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People vs. Nazario, G.R. No.

L-44143,August 31, 1988 Republic of the Philippines SUPREME COURT Manila EN BANC

THE PEOPLE OF THE PHILIPPINES, plaintiff, vs. EUSEBIO NAZARIO, accused-appellant. The Solicitor General for plaintiff-appellee. Teofilo Ragodon for accused-appellant. SARMIENTO, J.: The petitioner was charged with violation of certain municipal ordinances of the municipal council of Pagbilao, in Quezon province. By way of confession and avoidance, the petitioner would admit having committed the acts charged but would claim that the ordinances are unconstitutional, or, assuming their constitutionality, that they do not apply to him in any event. The facts are not disputed: This defendant is charged of the crime of Violation of Municipal Ordinance in an information filed by the provincial Fiscal, dated October 9, 1968, as follows: That in the years 1964, 1965 and 1966, in the Municipality of Pagbilao, Province of Quezon, Philippines, and within the jurisdiction of this Honorable Court, the above-named accused, being then the owner and operator of a fishpond situated in the barrio of Pinagbayanan, of said municipality, did then and there willfully, unlawfully and feloniously refuse and fail to pay the municipal taxes in the total amount of THREE HUNDRED SIXTY TWO PESOS AND SIXTY TWO CENTAVOS (P362.62), required of him as fishpond operator as provided for under Ordinance No. 4, series of 1955, as amended, inspite of repeated demands made upon him by the Municipal Treasurer of Pagbilao, Quezon, to pay the same. Contrary to law. For the prosecution the following witnesses testified in substance as follows; MIGUEL FRANCIA, 39 years of age, married, farmer and resident of Lopez, Quezon In 1962 to 1967, I resided at Pinagbayanan, Pagbilao, Quezon. I know the accused as I worked in his fishpond in 1962 to 1964. The fishpond of Nazario is at Pinagbayanan, Pagbilao, Quezon. I worked in the clearing of the fishpond, the construction of the dikes and the catching of fish. On cross-examination, this witness declared: I worked with the accused up to March 1964.

NICOLAS MACAROLAY, 65 years of age, married, copra maker and resident of Pinagbayanan, Pagbilao, Quezon I resided at Pinagbayanan, Pagbilao, Quezon since 1959 up to the present. I know the accused since 1959 when he opened a fishpond at Pinagbayanan, Pagbilao, Quezon. He still operates the fishpond up to the present and I know this fact as I am the barrio captain of Pinagbayanan. On cross-examination, this witness declared: I came to know the accused when he first operated his fishpond since 1959. On re-direct examination, this witness declared: I was present during the catching of fish in 1967 and the accused was there. On re-cross examination, this witness declared: I do not remember the month in 1962 when the accused caught fish. RODOLFO R. ALVAREZ, 45 years old, municipal treasurer of Pagbilao, Quezon, married As Municipal Treasurer I am in charge of tax collection. I know the accused even before I was Municipal Treasurer of Pagbilao. I have written the accused a letter asking him to pay his taxes (Exhibit B). Said letter was received by the accused as per registry return receipt, Exhibit B-1. The letter demanded for payment of P362.00, more or less, by way of taxes which he did not pay up to the present. The former Treasurer, Ceferino Caparros, also wrote a letter of demand to the accused (Exhibit C). On June 28, 1967, I sent a letter to the Fishery Commission (Exhibit D), requesting information if accused paid taxes with that office. The Commission sent me a certificate (Exhibits D-1, D-2 & D-3). The accused had a fishpond lease agreement. The taxes unpaid were for the years 1964, 1965 and 1966. On cross-examination, this witness declared: I have demanded the taxes for 38.10 hectares. On question of the court, this witness declared: What I was collecting from the accused is the fee on fishpond operation, not rental. The prosecution presented as part of their evidence Exhibits A, A-1, A-2, B, B-2, C, D, D-1, D-2, D-3, E, F, F-1 and the same were admitted by the court, except Exhibits D, D-1, D-2 and D-3 which were not admitted for being immaterial. For the defense the accused EUSEBIO NAZARIO, 48 years of age, married, owner and general manager of the ZIP Manufacturing Enterprises and resident of 4801 Old Sta. Mesa, Sampaloc, Manila, declared in substance as follows: I have lived in Sta. Mesa, Manila, since 1949. I buy my Residence Certificates at Manila or at San Juan. In 1964, 1965 and 1966, I was living in Manila and my business is in Manila and my family lives at Manila. I never resided at Pagbilao, Quezon. I do not own a house at Pagbilao. I am a lessee of a fishpond located at Pagbilao, Quezon, and I have a lease agreement to that effect with the Philippine Fisheries Commission marked as Exhibit 1. In 1964, 1965 and 1966, the contract of lease, Exhibit 1, was still existing and enforceable. The Ordinances Nos. 4, 15 and 12,

series of 1955, 1965 and 1966, were translated into English by the Institute of National Language to better understand the ordinances. There were exchange of letters between me and the Municipal Treasurer of Pagbilao regarding the payment of the taxes on my leased fishpond situated at Pagbilao. There was a letter of demand for the payment of the taxes by the treasurer (Exhibit 3) which I received by mail at my residence at Manila. I answered the letter of demand, Exhibit 3, with Exhibit 3-A. I requested an inspection of my fishpond to determine its condition as it was not then in operation. The Municipal Treasurer Alvarez went there once in 1967 and he found that it was destroyed by the typhoon and there were pictures taken marked as Exhibits 4, 4-A, 4-B and 4C. I received another letter of demand, Exhibit 5, and I answered the same (Exhibit 5-A). I copied my reference quoted in Exhibit 5-A from Administrative Order No. 6, Exhibit 6. I received another letter of demand from Tomas Ornedo, Acting Municipal Treasurer of Pagbilao, dated February 16, 1966, Exhibit 7, and I answered the same with the letter marked as Exhibit 7-A, dated February 26, 1966. I received another letter of demand from Treasurer Alvarez of Pagbilao, Exhibit 8, and I answered the same (Exhibit 8-A). In 1964, I went to Treasurer Caparros to ask for an application for license tax and he said none and he told me just to pay my taxes. I did not pay because up to now I do not know whether I am covered by the Ordinance or not. The letters of demand asked me to pay different amounts for taxes for the fishpond. Because under Sec. 2309 of the Revised Administrative Code, municipal taxes lapse if not paid and they are collecting on a lapsed ordinance. Because under the Tax Code, fishermen are exempted from percentage tax and privilege tax. There is no law empowering the municipality to pass ordinance taxing fishpond operators. The defense presented as part of their evidence Exhibits 1, 2, 3, 3-A, 4, 4-B, 4-B, 4-C, 5, 5-A, 6, 6A, 6-B, 6-C, 7, 7-A, 8 and 8-A and the same were admitted by the court. From their evidence the prosecution would want to show to the court that the accused, as lessee or operator of a fishpond in the municipality of Pagbilao, refused, and still refuses, to pay the municipal taxes for the years 1964, 1965 and 1966, in violation of Municipal Ordinance No. 4, series of 1955, as amended by Municipal Ordinance No. 15, series of 1965, and finally amended by Municipal Ordinance No. 12, series of 1966. On the other hand, the accused, by his evidence, tends to show to the court that the taxes sought to be collected have already lapsed and that there is no law empowering municipalities to pass ordinances taxing fishpond operators. The defense, by their evidence, tried to show further that, as lessee of a forest land to be converted into a fishpond, he is not covered by said municipal ordinances; and finally that the accused should not be taxed as fishpond operator because there is no fishpond yet being operated by him, considering that the supposed fishpond was under construction during the period covered by the taxes sought to be collected. Finally, the defendant claims that the ordinance in question is ultra vires as it is outside of the power of the municipal council of Pagbilao, Quezon, to enact; and that the defendant claims that the ordinance in question is ambiguous and uncertain. There is no question from the evidences presented that the accused is a lessee of a parcel of forest land, with an area of 27.1998 hectares, for fishpond purposes, under Fishpond Lease Agreement No. 1066, entered into by the accused and the government, through the Secretary of Agriculture and Natural Resources on August 21, 1959.

There is no question from the evidences presented that the 27.1998 hectares of land leased by the defendant from the government for fishpond purposes was actually converted into fishpond and used as such, and therefore defendant is an operator of a fishpond within the purview of the ordinance in question. 1 The trial Court 2 returned a verdict of guilty and disposed as follows: VIEWED IN THE LIGHT OF ALL THE FOREGOING, the Court finds the accused guilty beyond reasonable doubt of the crime of violation of Municipal Ordinance No. 4, series of 1955, as amended by Ordinance No. 15, series of 1965 and further amended by Ordinance No. 12, series of 1966, of the Municipal Council of Pagbilao, Quezon; and hereby sentences him to pay a fine of P50.00, with subsidiary imprisonment in case of insolvency at the rate of P8.00 a day, and to pay the costs of this proceeding. SO ORDERED. 3 In this appeal, certified to this Court by the Court of Appeals, the petitioner alleges that: I. THE LOWER COURT ERRED IN NOT DECLARING THAT ORDINANCE NO. 4, SERIES OF 1955, AS AMENDED BY ORDINANCE NO. 15, SERIES OF 1965, AND AS FURTHER AMENDED BY ORDINANCE NO. 12, SERIES OF 1966, OF THE MUNICIPALITY OF PAGBILAO, QUEZON, IS NULL AND VOID FOR BEING AMBIGUOUS AND UNCERTAIN. II. THE LOWER COURT ERRED IN NOT HOLDING THAT THE ORDINANCE IN QUESTION, AS AMENDED, IS UNCONSTITUTIONAL FOR BEING EX POST FACTO. III. THE LOWER COURT ERRED IN NOT HOLDING THAT THE ORDINANCE IN QUESTION COVERS ONLY OWNERS OR OVERSEER OF FISHPONDS OF PRIVATE OWNERSHIP AND NOT TO LESSEES OF PUBLIC LANDS. IV. THE LOWER COURT ERRED IN NOT FINDING THAT THE QUESTIONED ORDINANCE, EVEN IF VALID, CANNOT BE ENFORCED BEYOND THE TERRITORIAL LIMITS OF PAGBILAO AND DOES NOT COVER NONRESIDENTS. 4 The ordinances in question are Ordinance No. 4, series of 1955, Ordinance No. 15, series of 1965, and Ordinance No. 12, series of 1966, of the Municipal Council of Pagbilao. Insofar as pertinent to this appeal, the salient portions thereof are hereinbelow quoted: Section 1. Any owner or manager of fishponds in places within the territorial limits of Pagbilao, Quezon, shall pay a municipal tax in the amount of P3.00 per hectare of fishpond on part thereof per annum. 5 xxx xxx xxx

Sec. l (a). For the convenience of those who have or owners or managers of fishponds within the territorial limits of this municipality, the date of payment of municipal tax relative thereto, shall begin after the lapse of three (3) years starting from the date said fishpond is approved by the Bureau of Fisheries. 6 xxx xxx xxx Section 1. Any owner or manager of fishponds in places within the territorial limits of Pagbilao shall pay a municipal tax in the amount of P3.00 per hectare or any fraction thereof per annum beginning and taking effect from the year 1964, if the fishpond started operating before the year 1964. 7 The first objection refers to the ordinances being allegedly "ambiguous and uncertain." 8 The petitioner contends that being a mere lessee of the fishpond, he is not covered since the said ordinances speak of "owner or manager." He likewise maintains that they are vague insofar as they reckon the date of payment: Whereas Ordinance No. 4 provides that parties shall commence payment "after the lapse of three (3) years starting from the date said fishpond is approved by the Bureau of Fisheries." 9 Ordinance No. 12 states that liability for the tax accrues "beginning and taking effect from the year 1964 if the fishpond started operating before the year 1964." 10 As a rule, a statute or act may be said to be vague when it lacks comprehensible standards that men "of common intelligence must necessarily guess at its meaning and differ as to its application."11 It is repugnant to the Constitution in two respects: (1) it violates due process for failure to accord persons, especially the parties targetted by it, fair notice of the conduct to avoid; and (2) it leaves law enforcers unbridled discretion in carrying out its provisions and becomes an arbitrary flexing of the Government muscle. But the act must be utterly vague on its face, that is to say, it cannot be clarified by either a saving clause or by construction. Thus, in Coates v. City of Cincinnati, 12 the U.S. Supreme Court struck down an ordinance that had made it illegal for "three or more persons to assemble on any sidewalk and there conduct themselves in a manner annoying to persons passing by." 13 Clearly, the ordinance imposed no standard at all "because one may never know in advance what 'annoys some people but does not annoy others.' " 14 Coates highlights what has been referred to as a "perfectly vague" 15 act whose obscurity is evident on its face. It is to be distinguished, however, from legislation couched in imprecise language but which nonetheless specifies a standard though defectively phrased in which case, it may be "saved" by proper construction. It must further be distinguished from statutes that are apparently ambiguous yet fairly applicable to certain types of activities. In that event, such statutes may not be challenged whenever directed against such activities. In Parker v. Levy, 16 a prosecution originally under the U.S. Uniform Code of Military Justice (prohibiting, specifically, "conduct unbecoming an officer and gentleman"), the defendant, an army officer who had urged his men not to go to Vietnam and called the Special Forces trained to fight there thieves and murderers, was not allowed to invoke the void for vagueness doctrine on the premise that accepted military interpretation and practice had provided enough standards, and consequently, a fair notice that his conduct was impermissible.

It is interesting that in Gonzales v. Commission on Elections, 17 a divided Court sustained an act of Congress (Republic Act No. 4880 penalizing "the too early nomination of candidates" 18 limiting the election campaign period, and prohibiting "partisan political activities"), amid challenges of vagueness and overbreadth on the ground that the law had included an "enumeration of the acts deemed included in the terms 'election campaign' or 'partisan political activity" 19 that would supply the standards. "As thus limited, the objection that may be raised as to vagueness has been minimized, if not totally set at rest." 20 In his opinion, however, Justice Sanchez would stress that the conduct sought to be prohibited "is not clearly defined at all." 21 "As worded in R.A 4880, prohibited discussion could cover the entire spectrum of expression relating to candidates and political parties." 22 He was unimpressed with the "restrictions" Fernando's opinion had relied on: " 'Simple expressions of opinions and thoughts concerning the election' and expression of 'views on current political problems or issues' leave the reader conjecture, to guesswork, upon the extent of protection offered, be it as to the nature of the utterance ('simple expressions of opinion and thoughts') or the subject of the utterance ('current political problems or issues')." 23 The Court likewise had occasion to apply the "balancing-of-interests" test, 24 insofar as the statute's ban on early nomination of candidates was concerned: "The rational connection between the prohibition of Section 50-A and its object, the indirect and modest scope of its restriction on the rights of speech and assembly, and the embracing public interest which Congress has found in the moderation of partisan political activity, lead us to the conclusion that the statute may stand consistently with and does not offend the Constitution." 25 In that case, Castro would have the balance achieved in favor of State authority at the "expense" of individual liberties. In the United States, which had ample impact on Castro's separate opinion, the balancing test finds a close kin, referred to as the "less restrictive alternative " 26 doctrine, under which the court searches for alternatives available to the Government outside of statutory limits, or for "less drastic means" 27 open to the State, that would render the statute unnecessary. In United States v. Robel,28 legislation was assailed, banning members of the (American) Communist Party from working in any defense facility. The U.S. Supreme Court, in nullifying the statute, held that it impaired the right of association, and that in any case, a screening process was available to the State that would have enabled it to Identify dangerous elements holding defense positions. 29 In that event, the balance would have been struck in favor of individual liberties. It should be noted that it is in free expression cases that the result is usually close. It is said, however, that the choice of the courts is usually narrowed where the controversy involves say, economic rights, 30 or as in the Levy case, military affairs, in which less precision in analysis is required and in which the competence of the legislature is presumed. In no way may the ordinances at bar be said to be tainted with the vice of vagueness. It is unmistakable from their very provisions that the appellant falls within its coverage. As the actual operator of the fishponds, he comes within the term " manager." He does not deny the fact that he financed the construction of the fishponds, introduced fish fries into the fishponds, and had employed laborers to maintain them. 31 While it appears that it is the National Government which owns them,32 the Government never shared in the profits they had

generated. It is therefore only logical that he shoulders the burden of tax under the said ordinances. We agree with the trial court that the ordinances are in the character of revenue measures 33designed to assist the coffers of the municipality of Pagbilao. And obviously, it cannot be the owner, the Government, on whom liability should attach, for one thing, upon the ancient principle that the Government is immune from taxes and for another, since it is not the Government that had been making money from the venture. Suffice it to say that as the actual operator of the fishponds in question, and as the recipient of profits brought about by the business, the appellant is clearly liable for the municipal taxes in question. He cannot say that he did not have a fair notice of such a liability to make such ordinances vague. Neither are the said ordinances vague as to dates of payment. There is no merit to the claim that "the imposition of tax has to depend upon an uncertain date yet to be determined (three years after the 'approval of the fishpond' by the Bureau of Fisheries, and upon an uncertain event (if the fishpond started operating before 1964), also to be determined by an uncertain individual or individuals." 34Ordinance No. 15, in making the tax payable "after the lapse of three (3) years starting from the date said fishpond is approved by the Bureau of Fisheries," 35 is unequivocal about the date of payment, and its amendment by Ordinance No. 12, reckoning liability thereunder "beginning and taking effect from the year 1964 if the fishpond started operating before the year 1964 ," 36 does not give rise to any ambiguity. In either case, the dates of payment have been definitely established. The fact that the appellant has been allegedly uncertain about the reckoning dates as far as his liability for the years 1964, 1965, and 1966 is concerned presents a mere problem in computation, but it does not make the ordinances vague. In addition, the same would have been at most a difficult piece of legislation, which is not unfamiliar in this jurisdiction, but hardly a vague law. As it stands, then, liability for the tax accrues on January 1, 1964 for fishponds in operation prior thereto (Ordinance No. 12), and for new fishponds, three years after their approval by the Bureau of Fisheries (Ordinance No. 15). This is so since the amendatory act (Ordinance No. 12) merely granted amnesty unto old, delinquent fishpond operators. It did not repeal its mother ordinances (Nos. 4 and 15). With respect to new operators, Ordinance No. 15 should still prevail. To the Court, the ordinances in question set forth enough standards that clarify imagined ambiguities. While such standards are not apparent from the face thereof, they are visible from the intent of the said ordinances. The next inquiry is whether or not they can be said to be ex post facto measures. The appellant argues that they are: "Amendment No. 12 passed on September 19, 1966, clearly provides that the payment of the imposed tax shall "beginning and taking effect from the year 1964, if the fishpond started operating before the year 1964.' In other words, it penalizes acts or events occurring before its passage, that is to say, 1964 and even prior thereto." 37 The Court finds no merit in this contention. As the Solicitor General notes, "Municipal Ordinance No. 4 was passed on May 14, 1955. 38 Hence, it cannot be said that the amendment (under Ordinance No. 12) is being made to apply retroactively (to 1964) since the reckoning

period is 1955 (date of enactment). Essentially, Ordinances Nos. 12 and 15 are in the nature of curative measures intended to facilitate and enhance the collection of revenues the originally act, Ordinance No. 4, had prescribed. 39 Moreover, the act (of non-payment of the tax), had been, since 1955, made punishable, and it cannot be said that Ordinance No. 12 imposes a retroactive penalty. As we have noted, it operates to grant amnesty to operators who had been delinquent between 1955 and 1964. It does not mete out a penalty, much less, a retrospective one. The appellant assails, finally, the power of the municipal council of Pagbilao to tax "public forest land." 40 In Golden Ribbon Lumber Co., Inc. v. City of Butuan 41 we held that local governments' taxing power does not extend to forest products or concessions under Republic Act No. 2264, the Local Autonomy Act then in force. (Republic Act No. 2264 likewise prohibited municipalities from imposing percentage taxes on sales.) First of all, the tax in question is not a tax on property, although the rate thereof is based on the area of fishponds ("P3.00 per hectare" 42). Secondly, fishponds are not forest lands, although we have held them to the agricultural lands. 43 By definition, "forest" is "a large tract of land covered with a natural growth of trees and underbush; a large wood." 44 (Accordingly, even if the challenged taxes were directed on the fishponds, they would not have been taxes on forest products.) They are, more accurately, privilege taxes on the business of fishpond maintenance. They are not charged against sales, which would have offended the doctrine enshrined by Golden Ribbon Lumber,45 but rather on occupation, which is allowed under Republic Act No. 2264. 46 They are what have been classified as fixed annual taxes and this is obvious from the ordinances themselves. There is, then, no merit in the last objection. WHEREFORE, the appeal is DISMISSED. Costs against the appellant.

Case Digest: People vs Nazario Facts: Eusebio Nazario was charged in violation of refusal and failure to pay his municipal taxes amounting to Php 362.62 because of his fishpond operation provided under Ordinance 4, Series of 1955, as amended. He is a resident of Sta. Mesa Manila and just leases a fishpond located at Pagbilao, Quezon with the Philippine Fisheries Commission. The years in question of failure to pay was for 1964, 1965, and 1966. Nazario did not pay because he was not sure if he was covered under the ordinance. He was found guilty thus this petition. Issues: 1. Whether or not Ordinance 4, Series of 1955, as amended null and void for being ambiguous and uncertain 2. Whether or not the ordinance was unconstitutional for being ex post facto Held: 1. No, the coverage of the ordinance covers him as the actual operator of the fishpond thus he comes with the term Manager. He was the one who spent money in developing and maintaining it, so despite only leasing it from the national government, the latter does not get any profit as it goes only to Nazario. The dates of payment are also clearly stated Beginnin and taking effect from 1964 if the fishpond started operating in 1964. 2. No, it is not ex post facto. Ordinance 4 was enacted in 1955 so it cant be that the amendment under Ordinance 12 is being made to apply retroactively. Also, the act of nonpayment has been made punishable since 1955 so it means Ordinance 12 is not imposing a retroactive penalty The appeal is DISMISSED with cost against the appellant.

Republic of the Philippines SUPREME COURT Manila EN BANC G.R. No. L-26702 October 18, 1979 JUAN AUGUSTO B. PRIMICIAS, plaintiff-appellee, vs. THE MUNICIPALITY OF URDANETA, PANGASINAN, ET AL., defendants-appellants. Ambrosio Padilla Law Offices for appellee. Primicias, Castillo & Macaraeg for appellants.

DE CASTRO, J.: The main issue in this appeal is the validity of Ordinance No. 3, Series of 1964, enacted on March 13,1964 by the Municipal Council of Urdaneta, Pangasinan, which was declared null and void by the Court of First Instance of Lingayen, Pangasinan, in its decision dated June 29, 1966, the dispositive portion of which reads as follows: WHEREFORE, this Court renders decision declaring Ordinance No, 3, Series of 1964, to be null and void; making the writ of preliminary injunction heretofore issued against the defendant, Felix D. Soriano definite and permanent; and further restraining the defendants, Amadeo R. Perez, Jr., Lorenzo G. Suyat and Estanislao Andrada, from enforcing the said ordinance all throughout Urdaneta; and ordering the said defendants to return to the plaintiff his drivers (sic) license CIN 017644, a copy of which is Exhibit D-1, and to pay the costs of suit.1 From the aforecited decision, defendants appealed to this Court. The antecedent facts of this case are as follows:2 On February 8, 1965, Juan Augusta B. Primacias plaintiff appellee, was driving his car within the jurisdiction of Urdaneta when a member of Urdaneta's Municipal Police asked him to stop. He was told, upon stopping, that he had violated Municipal Ordinance No. 3, Series of 1964, "and more particularly, for overtaking a truck." The policeman then asked for plaintiff's license which he surrendered, and a temporary operator's permit was issued to him. This incident took place about 200 meters away from a school building, at Barrio Nancamaliran, Urdaneta. Thereafter, a criminal complaint was filed in the Municipal Court of Urdaneta against Primicias for violation of Ordinance No. 3, Series of 1964. Due to the institution of the criminal case, plaintiff Primicias initiated an action for the annulment of said ordinance with prayer for the issuance of preliminary injunction for the purpose of restraining defendants Municipality of Urdaneta, Mayor Perez, Police Chief Suyat, Judge Soriano and Patrolman Andrada from enforcing the ordinance. The writ was issued and Judge Soriano was enjoined from further proceeding in the criminal case. After trial, the Court of First Instance rendered the questioned decision holding that the ordinance was null and void and had been repealed by Republic Act No. 4136, otherwise known

as the Land Transportation and Traffic Code. Now, defendants, appellants herein, allege that the lower court erred in: 3 1. declaring that Municipal Ordinance No. 3 (Series of 1964) of Urdaneta is null and void; 2. requiring the municipal council of Urdaneta in the enactment of said ordinance to give maximum allowable speed and to make classification of highways; 3. holding that said ordinance is in conflict with section 35 par. b(4) of Republic Act 4136; 4. requiring that said ordinance be approved by the Land Transportation Commissioner; 5. holding that said ordinance is not clear and definite in its terms; 6. issuing ex-parte a writ of injunction to restrain the proceedings in criminal case no. 3140. The ordinance in question provides: 4 SECTION 1 - That the following speed limits for vehicular traffic along the National Highway and the Provincial Roads within the territorial limits of Urdaneta shall be as follows: a. Thru crowded streets approaching intersections at 'blind corners, passing school zones or thickly populated areas, duly marked with sign posts, the maximum speed limit allowable shall be 20 kph. SECTION 2 - That any person or persons caught driving any motor vehicle violating the provisions of this ordinance shall be fined P10.00 for the first offense; P20.00 for the second offense; and P30.00 for the third and succeeding offenses, the Municipal Judge shall recommend the cancellation of the license of the offender to the Motor Vehicle's Office (MVO); or failure to pay the fine imposed, he shall suffer a subsidiary imprisonment in accordance with law. Appellants contend that the Ordinance is valid, being "patterned after and based on Section 53, 5 par. 4 of Act No. 3992, as amended (Revised Motor Vehicle Law)." In so arguing, appellants fail to note that Act No. 3992 has been superseded by Republic Act No. 4136, the Land Transportation and 'Traffic Code, which became effective on June 20, 1964, about three months after the questioned ordinance was approved by Urdaneta's Municipal Council. The explicit repeal of the aforesaid Act is embodied in Section 63, Republic Act No. 4136, to wit: Act Numbered thirty-nine hundred ninety-two (3992) as amended, and all laws, executive orders, ordinance, resolutions, regulations or paints thereof in conflict with the provisions of this Act are repealed. By this express repeal, and the general rule that a later law prevails over an earlier law, 6 appellants are in error in contending that "a later enactment of the law relating to the same subject matter as that of an earlier statute is not sufficient to cause an implied repeal of the original law." Pursuant to Section 63, Republic Act No. 4136, the ordinance at bar is thus placed within the ambit of Republic Act No. 4136, and not Act No. 3992. The validity of Ordinance No. 3, Series of 1964, must therefore be determined vis-a-vis Republic Act No. 4136, the "mother statute" so to speak, which was in force at the time the criminal case was brought against Primicias for the violation of the said ordinance.

An essential requisite for a valid ordinance is, among others, that is "must not contravene . . . the statute," 7 for it is a "fundamental principle that municipal ordinances are inferior in status and subordinate to the laws of the state." 8 Following this general rule, whenever there is a conflict between an ordinance and a statute, the ordinance "must give way. 9 Since the Ordinance is aimed at regulating traffic, Chapter IV Traffic Rules), Article I (Speed Limits and Keeping to the Right), consisting of sections 35, to 38 of Republic Act No. 4136, particularly Sections 35, 36, 38 contain the provisions material to its validity. Section 35 (b), Republic Act No. 4136, which took the place of Section 53, par. (4), Act No. 3992, provides restrictions as to speed thus: MAXIMUM ALLOWABLE SPEEDS Passenger cars and motorcycle Motor trucks and buses

1. On open country roads, with "blind corners" not closely bordered by habitation. 2. On through streets or boulevards, clear of traffic, with "no blind corners" when so designated. 3. On city and municipal streets, with light traffic, when not designated "through streets." 4. Through crowded streets ap proaching intersection at "blind cor ners," passing school zones, passing other vehicles which are stationary, or 30 km. per hour 30 km. per hour 40 km. per hour 30 km. per hour 80 km. per hour 50 km. per hour

for similar circumstances. per hour

20 km. per hour

20 km.

A look at the aforecited section and Section 1, par. (a) of the Ordinance shows that the latter is more or less a restatement only of number (4), par. (b), Section 35. As observed by the trial court, the Ordinance "refers to only one of the four classifications mentioned in paragraph (b), Section 35." 10 limiting the rates of speed for vehicular traffic along the national highway and The provincial roads within the territorial limits of Urdaneta to 20 kilometers per hour without regard to whether the road is an open country roads (six), or through streets or boulevards, or city or municipal streets with light traffic. 11 As also found correctly by the lower court, the Municipal Council of Urdaneta did not make any classification of its thoroughfares, contrary to the explicit requirement laid down by Section 38, Republic Act No. 4136, which provides: Classification of highways. - Public highways shall be properly classified for traffic purposes by the provincial board or city council having jurisdiction over them, and said provincial board, municipal board or city council shall provide appropriate signs therefor, subject to the approval of the Commissioner. It shall be the duty of every provincial, city and municipal secretary to certify to the Commissioner the names, locations, and limits of all "through streets" designated as such by the provincial board, municipal board or council. Under this section, a local legislative body intending to control traffic in public highways 12 is supposed to classify, first, and then mark them with proper signs, all to be approved by the Land Transportation Commissioner. To hold that the provisions of Section 38 are mandatory is sanctioned by a ruling 13 that statutes which confer upon a public body or officer . . . power to perform acts which concern the public interests or rights of individuals, are generally, regarded as mandatory although the language is permissive only since the are construed as imposing duties rather than conferring privileges. The classifications which must be based on Section 35 are necessary in view of Section 36 which states that "no provincial, city or municipal authority shall enact or enforce any ordinance or resolution specifying maximum allowable speeds other than those provided in this Act." In this case, however, there is no showing that the marking of the streets and areas falling under Section 1, par. (a), Ordinance No. 3, Series of 1964, was done with the approval of the Land Transportation Commissioner. Thus, on this very ground alone, the Ordinance becomes invalid. Since it lacks the requirement imposed by Section 38, the provincial, city, or municipal board or council is enjoined under Section 62 of the Land Transportation and Traffic Code from "enacting or enforcing any ordinance or resolution in conflict with the provisions of this Act." Regarding the contention that the lower court erred in holding that said "Ordinance is not clear and definite in its terms." We agree with the Court a quo that when the Municipal Council of Urdaneta used the phrase "vehicular traffic" (Section 1, Ordinance) it "did not distinguish between passenger cars and motor vehicles and motor trucks and buses." 14 This conclusion is bolstered by the fact that nowhere in the Ordinance is "vehicular traffic" defined. Considering that this is a regulatory ordinance, its clearness, definiteness and certainty are all the more important so that "an average man should be able with due care, after reading it,, to

understand and ascertain whether he will incur a penalty for particular acts or courses of conduct." 15 In comparison, Section 35(b), Republic Act No. 4136 on which Section 1 of the Ordinance must be based, stated that the rates of speed enumerated therein refer to motor vehicle, 16 specifying the speed for each kind of vehicle. At the same time, to avoid vagueness, Art. 11, Section 3 defines what a motor vehicle is and passenger automobiles are. On the issue of whether a writ of injunction can restrain the proceedings in Criminal Case No. 3140, the general rule is that "ordinarily, criminal prosecution may not be blocked by court prohibition or injunction." 17 Exceptions however are allowed in the following instances: 1. for the orderly administration of justice; 2. to prevent the use of the strong arm of the law in an oppressive and vindictive manner; 3. to avoid multiplicity of actions; 4. to afford adequate protection to constitutional rights; 5. in proper cases, because the statute relied upon is unconstitutional or was held invalid. 18 The local statute or ordinance at bar being invalid, the exception just cited obtains in this case. Hence, the lower court did not err in issuing the writ of injunction against defendants. Moreover, considering that "our law on municipal corporations is in principle patterned after that of the United States, " 19 it would not be amiss for Us to adopt in this instance the ruling that to enjoin the enforcement of a void ordinance, "injunction has frequently been sustained in order to prevent a multiplicity of prosecutions under it." 20 In view of the foregoing, the appealed decision is hereby affirmed. SO ORDERED. Teehankee, Acting C.J., Barredo, Makasiar, Concepcion Jr., Santos, Fernandez, Guerrero, and Melencio-Herrera, JJ., concur. Aquino, J., took no part. Antonio, J., is on leave.

Separate Opinions

ABAD SANTOS, J., concurring: The ordinance in question was in effect a speed trap for unwary motorists for which Urdaneta had become notorious.

JUAN AUGUSTO B. PRIMICIAS vs. THE MUNICIPALITY OFURDANETA,PANGASINAN, ET AL.(93 SCRA 462, G.R. No. L-26702 18 OCTOBER 1979) Case Digest

FACTS:A criminal complaint was filed against plaintiff Primiscias forviolation of Municipal Ordinance No. 3, Series of 1964 after beingapprehended by a member of the Municipal Police for overtakinga truck. Primiscias thereafter filed for the annulment of the subject ordinance with prayer for issuance of preliminary injunction to restrain defendants from enforcing the said ordinance. The Court of First Instance rendered Ordinance No. 3,S-1964 as null and void, and repealed by RA 4136 also known asthe Land Transportation and Traffic Code. Appellant appealed thedecision. ISSUE:Whether or not Ordinance No. 3, Series of 1964 enacted by theMunicipal Council of Urdaneta, Pangasinan is null and void. HELD:Yes, the Supreme Court ruled that subject ordinance has been repealed by the enactment of RA 4316 and has therefore, become null and void stating that a later law prevails over an earlier law. The Supreme Court further averred that local ordinances, in thiscase, a municipal ordinance, are inferior in status andsubordinate to the laws of the state an d whenever there isconflict between an ordinance and a statute, the ordinance mustgive way.

Republic of the Philippines SUPREME COURT Manila

EN BANC G.R. No. L-24670 December 14, 1979 ORTIGAS & CO., LIMITED PARTNERSHIP, plaintiff-appellant, vs. FEATI BANK AND TRUST CO., defendant-appellee. Ramirez & Ortigas for appellant. Taada, Teehankee & Carreon for appellee.

SANTOS, J.: An appeal interposed on June 23, 1965 by plaintiff-appellant, Ortigas & Co., Limited Partnership, from the decision of the Court of First Instance of Rizal, Branch VI, at Pasig, Hon. Andres Reyes presiding, which dismissed its complaint in Civil Case No. 7706, entitled, "Ortigas & Company, Limited Partnership, plaintiff, v. Feati Bank and Trust Company, defendant," for lack of merit. The following facts a reproduction of the lower court's findings, which, in turn, are based on a stipulation of facts entered into by the parties are not disputed. Plaintiff (formerly known as "Ortigas, Madrigal y Cia") is a limited partnership and defendant Feati Bank and Trust Co., is a corporation duly organized and existing in accordance with the laws of the Philippines. Plaintiff is engaged in real estate business, developing and selling lots to the public, particularly the Highway Hills Subdivision along Epifanio de los Santos Avenue, Mandaluyong, Rizal. 1 On March 4, 1952, plaintiff, as vendor, and Augusto Padilla y Angeles and Natividad Angeles, as vendees, entered into separate agreements of sale on installments over two parcels of land, known as Lots Nos. 5 and 6, Block 31, of the Highway Hills Subdivision, situated at Mandaluyong, Rizal. On July 19, 1962, the said vendees transferred their rights and interests over the aforesaid lots in favor of one Emma Chavez. Upon completion of payment of the purchase price, the plaintiff executed the corresponding deeds of sale in favor of Emma Chavez. Both the agreements (of sale on installment) and the deeds of sale contained the stipulations or restrictions that: 1. The parcel of land subject of this deed of sale shall be used the Buyer exclusively for residential purposes, and she shall not be entitled to take or remove soil, stones or gravel from it or any other lots belonging to the Seller. 2. All buildings and other improvements (except the fence) which may be constructed at any time in said lot must be, (a) of strong materials and properly painted, (b) provided with modern sanitary installations connected either to the public sewer or to an approved septic tank, and (c) shall not be at a distance of less than two (2) meters from its boundary lines. 2 The above restrictions were later annotated in TCT Nos. 101509 and 101511 of the Register of Deeds of Rizal, covering the said lots and issued in the name of Emma Chavez. 3 Eventually, defendant-appellee acquired Lots Nos. 5 and 6, with TCT Nos. 101613 and 106092 issued in its name, respectively and the building restrictions were also annotated

therein. 4 Defendant-appellee bought Lot No. 5 directly from Emma Chavez, "free from all liens and encumbrances as stated in Annex 'D', 5 while Lot No. 6 was acquired from Republic Flour Mills through a "Deed of Exchange," Annex "E". 6 TCT No. 101719 in the name of Republic Flour Mills likewise contained the same restrictions, although defendant-appellee claims that Republic Flour Mills purchased the said Lot No. 6 "in good faith. free from all liens and encumbrances," as stated in the Deed of Sale, Annex "F" 7 between it and Emma Chavez. Plaintiff-appellant claims that the restrictions annotated on TCT Nos. 101509, 101511, 101719, 101613, and 106092 were imposed as part of its general building scheme designed for the beautification and development of the Highway Hills Subdivision which forms part of the big landed estate of plaintiff-appellant where commercial and industrial sites are also designated or established. 8 Defendant-appellee, upon the other hand, maintains that the area along the western part of Epifanio de los Santos Avenue (EDSA) from Shaw Boulevard to Pasig River, has been declared a commercial and industrial zone, per Resolution No. 27, dated February 4, 1960 of the Municipal Council of Mandaluyong, Rizal. 9 It alleges that plaintiff-appellant 'completely sold and transferred to third persons all lots in said subdivision facing Epifanio de los Santos Avenue" 10 and the subject lots thereunder were acquired by it "only on July 23, 1962 or more than two (2) years after the area ... had been declared a commercial and industrial zone ... 11 On or about May 5, 1963, defendant-appellee began laying the foundation and commenced the construction of a building on Lots Nos. 5 and 6, to be devoted to banking purposes, but which defendant-appellee claims could also be devoted to, and used exclusively for, residential purposes. The following day, plaintiff-appellant demanded in writing that defendant-appellee stop the construction of the commerical building on the said lots. The latter refused to comply with the demand, contending that the building was being constructed in accordance with the zoning regulations, defendant-appellee having filed building and planning permit applications with the Municipality of Mandaluyong, and it had accordingly obtained building and planning permits to proceed with the construction. 12 On the basis of the foregoing facts, Civil Case No. 7706, supra, was submitted in the lower court for decision. The complaint sought, among other things, the issuance of "a writ of preliminary injunction ... restraining and enjoining defendant, its agents, assigns, and those acting on its or their behalf from continuing or completing the construction of a commercial bank building in the premises ... involved, with the view to commanding the defendant to observe and comply with the building restrictions annotated in the defendant's transfer certificate of title." In deciding the said case, the trial court considered, as the fundamental issue, whether or not the resolution of the Municipal Council of Mandaluyong declaring Lots Nos. 5 and 6, among others, as part of the commercial and industrial zone of the municipality, prevailed over the building restrictions imposed by plaintiff-appellant on the lots in question. 13 The records do not show that a writ of preliminary injunction was issued. The trial court upheld the defendant-appellee and dismissed the complaint, holding that the subject restrictions were subordinate to Municipal Resolution No. 27, supra. It predicated its conclusion on the exercise of police power of the said municipality, and stressed that private interest should "bow down to general interest and welfare. " In short, it upheld the classification by the Municipal Council of the area along Epifanio de los Santos Avenue as a

commercial and industrial zone, and held that the same rendered "ineffective and unenforceable" the restrictions in question as against defendant-appellee. 14 The trial court decision further emphasized that it "assumes said resolution to be valid, considering that there is no issue raised by either of the parties as to whether the same is null and void. 15 On March 2, 1965, plaintiff-appellant filed a motion for reconsideration of the above decision, 16 which motion was opposed by defendant-appellee on March 17, 1965. 17 It averred, among others, in the motion for reconsideration that defendant- appellee "was duty bound to comply with the conditions of the contract of sale in its favor, which conditions were duly annotated in the Transfer Certificates of Title issued in her (Emma Chavez) favor." It also invited the trial court's attention to its claim that the Municipal Council had (no) power to nullify the contractual obligations assumed by the defendant corporation." 18 The trial court denied the motion for reconsideration in its order of March 26, 1965. 19 On April 2, 1965 plaintiff-appellant filed its notice of appeal from the decision dismissing the complaint and from the order of March 26, 1965 denying the motion for reconsideration, its record on appeal, and a cash appeal bond." 20 On April 14, the appeal was given due course 21 and the records of the case were elevated directly to this Court, since only questions of law are raised. 22 Plaintiff-appellant alleges in its brief that the trial court erred I. When it sustained the view that Resolution No. 27, series of 1960 of the Municipal Council of Mandaluyong, Rizal declaring Lots Nos. 5 and 6, among others, as part of the commercial and industrial zone, is valid because it did so in the exercise of its police power; and II. When it failed to consider whether or not the Municipal Council had the power to nullify the contractual obligations assumed by defendant-appellee and when it did not make a finding that the building was erected along the property line, when it should have been erected two meters away from said property line. 23 The defendant-appellee submitted its counter-assignment of errors. In this connection, We already had occasion to hold in Relativo v. Castro 24 that "(I)t is not incumbent on the appellee, who occupies a purely defensive position, and is seeking no affirmative relief, to make assignments of error, " The only issues to be resolved, therefore, are: (1) whether Resolution No. 27 s-1960 is a valid exercise of police power; and (2) whether the said Resolution can nullify or supersede the contractual obligations assumed by defendant-appellee. 1. The contention that the trial court erred in sustaining the validity of Resolution No. 27 as an exercise of police power is without merit. In the first place, the validity of the said resolution was never questioned before it. The rule is that the question of law or of fact which may be included in the appellant's assignment of errors must be those which have been raised in the court below, and are within the issues framed by the parties. 25 The object of requiring the parties to present all questions and issues to the lower court before they can be presented to the appellate court is to enable the lower court to pass thereon, so that the appellate court upon appeal may determine whether or not such ruling was erroneous. The requirement is in furtherance of justice in that the other party may not be taken by surprise. 26 The rule against

the practice of blowing "hot and cold" by assuming one position in the trial court and another on appeal will, in the words of Elliot, prevent deception. 27 For it is well-settled that issues or defenses not raised 28 or properly litigated 29 or pleaded 30 in the Court below cannot be raised or entertained on appeal. In this particular case, the validity of the resolution was admitted at least impliedly, in the stipulation of facts below. when plaintiff-appellant did not dispute the same. The only controversy then as stated by the trial court was whether or not the resolution of the Municipal Council of Mandaluyong ... which declared lots Nos. 4 and 5 among others, as a part of the commercial and industrial zone of the municipality, prevails over the restrictions constituting as encumbrances on the lots in question. 31 Having admitted the validity of the subject resolution below, even if impliedly, plaintiff-appellant cannot now change its position on appeal. But, assuming arguendo that it is not yet too late in the day for plaintiff-appellant to raise the issue of the invalidity of the municipal resolution in question, We are of the opinion that its posture is unsustainable. Section 3 of R.A. No. 2264, otherwise known as the Local Autonomy Act," 32 empowers a Municipal Council "to adopt zoning and subdivision ordinances or regulations"; 33 for the municipality. Clearly, the law does not restrict the exercise of the power through an ordinance. Therefore, granting that Resolution No. 27 is not an ordinance, it certainly is a regulatory measure within the intendment or ambit of the word "regulation" under the provision. As a matter of fact the same section declares that the power exists "(A)ny provision of law to the contrary notwithstanding ... " An examination of Section 12 of the same law 34 which prescribes the rules for its interpretation likewise reveals that the implied power of a municipality should be "liberally construed in its favor" and that "(A)ny fair and reasonable doubt as to the existence of the power should be interpreted in favor of the local government and it shall be presumed to exist." The same section further mandates that the general welfare clause be liberally interpreted in case of doubt, so as to give more power to local governments in promoting the economic conditions, social welfare and material progress of the people in the community. The only exceptions under Section 12 are existing vested rights arising out of a contract between "a province, city or municipality on one hand and a third party on the other," in which case the original terms and provisions of the contract should govern. The exceptions, clearly, do not apply in the case at bar. 2. With regard to the contention that said resolution cannot nullify the contractual obligations assumed by the defendant-appellee referring to the restrictions incorporated in the deeds of sale and later in the corresponding Transfer Certificates of Title issued to defendant-appellee it should be stressed, that while non-impairment of contracts is constitutionally guaranteed, the rule is not absolute, since it has to be reconciled with the legitimate exercise of police power, i.e., "the power to prescribe regulations to promote the health, morals, peace, education, good order or safety and general welfare of the people. 35 Invariably described as "the most essential, insistent, and illimitable of powers" 36 and "in a sense, the greatest and most powerful attribute of government, 37 the exercise of the power may be judicially inquired into and corrected only if it is capricious, 'whimsical, unjust or unreasonable, there having been a denial of due process or a violation of any other applicable constitutional guarantee. 38 As this Court held through Justice Jose P. Bengzon in Philippine Long Distance Company vs. City of Davao, et al. 39 police power "is elastic and must be responsive to various social conditions; it is

not, confined within narrow circumscriptions of precedents resting on past conditions; it must follow the legal progress of a democratic way of life." We were even more emphatic in Vda. de Genuino vs. The Court of Agrarian Relations, et al., 40 when We declared: "We do not see why public welfare when clashing with the individual right to property should not be made to prevail through the state's exercise of its police power. Resolution No. 27, s-1960 declaring the western part of highway 54, now E. de los Santos Avenue (EDSA, for short) from Shaw Boulevard to the Pasig River as an industrial and commercial zone, was obviously passed by the Municipal Council of Mandaluyong, Rizal in the exercise of police power to safeguard or promote the health, safety, peace, good order and general welfare of the people in the locality, Judicial notice may be taken of the conditions prevailing in the area, especially where lots Nos. 5 and 6 are located. The lots themselves not only front the highway; industrial and commercial complexes have flourished about the place. EDSA, a main traffic artery which runs through several cities and municipalities in the Metro Manila area, supports an endless stream of traffic and the resulting activity, noise and pollution are hardly conducive to the health, safety or welfare of the residents in its route. Having been expressly granted the power to adopt zoning and subdivision ordinances or regulations, the municipality of Mandaluyong, through its Municipal 'council, was reasonably, if not perfectly, justified under the circumstances, in passing the subject resolution. The scope of police power keeps expanding as civilization advances, stressed this Court, speaking thru Justice Laurel in the leading case of Calalang v. Williams et al., 41 ThusAs was said in the case of Dobbins v. Los Angeles (195 US 223, 238 49 L. ed. 169), 'the right to exercise the police power is a continuing one, and a business lawful today may in the future, because of changed situation, the growth of population or other causes, become a menace to the public health and welfare, and be required to yield to the public good.' And in People v. Pomar (46 Phil. 440), it was observed that 'advancing civilization is bringing within the scope of police power of the state today things which were not thought of as being with in such power yesterday. The development of civilization), the rapidly increasing population, the growth of public opinion, with an increasing desire on the part of the masses and of the government to look after and care for the interests of the individuals of the state, have brought within the police power many questions for regulation which formerly were not so considered. 42 (Emphasis, supplied.) Thus, the state, in order to promote the general welfare, may interfere with personal liberty, with property, and with business and occupations. Persons may be subjected to all kinds of restraints and burdens, in order to secure the general comfort health and prosperity of the state 43 and to this fundamental aim of our Government, the rights of the individual are subordinated. 44 The need for reconciling the non-impairment clause of the Constitution and the valid exercise of police power may also be gleaned from Helvering v. Davis 45 wherein Mr. Justice Cardozo, speaking for the Court, resolved the conflict "between one welfare and another, between particular and general, thus Nor is the concept of the general welfare static. Needs that were narrow or parochial a century ago may be interwoven in our day with the well-being of the nation What is critical or urgent changes with the times. 46

The motives behind the passage of the questioned resolution being reasonable, and it being a " legitimate response to a felt public need," 47 not whimsical or oppressive, the non-impairment of contracts clause of the Constitution will not bar the municipality's proper exercise of the power. Now Chief Justice Fernando puts it aptly when he declared: "Police power legislation then is not likely to succumb to the challenge that thereby contractual rights are rendered nugatory." 48 Furthermore, We restated in Philippine American Life Ins. Co. v. Auditor General 49 that laws and reservation of essential attributes of sovereign power are read into contracts agreed upon by the parties. Thus Not only are existing laws read into contracts in order to fix obligations as between the parties, but the reservation of essential attributes of sovereign power is also read into contracts as a postulate of the legal order. The policy of protecting contracts against impairments presupposes the maintenance of a government by virtue of which contractual relations are worthwhile a government which retains adequate authority to secure the peace and good order of society. Again, We held in Liberation Steamship Co., Inc. v. Court of Industrial Relations, 50 through Justice J.B.L. Reyes, that ... the law forms part of, and is read into, every contract, unless clearly excluded therefrom in those cases where such exclusion is allowed." The decision in Maritime Company of the Philippines v. Reparations Commission, 51 written for the Court by Justice Fernando, now Chief Justice, restates the rule. One last observation. Appellant has placed unqualified reliance on American jurisprudence and authorities 52 to bolster its theory that the municipal resolution in question cannot nullify or supersede the agreement of the parties embodied in the sales contract, as that, it claims, would impair the obligation of contracts in violation of the Constitution. Such reliance is misplaced. In the first place, the views set forth in American decisions and authorities are not per se controlling in the Philippines, the laws of which must necessarily be construed in accordance with the intention of its own lawmakers and such intent may be deduced from the language of each law and the context of other local legislation related thereto. 53 and Burgess, et al v. Magarian, et al., 55 two Of the cases cited by plaintiff-appellant, lend support to the conclusion reached by the trial court, i.e. that the municipal resolution supersedes/supervenes over the contractual undertaking between the parties. Dolan v. Brown, states that "Equity will not, as a rule, enforce a restriction upon the use of property by injunction where the property has so changed in character and environment as to make it unfit or unprofitable for use should the restriction be enforced, but will, in such a case, leave the complainant to whatever remedy he may have at law. 56 (Emphasis supplied.) Hence, the remedy of injunction in Dolan vs. Brown was denied on the specific holding that "A grantor may lawfully insert in his deed conditions or restrictions which are not against public policy and do not materially impair the beneficial enjoyment of the estate. 57 Applying the principle just stated to the present controversy, We can say that since it is now unprofitable, nay a hazard to the health and comfort, to use Lots Nos. 5 and 6 for strictly residential purposes, defendants- appellees should be permitted, on the strength of the resolution promulgated under the police power of the municipality, to use the same for commercial purposes. In Burgess v. Magarian et al. it was, held that "restrictive covenants running with the land are binding on all subsequent purchasers ... " However, Section 23 of the zoning ordinance involved therein contained a proviso expressly

declaring that the ordinance was not intended "to interfere with or abrogate or annul any easements, covenants or other agreement between parties." 58 In the case at bar, no such proviso is found in the subject resolution. It is, therefore, clear that even if the subject building restrictions were assumed by the defendant-appellee as vendee of Lots Nos. 5 and 6, in the corresponding deeds of sale, and later, in Transfer Certificates of Title Nos. 101613 and 106092, the contractual obligations so assumed cannot prevail over Resolution No. 27, of the Municipality of Mandaluyong, which has validly exercised its police power through the said resolution. Accordingly, the building restrictions, which declare Lots Nos. 5 and 6 as residential, cannot be enforced. IN VIEW OF THE FOREGOING, the decision appealed from, dismissing the complaint, is hereby AFFIRMED. "without pronouncement as to costs. SO ORDERED.

Makasiar, Antonio, Concepcion, Jr., Fernandez, Guerrero, De Castro and Melencio-Herrera, JJ., concur. Teehankee * and Aquino,JJ., took no part. Separate Opinions

BARREDO, J., concurring: I hold it is a matter of public knowledge that the place in question is commercial. It would be worse if the same were to be left as residential and all around are already commercial. FERNANDO, C.J., concurring: The exhaustive and lucid opinion of the Court penned by Justice Guillermo S. Santos commends itself for approval. I feel no hesitancy, therefore, in yielding concurrence, The observation, however, in the dissent of Justice Vicente Abad Santos relative to restrictive covenants calls, to my mind, for further reflection as to the respect to which they are entitled whenever police power legislation, whether on the national or local level, is assailed. Before doing so, however, it may not be amiss to consider further the effect of such all-embracing attribute on existing contracts. 1. Reference was made in the opinion of the Court to Philippine American Life Insurance Company v. Auditor General. 1 The ponente in that case was Justice Sanchez. A concurrence came from me. It contained this qualification: "It cannot be said, without rendering nugatory the constitutional guarantee of non-impairment, and for that matter both the equal protection and due process clauses which equally serve to protect property rights, that at the mere invocation of the police power, the objection on non-impairment grounds automatically loses force. Here, as in other cases where governmental authority may trench upon property rights, the process of balancing, adjustment or harmonization is called for. 2 After referring to three leading United States Supreme Court decisions, Home Building and Loan Association v. Blaisdell, 3 Nebbia v. New York, 4 and Norman v. Baltimore and Ohio Railroad Co., 5 I stated:

"All of the above decisions reflect the view that an enactment of a police power measure does not per se call for the overruling of objections based on either due process or non-impairment based on either due process or non-impairment grounds. There must be that balancing, or adjustment, or harmonization of the conflicting claims posed by an exercise of state regulatory power on the one hand and assertion of rights to property, whether of natural or of juridical persons, on the other. 'That is the only way by which the constitutional guarantees may serve the high ends that call for their inclusion in the Constitution and thus effectively preclude ally abusive exercise of governmental authority." 6 Nor did my concurrence stop there: "In the opinion of the Blaisdell case, penned by the then Chief Justice Hughes, there was this understandable stress on balancing or harmonizing, which is called for in litigations of this character: 'The policy of protecting contracts against impairment presupposes the maintenance of a government by virtue of which contractual relations are worthwhile a government which retains adequate authority to secure the peace and good order of society. This principle of harmonizing the constitutional prohibition with the necessary residuum of state power has had progressive recognition in the decisions of this Court.' Also to the same effect: 'Undoubtedly, whatever is reserved of state power must be consistent with the fair intent of the constitutional limitation of that power. The reserve power cannot be construed so as to destroy the limitation, nor is the limitation to be construed to destroy the reserved power in its essential aspects. 'They must be construed in harmony with each other. This principle precludes a construction which would permit the State to adopt as its policy the repudiation of debts or the destruction of contracts or the denial of means to enforce them. But it does not follow that conditions may not arise in which a temporary restraint of enforcement may be consistent with the spirit and purpose of the constitutional provision and thus be found to be within the range of the reserved power of the State to protect the vital interests of the community.' Further on, Chief Justice Hughes likewise stated: 'It is manifest from this review of our decisions that there has been a growing appreciation of public needs and of the necessity of finding ground for a rational compromise between individual rights and public welfare. " 7 This is the concluding paragraph of my concurrence in the Philippine American Life Insurance Co. case: "If emphasis be therefore laid, as this concurring opinion does, on the pressing and inescapable need for such an approach whenever a possible collision between state authority and an assertion of constitutional right to property may exist, it is not to depart from what sound constitutional orthodoxy dictates. It is rather to abide by what is compels. In litigations of this character then, perhaps much more so than in other disputes, where there is a reliance on a constitutional provision, the judiciary cannot escape what Holmes fitly referred to as the sovereign prerogative of choice, the exercise of which might possibly be impugned if there be no attempt, however slight, at such an effort of adjusting or reconciling the respective claims of state regulatory power and constitutionally protected rights." 8 I adhere to such a view. This is not to say that there is a departure therefrom in the able and scholarly opinion of Justice Santos. It is merely to stress what to my mind is a fundamental postulate of our Constitution. The only point I would wish to add is that in the process of such balancing and adjustment, the present Constitution, the Philippine American Life Insurance Co. decision having been promulgated under the 1935 Charter, leaves no doubt that the claim to property rights based on the non-impairment clause has a lesser weight. For as explicitly provided by our present fundamental law: "The State shall promote social Justice to ensure the dignity, welfare, and security of all the people. Towards this end, the

State shall regulate the acquisition, ownership, use, enjoyment, and disposition of private property, and equitably diffuse property ownership and profits. 9 2. Now as to restrictive convenants, accurately included by Hart and Sacks under the category of "private directive arrangements. " 10 Through them people are enable to agree on how to order their affairs. They could be utilized to govern their affairs. They could be utilized to govern their future conduct. It is a well-known fact that the common law relies to a great extent on such private directive arrangements to attain a desirable social condition. More specifically, such covenants are an important means of ordering one aspect of property relationships. Through them, there could be delimitation of land use rights. It is quite understandable why the law should ordinarily accord them deference, It does so, it has been said, both on grounds of morality and utility. Nonetheless, there are limits to the literal enforcement of their terms. To the extent that they ignore technological or economic progress, they are not automatically entitled to judicial protection. Clearly, they must "speak from one point of time to another." 11The parties, like all mortal, do not have the power of predicting the future with unfailing certainty. In cases therefore where societal welfare calls for police power legislation, the parties adversely affected should realize that arrangements dealing with property rights are not impressed with sanctity. That approach, in my view, was the guiding principle of the opinion of the Court. f fence my full and entire concurrence. ABAD SANTOS, J:, dissenting: Although Resolution No. 27, series of 1960, of the Municipal Council of Mandaluyong, Rizal, is valid until otherwise declared, I do not believe that its enactment was by virtue of the police power of that municipality. I do not here dispute the concept of police power as stated in Primicias vs. Fugoso, 80 Phil. 77 (1948) for as a matter of fact I accept it. And I agree also that it is elastic and must be responsive to various social conditions, etc. as ruled inPLDT vs. City of Davao, L-23080, Oct. 26, 1965, 15 SCRA 244. But Resolution No. 27, cannot be described as promotive of the health, morals, peace, education, good order or safety and general welfare of the people of Mandaluyong. On the contrary, its effect is the opposite. For the serenity, peace and quite of a residential section would by the resolution be replaced by the chaos, turmoil and frenzy of commerce and industry. Where there would be no industrial and noise pollution these bane of so-called progress would now pervade and suffocate the environment to the detriment of the ecology. To characterize the ordinance as an exercise of police power would be retrogressive. It will set back all the efforts of the Ministry of Human Settlements to improve the quality of life especially in Metro Manila. It will make Metro Manila, not the city of man as envisioned by its Governor but a city of commerce and industry. Considering, therefore, that Resolution No, 2-1 was not enacted in the legitimate exercise of police power, it cannot impair the restrictive covenants which go with the lands that were sold by the plaintiff-appellant. I vote for the reversal of the appealed decision. # Separate Opinions BARREDO, J., concurring: I hold it is a matter of public knowledge that the place in question is commercial. It would be worse if the same were to be left as residential and all around are already commercial. FERNANDO, C.J., concurring:

The exhaustive and lucid opinion of the Court penned by Justice Guillermo S. Santos commends itself for approval. I feel no hesitancy, therefore, in yielding concurrence, The observation, however, in the dissent of Justice Vicente Abad Santos relative to restrictive covenants calls, to my mind, for further reflection as to the respect to which they are entitled whenever police power legislation, whether on the national or local level, is assailed. Before doing so, however, it may not be amiss to consider further the effect of such all-embracing attribute on existing contracts. 1. Reference was made in the opinion of the Court to Philippine American Life Insurance Company v. Auditor General. 1 The ponente in that case was Justice Sanchez. A concurrence came from me. It contained this qualification: "It cannot be said, without rendering nugatory the constitutional guarantee of non-impairment, and for that matter both the equal protection and due process clauses which equally serve to protect property rights, that at the mere invocation of the police power, the objection on non-impairment grounds automatically loses force. Here, as in other cases where governmental authority may trench upon property rights, the process of balancing, adjustment or harmonization is called for. 2 After referring to three leading United States Supreme Court decisions, Home Building and Loan Association v. Blaisdell, 3 Nebbia v. New York, 4 and Norman v. Baltimore and Ohio Railroad Co., 5 I stated: "All of the above decisions reflect the view that an enactment of a police power measure does not per se call for the overruling of objections based on either due process or non-impairment based on either due process or non-impairment grounds. There must be that balancing, or adjustment, or harmonization of the conflicting claims posed by an exercise of state regulatory power on the one hand and assertion of rights to property, whether of natural or of juridical persons, on the other. 'That is the only way by which the constitutional guarantees may serve the high ends that call for their inclusion in the Constitution and thus effectively preclude ally abusive exercise of governmental authority." 6 Nor did my concurrence stop there: "In the opinion of the Blaisdell case, penned by the then Chief Justice Hughes, there was this understandable stress on balancing or harmonizing, which is called for in litigations of this character: 'The policy of protecting contracts against impairment presupposes the maintenance of a government by virtue of which contractual relations are worthwhile a government which retains adequate authority to secure the peace and good order of society. This principle of harmonizing the constitutional prohibition with the necessary residuum of state power has had progressive recognition in the decisions of this Court.' Also to the same effect: 'Undoubtedly, whatever is reserved of state power must be consistent with the fair intent of the constitutional limitation of that power. The reserve power cannot be construed so as to destroy the limitation, nor is the limitation to be construed to destroy the reserved power in its essential aspects. 'They must be construed in harmony with each other. This principle precludes a construction which would permit the State to adopt as its policy the repudiation of debts or the destruction of contracts or the denial of means to enforce them. But it does not follow that conditions may not arise in which a temporary restraint of enforcement may be consistent with the spirit and purpose of the constitutional provision and thus be found to be within the range of the reserved power of the State to protect the vital interests of the community.' Further on, Chief Justice Hughes likewise stated: 'It is manifest from this review of our decisions that there has been a growing appreciation of public needs and of the necessity of finding ground for a rational compromise between individual rights and public welfare. " 7 This is the concluding paragraph of my concurrence in the Philippine American Life Insurance Co. case: "If emphasis be therefore laid, as this concurring opinion does, on the pressing and inescapable need for

such an approach whenever a possible collision between state authority and an assertion of constitutional right to property may exist, it is not to depart from what sound constitutional orthodoxy dictates. It is rather to abide by what is compels. In litigations of this character then, perhaps much more so than in other disputes, where there is a reliance on a constitutional provision, the judiciary cannot escape what Holmes fitly referred to as the sovereign prerogative of choice, the exercise of which might possibly be impugned if there be no attempt, however slight, at such an effort of adjusting or reconciling the respective claims of state regulatory power and constitutionally protected rights." 8 I adhere to such a view. This is not to say that there is a departure therefrom in the able and scholarly opinion of Justice Santos. It is merely to stress what to my mind is a fundamental postulate of our Constitution. The only point I would wish to add is that in the process of such balancing and adjustment, the present Constitution, the Philippine American Life Insurance Co. decision having been promulgated under the 1935 Charter, leaves no doubt that the claim to property rights based on the non-impairment clause has a lesser weight. For as explicitly provided by our present fundamental law: "The State shall promote social Justice to ensure the dignity, welfare, and security of all the people. Towards this end, the State shall regulate the acquisition, ownership, use, enjoyment, and disposition of private property, and equitably diffuse property ownership and profits. 9 2. Now as to restrictive convenants, accurately included by Hart and Sacks under the category of "private directive arrangements. " 10 Through them people are enable to agree on how to order their affairs. They could be utilized to govern their affairs. They could be utilized to govern their future conduct. It is a well-known fact that the common law relies to a great extent on such private directive arrangements to attain a desirable social condition. More specifically, such covenants are an important means of ordering one aspect of property relationships. Through them, there could be delimitation of land use rights. It is quite understandable why the law should ordinarily accord them deference, It does so, it has been said, both on grounds of morality and utility. Nonetheless, there are limits to the literal enforcement of their terms. To the extent that they ignore technological or economic progress, they are not automatically entitled to judicial protection. Clearly, they must "speak from one point of time to another." 11The parties, like all mortal, do not have the power of predicting the future with unfailing certainty. In cases therefore where societal welfare calls for police power legislation, the parties adversely affected should realize that arrangements dealing with property rights are not impressed with sanctity. That approach, in my view, was the guiding principle of the opinion of the Court. f fence my full and entire concurrence. ABAD SANTOS, J:, dissenting: Although Resolution No. 27, series of 1960, of the Municipal Council of Mandaluyong, Rizal, is valid until otherwise declared, I do not believe that its enactment was by virtue of the police power of that municipality. I do not here dispute the concept of police power as stated in Primicias vs. Fugoso, 80 Phil. 77 (1948) for as a matter of fact I accept it. And I agree also that it is elastic and must be responsive to various social conditions, etc. as ruled inPLDT vs. City of Davao, L-23080, Oct. 26, 1965, 15 SCRA 244. But Resolution No. 27, cannot be described as promotive of the health, morals, peace, education, good order or safety and general welfare of the people of Mandaluyong. On the contrary, its effect is the opposite. For the serenity, peace and quite of a residential section would by the resolution be replaced by the chaos, turmoil and

frenzy of commerce and industry. Where there would be no industrial and noise pollution these bane of so-called progress would now pervade and suffocate the environment to the detriment of the ecology. To characterize the ordinance as an exercise of police power would be retrogressive. It will set back all the efforts of the Ministry of Human Settlements to improve the quality of life especially in Metro Manila. It will make Metro Manila, not the city of man as envisioned by its Governor but a city of commerce and industry. Considering, therefore, that Resolution No, 2-1 was not enacted in the legitimate exercise of police power, it cannot impair the restrictive covenants which go with the lands that were sold by the plaintiff-appellant. I vote for the reversal of the appealed decision.

ORTIGAS VS. FEATI BANK [94 SCRA 533; NO.L-24670; 14 DEC 1979] CASE DIGEST Monday, February 09, 2009 Posted by Coffeeholic Writes Labels: Case Digests, Political Law

Facts: Plaintiff is engaged in real estate business, developing and selling lots to the public,

particularly the Highway Hills Subdivision along EDSA. On March 4, 1952, plaintiff, as vendor, and Augusto Padilla and Natividad Angeles, as vendees, entered into separate agreements of sale on installments over two parcels of land of the Subdivision. On July 19, 1962, the said vendees transferred their rights and interests over the aforesaid lots in favor of one Emma Chavez. Upon completion of payment of the purchase price, the plaintiff executed the corresponding deeds of sale in favor of Emma Chavez. Both the agreements (of sale on installment) and the deeds of sale contained the stipulations or restrictions that: 1. The parcel of land shall be used exclusively for residential purposes, and she shall not be entitled to take or remove soil, stones or gravelfrom it or any other lots belonging to the Seller. 2. All buildings and other improvements (except the fence) which may be constructed at any time in said lot must be, (a) of strong materials and properly painted, (b) provided with modern sanitary installationsconnected either to the public sewer or to an approved septic tank, and (c) shall not be at a distance of less than two (2) meters from its boundary lines. Eventually said lots were bought by defendant. Lot 5 directly from Chavez and Lot 6 from Republic Flour Mills by deed of exchange, with same restrictions. Plaintiff claims that restriction is for the beautification of the subdivision. Defendant claimed of the commercialization of western part of EDSA. Defendant began constructing a commercial bank building. Plaintiff demand to stop it, which forced him to file a case, which was later dismissed, upholding police power. Motion for recon was denied, hence the appeal.

Issue: Whether or Not non-impairment clause violated.

Held: No. Resolution is a valid exercise of police power. EDSA, a main traffic artery which runs through several cities and municipalities in the Metro Manila area, supports an endless stream of traffic and the resulting activity, noise and pollution are hardly conducive to the health, safety or welfare of the residents in its route. Health, safety, peace, good order and general welfare of the people in the locality are justifications for this. It should be stressed, that while non-impairment of contracts is constitutionally guaranteed, the rule is not absolute, since it has to be reconciled with the legitimate exercise of police power.

G.R. No. 72873 May 28, 1987 CARLOS ALONZO and CASIMIRA ALONZO, petitioners, vs. INTERMEDIATE APPELLATE COURT and TECLA PADUA, respondents. CRUZ, J.: The question is sometimes asked, in serious inquiry or in curious conjecture, whether we are a court of law or a court of justice. Do we apply the law even if it is unjust or do we administer justice even against the law? Thus queried, we do not equivocate. The answer is that we do neither because we are a court both of law and of justice. We apply the law with justice for that is our mission and purpose in the scheme of our Republic. This case is an illustration.

Five brothers and sisters inherited in equal pro indiviso shares a parcel of land registered in 'the name of their deceased parents under OCT No. 10977 of the Registry of Deeds of Tarlac. 1 On March 15, 1963, one of them, Celestino Padua, transferred his undivided share of the herein petitioners for the sum of P550.00 by way of absolute sale. 2 One year later, on April 22, 1964, Eustaquia Padua, his sister, sold her own share to the same vendees, in an instrument denominated "Con Pacto de Retro Sale," for the sum of P 440.00. 3 By virtue of such agreements, the petitioners occupied, after the said sales, an area corresponding to two-fifths of the said lot, representing the portions sold to them. The vendees subsequently enclosed the same with a fence. In 1975, with their consent, their son Eduardo Alonzo and his wife built a semi-concrete house on a part of the enclosed area. 4 On February 25, 1976, Mariano Padua, one of the five coheirs, sought to redeem the area sold to the spouses Alonzo, but his complaint was dismissed when it appeared that he was an American citizen . 5 On May 27, 1977, however, Tecla Padua, another co-heir, filed her own complaint invoking the same right of redemption claimed by her brother. 6 The trial court * also dismiss this complaint, now on the ground that the right had lapsed, not having been exercised within thirty days from notice of the sales in 1963 and 1964. Although there was no written notice, it was held that actual knowledge of the sales by the co-heirs satisfied the requirement of the law. 7 In truth, such actual notice as acquired by the co-heirs cannot be plausibly denied. The other co-heirs, including Tecla Padua, lived on the same lot, which consisted of only 604 square meters, including the portions sold to the petitioners . 8 Eustaquia herself, who had sold her portion, was staying in the same house with her sister Tecla, who later claimed redemption petition. 9 Moreover, the petitioners and the private respondents were close friends and neighbors whose children went to school together. 10 It is highly improbable that the other co-heirs were unaware of the sales and that they thought, as they alleged, that the area occupied by the petitioners had merely been mortgaged by Celestino and Eustaquia. In the circumstances just narrated, it was impossible for Tecla not to know that the area occupied by the petitioners had been purchased by them from the other. co-heirs. Especially significant was the erection thereon of the permanent semi-concrete structure by the petitioners' son, which was done without objection on her part or of any of the other co-heirs. The only real question in this case, therefore, is the correct interpretation and application of the pertinent law as invoked, interestingly enough, by both the petitioners and the private respondents. This is Article 1088 of the Civil Code, providing as follows: Art. 1088. Should any of the heirs sell his hereditary rights to a stranger before the partition, any or all of the co-heirs may be subrogated to the rights of the purchaser by reimbursing him for the price of the sale, provided they do so within the period of one month from the time they were notified in writing of the sale by the vendor. In reversing the trial court, the respondent court ** declared that the notice required by the said article was writtennotice and that actual notice would not suffice as a substitute. Citing the same case of De Conejero v. Court of Appeals 11 applied by the trial court, the respondent

court held that that decision, interpreting a like rule in Article 1623, stressed the need for written notice although no particular form was required. Thus, according to Justice J.B.L. Reyes, who was the ponente of the Court, furnishing the coheirs with a copy of the deed of sale of the property subject to redemption would satisfy the requirement for written notice. "So long, therefore, as the latter (i.e., the redemptioner) is informed in writing of the sale and the particulars thereof," he declared, "the thirty days for redemption start running. " In the earlier decision of Butte v. UY, 12 " the Court, speaking through the same learned jurist, emphasized that the written notice should be given by the vendor and not the vendees, conformably to a similar requirement under Article 1623, reading as follows: Art. 1623. The right of legal pre-emption or redemption shall not be exercised except within thirty days from the notice in writing by the prospective vendor, or by the vendors, as the case may be. The deed of sale shall not be recorded in the Registry of Property, unless accompanied by an affidavit of the vendor that he has given written notice thereof to all possible redemptioners. The right of redemption of co-owners excludes that of the adjoining owners. As "it is thus apparent that the Philippine legislature in Article 1623 deliberately selected a particular method of giving notice, and that notice must be deemed exclusive," the Court held that notice given by the vendees and not the vendor would not toll the running of the 30-day period. The petition before us appears to be an illustration of the Holmes dictum that "hard cases make bad laws" as the petitioners obviously cannot argue against the fact that there was really no written notice given by the vendors to their co-heirs. Strictly applied and interpreted, Article 1088 can lead to only one conclusion, to wit, that in view of such deficiency, the 30 day period for redemption had not begun to run, much less expired in 1977. But as has also been aptly observed, we test a law by its results; and likewise, we may add, by its purposes. It is a cardinal rule that, in seeking the meaning of the law, the first concern of the judge should be to discover in its provisions the in tent of the lawmaker. Unquestionably, the law should never be interpreted in such a way as to cause injustice as this is never within the legislative intent. An indispensable part of that intent, in fact, for we presume the good motives of the legislature, is to render justice. Thus, we interpret and apply the law not independently of but in consonance with justice. Law and justice are inseparable, and we must keep them so. To be sure, there are some laws that, while generally valid, may seem arbitrary when applied in a particular case because of its peculiar circumstances. In such a situation, we are not bound, because only of our nature and functions, to apply them just the same, in slavish obedience to their language. What we do instead is find a balance between the word and the will, that justice may be done even as the law is obeyed. As judges, we are not automatons. We do not and must not unfeelingly apply the law as it is worded, yielding like robots to the literal command without regard to its cause and consequence. "Courts are apt to err by sticking too closely to the words of a law," so we are

warned, by Justice Holmes again, "where these words import a policy that goes beyond them." 13 While we admittedly may not legislate, we nevertheless have the power to interpret the law in such a way as to reflect the will of the legislature. While we may not read into the law a purpose that is not there, we nevertheless have the right to read out of it the reason for its enactment. In doing so, we defer not to "the letter that killeth" but to "the spirit that vivifieth," to give effect to the law maker's will. The spirit, rather than the letter of a statute determines its construction, hence, a statute must be read according to its spirit or intent. For what is within the spirit is within the letter but although it is not within the letter thereof, and that which is within the letter but not within the spirit is not within the statute. Stated differently, a thing which is within the intent of the lawmaker is as much within the statute as if within the letter; and a thing which is within the letter of the statute is not within the statute unless within the intent of the lawmakers. 14 In requiring written notice, Article 1088 seeks to ensure that the redemptioner is properly notified of the sale and to indicate the date of such notice as the starting time of the 30-day period of redemption. Considering the shortness of the period, it is really necessary, as a general rule, to pinpoint the precise date it is supposed to begin, to obviate any problem of alleged delays, sometimes consisting of only a day or two. The instant case presents no such problem because the right of redemption was invoked not days but years after the sales were made in 1963 and 1964. The complaint was filed by Tecla Padua in 1977, thirteen years after the first sale and fourteen years after the second sale. The delay invoked by the petitioners extends to more than a decade, assuming of course that there was a valid notice that tolled the running of the period of redemption. Was there a valid notice? Granting that the law requires the notice to be written, would such notice be necessary in this case? Assuming there was a valid notice although it was not in writing. would there be any question that the 30-day period for redemption had expired long before the complaint was filed in 1977? In the face of the established facts, we cannot accept the private respondents' pretense that they were unaware of the sales made by their brother and sister in 1963 and 1964. By requiring written proof of such notice, we would be closing our eyes to the obvious truth in favor of their palpably false claim of ignorance, thus exalting the letter of the law over its purpose. The purpose is clear enough: to make sure that the redemptioners are duly notified. We are satisfied that in this case the other brothers and sisters were actually informed, although not in writing, of the sales made in 1963 and 1964, and that such notice was sufficient. Now, when did the 30-day period of redemption begin? While we do not here declare that this period started from the dates of such sales in 1963 and 1964, we do say that sometime between those years and 1976, when the first complaint for redemption was filed, the other co-heirs were actually informed of the sale and that thereafter the 30-day period started running and ultimately expired. This could have happened any time during the interval of thirteen years, when none of the co-heirs made a move to redeem the properties sold. By 1977, in other words, when Tecla Padua filed her complaint, the right of redemption had already been extinguished because the period for its exercise had already expired.

The following doctrine is also worth noting: While the general rule is, that to charge a party with laches in the assertion of an alleged right it is essential that he should have knowledge of the facts upon which he bases his claim, yet if the circumstances were such as should have induced inquiry, and the means of ascertaining the truth were readily available upon inquiry, but the party neglects to make it, he will be chargeable with laches, the same as if he had known the facts. 15 It was the perfectly natural thing for the co-heirs to wonder why the spouses Alonzo, who were not among them, should enclose a portion of the inherited lot and build thereon a house of strong materials. This definitely was not the act of a temporary possessor or a mere mortgagee. This certainly looked like an act of ownership. Yet, given this unseemly situation, none of the co-heirs saw fit to object or at least inquire, to ascertain the facts, which were readily available. It took all of thirteen years before one of them chose to claim the right of redemption, but then it was already too late. We realize that in arriving at our conclusion today, we are deviating from the strict letter of the law, which the respondent court understandably applied pursuant to existing jurisprudence. The said court acted properly as it had no competence to reverse the doctrines laid down by this Court in the above-cited cases. In fact, and this should be clearly stressed, we ourselves are not abandoning the De Conejero and Buttle doctrines. What we are doing simply is adopting an exception to the general rule, in view of the peculiar circumstances of this case. The co-heirs in this case were undeniably informed of the sales although no notice in writing was given them. And there is no doubt either that the 30-day period began and ended during the 14 years between the sales in question and the filing of the complaint for redemption in 1977, without the co-heirs exercising their right of redemption. These are the justifications for this exception. More than twenty centuries ago, Justinian defined justice "as the constant and perpetual wish to render every one his due." 16 That wish continues to motivate this Court when it assesses the facts and the law in every case brought to it for decision. Justice is always an essential ingredient of its decisions. Thus when the facts warrants, we interpret the law in a way that will render justice, presuming that it was the intention of the lawmaker, to begin with, that the law be dispensed with justice. So we have done in this case. WHEREFORE, the petition is granted. The decision of the respondent court is REVERSED and that of the trial court is reinstated, without any pronouncement as to costs. It is so ordered. Teehankee, C.J., Yap, Narvasa, Melencio-Herrera Gutierrez, Jr., Paras, Gancayco, Padilla, Bidin, Sarmiento and Cortes, JJ., concurred Alonzo vs. Intermediate Appellate Court and Padua (G.R. No. L-72873. May 28, 1987) 16APR CARLOS ALONZO and CASIMIRA ALONZO, petitioners, vs. INTERMEDIATE APPELLATE COURT and TECLA PADUA, respondents.

Perpetuo L.B. Alonzo for petitioners. Luis R. Reyes for private respondent. Ponente: CRUZ FACTS: Five brothers and sisters inherited in equal pro indiviso shares a parcel of land registered in the name of their deceased parents. One of them transferred his undivided share by way of absolute sale. A year later, his sister sold her share in a Con Pacto de Retro Sale. By virtue of such agreements, the petitioners occupied, after the said sales, an area corresponding to twofifths of the said lot, representing the portions sold to them. The vendees subsequently enclosed the same with a fence. with their consent, their son Eduardo Alonzo and his wife built a semi-concrete house on a part of the enclosed area. One of the five coheirs sought to redeem the area sold to petitioners but was dismissed when it appeared that he was an American citizen. Another coheir filed her own complaint invoking the same right of redemption of her brother. Trial court dismissed the complaint, on the ground that the right had lapsed, not having been exercised within thirty days from notice of the sales. Although there was no written notice, it was held that actual knowledge of the sales by the co-heirs satisfied the requirement of the law. Respondent court reversed the decision of the Trial Court. ISSUE: Whether or not actual knowledge satisfied the requirement of Art. 1088 of the New Civil Code. HELD: YES. Decision of respondent court was reversed and that of trial court reinstated. RATIO: The co-heirs in this case were undeniably informed of the sales although no notice in writing was given them. And there is no doubt either that the 30-day period began and ended during the 14 years between the sales in question and the filing of the complaint for redemption in 1977, without the co-heirs exercising their right of redemption. These are the justifications for this exception. While [courts] may not read into the law a purpose that is not there, [courts] nevertheless have the right to read out of it the reason for its enactment. In doing so, [courts] defer not to the letter that killeth but to the spirit that vivifieth, to give effect to the law makers will. Republic of the Philippines SUPREME COURT Manila SECOND DIVISION G.R. No. L-69809 October 16, 1986

EDGARDO A. GAANAN, petitioner, vs. INTERMEDIATE APPELLATE COURT and PEOPLE OF THE PHILIPPINES, respondents.

GUTIERREZ, JR., J.: This petition for certiorari asks for an interpretation of Republic Act (RA) No. 4200, otherwise known as the Anti-Wiretapping Act, on the issue of whether or not an extension telephone is among the prohibited devices in Section 1 of the Act, such that its use to overhear a private conversation would constitute unlawful interception of communications between the two parties using a telephone line. The facts presented by the People and narrated in the respondent court's decision are not disputed by the petitioner. In the morning of October 22, 1975, complainant Atty. Tito Pintor and his client Manuel Montebon were in the living room of complainant's residence discussing the terms for the withdrawal of the complaint for direct assault which they filed with the Office of the City Fiscal of Cebu against Leonardo Laconico. After they had decided on the proposed conditions, complainant made a telephone call to Laconico (tsn, August 26, 1981, pp. 3-5). That same morning, Laconico telephoned appellant, who is a lawyer, to come to his office and advise him on the settlement of the direct assault case because his regular lawyer, Atty. Leon Gonzaga, went on a business trip. According to the request, appellant went to the office of Laconico where he was briefed about the problem. (Exhibit 'D', tsn, April 22, 1982, pp. 4-5). When complainant called up, Laconico requested appellant to secretly listen to the telephone conversation through a telephone extension so as to hear personally the proposed conditions for the settlement. Appellant heard complainant enumerate the following conditions for withdrawal of the complaint for direct assault. (a) the P5,000.00 was no longer acceptable, and that the figure had been increased to P8,000.00. A breakdown of the P8,000.00 had been made together with other demands, to wit: (a) P5,000.00 no longer for the teacher Manuel Montebon, but for Atty. Pintor himself in persuading his client to withdraw the case for Direct Assault against Atty. Laconico before the Cebu City Fiscal's Office; (b) Public apology to be made by Atty. Laconico before the students of Don Bosco Technical High School; (c) Pl,000.00 to be given to the Don Bosco Faculty club; (d) transfer of son of Atty. Laconico to another school or another section of Don Bosco Technical High School; (e) Affidavit of desistance by Atty. Laconico on the Maltreatment case earlier filed against Manuel Montebon at the Cebu City Fiscal's Office, whereas Montebon's affidavit of desistance on the Direct Assault Case against Atty. Laconico to be filed later; (f) Allow Manuel Montebon to continue teaching at the Don Bosco Technical School;

(g) Not to divulge the truth about the settlement of the Direct Assault Case to the mass media; (h) P2,000.00 attorney s fees for Atty. Pintor. (tsn, August 26, 1981, pp. 47-48). Twenty minutes later, complainant called up again to ask Laconico if he was agreeable to the conditions. Laconico answered 'Yes'. Complainant then told Laconico to wait for instructions on where to deliver the money. (tsn, March 10, 1983, pp. 2-12). Complainant called up again and instructed Laconico to give the money to his wife at the office of the then Department of Public Highways. Laconico who earlier alerted his friend Colonel Zulueta of the Criminal Investigation Service of the Philippine Constabulary, insisted that complainant himself should receive the money. (tsn, March 10, 1982, pp. 26-33). When he received the money at the Igloo Restaurant, complainant was arrested by agents of the Philippine Constabulary. Appellant executed on the following day an affidavit stating that he heard complainant demand P8,000.00 for the withdrawal of the case for direct assault. Laconico attached the affidavit of appellant to the complainant for robbery/extortion which he filed against complainant. Since appellant listened to the telephone conversation without complainant's consent, complainant charged appellant and Laconico with violation of the Anti-Wiretapping Act. After trial on the merits, the lower court, in a decision dated November 22, 1982, found both Gaanan and Laconico guilty of violating Section 1 of Republic Act No. 4200. The two were each sentenced to one (1) year imprisonment with costs. Not satisfied with the decision, the petitioner appealed to the appellate court. On August 16, 1984, the Intermediate Appellate Court affirmed the decision of the trial court, holding that the communication between the complainant and accused Laconico was private in nature and, therefore, covered by Rep. Act No. 4200; that the petitioner overheard such communication without the knowledge and consent of the complainant; and that the extension telephone which was used by the petitioner to overhear the telephone conversation between complainant and Laconico is covered in the term "device' as provided in Rep. Act No. 4200. In this petition for certiorari, the petitioner assails the decision of the appellate court and raises the following issues; (a) whether or not the telephone conversation between the complainant and accused Laconico was private in nature; (b) whether or not an extension telephone is covered by the term "device or arrangement" under Rep. Act No. 4200; (c) whether or not the petitioner had authority to listen or overhear said telephone conversation and (d) whether or not Rep. Act No. 4200 is ambiguous and, therefore, should be construed in favor of the petitioner. Section 1 of Rep. Act No. 4200 provides: Section 1. It shall be unlawful for any person, not being authorized by all the parties to any private communication or spoken word, to tap any wire or cable or by using any other device or arrangement, to secretly overhear, intercept, or record such communication or spoken word by using a device commonly known as a dictaphone or dictagraph or detectaphone or walkie-talkie or tape-recorder, or however otherwise described: It shall be unlawful for any person, be he a participant or not in the act or acts penalized in the next preceeding sentence, to knowingly possess any tape record, wire record, disc record, or

any other such record, or copies thereof, of any communication or spoken word secured either before or after the effective date of this Act in the manner prohibited by this law; or to replay the same for any other person or persons; or to communicate the contents thereof, either verbally or in writing, or to furnish transcriptions thereof, whether complete or partial, to any other person: Provided, that the use of such record or any copies thereof as evidence in any civil, criminal investigation or trial of offenses mentioned in Section 3 hereof, shall not be covered by this prohibition. We rule for the petitioner. We are confronted in this case with the interpretation of a penal statute and not a rule of evidence. The issue is not the admissibility of evidence secured over an extension line of a telephone by a third party. The issue is whether or not the person called over the telephone and his lawyer listening to the conversation on an extension line should both face prison sentences simply because the extension was used to enable them to both listen to an alleged attempt at extortion. There is no question that the telephone conversation between complainant Atty. Pintor and accused Atty. Laconico was "private" in the sense that the words uttered were made between one person and another as distinguished from words between a speaker and a public. It is also undisputed that only one of the parties gave the petitioner the authority to listen to and overhear the caller's message with the use of an extension telephone line. Obviously, complainant Pintor, a member of the Philippine bar, would not have discussed the alleged demand for an P8,000.00 consideration in order to have his client withdraw a direct assault charge against Atty. Laconico filed with the Cebu City Fiscal's Office if he knew that another lawyer was also listening. We have to consider, however, that affirmance of the criminal conviction would, in effect, mean that a caller by merely using a telephone line can force the listener to secrecy no matter how obscene, criminal, or annoying the call may be. It would be the word of the caller against the listener's. Because of technical problems caused by the sensitive nature of electronic equipment and the extra heavy loads which telephone cables are made to carry in certain areas, telephone users often encounter what are called "crossed lines". An unwary citizzen who happens to pick up his telephone and who overhears the details of a crime might hesitate to inform police authorities if he knows that he could be accused under Rep. Act 4200 of using his own telephone to secretly overhear the private communications of the would be criminals. Surely the law was never intended for such mischievous results. The main issue in the resolution of this petition, however, revolves around the meaning of the phrase "any other device or arrangement." Is an extension of a telephone unit such a device or arrangement as would subject the user to imprisonment ranging from six months to six years with the accessory penalty of perpetual absolute disqualification for a public officer or deportation for an alien? Private secretaries with extension lines to their bosses' telephones are sometimes asked to use answering or recording devices to record business conversations between a boss and another businessman. Would transcribing a recorded message for the use of the boss be a proscribed offense? or for that matter, would a "party line" be a device or arrangement under the law?

The petitioner contends that telephones or extension telephones are not included in the enumeration of "commonly known" listening or recording devices, nor do they belong to the same class of enumerated electronic devices contemplated by law. He maintains that in 1964, when Senate Bill No. 9 (later Rep. Act No. 4200) was being considered in the Senate, telephones and extension telephones were already widely used instruments, probably the most popularly known communication device. Whether or not listening over a telephone party line would be punishable was discussed on the floor of the Senate. Yet, when the bill was finalized into a statute, no mention was made of telephones in the enumeration of devices "commonly known as a dictaphone or dictagraph, detectaphone or walkie talkie or tape recorder or however otherwise described." The omission was not a mere oversight. Telephone party lines were intentionally deleted from the provisions of the Act. The respondent People argue that an extension telephone is embraced and covered by the term "device" within the context of the aforementioned law because it is not a part or portion of a complete set of a telephone apparatus. It is a separate device and distinct set of a movable apparatus consisting of a wire and a set of telephone receiver not forming part of a main telephone set which can be detached or removed and can be transferred away from one place to another and to be plugged or attached to a main telephone line to get the desired communication corning from the other party or end. The law refers to a "tap" of a wire or cable or the use of a "device or arrangement" for the purpose of secretly overhearing, intercepting, or recording the communication. There must be either a physical interruption through a wiretap or the deliberate installation of a device or arrangement in order to overhear, intercept, or record the spoken words. An extension telephone cannot be placed in the same category as a dictaphone, dictagraph or the other devices enumerated in Section 1 of RA No. 4200 as the use thereof cannot be considered as "tapping" the wire or cable of a telephone line. The telephone extension in this case was not installed for that purpose. It just happened to be there for ordinary office use. It is a rule in statutory construction that in order to determine the true intent of the legislature, the particular clauses and phrases of the statute should not be taken as detached and isolated expressions, but the whole and every part thereof must be considered in fixing the meaning of any of its parts. (see Commissioner of Customs v. Esso Estandard Eastern, Inc., 66 SCRA 113,120). In the case of Empire Insurance Com any v. Rufino (90 SCRA 437, 443-444), we ruled: Likewise, Article 1372 of the Civil Code stipulates that 'however general the terms of a contract may be, they shall not be understood to comprehend things that are distinct and cases that are different from those upon which the parties intended to agree.' Similarly, Article 1374 of the same Code provides that 'the various stipulations of a contract shall be interpreted together, attributing to the doubtful ones that sense which may result from all of them taken jointly. xxx xxx xxx Consequently, the phrase 'all liabilities or obligations of the decedent' used in paragraph 5(c) and 7(d) should be then restricted only to those listed in the Inventory and should not be construed as to comprehend all other obligations of the decedent. The rule that

'particularization followed by a general expression will ordinarily be restricted to the former' is based on the fact in human experience that usually the minds of parties are addressed specially to the particularization, and that the generalities, though broad enough to comprehend other fields if they stood alone, are used in contemplation of that upon which the minds of the parties are centered. (Hoffman v. Eastern Wisconsin R., etc., Co., 134 Wis. 603, 607, 115 NW 383, cited in Francisco, Revised Rules of Court (Evidence), 1973 ed, pp. 180-181). Hence, the phrase "device or arrangement" in Section 1 of RA No. 4200, although not exclusive to that enumerated therein, should be construed to comprehend instruments of the same or similar nature, that is, instruments the use of which would be tantamount to tapping the main line of a telephone. It refers to instruments whose installation or presence cannot be presumed by the party or parties being overheard because, by their very nature, they are not of common usage and their purpose is precisely for tapping, intercepting or recording a telephone conversation. An extension telephone is an instrument which is very common especially now when the extended unit does not have to be connected by wire to the main telephone but can be moved from place ' to place within a radius of a kilometer or more. A person should safely presume that the party he is calling at the other end of the line probably has an extension telephone and he runs the risk of a third party listening as in the case of a party line or a telephone unit which shares its line with another. As was held in the case of Rathbun v. United States (355, U.S. 107, 2 L Ed 2d 137-138): Common experience tells us that a call to a particular telephone number may cause the bell to ring in more than one ordinarily used instrument. Each party to a telephone conversation takes the risk that the other party may have an extension telephone and may allow another to overhear the conversation. When such takes place there has been no violation of any privacy of which the parties may complain. Consequently, one element of 605, interception, has not occurred. In the same case, the Court further ruled that the conduct of the party would differ in no way if instead of repeating the message he held out his hand-set so that another could hear out of it and that there is no distinction between that sort of action and permitting an outsider to use an extension telephone for the same purpose. Furthermore, it is a general rule that penal statutes must be construed strictly in favor of the accused. Thus, in case of doubt as in the case at bar, on whether or not an extension telephone is included in the phrase "device or arrangement", the penal statute must be construed as not including an extension telephone. In the case of People v. Purisima, 86 SCRA 542, 562, we explained the rationale behind the rule: American jurisprudence sets down the reason for this rule to be the tenderness of the law of the rights of individuals; the object is to establish a certain rule by conformity to which mankind would be safe, and the discretion of the court limited. (United States v. Harris, 177 US 305, 44 L Ed 780, 20 S Ct 609; Braffith v. Virgin Islands (CA3) 26 F2d 646; Caudill v. State, 224 Ind 531, 69 NE2d; Jennings v. Commonwealth, 109 VA 821,63 SE 1080, all cited in 73 Am Jur 2d 452). The purpose is not to enable a guilty person to escape punishment through a technicality but to provide a precise definition of forbidden acts." (State v. Zazzaro, 20 A 2d 737, quoted in Martin's Handbook on Statutory Construction, Rev. Ed. pp. 183-184).

In the same case of Purisima, we also ruled that on the construction or interpretation of a legislative measure, the primary rule is to search for and determine the intent and spirit of the law. A perusal of the Senate Congressional Records will show that not only did our lawmakers not contemplate the inclusion of an extension telephone as a prohibited device or arrangement" but of greater importance, they were more concerned with penalizing the act of recording than the act of merely listening to a telephone conversation. xxx xxx xxx Senator Taada. Another possible objection to that is entrapment which is certainly objectionable. It is made possible by special amendment which Your Honor may introduce. Senator Diokno.Your Honor, I would feel that entrapment would be less possible with the amendment than without it, because with the amendment the evidence of entrapment would only consist of government testimony as against the testimony of the defendant. With this amendment, they would have the right, and the government officials and the person in fact would have the right to tape record their conversation. Senator Taada. In case of entrapment, it would be the government. Senator Diokno. In the same way, under this provision, neither party could record and, therefore, the court would be limited to saying: "Okay, who is more credible, the police officers or the defendant?" In these cases, as experienced lawyers, we know that the Court go with the peace offices. (Congressional Record, Vol. 111, No. 33, p. 628, March 12, 1964). xxx xxx xxx Senator Diokno. The point I have in mind is that under these conditions, with an agent outside listening in, he could falsify the testimony and there is no way of checking it. But if you allow him to record or make a recording in any form of what is happening, then the chances of falsifying the evidence is not very much. Senator Taada. Your Honor, this bill is not intended to prevent the presentation of false testimony. If we could devise a way by which we could prevent the presentation of false testimony, it would be wonderful. But what this bill intends to prohibit is the use of tape record and other electronic devices to intercept private conversations which later on will be used in court. (Congressional Record, Vol. III, No. 33, March 12, 1964, p. 629). It can be readily seen that our lawmakers intended to discourage, through punishment, persons such as government authorities or representatives of organized groups from installing devices in order to gather evidence for use in court or to intimidate, blackmail or gain some unwarranted advantage over the telephone users. Consequently, the mere act of listening, in order to be punishable must strictly be with the use of the enumerated devices in RA No. 4200 or others of similar nature. We are of the view that an extension telephone is not among such devices or arrangements.

WHEREFORE, the petition is GRANTED. The decision of the then Intermediate Appellate Court dated August 16, 1984 is ANNULLED and SET ASIDE. The petitioner is hereby ACQUITTED of the crime of violation of Rep. Act No. 4200, otherwise known as the Anti-Wiretapping Act. SO ORDERED. Gaanan v. IAC, 145 SCRA 112 (1986) CASE DIGEST F: Complainant Atty. Pintor and Montebon offered to withdraw the complaint for direct assault they filed against Laconico after demanding P8,000 from him. This demand was heard by Atty. Gaanan through a telephone extension as requested by Laconico so as to personally hear the proposed conditions for the settlement. Atty. Pintor was subsequently arrested in an entrapment operation upon receipt of the money. Since Atty. Gaanan listened to the telephone conversation without complainant''s consent, complainant charged Gaanan and Laconico with violation of the Anti- Wiretapping Act (RA 4200). ISSUE: W/N an extension telephone is among the prohibited devices in Sec. 1 of RA 4200 such that iuts use to overhear a private conversation would constitute an unlawful interception of communication between 2 parties using a telephone line. HELD: NO An extension tel. cannot be placed in the same category as a dictaphone, dictagraph, or other devices enumerated in Sec. 1 of the law as the use thereof cannot be considered as "tapping" the wire or cable of a telephone line. This section refers to instruments whose installation or presence cannot be presumed by the party or parties being overheard because, by their very nature, they are not of common usage and their purpose is precisely for tapping, intercepting, or recording a tel. conversation. The tel. extension in this case was not installed for that purpose. It just happened to be there for ordinary office use. Furthermore, it is a general rule that penal statutes must be construed strictly in favor of the accused. Thus in the case of doubt as in this case, on WON an extension tel. is included in the phrase "device or arrangement" the penal statute must be construed as not including an extension tel. A perusal of the Senate Congressional Record shows that our lawmakers intended to discourage, through punishment, persons suchj as government authorities or representatives of organized groups from installing devices in order to gather evidence for use in court or to intimidate, blackmail or gain some unwarranted advantage over the tel. users. Consequently, the mere act of listening , in order to be punishable must stricly be with the use of the enumerated devices in RA 4200 or others of similar nature. Republic of the Philippines SUPREME COURT Manila FIRST DIVISION

G.R. No. 120715 March 29, 1996

FERNANDO SAZON y RAMOS, petitioner, vs. HON. COURT OF APPEALS and PEOPLE OF THE PHILIPPINES, respondents.

HERMOSISIMA, JR., J.:p Before us is a petition for review on certiorari to set aside the decision of the Court of Appeals (Special Third Division) in CA-G.R. C.R. No. 13777 which affirmed the decision of the Regional Trial Court, Branch 161 of Pasig City, in Criminal Case No. 58939, convicting the petitioner of the crime of libel. The relevant antecedents are not disputed. Petitioner Fernando Sazon and private complainant Abdon Reyes were both residents of the PML Homes in East Drive, Parang Marikina, Metro Manila. They were likewise members of the PML-Parang Bagong Lipunan Community Association, Inc. (PML-BLCA), an association of homeowners of PML Homes. The association had a monthly newsletter, the PML-Homemaker, of which the petitioner was the editor. On December 11, 1983, the PML-BLCA held an election for the members of its board of directors. Among those who ran in the election were the private complainant and the petitioner. The petitioner was elected as a director. He was likewise elected by the new board as president of the homeowners' association. The private complainant lost in said election. Unable to accept defeat, the private complainant, on January 16, 1984, wrote a letter to the Estate Management Office of the Home Financing Corporation (EMO-HFC) protesting the election of the petitioner as a director and president of the homeowners' association. He alleged that the election was a nullity because of: (1) the lack of authority of the petitioner to call for such an election; (2) the absence of a quorum; and (3) lack of the required notice to the homeowners. On January 18, 1984, the private complainant wrote his co-homeowners explaining to them his election protest and urging them not to recognize the petitioner and the other members who won in the election. Meanwhile, in response to the election protest, the EMO-HFC ordered-the PML-BLCA to conduct a referendum to be supervised by the EMO-HFC. The private complainant then notified his co-homeowners about this development and requested them to attend a general meeting with the representatives of the EMO-HFC which was to be held before the referendum. Soon after the general meeting, several copies of a leaflet called the "PML Scoop" were received by the homeowners. The leaflet was entitled "Supalpal si Sazon,"' obviously referring to the affirmative action taken by the EMO-HFC in connection with the private respondent's election protest. At about the same time, the phrase "Sazon, nasaan ang pondo ng simbahan?" was seen boldly written on the walls near the entrance gate of the subdivision. There was no proof, however, as to who was responsible for these writings.

Thinking that only private complainant was capable of these acts, petitioner Sazon started writing, publishing, and circulating newsletters to his co-homeowners, culminating in the appearance in the February 10, 1984 issue of the PML-Homemakers of the following article: "USAPAN NG BOARD v. ABDON NAG COLLAPSE SA ESTATE MANAGEMENT OFFICE. Dala ng mahigpit na pakiusap ng Estate Management Office (EMO) na gawin ang lahat na nararapat upang magkaroon ng katahimikan at pagkakaisa ang mga tiga PML Homes, ang Board Secretary, Mr. Pacis at President F:R. Sazon ay nagpaunlak na pagbigyan ang kahilingan ng ating kasama na si Abdon Reyes. Ang kahilingan: Anyayahan ang EMO-HFC na magconduct ng Plebiscite or Referendum para sa possibility ng isa pang halalan ng Board of Directors. Sa meeting na dinaluhan ni Abdon Reyes na nagdala ng isang camera man at may kasamang pagyayabang at kaunting pang-golpe de gulat (na tila baga puro tanga yata ang akala niya sa mga kausap), ipinipilit pa rin nitong ang Board sa PML Parang ay binubuo pa rin nuong mga taong inilukluk ng developer na nag 1-2-3. Halos pag-pupukpukin ng bag ng mga kababaihang nagsisama sa miting ang ating pobreng super kulit na walang pakialam sa mga taga atin. Ang mga nagsipagbigay suporta sa Pangulo at Board Secretary ay sina Gng. Cavarosa, Gng. Triffie Ladisla, Gng. Nitz Rodriguez at Dra. Sazon. Kung di dahil sa pakiusap nina Messr'rs. ABNER PACAIGUE at HOMER AGNOTE, kasama na ng Board Secretary at Pangulo, malamang ay nagulpi sana ang mandurugas. Dahil sa patuloy na kabulastugan ni Abdon, ang meeting na ginaganap sa EMO kaninang umaga ay nag collapse nang malaman na may ikinalat na liham ang mandurugas, na nagsasabing di umano ay hindi tutoo ang ibinabalita ng "Homemaker" na siya ay turned-down sa HFC. Matagal na po tayong niloloko ng magkasamang Abdon at Evangeline Lopez. Dahil sa tagal ay alam na tuloy natin kung papaanong maipapatigil ang kanilang kabulastugan. Sila rin ang mastermind sa paninirang puri sa Pangulo sa pamamagitan ng pag-susulat ng panira sa mga pader natin. Diumano'y itinatanong daw nila kung saan dinala ang pondo, ng simbahan. Bakit hindi sila tumungo sa kinauukulan: Treasurer, Auditor, at iba pang officials. UPHELD PO ANG ATING BOARD, ITO AY MABUBUWAG LANG KUNG INYONG NANAISIN. Mag-iingat po tayo sa panlilinlang ng mga taong gaya ni Abdon at Vangie. UNITED WE STAND DIVIDED WE FALL LET'S UNITE AND FIGHT EVIL!!! E.R. SAZON Editor 1

Aggrieved by the aforequoted article, the private complainant initiated the necessary complaint against the petitioner, and on May 25, 1984, an Information was filed before the trial court charging the petitioner with libel. On March 18, 1992, the trial court rendered its decision finding the petitioner guilty of the crime charged, and accordingly sentenced him, thus: WHEREFORE, foregoing considered, the accused is found guilty beyond reasonable doubt of the crime charged and is hereby sentenced to suffer imprisonment of FOUR (4) months and ONE (1) day of arresto mayor as minimum to TWO (2) years, FOUR (4) months and ONE (1) day of prision correccional as maximum, with the accessory penalties provided by law, and to pay a fine of P200.00 in accordance with Art. 353, in relation to Art. 355 of the Revised Penal Code. With costs against the accused. SO ORDERED. 2 The petitioner appealed said decision to the Court of Appeals. On June 19, 1995, the appellate court dismissed the appeal and affirmed the decision of the trial court. Hence, petitioner brought the present action, and in seeking a reversal of the challenged decision, he claims that the Court of Appeals, erred: 1. . . . IN NOT HOLDING THAT THE QUESTIONED ARTICLE (EXHIBIT "A") IS IN THE NATURE OF A PRIVILEGED COMMUNICATION AND HENCE, PROTECTED AND NOT ACTIONABLE. 2. . . . IN NOT HOLDING THAT THE WORDS IN CONTROVERSY ARE NOT DEFAMATORY. OF PRIVATE COMPLAINANT AS THEY ARE NON-ACTIONABLE EPITHETS WRITTEN WITHOUT MALICE. 3. . . . IN NOT HOLDING THAT THE QUESTIONED ARTICLE DID NOT CAUSE DAMAGE TO PRIVATE COMPLAINANT'S REPUTATION. 4. GRANTING ARGUENDO THAT ACCUSED-PETITIONER'S CONVICTION IS WARRANTED, . . . IN NOT LIMITING THE PENALTY IMPOSED UPON HIM TO FINE ALONE WITHOUT IMPRISONMENT . . .3 In fine, the principal issue posited in this petition is whether or not the questioned article written by the petitioner is libelous. We rule in the affirmative. Article 353 of the Revised Penal Code defines libel in this wise: Art. 353. Definition of libel. A libel is a public and malicious imputation of a crime, or of a vice or defect, real or imaginary, or any act, omission, condition, status, or circumstance tending to cause the dishonor, discredit, or contempt of a natural or juridical person, or to blacken the memory of one who is dead. For an imputation then to be libelous, the following requisites must concur: (a) it must be defamatory; (b) it must be malicious;

(c) it must be given publicity; and (d) the victim must be identifiable. 4 Petitioner concedes the existence of the third and fourth requisites in the case at bench. Accordingly, only the first and second elements need to be discussed herein. Petitioner insists that the allegedly offensive words found in the subject article are not actually defamatory. According to, petitioner, the word "mandurugas" and other words and phrases used in the questioned article do not impute to private complainant any crime, vice or defect which would be injurious or damaging to his name and reputation. As far as petitioner is concerned, the descriptive words and phrases used should be considered as mere epithets which are a form of non-actionable opinion, because while they may express petitioner's strong emotional feelings of dislike, they do not mean to reflect adversely on private complainant's reputation. We do not agree. In libel cases, the question is not what the writer of an alleged libel means, but what the words used by him mean. 5 Here, the defamatory character of the words used by the petitioner are shown by the very recitals thereof in the questioned article. No evidence aliunde need be adduced to prove it. Petitioner used the following words and phrases in describing the private complainant: "mandurugas," "mag-ingat sa panlilinlang," "matagal na tayong niloloko," "may kasamang pagyayabang," "ang ating pobreng super kulit," "patuloy na kabulastugan," "mastermind sa paninirang puri," etc. 6 Jurisprudence has laid down a test to determine the defamatory character of words used in the following manner, viz: Words calculated to induce suspicion are sometimes more effective to destroy reputation than false charges directly made. Ironical and metaphorical language is a favored vehicle for slander. A charge is sufficient if the words are calculated to induce the hearers to suppose and understand that the person or persons against whom they were uttered were guilty of certain offenses, or are sufficient to impeach their honesty, virtue, or reputation, or to hold the person or persons up to public ridicule. . . . 7 This test was satisfied in the case at bench. Branding private complainant Reyes "mandurugas," et al, most certainly exposed him to public contempt and ridicule. No amount of sophistical explanation on the part of petitioner can hide, much less erase, the negative impression already created in the minds of the readers of the libelous material towards private complainant. Respondent Court of Appeals is, thus, correct in holding that "these words and phrases ("mandurugas," et al.) are indisputably defamatory for they impute upon the private complainant a condition that is dishonorable and shameful, since they tend to describe him as aswindler and/or a deceiver." (Emphasis Ours). 8 Petitioner also maintains that there was no malice in this case. He argues that the prosecution failed to present evidence demonstrating that the accused was prompted by personal ill-will or spite or that he did not act in response to duty but acted merely to cause harm to private complainant. Consequently, the prosecution failed to discharge its burden of proving malice on the part of the accused beyond all reasonable doubt. We are not persuaded. The general rule laid down in Article 354 of the Revised Penal Code provides that:

Art. 354 Requirement of publicity. Every defamatory imputation is presumed to be malicious, even if it be true, if no good intention and justifiable motive for making it is shown. . . . Prescinding from this provision, when the imputation is defamatory, as in this case, the prosecution need not prove malice on the part of the defendant (malice in fact), for the law already presumes that the defendant's imputation is malicious (malice in law). The burden is on the side of the defendant to show good intention and justifiable motive in order to overcome the legal inference of malice. Unfortunately, petitioner miserably failed to discharge this burden in the case before us. Petitioner however submits that malice should not be presumed in the instant case, but must be proved as a fact (malice in fact), since the questioned article is a privileged communication covered under the two exceptions as enumerated under Article 354, viz: 1. A private communication made by any person to another in the performance of any legal, moral or social duty; and 2. A fair and true report, made in good faith, without any comments or remarks, of any judicial, legislative or other official proceedings which are not of confidential nature, or of any statement, report or speech delivered in said proceedings, or of any other act performed by public officers in the exercise of their functions. Petitioner avers that he wrote the article not to malign the private complainant, but merely to correct the misinformation being circulated by Reyes and some quarters within the community about the petitioner and the association he heads. He did it therefore, in response to some moral, social or civic duty as he was at that time the President of their homeowners' association and editor of its newsletter. Hence, the article falls under the first exception of Article 354. The argument has no basis, In Daez v. Court of Appeal 9 we held that: As a rule, it is the right and duty of a citizen to make a complaint of any misconduct on the part of public officials, which comes to his notice, to those charged with supervision over them. Such a communication is qualifiedly privileged and the author is not guilty of libel. The rule on privilege,however, imposes an additional requirement. Such complaints should be addressed solely to some official having jurisdiction to inquire into the charges, or power to redress the grievance or has some duty to perform or interest in connection therewith. In the instant case, none of the homeowners for whom the newsletter was published was vested with the power of supervision over the private complainant or the authority to investigate the charges made against the latter. Moreover, a written letter containing libelous matter cannot be classified a privileged when it is published and circulated among the public, 10 as what the petitioner did in this case. In his final attempt to come under the protective mantle of privileged communication, petitioner alleges that the subject article likewise constitutes a fair and true report on the actuations of a public official falling under the second exception of Article 354, since private complainant was a public relations consultant in the Department of Trade and Industry at the time the allegedly libelous article was published on February 10, 1984. 11 On this point, the rule is that defamatory remarks and comments on the conduct or acts of public officers which arerelated to the discharge of their official duties will not constitute libel if

the defendant proves the truth of the imputation. But any attack upon the private character of the public officer on matters which are not related to the discharge of their official functions may constitute libel. 12 This is clear by express provision of Article 354, exception number two (2) which refers to "any other act performed by public officers in the exercise of their functions. A perusal of the petitioner's article reveals that it has no reference whatsoever to the performance of private complainant's position as a public relations consultant in the Department of Trade and Industry. The article attacked solely the private character of the complainant and delved on matters completely unrelated to his official functions. It cannot therefore fall under the protective coverage of privileged communication. However, even assuming, ex gratia argumenti, that petitioner's article qualifies under the category of privileged communication, this does not still negative the presence of malice in the instant case. It is well to note that the existence of malice in fact may be shown by extrinsic evidence that the defendant bore a grudge against the offended party, or that there was rivalry or ill-feeling between them which existed at the date of the publication of the defamatory imputation or that the defendant had an intention to injure the reputation of the offended party as shown by the words used and the circumstances attending the publication of the defamatory imputation. 13 The circumstances under which the subject article was published by the petitioner serve to buttress the inference that petitioner was animated solely by revenge towards the private complainant on account of the leaflet entitled "Supalpal si Sazon," earlier circulated among the homeowners as well as the writings near the entrance gate of the subdivision, all of which petitioner believes to be the handiwork of the private complainant. Furthermore, the words used in the questioned article were mostly uncalled for, strongly sending the message that petitioner's objective was merely to malign and injure the reputation of the private complainant. This is certainly indicative of malice in fact on the part of the petitioner. WHEREFORE, the decision of the Court of Appeals is hereby AFFIRMED with the modification that, in lieu of imprisonment and fine, the penalty to imposed upon the petitioner shall be a fine of Three Thousand (P3,000.00) PESOS with subsidiary imprisonment in case of insolvency. SO ORDERED.

G.R. No. L-51201 May 29, 1980 IN THE MATTER OF THE PETITION FOR CHANGE OF NAME OF MARIA ESTRELLA VERONICA PRIMITIVA DUTERTE, ESTRELLA S. ALFON, petitioner, vs. REPUBLIC OF THE PHILIPPINES, respondent. ABAD SANTOS,

This is a petition filed pursuant to Republic Act No. 5440 to review an Order of the Court of First Instance of Rizal, Branch XXIII, dated December 29, 1978, which partially denied petitioner's prayer for a change of name. Only a question of law is involved and there is no controversy over the facts which are well-stated in the questioned Order as follows: t.hqw This is verified petition filed on April 28, 1978 by petitioner Maria Estrella Veronica Primitiva Duterte through her counsel, Atty. Rosauro Alvarez, praying that her name be changed from Maria Estrella Veronica Primitiva Duterte to Estrella S. Alfon. The notice setting the petition for hearing on December 14, 1978 at 8:30 o'clock in the morning was published in the Times Journal in its issues of July 28, August 5 and 11, 1978 and a copy thereof together with a copy of the petition was furnished the Office of the Solicitor General (Exhibits C, C1, C-2 and C-3). At the hearing of the petition on December 14, 1978, Atty. Rosauro Alvarez appeared for the petitioner and Fiscal Donato Sor. Suyat, Jr. represented the office of the Solicitor General, Upon motion of counsel for the petitioner, without objection on the part of Fiscal Suyat, the Deputy Clerk of Court was appointed commissioner to receive the evidence and to submit the same for resolution of the Court. From the testimonial and document evidence presented, it appears that petitioner Maria Estrella Veronica Primitiva Duterte was born on May 15, 1952 at the U.S.T. Hospital (Exhibit A). She was registered at the local Civil Registrar's Office as Maria Estrella Veronica Primitiva Duterte On June 15, 1952, she was baptized as Maria Estrella Veronica Primitiva Duterte at the St. Anthony de Padua Church Singalong, Manila (Exhibit B). Her parents are Filomeno Duterte and Estrella Veronica Primitiva Duterte has been taken cared of by Mr. and Mrs. Hector Alfon. Petitioner and her uncle, Hector Alfon, have been residing at 728 J.R. Yulo Street corner Ideal Street, Mandaluyong, Metro Manila for twenty-three (23) years. When petitioner started schooling, she used the name Estrella S. Alfon. She attended her first grade up to fourth year high school at Stella Maris College using the name Estrella S. Alfon (Exhibits E, E-1, E-2 and E-3). After graduating from high school she enrolled at the Arellano University and finished Bachelor of Science in Nursing (Exhibit E-4). Her scholastic records from elementary to college show that she was registered by the name of Estrella S. Alfon. Petitioner has exercised her right of suffrage under the same name (Exhibit D). She has not committed any felony or misdemeanor (Exhibits G, G-1, G2, G-3 and G-4). Petitioner has advanced the following reasons for filing the petition: She has been using the name Estrella Alfon since her childhood; She has been enrolled in the grade school and in college using the same name; She has continuously used the name Estrella S. Alfon since her infancy and all her friends and acquaintances know her by this name; She has exercised her right of suffrage under the same name. Section 5, Rule 103 of the Rules of Court provides:

Upon satisfactory proof in open court on the date fixed in the order that such order has been published as directed and that the allegations of the petition are true, the court shall if proper and reasonable cause appears for changing the name of the petitioner adjudge that such name be changed in accordance with the prayer of the petition. The evidence submitted shows that the change of name from Maria Estrella Veronica Primitiva Duterte to Estrella Alfon is not proper and reasonable with respect to the surname. The fact that petitioner has been using a different surname and has become known with such surname does not constitute proper and reasonable cause to legally authorize and change her surname to Alfon. The birth certificate clearly shows that the father of petitioner is Filomeno Duterte. Petitioner likewise admitted this fact in her testimony. To allow petitioner to change her surname from Duterte to Alfon is equivalent to allowing her to use her mother's surname. Article 364 of the Civil Code provides: Legitimate and legitimated children shall principally use the surname of the father. If another purpose of the petitioner is to carry the surname of Alfon because her uncle who reared her since childhood has the surname "Alfon" then the remedy is not a petition for change of name.

WHEREFORE, the petition insofar as the first name is granted but denied with respect to the surname. Petitioner is authorized to change her name from Maria Estrella Veronica Primitiva Duterte to Estrella Alfon Duterte. Let copy of this order be furnished the Local Civil Registrar of Pasig, Metro Manila pursuant to Section 3, Rule 103 of the Rules of Court. The lower court should have fully granted the petition. The only reason why the lower court denied the petitioner's prayer to change her surname is that as legitimate child of Filomeno Duterte and Estrella Alfon she should principally use the surname of her father invoking Art. 364 of the Civil Code. But the word "principally" as used in the codal provision is not equivalent to "exclusively" so that there is no legal obstacle if a legitimate or legitimated child should choose to use the surname of its mother to which it is equally entitled. Moreover, this Court in Haw Liong vs. Republic, G.R. No. L-21194. April 29, 1966, 16 SCRA 677, 679, said: t.hqw The following may be considered, among others, as proper or reasonable causes that may warrant the grant of a petitioner for change of name; (1) when the name is ridiculous, tainted with dishonor, or is extremely difficult to write or pronounce; (2) when the request for change is a consequence of a change of' status, such as when a natural child is acknowledged or legitimated; and (3) when the change is necessary to avoid confusion Tolentino, Civil Code of the Philippines, 1953 ed., Vol. 1, p. 660). In the case at bar, it has been shown that petitioner has, since childhood, borne the name Estrella S. Alfon although her birth records and baptismal certificate show otherwise; she was enrolled in the schools from the grades up to college under the name Estrella S. Alfon; all her friends call her by this name; she finished her course in Nursing in college and was graduated and given a diploma under this name; and she exercised the right of suffrage likewise under this

name. There is therefore ample justification to grant fully her petition which is not whimsical but on the contrary is based on a solid and reasonable ground, i.e. to avoid confusion. WHEREFORE, the Order appealed from is hereby modified in that, the petitioner is allowed to change not only her first name but also her surname so as to be known as ESTRELLA S. ALFON. No costs. SO ORDERED.

Republic of the Philippines SUPREME COURT Manila EN BANC

G.R. No. 95398 August 16, 1991 MARIO R. MELCHOR, petitioner, vs. COMMISSION ON AUDIT, respondent. Polistico Law Office for petitioner

GUTIERREZ, JR., J.:p Is the petitioner personally liable for the amout paid for the construction of a public school building on the ground that the infrastructure contract is null and void for want of one signature? The facts are uncontroverted. On July 15, 1983, petitioner Mario R. Melchor, in his capacity as Vocational School Administrator of Alangalang Agro-Industrial School of Alangalang, Leyte, entered into a contract with Cebu Diamond Construction (hereinafter referred to as contractors for the construction of Phase I of the home Technology Building of said school for the price of P488,000. Pablo Narido, (thief accountant of the school, issued a certificate of availability of funds to cover the construction cost. Narido, however, failed to sign as a Witness to the contract, contrarily to the requirement of Section I of Letter of Instruction (LOI) No. 968. The contract was approved by the then Minister of Education, Culture and Sports Onofre D. Corpuz. The relevant parts of the contract are quoted below: That for and in consideration of the sum of FOUR HUNDRED EIGHTY EIGHT THOUSAND PESOS (P488,000.00), Philippine Currency, the CONTRACTOR, at his own proper cost and expense willfully and faithfully perform all works, and unless otherwise provided, furnish all labor, materials, equipment necessary for the construction and completion of Phase I of the Home Technology Building for the Alangalang Agro-Industrial School of Alangalang, Leyte to be

completed in accordance with the plans and specifications and all terms, conditions and instructions contained in the general and special conditions of contract, as well as those contained in the Notice to Bidders, Tenderers or Advertisement, Instruction to Bidders Tenderers, Supplemental Specifications, Bond Articles, and other essential related documents, which are made and acknowledged as Integral parts of this Agreement, by reference and/or Incorporation, including the permission of Administrative Order No. 81 of the President, dated January 17, 1964, ... (Rollo, p. 25) While the construction of Phase I was under way, the contractor, in a letter dated November 8, 1983 addressed to Melchor, sought an additional charge of P73,000 equivalent to 15% of the stipulated amount due to an increase in the cost of labor and construction materials. In a letter dated November 17, 1983, the petitioner referred the contractor's request for additional charge to the Regional Director, Ministry of Education, Culture and Sports (MECS). The petitioner in said letter asked for approval of the contractor's additional charge, pointing out that such additional charge shall be taken from the 1984 non-infrastructure capital outlay and part of the 1984 maintenance and operating expenses. The petitioner, in a second Indorsement dated November 22, 1983, requested the approval by the COA Regional Director in Tacloban City of the contractor's request for adjustment of the cost of the contract. In an Indorsement dated November 17, 1983, Servillano C. Dela Cruz, Acting Assistant Regional Director ' MECS Regional Office No. VIII, Tacloban City, approved the contractor's request for additional charge subject, however, to the availability of funds and the imprimatur of the Resident Auditor of the School. On its part, the COA Regional Office No. VIII, Tacloban City, through Regional Director, Sopronio Flores, Jr., advanced the view that "the approval of the police escalation rests on the Minister or head of the agency concerned. Our participation in this regard shall be on the post-audit of transactions as emphasized under COA Circular No. 82195." Meanwhile, the contractor, anticipating that it could not meet the deadline for the project, requested a series of extensions which the petitioner granted. However, on April 10, 1984, the contractor gave up the project mainly to save itself from further losses due to, among other things, increased cost of construction materials and labor. At the time the contractor ceased working on the project, it had accomplished only 61% of the construction work valued at P344,430.88. However, as of September 13, 1984, the contractor had been paid the total amount of P515,305.60. The excess paid on the value of the 61% accomplishment costing approximately P172,003.26 represented the extra work done by the contractor which was found necessary. Consequently, the petitioner wrote a letter dated September 19, 1984 to Ms. Gilda Ramos, COA Resident Auditor of the school, requesting the latter to advise the former on whether to pursue condoning the contract or institute a legal action for breach of contract against the contractor. In turn, Ms. Ramos referred the matter to COA Regional Director in Tacloban City, Cesar A. Damole who in a third Indorsement dated April 8, 1985, directed Ms. Ramos to disallow the payment of P515,305.60 in post-audit on the ground that the contract was null and void for lack of signature of the chief accountant of the school as witness to it, as required under Section 1 of LOI 968, for which reason the petitioner was made personally liable for the amount paid to the contractor.

On May 3, 1985, the petitioner wrote a letter addressed to the Regional Director, COA Regional Office No. VIII, Tacloban City, seeking reconsideration of his directive to the Resident Auditor of the school to disallow the payment of P515,305.60 to the contractor. The petitioner sought reconsideration on the following grounds: a) the Certificate of Availability of Funds signed by the chief accountant of the school, being an integral part, of the contract, substantially complied with the requirement of LOI 968 that the signature of said accountant must be affixed as witness to the contract, b) the petitioner did not exceed his authority because the contract was approved by the head of the agency concerned c) the Resident Auditor of the school who had been furnished a copy of the contract did not object to the contract because of that flaw; and d) the petitioner religiously complied with the provisions of P.D. 1445 (otherwise known as "The Government Auditing Code of the Phils."), specifically, Sections 85 and 86 as to the requirements in the execution of a government contract. In a first Indorsement dated July 17, 1985, COA Regional Director of Tacloban City, Cesar A. Damole denied the petitioner's motion for reconsideration. Immediately, petitioner Melchor appealed to the COA Head Office which dismissed his appeal for lack of merit. The COA Head Office likewise denied the petitioner's requests for reconsideration. Hence, this petition. The sole issue of this Court's consideration is whether or not petitioner Melchor should be held personally liable for the amount of P515,305.60 paid to the contractor. This P515,305.60 may be broken down into: 1) P344,430.80 representing 6l% of equivalent payment for the work done by the contractor within the contract specifications, and 2) P172,003.206 representing payment for extra work orders, not included in the contract specifications, which were incurred to make the building structure strong. The amounts of P344,430.80 and P172,003.26, when added together, do not equal P515,305.60. The records do not explain the reason for the discrepancy. At any rate, the contending parties do not question the correctness of these amounts. Respondent COA maintains that the contract entered into by the petitioner with Cebu Diamond Construction is null and void since the chief accountant did not affix his signature to the contract, in violate on of the requirements of LOI 968. Section 1 of LOI 968, dated December 17, 1979, provides: 1. All contracts for capital projects and for the supply of commodities and services, including equipment, maintenance contracts., and other agreements requiring payments which are chargeable to agency current operating or capital expenditure funds, shall be signed by agency heads or other duly authorized official only when there are available funds. The Chief Accountant of the contracting agency shall sign such contracts as witness and contracts without such witness hall be considered as null and void. According to COA, since there was no compliance with the above provision, then the amount of P344,430.80 should be disallowed iii post-audit and the petitioner should be personally able for said amount.

The petitioner reasons that the absence of the accountant's signature as witness to the contract should not militate against its validity. He cites Section 86 of PD 1445, which states: Certificate Showing Appropriation to Meet Contract ... no contract involving the expenditure of public fund by any government agency shall be entered into or authorized unless the proper accounting official of the agency concerned shall have certified to the officer entering into the obligation that funds have been duly appropriated for the purpose and that the amount necessary to cover the proposed contract for the current fiscal year is available for expenditure on account thereof, subject to verification, modification by the auditor concerned. The certificate, signed by the proper accounting official and the, auditor who verified it, shall be attached to and become an integral part of the proposed contract, and the sum so certified shall not thereafter be available for expenditure for any other purpose until the obligation of the government agency concerned under the contract is fully extinguished. Petitioner Melchor urges that the issuance by the chief accountant of a "Certificate of Availability of Funds" compensates for the latter's non-signing as a contract witness since under Section 86 of PD 1445, the certificate is attached to and becomes an integral part of the contract. He argues that there was, in effect, substantial compliance with the mandate of LOI 968. Moreover the petitioner contends that assuming arguendo that the contract is null and void, he should still not be made personally accountable for the amount paid to the contractor. He cites this Court's resolution in Royal Trust Corporation v. Commission on Audit, G.R. No. 84202, November 22, 1988. In that case. despite the absence of a specific covering appropriation as required under COA Resolution No. 86-58, the contractor was allowed by the Court to be compensated on a quantum meruit basis. Under the circumstances of this case, the Court finds that the contract executed by the petitioner and Cebu Diamond Construction is enforceable and, therefore, the petitioner should not be made to personally pay for the building already constructed. LOI 968 and Sections 85 and 86 of PD 1445 implement and reinforce the constitutional mandate that "No money shall be paid out of the Treasury except in pursuance of an appropriation made by law" (Constitution, Article VI, Section 29 [1]). Under Sections 85 and 86 of PD 1445, before a government agency can enter into a contract involving expenditure of government funds there must be an appropriation for such expenditure and the proper accounting official must certify that funds have been appropriated for the purpose. Under LOI 968, the chief accountant of the government agency, as the verifier of the availability of funds, must sign such contracts as witness. The uniform intent of these provisions is to ensure that government contracts are signed only when supported by available funds. In the case before us, the chief accountant issued a certificate of availability of funds but failed to sign the contract as witness. But since Section 86 states that the certificate shall be attached to and become an integral part of the proposed contract, then the failure of the chief accountant to affix his signature to the contract was somehow made up by his own certification which is the basic and more important validating document. The contract moreover provided that "other essential related documents xxx are made and acknowledged as integral parts of

this agreement, by reference and/or incorporation." This is not to say that the heads of government offices or institutions should not read carefully the fine print of official regulations governing contracts. However, under the peculiar circumstances of this case, we agree with the petitioner's view that there was substantial compliance with the requirements of LOI 968 in the execution of the contract. He has not been charged under some regulations governing negligence in not going over auditing and accounting rules more carefully. But even assuming some kind of administrative responsibility for not being more careful, he should not be made to pay for a school building already constructed and serving an urgent need in his province. It is a rule of statutory construction that the court may consider the spirit and reason of a statute where a literal meaning would lead to absurdity, contradiction, injustice or would defeat the clear purpose of the lawmakers. (People v. Manantan 5 SCRA 684 [1962]) For this Court to draw a narrow and stringent application of LOI 968 would be to lose sight of the purpose behind its enactment. The rationale for LOI 968, which is to ensure that there are available funds to finance a proposed project, was already served by the chief accountant's issuance of a certificate of fund availability. Additionally, Section 2 of LOI 968 provides: 2. It shall be the responsibility of the Chief Accountant to verify the availability of funds, as duly evidenced by programmed appropriations released by the Ministry of Budget and received by the agency, from which such contract shall be ultimately payable. His signature shall be considered as constituting a certification to that effect. (Emphasis Supplied) Since, under the above proviso, the accountant's signature shall have the effect of a certification, then it may be inferred that the accountant's certification, not his signature as a contract witness, is the more reliable indicium of fund availability. What further bolsters the contract's validity is the fact that the original contract for P488,000 and the 15% price escalation of P73,000 bore the approval of the Minister of Education, Culture and Sports as required by COA Circular No. 83-101-J (dated June 8, 1983) and the Implementing Rules of PD 1594. Under COA Circular 83-101-J, the Minister of Education, Culture and Sports has the authority to approve infrastructure projects not exceeding P2 Million. Under Section III, CIII of the Implementing Rules of PD 1594, the Minister is empowered to approve contract price escalation not exceeding 18% of the original contract price. Moreover, under COA Circular No. 76-34 dated July 15,1976, within 5 days from receipt of a copy of the contract, the COA is required to call the attention of management regarding defects or deficiencies of the contract and suggest such corrective measures as are appropriate and warranted to facilitate the process of the claim upon presentation. In this case, respondent COA does not deny the petitioner's claim that it was furnished copies of the contract, together with supporting documents, a few days after approval thereof by the Minister of Education, Culture and Sports. If the respondent had complied with this requirement, then the absence of the accountant's signature as a witness to the contract could have been remedied. COA was also negligent. No less compelling than the foregoing reasons is the undisputed fact that the construction of the Home Technology Building had long been completed and that the building is now being utilized as part of the Alangalang Industrial School. In People v. Purisima 86 SCRA 542 (1978),

we held that there exists a valid presumption that undesirable consequences were never intended by a legislative measure, and that a construction of which the statute is fairly susceptible is favored, which will avoid all objectionable, mischievous, indefensible, wrongful, evil and injurious consequences. In the present case we consider it highly inequitable to compel the petitioner, who had substantially complied With the mandate of LOI 968, to shoulder the construction cost of the building when it is not he, but the government, which is reaping benefits from it. The Court therefore rules that respondent COA erred in disallowing in audit the amount of P344,430.88. With respect to the remaining P12,003.26 paid by the petitioner to the contractor for extra work done, the COA reasons that the extra work done. being more than 25% of the escalated original contract price, was null and void because no supplemental agreement was executed. The respondent cites the implementing rules and regulations of PD 1594 which provide: 5. A separate supplemental agreement may be entered into for all change orders or extra work orders if the aggregate amount exceeds 25% of the escalated original contract price. (III CI paragraphs 5;) (Emphasis supplied). Under the facts of this case, we adjudge that respondent COA is not without legal basis in disallowing the P172,003.26 payment for the extra work orders. However, since the word "may" was used in the Decree then the requirement of a supplemental agreement under all circumstances may not always be mandatory. There is no need to go into any possible exceptions because we find the rule applicable in this case. Under COA Circular 83-101-J, supra, the Minister of Education, Culture and Sports has the authority to approve extra work orders or other variation orders not exceeding 50% of the original contract price or P1 Million whichever is less. In this case, there is no showing that the extra work order was approved by the Minister. Moreover, a variation order (which may take the form of a change order, extra work or supplemental agreement) is a contract by itself and involves the expenditure of public funds to cover the cost of the work called for thereunder. (Fernandez, A Treatise on Government Contracts under Philippine Law, 115-116 [1985]) As such, it is subject to the restrictions imposed by Sections 85 and 86 of PD 1445 and LOI 968-COA Circular No. 80-122, dated January 15, 1980, likewise ensures that an extra work order is approved only when supported by available funds. Again, the petitioner has not presented proof of an appropriation to cover the extra work order. For a failure to show the approval by the proper authority and to submit the corresponding appropriation, We declare the contract for extra works null and void. Section 87 of PD 1445 states: Any contract entered into contrary to the requirements of the two immediately preceding sections shall be void, and the officer or offices entering into the contract shall be liable to the government or other contracting party for any consequent damage to the same extent as if the transaction had been wholly between private parties. (Emphasis supplied)

This does not mean, however, that the petitioner should be held personally liable and automatically ordered to return to the government the full amount of P172,003.26. As previously discussed, it would be unjust to Order the petitioner to shoulder the expenditure when the government had already received and accepted benefits from the utilization of the building. In Royal Trust Construction v. Commission on Audit, supra, cited by the petitioner, the Court, in the interest of substantial justice and equity, allowed payment to the contractor on a quantum meruit basis despite the absence of a written contract and a covering appropriation. In a more recent case, Dr. Rufino O. Eslao v. Commission on Audit, G.R. No. 89745, April 8, 1991, the Court directed payment to the contractor on a quantum meruit basis despite the petitioner's failure to undertake a public bidding. In that case, the Court held that "to deny payment to the contractor of the two buildings which are almost fully completed and presently occupied by the university would be to allow the government to unjustly enrich itself at the expense of another. Where payment is based on quantum meruit the amount of recovery would only be the reasonable value of the thing or services rendered regardless of any agreement as to value. (Tantuico, State Audit Code of the Philippines Annotated, 471 [1982]) Although the two cases mentioned above contemplated a situation where it is the contractor who is seeking recovery, we find that the principle of payment by quantum meruit likewise applies to this case where the contractor had already been paid and the government is seeking reimbursement from the public official who heads the school. If, after COA determines the value of the extra works computed on the basis of quantum meruit it finds that the petitioner made an excess or improper payment for these extra works, then petitioner Melchor shall be liable only for such excess payment. WHEREFORE, the petition is GRANTED. The decision of the respondent COA denominated as 11th Indorsement dated November 11, 1988 and its resolution dated July 31, 1990 are hereby REVERSED and SET ASIDE. Respondent COA is directed to allow in post-audit the payment of P344,430.80. Respondent COA is likewise directed to determine on a quantum meruit basis the value of the extra works done, and after such determination, to disallow in post-audit the excess payment, if any, made by the petitioner to the contractor. The petitioner shall be personally liable for any such excess payment. SO ORDERED.