Caltex v. Palomar GR L-19650, 29 September 1966 (18 SCRA 247) Facts: In 1960, Caltex (Phils) Inc.

conceived a promotional scheme “Caltex Hooded Pump Contest” calculated to drum up patronage for its products, calling for participants therein to estimate the actual number of liters a hooded gas pump at each Caltex station will dispense during a specified period. For the privilege to participate, no fee or consideration is required to be paid. Neither a purchase of Caltex products is required. Entry forms were available upon request at each Caltex station where a sealed can was provided for the deposit of accomplished entry stubs. Foreseeing the extensive use of the mails, not only as amongst the mediator publicizing the contest but also for the transmission of communications relative thereto, representations were made by Caltex with the postal authorities for the contest to be cleared in advance for mailing, in view of sections 1954(a), 1982 and 1983 of the Revised Administrative Code. Such overtures were formalized in a letter to the Postmaster General, dated 31 October 1960, in which the Caltex, thru counsel, enclosed a copy of the contest rules and endeavored to justify its position that the contest does not violate the anti-lottery provisions of the Postal Law. Unimpressed, the then Acting Postmaster General Enrico Palomar

opined that the scheme falls within the purview of the provisions aforesaid and declined to grant the requested clearance. Caltex thereupon invoked judicial intervention by filing a petition for declaratory relief against the Postmaster General, praying that judgment be rendered declaring its Caltex Hooded Pump Contest not to be violative of the Postal Law, and ordering respondent to allow petitioner the use of the mails to bring the contest to the attention of the public. The trial court ruled that the contest does not violate the Postal Code and that the Postmaster General has no right to bar the public distribution of the contest rules by the mails. The Postmaster General appealed to the Supreme Court. Issue(s): • Whether construction should be employed in the case. • Whether the contest is a lottery or a gift enterprise that violates the provisions of the Postal Law. Held: Construction is the art or process of discovering and expounding the meaning and intention of the authors of the law with respect to its application to a given case, where that intention is rendered doubtful, amongst others, by reason of the fact that the given case is not explicitly provided for in the law. In the

present case, the prohibitive provisions of the Postal Law inescapably require an inquiry into the intended meaning of the words used therein. This is as much a question of construction or interpretation as any other. The Court is tasked to look beyond the fair exterior, to the substance, in order to unmask the real element and pernicious tendencies that the law is seeking to prevent. “Lottery” extends to all schemes for the distribution of prizes by chance, such as policy playing, gift exhibitions, prize concerts, raffles at fairs, etc., and various forms of gambling. The three essential elements of a lottery are: (1) consideration, (2) prize, and (3) chance. “Gift enterprise,” on the other hand, is commonly applied to a sporting artifice under which goods are sold for their market value but by way of inducement each purchaser is given a chance to win a prize. Further, consonant to the wellknown principle of legal hermeneutics noscitur a sociis, the term under construction should be accorded no other meaning than that which is consistent with the nature of the word associated therewith. Hence, if lottery is prohibited only if it involves a consideration, so also must the term “gift enterprise” be so construed. Significantly, there is not in the law the slightest indicium of any intent to eliminate that element of consideration from the “gift enterprise” therein included. Gratuitous distribution of property by lot or chance does not

constitute ‘lottery’, if it is not resorted to as a device to evade the law and no consideration is derived, directly or indirectly, from the party receiving the chance, gambling spirit not being cultivated or stimulated thereby. Thus, gift enterprises and similar schemes therein contemplated are condemnable only if, like lotteries, they involve the element of consideration. In the present case, there is no requirement in the rules that any fee be paid, any merchandise be bought, any service be rendered, or any value whatsoever be given for the privilege to participate; for the scheme to be deemed a lottery. Neither is there is a sale of anything to which the chance offered is attached as an inducement to the purchaser for the scheme to be deemed a gift enterprise. The scheme is merely a gratuitous distribution of property by chance. The Supreme Court affirmed the appealed judgment, without costs. FACTS: Petitioner Davao Oriental Electric Cooperative, Inc. (DOEC) was organized under Presidential Decree (PD) No. 269 which granted a number of tax and duty exemption privileges to electric cooperatives. In 1984, PD No. 1955 was enacted by then President Ferdinand E. Marcos. It withdrew all exemptions from or any preferential treatment in the payment of duties, taxes, fees, imposts, and other charges granted to private business enterprises and/or persons engaged in any economic activity.

Due to the failure of petitioner to declare the value of its properties, the Office of the Provincial Assessor assessed its properties. On October 8, 1985, the Provincial Assessor sent the Notice of Assessment to petitioner which duly received it. During the same year of 1985, the Fiscal Incentive Review Board (FIRB) issued FIRB Resolution No. 13-85, the Ministry of Finance issued Local Tax Regulation No. 3-85, and the Office of the Local Government Finance, Region XI, Davao City issued Regional Office Memorandum Circular No. 42-85, all of which reiterated the withdrawal of tax exemptions previously granted to business entities including electric cooperatives. In May 1990, respondent filed a complaint for collection of delinquent real property taxes against petitioner for the years 1984 until 1989, amounting to P1,825,928.12. Petitioner contends that it was exempt from the payment of real estate taxes from 1984 to 1989 because the restoration of tax exemptions under FIRB Resolution No. 24-87 retroacts to the date of withdrawal of said exemptions. Further, petitioner questions the classification made by respondent of some of its properties as real properties when it believes them to be personal properties, hence, not subject to realty tax. It claims that the tax declarations covering its properties were issued without prior consultation, and without its knowledge and consent. In addition, it argues that respondent classified its

poles, towers and fixtures, overhead conductors and devices, station equipment, line transformers, etc. as real properties when by their nature, use, purpose, and destination and by substantive law and jurisprudence, they are personal properties. On March 15, 2000, the RTC rendered its decision in favor of petitioner. Respondent appealed to the CA which set aside the ruling of the RTC. ISSUES: 1. Whether or not the restoration of the tax exemption under FIRB Resolution 2487 was not retroactive to the date of effectivity of PD 1955; 2. Whether or not petitioner could be made to pay taxes based on a widesweeping and erroneous assessment of its real properties. RULING: Retroactivity of FIRB Resolution No. 2487. CA ruling affirmed. A cursory reading of the resolution bares no indicia of retroactivity of its application. FIRB Resolution No. 24-87 is crystal clear in stating that “the tax and duty exemption privileges of electric cooperatives granted under the terms and conditions of PD 269 are restored effective July 1, 1987.” There is no other way to construe it. The language of the law is plain and unambiguous. When the language of the law is clear and unequivocal, the law

Assessment of petitioner’s real properties. avoid unfairness on the part of taxpayers if they are required to pay the tax on past transactions. 64117 affirming the Decision5 of the CTA in CTA Case No.(Sec. The RMO reads: A restudy of P. docketed as G. No. Petitioner failed to exhaust its administrative remedies. Such being the case. which reads: 1. J. 2001 denying the motion for reconsideration. 158644 assails the Decision6 of the CA in CA-G. 43-91 dated May 27. docketed as G. 464 (Real Property Tax Code) provides that “any owner who is not satisfied with the action of the provincial or city assessor in the assessment of his property may. 2001 reversing and setting aside the Decision 2 of the Court of Tax Appeals (CTA) in CTA Case No. assails the Decision4 dated February 6. Ibid). RM[O] 15-91 dated March 11. as computed and issued by the Office of the Provincial Assessor. 22-90 and 67-90. Section 64 of PD No. 5774.D. SP No.] 114 shows that the principal activity of pawnshops is lending money at interest and incidentally accepting a "pawn" of personal property delivered by the pawner to the pawnee as security for the loan. Further. Lastly. 464 requires that the taxpayer must first pay under protest the tax assessed against him before he could seek recourse from the courts to assail its validity. In order to have a uniform cut-off date. [No. SP No. pawnshops shall be subject to the 5% lending investor's tax based on their gross income pursuant to Section 116 of the Tax Code. 3. 6-90. 15-91 classifying the pawnshop business as akin to the lending investor’s business activity "which is broad enough to encompass the business of lending money at interest by any person whether natural or juridical" and imposing on both a 5% lending investor's tax based on their gross income. 59282 dated March 23. 2002 reversing and setting aside the Decision 7 and Resolution of the CTA in CTA Case No. because taxes are the lifeblood of the nation. 150141. as amended. 2003 of the CA in CA-G. 157359. Section 30 of PD No. SP No. and it thus revokes BIR Ruling No. Petitioner is deemed to have admitted the correctness of the assessment of its properties. became final. assails the Decision1 of the Court of Appeals (CA) in CA-G. No. and the CA’s Resolution3 dated September 25.R.: Before this Court are three consolidated petitions for review. On March 11. appeal to the Board of Assessment Appeals of the province or city. A claim for exemption from tax payments must be clearly shown and be based on language in the law too plain to be mistaken. as amended. 5990.R. exemption therefrom is the exception. This Circular subjects to the 5% lending investor's tax the gross income of pawnshops pursuant to Section 116 of the Tax Code. 59401 dated September 30.” Having failed to appeal the assessment of its properties to the Board of Assessment Appeals. then Commissioner of Internal Revenue Jose U.R. The RMO was later clarified by Revenue Memorandum Circular (RMC) No. Clearly. by filing with it a petition under oath using the form prescribed for the purpose. pursuant to then Section 116 of the National Internal Revenue Code of 1977. and VAT Ruling Nos. No. petitioner cannot now assail the validity of the tax assessment against it before the courts. Ong issued Revenue Memorandum Order (RMO) No.R. and so as to give meaning to the express provisions of Section 246 of the Tax Code.R. The second. In addition. 1991.R. taxation is the rule. this makes pawnshop business akin to lending investor's business activity which is broad enough to encompass the business of lending money at interest by any person whether natural or juridical.must be taken to mean exactly what it says. together with copies of the tax declarations and such affidavit or documents submitted in support of the appeal. The first. 1991. 5741. 1991. G. pawnshop owners or operators shall become liable . DECISION AZCUNA. Elsewise stated. within sixty days from the date of receipt by him of the written notice of assessment as provided in this Code. the court has always applied the doctrine of strict interpretation in construing tax exemptions. and the consequence for such failure is clear – the tax assessment. and the CA’s Resolution8 denying the motion for reconsideration.

1998. against Agencia Exquisite of Bohol. 2003. they also become subject to documentary stamp taxes prescribed in Title VII of the Tax Code. 325-88 dated July 13. taxpayers are given up to June 30. BIR Ruling No. 5774. 84-PT-13-95-98-50-63.49 for the year 1994.11 AEBI filed a motion for reconsideration but it was denied in the Resolution dated September 25.R. the Bureau of Internal Revenue (BIR) issued Assessment Notice No. plus interest and charges. SP No. 2001. the corresponding penalties shall be assessed and computed from April 21. pursuant to RMO No. 2529A-0) and the payment of the tax on lending investors covering the first calendar quarter of 1991 has already lapsed. in concept of deficiency percentage tax/lending investor’s tax for the year 1995. dated April 20. in so far as they classify pawnshops as lending investors subject to 5% lending investors’ tax. Without costs in this instance. 5990. 1991. in so far as they classify pawnshops as lending investors subject to lending investor’s tax. Since pawnshops are considered as lending investors effective January 1.538. The BIR then sought recourse before the CA in a Petition for Review.59 representing the 5% lending investors’ tax for 1995.9 On June 28. 1991.12 AEBI filed a protest. No. 150141. 59282.to the lending investor's tax on their gross income beginning January 1. 64117. 43-91 null and void. Consequently. 43-91. 43-91. 1991 within which to pay the said tax without penalty. In a Letter-Resolution dated November 12. As regards G. 1991.R. Pursuant to these issuances. null and void. 84-PT-13-94-99-9-081 against AEBI demanding the payment of deficiency percentage tax in the sum of P66. docketed as G. AEBI filed with the CTA a Petition for Review. On June 7. docketed as CTA Case No. docketed as CA-G. reiterating the arguments it raised in its protest.373. 1999. SP No. arguing that the CTA erred in ruling that pawnshops are not subject to the lending investor’s tax. and. 1991.59).13 On March 14. the CA rendered a Decision reversing and setting aside the decision of the CTA. the CA rendered a Decision17 in favor of AEBI and against the . 1999. 2000. docketed as CTA Case No. SP No. the dispositive portion of which reads: xxx (1) REVERSING AND SETTING ASIDE the Decision of the Tax Court in CTA Case No. 157359. 1999. the BIR Revenue Regional Director issued Assessment Notice No. 2001. the CTA rendered a Decision14 in favor of AEBI cancelling Assessment Notice No. (2) Condemning the respondent to pay the amount of Pesos: One Hundred Six Thousand Five Hundred Thirty Eight and Fiftynine Centavos (P106. SO ORDERED.R. 15-91 and RMC No. He also invoked the decision of the CA in CAG. AEBI filed a petition for review before the CTA. which held that the definition of the term "pawnshop" is broad enough to encompass lending investors. No. AEBI filed its Administrative Protest which the BIR Revenue Regional Director denied in a Letter-Decision dated February 3. Since the deadline for the filing of percentage tax return (BIR Form No. On March 23. 1988 is hereby revoked. 84-PT13-95-98-5-0-63 and declaring RMO No.R. the CTA rendered its Decision in favor of AEBI cancelling Assessment Notice No. 2001. AEBI filed the present Petition for Review on Certiorari. docketed as CAG. (AEBI) demanding payment in the sum of P106.538. 84-PT-13-94-99-9081 and declaring RMO No. 15-91 and RMC No. Aggrieved. 1998. 59282. 5774.10 Consequently. the Commissioner denied AEBI’s protest. Inc.16 On February 6. inclusive of interest and surcharge. If the tax is paid after June 30. on September 25.R. 15-91 and RMC No.15 The Commissioner filed a petition for review before the CA.

49. docketed as CTA Case No. Inc.28 Moreover.255. while pawnshops are indeed engaged in the business of lending money. 2002. 1998 until fully paid pursuant to Sections 248 and 249 of the Tax Code.24 Aggrieved. 157359 and G. EPJI filed its petition for review before the CTA. as amended by Executive Order No.R. 15-91 and RMC No.Commissioner of Internal Revenue dismissing the appeal and affirming the decision of the CTA. they cannot be deemed "lending . the instant petition for review is GIVEN DUE COURSE and hereby GRANTED. 2000.21 On April 24.R. 43-91 null and void. in so far as they classify pawnshops as lending investors subject to lending investor’s tax. the BIR Revenue Regional Director issued Assessment Notice No. 43-91. on May 25. SO ORDERED. 1998. pursuant to RMO No.49 as 5% deficiency lending investor’s tax for the year 1995. AEBI and EPJI argue that applying the principles of stare decisis. In a Resolution27 dated August 13. 59401. the CA rendered a Decision. 80-PT-13-96-98-5-0 against Exquisite Pawnshop and Jewelry. 2000 and Resolution dated June 9. the Commissioner sought recourse before the CA in a petition for review. No.25 docketed as CA-G. the BIR through the Commissioner of Internal Revenue has issued RMC No. 273.255. Lhuillier Pawnshop. On March 12. that pawnshops are different from lending investors. 15-91 and RMC No. the CTA rendered a Decision22 granting the petition in favor of EPJI and consequently cancelling Assessment Notice No. that pawn tickets are not subject to documentary stamp tax. On September 30. Pursuant to the ruling in the Lhuillier case. and that RMO No. EPJI filed its Protest19 but it was denied by the BIR Revenue Regional Director in a Letter20 dated February 3. 1999. 362004 ordering the cancellation of all lending investor’s tax assessments on pawnshops. No. Thus. In Commissioner of Internal Revenue v.26 Thus. They claim that there is a big difference between the nature of a pawnshop business and that of a lending investor. 150141 G. 158644.R. AEBI and EPJI argue that there are no specific provisions in the Tax Code that subject pawnshops to 5% lending investor’s tax. 2003. SP No. the issue herein not being a novel one. Inc. Michel J. inclusive of interest and surcharge. G.30 The Court agrees with the contentions of AEBI and EPJI. Lhuillier29 has already held that pawnshops are not considered lending investors for the purpose of imposing the 5% percentage tax. 15-91 and RMC No.31 this Court held that pawnshops are not included in the term lending investors for the purpose of imposing the 5% percentage tax under then Section 116 of the National Internal Revenue Code of 1977. this petition. granting the petition in favor of the Commissioner. 15-91 and RMC No.R. 43-91 violate the Constitutional guarantees of due process and equal protection of the laws and that they are unconstitutional as they encroached on the legislative prerogative. 1998. the present petition.. premises considered. 2000 of the Tax Court are hereby REVERSED and SET ASIDE. (EPJI) demanding payment of the sum of P649. representing the 5% lending investors’ tax for the year 1995. Respondent is hereby ordered to pay the amount of P649. 43-91 are null and void. The sole issue for the Court’s determination is whether or not pawnshops are liable for the payment of the 5% lending investor’s tax. 1999. plus 25% surcharge and 20% annual interest from June 24.18 On June 17. As regards G. No. this Court in the case of Commissioner of Internal Revenue v. Hence.23 The Commissioner filed a Motion for Reconsideration but it was denied in the Resolution dated June 9.R. No. 2000. 5741. The decision of the Court of Tax Appeals dated April 24. The decretal portion of which reads: WHEREFORE. arguing inter alia that: there is no specific provision in the Tax Code and the VAT law which imposes a 5% tax on pawnshops. They also contend that RMO No. 158644 were consolidated. 80-PT-13-96-98-50 and declaring RMO No.

sub-paragraphs (dd) and (ff) of the NIRC of 1997. No. 3. and P. 1994). 656). the amount stated being for the whole year. Trustworthy Pawnshop. 209.D. P. if a statute enumerates the things upon which it is to operate. Verily then. Thus. 273.O. 273. No. paragraph 3. Under Section 192. we must likewise interpret the statute to conform to such legislative intent.D. 2. 1739. 99 SCRA 651. 1979. Inc.O. in Commissioner of Internal Revenue v. 1980) of the NIRC of 1986. 15-91 itself. Under the maxim expressio unius est exclusio alterius. September 11. as amended by E. xxx (ff) Pawnshops. Estenzo. In second municipalities. as renumbered and rearranged by E. 43-91 that pawnshops were not subject to the 5% percentage tax imposed by Section 116 of the NIRC of 1977.D. one thousand pesos. Considering that Section 116 of the NIRC of 1977. paragraph 2. L-31364. No. 1959. as amended by E. L-35376. and there being no change in the law. it was the intent of Congress to deal with both subjects differently.A. which treated both tax subjects differently. where Section 116 invoked by the CIR is found.lawphil. 17.O. – Dealers in securities shall pay a tax equivalent to six percent (6%) of their gross income. We note that the definition of lending investors found in Section 157 (u) of the NIRC of 1986 is not found in the NIRC of 1977. This was even admitted by the CIR in RMO No. Fernandez. No. 175. Widening Its Tax Base and Enhancing Its First. was basically lifted from Section 175 (formerly Sec. is based upon the rules of logic and natural workings of the human mind (Republic v. 89 SCRA 199. 15-91 and RMC No. No. 1980.net Fourth. lending investors. Congress never intended pawnshops to be treated in the same way as lending investors. Lending investors shall pay a tax equivalent to five percent (5%) of their gross income. both the NIRC of 1986 and NIRC of 1977 dealt with pawnshops and lending investors differently. No. 273. The rulings are following reasons: buttressed by the districts. two hundred fifty pesos: Provided. Section 116 of the NIRC of 1977. as well as Section 161. No. the mention of one thing implies the exclusion of another thing not mentioned. (As amended by P. Hence. No.O. prior to its amendment by E. subjects to percentage tax dealers in securities and lending investors only. as a guide to probable legislative intent. That lending investors who do business as such in more than one province shall pay a tax of one thousand pesos. In chartered cities and first class municipalities. everything else must necessarily and by implication be excluded from its operation and effect (Vera v. 273. as amended. Second. Section 116 of the NIRC of 1977. xxx R. one thousand pesos. 203). as amended. pawnshops and lending investors were subjected to different tax treatments. the interpretation thereof should not have been altered. was practically lifted from Section 175 of the NIRC of 1986. Sept. NIRC of 1977. This rule. Percentage tax on dealers in securities. 1739. In fourth municipalities and third class five hundred and fifth class and municipal . The BIR had ruled several times prior to the issuance of RMO No. Section 175 of the latter Code reads as follows: Sec. pesos. There is no mention of pawnshops.O. when not otherwise specified: xxx (dd) Lending Investors – 1. However. Third. thus: (3) Other Fixed Taxes. 7716 (An Act Restructuring the Value-added Tax (VAT) System. 273.D. March 30.32 this Court reiterated its ruling in Lhuillier that pawnshops are not included in the term lending investors for the purpose of imposing the 5% percentage tax. as amended by P. sub-paragraphs (dd) and (ff) of the NIRC of 1986. as emphasized earlier.. as amended by E. No.investors" for the purpose of imposing the 5% lending investor’s tax. Again. – The following fixed taxes shall be collected as follows.

petitioner herein. 4391 are hereby declared null and void. as amended. Inc. 5774 and 5741 are REINSTATED. WHEREFORE. The petition of the Commissioner of Internal Revenue in G.R. which was the basis of RMO No. CERTIFICATION Pursuant to Section 13. However. which depended upon it. thus: xxx Since Section 116 of the NIRC of 1977.Resolution both of the Social Security Commission (SSC) in SSC Case No. and for Other Purposes. respectively. Garcia (Garcia). J. Consequently. Garcia. 158644. RMO No. Adding to the invalidity of RMC No. 157359 that the CA committed no reversible error in dismissing the appeal and affirming the decision of the CTA.R. and for These Purposes Amending and Repealing the Relevant Provisions of the National Internal Revenue Code.: This is petition for review on Certiorari under Rule 45 of the Rules of Court is assailing the 2 June 2005 Decision[1] and 8 December 2005 Resolution[2] both of the Court of Appeals in CA-G. which breathed life on the questioned administrative issuances. in G. No pronouncement as to costs. and publication should not have been ignored. 85923. 150141 and G. as amended. Once a case has been decided one way. No. the decisions and resolutions of the CA should be reversed and set aside. the CIR may not disregard legal requirements or applicable principles in the exercise of quasi-legislative powers. liable for unremitted. Ricardo de Leon. Specifically. are deemed automatically repealed. 35 Consequently. 15-91 and RMC No. Eduardo de Leon.R. this Court finds in G. xxx. 15-91 and RMC No. hearing. pursuant to Lhuillier and Trustworthy. like any other government agency. The Decisions and Resolutions of the Court of Appeals in CA-G.R. and the Decisions of the Court of Tax Appeals in CTA Case Nos. even granting that pawnshops are included within the term lending investors. No. Lhuillier is not liable to pay the 5% lending investor’s tax. finding Immaculada L. should be decided in the same manner. 10048. . No. it is hereby certified that the conclusions in the above Decision had been reached in consultation before the case was assigned to the writer of the opinion of the Court’s Division. the assessment from May 27. SP No. they would have been amendatory provisions applicable to pawnshops. Petitioner Immaculada L. While the rule-making authority of the CIR is not doubted. Article VIII of the Constitution. 15-91 and RMC No. and Exquisite Pawnshop and Jewelry. 157359 is hereby DENIED. SSS contributions. 64117 is AFFIRMED. in G. 158644. the sole surviving director of Impact Corporation.Administrative. No. The Decision of the Court of Appeals in CA-G. xxx RMO No.33 (Emphasis added) Under the doctrine of stare decisis et not quieta movere34 it behooves the Court to apply its previous ruling in Lhuillier and Trustworthy to the cases under consideration. 15-91 is the absence of publication. SP Nos. Pacita Fernandez. 1994 onward would have no leg to stand on. and Consuelo Villanueva were directors[3] of Impact Corporation.) repealed Section 116 of NIRC of 1977. as in the present consolidated cases.R. the petitions of Agencia Exquisite of Bohol. SO ORDERED.R. No. albeit collected. 59282 and 59401 are REVERSED and SET ASIDE. SP No. had already been repealed.R.R. RMO 15-91 and RMC 4391. The due observance of the requirements of notice. Inc. the appellate court affirmed the --Order and --. any other case involving exactly the same point at issue. 43-91 cannot be viewed simply as implementing rules or corrective measures revoking in the process the previous rulings of past Commissioners. No. The corporation was engaged in the business of manufacturing aluminum tube containers and operated two factories. Hence. xxx In view of the foregoing. are GRANTED. 4391.R. 43-91 and RMO No. 150141 and G. NAZARIO.

through its then Vice President Ricardo de Leon. Metro Manila. 13 On the claims of unpaid wages. In answer to the allegations raised in SSC Case No. In fact. its machineries. filed a case before the SSC for the collection of unremitted SSS premium contributions withheld by Impact Corporation from its employees. In March 1983. all of its assets. and SSS remittances due to cash liquidity problems. labor unrest besieged the corporation. were sold to scrap dealers to answer for its arrears in rentals. The Ministry of Labor. which processed the “slugs” into aluminum collapsible tubes and similar containers for toothpaste and other related products. xxxx In brief.One was a “slug” foundry-factory located in Cuyapo. The SSC ordered the investigating team of the SSS to determine if it can still file its claim for unpaid premium contributions against the corporation under the Petition for Suspension of Payments. It explained among other things. The case which impleaded Impact Corporation as respondent was docketed as SSC Case No.988. namely. 03-2745100-21. the Ministry of Labor certified the labor dispute for compulsory arbitration to the National Labor Relations Commission (NLRC) in an Order[5]th month pay.D. Impact Corporation resumed operations but only for its winding up and dissolution. WHEREFORE. the Petition for Suspension of Payments was dismissed which was pending before the SEC in an Order[8] dated 12 December 1985.[6] On 3 July 1985. 10048. Impact Corporation started encountering financial problems. noted the inability of Impact Corporation to pay wages. Despite due notice.[4] docketed as SEC Case No. 2423. Such claims were never contested by the company both during the hearing below and in our office. .93 is erroneous. It further argued that the P402.[7] Impact Corporation was compulsorily covered by the SSS as an employer effective 15 July 1963 and was assigned Employer I. Nueva Ecija. such claims were admitted by the company although it alleged cash liquidity as the main reason for such nonpayment. No. Records show that around 1978. equipment. unpaid 13th month pay and non-remittance of loan amortization and SSS premiums. the corporation failed to appear at the hearings. On 8 May 1985. Impact Corporation. through its Legal and Collection Division (LCD). Subsequently. xxxx The company is directed to pay all the entitled workers unpaid wages. 02423. as amended. it is an on-going. the dispute at Impact Corporation is hereby certified to the National Labor Relations Commission for compulsory arbitration in accordance with Article 264 (g) of the Labor Code. By 1980. the union of Impact Corporation filed a Notice of Strike with the Ministry of Labor which was followed by a declaration of strike on 28 July 1985. Impact Corporation filed with the Securities and Exchange Commission (SEC) a Petition for Suspension of Payments. 10048. A portion of the order reads: dated 25 August 1985. while the other was an Extrusion Plant in Cainta.[9] Due to Impact Corporation’s liability and cash flow problems. viable. in which it stated that: [Impact Corporation] has been and still is engaged in the business of manufacturing aluminum tube containers x x x. and profitable enterprise. unpaid 13th month pay and to remit to the Social Security System loan amortizations and SSS premiums previously deducted from the wages of the workers. we are for directing the company to pay the same to the workers and to remit loan amortizations and SSS premiums previously deducted from their wages to the Social Security System. in the same Order. office furniture and fixtures. explained in a letter dated 18 July 1985 that it had been confronted with strikes in 1984 and layoffs were effected thereafter. In the meantime. that its operations had been suspended and that it was waiting for the resolution on its Petition for Suspension of Payments by the SEC under SEC Case No. the Social Security System (SSS).

and petitioner. No. thus: .78 December 1984 August 1981 toP 10.988.441. 10048 wherein the directors of Impact Corporation were directly impleaded as respondents.194. Nos. not inclusive. Period Unremitted Amount petitioner averred that Impact Corporation had ceased operations in 1980. in the amounts of P49. that respondents Impact Corporation and/or Immaculada L.845.98 and 982-S. due to failure to file his responsive pleading. Ricardo de Leon. and she ceased to be such in 1982. They were all later determined to be deceased. as amended by SSC Res.856. In the event the respondents fail to pay their liabilities within the aforestated period. and the penalties for late remittance at the rate of 3% per month from the date the contributions fell due until fully paid pursuant to Section 22(a) of the Social Security Law. Should the respondents pay their liability for unpaid SSS contributions within sixty (60) days from receipt of a copy of this Resolution. In her defense. In Penalties an Order dated 11 April 2000. 2003. respectively. Consuelo Villanueva. the SSC directed the System to check if Impact (3% Interest PerCorporation had leviable properties to Month) which the investigating team of P49. and P10. as well as the 3% per month penalty imposed thereon for late payment in the amounts of P3. pursuant to Section 22 (c) [2] of the SS Law.856.67 and P2. premises considered.93. Ricardo de Leon died following the death.A. and Consuelo Villanueva. the 3% per month penalty for late payment thereof shall be deemed condoned pursuant to SSC Res.85 July 1984 On 23 January 1998. 8282. and so holds.85. This is without prejudice to the right of the SSS to collect the penalties accruing after April 30. representing the balance of the unpaid SS contributions in favor of Donato Campos. let a writ of execution be issued. namely: Eduardo de Leon. 2003 and to institute other appropriate actions against the respondent corporation and/or its responsible officers.[11] Pacita Fernandez. too.78 and P10. Ricardo de Leon was declared in default. as director and responsible officer of the said corporation. their whereabouts unknown.On 1 December 1995. but the Motion was denied for lack of merit. Petitioner filed with the SSC a Motion to Dismiss[13] on grounds of prescription. is liable to pay the SSS the amounts of P442.[14] In her Answer with Counterclaim[15][16] dated 20 May 1999. Petitioner filed a Motion for Reconsideration[19] of the afore-quoted Decision but it was denied for lack of merit in an Order[20] dated 4 August 2004. the Social Security Commission ruled in favor of SSS and declared petitioner liable to pay the unremitted contributions and penalties. Garcia. Even as a stockholder and director of Impact Corporation.82.548. respectively. the SSS-LCD filed an amended Petition[10] in SSC Case No. 397S. Summonses were not served upon Eduardo de Leon. The amounts sought to be collected totaled P453.63 and P78. stating the following: WHEREFORE. Pacita Fernandez.856. for the satisfaction of their liabilities to the SSS. representing the unpaid SS contributions of their employees for the period August 1980 to December 1984. On the other hand.[12] as amended. this Commission finds. lack of cause of action and cessation of business. 474. Bonifacio Franco and Romeo Fullon for the period August 1980 to December 1984. petitioner contended that she cannot be made personally liable for the corporate obligations of Impact Corporation since her liability extended only up to the extent of her unpaid subscription.[18] August 1980 toP 453. Jaime Mascarenas. 662.97.[17] In a Resolution dated 28 May 2003. she insisted that she was a mere director without managerial functions. of Pacita Fernandez died on 7 February 2000. The petitioner raised the same arguments in her Position Paper.99. of which she had none since her subscription was already fully paid. 941. No.845.474.82 dissolved and its assets disposed of. 112S.85 for the periods August 1980 to December 1984 and August 1981 to July 1984.662.941. not inclusive. implementing the provision on condonation of penalty under Section 30 of R. as amended.33.67 respondent SSS manifested that the Impact Corporation had already been P2. computed as of April 30.

as amended. Petitioner anchors her Petition on the following arguments: I. the petition is DISMISSED for lack of merit. Pacita Fernandez and Conzuelo Villanueva. 1982. Pacita Fernandez and Conzuelo Villanueva. thus. it is the managing heads. premises considered. Furthermore. Moreover. petitioner has ceased to be a stockholder of Impact Corporation in 1982. The Court of Appeals. who were all impleaded as partiesrespondents in this case. It is certainly farthest from the intention of the petitioner SSS or this Commission to pin the entire liability of Impact Corporation on movant Immaculada L. the movant cannot raise in a motion for reconsideration the defense that she was no longer a director of Impact Corporation in 1982. the dispositive portion of which reads: WHEREFORE. In view thereof. It dismissed the petitioner’s Petition in a Decision dated 2 June 2005. In this case. 1985. 1999 and is. neither the legal heirs nor the estate of the defaulted respondent Ricardo de Leon were substituted as parties-respondents in this case when he died on January 23. Rule 9 of the 1997 Rules of Civil Procedure. which has suppletory application to the Revised Rules of Procedure of the Commission. hence. Under Section 31 of the Corporation Code. when she was allegedly eased out by the managing directors of Impact Corporation as purportedly shown in the Deed of Sale and Assignment of Shares of Stock dated January 22. III. 2003 is it stated that the other directors of the defunct Impact Corporation are absolved from their contribution and penalty liabilities to the SSS. SecTIOn 28(f) of the SSS Law provides that a managing head. director or partner is liable only for the PENALTIES of the employer corporation and not for unpaid SSS contributions of the employer corporation. only directors. petitioner filed a Motion for Reconsideration of the appellate court’s Decision but her Motion was denied in a Resolution dated 8 December 2005. applying Section 28(f) of the Social Security Law.[21] again ruled against petitioner. II. considering that the contribution delinquency assessment covered the period August 1980 to December 1984.Nowhere in the questioned Resolution dated May 28. 1996 nor in her Answer with Counterclaim dated May 18. the Commission did not acquire jurisdiction over the persons or estates of the other directors of Impact Corporation. Needless to state. the instant Motion for Reconsideration is hereby denied for lack of merit. The assailed Resolution dated 28 May 2003 and the Order dated 4 August 2004 of the Social Security Commission are AFFIRMED in toto. without changing its causes of action. directors or partners who shall be liable together with the Corporation. for the reason that their whereabouts are unknown. Finally. and petitioner submitted her Reply thereto on 4 April 2005. to the exclusion of the directors of the corporation namely: Eduardo de Leon. Under the SSS Law. 1999 that since the original Petition was filed by the SSS on July 3. 1995 to implead the responsible officers of Impact Corporation. she never participated in the daily operations of Impact Corporation. the instant Petition in which petitioner insists that the Court of Appeals committed grave error in holding her solely liable for the collected but unremitted SSS premium contributions and the consequent late penalty payments due thereon. trustees or officers who participate in unlawful acts or are guilty of gross negligence and bad . 1998.[22] Aggrieved. Respondent SSS filed its Comment dated 20 January 2005. The case record shows that there was failure of service of summonses upon respondents Eduardo de Leon. Petitioner elevated her case to the Court of Appeals via a Petition for Review. This defense was neither pleaded in her Motion to Dismiss dated January 17. deemed waived pursuant to Section 1. Garcia. it could not validly render any pronouncement as to their liabilities in this case. Ricardo de Leon. this Commission has already ruled in the Order dated April 27. Hence. the same was instituted well within the 20-year prescriptive period provided under Section 22 (b) of the SS Law. and was merely amended on December 1. who are all deceased. Even while she was a stockholder.

it is the obligation of Impact Corporation under the provisions of Sections 18. VI. Petitioner avers that under the aforesaid provision. SEC. person/s and/or estate/s of the other directors or officers of Impact Corporation. the petitioner should be absolved from liability. together with the employer’s shares of the contributions to the petitioner. the core issue to be resolved in this case is whether or not petitioner. In sum. Petitioner’s argument is ridiculous. distinguishes the penalties from the unremitted or unpaid SSS premium contributions. she is liable only to the extent of her subscription. Respondent Social Security System failed miserably in exerting efforts to acquire jurisdiction over the leviable assets of Impact Corporation. Otherwise. Petitioner in assailing the Court of Appeals Decision. can be made solely liable for the corporate obligations of Impact Corporation pertaining to unremitted SSS premium contributions and penalties therefore. a simplistic interpretation of the law is untenable. IV. Respondents are now going after petitioner who is the only surviving director of Impact Corporation. events which were neither desired nor caused by any act of the petitioner. that every part of the statute must be considered together with the other parts. She points out that although the appellate court is of the opinion that the concerned officers of an employer corporation are liable for the penalties for non-remittance of premiums. it still affirmed the SSC Resolution holding petitioner liable for the unpaid SSS premium contributions in addition to the penalties. It is a rule in statutory construction that every part of the statute must be interpreted with reference to the context. As a covered employer under the Social Security Law. as amended. 19 and 22 thereof. Thus. Every employer required to deduct and to remit such contributions shall be liable for . holding that it is distinct from the amount of the supposed SSS remittances. and kept subservient to the general intent of the whole enactment. Clearly. by reason of fortuitous events. 22.e.faith shall be personally liable.[23] The liability imposed as contemplated under the foregoing Section 28(f) of the Social Security Law does not preclude the liability for the unremitted amount. the corporation has already been dissolved. A cursory review of the alleged grave errors of law committed by the Court of Appeals above reveals there seems to be no dispute as to the assessed liability of Impact Corporation for the unremitted SSS premiums of its employees for the period January 1980 to December 1984. i. Impact Corporation suffered irreversible economic losses. as the only surviving director of Impact Corporation. Remittance of Contributions. being a mere stockholder. to deduct from its duly covered employee’s monthly salaries their shares as premium contributions and remit the same to the SSS. petitioner prays that the Decision dated 2 June 2005 and the Resolution dated 8 December 2005 of the Court of Appeals be reversed and set aside. Relevant to Section 28(f) is Section 22 of the same law. the liability does not include liability for the unremitted SSS premium contributions. V. While the Court of Appeals Decision provided that Section 28(f) refers to the liabilities pertaining to penalty for the non-remittance of SSS employee contributions. petitioner mistakenly concluded that Section 28(f) is applicable only to penalties and not to the liability of the employer for the unremitted premium contributions. The Honorable Commission seriously erred in not rendering a judgment by default against the directors upon whom it acquired jurisdiction. and a new one be rendered absolving her of any and all liabilities under the Social Security Law. Based on the foregoing.. -(a) The contributions imposed in the preceding Section shall be remitted to the SSS within the first ten (10) days of each calendar month following the month for which they are applicable or within such time as the Commission may prescribe. for and in their behalf. From all indications. There is also no dispute as to the fact that the employees’ SSS premium contributions have been deducted from their salaries by Impact Corporation. The interpretation petitioner would like us to adopt finds no support in law or in jurisprudence.

is among those officers covered by Section 28(f) of the Social Security Law. An interpretation thereof is necessary in instances where a literal interpretation would be either impossible or absurd or would lead to an injustice. any contribution so paid in advance but not due shall be credited or refunded to his employer. Petitioner invokes the rule in statutory construction called ejusdem generic. If deemed expedient and advisable by the Commission. but are to be held as applying only to persons or things of the same kind or class as those specifically mentioned. an interpretation thereof is resorted to. This Court agrees in petitioner’s observation that the SSS did not even deny nor rebut the claim that petitioner was not the “managing head” of Impact Corporation. one must be the “managing head.” This Court though finds no need to resort to statutory construction.[26] The fact that a law admits of different interpretations is the best evidence that it is vague and ambiguous. that is.[28] Petitioner also challenges the finding of the Court of Appeals that under Section 28(f) of the Social Security Law. he shall pay besides the contribution a penalty thereon of three percent (3%) per month from the date the contribution falls due until paid. Respondents present a more logical interpretation that is consistent with the provisions as a whole and with the legislative intent behind the Social Security Law. petitioner interprets Section 28(f) of the Social Security Law as applicable only to penalties and not to the liability of the employer for the unremitted premium contributions. Section 28(f) of the Social Security Law provides the following: (f) If the act or omission penalized by this Act be committed by an association. and not necessarily a “managing” director or officer. the collection and remittance of contributions shall be made quarterly or semi-annually in advance. It is a cardinal rule in statutory construction that in interpreting the meaning and scope of a term used in the law. However. a mere director or officer of an employer corporation. every employer is required to deduct and remit such contributions penalty refers to the 3% penalty that automatically attaches to the delayed SSS premium contributions.[27] In the instant case. to be held liable under Section 28(f) of the Social Security Law.” or “managing partner.their payment and if any contribution is not paid to the SSS as herein prescribed. application not interpretation thereof is imperative. must be made. directors or partners shall be liable to the penalties provided in this Act for the offense. such general words are not to be construed in their widest extent. can be held liable for the unpaid SSS premium contributions. the Court of Appeals rightly held that petitioner.[25] However. for committed by a juridical person The said provision does not qualify that the director or partner should likewise be a “managing director” or “managing . According to petitioner. its managing head. The spirit. This Court cannot be made to accept an interpretation that would defeat the intent of the law and its legislators. Under Section 22(a). as well as the intendment of the law. a careful review of the whole law involved. A law is deemed ambiguous when it is capable of being understood by reasonably well-informed persons in either of two or more senses. directors. the contributions payable by the employees to be advanced by their respective employers: Provided. Elementary is the rule that when laws or rules are clear. or offenses (3) partners. as a director of Impact Corporation. it is incumbent upon the judge to apply them regardless of personal belief or predilections . That upon separation of an employee. partnership. where general words follow an enumeration of persons or things. corporation or any other institution.” “managing director. by words of a particular and specific meaning.[24] Nowhere in the provision or in the Decision can it be inferred that the persons liable are absolved from paying the unremitted premium contributions.when the law is unambiguous and unequivocal. rather than the letter of a law determines construction of a provision of law. Section 28(f) of the Social Security Law imposes penalty on: (1) (2) the managing head. where the language of a statute is vague and ambiguous.

Following this. acting through its directors. Liability of directors. to carry out other similar unjustifiable aims or intentions. officers and employees. (b) act in bad faith or with gross negligence in directing the corporate affairs. only directors. When a director or officer has consented to the issuance of watered stocks or who. are its sole liabilities. . 31. a corporate director. trustee or officer has contractually agreed or stipulated to hold himself personally and solidarily liable with the Corporation. or as a subterfuge to commit injustice and so circumvent the law. A corporation is a juridical entity with legal personality separate and distinct from those acting for and in its behalf and. provides: SEC.Directors or trustees who willfully and knowingly vote for or assent to patently unlawful acts of the corporation or who are guilty of gross negligence or bad faith in directing the affairs of the corporation or acquire any personal or pecuniary interest in conflict with their duty as such directors. by specific provision of law. The situation of petitioner. to shield or perpetrate fraud. . 2. trustees or officers. she is liable only to the extent of her subscription. and that being a mere stockholder. When a director. officer.[30] A director. stipulating on the liability of directors. Basic is the rule that a corporation is invested by law with a personality separate and distinct from that of the persons composing it as well as from that of any other legal entity to which it may be related. and employee of a corporation are generally not held personally liable for obligations incurred by the corporation. When directors and trustees or. trustees or officers. its stockholders or members and other persons. When a director. trustee or officer is made. may be held solidarily liable with the corporation in the following instances: 1. 4. its stockholders or members. 31. in general. Section 31 of the Corporation Code. and other persons. [32] The aforesaid provision states: SEC. did not forthwith file with the corporate secretary his written objection thereto. or trustees shall be liable jointly and severally for all damages resulting therefrom suffered by the corporation. Section 28(f) of the Social Security Law imposes a civil liability for any act or omission pertaining to the violation of the Social Security Law. however. or trustees shall be liable jointly and severally for all damages resulting therefrom suffered by the corporation. in appropriate cases. This situation might arise when a corporation is used to evade a just and due obligation or to justify a wrong. Section 31 of the Corporation Law provides: Taking a cue from the above provision. trustees or officers who participate in unlawful acts or are guilty of gross negligence and bad faith shall be personally liable. personally liable for his corporate action. a trustee or an officer. trustees.[31] Thus. having knowledge thereof. the general rule applied is that obligations incurred by the corporation. or officers.partner. as a director of Impact Corporation when said corporation failed to remit the SSS premium contributions falls exactly under the fourth situation. (c) are guilty of conflict of interest to the prejudice of the corporation. Liability of directors. there are peculiar situations or valid grounds that can exist to warrant the disregard of its independent being and the lifting of the corporate veil. 3. its stockholders or members and other persons. from the people comprising it. to wit: . the officers of a corporation-(a) vote for or assent to patently unlawful acts of the corporation.”[29] The unambiguous. law is clear and Petitioner nonetheless raises the defense that under Section 31 of the Corporation Code. Being a mere fiction of law.Directors or trustees who willfully and knowingly vote for or assent to patently unlawful acts of the corporation or who are guilty of gross negligence or bad faith in directing the affairs of the corporation or acquire any personal or pecuniary interest in conflict with their duty as such directors.

In fact. it is an on-going. viable.[33] On the other hand. Although as a rule. as one of the directors of Impact Corporation. its managing head. directors or partners shall be liable to the penalties provided in this Act for the offense. to wit: (h) Any employer who. Petitioner’s defense that since Impact Corporation suffered irreversible economic losses. one of which is when the employer corporation is no longer existing and is unable to satisfy the judgment in favor of the employee. the officers should be held liable for acting on behalf of the corporation. Respondents would like this Court to apply another exception to the rule that the persons comprising a corporation are not personally liable for acts done in the performance of their duties. and should have been remitted to the SSS within the first 10 days of each calendar month following the month for which they are applicable or within such time as the SSC prescribes. The evidence adduced totally belies this claim. partnership. fails to remit the said deductions to the SSS within thirty (30) days from the date they became due shall be presumed to have misappropriated such contributions or loan amortizations and shall suffer the penalties provided in Article Three hundred fifteen of the Revised Penal Code. are liable for the unpaid SSS contributions of their employees. and profitable enterprise” which has “sufficient assets” and “actual and potential incomegeneration capabilities. petitioner.[35] This Court also notes the evident failure on the part of SSS to issue a judgment in . in Section 28 thereof. one of which is when the employer corporation is no longer existing and is unable to satisfy the judgment in favor of the employee. Following the foregoing pronouncement. the officers of a corporation are liable in behalf of a corporation. corporation or any other institution. this rule admits of exception. [34] The rationale cited by respondents in the two preceding paragraphs need not have been applied because the personal liability for the unremitted SSS premium contributions and the late penalty thereof attaches to the petitioner as a director of Impact Corporation during the period the amounts became due and demandable by virtue of a direct provision of law. is also untenable. the latest SSS form RIA submitted by Impact Corporation is dated 7 May 1984. The assessed SSS premium contributions and penalty are obligations imposed upon Impact Corporation by law. the officers and members of a corporation are not personally liable for acts done in performance of their duties. viable. which no longer exists or has ceased operations. together with the other directors of the defunct corporation. this rule admits of exceptions. the officers and members of a corporation are not personally liable for acts done in the performance of their duties. A reference to the copy of the Petition for Suspension of Payments filed by Impact Corporation on 18 March 1983 before the SEC contained an admission that: “[I]t has been and still is engaged in business” and “has been and still is engaged in the business of manufacturing aluminum tube containers” and “in brief. the officers should be held liable for acting on behalf of the corporation. and by reason of fortuitous events. The Court of Appeals in the appealed Decision stated: Anent the unpaid SSS contributions of Impact Corporation’s employees. profitable enterprise. presented this discussion: Although as a rule. In fact. after deducting the monthly contributions or loan amortizations from his employees’ compensation. The Social Security Law provides. in its Resolution. she should be absolved from liability. criminal actions for violations of the Social Security Law are also provided under the Revised Penal Code.(f) If the act or omission penalized by this Act be committed by an association.” The foregoing document negates petitioner’s assertion and supports the contention that during the period involved Impact Corporation was still engaged in business and was an ongoing. (i) Criminal action arising from a violation of the provisions of this Act may be commenced by the SSS or the employee concerned either under this Act or in appropriate cases under the Revised Penal Code: x x x. the SSC. x x x.

Under the aforesaid provision. the Commissioner is mandated to render a decision either granting or denying the petition. which it invests in order to deliver the basic social benefits and privileges to its members. develop. the Hearing Commissioner may. the Decision of the Court of Appeals dated 2 June 2005 in CA-G. or motu proprio. The soundness and viability of the funds of the SSS in turn depends on the contributions of its covered employee and employer members. In 1998. this Court sees it proper to quote verbatim respondents’ prefatory statement in their Comment: The Social Security System is a government agency imbued with a salutary purpose to carry out the policy of the State to establish. the Sangguniang Bayan passed Ordinance 001 entitled “An Ordinance Regulating the Operation of Cockpits and Other Related Game-Fowl Activities in the Municipality of Bula. CONSUELO YNARES-SANTIAGO Associate Justice Chairperson. by virtue of a council resolution. upon his non-filing of a responsive pleading after summons was served on him. Municipal Corporation – Adminsitrative Powers – Cockfighting Canet was a cockpit operator in Bula. Petitioner Immaculada L. Garcia. Following the doctrine laid down in Laguna Transportation Co. if respondent fails to answer within the time prescribed. In 1999. pursuant to the foregoing. WHEREFORE. and when invoked in support of an end subversive of this policy.[37] The sympathy of the law on social security is toward its beneficiaries. This Court cannot and will not allow itself to be made an instrument nor be privy to any attempt at the perpetration of injustice. promote and perfect a sound and viable tax exempt social security system suitable to the needs of the people throughout the Philippines which shall promote social justice and provide meaningful protection to members and their beneficiaries against the hazards of disability. Camarines Sur while Decena was the mayor therein. as sole surviving director of Impact Corporation is hereby ORDERED to pay for the collected and unremitted SSS contributions of Impact Corporation. v. upon motion of petitioner. Camarines Sur and Providing Penalties for any Violation to (sic) the Provisions Thereof. Third Division CERTIFICATION Pursuant to Section 13. sickness. Inc. and the Division Chairperson’s Attestation. This Court will not turn a blind eye on the perpetration of injustice.[36] On a final note. death and other contingencies resulting in loss of income or financial burden. I attest that the conclusions in the above Decision were reached in consultation before the case was assigned to the writer of the opinion of the Court’s Division.default against Ricardo de Leon.[38] this Court rules that although a corporation once formed is conferred a juridical personality separate and distinct from the persons comprising it. The entitlement to and amount of benefits and privileges of the covered members are contribution-based. maternity. As can be gleaned from Section 11 of the SSS Revised Rules of Procedure. Both the soundness and viability of the funds of the SSS as well as the entitlement and amount of benefits and privileges of its members are adversely affected to a great extent by the non-remittance of the much-needed contributions. was allowed to operate a cockpit in Bula.. it is hereby certified that the conclusions in the above Decision were reached in consultation before the case was assigned to the writer of the opinion of the Court’s Division. will be disregarded by the courts.” This . SP No. The concept cannot be extended to a point beyond its reasons and policy. old-age. Social Security System. declare respondent in default and proceed to receive petitioner’s evidence ex parte and thereafter recommend to the Commission either the granting or denial of the petition as the evidence may warrant.R. Canet. it is but a legal fiction introduced for purposes of convenience and to subserve the ends of justice. Article VIII of the Constitution. The case is REMANDED to the SSS for computation of the exact amount and collection thereof. 85923 is hereby AFFIRMED WITH FINALITY. who was the vice-president and officer of the corporation.

L. ISSUE: Whether or not Decena can be compelled to issue a permit sans a municipal ordinance which would empower her to do so. The tax ordinances Canet mentioned contain general provisions for the issuance of business permits but do not contain specific provisions prescribing the reasonable fees to be paid in the operation of cockpits and other game fowl activities. To compel Decena to issue the mayor’s permit would not only be a violation of the explicit provisions of Section 447 of the Local Government Code of 1991. The 15-day period may either be on the 15th day or on the 16th day depending on the language used by Congress on fixing the . Noveanne Cabbuag. unless it is otherwise provided”. Abiera. P. Further. the authority to give licenses for the establishment. Decena denied Canet’s application on the ground that under the LGC of 1991 (Section 447 (a) (3) (v)). President Corazon Aquino issued Executive Order 200. Therefore. operation and maintenance of cockpits as well as the regulation of cockfighting and commercial breeding of gamecocks is vested in the Sangguniang Bayan. The council then decided to shelf the ordinance indefinitely. but would also be an undue encroachment on Decena’s administrative prerogatives. Canet applied for a mayor’s permit for the operation of his cockpit. unless it is otherwise provided”. 1987. On June 18. Canet then sued Decena on the ground that he should be given a permit based on the 1998 resolution allowing him to operate a cockpit as by virtue of local municipal tax ordinances which generally provide for the issuance of a mayor’s permit for the operation of businesses. the 1998 resolution allowing Canet to operate cockpits cannot be implemented without an ordinance allowing the operation of a cockpit (ordinance vs resolution). EFFECTIVITY Legal OF LAWS Research L. Jaytrich I. she cannot issue the said permit inasmuch as there was no ordinance passed by the Sangguniang Bayan authorizing the same. HELD: No. providing for the publication of laws either in the Official Gazette or in a newspaper of general circulation in the Philippines as a requirement for their effectivity. the “Laws shall take effect after fifteen days following the completion of their publication in the Official Gazette or in a newspaper of general circulation in the Philippines. Rose Anne Banogon. Meanwhile.ordinance was submitted to Decena for her approval but she denied it because the said ordinance does not contain rules and regulations as well as a separability clause. Thus. LEGAL BASIS Article 2 of the Civil Code of the Philippines provides that “Laws shall take effect after fifteen days following the completion of their publication in the Official Gazette.

effectivity date of the statute. shall be published as a condition for their effectivity. • 16th day: If the law declares that it shall become effective “after 15th days following its publication. then it shall take effect after fifteen days following the completion of its publication. It is not sold on newsstands and its circulation is very limited and often delayed. Example: Section 28 of Republic Act no. which cannot in any event be omitted. The clause “unless it is otherwise provided” refers to the date of effectivity and not to the requirement of publication itself. “Laws” mentioned in Article 2 of the Civil Code should refer to all laws and not only to those of general application. including those of local application and private laws.” it means that its effectivity is on the 16th day thereafter. The legislative may. This Act shall take effect fifteen (15) days after its publication in two (2) national newspapers of general circulation. 8. The publication shall not be later than seven (7) days after the approval hereof. executive orders. This Act shall take effect fifteen (15) days following its publication in the Official Gazette or in two (2) national newspapers of general circulation. For example. etc. Many do not even know there is such publication.” it means that its effectivity is on the 15th day after such publication. and Municipal Circuit Trial Courts. 28. The Official Gazette is said to be not an adequate medium in the publication of laws. 7691 (“An Act Expanding the Jurisdiction of the Metropolitan Trial Courts. Unless the publication of the law is full or complete. without its previous publication. in its discretion. a newspaper is considered of general circulation if its circulation is made within the court’s jurisdiction. 7659 (“An Act to Impose the Death Penalty on Certain Heinous Crimes” provides: Sec. the publication must be effected on Official Gazette or in a newspaper of general circulation in the Philippines. circulars and notices in this country of more than 7. or any other date. . • 15th day: If the law declares that it shall become effective “15th days after its publication. there is no publication to be considered at all since its purpose is to inform the public of the full contents of the law. On the other hand. Example: Section 8 of Republic Act No. All statutes. provide that the usual 15-day period shall be shortened or extended. Based on Article 2 of Civil Code. This clause does not mean that the legislature may make the law effective upon approval. Very few people read the Official Gazette. Municipal Trial Court. published at regular intervals for the dissemination of local news and general information. When the law is silent as to its effectivity. the Civil Code did not become effective after fifteen days from is publication in the Official Gazette but “one year” after its publication.”) provides: Sec.100 islands.

circulars which are mere statement of a general policy as to how the law should be construed do not need publication in the Official Gazette for their effectivity.Covered by these rules are the following: A. The text of the ordinance or resolution shall be disseminated and posted in Filipino or English and in the language or dialect understood by the majority of the people in the local government unit concerned. as the case may be. this on the general principle and theory that before the public is bound by its contents. (b) The secretary to the sanggunian concerned shall cause the posting of an ordinance or resolution in the bulletin board at the entrance of the provincial capitol and the city. whenever the same are validly delegated by the legislature or directly conferred by the Constitution. regulation. Monetary Board Circulars – Circulars issued by the Monetary Board are required to be published if they are meant not merely to interpret but to “fill in the details” of the Central Bank Act which that body is supposed to enforce. But if the regulations are merely interpretative and those regulations which are merely internal. C. or barangay hall in at least two (2) conspicuous places in the local government unit concerned not later than five (5) days after approval thereof. the same shall take effect after (10) days from the date a copy thereof is posted in a bulletin board at the entrance of the provincial capitol or city. and the secretary to the sanggunian shall record such fact in book kept for the . Administrative rules and regulations – Required to be published if their purpose is to enforce or implement existing laws pursuant also to a valid delegation. circulars which prescribe penalty for their violation should be published before becoming effective. Presidential Decrees and Executive Orders – Presidential issuances promulgated by the President in the exercise of legislative powers. or barangay hall. As a rule. those that regulate only the administrative agency’s personnel and not the public. D. i. they are not required to be published. or circular must first be published and the people officially and specifically informed of said contents and the penalties for violation thereof. and in at least two (2) other conspicuous places in the local government unit concerned. However.. (a) unless otherwise stated in the ordinance or the resolution approving the local development plan and public investment program. municipal. Effectivity of Ordinances or Resolutions. Section 59. a law. municipal.e. Municipal ordinances – These are not covered by Article 2 of the Civil Code but by Section 59 of the Local Government Code. B. Neither is publication required for the so-called letters of instruction issued by administrative superiors concerning the rules or guidelines to be followed by their subordinates in the performance of their duties. especially its penal provisions.

statutes may be permanent and indefinite or temporary. In the absence of any newspaper of general circulation within the province. On the other hand. the ordinance or resolution shall be published in any newspaper of general circulation. the Court affirmed the necessity for all presidential decrees and issuance of general application to be published in the Official Gazette otherwise. Petitioners Tañada et al filed a motion for reconsideration and clarification of the decision thus transpired the second Tañada vs. (d) In the case of highly urbanized and independent component cities. and they terminate upon the expiration of the term therein stated or upon the occurrence of certain events. LANDMARK CASE The Supreme Court over the years has ruled over some controversial cases that have been memorable not only because they were publicized but because of the standards or precedents that they have set for succeeding cases. The landmark case that has been basis of subsequent court decisions as well as text book annotations with regards to the effectivity of laws is the Tañada v Tuvera (146 SCRA 446). II. The main issue in the case is whether the clause "unless it is otherwise provided. Temporary statutes are those that. in the first Tañada v Tuvera (136 SCRA 27) case. Only three judges concurred in the decision. according to their provisions. as certified by the city treasurer. stating the dates of approval and posting. A highly urbanized city is a city with a minimum population of two hundred thousand as certified by the National Census Statistics Office and with the latest annual income of at least fifty million pesos based on the 1991 constant prices. The court ruled that the clause subject to contention refers to the date of effectivity and not to the requirement of publication itself which they emphasized cannot be omitted in any .purpose. Tuvera case which was ruled upon by the Court in 29 December 1986. On 24 April 1985. No repealing statute is necessary to bring a temporary law to an end. posting of such ordinances shall be made in all municipalities in cities of the province where the sanggunian of origin is situated. (c) The gist of all ordinances with penal sanctions shall be published in a newspaper of general circulation within the province where the local legislative body concerned belongs." in Article 2 of the Civil Code. be published once in a local newspaper of general circulation with the city: Provided. refers to the date of effectivity or to the requirement of publication itself. majority of the statutes are permanent and indefinite. in addition to being posted. In terms of their duration and effect. that in the absence thereof. It continues in force until changed or repealed by the legislature. are in force only for a limited period. these laws shall not be effective. the main features of the ordinance or resolution duly enacted or adopted shall.

the same docketed as Case SP-32311. assignments of personnel. publication requirements does not apply to (1) interpretative regulations and those merely internal in nature. the Philippine Veterans Bank Employees Union-N. (2) Letters of Instructions issued by administrative superiors concerning the rules or guidelines to be followed by their subordinates in the performance of their duties. The clause does not allow the legislature to make law effective in any date without publication of such law. if a law is to be deemed effective. JURISPRUDENCE Facts: Sometime in 1985. filed claims for accrued and . 2000).e. represented by Perfecto V. Validity of laws also depends on its effect to public interest. the Central Bank of the Philippines filed with Branch 39 of the Regional Trial Court of Manila a Petition for Assistance in the Liquidation of the Philippine Veterans Bank. III. No 200 allowing publication in newspapers (Pineda. (5) Monetary Board circulars to "fill in the details" of the Central Bank Act which that body is supposed to enforce. and (3) instructions of Ministry heads on case studies. (2) presidential decrees and executive orders promulgated by the President in the exercise of legislative powers whenever the same are validly delegated by the legislature or directly conferred by the Constitution. including those of local application and private laws.B. Fernandez. i. It was also clarified in the case that the “laws” in the said article of the code should refer to all laws and not only to those of general application for the reason that in general. The legislature however has the discretion to shorten or extend the usual fifteen-day period. Municipal ordinances are not covered by this rule but by the Local Government Code. On the other hand.E.way.O. regulating only the personnel of the administrative agency and not the public.U.The title of the act is “Providing for the Publication of Laws either in the Official Gazette or in a Newspaper of General Circulation in the Philippines as a Requirement for their Effectivity. It was also added that ‘publication must be in full or it is no publication at all’ since the purpose of publication itself is to make the public aware of the contents of the laws. all laws affect people even those that do not apply directly to them. The requirement of publication applies to (1) all statutes. (3) Administrative rules and regulations for the purpose of enforcing or implementing existing law pursuant also to a valid delegation. etc. (PVBEU-NUBE). Thereafter. Publication originally should be made in the Official Gazette and not anywhere else. (4) Charter of a city notwithstanding that it applies only to a portion of the national territory and directly affects only the inhabitants of that place. although this requirement was amended by E. A law is required to invariably affect public interest in order to be valid even if it is applied only to an individual or a group.

that the efficiency of said law is conditioned on the approval of a rehabilitation plan by the Monetary Board which is April 10.” In the present case. PVBEU-NUBE and Fernandez filed the Petition for Prohibition with Petition for Preliminary Injunction and application for Ex Parte Temporary Restraining Order. On 2 January 1992. Issue: Whether RA 7169 became effective only on 10 March 1992 or fifteen (15) days after its publication in the Official Gazette. 1992. and not on 10 . it is clear that the legislature intended to make the law effective immediately upon its approval. the legislature has the authority to provide for exceptions. among others. Aquino on 2 January 1992. Held: Both NO. On 8 March 1991. 7169 became effective only on March 10. Despite the legislative mandate for rehabilitation and reopening of PVB. laws take effect after fifteen (15) days following the completion of their publication in the Official Gazette or in a newspaper of general circulation in the Philippines. No. PVBEU-NUBE moved to disqualify the trial court judge from hearing the above case on grounds of bias and hostility towards PVBEU-NUBE.A. et.unpaid employee wages and benefits with said court in SP-32311. or whether the effectivity of said law is conditioned on the approval of a rehabilitation plan by the Monetary Board. While as a rule. said law became effective on said date. After lengthy proceedings. al. as indicated in the clause “unless otherwise provided. PVBEU-NUBE filed with the labor tribunals their residual claims for benefits and for reinstatement upon reopening of the bank. then it became legally effective on 24 February 1992. the trial court judge continued with the liquidation proceedings of the bank. As regard to the claim of respondents Central Bank and Liquidator of PVB that R. Assuming for the sake of argument that publication is necessary for the effectivity of RA 7169. Moreover. Sometime in May 1992. while PVBEU-NUBE’s claims have been frozen to their prejudice. the Central Bank issued a certificate of authority allowing the PVB to reopen. 1992 or fifteen (15) days after its publication in the Official Gazette. Thereafter." Hence. Therefore. However. the contention of intervenors VOP Security. and. the date when the same was published in the Official Gazette. PVBEU-NUBE learned that the Central Bank and the liquidator of the Philippine Veterans Bank were set to order the payment and release of employee benefits upon motion of another lawyer. many remain unpaid. the Congress enacted Republic Act 7169 providing for the rehabilitation of the Philippine Veterans Bank. due to the piecemeal hearings on the benefits. It is undisputed that RA 7169 was signed into law by President Corazon C. partial payments of the sums due to the employees were made. Section 10 of RA 7169 provides that "This Act shall take effect upon its approval.

(Black’s Law Dictionary. Individuals would merely invoke the useful defense of ignorance of law which could barely be overcome by evidence to the contrary because ignorance is a mental state. BIBLIOGRAPHY: Agpalo. E. it was held that “the principle of ignorantia legis neminem excusat is a rule of necessity and is limited in its scope by the reason of it. Persons. Vega. On the other hand. R. without the notice and publication that a law was enacted. all laws could easily be evaded by persons if there be no provision as Article 3 of the Civil Code. as erroneously claimed by the Central Bank and Liquidator. Statutory Construction. E. 2001 Pineda. 105364. as amended). mere ignorance in fact of the law would furnish immunity from liability for actual loss for violation of personal and property rights. or matter under consideration. The Law on Persons and Family Relations. No. Plankington Packing Co. Rationale Reality would show us that inarguably.” Thus. duty. 386. Inc. Even justices are not cognizant of all the laws. However. (2006). (2009). Zulueta (1 Phil. LEGAL BASIS law does not excuse any one from compliance therewith” is founded not only on expediency and policy but also on necessity. 2004) I. “Ignorance of the law excuses no one from compliance therewith”. 2004) Ignorance of law is want of knowledge or acquaintance with laws of the land in so far as they apply to the act. No.” The Need for Publication According to Article 3 of the Civil Code of the Philippines (R. The Latin legal maxim “Ignorantia legis non excusat” (Ignorance of the law excuses no one) is in consonance with the above-mentioned article.March 1992. Tañada vs.T. ignorance of fact is want of knowledge of some fact or facts constituting or relating to the subject matter in hand. Inc. It can be used as an The Supreme Court held in the celebrated case of Tanada v.A. there is a presumption that all persons know the laws so long as they have been promulgated accordingly and any infraction or violation thereof is inexcusable by reason of ignorance.. G. It was stated in the words of Dean Ernesto Pineda (2004) that “remove said principle of law. Manila: REX Book Store. This presumption is conclusive. “ Furthermore. in the case of Topelewsky v. It is the state of unawareness of something or an act under consideration. Philippine Veterans Bank Employees Union vs. Quezon City: Central Professional Books. relation. the Supreme Court reaffirmed that the general principle “ignorance of the INTRODUCTION Black’s Law Dictionary (2004) defines the word ignorance as “want or absence of knowledge”. Thus.R. violators of rights or criminals will have their feast in the midst of their violations and crimes by simply claiming or feigning ignorance of the law. Justice will easily be frustrated if the parties could successfully plead ignorance of the law and escape the legal consequences of their acts or be excused from the nonfulfillment of their obligations. (Pineda. In the case of Zulueta v. June 28. no person can be fully aware of the existence of all the laws. Tuvera. Inc. 146 SCRA 446 (1986) excuse or can be a ground for relief. E. Manila: REX Book Store. 254). (2000). Otherwise. L. Rabuya. Tuvera that “the conclusive presumption that every person knows the law presupposes that the law has been published if the presumption is to have any legal justification at all. there would be no basis for the .

HE IS DEEMED A POSSESSOR IN GOOD FAITH WHO IS NOT AWARE THAT THERE EXISTS IN HIS TITLE OR MODE OF ACQUISITION ANY FLAW WHICH INVALIDATES IT. his property and successional rights. who should be treated differently due to their lack of intelligence. it was ruled by the Supreme Court in re Filart (40 Phil. why should a layman be held accountable for his honest mistake on a doubtful legal issue?” It was held in the case of People v. To support the foregoing. when there is a mistake on a dubious question of law. NT and SA v. there is no conclusive presumption of knowledge of laws. MISTAKE UPON A DOUBTFUL OR DIFFICULT QUESTION OF LAW MAY BE THE BASIS OF GOOD FAITH. this Court (Supreme Court) adopted the well-imbedded principle in our jurisdiction that there is no judicial notice of any foreign law. Cheong. defined by Justice Luis Reyes in his book entitled “The Revised Penal Code: Criminal Law” as a branch or division of law which defines crimes. treats of their nature. and when one-half of the lawyers in all controversies in a legal question are wrong. ignorance of a foreign law is not a mistake of the law. Processual Presumption Doctrine “when even the highest courts are sometimes divided upon difficult legal questions. wrongs redressed and relief obtained (Diaz. Thus. the maxim ignorantia legis neminem excusat should have no appropriate application. Navarro that the rule should not be applied with equal force to minors. or penal law. . 16 Phil. “In a long line of decisions. 1334. HE IS DEEMED A POSSESSOR IN BAD FAITH WHO POSSESSES IN ANY CASE CONTRARY TO THE FOREGOING. 43 Phil. it was said that “it would be the height of injustice to punish or otherwise burden a citizen for the transgression of a law of which he had no notice whatsoever. the laws referred to are the Philippine laws. our courts will presume that the foreign law is the same as our local or domestic or internal law. and provides for their punishment (2008) and whether substantive law. A foreign law must be properly pleaded and proved as a fact. and the effects of his obligations and contracts (2008). the provisions of the Civil Code which relaxed the rule are as follows: ART. This is what we refer to as the doctrine of processual presumption. mistake of law does not vitiate consent. 137). if the foreign law involved is not properly pleaded and proved. or in its construction and application. However. 526. and consequently. and necessity so as to prevent non-observance of the law.” Coverage In the Article 3 of the Civil Code. The Court provided that. As regards foreign laws. Likewise. but a mistake of the fact. 205) that a lawyer should not be disbarred due to the commission of an honest mistake or error of law. on grounds of expediency. MUTUAL ERROR AS TO THE LEGAL EFFECT OF AN AGREEMENT WHEN THE REAL PURPOSE OF THE PARTIES IS The doctrine of processual presumption was defined in the case of Bank of America. Sy Joc Lieng v. Even our courts cannot take judicial notice of them. this is parallel to mistake of fact. which is a core law which determines rights and obligations or remedial law which provides means or method whereby causes of action may be effectuated.application of the maxim “ignorantia legis non excusat”. policy. (Adong v. and foreign laws must be specially alleged and proved. Thus. which is defined by Justice Edgardo Paras in his book “The Civil Code of the Philippines Annotated” as a branch of law that generally treats of the personal and family relations of an individual. ART. whether civil law. Also. in the aforementioned case. 2007). It applies to all kinds of domestic laws. not even a constructive one.” When the Rule May be Relaxed Generally. 43. American Realty Corporation and Court of Appeals. As contained in the report of the Code Commission. Syquia.

For instance. Doña Francisca Zulueta. Don Clemente Zulueta. 1902 . and due to his belief that his wife is dead. In this example. that the term fixed for the filing of the demand having expired. Later on. on the ground that it was not presented within three days. it was a mistake of fact and not of law and therefore. married a second time. the court by a providencia of May 7 fixed the term of fifteen days as that within which Doña Francisca should formulate her demand. No. and upon the application of Doña Francisca. declaring. the record was delivered to her for examination. which term was subsequently enlarged seven days on petition of Doña Francisca. In the course of the voluntary testamentary proceedings instituted in the Court of First Instance of Iloilo by Don Jose. The procedure marked out in articles 1062 and 1067 of the Ley de Enjuiciamiento Civil was then followed. FRANCISCA ZULUETA G. after a terrible earthquake. Alicia turned out be alive. which the court declined to admit. of whom Don Jose and Doña Francisca each nominated one. FACTS: Don Jose Zulueta and his sister. whose report was filed on March 29. On June 5 Doña Francisca petitioned the court. On April 25. three auditors were appointed to make a division of the estate under article 1053 of the Ley de Enjuiciamiento Civil. Ignorance of Law vis-à-vis Ignorance of Fact While ignorance of law is inexcusable. ignorance of fact may excuse a party from the legal consequences of his act. Alfredo is not liable for bigamy because he believed that his wife was dead though it was subsequently proved to be erroneous. the court. The auditor umpire. AND IT WAS UNDULY DELIVERED THROUGH MISTAKE. who died in Iloilo in 1900. directed that the procedure prescribed for declarative actions be followed. he may be excused. 428/ April 30. PAYMENT BY REASON OF A MISTAKE IN THE CONSTRUCTION OR APPLICATION OF A DOUBTFUL OR DIFFICULT QUESTION OF LAW MAY COME WITHIN THE SCOPE OF THE PRECEDING ARTICLE. furthermore. stating that the new Code of Procedure enacted by the Civil Commission was soon to become operative. On June 29 Doña Francisca interposed an appeal against the auto of June 22. and each rendered a separate report. and that she deemed it more advantageous to her rights that the declarative action which she had to bring should be governed by the new Code rather than that then in force. the third or auditor umpire being chosen by common accord of the parties. Doña Francisca has lost her right to institute the action. Alfredo could not find his wife Alicia. 1901. The two auditors nominated by the parties respectively failed to agree. agreed with and accepted in its entirety the report of the auditor nominated by Don Jose. THE OBLIGATION TO RETURN IT ARISES. she filed her opposition to the report of the auditor umpire.R. This petition the court denied in an auto rendered June 15.FRUSTRATED. MAY VITIATE CONSENT. Clearly. 2155. and that the record ART. and a meeting of the interested parties having been had. 2154. IF SOMETHING IS RECEIVED WHEN THERE IS NO RIGHT TO DEMAND IT. as provided in Article 1069 of the Ley de Enjuiciamiento Civil. by a providencia of May 4. and asking that proceedings in the action should be suspended till the new Code went into effect. be again delivered to Doña Francisca in order that she might formulate her demand in accordance with Article 1071 of the Ley de Enjuiciamiento Civil. as prescribed in article 363 of the Ley de Enjuiciamiento Civil. LANDMARK CASE JOSE ZULUETA vs. ISSUE: Whether Doña Francisca is entitled to relief against the consequences of her II. are sole heirs under the will of their father. On petition of Don Jose. ART.

et al.00 each. No. he could have easily rectified the mistake by recalling the warrants of arrest. without any word on the conduct of a preliminary investigation. judge nilo p. a principle "founded not only on expediency and policy but on necessity." Petition is denied and the judgment appealed from affirmed. Miaque. on September 8. the respondent Judge conducted a preliminary investigation and thereafter issued on September 2. et. ISSUE: Whether the respondent judge had authority to conduct a preliminary investigation and to issue the corresponding warrants of arrest in the said libel case. He also expressed that had his attention been earlier called by the parties. He added that he had been sufficiently chastised in several issues of the Daily Informer which publicized his blunder. grave abuse of judicial functions and authority and issuing patently illegal orders. The respondent Judge in his Comment admitted his mistake and explained that the same was his first libel case and that he issued the challenged warrants in good faith. presided by respondent Judge Nilo P. and there is no reason why the general principle. he promised to keep himself updated on laws. No. 1998.M. 1998. a widely circulated newspaper in the Western Visayas. For his lapse. 4363. III.. Iloilo. v. MTJ-02-1412/ March 28. who are connected with the Daily Informer. pamonag A. with costs to the appealing party both as to the petition and the appeal. vs. 1998 warrants for the arrest of the herein complainants. he had never brought dishonor to his family and to the court. He said that he erroneously relied on a pamphlet of the Revised Penal Code quoting Article 360 which consisted only of four (4) paragraphs. were charged before the Municipal Circuit Trial Court of Pototan-Mina. et al. as well as on jurisprudence and circulars of the Supreme Court. the respondent Judge neither has the authority to conduct a preliminary investigation nor to issue warrants for their arrest." that "ignorance of the law does not excuse from compliance therewith" should be relaxed. 000. Thereafter. RULING: . al. but it was a mistake of law. complainants. Bernie Miraque.A. RULING: The Supreme Court held that the mistake in this instance was her own. 2003 FACTS: On August 27. Respondent likewise stressed that except for this single honest mistake. The framers of Act No. In 1999.” Complainants contended that under Article 360 of the Revised Penal Code.failure to interpose her appeal against the auto of June 22 within the period fixed by the law. complainants filed an administrative case against the respondent Judge for “gross ignorance of the law. If such were the effect of this legislation the court "would be involved and perplexed with questions incapable of any just solution and embarrassed by inquiries almost interminable. the latter filed a petition for prohibition with prayer for the issuance of a temporary restraining order and/or preliminary injunction seeking to enjoin the respondent judge or any other officer from enforcing the assailed warrants of arrest. Pamonag with the crime of libel entitled “Fraulen Cordero. fixing the bail at P10. LATEST JURISPRUDENCE Bernie G. 75 could not have intended to totally abrogate this principle with reference to the class of cases covered by the act. as amended by R. So ordered.” Acting thereon. and while the Court should be unwilling to say that special cases might not occur in which relief would be afforded in such a proceeding as this against a mistake of law made by a party. The Court is of opinion that the present is not such a case. Nothing is shown here except the basic fact that the party acted under ignorance or misconception of the provisions of the law in regard to the time within which the appeal could be taken.

A. however. The preliminary investigation of the criminal case may. which took effect on June 19. Rule 1. the capital of the province of Iloilo. prior to its amendment by Republic Act No. He therefore had no authority to conduct a preliminary investigation and to issue the corresponding warrants of arrest in the said libel case. In the case at bar. judges must keep abreast of the laws and jurisprudence. nor a court in Iloilo City. WHEREFORE. Judges are expected to exhibit more than just cursory acquaintance with statutes and procedural rules. . 1967 the Department of Justice issued a circular relative to the provisions of Article 360 of the Revised Penal Code as amended by R. No. was an honest mistake. they cannot live up to this expectation if they act in a case without jurisdiction through ignorance While we believe that the reliance of the respondent on the provisions of Article 360 of the Revised Penal Code. respondent Judge Nilo P. be conducted by the city court of the city or the municipal court of the capital of the province where the case is filed. is not a court in the cities of Iloilo province (Iloilo City and Passi City).01. jurisdiction to conduct preliminary investigation in libel cases is indeed lodged with the provincial or city prosecutor of the province or city or with the municipal court of the city or capital of the province. Obviously.00) and STERNLY WARNED that a repetition of the same or similar acts shall be dealt with more SO ORDERED. in view of all the foregoing. 1965. To be able to render justice and to maintain public confidence in the legal system. we find the recommended penalty of fine in an amount equivalent to one month salary too harsh and excessive. Iloilo. the Municipal Circuit Trial Court of Pototan-Mina. Branch 008. however condone his failure to keep himself updated with the amendments and latest jurisprudence on the said statute. Judicial competence requires no less Considering the good faith and candid admission by the respondent judge of his mistake. They must know the laws and apply them properly in all good faith. civilly or administratively for every erroneous judgment or decision rendered by him in good faith. 4363. it is imperative that they should have basic knowledge of the law. severely. as amended by Republic Act No. 4363.000. Canon 1 of the Code of Judicial Conduct provides that judges must be the embodiment of competence. integrity and independence. Pamonag is ordered to pay a FINE in the amount of Five Thousand Pesos (P5. Although judges cannot be held to account or answer criminally.Under Article 360 of the Revised Penal Code. over which respondent Judge presided in an acting capacity. Moreover. as early as April 5. 4363. Pertinent portion thereof reads: It should be noted from these provisions that a complaint or information for libel may be filed only in the Court of First Instance. we cannot.

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