code. Section 2 of this Act
provides that provincial assessors shall be allowed such
number of deputies and clerks as shall be fixed by the
provincial board with the approval of the Executive Secretary,
and section 4, in reciting the duties of the provincial assessor,
and, consequently, those of his deputies, provides that, when
directed by provincial board, he shall revise and correct the
assessments and valuations of real property for the purpose of
taxation, and , in the manner set forth in the Act, revise and
correct, when so directed, any and all assessments and
valuations for taxation, make a correct and just assessments
and state the true value of the real property. Other sections of
this Act confer upon the provincial assessor various powers in
connection with the preparation of the lists of property subject
to assessment, and, finally, establishes the procedure that
must be followed where any municipality or any property
owner does not agree with the assessment and valuation so
made.
As may be seen, the purpose of Act No. 2238, in creating the
office of provincial assessor and allowing him such number of
deputies and clerks as shall be fixed by the provincial board
with the approval of the Executive Secretary, was the same as
that of Act No. 82, in creating, in section 49 thereof, the
municipal board of assessors; and Act No. 1930, in amending
said section in the manner aforementioned, to wit, by
providing that all the real property, taxable or subject to the
land tax, existing in the municipalities of these Islands, should
be assessed, and, for this purpose and in order that the
provincial board should exercise the necessary and proper
supervision over acts of the municipalities relative to said tax,
provided that someone representing the provincial board or
better said, a provincial official, should be a member of the
municipal board of assessors — a purpose and object which are
more accentuated in Act No. 2238 by expressly creating the
office of provincial assessor for the revision and correction of
assessments and valuations of real property declared in the
municipalities — and to enable this official to take a direct and
active part in preparing the lists of property subject to said
tax. Said Act 2238 is therefore intimately related to the two
Acts Nos. 82 and 1930 aforecited, and is virtually a
complement of the same in so far as regards the declaration
and assessment of taxable property.
Said Act No. 2238 provides in section 18 that all Acts or parts
of Acts in conflict therewith are repealed. In the two
aforementioned Acts, Nos. 82 and 1930, in so far as relates to
the assessment and valuation of taxable real property in
municipalities, there is, strictly speaking, nothing which may
be said to be in conflict with said Act no. 2238, not only for the
reason above stated, but also because this Act has done
nothing but change the method and procedure provided in Act
No. 82, the Municipal Code, for determining the taxable real
property in the municipalities and the value thereof, by means
of the intervention which in said procedure is given to the
provincial assessors. But that municipalities are not excluded
from taking part in the proceedings is shown by the fact that
section 9 of this Act No. 2238 provides that, prior to directing
the provincial assessor in accordance with the provisions
thereof, to proceed to revise and correct the assessments and
valuations of real property, the provincial board shall require
each municipal council of the municipalities organized under
the provisions of the Municipal Code (Act No. 82) to prepare,
in such form and detail as the Executive Secretary may
prescribe, a general schedule of the values of the different
classes of land for the municipality which shall be forwarded
to the provincial board for approval, and such schedule, when
approved by the provincial board, shall serve the assessor as
basis for the valuation and assessment. It also provides in
section 13 that it shall be the duty of the municipal president,
secretary and treasurer and all municipal employees, to
render every assistance in their power to the provincial
assessor.
Furthermore, one of the rules of interpretation, as very
properly said by defendant's counsel in his brief, is that "when
there are two laws on the same subject enacted on different
dates, and it appears evidently by the form and essence of the
later law that it was the intention of the legislator to cover
therein the whole of the subject, and that it is a complete and
perfect system, or is in itself a provision, the latest law should
be considered as a legal declaration that all that is comprised
therein shall continue in force and that all that is not shall
rejected and repealed." A simple perusal of Act No. 2238 is
sufficient to show that it was not the intention of the
legislature to cover all matters relative to the assessment and
valuation of the taxable real property of the municipalities,
and subject, because, as aforesaid, the Act in question is
closely related to Act No. 82, of which it is virtually a
complement in so far as regards the organization of the service
of making the lists for the complete and adequate collection to
the tax on the real property in municipalities organized under
said Act No. 82. It cannot, therefore, be maintained that
section 87 of this latter Act should be considered as repealed,
in so far as it prescribes the penalty incurred by any official
who, being charged with the duty of assessing real property,
wilfully omits form the tax lists any real property which he
knows to be lawfully taxable.
 Repeals by implications are not favored, and will not be him to the provincial assessor, and that such omission might
decreed, unless it is manifest that the legislature so have been repaired by correcting the list or report by means of
intended. As laws are presumed to be passed with revision and new assessment made by the provincial assessor
deliberation and with full knowledge of all existing himself on his proceeding with the investigation of the
ones on the subject, it is but reasonable to conclude misdemeanor committed by defendant, does not exempt the
that in passing a statute it was not intended to latter from liability, because what the law punished in said
interfere with or abrogate any former law relating to section 87 is the fact of the willful omission, by the official
same matter, unless the repugnancy between the two charged with the duty of assessing the real property in the tax
is not only irreconcilable, but also clear and convincing, list, of any property which he knows to be lawfully taxable;
and flowing necessarily from the language used, unless and it is immaterial whether said omission can or cannot
the later act fully embraces the subject matter of the subsequently be remedied, because it constitutes in itself a
earlier, or unless the reason for the earlier act is false representation in that document and a fraud committed
beyond peradventure removed. Hence, every effort by the public official to prejudice of the Government or with
must be used to make all acts stand and if, by any intent to cause such prejudice.
reasonable construction, they can be reconciled, the
later act will not operate as a repeal of the earlier. (23 By reason of the foregoing, and the judgment appealed from
Am. and Eng. Ency. of Law, p. 489, and cases there being in accordance with the merits of the case and the law,
cited [vol. 26, pp. 721, 726].) we hereby affirm the same, with the costs against appellant.
So ordered.
As said Act No. 2238 provides no penalty for the provincial
assessor or his deputy who, in revising the assessment and
preparing the tax list of real property, wilfully makes any
omission such as that aforestated; and as the provincial
assessor, or his deputy, is a public official or an official of the
class referred to in section 87, it being immaterial whether he
be a provincial or a municipal official (for it is sufficient that it
be the duty of such official to assess real property) it is evident
that the said penal provisions in force and is applicable to the
provincial assessors and their deputies referred to in Act No.
2238, and that the lower court did not err in sentencing
defendant, under the provisions of said section 87, to the
penalty specified in the judgment appealed from.

The fact that the cadastral survey of the municipality of

Tacloban was to terminated at the time of the discovery of the
omission made by the defendant in the report presented by