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Statutory Construction Syllabus 1

I. Construction Defned........................................2
CALTEX vs. PALOMAR (G.R. No. L-!"#$% &e'te()er 2!%
II. N+ture +nd O),ect o- Construction................$
(G.R. No. L-1"% 2une 2!% !#!*................$
PEOPLE vs. GATC3ALIAN ($4 P5i6 "1"% !#7*"
GENERAL vs. 8ARRAMEDA (G.R. No. L-2!!$"% 2+nu+r9 :$%
AM0&EMENT& 8OARD (G.R. No. L-2121% .e)ru+r9 2!%
III. Po=er to Construe% =5ere 6od>ed?...............2#
I/. Li(it+tions to Po=er to Construe..................2#
ENDENCIA vs. DA/ID (G.R. No. L-":##-#"% Au>ust :%
@0IMPO vs. MENDOAA (G.R. No. L-::$#2% Au>ust :%
DELO& &ANTO& vs. MALLARE (G.R. No. L-:77% Au>ust
:% !#$*......................................................:"
PEOPLE vs. GARCIA (.e)ru+r9 27% !#$% G.R. No. L-271:*
PEOPLE vs. .ERRER (G.R. Nos. L-:2":-4% Dece()er
21% !12*......................................................4:
/. A()i>uit9% need o-........................................##
1$1:#% Dece()er 1% 2$$1*.......................##
O. NAGA (Au>ust 22% !"7% G.R. No. 24"-1* "#
A()i>uous vs. /+>ue..................................."!
Statutory Construction Syllabus 1
PEOPLE vs. NAAARIO (G.R. No. L-444:%Au>ust :% !77*
&PO0&E& ROM0ALDEA vs. COMELEC (G.R. No. "1$%
Dece()er % 2$$7*.....................................1"
Statutory Construction Syllabus 1
I. Construction Defned
CALTEX vs. PALOMAR (G.R. No. L-19650, September
29, 1966)


In the year 1960 the Caltex (Philippines) Inc. (hereinafter referred to as Caltex) conceived
and laid the groundor! for a pro"otional sche"e calculated to dru" up patronage for its
oil products. #eno"inated $Caltex %ooded Pu"p Contest$& it calls for participants therein to
esti"ate the actual nu"'er of liters a hooded gas pu"p at each Caltex station ill
dispense during a specified period. ("ployees of the Caltex (Philippines) Inc.& its dealers
and its advertising agency& and their i""ediate fa"ilies excepted& participation is to 'e
open indiscri"inately to all $"otor vehicle oners and)or licensed drivers$. *or the privilege
to participate& no fee or consideration is re+uired to 'e paid& no purchase of Caltex
products re+uired to 'e "ade. (ntry for"s are to 'e "ade availa'le upon re+uest at each
Caltex station here a sealed can ill 'e provided for the deposit of acco"plished entry

, three-staged inner selection syste" is envisioned. ,t the station level& called $#ealer
Contest$& the contestant hose esti"ate is closest to the actual nu"'er of liters dispensed
'y the hooded pu"p thereat is to 'e aarded the first pri.e/ the next closest& the second/
and the next& the third. at this level consist of a 0-'urner !erosene stove for first/ a
ther"os 'ottle and aa 1ay-2-3ac hunter lantern for second/ and an (verready 4agnet-lite
flashlight ith 'atteries and a scredriver set for third. 5he first-pri.e inner in each station
ill then 'e +ualified to 6oin in the $1egional Contest$ in seven different regions. 5he
inning stu's of the +ualified contestants in each region ill 'e deposited in a sealed can
fro" hich the first-pri.e& second-pri.e and third-pri.e inners of that region ill 'e dran.
5he regional first-pri.e inners ill 'e entitled to "a!e a three-day all-expenses-paid round
trip to 4anila& acco"panied 'y their respective Caltex dealers& in order to ta!e part in the
$7ational Contest$. 5he regional second-pri.e and third-pri.e inners ill receive cash of P800 and P000& respectively. ,t the national level& the stu's of the seven regional
first-pri.e inners ill 'e placed inside a sealed can fro" hich the draing for the final
first-pri.e& second-pri.e and third-pri.e inners ill 'e "ade. Cash in store for
inners at this final stage are9 P0&000 for first/ P2&000 for second/ Pl&800 for third/ and
P680 as consolation pri.e for each of the re"aining four participants.

*oreseeing the extensive use of the "ails not only as a"ongst the "edia for pu' the
contest 'ut also for the trans"ission of co""unications relative thereto& representations
ere "ade 'y Caltex ith the postal authorities for the contest to 'e cleared in advance for
"ailing& having in vie sections 198:(a)& 19;2 and 19;0 of the 1evised ,d"inistrative
Code& the pertinent provisions of hich read as follos9

<(C5I27 198:. Absolutely non-mailable matter. = 7o "atter 'elonging to any of the
folloing classes& hether sealed as first-class "atter or not& shall 'e i"ported into the
Philippines through the "ails& or to 'e deposited in or carried 'y the "ails of the
Philippines& or 'e delivered to its addressee 'y any officer or e"ployee of the >ureau of

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?ritten or printed "atter in any for" advertising& des cri'ing& or in any "anner
pertaining to& or conveying or purporting to convey any infor"ation concerning any
lottery& gift enterprise& or si"ilar sche"e depending in hole or in part upon lot or
chance& or any sche"e& device& or enterprise for o'taining any "oney or property of
any !ind 'y "eans of false or fraudulent pretenses& representations& or pro"ises.

$<(C5I27 19;2. Fraud orders.=@pon satisfactory evidence that any person or
co"pany is engaged in conducting any lottery& gift enterprise& or sche"e for the
distri'ution of "oney& or of any real or personal property 'y lot& chance& or draing of
any !ind& or that any person or co"pany is conducting any sche"e& device& or
enterprise for o'taining "oney or property of any !ind through the "ails 'y "eans of
false or fraudulent pretenses& representations& or pro"ises& the #irector of Posts "ay
instruct any post"aster or other officer or e"ployee of the >ureau to return to the
person& depositing the sa"e in the "ails& ith the ord $fraudulent$ plainly ritten or
sta"ped upon the outside cover thereof& any "ail "atter of hatever class "ailed 'y or
addressed to such person or co"pany or the representative or agent of such person or

<(C5I27 19;0. Deprivation of use of money order system and telegraphic transfer
service.=5he #irector of Posts "ay& upon evidence satisfactory to hi" that any person
or co"pany is engaged in conducting any lottery& gift enterprise or sche"e for the
distri'ution of "oney& or of any real or personal property 'y lot& chance& or draing of
any !ind& or that any person or co"pany is conducting any sche"e& device& or
enterprise for o'taining "oney or property of any !ind through the "ails 'y "eans of
false or fraudulent pretenses& representations& or pro"ise& for'id the issue or pay"ent
'y any post"aster of any postal "oney order or telegraphic transfer to said person or
co"pany or to the agent of any such person or co"pany& hether such agent is acting
as an individual or as a fir"& 'an!& corporation& or association of any !ind& and "ay
provide 'y regulation for the return to the re"itters of the su"s na"ed in "oney orders
or telegraphic transfers dran in favor of such person or co"pany or its agent.

5he overtures ere later for"ali.ed in a letter to the Post"aster Aeneral& dated 2cto'er
01& 1960& in hich the Caltex& thru counsel& enclosed a copy of the contest rules and
endeavored to 6ustify its position that the contest does not violate the anti-lottery provisions
of the Postal Ba. @ni"pressed& the then ,cting Post"aster Aeneral opined that the
sche"e falls ithin the purvie of the provisions aforesaid and declined to grant the
re+uested clearance. In its counselCs letter of #ece"'er D& 1960& Caltex sought a
reconsideration of the foregoing stand& stressing that there 'eing involved no consideration
in the part of any contestant& the contest as not& under controlling authorities&
conde"na'le as a lottery. 1elying& hoever& on an opinion rendered 'y the <ecretary of
Eustice on an unrelated case seven years 'efore (2pinion 21D& <eries of 1980)& the
Post"aster Aeneral "aintained his vie that the contest involves consideration& or that& if it
does not& it is nevertheless a $gift enterprise$ hich is e+ually 'anned 'y the Postal Ba&
and in his letter of #ece"'er 10& 1960 not only denied the use of the "ails for purposes of
the proposed contest 'ut as ell threatened that if the contest as conducted& $a fraud
order ill have to 'e issued against it (Caltex) and all its representatives$.

Caltex thereupon invo!ed 6udicial intervention 'y filing the present petition for declaratory
relief against Post"aster Aeneral (nrico Palo"ar& praying $that 6udg"ent 'e rendered
declaring its CCaltex %ooded Pu"p ContestC not to 'e violative of the Postal Ba& and
ordering respondent to allo petitioner the use of the "ails to 'ring the contest to the
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attention of the pu'lic$. ,fter issues ere 6oined and upon the respective "e"oranda of the
parties& the trial court rendered 6udg"ent as follos9

In vie of the foregoing considerations& the Court holds that the proposed CCaltex
%ooded Pu"p ContestC announced to 'e conducted 'y the petitioner under the rules
"ar!ed as ,nnex > of the petitioner does not violate the Postal Ba and the respondent
has no right to 'ar the pu'lic distri'ution of said rules 'y the "ails.

5he respondent appealed.

5he parties are no 'efore us& arrayed against each other upon to 'asic issues9 first&
hether the petition states a sufficient cause of action for declaratory relief/ and second&
hether the proposed $Caltex %ooded Pu"p Contest$ violates the Postal Ba. ?e shall
ta!e these up in seriatim.

1. >y express "andate of section 1 of 1ule 66 of the old 1ules of Court& hich as the
applica'le legal 'asis for the re"edy at the ti"e it as invo!ed& declaratory relief is
availa'le to any person $hose rights are affected 'y a statute . . . to deter"ine any
+uestion of construction or validity arising under the . . . statute and for a declaration of his
rights thereunder$ (no section 1& 1ule 6:& 1evised 1ules of Court). In a"plification& this
Court& confor"a'ly to esta'lished 6urisprudence on the "atter& laid don certain
conditions sine qua non therefor& to it9 (1) there "ust 'e a 6usticia'le controversy/ (2) the
controversy "ust 'e 'eteen persons hose interests are adverse/ (0) the party see!ing
declaratory relief "ust have a legal interest in the controversy/ and (:) the issue involved
"ust 'e ripe for 6udicial deter"ination (5olentino vs. 5he >oard of ,ccountancy& et al.& A.1.
7o. B-0062& <epte"'er 2;& 1981/ #elu"en& et al. vs. 1epu'lic of the Philippines& 80 2.A.&
7o. 2& pp. 8D6& 8D;-8D9/ (dades vs. (dades& et al.& A.1. 7o. B-;96:& Euly 01& 1986). 5he
grava"en of the appellantCs stand 'eing that the petition herein states no sufficient cause
of action for declaratory relief& our duty is to assay the factual 'ases thereof upon the
foregoing cruci'le.

,s e loo! in retrospect at the incidents that generated the present controversy& a nu"'er
of significant points stand out in 'old relief. 5he appellee (Caltex)& as a 'usiness enterprise
of so"e conse+uence& concededly has the un+uestioned right to exploit every legiti"ate
"eans& and to avail of all appropriate "edia to advertise and sti"ulate increased
patronage for its products. In contrast& the appellant& as the authority charged ith the
enforce"ent of the Postal Ba& ad"ittedly has the poer and the duty to suppress
transgressions thereof = particularly thru the issuance of fraud orders& under <ections
19;2 and 19;0 of the 1evised ,d"inistrative Code& against legally non-"aila'le sche"es.
2'viously pursuing its right aforesaid& the appellee laid out plans for the sales pro"otion
sche"e herein'efore detailed. 5o forestall possi'le difficulties in the disse"ination of
infor"ation thereon thru the "ails& a"ongst other "edia& it as found expedient to re+uest
the appellant for an advance clearance therefor. %oever& li!eise 'y virtue of his
6urisdiction in the pre"ises and construing the pertinent provisions of the Postal Ba& the
appellant sa a violation thereof in the proposed sche"e and accordingly declined the
re+uest. , point of difference as to the correct construction to 'e given to the applica'le
statute as thus reached. Co""unications in hich the parties expounded on their
respective theories ere exchanged. 5he confidence ith hich the appellee insisted upon
its position as "atched only 'y the o'stinacy ith hich the appellant stood his ground.
,nd this i"passe as cli"axed 'y the appellantCs open arning to the appellee that if the
proposed contest as $conducted& a fraud order ill have to 'e issued against it and all its

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,gainst this 'ac!drop& the stage as indeed set for the re"edy prayed for. 5he appelleeCs
insistent assertion of its clai" to the use of the "ails for its proposed contest& and the
challenge thereto and conse+uent denial 'y the appellant of the privilege de"anded&
undou'tedly spaned a live controversy. 5he 6usticia'ility of the dispute cannot 'e
gainsaid. 5here is an active antagonistic assertion of a legal right on one side and a denial
thereof on the other& concerning a real = not a "ere theoretical = +uestion or issue. 5he
contenders are as real as their interests are su'stantial. 5o the appellee& the uncertainty
occasioned 'y the divergence of vies on the issue of construction ha"pers or distur's its
freedo" to enhance its 'usiness. 5o the appellant& the suppression of the appelleeCs
proposed contest 'elieved to transgress a la he has sorn to uphold and enforce is an
unavoida'le duty. ?ith the appelleeCs 'ent to hold the contest and the appellantCs threat to
issue a fraud order therefor if carried out& the contenders are confronted 'y the o"inous
shado of an i""inent and inevita'le litigation unless their differences are settled and
sta'ili.ed 'y a declaration (Pa'lo y <en& et al. vs. 1epu'lic of the Philippines&
A.1. 7o. B-6;6;& ,pril 00& 1988). ,nd& contrary to the insinuation of the appellant& the ti"e
is long past hen it can rightly 'e said that "erely the appelleeCs $desires are tharted 'y
its on dou'ts& or 'y the fears of others$ = hich ad"ittedly does not confer a cause of
action. #ou't& if any there as& has ripened into a 6usticia'le controversy hen& as in the
case at 'ar& it as translated into a positive clai" of right hich is actually contested (III
4oran& Co""ents on the 1ules of Court& 1960 ed.& pp. 102-100& citing9 ?oodard vs. *ox
?est Coast 5heaters& 06 ,ri..& 281& 2;: Pac. 080).

?e cannot hospita'ly entertain the appellantCs pretense that there is here no +uestion of
construction 'ecause the said appellant $si"ply applied the clear provisions of the la to a
given set of facts as e"'odied in the rules of the contest$& hence& there is no roo" for
declaratory relief. 5he infir"ity of this pose lies in the fact that it proceeds fro" the
assu"ption that& if the circu"stances here presented& the construction of the legal
provisions can 'e divorced fro" the "atter of their application to the appelleeCs contest.
5his is not feasi'le. Construction& verily& is the art or process of discovering and expounding
the "eaning and intention of the authors of the la with respect to its application to a given
case& here that intention is rendered dou'tful& a"ongst others& by reason of the fact that
the given case is not explicitly provided for in the law (>lac!& Interpretation of Bas& p. 1).
5his is precisely the case here. ?hether or not the sche"e proposed 'y the appellee is
ithin the coverage of the prohi'itive provisions of the Postal Ba inescapa'ly re+uires an
in+uiry into the intended "eaning of the ords used therein. 5o our "ind& this is as "uch a
+uestion of construction or interpretation as any other.

7or is it accurate to say& as the appellant inti"ates& that a pronounce"ent on the "atter at
hand can a"ount to nothing "ore than an advisory opinion the handing don of hich is
anathe"a to a declaratory relief action. 2f course& no 'reach of the Postal Ba has as yet
'een co""itted. Fet& the disagree"ent over the construction thereof is no longer ne'ulous
or contingent. It has ta!en a fixed and final shape& presenting clearly defined legal issues
suscepti'le of i""ediate resolution. ?ith the 'attle lines dran& in a "anner of spea!ing&
the propriety = nay& the necessity = of setting the dispute at rest 'efore it accu"ulates the
asperity diste"per& ani"osity& passion and violence of a full-'lon 'attle hich loo"s
ahead (III 4oran& Co""ents on the 1ules of Court& 1960 ed.& p. 102 and cases cited)&
cannot 'ut 'e conceded. Paraphrasing the language in Zeitlin vs. Arnebergh 89 Cal.& 2d.&
901& 01 Cal. 1ptr.& ;00& 0;0 P. 2d.& 182& cited in 22 ,". Eur.& 2d.& p. ;69& to deny
declaratory relief to the appellee in the situation into hich it has 'een cast& ould 'e to
force it to choose 'eteen undesira'le alternatives. If it cannot o'tain a final and definitive
pronounce"ent as to hether the anti-lottery provisions of the Postal Ba apply to its
proposed contest& it ould 'e faced ith these choices9 If it launches the contest and uses
the "ails for purposes thereof& it not only incurs the ris!& 'ut is also actually threatened ith
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the certain i"position& of a fraud order ith its conco"itant stig"a hich "ay attach even if
the appellee ill eventually 'e vindicated/ if it a'andons the contest& it 'eco"es a self-
appointed censor& or per"its the appellant to put into effect a virtual fiat of previous
censorship hich is constitutionally unarranted. ,s e eigh these considerations in one
e+uation and in the spirit of li'erality ith hich the 1ules of Court are to 'e interpreted in
order to pro"ote their o'6ect (section 1& 1ule 1& 1evised 1ules of Court) = hich& in the
instant case& is to settle& and afford relief fro" uncertainty and insecurity ith respect to&
rights and duties under a la = e can see in the present case any i"position upon our
6urisdiction or any futility or pre"aturity in our intervention.

5he appellant& e apprehend& underrates the force and 'inding effect of the ruling e hand
don in this case if he 'elieves that it ill not have the final and pacifying function that a
declaratory 6udg"ent is calculated to su'serve. ,t the very least& the appellant ill 'e
'ound. >ut "ore than this& he o'viously overloo!s that in this 6urisdiction& $Eudicial
decisions applying or interpreting the la shall for" a part of the legal syste"$ (,rticle ;&
Civil Code of the Philippines). In effect& 6udicial decisions assu"e the sa"e authority as the
statute itself and& until authoritatively a'andoned& necessarily 'eco"e& to the extent that
they are applica'le& the criteria hich "ust control the actuations not only of those called
upon to a'ide there'y 'ut also of those in duty 'ound to enforce o'edience thereto.
,ccordingly& e entertain no "isgivings that our resolution of this case ill ter"inate the
controversy at hand.

It is not a"iss to point out at this 6uncture that the conclusion e have herein 6ust reached
is not ithout precedent. In Liberty alendar o. vs. ohen& 19 7.E.& 099& 11D ,. 2d.& :;D&
here a corporation engaged in pro"otional advertising as advised 'y the county
prosecutor that its proposed sales pro"otion plan had the characteristics of a lottery& and
that if such sales pro"otion ere conducted& the corporation ould 'e su'6ect to cri"inal
prosecution& it as held that the corporation as entitled to "aintain a declaratory relief
action against the county prosecutor to deter"ine the legality of its sales pro"otion plan. !n
pari materia& see also9 "unis vs. onway& 1D ,pp. #iv. 2d.& 20D& 20: 7.F.<. 2d.& :08/ Zeitlin
vs. Arnebergh# supra/ $hrillo# !nc. vs. %cott& 18 7.E. <uper. 12:& ;2 ,. 2d.& 900.

In fine& e hold that the appellee has "ade out a case for declaratory relief.

2. 5he Postal Ba& chapter 82 of the 1evised ,d"inistrative Code& using al"ost identical
ter"inology in sections 198:(a)& 19;2 and 19;0 thereof& supra& conde"ns as a'solutely
non-"aila'le& and e"poers the Post"aster Aeneral to issue fraud orders against& or
otherise deny the use of the facilities of the postal service to& any infor"ation concerning
$any lottery& gift enterprise& or sche"e for the distri'ution of "oney& or of any real or
personal property 'y lot& chance& or draing of any !ind$. @pon these ords hinges the
resolution of the second issue posed in this appeal.

%appily& this is not an altogether untrodden 6udicial path. ,s early as in 1922& in &'l
Debate&# !nc. vs. $opacio& :: Phil.& 2D;& 2;0-2;:& hich significantly delt on the poer of
the postal authorities under the a'ove"entioned provisions of the Postal Ba& this Court
declared that =

?hile countless definitions of lottery have 'een atte"pted& the authoritative one for this
6urisdiction is that of the @nited <tates <upre"e Court& in analogous cases having to do
ith the poer of the @nited <tates Post"aster Aeneral& vi(.9 5he ter" $lottery$ extends
to all sche"es for the distri'ution of 'y chance& such as policy playing& gift
exhi'itions& pri.e concerts& raffles at fairs& etc.& and various for"s of ga"'ling. 5he
three essential ele"ents of a lottery are9 *irst& consideration/ second& pri.e/ and third&
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chance. (%orner vs. <tates G1;92H& 1:D @.<. ::9/ Pu'lic Clearing %ouse vs. Coyne
G1900H& 19: @.<.& :9D/ @.<. vs. *ilart and <ingson G1918H& 00 Phil.& ;0/ @.<. vs. 2lsen
and 4ar!er G191DH& 06 Phil.& 098/ @.<. vs. >aguio G1919H& 09 Phil.& 962/ 3alhalla %otel
Construction Co"pany vs. Car"ona& p. 200& ante.)

@nani"ity there is in all +uarters& and e agree& that the ele"ents of pri.e and chance are
too o'vious in the disputed sche"e to 'e the su'6ect of contention. Conse+uently as the
appellant hi"self concedes& the field of in+uiry is narroed don to the existence of the
ele"ent of consideration therein. 1especting this "atter& our tas! is considera'ly lightened
inas"uch as in the sa"e case 6ust cited& this Court has laid don a definitive yard-stic! in
the folloing ter"s =

In respect to the last ele"ent of consideration& the la does not conde"n the gratuitous
distri'ution of property 'y chance& if no consideration is derived directly or indirectly
fro" the party receiving the chance& 'ut does conde"n as cri"inal sche"es in hich a
valua'le consideration of so"e !ind is paid directly or indirectly for the chance to dra a

1everting to the rules of the proposed contest& e are struc! 'y the clarity of the language
in hich the invitation to participate therein is couched. 5hus =

7o pu..les& no rhy"esI Fou donCt need rappers& la'els or 'oxtopsI Fou donCt have to
'uy anythingI <i"ply esti"ate the actual nu"'er of liter the Caltex gas pu"p ith the
hood at your favorite Caltex dealer ill dispense fro" = to =& and in valua'le .
. . .$ .

7ohere in the said rules is any re+uire"ent that any fee 'e paid& any "erchandise 'e
'ought& any service 'e rendered& or any value hatsoever 'e given for the privilege to
participate. , prospective contestant has 'ut to go to a Caltex station& re+uest for the entry
for" hich is availa'le on de"and& and acco"plish and su'"it the sa"e for the draing of
the inner. 3ieed fro" all angles or turned inside out& the contest fails to exhi'it any
discerni'le consideration hich ould 'rand it as a lottery. Indeed& even as e head the
stern in6unction& $loo! 'eyond the fair exterior& to the su'stance& in order to un"as! the real
ele"ent and pernicious tendencies hich the la is see!ing to prevent$ ($(l #e'ate$& Inc.
vs. 5opacio& supra& p. 291)& e find none. In our appraisal& the sche"e does not only
appear to 'e& 'ut actually is& a gratuitous distri'ution of property 'y chance.

5here is no point to the appellantCs insistence that non-Caltex custo"ers ho "ay 'uy
Caltex products si"ply to in a pri.e ould actually 'e indirectly paying a consideration for
the privilege to 6oin the contest. Perhaps this ould 'e tena'le if the purchase of any Caltex
product or the use of any Caltex service ere a pre-re+uisite to participation. >ut it is not. ,
contestant& it hardly needs reiterating& does not have to 'uy anything or to give anything of

2ff-tangent& too& is the suggestion that the sche"e& 'eing ad"ittedly for sales pro"otion&
ould naturally 'enefit the sponsor in the ay of increased patronage 'y those ho ill 'e
encouraged to prefer Caltex products $if only to get the chance to dra a pri.e 'y securing
entry 'lan!s$. 5he re+uired ele"ent of consideration does not consist of the 'enefit derived
'y the proponent of the contest. 5he true test& as laid don in )eople vs. ardas& 2; P. 2d.&
99& 10D Cal. ,pp. (<upp.) D;;& is hether the participant pays a valua'le consideration for
the chance& and not hether those conducting the enterprise receive so"ething of value in
return for the distri'ution of the pri.e. Perspective properly oriented& the standpoint of the
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contestant is all that "atters& not that of the sponsor. 5he folloing& culled fro" Corpus
Euris <ecundu"& should set the "atter at rest9

5he fact that the holder of the draing expects there'y to receive& or in fact does
receive& so"e 'enefit in the ay of patronage or otherise& as a result of the draing/
does not supply the ele"ent of consideration. *riffith Amusement o. vs. +organ# $ex.
iv. App.& 9; <.?.& 2d.& ;::$ (8: C.E.<.& p. ;:9).

5hus enlightened& e 6oin the trial court in declaring that the $Caltex %ooded Pu"p
Contest$ proposed 'y the appellee is not a lottery that "ay 'e ad"inistratively and
adversely dealt ith under the Postal Ba.

>ut it "ay 'e as!ed9 Is it not at least a $gift enterprise& or sche"e for the distri'ution of
"oney& or of any real or personal property 'y lot& chance& or draing of any !ind$& hich is
e+ually prescri'edI Incidentally& hile the appellantCs 'rief appears to have concentrated
on the issue of consideration& this aspect of the case cannot 'e avoided if the re"edy here
invo!ed is to achieve its effect as an instru"ent of 'oth curative and
preventive 6ustice. 1ecalling that the appellantCs action as predicated& a"ongst other
'ases& upon 2pinion 21D& <eries 1980& of the <ecretary of Eustice& hich opined in effect
that a sche"e& though not a lottery for ant of consideration& "ay nevertheless 'e a gift
enterprise in hich that ele"ent is not essential& the deter"ination of hether or not the
proposed contest = anting in consideration as e have found it to 'e = is a prohi'ited
gift enterprise& cannot 'e passed over sub silencio.

?hile an all-e"'racing concept of the ter" $gift enterprise$ is yet to 'e spelled out in
explicit ords& there appears to 'e a consensus a"ong lexicographers and standard
authorities that the ter" is co""only applied to a sporting artifice of under hich goods are
sold for their "ar!et value 'ut 'y ay of induce"ent each purchaser is given a chance to
in a pri.e (8: C.E.<.& ;80/ 0: ,". Eur.& 68:/ >lac!& Ba #ictionary& :th ed.& p. ;1D/
>allantine& Ba #ictionary ith Pronunciations& 2nd ed.& p. 88/ 1etail <ection of Cha"'er
of Co""erce of Platts"outh vs. Jiec!& 28D 7.?.& :90& 12; 7e'. 10/ >ar!er vs. <tate& 190
<.(.& 608& 86 Aa. ,pp.& D08/ >ell vs. <tate& 0D 5enn. 80D& 809& 8 <need& 80D& 809). ,s thus
conceived& the ter" clearly cannot e"'race the sche"e at 'ar. ,s already noted& there is
no sale of anything to hich the chance offered is attached as an induce"ent to the
purchaser. 5he contest is open to all +ualified contestants irrespective of hether or not
they 'uy the appelleeCs products.

Aoing a step farther& hoever& and assu"ing that the appelleeCs contest can 'e
enco"passed ithin the 'roadest seep that the ter" $gift enterprise$ is capa'le of 'eing
extended& e thin! that the appellantCs pose ill gain no added co"fort. ,s stated in the
opinion relied upon& rulings there are indeed holding that a gift enterprise involving an
aard 'y chance& even in default of the ele"ent of consideration necessary to constitute a
lottery& is prohi'ited ((.g.9 Cri"es vs. <tates& 208 ,la 192& 1D; <o. D0/ 1ussell vs. (+uita'le
Boan K <ec. Co.& 129 Aa. 18:& 8; <.(.& ;;/ <tate ex rel. <tafford vs. *ox-Areat *alls
5heater Corporation& 102 P. 2d.& 6;9& 69:& 69;& 11: 4ont. 82). >ut this is only one side of
the coin. (+ually i"pressive authorities declare that& li!e a lottery& a gift enterprise co"es
ithin the prohi'itive statutes only if it exhi'its the tripartite ele"ents of pri.e& chance and
consideration ((.g.9 >ills vs. People& 18D P. 2d.& 109& 1:2& 110 Colo.& 026/ #C2rio vs.
Eaco's& 2D8 P. 860& 868& 181 ?ash.& 29D/ People vs. Psallis& 12 7.F.<.& 2d.& D96/ City and
County of #enver vs. *rueauff& ;; P.& 0;9& 09:& 09 Colo.& 20& D B.1.,.& 7.<.& 1101& 12 ,nn.
Cas.& 821/ 8: C.E.<.& ;81& citing9 >ar!er vs. <tate& 190 <.(.& 608& 60D& 86 Aa. ,pp.& D08/ 1;
?ords and Phrases& per". ed.& pp. 890-89:). 5he apparent conflict of opinions is explained
'y the fact that the specific statutory provisions relied upon are not identical. In so"e
Statutory Construction Syllabus 1
cases& as pointed out in 8: C.E.<.& ;81& the ter"s $lottery$ and $gift enterprise$ are used
interchangea'ly (>ills vs. People& supra)/ in others& the necessity for the ele"ent of
consideration or chance has 'een specifically eli"inated 'y statute. (8: C.E.<.& 081-082&
citing >ar!er vs. <tate& supra/ <tate ex rel. <tafford vs. *ox-Areat *alls 5heater
Corporation& supra). 5he lesson that e derive fro" this state of the pertinent 6urisprudence
is& therefore& that every case "ust 'e resolved upon the particular phraseology of the
applica'le statutory provision.

5a!ing this cue& e note that in the Postal Ba& the ter" in +uestion is used in association
ith the ord $lottery$. ?ith the "eaning of lottery settled& and consonant to the ell-!non
principle of legal her"eneuticsnoscitur a sociis , hich 2pinion 21D aforesaid also relied
upon although only insofar as the ele"ent of chance is concerned = it is only logical that
the ter" under a construction should 'e accorded no other "eaning than that hich is
consistent ith the nature of the ord associated thereith. %ence& if lottery is prohi'ited
only if it involves a consideration& so also "ust the ter" $gift enterprise$ 'e so construed.
<ignificantly& there is not in the la the slightest indiciu" of any intent to eli"inate that
ele"ent of consideration fro" the $gift enterprise$ therein included.

5his conclusion fir"s up in the light of the "ischief sought to 'e re"edied 'y the la& resort
to the deter"ination thereof 'eing an accepted extrinsic aid in statutory construction. 4ail
fraud orders& it is axio"atic& are designed to prevent the use of the "ails as a "ediu" for
disse"inating printed "atters hich on grounds of pu'lic policy are declared non-"aila'le.
,s applied to lotteries& gift enterprises and si"ilar sche"es& 6ustification lies in the
recogni.ed necessity to suppress their tendency to infla"e the ga"'ling spirit and to
corrupt pu'lic "orals (Co". vs. Bund& 18 ,. 2d.& ;09& 1:0 Pa. <uper. 20;). <ince in
ga"'ling it is inherent that so"ething of value 'e ha.arded for a chance to gain a larger
a"ount& it follos inelucta'ly that here no consideration is paid 'y the contestant to
participate& the reason 'ehind the la can hardly 'e said to o'tain. If& as it has 'een held

Aratuitous distri'ution of property 'y lot or chance does not constitute $lottery$& if it is
not resorted to as a device to evade the la and no consideration is derived& directly or
indirectly& fro" the party receiving the chance& gambling spirit not being cultivated or
stimulated thereby. City of 1osell vs. Eones& 6D P. 2d.& 2;6& :1 7.4.& 28;.$ (28 ?ords
and Phrases& per". ed.& p. 698& e"phasis supplied).
?e find no o'stacle in saying the sa"e respecting a gift enterprise. In the end& e are
persuaded to hold that& under the prohi'itive provisions of the Postal Ba hich e have
heretofore exa"ined& gift enterprises and si"ilar sche"es therein conte"plated are
conde"na'le only if& li!e lotteries& they involve the ele"ent of consideration. *inding none
in the contest here in +uestion& e rule that the appellee "ay not 'e denied the use of the
"ails for purposes thereof.

1ecapitulating& e hold that the petition herein states a sufficient cause of action for
declaratory relief& and that the $Caltex %ooded Pu"p Contest$ as descri'ed in the rules
su'"itted 'y the appellee does not transgress the provisions of the Postal Ba.

,CC21#I7ABF& the 6udg"ent appealed fro" is affir"ed. 7o costs.

Statutory Construction Syllabus 1
II. Nature and Object of
MANILA LODGE (G.R. No. L-11176, June 29,
5his is an appeal ta!en 'y the Collector of Internal 1evenue fro" a decision of the Court of
5ax ,ppeals holding that the 4anila Bodge 7o. D61 of the >enevolent K Protective 2rder of
(l!s $is not lia'le for privilege taxes on its sale 'y retail of li+uor and to'acco exclusively to
its "e"'ers and their guests&$ and reversing and setting aside a decision of said appellant
to the contrary& dated 7ove"'er 19& 1980 ithout special pronounce"ent as to costs.
5he uncontested facts are set forth in the decision of said Court& fro" hich e +uote9
5his is an appeal fro" to decisions of the respondent Collector of Internal 1evenue
assessing and de"anding fro" the petitioner herein the su"s of P1&200.80 and
P002.00& respectively representing fixed taxes as retail dealer in li+uor& fer"ented
li+uor& and to'acco& allegedly due fro" the petitioner for the period fro" the :th +uarter
of 19:6 to 1980 and the period fro" 198:-1988& pursuant to su'sections (i)& (!) and (n)
of section 190 of the 5ax Code& in relation to 1D; of the sa"e Code.
5he petitioner& 4anila Bodge 7o. D61 is ad"ittedly a fraternal& civic& non-stoc!& non-
profit organi.ation duly incorporated under Philippine las. It ons and operates a
clu'house located at #eey >oulevard& 4anila& herein it sells at retail& li+uor&
fer"ented li+uor& cigar and cigarettes only to its "e"'ers and their guests. >.I.1.
agents discovered that the 4anila (l!s Clu' had not paid for the period in +uestion the
privilege tax for retail li+uor dealer (>-:)& retail dealer in fer"ented li+uor (>-D)& and
retail to'acco dealer (>-9-a) prescri'ed in section 190 of the 5ax Code.
2n 7ove"'er 19& 1980& the Collector of Internal 1evenue assessed against and
de"anded fro" the petitioner the pay"ent of the su" of P1&200.80 representing fixed
taxes& as retail dealer& for the period fro" its :th +uarter of 19:6 to 1980& exclusive of
the suggested co"pro"ise penalty of P;0.00. 5he petitioner& clai"ing that it as
exe"pted fro" the pay"ent of the privilege taxes in +uestion& re+uested that the said
assess"ent 'e revieed 'y the Conference <taff of the >ureau of Internal 1evenue.
5he Conference <taff& after due hearing& upheld and reiterated the assess"ent "ade
'y the respondent Collector of Internal 1evenue. *orthith& the petitioner appealed to
this Court on Eune 1& 1988.
#uring the pendency of the original petition for revie in the a'ove-entitled case&
respondent issued another assess"ent covering fixed taxes for the years 198: to 1988
in the a"ount of P002.00& exclusive of the suggested co"pro"ise penalty of P80.00.
Conse+uently& petitioner ith leave of Court filed a supple"ental petition for revie
hich included the latter assess"ent.
Statutory Construction Syllabus 1
Petitioner 'ases its clai" for exe"ption fro" the pay"ent of the privilege taxes in
+uestion on the grounds that it is not engaged in the 'usiness of selling at retail li+uor&
fer"ented li+uor& and to'acco 'ecause the sale of these afore"entioned specific goods
is "ade only to "e"'ers of the clu' and their guestsC on a very li"ited scale in
pursuance only of its general purpose as a fraternal social clu'& to provide co"fort&
recreation& and convenience to such "e"'ers& and "erely to provide enough "argin to
cover operational expenses. (PetitionerCs 4e"o p. 0).
1espondent& on the other hand& "aintains that persons selling articles su'6ect to
specific tax& such as cigars& to'acco& li+uor and the li!e& are su'6ect to the fixed taxes
i"posed 'y section 190 of the 5ax Code& irrespective of hether or not they "ade profit&
and hether or not they are civic or fraternal clu's selling only to their "e"'ers and
their guests. 5his contention is 'ased on a ruling pro"ulgated 'y the >ureau of Internal
1evenue "ade in 1921.
Petitioner herein "aintains that9
1. 5he respondent Court of 5ax ,ppeals erred in reversing the decision of the petitioner-
appellant hich held the respondent clu' lia'le for fixed taxes.
2. 5he respondent Court of 5ax ,ppeals erred in holding that 'efore respondent clu'Cs
lia'ility for the privilege taxes i"posed 'y section 190 of the 5ax Code attaches it is
necessary that it 'e engaged in the $'usiness$ of selling li+uor and to'acco.
0. 5he respondent Court of 5ax of ,ppeals erred in holding that a fraternal& civic& non-
stoc!& non-profit organi.ation li!e the respondent clu' selling at retail li+uor and to'acco
only to its "e"'ers and their guests ith 6ust enough "argin to cover operational
expenses should not 'e held lia'le for the fixed taxes incident to the 'usiness of selling
at retail& li+uor and to'acco.
:. 5he respondent Court of 5ax ,ppeals erred in holding that the ,d"inistrative
construction of the >ureau of Internal 1evenue on the "atter in +uestion is outside the
a"'it of& and is inconsistent ith& the 1evised ,d"inistrative Code and 5ax Code.
5his appeal is untena'le. In the language of the Court of 5ax ,ppeals9
5he 'one of contention 'eteen the to parties herein . . .& lies in the proper
interpretation and application of the pertinent provisions of the 5ax Code& na"ely&
su'sections (i)& (!) and (n) of section 190 in relation to section 1D; of the 5ax Code&
hich e +uote hereunder9
<ec. 1D;. )ayment of privilege taxes. = , privilege tax "ust 'e paid 'efore any
business or occupation hereinafter specified can 'e lafully 'egun or pursued. $he tax
on business is paya'le for every separate or distinct esta'lish"ent or place where the
business su'6ect to the tax is conducted/ and one occupation or line of 'usiness does
not 'eco"e exe"pt 'y 'eing conducted ith so"e other occupation or 'usiness for
hich such tax has 'een paid.
5he occupation tax "ust 'e paid 'y each individual engaged in a calling su'6ect
thereto/ the tax on a 'usiness 'y the person& fir"& or co"pany conducting the sa"e.
(("phasis supplied.)
Statutory Construction Syllabus 1
<(C. 190. Amount of tax on business. = *ixed taxes on 'usiness shall 'e collected as
follos& the a"ount stated 'eing for the hole year hen not otherise specified9
(i) 1etail li+uor dealers& one hundred pesos.
(!) 1etail dealers in fer"ented li+uors& fifty pesos.
x x x x x x x x x
(n) ?holesale to'acco dealers& sixty pesos/ retail to'acco dealers& sixteen pesos.
5he afore+uoted provisions of the 5ax Code are clear and precise. 5he privilege taxes
prescri'ed in section 190 of the 5ax Code in relation to section 1D; of the sa"e& are to
'e i"posed or classified therein for $'usiness$ purposes. 5his evident intention of the
la 'eco"es "ore palpa'le hen e ta!e into consideration the facts that the drafters
of our 5ax Code had grouped the afore+uoted provisions of la under one general
division of the 5ax Code headed as $5itle 3& Privilege 5axes on "usiness and
It is not therefore entirely correct to "aintain as respondent does& that all person selling
articles su'6ect to specific taxes& li!e li+uor and to'acco& should li!eise 'e su'6ect to
the fixed taxes i"posed 'y section 190 of the 5ax Code. ?e 'elieve& that in order that
these persons should 'e su'6ected to the privilege taxes i"posed 'y the
afore"entioned section of the 5ax Code& it is necessary that they 'e engaged in the
$'usiness$ of selling li+uor and to'acco& otherise the privilege taxes as a dealer of
li+uor and to'acco can not attach.
,t this 6uncture a definition of the ord $'usiness$ is in order and e have the folloing9
5he ord $'usiness$ in its ordinary and co""on use is e"ployed to designate hu"an
efforts hich have for their and living or reard/ it is not commonly used as descriptive
of charita'le& religious& educational or social agencies. (>allantineCs Ba #ictionary&
19:; (d. P. 1D9)
>usiness = $that hich 'usies or engages ti"e& attention or la'or as a principal serious
concern or interest/ any particular occupation or e"ploy"ent ha'itually engaged in
specially for livelihood or gain.$ (3ol. 1& 19:9 4erria"-?e'sterCs 7e International
#ictionary& 2nd (d. p. 062.)
2ther definitions of the ter" $'usiness$ as given 'y 6udicial pronounce"ent are found in
3olu"e 3& ?ords and Phrases& page 999 as follos9
"usiness is a ord of large signification& and denotes the e"ploy"ent or occupation in
hich a person is engaged to produce a living. (Citing9 Aoddard v. Chaffee& ;: 4ass
(,llen) 098/ D9 ," #ec. D69).
"usiness in co""on speech "eans ha'itual or regular occupation that a party is
engaged in ith a vie to inning a livelihood or so"e gain. (Citing9 !n re Be"ont& :1 p.
2#& :9D& 802)
,n enterprise not conducted as a "eans of livelihood or for profit does not co"e ithin
the ordinary "eaning of the ter"s& $'usiness& trade or industry.$ (Citing City of
1ochester vs. 1ochester AirlCs %o"e& 19: 7.F.<. 206& 20D).
Statutory Construction Syllabus 1
5he ter" $'usiness$ as used in la i"posing a license tax on 'usiness& trades& etc.
ordinarily "eans 'usiness in the trade or co""ercial sense only& carried on ith a vie
to profit or livelihood. (Citing9 Cu.ner vs. California Clu' 100 p. ;6;& ;6D& 188& Cal. 000&
20 B.1.,. 7.<. 1098).
*ro" the foregoing definitions& it is evident that the plain ordinary "eaning of $'usiness$
is restricted to activities or affairs here profit is the purpose& or livelihood is the "otive.
5he ter" $'usiness$ 'eing used ithout any +ualification in section 190 of the 5ax Code
in relation to section 1D; of the sa"e& should therefore 'e construed in its plain and
ordinary "eaning& restricted to activities for profit or livelihood.
?ith these considerations in "ind& e no co"e to the +uestion of hether or not the
4anila (l!s Clu' is engaged in the $'usiness$ of selling li+uor and to'acco.
1espondent& in paragraph 1 of his anser& ad"its that the petitioner herein& 4anila (l!s
Clu' is a fraternal& civic& non-stoc!& non-profit organi.ation. It has 'een esta'lished
ithout contradiction that the 4anila (l!s Clu'& in pursuance of its purpose as a
fraternal social clu'& sells on retail at its clu'house on #eey >oulevard& li+uor& cigars
and cigarettes& on a very li"ited scale& only to its "e"'ers and their guests& providing
6ust enough "argin to cover operational expenses ithout intention to o'tain profit.
<uch 'eing the case then& the 4anila (l!s Clu' cannot 'e considered as engaged in
the $'usiness$ of selling li+uor and to'acco.
?here the corporation handled no "oney except such as as necessary to
cover operational expenses& conducted no 'usiness for itself& and engaged in no
transactions that conte"plated a profit for itself = such corporation is considered not
organi.ed for profit under the Aeneral Corporation Ba. (1ead 3. 5ideater Coal (xch.&
116 , ;9;& 90:& cited in 3ol. 0: ?ords K Phrases& p. 220& defining $profits$/
underscoring provided.).
5he petitioner herein& 4anila el!s Clu'& not 'eing engaged in the 'usiness of selling at
retail li+uor and to'acco& cannot therefore 'e held lia'le for the privilege taxes re+uired
'y section 190& su'sections (1)& (!) and (n). 5he eight of ,"erican authorities
enhances the strength of our findings that a fraternal& civic& non-stoc!& non-profit
organi.ation& li!e the (l!s Clu'& selling at retail li+uor and to'acco only to its "e"'ers
and their guests in pursuance ith its general purpose as a fraternal social clu' ith 6ust
enough "argin to cover operational expenses& should not 'e held lia'le for the fixed
taxes incident to the 'usiness of selling at retail& li+uor and to'acco.
, 'onafide social clu'& hich disposes of li+uors at its clu'house to "e"'ers and their
guests at a fixed charge as incident to the general purposes of the organi.ational is not
re+uired to ta!e out a license 'y 1ev. Bas 7o. 0DDD-0D;8& approved 4arch 18& 1908&
hich provides for a license upon the 'usiness of disposing intoxicating li+uors/ the
ter" 'usiness in such statute "eaning 'usiness in the trade or co""ercial sense.
(<tate v. university Clu'& 100 p. :6;& :D0/ 08 7ev. :D8/ :: B.1.,.& 7. <. 1026).
, social clu'& not organi.ed for the purpose of evading the li+uor las& 'ut hich
furnishes its "e"'ers ith li+uors and refresh"ents ithout profit to itself& is not a retail
li+uor dealer& ithin the statute i"posing a license tax on all persons dealing in& selling
or disposing of intoxicating li+uors 'y retail. (>arden v. 4ontan Clu'& 28 P. 10:2& 10
4ont. 000& II B.1.,. 890).
Statutory Construction Syllabus 1
,cts 1;;1& C. 1:9& taxation of li+uors dealers& does not include a social clu'
"aintaining a li'rary& giving "usical entertain"ents& and furnishing "eals for its
"e"'ers& hich !eeps a s"all stoc! of li+uor/ the "e"'ers paying for its drin! as it is
ta!en& 'ut no profit 'eing "ade on such sales. (5ennessee Clu' of 4e"phis v. #yer&
D9 5enn. (11 Bea) :82& :61& :D ,". 1ep. 29;.).
, social clu' co"posed of "e"'ers ho have no proprietary interest in the assets
hich provides a reading roo"& restaurant& 'ar roo"& li'rary& 'illiard roo"s and sitting
roo"s for its "e"'ers& the expenses of hich are defrayed 'y annual dues fro" each
"e"'er& and 'y pay"ents "ade 'y the "e"'ers for food and drin!s& is not engaged in
the 'usiness of a retail li+uor dealer& ithin section 11 of the Bouisiana Bicense 5ax
Bas. (Ba ,nn. 8;8& 20 B.1.,. 1;8). 1espondent hoever& insists that the petitioner
should pay the privilege tax on the sale at retail of li+uor and to'acco 'ecause this has
'een allegedly the practice consistently folloed 'y the >ureau of Internal 1evenue
since 1921& and 'ecause section 1:6: of the 1evised ,d"inistrative Code under hich
said ruling as then 'ased had 'een reenacted 'y the legislature as section 190 of the
7ational Internal 1evenue Code. 5hus& respondent contends& that the policy of the
>ureau of Internal 1evenue has therefore gained $approval 'y legislative
5he alleged ad"inistrative practice is founded upon the folloing ruling rendered in
Clu's selling exclusively to "e"'ers thereof li+uors and other products on hich the
specific tax is i"posed should pay the privilege tax corresponding to the business
engaged in. 5he fact that such products are sold at cost to the "e"'ers of the clu'
does not affect the clu'Cs lia'ility to tax. (1uling& 2ct. 10& 1921& >.I.1. 108.02/ (xh. 0&
pp. 66-69. >I1 records.)
?e do not agree ith the contention of the respondent. ?hile there is ad"ittedly a
ruling on this point in 1921& there is no shoing that such has 'een a long-continued
practice. >e that as it "ay& any such ad"inistrative construction "ust 'e ithin the
a"'it of& and "ust 'e consistent ith& the 1evised ,d"inistrative Code and the 5ax
Code. It is li!eise the rule that here the statute is una"'iguous& an ad"inistrative
construction is unarranted (@.<. vs. 4issouri P.1. Co. 2D; @. <. 269& D0 B. (d. 022)
and no construction "ay 'e "ade to restrict or enlarge the "eaning of an ,ct. (>latt vs.
@.<..& 008 @.<. 26D& ;0 B. (d. 16D).
,n exa"ination of section 1:6: of the 1evised ,d"inistrative Code ta!en in connection
ith section 1:80 of the sa"e& discloses the fact that aside fro" the change in rates of
taxes to 'e paid and the arrange"ent of the classification of 'usiness enu"erated
therein& section 190 of the present 5ax Code is a ver'ati" copy of the afore"entioned
provisions of the 1evised ,d"inistrative Code. 5he policy or principle folloed 'y the
said code regarding privileges taxes& i.e. that the privilege taxes are paya'le only 'y
those persons or entities engaged in the 'usiness enu"erated in section 1:6: of the
said Code& has not suffered any change& and the sa"e still o'tains under our present
5ax Code. In the a'sence of a shoing that the legislative 'ody had 'een apprised of
the aforesaid ruling& hat has gained legislative approval thru reenact"ent is& e
'elieve& the policy 'ehind the a'ove-"entioned provision of the 1evised ,d"inistrative
Code of taxing persons engaged in 'usiness and not the alleged practice folloing the
ad"inistrative ruling of 1921. ?e 'elieve that no a"ount of trenchant adherence to an
esta'lished practice "ay 6ustify its continued application here it is clear and "anifest
that the sa"e is not in consonance ith the policy of the legislature as defined 'y la.
Statutory Construction Syllabus 1
It is urged 'y appellant that e"phasis should 'e placed not on the ter" $'usiness$& 'ut on
the phrases $retail li+uor dealers$& in fer"ented li+uors$ and $retail to'acco dealers$&
appearing in section 190 of the 7ational Internal 1evenue Code& hich are defined in
section 19: thereof as follos9
<(C. 19:. -ords and phrases defined. = In applying the provisions of the preceding
section& ords and phrases shall 'e ta!en in the sense and extension indicated 'elo9
x x x x x x x x x
(i) $1etail li+uor dealer$ includes every person& except a retail vino dealer& ho for
hi"self or on co""ission sells or offers for sale ine or distilled spirits (other than
denatured alcohol) in +uantities of five liters or less at any one ti"e and not for sale.
x x x x x x x x x
(!) $1etail dealer in fer"ented li+uors$ includes every person& except dealers in tu'a&
'asi& and tapuy& ho for hi"self or on co""ission sells or offers for sale fer"ented
li+uors and +uantities of five liters or less at any one ti"e and not for resale.
x x x x x x x x x
(o) $5o'acco dealer$ co"prehends every person ho hi"self or on co""ission sells or
offers for sale cigars& cigarettes& or "anufactured to'acco.
@ndou'tedly& these definitions "ust 'e given all the eight due thereto& in the interpretation
of section 190 of the 5ax Code. ,s used therein& the phrases a'ove referred to are&
hoever& part and parcel of the provisions contained& not only in said section 190& 'ut& also&
in section 1D; and other parts of the 5ax Code& all of hich "ust 'e given effect in their
entirety as a har"onious& coordinated and integrated unit& not as a "ass of heterogeneous
and unrelated if not incongruous ter"s& clauses and sentences. In other ords& the
phrases in +uestion should 'e construed in the light of the context of the hole 5ax Code&
of hich they are integral parts. ,nd hen this is done = hen e consider that section
190 re+uires $retail li+uor dealers$& $retail dealers in fer"ented li+uors$ and $retail to'acco
dealers$ to pay the taxes on business$ therein specified/ that said section 190 is entitled
$,"ount of tax on business$& that said section 190 "erely i"ple"ents the general
provision in section 1D;& to the effect that $a privilege tax "ust 'e paid in 'efore any
business or occupation hereinafter specified can 'e lafully 'egun and pursued$/ that the
ter" $'usiness$ is used in said section 1D;& six (6) ti"es/ and that the afore"entioned
sections 1D;& 190 and 19: are part of 5itle 3 of the 5ax Code& entitled $Privilege taxes on
'usiness and occupation$ = it 'eco"es crystal clear that the $retail li+uor dealers$& $retail
dealers in fer"ented li+uors$ and $retail to'acco dealers$ alluded to in said section 190 are
those engaged in $'usiness$& not fraternal& civic& non-stoc!& non-profit organi.ations& li!e
herein respondent& hich sells ines& distilled spirits& fer"ented li+uors and to'acco&
exclusively to its "e"'ers and their guests& at such prices as are "erely sufficient to cover
operational expenses.
Petitioner assails the applica'ility of the decisions relied upon 'y the Court of 5ax ,ppeals&
upon the ground that said decisions refer to the authority to license& and& hence& to the
exercise to the police poer& not that of taxation hich is involved in the case at 'ar.
%oever& the distinction "ade enhances = instead of detracting fro" = the eight of said
decisions as precedents& insofar as the issue herein is concerned. Indeed& the police poer
is& in general 'roader and su'6ect to less restrictions than the poer to tax. It is not difficult
to conceive the advisa'ility& if not& necessity& of re+uiring a license for so"e activities
underta!en 'y so-called $clu's$& oing to the possi'ility& if not pro'a'ility& of use of said
Statutory Construction Syllabus 1
na"e& appellation or deno"ination& in order to avoid or evade so"e las or to ca"ouflage
certain ventures& pursuits or enterprises hich otherise ould clearly 'e illegal& i""oral
or contrary to pu'lic policy. @pon the other hand& a tax is a 'urden and& as such& it ill not
'e dee"ed i"posed upon fraternal& civic& non-profit& non-stoc! organi.ations& unless the
intent to the contrary is "anifest and patent.
?herefore& the appealed decision of the Court of 5ax ,ppeals is here'y affir"ed& ithout
special pronounce"ent as to costs. It is so ordered.

PEOPLE vs. GATCHALIAN (104 Phil 676, 1958)
GENERAL vs. BARRAMEDA (G.R. No. L-29906,
January 30, 1976)

Petition for certiorari to revie the decision of the Court of ,ppeals (<econd #ivision) in
C,-A.1. 7o. 0;060-1& entitled $Leoncio "arrameda# plaintiff-appellant# vs. Development
"an. of the )hilippines /0aga "ranch# 0aga ity1& 1odolfo Aeneral and Car"en Aontang&
defendants-appellees&$ hich reversed the decision of the Court of *irst Instance of
Ca"arines <ur in its Civil Case 7o. 869D& $dis"issing the co"plaint ith costs against
,ppellate CourtCs decision has the folloing dispositive portion9
?e therefore find that the appealed 6udg"ent should 'e reversed and set aside and
another one entered declaring (1) null and void the sale executed on <epte"'er 0&
1960& 'y defendant #evelop"ent >an! of the Philippines in favor of its defendants
1odolfo Aeneral and Car"en Aontang& (2) 5.C.5. 7o. 8000 cancelled and (0) the
"ortgaged property redee"ed/ and ordering the Cler! of the loer court to deliver the
a"ount of PD&2D1.22 deposited to defendants 1odolfo Aeneral and Car"en Aontang
and the 1egister of #eeds to issue a ne 5ransfer Certificate of 5itle in the na"e of
plaintiff in lieu of 5.C.5. 7o. 8000 upon pay"ent 'y hi" of corresponding fees/ ith
costs against the defendants in 'oth instances.
@ndisputed facts are9
Plaintiff see!s to redee" the land for"erly e"'raced in 5ransfer Certificate of 5itle 7o.
1:1;& containing an area of 89.:6;D hectares& situated in 'arrio 5a'an& 4inala'ac
Ca"arines <ur/ to annul any and all contracts affecting said property 'eteen the
#evelop"ent >an! of the Philippines (#>P) and 1odolfo Aeneral and Car"en Aontang
and to recover da"ages& attorneyCs fees and costs.
5he land in dispute as "ortgaged 'y plaintiff to the #>P to secure a loan of
P22&000.00. *or failure of the "ortgagor to pay in full the install"ents as they fall due&
Statutory Construction Syllabus 1
the "ortgagee foreclosed extra6udicially pursuant to the provisions of ,ct 0108. 2n ,pril
20& 1962& the provincial sheriff conducted an auction sale in hich the "ortgagee& as
the highest 'idder& 'ought the "ortgaged property for PD&2D1.22. 2n 4ay 10& 1960& the
sheriff executed a final deed of sale in favor of the #>P ((xhi'it 2) and the #>P
executed an affidavit of consolidation of onership ((xhi'it 0). @pon registration of the
sale and affidavit on %eptember 2# 3456 ((xhi'it 1)& 5C5 7o. 1:1; in the na"e of
plaintiff as cancelled and 5C5 7o. 8000 issued to the #>P ((xhi'it-8) in its stead. 2n
<epte"'er 0& 1960& defendants 1odolfo Aeneral and Car"en Aontang purchased the
land fro" their codefendant. 5he sale in their favor as annotated on 5C5 7o. 8000
on 0ovember 25# 3456 only.
Prior to the date last "entioned& or on 7ove"'er 20& 1960& plaintiff offered to redee"
the land. In vie of the refusal of the #>P to allo the rede"ption& plaintiff co""enced
this suit. 5he original co"plaint as filed in court on 7ove"'er 20& 1960. 2n ,ugust 12&
196:& plaintiff deposited ith the cler! of court the su" of PD&2D1.22& representing the
repurchase price of the land.
5he trial court held that the one-year period of rede"ption 'egan to run on ,pril 20&
1962& hen the sale at pu'lic auction as held& and ended on ,pril 2:& 1960/ that the
plaintiffCs offer to redee" on 7ove"'er 20& 1960 and the deposit of the rede"ption
price on ,ugust 12& 196: ere "ade 'eyond the rede"ption period/ and that
defendants 1odolfo Aeneral and Car"en Aontang Care legiti"ate purchasers for value.
5o principal issues raised are9
(1) In the interpretation and application of <ection 01& Co""onealth ,ct :89 (Ba that
created the ,gricultural and Industrial >an!& no #evelop"ent >an! of the Philippines)
hich provides9
5he 4ortgagor or de'tor to the ,gricultural and Industrial >an! hose real property
as sold at pu'lic auction& 6udicially or extra- 6udicially& for the full or partial pay"ent
of an o'ligation to said 'an! shall& within one year from the date of7 the auction
sale# have the right to redee" the real property ... (("phasis supplied)&
shall the period of rede"ption start fro" the date of auction sale or the date of the
registration of the sale in the register of deeds as the respondent ,ppellate Court heldI
(2) ?ere petitioners under o'ligation to loo! 'eyond hat appeared in the certificate of
title of their vendor the #evelop"ent >an! of the Philippines and investigate the validity
of its title 'efore they could 'e classified as purchasers in good faithI
PetitionersC principal contentions are9 that <ection 01 of Co""onealth ,ct 7o. :89 hich
created the ,gricultural and Industrial >an!& predecessor of the 1eha'ilitation *inance
Corporation and the #evelop"ent >an! of the Philippines& clearly provides that the right to
redee" the real property sold at pu'lic auction 6udicially or extra-6udicially "ay only 'e
exercised &within one year from the date of the auction sale&8 that there is no provision in
Co""onealth ,ct 7o. :89 expressly stating that the rede"ption period of one year shall
start fro" the registration of the certificate of sale in the register of deeds/ that <ec. 01 of C.
,. :89 is a specific provision of la hich governs rede"ption of real property foreclosed
'y the ,gricultural and Industrial >an! (no the #evelop"ent >an! of the Philippines)& and
prescri'es the rede"ption period for 'oth 6udicial and extra-6udicial foreclosures of
"ortgage/ that insofar as foreclosures of "ortgage 'y 'an!ing and financial institutions are
Statutory Construction Syllabus 1
concerned& the period of rede"ption applica'le "ust 'e the one prescri'ed in their
respective charters as& in the case at 'ar& <ection 01& C.,. 7o. :89/ that the ruling in the
case of Agbulos vs. Alberto& A.1. 7o. B-1D:;0& Euly 01& 1962& cited 'y respondent
,ppellate Court as a 'asis for its decision& is not applica'le to the case at 'ar 'ecause this
Court 'ased its ,g'ulos ruling on <ection 26 (no <ec. 90) of 1ule 09 of the 1ules of
Court& herein it is not clear hen the period of rede"ption should start (date hen
execution sale as conducted& or hen the certificate of sale as executed 'y sheriff& or
hen the certificate of sale as registered in the registry of deeds)& and this Court ruled
that as the land involved in that case is registered under the 5orrens syste"& the date of
rede"ption should 'egin to run fro" the date of registration& unli!e in the case at 'ar here
<ection 01 of Co""onealth ,ct :89 specifically and clearly provides that the running of
the rede"ption period shall start from the date of the auction sale/ and that the ruling of this
Court in *on(ales vs. ).0.".# :; Phil. ;2:& also invo!ed 'y respondent ,ppellate Court as a
'asis for its decision& is li!eise not applica'le to the case at 'ar 'ecause the provisions on
the "atter of the P.7.>. Charter& ,ct 7o. 290;& are different fro" that of Co""onealth ,ct
:89. <ection 02 of ,ct 290;& hich is no <ection 20 of 1.,. 7o. 1000 (P7> Charter)
provides that the "ortgagor shall have the right to redee" within one year the sale of the
real estate. 5his is Identical to the provision appearing in <ec. 26& no <ec. 00& 1ule 09&
1ules of Court& hile under <ec. 01 of Co""onealth ,ct :89& the period of redemption
should star# on the date of the auction sale# and the latter provision is applica'le specifically
and expressly to the case at 'ar.
It is also petitionersC principal argu"ent that the ruling in 4etropolitan Insurance Co"pany&
su'stituted 'y spouses Loreto Z. +arcaida and +iguel de +arcaida vs. )igtain 101 Phil.
1111& 1118-1116& herein this Court& in construing <ec. 6 of ,ct 7o. 0108& categorically
stated that the one year rede"ption period shall start from the date of sale and not from
the report of the sale or the registration of the sale certificate in the office of the 9egister of
Deeds# is "ore applica'le to the present case. 5he pertinent portion of the decision in the
4arcaida case follos9
>ut again the appellants clai" that in this particular case& the statutory redemption
period of one year should begin from December 3:# 34;<# when the auction sale was
actually recorded in the office of the 9egister of Deeds of +anila and not from
December 3;# 34;6# when the sale at public auction of the properties in question too.
place. -e find its contention to be also untenable in view of the clear provision of the
aforesaid %ection 5 of Act 0o. 636; to the effect that the right of redemption should be
exercised within one year from the date of the sale. !t should not be overloo.ed that the
extra=udicial sale in question was for foreclosure of a mortgage and was not by virtue of
an ordinary writ of execution in a civil case. ... ,nd since the appeallants had failed to
redee" the land in +uestion ithin the ti"e alloed 'y <ection 6 of ,ct 0108& the
appellee has perfect right to re+uire the cancellation of the attach"ent lien in +uestion.
(("phasis supplied)
7otithstanding the i"pressive argu"ents presented 'y petitioners& the crucial issue to
deter"ine is the choice of hat rule to apply in deter"ining the start of the one year
rede"ption period& hether fro" the date of the auction sale or fro" that of the registration
of the sale ith the registry of deeds. In other ords it is hether a literal interpretation of
the provision of <ection 01 of Co""onealth ,ct :89 = that the period of redemption
shall start from the date of the auction sale = shall govern& or hether the ords& $auction
sale$ shall 'e considered in their ordinary "eaning or in the sa"e sense that site is used in
the texts of <ection 26& no 00& of 1ule 09 of the 1ules of Court& and <ection 26 of ,ct
290;& no <ection 20& 1.,. 1000 (Charter of P7>). <tated differently& should the ord
$sale$ used in the a'ove indicated provisions of the 1ules of Court and the P7> Charter&
under hich?e ruled that the rede"ption period shall start fro" the registration of the sale
Statutory Construction Syllabus 1
in the registry of deeds 'e applied to foreclosure sales for the #>P and give to the ords
auction sale$ in its charter the sa"e "eaning of $sale$ as used in connection ith
registered landI
?e are of the vie that a correct solution to the foregoing issue "ust entail not "erely
trying to deter"ine the "eaning of the ords auction sale$ and $sale$ in different legislative
enact"ents& 'ut& "ore i"portantly& a deter"ination of the legislative intent hich is +uite a
tas! to achieve as it depends "ore on a deter"ination of the purpose and o'6ective of the
la in giving "ortgagors a period of rede"ptio" of their foreclosed properties. 4ortgagors
hose properties are foreclosed and are purchased 'y the "ortgagee as highest 'idder at
the auction sale are decidedly at a great disadvatage 'ecause al"ost invaria'ly
"ortgagors forfeit their properties at a great loss as they are purchased at no"inal costs 'y
the "ortgagee hi"self ho ordinarily 'ids in no "ore than his credit or the 'alance threof
at the auction sale. 5hat is the reason hy the la gives the" a chance to redee" their
properties ithin a fixed period. It cannot 'e denied that in all foreclosures of "ortgages
and sale of property pursuan to execution& hether 6udicial or extra6udicial in nature& under
different legislative enact"ents& a pu'lic auction sale is a indispensa'le pre-re+uisite to the
valid disposal of properties used as collateral for the o'ligation. <o that hether the
legislators in different las used as collateral for the o'ligation. <o that hether the
legislators in different las used the ter" $sale$ or $auction sale$ is of no "o"ent& since the
presu"ption is that hen they used those ords $sale$ and $auction sale$ interchangea'le
in different las they really referred to only one act = the sale at public
auction indispensa'ly necessary in the disposition of "ortgaged properties and those
levied upon to pay civil o'ligations of their oners.
In the case of (rnesto %ala(ar# et al. vs. Flor De Lis +eneses# et al.#A.1. 7o. B-180D;&
pro"ulgated Euly 01& 1960& this Court stated9
5he issue decisive of this appeal is the one raised 'y appellants in their third
assign"ent of error& hich is to this effect9 that the lower court erred in not holding that
the period of redemption in this case# as far as appellants are concerned# started only
on +ay 25# 34;5# registered. <hould ?e rule to this effect& it is clear that hen appellants
atte"pted to exercise their right to redee"& as 6udg"ent creditors of the deceased
"ortgagor 'y 6udg"ent su'se+uent to the extra6udicial foreclosure sale& and hen they
initiated the present action on 2cto'er 1& 1986& the period of rede"ption had not yer
-e find appellants7 contention to be meritorious. In the case of Agbulos vs.
Alberto# A.1. 7o. B-1D:;0& pro"ulgated on Euly 01& 1962& ?e held9
$he property involved in the present case is registered land. !t is the law in this
=urisdiction that when property brought under the operation of the Land 9egistration
Act sold# the operative act is the registration of the deed of conveyance. $he deed
of sale does not ta.e effect this a conveyance or bind the land it is
registered. (<ection 80& ,ct :96/ 5uason vs. 1ay"undo& 2; Phil. 608/ <i!atuna vs.
Auevara& :0 Phil. 0D1/ ?orcester vs. 2ca"po& 0: Phil. 6:6) (("phasis supplied)
?e find no co"pelling reason to deviate fro" the afore+uoted ruling and not apply the
sa"e to the present case. 5o @s petitionersC "ain contention that there is a great deal of
difference in legislative intent in the use of the ords 9: auction sale$ in <ec. 01 of
Co""onealth ,ct :89 and the ord $sale$ in <ee. 02 of ,ct 290;& and <ee. 00 of 1ule 09
of the 1ules of Court& pales into insignificance in the light of 2ur stand that those ords
used interchangea'ly refer to one thing& and that is the pu'lic auction sale re+uired 'y la
in the disposition of properties foreclosed or levied upon. 2ur stand in the < case and
Statutory Construction Syllabus 1
in those "entioned therein (Aarcia vs. 2ca"po& A.1. 7o. B-10029& Eune 00& 1989/
Aon.ales et al. vs. Philippine 7ational >an! et al. :; Phil. ;2:) is fir"ly planted on the
pre"ise that registration of the deed of conveyance for properties 'rought under the
5orrens <yste" is the operative act to transfer title to the property and registration is also
the notice to the hole orld that a transaction involving the sa"e had ta!en place.
5o affir" the previous stand this Court has ta!en on the +uestion of hen the one year
period of rede"ption should start (fro" the ti"e of registration of the sale) ould 'etter
serve the ends of 6ustice and e+uity especially in this case& since to rule otherise ould
result in preventing the respondent-"ortgagor fro" redee"ing his 89.:6;D hectares of land
hich as ac+uired 'y the #evelop"ent >an! of the Philippines as the highest 'idder at
the auction sale for the lo price of only PD&2D1.22 hich as si"ply the unpaid 'alance of
the "ortgage de't of P22&000.00 after the respondent-"ortgagor had paid the su" of
P1:&D2;.D;. ,s it is& affir"ance of the ,ppellate CourtCs decision ould not result in any
loss to petitioners since the a"ount of PD&2D1.22 they paid to the >an! ill 'e returned to
Cthe". ?hat further strengthenCs 2ur stand is the fact found 'y the respondent ,ppellate
Court that respondent >arra"eda has alays 'een in possession of the disputed land.
I7 5%( BIA%5 2* 5%( *21(A2I7A& ?e find it no longer necessary to deter"ine hether
the petitioners are purchasers in good faith of the land involved& since the respondent
>arra"eda redee"ed the "ortgaged property ithin the legal period of rede"ption and&
conse+uently the sale of the property executed on <epte"'er 0& 1960& 'y the #evelop"ent
>an! of the Philippine in favor of the petitioners is null and void.
?%(1(*21(& the decision of the respondent ,ppellate Court is affir"ed& ith costs
against petitioners.

February 29, 1960)
5his is a petition for declaratory relief filed 'y petitioner 4anila Eoc!ey Clu'& Inc.& in the
Court of *irst Instance 4anila (Civil Case 7o. 012D:)& in hich the Philippine 1acing Clu'&
Inc.& intervened as party in interest ith leave of court& praying that 6udg"ent 'e rendered
against respondents Aa"es and ,"use"ents >oard (A,>)& Philippine Charity
<eepsta!es 2ffice (PC<2)& and (xecutive <ecretary *ortunato de Beon9
(a) Interpreting 1epu'lic ,cts 7os. 009 and 1802 in such a "anner that the 00 <undays
unreserved for charita'le institutions and therefore 'elonging to the private racing clu's
under <ection : of 1epu'lic ,ct 7o. 009 continue to pertain to said private entities& and
that the 6 additional seepsta!es races authori.ed under 1epu'lic ,ct 7o. 1802 should
'e held on 6 of the 12 <aturdays not reserved for any private entity or particular
charita'le institution under <ection : of 1epu'lic ,ct 7o. 009& or on any other day of the
ee! 'esides <unday& <aturday and legal holiday/
Statutory Construction Syllabus 1
(') %olding that respondent PC<2 does not have the right or poer to appropriate or
use the race trac!s and e+uip"ent of petitioner ithout its consent& nor can
respondents co"pel petitioner to so allo such use of its race trac!s and e+uip"ent
under pain of having its license revo!ed.
1espondents duly filed their respective ansers to said petition and the case as heard.
,fter hearing& the court& on Euly 8& 198D& rendered a decision hich& in part& reads9
5he court does not dee" it necessary to rule on the deprivation of property of the
petitioner and the intervenor ithout due process of la& as feared 'y the"& 'ecause as
they have stated& the Philippine Charity <eepsta!es 2ffice is using their pre"ises and
e+uip"ent under separate contracts of lease voluntarily and illingly entered into 'y the
parties upon pay"ent of a corresponding rental. 5here is therefore no deprivation of
property ithout due process of la.
?herefore& the court is of the opinion and so holds that once a "onth on a <unday not
reserved for the ,nti-5u'erculosis <ociety& the ?hite Cross and other charita'le
institutions 'y <ection : of 1epu'lic ,ct 7o. 009& the Philippine Charity <eepsta!es
2ffice is authori.ed to hold one regular seepsta!es dra and races& pursuant to
<ection 9 of 1epu'lic ,ct 7o. 1802& thus reducing the nu"'er of <undays hich "ay
'e alloted to private entities 'y the Aa"es and ,"use"ents >oard. . . .
*ro" this 6udg"ent& petitioner and intervenor interposed the present appeal.
5he issue is the proper place"ent of the six (6) additional racing days given to the
Philippine Charity <eepsta!es 2ffice& in virtue of 1epu'lic ,ct 7o. 1802& approved on
Eune 16& 1986.
5he authori.ed racing days specifically designated and distri'uted in <ection : of 1epu'lic
,ct 7o. 009& the 'asic la on horse racing in the Philippines& as later a"ended 'y 1epu'lic
,ct 7o. 9;0& are as follos9
,. <undays
(1) *or the Philippine ,nti-5u'erculosis 12 <undays
(2) *or the Philippine Charity <eepsta!es
2ffice (PC<2) .
6 <undays
(0) *or the ?hite Cross& Inc. : <undays
(:) *or the Arand #er'y 1ace of the Philippine
,nti-5u'erculosis <ociety
1 <unday
525,B 20 <undays
(8) *or private individuals and entities duly
licensed 'y the A,>& other <undays not
reserved under this ,ct& as "ay 'e deter"ined
'y the A,>
29 <undays
or 00 for Beap years
5otal for the year
82 <undays
2r 80 for leap years
>. <aturdays
(1) *or the Philippine ,nti-5u'erculosis <ociety 12 <aturdays
(2) *or the ?hite Cross& Inc. : <aturdays
(0) *or private Individuals and entities duly
licensed 'y A,> and as "ay 'e deter"ined 'y
2: <aturdays
Statutory Construction Syllabus 1
(:) *or races authori.ed 'y the President for
charita'le& relief& or civic purposes other than
the particular charita'le institutions na"ed
a'ove& all other <aturdays not reserved for the
12 <aturdays
525,B 80 <aturdays
C. Legal >olidays9 ,ll& except 5hursday and *riday of the %oly ?ee!& Euly :th and
#ece"'er 00th& have 'een reserved for private individuals and entities duly licensed
'y the A,>.
,s stated& 1epu'lic ,ct 7o. 1802 increased the seepsta!es dra and races of the PC<2
to telve& 'ut ithout specifying the days on hich they are to 'e run. 5o acco""odate
these additional races& the A,> resolved to reduce the nu"'er of <undays assigned to
private individuals and entities 'y six. ,ppellants protested& contending that the said
increased should 'e ta!en fro" the 12 <aturdays reserved to the President& for charita'le&
relief& or civic purposes& or should 'e assigned to any other day of the ee! 'esides
<unday& <aturday& and legal holiday.
,ppellantsC contention cannot 'e sustained. <ection : 1epu'lic ,ct 7o. 009& as a"ended
'y 1epu'lic ,ct 7o. 9;0& 'y express ter"s& specifically reserved 20 <undays and 16
<aturdays for the Philippine ,nti-5u'erculosis <ociety& the ?hite Cross& Inc. and the
PC<2& and 12 <aturdays to the President for other charita'le& relief& or civic purposes.
5hese days can not 'e disposed of 'y the A,> ithout authority of la. ,s to the re"aining
racing days& the la provides9
<(C. :. 9acing days.=Private individuals and entities duly licensed 'y the Co""ission
on 1aces (no A,>) "ay hold horse races on <undays not reserved under this ,ct& on
tenty-four <aturdays as "ay 'e deter"ined 'y the said Co""ission (A,>)& and on
legal holidays& except 5hursday and *riday of %oly ?ee!& Euly fourth& co""only !non
as Independence #ay& and #ece"'er thirtieth& co""only !non as #ay.
It is clear fro" the a'ove-+uoted provision that appellants have no vested right to the
unreserved <undays& or even to the 2: <aturdays (except& perhaps& on the holidays)&
'ecause their holding of races on these days is "erely per"issive& su'6ect to the licensing
and deter"ination 'y the A,>. ?hen& therefore& 1epu'lic ,ct 7o. 1802 as enacted
increasing 'y six (6) the seepsta!es dra and races& 'ut ithout specifying the days for
holding the"& the A,> had no alternative except to "a!e roo" for the additional races& as
it did& for" a"ong the only availa'le racing days unreserved 'y any la = the <undays on
hich the private individuals and entities have 'een per"itted to hold their races& su'6ect to
licensing and deter"ination 'y the A,>.
It is suggested that the A,> should have chosen any ee! days or <aturday afternoons. In
the first place& ee! days are out of the +uestion. 5he la does not authori.e the holding of
horse races ith 'etting on ee! days (<ee ,rticle 19; of the 1evised Penal Code).
<econdly& seepsta!es races have alays 'een held on <undays. >esides& it is not
possi'le to hold the" on <aturday afternoons as& it is clai"ed& a hole day is necessary for
the "ixing of the seepsta!es 'alls& the draing of inning seepsta!es nu"'ers& and the
running of the seepsta!es races. >e that as it "ay& since the la has given certain
a"ount of discretion to the A,> in deter"ining and allocating racing days not specifically
Statutory Construction Syllabus 1
reserved& and since the court does not find that a grave a'use of this discretion has 'een
co""itted& there see"s to 'e no reason& legal or otherise& to set aside the resolution of
the A,>.
*urther"ore& appellants contend that even granting that the six (6) additional seepsta!es
races should 'e run on <undays& yet if they are held on a clu' race day& the A,> should
only insert the" in the clu' races and not given the hole day to the PC<2& to the
exclusion of appellants. In support of this contention& the folloing +uotation fro" the
de'ate in the %ouse of 1epresentatives 'efore voting on %ouse >ill 7o. 8D02& hich
'eca"e 1epu'lic ,ct 7o. 1802& is cited9
4r. ,>(B(#,. If there are no "ore a"end"ents& I "ove that e vote on the "easure.
4r. 4,1C2<. 4r. <pea!er& 'efore e proceed to vote on this 'ill& I ant to "a!e it of
record that it is the clear intention of the >ouse to increase by two the ten regular and
special races it all in all# twelve# and that in cases where a race falls in a club race days the races should be inserted in
the club race.
4r. ,>(B(#,. 5he gentle"an fro" Ilocos 7orte is correct. . . . (t.s.n.& Proceedings in
%ouse of 1epresentatives& Congress& 4ay 1D& 1986/ e"phasis supplied.)
,ppellants cite in their 'riefs a nu"'er of authorities sustaining the vie that in the
interpretation of statutes suscepti'le of idely differing constructions& legislative de'ates
and explanatory state"ents 'y "e"'ers of the legislature "ay 'e resorted to& to thro
light on the "eaning of the ords used in the statutes. @pon the other hand& the appellees&
li!eise& +uote in their 'riefs other authorities to the effect that state"ents "ade 'y the
individual "e"'ers of the legislature as to the "eaning of provisions in the 'ill
su'se+uently enacted into la& "ade during the general de'ate on the 'ill on the floor of
each legislative house& folloing its presentation 'y a standing co""ittee& are generally
held to 'e in ad"issa'le as an aid in construing the statute. Begislative de'ates are
expressive of the vies and "otives of individual "e"'ers and are not safe guides and&
hence& "ay not 'e resorted to in ascertaining the "eaning and purpose of the la"a!ing
'ody. It is i"possi'le to deter"ine ith certainty hat construction as put upon an act 'y
the "e"'ers of the legislative 'ody that passed the 'ill& 'y resorting to the speeches of the
"e"'ers thereof. 5hose ho did not spea!& "ay not have agreed ith those ho did/ and
those ho spo!e& "ight differ fro" each other.
In vie of these conflicting authorities& no apprecia'le reliance can safely 'e placed on any
of the". It is to 'e noted in the specific case 'efore us& that hile Congress"en 4arcos
and ,'eleda ere& ad"ittedly& of the vie that the additional seepsta!es races "ay 'e
inserted in the clu' races& still there is nothing in 1epu'lic ,ct 7o. 1802& as it as finally
enacted& hich ould indicate that such an understanding on the part of these to
"e"'ers of the Boer %ouse of Congress ere received the sanction or confor"ity of their
colleagues& for the la is a'solutely devoid of any such indication. 5his is& therefore& not a
case here a dou'tful ording is sought to 'e interpreted/ rather& if e adopt appellantsC
theory& e ould 'e supplying so"ething that does not appear in the statute. It is pertinent
to o'serve here that& as pointed out 'y one of appellantsC on cited authorities&
in the
interpretation of a legal docu"ent& especially a statute& unli!e in the interpretation of an
ordinary ritten docu"ent& it is not enough to o'tain infor"ation to the intention or "eaning
of the author or authors& 'ut also to see hether the intention or "eaning has 'een
expressed in such a ay as to give it legal effect and validity. In short& the purpose of the
in+uiry& is not only to !no hat the author "eant 'y the language he used& 'ut also to see
Statutory Construction Syllabus 1
that the language used sufficiently expresses that "eaning. 5he legal act& so to spea!& is
"ade up of to ele"ents = an internal and an external one/ it originates in intention and is
perfected 'y expression. *ailure of the latter "ay defeat the for"er. 5he folloing& ta!en
fro" 89 Corpus Euris 101D& is in the line ith this theory9
5he intention of the legislature to hich effect "ust 'e given is that expressed in the
statute and the courts ill not in+uire into the "otives hich influence the legislature& or
individual "e"'ers& in voting for its passage/ nor indeed as to the intention of the
drafts"an& or the legislature& so far as it has 'een expressed in the act. <o& in
ascertaining the "eaning of a statute the court ill not 'e governed or influenced 'y the
vies or opinions of any or all "e"'ers of the legislature or its legislative co""ittees or
any other persons.
@pon the other hand& at the ti"e of the enact"ent of 1epu'lic ,ct 7o. 1802 in Eune& 1986&
the long& continuous& and unifor" practice as that all seepsta!es dras and races ere
held on <undays and during the hole day. ?ith this 'ac!ground& hen Congress chose
not to specify in express ter"s ho the additional seepsta!es dras and races ould 'e
held& it is safe to conclude that it did not intend to distur' the then prevailing situation and
$2n the principle of conte"poraneous exposition& co""on usage and practice under the
statute& or a course of conduct indicating a particular underta!ing of it& ill fre+uently 'e of
great value in deter"ining its real "eaning& especially here the usage has 'een ac+uired
in 'y all parties concerned and has extended over a long period of ti"e/ . . . (89 C. E.
Bi!eise& the language of 1epu'lic ,ct 7o. 1802 in the increase& clearly spea!s
of regular seepsta!es dras and races. If the intention of Congress ere to authori.e
additional seepsta!es dras only hich could& ad"ittedly& 'e inserted in the clu' races&
the la ould not have included regular races/ and since regular seepsta!es races ere
specifically authori.ed& and it ould 'e confusing& inconvenient& if not i"possi'le to "ix
these seepsta!es races ith the regular clu' races all on the sa"e day (and it has never
'een done 'efore)& the conclusion see"s inevita'le that the additional seepsta!es dras
and races ere intended to 'e held on a hole day& separate and apart fro" the clu'
,ppellantsC contention that to co"pel the" to per"it the PC<2 to use their pre"ises and
e+uip"ent against their ill ould constitute deprivation of property ithout due process of
la& deserves no serious consideration. ,s the loer court has found& every ti"e the PC<2
uses appellantsC pre"ises and e+uip"ent& they are paid rentals in accordance ith the
ter"s of separate contracts of lease existing 'eteen the" and the PC<2.
5he decision appealed fro"& 'eing in consonance ith the a'ove findings and
considerations of this Court& the sa"e is here'y affir"ed& ith costs against the appellants.
<o ordered.

III. Power to Construe, where
Statutory Construction Syllabus 1
IV. Liitations to Power to
ENDENCIA vs. DAVID (G.R. No. L-6355-56, August 31,
5his is a 6oint appeal fro" the decision of the Court of *irst Instance of 4anila declaring
section 10 of 1epu'lic ,ct 7o. 890 unconstitutional& and ordering the appellant <aturnino
#avid as Collector of Internal 1evenue to re-fund to Eustice Pastor 4. (ndencia the su" of
P1&D::.:8& representing the inco"e tax collected on his salary as ,ssociate Eustice of the
Court of ,ppeals in 1981& and to Eustice *ernando Eugo the a"ount of P2&0:8.:6&
representing the inco"e tax collected on his salary fro" Eanuary 1&1980 to 2cto'er 19&
1980& as Presiding Eustice of the Court of ,ppeals& and fro" 2cto'er 20& 1980 to
#ece"'er 01&1980& as ,ssociate Eustice of the <upre"e Court& ithout special
pronounce"ent as to costs.
>ecause of the si"ilarity of the to cases& involving as they do the sa"e +uestion of la&
they ere 6ointly su'"itted for deter"ination in the loer court. Eudge %iginio >. 4acadaeg
presiding& in a rather exhaustive and ell considered decision found and held that under
the doctrine laid don 'y this Court in the case of Perfecto vs. 4eer& ;8 Phil.& 882& the
collection of inco"e taxes fro" the salaries of Eustice Eugo and Eustice (ndencia as a
di"inution of their co"pensation and therefore as in violation of the Constitution of the
Philippines& and so ordered the refund of said taxes.
?e see no profit and necessity in again discussing and considering the proposition and the
argu"ents pro and cons involved in the case of Perfecto vs. 4eer& supra& hich are raised&
'rought up and presented here. In that case& e have held despite the ruling enunciated 'y
the @nited <tates *ederal <upre"e Court in the case of 2 C4alley vs. ?oodrought 00D @.
<.& 2DD& that taxing the salary of a 6udicial officer in the Philippines is a di"inution of such
salary and so violates the Constitution. ?e shall no confine our-selves to a discussion
and deter"ination of the re"aining +uestion of hether or not 1epu'lic ,ct 7o. 890&
particularly section 10& can 6ustify and legali.e the collection of inco"e tax on the salary of
6udicial officers
,ccording to the 'rief of the <olicitor Aeneral on 'ehalf of appellant Collector of Internal
1evenue& our decision in the case of Perfecto vs. 4eer& supra& as not received favora'ly
'y Congress& 'ecause i""ediately after its pro"ulgation& Congress enacted 1epu'lic ,ct
7o. 890. 5o 'ring ho"e his point& the <olicitor Aeneral reproduced hat he considers the
pertinent discussion in the Boer %ouse of %ouse >ill 7o. 112D hich 'eca"e 1epu'lic ,ct
7o. 890.
*or purposes of reference& e are reproducing section 9& ,rticle 3III of our Constitution9.
<(C. 9. 5he "e"'ers of the <upre"e Court and all 6udges of inferior courts shall hold
office during good 'ehavior& until they reach the age of seventy years& or 'eco"e
incapacitated to discharge the duties of their office. 5hey shall receive such
Statutory Construction Syllabus 1
co"pensation as "ay 'e fixed 'y la& which shall not be diminished during their
continuance in office. @ntil the Congress shall provide otherise& the Chief Eustice of
the <upre"e Court shall receive an annual co"pensation of sixteen thousand pesos&
and each ,ssociate Eustice& fifteen thousand pesos.
,s already stated construing and applying the a'ove constitutional provision& e held in the
Perfecto case that 6udicial officers are exe"pt fro" the pay"ent of inco"e tax on their
salaries& 'ecause the collection thereof 'y the Aovern"ent as a decrease or di"inution
of their salaries during their continuance in office& a thing hich is expressly prohi'ited 'y
the Constitution. 5hereafter& according to the <olicitor Aeneral& 'ecause Congress did not
favora'ly receive the decision in the Perfecto case& Congress pro"ulgated 1epu'lic ,ct
7o. 890& if not to counteract the ruling in that decision& at least no to authori.e and
legali.e the collection of inco"e tax on the salaries of 6udicial officers. ?e +uote section 10
of 1epu'lic ,ct 7o. 8909
<(C 10. 7o salary herever received 'y any pu'lic officer of the 1epu'lic of the
Philippines shall 'e considered as exe"pt fro" the inco"e tax& pay"ent of hich is
here'y declared not to 'e di"unition of his co"pensation fixed 'y the Constitution or 'y
<o e have this situation. 5he <upre"e Court in a decision interpreting the Constitution&
particularly section 9& ,rticle 3III& has held that 6udicial officers are exe"pt fro" pay"ent of
inco"e tax on their salaries& 'ecause the collection thereof as a di"inution of such
salaries& specifically prohi'ited 'y the Constitution. 7o co"es the Begislature and in
section 10& 1epu'lic ,ct 7o. 890& says that $no salary herever received 'y any pu'lic
officer of the 1epu'lic (naturally including a 6udicial officer) shall 'e considered as exe"pt
fro" the inco"e tax&$ and proceeds to declare that pay"ent of said inco"e tax is not a
di"inution of his co"pensation. Can the Begislature validly do thisI 4ay the Begislature
lafully declare the collection of inco"e tax on the salary of a pu'lic official& specially a
6udicial officer& not a decrease of his salary& after the <upre"e Court has found and decided
otheriseI 5o deter"ine this +uestion& e shall have to go 'ac! to the funda"ental
principles regarding separation of poers.
@nder our syste" of constitutional govern"ent& the Begislative depart"ent is assigned the
poer to "a!e and enact las. 5he (xecutive depart"ent is charged ith the execution of
carrying out of the provisions of said las. >ut the interpretation and application of said
las 'elong exclusively to the Eudicial depart"ent. ,nd this authority to interpret and apply
the las extends to the Constitution. >efore the courts can deter"ine hether a la is
constitutional or not& it ill have to interpret and ascertain the "eaning not only of said la&
'ut also of the pertinent portion of the Constitution in order to decide hether there is a
conflict 'eteen the to& 'ecause if there is& then the la ill have to give ay and has to
'e declared invalid and unconstitutional.
#efining and interpreting the la is a 6udicial function and the legislative 'ranch "ay not
li"it or restrict the poer granted to the courts 'y the Constitution. (>andy vs. 4ic!elson
et al.& ::7. ?.& 2nd 0:1& 0:2.)
?hen it is clear that a statute transgresses the authority vested in the legislature 'y the
Constitution& it is the duty of the courts to declare the act unconstitutional 'ecause they
cannot shrin! fro" it ithout violating their oaths of office. 5his duty of the courts to
"aintain the Constitution as the funda"ental la of the state is i"perative and
unceasing/ and& as Chief Eustice 4arshall said& henever a statute is in violation of the
funda"ental la& the courts "ust so ad6udge and there'y give effect to the Constitution.
Statutory Construction Syllabus 1
,ny other course ould lead to the destruction of the Constitution. <ince the +uestion
as to the constitutionality of a statute is a 6udicial "atter& the courts ill not decline the
exercise of 6urisdiction upon the suggestion that action "ight 'e ta!en 'y political
agencies in disregard of the 6udg"ent of the 6udicial tri'unals. (11 ,". Eur.& D1:-D18.)
@nder the ,"erican syste" of constitutional govern"ent& a"ong the "ost i"portant
functions in trusted to the 6udiciary are the interpreting of Constitutions and& as a closely
connected poer& the deter"ination of hether las and acts of the legislature are or
are not contrary to the provisions of the *ederal and <tate Constitutions. (11 ,". Eur.&
>y legislative fiat as enunciated in section 10& 1epu'lic ,ct 72. 890& Congress says that
taxing the salary of a 6udicial officer is not a decrease of co"pensation. 5his is a clear
exa"ple of interpretation or ascertain"ent of the "eaning of the phrase $hich shall not 'e
di"inished during their continuance in office&$ found in section 9& ,rticle 3III of the
Constitution& referring to the salaries of 6udicial officers. 5his act of interpreting the
Constitution or any part thereof 'y the Begislature is an invasion of the ell-defined and
esta'lished province and 6urisdiction of the Eudiciary.
5he rule is recogni.ed elsehere that the legislature cannot pass any declaratory act&
or act declaratory of hat the la as 'efore its passage& so as to give it any 'inding
eight ith the courts. , legislative definition of a ord as used in a statute is not
conclusive of its "eaning as used elsehere/ otherise& the legislature ould 'e
usurping a 6udicial function in defining a ter". (11 ,". Eur.& 91:& e"phasis supplied)
5he legislature cannot& upon passing a la hich violates a constitutional provision&
validate it so as to prevent an attac! thereon in the courts& by a declaration that it shall
be so construed as not to violate the constitutional inhibition. (11 ,". Eur.& 919&
e"phasis supplied)
?e have already said that the Begislature under our for" of govern"ent is assigned the
tas! and the poer to "a!e and enact las& 'ut not to interpret the". 5his is "ore true ith
regard to the interpretation of the 'asic la& the Constitution& hich is not ithin the sphere
of the Begislative depart"ent. If the Begislature "ay declare hat a la "eans& or hat a
specific portion of the Constitution "eans& especially after the courts have in actual case
ascertain its "eaning 'y interpretation and applied it in a decision& this ould surely cause
confusion and insta'ility in 6udicial processes and court decisions. @nder such a syste"& a
final court deter"ination of a case 'ased on a 6udicial interpretation of the la of the
Constitution "ay 'e under"ined or even annulled 'y a su'se+uent and different
interpretation of the la or of the Constitution 'y the Begislative depart"ent. 5hat ould 'e
neither ise nor desira'le& 'esides 'eing clearly violative of the funda"ental& principles of
our constitutional syste" of govern"ent& particularly those governing the separation of
<o "uch for the constitutional aspect of the case. Considering the practical side thereof&
e 'elieve that the collection of inco"e tax on a salary is an actual and evident di"inution
thereof. @nder the old syste" here the in-co"e tax as paid at the end of the year or
so"eti"e thereafter& the decrease "ay not 'e so apparent and clear. ,ll that the official
ho had previously received his full salary as called upon to do& as to fulfill his
o'ligation and to exercise his privilege of paying his inco"e tax on his salary. %is salary
fixed 'y la as received 'y hi" in the a"ount of said tax co"es fro" his other sources of
inco"e& he "ay not fully reali.e the fact that his salary had 'een decreased in the a"ount
of said inco"e tax. >ut under the present syste" of ithholding the inco"e tax at the
Statutory Construction Syllabus 1
source& here the full a"ount of the inco"e tax corresponding to his salary is co"puted in
advance and divided into e+ual portions corresponding to the nu"'er of pay-days during
the year and actually deducted fro" his salary corresponding to each payday& said official
actually does not receive his salary in full& 'ecause the inco"e tax is deducted therefro"
every payday& that is to say& tice a "onth. Bet us ta!e the case of Eustice (ndencia. ,s
,ssociate Eustice of the Court of ,ppeals& his salary is fixed at p12&000 a year& that is to
say& he should receive P1&000 a "onth or P800 every payday& = fifteenth and end of
"onth. In the present case& the a"ount collected 'y the Collector of Internal 1evenue on
said salary is P1&D::.:8 for one year. #ivided 'y telve ("onths) e shall have P1:8.0D a
"onth. ,nd further dividing it 'y to paydays ill 'ring it don to PD2.6;8& hich is the
inco"e tax deducted for" the collected on his salary each half "onth. <o& if Eustice
(ndenciaCs salary as a 6udicial officer ere not exe"pt fro" pay"ent of the inco"e tax&
instead of receiving P800 every payday& he ould 'e actually receiving P:2D.01 only& and
instead of receiving P12&000 a year& he ould 'e receiving 'ut P10&288.88. Is it not therefor
clear that every payday& his salary is actually decreased 'y PD2.6;8 and every year is
decreased 'y P1&D::.:8I
1eading the discussion in the loer %ouse in connection ith %ouse >ill 7o. 112D& hich
'eca"e 1epu'lic ,ct 7o. 890& it ould see" that one of the "ain reasons 'ehind the
enact"ent of the la as the feeling a"ong certain legislators that "e"'ers of the
<upre"e Court should not en6oy any exe"ption and that as citi.ens& out of patriotis" and
love for their country& they should pay inco"e tax on their salaries. It "ight 'e stated in this
connection that the exe"ption is not en6oyed 'y the "e"'ers of the <upre"e Court alone
'ut also 'y all 6udicial officers including Eustices of the Court of ,ppeals and 6udges of
inferior courts. 5he exe"ption also extends to other constitutional officers& li!e the
President of the 1epu'lic& the ,uditor Aeneral& the "e"'ers of the Co""ission on
(lections& and possi'ly "e"'ers of the >oard of 5ax ,ppeals& co""issioners of the Pu'lic
<ervice Co""ission& and 6udges of the Court of Industrial 1elations. Co"pares to the
nu"'er of all these officials& that of the <upre"e Court Eustices is relatively insignificant.
5here are "ore than 990 other 6udicial officers en6oying the exe"ption& including 18
Eustices of the Court of ,ppeals& a'out 10D Eudges of *irst Instance& 0; 4unicipal Eudges
and a'out ;00 Eustices of the Peace. 5he reason 'ehind the exe"ption in the Constitution&
as interpreted 'y the @nited <tates *ederal <upre"e Court and this Court& is to preserve
the independence of the Eudiciary& not only of this %igh 5ri'unal 'ut of the other courts&
hose present "e"'ership nu"'er "ore than 990 6udicial officials.
5he exe"ption as not pri"arily intended to 'enefit 6udicial officers& 'ut as grounded on
pu'lic policy. ,s said 'y Eustice 3an #evanter of the @nited <tates <upre"e Court in the
case of (vans vs. Aore (280 @. <.& 2:8)9
5he pri"ary purpose of the prohi'ition against di"inution as not to 'enefit the 6udges&
'ut& li!e the clause in respect of tenure& to attract good and co"petent "en to the
'ench and to pro"ote that independence of action and 6udg"ent hich is essential to
the "aintenance of the guaranties& li"itations and pervading principles of the
Constitution and to the ad"inistration of 6ustice ithout respect to person and ith e+ual
concern for the poor and the rich. <uch 'eing its purpose& it is to 'e construed& not as a
private grant& 'ut as a li"itation i"posed in the pu'lic interest/ in other ords& not
restrictively& 'ut in accord ith its spirit and the principle on hich it proceeds.
%aving in "ind the li"ited nu"'er of 6udicial officers in the Philippines en6oying this
exe"ption& especially hen the great 'ul! thereof are 6ustices of the peace& "any of the"
receiving as lo as P200 a "onth& and considering further the other exe"ptions alloed 'y
the inco"e tax la& such as P0&000 for a "arried person and P600 for each dependent& the
Statutory Construction Syllabus 1
a"ount of national revenue to 'e derived fro" inco"e tax on the salaries of 6udicial
officers& ere if not for the constitutional exe"ption& could not 'e large or su'stantial. >ut
even if it ere otherise& it should not affect& "uch less outeigh the purpose and the
considerations that pro"pted the esta'lish"ent of the constitutional exe"ption. In the
sa"e case of 'vans vs. *ore# supra& the *ederal <upre"e Court declared $that they
(fathers of the Constitution) regarded the independence of the 6udges as far as greater
i"portance than any revenue that could co"e fro" taxing their salaries.
?hen a 6udicial officer assu"ed office& he does not exactly as! for exe"ption fro"
pay"ent of inco"e tax on his salary& as a privilege . It is already attached to his office&
provided and secured 'y the funda"ental la& not pri"arily for his 'enefit& 'ut 'ased on
pu'lic interest& to secure and preserve his independence of 6udicial thought and action.
?hen e co"e to the "e"'ers of the <upre"e Court& this exce"ption to the" is relatively
of short duration. >ecause of the li"ited "e"'ership in this %igh 5ri'unal& eleven& and due
to the high standards of experience& practice and training re+uired& one generally enters its
portals and co"es to 6oin its "e"'ership +uite late in life& on the aver-age& around his
sixtieth year& and 'eing re+uired to retire at seventy& assu"ing that he does not die or
'eco"e incapacitated earlier& naturally he is not in a position to receive the 'enefit of
exe"ption for long. It is rather to the 6ustices of the peace that the exe"ption can give
"ore 'enefit. 5hey are relatively "ore nu"erous& and 'ecause of the "eager salary they
receive& they can less afford to pay the inco"e tax on it and its di"inution 'y the a"ount of
the inco"e tax if paid ould 'e real& su'stantial and onerous.
Considering exe"ption in the a'stract& there is nothing unusual or a'horrent in it& as long
as it is 'ased on pu'lic policy or pu'lic interest. ?hile all other citi.ens are su'6ect to arrest
hen charged ith the co""ission of a cri"e& "e"'ers of the <enate and %ouse of
1epresentatives except in cases of treason& felony and 'reach of the peace are exe"pt
fro" arrest& during their attendance in the session of the Begislature/ and hile all other
citi.ens are generally lia'le for any speech& re"ar! or state"ent& oral or ritten& tending to
cause the dishonor& discredit or conte"pt of a natural or 6uridical person or to 'lac!en the
"e"ory of one ho is dead& <enators and Congress"en in "a!ing such state"ents
during their sessions are extended i""unity and exe"ption.
,nd as to tax exe"ption& there are not a fe citi.ens ho en6oy this exe"ption. Persons&
natural and 6uridical& are exe"pt fro" taxes on their lands& 'uildings and i"prove"ents
thereon hen used exclusively for educational purposes& even if they derive inco"e
therefro". (,rt. 3I& <ec. 22 G0H.) %olders of govern"ent 'onds are exe"pted fro" the
pay"ent of taxes on the inco"e or interest they receive therefro" (sec. 29 (') G:H& 7ational
Internal 1evenue Code as a"ended 'y 1epu'lic ,ct 7o. 866). Pay"ents or inco"e
received 'y any person residing in the Philippines under the las of the @nited <tates
ad"inistered 'y the @nited <tates 3eterans ,d"inistration are exe"pt fro" taxation.
(1epu'lic ,ct 7o. 060). *unds received 'y officers and enlisted "en of the Philippine ,r"y
ho served in the ,r"ed *orces of the @nited <tates& alloances earned 'y virtue of such
services corresponding to the taxa'le years 19:2 to 19:8& inclusive& are exe"pted fro"
inco"e tax. (1epu'lic ,ct 7o. 210). 5he pay"ent of ages and alloances of officers and
enlisted "en of the ,r"y *orces of the Philippines sent to Jorea are also exe"pted fro"
taxation. (1epu'lic ,ct 7o. 08). In other ords& for reasons of pu'lic policy and pu'lic
interest& a citi.en "ay 6ustifia'ly 'y constitutional provision or statute 'e exe"pted fro" his
ordinary o'ligation of paying taxes on his inco"e. @nder the sa"e pu'lic policy and
perhaps for the sa"e it not higher considerations& the fra"ers of the Constitution dee"ed it
ise and necessary to exe"pt 6udicial officers fro" paying taxes on their salaries so as not
to decrease their co"pensation& there'y insuring the independence of the Eudiciary.
Statutory Construction Syllabus 1
In conclusion e reiterate the doctrine laid don in the case of )erfecto vs. +eer# supra& to
the effect that the collection of inco"e tax on the salary of a 6udicial officer is a di"inution
thereof and so violates the Constitution. ?e further hold that the interpretation and
application of the Constitution and of statutes is ithin the exclusive province and
6urisdiction of the Eudicial depart"ent& and that in enacting a la& the Begislature "ay not
legally provide therein that it 'e interpreted in such a ay that it "ay not violate a
Constitutional prohi'ition& there'y tying the hands of the courts in their tas! of later
interpreting said statute& specially hen the interpretation sought and provided in said
statute runs counter to a previous interpretation already given in a case 'y the highest
court of the land.
In the vies of the foregoing considerations& the decision appealed fro" is here'y affir"ed&
ith no pronounce"ent as to costs.

QUIMPO vs. MENDOZA (G.R. No. L-33052, August 31,

5his is a petition to revie on certiorari the decision rendered 'y the Court of *irst Instance
of 4isa"is 2riental& >ranch I3& dis"issing the suit for "anda"us and da"ages filed 'y
herein petitioner ,ngel 1. Lui"po against herein respondent Beoncio 4endo.a& as
5reasurer of the City of Cagayan de 2ro and in his personal capacity.
5he 'ac!ground facts are stated in the decision of the loer court& thus9
Petitioner ,ngel Lui"po is the oner of a 'uilding located in Cagayan de 2ro City
assessed at P20&000.00 for 1969 under 5ax #eclaration 7o. 2102. 5he realty tax of said
'uilding is P:00.00 yearly paya'le in four e+ual install"ents& the first install"ent to 'e
paid on or 'efore 4arch 01. 5he second install"ent& on or 'efore Eune 00/ the third
install"ent& on or 'efore <epte"'er 00/ and the last install"ent& on or 'efore #ece"'er
01. (<ec. :& 1, 8::D).
Petitioner paid on ti"e the first three install"ents a"ounting to P000.00& 'ut ith
respect to the last install"ent of P100.00 hich as to 'e paid on or 'efore #ece"'er
01& it as only on ,ugust 2D& 19D0 that he tendered the a"ount of P12:.00& hich
covered& according to his co"putation& the tax or last install"ent of P100.00 and the
penalty of P2:.00 to herein respondent City 5reasurer of Cagayan de 2ro& ho refused
the pay"ent insisting that petitioner ought to pay the last install"ent of P100.00 plus
the penalty of P96.00 or a total of P196.00 (<tipulations& pars. 0 K :) 'ased on and
co"puted according to <ection :2 of the City Charter of Cagayan de 2ro 1, 821) and
the Provincial Circular 7o. 1;-6: dated Euly 1D& 196: of the <ecretary of *inance
((xhi'it 2 and <tipulations& par. D).
2n <epte"'er 2& 19D0 petitioner deposited 'y ay of consignation the a'ove-
"entioned a"ount of P12:.00 ith the Cler! of Court (<tipulations& par. 8) and
instituted the instant action of "anda"us& ith da"ages& against herein respondent
City 5reasurer in his official as ell as personal capacity& praying for 6udg"ent9
Statutory Construction Syllabus 1
1. 21#(1I7A the respondent to accept the pay"ent of taxes for the last install"ent
and the penalty therefor in the a"ount of 27( %@7#1(# 5?(75F *2@1 (Pl2:.00)/
2. 21#(1I7A the respondent to issue the official receipt for the final pay"ent of the
taxes for 1969& and a tax clearance certificate/
0. #(CB,1I7A the act of the respondent in i"posing the penalty on the full a"ount of
the tax even if the late pay"ent as only on the last install"ent as illegal& un6ust&
i""oral and oppressive/
:. 21#(1I7A respondent in his personal capacity& to pay da"ages in the total a"ount
of 5?(B3( 5%2@<,7# P(<2< (Pl2&000.00)& 'y ay of actual "oral& exe"plary
da"ages& and attorneys fees& and costs/
8. 21#(1I7A such 6ust and e+uita'le reliefs and re"edies under the pre"ises.
5he court 'elo sustained the City 5reasurer& relying on the "ain opinion of this 5ri'unal in
the case of )adilla vs. ity of )asay and ity $reasurer (B-2:009& Eune 29& 196;& 20 <C1,
5he decision under revie states9
5he la i"poses only one annual real estate tax (plus the additional tax under 1,
8::D). 5his tax is due and paya'le only once& on or 'efore 4arch 01 of every year.
>efore the effectivity of 1, 8::D the taxpayer as given the option to pay the tax in to
install"ents& the first on or 'efore 4ay 01& and the second on or 'efore 2cto'er 00th.
5he pay"ent in to install"ents as a privilege extended to the taxpayer for his
acco""odation and convenience. ?ith the i"position of the additional tax of one per
centum on the assessed value of real property in addition to the real property tax
regularly levied thereon the a"ount of the tax shouldered 'y the taxpayer has
practically 'een dou'led& and it is for this reason& to the "ind of the Court& that the ne
la no allos hi" to pay his real tax in four e+ual install"ents instead of only to.
5here is only one tax& paya'le in four e+ual install"ents on specified dates/ not four
different taxes& each ith a different due date. ....
,ccordingly& the Court concludes that the ruling of the <upre"e Court in the a'ove-
"entioned )adilla caseapplies s+uarely to the case at 'ar. %ence& the tax lia'ility of
petitioner is P100.00& corresponding to the unpaid last install"ent& plus P96.00
co"puted at 2M of the original tax of P:00.00 for every full "onth of delin+uency 'ut
not to exceed 2:M fro" ,pril& 1969 to Euly 19D0.
5he loer court further held that it as ithout authority to entertain the suit for failure of
petitioner to co"ply ith the provisions of the Charter of Cagayan de 2ro (1epu'lic ,ct 7o.
821) on pay"ent of tax under protest.
,gainst the foregoing 6udg"ent& petitioner assigns the folloing errors9
1. 1espondent Eudge erred hen he ruled that under <ection :& 1.,. 8::D& the
install"ents for the 'asic and additional real property tax have only one due date 'ut
are paya'le in four e+ual install"ents
2. 1espondent Eudge erred in ruling that on the +uestion of the i"position of the tax
penalty& said penalty "ust first 'e paid under protest 'efore the suit can prosper/ and
Statutory Construction Syllabus 1
0. 1espondent Eudge erred in ruling that the error of respondent City 5reasurer& if any&
arose fro" an honest interpretation of the la or their "eaning& and therefore no
da"ages can 'e aarded.
In resolving the first assign"ent of error& it is ell to set forth the pertinent provisions of la&
1.,. 821 (Charter of Cagayan de 2ro City)& to it9
<ection :2. 5axes on real estate. , tax& the rate of hich shall not exceed to per
centu" ad valore" to 'e deter"ined 'y the 4unicipal >oard& shall 'e levied annually
on or 'efore the second 4onday of Eanuary on the assessed value of all real estate in
the city su'6ect to taxation. ,ll taxes on real estate for any year shall 'e due and
payable annually on the first day of ?une# and fro" this date such taxes together ith all
penalties accruing thereto shall constitute a lien on the property su'6ect to such
xxx xxx xxx
At the option of the taxpayer# the tax for any year may be paid in two installments to 'e
fixed annually 'y the 4unicipal >oard si"ultaneously ith the rate per centu" of ad
valore" taxation/ Provided& 5hat the time limit for the first and second installments shall be
set at not later than the thirty first day of +ay and the thirtieth day of @ctober of each year#
xxx xxx xxx
,t the expiration of the ti"e for the pay"ent of the real estate tax ithout penalty& the
taxpayer shall 'e su'6ect& fro" the first day of delin+uency& to the pay"ent of a penalty at
the rate of two per centum for each full month of delinquency that has expired# on the
amount of the original tax due# until the tax shall have 'een paid in full or until the property
shall have 'een forfeited to the city as provided in this ,ct9 Provided& 5hat in no case shall
the total penalty exceed tenty-four per centu" of the original tax due.
xxx xxx xxx
2n Eanuary 1& 1969& 1epu'lic ,ct 7o. 8::D too! effect& i"posing an additional tax on real
property and providing&inter alia& that $the pertinent provisions of the corresponding
charters of chartered cities to the contrary notwithstanding# the basic and the additional
property tax shall be due and payable in four equal installments8 the first install"ent shall
'e due and paya'le on or 'efore 4arch 01/ the second install"ent& on or 'efore Eune 00/
the third install"ent& on or 'efore <epte"'er 00/ and the last install"ent on or 'efore
#ece"'er 01.$
Petitioner contends that 1.,. 8::D explicitly a"ended the respective city charters& including
1.,. 821& 'y providing that the real property tax no 'eco"es due in four e+ual
install"ents and 'eco"es payable in four e+ual install"ents/ that the ter" $original tax
due$ in 1.,. 821 is only proper if the tax has one due date and is paya'le in to or "ore
install"ents/ and& that 1.,. 8::D& having 'een enacted after the )adilla case relied upon
'y respondent court& as o'viously intended to cure the harsh 'ut "andatory la as
interpreted in said decision.
?e agree ith petitioner that& contrary to the conclusion of the loer court& the
afore"entioned )adilla case does not apply s+uarely to the case at 'ar.
In )adilla& the applica'le la as 1epu'lic ,ct 7o. 1;0& otherise !non as the Charter of
the City of Pasay. 5herein petitioner 5eodoro Padilla paid the first install"ent of his 1960
Statutory Construction Syllabus 1
real property tax on ti"e 'ut paid his second install"ent only on #ece"'er 20& 1960&
instead of 2cto'er 00 of the sa"e year& as re+uired 'y 1.,. 1;0. 5his Court held that his
delin+uency penalty should 'e 'ased on the a"ount of the original tax due& and co"puted
fro" Eune first
hen said tax 'eca"e due and paya'le. ?e +uote 'elo the pertinent
portions of the decision as follos9
In appellantCs 'rief& it is su'"itted that the taxpayer having 'een given an option to pay
his realty tax in to install"ents and the appellant having paid ithin the per"issi'le
period& the first install"ent& he could not 'e considered delin+uent insofar as the first
half of the realty tax is due. %is delin+uency should date only fro" 7ove"'er 1& 1960
'y virtue of his failure to pay on 2cto'er 00 of the sa"e year. *or appellant& it is
inconclusive $ho he can 'e declared delin+uent fro" Eune 1& 1960 since the second
install"ent of his real estate tax as not yet due on that date 'ut ill have 'eco"e due
and paya'le only on the thirtieth of 2cto'er 1960$. 5he decision then& according to
appellant& $negates the taxpayerCs option to pay his realty tax in to (2) install"ents as
expressly granted$ 'y la and a"ounted to unarranty 6udicial legislation.
,ppellantCs theory is not inherently i"plausi'le. 7onetheless& it "ust yield to the specific
language of the la hich is controlling. 5he last sentence of the first paragraph of the
controlling legal provision reads thus9 $,ll taxes on real estate for any year shag 'e due
and paya'le annually on the first day of Eune and fro" this date such taxes together
ith all penalties accruing thereto shall constitute a lien on the property su'6ect to such
taxation. 5o paragraphs later& the taxpayer is given the option to pay Cin to
install"ents to 'e fixed annually 'y the 4unicipal >oard si"ultaneously ith the rate
per centu" ad valore" taxation9$ Provided& 5hat the ti"e li"it for the first and second
install"ents shall 'e set at not later than the thirty-first day of 4ay and the thirtieth day
of 2cto'er of each year& respectively.C 5hen co"es the provision as to the penalty to 'e
i"posed in case of delin+uency and ho to fix the sa"e9 ,t the expiration of the ti"e for
the pay"ent of the real estate tax ithout penalty& the taxpayer shall 'e su'6ect& fro"
the first day of delin+uency& to the pay"ent of a penalty at the rate of to per centu" for
each fun "onth of delin+uency that has expired& on the a"ount of the original tax due&
until the tax shall have 'een paid in fun or until the property shall have 'een forfeited to
the city as provided in this ,C59 Provided& 5hat in no case shall the total penalty exceed
tenty- four per centu" of the original tax due.
Construed together& the a'ove provisions yield no other conclusion 'ut that the taxes
are due and paya'le Con the first day of EuneC fro" hich date Csuch taxes together ith
all penalties accruing thereto shall constitute a lien on the property su'6ect to such
taxation. It is true the taxpayer is given the option to pay in to install"ents ith the
respective dates for the pay"ent thereof Cat not later than the thirty-first day of 4ay and
the thirtieth day of 2cto'er of each year& respectively.C 5hen co"es the crucial and
decisive provision. C,t the expiration of the ti"e for the pay"ent of the real estate tax
ithout penalty& the taxpayer shall 'e su'6ect& fro" the first day of delin+uency& to the
pay"ent of a penalty at the rate of to per centu" for each full "onth of delin+uency
that has expired& on the a"ount of the original tax due& until the tax shall have 'een
paid in full or until the property shall have 'een forfeited to the city N
5he la is specific and "andatory. It calls for application as thus orded. 5here is no
roo" for interpretation. 5he penalty is to 'e 'ased Con the a"ount of the original tax
due.C 5he fact that the first install"ent as "ade on ti"e does not 'enefit the taxpayer
at all& thereafter the second install"ent ere not paid on ti"e. In effect then& the option
thus granted& to pay in to install"ents& "ust 'e strictly co"plied ith& otherise the
Statutory Construction Syllabus 1
operation of the plain statutory co""and that the tax due and paya'le on Eune 1st
'eco"es unavoida'le and delin+uency is to 'e co"puted fro" such a date.
5he aforecited provisions of 1.,. 1;0 (Charter of Pasay City) applied and interpreted in
the )adilla case are indeed al"ost Identical to the corresponding provisions in 1.,. 821
(Charter of Cagayan de 2ro City)& the la applica'le to the case at 'ar. %oever&
the )adilla decision as pro"ulgated on Eune 29& 196;& or prior to the passage of 1.,.
8::D hich& as already stated& too! effect on Eanuary 1& 1969. ,s the tax penalty in
+uestion as i"posed on the real estate tax for 1969& the su'se+uent enact"ent of 1.,.
8::D "ust 'e ta!en into consideration ith 1.,. 821 and the pronounce"ents of this Court
in the )adilla case.
, careful reading of the applica'le provisions of 1.,. 821 and 1.,. 8::D reveals the extent
to hich the for"er la as "odified or a"ended 'y the later statute. ?hile 1.,. 821&
a"ong others& provides that the real property tax is $due and payable annually on the first
day of ?une$& 1.,. 8::D declares that the sa"e tax (including the additional tax) $shall be
due and payable in four equal installments.$ In other ords& 1.,. 821 specifically and
expressly provides for one due date for the hole annual real estate tax. 1.,. 8::D& on the
other hand& does not provide for such a specific singular date for the pay"ent of the entire
tax& 'ut directly and un"ista!a'ly "andates that the tax shall 'e due and paya'le
in four e+ual install"ents spread over the period of hole year& (ach install"ent is due and
paya'le on or 'efore a specified statutory li"it. 5he last install"ent is due and paya'le on
or 'efore #ece"'er 01 of each year& hence it is only thereafter& or co""encing Eanuary 1
of the folloing year& that delin+uency starts as to this final install"ent. 5his 'eing so& it
only logically follos that the penalty for delin+uency should 'e co"puted fro" Eanuary 1.
5he next +uestion no poses itself ?hat is the 'asis for the co"putation of the tax penalty
in case of delin+uencyI 5he sixth paragraph of <ection :2& 1.,. 821 (supra)& provides that
the taxpayer is su'6ect to $ a penalty at the rate of to per centu" for each full "onth of
delin+uency that has expired& on the a"ount of theoriginal tax due ... .$ 5here is no
corresponding or a"endatory provision in 1.,. 8::D. 5his later la does not cover the
aspect of penalty in case of delin+uency in the pay"ent of the real estate tax. In the
a'sence of such penalty provision& respondent City 5reasurer insists that the penalty of 2M
'e 'ased on the original tax due hereas petitioner "aintains that it should 'e the a"ount
of the install"ent due and not paid.
?e rule for the petitioner& folloing the general rule in the interpretation of tax statutes that
such statutes are construed "ost strongly against the govern"ent and in favor of the
taxpayer. 4oreover& si"ple logic fairness and reason cannot countenance an exaction or a
penalty for an act faithfully done in co"pliance ith the la. <ince petitioner is alloed 'y
la to pay his real estate tax in four e+ual install"ents due and paya'le on four specified
dates and having paid the first three (0) install"ents faithfully and religiously& it is "anifest
in6ustice& sheer ar'itrariness and a'use of poer to penali.e hi" for doing so hen he fails
to pay the fourth end last install"ent.
5hat it is the legislatorCs intention to su'6ect the taxpayer to the pay"ent of the penalty of
to (2) per centu" on the a"ount of the delin+uent tax for each "onth of delin+uency or
fraction thereof& is clearly evident in the pro"ulgation of P.#. 7o. :6: enacting the 1eal
Property 5ax Code& <ec. 66 thereof hich provides9
<ec. 66. Penalty for delin+uency. = *ailure to pay the real property tax 'efore the
expiration of the period for the pay"ent ithout penalty of the +uarterly install"ents
thereof shall su'6ect the taxpayer to the pay"ent of a penalty of two per centum on the
Statutory Construction Syllabus 1
amount of the delinquent tax for each month of delinquency or fraction thereof until the
delin+uent tax shall 'e fully paid9 Provided& 5hat in no case shall the total penalty
exceed tenty-four per centu" of the delin+uent tax. 5he rate of penalty for tax
delin+uency fixed herein shall 'e unifor"ly applied in all provinces and cities. (e"phasis
P.#. :6: as pro"ulgated effective Eune 1& 19D:. <ection 66 of the P.#. evidently supplies
the o"ission of a penalty provision in 1epu'lic ,ct 8::D. %oever& since 1.,. 8::D
a"ended 1.,. 821& the City Charter of Cagayan de 2ro City in "a!ing the 'asic and
additional property tax to 'e due and paya'le in four (:) e+ual install"ents& ?e hold that
the penalty provision of 1.,. 821& <ec. :2 is dee"ed "odified 'y i"plication.
,ccordingly& petitionerCs total lia'ility as of ,ugust 2D& 19D0 hen he tendered pay"ent to
respondent City 5reasurer "ay 'e co"puted as follos9 P100.00 (the fourth and last
install"ent) plus P16.00 penalty (; "onths of delin+uency fro" Eanuary to ,ugust& 19D0 at
to per centu" on the a"ount of the delin+uent tax of P100.00) hich totals Pl 16.00.
,s to the second assign"ent of error& ?e do not agree ith the respondent court that
failure of the petitioner to co"ply ith <ection :2 and <ection 8; (') of 1.,. 821 re+uiring
pay"ent of taxes under protest& rendered the court ithout authority to entertain the suit.
<ection 8;(') provides that no court shall entertain any suit assailing the validity of a tax
assessed under this Chapter until the taxpayer shall have paid& under protest& the taxed
assessed against hi" ... .$ (e"phasis supplied.) 5he phrase $tax assessed$ clearly refers to
the annual real estate tax i"posa'le on the taxa'le real property.
4ay the phrase $tax assessed$ 'e interpreted to include not only the tax itself 'ut also all
penalties accruing theretoCI 5he legislative intent is not clear on this point& reading <ection
:2 to <ection 8; of the ,ct. %oever& in the case of ollector of !nternal 9evenue vs.
"autista& A.1. 7o. B-12280 and B-12289& 4ay 2D& 1989& this Court& spea!ing thru Eustice
1o'erto Concepcion& ho later 'eca"e Chief Eustice& held that a surcharge is not a $tax$ in
itself& and ?e +uote9
It ill 'e noted that the surcharge of five per centu" (8M) and the interest of one per
centu" (1 M) a "onth& referred to in <ection 81 (e) are i"posed upon the $tax unpaid.$
<i"ilarly& under said section D2& the $surcharge of fifty per centu" (80M) of the a"ount
of$ the $deficiency tax&$ i"posa'le $in case of ... a false or fraudulent return&$ shall 'e
$added$ to the $tax or to the deficiency tax$. In other ords& the afore"entioned
surcharge of 80M is not a $tax$ in itself& and hence& not su'6ect to the 8M surcharge and
to the interest of 1M a "onth on the $unpaid tax$& prescri'ed in section 81(e). ,lthough&
pursuant to section D2& said 80M surcharge $shall 'e collected at the sa"e ti"e and in
the sa"e "anner and as part of that tax$& the li!eness to the tax therein "entioned
refers exclusively to the $ti"e$ and $"anner$-"eaning the "ethod-of collection& not to
the amount to 'e collected hich is not procedural& 'ut substantive in character.$
<ince a surcharge is in the nature of a penalty& the ruling cited a'ove is aptly applica'le in
the instant case. *urther"ore& the particular circu"stances herein cast dou't as to the
applica'ility of <ection 8;(')& 1.,. 821& hich "ust 'e resolved in favor of the petitioner.
?e "ust ta!e into consideration his apparent good faith in relying on the a"endatory
provisions of 1.,. 8::D& and the ad"itted fact that he tendered pay"ent of the last
install"ent of his 1969 realty tax to respondent City 5reasurer& together ith the tax penalty
in accordance ith his co"putation& though erroneous& 'efore filing this case in court. ?e
li!eise ta!e into account the fact that even said respondent 5reasurer erred in interpreting
the la. It "ay 'e added that it could have 'een "ore expedient for the latter to have
Statutory Construction Syllabus 1
accepted the a"ount tendered 'y petitioner in ,ugust& 19D0& for after all& the tax itself as
not in +uestion. ,s to the 'alance of the tax penalty& said respondentCs recourse ould have
'een <ection :0 of 1.,. 821 hich provides9
,fter a property shall have 'eco"e delin+uent in the pay"ent of taxes and said taxes
and the corresponding penalties shall re"ain unpaid ninety days after pay"ent thereof
shall have 'eco"e due& the city treasurer& or his deputy& if he desires to co"pel
pay"ent through sei.ure of any personal property of any delin+uent person or persons&
shall issue a duly authenticated certificate& 'ased on the records of his office& shoing
the fact of delin+uency and the a"ount of the tax andpenalty due fro" said delin+uent
person or persons or fro" each of the". <uch certificate shall 'e sufficient arrant for
the sei.ure of the personal property 'elonging to the delin+uent person or persons in
+uestion not exe"pt fro" sei.ure/ and these proceedings "ay 'e carried out 'y the city
treasurer& his deputy& or any other officer authori.ed to carry out legal proceedings.
(("phasis supplied.)
,nent the last assigned error& ?e agree ith the conclusion reached 'y respondent court
that petitioner is not entitled to actual& "oral or exe"plary da"ages prayed for in his
Co"plaint. It does not appear that herein respondent City 5reasurerCs actuations or
decisions ere tainted ith 'ad faith. ,s this Court held in the case ofabungcal# et al. vs.
+ayor ordova and *ustilo B-1690:& Euly 01& 196:& 11 <C1, 8;:)& $(a)n erroneous
interpretation of the "eaning of the provisions of an ordinance ('y the City 4ayor) does not
constitute nor does it a"ount to 'ad faith that ould entitle an aggrieved party to an aard
of da"ages.$
?%(1(*21(& 6udg"ent is here'y rendered ordering petitioner to pay to the City
5reasurer of Cagayan de 2ro City the a"ount of P116.00 representing full pay"ent of the
last install"ent of P100.00 on the realty tax for the year 1969 and the tax penalty of P16.00
for eight "onths of his delin+uency fro" Eanuary& 19D0 to ,ugust& 19D0/ and ordering said
City 5reasurer to accept the aforesaid pay"ent& issue the official receipt therefor and a tax
clearance certificate covering the afore"entioned real estate tax and penalty. 7o costs.
Eudg"ent "odified.
<2 21#(1(#.

August 31, 1950)
5his is an original action of quo warranto +uestioning the legality of the appoint"ent of
respondent Ail 1. 4allare to the office of city engineer for the City of >aguio hich the
petitioner occupied and clai"s to 'e still occupying. 5he real issue hoever is the legality
of the petitionerCs re"oval fro" the sa"e office hich ould 'e the effect of 4allareCs
appoint"ent if the sa"e 'e alloed to stand. It is the petitionerCs contention that under the
Constitution he can not 'e re"oved against his ill and ithout cause. 5he co"plaint
against the other respondents has to do "erely ith their recognition of 4allare as the
laful holder of the disputed office and is entirely dependent upon the result of the 'asic
action against the last-"entioned respondent (4allare).
Statutory Construction Syllabus 1
<tripped of details unessential to the solution of the case& the facts are that (duardo de los
<antos& the petitioner& as appointed City (ngineer of >aguio on Euly 16& 19:6& 'y the
President& appoint"ent hich as confir"ed 'y the Co""ission on ,ppoint"ents on
,ugust 6& and on the 20rd of that "onth& he +ualified for and 'egan to exercise the duties
and functions of the position. 2n Eune 1& 1980& Ail 1. 4allare as extended an ad
interimappoint"ent 'y the President to the sa"e position& after hich& on Eune 0& the
@ndersecretary of the #epart"ent of Pu'lic ?or!s and Co""unications directed <antos to
report to the >ureau of Pu'lic ?or!s for another assign"ent. <antos refused to vacate the
office& and hen the City 4ayor and the other officials na"ed as 4allareCs co-defendants
ignored hi" and paid 4allare the salary corresponding to the position& he co""enced
these proceedings.
5he petitioner rests his case on ,rticle OII of the Constitution& section : of hich reads9 $7o
officer or e"ployee in the Civil <ervice shall 'e re"oved or suspended except for cause as
provided 'y la.$
It is ad"itted in respondentsC anser that the City (ngineer of >aguio $'elongs to the
unclassified service.$ ,nd this Court& in an exhaustive opinion 'y 4r. Eustice 4onte"ayor in
the case of Lacson vs. 9omero& :D 2ff. Aa..& 1DD;& involving the office of provincial fiscal&
ruled that officers or e"ployees in the unclassified as ell as those in the classified service
are protected 'y the a'ove-cited provision of the organic la. >ut there is this difference
'eteen the Bacson case and the case at 'ar9 <ection 28:8 of the 1evised ,d"inistrative
Code& hich falls under Chapter 61 entitled $City of >aguio&$ the Aovernor
Aeneral (no the President) to remove at pleasureany of the officers enu"erated therein&
one of ho" is the city engineer. 5he first +uestion that presents itself is& is this provision
still in forceI
<ection 2 of ,rticle O3I of the Constitution declares that $,ll las of the Philippine Islands
shall continue in force until the inauguration of the Co""onealth of the Philippines/
thereafter& such las shall re"ain operative& unless inconsistent with this onstitution& until
a"ended& altered& "odified& or repealed 'y the Congress of the Philippines& . . . .$
It see"s plain 'eyond dou't that the provision of section 28:8 of the 1evised
,d"inistrative Code& he (Aovernor-Aeneral no President) "ay re"ove at pleasure any of
the said appointive officers&$ is inco"pati'le ith the constitutional inhi'ition that $7o officer
or e"ployee in the Civil <ervice shall 'e re"oved or suspended except for cause as
provided 'y la.$ 5he to provisions are "utually repugnant and a'solutely irreconcila'le.
2ne in express ter"s per"its hat the other in si"ilar ter"s prohi'its.
5he Constitution leaves it to the Congress to provide for the cause of re"oval& and it is
suggested that the PresidentCs pleasure is itself a cause. 5he phrase $for cause$ in
connection ith the re"ovals of pu'lic officers has ac+uired a ell-defined concept. $It
"eans for reasons hich the la and sound pu'lic policy recogni.ed as sufficient arrant
for re"oval& that is& legal cause& and not "erely causes hich the appointing poer in the
exercise of discretion "ay dee" sufficient. It is i"plied that officers "ay not 'e re"oved at
the "ere ill of those vested ith the poer of re"oval& or ithout any cause. 4oreover&
the cause "ust relate to and affect the ad"inistration of the office& and "ust 'e restricted
to so"ething of a su'stantial nature directly affecting the rights and interests of the
pu'lic.$(:0 ,". Eur.& :D& :;.)
1econsideration of the decision in Lacson vs. 9omero as far as officers in the unclassified
service are concerned is urged. It is contended that only officers and e"ployees in the
classified service should 'e 'rought ithin the purvie of ,rticle OII of the Constitution.
Statutory Construction Syllabus 1
<ection 1 of this article ordains9 $, Civil <ervice e"'racing all 'ranches and su'divisions of
the Aovern"ent shall 'e provided 'y la. ,ppoint"ents in the Civil <ervice& except as
those hich are policy-deter"ining& pri"arily confidential or highly technical in nature& shall
'e "ade only according to "erit and fitness& to 'e deter"ined as far as practica'le 'y
co"petitive exa"ination.$ 5he first clause is a definition of the scope of Civil <ervice& the
"en and o"en hich section : protects. It see"s o'vious fro" that definition that the
entire Civil <ervice is conte"plated& except positions $hich are policy-deter"ining&
pri"arily confidential or highly technical in nature.$ 5his theory is confir"ed 'y the
enact"ent of Co""onealth ,ct 7o. 1DD on 7ove"'er 00& 1906 to i"ple"ent ,rticle OII
of the Constitution. Co""onealth ,ct 7o. 1DD explains Civil <ervice al"ost in the
identical ords of that article of the organic la. ,s a conte"poraneous construction& this
,ct affords an index to the "eaning of Civil <ervice as conceived 'y the fra"ers of the
Constitution. $5he principle of conte"poraneous construction "ay 'e applied to the
construction given 'y the legislature to the constitutional provisions dealing ith legislative
poers and procedure. 5hough not conclusive& such interpretation is generally conceded
as 'eing entitled to great eight.$ (@.<. vs. <prague& 2;2 @.<.& D16/ D8 B. ed. 6:0/ 81 <.
Ct.& 220/ D1 ,.B.1.& 10;1/ #en ex de". 4urray vs. %o'o!en Band and I"prov. Co.& 1; %o.
G@.<.H& 2D2/ 18 B. ed.& 0D2/ Clar! vs. >oyce& 20 ,ri..& 8::/ 1;8 P.& 106& citing 1.C.B./ 11 ,".
Eur. 699.) 5he principle of express "ention and i"plied exclusion "ay 'e "ade use of also
to drive ho"e this point.
?e are led to the sa"e conclusion 'y the existing provisions at the ti"e of the adoption of
the Constitution. Civil <ervice as e"'racing 'oth classes of officers and e"ployees
possessed definite legal and statutory "eaning hen the Constitution as approved.
<ection 6D0 of the 1evised ,d"inistrative Code already provided that $Persons in the
Philippine civil service pertain either to the classified service&$ and ent on to say that $5he
classified service e"'races all not expressly declared to 'e in the unclassified service.$
5hen section 6D1 descri'ed persons in the unclassified service as $officers& other than the
provincial treasurers and assistant directors of 'ureaus or offices& appointed 'y the
President of the Philippines& ith the consent of the Co""ission on ,ppoint"ents of the
7ational ,sse"'ly& and all other officers of the govern"ent hose appoint"ents are 'y la
vested in the President of the Philippines alone.$
5he rules of the construction infor" us that the ords use in the constitution are to 'e given
the sense they have in co""on use. (2!anogan Indians vs. @nited <tates& 2D9& @.<.& 668/
6: ,.B.1.& 1:0:/ D0 Ba ed.& ;9:.) It has 'een said that e "ust loo! to the history of the
ti"es& exa"ine the state of things existing hen the Constitution as fra"ed and adopted&
(1hode Islands vs. 4assachusetts& 12 Pet.& 68D/ 9 Ba ed.& 1200)& and interpret it in the
light of the la then in operation. (4attox vs. @nited <tates& 186& @.<.& 20D/ 09 Ba ed.&
,ttention is dran to supposed inconveniences of tying the hands of the appointing poer
in changing and shifting officers in the unclassified service. $If = it is argued = all
i"portant officers and e"ployees of the govern"ent falling ithin the unclassified service
as enu"erated in section 6D1 of the 1evised ,d"inistrative Code as a"ended 'y
Co""onealth ,ct 7o. 1DD& "ay not 'e re"oved 'y the President except for cause as
provided 'y la& . . . the President ould 'e seriously crippled in the discharge of the grave
duty and responsi'ility laid upon hi" 'y the Constitution to ta!e care that the las faithfully
Luestions of expediency are& of course& 'eyond the province of the court to ta!e into
account in the interpretation of las or of the Constitution here the language is otherise
Statutory Construction Syllabus 1
clear. >ut the argu"ent is& e thin!& unsound even if the case 'e approached fro" this
angle. It contains its on refutation. 5he Constitution and the la i"ple"enting it afford
ade+uate safeguards against such conse+uences as have 'een painted.
5he argu"ent proceeds& contrary to its context& on the assu"ption that re"oves of civil
service officers and e"ployees are a'solutely prohi'ited& hich is not the case. 5he
Constitution re"ovals and only re+uires that they 'e for cause. ,nd the
occasions for re"oval ould 'e greatly di"inished if the in6unction of section 1 of ,rticle OII
of the Constitution = that appoint"ents in the civil service shall 'e "ade only according to
"erit and fitness& to 'e deter"ined as far as practica'le 'y co"petitive exa"ination =
ould 'e adhered of "eticulously in the first place.
>y far greater "ischiefs ould 'e fo"ented 'y an un'ridled authority to re"ove. <uch
license ould thart the very ai"s of the Constitution hich are expounded 'y #ean
,ruego& hi"self a "e"'er of the Constitutional Convention& in the folloing re"ar!s
copied ith approval in Lacson vs. 9omero& supra9
5he adoption of the $"erit syste"$ in govern"ent service has secured efficiency and
social 6ustice. It eli"inates the political factor in the selection of civil e"ployees hich is
the first essential to an efficient personnel syste". It insures e+uality of opportunity to all
deserving applicants desirous of a career in the pu'lic service. It advocates a ne
concept of the pu'lic office as a career open to all and not the exclusive patri"ony of
any party or faction to 'e doled out as a reard for party service.
5he $"erit syste"$ as adopted only after the nations of the orld too! cogni.ance of
its "erits. Political patronage in the govern"ent service as sanctioned in 1;D9 'y the
Constitutional right of President of the @nited <tates to act alone in the "atter of
re"ovals. *ro" the ti"e of ,ndre Eac!son the principle of the $5o the victor 'elongs
the spoilsC do"inated the *ederal Aovern"ent. 5he syste" under"ined "oral values
and destroyed ad"inistrative efficiency.
<ince the esta'lish"ent of the ,"erican 1egi"e in the Philippines e have en6oyed the
'enefits of the $"erit syste".$ 5he <chur"ann Co""ission advocated in its reports that
$the greatest care should 'e ta!en in the selection of the officials for ad"inistration.
5hey should 'e "en of the highest character and fitness& and partisan politics should 'e
entirely separated fro" the govern"ent.$ 5he fifth act passed 'y the Philippine
Co""ission created a >oard of Civil <ervice. It instituted a syste" here that as far
"ore radical and thorough than that in the @nited <tates. 5he Aovernor-Aeneral after
?illia" 5aft adopted the policy of appointing *ilipinos in the govern"ent regardless of
their party affiliation. ,s the result of these the personnel of the Civil <ervice had
gradually co"e to 'e one of hich the people of the @nited <tates could feel 6ustly
0ecessity for onstitutional provision. = 5he inclusion in the constitution of provisions
regarding the $"erit syste"$ is a necessity of "odern ti"es. ,s its esta'lish"ent
secures good govern"ent the citi.ens have a right to accept its guarantee as a
per"anent institution.
%eparation# suspension# demotions and transfers. = 5he $"erit syste"$ ill 'e
ineffective if no safeguards are placed around the separation and re"oval of pu'lic
e"ployees. 5he Co""itteeCs report re+uires that re"ovals shall 'e "ade only for
$causes and in the "anner provided 'y la. 5his "eans that there should 'e 'ona fide
Statutory Construction Syllabus 1
reasons and action "ay'e ta!en only after the e"ployee shall have 'een given a fair
hearing. 5his affords the pu'lic e"ployees reasona'le security of tenure. (II ,ruegoCs
*ra"ing of the Constitution& ;;6& ;;D& ;90.)
,s has 'een seen& three specified classes of positions = policy-deter"ining& pri"arily
confidential and highly technical = are excluded fro" the "erit syste" and dis"issal at
pleasure of officers and e"ployees appointed therein is alloed 'y the Constitution. 5hese
positions involved the highest degree of confidence& or are closely 'ound out ith and
dependent on other positions to hich they are su'ordinate& or are te"porary in nature. It
"ay truly 'e said that the good of the service itself de"ands that appoint"ents co"ing
under this category deter"ina'le at the ill of the officer that "a!es the".
5he office of city engineer is neither pri"arily confidential& policy-deter"ining& nor highly
(very appoint"ent i"plies confidence& 'ut "uch "ore than ordinary confidence is reposed
in the occupant of a position that is pri"arily confidential. 5he latter phrase denotes not
only confidence in the aptitude of the appointee for the duties of the office 'ut pri"arily
close inti"acy hich insures freedo" of intercourse ithout e"'arrass"ent or freedo"
fro" "isgivings of 'etrayals of personal trust or confidential "atters of state. 7or is the
position of city engineer policy-deter"ining. , city engineer does not for"ulate a "ethod of
action for the govern"ent or any its su'divisions. %is 6o' is to execute policy& not to "a!e
it. ?ith specific reference to the City (ngineer of >aguio& his poers and duties are
carefully laid don for hi" 'e section 288D of the 1evised ,d"inistrative Code and are
essentially "inisterial in character. *inally& the position of city engineer is technical 'ut not
highly so. , city engineer is not re+uired nor is he supposed to possess a technical s!ill or
training in the supre"e or superior degree& hich is the sense in hich $highly technical$ is&
e 'elieve& e"ployed in the Constitution. 5here are hundreds of technical "en in the
classified civil service hose technical co"petence is not loer than that of a city engineer.
,s a "atter of fact& the duties of a city engineer are e"inently ad"inistrative in character
and could very ell 'e discharged 'y non-technical "en possessing executive a'ility.
<ection 10 of ,rticle 3III of the Constitution re+uires that $,ll cases involving the
constitutionality of a treaty or la shall 'e heard and decided 'y the <upre"e Court in
banc&$ and arns that $no treaty or la "ay 'e declared unconstitutional ithout the
concurrence of to-thirds of all the "e"'ers of the Court.$ 5he +uestion arises as to
hether this 6udg"ent operates as invalidation of section 28:8 of the 1evised
,d"inistrative Code or a part of it so as to need at least eight votes to "a!e effective. 5he
anser should 'e in negative.
?e are not declaring any part of section 28:8 of the 1evised ,d"inistrative Code
unconstitutional. ?hat e declare is that the particular provision thereof hich gave the
Chief (xecutive poer to re"ove officers at pleasure has 'een repealed 'y the
Constitution and ceased to 'e operative fro" the ti"e that instru"ent ent into effect.
@nconstitutionally& as e understand it& denotes life and vigor& and unconstitutional
legislation presupposes posteriority in point of ti"e to the Constitution. It is a statute that
$atte"pts to validate and legali.e a course of conduct the effect of hich the Constitution
specifically for'ids (<tate ex-rel. 4ac! vs. Auc!en'erger& 109 2hio <t.& 2D0/ 09 7(. G2dH&
;:0.) , la that has 'een repealed is as good as if it had never 'een enacted& and can not&
in the nature of things& contravene or pretend to contravene constitutional inhi'ition. <o&
unli!e legislation that is passed in defiance of the Constitution& assertive and "enacing& the
+uestioned part of section 28:8 of the 1evised ,d"inistrative Code does not need a
positive declaration of nullity 'y the court to put it out of the ay. 5o all intents and
Statutory Construction Syllabus 1
purposes& it is non-existent& outlaed and eli"inated fro" the statute 'oo! 'y the
Constitution itself 'y express "andate 'efore this petitioner as appointed.
Incidentally& the last discussion ansers and disposes of the proposition that in accepting
appoint"ent under section 28:8 of the 1evised ,d"inistrative Code& the petitioner "ust 'e
dee"ed to have accepted the conditions and li"itations attached to the appoint"ent. If the
clause of section 28:8 hich authori.ed the President to re"ove officers of the City of
>aguio at pleasure had 'een a'rogated hen petitionerCs appoint"ent as issued& the
appointee can not presu"ed to have a'ided 'y this condition.
?e therefore hold that the petitioner is entitled to re"ain in office as City (ngineer of
>aguio ith all the e"olu"ents& rights and privileges appurtenant thereto& until he resigns
or is re"oved for cause& and that respondent 4allareCs appoint"ent is ineffective in so far
as it "ay adversely affect those e"olu"ents& rights and privileges. ?ithout costs.

PEOPLE vs. GARCIA (February 28, 1950, G.R. No. L-
, J.:
(<5(>,7 3IB21I,& 3ice-4ayor/ P(#12 2BI3,1(<& et al.& 4e"'ers of the 4unicipal
Council of >alaoan& Ba @nion& defendantCs-appellees.
2laviano ,+uino& Car'onell and *lores for appellants.
7o appearance for appellees.
>(7AP27& E.9
*latly disagreeing ith the councilors of their ton a'out the de"olition of the re"ains of
the old "unicipal 'uilding& the six plaintiffs& for the"selves and in representation of tenty
other residents of >alaoan& Ba @nion& petitioned the Court of *irst Instance for an in6unction
to i"pede such destruction& hich as authori.ed 'y a resolution unani"ously approved
'y the council.
2n a "otion to dis"iss& the %onora'le 3icente <antiago& a'solved the defendants& = the
"ayor and the councilors = upon the ground that the plaintiffs had no standing to litigate
as "ere taxpayers or citi.ens 'ecause they did not sho& nor assert& an in6ury to the"
different fro" that allegedly suffered 'y the general pu'lic. 5he court also held that as the
"asonry foundations had practically 'een de"olished& in6unction did not lie.
5he plaintiffs appealed in due course.
5his case having 'een ter"inated in the court a quo upon a "otion to dis"iss& no factual
+uestions are involved& the "aterial aver"ents of the co"plaint 'eing dee"ed ad"itted.
,fter descri'ing the parties& the co"plaint ith its annex (<epte"'er& 19:6) declared that
on Euly 29& 19:6& in a session duly asse"'led& the "unicipal council adopted resolution
7o. 9 the de"olition of the "asonry foundations of the old "unicipal 'uilding to
give ay to the extension of Calle Cortado/ that said resolution as an excess or a'use of
discretion 'ecause it ould 'e detri"ental to the interests of the "unicipal corporation/ that
plaintiffs vainly protested to the council/ that the resolution had never 'een acted upon 'y
the provincial 'oard/ that the council and the "ayor violated the provisions of section 921
Statutory Construction Syllabus 1
of the 4anual of Instructions to 4unicipal 5reasurers/ and that the provincial 'oard turned
deaf ears to representations the petitioners had "ade in the "atter.
5here is no allegation& and plaintiffs do not "aintain& that the council as the legislative 'ody
for >alaoan had no authority to approve the challenged resolution. 5hey "erely contend
that it constituted as an a'use of discretion 'ecause it ould inflict losses a"ounting to
around P20&000 to the taxpayers of the ton. In other ords& plaintiffs do not see eye to
eye ith their councilors on the advisa'ility of the de"olition. 7o& in the "unicipality of
>alaoan hose undenied population is 18&000 (record on appeal& p. ::) the defendant
councilors are dee"ed to represent the vies of the "a6ority at least& of the electors and
taxpayers. 5he statute calls the" the representatives $of the true interests of the people of
the entire "unicipality.$ (<ection 2216& ,d"inistrative Code.) 5herefore& ho can tenty-six
persons pretend to i"pose their ideas a'out the convenience or inconvenience of the
de"olition or the 'enefit or pre6udice deriving therefro"I 5his 'eing a de"ocratic country
here the ill of the "a6ority usually prevails& %is %onor acted properly in applying the rule
that private citi.ens "ay not restrain official acts here = as in this case = plaintiffs do not
allege nor prove da"ages to the"selves (private loss) different in character fro" that
sustained 'y the pu'lic generally& (pu'lic in6ury)1& hat ith the sound policy of protecting
the pu'lic corporation or its officers fro" a "ultiplicity of suits.
It ould indeed 'e preposterous if a taxpayer or a group of taxpayers could drag the
4unicipal >oard "e"'ers of 4anila into the court pre"ises to de'ate the futility of a street
repair& or 'ridge construction& upon the "ere plea that they have an interest in the
properties and the ell-'eing of their local govern"ent. 5he courts are not the supervisors
of these officials.
,nd this is not stifling civic "indedness as plaintiffs apprehend& 'ecause such critics have
free access to the City %all itself to for"ulate their protest or the colu"ns of the press& even
to the polls to prevent repetition of the poor 6udg"ent of their elective officials. It "ust 'e
e"phasi.ed that e are spea!ing a'out ordinances or resolutions ithin the poers of the
,t this 6uncture e "ay advert to the contention that the defendants could not legally order
the execution of their resolution 'ecause it had not 'een previously approved 'y the
provincial 'oard. 5here is nothing in the ,d"inistrative Code = nor in the section 2200
invo!ed 'y appellants = expressly or i"pliedly providing that an ordinance or resolution
does not 'eco"e effective until is it o!ayed 'y the provincial 'oard.
@nder the la every ordinance or resolution shall go into effect on the tenth day after its
passage (see section 2200& ,d"inistrative Code) su'6ect of course to the poer of the
provincial su'se+uently to declare such ordinance or resolution invalid (section 2200& ,d".
Code) if it should find that it is 'eyond the poers conferred upon the council. >ut here it is
averred that the provincial 'oard of Ba @nion& 'esides having $noted$ the resolution hich
had 'een forarded to it& overruled the plaintiffsC protests against it& action hich in effect
proves i"plied assent thereto.
,gain it is urged that defendants violated section 921 of the 4anual of Instructions to
4unicipal 5reasurers containing rules of the $sale or conde"nation$ of real property
'elonging to a "unicipality. Fet none of herein defendants is a "unicipal treasurer upon
ho" the instructions are 'inding. 4oreover& such section does not apply& 'ecause the
"atter is not a $sale or conde"nation$ 'ut a $use$ of real property = the 'ric!s and stones
to 'e ta!en fro" the ruins $shall 'e used for the reparation of the "unicipal streets.$
((xhi'it ,.)
Statutory Construction Syllabus 1
5he a'ove vies sufficiently sho the untena'ility of the action of plaintiffs and appellants.
?herefore& it 'eco"es unnecessary to discuss the other ground of dis"issal 'ased on the
fact that the structure had 'een practically de"olished.
Eudg"ent affir"ed& ith costs. <o ordered.

PEOPLE vs. FERRER (G.R. Nos. L-32613-14,
December 27, 1972)

!. %tatement of the ase
Posed in issue in these to cases is the constitutionality of the ,nti-<u'version
hich outlas the Co""unist Party of the Philippines and other $su'versive
associations&$ and punishes any person ho $!noingly& illfully and 'y overt acts affiliates
hi"self ith& 'eco"es or re"ains a "e"'er$ of the Party or of any other si"ilar
$su'versive$ organi.ation.
2n 4arch 8& 19D0 a cri"inal co"plaint for violation of section : of the ,nti-<u'version ,ct
as filed against the respondent *eliciano Co in the Court of *irst Instance of 5arlac. 2n
4arch 10 Eudge Eose C. de Au."an conducted a preli"inary investigation and& finding
a prima facie case against Co& directed the Aovern"ent prosecutors to file the
corresponding infor"ation. 5he tice-a"ended infor"ation& doc!eted as Cri"inal Case 7o.
2D& recites9
5hat on or a'out 4ay 1969 to #ece"'er 8& 1969& in the 4unicipality of Capas& Province
of 5arlac& Philippines& and ithin the 6urisdiction of this %onora'le Court& the
a'ovena"ed accused& feloniously 'eca"e an officer and)or ran!ing leader of the
Co""unist Party of the Philippines& an outlaed and illegal organi.ation ai"ed to
overthro the Aovern"ent of the Philippines 'y "eans of force& violence& deceit&
su'version& or any other illegal "eans for the purpose of esta'lishing in the Philippines
a totalitarian regi"e and placing the govern"ent under the control and do"ination of an
alien poer& 'y 'eing an instructor in the 4ao 5se 5ung @niversity& the training school of
recruits of the 7e PeopleCs ,r"y& the "ilitary ar" of the said Co""unist Party of the
5hat in the co""ission of the a'ove offense& the folloing aggravating circu"stances
are present& to it9
(a) 5hat the cri"e has 'een co""itted in conte"pt of or ith insult to pu'lic authorities/
(') 5hat the cri"e as co""itted 'y a 'and/ and afford i"punity.
(c) ?ith the aid of ar"ed "en or persons ho insure or afford i"punity.
Co "oved to +uash on the ground that the ,nti-<u'version ,ct is a 'ill of attainder.
4eanhile& on 4ay 28& 19D0& another cri"inal co"plaint as filed ith the sa"e court&
sharing the respondent 7ilo 5ayag and five others ith su'version. ,fter preli"inary
investigation as had& an infor"ation as filed& hich& as a"ended& reads9
Statutory Construction Syllabus 1
5he undersigned provincial *iscal of 5arlac and <tate Prosecutors duly designated 'y
the <ecretary of Eustice to colla'orate ith the Provincial *iscal of 5arlac& pursuant to
the 2rder dated Eune 8& a'ove entitled case& here'y accuse 7ilo <. 5ayag& alias 1o"y
1eyes alias 5,>,& ,15%@1 A,1CI,& 1(7,52 (1(F) C,<IP(& ,>(B,1#2 A,1CI,&
4,7@(B ,B,3,#2& >(7E,4I7 >I( alias C244,7#(1 4(B2#F and several E2%7
#2(<& hose identities are still un!non& for violation of 1(P@>BIC ,C5 7o. 1D00&
otherise !non as the ,nti-<u'version Ba& co""itted as follos9
5hat in or a'out 4arch 1969 and for so"eti"e prior thereto and thereafter& in the
Province of 5arlac& ithin the 6urisdiction of this %onora'le Court& and elsehere in the
Philippines& the a'ove-na"ed accused !noingly& illfully and 'y overt acts organi.ed&
6oined and)or re"ained as offices and)or ran!ing leaders& of the J,>,5,,7A
4,J,>,F,7& a su'versive organi.ation as defined in 1epu'lic ,ct 7o. 1D00/ that
>(7E,4I7 >I( and C244,7#(1 4(B2#F& in addition thereto& !noingly& illfully
and 'y over acts 6oined and)or re"ained as a "e"'er and 'eca"e an officer and)or
ran!ing leader not only of the Co""unist Party of the Philippines 'ut also of the 7e
PeopleCs ,r"y& the "ilitary ar" of the Co""unist Party of the Philippines/ and that all
the a'ove-na"ed accused& as such officers and)or ran!ing leaders of the aforestated
su'versive organi.ations& conspiring& confederating and "utually helping one another&
did then and there !noingly& illfully and feloniously co""it su'versive and)or
seditious acts& 'y inciting& instigating and stirring the people to unite and rise pu'licly
and tu"ultuously and ta!e up ar"s against the govern"ent& and)or engage in re'ellious
conspiracies and riots to overthro the govern"ent of the 1epu'lic of the Philippines 'y
force& violence& deceit& su'version and)or other illegal "eans a"ong hich are the
1. 2n several occasions ithin the province of 5arlac& the accused conducted "eetings
and)or se"inars herein the said accused delivered speeches instigating and inciting
the people to unite& rise in ar"s and overthro the Aovern"ent of the 1epu'lic of the
Philippines& 'y force& violence& deceit& su'version and)or other illegal "eans/ and
toard this end& the said accused organi.ed& a"ong others a chapter of the
J,>,5,,7A 4,J,>,F,7 in 'arrio 4otrico& Ba Pa.& 5arlac for the avoed purpose of
underta!ing or pro"oting an ar"ed revolution& su'versive and)or seditious propaganda&
conspiracies& and)or riots and)or other illegal "eans to discredit and overthro the
Aovern"ent of the 1epu'lic of the Philippines and to esta'lished in the Philippines a
Co""unist regi"e.
2. 5he accused 7IB2 5,F,A alias 124F 1(F(< alias 5,>,& together ith
*1,7CI<C2 P215(4 alias JIJ2 Aon.ales and others& pursued the a'ove su'versive
and)or seditious activities in <an Pa'lo City 'y recruiting "e"'ers for the 7e PeopleCs
,r"y& and)or 'y instigating and inciting the people to organi.e and unite for the purpose
of overthroing the Aovern"ent of the 1epu'lic of the Philippines through ar"ed
revolution& deceit& su'version and)or other illegal "eans& and esta'lishing in the
Philippines a Co""unist Aovern"ent.
5hat the folloing aggravating circu"stances attended the co""ission of the offense9
(a) aid of ar"ed "en or persons to insure or afford i"punity/ and (') craft& fraud& or
disguise as e"ployed.
2n Euly 21& 19D0 5ayag "oved to +uash& i"pugning the validity of the statute on the
grounds that (1) it is a 'ill of attainder/ (2) it is vague/ (0) it e"'races "ore than one su'6ect
not expressed in the title thereof/ and (:) it denied hi" the e+ual protection of the las.
1esolving the constitutional issues raised& the trial court& in its resolution of <epte"'er 18&
19D0& declared the statute void on the grounds that it is a 'ill of attainder and that it is
Statutory Construction Syllabus 1
vague and over'oard& and dis"issed the infor"ations against the to accused. 5he
Aovern"ent appealed. ?e resolved to treat its appeal as a special civil action for certiorari.
!!. !s the Act a "ill of AttainderA
,rticle III& section 1 (11) of the Constitution states that $7o 'ill of attainder or ex port
facto la shall 'e enacted.$
, 'ill of attainder is a legislative act hich inflicts punish"ent
ithout trial.
Its essence is the su'stitution of a legislative for a 6udicial deter"ination of
5he constitutional 'an against 'ills of attainder serves to i"ple"ent the principle of
separation of poers
'y confining legislatures to rule-"a!ing
and there'y forestalling
legislative usurpation of the 6udicial function.
%istory in perspective& 'ills of attainder ere
e"ployed to suppress unpopular causes and political "inorities&
and it is against this evil
that the constitutional prohi'ition is directed. 5he singling out of a definite class& the
i"position of a 'urden on it& and a legislative intent& suffice to stig"ati.ea statute as a 'ill of
In the case at 'ar& the ,nti-<u'version ,ct as conde"ned 'y the court a quo as a 'ill of
attainder 'ecause it $tars and feathers$ the Co""unist Party of the Philippines as a
$continuing "enace to the freedo" and security of the country/ its existence& a Cclear&
present and grave danger to the security of the Philippines.C$ >y "eans of the ,ct& the trial
court said& Congress usurped $the poers of the 6udge&$ and assu"ed $6udicial "agistracy
'y pronouncing the guilt of the CCP ithout any of the for"s or safeguards of 6udicial trial.$
*inally& according to the trial court& $if the only issue Gto 'e deter"inedH is hether or not the
accused is a !noing and voluntary "e"'er& the la is still a 'ill of attainder 'ecause it
has expressly created a presu"ption of organi.ational guilt hich the accused can never
hope to overthro.$
1. ?hen the ,ct is vieed in its actual operation& it ill 'e seen that it does not specify the
Co""unist Party of the Philippines or the "e"'ers thereof for the purpose of punish"ent.
?hat it does is si"ply to declare the Party to 'e an organi.ed conspiracy for the overthro
of the Aovern"ent for the purposes of the prohi'ition& stated in section :& against
"e"'ership in the outlaed organi.ation. 5he ter" $Co""unist Party of the Philippines$
issued solely for definitional purposes. In fact the ,ct applies not only to the Co""unist
Party of the Philippines 'ut also to $any other organi.ation having the sa"e purpose and
their successors.$ Its focus is not on individuals 'ut on conduct.
5his feature of the ,ct distinguishes it fro" section 80: of the @.<. *ederal Ba'or-
4anage"ent 1eporting and #isclosure ,ct of 1989
hich& in @.<. vs. >ron&
as held
to 'e a 'ill of attainder and therefore unconstitutional. <ection 80: provided in its pertinent
parts as follos9
(a) 7o person ho is or has 'een a "e"'er of the Co""unist Party ... shall serve =
(1) as an officer& director& trustee& "e"'er of any executive 'oard or si"ilar
governing 'ody& 'usiness agent& "anager& or other e"ployee (other than
as an e"ployee perfor"ing exclusively clerical or custodial duties) of any la'or
during or for five years after the ter"ination of his "e"'ership in the Co""unist
(') ,ny person ho illfully violates this section shall 'e fined not "ore than Q10&000 or
i"prisoned for not "ore than one year& or 'oth.
Statutory Construction Syllabus 1
5his statute specified the Co""unist Party& and i"poses disa'ility and penalties on its
"e"'ers. 4e"'ership in the Party& ithout "ore& ipso facto dis+ualifies a person fro"
'eco"ing an officer or a "e"'er of the governing 'ody of any la'or organi.ation. ,s the
<upre"e Court of the @nited <tates pointed out9
@nder the line of cases 6ust outlined& sec. 80: of the Ba'or 4anage"ent 1eporting and
#isclosure ,ct plainly constitutes a 'ill of attainder. Congress undou'tedly possesses
poer under the Co""erce Clause to enact legislation designed to !eep fro" positions
affecting interstate co""erce persons ho "ay use of such positions to 'ring a'out
political stri!es. In section 80:& hoever& Congress has exceeded the authority granted
it 'y the Constitution. 5he statute does not set forth a generally applica'le rule
decreeing that any person ho co""its certain acts or possesses certain
characteristics (acts and characteristics hich& in CongressC vie& "a!e the" li!ely to
initiate political stri!es) shall not hold union office& and leaves to courts and 6uries the 6o'
of deciding hat persons have co""itted the specified acts or possessed the specified
characteristics. !nstead# it designates in no uncertain terms the persons who possess
the feared characteristics and therefore cannot hold union office ithout incurring
cri"inal lia'ility = members of the ommunist )arty.
Co""unist Party v. <u'versive ,ctivities Control >oard& 06D @< 1& 6 B ed 2d 628& ;1 <
C5 108D& lend a support to our conclusion. 5hat case involved an appeal fro" an order
'y the Control >oard ordering the Co""unist Party to register as a $Co""unist-action
organi.ation&$ under the <u'versive ,ctivities Control ,ct of 1980& 6: <tat 9;D& 80 @<C
sec. D;1 et seq. (198; ed). 5he definition of $Co""unist-action organi.ation$ hich the
>oard is to apply is set forth in sec. 0 of the ,ct9
G,Hny organi.ation in the @nited <tates ... hich (i)is su'stantially directed& do"inated&
or controlled 'y the foreign govern"ent or foreign organi.ation controlling the orld
Co""unist "ove"ent referred to in section 2 of this title& and(ii) operates pri"arily to
advance the o'6ectives of such orld Co""unist "ove"ent... 6: <tat 9;9& 80 @<C
sec. D;2 (198; ed.)
, "a6ority of the Court re6ected the argu"ent that the ,ct as a 'ill of attainder&
reasoning that sec. 0 does not specify the persons or groups upon hich the
deprivations setforth in the ,ct are to 'e i"posed& 'ut instead sets forth a general
definition. ,lthough the >oard has deter"ined in 1980 that the Co""unist Party as a
$Co""unist-action organi.ation&$ the Court found the statutory definition not to 'e so
narro as to insure that the Party ould alays co"e ithin it9
In this proceeding the >oard had found& and the Court of ,ppeals has sustained its
conclusion& that the Co""unist Party& 'y virtud of the activities in hich it no engages&
co"es ithin the ter"s of the ,ct. If the Party should at anyti"e choose to a'andon
these activities& after it is once registered pursuant to sec. D& the ,ct provides ade+uate
"eans of relief. (06D @<& at ;D& 6 B ed 2d at 6;0)
Indeed& ere the ,nti-<u'version ,ct a 'ill of attainder& it ould 'e totally unnecessary to
charge Co""unists in court& as the la alone& ithout "ore& ould suffice to secure their
punish"ent. >ut the undenia'le fact is that their guilt still has to 'e 6udicially esta'lished.
5he Aovern"ent has yet to prove at the trial that the accused 6oined the Party !noingly&
illfully and 'y overt acts& and that they 6oined the Party& !noing its su'versive character
and ith specific intent to further its 'asic o'6ective& i.e.& to overthro the existing
Aovern"ent 'y force deceit& and other illegal "eans and place the country under the
control and do"ination of a foreign poer.
Statutory Construction Syllabus 1
,s to the clai" that under the statute organi.ationl guilt is nonetheless i"puted despite the
re+uire"ent of proof of !noing "e"'ership in the Party& suffice it to say that is precisely
the nature of conspiracy& hich has 'een referred to as a $dragneet device$ here'y all
ho participate in the cri"inal covenant are lia'le. 5he contention ould 'e correct if the
statute ere construed as punishing "ere "e"'ership devoid of any specific intent to
further the unlaful goals of the Party.
>ut the statute specifically re+uired that
"e"'ership "ust 'e .nowingor active& ith specific intent to further the illegal o'6ectives of
the Party. 5hat is hat section : "eans hen it re+uires that "e"'ership& to 'e unlaful&
"ust 'e shon to have 'een ac+uired $!noingly& illfully and 'y overt acts.$
ingredient of specific intent to pursue the unlaful goals of the Party "ust 'e shon 'y
$overt acts.$
5his constitutes an ele"ent of $"e"'ership$ distinct fro" the ingredient of
guilty !noledge. 5he for"er re+uires proof of direct participation in the organi.ationCs
unlaful activities& hile the latter re+uires proof of "ere adherence to the organi.ationCs
illegal o'6ectives.
2. (ven assu"ing& hoever& that the ,ct specifies individuals and not activities& this feature
is not enough to render it a 'ill of attainder. , statute prohi'iting partners or e"ployees of
securities underriting fir"s fro" serving as officers or e"ployees of national 'an!s on the
'asis of a legislative finding that the persons "entioned ould 'e su'6ect to the te"ptation
to co""it acts dee"ed ini"ical to the national econo"y& has 'een declared not to 'e a 'ill
of attainder.
<i"ilarly& a statute re+uiring every secret& oath-'ound society having a
"e"'ership of at least tenty to register& and punishing any person ho 'eco"es a
"e"'er of such society hich fails to register or re"ains a "e"'er thereof& as declared
valid even if in its operation it as shon to apply only to the "e"'ers of the Ju Jlux
In the Philippines the validity of section 20 (') of the Industrial Peace ,ct&
re+uiring la'or
unions to file ith the #epart"ent of Ba'or affidavits of union officers $to the effect that they
are not "e"'ers of the Co""unist Party and that they are not "e"'ers of any
organi.ation hich teaches the overthro of the Aovern"ent 'y force or 'y any illegal or
unconstitutional "ethod&$ as upheld 'y this Court.
Indeed& it is only hen a statute applies either to na"ed individuals or to easily
ascertaina'le "e"'ers of a group in such a ay as to inflict punish"ent on the" ithout a
6udicial trial does it 'eco"e a 'ill of attainder.
It is upon this ground that statutes hich
dis+ualified those ho had ta!en part in the re'ellion against the Aovern"ent of the @nited
<tates during the Civil ?ar fro" holding office&
or fro" exercising their profession&
hich prohi'ited the pay"ent of further co"pensation to individuals na"ed in the ,ct on
the 'asis of a finding that they had engages in su'versive activities&
or hich "ade it a
cri"e for a "e"'er of the Co""unist Party to serve as an officer or e"ployee of a la'or
have 'een invalidated as 'ills of attainder.
>ut hen the 6udg"ent expressed in legislation is so universally ac!noledged to 'e
certain as to 'e $6udicially noticea'le&$ the legislature "ay apply its on rules& and 6udicial
hearing is not needed fairly to "a!e such deter"ination.
In 0ew Bor. ex rel. "ryant vs. Zimmerman&
the 7e For! legislature passed a la
re+uiring every secret& oath-'ound society ith a "e"'ership of at least tenty to register&
and punishing any person ho 6oined or re"ained a "e"'er of such a society failing to
register. ?hile the statute did not specify the Ju Jlux Jlan& in its operation the la applied
to the JJJ exclusively. In sustaining the statute against the clai" that it discri"inated
against the Ju Jlux Jlan hile exe"pting other secret& oath-'ound organi.ations li!e
Statutory Construction Syllabus 1
"asonic societies and the Jnights of Colu"'us& the @nited <tates <upre"e Court relied on
co""on !noledge of the nature and activities of the Ju Jlux Jlan. 5he Court said9
5he courts 'elo recogni.ed the principle shon in the cases 6ust cited and reached
the conclusion that the classification as 6ustified 'y a difference 'eteen the to
classes of associations shon 'y experience& and that the difference consisted (a) in a
"anifest tendency on the part of one class to "a!e the secrecy surrounding its purpose
and "e"'ership a cloa! for acts and conduct ini"ical to personal rights and pu'lic
elfare& and (') in the a'sence of such a tendency on the part of the other class. In
pointing out this difference one of the courts said of the Ju Jlux Jlan& the principal
association in the included class9 $It is a "atter of co""on !noledge that this
organi.ation functions largely at night& its "e"'ers disguised 'y hoods and gons and
doing things calculated to stri!e terror into the "inds of the people/$ and later said of the
other class9 $5hese organi.ations and their purposes are ell !non& "any of the"
having 'een in existence for "any years. 4any of the" are oath-'ound and secret. >ut
e hear no co"plaint against the" regarding violation of the peace or interfering ith
the rights of others.$ ,nother of the courts said9 $It is a "atter of co""on !noledge
that the association or organi.ation of hich the relator is concededly a "e"'er
exercises activities tending to the pre6udice and inti"idation of sundry classes of our
citi.ens. >ut the legislation is not confined to this society/$ and later said of the other
class9 $Ba'or unions have a recogni.ed laful purpose. 5he 'enevolent orders
"entioned in the >enevolent 2rders Ba have already received legislative scrutiny and
have 'een granted special privileges so that the legislature "ay ell consider the"
'eneficial rather than har"ful agencies.$ 5he third court& after $the
potentialities of evil in secret societies&$ and o'serving that $the danger of certain
organi.ations has 'een 6udicially de"onstrated&$ = "eaning in that state& = said9
$>enevolent orders& la'or unions and college fraternities have existed for "any years&
and& hile not i""une fro" hostile criticis"& have on the hole 6ustified their
?e assu"e that the legislature had 'efore it such infor"ation as as readily availa'le
including the pu'lished report of a hearing& 'efore a co""ittee of the %ouse of
1epresentatives of the 8Dth Congress relating to the for"ation& purposes and activities
of the Jlu Jlux Jlan. If so it as advised = putting aside controverted evidence = that
the order as a revival of the Ju Jlux Jlan of an earlier ti"e ith additional features
'orroed fro" the Jno 7othing and the ,. P. ,. orders of other periods/ that its
"e"'erships as li"ited to native-'orn& gentile& protestant hites/ that in part of its
constitution and printed creed it proclai"ed the idest freedo" for all and full
adherence to the Constitution of the @nited <tates/ in another exacted of its "e"'er an
oath to shield and preserve $hite supre"acy/$ and in still another declared any person
actively opposing its principles to 'e $a dangerous ingredient in the 'ody politic of our
country and an ene"y to the eal of our national co""onealth/$ that it as
conducting a crusade against Catholics& Ees& and 7egroes& and sti"ulating hurtful
religious and race pre6udices/ that it as striving for political poer and assu"ing a sort
of guardianship over the ad"inistration of local& state and national affairs/ and that at
ti"es it as ta!ing into its on hands the punish"ent of hat so"e of its "e"'ers
conceived to 'e cri"es.
In the Philippines the character of the Co""unist Party has 'een the o'6ect of continuing
scrutiny 'y this Court. In 1902 e found the Co""unist Party of the Philippines to 'e an
illegal association.
In 1969 e again found that the o'6ective of the Party as the
$overthro of the Philippine Aovern"ent 'y ar"ed struggle and to esta'lish in the
Philippines a co""unist for" of govern"ent si"ilar to that of <oviet 1ussia and 1ed
Statutory Construction Syllabus 1
4ore recently& in Lansang vs. *arcia&
e noted the groth of the Co""unist
Party of the Philippines and the organi.ation of Co""unist fronts a"ong youth
organi.ations such as the Ja'ataang 4a!a'ayan (J4) and the e"ergence of the 7e
PeopleCs ,r"y. ,fter "eticulously revieing the evidence& e said9 $?e entertain&
therefore& no dou'ts a'out the existence of a si.ea'le group of "en ho have pu'licly
risen in ar"s to overthro the govern"ent and have thus 'een and still are engaged in
re'ellion against the Aovern"ent of the Philippines.
0. 7or is it enough that the statute specify persons or groups in order that it "ay fall ithin
the a"'it of the prohi'ition against 'ills of attainder. It is also necessary that it "ust apply
retroactively and reach past conduct. 5his re+uire"ent follos fro" the nature of a 'ill of
attainder as a legislative ad6udication of guilt. ,s Eustice *ran!furter o'served& $fre+uently a
'ill of attainder as ... dou'ly o'6ectiona'le 'ecause of its ex post factofeatures. 5his is the
historic explanation for uniting the to "ischiefs in one clause = C7o >ill of ,ttainder or ex
post facto la shall 'e passed.C ... 5herefore& if Ga statuteH is a 'ill of attainder it is also
an ex post facto la. >ut if it is not an ex post facto la& the reasons that esta'lish that it is
not are persuasive that it cannot 'e a 'ill of attainder.$
5hus in *ardner vs. "oard of )ublic -or.s&
the @.<. <upre"e Court upheld the validity
of the Charter of the City of Bos ,ngeles hich provided9
... G7Ho person shall hold or retain or 'e eligi'le for any pu'lic office or e"ploy"ent in
the service of the City of Bos ,ngeles& in any office or depart"ent thereof& either elective
or appointive& ho has ithin five (8) years prior to the effective date of this section
advised& advocated& or taught& or ho "ay& after this section 'eco"es effective&
'eco"e a "e"'er of or affiliated ith any group& society& association& organi.ation or
party hich advises& advocates or teaches or has ithin said period of five (8) years
advised& advocated& or taught the overthro 'y force or violence of the Aovern"ent of
the @nited <tates of ,"erica or of the <tate of California.
In upholding the statute& the Court stressed the prospective application of the ,ct to the
petitioner therein& thus9
... I""aterial here is any opinion e "ight have as to the charter provision insofar as it
purported to apply restrospectively for a five-year period to its effective date. ?e
assu"e that under the *ederal Constitution the Charter ,"end"ent is valid to the
extent that it 'ars fro" the cityCs pu'lic service persons ho& su'se+uently to its
adoption in 19:1& advise& advocate& or reach the violent overthro of the Aovern"ent
or ho are or 'eco"e affiliated ith any group doing so. 5he provisions operating thus
prospectively ere a reasona'le regulation to protect the "unicipal service 'y
esta'lishing an e"ploy"ent +ualification of loyalty to the <tate and the @nited <tates.
... @nli!e the provisions of the charter and ordinance under hich petitioners ere
re"oved& the statute in the Bovett case did not declare general and prospectively
operative standards of +ualification and eligi'ility for pu'lic e"ploy"ent. 1ather& 'y its
ter"s it prohi'ited any further pay"ent of co"pensationto na"ed individuals or
e"ployees. @nder these circu"stances& vieed against the legislative 'ac!ground& the
statuteas held to have i"posed penalties ithout 6udicial trial.
Indeed& if one o'6ection to the 'ill of attainder is thatCongress there'y assu"ed 6udicial
"agistracy& the" it "ust'e de"onstrated that the statute clai"ed to 'e a 'ill of
attainderreaches past conduct and that the penalties it i"posesare inescapa'le. ,s the
Statutory Construction Syllabus 1
@.<. <upre"e Court o'servedith respect to the @.<. *ederal <u'versive ,ctivities
Control,ct of 19809
7or is the statute "ade an act of $outlary$ or of attainder'y the fact that the conduct
hich it regulates is descri'edith such particularity that& in pro'a'ility& fe
organi.ationsill co"e ithin the statutory ter"s. Begislatures "ay act tocur' 'ehaviour
hich they regard as har"ful to the pu'lic elfare&hether that conduct is found to 'e
engaged in 'y "anypersons or 'y one. <o long as the incidence of legislation issuch
that the persons ho engage in the regulated conduct& 'ethey "any or fe& can escape
regulation "erely 'y altering thecourse of their on present activities& there can 'e no
co"plaintof an attainder.
5his state"ent& mutatis mutandis& "ay 'e said of the,nti-<u'version ,ct. <ection : thereof
expressly statesthat the prohi'ition therein applies only to acts co""itted$,fter the
approval of this ,ct.$ 2nly those ho $!noingly&illfully and 'y overt acts affiliate
the"selves ith&'eco"e or re"ain "e"'ers of the Co""unist Party of thePhilippines
and)or its successors or of any su'versive association$after Eune 20& 198D& are punished.
5hose hoere "e"'ers of the Party or of any other su'versive associationat the ti"e of
the enact"ent of the la& eregiven the opportunity of purging the"selves of lia'ility
'yrenouncing in riting and under oath their "e"'ershipin the Party. 5he la expressly
provides that such renunciationshall operate to exe"pt such persons fro"
5he penalties prescri'ed 'y the ,ct are thereforenot inescapa'le.
!!!. $he Act and the 9equirements of Due )rocess
1. ,s already stated& the legislative declaration in section 2 of the ,ct that the Co""unist
Party of the Philippinesis an organi.ed conspiracy for the overthro of theAovern"ent is
inteded not to provide the 'asis for a legislativefinding of guilt of the "e"'ers of the Party
'utrather to 6ustify the proscription spelled out in section :. *reedo" of expression and
freedo" of association are sofunda"ental that they are thought 'y so"e to occupy
a$preferred position$ in the hierarchy of constitutional values.
,ccordingly& any li"itation
on their exercise "ust'e 6ustified 'y the existence of a su'stantive evil. 5his isthe reason
hy 'efore enacting the statute in +uestion Congressconducted careful investigations and
then stated itsfindings in the prea"'le& thus9
... G5Hhe Co""unist Party of the Philippines althoughpurportedly a political party& is in
fact an organi.ed conspiracyto overthro the Aovern"ent of the 1epu'lic of the
Philippinesnot only 'y force and violence 'ut also 'y deceit& su'versionand other illegal
"eans& for the purpose of esta'lishing in thePhilippines a totalitarian regi"e su'6ect to
alien do"inationand control/
... G5Hhe continued existence and activities of the Co""unistParty of the Philippines
constitutes a clear& present andgrave danger to the security of the Philippines/
... GIHn the face of the organi.ed& syste"atice and persistentsu'version& national in
scope 'ut international in direction&posed 'y the Co""unist Party of the Philippines
and its activities&there is urgent need for special legislation to cope iththis continuing
"enace to the freedo" and security of the country.
In truth& the constitutionality of the ,ct ould 'e opento +uestion if& instead of "a!ing these
findings in enactingthe statute& Congress o"itted to do so.
Statutory Construction Syllabus 1
In saying that 'y "eans of the ,ct Congress has assu"ed 6udicial "agistracy& the trial
courd failed to ta!eproper account of the distinction 'eteen legislative
fact and ad=udicative fact. Professor Paul *reund elucidatesthe crucial distinction& thus9
... , la for'idding the sale of 'everages containing"ore than 0.2 per cent of alcohol
ould raise a +uestion of legislativefact& i.e.& hether this standard has a reasona'le
relationto pu'lic health& "orals& and the enforce"ent pro'le". ,la for'idding the sale
of intoxicating 'everages (assu"ing itis not so vague as to re+uire supple"entation 'y
rule-"a!ing)ould raise a +uestion of ad6udicative fact& i.e.& hether thisor that
'everage is intoxicating ithin the "eaning of the statuteand the li"its on govern"ental
action i"posed 'y the Constitution. 2f course hat e "ean 'y fact in each case is
itselfan ulti"ate conclusion founded on underlying facts and oncriteria of 6udg"ent for
eighing the".
, conventional for"ulation is that legislative facts = those facts hich are relevant to
the legislative 6udg"ent = ill not 'e canvassed save to deter"ine hether there is a
rational'asis for 'elieving that they exist& hile ad6udicativefacts = those hich tie the
legislative enact"ent to the litigant = are to 'e de"onstrated and found according to
the ordinarystandards prevailing for 6udicial trials.
5he test for"ulated in 0ebbia vs. new Bor.&
andadopted 'y this Court in Lansang vs.
is that Cif las are seen to have a reasona'le relation to a proper legislative
purpose& and are neither ar'itrary nor discri"inatory& the re+uire"ents of due process are
satisfied& and 6udicial deter"ination to that effect renders a court functus officio.$ 5he recital
of legislative findings i"ple"ents this test.
?ith respect to a si"ilar state"ent of legislative findingsin the @.<. *ederal <u'versive
,ctivities Control ,ctof 1980 (that $Co""unist-action organi.ations$ are controlled'y the
foreign govern"ent controlling the orldCo""unist "ove"ent and that they operate
pri"arily to$advance the o'6ectives of such orld Co""unist "ove"ent$)&the @.<.
<upre"e Court said9
It is not for the courts to reexa"ine the validity of theselegislative findings and re6ect
the"....5hey are the productof extensive investigation 'y Co""ittes of Congress over
"orethan a decade and a half. Cf. 7e''ia v. 7e For!& 291 @.<.802& 816& 800. ?e
certainly cannot dis"iss the" as unfoundedirrational i"aginings. ... ,nd if e accept
the"& as e "ustas a not unentertaina'le appraisal 'y Congress of the threathich
Co""unist organi.ations pose not only to existing govern"entin the @nited <tates& 'ut
to the @nited <tates as asovereign& independent 7ation. ...e "ust recogni.e that
thepoer of Congress to regulate Co""unist organi.ations of thisnature is
5his state"ent& mutatis mutandis& "ay 'e said of thelegislative findings articulated in the
,nti-<u'version ,ct.
5hat the Aovern"ent has a right to protect itself againstsu'version is a proposition too
plain to re+uire ela'oration.<elf-preservation is the $ulti"ate value$ of society. It surpasses
and transcendes every other value& $forif a society cannot protect its very structure fro"
ar"edinternal attac!& su'ordinate value can 'e protected$
,s Chief Eustice 3inson
so aptly said in Dennis vs. Cnited %tates9
?hatever theoretical "erit there "ay 'e to the argu"entthat there is a CrightC to re'ellion
against dictatorial govern"entsis ithout force here the existing structure of
Statutory Construction Syllabus 1
govern"ent provides for peaceful and orderly change. ?e re6ectany principle of
govern"ental helplessness in the face of preparationfor revolution& hich principle&
carried to its logical conclusion&"ust lead to anarchy. 7o one could conceive that it isnot
ithin the poer of Congress to prohi'it acts intended tooverthro the govern"ent 'y
force and violence.
2. >y carefully deli"iting the reach of the ,ct to conduct (as explicitly descri'ed in sectin :
thereof)& Congressreaffir"ed its respect for the rule that $even throughthe govern"ental
purpose 'e legiti"ate and su'stantial&that purpose cannot 'e pursued 'y "eans that
'roadly stiflefunda"ental personal li'erties hen the end can 'e "ore narroly
5he re+uire"ent of .nowing "e"'ership&as distinguished
fro" nominal"e"'ership& has'een held as a sufficient 'asis for "e"'ershipin
a su'versive organi.ation.
*or& as has 'een stated9
4e"'ership in an organi.ation renders aid and encourage"ent to the organi.ation/ and
hen "e"'ership is acceptedor retained ith !noledge that the organi.ation is
engaged inan unlaful purpose& the one accepting or retaining "e"'ershipith such
!noledge "a!es hi"self a party to the unlafulenterprise in hich it is engaged.
0. 5he argu"ent that the ,ct is unconstitutionallyover'road 'ecause section 2 "erely
spea!s of $overthro$of the Aovern"ent and overthro "ay 'e achieved
'y peaceful "eans& "isconceives the function of the phrase$!noingly& illfully and 'y
overt acts$ in section :. <ection 2 is "erely a legislative declaration/ the definitionsof and
the penalties prescri'ed for the different acts prescri'edare stated in section : hich
re+uires that "e"'ershipin the Co""unist Party of the Philippines& to 'e unlaful& "ust
'e ac+uired $!noingly& illfully and 'y overt acts.$ Indeed& the first $hereas$ clause
"a!es clear thatthe overthro conte"plated is $overthro not only 'y forceand violence
'ut also 'e deceit& su'version and other illegal"eans.$ 5he a'sence of this +ualificatio in
section 2 appearsto 'e due "ore to an oversight rather than to deli'erateo"ission.
4oreover& the ord $overthroC sufficiently connotesthe use of violent and other illegal
"eans. 2nly in a "etaphoricalsense "ay one spea! of peaceful overthro ofgovern"ents&
and certainly the la does not spea! in "etaphors.In the case of the ,nti-<u'version ,ct&
the use ofthe ord $overthro$ in a "etaphorical sense is hardlyconsistent ith the clearly
delineated o'6ective of the $overthro&$na"ely& $esta'lishing in the Philippines a
totalitarianregi"e and place GsicH the Aovern"ent under thecontrol and do"ination of an
alien poer.$ ?hat thisCourt once said in a prosecution for sedition is appropos9 $5he
language used 'y the appellant clearly i"ported anoverthro of the Aovern"ent 'y
violence& and it should 'einterpreted in the plain and o'vious sense in hich it
asevidently intended to 'e understood. 5he ord CoverthroCcould not have 'een
intended as referring to an ordinarychange 'y the exercise of the elective franchise. 5he
useof the hip Ghich the accused exhorted his audience to useagainst the Consta'ularyH&
an instru"ent designed toleave "ar!s on the sides of adversaries& is inconsistentith the
"ild interpretation hich the appellant ouldhave us i"pute to the language.$
!D. $he Act and the *uaranty of Free 'xpression
,s already pointed out& the ,ct is ai"ed against conspiracies to overthro the Aovern"ent
'y force& violence orother illegal "eans. ?hatever interest in freedo" of speechand
freedo" of association is infringed 'y the prohi'itionagainst !noing "e"'ership in the
Co""unist Party ofthe Philippines& is so indirect and so insu'stantial as to 'eclearly and
heavily outeighed 'y the overriding considerationsof national security and the
preservartion of de"ocraticinstitutions in his country.
Statutory Construction Syllabus 1
5he "e"'ership clause of the @.<. *ederal <"ith ,ctis si"ilar in "any respects to the
"e"'ership provision ofthe ,nti-<u'version ,ct. 5he for"er provides9
?hoever or helps or atte"pts to organi.e anysociety& group& or asse"'ly of
persons ho teach& advocate& orencourage the overthro or destruction of any such
govern"ent'y force or violence/ or 'eco"es or is a "e"'er of& or affiliatedith& any
such society& group or asse"'ly of persons& !noingthe purpose thereof =
<hall 'e fined not "ore than Q20&000 or i"prisoned not"ore than tenty years& or 'oth&
and shall 'e ineligi'le for e"ply"ent'y the @nited <tates or any depart"ent or
agencythereof& for the five years next folloing his conviction....
In sustaining the validity of this provision& the $Court said in %cales vs. Cnited %tates9
It as settled in Dennis that advocacy ith hich e arehere concerned is not
constitutionally protected speech& and itas further esta'lished that a co"'ination to
pro"ote suchadvocacy& al'eit under the aegis of hat purports to 'e a politicalparty& is
not such association as is protected 'y the first,"end"ent. ?e can discern no reason
hy "e"'ership& henit constitutes a purposeful for" of co"plicity in a group
engagingin this sa"e for'idden advocacy& should receive anygreater degree of
protection fro" the guarantees of that ,"end"ent.
4oreover& as as held in another case& here the pro'le"sof acco""odating the
exigencies of self-preservationand the values of li'erty are as co"plex and intricate as
inthe situation descri'ed in the legislative findings stated inthe @.<. *ederal <u'versive
,ctivities Control ,ct of 1980&the legislative 6udg"ent as to ho that threat "ay 'est 'e"et
consistently ith the safeguards of personal freedo"sis not to 'e set aside "erely 'ecause
the 6udg"ent of 6udgesould& in the first instance& have chosen other "ethods.
*or in
truth& legislation& $hether it restrains freedo" tohire or freedo" to spea!& is itself an effort
at co"pro"ise'eteen the clai"s of the social order and individual freedo"&and hen the
legislative co"pro"ise in either case is'rought to the 6udicial test the court stands one step
re"ovedfro" the conflict and its resolution through la.$
D. $he Act and its $itle
5he respondent 5ayag invo!es the constitutional co""andthat $no 'ill hich "ay 'e
enacted into la shall e"'race "ore than one su'6ect hich shall 'e expressed in the title
of the 'ill.$
?hat is assailed as not ger"ane to or e"'raced in thetitle of the ,ct is the last proviso of
section : hich reads9
And provided# finally& 5hat one ho conspires ith anyother person to overthro the
Aovern"ent of the 1epu'lic ofthe Philippines& or the govern"ent of any of its political
su'divisions'y force& violence& deceit& su'version or illegal "eans&for the purpose of
placing such Aovern"ent or political su'divisionunder the control and do"ination of
any lien poer& shall'e punished 'y prision correccional to prision mayor ith allthe
accessory penalties provided therefor in the sa"e code.
It is argued that the said proviso& in reality& punishes notonly "e"'ership in the Co""unist
Party of the Philippinesor si"ilar associations& 'ut as ell $any conspiracy'y to persons
Statutory Construction Syllabus 1
to overthro the national or any local govern"ent'y illegal "eans& even if their intent is not
to esta'lisha totalitarian regi"e& 'urt a de"ocratic regi"e& evenif their purpose is not to
place the nation under an alienco""unist poer& 'ut under an alien de"ocratic poer
li!ethe @nited <tates or (ngland or 4alaysia or even an anti-co""unistpoer li!e <pain&
Eapan& 5hailand or 5aianor Indonesia.$
5he ,ct& in addition to its "ain title ($,n ,ct to 2utlathe Co""unist Party of the
Philippines and <i"ilar,ssociations& 4e"'ership 5herein& and for2ther
Purposes$)& has a short title. <ection 1 providesthat $5his ,ct shall 'e !non as the ,nti-
<u'version ,ct.$5ogether ith the "ain title& the short title of the statuteune+uivocally
indicates that the su'6ect "atter is su'versionin general hich has for its funda"ental
purpose the su'stitutionof a foreign totalitarian regi"e in place of theexisting Aovern"ent
and not "erely su'version 'y Co""unistconspiracies..
5he title of a 'ill need not 'e a catalogue or an indexof its contents& and need not recite the
details of the ,ct.
It is a valid title if it indicates in 'road 'ut clear ter"sthe nature& scope&
and conse+uences of the proposed laand its operation.
, narro or technical
construction isto 'e avoided& and the statute ill 'e read fairly and reasona'lyin order not
to thart the legislative intent. ?e holdthat the ,nti-<u'version ,ct fully satisfies these
D!. onclusion and *uidelines
In conclusion& even as e uphold the validity of the,nti-<u'version ,ct& e cannot
overe"phasi.e the needfor prudence and circu"spection in its enforce"ent& operatingas it
does in the sensitive area of freedo" of expressionand 'elief. ,ccordingly& e set the
folloing basic guidelines to 'e o'served in any prosecution under the ,ct.5he
Aovern"ent& in addition to proving such circu"stancesas "ay affect lia'ility& "ust esta'lish
the folloing ele"entsof the cri"e of 6oining the Co""unist Party of the Philippinesor any
other su'versive association9
(1) In the case of su'versive organi.ations other thanthe Co""unist Party of the
Philippines& (a) that thepurpose of the organi.ation is to overthro the presentAovern"ent
of the Philippines and to esta'lish in thiscountry a totalitarian regi"e under the do"ination
of aforeign poer/ (') that the accused 6oined such organi.ation/and (c) that he did so
!noingly& illfully and 'yovert acts/ and
(2) In the case of the Co""unist Party of the Philippines&(a) that the CPP continues to
pursue the o'6ectiveshich led Congress in 198D to declare it to 'e an
organi.edconspiracy for the overthro of the Aovern"ent 'y illegal"eans for the purpose
of placing the country under thecontrol of a foreign poer/ (') that the accused 6oined
theCPP/ and (c) that he did so illfully& !noingly and 'yovert acts.
?e refrain fro" "a!ing any pronounce"ent as to thecri"e or re"aining a "e"'er of the
Co""unist Party ofthe Philippines or of any other su'versive association9 eleave this
"atter to future deter"ination.
,CC21#I7ABF& the +uestioned resolution of <epte"'er18& 19D0 is set aside& and these
to cases are here'yre"anded to the court a +uo for trial on the "erits. Costs de oficio.

Statutory Construction Syllabus 1
V. !biguit", need of
(G.R. No. 170735, December 17, 2007)
5his is petition for revie on ertiorari under 1ule :8 of the 1ules of Court is assailing the
2 Eune 2008 #ecision
and ; #ece"'er 2008 1esolution
'oth of the Court of ,ppeals in
C,-A.1. <P 7o. ;8920. the appellate court affir"ed the --- 2rder and --- 1esolution 'oth of
the <ocial <ecurity Co""ission (<<C) in <<C Case 7o. 100:;& finding I""aculada B.
Aarcia (Aarcia)& the sole surviving director of I"pact Corporation& petitioner herein& lia'le
for unre"itted& al'eit collected& <<< contri'utions.
Petitioner I""aculada B. Aarcia& (duardo de Beon& 1icardo de Beon& Pacita *ernande.&
and Consuelo 3illanueva ere directors
of I"pact Corporation. 5he corporation as
engaged in the 'usiness of "anufacturing alu"inu" tu'e containers and operated to
factories. 2ne as a $slug$ foundry-factory located in Cuyapo& 7ueva (ci6a& hile the other
as an (xtrusion Plant in Cainta& 4etro 4anila& hich processed the $slugs$ into alu"inu"
collapsi'le tu'es and si"ilar containers for toothpaste and other related products.
1ecords sho that around 19D;& I"pact Corporation started encountering financial
pro'le"s. >y 19;0& la'or unrest 'esieged the corporation.
In 4arch 19;0& I"pact Corporation filed ith the <ecurities and (xchange Co""ission
(<(C) a Petition for <uspension of Pay"ents&
doc!eted as <(C Case 7o. 02:20& in hich
it stated that9
GI"pact CorporationH has 'een and still is engaged in the 'usiness of "anufacturing
alu"inu" tu'e containers x x x.
x x x x
In 'rief& it is an on-going& via'le& and profita'le enterprise.
2n ; 4ay 19;8& the union of I"pact Corporation filed a 7otice of <tri!e ith the 4inistry of
Ba'or hich as folloed 'y a declaration of stri!e on 2; Euly 19;8. <u'se+uently& the
4inistry of Ba'or certified the la'or dispute for co"pulsory ar'itration to the 7ational Ba'or
1elations Co""ission (7B1C) in an 2rder
dated 28 ,ugust 19;8. 5he 4inistry of Ba'or& in
the sa"e 2rder& noted the ina'ility of I"pact Corporation to pay ages& 10
"onth pay& and
<<< re"ittances due to cash li+uidity pro'le"s. , portion of the order reads9
2n the clai"s of unpaid ages& unpaid 10
"onth pay and non-re"ittance of loan
a"orti.ation and <<< pre"iu"s& e are for directing the co"pany to pay the sa"e to
the or!ers and to re"it loan a"orti.ations and <<< pre"iu"s previously deducted
fro" their ages to the <ocial <ecurity <yste". <uch clai"s ere never contested 'y
the co"pany 'oth during the hearing 'elo and in our office. In fact& such clai"s ere
Statutory Construction Syllabus 1
ad"itted 'y the co"pany although it alleged cash li+uidity as the "ain reason for such
?%(1(*21(& the dispute at I"pact Corporation is here'y certified to the 7ational
Ba'or 1elations Co""ission for co"pulsory ar'itration in accordance ith ,rticle 26:
(g) of the Ba'or Code& as a"ended.
x x x x
5he co"pany is directed to pay all the entitled or!ers unpaid ages& unpaid
"onth pay and to re"it to the <ocial <ecurity <yste" loan a"orti.ations and <<<
pre"iu"s previously deducted fro" the ages of the or!ers.
2n 0 Euly 19;8& the <ocial <ecurity <yste" (<<<)& through its Begal and Collection
#ivision (BC#)& filed a case 'efore the <<C for the collection of unre"itted <<< pre"iu"
contri'utions ithheld 'y I"pact Corporation fro" its e"ployees. 5he case hich
i"pleaded I"pact Corporation as respondent as doc!eted as <<C Case 7o. 100:;.
I"pact Corporation as co"pulsorily covered 'y the <<< as an e"ployer effective 18 Euly
1960 and as assigned ("ployer I.#. 7o. 00-2D:8100-21.
In anser to the allegations raised in <<C Case 7o. 100:;& I"pact Corporation& through its
then 3ice President 1icardo de Beon& explained in a letter dated 1; Euly 19;8 that it had
'een confronted ith stri!es in 19;: and layoffs ere effected thereafter. It further argued
that the P:02&9;;.90 is erroneous. It explained a"ong other things& that its operations had
'een suspended and that it as aiting for the resolution on its Petition for <uspension of
Pay"ents 'y the <(C under <(C Case 7o. 2:20. #espite due notice& the corporation
failed to appear at the hearings. 5he <<C ordered the investigating tea" of the <<< to
deter"ine if it can still file its clai" for unpaid pre"iu" contri'utions against the corporation
under the Petition for <uspension of Pay"ents.
In the "eanti"e& the Petition for <uspension of Pay"ents as dis"issed hich as
pending 'efore the <(C in an 2rder
dated 12 #ece"'er 19;8. I"pact Corporation
resu"ed operations 'ut only for its inding up and dissolution.
#ue to I"pact
CorporationRs lia'ility and cash flo pro'le"s& all of its assets& na"ely& its "achineries&
e+uip"ent& office furniture and fixtures& ere sold to scrap dealers to anser for its arrears
in rentals.
2n 1 #ece"'er 1998& the <<<-BC# filed an a"ended Petition
in <<C Case 7o. 100:;
herein the directors of I"pact Corporation ere directly i"pleaded as respondents&
na"ely9 (duardo de Beon& 1icardo de Beon&
Pacita *ernande.& Consuelo 3illanueva& and
petitioner. 5he a"ounts sought to 'e collected totaled P:80&;:8.D; and P10&;86.;8 for the
periods ,ugust 19;0 to #ece"'er 19;: and ,ugust 19;1 to Euly 19;:& respectively& and
the penalties for late re"ittance at the rate of 0M per "onth fro" the date the contri'utions
fell due until fully paid pursuant to <ection 22(a) of the <ocial <ecurity Ba&
as a"ended&
in the a"ounts of P:9&9:1.6D andP2&:D:&662.;2.
Period @nre"itted
(0M Interest Per 4onth)
,ugust 19;0 to
#ece"'er 19;:
P :80&;:8.D; P:9& 9:1.6D 800&D;D.:8
,ugust 19;1 to
Euly 19;:
P 10&;86.;8 P2& :D:& 662.;2 2&:;8&819.6D
Statutory Construction Syllabus 1
<u""onses ere not served upon (duardo de Beon& Pacita *ernande.& and Consuelo
3illanueva& their herea'outs un!non. 5hey ere all later deter"ined to 'e deceased. 2n
the other hand& due to failure to file his responsive pleading& 1icardo de Beon as declared
in default.
Petitioner filed ith the <<C a 4otion to #is"iss
on grounds of prescription& lac! of cause
of action and cessation of 'usiness& 'ut the 4otion as denied for lac! of "erit.
In her
,nser ith Counterclai"
dated 20 4ay 1999& petitioner averred that I"pact Corporation
had ceased operations in 19;0. In her defense& she insisted that she as a "ere director
ithout "anagerial functions& and she ceased to 'e such in 19;2. (ven as a stoc!holder
and director of I"pact Corporation& petitioner contended that she cannot 'e "ade
personally lia'le for the corporate o'ligations of I"pact Corporation since her lia'ility
extended only up to the extent of her unpaid su'scription& of hich she had none since her
su'scription as already fully paid. 5he petitioner raised the sa"e argu"ents in her
Position Paper.
2n 20 Eanuary 199;& 1icardo de Beon died folloing the death& too& of Pacita *ernande.
died on D *e'ruary 2000. In an 2rder dated 11 ,pril 2000& the <<C directed the <yste" to
chec! if I"pact Corporation had levia'le properties to hich the investigating tea" of
respondent <<< "anifested that the I"pact Corporation had already 'een dissolved and
its assets disposed of.
In a 1esolution dated 2; 4ay 2000& the <ocial <ecurity Co""ission ruled in favor of <<<
and declared petitioner lia'le to pay the unre"itted contri'utions and penalties& stating the
?%(1(*21(& pre"ises considered& this Co""ission finds& and so holds& that
respondents I"pact Corporation and)or I""aculada B. Aarcia& as director and
responsi'le officer of the said corporation& is lia'le to pay the <<< the a"ounts of
P::2&9;;.90& representing the unpaid << contri'utions of their e"ployees for the period
,ugust 19;0 to #ece"'er 19;:& not inclusive& and P10&;86.;8& representing the
'alance of the unpaid << contri'utions in favor of #onato Ca"pos& Eai"e 4ascarenas&
>onifacio *ranco and 1o"eo *ullon for the period ,ugust 19;0 to #ece"'er 19;:& not
inclusive& as ell as the 0M per "onth penalty i"posed thereon for late pay"ent in the
a"ounts of P0&19:&8:;.60 and PD;&::1.00& respectively& co"puted as of ,pril 00& 2000.
5his is ithout pre6udice to the right of the <<< to collect the penalties accruing after
,pril 00& 2000 and to institute other appropriate actions against the respondent
corporation and)or its responsi'le officers.
<hould the respondents pay their lia'ility for unpaid <<< contri'utions ithin sixty (60)
days fro" receipt of a copy of this 1esolution& the 0M per "onth penalty for late
pay"ent thereof shall 'e dee"ed condoned pursuant to <<C 1es. 7o. 09D-<.9D& as
a"ended 'y <<C 1es. 7os. 112-<.9; and 9;2-<.99& i"ple"enting the provision on
condonation of penalty under <ection 00 of 1.,. 7o. ;2;2.
In the event the respondents fail to pay their lia'ilities ithin the aforestated period& let a
rit of execution 'e issued& pursuant to <ection 22 (c) G2H of the << Ba& as a"ended&
for the satisfaction of their lia'ilities to the <<<.
Petitioner filed a 4otion for 1econsideration
of the afore-+uoted #ecision 'ut it as
denied for lac! of "erit in an 2rder
dated : ,ugust 200:& thus9
7ohere in the +uestioned 1esolution dated 4ay 2;& 2000 is it stated that the other
directors of the defunct I"pact Corporation are a'solved fro" their contri'ution and
Statutory Construction Syllabus 1
penalty lia'ilities to the <<<. It is certainly farthest fro" the intention of the petitioner
<<< or this Co""ission to pin the entire lia'ility of I"pact Corporation on "ovant
I""aculada B. Aarcia& to the exclusion of the directors of the corporation na"ely9
(duardo de Beon& 1icardo de Beon& Pacita *ernande. and Con.uelo 3illanueva& ho
ere all i"pleaded as parties-respondents in this case.
5he case record shos that there as failure of service of su""onses upon
respondents (duardo de Beon& Pacita *ernande. and Con.uelo 3illanueva& ho are all
deceased& for the reason that their herea'outs are un!non. 4oreover& neither the
legal heirs nor the estate of the defaulted respondent 1icardo de Beon ere su'stituted
as parties-respondents in this case hen he died on Eanuary 20& 199;. 7eedless to
state& the Co""ission did not ac+uire 6urisdiction over the persons or estates of the
other directors of I"pact Corporation& hence& it could not validly render any
pronounce"ent as to their lia'ilities in this case.
*urther"ore& the "ovant cannot raise in a "otion for reconsideration the defense that
she as no longer a director of I"pact Corporation in 19;2& hen she as allegedly
eased out 'y the "anaging directors of I"pact Corporation as purportedly shon in the
#eed of <ale and ,ssign"ent of <hares of <toc! dated Eanuary 22& 19;2. 5his defense
as neither pleaded in her 4otion to #is"iss dated Eanuary 1D& 1996 nor in her ,nser
ith Counterclai" dated 4ay 1;& 1999 and is& thus& dee"ed aived pursuant to <ection
1& 1ule 9 of the 199D 1ules of Civil Procedure& hich has suppletory application to the
1evised 1ules of Procedure of the Co""ission.
*inally& this Co""ission has already ruled in the 2rder dated ,pril 2D& 1999 that since
the original Petition as filed 'y the <<< on Euly 0& 19;8& and as "erely a"ended on
#ece"'er 1& 1998 to i"plead the responsi'le officers of I"pact Corporation& ithout
changing its causes of action& the sa"e as instituted ell ithin the 20-year
prescriptive period provided under <ection 22 (') of the << Ba& as a"ended&
considering that the contri'ution delin+uency assess"ent covered the period ,ugust
19;0 to #ece"'er 19;:.
In vie thereof& the instant 4otion for 1econsideration is here'y denied for lac! of "erit.
Petitioner elevated her case to the Court of ,ppeals via a Petition for 1evie. 1espondent
<<< filed its Co""ent dated 20 Eanuary 2008& and petitioner su'"itted her 1eply thereto
on : ,pril 2008.
5he Court of ,ppeals& applying <ection 2;(f) of the <ocial <ecurity Ba&
again ruled
against petitioner. It dis"issed the petitionerRs Petition in a #ecision dated 2 Eune 2008& the
dispositive portion of hich reads9
?%(1(*21(& pre"ises considered& the petition is #I<4I<<(# for lac! of "erit. 5he
assailed 1esolution dated 2; 4ay 2000 and the 2rder dated : ,ugust 200: of the
<ocial <ecurity Co""ission are ,**I14(# in toto.
,ggrieved& petitioner filed a 4otion for 1econsideration of the appellate courtRs #ecision 'ut
her 4otion as denied in a 1esolution dated ; #ece"'er 2008.
%ence& the instant Petition in hich petitioner insists that the Court of ,ppeals co""itted
grave error in holding her solely lia'le for the collected 'ut unre"itted <<< pre"iu"
Statutory Construction Syllabus 1
contri'utions and the conse+uent late penalty pay"ents due thereon. Petitioner anchors
her Petition on the folloing argu"ents9
I. <(C5I27 2;(*) 2* 5%( <<< B,? P123I#(< 5%,5 , 4,7,AI7A %(,#&
#I1(C521 21 P,157(1 I< BI,>B( 27BF *21 5%( P(7,B5I(< 2* 5%(
(4PB2F(1 C21P21,5I27 ,7# 725 *21 @7P,I# <<< C2751I>@5I27< 2*
5%( (4PB2F(1 C21P21,5I27.
II. @7#(1 5%( <<< B,?& I5 I< 5%( 4,7,AI7A %(,#<& #I1(C521< 21
P,157(1< ?%2 <%,BB >( BI,>B( 52A(5%(1 ?I5% 5%( C21P21,5I27. I7
5%I< C,<(& P(5I5I27(1 %,< C(,<(# 52 >( , <52CJ%2B#(1 2* I4P,C5
C21P21,5I27 I7 19;2. (3(7 ?%IB( <%( ?,< , <52CJ%2B#(1& <%(
7(3(1 P,15ICIP,5(# I7 5%( #,IBF 2P(1,5I27< 2* I4P,C5
III. @7#(1 <(C5I27 01 2* 5%( C21P21,5I27 C2#(& 27BF #I1(C521<&
51@<5((< 21 2**IC(1< ?%2 P,15ICIP,5( I7 @7B,?*@B ,C5< 21 ,1(
A@IB5F 2* A12<< 7(ABIA(7C( ,7# >,# *,I5% <%,BB >( P(1<27,BBF
BI,>B(. 25%(1?I<(& >(I7A , 4(1( <52CJ%2B#(1& <%( I< BI,>B( 27BF
52 5%( (O5(75 2* %(1 <@><C1IP5I27.
I3. I4P,C5 C21P21,5I27 <@**(1(# I11(3(1<I>B( (C2724IC B2<<(<&
(3(75< ?%IC% ?(1( 7(I5%(1 #(<I1(# 721 C,@<(# >F ,7F ,C5 2* 5%(
P(5I5I27(1. 5%@<& >F 1(,<27 2* *215@I52@< (3(75<& 5%( P(5I5I27(1
<%2@B# >( ,><2B3(# *124 BI,>IBI5F.
3. 1(<P27#(75 <2CI,B <(C@1I5F <F<5(4 *,IB(# 4I<(1,>BF I7
(O(15I7A (**215< 52 ,CL@I1( E@1I<#IC5I27 23(1 5%( B(3I,>B(
,<<(5< 2* I4P,C5 C21P21,5I27& P(1<27)< ,7#)21 (<5,5()< 2* 5%(
25%(1 #I1(C521< 21 2**IC(1< 2* I4P,C5 C21P21,5I27.
3I. 5%( %2721,>B( C244I<<I27 <(1I2@<BF (11(# I7 725 1(7#(1I7A ,
E@#A4(75 >F #(*,@B5 ,A,I7<5 5%( #I1(C521< @P27 ?%24 I5
,CL@I1(# E@1I<#IC5I27.
>ased on the foregoing& petitioner prays that the #ecision dated 2 Eune 2008 and the
1esolution dated ; #ece"'er 2008 of the Court of ,ppeals 'e reversed and set aside& and
a ne one 'e rendered a'solving her of any and all lia'ilities under the <ocial <ecurity
In su"& the core issue to 'e resolved in this case is hether or not petitioner& as the only
surviving director of I"pact Corporation& can 'e "ade solely lia'le for the corporate
o'ligations of I"pact Corporation pertaining to unre"itted <<< pre"iu" contri'utions and
penalties therefore.
,s a covered e"ployer under the <ocial <ecurity Ba& it is the o'ligation of I"pact
Corporation under the provisions of <ections 1;& 19 and 22 thereof& as a"ended& to deduct
fro" its duly covered e"ployeeRs "onthly salaries their shares as pre"iu" contri'utions
and re"it the sa"e to the <<<& together ith the e"ployerRs shares of the contri'utions to
the petitioner& for and in their 'ehalf.
Statutory Construction Syllabus 1
*ro" all indications& the corporation has already 'een dissolved. 1espondents are no
going after petitioner ho is the only surviving director of I"pact Corporation.
, cursory revie of the alleged grave errors of la co""itted 'y the Court of ,ppeals
a'ove reveals there see"s to 'e no dispute as to the assessed lia'ility of I"pact
Corporation for the unre"itted <<< pre"iu"s of its e"ployees for the period Eanuary 19;0
to #ece"'er 19;:.
5here is also no dispute as to the fact that the e"ployeesR <<< pre"iu" contri'utions have
'een deducted fro" their salaries 'y I"pact Corporation.
Petitioner in assailing the Court of ,ppeals #ecision& distinguishes the penalties fro" the
unre"itted or unpaid <<< pre"iu" contri'utions. <he points out that although the
appellate court is of the opinion that the concerned officers of an e"ployer corporation are
lia'le for the penalties for non-re"ittance of pre"iu"s& it still affir"ed the <<C 1esolution
holding petitioner lia'le for the unpaid %%% premium contributions in addition to the
Petitioner avers that under the aforesaid provision& the lia'ility does not include lia'ility for
the unre"itted <<< pre"iu" contri'utions.
PetitionerRs argu"ent is ridiculous. 5he interpretation petitioner ould li!e us to adopt finds
no support in la or in 6urisprudence. ?hile the Court of ,ppeals #ecision provided that
<ection 2;(f) refers to the lia'ilities pertaining to penalty for the non-re"ittance of <<<
e"ployee contri'utions& holding that it is distinct fro" the a"ount of the supposed <<<
re"ittances& petitioner "ista!enly concluded that <ection 2;(f) is applica'le only to
penalties and not to the lia'ility of the e"ployer for the unre"itted pre"iu" contri'utions.
Clearly& a si"plistic interpretation of the la is untena'le. It is a rule in statutory
construction that every part of the statute "ust 'e interpreted ith reference to the
context& i.e.& that every part of the statute "ust 'e considered together ith the other parts&
and !ept su'servient to the general intent of the hole enact"ent.
5he lia'ility i"posed
as conte"plated under the foregoing <ection 2;(f) of the <ocial <ecurity Ba does not
preclude the lia'ility for the unre"itted a"ount. 1elevant to <ection 2;(f) is <ection 22 of
the sa"e la.
<(C. 22. 9emittance of ontributions. -- (a) 5he contri'utions i"posed in the preceding
<ection shall 'e re"itted to the <<< ithin the first ten (10) days of each calendar
"onth folloing the "onth for hich they are applica'le or ithin such ti"e as the
Co""ission "ay prescri'e. (very e"ployer re+uired to deduct and to re"it such
contri'utions shall 'e lia'le for their pay"ent and if any contri'ution is not paid to the
<<< as herein prescri'ed& he shall pay 'esides the contri'ution a penalty thereon of
three percent (0M) per "onth fro" the date the contri'ution falls due until paid. If
dee"ed expedient and advisa'le 'y the Co""ission& the collection and re"ittance of
contri'utions shall 'e "ade +uarterly or se"i-annually in advance& the contri'utions
paya'le 'y the e"ployees to 'e advanced 'y their respective e"ployers9 )rovided# 5hat
upon separation of an e"ployee& any contri'ution so paid in advance 'ut not due shall
'e credited or refunded to his e"ployer.
@nder <ection 22(a)& every employer is required to deduct and remit such
contributions penalty refers to the 0M penalty that auto"atically attaches to the delayed
<<< pre"iu" contri'utions. 5he spirit& rather than the letter of a la deter"ines
construction of a provision of la. It is a cardinal rule in statutory construction that in
interpreting the "eaning and scope of a ter" used in the la& a careful revie of the whole
law involved& as ell as the intend"ent of the la& "ust 'e "ade.
7ohere in the
Statutory Construction Syllabus 1
provision or in the #ecision can it 'e inferred that the persons lia'le are a'solved fro"
paying the unre"itted pre"iu" contri'utions.
(le"entary is the rule that hen las or rules are clear& it is incu"'ent upon the 6udge to
apply the" regardless of personal 'elief or predilections - hen the la is una"'iguous
and une+uivocal& application not interpretation thereof is i"perative.
%oever& here the
language of a statute is vague and a"'iguous& an interpretation thereof is resorted to. ,n
interpretation thereof is necessary in instances here a literal interpretation ould 'e either
i"possi'le or a'surd or ould lead to an in6ustice. , la is dee"ed a"'iguous hen it is
capa'le of 'eing understood 'y reasona'ly ell-infor"ed persons in either of to or "ore
5he fact that a la ad"its of different interpretations is the 'est evidence that it is
vague and a"'iguous.
In the instant case& petitioner interprets <ection 2;(f) of the <ocial
<ecurity Ba as applica'le only to penalties and not to the lia'ility of the e"ployer for the
unre"itted pre"iu" contri'utions. 1espondents present a "ore logical interpretation that
is consistent ith the provisions as a hole and ith the legislative intent 'ehind the <ocial
<ecurity Ba.
5his Court cannot 'e "ade to accept an interpretation that ould defeat the intent of the
la and its legislators.
Petitioner also challenges the finding of the Court of ,ppeals that under <ection 2;(f) of the
<ocial <ecurity Ba& a "ere director or officer of an e"ployer corporation& and not
necessarily a $"anaging$ director or officer& can 'e held lia'le for the unpaid <<< pre"iu"
<ection 2;(f) of the <ocial <ecurity Ba provides the folloing9
(f) If the act or o"ission penali.ed 'y this ,ct 'e co""itted 'y an association&
partnership& corporation or any other institution& its "anaging head& directors or partners
shall 'e lia'le to the penalties provided in this ,ct for the offense.
5his Court agrees in petitionerRs o'servation that the <<< did not even deny nor re'ut the
clai" that petitioner as not the $"anaging head$ of I"pact Corporation. %oever& the
Court of ,ppeals rightly held that petitioner& as a director of I"pact Corporation& is a"ong
those officers covered 'y <ection 2;(f) of the <ocial <ecurity Ba.
Petitioner invo!es the rule in statutory construction called e=usdem generic/ that is& here
general ords follo an enu"eration of persons or things& 'y ords of a particular and
specific "eaning& such general ords are not to 'e construed in their idest extent& 'ut are
to 'e held as applying only to persons or things of the sa"e !ind or class as those
specifically "entioned. ,ccording to petitioner& to 'e held lia'le under <ection 2;(f) of the
<ocial <ecurity Ba& one "ust 'e the $"anaging head&$ $"anaging director&$ or $"anaging
partner.$ 5his Court though finds no need to resort to statutory construction. <ection 2;(f) of
the <ocial <ecurity Ba i"poses penalty on9
(1) the "anaging head/
(2) directors/ or
(0) partners& for offenses co""itted 'y a 6uridical person
5he said provision does not +ualify that the director or partner should li!eise 'e a
$"anaging director$ or $"anaging partner.$
5he la is clear and una"'iguous.
Petitioner nonetheless raises the defense that under <ection 01 of the Corporation Code&
only directors& trustees or officers ho participate in unlaful acts or are guilty of gross
negligence and 'ad faith shall 'e personally lia'le& and that 'eing a "ere stoc!holder& she
is lia'le only to the extent of her su'scription.
Statutory Construction Syllabus 1
<ection 01 of the Corporation Code& stipulating on the lia'ility of directors& trustees& or
officers& provides9
<(C. 01. Liability of directors# trustees or officers. - #irectors or trustees ho illfully
and !noingly vote for or assent to patently unlaful acts of the corporation or ho are
guilty of gross negligence or 'ad faith in directing the affairs of the corporation or
ac+uire any personal or pecuniary interest in conflict ith their duty as such directors& or
trustees shall 'e lia'le 6ointly and severally for all da"ages resulting therefro" suffered
'y the corporation& its stoc!holders or "e"'ers and other persons.
>asic is the rule that a corporation is invested 'y la ith a personality separate and
distinct fro" that of the persons co"posing it as ell as fro" that of any other legal entity
to hich it "ay 'e related. , corporation is a 6uridical entity ith legal personality separate
and distinct fro" those acting for and in its 'ehalf and& in general& fro" the people
co"prising it. *olloing this& the general rule applied is that o'ligations incurred 'y the
corporation& acting through its directors& officers and e"ployees& are its sole lia'ilities.
director& officer& and e"ployee of a corporation are generally not held personally lia'le for
o'ligations incurred 'y the corporation.
>eing a "ere fiction of la& hoever& there are peculiar situations or valid grounds that can
exist to arrant the disregard of its independent 'eing and the lifting of the corporate veil.
5his situation "ight arise hen a corporation is used to evade a 6ust and due o'ligation or
to 6ustify a rong& to shield or perpetrate fraud& to carry out other si"ilar un6ustifia'le ai"s
or intentions& or as a su'terfuge to co""it in6ustice and so circu"vent the la.
<ection 01 of the Corporation Ba provides9
5a!ing a cue fro" the a'ove provision& a corporate director& a trustee or an officer& "ay 'e
held solidarily lia'le ith the corporation in the folloing instances9
1. ?hen directors and trustees or& in appropriate cases& the officers of
a corporation=
(a) vote for or assent to patently unlaful acts of the corporation/
(') act in 'ad faith or ith gross negligence in directing the corporate affairs/
(c) are guilty of conflict of interest to the pre6udice of the corporation& its stoc!holders
or "e"'ers& and other persons.
2. ?hen a director or officer has consented to the issuance of atered stoc!s or ho&
having !noledge thereof& did not forthith file ith the corporate secretary his ritten
o'6ection thereto.
0. ?hen a director& trustee or officer has contractually agreed or stipulated to hold
hi"self personally and solidarily lia'le ith the Corporation.
:. ?hen a director& trustee or officer is "ade& 'y specific provision of la& personally
lia'le for his corporate action.
5he aforesaid provision states9
<(C. 01. Liability of directors# trustees or officers. - #irectors or trustees ho illfully
and !noingly vote for or assent to patently unlaful acts of the corporation or ho are
guilty of gross negligence or 'ad faith in directing the affairs of the corporation or
Statutory Construction Syllabus 1
ac+uire any personal or pecuniary interest in conflict ith their duty as such directors& or
trustees shall 'e lia'le 6ointly and severally for all da"ages resulting therefro" suffered
'y the corporation& its stoc!holders or "e"'ers and other persons.
5he situation of petitioner& as a director of I"pact Corporation hen said corporation failed
to re"it the <<< pre"iu" contri'utions falls exactly under the fourth situation. <ection 2;(f)
of the <ocial <ecurity Ba i"poses a civil lia'ility for any act or o"ission pertaining to the
violation of the <ocial <ecurity Ba& to it9
(f) If the act or o"ission penali.ed 'y this ,ct 'e co""itted 'y an association&
partnership& corporation or any other institution& its "anaging head& directors or partners
shall 'e lia'le to the penalties provided in this ,ct for the offense.
In fact& cri"inal actions for violations of the <ocial <ecurity Ba are also provided under the
1evised Penal Code. 5he <ocial <ecurity Ba provides& in <ection 2; thereof& to it9
(h) ,ny e"ployer ho& after deducting the "onthly contri'utions or loan a"orti.ations
fro" his e"ployeesR co"pensation& fails to re"it the said deductions to the <<< ithin
thirty (00) days fro" the date they 'eca"e due shall 'e presu"ed to have
"isappropriated such contri'utions or loan a"orti.ations and shall suffer the penalties
provided in ,rticle 5hree hundred fifteen of the 1evised Penal Code.
(i) Cri"inal action arising fro" a violation of the provisions of this ,ct "ay 'e
co""enced 'y the <<< or the e"ployee concerned either under this ,ct or in
appropriate cases under the 1evised Penal Code9 x x x.
1espondents ould li!e this Court to apply another exception to the rule that the persons
co"prising a corporation are not personally lia'le for acts done in the perfor"ance of their
5he Court of ,ppeals in the appealed #ecision stated9
,nent the unpaid <<< contri'utions of I"pact CorporationRs e"ployees& the officers of a
corporation are lia'le in 'ehalf of a corporation& hich no longer exists or has ceased
operations. ,lthough as a rule& the officers and "e"'ers of a corporation are not
personally lia'le for acts done in perfor"ance of their duties& this rule ad"its of
exception& one of hich is hen the e"ployer corporation is no longer existing and is
una'le to satisfy the 6udg"ent in favor of the e"ployee& the officers should 'e held
lia'le for acting on 'ehalf of the corporation. *olloing the foregoing pronounce"ent&
petitioner& as one of the directors of I"pact Corporation& together ith the other
directors of the defunct corporation& are lia'le for the unpaid <<< contri'utions of their
2n the other hand& the <<C& in its 1esolution& presented this discussion9
,lthough as a rule& the officers and "e"'ers of a corporation are not personally lia'le
for acts done in the perfor"ance of their duties& this rule ad"its of exceptions& one of
hich is hen the e"ployer corporation is no longer existing and is una'le to satisfy the
6udg"ent in favor of the e"ployee& the officers should 'e held lia'le for acting on 'ehalf
of the corporation. x x x.
5he rationale cited 'y respondents in the to preceding paragraphs need not have 'een
applied 'ecause the personal lia'ility for the unre"itted <<< pre"iu" contri'utions and
Statutory Construction Syllabus 1
the late penalty thereof attaches to the petitioner as a director of I"pact Corporation during
the period the a"ounts 'eca"e due and de"anda'le 'y virtue of a direct provision of la.
PetitionerRs defense that since I"pact Corporation suffered irreversi'le econo"ic losses&
and 'y reason of fortuitous events& she should 'e a'solved fro" lia'ility& is also untena'le.
5he evidence adduced totally 'elies this clai". , reference to the copy of the Petition for
<uspension of Pay"ents filed 'y I"pact Corporation on 1; 4arch 19;0 'efore the <(C
contained an ad"ission that9
$GIHt has 'een and still is engaged in 'usiness$ and $has 'een and still is engaged in the
'usiness of "anufacturing alu"inu" tu'e containers$ and $in 'rief& it is an on-going&
via'le& and profita'le enterprise$ hich has $sufficient assets$ and $actual and potential
inco"e-generation capa'ilities.$
5he foregoing docu"ent negates petitionerRs assertion and supports the contention that
during the period involved I"pact Corporation as still engaged in 'usiness and as an
ongoing& via'le& profita'le enterprise. In fact& the latest <<< for" 1I, su'"itted 'y I"pact
Corporation is dated D 4ay 19;:. 5he assessed <<< pre"iu" contri'utions and penalty
are o'ligations i"posed upon I"pact Corporation 'y la& and should have 'een re"itted to
the <<< ithin the first 10 days of each calendar "onth folloing the "onth for hich they
are applica'le or ithin such ti"e as the <<C prescri'es.
5his Court also notes the evident failure on the part of <<< to issue a 6udg"ent in default
against 1icardo de Beon& ho as the vice-president and officer of the corporation& upon
his non-filing of a responsive pleading after su""ons as served on hi". ,s can 'e
gleaned fro" <ection 11 of the <<< 1evised 1ules of Procedure& the Co""issioner is
"andated to render a decision either granting or denying the petition. @nder the aforesaid
provision& if respondent fails to anser ithin the ti"e prescri'ed& the %earing
Co""issioner "ay& upon "otion of petitioner& or motu proprio& declare respondent in
default and proceed to receive petitionerRs evidence ex parteand thereafter reco""end to
the Co""ission either the granting or denial of the petition as the evidence "ay arrant.
2n a final note& this Court sees it proper to +uote ver'ati" respondentsR prefatory
state"ent in their omment9
5he <ocial <ecurity <yste" is a govern"ent agency i"'ued ith a salutary purpose to
carry out the policy of the <tate to esta'lish& develop& pro"ote and perfect a sound and
via'le tax exe"pt social security syste" suita'le to the needs of the people throughout
the Philippines hich shall pro"ote social 6ustice and provide "eaningful protection to
"e"'ers and their 'eneficiaries against the ha.ards of disa'ility& sic!ness& "aternity&
old-age& death and other contingencies resulting in loss of inco"e or financial 'urden.
5he soundness and via'ility of the funds of the <<< in turn depends on the
contri'utions of its covered e"ployee and e"ployer "e"'ers& hich it invests in order
to deliver the 'asic social 'enefits and privileges to its "e"'ers. 5he entitle"ent to and
a"ount of 'enefits and privileges of the covered "e"'ers are contri'ution-'ased. >oth
the soundness and via'ility of the funds of the <<< as ell as the entitle"ent and
a"ount of 'enefits and privileges of its "e"'ers are adversely affected to a great
extent 'y the non-re"ittance of the "uch-needed contri'utions.
5he sy"pathy of the la on social security is toard its 'eneficiaries. 5his Court ill not
turn a 'lind eye on the perpetration of in6ustice. 5his Court cannot and ill not allo itself to
'e "ade an instru"ent nor 'e privy to any atte"pt at the perpetration of in6ustice.
Statutory Construction Syllabus 1
*olloing the doctrine laid don in Laguna $ransportation o.# !nc. v. %ocial %ecurity
this Court rules that although a corporation once for"ed is conferred a 6uridical
personality separate and distinct fro" the persons co"prising it& it is 'ut a legal fiction
introduced for purposes of convenience and to su'serve the ends of 6ustice. 5he concept
cannot 'e extended to a point 'eyond its reasons and policy& and hen invo!ed in support
of an end su'versive of this policy& ill 'e disregarded 'y the courts.
)/EREFORE& pursuant to the foregoing& the D2cision of the Court of ,ppeals dated 2
Eune 2008 in C,-A.1. <P 7o. ;8920 is here'y AFFIR&ED )IT/ FINA(IT'. Petitioner
I""aculada B. Aarcia& as sole surviving director of I"pact Corporation is
here'y ORDERED to pay for the collected and unre"itted <<< contri'utions of I"pact
Corporation. 5he case is RE&ANDED to the <<< for co"putation of the exact a"ount and
collection thereof.

MUNICIPALITY OF NAGA (August 22, 1968, G.R.
No. 24116-17)
F2rnan3o, J.:
In to separate actions& plaintiff-appellant Ce'u Portland Ce"ent Co"pany sought to test
the validity of the distraint and thereafter the sale at pu'lic auction 'y the principal
defendant-appellee& 4unicipality of 7aga& Ce'u& of 100&000 'ags of ce"ent for the
purpose of satisfying its alleged deficiency in the pay"ent of the "unicipal license tax for
1960& "unicipal license tax for 1961 as ell as the penalty& all in the total su" of
P20:&000.00. 5he loer court rendered a 6oint decision sustaining the validity of the action
ta!en 'y defendant-appellee 4unicipality of 7aga. 5he case is no 'efore us on appeal.
?e affir".
,ccording to the appealed decision9 $*ro" all the evidence& "ostly docu"entary& adduced
during the hearing the folloing facts have 'een esta'lished. 5he efforts of the defendant
5reasurer to collect fro" the plaintiff the "unicipal license tax i"posed 'y ,"ended
2rdinance 7o. 21. <eries of 1989 on ce"ent factories located ithin the 4unicipality of
7aga& Ce'u& have "et ith re'uff ti"e and again. 5he de"ands "ade on the taxpayer ...
have not 'een entirely successful. *inally& the defendant 5reasurer decided on Eune 26&
1961 to avail of the Civil re"edies provided for under <ection 200: of the 1evised
,d"inistrative Code and gave the plaintiff a period of ten days fro" receipt thereof ithin
hich to settle the account& co"puted as follos ...9 #eficiency 4unicipal Bicense 5ax for
1960 = P;0&280.00/ 4unicipal Bicense 5ax for 1961 = P90&000.00/ and 20M Penalty =
P0:&080.00& stating in exasperation& $5his is our last recourse as e had exhausted all
efforts for an a"ica'le solution of our pro'le".$ $1
It as further shon9 $2n Euly 6& 1961& at 11900 ,.4.& the defendant 5reasurer notified the
Plant 4anager of the plaintiff that he as $distraining 100&000 'ags of ,po ce"ent in
satisfaction of your delin+uency in "unicipal license taxes in the total a"ount of

Statutory Construction Syllabus 1
P20:&000.00$ ... 5his notice as received 'y the acting officer in charge of the plaintiffCs
plant& 3icente 5. Aaraygay& according to his on ad"ission. ,t first& he as not in accord
ith the said letter& as!ing the defendant 5reasurer for ti"e to study the sa"e& 'ut in the
afternoon he Gac!noledged theH distraint ...$ 2
,s as noted in the decision& the defendant 5reasurer in turn $signed the receipt for goods&
articles or effects sei.ed under authority of <ection 200: of the 1evised ,d"inistrative
Code& certifying that he has constructively distrained on Euly 6& 1961 fro" the Ce'u
Portland Ce"ent Co"pany at its plant at 5ina-an& 7aga& Ce'u& 100&000 'ags of ,po
ce"ent in tan!s& and that $the said articles or goods ill 'e sold at pu'lic auction to the
highest 'idder on Euly 2D& 1961& and the proceeds thereof ill 'e utili.ed in part satisfaction
of the account of the said co"pany in "unicipal licenses and penalties in the total a"ount
of P20:&000.00 due the 4unicipality of 7aga Province of Ce'u$ ...$0
5he loer court li!eise found as a fact that on the sa"e day& Euly 6& 1961& the "unicipal
treasurer posted the notice of sale to the effect that pursuant to the provisions of <ection
2008 of the 1evised ,d"inistrative Code& he ould sell at pu'lic auction for cash to the
highest 'idder at the "ain entrance of the "unicipal 'uilding of the 4unicipality of 7aga&
Province of Ce'u& Philippines on the 2Dth day of Euly& 1961& at 9 oCcloc! in the "orning& the
property sei.ed and distrained or levied upon fro" the Ce'u Portland Ce"ent Co"pany in
satisfaction of the "unicipal license taxes and penalties in the a"ount of P20:&000.00&
specifying that hat as to 'e sold as 100&000 'ags of ,po ce"ent.: 7o sale& as thus
announced& as held on Euly 2D& 1961. It as li!eise stated in the appealed decision that
there as stipulation 'y the parties to this effect9 $1. 5he auction sale too! place on Eanuary
00& 1962& ...$8
In this appeal fro" the a'ove 6oint decision& plaintiff-appellant Ce'u Portland Ce"ent
Co"pany upholds the vie that the distraint of the 100&000 'ags of ce"ent as ell as the
sale at pu'lic auction thereafter "ade ran counter to the la. ,s earlier noted& e do not
see it that ay.
1. 2n the validity of the distraint = In the first to errors assigned& plaintiff-appellant
su'"its as illegal the distraint of 100&000 'ags of ce"ent "ade on Euly 6& 1961. Its
contention is pre"ised on the fact that in the letter of defendant-appellee dated Eune 26&
1961& re+uiring plaintiff-appellant to settle its account of P20:&000.00& it as given a period
of 10 days fro" receipt ithin hich it could pay& failure to do so 'eing the occasion for the
distraint of its property. It is no alleged that the 10-day period of grace as not alloed to
lapse& the distraint having ta!en place on Euly 6& 1961.
It suffices to anser such a contention 'y referring to the explicit language of the la.
,ccording to the 1evised ,d"inistrative Code9 $5he re"edy 'y distraint shall proceed as
follos9 @pon the failure of the person oing any "unicipal tax or revenue to pay the sa"e&
at the ti"e re+uired& the "unicipal treasurer "ay sei.e and distrain any personal property
'elonging to such person or any property su'6ect to the tax lien& in sufficient +uantity to
satisfy the tax or charge in +uestion& together ith any incre"ent thereto incident to
delin+uency& and the expenses of the distraint.$6
5he clear and explicit language of the la leaves no roo" for dou't. 5he "unicipal
treasurer $"ay sei.e and distrain any personal property$ of the individual or entity su'6ect
to the tax upon failure $to pay the sa"e& at the ti"e re+uired ...$ 5here as such a failure
on the part of plaintiff-appellant to pay the "unicipal tax at the ti"e re+uired. 5he poer of
the "unicipal treasurer in accordance ith the a'ove provision therefore ca"e into play.
Statutory Construction Syllabus 1
?hatever "ight have 'een set forth in the letter of the "unicipal treasurer could not
change or a"end the la it has to 'e enforced as ritten. 5hat as hat the loer court
did. ?hat as done then cannot 'e rightfully loo!ed upon as a failure to a'ide 'y hat the
statutory provision re+uires. 5i"e and ti"e again& it has 'een repeatedly declared 'y this
Court that here the la spea!s in clear and categorical language& there is no roo" for
interpretation. 5here is only roo" for application. 5hat as hat occurred in this case.
2. 2n the validity of the auction sale = 5he validity of the auction sale held on Eanuary 00&
1962 is challenged in the next to errors assigned as allegedly co""itted 'y the loer
court. Plaintiff-appellantCs argu"ent is predicated on the fact that it as not until Eanuary
16& 1962 that it as notified that the pu'lic auction sale as to ta!e place on Eanuary 29&
1962. It is its vie that under the 1evised ,d"inistrative Code; the sale of the distrained
property cannot ta!e place $less than tenty days after notice to the oner or possessor of
the property GdistrainedH ... and the pu'lication or posting of such notice.
?hy such a contention could not prosper is explained clearly 'y the loer court in the
appealed decision. 5hus9 $?ith respect to the clai" that the auction sale held on Eanuary
00& 1962 pursuant to the distraint as null and void for 'eing contrary to la 'ecause not
"ore than tenty days have elapsed fro" the date of notice& it is 'elieved that the
defendant 4unicipality of 7aga and 4unicipal 5reasurer of 7aga have su'stantially
co"plied ith the re+uire"ents provided for 'y <ection 2008 of the 1evised ,d"inistrative
Code. *ro" the ti"e that the plaintiff as first notified of the distraint on Euly 6& 1961 up to
the date of the sale on Eanuary 00& 1962& certainly& "ore than tenty days have elapsed. If
the sale did not ta!e place& as advertised& on Euly 2D& 1961& 'ut only on Eanuary 00& 1962&
it as due to the re+uests for defer"ent "ade 'y the plaintiff hich unduly delayed the
proceedings for collection of the tax& and the said taxpayer should not 'e alloed no to
co"plain that the re+uired period has not yet elapsed hen the intention of the tax collector
as already ell-pu'lici.ed for "any "onths.$9 5he reasona'leness of the a'ove
o'servation of the loer court cannot 'e disputed. @nder the circu"stances& the allegation
that there as no o'servance of the tenty-day period hardly carries conviction.
5he point is further "ade that the auction sale too! place not on Eanuary 29& 1962& as
stated in the notice of sale& 'ut on the next day& Eanuary 00& 1962. ,ccording to plaintiff-
appellant9 $2n this score alone& the sale ...& as illegal as it as not "ade on the ti"e
stated in the notice.$
5here is no 'asis to sustain such a plea as the finding of the loer court is otherise. 5hus9
$2n Eanuary 16& 1962& the defendant 5reasurer infor"ed Aaraygay that he ould cause
the readvertise"ent for sale at pu'lic auction of the 100&000 'ags of ,po ce"ent hich
ere under constructive distraint ... 2n Eanuary 19& 1962& the said defendant issued the
corresponding notice of sale& hich fixed Eanuary 00& 1962& at 10900 ,.4.& as the date of
sale& posting the said notice in pu'lic places and delivering copies thereof to the interested
parties in the previous notice& ... @lti"ately& the 'idding as conducted on that day& Eanuary
00& 1962& ith the representatives of the Provincial ,uditor and Provincial 5reasurer
present. 2nly to 'idders su'"itted sealed 'ids. ,fter the 'idding& the defendant-treasurer
infor"ed the plaintiff that an aard as given to the inning 'idder& ...$
5his 'eing a direct appeal to us& plaintiff-appellant "ust 'e dee"ed to have accepted as
conclusive hat the loer court found as esta'lished 'y the evidence& only +uestions of
la 'eing 'rought to us for revie. It is the esta'lished rule that hen a party appeals
directly to this Court& he is dee"ed to have aived the right to dispute any finding of fact
"ade 'y the court 'elo.
Statutory Construction Syllabus 1
?%(1(*21(& the decision of the loer court dated 20& 196:& is affir"ed in toto. ?ith
costs against plaintiff-appellant.

Statutory Construction Syllabus 1
Ambiguous vs. Vague
PEOPLE vs. NAZARIO (G.R. No. L-44143,August 31,

5he petitioner as charged ith violation of certain "unicipal ordinances of the "unicipal
council of Pag'ilao& in Lue.on province. >y ay of confession and avoidance& the
petitioner ould ad"it having co""itted the acts charged 'ut ould clai" that the
ordinances are unconstitutional& or& assu"ing their constitutionality& that they do not apply
to hi" in any event.
5he facts are not disputed9
5his defendant is charged of the cri"e of 3iolation of 4unicipal 2rdinance in an
infor"ation filed 'y the provincial *iscal& dated 2cto'er 9& 196;& as follos9
5hat in the years 196:& 1968 and 1966& in the 4unicipality of Pag'ilao& Province of
Lue.on& Philippines& and ithin the 6urisdiction of this %onora'le Court& the a'ove-
na"ed accused& 'eing then the oner and operator of a fishpond situated in the
'arrio of Pinag'ayanan& of said "unicipality& did then and there illfully& unlafully
and feloniously refuse and fail to pay the "unicipal taxes in the total a"ount of
5%1(( %@7#1(# <IO5F 5?2 P(<2< ,7# <IO5F 5?2 C(75,32< (P062.62)&
re+uired of hi" as fishpond operator as provided for under 2rdinance 7o. :& series
of 1988& as a"ended& inspite of repeated de"ands "ade upon hi" 'y the 4unicipal
5reasurer of Pag'ilao& Lue.on& to pay the sa"e.
Contrary to la.
*or the prosecution the folloing itnesses testified in su'stance as follos/
4IA@(B *1,7CI,& 09 years of age& "arried& far"er and resident of Bope.& Lue.on =
In 1962 to 196D& I resided at Pinag'ayanan& Pag'ilao& Lue.on. I !no the accused as I
or!ed in his fishpond in 1962 to 196:. 5he fishpond of 7a.ario is at Pinag'ayanan&
Pag'ilao& Lue.on. I or!ed in the clearing of the fishpond& the construction of the di!es
and the catching of fish.
2n cross-exa"ination& this itness declared9
I or!ed ith the accused up to 4arch 196:.
7IC2B,< 4,C,12B,F& 68 years of age& "arried& copra "a!er and resident of
Pinag'ayanan& Pag'ilao& Lue.on =
I resided at Pinag'ayanan& Pag'ilao& Lue.on since 1989 up to the present. I !no the
accused since 1989 hen he opened a fishpond at Pinag'ayanan& Pag'ilao& Lue.on. %e
still operates the fishpond up to the present and I !no this fact as I a" the 'arrio captain
of Pinag'ayanan.
2n cross-exa"ination& this itness declared9
Statutory Construction Syllabus 1
I ca"e to !no the accused hen he first operated his fishpond since 1989.
2n re-direct exa"ination& this itness declared9
I as present during the catching of fish in 196D and the accused as there.
2n re-cross exa"ination& this itness declared9
I do not re"e"'er the "onth in 1962 hen the accused caught fish.
12#2B*2 1. ,B3,1(P& :8 years old& "unicipal treasurer of Pag'ilao& Lue.on& "arried
,s 4unicipal 5reasurer I a" in charge of tax collection. I !no the accused even 'efore I
as 4unicipal 5reasurer of Pag'ilao. I have ritten the accused a letter as!ing hi" to pay
his taxes ((xhi'it >). <aid letter as received 'y the accused as per registry return receipt&
(xhi'it >-1. 5he letter de"anded for pay"ent of P062.00& "ore or less& 'y ay of taxes
hich he did not pay up to the present. 5he for"er 5reasurer& Ceferino Caparros& also
rote a letter of de"and to the accused ((xhi'it C). 2n Eune 2;& 196D& I sent a letter to the
*ishery Co""ission ((xhi'it #)& re+uesting infor"ation if accused paid taxes ith that
office. 5he Co""ission sent "e a certificate ((xhi'its #-1& #-2 K #-0). 5he accused had a
fishpond lease agree"ent. 5he taxes unpaid ere for the years 196:& 1968 and 1966.
2n cross-exa"ination& this itness declared9
I have de"anded the taxes for 0;.10 hectares.
2n +uestion of the court& this itness declared9
?hat I as collecting fro" the accused is the fee on fishpond operation& not rental.
5he prosecution presented as part of their evidence (xhi'its ,& ,-1& ,-2& >& >-2& C& #& #-1&
#-2& #-0& (& *& *-1 and the sa"e ere ad"itted 'y the court& except (xhi'its #& #-1& #-2
and #-0 hich ere not ad"itted for 'eing i""aterial.
*or the defense the accused (@<(>I2 7,P,1I2& :; years of age& "arried& oner and
general "anager of the PIP 4anufacturing (nterprises and resident of :;01 2ld <ta. 4esa&
<a"paloc& 4anila& declared in su'stance as follos9
I have lived in <ta. 4esa& 4anila& since 19:9. I 'uy "y 1esidence Certificates at 4anila or
at <an Euan. In 196:& 1968 and 1966& I as living in 4anila and "y 'usiness is in 4anila
and "y fa"ily lives at 4anila. I never resided at Pag'ilao& Lue.on. I do not on a house at
Pag'ilao. I a" a lessee of a fishpond located at Pag'ilao& Lue.on& and I have a lease
agree"ent to that effect ith the Philippine *isheries Co""ission "ar!ed as (xhi'it 1. In
196:& 1968 and 1966& the contract of lease& (xhi'it 1& as still existing and enforcea'le.
5he 2rdinances 7os. :& 18 and 12& series of 1988& 1968 and 1966& ere translated into
(nglish 'y the Institute of 7ational Banguage to 'etter understand the ordinances. 5here
ere exchange of letters 'eteen "e and the 4unicipal 5reasurer of Pag'ilao regarding
the pay"ent of the taxes on "y leased fishpond situated at Pag'ilao. 5here as a letter of
de"and for the pay"ent of the taxes 'y the treasurer ((xhi'it 0) hich I received 'y "ail at
"y residence at 4anila. I ansered the letter of de"and& (xhi'it 0& ith (xhi'it 0-,. I
re+uested an inspection of "y fishpond to deter"ine its condition as it as not then in
operation. 5he 4unicipal 5reasurer ,lvare. ent there once in 196D and he found that it
as destroyed 'y the typhoon and there ere pictures ta!en "ar!ed as (xhi'its :& :-,& :-
> and :C. I received another letter of de"and& (xhi'it 8& and I ansered the sa"e ((xhi'it
8-,). I copied "y reference +uoted in (xhi'it 8-, fro" ,d"inistrative 2rder 7o. 6& (xhi'it
6. I received another letter of de"and fro" 5o"as 2rnedo& ,cting 4unicipal 5reasurer of
Pag'ilao& dated *e'ruary 16& 1966& (xhi'it D& and I ansered the sa"e ith the letter
Statutory Construction Syllabus 1
"ar!ed as (xhi'it D-,& dated *e'ruary 26& 1966. I received another letter of de"and fro"
5reasurer ,lvare. of Pag'ilao& (xhi'it ;& and I ansered the sa"e ((xhi'it ;-,). In 196:& I
ent to 5reasurer Caparros to as! for an application for license tax and he said none and
he told "e 6ust to pay "y taxes. I did not pay 'ecause up to no I do not !no hether I
a" covered 'y the 2rdinance or not. 5he letters of de"and as!ed "e to pay different
a"ounts for taxes for the fishpond. >ecause under <ec. 2009 of the 1evised ,d"inistrative
Code& "unicipal taxes lapse if not paid and they are collecting on a lapsed ordinance.
>ecause under the 5ax Code& fisher"en are exe"pted fro" percentage tax and privilege
tax. 5here is no la e"poering the "unicipality to pass ordinance taxing fishpond
5he defense presented as part of their evidence (xhi'its 1& 2& 0& 0-,& :& :->& :->& :-C& 8& 8-
,& 6& 6-,& 6->& 6-C& D& D-,& ; and ;-, and the sa"e ere ad"itted 'y the court.
*ro" their evidence the prosecution ould ant to sho to the court that the accused& as
lessee or operator of a fishpond in the "unicipality of Pag'ilao& refused& and still refuses& to
pay the "unicipal taxes for the years 196:& 1968 and 1966& in violation of 4unicipal
2rdinance 7o. :& series of 1988& as a"ended 'y 4unicipal 2rdinance 7o. 18& series of
1968& and finally a"ended 'y 4unicipal 2rdinance 7o. 12& series of 1966.
2n the other hand& the accused& 'y his evidence& tends to sho to the court that the taxes
sought to 'e collected have already lapsed and that there is no la e"poering
"unicipalities to pass ordinances taxing fishpond operators. 5he defense& 'y their
evidence& tried to sho further that& as lessee of a forest land to 'e converted into a
fishpond& he is not covered 'y said "unicipal ordinances/ and finally that the accused
should not 'e taxed as fishpond operator 'ecause there is no fishpond yet 'eing operated
'y hi"& considering that the supposed fishpond as under construction during the period
covered 'y the taxes sought to 'e collected.
*inally& the defendant clai"s that the ordinance in +uestion is ultra vires as it is outside of
the poer of the "unicipal council of Pag'ilao& Lue.on& to enact/ and that the defendant
clai"s that the ordinance in +uestion is a"'iguous and uncertain.
5here is no +uestion fro" the evidences presented that the accused is a lessee of a parcel
of forest land& ith an area of 2D.199; hectares& for fishpond purposes& under *ishpond
Bease ,gree"ent 7o. 1066& entered into 'y the accused and the govern"ent& through the
<ecretary of ,griculture and 7atural 1esources on ,ugust 21& 1989.
5here is no +uestion fro" the evidences presented that the 2D.199; hectares of land
leased 'y the defendant fro" the govern"ent for fishpond purposes as actually
converted into fishpond and used as such& and therefore defendant is an operator of a
fishpond ithin the purvie of the ordinance in +uestion.
5he trial Court
returned a verdict of guilty and disposed as follos9
3I(?(# I7 5%( BIA%5 2* ,BB 5%( *21(A2I7A& the Court finds the accused guilty
'eyond reasona'le dou't of the cri"e of violation of 4unicipal 2rdinance 7o. :& series of
1988& as a"ended 'y 2rdinance 7o. 18& series of 1968 and further a"ended 'y 2rdinance
7o. 12& series of 1966& of the 4unicipal Council of Pag'ilao& Lue.on/ and here'y
sentences hi" to pay a fine of P80.00& ith su'sidiary i"prison"ent in case of insolvency
at the rate of P;.00 a day& and to pay the costs of this proceeding.
<2 21#(1(#.
In this appeal& certified to this Court 'y the Court of ,ppeals& the petitioner alleges that9
Statutory Construction Syllabus 1
5%( B2?(1 C2@15 (11(# I7 725 #(CB,1I7A 5%,5 21#I7,7C( 72. :& <(1I(<
2* 1988& ,< ,4(7#(# >F 21#I7,7C( 72. 18& <(1I(< 2* 1968& ,7# ,< *@15%(1
,4(7#(# >F 21#I7,7C( 72. 12& <(1I(< 2* 1966& 2* 5%( 4@7ICIP,BI5F 2*
P,A>IB,2& L@(P27& I< 7@BB ,7# 32I# *21 >(I7A ,4>IA@2@< ,7# @7C(15,I7.
5%( B2?(1 C2@15 (11(# I7 725 %2B#I7A 5%,5 5%( 21#I7,7C( I7 L@(<5I27&
,< ,4(7#(#& I< @7C27<5I5@5I27,B *21 >(I7A (O P2<5 *,C52.
5%( B2?(1 C2@15 (11(# I7 725 %2B#I7A 5%,5 5%( 21#I7,7C( I7 L@(<5I27
C23(1< 27BF 2?7(1< 21 23(1<((1 2* *I<%P27#< 2* P1I3,5( 2?7(1<%IP
,7# 725 52 B(<<((< 2* P@>BIC B,7#<.
5%( B2?(1 C2@15 (11(# I7 725 *I7#I7A 5%,5 5%( L@(<5I27(# 21#I7,7C(&
(3(7 I* 3,BI#& C,7725 >( (7*21C(# >(F27# 5%( 5(11I521I,B BI4I5< 2*
P,A>IB,2 ,7# #2(< 725 C23(1 727-
5he ordinances in +uestion are 2rdinance 7o. :& series of 1988& 2rdinance 7o. 18& series
of 1968& and 2rdinance 7o. 12& series of 1966& of the 4unicipal Council of Pag'ilao.
Insofar as pertinent to this appeal& the salient portions thereof are herein'elo +uoted9
<ection 1. ,ny oner or "anager of fishponds in places ithin the territorial li"its of
Pag'ilao& Lue.on& shall pay a "unicipal tax in the a"ount of P0.00 per hectare of
fishpond on part thereof per annu".
xxx xxx xxx
<ec. l (a). *or the convenience of those ho have or oners or "anagers of fishponds
ithin the territorial li"its of this "unicipality& the date of pay"ent of "unicipal tax
relative thereto& shall 'egin after the lapse of three (0) years starting fro" the date said
fishpond is approved 'y the >ureau of *isheries.
xxx xxx xxx
<ection 1. ,ny oner or "anager of fishponds in places ithin the territorial li"its of
Pag'ilao shall pay a "unicipal tax in the a"ount of P0.00 per hectare or any fraction
thereof per annu" 'eginning and ta!ing effect fro" the year 196:& if the fishpond
started operating 'efore the year 196:.
5he first o'6ection refers to the ordinances 'eing allegedly $a"'iguous and
5he petitioner contends that 'eing a "ere lessee of the fishpond& he is not
covered since the said ordinances spea! of $oner or "anager.$ %e li!eise "aintains that
they are vague insofar as they rec!on the date of pay"ent9 ?hereas 2rdinance 7o. :
provides that parties shall co""ence pay"ent $after the lapse of three (0) years starting
fro" the date said fishpond is approved 'y the >ureau of *isheries.$
2rdinance 7o. 12
states that lia'ility for the tax accrues $'eginning and ta!ing effect fro" the year 196: if the
fishpond started operating 'efore the year 196:.$
Statutory Construction Syllabus 1
,s a rule& a statute or act "ay 'e said to 'e vague hen it lac!s co"prehensi'le standards
that "en $of co""on intelligence "ust necessarily guess at its "eaning and differ as to its
It is repugnant to the Constitution in to respects9 (1) it violates due process
for failure to accord persons& especially the parties targetted 'y it& fair notice of the conduct
to avoid/ and (2) it leaves la enforcers un'ridled discretion in carrying out its provisions
and 'eco"es an ar'itrary flexing of the Aovern"ent "uscle.
>ut the act "ust 'e utterly vague on its face& that is to say& it cannot 'e clarified 'y either a
saving clause or 'y construction. 5hus& in oates v. ity of incinnati&
the @.<. <upre"e
Court struc! don an ordinance that had "ade it illegal for $three or "ore persons to
asse"'le on any sideal! and there conduct the"selves in a "anner annoying to persons
passing 'y.$
Clearly& the ordinance i"posed no standard at all $'ecause one "ay never
!no in advance hat Cannoys so"e people 'ut does not annoy others.C $
oates highlights hat has 'een referred to as a $perfectly vague$
act hose o'scurity is
evident on its face. It is to 'e distinguished& hoever& fro" legislation couched in i"precise
language = 'ut hich nonetheless specifies a standard though defectively phrased = in
hich case& it "ay 'e $saved$ 'y proper construction.
It "ust further 'e distinguished fro" statutes that are apparently a"'iguous yet fairly
applica'le to certain types of activities. In that event& such statutes "ay not 'e challenged
henever directed against such activities. In ) v. Levy&
a prosecution originally
under the @.<. @nifor" Code of 4ilitary Eustice (prohi'iting& specifically& $conduct
un'eco"ing an officer and gentle"an$)& the defendant& an ar"y officer ho had urged his
"en not to go to 3ietna" and called the <pecial *orces trained to fight there thieves and
"urderers& as not alloed to invo!e the void for vagueness doctrine on the pre"ise that
accepted "ilitary interpretation and practice had provided enough standards& and
conse+uently& a fair notice that his conduct as i"per"issi'le.
It is interesting that in *on(ales v. ommission on 'lections&
a divided Court sustained
an act of Congress (1epu'lic ,ct 7o. :;;0 $the too early no"ination of
li"iting the election ca"paign period& and prohi'iting $partisan political
activities$)& a"id challenges of vagueness and over'readth on the ground that the la had
included an $enu"eration of the acts dee"ed included in the ter"s Celection ca"paignC or
Cpartisan political activity$
that ould supply the standards. $,s thus li"ited& the o'6ection
that "ay 'e raised as to vagueness has 'een "ini"i.ed& if not totally set at rest.$
In his
opinion& hoever& Eustice <anche. ould stress that the conduct sought to 'e prohi'ited $is
not clearly defined at all.$
$,s orded in 1., :;;0& prohi'ited discussion could cover the
entire spectru" of expression relating to candidates and political parties.$
%e as
uni"pressed ith the $restrictions$ *ernandoCs opinion had relied on9 $ C<i"ple expressions
of opinions and thoughts concerning the electionC and expression of Cvies on current
political pro'le"s or issuesC leave the reader con6ecture& to guessor!& upon the extent of
protection offered& 'e it as to the nature of the utterance (Csi"ple expressions of opinion
and thoughtsC) or the su'6ect of the utterance (Ccurrent political pro'le"s or issuesC).$
5he Court li!eise had occasion to apply the $'alancing-of-interests$ test&
insofar as the
statuteCs 'an on early no"ination of candidates as concerned9 $5he rational connection
'eteen the prohi'ition of <ection 80-, and its o'6ect& the indirect and "odest scope of its
restriction on the rights of speech and asse"'ly& and the e"'racing pu'lic interest hich
Congress has found in the "oderation of partisan political activity& lead us to the conclusion
that the statute "ay stand consistently ith and does not offend the Constitution.$
In that
case& Castro ould have the 'alance achieved in favor of <tate authority at the $expense$
of individual li'erties.
Statutory Construction Syllabus 1
In the @nited <tates& hich had a"ple i"pact on CastroCs separate opinion& the 'alancing
test finds a close !in& referred to as the $less restrictive alternative $
doctrine& under hich
the court searches for alternatives availa'le to the Aovern"ent outside of statutory li"its&
or for $less drastic "eans$
open to the <tate& that ould render the statute unnecessary.
In Cnited %tates v. 9obel&
legislation as assailed& 'anning "e"'ers of the (,"erican)
Co""unist Party fro" or!ing in any defense facility. 5he @.<. <upre"e Court& in
nullifying the statute& held that it i"paired the right of association& and that in any case& a
screening process as availa'le to the <tate that ould have ena'led it to Identify
dangerous ele"ents holding defense positions.
In that event& the 'alance ould have
'een struc! in favor of individual li'erties.
It should 'e noted that it is in free expression cases that the result is usually close. It is
said& hoever& that the choice of the courts is usually narroed here the controversy
involves say& econo"ic rights&
or as in the Levy case& "ilitary affairs& in hich less
precision in analysis is re+uired and in hich the co"petence of the legislature is
In no ay "ay the ordinances at 'ar 'e said to 'e tainted ith the vice of vagueness. It is
un"ista!a'le fro" their very provisions that the appellant falls ithin its coverage. ,s the
actual operator of the fishponds& he co"es ithin the ter" $ "anager.$ %e does not deny
the fact that he financed the construction of the fishponds& introduced fish fries into the
fishponds& and had e"ployed la'orers to "aintain the".
?hile it appears that it is the
7ational Aovern"ent hich ons the"&
the Aovern"ent never shared in the profits they
had generated. It is therefore only logical that he shoulders the 'urden of tax under the said
?e agree ith the trial court that the ordinances are in the character of revenue
designed to assist the coffers of the "unicipality of Pag'ilao. ,nd o'viously& it
cannot 'e the oner& the Aovern"ent& on ho" lia'ility should attach& for one thing& upon
the ancient principle that the Aovern"ent is i""une fro" taxes and for another& since it is
not the Aovern"ent that had 'een "a!ing "oney fro" the venture.
<uffice it to say that as the actual operator of the fishponds in +uestion& and as the recipient
of profits 'rought a'out 'y the 'usiness& the appellant is clearly lia'le for the "unicipal
taxes in +uestion. %e cannot say that he did not have a fair notice of such a lia'ility to "a!e
such ordinances vague.
7either are the said ordinances vague as to dates of pay"ent. 5here is no "erit to the
clai" that $the i"position of tax has to depend upon an uncertain date yet to 'e deter"ined
(three years after the Capproval of the fishpondC 'y the >ureau of *isheries& and upon an
uncertain event (if the fishpond started operating 'efore 196:)& also to 'e deter"ined 'y an
uncertain individual or individuals.$
2rdinance 7o. 18& in "a!ing the tax paya'le $after
the lapse of three (0) years starting fro" the date said fishpond is approved 'y the >ureau
of *isheries&$
is une+uivocal a'out the date of pay"ent& and its a"end"ent 'y
2rdinance 7o. 12& rec!oning lia'ility thereunder $'eginning and ta!ing effect fro" the year
196: if the fishpond started operating 'efore the year 196: &$
does not give rise to any
a"'iguity. In either case& the dates of pay"ent have 'een definitely esta'lished. 5he fact
that the appellant has 'een allegedly uncertain a'out the rec!oning dates = as far as his
lia'ility for the years 196:& 1968& and 1966 is concerned = presents a "ere pro'le" in
co"putation& 'ut it does not "a!e the ordinances vague. In addition& the sa"e ould have
'een at "ost a difficult piece of legislation& hich is not unfa"iliar in this 6urisdiction& 'ut
hardly a vague la.
Statutory Construction Syllabus 1
,s it stands& then& lia'ility for the tax accrues on Eanuary 1& 196: for fishponds in operation
prior thereto (2rdinance 7o. 12)& and for ne fishponds& three years after their approval 'y
the >ureau of *isheries (2rdinance 7o. 18). 5his is so since the a"endatory act
(2rdinance 7o. 12) "erely granted a"nesty unto old& delin+uent fishpond operators. It did
not repeal its "other ordinances (7os. : and 18). ?ith respect to ne operators&
2rdinance 7o. 18 should still prevail.
5o the Court& the ordinances in +uestion set forth enough standards that clarify i"agined
a"'iguities. ?hile such standards are not apparent fro" the face thereof& they are visi'le
fro" the intent of the said ordinances.
5he next in+uiry is hether or not they can 'e said to 'e ex post facto "easures. 5he
appellant argues that they are9 $,"end"ent 7o. 12 passed on <epte"'er 19& 1966& clearly
provides that the pay"ent of the i"posed tax shall $'eginning and ta!ing effect fro" the
year 196:& if the fishpond started operating 'efore the year 196:.C In other ords& it acts or events occurring 'efore its passage& that is to say& 196: and even prior
5he Court finds no "erit in this contention. ,s the <olicitor Aeneral notes& $4unicipal
2rdinance 7o. : as passed on 4ay 1:& 1988.
%ence& it cannot 'e said that the
a"end"ent (under 2rdinance 7o. 12) is 'eing "ade to apply retroactively (to 196:) since
the rec!oning period is 1988 (date of enact"ent). (ssentially& 2rdinances 7os. 12 and 18
are in the nature of curative "easures intended to facilitate and enhance the collection of
revenues the originally act& 2rdinance 7o. :& had prescri'ed.
4oreover& the act (of non-
pay"ent of the tax)& had 'een& since 1988& "ade punisha'le& and it cannot 'e said that
2rdinance 7o. 12 i"poses a retroactive penalty. ,s e have noted& it operates to grant
a"nesty to operators ho had 'een delin+uent 'eteen 1988 and 196:. It does not "ete
out a penalty& "uch less& a retrospective one.
5he appellant assails& finally& the poer of the "unicipal council of Pag'ilao to tax $pu'lic
forest land.$
In *olden 9ibbon Lumber o.# !nc. v. ity of "utuan
e held that local
govern"entsC taxing poer does not extend to forest products or concessions under
1epu'lic ,ct 7o. 226:& the Bocal ,utono"y ,ct then in force. (1epu'lic ,ct 7o. 226:
li!eise prohi'ited "unicipalities fro" i"posing percentage taxes on sales.)
*irst of all& the tax in +uestion is not a tax on property& although the rate thereof is 'ased on
the area of fishponds ($P0.00 per hectare$
). <econdly& fishponds are not forest lands&
although e have held the" to the agricultural lands.
>y definition& $forest$ is $a large
tract of land covered ith a natural groth of trees and under'ush/ a large
(,ccordingly& even if the challenged taxes ere directed on the fishponds& they
ould not have 'een taxes on forest products.)
5hey are& "ore accurately& privilege taxes on the 'usiness of fishpond "aintenance. 5hey
are not charged against sales& hich ould have offended the doctrine enshrined
'y *olden 9ibbon Lumber&
'ut rather on occupation& hich is alloed under 1epu'lic ,ct
7o. 226:.
5hey are hat have 'een classified as fixed annual taxes and this is o'vious
fro" the ordinances the"selves.
5here is& then& no "erit in the last o'6ection.
?%(1(*21(& the appeal is #I<4I<<(#. Costs against the appellant.

Statutory Construction Syllabus 1
167011, December 11, 2008)
R E S O ( U T I O N
*or resolution is the 4otion for 1econsideration filed 'y petitioner <pouses Carlos
1o"ualde. and (rlinda 1o"ualde. on 26 4ay 200; fro" the #ecision of this Court dated
00 ,pril 200;& affir"ing the 1esolutions& dated 11 Eune 200: and 2D Eanuary 2008 of the
C24(B(C 'n "anc.
?e find that petitioner has not raised su'stantially ne grounds to 6ustify the
reconsideration sought. Instead& petitioner presents aver"ents that are "ere rehashes of
argu"ents already considered 'y the Court. 5here is& thus& no cogent reason to arrant a
reconsideration of this CourtRs #ecision.
<i"ilarly& e re6ect the contentions put forth 'y estee"ed colleagues 4r. Eustice #ante 2.
5inga in his #issent& dated 2 <epte"'er 200;& hich are also "ere reiterations of his
earlier dissent against the "a6ority opinion. 4r. Eustice 5ingaRs incessant assertions
proceed fro" the rong pre"ise. 5o 'e clear& this Court did not inti"ate that penal statutes
are 'eyond scrutiny. In our #ecision& dated 00 ,pril 200;& this Court e"phasi.ed the critical
li"itations 'y hich a cri"inal statute "ay 'e challenged. ?e dre a lucid 'oundary
'eteen an $on-its-face$ invalidation and an $as applied$ challenge. @nfortunately& this is a
distinction hich 4r. Eustice 5inga has refused to understand. Bet it 'e underscored that
$on-its-face$ invalidation of penal statutes& as is sought to 'e done 'y petitioners in this
case& "ay not 'e alloed. 5hus& e said9
5he void-for-vagueness doctrine holds that a la is facially invalid if "en of co""on
intelligence "ust necessarily guess at its "eaning and differ as to its application.
%oever& this Court has i"posed certain li"itations 'y hich a cri"inal statute& as in
the challenged la at 'ar& "ay 'e scrutini.ed. 5his Court has declared that facial
invalidation or an $on-its-face$ invalidation of cri"inal statutes is not appropriate. ?e
have so enunciated in no uncertain ter"s in 9omualde( v. %andiganbayan& thus9
In su"& the doctrines of strict scrutiny& over'readth& and vagueness are analytical tools
developed for testing $on their faces$ statutes in free speech cases or& as they are
called in ,"erican la& *irst ,"end"ent cases. 5hey cannot 'e "ade to do service
hen hat is involved is a cri"inal statute. ?ith respect to such statute& the esta'lished
rule is that Cone to ho" application of a statute is constitutional ill not 'e heard to
attac! the statute on the ground that i"pliedly it "ight also 'e ta!en as applying to other
persons or other situations in hich its application "ight 'e unconstitutional.C ,s has
'een pointed out& Cvagueness challenges in the *irst ,"end"ent context& li!e
over'readth challenges typically produce facial invalidation& hile statutes found vague
as a "atter of due process typically are invalidated GonlyH Cas appliedC to a particular
defendant.C$ (underscoring supplied)
$5o this date& the Court has not declared any penal la unconstitutional on the ground
of a"'iguity.$ ?hile "entioned in passing in so"e cases& the void-for-vagueness
Statutory Construction Syllabus 1
concept has yet to find direct application in our 6urisdiction. In Bu ong 'ng v.
$rinidad# the >oo!!eeping ,ct as found unconstitutional 'ecause it violated the e+ual
protection clause& not 'ecause it as vague. Adiong v. omelec decreed as void a
"ere Co"elec 1esolution& not a statute. *inally& %antiago v. omelec held that a portion
of 1, 6D08 as unconstitutional 'ecause of undue delegation of legislative poers& not
'ecause of vagueness.
In3223, an 7on0its08ac27 in9ali3ation o8 cri:inal statut2s ;oul3 r2sult in a :ass
ac<uittal o8 =arti2s ;>os2 cas2s :ay not >a92 292n r2ac>23 t>2 courts. Suc>
in9ali3ation ;oul3 constitut2 a 32=artur2 8ro: t>2 usual r2<uir2:2nt o8 7actual
cas2 an3 contro92rsy7 an3 =2r:it 32cisions to b2 :a32 in a st2ril2 abstract
cont2?t >a9in@ no 8actual concr2t2n2ss. In Bounger v. >arris# this evil as aptly
pointed out 'y the @.<. <upre"e Court in these ords9
$G5Hhe tas! of a proposed statute& pinpointing its deficiencies& and re+uiring
correction of these deficiencies 'efore the statute is put into effect& is rarely if ever an
appropriate tas! for the 6udiciary. 5he co"'ination of the relative re"oteness of the
controversy& the i"pact on the legislative process of the relief sought& and a'ove all the
speculative and a"orphous nature of the re+uired line-'y-line analysis of detailed
statutes& x x x ordinarily results in a !ind of case that is holly unsatisfactory for
deciding constitutional +uestions& hichever ay they "ight 'e decided.$
For t>is r2ason, @2n2rally 3is8a9or23 is an on0its08ac2 in9ali3ation o8 statut2s,
32scrib23 as a 7:ani82stly stron@ :23icin27 to b2 2:=loy23 7s=arin@ly an3 only
as a last r2sort.7 In 32t2r:inin@ t>2 constitutionality o8 a statut2, t>2r28or2, its
=ro9isions t>at >a92 all2@23ly b22n 9iolat23 :ust b2 2?a:in23 in t>2 li@>t o8 t>2
con3uct ;it> ;>ic> t>2 3282n3ant >as b22n c>ar@23. (("phasis supplied.)
7either does the listing 'y 4r. Eustice 5inga of hat he conde"ns as offenses under
1epu'lic ,ct 7o. ;1;9 convince this Court to overturn its ruling. ?hat is crucial in this case
is the rule set in our case 'oo!s and precedents that a facial challenge is not the proper
avenue to challenge the statute under consideration. In our #ecision of 00 ,pril 200;& e
enunciated that $the opinions of the dissent hich see! to 'ring to the fore the purported
a"'iguities of a long list of provisions in 1epu'lic ,ct 7o. ;1;9 can 'e dee"ed as a facial
2n this "atter& e held9
,n appropriate $as applied$ challenge in the instant Petition should 'e li"ited only to
<ection :8 (6) in relation to <ections 10 (g) and (6) of 1epu'lic ,ct 7o. ;1;9Sthe
provisions upon hich petitioners are charged. ,n expanded exa"ination of the la
covering provisions hich are alien to petitionersR case ould 'e antagonistic to the
rudi"ent that for 6udicial revie to 'e exercised& there "ust 'e an existing case or
controversy that is appropriate or ripe for deter"ination& and not con6ectural or
In conclusion& I reiterate that the doctrine e"'odied in 9omualde( and 'strada re"ains
good la. 5he rule esta'lished in our 6urisdiction is& only statutes on free speech& religious
freedo"& and other funda"ental rights "ay 'e facially challenged. @nder no case "ay
ordinary penal statutes 'e su'6ected to a facial challenge. 5he rationale is o'vious. If a
facial challenge to a penal statute is per"itted& the prosecution of cri"es "ay'e ha"pered.
7o prosecution ould 'e possi'le. , strong criticis" against e"ploying a facial challenge in
the case of penal statutes& if the sa"e is alloed& ould effectively go against the grain of
the doctrinal re+uire"ent of an existing and concrete controversy 'efore 6udicial poer "ay
'e appropriately exercised. , facial challenge against a penal statute is& at 'est&
Statutory Construction Syllabus 1
a"orphous and speculative. It ould& essentially& force the court to consider third parties
ho are not 'efore it. ,s I have said in "y opposition to the alloance of a facial challenge
to attac! penal statutes& such a test ill i"pair the <tateRs a'ility to deal ith cri"e. If
arranted& there ould 'e nothing that can hinder an accused fro" defeating the <tateRs
poer to prosecute on a "ere shoing that& as applied to third parties& the penal statute is
vague or over'road& notithstanding that the la is clear as applied to hi".
,s structured& <ection :8 enu"erates acts dee"ed election offenses under 1epu'lic ,ct
7o. ;1;9. 5he evident intent of the legislature in including in the catena of election offenses
the violation of any of the provisions of 1epu'lic ,ct 7o. ;1;9& is to su'su"e as
punisha'le& not only the co""ission of proscri'ed acts& 'ut also the o"ission of acts
en6oined to 'e o'served. 2n this score& the declared policy of 1epu'lic ,ct 7o. ;1;9 is
illu"inating. 5he la articulates the policy of the <tate to syste"ati.e the present "ethod of
registration in order to esta'lish a clean& co"plete& per"anent and updated list of voters.
In )eople v. *atchalian& the Court had the occasion to rule on the validity of the provision of
the 4ini"u" ?age Ba& hich in li!e "anner spea!s of a illful violation of $any of the
provisions of this ,ct.$ 5his Court upheld the assailed la& and in no uncertain ter"s
declared that the provision is all-e"'racing& and the sa"e "ust include hat is en6oined in
the ,ct hich e"'odies the very funda"ental purpose for hich the la has 'een adopted.
*inally& as the records ould sho& petitioners "anaged to set up an intelligent defense
against the infor"ations filed 'elo. >y clearly enunciating their defenses against the
accusations hurled at the"& and denying their co""ission thereof& petitionersR allegation of
vagueness "ust necessarily 'e re6ected. Petitioners failed to overco"e the heavy
presu"ption of constitutionality in favor of the la. 5he constitutionality "ust prevail in the
a'sence of su'stantial grounds for overthroing the sa"e.
5he phraseology in <ection :8(6) has 'een e"ployed 'y Congress in a nu"'er of las
hich have not 'een declared unconstitutional9
16 T>2 Coo=2rati92 Co32
<ection 12:(:) of 1epu'lic ,ct 7o. 690; reads9
$,ny violation of any provision of this Code for hich no penalty is i"posed shall 'e
punished 'y i"prison"ent of not less than six (6) "onths nor "ore than one (1) year
and a fine of not less than 2ne 5housand Pesos (P1&000.00) or 'oth at the discretion of
the Court.$
26 T>2 In3i@2nous P2o=l2s Ri@>ts Act
<ection D2 of 1epu'lic ,ct 7o. ;0D1 reads in part9
$,ny person ho co""its violation of any of the provisions of this ,ct& such as& 'ut
not li"ited to N$
"6 T>2 R2tail Tra32 (ib2raliAation Act
<ection 12& 1epu'lic ,ct 7o. ;D62& reads9
$,ny person ho ould 'e found guilty of violation of any provisions of this ,ct shall 'e
punished 'y i"prison"ent of not less than six (6) years and one (1) day 'ut not "ore
than eight (;) years& and a fine of at least 2ne 4illion (P1&000&000.00) 'ut not "ore
than 5enty 4illion (P20&000&000.00).
*or reasons so stated& e deny the 4otion for 1econsideration.
Statutory Construction Syllabus 1
Statutory Construction Syllabus 1