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Republic of the Philippines

SUPREME COURT
Manila
EN BANC
G.R. No. L-9274 February 1, 1957
RUFINO LOPEZ & SONS, INC., petitioner,
vs.
THE COURT OF TAX APPEALS, respondent.
Isidro A. Vera and Eulalio F. Legaspi for petitioner.

Office of the Solicitor General Ambrosio Padila, Assistant Solicitor General Ramon L. Avanceña and Solicitor
Felicisimo R. Rosete for respondent.
MONTEMAYOR, J.:
Petitioner appellant Rufino Lopez & Sons, Inc. is appealing from a resolution of the Court of Tax Appeals
dismissing its appeal from a decision of the Collector of Customs for the Port of Manila, assessing additional
fees on petitioner for a certain importation of wire netting. The facts are simple and undisputed. Lopez & Sons
imported hexagonal wire netting from Hamburg, Germany. The Manila Collector of Customs assessed the
corresponding customs duties on the importation on the basis of consular and supplies invoices. Said customs
duties were paid and the shipments were released. Subsequently, however, and freight of said wire netting and
as a result of the reassessment, additional customs duties in the amount of P1,966.59 were levied and
imposed upon petitioner. Failing to secure a reconsideration of the reassessment and levy of additional
customs duties, Lopez & Sons appealed to the Court of Tax Appeals. Acting upon a motion to dismiss the
appeal, filed by the Solicitor General on the ground of lack of jurisdiction, the Tax Court, by its resolution of May
23, 1955, dismissed the appeal on the ground that it had no jurisdiction to review decisions of the Collector of
Customs of Manila, citing section 7 of Republic Act No. 1125, creating said tax court. From said resolution of
dismissal, Lopez & Sons appealed to us, seeking a reversal of said resolution of dismissal.
For purposes of reference, we are reproducing section 7 of Republic Act No. 1125 relied upon by the Tax Court
and the Solicitor General, as well as Section 11 of the same Act invoked by the petitioner:
Sec. 7. Jurisdiction. — The Court of Tax Appeals shall exercise exclusive appellate jurisdiction to review by
appeal, as herein provided —
(1) Decisions of the Collector of Internal Revenue in cases involving disputed assessments, refunds of internal
revenue taxes, fees or other charges, penalties imposed in relation thereto, or other matters arising under the
National Internal Revenue Code or other law or part of law administered by the Bureau of Internal Revenue;
(2) Decisions of the Commissioner of Customs in cases involving liability for customs duties, fees or other
money charges, seizure, detention or release of property affected; fines, forfeitures or other penalties imposed
in relation thereto, or other matters arising under the Customs Law or other law or part of law administered by
the Bureau of Customs; and
(3) Decisions of provincial or city Board of Assessment Appeals in case involving the assessment and taxation
of real property or other matters arising under the assessment Law, including rules and regulations relative
thereto.
xxx xxx xxx
SEC. 11. Who may appeal; effect of appeal. — Any person, association or corporation adversely by a decision
or ruling of the Collector of Internal Revenue, the Collector of Customs or any provincial or city Board of
Assessment Appeals may file an appeal in the Court of Tax Appeals within thirty days after the receipt of such
decision or ruling.
No appeal taken to the Court of Tax Appeals from the decision of the Collector of Internal Revenue or the
Collector of the Customs shall suspend the payment, levy, distraint, and/or sale of any property of the taxpayer
for the satisfaction of his tax liability as provided by existing law: Provided, however, that when in the opinion of
the Court the collection by the Bureau of Internal Revenue or the Commissioner of Customs may jeopardize
the interests of the Government and/or the taxpayer the Court at any stage of the proceeding may suspend the
said collection and require the taxpayer either to deposit the amount claimed or to file a surety bond for not
more than double the amount with the Court. (Emphasis supplied.)
There is really a discrepancy between Sections 7 and 11 above reproduced. Section 7 provides that the Court
of Tax Appeals has exclusive appellate jurisdiction to review by appeal decisions of the Collector of Internal
Revenue, decisions of the Commissioner of Customs and decisions of provincial or city Board of Assessment
Appeals on cases mentioned in said section. On the other hand, section 11 of the same Republic Act in listing
and enumerating the persons and entities who may appeal as well as the effect of said appeal, mentions those
affected by a decision or ruling of the Collector of Internal Revenue, the Collector of Customs or any provincial
or City Board of Assessment Appeals, and fails to mention the Commissioner of Customs. Taken literally, a
person affected by a decision of the Collector of Customs may appeal to the Court of Tax Appeals; and since
no mention is made about decisions of the Commissioner of Customs, a person affected by said decision may
not appeal to the Court of Tax Appeals. However, section 7 of the Act above reproduced specially provides that
the Court of Tax Appeals has appellate jurisdiction to review decisions of the Commissioner of Customs. That
legal provision conferring appellate jurisdiction on the Court of Tax Appeals to review decisions of the
Commissioner of Customs would be empty, meaningless, and unenforceable because under Section 11, no
person affected by the decision of the Commissioner of customs may appeal to the Tax Court. These two
meaningless, and unenforceable because under Section 11, should be harmonized and reconciled if possible,
in order to give effect to the whole Act.
We are in entire accord with the Tax Court and the Solicitor General that a clerical error was committed in
section 11, mentioning therein the Collector of Customs. It should be, as it was meant to be, the Commissioner
of Customs. There are several reasons in support of this view. Under the Customs Law, found in sections 1137
to 1419 of the Revised Administrative Code, the Commissioner of Customs (Insular Collector of Customs) is
the Chief of the Bureau of Customs and has jurisdiction over the whole country as regards the enforcement of
the Customs Law, whereas, there are about sixteen Collectors of Customs for the sixteen collection districts
and principal parts of entry into which the Philippines has been divided. These Collectors of Customs are
subordinates of the Commissioner of Customs over whom he has supervision and control (section 1152,
Revised Administrative Code). Pursuant to said supervision and control, under section 1405 of the Revised
Administrative Code, when any new or unsettled question shall be determined by the Collector of Customs, he
shall, if matter is not otherwise carried upon for review in ordinary course, notify the Commissioner of his
decision, submitting an adequate statement of acts involved. What is more important is the provision of section
1380, which reproduce below:
SEC. 1380. Review by Commissioner. — The person aggrieved by the decision of the Collector of Customs in
any matter presented upon protest or by his action in any case of seizure may, within fifteen days after
notification in writing by the collector of his action or decision, give written notice to the collector signifying his
desore to have the matter reviewed by the Commissioner.
Thereupon, the Collector of Customs shall forthwith transmit all the papers in the cause to the Commissioner,
who shall approve, modify, or reverse the action of his subordinate and shall take such steps and make such
order or orders as may be necessary to give effect to his decision.
Under this section, any person affected or aggrieved by the decision of the Collector of Customs may appeal
the decision to the Commissioner of Customs. From all this, it is clear if we followed the literal meaning and
wording of section 11 of Republic Act No. 1125, in the sense that persons affected by a decision of the
Collector of Customs may appeal directly tot he Court of Tax Appeals, then the supervision and control of the
Commissioner of Customs over his Collector of Customs, and his right to review their decisions upon appeal to
him by the persons affected by said decision would, not only be gravely affected, but even destroyed. We
cannot believe that was the intention of the Legislature in passing Republic Act No. 1125. It is more reasonable
and logical to hold that in Section 11 of the Act, the Legislature meant and intended to say, the Commissioner
of Customs, instead of Collector of Customs in the first paragraph and the first part of the second paragraph of
said section. In thus holding, the Court are not exactly indulging in judicial legislation. They are merely
endeavoring to rectify and correct a clearly clerical error in the wording of a statute, in order to give due course
and carry out the evident intention of the Legislature. This the Courts should and can validly do. Under the
rules of statutory construction, it is not the letter but rather the spirit of the law and intention of the Legislature
that is important and which matters. When the interpretation of a statute according to the exact and literal
import of its words would lead to absurd or mischievous results, or would contravene the clear purposes of the
Legislature, it should be construed according to its spirit and reason, disregarding as far as necessary, the
latter of the law. Statutes may be extended to cover cases not within the literal meaning of the terms, for that
which is clearly within the intention of the Legislature in enacting the law is as much within the statute as if it
were within the latter. Here the error (clerical and misprint) is plain and obvious. It is within the province of the
courts to correct said error. This is not to correct the act of the Legislature, but rather to carry out and give due
course to the true intention of said Legislature. (Black on Interpretation of Laws, 2nd edition, pp. 66-67;
157-158.).
Furthermore, section 11 of Republic Act 1125 may well be regarded as a mere complement or implementation
of section 7. Since section 7 provides that the Tax Court has jurisdiction to review by appeal, decisions of the
Collector of Internal Revenue. decisions of the Commissioner of Customs, and decisions of provincial or city
Boards of Assessment Appeals, so section 11 naturally provides that persons adversely affected by said
decisions may appeal to the Tax Court. However, in enumerating the governmental bodies or agencies
rendering said decisions that may be appealed, it erroneously listed the Collector instead of the Commissioner,
of Customs. The error is plain.
As a matter of fact, the Court of Tax Appeals in its resolution of dismissal of May 23, 1955 cites in support
thereof a resolution promulgated by it on January 22, 1955 in C.T.A. Case No. 17, entitled "Acting Collector of
Customs vs. Acting Commissioner of Customs", wherein it said:
The phrase "Collector of Customs" appearing in the above-mentioned provision (section 11) of Republic Act
No. 1125 is clearly an oversight on the part of Congress. It should read "Commissioner of Customs" to make
the provision conform with section 7 of the said Republic Act section 1380 of the Revised Administrative Code.
Petitioner contends that the literal meaning of Section 11 of Republic Act No. 1125 should be adopted in the
sense that the Court of Tax Appeals has concurrent jurisdiction with the Commissioner of Customs over
Appeals from decisions of Collectors of Customs, so that a person adversely affected by a decision of a
Collector of Customs is given the choice of appealing the said decision either to the Commissioner of Customs
or to the Courts of Tax Appeals. We find contention unteable. In the first place, the two remedies suggested are
entirely different, one from the other; an appeal to the Commissioner of Customs is purely administrative,
whereas, appeal to the Court of Tax Appeal is manifestly judicial. And it is a sound rule that before one resorts
to the Courts, the administrative remedy provided by law should first be exhausted. In the second place, the
two remedies suggested by the petitioner would result in confusion because a person adversely affected by a
decision of a Collector of Customs could not be sure where to seek the remedy, whether with the
Commissioner of Customs or with the Court of Tax Appeals, and it might even be difficult for him to decide
because, if he took the appeal directly to the Tax Court, that would ordinarily cut off his remedy before the
Commissioner of Customs for the reason that, should the Court of Tax Appeals decide against him, he may not
appeal said decision to the Commissioner of Customs because the Commissioner as an administrative officer
may not review the decision of the Court. On the other hand, if the person affected by a decision of a Collector
of Customs took his appeal to the Commissioner of Customs, and there receives an adverse decision, he may
yet appeal therefrom to the Court of Tax Appeals. In the third place, even if the person affected by an adverse
ruling of the Collector of Customs took his appeal to the Court of Tax Appeals, as advocated by counsel for the
petitioner, under the literal meaning of section 11, the Tax Court may refuse to entertain said appeal, as was
done in the present case, on the ground that under section 7 of Republic Act No. 1125, it had no jurisdiction to
review a decision of the Collector of Customs, section 7 clearly limiting its appellate jurisdiction to review
decisions of the Commissioner of Customs.
In view of the foregoing, we hold that under the law, particularly, the Customs Law and Republic Act No. 1125,
the Court of Tax Appeals has no jurisdiction to review by appeal, decisions of the Collector of Customs. The
appealed order of dismissal is hereby affirmed, with costs.
Paras, C.J., Bengzon, Padilla, Reyes, A., Bautista Angelo Labrador, Concepcion, Reyes, J.B.L., Endencia and
Felix, JJ., concur.
!
EN BANC
G.R. No. 109976 April 26, 2005
PHILIPPINE NATIONAL OIL COMPANY, Petitioner,
vs.
THE HON. COURT OF APPEALS, THE COMMISSIONER OF INTERNAL REVENUE and TIRSO
SAVELLANO, Respondents.
x--------------------x
G.R. No. 112800 April 26, 2005
PHILIPPINE NATIONAL BANK, Petitioner,
vs.
THE HON. COURT OF APPEALS, COURT OF TAX APPEALS, TIRSO B. SAVELLANO and
COMMISSIONER OF INTERNAL REVENUE, Respondents.
DECISION
CHICO-NAZARIO, J.:
This is a consolidation of two Petitions for Review on Certiorari filed by the Philippine National Oil Company
(PNOC)1 and the Philippine National Bank (PNB),<2 assailing the decisions of the Court of Appeals in CA-G.R.
SP No. 295833 and CA-G.R. SP No. 29526,4 respectively, which both affirmed the decision of the Court of Tax
Appeals (CTA) in CTA Case No. 4249.5
The Petitions before this Court originated from a sworn statement submitted by private respondent Tirso B.
Savellano (Savellano) to the Bureau of Internal Revenue (BIR) on 24 June 1986. Through his sworn
statement, private respondent Savellano informed the BIR that PNB had failed to withhold the 15% final tax on
interest earnings and/or yields from the money placements of PNOC with the said bank, in violation of
Presidential Decree (P.D.) No. 1931. P.D. No. 1931, which took effect on 11 June 1984, withdrew all tax
exemptions of government-owned and controlled corporations.
In a letter, dated 08 August 1986, the BIR requested PNOC to settle its liability for taxes on the interests
earned by its money placements with PNB and which PNB did not withhold.6 PNOC wrote the BIR on 25
September 1986, and made an offer to compromise its tax liability, which it estimated to be in the sum of
P304,419,396.83, excluding interest and surcharges, as of 31 July 1986. PNOC proposed to set-off its tax
liability against a claim for tax refund/credit of the National Power Corporation (NAPOCOR), then pending with
the BIR, in the amount of P335,259,450.21. The amount of the claim for tax refund/credit was supposedly a
receivable account of PNOC from NAPOCOR.7
On 08 October 1986, the BIR sent a demand letter to PNB, as withholding agent, for the payment of the final
tax on the interest earnings and/or yields from PNOC's money placements with the bank, from 15 October
1984 to 15 October 1986, in the total amount of P376,301,133.33.8 On the same date, the BIR also mailed a
letter to PNOC informing it of the demand letter sent to PNB.9
PNOC, in another letter, dated 14 October 1986, reiterated its proposal to settle its tax liability through the set-
off of the said tax liability against NAPOCOR'S pending claim for tax refund/credit.10 The BIR replied on 11
November 1986 that the proposal for set-off was premature since NAPOCOR's claim was still under process.
Once more, BIR requested PNOC to settle its tax liability in the total amount of P385,961,580.82, consisting of
P303,343,765.32 final tax, plus P82,617,815.50 interest computed until 15 November 1986.11
On 09 June 1987, PNOC made another offer to the BIR to settle its tax liability. This time, however, PNOC
proposed a compromise by paying P91,003,129.89, representing 30% of the P303,343,766.29 basic tax, in
accordance with the provisions of Executive Order (E.O.) No. 44.12
Then BIR Commissioner Bienvenido A. Tan, in a letter, dated 22 June 1987, accepted the compromise. The
BIR received a total tax payment on the interest earnings and/or yields from PNOC's money placements with
PNB in the amount of P93,955,479.12, broken down as follows:
Previous payment made by PNB
P 2,952,349.23
Add: Payment made by PNOC pursuant to the compromise agreement of June 22, 1987
P 91,003,129.89
Total tax payment
P 93,955,479.1213
Private respondent Savellano, through four installments, was paid the informer's reward in the total amount of
P14,093,321.89, representing 15% of the P93,955,479.12 tax collected by the BIR from PNOC and PNB. He
received the last installment on 01 December 1987.14
On 07 January 1988, private respondent Savellano, through his legal counsel, wrote the BIR to demand
payment of the balance of his informer's reward, computed as follows:
BIR tax assessment
P 385,961,580.82
Final tax rate
0.15
Informer's reward due (BIR deficiency tax assessment x Final tax rate)
P 57,894,237.12
Less: Payment received by private respondent Savellano
P 14,093,321.89
Outstanding balance
P 43,800,915.2515
BIR Commissioner Tan replied through a letter, dated 08 March 1988, that private respondent Savellano was
already fully paid the informer's reward equivalent to 15% of the amount of tax actually collected by the BIR
pursuant to its compromise agreement with PNOC. BIR Commissioner Tan further explained that the
compromise was in accordance with the provisions of E.O. No. 44, Revenue Memorandum Order (RMO) No.
39-86, and RMO No. 4-87.16
Private respondent Savellano submitted another letter, dated 24 March 1988, to BIR Commissioner Tan,
seeking reconsideration of his decision to compromise the tax liability of PNOC. In the same letter, private
respondent Savellano questioned the legality of the compromise agreement entered into by the BIR and PNOC
and claimed that the tax liability should have been collected in full.17
On 08 April 1988, while the aforesaid Motion for Reconsideration was still pending with the BIR, private
respondent Savellano filed a Petition for Review ad cautelam with the CTA, docketed as CTA Case No. 4249.
He claimed therein that BIR Commissioner Tan acted "with grave abuse of discretion and/or whimsical exercise
of jurisdiction" in entering into a compromise agreement that resulted in "a gross and unconscionable
diminution" of his reward. Private respondent Savellano prayed for the enforcement and collection of the total
tax assessment against taxpayer PNOC and/or withholding agent PNB; and the payment to him by the BIR
Commissioner of the 15% informer's reward on the total tax collected.18 He would later amend his Petition to
implead PNOC and PNB as necessary and indispensable parties since they were parties to the compromise
agreement.19
In his Answer filed with the CTA, BIR Commissioner Tan asserted that the Petition stated no cause of action
against him, and that private respondent Savellano was already paid the informer's reward due him. Alleging
that the Petition was baseless and malicious, BIR Commissioner Tan filed a counterclaim for exemplary
damages against private respondent Savellano.20
PNOC and PNB filed separate Motions to Dismiss, both arguing that the CTA lacked jurisdiction to decide the
case.21 In its Resolution, dated 28 November 1988, the CTA denied the Motions to Dismiss since the question
of lack of jurisdiction and/or cause of action do not appear to be indubitable.22
After their Motions to Dismiss were denied by the CTA, PNOC and PNB filed their respective Answers to the
amended Petition. PNOC averred, among other things, that (1) it had no privity with private respondent
Savellano; (2) the BIR Commissioner's discretionary act in entering into the compromise agreement had legal
basis under E.O. No. 44 and RMO No. 39-86 and RMO No. 4-87; and (3) the CTA had no jurisdiction to resolve
the case against it.23 On the other hand, PNB asserted that (1) the CTA lacked jurisdiction over the case; and
(2) the BIR Commissioner's decision to accept the compromise was discretionary on his part and, therefore,
cannot be reviewed or interfered with by the courts.24 PNOC and PNB later filed their amended Answer
invoking an opinion of the Commission on Audit (COA) disallowing the payment by the BIR of informer's
reward to private respondent Savellano.25
The CTA, thereafter, ordered the parties to submit their evidence,26 to be followed by their respective
Memoranda.27
On 23 November 1990, private respondent Savellano, filed a Manifestation with Motion for Suspension of
Proceedings, claiming that his pending Motion for Reconsideration with the BIR Commissioner may soon be
resolved.28 Both PNOC and PNB opposed the said Motion.29
Subsequently, the new BIR Commissioner, Jose U. Ong, in a letter to PNB, dated 16 January 1991, demanded
that PNB pay deficiency withholding tax on the interest earnings and/or yields from PNOC's money
placements, in the amount of P294,958,450.73, computed as follows:
Withholding tax, plus interest under the letter of demand dated November 11, 1986
P 385,961,580.82
Less: Amount paid under E.O. No. 44
P 91,003,129.89
Amount still due and collectible
P 294,958,450.7330
This BIR letter was received by PNB on 06 February 1991,31 and was protested by it through a letter, dated 11
April 1991.32 The BIR denied PNB's protest on the ground that it was filed out of time and, thus, the
assessment had already become final.33
Private respondent Savellano, on 22 February 1991, filed an Omnibus Motion moving to withdraw his previous
Motion for Suspension of Proceeding since BIR Commissioner Ong had finally resolved his Motion for
Reconsideration, and submitting by way of supplemental offer of evidence (1) the letter of BIR Commissioner
Ong, dated 13 February 1991, informing private respondent Savellano of the action on his Motion for
Reconsideration; and (2) the demand-letter of BIR Commissioner Ong to PNB, dated 16 January 1991.34
Despite the oppositions of PNOC and PNB, the CTA, in a Resolution, dated 02 May 1991, resolved to allow
private respondent Savellano to withdraw his previous Motion for Suspension of Proceeding and to admit the
supplementary evidence being offered by the same party.35
In its Order, dated 03 June 1991, the CTA considered the case submitted for decision as of the following day,
04 June 1991.36
On 11 June 1991, PNB appealed to the Department of Justice (DOJ) the BIR assessment, dated 16 January
1991, for deficiency withholding tax in the sum of P294,958,450.73. PNB alleged that its appeal to the DOJ
was sanctioned under P.D. No. 242, which provided for the administrative settlement of disputes between
government offices, agencies, and instrumentalities, including government-owned and controlled corporations.
37

Three days later, on 14 June 1991, PNB filed a Motion to Suspend Proceedings before the CTA since it had a
pending appeal before the DOJ.38 On 04 July 1991, PNB filed with the CTA a Motion for Reconsideration of its
Order, dated 03 June 1991, submitting the case for decision as of 04 June 1991, and prayed that the CTA hold
its resolution of the case in view of PNB's appeal pending before the DOJ.39
On 17 July 1991, PNB filed a Motion to Suspend the Collection of Tax by the BIR. It alleged that despite its
request for reconsideration of the deficiency withholding tax assessment, dated 16 January 1991, BIR
Commissioner Ong sent another letter, dated 23 April 1991, demanding payment of the P294,958,450.73
deficiency withholding tax on the interest earnings and/or yields from PNOC's money placements. The same
letter informed PNB that this was the BIR Commissioner's final decision on the matter and that the BIR
Commissioner was set to issue a warrant of distraint and/or levy against PNB's deposits with the Central Bank
of the Philippines. PNB further alleged that the levy and distraint of PNB's deposits, unless restrained by the
CTA, would cause great and irreparable prejudice not only to PNB, a government-owned and controlled
corporation, but also to the Government itself.40
Pursuant to the Order of the CTA, during the hearing on 19 July 1991,41 the parties submitted their respective
Memoranda on PNB's Motion to Suspend Proceedings.42
On 20 September 1991, private respondent Savellano filed another Omnibus Motion calling the attention of the
CTA to the fact that the BIR already issued, on 12 August 1991, a warrant of garnishment addressed to the
Central Bank Governor and against PNB. In compliance with the said warrant, the Central Bank issued, on 23
August 1991, a debit advice against the demand deposit account of PNB with the Central Bank for the amount
of P294,958,450.73, with a corresponding transfer of the same amount to the demand deposit-in-trust of BIR
with the Central Bank. Since the assessment had already been enforced, PNB's Motion to Suspend
Proceedings became moot and academic. Private respondent Savellano, thus, moved for the denial of PNB's
Motion to Suspend Proceedings and for an order requiring BIR to deposit with the CTA the amount of
P44,243,767.00 as his informer's reward, representing 15% of the deficiency withholding tax collected.43
Both PNOC and PNB opposed private respondent Savellano's Omnibus Motion, dated 20 September 1991,
arguing that the DOJ already ordered the suspension of the collection of the tax deficiency. There was
therefore no basis for private respondent Savellano's Motion as the same was premised on the erroneous
assumption that the tax deficiency had been collected. When the DOJ denied the BIR Commissioner's Motion
to Dismiss and required him to file his answer, the DOJ assumed jurisdiction over PNB's appeal, and the CTA
should first suspend its proceedings to give the DOJ the opportunity to decide the validity and propriety of the
tax assessment against PNB.44
The CTA, on 28 May 1992, rendered its decision, wherein it upheld its jurisdiction and disposed of the case as
follows:
WHEREFORE, judgment is rendered declaring the COMPROMISE AGREEMENT between the Bureau of
Internal Revenue, on the one hand, and the Philippine National Oil Company and Philippine National Bank, on
the other, as WITHOUT FORCE AND EFFECT;
The Commissioner of Internal Revenue is hereby ordered to ENFORCE the ASSESSMENT of January 16,
1991 against Philippine National Bank which has become final and unappealable by collecting from Philippine
National Bank the deficiency withholding tax, plus interest totalling (sic) P294,958,450.73;
Petitioner may be paid, upon collection of the deficiency withholding tax, the balance of his entitlement to
informer's reward based on fifteen percent (15%) of the deficiency withholding total tax collected in this case or
P44,243.767.00 subject to existing rules and regulations governing payment of reward to informers.45
In a Resolution, dated 16 November 1992, the CTA denied the Motions for Reconsideration filed by PNOC and
PNB since they substantially raised the same issues in their previous pleadings and which had already been
passed upon and resolved adversely against them.46
PNOC and PNB filed separate appeals with the Court of Appeals seeking the reversal of the CTA decision in
CTA Case No. 4249, dated 28 May 1992, and the CTA Resolution in the same case, dated 16 November
1992. PNOC's appeal was docketed as CA-G.R. SP No. 29583, while PNB's appeal was CA-G.R. SP No.
29526. In both cases, the Court of Appeals affirmed the decision of the CTA.
In the meantime, the Central Bank again issued on 02 September 1992 a debit advice against the demand
deposit account of PNB with the Central Bank for the amount of P294,958,450.73,47 and on 15 September
1992, credited the same amount to the demand deposit account of the Treasurer of the Republic of the
Philippines.48 On 04 November 1992, the Treasurer of the Republic issued a journal voucher transferring
P294,958,450.73 to the account of the BIR.49 PNB, in turn, debited P294,958,450.73 from the deposit account
of PNOC with PNB.50
PNOC and PNB then filed separate Petitions for Review on Certiorari with this Court, praying that the decisions
of the Court of Appeals in CA-G.R. SP No. 29583 and CA-G.R. SP No. 29526, respectively, both affirming the
decision of the CTA in CTA Case No. 4249, be reversed and set aside. These two Petitions were consolidated
since they involved identical parties and factual background, and the resolution of related, if not exactly, the
same issues.
In its Petition for Review, PNOC alleged the following errors committed by the Court of Appeals in CA-G.R. SP
No. 29583:
1. The Court of Appeals erred in holding that the deficiency taxes of PNOC could not be the subject of a
compromise under Executive Order No. 44; and
2. The Court of Appeals erred in holding that Savellano is entitled to additional informer's reward.51
PNB, in its own Petition for Review, assailed the decision of the Court of Appeals in CA-G.R. SP No. 29526,
assigning the following errors:
1. Respondent Court erred in not finding that the Court of Tax Appeals lacks jurisdiction on the controversy
involving BIR and PNB (both government instrumentalities) regarding the new assessment of BIR against
PNB;
2. The respondent Court erred in not finding that the Court of Tax Appeals has no jurisdiction to question the
compromise agreement entered into by the Commissioner of Internal Revenue; and
3. The respondent Court erred in not ruling that the Commissioner of Internal Revenue cannot unilaterally
annul tax compromises validly entered into by his predecessor.52
The decisions of the Court of Appeals in CA-GR SP No. 29583 and CA-G.R. SP No. 29526, affirmed the
decision of the CTA in CTA Case No. 4249. The resolution, therefore, of the assigned errors in the Court of
Appeals' decisions essentially requires a review of the CTA decision itself.
In consolidating the present Petitions, this Court finds that PNOC and PNB are basically questioning the (1)
Jurisdiction of the CTA in CTA Case No. 4249; (2) Declaration by the CTA that the compromise agreement was
without force and effect; (3) Finding of the CTA that the deficiency withholding tax assessment against PNB
had already become final and unappealable and, thus, enforceable; and (4) Order of the CTA directing
payment of additional informer's reward to private respondent Savellano.
I
Jurisdiction of the CTA
A. The demand letter, dated 16 January 1991 did not constitute a new assessment against PNB.
The main argument of PNB in assailing the jurisdiction of the CTA in CTA Case No. 4249 is that the BIR
demand letter, dated 16 January 1991,53 should be considered as a new assessment against PNB. As a new
assessment, it gave rise to a new dispute and controversy solely between the BIR and PNB that should be
administratively settled or adjudicated, as provided in P.D. No. 242.
This argument is without merit. The issuance by the BIR of the demand letter, dated 16 January 1991, was
merely a development in the continuing effort of the BIR to collect the tax assessed against PNOC and PNB
way back in 1986.
BIR's first letter, dated 08 August 1986, was addressed to PNOC, requesting it to settle its tax liability. The BIR
subsequently sent another letter, dated 08 October 1986, to PNB, as withholding agent, demanding payment of
the tax it had failed to withhold on the interest earnings and/or yields from PNOC's money placements. PNOC
wrote the BIR three succeeding letters offering to compromise its tax liability; PNB, on the other hand, did not
act on the demand letter it received, dated 08 October 1986. The BIR and PNOC eventually reached a
compromise agreement on 22 June 1987. Private respondent Savellano questioned the validity of the
compromise agreement because the reduced amount of tax collected from PNOC, by virtue of the compromise
agreement, also proportionately reduced his informer's reward. Private respondent Savellano then requested
the BIR Commissioner to review and reconsider the compromise agreement. Acting on the request of private
respondent Savellano, the new BIR Commissioner declared the compromise agreement to be without basis
and issued the demand letter, dated 16 January 1991, against PNB, as the withholding agent for PNOC.
It is clear from the foregoing that the BIR demand letter, dated 16 January 1991, could not stand alone as a
new assessment. It should always be considered in the factual context summarized above.
In fact, the demand letter, dated 16 January 1991, actually referred to the withholding tax assessment first
issued in 1986 and its eventual settlement through a compromise agreement. In addition, the computation of
the deficiency withholding tax was based on the figures from the 1986 assessments against PNOC and PNB,
and BIR no longer conducted a new audit or investigation of either PNOC and PNB before it issued the
demand letter on 16 January 1991.
These constant references to past events and circumstances demonstrate that the demand letter, dated 16
January 1991, was not a new assessment, but rather, the latest action taken by the BIR to collect on the tax
assessments issued against PNOC and PNB in 1986.
PNB argues that the demand letter, dated 16 January 1991, introduced a new controversy. We see it
differently as the said demand letter presented the resolution by BIR Commissioner Ong of the previous
controversy involving the compromise of the 1986 tax assessments. BIR Commissioner Ong explicitly
declared therein that the compromise agreement was without legal basis, and requested PNB, as the
withholding agent, to pay the amount of withholding tax still due.
B. The CTA correctly retained jurisdiction over CTA Case No. 4249 by virtue of Republic Act No. 1125.
Having established that the BIR demand letter, dated 16 January 1991, did not constitute a new assessment,
then, there could be no basis for PNB's claim that any dispute arising from the new assessment should only be
between BIR and PNB.
Still proceeding from the argument that there was a new dispute between PNB and BIR, PNB sought the
suspension of the proceedings in CTA Case No. 4249, after it contested the deficiency withholding tax
assessment against it and the demand for payment thereof before the DOJ, pursuant to P.D. No. 242. The
CTA, however, correctly sustained its jurisdiction and continued the proceedings in CTA Case No. 4249; and, in
effect, rejected DOJ's claim of jurisdiction to administratively settle or adjudicate BIR's assessment against
PNB.
The CTA assumed jurisdiction over the Petition for Review filed by private respondent Savellano based on the
following provision of Rep. Act No. 1125, the Act creating the Court of Tax Appeals:
SECTION 7. Jurisdiction. – The Court of Tax Appeals shall exercise exclusive appellate jurisdiction to review
by appeal, as herein provided -
(1) Decisions of the Collector of Internal Revenue in cases involving disputed assessments, refunds of
internal revenue taxes, fees or other charges, penalties imposed in relation thereto, or other matters arising
under the National Internal Revenue Code or other law or part of law administered by the Bureau of Internal
Revenue; . . . (Underscoring ours.)
In his Petition before the CTA, private respondent Savellano requested a review of the decisions of then BIR
Commissioner Tan to enter into a compromise agreement with PNOC and to reject his claim for additional
informer's reward. He submitted before the CTA questions of law involving the interpretation and application of
(1) E.O. No. 44, and its implementing rules and regulations, which authorized the BIR Commissioner to
compromise delinquent accounts and disputed assessments pending as of 31 December 1985; and (2)
Section 316(1) of the National Internal Revenue Code of 1977 (NIRC of 1977), as amended, which granted to
the informer a reward equivalent to 15% of the actual amount recovered or collected by the BIR.54 These
should undoubtedly be considered as matters arising from the NIRC and other laws being administered by the
BIR, thus, appealable to the CTA under Section 7(1) of Rep. Act No. 1125.
PNB, however, insists on the jurisdiction of the DOJ over its appeal of the deficiency withholding tax
assessment by virtue of P.D. No. 242. Provisions on jurisdiction of P.D. No. 242 read:
SECTION 1. Provisions of law to the contrary notwithstanding, all disputes, claims and controversies solely
between or among the departments, bureaus, offices, agencies, and instrumentalities of the National
Government, including government-owned or controlled corporations, but excluding constitutional offices or
agencies, arising from the interpretation and application of statutes, contracts or agreements, shall henceforth
be administratively settled or adjudicated as provided hereinafter; Provided, That this shall not apply to cases
already pending in court at the time of the effectivity of this decree.
SECTION 2. In all cases involving only questions of law, the same shall be submitted to and settled or
adjudicated by the Secretary of Justice, as Attorney General and ex officio legal adviser of all government-
owned or controlled corporations and entities, in consonance with Section 83 of the Revised Administrative
Code. His ruling or determination of the question in each case shall be conclusive and binding upon all the
parties concerned.
SECTION 3. Cases involving mixed questions of law and of fact or only factual issues shall be submitted to
and settled or adjudicated by:
(a) The Solicitor General, with respect to disputes or claims controversies between or among the departments,
bureaus, offices and other agencies of the National Government;
(b) The Government Corporate Counsel, with respect to disputes or claims or controversies between or
among government-owned or controlled corporations or entities being served by the Office of the Government
Corporate Counsel; and
(c) The Secretary of Justice, with respect to all other disputes or claims or controversies which do not fall
under the categories mentioned in paragraphs (a) and (b).
The PNB and DOJ are of the same position that P.D. No. 242, the more recent law, repealed Section 7(1) of
Rep. Act No. 1125,55 based on the pronouncement of this Court in Development Bank of the Philippines v.
Court of Appeals, et al., 56] quoted below:
The Court … expresses its entire agreement with the conclusion of the Court of Appeals — and the basic
premises thereof — that there is an "irreconcilable repugnancy…between Section 7(2) of R.A. No. 1125 and
P.D. No. 242," and hence, that the later enactment (P.D. No. 242), being the latest expression of the legislative
will, should prevail over the earlier.
In the said case, it was expressly declared that P.D. No. 242 repealed Section 7(2) of Rep. Act No. 1125, which
provides for the exclusive appellate jurisdiction of the CTA over decisions of the Commissioner of Customs.
PNB contends that P.D. No. 242 should be deemed to have likewise repealed Section 7(1) of Rep. Act No.
1125, which provide for the exclusive appellate jurisdiction of the CTA over decisions of the BIR Commissioner.
57

After re-examining the provisions on jurisdiction of Rep. Act No. 1125 and P.D. No. 242, this Court finds itself in
disagreement with the pronouncement made in Development Bank of the Philippines v. Court of Appeals, et
al.,58 and refers to the earlier case of Lichauco & Company, Inc. v. Apostol, et al.,59 for the guidelines in
determining the relation between the two statutes in question, to wit:
The cases relating to the subject of repeal by implication all proceed on the assumption that if the act of later
date clearly reveals an intention on the part of the law making power to abrogate the prior law, this intention
must be given effect; but there must always be a sufficient revelation of this intention, and it has become an
unbending rule of statutory construction that the intention to repeal a former law will not be imputed to the
Legislature when it appears that the two statutes, or provisions, with reference to which the question arises
bear to each other the relation of general to special. (Underscoring ours.)
When there appears to be an inconsistency or conflict between two statutes and one of the statutes is a
general law, while the other is a special law, then repeal by implication is not the primary rule applicable. The
following rule should principally govern instead:
Specific legislation upon a particular subject is not affected by a general law upon the same subject unless it
clearly appears that the provisions of the two laws are so repugnant that the legislators must have intended by
the later to modify or repeal the earlier legislation. The special act and the general law must stand together, the
one as the law of the particular subject and the other as the general law of the land. (Ex Parte United States,
226 U. S., 420; 57 L. ed., 281; Ex Parte Crow Dog, 109 U. S., 556; 27 L. ed., 1030; Partee vs. St. Louis & S. F.
R. Co., 204 Fed. Rep., 970.)
Where there are two acts or provisions, one of which is special and particular, and certainly includes the matter
in question, and the other general, which, if standing alone, would include the same matter and thus conflict
with the special act or provision, the special must be taken as intended to constitute an exception to the
general act or provision, especially when such general and special acts or provisions are contemporaneous, as
the Legislature is not to be presumed to have intended a conflict. (Crane v. Reeder and Reeder, 22 Mich., 322,
334; University of Utah vs. Richards, 77 Am. St. Rep., 928.)60
It has, thus, become an established rule of statutory construction that between a general law and a special law,
the special law prevails – Generalia specialibus non derogant.61
Sustained herein is the contention of private respondent Savellano that P.D. No. 242 is a general law that deals
with administrative settlement or adjudication of disputes, claims and controversies between or among
government offices, agencies and instrumentalities, including government-owned or controlled corporations. Its
coverage is broad and sweeping, encompassing all disputes, claims and controversies. It has been
incorporated as Chapter 14, Book IV of E.O. No. 292, otherwise known as the Revised Administrative Code of
the Philippines.62 On the other hand, Rep. Act No. 1125 is a special law63 dealing with a specific subject matter
– the creation of the CTA, which shall exercise exclusive appellate jurisdiction over the tax disputes and
controversies enumerated therein.
Following the rule on statutory construction involving a general and a special law previously discussed, then
P.D. No. 242 should not affect Rep. Act No. 1125. Rep. Act No. 1125, specifically Section 7 thereof on the
jurisdiction of the CTA, constitutes an exception to P.D. No. 242. Disputes, claims and controversies, falling
under Section 7 of Rep. Act No. 1125, even though solely among government offices, agencies, and
instrumentalities, including government-owned and controlled corporations, remain in the exclusive appellate
jurisdiction of the CTA. Such a construction resolves the alleged inconsistency or conflict between the two
statutes, and the fact that P.D. No. 242 is the more recent law is no longer significant.
Even if, for the sake of argument, that P.D. No. 242 should prevail over Rep. Act No. 1125, the present dispute
would still not be covered by P.D. No. 242. Section 1 of P.D. No. 242 explicitly provides that only disputes,
claims and controversies solely between or among departments, bureaus, offices, agencies, and
instrumentalities of the National Government, including constitutional offices or agencies, as well as
government-owned and controlled corporations, shall be administratively settled or adjudicated. While the BIR
is obviously a government bureau, and both PNOC and PNB are government-owned and controlled
corporations, respondent Savellano is a private citizen. His standing in the controversy could not be lightly
brushed aside. It was private respondent Savellano who gave the BIR the information that resulted in the
investigation of PNOC and PNB; who requested the BIR Commissioner to reconsider the compromise
agreement in question; and who initiated CTA Case No. 4249 by filing a Petition for Review.
In Bay View Hotel, Inc. v. Manila Hotel Workers' Union-PTGWO, et al.,64] this Court upheld the jurisdiction of
the Court of Industrial Relations over the ordinary courts and justified its decision in the following manner:
We are unprepared to break away from the teaching in the cases just adverted to. To draw a tenuous
jurisdictional line is to undermine stability in labor litigations. A piecemeal resort to one court and another gives
rise to multiplicity of suits. To force the employees to shuttle from one court to another to secure full redress is
a situation gravely prejudicial. The time to be lost, effort wasted, anxiety augmented, additional expense
incurred – these are considerations which weigh heavily against split jurisdiction. Indeed, it is more in keeping
with orderly administration of justice that all the causes of action here "be cognizable and heard by only one
court: the Court of Industrial Relations."
The same justification is used in the present case to reject DOJ's jurisdiction over the BIR and PNB, to the
exclusion of the other parties. The rights of all four parties in CTA Case No. 4249, namely the BIR, as the tax
collector; PNOC, the taxpayer; PNB, the withholding agent; and private respondent Savellano, the informer
claiming his reward; arose from the same factual background and were so closely interrelated, that a
pronouncement as to one would definitely have repercussions on the others. The ends of justice were best
served when the CTA continued to exercise its jurisdiction over CTA Case No. 4249. The CTA, which had
assumed jurisdiction over all the parties to the controversy, could render a comprehensive resolution of the
issues raised and grant complete relief to the parties.
II
Validity of the Compromise Agreement
A. PNOC could not apply for a compromise under E.O. No. 44 because its tax liability was not a delinquent
account or a disputed assessment as of 31 December 1985.
PNOC and PNB, on different grounds, dispute the decision of the CTA in CTA Case No. 4249 declaring the
compromise agreement between BIR and PNOC without force and effect.
PNOC asserts that the compromise agreement was in accordance with E.O. No. 44, and its implementing rules
and regulations, and should be binding upon the parties thereto.
E.O. No. 44 granted the BIR Commissioner or his duly authorized representatives the power to compromise
any disputed assessment or delinquent account pending as of 31 December 1985, upon the payment of an
amount equal to 30% of the basic tax assessed; in which case, the corresponding interests and penalties shall
be condoned. E.O. No. 44 took effect on 04 September 1986 and remained effective until 31 March 1987.
The disputed assessments or delinquent accounts that the BIR Commissioner could compromise under E.O.
No. 44 are defined under Revenue Regulation (RR) No. 17-86, as follows:
a) Delinquent account – Refers to the amount of tax due on or before December 31, 1985 from a taxpayer
who failed to pay the same within the time prescribed for its payment arising from (1) a self assessed tax,
whether or not a tax return was filed, or (2) a deficiency assessment issued by the BIR which has become final
and executory.
Where no return was filed, the taxpayer shall be considered delinquent as of the time the tax on such return
was due, and in availing of the compromise, a tax return shall be filed as a basis for computing the amount of
compromise to be paid.
b) Disputed assessment – refers to a tax assessment disputed or protested on or before December 31, 1985
under any of the following categories:
1) if the same is administratively protested within thirty (30) days from the date the taxpayer received the
assessment, or
2.) if the decision of the BIR on the taxpayer's administrative protest is appealed by the taxpayer before an
appropriate court.
PNOC's tax liability could not be considered a delinquent account since (1) it was not self-assessed, because
the BIR conducted an investigation and assessment of PNOC and PNB after obtaining information regarding
the non-withholding of tax from private respondent Savellano; and (2) the demand letter, issued against it on
08 August 1986, could not have been a deficiency assessment that became final and executory by 31
December 1985.
The dissenting opinion contends, however, that the tax liability of PNOC constitutes a self-assessed tax, and is,
therefore, a delinquent account as of 31 December 1985, qualifying for a compromise under E.O. No. 44. It
anchors its argument on the declaration made by this Court in Tupaz v. Ulep,65 that internal revenue taxes are
self-assessing.
It is not denied herein that the self-assessing system governs Philippine internal revenue taxes. The
dissenting opinion itself defines self-assessed tax as, "a tax that the taxpayer himself assesses or computes
and pays to the taxing authority." Clearly, such a system imposes upon the taxpayer the obligation to conduct
an assessment of himself so he could determine and declare the amount to be used as tax basis, any
deductions therefrom, and finally, the tax due.
E.O. No. 44 covers self-assessed tax, whether or not a tax return was filed. The phrase "whether or not a tax
return was filed" only refers to the compliance by the taxpayer with the obligation to file a return on the dates
specified by law, but it does not do away with the requisite that the tax must be self-assessed in order for the
taxpayer to avail of the compromise. The second paragraph of Section 2(a) of RR No. 17-86 expressly
commands, and still imposes upon the taxpayer, who is availing of the compromise under E.O. No. 44, and
who has not previously filed any return, the duty to conduct self-assessment by filing a tax return that would be
used as the basis for computing the amount of compromise to be paid.
Section 2(a)(1) of RR No. 17-86 thus involves a situation wherein a taxpayer, after conducting a self-
assessment, discovers or becomes aware that he had failed to pay a tax due on or before 31 December 1985,
regardless of whether he had previously filed a return to reflect such tax; voluntarily comes forward and admits
to the BIR his tax liability; and applies for a compromise thereof. In case the taxpayer has not previously filed
any return, he must fill out such a return reflecting therein his own declaration of the taxable amount and
computation of the tax due. The compromise payment shall be computed based on the amount reflected in the
tax return submitted by the taxpayer himself.
Neither PNOC nor PNB, the taxpayer and the withholding agent, respectively, conducted self-assessment in
this case. There is no showing that in the absence of the tax assessment issued by the BIR against them, that
PNOC and/or PNB would have voluntarily admitted their tax liabilities, already amounting to P385,961,580.82,
as of 15 November 1986, and would have offered to compromise the same. In fact, both PNOC and PNB were
conspicuously silent about their tax liabilities until they were assessed thereon.
Any attempt by PNOC and PNB to assess and declare by themselves their tax liabilities had already been
overtaken by the BIR's conduct of its audit and investigation and subsequent issuance of the assessments,
dated 08 August 1986 and 08 October 1986, against PNOC and PNB, respectively. The said tax assessments,
uncontested and undisputed, presented the results of the BIR audit and investigation and the computation of
the total amount of tax liabilities of PNOC and PNB. They should be controlling in this case, and should not be
so easily and conveniently ignored and set aside. It would be a contradiction to claim that the tax liabilities of
PNOC and PNB are self-assessed and, at the same time, BIR-assessed; when it is clear and simple that it had
been the BIR that conducted the assessment and determined the tax liabilities of PNOC and PNB.
That the BIR-assessed tax liability should be differentiated from a self-assessed one, is supported by the
provisions of RR No. 17-86 on the basis for computing the amount of compromise payment. Note that where
tax liabilities are self-assessed, the compromise payment shall be computed based on the tax return filed by
the taxpayer.66 On the other hand, where the BIR already issued an assessment, the compromise payment
shall be computed based on the tax due on the assessment notice.67
For instances where the BIR had already issued an assessment against the taxpayer, the tax liability could still
be compromised under E.O. No. 44 only if: (1) the assessment had been final and executory on or before 31
December 1985 and, therefore, considered a delinquent account as of said date;68 or (2) the assessment had
been disputed or protested on or before 31 December 1985.69
RMO No. 39-86, which provides the guidelines for the implementation of E.O. No. 44, does mention different
types of assessments that may be compromised under said statute (i.e., jeopardy assessments, arbitrary
assessments, and tax assessments of doubtful validity). RMO No. 39-86 may not have expressly stated any
qualification for these particular types of assessments; nonetheless, E.O. No. 44 specifically refers only to
assessments that were delinquent or disputed as of 31 December 1985.
E.O. No. 44 and all BIR issuances to implement said statute should be interpreted so that they are harmonized
and consistent with each other. Accordingly, this Court finds that the different types of assessments mentioned
in RMO No. 39-86 would still have to qualify as delinquent accounts or disputed assessments as of 31
Dcember 1985, so that they could be compromised under E.O. No. 44.
The BIR had first written to PNOC on 08 August 1986, demanding payment of the income tax on the interest
earnings and/or yields from PNOC's money placements with PNB from 15 October 1984 to 15 October 1986.
This demand letter could be regarded as the first assessment notice against PNOC.
Such an assessment, issued only on 08 August 1986, could not have been final and executory as of 31
December 1985 so as to constitute a delinquent account. Neither was the assessment against PNOC an
assessment that could have been disputed or protested on or before 31 December 1985, having been issued
on a later date.
Given that PNOC's tax liability did not constitute a delinquent account or a disputed assessment as of 31
December 1985, then it could not be compromised under E.O. No. 44.
The assessment against PNOC, instead, was more appropriately covered by Revenue Memorandum Circular
(RMC) No. 31-86. RMC No. 31-86 clarifies the scope of availment of the tax amnesty under E.O. No. 4170 and
compromise payments on delinquent accounts and disputed assessments under E.O. No. 44. The third
paragraph of RMC No. 31-86 reads:
[T]axpayers against whom assessments had been issued from January 1 to August 21, 1986 may settle their
tax liabilities by way of compromise under Section 246 of the Tax Code as amended by paying 30% of the
basic assessment excluding surcharge, interest, penalties and other increments thereto.
The above-quoted paragraph supports the position that only assessments that were disputed or that were final
and executory by 31 December 1985 could be the subject of a compromise under E.O. No. 44. Assessments
issued between 01 January to 21 August 1986 could still be compromised by payment of 30% of the basic tax
assessed, not anymore pursuant to E.O. No. 44, but pursuant to Section 246 of the NIRC of 1977, as
amended.
Section 246 of the NIRC of 1977, as amended, granted the BIR Commissioner the authority to compromise the
payment of any internal revenue tax under the following circumstances: (1) there exists a reasonable doubt as
to the validity of the claim against the taxpayer; or (2) the financial position of the taxpayer demonstrates a
clear inability to pay the assessed tax.71
There are substantial differences in circumstances under which compromises may be granted under Section
246 of the NIRC of 1977, as amended, and E.O. No. 44. Although PNOC and PNB have extensively argued
their entitlement to compromise under E.O. No. 44, neither of them has alleged, much less, has presented any
evidence to prove that it may compromise its tax liability under Section 246 of the NIRC of 1977, as amended.
B. The tax liability of PNB as withholding agent also did not qualify for compromise under E.O. No. 44.
Before proceeding any further, this Court reconsiders the conclusion made by BIR Commissioner Ong in his
demand letter, dated 16 January 1991, that the compromise settlement executed between the BIR and PNOC
was without legal basis because withholding taxes were not actually taxes that could be compromised, but a
penalty for PNB's failure to withhold and for which it was made personally liable.
E.O. No. 44 covers disputed or delinquency cases where the person assessed was himself the taxpayer rather
than a mere agent.72 RMO No. 39-86 expressly allows a withholding agent, who failed to withhold the required
tax because of neglect, ignorance of the law, or his belief that he was not required by law to withhold tax, to
apply for a compromise settlement of his withholding tax liability under E.O. No. 44. A withholding agent, in
such a situation, may compromise the withholding tax assessment against him precisely because he is being
held directly accountable for the tax.73
RMO No. 39-86 distinguishes between the withholding agent in the foregoing situation from the withholding
agent who withheld the tax but failed to remit the amount to the Government. A withholding agent in the latter
situation is the one disqualified from applying for a compromise settlement because he is being made
accountable as an agent, who held funds in trust for the Government.74
Both situations, however, involve withholding agents. The right to compromise under these provisions should
have been claimed by PNB, the withholding agent for PNOC. The BIR held PNB personally accountable for its
failure to withhold the tax on the interest earnings and/or yields from PNOC's money placements with PNB.
The BIR sent a demand letter, dated 08 October 1986, addressed directly to PNB, for payment of the
withholding tax assessed against it, but PNB failed to take any action on the said demand letter. Yet, all the
offers to compromise the withholding tax assessment came from PNOC and PNOC did not claim that it made
the offers to compromise on behalf of PNB.
Moreover, the general requirement of E.O. No. 44 still applies to withholding agents – that the withholding tax
liability must either be a delinquent account or a disputed assessment as of 31 December 1985 to qualify for
compromise settlement. The demand letter against PNB, which also served as its assessment notice, had
been issued on 08 October 1986 or two months later than PNOC's. PNB's withholding tax liability could not be
considered a delinquent account or a disputed assessment, as defined under RR No. 17-86, for the same
reasons that PNOC's tax liability did not constitute as such. The tax liability of PNB, therefore, was also not
eligible for compromise settlement under E.O. No. 44.
C. Even assuming arguendo that PNOC and/or PNB qualified under E.O. No. 44, their application for
compromise was filed beyond the deadline.
Despite already ruling that the tax liabilities of PNOC and PNB could not be compromised under E.O. No. 44,
this Court still deems it necessary to discuss the finding of the CTA that the compromise agreement had been
filed beyond the effectivity of E.O. No. 44, since the CTA made a declaration in relation thereto that paragraph
2 of RMO No. 39-86 was null and void for unduly extending the effectivity of E.O. No. 44.
Paragraph 2 of RMO No. 39-86 provides that:
2. Period for availment. – Filing of application for compromise settlement under the said law shall be effective
only until March 31, 1987. Applications filed on or before this date shall be valid even if the payment or
payments of the compromise amount shall be made after the said date, subject, however, to the provisions of
Executive Order No. 44 and its implementing Revenue Regulations No. 17-86.
It is well-settled in this jurisdiction that administrative authorities are vested with the power to make rules and
regulations because it is impracticable for the lawmakers to provide general regulations for various and varying
details of management. The interpretation given to a rule or regulation by those charged with its execution is
entitled to the greatest weight by the court construing such rule or regulation, and such interpretation will be
followed unless it appears to be clearly unreasonable or arbitrary.75
RMO No. 39-86, particularly paragraph 2 thereof, does not appear to be unreasonable or arbitrary. It does not
unduly expand the coverage of E.O. No. 44 by merely providing that applications for compromise filed until 31
March 1987 are still valid, even if payment of the compromised amount is made on a later date.
It cannot be expected that the compromise allowed under E.O. No. 44 can be automatically granted upon mere
filing of the application by the taxpayer. Irrefutably, the applications would still have to be processed by the BIR
to determine compliance with the requirements of E.O. No. 44. As it is uncontested that a taxpayer could still
file an application for compromise on 31 March 1987, the very last day of effectivity of E.O. No. 44, it would be
unreasonable to expect the BIR to process and approve the taxpayer's application within the same date
considering the volume of applications filed and pending approval, plus the other matters the BIR personnel
would also have to attend to. Thus, RMO No. 39-86 merely assures the taxpayers that their applications would
still be processed and could be approved on a later date. Payment, of course, shall be made by the taxpayer
only after his application had been approved and the compromised amount had been determined.
Given that paragraph 2 of RMO No. 39-86 is valid, the next question that needs to be addressed is whether
PNOC had been able to submit an application for compromise on or before 31 March 1987 in compliance
thereof. Although the compromise agreement was executed only on 22 June 1987, PNOC is claiming that it
had already written a letter to the BIR, as early as 25 September 1986, offering to compromise its tax liability,
and that the said letter should be considered as PNOC's application for compromise settlement.
A perusal of PNOC's letter, dated 25 September 1986, would reveal, however, that the terms of its proposed
compromise did not conform to those authorized by E.O. No. 44. PNOC did not offer to pay outright 30% of
the basic tax assessed against it as required by E.O. No. 44; and instead, made the following offer:
(2) That PNOC be permitted to set-off its foregoing mentioned tax liability of P304,419,396.83 against the tax
refund/credit claims of the National Power Corporation (NPC) for specific taxes on fuel oil sold to NPC totaling
P335,259,450.21, which tax refunds/credits are actually receivable accounts of our Company from NPC.76
PNOC reiterated the offer in its letter to the BIR, dated 14 October 1986.77 The BIR, in its letters to PNOC,
dated 8 October 198678 and 11 November 1986,79 consistently denied PNOC's offer because the claim for tax
refund/credit of NAPOCOR was still under process, so that the offer to set-off such claim against PNOC's tax
liability was premature.
Furthermore, E.O. No. 44 does not contemplate compromise payment by set-off of a tax liability against a
claim for tax refund/credit. Compromise under E.O. No. 44 may be availed of only in the following
circumstances:
SEC. 3. Who may avail. – Any person, natural or juridical, may settle thru a compromise any delinquent
account or disputed assessment which has been due as of December 31, 1985, by paying an amount equal
to thirty percent (30%) of the basic tax assessed.

SEC. 6. Mode of Payment. – Upon acceptance of the proposed compromise, the amount offered as
compromise in complete settlement of the delinquent account shall be paid immediately in cash or
manager's certified check.
Deferred or staggered payments of compromise amounts over P50,000 may be considered on a case to case
basis in accordance with the extant regulations of the Bureau upon approval of the Commissioner of Internal
Revenue, his Deputy or Assistant as delineated in their respective jurisdictions.
If the Compromise amount is not paid as required herein, the compromise agreement is automatically nullified
and the delinquent account reverted to the original amount plus the statutory increments, which shall be
collected thru the summary and/or judicial processes provided by law.
E.O. No. 44 is not for the benefit of the taxpayer alone, who can extinguish his tax liability by paying the
compromise amount equivalent to 30% of the basic tax. It also benefits the Government by making collection
of delinquent accounts and disputed assessments simpler, easier, and faster. Payment of the compromise
amount must be made immediately, in cash or in manager's check. Although deferred or staggered payments
may be allowed on a case-to-case basis, the mode of payment remains unchanged, and must still be made
either in cash or in manager's check.
PNOC's offer to set-off was obviously made to avoid actual cash-out by the company. The offer defeated the
purpose of E.O. No. 44 because it would not only delay collection, but more importantly, it would not guarantee
collection. First of all, BIR's collection was contingent on whether the claim for tax refund/credit of NAPOCOR
would be subsequently granted. Second, collection could not be made immediately and would have to wait
until the resolution of the claim for tax refund/credit of NAPOCOR. Third, there is no proof, other than the bare
allegation of PNOC, that NAPOCOR's claim for tax refund/credit is an account receivable of PNOC. A possible
dispute between NAPOCOR and PNOC as to the proceeds of the tax refund/credit would only delay collection
by the BIR even further.
It was only in its letter, dated 09 June 1987, that PNOC actually offered to compromise its tax liability in
accordance with the terms and circumstances prescribed by E.O. No. 44 and its implementing rules and
regulations, by stating that:
Consequently, we reiterate our previous request for compromise under E.O. No. 44, and convey our
preparedness to settle the subject tax assessment liability by payment of the compromise amount of
P91,003,129.89, representing thirty percent (30%) of the basic tax assessment of P303,343,766.29, in
accordance with E.O. No. 44 and its implementing BIR Revenue Memorandum Order No. 39-86.80
PNOC claimed in the same letter that it had previously requested for a compromise under the terms of E.O.
No. 44, but this Court could not find evidence of such previous request. There are stark and substantial
differences in the terms of PNOC's offer to compromise in its earlier letters, dated 25 September 1986 and 14
October 1986 (set-off of the entire amount of its tax liability against the claim for tax refund/credit of
NAPOCOR), to those in its letter, dated 09 June 1987 (payment of the compromise amount representing 30%
of the basic tax assessed against it), making it difficult for this Court to accept that the letter of 09 June 1987
merely reiterated PNOC's offer to compromise in its earlier letters.
This Court likewise cannot give credence to PNOC's allegation that beginning 25 September 1986, the date of
its first letter to the BIR, there were continuing negotiations between PNOC and BIR that culminated in the
compromise agreement on 22 June 1987. Aside from the exchange of letters recounted in the preceding
paragraphs, both PNOC and PNB failed to present any other proof of the supposed negotiations.
After the BIR denied the second offer of PNOC to set-off its tax liability against the claim for tax refund/credit of
NAPOCOR in a letter, dated 11 November 1986, there is no other evidence of subsequent communication
between PNOC and the BIR. It was only after almost seven months, or on 09 June 1987, that PNOC again
wrote a letter to the BIR, this time offering to pay the compromise amount of 30% of the basic tax assessed
against. This letter was already filed beyond 31 March 1987, after the lapse of the effectivity of E.O. No. 44
and the deadline for filing applications for compromise under the said statute.
Evidence of meetings between PNOC and the BIR, or any other form of communication, wherein the parties
presented their offer and counter-offer to the other, would have been very valuable in explaining and
supporting BIR Commissioner Tan's decision to accept PNOC's third offer to compromise after denying the
previous two. The absence of such evidence herein negates PNOC's claim of actual negotiations with the BIR.
Therefore, even assuming arguendo that the tax liabilities of PNOC and PNB qualify as delinquent accounts or
disputed assessments as of 31 December 1985, the application for compromise filed by PNOC on 09 June
1987, and accepted by then BIR Commissioner Tan on 22 June 1987, was still filed way beyond 31 March
1987, the expiration date of the effectivity of E.O. No. 44 and the deadline for filing of applications for
compromise under RMO No. 39-86.
D. The BIR Commissioner's discretionary authority to enter into a compromise agreement is not absolute and
the CTA may inquire into allegations of abuse thereof.
The foregoing discussion supports the CTA's conclusion that the compromise agreement between PNOC and
the BIR was indeed without legal basis. Despite this lack of legal support for the execution of the said
compromise agreement, PNB argues that the CTA still had no jurisdiction to review and set aside the
compromise agreement. It contends that the authority to compromise is purely discretionary on the BIR
Commissioner and the courts cannot interfere with his exercise thereof.
It is generally true that purely administrative and discretionary functions may not be interfered with by the
courts; but when the exercise of such functions by the administrative officer is tainted by a failure to abide by
the command of the law, then it is incumbent on the courts to set matters right, with this Court having the last
say on the matter.81
The manner by which BIR Commissioner Tan exercised his discretionary power to enter into a compromise
was brought under the scrutiny of the CTA amidst allegations of "grave abuse of discretion and/or whimsical
exercise of jurisdiction."82 The discretionary power of the BIR Commissioner to enter into compromises cannot
be superior over the power of judicial review by the courts.
The discretionary authority to compromise granted to the BIR Commissioner is never meant to be absolute,
uncontrolled and unrestrained. No such unlimited power may be validly granted to any officer of the
government, except perhaps in cases of national emergency.83 In this case, the BIR Commissioner's authority
to compromise, whether under E.O. No. 44 or Section 246 of the NIRC of 1977, as amended, can only be
exercised under certain circumstances specifically identified in said statutes. The BIR Commissioner would
have to exercise his discretion within the parameters set by the law, and in case he abuses his discretion, the
CTA may correct such abuse if the matter is appealed to them.84
Petitioners PNOC and PNB both contend that BIR Commissioner Tan merely exercised his authority to enter
into a compromise specially granted by E.O. No. 44. Since this Court has already made a determination that
the compromise agreement did not qualify under E.O. No. 44, BIR Commissioner Tan's decision to agree to the
compromise should have been reviewed in the light of the general authority granted to the BIR Commissioner
to compromise taxes under Section 246 of the NIRC of 1977, as amended. Then again, petitioners PNOC and
PNB failed to allege, much less present evidence, that BIR Commissioner Tan acted in accordance with
Section 246 of the NIRC of 1977, as amended, when he entered into the compromise agreement with PNOC.
E. The CTA may set aside a compromise agreement that is contrary to law and public policy.
PNB also asserts that the CTA had no jurisdiction to set aside a compromise agreement entered into in good
faith. It relies on the decision of this Court in Republic v. Sandiganbayan85 that a compromise agreement
cannot be set aside merely because it is too one-sided. A compromise agreement should be respected by the
courts as the res judicata between the parties thereto.
This Court, though, finds that there are substantial differences in the factual background of Republic v.
Sandiganbayan and the present case.
The compromise agreement executed between the Presidential Commission on Good Government (PCGG)
and Roberto S. Benedicto in Republic v. Sandiganbayan was judicially approved by the Sandiganbayan. The
Sandiganbayan had ample opportunity to examine the validity of the compromise agreement since two years
elapsed from the time the agreement was executed up to the time it was judicially approved. This Court even
stated in the said case that, "We are not dealing with the usual compromise agreement perfunctorily submitted
to a court and approved as a matter of course. The PCGG-Benedicto agreement was thoroughly and, at times,
disputatiously discussed before the respondent court. There could be no deception or misrepresentation
foisted on either the PCGG or the Sandiganbayan."86
In addition, the new PCGG Chairman originally prayed for the re-negotiation of the compromise agreement so
that it could be more just, fair, and equitable, an action considered by this Court as an implied admission that
the agreement was not contrary to law, public policy or morals nor was there any circumstance which had
vitiated consent.87
The above-mentioned circumstances strongly supported the validity of the compromise agreement in Republic
v. Sandiganbayan, which was why this Court refused to set it aside. Unfortunately for the petitioners in the
present case, the same cannot be said herein.
The Court of Appeals, in upholding the jurisdiction of the CTA to set aside the compromise agreement, ruled
that:
We are unable to accept petitioner's submissions. Its formulation of the issues on CIR and CTA's lack of
jurisdiction to disturb a compromise agreement presupposes a compromise agreement validly entered into by
the CIR and not, when as in this case, it was indubitably shown that the supposed compromise agreement is
without legal support. In case of arbitrary or capricious exercise by the Commissioner or if the proceedings
were fatally defective, the compromise can be attacked and reversed through the judicial process (Meralco
Securities Corporation v. Savellano, 117 SCRA 805, 812 [1982]; Sarah E. Ramsay, et. al. v. U.S. 21 Ct. C1
443, aff'd 120 U.S. 214, 30 L. Ed. 582; Tyson v. U.S., 39 F. Supp. 135 cited in page 18 of decision) ….88
Although the general rule is that compromises are to be favored, and that compromises entered into in good
faith cannot be set aside,89 this rule is not without qualification. A court may still reject a compromise or
settlement when it is repugnant to law, morals, good customs, public order, or public policy.90
The compromise agreement between the BIR and PNOC was contrary to law having been entered into by BIR
Commissioner Tan in excess or in abuse of the authority granted to him by legislation. E.O. No. 44 and the
NIRC of 1977, as amended, had identified the situations wherein the BIR Commissioner may compromise tax
liabilities, and none of these situations existed in this case.
The compromise, moreover, was contrary to public policy. The primary duty of the BIR is to collect taxes, since
taxes are the lifeblood of the Government and their prompt and certain availability are imperious needs.91 In the
present case, however, BIR Commissioner Tan, by entering into the compromise agreement that was bereft of
any legal basis, would have caused the Government to lose almost P300 million in tax revenues and would
have deprived the Government of much needed monetary resources.
Allegations of good faith and previous execution of the terms of the compromise agreement on the part of
PNOC would not be enough for this Court to disregard the demands of law and public policy. Compromise
may be the favored method to settle disputes, but when it involves taxes, it may be subject to closer scrutiny by
the courts. A compromise agreement involving taxes would affect not just the taxpayer and the BIR, but also
the whole nation, the ultimate beneficiary of the tax revenues collected.
F. The Government cannot be estopped from collecting taxes by the mistake, negligence, or omission of its
agents.
The new BIR Commissioner, Commissioner Ong, had acted well within his powers when he set aside the
compromise agreement, dated 22 June 1987, after finding that the said compromise agreement was without
legal basis. When he took over from his predecessor, there was still a pending motion for reconsideration of
the said compromise agreement, filed by private respondent Savellano on 24 March 1988. To resolve the said
motion, he reviewed the compromise agreement and, thereafter, came upon the conclusion that it did not
comply with E.O. No. 44 and its implementing rules and regulations.
It had been declared by this Court in Hilado v. Collector of Internal Revenue, et al.,92 that an administrative
officer, such as the BIR Commissioner, may revoke, repeal or abrogate the acts or previous rulings of his
predecessor in office. The construction of a statute by those administering it is not binding on their successors
if, thereafter, the latter becomes satisfied that a different construction should be given.
It is evident in this case that the new BIR Commissioner, Commissioner Ong, construed E.O. No. 44 and its
implementing rules and regulations differently from that of his predecessor, former Commissioner Tan, which
led to Commissioner Ong's revocation of the BIR approval of the compromise agreement, dated 22 June
1987. Such a revocation was only proper considering that the former BIR Commissioner's decision to approve
the said compromise agreement was based on the erroneous construction of the law (i.e., E.O. No. 44 and its
implementing rules and regulations) and should not give rise to any vested right on PNOC.93
Furthermore, approval of the compromise agreement and acceptance of the compromise payment by his
predecessor cannot estop BIR Commissioner Ong from setting aside the compromise agreement, dated 22
June 1987, for lack of legal basis; and from demanding payment of the deficiency withholding tax from PNB.
As a general rule, the Government cannot be estopped from collecting taxes by the mistake, negligence, or
omission of its agents94 because:
. . . Upon taxation depends the Government ability to serve the people for whose benefit taxes are collected.
To safeguard such interest, neglect or omission of government officials entrusted with the collection of taxes
should not be allowed to bring harm or detriment to the people, in the same manner as private persons may be
made to suffer individually on account of his own negligence, the presumption being that they take good care
of their personal affairs. This should not hold true to government officials with respect to matters not of their
own personal concern. This is the philosophy behind the government's exception, as a general rule, from the
operation of the principle of estoppel. (Republic vs. Caballero, L-27437, September 30, 1977, 79 SCRA 177;
Manila Lodge No. 761, Benevolent and Protective Order of the Elks, Inc. vs. Court of Appeals, L-41001,
September 30, 1976, 73 SCRA 162; Sy vs. Central Bank of the Philippines, L-41480, April 30, 1976, 70 SCRA
571; Balmaceda vs. Corominas & Co., Inc., 66 SCRA 553; Auyong Hian vs. Court of Tax Appeals, 59 SCRA
110; Republic vs. Philippine Rabbit Bus Lines, Inc., 66 SCRA 553; Republic vs. Philippine Long Distance
Telephone Company, L-18841, January 27, 1969, 26 SCRA 620; Zamora vs. Court of Tax Appeals, L-23272,
November 26, 1970, 36 SCRA 77; E. Rodriguez, Inc. vs. Collector of Internal Revenue, L-23041, July 31,
1969, 28 SCRA 119).95
III
Finality of the Tax Assessment
A. The issue on whether the BIR complied with the notice requirements under RR No. 12-85 is raised for the
first time on appeal and should not be given due course.
PNB, in another effort to block the collection of the deficiency withholding tax, this time raises doubts as to the
validity of the deficiency withholding tax assessment issued against it on 16 January 1991. It submits that the
BIR failed to comply with the notice requirements set forth in RR No. 12-85.96
Whether or not the BIR complied with the notice requirements of RR No. 12-85 is a new issue raised by PNB
only before this Court. Such a question has not been ventilated before the lower courts. For an appellate
tribunal to consider a legal question, it should have been raised in the court below.97 If raised earlier, the matter
would have been seriously delved into by the CTA and the Court of Appeals.98
B. The assessment against PNB had become final and unappealable, and therefore, enforceable.
The CTA and the Court of Appeals declared as final and unappealable, and thus, enforceable, the assessment
against PNB, dated 16 January 1991, since PNB failed to protest said assessment within the 30-day
prescribed period. This Court, though, finds that the significant BIR assessment, as far as this case is
concerned, should be the one issued by the BIR against PNB on 08 October 1986.
The BIR issued on 08 October 1986 an assessment against PNB for its withholding tax liability on the interest
earnings and/or yields from PNOC's money placements with the bank. It had 30 days from receipt to protest
the BIR's assessment.99 PNB, however, did not take any action as to the said assessment so that upon the
lapse of the period to protest, the withholding tax assessment against it, dated 8 October 1986, became final
and unappealable, and could no longer be disputed.100 The courts may therefore order the enforcement of this
assessment.
It is the enforcement of this BIR assessment against PNB, dated 08 October 1986, that is in issue in the instant
case. If the compromise agreement is valid, it would effectively bar the BIR from enforcing the assessment
and collecting the assessed tax; on the other hand, if the compromise agreement is void, then the courts can
order the BIR to enforce the assessment and collect the assessed tax.
As has been previously discussed by this Court, the BIR demand letter, dated 16 January 1991, is not a new
assessment against PNB. It only demanded from PNB the payment of the balance of the withholding tax
assessed against it on 08 October 1986. The same demand letter also has no substantial effect or impact on
the resolution of the present case. It is already unnecessary and superfluous, having been issued by the BIR
when CTA Case No. 4249 was already pending before the CTA. At best, the demand letter, dated 16 January
1991, constitute a useful reference for the courts in computing the balance of PNB's tax liability, after applying
as partial payment thereon the amount previously received by the BIR from PNOC pursuant to the compromise
agreement.
IV
Prescription
A. The defense of prescription was never raised by petitioners PNOC and PNB, and should be considered
waived.
The dissenting opinion takes the position that the right of the BIR to assess and collect income tax on the
interest earnings and/or yields from PNOC's money placements with PNB, particularly for taxable year 1985,
had already prescribed, based on Section 268 of the NIRC of 1977, as amended.
Section 268 of the NIRC of 1977, as amended, provides a three-year period of limitation for the assessment
and collection of internal revenue taxes, which begins to run after the last day prescribed for filing of the return.
101

The dissenting opinion points out that more than four years have elapsed from 25 January 1986 (the last day
prescribed by law for PNB to file its withholding tax return for the fourth quarter of 1985) to 16 January 1991
(the date when the alleged final assessment of PNB's tax liability was issued).
The issue of prescription, however, was brought up only in the dissenting opinion and was never raised by
PNOC and PNB in the proceedings before the BIR nor in any of their pleadings submitted to the CTA and the
Court of Appeals.
Section 1, Rule 9 of the Rules of Civil Procedure lays down the rule on defenses and objections not pleaded,
and reads:
SECTION 1. Defenses and objections not pleaded. – Defenses and objections not pleaded either in a motion
to dismiss or in the answer are deemed waived. However, when it appears from the pleadings or the evidence
on record that the court has no jurisdiction over the subject matter, that there is another action pending
between the parties for the same cause, or that the action is barred by prior judgment or by the statute of
limitations, the court shall dismiss the claim.
The general rule enunciated in the above-quoted provision governs the present case, that is, the defense of
prescription, not pleaded in a motion to dismiss or in the answer, is deemed waived. The exception in same
provision cannot be applied herein because the pleadings and the evidence on record do not sufficiently show
that the action is barred by prescription.
It has been consistently held in earlier tax cases that the defense of prescription of the period for the
assessment and collection of tax liabilities shall be deemed waived when such defense was not properly
pleaded and the facts alleged and evidences submitted by the parties were not sufficient to support a finding
by this Court on the matter.102 In Querol v. Collector of Internal Revenue,103 this Court pronounced that
prescription, being a matter of defense, imposes the burden on the taxpayer to prove that the full period of the
limitation has expired; and this requires him to positively establish the date when the period started running
and when the same was fully accomplished.
In making its conclusion that the assessment and collection in this case had prescribed, the dissenting opinion
took liberties to assume the following facts even in the absence of allegations and evidences to the effect that:
(1) PNB filed returns for its withholding tax obligations for taxable year 1985; (2) PNB reported in the said
returns the interest earnings of PNOC's money placements with the bank; and (3) that the returns were filed on
or before the prescribed date, which was 25 January 1986.
It is not safe to adopt the first and second assumptions in this case considering that Section 269 of the NIRC of
1977, as amended, provides for a different period of limitation for assessment and collection of taxes in case of
false or fraudulent return or for failure to file a return. In such cases, the BIR is given 10 years after discovery
of the falsity, fraud, or omission within which to make an assessment.104
It is also not safe to accept the third assumption since there can be a possibility that PNB filed the withholding
tax return later than the prescribed date, in which case, following the dictates of Section 268 of the NIRC of
1977, as amended, the three-year prescriptive period shall be counted from the date the return was actually
filed.105
PNB's withholding tax returns for taxable year 1985, duly received by the BIR, would have been the best
evidence to prove actual filing, the date of filing and the contents thereof. These facts are relevant in
determining which prescriptive period should apply, and when such prescriptive period should begin to run and
when it had lapsed. Yet, the pleadings did not refer to any return, and no return was made part of the records
of the present case.
This Court could not make a proper ruling on the matter of prescription on the mere basis of assumptions; such
an issue should have been properly raised, argued, and supported by evidences submitted by the parties
themselves before the BIR and the courts below.
B. Granting that this Court can take cognizance of the defense of prescription, this Court finds that the
assessment of the withholding tax liability against PNOC and collection of the tax assessed were done within
the prescriptive period.
Assuming, for the sake of argument, that this Court can give due course to the defense of prescription, it finds
that the assessment against PNB for its withholding tax liability for taxable year 1985 and the collection of the
tax assessed therein were accomplished within the prescribed periods for assessment and collection under the
NIRC of 1977, as amended.
If this Court adopts the assumption made by the dissenting opinion that PNB filed its withholding tax return for
the last quarter of 1985 on 25 January 1986, then the BIR had until 24 January 1989 to assess PNB. The
original assessment against PNB was issued as early as 08 October 1986, well-within the three-year
prescriptive period for making the assessment as prescribed by the following provisions of the NIRC of 1977,
as amended:
SEC. 268. Period of limitation upon assessment and collection. – Except as provided in the succeeding
section, internal revenue taxes shall be assessed within three years after the last day prescribed by law for the
filing of the return, and no proceeding in court without assessment for the collection of such taxes shall be
begun after the expiration of such period…
SEC. 269. Exceptions as to period of limitation of assessment and collection of taxes. –

(c) Any internal revenue tax which has been assessed within the period of limitation above-prescribed may be
collected by distraint or levy or by a proceeding in court within three years following the assessment of the tax.
Sections 268 and 269(c) of the NIRC of 1977, as amended, should be read in conjunction with one another.
Section 268 requires that assessment be made within three years from the last day prescribed by law for the
filing of the return. Section 269(c), on the other hand, provides that when an assessment is issued within the
prescribed period provided in Section 268, the BIR has three years, counted from the date of the assessment,
to collect the tax assessed either by distraint, levy or court action. Therefore, when an assessment is timely
issued in accordance with Section 268, the BIR is given another three-year period, under Section 269(c), within
which to collect the tax assessed, reckoned from the date of the assessment.
In the case of PNB, an assessment was issued against it by the BIR on 08 October 1986, so that the BIR had
until 07 October 1989 to enforce it and to collect the tax assessed. The filing, however, by private respondent
Savellano of his Amended Petition for Review before the CTA on 02 July 1988 already constituted a judicial
action for collection of the tax assessed which stops the running of the three-year prescriptive period for
collection thereof.
A judicial action for the collection of a tax may be initiated by the filing of a complaint with the proper regular
trial court; or where the assessment is appealed to the CTA, by filing an answer to the taxpayer's petition for
review wherein payment of the tax is prayed for.106
The present case is unique, however, because the Petition for Review was filed by private respondent
Savellano, the informer, against the BIR, PNOC, and PNB. The BIR, the collecting government agency;
PNOC, the taxpayer; and PNB, the withholding agent, initially found themselves on the same side. The prayer
in the Amended Petition for Review of private respondent Savellano reads:
WHEREFORE, in view of the foregoing, petitioner respectfully prays that the compromise agreement of June
22, 1987 be reviewed and declared null and void, and that this Court directs:
a) respondent Commissioner to enforce and collect and respondents PNB and/or PNOC to pay in a joint and
several capacity, the total tax liability of P387,987,785.73, plus interests from 31 October 1986; and
b) respondent Commissioner to pay unto petitioner, as informer's reward, 15% of the tax liability collected
under clause (a) hereof.
Other equitable reliefs under the premises are likewise prayed for.107 (Underscoring ours.)
Private respondent Savellano, in his Amended Petition for Review in CTA Case No. 4249, prayed for (1) the
CTA to direct the BIR Commissioner to enforce and collect the tax, and (2) PNB and/or PNOC to pay the tax –
making CTA Case No. 4249 a collection case. That the Amended Petition for Review was filed by the informer
and not the taxpayer; and that the prayer for the enforcement of the tax assessment and payment of the tax
was also made by the informer, not the BIR, should not affect the nature of the case as a judicial action for
collection. In case the CTA grants the Petition and the prayer therein, as what has happened in the present
case, the ultimate result would be the collection of the tax assessed. Consequently, upon the filing of the
Amended Petition for Review by private respondent Savellano, judicial action for collection of the tax had been
initiated and the running of the prescriptive period for collection of the said tax was terminated.
Supposing that CTA Case No. 4249 is not a collection case which stops the running of the prescriptive period
for the collection of the tax, CTA Case No. 4249, at the very least, suspends the running of the said prescriptive
period. Under Section 271 of the NIRC of 1977, as amended, the running of the prescriptive period to collect
deficiency taxes shall be suspended for the period during which the BIR Commissioner is prohibited from
beginning a distraint or levy or instituting a proceeding in court, and for 60 days thereafter.108 Just as in the
cases of Republic v. Ker & Co., Ltd.109 and Protector's Services, Inc. v. Court of Appeals,110 this Court declares
herein that the pendency of the present case before the CTA, the Court of Appeals and this Court, legally
prevents the BIR Commissioner from instituting an action for collection of the same tax liabilities assessed
against PNOC and PNB in the CTA or the regular trial courts. To rule otherwise would be to violate the judicial
policy of avoiding multiplicity of suits and the rule on lis pendens.
Once again, that CTA Case No. 4249 was initiated by private respondent Savellano, the informer, instead of
PNOC, the taxpayer, or PNB, the withholding agent, would not prevent the suspension of the running of the
prescriptive period for collection of the tax. What is controlling herein is the fact that the BIR Commissioner
cannot file a judicial action in any other court for the collection of the tax because such a case would
necessarily involve the same parties and involve the same issues already being litigated before the CTA in CTA
Case No. 4249. The three-year prescriptive period for collection of the tax shall commence to run only after
the promulgation of the decision of this Court in which the issues of the present case are resolved with finality.
Whether the filing of the Amended Petition for Review by private respondent Savellano entirely stops or merely
suspends the running of the prescriptive period for collection of the tax, it had been premature for the BIR
Commissioner to issue a writ of garnishment against PNB on 12 August 1991 and for the Central Bank of the
Philippines to debit the account of PNB on 02 September 1992 pursuant to the said writ, because the case was
by then, pending review by the Court of Appeals. However, since this Court already finds that the compromise
agreement is without force and effect and hereby orders the enforcement of the assessment against PNB,
then, any issue or controversy arising from the premature garnishment of PNB's account and collection of the
tax by the BIR has become moot and academic at this point.
V
Additional Informer's Reward
Private respondent Savellano is entitled to additional informer's reward since the BIR had already collected the
full amount of the tax assessment against PNB.
PNOC insists that private respondent Savellano is not entitled to additional informer's reward because there
was no voluntary payment of the withholding tax liability. PNOC, however, fails to state any legal basis for its
argument.
Section 316(1) of the NIRC of 1977, as amended, granted a reward to an informer equivalent to 15% of the
revenues, surcharges, or fees recovered, plus, any fine or penalty imposed and collected.111 The provision was
clear and uncomplicated – an informer was entitled to a reward of 15% of the total amount actually recovered
or collected by the BIR based on his information. The provision did not make any distinction as to the manner
the tax liability was collected – whether it was through voluntary payment by the taxpayer or through
garnishment of the taxpayer's property. Applicable herein is another well-known maxim in statutory
construction – Ubi lex non distinguit nec nos distinguere debemos – when the law does not distinguish, we
should not distinguish.112
Pursuant to the writ of garnishment issued by the BIR, the Central Bank issued a debit advice against the
demand deposit account of PNB with the Central Bank for the amount of P294,958,450.73, and credited the
same amount to the demand deposit account of the Treasurer of the Republic of the Philippines. The
Treasurer of the Republic, in turn, already issued a journal voucher transferring P294,958,450.73 to the
account of the BIR.
Since the BIR had already collected P294,958,450.73 from PNB through the execution of the writ of
garnishment over PNB's deposit with the Central Bank, then private respondent Savellano should be awarded
15% thereof as reward since the said collection could still be traced to the information he had given.
WHEREFORE, in view of the foregoing, the Petitions of PNOC and PNB in G.R. No. 109976 and G.R. No.
112800, respectively, are hereby DENIED. This Court AFFIRMS the assailed Decisions of the Court of
Appeals in CA-G.R. SP No. 29583 and CA-G.R. SP No. 29526, which affirmed the decision of the CTA in CTA
Case No. 4249, with modifications, to wit:
(1) The compromise agreement between PNOC and the BIR, dated 22 June 1987, is declared void for being
contrary to law and public policy, and is without force and effect;
(2)Paragraph 2 of RMO No. 39-86 remains a valid provision of the regulation;
(3)The withholding tax assessment against PNB, dated 08 October 1986, had become final and unappealable.
The BIR Commissioner is ordered to enforce the said assessment and collect the amount of P294,958,450.73,
the balance of tax assessed after crediting the previous payment made by PNOC pursuant to the compromise
agreement, dated 22 June 1987; and
(4) Private respondent Savellano shall be paid the remainder of his informer's reward, equivalent to 15% of
the deficiency withholding tax ordered collected herein, or P 44,243,767.61.
SO ORDERED.
Quisumbing, Sandoval-Gutierrez, Austria-Martinez, Callejo, Sr., and Garcia, JJ., concur.
Davide, Jr., C.J., Corona, and Carpio-Morales, joins J. Carpio in his dissenting opinion.
Puno, and Panganiban, J., concurs with the majority and the separate opinion of J. Tinga.
Ynares-Santiago, J., no part.
Carpio, J., see dissenting opinion.
Azcuna, J., no part—was PNB Chairman in 1991.
Tinga, J., see separate concurring opinion.

DISSENTING OPINION
CARPIO, J.:
I dissent from the majority opinion penned by Justice Minita V. Chico-Nazario.
First, the withholding tax liability of Philippine National Oil Company ("PNOC") is a delinquent account that falls
within the coverage of Executive Order No. 44 ("EO No. 44"), the tax compromise law.
Second, PNOC filed its application for tax compromise under EO No. 44 within the period prescribed by EO
No. 44 and its implementing regulations.
Third, the tax compromise agreement made by PNOC with the Bureau of Internal Revenue ("BIR") is now res
judicata. The parties to the compromise agreement have fully implemented the agreement in good faith.
Fourth, the BIR failed to collect the tax from within the three-year prescriptive period. Thus, the collection of
the tax is now barred by prescription.
PNOC's Tax Liability Falls under EO No. 44
On 16 January 1991, BIR Commissioner Jose U. Ong declared void the tax compromise agreement that his
predecessor Commissioner Bienvenido A. Tan made with PNOC more than three years earlier. The
compromise agreement, dated 22 June 1987, settled the P385,961,580.82 tax liability of PNOC and the
Philippine National Bank ("PNB") arising from PNB's failure to withhold the final tax on interest income on
money market placements of PNOC covering the years 1984 to August 1986.1 Under the compromise
agreement, PNOC paid the BIR P93,955,479.12 in full settlement of the tax liability arising from PNB's failure
to withhold the final tax.
Article 2028 of the Civil Code defines a compromise as "a contract whereby the parties, by making reciprocal
concessions, avoid litigation or put an end to one already commenced." The purpose of compromise is to settle
the claims of the parties and bar all future disputes and controversies.2
In the present case, the BIR and PNOC entered into the tax compromise agreement in accordance with the
provisions of Executive Order No. 44 ("EO No. 44"), Revenue Memorandum Order No. 39-86 ("RMO No.
39-86") and Revenue Memorandum Order No. 4-87 ("RMO No. 4-87"). The relevant provisions read:
Executive Order No. 44
SECTION 1. The Commissioner of Internal Revenue or his duly authorized representatives may compromise
any disputed assessment or delinquent account pending as of December 31, 1985, upon the payment of an
amount equal to thirty percent (30%) of the basic tax assessed. In such cases, the Commissioner of Internal
Revenue or his duly authorized representatives shall condone the corresponding interests and penalties.
(Emphasis supplied)
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SECTION 4. Section 246 of the National Internal Revenue Code, as amended, is hereby suspended with
respect to the disputed assessments and delinquent accounts referred to herein for the duration of the
effectivity hereof.
SECTION 5. All laws, orders, issuances, rules and regulations or any part thereof inconsistent with this
Executive Order is hereby repealed or modified accordingly.
SECTION 6. This Executive Order shall take effect immediately and shall remain effective until March 31,
1987.
Revenue Memorandum Order No. 39-86
1. Coverage. - This Order shall apply only to (1) delinquent tax accounts; or (2) disputed tax assessments
pending as of December 31, 1985 within the purview of Executive Order No. 44 and its implementing
regulations. (Emphasis supplied)
1. x x x
2. Disqualification. –
3.1. There are pending assessments for withholding taxes.
By operation of law, the relationship between the Government and the withholding agent is one of agency for
which reason the withholding agent only holds the funds withheld by him in trust for the Government.
Accordingly, a withholding tax assessment issued against a withholding agent (1) who withheld the tax (2) but
did not remit the same to the Government, shall not qualify for compromise settlement herein prescribed, even
if the assessment was issued as of December 31, 1985, because under this situation he is being made
accountable not as a taxpayer but as an agent. The disputed or delinquency cases covered by Executive
Order No. 44 refer only to those where the person assessed is himself the taxpayer rather than a mere agent.
3.2. There is, however, another situation whereby a withholding agent did not withhold the tax either
because of neglect, ignorance of law or his belief that he is not required by law to withhold a tax. Under
this situation, such person is made directly accountable for the tax. This latter situation shall, however,
qualify for compromise settlement, subject to the provisions of paragraph 1 hereof, in relation to
implementing revenue regulations of Executive Order No. 44. (Emphasis supplied)
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8. Clearance. –
8.1. 30% compromise settlement rate. - If the compromise settlement rate is equivalent to 30% of the basic tax
assessed, immediate action shall be taken on the taxpayer-applicant's application. After payment of the
compromise amount, the revenue office which passed upon the application as referred to in paragraph
5.2 hereof, shall issue to the taxpayer a letter, signed by the chief of the said revenue office, confirming
the payment and advising that the case is already closed. (Emphasis supplied)
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Revenue Regulations No. 17-86
a) Delinquent account - Refers to the amount of tax due on or before December 31, 1985 from a
taxpayer who failed to pay the same within the time prescribed for its payment arising from (1) a self
assessed tax, whether or not a return was filed, or (2) a deficiency assessment issued by the BIR which
has become final and executory. (Emphasis supplied)
Revenue Memorandum Order No. 4-87
2.0 Notwithstanding the lapse of Executive Order No. 41 as amended, pre-assessment notices, assessment
notices and letters of demand issued after August 21, 1986 which are not otherwise covered by the availment
of the amnesty, may nevertheless be compromised under Sec. 246 of the Tax Code by paying 30% of the
basic tax assessed or pre-assessed.
RMO No. 39-86 expressly provides that a compromise shall include a "situation whereby a withholding
agent did not withhold the tax either because of neglect, ignorance of law or his belief that he is not
required by law to withhold a tax." In the present case, the majority opinion states that the "BIR held the
PNB personally accountable for its failure to withhold the tax on the interest earnings and/or yields from
PNOCs money placements."
PNB did not withhold and keep the tax for itself. PNB's case is a failure to withhold, not a failure to remit to the
BIR what it withheld for PNB withheld nothing. PNB is not the taxpayer here but merely a withholding agent,
burdened by law with a public duty to collect the tax for the government. PNB is not only the withholding agent
of the BIR, but also the agent of the taxpayer in preparing the return and paying the tax. In Philippine
Guaranty Co., Inc. v. Commissioner of Internal Revenue,3 the Court held:
x x x Thus, the withholding agent is constituted the agent of both the Government and the taxpayer. With
respect to the collection and/or withholding of the tax, he is the Government's agent. In regard to the filing of
the necessary income tax return and the payment of the tax to the Government, he is the agent of the
taxpayer. The withholding agent, therefore, is no ordinary government agent especially because under Section
53(c) he is held personally liable for the tax he is duty bound to withhold; whereas, the Commissioner of
Internal Revenue and his deputies are not made liable by law. (Emphasis supplied)
For failure to withhold the tax, PNB is made directly liable to pay the tax, not because it is the taxpayer, but
because it failed to comply with the law.4 PNB's legal duty is to withhold the tax, file the prescribed quarterly
return, and remit the tax to the BIR.5
PNB, which at that time was a government-owned and controlled corporation, did not withhold because of an
honest belief that there was no withholding tax on the interest income of a wholly owned government
corporation like PNOC. PNOC's application for restoration of its tax-exempt status was then pending with the
Fiscal Incentives Review Board.
Under paragraph 3.2 of RMO No. 39-86, a mere failure to withhold by the withholding agent shall "qualify for
compromise settlement." Thus, PNB's failure to withhold expressly falls within the coverage of EO No. 44.
What is outside the coverage of EO No. 44 is the failure of a withholding agent to remit what it had withheld. In
such a situation, the withholding agent absconds with trust funds in its possession. Such a situation is definitely
not subject to a tax compromise under EO No. 44. RMO No. 39-86 provides that "a withholding tax
assessment issued against a withholding agent (1) who withheld the tax (2) but did not remit the same to the
Government, shall not qualify for compromise settlement." PNB's case, however, is not a failure to remit the
withheld tax but a plain failure to withhold the tax. PNB did not withhold the tax and thus did not abscond with
public or trust funds.
EO No. 44, issued on 4 September 1986, is a special law enacted when then President Corazon C. Aquino
exercised legislative powers. EO No. 44 is separate and distinct from the authority of the BIR Commissioner to
compromise taxes under the Tax Code.6 EO No. 44 is a one-time tax compromise scheme, "effective until
March 31, 1987" and covering only "disputed assessment or delinquent account pending as of
December 31, 1985." EO No. 44 was issued to generate immediate revenues for the new government
following the 1986 EDSA revolution, as well as to clear the tax dockets of the BIR as of 31 December 1985.
Thus, the whereas clauses of EO No. 44 state in part:
xxx
WHEREAS, there is a need to clear this backlog of pending cases of disputed assessments and
delinquent accounts;
WHEREAS, there is a further need to raise revenues.
x x x.
The power of the BIR Commissioner to compromise under EO No. 44 is broader than his power to
compromise under the Tax Code. Under Section 204 of the Tax Code,7 the BIR Commissioner can compromise
a tax only if there is reasonable doubt as to its validity or if the taxpayer's financial position shows a clear
inability to pay the tax. EO No. 44 does not require these conditions. A compromise under Section 204 requires
an examination of the legal basis of the assessment or the financial capacity of the taxpayer to pay the
assessment. EO No. 44 does not require such examination.
The conditions in EO No. 44 are straightforward and require no examination of the legal basis of the
assessment or financial capacity of the taxpayer. The conditions in EO No. 44 are plain and simple: first, the
disputed assessment or delinquent account is pending as of 31 December 1995; and second, the
taxpayer is willing to pay thirty percent of the basic tax assessed. EO No. 44 prescribed simple, plain and
straightforward conditions precisely to encourage taxpayers to avail of the tax compromise program under EO
No. 44.
EO No. 44 is a special law that prevails over Section 204 of the Tax Code. Section 4 of EO No. 44 states:
Section 4. Section 246 (now 204) of the National Internal Revenue Code, as amended, is hereby suspended
with respect to the disputed assessments and delinquent accounts referred to herein for the duration of the
effectivity hereof.
The stringent standards prescribed in Section 204 of the Tax Code do not apply to compromise agreements
under EO No. 44. The law expressly suspended the effectivity of Section 204 of the Tax Code during the
effectivity of EO No. 44.
Thus, during the effectivity of EO No. 44, the only tax compromise possible for delinquent accounts as
of 31 December 1985 is under EO No. 44. PNOC filed its application with the BIR for a tax compromise
during the effectivity of EO No. 44. Obviously, PNOC's application for a tax compromise of its delinquent
accounts as of 31 december 1985 meant a tax compromise under eo no. 44. the bir had no authority to
entertain any other tax compromise.
rr no. 17-86 defines a "delinquent account" to include a "self-assessed tax." the majority opinion adopts
respondents' argument that pnoc's withholding tax liability is not a "self-assessed tax" because the bir
investigated the taxpayer and assessed the tax. here lies the fundamental error of the majority opinion. the
majority opinion states:
pnoc's tax liability could not be considered a delinquent account since (1) it was not self-assessed, because
the bir conducted an investigation and assessment of pnoc and pnb after obtaining information regarding
the non-withholding of tax from private respondent savellano; x x x. (emphasis supplied)
the majority opinion's thesis is contrary to the very concept of a self-assessed tax.
a self-assessed tax, as the term implies, is self-assessed by the taxpayer without the intervention of an
assessment by the taxing authority to create the tax liability. a self-assessed tax means a tax that the
taxpayer himself assesses or computes and pays to the taxing authority. in Tupaz v. Ulep,8 this Court
explained that a self-assessed tax is one where "no further assessment by the government is required to
create the tax liability." A self-assessed tax falls due without need of any prior assessment by the BIR, and
non-payment of a self-assessed tax on the date prescribed by law results in penalties even in the absence of
any assessment by the BIR.
A clear example of a self-assessed tax is the annual income tax, which the taxpayer himself computes and
pays without the intervention of any assessment by the BIR. The annual income tax becomes due and payable
without need of any prior assessment by the BIR. The BIR may or may not investigate or audit the annual
income tax return filed by the taxpayer. The taxpayer's liability for the income tax does not depend on whether
or not the BIR conducts such subsequent investigation or audit.
However, if the taxing authority is first required to investigate, and after such investigation to issue the tax
assessment that creates the tax liability, then the tax is no longer self-assessed. This is not the case of the final
withholding tax on interest income on money market placements.
The computation of the amount of the final withholding tax on interest income does not require any assessment
by the BIR. The taxpayer can easily determine the amount of the tax since it is a flat rate based on the interest
paid. In fact, the bank automatically computes the amount of the final withholding tax, deducts the tax from the
taxpayer's interest income, and remits the tax to the BIR. The BIR does not make any assessment. Plainly, the
final withholding tax on interest payment is a self-assessed tax.
The taxpayer's failure to pay when due a self-assessed tax, while it may result in a subsequent investigation
and assessment by the BIR, does not remove the character of the tax as a self-assessed tax. The tax liability
of the taxpayer arises on due date of the tax, and the non-payment of the self-assessed tax on due date does
not prevent the tax liability from attaching. The tax liability is created by operation of law, even in the absence
of an investigation and assessment by the BIR. The subsequent BIR investigation and assessment is for the
purpose of collecting a past due tax, and not for the purpose of creating the tax liability. Of course, the
computation by the taxpayer of his tax liability under a self-assessed tax is not conclusive on the BIR. After
investigation or audit, the BIR can issue an assessment for any deficiency tax still due from the taxpayer.
In Tupaz v. Ulep,9 the Court declared that "internal revenue taxes are self-assessing." The final withholding
tax on interest income is an internal revenue tax. Indeed, the Tax Code follows the pay-as-you-file system of
taxation under which the taxpayer computes his own tax liability, prepares the return, and pays the tax as he
files the return. The pay-as-you-file system is a self-assessing tax system.
EO No. 44 is a general tax compromise program covering all delinquent taxes and disputed assessments
under the Tax Code as of 31 December 1985. EO No. 44 does not distinguish between delinquent
accounts that are or are not the subject of subsequent investigation and assessment by the BIR. Where
the law does not distinguish, courts should not distinguish. To remove from the coverage of EO No. 44
delinquent accounts that became the subject of subsequent investigation and assessment would severely limit
the coverage of EO No. 44, a limitation that is not found in the language or intent of EO No. 44. Indeed, such a
limitation would defeat the avowed purpose of EO No. 44 to clear the tax dockets of the BIR. The big
delinquent accounts, such as PNOC's tax liability, which normally go through subsequent investigation and
assessment, would not qualify for the general tax compromise program, preventing EO No. 44 from attaining
its objectives.
Clearly, PNOC's tax liability is a delinquent account within the coverage of EO No. 44 because it is a
self-assessed tax unpaid as of 31 December 1985.10 There can be no dispute that the final withholding tax
on interest payments by PNB on PNOC's money market placements does not require the intervention of the
BIR for its assessment and remittance to the BIR.
Thus, the compromise agreement between PNOC and BIR falls within the coverage of EO No. 44 and its
implementing rules. The non-payment of the final withholding tax has resulted in a delinquent tax account of
PNOC. In addition, the failure of PNB to withhold the tax falls within the coverage of RMO No. 39-86.
However, the majority opinion insists that PNOC's withholding tax liability is outside the coverage of EO 44
because there is no proof that PNOC or PNB filed the tax return in compliance with the self-assessment
system. The majority opinion states:
Neither PNOC nor PNB, the taxpayer and the withholding agent, respectively, complied with the system
and conducted self-assessment in this case. There is no showing that in the absence of tax assessment
issued by the BIR against them, that PNOC and/or PNB would have voluntarily admitted their tax liabilities,
already amounting to P385,961,580.82, as of 15 November 1986, and would have offered to compromise the
same. In fact, both PNOC and PNB were conspicuously silent about their tax liabilities until they were
assessed thereon. (Emphasis supplied)
The majority opinion conveniently forgets that the tax compromise under EO 44 and its implementing rules
covers "a self-assessed tax, whether or not a return was filed." Revenue Regulations No. 17-86 provides:
Delinquent account - Refers to the amount of tax due on or before December 31, 1985 from a taxpayer who
failed to pay the same within the time prescribed for its payment arising from (1) a self assessed tax, whether
or not a return was filed, or (2) a deficiency assessment issued by the BIR which has become final and
executory.
Where no return was filed, the taxpayer shall be considered delinquent as of the time the tax on such return
was due, and in availing of the compromise, a tax return shall be filed as a basis for computing the
amount of compromise to be paid. (Emphasis supplied)
Clearly, the tax compromise under EO No. 44 applies to a self-assessed tax, whether or not a return was
filed, because Revenue Regulations No. 17-86 expressly so provides.
Revenue Regulations No. 17-86 even states, "Where no return was filed, the taxpayer shall be considered
delinquent as of the time the tax on such return was due, and in availing of the compromise, a tax return
shall be filed as a basis for computing the amount of compromise to be paid." If the taxpayer failed to file
the return, he can avail of the tax compromise by filing a return, which shall serve as basis for computing the
compromise amount. Revenue Regulations No. 17-86 expressly applies to delinquent accounts of taxpayers
who failed to file the returns.
EO No. 44 and its implementing rules do not require that PNOC or PNB must have "complied with the system
and conducted self-assessment" before they could avail of the tax compromise. The BIR could not have
required the thousands of taxpayers who availed of the tax compromise under EO No. 44 to show proof that
they filed their tax returns. There is no such requirement in EO No. 44 or in its implementing rules. On the
contrary, Revenue Regulations No. 17-86 expressly states "whether or not a return was filed" – which
means that the filing of a tax return is not a condition for the availment of the tax compromise. The BIR never
required the thousands of taxpayers who availed of EO No. 44 to prove that they filed their tax returns. For the
majority opinion to require now PNOC and PNB to prove that they filed the tax returns would constitute denial
of equal protection of the law.
The tax compromise under EO No. 44 and its implementing rules applies to self-assessed taxes, whether or
not the corresponding tax returns were filed. The definition of a delinquent account that is subject to the tax
compromise expressly includes a self-assessed tax "whether or not a return was filed." There can be no
clearer language than this to express that the taxpayer is not required to prove that he filed the tax return.
There is absolutely no legal basis in requiring PNOC or PNB to show proof that they filed the proper tax returns
before they could avail of the tax compromise. The majority opinion is patently wrong in holding that PNOC and
PNB must prove that they filed the tax returns before they can avail of the tax compromise.
The majority opinion also insists that PNOC's withholding tax liability is outside the coverage of EO No. 44
because the BIR subsequently investigated and assessed PNOC for the withholding tax liability. The
majority opinion states:
It is important to remember that, in this case, any attempt by PNOC and PNB to assess and declare by
themselves their tax liabilities had already been overtaken by the BIR's conduct of its audit and investigation
and subsequent issuance of the assessments, dated 8 August 1986 and 8 October 1986, against PNOC and
PNB, respectively. The said tax assessments, uncontested and undisputed, already presented the
results of the BIR audit and investigation and the computation of the total amount of tax liabilities of
PNOC and PNB, and should be controlling in this case. They should not be so easily and conveniently
ignored and set aside. It would be a contradiction to claim that the tax liabilities of PNOC and PNB are
self-assessed and, at the same time, BIR-assessed; when it is clear and simple that it had been the BIR
that conducted the assessment and determined the tax liabilities of PNOC and PNB.
The majority opinion theorizes that a taxpayer with a delinquent account consisting of a self-assessed tax
cannot avail of EO No. 44 if the BIR issued an assessment against the taxpayer because the BIR
assessment is allegedly controlling.
The majority opinion's theory that a subsequent BIR assessment removes a delinquent account from the
coverage of EO No. 44 collides directly with Revenue Memorandum Order No. 39-8611 which implements EO
No. 44. Revenue Memorandum Order No. 39-86 expressly recognizes that the delinquent accounts subject
to compromise under EO No. 44 may be "covered by a letter of demand and assessment notice" by the
BIR. Revenue Memorandum Order No. 39-86 provides:
xxx
6. Base of the compromise settlement rate. - The compromise settlement rate shall be applied against the
basic tax assessed referred to under paragraph 5.1 hereof. In no case may any revenue office passing upon
cases covered hereunder cause any computational adjustment or adjustments in determining the basic tax
before applying the compromise settlement rate, any error in the assessment and demand being compromised
notwithstanding. In all instances, the compromise settlement rate shall be applied against the basic tax
assessed. If the assessment is covered by a letter of demand and assessment notice, the compromise
settlement rate shall be applied against the basic tax assessed as shown in the said letter of demand
and assessment notice.
7. Allowable compromise settlement rates below thirty percent (30%). - The Evaluation Committee shall apply
exclusively the compromise settlement rates prescribed hereunder:
7.1 "Jeopardy" tax assessment as defined under RMO 17-85 (while RMO 17-85 speaks only of income
tax assessments, this compromise settlement shall, however, apply to all internal revenue tax
assessments in the nature of a "jeopardy" tax assessment) - 10%
7.2 Arbitrary assessments which have been issued only and primarily to forestall prescription - 10%
7.3 Tax assessments of doubtful validity whether as to law or as to facts - 15%
x x x.
Paragraph 6 of Revenue Memorandum Order No. 39-86 expressly provides, "If the assessment is covered
by a letter of demand and assessment notice, the compromise settlement rate shall be applied against
the basic tax assessed as shown in the said letter of demand and assessment notice." The BIR
assessment is even made the basis in applying the 30% settlement rate under EO No. 44. Indisputably, a
subsequent BIR assessment does not remove a delinquent account from the coverage of EO No. 44.
With or without a BIR assessment, a delinquent account qualifies for tax compromise under EO NO. 44
provided it is a self-assessed tax unpaid as of 31 December 1985. EO No. 44 and its implementing rules do
not exclude delinquent accounts that were issued BIR assessments. On the contrary, Revenue Memorandum
Order No. 39-86 expressly states that the BIR assessment shall serve as basis in applying the compromise
settlement rate under EO No. 44. The majority opinion is mistaken in holding that EO No. 44 and its
implementing rules exclude BIR-assessed delinquent accounts from the coverage of the tax compromise.
Revenue Memorandum Order No. 39-86 even expressly includes within the coverage of EO No. 44 jeopardy
assessments, arbitrary assessments, and doubtful assessments issued by the BIR. Clearly, a subsequent
BIR assessment – indeed any kind of subsequent BIR assessment - does not remove a delinquent account
from the coverage of EO No. 44.
Thousands of taxpayers availed of the tax compromise under EO No. 44 although the BIR had issued them
assessments, whether regular assessments, jeopardy assessments, arbitrary assessments or doubtful
assessments. For the majority opinion to exclude PNOC or PNB from availing of the same tax compromise
because the BIR issued PNOC an assessment would constitute a denial of equal protection of the law.
PNOC's and PNB's withholding tax liability clearly falls within the coverage of EO No. 44 and its implementing
rules.
The majority opinion further claims that PNOC does not fall under EO No. 44 but under Revenue Memorandum
Circular No. 31-86 because the assessment against PNOC was issued on 8 August 1986. The majority opinion
states:
As has already been discussed in the main opinion, the assessment against PNOC, issued on 08 August 1986,
is more appropriately covered by the following provision of Revenue Memorandum Circular (RMC) No.
31-86:
[T]axpayers against whom assessments had been issued from January 1 to August 21, 1986 may settle their
tax liabilities by way of compromise under Section 246 of the Tax Code as amended by paying 30% of the
basic tax assessment excluding surcharge, interest, penalties and other increments thereto. (Emphasis
supplied)
The majority opinion gratuitously states that PNOC is "more appropriately covered" by Revenue
Memorandum Circular No. 31-86. However, the majority opinion then declares that PNOC is still not qualified
for tax compromise under Revenue Memorandum Circular No. 31-86, thus:
However, even though the tax assessment against it was issued on 08 August 1986, PNOC would still not be
entitled to compromise its tax liability under the above-quoted provision of RMC No. 31-86 because it failed to
allege, must less present any evidence that: (1) there existed a reasonable doubt as to the validity of the claim
against it; or (2) its financial position demonstrated a clear inability to pay the assessed tax, as required by
Section 246 of the Tax Code of 1977, as amended.
The majority opinion wants to deprive PNOC from availing of the tax compromise under EO No. 44 just
because the BIR issued the assessment on 8 August 1986. There is nothing in EO No. 44 or in Revenue
Regulations No. 17-86 that excludes from the tax compromise delinquent accounts as of 31 December 1985
that were the subject of assessments issued after 31 December 1985. On the contrary, Revenue
Regulations No. 17-86 expressly provides that the delinquent accounts may be covered by regular
assessments, jeopardy assessments, arbitrary assessments and doubtful assessments. Revenue
Regulations No. 17-86 does not state that these assessments should be issued before 1 January 1986.
In fact, taxes falling due in the fourth quarter of 1985 could never be issued assessments before 1 January
1986. The assessments for most of the taxes falling due in tax year 1985 could only be issued from 1
January 1986 onwards. To exclude unpaid taxes falling due in 1985 just because the BIR issued
assessments on these accounts from 1 January 1986 onwards would render the tax compromise under EO
No. 44 inutile.
The period from 1 January to 21 August 1986 in Revenue Memorandum Circular No. 31-86 refers to those who
could not avail of the tax amnesty under Executive Order No. 4112 which was issued on 22 August 1986.
The cut-off date is 21 January 1986 because this is the day before EO No. 41 was issued. However, this
period has become irrelevant because EO No. 41, which originally covered only tax years 1981 to 1985, was
amended by Executive Order No. 9513 to extend the tax amnesty up to 31 January 1987.
Clearly, the reference to 1 January to 21 August 1986 has nothing to do with EO No. 44 which is different from
EO No. 41. EO No. 44 is a tax compromise while EO No. 41 is a tax amnesty and they cover different taxable
years. PNOC's tax delinquency for the period 1 January 1986 onwards is not covered by EO No. 44 which
applies only to unpaid taxes as of 31 December 1985. This is why in its letter of 26 September 1986 to the BIR
requesting for a tax compromise PNOC also invoked Section 246 of the Tax Code to cover the period from 1
January 1986 onwards.
Although PNB is not a signatory to the compromise agreement, the subject matter of the compromise falls
expressly within the coverage of EO No. 44 and its implementing rules. The compromise agreement absolved
PNOC from any tax liability after PNOC paid the compromise amount. The BIR can no longer recover the
foregone tax, either from PNOC or from PNB. Unless an express reservation is made in the compromise
agreement and there is none here, the compromise amount stands in the place of the amount originally
assessed against PNOC.
PNOC Filed its Tax Compromise Application on Time
The majority opinion states that PNOC filed its application for tax compromise under EO No. 44 out of time.
The majority opinion asserts:
More importantly, even assuming arguendo that the liabilities of PNOC and PNB qualify as delinquent
accounts, the application for compromise filed by PNOC on 09 June 1987, and accepted by then BIR
Commissioner Tan on 22 June 1987, was filed way beyond 31 March 1987, the expiration date of the
effectivity of E.O. No. 44 and the deadline for filing of applications for compromise under Revenue
Memorandum Order (RMO) No. 39-86. (Emphasis supplied)
Revenue Memorandum Order No. 39-86 fixes the period for availing of the tax compromise under EO No. 44.
Paragraph 2 of Revenue Memorandum Order No. 39-86 provides:
2. Period for availment. - Filing of application for compromise settlement under the said law shall be
effective only until March 31, 1987. Applications filed on or before this date shall be valid even if the
payment or payments of the compromise amount shall be made after the said date, subject, however, to
the provisions of Executive Order No. 44 and its implementing Revenue Regulations No. 17-86.
The deadline for filing the application is 31 March 1987. Applications filed on or before 31 March 1987 "shall
be valid" even if the compromise amount is paid after 31 March 1987.
Contrary to the majority opinion's claim that the effectivity of EO No. 44 expires on 31 March 1987, Revenue
Memorandum Order No. 39-86 provides that applications filed on or before 31 March 1987 shall be valid even
if the payment is made after 31 March 1987. Thus, the crucial issue is whether PNOC filed any application
to avail of the tax compromise under EO No. 44 on or before the deadline of 31 March 1987.
On 25 September 1986, long before the 31 March 1987 deadline, PNOC wrote the BIR submitting a
compromise settlement pursuant to EO No. 44 as well as Section 246 of the Tax Code. PNOC's letter reads:
We would like to amicably settle this liability with the BIR. In this regard, we wish to invoke the authority
vested by law in your office, particularly under Section 246 of the National Internal Revenue Code, as
amended, and the spirit underlying Executive Order No. 44 dated September 4, 1986. Consequently, we
hereby request for a compromise settlement and submit our offer for compromise of the matter, as
follows: x x x.14
More than five months before the deadline of 31 March 1987, PNOC had already applied with the BIR for a tax
compromise under EO No. 44 and Section 246 of the Tax Code. Apparently, PNOC invoked EO No. 44 for its
delinquent tax liability from 15 October 1984 to 31 December 1985, and Section 246 of the Tax Code for its tax
liability from 1 January 1986 onwards since EO No. 44 covered only delinquent accounts as of 31 December
1985.
PNOC filed its application for tax compromise on 25 September 1986, during the effectivity of EO No. 44. EO
No. 44 suspended during the effectivity of EO No. 44 the BIR Commissioner's power to enter into tax
compromises under Section 204 of the Tax Code. This suspension refers to delinquent accounts as of 31
December 1985, the delinquencies covered under EO No. 44. Thus, when PNOC applied for tax
compromise of its delinquent accounts as of 31 December 1985, the application for tax compromise
could only have referred to EO No. 44 and not to any other tax compromise law. During the effectivity
of EO No. 44, the BIR Commissioner had no power to compromise tax delinquencies as of 31
December 1985 under any law except EO No. 44. PNOC's application for tax compromise of its
delinquent accounts as 31 December 1985 was clearly based on EO No. 44 as the only law then
governing tax compromises for such delinquencies.
After the BIR received PNOC's letter of 26 September 1986, several meetings took place between the BIR and
PNOC on PNOC's request to avail of the tax compromise under EO No. 44. On 14 October 1986, PNOC
reiterated its compromise settlement proposal to the BIR. There were also several exchanges of
communications between the BIR and PNOC. On 9 June 1987, the PNOC wrote again the BIR in this manner:
If your office will recall, our Company (even under the administration of then PNOC Chairman and
President Vicentc T. Paterno) had originally requested in writing and negotiated for the compromise of
the subject tax assessment pursuant to the beneficial provisions of E.0. No. 44, as early as September,
1986, shortly after the effectivity of Executive Order.
It appears, however, that the provisions of BIR Revenue Memorandum Order No. 39-86 may not have been
applied or considered at length in evaluating the legal basis and merits of our compromise request, in our
favor, since most of the negotiations and the earlier decisions of your office were made prior to the
promulgation of BIR Revenue Memorandum Order No. 39-86 on November 18, 1986. (In fact, the last
letter in the 1986 series of correspondences between your office and our Company is dated November 11,
1986.)
We cite in particular the provisions of Section 3.2 of your Revenue Memorandum Order No. 39-86, by
virtue of which the subject tax assessment is qualified for compromise settlement under E.0. No. 44.
Under these provisions, the tax liability resulting from the situation "whereby a withholding agent did
not withhold the tax either because of neglect, ignorance of law or his belief that he is not required by
law to withhold a tax," is deemed qualified for compromise settlement under E.O. No. 44.
The case contemplated by the cited provisions of BIR Revenue Memorandum Order No. 39-86 squarely
covers our present case, considering that the final withholding tax on the interest earnings of our Company's
placements with PNB were not withheld by PNB because of PNB's honest belief then, that it was not required
by law to commence withholding the tax. At that time, it was the clear impression and understanding of both
PNB and our Company that PNOC's tax exemptions continued to subsist during the pendency of PNOC's tax
exemption restoration application with the Fiscal Incentives Review Board (FIRB), until and unless the
application is categorically denied or resolved to the contrary. In fact, it was only in the course of the subject
BIR tax assessment that the effective loss of PNOC's tax exemptions was categorically raised by the BIR.
Consequently, we reiterate our previous request for compromise under E.O. No. 44, and convey our
preparedness to settle the subject tax assessment liability by payment of the compromise amount of
P91,003,129.89, representing thirty percent (30%) of the basic tax assessment of P303,343,766.29, in
accordance with E.O. No. 44 and its implementing BIR Revenue Memorandum Order No. 39-86.15
(Emphasis supplied)
PNOC's letter of 9 June 1987 explains why the BIR could not immediately act on its 26 September 1986
request for tax compromise under EO No. 44. When PNOC wrote the 26 September 1986 letter, only EO No.
44 and Revenue Regulations No. 17-86 were in existence. The BIR Commissioner had not yet issued
Revenue Memorandum Order No. 39-86 which clarified that the failure to withhold taxes did not prevent the
taxpayer or withholding agent from availing of the tax compromise under EO No. 44, which was the situation of
PNOC and PNB. It was only during the course of the negotiations between PNOC and the BIR that the BIR
Commissioner issued Revenue Memorandum Order No. 39-86.
As a result of the negotiations, PNOC reiterated its 26 September 1986 application for tax compromise under
EO No. 44 by writing the 9 June 1987 letter to the BIR. In turn, the BIR Commissioner approved the tax
compromise on 22 June 1987. Thereafter, PNOC paid the full amount of the tax compromise in three
installments from June to October 1987. Revenue Regulations No. 17-86 authorized the instalment payment
because the compromise amount was over P50,000.16 Clearly, PNOC's 26 September 1986 letter-request for
tax compromise under EO No. 44 culminated successfully on 22 June 1987 in the approval of the tax
compromise under EO No. 44. This is actual compliance with the requirement that the application for tax
compromise under EO No. 44 should be filed on or before 31 March 1987.
Indeed, the BIR knew that PNOC filed its application for tax compromise "under E.O. 44 as early as
September 1986." The Memorandum dated 16 January 199117 submitted by Venancia M. Pangilinan, Chief of
the BIR Litigation Division, and approved by BIR Commissioner Ong, states:
PNOC, through the letter of its legal counsel dated June 9, 1987, offered to pay P91,003,129.89 representing
30% of the basic withholding tax of P303,343,766.29 pursuant to E.O. 44 which took effect on September 4,
1986, to be paid on installment basis, viz:
xxx
x x x From the tenor of the above letter, it appears PNOC has made a previous offer of settlement of this
case under E.O. 44 as early as September 1986, shortly after the effectivity of said E.O. (Emphasis
supplied)
The Tax Compromise is now Res Judicata
A compromise agreement constitutes a final and definite settlement of the controversy between the parties.18 A
compromise agreement, even if not judicially approved, has the effect of res judicata on the parties. Article
2037 of the Civil Code provides:
A compromise has upon the parties the effect and authority of res judicata; but there shall be no execution
except in compliance with a judicial compromise. (Emphasis supplied)
The compromise agreement has the force of law between the parties and no party may discard unilaterally the
compromise agreement.19 Under Section 8.1 of RMO No. 39-86, upon payment of the compromise amount,
the tax "case is already closed." The Solicitor General, who withdrew as counsel for the BIR, maintains that
the compromise agreement is valid.
Where a party has received the consideration for the compromise agreement, such party is estopped from
questioning its terms and asking for the reopening of the case on the ground of mistake.20 As explained in
McCarthy v. Barber Steamship Lines:21
Hence it is general rule in this country, that compromises are to be favored, without regard to the
nature of the controversy compromised, and that they cannot be set aside because the event shows all the
gain to have been on one side, and all the sacrifice on the other, if the parties have acted in good faith, and
with a belief of the actual existence of the rights which they have respectively waived or abandoned; and if a
settlement be made in regard to such subject, free from fraud or mistake, whereby there is a surrender or
satisfaction, in whole or in part, of a claim upon one side in exchange for or in consideration of a surrender or
satisfaction of a claim in whole or in part, or of something of value, upon the other, however baseless may be
the claim upon either side or harsh the terms as to either of the parties, the other cannot successfully impeach
the agreement in a court of justice * * *. Where the compromise is instituted and carried through in good faith,
the fact that there was a mistake as to the law or as to the facts, except in certain cases where the mistake
was mutual and correctable as such in equity, cannot afford a basis for setting a compromise aside or
defending against a suit brought thereon * * *
xxx
And whether one or the other party understood the law of the case more correctly than the other, cannot be
material to the validity of the bargain. For if it were, then it would follow that contracts by the parties settling
their own disputes, would at last be made to stand or fall, according to the opinion of the appellate court how
the law would have determined it. (Emphasis supplied)
In People v. Magdaluyo,22 the BIR Commissioner approved the agreement which compromised the taxpayer's
violation of the Tax Code. The taxpayer paid the compromise amount before the filing of the criminal
information in court. The Court ruled that the government could no longer prosecute the taxpayer for violation
of the Tax Code.
The same principle holds true in the present case. The parties to the compromise agreement have voluntarily
settled the tax liability arising from PNB's failure to withhold the final tax on PNOC's interest income. The
parties have fully implemented in good faith the compromise agreement. The new BIR Commissioner cannot
just annul the legitimate compromise agreements made by his predecessors in the performance of their regular
duties where the parties entered into the compromise agreements in good faith and had already fully
implemented the compromise agreements.23
To rule otherwise would subject the validity and finality of a tax compromise agreement to depend on the
different interpretations of succeeding BIR Commissioners. Such lack of finality of tax compromises would
discourage taxpayers from entering into tax compromises with the BIR, considering that compromises entail
admissions by taxpayers of violations of tax laws. A tax compromise cannot be invalidated except in case of
mistake, fraud, violence, undue influence, or falsity of documents. Article 2038 of the Civil Code provides:
Article 2038. A compromise in which there is mistake, fraud, violence, intimidation, undue influence, or
falsity of documents, is subject to the provisions of Article 1330 of this Code.
x x x (Emphasis supplied)
Article 1330 of the Civil Code makes compromises tainted with such circumstances voidable.24 In the present
case, there is no mistake because PNOC's delinquent account clearly falls within the coverage of EO No. 44.
Also, PNOC clearly filed its application for tax compromise before the deadline. Thus, none of the
circumstances that make a compromise voidable is present in this case.
PNB was a government-owned and controlled corporation when it failed to withhold the tax. PNOC, the
taxpayer primarily liable for the tax, was then also a government-owned and controlled corporation, and
remains so until now. PNB did not abscond with any tax money because this is a case of failure to withhold the
tax and not a failure to remit a withheld tax. No fraud or bad faith is ascribable to PNB or PNOC in the
execution of the compromise agreement.
Collection of Tax is Barred by Prescription
PNB regularly filed its quarterly returns covering the final withholding tax on all money market placements with
PNB for the years 1984 to 1985.25 Under Revenue Regulations No. 12-80, PNB prepared its quarterly returns
using BIR Form No. 1745,26 as follows:
SECTION 4. Manner of Computation of Tax Base. — For purposes of Section 3 above, tax bases of the
following taxes shall be computed in the following manner:
(a) Final withholding tax on savings deposits. —x x x
xxx
(c) Final withholding tax on yield of deposit substitutes.- The final withholding tax on yield of deposit
substitute shall be based on the adjusted gross interest or yield paid or accrued by banks or non-bank
financial intermediaries on all of its deposit substitute debt instruments issued.
The adjusted gross interest or yield paid or accrued is arrived at after deducting from the total interest or yield
paid or accrued on deposit substitutes, the sum of —
(1) All interest and/or yield paid or accrued on deposit substitute earned by tax-exempt entities;
(2) All interest and/or yield paid or accrued on inter-bank loans, including those between or among quasi-
banks;
(3) All interest and/or yield paid or accrued on borrowings from World Bank, Asian Development Bank,
International Finance Corporation and similar institutions; and
(4) All interest and/or yield paid or accrued on deposit substitutes exempt from withholding tax.
The adjusted gross interest and/or yield paid or accrued on deposit substitute debt instruments shall further be
detailed as to amount subjected in full to the twenty per centum (20%) final withholding tax and amount
subjected to preferential final withholding tax rates in the prescribed from (B.I.R. Form No. _____). (Emphasis
supplied)
Thus, the computation for the quarterly returns already took into account "[A]ll interest and/or yield paid or
accrued on deposit substitute earned by tax-exempt entities," including interest income of PNOC on its money
market placements since PNB believed in good faith that PNOC was exempt from the withholding tax. After
filing of the quarterly returns, the BIR had every opportunity to investigate and audit the correctness of the
PNB's computation.
The last day for filing the quarterly return for the last quarter of 1985 was 25 January 1986. The BIR and PNOC
signed the compromise agreement on 22 June 1987. BIR Commissioner Ong abrogated the compromise
agreement on 16 January 1991, the same day the BIR issued the final assessment against PNOC and PNB for
the P294,958,450.73 foregone tax. From 25 January 1986, the last day for PNB to file the fourth quarter return
for 1985, to the issuance of the final assessment for the foregone tax on 16 January 1991, more than four
years had lapsed. The Tax Code requires the BIR to assess and collect the tax within three years from the last
day of filing of the tax return.
In the present case, the BIR had until 25 January 1990 to assess and collect the tax. Otherwise, the right
of the government to assess or collect the tax would prescribe. Section 318 of the Tax Code, the section
governing prescription during the taxable years 1984 and 1985, then provided as Section 20327 of the Tax
Code now similarly provides:
Sec. 318. Period of limitation upon assessment and collection – Except as provided in the succeeding section,
internal revenue taxes shall be assessed within three years after the last day prescribed by law for the filing of
the return, and no proceeding in court without assessment for the collection of such taxes shall be begun after
the expiration of such period: Provided, That in case where a return is filed beyond the period prescribed by
law, the three-year period shall be counted from the day the return was filed. For the purposes of this section, a
return filed before the last day prescribed by law for the filing thereof shall be considered as filed on such last
day.
The law prescribes two conditions for the collection of internal revenue taxes. First, the BIR must assess the
tax on the taxpayer within three years from the last day of filing of the tax return. Second, the BIR must collect
judicially or administratively the tax also within three years from the last day of filing of the tax return. In short,
the BIR must institute both the assessment and the collection case within three years from the last day of filing
of the return, but the assessment must precede the collection case. One textbook writer put it succinctly in this
manner:
As mandated by law (Sec. 203, 1997 NIRC), the Government must assess on time, that is to say, not later than
three years counted from and after the period fixed by law for the filing of the tax return or the actual date of
filing, whichever is the later date.
xxx
In the case of self-assessed taxes like the income tax that the taxpayer himself assesses and reflects on his
return, the collection thereof may proceed without any further assessment; in which case, therefore,
the prescriptive period of collection applies. Hence, the BIR must collect such tax, either by summary
or judicial remedies, within three (3) years from the date of filing of the tax return. This is so because the
date of assessment in the case of self-assessed taxes would be the date of the actual filing of the return as it is
on such date when the tax is said to have been assessed (Sec. 222[c], 1997 NIRC).28 (Emphasis supplied)
Since more than four years had lapsed since the filing of the last quarterly return on 25 January 1986, the
BIR could no longer assess the foregone tax on PNOC when the BIR abrogated the compromise agreement
on 16 January 1991. The reckoning date for the three-year prescriptive period for withholding taxes due before
the last quarter of 1985 is even earlier than 25 January 1986. Even assuming that the BIR had assessed the
tax within the three-year prescriptive period, the BIR could no longer collect the foregone tax when it
demanded payment from PNOC and PNB on 16 January 1991, the date the BIR abrogated the compromise
agreement. The BIR must issue the tax assessment, and judicially collect the assessed tax, within three
years from the last day of filing of the last quarterly return.
Of course, the BIR may also administratively collect the assessed tax by distraint of personal property or levy
on real property.29 However, the BIR must take these summary remedies within the three-year
prescriptive period for collecting the assessed tax. In the present case, the BIR issued the warrant of
garnishment against PNB on 12 August 1991, more than five years from the last day of filing of the last
quarterly return on 25 January 1986. Thus, the garnishment of PNB's account with the Central Bank on 23
August 1991 is void since the right of the BIR to collect the tax had already prescribed by then.
Section 318 (now 203) of the Tax Code clearly provides that the three-year prescriptive period is counted from
the due date of the filing of the return. The BIR must assess and collect the tax within three years from the
filing of the tax return.
In the present case, the majority opinion expressly admits that the BIR issued the assessment against
PNB on 8 October 1986, and that the BIR had until 7 October 1989, or three years from the issuance of
the assessment, to collect the tax. The majority opinion declares:
Neither has the three-year prescriptive period for the collection of the tax prescribed. Considering that
the assessment against PNB was issued on 8 October 1986, the BIR had until 7 October 1989 to
enforce collection based thereon. (Emphasis and underscoring supplied)
The majority opinion is mistaken in stating that the three-year period is counted from the date of issuance of
the assessment. Section 318 (now 203) of the Tax Code clearly states that the three-year period is counted
from the due date of the filing of the return. This means that the prescriptive period in the present case
expired on 24 January 1989 since the last quarterly return was due on 25 January 1986. This is almost
9 months earlier than the 7 October 1989 expiry date that the majority opinion claims.
The majority opinion further claims that there is no proof that PNB filed its quarterly withholding tax returns.
The majority opinion asserts:
In making its conclusions that the assessment and collection in this case has prescribed, the dissenting opinion
has taken liberties to assume the following facts even in the absence of allegations and evidences to the effect
that: (1) PNB filed returns for its withholding tax obligations for taxable year 1985; (2) PNB reported in the said
returns the interest earnings of PNOC's money placements with the bank; and (3) that the returns were filed on
or before the prescribed date, which was 25 January 1986.
Contrary to the majority opinion's claim, the BIR audit report on PNB's failure to withhold the tax from 1984 to
1985 does not state that PNB failed to file its quarterly return. Had PNB failed to file its quarterly return, the tax
assessment against PNB would have been increased by a penalty equivalent to either 25% or 50% of the tax
due as mandated by Section 248 of the Tax Code, thus:
SEC. 248. Civil Penalties. – (A) There shall be imposed, in addition to the tax required to be paid, a penalty
equivalent to twenty-five percent (25%) of the amount due, in the following cases:
(1) Failure to file any return and pay the tax due thereon as required under the provisions of this Code
or rules and regulations on the date prescribed; or
xxx
(B) In case of willful neglect to file the return within the period prescribed by the Code or by the rules
and regulations, x x x the penalty to be imposed shall be fifty percent (50%) of the tax x x x.
The tax assessment against PNB, made after the investigation and audit of PNB's failure to withhold the tax for
the years 1984 and 1985, does not include the 25% or 50% penalty for failure to file the return. The
assessment letter to PNB dated 8 October 1986 states:
Please be informed that upon investigation, there was found due from you as a withholding agent within the
provisions of Section 31 of the National Internal Revenue Code, the total sum of P376,301,133.23,
representing deficiency withholding final tax inclusive of interests, as the yield of the deposit substitutes placed
with your Bank by the Philippine National Oil Company, as shown below:
Deficiency withholding final Tax on the total yield of P1,960,881,332.25 covering the period from October 15,
1984 to July 31, 1986
-
P298,863,332.51
Interests due - computed up to October 15, 1986
-
P77,455,580.72
Total Deficiency Amount

P376,301,133.23
As you will note the interest due on the deficiency withholding final tax was computed up to October 15, 1986.
Should you fail to pay the total deficiency amount on due date, the provisions of Section 283, NIRC, provide
that in case of failure to pay "a deficiency tax, or any surcharge or interest therein, on due date appearing in
the notice and demand of the Commissioner, there shall be assessed and collected, on the unpaid amount,
interest at the rate prescribed in paragraph (a) hereof until the amount is fully paid, which amount shall form
part of the tax." x x x.30
Nowhere in the assessment letter does it state that PNB failed to file the returns and thus should be liable for
the mandatory 25% or even 50% penalty. This only means that PNB did not fail to file the quarterly returns.
Even assuming for the sake of argument that PNB failed to file the quarterly returns, PNOC filed an amended
return when the BIR Commissioner approved on 22 June 1987 the tax compromise. Under Revenue
Regulations No. 17-86, the taxpayer who avails of the tax compromise under EO No. 44 must file a tax return
for the income covered by the delinquent account. Section 2 (a) of Revenue Regulations No. 17-86 provides:
a) x x x
Where no return was filed, the taxpayer shall be considered delinquent as of the time the tax on such return
was due, and in availing of the compromise, a return shall be filed as a basis for computing the amount
of compromise to be paid. (Emphasis and underscoring supplied)
Thus, PNOC for sure filed a return in June 1987 even assuming its agent, PNB, failed to file the return on 25
January 1986. Under the worst-case scenario that PNB failed to file the return on 25 January 1986, the BIR still
had only until June 1990 to collect the tax from PNOC and PNB, applying the three-year period from PNOC's
actual filing of the return in June 1987. This is the rule in Section 318 (now 203) of the Tax Code, which
provides:
x x x Provided, That in case where a return is filed beyond the period prescribed by law, the three (3)-year
period shall be counted from the day the return was filed. x x x. (Emphasis supplied)
Whether the BIR had only until 24 January 1989, or 7 October 1989, or even until the end of June 1990 to
collect the tax would not really matter. The collection of the tax would still be time-barred in the present case
under any of these three prescriptive periods.
The BIR garnished PNB's funds with the Central Bank on 2 September 1992, long after the prescriptive
period had expired under any of the three prescriptive periods. The garnishment was thus void since the
BIR's right to collect the tax had already prescribed. The BIR did not also file any collection case in court
against PNB within any of the three prescriptive periods. The present case is not even a collection case
against PNB or PNOC. Before 2004, the year Republic Act No. 9282 took effect, the Court of Tax Appeals had
no jurisdiction to enforce the collection of taxes. Prior to 2004, judicial action to collect internal revenue taxes
fell under the jurisdiction of the regular trial courts.
In the case of PNOC, the BIR issued the assessment even earlier, on 8 August 1986. If we follow the
majority opinion's erroneous computation that the three-year period begins from the issuance of the
assessment, the BIR had only until 7 August 1989 to collect from PNOC the tax administratively or
judicially. If we assume, for the sake of argument, that there was a failure to file the return, the BIR had also
only until 7 August 1989, or three years after the issuance of the assessment, to collect the tax from
PNOC. This is pursuant to Section 319 (now 222) of the Tax Code, which provided:
Sec. 319. Exceptions as to period of limitation of assessment and collection of taxes - (a) In the case of x x x
failure to file a return, the tax may be assessed, or a proceeding in court for the collection of such tax may be
begun without assessment, at any time within ten years after discovery of the x x x omission: x x x
xxx
(a) Any internal revenue tax which has been assessed within the period of limitation above-specified
may be collected within three years following the assessment of the tax.31 (Emphasis supplied)
Until now, after a lapse of more than 18 years, the BIR has made no distraint or levy on PNOC's assets.
Neither has the BIR filed any collection case in court against PNOC. In short, the pleadings and the
evidence on record clearly establish that prescription had long set in to bar the collection of the tax
against PNB and PNOC.
The majority opinion, however, claims that prescription cannot bar the collection of PNOC's or PNB's
withholding tax liability because neither PNOC nor PNB raised the defense of prescription. The majority
opinion contends:
The undersigned believes that the defense of prescription of the period for the assessment and collection of
tax liabilities should be considered waived since it was not raised in the answers or any other pleadings
filed by PNOC and PNB. Such a defense had not been properly pleaded and the facts alleged and evidences
submitted by the parties were not sufficient to support a finding by the Cout on the matter. In Querol v.
Collector of Internal Revenue, this Court ruled that prescription, being a matter of defense, imposes on the
taxpayer to prove that the full period of the limitation has expired, and this requires him to positively
establish the date when the period started running and when the same was fully accomplished.
The majority opinion is clearly mistaken.
While the rule is that prescription is waived if not raised as a defense, the present case falls under the express
exception to this rule. Section 1, Rule 9 of the 1997 Rules of Civil Procedure provides:
Section 1. Defenses and objections not pleaded. - Defenses and objections not pleaded either in a motion to
dismiss or in the answer are deemed waived. However, when it appears from the pleadings or the
evidence on record that the court has no jurisdiction over the subject matter, that there is another action
pending between the same parties for the same cause, or that the action is barred by prior judgment or by
the statute of limitations, the court shall dismiss the claim. (Emphasis and underscoring supplied)
Thus, if the pleadings or evidence on record show that the action is barred by prescription, the court is
mandated to dismiss the action even if prescription is not raised as a defense.
Justice Florence D. Regalado, in Volume I of his Remedial law Compendium,32 explains this exception as
follows:
Under the amended provision, the following defenses are not waived even if not raised in a motion to
dismiss or in the answer: (a) lack of jurisdiction over the subject matter; (b) litis pendentia; (c) res judicata;
and (d) prescription of the action.
xxx
Res judicata and prescription of the claim have also been added as exceptions since they are grounds for
extinguishment of the claim. It would appear to be unduly technical, if not contrary to the rule on unjust
enrichment, to have the defending party respond all over again for the same claim which has already been
resolved or is no longer recoverable under the law. It is worth mentioning in this connection that, in Sec. 5 of
Rule 16 as amended, an order granting a motion to dismiss on the grounds, inter alia, of res judicata or
prescription shall bar the refiling of the same action or claim.
The presence of any of these four grounds authorizes the court to motu proprio dismiss the claim, that
is, the claims asserted in the complaint, counterclaim, crossclaim, third (fourth, etc.) – party complaint or
complaint-in-intervention (see Sec. 2, Rule 6). In order that it may do so, it is necessary, however, that such
grounds be raised in a motion to dismiss or in the answer with evidence duly adduced to prove the same, or
where such grounds appear in the other pleadings filed or in the evidence of record in the case.
Specifically with respect to the defense of prescription, the present provision is similar to the rule adopted in
civil cases, but dissimilar to the rule and rationale in criminal cases. In civil cases, it has been held that the
defense of prescription may be considered only if the same is invoked in the answer, except where the fact of
prescription appears in the allegations in the complaint or the evidence presented by the plaintiff, in
which case such defense is not deemed waived (Ferrer vs. Ericta, et al., L-41767, Aug. 23, 1978; Garcia
vs. Mathis, et al., L-48577, Sept. 30, 1980). It would thus appear that the non-waiver is dependent on the
timeliness of the invocation of the defense, or where such defense is a matter of record or evidence.
(Emphasis supplied)
The ruling of this Court in Gicano, et al. v. Gegato, et al.,33 decided in January 1988, became the basis of the
present Section 1 of Rule 9. In Gicano this Court ruled:
x x x We have ruled that trial courts have authority and discretion to dismiss an action on the ground of
prescription when the parties' pleadings or other facts on record show it to be indeed time-barred; (Francisco v.
Robles, Feb. 15, 1954; Sison v. McQuaid, 50 O.G. 97; Bambao v. Lednicky, Jan. 28, 1961; Cordova v.
Cordova, Jan. 14, 1958; Convets, Inc. v. NDC, Feb. 28, 1958; 32 SCRA 529; Sinaon v. Sorongan, 136 SCRA
408); and it may do so on the basis of a motion to dismiss, or an answer which sets up such ground as an
affirmative defense; or even if the ground is alleged after judgment on the merits, as in a motion for
reconsideration; or even if the defense has not been asserted at all, as where no statement thereof is
found in the pleadings, or where a defendant has been declared in default. What is essential only, to
repeat, is that the facts demonstrating the lapse of the prescriptive period, be otherwise sufficiently
and satisfactorily apparent on the record: either in the averments of the plaintiffs complaint, or
otherwise established by the evidence. (Emphasis supplied)
Thus, even before the adoption of the present Section 1 of Rule 9, prevailing jurisprudence had already
recognized the exceptions laid down in Section 1 of Rule 9.
The majority opinion further claims that the running of the prescriptive period was suspended when petitioner
filed with the Court of Tax Appeals on 8 April 1988 the present petition to declare void the tax compromise
between the BIR and PNOC. The majority opinion asserts that the running of the prescriptive period remains
suspended up to now. The majority opinion contends:
x x x However, the running of the prescriptive period for the collection of the assessment against PNB
is for the meantime suspended during the pendency of the case before the CTA, then before the Court
of Appeals, and finally before this Court, because the issue for resolution by the courts is whether or
not the assessment should actually be enforced.
The majority opinion's contention collides with the applicable provision of the Tax Code. Section 223 of the Tax
Code governs the suspension of the running of the prescriptive period to assess and collect internal revenue
taxes. Section 223 provides:
SEC. 223. Suspension of Running of Statute of Limitations. — The running of the Statute of Limitations
provided in Sections 203 and 222 on the making of assessment and the beginning of distraint or levy or a
proceeding in court for collection, in respect of any deficiency, shall be suspended for the period during
which the Commissioner is prohibited from making the assessment or beginning distraint or levy or a
proceeding in court and for sixty (60) days thereafter; when the taxpayer requests for a reinvestigation
which is granted by the Commissioner; when the taxpayer cannot be located in the address given by him in the
return filed upon which a tax is being assessed or collected: Provided, That, if the taxpayer informs the
Commissioner of any change in address, the running of the Statute of Limitations will not be suspended; when
the warrant of distraint or levy is duly served upon the taxpayer, his authorized representative, or a member of
his household with sufficient discretion, and no property could be located; and when the taxpayer is out of the
Philippines. (Emphasis supplied)
Section 223 suspends the running of the prescriptive period if the BIR Commissioner "is prohibited from x x x
beginning distraint or levy or a proceeding in court" to enforce collection of the tax assessed. In the
present case, the Court of Tax Appeals, Court of Appeals and this Court never prohibited the BIR
Commissioner from commencing a distraint, levy or civil suit against PNB or PNOC to collect the tax. No court
ever issued an order prohibiting the BIR from collecting the tax from PNB or PNOC. In Republic v. Ret,
34 this Court ruled:

As heretofore stated, the plaintiff-appellant made the assessment on January 20, 1951 and had up to January
20, 1956 to file the necessary action. It was only on September 5, 1957, that an action was filed in Court for the
collection of alleged deficiency income tax — far beyond the 5 year period. This notwithstanding, plaintiff-
appellant argues that during the pendency of the criminal cases, it was prohibited from instituting the civil
action for the collection of the deficiency taxes. This contention is untenable. The present complaint against the
defendant-appellee is not for the recovery of civil liability arising from the offense of falsification; it is for the
collection of deficiency income tax. The provisions of Section 1, Rule 107 (supra) that "after a criminal action
has been commenced, no civil action arising from the same offense can be prosecuted", is not applicable. The
said criminal cases would not affect, one way or another, the running of the prescriptive period for the
commencement of the civil suit. The criminal actions are entirely separate and distinct from the present civil
suit. There is nothing in the law which would have stopped the plaintiff-appellant from filing this civil
suit simultaneously with or during the pendency of the criminal cases. Assuming the applicability of the
rule, at most, the prosecution of the civil action would be suspended but not its filing within the prescribed
period. Section 332 of the Tax Code provides: "the running of the statutory limitation . . . shall be suspended for
the period during which the Collector of Internal Revenue is prohibited from making the assessment, or
beginning distraint or levy or a proceeding in court, and for sixty days thereafter". As heretofore stated, the
plaintiff-appellant was not prohibited by any order of the court or by any law from commencing or filing
a proceeding in court. x x x (Emphasis supplied)
The BIR could have filed a collection suit against PNB or PNOC with the proper regional trial court, which
before 2004 had jurisdiction over tax collection cases. At the very least, the BIR should have filed with the
proper regional trial court a collection case ad cautelam during the pendency of the present case in court. This
would have suspended the running of the prescriptive period. However, the BIR neglected to file a collection
case before 7 October 1989, the expiration of the prescriptive period to collect the tax from PNB.
The BIR could also have administratively collected the tax from PNB and PNOC. In fact, during the
pendency of the case in the Court of Tax Appeals, the BIR Commissioner administratively garnished PNB's
funds with the Central Bank, although the garnishment is void because the prescriptive period had already
expired even by the majority opinion's own computation of the prescriptive period. This only proves that
nothing prevented the BIR from administratively garnishing PNB's or PNOC's accounts even during
the pendency of the present case. However, the BIR garnished PNB's funds only after the prescriptive
period had expired on 7 October 1989.
Obviously, the BIR failed to collect the tax before 7 October 1989 because of the fault or negligence of the
BIR, and not because a court order prevented the BIR from collecting the tax before the expiration of the
prescriptive period on 7 October 1989. The BIR was free at any time to distrain or levy on the assets of PNB or
PNOC, as well as to file a collection suit before the regular courts against PNB or PNOC, even during the
pendency of the present petition in the various courts.
In particular, the BIR could have distrained or levied on the assets of PNB at any time because PNB was not
even a party to the tax compromise between the BIR and PNOC. Indeed, the BIR did garnish the funds of
PNB, but only after the expiration of the prescriptive period. The BIR simply slept on its rights.
Neither PNOC nor PNB instituted the present case against the BIR to prevent the collection of the tax. Private
respondent Tirso B. Savellano, who is not the taxpayer, originally filed this petition against the BIR
Commissioner only, and later on impleaded PNOC and PNB. This Court has applied Section 223 of the Tax
Code suspending the running of the prescriptive period in cases where the taxpayer sued the BIR
Commissioner to prevent the collection of a tax, as when the taxpayer disputed the validity or amount of
the assessment before the Court of Tax Appeals.35 This is not the situation in the present case since PNOC
and PNB have not sued the BIR Commissioner to prevent the collection of the tax, and they do not dispute the
validity or amount of the assessment issued against them.
Nothing legally prevented the BIR from collecting the tax, administratively or judicially, from PNOC or PNB at
any time before 7 October 1989. Thus, the BIR cannot invoke Section 223 of the Tax Code to claim the
suspension of the running of the prescriptive period during the pendency of the present case in the courts.
Conclusion
To conclude, the compromise agreement between the BIR and PNOC falls within the coverage of EO No. No.
44 and its implementing rules. The compromise agreement is not contrary to law, morals, good customs, public
order, or public policy.36 Thus, the compromise agreement is valid, and has the effect of res judicata on the
BIR and PNOC. In any event, the collection of the foregone tax is barred by prescription.
Accordingly, I dissent from the majority opinion. I vote to grant the petition, to declare valid the 22 June 1987
tax compromise between PNOC and the BIR, and to deny the claim of private respondent Tirso B. Savellano
for an additional informer's reward of P43,800,915.25.

SEPARATE OPINION
TINGA, J.:
I agree with the ponencia that no valid compromise agreement had been entered into between the Philippine
National Oil Company (PNOC) and the Bureau of Internal Revenue (BIR).
First, the coverage of the governing special compromise tax measure.
Executive Order No. 44, on which the compromise agreement was predicated, explicitly delineates the
parameters within which the amnesty provided therein may be availed of. Section 1 thereof allows the
compromise of disputed assessments or delinquent accounts pending as of 31 December 1985, viz.:
SECTION 1. The Commissioner of Internal Revenue or his duly authorized representatives may compromise
any disputed assessment or delinquent account pending as of December 31, 1985, upon the payment of
an amount equal to thirty percent (30%) of the basic tax assessed. In such cases, the Commissioner of Internal
Revenue or his duly authorized representatives shall condone the corresponding interests and penalties.
(Emphasis supplied)
The directive in Section 1 is reiterated in the first paragraph of Revenue Memorandum Circular No. 31-861,
Sections 2 and 3 of Revenue Regulation No. 17-862, and Section 1 of Revenue Memorandum Order No.
39-86.3
Evidently, E.O. No. 44 applies only to "disputed assessment or delinquent account pending as of December
31, 1985". This is not an executive issuance meant to give blanket authority on the Commissioner of Internal
Revenue to compromise away tax liabilities. In fact, the "cut-off" period stipulated in the executive order refers
to a date nine months prior to the date of the promulgation of the issuance, 4 September 1986.
The authority to compromise was delegated for a specific purpose, as stated in E.O. No. 44. Significantly in
that regard, the Executive Order is not a mere executive issuance but a legislative edict in much the same
fashion as an Act of Congress, issued as it was by then President Corazon C. Aquino in the exercise of her
legislative powers under the Freedom Constitution. The perambulatory clauses of E.O. No. 44 state the need
to clear the backlog of pending cases of disputed assessments and delinquent accounts4 in view of the fact
that the records of Bureau of Internal Revenue show that over the past ten years, a great number of cases
involving disputed assessments and delinquent accounts for internal revenue had accumulated.5 The
interpretation of the provisions of E.O. No. 44 cannot be strained in order to cover taxes that accrued after 31
December 1985, since this would no longer be included in the "backlog" adverted to in the issuance.
Parenthetically, the Executive Order is akin to a tax exemption statute which should be construed strictly
against the taxpayer.
The taxes sought to be compromised in this case concern the final tax on interest income representing the
earnings and/or yield from PNOC's money placements with the Philippine National Bank (PNB) for the period
from 15 October 1984 to 15 October 1986. Evidently, a cursory glance reveals that the PNOC cannot invoke
E.O. No. 44 with reference to its entire tax liability, as the period covered under the Executive Order was only
up to 31 December 1985. The withholding taxes due for the period of 01 January 1986 to 16 October 1986 are
neither disputed assessments nor delinquent accounts pending as of 31 December 1985.
Moreover, these are taxes that accrue from the yield of interest income of money market placements, and
clearly not at the time such placements were made by the PNOC. Even if the money market placements were
made in 1984 or 1985, it would not necessarily mean that the interest yields on these placements were paid
out or credited during those years. It is unclear when exactly between 1984 to 1986 did such interest incomes
had accrued, but admittedly this is a question of fact that need not be reviewed by this Court.
Nonetheless, I maintain that even without need of ascertaining when exactly such interest income accrued, the
compromise agreement in question is null and void in its entirety for being contrary to E.O. No. 44.
While PNB failed to submit any application for compromise, PNOC submitted two offers – not applications for
compromise settlement. PNOC's first proposal, contained in a letter dated 22 September 1986, offered to clear
its basic6 tax liability through a set-off thereof against the claim for tax refund/credit of the National Power
Corporation (NPC), which amount was also supposedly a receivable of PNOC from NPC. This proposal was
reiterated in another letter dated 14 October 1986. The operative portions of the first letter read:
We would like to amicably settle this liability with the BIR. In this regard, we wish to invoke the authority vested
by law in your office, particularly under Section 246 of the national Internal Revenue Code, as amended, and
the spirit underlying Executive Order No. 44 dated September 4, 1986. Consequently, we hereby request for a
compromise settlement and submit our offer for a compromise of the matter. xxx
(2) That PNOC be permitted to set-off its foregoing mentioned tax liability of P304,419,396.83 against the tax
refund/credit claims of the National Power Corporation (NPC) for specific taxes on fuel oil sold to NPC totaling
P335,239,450.21, which tax refunds/credits are actually receivable accounts of our Company from NPC.7
Section 1 of E.O. No. 44 is explicit in declaring that the compromise of a disputed assessment or delinquent
account is accomplished through payment of an amount equal to thirty percent (30%) of the basic tax
assessed, a generous sum if I may add. Payment, as defined in this jurisdiction, means the delivery of money
or the performance of an obligation8. It institutes a totally different mode of extinguishment of an obligation from
compensation and/or confusion or merger9. PNOC invokes the concepts of compensation and/or confusion or
merger as it seeks to have the NPC, which allegedly had outstanding payables due to PNOC, absorb PNOC's
tax liabilities with its own outstanding tax credit due from the BIR.
However, as noted by the BIR in its initial response to PNOC's proposal, NPC's claim was still under process.
Hence, at the time PNOC offered its terms for compromise to the BIR, no extinguishment of PNOC's tax
liability could have taken place — whether by compensation, confusion or merger. There was no mutual
creditor-debtor relationship between PNOC and the BIR – the existence of which is one of the requisites for
compensation to take place.10 Also, neither was there an outstanding creditor-debtor relationship between the
NPC and the BIR. Moreover, the "credit" which PNOC proposed to use for the purpose of offsetting emanated
from a segregate obligation than that due the BIR from PNOC; hence, there could be no confusion or merger11
which could lead to payment.
In short, there was no legal basis for the NPC then to offset PNOC's tax liabilities through its own "tax credit,"
as the said "tax credit" had not, in the first place, yet ripened as an existing obligation.
For that reason, PNOC cannot be deemed as having made payment, or even a valid offer of payment through
its first two letters, as there was no legal basis to effect its proposed mode of payment. In the meantime, the
outstanding tax liability had accrued and eventually, the deadline set forth in RMO No. 39-86 passed.
So now, the prescribed period of availment and the effective duration of the special compromise tax measure.
RMO No. 39-86 pertains to "Guidelines for Implementation of Executive Order No. 44 re compromise
settlement of (1) delinquent tax accounts; or (2) disputed tax assessments as of December 31, 1985".
Paragraph 2 thereof is explicit as to the period for availment of the compromise settlement:
2. Period for availment. – Filing of application for compromise settlement under the said law shall be effective
only until March 31, 1987. Applications filed on or before this date shall be valid even if the payment or
payments of the compromise amount shall be made after the said date, subject, however, to the provisions of
Executive Order No. 44 and its implementing Revenue Regulations No. 17-86. (emphasis supplied)
The deadline was occasioned by Section 6 of E.O. No. 44, which itself provides for the term of effectivity of the
period for compromise:
Section 6. This Executive Order shall take effect immediately and shall remain effective until March 31, 1987.
The plain meaning of paragraph (2), in relation to Section 6, E.O. No. 44, is that the deadline for the
submission of an application for compromise settlement shall be effective only until 31 March 1987. As of that
point, had PNOC submitted an application for compromise settlement within the contemplation of law?
Plainly, the two letters in 1986 of PNOC are not in the form of an "application for compromise settlement".
Though the Court need not be strict in demanding obeisance with the formal requisites, I would consider any
valid form of an application for compromise should concede the liability for tax, and make a valid offer of
payment. To require otherwise would render a mockery of the offer of tax compromise. Owing to the legal
implausibility of the initial offer of PNOC to the BIR, I could not consider the first two letters as a valid
application for compromise settlement. Moreover, the BIR expressly rejected this application, if it could be
construed as such, as early as November of 1986. If there was indeed a bona fide intent on the part of PNOC
to comply with E.O. No. 44 and its attendant revenue issuances, it should have exerted efforts to comply with
this deadline set forth under RMO No. 39-86, in light of the BIR's rejection of its earlier offer. Instead, the 31
March 1987 deadline passed without a word or renewed offer from the PNOC.
Instead, on 09 June 1987, or two months after the deadline had elapsed, PNOC made a second, different
offer, proposing by way of compromise to pay thirty (30%) of its basic tax liability, specifically invoking Section
1 of E.O. 44. This new offer was subsequently accepted by the BIR.
The contrary view argues that owing to the administrative power of the tax commissioner, such subsequent
acceptance can be deemed as an effective extension of the deadline set forth under RMO No. 39-86.
However, E.O. No. 44 is explicit in declaring that its effectivity subsists only until 31 March 1987, a fact which is
similarly demonstrated by paragraph (2) of RMO No. 39-86.
The dissent relies on the fact that E.O. No. 44, issued in the exercise of legislative powers then vested in
President Aquino, is a special law of more specific application in this case than the Tax Code. Yet the
delegation of authority to the tax commissioner to effect compromises is limited by the confines of E.O. No. 44,
which is explicit in stating that its effectivity runs only until 31 March 1987. Hence, contrary to the dissenting
view, the BIR Commissioner had no authority to extend the effectivity of E.O. No. 44, or the deadline
prescribed thereupon. RMO No. 39-86 properly recognizes such limitation, and assuming that the subsequent
acts of the tax commissioner contravene the deadline set by law and regulation, those acts should be deemed
as beyond the ambit of delegated power, and thus void. Under the circumstances, only Congress could
have validly extended the effectivity of the special compromise tax measure.
Thus, the ponencia correctly concludes that the compromise agreement entered into on 22 June 1987 is void.
It was entered into after the lapse of the authority of BIR Commissioner to effect such compromise agreement,
owing to the prescribed effectivity of E.O. No. 44, from which such authority was derived. Needless to say,
much trouble would have been saved had the PNOC been timely in seeking a compromise agreement with the
BIR, and prudent enough in proposing one that had basis under law. It cannot rely upon its status as a
component of the government as basis for relief.
We should not discount the damage inflicted by the void compromise agreement on the informer, Tirso
Savellano. The financial remuneration to be obtained by the informer is designed to alleviate whatever socio-
political stigma that may attach as a result of the information that is divulged. The informer's right is predicated
on the amount actually paid, and if the amount paid is less than what is due as a result of an unauthorized
compromise, then the informer indubitably has an interest to assail the said compromise.
Finally, the dissent raises the argument that prescription had run to bar the annulment of the compromise
agreement. Notably, this issue was not raised before any of the fora involved, by the Court of Tax Appeals, the
Court of Appeals, or this Court. Neither was it discussed in any of the assailed rulings.
The proper taxes due in this case have actually been paid to the government. Petitioners unfortunately seek
the refund of what has been already collected, despite the fact that they have all along conceded, not denying
at all, the basis for their tax liability. The Court should not be privy to the divestiture of the huge tax payment
already remitted to the cash-strapped government if there is no unequivocal basis for the return thereof. More
so, should it not be a party to the forfeiture of the informer's reward to which the private respondent has a
vested right as a matter of law and equity.
I vote to DENY the petitions.
!
THIRD DIVISION
G.R. No. 155282 January 17, 2005
MOVIE AND TELEVISION REVIEW AND CLASSIFICATION BOARD (MTRCB), petitioner,
vs.
ABS-CBN BROADCASTING CORPORATION and LOREN LEGARDA, respondents.
DECISION
SANDOVAL-GUTIERREZ, J.:
For our resolution is the petition for review on certiorari under Rule 45 of the 1997 Rules of Court, as amended,
filed by petitioner Movie and Television Review and Classification Board (MTRCB) against ABS-CBN
Broadcasting Corporation (ABS-CBN) and former Senator Loren Legarda, respondents, assailing the (a)
Decision dated November 18, 1997,1 and (b) Order dated August 26, 20022 of the Regional Trial Court, Branch
77, Quezon City, in Civil Case No. Q-93-16052.
The facts are undisputed.
On October 15, 1991, at 10:45 in the evening, respondent ABS-CBN aired "Prosti-tuition," an episode of the
television (TV) program "The Inside Story" produced and hosted by respondent Legarda. It depicted female
students moonlighting as prostitutes to enable them to pay for their tuition fees. In the course of the program,
student prostitutes, pimps, customers, and some faculty members were interviewed. The Philippine Women’s
University (PWU) was named as the school of some of the students involved and the facade of PWU Building
at Taft Avenue, Manila conspicuously served as the background of the episode.
The showing of "The Inside Story" caused uproar in the PWU community. Dr. Leticia P. de Guzman, Chancellor
and Trustee of the PWU, and the PWU Parents and Teachers Association filed letter-complaints3 with petitioner
MTRCB. Both complainants alleged that the episode besmirched the name of the PWU and resulted in the
harassment of some of its female students.
Acting on the letter-complaints, the MTRCB Legal Counsel initiated a formal complaint with the MTRCB
Investigating Committee, alleging among others, that respondents (1) did not submit "The Inside Story" to
petitioner for its review and (2) exhibited the same without its permission, thus, violating Section 74 of
Presidential Decree (P.D.) No. 19865 and Section 3,6 Chapter III and Section 7,7 Chapter IV of the MTRCB
Rules and Regulations.8
In their answer,9 respondents explained that the "The Inside Story" is a "public affairs program, news
documentary and socio-political editorial," the airing of which is protected by the constitutional provision on
freedom of expression and of the press. Accordingly, petitioner has no power, authority and jurisdiction to
impose any form of prior restraint upon respondents.
On February 5, 1993, after hearing and submission of the parties’ memoranda, the MTRCB Investigating
Committee rendered a Decision, the decretal portion of which reads:
"WHEREFORE, the aforementioned premises, the respondents are ordered to pay the sum of TWENTY
THOUSAND PESOS (₱20,000.00) for non-submission of the program, subject of this case for review and
approval of the MTRCB.
Heretofore, all subsequent programs of the ‘The Inside Story’ and all other programs of the ABS-CBN Channel
2 of the same category shall be submitted to the Board of Review and Approval before showing; otherwise the
Board will act accordingly."101awphi1.nét
On appeal, the Office of Atty. Henrietta S. Mendez, Chairman of the MTRCB, issued a Decision dated March
12, 1993 affirming the above ruling of its Investigating Committee.11 Respondents filed a motion for
reconsideration but was denied in a Resolution dated April 14, 1993.12
Respondents then filed a special civil action for certiorari with the Regional Trial Court (RTC), Branch 77,
Quezon City. It seeks to: (1) declare as unconstitutional Sections 3(b),13 3(c),14 3(d),15 4,16 7,17 and 1118 of P. D.
No. 1986 and Sections 3,19 7,20 and 2821 (a) of the MTRCB Rules and Regulations;22 (2) (in the alternative)
exclude the "The Inside Story" from the coverage of the above cited provisions; and (3) annul and set aside the
MTRCB Decision dated March 12, 1993 and Resolution dated April 14, 1993. Respondents averred that the
above-cited provisions constitute "prior restraint" on respondents’ exercise of freedom of expression and of the
press, and, therefore, unconstitutional. Furthermore, the above cited provisions do not apply to the "The Inside
Story" because it falls under the category of "public affairs program, news documentary, or socio-political
editorials" governed by standards similar to those governing newspapers.
On November 18, 1997, the RTC rendered a Decision23 in favor of respondents, the dispositive portion of
which reads:
"WHEREFORE, PREMISES CONSIDERED, judgment is hereby rendered:
1. ANNULLING AND SETTING ASIDE the assailed Decision and Resolution of MTRCB dated March 12,
1993;
2. DECLARING AND DECREEING that Sections 3 (b), (c), and (d), 4, 7, and 11 of P.D. No. 1986 and Sections
3, 7, 28 (a) of its Implementing Rules do not cover the TV Program "The Inside Story" and other similar
programs, they being public affairs programs which can be equated to newspapers; and
3. MAKING PERMANENT the Injunction against Respondents or all persons acting in their behalf.
SO ORDERED."
Petitioner filed a motion for reconsideration but was denied.24
Hence, this petition for review on certiorari.
Petitioner MTRCB through the Solicitor General, contends inter alia: first, all television programs, including
"public affairs programs, news documentaries, or socio-political editorials," are subject to petitioner’s power of
review under Section 3 (b) of P.D. No. 1986 and pursuant to this Court’s ruling in Iglesia ni Cristo vs. Court of
Appeals ;25 second, television programs are more accessible to the public than newspapers, thus, the liberal
regulation of the latter cannot apply to the former; third, petitioner’s power to review television programs under
Section 3(b) of P. D. No. 1986 does not amount to "prior restraint;" and fourth, Section 3(b) of P. D. No. 1986
does not violate respondents’ constitutional freedom of expression and of the press.
Respondents take the opposite stance.
The issue for our resolution is whether the MTRCB has the power or authority to review the "The Inside Story"
prior to its exhibition or broadcast by television.
The petition is impressed with merit.
The present controversy brings into focus the provisions of Section 3 of P. D. No. 1986, partly reproduced as
follows:
"SEC. 3. Powers and Functions. – The BOARD shall have the following functions, powers and duties:
xxxxxx
b) To screen, review and examine all motion pictures as herein defined, television programs, including
publicity materials such as advertisements, trailers and stills, whether such motion pictures and publicity
materials be for theatrical or non-theatrical distribution, for television broadcast or for general viewing, imported
or produced in the Philippines, and in the latter case, whether they be for local viewing or for export.1a\^/
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c) To approve or disapprove, delete objectionable portions from and/or prohibit the importation, exportation,
production, copying, distribution, sale, lease exhibition and/or television broadcast of the motion pictures,
television programs and publicity materials subject of the preceding paragraph, which, in the judgment of the
BOARD applying contemporary Filipino cultural values as standard, are objectionable for being immoral,
indecent, contrary to law and/or good customs, injurious to the prestige of the Republic of the Philippines or its
people, or with a dangerous tendency to encourage the commission of violence or of a wrong or crime, such as
but not limited to:
xxx
d) To supervise, regulate, and grant, deny or cancel, permits for the importation, exportation, production,
copying, distribution, sale, lease, exhibition, and/or television broadcast of all motion pictures, television
programs and publicity materials, to the end and that no such pictures, programs and materials as are
determined by the BOARD to be objectionable in accordance with paragraph (c) hereof shall be imported,
exported, produced, copied, reproduced, distributed, sold, leased, exhibited and/or broadcast by television;
x x x x x x."
Vis-a-vis the foregoing provisions, our task is to decide whether or not petitioner has the power to review the
television program "The Inside Story." The task is not Herculean because it merely resurrects this Court En
Banc’s ruling in Iglesia ni Cristo vs. Court of Appeals.26 There, the Iglesia ni Cristo sought exception from
petitioner’s review power contending that the term "television programs" under Sec. 3 (b) does not include
"religious programs" which are protected under Section 5, Article III of the Constitution.27 This Court, through
Justice Reynato Puno, categorically ruled that P.D. No. 1986 gives petitioner "the power to screen, review and
examine "all television programs," emphasizing the phrase "all television programs," thus:
"The law gives the Board the power to screen, review and examine all ‘television programs.’ By the
clear terms of the law, the Board has the power to ‘approve, delete x x x and/or prohibit the x x x exhibition
and/or television broadcast of x x x television programs x x x.’ The law also directs the Board to apply
‘contemporary Filipino cultural values as standard’ to determine those which are objectionable for being
‘immoral, indecent, contrary to law and/or good customs, injurious to the prestige of the Republic of the
Philippines and its people, or with a dangerous tendency to encourage the commission of violence or of a
wrong or crime.’"
Settled is the rule in statutory construction that where the law does not make any exception, courts may not
except something therefrom, unless there is compelling reason apparent in the law to justify it.28 Ubi lex non
distinguit nec distinguere debemos. Thus, when the law says "all television programs," the word "all" covers all
television programs, whether religious, public affairs, news documentary, etc.29 The principle assumes that the
legislative body made no qualification in the use of general word or expression.30
It then follows that since "The Inside Story" is a television program, it is within the jurisdiction of the MTRCB
over which it has power of review.
Here, respondents sought exemption from the coverage of the term "television programs" on the ground that
the "The Inside Story" is a "public affairs program, news documentary and socio-political editorial" protected
under Section 4,31 Article III of the Constitution. Albeit, respondent’s basis is not freedom of religion, as in
Iglesia ni Cristo,32 but freedom of expression and of the press, the ruling in Iglesia ni Cristo applies squarely to
the instant issue. It is significant to note that in Iglesia ni Cristo, this Court declared that freedom of religion has
been accorded a preferred status by the framers of our fundamental laws, past and present, "designed to
protect the broadest possible liberty of conscience, to allow each man to believe as his conscience directs x x
x." Yet despite the fact that freedom of religion has been accorded a preferred status, still this Court, did not
exempt the Iglesia ni Cristo’s religious program from petitioner’s review power.
Respondents claim that the showing of "The Inside Story" is protected by the constitutional provision on
freedom of speech and of the press. However, there has been no declaration at all by the framers of the
Constitution that freedom of expression and of the press has a preferred status.
If this Court, in Iglesia ni Cristo, did not exempt religious programs from the jurisdiction and review power of
petitioner MTRCB, with more reason, there is no justification to exempt therefrom "The Inside Story" which,
according to respondents, is protected by the constitutional provision on freedom of expression and of the
press, a freedom bearing no preferred status.
The only exceptions from the MTRCB’s power of review are those expressly mentioned in Section 7 of P. D.
No. 1986, such as (1) television programs imprinted or exhibited by the Philippine Government and/or its
departments and agencies, and (2) newsreels. Thus:
"SEC. 7. Unauthorized showing or exhibition. – It shall be unlawful for any person or entity to exhibit or
cause to be exhibited in any moviehouse, theatre, or public place or by television within the Philippines any
motion picture, television program or publicity material, including trailers, and stills for lobby displays in
connection with motion pictures, not duly authorized by the owner or his assignee and passed by the BOARD;
or to print or cause to be printed on any motion picture to be exhibited in any theater or public place or by
television a label or notice showing the same to have been officially passed by the BOARD when the same has
not been previously authorized, except motion pictures, television programs or publicity material
imprinted or exhibited by the Philippine Government and/or its departments and agencies, and
newsreels."
Still in a desperate attempt to be exempted, respondents contend that the "The Inside Story" falls under the
category of newsreels.
Their contention is unpersuasive.
P. D. No. 1986 does not define "newsreels." Webster’s dictionary defines newsreels as short motion picture
films portraying or dealing with current events.33 A glance at actual samples of newsreels shows that they are
mostly reenactments of events that had already happened. Some concrete examples are those of Dziga
Vertov’s Russian Kino-Pravda newsreel series (Kino-Pravda means literally "film-truth," a term that was later
translated literally into the French cinema verite) and Frank Capra’s Why We Fight series.34 Apparently,
newsreels are straight presentation of events. They are depiction of "actualities." Correspondingly, the
MTRCB Rules and Regulations35 implementing P. D. No. 1986 define newsreels as "straight news reporting,
as distinguished from news analyses, commentaries and opinions. Talk shows on a given issue are not
considered newsreels."36 Clearly, the "The Inside Story" cannot be considered a newsreel. It is more of a
public affairs program which is described as a variety of news treatment; a cross between pure television news
and news-related commentaries, analysis and/or exchange of opinions.37 Certainly, such kind of program is
within petitioner’s review power.
It bears stressing that the sole issue here is whether petitioner MTRCB has authority to review "The Inside
Story." Clearly, we are not called upon to determine whether petitioner violated Section 4, Article III (Bill of
Rights) of the Constitution providing that no law shall be passed abridging the freedom of speech, of
oppression or the press. Petitioner did not disapprove or ban the showing of the program. Neither did it cancel
respondents’ permit. Respondents were merely penalized for their failure to submit to petitioner "The Inside
Story" for its review and approval. Therefore, we need not resolve whether certain provisions of P. D. No. 1986
and the MTRCB Rules and Regulations specified by respondents contravene the Constitution.
Consequently, we cannot sustain the RTC’s ruling that Sections 3 (c) (d), 4, 7 and 11 of P. D. No. 1986 and
Sections 3, 7 and 28 (a) of the MTRCB Rules and Regulations are unconstitutional. It is settled that no
question involving the constitutionality or validity of a law or governmental act may be heard and decided by
the court unless there is compliance with the legal requisites for judicial inquiry, namely: (1) that the question
must be raised by the proper party; (2) that there must be an actual case or controversy; (3) that the question
must be raised at the earliest possible opportunity; and, (4) that the decision on the constitutional or legal
question must be necessary to the determination of the case itself.38
WHEREFORE, the instant petition is GRANTED.l^vvphi1.net The assailed RTC Decision dated November 18,
1997 and Order dated August 26, 2002 are hereby REVERSED. The Decision dated March 12, 1993 of
petitioner MTRCB is AFFIRMED. Costs against respondents.
SO ORDERED.
Panganiban, (Chairman), Corona, Carpio-Morales, and Garcia, JJ., concur.

Republic of the Philippines


SUPREME COURT
Manila
FIRST DIVISION
G.R. No. 201043 June 16, 2014
REPUBLIC OF THE PHILIPPINES, represented by the Armed Forces of the Philippines Finance Center
(AFPFC), Petitioner,
vs.
DAISY R. YAHON, Respondent.
DECISION
VILLARAMA, JR., J.:
Before the Court is a petition for review on certiorari under Rule 45 which seeks to nullify and set aside the
Decision1 dated November 29, 2011 and Resolution2 dated March 9, 2012 of the Court of Appeals (CA)
Mindanao Station in CA-G.R. SP No. 02953-MIN. The CA affirmed the orders and decision of the Regional
Trial Court (RTC) of Cagayan de Oro City, Branch 22 granting temporary and permanent protection orders, and
denying the motion to lift the said temporary protection order (TPO).
Daisy R. Yahon (respondent) filed a petition for the issuance of protection order under the provisions of
Republic Act (R.A.) No. 9262,3 otherwise known as the "Anti-Violence Against Women and Their Children Act
of 2004," against her husband, S/Sgt. Charles A. Yahon (S/Sgt. Yahon), an enlisted personnel of the Philippine
Army who retired in January 2006. Respondent and S/Sgt. Yahon were married on June 8, 2003. The couple
did not have any child but respondent has a daughter with her previous live-in partner.
On September 28, 2006, the RTC issued a TPO, as follows:
Finding the herein petition for the Issuance of Protection Order to be sufficient in form and substance and to
prevent great and irreparable injury to the petitioner, a TEMPORARY PROTECTION ORDER is forthwith
issued to respondent, S/SGT. CHARLES A. YAHON directing him to do the following acts:
1. Respondent is enjoined from threatening to commit or committing further acts of physical abuse and
violence against the petitioner;
2. To stay away at a distance of at least 500 meters from petitioner, her residence or her place of work;
3. To refrain from harassing, annoying, intimidating, contacting or communicating with petitioner; 4.
Respondent is prohibited from using or possessing any firearm or deadly weapon on occasions not related to
his job;
5. To provide reasonable financial spousal support to the petitioner.
The Local Police Officers and the Barangay Officials through the Chairman in the area where the petitioner and
respondent live at Poblacion, Claveria, Misamis Oriental and Bobuntogan, Jasaan, Misamis Oriental are
directed to respond to any request for assistance from the petitioner for the implementation of this order. They
are also directed to accompany the petitioner to their conjugal abode at Purok 2, Bobuntogan, Jasaan,
Misamis Oriental to get her personal belongings in order to insure the safety of the petitioner.
The Deputy Sheriff of this Court is ordered to immediately serve the Temporary Protection Order (TPO) upon
the respondent personally and to seek and obtain the assistance of law enforcement agents, if needed, for
purposes of effecting the smooth implementation of this order.
In the meantime, let copy of this order and petition be served upon the respondent for him to file an
OPPOSITION within a period of five (5) days from receipt hereof and let a Preliminary Conference and hearing
on the merits be set on October 17, 2006 at 2:00 o’clock in the afternoon.
To insure that petitioner can receive a fair share of respondent’s retirement and other benefits, the following
agencies thru their heads are directed to WITHHOLD any retirement, pension and other benefits of
respondent, S/SGT. CHARLES A. YAHON, a member of the Armed Forces of the Philippines assigned at 4ID,
Camp Evangelista, Patag, Cagayan de Oro City until further orders from the court:
1. Commanding General/Officer of the Finance Center of the Armed Forces of the Philippines, Camp Emilio
Aguinaldo, Quezon City;
2. The Management of RSBS, Camp Emilio Aguinaldo, Quezon City;
3. The Regional Manager of PAG-IBIG, Mortola St., Cagayan de Oro City.
VIOLATION OF THIS ORDER IS PUNISHABLE BY LAW.
IF THE RESPONDENT APPEARS WITHOUT COUNSEL ON THE DATE OF THE
PRELIMINARYCONFERENCE AND HEARING ON THE MERITS OF THE ISSUANCE OF A PERMANENT
PROTECTION ORDER, THE COURT SHALL NOT RESCHEDULE OR POSTPONE THE PRELIMINARY
CONFERENCE AND HEARING BUT SHALL APPOINT A LAWYER FOR THE RESPONDENT AND
IMMEDIATELY PROCEED WITH THE SAID HEARING.
IF THE RESPONDENT FAILS TO APPEAR ON THE DATE OF THE PRELIMINARY CONFERENCE AND
HEARING ON THE MERITS DESPITE PROPER NOTICE, THE COURT SHALL ALLOW EX-PARTE
PRESENTATION OF EVIDENCE BY THE PETITIONER AND RENDER JUDGMENT ON THE BASIS OF THE
PLEADINGS AND EVIDENCE ON RECORD. NO DELEGATION OF THE RECEPTION OF EVIDENCE SHALL
BE ALLOWED.
SO ORDERED.4 (Emphasis supplied.)
S/Sgt. Yahon, having been personally served with copy of the TPO, appeared during the scheduled pre-trial
but informed the court that he did not yet have a counsel and requested for time to hire his own counsel.
However, he did not hire a counsel nor file an opposition or answer to the petition. Because of his failure to
appear in the subsequent hearings of the case, the RTC allowed the ex-parte presentation of evidence to
determine the necessity of issuance of a Permanent Protection Order (PPO).
Meanwhile, as prayed for by respondent who manifested that S/Sgt. Yahon deliberately refused to give her
spousal support as directed in the TPO (she claimed that she had no source of livelihood since he had told her
to resign from her job and concentrate on keeping their house), the RTC issued another order directing S/Sgt.
Yahon to give respondent spousal support in the amount of ₱4,000.00 per month and fifty percent (50%) of his
retirement benefits which shall be automatically deducted and given directly to respondent.5
In her testimony, respondent also said that S/Sgt. Yahon never complied with the TPO as he continued making
threats and inflicting physical abuse on her person, and failed to give her spousal support as ordered by the
court.
On July 23, 2007, the RTC rendered its Decision,6 as follows:
After careful review and scrutiny of the evidence presented in this case, this court finds that there is a need to
permanently protect the applicant, Daisy R. Yahon from further acts of violence that might be committed by
respondent against her. Evidences showed that respondent who was a member of the Armed Forces of the
Philippines assigned at the Headquarters 4ID Camp Evangelista, Cagayan de Oro City had been repeatedly
inflicting physical, verbal, emotional and economic abuse and violence upon the petitioner. Respondent in
several instances had slapped, mauled and punched petitioner causing her physical harm. Exhibits G and D
are medical certificates showing physical injuries suffered by petitioner inflicted by the respondent at instances
of their marital altercations. Respondent at the height of his anger often poked a gun on petitioner and
threatened to massacre her and her child causing them to flee for their lives and sought refuge from other
people. He had demanded sex from petitioner at an unreasonable time when she was sick and chilling and
when refused poked a gun at her. Several police blotters were offered as evidence by petitioner documenting
the incidents when she was subjected to respondent’s ill temper and ill treatment. Verbally, petitioner was not
spared from respondent’s abuses by shouting at her that he was wishing she would die and he would celebrate
if it happens and by calling and sending her threatening text messages. These incidents had caused petitioner
great psychological trauma causing her [to] fear for her life and these forced her to seek refuge from the court
for protection. Economically, petitioner was also deprived by respondent of her spousal support despite order
of the court directing him to give a monthly support of Php4,000.00. In view of the foregoing, this court finds a
need to protect the life of the petitioner not only physically but also emotionally and psychologically.
Based on the evidence presented, both oral and documentary, and there being no controverting evidence
presented by respondent, this Court finds that the applicant has established her case by preponderance of
evidence.
WHEREFORE, premises considered, judgment is hereby rendered GRANTING the petition, thus, pursuant to
Sec. 30 of A.M. No. 04-10-1-SC, let a PERMANENT PROTECTION ORDER be issued immediately and
respondent, S/Sgt. CHARLES A.YAHON is ordered to give to petitioner, DAISY R. YAHON the amount of
FOUR THOUSAND PESOS (Php4,000.00) per month by way of spousal support.
Pursuant to the order of the court dated February 6, 2007, respondent, S/Sgt. Charles A. Yahon is directed to
give it to petitioner 50% of whatever retirement benefits and other claims that may be due or released to him
from the government and the said share of petitioner shall be automatically deducted from respondent’s
benefits and claims and be given directly to the petitioner, Daisy R. Yahon.
Let copy of this decision be sent to the Commanding General/Officer of Finance Center of the Armed Forces of
the Philippines, Camp Emilio Aguinaldo, Quezon City; the Management of RSBS, Camp Emilio Aguinaldo,
Quezon City and the Regional Manager of PAG-IBIG, Mortola St., Cagayan de Oro City for their guidance and
strict compliance.
SO ORDERED.7 (Emphasis supplied.)
Herein petitioner Armed Forces of the Philippines Finance Center (AFPFC), assisted by the Office of the Judge
Advocate General (OTJAG), AFP, filed before the RTC a Manifestation and Motion (To Lift Temporary
Protection Order Against the AFP)8 dated November 10, 2008. Stating that it was making a limited and special
appearance, petitioner manifested that on August 29, 2008, it furnished the AFP Pension and Gratuity
Management Center (PGMC) copy of the TPO for appropriate action. The PGMC, on September 2, 2008,
requested the Chief, AFPFC the temporary withholding of the thirty-six (36) Months Lump Sum (MLS) due to S/
Sgt. Yahon. Thereafter, on October 29, 2008, PGMC forwarded a letter to the Chief of Staff, AFP for the
OTJAG for appropriate action on the TPO, and requesting for legal opinion as to the propriety of releasing the
36 MLS of S/Sgt. Yahon. Petitioner informed the RTC that S/Sgt. Yahon’s check representing his 36 MLS had
been processed and is ready for payment by the AFPFC, but to date said check has not been claimed by
respondent.
Petitioner further asserted that while it has initially discharged its obligation under the TPO, the RTC had not
acquired jurisdiction over the military institution due to lack of summons, and hence the AFPFC cannot be
bound by the said court order. Additionally, petitioner contended that the AFPFC is not a party-in-interest and is
a complete stranger to the proceedings before the RTC on the issuance of TPO/PPO. Not being impleaded in
the case, petitioner lamented that it was not afforded due process and it was thus improper to issue execution
against the AFPFC. Consequently, petitioner emphasized its position that the AFPFC cannot be directed to
comply with the TPO without violating its right to procedural due process.
In its Order9 dated December 17, 2008, the RTC denied the aforesaid motion for having been filed out of time.
It noted that the September 28, 2006 TPO and July 23, 2007 Decision granting Permanent Protection Order
(PPO) to respondent had long become final and executory.
Petitioner’s motion for reconsideration was likewise denied under the RTC’s Order10 dated March 6, 2009.
On May 27, 2009, petitioner filed a petition for certiorari before the CA praying for the nullification of the
aforesaid orders and decision insofar as it directs the AFPFC to automatically deduct from S/Sgt. Yahon’s
retirement and pension benefits and directly give the same to respondent as spousal support, allegedly issued
with grave abuse of discretion amounting to lack of jurisdiction. Respondent filed her Comment with Prayer for
Issuance of Preliminary Injunction, manifesting that there is no information as to whether S/Sgt. Yahon already
received his retirement benefit and that the latter has repeatedly violated the TPO, particularly on the provision
of spousal support.
After due hearing, the CA‘s Twenty-Second Division issued a Resolution11 granting respondent’s application,
viz:
Upon perusal of the respective pleadings filed by the parties, the Court finds meritorious private respondent’s
application for the issuance of an injunctive relief. While the 36-month lump sum retirement benefits of S/Sgt.
Charles A. Yahon has already been given to him, yet as admitted by petitioner itself, the monthly pension after
the mentioned retirement benefits has not yet been released to him. It appears that the release of such
pension could render ineffectual the eventual ruling of the Court in this Petition.
IN VIEW OF THE FOREGOING, let a WRIT OF PRELIMINARY INJUNCTION issue enjoining the Armed
Forces of the Philippines Finance Center, its employees, agents, representatives, and any all persons acting
on its behalf, from releasing the remaining pension that may be due to S/Sgt. Charles A. Yahon.
SO ORDERED.12
By Decision dated November 29, 2011, the CA denied the petition for certiorari and affirmed the assailed
orders and decision of the RTC. The CA likewise denied petitioner’s motion for reconsideration.
In this petition, the question of law presented is whether petitioner military institution may be ordered to
automatically deduct a percentage from the retirement benefits of its enlisted personnel, and to give the same
directly to the latter’s lawful wife as spousal support in compliance with a protection order issued by the RTC
pursuant to R.A. No. 9262.
A protection order is an order issued by the court to prevent further acts of violence against women and their
children, their family or household members, and to grant other necessary relief. Its purpose is to safeguard
the offended parties from further harm, minimize any disruption in their daily life and facilitate the opportunity
and ability to regain control of their life.13 The protection orders issued by the court may be a Temporary
Protection Order (TPO) or a Permanent Protection Order (PPO), while a protection order that may be issued
by the barangay shall be known as a Barangay Protection Order (BPO).14
Section 8 of R.A. No. 9262 enumerates the reliefs that may be included in the TPO, PPO or BPO, to wit:
(a) Prohibition of the respondent from threatening to commit or committing, personally or through another, any
of the acts mentioned in Section 5 of this Act;
(b) Prohibition of the respondent from harassing, annoying, telephoning, contacting or otherwise
communicating with the petitioner, directly or indirectly;
(c) Removal and exclusion of the respondent from the residence of the petitioner, regardless of ownership of
the residence, either temporarily for the purpose of protecting the petitioner, or permanently where no property
rights are violated, and if respondent must remove personal effects from the residence, the court shall direct a
law enforcement agent to accompany the respondent to the residence, remain there until respondent has
gathered his things and escort respondent from the residence;
(d) Directing the respondent to stay away from petitioner and any designated family or household member at a
distance specified by the court, and to stay away from the residence, school, place of employment, or any
specified place frequented by the petitioner and any designated family or household member;
(e) Directing lawful possession and use by petitioner of an automobile and other essential personal effects,
regardless of ownership, and directing the appropriate law enforcement officer to accompany the petitioner to
the residence of the parties to ensure that the petitioner is safely restored to the possession of the automobile
and other essential personal effects, or to supervise the petitioner’s or respondent’s removal of personal
belongings;
(f) Granting a temporary or permanent custody of a child/children to the petitioner;
(g) Directing the respondent to provide support to the woman and/or her child if entitled to legal support.
Notwithstanding other laws to the contrary, the court shall order an appropriate percentage of the income or
salary of the respondent to be withheld regularly by the respondent's employer for the same to be
automatically remitted directly to the woman. Failure to remit and/or withhold or any delay in the remittance of
support to the woman and/or her child without justifiable cause shall render the respondent or his employer
liable for indirect contempt of court;
(h) Prohibition of the respondent from any use or possession of any firearm or deadly weapon and order him to
surrender the same to the court for appropriate disposition by the court, including revocation of license and
disqualification to apply for any license to use or possess a firearm. If the offender is a law enforcement agent,
the court shall order the offender to surrender his firearm and shall direct the appropriate authority to
investigate on the offender and take appropriate action on matter;
(i) Restitution for actual damages caused by the violence inflicted, including, but not limited to, property
damage, medical expenses, child care expenses and loss of income;
(j) Directing the DSWD or any appropriate agency to provide petitioner temporary shelter and other social
services that the petitioner may need; and
(k) Provision of such other forms of relief as the court deems necessary to protect and provide for the safety of
the petitioner and any designated family or household member, provided petitioner and any designated family
or household member consents to such relief. (Emphasis supplied.)
Petitioner argues that it cannot comply with the RTC’s directive for the automatic deduction of 50% from S/Sgt.
Yahon’s retirement benefits and pension to be given directly to respondent, as it contravenes an explicit
mandate under the law governing the retirement and separation of military personnel.
The assailed provision is found in Presidential Decree (P.D.) No. 1638,15 which states: Section 31. The benefits
authorized under this Decree, except as provided herein, shall not be subject to attachment, garnishment, levy,
execution or any tax whatsoever; neither shall they be assigned, ceded, or conveyed to any third person:
Provided, That if a retired or separated officer or enlisted man who is entitled to any benefit under this Decree
has unsettled money and/or property accountabilities incurred while in the active service, not more than fifty
per centum of the pension gratuity or other payment due such officer or enlisted man or his survivors under this
Decree may be withheld and be applied to settle such accountabilities. (Emphasis supplied.)
A similar provision is found in R.A. No. 8291, otherwise known as the "Government Service Insurance System
Act of 1997," which reads:
SEC. 39. Exemption from Tax, Legal Process and Lien -- x x x
xxxx
The funds and/or the properties referred to herein as well as the benefits, sums or monies corresponding to the
benefits under this Act shall be exempt from attachment, garnishment, execution, levy or other processes
issued by the courts, quasi-judicial agencies or administrative bodies including Commission on Audit (COA)
disallowances and from all financial obligations of the members, including his pecuniary accountability arising
from or caused or occasioned by his exercise or performance of his official functions or duties, or incurred
relative to or in connection with his position or work except when his monetary liability, contractual or
otherwise, is in favor of the GSIS.
In Sarmiento v. Intermediate Appellate Court,16 we held that a court order directing the Philippine National Bank
to refrain from releasing to petitioner all his retirement benefits and to deliver one-half of such monetary
benefits to plaintiff as the latter’s conjugal share is illegal and improper, as it violates Section 26 of CA 186 (old
GSIS Law) which exempts retirement benefits from execution.
The foregoing exemptions have been incorporated in the 1997 Rules of Civil Procedure, as amended, which
governs execution of judgments and court orders. Section 13 of Rule 39 enumerates those properties which
are exempt from execution:
SEC. 13. Property exempt from execution.– Except as otherwise expressly provided by law, the following
property, and no other, shall be exempt from execution:
xxxx
(l) The right to receive legal support, or money or property obtained as such support, or any pension or gratuity
from the Government;(Emphasis supplied.)
It is basic in statutory construction that in case of irreconcilable conflict between two laws, the later enactment
must prevail, being the more recent expression of legislative will.17 Statutes must be so construed and
harmonized with other statutes as to form a uniform system of jurisprudence.18 However, if several laws cannot
be harmonized, the earlier statute must yield to the later enactment. The later law is the latest expression of
the legislative will.19
We hold that Section 8(g) of R.A. No. 9262, being a later enactment, should be construed as laying down an
exception to the general rule above-stated that retirement benefits are exempt from execution. The law itself
declares that the court shall order the withholding of a percentage of the income or salary of the respondent by
the employer, which shall be automatically remitted directly to the woman "[n]otwithstanding other laws to the
contrary."
Petitioner further contends that the directive under the TPO to segregate a portion of S/Sgt. Yahon’s retirement
benefits was illegal because said moneys remain as public funds, citing the case of Pacific Products v. Ong.20
In that case, this Court sustained the CA when it held that the garnishment of the amount of ₱10,500 payable
to BML Trading and Supply while it was still in the possession of the Bureau of Telecommunications was illegal
and therefore, null and void. The CA therein relied on the previous rulings in Director of Commerce and
Industry v. Concepcion21 and Avendano v. Alikpala, et al.22 wherein this Court declared null and void the
garnishment of the salaries of government employees.
Citing the two aforementioned cases, we thus declared in Pacific Products:
A rule, which has never been seriously questioned, is that money in the hands of public officers, although it
may be due government employees, is not liable to the creditors of these employees in the process of
garnishment. One reason is, that the State, by virtue of its sovereignty may not be sued in its own courts
except by express authorization by the Legislature, and to subject its officers to garnishment would be to
permit indirectly what is prohibited directly. Another reason is that moneys sought to be garnished, as long as
they remain in the hands of the disbursing officer of the Government, belong to the latter, although the
defendant in garnishment may be entitled to a specific portion thereof. And still another reason which covers
both of the foregoing is that every consideration of public policy forbids it.23
We disagree.
Section 8(g) of R.A. No. 9262 used the general term "employer," which includes in its coverage the military
institution, S/Sgt. Yahon’s employer. Where the law does not distinguish, courts should not distinguish. Thus,
Section 8(g) applies to all employers, whether private or government.
It bears stressing that Section 8(g) providing for spousal and child support, is a support enforcement
legislation.1âwphi1 In the United States, provisions of the Child Support Enforcement Act24 allow garnishment
of certain federal funds where the intended recipient has failed to satisfy a legal obligation of child support. As
these provisions were designed "to avoid sovereign immunity problems" and provide that "moneys payable by
the Government to any individual are subject to child support enforcement proceedings," the law is clearly
intended to "create a limited waiver of sovereign immunity so that state courts could issue valid orders directed
against Government agencies attaching funds in their possession."25
This Court has already ruled that R.A. No. 9262 is constitutional and does not violate the equal protection
clause. In Garcia v. Drilon26 the issue of constitutionality was raised by a husband after the latter failed to
obtain an injunction from the CA to enjoin the implementation of a protection order issued against him by the
RTC. We ruled that R.A. No. 9262 rests on real substantial distinctions which justify the classification under the
law: the unequal power relationship between women and men; the fact that women are more likely than men to
be victims of violence; and the widespread bias and prejudice against women.
We further held in Garcia that the classification is germane to the purpose of the law, viz:
The distinction between men and women is germane to the purpose of R.A. 9262, which is to address violence
committed against women and children, spelled out in its Declaration of Policy, as follows:
SEC. 2. Declaration of Policy.– It is hereby declared that the State values the dignity of women and children
and guarantees full respect for human rights. The State also recognizes the need to protect the family and its
members particularly women and children, from violence and threats to their personal safety and security.
Towards this end, the State shall exert efforts to address violence committed against women and children in
keeping with the fundamental freedoms guaranteed under the Constitution and the provisions of the Universal
Declaration of Human Rights, the Convention on the Elimination of All Forms of Discrimination Against Women,
Convention on the Rights of the Child and other international human rights instruments of which the Philippines
is a party.27
Under R.A. No. 9262, the provision of spousal and child support specifically address one form of violence
committed against women – economic abuse.
D. "Economic abuse" refers to acts that make or attempt to make a woman financially dependent which
includes, but is not limited to the following:
1. Withdrawal of financial support or preventing the victim from engaging in any legitimate profession,
occupation, business or activity, except in cases wherein the other spouse/partner objects on valid, serious and
moral grounds as defined in Article 73 of the Family Code;
2. Deprivation or threat of deprivation of financial resources and the right to the use and enjoyment of the
conjugal, community or property owned in common;
3. Destroying household property;
4. Controlling the victims' own money or properties or solely controlling the conjugal money or properties.28
The relief provided in Section 8(g) thus fulfills the objective of restoring the dignity of women who are victims of
domestic violence and provide them continued protection against threats to their personal safety and security.
"The scope of reliefs in protection orders is broadened to ensure that the victim or offended party is afforded all
the remedies necessary to curtail access by a perpetrator to the victim. This serves to safeguard the victim
from greater risk of violence; to accord the victim and any designated family or household member safety in the
family residence, and to prevent the perpetrator from committing acts that jeopardize the employment and
support of the victim. It also enables the court to award temporary custody of minor children to protect the
children from violence, to prevent their abduction by the perpetrator and to ensure their financial support."29
WHEREFORE, the petition is DENIED for lack of merit. The Decision dated November 29, 2011 and
Resolution dated March 9, 2012 of the Court of Appeals Mindanao Station in CA-G.R. SP No. 02953-MIN are
AFFIRMED and UPHELD.
No costs.
SO ORDERED.
MARTIN S. VILLARAMA, JR.
Associate Justice
MARIA LOURDES P. A. SERENO
Chief Justice
Republic of the Philippines
SUPREME COURT
Manila
SECOND DIVISION
G.R. No. 110898 February 20, 1996
PEOPLE OF THE PHILIPPINES, petitioner,
vs.
HON. JUDGE ANTONIO C. EVANGELISTA, as Presiding Judge of Branch XXI, 10th Judicial Region, RTC
of Misamis Oriental, Cagayan de Oro City, and GRILDO S. TUGONON, respondents.
DECISION
MENDOZA, J.:
Private respondent Grildo S. Tugonan was charged with frustrated homicide in the Regional Trial Court of
Misamis Oriental (Branch 21), the information against him alleging
That on or about the 26th day of May, 1988, at more or less 9:00 o'clock in the evening at Barangay Publican+.
3, Municipality of Villanueva, Province of Misamis Oriental, Republic of the Philippines and within the
jurisdiction of this Honorable Court, the above-named accused with intent to kill and with the use of a knife,
which he was then conveniently provided of, did then and there willfully, unlawfully and feloniously assault,
attack and stab Roque T. Bade thereby inflicting upon him the following injuries, to wit:
Stab wound, right iliac area,
0.5 cm. penetrating non
perforating lacerating posterior
peritoneum, 0,5 cm.
thus performing all the acts of execution which would produce the crime of Homicide as a consequence but
which, nevertheless, did not produce it by reason of causes independent of the will of the accused, that is by
timely medical attendance which prevented his death.
CONTRARY TO and in violation of Article 249 in relation to Article 6 of the Revised Penal Code.
After trial he was found guilty and sentenced to one year of prision correccional in its minimum period and
ordered to pay to the offended party P5,000.00 for medical expense, without subsidiary imprisonment, and the
costs. The RTC appreciated in his favor the privileged mitigating circumstances of incomplete self-defense and
the mitigating circumstance of voluntary surrender.
On appeal the Court of Appeals affirmed private respondent's conviction but modified his sentence by imposing
on him an indeterminate penalty of 2 months of arresto mayor, as minimum, to 2 years and 4 months of prision
correccional, as maximum.1
On December 21, 1992, respondent Judge Antonio C. Evangelista of the RTC set the case for repromulgation
on January 4, 1993.
On December 28, 1992, private respondent filed a petition for probation,2 alleging that (1) he possessed all the
qualifications and none of the disqualifications for probation under P.D. No. 968, as amended; (2) the Court of
Appeals has in fact reduced the penalty imposed on him by the trial court; (3) in its resolution, the Court of
Appeals took no action on a petition for probation which he had earlier filed with it so that the petition could be
filed with the trial court; (4) in the trial court's decision, two mitigating circumstances of incomplete self-defense
and voluntarily surrender were appreciated in his favor; and (5) in Santos To v. Paño,3 the Supreme Court
upheld the right of the accused to probation notwithstanding the fact that he had appealed from his conviction
by the trial court.
On February 2, 1993, the RTC ordered private respondent to report for interview to the Provincial Probation
Officer. The Provincial Probation Officer on the other hand was required to submit his report with
recommendation to the court within 60 days.4
On February 18, 1993, Chief Probation and Parole Officer Isias B. Valdehueza recommended denial of private
respondent's application for probation on the ground that by appealing the sentence of the trial court, when he
could have then applied for probation, private respondent waived the right to make his application. The
Probation Officer thought the present case to be distinguishable from Santos To v. Paño in the sense that in
this case the original sentence imposed on private respondent by the trial court (1 year of imprisonment) was
probationable and there was no reason for private respondent not to have filed his application for probation
then, whereas in Santos To v. Paño the penalty only became probationable after it had been reduced as a
result of the appeal.
On April 16, 1993 Valdehueza reiterated5 his "respectful recommendation that private respondent's application
for probation be denied and that a warrant of arrest be issued for him to serve his sentence in jail."
The RTC set aside the Probation Officer's recommendation and granted private respondent's application for
probation in its order of April 23, 1993,6 Hence this petition by the prosecution.
The issue in this case is whether the RTC committed a grave abuse of its discretion by granting private
respondent's application for probation despite the fact that he had appealed from the judgment of his
conviction of the trial court.
The Court holds that it did.
Until its amendment by P.D. No. 1990 in 1986, it was possible under P.D. No. 986, otherwise known as the
Probation Law, for the accused to take his chances on appeal by allowing probation to be granted even after
an accused had appealed his sentence and failed to obtain an acquittal, just so long as he had not yet started
to serve the sentence.7 Accordingly, in Santos To v. Paño, it was held that the fact that the accused had
appealed did not bar him from applying for probation especially because it was as a result of the appeal that
his sentence was reduced and made the probationable limit.
The law was, however, amended by P.D. No. 1990 which took effect on January 15, 19868 precisely to put a
stop to the practice of appealing from judgments of conviction even if the sentence is probationable for the
purpose of securing an acquittal and applying for probation only if the accused fails in his bid. Thus, as
amended by P.D. No, 1990, §4 of the Probation Law now reads:
§4. Grant of Probation. Subject to the provisions of this Decree, the trial court may, after it shall have convicted
and sentenced a defendant, and upon application by said defendant within the period for perfecting an appeal,
suspend the execution of the sentence and place the defendant on probation for such period and upon such
terms and conditions as it may deem best; Provided, That no application for probation shall be entertained or
granted if the defendant has perfected the appeal from the judgment of conviction.
Probation may be granted whether the sentence imposes a term of imprisonment or a fine only. An application
for probation shall be filed with the trial court. The filing of the application shall be deemed a waiver of the right
to appeal.
An order granting or denying probation shall not be appealable. (Emphasis added).
Since private respondent filed his application for probation on December 28, 1992, after P.D. No. 1990 had
taken effect,9 it is covered by the prohibition that "no application for probation shall be entertained or granted if
the defendant has perfected the appeal from the judgment of conviction" and that "the filing of the application
shall be deemed a waiver of the right to appeal," Having appealed from the judgment of the trial court and
having applied for probation only after the Court of Appeals had affirmed his conviction, private respondent was
clearly precluded from the benefits of probation.
Private respondent argues, however, that a distinction should be drawn between meritorious appeals (like his
appeal notwithstanding the appellate court's affirmance of his conviction) and unmeritorious appeals. But the
law does not make any distinction and so neither should the Court. In fact if an appeal is truly meritorious the
accused would be set free and not only given probation. Private respondent's original sentence (1 year of
prision correccional in its minimum period) and the modified sentence imposed by the Court of Appeals (2
months of arresto mayor, as minimum, to 2 years and 4 months of prision correccional, as maximum) are
probationable. Thus the fact that he appealed meant that private respondent was taking his chances which the
law precisely frowns upon. This is precisely the evil that the amendment in P.D. No. 1990 sought to correct,
since in the words of the preamble to the amendatory law, "probation was not intended as an escape hatch
and should not be used to obstruct and delay the administration of justice, but should be availed of at the first
opportunity by offenders who are willing to be reformed and rehabilitated."
The ruling of the RTC that "[h]aving not perfected an appeal against the Court of Appeals decision, [private
respondent] is, therefore, not covered by [the amendment in] P.D. 1990" is an obvious misreading of the law.
The perfection of the appeal referred in the law refers to the .appeal taken from a judgment of conviction by the
trial court and not that of the appellate court, since under the law an application for probation is filed with the
trial court which can only grant the same "after it shall have convicted and sentenced [the] defendant, and
upon application by said defendant within the period for perfecting an appeal. "Accordingly, in Llamado v. Court
of Appeals, 10 it was held that the petitioner who had appealed his sentence could not subsequently apply for
probation.
WHEREFORE, the petition is GRANTED and the order of April 23, 1993 of the Regional Trial Court of Misamis
Oriental (Branch 21) granting probation to private respondent Grildo S. Tugonon is SET ASIDE.
SO ORDERED.
Regalado, Romero and Puno, JJ., concur.
!
EN BANC
January 26, 2016
G.R. No. 219603
MARY ELIZABETH TY-DELGADO, Petitioner,
vs.
HOUSE OF REPRESENTATIVES ELECTORAL TRIBUNAL and PHILIP ARREZA PICHAY, Respondents.
DECISION
CARPIO, J.:
The Case
This special civil action for certiorari1 assails the Decision dated 18 March 20152 and Resolution dated 3
August 20153 of the House of Representatives Electoral Tribunal (HRET), in HRET Case No. 13-022, declaring
respondent Philip A. Pichay (Pichay) eligible to hold and serve the office of Member of the House of
Representatives for the First Legislative District of Surigao del Sur.
The Facts
On 16 September 2008, the Court promulgated its Decision in G .R. Nos. 161032 and 161176, entitled "Tulfo v.
People of the Philippines," convicting Pichay by final judgment of four counts of libel.4 In lieu of imprisonment,
he was sentenced to pay a fine in the amount of Six Thousand Pesos (P6,000.00) for each count of libel and
One Million Pesos (Pl,000,000.00) as moral damages. This Decision became final and executory on 1 June
2009. On 17 February 2011, Pichay paid One Million Pesos (Pl,000,000.00) as moral damages and Six
Thousand Pesos (P6,000.00) as fine for each count of libel.
On 9 October 2012, Pichay filed his certificate of candidacy for the position of Member of the House of
Representatives for the First Legislative District of Surigao del Sur for the 13 May 2013 elections.
On 18 February 2013, petitioner Mary Elizabeth Ty-Delgado (Ty-Delgado) filed a petition for disqualification
under Section 12 of the Omnibus Election Code against Pichay before the Commission on Elections
(Comelec), on the ground that Pichay was convicted of libel, a crime involving moral turpitude. Ty-Delgado
argued that when Pichay paid the fine on 17 February 2011, the five-year period barring him to be a candidate
had yet to lapse.
In his Answer dated 4 March 2013, Pichay, through his counsel, alleged that the petition for disqualification was
actually a petition to deny due course to or cancel certificate of candidacy under Section 78, in relation to
Section 74, of the Omnibus Election Code, and it was filed out of time. He admitted his conviction by final
judgment for four counts of libel, but claimed that libel does not necessarily involve moral turpitude. He argued
that he did not personally perform the acts prohibited and his conviction for libel was only because of his
presumed responsibility as president of the publishing company.
On 14 May 2013, Ty-Delgado filed a motion to suspend the proclamation of Pichay before the Comelec.
On 16 May 2013, the Provincial Board of Canvassers of Surigao del Sur proclaimed Pichay as the duly elected
Member of the House of Representatives for the First Legislative District of Surigao del Sur, obtaining a total of
seventy-six thousand eight hundred seventy (76,870) votes.
On 31 May 2013, Ty-Delgado filed an ad cautelam petition for quo warranto before the HRET reiterating that
Pichay is ineligible to serve as Member of the House of Representatives because: (1) he was convicted by final
judgment of four counts of libel, a crime involving moral turpitude; and (2) only two years have passed since he
served his sentence or paid on 17 February 2011 the penalty imposed on him. In his Answer, Pichay claimed
that his conviction for the crime of libel did not make him ineligible because ineligibility only pertained to lack of
the qualifications under the Constitution.
In its Resolution dated 4 June 2013, the Comelec First Division dismissed the petition for disqualification filed
against Pichay because of lack of jurisdiction.
On 16 July 2013, Ty-Delgado manifested her amenability to convert the ad cautelam petition into a regular
petition for quo warranto.
On 22 October 2013, the preliminary conference took place and the parties waived the presentation of their
evidence upon agreement that their case only involved legal issues.
The HRET Decision
In a Decision dated 18 March 2015, the HRET held that it had jurisdiction over the present quo warranto
petition since it involved the eligibility of a Member of the House of Representatives due to a disqualification
under Section 12 of the Omnibus Election Code. However, the HRET held that there is nothing in Tulfo v.
People of the Philippines which found that Pichay directly participated in any way in writing the libelous articles,
aside from being the president of the publishing company.
Thus, the HRET concluded that the circumstances surrounding Pichay's conviction for libel showed that the
crime did not involve moral turpitude.
The dispositive portion of the Decision reads:
WHEREFORE, premises considered, the instant Petition (for Quo Warranto) is DISMISSED, and respondent
Philip A. Pichay is DECLARED ELIGIBLE to hold and serve the office of Member of the House of
Representatives for the First Legislative District of Surigao del Sur.
No pronouncement as to costs.
SO ORDERED.5
In Resolution No. 15-031dated3 August 2015, the HRET denied Ty-Delgado's motion for reconsideration for
lack of merit considering that no new matter was raised which justified the reversal or modification of the
Decision.
Hence, this petition.
The Issues
Ty-Delgado raises the following issues for resolution:
[I]
THE HOUSE OF REPRESENTANTIVES ELECTORAL TRIBUNAL GRAVELY ABUSED ITS DISCRETION
AMOUNTING TO LACK OF OR EXCESS OF JURISDICTION WHEN IT RULED THAT THE
CIRCUMSTANCES SURROUNDING RESPONDENT PICHAY'S CONVICTION OF LIBEL DID NOT SHOW
THAT MORAL TURPITUDE IS INVOLVED, WHICH IS CONTRARY TO THE FACTUAL AND LEGAL
FINDINGS OF THE SUPREME COURT IN G.R. NO. 161032 ENTITLED "ERWIN TULFO V PEOPLE AND
ATTY CARLOS T SO" AND IN G.R. NO. 161176 ENTITLED "SUSAN CAMBRI, ET AL. V COURT OF
APPEALS, ET AL."
[II]
THE HOUSE OF REPRESENTANTIVES ELECTORAL TRIBUNAL GRAVELY ABUSED ITS DISCRETION
AMOUNTING TO LACK OF OR EXCESS OF JURISDICTION IN FAILING TO DECLARE RESPONDENT
PICHAY INELIGIBLE OR DISQUALIFIED FROM HOLDING THE POSITION OF MEMBER OF THE HOUSE
OF REPRESENTANTIVES BY REASON OF HIS CONVICTION OF LIBEL, A CRIME INVOLVING MORAL
TURPITUDE.
[III]
THE HOUSE OF REPRESENTANTIVES ELECTORAL TRIBUNAL GRAVELY ABUSED ITS DISCRETION
AMOUNTING TO LACK OF OR EXCESS OF JURISDICTION IN FAILING TO DECLARE THAT
RESPONDENT PICHAY FALSELY REPRESENTED IN HIS CERTIFICATE OF CANDIDACY THAT HE IS
ELIGIBLE TO RUN FOR CONGRESSMAN BECAUSE HIS CONVICTION OF A CRIME INVOLVING MORAL
TURPITUDE RENDERED HIM INELIGIBLE OR DISQUALIFIED.
[IV]
THE HOUSE OF REPRESENTANTIVES ELECTORAL TRIBUNAL GRAVELY ABUSED ITS DISCRETION
AMOUNTING TO LACK OF OR EXCESS OF JURISDICTION IN FAILING TO DECLARE THAT
RESPONDENT PICHAY SHOULD BE DEEMED TO HAVE NEVER BECOME A CANDIDATE SINCE HIS
CERTIFICATE OF CANDIDACY IS VOID AB INITIO.
[V]
THE HOUSE OF REPRESENTANTIVES ELECTORAL TRIBUNAL GRAVELY ABUSED ITS DISCRETION
AMOUNTING TO LACK OF OR EXCESS OF JURISDICTION IN FAILING TO DECLARE THAT SINCE THE
PETITION FOR QUO WARRANTO QUESTIONED THE VALIDITY OF RESPONDENT PICHAY'S
CANDIDACY, THE JURISPRUDENCE ON A "SECOND PLACER" BEING PROCLAIMED AS WINNER
SHOULD THE CERTIFICATE OF CANDIDACY OF A "FIRST PLACER" IS CANCELLED, SHOULD APPLY.
[VI]
THE HOUSE OF REPRESENTANTIVES ELECTORAL TRIBUNAL GRAVELY ABUSED ITS DISCRETION
AMOUNTING TO LACK OF OR EXCESS OF JURISDICTION BY FAILING TO DECLARE THAT PETITIONER
DELGADO WAS THE SOLE LEGITIMATE CANDIDATE FOR MEMBER, HOUSE OF REPRESENTANTIVES
OF THE FIRST LEGISLATIVE DISTRICT OF SURIGAO DEL SUR, THUS SHE MUST BE DECLARED THE
RIGHTFUL WINNER IN THE 2013 ELECTIONS AND MUST BE MADE TO ASSUME THE SAID POSITION.6
The Ruling of the Court
We find merit in the petition.
A sentence by final judgment for a crime involving moral turpitude is a ground for disqualification under Section
12 of the Omnibus Election Code:
Sec. 12. Disqualifications. - Any person who has been declared by competent authority insane or incompetent,
or has been sentenced by final judgment for subversion, insurrection, rebellion or for any offense for which
he was sentenced to a penalty of more than eighteen months or for a crime involving moral turpitude, shall
be disqualified to be a candidate and to hold any office, unless he has been given plenary pardon or
granted amnesty.
The disqualifications to be a candidate herein provided shall be deemed removed upon the declaration by
competent authority that said insanity or incompetence had been removed or after the expiration of a period of
five years from his service of sentence, unless within the same period he again becomes disqualified.
(Emphasis supplied)
Moral turpitude is defined as everything which is done contrary to justice, modesty, or good morals; an act of
baseness, vileness or depravity in the private and social duties which a man owes his fellowmen, or to society
in general.7 Although not every criminal act involves moral turpitude, the Court is guided by one of the general
rules that crimes mala in se involve moral turpitude while crimes mala prohibita do not.8
In Villaber v. Commission on Elections,9 we held that violation of Batas Pambansa Blg. 22 is a crime involving
moral turpitude because a drawer who issues an unfunded check deliberately reneges on the private duties he
owes his fellow men or society in a manner contrary to accepted and customary rule of right and duty, justice,
honesty or good morals. In Dela Torre v. Commission on Elections,10 we held that the crime of fencing involves
moral turpitude because actual knowledge by the "fence" that property received is stolen displays the same
degree of malicious deprivation of one's rightful property as that which animated the robbery or theft which, by
their very nature, are crimes of moral turpitude. In Magno v. Commission on Elections,11 we ruled that direct
bribery involves moral turpitude, because the fact that the offender agrees to accept a promise or gift and
deliberately commits an unjust act or refrains from performing an official duty in exchange for some favors
denotes a malicious intent on the part of the offender to renege on the duties which he owes his fellowmen and
society in general.
In Zari v. Flores,12 we likewise listed libel as one of the crimes involving moral turpitude. The Revised Penal
Code defines libel as a "public and malicious imputation of a crime, or of a vice or defect, real or imaginary, or
any act, omission, condition, status or circumstance tending to cause the dishonor, discredit, or contempt of a
natural or juridical person, or to blacken the memory of one who is dead."13 The law recognizes that the
enjoyment of a private reputation is as much a constitutional right as the possession of life, liberty or property.14
To be liable for libel, the following elements must be shown to exist: (a) the allegation of a discreditable act or
condition concerning another; (b) publication of the charge; (c) identity of the person defamed; and (d)
existence of malice.15 Malice connotes ill will or spite and speaks not in response to duty but merely to injure
the reputation of the person defamed, and implies an intention to do ulterior and unjustifiable harm.16 Malice is
bad faith or bad motive and it is the essence of the crime of libel.17 To determine actual malice, a libelous
statement must be shown to have been written or published with the knowledge that it is false or in reckless
disregard of whether it is false or not.18 Reckless disregard of what is false or not means that the defendant
entertains serious doubt as to the truth of the publication or possesses a high degree of awareness of its
probable falsity.19
In the present case, Pichay admits his conviction for four counts of libel. In Tulfo v. People of the Philippines,20
the Court found Pichay liable for publishing the four defamatory articles, which are libelous per se, with
reckless disregard of whether they were false or not. The fact that another libelous article was published after
the filing of the complaint can be considered as further evidence of malice.21 Thus, Pichay clearly acted with
actual malice, and intention to do ulterior and unjustifiable harm. He committed an "act of baseness, vileness,
or depravity in the private duties which he owes his fellow men, or society in general," and an act which is
"contrary to justice, honesty, or good morals."
The dissenting opinion before the HRET even considered it "significant that [Pichay] has raised no issue
against libel being a crime involving moral turpitude, and has taken issue only against ascribing moral turpitude
to him despite his being only the President of the publishing company."22 Thus, Pichay insists that, since he
was only the publisher of the libelous articles and the penalty for his conviction was reduced to payment of fine,
the circumstances of his conviction for libel did not amount to moral turpitude.
The Revised Penal Code provides that: "Any person who shall publish, exhibit, or cause the publication or
exhibition of any defamation in writing or by similar means, shall be responsible for the same. The author or
editor of a book or pamphlet, or the editor or business manager of a daily newspaper, magazine or serial
publication, shall be responsible for the defamations contained therein to the same extent as if he were the
author thereof. "23
The provision did not distinguish or graduate the penalty according to the nature or degree of the participation
of the persons involved in the crime of libel. It is basic in statutory construction that where the law does not
distinguish, we should not distinguish. Accordingly, we cannot distinguish Pichay's criminal liability from the
others' criminal liability only because he was the president of the company that published the libelous articles
instead of being their author. Pichay's criminal liability was the same as that of the others, such that he was
even meted the same penalty as that imposed on the author of the libelous articles.
The crime of libel would not even be consummated without his participation as publisher of the libelous articles.
One who furnishes the means for carrying on the publication of a newspaper and entrusts its management to
servants or employees whom he selects and controls may be said to cause to be published what actually
appears, and should be held responsible therefor, whether he was individually concerned in the publication or
not.24
Although the participation of each felon in the crime of libel differs in point in time and in degree, both author
and publisher reneged on the private duties they owe their fellow men or society in a manner contrary to the
accepted and customary rule of right and duty, justice, honesty, or good morals.
Contrary to Pichay's argument, the imposition of a fine does not determine whether the crime involves moral
turpitude or not. In Villaber v. Commission on Elections,25 we held that a crime still involves moral turpitude
even if the penalty of imprisonment imposed is reduced to a fine. In Tulfo v. People of the Philippines,26 we
explained that a fine was imposed on the accused since they were first time offenders.
Having been convicted of the crime of libel, Pichay is disqualified under Section 12 of the Omnibus Election
Code for his conviction for a crime involving moral turpitude.
Under Section 12, the disqualification shall be removed after the expiration of a period of five years from his
service of sentence.1âwphi1 In Teves v. Comelec,27 we held that the five-year period of disqualification would
end only on 25 May 2010 or five years from 24 May 2005, the day petitioner paid the fine he was sentenced to
pay in Teves v. Sandiganbayan. In this case, since Pichay served his sentence when he paid the fine on 17
February 2011, the five-year period shall end only on 16 February 2016. Thus, Pichay is disqualified to become
a Member of the House of Representatives until then.
Considering his ineligibility due to his disqualification under Section 12, which became final on 1 June 2009,
Pichay made a false material representation as to his eligibility when he filed his certificate of candidacy on 9
October 2012 for the 2013 elections. Pichay's disqualification under Section 12 is a material fact involving the
eligibility of a candidate under Sections 74 and 78 of the Omnibus Election Code. The pertinent provisions
read:
Sec. 74. Contents of certificate of candidacy. - The certificate of candidacy shall state that the person
filing it is announcing his candidacy for the office stated therein and that he is eligible for said office; if for
Member of the Batasang Pambansa, the province, including its component cities, highly urbanized city or
district or sector which he seeks to represent; the political party to which he belongs; civil status; his date of
birth; residence; his post office address for all election purposes; his profession or occupation; that he will
support and defend the Constitution of the Philippines and will maintain true faith and allegiance thereto; that
he will obey the laws, legal orders, and decrees promulgated by the duly constituted authorities; that he is not a
permanent resident or immigrant to a foreign country; that the obligation imposed by his oath is assumed
voluntarily, without mental reservation or purpose of evasion; and that the facts stated in the certificate of
candidacy are true to the best of his knowledge.
xxxx
Sec. 78. Petition to deny due course to or cancel a certificate of candidacy. - A verified petition seeking to deny
due course or to cancel a certificate of candidacy may be filed by the person exclusively on the ground that
any material representation contained therein as required under Section 74 hereof is false. The petition
may be filed at any time not later than twenty-five, days from the time of the filing of the certificate of candidacy
and shall be decided, after due notice and hearing, not later than fifteen days before the election. (Emphases
supplied)
In Fermin v. Comelec,28 we likened a proceeding under Section 78 to a quo warranto proceeding under Section
253 of the Omnibus Election Code since they both deal with the eligibility or qualification of a candidate, with
the distinction mainly in the fact that a Section 78 petition is filed before proclamation, while a petition for quo
warranto is filed after proclamation of the winning candidate. This is also similar to a quo warranto petition
contesting the election of a Member of the House of Representatives on the ground of ineligibility or disloyalty
to the Republic of the Philippines filed before the HRET.29
Under Section 78, a proceeding to deny due course to and/or cancel a certificate of candidacy is premised on
a person's misrepresentation of any of the material qualifications required for the elective office.30 This is to be
read in relation to the constitutional and statutory provisions on qualifications or eligibility for public office.31 In
Jalosjos v. Commission on Elections,32 we held that if a candidate is not actually eligible because he is barred
by final judgment in a criminal case from running for public office, and he still states under oath in his certificate
of candidacy that he is eligible to run for public office, then the candidate clearly makes a false material
representation that is a ground for a petition under Section 78.
In the present case, Pichay misrepresented his eligibility in his certificate of candidacy because he knew that
he had been convicted by final judgment for a crime involving moral turpitude. Thus, his representation that he
was eligible for elective public office constitutes false material representation as to his qualification or eligibility
for the office.
A person whose certificate of candidacy had been denied due course and/or cancelled under Section 78 is
deemed to have not been a candidate at all, because his certificate of candidacy is considered void ab initio
and thus, cannot give rise to a valid candidacy and necessarily to valid votes.33 In both Jalosjos, Jr. v.
Commission on Elections34 and Aratea v. Commission on Elections,35 we proclaimed the second placer, the
only qualified candidate who actually garnered the highest number of votes, for the position of Mayor. We
found that since the certificate of candidacy of the candidate with the highest number of votes was void ab
initio, he was never a candidate at all, and all his votes were considered stray votes.
Accordingly, we find that the HRET committed grave abuse of discretion amounting to lack of or excess of
jurisdiction when it failed to disqualify Pichay for his conviction for libel, a crime involving moral turpitude. Since
Pichay's ineligibility existed on the day he filed his certificate of candidacy and he was never a valid candidate
for the position of Member of the House of Representatives, the votes cast for him were considered stray
votes. Thus, the qualified candidate for the position of Member of the House of Representatives for the First
Legislative District of Surigao del Sur in the 13 May 2013 elections who received the highest number of valid
votes shall be declared the winner. Based on the Provincial Canvass Report, the qualified candidate for the
position of Member of the House of Representatives for the First Legislative District of Surigao del Sur in the
13 May 2013 elections who received the highest number of valid votes is petitioner Mary Elizabeth Ty-Delgado.
36

Fundamental is the rule that grave abuse of discretion arises when a lower court or tribunal patently violates
the Constitution, the law or existing jurisprudence. While it is well-recognized that the HRET has been
empowered by the Constitution to be the "sole judge" of all contests relating to the election, returns, and
qualifications of the members of the House of Representatives, the Court maintains jurisdiction over it to check
"whether or not there has been grave abuse of discretion amounting to lack or excess of jurisdiction" on the
part of the latter. In other words, when the HRET utterly disregards the law and settled precedents on the
matter before it, it commits grave abuse of discretion.37
WHEREFORE, we GRANT the petition. We REVERSE and SET ASIDE the Decision dated 18 March 2015
and Resolution dated 3 August 2015 of the House of Representatives Electoral Tribunal in HRET Case No.
13-022. Respondent Philip A. Pichay is ineligible to hold and serve the office of Member of the House of
Representatives for the First Legislative District of Surigao del Sur. Petitioner Mary Elizabeth Ty-Delgado is
DECLARED the winner for the position of Member of the House of Representatives for the First Legislative
District of Surigao del Sur in the 13 May 2013 elections. Considering that the term of the present House of
Representatives will end on 30 June 2016, this Decision is immediately executory.
SO ORDERED.
ANTONIO T. CARPIO
Associate Justice
WE CONCUR:
MARIA LOURDES P.A. SERENO
Chief Justice
!
SECOND DIVISION
June 28, 2017
G.R. No. 198583
ARLYN ALMARIO-TEMPLONUEVO, Petitioner
vs.
OFFICE OF THE OMBUDSMAN, THE HONORABLE SECRETARY, DEPARTMENT OF INTERIOR AND
LOCAL GOVERNMENT and CHITO M. OYARDO, Respondents
DECISION
MENDOZA, J.:
This petition for review on certiorari under Rule 45 of the Rules of Court seeks the review of the February 17,
2011 1 and the September 8, 2011 2 Resolutions of the Court of Appeals (CA) in CA-G.R. SP No. 116229. The
CA issuances dismissed the petition for certiorari and prohibition filed by petitioner Arlyn Almario-Templonuevo
(Templonuevo), thus, affirming the January 6, 2010 Decision3 of Office of the Deputy Ombudsman for Luzon
(Ombudsman) in OMB-L-A-08-0097-B, finding her administratively liable for simple misconduct. The complaint
against her was filed by respondent Chito M. Oyardo (Oyardo).
Factual Antecedents
Templonuevo was elected as Sangguniang Bayan Member of the Municipality of Caramoan, Province of
Catanduanes, during the May 2007 elections. She served from July 1, 2007 to June 30, 2010. In the elections
of May 2010, she was elected as Municipal Vice Mayor of the same municipality.
In a complaint, docketed as OMB-L-A-08-0097-B, Oyardo administratively charged Templonuevo before the
Ombudsman for violation of Sec. 2, par. I of Republic Act No. 9287.
In its January 6, 2010 Decision, the Deputy Ombudsman for Luzon found petitioner guilty of simple misconduct
and imposed upon her the penalty of one month suspension without pay. The dispositive portion of said
decision reads:
WHEREFORE, premises considered, it is hereby respectfully recommended that ARLYN ALMARIO-
TEMPLONUEVO be adjudged guilty of violation of simple misconduct and is hereby imposed a penalty of one
(1) month suspension from office without pay pursuant to Section 7 Rule III of the Administrative Order No. 07
as amended by Administrative Order No. 17 in relation to Republic Act No. 6770.
The Honorable Secretary Ronaldo V. Puno, Department of Interior and Local Government, is hereby directed
to implement this DECISION immediately upon receipt thereof pursuant to Section 7, Rule III of Administrative
Order No. 07, as amended by Administrative Order No. 17 (Ombudsman Rules of Procedure) in relation to
Memorandum Circular No. 1, Series of 2006 dated 11 April 2006 and to promptly inform this office of the action
taken hereon.
SO DECIDED.4
At the time Templonuevo received her copy of the January 6, 2010 Decision on September 27, 2010, her term
as Sangguniang Bayan Member had expired. She, however, was elected as Vice Mayor of the same
municipality.
Without filing a motion for reconsideration, Templonuevo directly filed before the CA an original petition for
certiorari and prohibition under Rule 65 of the Rules of Court. She claimed that the Ombudsman acted with
grave abuse of discretion in ordering her suspension at a time when her term of office as Sangguniang Bayan
Member had already expired and she had been elected as Vice Mayor in the May 2010 elections.
In its February 17, 2011 Resolution,5 the CA dismissed outright the petition on the ground of Templonuevo's
failure to file a motion for reconsideration. According to the CA, the remedy of certiorari will not lie if other plain
and speedy remedies in the ordinary course of law such as a motion for reconsideration are available, which,
in this case, was not sought after by Templonuevo.
Templonuevo moved for reconsideration, but her motion was denied by the CA in its September 8, 2011
Resolution.
Aggrieved, Templonuevo elevated the case to this Court via Rule 45 of the Rules of Court.
Hence, this petition.
Templonuevo asserts that the CA decided questions of substance contrary to law and the applicable decisions
of this Court when her petition was dismissed outright on the ground of failure to file a motion for
reconsideration. She claims that there was no need to file for reconsideration considering that the
Ombudsman's decision has become final, executory and unappealable. She cites, as support, Section 7, Rule
III of Administrative Order No. 07, otherwise known as the Rules of Procedure of the Ombudsman, as
amended by A.O. No. 17, which provides:
Section 7. Finality and execution of decision. - Where the respondent is absolved of the charge, and in case of
conviction where the penalty imposed is public censure or reprimand, suspension of not more than one month,
or a fine equivalent to one month salary, the decision shall be final, executory and unappealable. In all other
cases, the decision may be appealed to the Court of Appeals in a verified petition for review under the
requirements and conditions set forth in Rule 43 of the Rules of Court, within fifteen (15) days from the receipt
of the written Notice of the Decision or Order denying the Motion for Reconsideration.
An appeal shall not stop the decision from being executory. In case the penalty is suspension or removal and
the respondent wins such appeal, he shall be considered as having been under preventive suspension and
shall be paid the salary and such other emoluments that he did not receive by reason of the suspension or
removal.
A decision of the Office of the Ombudsman in administrative cases shall be executed as a matter of course.
The Office of the Ombudsman shall ensure that the decision shall be strictly enforced and properly
implemented. The refusal or failure by any officer without just cause to comply with an order of the Office of the
Ombudsman to remove, suspend, demote, fine or censure shall be ground for disciplinary action against said
officer.
To Templonuevo, said AO makes a motion for reconsideration unavailable in cases where a respondent is
absolved of the charge or in cases of conviction where the penalty imposed is public censure or reprimand,
suspension of not more than one month, or a fine of equivalent to one month salary. Considering that she was
given the penalty of one-month suspension only, her only remedy then was to file a petition for certiorari under
Rule 65 of the Rules of Court.
In furtherance of her position, Templonuevo cites Office of the Ombudsman v. Alano,6 wherein the Court ruled
that a resolution or order of the Ombudsman becomes final and unappealable in the instances mentioned by
her. The effect of such finality, in her view, is simple - that the motion for reconsideration is not required before
resorting to the extraordinary remedy of certiorari. This was, according to her, the same conclusion reached by
the Court in Reyes, Jr. v. Belisario.7 There, it was held that the complainant therein was not entitled to any
corrective recourse, whether by motion for reconsideration, or by appeal to the courts, to effect a reversal of
the exoneration. The Court further held that despite such a fact, courts are still empowered by the Constitution
to determine whether there has been grave abuse of discretion amounting to lack or excess of jurisdiction on
the part of any branch or instrumentality of the Government.
Templonuevo, thus, believes that because the decision of the Ombudsman in her case was immediately final,
executory and unappealable, the same could no longer be reviewed by the said office and as such a motion for
reconsideration would be an exercise in futility. The CA should have taken note of that fact and such a failure
amounts to an error, says petitioner.
Templonuevo likewise calls the Court's attention to the fact that the misconduct for which she was penalized
was committed when she was still a Sangguniang Bayan Member. As she was elected Vice Mayor of the same
municipality in 2010, she claims that such election resulted in the condonation of her administrative liability on
acts committed during her previous post. She cites the case of Pascual v. Hon. Provincial Board of Nueva
Ecija, 8 where this Court held that the re-election to office operates as a condonation of the officer's previous
misconduct to the extent of cutting off the right to remove him therefrom. Consequently, the decision of the
Ombudsman is in her view a patent nullity.
On November 16, 2011, the Court resolved to require the respondents to comment on the petition and also
issued a Temporary Restraining Order enjoining the respondents from implementing the Decision of the Office
of the Ombudsman. 9
On December 2, 2011, the Office of the Solicitor General (OSG) filed a Manifestation and Motion (in Lieu of
Comment), 10 stating that the arguments raised by it in its Manifestation and Motion (in Lieu of Comment),
dated April 26, 2011 and filed on April 28, 2011 with the CA, was exhaustive enough to serve as its comment
on the present petition. The OSG in the pleadings it filed with the CA took the side of Templonuevo. It, thus,
asserts that by virtue of AO No. 7, as amended, a decision of Ombudsman imposing a penalty of not more than
one (1) month is final, executory and unappealable and, as such, a motion for reconsideration or appeal is not
an available remedy. It also claimed that the subsequent reelection of Templonuevo precludes the imposition
and execution of the penalty by virtue of the long standing doctrine of condonation.
In its Comment on the Petition For Review on Certiorari with Leave of Court (With Motion to Recall the
Temporary Restraining Order with Opposition to the Issuance of a Writ of Preliminary Injunction), 11 the
Ombudsman submits that Section 7, Rule III, Administrative Order No. 07, as amended, allows the filing of
motions for reconsideration on its decisions that impose one month suspension; that a plethora of
jurisprudence reveals that the Condonation Doctrine was applied by the Supreme Court only in cases where
there was re-election to the same position; and that, the issuance of a temporary restraining order was
erroneous and the error should not be extended with the issuance of a writ of preliminary injunction which the
law proscribes.
In the meantime, Templonuevo filed a Manifestation in Lieu of Compliance12 with the January 25, 2012
Resolution which ordered her to furnish this Court with the current address of Oyardo. She stated therein that
she did not know the present address of Oyardo, who was not a permanent resident of Caramoan, and that no
forwarding address was left behind.
In its July 18, 2012 Resolution,13 the Court noted the manifestation and required the Ombudsman to furnish the
address of Oyardo. This was complied with. 14
Oyardo still failed to file his Comment on the petition. As such, in the Court's September 14, 2015 Resolution,
15 Oyardo's right to file his comment was deemed waived. In the same Resolution, the Court required

Templonuevo to file her Reply to the manifestation and motion of the OSG, dated December 1, 2011, and to
the Comment on the Petition for Review on Certiorari with Leave of Court filed by the Ombudsman.
Until now, no reply has been filed by Templonuevo. She is deemed to have waived her right to file it.
Issues
A reading of the pleadings filed by the parties reveals that the issues are as follows:
1. Whether the CA committed an error in dismissing outright the petition filed by Templonuevo on the ground of
failure to file a motion for reconsideration from the decision of the Ombudsman finding her administratively
liable and imposing upon her a penalty of one month suspension.1âwphi1
2. Whether the CA committed an error in not treating the election of Templonuevo as Vice Mayor of the same
municipality as an event that precludes the imposition of the one month suspension penalty following the
doctrine of condonation.
The Ruling of the Court
The Court grants the petition.
A motion for reconsideration is not required where the penalty imposed by the Ombudsman is one month
suspension before a petition under Rule 65 can be filed.
The settled rule is that a motion for reconsideration is a condition sine qua non for the filing of a petition for
certiorari. 16 Its purpose is to grant an opportunity for the court to correct any actual or perceived error
attributed to it by re-examination of the legal and factual circumstances of the case. 17
This rule, however, admits well-defined exceptions, such as (a) where the order is a patent nullity, as where the
court a quo has no jurisdiction; (b) where the questions raised in the certiorari proceedings have been duly
raised and passed upon by the lower court, or are the same as those raised and passed upon in the lower
court; (c) where there is an urgent necessity for the resolution of the question and any further delay would
prejudice the interests of the Government or of the petitioner or the subject matter of the action is perishable;
(d) where, under the circumstances, a motion for reconsideration would be useless; (e) where petitioner was
deprived of due process and there is extreme urgency for relief; (t) where, in a criminal case, relief from an
order of arrest is urgent and the granting of such relief by the trial court is improbable; (g) where the
proceedings in the lower court are a nullity for lack of due process; (h) where the proceeding were ex parte or
in which the petitioner had no opportunity to object; and (i) where the issue raised is one purely of law or where
public interest is involved. 18
Templonuevo contended that her non-filing of a motion for reconsideration of the assailed Ombudsman
decision was justified because it would be useless. She claims that the assailed decision was final, executory
and unappealable, hence, beyond the ambit of a motion for reconsideration following Section 7, Rule III of
Administrative Order No. 07. She also argued that the Ombudsman's decision was a patent nullity considering
that her election as Vice Mayor of the same municipality precluded the attachment to her of any administrative
liability arising from the acts done while she was a Sangguniang Bayan Member.
The Court agrees with Templonuevo on her first position.
In Ombudsman v. Alano, 19 the Court stressed that Section 13(8), Article XI of the 1987 Constitution empowers
the Office of the Ombudsman to, among others, "promulgate its rules of procedure and exercise such other
powers or perform such functions or duties as may be provided by law." Pursuant to such constitutional
authority, Administrative Order No. 07 (otherwise known as the "Rules of Procedure of the Office of the
Ombudsman"), dated April 10, 1990, was issued. Section 7, Rule III thereof provides:
SEC. 7. Finality of decision. - Where the respondent is absolved of the charge, and in case of conviction where
the penalty imposed is public censure or reprimand, suspension of not more than one month, or a fine
equivalent to one month salary, the decision shall be final and unappealable. In all other cases, the decision
shall become final after the expiration of ten (10) days from receipt thereof by the respondent, unless a motion
for reconsideration or petition for certiorari shall have been filed by him as prescribed in Section 27 of RA 6770.
The Court, in interpreting the above constitutional and statutory provisions, recognizes only two instances
where a decision of the Ombudsman is considered as final and unappealable and, thus, immediately
executory. The first is when the respondent is absolved of the charge; and second is, in case of conviction,
where the penalty imposed is public censure or reprimand, suspension of not more than one month, or a fine
equivalent to one month salary.
In this case, Templonuevo was meted with a penalty of one month suspension. Accordingly, the decision of the
Ombudsman is final, unappealable and immediately executory.
Being the case, the Ombudsman's decision was beyond the reach of an appeal or even of a motion for
reconsideration.1âwphi1 This was the same ruling in Reyes v. Belisario,20 where the Court explained that a
complainant was not entitled to any corrective recourse by motion for reconsideration in the Ombudsman, or by
appeal to the courts if the penalty imposed was higher than public censure, reprimand, one-month suspension
or a fine equivalent to a one month salary. It was further written:
The clear import of Section 7, Rule III of the Ombudsman Rules is to deny the complainant in an administrative
complaint the right to appeal where the Ombudsman has exonerated the respondent of the administrative
charge. The complainant, therefore, is not entitled to any corrective recourse, whether by motion for
reconsideration in the Office of the Ombudsman, or by appeal to the courts, to effect a reversal of the
exoneration. Only the respondent is granted the right to appeal but only in case he is found liable and the
penalty imposed is higher than public censure, reprimand, one-month suspension or fine equivalent to one
month salary.21
Left without any remedy in the ordinary course of law, Templonuevo was justified in resorting directly to the CA
via a Rule 65 petition. Indeed, an independent action for certiorari may be availed of only when there is no
appeal or any plain, speedy and adequate remedy in the ordinary course of law and certiorari is not a
substitute for the lapsed remedy of appeal. 22 In other words, because petitioner could not avail a motion for
reconsideration or an appeal, her choice of a Rule 65 petition was proper.
The decision of the Ombudsman was not a patent nullity; Condonation doctrine applies.
Templonuevo claimed that the decision of the Ombudsman was null and void as the penalty imposed could no
longer be imposed on account of her election as Vice Mayor of the same municipality, which to her, operated
as forgiveness by her constituents for the acts done while she was still a Sangguniang Bayan Member. This
"theory of nullity," in a sense, does not hold water. The Ombudsman decided the case prior to the May 2010
elections. At that time,Templonuevo remained an incumbent and no event had transpired yet which would have
had an effect on her liability for the acts done during her previous term. As the elections for 2010 did not
happen yet, nothing could have substantially changed the course of action of the Ombudsman.
The election of 2010, however, became material only when the Ombudsman's decision was on appeal. It is at
this stage that the CA, should have considered Templonuevo's election as Vice Mayor as rendering the
imposition of administrative sanctions moot and academic on the basis of the condonation doctrine. Said
doctrine, despite its abandonment in Conchita Carpio-Morales v. Court of Appeals and Jejomar Erwin S. Binay,
Jr., (Carpio-Morales), 23 still applies in this case as the effect of the abandonment was made prospective in
application.
In Giron v. Ochoa,24 the Court recognized that the doctrine can be applied to a public officer who was elected
to a different position provided that it is shown that the body politic electing the person to another office is the
same. Thus, the Court ruled:
On this issue, considering the ratio decidendi behind the doctrine, the Court agrees with the interpretation of
the administrative tribunals below that the condonation doctrine applies to a public official elected to another
office. The underlying theory is that each term is separate from other terms. Thus, in Carpio-Morales, the basic
considerations are the following: first, the penalty of removal may not be extended beyond the term in which
the public officer was elected for each term is separate and distinct; second, an elective official's re-election
serves as a condonation of previous misconduct, thereby cutting the right to remove him therefor; and third,
courts may not deprive the electorate, who are assumed to have known the life and character of candidates, of
their right to elect officers. In this case, it is a given fact that the body politic, who elected him to another office,
was the same. [Emphasis supplied]
In this case, those who elected Templonuevo into office as Sangguniang Bayan member and Vice Mayor were
essentially the same. Stated otherwise, the electorate for the Vice Mayor of a municipality embraces wholly
those voting for a member of the Sangguniang Bayan. Logically, the condonation doctrine is applicable in her
case. The Court is, thus, precluded from imposing the administrative penalties of one month suspension on
account of the same people's decision to elect her again to office.
WHEREFORE, the petition is GRANTED. The February 17, 2011 and September 8, 2011 Resolutions of the
Court of Appeals in CA-G.R. SP No. 116229 are hereby REVERSED and SET ASIDE. The act committed by
petitioner Arlyn Almario-Templonuevo is deemed CONDONED.
SO ORDERED.
JOSE CATRAL MENDOZA
Associate Justice
MARIA LOURDES P.A. SERENO
Chief Justice
Republic of the Philippines
SUPREME COURT
Manila
EN BANC
G.R. No. L-49090 February 28, 1947
TEODORA L. VDA. DE MIRANDA Y OTROS, demandantes-apelantes,
vs.
FELICIANO IMPERIAL Y JUANA DE IMPERIAL, demandados-apelados.
D. Manuel M. Calleja y D. Ramon C. Fernandez en representacion de los apelantes.

D. Toribio P. Perez en representacion de los apelados.
BRIONES, J.:
Este es un asunto de anteguerra. Se presento la demanda ante el Juzgado de Primera Instancia de Albay el
25 de Noviembre de 1941, es decir, casi en visperas de estallar la guerra del Pacifico. El Juzgado dicto su
sentencia el 17 de Marzo, 1943. Se elevo el asunto para ante esta Corte Suprema, en virtud de la apelacion
interpuesta por la demandante el 9 de Junio, 1943. Antes de que pudiera decidirse, el expediente se quemo
juntamente con los demas expedientes de esta Corte en la conflagracion de Manila con motivo de la batalla de
liberacion. Lo que tenemos, por tanto, ante Nos es un expediente reconstituido con documentos
proporcionados por los abogados de la apelante, a saber: (a) copias del expediente de apelacion (record on
appeal); (b) copias del alegato sometido por los abogados de la apelante. La apelada no ha presentado
ningun alegato ni por si, ni por medio de su abogado. Los abogados de ambas partes fueron debidamente
notificados de las diligencias de reconstitucion por el comisionado de esta Corte, pero los unicos que han
comparecido han sido los abogados de la apelante, entregando las copias de que se ha hecho mencion.
Se alega en la demanda que antes del 17 de Noviembre de 1938 los conjuges demandados, Feliciano
Imperial y Juana de Imperial, debian a Elias Imperial la cantidad de P1,000; que en consideracion a esta
deuda y para garantizar su pago habian cedido, en calidad de anticresis, al citado Elias Imperial la posesion y
goce de tres parcelas de terreno arrozal de su propiedead; que en la referida fecha 17 de Noviembre, 1938,
los demandados propusieron a la demandante, Teodora L. Vda. De Miranda, que les prestase la cantidad de
P1,000 para rescatar de Elias Imperial los terrenos, subrogandose ella como acreedora en lugar de elias bajo
los mismos terminos y condiciones del contrato de anticresis celebrado con este ultimo; que como quiera que
la demandante tenia la cantidad pedida y, ademas, la demandada es su cunada, siendo viuda de un hermano
de esta, acepto la proposicion, entregando efectivamente la cantidad de P1,000 a los demandados, quienes a
su ves la devolvieron a Elias Imperial para el rescate de las fincas; que, tratandose de parientes, el contrato no
se redujo a escritura, pero despues del rescatey de haberlo hecho constar Elias Imperial al pie de los
documentos de propiedad sobre las tres parcelas de terreno, dichos documentos se entregaron en el mismo
acto de la redencion a la demandante que entonces estaba presente en compania de la demandada, como
prueba del prestamo y del traspaso del nuevo contrato de anticresis; que desde entonces la demandante
estuvo disfrutando de los productos, recibiendo su participacion en las cosechas correspondientes a 1939 y
1940 a razon de dos cosechas al ano, y en la primera cosecha de 1941, o sea un total de 5 cosechas desde el
17 de Noviembre de 1938 hasta el Abril de 1941; que la demandante ya no pudo disfrutar de la segunda
cosecha de 1941, o sea la correspondiente a Octubre, pues los demandados resolvieron desde entonces
apropiarse de tal cosecha y de las subsiguientes hasta la presente; que la cosecha recogida por los
demandados en Octubre, 1941, y que debia pertenecer a la demandante, era de 50 cavanes de palay, cuya
cotizacion en el mercado era a P2.50 el cavan esto es, un importe total de p120. Por tanto, la demandante
pide que, "bajo el primer motivo de accion, se condene a los demandados a que otorguen un documento de
hipoteca en favor de la demandante garantizando las tres parcelas de terreno mencionadas arriba para
asegurar el pago a la demandante de los mil pesos abonados por ella al Sr. Elias Imperial por cuenta de
dichos demandados, fijando en dicho documento un plazo de tres meses para el pago, o el plazo que sea
razonable segun el prudente juicio del Juzgado y mediante un interes al tipo de doce (12%) por ciento al ano;"
y "bajo el segundo motivo de accion, se condene a los demandados a pagar a la demandante la suma de
P120 como valor de la cosecha de palay levantada de las parcelas de terreno descritas en esta demanda y
apropiada ilegalmente por dichos demandados, ademas de las costas del juicio;" y "pide, por ultimo, cualquier
otro remedio justo y equitativo."
Respecto del primer motivo de accion los demandados se defienden alegando que solo recibieron de la
demandante la cantidad de P500, a la cual anadieron otros P500 para rescatar los terrenos de Elias Imperial;
y que dicha deuda de P500 quedo mas que pagada con los productos de los terrenos que recibio la
demandante en 5 cosechas consecutivas, "extinguiendose de esta manera automaticamente los derechos y
obligaciones contractuales de las partes." Respecto del segundo motivo de accion, lo niegan, y dicen que la
cosecha recogida en Octubre de 1941 y todas las que se recogieron despues pertenecian legalmente a ellos
los demandados; y que dicha cosecha de Octubre, al igual que en los años anteriores, les reporto como
participacion 70 cavanes de palay.
Los demandados plantean, ademas, en su contestacion una reconvencion alegando (1) que entre la
demandante y la demandada, Juana de Imperial, se celebro un convenio verbal en vitud del cual esta recibio
de aquella la suma de P500 para rescatar los refefridos terrnos, en la inteligencia de que la demandante haria
suyos todos los productos bajo los mismos terminos y condiciones del anterior contrato con Elias Imperial,
hasta que su credito quedase enteramente pagado con tales productos: (2) que, en efecto, el rescate se
efectuo devolviendo Elias los documentos a Juana con una nota de cancelacion de la deuda al pie de los
mismos, pero que despues la demandante tomo prestados dichos documentos bajo el pretexto de
familiarizarse con los colindantes de los terrenos, siendo esta la explicacion de como los documentos fueron a
parar en manos de la demandante reteniendolos hasta el dia de la vista; (3) que, ademas de las 3 parcelas de
que se trata, la demandante disfruto de los productos de una cuarta parcela de los demandados, montantes a
10 cavanes de palay en cada cosecha; (4) que las 4 parcelas de terreno la demandante llego a recibir como
participacion en las 5 cosechas que recogio un total de 400 cavanes de palay, y que el cavan entonces se
cotizaba a P2.50 en el mercado; (5) que, por tanto, la demandante hizo no menos de P1,000 con los
productos recibidos por ella, y descontando de dicha suma los P500 adeudados por los demandados, mas
P100 en concepto de intereses al tipo legal, todavia queda a favor de estos un saldo de P400, por lo que
piden se dicte sentencia contra la demandante por esta ultima cantidad.
Despues de visto el asunto el Juzgado dicto su sentencia en la que se estiman probados concluyentemente
los diguientes hechos: (1) que por unos 10 anos anteriores al 17 de Noviembre de 1938 los demandados
llevaban debiendo a Eleas Imperal la cantidad de P1,000: (2) que entre el acreedor y los deudores se habia
celebrado el contrato accesorio de anticresis en virtud del cual aquel disfrutaria como efectivamente disfruto
durante dicho periodo de 10 anos de todos los productos de los 3 terrenos de que se ha hecho mencion,
considerandose dichos productos como intereses del dinero prestado; (3) que, durante y disfrute los terrenos,
ni un solo grano de palay producido se aplicio para pagar o amortizar el capital del prestamo; (4) que el 17 de
Noviembre de 1938 los demandados recibieron de la demandante no P500, como aquellos alegan, sino
P1,000, para rescatar las fincas de manos de Elias Imperial siendo el convenio entre las partes que la
demandante se subrogaria como acreedora en lugar de dicho Elias Imperial bajo los mismos terminos y
condiciones del contrato de anticresis celebrado con este; que "despues de cuidadosa consideracion de las
pruebas y de todas las circunstancias concomitantes, el Juzgado concluye y, por tanto, asi declara, que la
demandante presto atualmente a los demandadosP1,000 y que el convenio entre las partes era que la
demandante recibiria los productos de las 3 parcelas anteriormente puestas en anticresis a favor de Elias
Imperial, como intereses del prestamo hasta que el mismo fuese enteramente pagado"; que, en efecto, la
demandante estuvo recibiendo tranquilamente los productos en 5 cosehcas consecutivas, pero despues de la
cosecha de Abril, 1941, los demandados desposeyeron completamente a la actora, apropiandose de todas las
cosechas.
De los hechos establecidos en la sentencia, tal como esta queda extractada, resulta evidente que el contato
de anticresis sobre que versa este asunto es el definido en el articulo 1885 del Codigo Civil que preceptua lo
siguiente: "Los contratantes pueden estipular que se compensen los intereses de la deuda con los frutos de la
finca dada en anticresis." Sin embargo, el Juzgado a quo, en vez de aplicar dicho articulo como debia por
imperativo de los hechos que declara probados y establecidos en el juicio, hace el siguiente pronunciamiento:
"Empero, no obstante este convenio, la pretension de los demandados de que el importe de los productos
recibidos por la demandante debe aplicarse al pago del capital de su deuda desues de deducidos los
intereses al tipo legal, debe ser sostenida." Es decir, el Juzgado aplica al caso no el articulo 1885 ya citado
sino el articulo 1881 del Codigo Civil cuyo texto es, a saber: "Por la anticresis el acreedor adquiere el derecho
de percibir los frutos de un inmueble de sus deudor con la obligacion de aplicarlos al pago de los intereses, si
se debieren, y despues al del capital de su credito." Y el Juzgado funda su conclusion en la sentencia dictada
por el anterior Tribunal de apelaciones en el asunto de Santa Rosa contra Noble (R.G. No. 43769, 35 Off.
Gaz., 2734; The Lawyer's Journal, Vol. V, No. 23, p. 1109), ponencia del Magistrado Hon. Jose Lopez Vito.
Asi que el tribunal a quo, despues de hacer la correspondiente operacion aritmetica aplicando los productos,
primero, al pago de los intereses, y despues al del capital de la deuda, adjudica a favor de la demandante un
saldo de P435.17 y ordena que se continue aplicando a satisfacerlo los productos de los terrenos hasta su
completo pago, o que los demandados lo solventen de una vez con intereses a razon de 6 por ciento al ano
desde el 1.º de Mayo de 1941. Contra el fallo asi dictado la demandante ha interpuesto la presente apelacion,
no planteando mas que cuestiones de derecho, a saber: que el Juzgado incurrio en error al no aplicar al
presente caso en todo su rigor al articulo 1885 del Codigo Civil; que el Juzgado no podia, de un fiat, crear
arbitrariamente para las partes un contrato no celebrado entre las mismas; que el articulo 1885 se refiere
concretamente a un tipo de anticresis y el articulo y el articulo 1881 a otro; que cuando el convenio es, como
en el caso que nos ocupa, que los productos de la finca dada en en anticresis se compensen con los intereses
de la deuda, ninguna parte de los productos debe aplicarse a la amortizacion del capital; y que por tanto, ella,
la apelante, tiene derecho a que se le devuelva integro el capital de su credito, o sea la cantidada de P1,000,
mas los productos o intereses correspondientes.
El Tribunal a quo funda su fallo en la mencionada sendos asuntos enteramente analogos, sobre todo porque
ambos proceden de una misma region — la bicolana — y se refieren a un contrato muy comun en dicha
region, el contrato llamado alli vulgarmente "sangla" o "prenda," y que en las Visayas donde se habla el
dialecto cebuano y en Mindanao se llama "saop" y tambien "prenda" a veces.
Parece superfluo decir que solamente las sentencias de esta Corte Suprema sientan jurisprudencia o doctrina
en esta jurisdiccion. Sin embargo, esto no empece que una conclusion o pronunciamiento del Tribunal de
apelaciones que cubre algun punto de derecho no resuelto todavia en nuestra jurisprudencia pueda servir de
norma juridica a los tribunales inferiores, y que esa conclusion o pronunciamiento se eleve a doctrina si,
despues de sometido a prueba en elcrisol del analisis y revision judicial, hallaramos que tenia meritos y
quilates suficientes para su consagracioncomo regla de jurisprudencia. A este efecto y para este fin hemos
examinado cuidadosa y detenidamente la sentencia del Tribunal de apelaciones en el referido asunto de
Santa Rosa contra Noble, procedente, como queda dicho, de la region bicolana lo mismo que este que nos
ocupa.
Sin suscribir — no estamos ahora llamados para ello, ni es necesario que lo hagamos — las interesantes
apreciaciones que el Tribunal de Apelaciones hace en dicha sentencia, creemos, sin embargo que el Juzgado
a quo erro al aplicarla al presente caso, pues hay entre ambos casos diferencias fundamentales, a saber:
Primera diferencia: En el asunto del Tribunal de Apelaciones la usura fue un "issue," un punto capital en
controversia. Por eso dice aquel Tribunal en su sentencia: "Pero los demandados arguyen que el contrato
consignado en el Exhibit E es usurario, con lo cual se plantea la cuestion de si la Ley No. 2655 conocida por
Ley de Usura que establece la tasa del inters que es permisible cobrar en los prestamos, es aplicable a los
contratos de anticresis." Aunque no lo dice de un modo, el Tribunal de Apelaciones, al dictaminar que la Ley
de Usuara era aplicable, fijando consiguientemente el interes cobrable en el tipo legal de 6 por ciento,
practicamente enjuicio y declaro como usurario el contrato de anticresis de que se trataba.
En el caso que tenemos ante Nos la cuestion de la usura no se suscito jamas ni en las alegaciones ni enel
juicio; y en la sentencia no hay ningun pronunciamento de hecho sobre usura; y como quiera que en esta
apelacion no se planteam mas que cuestiones de derecho dandose por establecidos y admitidos sin discusion
los hechos consignados en la sentenica, dicho se esta que nuestra facultad de revision tiene que cenirse
estricta e inflexiblemente a tales hechos, sin que nos sea permitido ir mas alla de su radio. Despues de todo,
no es extrano que los demandados no hayan suscitado ninguna cuestion sobre usura, pues popr 10 anos
habian sido deudores de Elias Imperial sin, al parecer, diferencias que empenaran sus relaciones (de hecho
Elias declaro en la vista a favor de los demandados), y ya hemos visto que la demandante no ha hecho mas
que subrogarse en lugar de Elias en el contrato de anticresis.
Segunda diferencia: Resulta evidente que la anticresis de que trata el asunto citado de Santa Rosa contra
Noble es la definida en el articulo 1881 del Codigo Civil, anticresis en que "el acreedor adquiere el derecho de
percibir los frutos de un inmueble de su deudor con la obligacion de aplicarlos al pago de los intereses, si se
debieren, y despues al del capital de su credito." He aqui lo que dice el Tribunal de Apelaciones, en su
sentencia que comentamos, sobre este respecto: "En cuanto a si la misma tasa establecida por la Ley contra
la Usura debe aplicarse cuando hay una estipulacion expresa de que los frutos se comensaran con los
intereses de la deuda con arreglo al articulo 1885, quaere: no siendo este el caso que se somete hoy a
nuestra consideracion, habiendo nosotros declarado que el Exhibit "E" cae bajo las dispocisiones del articulo
1881 del Codigo Civil." (Las cursivas son nuestras.)
En cambio, la anticresis sobre que versa el presente asunto es la definida en el articulo 1885, el cual dispone
"que los contratantes pueden estipular que se compensen los intereses de la deuda con los frutos de la finca
dada en anticresis." He aqui el terminante pronunciamiento del Juzgado a quo sobre el particular: "After a
careful consideration of the evidence and all the attending circumstances, the court concludes, and therefore
holds, that the plaintiff actually loaned the defendants P1,000, and that the agreement between the parties was
that the plaintiff would receive the products of the three parcels of land formerly conveyed in antichresis to
Elias Imperial as interests on said loan until the same is paid."1(Las cursivas son nuestras.)
Existiendo, segun conclusion misma del tribunal a quo, ese pacto de que los productos de las fincas se
compensen con los intereses de la deuda, de acuerdo con el articulo 1885 del Codigo Civil, resulta arbitrario el
cambiarlo judicialmente, haciendo para las partes uncontrato que ellas no han celebrado, o para decirlo mas
especificamente, transformando el pacto verdaderamente convenido en algo que cae bajo un articulo del
codigo que no estaba ni en la mente ni en la voluntad de los contratantes. El articulo 1255 del Codigo Civil
prescribe que "los contratantes pueden establecer los pactos, clausulas y condiciones que tengan por
conveniente, siempre que no sean contrarios a las leyes, a la moral, ni al orden publico." Esto excluye de los
contratos el fiat judicial. Los tribunales pueden interpretar los contratos; lo que no pueden hacer es
moldearlos, for jarlos para las partes.
Convenimos con el Tribunal de Apelaciones en que el contrato llamado "sangla" o "prenda" (sobre inmueble)
en Bicol, "soap" o "prenda" en Visayas y Mindanao, tiene realmente los caracteres de la anticresis y, por tanto,
puede considerarse como tal. Ademas de la venta con pacto de retro, ese contrato es el mas conocido y usual
en nuestros pueblos y barrios rurales — de el echa mano el campesino y labriego, ya para mejorar y expandir
sus cultivos, ya para comprar nuevas tierras con que aumentar sus posesiones, ya para casar a sus hijos y
dotarlos, y aun a veces para dar un entierro digno y adecuado a sus muertos. Y ¿por que no decirlo? La
desdichada pasion per el juego culmina a veces tambien en ese contrato para amargar la existencia si nor
para labrar la ruina del pequeno propietario.
La cuestion que ahora tenemos que determinar es, a saber: ¿es automatica o ministerialmente aplicable a la
anticresis la de usura, como parece colegirse de la sentencia apelada? Indudablemente que no. La anticresis,
como contrato — ya sea bajo el articulo 1881, ya bajo el articulo 1885 del Codigo Civil — no es
necesariamente usuraria; puede ser, eso si, usuraria. Pero para que asi pueda declararse, no solo es
absolutamente necesario que la usura sea un "issue," un punto capital contencioso en las alegaciones y en el
juicio, a fin de que cada parte tenga su "day in court," es decir, que pueda defenderse debida y
adecuadamente, sino que, ademas, debe demostrarse y establecerse positivamente que la usura es de tales
proporciones que, sobre repugnar a la conciencia, incline el animo a creer que, el contrato se ha utilizado
como un disfraz o artilugo para violar o evadir la ley de usura. La razon de esto es bien sencilla: en la
anticresis hay un elemento contingente, aleatorio, por naturaleza. La percepcion de los productos por el
acreedor, que es su caracteristica principal, esta sujeta a varias contingencias y eventualidades. Puede venir
una mala cosecha, o bien ninguna, ya porque ha desfogado un tifon, ya porque se han desbordado los rios
sobreviniendo una inundacion, ya porque una bandada de langostas ha devastado las siembras y
plantaciones, y porque profundas convulsiones sociales han subvertido la paz y el orden impidiendo la
labranza de los campos, etcetera, etcetera. Asi que a la anticresis no se pueden aplicar automaticamente,
ministerialmente, los articulos 2, 3 y 8 de la Ley No. 2655 sobre usura, pues estos se refieren a la percepcion
de una cantidad fija de productos: el deudor los tiene que entregar indeclinablemente, o su equivalente en
dinero, sea buena o mala la cosecha, la haya o no la haya. El hecho de que a veces en la anticresis el importe
de los frutos, al hacerse la liquidacion, exceda las tasas fijadas por la ley de usura, no hace el contrato
usurario, porque la ley da por supuesto que tal exceso es el dividendo que recoge el acreedor a cambio de la
prima de riesgos y contingencias que ha pagado encima del capital de su credito.
En la jurisprudencia americana tambien se conocen ciertos tipos de contrato analogos a nuestro "sangla" o
"saop." como lo demuestren las siguientes autoridades:
In view, however, of the rule that a creditor's return need not be limited to the statutory rate when it is affected
by a contingency putting the whole of it at hazard, a contract is ordinarily not usurious under which the creditor
is to receive, in consideration of his loan or forbearance, property or services of uncertain value, even though
the probable value is greater than lawful interest, unless the excess is so palpable as to show a corrupt intent
to violate or evade the usury laws, unless the contract is made for the purpose of such violation or evasion.2
(66 C.J., 212.)
Where the lender is to receive something else than money for his loan, as property or services, the value of
such profit being necessarily uncertain, the contract is not usurious, even though the probable value is greater
than legal interest, unless the consideration so given is so palpably in excess of the cetain profit allowed by law
as to show a corrupt intent to violate the usury laws." 2 39 Cyc. 959; Wright vs. McAlezander, 11 Ala., 236;
Rapier v. Gulf City Paper C., 77 Ala., 126. (102 Southern Reporter, p. 204.)
So, an agreement that instead of interest, the lender of money should receive the rents and profits of certain
land for a term of years, is not usurious where no intention to evade the statue is shown; and the fact that such
rents and profits happen to amount to more than lawful interests does not render the contract usurious.3(Webb
on Usury, p. 85.)
Manresa, disertando sobre las conveniencias relativas de la anticresis a pesar de que a veces se presta como
instrumento de usura, hace las siguientes atinadas observaciones:
Al proceder de esta modo los autores del Codigo, respondieron con gran acierto a una necesidad impuesta
por los modernos principios en que se inspiran las leyes del mutuo, segun los que no hay razon alguna
economica ni juridica para condenar la anticresis. Ademas, procuraron de este modo evitar daños y perjuicios
al deudor que, en otro caso, eran inevitables, pues la experiencia bien palpablemente habia demostrado que,
a pesar de la prohicion de las leyes, el pacto anticretico era muy frecuente en la practica, porque se eludian
las disposiciones prohibitorias, disfrazando la convencion con la forma o el nombre de ventas a pacto de retro,
con lo que lejos de favorecerse al prestatario, como se propuso el legislador, se le causaba gran quebranto,
toda vez que no pudiendo conceder al acreedor el goce de los frutos para aplicarlos a la amortizacion de los
intereses o al pago parcial de capital, se veian obligados a enajenar los bienes en la forma indicada,
desprendiendose de una propiedad que dificilmente podian volver a adquirir. (Manresa, Com. al Cod. Civ.
Espanol, tomo 12, pag. 545.)
La regla, pues, es, o debe ser, la siguiente: (a) la anticresis que se conoce en este pais con el nombre
vernaculo de "sangla" o "saop" no puede enjuiciarse y declararse como usuraria, a menos que la usura en si
misma se suscite ocmo un "issue," un punto contencioso entre las partes, de acuerdo con las normas
procesales estatuidas sobre el particular; (b) y para que dicho contrato se considere y declare usurario no es
bastante que los productos del inmueble dado en anticresis, al perciberse por el acreedor, excedan algun
tanto las tasas legales en materia de intereses, sino es preciso que el exceso sea tan palpable, tan repulsivo y
tan chocante a la conciencia que de necesariamente la sensacion de que el contrato se ha fraguado para
ocultar la intencion aviesa de infringir o evadir la ley de usura; (c) no mediando estas circunstancias, el
"sangla" o "saop" debe respetarse y su cumplimiento dejarse expedito bajo el articulo 1881 o el articulo 1885
del Codigo Civil, segun fuere el caso, y los tribunales nada haran para cambiar los terminos de la anticresis, la
cual debe ser ley entre las partes.
El caso que nos ocupa ofrece algunas dificultades en lo que respecta al fallo que debe dictarse. La
demandante pide que se condene y oblique a los demandados a otorgar a su favor un documento de hipoteca
sobre las tres parcelas de terreno para garantizar el pago del al deuda de P1,000, "fijando en dicho
documento un plazo de tres meses para el pago, o el plazo que se razonable segun el preduente juicio del
Juzgado y mediante un interes al tipo de 12 por ciento al ano; o en su lugar, cualquier otro remedio que fuere
procedente." A nuestro juicio, esto no haria mas que demorar la disposicion y liquidacion definitiva del asunto
en perjuicio de las partes y de una expedita administracion de justicia.
Habiendose posesionado los demandados de las parcelas de terreno por ellos traspasadas en anticresis a los
demandantes y disfrutado de sus frutos desde el mes de Octubre de 1941 hasta a la fecha, y demostratod los
demandantes su conformidad en dar por teminado el contrato anticretico al presentar la demanda el 25 de
Noviembre de 1941, no para recuperar dichas parceles de terreno, sino para exigir el pago de las deuda con
los intereses correspondientes desde la citada fecha, previa revocacion de la sentenciaapelada, dictamos el
siguiente fallo:.
(1) Se condena a los demandados a pagar a los demandantes la cantidad de mil pesos (P1,000), importe del
credito de estos ultimos, con intereses a razon de 6 por ciento al ano a partir del 25 de Noviembre de 1941 en
que se presento la demanda, y las costas judiciales, debiendo pagarse dicha suma con sus intereses y las
costas a los demandantes, o depositarse en el Juzgado de Primera Instancia de Albay dentro del plazo de tres
meses contado desde que oficialmente se levante la presente moratoria;
(2) En defecto de pago, conforme se ordena en el parrafo anterior, las tres parcelas de terreno sobre que
versa este asunto se venderan por el Sheriff en publica subasta de acuerdo con la ley sobre cobro de credito
hipotecario;
(3) Entretanto no se efectue el pago, conforme se ordena en esta sentencia, la suma adeudada con sus
intereses legales y las costas judiciales pasaran como un gravamen (lien) preferente sobre las tres parcelas
de terreno en cuestion. Asi se ordena.
Moran, Pres., Feria, Bengzon, Padilla y Tuazon, MM., estan conformes.

Separate Opinions
PARAS, J., dissenting:
Although the trial court held that "the plaintiff actually loaned the defendants P1,000, and that the agreement
between the parties was that the plaintiff would receive the products of the three parcels of land formerly
conveyed in antichresis to Elias Imperial as interests on said loan until the same is paid," it nevertheless
sustained, citing the decision of the Court of Appeals in the case of Santa Rosa vs. Noble (35 Off. Gaz., 2724),
"the contention of the defendants that the value of the products received by the plaintiff, after deducting
therefrom the interests at legal rate, should be applied to the principal of their debt."
The plaintiff has appealed; does not controvert the correctness of the appraisal made by the trial court of the
value of the products received by her from the lots in question: but contends that said court should have
applied article 1885 of the Civil Code which provides that "the contracting parties may stipulate that the interest
of the debt be set off against the fruits of the estate given in antichresis." In other words, it is the view of the
plaintiff that the products, regardless of their value, should belong to her in payment of the interest on
defendant's loan of P1,000. This is also the view expressed in the majority opinion.
I dissent. The right of the contracting parties to establish any pacts, clauses, and conditions they may deem
advisable, is subject to the proviso that "they are not contrary to law, morals, or public order." (Article 1255,
Civil Code.) After the enactment of the Usury Law (Act No. 2655), which fixes the rate of interest, in the
absence of express stipulation, at six per centum per annum (section 1) and provides (section 8) that "all loans
under which payment is to be made in agricultural products or seed or in any other kind of commodities shall
also be null and void unless they provide that such products or seeds or other commodities shall be appraised
at the time when the obligation falls due at the current local market price," article 1885 of the Civil Code must
be considered modified, if not repealed under the repealing clause (section 11) of the Usury Law. In other
words, any antichretic agreement, under either article 1881 or article 1885, may now be validly enforced only in
the light of the provisions of the Usury Law. The unrestricted freedom conceded in article 1855 was good
before the Government had laid down its policy regarding interest on loans.
El articulo 1881 sanciona, pues, la regla general que ha de regir forzosa y necesariamente siempre que no
exista el pacto especial indicado, y el 1885 establece la excepcion de esa regla para el caso de que se
estipule dicho pacto.
Este es consecuencia de la libertad concedida para la fijacion de los intereses, pues abolida la tasa legal por
la ley de 1856, las partes pueden fijar libremente la cuantia y condicion de dichos intereses, pudiendo
percibirse los mismos en dinero que en especie, y, por consiguiente, compensarse los intereses con los frutos.
(12 Manresa, Codigo Civil, pag. 482.)
The majority argue that the Usury Law cannot be applied because the defense of usury was not set up. It
appears, however, that, as amitted by the majority, the defendant alleged in his answer that "la demandante
hizo no menos de P1,000 en los productos recibidos por ella, y descontando de dicha suma los P500
adeudados por los demandados, mas P100 en concepto de intereses al tipo legal, todavia queda a favor de
estos un saldo de P400, por lo que piden se dicte sentencia contra la demandante por esta ultima cantidad." If
this allegation did not amount to a charge that the plaintiff received more than the legal interest, it was
sufficient to apprise the court and the plaintiff that it was the contention of the defendant that the plaintiff had no
right to apply the products entirely in compensation of the interest notwithstanding their agreement, and this
issue should be decided in the light of existing law which it was not necessary for the defendant to specify in
his answer. We would not thus be digressing from the issues raised by the parties, or creating new ones, by
simply adjudicating concrete cases conformably to law.
. . . es manifiesto que los Tribunales pueden en cada caso concreto apreciar la naturaleza de la obligacion y
condiciones a ella anejas, si determinado pacto la constituye para los efectos procedentes en derecho. . . . (11
Manresa, Codigo Civil, pag. 550.)
The contingent character of the arrangement contemplated by Article 1885, cannot warrant its continued
existence. The Usury Law, which is of later date and therefore controlling, protects borrowers and at the same
time eliminate the element of chance that may prove disadvantageous to lenders who are to be paid in
agricultural products.
The appealed judgment should be affirmed.
Republic of the Philippines
SUPREME COURT
Manila
EN BANC

G.R. No. L-114783 December 8, 1994


ROBERT V. TOBIAS, RAMON M. GUZMAN, TERRY T. LIM, GREGORIO D. GABRIEL, and ROBERTO R.
TOBIAS, JR. petitioners,
vs.
HON. CITY MAYOR BENJAMIN S. ABALOS, CITY TREASURER WILLIAM MARCELINO, and THE
SANGGUNIANG PANLUNGSOD, all of the City of Mandaluyong, Metro Manila, respondents.
Estrella, Bautista & Associates for petitioners.

BIDIN, J.:
Invoking their rights as taxpayers and as residents of Mandaluyong, herein petitioners assail the
constitutionality of Republic Act No. 7675, otherwise known as "An Act Converting the Municipality of
Mandaluyong into a Highly Urbanized City to be known as the City of Mandaluyong."
Prior to the enactment of the assailed statute, the municipalities of Mandaluyong and San Juan belonged to
only one legislative district. Hon. Ronaldo Zamora, the incumbent congressional representative of this
legislative district, sponsored the bill which eventually became R.A. No. 7675. President Ramos signed R.A.
No. 7675 into law on February 9, 1994.
Pursuant to the Local Government Code of 1991, a plebiscite was held on April 10, 1994. The people of
Mandaluyong were asked whether they approved of the conversion of the Municipality of Mandaluyong into a
highly urbanized city as provided under R.A. No. 7675. The turnout at the plebiscite was only 14.41% of the
voting population. Nevertheless, 18,621 voted "yes" whereas 7,911 voted "no." By virtue of these results, R.A.
No. 7675 was deemed ratified and in effect.
Petitioners now come before this Court, contending that R.A. No. 7675, specifically Article VIII, Section 49
thereof, is unconstitutional for being violative of three specific provisions of the Constitution.
Article VIII, Section 49 of R.A. No. 7675 provides:
As a highly-urbanized city, the City of Mandaluyong shall have its own legislative district with the first
representative to be elected in the next national elections after the passage of this Act. The remainder of the
former legislative district of San Juan/Mandaluyong shall become the new legislative district of San Juan with
its first representative to be elected at the same election.
Petitioner's first objection to the aforequoted provision of R.A. No. 7675 is that it contravenes the "one subject-
one bill" rule, as enunciated in Article VI, Section 26(1) of the Constitution, to wit:
Sec. 26(1). Every bill passed by the Congress shall embrace only one subject which shall be expressed in the
title thereof.
Petitioners allege that the inclusion of the assailed Section 49 in the subject law resulted in the latter
embracing two principal subjects, namely: (1) the conversion of Mandaluyong into a highly urbanized city; and
(2) the division of the congressional district of San Juan/Mandaluyong into two separate districts.
Petitioners contend that the second aforestated subject is not germane to the subject matter of R.A. No. 7675
since the said law treats of the conversion of Mandaluyong into a highly urbanized city, as expressed in the title
of the law. Therefore, since Section 49 treats of a subject distinct from that stated in the title of the law, the "one
subject-one bill" rule has not been complied with.
Petitioners' second and third objections involve Article VI, Sections 5(1) and (4) of the Constitution, which
provide, to wit:
Sec. 5(1). The House of Representatives shall be composed of not more than two hundred and fifty members,
unless otherwise fixed by law, who shall be elected from legislative districts apportioned among the provinces,
cities, and the Metropolitan Manila area in accordance with the number of their respective inhabitants, and on
the basis of a uniform and progressive ratio, and those who, as provided by law, shall be elected through a
party list system of registered national, regional and sectoral parties or organizations.
Sec. 5(4). Within three years following the return of every census, the Congress shall make a reapportionment
of legislative districts based on the standard provided in this section.
Petitioners argue that the division of San Juan and Mandaluyong into separate congressional districts under
Section 49 of the assailed law has resulted in an increase in the composition of the House of Representatives
beyond that provided in Article VI, Sec. 5(1) of the Constitution. Furthermore, petitioners contend that said
division was not made pursuant to any census showing that the subject municipalities have attained the
minimum population requirements. And finally, petitioners assert that Section 49 has the effect of preempting
the right of Congress to reapportion legislative districts pursuant to Sec. 5(4) as aforecited.
The contentions are devoid of merit.
Anent the first issue, we agree with the observation of the Solicitor General that the statutory conversion of
Mandaluyong into a highly urbanized city with a population of not less than two hundred fifty thousand
indubitably ordains compliance with the "one city-one representative" proviso in the Constitution:
. . . Each city with a population of at least two hundred fifty thousand, or each province, shall have at least one
representative" (Article VI, Section 5(3), Constitution).
Hence, it is in compliance with the aforestated constitutional mandate that the creation of a separate
congressional district for the City of Mandaluyong is decreed under Article VIII, Section 49 of R.A. No. 7675.
Contrary to petitioners' assertion, the creation of a separate congressional district for Mandaluyong is not a
subject separate and distinct from the subject of its conversion into a highly urbanized city but is a natural and
logical consequence of its conversion into a highly urbanized city. Verily, the title of R.A. No. 7675, "An Act
Converting the Municipality of Mandaluyong Into a Highly Urbanized City of Mandaluyong" necessarily includes
and contemplates the subject treated under Section 49 regarding the creation of a separate congressional
district for Mandaluyong.
Moreover, a liberal construction of the "one title-one subject" rule has been invariably adopted by this court so
as not to cripple or impede legislation. Thus, in Sumulong v. Comelec (73 Phil. 288 [1941]), we ruled that the
constitutional requirement as now expressed in Article VI, Section 26(1) "should be given a practical rather
than a technical construction. It should be sufficient compliance with such requirement if the title expresses the
general subject and all the provisions are germane to that general subject."
The liberal construction of the "one title-one subject" rule had been further elucidated in Lidasan v. Comelec
(21 SCRA 496 [1967]), to wit:
Of course, the Constitution does not require Congress to employ in the title of an enactment, language of such
precision as to mirror, fully index or catalogue all the contents and the minute details therein. It suffices if the
title should serve the purpose of the constitutional demand that it inform the legislators, the persons interested
in the subject of the bill and the public, of the nature, scope and consequences of the proposed law and its
operation" (emphasis supplied).
Proceeding now to the other constitutional issues raised by petitioners to the effect that there is no mention in
the assailed law of any census to show that Mandaluyong and San Juan had each attained the minimum
requirement of 250,000 inhabitants to justify their separation into two legislative districts, the same does not
suffice to strike down the validity of R.A. No. 7675. The said Act enjoys the presumption of having passed
through the regular congressional processes, including due consideration by the members of Congress of the
minimum requirements for the establishment of separate legislative districts. At any rate, it is not required that
all laws emanating from the legislature must contain all relevant data considered by Congress in the enactment
of said laws.
As to the contention that the assailed law violates the present limit on the number of representatives as set
forth in the Constitution, a reading of the applicable provision, Article VI, Section 5(1), as aforequoted, shows
that the present limit of 250 members is not absolute. The Constitution clearly provides that the House of
Representatives shall be composed of not more than 250 members, "unless otherwise provided by law." The
inescapable import of the latter clause is that the present composition of Congress may be increased, if
Congress itself so mandates through a legislative enactment. Therefore, the increase in congressional
representation mandated by R.A. No. 7675 is not unconstitutional.
Thus, in the absence of proof that Mandaluyong and San Juan do not qualify to have separate legislative
districts, the assailed Section 49 of R.A.
No. 7675 must be allowed to stand.
As to the contention that Section 49 of R.A. No. 7675 in effect preempts the right of Congress to reapportion
legislative districts, the said argument borders on the absurd since petitioners overlook the glaring fact that it
was Congress itself which drafted, deliberated upon and enacted the assailed law, including Section 49
thereof. Congress cannot possibly preempt itself on a right which pertains to itself.
Aside from the constitutional objections to R.A. No. 7675, petitioners present further arguments against the
validity thereof.
Petitioners contend that the people of San Juan should have been made to participate in the plebiscite on R.A. No. 7675
as the same involved a change in their legislative district. The contention is bereft of merit since the principal subject
involved in the plebiscite was the conversion of Mandaluyong into a highly urbanized city. The matter of separate district
representation was only ancillary thereto. Thus, the inhabitants of San Juan were properly excluded from the said
plebiscite as they had nothing to do with the change of status of neighboring Mandaluyong.
Similarly, petitioners' additional argument that the subject law has resulted in "gerrymandering," which is the practice of
creating legislative districts to favor a particular candidate or party, is not worthy of credence. As correctly observed by the
Solicitor General, it should be noted that Rep. Ronaldo Zamora, the author of the assailed law, is the incumbent
representative of the former San Juan/Mandaluyong district, having consistently won in both localities. By dividing San
Juan/Mandaluyong, Rep. Zamora's constituency has in fact been diminished, which development could hardly be
considered as favorable to him. WHEREFORE, the petition is hereby DISMISSED for lack of merit. SO ORDERED. Narvasa, C.J., Padilla,
Regalado, Davide, Jr., Romero, Bellosillo, Melo, Quiason, Puno, Vitug, Kapunan and Mendoza, JJ., concur. Feliciano, J., is on leave.
Republic of the Philippines
SUPREME COURT
Manila
EN BANC
G.R. No. 167011 April 30, 2008
SPOUSES CARLOS S. ROMUALDEZ and ERLINDA R. ROMUALDEZ, petitioners,
vs.
COMMISSION ON ELECTIONS and DENNIS GARAY, respondents.
DECISION
CHICO-NAZARIO, J.:
This treats of the Petition for Review on Certiorari with a prayer for the issuance of a Temporary Restraining
Order and/or Writ of Preliminary Injunction filed by petitioners Spouses Carlos S. Romualdez and Erlinda R.
Romualdez seeking to annul and set aside the Resolutions, dated 11 June 20041 and 27 January 20052 of the
Commission on Elections (COMELEC) in E.O. Case No. 2000-36. In the Resolution of 11 June 2004, the
COMELEC En Banc directed the Law Department to file the appropriate Information with the proper court
against petitioners Carlos S. Romualdez and Erlinda Romualdez for violation of Section 10(g) and (j)3 in
relation to Section 45(j)4 of Republic Act No. 8189, otherwise known as The Voter’s Registration Act of 1996.5
Petitioners’ Motion for Reconsideration thereon was denied.
The factual antecedents leading to the instant Petition are presented hereunder:
On 12 July 2000, private respondent Dennis Garay, along with Angelino Apostol6 filed a Complaint-Affidavit7
with the COMELEC thru the Office of the Election Officer in Burauen, Leyte, charging petitioners with violation
of Section 261(y)(2)8 and Section 261(y)(5)9 of the Omnibus Election Code, similarly referred to as Batas
Pambansa Blg. 881; and Section 1210 of Republic Act No. 8189.
Private respondent deposed, inter alia, that: petitioners are of legal ages and residents of 113 Mariposa Loop,
Mariposa Street, Bagong Lipunan ng Crame, Quezon City; on 9 May 2000 and 11 May 2000, petitioners Carlos
S. Romualdez and Erlinda R. Romualdez, applied for registration as new voters with the Office of the Election
Officer of Burauen, Leyte, as evidenced by Voter Registration Record Nos. 42454095 and 07902952,
respectively; in their sworn applications, petitioners made false and untruthful representations in violation of
Section 1011 of Republic Act Nos. 8189, by indicating therein that they are residents of 935 San Jose Street,
Burauen, Leyte, when in truth and in fact, they were and still are residents of 113 Mariposa Loop, Mariposa
Street, Bagong Lipunan ng Crame, Quezon City, and registered voters of Barangay Bagong Lipunan ng
Crame, District IV, Quezon City, Precinct No. 4419-A, as evidenced by Voter Registration Record Nos.
26195824 and 26195823; and that petitioners, knowing fully well said truth, intentionally and willfully, did not fill
the blank spaces in said applications corresponding to the length of time which they have resided in Burauen,
Leyte. In fine, private respondent charged petitioners, to wit:
Respondent-spouses, Carlos Sison Romualdez and Erlinda Reyes Romualdez committed and consummated
election offenses in violation of our election laws, specifically, Sec. 261, paragraph (y), subparagraph (2), for
knowingly making any false or untruthful statements relative to any data or information required in the
application for registration, and of Sec. 261, paragraph (y), subparagraph (5), committed by any person who,
being a registered voter, registers anew without filing an application for cancellation of his previous registration,
both of the Omnibus Election Code (BP Blg. 881), and of Sec. 12, RA 8189 (Voter Registration Act) for failure
to apply for transfer of registration records due to change of residence to another city or municipality."12
The Complaint-Affidavit contained a prayer that a preliminary investigation be conducted by the COMELEC,
and if the evidence so warrants, the corresponding Information against petitioners be filed before the Regional
Trial Court (RTC) for the prosecution of the same.
Petitioners filed a Joint Counter-Affidavit with Motion to Dismiss13 dated 2 April 2001. They contended therein
that they did not make any false or untruthful statements in their application for registration. They avowed that
they intended to reside in Burauen, Leyte, since the year 1989. On 9 May 2000, they took actual residence in
Burauen, Leyte, by leasing for five (5) years, the house of Juanito and Fe Renomeron at No. 935, San Jose
Street in Burauen, Leyte. On even date, the Barangay District III Council of Burauen passed a Resolution of
Welcome, expressing therein its gratitude and appreciation to petitioner Carlos S. Romualdez for choosing the
Barangay as his official residence.14
On 28 November 2003, Atty. Maria Norina S. Tangaro-Casingal, COMELEC Investigating Officer, issued a
Resolution, recommending to the COMELEC Law Department (Investigation and Prosecution Division), the
filing of the appropriate Information against petitioners, disposing, thus:
PREMISES CONSIDERED, the Law Department (Investigation and Prosecution Division), RECOMMENDS to
file the necessary information against Carlos Sison Romualdez before the proper Regional Trial Court for
violation of Section 10 (g) and (j) in relation to Section 45 (j) of Republic Act 8189 and to authorize the Director
IV of the Law Department to designate a Comelec Prosecutor to handle the prosecution of the case with the
duty to submit periodic report after every hearing of the case.15
On 11 June 2004, the COMELEC En Banc found no reason to depart from the recommendatory Resolution of
28 November 2003, and ordered, viz:
WHEREFORE, premises considered, the Law Department is hereby directed to file the appropriate information
with the proper court against respondents CARLOS S. ROMUALDEZ AND ERLINDA ROMUALDEZ for
violation of Section 10 (g) and (j) in relation to Section 45 (j) of the Republic Act No. 8189.16
Petitioners filed a Motion for Reconsideration thereon.
Acting on the Motion, the COMELEC found no cogent reason to disturb the assailed En Banc Resolution of 11
June 2004,17 rationalizing, thus:
However, perusal of the records reveal (sic) that the arguments and issues raised in the Motion for
Reconsideration are merely a rehash of the arguments advanced by the Respondents in [their] Memorandum
received by the Law Department on 17 April 2001, the same [w]as already considered by the Investigating
Officer and was discussed in her recommendation which eventually was made as the basis for the En Banc’s
resolution.
As aptly observed by the Investigating Officer, the filing of request for the cancellation and transfer of Voting
Registration Record does not automatically cancel the registration records. The fact remains that at the time of
application for registration as new voter of the herein Respondents on May 9 and 11, 2001 in the Office of
Election Officer of Burauen, Leyte their registration in Barangay 4419-A, Barangay Bagong Lipunan ng Crame
Quezon City was still valid and subsisting.18
On 12 January 2006, Alioden D. Dalaig, Director IV, Law Department of the COMELEC filed with the RTC,
Burauen, Leyte, separate Informations against petitioner Carlos S. Romualdez19 for violation of Section 10(g),
in relation to Section 45(j) of Republic Act No. 8189, and against petitioner Erlinda R. Romualdez20 for violation
of Section 10(g), in relation to Section 45(j) of Republic Act No. 8189, subsequently docketed as Crim. Case
No. BN-06-03-4185 and Crim. Case No. BN-06-03-4183, respectively. Moreover, separate Informations for
violation of Section 10(j), in relation to Section 45(j) of Republic Act No. 8189 were filed against petitioners.21
Hence, petitioners come to us via the instant Petition, submitting the following arguments:
I
RESPONDENT COMMISSION ON ELECTIONS GRAVELY ABUSED ITS DISCRETION AMOUNTING TO
LACK OF OR IN EXCESS OF ITS JURISDICTION; and
II
COMELEC GRAVELY ABUSED ITS DISCRETION WHEN IT PREMISED ITS RESOLUTION ON A
MISAPPREHENSION OF FACTS AND FAILED TO CONSIDER CERTAIN RELEVANT FACTS THAT WOULD
JUSTIFY A DIFFERENT CONCLUSION.22
On 4 May 2006, petitioners filed a Motion Reiterating Prayer for Issuance of Writ of Preliminary Injunction and
to Cite for Indirect Contempt,23 alleging that two separate Informations, both dated 12 January 2006, were filed
with the RTC by the COMELEC against petitioner Carlos S. Romualdez for violation of Section 10(j), in relation
to Section 45(j) of Republic Act No. 8189, in Criminal Case No. BN-06-03-9184; and for violation of Section
10(g), in relation to Section 45(j) of Republic Act No. 8189, in Criminal Case No. BN-06-03-9185. Similarly, the
Motion alleged that the COMELEC filed with the RTC, two separate Informations, both dated 12 January 2006,
against petitioner Erlinda R. Romualdez, charging her with the same offenses as those charged against
petitioner Carlos S. Romualdez, and thereafter, docketed as Criminal Case No. BN-06-03-9182, and No.
BN-06-03-9183.
On 20 June 2006, this Court issued a Resolution24 denying for lack of merit petitioners’ Motion Reiterating
Prayer for Issuance of Writ of Preliminary Injunction and to Cite for Indirect Contempt.
We shall now resolve, in seriatim, the arguments raised by petitioners.
Petitioners contend that the election offenses for which they are charged by private respondent are entirely
different from those which they stand to be accused of before the RTC by the COMELEC. According to
petitioners, private respondent’s complaint charged them for allegedly violating, to wit: 1) Section 261(y)(2) and
Section 261(y)(5) of the Omnibus Election Code, and 2) Section 12 of the Voter’s Registration Act; however,
the COMELEC En Banc directed in the assailed Resolutions, that they be charged for violations of Section
10(g) and (j), in relation to Section 45(j) of the Voter’s Registration Act. Essentially, petitioners are of the view
that they were not accorded due process of law. Specifically, their right to refute or submit documentary
evidence against the new charges which COMELEC ordered to be filed against them. Moreover, petitioners
insist that Section 45(j) of the Voter’s Registration Act is vague as it does not refer to a definite provision of the
law, the violation of which would constitute an election offense; hence, it runs contrary to Section 14(1)25 and
Section 14(2),26 Article III of the 1987 Constitution.
We are not persuaded.
First. The Complaint-Affidavit filed by private respondent with the COMELEC is couched in a language which
embraces the allegations necessary to support the charge for violation of Section 10(g) and (j), in relation to
Section 45(j) of Republic Act No. 8189.
A reading of the relevant laws is in order, thus:
Section 10(g) and Section 10(j) of Republic Act No. 8189, provide as follows:
SEC. 10 – Registration of Voters. - A qualified voter shall be registered in the permanent list of voters in a
precinct of the city or municipality wherein he resides to be able to vote in any election. To register as a voter,
he shall personally accomplish an application form for registration as prescribed by the Commission in three
(3) copies before the Election Officer on any date during office hours after having acquired the qualifications of
a voter.
The application shall contain the following data:
xxxx
(g) Periods of residence in the Philippines and in the place of registration;
xxxx
(j) A statement that the application is not a registered voter of any precinct;
The application for registration shall contain three (3) specimen signatures of the applicant, clear and legible
rolled prints of his left and right thumbprints, with four identification size copies of his latest photograph,
attached thereto, to be taken at the expense of the Commission.
Before the applicant accomplishes his application for registration, the Election Officer shall inform him of the
qualifications and disqualifications prescribed by law for a voter, and thereafter, see to it that the accomplished
application contains all the data therein required and that the applicant’s specimen signatures, fingerprints, and
photographs are properly affixed in all copies of the voter’s application.
Moreover, Section 45(j) of the same Act, recites, thus:
SEC. 45. Election Offense. – The following shall be considered election offenses under this Act:
xxxx
(j) Violation of any of the provisions of this Act.
Significantly, the allegations in the Complaint-Affidavit which was filed with the Law Department of the
COMELEC, support the charge directed by the COMELEC En Banc to be filed against petitioners with the
RTC. Even a mere perusal of the Complaint-Affidavit would readily show that Section 10 of Republic Act No.
8189 was specifically mentioned therein. On the matter of the acts covered by Section 10(g) and (j), the
Complaint-Affidavit, spells out the following allegations, to wit:
5. Respondent-spouses made false and untruthful representations in their applications (Annexes "B" and "C")
in violation of the requirements of Section 10, RA 8189 (The Voter’s Registration Act):
5.1 Respondent-spouses, in their sworn applications (Annexes "B" and "C", claimed to be residents of 935 San
Jose [S]treet, Burauen, Leyte, when in truth and in fact, they were and still are residents of 113 Mariposa Loop,
Mariposa [S]treet, Bagong Lipunan ng Crame, Quezon City and registered voters of Barangay Bagong Lipunan
ng Crame, District IV, Quezon City, Precinct No. 4419-A, a copy of the Certification issued by Hon. Emmanuel
V. Gozon, Punong Barangay, Bagong Lipunan ng Crame, Quezon City is hereto attached and made an integral
part hereof, as Annex "D";
5.2 Respondent-spouses knowing fully well said truth, intentionally and willfully, did not fill the blank spaces in
their applications (Annexes "B" and "C") corresponding to the length of time they have resided in Burauen,
Leyte;
6. Respondent-spouses, in (sic) all intents and purposes, were and still are residents and registered voters of
Quezon City, as evidenced by Voter Registration Record Nos. 26195824 and 26195823, respectively;
photocopies of which are hereto attached as Annexes "E" and "F"[.] Likewise, attached is a
"Certification" (Annex "G") of Ms. Evelyn B. Bautista, Officer-in-Charge of the Office of the Election Officer,
Fourth District, Quezon City, dated May 31, 2000, together with a certified copy of the computer print-out of the
list of voters of Precinct No. 4419-A (Annex "G-1" ) containing the names of voters Carlos Romualdez and
Erlinda Reyes Romualdez. The Certification reads as follows:
"THIS IS TO CERTIFY that as per office record MR. CARLOS ROMUALDEZ and MS. ERLINDA REYES
ROMUALDEZ are registered voters of Barangay Bagong Lipunan ng Crame, District IV, Quezon City, Precinct
Number 4419A with voters affidavit serial nos. 26195824 and 26195823, respectively.
This certification is issued for whatever legal purpose it may serve."
7. Respondent-spouses, registered as new voters of the Municipality of Burauen, Leyte, [in spite of] the fact
that they were and still are, registered voters of Quezon City as early as June 22, 1997;
7.1 That, Double Registration is an election offense.
A person qualified as a voter is only allowed to register once.
If a person registers anew as a voter in spite of a subsisting registration, the new application for registration will
be disapproved. The registrant is also liable not only for an election offense of double registration, but also for
another election offense of knowingly making any false or untruthful statement relative to any data or
information required in the application for registration.
In fact, when a person applies for registration as a voter, he or she fills up a Voter Registration Record form in
his or her own handwriting, which contains a Certification which reads:
"I do solemnly swear that the above statements regarding my person are true and correct; that I possess all
the qualifications and none of the disqualifications of a voter; that the thumbprints, specimen signatures and
photographs appearing herein are mine; and that I am not registered as a voter in any other precinct."27
Petitioners cannot be said to have been denied due process on the claim that the election offenses charged
against them by private respondent are entirely different from those for which they stand to be accused of
before the RTC, as charged by the COMELEC. In the first place, there appears to be no incongruity between
the charges as contained in the Complaint-Affidavit and the Informations filed before the RTC, notwithstanding
the denomination by private respondent of the alleged violations to be covered by Section 261(y)(2) and
Section 261(y)(5) of the Omnibus Election Code and Section 12 of Republic Act No. 8189. Evidently, the
Informations directed to be filed by the COMELEC against petitioners, and which were, in fact, filed with the
RTC, were based on the same set of facts as originally alleged in the private respondent’s Complaint-Affidavit.
Petitioners buttress their claim of lack of due process by relying on the case of Lacson v. Executive Secretary.
28 Citing Lacson, petitioners argue that the real nature of the criminal charge is determined by the actual recital

of facts in the Complaint or Information; and that the object of such written accusations was to furnish the
accused with such a description of the charge against him, as will enable him to make his defense. Let it be
said that, in Lacson, this court resolved the issue of whether under the allegations in the subject Informations
therein, it is the Sandiganbayan or the Regional Trial Court which has jurisdiction over the multiple murder
case against therein petitioner and intervenors. In Lacson, we underscored the elementary rule that the
jurisdiction of a court is determined by the allegations in the Complaint or Information, and not by the evidence
presented by the parties at the trial.29 Indeed, in Lacson, we articulated that the real nature of the criminal
charge is determined not from the caption or preamble of the Information nor from the specification of the
provision of law alleged to have been violated, they being conclusions of law, but by the actual recital of facts in
the Complaint or Information.30
Petitioners’ reliance on Lacson, however, does not support their claim of lack of due process because, as we
have said, the charges contained in private respondent’s Complaint-Affidavit and the charges as directed by
the COMELEC to be filed are based on the same set of facts. In fact, the nature of the criminal charges in
private respondent’s Complaint-Affidavit and that of the charges contained in the Informations filed with the
RTC, pursuant to the COMELEC Resolution En Banc are the same, such that, petitioners cannot claim that
they were not able to refute or submit documentary evidence against the charges that the COMELEC filed with
the RTC. Petitioners were afforded due process because they were granted the opportunity to refute the
allegations in private respondent’s Complaint-Affidavit. On 2 April 2001, in opposition to the Complaint-Affidavit,
petitioners filed a Joint Counter-Affidavit with Motion to Dismiss with the Law Department of the COMELEC.
They similarly filed a Memorandum before the said body. Finding that due process was not dispensed with
under the circumstances in the case at bar, we agree with the stance of the Office of the Solicitor General that
petitioners were reasonably apprised of the nature and description of the charges against them. It likewise
bears stressing that preliminary investigations were conducted whereby petitioners were informed of the
complaint and of the evidence submitted against them. They were given the opportunity to adduce
controverting evidence for their defense. In all these stages, petitioners actively participated.
The instant case calls to our minds Orquinaza v. People,31 wherein the concerned police officer therein
designated the offense charged as sexual harassment; but, the prosecutor found that there was no
transgression of the anti-sexual harassment law, and instead, filed an Information charging therein petitioner
with acts of lasciviousness. On a claim that there was deprivation of due process, therein petitioner argued that
the Information for acts of lasciviousness was void as the preliminary investigation conducted was for sexual
harassment. The court held that the designation by the police officer of the offense is not conclusive as it is
within the competence of the prosecutor to assess the evidence submitted and determine therefrom the
appropriate offense to be charged.
Accordingly, the court pronounced that the complaint contained all the allegations to support the charge of acts
of lasciviousness under the Revised Penal Code; hence, the conduct of another preliminary investigation for
the offense of acts of lasciviousness would be a futile exercise because the complainant would only be
presenting the same facts and evidence which have already been studied by the prosecutor.32 The court
frowns upon such superfluity which only serves to delay the prosecution and disposition of the criminal
complaint.33
Second. Petitioners would have this court declare Section 45(j) of Republic Act No. 8189 vague, on the ground
that it contravenes the fair notice requirement of the 1987 Constitution, in particular, Section 14(1) and Section
14(2), Article III of thereof. Petitioners submit that Section 45(j) of Republic Act No. 8189 makes no reference to
a definite provision of the law, the violation of which would constitute an election offense.
We are not convinced.
The void-for-vagueness doctrine holds that a law is facially invalid if men of common intelligence must
necessarily guess at its meaning and differ as to its application.34 However, this Court has imposed certain
limitations by which a criminal statute, as in the challenged law at bar, may be scrutinized. This Court has
declared that facial invalidation35 or an "on-its-face" invalidation of criminal statutes is not appropriate.36 We
have so enunciated in no uncertain terms in Romualdez v. Sandiganbayan, 37 thus:
In sum, the doctrines of strict scrutiny, overbreadth, and vagueness are analytical tools developed for testing
"on their faces" statutes in free speech cases or, as they are called in American law, First Amendment cases.
They cannot be made to do service when what is involved is a criminal statute. With respect to such statute,
the established rule is that 'one to whom application of a statute is constitutional will not be heard to attack the
statute on the ground that impliedly it might also be taken as applying to other persons or other situations in
which its application might be unconstitutional.' As has been pointed out, 'vagueness challenges in the First
Amendment context, like overbreadth challenges typically produce facial invalidation, while statutes found
vague as a matter of due process typically are invalidated [only] 'as applied' to a particular
defendant.'" (underscoring supplied)
"To this date, the Court has not declared any penal law unconstitutional on the ground of ambiguity." While
mentioned in passing in some cases, the void-for-vagueness concept has yet to find direct application in our
jurisdiction. In Yu Cong Eng v. Trinidad, the Bookkeeping Act was found unconstitutional because it violated the
equal protection clause, not because it was vague. Adiong v. Comelec decreed as void a mere Comelec
Resolution, not a statute. Finally, Santiago v. Comelec held that a portion of RA 6735 was unconstitutional
because of undue delegation of legislative powers, not because of vagueness.
Indeed, an "on-its-face" invalidation of criminal statutes would result in a mass acquittal of parties
whose cases may not have even reached the courts. Such invalidation would constitute a departure
from the usual requirement of "actual case and controversy" and permit decisions to be made in a
sterile abstract context having no factual concreteness. In Younger v. Harris, this evil was aptly pointed out
by the U.S. Supreme Court in these words:
"[T]he task of analyzing a proposed statute, pinpointing its deficiencies, and requiring correction of these
deficiencies before the statute is put into effect, is rarely if ever an appropriate task for the judiciary. The
combination of the relative remoteness of the controversy, the impact on the legislative process of the relief
sought, and above all the speculative and amorphous nature of the required line-by-line analysis of detailed
statutes, x x x ordinarily results in a kind of case that is wholly unsatisfactory for deciding constitutional
questions, whichever way they might be decided."
For this reason, generally disfavored is an on-its-face invalidation of statutes, described as a
"manifestly strong medicine" to be employed "sparingly and only as a last resort." In determining the
constitutionality of a statute, therefore, its provisions that have allegedly been violated must be
examined in the light of the conduct with which the defendant has been charged. (Emphasis supplied.)
At the outset, we declare that under these terms, the opinions of the dissent which seek to bring to the fore the
purported ambiguities of a long list of provisions in Republic Act No. 8189 can be deemed as a facial
challenge. An appropriate "as applied" challenge in the instant Petition should be limited only to Section 45 (j)
in relation to Sections 10 (g) and (j) of Republic Act No. 8189—the provisions upon which petitioners are
charged. An expanded examination of the law covering provisions which are alien to petitioners’ case would be
antagonistic to the rudiment that for judicial review to be exercised, there must be an existing case or
controversy that is appropriate or ripe for determination, and not conjectural or anticipatory.
We further quote the relevant ruling in David v. Arroyo on the proscription anent a facial challenge:38
Moreover, the overbreadth doctrine is not intended for testing the validity of a law that "reflects legitimate state
interest in maintaining comprehensive control over harmful, constitutionally unprotected conduct." Undoubtedly,
lawless violence, insurrection and rebellion are considered "harmful" and "constitutionally unprotected
conduct." In Broadrick v. Oklahoma, it was held:
It remains a matter of no little difficulty to determine when a law may properly be held void on its face and when
such summary action is inappropriate. But the plain import of our cases is, at the very least, that facial
overbreadth adjudication is an exception to our traditional rules of practice and that its function, a
limited one at the outset, attenuates as the otherwise unprotected behavior that it forbids the State to
sanction moves from pure speech toward conduct and that conduct even if expressive falls within the
scope of otherwise valid criminal laws that reflect legitimate state interests in maintaining
comprehensive controls over harmful, constitutionally unprotected conduct.
Thus, claims of facial overbreadth are entertained in cases involving statutes which, by their terms, seek to
regulate only "spoken words" and again, that "overbreadth claims, if entertained at all, have been
curtailed when invoked against ordinary criminal laws that are sought to be applied to protected
conduct." Here, the incontrovertible fact remains that PP 1017 pertains to a spectrum of conduct, not free
speech, which is manifestly subject to state regulation.
Second, facial invalidation of laws is considered as "manifestly strong medicine," to be used "sparingly and
only as a last resort," and is "generally disfavored;" The reason for this is obvious. Embedded in the
traditional rules governing constitutional adjudication is the principle that a person to whom a law may be
applied will not be heard to challenge a law on the ground that it may conceivably be applied unconstitutionally
to others, i.e., in other situations not before the Court. A writer and scholar in Constitutional Law explains
further:
The most distinctive feature of the overbreadth technique is that it marks an exception to some of the
usual rules of constitutional litigation. Ordinarily, a particular litigant claims that a statute is
unconstitutional as applied to him or her; if the litigant prevails, the courts carve away the
unconstitutional aspects of the law by invalidating its improper applications on a case to case basis.
Moreover, challengers to a law are not permitted to raise the rights of third parties and can only assert
their own interests. In overbreadth analysis, those rules give way; challenges are permitted to raise the
rights of third parties; and the court invalidates the entire statute "on its face," not merely "as applied for" so
that the overbroad law becomes unenforceable until a properly authorized court construes it more narrowly.
The factor that motivates courts to depart from the normal adjudicatory rules is the concern with the "chilling;"
deterrent effect of the overbroad statute on third parties not courageous enough to bring suit. The Court
assumes that an overbroad laws "very existence may cause others not before the court to refrain from
constitutionally protected speech or expression." An overbreadth ruling is designed to remove that deterrent
effect on the speech of those third parties.
In other words, a facial challenge using the overbreadth doctrine will require the Court to examine PP 1017 and
pinpoint its flaws and defects, not on the basis of its actual operation to petitioners, but on the assumption or
prediction that its very existence may cause others not before the Court to refrain from constitutionally
protected speech or expression.
Xxx xxx xxx
And third, a facial challenge on the ground of overbreadth is the most difficult challenge to mount successfully,
since the challenger must establish that there can be no instance when the assailed law may be valid.
Here, petitioners did not even attempt to show whether this situation exists.
Petitioners likewise seek a facial review of PP 1017 on the ground of vagueness. This, too, is unwarranted.
Related to the "overbreadth" doctrine is the "void for vagueness doctrine" which holds that "a law is facially
invalid if men of common intelligence must necessarily guess at its meaning and differ as to its
application." It is subject to the same principles governing overbreadth doctrine. For one, it is also an
analytical tool for testing "on their faces" statutes in free speech cases. And like overbreadth, it is said that a
litigant may challenge a statute on its face only if it is vague in all its possible applications.
Be that as it may, the test in determining whether a criminal statute is void for uncertainty is whether the
language conveys a sufficiently definite warning as to the proscribed conduct when measured by common
understanding and practice.39 This Court has similarly stressed that the vagueness doctrine merely requires a
reasonable degree of certainty for the statute to be upheld - not absolute precision or mathematical exactitude.
40

As structured, Section 4541 of Republic Act No. 8189 makes a recital of election offenses under the same Act.
Section 45(j) is, without doubt, crystal in its specification that a violation of any of the provisions of Republic Act
No. 8189 is an election offense. The language of Section 45(j) is precise. The challenged provision renders
itself to no other interpretation. A reading of the challenged provision involves no guesswork. We do not see
herein an uncertainty that makes the same vague.
Notably, herein petitioners do not cite a word in the challenged provision, the import or meaning of which they
do not understand. This is in stark contrast to the case of Estrada v. Sandiganbayan42 where therein petitioner
sought for statutory definition of particular words in the challenged statute. Even then, the Court in Estrada
rejected the argument.
This Court reasoned:
The rationalization seems to us to be pure sophistry. A statute is not rendered uncertain and void merely
because general terms are used therein, or because of the employment of terms without defining them;
much less do we have to define every word we use. Besides, there is no positive constitutional or
statutory command requiring the legislature to define each and every word in an enactment. Congress
is not restricted in the form of expression of its will, and its inability to so define the words employed in a statute
will not necessarily result in the vagueness or ambiguity of the law so long as the legislative will is clear, or at
least, can be gathered from the whole act, which is distinctly expressed in the Plunder Law."
Moreover, it is a well-settled principle of legal hermeneutics that words of a statute will be interpreted
in their natural, plain and ordinary acceptation and signification, unless it is evident that the legislature
intended a technical or special legal meaning to those words. The intention of the lawmakers who are,
ordinarily, untrained philologists and lexicographers to use statutory phraseology in such a manner is always
presumed.
Perforce, this Court has underlined that an act will not be held invalid merely because it might have been more
explicit in its wordings or detailed in its provisions, especially where, because of the nature of the act, it would
be impossible to provide all the details in advance as in all other statutes.43
The evident intent of the legislature in including in the catena of election offenses the violation of any of the
provisions of Republic Act No. 8189, is to subsume as punishable, not only the commission of proscribed acts,
but also the omission of acts enjoined to be observed. On this score, the declared policy of Republic Act No.
8189 is illuminating. The law articulates the policy of the State to systematize the present method of
registration in order to establish a clean, complete, permanent and updated list of voters. A reading of Section
45 (j) conjointly with the provisions upon which petitioners are charged, i.e., Sections 10 (g) and (j) would
reveal that the matters that are required to be set forth under the aforesaid sections are crucial to the
achievement of a clean, complete, permanent and updated list of voters. The factual information required by
the law is sought not for mere embellishment.
There is a definitive governmental purpose when the law requires that such facts should be set forth in the
application. The periods of residence in the Philippines and in the place of registration delve into the matter of
residency, a requisite which a voter must satisfy to be deemed a qualified voter and registered in the
permanent list of voters in a precinct of the city or municipality wherein he resides. Of even rationality exists in
the case of the requirement in Section 10 (j), mandating that the applicant should state that he/she is not a
registered voter of any precinct. Multiple voting by so-called flying voters are glaring anomalies which this
country strives to defeat. The requirement that such facts as required by Section 10 (g) and Section 10 (j) be
stated in the voter’s application form for registration is directly relevant to the right of suffrage, which the State
has the right to regulate.
It is the opportune time to allude to the case of People v. Gatchalian44 where the therein assailed law contains
a similar provision as herein assailed before us. Republic Act No. 602 also penalizes any person who willfully
violates any of the provisions of the Act. The Court dismissed the challenged, and declared the provision
constitutional. The Court in Gatchalian read the challenged provision, "any of the provisions of this [A]ct"
conjointly with Section 3 thereof which was the pertinent portion of the law upon which therein accused was
prosecuted. Gatchalian considered the terms as all-embracing; hence, the same must include what is enjoined
in Section 3 thereof which embodies the very fundamental purpose for which the law has been adopted. This
Court ruled that the law by legislative fiat intends to punish not only those expressly declared unlawful but even
those not so declared but are clearly enjoined to be observed to carry out the fundamental purpose of the law.
45 Gatchalian remains good law, and stands unchallenged.

It also does not escape the mind of this Court that the phraseology in Section 45(j) is employed by Congress in
a number of our laws.46 These provisions have not been declared unconstitutional.
Moreover, every statute has in its favor the presumption of validity.47 To justify its nullification, there must be a
clear and unequivocal breach of the Constitution, and not one that is doubtful, speculative or argumentative.48
We hold that petitioners failed to overcome the heavy presumption in favor of the law. Its constitutionality must
be upheld in the absence of substantial grounds for overthrowing the same.
A salient point. Courts will refrain from touching upon the issue of constitutionality unless it is truly unavoidable
and is the very lis mota. In the case at bar, the lis mota is the alleged grave abuse of discretion of the
COMELEC in finding probable cause for the filing of criminal charges against petitioners.
Third. Petitioners maintain that the COMELEC En Banc, premised its finding on a misapprehension of facts,
and committed grave abuse of discretion in directing the filing of Informations against them with the RTC.
We are once again unimpressed.
The constitutional grant of prosecutorial power in the COMELEC finds statutory expression under Section
26549 of Batas Pambansa Blg. 881, otherwise known as the Omnibus Election Code.50 The task of the
COMELEC whenever any election offense charge is filed before it is to conduct the preliminary investigation of
the case, and make a determination of probable cause. Under Section 8(b), Rule 34 of the COMELEC Rules of
Procedure, the investigating officer makes a determination of whether there is a reasonable ground to believe
that a crime has been committed.51 In Baytan v. COMELEC,52 this Court, sufficiently elucidated on the matter
of probable cause in the prosecution of election offenses, viz:
It is also well-settled that the finding of probable cause in the prosecution of election offenses rests in the
COMELEC's sound discretion. The COMELEC exercises the constitutional authority to investigate and, where
appropriate, prosecute cases for violation of election laws, including acts or omissions constituting election
frauds, offense and malpractices. Generally, the Court will not interfere with such finding of the COMELEC
absent a clear showing of grave abuse of discretion. This principle emanates from the COMELEC's exclusive
power to conduct preliminary investigation of all election offenses punishable under the election laws and to
prosecute the same, except as may otherwise be provided by law.53
It is succinct that courts will not substitute the finding of probable cause by the COMELEC in the
absence of grave abuse of discretion. The abuse of discretion must be so patent and gross as to
amount to an evasion of a positive duty or a virtual refusal to perform a duty enjoined by law, or to act
at all in contemplation of law as where the power is exercised in an arbitrary and despotic manner by
reason of passion or hostility.54
According to the COMELEC En Banc, the investigating officer, in the case at bar, held that there was sufficient
cause for the filing of criminal charges against petitioners, and found no reason to depart therefrom. Without
question, on May 9 and 11 of 2001, petitioners applied for registration as new voters with the Office of the
Election Officer of Burauen, Leyte, notwithstanding the existence of petitioners’ registration records as
registered voters of Precinct No. 4419-A of Barangay Bagong Lipunan ng Crame, District IV, Quezon City. The
directive by the COMELEC which affirmed the Resolution55 of 28 November 2000 of Investigating Officer Atty.
Tangaro-Casingal does not appear to be wanting in factual basis, such that a reasonably prudent man would
conclude that there exists probable cause to hold petitioners for trial. Thus, in the aforesaid Resolution, the
Investigating Officer, found:
A violation therefore of Section 10 of Republic Act No. 8189 is an election offense.
In the instant case, when respondents Carlos Romualdez and Erlinda Romualdez filed their respective
applications for registration as new voters with the Office of the Election Officer of Burauen, Leyte on May 9
and 11, 2001, respectively, they stated under oath that they are not registered voters in other precinct (VRR
Nos. 42454095 and 07902941). However, contrary to their statements, records show they are still registered
voters of Precinct No. 4419-A, barangay Bagong Lipunan ng Crame, District IV, Quezon City, as per VRR Nos.
26195825 and 26195823. In other words, respondents’ registration records in Quezon City is (sic) still in
existence.
While it may be true that respondents had written the City Election Officer of District IV, Quezon City for
cancellation of their voter’s registration record as voter’s (sic) therein, they cannot presume that the same will
be favorably acted upon. Besides, RA 8189 provides for the procedure in cases of transfer of residence to
another city/municipality which must be complied with, to wit:
"Section 12. Change of Residence to Another City or Municipality. – Any registered voter who has transferred
residence to another city or municipality may apply with the Election Officer of his new residence for the
transfer of his registration records.
The application for transfer of registration shall be subject to the requirements of notice and hearing and the
approval of the Election Registration Board, in accordance with this Act. Upon approval, of the application for
transfer, and after notice of such approval to the Election Officer of their former residence of the voter, said
Election Officer shall transmit by registered mail the voter’s registration record to the Election Officer of the
voter’s new residence."
They cannot claim ignorance of the abovestated provision on the procedure for transfer of registration records
by reason of transferred new residence to another municipality. Based on the affidavit executed by one
Eufemia S. Cotoner, she alleged that the refusal of the Assistant Election Officer Ms. Estrella Perez to accept
the letter of respondents was due to improper procedure because respondents should have filed the required
request for transfer with the Election Officer of Burauen, Leyte. Despite this knowledge, however, they
proceeded to register as new voters of Burauen, Leyte, notwithstanding the existence of their previous
registrations in Quezon City.
In their subsequent affidavit of Transfer of Voters Registration under Section 12 of Republic Act 8189,
respondents admitted that they erroneously filed an application as a new voter (sic) with the office of the
Election Officer of Burauen, Leyte, by reason of an honest mistake, which they now desire to correct.
(underscoring ours).
Respondents lose sight of the fact that a statutory offense, such as violation of election law, is mala prohibita.
Proof of criminal intent is not necessary. Good faith, ignorance or lack of malice is beside the point.
Commission of the act is sufficient. It is the act itself that is punished.
xxxx
In view of the foregoing, the Law Department respectfully submits that there is probable cause to hold
respondents Carlos Romualdez and Erlinda Romualdez for trial in violation of Section 10(g) and (j) in relation
to Section 45(j) of Republic Act No. 8189. There is no doubt that they applied for registration as new voters of
Burauen, Leyte consciously, freely and voluntarily.56
We take occasion to reiterate that the Constitution grants to the COMELEC the power to prosecute cases or
violations of election laws. Article IX (C), Section 2 (6) of the 1987 Constitution, provides:
(6) File, upon a verified complaint, or on its own initiative, petitions in court for inclusion or exclusion of voters;
investigate and where appropriate, prosecute cases or violations of election laws, including acts or omissions
constituting election frauds, offenses, and malpractices.
This power to prosecute necessarily involves the power to determine who shall be prosecuted, and the
corollary right to decide whom not to prosecute.57 Evidently, must this power to prosecute also include the right
to determine under which laws prosecution will be pursued. The courts cannot dictate the prosecution nor
usurp its discretionary powers. As a rule, courts cannot interfere with the prosecutor’s discretion and control of
the criminal prosecution.58 Its rationale cannot be doubted. For the business of a court of justice is to be an
impartial tribunal, and not to get involved with the success or failure of the prosecution to prosecute.59 Every
now and then, the prosecution may err in the selection of its strategies, but such errors are not for neutral
courts to rectify, any more than courts should correct the blunders of the defense.60
Fourth. In People v. Delgado,61 this Court said that when the COMELEC, through its duly authorized law
officer, conducts the preliminary investigation of an election offense and upon a prima facie finding of a
probable cause, files the Information in the proper court, said court thereby acquires jurisdiction over the case.
Consequently, all the subsequent disposition of said case must be subject to the approval of the court. The
records show that Informations charging petitioners with violation of Section 10(g) and (j), in relation to Section
45(j) of Republic Act No. 8189 had been filed with the RTC. The case must, thus, be allowed to take its due
course.
It may be recalled that petitioners prayed for the issuance of a Temporary Restraining Order or Writ of
Preliminary Injunction before this Court to restrain the COMELEC from executing its Resolutions of 11 June
2004 and 27 January 2005. In a Resolution dated 20 June 2006, this Court En Banc denied for lack of merit
petitioners’ Motion Reiterating Prayer for Issuance of Writ of Preliminary Injunction and to Cite for Indirect
Contempt. Logically, the normal course of trial is expected to have continued in the proceedings a quo.
WHEREFORE, the Petition is DENIED. The assailed Resolutions, dated 11 June 2004 and 27 January 2005 of
the COMELEC En Banc are AFFIRMED. Costs against petitioners.
SO ORDERED.

MINITA V. CHICO-NAZARIO
Associate Justice

REYNATO S. PUNO
Chief Justice
Republic of the Philippines
SUPREME COURT
Manila
EN BANC
G.R. NO. 167011 April 30, 2008
SPS. CARLOS S. ROMUALDEZ AND ERLINDA R. ROMUALDEZ, petitioners, v. COMMISSION ON
ELECTIONS AND DENNIS GARAY, respondents.
Promulgated:
April 30, 2008
x---------------------------------------------------------------------------------x
DISSENTING OPINION
TINGA, J.:
This case presented itself with an alluring promise ─ the rare opportunity to declare a penal provision
unconstitutional and void for vagueness, in the process obliterating the impression, spawned by recent
pronouncements of the Court based on an erroneous reading of applicable American jurisprudence, that such
a denouement would not unfold in this jurisdiction. Quite lamentably, the majority prevented the promise from
blossoming to fruition, perpetuating instead a grievous doctrinal error which is already the subject of strenuous
criticism within the legal academe.1
A vague criminal statute at its core violates due process, as it deprives fair notice and standards to all – the
citizens, the law enforcement officers, prosecutors and judges. The petition in this case has allowed the Court
to engage in as thorough inquiry as there ever has been on the constitutional right to due process, to infuse
vitality and sophistication in the litigation of such primordial right. Yet, in the end, instead of reinforcing a
perspective more attuned to the fullest measure of the people’s democratic rights, the Court has chosen not to
rise to the challenge.
The petition should have been granted. The assailed Resolution of the Commission on Elections (COMELEC)
directs the filing of criminal informations against petitioners Carlos and Erlinda Romualdez for violation of
Section 10 (g) and (j) of Republic Act No. 8189 (Rep. Act 8189), also known as the Voter’s Registration Act, in
relation to Section 45(j) of the same law. It is Section 45(j) which criminalizes the violation of Section 10,
as well as the violation of any and all other provisions of Rep. Act 8189, as an election offense. Yet in
the final analysis, Section 45(j) is unconstitutional, violative as it is of the due process clause, and thus
should be voided.
I.
The case stemmed from a complaint2 dated 12 July 2000 filed with the Commission on Elections (COMELEC)
Law Department by private respondents Dennis Garay and Angelino Apostol3 against petitioners, spouses
Carlos and Erlinda Romualdez. The complaint alleged that petitioners violated Sections 261(y)(2) and 261(y)
(5) of the Omnibus Election Code, and Section 12(3) of Republic Act No. 8189 (Rep. Act 8189), also known as
the Voter’s Registration Act, such violations arising from the acts initiated by petitioners in registering as voters
in Burauen, Leyte.
Petitioners had applied for registration as new voters with the Office of the Election Officer in Burauen on 9 and
11 May 2000, respectively. In their respective applications, petitioners stated that they were residents of 935
San Jose St., in Burauen. They left blank the space in the application form requiring them to state the years
and months of their "period of residence" in the aforementioned municipality.4 The complaint alleged that in
truth petitioners were actually residents of 113 Mariposa Loop, Mariposa St., Bagong Lipunan ng Crame,
Quezon City, as well as registered voters in Precinct No. 4419-A of Barangay Bagong Lipunan ng Crame,
District IV, in Quezon City. To support this factual allegation, were various certifications issued by barangay and
election officers of Quezon City,5 as well as the Quezon City Voter Registration Records of the petitioners were
attached to the complaint.6
The complaint further stated that oppositions had been filed against petitioners’ application for registration in
Burauen. In response thereto, petitioners filed with the Office of the Election Officer in Burauen various
documents evincing not only their intent to transfer their registration as voters from Quezon City to Burauen,
which was their new place of residence, but the actuality that they had began to formalize such transfer
pursuant to Section 12 of Rep. Act No. 8189. Particularly, said documents include letters from petitioners to the
election officer of Burauen manifesting their intent to transfer their registrations, as well as their respective
Affidavits of Transfer of Voter’s Registration under Section 12, Rep. Act 8189. Petitioners also explained that by
reason of honest mistake, they had erroneously filed applications as new voters in Burauen, instead of as
transferee voters.
The complaint likewise point out the particular provisions of law for which petitioners could be held
accountable. Section 261(y)(2) and (y)(5) of the Omnibus Election Code respectively penalizes knowingly
making any false or untruthful statements relative to any data or information required in the application for
registration, and the re-registration anew by a previously registered voter without the filing of an application for
cancellation of his previous registration. On the other hand, the failure to apply for transfer of registration
records due to change of residence to another city or municipality was alleged to be in violation of Section 12
of Rep. Act No. 8189.
The matter was referred to the Commission on Elections and docketed as E.O. Case No. 2000-36. Petitioners
filed a Joint Counter-Affidavit with Motion to Dismiss. They alleged that they had been intending to reside in
Burauen since 1989, and they actually took up residence therein on 9 May 2000. They claimed having left
unanswered the blank space for "period of residence" in their application for registration because they were
unsure what period of residence was being required.7 They also averred that as early as 18 April 2000, they
had already written the election officer in Quezon City requesting the cancellation of their registration as voters
in Barangay Bagong Lipunan ng Crame, but the Assistant Quezon City Election Officer had refused to
acknowledge receipt of the same on the ground that the proper procedure was to file a request for transfer of
voter’s registration records with the election officer of Burauen. Petitioners noted that they did file an
Application for Transfer of Registration Records in Burauen, and that the same was approved. Finally, they
claimed that the filing of the case was politically motivated as petitioner Carlos Romualdez was a candidate for
Congress in the second district of Leyte in the 2001 elections.
On 28 November 2003, the designated Investigating Officer assigned to hear the case, Atty. Maria Norina
Tangaro-Casingal, issued a resolution recommending the prosecution of petitioners for the commission of an
election offense, i.e., violation of Section 10(g) and (j) in relation to Section 45(j) of Rep. Act No. 8189. This
recommendation was adopted by the COMELEC en banc in a Resolution8 dated 3 February 2004.
Section 10 of Rep. Act No. 8189 states in part:
Sec. 10. Registration of Voters.— A qualified voter shall be registered in the permanent list of voters in a
precinct of the city or municipality wherein he resides to be able to vote in any election. To register as a voter,
he shall personally accomplish an application form for registration as prescribed by the Commission in three
(3) copies before the Election Officer on any date during office hours after having acquired the qualifications of
a voter.
The application shall contain the following data:
(a) Name, surname, middle name, and/or maternal surname;
(b) Sex;
(c) Date, and place of birth;
(d) Citizenship;
(e) Civil status, if married, name of spouse;
(f) Profession, occupation or work;
(g) Periods of residence in the Philippines and in the place of registration;
(h) Exact address with the name of the street and house number for location in the precinct maps maintained
by the local office of the Commission, or in case there is none, a brief description of his residence, sitio, and
barangay;
(i) A statement that the applicant possesses all the qualifications of a voter;
(j) A statement that the applicant is not a registered voter of any precinct; and
(k) Such information or data as may be required by the Commission. xxx
The COMELEC observed that a violation of Section 10 of Rep. Act No. 8189 is an election offense, pursuant to
Section 45(j) of the same law, which reads:
Sec. 45. Election Offenses. - The following shall be considered election offenses under this Act:
xxxx
(j) Violation of the provisions of this Act.
The COMELEC found that petitioners violated Section 10 of Rep. Act No. 8189 in two ways. First, petitioners
had stated under oath that they were not registered voters in any other precinct, when in fact, the records
showed that they still were registered voters of Precinct No. 4419-A in Barangay Bagong Lipunan ng Crame,
District IV, Quezon City, at the time they executed their application. The COMELEC pointed out that Section 12
of the same law provided for the procedure to be observed in cases of transfer of residence to another city/
municipality, which involved an application for transfer of registration with the Election Officer of the new place
of residence. Even though petitioners subsequently filed an application for transfer pursuant to Section 12,
manifesting therein that they had erroneously filed an application as a new voter by reason of honest mistake,
the COMELEC pointed out that a statutory offense such as the violation of election law is "mala prohibita" and
that good faith, ignorance or lack of malice was "beside the point" in such cases.
Second, the COMELEC also stated that petitioners’ failure to fill up the blank portion of their application on
"period of residence" likewise constituted a violation of Section 10(g), which specifies that the applicant state
the periods of residence in the Philippines and in the places of registration.
A motion for reconsideration filed by petitioners was denied by the COMELEC through a Resolution dated 27
January 2005.9 As a result, the present petition was filed. While the petition was pending with this Court, two
separate Informations dated 12 January 2006 were filed against each of the petitioners by the COMELEC with
the Regional Trial Court of Burauen, and corresponding Orders of Arrest were issued by the trial court judge.
Petitioners allege before us that the COMELEC Resolution violates their constitutional right to due process, as
well as their constitutional rights under Section 14(1) and (2), Article III of the Constitution. In that regard, they
point out that while the complaint alleged violations of Sections 261(y)(2) and (5) of the Omnibus Election Code
and Section 12 of Rep. Act 8189, they were charged instead with violation of different provisions of law
altogether. Petitioners likewise argue that Section 45(j) of Rep. Act 8189 is "vague", as "it does not specifically
refer to a definite provision of law the violation of which would constitute an election offense." The provision is
thus "not the ‘fair notice’ required by the Constitution for provisions of this Act."
Section 45(j) is vague. It does not provide "fair notice" to the citizenry and the standards for enforcement and
adjudication. In precise legal terms, I submit that Section 45(j) violates the due process clause of the
Constitution, and should accordingly be nullified.
II.
No person shall be deprived of life, liberty or property without due process of law. The due process clause
makes legally operative our democratic rights, as it establishes freedom and free will as the normative human
conditions which the State is bound to respect. Any legislated restrictions imposed by the State on life, liberty
or property must be in accordance with due process of law. The scope of "due process," as we currently
understand it, is admittedly ambitious, but in its elemental form, it encompasses aboriginal values ascribed to
justice such as equity, prudence, humaneness and fairness.
Section 45(j) is vague. It does not provides "fair notice" to the citizentry, as well as the standards for
enforcement and adjudication. Thus, the section violates the due process clause and thus deserves to be
struck down.
The potency of the due process clause has depended on judicial refinement, to allow for the crystallization of
its abstract ideals into a set of standards, from which a deliberate determination can be had whether the
provision bears operative effect following a given set of facts. As a result, various subsets to due process have
emerged, including the distinction between procedural due process and substantive due process. Stated very
generally, substantive due process guarantees against the arbitrary exercise of state power, while procedural
due process is a guarantee of procedural fairness.10 Substantive and procedural due process are equally
sacrosanct in the constitutional order, and a law that is infirm in either regard is wholly infirm.
Among the components of due process, particularly concerning penal statutes, is the fair notice requirement.
The Court, through Justice Sarmiento, acknowledged in People v. Nazario11 that a statute violates due
process, and thus repugnant to the Constitution, if it fails "to accord persons, especially the parties targeted by
it, fair notice of the conduct to avoid."12 Such flaw is one characteristic of a vague statute, the other being that
"it leaves law enforcers unbridled discretion in carrying out its provisions and becomes an arbitrary flexing of
the Government muscle."13 Both attributes earmark a statute as "vague", the generally accepted definition of a
vague statute being one that lacks comprehensible standards that people "of common intelligence must
necessarily guess at its meaning and differ as to its application."14
Even though the "fair notice" rule is integral to due process itself, it finds realization in still another provision of
our Bill of Rights. Section 14(2), Article III15 assures that an accused is "to be informed of the nature and
cause of the accusation against him." Both Justice Cruz and Fr. Bernas acknowledge that this constitutional
right extends not only to the criminal information against the accused, but also to the language of the statute
under which prosecution is pursued.16 Yet our own jurisprudence has yet to expressly link the fair notice
requirement with Section 14(2), Article III,17 though this need not be a contestable point since the due process
clause under Section 1, Article III already embodies the fair notice requirement.
As earlier stated, a penal statute that violates the fair notice requirement is marked by vagueness because it
leaves its subjects to necessarily guess at its meaning and differ as to its application. What has emerged as
the most contentious issue in the deliberations over this petition is whether such vagueness may lead to the
nullification of a penal law. Our 2004 ruling in Romualdez v. Sandiganbayan18 states: "It is best to stress at
the outset that the overbreadth and the vagueness doctrines have special application only to free-
speech cases. They are not appropriate for testing the validity of penal statutes."19 The time has come to
reconsider that statement. Rooted in unyielding formalism and deprived of guidance from basic constitutional
tenets, that dicta disenchants the rights of free people, diminishing as it does, the basic right to due process.
III.
A deeper analysis of the vagueness doctrine is in order.
Employing the terminology preferred by Collings, the vagueness doctrine is a specie of "unconstitutional
uncertainty," which may involve "procedural due process uncertainty cases" and "substantive due process
uncertainty cases."20 "Procedural due process uncertainty" involves cases where the statutory language was
so obscure that it failed to give adequate warning to those subject to its prohibitions as well as to provide
proper standards for
adjudication.21 Such a definition encompasses the vagueness doctrine.22 This perspective rightly integrates the
vagueness doctrine with the due process clause, a necessary interrelation since there is no constitutional
provision that explicitly bars statutes that are "void-for-vagueness."
Void-for-vagueness derives from the basic tenet of criminal law that conduct may not be treated as criminal
unless it has been so defined by an authority having the institutional competence to do so before it has taken
place. It requires that a legislative crime definition be meaningfully precise.23
The inquiry into whether a criminal statute is "meaningfully precise" requires the affirmative satisfaction of two
criteria. First, does the statute fairly give notice to those it seeks to bind of its strictures? Second, is the statute
precise enough that it does not invite arbitrary and discriminatory enforcement by law enforcement authorities?
Unless both criteria are satisfied, the statute is void for vagueness.
There are three concerns animating the vagueness doctrine. First, courts are rightly concerned that citizens be
fairly warned of what behavior is being outlawed; second, courts are concerned because vague laws provide
opportunities for arbitrary enforcement and put the enforcement decisions in the hands of police officers and
prosecutors instead of legislatures; finally, where vague statutes regulate behavior that is even close to
constitutionally protected, courts fear a chilling effect will impinge on constitutional rights.24 These three
interests have been deemed by the U.S. Supreme Court as important enough to justify total invalidation of a
statute,25 such invalidation warranted unless there is some intervening act that has eliminated the threat to
those interests.26
In its essence, the vagueness doctrine is a critical implement to the fundamental role of the courts to rule justly
and fairly.27 Uncertainty in statutes enables persons to be penalized for acts which are not precisely defined in
law as criminal, or for acts which are constitutionally protected but cast within an overbroad definition of a
crime.
Our special focus now lies with the "void-for-vagueness" or "procedural due process uncertainty" rule. Two
coordinate functions are served by the doctrine: guidance to the individual in planning his future conduct, and
guidance to those adjudicating his rights and duties.28 It is clear that some substantial degree of definiteness
should be required of penal statutes, for if a person is to be charged with knowledge of all his rights and duties
under a statute regardless of whether he has read or understood it, fundamental fairness requires that he be
given at least the opportunity to discover its existence, its applicability, and its meaning. While the due process
requirements of publication are designed to fill the first of those needs, the due process requirements of
definiteness are designed to fill the latter two.29
The requirement of certainty arose from a fundamental common-law concept, a matter of fairness, and an
element of due process of law.30 No one will deny that a criminal statute should be definite enough to give
notice of required conduct to those who would avoid its penalties, and to guide the judge in its application and
the attorney defending those charged with its violation.31 The rules must be definite enough to enable the judge
to make rulings of law which are so closely referable to the statute as to assure consistency of application.32 In
addition, the statute must serve the individual as a guide to his future conduct, and it is said to be too indefinite
if "men of common intelligence must necessarily guess at its meaning and differ as to its application."33 If the
statute does not provide adequate standards for adjudication, by which guilt or innocence may be determined,
it will be struck down.34
The danger of a statute that suffers from the vagueness defect cannot be underestimated. Taken to the
extreme, the absence of any clear and definite standards for conviction would leave the matter of freedom of
the accused solely upon the discretion of the judge, to
whom the language of the statute would offer no guide to adjudication. At worse, it could represent "the
coercive force of society run loose at the whim of the [prosecutor] without adequate restraint at the level of the
trial court (for want of standards by which to restrain), enforced against indigent and unrepresented
defendants."35 Indeed, the chances for acquittal as against a vague statute are significantly bettered depending
on the skill of the defense counsel, and the poorer an accused is, the slimmer the chances that a skilled
counsel would be within means. Void-for-vagueness statutes strike special impunity at the impoverished. They
smack of unmitigated heedlessness of the lot of the likely victims of their built-in uncertainty, especially the
underprivileged.
Romualdez,36 cited by the ponencia, is unfortunately insensate to these constitutional concerns. That decision
referenced Estrada v. Desierto37 as basis for its response to the vagueness challenge. The ponencia in
Estrada did adopt and incorporate the views stated by Justice Mendoza in his Separate Opinion, particularly,
that "[t]he overbreadth and vagueness doctrines then have special application only to free speech cases…
[t]hey are inapt for testing the validity of penal statutes... the doctrines of strict scrutiny, overbreadth, and
vagueness are analytical tools developed for testing ‘on their faces’ statutes in free speech cases or, as they
are called in American law, First Amendment cases. [t]hey cannot be made to do service when what is involved
is a criminal statute."38
However, in his Separate Opinion to the Resolution (on the Motion for Reconsideration) dated 29 January
2002, Justice Mendoza acknowledged:
[L]et it be clearly stated that, when we said that ‘the doctrines of strict scrutiny, overbreadth and vagueness are
analytical tools for testing ‘on their faces’ statutes in free speech cases or, as they are called in American law,
First Amendment cases [and therefore] cannot be made to do service when what is involved is a criminal
statute,’ we did not mean to suggest that the doctrines do not apply to criminal statutes at all. They do
although they do not justify a facial challenge, but only an as-applied challenge, to those statutes…
Neither did we mean to suggest that the doctrines justify facial challenges only in free speech or First
Amendment cases. To be sure, they also justify facial challenges in cases under the Due Process and
Equal Protection Clauses of the Constitution with respect to so-called ‘fundamental rights’..."39
In light of Justice Mendoza’s subsequent clarification, it is a disputable matter whether Estrada established a
doctrine that "void-for-vagueness or overbreadth challenges do not apply to penal statutes," the reference
thereto in Romualdez notwithstanding. However, there is no doubt that Romualdez itself, which did not admit to
a similar qualification or clarification, set forth a "doctrine" that "the overbreadth and the vagueness doctrines
have special application only to free-speech cases [and] are not appropriate for testing the validity of penal
statutes." As a result, the Office of the Solicitor General invokes Romualdez in its present Memorandum before
the Court, and the petitioners in at least one other case now pending before this Court urges the reexamination
of that doctrine.
The ponente has also cited in tandem with the Romualdez precedent this Separate Opinion of Justice
Mendoza for the purpose of denominating the key issue as whether the vagueness doctrine can be utilized as
an analytical tool to challenge the statute "on-its-face" or "as applied." Unfortunately, we can only engage that
question if we acknowledge in the first place that the doctrine of vagueness can be applied to criminal statutes,
because if not (as pronounced in Romualdez), there is no point in distinguishing between on-its-face and as-
applied challenges. Moreover, this subsequent Separate Opinion, especially as it may distinguish from Justice
Mendoza’s earlier and more sweeping Separate Opinion, cannot be asserted as reflective of a doctrine
announced by this Court. What works towards such effect is Romualdez, which again does not offer such
clarificatory distinction, and which certainly does not concede, as Justice Mendoza eventually did, that "we did
not mean to suggest that the doctrines [of void-for-vagueness] do not apply to criminal statutes at all" and that
"neither did we mean that that doctrines do not justify facial challenges "in cases under the Due Process and
Equal Protection Clauses of the Constitution with respect to the so-called ‘fundamental rights.’"
What we have thus seen is the queer instance of obiter in a latter case, Romualdez v. Sandiganbayan, making
a doctrine of an obiter in an earlier case, Estrada v. Desierto.
Moreover, the controversial statement in Romualdez, as adopted from Estrada with respect to the vagueness
challenge being applicable only to free speech cases, is simply not reflective of the American jurisprudential
rule which birthed the vagueness doctrine in the first place.
The leading American case laying down the rules for the vagueness challenge is Connally v. General
Construction Co.,40 decided by the U.S. Supreme Court in 1926. It concerned a statute creating an eight (8)-
hour workday in Oklahoma, through a provision which read:
'That not less than the current rate of per diem wages in the locality where the work is performed shall be paid
to laborers, workmen, mechanics, prison guards, janitors in public institutions, or other persons so employed
by or on behalf of the state, ... and laborers, workmen, mechanics, or other persons employed by contractors
or subcontractors in the execution of any contract or contracts with the state, ... shall be deemed to be
employed by or on behalf of the state. ...' (388)41
The statute further penalized violations thereof with a fine. A constitutional challenge to this statute was raised
that the statutory provisions, "if enforced, will deprive plaintiff, its officers, agents and representatives, of their
liberty and property without due process of law, in violation of the Fourteenth Amendment to the Federal
Constitution; that they contain no ascertainable standard of guilt; that it cannot be determined with any degree
of certainty what sum constitutes a current wage in any locality; and that the term 'locality' itself is fatally vague
and uncertain." The U.S. Supreme Court agreed, holding:
That the terms of a penal statute creating a new offense must be sufficiently explicit to inform those
who are subject to it what conduct on their part will render them liable to its penalties is a well-
recognized requirement, consonant alike with ordinary notions of fair play and the settled rules of law;
and a statute which either forbids or requires the doing of an act in terms so vague that men of common
intelligence must necessarily guess at its meaning and differ as to its application violates the first essential of
due process of law. xxx42
The dividing line between what is lawful and unlawful cannot be left to conjecture. The citizen cannot be held to
answer charges based upon penal statutes whose mandates are so uncertain that they will reasonably admit
of different constructions. A criminal statute cannot rest upon an uncertain foundation. The crime, and the
elements constituting it, must be so clearly expressed that the ordinary person can intelligently choose, in
advance, what course it is lawful for him to pursue. Penal statutes prohibiting the doing of certain things, and
providing a punishment for their violation, should not admit of such a double meaning that the citizen may act
upon the one conception of its requirements and the courts upon another.'
We are of opinion that this provision presents a double uncertainty, fatal to its validity as a criminal statute. In
the first place, the words 'current rate of wages' do not denote a specific or definite sum, but minimum,
maximum, and intermediate amounts, indeterminately, varying from time to time and dependent upon the class
and kind of work done, the efficiency of the workmen, etc., as the bill alleges is the case in respect of the
territory surrounding the bridges under construction. The statutory phrase reasonably cannot be confined to
any of these amounts, since it imports each and all of them. The current rate of wages' is not simple, but
progressive-from so much (the minimum) to so much (the maximum), including all between; and to direct the
payment of an amount which shall not be less than one of several different amounts, without saying which, is
to leave the question of what is meant incapable of any definite answer. See People ex rel. Rodgers v. Coler,
166 N. Y. 1, 24-25, 59 N. E. 716, 52 L. R. A. 814, 82 Am. St. Rep. 605.
Nor can the question be solved by resort to the established canons of construction that enable a court to look
through awkward or clumsy expression, or language wanting in precision, to the intent of the Legislature. For
the vice of the statute here lies in the impossibility of ascertaining, by any reasonable test, that the Legislature
meant one thing rather than another, and in the futility of an attempt to apply a requirement, which assumes the
existence of a rate of wages single in amount, to a rate in fact composed of a multitude of gradations. To
construe the phrase 'current rate of wages' as meaning either the lowest rate or the highest rate, or any
intermediate rate, or, if it were possible to determine the various factors to be considered, an average of all
rates, would be as likely to defeat the purpose of the Legislature as to promote it. See State v. Partlow, 91 N.
C. 550, 553, 49 Am. Rep. 652; Commonwealth v. Bank of Pennsylvania, 3 Watts & S. (Pa.) 173, 177.
In the second place, additional obscurity is imparted to the statute by the use of the qualifying word 'locality.'
Who can say, with any degree of accuracy, what areas constitute the locality where a given piece of work is
being done? Two men, moving in any direction from the place of operations, would not be at all likely to agree
upon the point where they had passed the boundary which separated the locality of that work from the next
locality. It is said that this question is settled for us by the decision of the state Supreme Court on rehearing in
State v. Tibbetts, 205 P. 776, 779. But all the court did there was to define the word 'locality' as meaning 'place,'
'near the place,' 'vicinity,' or 'neighborhood.' Accepting this as correct, as of course we do, the result is not to
remove the obscurity, but rather to offer a choice of uncertainties. The word 'neighborhood' is quite as
susceptible of variation as the word 'locality.' Both terms are elastic and, dependent upon circumstances, may
be equally satisfied by areas measured by rods or by miles. See Schmidt v. Kansas City Distilling Co., 90 Mo.
284, 296, 1 S. W. 865, 2 S. W. 417, 59 Am. Rep. 16; Woods v. Cochrane and Smith, 38 Iowa, 484, 485; State
ex rel. Christie v. Meek, 26 Wash. 405, 407-408, 67 P. 76; Millville Imp. Co. v. Pitman, etc., Gas Co., 75 N. J.
Law, 410, 412, 67 A. 1005; Thomas v. Marshfield, 10 Pick. (Mass.) 364, 367. The case last cited held that a
grant of common to the inhabitants of a certain neighborhood was void because the term 'neighborhood' was
not sufficiently certain to identify the grantees. In other connections or under other conditions the term 'locality'
might be definite enough, but not so in a statute such as that under review imposing criminal penalties.
Certainly, the expression 'near the place' leaves much to be desired in the way of a delimitation of boundaries;
for it at once provokes the inquiry, 'How near?' And this element of uncertainty cannot here be put aside as of
no consequence, for, as the rate of wages may vary-as in the present case it is alleged it does vary- among
different employers and according to the relative efficiency of the workmen, so it may vary in different sections.
The result is that the application of the law depends, not upon a word of fixed meaning in itself, or one made
definite by statutory or judicial definition, or by the context or other legitimate aid to its construction, but upon
the probably varying impressions of juries as to whether given areas are or are not to be included within
particular localities. The constitutional guaranty of due process cannot be allowed to rest upon a support so
equivocal.43
The statute in question did not involve a proscription on free speech, but a standard of wages with a
corresponding financial penalty for violation thereof. Without any consideration to the notion that the "void-for-
vagueness" challenge should be limited to free speech cases, the U.S. High Court accepted the notion that a
vague statute could be invalidated and then proceeded to analyze whether the statute was indeed vague. The
fact that the statute was invalidated makes it clear then that the "void-for-vagueness" challenge could
be employed against a penal statute.
Within the next 73 years, the U.S. Supreme Court repeatedly invalidated penal statutes on the ground of "void-
for-vagueness,"44 in the cases of Cline v. Frink Dairy Co.,45 Lanzetta v. State of New Jersey,46 Papachristou v.
City of Jacksonville,47 Grayned v. City of Rockford48, Smith v. Goguen49 and Kolender v. Lawson.50 More
recently, in 1999, the U.S. Supreme Court reiterated the rule in City of Chicago v. Morales51 as it invalidated an
anti-loitering ordinance. The decision explained the ordinance as follows:
The ordinance creates a criminal offense punishable by a fine of up to $500, imprisonment for not more than
six months, and a requirement to perform up to 120 hours of community service. Commission of the offense
involves four predicates. First, the police officer must reasonably believe that at least one of the two or more
persons present in a "public place" is a "criminal street gang membe[r]." Second, the persons must be
"loitering," which the ordinance defines as "remain[ing] in any one place with no apparent purpose." Third, the
officer must then order "all" of the persons to disperse and remove themselves "from the area." Fourth, a
person must disobey the officer's order. If any person, whether a gang member or not, disobeys the officer's
order, that person is guilty of violating the ordinance.52
In explaining why the ordinance suffered from the "void-for-vagueness" defect, the U.S. Supreme Court,
through Senior Associate Justice John Paul Stevens, first attacked the statutory definition of "loitering:"
xxx The Illinois Supreme Court recognized that the term "loiter" may have a common and accepted meaning,
177 Ill. 2d, at 451, 687 N. E. 2d, at 61, but the definition of that term in this ordinance--"to remain in any one
place with no apparent purpose"--does not. It is difficult to imagine how any citizen of the city of Chicago
standing in a public place with a group of people would know if he or she had an "apparent purpose." If she
were talking to another person, would she have an apparent purpose? If she were frequently checking her
watch and looking expectantly down the street, would she have an apparent purpose?
Since the city cannot conceivably have meant to criminalize each instance a citizen stands in public with a
gang member, the vagueness that dooms this ordinance is not the product of uncertainty about the normal
meaning of "loitering," but rather about what loitering is covered by the ordinance and what is not. The Illinois
Supreme Court emphasized the law's failure to distinguish between innocent conduct and conduct threatening
harm. Its decision followed the precedent set by a number of state courts that have upheld ordinances that
criminalize loitering combined with some other overt act or evidence of criminal intent. However, state courts
have uniformly invalidated laws that do not join the term "loitering" with a second specific element of the crime.
53

Next, the U.S. Supreme Court explained the principle of "fair notice" that necessitated the "void-for-vagueness"
rule:
First, the purpose of the fair notice requirement is to enable the ordinary citizen to conform his or her conduct
to the law. "No one may be required at peril of life, liberty or property to speculate as to the meaning of penal
statutes." Lanzetta v. New Jersey, 306 U.S. 451, 453 (1939). Although it is true that a loiterer is not subject to
criminal sanctions unless he or she disobeys a dispersal order, the loitering is the conduct that the ordinance is
designed to prohibit. If the loitering is in fact harmless and innocent, the dispersal order itself is an unjustified
impairment of liberty. If the police are able to decide arbitrarily which members of the public they will order to
disperse, then the Chicago ordinance becomes indistinguishable from the law we held invalid in Shuttlesworth
v. Birmingham, an officer may issue an order only after prohibited conduct has already occurred, it cannot
provide the kind of advance notice that will protect the putative loiterer from being ordered to disperse. Such an
order cannot retroactively give adequate warning of the boundary between the permissible and the
impermissible applications of the law.
xxx Lack of clarity in the description of the loiterer's duty to obey a dispersal order might not render the
ordinance unconstitutionally vague if the definition of the forbidden conduct were clear, but it does buttress our
conclusion that the entire ordinance fails to give the ordinary citizen adequate notice of what is forbidden and
what is permitted. The Constitution does not permit a legislature to "set a net large enough to catch all possible
offenders, and leave it to the courts to step inside and say who could be rightfully detained, and who should be
set at large." United States v. Reese, 92 U. S. 214, 221 (1876). This ordinance is therefore vague "not in the
sense that it requires a person to conform his conduct to an imprecise but comprehensible normative standard,
but rather in the sense that no standard of conduct is specified at all." Coates v. Cincinnati, 402 U. S. 611, 614
(1971).54
In her concurring opinion, Justice Sandra Day O'Connor offered this succinct restatement of the void-for-
vagueness rule:
A penal law is void-for-vagueness if it fails to "define the criminal offense with sufficient definiteness that
ordinary people can understand what conduct is prohibited" or fails to establish guidelines to prevent "arbitrary
and discriminatory enforcement" of the law. Kolender v . Lawson , 461 U. S. 352, 357 (1983). Of these, "the
more important aspect of vagueness doctrine `is ... the requirement that a legislature establish minimal
guidelines to govern law enforcement.' " Id., at 358 (quoting Smith v. Goguen, 415 U. S. 566, 574-575 (1974)).
I agree that some degree of police discretion is necessary to allow the police "to perform their peacekeeping
responsibilities satisfactorily." See post, at 12 (dissenting opinion). A criminal law, however, must not permit
policemen, prosecutors, and juries to conduct "a standardless sweep ... to pursue their personal predilections."
Kolender v. Lawson, supra, at 358 (quoting Smith v. Goguen, supra, at 575). 55
Consider the lucid explanation of Gunther and Sullivan, which integrates the principles established by
American jurisprudence on that point:
The concept of vagueness under the [freedom of expression clause in the] First Amendment [of the U.S.
Constitution] draws on the procedural due process requirement of adequate notice, under which a law must
convey ‘sufficient definite warning as to the proscribed conduct when measured by common understanding
and practices." Jordan v. DeGeorge, 341 U.S. 223 (1951) A law will be void on its face for vagueness if
persons "of common intelligence must necessarily guess at its meaning and differ as to its application."
Connally v. General Construction Co., 269 U.S. 385 (1926). One of the purposes of this requirement is to
ensure fair notice to the defendant. But the ban on vagueness protect not only liberty, but also equality and the
separation of executive from legislative power through the prevention of selective enforcement. See Smith v.
Goguen (415 U.S. 566): "We have recognized that the more important aspect of the vagueness doctrine is not
actual notice, but the other principal element of the doctrine – the requirement that legislatures set reasonably
clear guidelines for law enforcement officials and triers of fact in order to prevent arbitrary and discriminatory
enforcement". xxx56
Prior to Romualdez, Philippine jurisprudence had recognized the susceptibility of penal statutes to the
vagueness challenge, even if they did not pertain to the free exercise of speech. Nazario, earlier cited, was one
such case. Another instance, was People v. Dela Piedra,57 decided in 2001, where the Court announced:
Due process requires that the terms of a penal statute must be sufficiently explicit to inform those who are
subject to it what conduct on their part will render them liable to its. penalties. A criminal statute that "fails to
give a person of ordinary intelligence fair notice that his contemplated conduct is forbidden by the statute," or is
so indefinite that "it encourages arbitrary and erratic arrests and convictions," is void for vagueness. The
constitutional vice in a vague or indefinite statute is the injustice to the accused in placing him on trial for an
offense, the nature of which he is given no fair warning.58
Dela Piedra is inconsistent with the subsequent Romualdez doctrine, yet it embodies the correct basic
proposition which is sensitive to the fundamentals of the due process clause. There was, and still is, no good
or logical reason for Philippine jurisprudence to adopt an opposing rule from that in American jurisprudence in
relation to the void-for-vagueness doctrine. Is the doctrine that "void-for-vagueness" cannot invalidate penal
statutes somehow more appropriate to the Filipino mindset than to the American way? I really could not see
any reason to foster the contrary rule unless it is the intent to effectively moot in the Philippines the right of a
Filipino accused to be informed of the nature of the accusation against him/her through a penal law that
defines the criminal offense with sufficient definiteness that ordinary people can understand what conduct is
prohibited or establishes guidelines to prevent "arbitrary and discriminatory enforcement" of the law.
IV.
It is clear that a criminal statute may be nullified on the ground of void-for-vagueness. What are the requisites
that must obtain before a suit predicated on such ground may be brought before the courts? Assuming that the
suit successfully demonstrates the vagueness of the statute or provision of law, what remedy can the courts
apply?
There are orthodox precepts in Philippine law that may find application in the resolution of void-for-vagueness
cases. Long established in our jurisprudence are the four requisites for judicial inquiry: an actual case or
controversy; the question of constitutionality must be raised by the proper party; the constitutional question
must be raised at the earliest possible opportunity; and the constitutional question must be necessary to the
determination of the case itself.59 These requisites would accommodate instances such as those in the present
case, where the constitutional challenge to the penal law is raised by the very persons who are charged under
the questioned statute or provision.
On the premise that the statute in question contravenes the due process clause because it is vague, our
jurisprudence likewise supplies the options for remedial measures which the Court can undertake. In essence,
under Philippine jurisprudence, the courts possess a wide berth of discretion when confronted with a penal
statute that is impermissibly vague. The general rule is that an unconstitutional act is not law; it confers no
rights, imposes no duties, affords no protection, creates no office; it is, in legal contemplation, as inoperative as
though it had never been passed.60 At the same time, there are doctrines in statutory construction that
authorize the courts to allow the survival of the challenged statute or provision of law. It is a well-settled rule
that a statute should be construed whenever possible in a manner that will avoid conflict with the Constitution.
61 Where a statute is reasonably susceptible of two constructions, one constitutional and the other

unconstitutional, that construction in favor of its constitutionality shall be adopted while the construction that
renders it invalid rejected.
Yet in the United States, even as the U.S. Supreme Court has long recognized vague penal laws as contrary to
the due process clause,62 it has also recognized special considerations when the assailed statute also
infringes on the First Amendment. The U.S. Supreme Court, in Grayned v. City of Rockford,63 expresses thus:
It is a basic principle of due process that an enactment is void for vagueness if its prohibitions are not clearly
defined. Vague laws offend several important values. First, because we assume that man is free to steer
between lawful and unlawful conduct, we insist that laws give the person of ordinary intelligence a
reasonable opportunity to know what is prohibited, so that he may act accordingly. Vague laws may trap
the innocent by not providing fair warning. Second, if arbitrary and discriminatory enforcement is to be
prevented, laws must provide explicit standards for those who apply them. A vague law impermissibly
delegates basic policy matters to policemen, judges, and juries for resolution on an ad hoc and subjective
basis, with the attendant dangers of arbitrary and discriminatory application. Third, but related, where a
vague statute "abut[s] upon sensitive areas of basic First Amendment freedoms," it "operates to inhibit
the exercise of [those] freedoms." Uncertain meanings inevitably lead citizens to "`steer far wider of the
unlawful zone' . . . than if the boundaries of the forbidden areas were clearly marked."64
One year after Grayned was decided in 1972, a divided U.S. Supreme Court handed down its decision in
Broadrick v. Oklahoma,65 a ruling that would have significant impact in the analysis of First Amendment cases.
Significantly, Broadrick was the main case cited by Justice Mendoza in his Separate Opinion in Estrada v.
Sandiganbayan in support of his assertion that "[t]he overbreadth and vagueness doctrines then have special
application only to free speech cases."66
To understand Broadrick, it should be noted that under U.S. jurisprudence, the general rule is that "an
individual has no standing to litigate the rights of third persons."67 Another traditional rule is the "as applied"
mode of judicial review which "tests the constitutionality of legislation as it is applied to particular facts on a
case-by-case basis."68 Both these traditional rules found an exception in the overbreadth doctrine, which is
animated by the principle that "a government purpose to control or prevent activities constitutionally subject to
regulation may not be achieved by means which sweep unnecessarily broadly and thereby invade the area of
protected freedoms."69 Particularly in regard to First Amendment cases, overbreadth carved exceptions to the
traditional rules of constitutional litigation. "First, it results in the invalidation of a law ‘on its face’ rather than ‘as
applied’ to a particular speaker."70 "Second, overbreadth is an exception to the usual rules on standing xxx
challengers are in effect permitted to raise the rights of third parties."71
In Broadrick, the U.S. Supreme Court found the opportunity to limit the application of the overbreadth doctrine.
But the constitutional challenge made therein was not limited to overbreadth for question of vagueness was
also raised against a state law restricting the partisan political activities of Oklahoma state employees. In
dealing with the vagueness aspect, the majority opinion concluded that the challenged provisions were not
impermissibly vague, applying the standard test set forth in cases such as Grayned.
Whatever other problems there are with 818, it is all but frivolous to suggest that the section fails to give
adequate warning of what activities it proscribes or fails to set out "explicit standards" for those who must apply
it. Grayned v. City of Rockford, supra, at 108. In the plainest language, it prohibits any state classified
employee from being "an officer or member" of a "partisan political club" or a candidate for "any paid public
office." It forbids solicitation of contributions "for any political organization, candidacy or other political purpose"
and taking part "in the management or affairs of any political party or in any political campaign." Words
inevitably contain germs of uncertainty and, as with the Hatch Act, there may be disputes over the meaning of
such terms in 818 as "partisan," or "take part in," or "affairs of" political parties. But what was said in Letter
Carriers, ante, at 578-579, is applicable here: "there are limitations in the English language with respect to
being both specific and manageably brief, and it seems to us that although the prohibitions may not satisfy
those intent on finding fault at any cost, they are set out in terms that the ordinary person exercising ordinary
common sense can sufficiently understand and comply with, without sacrifice to the public interest."72
However, in ruling on the claim of overbreadth, Broadrick did not utilize any previously established test or
standard, but instead pronounced a new standard of "substantial overbreadth", otherwise known as "strong
medicine".73 It is clear that the Court in Broadrick still recognized the distinction between vagueness and
overbreadth, and resolved those two questions separately. Nonetheless, as is manifest in Justice Mendoza’s
Separate Opinion in Estrada, the impression is that the same doctrines apply to both vagueness and
overbreadth, notwithstanding Broadrick. Why is that so?
As earlier explained, a vague penal statute is constitutionally offensive because it fails to give fair notice to
those subjected to the regulation as to what conduct is precisely proscribed. On the other hand, a statute that
suffers from overbreadth is one drawn so broadly, as it penalizes protected speech or behavior as well as such
acts within the right of the State to prohibit. Thus, a statute that prohibits "the commission of illegal acts within
state universities" is arguably vague, as it does not sufficiently define what exactly constitutes "illegal acts". On
the other hand, a statute that proscribes "the commission of acts within state universities that help promote
rebellion" is arguably overbroad. Such a statute may encompass not only those acts of rebellion within the
ambit of the State to penalize, but also legitimate political expressions or criticisms of the State which are
fundamentally guaranteed under the free expression clause.
Another material distinction. In the case of overbroad statutes, it is necessary to inquire into the potential
applications of the legislation in order to determine whether it can be unconstitutionally applied.74 In contrast,
the constitutional flaws attached to a vague statute are evident on its face, as the textual language in itself is
insufficient in defining the proscribed conduct.
Broadrick had alluded to the problems concerning legal standing with respect to overbreadth cases. Because
the area involved was the First Amendment, litigants had traditionally been "permitted to challenge a statute
not because their own right of free expression are violated, but because of a judicial prediction or assumption
that the statute's very existence may cause others not before the court to refrain from constitutionally protected
speech or expression."75 Yet such expansive standing was problematic for the majority in Broadrick.
The consequence of our departure from traditional rules of standing in the First Amendment area is that any
enforcement of a statute thus placed at issue is totally forbidden until and unless a limiting construction or
partial invalidation so narrows it as to remove the seeming threat or deterrence to constitutionally protected
expression. Application of the overbreadth doctrine in this manner is, manifestly, strong medicine.76
Thus, as a means of regulating standing in overbreadth cases, the U.S. Supreme Court announced in
Broadrick:
[F]acial overbreadth adjudication is an exception to our traditional rules of practice and that its function, a
limited one at the outset, attenuates as the otherwise unprotected behavior that it forbids the State to sanction
moves from "pure speech" toward conduct and that conduct - even if expressive - falls within the scope of
otherwise valid criminal laws that reflect legitimate state interests in maintaining comprehensive controls over
harmful, constitutionally unprotected conduct. Although such laws, if too broadly worded, may deter protected
speech to some unknown extent, there comes a point where that effect - at best a prediction - cannot, with
confidence, justify invalidating a statute on its face and so prohibiting a State from enforcing the statute against
conduct that is admittedly within its power to proscribe. xxx To put the matter another way, particularly where
conduct and not merely speech is involved, we believe that the overbreadth of a statute must not only be real,
but substantial as well, judged in relation to the statute's plainly legitimate sweep. It is our view that 818 is not
substantially overbroad and that whatever overbreadth may exist should be cured through case-by-case
analysis of the fact situations to which its sanctions, assertedly, may not be applied.
Broadrick jointly addressed the two concerns with respect to overbreadth cases – standing and the facial
invalidation of statutes. It conceded that a successful overbreadth challenge necessitated the facial invalidation
of the statute, a remedy characterized as "strong medicine". In order to limit the application of such "strong
medicine", the U.S. Supreme Court declared that "the overbreadth of a statute must not only be real, but
substantial as well, judged in relation to the statute's plainly legitimate sweep."77
Do the same concerns on the overbreadth doctrine that informed Broadrick extend as well to vagueness? It
must be recognized that the problem of overbreadth has no integral relation to procedural due process, which
is the fundamental constitutional problem brought forth by vagueness. Moreover, the overbreadth doctrine
developed amidst concerns over restrictions on First Amendment rights and can be said was formulated to
bolster the guarantee of free expression. It is not as clear that the same degree of concern over the right of
free expression was key to the development of the vagueness doctrine, which after all, primarily offended a
different constitutional value.
Since First Amendment values were at stake, the U.S. Supreme Court, prior to Broadrick, had found it
necessary to relax the rules on standing with respect to overbreadth cases, a development which the
subsequent Broadrick Court found disconcerting enough as to reverse direction. Yet contrary to the insinuation
in Justice Mendoza’s Estrada opinion, Broadrick should not bar challenges to vague penal statutes brought
forth by those sought to be penalized under the assailed law. The restrictions on standing brought forth in
Broadrick have no material relation to the legitimate concerns of a defendant who is being prosecuted under a
law that defies the fair notice requirement under the due process clause.
A brief note, at this juncture. Justice Carpio offers his own analysis of "facial challenge" and "as-applied"
challenge. His submission discusses both concepts from the perspective of standing, contending that the
present suit cannot be considered as a "facial challenge", or a challenge against the constitutionality of a
statute that is filed where the petitioner claims no actual violation of his own rights under the assailed statute,
but relies instead on the potential violation of his or other persons’ rights. Instead, according to Justice Carpio,
the present suit may be considered as an "as-applied" challenge, the traditional approach where the petitioner
raises the violation of his constitutional rights irrespective of the constitutional grounds cited.
I have no dispute with the characterization of the present suit as an "as-applied" challenge, as well as the
statement that third-party standing to assail the constitutionality of statutes is impermissible as a general rule.
Said positions can be accommodated following our traditional rules of standing in constitutional cases, even if
these rules hardly employ the terms "facial challenge" or "as-applied challenge." The difficulty with the
submission’s preferred terms is that in United States jurisprudence, a "facial challenge" pertains not only to
third-party standing in constitutional cases, but also the "facial invalidation" of statutes. This matter is
problematic if we are to consider the holding of the U.S. Supreme Court in U.S. v. Salerno,78 penned by the
conservative Chief Justice Rehnquist.
In 1987, a divided U.S. Supreme Court ruled that the "facial challenge" is "the most difficult challenge to
mount successfully, since the challenger must establish that no set of circumstances exists under
which the Act would be valid."79 This characterization differs greatly from Justice Carpio’s analysis that
"facial challenge" only pertains to standing. Salerno has given rise to another implication to the "facial
challenge" under American jurisprudence – that the nullification of a statute will be justified only if it is
established that under no set of circumstances would the law remain valid. Interestingly, the Separate Opinion
of Justice Mendoza in Estrada also favorably cites Salerno and the above-quoted declaration therein, a citation
that adds to the confusion. Yet by simply distinguishing "facial challenge" (standing) from "facial
invalidation" (adjudication on the merits), we can easily divorce this holding in Salerno from the aspect of
standing, since there is no material relationship between the question of standing and the quoted-
pronouncement in Salerno.
Evidently, if we are to accept the Salerno proposition, and declare that the "facial invalidation" is warranted only
upon demonstration that under no set of circumstances will the challenged provision be constitutional, such a
doctrine would stand as the Everest of judicial review. It would, among others, consequence in the affirmation
of Section 45(j).
But should we accept the Salerno proposition? Tellingly, the declaration has not been met with unanimity in the
American legal community. In a subsequent case, Washington v. Glucksberg80, Justice John Paul Stevens
noted in his concurring opinion that:
Upholding the validity of the federal Bail Reform Act of 1984, the Court stated in United States v.
Salerno, 481 U.S. 739 (1987), that a "facial challenge to a legislative Act is, of course, the most difficult
challenge to mount successfully, since the challenger must establish that no set of circumstances
exists under which the Act would be valid." Id., at 745. http://caselaw.lp.findlaw.com/scripts/getcase.pl?
court=US&vol=000&invol=95-1858 - f6f4I do not believe the Court has ever actually applied such a strict
standard, http://caselaw.lp.findlaw.com/scripts/getcase.pl?court=US&vol=000&invol=95-1858 - f7f4even in
Salerno itself, and the Court does not appear to apply Salerno here. Nevertheless, the Court does
conceive of respondents' claim as a facial challenge--addressing not the application of the statute to a
particular set of plaintiffs before it, but the constitutionality of the statute's categorical prohibition against
"aid[ing] another person to attempt suicide."81
Further, in City of Chicago v. Morales82, the U.S. Supreme Court refused to work within the parameters
ostensibly set forth in Salerno. Held the U.S. Supreme Court through Justice Stevens: "There is no need,
however, to decide whether the impact of the Chicago ordinance on constitutionally protected liberty alone
would suffice to support a facial challenge under the overbreadth doctrine. For it is clear that the vagueness of
this enactment makes a facial challenge appropriate. This is not an ordinance that "simply regulates business
behavior and contains a scienter requirement." It is a criminal law that contains no mens rea requirement, and
infringes on constitutionally protected rights. When vagueness permeates the text of such a law, it is subject to
facial attack."83
Moreover, the Salerno proposition is simply alien to the Philippine experience. Our jurisprudence has
traditionally deigned to nullify or facially invalidate statutes or provisions thereof without need of considering
whether "no set of circumstances exists under which the [law or provision] would be valid." Among recent
examples of laws or legal provisions nullified as unconstitutional by this Court are B.P. Blg. 885,84 the Marcos-
issued Executive Order No. 626-A,85 Section 46 of Rep. Act No. 4670,86 Rep. Act No. 7056,87 provisions of the
2000 General Appropriations Act passed by Congress,88 and most recently, Section 47 of P.D. 198.89 Indeed, in
a similar vein to the observations of Justice Stevens as to the American experience, the impossibly high
standard set forth in Salerno has never been applied squarely in this jurisdiction.
If the auto-limiting philosophy set forth Salerno should have influence in this jurisdiction, it should only be to the
effect that the remedy of constitutional nullification should be resorted to by the courts if there is no other
means by which the unconstitutional defect of the law or legal provision can be treated. Then again, such a
principle is already laid down by our accepted rules of statutory construction, such as that "a statute should be
construed whenever possible in a manner that will avoid conflict with the Constitution", or that "where a statute
is reasonably susceptible of two constructions, one constitutional and the other unconstitutional, that
construction in favor of its constitutionality shall be adopted, and the construction that will render it invalid
rejected."
Our own jurisprudence must expressly reject Salerno, if only because that case has fostered the impression
that a "facial challenge," or a "facial invalidation" necessitates a demonstration that the law involved is
unconstitutional in whatever application. Even though such impression is not universally accepted, our
acceptance of the viability of either the "facial challenge" or "facial invalidation" in this jurisdiction without
accompanying comment on Salerno might imply that the extremely high bar for judicial review set therein
prevails in the Philippines.
In order to avoid any further confusion, especially that which may be brought about by Salerno, I had proposed
during deliberations the following definitions for usage in Philippine jurisprudence:
As to standing
The ability of a petitioner to bring forth a suit challenging the constitutionality of an enactment or provisions
thereof, even if the petitioner has yet not been directly injured by the application of the law in question, is
referred to as a "facial challenge."
The ability of a petitioner to judicially challenge a law or provision of law that has been specifically applied
against the petitioner is referred to as an "as-applied challenge."
As to adjudication on the merits
The nullification on constitutional grounds by the courts of a provision of law, or even of the entire statute
altogether, is referred to as "facial invalidation."
The invalidation of the application of a provision of law or a statute only insofar as it applies to the petitioner
and others similarly situated, without need to nullify the law or provision thereof, is referred to as "as-applied
invalidation."
I submit that these terms provide a greater degree of clarity than simply using "facial challenge" and "as-
applied challenge." My subsequent discussion shall hence utilize such terms as well.
V.
The Court, this time and through this case, should reassert that the vagueness challenge is viable against
penal statutes. The vagueness challenge is a critical defense to all persons against criminal laws that are
arbitrarily drawn, formulated without thoughtful deliberation, or designed to yield to the law enforcer the
determination whether an offense has been committed. Section 45(j) of Rep. Act 8189 is indeed a textbook
example of a vague penal clause. The ponencia submits that Section 45(j) does not suffer from the infirmity as
it ostensibly establishes that violation of any provision of Rep. Act No. 8189 is an election offense. I cannot
accept the proposition that the violation of just any provision of Rep. Act No. 8189, as Section 45(j) declares
with minimal fanfare, constitutes an election offense punishable with up to six (6) years of imprisonment.
Section 45(j) categorizes the violation of any provision of Rep. Act 8189 as an election offense, thus effectively
criminalizing such violations. Following Section 46 of the same law, any person found guilty of an election
offense "shall be punished with imprisonment of not less than one (1) year but not more than six (6) years."
Virtually all of the 52 provisions of Rep. Act 8189 define an act, establishes a policy, or imposes a duty or
obligation on a voter, election officer or a subdivision of government. Virtually all of these provisions are
susceptible to violation, the only qualifier being that they incorporate a verb.
For example, Section 4 states that the "precinct-level list of voters shall be accompanied by an addition/
deletion list for the purpose of updating the list." If the precinct-level list of voters is not accompanied by an
addition/deletion list, an election offense is committed, according to Section 45(j). But if that is so, who commits
the election offense? The COMELEC? What about if the attachment addition/deletion list was somehow
alleged as not being geared towards updating the list? Would that constitute an election offense?
Under Section 37, a voter who was excluded from the certified list of voters due to inadvertence or registered
with an erroneous or misspelled name may file a petition for an order directing that his name be entered or
corrected. Such voter is also required to attach to a "certified copy of the registration record or identification car
or the entry of his name in the certified list of voters used in the preceding election, together with the proof that
his application was denied or not acted upon by the Election Registration Board." If the voter fails to attach any
of these requirements, no matter the reason, an election offense as defined under Section 45(j) has been
committed, and the voter may be sentenced to prison. As to what precisely are the elements of this particular
crime, I am at a loss to define.
Even the most innocuous of oversights can be deemed as an election offense under Rep. Act 8189. For
example, Section 10 requires that the applicant-voter submit four (4) identification-size copies of his/her latest
photograph. If such voter submits only three (3) photos instead of four (4), then he/she is theoretically violating
a provision of Rep. Act No. 8189, and is thus committing an election offense under Section 45(j) punishable by
no less than one (1) year of imprisonment without the possibility of probation. Another example, Section 14
requires that the application for registration of a physically disabled person must be prepared by a relative
within the fourth degree of consanguinity, the Election Officer, or a member of an accredited citizen’s arm. If an
elderly disabled widow has her trusted maid prepare the application for her, then an election offense is
committed as such act violates a provision of Rep. Act No. 8189. The maid, or perhaps even the widow herself,
may now face a prison term of no less than one (1) year.
In his Separate Opinion, Justice Carpio provides even more telling illustrative samples90 of crimes under Rep.
Act 8189 if the draft ponencia were upheld. Indeed, one can make a parlor game out of discerning all the
possible acts that constitute a crime because of Section 45(j). Yet any entertainment that can be derived out of
such exercise will be muted because the consequence involves prison terms.
The very absurdity of such implausible, yet legally possible prosecutions, lend doubt as to whether the
legislature had truly intended such penal consequences. Because Section 45(j) is impermissibly vague, such
doubts could be entertained, to consequences that are deleterious to our freedoms. If Section 45(j) were left by
the Court as is, it would be a validation that our legislators so intended to penalize so trifling an offense.
Moreover, not only does the vagueness of Section 45(j) deprive the voters, election officials, or indeed any live
person (since the provisions of Rep. Act 8189 are susceptible to violation by just about anybody) of fair notice
as to what conduct is exactly proscribed and criminalized. It also leaves prosecutors and judges at a loss as to
how exactly to prosecute or adjudge an election offense under Section 45(j).
We can reasonably presume that save for the specific election offenses under Section 45 (a) to (j) and the
specific penal clause under Section 10 of Rep. Act 8189, all the other provisions of the law were not crafted
with the intent to devise a penal provision. Outside of the bare text of the provision, it would be impossible to
discern the precise elements of the crime, and since these provisions were not designed as penal provisions in
the first place, there was no deliberate intent to design every subject-verb agreement as an element to a crime.
For example, Section 14 provides that with respect to illiterate or disabled applicants, "[t]he fact of illiteracy or
disability shall be so indicated in the application [for registration]." Shorn of any criminal context, as it most
assuredly was in the minds of the legislators, the clause merely required that the fact of illiteracy or disability
should be indicated in the application. Seen benignly, the only concern of the provision is that such fact be
manifested in the application. Since the provision does not even mandate that it be the applicant himself or
herself who should make such indication, there would be no impediment for the election officer to make the
indication in behalf of the applicant.
But if indeed that clause of Section 14 does actually embody an election offense, it would be virtually
impossible for the prosecutor or the judge to ascertain the elements of such crime. Facially, there would appear
only to be one element of the crime, the absence of any indication in the application of the fact of illiteracy or
disability. But there is no indication on the face of the provision as to who exactly commits the crime. Neither is
there clarity as to how exactly such crime is precisely committed.
It bears remembering that it is the second concern of the vagueness doctrine, that the statute is precise
enough that it does not invite arbitrary and discriminatory enforcement by law enforcement authorities, that is
perhaps the more important aspect of the doctrine. Section 45(j) is militantly offensive to that consideration.
Our Philippine criminal laws are predicated on crimes that have precisely defined elements, and the task of the
judge is to determine whether these elements have been proven beyond reasonable doubt. For the most part,
each crime currently defined in our penal laws consist of only a handful of elements, providing the judge a
clearly defined standard for conviction or acquittal.
That is not the case for a penal provision predicated on "any violation of this Act." A legislative enactment can
consist of 100 provisions. Each provision may describe just one act, right, duty or prohibition, or there could be
several contained in just one provision. The catch-all penal provision ostensibly criminalizes the violation of any
one right, duty, or prohibition, of which there could be hundreds in just one statute. Just any one of these
possibly hundreds of acts mentioned in the law is an element of the consummated crime under the catch-all
provision such as Section 45(j), thus greatly increasing the risk for conviction under such a provision. There
could be literally hundreds of ways that a catch-all provision in just one law could become the source of
imprisonment.
Obviously, broader standards lead to broader discretion on the part of judges. Some judges may tend towards
a narrow application of a provision such as Section 45(j), while others might be inclined towards its broad
application. What is certain is that no consistent trend will emerge in criminal prosecutions for violations of
provisions such as Section 45(j), a development that will not bode well for the fair and consistent administration
of justice. Provisions such as Section 45(j) do nothing for the efficient administration of justice. Since such a
provision is laced with unconstitutional infirmity, I submit it is the task of the Court to say so, in order that the
courts will need not be confronted with this hydra of statutory indeterminacy.
The COMELEC did point out that an election offense under Section 45(j) is malum prohibitum, which is a
correct restatement of prevailing doctrine, yet a prospect that makes the provision even more disturbing.
Returning to Section 14, the illiterate or disabled voter precisely requires special assistance because of his/her
personal condition which impairs the ability to properly fill up the application form. As such, the likelihood of
inadvertently failing to indicate the fact of illiteracy or disability is present. Since any criminal intent is irrelevant,
any honest mistake unforgivable, just because Rep. Act 8189 embodies malum prohibitum offenses, the
illiterate or disabled voter who inadvertently fails to indicate the fact of his/her impairment in the application
simply has no defense against imprisonment, except the pity of the judge. And even then, such pity, if wielded,
may exceed the discretion of the judge since the application of the malum prohibitum law simply calls for the
execution of its penal clauses once the offense has been established. Dura lex sed lex, indeed.
VI.
I now wish to address certain points raised by the ponente in rebuttal of my arguments. The claim that the
Court should not touch upon the constitutionality of Section 45(j) because it is not the lis mota of the case is,
with due respect, absurd. While the ponencia claims that the lis mota of this case is the alleged grave abuse of
discretion on the part of the COMELEC, it cannot be denied that the valid prosecution of the petitioners
integrally depends on the constitutionality of Section 45(j). It appears that the real reason the majority refuses
to acknowledge that the constitutionality of Section 45(j) is the lis mota is simply because they do not find that
provision unconstitutional, as roundabout a path to reason as there ever has been.
The other contentions of the ponente submitted in rebuttal to my position warrant more extensive dissection.
A.
The ponente invokes People v. Gatchalian91 in an attempt to convince that a "catch-all" penal provision is not
inherently unconstitutional, since the Court in 1958, ruling 6-3, had sustained a criminal prosecution based on
such a provision found in the since-repealed Minimum Wage Law92. However, with all due respect, the
discussion fails to take into account distinguishing nuances and contexts that differentiate Gatchalian and its
relevant statutes from the present case and Rep. Act No. 8189.
We cannot deny the fact that the void-for-vagueness constitutional challenge, as with some other standards of
constitutional adjudication, had not yet found full fruition within our own jurisprudence at the time Gatchalian
was decided in 1958, a year when the oldest members of the Court were still studying in law school, and the
youngest among us still in short pants. Indeed, the jurisprudential appreciation then of our fundamental
constitutional rights differed in several critical respects from our presently accepted standards. In 1958,
evidence seized from unconstitutional searches and seizures were admissible into evidence, as the court
adopted the exclusionary rule only in 1967 with Stonehill v. Diokno. In 1958, the suspension of that
fundamental right – the privilege of the writ of habeas corpus – was still believed to be a political question
which
could not be the subject of judicial inquiry, the adverse rule emerging only in 1971 with Lansang v. Garcia.93 In
1958, there was yet no express recognition from this Court of a constitutional right to privacy independent from
the right to liberty, such recognition came only in 1968 with Morfe v. Mutuc.94 These are but a few of the more
prominent examples that can be plumbed from our jurisprudence.
I raise this point for I respectfully submit that Gatchalian can conclusively settle the present case in favor of the
ponente’s position only if we believe in a static and unyielding theory of jurisprudence that blindly ignores the
refreshing new insights and wisdoms each new generation gifts to civilization. Our own jurisprudential history
indubitably reveals that this Court does not adhere to so rigid an ideology. A vote that Section 45(j) is
constitutional only for the simple reason that a like-minded provision was sustained way back in 1958 would be
premised on a philosophy utterly alien to the progressive traditions of the Supreme Court.
We need to view the questions now material at bar with a fresh perspective, with an understanding that we
may need to break new ground if need be, to arrive at the proper and enlightened resolution of the question.
Gatchalian cannot serve as crutch to sustain the constitutionality of Section 45(j). It is eminently possible to
declare the nullity of Section 45(j) without having to invalidate the core reasoning and ultimate result of
Gatchalian.
B.
In Gatchalian, the accused therein was prosecuted under Section 15(a) of the Minimum Wage Law. Said
provision reads:
SEC. 15. Penalties and recovery of wage due under this Act. —
(a) Any person who willfully violates any of the provisions of this Act shall upon conviction thereof be subject to
a fine of not more than two thousand pesos, or, upon second conviction, to imprisonment of not more then one
year, or to both fine and imprisonment, in the discretion of the court.
The accused in Gatchalian was alleged to have violated, in particular, Section 3 of the Minimum Wage Law,
which prescribed the minimum wage rates an employer "shall pay to each of his employees".
The key mark in Section 15 is its qualification that there must be a "willful violation of any of the provisions" of
the Minimum Wage Law before a criminal prosecution can be had. This distinguishes from Section 45(j), which
does not offer such a critical qualification of intent. The indispensable presence of "willful violation" as an
element to the criminal offense supplies the penal statute with mens rea, an element which has been defined
as "a guilty mind, a guilty or wrongful purpose or criminal intent." In the 1998 case of City of Chicago v.
Morales.95 one of the cases which I have extensively cited, the U.S. Supreme Court had comfortably ruled that
the U.S. Supreme Court has comfortably held that "a criminal law that contains no mens rea requirement
infringes on constitutionally protected rights."
Crucially, the Court majority96 that decided Gatchalian expressly emphasized the fact that Section 15 expressly
limited such prosecutions only to "willful violations" when it affirmed the provision.
It is clear from the above-quoted provisions that while Section 3 explicitly requires every owner of an
establishment located outside of Manila or its environs to pay each of its employees P3.00 a day on the
effective date of the Act, and one year thereafter P4.00 a day, Section 15 imposes both a criminal penalty for a
willful violation of any of the above provisions and a civil liability for any underpayment of wages due an
employee. The intention of the law is clear: to slap not only a criminal liability upon an erring employer for any
willful violation of the acts sought to be enjoined but to attach concurrently a civil liability for any underpayment
he may commit as a result thereof. The law speaks of a willful violation of "any of the provisions of this Act,"
which is all-embracing, and the same must include what is enjoined in Section 3 thereof which embodies the
very fundamental purpose for which the law has been adopted.97
Had the Court ruled Section 45(j) of the Voter’s Registration Act unconstitutional, such pronouncement will not
overturn or even be intellectually inconsistent with Gatchalian. For one, there are enough textual qualifications
in Section 15 as opposed to Section 45(j) that spell the difference between a constitutional penal statute and a
void one. Moreover, the same constitutional considerations we have and will fully consider in this petition were
not addressed in Gatchalian.
The accused in Gatchalian had premised his motion to dismiss on two grounds: that Section 3 carried only a
civil liability and did not constitute a criminal offense; and assuming that Section 3 did constitute a criminal
offense, the same provision did not carry any penalty penalizing it.98 These were the two distinct issues which
were addressed by the majority, and also to which the three dissenters responded to. The difference between
those issues as formulated in Gatchalian and those presently confronting us is self-evident.
Still, the accused in Gatchalian did offer the following argument that may be taken into account as we consider
the present case. The argument pertains to the proper interpretation of Section 15(a), which the accused had
argued would result in absurdity should it "be interpreted in a manner that would embrace a willful violation of
any of the provisions of the law."99 As recounted in Gatchalian:
Counsel for appellee however entertains a different interpretation. He contends that if Section 15(a) should be
interpreted in a manner that would embrace a wilful violation of any of the provisions of the law we would have
a situation where even the officials entrusted with its enforcement may be held criminally liable which is not
contemplated in the law. Thus, he contends, the Secretary of Labor may be criminally prosecuted for willfully
not using all available devices for investigation [Section 4(c)], for not presenting to the Wage Board all the
evidence in his possession relating to the wages in the industries for which the Wage Board is appointed and
other information relevant to the establishment of the minimum wage [Section 5(p)], and for not doing all other
acts which the law requires him to do under Section 6. This, he emphasizes, is absurd and should not be
entertained.100
The tenor of this argument is teasingly similar to that adopted by an esteemed colleague and myself in our
respective submissions. The ponente has more or less responded dismissively towards this arguments, relying
on comforting platitudes such as "the wisdom of a law is beyond this Court’s function of inquiry."
Perhaps, considering that the ponente now relies on Gatchalian, it should be expected that the Gatchalian
Court would have responded to the above-quoted argument in a like-manner. But it clearly did not. Instead, it
emphasized:
To begin with, the Minimum Wage Law is a social legislation which has been adopted for the benefit of labor
and as such it contains provisions that are enjoined to be observed by the employer. These provisions are
substantive in nature and had been adopted for common observance by the persons affected. They cannot be
eluded nor subverted lest the erring employer runs into the sanction of the law. On the other hand, the
provisions adverted to by counsel are merely administrative in character which had been adopted to set the
machinery by which the law is to be enforced. They are provisions established for observance by the officials
entrusted with its enforcement. Failure to comply with them would therefore subject them merely to
administrative sanction. They do not come under the penal clause embodied in Section 15(a). This is clearly
inferred from Section 18(c), of Republic Act No. 602, which provides: "Any official of the Government to whom
responsibility in administration and enforcement has been delegated under this Act shall be removable on the
sustaining of charges of malfeasance or non-feasance in office." This specific provision should be interpreted
as qualifying the penal clause provided for in Section 15(a).101
The Court in Gatchalian plainly realized and acknowledged that there are limitations to the plausible application
of Section 15(a), even if these were not textually committed in the provision itself. The most sweeping of these
limitations is the admonition that those administrative officials charged with correlative rights and duties under
the Minimum Wage Law could not be criminally liable under Section 15(a), despite the absence of any such
clarificatory language in the law itself. I myself am not too comfortable with the methodology used by the Court
in so qualifying, considering the absence of any statutory support that would have indubitably justified this
conclusion.102
Yet if we were to examine this passage in the present context, where considerations on the question of void-
for-vagueness have fully blossomed, the Court in Gatchalian expressly acknowledged that Section 15(a) would
have been untenable in some applications, such as if an administrative officer were criminally charged under
that provision. In effect, the Court tacitly acknowledged in Gatchalian that Section 15(a) was indeed
void-for-vagueness, and that line of attack would have been viable to any administrative officer
actually charged under that provision. It would have been one thing for the Court in Gatchalian to have
approached that argument by responding that the wisdom of Section 15(a) was beyond judicial inquiry. That
approach would have aligned with that of the ponente. Instead, Gatchalian rejected that approach and instead
expressed an opinion that current-day commentators would appreciate as an embryonic formulation of the
"void-as-applied" principle.
VII.
Since it has been established that Section 45(j) infringes on procedural due process, the final inquiry should be
whether the nullification of Section 45(j) is warranted.
Given the problem of vagueness that attends to Section 45(j), is facial invalidation of the statute warranted?
The practical value of facial invalidation in this case cannot be discounted. Unless Section 45(j) is nullified, it
may still be utilized as a means of criminal prosecution. Because there are dozens, if not hundreds, of different
contexts under which a criminal offense may carved out of Section 45(j), limiting the challenges to the provision
to "as-applied" and its case-by-case method will prove woefully inadequate in addressing the elemental lack of
fair notice that plagues the provision.
The very vagueness of Section 45(j) makes it an ideal vehicle for political harassment. The election season will
undoubtedly see a rise in the partisan political temperature, where competing candidates and their camps will
employ every possible legal tactic to gain an advantage over the opponents. Among these possible tactics
would be the disenfranchisement of voters who may be perceived as supporters of the other side; or the
disqualification of election officers perceived as either biased or impartial enough to hamper a candidate with
ill-motives.
The disenfranchisement of voters or the disqualification of election officers could be accomplished through
prosecutions for election offenses. Even if these prosecutions do not see fruition, the mere filing of such
charges could be enough to dampen enthusiasm in voting, or strike fear in conducting honest and orderly
elections.
Unfortunately, Section 45(j) is an all too easy tool for mischief of this sort. One can invent any sort of
prosecution using any provision of Rep. Act No. 8189 that would fall within the ambit of the offending Section
45(j). It would not even matter if the charge is meritorious or not, just the systematic filing of complaints based
on Section 45(j) is sufficient to alter the political climate in any locality.
I find it odd, suspicious even, that the COMELEC is insisting on prosecution the petitioners on Section 45(j),
and not the Omnibus Election Code. The acts for which they are charged are classified as an election offense
under Section 261(y) of the Omnibus Election Code which specifically charges as election offenses "any
person who knowingly makes any false or untruthful statement relative to any of the data or information
required in the application for registration;" and "any voter who, being a registered voter, registers anew without
filing an application for cancellation of his previous registration." I have no idea whether the COMELEC sees
this case as a test case for prosecutions under Section 45(j). What I do know is that if the Court debunks the
present challenge to Section 45(j), the COMELEC will be emboldened to pursue more prosecutions under
Section 45(j), a prospect that would hearten the most partisan of political operatives. The result would not only
be more frivolous complaints for violation of Section 45(j), but also an undue and utterly unnecessary
temperature rise in the political climate.
It might be argued that a ruling that simply imposes an "as-applied invalidation" on Section 45(j) would
sufficiently disquiet such concern. I disagree. Any room left for discretion or interpretation of Section 45(j)
would be sufficient for one with intent to harass voters or election officials with the threat of prosecution under
that provision. After all, just the mere filing of the complaint is enough to effect harassment. Besides, I submit
that the acts already expressly criminalized as election offenses, whether under the Omnibus Election Code, or
under Rep. Act No. 8189, already encompass the whole range of election offenses that could possibly be
committed. The petitioners could have been charged instead with violating Section 261(y) of the Omnibus
Election Code.
In recent years, Congress has chosen to employ phraseology similar to Section 45(j) in a number of laws, such
as the Cooperative Code,103 the Indigenous Peoples Rights Act,104 and the Retail Trade Liberalization Act.105 I
know from my own experience that this is the product of a legislative predilection to utilize a standard template
in the crafting of bills.
I have come to believe that this standard phraseology constitutes a dangerous trend, and a clear stand from
this Court that Section 45(j) is unconstitutional for being void-for-vagueness would make the legislature think
twice before employing such terminology in the laws that it passes. The problem is less obvious if the law in
question contains only a few provisions, where any person can be reasonably expected to ascertain with ease
what particular acts are made criminal. However, in more extensive laws such as Rep. Act No. 8189 or the
especially long codes, such expectation could not be reasonably met. I am aware that compliance with the
requisites for the publication of laws is considered legally sufficient for the purposes of notice to the public, but I
submit that a measure of reason should be appreciated in evaluating that requirement. If a law runs 400 pages
long, with each sentence detailing an act that is made criminal in nature, the doctrine "ignorance of the law
excuses no one" should not be made a ready and convenient excuse, especially if, as in Rep. Act 8189, the act
is made criminal only by implication of a provision such as Section 45(j).
We should think of the public good that would prevail if the Court makes the stand that Congress cannot
criminalize a whole range of behavior by simply adding a multi-purpose, catch-all provision such as Section
45(j). Congress will be forced to deliberate which precise activities should be made criminal. Such deliberate
thought leads to definitive laws that do not suffer the vice of void-for-vagueness. These definite laws will
undoubtedly inform the people which acts are criminalized, a prospect wholly consonant with constitutional
guarantees of fair notice and due process.
No doubt, Section 45(j) and its ilk in law are dangerous provisions. It would be best if the Court send a
message that this intended prosecution of the petitioners could be accomplished only through the Omnibus
Election Code, which after all specifically penalizes the acts for which they are alleged to have committed.
In the case at bar, an ideal resolution would be to grant the petition and void Section 45(j) and the COMELEC
resolutions authorizing prosecution under it, but without prejudice to the authorization of prosecution of the
petitioners under the Omnibus Election Code, assuming of course such a tack is still legally feasible.
This solution would satisfy whatever motivation there is to sanction the petitioners, yet at the same time make it
clear to the COMELEC that prosecutions under Section 45(j) of Rep. Act No. 8189 cannot avail before this
Court. At the same time, the Court would be able to reiterate comforting precepts – that prosecutions under
criminal laws that specifically define and particularly criminalize the acts constituting the offense are preferred
over those laws that broadly define criminal offenses; that the Court will not provide sanctuary to any abusive
resort to Section 45(j) of Rep. Act No. 8189; and that would-be voters who neglect to pay great care to the
process of voter registration will face the sanction of the law.
Sad to say, the majority’s ruling today is beyond comprehension. No good will come out of it. For one, it opens
a Pandora’s box of all sorts of malicious wholesale prosecutions of innocent voters at the instance of political
partisans desirous to abuse the law for electoral gain. It emboldens Congress to continue incorporating exactly
the same provision in the laws it enacts, no matter how many hundreds of acts or provisions are contained in
the particular statute. For that matter, it signals that vague penal laws are acceptable in this jurisdiction. Left
unabated, the doctrine will be reflexively parroted by judges, lawyers and law students memorizing for their bar
exams until it is accepted as the entrenched rule, even though it simply makes no sense. Bad folk wisdom
handed down through the generations is soon regarded as gospel truth. I sincerely hope the same mistake is
not made with the lamentable doctrine affirmed by the majority today.
I respectfully dissent.
DANTE O. TINGA
Associate Justice
Republic of the Philippines
SUPREME COURT
Manila
EN BANC

G.R. No. 82511 March 3, 1992


GLOBE-MACKAY CABLE AND RADIO CORPORATION, petitioner,
vs.
NATIONAL LABOR RELATIONS COMMISSION and IMELDA SALAZAR, respondents.
Castillo, Laman, Tan & Pantaleon for petitioner.
Gerardo S. Alansalon for private respondent.

ROMERO, J.:
For private respondent Imelda L. Salazar, it would seem that her close association with Delfin Saldivar would
mean the loss of her job. In May 1982, private respondent was employed by Globe-Mackay Cable and Radio
Corporation (GMCR) as general systems analyst. Also employed by petitioner as manager for technical
operations' support was Delfin Saldivar with whom private respondent was allegedly very close.
Sometime in 1984, petitioner GMCR, prompted by reports that company equipment and spare parts worth
thousands of dollars under the custody of Saldivar were missing, caused the investigation of the latter's
activities. The report dated September 25, 1984 prepared by the company's internal auditor, Mr. Agustin
Maramara, indicated that Saldivar had entered into a partnership styled Concave Commercial and Industrial
Company with Richard A. Yambao, owner and manager of Elecon Engineering Services (Elecon), a supplier of
petitioner often recommended by Saldivar. The report also disclosed that Saldivar had taken petitioner's
missing Fedders airconditioning unit for his own personal use without authorization and also connived with
Yambao to defraud petitioner of its property. The airconditioner was recovered only after petitioner GMCR filed
an action for replevin against Saldivar.1
It likewise appeared in the course of Maramara's investigation that Imelda Salazar violated company reglations
by involving herself in transactions conflicting with the company's interests. Evidence showed that she signed
as a witness to the articles of partnership between Yambao and Saldivar. It also appeared that she had full
knowledge of the loss and whereabouts of the Fedders airconditioner but failed to inform her employer.
Consequently, in a letter dated October 8, 1984, petitioner company placed private respondent Salazar under
preventive suspension for one (1) month, effective October 9, 1984, thus giving her thirty (30) days within
which to, explain her side. But instead of submitting an explanations three (3) days later or on October 12,
1984 private respondent filed a complaint against petitioner for illegal suspension, which she subsequently
amended to include illegal dismissal, vacation and sick leave benefits, 13th month pay and damages, after
petitioner notified her in writing that effective November 8, 1984, she was considered dismissed "in view of
(her) inability to refute and disprove these findings. 2
After due hearing, the Labor Arbiter in a decision dated July 16, 1985, ordered petitioner company to reinstate
private respondent to her former or equivalent position and to pay her full backwages and other benefits she
would have received were it not for the illegal dismissal. Petitioner was also ordered to pay private respondent
moral damages of P50,000.00. 3
On appeal, public respondent National Labor Relations, Commission in the questioned resolution dated
December 29, 1987 affirmed the aforesaid decision with respect to the reinstatement of private respondent but
limited the backwages to a period of two (2) years and deleted the award for moral damages. 4
Hence, this petition assailing the Labor Tribunal for having committed grave abuse of discretion in holding that
the suspension and subsequent dismissal of private respondent were illegal and in ordering her reinstatement
with two (2) years' backwages.
On the matter of preventive suspension, we find for petitioner GMCR.
The inestigative findings of Mr. Maramara, which pointed to Delfin Saldivar's acts in conflict with his position as
technical operations manager, necessitated immediate and decisive action on any employee closely,
associated with Saldivar. The suspension of Salazar was further impelled by th.e discovery of the missing
Fedders airconditioning unit inside the apartment private respondent shared with Saldivar. Under such
circumstances, preventive suspension was the proper remedial recourse available to the company pending
Salazar's investigation. By itself, preventive suspension does, not signify that the company has adjudged the
employee guilty of the charges she was asked to answer and explain. Such disciplinary measure is resorted to
for the protection of the company's property pending investigation any alleged malfeasance or misfeasance
committed by the employee.5
Thus, it is not correct to conclude that petitioner GMCR had violated Salazar's right to due process when she
was promptly suspended. If at all, the fault, lay with private respondent when she ignored petitioner's
memorandum of October 8, 1984 "giving her ample opportunity to present (her) side to the Management."
Instead, she went directly to the Labor Department and filed her complaint for illegal suspension without giving
her employer a chance to evaluate her side of the controversy.
But while we agree with the propriety of Salazar's preventive suspension, we hold that her eventual separation
from employment was not for cause.
What is the remedy in law to rectify an unlawful dismissal so as to "make whole" the victim who has not merely
lost her job which, under settled Jurisprudence, is a property right of which a person is not to be deprived
without due process, but also the compensation that should have accrued to her during the period when she
was unemployed?
Art. 279 of the Labor Code, as amended, provides:
Security of Tenure. — In cases of regular employment, the employer shall not terminate the services of an
employee except for a just cause or when authorized by this Title. An employee who is unjustly dismissed from
work shall be entitled to reinstatement without loss of seniority rights and other privileges and to his full
backwages, inclusive of allowances, and to his other benefits or their monetary equivalent computed from the
time his compensation was withheld from him up to the time of his actual reinstatement. 6 (Emphasis supplied)
Corollary thereto are the following provisions of the Implementing Rules and Regulations of the Labor Code:
Sec. 2. Security of Tenure. — In cases of regular employments, the employer shall not terminate the services
of an employee except for a just cause as provided in the Labor Code or when authorized by existing laws.
Sec. 3. Reinstatement. — An employee who is unjustly dismissed from work shall by entitled to reinstatement
without loss of seniority rights and to backwages."7 (Emphasis supplied)
Before proceeding any furthers, it needs must be recalled that the present Constitution has gone further than
the 1973 Charter in guaranteeing vital social and economic rights to marginalized groups of society, including
labor. Given the pro-poor orientation of several articulate Commissioners of the Constitutional Commission of
1986, it was not surprising that a whole new Article emerged on Social Justice and Human Rights designed,
among other things, to "protect and enhance the right of all the people to human dignity, reduce social,
economic and political inequalities, and remove cultural inequities by equitably diffusing wealth and political
power for the common good." 8 Proof of the priority accorded to labor is that it leads the other areas of concern
in the Article on Social Justice, viz., Labor ranks ahead of such topics as Agrarian and Natural Resources
Reform, Urban Land Roform and Housing, Health, Women, Role and Rights of Poople's Organizations and
Human Rights.9
The opening paragraphs on Labor states
The State shall afford full protection to labor, local and overseas, organized and unorganized, and promote full
employment and equality of employment opportunities for all.
It shall guarantee the rights of all workers to self-organization, collective bargaining and negotiations, and
peaceful concerted activities, including the right to strike in accordance with law. They shall be entitled to
security of tenure, humane conditions of work, and a living wage. They shall also participate in policy and
decision-making processes affecting their rights and benefits is may be provided by law.10 (Emphasis supplied)
Compare this with the sole.provision on Labor in the 1973 Constitution under the Article an Declaration of
Principles and State Policies that provides:
Sec. 9. The state shall afford protection to labor, promote full employment and equality in employment, ensure
equal work opportunities regardless of sex, race, or creed, and regulate the relations between workers and
employers. The State shall ensure the rights of workers to self-organization, collective baegaining, security of
tenure, and just and humane conditions of work. The State may provide for compulsory arbitration. 11
To be sure, both Charters recognize "security of tenure" as one of the rights of labor which the State is
mandated to protect. But there is no gainsaying the fact that the intent of the framers of the present
Constitution was to give primacy to the rights of labor and afford the sector "full protection," at least greater
protection than heretofore accorded them, regardless of the geographical location of the workers and whether
they are organized or not.
It was then CONCOM Commissioner, now Justice Hilario G. Davide, Jr., who substantially contributed to the
present formulation of the protection to labor provision and proposed that the same be incorporated in the
Article on Social Justice and not just in the Article on Declaration of Principles and State Policies "in the light of
the special importance that we are giving now to social justice and the necessity of emphasizing the scope and
role of social justice in national development." 12
If we have taken pains to delve into the background of the labor provisions in our Constitution and the Labor
Code, it is but to stress that the right of an employee not to be dismissed from his job except for a just or
authorized cause provided by law has assumed greater importance under the 1987 Constitution with the
singular prominence labor enjoys under the article on Social Justice. And this transcendent policy has been
translated into law in the Labor Code. Under its terms, where a case of unlawful or unauthorized dismissal has
been proved by the aggrieved employee, or on the other hand, the employer whose duty it is to prove the
lawfulness or justness of his act of dismissal has failed to do so, then the remedies provided in Article 279
should find, application. Consonant with this liberalized stance vis-a-vis labor, the legislature even went further
by enacting Republic Act No. 6715 which took effect on March 2, 1989 that amended said Article to remove
any possible ambiguity that jurisprudence may have generated which watered down the constitutional intent to
grant to labor "full protection." 13
To go back to the instant case, there being no evidence to show an authorized, much less a legal, cause for
the dismissal of private respondent, she had every right, not only to be entitled to reinstatement, but ay well, to
full backwages." 14
The intendment of the law in prescribing the twin remedies of reinstatement and payment of backwages is, in
the former, to restore the dismissed employee to her status before she lost her job, for the dictionary meaning
of the word "reinstate" is "to restore to a state, conditione positions etc. from which one had been removed"15
and in the latter, to give her back the income lost during the period of unemployment. Both remedies, looking to
the past, would perforce make her "whole."
Sadly, the avowed intent of the law has at times been thwarted when reinstatement has not been forthcoming
and the hapless dismissed employee finds himself on the outside looking in.
Over time, the following reasons have been advanced by the Court for denying reinstatement under the facts
of the case and the law applicable thereto; that reinstatement can no longer be effected in view of the long
passage of time (22 years of litigation) or because of the realities of the situation; 16 or that it would be "inimical
to the employer's interest; " 17 or that reinstatement may no longer be feasible; 18 or, that it will not serve the
best interests of the parties involved; 19 or that the company would be prejudiced by the workers' continued
employment; 20 or that it will not serve any prudent purpose as when supervening facts have transpired which
make execution on that score unjust or inequitable 21 or, to an increasing extent, due to the resultant
atmosphere of "antipathy and antagonism" or "strained relations" or "irretrievable estrangement" between the
employer and the employee. 22
In lieu of reinstatement, the Court has variously ordered the payment of backwages and separation pay 23 or
solely separation pay. 24
In the case at bar, the law is on the side of private respondent. In the first place the wording of the Labor Code
is clear and unambiguous: "An employee who is unjustly dismissed from work shall be entitled to
reinstatement. . . . and to his full backwages. . . ." 25 Under the principlesof statutory construction, if a statute is
clears plain and free from ambiguity, it must be given its literal meaning and applied without attempted
interpretation. This plain-meaning rule or verba legis derived from the maxim index animi sermo est (speech is
the index of intention) rests on the valid presumption that the words employed by, the legislature in a statute
correctly express its intent or will and preclude the court from construing it differently. 26 The legislature is
presumed to know the meaning of the words, to:have used words advisedly, and to have expressed its intent
by the use of such words as are found in the statute.27 Verba legis non est recedendum, or from the words of a
statute there should be no departure. Neither does the provision admit of any qualification. If in the wisdom of
the Court, there may be a ground or grounds for non-application of the above-cited provision, this should be by
way of exception, such as when the reinstatement may be inadmissible due to ensuing strained relations
between the employer and the employee.
In such cases, it should be proved that the employee concerned occupies a position where he enjoys the trust
and confidence of his employer; and that it is likely that if reinstated, an atmosphere of antipathy and
antagonism may be generated as to adversely affect the efficiency and productivity of the employee
concerned.
A few examples, will suffice to illustrate the Court's application of the above principles: where the employee is a
Vice-President for Marketing and as such, enjoys the full trust and confidence of top management; 28 or is the
Officer-In-Charge of the extension office of the bank where he works; 29 or is an organizer of a union who was
in a position to sabotage the union's efforts to organize the workers in commercial and industrial
establishments; 30 or is a warehouseman of a non-profit organization whose primary purpose is to facilitate and
maximize voluntary gifts. by foreign individuals and organizations to the Philippines; 31 or is a manager of its
Energy Equipment Sales. 32
Obviously, the principle of "strained relations" cannot be applied indiscriminately. Otherwisey reinstatement can
never be possible simply because some hostility is invariably engendered between the parties as a result of
litigation. That is human nature. 33
Besides, no strained relations should arise from a valid and legal act of asserting one's right; otherwise an
employee who shall assert his right could be easily separated from the service, by merely paying his
separation pay on the pretext that his relationship with his employer had already become strained. 34
Here, it has not been proved that the position of private respondent as systems analyst is one that may be
characterized as a position of trust and confidence such that if reinstated, it may well lead to strained relations
between employer and employee. Hence, this does not constitute an exception to the general rule mandating
reinstatement for an employee who has been unlawfully dismissed.
On the other hand, has she betrayed any confidence reposed in her by engaging in transactions that may have
created conflict of interest situations? Petitioner GMCR points out that as a matter of company policy, it
prohibits its employees from involving themselves with any company that has business dealings with GMCR.
Consequently, when private respondent Salazar signed as a witness to the partnership papers of Concave (a
supplier of Ultra which in turn is also a supplier of GMCR), she was deemed to have placed. herself in an
untenable position as far as petitioner was concerned.
However, on close scrutiny, we agree with public respondent that such a circumstance did not create a conflict
of interests situation. As a systems analyst, Salazar was very far removed from operations involving the
procurement of supplies. Salazar's duties revolved around the development of systems and analysis of
designs on a continuing basis. In other words, Salazar did not occupy a position of trust relative to the approval
and purchase of supplies and company assets.
In the instant case, petitioner has predicated its dismissal of Salazar on loss of confidence. As we have held
countless times, while loss of confidence or breach of trust is a valid ground for terminations it must rest an
some basis which must be convincingly established. 35 An employee who not be dismissed on mere
presumptions and suppositions. Petitioner's allegation that since Salazar and Saldivar lived together in the
same apartment, it "presumed reasonably that complainant's sympathy would be with Saldivar" and its
averment that Saldivar's investigation although unverified, was probably true, do not pass this Court's test. 36
While we should not condone the acts of disloyalty of an employee, neither should we dismiss him on the basis
of suspicion derived from speculative inferences.
To rely on the Maramara report as a basis for Salazar's dismissal would be most inequitous because the bulk
of the findings centered principally oh her friend's alleged thievery and anomalous transactions as technical
operations' support manager. Said report merely insinuated that in view of Salazar's special relationship with
Saldivar, Salazar might have had direct knowledge of Saldivar's questionable activities. Direct evidence
implicating private respondent is wanting from the records.
It is also worth emphasizing that the Maramara report came out after Saldivar had already resigned from
GMCR on May 31, 1984. Since Saldivar did not have the opportunity to refute management's findings, the
report remained obviously one-sided. Since the main evidence obtained by petitioner dealt principally on the
alleged culpability of Saldivar, without his having had a chance to voice his side in view of his prior resignation,
stringent examination should have been carried out to ascertain whether or not there existed independent legal
grounds to hold Salatar answerable as well and, thereby, justify her dismissal. Finding none, from the records,
we find her to have been unlawfully dismissed.
WHEREFORE, the assailed resolution of public respondent National Labor Relations Commission dated
December 29, 1987 is hereby AFFIRMED. Petitioner GMCR is ordered to REINSTATE private respondent
Imelda Salazar and to pay her backwages equivalent to her salary for a period of two (2) years only.
This decision is immediately executory.
SO ORDERED.
Paras, Bidin, Griño-Aquino, Medialdea, Regalado, Davide, Jr. and Nocon, JJ., concur.
Cruz, J., concurs in the result.
Gutierrez, Jr., Feliciano and Padilla, JJ., took no part.

Separate Opinions

MELENCIO-HERRERA, J., dissenting:


I believe there is just cause for dismissal per investigative findings. (See Decision, p. 2.)
Narvasa C.J., concurs

Separate Opinions
MELENCIO-HERRERA, J., dissenting:
I believe there is just cause for dismissal per investigative findings. (See Decision, p. 2.)
Narvasa C.J., concurs
Republic of the Philippines
SUPREME COURT
Manila
SECOND DIVISION
G.R. No. 168546 July 23, 2008
MICHAEL PADUA, Petitioner,
vs.
PEOPLE OF THE PHILIPPINES, Respondent.
DECISION
QUISUMBING, J.:
This petition for review assails the Decision1 dated April 19, 2005 and Resolution2 dated June 14, 2005, of the
Court of Appeals in CA-G.R. SP No. 86977 which had respectively dismissed Michael Padua’s petition for
certiorari and denied his motion for reconsideration. Padua’s petition for certiorari before the Court of Appeals
assailed the Orders dated May 11, 20043 and July 28, 20044 of the Regional Trial Court (RTC), Branch 168,
Pasig City, which had denied his petition for probation.
The facts, culled from the records, are as follows:
On June 16, 2003, petitioner Michael Padua and Edgar Allan Ubalde were charged before the RTC, Branch
168, Pasig City of violating Section 5,5 Article II of Republic Act No. 9165,6 otherwise known as the
"Comprehensive Dangerous Drugs Act of 2002," for selling dangerous drugs.7 The Information reads:
The Prosecution, through the undersigned Public Prosecutor, charges Edgar Allan Ubalde y Velchez a.k.a.
"Allan" and Michael Padua y Tordel a.k.a. "Mike", with the crime of violation of Sec. 5, Art. II, Republic Act
No. 9165 in relation to R.A. [No.] 8369, Sec. 5 par. (a) and (i), committed as follows:
On or about June 6, 2003, in Pasig City, and within the jurisdiction of this Honorable Court, the accused, Edgar
Allan Ubalde y Velchez and Michael Padua y Tordel, a minor, seventeen (17) years old, conspiring and
confederating together and both of them mutually helping and aiding one another, not being lawfully authorized
to sell any dangerous drug, did then and there willfully, unlawfully and feloniously sell, deliver and give away to
PO1 Roland A. Panis, a police poseur-buyer, one (1) folded newsprint containing 4.86 grams of dried
marijuana fruiting tops, which was found positive to the tests for marijuana, a dangerous drug, in violation of
the said law.
Contrary to law.8
When arraigned on October 13, 2003, Padua, assisted by his counsel de oficio, entered a plea of not guilty.9
During the pre-trial conference on February 2, 2004, however, Padua’s counsel manifested that his client was
willing to withdraw his plea of not guilty and enter a plea of guilty to avail of the benefits granted to first-time
offenders under Section 7010 of Rep. Act No. 9165. The prosecutor interposed no objection.11 Thus, the RTC
on the same date issued an Order12 stating that the former plea of Padua of not guilty was considered
withdrawn. Padua was re-arraigned and pleaded guilty. Hence, in a Decision13 dated February 6, 2004, the
RTC found Padua guilty of the crime charged:
In view of the foregoing, the Court finds accused Michael Padua y Tordel guilty of [v]iolation of Sec. 5 Art. II of
R.A. No. 9165 in relation to R.A. No. 8369 Sec. 5 par. (a) and (i) thereof, and therefore, sentences him to suffer
an indeterminate sentence of six (6) years and one (1) day of Prision Mayor as minimum to seventeen (17)
years and four (4) months of reclusion temporal as maximum and a fine of Five Hundred Thousand Pesos
(₱500,000.00).
No subsidiary imprisonment, however, shall be imposed should [the] accused fail to pay the fine pursuant to
Art. 39 par. 3 of the Revised Penal Code.
SO ORDERED.14
Padua subsequently filed a Petition for Probation15 dated February 10, 2004 alleging that he is a minor and a
first-time offender who desires to avail of the benefits of probation under Presidential Decree No. 96816 (P.D.
No. 968), otherwise known as "The Probation Law of 1976" and Section 70 of Rep. Act No. 9165. He further
alleged that he possesses all the qualifications and none of the disqualifications under the said laws.
The RTC in an Order17 dated February 10, 2004 directed the Probation Officer of Pasig City to conduct a Post-
Sentence Investigation and submit a report and recommendation within 60 days from receipt of the order. The
City Prosecutor was also directed to submit his comment on the said petition within five days from receipt of
the order.
On April 6, 2004, Chief Probation and Parole Officer Josefina J. Pasana submitted a Post-Sentence
Investigation Report to the RTC recommending that Padua be placed on probation.18
However, on May 11, 2004, public respondent Pairing Judge Agnes Reyes-Carpio issued an Order denying the
Petition for Probation on the ground that under Section 2419 of Rep. Act No. 9165, any person convicted of
drug trafficking cannot avail of the privilege granted by the Probation Law. The court ruled thus:
Before this Court now is the Post-Sentence Investigation Report (PSIR) on minor Michael Padua y Tordel
prepared by Senior Parole and Probation Officer Teodoro Villaverde and submitted by the Chief of the Pasig
City Parole and Probation Office, Josefina J. Pasana.
In the aforesaid PSIR, Senior PPO Teodoro Villaverde recommended that minor Michael Padua y Tordel be
placed on probation, anchoring his recommendation on Articles 189 and 192 of P.D. 603, otherwise known as
the Child and Welfare Code, as amended, which deal with the suspension of sentence and commitment of
youthful offender. Such articles, therefore, do not find application in this case, the matter before the Court being
an application for probation by minor Michael Padua y Tordel and not the suspension of his sentence.
On the other hand, Section 70 is under Article VIII of R.A. 9165 which deals with the Program for Treatment
and Rehabilitation of Drug Dependents. Sections 54 to 76, all under Article VIII of R.A. 9165 specifically refer to
violations of either Section 15 or Section 11. Nowhere in Article VIII was [v]iolation of Section 5 ever
mentioned.
More importantly, while the provisions of R.A. 9165, particularly Section 70 thereof deals with Probation or
Community Service for First- Time Minor Offender in Lieu of Imprisonment, the Court is of the view and so
holds that minor Michael Padua y Tordel who was charged and convicted of violating Section 5, Article II, R.A.
9165, cannot avail of probation under said section in view of the provision of Section 24 which is hereunder
quoted:
"Sec. 24. Non-Applicability of the Probation Law for Drug Traffickers and Pushers. – Any person convicted for
drug trafficking or pushing under this Act, regardless of the penalty imposed by the Court, cannot avail of the
privilege granted by the Probation Law or Presidential Decree No. 968, as amended." (underlining supplied)
WHEREFORE, premises considered, the Petition for Probation filed by Michael Padua y Tord[e]l should be, as
it is hereby DENIED.
SO ORDERED.20
Padua filed a motion for reconsideration of the order but the same was denied on July 28, 2004. He filed a
petition for certiorari under Rule 65 with the Court of Appeals assailing the order, but the Court of Appeals, in a
Decision dated April 19, 2005, dismissed his petition. The dispositive portion of the decision reads:
WHEREFORE, in view of the foregoing, the petition is hereby DENIED for lack of merit and ordered
DISMISSED.
SO ORDERED.21
Padua filed a motion for reconsideration of the Court of Appeals decision but it was denied. Hence, this petition
where he raises the following issues:
I.
WHETHER OR NOT THE COURT OF APPEALS ERRED IN AFFIRMING THE DENIAL OF THE PETITION
FOR PROBATION WHICH DEPRIVED PETITIONER’S RIGHT AS A MINOR UNDER ADMINISTRATIVE
ORDER NO. [02-1-18-SC] OTHERWISE KNOWN AS [THE] RULE ON JUVENILES IN CONFLICT WITH THE
LAW.
II.
WHETHER OR NOT [THE] ACCUSED[’S] RIGHT [TO BE RELEASED UNDER RECOGNIZANCE] HAS BEEN
VIOLATED OR DEPRIVED IN THE LIGHT OF R.A. 9344 OTHERWISE KNOWN AS AN ACT ESTABLISHING
A COMPREHENSIVE JUVENILE JUSTICE AND WELFARE SYSTEM, CREATING THE JUVENILE JUSTICE
AND WELFARE COUNCIL UNDER DEPARTMENT OF JUSTICE APPROPRIATING FUNDS THEREFOR
AND OTHER PURPOSES.22
The Office of the Solicitor General (OSG), representing public respondent, opted to adopt its Comment23 as its
Memorandum. In its Comment, the OSG countered that
I.
The trial court and the Court of Appeals have legal basis in applying Section 24, Article II of R.A. 9165 instead
of Section 70, Article VIII of the same law.
II.
Section 32 of A.M. No. 02-1-18-SC otherwise known as the "Rule on Juveniles in Conflict with the Law" has no
application to the instant case.24
Simply, the issues are: (1) Did the Court of Appeals err in dismissing Padua’s petition for certiorari assailing the
trial court’s order denying his petition for probation? (2) Was Padua’s right under Rep. Act No. 9344,25 the
"Juvenile Justice and Welfare Act of 2006," violated? and (3) Does Section 3226 of A.M. No. 02-1-18-SC
otherwise known as the "Rule on Juveniles in Conflict with the Law" have application in this case?
As to the first issue, we rule that the Court of Appeals did not err in dismissing Padua’s petition for certiorari.
For certiorari to prosper, the following requisites must concur: (1) the writ is directed against a tribunal, a board
or any officer exercising judicial or quasi-judicial functions; (2) such tribunal, board or officer has acted without
or in excess of jurisdiction, or with grave abuse of discretion amounting to lack or excess of jurisdiction; and (3)
there is no appeal or any plain, speedy and adequate remedy in the ordinary course of law.27
"Without jurisdiction" means that the court acted with absolute lack of authority. There is "excess of jurisdiction"
when the court transcends its power or acts without any statutory authority. "Grave abuse of discretion" implies
such capricious and whimsical exercise of judgment as to be equivalent to lack or excess of jurisdiction. In
other words, power is exercised in an arbitrary or despotic manner by reason of passion, prejudice, or personal
hostility, and such exercise is so patent or so gross as to amount to an evasion of a positive duty or to a virtual
refusal either to perform the duty enjoined or to act at all in contemplation of law.28
A review of the orders of the RTC denying Padua’s petition for probation shows that the RTC neither acted
without jurisdiction nor with grave abuse of discretion because it merely applied the law and adhered to
principles of statutory construction in denying Padua’s petition for probation.
Padua was charged and convicted for violation of Section 5, Article II of Rep. Act No. 9165 for selling
dangerous drugs. It is clear under Section 24 of Rep. Act No. 9165 that any person convicted of drug trafficking
cannot avail of the privilege of probation, to wit:
SEC. 24. Non-Applicability of the Probation Law for Drug Traffickers and Pushers. – Any person convicted
for drug trafficking or pushing under this Act, regardless of the penalty imposed by the Court, cannot
avail of the privilege granted by the Probation Law or Presidential Decree No. 968, as amended.
(Emphasis supplied.)
The law is clear and leaves no room for interpretation. Any person convicted for drug trafficking or pushing,
regardless of the penalty imposed, cannot avail of the privilege granted by the Probation Law or P.D. No. 968.
The elementary rule in statutory construction is that when the words and phrases of the statute are clear and
unequivocal, their meaning must be determined from the language employed and the statute must be taken to
mean exactly what it says.29 If a statute is clear, plain and free from ambiguity, it must be given its literal
meaning and applied without attempted interpretation. This is what is known as the plain-meaning rule or verba
legis. It is expressed in the maxim, index animi sermo, or speech is the index of intention.30 Furthermore, there
is the maxim verba legis non est recedendum, or from the words of a statute there should be no departure.31
Moreover, the Court of Appeals correctly pointed out that the intention of the legislators in Section 24 of Rep.
Act No. 9165 is to provide stiffer and harsher punishment for those persons convicted of drug trafficking or
pushing while extending a sympathetic and magnanimous hand in Section 70 to drug dependents who are
found guilty of violation of Sections 1132 and 1533 of the Act. The law considers the users and possessors of
illegal drugs as victims while the drug traffickers and pushers as predators. Hence, while drug traffickers and
pushers, like Padua, are categorically disqualified from availing the law on probation, youthful drug
dependents, users and possessors alike, are given the chance to mend their ways.34 The Court of Appeals
also correctly stated that had it been the intention of the legislators to exempt from the application of Section
24 the drug traffickers and pushers who are minors and first time offenders, the law could have easily declared
so.35
The law indeed appears strict and harsh against drug traffickers and drug pushers while protective of drug
users. To illustrate, a person arrested for using illegal or dangerous drugs is meted only a penalty of six months
rehabilitation in a government center, as minimum, for the first offense under Section 15 of Rep. Act No. 9165,
while a person charged and convicted of selling dangerous drugs shall suffer life imprisonment to death and a
fine ranging from Five Hundred Thousand Pesos (₱500,000.00) to Ten Million Pesos (₱10,000,000.00) under
Section 5, Rep. Act No. 9165.
As for the second and third issues, Padua cannot argue that his right under Rep. Act No. 9344, the "Juvenile
Justice and Welfare Act of 2006" was violated. Nor can he argue that Section 32 of A.M. No. 02-1-18-SC
otherwise known as the "Rule on Juveniles in Conflict with the Law" has application in this case. Section 6836
of Rep. Act No. 9344 and Section 32 of A.M. No. 02-1-18-SC both pertain to suspension of sentence and not
probation.
Furthermore, suspension of sentence under Section 3837 of Rep. Act No. 9344 could no longer be retroactively
applied for petitioner’s benefit. Section 38 of Rep. Act No. 9344 provides that once a child under 18 years of
age is found guilty of the offense charged, instead of pronouncing the judgment of conviction, the court shall
place the child in conflict with the law under suspended sentence. Section 4038 of Rep. Act No. 9344, however,
provides that once the child reaches 18 years of age, the court shall determine whether to discharge the child,
order execution of sentence, or extend the suspended sentence for a certain specified period or until the
child reaches the maximum age of 21 years. Petitioner has already reached 21 years of age or over and
thus, could no longer be considered a child39 for purposes of applying Rep. Act 9344. Thus, the application of
Sections 38 and 40 appears moot and academic as far as his case is concerned.
WHEREFORE, the petition is DENIED. The assailed Decision dated April 19, 2005 and the Resolution dated
June 14, 2005 of the Court of Appeals are AFFIRMED.
SO ORDERED.
LEONARDO A. QUISUMBING
Associate Justice
REYNATO S. PUNO -Chief Justice
Republic of the Philippines
SUPREME COURT
Manila
EN BANC
A.M. No. 12-8-07-CA June 16, 2015
Re: Letter· of Court of Appeals Justice Vicente S.E. Veloso for Entitlement to Longevity Pay for His
Services as Commission Member III of the National Labor Relations Commission
x-----------------------x
A.M. No. 12-9-5-SC
Re: Computation of Longevity Pay of Court of Appeals Justice Angelita A. Gacutan
x-----------------------x
A.M. No. 13-02-07-SC
Re: Request of Court of Appeals Justice Remedios A. Salazar-Fernando that Her Services as MTC
Judge and as COMELEC Commissioner be considered as Part of Her Judicial Service and Included in
the computation/adjustment of Her longevity pay
RESOLUTION
BRION, J.:
Prefatory Statement
The Consolidated Cases

and the Affected Parties
For the Court’s consideration are the following: (1) letter-request dated August 22, 2012, of Court of Appeals
( CA) Associate Justice Remedios A. Salazar-Fernando;1 (2) letter-request dated September 11, 2012, of CA
Associate Justice Angelita A. Gacutan;2 and (3) motion for reconsideration3 dated November 7, 2012, of CA
Associate Justice Vicente S.E. Veloso.4
The petitioners are all Justices of the Court of Appeals. Justices Veloso and Fernando claim longevity pay for
services rendered within and outside the Judiciary as part of their compensation package . Justice Gacutan,
who has recently retired, claims deficiency payment of her longevity pay for the services she had rendered
before she joined the Judiciary, as well as a re-computation of her retirement pay to include the claimed
longevity pay.
Interest in the outcome of these consolidated cases goes beyond that of the petitioners; some incumbent
justices and judges, before joining the Judiciary, also served in the Executive Department and would like to see
these previous services credited in the computation of their longevity pay. Others who had also previously
served with the Executive Department currently enjoy longevity pay credit for their executive service; they
would like to see their mistakenly granted longevity pay credits maintained.
Thus, the Court’s decision on these consolidated cases, whether to find for or against the petitioners, will
likewise affect the interests of other judges and justices in similar circumstance, including several members of
this honorable court participating in these matters.
Antecedents
A. Letter-Request of Justice Salazar-Fernando
In her letter dated August 22, 2012,5 Justice Salazar-Fernando requested that her services as Judge of the
Municipal Trial Court ( MTC) of Sta. Rita, Pampanga, from February 15, 1983 to July 31, 1987, and as
Commissioner of the Commission on Elections ( COMELEC ), from February 14, 1992 to February 14, 1998,
be considered as part of her judicial services "as in the case of Hon. Bernar do P. Pardo, Retired Associate
Justice of the Supreme Court." Accordingly, Justice Salazar-Fernando requested that her longevity pay be
adjusted "from the current 10% to 20% of [her] basic salary effective May 25, 1999."
We referred this letter-request to Atty. Eden T. Candelaria, Chief of the Office of Administrative Services
( OAS ), for study and recommendation.
In her February 18, 2013 Memorandum,6 Atty. Candelaria recommended that Justice Salazar-Fernando’s
services as MTC Judge be credited as judicial service that can be added to her present longevity pay. Atty.
Candelaria, however, recommended the denial of Justice Salazar-Fernando’srequest that her services at the
COMELEC be also credited for her present longevity pay. Nonetheless, she recommended that Justice
Salazar-Fernando’s services in the COMELEC be included in the computation of her longevity pay upon
retirement "as in the case of Justice Pardo."
B. Letter-Request of Justice Gacutan
In her letter7 dated September 11, 2012, Justice Gacutan requested that: (a) her services as Commissioner IV
of the National Labor Relations Commission (NLRC) , from March 3, 1998 to November5, 2009, be credited as
judicial service for purposes of retirement; (b) she be given a longevity pay equivalent to 10% of her basic
salary; and (c) an adjustment of her salary, allowances and benefits be made from the time she assumed as
CA Justice on November 6, 2009. In the Court’s Resolution8 of November 13, 2012, we required the Fiscal
Management and Budget Office (FMBO ) to comment onJustice Gacutan’s letter. In her Comment of January
4, 2013, Atty. Corazon G. Ferrer-Flores, Deputy Clerk of Court and Chief of Office of the FMBO, recommended
that: (1) Justice Gacutan’s request for the crediting of her services as Commissioner IV of the NLRC as judicial
service be granted, but only for purposes of her retirement benefits, to take effect on her compulsory retirement
on December 3, 2013;and (2) Justice Gacutan’s request that her salary and allowances be adjusted retroactive
from her assumption of office in the CA on November 6, 2009, be denied.9
C. Motion for Reconsideration of Justice Veloso
In his November 7, 2012 motion for reconsideration,10 Justice Veloso assailed the Court’s October 23, 2012
Resolution11 that denied his request for the crediting of his services as NLRC Commissioner as judicial service
for purposes of adjusting his salary and benefits, specifically his longevity pay.
Justice Veloso claimed that Republic Act No. (RA) 9347 which amended Article 216 of the Labor Code should
be applied retroactively since it is a curative statute. He maintained under this view that he already had the
rank of a CA Justice as NLRC Commissioner before he was appointed to the appellate court on February 4,
2004.
We referred Justice Veloso’s motion for reconsideration to the FMBO for report and recommendation in our
Resolution of November 27, 2012.12
In her Report and Recommendation dated February 15, 2013,13 Atty. Ferrer-Flores recommended that Justice
Veloso’s motion for reconsideration be denied since the points he raised were a rehash of his arguments in his
July 30, 2012 letter-request.14
Our Rulings
I. Letter of Justice Salazar-Fernando in A.M. No. 13-02-07-SC
a. Services as MTC Judge
We grant the request of Justice Salazar-Fernando to credit as judicial service her previous services as MTC
Judge of Sta. Rita, Pampanga, as judicial service in the computation of her longevity pay.
Section 42 of Batas Pambansa Bilang ( B.P. Blg.) 129 provides:
Section 42. Longevity pay. – A monthly longevity pay equivalent to 5% of the monthly basic pay shall be paid to
the Justices and Judges of the courts herein created for each five years of continuous, efficient, and
meritorious service rendered in the judiciary; Provided, That in no case shall the total salary of each Justice or
Judge concerned, after this longevity pay is added, exceed the salary of the Justice or Judge next in rank.
[Italics supplied; emphasis and underscoring ours]
We find it undisputed that Justice Salazar-Fernando served as MTC Judge from February 15, 1983 to July 31,
1987. This service constitutes continuous, efficient, and meritorious service rendered in the Judiciary and,
hence, should be included in the computation of her longevity pay.
b. Service as COMELEC Commissioner
We deny, however, the inclusion of Justice Salazar-Fernando’s request to credit her services as COMELEC
Commissioner, from February 14, 1992 to February 14, 1998, as judicial service for longevity pay purposes.
The only service recognized for purposes of longevity pay under Section 42 of B.P. Blg. 129 is service in the
Judiciary, not service in any other branch of government. The CO MELEC is an agency independent of the
Judiciary; hence, service in this agency cannot be considered as service rendered in the Judiciary.
We find Justice Salazar-Fernando’s invocation of the case of Justice Pardo, to support her claim to longevity
pay, misplaced.
b.1. Our Pardo Ruling
In In Re: Request of Justice Bernardo P. Pardo for Adjustment of His Longevity Pay,15 we held that the
inclusion of Justice Pardo’s service in the COMELEC in the computation of his longevity pay upon his
retirement was predicated on the factual circumstances peculiar to him: he was an incumbent CA Justice when
he was appointed COMELEC Chairman, and was appointed to the Supreme Court after his service with the
COMELEC, without any interruption in his service .
The Court ― based on its reading of Section 3 of B.P. Blg. 12916 ― did not consider his intervening service in
the COMELEC, an office outside the Judiciary, as a disruption of his service in the Judiciary.
Notably, the Court in In Re: Justice Pardo liberally interpreted the phrase "the Court" in Section 3 of BP 129 to
mean the entire judiciary, not just the Court of Appeals. The provision reads:
Any member who is reappointed to the Court after rendering service in any other position in the government
shall retain precedence to which he was entitled under his original appointment, and his service in the Court
shall, for all intents and purposes , be considered as continuous and uninterrupted. (emphases supplied)
This provision was an amendment to Section 3 of BP 129 which, as originally worded, referred only to the
organization of the CA, the appointment process of its justices, and the means by which seniority of rank is
determined among the CA justices. Executive Order No. 33 added this phrase, and hence Section 3 now reads
as:
Sec. 3. Organization. There is hereby created a Court of Appeals which shall consist of a Presiding Justice and
fifty Associate Justices who shall be appointed by the President of the Philippines. The Presiding Justice shall
be so designated in hi s appointment, and the Associate Justice shall have precedence according to the dates
of their respective appointments, or when the appointments of two or more of them shall bear the same date,
according to the order in which their appointments were issued by the President. Any member w ho is
reappointed to the Court after rendering in any other position in the government shall retain the precedence to
which he was entitled under his original appointment, and his service in the Court shall, for all intents and
purposes, be considered as continuous and uninterrupted.
Thus, had the Court given a more literal interpretation of the phrase added by EO No. 33,then it would have
interpreted its application to refer to an incumbent CA justice only. The phrase, after all, had been added to
Section 3 of BP 129, which referred to the organization of the CA. Following this interpretation, Justice Pardo’s
service in the COMELEC would not have been appreciated in determining his longevity pay, as he was
reappointed not to the CA, but to the Supreme Court.
Instead, the Court, taking a more liberal approach, interpreted the phrase "the Court" to mean the entire
judiciary. It noted that the additional phrase in Section 3 used the generic word "Court" instead of Court of
Appeals, and that to apply the stricter application of interpreting "Court" to mean "Court of Appeals" would "lead
to absurdity, contradiction, injustice, or would defeat the clear purpose of the lawmakers."
Thus, following this more liberal approach, Justice Pardo’s one-time service outside of the judiciary was
considered part of his service in the judiciary for purposes of determining hi s longevity pay. The same may be
applied, for instance, to a trial court judge who rendered service outside the judiciary and then returned to
being a member of the bench.
Thus, the Court’s ruling in In Re: Justice Pardo is authority for expanding EO No. 33’s amendment to Section 3
of BP 129 to all members of the judiciary.
b.2. The liberal Pardo ruling cannot and should not be extended to allow members of the judiciary to
leave and return more than once, without interrupting the continuity of their service.
The next question to be asked, then, refers to the frequency by which members of the judiciary may be able to
serve in other branches of government without breaking their ‘continuo us and uninterrupted’ service. Did the
ruling in Justice Pardo’s case allow members of the judiciary to leave for other branches of government
numerous times, and still maintain continuous and uninterrupted service in the judiciary? The answer to this
question is a resounding no.
A critical aspect of Justice Pardo’s case was the absence of any gap in his service from the time he was
appointed as Caloocan City Judge in 1974, until he retired as an Associate Justice of the Supreme Court in
2002. He occupied the positions of District Judge, Court of First Instance of Rizal, Branch 34, Caloocan City,
from May 3, 1974 to January 17, 1983; Regional Trial Court (RTC), Branch 43, Manila, from January 18, 1983
to March 29, 1993; Associate Justice of the CA, from March 30, 1993 to February 16,
1995; Chairman, COMELEC, from February 17, 1995 to October 6, 1998; and Associate Justice of the
Supreme Court, from October 7, 1998 to February 10, 2002.
In these lights, Justice Pardo’s case has nothing to offer by way of jurisprudential precedent in terms of
determining whether Section 3 of BP 129 allows judges and justices to leave the judiciary several times without
breaking their continuous service. There was no occasion to rule on this issue, as Justice Pardo left the
judiciary only once, to serve in the COMELEC.
Proceeding from this conclusion, the next level of inquiry leads us to examine whether Section 3 of BP 129
allows multiple breaks in judicial office and considers these breaks as part of a continuous and uninterrupted
judicial service.
The amendment to Section 3, as worded and interpreted in In Re: Justice Pardo , refers to the reappointment
of a member of the judiciary after serving in another branch of government. The judge shall retain the
precedence to which he was entitled under his original appointment, and his judicial service shall be
considered uninterrupted.
This service outside the judiciary, however, should only occur once, as in Justice Pardo’s case. Section 3
refers to an original appointment , which is the first appointment by which a lawyer becomes a member of the
judiciary. As he progresses in the judiciary ― whether by staying in his original post or by being appointed in
other posts ― he acquires seniority, which is especially applicable in determining his retirement and longevity
pay. Once he leaves the judiciary, however, his original appointment is cut off; hence, Section 3 can only refer
to the judge’s return to the judiciary as a "reappointment." He needs to get re-appointed back to the judiciary,
as he is no longer part of it.
Section 3 works to bridge the gap between the time the judge left his original appointment and his
reappointment to the judiciary, provided the gap in service was rendered in another branch of government.
Once reappointed to the judiciary, however, he can no longer avail of Section 3, as Section 3 speaks of an
original appointment. A second reappointment, after another service in a different government agency, would
be succeeding the first reappointment, and not the original appointment. Section 3 operates to bridge an
original appointment with a reappointment, and not to connect a reappointment with a second appointment.
Had the latter interpretation been the intent behind the law, then it should and would have made this situation
clearer.
Further, the application of Section 3 appears to be limited to service in a single position in government outside
of the judiciary. Section 3 speaks of "any other position in the government," and thus uses a singular noun.
After this single service, the judge or justice invoking the application of Section 3 must have returned to the
judiciary in order for his service to be deemed uninterrupted.
Additionally, it must not be lost on us that we have already given Section 3 a liberal interpretation in In Re:
Justice Pardo. To top this exercise of liberality with another liberal interpretation of the same provision, when
the law is clear regarding its application, would amount to judicial legislation that furthers the interests within
our ranks.
To recapitulate, Section 3 applies to any judge or justice, who left the judiciary, served in a single non-judicial
governmental post, and returned to the judiciary. This was what happened in the case of Justice Pardo, when
after a long and continuous service in the judiciary, he left to serve in the COMELEC and from there was
subsequently appointed to the Supreme Court.
b.3. Justice Fernando is not entitled to her request even under the liberal Pardo ruling.
Justice Salazar-Fernando effectively asks us in her present case to give her the benefit of our Pardo ruling
although the attendant facts of her case differ from those of Justice Pardo’s and do not approximate the factual
situation that Section 3 requires.
In the first place, her record shows that her services in between her judicial services were not continuous and
uninterrupted.
We find that after Justice Salazar-Fernando’s stint as MTC Judge in July 1987, she was named Chairman of
the Land Transportation Franchising and Regulatory Board (LTFRB) where she served from August 1987 to
February 13, 1992. During this period, she concurrently held directorship posts at the Light Rail Transit
Authority (LRTA) and at the Office of Transport Cooperatives (OTC). In the later part of 1991,Justice Salazar-
Fernando held the position of Officer-in-Charge/Assistant Secretary of the Land Transportation Office.
It was only after Justice Salazar-Fernando’s stints at the LTFRB, LRTA, and OTC all non-judicial offices that
she was appointed as Commissioner of the COMELEC on February 14, 1992, and served in this capacity until
February 15, 1998. Three (3) days later, or on February 18, 1998, she started to serve as a consultant in the
COMELEC until October 6, 1998.
Parenthetically, her service as consultant is not a "position in government" that should be considered a part of
her government service as she did not occupy any specific position in government. Moreover, it was only five
(5) months after her COMELEC consultancy, or on March 25, 1999, that Justice Salazar-Fernando was
appointed as Associate Justice of the CA. Thus, significant gaps in her judicial service intervened so that her
situation did not comply with the requirement in Section 3 that only a single non-judicial position should
intervene in her judicial service record.
Reduced to the bare essentials, the issue for us is whether we should apply with liberality a ruling that had
already been very liberally interpreted by this Court, under facts that do not entitle Justice Fernando to
recognition of continuous service under the requirements of Section 3.
Our brief and direct answer is that we cannot and must not allow the crediting of Justice Salazar Fernando’ s
COMELEC service for longevity pay purposes. Acceding to her request will constitute an outright judicial
legislation that the Court cannot undertake under the Constitution. As earlier noted, Justice Salazar-Fernando’s
de tails do not at all approximate the factual circumstances Section 3 of BP 129 that speaks of, nor the factual
situation in In Re: Justice Pardo.
If we had been liberal in the past and this liberal ruling is now cited, we should, at the very least, not go beyond
the facts under which our past liberality had been extended. If we further read liberally a Court ruling that only
came to being because of past liberality, we stand to hear a re-echo of the charge that this Court selectively
applies its liberality in favor of its own . (In fact, a favorable ruling in these consolidated cases may already
raise eyebrows and questions as the Court will be ruling on matters that will directly affect some of its
participating Members .)
To sum up, Justice Salazar-Fernando’s services as COMELEC Commissioner cannot be included in the
computation of her longevity pay, now or upon her retirement .
II. Letter-Request of Justice Gacutan in A.M. No. 12-9-5-SC
a. Longevity Pay for Services as NLRC Commissioner
We deny Justice Gacutan’s request that her past services in the NLRC be recognized for purposes of her
longevity pay. She served as a Commissioner IV of the NLRC from March 3, 1998 to November 5, 2009, or for
a period of eleven years and eight months.
Section 42 of B.P. Blg. 129 is clear and explicit: a judge or justice should have rendered five years of
continuous, efficient and meritorious service in the Judiciary in order to qualify for a monthly longevity pay
equivalent to 5% of the monthly basic pay.
We point out that the NLRC is an agency attached to the Department of Labor and Employment – an adjunct of
the Executive Department – albeit for policy and program coordination only. Under the circumstances, Justice
Gacutan’s past service as NLRC Commissioner cannot be credited as judicial service for longevity pay
purposes since she did not render such service while with the Judiciary.
b. NLRC Services Considered in Retirement Pay
Nonetheless, Justice Gacutan’s service as NLRC Commissioner is creditable as part of overall government
service for retirement purposes under RA 910, as amended. Section 1 of this law provides:
Section 1. When a Justice of the Supreme Court or of the Court of Appeals who has rendered at least twenty
years' service either in the judiciary or in any other branch of the Government, or in both, (a) retires for having
attained the age of seventy y ears, or (b) resigns by reason of his incapacity to discharge the duties of his
office, he shall receive during the residue of his natural life, in the manner hereinafter provided, the salary
which he was receiving at the time of his retirement or resignation. And when a Justice of the Supreme Court
or of the Court of Appeals has attained the age of fifty-seven years and has rendered at least twenty years'
service in the Government, ten or more of which have been continuously rendered as such Justice or as judge
of a court of record, he shall be likewise entitled to retire and receive during the residue of his natural life, in the
manner also hereinafter prescribed, the salary which he was then receiving. It is a condition of the pension
provided for herein that no retiring Justice during the time that he is receiving said pension shall appear as
counsel before any court in any civil case wherein the Government or any subdivision or instrumentality thereof
is the adverse party, or in any criminal case wherein an officer or employee of the Government is accused of
an offense committed in relation to his office, or collect any fee for his appearance in any administrative
proceedings to maintain an interest adverse to the Government, insular, provincial or municipal, or to any of its
legally constituted officers.
Considering the express wordings of RA 910, which include service "in all other branches of the Government"
as creditable service in the computation of the retirement benefits of a justice or judge, Justice Gacutan’s
service as NL RC Commissioner should be credited as part of her government service for retirement purposes
under RA 910, as amended.
III. Motion for Reconsideration of Justice Veloso in A.M. No. 12-8-07-CA
a. Background.
The chairman and members of the NLRC were entitled to receive an annual salary at least equivalent to the
allowances and benefits of the Presiding Justice and Associate Justices of the CA, respectively, prior to the
amendment of Article 216 of the Labor Code by RA 9347 .
Under RA 9347 (which took effect on August 26, 2006),17 NLRC commissioners were given the equivalent rank
of a CA Justice. The Labor Code, as now amended by Section 4 of RA 9347, reads:
Article 216. Salaries, Benefits and Emoluments. The Chairman and members of the Commission shall have
the same rank , receive an annual salary equivalent to, and be entitled to the same allowances, retirement and
benefits as those of the Presiding and Associate Justices of the Court of Appeals, respectively. [italics supplied,
emphasis ours]
In his present motion, Justice Veloso claims that RA 9347 should be given a retroactive application. With the
equivalent rank of a CA Justice from the time RA 9347 was amended, his service as NLRC Commissioner
should be considered as judicial service for purposes of his longevity pay.
b. Our ruling and the reasons therefore
b.1. RA 9347 does not provide for retroactivity.
We disagree with Justice Veloso’s position and thus deny his motion.
First, nothing in the language of RA 9347 expressly indicates the intention to give it retroactive effect. We
emphasize that statutes, as a rule, apply prospectively, unless the legislative intention to give them
retrospective effect is expressly declared or is necessarily implied from the language used.18 In "case of doubt,
the doubt must be resolved against the retroactive effect."19
Nor is retroactivity discernible, even by implication, from the provisions of RA 9347. It is not implied from the
law’s legislative intent, nor from the deliberations in Senate Bill No. 2035 (which became RA 9347).20
In Re: Request of Retired Deputy Court Administrator Bernardo T. Ponferrada for Automatic Adjustment of His
Retirement Benefits to Include Special Allowance Under R.A. 9227,21 the Court refused to extend the benefits
provided by RA 9227 to official s of the Judiciary who retired prior to the passage of this law. RA 9227 granted
a special allowance to justices, judges, and all other positions in the Judiciary with the equivalent rank of
justices of the CA or judges of the RTC. Since the position of Deputy Court Administrator (DCA) carries the
same rank as an Associate Justice of the CA,22 retired DCA Ponferrada asked for the inclusion of the RA 9227
special allowance in his retirement pay.
The Court denied the request, noting that RA 9227 did not expressly provide for retroactivity so that those who
had retired at the time of its enactment would be covered. Although the grant was extended to retired SC and
CA justices, this was justified under Section 3-A of RA 910, as amended, which states:
SEC. 3-A. In case the salary of Justices of the Supreme Court or of the Court Appeals is increased or
decreased, salary shall, for the purpose of this Act, be deemed to be the salary or the retirement pension which
a Justice x x x who retired was receiving at the time of his cessation in the office: Provided, That any benefits
that have already accrued prior to such increase or decrease shall not be affected thereby.23 [underscore ours]
According to the Court, parity in rank and salary does not automatically mean parity in retirement benefits
under Section 3-A of RA 910. Notably, the automatic adjustment of retirement benefits was expressly extended
by RA 910, as amended, but only to Justices of the SC and the CA, not to judicial officials with the equivalent
rank. Additionally, since he retired prior to the passage of RA 9227, DCA Ponferrada could not even invoke the
automatic adjustment of his retirement pay under Section 3-A of RA No. 910, as amended, to support his
request.24
In the same way, RA 9347 was en acted into law only on July 27, 2006. Justice Veloso had, by then (on
February 4, 2004) left his post as NLRC Commissioner to assume the position of Associate Justice of the
Court of Appeals. In the absence of any clear intent to give RA 9347 any retroactive effect, Justice Veloso
cannot validly claim that he held the rank of a CA justice during his stint as NLRC Commissioner from 1989 to
2004.
b.2. RA 9347 is not a curative statute.
"A curative statute is enacted to cure defects in a prior law or to validate legal proceedings, instruments or acts
of public authorities[,] which would otherwise be void for want of conformity with certain existing legal
requirements."25Simply put, curative laws are enacted to validate acts done that otherwise would be invalid
under existing laws.
RA 9347 is not a curative statute since it was not intended to supply deficiencies, abridge superfluities in
existing laws, or curb evils; the insertion of the word "rank" in Article 216 was merely to emphasize the increase
in salaries and benefits of the NLRC Commissioners and labor arbiters.
b.3. Grant of Equivalent Rank is not Service in the Judiciary
At any rate, even if we recognize retroactivity as requested, the conferment of the rank of a CA Justice to
Justice Veloso during his tenure as NLRC Commissioner would not entitle him to longevity pay.
Section 42 of B.P. Blg. 129 is clear: a judge or justice shall be paid a monthly longevity pay equivalent to 5% of
the monthly basic pay for each five years of continuous, efficient, and meritorious service rendered in the
Judiciary. Service in the NLRC, even with the rank of a CA Justice, is not service with the Judiciary for
purposes of longevity pay. Justice Veloso’s service in the NLRC, however, m ay be credited as part of his
government service for retirement purposes under RA 910, as in the case of Justice Gacutan .
IV. General Discussions
With each of the consolidated petitions directly ruled upon, the following discussions are submitted to expound
on the conclusions reached and to generally comment on the issues the Dissents raised.
At the core of the issues raised is the question: should the past service of incumbent justices and judges,
rendered at the Executive Department, be recognized under Section 42 of BP 129 ( the longevity pay provision
) on the ground that their previous executive positions now carry the rank, salary, and benefits of their
counterparts in the Judiciary?
The law governing this issue is of course the longevity pay provision, heretofore quoted,26 whose salient points
are summarized below:
1. The longevity pay is a monthly pay equivalent to 5% of monthly basic pay;
2. Recipients are the Justices and Judges of courts;
3. For each five years of continuous, efficient and meritorious service;
4. The service is to be rendered in the Judiciary;
5. In no case shall the total salary of each Justice or Judge, after his longevity pay is added, exceed the salary
of the Justice or Judge next in rank.
What would otherwise be a simple stand-alone provision is complicated by subsequent laws that grant the
same ranks, salaries and benefits.
- "as those of" their counterpart judge or justice (for the National Prosecution Service), or
- "as those of the Presiding Justice and Associate Justices of the Court of Appeals (for the National Labor
Relations Commission), and
- the [ "rank, prerogatives, salaries, allowances, benefits and privileges"] as their counterpart Justice or Judge
(for the Office of the Solicitor General).
These new levels of rank and salary are essentially what the present petitioners and the incumbent justices
and judges cite as basis for the grant or increase of their longevity pay.
Another complicating factor involves the past rulings of this Court where past executive service had been
recognized, not only for retirement pay purposes, but for longevity pay purposes upon retirement. Interestingly,
no in-depth look appears to have been made in these past rulings, although their results cannot be in doubt ―
the Court recognized past executive services for longevity pay purposes.
Interestingly, the Dissents, led by Justice De Castro, take a multi-pronged critique of the ponencia generally
chastising it for being overly strict in its reading of Section 42.
Among others, she posits that the ponencia disregards long established rulings of the Court on longevity pay
without a clear finding of the legal error made, and disregards as well the liberal interpretation the Court has
applied in these rulings; that the ponencia disregards too the intent of the relevant laws (referring to the
subsequent laws that grants ranks, salaries and benefits similar to those of their counterparts in the Judiciary),
the legal presumption of legislative awareness, and consideration of prior laws and jurisprudence in enacting a
statute; and claims that the contemporaneous construction given by the Department of Justice and other
Executive branch officers, which disc loses a similar treatment of the longevity pay provision of Section 42, de
serves the court’s respect. Last but not the least, Justice De Castro analyzes Section 42 and concludes that
longevity pay is not a mere benefit but is a component of the salary that should not be withheld from executive
officers with the same rank, salary and benefits as their counterparts in the Judiciary.
For his part, Justice Velasco essentially joins the Dissent of Justice De Castro and questions the ponencia’s
proposal to "freeze" the longevity pay grants for justices and judges who have been credited with their past
service in the Executive Department. He posits too that "what matters is their receiving, for purposes of
computing longevity pay, the salary of a Justice of the CA at the time they served as NLRC Commissioners." If
this is the case, Justice Veloso claims they should be credited with their service with the NLRC for purposes of
their longevity pay.
Faced with these complications and dissents, the Court should not forget that our duty, first and foremost, is to
correctly interpret the law as written, not to stick to our past rulings at all costs nor to consider our personal
interests. In doing this, we must also be reminded that at the center of the dispute is Section 42 of BP 129 –
the provision on longevity pay that we must consider with a fresh eye.
The consolidated cases, too, do not embody claims by executive officers against their own Department for the
enforcement of what the law involving their Department provides. These cases involve claims by CA justices –
members of the Judiciary – who look up to laws involving the Executive Department to secure, maintain or
increase the longevity pay that provides benefit for judges and justices. Our primary focus, however, must be
the interpretation of our own law ― BP 129 and its Section 42.
A. Statutory Construction & Interpretation Perspectives
a. First rule of statutory construction: the plain meaning rule.
The primary rule in addressing any problem relating to the understanding or interpretation of a law (in this
case, the provision granting longevity pay) is to examine the law itself to see what it plainly says. This is the
plain meaning rule of statutory construction.27
The first aspect that offers itself in the examination of the law is its title, which gives us a direct indicator of the
exact subject matter of the law. In the present cases, the law under which the disputed longevity provision can
be found is B.P. Blg. 129, An Act Reorganizing the Judiciary, Appropriating Funds Therefore and For Other
Purposes (simplified as BP 129 or the Judiciary Reorganization Act of 1980).
This title alone already suggests that its provisions specifically relate to members of the judiciary, unless an
express contrary intent is made by the legislature. No such exception clause is evident under the terms of BP
129 or in any of the other related laws (specifically, in R. A. 9347, 9417, and 10071) discussed in this
ponencia .
As discussed more extensively below, these other general laws do not specifically mention at all the longevity
provision under BP 129, a specific grant made only to the judges and justices in the Judiciary.
Section 42 of this law has heretofore been quoted, but for convenience is again quoted below –
Section 42. Longevity pay . – A monthly longevity pay equivalent to 5% of the monthly basic pay shall be paid
to the Justices and Judges of the courts herein created for each five years of continuous, efficient, and
meritorious service rendered in the judiciary ; Provided , That in no case shall the total salary of each Justice or
Judge concerned, after this longevity pay is added, exceed the salary of the Justice or Judge next in rank.
[italics supplied; emphasis and underscore ours ]
As written, the language and terms of this provision are very clear and unequivocal: longevity pay is granted to
a judge or justice (and to none other) who has rendered five years of continuous, efficient and meritorious
service in the Judiciary. The granted monthly longevity pay is equivalent to 5% of the monthly basic pay.
The plain reading of Section 42 shows that longevity pay is not available even to a judicial officer who is not a
judge or justice. It is likewise not available, for greater reason, to an officer in the Executive simply because he
or she is not serving as a judge or justice. It cannot also be available t o a judge or justice for past services he
or she did not render within the Judiciary as services rendered outside the Judiciary for purposes of longevity
pay is not contemplated by law.
Significantly, the Court has had occasion to speak about the purpose of longevity pay. In In Re: Request of
Justice Bernardo P. Pardo for Adjustment of His Longevity Pay,28 the Court categorically declared that the
purpose of the law in granting longevity pay to judges and justices is to recompense them for each five y ears
of continuous, efficient, and meritorious service rendered in the Judiciary; it is the long service in the Judiciary -
from the lowest to the highest court of the land – and not in any other branch of government, that is rewarded,
29
In the case of the judge or justice now asking for the tacking of his/her past executive service, the reason for
the denial is simple and needs no intricate or complicated exercise in interpretation: these past services were
undertaken outside the Judiciary and are not the services the law contemplates. The tacking, to put it bluntly,
violates the clear purpose and wording of Section 42 of BP 129.
To look at Section 42 from another perspective, if indeed (as some would argue) the intent is to grant executive
officers longevity pay pursuant to their respective grants of benefits similar to that provided under Section 42 of
BP 129, this presumed grant should be understood to be limited to the executive officer’s continued, efficient
and meritorious service in the Executive Department, to be given while the executive officer is still with that
department.
When the public officer with equivalent rank, salary and benefits transfers to the Judiciary , the longevity pay to
which he may have been entitled under the law applicable to his previous Executive Department position, and
which he may have been receiving because of his continued service in that department, will simply have to be
disregarded and discontinued.
At the point of transfer, Section 42 of BP 129 will now apply and operate, and will require five (5) years of
continued and efficient service in the Judiciary before it can start to be earned. This application may sound
hard and illiberal, but this is the logical consequence of the combined effect of the Judiciary’s BP 129 longevity
provision and the laws granting parity to benefits applicable to the Judiciary.
To reiterate for emphasis, for a transferring public official, now a new justice or judge, to be entitled to longevity
pay under the terms of Section 42, he must first render continued, efficient and meritorious service in the
Judiciary for at least five years; his prior continued service in his previous department will not and should not
be counted.
b. The general laws that the Dissents cite cannot prevail over a specific law.
General laws (such as Republic Act Nos. [RA] 9347, 9417, and 10071) that generally grant the same ranks,
salaries and benefits to public officers in the Executive Department as those of their specified counterparts in
the Judiciary, cannot prevail over a special law such as BP 129 that specifically grants longevity pay solely to
justices and judges who have rendered five (5) years of continuous, efficient, and meritorious service rendered
in the Judiciary.
A basic principle of statutory construction is that a special law prevails over a general law.30 A later enactment
like RA 9347 and RA 10071 cannot override BP 129 because the latter, as a special law, must prevail
regardless of the dates of the enactment of these other laws.31
As we held in Hon. Bagatsing v. Judge Ramirez,32 a general provision must give way to a particular provision.
As a special provision on the grant of longevity pay, Section 42 of BP 129 governs and is controlling; to hold
otherwise, as the dissent suggests, is to violate its clear mandate.
Following the rule on general and special laws, the general laws granting the same salaries and benefits
cannot apply to the longevity pay provision that, by its specific and express terms, is solely for the benefit of
judges and justices who have shown loyal service to the Judiciary; it is not for those who have been granted
similar ranks, salaries and benefits as those of their counterpart judges and justices. That they cannot be
beneficiaries of longevity pay is clinched by its purpose – the reward is intended for those with loyal service to
the Judiciary.
c. Is there room for liberality in reading and interpreting Section 42?
As a general rule and contrary to the Dissent’s view, no room or occasion exists for any liberal construction or
interpretation; only the application of the letter of the law is required by basic statutory construction principles.
We should not forget that liberality is not a magic wand that can ward off the clear terms and import of express
legal provisions; it has a place only when, between two positions that the law can both accommodate, the
Court chooses the more expansive or more generous option. It has no place where no choice is available at all
because the terms of the law are clear and do not at all leave room for discretion.
In terms of the longevity pay’s purpose, liberality has no place where service is not to the Judiciary, as the
element of loyalty – the virtue that longevity pay rewards – is not at all present.
We cannot overemphasize too that the policy of liberal construction cannot and should not be to the point of
engaging in judicial legislation – an act that the Constitution absolutely forbids this Court to do. We may not, in
the guise of interpretation, enlarge the scope of a statute or include, under its terms, situations that were not
provided nor intended by the lawmakers. We cannot rewrite the law to conform to what we think should be the
law.
In the present case, where the law is clear, we should likewise be clear and decisive in its application lest we
be accused of favoritism or accommodating former colleagues, or indirectly, ourselves, who will all inevitably
retire from our judicial posts.
d. Administrative construction is merely advisory and is not binding upon the courts.
We take exception to the Dissent’s invocation of the doctrine of contemporaneous construction to support its
expansive reading of RA 9347 in relation with Section 42 of BP 129.
The Dissent conveniently fails to mention that contemporaneous constructions of administrative or executive
agencies are merely at best advisory and not binding on the courts, for by the Constitution and the law, the
courts are given the task of finally determining what the law means.33
We do so under our authority to state what the law is34 and deference to an agency’s statutory interpretation
should be withheld whenever it conflicts with the language of the statute, as in the present case.
In Peralta v. Civil Service Commission,35 the Court had occasion to state and held:
Administrative construction, if we may repeat, is not necessarily binding upon the courts. Action of an
administrative agency may be disturbed or set aside by the judicial department if there is an error of law, or
abuse of power or lack of jurisdiction or grave abuse of discretion clearly conflicting with either the letter or the
spirit of a legislative enactment.
Thus, while the Executive possesses discretion in the implementation of laws, we should not forget the reason
for the Judiciary’s existence. We are the interpreters of the law and the Constitution, not the Executive, and
when a legal error exists, we must step in and intervene, however long and hard the Executive’s previous
implementation of the law had been.
e. The question of Judicial Legislation
Judicial legislation, in simplest terms, happens when the Court adds to what the law provides and does so in
the guise of interpretation, as the present dissents now want to do by seeking to tack and to credit, for
longevity pay purposes, the past services that justices and judges rendered in the Executive Department.
In fact, in their discussions, the Dissents take the view that the ponencia has engaged in judicial legislation
because it restricts the concept of salary merely to the "basic pay."
This Resolution does, in fact, reflect the views imputed to it and it has not been shy or hesitant from the very
start in taking this position. But rather than being narrow and illiberal in doing this, we believe that our position
hews to the letter of the law so that our stance cannot be the basis for the charge of judicial legislation.
Judicial legislation in fact transpires when the Court reads into the law an interpretation that the four corners of
that law cannot b ear. This expansive interpretation – i.e., that the term "salary" under Section 42 includes
longevity pay so that equivalency of "salary" translates to the mandatory recognition of longevity pay – is
unfortunately what the dissents espouse, driven perhaps by thoughts of what the law ought to be.
What "ought to be" as a matter of policy is not within the jurisdiction of this Court to decide upon. The Court
eloquently spoke in Canet v. Mayor Decena about this judicial limit, albeit in the context of discussing the
maxim expression unius est exclusio alterius (literally, what is expressed puts an end to what is implied). The
Court said:36
In other words, it is a basic precept of statutory construction that the express mention of one person, thing, act,
or consequence excludes all others, as expressed in the oft-repeated maxim expressio unius est exlusio
alterius. Elsewise stated, expressium facit cessare tacitum – what is expressed puts an end to what is implied.
The rule proceeds from the premise that the legislative body would not have made specific enumerations in a
statute, if it had the intention not to restrict its meaning and confine its terms to those expressly mentioned.
Even on the assumption that there is in fact a legislative gap caused by such an omission, neither could the
Court presume otherwise and supply the details thereof, because a legislative lacuna cannot be filled by
judicial fiat. Indeed, courts may not, in the guise of interpretation, enlarge the scope of a statute and include
therein situations not provided nor intended by the lawmakers. An omission at the time of the enactment,
whether careless or calculated, cannot be judicially supplied however after later wisdom may recommend the
inclusion. Courts are not authorized to insert into the law what they think should be in it or to supply what they
think the legislature would have supplied if its attention has been called to the omission.
Courts should not, by construction, revise even the most arbitrary and unfair action of the legislature, nor
rewrite the law to conform with what they think should be the law. Nor may they interpret into the law a
requirement which the law does not prescribe. Where a statute contains no limitations in its operation or scope,
courts should not engraft any. And where a provision of law expressly limits its application to certain
transactions, it cannot be extended to other transactions by interpretation. To do any of such things would be to
do violence to the language of the law and to invade the legislative sphere. [emphases ours]
Applied to the present consolidated cases, we cannot go beyond the terms of Section 42 by expanding its
terms to what it does not include: when the law speaks of service "in the Judiciary," it means what it says and
cannot include service outside the Judiciary. To relate this to the statutory construction rule discussed above
give n the express and clear terms of the law, the basic rule to apply is: "legislative intent is to be determined
from the language employed, and where there is no ambiguity in the words, there is no room for
construction."37
B. The Grant of Rank, Benefits and their Implications
a. Judicial Rank and Executive Rank.
The grant of a "rank" equivalent to (or even "the same as" ) "those of the" grantee’s counterpart judge or justice
is a matter that has not been the subject of extensive jurisprudential c overage. Hence, the subject of this
Resolution proceeds on a path that so far remains untrodden. The novelty of the issue posed need not deter us
as the matters before us call for resolution and should be written about if only to serve as guides for the future.
The Judiciary recognizes the ranks that the law accords to judges and justices. These judicial ranks wholly
pertain to the Judiciary as an independent, separate and co-equal branch of government. Under our current
constitutional set-up, no legislative or executive grant, fiat or recognition of rank can make the grantee, who is
not a judge or justice, a judicial officer, without violating the constitutional principles of separation of powers
and independence of the Judiciary.
As a consequence, the grant of rank at the same level as the grantees’ counterpart judges or justices is not
and cannot be a conferment of "judicial rank" and does not thereby accord the grantees recognition as
members of the Judiciary. For incumbent judges and justices who had previous government service outside
the Judiciary , it follows that the grant of rank to them under their old executive positions does not render their
service in these previous positions equivalent to and creditable as judicial service, unless Congress by law
says otherwise and only for purposes of entitlement to salaries and benefits.
To be sure, Congress can create and recognize ranks outside of the Judiciary that are equivalent to the ranks it
has created for the Judiciary, but again, this recognition doe s not thereby create "judicial ranks" outside of the
Judiciary, nor constitute the grantees of these ranks as judges and justices. Technically, what Congress creates
or grants are executive ranks that are equivalent to judicial ranks.
Notably, even for those within the Judiciary itself, the recognition of "judicial rank" in favor of those who are not
justices or judges does not thereby make the grantee a justice or a judge who is entitled to this formal title; the
grantee may be entitled to the benefits of the rank but he/she remains an administrative official in the Judiciary,
separate and distinct from the justices and judges who directly exercise judicial power, singly or collegially.
b. Commonalities and Divergence of Terms and Conditions of Government Service.
The principle of separation of powers between the Executive, Legislative, and Judicial branches of government
ordains that each of these three (3) great branches of government has exclusive cognizance of, and is
supreme in matters falling within its own constitutionally allocated sphere.38
Each branch cannot invade the domain of the others.39 This principle presupposes mutual respect by and
between the Executive, Legislative, and Judicial departments and entitles them to be left alone to discharge
their assigned duties as they see fit.40
We generally draw attention to this constitutional principle to emphasize that while all officials in the three
branches of government are government officials, vast differences may exist in the terms and conditions of
their government service; these are ultimately traceable to the separation of power principle.
Government officials perform specifically assigned functions peculiar to their respective departments and these
functions justify their differing terms and conditions of government service. In the context of the present
consolidated cases, distinctions must necessarily exist between one who is appointed to the position of a judge
or justice, (which position carries law-defined salaries, benefits, and conditions specific to judges and justices),
and one who is appointed to an executive position with the equivalent rank, salary or benefits of a justice or
judge in the Judiciary.
The extent to which those with equivalent executive and judicial ranks have commonalities or diverge in their
salaries and benefits is a matter that the Constitution leaves, within limits, to the discretion of the Legislature as
a matter of policy. What is important to recognize is the legal reality that the divergence of salaries and benefits
across government, even among those with equivalent ranks, is not at all unusual because these positions
belong to different branches of government and undertake functions peculiar to their departments.
A convenient example to cite is the allowance benefit that members of the Office of the Solicitor General are
given as peculiarly their own – honoraria and allowances from client departments, agencies and
instrumentalities.41 Members of the Judiciary do not enjoy these same benefits.
On the part of the Judiciary, the disputed longevity pay also serves as a good example. By its terms, longevity
pay is peculiar to the Judiciary as discussed above. Significantly, in all the cited laws that grant similarity of
ranks, salaries, and benefits between executive officials and their counterparts in the Judiciary, no mention at
all is made of longevity pay and its enjoyment outside the Judiciary. Longevity pay, of course, is not unique as
a feature of judicial life that is wholly the Judiciary’s own; there are other benefits that the Judiciary enjoys – by
law, by rule or by practice – that are not replicated in the executive agencies, in the same manner that there
are benefits in executive agencies that the Judiciary does not share.
In this sense, it approximates the absurd to claim that the grant of the "same" benefits to executive officials
with the "same" rank should encompass all the benefits that the comparator judge or justice enjoys.
b.1. The Question of Fairness.
A tempting question to raise when comparisons are made across branches of government and when
equivalency of salaries and benefits comes into focus, is the essential fairness, or lack of it, that results or
should result.
The Judiciary, for example, may raise the point – if we are the comparators and all our benefits should be
enjoyed by the Solicitors, is there no resulting unfairness because no la w grants the Judiciary the same
privilege of enjoying the benefits that the Office of the Solicitor General enjoys?
To be sure, unfairness may factually result, but this is not a matter for the Judiciary to examine in the absence
of a case where this factual issue is raised and is relevant. Nor is there any indefensible inequality as a matter
of law viewed from the prism of the legal measuring standard ― the equal protection clause. Notably, the
Judiciary and the Executive Department belong to different branches of government whose roles and functions
in government differ as pointed out above. Thus, ground/s for distinctions may exist that render any seeming
unfairness not legally objectionable.
If the issue of unfairness will surface at all, this would transpire when the terms of the longevity provision under
BP 129 would be disregarded, i.e., if longevity pay would be recognized in favor of the NLRC, the prosecutors
and the solicitors under the terms of their respective laws, when longevity pay – by the express terms
fashioned out by Congress – should be granted only to those who have served continuous, efficient, and
meritorious service in the judiciary.
Similarly unfair would be the tacking of previous services outside of the Judiciary rendered by judges and
justices, incumbent or retired, for purposes of longevity pay under Section 42. Of course, the main issue in this
situation would be legality, but this situation, to our mind, is one that is both illegal and unfair. Unfairness
comes in because of the grant of what is not legally due.
D. The Salary and Longevity Pay
a. The Applicable Law on Salary
An examination of BP 129 shows that its Section 41 treats of "salaries" of judges, while Section 42 provides for
longevity pay.
Under Section 41, the "salaries" or compensation (and allowances) that judges shall receive shall be the
amount that the President may authorize following the guidelines set fort h in Letter of Implementation (LOI)
No. 93, pursuant to Presidential Decree (PD) No. 985, as amended by PD 1597.
PD 985, as amended by PD 1597, implemented a position classification and compensation standardization
scheme (Scheme) :
(1) under which positions are classified by occupational groups, series and classes according to the similarities
or differences in duties, responsibilities, and qualification requirements; and
(2) by which the rates of pay for each of the positions and employee groups/classes are determined according
to the salary and wage schedules fixed by the Decree to be uniformly app lied to all belonging to a particular
position.
Under Section 4 of PD 985, this position classification and compensation standardization scheme shall apply to
all positions in the national government, that under PD 1597’s amendment now includes the justices and
judges in the Judiciary.
Section 11 of PD 985 provides for the "Salary Schedule " under the compensation system for positions pa id on
annual or monthly basis. The Schedule consists of twenty-eight grades with each grade having eight
prescribed steps. Each grade represents a level of work difficulty and responsibility that distinguishes it from
the other grades in the Schedule. Each class of position in the Position Classification System is assigned a
"salary grade" and determines the position’s salary rate.42
Under the Scheme, every covered position receives a "salary" or compensation corresponding to the position’s
"salary grade" under the "Salary Schedule." Otherwise stated, all covered positions or employees belonging to
a particular "salary grade," regardless of the department, bureau, office, etc., to which they belong, shall
receive the same "salary rate," expressed as annual, in pesos, as fixed under the "Salary Schedule" (subject to
certain salary rate increments for each step within each salary grade). In short, a particular "salary grade"
equates to a specific, fixed "salary rate."
Prior to its amendment by PD 1597, Section 4 of PD 985 exempted from the position classification and
compensation standardization scheme the following positions or group of government officials and employees:
(1) elected officers and those whose compensation is fixed by the Constitution; (2) heads of executive
departments and officials of equivalent rank: (3) chiefs of diplomatic missions, ministers, and Foreign Service
officers; (4) Justices and Judges of the Judicial Department; (5) members of the armed forces; (6) heads and
assistant heads of GOCCs, including the senior management and technical positions; (7) heads of state
universities and colleges; (8) positions in the career executive service; and (9) provincial, city, municipal and
other local government officials and employees. The salaries or compensation and allowances of these
exempted positions are those to be authorized by the President.
Pursuant to PD 985’s mandate, then President Ferdinand E. Marcos issued Letter of Implementation (L OI 93)
adopting an integrated compensation scheme for positions in the Judiciary. In almost the same fashion as PD
985, Para graph 3.0 of LOI 93 enumerated the various positions in the Judicial Component of the Judiciary,
i.e., Justices and Judges of the Supreme Court, Court of Appeals, Sandiganbayan, Court of Tax Appeals, Court
of Agrarian Relations, the First and Second Level Courts, the Clerks of Court of the Supreme Court and Court
of Appeals, and the corresponding "salary rates" for each position, expressed as annual, in pesos.
With PD 1597’s amendment, those previously exempted positions, i.e., Justices and Judges of the Judicial
Department, are now included in the coverage of Section 4 of PD 985. PD 985, as amended by PD 1597, now
limits the exemptions to elected officers; to those whose compensation is fixed by the Constitution; and to local
government officials and employees.
Note that Section 11 of PD 985, as amended by PD 1597, and even Paragraph 3.0 of LOI 93, provided for
fixed "salary rates" for each "salary grade" expressed as annual, in pesos. As matters now stand, the "salary"
or compensation that an employee or a position in the government will receive is the prevailing "salary rate,"
fixed under the "Salary Schedule," that corresponds to the employee or position’s "salary grade."
The "salary rate" as expressed in annual fixed rates, based on the "salary grade" referred to under LOI 93
pursuant to PD 985, as amended by PD 1597 is the "salary" referred to in Section 41 of BP 129, i.e., an
amount or salary rate fixed as annual, in pesos, that is based on the recipient’s salary grading.
b. Longevity Pay under Section 42.
Section 42 of BP 129 provides for the payment and the manner of computing longevity pay, i.e., to be paid
monthly, based on the recipient’s monthly basic pay at the rate of 5% for each five years of continuous, efficient
and meritorious service rendered in the judiciary. Note that the amount of longevity pay to which a recipient
shall be entitled is not a fixed amount, in contrast with the "salary" under Section 41; it is a percentage of the
recipient’s monthly basic pay which, at the least, is equivalent to 5%.
Also, the payment of longevity pay is premised on a continued, efficient, and meritorious service: (1) in the
Judiciary; and (2) of at least five years. Long and continued service in the Judiciary is the basis and reason for
the payment of longevity pay; it rewards the loyal and efficient service of the recipient in the Judiciary.
From these perspectives, longevity pay is both a branch specific (i.e., to the judges and justices of the
Judiciary) and conditional (i.e., due only upon the fulfillment of certain conditions) grant. In negative terms, it is
not an absolute grant that is easily transferrable to other departments of government.
b.1. Salary and Longevity Pay compared.
In contrast with longevity pay, the "salary" under Section 41 entitles the official or employee to its receipt from
day one (or the first day of the first month) of his service. Its basis or reason for payment is the actual
performance of service or assigned duties, without regard to the months or years the recipient has been
rendering the service.
Note, too, that the service contemplated under Section 42 for entitlement to longevity pay is service in the
judiciary. This intent is clear not only from Section 42’s explicit use of the word "judiciary" to qualify "service,"
but also from the title of the statute to which this specific provision belongs, i.e., "The Judiciary Reorganization
Act of 1980." In these lights, the "same salary" that Article 216 of the Labor Code speaks of and to which the
NLRC Commissioners shall be entitled, should be read and understood as the salary under Section 41 or the
"salary rate," as provided under the "Salary Schedule" that corresponds to the "salary grade" of their
counterpart justice or judge. Other laws that grant other public officers in the executive department with the
"same salary" as their counterpart justice or judge (i.e., RA Nos. 9417 and 10071) should likewise be read and
understood in this way.
b.2. Nature of Longevity Pay.
Based on these considerations, longevity pay should be treated as a benefit or an "add-on" and not a part, let
alone an integral component of "salary," contrary to the Dissents’ position.
This consequence necessarily results as "salary" and longevity pay: (1) are treated under different sections of
BP 129; (2) have different bases for determination or computation; and (3) have different reasons for the
payment or grant.
In addition, Section 42 of BP 129 does not categorically state that the monthly longevity pay shall form part of
the "salary" or is an integral or inseparable component of “salary.” Even the most liberal interpretation of
Section 42 does not reveal any intention to treat longevity pay in this manner ― as part, or as an integral
component, of “salary.”
On the contrary, Section 42 makes it clear that the "salary," which the Dissents submit serve as basis of the
"salary" of executive officers with the same rank of a justice or judge, is that referred to or contemplated in
Section 41.
b.3. Section 42 Analyzed.
Note in this regard that the last clause of Section 42 which states that: "in no case shall the total salary of each
Justice or Judge concerned, after this longevity pay is added , exceed the salary of the Justice or Judge next in
rank."
The use of the term "total salary" under the first portion of Section 42’s last clause, presupposes an addition of
components, and should be understood to refer to the total compensation received . This "total salary" is the
"salary" (or the salary rate fixed under the "Salary Schedule" as the recipient’s monthly compensation
corresponding to his "salary grade") plus the "add-on" longevity pay (or that portion or percentage of the
"salary" as fixed under the Salary Schedule) equivalent to at least 5% of the monthly salary.
In formula form, this should read –
Section 41 Salary + Section 42 Longevity Pay = Total Salary
Where:
Salary = monthly salary rate of position per the Salary Schedule
Longevity Pay = monthly salary rate x 5%.
That the word "total" was added to "salary" under the first portion of Section 42’s last clause, in no way
signifies that longevity pay is an integral part of the "salary" which a Justice or Judge will receive each month
by virtue of his position/rank/salary grade.
The word "total" was added simply to qualify "salary" (the recipient’s "salary" fixed under the "Salary
Schedule") plus any longevity pay to which he may be entitled. This treatment, to be sure, does not make the
longevity pay a part of the "salary."
In short, "total" simply modified "s alary," and in effect denotes that amount received or to be received as total
compensation, and distinguishes this resulting amount from the "salary" received each month by virtue of the
position/salary grade.
Note, too, the word "salary" under the last portion of Section 42’s last clause which is not qualified or modified
by the word "total," in contrast with the "total salary" under the first portion.
The last portion states: the salary of the Justice or Judge next in rank: this "salary" of the Justice or Judge next
in rank should not be exceeded by the "total salary" (or total compensation) of the recipient. The "salary" under
the last phrase, when read together with the "total salary" under the first phrase, shows that "salary" is distinct,
and to be pa id separately from longevity pay, so that the latter cannot be an integral part of "salary."
To sum up, the "same salary" to be received by the public officials in the Executive Department, with the same
rank of justice or judge, is the "salary" of the justice or judge under Section 41. The "salary" referred to in
Section 41, in turn, and as explained above, is the "salary rate" fixed under the "Salary Schedule"
corresponding to the position’s "salary grade."
Notably, Justice De Castro’s proposition that the term "salary" constitutes the basic monthly salary plus the
longevity pay when the Congress enacted RA Nos. 9417, 9347, and 10071 is not reflected in any of the
congressional deliberations. What the deliberations clearly reveal is simply the intention to increase the
"salaries" of the covered public officers in the Executive Department to the level of the "salaries" received by or
granted to their counterpart in the Judiciary.
This "salary" cannot but refer to the fixed sum that the system of "salary rate," "Salary Schedule," and "salary
grade" speaks of. It cannot refer to the variable amount of "total salary" that the dissent refers to, as the basis
or comparator cannot be a variable amount that reflects the seniority that a judge or justice has attained after
years in the service.
Ironically, Justice De Castro’s cited case – Re Longevity pay of Justices of the Sandiganbayan, appearing at
page 42 of this ponencia – best illustrates how the "salary" and "total salary" concepts operate.
E. The complete parity that the dissent advocates is a policy matter that Congress has not so far expressed.
The legislative history and record of the laws (that grant the same ranks, salaries, and benefits to officers in the
Executive department equivalent to their specified counterparts in the Judiciary) do not support the Dissent’s
view that these laws grant full parity in rank, salaries, and benefits or equal treatment between the executive
officers/grantees and the comparator judges and justices whose longevity pay arises from BP 129.
In fact, the legislative history and record of these statutes positively show that Congress has not yet gone as
far as the Dissents would want them to go―to recognize full parity that includes the grant of longevity pay
under BP 129 to executive officers in the Executive Department.
As the discussions below will show, the Dissent, without delving deep into legislative history and record of the
statutes it cited as bases, took the easy route of resorting to hasty generalizations to support its tenuous theory
that these laws operate under the principle of " equal in qualifications and equal in rank, equal in salaries and
benefits received."
This interpretative route may be easy but is a very dangerous one in its implications, as Congress has not in
any way shown that it has intended officers with the same rank and qualifications across government to
receive equal pay and equal benefits.
For this kind of "equalization" to prevail, the government must be ready to embark on a comparison, not only of
rank and qualifications, but on the quantification of job content and valuation of jobs of equal value, involving
similar or allied activities undertaken across government.
This is the requirement that the "equal pay for equal work" principle established in jurisdictions with more
advanced social legislation than the Philippines.43 To be sure, this is a serious policy matter that, under the
terms of the Constitution, is not for this Court but for Congress to establish .
To fully support these contentions, we embark on a brief look into the laws that the Dissent itself cited.
a. RA 934744 affecting the NLRC.
RA 9347 lapsed into law on July 27, 2006. This law was passed to address the then urgent need to improve
the administrative and operational efficiency of the National Labor Relations Commission (NLRC), particularly
its rate of disposition of pending cases and the reduction of its ballooning backlog of labor cases.45 In dealing
with these issues, Congress then focused on measures that would encourage productivity and efficiency and
boost the morale of NLRC officials.
The congressional measures Congress passed included the increase in the number of commissioner-members
of the NLRC, the creation of positions for commission attorneys who would assist the NLRC commissioners in
deciding the labor cases, and a provision for retirement benefits to NLRC commissioners and labor arbiters
equivalent to the retirement benefits of justices of the CA and judges of the RTCs, respectively.
In appreciating RA 9347, note that as early as Presidential Decree No. (PD) 442, the commissioners of the
NLRC were already given the same salary and benefits as justices of the CA . As the old Article 216 of the
Labor Code provided, before the amendment:
Article 216. Salaries, benefits and other emoluments. The Chairman and members of the Commission shall
receive an annual salary at least equivalent to, and be entitled to the same allowances and benefits as those of
the Presiding Justice and Associate Justices of the Court of Appeals, respectively. The Executive Labor
Arbiters shall receive an annual salary at least equivalent to that of an Assistant Regional Director of the
Department of Labor and Employment and shall be entitled to the same allowances and benefits as that of a
Regional Director of said Department. The Labor Arbiters shall receive an annual salary at least equivalent to,
and be entitled to the same allowances and benefits as that of an Assistant Regional Director of the
Department of Labor and Employment. In no case, however, shall the provision of this Article result in the
diminution of existing salaries, allowances and benefits of the aforementioned officials. (As amended by
Section 8, Republic Act No. 6715, March 21, 1989)46
This old provision did not include retirement benefits in its wording. Thus, as enumerated, entitlement to
equivalence was limited to salaries, allowances and benefits. To address the perceived legislative gap, the
amendatory RA 9347 expressly included the word retirement in the enumeration. This grant applied to both
commissioners and labor arbiters of the NLRC.
Aside from this observation, note too that the old Article 216 of the Labor Code did not give labor arbiters the
salary, allowances and benefits equivalent to those of the Regional Trial Court (RTC ) judges. Apart from
addressing the issue on retirement benefits, RA 9347 also sought to deal with the then situation of labor
arbiters in terms of their salaries and emoluments.
Thus, the congressional intent in RA 9347 was to deal with two gaps in PD 442 with respect to the salaries,
benefits, and emoluments of the members of the NLRC.
The first was the grant of salaries and benefits to labor arbiters equivalent to those of RTC judges, and the
second was the express inclusion of the retirement benefits of the labor arbiters and NLRC commissioners at
the levels equivalent to those of RTC judges and CA justices, respectively.
In the discussions and exchanges among the members of Congress – among them, the explanatory note of
Senator Ramon Revilla Jr. in Senate Bill No. 120447 and the sponsorship speech of Senator Jinggoy Ejercito
Estrada of Senate Bill No. 2035 (the senate bill that led to RA 9347)48 – nowhere did they deal with the issue of
longevity pay as a benefit that should be accorded to labor arbiters and commissioners of the NLRC.
In this light, we believe that to make the hasty generalization that the word benefit as enumerated in Article 216
of the Labor Code should include longevity pay would run counter to the intention of the law. Note that had it
been the intent of Congress to give the labor arbiters and commissioners of the NLRC all the benefits enjoyed
by the members of the Judiciary as provided in BP 129 and in other laws specifically applicable to members of
the Judiciary, then it should not have amended Article 216 of the Labor Code by including "retirement benefits"
in the enumeration. Congress should have left the provision as it is since it already provides for the general
term benefit.
Parenthetically, retirement pay is a specific form of allowance under the general term benefits. Congress had to
include this item as an express benefit precisely because the use of the general word benefit in the old Article
216 of the Labor Code did not include all the benefits then being enjoyed by judges and justices of the
Judiciary.
In providing for retirement benefits, Congress significantly did not simply state that the NLRC shall enjoy the
terms and benefits of judges and justices under their retirement law, RA 910, where longevity pay is a special
and specific provision. Congress contented itself with the plain insertion of "retirement pay" and stopped there.
Thus, as matters now stand, NLRC officials retire under the retirement law applicable to executive officials,
with parity of the terms of this retirement law with those of their counterparts in the Judiciary. Retirement
benefits specific to the Judiciary, however, were not and should not be interpreted to be wholly included.
b. RA 941749 affecting the OSG.
RA 9417 passed into law on March 30, 2007. As in the case of RA 9347, this law was passed to address the
plight of the members of the Office of the Solicitor General ( OSG ) by upgrading their salaries and benefits to
improve their efficiency as the Republic’s counsel.
In the sponsorship speech of Senator Juan Ponce Enrile regarding Senate Bill No. 2249, the predecessor
Senate Bill of RA 9417, Senator Enrile pointed out that the Senate’s Committee on Justice and Human Rights,
in crafting Senate Bill 2249, aimed to address the following issues regarding the OSG:
1. Increase the number of staff of the OSG and upgrade their positions;
2. Increase the existing 15 legal divisions of the OSG to 30;
3. Provide health care services, insurance coverage and scholarship and other benefits to all OSG employees
subject to the availability of funds;
4. Grant franking privileges to the OSG;
5. Establish a provident fund within the OSG; and
6. Grant retirement benefits to qualified employees.50
As in the case of the NLRC, it must again be noted that this enumeration is specific with respect to the benefits
granted to members of the OSG: it particularly referred to the benefits to be granted. Although Section 3 of RA
941751 provides that the Solicitor General shall have the same qualifications for appointment, rank,
prerogatives, salaries, allowances, benefits and privileges as the Presiding Justice of the CA (and an Assistant
Solicitor General as that of a CA Associate Justice), RA 9417 still allocated express provisions for the other
benefits to be enjoyed by the members of the OSG. These provisions are the following:
Section 4- Compensation52
Section 5- Benefits and Privileges53
Section 6- Seminar and Other Professional Fees54
Section 7- Transportation Benefits55
Section 8- Other Benefits56
Section 10- Grant of Special Allowances57
Had Congress really intended to grant the benefit of longevity pay to the members of the OSG, then it should
have also included in the list of benefits granted under RA 9417 a provision pertaining to longevity pay. This
provision is glaringly missing and thus cannot be included via this Court’s decision without running afoul of the
rule that prohibits judicial legislation. Nor can this Court recognize the past service rendered by a current judge
or justice in the OSG for purposes of longevity pay.
A closer examination of this law shows that what Congress did was to grant benefits that were applicable to the
type of service that the OSG provides.
For example, OSG lawyers are entitle d to honoraria and allowances from client departments, agencies and
instrumentalities of the Government.58
This benefit is only proper as the main function of the OSG is to act as the counsel of the Government and its
officers acting in their official capacity. On the other hand, this benefit is not applicable to member s of the
Judiciary as they do not act as advocates but rather as impartial judges of the cases before them, for which
they are not entitled to honoraria and allowances on a per case basis.
Another indicator that should be considered from the congressional handling of RA 9417 is that Congress did
not intend to introduce a strict one-to-one correspondence between the grant of the same salaries and benefits
to members of the executive department and of the Judiciary. The congressional approach apparently was for
laws granting benefits to be of specific application that pertains to the different departments according to their
personnel’s needs and activities. No equalization or standardization of benefits was ever intended on a
generalized or across-the-board basis.
F. The structure of the laws providing for the salaries and benefits of members of the Judiciary, prosecutors,
and public officers in the OSG and the NLRC further negate the Dissent’s view that these laws intended equal
treatment among them.
We cannot also agree with the Dissent’s position that the laws providing for the salaries and benefits of
members of the Judiciary, the prosecution service, the OSG solicitors , and the members of the NLRC aim to
provide equality among these public officers in their salaries and benefits.
In terms of salaries, their rationalization has been addressed through Position Classification and Compensation
System of the government under PD 985, PD 1597 and LOI 93, heretofore discussed. It is through the
amendments of these legislative enactments that parity and equity can both be achieved in government.
On the other hand, a look at the structure of the laws affecting the Judiciary, the prosecutors, the OSG, and the
NLRC shows that there could be no equal treatment among them. Notably, under Section 16, par. 6 of RA
10071,59 only the prosecutors would have an automatic increase in salaries and benefits in case the salaries
and benefits in the Judiciary increase. This provision, by itself, shows that Congress did not intend full parity,
because increases in the salaries and benefits of prosecutors would not lead to an automatic increase in the
salaries and benefits of members of the Judiciary.
Extending our judicial lens even further, the laws increasing the salaries and benefits of executive officers in
the OSG and the NLRC do not also provide for an automatic increase should there be increases in the salaries
and benefits of the Judiciary; neither do these laws increase the salaries and benefits of the members of the
Judiciary should the salaries and benefits of these public officers increase.
Had Congress really intended full parity between the Judiciary and other public officers in the executive
department, it would have provided for reciprocity in the automatic increase of salaries, benefits and
allowances, and the upgrading of the grades or levels of the emoluments of these public officers.
Instead, the laws, as currently worded, allow for a situation where an increase in the salaries and benefits of
prosecutors would not result in the increase in the salaries of members of the Judiciary, the OSG and NLRC.
Thus, instead of equalization, the prosecutors (who were merely granted a rank at par with their named
counterparts in the Judiciary) would be in a better position than the actual judges and justices themselves, in
the absence of a similar provision of law giving the same benefits to justices and judges in the event additional
emoluments would be given to these prosecutors.
The inevitable conclusion from all these is that Congress, in increasing the salaries and benefits of these
officers, merely used the salary levels and benefits in the Judiciary as a yardstick to make their salaries and
benefits comparable to fellow government employees engaged in the administration of justice.
At the risk of endlessly belaboring a point, we cannot, without engaging in the prohibited act of judicial
legislation, construe that the Dissent’s cited laws fully intend and recognize full parity in rank, salaries, benefits,
and other emoluments among the public officers mentioned.
G. The Dissent’s cited cases of Santiago, Gancayco, Dela Fuente and Guevara-Salonga are not controlling in
the present case, as they are a strained and erroneous application of Section 42 of BP 129 that should be
abandoned.
The dissent’s invocation of the cases of Judge Santiago and Justices Gancayco, Dela Fuente, and Guevara-
Salonga cannot be applied to the present case as they are erroneous applications of Section 42 of BP 129 in
relation with RA 910 or the Judiciary’s retirement law.
Nor can these cases be cited to support the position that these past rulings already established that the past
services in the Executive Department of incumbent and retired justices and judges, should be given credit for
purposes of longevity pa y under Section 42 of BP 129.
a. The Guevarra-Salonga & Dela Fuente Cases
The grants of longevity pay to Justice Guevara-Salonga and Justice Dela Fuente, in particular, were based on
a misinterpretation and misunderstanding of the Judiciary’s retirement law ― RA 910, read in relation to
Section 42 of BP 129 ― and its interaction with RA 10071, which granted prosecutors the same rank and
benefits (including retirement benefits) of their counterparts in the Judiciary.
Although RA 910 recognized, for purposes of retirement pay, past services in the Judiciary or in any other
branch of the Government, the longevity pay provision under Section 42 of BP 129 recognizes only services in
the Judiciary in determining the longevity pay of 5% of the basic salary (given for each five years of service)
that is carried over into retirement from the service.
In considering the longevity pay in the cases of Justices Guevarra-Salonga and Dela Fuente, the Court
mistakenly recognized their services as prosecutors to be services in the Judiciary, because RA 1007160
granted prosecutors the same rank and benefits (including retirement benefits) as their counterparts in the
Judiciary.
The Court failed to fully appreciate that the longevity pay provision under RA 910, in relation with Section 42 of
BP 129, is unique to the Judiciary and can be enjoyed only for services actually rendered, and by those who
retired, in this branch of government. Thus, services at the Department of Justice, i.e., outside of the Judiciary,
should not have been recognized as additional judicial service for purposes of longevity pay on retirement.
Notably, the Court did not comprehensively discuss in these cited rulings the nature of service required for the
longevity provision to apply, nor the purpose, reason and history of the longevity pay provision under BP 129,
for the Dissents to conclude that the Court already treated the past service in the Executive Department to be
equivalent to service in the Judiciary.
As we earlier discussed, under our system of Government, the Judiciary is separate from, serves a purpose
and functions, and has powers, duties and prerogatives distinct from those of the Executive Department.
Hence, the Court, in these Resolutions, could not have regarded service in the Executive as unqualifiedly
equivalent to service in the Judiciary.
It should be considered, too, that an acceptance of past service in the Executive as service in the Judiciary
may have no basis. The qualification for the grant by the Judiciary should be its determination that there had
been continuous, efficient, and meritorious service. No such determination can be done by the Judiciary if it will
simply recognize longevity pay based solely on service in a position under the Executive Department with rank,
salaries, and benefits equivalent to specified positions in the Judiciary.
To reiterate, for clarity and emphasis, if the Judiciary would recognize past service in the Executive simply
because of the equivalency of rank, salaries and benefits, the situation would be legally problematic as it would
have no way of knowing for itself if the grantee would qualify (based on efficient and meritorious service) since
the past service would be with the Executive, not with the Judiciary. Of course, for this Court to simply
recognize that past executive service w ill be credited under Section 42 of BP 129 constitutes prohibited
judicial legislation for going beyond the requirement that service should be in the Judiciary.
b. The cited Sandiganbayan case.
Re: Longevity Pay of the Associate Justices of the Sandiganbayan (Sandiganbayan case)61 is a very
interesting case that Justice De Castro uses as part of her argument on the liberal stance the Court has taken
on longevity pay.
Significantly, this case did not treat the longevity pay under Section 42 as an integral component of the salary
of the recipient, to be given to and applied in equal degree and force, and under absolute circumstances to
public officials in the Executive Department granted the "same salary" as their counterpart in the Judiciary.
The Sandiganbayan ruling, in fact, does not apply to the factual situation of the present case; it solely involves
Justices of the Sandiganbayan ― members of the Judiciary. Note the following pronouncement in that case:
x x x longevity pay once earned and enjoyed becomes a vested right and forms part of the salary of the
recipient thereof which may not be reduced despite the subsequent appointment of a justice or judge next
higher in rank who is not entitled to longevity pay for being new and not having acquired any longevity in the
government service. Furthermore, diminution or decrease of the salary of an incumbent justice or judge is
prohibited by Section 10 of Article X of the Constitution; hence, such recipient continue to earn and receive
addition l longevity pay as may be warranted by subsequent services in the judiciary, because the purpose of
the Longevity Pay Law is to reward justices and judges for their long and dedicated service as such. The
provision of the law that the total salary of each justice or judge concerned, after adding his longevity pay,
should not exceed the salary plus longevity pay of the justice or judge next higher in rank, refers only to the
initial implementation of the law and does not proscribe a justice or judge who is already entitled to longevity
pay, from continuing to earn and receive longevity pay for services rendered in the judiciary subsequent to
such implementation, by the mere accident of a newcomer being appointed to the position next higher in rank.
These pronouncements reveal the Court’s recognition of a situation where a Justice or Judge who has
rendered service in the Judiciary for a considerable length of time and who will receive a total compensation
that far exceeds the "salary" that a newly appointed Justice or Judge, who has not rendered any prior service
in the Judiciary, will earn or receive based simply on his "salary grade." The former, the "long-serving" Justice
or Judge, will earn far more than the latter, the "newly-serving" Justice or Judge, because of the "add-on"
longevity pay that he (the long-serving Justice or Judge) will receive for his continued long service in the
Judiciary, aside from the "salary" to which the latter (the newly-serving Justice or Judge) shall only be entitled.
The Court realized this scenario as problematic and the obvious inequity it may bring if it were to cons true
strictly the words of Section 42. It is iniquitous for the "long-serving" Justice or Judge if the "add-on" pay
(longevity pay) that he earned under the law for his long and dedicated service in the Judiciary would be
reduced or eliminated altogether simply because of a new Justice or Judge w ho will not be entitle d to any
"add-on" pay for lack of the required long and dedicated service in the Judiciary, and who will thus receive
lesser total compensation.
The Court met the case head on and declared that the limitation refers only to the "initial implementation of the
law and does not proscribe a justice or judge, who is already entitled to longevity pay, from continuing to earn
and receive longevity pay for services rendered in the judiciary subsequent to such implementation, by the
mere accident of a newcomer being appointed to the position next higher in rank." This case assumes
importance in the present consolidated cases as it stresses the purpose of longevity pay as discussed and
interpreted in these pronouncements: " to reward justices and judges for their long and dedicated service as
such, " i.e., as justices or judges.
It highlights, too, that " salary" and the "longevity pay" are separate components of a judge’s or justice’s total
compensation , and that such total compensation can be variable because seniority or years in the service is a
factor taken into account.
Most importantly, this case is an example of the Court’s prompt decisive action to act with liberality when such
action is called for.
c. Moving On
Construing Section 42 as we do in this Resolution does not and will not negate the applicable laws, contrary to
Justice De Castro’s Dissent. Rather, the interpretation that the term "salary" does not include longevity pay will
rectify the error that the Court’s past rulings have created on this subject.
To recapitulate, the Court’s prior rulings treated longevity pay as part of the "salary" – a ruling that, as
explained, runs counter to the express and implied intent of BP 129. They are erroneous because they
introduced and included in the definition and composition of "salary" under Section 41 an element that the law
did not intend to include, either expressly or impliedly.
Hence, the most compelling reason now exists to abandon the above-cited cases: they were clear and grossly
erroneous application of the law. In jurisdictional terms, they involved an interpretation not within the
contemplation of words expressed by the statute; hence, they were gravely abusive interpretation62 that did not
and cannot confer any vested right protected by the due process clause. The worst approach the Court can
take now is to compound the problem by perpetuating our past mistakes and simply burying our heads in the
sand of past-established rulings.
The first decisive move for the Court is to declare, as it hereby declares, the abandonment of our rulings on
longevity pay in the cases of Santiago, Gancayco, Dela Fuente, and Guevara-Salonga and to strike them out
of our ruling case law, without, however, withdrawing the grants to those who have benefitted from the Court’s
misplaced final rulings.
Along these lines, the Court also hereby expressly declares that it does not disavow the longevity pay
previously granted to the retired justices and judicial officials for services rendered outside the Judiciary. They
may continue enjoying their granted benefits as their withdrawal now will be inequitable.
With the same objective, those still in the service who are now enjoying past longevity pay grants due to past
services outside the Judiciary, shall likewise continue with the grants already made, but their grants will have to
be frozen at their current levels until their services outside the Judiciary are compensated for by their present
and future judicial service.
WHEREFORE, premises considered, we resolve to:
(1) NOT the Memorandum dated February 18, 2013 of Atty. Eden T. Candelaria and the Report and
Recommendation dated February 15, 2013 of Atty. Corazon G. Ferrer-Flores;
(2) GRANT the request of Associate Justice Remedios A. Salazar-Fernando that her services as Judge of the
Municipal Trial Court of Sta. Rita, Pampanga be included in the computation of her longevity pay;
(3) DENY the request of Associate Justice Remedios A. Salazar-Femando that her services as COMELEC
Commissioner be included in the computation of her longevity pay;
(4) DENY the request of Associate Justice Angelita Gacutan that her services as NLRC Commissioner be
included in the computation. of her longevity pay from the time she started her judicial service;
(5) DENY with finality the motion for reconsideration of Associate Justice Vicente S.E. Veloso for lack of merit;
and
(6) DIRECT the Clerk of this Court to proceed with the handling of granted longevity pay benefits under Section
42 of Batas Pambansa Blg. 129, pursuant to the guidelines and declarations outlined in the Moving On portion
of this Resolution.
SO ORDERED.
ARTURO D. BRION
Associate Justice
WE CONCUR:
MARIA LOURDES P.A. SERENO
Chief Justice
Republic of the Philippines
SUPREME COURT
Manila
EN BANC
G.R. No. L-43575 May 31, 1935
JUAN TAÑADA, petitioner,
vs.
JOSE YULO, Secretary of Justice, 

EDUARDO GUTIERREZ DAVID, Judge of First Instance of the Thirteenth Judicial District, 

and SANTIAGO TAÑADA, Justice of the Peace of Alabat, Tayabas, respondents.
Pedro Ynsua for petitioner.

Office of the Solicitor-General Hilado for respondents.
MALCOLM, J.:
For the second time the court is called upon to determine the right of a justice of the peace appointed prior to
the approval of Act No. 3899, but who completed sixty-five years of age subsequent to the approval of the Act
and to the date, January 1, 1933, specified in the Act, to continue in office. The answer of the Solicitor-General
presents two questions, the first predicated on the contention that Act No. 3899 applies to all justices of the
peace who reach the age of sixty-five years, and the second on the acceptance of a transfer by the petitioner
as denoting a new appointment bringing him within the purview of the cited law.
Juan Tañada, the petitioner, was appointed justice of the peace of Alabat, Tayabas, by the Governor-General
with the advice and consent of the Philippine Commission on December 4, 1911. He continued in that position
until September 8, 1934, when at his own request, "Pursuant to the provisions of section 206 of the Revised
Administrative Code", he was "transferred from the position of justice of the peace for the municipality of
Alabat, Province of Tayabas, of the same position in the municipality of Perez, same province", by a
communication signed by the Governor-General from which the foregoing is quoted. Tañada completed the
age of sixty-five years on October 5, 1934. Thereupon the Judge of First Instance of Tayabas, acting in
accordance with instructions from the Department of Justice, directed Tañada to cease to act as justice of the
peace of Perez, Tayabas. Tañada surrendered his office under protest, and thereafter instituted this original
action of quo warranto.
The applicable law is found in the last proviso to section 203 of the Administrative Code, as inserted by Act No.
3899, and in the proviso to section 206 of the same Code as last amended by Act No. 2768, which read as
follows:
SEC. 203. Appointment and distribution of justices of the peace. — * * * Provided, further, That the present
justice and auxiliary justice of the peace who shall, at the time this Act takes effect, have completed sixty-five
years of age, shall cease to hold office on January first, nineteen hundred and thirty-three; and the Governor-
General, with the advise and consent of the Philippine Senate, shall make new appointments to cover the
vacancies occurring by operation of this Act.
SEC 206. Tenure of office — Transfer from one municipality of another. — A justice of the peace having the
requisite legal qualifications shall hold office during good behavior unless his office be lawfully abolished or
merged in the jurisdiction of some other justice: Provided, That in case the public interest requires it, a justice
of the peace of one municipality may be transferred to another.
The first question raised by the Solicitor-General was considered in the recent case of Felipe Regalado,
petitioner, vs. Jose Yulo, Secretary of Justice, Juan G. Lesaca, Judge of First Instance of Albay, and Esteban
T. Villar, respondents (page 173, ante). It was there decided that the natural and reasonable meaning of the
language used in Act No. 3899, leaves room for no other deducting than that a justice of the peace appointed
prior to the approval of the Act and who completed sixty-five years of age on September 13, 1934, subsequent
to the approval of the Act, which was on November 16, 1931, and to the date fixed for cessation from office
which was on January 1, 1933, is not affected by the said Act. The law officer of the Government has indicated
that the above cited decision came from a Division of Five and has requested a reconsideration of the issue
therein resolved.
Acceding to this petition, we have again examined microscopically word for word the terminology used in Act
No. 3899. Having done so, all of us are agreed that a justice of the peace like the petitioner who became sixty-
five years of age on October 5, 1934, was not included in a law which required justice of the peace sixty-five
years of age to cease to hold office on January 1, 1933. That result is now arrived at in banc.
In substantiation of what has just been said, it is of course fundamental that the determination of the legislative
intent is the primary consideration. However, it is equally fundamental that that legislative intent must be
determined from the language of the statute itself. This principle must be adhered to even though the court be
convinced by extraneous circumstances that the Legislature intended to enact something very different from
that which it did enact. An obscurity cannot be created to be cleared up by construction and hidden meanings
at variance with the language used cannot be sought out. To attempt to do so is a perilous undertaking, and is
quite apt to lead to an amendment of a law by judicial construction. To depart from the meaning expressed by
the words is to alter the statute, is to legislate not to interpret.
As corroborative authority it is only necessary to advert to a decision coming from the United States Supreme
Court, in which the court was asked to insert the word "lawfully", but the court declined to do so, saying that
there is no authority to import a word into a statute in order to change its meaning. (Newhall vs. Sanger, 92,
U.S., 761.) The thought was expressed by the same court in another case, when it said that court are bound to
follow the plain words of a statute as to which there is no room for construction regardless of the
consequences. (Commissioner of Immigration vs. Gottlieb, 265 U.S., 310; see 25 R.C.L., 961 et seq.)
Counsel in effect urges us to adopt a liberal construction of the statute. That in this instance, as in the past, we
aim to do. But counsel in his memorandum concedes "that the language of the proviso in question is
somewhat defective and does not clearly convey the legislative intent", and at the hearing in response to
questions was finally forced to admit that what the Government desired was for the court to insert words and
phrases in the law in order to supply an intention for the legislature. That we cannot do. By liberal construction
of statutes, courts from the language use, the subject matter, and the purposes of those framing them are able
to find their true meaning. There is a sharp distinction, however, between construction of this nature and the
act of a court in engrafting upon a law something that has been omitted which someone believes ought to have
been embraced. The former is liberal construction and is a legitimate exercise of judicial power. The latter is
judicial legislation forbidden by the tripartite division of powers among the three departments of government,
the executive, the legislative, and the judicial.
We give application to the decision of this court in Regalado vs. Yulo, supra, and as a result overrule the first
defense of the Government.
Passing to the second phase of the case, counsel has endeavoured to draw a distinction between the
Regalado case above cited and the present case. On the facts there is admittedly one difference. In the
Regalado case the petitioner had not been transferred from one municipality to another, while in the present
case, Tañada accepted a transfer from one municipality to another. Did the transfer amount to a new
appointment bringing Tañada under the purview of the law relating to relinquishment of office on attaining the
age of sixty-five?
The effect of the Organic Act is that an appointment of a justice of the peace by the Governor-General must be
consented to by the Philippine Senate. In consonance with this provision, the method of appointment and
distribution of justices of the peace are outlined in section 203 of the Administrative Code, a portion of which is
hereinbefore quoted. The transfer from one municipality to another, however, is accomplished by the Governor-
General without the advise and consent of the Philippine Senate, in accordance with codal section 206.
In the case of Nicolas vs. Alberto (51 Phil., 370), the issue was the legal right of the Governor-General to
transfer a justice of the peace from one municipality to another, without the consent of the Philippine Senate.
This court held that the consent of the Philippine Senate was a necessary attribute of the transfer. As the basis
for this holding, it was stated that the appointing power consists of the Governor-General acting in conjunction
with the Philippine Senate. But that case was taken to the United States Supreme Court, and there is was held
that the consent of the Senate was unnecessary to make the transfer legal. (Alberto vs. Nicolas, 279 U.S.,
139.) The holding of the higher court, to follow the language of the syllabus, was that in view of the plenary
legislative powers of the Philippine Legislature regarding justice of the peace, Act No. 2768 of the Philippine
Legislature is valid as applied to justice of the peace whose appointment was made by the Governor-General,
and confirmed by the Senate, after its enactment. In the body of the decision appeared the following:
. . . When the Senate confirmed Severino Alberto to be a justice of the peace for San Jose del Monte, sec. 206,
with the proviso, was in force; and when the Senate confirmed him, it confirmed him with the knowledge of the
possibility declared in the law that his power and his functions as a justice of the peace upon designation of the
Governor-General might be performed and exercised in another jurisdiction, if the Governor-General should
think it wise in the public interest in his regulation of the conduct of justice of the peace. There is no such
necessary difference between the duties of a justice of the peace in one part of the Islands and those to be
performed in another part as to make such enlargement or change of his jurisdiction already provided for in
existing law unreasonably beyond the scope of the consent to the original appointment.
It is to be deduced from what has been stated above that according to the United States Supreme Court, the
transfer simply amounted to an enlargement or change of jurisdiction grounded on the original appointment
and thus did not require a new appointment. Whatever our view s might have been to the contrary, it now
becomes out duty to follow the decision of the higher court. It also seems evident that a transfer as applied to
officers amounts merely to a change of position or to another grade of service. (Cliff vs. Wentworth, 220 Mass.,
393.)
We give application to the decision of the Supreme Court of the United States in Nicolas vs. Alberto, supra,
and as a result overrule the second defense of the Government.
Before closing it is incumbent upon us to observe that this case was heard in banc because of the suggestion
of the Solicitor-General that the principal issue raised by the pleadings is the validity of Act No. 3899 of the
Philippine Legislature. Our review of the case has convinced us that this allegation overstates the matter. It is
unnecessary to discuss petitioner's contention that Act No. 3899 is unconstitutional because of a defective title.
On the other hand, the allegation in the answer that the law is discriminatory and class legislation, and,
consequently, unconstitutional has apparently been abandoned. Finally it is to be observed that the fear of
disorder in the affairs of the Department of Justice and the Office of the Governor-General on account of the
displacement of incumbent justices of the peace, is unfounded, for as is well known, acquiescence or voluntary
surrender of an office precludes the maintenance of a quo warranto proceeding.
Giving effect to the decisions of this court in the Regalado case and of the Supreme Court of the United States
in the Alberto vs. Nicolas case, and as a consequence ruling that Act No. 3899 does not apply to a justice of
the peace appointed prior to the approval of the Act who completed sixty-five years of age after January 1,
1933, and that a transfer of a justice of the peace does not amount to an appointment, we reach the conclusion
that the special defenses interposed by the Solicitor-General must be overruled. Accordingly, the writ will be
granted and the petitioner Juan Tañada will be placed in possession of the office of justice of the peace of
Perez, Tayabas. So ordered, without special pronouncement as to the costs.
Abad Santos, Hull, Vickers, Butte, Goddard, and Diaz, JJ., concur.