G.R. No.

L-13250 October 29, 1971

THE COLLECTOR OF INTERNAL REVENUE, petitioner,
vs.
ANTONIO CAMPOS RUEDA, respondent..
Assistant Solicitor General Jose P. Alejandro and Special Attorney Jose G. Azurin, (O.S.G.) for petitioner.
Ramirez and Ortigas for respondent.

FERNANDO, J.:
The basic issue posed by petitioner Collector of Internal Revenue in this appeal from a decision of the Court of
Tax Appeals as to whether or not the requisites of statehood, or at least so much thereof as may be necessary
for the acquisition of an international personality, must be satisfied for a "foreign country" to fall within the
exemption of Section 122 of the National Internal Revenue Code 1 is now ripe for adjudication. The Court of
Tax Appeals answered the question in the negative, and thus reversed the action taken by petitioner
Collector, who would hold respondent Antonio Campos Rueda, as administrator of the estate of the late
Estrella Soriano Vda. de Cerdeira, liable for the sum of P161,874.95 as deficiency estate and inheritance taxes
for the transfer of intangible personal properties in the Philippines, the deceased, a Spanish national having
been a resident of Tangier, Morocco from 1931 up to the time of her death in 1955. In an earlier resolution
promulgated May 30, 1962, this Court on the assumption that the need for resolving the principal question
would be obviated, referred the matter back to the Court of Tax Appeals to determine whether the alleged law
of Tangier did grant the reciprocal tax exemption required by the aforesaid Section 122. Then came an order
from the Court of Tax Appeals submitting copies of legislation of Tangier that would manifest that the element
of reciprocity was not lacking. It was not until July 29, 1969 that the case was deemed submitted for decision.
When the petition for review was filed on January 2, 1958, the basic issue raised was impressed with an
element of novelty. Four days thereafter, however, on January 6, 1958, it was held by this Court that the
aforesaid provision does not require that the "foreign country" possess an international personality to come
within its terms. 2 Accordingly, we have to affirm.
The decision of the Court of Tax Appeals, now under review, sets forth the background facts as follows: "This
is an appeal interposed by petitioner Antonio Campos Rueda as administrator of the estate of the deceased
Doa Maria de la Estrella Soriano Vda. de Cerdeira, from the decision of the respondent Collector of Internal
Revenue, assessing against and demanding from the former the sum P161,874.95 as deficiency estate and
inheritance taxes, including interest and penalties, on the transfer of intangible personal properties situated
in the Philippines and belonging to said Maria de la Estrella Soriano Vda. de Cerdeira. Maria de la Estrella
Soriano Vda. de Cerdeira (Maria Cerdeira for short) is a Spanish national, by reason of her marriage to a
Spanish citizen and was a resident of Tangier, Morocco from 1931 up to her death on January 2, 1955. At the
time of her demise she left, among others, intangible personal properties in the Philippines." 3 Then came this
portion: "On September 29, 1955, petitioner filed a provisional estate and inheritance tax return on all the
properties of the late Maria Cerdeira. On the same date, respondent, pending investigation, issued an
assessment for state and inheritance taxes in the respective amounts of P111,592.48 and P157,791.48, or a
total of P369,383.96 which tax liabilities were paid by petitioner ... . On November 17, 1955, an amended
return was filed ... wherein intangible personal properties with the value of P396,308.90 were claimed as
exempted from taxes. On November 23, 1955, respondent, pending investigation, issued another assessment
for estate and inheritance taxes in the amounts of P202,262.40 and P267,402.84, respectively, or a total of
P469,665.24 ... . In a letter dated January 11, 1956, respondent denied the request for exemption on the
ground that the law of Tangier is not reciprocal to Section 122 of the National Internal Revenue Code. Hence,
respondent demanded the payment of the sums of P239,439.49 representing deficiency estate and
inheritance taxes including ad valorem penalties, surcharges, interests and compromise penalties ... . In a
letter dated February 8, 1956, and received by respondent on the following day, petitioner requested for the
reconsideration of the decision denying the claim for tax exemption of the intangible personal properties and
the imposition of the 25% and 5% ad valorem penalties ... . However, respondent denied request, in his letter
dated May 5, 1956 ... and received by petitioner on May 21, 1956. Respondent premised the denial on the
grounds that there was no reciprocity [with Tangier, which was moreover] a mere principality, not a foreign
country. Consequently, respondent demanded the payment of the sums of P73,851.21 and P88,023.74
respectively, or a total of P161,874.95 as deficiency estate and inheritance taxes including surcharges,
interests and compromise penalties." 4
The matter was then elevated to the Court of Tax Appeals. As there was no dispute between the parties
regarding the values of the properties and the mathematical correctness of the deficiency assessments, the
principal question as noted dealt with the reciprocity aspect as well as the insisting by the Collector of
Internal Revenue that Tangier was not a foreign country within the meaning of Section 122. In ruling against
the contention of the Collector of Internal Revenue, the appealed decision states: "In fine, we believe, and so
hold, that the expression "foreign country", used in the last proviso of Section 122 of the National Internal
Revenue Code, refers to a government of that foreign power which, although not an international person in
the sense of international law, does not impose transfer or death upon intangible person properties of our
citizens not residing therein, or whose law allows a similar exemption from such taxes. It is, therefore, not
necessary that Tangier should have been recognized by our Government order to entitle the petitioner to the
exemption benefits of the proviso of Section 122 of our Tax. Code." 5
Hence appeal to this court by petitioner. The respective briefs of the parties duly submitted, but as above
indicated, instead of ruling definitely on the question, this Court, on May 30, 1962, resolve to inquire further
into the question of reciprocity and sent back the case to the Court of Tax Appeals for the motion of evidence
thereon. The dispositive portion of such resolution reads as follows: "While section 122 of the Philippine Tax
Code aforequoted speaks of 'intangible personal property' in both subdivisions (a) and (b); the alleged laws of
Tangier refer to 'bienes muebles situados en Tanger', 'bienes muebles radicantes en Tanger', 'movables' and
'movable property'. In order that this Court may be able to determine whether the alleged laws of Tangier
grant the reciprocal tax exemptions required by Section 122 of the Tax Code, and without, for the time being,
going into the merits of the issues raised by the petitioner-appellant, the case is [remanded] to the Court of
Tax Appeals for the reception of evidence or proof on whether or not the words `bienes muebles', 'movables'
and 'movable properties as used in the Tangier laws, include or embrace 'intangible person property', as used
in the Tax Code." 6 In line with the above resolution, the Court of Tax Appeals admitted evidence submitted by
the administrator petitioner Antonio Campos Rueda, consisting of exhibits of laws of Tangier to the effect that
"the transfers by reason of death of movable properties, corporeal or incorporeal, including furniture and
personal effects as well as of securities, bonds, shares, ..., were not subject, on that date and in said zone, to
the payment of any death tax, whatever might have been the nationality of the deceased or his heirs and
legatees." It was further noted in an order of such Court referring the matter back to us that such were duly

admitted in evidence during the hearing of the case on September 9, 1963. Respondent presented no
evidence." 7
The controlling legal provision as noted is a proviso in Section 122 of the National Internal Revenue Code. It
reads thus: "That no tax shall be collected under this Title in respect of intangible personal property (a) if the
decedent at the time of his death was a resident of a foreign country which at the time of his death did not
impose a transfer tax or death tax of any character in respect of intangible person property of the Philippines
not residing in that foreign country, or (b) if the laws of the foreign country of which the decedent was a
resident at the time of his death allow a similar exemption from transfer taxes or death taxes of every
character in respect of intangible personal property owned by citizens of the Philippines not residing in that
foreign country." 8 The only obstacle therefore to a definitive ruling is whether or not as vigorously insisted
upon by petitioner the acquisition of internal personality is a condition sine qua non to Tangier being
considered a "foreign country". Deference to the De Lara ruling, as was made clear in the opening paragraph
of this opinion, calls for an affirmance of the decision of the Court of Tax Appeals.
It does not admit of doubt that if a foreign country is to be identified with a state, it is required in line with
Pound's formulation that it be a politically organized sovereign community independent of outside control
bound by penalties of nationhood, legally supreme within its territory, acting through a government
functioning
under
a
regime
of
law. 9 It is thus a sovereign person with the people composing it viewed as an organized corporate society
under a government with the legal competence to exact obedience to its commands. 10 It has been referred to
as a body-politic organized by common consent for mutual defense and mutual safety and to promote the
general welfare. 11Correctly has it been described by Esmein as "the juridical personification of the
nation." 12 This is to view it in the light of its historical development. The stress is on its being a nation, its
people occupying a definite territory, politically organized, exercising by means of its government its
sovereign will over the individuals within it and maintaining its separate international personality. Laski could
speak of it then as a territorial society divided into government and subjects, claiming within its allotted area
a supremacy over all other institutions. 13 McIver similarly would point to the power entrusted to its
government to maintain within its territory the conditions of a legal order and to enter into international
relations. 14 With the latter requisite satisfied, international law do not exact independence as a condition of
statehood. So Hyde did opine. 15
Even on the assumption then that Tangier is bereft of international personality, petitioner has not successfully
made out a case. It bears repeating that four days after the filing of this petition on January 6, 1958
in Collector of Internal Revenue v. De Lara, 16 it was specifically held by us: "Considering the State of
California as a foreign country in relation to section 122 of our Tax Code we believe and hold, as did the Tax
Court, that the Ancilliary Administrator is entitled the exemption from the inheritance tax on the intangible
personal property found in the Philippines." 17 There can be no doubt that California as a state in the American
Union was in the alleged requisite of international personality. Nonetheless, it was held to be a foreign country
within the meaning of Section 122 of the National Internal Revenue Code. 18
What is undeniable is that even prior to the De Lara ruling, this Court did commit itself to the doctrine that
even a tiny principality, that of Liechtenstein, hardly an international personality in the sense, did fall under
this exempt category. So it appears in an opinion of the Court by the then Acting Chief Justicem Bengson who
thereafter assumed that position in a permanent capacity, in Kiene v. Collector of Internal Revenue. 19 As was
therein noted: 'The Board found from the documents submitted to it proof of the laws of Liechtenstein
that said country does not impose estate, inheritance and gift taxes on intangible property of Filipino citizens
not residing in that country. Wherefore, the Board declared that pursuant to the exemption above established,
no estate or inheritance taxes were collectible, Ludwig Kiene being a resident of Liechtestein when he passed
away." 20 Then came this definitive ruling: "The Collector hereafter named the respondent cites decisions
of the United States Supreme Court and of this Court, holding that intangible personal property in the
Philippines belonging to a non-resident foreigner, who died outside of this country is subject to the estate tax,
in disregard of the principle 'mobilia sequuntur personam'. Such property is admittedly taxable here. Without
the proviso above quoted, the shares of stock owned here by the Ludwig Kiene would be concededly subject
to estate and inheritance taxes. Nevertheless our Congress chose to make an exemption where conditions are
such that demand reciprocity as in this case. And the exemption must be honored." 21
WHEREFORE, the decision of the respondent Court of Tax Appeals of October 30, 1957 is affirmed. Without
pronouncement as to costs.
Concepcion, C.J., Makalintal, Zaldivar, Castro, Villamor and Makasiar, JJ., concur.
Reyes, J.B.L., J., concurs in the result.
Teehankee and Barredo, JJ., took no part.
Footnotes
1 Commonwealth Act No. 466 as amended (1939).
2 Collector of Internal Revenue v. De Lara, 102 Phil. 813 (1958).
3 Annex C, Petition, Decision of Court of Tax Appeals, p. 1.
4 Ibid, pp. 2-3.
5 Ibid, p. 9.
6 Resolution, pp. 4-5.
7 Order of November 19, 1963 p. 2.
8 Section 122 of the National Internal Revenue Code (1939) reads insofar as relevant: "For the purposes of this Title the terms 'gross
estate' and 'gift' include real estate and tangible personal property, or mixed, physically located in the Philippines; franchise which must
be exercised in the Philippines; shares, obligations, or bonds issued by any corporation or sociedad anonima organized or constituted in
the Philippines in accordance with its laws; shares, obligations, or bonds issued by any foreign corporation eighty-five per centum of the
business of which is located in the Philippines; shares, obligations, or bonds issued by any foreign corporation if such shares, obligations,
or bonds have acquired a business situs in the Philippines; shares or rights in any partnership, business or industry established in the
Philippines; or any personal property, whether tangible or intangible, located in the Philippines; Provided, however, That in the case of a
resident, the transmission or transfer of any intangible personal property, regardless of its location, subject to the taxes prescribed in this
Title; And provided, further, that no tax shall be collected under this Title in respect of intangible personal property (a) if the decedent at
the time of his death was a resident of a foreign country which at the time of his death did not impose a transfer tax or death tax of any
character in respect of intangible personal property of citizens of the Philippines not residing in that foreign country, or (b) if the laws of
the foreign country of which the decedent was a resident at the time of his death allow a similar exemption from transfer taxes or death
taxes of every character in respect of intangible personal property owned by citizens of the Philippines not residing in that foreign
country."
9 Cf. Pound: "The political organization of a society legally supreme within and independent of legal control from without." II
Jurisprudence, p. 346 (1959).
10 Cf. Willoughby, Fundamental Concepts of Public Law, p. 3 (1925).
11 Cf. 1 Cooley, Constitutional Limitations, p. 3 (1927).
12 Cf. Cohen, Recent Theories of Sovereignty, p. 15 (1937). Pitamic speaks of it as a juridical organization of human beings. Treatise on
the State, p. 17 (1933).
13 Laski, Grammar of Polities, p. 25 (1934).

14 Cf. McIver, The State, p. 22 (1926).

15 Hyde, International Law, 2nd ed., p. 22 (1945).
16 102 Phil. 813 (1958).
17 Ibid, p. 820.
18 In the subsequent case of Collector of Internal Revenue v. Fisher, L-11622, January 28, 1961, 1 SCRA 93, this Court did find that the
reciprocity found in the California statutes was partial not total, thus holding that Section 122 would not apply, without however reversing
the doctrine that an international personality is not a requisite. "
19 97 Phil. 352 (1955).
20 Ibid, p. 354.

G.R. No. 102508

January 30, 2002
REPUBLIC OF THE PHILIPPINES, petitioner,
vs.
SANDIGANBAYAN, Third Division, and JOLLY R. BUGARIN, respondents.
DAVIDE, JR., C.J.:*
Persistent in its efforts to recover the alleged unexplained wealth amassed by private respondent Jolly R.
Bugarin, a government official during the Marcos regime, petitioner Republic of the Philippines implores this
Court to reverse and set aside the 13 August 1991 Decision of the Sandiganbayan 1 dismissing, for
insufficiency of evidence, its petition for forfeiture of properties filed pursuant to Republic Act No. 1379, 2 as
amended.
In its petition3 filed with the Sandiganbayan on 3 August 1987, petitioner, represented by the Presidential
Committee on Good Government (PCGG), averred that respondent Bugarin acquired during his incumbency as
Director of the National Bureau of Investigation (NBI) real and personal properties enumerated in paragraph 5
thereof whose aggregate fair market value at the time of their acquisition was P6,313,632.56. Allegedly,
those properties were manifestly in excess or out of proportion to his salaries, allowances, and other
emoluments from 1 July 1967 to 15 March 1986 totalling P743, 243.65 only.
In his Answer with Explanation,4 Bugarin claimed that some of the properties enumerated in paragraph 5 of
the petition were acquired by him and his wife before he became a Director of the NBI. The acquisition cost of
the properties he acquired during his incumbency was P2,793,141.26 only. He likewise alleged that apart from
the P743,243.65 he received for the entire period of his service as NBI Director, he also received allowances
from the Dangerous Drugs Board (DDB) totalling P74,500.00; the National Police Commission (Napolcom),
P148,032.24; the Central Bank, P834,700.00; and the Law Firm of San Juan, Africa, Gonzales, and San Agustin,
P490,000.00. He also derived substantial income from the investments and properties he and his wife
acquired before he became a Director of the NBI.
During the trial, respondent Bugarin presented fifteen witnesses, including himself, as well as documentary
evidence marked as Exhibits "1" to "48." A summary of his property acquisitions follows:
BUSINESS INVESTMENTS

YEAR

AMOUNT

1. Philippine Commercial
and Industrial Bank16

19681970;
1980

P24,800

2. Social Studies
Publication17

1971

10,000

3. Admiral Investment &

Financing Corp.

19651981

24,060

4. Admiral Development
Corp.
5. Far East Bank & Trust
Co.18

3,200
19711972

19,030

6. Lakeview Industrial Corp. 1973

10,000

7. Phil. Banking
Corporation19

1970
1983

4,000
5,200

8. Mabuhay Airways Phils.,

Inc

1974

10,000

9. Menzi Development
Corp.

1974

5, 000

10. LRW Realty &

Development

1975

300,000

11. Astra Financing

Corporation20

1981

25,000

12. J.R. Garments

Corporation21

1982
1983

300,000
150,000

13. Manila Hilton

1,400
P891,69
0

TOTAL
OTHER INVESTMENTS
1. Philippine
Columbian Club

1968-1975

P24,750

2. Makati Sports Club 1975

25,000

3. Manila Polo Club

1978

32,000

4. Baguio Country
Club

1985

60,000

P141,75
TOTAL
0
To recapitulate, the total cost of the properties, business investments and other investments acquired by
Bugarin during his incumbency as NBI Director is as follows:
Real Property
P1,705,583
Business Investments 891,690
Other Investments

141,750

TOTAL P2,739,023
As to his income, he attempted to prove that aside from those mentioned in his Answer, he also earned the
following amounts:
Proceeds from the sale of a parcel of P15,000.0
land in Iloilo City in 196822
0
Proceeds from the sale of his real
property in Quezon City in 198423

P300,000.
00

Profits in stock transaction in 1983

P63,862.0
0

Pensions from the Philippine

Government as veteran at P220 per P49,000.0
month from July 1967 to March 1986 0
Professional Fee received from the
China Bank and Africa Law office24

P55,000.0
0

Outstanding balance as of 28
February 1989 of GSIS loan obtained P775,073.
in 198325
38
Pension from the United States
Government as World War I veteran

$8,512.00

Rental income from the lease of his

houses in Dasmarias Village,
Makati; Valle Verde, Pasig; and
Greenhills, San Juan, from 1981 to
P1,748,64
1986
0
In its 71-page decision, the Sandiganbayan excluded the allowances from the DDB, Napolcom and Central
Bank on the ground that they were given to Bugarin in the nature of reimbursement, which would imply that
they had been spent for the purpose for which they were earmarked and could not have therefore been used
in purchasing the subject properties. Anent the professional fees, the Sandiganbayan held that "while the
same may be considered as unlawful income, forfeiture thereof or of the properties equivalent to said
amount is not part of the subject matter of the petition." As to the amount of P63,862.50 alleged to have
been his profits from stock transactions, the same turned out to be the tax paid on the gains realized by him
in stock transactions in 1983 and, hence, not allowable as part of his income. Also excluded from his
disposable funds were the alleged pensions from the U.S. and Philippine governments, since the evidence
presented were merely checks dated 1 February 1990 in the amount of $3826 and 31 January 1990 in the
amount of P220,27 respectively, albeit payable to Bugarin. It then summarized respondent's lawful income and
disposable funds, thus:
Source of Income
Amount
Salary, allowances and other
emoluments of respondent as
NBI Director (not disputed by the
petitioner)

P743,243.65
2. Proceeds from sale of Quezon
City lot
(Exhs. 35, 35-A and 36)

P300,000.00

3. Proceeds from sale of Iloilo

City lot (Exh. 3-B)

P15,000.00

4. Rental Income earned by

respondent from the lease of his
houses in Dasmarias Village,
Makati; Valle Verde, Pasig; and
San Juan (Exhs.39-A, 40-A, 41-A,
43-A and 44-A).................. P1,748,640.00

Total lawful income earned by

respondent from 19671986

Outstanding loan balance re:

GSIS loan obtained by
respondent in 1983,
Representing additional
disposable funds by him (Exh. 2)

P2,806,883.65

P775,073.38

Respondent's total lawful income P3,581,957.03

28
and additional disposable

funds

Respondent's real property acquisitions and investments were summarized by the Sandiganbayan as follows:
Real property
acquisitions /
Amount
Investments
1. Real properties

P1,705,58
3

2. Business
investments

906,690

3. Other
investments

141,750

P2,754,02
Total
3
Apart from the amounts necessary for funding his property acquisitions and business investments, the
Sandiganbayan declared as chargeable against his lawful income and disposable funds the amount of
P497,094 representing tax payments made by the respondent from 1981 to 1986, as well as P310,000
representing family and personal expenses, using as basis therefor his Statement of Assets and Liabilities for
the period ending 31 December 1969, which states that his family and personal expenses for the years 1967
and 1968 were P15,000 and P16,000, respectively. Hence, from 1967 to 1986, respondent's total cash outflow
amounted to P3,561,117. The Sandiganbayan then concluded in this wise:
All things considered, it can be clearly seen that while respondent earned a total lawful income of
P2,806,883.65 from 1967 to 1986, and had additional funds of P775, 073.38 sourced through a loan from
GSIS, thereby accounting for total funds of P3,581,957.03, he bought real properties and engaged in business
and other investments having a total worth of P2,754,023.00 during the same period. At the same time, he
made tax payments of P497,094.00 and incurred an estimated family and personal expenses from 1967 to
1986 of P310,000.00. Summed up, respondent Bugarin's total cash outflow from 1967 to 1986 amounted to
P3,561,117.00 out of his lawful income and source of funds (or a total cash inflow) valued at P3,581,957.03.
We therefore reach the inevitable conclusion that respondent Bugarin funded his real property acquisitions
and business and other investments out of his lawful income as NBI Director and other legitimate sources of
financing. Respondent Bugarin was able to explain to the satisfaction of this Court that aside from his
income as NBI Director, he also earned substantial amounts from the sale by his wife of two parcels of land,
and rental income from the lease of his three residential houses in Makati, Pasig, and San Juan. He also
obtained a loan from the GSIS. These fund, all lawfully acquired, were utilized by him in financing his various
acquisitions and business undertakings.29
Based on these findings, the Sandiganbayan dismissed the petition for forfeiture on the ground of
insufficiency of evidence.
Hence, this petition wherein petitioner maintains that the Sandiganbayan "seriously erred" in holding that
WHILE THE AMOUNTS OF P490,000.00 (PROFESSIONAL FEES FROM THE SAN JUAN, AFRICA, GONZALES AND
SAN AGUSTIN LAW OFFICE) AND P55,000.00 (PROFESSIONAL FEES CONTAINED IN THE STATEMENT OF ASSETS
AND LIABILITIES AS OF DECEMBER 31, 1969) MAY BE CONSIDERED AS UNLAWFUL INCOME, FORFEITURE
THEREOF OR OF RESPONDENT'S PROPERTIES EQUIVALENT TO SAID AMOUNT NOT BEING PART OF THE
SUBJECT MATTER OF THE PETITION CANNOT BE GRANTED.
RESPONDENT'S OUTSTANDING LOAN BALANCE TO GSIS AMOUNTING TO P775,073.38 AS OF FEBRUARY 28,
1989, WHILE NOT TO BE CONSIDERED AS PART OF HIS INCOME, CONSTITUTES PART OF THE AGGREGATE OF
FUNDS USED BY HIM IN CAPITALIZING HIS PROPERTY ACQUISITIONS AND BUSINESS INVESTMENTS.
RESPONDENT'S TOTAL INCOME OF P1,748,640.00 FROM THE LEASE OF HIS HOUSES IN DASMARIAS VILLAGE,
MAKATI, VALLE VERDE, PASIG, AND SAN JUAN SHOULD BE CONSIDERED AS PART OF HIS LAWFUL INCOME.
IT IS THE ACQUISITION COST OF THE PROPERTY OR BUSINESS INVESTMENT PURCHASED OR ACQUIRED AND
NOT THE FAIR MARKET VALUE THEREOF AT THE TIME OF ACQUISITION WHICH SHOULD BE MADE THE BASIS IN
DETERMINING THE VALUE OF RESPONDENT'S TOTAL ACQUISITION DURING THE PERIOD CONSIDERED.
RESPONDENT'S TOTAL FAMILY AND PERSONAL EXPENSES PER YEAR WOULD AMOUNT TO P15,500.00 ONLY.
RESPONDENT BUGARIN FUNDED HIS REAL PROPERTY ACQUISITION AND BUSINESS AND OTHER INVESTMENTS
OUT OF HIS LAWFUL INCOME AS NBI DIRECTOR AND OTHER LEGITIMATE SOURCES OF FINANCING. 30
It is well-settled that the appellate jurisdiction of the Supreme Court over decisions or final orders of the
Sandiganbayan is limited only to questions of law.31 A question of law exists when the doubt or controversy
concerns the correct application of law or jurisprudence to a certain set of facts; or when the issue does not
call for an examination of the probative value of the evidence presented, the truth or falsehood of facts being
admitted.32 A question of fact exists when the doubt or difference arises as to the truth or falsehood of facts
or when the query invites calibration of the whole evidence considering mainly the credibility of the
witnesses, the existence and relevancy of specific surrounding circumstances as well as their relation to each
other and to the whole, and the probability of the situation. 33
The Supreme Court is not a trier of facts. It is not the Court's function to examine and weigh all over again the
evidence presented in the proceedings below. 34 Thus, it is the policy of the Court to sustain the factual
findings of the trial court, such as the Sandiganbayan, on the reasonable presumption that the latter court is
in a better position to assess the evidence before it.
While the petitioner concedes that the Sandiganbayan's findings of facts are conclusive upon this Court, it
invokes the exceptions laid down in Dischoso v. Court of Appeals,35 to wit: "(1) when the conclusion is a
finding grounded entirely on speculation, surmise, and conjectures; (2) when the inference made is manifestly
absurd, mistaken, or impossible; (3) xxx; (4) when the judgment is premised on a misapprehension of facts;
(5) xxx."
A plain reading of the Sandiganbayan's decision exposed manifest errors and misapprehension of facts, which
impelled us to pore over the evidence extant from the records. After a careful perusal thereof and of the
arguments of the parties, we have come up with the following conclusions.
I. Income from Private Practice of Profession.
We agree with the respondent that the professional fee he received from the law firm of San Juan, Africa,
Gonzales and San Agustin from 1978 to 1986 in the amount of P70,000 per annum, as well as that in the
amount of P55,000 reflected in his Statement of Assets and Liabilities for the period ending 31 December
1969, should not be excluded as part of his lawful income or disposable funds.

Section 12, Rule XVIII of Civil Service Rules provides:

Sec 12. No officer or employee shall engage directly in any private business, vocation, or professionor be
connected with any commercial, credit, agricultural, or industrial undertaking without a written permission
from the head of the Department: Provided, That this prohibition will be absolute in the case of those officers
and employees whose duties and responsibilities require that their entire time be at the disposal of the
Government: Provided, further, That if an employee is granted permission to engage in outside activities, the
time so devoted outside of office hours should be fixed by the chief of the agency to the end that it will not
impair in any way the efficiency of the officer or employee: and provided, finally, that no permission is
necessary in the case of investments, made by an officer or employee, which do not involve any real or
apparent conflict between his private interests and public duties or in any way influence him in the discharge
of his duties, and he shall not take part in the management of the enterprise or become an officer or member
of the board of directors. (Underscoring supplied).
Respondent was engaged as a consultant on "handwriting, document examination and evaluation, ballistics,
fingerprinting and other specialized projects."36 He claimed that he rendered his services as such outside of
office hours, which services did not conflict with his official functions as NBI Director. He was given permission
by his superior to act as a consultant, but he could not find among his files the written permission allegedly
given to him in 1967. At any rate, he did not conceal his consultancy services and the corresponding fees he
received; in fact, he stated them in the Statement of Assets and Liabilities he submitted to the Office of the
Secretary of Justice, as well as in his Income Tax Returns.
Even assuming that he had no prior written authority to act as a consultant of a private entity, respondent's
violation of the Rule -- lack of prior permission -- was a technical one. 37 At most, it would subject him to the
administrative penalty provided in the Civil Service Rules had the proper charge been filed against him. Such
violation did not amount to a crime or graft and corrupt practice as defined by law. 38 Hence, we are of the
opinion that his professional fees should be included in the computation of his lawful income.
II. Outstanding Balance of his Loan from the GSIS
It is unquestionable that the outstanding loan balance of respondent's obligation to the GSIS in the amount of
P775,073.38 as of 28 February 1989 did not constitute as respondent's "income" in the strict sense of the
word. The same, however, formed part of the disposable funds used by him in capitalizing his property
acquisition and business investments.
In Republic v. Intermediate Appellate Court, which was also a case for forfeiture of unexplained wealth, 39 this
Court gave weight to the evidence adduced by the respondents therein indicating that the purchase by them
of real properties and the construction of a house were partly financed through personal loans, and loans
from the GSIS and the Development Bank of the Philippines.
In the present case, however, the loan from the GSIS in the sum of P995,000.00 was granted only on 20 May
1983. We cannot, therefore, sustain respondent's claim that it was his source of fund in the construction of his
house in Greenhills, San Juan, which was undertaken in 1980, there being no competent evidence that he
obtained other loans to initially finance such construction and that the GSIS loan proceeds were in fact used
by him in repaying such loans. These loan proceeds could have been, at most, part of the funds he utilized in
acquiring properties in 1983 or thereafter.
III. Rental Income from the Lease of his houses in Dasmarias Village, Makati; Valle Verde, Pasig; and
Greenhills, San Juan
It bears emphasis that, as borne out by his own summary of property acquisitions, most of his assets were
acquired in 1980 and in the preceding years. The rental income of P1,748,640, which the Sandiganbayan
included as part of his disposable funds, were for the period from 1981 to 1986. Thus, such income could not
have been used by respondent in financing the purchase of his real properties and shareholdings in various
companies prior to 1981. Besides, as will be shown later, there exists an unshakable doubt on the legality of
this income, considering that the properties from which such income was derived were not wholly funded by
lawful income.
IV. Basis for Determining the Value of Respondent's Assets
In ascertaining the value of respondent's properties and shareholdings, it is not the fair market value, as
claimed by the petitioner, that should be made as basis thereof. Rather, as correctly held by the
Sandiganbayan, it is the acquisition cost thereof, since it was the actual amount of money shelled out by
respondent in acquiring them. It is the acquisition cost that must be charged against respondent's lawful
income and funds.
Neither can we sustain petitioner's bare allegation that the cost or consideration of the subject properties
stated in the contracts were understated for tax evasion purposes. Absent any evidence to support it, such
claim deserves a short shrift for being merely speculative or conjectural.
V. Family and Personal Expenses
In coming out with the figure P310,000 representing his personal and family expenses during his tenure as
NBI Director, respondent court adopted as basis those supplied by private respondent in his Statement of
Assets and Liabilities for the period ending 31 December 1969, which were P15,000 for 1967 and P16,000 for
1968. It proceeded to extrapolate the total figure for the entire period material to the forfeiture proceeding by
multiplying the resulting annual average of P15,500 by 20 years.
Owing to the inflation and consequent decline of the purchasing power of the Philippine peso throughout the
period in question, Bugarin's total family and personal expenses, as conceded by the Sandiganbayan, was
extremely a conservative one. But, just like the Sandiganbayan, we can neither come up with a greater
amount in the absence of any other evidence in support thereof. Indeed, the determination thereof cannot be
left to conjecture or guesswork.
VI. Sufficiency of Respondent's Explanation of His Property Acquisitions
Section 2 of R.A. No. 1379 provides that whenever any public officer or employee has acquired during his
incumbency property which is manifestly out of proportion to his salary as such public officer or employee
and to his other lawful income and income from legitimately acquired property, the said property shall be
presumed prima facie to have been unlawfully acquired. Section 5 thereof provides for a hearing during which
the respondent is given an ample opportunity to explain, to the satisfaction of the court, how he has acquired
the property in question. It is only when the respondent is unable to show that his asset acquisitions were
lawfully made that such property shall be forfeited in favor of the State.
From the summary of Bugarin's assets, it can readily be seen that all of his real properties were purchased or
constructed, as the case may be, from 1968 to 1980. The total acquisition cost thereof was P1,705,583. With
the exception of those that had been liquidated, those acquired from 1981 onward, and those whose year of
acquisition could not be determined, his shareholdings in various corporations and other investments

amounted to P464,580. Hence, for the period from 1968 to 1980, he amassed wealth in the amount
of P2,170,163.
On the other hand, his total income from 1967 to 1980 amounted only to P766,548, broken down as follows:
Professional fees reflected in his
Statement of Assets and
Liabilities for 31 December 1969 P55,000
Professional fees from the Law
Firm of San Juan, Africa,
Gonzales, and San Agustin from
1978 to1980 at the rate of
P70,000 per annum

P210,000

Proceeds from the sale of his lot

in Iloilo City in 1968

P15,000

Salaries and Allowances from the

NBI as reflected
in his Income Statement
(assuming that this is
accurate)40
P486,548
Total
P766,548
It bears repeating that the proceeds of the loan granted to him by the GSIS in 1983 and the rental income
from 1981 to 1986, as well as the proceeds of the sale of his real property in 1984, could not have been
utilized by him as his funds for the real properties and investments he acquired in 1980 and in the preceding
years. His lawful income for the said period being only P766,548, the same was grossly insufficient to finance
the acquisition of his assets for the said period whose aggregate cost was P2,170,163. This gross disparity
would all the more be emphasized had there been evidence of his actual family and personal expenses and
tax payments.
Premises considered, respondent's properties acquired from 1968 to 1980 which were out of proportion to his
lawful income for the said period should be forfeited in favor of the government for failure of the respondent
to show, to the Court's satisfaction, that the same were lawfully acquired.
WHEREFORE, the appealed decision of the Sandiganbayan is hereby REVERSED and SET ASIDE. The petition
is GRANTED, and the properties of respondent JOLLY BUGARIN acquired from 1968 to 1980 which were
disproportionate to his lawful income during the said period are ordered forfeited in favor of petitioner
Republic of the Philippines. Let this case be REMANDED to the Sandiganbayan for proper determination of
properties to be forfeited in petitioner's favor.
SO ORDERED.
Melo, Vitug, Quisumbing, Buena, Ynares-Santiago, Sandoval-Gutierrez, and Carpio, JJ., concur.
Bellosillo, J., no part due to relationship to a party.
Puno, J., no part due to relation with respondent in the DOJ.
Kapunan, J., I join justice Pardo in his dissenting opinion.
Mendoza, J., no part. Prior relationship with party.
Panganiban, J., no part close family relations with a party.
Pardo, J., I dissent. See dissenting opinion attached.
De Leon, Jr., J., no part. Signatory in SB Decision.
Footnotes
*
This case was reassigned to the ponente pursuant to the Resolution of 27 February 2001 in A.M. No. 00-9-03SC.
1
Per Associate Justice Augusto M. Amores, with the concurrence of Associate Justices Conrado M. Molina and
Sabino R. de Leon, Jr. (now Associate Justice of the Supreme Court). Original Records (OR), 696.
2
Entitled An Act Declaring Forfeiture in Favor of the State Any Property Found to Have Been Unlawfully
Acquired by Any Public Officer or Employee and Providing for the Proceedings Therefor.
3
OR, 1.
4
Id., 228.
5
Exhibits "1," "1-B" and "1-C."
6
Exhs. 15, 17, 17-A and 17-D.
7
Exhs. "2" and "2-B."
8
Exh. "9."
9
Exhs. "10" and "12."
10
Exhs. "18" and "19."
11
Exhs. "5" and "5-B."
12
Exhs. "6" and "6-A.."
13
Exh. "13."
14
Exhs. "14" and "14-A.."
15
Exh. "2-C."
16
Exh. "28."
17
Exh. "23."
18
Exh. "27."
19
Exh. "26."
20
Exhs. "22" and "22-A.."
21
Exh. "20."
22
Exh. "3-B."
23
Exh. "35-A."
24
Exh. "3."
25
Exh. "2."
26
Exh. "48."
27
Exh. "48-A."
28
OR, 754.
29
OR, 763-764.

30

Rollo, 31-32.
Rodriguez v. Sandiganbayan, 177 SCRA 220, 225 [1989] citing Gabison v. Sandiganbayan, 151 SCRA 61
[1987].
32
Uniland Resources v. Development Bank of the Philippines, 200 SCRA 751,755 [1991]; Roman Catholic
Archbishop of Manila v. Court of Appeals, 258 SCRA 186, 199 [1996]; China Road and Bridge Corp. v. Court of
Appeals, G.R. No. 137898, 15 December 2000.
33
China Road and Bridge Corp. v. Court of Appeals, supra.
34
Trade Unions of the Philippines v. Laguesma, 236 SCRA 586,591 [1994]; Navarro v. Court of Appeals, 209
SCRA 612, 623 [1992].
35
192 SCRA 169,175 [1990].
36
Exh. "31."
37
Ramos v. Rada, 65 SCRA 179,180 [1975].
38
Macariola v. Asuncion, 114 SCRA 77, 102 [1982].
39
172 SCRA 296 [1989].
40
Exh. "38."
31

Republic of the Philippines

SUPREME COURT
Manila
SECOND DIVISION
G.R. No. L-30671 November 28, 1973
REPUBLIC OF THE PHILIPPINES, petitioner,
vs.
HON. GUILLERMO P. VILLASOR, as Judge of the Court of First Instance of Cebu, Branch I, THE
PROVINCIAL SHERIFF OF RIZAL, THE SHERIFF OF QUEZON CITY, and THE SHERIFF OF THE CITY OF
MANILA, THE CLERK OF COURT, Court of First Instance of Cebu, P. J. KIENER CO., LTD., GAVINO
UNCHUAN, AND INTERNATIONAL CONSTRUCTION CORPORATION, respondents.
Office of the Solicitor General Felix V. Makasiar and Solicitor Bernardo P. Pardo for petitioner.
Andres T. Velarde and Marcelo B. Fernan for respondents.
FERNANDO, J.:
The Republic of the Philippines in this certiorari and prohibition proceeding challenges the validity of an order
issued by respondent Judge Guillermo P. Villasor, then of the Court of First Instance of Cebu, Branch
I, 1 declaring a decision final and executory and of an alias writ of execution directed against the funds of the
Armed Forces of the Philippines subsequently issued in pursuance thereof, the alleged ground being excess of
jurisdiction, or at the very least, grave abuse of discretion. As thus simply and tersely put, with the facts
being undisputed and the principle of law that calls for application indisputable, the outcome is predictable.
The Republic of the Philippines is entitled to the writs prayed for. Respondent Judge ought not to have acted
thus. The order thus impugned and the alias writ of execution must be nullified.
In the petition filed by the Republic of the Philippines on July 7, 1969, a summary of facts was set forth thus:
"7. On July 3, 1961, a decision was rendered in Special Proceedings No. 2156-R in favor of respondents P. J.
Kiener Co., Ltd., Gavino Unchuan, and International Construction Corporation, and against the petitioner
herein, confirming the arbitration award in the amount of P1,712,396.40, subject of Special Proceedings. 8.
On June 24, 1969, respondent Honorable Guillermo P. Villasor, issued an Order declaring the aforestated
decision of July 3, 1961 final and executory, directing the Sheriffs of Rizal Province, Quezon City [as well as]
Manila to execute the said decision. 9. Pursuant to the said Order dated June 24, 1969, the corresponding
Alias Writ of Execution [was issued] dated June 26, 1969, .... 10. On the strength of the afore-mentioned Alias
Writ of Execution dated June 26, 1969, the Provincial Sheriff of Rizal (respondent herein) served notices of
garnishment dated June 28, 1969 with several Banks, specially on the "monies due the Armed Forces of the
Philippines in the form of deposits sufficient to cover the amount mentioned in the said Writ of Execution"; the
Philippine Veterans Bank received the same notice of garnishment on June 30, 1969 .... 11. The funds of the
Armed Forces of the Philippines on deposit with the Banks, particularly, with the Philippine Veterans Bank and
the Philippine National Bank [or] their branches are public funds duly appropriated and allocated for the
payment of pensions of retirees, pay and allowances of military and civilian personnel and for maintenance
and operations of the Armed Forces of the Philippines, as per Certification dated July 3, 1969 by the AFP
Controller,..." 2. The paragraph immediately succeeding in such petition then alleged: "12. Respondent Judge,
Honorable Guillermo P. Villasor, acted in excess of jurisdiction [or] with grave abuse of discretion amounting
to lack of jurisdiction in granting the issuance of an alias writ of execution against the properties of the Armed
Forces of the Philippines, hence, the Alias Writ of Execution and notices of garnishment issued pursuant
thereto are null and void." 3 In the answer filed by respondents, through counsel Andres T. Velarde and
Marcelo B. Fernan, the facts set forth were admitted with the only qualification being that the total award was
in the amount of P2,372,331.40. 4
The Republic of the Philippines, as mentioned at the outset, did right in filing this certiorari and prohibition
proceeding. What was done by respondent Judge is not in conformity with the dictates of the Constitution. .
It is a fundamental postulate of constitutionalism flowing from the juristic concept of sovereignty that the
state as well as its government is immune from suit unless it gives its consent. It is readily understandable
why it must be so. In the classic formulation of Holmes: "A sovereign is exempt from suit, not because of any
formal conception or obsolete theory, but on the logical and practical ground that there can be no legal right
as against the authority that makes the law on which the right depends." 5 Sociological jurisprudence supplies
an answer not dissimilar. So it was indicated in a recent decision, Providence Washington Insurance Co. v.
Republic of the Philippines, 6 with its affirmation that "a continued adherence to the doctrine of non-suability
is not to be deplored for as against the inconvenience that may be caused private parties, the loss of
governmental efficiency and the obstacle to the performance of its multifarious functions are far greater if
such a fundamental principle were abandoned and the availability of judicial remedy were not thus restricted.
With the well known propensity on the part of our people to go to court, at the least provocation, the loss of
time and energy required to defend against law suits, in the absence of such a basic principle that constitutes
such an effective obstacle, could very well be imagined." 7
This fundamental postulate underlying the 1935 Constitution is now made explicit in the revised charter. It is
therein expressly provided: "The State may not be sued without its consent." 8 A corollary, both dictated by

logic and sound sense from a basic concept is that public funds cannot be the object of a garnishment
proceeding even if the consent to be sued had been previously granted and the state liability adjudged. Thus
in the recent case ofCommissioner of Public Highways v. San Diego, 9 such a well-settled doctrine was
restated in the opinion of Justice Teehankee: "The universal rule that where the State gives its consent to be
sued by private parties either by general or special law, it may limit claimant's action 'only up to the
completion of proceedings anterior to the stage of execution' and that the power of the Courts ends when the
judgment is rendered, since government funds and properties may not be seized under writs of execution or
garnishment to satisfy such judgments, is based on obvious considerations of public policy. Disbursements of
public funds must be covered by the corresponding appropriation as required by law. The functions and public
services rendered by the State cannot be allowed to be paralyzed or disrupted by the diversion of public
funds from their legitimate and specific objects, as appropriated by law." 10 Such a principle applies even to
an attempted garnishment of a salary that had accrued in favor of an employee. Director of Commerce and
Industry v. Concepcion, 11 speaks to that effect. Justice Malcolm as ponente left no doubt on that score. Thus:
"A rule which has never been seriously questioned, is that money in the hands of public officers, although it
may be due government employees, is not liable to the creditors of these employees in the process of
garnishment. One reason is, that the State, by virtue of its sovereignty, may not be sued in its own courts
except by express authorization by the Legislature, and to subject its officers to garnishment would be to
permit indirectly what is prohibited directly. Another reason is that moneys sought to be garnished, as long as
they remain in the hands of the disbursing officer of the Government, belong to the latter, although the
defendant in garnishment may be entitled to a specific portion thereof. And still another reason which covers
both of the foregoing is that every consideration of public policy forbids it." 12
In the light of the above, it is made abundantly clear why the Republic of the Philippines could rightfully allege
a legitimate grievance.
WHEREFORE, the writs of certiorari and prohibition are granted, nullifying and setting aside both the order of
June 24, 1969 declaring executory the decision of July 3, 1961 as well as the alias writ of execution issued
thereunder. The preliminary injunction issued by this Court on July 12, 1969 is hereby made permanent.
Zaldivar (Chairman), Antonio, Fernandez and Aquino, JJ., concur.
Barredo, J, took no part.
Footnotes
1 The other respondents are the Provincial Sheriff of Rizal, the Sheriff of Quezon City, the Sheriff of the City of
Manila, the Clerk of Court, Court of First Instance of Cebu, P. J. Kiener Co., Ltd., Gavino Unchuan, and
International Construction Corporation.
2 Petition, pars. 7-11.
3 Ibid, par. 12.
4 Answer, par. III.
5 Kawananakoa v. Polyblank 205 U.S. 349 (1907).
6 L-26386, September 30, 1969, 29 SCRA 598.
7 Ibid, 601-602.
8 Article XV, Sec. 16.
9 L-30098, February 8, 1970, SCRA 616.
10 Ibid, 625. The opinion cited among others the following decisions: Merritt v. Government, 34 Phil. 311
(1916); Visayan Refining Co. v. Camus, 40 Phil. 550 (1919); Director of Commerce v. Concepcion, 43 Phil. 384
(1922); Belleng Republic, L-19856, Sept. 16, 1963, 9 SCRA 6; Republic v. Palacio, L-20322, May 29, 1968, 23
SCRA 899.
11 43 Phil. 384 (1922).
12 Ibid, 386.

Republic of the Philippines

SUPREME COURT
Manila
EN BANC
G.R. No. 79156 June 22, 1989
ISIDRO, ZENAIDA, IRWIN, ZENDA and DORNET, all surnamed ANIMOS, petitioners,
vs.
PHILIPPINE VETERANS AFFAIRS OFFICE, its Administrator, JUAN L. GACAD and THE COURT OF
APPEALS,respondents.
Duran and Associates for petitioners.
SARMIENTO, J.:
The Court grants this petition assailing the decision of the Court of Appeals. *
The case originated from a suit for mandamus commenced by the petitioners against the respondent, the
Philippine Veterans Affairs Office, to compel payment by the said respondent of full pension benefits,
retroactive to 1947, under Republic Act No. 65 as amended. The Regional Trial Court ** dismissed the case on
the ground of lack of jurisdiction. The petitioners then appealed to the respondent, the Court of Appeals,
which however rendered an affirmance.
The antecedent facts are stated by the Solicitor General. We quote:
Isidro Animos is a veteran of World War II, having been a member of the USAFFE and later of the guerilla
forces during the war.
On October 18, 1946, Republic Act No. 65 was approved, providing for a Bill of Rights for Officers and Enlisted
Men of the Philippine Army, Recognized and Deserving Guerilla Organizations, and Veterans of the Philippine
Revolution. Section 9 thereof provides:
SEC. 9. The persons mentioned in sections one and two hereof who are permanently incapacitated from work
owing to sickness, disease, or injuries sustained in line of duty, shall be given a life pension of fifty pesos a
month unless they are actually receiving a similar pension from other Government funds, and shall receive, in
addition, the necessary hospitalization and medical care.

Pursuant to the above provision, Animos filed with the Philippine Veterans Board (now Philippine Veterans
Affairs Office, or PVAO for short) a claim for disability pension benefit. Upon medical examination, Animos was
found to have incurred partial physical disability due to a gunshot wound, and was awarded 25% pension
benefit effective November 18, 1947, in the amount of P12.50 a month.
On June 21, 1957, Republic Act No. 1920 was approved amending Sec. 9 of Rep. Act No. 65, which increased
the life pension from P50.00 to P100.00, plus P10.00 a month for each unmarried minor child below 18 years
of age. Subsequently, on June 22, 1969, Rep. Act No. 5373 took effect which further amended said Sec. 9 and
increased the basic monthly pension from P100.00 to P200.00, plus P30.00 a month for the wife and P30.00 a
month for each unmarried child below 18 years.
It appears that on September 27, 1955, Animos filed an application for dependents' pension benefits. The
application was however disapproved on September 4, 1956, on the ground that Animos was not totally
incapacitated.
Upon the required re-evaluation of his partial physical disability, Animos was re-rated to be 30% disabled on
November 25, 1964 and was correspondingly granted a P30.00 monthly pension. Again, on August 4, 1970,
Animos was re-rated to be 50% disabled and was granted a P50.00 monthly pension. Reassessments made
on April 22, 1975 and June 11, 1982 showed that Animos' partial disability remained unchanged at 50%.
Animos' numerous written requests to be granted the maximum pension benefit as well as dependents'
pension benefits were all disapproved. Thus, on November 23, 1982, Animos, his wife and children filed a
petition for mandamus with the then Court of First Instance of Albay against the PVAO to compel that office to
increase his monthly pension, alleging that since the rules on disability rating of the latter are contrary to law,
Animos, who was granted a lifetime pension for his disability should be paid the maximum pension benefits,
including pension for his wife and minor children. 1
In dismissing the petition, the trial court held that "should petitioner's claim be upheld for the satisfaction of
veteran's benefits for the years up to the present, or a period of about 40 years, the defendant may not be in
a position, legally and budgetary wise, to comply with the court's award as sufficient treasury funds therefor
could only be appropriated for that purpose by the legislature," 2 and ruled that the petition was "in effect a
money claim against the government" 3 over which it did not have jurisdiction. In sustaining the trial court,
the Court of Appeals added that mandamus does not lie to interfere with discretion, and that the petitioner
had failed to exhaust administrative remedies.
On the question of procedure, the controlling precedents are Begoso v. Chairman, Philippine Veterans
Administration 4 and Teoxon v. Members of the Board of Administrators, Philippine Veterans
Administration, 5 in which we held:
1. The fourth assignment of error assails what it considers to be the failing of the lower court in not holding
that the complaint in this case is in effect a suit against the State which has not given its consent thereto. We
have recently had occasion to reaffirm the force and primacy of the doctrine of non-suability. It does not
admit of doubt, then, that if the suit were in fact against the State, the lower court should have dismissed the
complaint. Nor is it to be doubted that while ostensibly an action may be against a public official, the
defendant may in reality be the government. As a result, it is equally well-settled that where a litigation may
have adverse consequences on the public treasury, whether in the disbursements of funds or loss of property,
the public official proceeded against not being liable in his personal capacity, then the doctrine of nonsuability may appropriately be invoked. It has no application, however, where the suit against such a
functionary had to be instituted because of his failure to comply with the duty imposed by statute
appropriating public funds for the benefit of plaintiff or petitioner. Such is the present case.
The doctrine announced by us in Ruiz v. Cabahug finds relevance: "We hold that under the facts and
circumstances alleged in the amended complaint, which should be taken on its face value, the suit is not one
against the Government, or a claim against it, but one against the officials to compel them to act in
accordance with the rights to be established by the contending architects, or to prevent them from making
payment and recognition until the contending architects have established their respective rights and interests
in the funds retained and in the credit for the work done." As a matter of fact, in an earlier case where we
sustained the power of a private citizen claiming title to and right of possession of a certain property to sue
an officer or agent of the government alleged to be illegally withholding the same, we likewise expressed this
caveat: "However, and this is important, where the judgment in such a case would result not only in the
recovery of possession of the property in favor of said citizen but also in a charge against or financial liability
to the Government, then the suit should be regarded as one against the government itself, and,
consequently, it cannot prosper or be validly entertained by the courts except with the consent of said
Government.
2. Nor is the third assignment of error to the effect that the lower court did not require appellee to exhaust his
administrative remedies before coming to court any more persuasive. An excerpt from the leading case
of Gonzales v. Hechanova, the opinion being penned by the present Chief Justice, clearly demonstrates why
appellants' argument in this respect is unavailing: "Respondents assail petitioner's right to the reliefs prayed
for because he 'has not exhausted all administrative remedies available to him before coming to court. We
have already held, however, that the principle requiring the previous exhaustion of administrative remedies is
not applicable 'where the question in dispute is purely a legal one', or where the controverted act is patently
illegal or was performed without jurisdiction or in excess of jurisdiction, or where the respondent is a
department secretary, whose acts as an alter-ego of the President bear the implied or assumed approval of
the latter, unless actually disapproved by him, or where there are circumstances indicating the urgency of
judicial intervention." The Gonzales doctrine, it is to be noted, summarized the views announced in earlier
cases. The list of subsequent cases reiterating such a doctrine is quite impressive. To be more specific, where
there is a stipulation of facts, as in this case, the question before the lower court being solely one of law and
on the face of the decision, the actuation of appellants being patently illegal, the doctrine of exhaustion of
administrative remedies certainly does not come into play. 6
Mandamus therefore lies, and failure to exhaust remedies is no defense against payment.
We come to the merits.
The denial of the petitioner's claim was predicated on the finding that his disabilities were, based on the
respondent's "Rules on Disability Ratings", partial rather than total, a condition that precludes payment of
maximum pension benefits. The petitioner submits that the very rating system adopted by the respondent
veterans' office is null and void.
The applicable provision is Section 9 of Republic Act No. 65, as amended, as follows:
SEC. 9. The persons mentioned in sections one and two hereof who are permanently incapacitated from work
owing to sickness, disease, or injuries sustained in line of duty, shall be given a life pension of two hundred
pesos a month, and thirty pesos a month for his wife and each of his unmarried minor children below

eighteen years of age, unless they are actually receiving a similar pension from other Government funds, and
shall receive, in addition, the necessary hospitalization and medical care. 7
In Begoso, supra, as well as Teoxon, supra, this Court held that bare rules promulgated by the Philippine
Veterans Administration, now the Philippine Veterans' Affairs Office, cannot overrule the mandate of statute,
on the fundamental principle that "an administrative agency 'cannot amend an act of Congress.' " 8 In the
case at bar, there is no gainsaying the fact that the petitioner had been enjoying pension benefits, albeit
partial, pursuant to the provisions of Section 9, supra, upon the premise that he was qualified thereto. Hence,
the Government must pay him maximum pension benefits. The fact that his injuries, based on the
respondent's ratings, have been classified as "partial" cannot erase the equal fact that he is "permanently
incapacitated" under the law. Section 9 refers simply to "permanent incapacity" and makes no distinctions as
a condition sine qua non to compensability. It does not require such an incapacity to be total or partial and
neither does it authorize the PVAO to make a gradation of injuries. It is axiomatic that where the law does not
distinguish, let no one distinguish. The classifications or ratings formulated by the respondent body amount to
an amendment of the law at the administrative level, and to that extent, they are null and void.
The case of Board of administrators, PVA v. Agcaoili, 9 which the Solicitor General invokes does not apply. In
that case, we denied pension for the plain reason that the applicant was not permanently incapacitated. But
we did not, consequently, uphold, expressly or by implication, the PVAO's rules in said case, the applicant
being disqualified in any event. If we did, it was because their validity was not specifically challenged.
Needless to state, we did not abandon either Begoso or Teoxon therein.
It is pure conjecture to say that the petitioner "had no more service-connected disability to hang on and
should not have been denied continued disability pension were it not for the compassionate regard by
respondents to the veterans of World War II." 10 The fact of the matter is that the respondent had consistently
paid the petitioner pension benefits for the past forty years, meaning to say that he was (is) entitled thereto.
It would be an act of injustice to deny him now what, by strong constitutional presumptions, is due him.
Neither is it a matter of charity or compassion. The PVAO is vested with no discretion to deny payment where
payment is due and conversely, to pay when payment is not due.
"The State," declares the Constitution (1973), "shall establish, maintain, and ensure adequate social services
in the field of education, health, housing, employment, welfare, and social security to guarantee the
enjoyment by the people of a decent standard of living." 11 Under the present Constitution, the State's
concern for war veterans finds an even more emphatic expression:
SEC. 9. The State shall promote a just and dynamic social order that will ensure the prosperity and
independence of the nation and free the people from poverty through policies that provides adequate social
services, promote full employment, a rising standard of living, and an improved quality of life for all . 12
xxx xxx xxx
SEC. 7. The State shall provide immediate and adequate care, benefits, and other forms of assistance to war
veterans and veterans of military campaigns, their surviving spouses and orphans. Funds shall be provided
therefor and due consideration shall be given them in the disposition of agricultural lands of the public
domain and, in appropriate cases, in the utilization of natural resources. 13
In the face of clear State policy, the burden is consequently on the Government to show that the applicant is
not qualified for pension. The applicant enjoys a presumed qualification upon a simple demonstration that he
had fought in the war and had suffered a permanent incapacity as a result thereof .
The records show that the petitioner suffered various injuries, in his ear arising from a bombing in Atimonan,
Quezon (where elements of the Japanese Imperial Army landed, after they had established a beachhead at
Vigan, Ilocos Sur, two days after the Pearl Harbor bombing which commenced World War II in the Pacific area),
and other parts of his body due to bullets and bayonets. 14 There is no showing that his wounds have since
healed. Hence, they are "permanent" within the intendment of the veterans' Bill of Rights. As we said, the fact
that they are partial rather than total is of no moment. "Permanent incapacity", under Republic Act No. 65,
contemplates an injury or ailment sustained in battle, permanent or incurable in character, and such that it
impedes nominal work. But the statute does not require that the veteran be utterly unable to work by reason
of the injury or ailment, or otherwise, "totally disabled". To say that it does is to reduce the law into a simple
social security measure, similar to workmen's compensation, rather than an act of gratitude by the State to
the brave veterans of the last two wars in the country.
Further, to say that Republic Act No. 26 applies only to veterans totally disabled for work is to make the Act
the veterans' sole source of income (by virtue of the prohibition against multiple compensations under
Sections 9 and 10). Certainly, P230.00 a month 15 the amount of pension under the Act is hardly
"compensation" for any common tao, let alone a totally disabled citizen. This could not have been the intent
of the legislature.
The clear implication is that the PVAO may not rate disabilities in the same manner they are evaluated under
our laws on employees' compensation. So long as a veteran's incapacity is permanent, the veteran is entitled
to payment.
Alleged budgetary constraints or lack of appropriation are no obstacles to payment. In Espaol v. Chairman,
Philippine Veterans Administration, 16 we ordered "the restoration of [the petitioner's] monthly pension and
her children's monthly dependent's pension provided for by R.A. No. 65, as amended, the coverage of which
Congress had already appropriated funds [for]." 17 The instant case presents a similar situation. In asking for
retroactive pension, what the petitioner in reality seeks is the "restoration" of full pension benefits long
denied him on account of the PVAO's improper application of Republic Act No. 65, and the funds for which
have been undoubtedly appropriated.
To the extent that this decision is incompatible with our decision in PVAO vs. Asterio Q. Tamayo, promulgated
on July 29, 1988, G.R. No. 74322, the latter is therefore considered changed.
The war veterans loom as the forgotten heroes of this generation. This is the reality both unfortunate and
tragic. What has been lost on many is the fact that it was because of their bravery and sacrifice that we are a
free people today.
They stand as shining mementos of our struggle for emancipation from the colonial yoke With crude boloes
and primitive spears but with abundant courage in their hearts they fought the white man's arsenal of rifles
and cannons, overcame it, and finished a revolution. They fought with no anticipation of a prize, reward, or
medal, but in obedient and unquestioning response to duty to country.
It was they who, four decades later, would lead the resistance against the Japanese invaders. Poorly trained,
fed, and equipped but encouraged by a firmness of will, they offered their lives and many forfeited theirs
amid superior firepower from the enemy. Like the revolutionaries, they were not conscripts but volunteers.
And like them, they fought without any expectation of laurels or citations but in order that liberty shall dawn
upon the land.

The Court strongly stresses that Republic Act No. 65, the veterans' Bill of Rights, was not meant to
compensate alone veterans for the wounds of war. It is, above all, a gesture of gratitude on the part of the
State and a tribute to their gallantry and selfless love of country. Though valor cannot be measured in terms
of money, money is the best we can offer for the moment. And if we cannot do more, let us do no less. This
case should not have indeed reached this Court had not insensitivity gotten the better of Government
functionaries.
WHEREFORE, the petition is GRANTED.
The respondent, the Philippine Veterans Affairs Office, is ORDERED to pay the petitioner, his spouse, and
qualified children, full pension benefits plus such other and further increments as may be provided for by law,
effective November 18, 1947. No costs.
SO ORDERED.
Melencio-Herrera, Gutierrez, Jr., Cruz, Paras, Gancayco, Padilla, Bidin, Cortes, Grio-Aquino, Medialdea and
Regalado, JJ., concur.
Separate Opinions
FERNAN, C.J., dissenting:
Without detracting from the great honor and gratitude our nation owes its war heroes and veterans I regret
that I am unable to concur with the opinion expressed by the majority relative to the power of the Philippine
Veterans Affairs Office PVAO to rate the disability or incapacity from work of war veterans seeking entitlement
to the pension benefits provided under Republic Act No. 65 and its amendments.
As conceded in my earlier ponencia in G.R. No. 74322 entitled "The Philippine Veterans Affairs Office vs.
Asterio Q. Tamayo", promulgated on July 29, 1988, R.A. No. 65 itself did not contain a disability rating
schedule. However, it did repose upon the Philippine Veterans Board, predecessor of the PVAO, rulemaking
powers which by their tenor are sufficiently broad and encompassing to include this authority to rate
disabilities. Thus, from its enactment in 1946, or for more than forty (40) years, the governmental agency
specially created and charged with implementing the provisions of R.A. No. 65 and its amendments, from the
Philippine Veterans Board, the Philippine Veterans Administration to the present PVAO had consistently done
so in accordance with the assailed disability rating schedule. Although technically not binding and controlling
on the courts, the construction given by the agency or entity charged with the enforcement of a statute
should be given great weight and respect (In re Allen, 2 Phil. 630, 640), particularly so if such construction, as
in the case at bar, has been uniform and consistent, and has been observed and acted on for a long period of
time (Molina vs. Rafferty 38 Phil. 167; Madrigal vs. Rafferty 38 Phil. 414; Philippine Sugar Central vs. Collector
of Customs, 51 Phil. 143).
Neither should we lose sight of the fact that the basic law, R.A. No. 65, has undergone a number of
amendments, without the legislature deeming it wise or proper to discontinue or proscribe this practice of the
implementing agency of rating the veterans' disabilities. This, to my mind, is a strong indication, nay,
conclusive proof that the construction given by the PVAO and its predecessors is in accord with the legislative
intent, for a basic rule in statutory construction is that the legislature is presumed to know the effect which
statutes originally had, and by re-enactment to intend that they should again have the same effect (In re
McCullough Dick, 39 Phil. 41). There is implied legislative approval by the legislature's failure to change a
longstanding administrative construction (Asturias Sugar Central, Inc. vs. Commissioner of Customs, 29 SCRA
617).
It is regretable that the majority has missed the wisdom of the construction given by the veterans board to
Section 9 of R.A. No. 65, and the undeniable fact that it is through the veterans board's authority to rate
disabilities that the spirit and intent of the law are being given their most beneficial effects. Note that Section
9 of R.A. No. 65 uses the phrase "permanently incapacitated from work" as the qualifying condition for the full
pension benefits provided thereunder. As stated in the case of Board of Administrators vs. Agcaoili, 58 SCRA
72, these words "have a restrictive signification which cannot be conveniently disregarded." An amendment,
R.A. No. 5753 * enacted on June 21, 1969, employs the equally restrictive term "totally disabled". The literal
import flowing from the interchangeable and synonymous use of the phrases "permanently incapacitated
from work" and "total disability", is that the legislature intended to give the full amount of pension benefits
provided under the law only to war veterans who are permanently and totally unable to engage in any gainful
occupation or employment by reason of the sickness, disease or injury sustained in line of duty. The veterans
board could have easily interpreted and applied the law in this wise, but did not. It is to its great credit that
giving due consideration to the spirit and intent of the law, rather than adhering to its letters, the veterans
board correctly construed the law as setting a maximum amount of pension benefits for the worst kind or
condition of incapacity from work (i.e., permanent), and leaving to the administering agency thru its ample
rule-making powers the task of providing for proportional benefits for corresponding varying degrees of
incapacity or disability. Thus, it is thru the now assailed rating power of the veterans board that less than
permanently incapacited war veterans are enjoying the benefits, albeit partial, of the law, which a literal
reading thereof would seem to preclude.
In what it probably perceives as a most charitable and generous move, the majority lightly casts aside the
construction given and followed by the veterans board for more than 40 years. The majority likewise
completely failed to make the very crucial and significant distinction between "permanent
incapacity" and "permanent incapacity from work", and in the process, unwittingly gave rise to an absurd, if
not inequitable situation, in that all war veterans are deemed entitled to the same amount of pension benefits
regardless of the nature and effect of the sickness, disease or injury sustained in line of duty. Certaintly, the
legislature could not have intended such patent inequality. It is safer and more logical to assume that the law
intended to give equal benefits to those similarly situated, a circumstance best attained through the adoption
by the veterans board of a standard classification of disability or incapacity.
Moreover, to entitle all war veterans to the full amount of pension benefits mentioned in the law regardless of
the extent of their disability would involve a staggering sum of money. While there is no gainsaying that the
amount prescribed by law is far from adequate, we must, however, realize that the Philippines is a relatively
poor country. It wants to reward its war heroes and veterans for their valor and gallantry but harsh economic
reality deters it from adequately doing so. It does what it can under the circumstances, without the Judiciary
adding to its financial troubles and burden through what I firmly believe to be an unwarranted interpretation
of a law.
Feliciano, J., concur.
NARVASA, J., dissenting:

I dissent and vote to adhere to the ruling in G.R. No. 74322 (Phil. Veterans Affairs Office v. Tamayo, July 29,
1988.)
Separate Opinions
FERNAN, C.J., dissenting:
Without detracting from the great honor and gratitude our nation owes its war heroes and veterans I regret
that I am unable to concur with the opinion expressed by the majority relative to the power of the Philippine
Veterans Affairs Office PVAO to rate the disability or incapacity from work of war veterans seeking entitlement
to the pension benefits provided under Republic Act No. 65 and its amendments.
As conceded in my earlier ponencia in G.R. No. 74322 entitled "The Philippine Veterans Affairs Office vs.
Asterio Q. Tamayo", promulgated on July 29, 1988, R.A. No. 65 itself did not contain a disability rating
schedule. However, it did repose upon the Philippine Veterans Board, predecessor of the PVAO, rulemaking
powers which by their tenor are sufficiently broad and encompassing to include this authority to rate
disabilities. Thus, from its enactment in 1946, or for more than forty (40) years, the governmental agency
specially created and charged with implementing the provisions of R.A. No. 65 and its amendments, from the
Philippine Veterans Board, the Philippine Veterans Administration to the present PVAO had consistently done
so in accordance with the assailed disability rating schedule. Although technically not binding and controlling
on the courts, the construction given by the agency or entity charged with the enforcement of a statute
should be given great weight and respect (In re Allen, 2 Phil. 630, 640), particularly so if such construction, as
in the case at bar, has been uniform and consistent, and has been observed and acted on for a long period of
time (Molina vs. Rafferty 38 Phil. 167; Madrigal vs. Rafferty 38 Phil. 414; Philippine Sugar Central vs. Collector
of Customs, 51 Phil. 143).
Neither should we lose sight of the fact that the basic law, R.A. No. 65, has undergone a number of
amendments, without the legislature deeming it wise or proper to discontinue or proscribe this practice of the
implementing agency of rating the veterans' disabilities. This, to my mind, is a strong indication, nay,
conclusive proof that the construction given by the PVAO and its predecessors is in accord with the legislative
intent, for a basic rule in statutory construction is that the legislature is presumed to know the effect which
statutes originally had, and by re-enactment to intend that they should again have the same effect (In re
McCullough Dick, 39 Phil. 41). There is implied legislative approval by the legislature's failure to change a
longstanding administrative construction (Asturias Sugar Central, Inc. vs. Commissioner of Customs, 29 SCRA
617).
It is regretable that the majority has missed the wisdom of the construction given by the veterans board to
Section 9 of R.A. No. 65, and the undeniable fact that it is through the veterans board's authority to rate
disabilities that the spirit and intent of the law are being given their most beneficial effects. Note that Section
9 of R.A. No. 65 uses the phrase "permanently incapacitated from work" as the qualifying condition for the full
pension benefits provided thereunder. As stated in the case of Board of Administrators vs. Agcaoili, 58 SCRA
72, these words "have a restrictive signification which cannot be conveniently disregarded." An amendment,
R.A. No. 5753 * enacted on June 21, 1969, employs the equally restrictive term "totally disabled". The literal
import flowing from the interchangeable and synonymous use of the phrases "permanently incapacitated
from work" and "total disability", is that the legislature intended to give the full amount of pension benefits
provided under the law only to war veterans who are permanently and totally unable to engage in any gainful
occupation or employment by reason of the sickness, disease or injury sustained in line of duty. The veterans
board could have easily interpreted and applied the law in this wise, but did not. It is to its great credit that
giving due consideration to the spirit and intent of the law, rather than adhering to its letters, the veterans
board correctly construed the law as setting a maximum amount of pension benefits for the worst kind or
condition of incapacity from work (i.e., permanent), and leaving to the administering agency thru its ample
rule-making powers the task of providing for proportional benefits for corresponding varying degrees of
incapacity or disability. Thus, it is thru the now assailed rating power of the veterans board that less than
permanently incapacited war veterans are enjoying the benefits, albeit partial, of the law, which a literal
reading thereof would seem to preclude.
In what it probably perceives as a most charitable and generous move, the majority lightly casts aside the
construction given and followed by the veterans board for more than 40 years. The majority likewise
completely failed to make the very crucial and significant distinction between "permanent
incapacity" and "permanent incapacity from work", and in the process, unwittingly gave rise to an absurd, if
not inequitable situation, in that all war veterans are deemed entitled to the same amount of pension benefits
regardless of the nature and effect of the sickness, disease or injury sustained in line of duty. Certaintly, the
legislature could not have intended such patent inequality. It is safer and more logical to assume that the law
intended to give equal benefits to those similarly situated, a circumstance best attained through the adoption
by the veterans board of a standard classification of disability or incapacity.
Moreover, to entitle all war veterans to the full amount of pension benefits mentioned in the law regardless of
the extent of their disability would involve a staggering sum of money. While there is no gainsaying that the
amount prescribed by law is far from adequate, we must, however, realize that the Philippines is a relatively
poor country. It wants to reward its war heroes and veterans for their valor and gallantry but harsh economic
reality deters it from adequately doing so. It does what it can under the circumstances, without the Judiciary
adding to its financial troubles and burden through what I firmly believe to be an unwarranted interpretation
of a law.
Feliciano, J., concur.
NARVASA, J., dissenting:
I dissent and vote to adhere to the ruling in G.R. No. 74322 (Phil. Veterans Affairs Office v. Tamayo, July 29,
1988.)
Footnotes
* CA-G.R. SP No. 10496, Eleventh Division: Francisco, Ricardo, J., Lombos de la Fuente, Lorna and Benipayo,
Alfredo, JJ., Concurring.
** Regional Trial Court, Fifth Judicial Region, Branch VII, Legaspi City; Hon. Domingo Reyes, Presiding Judge.
1 Rollo, 68-71.
2 Id., 18.
3 Id.
4 No L-25916, April 30, 1970, 32 SCRA 466.
5 No. L-25619, June 30, 1970, 33 SCRA 585.

6 Begoso v. Chairman, Philippine Veterans Administration, 471474. With respect to the defense of
prescription, see Espanol v. Chairman, Philippine Veterans Administration, No. L-44616, June 29, 1985, 137
SCRA 314.
7 II PPGS (Rev. Ed.) 468; emphasis in original.
8 Teoxon v. Members of the Board of Administrators, Philippine Veterans Administration, 589.
9 No. L-38129, July 23, 1974, 58 SCRA 72.
10 Rollo, Id., 32; emphasis supplied.
11 CONST. (1973), art. II, sec. 7.
12 CONST. (1987), art. II, sec. 9.
13 Supra, art. XVI, sec. 7.
14 Rollo, Id., 16.
15 P200.00 a month for the veteran and P30.00 a month for his spouse for each unmarried child.
16 Supra.
17 Supra, 320.
Fernan, C.J:
* RA. 5753 is entitled, "AN ACT FURTHER AMENDING REPUBLIC ACT NUMBER SIXTY FIVE, AS AMENDED, BY
INCREASING THE PENSION OF TOTALLY DISABLED VETERANS OF WORLD WAR II AND THEIR LIVING
DEPENDENTS."

Republic of the Philippines

SUPREME COURT
Manila
EN BANC

G.R. No. L-27299 June 27, 1973

QUIRICO DEL MAR, petitioner and appellee,
vs.
THE PHILIPPINE VETERANS ADMINISTRATION, respondent and appellant.
Quirico del Mar in his own behalf.
Office of the Solicitor General Felix V. Makasiar, First Assistant Solicitor General Esmeraldo Umali and Solicitor Eulogio
Raquel Santos for respondent appellant.

CASTRO, J.:
On June 20, 1964, Quirico del Mar (hereinafter referred to del Mar) filed with the Court of First Instance of Cebu petition
for mandamus (civil case R-8465) against the Philippine Veterans Administration (hereinafter referred to the PVA to
compel the latter to continue paying him monthly life pension of P50 from the date of its cancellation in March 1950 to
June 20, 1957, and thereafter, or from June 22 1957 his monthly life pension, as increased by Republic Act 1920, 1 of
P100 and to pay to him as well the monthly living allowance of P10 for each of his unmarried minor children below
eighteen years of age, 2 pursuant to the said Republic Act 1920 which took effect on June 22, 1957. Del Mar also asked
for compensatory, moral and exemplary damages.
In his petition below, del Mar averred that he served during World War II as chief judge advocate of the Cebu Area
Command (a duly recognized guerrilla organization) with the rank of major; that he subsequently obtained an
honorable discharge from the service on October 20, 1946 on a certificate of permanent total physical disability; that
upon proper claim presented and after hearing and adjudication, the Philippine Veterans Board (the PVA's predecessor
granted him a monthly life pension of P50 effective January 28, 1947; that in March 1950, the said Board discontinued
payment of his monthly life pension on the ground that his receipt of a similar pension from the United States
Government, through the United States Veterans Administration, by reason of military service rendered in the United
States Army in the Far East during World War II, precluded him from receiving any further monthly life pension from the
Philippine Government; that he wrote the said Board twice demanding that it continue paying his monthly life pension,
impugning the cancellation thereof as illegal; and that his demands went unheeded.
The PVA reiterated its contention that del Mar's receipt of a similar pension from the United States Government
effectively barred him from claiming and receiving from the Philippine Government the monthly life pension granted him
as well as the monthly allowances he claimed for his five living unmarried minor children below eighteen years of age.
The PVA also asserted that it is discretionary on its part to grant or discontinue the pension sought by del Mar. In
addition, it alleged that the action of del Mar was premature because of his failure to exhaust administrative remedies
before invoking judicial intervention, and that the court a quo was without jurisdiction to try the case as del Mar demand
partakes of a money claim against the PVA a mere agency of the Philippine Government and, in effect, of a suit
against the Government which is not suitable without its consent. The PVA thus prayed for the dismissal of the petition.
After due trial, the court a quo rendered judgment upholding del Mar claims. In its decision dated February 27, 1965,
the court (1) ordered the PVA to pay to del Mar his monthly life pension corresponding to the period from April 1950 to
May 1957 at the rate of P50 a month, adding up to P4,334.86, and his monthly life pension corresponding to the period
from June 22, 1957 to February 1965 at the amount of P100 a month totalling P9,200, and thereafter to continue to pay

his monthly life pension at the rate of P100. a month; (2) directed del Mar to file with the PVA the corresponding written
application for the payment to him of the monthly living allowance of P10 for each of his five living unmarried minor
children from June 22, 1957; and ordered the PVA to give due course to the written application as soon as del Mar shall
have filed the same with it, and once approved, to make the necessary payment of the accumulated unpaid living
allowances due to each of the said children from June 22, 1957 as well as the current ones until each one of them
ceases to be entitled to the same; and (3 directed the PVA in the event of unavailability of funds to pay the claims
aforementioned, to set aside funds from such as intended to pay the veterans' living pensions, or to cause the same to
be appropriated in its budget in order to comply with the judgment. For lack of basis, the court a quo omitted to pass
judgment on del Mar's claim for moral and exemplary damages.
Hence, the present appeal by the PVA.
The PVA alleges that the court a quo erred (1) in not holding itself without jurisdiction to try civil case R-8465; (2) in no
finding as premature the petition for mandamus filed by del Mar due to the failure of the latter to exhaust available
administrative remedies before seeking judicial intervention; (3) in declaring null and void section 6 of PVA Regulation
No. 2 relied upon by it in discontinuing the monthly life pension of del Mar since March 1950; (4) in not finding it
discretionary on the part of the PVA to grant or discontinue the said suspension; (5) in ordering it to pay to del Mar the
amounts stated in the judgment; and (6) in ordering it to give due course to and approve the application which the said
court directed del Mar to file for the payment to the latter of the monthly living allowance for each of his living unmarried
minor children below eighteen years of age.
This appeal raises several questions which will be discussed in seriatim.
1. The PVA argues that the court a quo was without jurisdiction to try civil case R-8465 because it involves a money
claim against the said PVA a mere agency of the Government performing governmental functions with no juridical
personality of its own and, in reality, partakes of an action against the Philippine Government which is immune from
suit without its consent, citing this Court's observation in Republic of the Philippine vs. Ramolete and Del Mar, 3 to wit:
....a charge against the Government where the money involved is part of the public funds, is a suit
against the Government, and the happenstance that the action is directed against the PVA as an entity
and not against the Republic of the Philippines is of no moment. Perforce, the Republic of the
Philippines, on matters of administration of all benefits due to the veterans of revolutions and wars, and
to their heirs and beneficiaries, acts and has to act through its agency and instrumentality, the PVA. The
suit should therefore be regarded as one against the Republic of the Philippines; the PVA is therefore
exempt from the filing of an appeal bond.
The PVA labors under a muddled and mistaken appreciation of the aforecited observation. This Court stated in precise
language the sole issue for resolution in that case, thus:
Is the PVA exempt from the filing of an appeal bond? To resolve this issue, we must initially determine
whether the PVA is an agency or instrumentality of the Republic of the Philippines, and, in the
affirmative, whether it exercises governmental functions.
Indeed, the decisive point in the aforementioned case related to the status of the PVA as an agency or
instrumentality of the Republic of the Philippines exercising governmental functions as to be entitled to
exemption from the filing of the appeal bond per section 16 of Rule 141 of the Rules of Court, not to the
nature of the claim sought to be enforced by the private respondent therein (del Mar) against the said
PVA. Thus, in the said case, this Court made a lengthy disquisition on the history, development and
organization of the PVA to show conclusively that the same is an entity or agency of the Republic of the
Philippines performing governmental functions. True, this Court referred to the claim of the private
respondent therein as "a claim for a sum of money against the Government, which claim, if adjudged
finally to be meritorious, would render the Republic of the Philippines liable therefor," since the funds
from which the claim was to be satisfied were funds appropriated by Congress for the PVA; but this
Court properly and advisedly omitted any study and consideration of the question of suitability or nonsuitability of the Government in connection therewith.
As a general proposition, the rule well-settled in this jurisdiction on the immunity of the Government from suit
without its consent holds true in all actions resulting in "adverse consequences on the public treasury, whether in the
disbursements of funds or loss of property." 4 Needless to state, in such actions, which, in effect, constitute suits against
the Government, the court has no option but to dismiss them. Nonetheless, the rule admits of an exception. It finds no
application where a claimant institutes an action against a functionary who fails to comply with his statutory duty to
release the amount claimed from the public funds already appropriated by statute for the benefit of the said
claimant. 5 As clearly discernible from the circumstances, the case at bar falls under the exception.
2. The second question posed by the PVA relates to del Mar alleged failure to exhaust administrative remedies before
resorting to court action. Suffice it to state that where a case as in the present controversy involves a question solely
of a legal nature, there arises no need for the litigant to resort to all administrative remedies available to him before
seeking judicial relief. 6
3. The validity of section 6 of Regulation No. 2 of the "Rules and Regulations on Veterans' Benefits" adopted by the
PVA constitutes the core of the present controversy. The said section 6 reads as follows:

SEC. 6. Effect of receipt of USVA pension benefit termination, reduction. An award of a similar
disability compensation from the US Veterans Administration shall be a ground for the cancellation of a
disability pension granted under the Regulation: Provided, however, That if and while the disability
compensation awarded by the US Veterans Administration is less than the pension granted hereunder,
the difference in amount shall be assumed and paid by the PVA: Provided, further, That upon proper
application, the disability award previously cancelled may be restored upon the termination of the US
Veterans Administration award if the cause of such termination is due to negative military service report
of the pensioner certified by the US Department of the Army and not for any other valid
cause: Provided, finally, That the veteran is medically determined to be still suffering from the disability
for which he was previously awarded a pension. Payment of pension thus restored shall take effect or
shall commence only from the date of approval of restoration and when funds become available.
Pursuant to the foregoing, the PVA cancelled and discontinued the monthly life pension of del Mar reasoning that the
latter's receipt of a similar pension from the United States Government precluded his enjoying any like benefit from the
Philippine Government. The PVA avers that it adopted the aforequoted section 6 in order to carry out and implement
section 9 of Republic Act 65, as amended, 7 particularly its excepting clause. Said section 9 reads:
SEC. 9. The persons mentioned in sections one and two hereof who are permanently incapacitated from
work owing to sickness, disease or injuries sustained in line of duty, shall be given a life pension of one
hundred pesos a month, and ten pesos a month for each of his unmarried minor children below eighteen
years of age, unless they are actually receiving a similar pension from other Government funds, and shall
receive, in addition, the necessary hospitalization and medical care. 8

The PVA reads the phrase "from other Government funds" in the excepting clause of the aforecited provision as
necessarily including funds of the United States Government. And without question, the pension del Mar receives from
the United States Veterans Administration comes from the funds of the United States Government.
On the other hand, del Mar avers that section 6 of Regulation No. 2 illegally effects the suspension of the operation of
section 9 of Republic Act 65, as amended, and argues that under section 20 9 of Republic Act 65, as amended, the
power suspend the payment of the monthly life pension awarded to disabled veteran belongs exclusively to the
President of the Philippines, not to the PVA which, in the case at bar, illegally arrogated unto itself the said power.
Furthermore, del Mar states, the PVA "deliberately misinterprets" the phrase from other Government funds" in
extending its scope to include United States Government funds.
The principle recognizing the necessity of vesting administrative authorities with the power to promulgate rules and
regulations to implement a given statute and to effectual its policies, provided such rules and regulations conform to the
terms and standards prescribed by the statute as well purport to carry into effect its general policies, constitutes well
established doctrine in this jurisdiction. 10 In Teoxon v. Members of the Board of Administrators, Philippine Veterans
Administration, suprea, this Court fittingly stated: .
... 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. Its terms must be followed. The statute requires adherence to, not departure
from, its provisions. No deviation is allowable.
Section 11 of Republic Act 2665 11 empowers the PVA to adopt rules and regulations, thus:
SEC. 11. Policies, rules and regulations. Subject to existing laws, the Administration shall have the
power to promulgate and issue rules and regulations as may be found necessary to govern its
operations and to carry out that aims and purposes of this Act and of all other laws to be administered
by the Administration.
Pursuant to this rule making authority, the PVA allegedly' to implement section 9 of Republic Act 65,
as amended promulgated its "Rules and Regulations on Veterans' Benefits," section 6 of Regulation No.
2 of which cancels the disability pension granted if the beneficiary receives a similar compensation from
the United States Veterans Administration. In effect, the PVA by adopting section 6 of Regulation No. 2,
suspended the operation of section 9' of Republic Act 65, as amended. This, Republic Act 65, as
amended, forbids the PVA to do for it expressly authorizes only the President of the Philippines to
suspend the operation of any of its provisions "if and when the Congress of the United States approves
the pending GI Bill of Rights applicable to the Philippines the provisions of which are identical or similar
to the provisions of this Act." Clearly then, section 6 of Regulation No. 2 not only negates the very spirit
behind section 9 of Republic Act 65, as amended, but also contravenes the express mandate of section
20 thereof.
The PVA's pretense that del Mar case falls under the clause of section 9 of Republic Act 65, as amended, which
excepts those who "are actually receiving a similar pension from other Government funds" from the coverage of said
section 9 predicated upon its interpretation that the phrase other Government funds" includes funds of the United
States Government fails to persuade this Court as a valid argument to justify its cancellation of del Mar monthly life
pens Section 9 of Republic Act 65, as amended, in providing for the excepting clause, obviously intends to prevent the
receipt the same beneficiary of concurrent or multiple pensions benefits similar to each other in nature and basis,

although coursed through different departments or agencies, but paid out of the funds of the same Government. Any
contrary interpretation resulting in the derogation of the interests of the beneficiary who likewise receives a similar
pension paid out funds of other Governments, conflicts with the establish axiom ordaining the construction of pension
laws of war veterans in favor of those seeking their benefits.
The record of the case at bar being completely bereft of any indication to show the suspension by the President of the
Philippines pursuant to section 20 of Republic Act 65, amended of the operation of any of the provisions of the
said statute, this Court perforce must uphold del Mar claims.
4. The rest of the assigned errors relate to the allege undue interference by the court a quo with the purely
discretionary functions of the PVA in the matter of granting discontinuing the pension benefits.
The law concedes to administrative bodies like the PVA the authority to act on and decide claims and applications
in accordance with their judgment, in the exercise of their adjudicatory capacity. Because of their acquired expertise in
specific matters within the purview of their respective jurisdictions, the findings of these administrative bodies merit not
only great weight but also respect and finality. "There is limit, however, to such a deference paid to the actuations or
such bodies, Clearly, where there has been a failure to interpret and apply the statutory provisions in question, judicial
power should assert itself. Under the theory of separation of power it is to the judiciary, and to the judiciary alone, that
the final say on questions of law in appropriate cases coming before it is vested." 12
All told, no roadblock stands in the way of del Mar's demand for the continuance of his monthly life pension.
In view, however, of the further amendment by Congress of section 9 of Republic Act 65, as amended, through
Republic Act 5753 the provisions of which took effect on June 21, 1969 there arises the need to modify the
judgment a quo in order to make it conform to the said statute as it now stands. Republic Act 5753, in further amending
section 9 of Republic Act 65, as amended, grants every totally disabled veteran of World War II "a life pension of two
hundred pesos a month, and thirty pesos a month for his wife and each of his unmarried minor children below eighteen
years of age."
ACCORDINGLY, this Court adjudges the appellee Quirico del Mar entitled to his life pension (1) at the rate of P50 a
month effective as of April 1950 to May 1957, per Republic Act 65; (2) at the rate of P100 a month effective as of June
22, 1957 to May 1969, per Republic Act 65 as amended by Republic Act 1920; and (3) at the rate of P200 a month
effective as of June 21, 1969, per Republic Act 65 as further amended by Republic Act 5753. This Court directs the
appellant Philippine Veterans Administration to compute and then to pay to the appellee del Mar his past and
accumulated monthly life pension at the aforementioned statutory rates.
Regarding the monthly living allowance the appellee del Mar asks for each of his five "living unmarried minor children
below eighteen years of age," it appearing that he has not filed any proper application therefor with the appellant PVA
but simply included them in his claim for the restoration of his discontinued monthly life pension, the appellee del Mar
may, if he so desires, comply with section 15 of Republic Act 65, as amended, which requires that "[A]ny person who
desires to take advantage of the rights and privileges provided for in this Act should file his application" with the
Philippine Veterans Administration, and the latter is hereby ordered to consider and pass upon the merits of such
application, if filed, particular reference to the entitlement qualifications of intended beneficiaries. No pronouncement as
to costs.
Makalintal, Zaldivar, Fernando, Teehankee Barredo, and Esguerra, JJ., concur.
Antonio and Makasiar, JJ., took no part.

Footnotes
1 AN ACT AMENDING SECTION NINE OF REPUBLIC ACT NUMBERED SIXTY-FIVE BY
INCREASING FROM FIFTY TO ONE HUNDRED PESOS A MONTH THE LIFE PENSION OF
PERMANENTLY INCAPACITATED PHILIPPINE VETERANS.
2 Lydia (born on January 26, 1942), Quirico, Jr. (born on February 10,1945), Rolando (born on
December 5, 1948), Carmencita (born on July 25, 1950), and Lourdes (born on September 4, 1953).
3 L-94673, August 12, 1966, 16 SCRA 923.
4 Begosa vs. Chairman, Philippine Veterans Administration, 32 SCRA 466.
5 Begosa vs. Chairman, Philippine Veterans Administration, ibid., Teoxon vs. Members of the Board of
Administrators, Philippine Veterans Administration 13 SCRA 585.
6 Begosa vs. Chairman, Philippine Veterans Administration, ibid.; Teoxon vs. Members of the Board of
Administrators, Philippine Veterans Administration, ibid.

7 Amendments were introduced by Republic Act 1362, approved on June 18, 1955; Republic Act 1920,
approved on June 22, 1957; and Republic Act 5753, approved on June 21, 1969.
8 Prior to its amendment by Republic Act 5753 (AN ACT FURTHER AMENDING REPUBLIC ACT
NUMBERED SIXTY FIVE, AS AMENDED, BY INCREASING THE PENSION OF TOTALLY DISABLED
VETERANS OF WORLD WAR II AND DEPENDENTS).
9 "SEC. 20. This Act shall take effect upon its approval: Provided, That the President of the Philippines
is hereby authorized to suspend the operation of any provision of this Act if and when the Congress of
the United States approves the pending GI Bill of Rights applicable to the Philippines the provisions of
which are identical or similar to the provisions of this Act."
10 People vs. Exconde 101 Phil. 1125; Geukekoo vs. Araneta, 102 Phil. 706; Teoxon vs. Members of
the Board of Administrators, Philippine Veterans Administration, supra.
11 AN ACT TO CONSOLIDATE INTO ONE OFFICE TO BE KNOWN AS THE "PHILIPPINE VETERANS
ADMINISTRATION" THE BOARD ON PENSIONS FOR VETERANS CREATED BY COMMONWEALTH
ACT SIX HUNDRED AND FIVE, THE PHILIPPINE VETERANS BOARD CREATED BY REPUBLIC ACT
NUMBERED SIXTY FIVE, THE CLAIMS OFFICE CREATED BY VIRTUE OF REPUBLIC ACT
NUMBERED ONE HUNDRED THIRTY-SIX, THE VETERANS BACK PAY COMMISSION CREATED BY
REPUBLIC ACT NUMBERED EIGHT HUNDRED NINETY-SEVEN AND THE VETERANS NINE,
AMENDING THEREBY THE LAWS CITED AND FOR OTHER PURPOSES.
12 Begosa vs. Chairman, Philippine Veterans Administration, supra.

Republic of the Philippines

SUPREME COURT
Manila
FIRST DIVISION
G.R. No. 70853 March 12, 1987
REPUBLIC OF THE PHILIPPINES, petitioner-appellee,
vs.
PABLO FELICIANO and INTERMEDIATE APPELLATE COURT, respondents-appellants.

YAP, J.:
Petitioner seeks the review of the decision of the Intermediate Appellate Court dated April 30, 1985 reversing the order
of the Court of First Instance of Camarines Sur, Branch VI, dated August 21, 1980, which dismissed the complaint of
respondent Pablo Feliciano for recovery of ownership and possession of a parcel of land on the ground of non-suability
of the State.
The background of the present controversy may be briefly summarized as follows:
On January 22, 1970, respondent Feliciano filed a complaint with the then Court of First Instance of Camarines Sur
against the Republic of the Philippines, represented by the Land Authority, for the recovery of ownership and
possession of a parcel of land, consisting of four (4) lots with an aggregate area of 1,364.4177 hectares, situated in the
Barrio of Salvacion, Municipality of Tinambac, Camarines Sur. Plaintiff alleged that he bought the property in question
from Victor Gardiola by virtue of a Contract of Sale dated May 31, 1952, followed by a Deed of Absolute Sale on
October 30, 1954; that Gardiola had acquired the property by purchase from the heirs of Francisco Abrazado whose
title to the said property was evidenced by an informacion posesoria that upon plaintiff's purchase of the property, he
took actual possession of the same, introduced various improvements therein and caused it to be surveyed in July
1952, which survey was approved by the Director of Lands on October 24, 1954; that on November 1, 1954, President
Ramon Magsaysay issued Proclamation No. 90 reserving for settlement purposes, under the administration of the
National Resettlement and Rehabilitation Administration (NARRA), a tract of land situated in the Municipalities of
Tinambac and Siruma, Camarines Sur, after which the NARRA and its successor agency, the Land Authority, started
sub-dividing and distributing the land to the settlers; that the property in question, while located within the reservation
established under Proclamation No. 90, was the private property of plaintiff and should therefore be excluded
therefrom. Plaintiff prayed that he be declared the rightful and true owner of the property in question consisting of
1,364.4177 hectares; that his title of ownership based oninformacion posesoria of his predecessor-in-interest be
declared legal valid and subsisting and that defendant be ordered to cancel and nullify all awards to the settlers.
The defendant, represented by the Land Authority, filed an answer, raising by way of affirmative defenses lack of
sufficient cause of action and prescription.

On August 29, 1970, the trial court, through Judge Rafael S. Sison, rendered a decision declaring Lot No. 1, with an
area of 701.9064 hectares, to be the private property of the plaintiff, "being covered by a possessory information title in
the name of his predecessor-in-interest" and declaring said lot excluded from the NARRA settlement reservation. The
court declared the rest of the property claimed by plaintiff, i.e. Lots 2, 3 and 4, reverted to the public domain.
A motion to intervene and to set aside the decision of August 29, 1970 was filed by eighty-six (86) settlers, together
with the barrio council of Pag-asay, alleging among other things that intervenors had been in possession of the land in
question for more than twenty (20) years under claim of ownership.
On January 25, 1971, the court a quo reconsidered its decision, reopened the case and directed the intervenors to file
their corresponding pleadings and present their evidence; all evidence already presented were to remain but plaintiff,
as well as the Republic of the Philippines, could present additional evidence if they so desire. The plaintiff presented
additional evidence on July 30, 1971, and the case was set for hearing for the reception of intervenors' evidence on
August 30 and August 31, 1971.
On August 30, 1971, the date set for the presentation of the evidence for intervenors, the latter did not appear but
submitted a motion for postponement and resetting of the hearing on the next day, August 31, 1971. The trial court
denied the motion for postponement and allowed plaintiff to offer his evidence "en ausencia," after which the case
would be deemed submitted for decision. On the following day, August 31, 1971, Judge Sison rendered a decision
reiterating his decision of August 29, 1970.
A motion for reconsideration was immediately filed by the intervenors. But before this motion was acted upon, plaintiff
filed a motion for execution, dated November 18, 1971. On December 10, 1971, the lower court, this time through
Judge Miguel Navarro, issued an order denying the motion for execution and setting aside the order denying
intervenors' motion for postponement. The case was reopened to allow intervenors to present their evidence. Unable to
secure a reconsideration of Judge Navarro's order, the plaintiff went to the Intermediate Appellate Court on a petition
for certiorari. Said petition was, however, denied by the Intermediate Appellate Court, and petitioners brought the
matter to this Court in G.R. No. 36163, which was denied on May 3, 1973 Consequently, the case was remanded to the
court a quo for further proceedings.
On August 31, 1970, intervenors filed a motion to dismiss, principally on the ground that the Republic of the Philippines
cannot be sued without its consent and hence the action cannot prosper. The motion was opposed by the plaintiff.
On August 21, 1980, the trial court, through Judge Esteban Lising, issued the questioned order dismissing the case for
lack of jurisdiction. Respondent moved for reconsideration, while the Solicitor General, on behalf of the Republic of the
Philippines filed its opposition thereto, maintaining that the dismissal was proper on the ground of non-suability of the
State and also on the ground that the existence and/or authenticity of the purported possessory information title of the
respondents' predecessor-in-interest had not been demonstrated and that at any rate, the same is not evidence of title,
or if it is, its efficacy has been lost by prescription and laches.
Upon denial of the motion for reconsideration, plaintiff again went to the Intermediate Appellate Court on petition for
certiorari. On April 30, 1985, the respondent appellate court rendered its decision reversing the order of Judge Lising
and remanding the case to the court a quo for further proceedings. Hence this petition.
We find the petition meritorious. The doctrine of non-suability of the State has proper application in this case. The
plaintiff has impleaded the Republic of the Philippines as defendant in an action for recovery of ownership and
possession of a parcel of land, bringing the State to court just like any private person who is claimed to be usurping a
piece of property. A suit for the recovery of property is not an action in rem, but an action in personam.1 It is an action
directed against a specific party or parties, and any judgment therein binds only such party or parties. The complaint
filed by plaintiff, the private respondent herein, is directed against the Republic of the Philippines, represented by the
Land Authority, a governmental agency created by Republic Act No. 3844.
By its caption and its allegation and prayer, the complaint is clearly a suit against the State, which under settled
jurisprudence is not permitted, except upon a showing that the State has consented to be sued, either expressly or by
implication through the use of statutory language too plain to be misinterpreted. 2 There is no such showing in the
instant case. Worse, the complaint itself fails to allege the existence of such consent. This is a fatal defect, 3and on this
basis alone, the complaint should have been dismissed.
The failure of the petitioner to assert the defense of immunity from suit when the case was tried before the court a
quo, as alleged by private respondent, is not fatal. It is now settled that such defense "may be invoked by the
courts sua sponte at any stage of the proceedings." 4
Private respondent contends that the consent of petitioner may be read from the Proclamation itself, when it
established the reservation " subject to private rights, if any there be. " We do not agree. No such consent can be
drawn from the language of the Proclamation. The exclusion of existing private rights from the reservation established
by Proclamation No. 90 can not be construed as a waiver of the immunity of the State from suit. Waiver of immunity,
being a derogation of sovereignty, will not be inferred lightly. but must be construed instrictissimi juris. 5 Moreover, the
Proclamation is not a legislative act. The consent of the State to be sued must emanate from statutory authority. Waiver
of State immunity can only be made by an act of the legislative body.
Neither is there merit in respondent's submission, which the respondent appellate court sustained, on the basis of our
decision in the Begosa case, 6 that the present action is not a suit against the State within the rule of State immunity

from suit, because plaintiff does not seek to divest the Government of any of its lands or its funds. It is contended that
the complaint involves land not owned by the State, but private land belonging to the plaintiff, hence the Government is
not being divested of any of its properties. There is some sophistry involved in this argument, since the character of the
land sought to be recovered still remains to be established, and the plaintiff's action is directed against the State
precisely to compel the latter to litigate the ownership and possession of the property. In other words, the plaintiff is out
to establish that he is the owner of the land in question based, incidentally, on an informacion posesoria of dubious
value, and he seeks to establish his claim of ownership by suing the Republic of the Philippines in an action in
personam.
The inscription in the property registry of an informacion posesoria under the Spanish Mortgage Law was a means
provided by the law then in force in the Philippines prior to the transfer of sovereignty from Spain to the United States of
America, to record a claimant's actual possession of a piece of land, established through an ex parteproceeding
conducted in accordance with prescribed rules. 7 Such inscription merely furnishes, at best, prima facie evidence of the
fact that at the time the proceeding was held, the claimant was in possession of the land under a claim of right as set
forth in his application. 8 The possessory information could ripen into a record of ownership after the lapse of 20 years
(later reduced to 10 years), upon the fulfillment of the requisites prescribed in Article 393 of the Spanish Mortgage Law.
There is no showing in the case at bar that the informacion posesoria held by the respondent had been converted into
a record of ownership. Such possessory information, therefore, remained at best mere prima facie evidence of
possession. Using this possessory information, the respondent could have applied for judicial confirmation of imperfect
title under the Public Land Act, which is an action in rem. However, having failed to do so, it is rather late for him to
pursue this avenue at this time. Respondent must also contend, as the records disclose, with the fact admitted by him
and stated in the decision of the Court a quo that settlers have been occupying and cultivating the land in question
since even before the outbreak of the war, which puts in grave doubt his own claim of possession.
Worthy of note is the fact, as pointed out by the Solicitor General, that the informacion posesoria registered in the
Office of the Register of Deed of Camarines Sur on September 23, 1952 was a "reconstituted" possessory information;
it was "reconstituted from the duplicate presented to this office (Register of Deeds) by Dr. Pablo Feliciano," without the
submission of proof that the alleged duplicate was authentic or that the original thereof was lost. Reconstitution can be
validly made only in case of loss of the original. 10 These circumstances raise grave doubts as to the authenticity and
validity of the "informacion posesoria" relied upon by respondent Feliciano. Adding to the dubiousness of said
document is the fact that "possessory information calls for an area of only 100 hectares," 11 whereas the land claimed
by respondent Feliciano comprises 1,364.4177 hectares, later reduced to 701-9064 hectares. Courts should be wary in
accepting "possessory information documents, as well as other purportedly old Spanish titles, as proof of alleged
ownership of lands.
WHEREFORE, judgment is hereby rendered reversing and setting aside the appealed decision of the Intermediate
Appellate Court, dated April 30, 1985, and affirming the order of the court a quo, dated August 21, 1980, dismissing the
complaint filed by respondent Pablo Feliciano against the Republic of the Philippines. No costs.
SO ORDERED.
Narvasa, Cruz, Feliciano, Gancayco and Sarmiento, JJ., concur.
Melencio-Herrera, J., is on leave.

Footnotes
1 Ang Lam v. Rosenosa 86 Phil. 447.
2 Providence Washington Insurance Co. v. Republic of the Philippines, 29 SCRA 598, 601.
3 Insurance Company of North America v. Republic of the Philippines, 20 SCRA 627.
4 Insurance Company of North America v. Osaka Shosen Kaisha 27 SCRA 780.
5 Mobil Philippines Exploration, nn. v. Customs Arrastre Service, 18 SCRA 1120; Insurance Company of
North America v. Warner, 21 SCRA 766.
6 Begosa v. Philippine Veterans Administration 32 SCRA 466.
7 Alfonso v. Commanding General 7 Phil. 600, 615.
8 Bishop of Segovia v. Mun. of Bantay, 28 Phil. 347, 351.
9 Querol and Flores v. Querol, 48 Phil. 90, 98-99.
10 Republic of the Philippines vs. Court of Appeals, 94 SCRA 865.

11 Government of the Philippines v. Heirs of Abella, 49 Phil. 374, 379.