Republic of the Philippines

SUPREME COURT
Manila

SECOND DIVISION

G.R. No. 179579 February 1, 2012

COMMISSIONER OF CUSTOMS and the DISTRICT COLLECTOR OF THE PORT OF SUBIC, Petitioners,
vs.
HYPERMIX FEEDS CORPORATION, Respondent.

DECISION

SERENO, J.:

Before us is a Petition for Review under Rule 45,1 assailing the Decision2 and the Resolution3 of the Court of Appeals (CA), which
nullified the Customs Memorandum Order (CMO) No. 27-20034 on the tariff classification of wheat issued by petitioner
Commissioner of Customs.

The antecedent facts are as follows:

On 7 November 2003, petitioner Commissioner of Customs issued CMO 27-2003. Under the Memorandum, for tariff purposes,
wheat was classified according to the following: (1) importer or consignee; (2) country of origin; and (3) port of discharge. 5 The
regulation provided an exclusive list of corporations, ports of discharge, commodity descriptions and countries of origin. Depending
on these factors, wheat would be classified either as food grade or feed grade. The corresponding tariff for food grade wheat was
3%, for feed grade, 7%.

CMO 27-2003 further provided for the proper procedure for protest or Valuation and Classification Review Committee (VCRC)
cases. Under this procedure, the release of the articles that were the subject of protest required the importer to post a cash bond to
cover the tariff differential.6

A month after the issuance of CMO 27-2003, on 19 December 2003, respondent filed a Petition for Declaratory Relief7 with the
Regional Trial Court (RTC) of Las Piñas City. It anticipated the implementation of the regulation on its imported and perishable
Chinese milling wheat in transit from China.8 Respondent contended that CMO 27-2003 was issued without following the mandate of
the Revised Administrative Code on public participation, prior notice, and publication or registration with the University of the
Philippines Law Center.

Respondent also alleged that the regulation summarily adjudged it to be a feed grade supplier without the benefit of prior
assessment and examination; thus, despite having imported food grade wheat, it would be subjected to the 7% tariff upon the arrival
of the shipment, forcing them to pay 133% more than was proper.

Furthermore, respondent claimed that the equal protection clause of the Constitution was violated when the regulation treated non-
flour millers differently from flour millers for no reason at all.

Lastly, respondent asserted that the retroactive application of the regulation was confiscatory in nature.

On 19 January 2004, the RTC issued a Temporary Restraining Order (TRO) effective for twenty (20) days from notice. 9

Petitioners thereafter filed a Motion to Dismiss.10 They alleged that: (1) the RTC did not have jurisdiction over the subject matter of
the case, because respondent was asking for a judicial determination of the classification of wheat; (2) an action for declaratory
relief was improper; (3) CMO 27-2003 was an internal administrative rule and not legislative in nature; and (4) the claims of
respondent were speculative and premature, because the Bureau of Customs (BOC) had yet to examine respondent’s products.
They likewise opposed the application for a writ of preliminary injunction on the ground that they had not inflicted any injury through
the issuance of the regulation; and that the action would be contrary to the rule that administrative issuances are assumed valid until
declared otherwise.

On 28 February 2005, the parties agreed that the matters raised in the application for preliminary injunction and the Motion to
Dismiss would just be resolved together in the main case. Thus, on 10 March 2005, the RTC rendered its Decision 11 without having
to resolve the application for preliminary injunction and the Motion to Dismiss.

1
The trial court ruled in favor of respondent, to wit:

WHEREFORE, in view of the foregoing, the Petition is GRANTED and the subject Customs Memorandum Order 27-2003 is
declared INVALID and OF NO FORCE AND EFFECT. Respondents Commissioner of Customs, the District Collector of Subic or
anyone acting in their behalf are to immediately cease and desist from enforcing the said Customs Memorandum Order 27-2003.

SO ORDERED.12

The RTC held that it had jurisdiction over the subject matter, given that the issue raised by respondent concerned the quasi-
legislative powers of petitioners. It likewise stated that a petition for declaratory relief was the proper remedy, and that respondent
was the proper party to file it. The court considered that respondent was a regular importer, and that the latter would be subjected to
the application of the regulation in future transactions.

With regard to the validity of the regulation, the trial court found that petitioners had not followed the basic requirements of hearing
and publication in the issuance of CMO 27-2003. It likewise held that petitioners had "substituted the quasi-judicial determination of
the commodity by a quasi-legislative predetermination."13 The lower court pointed out that a classification based on importers and
ports of discharge were violative of the due process rights of respondent.

Dissatisfied with the Decision of the lower court, petitioners appealed to the CA, raising the same allegations in defense of CMO 27-
2003.14 The appellate court, however, dismissed the appeal. It held that, since the regulation affected substantial rights of petitioners
and other importers, petitioners should have observed the requirements of notice, hearing and publication.

Hence, this Petition.

Petitioners raise the following issues for the consideration of this Court:

I. THE COURT OF APPEALS DECIDED A QUESTION OF SUBSTANCE WHICH IS NOT IN ACCORD WITH THE LAW
AND PREVAILING JURISPRUDENCE.

II. THE COURT OF APPEALS GRAVELY ERRED IN DECLARING THAT THE TRIAL COURT HAS JURISDICTION
OVER THE CASE.

The Petition has no merit.

We shall first discuss the propriety of an action for declaratory relief.

Rule 63, Section 1 provides:

Who may file petition. – Any person interested under a deed, will, contract or other written instrument, or whose rights are affected
by a statute, executive order or regulation, ordinance, or any other governmental regulation may, before breach or violation thereof,
bring an action in the appropriate Regional Trial Court to determine any question of construction or validity arising, and for a
declaration of his rights or duties, thereunder.

The requirements of an action for declaratory relief are as follows: (1) there must be a justiciable controversy; (2) the controversy
must be between persons whose interests are adverse; (3) the party seeking declaratory relief must have a legal interest in the
controversy; and (4) the issue involved must be ripe for judicial determination. 15 We find that the Petition filed by respondent before
the lower court meets these requirements.

First, the subject of the controversy is the constitutionality of CMO 27-2003 issued by petitioner Commissioner of Customs. In Smart
Communications v. NTC,16 we held:

The determination of whether a specific rule or set of rules issued by an administrative agency contravenes the law or the
constitution is within the jurisdiction of the regular courts. Indeed, the Constitution vests the power of judicial review or the power to
declare a law, treaty, international or executive agreement, presidential decree, order, instruction, ordinance, or regulation in the
courts, including the regional trial courts. This is within the scope of judicial power, which includes the authority of the courts to
determine in an appropriate action the validity of the acts of the political departments. Judicial power includes the duty of the courts
of justice to settle actual controversies involving rights which are legally demandable and enforceable, and to determine whether or
not there has been a grave abuse of discretion amounting to lack or excess of jurisdiction on the part of any branch or
instrumentality of the Government. (Emphasis supplied)

Meanwhile, in Misamis Oriental Association of Coco Traders, Inc. v. Department of Finance Secretary,17 we said:

2
xxx [A] legislative rule is in the nature of subordinate legislation, designed to implement a primary legislation by providing the details
thereof. xxx

In addition such rule must be published. On the other hand, interpretative rules are designed to provide guidelines to the law which
the administrative agency is in charge of enforcing.

Accordingly, in considering a legislative rule a court is free to make three inquiries: (i) whether the rule is within the delegated
authority of the administrative agency; (ii) whether it is reasonable; and (iii) whether it was issued pursuant to proper procedure. But
the court is not free to substitute its judgment as to the desirability or wisdom of the rule for the legislative body, by its delegation of
administrative judgment, has committed those questions to administrative judgments and not to judicial judgments. In the case of an
interpretative rule, the inquiry is not into the validity but into the correctness or propriety of the rule. As a matter of power a court,
when confronted with an interpretative rule, is free to (i) give the force of law to the rule; (ii) go to the opposite extreme and
substitute its judgment; or (iii) give some intermediate degree of authoritative weight to the interpretative rule. (Emphasis supplied)

Second, the controversy is between two parties that have adverse interests. Petitioners are summarily imposing a tariff rate that
respondent is refusing to pay.

Third, it is clear that respondent has a legal and substantive interest in the implementation of CMO 27-2003. Respondent has
adequately shown that, as a regular importer of wheat, on 14 August 2003, it has actually made shipments of wheat from China to
Subic. The shipment was set to arrive in December 2003. Upon its arrival, it would be subjected to the conditions of CMO 27-2003.
The regulation calls for the imposition of different tariff rates, depending on the factors enumerated therein. Thus, respondent
alleged that it would be made to pay the 7% tariff applied to feed grade wheat, instead of the 3% tariff on food grade wheat. In
addition, respondent would have to go through the procedure under CMO 27-2003, which would undoubtedly toll its time and
resources. The lower court correctly pointed out as follows:

xxx As noted above, the fact that petitioner is precisely into the business of importing wheat, each and every importation will be
subjected to constant disputes which will result into (sic) delays in the delivery, setting aside of funds as cash bond required in the
CMO as well as the resulting expenses thereof. It is easy to see that business uncertainty will be a constant occurrence for
petitioner. That the sums involved are not minimal is shown by the discussions during the hearings conducted as well as in the
pleadings filed. It may be that the petitioner can later on get a refund but such has been foreclosed because the Collector of
Customs and the Commissioner of Customs are bound by their own CMO. Petitioner cannot get its refund with the said agency. We
believe and so find that Petitioner has presented such a stake in the outcome of this controversy as to vest it with standing to file this
petition.18 (Emphasis supplied)

Finally, the issue raised by respondent is ripe for judicial determination, because litigation is inevitable 19 for the simple and
uncontroverted reason that respondent is not included in the enumeration of flour millers classified as food grade wheat importers.
Thus, as the trial court stated, it would have to file a protest case each time it imports food grade wheat and be subjected to the 7%
tariff.

It is therefore clear that a petition for declaratory relief is the right remedy given the circumstances of the case.

Considering that the questioned regulation would affect the substantive rights of respondent as explained above, it therefore follows
that petitioners should have applied the pertinent provisions of Book VII, Chapter 2 of the Revised Administrative Code, to wit:

Section 3. Filing. – (1) Every agency shall file with the University of the Philippines Law Center three (3) certified copies of every rule
adopted by it. Rules in force on the date of effectivity of this Code which are not filed within three (3) months from that date shall not
thereafter be the bases of any sanction against any party of persons.

xxx xxx xxx

Section 9. Public Participation. - (1) If not otherwise required by law, an agency shall, as far as practicable, publish or circulate
notices of proposed rules and afford interested parties the opportunity to submit their views prior to the adoption of any rule.

(2) In the fixing of rates, no rule or final order shall be valid unless the proposed rates shall have been published in a
newspaper of general circulation at least two (2) weeks before the first hearing thereon.

(3) In case of opposition, the rules on contested cases shall be observed.

When an administrative rule is merely interpretative in nature, its applicability needs nothing further than its bare issuance, for it
gives no real consequence more than what the law itself has already prescribed. When, on the other hand, the administrative rule
goes beyond merely providing for the means that can facilitate or render least cumbersome the implementation of the law but
substantially increases the burden of those governed, it behooves the agency to accord at least to those directly affected a chance
to be heard, and thereafter to be duly informed, before that new issuance is given the force and effect of law. 20

3
Likewise, in Tañada v. Tuvera,21 we held:

The clear object of the above-quoted provision is to give the general public adequate notice of the various laws which are to regulate
their actions and conduct as citizens. Without such notice and publication, there would be no basis for the application of the maxim
"ignorantia legis non excusat." It would be the height of injustice to punish or otherwise burden a citizen for the transgression of a
law of which he had no notice whatsoever, not even a constructive one.

Perhaps at no time since the establishment of the Philippine Republic has the publication of laws taken so vital significance that at
this time when the people have bestowed upon the President a power heretofore enjoyed solely by the legislature. While the people
are kept abreast by the mass media of the debates and deliberations in the Batasan Pambansa – and for the diligent ones, ready
access to the legislative records – no such publicity accompanies the law-making process of the President. Thus, without
publication, the people have no means of knowing what presidential decrees have actually been promulgated, much less a definite
way of informing themselves of the specific contents and texts of such decrees. (Emphasis supplied)

Because petitioners failed to follow the requirements enumerated by the Revised Administrative Code, the assailed regulation must
be struck down.

Going now to the content of CMO 27-3003, we likewise hold that it is unconstitutional for being violative of the equal protection
clause of the Constitution.

The equal protection clause means that no person or class of persons shall be deprived of the same protection of laws enjoyed by
other persons or other classes in the same place in like circumstances. Thus, the guarantee of the equal protection of laws is not
violated if there is a reasonable classification. For a classification to be reasonable, it must be shown that (1) it rests on substantial
distinctions; (2) it is germane to the purpose of the law; (3) it is not limited to existing conditions only; and (4) it applies equally to all
members of the same class.22

Unfortunately, CMO 27-2003 does not meet these requirements. We do not see how the quality of wheat is affected by who imports
it, where it is discharged, or which country it came from.

Thus, on the one hand, even if other millers excluded from CMO 27-2003 have imported food grade wheat, the product would still
be declared as feed grade wheat, a classification subjecting them to 7% tariff. On the other hand, even if the importers listed under
CMO 27-2003 have imported feed grade wheat, they would only be made to pay 3% tariff, thus depriving the state of the taxes due.
The regulation, therefore, does not become disadvantageous to respondent only, but even to the state.

It is also not clear how the regulation intends to "monitor more closely wheat importations and thus prevent their misclassification." A
careful study of CMO 27-2003 shows that it not only fails to achieve this end, but results in the opposite. The application of the
regulation forecloses the possibility that other corporations that are excluded from the list import food grade wheat; at the same time,
it creates an assumption that those who meet the criteria do not import feed grade wheat. In the first case, importers are
unnecessarily burdened to prove the classification of their wheat imports; while in the second, the state carries that burden.

Petitioner Commissioner of Customs also went beyond his powers when the regulation limited the customs officer’s duties
mandated by Section 1403 of the Tariff and Customs Law, as amended. The law provides:

Section 1403. – Duties of Customs Officer Tasked to Examine, Classify, and Appraise Imported Articles. – The customs officer
tasked to examine, classify, and appraise imported articles shall determine whether the packages designated for examination and
their contents are in accordance with the declaration in the entry, invoice and other pertinent documents and shall make return in
such a manner as to indicate whether the articles have been truly and correctly declared in the entry as regard their quantity,
measurement, weight, and tariff classification and not imported contrary to law. He shall submit samples to the laboratory for
analysis when feasible to do so and when such analysis is necessary for the proper classification, appraisal, and/or admission into
the Philippines of imported articles.

Likewise, the customs officer shall determine the unit of quantity in which they are usually bought and sold, and appraise the
imported articles in accordance with Section 201 of this Code.

Failure on the part of the customs officer to comply with his duties shall subject him to the penalties prescribed under Section 3604
of this Code.1âwphi1

The provision mandates that the customs officer must first assess and determine the classification of the imported article before
tariff may be imposed. Unfortunately, CMO 23-2007 has already classified the article even before the customs officer had the
chance to examine it. In effect, petitioner Commissioner of Customs diminished the powers granted by the Tariff and Customs Code
with regard to wheat importation when it no longer required the customs officer’s prior examination and assessment of the proper
classification of the wheat.

4
It is well-settled that rules and regulations, which are the product of a delegated power to create new and additional legal provisions
that have the effect of law, should be within the scope of the statutory authority granted by the legislature to the administrative
agency. It is required that the regulation be germane to the objects and purposes of the law; and that it be not in contradiction to, but
in conformity with, the standards prescribed by law.23

In summary, petitioners violated respondent’s right to due process in the issuance of CMO 27-2003 when they failed to observe the
requirements under the Revised Administrative Code. Petitioners likewise violated respondent’s right to equal protection of laws
when they provided for an unreasonable classification in the application of the regulation. Finally, petitioner Commissioner of
Customs went beyond his powers of delegated authority when the regulation limited the powers of the customs officer to examine
and assess imported articles.

WHEREFORE, in view of the foregoing, the Petition is DENIED.

SO ORDERED.

MARIA LOURDES P. A. SERENO

Associate Justice

WE CONCUR:

ANTONIO T. CARPIO
Associate Justice
Chairperson

ARTURO D. BRION JOSE PORTUGAL PEREZ

Associate Justice Associate Justice
BIENVENIDO L. REYES
Associate Justice

ATTESTATION

I attest that the conclusions in the above Decision were reached in consultation before the case was assigned to the writer of the
opinion of the Court’s Division.

ANTONIO T. CARPIO
Associate Justice
Chairperson, Second Division

CERTIFICATION

Pursuant to Section 13, Article VIII of the Constitution and the Division Chairperson’s Attestation, I certify that the conclusions in the
above Decision had been reached in consultation before the case was assigned to the writer of the opinion of the Court’s Division.

RENATO C. CORONA
Chief Justice

5
 Republic of the Philippines
SUPREME COURT
Manila

SECOND DIVISION

G.R. No. 191667 April 17, 2013

LAND BANK OF THE PHILIPPINES, Petitioner,

vs.
EDUARDO M. CACAYURAN, Respondent.

DECISION

PERLAS-BERNABE, J.:

Assailed in this Petition for Review on Certiorari1 is the March 26, 2010 Decision2 of the Court of Appeals (CA) in CA-G.R. CV. No.
89732 which affirmed with modification the April 10, 2007 Decision3 of the Regional Trial Court (RTC) of Agoo, La Union, Branch 31,
declaring inter alia the nullity of the loan agreements entered into by petitioner Land Bank of the Philippines (Land Bank) and the
Municipality of Agoo, La Union (Municipality).

The Facts

From 2005 to 2006, the Municipality’s Sangguniang Bayan (SB) passed certain resolutions to implement a multi-phased plan
(Redevelopment Plan) to redevelop the Agoo Public Plaza (Agoo Plaza) where the Imelda Garden and Jose Rizal Monument were
situated.

To finance phase 1 of the said plan, the SB initially passed Resolution No. 68-20054 on April 19, 2005, authorizing then Mayor
Eufranio Eriguel (Mayor Eriguel) to obtain a loan from Land Bank and incidental thereto, mortgage a 2,323.75 square meter lot
situated at the southeastern portion of the Agoo Plaza (Plaza Lot) as collateral. To serve as additional security, it further authorized
the assignment of a portion of its internal revenue allotment (IRA) and the monthly income from the proposed project in favor of
Land Bank.5 The foregoing terms were confirmed, approved and ratified on October 4, 2005 through Resolution No. 139-
2005.6 Consequently, on November 21, 2005, Land Bank extended a ₱4,000,000.00 loan in favor of the Municipality (First
Loan),7 the proceeds of which were used to construct ten (10) kiosks at the northern and southern portions of the Imelda Garden.
After completion, these kiosks were rented out.8

On March 7, 2006, the SB passed Resolution No. 58-2006,9 approving the construction of a commercial center on the Plaza Lot as
part of phase II of the Redevelopment Plan. To finance the project, Mayor Eriguel was again authorized to obtain a loan from Land
Bank, posting as well the same securities as that of the First Loan. All previous representations and warranties of Mayor Eriguel
related to the negotiation and obtention of the new loan10were ratified on September 5, 2006 through Resolution No. 128-2006.11 In
consequence, Land Bank granted a second loan in favor of the Municipality on October 20, 2006 in the principal amount of
₱28,000,000.00 (Second Loan).12

Unlike phase 1 of the Redevelopment Plan, the construction of the commercial center at the Agoo Plaza was vehemently objected
to by some residents of the Municipality. Led by respondent Eduardo Cacayuran (Cacayuran), these residents claimed that the
conversion of the Agoo Plaza into a commercial center, as funded by the proceeds from the First and Second Loans (Subject
Loans), were "highly irregular, violative of the law, and detrimental to public interests, and will result to wanton desecration of the
said historical and public park."13 The foregoing was embodied in a Manifesto,14 launched through a signature campaign conducted
by the residents and Cacayuran.

In addition, Cacayuran wrote a letter15 dated December 8, 2006 addressed to Mayor Eriguel, Vice Mayor Antonio Eslao (Vice Mayor
Eslao), and the members of the SB namely, Violeta Laroya-Balbin, Jaime Boado, Jr., Rogelio De Vera, James Dy, Crisogono
Colubong, Ricardo Fronda, Josephus Komiya, Erwina Eriguel, Felizardo Villanueva, and Gerard Mamuyac (Implicated Officers),
expressing the growing public clamor against the conversion of the Agoo Plaza into a commercial center. He then requested the
foregoing officers to furnish him certified copies of various documents related to the aforementioned conversion including, among
others, the resolutions approving the Redevelopment Plan as well as the loan agreements for the sake of public information and
transparency.

Unable to get any response, Cacayuran, invoking his right as a taxpayer, filed a Complaint16 against the Implicated Officers and
Land Bank, assailing, among others, the validity of the Subject Loans on the ground that the Plaza Lot used as collateral thereof is
property of public dominion and therefore, beyond the commerce of man. 17

6
Upon denial of the Motion to Dismiss dated December 27, 2006, 18 the Implicated Officers and Land Bank filed their respective
Answers.

For its part, Land Bank claimed that it is not privy to the Implicated Officers’ acts of destroying the Agoo Plaza. It further asserted
that Cacayuran did not have a cause of action against it since he was not privy to any of the Subject Loans. 19

During the pendency of the proceedings, the construction of the commercial center was completed and the said structure later
became known as the Agoo’s People Center (APC).

On May 8, 2007, the SB passed Municipal Ordinance No. 02-2007,20 declaring the area where the APC stood as patrimonial
property of the Municipality.

The Ruling of the RTC

In its Decision dated April 10, 2007,21 the RTC ruled in favor of Cacayuran, declaring the nullity of the Subject Loans. 22 It found that
the resolutions approving the said loans were passed in a highly irregular manner and thus, ultra vires; as such, the Municipality is
not bound by the same.23 Moreover, it found that the Plaza Lot is proscribed from collateralization given its nature as property for
public use.24

Aggrieved, Land Bank filed its Notice of Appeal on April 23, 2007. 25 On the other hand, the Implicated Officers’ appeal was deemed
abandoned and dismissed for their failure to file an appellants’ brief despite due notice. 26 In this regard, only Land Bank’s appeal
was given due course by the CA.

Ruling of the CA

In its Decision dated March 26, 2010,27 the CA affirmed with modification the RTC’s ruling, excluding Vice Mayor Eslao from any
personal liability arising from the Subject Loans.28

It held, among others, that: (1) Cacayuran had locus standi to file his complaint, considering that (a) he was born, raised and a bona
fide resident of the Municipality; and (b) the issue at hand involved public interest of transcendental importance; 29 (2) Resolution
Nos. 68-2005, 139-2005, 58-2006, 128-2006 and all other related resolutions (Subject Resolutions) were invalidly passed due to the
SB’s non-compliance with certain sections of Republic Act No. 7160, otherwise known as the "Local Government Code of 1991"
(LGC); (3) the Plaza Lot, which served as collateral for the Subject Loans, is property of public dominion and thus, cannot be
appropriated either by the State or by private persons;30 and (4) the Subject Loans are ultra vires because they were transacted
without proper authority and their collateralization constituted improper disbursement of public funds.

Dissatisfied, Land Bank filed the instant petition.

Issues Before the Court

The following issues have been raised for the Court’s resolution: (1) whether Cacayuran has standing to sue; (2) whether the
Subject Resolutions were validly passed; and (3) whether the Subject Loans are ultra vires.

The Court’s Ruling

The petition lacks merit.

A. Cacayuran’s standing to sue

Land Bank claims that Cacayuran did not have any standing to contest the construction of the APC as it was funded through the
proceeds coming from the Subject Loans and not from public funds. Besides, Cacayuran was not even a party to any of the Subject
Loans and is thus, precluded from questioning the same.

The argument is untenable.

It is hornbook principle that a taxpayer is allowed to sue where there is a claim that public funds are illegally disbursed, or that public
money is being deflected to any improper purpose, or that there is wastage of public funds through the enforcement of an invalid or
unconstitutional law. A person suing as a taxpayer, however, must show that the act complained of directly involves the illegal
disbursement of public funds derived from taxation. In other words, for a taxpayer’s suit to prosper, two requisites must be met
namely, (1) public funds derived from taxation are disbursed by a political subdivision or instrumentality and in doing so, a law is
violated or some irregularity is committed; and (2) the petitioner is directly affected by the alleged act. 31

7
Records reveal that the foregoing requisites are present in the instant case.

First, although the construction of the APC would be primarily sourced from the proceeds of the Subject Loans, which Land Bank
insists are not taxpayer’s money, there is no denying that public funds derived from taxation are bound to be expended as the
Municipality assigned a portion of its IRA as a security for the foregoing loans. Needless to state, the Municipality’s IRA, which
serves as the local government unit’s just share in the national taxes, 32 is in the nature of public funds derived from taxation. The
Court believes, however, that although these funds may be posted as a security, its collateralization should only be deemed
effective during the incumbency of the public officers who approved the same, else those who succeed them be effectively deprived
of its use.

In any event, it is observed that the proceeds from the Subject Loans had already been converted into public funds by the
Municipality’s receipt thereof. Funds coming from private sources become impressed with the characteristics of public funds when
they are under official custody.33

Accordingly, the first requisite has been clearly met.

Second, as a resident-taxpayer of the Municipality, Cacayuran is directly affected by the conversion of the Agoo Plaza which was
funded by the proceeds of the Subject Loans. It is well-settled that public plazas are properties for public use34 and therefore,
belongs to the public dominion.35 As such, it can be used by anybody and no one can exercise over it the rights of a private
owner.36 In this light, Cacayuran had a direct interest in ensuring that the Agoo Plaza would not be exploited for commercial
purposes through the APC’s construction. Moreover, Cacayuran need not be privy to the Subject Loans in order to proffer his
objections thereto. In Mamba v. Lara, it has been held that a taxpayer need not be a party to the contract to challenge its validity; as
long as taxes are involved, people have a right to question contracts entered into by the government. 37

Therefore, as the above-stated requisites obtain in this case, Cacayuran has standing to file the instant suit.

B. Validity of the Subject Resolutions

Land Bank avers that the Subject Resolutions provided ample authority for Mayor Eriguel to contract the Subject Loans. It posits
that Section 444(b)(1)(vi) of the LGC merely requires that the municipal mayor be authorized by the SB concerned and that such
authorization need not be embodied in an ordinance.38

A careful perusal of Section 444(b)(1)(vi) of the LGC shows that while the authorization of the municipal mayor need not be in the
form of an ordinance, the obligation which the said local executive is authorized to enter into must be made pursuant to a law or
ordinance, viz:

Sec. 444. The Chief Executive: Powers, Duties, Functions and Compensation. -

xxxx

(b) For efficient, effective and economical governance the purpose of which is the general welfare of the municipality and its
inhabitants pursuant to Section 16 of this Code, the municipal mayor shall:

xxxx

(vi) Upon authorization by the sangguniang bayan, represent the municipality in all its business transactions and sign on its behalf
all bonds, contracts, and obligations, and such other documents made pursuant to law or ordinance; (Emphasis and underscoring
supplied)

In the present case, while Mayor Eriguel’s authorization to contract the Subject Loans was not contained – as it need not be
contained – in the form of an ordinance, the said loans and even the Redevelopment Plan itself were not approved pursuant to any
law or ordinance but through mere resolutions. The distinction between ordinances and resolutions is well-perceived. While
ordinances are laws and possess a general and permanent character, resolutions are merely declarations of the sentiment or
opinion of a lawmaking body on a specific matter and are temporary in nature. 39 As opposed to ordinances, "no rights can be
conferred by and be inferred from a resolution."40 In this accord, it cannot be denied that the SB violated Section 444(b)(1)(vi) of the
LGC altogether.

Noticeably, the passage of the Subject Resolutions was also tainted with other irregularities, such as (1) the SB’s failure to submit
the Subject Resolutions to the Sangguniang Panlalawigan of La Union for its review contrary to Section 56 of the LGC; 41 and (2) the
lack of publication and posting in contravention of Section 59 of the LGC.42

In fine, Land Bank cannot rely on the Subject Resolutions as basis to validate the Subject Loans.

8
C. Ultra vires nature of the Subject

Loans

Neither can Land Bank claim that the Subject Loans do not constitute ultra vires acts of the officers who approved the same.

Generally, an ultra vires act is one committed outside the object for which a corporation is created as defined by the law of its
organization and therefore beyond the powers conferred upon it by law. 43 There are two (2) types of ultra vires acts. As held in
Middletown Policemen's Benevolent Association v. Township of Middletown:44

There is a distinction between an act utterly beyond the jurisdiction of a municipal corporation and the irregular exercise of a basic
power under the legislative grant in matters not in themselves jurisdictional. The former are ultra vires in the primary sense and void;
the latter, ultra vires only in a secondary sense which does not preclude ratification or the application of the doctrine of estoppel in
the interest of equity and essential justice. (Emphasis and underscoring supplied)

In other words, an act which is outside of the municipality’s jurisdiction is considered as a void ultra vires act, while an act attended
only by an irregularity but remains within the municipality’s power is considered as an ultra vires act subject to ratification and/or
validation. To the former belongs municipal contracts which (a) are entered into beyond the express, implied or inherent powers of
the local government unit; and (b) do not comply with the substantive requirements of law e.g., when expenditure of public funds is
to be made, there must be an actual appropriation and certificate of availability of funds; while to the latter belongs those which (a)
are entered into by the improper department, board, officer of agent; and (b)do not comply with the formal requirements of a written
contract e.g., the Statute of Frauds.45

Applying these principles to the case at bar, it is clear that the Subject Loans belong to the first class of ultra vires acts deemed as
void.

Records disclose that the said loans were executed by the Municipality for the purpose of funding the conversion of the Agoo Plaza
into a commercial center pursuant to the Redevelopment Plan. However, the conversion of the said plaza is beyond the
Municipality’s jurisdiction considering the property’s nature as one for public use and thereby, forming part of the public dominion.
Accordingly, it cannot be the object of appropriation either by the State or by private persons. 46 Nor can it be the subject of lease or
any other contractual undertaking.47 In Villanueva v. Castañeda, Jr.,48 citing Espiritu v. Municipal Council of Pozorrubio,49 the Court
pronounced that:

x x x Town plazas are properties of public dominion, to be devoted to public use and to be made available to the public in general.
They are outside the commerce of man and cannot be disposed of or even leased by the municipality to private parties.1âwphi1

In this relation, Article 1409(1) of the Civil Code provides that a contract whose purpose is contrary to law, morals, good customs,
public order or public policy is considered void50 and as such, creates no rights or obligations or any juridical
relations.51 Consequently, given the unlawful purpose behind the Subject Loans which is to fund the commercialization of the Agoo
Plaza pursuant to the Redevelopment Plan, they are considered as ultra vires in the primary sense thus, rendering them void and in
effect, non-binding on the Municipality.

At this juncture, it is equally observed that the land on which the Agoo Plaza is situated cannot be converted into patrimonial
property – as the SB tried to when it passed Municipal Ordinance No. 02-200752 – absent any express grant by the national
government.53 As public land used for public use, the foregoing lot rightfully belongs to and is subject to the administration and
control of the Republic of the Philippines.54 Hence, without the said grant, the Municipality has no right to claim it as patrimonial
property.

Nevertheless, while the Subject Loans cannot bind the Municipality for being ultra vires, the officers who authorized the passage of
the Subject Resolutions are personally liable. Case law states that public officials can be held personally accountable for acts
claimed to have been performed in connection with official duties where they have acted ultra vires, 55 as in this case.

WHEREFORE, the petition is DENIED. Accordingly, the March 26, 2010 Decision of the Court of Appeals in CA-G.R. CV. No. 89732
is hereby AFFIRMED.

SO ORDERED.

ESTELA M. PERLAS-BERNABE
Associate Justice

9
 Republic of the Philippines
SUPREME COURT
Manila

SECOND DIVISION

G.R. No. L-64279 April 30, 1984

ANSELMO L. PESIGAN and MARCELINO L. PESIGAN, petitioners,

vs.
JUDGE DOMINGO MEDINA ANGELES, Regional Trial Court, Caloocan City Branch 129, acting for REGIONAL TRIAL
COURT of Camarines Norte, now presided over by JUDGE NICANOR ORIÑO, Daet Branch 40; DRA. BELLA S. MIRANDA,
ARNULFO V. ZENAROSA, ET AL., respondents.

Quiazon, De Guzman Makalintal and Barot for petitioners.

The Solicitor General for respondents.

AQUINO, J.:ñé+.£ªwph!1

At issue in this case is the enforceability, before publication in the Official Gazette of June 14, 1982, of Presidential Executive Order
No. 626-A dated October 25, 1980, providing for the confiscation and forfeiture by the government of carabaos transported from one
province to another.

Anselmo L. Pesigan and Marcelo L. Pesigan, carabao dealers, transported in an Isuzu ten-wheeler truck in the evening of April 2,
1982 twenty-six carabaos and a calf from Sipocot, Camarines Sur with Padre Garcia, Batangas, as the destination.

They were provided with (1) a health certificate from the provincial veterinarian of Camarines Sur, issued under the Revised
Administrative Code and Presidential Decree No. 533, the Anti-Cattle Rustling Law of 1974; (2) a permit to transport large cattle
issued under the authority of the provincial commander; and (3) three certificates of inspection, one from the Constabulary
command attesting that the carabaos were not included in the list of lost, stolen and questionable animals; one from the LIvestock
inspector, Bureau of Animal Industry of Libmanan, Camarines Sur and one from the mayor of Sipocot.

In spite of the permit to transport and the said four certificates, the carabaos, while passing at Basud, Camarines Norte, were
confiscated by Lieutenant Arnulfo V. Zenarosa, the town's police station commander, and by Doctor Bella S. Miranda, provincial
veterinarian. The confiscation was basis on the aforementioned Executive Order No. 626-A which provides "that henceforth, no
carabao, regardless of age, sex, physical condition or purpose and no carabeef shall be transported from one province to
another. The carabaos or carabeef transported in violation of this Executive Order as amended shall be subject to confiscation and
forfeiture by the government to be distributed ... to deserving farmers through dispersal as the Director of Animal Industry may see
fit, in the case of carabaos" (78 OG 3144).

Doctor Miranda distributed the carabaos among twenty-five farmers of Basud, and to a farmer from the Vinzons municipal nursery
(Annex 1).

The Pesigans filed against Zenarosa and Doctor Miranda an action for replevin for the recovery of the carabaos allegedly valued at
P70,000 and damages of P92,000. The replevin order could not be executed by the sheriff. In his order of April 25, 1983 Judge
Domingo Medina Angeles, who heard the case at Daet and who was later transferred to Caloocan City, dismissed the case for lack
of cause of action.

The Pesigans appealed to this Court under Rule 45 of the Rules of Court and section 25 of the Interim Rules and pursuant to
Republic Act No. 5440, a 1968 law which superseded Rule 42 of the Rules of Court.

We hold that the said executive order should not be enforced against the Pesigans on April 2, 1982 because, as already noted, it is
a penal regulation published more than two months later in the Official Gazette dated June 14, 1982. It became effective only fifteen
days thereafter as provided in article 2 of the Civil Code and section 11 of the Revised Administrative Code.

The word "laws" in article 2 (article 1 of the old Civil Code) includes circulars and regulations which prescribe penalties. Publication
is necessary to apprise the public of the contents of the regulations and make the said penalties binding on the persons affected
thereby. (People vs. Que Po Lay, 94 Phil. 640; Lim Hoa Ting vs. Central Bank of the Phils., 104 Phil. 573; Balbuna vs. Secretary of
Education, 110 Phil. 150.)

10
The Spanish Supreme Court ruled that "bajo la denominacion generica de leyes, se comprenden tambien los reglamentos, Reales
decretos, Instrucciones, Circulares y Reales ordenes dictadas de conformidad con las mismas por el Gobierno en uso de su
potestad (1 Manresa, Codigo Civil, 7th Ed., p. 146.)

Thus, in the Que Po Lay case, a person, convicted by the trial court of having violated Central Bank Circular No. 20 and sentenced
to six months' imprisonment and to pay a fine of P1,000, was acquitted by this Court because the circular was published in the
Official Gazette three months after his conviction. He was not bound by the circular.

That ruling applies to a violation of Executive Order No. 626-A because its confiscation and forfeiture provision or sanction makes it
a penal statute. Justice and fairness dictate that the public must be informed of that provision by means of publication in the Gazette
before violators of the executive order can be bound thereby.

The cases of Police Commission vs. Bello, L-29960, January 30, 1971, 37 SCRA 230 and Philippine Blooming Mills vs. Social
Security System, 124 Phil. 499, cited by the respondents, do not involve the enforcement of any penal regulation.

Commonwealth Act No. 638 requires that all Presidential executive orders having general applicability should be published in the
Official Gazette. It provides that "every order or document which shag prescribe a penalty shall be deemed to have general
applicability and legal effect."

Indeed, the practice has always been to publish executive orders in the Gazette. Section 551 of the Revised Administrative Code
provides that even bureau "regulations and orders shall become effective only when approved by the Department Head and
published in the Official Gazette or otherwise publicly promulgated". (See Commissioner of Civil Service vs. Cruz, 122 Phil. 1015.)

In the instant case, the livestock inspector and the provincial veterinarian of Camarines Norte and the head of the Public Affairs
Office of the Ministry of Agriculture were unaware of Executive Order No. 626-A. The Pesigans could not have been expected to be
cognizant of such an executive order.

It results that they have a cause of action for the recovery of the carabaos. The summary confiscation was not in order. The
recipients of the carabaos should return them to the Pesigans. However, they cannot transport the carabaos to Batangas because
they are now bound by the said executive order. Neither can they recover damages. Doctor Miranda and Zenarosa acted in good
faith in ordering the forfeiture and dispersal of the carabaos.

WHEREFORE, the trial court's order of dismissal and the confiscation and dispersal of the carabaos are reversed and set aside.
Respondents Miranda and Zenarosa are ordered to restore the carabaos, with the requisite documents, to the petitioners, who as
owners are entitled to possess the same, with the right to dispose of them in Basud or Sipocot, Camarines Sur. No costs.

SO ORDERED.1äwphï1.ñët

Makasiar, (Chairman), Concepcion, Jr., Guerrero, and Escolin, JJ., concur.

De Castro, J., took no part.

Separate Opinions

ABAD SANTOS, J., concurring:

The Pesigans are entitled to the return of their carabaos or the value of each carabao which is not returned for any reason. The
Pesigans are also entitled to a reasonable rental for each carabao from the twenty six farmers who used them. The farmers should
not enrich themselves at the expense of the Pesigans.

11
 FIRST DIVISION

[G.R. No. 138509. July 31, 2000]

IMELDA MARBELLA-BOBIS, petitioner, vs. ISAGANI D. BOBIS, respondent.

DECISION

YNARES-SANTIAGO, J.:

On October 21, 1985, respondent contracted a first marriage with one Maria Dulce B. Javier. Without said marriage having been
annulled, nullified or terminated, the same respondent contracted a second marriage with petitioner Imelda Marbella-Bobis on
January 25, 1996 and allegedly a third marriage with a certain Julia Sally Hernandez. Based on petitioners complaint-affidavit, an
information for bigamy was filed against respondent on February 25, 1998, which was docketed as Criminal Case No. Q98-75611 of
the Regional Trial Court, Branch 226, Quezon City. Sometime thereafter, respondent initiated a civil action for the judicial
declaration of absolute nullity of his first marriage on the ground that it was celebrated without a marriage license. Respondent then
filed a motion to suspend the proceedings in the criminal case for bigamy invoking the pending civil case for nullity of the first
marriage as a prejudicial question to the criminal case. The trial judge granted the motion to suspend the criminal case in an Order
dated December 29, 1998.[1] Petitioner filed a motion for reconsideration, but the same was denied.

Hence, this petition for review on certiorari. Petitioner argues that respondent should have first obtained a judicial declaration of
nullity of his first marriage before entering into the second marriage, inasmuch as the alleged prejudicial question justifying
suspension of the bigamy case is no longer a legal truism pursuant to Article 40 of the Family Code.[2]

The issue to be resolved in this petition is whether the subsequent filing of a civil action for declaration of nullity of a previous
marriage constitutes a prejudicial question to a criminal case for bigamy.

A prejudicial question is one which arises in a case the resolution of which is a logical antecedent of the issue involved therein.[3] It is
a question based on a fact distinct and separate from the crime but so intimately connected with it that it determines the guilt or
innocence of the accused.[4] It must appear not only that the civil case involves facts upon which the criminal action is based, but
also that the resolution of the issues raised in the civil action would necessarily be determinative of the criminal
case.[5] Consequently, the defense must involve an issue similar or intimately related to the same issue raised in the criminal action
and its resolution determinative of whether or not the latter action may proceed. [6] Its two essential elements are:[7]

(a) the civil action involves an issue similar or intimately related to the issue raised in the criminal action; and

(b) the resolution of such issue determines whether or not the criminal action may proceed.

A prejudicial question does not conclusively resolve the guilt or innocence of the accused but simply tests the sufficiency of the
allegations in the information in order to sustain the further prosecution of the criminal case. A party who raises a prejudicial
question is deemed to have hypothetically admitted that all the essential elements of a crime have been adequately alleged in the
information, considering that the prosecution has not yet presented a single evidence on the indictment or may not yet have rested
its case. A challenge of the allegations in the information on the ground of prejudicial question is in effect a question on the merits of
the criminal charge through a non-criminal suit.

Article 40 of the Family Code, which was effective at the time of celebration of the second marriage, requires a prior judicial
declaration of nullity of a previous marriage before a party may remarry. The clear implication of this is that it is not for the parties,
particularly the accused, to determine the validity or invalidity of the marriage.[8] Whether or not the first marriage was void for lack of
a license is a matter of defense because there is still no judicial declaration of its nullity at the time the second marriage was
contracted. It should be remembered that bigamy can successfully be prosecuted provided all its elements concur two of which are
a previous marriage and a subsequent marriage which would have been valid had it not been for the existence at the material time
of the first marriage.[9]

In the case at bar, respondents clear intent is to obtain a judicial declaration of nullity of his first marriage and thereafter to invoke
that very same judgment to prevent his prosecution for bigamy. He cannot have his cake and eat it too. Otherwise, all that an
adventurous bigamist has to do is to disregard Article 40 of the Family Code, contract a subsequent marriage and escape a bigamy
charge by simply claiming that the first marriage is void and that the subsequent marriage is equally void for lack of a prior judicial
declaration of nullity of the first. A party may even enter into a marriage aware of the absence of a requisite - usually the marriage
license - and thereafter contract a subsequent marriage without obtaining a declaration of nullity of the first on the assumption that
the first marriage is void. Such scenario would render nugatory the provisions on bigamy. As succinctly held in Landicho v.
Relova:[10]

12
 (P)arties to a marriage should not be permitted to judge for themselves its nullity, only competent courts having
such authority. Prior to such declaration of nullity, the validity of the first marriage is beyond question. A party
who contracts a second marriage then assumes the risk of being prosecuted for bigamy.

Respondent alleges that the first marriage in the case before us was void for lack of a marriage license. Petitioner, on the other
hand, argues that her marriage to respondent was exempt from the requirement of a marriage license. More specifically, petitioner
claims that prior to their marriage, they had already attained the age of majority and had been living together as husband and wife
for at least five years.[11] The issue in this case is limited to the existence of a prejudicial question, and we are not called upon to
resolve the validity of the first marriage. Be that as it may, suffice it to state that the Civil Code, under which the first marriage was
celebrated, provides that "every intendment of law or fact leans toward the validity of marriage, the indissolubility of the marriage
bonds."[12] Hence, parties should not be permitted to judge for themselves the nullity of their marriage, for the same must be
submitted to the determination of competent courts. Only when the nullity of the marriage is so declared can it be held as void, and
so long as there is no such declaration the presumption is that the marriage exists. [13] No matter how obvious, manifest or patent the
absence of an element is, the intervention of the courts must always be resorted to. That is why Article 40 of the Family Code
requires a "final judgment," which only the courts can render. Thus, as ruled in Landicho v. Relova,[14] he who contracts a second
marriage before the judicial declaration of nullity of the first marriage assumes the risk of being prosecuted for bigamy, and in such a
case the criminal case may not be suspended on the ground of the pendency of a civil case for declaration of nullity. In a recent
case for concubinage, we held that the pendency of a civil case for declaration of nullity of marriage is not a prejudicial
question.[15] This ruling applies here by analogy since both crimes presuppose the subsistence of a marriage.

Ignorance of the existence of Article 40 of the Family Code cannot even be successfully invoked as an excuse. [16] The contracting of
a marriage knowing that the requirements of the law have not been complied with or that the marriage is in disregard of a legal
impediment is an act penalized by the Revised Penal Code.[17] The legality of a marriage is a matter of law and every person is
presumed to know the law. As respondent did not obtain the judicial declaration of nullity when he entered into the second marriage,
why should he be allowed to belatedly obtain that judicial declaration in order to delay his criminal prosecution and subsequently
defeat it by his own disobedience of the law? If he wants to raise the nullity of the previous marriage, he can do it as a matter of
defense when he presents his evidence during the trial proper in the criminal case.

The burden of proof to show the dissolution of the first marriage before the second marriage was contracted rests upon the
defense,[18] but that is a matter that can be raised in the trial of the bigamy case. In the meantime, it should be stressed that not
every defense raised in the civil action may be used as a prejudicial question to obtain the suspension of the criminal action. The
lower court, therefore, erred in suspending the criminal case for bigamy. Moreover, when respondent was indicted for bigamy, the
fact that he entered into two marriage ceremonies appeared indubitable. It was only after he was sued by petitioner for bigamy that
he thought of seeking a judicial declaration of nullity of his first marriage. The obvious intent, therefore, is that respondent merely
resorted to the civil action as a potential prejudicial question for the purpose of frustrating or delaying his criminal prosecution. As
has been discussed above, this cannot be done.

In the light of Article 40 of the Family Code, respondent, without first having obtained the judicial declaration of nullity of the first
marriage, can not be said to have validly entered into the second marriage. Per current jurisprudence, a marriage though void still
needs a judicial declaration of such fact before any party can marry again; otherwise the second marriage will also be void. [19] The
reason is that, without a judicial declaration of its nullity, the first marriage is presumed to be subsisting. In the case at bar,
respondent was for all legal intents and purposes regarded as a married man at the time he contracted his second marriage with
petitioner.[20] Against this legal backdrop, any decision in the civil action for nullity would not erase the fact that respondent entered
into a second marriage during the subsistence of a first marriage. Thus, a decision in the civil case is not essential to the
determination of the criminal charge. It is, therefore, not a prejudicial question. As stated above, respondent cannot be permitted to
use his own malfeasance to defeat the criminal action against him. [21]

WHEREFORE, the petition is GRANTED. The order dated December 29, 1998 of the Regional Trial Court, Branch 226 of Quezon
City is REVERSED and SET ASIDE and the trial court is ordered to IMMEDIATELY proceed with Criminal Case No. Q98-75611.

SO ORDERED.

Davide, Jr., C.J., (Chairman), Puno, Kapunan, and Pardo, JJ., concur.

13
 EN BANC
[G.R. No. 125539. July 27, 1999]
PEOPLE OF THE PHILIPPINES, plaintiff-appellee, vs. ALFONSO PATALIN, JR., ALEX MIJAQUE, AND NESTOR
RAS, accused-appellants.

DECISION

MELO, J.:

Accused-appellants Alex Mijaque and Alfonso Patalin, Jr. were charged before Branch 25 of the Regional Trial Court of the
6th Judicial Region stationed in Iloilo City, with the crime of robbery. * The Amended Information dated October 11, 1985 charged:

That on or about August 11, 1984, in the municipality of Lambunao, province of Iloilo, Philippines, and within the jurisdiction of this
Court, the above named two (2) accused, conspiring, confederating and cooperating with three (3) others whose identities are still
unknown and who are still at large, armed with bladed weapons by means of force, violence and intimidation, taking advantage of
the nighttime to better realize their purpose, and in the dwelling of the offended party, did then and there wilfully, unlawfully and
feloniously take, steal and carry away, with intent to gain, cash amount of Three Hundred (P300.00) Pesos, Philippine Currency,
owned by the victim Corazon Aliman and the following personal property: one (1) adjustable wrench, one (1) vise grip, one (1) screw
driver, one (1) pair of levis pants, one (1) travelling bag and one (1) wallet containing ten (P10.00) pesos, with a total value of Four
Hundred (P400.00) Pesos, Philippine Currency, owned by the victims Reynaldo Aliman and Josephine Belesario, the over all total of
cash and personal property being SEVEN HUNDRED (P700.00) PESOS, Philippine Currency, without the consent of the above-
mentioned offended parties and to their damage and prejudice in the aforestated amount; that by reason or on the occasion of said
Robbery, the above named two (2) accused did then and there hack victim Reynaldo Aliman twice hitting him and inflicting wounds
which required medical attendance of more than thirty (30) days, as well as inflict physical injuries to the other victims Corazon
Aliman and Josephine Belesario causing them to sustain injuries requiring medical attendance for several number of days.

CONTRARY TO LAW.

(pp. 92-93, II Record.)

In a Second Amended Information also dated October 11, 1985 and docketed as Criminal Case No. 18305, accused-
appellants Alex Mijaque, Alfonso Patalin, Jr., and Nestor Ras were charged before the same court with the crime of robbery with
multiple rape, thusly:

That on or about August 11, 1984, in the municipality of Lambunao, province of Iloilo, Philippines, and within the jurisdiction of this
Court, the above-named three (3) accused, with deliberate intent, and without any justifiable motive, conspiring, confederating and
working together with Richard Doe, Philip Doe and Robert Doe who are still at large, all armed with firearms and other deadly
weapons, thereby performing [sic] themselves into a band, entered the dwelling of Jesusa Carcillar, and once inside, with intent to
gain and with violence against, and/or intimidation of persons, did then and there wilfully, unlawfully and feloniously take, steal and
carry away Five Hundred (P500.00) Pesos in cash, one (1) ring worth Two Thousand (P2,000.00) Pesos, one (1) pair of earrings
worth One Thousand (P1,000.00) Pesos, and one (1) Seiko wrist watch worth Three Thousand (P3,000.00) Pesos, making a total of
Six Thousand Five Hundred (P6,500.00) Pesos, against the will and/or consent of the owner; that on the occasion thereof, the
above-named three (3) accused, conspiring and working together with their companions who are still at large, by means of force and
intimidation, did then and there wilfully, unlawfully and feloniously have sexual intercourse with Perpetua Carcillar, Juliana Carcillar,
Rogelia Carcillar and Josephine Belesario, against their will and consent.

CONTRARY TO LAW.

(pp. 90-91, II Record.)

Upon arraignment on November 12, 1985, accused-appellants entered a plea of not guilty to both crimes charged (p. 103, II
Record).

After trial on the merits, a joint judgment was rendered, disposing:

Wherefore, premises considered there being sufficient and satisfactory proof showing that the accused in these two cases are guilty
beyond reasonable doubt of the charges filed against them, they are hereby sentenced as follows:

a) In Crim. Case No. 18376 for Robbery with Physical Injuries, accused Alfonso Patalin, Jr. and Alex Mijaque are penalized to suffer
the indeterminate penalty of imprisonment of Ten (10) years, and One (1) day of Prision Mayor, as minimum, to Seventeen (17)
years and Four (4) months of Reclusion Temporal, as maximum, to indemnify Corazon Aliman the amount of P700.00 representing
the value of her property robbed from her and also to indemnify Reynaldo Aliman the amount of P8,000.00 representing the
expenses he incurred for his medication and hospitalization due to the wounds he suffered.

14
b) In Criminal Case No. 18305 for Robbery with Multiple Rapes, accused Alfonso Patalin, Jr., Alex Mijaque and Nestor Ras are
sentenced to a death penalty and to indemnify the members of the Carcillar family the amount of P6,500.00 representing the cash
and articles taken from them.

In both cases the accused are also ordained to pay the costs.

SO ORDERED.

(p. 80, Rollo.)

The trial court arrived at the aforestated conclusion based on the following findings:

Criminal Case No. 18376

The crime of robbery (with physical injuries) was indeed committed by accused-appellants Alfonso Patalin, Jr. and Alex
Mijaque, as well as by their unidentified companions, based on the positive identification made by complaining witness Corazon
Aliman, and corroborated by her son Reynaldo and the latters half sister Josephine Belisario (p. 77, Rollo).

Criminal Case No. 18305

Accused-appellants Alfonso Patalin, Jr., Alex Mijaque, and Nestor Ras, as well as an unidentified companion, acted in concert
to commit the crime of robbery with multiple rape. They were positively identified by the following witnesses: Juliana Carcillar who
was raped twice by Alex Mijaque; Josephine Belisario who was raped once by Alex Mijaque; Rogelia Carcillar who was raped by
Alex Mijaque; and Perpetua Carcillar, who was raped by Nestor Ras, after Alfonso Patalin, Jr. failed in his attempt to rape
her. Accused-appellant Patalin was likewise identified by Reynaldo Aliman who personally knew him as a former barangay-mate for
along time, as well as by Corazon Aliman, mother of Reynaldo. The identification of accused-appellants was facilitated and aided by
a bright full moon and due to the fact that they tarried in the crime scene for a long period of time, thus allowing their victims to
imprint in their memory the countenance or visage of accused-appellants. Said positive and clear identification by the complaining
witnesses, who were not shown to have any ill motive to falsify the truth and to implicate accused-appellants, prevails over the
latters defense of denial. Band, nocturnity, and dwelling, were likewise appreciated against accused-appellants (pp. 78-79, Rollo).

The errors assigned by accused-appellants in their individual briefs are summarized as follows: (1) The trial court erred in
finding that accused-appellants are responsible for the crimes charged; (2) The trial court erred in convicting accused-appellant
Patalin notwithstanding the fact that the latter was arrested without a warrant; (3) Assuming without conceding that accused-
appellants (Patalin and Ras) committed the crimes charged, the trial court erred in imposing the penalty of death as the same was
suspended upon the ratification of the 1987 Constitution (pp. 86, 146, 204, Rollo).

The prosecutions version of the August 11, 1984 incident, based on the testimony of prosecution witnesses Dr. Edgardo
Carmelo, Dra. Leticia Sitchon Santiago, Reynaldo Aliman, Corazon Aliman, Josephine Belisario, Juliana Carcillar, Rogelia Carcillar,
and Perpetua Carcillar, is summarized in the Solicitor Generals consolidated Brief, as follows:

At about 7:30 in the evening of August 11, 1984, while Reynaldo Aliman, his half sister Josephine Belisario, and their mother
Corazon Aliman were having a conversation inside their house at Barangay Lumanay, municipality of Lambunao, province of Iloilo,
appellant Alfonso Patalin, Jr., who was outside the fenced perimeter of said house, called out Reynaldo Aliman by his nickname and
asked the latter to let him and the other persons with him in (pp. 5-6, TSN, Dec. 16, 1986).

Reynaldo Aliman opened the window and, because of the moonlight, saw appellant Alfonso Patalin, Jr. with (2) other
persons. Appellant Alfonso Patalin, Jr. asked again Reynaldo Aliman to let them in (pp. 7-8, ibid.). Reynaldo Aliman opened the gate
and Alfonso Patalin together with his companions, one of whom is appellant Alex Mijaque, entered the premises (pp. 8, 10-11,
ibid.). Immediately upon entering, appellant Alfonso Patalin, Jr. pointed the beam of his flashlight at Reynaldo Aliman. At this
juncture, appellant Alex Mijaque hacked Reynaldo Aliman twice with a bolo hitting the latter at the neck, right arm, and the chest (pp.
14-16, ibid.). Thereupon, Reynaldo Aliman immediately ran away (p. 17, ibid.).

Corazon Aliman and Josephine Belisario, who went to the balcony of their house, witnessed the hacking incident and the former
shouted for help (p. 6, TSN, July 21, 1987; pp. 8-9, TSN, June 30, 1988).Two of the assailants, one of whom is appellant Alex
Mijaque, pushed Corazon Aliman and Josephine Belisario inside their house, covered their mouth and told them not to make any
noise. Later, appellant Alex Mijaque dragged Josephine Belisario to the house of the latters aunt (sister of Corazon Aliman) which is
beside their house. The other man stayed put and while holding a double-bladed knife, threatened to kill Corazon Aliman if the latter
will not give him money. After Corazon Aliman gave him three hundred pesos (P300.00) cash, he ransacked the house and took
one (1) wrist watch, one (1) vise grip, one (1) screw driver, one (1) pair of Levis trousers, one (1) travelling bag, and one (1) wallet
containing ten pesos (P10.00); the total value thereof is seven hundred pesos (P700.00) inclusive of the three hundred pesos
(P300.00) cash. Thereafter, the man also dragged Corazon Aliman to her sisters house (pp. 6-8, TSN, July 21, 1987; pp. 11-12,
TSN, June 30, 1988).

Josephine Belisario, who was dragged by Alex Mijaque to her aunts house which is just twenty (20) meters away, saw six (6)
persons, one of whom is appellant Alfonso Patalin, Jr., outside the house of her aunt. Josephine Belisario was forced to call out her
aunts name and ask that the door be opened for her. While the door was being opened, it was kicked by one of the six (6)
persons. Alfonso Patalin immediately went in, boxed the aunt of Josephine Belisario on the body and announced that they are

15
staging a hold-up. The other companions of appellant Alfonso Patalin, Jr., including appellant Alex Mijaque, who were armed with
knives, a bolo, and a gun also went in and restrained Josephine Belisarios cousins, namely Rogelia, Juliana, Perpetua, Roy, and
Victoriano, who are all surnamed Carcillar (pp. 11-15, TSN, June 30, 1988; p. 11, TSN, June 29, 1989). Josephine Belisario
together with her aunt and cousins were all forced to lie face down on the floor of the sala (p. 15, TSN, June 30, 1988; p. 7, TSN,
Feb. 15, 1990). Appellant Alfonso Patalin got hold of Mrs. Carcillar (Josephine Belisarios aunt and the mother of her cousins),
kicked and boxed the latter and exclaimed: Money, money. It is money we want. Appellant Alfonso Patalin forced Mrs. Carcillar into
a room where the latter gave him money (p. 16, TSN, June 30, 1988; pp. 7-8, February 15, 1990). Then, appellants and their
companions seized the following personalities of the Carcillars: (1) one Seiko 5 wristwatch worth three thousand pesos (P3,000.00),
(2) two (2) pairs of ladys rings worth two thousand (P2,000.00), (3) one (1) pair of earrings, and (4) two (2) travelling bags (p. 9,
TSN, February 15, 1990).

Rogelia Carcillar was brought outside their house by appellant Alex Mijaque who was armed with a butchers knife and threatened to
kill her if she will not lie down. Because of fear, she did as she was told (pp. 10, 16-17, TSN, February 15, 1990). Appellant Alex
Mijaque forcibly removed her underwear and placed himself on top of Rogelia. She tried to resist but appellant Alex Mijaque pressed
the tip of his knife at the formers neck and succeeded in having sexual intercourse with her (pp. 11-12, ibid.). Thereafter, appellant
Alex Mijaque brought her inside the house and ordered her to lie face down on the floor again (pp. 13-14, ibid.). Then, one of the
companions of appellant Alex Mijaque who was armed with a gun took her outside and brought her to a place not far from where
she was raped (p. 14, ibid.).This man, at the point of a gun, threatened to kill her if she will not obey his orders. Rogelia Carcillar,
who feared for her life, was left with no choice but to obey the mans orders. There, she was raped for the second time by this gun-
wielding man (pp. 15-16, ibid.). While Rogelia Carcillar was being raped, appellant Alfonso Patalin was also outside the house
standing on guard (p. 18, ibid.).

Juliana Carcillar was likewise brought outside the house by appellant Alex Mijaque who, with his knife, tried to rape her but he
initially failed because of her resistance. This angered appellant Alex Mijaque and he tried to kill Juliana Carcillar by stabbing the
latter but was prevailed upon not to do so by one of his companions (pp. 12-15, TSN, June 29, 1989).

Appellant Alex Mijaque, after delivering fist blows on the body of Juliana Carcillar, turned her over to one of his companions who
was in the garden outside the house and armed with a gun. This man threatened her with the gun and mauled her. She was
overpowered and he undressed her. He inserted his finger on her sex organ and eventually succeeded in having sexual intercourse
with her (pp. 15-17, ibid.). Then, this companion of appellant Alex Mijaque brought Juliana Carcillar back inside the house and
ordered to look for money. When she told him that they have no more money, he kept on harming her. In the course thereof, he
found and took a Seiko wristwatch owned by Perpetua Carcillar. Then, he brought her outside the house again where he had a brief
conversation with appellants Nestor Ras and Alfonso Patalin. She was then brought back inside the house and ordered to lie face
down on the floor again. While at this position, appellant Alex Mijaque approached her and brought her outside the house. She
refused to obey appellant Alex Mijaques order to lie down on the ground so he pushed her downwards. Her strength gave out and
he succeeded in raping her twice. She was then brought back inside the house (pp. 18-21, TSN, June 29, 1989).

Josephine Belisario, while laying face down on the floor of the sala, was dragged by appellant Alex Mijaque inside one of the
rooms. He threatened her with his knife and was able to undress her. He fondled her breasts, pulled her pubic hair and eventually
succeeded in having sexual intercourse with her. She was then left inside the room. Two companions of appellant Alex Mijaque
came in bringing with them her cousins Rogelia and Perpetua Carcillar. One of them saw Josephine Belisario and brought her to
another room. The man demanded money from her but she was not able to give him money.The man was also carrying a knife and
threatened her with the same. She resisted when he was forcing her to lie down on the bed but her strength finally gave out. He
likewise succeeded in having sexual intercourse with her. After raping her, the man took a piggy bank which was at the foot of the
bed and brought her back to the room where she was first raped. Her aunt and cousins were also inside the said room (pp. 17-25,
TSN, June 30, 1988).

Perpetua Carcillar suffered the same fate. While laying face down on the floor of the living room, she was pulled by the heir by
appellant Alfonso Patalin and ordered to stand up. When she stood up, she realized that her sister were no longer there. Appellant
Alfonso Patalin, armed with a double-bladed knife, brought her outside the house, ordered her to undress and lie down. Because of
fear, Perpetua Carcillar, who was then only thirteen (13) years old, obeyed appellant Alfonso Patalin. He tried to force his penis into
her vagina but did not succeed. Then, appellant Alfonso Patalin handed her over to appellant Nestor Ras, a member of their group
who was only about two (2) arms length away. Appellant Nestor Ras, armed with a double-bladed knife which he was pointing at
Perpetua Carcillar, ordered her to lie down. He fondled her breasts, kissed her, and succeeded in having sexual intercourse with
her. After raping her, appellant Nestor Ras brought her back inside the house. When she was returned inside the house, the
intruders were still demanding for money from her mother and were taking turns in beating the latter (pp. 4, 15-23, TSN, July 12,
1990).

Appellants left, together with the other assailants, taking with them the valuables stated earlier after threatening them not to report
the matter to the police or else they will return and kill all of them (p. 19, TSN, February 15, 1990).

Reynaldo Aliman was brought to Ricardo Ladrido Memorial Hospital where he received first aid. He was then brought to West
Visayas Medical Center located in Manduriao, Iloilo (pp. 18-20, TSN, December 16, 1986) and was treated by Dr. Edgardo Carmelo
(p. 4, TSN, May 14, 1986). Reynaldo Aliman sustained the following injuries: (1) hack wound, mid forearm, area ulnar side middle
third forearm, and (2) hack wound, left side of neck (pp. 5-6, ibid; Exhibit A). Reynaldo Aliman was confined in the hospital for

16
almost three (3) months and he spent more than eight thousand pesos (P8,000.00) for medicines, food and other expenditures (p.
19, TSN, December 16, 1986).

Dr. Leticia Sitchon Santiago examined and treated Josephine Belisario two days after she was raped. A hematoma, about 3x4
inches in diameter, was found on the left shoulder of Josephine Belisario which could have been caused by forcing the latter to lie
down on the ground. Josephine Belisario vagina admits two (2) fingers. Further, hematoma was noted in the hymen at nine oclock
and three oclock positions and fresh lacerations was also noted at nine, eleven, and three oclock positions. These are indications
that a foreign object, which could be a human penis, was inserted in the vagina and caused the lacerations of the hymen (pp. 6-9,
TSN, September 3, 1986).

Rogelia Carcillar, Juliana Carcillar and Perpetua Carcillar were also examined and treated by Dr. Leticia Santiago but such was
conducted three days after the incident (p. 17, ibid).

A hematoma was noted in the occipital region of the head of Rogelia Carcillar (p. 18, ibid). Her vagina admits two fingers snugly and
the perineum has a lacerated wound which is one centimeter in length (pp. 18-19, ibid; pp. 2-3, TSN, November 10, 1986). Fresh
lacerations were likewise noted in her hymen at eight, eleven and three oclock positions (p. 3, TSN, November 10, 1986). Dr.
Santiago further testified that a foreign object was inserted in the vagina of Rogelia Carcillar (p. 19, TSN, September 3, 1986; p. 3,
TSN, November 10, 1986).

Juliana Carcillar, 22 years old, sustained a hematoma in the forehead, left and right side of the face, upper right arm, uppermost and
lower portions of the left thigh, occipital region of the head and left side of the mouth. She also sustained the following injuries: (1)
cm. lacerated wound on the left side of the lower lip, (2) bite mark with hematoma on the left shoulder, (3) 1 cm. incised wounds on
the right index finger and right thumb, (4) 4 inches incised wound on the right forearm, and (5) multiple abrasions at the back
including the portion below the waistline, her vagina admits two fingers and fresh lacerations in the hymen were noted at eight,
eleven, and four oclock positions (pp. 10-15, TSN, November 10, 1986).

Perpetua Carcillar, 13 years old, sustained a 1 centimeter lacerated wound on the perineum which was also swollen. Her vagina
admits two fingers snugly (pp. 8-9, ibid). A fresh laceration at six oclock position and a hematoma also at six oclock position were
noted on her hymen (Exhibit C, p. 15, Record).

(pp. 300-311, Rollo.)

Denial and alibi were set up by accused-appellants based on their testimony and that of their witnesses, Alejandro Tabucan,
Felizardo Lebona, Rhodora Losaria, and Cristina Gumban. The denials, together with other arguments, are summarized as follows:

Alfonso Patalin

Accused-appellant Alfonso Patalin alleges that his name was only included by Jesus Larang, whom he described as the
landlord of Jesusa Carcillar and the Carcillar sisters, to force him to reveal the names of the persons who staged the robbery and
rape. Verily, he declared on the stand that when the victims saw him at the police station, two of them (Josephine Belisario and
Reynaldo Aliman) even smiled at him (tsn, August 13, 1993, pp. 10-11, 19-20).

In his brief, he argues that he was not positively identified, rationalizing that when prosecution witness Josephine Belisario
was asked on the stand if she recognized the person who called [her] brother Reynaldo, said witness responded that she did not
know the person who called her brother, and that she only recognized the callers voice (tsn, August 11, 1988, pp. 30-31). Further,
accused-appellant Patalin also alleges that he was arrested without a warrant.

Alex Mijaque

Accused-appellant Alex Mijaque argues that in the sworn statement of Reynaldo Aliman (p. 3, II Record), there is no mention
of his name nor that of accused-appellant Patalin as the perpetrators of the crimes charged. Moreover, during the preliminary
examination in the lower court, accused-appellant Mijaque was also not named as one of the malefactors. He likewise points out
that in the police blotter, the first report mentioned that the alleged offenders were unknown persons. No rape was reported. In the
second report, it was blottered that the alleged offenders were four unidentified persons. Again, no rape was reported. Accused-
appellant Mijaque likewise takes note of the report given by Rogelia Carcillar who merely narrated the robbery but did not report any
rape.

According to this accused-appellant, the police authorities of Iloilo, Manduriao (also referred to in the record as Mandurriao)
received a complaint from a resident thereat that his television set was stolen previous to the incidents herein involved. Accused-
appellant Mijaque was suspected as the thief and was picked up by the agents of the Manduriao Police Station without any warrant
of arrest and was thence detained for three days without any complaint (p. 93, Rollo). Meanwhile, the robbery at Lambunao, Iloilo
was being flashed at all police stations in Iloilo. The arresting officers of the Manduriao Police Station, so accused-appellant Mijaque
contends, in order to save themselves from charges of arbitrary detention, immediately referred him for custodial investigation in
regard to the Lambunao robbery. Consequently, three days after his confinement, a criminal complaint for robbery with physical
injuries and another for robbery with rape was filed against him by the Chief of Police of Lambunao, Iloilo.

Nestor Ras

17
 The third accused-appellant, Nestor Ras, argues that his name was never mentioned by Dr. Edgardo Carmelo, and that
Josephine Belisario was merely led by the public prosecutor into mentioning his name. He also states that the witnesses
declarations as regards his identification are confusing and inconsistent (pp. 208-210, Rollo).

Further, it is contended that Rogelio Carcillar himself, when asked by the public prosecutor about what happened to his sister
Perpetua Carcillar, testified that Nothing happened to them (p. 210, id).And when Perpetua Carcillar and the other female
prosecution witnesses reported the alleged incident to the police authorities, they never mentioned that they were raped.

As mentioned, all three accused-appellants, aside from denying the charges, also presented their respective alibis. Accused-
appellant Patalin testified that he was at home with his parents, wife, and children, at Pandan, Lambunao (tsn, August 13, 1993, pp.
16-17) at the time of the incident. As corroborative witness, he presented Felizardo Lebona, the person in charge of the plantation
where he was working, who testified that accused-appellant Patalin did not leave the plantation house from August 9 to 12, 1984
(tsn, October 15, 1993, pp. 4-5).

For his part, accused-appellant Mijaque insists that he had no opportunity to get out of the farm where he was working which
was located in Manduriao, Iloilo (tsn, May 6, 1993, p. 6). In July, 1985, he was arrested for theft of a television set and detained in
the Lambunao jail for investigation. Although three of the herein complainants were brought in front of his detention cell, he was not
identified.Instead, the policemen pointed to him and said, That is Alex Mijaque who raped you. If you will not include him, he will file
a case against you. Moreover, he testified that he was mauled in jail (tsn, July 29, 1993, pp. 10-13). Defense witness, Alejandro
Tabucan, neighbor of accused-appellant Mijaque, corroborated the latters alibi that on August 11, 1984, they had a drinking spree
from 6 oclock in the evening to 12 oclock midnight, and accused-appellant Mijaque was not able to leave the premises in
Manduriao. Tabucan also said that he saw Mijaque still asleep the following morning (tsn, August 6, 1993, pp. 4-5, 10).

Lastly, accused-appellant Nestor Ras declared that he was in the province of Antique (particularly, in Igbangkal, Dao) on
August 11, 1984 (tsn, December 17, 1993, p. 4). As corroborative witness, he presented Cristina Gumban, a vendor who testified
that on August 11, 1984, she bought cassava and sweet potatoes from accused-appellant Ras in Igbangkal, Dao, Antique from 3
oclock to 5 oclock in the afternoon, and that he saw Ras put the purchased items in a sack (tsn, March 4, 1994, p. 4).

We are not persuaded by the above posturings and are compelled to affirm.

Of primordial consideration in appellate matters is the legal principle that the assessment of the credibility of witnesses and
their testimony is a matter best undertaken by the trial court because of its unique opportunity to observe the witnesses firsthand
and to note their demeanor, conduct, and attitude under grilling examination (People vs. Ombrog, 268 SCRA 93 [1997]). We
generally uphold and respect this appraisal since, as an appellate court, we do not deal with live witnesses but only with the cold
pages of a written record (People vs. Herbieto, 269 SCRA 472 [1997]).

A close examination of the record convinces us of the prosecution witnesses credibility, particularly the ravished victims, who,
for approximately two agonizing hours, were subjected to a hellish nightmare occurring in the very privacy of their own homes.

As pointed out by the Office of the Solicitor General in its consolidated brief, the defense was not able to prove any motive on
the part of the private complainants to falsely testify that they were robbed and raped by accused-appellants. In fact, two of the rape
victims, Josephine Belisario and Rogelia Carcillar, were even married to first cousins of accused-appellant Patalin (pp. 327-328,
Rollo), and would not ordinarily turn against a relative although this be by mere affinity unless they really suffered the fate they
narrated.

Accused-appellants rely on the delay or vacillation on the part of the complaining witnesses. As discussed above in their
individual defenses, they emphasize that Reynaldo Aliman failed to mention the names of the perpetrators in his sworn statement;
that on August 11, 1984, Reynaldo instructed a relative, Jesus Larang, to report the hacking and robbery incidents at the Lambunao
Police Department, as well as the robbery committed in the Carcillar household, and that the police blotter stated that the alleged
offenders were unknown persons but contained no report of any rape; and that Rogelia Carcillars report did not mention that she
was raped.

Time and again, we have ruled that delay in lodging a criminal accusation does not impair the credibility of a witness if such
delay is satisfactorily explained (People vs. Bugarin, 273 SCRA 384 [1997]). An examination of Reynaldo Alimans sworn statement
(p. 3, I Record) shows that he clearly identified one of the callers as accused-appellant Alfonso Patalin. Anent his failure to mention
accused-appellant Mijaques name, he explained on cross-examination that he did not know yet the name of the person who
attacked him with the bolo at the time he executed his sworn statement (tsn, Dec. 16, 1986, pp. 35, 38-39). It was only later that he
found out that the name of his assailant was Alex Mijaque. As regards Jesus Larang, the fact that he mentioned unknown persons in
his report does not affect Reynaldos categorical and positive identification of accused-appellants Patalin and Mijaque as the
perpetrators of the hacking and robbery incidents at his home.

Anent the rape victims, it was clearly explained that their assailants told them not to report the matter to the police, otherwise,
the assailants will return and kill them (tsn, Feb. 15, 1990, p. 19). The victims were overcome by fear and shame (ibid., p.
31). Besides, the delay in reporting the multiple rapes was not procrastination as this was only 3 days from the date of the incident
(tsn, June 30, 1988, p. 22), a far shorter period than those mentioned in People vs. Gecomo (254 SCRA 82 [1996]) where we held
that a delay of 17 or 35 days, or even 6 months, by a victim of rape in reporting the attack on her honor, does not detract from the
veracity of her charge.

The defense also notes certain inconsistencies in the testimony of the complaining witnesses, as follows: (1) Juliana Carcillar
testified earlier that the only light in the house came from a kerosene lamp placed on a small table which was extinguished as a
result of it being knocked down, thus placing the house in darkness, while on the other hand, Perpetua Carcillar, earlier said that
although there was no more light in the house coming from the lamp, yet she could still see because the light of the moon still

18
illuminated their house, allegedly through the plastic roofing; and (2) the prosecution witnesses could not agree concerning the date
they went to San Dionisio, Iloilo to identify accused-appellant Nestor Ras, as well as the date when Ras was arrested.

Inconsistencies in the testimony of witnesses, when referring only to minor details and collateral matters do not affect either
the substance of their declaration, their veracity, or the weight of their testimony, and do not impair the credibility of such witnesses
where there is consistency in relating the principal occurrence and the positive identification of the assailant (Sumalpong vs. Court of
Appeals, 268 SCRA 764 [1997]). In fact, honest inconsistencies on minor and trivial matters serve to strengthen rather than destroy
the credibility of a witness to a crime, especially so when the crime is shocking to the conscience and numbing to the senses
(People vs. Agunias, 279 SCRA 52 [1997]).

With respect to the defenses of denial and alibi, significantly, these defenses, if unsubstantiated by clear and convincing
evidence, are negative and self-serving, deserve no weight in law, and cannot be given evidentiary value over the testimony of
credible witnesses who testify on affirmative matters (People vs. Gayon, 269 SCRA 587 [1997]). Positive identification, where
categorical and consistent and without any showing of ill motive on the part of the eyewitnesses testifying on the matter, prevails
over alibi and denial (People vs. Javier, 269 SCRA 181 [1997]). Verily, even if the defense of denial is supported by the testimony of
friends of the accused, it deserves the barest consideration (People vs. Gamiao, 240 SCRA 254 [1995]). It will be given weight only
if it would preclude any doubt that the accused could not have been physically present at the place of the crime or its vicinity at the
time of commission (People vs. Daquipil, 240 SCRA 314 [1995]; People vs. De Roxas, 241 SCRA 369 [1995];People vs. Morin, 241
SCRA 709 [1995]; People vs. Rivera, 242 SCRA 26 [1995]; People vs. Dela Iglesia, 241 SCRA 718 [1995]; People vs. Umali, 242
SCRA 17 [1995]; People vs. Dayson, 242 SCRA 124 [1995]; People vs. Espinosa, Jr. 243 SCRA 7 [1995]; People vs. Parica, 243
SCRA 557 [1995]; People vs. Escoto, 244 SCRA 87 [1995]).

Accused-appellant Mijaque testified that on August 11, 1984, he was in Manduriao, Iloilo. The overland travel time from the
town of Manduriao to Lambunao is approximately one hour and twenty minutes. Accused-appellant Patalin testified that he was in
Barangay Pandan, which is merely adjacent to Lambunao. Lastly, accused-appellant Nestor Ras testified that he was in Antique, a
province neighboring Iloilo, which is approximately two hours away therefrom via overland transportation. The defense tried to
corroborate these alibis by presenting witnesses who testified on details which happened ten years prior to the date their testimony
was given, and hence of naturally doubtful credibility.

Mutatis Mutandi People vs. Queliza (279 SCRA 145 [1997]), considering that the places where accused-appellants alleged
they were at could be traversed by motorized vehicles, it was not impossible that accused-appellants could not have been at the
crime scene by 7 oclock or 7:30 o'clock in the evening on August 11, 1984. More importantly and damming yet is the positive
identification of their presence thereat by the victims.

The trial court correctly appreciated the aggravating circumstances of nighttime and dwelling in Criminal Case No. 18376
considering that nighttime facilitated the commission of the crime and the evidence shows that accused-appellants took advantage
of the darkness to successfully consummate their plans (People vs. Apduhan, Jr., 24 SCRA 798 [1968]). Dwelling is clear from the
abuse of confidence which the victims reposed in the offenders by opening the door to them, as well as the violation of the sanctity
of privacy in the victims homes. He who goes to anothers house to slander him, hurt him, or do him wrong, is more guilty than he
who offends him elsewhere (Reyes, The Revised Penal Code Criminal Law, Vol. I, 1993 ed., citing the dissenting opinion of Justice
Villareal in People vs. Ambis, 68 Phil. 635 [1939] and Viada, 5th ed., Vol. II, pp. 323-324). We further affirm the trial courts finding on
the presence of the aggravating circumstance of band considering that Reynaldo Aliman testified that accused-appellants Patalin
and two other companions (one of whom was later identified as accused-appellant Mijaque) entered his home (tsn, p. 7, Dec. 16,
1986). This was corroborated by Josephine Belisario who even saw four (4) persons enter their gate, one of whom was accused-
appellant Patalin (tsn, p. 10, June 30, 1988). These same aggravating circumstances likewise attended the commission of the crime
of robbery with multiple rape in Criminal Case No. 18305 and this was clearly testified to by the victims thereof who stated that five
persons, including accused-appellant Patalin, armed with a bolo, a knife, and a long gun, entered their dwelling that unfortunate
night (tsn, June 29, 1989, p. 10; February 15, 1990, p. 5).

With respect to accused-appellants Patalin and Mijaques defense that they were arrested without warrants, suffice it to say
that any objection, defect, or irregularity attending an arrest must be made before the accused enters his plea (Padilla vs. CA, 269
SCRA 402 [1997]). As correctly pointed out in the Peoples consolidated brief, the record shows no objection was ever interposed
prior to arraignment and trial (p. 324, Rollo).

It is indubitable that there was conspiracy in the commission of the crimes in both Criminal Cases No. 18376 and 18305. In
the first criminal case, the evidence clearly shows that accused-appellants Patalin and Mijaque, together with unidentified
companions, committed the crime charged. Said culprits shared the common criminal objective of robbing the victims and inflicting
wounds upon Reynaldo Aliman on the occasion of the robbery. In the second case, all three accused-appellants (together with
unidentified companions), who were positively identified by the victims themselves, undoubtedly had the common criminal design of
robbing the household of Jesusa Carcillar, and of committing multiple rape on the occasion of the robbery. Accused-appellant
Mijaque dragged Josephine Belisario to her aunts house and the other culprits followed suit. Accused-appellant Patalin boxed
Jesusa Carcillar and announced that they were staging a hold-up. After robbing the household, they proceeded in ravishing the four
young female victims, Rogelia, Juliana, Josephine, and Perpetua, one after the other, thus truly exhibiting their concerted acts.

Conspiracy exists when two or more persons came to an agreement concerning the commission of a felony and decide to
commit it (People vs. Abarri, 242 SCRA 39 [1995]). It cannot be merely presumed. Similar to the physical act constituting the crime
itself, the elements of conspiracy must be proven beyond reasonable doubt.

In the case at bar, although there was no proof of previous actual agreement among accused-appellants adduced at the trial

...direct proof is not essential to show conspiracy. It need not be shown that the parties actually came together and agreed in
express terms to enter into and pursue a common design. The existence of the assent of minds which is involved in a conspiracy

19
maybe, and from the secrecy of the crime, usually must be, inferred by the court from proof of facts and circumstances which, taken
together, apparently indicate that they are merely parts of some complete whole. If it is proved that two or more persons aimed by
their acts towards the accomplishment of the same unlawful object, each doing a part so that their acts, though apparently
independent, were in fact connected and cooperative, indicating a closeness of personal association and a concurrence of
sentiment, then a conspiracy maybe inferred though no actual meeting among them to concert means is proved (People vs.
Carbonel, 48 Phil. 868; See also People vs. Viray, 147 SCRA 146; People vs. Balignasay, G.R. No. 76743, May 22,
1992; People vs. Galit, 230 SCRA 486)...

(People vs. Miranday, 242 SCRA 620 [1995]).

Verily, the participation of each of the accused-appellants was exhibited by the straightforward testimony of the victims
themselves.

This brings us to the crucial issue raised by accused-appellants on the death penalty. At the time the crimes charged were
committed in 1984, robbery with rape was punishable by death (Art. 294, Revised Penal Code). However, by virtue of the ratification
of the 1987 Constitution, specifically Paragraph (1), Section 19 of Article III thereof, the death penalty was abolished. Hence, the
argument that it could not be imposed upon accused-appellants. Said provision reads as follows:

Sec. 19 (1) Excessive fines shall not be imposed, nor cruel, degrading or inhuman punishment inflicted. Neither shall death penalty
be imposed, unless, for compelling reasons involving heinous crimes, the Congress hereafter provides for it. Any death penalty
already imposed shall be reduced to reclusion perpetua.

The constitutional abolition of the death penalty immediately took effect upon the ratification of the 1987
Constitution. However, said provision left the matter open for Congress to revive capital punishment at its discretion, for compelling
reasons involving heinous crimes. Simply stated, it did not prevent the legislature from reimposing the death penalty at some future
time (Bernas, The 1987 Constitution of the Republic of the Philippines: A Commentary, 1996 ed., pp. 507-508).

Congress eventually restored the death penalty by virtue of Republic Act No. 7659 or the Death Penalty Law which took effect
on January 1, 1994.

Accused-appellants are of the position that since the Constitutions abolition of the death penalty had retroactive effect, being
beneficial to the accused, the restoration or imposition of the death penalty on January 1, 1994 would no longer cover them
notwithstanding the fact that the decision was rendered by the trial court on June 14, 1995, when the Death Penalty Law had
already taken effect.

Article 21 of the Revised Penal Code provides that no felony shall be punishable by any penalty not prescribed by law prior to
its commission. At the time of the commission of the crime in 1984, as held by the trial court, robbery with rape, if committed with the
use of a deadly weapon or by two or more persons, was punishable by reclusion perpetua to death (Article 294[2], Revised Penal
Code [as amended by Presidential Decree No. 767]).

True, in 1987, the Constitution abolished the death penalty subject to Congress future restoration thereof for compelling
reasons involving heinous crimes. At the time of such ratification, the instant case was still at its trial stage. No penalty had as yet
then been imposed. Considering that the provision provides that [a]ny death penalty already imposed shall be reduced to reclusion
perpetua, it is clear that the framers intended said provision to have a retroactive effect on cases pending without any penalty of
death having been imposed yet. Consequently, upon ratification of the 1987 Constitution, any death penalty already imposed is
automatically without need for any executive action commuted (Bernas, The 1987 Constitution of the Republic of the Philippines: A
Commentary, 1996 ed., p. 508).

The instant case poses the following issue: When the death penalty was abolished in 1987 and was retroactively applied to
herein accused-appellants, did they gain a vested right thereto so that any future act restoring the death penalty would no longer
cover them? An affirmative answer would free accused-appellants from the fatal clutches of the death penalty.

Ours is a government of laws and not of men. The idea that an individual may be compelled to hold his life (or lose it), or the
means of living, at the mere will of another, is intolerable in any country where freedom prevails (Villavicencio vs. Lukban, 39 Phil
778 [1919]). Before us is a heinous crime indeed where People were harmed, robbed, ravished, and abused in the defaced sanctity
of their own homes. It is but human nature to feel some measure of loathing, disgust, and hatred for the offenders considering the
inhuman aspect of the crime committed. However, the ascendancy of the law is axiomatic in our type of government. Every official
act must be based on and must conform to the authority of a valid law, lacking which the act must be rejected (Cruz, Phil. Political
Law, 1996 ed., p. 51).The nobility of our intention is insufficient.

There is no doubt that the abolition of the death penalty in 1987 retroactively affected and benefited accused-
appellants. Article 22 of the Revised Penal Code provides that [p]enal laws shall have a retroactive effect insofar as they favor the
person guilty of a felony, who is not a habitual criminal . . . although at the time of the publication of such laws a final sentence has
been pronounced and the convict is serving the same.

A statute is penal when it imposes punishment for an offense committed against the state (Aquino, The Revised Penal Code,
Vol. I, 1987 ed., p. 5). The above-cited provision of the Constitution is penal in character since it deals with the penalty to be
imposed for capital crimes. This penal provision may be given retroactive effect during three possible stages of a criminal
prosecution: (a) when the crime has been committed and the prosecution began; (b) when sentence has been passed but the
service has not begun; and (c) when the sentence is being carried out (Gregorio, Fundamentals of Criminal Law Review, 1988 ed.,
p. 167, citing Escalante vs. Santos, 56 Phil 483 [1932]).

20
 In the light of the discussion above, there is no question that the abolition of the death penalty benefits herein accused-
appellants. Perforce, the subsequent reimposition of the death penalty will not affect them. The framers of the Constitution
themselves state that the law to be passed by Congress reimposing the death penalty (Republic Act 7659) can only have
prospective application (Bernas, The 1987 Constitution the Republic of the Philippines: A Commentary, 1996 ed., p. 508, citing I
RECORD, p. 748; Bernas, The Intent of the 1986 Constitution Writers, 1995 ed., p. 227, citing I Record, p. 747-748).

There is no question that a person has no vested right in any rule of law which entitles him to insists that it shall remain
unchanged for his benefit, nor has he a vested right in the continued existence of a statute which precludes its change or repeal, nor
in any omission to legislate on a particular matter. However, a subsequent statute cannot be so applied retroactively as to impair a
right that accrued under the old law (Agpalo, Statutory Construction, 1986 ed., p. 264, citing Benguet Consolidated Mining Co. vs.
Pineda, 98 Phil 711 [1956]; Laurel vs. Misa, 76 Phil 372 [1946]). Courts have thus given statutes strict construction to prevent their
retroactive operation in order that the statutes would not impair or interfere with vested or existing rights. Clearly, accused-
appellants right to be benefited by the abolition of the death penalty accrued or attached by virtue of Article 22 of the Revised Penal
Code. This benefit cannot be taken away from them.

Since the retroactive application of a law usually divests rights that have already become vested (Benzonan vs. Court of
Appeals, 205 SCRA 515 [1992]), the rule in statutory construction is that all statutes are to be construed as having only a
prospective operation unless the purpose and intention of the legislature to give them a retrospective effect is expressly declared or
is necessarily implied from the language used (Balatbat vs. Court of Appeals, 205 SCRA 419 [1992]).

By analogy, we apply the rule in labor law which provides that benefits accruing to workmen under the old law cannot be
taken away from them by a succeeding law. In the case at bar, there is greater reason to apply this principle since the very taking of
life is involved and is at issue.

As regards accused-appellants civil liability, the trial court, in Criminal Case No. 18376, correctly awarded P700.00 to Corazon
Aliman representing the total value of the cash and personal property forcibly taken, and P8,000.00 to Reynaldo Aliman
representing expenses incurred for medication and hospitalization. However, in Criminal Case No. 18305, the trial court failed to
order indemnification for the multiple rapes. Thus, in line with the pronouncement in People vs. Victor (G.R. No. 127903, July 9,
1998) wherein we said:

One other point of concern has to be addressed. Indictments for rape continue unabated and the legislative response has been in
the form of higher penalties. The Court believes that, on like considerations, the jurisprudential path on the civil aspect should follow
the same direction. Hence, starting with the case at bar, if the crime of rape is committed or effectively qualified by any of the
circumstances under which the death penalty is authorized by the present amended law, the indemnity for the victim shall be in the
increased amount of not less than P75,000.00. this is not only a reaction to the apathetic societal perception of the penal law and
the financial fluctuations over time, but also an expression of the displeasure of the Court over the incidence of heinous crimes
against chastity.

accused-appellants should be made to pay P375,000.00 as indemnification for five counts of rape (considering that Juliana Carcillar
was twice raped by accused-appellant Mijaque) in addition to the sum of P6,500.00 representing the value of the cash and articles
that were taken from the victims. In line with the recent ruling in People vs. Prades (G.R. No. 127569, July 30, 1998), moral
damages in the amount of P50,000.00 for each count of rape, or a total of P250,000.00 is likewise awarded. Lastly, so that the
instant case may serve as an object lesson to the public, exemplary damages in the amount of P10,000 per count of rape is further
awarded (People vs. Burce, 269 SCRA 293 [1997]).

Because of the findings of conspiracy, accused-appellants Patalin and Mijaque are jointly and severally liable for the amounts
awarded in Criminal Case No. 18376; whereas all three accused-appellants are solidarily liable for the amounts awarded in Criminal
Case No. 18305.

WHEREFORE, finding the conviction of accused-appellants justified by the evidence on record, the Court hereby AFFIRMS
said judgment, with the following modifications:

(a) In Criminal Case No. 18376, for purposes of the Indeterminate Sentence Law, considering that the aggravating
circumstances of band, nighttime, and dwelling attended the commission of the crime, accused-appellants Patalin and Mijaque are
hereby sentenced to an indeterminate penalty ranging from six (6) years of prision correccional, as minimum, to fourteen (14) years,
eight (8) months, and one (1) day of reclusion temporal, as maximum;

(b) Accused-appellants Patalin and Mijaque are jointly and severally held liable for the amounts awarded by the trial court in
said criminal case, particularly, the amount of P700.00 representing the total value of the cash and articles taken from Corazon
Aliman, and P8,000.00 representing the expenses incurred by Reynaldo Aliman for medication and hospitalization;

(c) In Criminal Case No. 18305, the penalty imposed is reduced to reclusion perpetua; and

(d) Aside from the amount of P6,500.00 already awarded by the trial court to the Carcillar family representing the value of the
cash and articles taken, the victims in Criminal Case No. 18305 are hereby awarded an additional P75,000 as indemnity for each
count of rape, P50,000.00 for each count of rape as moral damages, and P10,000 for each count of rape as exemplary damages,
for which amounts all three accused-appellants are jointly and severally liable.

SO ORDERED.
Romero, Bellosillo, Puno, Vitug, Kapunan, Mendoza, Panganiban, Quisumbing, Purisima, Pardo, Buena, Gonzaga-
Reyes, and Ynares-Santiago, JJ., concur.
Davide, Jr., C.J., on leave.

21
 Republic of the Philippines
SUPREME COURT
Manila
EN BANC
G.R. No. L-15127 May 30, 1961
EMETERIO CUI, plaintiff-appellant,
vs.
ARELLANO UNIVERSITY, defendant-appellee.
G.A.S. Sipin, Jr., for plaintiff-appellant.
E. Voltaire Garcia for defendant-appellee.
CONCEPCION, J.:

Appeal by plaintiff Emeterio Cui from a decision of the Court of First Instance of Manila, absolving defendant Arellano University
from plaintiff's complaint, with costs against the plaintiff, and dismissing defendant's counter claim, for insufficiency of proof thereon.

In the language of the decision appealed from:

The essential facts of this case are short and undisputed. As established by the agreement of facts Exhibits X and by the
respective oral and documentary evidence introduced by the parties, it appears conclusive that plaintiff, before the school
year 1948-1949 took up preparatory law course in the defendant University. After finishing his preparatory law course
plaintiff enrolled in the College of Law of the defendant from the school year 1948-1949. Plaintiff finished his law studies in
the defendant university up to and including the first semester of the fourth year. During all the school years in which
plaintiff was studying law in defendant law college, Francisco R. Capistrano, brother of the mother of plaintiff, was the
dean of the College of Law and legal counsel of the defendant university. Plaintiff enrolled for the last semester of his law
studies in the defendant university but failed to pay his tuition fees because his uncle Dean Francisco R. Capistrano
having severed his connection with defendant and having accepted the deanship and chancellorship of the College of
Law of Abad Santos University, plaintiff left the defendant's law college and enrolled for the last semester of his fourth
year law in the college of law of the Abad Santos University graduating from the college of law of the latter university.
Plaintiff, during all the time he was studying law in defendant university was awarded scholarship grants, for scholastic
merit, so that his semestral tuition fees were returned to him after the ends of semester and when his scholarship grants
were awarded to him. The whole amount of tuition fees paid by plaintiff to defendant and refunded to him by the latter
from the first semester up to and including the first semester of his last year in the college of law or the fourth year, is in
total P1,033.87. After graduating in law from Abad Santos University he applied to take the bar examination. To secure
permission to take the bar he needed the transcripts of his records in defendant Arellano University. Plaintiff petitioned the
latter to issue to him the needed transcripts. The defendant refused until after he had paid back the P1,033 87 which
defendant refunded to him as above stated. As he could not take the bar examination without those transcripts, plaintiff
paid to defendant the said sum under protest. This is the sum which plaintiff seeks to recover from defendant in this case.

Before defendant awarded to plaintiff the scholarship grants as above stated, he was made to sign the following contract
covenant and agreement:

"In consideration of the scholarship granted to me by the University, I hereby waive my right to transfer to another school
without having refunded to the University (defendant) the equivalent of my scholarship cash.

(Sgd.) Emeterio Cui".

It is admitted that, on August 16, 1949, the Director of Private Schools issued Memorandum No. 38, series of 1949, on the subject of
"Scholarship," addressed to "All heads of private schools, colleges and universities," reading:

1. School catalogs and prospectuses submitted to this, Bureau show that some schools offer full or partial scholarships to
deserving students — for excellence in scholarship or for leadership in extra-curricular activities. Such inducements to
poor but gifted students should be encouraged. But to stipulate the condition that such scholarships are good only if the
students concerned continue in the same school nullifies the principle of merit in the award of these scholarships.

2. When students are given full or partial scholarships, it is understood that such scholarships are merited and earned.
The amount in tuition and other fees corresponding to these scholarships should not be subsequently charged to the
recipient students when they decide to quit school or to transfer to another institution. Scholarships should not be offered
merely to attract and keep students in a school.

3. Several complaints have actually been received from students who have enjoyed scholarships, full or partial, to the
effect that they could not transfer to other schools since their credentials would not be released unless they would pay the
fees corresponding to the period of the scholarships. Where the Bureau believes that the right of the student to transfer is
being denied on this ground, it reserves the right to authorize such transfer.

22
that defendant herein received a copy of this memorandum; that plaintiff asked the Bureau of Private Schools to pass upon the
issue on his right to secure the transcript of his record in defendant University, without being required to refund the sum of
P1,033.87; that the Bureau of Private Schools upheld the position taken by the plaintiff and so advised the defendant; and that, this
notwithstanding, the latter refused to issue said transcript of records, unless said refund were made, and even recommended to said
Bureau that it issue a written order directing the defendant to release said transcript of record, "so that the case may be presented to
the court for judicial action." As above stated, plaintiff was, accordingly, constrained to pay, and did pay under protest, said sum of
P1,033.87, in order that he could take the bar examination in 1953. Subsequently, he brought this action for the recovery of said
amount, aside from P2,000 as moral damages, P500 as exemplary damages, P2,000 as attorney's fees, and P500 as expenses of
litigation.

In its answer, defendant reiterated the stand it took, vis-a-vis the Bureau of Private Schools, namely, that the provisions of its
contract with plaintiff are valid and binding and that the memorandum above-referred to is null and void. It, likewise, set up a
counterclaim for P10,000.00 as damages, and P3,000 as attorney's fees.

The issue in this case is whether the above quoted provision of the contract between plaintiff and the defendant, whereby the former
waived his right to transfer to another school without refunding to the latter the equivalent of his scholarships in cash, is valid or not.
The lower court resolved this question in the affirmative, upon the ground that the aforementioned memorandum of the Director of
Private Schools is not a law; that the provisions thereof are advisory, not mandatory in nature; and that, although the contractual
provision "may be unethical, yet it was more unethical for plaintiff to quit studying with the defendant without good reasons and
simply because he wanted to follow the example of his uncle." Moreover, defendant maintains in its brief that the aforementioned
memorandum of the Director of Private Schools is null and void because said officer had no authority to issue it, and because it had
been neither approved by the corresponding department head nor published in the official gazette.

We do not deem it necessary or advisable to consider as the lower court did, the question whether plaintiff had sufficient reasons or
not to transfer from defendant University to the Abad Santos University. The nature of the issue before us, and its far reaching
effects, transcend personal equations and demand a determination of the case from a high impersonal plane. Neither do we deem it
essential to pass upon the validity of said Memorandum No. 38, for, regardless of the same, we are of the opinion that the
stipulation in question is contrary to public policy and, hence, null and void. The aforesaid memorandum merely incorporates a
sound principle of public policy. As the Director of Private Schools correctly pointed, out in his letter, Exhibit B, to the defendant,

There is one more point that merits refutation and that is whether or not the contract entered into between Cui and
Arellano University on September 10, 1951 was void as against public policy. In the case of Zeigel vs. Illinois Trust and
Savings Bank, 245 Ill. 180, 19 Ann. Case 127, the court said: 'In determining a public policy of the state, courts are limited
to a consideration of the Constitution, the judicial decisions, the statutes, and the practice of government officers.' It might
take more than a government bureau or office to lay down or establish a public policy, as alleged in your communication,
but courts consider the practices of government officials as one of the four factors in determining a public policy of the
state. It has been consistently held in America that under the principles relating to the doctrine of public policy, as applied
to the law of contracts, courts of justice will not recognize or uphold a transaction which its object, operation, or tendency
is calculated to be prejudicial to the public welfare, to sound morality or to civic honesty (Ritter vs. Mutual Life Ins. Co.,
169 U.S. 139; Heding vs. Gallaghere 64 L.R.A. 811; Veazy vs. Allen, 173 N.Y. 359). If Arellano University understood
clearly the real essence of scholarships and the motives which prompted this office to issue Memorandum No. 38, s.
1949, it should have not entered into a contract of waiver with Cui on September 10, 1951, which is a direct violation of
our Memorandum and an open challenge to the authority of the Director of Private Schools because the contract was
repugnant to sound morality and civic honesty. And finally, in Gabriel vs. Monte de Piedad, Off. Gazette Supp. Dec. 6,
1941, p. 67 we read: 'In order to declare a contract void as against public policy, a court must find that the contract as to
consideration or the thing to be done, contravenes some established interest of society, or is inconsistent with sound
policy and good moralsor tends clearly to undermine the security of individual rights. The policy enunciated in
Memorandum No. 38, s. 1949 is sound policy. Scholarship are awarded in recognition of merit not to keep outstanding
students in school to bolster its prestige. In the understanding of that university scholarships award is a business
scheme designed to increase the business potential of an education institution. Thus conceived it is not only inconsistent
with sound policy but also good morals. But what is morals? Manresa has this definition. It is good customs; those
generally accepted principles of morality which have received some kind of social and practical confirmation. The practice
of awarding scholarships to attract students and keep them in school is not good customs nor has it received some kind of
social and practical confirmation except in some private institutions as in Arellano University. The University of the
Philippines which implements Section 5 of Article XIV of the Constitution with reference to the giving of free scholarships
to gifted children, does not require scholars to reimburse the corresponding value of the scholarships if they transfer to
other schools. So also with the leading colleges and universities of the United States after which our educational practices
or policies are patterned. In these institutions scholarships are granted not to attract and to keep brilliant students in
school for their propaganda mine but to reward merit or help gifted students in whom society has an established
interest or a first lien. (Emphasis supplied.)

WHEREFORE, the decision appealed from is hereby reversed and another one shall be entered sentencing the defendant to pay to
the plaintiff the sum of P1,033.87, with interest thereon at the legal rate from September 1, 1954, date of the institution of this case,
as well as the costs, and dismissing defendant's counterclaim. It is so ordered.

Bengzon, C.J., Padilla, Labrador, Reyes, J.B.L., Barrera, Parades, Dizon, De Leon and Natividad, JJ., concur.
Bautista Angelo, J., reserves his vote

23
 FIRST DIVISION
[G.R. No. 147964. January 20, 2004]
FAR EAST BANK & TRUST CO., petitioner, vs. ARTURO L. MARQUEZ, respondent.

DECISION

PANGANIBAN, J.:

Under PD 957, the mortgage of a subdivision lot or a condominium unit is void, if executed by a property developer without
the prior written approval of the Housing and Land Use Regulatory Board (HLURB). That an encumbrance has been constituted
over an entire property, of which the subject lot or unit is merely a part, does not affect the invalidity of the lien over the specific
portion at issue.

The Case

Before us is a Petition for Review1 under Rule 45 of the Rules of Court, assailing the April 27, 2001 Decision 2 of the Court of
Appeals (CA) in CA-GR SP No. 56813. The decretal portion of the Decision reads as follows:

WHEREFORE, the petition for review is DENIED, for lack of merit.3

The Facts

The undisputed facts of the case are summarized in the CA Decision as follows:

1. On 13 March 1989, respondent [Arturo] Marquez entered into a Contract to Sell with Transamerican Sales and Exposition (TSE),
through the latters Owner/General Manager Engr. Jesus Garcia, involving a 52.5 sq. m. lot in Diliman, Quezon City with a three-
storey townhouse unit denominated as Unit No. 10 to be constructed thereon for a total consideration of P800,000.00. The parcel of
land in question is a portion of that property covered by TCT No. 156254 (now TCT No. 383697).

2. On 22 May 1989, TSE obtained a loan from petitioner FEBTC in the amount of P7,650,000.00 and mortgaged the property
covered by TCT No. 156254.

3. For failure of TSE to pay its obligation, petitioner FEBTC extrajudicially foreclosed the real estate mortgage and became the
highest bidder (P15.7 million) in the auction sale conducted for the purpose.

4. Respondent had already paid a total of P600,000.00 when he stopped payment because the construction of his townhouse unit
slackened. He discovered later on that this was due to the foreclosure.

"5. Consequently, [respondent] instituted a case with the Office of Appeals, Adjudication and Legal Affairs (OAALA) of the Housing
and Land Use Regulatory Board (HLURB) on 29 January 1991 entitled Arturo Marquez vs. Transamerican Sales, et al docketed as
HLRB Case No. REM-012991-4712 to compel TSE to complete the construction of the townhouse and to prevent the enforceability
of the extra-judicial foreclosure made by petitioner FEBTC and to have the mortgage between TSE and petitioner FEBTC declared
invalid, said mortgage having been entered into by the parties in violation of section 18 of P.D. 957.

6. The OAALA ruled in favor of the respondent via a Decision dated 11 November 1991, the decretal portion of which reads as
follows:

WHEREFORE, premises considered, judgment is hereby rendered as follows:

1. Declaring the mortgage executed by and between x x x Engr. Jesus Garcia/Transamerican Sales and Exposition and Far East
Bank and Trust Company to be unenforceable against [respondent];

2. Ordering the x x x Far East Bank and Trust Company to compute and/or determine the loan value of the [respondent] who was
not able to complete or make full payment and accept payment and/or receive the amortization from the [respondent] and upon full
payment to deliver the title corresponding to Unit No. 10 of that Townhouse Project located at No. 10 Panay Ave., Quezon City;

3. Ordering the Register of Deeds of Quezon City to cancel the annotations of the mortgage indebtedness between x x x Engr.
Jesus Garcia and Far East Bank and Trust Company;

4. Ordering, likewise, the Register of Deeds of Quezon City to cancel the annotation of the Certificate of Sale in favor of the Far East
Bank and Trust Company on Transfer Certificate of Title No. 156254 to which the lot subject of this case is a part thereof, without

24
prejudice to its right to require x x x Engr. Jesus Garcia/Transamerican Sales and Exposition to constitute new collateral in lieu of
said title sufficient in value to cover the mortgage obligation.

xxx xxx xx x

7. Petitioner FEBTC interposed a Petition for Review from the decision issued by the OAALA with the Board of Commissioners of
the HLURB, docketed as HLRB Case No. REM-A-1126, which in a Decision dated 18 July 1994 affirmed in toto the OAALA
decision.

8. Hence, petitioner FEBTC appealed the Decision dated 18 July 1994 to the Office of the President xxx.

xxx xxx xx x

9. The Office of the President dismissed the appeal and affirmed the Decision dated 18 July 1994 x x x.4 (Citations omitted)

Petitioner then elevated the case to the CA through a Petition for review under Rule 43.

Ruling of the Court of Appeals

The CA found that petitioner had known that a subdivision was forthcoming inasmuch as the loan was obtained by TSE to
partially finance the construction of a 20-unit townhouse project, as stated in the Whereas clause in the mortgage contract. 5 Thus,
the CA ruled that petitioner should not have merely relied on the representation of TSE that it had obtained the approval and
authorization of the proper government agencies but should have required the submission of said documents. 6

Further, the appellate court found that the Certification against forum shopping attached to the Petition before it had not been
made under oath, in violation of the Rules of Court.

Hence, this Petition.7

The Issues

Petitioner raises the following issues for our consideration:

Whether or not the mortgage contract violated Section 18 of P.D. 957, hence, void insofar as third persons are concerned.

Assuming arguendo that the mortgage contract violated Section 18 of P.D. 957, whether or not the remedy granted and imposed by
the HLURB, as sustained by the Office of the President and the Court of Appeals, is proper.

Whether or not the inadvertent failure of the notary public to affix his signature on the Certification against forum shopping executed
by petitioner FEBTC in connection with the Petition for Review it filed with the Court of Appeals provided a sufficient basis for the
dismissal of the appeal.8

The Court's Ruling

The Petition is partly meritorious.

First Issue:
Violation of Section 18 of PD 957

Section 18 of PD 9579 provides as follows:

SEC. 18. Mortgages. - No mortgage on any unit or lot shall be made by the owner or developer without prior written approval of the
Authority. Such approval shall not be granted unless it is shown that the proceeds of the mortgage loan shall be used for the
development of the condominium or subdivision project and effective measures have been provided to ensure such utilization. The
loan value of each lot or unit covered by the mortgage shall be determined and the buyer thereof, if any, shall be notified before the
release of the loan. The buyer may, at his option, pay his installment for the lot or unit directly to the mortgagee who shall apply the
payments to the corresponding mortgage indebtedness secured by the particular lot or unit being paid for, with a view to enabling
said buyer to obtain title over the lot or unit promptly after full payment thereof.

Petitioner contends that the above-quoted provision does not apply to this case, because the land mortgaged to it was one
whole parcel, not of a subdivision lot, but of an unsubdivided one. It insists that the written approval of the National Housing

25
Authority (now the Housing and Land Use Regulatory Board) was not a requirement for the constitution of a mortgage on the
property.

We are not persuaded. It is undisputed that the subject 52.5-square-meter lot with a three-storey town house unit
denominated as Unit No. 10 (the lot) is part of the property mortgaged to petitioner and is covered by TCT No. 156254. The lot was
technically described and segregated in a Contact to Sell that had been entered into before the mortgage loan was contracted. The
fact that the lot had no separate TCT did not make it less of a "subdivision lot" entitled to the protection of PD 957.

That the subject of the mortgage loan was the entire land, not the individual subdivided lots, does not take the loan beyond
the coverage of Section 18 of PD 957. Undeniably, the lot was also mortgaged when the entire parcel of land, of which it was a part,
was encumbered.

Petitioner also contends that Section 18 of PD 957 is merely a directory provision, noncompliance with which does not render
the mortgage transaction void.

In determining whether a law is mandatory, it is necessary to ascertain the legislative intent, as stated by Sen. Arturo M.
Tolentino, an authority on civil law:

There is no well-defined rule by which a mandatory or prohibitory law may, in all circumstances, be distinguished from one which is
directory, suppletory, or permissive. In the determination of this question, the prime object is to ascertain the legislative intention.
Generally speaking, those provisions which are mere matter of form, or which are not material, do not affect any substantial right,
and do not relate to the essence of the thing to be done, so that compliance is a matter of convenience rather that substance, are
considered to be directory. On the other hand, statutory provisions which relate to matters of substance, affect substantial rights and
are the very essence of the thing required to be done, are regarded as mandatory.10

In Philippine National Bank v. Office of the President,11 we had occasion to mull over the intent of PD 957 thus:

x x x [T]he unmistakable intent of the law [is] to protect innocent lot buyers from scheming subdivision developers. As between these
small lot buyers and the gigantic financial institutions which the developers deal with, it is obvious that the law -- as an instrument of
social justice -- must favor the weak. Indeed, the petitioner Bank had at its disposal vast resources with which it could adequately
protect its loan activities, and therefore is presumed to have conducted the usual due diligence checking and ascertaining (whether
thru ocular inspection or other modes of investigation) the actual status, condition, utilization and occupancy of the property offered
as collateral, x x x On the other hand, private respondents obviously were powerless to discover the attempt of the land developer to
hypothecate the property being sold to them. It was precisely in order to deal with this kind of situation that P.D. 957 was enacted,
its very essence and intendment being to provide a protective mantle over helpless citizens who may fall prey to the razzmatazz of
what P.D. 957 termed unscrupulous subdivision and condominium sellers. 12

Concededly, PD 957 aims to protect innocent lot buyers. Section 18 of the decree directly addresses the problem of fraud
committed against buyers when the lot they have contracted to purchase, and which they have religiously paid for, is mortgaged
without their knowledge. The avowed purpose of PD 957 compels the reading of Section 18 as prohibitory -- acts committed
contrary to it are void.13 Such construal ensures the attainment of the purpose of the law: to protect lot buyers, so that they do not
end up still homeless despite having fully paid for their home lots with their hard-earned cash.

Petitioner argues that it is an innocent mortgagee whose lien must be respected and protected, since the title offered as
security was clean of any encumbrance or lien. We do not agree.

x xx. As a general rule, where there is nothing on the certificate of title to indicate any cloud or vice in the ownership of the property,
or any encumbrance thereon, the purchaser is not required to explore further than what the Torrens Title upon its face indicates in
quest for any hidden defect or inchoate right that may subsequently defeat his right thereto. This rule, however, admits of an
exception as where the purchaser or mortgagee has knowledge of a defect or lack of title in the vendor, or that he was aware of
sufficient facts to induce a reasonably prudent man to inquire into the status of the property in litigation. 14

Petitioner bank should have considered that it was dealing with a town house project that was already in progress. A
reasonable person should have been aware that, to finance the project, sources of funds could have been used other than the loan,
which was intended to serve the purpose only partially. Hence, there was need to verify whether any part of the property was
already the subject of any other contract involving buyers or potential buyers. In granting the loan, petitioner bank should not have
been content merely with a clean title, considering the presence of circumstances indicating the need for a thorough investigation of
the existence of buyers like respondent. Having been wanting in care and prudence, the latter cannot be deemed to be an innocent
mortgagee.

Petitioner cannot claim to be a mortgagee in good faith. Indeed it was negligent, as found by the Office of the President and
by the CA. Petitioner should not have relied only on the representation of the mortgagor that the latter had secured all requisite
permits and licenses from the government agencies concerned. The former should have required the submission of certified true
copies of those documents and verified their authenticity through its own independent effort.

Having been negligent in finding out what respondents rights were over the lot, petitioner must be deemed to possess
constructive knowledge of those rights.15

Second Issue:
Remedy Granted

26
 To retain possession of the lot, petitioner claims that its rights as the buyer in the foreclosure sale are superior to those of
respondent.

We are not persuaded. Aside from being a buyer of the lot, petitioner was also the mortgagee, which, as previously discussed,
was presumed to know the rights of respondent over that lot. The conversion of the status of the former from mortgagee to buyer-
owner will not lessen the importance of such knowledge. Neither will the conversion set aside the consequences of its negligence as
a mortgagee.

The lot was mortgaged in violation of Section 18 of PD 957. Respondent, who was the buyer of the property, was not notified
of the mortgage before the release of the loan proceeds by petitioner. Acts executed against the provisions of mandatory or
prohibitory laws shall be void.16 Hence, the mortgage over the lot is null and void insofar as private respondent is concerned. 17

The remedy granted by the HLURB and sustained by the Office of the President is proper only insofar as it refers to the lot of
respondent. In short, the mortgage contract is void as against him. Since there is no law stating the specifics of what should be done
under the circumstances, that which is in accord with equity should be ordered. The remedy granted by the HLURB in the first and
the second paragraphs of the dispositive portion of its Decision insofar as it referred to respondent's lot is in accord with equity.

The HLURB, however, went overboard in its disposition in paragraphs 3 and 4, which pertained not only to the lot but to the
entire parcel of land mortgaged. Such ruling was improper. The subject of this litigation is limited only to the lot that respondent is
buying, not to the entire parcel of land. He has no personality or standing to bring suit on the whole property, as he has actionable
interest over the subject lot only.

Third Issue:
Certification Against Forum Shopping

We find no cogent reason to alter the ruling of the CA regarding the Certification against forum shopping that did not bear the
notary public's signature. It is worth emphasizing that despite petitioner's noncompliance with the technical requirements regarding
the Certification, the CA still ruled on the merits of the case. 18 In fact, there is no more need to pass upon this issue inasmuch as, on
the merits, we have already turned down petitioners plea against respondent.

WHEREFORE, the Petition is PARTLY GRANTED. The Decision of the HLURB is AFFIRMED, but it shall be applicable only
to the 52.5-square-meter lot with a three-storey town house unit denominated as Unit No. 10. No costs.

SO ORDERED

Davide Jr., C. J., (Chairman), Ynares-Santiago, Carpio and Azcuna, JJ., concur.
Republic of the Philippines
Supreme Court
Baguio City

SECOND DIVISION

ATTY. PEDRO M. FERRER, G.R. No. 165300

Petitioner,

Present:
- versus -
CARPIO, J., Chairperson,
BRION,
SPOUSES ALFREDO DIAZ ABAD,
and IMELDA DIAZ, DEL CASTILLO, and
REINA COMANDANTE and PEREZ, JJ.
SPOUSES BIENVENIDO
PANGAN and ELIZABETH
PANGAN, Promulgated:
Respondents. April 23, 2010
x-------------------------------------------------------------------x

DECISION

DEL CASTILLO, J.:

27
 The basic questions to be resolved in this case are: Is a waiver of hereditary rights in favor of another executed by a future heir while the

parents are still living valid? Is an adverse claim annotated on the title of a property on the basis of such waiver likewise valid and effective as to bind

the subsequent owners and hold them liable to the claimant?

This Petition for Review on Certiorari[1] under Rule 45 of the Rules of Court assails the December 12, 2003 Decision[2] of the Court of

Appeals (CA) in CA-G.R. CV No. 70888.[3] Said Decision modified the June 14, 2001 Summary Judgment[4] of the Regional Trial Court (RTC)

of Quezon City in Civil Case No. Q-99-38876 by holding respondents Spouses Bienvenido and Elizabeth Pangan (the Pangans) not solidarily liable

with the other respondents, Spouses Alfredo and Imelda Diaz (the Diazes) and Reina Comandante (Comandante), to petitioner Atty. Pedro M.

Ferrer (Atty. Ferrer). Likewise assailed is the CA Resolution[5] dated September 10, 2004 which denied petitioners as well as respondents Spouses

Diaz and Comandantes respective motions for reconsideration.

The parties respective versions of the factual antecedents are as follows:

Version of the Petitioner

Petitioner Atty. Ferrer claimed in his original Complaint[6] that on May 7, 1999, the Diazes, as represented by their daughter Comandante,

through a Special Power of Attorney (SPA),[7] obtained from him a loan of P1,118,228.00. The loan was secured by a Real Estate Mortgage

Contract[8] by way of second mortgage over Transfer Certificate of Title (TCT) No. RT-6604[9] and a Promissory Note[10] payable within six months or

up to November 7, 1999. Comandante also issued to petitioner postdated checks to secure payment of said loan.

Petitioner further claimed that prior to this or on May 29, 1998, Comandante, for a valuable consideration of P600,000.00, which amount

formed part of the abovementioned secured loan, executed in his favor an instrument entitled Waiver of Hereditary Rights and Interests Over a Real

Property (Still Undivided),[11] the pertinent portions of which read:

I, REINA D. COMANDANTE, of legal age, Filipino, married, with residence and postal address at No. 6, Road 20,
Project 8, Quezon City, Metro Manila, Philippines, for a valuable consideration of SIX HUNDRED THOUSAND PESOS
(P600,000.00) which constitutes my legal obligation/loan to Pedro M. Ferrer, likewise of legal age, Filipino, married to Erlinda
B. Ferrer, with residence and postal address at No. 9, Lot 4, Puerto Rico Street, Loyola Grand Villas, Quezon City, Metro
Manila, Philippines, by virtue of these presents, do hereby WAIVE, and/or REPUDIATE all my hereditary rights and interests
as a legitimate heir/daughter of Sps. Alfredo T. Diaz and Imelda G. Diaz in favor of said Pedro M. Ferrer, his heirs and assigns
over a certain parcel of land together with all the improvements found thereon and which property is more particularly
described as follows:

TRANSFER CERTIFICATE OF TITLE

NO. RT-6604 (82020) PR-18887

xxxx

and which property is titled and registered in the name of my parents Alfredo T. Diaz and Imelda G. Diaz, as evidenced by
Transfer Certificate of Title No. RT 6604 (82020) PR-18887.

(sgd.)
REINA D. COMANDANTE
Affiant

On the basis of said waiver, petitioner executed an Affidavit of Adverse Claim[12] which he caused to be annotated at the back of TCT No.

RT-6604 on May 26, 1999.

28
 The Diazes, however, reneged on their obligation as the checks issued by Comandante were dishonored upon presentment. Despite

repeated demands, said respondents still failed and refused to settle the loan. Thus, petitioner filed on September 29, 1999 a Complaint[13] for

Collection of Sum of Money Secured by Real Estate Mortgage Contract against the Diazes and Comandante docketed as Civil Case No. Q-99-

38876 and raffled to Branch 224 of RTC, Quezon City.

Petitioner twice amended his complaint. First, by including as an alternative relief the Judicial Foreclosure of Mortgage[14] and, second, by

impleading as additional defendants the Pangans as the mortgaged property covered by TCT No. RT-6604 was already transferred under their

names in TCT No. N-209049. Petitioner prayed in his second amended complaint that all the respondents be ordered to jointly and solidarily pay him

the sum of P1,118,228.00, exclusive of interests, and/or for the judicial foreclosure of the property pursuant to the Real Estate Mortgage Contract.

Version of the Respondents

In her Answer[15] to petitioners original complaint, Comandante alleged that petitioner and his wife were her fellow members in the

Couples for Christ Movement. Sometime in 1998, she sought the help of petitioner with regard to the mortgage with a bank of her parents lot located

at No. 6, Rd. 20, Project 8, Quezon City and covered by TCT No. RT-6604. She also sought financial accommodations from the couple on several

occasions which totaled P500,000.00. Comandante, however, claimed that these loans were secured by chattel mortgages over her taxi units in

addition to several postdated checks she issued in favor of petitioner.

As she could not practically comply with her obligation, petitioner and his wife, presented to Comandante sometime in May 1998 a

document denominated as Waiver of Hereditary Rights and Interests Over a Real Property (Still Undivided) pertaining to a waiver of her hereditary

share over her parents abovementioned property. Purportedly, the execution of said waiver was to secure Comandantes loan with the couple which

at that time had already ballooned to P600,000.00 due to interests.

A year later, the couple again required Comandante to sign the following documents: (1) a Real Estate Mortgage Contract over her

parents property; and, (2) an undated Promissory Note, both corresponding to the amount of P1,118,228.00, which petitioner claimed to be the total

amount of Comandantes monetary obligation to him exclusive of charges and interests. Comandante alleged that she reminded petitioner that she

was not the registered owner of the subject property and that although her parents granted her SPA, same only pertains to her authority to mortgage

the property to banks and other financial institutions and not to individuals. Petitioner nonetheless assured Comandante that the SPA was also

applicable to their transaction. As Comandante was still hesitant, petitioner and his wife threatened to foreclose the formers taxi units and present the

postdated checks she issued to the bank for payment. For fear of losing her taxi units which were the only source of her livelihood, Comandante was

thus constrained to sign the mortgage agreement as well as the promissory note. Petitioner, however, did not furnish her with copies of said

documents on the pretext that they still have to be notarized, but, as can be gleaned from the records, the documents were never

notarized.Moreover, Comandante claimed that the SPA alluded to by petitioner in his complaint was not the same SPA under which she thought she

derived the authority to execute the mortgage contract.

Comandante likewise alleged that on September 29, 1999 at 10:00 o clock in the morning, she executed an Affidavit of

Repudiation/Revocation of Waiver of Hereditary Rights and Interests Over A (Still Undivided) Real Property,[16] which she caused to be annotated on

29
the title of the subject property with the Registry of Deeds of Quezon City on the same day. Interestingly, petitioner filed his complaint later that day

too.

By way of special and affirmative defenses, Comandante asserted in her Answer to the amended complaint[17] that said complaint states

no cause of action against her because the Real Estate Mortgage Contract and the waiver referred to by petitioner in his complaint were not duly,

knowingly and validly executed by her; that the Waiver of Hereditary Rights and Interests Over a Real Property (Still Undivided) is a useless

document as its execution is prohibited by Article 1347 of the Civil Code,[18] hence, it cannot be the source of any right or obligation in petitioners

favor; that the Real Estate Mortgage was of doubtful validity as she executed the same without valid authority from her parents; and, that the prayer

for collection and/or judicial foreclosure was irregular as petitioner cannot seek said remedies at the same time.

Apart from executing the affidavit of repudiation, Comandante also filed on October 4, 1999 a Petition for Cancellation of Adverse Claim

(P.E. 2468) Under The Memorandum of Encumbrances of TCT No. RT-6604 (82020) PR-18887[19] docketed as LRC Case No. Q-12009 (99) and

raffled to Branch 220 of RTC, Quezon City. Petitioner who was impleaded as respondent therein moved for the consolidation of said case[20] with

Civil Case No. Q-99-38876. On June 24, 2000, Branch 220 of RTC, Quezon City ordered the consolidation of LRC Case No. Q-12009 (99) with Civil

Case No. Q-99-38876. Accordingly, the records of the former case was forwarded to Branch 224.

For their part, the Diazes asserted that petitioner has no cause of action against them. They claimed that they do not even know petitioner

and that they did not execute any SPA in favor of Comandante authorizing her to mortgage for the second time the subject property. They also

contested the due execution of the SPA as it was neither authenticated before the Philippine Consulate in the United States nor notarized before a

notary public in the State of New York where the Diazes have been residing for 16 years. They claimed that they do not owe petitioner anything. The

Diazes also pointed out that the complaint merely refers to Comandantes personal obligation to petitioner with which they had nothing to do. They

thus prayed that the complaint against them be dismissed.[21]

At the Pangans end, they alleged that they acquired the subject property by purchase in good faith and for a consideration

of P3,000,000.00 on November 11, 1999 from the Diazes through the latters daughter Comandante who was clothed with SPA acknowledged

before the Consul of New York. The Pangans immediately took actual possession of the property without anyone complaining or protesting. Soon

thereafter, they were issued TCT No. N-209049 in lieu of TCT No. RT-6604 which was cancelled. [22]

However, on December 21, 1999, they were surprised upon being informed by petitioner that the subject land had been mortgaged to

him by the Diazes. Upon inquiry from Comandante, the latter readily admitted that she has a personal loan with petitioner for which the mortgage of

the property in petitioners favor was executed. She admitted, though, that her parents were not aware of such mortgage and that they did not

authorize her to enter into such contract. Comandante also informed the Pangans that the signatures of her parents appearing on the SPA are

fictitious and that it was petitioner who prepared such document.

As affirmative defense, the Pangans asserted that the annotation of petitioners adverse claim on TCT No. RT-6604 cannot impair their

rights as new owners of the subject property. They claimed that the Waiver of Hereditary Rights and Interests Over a Real Property (Still Undivided)

upon which petitioners adverse claim is anchored cannot be the source of any right or interest over the property considering that it is null and void

under paragraph 2 of Article 1347 of the Civil Code.

30
 Moreover, the Pangans asserted that the Real Estate Mortgage Contract cannot bind them nor in any way impair their ownership of

subject property because it was not registered before the Register of Deeds.[23]

All the respondents interposed their respective counterclaims and prayed for moral and exemplary damages and attorneys fees in

varying amounts.

After the parties have submitted their respective pre-trial briefs, the Diazes filed on March 29, 2001 a Motion for Summary
[24]
Judgment alleging that: first, since the documents alluded to by petitioner in his complaint were defective, he was not entitled to any legal right or

relief; and, second, it was clear from the pleadings that it is Comandante who has an outstanding obligation with petitioner which the latter never

denied. With these, the Diazes believed that there is no genuine issue as to any material fact against them and, hence, they were entitled to

summary judgment.

On May 7, 2001, petitioner also filed a Motion for Summary Judgment,[25] claiming that his suit against the respondents is meritorious and

well-founded and that same is documented and supported by law and jurisprudence. He averred that his adverse claim annotated at the back of

TCT No. RT-6604, which was carried over in TCT No. 209049 under the names of the Pangans, is not merely anchored on the Waiver of Hereditary

Rights and Interests Over a Real Property (Still Undivided) executed by Comandante, but also on the Real Estate Mortgage likewise executed by

her in representation of her parents and in favor of petitioner. Petitioner insisted that said adverse claim is not frivolous and invalid and is registrable

under Section 70 of Presidential Decree (PD) No. 1529. In fact, the Registrar of Deeds of Quezon City had already determined the sufficiency and/or

validity of such registration by annotating said claim, and this, respondents failed to question. Petitioner further averred that even before the sale and

transfer to the Pangans of the subject property, the latter were already aware of the existence of his adverse claim. In view of these, petitioner prayed

that his Motion for Summary Judgment be granted.

Ruling of the Regional Trial Court

After the filing of the parties respective Oppositions to the said motions for summary judgment, the trial court, in an Order dated May 31,

2001,[26] deemed both motions for summary judgment submitted for resolution. Quoting substantially petitioners allegations in his Motion for

Summary Judgment, it thereafter rendered on June 14, 2001 a Summary Judgment[27] in favor of petitioner, the dispositive portion of which reads:

WHEREFORE, premises considered, summary judgment is hereby rendered in favor of plaintiff and against
defendants by:

a) ORDERING all defendants jointly and solidarily to pay plaintiff the sum of ONE MILLION ONE
HUNDRED EIGHTEEN THOUSAND TWO HUNDRED TWENTY EIGHT PESOS (P1,118,228.00) which is blood money of
plaintiff;

b) ORDERING the Honorable Registrar of Deeds of Quezon City that the rights and interest of the plaintiff
over subject property be annotated at the back of T.C.T. No. N-209049;

c) SENTENCING all defendants to pay plaintiffs expenses of TEN THOUSAND PESOS (P10,000.00) and
to pay the costs of suit.

IT IS SO ORDERED.[28]

The Pangans, the Diazes, and Comandante appealed to the CA.[29] The Pangans faulted the trial court in holding them jointly and severally liable with

the Diazes and Comandante for the satisfaction of the latters personal obligation to petitioner in the total amount of P1,118,228.00. The Diazes and

31
Comandante, on the other hand, imputed error upon the trial court in rendering summary judgment in favor of petitioner. They averred that assuming

the summary judgment was proper, the trial court should not have considered the Real Estate Mortgage Contract and the Promissory Note as they

were defective, as well as petitioners frivolous and non-registrable adverse claim.

In its Decision[30] dated December 12, 2003, the CA declared Comandantes waiver of hereditary rights null and void. However, it found the Real

Estate Mortgage executed by Comandante on behalf of her parents as binding between the parties thereto.

As regards the Pangans, the CA ruled that the mortgage contract was not binding upon them as they were purchasers in good faith and for

value. The property was free from the mortgage encumbrance of petitioner when they acquired it as they only came to know of the adverse claim

through petitioners phone call which came right after the formers acquisition of the property. The CA further ruled that as Comandantes waiver of

hereditary rights and interests upon which petitioners adverse claim was based is a nullity, it could not be a source of any right in his favor. Hence, the

Pangans were not bound to take notice of such claim and are thus not liable to petitioner.

Noticeably, the appellate court did not rule on the propriety of the issuance of the Summary Judgment as raised by the Diazes and Comandante. In

the ultimate, the CA merely modified the assailed Summary Judgment of the trial court by excluding the Pangans among those solidarily liable to

petitioner, in effect affirming in all other respects the assailed summary judgment, viz:

WHEREFORE, foregoing premises considered, the Decision of the Regional Trial Court of Quezon City, Branch 224 in Civil
Case No. Q-99-38876 is hereby MODIFIED, as follows:

1. Ordering defendants-appellants Comandante and Spouses Diaz to jointly and severally pay plaintiff the sum of Php 1,118,
228.00; and

2. Ordering defendants-appellants Comandante and Spouses Diaz to jointly and severally pay plaintiff the amount of
Php10,000.00 plus cost of suit.

SO ORDERED.[31]

Petitioners Motion for Reconsideration[32] having been denied by the CA in its Resolution[33] dated September 10, 2004, he now comes to

us through this petition for review on certiorari insisting that the Pangans should, together with the other respondents, be held solidarily liable to him

for the amount of P1,118,228.00.

Our Ruling

The petition lacks merit.

Petitioner merely reiterates his contentions in the Motion for Summary Judgment he filed before the trial court. He insists that his Adverse

Claim annotated at the back of TCT No. RT-6604 is not merely anchored on Comandantes Waiver of Hereditary Rights and Interests Over A Real

Property (Still Undivided) but also on her being the attorney-in-fact of the Diazes when she executed the mortgage contract in favor of petitioner. He

avers that his adverse claim is not frivolous or invalid and is registrable as the Registrar of Deeds of Quezon City even allowed its annotation. He also

claims that even prior to the sale of subject property to the Pangans, the latter already knew of his valid and existing adverse claim thereon and are,

therefore, not purchasers in good faith. Thus, petitioner maintains that the Pangans should be held, together with the Diazes and Comandante, jointly

and severally liable to him in the total amount of P1,118,228.00.

32
 Petitioners contentions are untenable.

The Affidavit of Adverse Claim executed by petitioner reads in part:

xxxx

1. That I am the Recipient/Benefactor of compulsory heirs share over an undivided certain parcel of land
together with all the improvements found therein x x x as evidenced by Waiver of Hereditary Rights and Interests
Over A Real Property, executed by REINA D. COMANDANTE (a compulsory/legitimate heir of Sps. Alfredo T. Diaz
and Imelda G. Diaz), x x x.

2. That in order to protect my interest over said property as a Recipient/Benefactor, for the registered
owners/parents might dispose (of) and/or encumber the same in a fraudulent manner without my knowledge and consent, for
the owners duplicate title was not surrendered to me, it is petitioned that this Affidavit of Adverse Claim be ANNOTATED at
the back of the said title particularly on the original copy of Transfer Certificate of Title No. RT-6604 (82020) PR-18887 which
is on file with the Register of Deeds of Quezon City.

3. That I am executing this Affidavit in order to attest (to) the truth of the foregoing facts and to petition the
Honorable Registrar of Deeds, Quezon City, to annotate this Affidavit of Adverse Claim at the back of the said title particularly
the original copy of Transfer Certificate of Title No. RT-6604 (82020) PR-18887 which is on file with the said office, so that my
interest as Recipient/Benefactor of the said property will be protected especially the registered owner/parents, in a
fraudulent manner might dispose (of) and/or encumber the same without my knowledge and consent. (Emphasis ours)

Clearly, petitioners Affidavit of Adverse Claim was based solely on the waiver of hereditary interest executed by Comandante. This fact

cannot be any clearer especially so when the inscription of his adverse claim at the back of TCT No. RT-6604 reads as follows:

P.E. 2468/T-(82020)RT-6604 - - AFFIDAVIT OF ADVERSE CLAIM - - Executed under oath by PEDRO M.

FERRER, married to Erlinda B. Ferrer, claiming among others that they have a claim, the interest over said property as
Recipient/Benefactor, by virtue of a waiver of Hereditary Rights and Interest over a real property x x x[34] (Emphasis
ours)

Therefore, there is no basis for petitioners assertion that the adverse claim was also anchored on the mortgage contract allegedly executed by

Comandante on behalf of her parents.

The questions next to be resolved are: Is Comandantes waiver of hereditary rights valid? Is petitioners adverse claim based on such

waiver likewise valid and effective?

We note at the outset that the validity of petitioners adverse claim should have been determined by the trial court after the petition for

cancellation of petitioners adverse claim filed by Comandante was consolidated with Civil Case No. Q-99-38876.[35] This is in consonance with

Section 70 of PD 1529 which provides:

Section 70. Adverse Claim. Whoever claims any part or interest in registered land adverse to the registered owner,
arising subsequent to the date of the original registration, may, if no other provision is made in this Decree for registering the
same, make a statement in writing setting forth fully his alleged right or interest, and how or under whom acquired, a reference
to the number of the certificate of title of the registered owner, the name of the registered owner, and a description of the land
in which the right or interest is claimed.

The statement shall be signed and sworn to, and shall state the adverse claimants residence, and a place at which
all notices may be served upon him. This statement shall be entitled to registration as an adverse claim on the certificate of
title. The adverse claim shall be effective for a period of thirty days from the date of registration. After the lapse of said
period, the annotation of adverse claim may be cancelled upon filing of a verified petition therefor by the party in
interest: Provided, however, That after cancellation, no second adverse claim based on the same ground shall be registered
by the same claimant.

33
 Before the lapse of thirty days aforesaid, any party in interest may file a petition in the Court of First Instance
where the land is situated for the cancellation of the adverse claim, and the court shall grant a speedy hearing upon
the question of validity of such adverse claim, and shall render judgment as may be just and equitable. If the
adverse claim is adjudged to be invalid, the registration thereof shall be ordered cancelled. If, in any case, the court,
after notice and hearing, shall find that the adverse claim thus registered was frivolous, it may fine the claimant in an amount
not less than one thousand pesos nor more than five thousand pesos, in its discretion. Before the lapse of thirty days, the
claimant may withdraw his adverse claim by filing with the Register of Deeds a sworn petition to that effect. (Emphasis ours)

Pursuant to the third paragraph of the afore-quoted provision, it has been held that the validity or efficaciousness of an adverse claim may

only be determined by the Court upon petition by an interested party, in which event, the Court shall order the immediate hearing thereof and make

the proper adjudication as justice and equity may warrant. And, it is only when such claim is found unmeritorious that the registration of the adverse

claim may be cancelled.[36]

As correctly pointed out by respondents, the records is bereft of any showing that the trial court conducted any hearing on the

matter. Instead, what the trial court did was to include this material issue among those for which it has rendered its summary judgment as shown by

the following portion of the judgment:

x x x it will be NOTED that subject Adverse Claim annotated at the back of Transfer Certificate of Title No. RT-6604 (82020)
PR-18887, and carried over to defendants-Sps. Pangans Title No. N-20909, is not merely anchored on defendant Reina
Comandantes Waiver of Hereditary Rights and Interest Over a Real Property but also on her being the Attorney-In-Fact of the
previous registered owners/parents/defendants Sps. Alfredo and Imelda Diaz about the Real Estate Mortgage Contract for a
loan of P1,118,228.00 which is a blood money of the plaintiff. Moreover, subject Adverse Claim in LRC Case No. Q-12009
(99) is NOT frivolous and invalid and consequently, REGISTRABLE by virtue of Section 110 of the Land Registration
Act (now Section 70 of Presidential Decree No. 1529). [37] (Emphasis ours)

It does not escape our attention that the trial court merely echoed the claim of petitioner that his adverse claim subject of LRC Case No. Q-12009

(99) is not frivolous, invalid and is consequently registrable. We likewise lament the apparent lack of effort on the part of said court to make even a

short ratiocination as to how it came up with said conclusion. In fact, what followed the above-quoted portion of the summary judgment are mere

recitals of the arguments raised by petitioner in his motion for summary judgment. And in the dispositive portion, the trial court merely casually

ordered that petitioners adverse claim be inscribed at the back of the title of the Pangans. What is worse is that despite this glaring defect, the CA

manifestly overlooked the matter even if respondents vigorously raised the same before it.

Be that as it may, respondents efforts of pointing out this flaw, which we find significant, have not gone to naught as will be hereinafter

discussed.

All the respondents contend that the Waiver of Hereditary Rights and Interest Over a Real Property (Still Undivided) executed by Comandante is null

and void for being violative of Article 1347 of the Civil Code, hence, petitioners adverse claim which was based upon such waiver is likewise void and

cannot confer upon the latter any right or interest over the property.

We agree with the respondents.

Pursuant to the second paragraph of Article 1347 of the Civil Code, no contract may be entered into upon a future inheritance except in cases

expressly authorized by law. For the inheritance to be considered future, the succession must not have been opened at the time of the contract. A

contract may be classified as a contract upon future inheritance, prohibited under the second paragraph of Article 1347, where the following

requisites concur:

34
 (1) That the succession has not yet been opened.

(2) That the object of the contract forms part of the inheritance; and,

(3) That the promissor has, with respect to the object, an expectancy of a right which is purely hereditary in nature.[38]

In this case, there is no question that at the time of execution of Comandantes Waiver of Hereditary Rights and Interest Over a Real

Property (Still Undivided), succession to either of her parents properties has not yet been opened since both of them are still living. With respect to

the other two requisites, both are likewise present considering that the property subject matter of Comandantes waiver concededly forms part of the

properties that she expect to inherit from her parents upon their death and, such expectancy of a right, as shown by the facts, is undoubtedly purely

hereditary in nature.

From the foregoing, it is clear that Comandante and petitioner entered into a contract involving the formers future inheritance as

embodied in the Waiver of Hereditary Rights and Interest Over a Real Property (Still Undivided) executed by her in petitioners favor.

In Taedo v. Court of Appeals,[39] we invalidated the contract of sale between Lazaro Taedo and therein private respondents since the

subject matter thereof was a one hectare of whatever share the former shall have over Lot 191 of the cadastral survey

of Gerona, Province of Tarlac and covered by Title T-13829 of the Register of Deeds of Tarlac. It constitutes a part of Taedos future inheritance from

his parents, which cannot be the source of any right nor the creator of any obligation between the parties.

Guided by the above discussions, we similarly declare in this case that the Waiver of Hereditary Rights and Interest Over a Real Property

(Still Undivided) executed by Comandante in favor of petitioner as not valid and that same cannot be the source of any right or create any obligation

between them for being violative of the second paragraph of Article 1347 of the Civil Code.

Anent the validity and effectivity of petitioners adverse claim, it is provided in Section 70 of PD 1529, that it is necessary that the claimant

has a right or interest in the registered land adverse to the registered owner and that it must arise subsequent to registration. Here, as no right or

interest on the subject property flows from Comandantes invalid waiver of hereditary rights upon petitioner, the latter is thus not entitled to the

registration of his adverse claim. Therefore, petitioners adverse claim is without any basis and must consequently be adjudged invalid and ineffective

and perforce be cancelled.

Albeit we have already resolved the issues raised by petitioner, we shall not stop here as the Diazes and Comandante in their Comment[40] call our

attention to the failure of the CA to pass upon the issue of the propriety of the issuance by the trial court of the Summary Judgment in favor of

petitioner despite the fact that they have raised this issue before the appellate court.They argue that summary judgment is proper only when there is

clearly no genuine issue as to any material fact in the action. Thus, where the defendant presented defenses tendering factual issue which call for

presentation of evidence, as when he specifically denies the material allegations in the complaint, summary judgment cannot be rendered.

The Diazes and Comandante then enumerate the genuine issues in the case which they claim should have precluded the trial court from

issuing a summary judgment in petitioners favor. First, the execution of the SPA in favor of Comandante referred to by petitioner in his complaint was

never admitted by the Diazes. They assert that as such fact is disputed, trial should have been conducted to determine the truth of the matter, same

being a genuine issue. Despite this, the trial court merely took the word of the plaintiff and assumed that said document was indeed executed by

them. Second, although Comandante acknowledges that she has a personal obligation with petitioner, she nevertheless, did not admit that it was in

the amount of P1,118,228.00. Instead, she claims only the amount of P500,000.00 or P600,000.00 (if inclusive of interest) as her obligation.

35
Moreover, the Diazes deny borrowing any money from petitioner and neither did the Pangans owe him a single centavo. Thus, the true amount

of the obligation due the petitioner and how each of the respondents are responsible for such amount are genuine issues which need formal

presentation of evidence. Lastly, they aver that the trial court ignored factual and material issues such as the lack of probative value of Comandantes

waiver of hereditary rights as well as of the SPA; the fact that Comandante signed the mortgage contract and promissory note in her personal

capacity; and, that all such documents were prepared by petitioner who acted as a lawyer and the creditor of Comandante at the same time.

Rule 35 of the Rules of Court provides for summary judgment, the pertinent provisions of which are the following:

Section 1. Summary Judgment for claimant. A party seeking to recover upon a claim, counterclaim, or cross-claim
or to obtain a declaratory relief may, at any time after the pleading in answer thereto has been served, move with supporting
affidavits, depositions or admissions for a summary judgment in his favor upon all or any part thereof.

Section 2. Summary Judgment for the defending party. A party against whom a claim, counterclaim or cross-claim
is asserted or a declaratory relief is sought may, at any time, move with supporting affidavits, depositions or admissions for a
summary judgment in his favor as to all or any part thereof.

Section 3. Motion and proceedings thereon. The motion shall be served at least ten (10) days before the time specified for the
hearing. The adverse party may serve opposing affidavits, depositions, or admissions at least three (3) days before the
hearing. After the hearing, the judgment sought shall be rendered forthwith if the pleadings, supporting affidavits, depositions
and admissions on file, show that, except as to the amount of damages, there is no genuine issue as to any material fact and
that the moving party is entitled to a judgment as a matter of law.

As can be deduced from the above provisions, summary judgment is a procedural devise resorted to in order to avoid long drawn out

litigations and useless delays. When the pleadings on file show that there are no genuine issues of facts to be tried, the Rules of Court allows a party

to obtain immediate relief by way of summary judgment. That is, when the facts are not in dispute, the court is allowed to decide the case summarily

by applying the law to the material facts. Conversely, where the pleadings tender a genuine issue, summary judgment is not proper. A genuine issue

is such fact which requires the presentation of evidence as distinguished from a sham, fictitious, contrived or false claim.[41]

Here, we find the existence of genuine issues which removes the case from the coverage of summary judgment. The variance in the

allegations of the parties in their pleadings is evident.

Petitioner anchors his complaint for sum of money and/or judicial foreclosure on the alleged real estate mortgage over the subject

property allegedly entered into by Comandante in behalf of her parents to secure payment of a loan amounting to P1,118,228.00. To support this

claim, petitioner attached to his complaint (1) the SPA alleged to have been executed by the Diazes; (2) the Real Estate Mortgage Contract

pertaining to the amount of P1,118,228.00; and, (3) a Promissory Note.

Comandante, in her Answer to petitioners Amended Complaint, assailed the validity and due execution of the abovementioned

documents. She asserted that the same were not duly, knowingly and validly executed by her and that it was petitioner who prepared all of

them. Also, although she admitted owing petitioner, same was not an absolute admission as she limited herself to an obligation amounting only

to P600,000.00 inclusive of charges and interests. She likewise claimed that such obligation is her personal obligation and not of her parents.

The Diazes, for their part, also denied that they executed the SPA authorizing their daughter to mortgage their property to petitioner as

well as having any obligation to the latter.

36
 Clearly, there are genuine issues in this case which require the presentation of evidence. For one, it is necessary to ascertain in a full

blown trial the validity and due execution of the SPA, the Real Estate Mortgage and the Promissory Notes because the determination of the following

equally significant questions depends on them, to wit: (1) Are the Diazes obligated to petitioner or is the obligation a purely personal obligation of

Comandante? and, (2) Is the sum of P1,118,228.00 as shown in the Real Estate Mortgage and the Promissory Note, the amount which is really due

the petitioner?

To stress, trial courts have limited authority to render summary judgments and may do so only when there is clearly no genuine issue as to any

material fact. When the facts as pleaded by the parties are disputed or contested, proceedings for summary judgment cannot take the place of

trial.[42] From the foregoing, it is apparent that the trial court should have refrained from issuing the summary judgment but instead proceeded to

conduct a full blown trial of the case. In view of this, the present case should be remanded to the trial court for further proceedings and proper

disposition according to the rudiments of a regular trial on the merits and not through an abbreviated termination of the case by summary judgment.

WHEREFORE, the petition is DENIED. The assailed Decision of the Court of Appeals dated December 12, 2003 insofar as it excluded the

respondents Spouses Bienvenido Pangan and Elizabeth Pangan from among those solidarily liable to petitioner Atty. Pedro M. Ferrer,

is AFFIRMED. The inscription of the adverse claim of petitioner Atty. Pedro M. Ferrer on T.C.T. No. N-209049 is hereby

ordered CANCELLED. Insofar as its other aspects are concerned, the assailed Decision is SET ASIDE and VACATED. The case

is REMANDED to the Regional Trial Court of Quezon City, Branch 224 for further proceedings in accordance with this Decision.

SO ORDERED.

MARIANO C. DEL CASTILLO

Associate Justice

WE CONCUR

ANTONIO T. CARPIO
Associate Justice
Chairperson

ARTURO D. BRION ROBERTO A. ABAD

Associate Justice Associate Justice

JOSE PORTUGAL PEREZ

Associate Justice

ATTESTATION

I attest that the conclusions in the above Decision had been reached in consultation before the case was assigned to the writer of the opinion of the
Courts Division.

REYNATO S. PUNO
Chief Justice

37
 THIRD DIVISION

[G.R. No. 140500. January 21, 2002]

ERNESTINA BERNABE, petitioner, vs. CAROLINA ALEJO as guardian ad litem for the minor ADRIAN
BERNABE, respondent.

DECISION

PANGANIBAN, J.:

The right to seek recognition granted by the Civil Code to illegitimate children who were still minors at the time the Family
Code took effect cannot be impaired or taken away. The minors have up to four years from attaining majority age within which to file
an action for recognition.

Statement of the Case

Before us is a Petition[1] for Review on Certiorari under Rule 45 of the Rules of Court, praying for (1) the nullification of the July
7, 1999 Court of Appeals[2] (CA) Decision[3] in CA-GR CV No. 51919 and the October 14, 1999 CA Resolution[4] denying petitioners
Motion for Reconsideration, as well as (2) the reinstatement of the two Orders issued by the Regional Trial Court (RTC)
of Pasay City (Branch 109) concerning the same case. The dispositive portion of the assailed Decision reads as follows:

WHEREFORE, premises considered, the order of the lower court dismissing Civil Case No. 94-0562 is REVERSED and SET
ASIDE. Let the records of this case be remanded to the lower court for trial on the merits.[5]

The Facts

The undisputed facts are summarized by the Court of Appeals in this wise:

The late Fiscal Ernesto A. Bernabe allegedly fathered a son with his secretary of twenty-three (23) years, herein plaintiff-appellant
Carolina Alejo. The son was born on September 18, 1981 and was named Adrian Bernabe. Fiscal Bernabe died on August 13,
1993, while his wife Rosalina died on December 3 of the same year, leaving Ernestina as the sole surviving heir.

On May 16, 1994, Carolina, in behalf of Adrian, filed the aforesaid complaint praying that Adrian be declared an acknowledged
illegitimate son of Fiscal Bernabe and as such he (Adrian) be given his share in Fiscal Bernabes estate, which is now being held by
Ernestina as the sole surviving heir.

On July 16, 1995, the Regional Trial Court dismissed the complaint, ruling that under the provisions of the Family Code as well as
the case of Uyguangco vs. Court of Appeals, the complaint is now barred x x x.[6]

Orders of the Trial Court

In an Order dated July 26, 1995, the trial court granted Ernestina Bernabes Motion for Reconsideration of the trial courts
Decision and ordered the dismissal of the Complaint for recognition. Citing Article 175 of the Family Code, the RTC held that the
death of the putative father had barred the action.

In its Order dated October 6, 1995, the trial court added that since the putative father had not acknowledged or recognized
Adrian Bernabe in writing, the action for recognition should have been filed during the lifetime of the alleged father to give him the
opportunity to either affirm or deny the childs filiation.

Ruling of the Court of Appeals

On the other hand, the Court of Appeals ruled that in the interest of justice, Adrian should be allowed to prove that he was the
illegitimate son of Fiscal Bernabe. Because the boy was born in 1981, his rights are governed by Article 285 of the Civil Code, which
allows an action for recognition to be filed within four years after the child has attained the age of majority. The subsequent
enactment of the Family Code did not take away that right.

Hence, this appeal.[7]

Issues

38
 In her Memorandum,[8] petitioner raises the following issues for our consideration:

Whether or not respondent has a cause of action to file a case against petitioner, the legitimate daughter of the putative father, for
recognition and partition with accounting after the putative fathers death in the absence of any written acknowledgment of paternity
by the latter.

II

Whether or not the Honorable Court of Appeals erred in ruling that respondents had four years from the attainment of minority to file
an action for recognition as provided in Art. 285 of the Civil Code, in complete disregard of its repeal by the [express] provisions of
the Family Code and the applicable jurisprudence as held by the Honorable Court of Appeals.

III

Whether or not the petition for certiorari filed by the petition[er] is fatally defective for failure to implead the Court of Appeals as one
of the respondents.[9]

The Courts Ruling

The Petition has no merit.

First and Second Issues: Period to File Action for Recognition

Because the first and the second issues are interrelated, we shall discuss them jointly.

Petitioner contends that respondent is barred from filing an action for recognition, because Article 285 of the Civil Code has
been supplanted by the provisions of the Family Code. She argues that the latter Code should be given retroactive effect, since no
vested right would be impaired. We do not agree.

Article 285 of the Civil Code provides the period for filing an action for recognition as follows:

ART. 285. The action for the recognition of natural children may be brought only during the lifetime of the presumed parents, except
in the following cases:

(1) If the father or mother died during the minority of the child, in which case the latter may file the action before the
expiration of four years from the attainment of his majority;

(2) If after the death of the father or of the mother a document should appear of which nothing had been heard and in
which either or both parents recognize the child.

In this case, the action must be commenced within four years from the finding of the document.

The two exceptions provided under the foregoing provision, have however been omitted by Articles 172, 173 and 175 of the
Family Code, which we quote:

ART. 172. The filiation of legitimate children is established by any of the following:

(1) The record of birth appearing in the civil register or a final judgment; or

(2) An admission of legitimate filiation in a public document or a private handwritten instrument and signed by the parent concerned.

In the absence of the foregoing evidence, the legitimate filiation shall be proved by:

(1) The open and continuous possession of the status of a legitimate child; or

(2) Any other means allowed by the Rules of Court and special laws.

ART. 173. The action to claim legitimacy may be brought by the child during his or her lifetime and shall be transmitted to the heirs
should the child die during minority or in a state of insanity. In these cases, the heirs shall have a period of five years within which to
institute the action.

39
The action already commenced by the child shall survive notwithstanding the death of either or both of the parties.

ART. 175. Illegitimate children may establish their illegitimate filiation in the same way and on the same, evidence as legitimate
children.

The action must be brought within the same period specified in Article 173, except when the action is based on the second
paragraph of Article 172, in which case the action may be brought during the lifetime of the alleged parent.

Under the new law, an action for the recognition of an illegitimate child must be brought within the lifetime of the alleged
parent. The Family Code makes no distinction on whether the former was still a minor when the latter died. Thus, the putative parent
is given by the new Code a chance to dispute the claim, considering that illegitimate children are usually begotten and raised in
secrecy and without the legitimate family being aware of their existence. x x x The putative parent should thus be given the
opportunity to affirm or deny the childs filiation, and this, he or she cannot do if he or she is already dead.[10]

Nonetheless, the Family Code provides the caveat that rights that have already vested prior to its enactment should not be
prejudiced or impaired as follows:

ART. 255. This Code shall have retroactive effect insofar as it does not prejudice or impair vested or acquired rights in accordance
with the Civil Code or other laws.

The crucial issue to be resolved therefore is whether Adrians right to an action for recognition, which was granted by Article
285 of the Civil Code, had already vested prior to the enactment of the Family Code. Our answer is affirmative.

A vested right is defined as one which is absolute, complete and unconditional, to the exercise of which no obstacle exists,
and which is immediate and perfect in itself and not dependent upon a contingency x x x.[11] Respondent however contends that the
filing of an action for recognition is procedural in nature and that as a general rule, no vested right may attach to [or] arise from
procedural laws.[12]

Bustos v. Lucero[13] distinguished substantive from procedural law in these words:

x x x. Substantive law creates substantive rights and the two terms in this respect may be said to be synonymous. Substantive rights
is a term which includes those rights which one enjoys under the legal system prior to the disturbance of normal relations.
Substantive law is that part of the law which creates, defines and regulates rights, or which regulates the rights and duties which
give rise to a cause of action; that part of the law which courts are established to administer; as opposed to adjective or remedial
law, which prescribes the method of enforcing rights or obtains redress for their invasion.[14](Citations omitted)

Recently, in Fabian v. Desierto,[15] the Court laid down the test for determining whether a rule is procedural or substantive:

[I]n determining whether a rule prescribed by the Supreme Court, for the practice and procedure of the lower courts, abridges,
enlarges, or modifies any substantive right, the test is whether the rule really regulates procedure, that is, the judicial process for
enforcing rights and duties recognized by substantive law and for justly administering remedy and redress for a disregard or
infraction of them. If the rule takes away a vested right, it is not procedural. If the rule creates a right such as the right to appeal, it
may be classified as a substantive matter; but if it operates as a means of implementing an existing right then the rule deals merely
with procedure.[16]

Applying the foregoing jurisprudence, we hold that Article 285 of the Civil Code is a substantive law, as it gives Adrian the
right to file his petition for recognition within four years from attaining majority age. Therefore, the Family Code cannot impair or
take Adrians right to file an action for recognition, because that right had already vested prior to its enactment.

Uyguangco v. Court of Appeals[17] is not applicable to the case at bar, because the plaintiff therein sought recognition as an
illegitimate child when he was no longer a minor. On the other hand, in Aruego Jr. v. Court of Appeals[18] the Court ruled that an
action for recognition filed while the Civil Code was in effect should not be affected by the subsequent enactment of the Family
Code, because the right had already vested.

Not Limited to Natural Children

To be sure, Article 285 of the Civil Code refers to the action for recognition of natural children. Thus, petitioner contends that
the provision cannot be availed of by respondent, because at the time of his conception, his parents were impeded from marrying
each other. In other words, he is not a natural child.

A natural child is one whose parents, at the time of conception, were not disqualified by any legal impediment from marrying
each other. Thus, in De Santos v. Angeles,[19] the Court explained:

A childs parents should not have been disqualified to marry each other at the time of conception for him to qualify as a natural
child.[20]

A strict and literal interpretation of Article 285 has already been frowned upon by this Court in the aforesaid case
of Aruego, which allowed minors to file a case for recognition even if their parents were disqualified from marrying each other.
There, the Complaint averred that the late Jose Aruego Sr., a married man, had an extramarital liason with Luz Fabian. Out of this

40
relationship were born two illegitimate children who in 1983 filed an action for recognition. The two children were born in 1962 and
1963, while the alleged putative father died in 1982. In short, at the time of their conception, the two childrens parents were legally
disqualified from marrying each other. The Court allowed the Complaint to prosper, even though it had been filed almost a year after
the death of the presumed father. At the time of his death, both children were still minors.

Moreover, in the earlier case Divinagracia v. Rovira,[21] the Court said that the rules on voluntary and compulsory
acknowledgment of natural children, as well as the prescriptive period for filing such action, may likewise be applied to spurious
children. Pertinent portions of the case are quoted hereunder:

The so-called spurious children, or illegitimate children other than natural children, commonly known as bastards, include those
adulterous children or those born out of wedlock to a married woman cohabiting with a man other than her husband or to a married
man cohabiting with a woman other than his wife. They are entitled to support and successional rights. But their filiation must be
duly proven.

How should their filiation be proven? Article 289 of the Civil Code allows the investigation of the paternity or maternity or spurious
children under the circumstances specified in articles 283 and 284 of the Civil Code. The implication is that the rules on compulsory
recognition of natural children are applicable to spurious children.

Spurious children should not be in a better position than natural children. The rules on proof of filiation of natural children or the rules
on voluntary and compulsory acknowledgment for natural children may be applied to spurious children.

That does not mean that spurious children should be acknowledged, as that term is used with respect to natural children. What is
simply meant is that the grounds or instances for the acknowledgment of natural children are utilized to establish the filiation of
spurious children.

A spurious child may prove his filiation by means of a record of birth, a will, a statement before a court of record, or in any authentic
writing. These are the modes of voluntary recognition of natural children.

In case there is no evidence on the voluntary recognition of the spurious child, then his filiation may be established by means of the
circumstances or grounds for compulsory recognition prescribed in the aforementioned articles 283 and 284.

The prescriptive period for filing the action for compulsory recognition in the case of natural children, as provided for in article 285 of
the Civil Code, applies to spurious children.[22] (Citations omitted, italics supplied)

Thus, under the Civil Code, natural children have superior successional rights over spurious ones.[23] However, Rovira treats
them as equals with respect to other rights, including the right to recognition granted by Article 285.

To emphasize, illegitimate children who were still minors at the time the Family Code took effect and whose putative parent
died during their minority are thus given the right to seek recognition (under Article 285 of the Civil Code) for a period of up to four
years from attaining majority age. This vested right was not impaired or taken away by the passage of the Family Code.

Indeed, our overriding consideration is to protect the vested rights of minors who could not have filed suit, on their own, during
the lifetime of their putative parents. As respondent aptly points out in his Memorandum,[24] the State as parens patriae should
protect a minors right. Born in 1981, Adrian was only seven years old when the Family Code took effect and only twelve when his
alleged father died in 1993. The minor must be given his day in court.

Third Issue: Failure to Implead the CA

Under Section 4(a) of Rule 45 of the current Rules of Court, it is no longer required to implead the lower courts or judges
x x x either as petitioners or respondents. Under Section 3, however, the lower tribunal should still be furnished a copy of the
petition. Hence, the failure of petitioner to implead the Court of Appeals as a party is not a reversible error; it is in fact the correct
procedure.

WHEREFORE, the Petition is hereby DENIED and the assailed Decision and Resolution AFFIRMED. Costs against petitioner.

SO ORDERED.

Melo, (Chairman), Sandoval-Gutierrez, and Carpio, JJ., concur.

Vitug, J., no part. Relationship with family.

41
 Republic of the Philippines
SUPREME COURT
Manila

EN BANC

G.R. No. 103982 December 11, 1992

ANTONIO A. MECANO, petitioner,

vs.
COMMISSION ON AUDIT, respondent.

CAMPOS, JR., J.:

Antonio A. Mecano, through a petition for certiorari, seeks to nullify the decision of the Commission on Audit (COA, for brevity)
embodied in its 7th Indorsement, dated January 16, 1992, denying his claim for reimbursement under Section 699 of the Revised
Administrative Code (RAC), as amended, in the total amount of P40,831.00.

Petitioner is a Director II of the National Bureau of Investigation (NBI). He was hospitalized for cholecystitis from March 26, 1990 to
April 7, 1990, on account of which he incurred medical and hospitalization expenses, the total amount of which he is claiming from
the COA.

On May 11, 1990, in a memorandum to the NBI Director, Alfredo S. Lim (Director Lim, for brevity), he requested reimbursement for
his expenses on the ground that he is entitled to the benefits under Section 6991 of the RAC, the pertinent provisions of which read:

Sec. 699. Allowances in case of injury, death, or sickness incurred in performance of duty. — When a person in
the service of the national government of a province, city, municipality or municipal district is so injured in the
performance of duty as thereby to receive some actual physical hurt or wound, the proper Head of Department
may direct that absence during any period of disability thereby occasioned shall be on full pay, though not more
than six months, and in such case he may in his discretion also authorize the payment of the medical
attendance, necessary transportation, subsistence and hospital fees of the injured person. Absence in the case
contemplated shall be charged first against vacation leave, if any there be.

xxx xxx xxx

In case of sickness caused by or connected directly with the performance of some act in the line of duty, the
Department head may in his discretion authorize the payment of the necessary hospital fees.

Director Lim then forwarded petitioner's claim, in a 1st Indorsement dated June 22, 1990, to the Secretary of Justice, along with the
comment, bearing the same date, of Gerarda Galang, Chief, LED of the NBI, "recommending favorable action thereof". Finding
petitioner's illness to be service-connected, the Committee on Physical Examination of the Department of Justice favorably
recommended the payment of petitioner's claim.

However, then Undersecretary of Justice Silvestre H. Bello III, in a 4th Indorsement dated November 21, 1990, returned petitioner's
claim to Director Lim, having considered the statements of the Chairman of the COA in its 5th Indorsement dated 19 September
1990, to the effect that the RAC being relied upon was repealed by the Administrative Code of 1987.

Petitioner then re-submitted his claim to Director Lim, with a copy of Opinion No. 73, S. 19912 dated April 26, 1991 of then Secretary
of Justice Franklin M. Drilon (Secretary Drilon, for brevity) stating that "the issuance of the Administrative Code did not operate to
repeal or abregate in its entirety the Revised Administrative Code, including the particular Section 699 of the latter".

On May 10, 1991, Director Lim, under a 5th Indorsement transmitted anew Mecano's claim to then Undersecretary Bello for
favorable consideration. Under a 6th Indorsement, dated July 2, 1991, Secretary Drilon forwarded petitioner's claim to the COA
Chairman, recommending payment of the same. COA Chairman Eufemio C. Domingo, in his 7th Indorsement of January 16, 1992,
however, denied petitioner's claim on the ground that Section 699 of the RAC had been repealed by the Administrative Code of
1987, solely for the reason that the same section was not restated nor re-enacted in the Administrative Code of 1987. He
commented, however, that the claim may be filed with the Employees' Compensation Commission, considering that the illness of
Director Mecano occurred after the effectivity of the Administrative Code of 1987.

42
Eventually, petitioner's claim was returned by Undersecretary of Justice Eduardo Montenegro to Director Lim under a 9th
Indorsement dated February 7, 1992, with the advice that petitioner "elevate the matter to the Supreme Court if he so desires".

On the sole issue of whether or not the Administrative Code of 1987 repealed or abrogated Section 699 of the RAC, this petition
was brought for the consideration of this Court.

Petitioner anchors his claim on Section 699 of the RAC, as amended, and on the aforementioned Opinion No. 73, S. 1991 of
Secretary Drilon. He further maintains that in the event that a claim is filed with the Employees' Compensation Commission, as
suggested by respondent, he would still not be barred from filing a claim under the subject section. Thus, the resolution of whether
or not there was a repeal of the Revised Administrative Code of 1917 would decide the fate of petitioner's claim for reimbursement.

The COA, on the other hand, strongly maintains that the enactment of the Administrative Code of 1987 (Exec. Order No. 292)
operated to revoke or supplant in its entirety the Revised Administrative Code of 1917. The COA claims that from the "whereas"
clauses of the new Administrative Code, it can be gleaned that it was the intent of the legislature to repeal the old Code. Moreover,
the COA questions the applicability of the aforesaid opinion of the Secretary of Justice in deciding the matter. Lastly, the COA
contends that employment-related sickness, injury or death is adequately covered by the Employees' Compensation Program under
P.D. 626, such that to allow simultaneous recovery of benefits under both laws on account of the same contingency would be unfair
and unjust to the Government.

The question of whether a particular law has been repealed or not by a subsequent law is a matter of legislative intent. The
lawmakers may expressly repeal a law by incorporating therein a repealing provision which expressly and specifically cites the
particular law or laws, and portions thereof, that are intended to be repealed.3 A declaration in a statute, usually in its repealing
clause, that a particular and specific law, identified by its number or title, is repealed is an express repeal; all others are implied
repeals.4

In the case of the two Administrative Codes in question, the ascertainment of whether or not it was the intent of the legislature to
supplant the old Code with the new Code partly depends on the scrutiny of the repealing clause of the new Code. This provision is
found in Section 27, Book VII (Final Provisions) of the Administrative Code of 1987 which reads:

Sec. 27. Repealing Clause. — All laws, decrees, orders, rules and regulations, or portions thereof, inconsistent
with this Code are hereby repealed or modified accordingly.

The question that should be asked is: What is the nature of this repealing clause? It is certainly not an express repealing clause
because it fails to identify or designate the act or acts that are intended to be repealed. 5 Rather, it is an example of a general
repealing provision, as stated in Opinion No. 73, S. 1991. It is a clause which predicates the intended repeal under the condition that
substantial conflict must be found in existing and prior acts. The failure to add a specific repealing clause indicates that the intent
was not to repeal any existing law, unless an irreconcilable inconcistency and repugnancy exist in the terms of the new and old
laws.6 This latter situation falls under the category of an implied repeal.

Repeal by implication proceeds on the premise that where a statute of later date clearly reveals an intention on the part of the
legislature to abrogate a prior act on the subject, that intention must be given effect.7 Hence, before there can be a repeal, there
must be a clear showing on the part of the lawmaker that the intent in enacting the new law was to abrogate the old one. The
intention to repeal must be clear and manifest;8 otherwise, at least, as a general rule, the later act is to be construed as a
continuation of, and not a substitute for, the first act and will continue so far as the two acts are the same from the time of the first
enactment.9

There are two categories of repeal by implication. The first is where provisions in the two acts on the same subject matter are in an
irreconcilable conflict, the later act to the extent of the conflict constitutes an implied repeal of the earlier one. The second is if the
later act covers the whole subject of the earlier one and is clearly intended as a substitute, it will operate to repeal the earlier law.10

Implied repeal by irreconcilable inconsistency takes place when the two statutes cover the same subject matter; they are so clearly
inconsistent and incompatible with each other that they cannot be reconciled or harmonized; and both cannot be given effect, that is,
that one law cannot be enforced without nullifying the other. 11

Comparing the two Codes, it is apparent that the new Code does not cover nor attempt to cover the entire subject matter of the old
Code. There are several matters treated in the old Code which are not found in the new Code, such as the provisions on notaries
public, the leave law, the public bonding law, military reservations, claims for sickness benefits under Section 699, and still others.

Moreover, the COA failed to demonstrate that the provisions of the two Codes on the matter of the subject claim are in an
irreconcilable conflict. In fact, there can be no such conflict because the provision on sickness benefits of the nature being claimed
by petitioner has not been restated in the Administrative Code of 1987. However, the COA would have Us consider that the fact that
Section 699 was not restated in the Administrative Code of 1987 meant that the same section had been repealed. It further
maintained that to allow the particular provisions not restated in the new Code to continue in force argues against the Code itself.
The COA anchored this argument on the whereas clause of the 1987 Code, which states:

43
 WHEREAS, the effectiveness of the Government will be enhanced by a new Administrative Code which
incorporate in a unified document the major structural, functional and procedural principles and rules of
governance; and

xxx xxx xxx

It argues, in effect, that what is contemplated is only one Code — the Administrative Code of 1987. This contention is untenable.

The fact that a later enactment may relate to the same subject matter as that of an earlier statute is not of itself sufficient to cause an
implied repeal of the prior act, since the new statute may merely be cumulative or a continuation of the old one. 12 What is necessary
is a manifest indication of legislative purpose to repeal.13

We come now to the second category of repeal — the enactment of a statute revising or codifying the former laws on the whole
subject matter. This is only possible if the revised statute or code was intended to cover the whole subject to be a complete and
perfect system in itself. It is the rule that a subsequent statute is deemed to repeal a prior law if the former revises the whole subject
matter of the former statute.14 When both intent and scope clearly evidence the idea of a repeal, then all parts and provisions of the
prior act that are omitted from the revised act are deemed repealed. 15 Furthermore, before there can be an implied repeal under this
category, it must be the clear intent of the legislature that the later act be the substitute to the prior act. 16

According to Opinion No. 73, S. 1991 of the Secretary of Justice, what appears clear is the intent to cover only those aspects of
government that pertain to administration, organization and procedure, understandably because of the many changes that
transpired in the government structure since the enactment of the RAC decades of years ago. The COA challenges the weight that
this opinion carries in the determination of this controversy inasmuch as the body which had been entrusted with the implementation
of this particular provision has already rendered its decision. The COA relied on the rule in administrative law enunciated in the case
of Sison vs. Pangramuyen17 that in the absence of palpable error or grave abuse of discretion, the Court would be loathe to
substitute its own judgment for that of the administrative agency entrusted with the enforcement and implementation of the law. This
will not hold water. This principle is subject to limitations. Administrative decisions may be reviewed by the courts upon a showing
that the decision is vitiated by fraud, imposition or mistake. 18 It has been held that Opinions of the Secretary and Undersecretary of
Justice are material in the construction of statutes in pari materia.19

Lastly, it is a well-settled rule of statutory construction that repeals of statutes by implication are not favored. 20 The presumption is
against inconsistency and repugnancy for the legislature is presumed to know the existing laws on the subject and not to have
enacted inconsistent or conflicting statutes.21

This Court, in a case, explains the principle in detail as follows: "Repeals by implication are not favored, and will not be decreed
unless it is manifest that the legislature so intended. As laws are presumed to be passed with deliberation with full knowledge of all
existing ones on the subject, it is but reasonable to conclude that in passing a statute it was not intended to interfere with or
abrogate any former law relating to some matter, unless the repugnancy between the two is not only irreconcilable, but also clear
and convincing, and flowing necessarily from the language used, unless the later act fully embraces the subject matter of the earlier,
or unless the reason for the earlier act is beyond peradventure renewed. Hence, every effort must be used to make all acts stand
and if, by any reasonable construction, they can be reconciled, the later act will not operate as a repeal of the earlier. 22

Regarding respondent's contention that recovery under this subject section shall bar the recovery of benefits under the Employees'
Compensation Program, the same cannot be upheld. The second sentence of Article 173, Chapter II, Title II (dealing on Employees'
Compensation and State Insurance Fund), Book IV of the Labor Code, as amended by P.D. 1921, expressly provides that "the
payment of compensation under this Title shall not bar the recovery of benefits as provided for in Section 699 of the Revised
Administrative Code . . . whose benefits are administered by the system (meaning SSS or GSIS) or by other agencies of the
government."

WHEREFORE, premises considered, the Court resolves to GRANT the petition; respondent is hereby ordered to give due course to
petitioner's claim for benefits. No costs.

SO ORDERED.

Narvasa, C.J., Cruz, Feliciano, Padilla, Bidin, Griño-Aquino, Regalado, Davide, Jr., Romero, Nocon, Bellosillo and Melo, JJ., concur.

Gutierrez, Jr., J., concur in the result.

44
 EN BANC

PHILIPPINE INTERNATIONAL TRADING G.R. No. 183517

CORPORATION,

Petitioner,
Present:

Present:

CORONA, C.J.,

- versus - CARPIO,

CARPIO MORALES,

VELASCO, JR.,

NACHURA,

LEONARDO-DE CASTRO,
COMMISSION ON AUDIT,
BRION,
Respondent.
PERALTA,

BERSAMIN,

DEL CASTILLO,

ABAD,

VILLARAMA, JR.,

PEREZ, and

MENDOZA,* JJ.

Promulgated:

June 22, 2010

x- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -x

DECISION

45
PEREZ, J.:

The inclusion of allowances in the computation of the retirement/separation benefits of the employees of petitioner

Philippine International Trading Corporation (PITC) is at issue in this petition for certiorari filed pursuant to Rules 64 and 65 of

the 1997 Rules of Civil Procedure, seeking the nullification and setting aside of the adverse rulings dated July 4, 2003 and February

15, 2008 issued by respondent Commission on Audit (COA).

The Facts

Created pursuant to Presidential Decree No. 252 dated July 21, 1973, petitioner is a government-owned and controlled corporation

tasked with promoting and developing Philippine trade in pursuance of national economic development. Subsequent to the repeal of

said law with the May 9, 1977 issuance of Presidential Decree No. 1071, otherwise known as the Revised Charter of the Philippine

International Trading Corporation, then President Ferdinand E. Marcos issued Executive Order No. 756 on December 28, 1981,

authorizing the reorganization of petitioner pursuant to his legislative powers to amend charters of government corporations through

executive orders in turn issued pursuant to Presidential Decree No. 1416, as amended by Presidential Decree No.

1772. On February 18, 1983, President Marcos issued Executive Order No. 877, authorizing further the reorganization of petitioner

for the purpose of accelerating and expanding the countrys export concerns.[1]

On December 31, 1983, Eligia Romero, an officer of petitioner, opted to retire under Republic Act No. 1616 and received a total

of P286,780.00 as gratuity benefits for services rendered from 1955 to 1983. Immediately re-hired on contractual basis, it appears

that said employee remained in the service of petitioner until her compulsory retirement on April 27, 2000. In receipt of retirement

benefits in the total sum of P1,013,952.00 for the period July 1, 1955 to April 27, 2000, net of the P286,70.00 gratuity benefits she

received in 1983, Ms. Romero filed a July 16, 2001 request, seeking from petitioner payment of retirement differentials on the

strength of Section 6 of Executive Order No. 756. Said provision states that any officer or employee who retires, resigns, or is

separated from the service shall be entitled to one month pay for every year of service computed at highest salary received

including allowances, in addition to the other benefits provided by law, regardless of any provision of law or regulations to the

contrary.[2]

Confronted with the question of whether the computation of Ms. Romeros retirement benefits should include the allowances she had

received while under its employ, petitioner sent queries to respondent and the Office of the Government Corporate Counsel

regarding the application of Section 6 of Executive Order No. 756. On August 20, 2002, then Government Corporate Counsel

Amado D. Valdez issued Opinion No. 197, Series of 2002, espousing a literal interpretation and application of the aforesaid

provision.Invoking the principle that retirement laws should be liberally construed and administered in favor of the persons intended

to be benefited thereby, said opinion declared that, pursuant to the subject provision, the basis for the computation of the retirement

benefits of petitioners employees should be the highest basic salary received by them, including allowances not integrated into the

basic pay.[3]

46
 On the other hand, on July 4, 2003, COA Assistant Commissioner and General Counsel Raquel R. Habitan issued the

first assailed ruling, the 6th Indorsement dated July 4, 2003, finding the denial of Ms. Romeros claim for retirement differentials in

order. Taking appropriate note of the fact that the Reserve for Retirement Gratuity and Commutation of Leave Credits of petitioners

employees did not include allowances outside of the basic salary, said officer ruled that Executive Order No. 756 was a special law

issued only for the specific purpose of reorganizing petitioner corporation. Although it was subsequently adverted to in Executive

Order No. 877, Section 6 of Executive Order No. 756 was determined to be intended for employees retired, separated or resigned in

connection with petitioners reorganization and was not meant to be a permanent retirement scheme for its employees.[4]

Elevated by petitioner on appeal before the respondent,[5] the foregoing ruling was affirmed in the second assailed ruling,

the Decision No. 2008-023 dated February 15, 2008,[6] which likewise discounted the legal basis for Ms. Romeros claim for

retirement differentials. Finding that Section 6 of Executive Order No. 756 was simply an incentive to encourage employees to

resign or retire at the height of petitioners reorganization, said decision went on to make the following pronouncements, to wit:

Moreover, RA No. 4968 prohibits the creation of any insurance retirement plan by any government
agency and government-owned or controlled corporation other than the GSIS, viz.:

Section 10. Subsection (b) of Section twenty-eight of the same Act, as amended is hereby
amended to read as follows:

(b) Hereafter no insurance or retirement plan for officers or employees shall be created
by the employer. All supplementary retirement or pension plans heretofore in
force in any government office, agency, or instrumentality or corporation owned
or controlled by the government, are hereby declared inoperative or
abolished: Provided, That the rights of those who are already eligible to retire
thereunder shall not be affected.

The Supreme Court explained the rationale of the above provisions in Avelina B. Conte et al. vs. Commission
on Audit, G.R. No. 116422, November 4, 1996, thusly:

Said Sec. 28 (b) as amended by RA 4968 in no uncertain terms bars the creation of any
insurance or retirement plan other than the GSIS for government officers and employees, in
order to prevent the undue and iniquitous proliferation of such plans. It is beyond cavil
that Res. 56 contravenes the said provision of law and is therefore invalid, void and of no
effect. To ignore this and rule otherwise would be tantamount to permitting every other
government office or agency to put up its own supplementary retirement benefit plan under
the guise of such financial assistance. (Emphasis ours

To hold that Section 6 of E.O. 756 is a retirement law for PTIC employees other than the GSIS law would run
counter to the policy of the state to prevent the undue and iniquitous proliferation of retirement plans that would
unduly promote the inequality of treatment in the retirement benefits of government employees.[7]

Hence, this petition.

47
The Issues

Petitioner seeks the nullification and setting aside of the assailed rulings on the following grounds, to wit:

A.

RESPONDENT COMMISSION GRAVELY ABUSED ITS DISCRETION AMOUNTING TO LACK OR EXCESS

OF JURISDICTION IN ISSUING THE FIRST ASSAILED RULING, OPINING THAT SECTION 6 OF EO 756
WAS NOT MEANT TO BE A PERMANENT RETIREMENT SCHEME OF THE PITC.

B.

RESPONDENT COMMISSION GRAVELY ABUSED ITS DISCRETION AMOUNTING TO LACK OR EXCESS

OF JURISDICTION IN ISSUING THE SECOND ASSAILED RULING DENYING PITCS REQUEST FOR
RECONSIDERATION OF THE ABOVE OPINION OF COA GENERAL COUNSEL RAQUEL HABITAN,
LIKEWISE HOLDING THAT SECTION 6 of EO 756 WAS NOT MEANT TO BE A PERMANENT SCHEME OF
THE PITC.

C.

RESPONDENT COMMISSION GRAVELY ABUSED ITS DISCRETION AMOUNTING TO LACK OR EXCESS

OF JURISDICTION IN ISSUING THE ASSAILED RULINGS WHICH ARE CONTRARY TO SETTLED
JURISPRUDENCE THAT RETIREMENT LAWS ARE LIBERALLY CONSTRUED AND ADMINISTERED IN
FAVOR OF THE PERSONS INTENDED TO BE BENEFITTED AND THAT ALL DOUBTS AS TO THE
INTENT OF THE LAW SHOULD BE RESOLVED IN FAVOR OF THE RETIREE TO ACHIEVE ITS
HUMANITARIAN PURPOSES.

D.

RESPONDENT COMMISSION GRAVELY ABUSED ITS DISCRETION AMOUNTING TO LACK OR EXCESS

OF JURISDICTION IN RELYING ON SECTION 10 of RA 4968 AS TO THE ALLEGED PROHIBITION
AGAINST ANY INSURANCE OR RETIREMENT PLAN OR RETIREMENT PLAN OTHER THAN THE GSIS,
SAID LAW HAVING BEEN PASSED PRIOR TO THE ISSUANCE OF EO 756. OTHERWISE STATED,
SECTION 10 OF RA 4968 IS DEEMED REVISED, AMENDED, SUPERSEDED OR REPEALED BY EO 756
PURSUANT TO THE REPEALING CLAUSE OF SAID EO 756.

[8]

48
The Courts Ruling

We find the petition bereft of merit.

It is a rule in statutory construction that every part of the statute must be interpreted with reference to the context, i.e., that every

part of the statute must be considered together with the other parts, and kept subservient to the general intent of the whole

enactment.[9] Because the law must not be read in truncated parts, its provisions must be read in relation to the whole law. The

statute's clauses and phrases must not, consequently, be taken as detached and isolated expressions, but the whole and every part

thereof must be considered in fixing the meaning of any of its parts in order to produce a harmonious whole. [10] Consistent with the

fundamentals of statutory construction, all the words in the statute must be taken into consideration in order to ascertain its

meaning.[11]

Applying the foregoing principles to the case at bench, we find it well worth emphasizing at the outset that Executive Order No.

756[12] was meant to reorganize petitioners corporate set-up. While incorporating amendments of petitioners Revised Charter under

Presidential Decree No. 1071 with provisions relating to the subscription of its capital, [13] the establishment of subsidiaries, including

joint ventures,[14] the composition[15] and grant of additional powers to its Board of Directors,[16] the appointment of its

President,[17] the grant of incentive scheme to its officers and employees [18] as well as its authority to deputize commercial

attaches[19] and to grant franchises to operate Philippine trade houses abroad, [20] Section 4 (1) of Executive Order No. 756

specifically authorized petitioners Board of Directors to reorganize the structure of the Corporation, in accordance with its expanded

role in the development of Philippine trade, with such officers and employees as may be needed and determine their competitive

salaries and reasonable allowances and other benefits to effectively carry out its powers and functions. For this purpose, Section 6

of the same law provides as follows:

SECTION 6. Exemption from OCPC. In recognition of the special nature of its operations, the
Corporation shall continue to be exempt from the application of the rules and regulations of the Office of the
Compensation and Position Classification or any other similar agencies that may be established hereafter as
provided under Presidential Decree No. 1071. Likewise, any officer or employee who retires, resigns, or is
separated from the service shall be entitled to one month pay for every year of service computed at highest
salary received including all allowances, in addition to the other benefits provided by law, regardless of any
provision of law or regulations to the contrary; Provided, That the employee shall have served in the
Corporation continuously for at least two years: Provided, further, That in case of separated employees, the
separation or dismissal is not due to conviction for any offense the penalty for which includes forfeiture of
benefits: and Provided, finally, That in the commutation of leave credits earned, the employees who resigned,
retired or is separated shall be entitled to the full payment therefor computed with all the allowances then being
enjoyed at the time of resignation, retirement of separation regardless of any restriction or limitation provided for
in other laws, rules or regulations. (Italics supplied)

49
 As an adjunct to the reorganization mandated under Executive Order No. 756, we find that the foregoing provision

cannot be interpreted independent of the purpose or intent of the law. Rather than the permanent retirement law for its

employees that petitioner now characterizes it to be, we find that the provision of gratuities equivalent to one month pay for

every year of service computed at highest salary received including all allowances was clearly meant as an incentive for

employees who retire, resign or are separated from service during or as a consequence of the reorganization petitioners Board

of Directors was tasked to implement. As a temporary measure, it cannot be interpreted as an exception to the general

prohibition against separate or supplementary insurance and/or retirement or pension plans under Section 28, Subsection (b)

of Commonwealth Act No. 186,[21] amended. Pursuant to Section 10 of Republic Act No. 4968[22] which was approved on June

17, 1967, said latter provision was amended to read as follows:

Section 10. Subsection (b) of Section twenty-eight of the same Act, as amended is hereby further
amended to read as follows:

(b) Hereafter no insurance or retirement plan for officers or employees shall be created by any
employer. All supplementary retirement or pension plans heretofore in force in any government office, agency,
or instrumentality or corporation owned or controlled by the government, are hereby declared inoperative or
abolished: Provided, That the rights of those who are already eligible to retire thereunder shall not be affected.

In reconciling Section 6 of Executive Order No. 756 with Section 28, Subsection (b) of Commonwealth Act No. 186, [23] as

amended, uppermost in the mind of the Court is the fact that the best method of interpretation is that which makes laws consistent

with other laws which are to be harmonized rather than having one considered repealed in favor of the other. [24] Time and again, it

has been held that every statute must be so interpreted and brought in accord with other laws as to form a uniform system of

jurisprudence interpretere et concordare legibus est optimus interpretendi.[25] Thus, if diverse statutes relate to the same thing, they

ought to be taken into consideration in construing any one of them, as it is an established rule of law that all acts in pari materia are

to be taken together, as if they were one law.[26] We find that a temporary and limited application of the more beneficent gratuities

provided under Section 6 of Executive Order No. 756 is in accord with the pre-existing and general prohibition against separate or

supplementary insurance retirement and/or pension plans under Section 28, Subsection (b) of Commonwealth Act No. 186.

In the absence of a manifest and specific intent from which the same may be gleaned, moreover, Section 6 of Executive

Order No. 756 cannot be construed as an additional alternative to existing general retirement laws and/or an exception to the

prohibition against separate or supplementary insurance retirement or pension plans as aforesaid. Aside from the fact that a

meaning that does not appear nor is intended or reflected in the very language of the statute cannot be placed therein by

construction,[27]petitioner would likewise do well to remember that repeal of laws should be made clear and express. Repeals by

implication are not favored as laws are presumed to be passed with deliberation and full knowledge of all laws existing on the

subject,[28] the congruent application of which the courts must generally presume. [29] For this reason, it has been held that the failure

50
to add a specific repealing clause particularly mentioning the statute to be repealed indicates that the intent was not to repeal any

existing law on the matter, unless an irreconcilable inconsistency and repugnancy exists in the terms of the new and old laws.[30]

The dearth of merit in petitioners position is rendered even more evident when it is borne in mind that Executive Order No.

756 was subsequently repealed by Executive Order No. 877 which was issued on February 18, 1983 to hasten the reorganization of

petitioner, in light of changing circumstances and developments in the world market. For purposes of clarity, the full text of Executive

Order No 877 is reproduced hereunder, viz.:

EXECUTIVE ORDER NO. 877

AUTHORIZING THE REORGANIZATION OF THE PHILIPPINE INTERNATIONAL TRADING CORPORATION

CREATED UNDER PRESIDENTIAL DECREE NO. 1071, AS AMENDED

WHEREAS, it is the declared policy of the New Republic to pursue national development with
renewed dedication and determination;

WHEREAS, there is a need to position and gear up the country's export marketing resources in
anticipation of a recovery in the world economy;

WHEREAS, the Philippine International Trading Corporation, hereinafter referred to as the

Corporation, is in the vanguard of marketing Philippine exports worldwide;

WHEREAS, in order to accelerate and expand its exports, there is a need to upgrade the
management and marketing expertise of the Corporation consistent with the requirements of international
marketing;

WHEREAS, in the light of the foregoing, the reorganization of the Corporation becomes imperative;

WHEREAS, under Presidential Decree No. 1416, as amended, the President is empowered to
undertake such organizational changes as may be necessary in the light of changing circumstances and
development;

NOW, THEREFORE, I, FERDINAND E. MARCOS, President of the Philippines, by virtue of the

powers vested in me by the Constitution, and the authority vested on me by Presidential Decree No. 1416, as
amended, do hereby order and direct:

51
 1. Reorganization. The Minister of Trade and Industry is hereby designated Chief Executive Officer of
the Corporation with full powers to restructure and reorganize the Corporation and to determine or fix its staffing
pattern, compensation structure and related organizational requirements. The Chairman shall complete such
restructuring and reorganization within six (6) months from the date of this Executive Order. All personnel of the
Corporation who are not reappointed by the Chairman under the new reorganized structure of the Corporation
shall be deemed laid off; provided, that personnel so laid off shall be entitled to the benefits accruing to
separated employees under Executive Order No. 756 amending the Revised Chapter of the Corporation.

2. Functions of Chairman. The Chairman of the Corporation shall have the following functions and
powers:

a. Exercise all the powers incident to the functions of a Chief Executive Officer, including supervision
and control over all personnel of the Corporation;

b. Review, develop, supervise and direct the export marketing thrusts and strategy of the Corporation;

c. Upon recommendation of the President of the Corporation, appoint personnel of the Corporation in
executive and senior management positions;

d. Call meetings of the Board of Directors and of the Executive Committee of the Corporation.

3. Personnel Recruitment and Other Services. In recognition of the special nature of its operation, the
Corporation shall, in recruiting personnel and in availing of outside technical services, continue to be exempt
from OCPC rules and regulations pursuant to Section 6 of Executive Order No. 756 and Section 28 of
Presidential Decree No. 1071. In addition, the provision of Section 7 of Executive Order No. 756 is hereby
reaffirmed.

4. Repealing Clause. All provisions of Presidential Decree No. 1071 and Executive Order No. 756, as
well as of other laws, decrees, executive orders or issuances, or parts thereof, that are in conflict with this
Executive Order, are hereby repealed or modified accordingly.

5. Effectivity. This Executive Order shall take effect immediately.

DONE in the City of Manila, this 18th day of February, in the year of Our Lord, Nineteen Hundred and
Eighty-Three. (Italics supplied)

Specifically mandated to be accomplished within the limited timeframe of six months from the issuance of the law, the

reorganization under Executive Order No. 877 clearly supplanted that which was provided under Executive Order No. 756. Nowhere

is this more evident than Section 4 of said latter law which provides that, All provisions of Presidential Decree No. 1071 and

Executive Order No. 756, as well as of other laws, decrees, executive orders or issuances, or parts thereof that are in conflict with

this Executive Order, are hereby repealed or modified accordingly. In utilizing the computation of the benefits provided under

Section 6 of Executive Order No. 756 for employees considered laid off for not being reappointed under petitioners new reorganized

structure, Executive Order No. 877 was correctly interpreted by respondent to evince an intent not to extend said gratuity beyond

the six-month period within which the reorganization is to be accomplished.

52
In the case of Conte v. Commission on Audit,[31] this Court ruled that the prohibition against separate or supplementary insurance

and/or retirement plan under Section 28, Subsection (b) of Commonwealth Act No. 186 was meant to prevent the undue and

iniquitous proliferation of such plans in different government offices. Both before the issuance and after the effectivity of Executive

Order Nos. 756 and 877, petitioners employees were governed by and availed of the same retirement laws applicable to other

government employees in view of the absence of a specific provision thereon under Presidential Decree No. 252, [32] its organic law,

and Presidential Decree No. 1071, otherwise known as the Revised Charter of the PITC. As appropriately pointed out by

respondent, petitioners observance of said general retirement laws may be gleaned from the fact that the Reserve for Retirement

Gratuity and Commutation of Leave Credits for its employees were based only on their basic salary and did not include allowances

they received. No less than Eligia Romero, petitioners employee whose claim for retirement differentials triggered the instant inquiry,

was granted benefits under Republic Act No. 1616 upon her retirement on December 31, 1983.

It doesnt help petitioners cause any that Section 6 of Executive Order No. 756, in relation to Section 3 of Executive

Order No. 877, was further amended by Republic Act No. 6758, [33] otherwise known as the Compensation and Classification

Act of 1989. Mandated under Article IX B, Section 5[34] of the Constitution,[35] Section 4[36] of Republic Act No. 6758 specifically

extends its coverage to government owned and controlled corporations like petitioner. With this Courts ruling in Philippine

International Trading Corporation v. Commission on Audit [37] to the effect that petitioner is included in the coverage of Republic

Act No. 6758, it is evidently no longer exempted from OCPC rules and regulations, in keeping with said laws intent to do away

with multiple allowances and other incentive packages as well as the resultant differences in compensation among government

personnel.

In the context of petitions for certiorari like the one at bench, grave abuse of discretion is understood to be such capricious

and whimsical exercise of jurisdiction as is equivalent to lack of jurisdiction. [38] It is tantamount to an evasion of a positive duty or to

virtual refusal to perform a duty enjoined by law, or to act at all in contemplation of law, as when the power is exercised in an

arbitrary or despotic manner by reason of passion or personal hostility.[39] As the Constitutional office tasked with the duty to

examine, audit and settle all accounts pertaining to the revenue, and receipts of and expenditures or uses of funds and property,

owned or held in trust by or pertaining to the government or any of its subdivisions,[40] respondent committed no grave abuse of

discretion in disapproving petitioners utilization of Section 6 of Executive Order No. 756 in the computation of its employees

retirement benefits.

WHEREFORE, the petition is DENIED for lack of merit.

SO ORDERED.

53
 Republic of the Philippines
SUPREME COURT
Manila

SECOND DIVISION

G.R. No. L-30061 February 27, 1974

THE PEOPLE OF THE PHILIPPINES, plaintiff-appellees,

vs.
JOSE JABINAL Y CARMEN, defendant-appellant.

Office of the Solicitor General Felix V. Makasiar and Solicitor Antonio M. Martinez for plaintiff-appellee.

Pedro Panganiban y Tolentino for defendant-appellant.

ANTONIO, J.:p

Appeal from the judgment of the Municipal Court of Batangas (provincial capital), Batangas, in Criminal Case No. 889, finding the
accused guilty of the crime of Illegal Possession of Firearm and Ammunition and sentencing him to suffer an indeterminate penalty
ranging from one (1) year and one (1) day to two (2) years imprisonment, with the accessories provided by law, which raises in
issue the validity of his conviction based on a retroactive application of Our ruling in People v. Mapa.1

The complaint filed against the accused reads:

That on or about 9:00 o'clock, p.m., the 5th day of September, 1964, in the poblacion, Municipality of Batangas,
Province of Batangas, Philippines, and within the jurisdiction of this Honorable Court, the above-named
accused, a person not authorized by law, did then and there wilfully, unlawfully and feloniously keep in his
possession, custody and direct control a revolver Cal. .22, RG8 German Made with one (1) live ammunition and
four (4) empty shells without first securing the necessary permit or license to possess the same.

At the arraignment on September 11, 1964, the accused entered a plea of not guilty, after which trial was accordingly held.

The accused admitted that on September 5, 1964, he was in possession of the revolver and the ammunition described in the
complaint, without the requisite license or permit. He, however, claimed to be entitled to exoneration because, although he had no
license or permit, he had an appointment as Secret Agent from the Provincial Governor of Batangas and an appointment as
Confidential Agent from the PC Provincial Commander, and the said appointments expressly carried with them the authority to
possess and carry the firearm in question.

Indeed, the accused had appointments from the above-mentioned officials as claimed by him. His appointment from Governor
Feliciano Leviste, dated December 10, 1962, reads:

Reposing special trust and confidence in your civic spirit, and trusting that you will be an effective agent in the
detection of crimes and in the preservation of peace and order in the province of Batangas, especially with
respect to the suppression of trafficking in explosives, jueteng, illegal cockfighting, cattle rustling, robbery and
the detection of unlicensed firearms, you are hereby appointed a SECRET AGENT of the undersigned, the
appointment to take effect immediately, or as soon as you have qualified for the position. As such Secret Agent,
your duties shall be those generally of a peace officer and particularly to help in the preservation of peace and
order in this province and to make reports thereon to me once or twice a month. It should be clearly understood
that any abuse of authority on your part shall be considered sufficient ground for the automatic cancellation of
your appointment and immediate separation from the service. In accordance with the decision of the Supreme
Court in G.R. No. L-12088 dated December 23, 1959, you will have the right to bear a firearm, particularly
described below, for use in connection with the performance of your duties.

By virtue hereof, you may qualify and enter upon the performance of your duties by taking your oath of office
and filing the original thereof with us.

54
Very truly yours,

(Sgd.) FELICIANO LEVISTE

Provincial Governor

FIREARM AUTHORIZED TO CARRY:

Kind: — ROHM-Revolver

Make: — German

SN: — 64

Cal:— .22

On March 15, 1964, the accused was also appointed by the PC Provincial Commander of Batangas as Confidential Agent with
duties to furnish information regarding smuggling activities, wanted persons, loose firearms, subversives and other similar subjects
that might affect the peace and order condition in Batangas province, and in connection with these duties he was temporarily
authorized to possess a ROHM revolver, Cal. .22 RG-8 SN-64, for his personal protection while in the performance of his duties.

The accused contended before the court a quo that in view of his above-mentioned appointments as Secret Agent and Confidential
Agent, with authority to possess the firearm subject matter of the prosecution, he was entitled to acquittal on the basis of the
Supreme Court's decision in People vs. Macarandang2 and People vs. Lucero.3 The trial court, while conceding on the basis of the
evidence of record the accused had really been appointed Secret Agent and Confidential Agent by the Provincial Governor and the
PC Provincial Commander of Batangas, respectively, with authority to possess and carry the firearm described in the complaint,
nevertheless held the accused in its decision dated December 27, 1968, criminally liable for illegal possession of a firearm and
ammunition on the ground that the rulings of the Supreme Court in the cases of Macarandang and Lucero were reversed and
abandoned in People vs. Mapa, supra. The court considered as mitigating circumstances the appointments of the accused as
Secret Agent and Confidential Agent.

Let us advert to Our decisions in People v. Macarandang, supra, People v. Lucero, supra, and People v. Mapa, supra.
In Macarandang, We reversed the trial court's judgment of conviction against the accused because it was shown that at the time he
was found to possess a certain firearm and ammunition without license or permit, he had an appointment from the Provincial
Governor as Secret Agent to assist in the maintenance of peace and order and in the detection of crimes, with authority to hold and
carry the said firearm and ammunition. We therefore held that while it is true that the Governor has no authority to issue any firearm
license or permit, nevertheless, section 879 of the Revised Administrative Code provides that "peace officers" are exempted from
the requirements relating to the issuance of license to possess firearms; and Macarandang's appointment as Secret Agent to assist
in the maintenance of peace and order and detection of crimes, sufficiently placed him in the category of a "peace officer" equivalent
even to a member of the municipal police who under section 879 of the Revised Administrative Code are exempted from the
requirements relating to the issuance of license to possess firearms. In Lucero, We held that under the circumstances of the case,
the granting of the temporary use of the firearm to the accused was a necessary means to carry out the lawful purpose of the
batallion commander to effect the capture of a Huk leader. In Mapa, expressly abandoning the doctrine in Macarandang, and by
implication, that in Lucero, We sustained the judgment of conviction on the following ground:

The law is explicit that except as thereafter specifically allowed, "it shall be unlawful for any person to ...
possess any firearm, detached parts of firearms or ammunition therefor, or any instrument or implement used or
intended to be used in the manufacture of firearms, parts of firearms, or ammunition." (Sec. 878, as amended
by Republic Act No. 4, Revised Administrative Code.) The next section provides that "firearms and ammunition
regularly and lawfully issued to officers, soldiers, sailors, or marines [of the Armed Forces of the Philippines],
the Philippine Constabulary, guards in the employment of the Bureau of Prisons, municipal police, provincial
governors, lieutenant governors, provincial treasurers, municipal treasurers, municipal mayors, and guards of
provincial prisoners and jails," are not covered "when such firearms are in possession of such officials and
public servants for use in the performance of their official duties." (Sec. 879, Revised Administrative Code.)

The law cannot be any clearer. No provision is made for a secret agent. As such he is not exempt. ... .

It will be noted that when appellant was appointed Secret Agent by the Provincial Government in 1962, and Confidential Agent by
the Provincial Commander in 1964, the prevailing doctrine on the matter was that laid down by Us in People v. Macarandang (1959)
and People v. Lucero (1958). Our decision in People v. Mapa reversing the aforesaid doctrine came only in 1967. The sole question
in this appeal is: Should appellant be acquitted on the basis of Our rulings in Macarandang and Lucero, or should his conviction
stand in view of the complete reversal of the Macarandang and Lucero doctrine in Mapa? The Solicitor General is of the first view,
and he accordingly recommends reversal of the appealed judgment.

55
Decisions of this Court, although in themselves not laws, are nevertheless evidence of what the laws mean, and this is the reason
why under Article 8 of the New Civil Code "Judicial decisions applying or interpreting the laws or the Constitution shall form a part of
the legal system ... ." The interpretation upon a law by this Court constitutes, in a way, a part of the law as of the date that law
originally passed, since this Court's construction merely establishes the contemporaneous legislative intent that law thus construed
intends to effectuate. The settled rule supported by numerous authorities is a restatement of legal maxim "legis interpretatio legis
vim obtinet" — the interpretation placed upon the written law by a competent court has the force of law. The doctrine laid down
in Lucero and Macarandang was part of the jurisprudence, hence of the law, of the land, at the time appellant was found in
possession of the firearm in question and when he arraigned by the trial court. It is true that the doctrine was overruled in
the Mapa case in 1967, but when a doctrine of this Court is overruled and a different view is adopted, the new doctrine should be
applied prospectively, and should not apply to parties who had relied on the old doctrine and acted on the faith thereof. This is
especially true in the construction and application of criminal laws, where it is necessary that the punishability of an act be
reasonably foreseen for the guidance of society.

It follows, therefore, that considering that appellant conferred his appointments as Secret Agent and Confidential Agent and
authorized to possess a firearm pursuant to the prevailing doctrine enunciated in Macarandang and Lucero, under which no criminal
liability would attach to his possession of said firearm in spite of the absence of a license and permit therefor, appellant must be
absolved. Certainly, appellant may not be punished for an act which at the time it was done was held not to be punishable.

WHEREFORE, the judgment appealed from is hereby reversed, and appellant is acquitted, with costs de oficio.

Zaldivar (Chairman), Barredo, Fernandez and Aquino, JJ., concur.

Fernando, J., took no part.

56
 Republic of the Philippines
SUPREME COURT
Manila

SECOND DIVISION

G.R. No. L-29701 March 16, 1987

PHILIPPINE RABBIT BUS LINES, INC., petitioner,

vs.
HON. LUDIVICO D. ARCIAGA, as Judge of the Court of First Instance of Ilocos Sur, Branch I Vigan, Ilocos Sur, TAURINO
SINGSON AND THE HONORABLE COURT OF APPEALS, respondents.

Eufrocino R. Tagayuma for respondent.

PARAS, J.:

This is a petition for review on certiorari of the August 5, 1968 Resolution of the Court of Appeals in CA-G.R. No. 41582R * which
dismissed petitioner's petition for certiorari and mandamus with preliminary injunction on the ground that the allegations made
therein are insufficient to justify further process.

The undisputed facts of this case, as found by the Court of Appeals, are as follows:

On August 24, 1960, Taurino Singson, resident of Cabugao, Ilocos Sur, as paying passenger on board bus No.
215 belonging to the Philippine Rabbit Bus Lines, Inc. sustained multiple serious physical injuries when the said
bus crashed against an acacia tree at La Union, so he brought a complaint for contractual tort (Record 2731). In
its answer, defendant interposed the defense that the collision was due to a fortuitous event (Rec. 42). The
case was set for trial on December 23, 1965 (45), but upon motion of both counsels, the same was transferred
to February 3 and 4, 1966 (55). On October 6, 1966, the Court noted that no pre-trial has ever been conducted
in the case and so both parties were ordered to confer with one another for a compromise agreement at the
office of the Philippine Rabbit at Tarlac, Tarlac, and the trial was postponed to November 14, 1966 (57), and
then transferred again upon petition filed by counsel for Philippine Rabbit for January 20, 1967 (58) and then
postponed again to April 29, 1967. At the scheduled trial of April 29, 1967, at 8:40 are only the defendant
Philippine Rabbit appeared and upon motion of its counsel, the Court dismissed the case for non-appearance of
plaintiff (59).

It appears that the order of dismissal of April 29, 1967 alluded to was sent to Atty. Constants Pimentel counsel
for plaintiff Taurino Singson, at Vigan, Ilocos Sur, by registered mail on May 3, 1967 and was received by Miss
May altuna addressee's agent, on May 6, 1967 (70). On July 6, 1967 (61 days from receipt of dismissal),
counsel for plaintiff Taurino Singson filed a Petition for Relief accompanied by an affidavit of said plaintiff
alleging that on April 29, 1967 (the date of the trial), he went to Vigan for the purpose of attending the trial of his
case, boarding a passenger jeepney at Cabugao, his hometown, but when the vehicle reached Lapog, it had
engine trouble, causing him to reach the court 15 minutes late and found thereupon that the court had already
dismissed the case (60-62). Opposition was filed to the Petition for Relief by defendant Philippine Rabbit. On
August 16, 1967, the lower court granted plaintiff Taurino Singson's Petition for Relief (66). On September 14,
1967, counsel for Philippine Rabbit filed a motion for reconsideration of the order granting the petition for Relief
(67-69). In an order dated November 28, 1967, the lower court denied the motion for reconsideration of the
Philippine Rabbit on the ground that "considering the particular nature and circumstances of the case at bar and
also the fact that petition for relief under Rule 38 is premised on equity and is allowed on exceptional
circumstances, and that as far as possible failure of justice should be avoided; and that, further, in the absence
of a clear lack of intention to delay, a case should not be allowed to go off on procedural points to the end that
technicalities should not override the merits of the case, this court believes that justice is best served if in this
particular case the plaintiff will be given his day in court" (79-72). (pp. 22-25, Rollo)

On July 9, 1968, herein petitioner Philippine Rabbit Bus Lines, Inc. filed a Petition for certiorari and mandamus with Preliminary
Injunction in the Court of Appeals, docketed therein as CA-G.R. No. 41582-R.

In a Resolution dated August 5, 1968, the Court of Appeals denied the petition on the ground that the allegations made therein are
insufficient to justify its giving it due course. Petitioner moved for a reconsideration, but in a Resolution dated October 1, 1968, the
Court of Appeals denied the same. Hence, the instant petition (Record, pp. 4-20).

In a Resolution dated November 15, 1968 (Ibid., p. 47), this Court gave due course to the petition.

57
On January 23, 1969, petitioner filed its Brief (Ibid., p. 56), and on February 19, 1969, private respondent filed his Brief (Ibid., p. 63).
On March 29, 1969, petitioner filed its Reply Brief (Ibid., P. 67).

In its brief, petitioner raised the following assignment of errors:

THE COURT OF APPEALS ERRED IN NOT HOLDING THAT THE 60-DAY PERIOD PROVIDED IN SEC. 38 OF THE RULES OF
COURT IS MANDATORY AND NON-EXTENDIBLE.

II

THE COURT OF APPEALS ERRED IN APPLYING THE RULE OF EQUITY IN THE CASE AT BAR.

III

THE COURT OF APPEALS ERRED IN HOLDING THAT certiorari DOES NOT LIE IN THE INSTANT CASE.

The petition is impressed with merit.

Sec. 3 of Rule 38 of the Rules of Court clearly states that "A petition provided for in either of the preceding sections of this rule must
be verified, filed within sixty (60) days after the petitioner learns of the judgment, order or other proceeding to be set aside, and not
more than six (6) months after such judgment or order was entered or said proceeding was taken."

It is undisputed that the Petition for Relief in this case was filed 61 days from receipt of the notice of dismissal or one day late. In
fact, the records show that counsel for private respondent learned of the dismissal on the same day, April 29, 1967, when he arrived
late for the hearing so that the Petition for Relief was at least eight (8) days late. The records further show that counsel for private
respondent did not move for reconsideration of the Order of dismissal, nor for new trial Neither did he appeal, thereby allowing the
decision to become final and executory. As a last resort, he could have availed of the sixty day period provided for by Rule 38 to file
a Petition for Relief from judgment but again he allowed this opportunity to lapse. Indeed, to him is applicable, the well known maxim
that "equity aids the vigilant, not those who slumber on their rights." (Henson v. Director of Lands, 55 Phil. 586).

In the case of Turqueza v. Hernando (97 SCRA 488 119801) the Supreme Court in disallowing the reopening of the case which has
become final ruled that there is no justification in law and in fact, for respondent judge's void act of ordering the reopening of the
case which has become final and executory.

Thus, the Court held:

The Court has said time and again that the doctrine of finality of judgments is grounded on fundamental
considerations of public policy and sound practice that at the risk of occasional error the judgments of courts
must become final at some definite date fixed by law. The law gives an exception or "last chance" of
a timely petition for relief from judgment within the reglementary period (within 60 days from knowledge and 6
months from entry of judgment) under Rule 38 supra, but such grace period must be taken as "absolutely fixed,
inextendible, never interrupted and cannot be subject to any condition or contingency. Because the period fixed
is itself devised to meet a condition or contingency (fraud, accident, mistake or excusable neglect), the
equitable remedy is an act of grace, as it were, designed to give the aggrieved party another and last chance'"
"and failure to avail of such last chance within the grace period fixed by the statute or Rules of Court
is fatal." (Turqueza v. Hernando, supra).

In expressly reiterating [1985]), held that the Rule is that, for a petition for relief under Rule 38 to be entertained by the court, the
petitioner must satisfactorily show that he has faithfully and strictly complied with the provisions of said Rule. Consequently, it is
incumbent upon the petitioner to show that the said petition was filed within the reglementary period specified in Sec. 3, of the same,
otherwise on this ground alone, the petition should be dismissed.

For the foregoing reasons, neither can private respondent invoke equity as a ground for the reopening of the case "there being an
express provision of law under which the remedy can be invoked." (Barrios v. Go Thong & Co., 7 Phil. 542 [1963]). The rule is,
"equity follows the law" and as discussed in Pomeroy's Equity Jurisprudence Vol. 2 pp. 188-189 (as cited in Appellant's Brief p. 20),
the meaning of the principle is stated as follows:

There are instances, indeed, in which a court of equity gives a remedy, where the law gives none; but where a
particular remedy is given by the law, and that remedy is bounded and circumscribed by particular rules, it

58
 would be very improper for the court to take it up where the law leaves it and to extend it further than the law
allows.

In the same manner, the issue as to whether or not certiorari is proper in the instant case, has been laid to rest in the case
of Turqueza vs. Hernando, (supra) where a petition for certiorari directly filed with the Supreme Court was granted and the Court set
aside the questioned order issued by respondent judge to reopen the case below for reception of respondent-defendant's evidence
notwithstanding the lapse of the reglementary period within which respondent could file a petition for relief from judgment.

PREMISES CONSIDERED, the resolution of the Court of Appeals in CA-G.R. No. 41582-R and the questioned Order dated August
16, 1967 of Judge Ludivico D. Arciaga in Civil Case No. 2539 are hereby REVERSED and SET ASIDE; and said Civil Case is
declared TERMINATED.

SO ORDERED.

Fernan (Chairman), Gutierrez, Jr., Padilla, Bidin and Cortes, JJ., concur.

Alampay, J., is on leave.

59
 Republic of the Philippines
SUPREME COURT
Manila
EN BANC
G.R. No. L-23678 June 6, 1967

TESTATE ESTATE OF AMOS G. BELLIS, deceased.

PEOPLE'S BANK and TRUST COMPANY, executor.
MARIA CRISTINA BELLIS and MIRIAM PALMA BELLIS, oppositors-appellants,
vs.
EDWARD A. BELLIS, ET AL., heirs-appellees.

Vicente R. Macasaet and Jose D. Villena for oppositors appellants.

Paredes, Poblador, Cruz and Nazareno for heirs-appellees E. A. Bellis, et al.
Quijano and Arroyo for heirs-appellees W. S. Bellis, et al.
J. R. Balonkita for appellee People's Bank & Trust Company.
Ozaeta, Gibbs and Ozaeta for appellee A. B. Allsman.

BENGZON, J.P., J.:

This is a direct appeal to Us, upon a question purely of law, from an order of the Court of First Instance of Manila dated April 30,
1964, approving the project of partition filed by the executor in Civil Case No. 37089 therein.1äwphï1.ñët

The facts of the case are as follows:

Amos G. Bellis, born in Texas, was "a citizen of the State of Texas and of the United States." By his first wife, Mary E. Mallen, whom
he divorced, he had five legitimate children: Edward A. Bellis, George Bellis (who pre-deceased him in infancy), Henry A. Bellis,
Alexander Bellis and Anna Bellis Allsman; by his second wife, Violet Kennedy, who survived him, he had three legitimate children:
Edwin G. Bellis, Walter S. Bellis and Dorothy Bellis; and finally, he had three illegitimate children: Amos Bellis, Jr., Maria Cristina
Bellis and Miriam Palma Bellis.

On August 5, 1952, Amos G. Bellis executed a will in the Philippines, in which he directed that after all taxes, obligations, and
expenses of administration are paid for, his distributable estate should be divided, in trust, in the following order and manner: (a)
$240,000.00 to his first wife, Mary E. Mallen; (b) P120,000.00 to his three illegitimate children, Amos Bellis, Jr., Maria Cristina Bellis,
Miriam Palma Bellis, or P40,000.00 each and (c) after the foregoing two items have been satisfied, the remainder shall go to his
seven surviving children by his first and second wives, namely: Edward A. Bellis, Henry A. Bellis, Alexander Bellis and Anna Bellis
Allsman, Edwin G. Bellis, Walter S. Bellis, and Dorothy E. Bellis, in equal shares.1äwphï1.ñët

Subsequently, or on July 8, 1958, Amos G. Bellis died a resident of San Antonio, Texas, U.S.A. His will was admitted to probate in
the Court of First Instance of Manila on September 15, 1958.

The People's Bank and Trust Company, as executor of the will, paid all the bequests therein including the amount of $240,000.00 in
the form of shares of stock to Mary E. Mallen and to the three (3) illegitimate children, Amos Bellis, Jr., Maria Cristina Bellis and
Miriam Palma Bellis, various amounts totalling P40,000.00 each in satisfaction of their respective legacies, or a total of P120,000.00,
which it released from time to time according as the lower court approved and allowed the various motions or petitions filed by the
latter three requesting partial advances on account of their respective legacies.

On January 8, 1964, preparatory to closing its administration, the executor submitted and filed its "Executor's Final Account, Report
of Administration and Project of Partition" wherein it reported, inter alia, the satisfaction of the legacy of Mary E. Mallen by the
delivery to her of shares of stock amounting to $240,000.00, and the legacies of Amos Bellis, Jr., Maria Cristina Bellis and Miriam
Palma Bellis in the amount of P40,000.00 each or a total of P120,000.00. In the project of partition, the executor — pursuant to the
"Twelfth" clause of the testator's Last Will and Testament — divided the residuary estate into seven equal portions for the benefit of
the testator's seven legitimate children by his first and second marriages.

On January 17, 1964, Maria Cristina Bellis and Miriam Palma Bellis filed their respective oppositions to the project of partition on the
ground that they were deprived of their legitimes as illegitimate children and, therefore, compulsory heirs of the deceased.

Amos Bellis, Jr. interposed no opposition despite notice to him, proof of service of which is evidenced by the registry receipt
submitted on April 27, 1964 by the executor.1

After the parties filed their respective memoranda and other pertinent pleadings, the lower court, on April 30, 1964, issued an order
overruling the oppositions and approving the executor's final account, report and administration and project of partition. Relying

60
upon Art. 16 of the Civil Code, it applied the national law of the decedent, which in this case is Texas law, which did not provide for
legitimes.

Their respective motions for reconsideration having been denied by the lower court on June 11, 1964, oppositors-appellants
appealed to this Court to raise the issue of which law must apply — Texas law or Philippine law.

In this regard, the parties do not submit the case on, nor even discuss, the doctrine of renvoi, applied by this Court in Aznar v.
Christensen Garcia, L-16749, January 31, 1963. Said doctrine is usually pertinent where the decedent is a national of one country,
and a domicile of another. In the present case, it is not disputed that the decedent was both a national of Texas and a domicile
thereof at the time of his death.2 So that even assuming Texas has a conflict of law rule providing that the domiciliary system (law of
the domicile) should govern, the same would not result in a reference back (renvoi) to Philippine law, but would still refer to Texas
law. Nonetheless, if Texas has a conflicts rule adopting the situs theory (lex rei sitae) calling for the application of the law of the
place where the properties are situated, renvoi would arise, since the properties here involved are found in the Philippines. In the
absence, however, of proof as to the conflict of law rule of Texas, it should not be presumed different from ours. 3 Appellants' position
is therefore not rested on the doctrine of renvoi. As stated, they never invoked nor even mentioned it in their arguments. Rather,
they argue that their case falls under the circumstances mentioned in the third paragraph of Article 17 in relation to Article 16 of the
Civil Code.

Article 16, par. 2, and Art. 1039 of the Civil Code, render applicable the national law of the decedent, in intestate or testamentary
successions, with regard to four items: (a) the order of succession; (b) the amount of successional rights; (e) the intrinsic validity of
the provisions of the will; and (d) the capacity to succeed. They provide that —

ART. 16. Real property as well as personal property is subject to the law of the country where it is situated.

However, intestate and testamentary successions, both with respect to the order of succession and to the amount of
successional rights and to the intrinsic validity of testamentary provisions, shall be regulated by the national law of the
person whose succession is under consideration, whatever may he the nature of the property and regardless of the
country wherein said property may be found.

ART. 1039. Capacity to succeed is governed by the law of the nation of the decedent.

Appellants would however counter that Art. 17, paragraph three, of the Civil Code, stating that —

Prohibitive laws concerning persons, their acts or property, and those which have for their object public order, public
policy and good customs shall not be rendered ineffective by laws or judgments promulgated, or by determinations or
conventions agreed upon in a foreign country.

prevails as the exception to Art. 16, par. 2 of the Civil Code afore-quoted. This is not correct. Precisely, Congress deleted the
phrase, "notwithstanding the provisions of this and the next preceding article" when they incorporated Art. 11 of the old Civil Code
as Art. 17 of the new Civil Code, while reproducing without substantial change the second paragraph of Art. 10 of the old Civil Code
as Art. 16 in the new. It must have been their purpose to make the second paragraph of Art. 16 a specific provision in itself which
must be applied in testate and intestate succession. As further indication of this legislative intent, Congress added a new provision,
under Art. 1039, which decrees that capacity to succeed is to be governed by the national law of the decedent.

It is therefore evident that whatever public policy or good customs may be involved in our System of legitimes, Congress has not
intended to extend the same to the succession of foreign nationals. For it has specifically chosen to leave, inter alia, the amount of
successional rights, to the decedent's national law. Specific provisions must prevail over general ones.

Appellants would also point out that the decedent executed two wills — one to govern his Texas estate and the other his Philippine
estate — arguing from this that he intended Philippine law to govern his Philippine estate. Assuming that such was the decedent's
intention in executing a separate Philippine will, it would not alter the law, for as this Court ruled in Miciano v. Brimo, 50 Phil. 867,
870, a provision in a foreigner's will to the effect that his properties shall be distributed in accordance with Philippine law and not
with his national law, is illegal and void, for his national law cannot be ignored in regard to those matters that Article 10 — now
Article 16 — of the Civil Code states said national law should govern.

The parties admit that the decedent, Amos G. Bellis, was a citizen of the State of Texas, U.S.A., and that under the laws of Texas,
there are no forced heirs or legitimes. Accordingly, since the intrinsic validity of the provision of the will and the amount of
successional rights are to be determined under Texas law, the Philippine law on legitimes cannot be applied to the testacy of Amos
G. Bellis.

Wherefore, the order of the probate court is hereby affirmed in toto, with costs against appellants. So ordered.

Concepcion, C.J., Reyes, J.B.L., Dizon, Regala, Makalintal, Zaldivar, Sanchez and Castro, JJ., concur

61