1
G.R. No. 109835 November 22, 1993
JMM PROMOTIONS & MANAGEMENT, INC., petitioner,
vs.
NATIONAL LABOR RELATIONS COMMISSION and ULPIANO L.
DE LOS SANTOS, respondent.
Don P. Porciuncula for petitioner.
Eulogio Nones, Jr. for private respondent.
CRUZ, J.:
The sole issue submitted in this case is the validity of the
order of respondent National Labor Relations Commission
dated October 30, 1992, dismissing the petitioner's appeal
from a decision of the Philippine Overseas Employment
Administration on the ground of failure to post the required
appeal bond. 1
The respondent cited the second paragraph of Article 223 of
the Labor Code as amended, providing that:
In the case of a judgment involving a monetary award, an
appeal by the employer may be perfected only upon the
posting of a cash or surety bond issued by a reputable
bonding company duly accredited by the Commission in an
amount equivalent to the monetary award in the judgment
appealed from.
and Rule VI, Section 6 of the new Rules of Procedure of the
NLRC, as amended, reading as follows:
Sec. 6. Bond — In case the decision of a Labor Arbiter
involves a monetary award, an appeal by the employer shall
be perfected only upon the posting of a cash or surety bond
issued by a reputable bonding company duly accredited by
the Commission or the Supreme Court in an amount
equivalent to the monetary award.
The petitioner contends that the NLRC committed grave
abuse of discretion in applying these rules to decisions
rendered by the POEA. It insists that the appeal bond is not
necessary in the case of licensed recruiters for overseas
employment because they are already required under
Section 4, Rule II, Book II of the POEA Rules not only to pay a
license fee of P30,000 but also to post a cash bond of
P100,000 and a surety bond of P50,000, thus:
Upon approval of the application, the applicant shall pay a
license fee of P30,000. It shall also post a cash bond of
P100,000 and surety bond of P50,000 from a bonding
company acceptable to the Administration and duly
accredited by the Insurance Commission. The bonds shall
answer for all valid and legal claims arising from violations of
the conditions for the grant and use of the license, and/or
accreditation and contracts of employment. The bonds shall
likewise guarantee compliance with the provisions of the
Code and its implementing rules and regulations relating to
recruitment and placement, the Rules of the Administration
and relevant issuances of the Department and all liabilities
which the Administration may impose. The surety bonds shall
include the condition that the notice to the principal is notice
to the surety and that any judgment against the principal in
connection with matters falling under POEA's jurisdiction
shall be binding and conclusive on the surety. The surety
bonds shall be co-terminus with the validity period of license.
(Emphasis supplied)
In addition, the petitioner claims it has placed in escrow the
sum of P200,000 with the Philippine National Bank in
compliance with Section 17, Rule II, Book II of the same Rule,
"to primarily answer for valid and legal claims of recruited
workers as a result of recruitment violations or money
claims."
Required to comment, the Solicitor General sustains the
appeal bond requirement but suggest that the rules cited by
the NLRC are applicable only to decisions of the Labor
Arbiters and not of the POEA. Appeals from decisions of the
POEA, he says, are governed by the following provisions of
Rule V, Book VII of the POEA Rules:
Sec. 5. Requisites for Perfection of Appeal. The appeal shall be
filed within the reglementary period as provided in Section 1
of this Rule; shall be under oath with proof of payment of the
required appeal fee and the posting of a cash or surety bond
as provided in Section 6 of this Rule; shall be accompanied by
a memorandum of appeal which shall state the grounds
relied upon and the arguments in support thereof; the relief
prayed for; and a statement of the date when the appellant
received the appealed decision and/or award and proof of
service on the other party of such appeal.
A mere notice of appeal without complying with the other
requisites aforestated shall not stop the running of the
period for perfecting an appeal.
Sec. 6. Bond. In case the decision of the Administration
involves a monetary award, an appeal by the employer shall
be perfected only upon the posting of a cash or surety bond
issued by a reputable bonding company duly accredited by
the Commission in an amount equivalent to the monetary
award. (Emphasis supplied)
The question is, having posted the total bond of P150,000
and placed in escrow the amount of P200,000 as required by
the POEA Rules, was the petitioner still required to post an
appeal bond to perfect its appeal from a decision of the POEA
to the NLRC?
It was.
The POEA Rules are clear. A reading thereof readily shows
that in addition to the cash and surety bonds and the escrow
money, an appeal bond in an amount equivalent to the
monetary award is required to perfect an appeal from a
decision of the POEA. Obviously, the appeal bond is intended
to further insure the payment of the monetary award in favor
of the employee if it is eventually affirmed on appeal to the
NLRC.
It is true that the cash and surety bonds and the money
placed in escrow are supposed to guarantee the payment of
all valid and legal claims against the employer, but these
claims are not limited to monetary awards to employees
whose contracts of employment have been violated. The
POEA can go against these bonds also for violations by the
recruiter of the conditions of its license, the provisions of the
Labor Code and its implementing rules, E.O. 247
(reorganizing POEA) and the POEA Rules, as well as the
settlement of other liabilities the recruiter may incur.
As for the escrow agreement, it was presumably intended to
provide for a standing fund, as it were, to be used only as a
last resort and not to be reduced with the enforcement
against it of every claim of recruited workers that may be

adjudged against the employer. This amount may not even
be enough to cover such claims and, even if it could initially,
may eventually be exhausted after satisfying other
subsequent claims.
As it happens, the decision sought to be appealed grants a
monetary award of about P170,000 to the dismissed
employee, the herein private respondent. The standby
guarantees required by the POEA Rules would be depleted if
this award were to be enforced not against the appeal bond
but against the bonds and the escrow money, making them
inadequate for the satisfaction of the other obligations the
recruiter may incur.
Indeed, it is possible for the monetary award in favor of the
employee to exceed the amount of P350,000, which is the
sum of the bonds and escrow money required of the
recruiter.
It is true that these standby guarantees are not imposed on
local employers, as the petitioner observes, but there is a
simple explanation for this distinction. Overseas recruiters
are subject to more stringent requirement because of the
special risks to which our workers abroad are subjected by
their foreign employers, against whom there is usually no
direct or effective recourse. The overseas recruiter is
solidarily liable with a foreign employer. The bonds and the
escrow money are intended to insure more care on the part
of the local agent in its choice of the foreign principal to
whom our overseas workers are to be sent.
It is a principle of legal hermeneutics that in interpreting a
statute (or a set of rules as in this case), care should be taken
that every part thereof be given effect, on the theory that it
was enacted as an integrated measure and not as a hodge-
podge of conflicting provisions. Ut res magis valeat quam
pereat. 2 Under the petitioner's interpretation, the appeal
bond required by Section 6 of the aforementioned POEA Rule
should be disregarded because of the earlier bonds and
escrow money it has posted. The petitioner would in effect
nullify Section 6 as a superfluity but we do not see any such
redundancy; on the contrary, we find that Section 6
complements Section 4 and Section 17. The rule is that a
construction that would render a provision inoperative
should be avoided; instead, apparently inconsistent
provisions should be reconciled whenever possible as parts
of a coordinated and harmonious whole.
Accordingly, we hold that in addition to the monetary
obligations of the overseas recruiter prescribed in Section 4,
Rule II, Book II of the POEA Rules and the escrow agreement
under Section 17 of the same Rule, it is necessary to post the
appeal bond required under Section 6, Rule V, Book VII of the
POEA Rules, as a condition for perfecting an appeal from a
decision of the POEA.
Every intendment of the law must be interpreted in favor of
the working class, conformably to the mandate of the
Constitution. By sustaining rather than annulling the appeal
bond as a further protection to the claimant employee, this
Court affirms once again its commitment to the interest of
labor.
WHEREFORE, the petition is DISMISSED, with costs against
the petitioner. It is so ordered.
[G. R. No. 102377. July 5, 1996]
ALFREDO SAJONAS and CONCHITA SAJONAS, petitioners, vs.
THE COURT OF APPEALS, DOMINGO A. PILARES, SHERIFF
ROBERTO GARCIA OF QUEZON CITY and REGISTER OF DEEDS
OF MARIKINA, respondents.
DECISION
TORRES, JR., J.:
A word or group of words conveys intentions. When used
truncatedly, its meaning disappears and breeds conflict.
Thus, it is written - “By thy words shalt thou be justified, and
by thy words shalt thou be condemned.” (Matthew, 12:37)
Construing the new words of a statute separately is the
raison d’etre of this appeal.
Essentially, the case before us is for cancellation of the
inscription of a Notice of Levy on Execution from a certificate
of Title covering a parcel of real property. The inscription
was caused to be made by the private respondent on
Transfer Certificate of Title No. N-79073 of the Register of
2
Deeds of Marikina, issued in the name of the spouses Ernesto
B. Uychocde and Lucita Jarin, and was later carried over to
and annotated on Transfer Certificate of Title No. N-109417
of the same registry, issued in the name of the spouses
Alfredo Sajonas and Conchita R. Sajonas, who purchased the
parcel of land from the Uychocdes, and are now the
petitioners in this case.
The facts are not disputed, and are hereby reproduced as
follows:
“On September 22, 1983, the spouses Ernesto Uychocde and
Lucita Jarin agreed to sell a parcel of residential land located
in Antipolo, Rizal to the spouses Alfredo Sajonas and
Conchita R. Sajonas on installment basis as evidenced by a
Contract to Sell dated September 22, 1983. The property
was registered in the names of the Uychocde spouses under
TCT No. N-79073 of the Register of Deeds of Marikina, Rizal.
On August 27, 1984, the Sajonas couple caused the
annotation of an adverse claim based on the said Contract to
Sell on the title of the subject property, which was inscribed
as Entry No. 116017. Upon full payment of the purchase
price, the Uychocdes executed a Deed of Sale involving the
property in question in favor of the Sajonas couple on
September 4, 1984. The deed of absolute sale was registered
almost a year after, or on August 28, 1985.
Meanwhile, it appears that Domingo Pilares (defendant-
appellant) filed Civil Case No. Q-28850 for collection of sum
of money against Ernesto Uychocde. On June 25, 1980, a
Compromise Agreement was entered into by the parties in
the said case under which Ernesto Uychocde acknowledged
his monetary obligation to Domingo Pilares amounting to
P27,800 and agreed to pay the same in two years from June
25, 1980. When Uychocde failed to comply with his
undertaking in the compromise agreement, defendant-
appellant Pilares moved for the issuance of a writ of
execution to enforce the decision based on the compromise
agreement, which the court granted in its order dated August
3, 1982. Accordingly, a writ of execution was issued on
August 12, 1982 by the CFI of Quezon City where the civil
case was pending. Pursuant to the order of execution dated
August 3, 1982, a notice of levy on execution was issued on
February 12, 1985. On February 12, 1985, defendant sheriff
Roberto Garcia of Quezon City presented said notice of levy
on execution before the Register of Deeds of Marikina and

the same was annotated at the back of TCT No. 79073 as
Entry No. 123283.
When the deed of absolute sale dated September 4 1984 was
registered on August 28, 1985, TCT No. N-79073 was
cancelled and in lieu thereof, TCT No. N-109417 was ssued in
the name of the Sajonas couple. The notice of levy on
execution annotated by defendant sheriff was carried over to
the new title. On October 21, 1985, the Sajonas couple filed
a Third Party Claim with the sheriff of Quezon City, hence the
auction sale of the subject property did not push through as
scheduled.
On January 10, 1986, the Sajonas spouses demanded the
cancellation of the notice of levy on execution upon
defendant-appellant Pilares, through a letter to their lawyer,
Atty. Melchor Flores. Despite said demand, defendant-
appellant Pilares refused to cause the cancellation of said
annotation. In view thereof, plaintiffs-appellees filed this
complaint dated January 11, 1986 on February 5, 1986.”
The Sajonases filed their complaint in the Regional Trial Court
of Rizal, Branch 71, against Domingo Pilares, the judgment
creditor of the Uychocdes. The relevant portion of the
complaint alleges:
“7. That at the time the notice of levy was annotated by the
defendant, the Uychocde spouses, debtors of the defendant,
have already transferred, conveyed and assigned all their
title, rights and interests to the plaintiffs and there was no
more title, rights or interests therein which the defendant
could levy upon;
8. That the annotation of the levy on execution which was
carried over to the title of said plaintiffs is illegal and invalid
and was made in utter bad faith, in view of the existence of
the Adverse Claim annotated by the plaintiffs on the
corresponding title of the Uychocde spouses;
9. That a demand was made by the plaintiffs upon the
defendant Domingo A. Pilares, to cause the cancellation of
the said notice of levy but the latter, without justifiable
reason and with the sole purpose of harassing and
embarrassing the plaintiffs ignored and refused plaintiffs’
demand;
10. That in view of the neglect, failure and refusal of the
defendant to cause the cancellation of the notice of levy on
execution, the plaintiffs were compelled to litigate and
engage the services of the undersigned counsel, to protect
their rights and interests, for which they agreed to pay
attorney’s fees in the amount of P10,000 and appearance
fees of P500 per day in court.”
Pilares filed his answer with compulsory counterclaim on
March 8, 1986, raising special and affirmative defenses, the
relevant portions of which are as follows:
“10. Plaintiff has no cause of action against herein
defendants;
11. Assuming, without however admitting that they filed an
adverse claim against the property covered by TCT No. 79073
registered under the name of spouses Ernesto Uychocde on
August 27, 1984, the same ceases to have any legal force and
effect (30) days thereafter pursuant to Section 70 of P.D.
1529;
12. The Notice of Levy annotated at the back of TCT No.
79073 being effected pursuant to the Writ of Execution dated
August 31, 1982, duly issued by the CFI (now RTC) of Quezon
City proceeding from a decision rendered in Civil Case No.
28859 in favor of herein defendant against Ernesto
Uychocde, is undoubtedly proper and appropriate because
the property is registered in the name of the judgment
debtor and is not among those exempted from execution;
13. Assuming without admitting that the property subject
matter of this case was in fact sold by the registered owner in
favor of the herein plaintiffs, the sale is the null and void (sic)
and without any legal force and effect because it was done in
fraud of a judgment creditor, the defendant Pilares.”
Pilares likewise sought moral and exemplary damages in a
counterclaim against the Sajonas spouses. The parties
appeared at pre-trial proceedings on January 21, 1987, after
which, trial on the merits ensued.
The trial court rendered its decision on February 15, 1989. It
found in favor of the Sajonas couple, and ordered the
cancellation of the Notice of Levy from Transfer Certificate of
Title No. N-109417.
3
The court a quo stated, thus:
“After going over the evidence presented by the parties, the
court finds that although the title of the subject matter of the
Notice of Levy on Execution was still in the name of the
Spouses Uychocde when the same was annotated on the said
title, an earlier Affidavit of Adverse Claim was annotated on
the same title by the plaintiffs who earlier bought said
property from the Uychocdes.
It is a well settled rule in this jurisdiction (Guidote vs.
Maravilla, 48 Phil. 442) that actual notice of an adverse claim
is equivalent to registration and the subsequent registration
of the Notice of Levy could not have any legal effect in any
respect on account of prior inscription of the adverse claim
annotated on the title of the Uychocdes.
xxx xxx xxx
On the issue of whether or not plaintiffs are buyers in good
faith of the property of the spouses Uychocde even
notwithstanding the claim of the defendant that said sale
executed by the spouses was made in fraud of creditors, the
Court finds that the evidence in this instance is bare of any
indication that said plaintiffs as purchasers had notice
beforehand of the claim of the defendant over said property
or that the same is involved in a litigation between said
spouses and the defendant. Good faith is the opposite of
fraud and bad faith, and the existence of any bad faith must
be established by competent proof.
xxx xxx xxx
In view of the foregoing, the Court renders judgment in favor
of the plaintiffs and against the defendant Pilares, as follows:
1. Ordering the cancellation of the Notice of Levy on
Execution annotated on Transfer Certificate of Title No. N-
109417.
2. Ordering said defendant to pay the amount of P5,000 as
attorney’s fees.
3. Dismissing the Counterclaim interposed by said defendant.

Said defendant is likewise ordered to pay the costs.”
Dissatisfied, Pilares appealed to the Court of Appeals,
assigning errors on the part of the lower court. The appellate
court reversed the lower court’s decision, and upheld the
annotation of the levy on execution on the certificate of title,
thus:
“WHEREFORE, the decision of the lower court dated February
15, 1989 is reversed and set aside and this complaint is
dismissed.
Costs against the plaintiffs-appellees."
The Sajonas couple are now before us, on a Petition for
Review on Certiorari praying inter alia to set aside the Court
of Appeals’ decision, and to reinstate that of the Regional
Trial Court.
Private respondent filed his Comment on March 5, 1992,
after which, the parties were ordered to file their respective
Memoranda. Private respondent complied thereto on April
27, 1994, while petitioners were able to submit their
Memorandum on September 29, 1992.
Petitioner assigns the following as errors of the appellate
court, to wit:
I Noting the changes made in the terminology of the
THE LOWER COURT ERRED IN HOLDING THAT THE RULE ON
THE 30-DAY PERIOD FOR ADVERSE CLAIM UNDER SECTION 70
OF P.D. NO. 1529 IS ABSOLUTE INASMUCH AS IT FAILED TO
READ OR CONSTRUE THE PROVISION IN ITS ENTIRETY AND TO
RECONCILE THE APPARENT INCONSISTENCY WITHIN THE
PROVISION IN ORDER TO GIVE EFFECT TO IT AS A WHOLE.
II
THE LOWER COURT ERRED IN INTERPRETING SECTION 70 OF
P.D. NO. 1529 IN SUCH WISE ON THE GROUND THAT IT
VIOLATES PETITIONERS’ SUBSTANTIAL RIGHT TO DUE
PROCESS.
Primarily, we are being asked to ascertain who among the
parties in suit has a better right over the property in
question. The petitioners derive their claim from the right of
ownership arising from a perfected contract of absolute sale
between them and the registered owners of the property,
such right being attested to by the notice of adverse claim
annotated on TCT No. N-79073 as early as August 27, 1984.
Private respondent on the other hand, claims the right to
levy on the property, and have it sold on execution to satisfy
his judgment credit, arising from Civil Case No. Q-28850
against the Uychocdes, from whose title, petitioners derived
their own.
Concededly, annotation of an adverse claim is a measure
designed to protect the interest of a person over a piece of
real property where the registration of such interest or right
is not otherwise provided for by the Land Registration Act or
Act 496 (now P.D. 1529 or the Property Registration Decree),
and serves a warning to third parties dealing with said
property that someone is claiming an interest on the same or
a better right than that of the registered owner thereof.
Such notice is registered by filing a sworn statement with the
Register of Deeds of the province where the property is
located, setting forth the basis of the claimed right together
with other dates pertinent thereto.
The registration of an adverse claim is expressly recognized
under Section 70 of P.D. No. 1529.
provisions of the law, private respondent interpreted this to
mean that a Notice of Adverse Claim remains effective only
for a period of 30 days from its annotation, and does not
automatically lose its force afterwards. Private respondent
further maintains that the notice of adverse claim was
annotated on August 27, 1984, hence, it will be effective only
up to September 26, 1984, after which it will no longer have
any binding force and effect pursuant to Section 70 of P.D.
No. 1529. Thus, the sale in favor of the petitioners by the
Uychocdes was made in order to defraud their creditor
(Pilares), as the same was executed subsequent to their
having defaulted in the payment of their obligation based on
a compromise agreement.
The respondent appellate court upheld private respondents’
theory when it ruled:
4
“The above stated conclusion of the lower court is based on
the premise that the adverse claim filed by plaintiffs-
appellees is still effective despite the lapse of 30 days from
the date of registration. However, under the provisions of
Section 70 of P.D. 1529, an adverse claim shall be effective
only for a period of 30 days from the date of its registration.
The provision of this Decree is clear and specific.
xxx xxx xxx
It should be noted that the adverse claim provision in Section
110 of the Land Registration Act (Act 496) does not provide
for a period of effectivity of the annotation of an adverse
claim. P.D. No. 1529, however, now specifically provides for
only 30 days. If the intention of the law was for the adverse
claim to remain effective until cancelled by petition of the
interested party, then the aforecited provision in P.D. No.
1529 stating the period of effectivity would not have been
inserted in the law.
Since the adverse claim was annotated On August 27, 1984, it
was effective only until September 26, 1984. Hence, when
the defendant sheriff annotated the notice of levy on
execution on February 12, 1985, said adverse claim was
already ineffective. It cannot be said that actual or prior
knowledge of the existence of the adverse claim on the
Uychocdes’ title is equivalent to registration inasmuch as the
adverse claim was already ineffective when the notice of levy
on execution was annotated. Thus, the act of defendant
sheriff in annotating the notice of levy on execution was
proper and justified.”
The appellate court relied on the rule of statutory
construction that Section 70 is specific and unambiguous and
hence, needs no interpretation nor construction. Perforce,
the appellate court stated, the provision was clear enough to
warrant immediate enforcement, and no interpretation was
needed to give it force and effect. A fortiori, an adverse
claim shall be effective only for a period of thirty (30) days
from the date of its registration, after which it shall be
without force and effect. Continuing, the court further
stated;
“. . . clearly, the issue now has been reduced to one of
preference- which should be preferred between the notice of
levy on execution and the deed of absolute sale. The Deed of

Absolute Sale was executed on September 4, 1984, but was
registered only on August 28, 1985, while the notice of levy
on execution was annotated six (6) months prior to the
registration of the sale on February 12, 1985.
In the case of Landig vs. U.S. Commercial Co., 89 Phil 638 it
was held that where a sale is recorded later than an
attachment, although the former is of an earlier date, the
sale must give way to the attachment on the ground that the
act of registration is the operative act to affect the land. A
similar ruling was restated in Campillo vs. Court of Appeals
(129 SCRA 513).
xxx xxx xxx
The reason for these rulings may be found in Section 51 of
P.D. 1529, otherwise known as the Property Registration
Decree, which provides as follows:
Section 51. Conveyance and other dealings by the registered
owner.- An owner of registered land may convey, mortgage,
lease, charge, or otherwise deal with the same in accordance
with existing laws. He may use such forms of deeds,
mortgages, leases or other voluntary instruments as are
sufficient in law. But no deed, mortgage, lease or other
voluntary instrument, except a will purporting to convey or
affect registered land shall take effect as a conveyance or
bind the land, but shall operate only as a contract between
the parties and as evidence of authority to the Register of
Deeds to make registration.
The act of registration shall be the operative act to convey or
affect the land in so far as third persons are concerned, and in
all cases under the Decree, the registration shall be made in
the office of the Register of Deeds for the province or city
where the land lies.” (Italics supplied by the lower court.)
Under the Torrens system, registration is the operative act
which gives validity to the transfer or creates a lien upon the
land. A person dealing with registered land is not required to
go behind the register to determine the condition of the
property. He is only charged with notice of the burdens on
the property which are noted on the face of the register or
certificate of title
Although we have relied on the foregoing rule, in many cases
coming before us, the same, however, does not fit in the case
at bar. While it is the act of registration which is the
operative act which conveys or affects the land insofar as
third persons are concerned, it is likewise true, that the
subsequent sale of property covered by a Certificate of Title
cannot prevail over an adverse claim, duly sworn to and
annotated on the certificate of title previous to the sale.
While it is true that under the provisions of the Property
Registration Decree, deeds of conveyance of property
registered under the system, or any interest therein only take
effect as a conveyance to bind the land upon its registration,
and that a purchaser is not required to explore further than
what the Torrens title, upon its face, indicates in quest for
any hidden defect or inchoate right that may subsequently
defeat his right thereto, nonetheless, this rule is not
absolute. Thus, one who buys from the registered owner
need not have to look behind the certificate of title, he is,
nevertheless, bound by the liens and encumbrances
annotated thereon. One who buys without checking the
vendor’s title takes all the risks and losses consequent to
such failure.
In PNB vs. Court of Appeals, we held that “the subsequent
sale of the property to the De Castro spouses cannot prevail
over the adverse claim of Perez, which was inscribed on the
bank’s certificate of title on October 6, 1958. That should
have put said spouses on notice, and they can claim no better
legal right over and above that of Perez. The TCT issued in
the spouses’ names on July, 1959 also carried the said
annotation of adverse claim. Consequently, they are not
entitled to any interest on the price they paid for the
property.”
Then again, in Gardner vs. Court of Appeals, we said that “the
statement of respondent court in its resolution of reversal
that ‘until the validity of an adverse claim is determined
judicially, it cannot be considered a flaw in the vendor’s title’
contradicts the very object of adverse claims. As stated
earlier, the annotation of an adverse claim is a measure
designed to protect the interest of a person over a piece of
real property, and serves as a notice and warning to third
parties dealing with said property that someone is claiming
an interest on the same or has a better right than the
registered owner thereof. A subsequent sale cannot prevail
over the adverse claim which was previously annotated in
the certificate of title over the property.”
5
The question may be posed, was the adverse claim inscribed
in the Transfer Certificate of Title No. N-109417 still in force
when private respondent caused the notice of levy on
execution to be registered and annotated in the said title,
considering that more than thirty days had already lapsed
since it was annotated? This is a decisive factor in the
resolution of this instant case.
If the adverse claim was still in effect, then respondents are
charged with knowledge of pre-existing interest over the
subject property, and thus, petitioners are entitled to the
cancellation of the notice of levy attached to the certificate
of title.
For a definitive answer to this query, we refer to the law
itself. Section 110 of Act 496 or the Land Registration Act
reads:
“Sec. 110. Whoever claims any part or interest in registered
lands adverse to the registered owner, arising subsequent to
the date of the original registration, may, if no other
provision is made in this Act for registering the same, make a
statement in writing setting forth fully his alleged right or
interest, and how or under whom acquired, and a reference
to the volume and page of the certificate of title of the
registered owner, and a description of the land in which the
right or interest is claimed.
The statement shall be signed and sworn to, and shall state
the adverse claimant’s residence, and designate a place at
which all notices may be served upon him. The statement
shall be entitled to registration as an adverse claim, and the
court, upon a petition of any party in interest, shall grant a
speedy hearing upon the question of the validity of such
adverse claim and shall enter such decree therein as justice
and equity may require. If the claim is adjudged to be invalid,
the registration shall be cancelled. If in any case, the court
after notice and hearing shall find that a claim thus registered
was frivolous or vexatious, it may tax the adverse claimant
double or treble the costs in its discretion.”
The validity of the above-mentioned rules on adverse claims
has to be reexamined in the light of the changes introduced
by P.D. 1529, which provides:

“Sec. 70 Adverse Claim- Whoever claims any part or interest
in registered land adverse to the registered owner, arising
subsequent to the date of the original registration, may, if no
other provision is made in this decree for registering the
same, make a statement in writing setting forth fully his
alleged right or interest, and how or under whom acquired, a
reference to the number of certificate of title of the
registered owner, the name of the registered owner, and a
description of the land in which the right or interest is
claimed.
The statement shall be signed and sworn to, and shall state
the adverse claimant’s residence, and a place at which all
notices may be served upon him. This statement shall be
entitled to registration as an adverse claim on the certificate
of title. The adverse claim shall be effective for a period of
thirty days from the date of registration. After the lapse of
said period, the annotation of adverse claim may be cancelled
upon filing of a verified petition therefor by the party in
interest: Provided, however, that after cancellation, no
second adverse claim based on the same ground shall be
registered by the same claimant.
Before the lapse of thirty days aforesaid, any party in interest
may file a petition in the Court of First Instance where the
land is situated for the cancellation of the adverse claim, and
the court shall grant a speedy hearing upon the question of
the validity of such adverse claim, and shall render judgment
as may be just and equitable. If the adverse claim is
adjudged to be invalid, the registration thereof shall be
ordered cancelled. If, in any case, the court, after notice and
hearing shall find that the adverse claim thus registered was
frivolous, it may fine the claimant in an amount not less than
one thousand pesos, nor more than five thousand pesos, in
its discretion. Before the lapse of thirty days, the claimant
may withdraw his adverse claim by filing with the Register of
Deeds a sworn petition to that effect.” (Italics ours)
In construing the law aforesaid, care should be taken that
every part thereof be given effect and a construction that
could render a provision inoperative should be avoided, and
inconsistent provisions should be reconciled whenever
possible as parts of a harmonious whole. For taken in
solitude, a word or phrase might easily convey a meaning
quite different from the one actually intended and evident
when a word or phrase is considered with those with which it
is associated. In ascertaining the period of effectivity of an
inscription of adverse claim, we must read the law in its
entirety. Sentence three, paragraph two of Section 70 of P.D.
1529 provides:
“The adverse claim shall be effective for a period of thirty
days from the date of registration.”
At first blush, the provision in question would seem to
restrict the effectivity of the adverse claim to thirty days. But
the above provision cannot and should not be treated
separately, but should be read in relation to the sentence
following, which reads:
“After the lapse of said period, the annotation of adverse
claim may be cancelled upon filing of a verified petition
therefor by the party in interest.”
If the rationale of the law was for the adverse claim to ipso
facto lose force and effect after the lapse of thirty days, then
it would not have been necessary to include the foregoing
caveat to clarify and complete the rule. For then, no adverse
claim need be cancelled. If it has been automatically
terminated by mere lapse of time, the law would not have
required the party in interest to do a useless act.
A statute’s clauses and phrases must not be taken separately,
but in its relation to the statute’s totality. Each statute must,
in fact, be construed as to harmonize it with the pre-existing
body of laws. Unless clearly repugnant, provisions of statutes
must be reconciled. The printed pages of the published Act,
its history, origin, and its purposes may be examined by the
courts in their construction. An eminent authority on the
subject matter states the rule candidly:
“A statute is passed as a whole and not in parts or sections,
and is animated by one general purpose and intent.
Consequently, each part or section should be construed in
connection with every other part or section so as to produce
a harmonious whole. It is not proper to confine its intention
to the one section construed. It is always an unsafe way of
construing a statute or contract to divide it by a process of
etymological dissection, into separate words, and then apply
to each, thus separated from the context, some particular
meaning to be attached to any word or phrase usually to be
ascertained from the context.”
6
Construing the provision as a whole would reconcile the
apparent inconsistency between the portions of the law such
that the provision on cancellation of adverse claim by verified
petition would serve to qualify the provision on the
effectivity period. The law, taken together, simply means
that the cancellation of the adverse claim is still necessary to
render it ineffective, otherwise, the inscription will remain
annotated and shall continue as a lien upon the property.
For if the adverse claim has already ceased to be effective
upon the lapse of said period, its cancellation is no longer
necessary and the process of cancellation would be a useless
ceremony.
It should be noted that the law employs the phrase “may be
cancelled”, which obviously indicates, as inherent in its
decision making power, that the court may or may not order
the cancellation of an adverse claim, notwithstanding such
provision limiting the effectivity of an adverse claim for thirty
days from the date of registration. The court cannot be
bound by such period as it would be inconsistent with the
very authority vested in it. A fortiori, the limitation on the
period of effectivity is immaterial in determining the validity
or invalidity of an adverse claim which is the principal issue to
be decided in the court hearing. It will therefore depend
upon the evidence at a proper hearing for the court to
determine whether it will order the cancellation of the
adverse claim or not.
To interpret the effectivity period of the adverse claim as
absolute and without qualification limited to thirty days
defeats the very purpose for which the statute provides for
the remedy of an inscription of adverse claim, as the
annotation of an adverse claim is a measure designed to
protect the interest of a person over a piece of real property
where the registration of such interest or right is not
otherwise provided for by the Land Registration Act or Act
496 (now P.D. 1529 or the Property Registration Decree), and
serves as a warning to third parties dealing with said property
that someone is claiming an interest or the same or a better
right than the registered owner thereof.
The reason why the law provides for a hearing where the
validity of the adverse claim is to be threshed out is to afford
the adverse claimant an opportunity to be heard, providing a
venue where the propriety of his claimed interest can be
established or revoked, all for the purpose of determining at
last the existence of any encumbrance on the title arising

from such adverse claim. This is in line with the provision
immediately following:
“Provided, however, that after cancellation, no second
adverse claim shall be registered by the same claimant.”
Should the adverse claimant fail to sustain his interest in the
property, the adverse claimant will be precluded from
registering a second adverse claim based on the same
ground.
It was held that “validity or efficaciousness of the claim may
only be determined by the Court upon petition by an
interested party, in which event, the Court shall order the
immediate hearing thereof and make the proper adjudication
as justice and equity may warrant. And it is only when such
claim is found unmeritorious that the registration of the
adverse claim may be cancelled, thereby protecting the
interest of the adverse claimant and giving notice and
warning to third parties.”
In sum, the disputed inscription of adverse claim on the
Transfer Certificate of Title No. N-79073 was still in effect on
February 12, 1985 when Quezon City Sheriff Roberto Garcia
annotated the notice of levy on execution thereto.
Consequently, he is charged with knowledge that the
property sought to be levied upon on execution was
encumbered by an interest the same as or better than that of
the registered owner thereof. Such notice of levy cannot
prevail over the existing adverse claim inscribed on the
certificate of title in favor of the petitioners. This can be
deduced from the pertinent provision of the Rules of Court,
to wit:
“Section 16. Effect of levy on execution as to third persons-
The levy on execution shall create a lien in favor of the
judgment creditor over the right, title and interest of the
judgment debtor in such property at the time of the levy,
subject to liens or encumbrances then existing.” (Italics
supplied)
To hold otherwise would be to deprive petitioners of their
property, who waited a long time to complete payments on
their property, convinced that their interest was amply
protected by the inscribed adverse claim.
As lucidly observed by the trial court in the challenged
decision:
“True, the foregoing section provides that an adverse claim
shall be effective for a period of thirty days from the date of
registration. Does this mean however, that the plaintiffs
thereby lost their right over the property in question? Stated
in another, did the lapse of the thirty day period
automatically nullify the contract to sell between the
plaintiffs and the Uychocdes thereby depriving the former of
their vested right over the property?
It is respectfully submitted that it did not.”
As to whether or not the petitioners are buyers in good faith
of the subject property, the same should be made to rest on
the findings of the trial court. As pointedly observed by the
appellate court, “there is no question that plaintiffs-appellees
were not aware of the pending case filed by Pilares against
Uychocde at the time of the sale of the property by the latter
in their favor. This was clearly elicited from the testimony of
Conchita Sajonas, wife of plaintiff, during cross-examination
on April 21, 1988.”
ATTY. REYES
Q- Madam Witness, when Engr. Uychocde and his wife
offered to you and your husband the property subject matter
of this case, they showed you the owner’s transfer
certificate, is it not?
A- Yes, sir.
Q- That was shown to you the very first time that this
lot was offered to you for sale?
A- Yes.
Q- After you were shown a copy of the title and after
you were informed that they are desirous in selling the same,
did you and your husband decide to buy the same?
A- No, we did not decide right after seeing the title.
Of course, we visited...
7
Q- No, you just answer my question. You did not
immediately decide?
A- Yes.
Q- When did you finally decide to buy the same?
A- After seeing the site and after verifying from the
Register of Deeds in Marikina that it is free from
encumbrances, that was the time we decided.
Q- How soon after you were offered this lot did you
verify the exact location and the genuineness of the title, as
soon after this was offered to you?
A- I think it’s one week after they were offered.
A purchaser in good faith and for value is one who buys
property of another without notice that some other person
has a right to or interest in such property and pays a full and
fair price for the same, at the time of such purchase, or
before he has notice of the claims or interest of some other
person in the property. Good faith consists in an honest
intention to abstain from taking any unconscientious
advantage of another. Thus, the claim of the private
respondent that the sale executed by the spouses was made
in fraud of creditors has no basis in fact, there being no
evidence that the petitioners had any knowledge or notice of
the debt of the Uychocdes in favor of the private
respondents, nor of any claim by the latter over the
Uychocdes’ properties or that the same was involved in any
litigation between said spouses and the private respondent.
While it may be stated that good faith is presumed,
conversely, bad faith must be established by competent
proof by the party alleging the same. Sans such proof, the
petitioners are deemed to be purchasers in good faith, and
their interest in the subject property must not be disturbed.
At any rate, the Land Registration Act (Property Registration
Decree) guarantees to every purchaser of registered land in
good faith that they can take and hold the same free from
any and all prior claims, liens and encumbrances except
those set forth on the Certificate of Title and those expressly
mentioned in the ACT as having been preserved against it.
Otherwise, the efficacy of the conclusiveness of the

Certificate of Title which the Torrens system seeks to insure
would be futile and nugatory.
ACCORDINGLY, the assailed decision of the respondent Court
of Appeals dated October 17, 1991 is hereby REVERSED and
SET ASIDE. The decision of the Regional Trial Court dated
February 15, 1989 finding for the cancellation of the notice of
levy on execution from Transfer Certificate of Title No. N-
109417 is hereby REINSTATED.
The inscription of the notice of levy on execution on TCT No.
N-109417 is hereby CANCELLED.
Costs against private respondent.
SO ORDERED.
G.R. No. 147066. March 26, 2001]
AKBAYAN – Youth, SCAP, UCSC, MASP, KOMPIL II – Youth,
ALYANSA, KALIPI, PATRICIA O. PICAR, MYLA GAIL Z.
TAMONDONG, EMMANUEL E. OMBAO, JOHNNY ACOSTA,
ARCHIE JOHN TALAUE, RYAN DAPITAN, CHRISTOPHER
OARDE, JOSE MARI MODESTO, RICHARD M. VALENCIA,
EDBEN TABUCOL, petitioners, vs. COMMISSION ON
ELECTIONS, respondents.
[G.R. No. 147179. March 26, 2001]
MICHELLE D. BETITO, petitioner, vs. CHAIRMAN ALFREDO
BENIPAYO, COMMISSIONERS MEHOL SADAIN, RUFINO
JAVIER, LUZVIMINDA TANCANGCO, RALPH LANTION,
FLORENTINO TUASON and RESURRECCION BORRA, all of the
Commission on Election (COMELEC), respondents.
DECISION
BUENA, J.:
At the helm of controversy in the instant consolidated
petitions before us is the exercise of a right so indubitably
cherished and accorded primacy, if not utmost reverence, no
less than by the fundamental law the right of suffrage.
Invoking this right, herein petitioners representing the
youth sector seek to direct the Commission on Elections
(COMELEC) to conduct a special registration before the May
14, 2001 General Elections, of new voters ages 18 to 21.
According to petitioners, around four million youth failed to
register on or before the December 27, 2000 deadline set by
the respondent COMELEC under Republic Act No. 8189.
Acting on the clamor of the students and civic leaders,
Senator Raul Roco, Chairman of the Committee on Electoral
Reforms, Suffrage, and People’s Participation, through a
Letter dated January 25, 2001, invited the COMELEC to a
public hearing for the purpose of discussing the extension of
the registration of voters to accommodate those who were
not able to register before the COMELEC deadline.
Commissioners Luzviminda G. Tancangco and Ralph C.
Lantion, together with Consultant Resurreccion Z. Borra (now
Commissioner) attended the public hearing called by the
Senate Committee headed by Senator Roco, held at the
Senate, New GSIS Headquarters Bldg., Pasay City.
On January 29, 2001, Commissioners Tancangco and Lantion
submitted Memorandum No. 2001-027 on the Report on the
Request for a Two-day Additional Registration of New Voters
Only, excerpts of which are hereto quoted:
“Please be advised that the undersigned attended the public
hearing called by the Senate Committee on electoral
Reforms, Suffrage and People’s Participation presided over
by the Hon. Sen. Raul Roco, its Committee Chairman to date
at the Senate, New GSIS Headquarters Building, Pasay City.
The main agenda item is the request by youth organizations
to hold additional two days of registration. Thus,
participating students and civic leaders along with Comelec
Representatives were in agreement that is legally feasible to
have a two-day additional registration of voters to be
conducted preferably on February 17 and 18, 2001
nationwide. The deadline for the continuing voters
registration under R.A. 8189 is December 27, 2000.
“To address the concern that this may open the flood parts
for ‘hakot system,’ certain restrictive parameters were
discussed. The following guidelines to serve as safeguards
against fraudulent applicants:
8
“1. The applicants for the registration shall be 25 years
of age or less and will be registering for the first time on May
14, 2001;
“2. The applicants shall register in their places of
residences; and
“3. The applicants shall present valid identification
documents, like school records.
“Preparatory to the registration days, the following activities
are likewise agreed:
“1. Submission of the list of students and their
addresses immediately prior to the actual registration of the
applicants;
“2. The Comelec field officers will be given the
opportunity to verify the voters enumerator’s list or conduct
ocular inspection;
“3. Availability of funds for the purpose; and
“4. Meetings with student groups to ensure orderly
and honest conduct of the registration and drum up interest
to register among the new voters.
“The rationale for the additional two-day registration is the
renewed political awareness and interest to participate in the
political process generated by the recent political events in
the country among our youth. Considering that they failed to
register on December 27, 2000 deadline, they approved for
special registration days.
“In view of the foregoing, the Commission en banc has to
discuss all aspects regarding this request with directives to
the Finance Services Department (FSD) to submit certified
available funds for the purpose, and for the Deputy
Executive Director for Operations (DEDO) for the estimated
costs of additional two days of registration.
“The presence of REDs on January 30 can be used partly for
consultation on the practical side and logistical requirements
of such additional registration days. The meeting will be set
at 1:30 p.m. at the Office of ED.”

Immediately, Commissioner Borra called a consultation
meeting among regional heads and representatives and a
number of senior staff headed by Executive Director
Mamasapunod Aguam. It was the consensus of the group,
with the exception of Director Jose Tolentino, Jr. of the ASD,
to disapprove the request for additional registration of voters
on the ground that Section 8 of R.A. 8189 explicitly provides
that no registration shall be conducted during the period
starting one hundred twenty (120) days before a regular
election and that the Commission has no more time left to
accomplish all pre-election activities.
On February 8, 2001, the COMELEC issued Resolution No.
3584, the decretal portion of which reads:
“Deliberating on the foregoing memoranda, the Commission
RESOLVED, as it hereby RESOLVES, to deny the request to
conduct a two-day additional registration of new voters on
February 17 and 18, 2001.”
Commissioners Rufino S. B. Javier and Mehol K. Sadain voted
to deny the request while Commissioners Luzviminda
Tancangco and Ralph Lantion voted to accommodate the
students’ request. With this impasse, the Commission
construed its Resolution as having taken effect.
Aggrieved by the denial, petitioners AKBAYAN-Youth, SCAP,
UCSC, MASP, KOMPIL II (YOUTH) et al. filed before this Court
the instant Petition for Certiorari and Mandamus, docketed
as G.R. No. 147066, which seeks to set aside and nullify
respondent COMELEC’s Resolution and/or to declare Section
8 of R. A. 8189 unconstitutional insofar as said provision
effectively causes the disenfranchisement of petitioners and
others similarly situated. Likewise, petitioners pray for the
issuance of a writ of mandamus directing respondent
COMELEC to conduct a special registration of new voters and
to admit for registration petitioners and other similarly
situated young Filipinos to qualify them to vote in the May
14, 2001 General Elections.
On March 09, 2001, herein petitioner Michelle Betito, a
student of the University of the Philippines, likewise filed a
Petition for Mandamus, docketed as G.R. No. 147179,
praying that this Court direct the COMELEC to provide for
another special registration day under the continuing
registration provision under the Election Code.
On March 13, 2001, this Court resolved to consolidate the
two petitions and further required respondents to file their
Comment thereon within a non-extendible period expiring at
10:00 A.M. of March 16, 2001. Moreover, this Court resolved
to set the consolidated cases for oral arguments on March
16, 2001.
On March 16, 2001, the Solicitor General, in its Manifestation
and Motion in lieu of Comment, recommended that an
additional continuing registration of voters be conducted at
the soonest possible time “in order to accommodate that
disenfranchised voters for purposes of the May 14, 2001
elections.”
In effect, the Court in passing upon the merits of the present
petitions, is tasked to resolve a two-pronged issue focusing
on respondent COMELEC’s issuance of the assailed
Resolution dated February 8, 2001, which Resolution,
petitioners, by and large, argue to have undermined their
constitutional right to vote on the May 14, 2001 general
elections and caused the disenfranchisement of around four
(4) million Filipinos of voting age who failed to register before
the registration deadline set by the COMELEC.
Thus, this Court shall determine:
a) Whether or not respondent COMELEC committed
grave abuse of discretion in issuing COMELEC Resolution
dated February 8, 2001;
b) Whether or not this Court can compel respondent
COMELEC, through the extraordinary writ of mandamus, to
conduct a special registration of new voters during the period
between the COMELEC’s imposed December 27, 2000
deadline and the May 14, 2001 general elections.
The petitions are bereft of merit.
In a representative democracy such as ours, the right of
suffrage, although accorded a prime niche in the hierarchy of
rights embodied in the fundamental law, ought to be
exercised within the proper bounds and framework of the
Constitution and must properly yield to pertinent laws
skillfully enacted by the Legislature, which statutes for all
intents and purposes, are crafted to effectively insulate such
so cherished right from ravishment and preserve the
9
democratic institutions our people have, for so long, guarded
against the spoils of opportunism, debauchery and abuse.
To be sure, the right of suffrage ardently invoked by herein
petitioners, is not at all absolute. Needless to say, the
exercise of the right of suffrage, as in the enjoyment of all
other rights, is subject to existing substantive and procedural
requirements embodied in our Constitution, statute books
and other repositories of law. Thus, as to the substantive
aspect, Section 1, Article V of the Constitution provides:
“SECTION 1. SUFFRAGE MAY BE EXERCISED BY ALL CITIZENS
OF THE PHILIPPINES NOT OTHERWISE DISQUALIFIED BY LAW,
WHO ARE AT LEAST EIGHTEEN YEARS OF AGE, AND WHO
SHALL HAVE RESIDED IN THE PHILIPPINES FOR AT LEAST ONE
YEAR AND IN THE PLACE WHEREIN THEY PROPOSE TO VOTE
FOR AT LEAST SIX MONTHS IMMEDIATELY PRECEDING THE
ELECTIONS. NO LITERACY, PROPERTY, OR OTHER
SUBSTANTIVE REQUIREMENT SHALL BE IMPOSED ON THE
EXERCISE OF SUFFRAGE.”
As to the procedural limitation, the right of a citizen to vote is
necessarily conditioned upon certain procedural
requirements he must undergo: among others, the process of
registration. Specifically, a citizen in order to be qualified to
exercise his right to vote, in addition to the minimum
requirements set by the fundamental charter, is obliged by
law to register, at present, under the provisions of Republic
Act No. 8189, otherwise known as the “Voter’s Registration
Act of 1996.”
Stated differently, the act of registration is an indispensable
precondition to the right of suffrage. For registration is part
and parcel of the right to vote and an indispensable element
in the election process. Thus, contrary to petitioners’
argument, registration cannot and should not be denigrated
to the lowly stature of a mere statutory requirement.
Proceeding from the significance of registration as a
necessary requisite to the right to vote, the State
undoubtedly, in the exercise of its inherent police power,
may then enact laws to safeguard and regulate the act of
voter’s registration for the ultimate purpose of conducting
honest, orderly and peaceful election, to the incidental yet
generally important end, that even pre-election activities
could be performed by the duly constituted authorities in a
realistic and orderly manner – one which is not indifferent

and so far removed from the pressing order of the day and
the prevalent circumstances of the times.
Viewed broadly, existing legal proscription and pragmatic
operational considerations bear great weight in the
adjudication of the issues raised in the instant petitions.
On the legal score, Section 8, of the R.A. 8189, which
provides a system of continuing registration, is explicit, to
wit:
“SEC. 8. System of Continuing Registration of Voters. – The
Personal filing of application of registration of voters shall be
conducted daily in the office of the Election Officer during
regular office hours. No registration shall, however, be
conducted during the period starting one hundred twenty
(120) days before a regular election and ninety (90) days
before a special election.” (Emphasis Ours)
Likewise, Section 35 of R.A. 8189, which among others,
speaks of a prohibitive period within which to file a sworn
petition for the exclusion of voters from the permanent
voter’s list, provides:
“SEC. 35. Petition for Exclusion of Voters from the List – Any
registered voter, representative of a political party x x x may
file x x x except one hundred (100) days prior to a regular
election xxx.”
As aptly observed and succinctly worded by respondent
COMELEC in its Comment:
“x x x The petition for exclusion is a necessary component to
registration since it is a safety mechanism that gives a
measure of protection against flying voters, non-qualified
registrants, and the like. The prohibitive period, on the other
hand serves the purpose of securing the voter’s substantive
right to be included in the list of voters.
“In real-world terms, this means that if a special voter’s
registration is conducted, then the prohibitive period for
filing petitions for exclusion must likewise be adjusted to a
later date. If we do not, then no one can challenge the
Voter’s list since we would already be well into the 100-day
prohibitive period. Aside from being a flagrant breach of the
principles of due process, this would open the registration
process to abuse and seriously compromise the integrity of
the voter’s list, and consequently, that of the entire election.
“x x x It must be remembered that the period serve a vital
role in protecting the integrity of the registration process.
Without the prohibitive periods, the COMELEC would be
deprived of any time to evaluate the evidence on the
application. We would be obliged to simply take them at
face value. If we compromise on these safety nets, we may
very well end up with a voter’s list full of flying voters,
overflowing with unqualified registrants, populated with
shadows and ghosts x x x.
“x x x The short cuts that will have to be adopted in order to
fit the entire process of registration within the last 60 days
will give rise to haphazard list of voters, some of whom might
not even be qualified to vote. x x x the very possibility that
we shall be conducting elections on the basis of an inaccurate
list is enough to cast a cloud of doubt over the results of the
polls. If that happens, the unforgiving public will disown the
results of the elections, regardless of who wins, and
regardless of how many courts validate our own results. x x
x”
Perhaps undaunted by such scenario, petitioners invoke the
so called “standby” powers or “residual” powers of the
COMELEC, as provided under the relevant provisions of
Section 29, Republic Act No. 6646 and adopted verbatim in
Section 28 of Republic Act No. 8436, thus:
“SEC. 28. Designation of other Dates for Certain Pre-election
Acts - If it should no longer be possible to observe the
periods and dates prescribed by law for certain pre-election
acts, the Commission shall fix other periods and dates in
order to ensure accomplishments of the activities so voters
shall not be deprived of their right to suffrage.”
On this matter, the act of registration is concededly, by its
very nature, a pre-election act. Under Section 3(a) of R.A.
8189, registration, as a process, has its own specific
definition, precise meaning and coverage, thus:
“a) Registration refers to the act of accomplishing and filing
of a sworn application for registration by a qualified voter
before the election officer of the city or municipality wherein
10
he resides and including the same in the book of registered
voters upon approval by the Election Registration Board;”
At this point, it bears emphasis that the provisions of Section
29 of R.A. 8436 invoked by herein petitioners and Section 8
of R.A. 8189 volunteered by respondent COMELEC, far from
contradicting each other, actually share some common
ground. True enough, both provisions, although at first
glance may seem to be at war in relation to the other, are in
a more circumspect perusal, necessarily capable of being
harmonized and reconciled.
Rudimentary is the principle in legal hermeneutics that
changes made by the legislature in the form of amendments
to a statute should be given effect, together with other parts
of the amended act. It is not to be presumed that the
legislature, in making such changes, was indulging in mere
semantic exercise. There must be some purpose in making
them, which should be ascertained and given effect.
Similarly, every new statute should be construed in
connection with those already existing in relation to the
same subject matter and all should be made to harmonize
and stand together, if they can be done by any fair and
reasonable interpretation. Interpretare et concordare
legibus est optimus interpretandi, which means that the best
method of interpretation is that which makes laws consistent
with other laws. Accordingly, courts of justice, when
confronted with apparently conflicting statutes, should
endeavor to reconcile them instead of declaring outright the
invalidity of one against the other. Courts should harmonize
them, if this is possible, because they are equally the
handiwork of the same legislature.
In light of the foregoing doctrine, we hold that Section 8 of
R.A. 8189 applies in the present case, for the purpose of
upholding the assailed COMELEC Resolution and denying the
instant petitions, considering that the aforesaid law explicitly
provides that no registration shall be conducted during the
period starting one hundred twenty (120) days before a
regular election.
Corollarily, it is specious for herein petitioners to argue that
respondent COMELEC may validly and legally conduct a two-
day special registration, through the expedient of the letter
of Section 28 of R.A. 8436. To this end, the provisions of

Section 28, R.A. 8436 would come into play in cases where
the pre-election acts are susceptible of performance within
the available period prior to election day. In more
categorical language, Section 28 of R.A. 8436 is, to our mind,
anchored on the sound premise that these certain “pre-
election acts” are still capable of being reasonably performed
vis-a-vis the remaining period before the date of election and
the conduct of other related pre-election activities required
under the law.
In its Comment, respondent COMELEC—which is the
constitutional body tasked by no less than the fundamental
charter (Sec. 2, par. 3, Article IX-C of the Constitution) to
decide, except those involving the right to vote, all questions
affecting elections, including registration of voters—
painstakingly and thoroughly emphasized the “operational
impossibility” of conducting a special registration, which in its
on language, “can no longer be accomplished within the time
left to (us) the Commission.”
Hence:
“xxx xxx xxx.
“19) In any case, even without the legal obstacles, the
last 60 days will not be a walk in the park for the Comelec.
Allow us to outline what the Commission has yet to do, and
the time to do it in:
“20) First we have to complete the Project of Precincts
by the 19th of March. The Projects of Precincts Indicate the
total number of established precincts and the number of
registered voters per precincts in a city or municipality.
Without the final Project of Precincts, we cannot even
determine the proper allocation of official ballots, election
returns and other election forms and paraphernalia. More
succinctly said, without the Project of Precincts, we won’t
know how many forms to print and so we’re liable to come
up short.
“21) More Importantly, without a completed Project of
Precincts, it will be impossible to complete the rest of the
tasks that must be accomplished prior to the elections.
“22) Second, the Board of Elections Inspectors must be
constituted on or before the 4th of March. In addition, the
list of the members of the BEI — including the precinct where
they are assigned and the barangay where that precinct is
located - must be furnished by the Election Officer to all the
candidates and political candidates not later than the 26th of
March.
“23) Third, the Book of Voters, which contains the
approved Voter Registration Records of registered voters in
particular precinct, must be inspected, verified, and sealed
beginning March 30, until April 15.
“24) Fourth, the Computerized Voters’ List must be
finalized and printed out of use on election day; and finally
“25) Fifth, the preparation, bidding, printing, and
distribution of the Voters Information Sheet must be
completed on or before April 15.
“26) With this rigorous schedule of pre-election
activities, the Comelec will have roughly a month that will act
as a buffer against any number of unforeseen occurrences
that might delay the elections. This is the logic and the
wisdom behind setting the 120-day prohibitive period. After
all, preparing for an election is no easy task.
“27) To hold special registrations now would, aside from
being Illegal, whittle that approximately 30-day margin away
to nothing.
“28) When we say registration of voters, we do not -
contrary to popular opinion - refer only to the act of going to
the Election Officer and writing our names down.
Registration is, In fact, a long process that takes about three
weeks to complete not even counting how long it would take
to prepare for the registration in the first place.
“29) In order to concretize, the senior Staff of the
Comelec, the other Commissioners, prepared a time-table in
order to see exactly how the superimposition of special
registration would affect the on-going preparation for the
May 14 elections.
“30) We assumed for the sake of argument that we
were to hold the special registration on April 16 and 17.
These are not arbitrary numbers, by the way it takes in
11
account the fact that we only have about 800,000 Voters
Registration Forms available, as against an estimated 4.5
million potential registrants, and it would take about 14 days
— If we were to declare special registrations today — to print
up the difference and to verify these accountable forms.
After printing and verification, the forms would have to be
packed and shipped - roughly taking up a further two and a
half weeks. Only then can we get on with registration.
“31) The first step in registration is, of course, filling the
application for registration with the Election Officer. The
application, according to Section 17 of R.A. 8189, is then set
for hearing, with notice of that hearing being posted in the
city or municipal bulletin board for at least one week prior.
Thus, if we held registrations on the 16th and the 17th the
posting requirement would be completed by the 24th.
Considering that time must be allowed for the filling of
oppositions, the earliest that the Election Registration Board
can be convened for hearing would be the May 1st and 2nd.
“32) Assuming — and this is a big assumption — that
there are nit challenges to the applicant’s right to register,
the Election registration Board can immediately rule on the
Applicant’s registration, and post notices of its action by the
2nd until the 7th of May. By the 10th, copies of the notice of
the action taken by the Board will have already been
furnished to the applicants and the heads of registered
political parties.
“33) Only at this point can our Election Officers once
again focus on the business of getting ready for the elections.
Once the results of the special registration are finalized, they
can be encoded and a new Computerized Voters’ List
generated - at the earliest, by May 11, after which the new
CVL would be posted. Incidentally, it we were to follow the
letter of the law strictly, a May 11 posting date for the new
CVL would be improper since the R.A. 8189 provides that the
CVL be posted at least 90 days before the election.
“34) Assuming optimistically that we can then finish the
inspection, verification, and sealing of the Book if Voters by
May 15, we will already have overshot the May 14, election
date, and still not have finished our election preparations.
“35) After this point, we could have to prepare the
allocation of Official Ballots, Election Returns, and other Non-

Accountable Forms and Supplies to be used for the new
registrants. Once the allocation is ready, the contracts would
be awarded, the various forms printed, delivered, verified,
and finally shipped out to the different municipalities. All
told, this process would take approximately 26 days, from
the 15th of May until June 10.
“36) Only then can we truly say that we are ready to
hold the elections.
“xxx xxx xxx.”
It is an accepted doctrine in administrative law that the
determination of administrative agency as to the operation,
implementation and application of a law would be accorded
great weight considering that these specialized government
bodies are, by their nature and functions, in the best position
to know what they can possibly do or not do, under
prevailing circumstances.
Beyond this, it is likewise well-settled that the law does not
require that the impossible be done. The law obliges no one
to perform an impossibility, expressed in the maxim, nemo
tenetur ad impossible. In other words, there is no obligation
to do an impossible thing. Impossibilium nulla obligato est.
Hence, a statute may not be so construed as to require
compliance with what it prescribes cannot, at the time, be
legally, coincidentally, it must be presumed that the
legislature did not at all intend an interpretation or
application of a law which is far removed from the realm of
the possible. Truly, in the interpretation of statutes, the
interpretation to be given must be such that it is in
accordance with logic, common sense, reasonableness and
practicality. Thus, we are of the considered view that the
“stand-by power” of the respondent COMELEC under Section
28 of R.A. 8436, presupposes the possibility of its being
exercised or availed of, and not otherwise.
Further, petitioners’ bare allegation that they were
disenfranchised when respondent COMELEC pegged the
registration deadline on December 27, 2000 instead of
January 13, 2001 – the day before the period before the May
14, 2001 regular elections commences – is, to our mind, not
sufficient. On this matter, there is no allegation in the two
consolidated petitions and the records are bereft of any
showing that anyone of herein petitioners has filed an
application to be registered as a voter which was denied by
the COMELEC nor filed a complaint before the respondent
COMELEC alleging that he or she proceeded to the Office of
the Election Officer to register between the period starting
from December 28, 2000 to January 13, 2001, and that he or
she was disallowed or barred by respondent COMELEC from
filing his application for registration. While it may be true
that respondent COMELEC set the registration deadline on
December 27, 2000, this Court is of the Firm view that
petitioners were not totally denied the opportunity to avail
of the continuing registration under R.A. 8189. Stated in a
different manner, the petitioners in the instant case are not
without fault or blame. They admit in their petition that they
failed to register, for whatever reason, within the period of
registration and came to this Court and invoked its protective
mantle not realizing, so to speak, the speck in their eyes.
Impuris minibus nemo accedat curiam. Let no one come to
court with unclean hands.
In a similar vein, well-entrenched is the rule in our
jurisdiction that the law aids the vigilant and not those who
slumber on their rights. Vigilantis sed non dormientibus jura
in re subveniunt.
Applying the foregoing, this court is of the firm view that
respondent COMELEC did not commit an abuse of discretion,
much less be adjudged to have committed the same in some
patent, whimsical and arbitrary manner, in issuing Resolution
No. 3584 which, in respondent’s own terms, resolved “to
deny the request to conduct a two-day additional registration
of new voters on February 17 and 18, 2001.”
On this particular matter, grave abuse of discretion implies a
capricious and whimsical exercise of judgment as is
equivalent to lack of jurisdiction, or, when the power is
exercised in an arbitrary or despotic manner by reason of
passion or personal hostility, and it must be so patent and
gross as to amount to an evasion of positive duty enjoined or
to act at all in contemplation of laws.
Under these circumstances, we rule that the COMELEC, in
denying the request of petitioners to hold a special
registration, acted within the bounds and confines of the
applicable law on the matter --Section 8 of RA 8189. In
issuing the assailed Resolution, respondent COMELEC simply
performed its constitutional task to enforce and administer
12
all laws and regulations relative to the conduct of an election,
inter alia, questions relating to the registration of voters;
evidently, respondent COMELEC merely exercised a
prerogative that chiefly pertains to it and one which squarely
falls within the proper sphere of its constitutionally-
mandated powers. Hence, whatever action respondent takes
in the exercise of its wide latitude of discretion, specifically
on matters involving voters’ registration, pertains to the
wisdom rather than the legality of the act. Accordingly, in
the absence of clear showing of grave abuse of power of
discretion on the part of respondent COMELEC, this Court
may not validly conduct an incursion and meddle with affairs
exclusively within the province of respondent COMELEC– a
body accorded by no less than the fundamental law with
independence.
As to petitioners’ prayer for the issuance of the writ of
mandamus, we hold that this Court cannot, in view of the
very nature of such extraordinary writ, issue the same
without transgressing the time-honored principles in this
jurisdiction.
As an extraordinary writ, the remedy of mandamus lies only
to compel an officer to perform a ministerial duty, not a
discretionary one; mandamus will not issue to control the
exercise of discretion of a public officer where the law
imposes upon him the duty to exercise his judgment in
reference to any manner in which he is required to act,
because it is his judgment that is to be exercised and not that
of the court.
Considering the circumstances where the writ of mandamus
lies and the peculiarities of the present case, we are of the
firm belief that petitioners failed to establish, to the
satisfaction of this Court, that they are entitled to the
issuance of this extraordinary writ so as to effectively compel
respondent COMELEC to conduct a special registration of
voters. For the determination of whether or not the conduct
of a special registration of voters is feasible, possible or
practical within the remaining period before the actual date
of election, involves the exercise of discretion and thus,
cannot be controlled by mandamus.
In Bayan vs. Executive Secretary Zamora and related cases,
we enunciated that the Court’s function, as sanctioned by
Article VIII, Section 1, is “merely (to) check whether or not

the governmental branch or agency has gone beyond the
constitutional limits of its jurisdiction, not that it erred or has
a different view. In the absence of a showing...(of) grave
abuse of discretion amounting to lack of jurisdiction, there is
no occasion for the Court to exercise its corrective power... It
has no power to look into what it thinks is apparent error.”
Finally, the Court likewise takes judicial notice of the fact that
the President has issued Proclamation No. 15 calling
Congress to a Special Session on March 19, 2001, to allow the
conduct of Special Registration of new voters. House Bill No.
12930 has been filed before the Lower House, which bill
seeks to amend R.A. 8189 as to the 120-day prohibitive
period provided for under said law. Similarly, Senate Bill No.
2276 was filed before the Senate, with the same intention to
amend the aforesaid law and, in effect, allow the conduct of
special registration before the May 14, 2001 General
Elections. This Court views the foregoing factual
circumstances as a clear intimation on the part of both the
executive and legislative departments that a legal obstacle
indeed stands in the way of the conduct by the Commission
on Elections of a special registration before the May 14, 2001
General Elections.
WHEREFORE, premises considered, the instant petitions for
certiorari and mandamus are hereby DENIED.
SO ORDERED.
[G.R. No. 132624. March 13, 2000]
FIDEL M. BAÑARES II, LILIA C. VALERIANO, EDGAR M.
BAÑARES, EMILIA GATCHALIAN and FIDEL BESARINO,
petitioners, vs. ELIZABETH BALISING, ROGER ALGER,
MERLINDA CAPARIC, EUSTAQUIO R. TEJONES, ANDREA
SAYAM, JENNY ISLA, WILMA ROGATERO, PABLITO ALEGRIA,
ROLANDO CANON, EDITHA ESTORES, EDMUNDO DOROYA,
TERESITA GUION, DANNY ANDARAYAN, LOURDES CADAY,
ROGELIO MANO, EVANGELINE CABILTES AND PUBLIC
PROSECUTOR OF RIZAL, Antipolo, Rizal, respondents.
DECISION
KAPUNAN, J.:
This is a petition for review on certiorari under Rule 45 of the
Decision of the Regional Trial Court of Antipolo, Rizal, Branch
71 dated August 26, 1997.
The antecedent facts are as follows:
Petitioners Fidel M. Bañares II, Lilia C. Valeriano, Edgar M.
Bañares, Emilia Gatchialian and Fidel Besarino were the
accused in sixteen criminal cases for estafa filed by the
private respondents. The cases were assigned to the
Municipal Trial Court of Antipolo, Rizal, Branch II.
After the petitioners were arraigned and entered their plea
of not guilty, they filed a Motion to Dismiss the
aforementioned cases on the ground that the filing of the
same was premature, in view of the failure of the parties to
undergo conciliation proceedings before the Lupong
Tagapamayapa of Barangay Dalig, Antipolo, Rizal. Petitioners
averred that since they lived in the same barangay as private
respondents, and the amount involved in each of the cases
did not exceed Two Hundred Pesos (P200.00), the said cases
were required under Section 412 in relation to Section 408 of
the Local Government Code of 1991 and Section 18 of the
1991 Revised Rule on Summary Procedure. to be referred to
the Lupong Tagapamayapa or Pangkat ng Tagapagkasundo
of the barangay concerned for conciliation proceedings
before being filed in court.
The municipal trial court issued an Order, dated July 17, 1995
denying petitioners’ Motion to Dismiss on the ground that
they failed to seasonably invoke the non-referral of the cases
to the Lupong Tagapamayapa or Pangkat ng
Tagapagkasundo. It added that such failure to invoke non-
referral of the case to the Lupon amounted to a waiver by
petitioners of the right to use the said ground as basis for
dismissing the cases.
Petitioners filed a motion for reconsideration of the
aforementioned Order, claiming that nowhere in the Revised
Rules of Court is it stated that the ground of prematurity shall
be deemed waived if not raised seasonably in a motion to
dismiss.
On November 13, 1995, the municipal trial court issued an
Order dismissing the sixteen criminal cases against
13
petitioners without prejudice, pursuant to Section 18 of the
1991 Revised Rule on Summary Procedure.
More than two months later, on February 26, 1996, private
respondents through counsel, filed a Motion to Revive the
abovementioned criminal cases against petitioners, stating
that the requirement of referral to the Lupon for conciliation
had already been complied with. Attached to the motion
was a Certification dated February 13, 1996 from the Lupong
Tagapamayapa of Barangay Dalig, Antipolo, Rizalstating that
the parties appeared before said body regarding the charges
of estafa filed by private respondents against petitioners but
they failed to reach an amicable settlement with respect
thereto. Petitioners filed a Comment and Opposition to
Motion to Revive claiming that the Order of the municipal
trial court, dated November 13, 1995 dismissing the cases
had long become final and executory; hence, private
respondents should have re-filed the cases instead of filing a
motion to revive.
On March 18, 1996, the municipal trial court issued an Order
granting private respondents’ Motion to Revive. Petitioners
filed a Motion for Reconsideration of the aforementioned
Order which was denied by the municipal trial court.
Petitioners thereafter filed with the Regional Trial Court of
Antipolo, Rizal, a petition for certiorari, injunction and
prohibition assailing the Order dated March 18, 1996 of the
municipal trial court. They claimed that the said Order dated
November 13, 1995 dismissing the criminal cases against
them had long become final and executory considering that
the prosecution did not file any motion for reconsideration of
said Order. In response thereto, private respondents filed
their Comment, arguing that the motion to revive the said
cases was in accordance with law, particularly Section 18 of
the Revised Rule on Summary Procedure.
After the parties submitted additional pleadings to support
their respective contentions, the Regional Trial Court
rendered the assailed Decision denying the petition for
certiorari, injunction and prohibition, stating as follows:
Evaluating the allegations contained in the petition and
respondents’ comment thereto, the Court regrets that it
cannot agree with the petitioner(sic). As shown by the
records the 16 criminal cases were dismissed without

prejudice at the instance of the petitioners for failure of the
private respondent to comply with the mandatory
requirement of PD 1508. Since the dismissal of said cases was
without prejudice, the Court honestly believes that the
questioned order has not attained finality at all.
WHEREFORE, premises considered, the petition is hereby
DENIED for lack of merit.
SO ORDERED.
The Regional Trial Court, likewise, denied petitioners’ Motion
for Reconsideration of the aforementioned Decision for lack
of merit.
Hence, this Petition.
Petitioners raise the following questions of law:
1. Whether or not an order dismissing a case or action
without prejudice may attain finality if not appealed within
the reglementary period, as in the present case;
2. Whether or not the action or case that had been dismissed
without prejudice may be revived by motion after the order
of dismissal had become final and executory; and
3. Whether or not the court that had originally acquired
jurisdiction of the case that was dismissed without prejudice
still has jurisdiction to act on the motion to revive after the
order of dismissal has become final and executory.
Petitioners contend that an order dismissing a case or action
without prejudice may attain finality if not appealed within
the reglementary period. Hence, if no motion to revive the
case is filed within the reglementary fifteen-day period
within which to appeal or to file a motion for reconsideration
of the court’s order, the order of dismissal becomes final and
the case may only be revived by the filing of a new complaint
or information. Petitioners further argue that after the order
of dismissal of a case attains finality, the court which issued
the same loses jurisdiction thereon and, thus, does not have
the authority to act on any motion of the parties with respect
to said case.
On the other hand, private respondents submit that cases
covered by the 1991 Revised Rule on Summary Procedure
such as the criminal cases against petitioners are not covered
by the rule regarding finality of decisions and orders under
the Revised Rules of Court. They insist that cases dismissed
without prejudice for non-compliance with the requirement
of conciliation before the Lupong Tagapamayapa or Pangkat
ng Tagapagkasundo of the barangay concerned may be
revived summarily by the filing of a motion to revive
regardless of the number of days which has lapsed after the
dismissal of the case.
Petitioners’ contentions are meritorious.
A "final order" issued by a court has been defined as one
which disposes of the subject matter in its entirety or
terminates a particular proceeding or action, leaving nothing
else to be done but to enforce by execution what has been
determined by the court. As distinguished therefrom, an
"interlocutory order" is one which does not dispose of a case
completely, but leaves something more to be adjudicated
upon.
This Court has previously held that an order dismissing a case
without prejudice is a final order if no motion for
reconsideration or appeal therefrom is timely filed.
In Olympia International vs. Court of Appeals, we stated thus:
The dismissal without prejudice of a complaint does not
however mean that said dismissal order was any less final.
Such order of dismissal is complete in all details, and though
without prejudice, nonetheless finally disposed of the
matter. It was not merely an interlocutory order but a final
disposition of the complaint.
The law grants an aggrieved party a period of fifteen (15)
days from his receipt of the court’s decision or order
disposing of the action or proceeding to appeal or move to
reconsider the same.
After the lapse of the fifteen-day period, an order becomes
final and executory and is beyond the power or jurisdiction of
the court which rendered it to further amend or revoke. A
final judgment or order cannot be modified in any respect,
even if the modification sought is for the purpose of
14
correcting an erroneous conclusion by the court which
rendered the same.
After the order of dismissal of a case without prejudice has
become final, and therefore becomes outside the court’s
power to amend and modify, a party wishes to reinstate the
case has no other remedy but to file a new complaint.
This was explained in Ortigas & Company Limited Partnership
vs. Velasco, where we ruled thus:
The dismissal of the case, and the lapse of the reglementary
period to reconsider or set aside the dismissal, effectively
operated to remove the case from the Court’s docket. Even
assuming the dismissal to be without prejudice, the case
could no longer be reinstated or "revived" by mere motion
in the original docketed action, but only by the filing of
another complaint accompanied, of course, by the payment
of the corresponding filing fees prescribed by law.
xxx
[S]ince theoretically every final disposition of an action does
not attain finality until after fifteen (15) days therefrom, and
consequently within that time the action still remains within
the control of the Court, the plaintiff may move and set aside
his notice of dismissal and revive his action before that
period lapses. But after dismissal has become final after the
lapse of the fifteen-day reglementary period, the only way
by which the action may be resuscitated or "revived" is by
the institution of a subsequent action through the filing of
another complaint and the payment of fees prescribed by
law. This is so because upon attainment of finality of the
dismissal through the lapse of said reglementary period, the
Court loses jurisdiction and control over it and can no longer
make a disposition in respect thereof inconsistent with such
dismissal. (Emphasis supplied.)
Contrary to private respondents’ claim, the foregoing rule
applies not only to civil cases but to criminal cases as well. In
Jaca vs. Blanco, the Court defined a provisional dismissal of a
criminal case as a dismissal without prejudice to the
reinstatement thereof before the order of dismissal becomes
final or to the subsequent filing of a new information for the
offense."

Thus, the Regional Trial Court erred when it denied the
petition for certiorari, injunction and prohibition and ruled
that the order of the municipal trial court, dated November
13, 1995 dismissing without prejudice the criminal cases
against petitioners had not attained finality and hence, could
be reinstated by the mere filing of a motion to revive.
Equally erroneous is private respondents’ contention that the
rules regarding finality of judgments under the Revised Rules
of Court do not apply to cases covered by the 1991 Revised
Rule on Summary Procedure. Private respondents claim that
Section 18 of the 1991 Revised Rule on Summary Procedure
allows the revival of cases which were dismissed for failure to
submit the same to conciliation at the barangay level, as
required under Section 412 in relation to Section 408 of the
Local Government Code. The said provision states:
Referral to Lupon. – Cases requiring referral to the Lupon for
conciliation under the provisions of Presidential Decree No.
1508 where there is no showing of compliance with such
requirement, shall be dismissed without prejudice, and may
be revived only after such requirement shall have been
complied with. This provision shall not apply to criminal cases
where the accused was arrested without a warrant.
There is nothing in the aforecited provision which supports
private respondents’ view. Section 18 merely states that
when a case covered by the 1991 Revised Rule on Summary
Procedure is dismissed without prejudice for non-referral of
the issues to the Lupon, the same may be revived only after
the dispute subject of the dismissed case is submitted to
barangay conciliation as required under the Local
Government Code. There is no declaration to the effect that
said case may be revived by mere motion even after the
fifteen-day period within which to appeal or to file a motion
for reconsideration has lapsed.
Moreover, the 1991 Revised Rule on Summary Procedure
expressly provides that the Rules of Court applies
suppletorily to cases covered by the former:
Sec. 22. Applicability of the regular rules. – The regular
procedure prescribed in the Rules of Court shall apply to the
special cases herein provided for in a suppletory capacity
insofar as they are not inconsistent therewith.
A careful examination of Section 18 in relation to Section 22
of the 1991 Revised Rule of Summary Procedure and Rule 40,
Section 2 in relation to Rule 13, Sections 9 and 10, and Rule
36, Section 2 of the 1997 Rules of Civil Procedure, as
amended, leads to no other conclusion than that the rules
regarding finality of judgments also apply to cases covered by
the rules on summary procedure. Nothing in Section 18 of
the 1991 Revised Rule on Summary Procedure conflicts with
the prevailing rule that a judgment or order which is not
appealed or made subject of a motion for reconsideration
within the prescribed fifteen-day period attains finality.
Hence, the principle expressed in the maxim interpretare et
concordare legibus est optimus interpretandi, or that every
statute must be so construed and harmonized with other
statutes as to form a uniform system of jurisprudence applies
in interpreting both sets of Rules.
The rationale behind the doctrine of finality of judgments
and orders, likewise, supports our conclusion that said
doctrine applies to cases covered by the 1991 Revised Rule
on Summary Procedure:
The doctrine of finality of judgments is grounded on
fundamental considerations of public policy and sound
practice that at the risk of occasional error, the judgments of
the courts must become final at some definite date set by
law.
It is but logical to infer that the foregoing principle also
applies to cases subject to summary procedure especially
since the objective of the Rule governing the same is
precisely to settle these cases expeditiously. To construe
Section 18 thereof as allowing the revival of dismissed cases
by mere motion even after the lapse of the period for
appealing the same would prevent the courts from settling
justiciable controversies with finality, thereby undermining
the stability of our judicial system.
The Court also finds it necessary to correct the mistaken
impression of petitioners and the municipal trial court that
the non-referral of a case for barangay conciliation as
required under the Local Government Code of 1991 may be
raised in a motion to dismiss even after the accused has been
arraigned.
15
It is well-settled that the non-referral of a case for barangay
conciliation when so required under the law is not
jurisdictional in nature and may therefore be deemed waived
if not raised seasonably in a motion to dismiss. The Court
notes that although petitioners could have invoked the
ground of prematurity of the causes of action against them
due to the failure to submit the dispute to Lupon prior to the
filing of the cases as soon as they received the complaints
against them, petitioners raised the said ground only after
their arraignment.
However, while the trial court committed an error in
dismissing the criminal cases against petitioners on the
ground that the same were not referred to the Lupon prior to
the filing thereof in court although said ground was raised by
them belatedly, the said order may no longer be revoked at
present considering that the same had long become final and
executory, and as earlier stated, may no longer be annulled
by the Municipal Trial Court, nor by the Regional Trial Court
or this Court.
WHEREFORE, the petition is hereby GRANTED. The Decision
of the Regional Trial Court of Antipolo, Rizal, Branch II dated
August 26, 1997 and its Order dated January 29, 1998 in SCA
Case No. 96-4092 are hereby SET ASIDE and Criminal Cases
Nos. 94-0829, 94-0830, 94-0831, 94-0832, 94-0833, 94-0836,
94-0838, 94-0839, 94-0841, 94-0843, 94-0847, 94-0848, 94-
0850, 94-0854 and 94-0058 of the Municipal Trial Court of
Antipolo are ordered DISMISSED, without prejudice, pursuant
to Sec. 18 of the 1991 Revised Rule on Summary Procedure.
SO ORDERED.
[G.R. No. 137904. October 19, 2001]
PURIFICACION M. VDA. DE URBANO, PEDRO DE CASTRO,
AURELIO I. ARRIENDA, ARNEL U. ARRIENDA, ALBERT U.
ARRIENDA, ALICE A. PEDRON and MARILYN C. BILOG,
petitioners, vs. GOVERNMENT SERVICE INSURANCE SYSTEM
(GSIS), FELICIANO BELMONTE, JR., ZACARIAS BELTRAN, JR.,
MARCIAL SECOQUIAN and CRISPINA DELA CRUZ,
respondents.
DECISION
PUNO, J.:

The petitioners in the case at bar have been fighting tooth
and nail for a roof above their heads. They have fought long
and hard but still not enough, for while as a succor institution
the respondent GSIS can bend back to accommodate the
needs of a member, it can only bend as far as it can also
assure the solvency of its funds for the common good of its
members.
This is a petition for review on certiorari to annul and set
aside the Court of Appeals' October 30, 1998 decision[1] and
March 4, 1999 resolution affirming the decision of the
Regional Trial Court of Quezon City, Branch 102, dismissing
petitioner's complaint for annulment of contract,
reconveyance and damages.
The facts, gathered mainly from the stipulation and
admissions of the parties,[2] are as follows:
In 1971, petitioners mortgaged their 200-square meter
property in Quezon City to the respondent GSIS to secure a
housing loan of P47,000.00. As petitioners failed to pay their
loan when it fell due, GSIS foreclosed the mortgage on
October 28, 1983. With a bid of P154,896.00, GSIS emerged
as the highest bidder in the public auction of the property.
In a bid to redeem their property, petitioner Arnel Arrienda
wrote on September 26, 1984 to the Acquired Assets
Department (AAD) of the GSIS signifying the petitioners'
intention to redeem their property. Two days after or on
September 28, petitioner vda. de Urbano wrote the GSIS
Board of Trustees (the "Board") to inform them of her desire
to redeem the subject property and for advice on the
procedure for redemption.[3] GSIS responded on October 16,
1984 advising her to pay the total redemption price of
P154,896.00 on or before the expiry date of redemption on
November 18, 1984 in full and in cash, failing which the
property would be offered for sale through public bidding.
On October 29, 1984, petitioner vda. de Urbano requested
for more time to redeem the subject property. In a letter
dated January 10, 1985, AAD Manager Marcial Secoquian
informed petitioners that the Board adopted Resolution No.
929 on November 16, 1984 approving the "sale of the subject
property to petitioner Purificacion Urbano for the sum of
P174,572.62, provided that the aforesaid price shall be paid
in CASH, within sixty (60) days from notice of this resolution,
failing which, the property shall be sold thru public bidding
with the fair market value of the property as the minimum
bid price."
Unable to find financing to repurchase the subject property,
petitioners again wrote to the Board through AAD Manager
Secoquian on January 18, 1985 requesting for re-mortgage
through repurchase of the subject property.[4] On February
27, 1985, AAD Manager Secoquian wrote to petitioners that
"the granting of real estate/housing loan to the GSIS
members is not within the province and competence of this
department, hence your request for a re-mortgage of said
property cannot be acted upon."[5] On June 19, 1985,
petitioner vda. de Urbano wrote to the Board requesting
approval to file a loan of P240,000.00 with the GSIS Real
Estate Department to repurchase their foreclosed property.
On June 20, 1985, then Deputy Minister and Vice Governor
Ismael A. Mathay, Jr. interceded for the petitioners and
wrote to the Board requesting for a more liberal
arrangement to enable petitioners to repurchase their
property. In response to the letter, the Board adopted
Resolution No. 593 on July 6, 1985 granting petitioner Aurelio
Arrienda "60 days from notice within which to purchase the
subject property for P174,572.62 payable in CASH. Should
Mr. Arrienda fail to pay the same within the time frame
mentioned, the property shall be sold at public auction
without need of any further action by the Board." Petitioners
were notified of this Resolution in a letter dated August 2,
1985.[6]
On August 21, 1985, months after the expiration of the
redemption period on November 18, 1984, GSIS consolidated
its title over the property, leading to the cancellation of TCT
No. 167532 covering the property and the issuance of TCT
No. 33418 in favor of GSIS.[7]
On September 5, 1985, respondent Crispina dela Cruz
commenced negotiations with respondent GSIS for her
purchase of the petitioners' foreclosed property for
P250,000.00 spot cash.
Unable to raise the entire amount of the property but still
persistent to reacquire it, petitioner Arnel Arrienda wrote to
the Board on October 4, 1985, offering a downpayment of
P50,000.00 to purchase their property, the balance of
16
P124,572.62 to be paid within five years in equal monthly
installments. He enclosed a cashier's check in the amount of
P10,000.00 as earnest money. On October 30, 1985, AAD
Manager Secoquian informed petitioners that the Board
adopted Resolution No. 881 on October 10, 1985 declining
their offer to purchase the subject property under their
proposed terms and conditions.[8]
On November 11, 1985, petitioner Arnel Arrienda again
wrote to the Board requesting reconsideration of Resolution
No. 881 and abeyance of the public sale or negotiation of the
subject property.[9] Secoquian wrote petitioner Arnel
Arrienda on December 26, 1985 informing him that the
Board adopted Resolution No. 1022 dated December 12,
1985 denying his request for reconsideration of Resolution
No. 881 and returning petitioners' cashier's check of
P10,000.00.[10] The Board also directed the "Operating Unit
Concerned to inform Ms. Cristina Cruz (sic) that her offer to
purchase the above-mentioned property shall only be
entertained by the GSIS Board if accompanied by a Cashier's
or Manager's check in the amount equivalent to 10% of her
offer, forfeitable in favor of the System in case she fails to
comply with the terms and conditions proposed by the
System."[11]
With no let up on their efforts to repurchase their property,
petitioner Aurelio Arrienda wrote to the Board on January 6,
1986 requesting a restructuring or a liberal arrangement to
purchase back the subject property. This was denied by the
Board in Resolution No. 36 dated January 16, 1986.
Meantime, GSIS continued negotiating with private
respondent dela Cruz. On January 28, 1986, Secoquian
recommended to the Board the approval of the sale to dela
Cruz.
Not having lost their resolve and pinning their hopes on the
new Board of Trustees under the new administration of then
President Corazon Aquino, petitioner vda. de Urbano wrote
on January 20, 1987 to Atty. Regalado Resurreccion, Head of
the Operation Pabahay of the Government Investments and
Loan Department of the GSIS, requesting reconsideration of
GSIS' position with regard to the subject property.[12] As
indicated in a GSIS internal commmunication, Officer-in-
Charge Rosales of the Residential Loans Department initially
handled the request, then endorsed it to Atty. Resurreccion

on January 19, 1987 and enclosed in his endorsement
petitioner vda. de Urbano's June 19, 1985 letter applying for
a loan of P240,000.00 to repurchase the subject property.
The matter was, in turn, endorsed by Atty. Resurreccion to
AAD Manager Secoquian on January 20, 1987 as "the
Operation Pabahay Task Force cannot undertake the
processing of this kind of loan unless a certificate of award or
sale is issued in favor of the applicant." Atty. Resurreccion
likewise noted in his endorsement that the applicant for the
loan was already 81 years old and no longer a member of the
GSIS. AAD Manager Secoquian returned said application to
the head of the Operation Pabahay on March 3, 1987,
enumerating the Board resolutions relative to the subject
property and stating that "pending action by the Board on
the offer of CRISPINA VDA. DELA CRUZ to purchase the
subject property for the amount of P250,000.00, the request
of Mrs. URBANO cannot as yet be given due
consideration."[13]
On August 11, 1987, GSIS approved under Resolution No. 342
the "sale of the subject property to respondent dela Cruz for
a consideration of P267,000.00 CASH." The following day,
respondent AAD & GRADE Acting Vice-President Zacarias C.
Beltran, Jr. wrote to petitioners Zenaida/Aurelio Arrienda
calling their attention to the absence of a formal lease
contract over the subject property where petitioners
continued to stay. He also demanded payment of rental
arrears on the property for 45 months as of July 31, 1987
amounting to P58,500.00[14] and invited petitioners Zenaida
and Aurelio Arrienda to the GSIS Office to make
arrangements for the payment of the rental arrears and to
execute the corresponding lease contract. The letter did not
mention the negotiation with private respondent dela Cruz.
On September 1, 1987, GSIS wrote to private respondent
dela Cruz that the Board, through Board Resolution No. 342,
approved the sale of the subject property payable in full and
in cash for P267,000.00, representing its current market
value, within thirty days from notice of the resolution. On
January 20, 1988, a Deed of Absolute Sale over the subject
property was executed between GSIS and private respondent
de la Cruz. The following day, TCT No. 374292 covering the
subject property was issued to dela Cruz.
Meantime, having learned about the sale of the subject
property to dela Cruz, petitioner Aurelio Arrienda wrote to
the GSIS on September 27, 1987 protesting the said sale and
requesting its reconsideration and recall. Respondent
Beltran, then already the Vice President of the AAMG &
GRADE Department of the GSIS, responded on October 27,
1987 informing him of Resolution No. 430, dated October 13,
1987, which reiterated the approval of the sale of the subject
property to respondent dela Cruz as previously approved
under Board Resolution No. 342. On November 4, 1987,
petitioner Aurelio Arrienda again wrote to the GSIS
protesting the sale of the property to respondent dela Cruz
and requesting for a formal investigation of the
circumstances leading to the sale. The GSIS' Department of
Investigation manager wrote to petitioner Aurelio Arrienda
on January 11, 1988 requesting petitioner Aurelio Arrienda to
"come for conference" with Atty. Gatpatan of the said
department regarding his complaint on the subject property.
Not satisfied with the investigation of GSIS, petitioners filed
the instant case before the Regional Trial Court of Quezon
City, Branch 102. The lower court dismissed the complaint.
This was affirmed by the Court of Appeals. Hence, this
petition for review with the following assignment of errors:
"The Honorable Court of Appeals (Former Eleventh Division)
erred as follows:
1. In not finding that the alleged negotiated sale of
petitioners' foreclosed property was consummated by
respondent GSIS in favor of respondent Crispina Dela Cruz, a
non-GSIS member, in violation of its own Board Resolution
Nos. 929 and 593, existing laws and applicable jurisprudence.
2. In not finding that respondent GSIS had consummated the
alleged negotiated sale in favor of respondent Dela Cruz
notwithstanding the failure of the latter to comply with the
terms and conditions of the alleged sale.
3. In not finding that respondent GSIS had committed
dishonesty and/or perjury by falsely alleging in their Answer
to the Complaint that it acted on the request of petitioner
Purificacion Vda. De Urbano to re-acquire her former
property through the GSIS Operation Pabahay by
transmitting said request to the Acquired Assets Department.
4. In not finding that the case of Valmonte vs. Belmonte, Jr.,
170 SCRA 256 (1989), is applicable to the case at bench.
17
5. In not finding that Section 35 of P.D. 1146, does not
provide any prerogative to the GSIS Board of Trustees to
authorize and/or approve the alleged negotiated sale in favor
of a non-GSIS member or an outsider without complying with
pertinent existing laws and established jurisprudence.
6. In not finding that the appealed Decision of the lower
court did not faithfully comply with Sec. 1, Rule 36 of the
Rules of Court.
7. In not finding that the case of Maharlika Publishing
Corporation vs. Tagle, 142 SCRA 553 (1986), is a precedent to
the case at bench.
8. In not giving due consideration to the newly discovered
evidence of the petitioners (Annexes "A" and "B", Brief for
the Appellants) which showed that respondent Crispina Dela
Cruz had already withdrawn her offer to buy subject property
and the same was accepted by respondent GSIS."
The petition is devoid of merit.
The smorgasbord of issues raised by the petitioner can be
reduced to three jugular issues, viz:
I. Do petitioners have a right to repurchase the subject
property?
II. Does the GSIS have a duty to dispose of the subject
property through public bidding?
III. Was GSIS in bad faith in dealing with petitioners?
I.
We first deal with the issue of repurchase. At the time
petitioners offered to repurchase the subject property from
GSIS, the charter of the GSIS then in force was P.D. 1146 or
the Revised Government Insurance Act of 1977 (the "Act").
Sections 35 and 36 of the Act provide in relevant part as
follows:
"Sec. 35. Powers and Functions of the System. The System
shall have the following powers and functions specified in
this Act and the usual general corporate powers:

xxx
(d) To acquire, utilize or dispose of, in any manner recognized
by law, real or personal properties in the Philippines or
elsewhere necessary to carry out the purposes of this Act."
(emphasis supplied)
"Sec. 36. The Board of Trustees; Its Composition; Tenure and
Compensation.- The Corporate powers and functions of the
System shall be vested in, and exercised by the Board of
Trustees. . ."
P.D. 1146 was amended by P.D. 1981 dated July 19, 1985 as
follows:
"WHEREAS, the GSIS Board of Trustees should be vested with
powers and authority necessary or proper to ensure a fair
and profitable return of the investments of the funds
administered by the GSIS, and, for this purpose, the GSIS
Board of Trustees should be given full and sole responsibility
of controlling and monitoring insurance investments
operations and fixing and determining the terms and
conditions of financial accomodations to its members,
including the power to compromise or release any claim or
settled liability to the GSIS;
WHEREAS, it has thus become necessary to amend
Presidential Decree No. 1146 to clarify some of its provisions
to make it more responsive to the needs of the members of
the GSIS and to assure the actuarial solvency of the Fund
administered by the GSIS during these times of grave
economic crisis affecting the country;
xxx
Sec. 7. There is hereby incorporated a new paragraph after
the third paragraph of Section 36, which shall read as follows:
"The Board of Trustees has the following powers and
functions, among others:
(a) To formulate the policies, guidelines and programs to
effectively carry out the purposes and objectives of this Act;
xxx
(f) The provisions of any law to the contrary notwithstanding,
to compromise or release, in whole or in part, any claim or
settled liability to the System, regardless of the amount
involved, under such terms and conditions as it may impose
for the best interest of the System; . . ." (emphasis supplied)
The above laws grant the GSIS Board of Trustees (the
"Board") the power, nay, the responsibility, to exercise
discretion in "determining the terms and conditions of
financial accomodations to its members" with the dual
purpose of making the GSIS "more responsive to the needs of
the members of the GSIS" and assuring "the actuarial
solvency of the Fund administered by the GSIS." As
mandated by P.D. 1146, this discretion may be exercised in
acquiring, utilizing or disposing of, in any manner recognized
by law, "real or personal properties in the Philippines or
elsewhere necessary to carry out the purposes of this Act."
Contrary to petitioners' position, there is no restriction or
qualification that the GSIS should dispose of its real
properties in favor only of GSIS members. Based on these
laws, the Board could exercise its discretion on whether to
accept or reject petitioners' offer to repurchase the subject
property taking into account the dual purpose enunciated in
the "whereas clause" of P.D. 1981, i.e., making the GSIS
"more responsive to the needs of the members of the GSIS"
and assuring "the actuarial solvency of the Fund
administered by the GSIS."
Jurisprudence also supports the Board's exercise of discretion
in case of repurchase, viz:
"The right to redeem becomes functus officio on the date of
its expiry, and its exercise after the period is not really one of
redemption but a repurchase. Distinction must be made
because redemption is by force of law; the purchaser at
public auction is bound to accept redemption. Repurchase
however of foreclosed property, after redemption period,
imposes no such obligation. After expiry, the purchaser may
or may not re-sell the property but no law will compel him to
do so. And, he is not bound by the bid price; it is entirely
within his discretion to set a higher price, for after all, the
property already belongs to him as owner."[15] (emphasis
supplied)
In response to petitioners' plea to repurchase the subject
property after the redemption period had expired, the Board
18
approved its sale to petitioners by virtue of Resolution No.
929 dated November 16, 1984, provided that the payment of
its purchase price of P174,572.62 shall be made in cash
within sixty days from notice of the resolution, otherwise the
property would be sold through public bidding. After
petitioners' failure to purchase the property within the
prescribed period, the Board, through Resolution No. 593
dated July 6, 1985, granted petitioners another sixty days
within which to purchase the property for the same amount
and under the same terms stated in Resolution No. 929.
Counting from the expiry date of redemption on November
18, 1984, the petitioners were given about ten months within
which to repurchase the subject property for the same price
of P174,572.62. In view of petitioners' repeated failure to
repurchase coupled with their failure to pay rent on the
subject property, the Board denied through Resolution No.
1022 dated December 12, 1985 petitioners' subsequent
request to repurchase the subject property. The minutes of
the Board Meeting on December 12, 1985 show the
comment of the AAD Manager, viz:
"From the aforementioned background of the Case where
the family of Mr. Arrienda has repeatedly made different
and/or conflicting offers/requests, it seems that their family
apparently lack(sic) the capacity to reacquire their former
property, and are obviously delaying our final disposition of
the property. Moreover, since the expiry date of the
redemption period, Mr. Arrienda has not made any rental
payments on the property."[16]
The Board's denial of petitioners' request to purchase the
subject property was based not on whim or caprice, but on a
factual assessment of the financial capacity of the petitioners
to make good their repeated offers to purchase the subject
property. Respondent GSIS struck a balance between being
"responsive to the needs of the members of the GSIS" and
assuring "the actuarial solvency of the Fund administered by
the GSIS", and tilted the scale in favor of the latter. Under
the then GSIS charter or P.D. 1146, this was well within the
powers of the Board.
Petitioners, in addition, fault their failure to meet the GSIS'
terms for repurchase on the GSIS' inaction on their January
20, 1987 request to re-acquire the subject property through
the GSIS Operation Pabahay. They allege that instead of
acting upon this letter, what was acted upon was their letter
of June 19, 1985. The evidence on record, however, shows

that Officer-in-Charge Rosales of the Residential Loans
Department endorsed the matter raised by petitioners in
their January 20, 1987 letter to Atty. Resurreccion, Head of
the Operation Pabahay. While the endorsement shows that
enclosed therewith was petitioner vda. de Urbano's June 19,
1985 letter applying for a loan of P240,000.00 to repurchase
the subject property, the endorsement itself stated that the
loan for reacquisition of the subject property was being made
under the "current Operations Pabahay." Thereafter, the
matter was endorsed by Atty. Resurreccion to the Manager
of the AAD on January 20, 1987 as "the Operation Pabahay
Task Force cannot undertake the processing of this kind of
loan unless a certificate of award or sale is issued in favor of
the applicant." AAD Manager Secoquian returned said
application to the head of the Operation Pabahay on March
3, 1987, enumerating the Board resolutions relative to the
subject property and stating that "pending action by the
Board on the offer of CRISPINA VDA. DELA CRUZ to purchase
the subject property for the amount of P250,000.00, the
request of Mrs. URBANO cannot as yet be given due
consideration."[17]
In sum, insofar as the petitioners' request for repurchase is
concerned, they are not entitled to repurchase as a matter of
right. The Board exercised its discretion in accordance with
law in denying their requests and the GSIS cannot be faulted
for petitioners' failure to repurchase as it acted upon
petitioners' application under the Operation Pabahay. The
sale of the subject property to respondent dela Cruz cannot
therefore be annulled on the basis of petitioners' alleged
right to repurchase.
Neither can petitioners invoke Maharlika Publishing
Corporation v. Tagle,[18] as a precedent insofar as the
Board's exercise of its discretion to grant loan restructuring is
concerned.[19] Petitioners point out that in that case, the
Supreme Court found that the GSIS "created an agreement of
binding nature" with the owner of the foreclosed property
when the owners proposed to repurchase the property and
the then GSIS General Manager Roman Cruz, Jr. ordered that
the public bidding of the property be stopped and the
repurchase be discussed with him a day before the scheduled
date of the bidding. The case is not in point. In the
Maharlika case, this Court ruled that GSIS was deemed to
have accepted the offer to repurchase when it ordered the
bidding to be stopped pending discussion of the repurchase
with the owner of the property. In the case at bar, however,
the GSIS granted petitioners two opportunities under
Resolutions No. 929 dated November 16, 1984 and
Resolution No. 593 dated July 6, 1985 to repurchase the
subject property, but petitioners failed to comply with the
GSIS' terms of repurchase. Subsequently, when petitioners
offered to repurchase the subject property under their own
terms of payment, the GSIS under Resolution No. 881 dated
October 10, 1985 denied the same. Unlike in the Maharlika
case therefore, it cannot be said that the GSIS "created an
agreement (to repurchase) of binding nature" with the herein
petitioners.
II.
We come now to the second issue of whether the GSIS
should dispose of the subject property through public
bidding.
Petitioners aver that Section 79 of P.D. 1445[20] and
Commission on Audit (COA) Circular No. 86-264 mandate the
GSIS to dispose of its assets, such as the subject property,
primarily through public bidding and only upon its failure,
through a negotiated sale.
On the other hand, GSIS contends that Section 79 of P.D.
1445 does not apply to the case at bar as this provision
covers unserviceable government property and not acquired
assets like the subject property. Nor does the sale of the
subject property come within the purview of COA Circular
No. 86-264 as it is a "sale of merchandise/inventory held for
sale in the regular course of business" which is carved out as
an exception under the circular. GSIS posits that this
interpretation of COA Circular No. 86-264 was made clear by
the subsequent COA Circular No. 89-296.
We uphold the position of the GSIS.
Section 79 of P.D. 1445 does not apply to the case at bar as
this provision applies only to unserviceable property, viz:
"SECTION 79. Destruction or sale of unserviceable property. -
When government property has become unserviceable for
any cause, or is no longer needed, it shall, upon application
of the officer accountable therefor, be inspected by the head
of the agency or his duly authorized representative in the
presence of the auditor concerned and, if found to be
19
valueless or unsalable, it may be destroyed in their presence.
If found to be valuable, it may be sold at public auction to the
highest bidder under the supervision of the proper
committee on award or similar body in the presence of the
auditor concerned or other duly authorized representative of
the Commission, after advertising by printed notice in the
Official Gazette, or for not less than three consecutive days in
any newspaper of general circulation, or where the value of
the property does not warrant the expense of publication, by
notices posted for a like period in at least three public places
in the locality where the property is to be sold. In the event
that the public auction fails, the property may be sold at a
private sale at such price as may be fixed by the same
committee or body concerned and approved by the
Commission."
That the subject property is not "unserviceable" or useless is
rather obvious. Petitioners are precisely fighting tooth and
nail to claim the subject property as they are still using it as
their family home. It still serves its purpose well. Neither is it
"no longer needed" by the GSIS. As a financial institution
extending housing loans, the disposition of foreclosed
properties - such as the subject property - at a price
beneficial to the GSIS helps maintain the actuarial solvency of
the GSIS fund. It cannot therefore be said that the subject
property is "no longer needed" by the GSIS.
We turn now to the COA circulars cited by the parties. COA
Circular No. 86-264 dated October 16, 1986, the "General
guidelines on the divestment or disposal of assets of
government-owned and/or controlled corporations, and
their subsidiaries" provides in relevant part, viz:
"1.0 Rationale and Scope
These guidelines shall govern the general procedures on the
divestment or disposal of assets of government-owned
and/or controlled corporations and their subsidiaries, which
shall be supplemented by specific procedures as may be
adopted by the corporation concerned, provided they do not
contravene existing laws and the provisions of this circular.
xxx
3.0 Modes of Disposal

3.1. Public Auction
As a rule, public auction or bidding shall be the primary mode
of disposal of assets.
3.2. Sale thru Negotiation
Disposal thru this mode, which is a sale without public
bidding, shall be resorted to only in case of failure of public
auction.
xxx
5.0 Exceptions and Effectivity
This Circular shall not apply to sales of
merchandise/inventory held for sale in the regular course of
business." (emphasis supplied)
On January 27, 1989, COA Circular No. 89-296 was issued
providing also for "Audit Guidelines on the Divestment or
Disposal of Property and Other Assets of National
Government Agencies and Instrumentalities, Local
Government Units and Government-Owned or Controlled
Corporations and their Subsidiaries." It provides for the
disposition of government assets, viz:
"III. DEFINITION AND SCOPE:
These audit guidelines shall be observed and adhered to in
the divestment or disposal of property and other assets of all
government entities/instrumentalities, whether national,
local or corporate, including the subsidiaries thereof but shall
not apply to the disposal of merchandise or inventory held
for sale in the regular course of business nor to the disposal
by government financial institutions of foreclosed assets or
collaterals acquired in the regular course of business and not
transferred to the National Government under Proclamation
No. 50. . .
xxx
V. MODES OF DISPOSAL/DIVESTMENT:
This Commission recognizes the following modes of
disposal/divestment of assets and property of national
government agencies, local government units and
government-owned and controlled corporations and their
subsidiaries, aside from such modes as may be provided by
law.
1. Public Auction
Conformably to existing state policy, the divestment or
disposal of government property as contemplated herein
shall be undertaken primarily thru public auction. . .
2. Sale Thru Negotiation
For justifiable reasons and as demanded by the exigencies of
the service, disposal thru negotiated sale may be resorted to
and undertaken by the proper committee or body in the
agency or entity concerned taking into consideration the
following factors: . . ." (emphasis supplied)
When the Board approved the sale of the subject property to
private respondent dela Cruz through Resolution No. 342 in
August 1987 and Resolution No. 430 in October of the same
year, and when the Deed of Sale was executed between GSIS
and private respondent dela Cruz in January 1988, Circular
No. 86-264 was then in force.
The pivotal question is whether the subject property is
covered by COA Circular 86-264 or falls under the exception
in its paragraph 5 above. In construing this exception, we
derive insight from the exceptions provided under the
subsequent COA Circular 89-296, viz:
"III. DEFINITION AND SCOPE:
These audit guidelines shall be observed and adhered to in
the divestment or disposal of property and other assets of all
government entities/instrumentalities, whether national,
local or corporate, including the subsidiaries thereof but shall
not apply to the disposal of merchandise or inventory held
for sale in the regular course of business nor to the disposal
by government financial institutions of foreclosed assets or
collaterals acquired in the regular course of business and not
20
transferred to the National Government under Proclamation
No. 50. . ."
We refer to Circular No. 89-296 in interpreting Circular No.
86-264 in adherence to the rule in statutory construction, viz:
"The correct rule of interpretation is, that if divers (sic)
statutes relate to the same thing, they ought all to be taken
into consideration in construing any one of them, and it is an
established rule of law, that all acts in pari materia are to be
taken together, as if they were one law. (Doug., 30; 2 Term
Rep., 387, 586; 4 Maule & Selw., 210). If a thing contained in
a subsequent statute, be within the reason of a former
statute, it shall be taken to be within the meaning of that
statute. (Lord Raym., 1028); and if it can be gathered from a
subsequent statute in pari materia, what meaning the
Legislature attached to the words of a former statute, they
will amount to a legislative declaration of its meaning, and
will govern the construction of the first statute. (Morris v.
Mellin, 6 Barn. & Cress., 454; 7 Barn. & Cress. 99)"[21]
In Riggs et al. v. Palmer et al.,[22] it was also ruled:
"It is a familiar canon of construction that a thing which is
within the intention of the makers of a statute is as much
within the statute as if it were within the letter; and a thing
which is within the letter of the statute is not within the
statute unless it be within the intention of the makers. The
writers of the laws do not always express their intention
perfectly, but either exceed it or fall short of it, so that judges
are to collect it from probable or rational conjectures only,
and this is called 'rational interpretation;' and Rutherford, in
his Institutes, (page 420,) says: 'Where we make use of
rational interpretation, sometimes we restrain the meaning
of the writer so as to take in less, and sometimes we extend
or enlarge his meaning so as to take in more, than his words
express.' Such a construction ought to be put upon a statute
as will best answer the intention which the makers had in
view, for qui haret in litera, haret in cortice. In Bac. Abr.
'Statutes,' 1.5; Puff. Law Nat. bk. 5, c. 12; Ruth. Inst. 422, 427,
and in Smith's Commentaries, 814, many cases are
mentioned where it was held that matters embraced in the
general words of statutes nevertheless were not within the
statutes, because it could not have been the intention of the
law-makers that they should be included. They were taken
out of the statutes by an equitable construction; and it is said

in Bacon: 'By an equitable construction a case not within the
letter of a statute is sometimes holden to be within the
meaning, because it is within the mischief for which the
remedy is provided. The reason for such construction is that
the law-makers could not set down every case in express
terms.'"[23]
In C&C Commercial Corporation v. National Waterworks and
Sewerage Authority,[24] we ruled that statutes in pari
materia should be construed together to attain the purpose
of an expressed national policy, viz:
"On the presumption that whenever the legislature enacts a
provision it has in mind the previous statutes relating to the
same subject matter, it is held that in the absence of any
express repeal or amendment therein, the new provision was
enacted in accord with the legislative policy embodied in
those prior statutes, and they all should be construed
together. Provisions in an act which are omitted in another
act relating to the same subject matter will be applied in a
proceeding under the other act, when not inconsistent with
its purpose. Prior statutes relating to the same subject
matter are to be compared with the new provisions; and if
possible by reasonable construction, both are to be
construed that effect is given to every provision of each.
Statutes in pari materia, although in apparent conflict, are so
far as reasonably possible construed to be in harmony with
each other."[25]
Agpalo writes in his book, Statutory Construction, viz:
"Statutes in pari materia should be read and construed
together because enactments of the same legislature on the
same subject are supposed to form part of one uniform
system; later statutes are supplementary or complimentary
(sic) to the earlier enactments and in the passage of its acts
the legislature is supposed to have in mind the existing
legislations on the subject and to have enacted its new act
with reference thereto."[26]
When both COA Circular No. 86-264 and COA Circular No. 89-
296 were issued, affording flexibility to government-owned
and controlled corporations (GOCC's) to allow them to
generate more revenue for national development was a
declared government policy. This policy is unmistakable in
laws executed before the issuance of Circular No. 86-264 in
October 1986. P.D. 2029, "Defining Government-Owned and
Controlled Corporations and Indentifying Their Role in
National Development," dated February 4, 1986, provides:
"WHEREAS, there is a need to assure the flexibility of such
government corporations consistent with the need for public
accountability by providing for differential treatment for
government corporations;
xxx
SECTION 1. General Policy. - It is the policy of the State that
the corporate form of organization, utilized judiciously, is one
of the valid forms through which the government may
participate in economic and social development.
xxx
SEC. 7. Provision of adequate operational flexiblity. -
Government corporations shall be provided with adequate
operational flexibility in order to function properly and
efficiently, especially under conditions of market
competition. Such flexibility shall nevertheless be consistent
with the requirements of public acountability.
xxx
SEC. 8. Differential treatment.- To implement the concept of
greater flexibility, government corporations in general shall
be accorded differential treatment which is more consistent
with coporate organizational requirements as distinguished
from regular government agencies, with respect to the
exercise by the various service-wide agencies, such as the
Civil Service Commission, the Commission on Audit, and the
Office of Budget and Management, of their respective
jurisdiction."
Letter of Instructions No. 1520, issued on the same day as
P.D. 2029 on February 4, 1986, also provides for the role of
government corporations in national development, viz:
"WHEREAS, it is necessary that the limited resources of
government be utilized as efficiently, as effectively, and as
economically as possible to further national development
and to support the economic recovery program, for which
21
the judicious use of the corporate form of organization is
critical;
xxx"
P.D. 2030, Providing for the Orderly Disposition of Certain
Assets of Government Institutions, also issued on February 4,
1986, made explicit the policy of the government to divest
government corporations of assets as an aid to national
development, viz:
"WHEREAS, the National Government, through the agency of
various financial and other government institutions, has
acquired or is otherwise the owner of a large number of
assets in the industrial, manufacturing and commercial
sectors of the economy which, as part of the economic
recovery program adopted by the National Government, it
has been deemed necessary and appropriate for the National
Government to divest in a planned and orderly manner;
WHEREAS, as an integral part of this economic recovery
program and in order to facilitate the reorganization of
certain government financial institutions, it is necessary to
relieve those institutions of assets which adversely affect
their financial viability and liquidity, and for the National
Government to take over such assets and to assume the
realted liabilities of those institutions;
WHEREAS, it is the desire of the National Government to
realize on such assets within the shortest possible time and,
to such end, to dispose of such assets generally on terms that
would permit immediate substantial cash returns to the
National Government;
xxx"
Proclamation No. 50, "Proclaiming and Launching a Program
for the Expeditious Disposition and Privatization of Certain
Government Corporations and/or the Assets Thereof, and
Creating the Committee on Privatization and the Asset
Privatization Trust," issued on December 8, 1986 after the
issuance of COA Circular No. 86-264, but prior to COA
Circular No. 89-296, reiterates the continuing policy of the
government to encourage divestment of assets as an aid to
national development, viz:

"CONSIDERING that the government has decided to adopt, as
the twin cornerstones of the program, the following parallel
imperatives for the attainment of national policy:
xxx
(b) reducing the number of government corporations which
has proliferated to unmanageable proportions;
circumscribing the areas of economic activities within which
the government corporations may operate; and aiming to
achieve these goals through the privatization of a good
number of government corporations, and the disposition and
liquidation of the non-relevant and non-performing assets of
retained corporations as the logical first step to their
rehabilitation."
The above-quoted laws on GOCC's and disposition of their
assets unmistakeably show the policy of the government to
allow flexibility to GOCC's and to promote disposition of non-
performing assets. This policy undergirds both COA Circular
No. 86-264 and 89-296. Thus, the exception provided in COA
Circular No. 86-264 should be, to the widest extent possible,
construed to accommodate this policy and allow GOCC's
wide latitude in the disposition of their assets, including
foreclosed assets or collaterals acquired in the regular course
of business. COA Circular No. 89-296 provides for two
exceptions to the requirement of disposition primarily
through public bidding, i.e., (1) disposal of merchandise or
inventory held for sale in the regular course of business; and
(2) disposal by government financial institutions of foreclosed
assets or collaterals acquired in the regular course of
business." In light of the declared policy of the government
on GOCC's and their assets, COA Circular No. 89-296 should
be understood to have clarified the coverage of the
exception under COA Circular No. 86-264, i.e., sales of
merchandise/inventory held for sale in the regular course of
business.
The GSIS being a financial institution extending loans to its
members, the foreclosure of the subject property as
collateral to a loan was done in the regular course of
business. Its sale to private respondent dela Cruz falls within
the exception provided by COA Circular No. 86-264 as
clarified by COA Circular 89-296, and thus does not offend
the requirements of the said COA circulars.
Instead, the policies and procedures of the GSIS on the
disposition of acquired assets govern the case at bar. Mr.
Romeo Tejedor, manager of the Acquired Assets Department
of GSIS, testified that at the time the disputed transaction
took place, the GSIS still did not have clear cut policies on the
sale of acquired assets. At that time, the GSIS Board of
Trustees had the prerogative to authorize the sale of
acquired assets. Petitioners aver that the GSIS "Policy and
Procedural Guidelines Acquisition, Administration, and
Disposition of Acquired Assets (PPG)", a newspaper copy of
which they annexed to their reply to the GSIS' brief, provides
that a negotiated sale may only be entered into after two
failed public biddings on the acquired property. Petitioners,
however, omitted to state that the said newspaper copy was
published and the PPG took effect only on January 17, 1991,
long after the sale of the subject property.[27] In the absence
of evidence of policies and procedures contrary to the
testimony of Mr. Tejedor, we give credence to Mr. Tejedor's
testimony that at the time of the disputed sale to private
respondent dela Cruz, GSIS did not have clear cut policies on
disposition of assets that required it to first sell the subject
property through public bidding before a negotiated sale.
The GSIS precisely came out with a PPG in 1991 to set the
policies and procedures to govern the disposition of acquired
assets because these were not clear cut prior to 1991. We
therefore hold that the sale of the subject property to private
respondent dela Cruz was not contrary to law.
Neither can petitioners invoke the Maharlika case to lend
support to its contention that the Board is bound to fulfill its
representations in its letters to the petitioners that upon the
latter's failure to repurchase the property under Resolution
Nos. 929 and 593, the GSIS will dispose of the subject
property through public bidding. Petitioners claim that these
representations constituted a contract between them and
GSIS. The Court of Appeals correctly ruled that there was no
contract between GSIS and the petitioners that obligates the
GSIS to sell the subject property through public bidding, viz:
". . . the mortgage contract between the parties was not
novated as to the extension of the redemption period of
appellants since this is not sanctioned by law. What GSIS did
per Resolution 929 was to make a counter proposal to
appellants for the sale of the property at the price of
P174,572.62 payable in cash within 60 days from notice of
resolution with a warning that non-compliance thereof (sic)
will result to the sale of the property at public auction. At
22
this point in time, there was still no meeting of the minds
between the parties since the request of appellants thru
Purificacion Urbano is to extend the redemption period to
enable them to redeem the property while Resolution No.
929 is for outright sale for the price of P174,572.62. These
are two (2) separate and distinct legal transactions. Under
Article 1319 of the Civil Code, the offer must be certain. The
offer of Ms. Urbano is certain and explicit as to the extension
of time to redeem their property. The acceptance of GSIS to
this proposal must also be absolute and clear in granting said
extension. However, GSIS did not agree to the extension due
to legal constraints and instead a qualified acceptance was
given in the sense that GSIS made a counter-offer for
appellants to buy the property under certain terms.
Was there an acceptance of the counter-offer of GSIS on the
part of appellants? Definitely none. On January 10, 1985,
when appellants thru Purificacion Urbano was notified by
GSIS Manager M.M. Secoquian of the Acquired Assets
Department of the approval of the sale under Board
Resolution No. 929, appellant Urbano replied on January 18,
1985 that they cannot pay the price of P174,572.62 as it may
be difficult for a financial institution to accommodate said
obligation within the grace period of 60 days. (Exhibit "E",
Records). In turn, Ms. Urbano made another counter-
proposal "to have the said property be RE-MORTGAGE (sic)
through the process of repurchase with the GSIS". (Exhibit
"F", Records). . . A similar request was sent by appellant
Aurelio Arrienda on May 20, 1985 but the same was denied
in a Board Resolution No. 516 dated June 6, 1985. (Exhibit
"H", Records).
From the foregoing, this Court rules that there was no
meeting of the minds between the parties as the counter-
offer of GSIS for the appellants to buy the property based on
terms and conditions laid down under Board Resolution No.
929 was NOT accepted by appellants. Under Article 1319 of
the Civil Code, there was no valid and perfected contract.
Hence, appellants cannot claim any right under Board
Resolution No. 929, more particularly on the sale at public
auction since they did not agree to the counter-offer of GSIS
as contained in Board Resolution 929.
. . . In response to the request of the First Lady Imelda
Marcos, the GSIS Board of Trustees approved Board
Resolution No. 593 which granted to "Mr. Aurelio Arrienda
sixty (60) days from notice within which to purchase the

property for P174,572.62 payable in cash. Should Mr.
Arrienda fail to pay the same within the time frame
mentioned, the property shall be sold at public auction,
without need of any further action from the Board." (Exhibit
"3", p. 232 Records). Mr. Arrienda was notified of the Board
Resolution 593 by Manager M.M. Secoquian on August 2,
1985, asking him to remit the amount within 60 days from
receipt of said letter (Exhibit "K", Records). However, on
October 4, 1985, appellants thru Atty. Ariel Arrienda sent a
letter to GSIS making a counter-offer to purchase said
property. . . On October 10, 1985, the GSIS Board passed
Board Resolution 818 declining the offer of Mr. Arnel
Arrienda to purchase the property for P147,572,62 under the
terms and conditions he proposed. . .
From the foregoing, We likewise conclude that there was no
perfected contract between the parties. The proposal of
appellants thru Mr. Aurelio Arrienda is for the extension of
the redemption period or to restructure their loan with GSIS.
(Exhibit "J", Records). The approval of GSIS is for appellants
to purchase the property at the price of P174,572.62 within
60 days from receipt of notice. (Exhibit "3", Res. No. 592,
Records). This was NOT approved by appellants and instead
they made another counter-proposal to pay said amount
with a down payment of P50,000.00 and the balance to be
paid in 60 monthly installments. (Exhibit "1", Records). This
counter offer was denied in Resolution 1022. . . It is clear
from the above-described events that the offer of appellants
to redeem the property or restructure the loan was met with
a qualified acceptance from GSIS which is for them to pay the
prescribed price within 60 days. Said qualified acceptance
constitutes a counter-offer under Article 1319 of the Civil
Code and the appellants did not accept the same by making
another counter-offer to pay on staggered basis. This
counter offer was denied twice by GSIS and therefore there
was clearly no meeting of the minds and no perfected
contract.
If there is completely no acceptance or if the offer is
expressly rejected, there is no meeting of the minds.
(Leoquingco vs. Postal Savings Bank, 47 Phil. 772 and in
Gamboa vs. Gonzales, 17 Phil. 381)
If the acceptance be qualified or not absolute, there is no
concurrence of minds. There merely is counter-offer.
(Batangan vs. Cojuangco, 78 Phil. 481)
A counter-offer as a matter of fact extinguishes the offer. It
may or may not be accepted by the original offerer. (Trillana
vs. Quezon Colleges, L-5003, June 27, 1953)" (emphasis
supplied)
III. Finally, on the issue of whether or not GSIS was in bad
faith in dealing with the petitioners, we rule in the negative.
As earlier discussed, respondent GSIS' denial of petitioners'
further requests for repurchase of the subject property was
based on a factual determination of petitioners' financial
incapacity and the then GSIS charter, P.D. 1146. It is also
worth noting that GSIS sold the subject property to
respondent dela Cruz only after giving petitioners an almost
one year opportunity to repurchase the property and only
after ascertaining that the purchase price proposed by
private respondent dela Cruz in payment of the subject
property would benefit the GSIS. Nor can petitioners, on the
strength of Valmonte v. Belmonte, Jr.,[29] impute bad faith
on the part of GSIS when the latter did not disclose to
petitioners that it was negotiating with private respondent
dela Cruz for the sale of the subject property as soon as it
started the negotiations. The Court ruled in the Valmonte
case that the constitutional right to information is limited to
"matters of public concern," to "transactions involving public
interest." The negotiation and subsequent sale of the subject
property by the GSIS to private respondent dela Cruz was by
no stretch of the imagination imbued with public interest as
it was a purely private transaction. Petitioners cannot
therefore demand that it be informed of such negotiation
and sale moreso since they no longer had any interest on the
subject property upon failure to comply with GSIS' terms for
repurchase and upon GSIS' denial of petitioners' offer to
repurchase under their proposed terms and conditions. In
the absence of proof of bad faith on the part of the
respondents, we deny petitioners' prayer for moral damages
and attorney's fees.
WHEREFORE, the petition is DENIED and the impugned
decision and resolution of the Court of Appeals are
AFFIRMED. No costs.
SO ORDERED.
[G.R. No. 154616. July 12, 2004]
23
GOV. ANTONIO CALINGIN, petitioner, vs. COURT OF
APPEALS, Special 17th Division, EXECUTIVE SECRETARY
RENATO S. DE VILLA, DEPT. OF INTERIOR & LOCAL
GOVERNMENT SECRETARY JOEY LINA,* UNDERSECRETARY
EDUARDO R. SOLIMAN, JR., DEPARTMENT OF THE INTERIOR
& LOCAL GOVERNMENT, REGIONAL OFFICE NO. 10,
DIRECTOR RODOLFO Z. RAZUL, respondents.
RESOLUTION
QUISUMBING, J.:
Before us is a petition for review seeking to annul the
Resolution[1] dated May 11, 2001 of the Court of Appeals in
CA-G.R. SP No. 64583, which denied petitioner Governor
Antonio Calingin’s petition for prohibition with prayer for
temporary restraining order and/or the issuance of an order
of status quo ante, as well as its Resolution[2] dated July 1,
2002, denying the motion for reconsideration.
The antecedent facts, as summarized by the Court of Appeals
and borne by the records, are as follows:
The Office of the President issued a Resolution[3] dated
March 22, 2001 in OP Case No. 00-1-9220 (DILG ADM. Case
No. P-16-99) entitled Vice Governor Danilo P. Lagbas, et al.
versus Governor Antonio P. Calingin (Misamis Oriental)
suspending Gov. Calingin for 90 days. On April 30, 2001,
Undersecretary Eduardo R. Soliman of the Department of the
Interior and Local Government (DILG), by authority of
Secretary Jose D. Lina, Jr., issued a Memorandum[4]
implementing the said Resolution of the Office of the
President. On May 3, 2001, Gov. Calingin filed before the
Office of the President a Motion for Reconsideration.[5]
The DILG Memorandum bore the authority of the
Commission on Elections (COMELEC) which granted an
exemption to the election ban in the movement of any public
officer in its Resolution No. 3992[6] promulgated on April 24,
2001. This was in pursuance to COMELEC Resolution No.
3401 which provides in part that
Section 1. Prohibited Acts – (a) During the election period
from January 2, 2001 until July 13, 2001, no public official
shall make or cause any transfer/detail whatsoever of any
officer or employee in the civil service, including public

school teachers, or suspend elective provincial, city,
municipal or barangay official, except upon prior written
approval of the Commission.
On May 7, 2001, Gov. Calingin filed a petition for prohibition
before the Court of Appeals to prevent the DILG from
executing the assailed suspension order. However, on May
11, 2001, the Court of Appeals dismissed the said petition
and by resolution issued on July 1, 2002, denied petitioner’s
motion for reconsideration.
Hence, this appeal by certiorari where petitioner asserts that
the Court of Appeals erred in
… FINDING THAT THE EXECUTION OF THE SUSPENSION
ORDER OF THE DEPARTMENT OF INTERIOR AND LOCAL
GOVERNMENT DURING THE ELECTION PERIOD IS WITH
AUTHORITY FROM THE COMMISSION ON ELECTIONS.
… FINDING THAT THE DECISION OF THE OFFICE OF THE
PRESIDENT IS FINAL AND EXECUTORY AS PROVIDED IN
SECTION 67, CHAPTER 4, OF REPUBLIC ACT 7160, THE LOCAL
GOVERNMENT CODE OF 1991.[7]
In dispute is the validity of the DILG Memorandum
implementing the suspension order issued by the Office of
the President. We are asked to resolve in this connection
two issues: (1) Was the decision of the Office of the
President already final and executory? and (2) Was the
exemption from the election ban in the movement of any
public officer granted by COMELEC valid?
Petitioner contends that decisions of the Office of the
President on cases where it has original jurisdiction become
final and executory only after the lapse of 15 days from the
receipt thereof and that the filing of a Motion for
Reconsideration shall suspend the running of the said
period[8] in accordance with Section 15,[9] Chapter 3, Book
VII of the Administrative Code of 1987.
Petitioner further contends that Section 67,[10] Chapter 4 of
the Local Government Code (Rep. Act 7160), which provides
that decisions of the Office of the President shall be final and
executory, applies only to decisions of the Office of the
President on administrative cases appealed from the
sangguniang panlalawigan, sangguniang panlungsod of
highly-urbanized cities and independent component cities,
and sangguniang bayan of municipalities within the Metro
Manila Area. It does not cover decisions on cases where the
Office of the President has original jurisdiction such as those
involving a Provincial Governor.[11]
In Lapid v. Court of Appeals,[12] we held that it is a principle
of statutory construction that where there are two statutes
that apply to a particular case, that which was specially
intended for the said case must prevail. The case on hand
involves a disciplinary action against an elective local official.
Thus, the Local Government Code is the applicable law and
must prevail over the Administrative Code which is of general
application.[13] Further, the Local Government Code of 1991
was enacted much later than the Administrative Code of
1987. In statutory construction, all laws or parts thereof
which are inconsistent with the later law are repealed or
modified accordingly.[14]
Besides, even though appeal to the Court of Appeals is
granted under Sec. 1,[15] Rule 43 of the Revised Rules of
Court, Sec. 12,[16] Rule 43 of the Revised Rules of Court in
relation to Sec. 68[17] of the Local Government Code
provides for the immediate execution pending appeal. Under
the same case of Lapid v. Court of Appeals,[18] we
enunciated that the decisions of the Office of the President
under the Local Government Code are immediately
executory even pending appeal because the pertinent laws
under which the decisions were rendered mandated them to
be so.
In sum, the decisions of the Office of the President are final
and executory. No motion for reconsideration is allowed by
law but the parties may appeal the decision to the Court of
Appeals. The appeal, however, does not stay the execution
of the decision. Thus, the DILG Secretary may validly move
for its immediate execution.
As to the validity of the exemption granted by COMELEC in its
Resolution No. 3992, petitioner claims that the exemption
was invalid for being based on a mere draft resolution.
According to him, a draft resolution does not operate as a
final resolution of a case until the proper resolution is duly
signed and promulgated. Petitioner maintains that a draft
cannot produce any legal effect.
24
A perusal of the records, however, reveals that the
Resolution in O.P. Case No. 00-1-9220 was approved and
signed on March 22, 2001 by Executive Secretary Renato de
Villa by the authority of the President. Hence, the approval
was before the promulgation of COMELEC Resolution No.
3992 on April 24, 2001. The record also shows that the
request to implement the said suspension order was filed on
March 22, 2001 by the Senior Deputy Executive Secretary of
the Office of the President pursuant to the requirements
stated in the Resolution.
Moreover, COMELEC Resolution No. 3529[19] – which may
be applied by analogy and in relation to Sec. 2[20] of
COMELEC Resolution No. 3401 – merely requires the request
to be in writing indicating the office and place from which the
officer is removed, and the reason for said movement, and
submitted together with the formal complaint executed
under oath and containing the specific charges and the
answer to said complaint. The request for the exemption
was accompanied with the Affidavit of Complaint, Affidavit of
Controversion, Reply and Draft Resolution. The pertinent
documents required by the COMELEC to substantiate the
request were submitted. There being a proper basis for its
grant of exemption, COMELEC Resolution No. 3992 is valid.
WHEREFORE, the instant petition for review on certiorari is
DENIED. The assailed Court of Appeals’ resolutions dated
May 11, 2002 and July 1, 2002 in CA-G.R. SP No. 64583 are
hereby AFFIRMED.
SO ORDERED.
[G.R. No. 123037. March 21, 1997]
TEODORO Q. PEÑA, petitioner, vs. HOUSE OF
REPRESENTATIVES ELECTORAL TRIBUNAL AND ALFREDO E.
ABUEG, JR., respondents.
DECISION
TORRES, JR., J.:
Assailed herein is the October 12, 1995 Resolution[1] of the
House of Representatives Electoral Tribunal (HRET)
dismissing the Petition Ad Cautelam of the Petitioner

Teodoro Q. Peña in HRET Case No. 95-014. Petitioner
questioned the election of the private respondent Alfredo E.
Abueg, Jr. as Member of the House of Representatives
representing the Second District of the province of Palawan.
Petitioner and the private respondent were contenders for
the said Congressional Office in the May 8, 1995 elections.
On May 12, 195, upon canvassing the votes cast, the
Provincial Board of Canvassers of Palawan proclaimed the
private respondent as the winner.
On May 22, 1995, the instant petition was filed with the
HRET, wherein the petitioner, as protestant, averred that:
“7. The elections in the precincts of the Second District of
Palawan were tainted with massive fraud, widespread vote-
buying, intimidation and terrorism and other serious
irregularities committed before, during and after the voting,
and during the counting of votes and the preparation of
election returns and certificates of canvass which affected
the results of the election. Among the fraudulent acts
committed were the massive vote-buying and intimidation of
voters, disenfranchisement of petitioner’s known supporters
through systematic deletion of names from the lists of voters,
allowing persons to vote in excess of the number of
registered voters, misappreciation, misreading and non-
reading of protestant’s ballots and other irregularities.
8. According to the Statement of Votes by
Precinct/Municipality/City, the protestee allegedly obtained
52,967 votes, while the protestant allegedly obtained 46,023
votes, or a difference of 6,944 votes. A copy of said
document is attached hereto as Annex ‘B’.
9. Had the massive fraud, widespread intimidation and
terrorism and other serious irregularities not been
committed, the result of the elections for Member of the
House of Representatives would have been different and the
protestant would have garnered the highest number of votes
for the Office Member of the House of Representatives in the
Second District of Palawan, which was the true expression of
the will of the voters of the Province of Palawan.
10. The proclamation by the members of the Provincial
Board of Canvassers of Palawan that the protestee was
allegedly the duly elected Member of the House of
Representatives for the Second District of Palawan is
contrary to law and to the true expression of the will of the
voters of the Province of Palawan.”[2]
Private respondent-Protestee Abueg filed an Answer With
Affirmative Defense, Counterclaim and Counter-Protest[3] on
June 5, 1995, to which Peña filed a Reply on June 23, 1995.
Subsequent to the filing of his Answer, Abueg filed a Motion
to Dismiss[4] the Petition on June 22, 1995, averring that the
HRET has not acquired jurisdiction over the petition, the
same being insufficient in form and substance. In essence,
the motion to dismiss anchors its challenge on the fact that
the petition failed to allege the precincts where the massive
fraud and disenfranchisement of voters occurred, nor did it
point out how many votes would be gained by the protestant
as a result of the same.
Petitioner filed an Opposition to the Motion to Dismiss[5] on
July 10, 1995, attaching thereto a Summary of Contested
Precincts, naming 700 precincts where election irregularities
allegedly occurred.
In its Resolution of October 12, 1995, the respondent HRET
ruled that although it had jurisdiction over the petition, as
the sole judge of all contests relating to the election, returns
and qualifications of the members of the House of
Representatives, the said petition, however, fails to state a
cause of action, and is therefore, insufficient in form and
substance, meriting its dismissal.
The HRET states pertinently:
“There are 743 precincts in the second congressional district
of Palawan which is comprised of Puerto Princesa City and
the municipalities of Aborlan, Balabac, Bataraza, Brooke’s
Point, Narra, Quezon, and Marcos (Ordinance appended to
the 1973 Constitution). The Protestant failed to specify
which are the 700 precincts, out of the said 743 precincts,
that are included in his protest; he even failed to allege the
municipalities where the protested precincts are located.
Worse, the body of the Petition does not even mention the
700 precincts. Reference to them is made only in the Prayer.
These omissions prevent Protestee from being apprised of
the issues which he has to meet and make it virtually
impossible for the Tribunal to determine which ballot boxes
have to be collected.
25
The Supreme Court, in Fernando vs. Pastor M. Endencia,
Judge of First Instance of Bulacan, et. al. (No. 46099, 66 Phil
148, 150, August 30, 1938) observed that, ‘[w]hile the
election law does not say so directly, it is clearly inferred
from its relevant provisions that where the grounds of
contest are that legal votes were rejected and illegal votes
received, the motion of protest should state in what
precincts such irregularities occurred. xxx The specification in
the motion of protest of the election precinct or precincts
where the alleged irregularities occurred, is required in order
to apprise the contestee of the issues which he has to meet.
xxx’
In its more recent resolution in Grand Alliance for Democracy
(GAD) vs. COMELEC (G.R. No. 78302, May 26, 1987, 150 SCRA
665), the Supreme Court held that the petition therein ‘could
have been dismissed outright as deficient in form and
substance, being couched in general terms only, without
precise indication of the time, place and manner of the
commission of the alleged irregularities.’ xxx
Similarly, this Tribunal, in dismissing an election protest,
observed that the protest, in general language, “impugns,
contests and protests the illegal, improper and fraudulent
electoral practices, acts and deeds” of the protestee and
“impugns and contests all the election returns in the lone
district of Catanduanes.” The tribunal held that this
scattershot allegation is not allowed in election contests and
that “it is necessary to make a precise indication of the
precincts protested and a specification of the claimed
offenses to have been committed by the parties.” (Alberto
vs. Tapia, HRET Case No. 37, January 23, 1989)
While Protestant has attached as Annex “A” to his Opposition
to the Motion to Dismiss, filed on 10 July 1995, a Summary of
contested Precincts, the defects in his Protest were not cured
thereby as the Summary was submitted only after the
Motion to Dismiss had been filed. The Opposition and the
attached Summary do not amend the original Petition. There
is not even a prayer in the Opposition suggesting such
amendment.
Moreover, in a Resolution promulgated on 17 June 1995, the
Commission on Elections en banc (COMELEC) dismissed
herein Petitioner’s Petition (SPA Case No. 95-258) to declare
a failure of elections in the second district of Palawan. Copy

of said Resolution was sent to Petitioner Peña’s Petition Ad
Cautelam was thus converted into a regular protest (not Ad
Cautelam) effective upon the finality of the official COMELEC
resolution, thereby providing him an opportunity to amend it
to cure the defects cited above, Protestant took no positive
and affirmative steps for that purpose.
Protestant alleges in his Opposition that Protestee has
likewise failed to specify the 47 precincts he contests in his
Counter-Protest. This omission merely renders Protestee’s
Counter-Protest defective for insufficiency in form and
substance and for failure to state a cause of action. It does
not cure the fatal defects in Protestant’s Petition.
WHEREFORE, for failure of the petition (Protest) to state a
cause of action because it is fatally insufficient in form and
substance, the Tribunal Resolved to GRANT Protestee’s
Motion to Dismiss and to DISMISS, as it hereby DISMISSES,
the instant Petition of Protest. As a logical consequence
thereof and also for the same reason, Protestee’s Counter-
Protest is DISMISSED.
No pronouncement as to costs.
SO ORDERED.”[6]
Petitioner’s motion for reconsideration of the said resolution
was denied by the respondent tribunal on November 14,
1995.
In this Petition for Certiorari, filed on December 29, 1995,
petitioner argues that the respondent HRET acted with grave
abuse of discretion amounting to having acted without or in
excess of jurisdiction in dismissing the election protest of
petitioner considering that:
I. “THE PETITION AD CAUTELAM DATED 22 MAY 1995 STATED
A CAUSE OF ACTION AND IS SUFFICIENT IN FORM AND
SUBSTANCE.
II. ASSUMING ARGUENDO THAT THE PETITION WAS INITIALLY
DEFECTIVE BECAUSE IT FAILED TO SPECIFY THE CONTESTED
PRECINCTS, SAID DEFECT WAS CURED WHEN PETITIONER
SUBMITTED A SUMMARY OF THE CONTESTED PRECINCTS
WHICH FORMS PART OF THE RECORD OF THE RESPONDENT
HRET.”
It is the Petitioner’s view that the instant election protest is
sufficient in form and substance even while failing to specify
the precincts where irregularities allegedly occurred.
Nowhere is it provided that the specification of the precincts
is a jurisdictional requirement that must be complied with in
order that an election protest can be entertained by the
HRET. To support his submission, petitioner cites the cases
of Yalung vs. Atienza, 52 Phil 781, Arao vs. COMELEC, 210
SCRA 790 and Gallares vs. Casenas, 48 Phil 362, the latter
stating that:
“From a reading of the allegations of the protest, it may be
seen that frauds, irregularities and violations of the law are
alleged therein, which, if true, would undoubtedly change
the result of the elections.
The fact that in the protest the number of votes which would
result in favor of the protestant after the judicial counting is
not specified, does not affect the right of the protestant, for
it being known that said omission is a defect of the protest,
the same may be cured by a specification of the votes
mentioned in paragraphs 1, 2 and 3 of the protest, without
thereby adding new grounds for those already alleged by the
protestant.”
Applying the same principle to the specification of precincts
in the instant case, the defect in the petition should have
been cured by the opposition to the private respondent’s
Motion to Dismiss.
Moreover, the fact that the HRET did not summarily dismiss
the Petition Ad Cautelam, and instead, required the private
respondent Abueg to file an Answer, the HRET has thus made
a prior determination that the petition is sufficient in form
and substance.
We do not agree.
In the first place, in requiring the private respondent to
answer the petition, the HRET was not ruling on the formal
and substantive sufficiency of the petition. The order to
require an answer is but a matter of course, as under the
Revised Rules of Procedure of the HRET, it is provided that:
26
“RULE 22. Summons. - Upon the filing of the petition, the
Clerk of the Tribunal shall forthwith issue the corresponding
summons to the protestee or respondent together with a
copy of the petition, requiring him within ten (10) days from
receipt thereof to file his answer.”
As to the adequacy of the protest, we agree with respondent
HRET in ruling for the insufficiency of the same.
A perusal of the petition Ad Cautelam, reveals that Petitioner
makes no specific mention of the precincts where
widespread election, fraud and irregularities occured. This is
a fatal omission, as it goes into the very substance of the
protest. Under Section 21 of the Revised Rules of Procedure
of HRET, insufficiency in form and substance of the petition
constitutes a ground for the immediate dismissal of the
Petition.
The prescription that the petition must be sufficient in form
and substance means that the petition must be more than
merely rhetorical. If the allegations contained therein are
unsupported by even the faintest whisper of authority in fact
and law, then there is no other course than to dismiss the
petition, otherwise, the assumptions of an elected public
official may, and will always be held up by petitions of this
sort by the losing candidate.
Notably, the instant petition ad cautelam poses a more
serious inadequacy than a mere failure to specify the number
of votes which would inure to the protestant, as was the case
in Gallares vs. Casenas, or the failure to impugn the validity
of some of the ballots cast, as in Yalung vs. Atienza, supra,
both of which cases were decided in the 1920s. The defect in
the instant case arises from the failure to allege the
contested precincts. Only a bare allegation of “massive
fraud, widespread intimidation and terrorism and other
serious irregularities”, without specification, and
substantiation, of where and how these occurences took
place, appears in the petition. We cannot allow an election
protest based on such flimsy averments to prosper,
otherwise, the whole election process will deteriorate into an
endless stream of crabs pulling at each other, racing to
disembank from the water.
On his second point of argument, Petitioner likewise fails to
impress. The Court has already ruled in Joker P. Arroyo vs.

HRET,[7] that substantial amendments to the protest may be
allowed only within the same period for filing the election
protest, which, under Rule 16 of the HRET Rules of
Procedure is ten (10) days after proclamation of the winner.
While it is conceded that statutes providing for election
contests are to be liberally construed to the end that the will
of the people in the choice of public officers may not be
defeated by mere technical questions, the rule likewise
stands, that in an election protest, the protestant must stand
or fall upon the issues he had raised in his original or
amended pleading filed prior to the lapse of the statutory
period for filing of the protest.[8]
Admittedly, the rule is well-established that the power to
annul an election should be exercised with the greatest care
as it involves the free and fair expression of the popular will.
It is only in extreme cases of fraud and under circumstances
which demonstrate to the fullest degree a fundamental and
wanton disregard of the law that elections are annulled, and
then only when it becomes impossible to take any other
step.[9] xxx This is as it should be, for the democratic system
is good for the many although abhorred by a few.
In sum, this Court’s jurisdiction to review decisions and
orders of electoral tribunals operates only upon a showing of
grave abuse of discretion on the part of the tribunal. Only
where such a grave abuse of discretion is clearly shown shall
the Court interfere with the electoral tribunal’s judgment.
There is such showing in the present petition.
IN VIEW OF THE FOREGOING, the Court hereby resolves to
DISMISS the present petition for lack of merit. The resolution
of the respondent House of Representatives Electoral
Tribunal dated October 12, 1995 is hereby AFFIRMED.
SO ORDERED.
[G.R. No. 104171. February 24, 1999]
COMMISSIONER OF INTERNAL REVENUE, petitioner, vs. B.F.
GOODRICH PHILS., INC. (now SIME DARBY INTERNATIONAL
TIRE CO., INC.) and THE COURT OF APPEALS, respondents.
DECISION
27
PANGANIBAN, J.: Based on the BIR’s Letter of Authority No. 10115 dated April
14, 1975, the books and accounts of private respondent were
Notwithstanding the expiration of the five-year prescriptive examined for the purpose of determining its tax liability for
period, may the Bureau of Internal Revenue (BIR) still assess taxable year 1974. The examination resulted in the April 23,
a taxpayer even after the latter has already paid the tax due, 1975 assessment of private respondent for deficiency income
on the ground that the previous assessment was insufficient tax in the amount of P6,005.35, which it duly paid.
or based on a “false” return?
Subsequently the BIR also issued Letters of Authority Nos.
The Case 074420 RR and 074421 RR and Memorandum Authority
Reference No. 749157 for the purpose of examining Siltown’s
business, income and tax liabilities. On the basis of this
This is the main question raised before us in this Petition for
examination, the BIR commissioner issued against private
Review on Certiorari assailing the Decision[1] dated February
respondent on October 10, 1980, an assessment for
14, 1992, promulgated by the Court of Appeals[2] in CA-GR
deficiency in donor’s tax in the amount of P1,020,850, in
SP No. 25100. The assailed Decision reversed the Court of
relation to the previously mentioned sale of its Basilan
Tax Appeals (CTA)[3] which upheld the BIR commissioner’s
landholdings to Siltown. Apparently, the BIR deemed the
assessments made beyond the five-year statute of
consideration for the sale insufficient, and the difference
limitations.
between the fair market value and the actual purchase price
a taxable donation.
The Facts
In a letter dated November 24, 1980, private respondent
The facts are undisputed.[4] Private Respondent BF Goodrich contested this assessment. On April 9, 1981, it received
Phils., Inc. (now Sime Darby International Tire Co. Inc.), was another assessment dated March 16, 1981, which increased
an American-owned and controlled corporation previous to to P1,092,949 the amount demanded for the alleged
July 3, 1974. As a condition for approving the manufacture deficiency donor’s tax, surcharge, interest and compromise
by private respondent of tires and other rubber products, the penalty.
Central Bank of the Philippines required that it should
develop a rubber plantation. In compliance with this
Private respondent appealed the correctness and the legality
requirement, private respondent purchased from the
of these last two assessments to the CTA. After trial in due
Philippine government in 1961, under the Public Land Act
course, the CTA rendered its Decision dated March 29, 1991,
and the Parity Amendment to the 1935 Constitution, certain
the dispositive portion of which reads as follows:
parcels of land located in Tumajubong, Basilan, and there
developed a rubber plantation.
“WHEREFORE, the decision of the Commissioner of Internal
Revenue assessing petitioner deficiency gift tax is MODIFIED
More than a decade later, on August 2, 1973, the justice
and petitioner is ordered to pay the amount of P1,311,179.01
secretary rendered an opinion stating that, upon the
plus 10% surcharge and 20% annual interest from March 16,
expiration of the Parity Amendment on July 3, 1974, the
1981 until fully paid provided that the maximum amount that
ownership rights of Americans over public agricultural lands,
may be collected as interest on delinquency shall in no case
including the right to dispose or sell their real estate, would
exceed an amount corresponding to a period of three years
be lost. On the basis of this Opinion, private respondent sold
pursuant to Section 130(b) (1) and (c) of the 1977 Tax Code,
to Siltown Realty Philippines, Inc. on January 21, 1974, its
as amended by P.D. No. 1705, which took effect on August 1,
Basilan landholding for P500,000 payable in installments. In
1980.
accord with the terms of the sale, Siltown Realty Philippines,
Inc. leased the said parcels of land to private respondent for
a period of 25 years, with an extension of another 25 years at “SO ORDERED.”[5]
the latter’s option.

Undaunted, private respondent elevated the matter to the
Court of Appeals, which reversed the CTA, as follows:
“What is involved here is not a first assessment; nor is it one
within the 5-year period stated in Section 331 above. Since
what is involved in this case is a multiple assessment beyond
the five-year period, the assessment must be based on the
grounds provided in Section 337, and not on Section 15 of
the 1974 Tax Code. Section 337 utilizes the very specific
terms ‘fraud, irregularity, and mistake’. ‘Falsity does not
appear to be included in this enumeration. Falsity suffices
for an assessment, which is a first assessment made within
the five-year period. When it is a subsequent assessment
made beyond the five-year period, then, it may be validly
justified only by ‘fraud, irregularity and mistake’ on the part
of the taxpayer.”[6]
Hence, this Petition for Review under Rule 45 of the Rules of
Court.[7]
The Issues
Before us, petitioner raises the following issues:
“I Whether or not petitioner’s right to assess herein
deficiency donor’s tax has indeed prescribed as ruled by
public respondent Court of Appeals
II Whether or not the herein deficiency donor’s tax
assessment for 1974 is valid and in accordance with law”
Prescription is the crucial issue in the resolution of this case.
The Court’s Ruling
The petition has no merit.
Main Issue: Prescription
The petitioner contends that the Court of Appeals erred in
reversing the CTA on the issue of prescription, because its
ruling was based on factual findings that should have been
left undisturbed on appeal, in the absence of any showing
that it had been tainted with gross error or grave abuse of
discretion.[8] The Court is not persuaded.
True, the factual findings of the CTA are generally not
disturbed on appeal when supported by substantial evidence
and in the absence of gross error or grave abuse of
discretion. However, the CTA’s application of the law to the
facts of this controversy is an altogether different matter, for
it involves a legal question. There is a question of law when
the issue is the application of the law to a given set of facts.
On the other hand, a question of fact involves the truth or
falsehood of alleged facts.[9] In the present case, the Court
of Appeals ruled not on the truth or falsity of the facts found
by the CTA, but on the latter’s application of the law on
prescription.
Section 331 of the National Internal Revenue Code provides:
“SEC. 331. Period of limitation upon assessment and
collection. – Except as provided in the succeeding section,
internal-revenue taxes shall be assessed within five years
after the return was filed, and no proceeding in court without
assessment for the collection of such taxes shall be begun
after expiration of such period. 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: Provided, That this limitation shall not apply to cases
already investigated prior to the approval of this Code.”
Applying this provision of law to the facts at hand, it is clear
that the October 16, 1980 and the March 1981 assessments
were issued by the BIR beyond the five-year statute of
limitations. The Court has thoroughly studied the records of
this case and found no basis to disregard the five-year period
of prescription. As succinctly pronounced by the Court of
Appeals:
“The subsequent assessment made by the respondent
Commissioner on October 10, 1980, modified by that of
March 16, 1981, violates the law. Involved in this petition is
the income of the petitioner for the year 1974, the returns
for which were required to be filed on or before April 15 of
the succeeding year. The returns for the year 1974 were duly
filed by the petitioner, and assessment of taxes due for such
year -- including that on the transfer of properties on June
21, 1974 -- was made on April 13, 1975 and acknowledged by
Letter of Confirmation No. 101155 terminating the
examination on this subject. The subsequent assessment of
October 10, 1980 modified, by that of March 16, 1981, was
28
made beyond the period expressly set in Section 331 of the
National Intenal Revenue Code xxx.”[10]
Petitioner relies on the CTA ruling, the salient portion of
which reads:
“Falsity is what we have here, and for that matter, we hasten
to add that the second assessment (March 16, 1981) of the
Commissioner was well-advised having been made in
contemplation of his power under Section 15 of the 1974
Code (now Section 16, of NIRC) to assess the proper tax on
the best evidence obtainable “when there is reason to
believe that a report of a taxpayer is false, incomplete or
erroneous.” More, when there is falsity with intent to evade
tax as in this case, the ordinary period of limitation upon
assessment and collection does not apply so that contrary to
the averment of petitioner, the right to assess respondent
has not prescribed.
“What is the considered falsity? The transfer through sales
of the parcels of land in Tumajubong, Lamitan, Basilan in
favor of Siltown Realty for the sum of P500,000.00 only
whereas said lands had been sworn to under Presidential
Decree No. 76 (Dec. 6, 1972) as having a value of P2,683,467
(P2,475, 467 + P207,700) (see Declaration of Real Property
form, p. 28, and p. 15, no. 5, BIR Record).”[11]
For the purpose of safeguarding taxpayers from any
unreasonable examination, investigation or assessment, our
tax law provides a statute of limitations in the collection of
taxes. Thus, the law on prescription, being a remedial
measure, should be liberally construed in order to afford
such protection.[12] As a corollary, the exceptions to the law
on prescription should perforce be strictly construed.
Section 15 of the NIRC, on the other hand, provides that
“[w]hen a report required by law as a basis for the
assessment of any national internal revenue tax shall not be
forthcoming within the time fixed by law or regulation, or
when there is reason to believe that any such report is false,
incomplete, or erroneous, the Commissioner of Internal
Revenue shall assess the proper tax on the best evidence
obtainable.” Clearly, Section 15 does not provide an
exception to the statute of limitations on the issuance of an
assessment, by allowing the initial assessment to be made on
the basis of the best evidence available. Having made its

initial assessment in the manner prescribed, the
commissioner could not have been authorized to issue,
beyond the five-year prescriptive period, the second and the
third assessments under consideration before us.
Nor is petitioner’s claim of falsity sufficient to take the
questioned assessments out of the ambit of the statute of
limitations. The relevant part of then Section 332 of the
NIRC, which enumerates the exceptions to the period of
prescription, provides:
“SEC. 332. Exceptions as to period of limitation of
assessment and collection of taxes. -- (a) In the case of a false
or fraudulent return with intent to evade a tax or of a 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 the discovery
of the falsity, fraud, or omission: xxx.”
Petitioner insists that private respondent committed “falsity”
when it sold the property for a price lesser than its declared
fair market value. This fact alone did not constitute a false
return which contains wrong information due to mistake,
carelessness or ignorance.[13] It is possible that real property
may be sold for less than adequate consideration for a bona
fide business purpose; in such event, the sale remains an
“arm’s length” transaction. In the present case, the private
respondent was compelled to sell the property even at a
price less than its market value, because it would have lost all
ownership rights over it upon the expiration of the parity
amendment. In other words, private respondent was
attempting to minimize its losses. At the same time, it was
able to lease the property for 25 years, renewable for
another 25. This can be regarded as another consideration
on the price.
Furthermore, the fact that private respondent sold its real
property for a price less than its declared fair market value
did not by itself justify a finding of false return. Indeed,
private respondent declared the sale in its 1974 return
submitted to the BIR.[14] Within the five-year prescriptive
period, the BIR could have issued the questioned assessment,
because the declared fair market value of said property was
of public record. This it did not do, however, during all those
five years. Moreover, the BIR failed to prove that
respondent's 1974 return had been filed fraudulently.
Equally. significant was its failure to prove respondent's
intent to evade the payment of the correct amount of tax.
Ineludibly, the BIR failed to show that private respondent's
1974 return was filed fraudulently with intent to evade the
payment of the correct amount of tax.[15] Moreover, even
though a donor's tax, which is defined as "a tax on the
privilege of transmitting one's property or property rights to
another or others without adequate and full valuable
consideration,"[16] is different from capital gains tax, a tax
on the gain from the sale of the taxpayer's property forming
part of capital assets,[17] the tax return filed by private
respondent to report its income for the year 1974 was
sufficient compliance with the legal requirement to file a
return. In other words, the fact that the sale transaction may
have partly resulted in a donation does not change the fact
that private respondent already reported its income for 1974
by filing an income tax return.
Since the BIR failed to demonstrate clearly that private
respondent had filed a fraudulent return with the intent to
evade tax, or that it had failed to file a return at all, the
period for assessments has obviously prescribed. Such
instances of negligence or oversight on the part of the BIR
cannot prejudice taxpayers, considering that the prescriptive
period was precisely intended to give them peace of mind.
Based on the foregoing, a discussion of the validity and
legality of the assailed assessments has become moot and
unnecessary.
WHEREFORE, the Petition for Review is DENIED and the
assailed Decision of the Court of Appeals is AFFIRMED. No
costs.
SO ORDERED.
[G.R. No. 120324. April 21, 1999]
PHILEX MINING CORPORATION, petitioner, vs.
COMMISSIONER OF INTERNAL REVENUE, AND THE COURT
OF APPEALS, respondents.
DECISION
29
QUISUMBING, J.:
This petition for certiorari pursuant to Rule 45 of the Rules of
Court seeks to set aside the May 18, 1995 Decision[1] of the
Court of Appeals in CA-GR SP No. 34988, which affirmed the
Decision of the Court of the Tax Appeals in CTA Case No.
3547. The Court of Tax Appeals disposed of the case as
follows:
“WHEREFORE, the respondent, COMMISSIONER OF
INTERNAL REVENUE is hereby ordered to REFUND in favor of
petitioner, PHILEX MINING CORP., the sum of P16,747.36
without interest, equivalent to 25% partial refund of specific
taxes paid on its purchases of gasoline, oils and lubricants,
diesel and fuel oils pursuant to the provision of Section 5 of
Republic Act No. 1435, in relation to Section 142 (b) and (c)
of the National Internal Revenue Code and Section 145 as
prescribed under Sections 1 and 2 of R.A. No. 1435.
No pronouncement as to costs.
SO ORDERED.”[2]
As set forth in the decision of the Court of Appeals, the
following relevant incidents took place:
Petitioner as a domestic mining corporation had entered into
a Mining License Agreement with the then Ministry of
Natural Resources (now the Department of Environment and
Natural Resources). From the period July 1, 1980 to
December 31, 1981, petitioner purchased from several oil
companies, refined and manufactured mineral oils, motor
fuels, and diesel fuel oils. The specific taxes passed on to the
petitioner amounted to two million, four hundred ninety-two
thousand, six hundred seventy-seven pesos and twenty-two
centavos (P2,492,677.22).
On October 22, 1982, pursuant to Republic Act No. 1435,
petitioner filed a claim for refund with the Commissioner of
Internal Revenue (CIR) for six hundred twenty-three
thousand, one hundred sixty-nine pesos and thirty centavos
(P623,169.30), representing the twenty-five (25%) percent of
the specific taxes paid. The petitioner presented as evidence
the affidavits of its president, purchasing manager, and two
disinterested representatives of another licensed mining
corporation. They averred that for the period July 1980 to

December 1981, petitioner used refined and manufactured
mineral oils, motor fuels and diesel fuel oils in their business
operation and paid the corresponding specific taxes.
Pending CIR action, on November 16, 1982, the petitioner
filed a case for tax refund with the Court of Tax Appeals
(CTA). The petitioner sought judgment ordering the CIR to
pay as refund the amount of P623,169.30, with twenty (20%)
percent interest per annum, plus the costs of suit.
On August 4, 1994, the CTA rendered its decision, quoted at
the outset, granting the petitioner’s claim, but only to the
extent of sixteen thousand, seven hundred forty-seven pesos
and thirty-six centavos (P16,747.36).
The Court of Appeals affirmed the decision of the CTA.
Before us, the petitioner now cites the following alleged
errors of the Court of Appeals:
"I. BASING THE REFUND ON THE AMOUNTS
DEEMED PAID UNDER SECTIONS 1 AND 2 OF R.A. NO. 1435 IS
CONTRARY TO THE SUPREME COURT’S EN BANC DECISION IN
INSULAR LUMBER CO. V. COURT OF TAX APPEALS WHICH
GRANTED THE CLAIM FOR PARTIAL REFUND ON THE BASIS OF
SPECIFIC TAXES ACTUALLY PAID BY THE CLAIMANT WITHOUT
QUALIFICATION OR LIMITATION.
"II. THE SAID RULING OF THE RESPONDENT COURT
IGNORES THE INCREASE IN RATES IMPOSED BY SUCCEEDING
AMENDATORY LAWS, UNDER WHICH THE PETITIONER PAID
THE SPECIFIC TAXES ON MANUFACTURED AND DIESEL FUELS.
"III. IN MAKING THE RULING, THE RESPONDENT COURT
WENT AGAINST THE ESTABLISHED RULES OF CONSTRUCTION
IN THAT IT LENT ITSELF TO INTERPRETING SECTION 5 OF R.A.
NO. 1435, WHEN THE CONSTRUCTION OF SAID LAW IS NOT
NECESSARY.
"IV. SECTIONS 1 AND 2 OF R.A. NO. 1435 ARE NOT THE
OPERATIVE PROVISIONS TO BE APPLIED BUT RATHER,
SECTIONS 142 AND 145 (WHICH WOULD BECOME SECTIONS
153 AND 156) OF THE NATIONAL INTERNAL REVENUE CODE,
AS AMENDED.
"V. BASING THE COMPUTATION OF THE PARTIAL TAX
REFUND ON SECTIONS 1 AND 2 OF R.A. NO. 1435, RATHER
THAN ON SECTIONS 153 AND 156 OF THE NATIONAL
INTERNAL REVENUE CODE, IS UNFAIR, ERRONEOUS,
ARBITRARY, INEQUITABLE AND OPPRESSIVE.”[3]
There are two clear-cut issues now raised before the Court:
1) Whether respondent court erred in basing the tax refund
under Sections 1 and 2 of R.A. 1435, instead of the increased
rates imposed by Sections 142 and 145 (which became
Sections 153 and 156) of the National Internal Revenue Code,
as amended.
2) Whether the respondent court erred in relying on the
Supreme Court’s decision in Commissioner of Internal
Revenue vs. Rio Tuba Nickel Mining Corp.[4] which allegedly
runs counter to the Court’s decision in Insular Lumber Co. vs.
Court of Tax Appeals.[5]
R.A. 1435, “An Act to Provide Means for Increasing the
Highway Special Fund,” states that the specific taxes
collected on gasoline and fuel which accrue to the Fund shall
be used for the construction and maintenance of the
highway system. Mining and lumber companies seldom use
national highways. Since the gasoline and fuel purchased by
mining and lumber companies are used within their own
compounds and roads, and they do not benefit directly from
the Fund, the government granted to these companies a 25%
partial refund of specific taxes paid on purchases of
manufactured diesel and fuel oils. This tax relief was
embodied in Section 5 of R.A. No. 1435, which states:
“Sec. 5 of R.A. 1435 -- The proceeds of the additional tax on
manufactured oils shall accrue to the road and bridge funds
of the political subdivision for whose benefit the tax is
collected: Provided, however, That whenever any oils
mentioned above are used by miners or forest
concessionaires in their operations, twenty-five per centum
of the specific tax paid thereon shall be refunded by the
Collector of Internal Revenue upon submission of proof of
actual use of oils and under similar conditions enumerated in
sub-paragraphs one and two of section one hereof,
amending section one hundred forty-two of the Internal
Revenue Code: Provided, further, That no new road shall be
constructed unless the routes or location thereof shall have
30
been approved by the Commissioner of Public Highways after
a determination that such road can be made part of an
integral and articulated route in the Philippine Highway
System, as required in section twenty-six of the Philippine
Highway Act of 1953.”
In 1977, P.D. 1158 codified all existing laws. Sections 142 and
145 of the Tax Code, as amended by Sections 1 and 2 of R.A.
1435 were re-numbered to Sections 153 and 156.[6] Later,
these sections were amended by P.D. No. 1672 and
subsequently by E.O. 672 increasing the tax rates for certain
oil and fuel products.[7] When the Highway Special Fund was
abolished in 1985, the reason for the refund ceased to exist.
This Court, in a string of decisions, repeatedly held that the
tax refund under R.A. 1435 is computed on the basis of the
specific tax deemed paid under Sections 1 and 2, and not on
the increased rates actually paid under the 1977 NIRC.
Among these cases, are CIR vs. Rio Tuba Nickel Mining
Corporation,[8] CIR vs. CA and Atlas Consolidated Mining
and Development Corp.,[9] en banc’s ruling in Davao Gulf
Lumber Corporation vs. CIR and CA,[10] Atlas Consolidated
Mining and Development Corp. vs. CIR, et. al.[11] and the
recently decided consolidated cases of CIR vs. C.A. and CDCP
Mining Corporation[12] and Sirawai Plywood & Lumber Co.,
Inc. vs. CA and CIR..[13]
The fundamental issues raised herein appear to be the very
issues settled in the case of Davao Gulf Lumber Corporation
vs. CIR and CA.[14] We are guided and constrained by this
precedent in now reaching a similar resolution of the issues,
adverse to herein petitioner.
In Davao Gulf, the Court en banc held:
“x x x Since the partial refund authorized under Section 5,
R.A. 1435, is in the nature of a tax exemption, it must be
construed strictissimi juris against the grantee. Hence,
petitioner’s claim of refund on the basis of the specific taxes
it actually paid must expressly be granted in a statute stated
in a language too clear to be mistaken.
We have carefully scrutinized R.A. 1435 and the subsequent
pertinent statutes and found no expression of a legislative
will authorizing a refund based on the higher rates claimed
by petitioner. x x x When the law itself does not explicitly

provide that a refund under R.A. 1435 may be based on
higher rates which were non-existent at the time of its
enactment, this Court cannot presume otherwise.
legislative lacuna cannot be filled by judicial fiat.” (citations
omitted)[15]
In Davao Gulf, the Court also laid to rest the alleged conflict
between the Insular Lumber and the Rio Tuba decisions, in
this manner:
“Insular Lumber Co. decided a claim for refund on specific tax
paid on petroleum products purchased in the year 1963,
when the increased rates under the NIRC of 1977 were not
yet in effect. Thus, the issue now before us did not exist at
the time, since the applicable rates were still those
prescribed under Sections 1 and 2 of R.A. 1435.
xxx xxx xxx
Clearly it is impossible for these two decisions to clash with
our pronouncements in Rio Tuba and second Atlas case, in
which we ruled that the refund granted be computed on the
basis of the amounts deemed paid under Sections 1 and 2 of
R.A. 1435. In the light, we find no basis for petitioner’s
invocation of the constitutional proscription that ‘no doctrine
or principle of law laid down by the Court in a decision
rendered en banc or in division may be modified or reversed
except by the Court sitting en banc.’
Finally, petitioner asserts that equity and justice demand that
the computation of the tax refunds be based on actual
amounts paid under Sections 153 and 156 of the NIRC. We
disagree. According to an eminent authority on taxation,
‘there is no tax exemption solely on the ground of equity.’”
(citations omitted)[16]
The subsequent codification of tax laws under the 1977 NIRC,
Sections 153 and 156, mandated the increased rates of
specific taxes levied on manufactured oils, other fuels and
diesel fuel oils. Although Philex Mining Corporation paid the
taxes on their oil and fuel purchases based on the increased
rates, the latter law did not specifically provide for a refund
based on the increased rates. Since the grant of refund
privileges must be strictly construed against the taxpayer, the
basis for the refund remains to be the amounts deemed paid
under Sections 1 and 2 of R.A. 1435.[17] Furthermore, the
claims for refund which were not filed with the CIR and those
that prescribed must be deemed excluded, for being outside
A the ambit of the legislative enactment.
As to the 20% interest per annum prayed by the petitioner,
we reiterate our pronouncement in Rio Tuba, where no
interest was awarded although the claim for refund was
granted. As aptly stated by the CTA, viz.:
“x x x [T]he rule is that no interest on refund of tax can be
awarded unless authorized by law or the collection of the tax
was attended by arbitrariness. An action is not arbitrary
when exercised honestly and upon due consideration where
there is room for two opinions, however much it may be
believed that an erroneous conclusion was reached.
Arbitrariness presupposes inexcusable or obstinate disregard
of legal provisions. None of the exceptions are present in the
case at bar. Respondent’s decision denying petitioner’s claim
for refund was based on an honest interpretation of law.
We, therefore see no reason why petitioner should be
entitled to the payment of interest. (citations omitted)”[18]
WHEREFORE, the instant petition is hereby DENIED, and the
assailed decision of the Court of Appeals is hereby
AFFiRMED.
Costs against petitioner.
SO ORDERED.
[G.R. No. 114087. October 26, 1999]
PLANTERS ASSOCIATION OF SOUTHERN NEGROS INC.,
petitioner, vs. HON. BERNARDO T. PONFERRADA,
PRESIDING JUDGE, REGIONAL TRIAL COURT OF NEGROS
OCCIDENTAL, BRANCH 42; HONORABLE SECRETARY OF
LABOR & EMPLOYMENT; BINALBAGAN – ISABELA SUGAR
COMPANY, INC., and NATIONAL CONGRESS OF UNIONS IN
THE SUGAR INDUSTRY OF THE PHILIPPINES (NACUSIP),
respondents.
DECISION
PURISIMA, J.:
31
“Nowhere is the economic disparity between labor and
capital so evident than in the sugar industry. While it is the
lowly farm worker who must toil in the field under the
harshness of conditions, it is the planter who gets to enjoy
more the fruits of production. While the planter lives in the
comfort of his palatial home, the living condition of the sugar
farm worker more often than not defies the basic tenets of
human dignity.”[1]
At bar is a Petition for Review on Certiorari under Rule 45 of
the Revised Rules of Court seeking to review and set aside
the August 8, 1993 Decision[2] and January 21, 1994
Resolution[3] of the Regional Trial Court of Negros
Occidental, Branch 42,[4] Bacolod City, in Civil Case No. 6894
for Declaratory Relief.
The antecedent facts that matter can be culled as follows:
Prior to the passage of Republic Act No. 6982, entitled An Act
Strengthening the Sugar Amelioration Program in the Sugar
Industry, Providing the Mechanics for its Implementation,
and for other Purposes, there were two principal laws
providing additional financial benefits to sugar farm workers,
namely: Republic Act No. 809 and Presidential Decree No.
621.
Republic Act No. 809[5] (implementable in milling districts
with an annual gross production of 150,000 piculs or more),
institutionalized production sharing scheme, in the absence
of any private agreement between the planters and farm
workers, depending on the mill’s total production for each
immediately preceding crop year; and specifically providing
that any increase in the planters’ share shall be divided in the
following manner: 40% of the increase shall accrue to the
planter and 60% to the farm workers.[6]
On the other hand, Presidential Decree No. 621,[7] as
amended, charged a lien of P2.00 per picul on all sugar
produced, to be pooled into a fund for subsequent
distribution as bonuses to sugar workers.[8]
Thus, before R.A. No.6982, there were two sets of
beneficiaries under the social amelioration program in the
sugar industry:
1) Beneficiaries under R.A. No. 809 and P.D. No. 621; and

2) Beneficiaries under P.D. No. 621 only. (In milling districts
where the annual gross production is less than 150,000
piculs)
On May 24, 1991, Republic Act No. 6982 took effect. It
imposed a lien of P5.00 per picul on the gross production of
sugar beginning sugar crop year 1991-1992, with an
automatic additional lien of P1.00 for every two (2) years for
the succeeding ten (10) years from the effectivity of the Act
subject to the discretion of the Secretary of Labor and
Employment and upon recommendation of the Sugar
Tripartite Council.[9]
Directly addressing the effect of the new P5.00 per picul lien
vis-à-vis the two previously existing laws, Section 12 of R.A.
No. 6982, provides:
“Section. 12. Benefits under Republic Act No. 809 and P.D.
621, as Amended. - All liens and other forms of production
sharing in favor of the workers in the sugar industry under
Republic Act No. 809 and Presidential Decree No. 621, as
amended, are hereby substituted by the benefits under this
Act: Provided, That cases arising from such laws pending in
the courts or administrative bodies at the time of the
effectivity of this Act shall not be affected thereby.
In connection therewith, Section 14 of the same Act further
states:
“Section 14. Non-Diminution of Benefits.-The provisions of
Section 12 hereof notwithstanding, nothing in this Act shall
be construed to reduce any benefit, interest, right or
participation enjoyed by the workers at the time of the
enactment of this Act, and no amount received by any
beneficiary under this Act shall be subject to any form of
taxation.”
Private respondent Binalbagan-Isabela Sugar Company
(BISCOM) is engaged in the business of, among others,
milling raw sugar cane of various sugar plantations in their
milling district. For the crop year 1991–1992, the sugar farm
workers’ share in BISCOM, under R.A. No. 809 amounted to
P30, 590,086.92.[10]
Under P.D. No.621, the workers’ benefit for the same crop
year amounted to P2,233,285.26, computed as follows:
32
Gross production of BISCOM 1,595,184.46 Meanwhile, pending a definite ruling on the effect of R.A. No.
6982 to R.A. No. 809 and P.D. No. 621, respondent Secretary
(In Piculs) of Labor issued Department Order No.2 (1992),[13] directing,
inter alia, the three milling districts in Negros Occidental,
namely: SONDECO, San Carlos and herein private respondent
Less: 30% BISCOM Share 478,555.33
BISCOM, to continue implementing R.A. No.809 per
recommendation of the Sugar Tripartite Council.
70% Planter Share 2,116,626.13
Consequently, the petitioner, Planters Association of
Multiplied by P2.00 lien x P2.00 Southern Negros Inc. (PASON), an organization of sugar farm
plantation owners milling with private respondent BISCOM,
TOTAL P2,233,258.26[11] filed with the respondent court a Petition for Declaratory
Relief against the implementation of the said D.O. No. 2. It
But considering that the P2.00 lien under P.D. No.621 is theorized that in view of the substitution of benefits under
obviously lesser than the P5.00 lien under R.A. No.6982, the Section 12 of R.A. No. 6982, whatever monetary rewards
same was no longer imposed by BISCOM pursuant to R.A. previously granted to the sugar farm workers under R.A. No.
No.6982. 809 and P.D. No. 621 were deemed totally abrogated and/or
superseded.[14]
Hence, before R.A. No.6982 took effect, the total farm
workers’ benefit was: On August 18, 1993, the respondent Court came out with the
assailed Decision; the dispositive portion of which held:
Under R.A. No. 809 P30,590,086.92
“WHEREFORE, premises considered, the Court hereby
declares:
Under P.D. No. 621 2,233,258.16
1. That the benefits under RA 6982 do not and cannot
supersede or substitute the benefits under RA 809 in milling
P32,823,345.18 districts where the latter law was already in implementation
at the time of the effectivity of RA 6982; and
Upon the effectivity of R.A. No.6982, the total workers’
benefit in BISCOM’s milling district was computed as follows: 2. That the sugarcane workers in the BISCOM milling district
shall continue to enjoy the benefits under RA 809 in addition
Gross Production of BISCOM 1,595,184.46 to the benefits that will henceforth be provided for by RA
6982 now being implemented by private respondent.
(In Piculs)
SO ORDERED.”[15]
Less: 30% BISCOM share 478,555.34
With the denial of its motion to reconsider the aforesaid
Decision, petitioner found its way to this Court via the
70% Planter Share 1,116,629.12
present petition.
Multiplied by P5.00 lien x P5.00
The petition is not visited by merit.
TOTAL FARMWORKERS’ BENEFIT P5,583,145.61[12]
From a cursory reading of Section 12[16] of R.A. No. 6892,
the inevitable conclusion would be that the benefits under

R.A. No.809 and P.D. No. 621 have been superseded by those
granted under the new law. This substitution, however,
appears to be qualified by Section 14[17] which disallows
substitution if its effect would be to diminish or reduce
whatever financial benefits the sugar farm workers are
receiving under existing laws at the time of the effectivity of
R.A. No. 6289.
How then should Section 12 of R.A. No. 6982 be interpreted
in light of the qualification under Section 14 of the same Act?
Petitioner insists that the word “substitution” in Section 12
should be taken in its literal sense considering that the
intention of Congress to effect a substitution of benefits is
clear and unequivocal. Under this interpretation of
“unqualified substitution”, the sugar farm workers in the
subject milling district will receive only P5,583,145.61 under
R.A. No.6289, as against the P32,823,345.18 to which the
workers were entitled under P.D. 621 and R.A. No. 809.
So also, invoking the Opinion[18] “It is believed that the
benefits conferred upon labor by RA 809 have been
superseded by those granted to it under RA 6982. This
conclusion is inescapable from a reading of Section 12 of the
latter law, as well as its repealing clause (Sec. 16). Indeed,
the production-sharing scheme decreed in RA 809 cannot
remain in force upon the effectivity of the new production-
sharing procedure prescribed in RA 6982; otherwise, sugar
workers would be receiving two kinds of financial benefits
simultaneously.
The substitution, however, of sugar workers benefits under
RA 809 by RA 6982 is qualified by Section 14 of the latter.
This section provides that if the effect of such substitution
will be to diminish or reduce whatever monetary rewards
sugar industry laborers are receiving under RA 809, then such
workers shall continue to be entitled to the benefits provided
in such law. Expressed otherwise the production-sharing
scheme in RA 6982 does not apply to sugar industry workers
in milling districts where its application would be financially
disadvantageous to them, in which case the existing
production-sharing agreement based on RA 809 shall still
govern.” (Opinion No. 115, S. 1992 dated September 2, 1992,
signed by Justice Secretary Franklin Drilon.)18 of the
Secretary of Justice, petitioner contends, in the alternative,
that the application of R.A. No. 809 can be maintained but in
no case should the benefits thereunder be implemented in
addition to R.A. No. 6982. Applying this interpretation, the
share of the sugar farm workers would amount to
P30,590,086.92.
On the other hand, under the interpretation espoused by the
public respondent (that the benefits conferred by R.A.
No.6982 should complement those granted by R.A. No. 809
which cannot be superseded by the former Act since Section
14 thereof prohibits diminution of benefits), the total
worker’s benefit would be as follows:
R.A. No. 809 P30,590,086.92
R.A. No. 6982 __,583,145.61
P36,173,232.53
It is a well-settled rule of legal hermeneutics that each
provision of law should be construed in connection with
every other part so as to produce a harmonious whole and
every meaning to be given to each word or phrase is
ascertained from the context of the body of the statute.[19]
Ut magis valeat quam pereat.[20] Consequently, laws are
given a reasonable construction such that apparently
conflicting provisions are allowed to stand and given effect
by reconciling them, reference being had to the moving spirit
behind the enactment of the statute.[21]
Applying the abovestated doctrine, Section 12 therefore,
which apparently mandates a total substitution by R. A. No.
6982 of all the benefits under R.A. No. 809 and P.D. No. 621
existing at the time of the effectivity of R.A. No. 6982, can
not be construed apart from Section 14 which prohibits such
substitution if the effect thereof would be to reduce any
benefit, interest, right or participation enjoyed by the worker
at the time R.A. No. 6982 took effect. The Court finds as
untenable the interpretation of the petitioner based an
unqualified substitution of the benefits under R.A. No. 809
and P.D. No. 621 by the monertary rewards conferred by R.A.
No. 6982 in the amount of P5,583,145.61 as against the
P36,173,232.53 previously enjoyed by the sugar farm
workers under the former laws.
It bears stressing that the primordial objective behind the
enactment of R.A. No. 6982 was to augment the income of
33
sugar workers by establishing a social amelioration program
in cases where sugar farm workers had none, and at the
same time, to improve whatever amelioration schemes
already existing in the sugar districts concerned.[22] In
recognition of the avowed guarantee under Section 3, Article
13 of the Constitution to uphold the right of workers to a just
share in the fruits of production, the policy of R.A. No. 6982
states:
“Section 1. Policy. – It is the policy of the State to further
strengthen the rights of workers in the sugar industry to their
just share in the fruits of production by augmenting their
income and, among other schemes, institutionalizing the
mechanism among the partners in the sugar industry to
enable the workers and their families to enjoy a decent
living.” (Emphasis supplied)
The foregoing studiedly considered, there can be no other
construction that would best promote the welfare of the
sugar farm workers, than the interpretation of the public
respondent, implementing R.A. No. 6982 as a complement to
R.A. No. 809.
Citing the floor deliberations of Congress,[23] petitioner
insists that the non-diminution of benefits referred to in
Section 14 pertains only to pending claims of the workers at
the time of the effectivity of the Act. Stated differently, it is
contended that the benefits to which the workers are
entitled under R.A. No. 809 and P.D. No. 601 can be validly
diminished by virtue of the application of R.A. No. 6982,
because the non-diminution provision in Section 14 thereof
refers to pending claims accruing under P.D. 621 and R.A. No.
809, and not to the very benefits previously enjoyed by the
workers under the said laws. With this construction, from a
total benefit of P32,823,345.18 conferred by R.A. No. 809
and P.D. No. 621, the sugar workers would only be entitled to
a meager amount of P5,583,145.61.
The contention is barren of sustainable merit. To limit the
application of the non-diminution principle only to pending
claims would be repulsive not only to the policy of the Act
but also to the salutory provisions of the Constitution. Verily,
the glaring disparity of P27,240,199.57 between
P32,823,345.18 and P5,583,145.61 would not warrant such
an interpretation. As aptly ratiocinated[24] by the
respondent Court, the evolution of legislation in the sugar

industry had always had for its foremost concern the
advancement of the lot of the sugar farm worker. Hence,
through the years every law or decree enacted pursuant
thereto had always provided for an increase in wages and
benefits. The reason is obvious. Amidst the rapidly
changing, if not worsening, economic conditions prevalent in
the industry, the sugar worker can hardly cope with his
meager income to lean on.
Equally wanting of merit is the alleged double recovery under
the interpretation subscribed by the public respondent. Note
that had not R.A. No. 6982 been enacted, sugar farmworkers
would be entitled to a total a share of P32,823,345.18 under
R.A. No. 809 and P.D. No. 621; whereas under the alternative
view of the petitioner, maintaining the benefits (P30,
509,086.92) granted by R.A. No. 809 to the exclusion of the
benefits provided by R.A. No. 6982, sugar farm workers stand
to lose the difference of P2,233,258.56, from a total of
P32,823,345.18 which they were entitled before RA 6982
took effect. Certainly, such a disadvantageous construction
cannot be countenanced, being violative of the non-
diminution principle under Section 14 of R.A. No. 6982.
In view of the foregoing, the addition of the monetary
rewards under R.A. No. 6982 to the benefits granted by R.A.
No. 809, is what is called for in the case under consideration.
While it is true that “addition” is different from
“substitution”, the circumstances involving subject milling
districts (where the sugar farm workers are enjoying benefits
both from R.A. No. 809 and P.D. No. 621 prior to the
effectivity of R.A. No. 6982), necessitate the grant of
pecuniary advantage under R.A. No. 809 as a complement to
R.A. No. 6982. Otherwise, the workers would suffer a
diminution of benefits. Therefore, the increase of monetary
advantage in favor of the sugar farm workers, as a
consequence of such interpretation, is merely incidental to
the application of the non-diminution policy of R.A. No. 6982,
a labor provision which should be liberally construed to
further its purpose.[25]
Neither does the Court find convincing the interpretation
proposed by private respondent BISCOM. While maintaining
the application of R.A. No. 809 and P.D. No. 621 (where the
total share of the workers is P32,823,345.18), and
disregarding R.A. No. 6892, would be beneficial to the sugar
farm workers, to the mind of the Court, the assailed
construction of the public respondent (where the total share
of the workers is P36,173,232.53), would be more in keeping
with the spirit of R.A. No. 6982 which is: to improve the
living condition of workers in the sugar industry. Between
two statutory interpretations, that which better serves the
purpose of the law should prevail.[26]
Premises studiedly considered, the Court is of the ineluctable
conclusion, and so holds, that the respondent Court ventured
not in any judicial legislation but merely gave life to the
avowed policy of the State under Section 18, Article 2 of the
1987 Constitution, which states:
“Sec. 18. The state affirms labor as a primary social
economic force. It shall guarantee the rights of workers and
promote their welfare.”
WHEREFORE, the Petition is DENIED; and the assailed
Decision in Civil Case No. 6894, dated August 18, 1993, of the
Regional Trial Court of Negros Occidental, Branch 42, Bacolod
City, AFFIRMED. No pronouncement as to costs.
SO ORDERED.
[G.R. No. 125297. June 6, 2003]
ELVIRA YU OH, petitioner, vs. COURT OF APPEALS and
PEOPLE OF THE PHILIPPINES, respondents.
DECISION
AUSTRIA-MARTINEZ, J.:
Before this Court is a petition for review on certiorari of the
decision[1] of the Court of Appeals in CA-G.R. No. CR No.
16390, promulgated on January 30, 1996, affirming the
conviction of petitioner Elvira Yu Oh by the Regional Trial
Court (RTC), Branch 99, Quezon City and the resolution dated
May 30, 1996 which denied her motion for reconsideration.
The facts as borne by the records are as follows:
Petitioner purchased pieces of jewelry from Solid Gold
International Traders, Inc., a company engaged in jewelry
trading. Due to her failure to pay the purchase price, Solid
Gold filed civil cases[2] against her for specific performance
34
before the Regional Trial Court of Pasig. On September 17,
1990, petitioner and Solid Gold, through its general manager
Joaquin Novales III, entered into a compromise agreement to
settle said civil cases.[3] The compromise agreement, as
approved by the trial court, provided that petitioner shall
issue a total of ninety-nine post-dated checks in the amount
of P50,000.00 each, dated every 15th and 30th of the month
starting October 1, 1990 and the balance of over P1 million to
be paid in lump sum on November 16, 1994 which is also the
due date of the 99th and last postdated check. Petitioner
issued ten checks at P50,000.00 each, for a total of
P500,000.00, drawn against her account at the Equitable
Banking Corporation (EBC), Grace Park, Caloocan City Branch.
Novales then deposited each of the ten checks on their
respective due dates with the Far East Bank and Trust
Company (FEBTC). However, said checks were dishonored by
EBC for the reason “Account Closed.” Dishonor slips were
issued for each check that was returned to Novales.[4]
On October 5, 1992, Novales filed ten separate Informations,
docketed as Criminal Cases Nos. 92-26243 to 92-36252
before the RTC of Quezon City charging petitioner with
violation of Batas Pambansa Bilang 22, otherwise known as
the Bouncing Checks Law.[5] Except for the dates and the
check numbers, the Informations uniformly allege:
That on or about the … in Quezon City, Philippines, the said
accused did then and there willfully, unlawfully and
feloniously make or draw and issue to JOAQUIN P. LOVALES
III to apply on account or for value Equitable Banking Corp.
Grace Park Caloocan Branch Check No. … dated … payable to
SOLID GOLD INTERNATIONAL TRADERS, INC. in the amount of
P50,000.00, Philippine Currency, said accused well knowing
that at the time of issue she/he/they did not have sufficient
funds in or credit with the drawee bank for payment of such
check in full upon its presentment, which check when
presented for payment was subsequently dishonored by the
drawee bank for insufficiency of funds/Account Closed and
despite receipt of notice of such dishonor, said accused failed
to pay said SOLID GOLD INTERNATIONAL TRADERS, INC. the
amount of said check or to make arrangement for full
payment of the same within five (5) banking days after
receiving said notice.
CONTRARY TO LAW.[6]

The cases were consolidated and subsequently raffled to
Branch 99 of the said RTC. Upon arraignment, accused
pleaded not guilty.[7] Trial then ensued. On December 22,
1993, the RTC rendered its decision, the dispositive portion
of which reads:
WHEREFORE, this Court finds the accused GUILTY of ten
counts of violation of BP 22 and hereby sentences her to a
penalty of one year imprisonment for each count, or a total
of ten years, to be served in accordance with the limitation
prescribed in par. 4, Article 70 of the Revised Penal Code and
to indemnify complainant the amount of the checks in their
totality, or in the amount of P500,000.00.
SO ORDERED.[8]
Petitioner appealed to the Court of Appeals alleging that: the
RTC has no jurisdiction over the offense charged in the ten
informations; it overlooked the fact that no notice of
dishonor had been given to the appellant as drawer of the
dishonored checks; it failed to consider that the reason of
“closed account” for the dishonor of the ten checks in these
cases is not the statutory cause to warrant prosecution,
much more a conviction, under B.P. Blg. 22; it failed to
consider that there is only one act which caused the offense,
if any, and not ten separate cases; and it disregarded the
definition of what a ‘check’ is under Sec. 185 of the
Negotiable Instruments Law.[9]
Finding the appeal to be without merit, the Court of Appeals
affirmed the decision of the trial court with costs against
appellant.
Hence, herein petition raising the following errors:
I THAT THE COURT OF APPEALS ERRED IN NOT RESOLVING
THE JURISDICTIONAL ISSUE IN FAVOR OF THE ACCUSED-
APPELLANT BY UNJUSTLY DEPRIVING HER OF THE LEGAL
BENEFITS OF GIVING RETROACTIVE EFFECT TO THE
PROVISIONS OF R.A. NO. 7691 EXPANDING THE
JURISDICTION OF THE INFERIOR COURTS TO COVER THE
OFFENSES INVOLVED IN THESE CASES PURSUANT TO ART. 22
OF THE REVISED PENAL CODE, THUS IN EFFECT RENDERING
THE JUDGMENT OF CONVICTION PROMULGATED BY THE
TRIAL COURT BELOW AND AFFIRMED BY THE COURT OF
APPEALS PATENTLY NULL AND VOID FOR HAVING BEEN
RENDERED WITHOUT OR IN EXCESS OF JURISDICTION.
II THAT THE COURT OF APPEALS ERRED IN NOT RESOLVING IN
FAVOR OF ACCUSED-APPELLANT THE FACT THAT NO NOTICE
OF DISHONOR HAD BEEN GIVEN HER AS DRAWER OF THE
DISHONORED “CHECKS” PURSUANT TO THE REQUIREMENT
EXPRESSLY PROVIDED UNDER BATAS PAMBANSA BILANG 22.
III THAT THE COURT OF APPEALS ERRED IN CONSTRUING THE
PROVISIONS OF BATAS PAMBANSA BILANG 22 CONTRARY TO
THE WELL-ESTABLISHED RULE OF STATUTORY
CONSTRUCTION THAT “PENAL STATUTES, SUBSTANTIVE AND
REMEDIAL OR PROCEDURAL, ARE, BY THE CONSECRATED
RULE, CONSTRUED STRICTLY AGAINST THE STATE, OR
LIBERALLY IN FAVOR OF THE ACCUSED” AND THAT “IT IS
ALWAYS THE DUTY OF THE COURT TO RESOLVE THE
CIRCUMSTANCES OF EVIDENCE UPON A THEORY OF
INNOCENCE RATHER THAN UPON A THEORY OF GUILT
WHERE IT IS POSSIBLE TO DO SO”, AND IN SO DOING THE
DECISION APPEALED FROM INDULGED ITSELF IN “JUDICIAL
LEGISLATION” TO FAVOR THE PROSECUTION AND TO WORK
GRAVE INJUSTICE TO THE ACCUSED.
Simply worded, the issues of this case may be stated as
follows: (1) whether or not the appellate court erred in not
granting retroactive effect to Republic Act No. 7691[10] in
view of Art. 22 of the Revised Penal Code (RPC); (2) whether
or not notice of dishonor is dispensable in this case; and (3)
whether or not the appellate court erred in construing B.P.
Blg. 22.
We will resolve the first and third issues before considering
the second issue.
First issue – Whether or not the Court of Appeals erred in not
giving retroactive effect to R.A. 7690 in view of Article 22 of
the RPC.
Petitioner argues that: the failure of the appellate court to
give retroactive application to R.A. 7691 is a violation of Art.
22 of the Revised Penal Code which provides that penal laws
shall have retroactive effect insofar as they favor the person
guilty of the felony; R.A. 7691 is a penal law in the sense that
35
it affects the jurisdiction of the court to take cognizance of
criminal cases; taken separately, the offense covered by each
of the ten Informations in this case falls within the exclusive
original jurisdiction of the Municipal Trial Court under Sec. 2
of R.A. 7691; and the Court of Appeals is guilty of judicial
legislation in stating that after the arraignment of petitioner,
said cases could no longer be transferred to the MTC without
violating the rules on double jeopardy, because that is not so
provided in R.A. 7691.[11]
The Solicitor General, in its Comment, counters that the
arguments of petitioner are baseless contending that: penal
laws are those which define crimes and provides for their
punishment; laws defining the jurisdiction of courts are
substantive in nature and not procedural for they do not
refer to the manner of trying cases but to the authority of the
courts to hear and decide certain and definite cases in the
various instances of which they are susceptible; R.A. No.
7691 is a substantive law and not a penal law as nowhere in
its provisions does it define a crime neither does it provide a
penalty of any kind; the purpose of enacting R.A. No. 7691 is
laid down in the opening sentence thereof as “An Act
Expanding the Jurisdiction of the Municipal Trial Courts,
Municipal Circuit Trial Courts and the Metropolitan Trial
Court” whereby it reapportions the jurisdiction of said courts
to cover certain civil and criminal case, erstwhile tried
exclusively by the Regional Trial Courts; consequently, Art. 22
of the RPC finds no application to the case at bar; jurisdiction
is determined by the law in force at the time of the filing of
the complaint, and once acquired, jurisdiction is not affected
by subsequent legislative enactments placing jurisdiction in
another tribunal; in this case, the RTC was vested with
jurisdiction to try petitioner’s cases when the same were
filed in October 1992; at that time, R.A. No. 7691 was not yet
effective;[12] in so far as the retroactive effect of R.A. No.
7691 is concerned, that same is limited only to pending civil
cases that have not reached pre-trial stage as provided for in
Section 7 thereof and as clarified by this Court in People vs.
Yolanda Velasco[13], where it was held: “[a] perusal of R.A.
No. 7691 will show that its retroactive provisions apply only
to civil cases that have not yet reached the pre-trial stage.
Neither from an express proviso nor by implication can it be
understood as having retroactive application to criminal
cases pending or decided by the RTC prior to its
effectivity.”[14]

On this point, the Court fully agrees with the Solicitor General
and holds that Article 22 of the Revised Penal Code finds no
application to the case at bar.
Said provision reads:
ART. 22. Retroactive effect of penal laws. – Penal laws shall
have a retroactive effect insofar as they favor the person
guilty of a felony, who is not a habitual criminal, as this term
is defined in Rule 5 of Article 62 of this Code, although at the
time of the publication of such laws a final sentence has been
pronounced and the convict is serving sentence.
A penal law, as defined by this Court, is an act of the
legislature that prohibits certain acts and establishes
penalties for its violations. It also defines crime, treats of its
nature and provides for its punishment.[15] R.A. No. 7691
does not prohibit certain acts or provides penalties for its
violation; neither does it treat of the nature of crimes and its
punishment. Consequently, R.A. No. 7691 is not a penal law,
and therefore, Art. 22 of the RPC does not apply in the
present case.
B. P. Blg. 22, which took effect on April 24, 1979, provides the
penalty of imprisonment of not less than thirty days but not
more than one year or by a fine of not less than but not more
then double the amount of the check which fine shall in no
case exceed P200,000.00, or both such fine and
imprisonment at the discretion of the court.
R.A. No. 7691 which took effect on June 15, 1994, amended
B.P. Blg. 129, and vested on the Metropolitan, Municipal and
Municipal Circuit Trial Courts jurisdiction to try cases
punishable by imprisonment of not more than six (6)
years.[16] Since R.A. No. 7691 vests jurisdiction on courts, it
is apparent that said law is substantive.[17]
In the case of Cang vs. Court of Appeals,[18] this Court held
that “jurisdiction being a matter of substantive law, the
established rule is that the statute in force at the time of the
commencement of the action determines the jurisdiction of
the court.”[19] R.A. No. 7691 was not yet in force at the time
of the commencement of the cases in the trial court. It took
effect only during the pendency of the appeal before the
Court of Appeals.[20] There is therefore no merit in the
claim of petitioner that R.A. No. 7691 should be retroactively
applied to this case and the same be remanded to the MTC.
The Court has held that a “law vesting additional jurisdiction
in the court cannot be given retroactive effect.”[21]
Third issue – Whether or not the Court of Appeals
erroneously construed B.P. Blg. 22.
Petitioner insists that: penal statutes must be strictly
construed and where there is any reasonable doubt, it must
always be resolved in favor of the accused;[22] the Court of
Appeals, in construing that B.P. Blg. 22 embraces cases of “no
funds” or “closed accounts” when the express language of
B.P. Blg. 22 penalizes only the issuance of checks that are
subsequently dishonored by the drawee bank for
“insufficiency” of funds or credit, has enlarged by implication
the meaning of the statute which amounts to judicial
legislation;[23] a postdated check, not being drawn payable
on demand, is technically not a special kind of a bill of
exchange, called check, but an ordinary bill of exchange
payable at a fixed date, which is the date indicated on the
face of the postdated check, hence, the instrument is still
valid and the obligation covered thereby, but only civilly and
not criminally;[24] the trial court also erroneously cited a
portion in the case of Lozano vs. Martinez[25] that the
“language of B.P. Blg. 22 is broad enough to cover all kinds of
checks, whether present dated or postdated, or whether
issued in payment of pre-existing obligations or given in
mutual or simultaneous exchange for something of value,”
since the same is mere obiter dictum;[26] in the
interpretation of the meaning of a “check”, where the law is
clear and unambiguous, the law must be taken as it is, devoid
of judicial addition or subtraction.[27]
The Solicitor General counters that a postdated check is still a
check and its being a postdated instrument does not
necessarily make it a bill of exchange “payable at a fixed or
determinable future time” since it is still paid on demand on
the date indicated therein or thereafter just like an ordinary
check.[28] It also points out that the doctrine laid down in
Lozano vs. Martinez was reiterated in People vs. Nitafan,[29]
hence, it can no longer be argued that the statement in the
case of Lozano regarding the scope of “checks” is mere obiter
dictum.
Again, we agree with the Solicitor General and find
petitioner’s claim to be without merit.
36
The rationale behind B.P. Blg. 22 was initially explained by
the Court in the landmark case of Lozano vs. Martinez[30]
where we held that:
The gravamen of the offense punished by B.P. Blg. 22 is the
act of making and issuing a worthless check or a check that is
dishonored upon its presentation for payment … The thrust
of the law is to prohibit, under pain of penal sanctions, the
making or worthless checks and putting them in circulation.
Because of its deleterious effects on the public interest, the
practice is proscribed by law. The law punished the act not
as an offense against property, but an offense against public
order.[31]
...
The effects of the issuance of a worthless check transcend
the private interests of the parties directly involved in the
transaction and touches the interests of the community at
large. The mischief it creates is not only a wrong to the
payee or holder but also an injury to the public. The harmful
practice of putting valueless commercial papers in
circulation, multiplied a thousandfold, can very well pollute
the channels of trade and commerce, injure the banking
system and eventually hurt the welfare of society and the
public interest.[32]
The same is reiterated in Cueme vs. People[33] where we
pronounced that:
. . . B.P. Blg. 22 was purposely enacted to prevent the
proliferation of worthless checks in the mainstream of daily
business and to avert not only the undermining of the
banking system of the country but also the infliction of
damage and injury upon trade and commerce occasioned by
the indiscriminate issuances of such checks. By its very
nature, the offenses defined under B.P. Blg. 22 are against
public interest.[34]
In Recuerdo vs. People, this Court also held that the terms
and conditions surrounding the issuance of the checks are
irrelevant since its primordial intention is to ensure the
stability and commercial value of checks as being virtual
substitutes for currency.[35]

Petitioner’s claim that cases of “closed accounts” are not
included in the coverage of B.P. Blg. 22 has no merit
considering the clear intent of the law, which is to discourage
the issuance of worthless checks due to its harmful effect to
the public. This Court, in Lozano vs. Martinez, was explicit in
ruling that the language of B.P. Blg. 22 is broad enough to
cover all kinds of checks, whether present dated or
postdated, or whether issued in payment of pre-existing
obligations or given in mutual or simultaneous exchange for
something of value.[36]
In People vs. Nitafan,[37] the Supreme Court reiterated this
point and held that:
B.P. Blg. 22 … does not distinguish but merely provides that
“[a]ny person who makes or draws and issues any check
knowing at the time of issue that he does not have sufficient
funds in or credit with the drawee bank … which check is
subsequently dishonored … shall be punished by
imprisonment … Ubi lex non distinguit nec nos distinguere
debemus.
But even if We retrace the enactment of the “Bouncing
Check Law” to determine the parameters of the concept of
“check”, we can easily glean that the members of the then
Batasang Pambansa intended it to be comprehensive as to
include all checks drawn against banks.[38]
In this light, it is easy to see that the claim of petitioner that
B.P. Blg. 22 does not include ‘postdated checks’ and cases of
‘closed accounts’ has no leg to stand on. The term “closed
accounts” is within the meaning of the phrase “does not have
sufficient funds in or credit with the drawee bank”.
Anent the second issue: whether or not notice of dishonor is
dispensable in the case at bar. Petitioner failed to show any
cogent reason for us to disturb the findings of the RTC and
the Court of Appeals.
B.P. Blg. 22 or the Bouncing Check’s Law seeks to prevent the
act of making and issuing checks with the knowledge that at
the time of issue, the drawer does not have sufficient funds
in or credit with the bank for payment and the checks were
subsequently dishonored upon presentment.[39] To be
convicted thereunder, the following elements must be
proved:
1. The accused makes, draws or issues any check to apply
to account or for value;
2. The accused knows at the time of the issuance that he
or she does not have sufficient funds in, or credit with, the
drawee bank for the payment of the check in full upon its
presentment; and
3. The check is subsequently dishonored by the drawee
bank for insufficiency of funds or credit or it would have been
dishonored for the same reason had not the drawer, without
any valid reason, ordered the bank to stop payment.[40]
For liability to attach under B.P. Blg. 22, it is not enough that
the prosecution establishes that checks were issued and that
the same were subsequently dishonored. The prosecution
must also prove that the issuer, at the time of the check’s
issuance, had knowledge that he did not have enough funds
or credit in the bank of payment thereof upon its
presentment.[41]
Since the second element involves a state of mind which is
difficult to establish, Section 2 of B.P. Blg. 22 created a prima
facie presumption of such knowledge, as follows:
SEC. 2. Evidence of knowledge of insufficient funds. – The
making, drawing and issuance of a check payment of which is
refused by the drawee because of insufficient funds in or
credit with such bank, when presented within ninety (90)
days from the date of the check, shall be prima facie
evidence of knowledge of such insufficiency of funds or credit
unless such maker or drawer pays the holder thereof the
amount due thereon, or makes arrangements for payment in
full by the drawee of such check within five (5) banking days
after receiving notice that such check has not been paid by
the drawee.
Based on this section, the presumption that the issuer had
knowledge of the insufficiency of funds is brought into
existence only after it is proved that the issuer had received a
notice of dishonor and that within five days from receipt
thereof, he failed to pay the amount of the check or to make
arrangement for its payment.[42] The presumption or prima
facie evidence as provided in this section cannot arise, if such
notice of non-payment by the drawee bank is not sent to the
maker or drawer, or if there is no proof as to when such
37
notice was received by the drawer, since there would simply
be no way of reckoning the crucial 5-day period.[43]
In this case, it is not disputed that checks were issued by
petitioner and said checks were subsequently dishonored.
The question however is, was petitioner furnished a notice of
dishonor? If not, is it sufficient justification to exonerate
petitioner from her criminal and civil liabilities for issuing the
bouncing checks?
The trial court ruled that the second element is present
because:
… the accused knew at the time of issuance of the checks
that she did not have sufficient funds in or credit with her
drawee bank for the payment of the checks in full upon their
presentment [as] admitted by her in the Counter-Affidavit
she executed during the preliminary investigation of these
criminal cases (itals. ours), to wit:
4. That the time of the issuance of the said checks, due
notice and information had been so given to Solid Gold anent
the actual status of the checks that the same might not be
able to cover the amount of the said checks so stated therein
… (Exhibit “N”, “1”, underscoring supplied).
This fact became evident again during the cross-examination
by the accused’s counsel of the prosecution’s witness,
Joaquin Novales III:
ATTY. TAGANAS:
Q: And the reason you agreed to the terms and conditions
for the issuance of post-dated checks because you are also
aware the particular time the accused Mrs. Elvira Yu Oh did
not also have enough funds or money in the bank within
which to cover the amount of the checks?
A: I am not aware, sir.
...
Q: To your knowledge when the accused had already
admitted to you that she had not enough money to pay you?

A: That is the terms and promise and agreed upon, sir.
Q: But inspite of the fact that she already told you about
that, that you never suspected that she did not have enough
money to cover the checks agreed upon and issued to you?
A: Yes, sir.
Q: And inspite of the fact she told you you never suspected
that she did not have enough money to cover you . . .
Q: You still believe that although she does not have enough
money she still issued checks to you?
A: Yes, sir. (TSN, April 6, 1993, pp. 24-26)
At any rate, there is already prima facie evidence of
knowledge of insufficiency of funds on the part of the
accused from her failure to pay the amount due on the
checks or to make arrangements for payment in full by the
drawee bank within five banking days after she received
notice of their dishonor, each of the checks having been
presented within ninety days from their respective dated
(B.P. Blg. 22, Sec. 2). The defense did not controvert this
evidence. (itals. ours)[44]
Although the trial court in its decision, mentioned that herein
petitioner received notices of dishonor, nowhere in the
records is there proof that the prosecution ever presented
evidence that petitioner received or was furnished a notice of
dishonor. The notices of dishonor that were presented in
court and marked as Exhibits “D-2”, “E-2”, “F-2”, “G-2”, “H-
2”, “I-2”, “J-2”, “K-2”, “L-2”, “C-2”[45] were all sent to the
private complainant, Solid Gold, and not to petitioner. In
convicting petitioner, the trial court, gave probative weight
on the admission of petitioner in her Counter-Affidavit which
she submitted during the preliminary investigation that at
the time of issuance of the subject checks, she was aware
and even told private complainant that the checks might not
be able to cover the amount stated therein.
The Court of Appeals sustained the RTC, to wit:
. . . Neither can We agree that accused-appellant was still
entitled to notice of dishonor of the bouncing checks as she
had no more checking account with the drawee bank at the
time of the dishonor of the ten checks in question. Accused-
appellant must have realized that by closing her checking
account after issuing the ten postdated checks, all of said
checks would bounce. Knowing that she had already closed
her checking account with the drawee bank, certainly
accused-appellant would not have expected, even in her
wildest imagination, that her postdated checks would be
honored by the drawee bank. Thus, accused-appellant need
not be notified anymore of the obvious dishonor of her
rubber checks. (itals. ours)[46]
Based on the law and existing jurisprudence, we find that the
appellate court erred in convicting petitioner.
In cases for violation of B.P. Blg. 22, it is necessary that the
prosecution prove that the issuer had received a notice of
dishonor. Since service of notice is an issue, the person
alleging that the notice was served must prove the fact of
service. Basic also is the doctrine that in criminal cases, the
quantum of proof required is proof beyond reasonable
doubt. Hence, for cases of B.P. Blg. 22 there should be clear
proof of notice.[47]
Indeed, this requirement cannot be taken lightly because
Section 2 provides for an opportunity for the drawer to effect
full payment of the amount appearing on the check, within
five banking days from notice of dishonor. The absence of
said notice therefore deprives an accused of an opportunity
to preclude criminal prosecution. In other words, procedural
due process demands that a notice of dishonor be actually
served on petitioner. In the case at bar, appellant has a right
to demand – and the basic postulate of fairness requires –
that the notice of dishonor be actually sent to and received
by her to afford her to opportunity to aver prosecution under
B.P. Blg. 22.[48]
The Solicitor General contends that notice of dishonor is
dispensable in this case considering that the cause of the
dishonor of the checks was “Account Closed” and therefore,
petitioner already knew that the checks will bounce anyway.
This argument has no merit. The Court has decided
numerous cases where checks were dishonored for the
reason, “Account Closed”[49] and we have explicitly held in
said cases that “it is essential for the maker or drawer to be
notified of the dishonor of her check, so she could pay the
38
value thereof or make arrangements for its payment within
the period prescribed by law”[50] and omission or neglect on
the part of the prosecution to prove that the accused
received such notice of dishonor is fatal to its cause.[51]
A perusal of the testimony of the prosecution witness
Joaquin Novales III, General Manager of complainant Solid
Gold, discloses that no personal demands were made on
appellant before the filing of the complaints against her.[52]
Thus, absent a clear showing that petitioner actually knew of
the dishonor of her checks and was given the opportunity to
make arrangements for payment as provided for under the
law, we cannot with moral certainty convict her of violation
of B.P. Blg. 22. The failure of the prosecution to prove that
petitioner was given the requisite notice of dishonor is a clear
ground for her acquittal.[53]
Moreover, as understood by the trial court itself in the herein
aforequoted portion of its decision, General Manager
Novales knew of the non-availability of sufficient funds when
appellant issued the subject checks to him. This Court has
held that there is no violation of B.P. 22 if complainant was
told by the drawer that he has no sufficient funds in the
bank.[54]
For these reasons, we reverse the ruling of the Court of
Appeals affirming the trial court’s conviction of petitioner for
violation of B.P. Blg. 22. This is without prejudice, however,
to her civil liability towards private complainant Solid Gold in
the amount of P500,000.00 plus interest thereon at the rate
of 12% per annum from date of finality of herein
judgment.[55]
WHEREFORE, the assailed Decision and Resolution of the
Court of Appeals are hereby REVERSED and SET ASIDE.
Petitioner Elvira Yu Oh is ACQUITTED of the offense of
violation of B.P. Blg. 22 on ten counts for insufficiency of
evidence. However, she is ordered to pay complainant Solid
Gold International Traders, Inc. the total amount of Five
Hundred Thousand Pesos (P500,000.00) with 12% interest
per annum from date of finality of herein judgment.
SO ORDERED.
G.R. No. L-63318 August 18, 1984

PHILIPPINE CONSUMERS FOUNDATION, INC., petitioner,
vs.
NATIONAL TELECOMMUNICATIONS COMMISSION and
PHILIPPINE LONG DISTANCE TELEPHONE CO., respondents.
Tomas C. Llamas for petitioners.
The Solicitor General for respondent NTC.
Eliseo Alampay, Jr., Graciano C. Regala and Augusto San
Pedro for private respondents.
RESOLUTION
MAKASIAR, J.:
I within 10 days from notice on the aforesaid supplemental
On March 2, 1983, petitioner filed the instant petition
praying, among others, that the decision of respondent NTC
dated November 22, 1982 and the order dated January 14,
1983 be annulled and set aside on the grounds therein stated
(pp. 2-19, rec.).
After the petitioner, the private respondent, and the Solicitor
General for public respondent NTC filed their respective
comments and memoranda (pp. 47-53, 96-106, 109-116,
127-142, 147-164, 206-221, rec.), on November 25, 1983, the
decision sought to be reconsidered was promulgated,
annulling and setting aside the challenged decision and
order, respectively dated November 22, 1982 and January 14,
1983 (pp. 225-232, rec.).
Said decision is not unanimous as it bears the concurrence of
only 9 members of this Court, while 3 members took no part
and 1 member reserved his vote (p 232, rec.)
In a resolution dated January 10, 1984 and released on
January 17, 1984, the Court granted respondent PLDT's
motion for 15-day extension from the expiration of the
reglementary period within which to file a motion for
reconsideration (pp. 233, 236, rec.).
On January 12, 1984, PLDT filed its motion for
reconsideration (pp. 237-268, rec.).
On February 27, 1984, respondent PLDT filed a motion to
admit attached supplemental motion for reconsideration (pp.
281-301, rec.).
On February 27, 1984, public respondent NTC, thru the
Solicitor General, filed a manifestation and motion that it is
joining core, respondent PLDT in its motion for
reconsideration thereby adopting the same as its own (pp.
302-303, 305-306, rec.).
In a resolution dated March 1, 1984 and issued on March 2,
1984, the Court admitted the supplemental motion for
reconsideration of PLDT, noted the manifestation and motion
of the Solicitor General for and in behalf of respondent NTC
that it is joining the motion for reconsideration of PLDT and
adopting it as its own, and required petitioner to convenient
motion for reconsideration of PLDT (p. 304-A, rec.).
On March 28, 1984, petitioner filed its comment on
respondent's motion for reconsideration (pp. 310-317, rec.).
In a resolution dated April 3, 1984 and issued on April 11,
1984, the Court denied the motion for reconsideration (p.
318A, rec.).
On April 6, 1984, respondent PLDT filed a motion to strike
out "discussion (e)" in petitioner's "comment on
respondents' motions" dated March 20, 1984 (pp. 319-321,
rec.).
In a resolution dated April 12, 1984 and issued on April 16,
1984, the Court required petitioner's counsel Atty. Tomas
Llamas to comment within 10 days from notice on the
aforesaid motion to strike out (p. 323, rec.).
On April 17, 1984, respondent PLDT, thru counsel, filed a
motion for leave to file within 15 days from date a second
motion for reconsideration (pp. 324-326, rec.).
39
On April 27, 1984, petitioner filed an opposition to the
aforesaid motion of PLDT for leave to file within 15 days to
file a second motion for reconsideration (pp. 328-330, rec.).
On May 2, 1984, private respondent PLDT filed a second
motion for reconsideration with an annex (pp. 332-344, rec.).
In a resolution dated May 8, 1984 but issued on May 11,
1984, the Court granted the motion of PLDT to file a second
motion for reconsideration within 15 days from April 16,
1984, noted the opposition of petitioner to said motion, and
required petitioner to comment within 15 days from notice
on the aforesaid second motion for reconsideration of PLDT
for the reconsideration of the decision of November 25, 1983
(p. 345, rec.).
On May 4, 1984, petitioner filed its comment on the second
motion for reconsideration of private respondent (pp. 346-
350, rec.).
In a resolution dated May 10, 1984 and issued on May 16,
1984, the Court required respondents to file a reply within 10
days from notice on the aforesaid comment of petitioner on
private respondent PLDT's motion praying that the discussion
(par. 3) in petitioner's comment on the first motion for
reconsideration and the supplemental motion for
reconsideration be deleted (p. 352, rec.).
On May 21, 1984, public respondent NTC filed a
manifestation joining private respondent PLDT and adopting
the latter's second motion for reconsideration (pp. 353-354,
rec.), which the Court granted in a resolution dated May 29,
1984 and issued on June 6, 1984 (p. 355-A).
On May 28,1984, respondent PLDT filed a motion for
extension of 10 days or until June 7, 1984 within which to
submit the required reply in the resolution of May 10, 1984
and issued on May 16, 1984 (pp. 356-357, rec.), which was
granted in a resolution dated June 5, 1984 and issued on July
3, 1984 (p. 357-A, rec.).
On June 1, 1984, petitioner filed its comment on PLDT's
second motion for reconsideration, with a motion to declare
final the decision with respect to public respondent NTC (pp.
358362, rec.).

A day before June 1, 1984, or on May 31, 1984, private
respondent PLDT filed its reply to petitioner's "comment on
motion of private respondent" dated May 4, 1984 [motion to
strike] (pp. 366-369, rec.).
On July 16, 1984, after its motions for extension were
granted, public respondent NTC thru the Solicitor General,
finally filed its reply (pp. 370-371, 372-A, 373, 375-381, rec.).
It should be emphasized that the resolution of this Court
dated April 3, 1984 but issued on April 11, 1984, denying the
first motion for reconsideration did not state that the denial is
final (see p. 318-A, rec.).
And the motion of May 29, 1984 but filed on June 1, 1984 of
petitioner to declare as final the decision of November 25,
1983 (which motion was included in plaintiff's comment on
PLDT's second motion for reconsideration) with respect to
public respondent NTC (pp. 361-362, rec.), was not acted
upon by this Court, ostensibly because as early as May 21,
1984, public respondent NTC, thru the Solicitor General, filed
a manifestation that it is joining private respondent PLDT in
its second motion for reconsideration dated May 18, 1984
and adopting it as its own (pp. 353-354, rec.).
II
It is not disputed — and should be emphasized that on
August 31, 1982, this Court set aside the NTC order dated
April 14, 1982 in the case of Samuel Bautista vs. NTC, et al.
(16 SCRA 411) provisionally approving the revised schedule of
rates for the Subscriber Investments Plan, on the ground that
there was necessity of a hearing by the Commission before it
could have acted on the PLDT application for said revised
schedule, to give opportunity to the public, especially herein
petitioner and the Solicitor General to substantiate their
objections to the said schedule as excessive and
unreasonable, especially for the low-income and middle-
income groups, which cannot afford telephone connections
and that there is no need to increase the rate because PLDT
is financially sound.
Thereafter, in NTC Case No. 82-87 entitled "Re Philippine
Long Distance Telephone Co. respondent NTC conducted
several hearings on PLDT's revised Subscriber Investments
Plan schedule at which written oppositions were filed by
herein petitioner PCFI, the Solicitor General, Atty. Samuel
Bautista, Flora Alabanza, the municipality of Marikina, and
the Integrated Telecommunications Suppliers' Association of
the Philippines (ITESAP). Other oppositors failed to file their
written oppositions. The hearings on the merits actually
started on August 4, 1982 and continued for four (4)
subsequent dates.
The oppositors, thru counsel, thoroughly cross-examined the
witness for the applicant, Mr. Romeo Sisteban applicant's
Vice-President for Budget and Financial Planning.
None of the oppositors opted to present evidence but merely
filed Memoranda and thereafter manifested that the case is
submitted for decision Because PLDT made some concessions
in favor of the oppositors, oppositors ITESAP, Eastern
Telecommunications, Inc., Philippine Global Communications,
Inc. (Philcom), Globe-Mackay Cable and Radio Corporation
(GMCR) withdrew their opposition and manifested that they
are no longer opposing the application after which
respondent NTC issued the challenged decision of November
22, 1982.
Respondent NTC rendered the challenged decision dated
November 22, 1982, approving the revised schedule on the
ground that the rates are within the 50% of cost limit
provided in P.D. No. 217, that they are just and reasonable
and in consonance with the public policies declared in said
decree, and that such approval is in the public interest (see
NTC decision of Nov. 22, 1982, pp. 2-19, rec.).
It is undisputed therefore that petitioner and the other
oppositors were accorded due process.
From said decision dated November 22, 1982, petitioner filed
the instant petition.
III
The decision promulgated on November 25, 1983 interprets
the rule-making authority delegated in Section 2 of P.D. No.
217 to the then Department of Public Works, Transportation
and Communications as mandatory, which construction is
not supported by the actual phraseology of said Section 2,
which reads thus:
40
The Department of Public Works, Transportation and
Communications, through its Board of Communications
and/or appropriate agency shall see to it that the herein
declared policies for the telephone industry are immediately
implemented and for this purpose, pertinent rules and
regulations may be promulgated (emphasis supplied).
The basic canon of statutory interpretation is that the word
used in the law must be given its ordinary meaning, unless a
contrary intent is manifest from the law itself. Hence, the
phrase "may be promulgated" should not be construed to
mean "shall" or "must". It shall be interpreted in its ordinary
sense as permissive or discretionary on the part of the
delegate — department or the Board 6f Communications
then, now the National Telecommunications Commission —
whether or not to promulgate pertinent rules and
regulations. There is nothing in P.D. No. 217 which
commands that the phrase "may be promulgated" should be
construed as "shall be promulgated." The National
Telecommunications Commission can function and has
functioned without additional rules, aside from the existing
Public Service Law, as amended, and the existing rules
already issued by the Public Service Commission, as well as
the 1978 rules issued by the Board of Communications, the
immediate predecessor of respondent NTC. It should be
recalled that the PLDT petition for approval of its revised SIP
schedule was filed on March 20,1980.
P.D. No. 217 does not make the rules and regulations to be
promulgated by the respondent NTC as essential to the
exercise of its jurisdiction over applications for SIP schedules.
In Ang Tibay vs. CIR (69 Phil. 635), this Court, through Mr.
Justice Jose P. Laurel, did not include the promulgation of
rules and regulations as among the seven (7) requirements of
due process in quasi-judicial proceedings before a quasi-
judicial body such as the respondent NTC.
What is patently mandatory on the ministry or National
Telecommunications Commission is the immediate
implementation of the policies declared in P.D. No. 217. To
repeat, the ministry or the NTC "shall see to it that the herein
declared policies for the telephone industry are immediately
implemented ..." The formulation of rules and regulations is
purely discretionary on the part of the delegate.

Both words "shall and "may be" are employed in the lone
sentence of Section 2 of P.D. No. 217. This graphically
demonstrates that P.D. No. 217 preserves the distinction
between their ordinary, usual or nominal senses.
This is emphasized by the fact that under Section 3 of P.D.
No. 217, only "the pertinent provisions" of the Public Service
Act, as amended, which are in conflict with the provisions of
P.D. No. 217, had been repealed or modified by said P.D. No.
217.
Section 3 of P.D. No. 217 states:
The pertinent provisions of the Public Service Act, as
amended, the franchise of the Philippine Long Distance
Telephone Company under Act 3436, as amended, all existing
legislative and/or municipal franchises and other laws,
executive orders, proclamations, rules and regulations or
parts thereof, as are in conflict with the provisions of this
Decree are hereby repealed or modified accordingly.
And under the Public Service Act, as amended (C.A. No. 146),
the board of Communications then, now the NTC, can fix a
provisional amount for the subscriber's investment to be
effective immediately, without hearing (par. 3 of Sec. 16, C.A.
146, as amended).
Section 16 (c) of C.A. No. 146, as amended, provides:
(c) To fix and determine individual or joint rates, toll charges,
classifications, or schedules thereof, as well as
communication, mileage, kilometrage, and oilier special rates
which shall be imposed, observed, and followed thereafter
by any public service: Provided That the Commission may, in
its discretion approve rates proposed by public services
provisionally and without necessity of any hearing, but it shall
call a hearing thereon within thirty days thereafter, upon
publication and notice to the concerns operating in the
territory affects Provided further, That in case the public
service equipment of an operator is used principally or
secondarily for the promotion of a private business, the net
profits of said private business shall be considered in relation
with the public service of such operator for the purpose of
fixing the rates.
The Rules of Practice and Procedures promulgated on
January 25, 1978 by the Board of Communications, the
immediate predecessor of respondent NTC, pursuant to
Section 11 of the Public Service Act, otherwise known as
Commonwealth Act No. 146, as amended, govern the rules of
practice and procedure before the BOC then, now
respondent NTC. Section 2 of said Rules defines their scope,
including exempting parties from the application of the rules
in the interest of justice and to best serve the public interest,
and the NTC may apply such suitable procedure to improve
the service in the transaction of public service. Thus, Section
2 of Rule 1 of said Rules reads:
Sec. 2. Scope. — These rules govern pleadings, practice and
procedure before the Board of Communications in all
matters of hearing, investigation and proceedings within the
jurisdiction of the Board. However, in the broader interest of
justice and in order to best serve the public interest, the
Board may, in any particular matter, except it from these
rules and apply such suitable procedure to improve the
service in the transaction of the public business.
Sections 4 and 5 of Rule 2 of said rules insure the appearance
of the Solicitor General and other consumers or users. The
notice of hearing is required to be published and to be served
on the affected parties by Section 2 of Rule 8; while Section I
of Rule 9 allows the filing of written oppositions to the
application Under Section 3 of Rule 15, the BOC then, now
the NTC, may grant, on motion of the applicant or on its own
initiative, provisional relief based on the pleading, supporting
affidavits and other documents attached thereto, without
prejudice to a final decision after completion of the hearing
which shall be caged within thirty (30) days from the grant of
the provisional relief.
Finally, Section 1 of Rule 19 provides for the suppletory
application of the Rules of Court governing proceedings
before the Court of First Instance then, now the Regional
Trial Courts, which are not inconsistent with the rules of
practice and procedure promulgated by the BOC on January
25, 1978.
There is nothing in P.D. No. 217 modifying, much less
repeating Section 16 (c) of the Public Service Act, as
amended.
41
It is true that P.D. No. 1874 promulgated on July 21, 1983
amending Section 2 of P.D. No. 217 expressly authorizes the
National Telecommunications Commission (now the
successor of the Board of Communications) to approve "such
amounts for subscriber investments as applied for
provisionally and without the necessity of a hearing; but shall
call a hearing thereon within thirty (30) days thereafter, upon
publication and notice to all parties affected." But such
amendment merely reiterates or confirms paragraph (c) of
Section 16 of C.A. No. 146, as amended, otherwise known as
the Public Service Law, and serves merely to clarify the
seeming ambiguity of the repealing clause in Section 3 of P.D.
No. 217 to dissipate an doubts on such power of the National
Telecommunications Commission.
The construction of the majority decision of November 25,
1983 of the word "may" to mean "shall" is too strained, if not
tortured.
IV
WE cannot subscribe to the view that the National
Telecommunications Commission should or must promulgate
"pertinent rules and regulations because the existing
substantive and procedural laws as well as the rules
promulgated by the Public Service Commission under and
pursuant to the Public Service Law, otherwise known as CA
No. 146, as amended, are more than adequate to determine
the reasonability of the amounts of investment of telephone
subscribers, the viability of the company and the other
factors that go into determining such amounts and such
viability. The existing laws and rules on rate-making are more
than sufficient for a proper determination of such amounts of
investments of individual subscribers and the profitability of
the venture.
The adequacy of the existing Public Service Law, otherwise
known as C.A. No. 146, as amended, and rules had been
demonstrated, because they have been applied in the
following cases involving PLDT:
1. PLDT vs. PSC, G.R. No. L-26762, Aug. 31, 1970, 34 SCRA
609;
2. Republic vs. PLDT, G.R. No. L-18841, Jan. 27, 1969, 26 SCRA
620;

3. PLDT vs. PSC, G.R. Nos. L-24198 & L-24207-10, Dec. 18,
1968, 26 SCRA 427;
4. Republic Telephone Co. vs. PLDT, G.R. No. L-21070; PLDT
vs. Republic Telephone Co., G.R. No. L-21075, both decided
on Sept. 23, 1968, 25 SCRA 80;
5. PLDT vs. Medina, G.R. No. L-24658, April 3, 1968, 23 SCRA
1; and
6. PLDT vs. Medina, G.R. Nos. L-24340-44, July 18, 1967, 20
SCRA 669.
As heretofore stated, as early as January 25, 1978, other
pertinent rules of practice and procedure were promulgated
by the then Board of Communications, now the respondent
National Telecommunications Commission, implementing
P.D. No, 217, in addition to the applicable provisions of the
Public Service Law, as amended, and the rules previously
issue by the Public Service Commission (Annex 2 to the
Memo of respondent PLDT filed on August 15, 1983, pp. 147-
165, rec.).
Even before 1978, respondent applied the procedure
prescribed by the Public Service Law, as amended, and the
rules previously issued by the Public Service Commission, the
NTC predecessor, in several cases involving similar
applications for SIP schedules of Filipino Telephone
Corporation (BOC Case No. 73-064; see BOC decision in said
cases dated December 5, 1974, May 11, 1978, March 15,
1977, Feb. 19, 1976 and Aug. 31, 1978 — Annexes 3, 4, 4-A,
5, pp. 166-195, rec.).
The majority opinion recognizes that for the last three years,
the PLDT had earned a yearly average net profit of over P100
million and the existing subscribers have been receiving their
corresponding quarterly dividends on their investments.
It should be stressed that Section 5 of Article XIV of the 1973
Constitution, as amended, expressly directs that "the State
shall encourage equity participation in public utilities by the
general public." As above-stated, the existing individual
subscribers of PLDT had been sharing in the net profits of the
company every quarter after the promulgation of P.D. 217 on
June 16, 1973.
The amount that is provisionally approved under the
subscriber's investment plan for PBX/PAEX trunks and for
business telephones in Metro Manila and the provinces,
whether new installations or transfers, appears to be
reasonable, including those for the leased lines or outside
local.
To lighten the burden of subscribers, investments may be
paid in installments or under some convenient arrangements
which the NTC may authorize, which is now expressly
provided for in Section 1 of P.D. 1874 amending Sec. 6 of P.D.
217.
Section 1 of P.D. 1874 directs that:
Section 1, paragraph 6 of the Presidential Decree No. 217 is
hereby amended to read as follows:
6. In any subscriber self-financing plan, the amount of
subscriber self-financing wilt in no case, exceed fifty per
centum (50%) of the amount which results from dividing the
telephone utility's gross investment in telephone plant in
service by its number of primary stations in service, both as
reported in the utility's latest audited annual report rendered
he National Telecommunications Commission; PROVIDED,
however, that the amount payable by the telephone
subscriber may be paid on installment or under such payment
arrangement as the National Telecommunications
Commission may authorize.
V It should be likewise emphasized that pursuant to the
mandate of Section 5, Article XIV of the 1973 Constitution, as
amended, the law-making authority, in issuing both P.D. Nos.
217 and 1874, established the all-important policy of making
available on regular and uninterrupted basis the telephone
service because it is
a crucial element in the conduct of business activity ... and is
essential for the smooth and efficient function of industry,
... efficient telephone service contributes directly to national
development by facilitating trade and commerce;
... the telephone industry is one of the most highly capital
intensive industries;
42
... the telephone industry has fundamentally different
financing characteristics from other utilities in that capital
requirements per telephone unit installed increase as the
number of customers serviced also increases instead of
decreasing in cost per unit as in power and water utilities;
... continued reliance on the traditional sources of capital
funds through foreign and domestic borrowing and through
public ownership of common capital stock will result in a high
cost of capital heavy cash requirements for amortization and
thus eventually in higher effective cost of telephone service to
subscribers;
... the subscribers to telephone service tend to be among the
residents of urban areas and among the relatively higher
income segment of the population;
... it is in the interest of the national economy to encourage
savings and to place these savings in productive enterprises
and
... it is the announced policies of the government to
encourage the spreading out of ownership in public utilities
(see Whereases of P.D. 217; emphasis supplied).
P.D. No. 217 further states as the basic policies of the State
concerning the telephone industry "in the interest of social,
economic and general well-being of the people ...
1. The attainment of efficient telephone service for as wide
an area as possible at the lowest reasonable cost to the
subscriber;
2. The expansion of telephone service shall be financed
through an optimal combination of domestic and foreign
sources of financing and an optimal combination of debt and
equity funds so as to minimize the aggregate cost of capital
of telephone utilities;
3. Consistent with the declared policy of the State to attain
widespread ownership of public utilities obtained from
ownership funds shall be raised from a broad base of
investors, involving as large a number of individual investors
as may be possible;
 43

4. In line with the objective of spreading ownership among a But the rising cost of materials and labor needed to improve
Party line 900
wide base of the people, the concept of telephone subscriber the PLDT service, aggravated by the devaluation of our
self-financing is hereby adopted whereby a telephone currency, all the more justify the revised SIP schedule
4. Leased line 2,500
subscriber finances part of the capital investments in approved by the respondent NTC.
telephone installations through the purchase of stocks, 5. Tie trunk or tie 2,500
whether common or preferred stock, of the telephone The approved revised SIP schedule, which appears line
company; reasonable and fair is herein reproduced:
6. Outside local 2,500
5. As part of any subscriber self-financing plan, when the REVISED SIP SCHEDULE
issuance of preferred stock is contemplated, it is required that
the subscriber be assured, in all cases of a fixed annual
R
income from his investment and that these preferred capital II. Transfers —
e
stocks be convertible into common shares, after a reasonable
v 1. PBX/PABX 1,500
period and under reasonable terms, at the option of the
i
preferred stockholder; and
s 2. Phone:
e
6. In any subscriber self-financing plan, the amount of d Single line 800
subscriber self-financing wig, in no case, exceed fifty per
centum (50%) of the cost of the installed telephone line, as S Party line 600
may be determined from time to time by the regulatory I
bodies of the State. P 3. Residential
Phone:
The same policies and objectives are substantially re-stated R
and capsulized in the three Whereases of P.D. No. 1874 a Single line 600
amending P.D. No. 217 as pointed out in the basic policies t
aforestated in P.D. No. 217 that the cost per telephone unit e Party line 500
increases in proportion to the increase in the number of s
customers served; and that foreign borrowing will impose 4. Leased line 800
heavy cash requirements for amortizations of such foreign
loans which would result in the higher effective costs of 5. Tie trunk or tie 800
telephone service to subscribers and ultimately would be a Service Category Metro Manila lineProvincial
heavy drain on our dollar reserves, which will result in our
inability to meet our other foreign commitments and mark 6. Outside local 800
the image of the Republic of the Philippines in international
trade relations. Thus, P.D. No. 217 stresses that in the I. New Installations —
interest of the national economy it is essential to encourage (pp. 34-35, rec.).
savings and to place these savings (subscriber's investments) 1. PBX/PABX Trunk P5,000 P3,000
in productive enterprises. With the dividends that will be received quarterly under the
2. Phone:
revised SIP schedule, the subscribers (whether of phone
PLDT is profitable for the subscribers-investors as shown by installations for business with or without trunk lines, as wen
Single line 3,500 2,000
its net profit and the dividends received quarterly by the as transfers of the same; or of residential phones whether
existing subscribers. single or party line as well as transfers of the same), will
Party line 2,000 1,500
recover their investments after some years and will
thereafter remain stockholders and part-owners of PLDT. All
There is no showing — not even an allegation — that the net 3. Phone:
the subscribers therefore, are assured not only of profits
profits realized by PLDT all these years have been dissipated
and not plowed back into the firm to improve its service. Single line 1,800from but also preservation
1,300 of, their investments, which are
not donations to PLDT.

There are always two sides — sometimes more — to a case
or proposition or issue. There are many cases decided by this
Court where this Court had reconsidered Its decisions and
even reversed Itself, conformably to the environmental facts
and the applicable law.
After a re-study of the facts and the law, illuminated by
mutual exchange of views the members of the Court may and
do change their minds.
To repeat, the decision of November 25, 1983 was not a
unanimous decision for it has the concurrence of only nine (9)
members of the Court, because three (3) took no part and one
(1) reserved his vote (p. 232, rec.).
WHEREFORE, THE DECISION OF NOVEMBER 25, 1983
SHOULD BE AS IT IS HEREBY RECONSIDERED AND SET ASIDE
AND THE PETTION IS HEREBY DISMISSED. NO COSTS.
SO ORDERED.
[G.R. No. 102858. July 28, 1997]
THE DIRECTOR OF LANDS, petitioner, vs. COURT OF
APPEALS and TEODORO ABISTADO, substituted by
MARGARITA, MARISSA, MARIBEL, ARNOLD and MARY ANN,
all surnamed ABISTADO, respondents.
DECISION
PANGANIBAN, J.:
Is newspaper publication of the notice of initial hearing in an
original land registration case mandatory or directory?
Statement of the Case
The Court of Appeals ruled that it was merely procedural and
that the failure to cause such publication did not deprive the
trial court of its authority to grant the application. But the
Solicitor General disagreed and thus filed this petition to set
aside the Decision[1] promulgated on July 3, 1991 and the
subsequent Resolution[2] promulgated on November 19,
1991 by Respondent Court of Appeals[3] in CA-G.R. CV No.
23719. The dispositive portion of the challenged Decision
reads:[4]
"WHEREFORE, premises considered, the judgment of
dismissal appealed from is hereby set aside, and a new one
entered confirming the registration and title of applicant,
Teodoro Abistado, Filipino, a resident of Barangay 7,
Poblacion Mamburao, Occidental Mindoro, now deceased
and substituted by Margarita, Marissa, Maribel, Arnold and
Mary Ann, all surnamed Abistado, represented by their aunt,
Miss Josefa Abistado, Filipinos, residents of Poblacion
Mamburao, Occidental Mindoro, to the parcel of land
covered under MSI (IV-A-8) 315-D located in Poblacion
Mamburao, Occidental Mindoro.
The oppositions filed by the Republic of the Philippines and
private oppositor are hereby dismissed for want of evidence.
Upon the finality of this decision and payment of the
corresponding taxes due on this land, let an order for the
issuance of a decree be issued."
The Facts
On December 8, 1986, Private Respondent Teodoro Abistado
filed a petition for original registration of his title over 648
square meters of land under Presidential Decree (PD) No.
1529.[5] The application was docketed as Land Registration
Case (LRC) No. 86 and assigned to Branch 44 of the Regional
Trial Court of Mamburao, Occidental Mindoro.[6] However,
during the pendency of his petition, applicant died. Hence,
his heirs -- Margarita, Marissa, Maribel, Arnold and Mary
Ann, all surnamed Abistado -- represented by their aunt
Josefa Abistado, who was appointed their guardian ad litem,
were substituted as applicants.
The land registration court in its decision dated June 13, 1989
dismissed the petition “for want of jurisdiction.” However, it
found that the applicants through their predecessors-in-
interest had been in open, continuous, exclusive and
peaceful possession of the subject land since 1938.
In dismissing the petition, the trial court reasoned:[7]
44
"x x x. However, the Court noted that applicants failed to
comply with the provisions of Section 23 (1) of PD 1529,
requiring the Applicants to publish the notice of Initial
Hearing (Exh. `E') in a newspaper of general circulation in the
Philippines. Exhibit `E' was only published in the Official
Gazette (Exhibits `F' and `G'). Consequently, the Court is of
the well considered view that it has not legally acquired
jurisdiction over the instant application for want of
compliance with the mandatory provision requiring
publication of the notice of initial hearing in a newspaper of
general circulation."
The trial court also cited Ministry of Justice Opinion No. 48,
Series of 1982, which in its pertinent portion provides:[8]
“It bears emphasis that the publication requirement under
Section 23 [of PD 1529] has a two-fold purpose; the first,
which is mentioned in the provision of the aforequoted
provision refers to publication in the Official Gazette, and is
jurisdictional; while the second, which is mentioned in the
opening clause of the same paragraph, refers to publication
not only in the Official Gazette but also in a newspaper of
general circulation, and is procedural. Neither one nor the
other is dispensable. As to the first, publication in the Official
Gazette is indispensably necessary because without it, the
court would be powerless to assume jurisdiction over a
particular land registration case. As to the second,
publication of the notice of initial hearing also in a
newspaper of general circulation is indispensably necessary
as a requirement of procedural due process; otherwise, any
decision that the court may promulgate in the case would be
legally infirm.”
Unsatisfied, private respondents appealed to Respondent
Court of Appeals which, as earlier explained, set aside the
decision of the trial court and ordered the registration of the
title in the name of Teodoro Abistado.
The subsequent motion for reconsideration was denied in
the challenged CA Resolution dated November 19, 1991.
The Director of Lands represented by the Solicitor General
thus elevated this recourse to us. This Court notes that the
petitioner’s counsel anchored his petition on Rule 65. This is
an error. His remedy should be based on Rule 45 because he
is appealing a final disposition of the Court of Appeals.

Hence, we shall treat his petition as one for review under
Rule 45, and not for certiorari under Rule 65.[9]
The Issue
Petitioner alleges that Respondent Court of Appeals
committed “grave abuse of discretion”[10] in holding–
“x x x that publication of the petition for registration of title
in LRC Case No. 86 need not be published in a newspaper of
general circulation, and in not dismissing LRC Case No. 86 for
want of such publication.”
Petitioner points out that under Section 23 of PD 1529, the
notice of initial hearing shall be “published both in the
Official Gazette and in a newspaper of general circulation.”
According to petitioner, publication in the Official Gazette is
“necessary to confer jurisdiction upon the trial court, and xxx
in xxx a newspaper of general circulation to comply with the
notice requirement of due process.”[11]
Private respondents, on the other hand, contend that failure
to comply with the requirement of publication in a
newspaper of general circulation is a mere “procedural
defect.” They add that publication in the Official Gazette is
sufficient to confer jurisdiction.[12]
In reversing the decision of the trial court, Respondent Court
of Appeals ruled:[13]
“x x x although the requirement of publication in the Official
Gazette and in a newspaper of general circulation is couched
in mandatory terms, it cannot be gainsaid that the law also
mandates with equal force that publication in the Official
Gazette shall be sufficient to confer jurisdiction upon the
court.”
Further, Respondent Court found that the oppositors were
afforded the opportunity “to explain matters fully and
present their side.” Thus, it justified its disposition in this
wise:[14]
“x x x We do not see how the lack of compliance with the
required procedure prejudiced them in any way. Moreover,
the other requirements of: publication in the Official Gazette,
personal notice by mailing, and posting at the site and other
conspicuous places, were complied with and these are
sufficient to notify any party who is minded to make any
objection of the application for registration.”
The Court’s Ruling
We find for petitioner.
Newspaper Publication Mandatory
The pertinent part of Section 23 of Presidential Decree No.
1529 requiring publication of the notice of initial hearing
reads as follows:
“Sec. 23. Notice of initial hearing, publication, etc. -- The
court shall, within five days from filing of the application,
issue an order setting the date and hour of the initial hearing
which shall not be earlier than forty-five days nor later than
ninety days from the date of the order.
The public shall be given notice of initial hearing of the
application for land registration by means of (1) publication;
(2) mailing; and (3) posting.
1. By publication. --
Upon receipt of the order of the court setting the time for
initial hearing, the Commissioner of Land Registration shall
cause a notice of initial hearing to be published once in the
Official Gazette and once in a newspaper of general
circulation in the Philippines: Provided, however, that the
publication in the Official Gazette shall be sufficient to confer
jurisdiction upon the court. Said notice shall be addressed to
all persons appearing to have an interest in the land involved
including the adjoining owners so far as known, and `to all
whom it may concern.' Said notice shall also require all
persons concerned to appear in court at a certain date and
time to show cause why the prayer of said application shall
not be granted.
xxx xxx xxx”
Admittedly, the above provision provides in clear and
categorical terms that publication in the Official Gazette
45
suffices to confer jurisdiction upon the land registration
court. However, the question boils down to whether, absent
any publication in a newspaper of general circulation, the
land registration court can validly confirm and register the
title of private respondents.
We answer this query in the negative. This answer is
impelled by the demands of statutory construction and the
due process rationale behind the publication requirement.
The law used the term “shall” in prescribing the work to be
done by the Commissioner of Land Registration upon the
latter’s receipt of the court order setting the time for initial
hearing. The said word denotes an imperative and thus
indicates the mandatory character of a statute.[15] While
concededly such literal mandate is not an absolute rule in
statutory construction, as its import ultimately depends upon
its context in the entire provision, we hold that in the present
case the term must be understood in its normal mandatory
meaning. In Republic vs. Marasigan,[16] the Court through
Mr. Justice Hilario G. Davide, Jr. held that Section 23 of PD
1529 requires notice of the initial hearing by means of (1)
publication, (2) mailing and (3) posting, all of which must be
complied with. “If the intention of the law were otherwise,
said section would not have stressed in detail the
requirements of mailing of notices to all persons named in
the petition who, per Section 15 of the Decree, include
owners of adjoining properties, and occupants of the land.”
Indeed, if mailing of notices is essential, then by parity of
reasoning, publication in a newspaper of general circulation
is likewise imperative since the law included such
requirement in its detailed provision.
It should be noted further that land registration is a
proceeding in rem.[17] Being in rem, such proceeding
requires constructive seizure of the land as against all
persons, including the state, who have rights to or interests
in the property. An in rem proceeding is validated essentially
through publication. This being so, the process must strictly
be complied with. Otherwise, persons who may be
interested or whose rights may be adversely affected would
be barred from contesting an application which they had no
knowledge of. As has been ruled, a party as an owner
seeking the inscription of realty in the land registration court
must prove by satisfactory and conclusive evidence not only
his ownership thereof but the identity of the same, for he is
in the same situation as one who institutes an action for

recovery of realty.[18] He must prove his title against the
whole world. This task, which rests upon the applicant, can
best be achieved when all persons concerned -- nay, “the
whole world” -- who have rights to or interests in the subject
property are notified and effectively invited to come to court
and show cause why the application should not be granted.
The elementary norms of due process require that before the
claimed property is taken from concerned parties and
registered in the name of the applicant, said parties must be
given notice and opportunity to oppose.
It may be asked why publication in a newspaper of general
circulation should be deemed mandatory when the law
already requires notice by publication in the Official Gazette
as well as by mailing and posting, all of which have already
been complied with in the case at hand. The reason is due
process and the reality that the Official Gazette is not as
widely read and circulated as newspapers and is oftentimes
delayed in its circulation, such that the notices published
therein may not reach the interested parties on time, if at all.
Additionally, such parties may not be owners of neighboring
properties, and may in fact not own any other real estate. In
sum, the all-encompassing in rem nature of land registration
cases, the consequences of default orders issued against the
whole world and the objective of disseminating the notice in
as wide a manner as possible demand a mandatory
construction of the requirements for publication, mailing and
posting.
Admittedly, there was failure to comply with the explicit
publication requirement of the law. Private respondents did
not proffer any excuse; even if they had, it would not have
mattered because the statute itself allows no excuses.
Ineludibly, this Court has no authority to dispense with such
mandatory requirement. The law is unambiguous and its
rationale clear. Time and again, this Court has declared that
where the law speaks in clear and categorical language, there
is no room for interpretation, vacillation or equivocation;
there is room only for application.[19] There is no alternative.
Thus, the application for land registration filed by private
respondents must be dismissed without prejudice to
reapplication in the future, after all the legal requisites shall
have been duly complied with.
WHEREFORE, the petition is GRANTED and the assailed
Decision and Resolution are REVERSED and SET ASIDE. The
46
application of private respondent for land registration is In said resolution, the Board adopted guidelines for the
DISMISSED without prejudice. No costs. implementation of the Continuing Professional Education
(CPE) Program for electrical engineers. Included therein is a
SO ORDERED. requirement that beginning January 1, 1988, every electrical
engineer must earn credit units of CPE before his license
could be renewed. To earn credit units, he must first apply
G.R. No. 87134 January 20, 2000
for accreditation with the Institute of Integrated Electrical
Engineers of the Philippines (IIEE).
PHILIPPINE REGISTERED ELECTRICAL PRACTITIONERS, INC.
(PREPI), represented by BEN ROSETE, HERMINIO S.
Petitioner assailed before the trial court the resolution as
RAMIREZ, CASIANO PAULINO, NONATO VILLANUEVA, JR.,
violate of the Constitution's equal protection and due
RENATO AME, MARIO BLAS, SAMUEL BRAVO, AMOR CRUZ,
process clauses, prohibition against bills of attainder and ex
FRANCISCO DULLER, BENITO ESPAÑOL, PABLO FERNANDEZ,
post facto laws, and mandate for the protection of the rights
WILFREDO GORRICHO, GRACIANO LAPID, LUISITO
of workers.
MAGANA, FERNANDO MALABANAN, MARTIN MARTINEZ,
EDGARDO MERIDA, ARNEL PALILIO, GAUDIOSO SEURA,
Following are the relevant portions of the resolution:
ZENON TUBIO, MARIANO YAPE, AND NILO MONTALBAN,
petitioner,
vs. III. Possible Exemption to the CPE Guidelines
JULIO FRANCIA, JR., in his capacity as COMMISSIONER OF
PROFESSIONAL REGULATION COMMISSION, MEDERICO T. A. An electrical engineering practitioner who has reached the
CORTEZ, in his capacity as CHAIRMAN OF THE BOARD OF age at 60.
ELECTRICAL ENGINEERING, and HONORABLE REBECCA
SALVADOR, JUDGE OF THE REGIONAL TRIAL COURT OF
B. A top government official of at least Vice-President or
MANILA, BRANCH 1, respondents.
Bureau Director level, or equivalent ranking position in
private sector.
RESOLUTION
C. A practitioner undergoing post-doctoral studies during his
QUISUMBING, J.: current registration period.
For review on certiorari is the decision of the Regional Trial D. Those recommended by the PRC or by [the] Board of
Court, Manila, Branch 1, which dismissed PREPI's petition for Electrical Engineering.
declaratory relief and/or prohibition, for lack of merit.
IV. Method of Evaluation and Credit Units
Petitioner is an organization composed of professional
electrical engineers, associate electrical engineers, assistant
A. Basic Requirements
electrical engineers, and master electricians. It is represented
in this case by several of its officers and members.
1. PRC requires that a registered Master Electrician or
Electrical Engineer [of] any grade shall renew his license once
On July 6, 1988, petitioner filed before the RTC an action for
every three (3) years.
declaratory relief and/or prohibition, assailing the
constitutional validity of Resolution No. 1, Series of 1986,
issued by the Board of Electrical Engineering, then headed by 2. As a condition Precedent to the above, he shall first secure
respondent Mederico T. Cortez. The Professional Regulation from IIEE's Continuing Professional Education Committee a
Commission, then headed by respondent Julio Francia, Jr., certificate that he has complied with PRC's requirements for
approved said resolution on February 10, 1986. Continuing Professional Education.

3. A duly registered electrical engineering practitioner should
have the following credit units for a period of three (3) years:
Registered Master Electrician 100 credit units
Registered Electrical Engineer 200 credit units (All grades).1
After hearing, the trial court dismissed petitioner's action, on
the ground that petitioner failed to establish a clear and
unequivocal violation of the Constitution or statute. It
pointed out that all reasonable doubts should be resolved in
favor of the validity of a statute.
According to the trial court, the questioned resolution is a
valid implementation of Section 3, Republic Act No. 184,2 and
Section 6, Presidential Decree No. 223.3
The dispositive portion of the RTC decision reads:
WHEREFORE, the petition for declaratory relief and/or
prohibition with prayer for injunction is hereby dismissed, for
lack of merit and the temporary restraining order issued by
this Court on July 13, 1988, is lifted and set aside. No
pronouncement as to costs.
SO ORDERED.4
In this direct appeal to the Supreme Court on pure questions
of law, petitioner now raises the following assignment of
errors:
I. THE LOWER COURT GRIEVOUSLY ERRED IN DECLARING
BOARD RESOLUTION NO. 1 SERIES OF 1986,
CONSTITUTIONAL.
II. THE LOWER COURT GRIEVOUSLY ERRED IN HOLDING THAT
THE RESPONDENTS PRC AND BEE ARE VESTED WITH POWERS
TO ADOPT AND PROMULGATE RULES SUCH AS THE
RESOLUTION IN QUESTION.
III. THE LOWER COURT GRIEVOUSLY ERRED IN FINDING THAT
BOARD RESOLUTION NO. 1 SERIES OF 1986, IS VALID, LEGAL
AND NOT TAINTED WITH GRAVE ABUSE OF DISCRETION.
IV. THE LOWER COURT GRIEVOUSLY ERRED IN FINDING THAT
THE PETITIONERS' FEAR AND APPREHENSION THAT THE CPE
PROGRAM WOULD BE BURDENSOME AND A SOURCE OF RED
TAPE IS ONLY IMAGINARY THAN REAL.5
Essentially, petitioner raises the following issues in this
petition for review: (1) whether or not the Board of Electrical
Engineering had authority to issue the resolution in question;
and, if it did, (2) whether or not the resolution issued
pursuant to that authority is constitutionally valid.
Petitioner argues that the PRC and the Board did not have
the requisite authority to issue said resolution. Citing Section
6(a) of P.D. No. 223, petitioner claims that the Board only has
visitation powers, "to see [to it] that groper compliments of
professionals are employed and given proper responsibilities
and remuneration." In other words, petitioner contends that
the Board may only conduct inspections of sites where
electrical engineering jobs are conducted, primarily to
safeguard the welfare of electrical engineers.
Petitioner contends further that implementation of the
resolution would amount to deprivation of property without
due process of law, particularly because an electrical
engineer's or electrician's license will not be renewed if he
failed to obtain any or enough units under the CPE program.
Petitioner points out that under Section 32 of R.A. No. 184,
the Board has the power to suspend licenses only upon
proper notice and hearing.
Petitioner argues that the license to practice a profession is
not a mere privilege but a property right. If it were, indeed,
only a privilege, it could not be taken away by the simple
expedient of passing a board resolution. Petitioner asserts
that such license may only be revoked after the license
holder is found guilty of the offenses specified in R.A. No. 184
or P.D. No. 223. Since failure to earn units under the CPE
program is not among those enumerated, if cannot be made
a ground for the revocation of an electrical engineer's or
electrician's license.
Petitioner also argues that the classification of persons who
may be exempt from the CPE program requirement appears
to be arbitrary. Petitioner points out that
47
. . . electrical engineers and master electricians who are in
the responsible practice of designing and constructing
electrical installations are excluded in the said exemptions
and are not given any credit or merit.6
Petitioner further contends that the questioned board
resolution does not provide any criteria for the PRC or Board
to follow in recommending exemptions to the CPE
requirement.
Petitioner also assails the resolution as violative of the equal
protection clause since only electrical engineers are subject
to the requirements mentioned therein. Members of other
professions are not similarly required.
For the respondents, the Solicitor General submits that,
contrary to petitioner's assertion, the Board had the
authority to promulgate the questioned resolution pursuant
to Section 3, R.A. No. 184 and Section 6, P.D. No. 223. The
latter law is not limited to the power of inspection and
visitation as petitioner contends. It includes the power to
formulate policies and programs as may be necessary to
improve the practice of a profession.
The Solicitor General further contends that Resolution No. 1,
Series of 1986 is not violative of the Constitution. He
dismisses as unfounded petitioner's fears regarding the
automatic revocation of license for non-compliance with the
CPE requirement. Nothing in the questioned resolution
provides for such automatic revocation, according to him;
there is, thus, no violation of the due process clause.
Neither does the resolution violate the equal protection
clause since not all electrical engineers are similarly situated,
he further argues. He claims that there are those who, by
reason of age and expertise, may reasonably be exempted
from the CPE requirement. Equal protection, he concludes,
does not require universal application of laws but only
equality among equals.
The Solicitor General likewise contends that the resolution is
not a bill of attainder since it does not seek to punish but
only to regulate the practice of a profession. Neither is it an
ex post facto law, he says, since the ex post facto principle
only applies to penal statutes and not to regulations involving
civil rights such as the practice of a profession.

In his view also, there is no violation of Article VI, Section 28
of the Constitution, which states, in its second paragraph as
follows:
(2) The Congress may, by law, authorize the President to fix
within specified limits, and subject to such limitations and
restrictions as it may impose, tariff rates, import and export
quotas, tonnage and wharfage dues, and other duties or
imposts within the framework of the national development
program of the government.
The Solicitor General opines that this provision is simply not
pertinent nor applicable in this case. For the fees that may be
charged electrical engineers in complying with the CPE
program, he argues, are not the duties or imposts referred to
in the preceding constitutional provision.
The issue before this Court boils down to (a) whether the
Board of Electrical Engineers in the light of the provisions of
R.A. No. 184, had the authority to issue the questioned
resolution; and (b) whether the resolution itself violates
certain provisions of the present Constitution.
We begin by noting that the Board issued the resolution as a
means purportedly to upgrade the knowledge and skills of
electrical engineers. Specifically, the resolution has the
following objectives:
1. To upgrade and update technical knowledge and skills of
Electrical Engineering Practitioners;
2. To effect transfer of technology from experts and
specialists to Electrical Engineering Practitioners;
3. To stimulate self-improvement, and thus enhance
practitioner's competence and self-confidence; and
4. To broaden practitioner's horizon to include awareness of
his social responsibility.7
Effectivity of the resolution has been expressly made subject
to the approval of the PRC and its publication in the Official
Gazette, as may be seen from its effectivity clause.
VI. Effectivity
These Rules shall take effect upon approval hereof by the
Commission and after fifteen (15) days following the
completion of its publication in the Official Gazette.8
We further note that Section 3, of R.A. No. 184, mandates
the Board to recommend to the PRC the adoption of
measures as may be deemed proper for the maintenance of
good ethics and standards in the practice of electrical
engineering in the Philippines. . . (Emphasis supplied.)
Moreover, Section 6(a) of P.D. No. 223 gives the various
professional boards the power
[t]o look from time to time into the conditions affecting the
practice of the profession or occupation under their
respective jurisdictions and whenever necessary, adopt such
measures as may be deemed proper for the enhancement of
the profession or occupation and/or the maintenance of high
professional, ethical and technical standards. . . (Emphasis
supplied.)
For said purposes,
the members of a Board may personally or through
subordinate employees of the Commission conduct ocular
inspection or visit industrial, mechanical, electrical or
chemical plants or works, hospitals, clinics and other
engineering works. . .
On this point, petitioner now insists that the authority of the
Board is limited to the conduct of ocular inspections. But
nothing in said provision in any way imposes such an
interpretation. The Board in fact may even do away with
ocular inspections, as can be gleaned from the use of the
word "may", implying that the conduct of ocular inspections
is merely directory and not mandatory. For sure, conducting
ocular inspections is only one way of ensuring compliance
with laws and rules relative to the professional practice of
electrical engineering. But it certainly is not the only way.
We are, therefore, constrained to concede to the Board the
existence of the power to issue the assailed resolution, in
pursuance of its mandates under R.A. 184 and P.D. 223. What
now remains is a determination of whether or not said
resolution suffers from constitutional infirmities.
48
Supervening events, however, have rendered moot this
constitutional inquiry. On July 25, 1995, President Fidel V.
Ramos issued Executive Order No. 266, entitled
"Institutionalization of the Continuing Professional Education
(CPE) Programs of the Various Professional Regulatory Boards
(PRBs) under the Supervision of the Professional Regulation
Commission (PRC)." E.O. No. 266 found it imperative to
impose upon registered professionals the completion of the
CPE as a pre-requisite for the renewal of their licenses.
Avowedly, CPE would enable the professionals
not only to upgrade or improve their technical knowledge
and skills but also to keep them abreast with modern trends
and technology in their respective professions, thereby
assuring the rendition of highly qualitative professional
service/s that will be globally competitive under the General
Agreement on Trade in Services (GATS) and at the same time
securing the safety and protection of the public.9
In fact, E.O. No. 266 provides that:
Sec. 1. The completion by professional licensees of the
Continuing Professional Education (CPE) programs adopted
by all Boards is hereby imposed as a mandatory requirement
for the renewal of professional licenses. (Emphasis supplied.)
For its part, the PRC issued Resolution No. 507, Series of
1997, 10 entitled "Standardized Guidelines and Procedures for
the Implementation of the Continuing Professional Education
(CPE) Programs for all Professions." This resolution expressly
repealed
other Resolutions, circulars or other issuances promulgated
by the PRC and Professional Regulatory Boards providing for,
or having any bearing on the implementation of the CPE
programs, activities or sources. . . 11
Thus, the assailed BEE Resolution No. 1, Series of 1986,
providing for guidelines on CPE for electrical engineers, is no
longer in effect now.
WHEREFORE, the instant petition is DENIED for being moot
and academic.1âwphi1.nêt
SO ORDERED.