Republic of the Philippines

SUPREME COURT

Manila

EN BANC

G.R. No. L-30642 April 30, 1985

PERFECTO S. FLORESCA, in his own behalf and on behalf of the minors ROMULO and NESTOR S.
FLORESCA; and ERLINDA FLORESCA-GABUYO, PEDRO S. FLORESCA, JR., CELSO S. FLORESCA, MELBA S.
FLORESCA, JUDITH S. FLORESCA and CARMEN S. FLORESCA;

LYDIA CARAMAT VDA. DE MARTINEZ in her own behalf and on behalf of her minor children LINDA,
ROMEO, ANTONIO JEAN and ELY, all surnamed Martinez; and DANIEL MARTINEZ and TOMAS MARTINEZ;

SALUSTIANA ASPIRAS VDA. DE OBRA, in her own behalf and on behalf of her minor children JOSE,
ESTELA, JULITA SALUD and DANILO, all surnamed OBRA;

LYDIA CULBENGAN VDA. DE VILLAR, in her own behalf and on behalf of her minor children EDNA,
GEORGE and LARRY III, all surnamed VILLAR;

DOLORES LOLITA ADER VDA. DE LANUZA, in her own behalf and on behalf of her minor children EDITHA,
ELIZABETH, DIVINA, RAYMUNDO, NESTOR and AURELIO, JR. all surnamed LANUZA;

EMERENCIANA JOSE VDA. DE ISLA, in her own behalf and on behalf of her minor children JOSE,
LORENZO, JR., MARIA, VENUS and FELIX, all surnamed ISLA, petitioners,

vs.

PHILEX MINING CORPORATION and HON. JESUS P. MORFE, Presiding Judge of Branch XIII, Court of First
Instance of Manila, respondents.

Rodolfo C. Pacampara for petitioners.

Tito M. Villaluna for respondents.

MAKASIAR, J.:

This is a petition to review the order of the former Court of First Instance of Manila, Branch XIII, dated
December 16, 1968 dismissing petitioners' complaint for damages on the ground of lack of jurisdiction.

Petitioners are the heirs of the deceased employees of Philex Mining Corporation (hereinafter referred
to as Philex), who, while working at its copper mines underground operations at Tuba, Benguet on June
28, 1967, died as a result of the cave-in that buried them in the tunnels of the mine. Specifically, the
complaint alleges that Philex, in violation of government rules and regulations, negligently and
deliberately failed to take the required precautions for the protection of the lives of its men working
underground. Portion of the complaint reads:

xxx xxx xxx

9. That for sometime prior and up to June 28,1967, the defendant PHILEX, with gross and reckless
negligence and imprudence and deliberate failure to take the required precautions for the due
protection of the lives of its men working underground at the time, and in utter violation of the laws and
the rules and regulations duly promulgated by the Government pursuant thereto, allowed great amount
of water and mud to accumulate in an open pit area at the mine above Block 43-S-1 which seeped
through and saturated the 600 ft. column of broken ore and rock below it, thereby exerting tremendous
pressure on the working spaces at its 4300 level, with the result that, on the said date, at about 4 o'clock
in the afternoon, with the collapse of all underground supports due to such enormous pressure,
approximately 500,000 cubic feet of broken ores rocks, mud and water, accompanied by surface
boulders, blasted through the tunnels and flowed out and filled in, in a matter of approximately five (5)
minutes, the underground workings, ripped timber supports and carried off materials, machines and
equipment which blocked all avenues of exit, thereby trapping within its tunnels of all its men above
referred to, including those named in the next preceding paragraph, represented by the plaintiffs
herein;

10. That out of the 48 mine workers who were then working at defendant PHILEX's mine on the said
date, five (5) were able to escape from the terrifying holocaust; 22 were rescued within the next 7 days;
and the rest, 21 in number, including those referred to in paragraph 7 hereinabove, were left mercilessly
to their fate, notwithstanding the fact that up to then, a great many of them were still alive, entombed
in the tunnels of the mine, but were not rescued due to defendant PHILEX's decision to abandon rescue
operations, in utter disregard of its bounden legal and moral duties in the premises;

xxx xxx xxx

13. That defendant PHILEX not only violated the law and the rules and regulations duly promulgated
by the duly constituted authorities as set out by the Special Committee above referred to, in their
Report of investigation, pages 7-13, Annex 'B' hereof, but also failed completely to provide its men
working underground the necessary security for the protection of their lives notwithstanding the fact
that it had vast financial resources, it having made, during the year 1966 alone, a total operating income
of P 38,220,254.00, or net earnings, after taxes of P19,117,394.00, as per its llth Annual Report for the
year ended December 31, 1966, and with aggregate assets totalling P 45,794,103.00 as of December 31,
1966;

xxx xxx xxx

(pp. 42-44, rec.)

A motion to dismiss dated May 14, 1968 was filed by Philex alleging that the causes of action of
petitioners based on an industrial accident are covered by the provisions of the Workmen's
Compensation Act (Act 3428, as amended by RA 772) and that the former Court of First Instance has no
jurisdiction over the case. Petitioners filed an opposition dated May 27, 1968 to the said motion to
dismiss claiming that the causes of action are not based on the provisions of the Workmen's
Compensation Act but on the provisions of the Civil Code allowing the award of actual, moral and
exemplary damages, particularly:

Art. 2176. Whoever by act or omission causes damage to another, there being fault or negligence,
is obliged to pay for the damage done. Such fault or negligence, if there is no pre- existing contractual
relation between the parties, is called a quasi-delict and is governed by the provisions of this Chapter.

Art. 2178. The provisions of articles 1172 to 1174 are also applicable to a quasi-delict.

(b) Art. 1173—The fault or negligence of the obligor consists in the omission of that diligence which
is required by the nature of the obligation and corresponds with the circumstances of the persons, of
the time and of the place. When negligence shows bad faith, the provisions of Articles 1171 and 2201,
paragraph 2 shall apply.

Art. 2201. x x x x x x x x x

In case of fraud, bad faith, malice or wanton attitude, the obligor shall be responsible for all damages
which may be reasonably attributed to the non-performance of the obligation.

Art. 2231. In quasi-delicts, exemplary damages may be granted if the defendant acted with gross
negligence.

After a reply and a rejoinder thereto were filed, respondent Judge issued an order dated June 27, 1968
dismissing the case on the ground that it falls within the exclusive jurisdiction of the Workmen's
Compensation Commission. On petitioners' motion for reconsideration of the said order, respondent
Judge, on September 23, 1968, reconsidered and set aside his order of June 27, 1968 and allowed Philex
to file an answer to the complaint. Philex moved to reconsider the aforesaid order which was opposed
by petitioners.

On December 16, 1968, respondent Judge dismissed the case for lack of jurisdiction and ruled that in
accordance with the established jurisprudence, the Workmen's Compensation Commission has exclusive
original jurisdiction over damage or compensation claims for work-connected deaths or injuries of
workmen or employees, irrespective of whether or not the employer was negligent, adding that if the
employer's negligence results in work-connected deaths or injuries, the employer shall, pursuant to
Section 4-A of the Workmen's Compensation Act, pay additional compensation equal to 50% of the
compensation fixed in the Act.

Petitioners thus filed the present petition.

In their brief, petitioners raised the following assignment of errors:

THE LOWER COURT ERRED IN DISMISSING THE PLAINTIFFS- PETITIONERS' COMPLAINT FOR LACK OF
JURISDICTION.
II

THE LOWER COURT ERRED IN FAILING TO CONSIDER THE CLEAR DISTINCTION BETWEEN CLAIMS FOR
DAMAGES UNDER THE CIVIL CODE AND CLAIMS FOR COMPENSATION UNDER THE WORKMEN'S
COMPENSATION ACT.

In the first assignment of error, petitioners argue that the lower court has jurisdiction over the cause of
action since the complaint is based on the provisions of the Civil Code on damages, particularly Articles
2176, 2178, 1173, 2201 and 2231, and not on the provisions of the Workmen's Compensation Act. They
point out that the complaint alleges gross and brazen negligence on the part of Philex in failing to take
the necessary security for the protection of the lives of its employees working underground. They also
assert that since Philex opted to file a motion to dismiss in the court a quo, the allegations in their
complaint including those contained in the annexes are deemed admitted.

In the second assignment of error, petitioners asseverate that respondent Judge failed to see the
distinction between the claims for compensation under the Workmen's Compensation Act and the
claims for damages based on gross negligence of Philex under the Civil Code. They point out that
workmen's compensation refers to liability for compensation for loss resulting from injury, disability or
death of the working man through industrial accident or disease, without regard to the fault or
negligence of the employer, while the claim for damages under the Civil Code which petitioners pursued
in the regular court, refers to the employer's liability for reckless and wanton negligence resulting in the
death of the employees and for which the regular court has jurisdiction to adjudicate the same.

On the other hand, Philex asserts that work-connected injuries are compensable exclusively under the
provisions of Sections 5 and 46 of the Workmen's Compensation Act, which read:

SEC. 5. Exclusive right to compensation.—The rights and remedies granted by this Act to an employee
by reason of a personal injury entitling him to compensation shall exclude all other rights and remedies
accruing to the employee, his personal representatives, dependents or nearest of kin against the
employer under the Civil Code and other laws because of said injury ...
SEC. 46. Jurisdiction.— The Workmen's Compensation Commissioner shall have exclusive jurisdiction to
hear and decide claims for compensation under the Workmen's Compensation Act, subject to appeal to
the Supreme Court, ...

Philex cites the case of Manalo vs. Foster Wheeler (98 Phil. 855 [1956]) where it was held that "all claims
of workmen against their employer for damages due to accident suffered in the course of employment
shall be investigated and adjudicated by the Workmen's Compensation Commission," subject to appeal
to the Supreme Court.

Philex maintains that the fact that an employer was negligent, does not remove the case from the
exclusive character of recoveries under the Workmen's Compensation Act; because Section 4-A of the
Act provides an additional compensation in case the employer fails to comply with the requirements of
safety as imposed by law to prevent accidents. In fact, it points out that Philex voluntarily paid the
compensation due the petitioners and all the payments have been accepted in behalf of the deceased
miners, except the heirs of Nazarito Floresca who insisted that they are entitled to a greater amount of
damages under the Civil Code.

In the hearing of this case, then Undersecretary of Labor Israel Bocobo, then Atty. Edgardo Angara, now
President of the University of the Philippines, Justice Manuel Lazaro, as corporate counsel and Assistant
General Manager of the GSIS Legal Affairs Department, and Commissioner on Elections, formerly UP Law
Center Director Froilan Bacungan, appeared as amici curiae and thereafter, submitted their respective
memoranda.

The issue to be resolved as WE stated in the resolution of November 26, 1976, is:

Whether the action of an injured employee or worker or that of his heirs in case of his death under the
Workmen's Compensation Act is exclusive, selective or cumulative, that is to say, whether his or his
heirs' action is exclusively restricted to seeking the limited compensation provided under the
Workmen's Compensation Act or whether they have a right of selection or choice of action between
availing of the worker's right under the Workmen's Compensation Act and suing in the regular courts
under the Civil Code for higher damages (actual, moral and/or exemplary) from the employer by virtue
of negligence (or fault) of the employer or of his other employees or whether they may avail
cumulatively of both actions, i.e., collect the limited compensation under the Workmen's Compensation
Act and sue in addition for damages in the regular courts.

There are divergent opinions in this case. Justice Lazaro is of the opinion that an injured employee or
worker, or the heirs in case of his death, may initiate a complaint to recover damages (not
compensation under the Workmen's Compensation Act) with the regular court on the basis of
negligence of an employer pursuant to the Civil Code provisions. Atty. Angara believes otherwise. He
submits that the remedy of an injured employee for work-connected injury or accident is exclusive in
accordance with Section 5 of the Workmen's Compensation Act, while Atty. Bacungan's position is that
the action is selective. He opines that the heirs of the employee in case of his death have a right of
choice to avail themselves of the benefits provided under the Workmen's Compensation Act or to sue in
the regular court under the Civil Code for higher damages from the employer by virtue of negligence of
the latter. Atty. Bocobo's stand is the same as that of Atty. Bacungan and adds that once the heirs elect
the remedy provided for under the Act, they are no longer entitled to avail themselves of the remedy
provided for under the Civil Code by filing an action for higher damages in the regular court, and vice
versa.

On August 3, 1978, petitioners-heirs of deceased employee Nazarito Floresca filed a motion to dismiss
on the ground that they have amicably settled their claim with respondent Philex. In the resolution of
September 7, 1978, WE dismissed the petition only insofar as the aforesaid petitioners are connected, it
appearing that there are other petitioners in this case.

WE hold that the former Court of First Instance has jurisdiction to try the case,

It should be underscored that petitioners' complaint is not for compensation based on the Workmen's
Compensation Act but a complaint for damages (actual, exemplary and moral) in the total amount of
eight hundred twenty-five thousand (P825,000.00) pesos. Petitioners did not invoke the provisions of
the Workmen's Compensation Act to entitle them to compensation thereunder. In fact, no allegation
appeared in the complaint that the employees died from accident arising out of and in the course of
their employments. The complaint instead alleges gross and reckless negligence and deliberate failure
on the part of Philex to protect the lives of its workers as a consequence of which a cave-in occurred
resulting in the death of the employees working underground. Settled is the rule that in ascertaining
whether or not the cause of action is in the nature of workmen's compensation claim or a claim for
damages pursuant to the provisions of the Civil Code, the test is the averments or allegations in the
complaint (Belandres vs. Lopez Sugar Mill, Co., Inc., 97 Phil. 100).

In the present case, there exists between Philex and the deceased employees a contractual relationship.
The alleged gross and reckless negligence and deliberate failure that amount to bad faith on the part of
Philex, constitute a breach of contract for which it may be held liable for damages. The provisions of the
Civil Code on cases of breach of contract when there is fraud or bad faith, read:

Art. 2232. In contracts and quasi-contracts, the court may award exemplary damages if the
defendant acted in a wanton, fraudulent, reckless, oppressive or malevolent manner.
Art. 2201. In contracts and quasi-contracts, the damages for which the obligor who acted in good faith is
able shall be those that are the natural and probable consequences of the breach of the obligation, and
which the parties have foreseen or could have reasonably foreseen at the time the obligation was
constituted.

In cases of fraud, bad faith, malice or wanton attitude, the obligor shall be responsible for all damages
which may be reasonably attributed to the non-performance of the obligation.

Furthermore, Articles 2216 et seq., Civil Code, allow the payment of all kinds of damages, as assessed by
the court.

The rationale in awarding compensation under the Workmen's Compensation Act differs from that in
giving damages under the Civil Code. The compensation acts are based on a theory of compensation
distinct from the existing theories of damages, payments under the acts being made as compensation
and not as damages (99 C.J.S. 53). Compensation is given to mitigate the harshness and insecurity of
industrial life for the workman and his family. Hence, an employer is liable whether negligence exists or
not since liability is created by law. Recovery under the Act is not based on any theory of actionable
wrong on the part of the employer (99 C.J.S. 36).

In other words, under the compensation acts, the employer is liable to pay compensation benefits for
loss of income, as long as the death, sickness or injury is work-connected or work-aggravated, even if
the death or injury is not due to the fault of the employer (Murillo vs. Mendoza, 66 Phil. 689). On the
other hand, damages are awarded to one as a vindication of the wrongful invasion of his rights. It is the
indemnity recoverable by a person who has sustained injury either in his person, property or relative
rights, through the act or default of another (25 C.J.S. 452).

The claimant for damages under the Civil Code has the burden of proving the causal relation between
the defendant's negligence and the resulting injury as well as the damages suffered. While under the
Workmen's Compensation Act, there is a presumption in favor of the deceased or injured employee that
the death or injury is work-connected or work-aggravated; and the employer has the burden to prove
otherwise (De los Angeles vs. GSIS, 94 SCRA 308; Carino vs. WCC, 93 SCRA 551; Maria Cristina Fertilizer
Corp. vs. WCC, 60 SCRA 228).

The claim of petitioners that the case is not cognizable by the Workmen's Compensation Commission
then, now Employees Compensation Commission, is strengthened by the fact that unlike in the Civil
Code, the Workmen's Compensation Act did not contain any provision for an award of actual, moral and
exemplary damages. What the Act provided was merely the right of the heirs to claim limited
compensation for the death in the amount of six thousand (P6,000.00) pesos plus burial expenses of two
hundred (P200.00) pesos, and medical expenses when incurred (Sections 8, 12 and 13, Workmen's
Compensation Act), and an additional compensation of only 50% if the complaint alleges failure on the
part of the employer to "install and maintain safety appliances or to take other precautions for the
prevention of accident or occupational disease" (Section 4-A, Ibid.). In the case at bar, the amount
sought to be recovered is over and above that which was provided under the Workmen's Compensation
Act and which cannot be granted by the Commission.

Moreover, under the Workmen's Compensation Act, compensation benefits should be paid to an
employee who suffered an accident not due to the facilities or lack of facilities in the industry of his
employer but caused by factors outside the industrial plant of his employer. Under the Civil Code, the
liability of the employer, depends on breach of contract or tort. The Workmen's Compensation Act was
specifically enacted to afford protection to the employees or workmen. It is a social legislation designed
to give relief to the workman who has been the victim of an accident causing his death or ailment or
injury in the pursuit of his employment (Abong vs. WCC, 54 SCRA 379).

WE now come to the query as to whether or not the injured employee or his heirs in case of death have
a right of selection or choice of action between availing themselves of the worker's right under the
Workmen's Compensation Act and suing in the regular courts under the Civil Code for higher damages
(actual, moral and exemplary) from the employers by virtue of that negligence or fault of the employers
or whether they may avail themselves cumulatively of both actions, i.e., collect the limited
compensation under the Workmen's Compensation Act and sue in addition for damages in the regular
courts.

In disposing of a similar issue, this Court in Pacana vs. Cebu Autobus Company, 32 SCRA 442, ruled that
an injured worker has a choice of either to recover from the employer the fixed amounts set by the
Workmen's Compensation Act or to prosecute an ordinary civil action against the tortfeasor for higher
damages but he cannot pursue both courses of action simultaneously.

In Pacaña WE said:

In the analogous case of Esguerra vs. Munoz Palma, involving the application of Section 6 of the
Workmen's Compensation Act on the injured workers' right to sue third- party tortfeasors in the regular
courts, Mr. Justice J.B.L. Reyes, again speaking for the Court, pointed out that the injured worker has the
choice of remedies but cannot pursue both courses of action simultaneously and thus balanced the
relative advantage of recourse under the Workmen's Compensation Act as against an ordinary action.

As applied to this case, petitioner Esguerra cannot maintain his action for damages against the
respondents (defendants below), because he has elected to seek compensation under the Workmen's
Compensation Law, and his claim (case No. 44549 of the Compensation Commission) was being
processed at the time he filed this action in the Court of First Instance. It is argued for petitioner that as
the damages recoverable under the Civil Code are much more extensive than the amounts that may be
awarded under the Workmen's Compensation Act, they should not be deemed incompatible. As already
indicated, the injured laborer was initially free to choose either to recover from the employer the fixed
amounts set by the Compensation Law or else, to prosecute an ordinary civil action against the
tortfeasor for higher damages. While perhaps not as profitable, the smaller indemnity obtainable by the
first course is balanced by the claimant's being relieved of the burden of proving the causal connection
between the defendant's negligence and the resulting injury, and of having to establish the extent of the
damage suffered; issues that are apt to be troublesome to establish satisfactorily. Having staked his
fortunes on a particular remedy, petitioner is precluded from pursuing the alternate course, at least
until the prior claim is rejected by the Compensation Commission. Anyway, under the proviso of Section
6 aforequoted, if the employer Franklin Baker Company recovers, by derivative action against the
alleged tortfeasors, a sum greater than the compensation he may have paid the herein petitioner, the
excess accrues to the latter.

Although the doctrine in the case of Esguerra vs. Munoz Palma (104 Phil. 582), applies to third-party
tortfeasor, said rule should likewise apply to the employer-tortfeasor.

Insofar as the heirs of Nazarito Floresca are concerned, as already stated, the petition has been
dismissed in the resolution of September 7, 1978 in view of the amicable settlement reached by Philex
and the said heirs.

With regard to the other petitioners, it was alleged by Philex in its motion to dismiss dated May 14, 1968
before the court a quo, that the heirs of the deceased employees, namely Emerito Obra, Larry Villar, Jr.,
Aurelio Lanuza, Lorenzo Isla and Saturnino Martinez submitted notices and claims for compensation to
the Regional Office No. 1 of the then Department of Labor and all of them have been paid in full as of
August 25, 1967, except Saturnino Martinez whose heirs decided that they be paid in installments (pp.
106-107, rec.). Such allegation was admitted by herein petitioners in their opposition to the motion to
dismiss dated May 27, 1968 (pp. 121-122, rec.) in the lower court, but they set up the defense that the
claims were filed under the Workmen's Compensation Act before they learned of the official report of
the committee created to investigate the accident which established the criminal negligence and
violation of law by Philex, and which report was forwarded by the Director of Mines to the then
Executive Secretary Rafael Salas in a letter dated October 19, 1967 only (p. 76, rec.).

WE hold that although the other petitioners had received the benefits under the Workmen's
Compensation Act, such may not preclude them from bringing an action before the regular court
because they became cognizant of the fact that Philex has been remiss in its contractual obligations with
the deceased miners only after receiving compensation under the Act. Had petitioners been aware of
said violation of government rules and regulations by Philex, and of its negligence, they would not have
sought redress under the Workmen's Compensation Commission which awarded a lesser amount for
compensation. The choice of the first remedy was based on ignorance or a mistake of fact, which
nullifies the choice as it was not an intelligent choice. The case should therefore be remanded to the
lower court for further proceedings. However, should the petitioners be successful in their bid before
the lower court, the payments made under the Workmen's Compensation Act should be deducted from
the damages that may be decreed in their favor.

Contrary to the perception of the dissenting opinion, the Court does not legislate in the instant case. The
Court merely applies and gives effect to the constitutional guarantees of social justice then secured by
Section 5 of Article 11 and Section 6 of Article XIV of the 1935 Constitution, and now by Sections 6, 7,
and 9 of Article 11 of the DECLARATION OF PRINCIPLES AND STATE POLICIES of the 1973 Constitution, as
amended, and as implemented by Articles 2176, 2177, 2178, 1173, 2201, 2216, 2231 and 2232 of the
New Civil Code of 1950.

To emphasize, the 1935 Constitution declares that:

Sec. 5. The promotion of social justice to insure the well-being and economic security of all the people
should be the concern of the State (Art. II).

Sec. 6. The State shall afford protection to labor, especially to working women, and minors, and shall
regulate the relations between landowner and tenant, and between labor and capital in industry and in
agriculture. The State may provide for compulsory arbitration (Art. XIV).

The 1973 Constitution likewise commands the State to "promote social justice to insure the dignity,
welfare, and security of all the people "... regulate the use ... and disposition of private property and
equitably diffuse property ownership and profits "establish, maintain and ensure adequate social
services in, the field of education, health, housing, employment, welfare and social security to guarantee
the enjoyment by the people of a decent standard of living" (Sections 6 and 7, Art. II, 1973 Constitution);
"... afford protection to labor, ... and regulate the relations between workers and employers ..., and
assure the rights of workers to ... just and humane conditions of work" (Sec. 9, Art. II, 1973 Constitution,
emphasis supplied).

The foregoing constitutional guarantees in favor of labor institutionalized in Section 9 of Article 11 of the
1973 Constitution and re-stated as a declaration of basic policy in Article 3 of the New Labor Code, thus:
Art. 3. Declaration of basic policy.—The State shall afford protection to labor, promote full employment,
ensure equal work opportunities regardless of sex, race or creed, and regulate the relations between
workers and employers. The State shall assure the rights of workers to self-organization, collective
bargaining, security of tenure, and just and humane conditions of work. (emphasis supplied).

The aforestated constitutional principles as implemented by the aforementioned articles of the New
Civil Code cannot be impliedly repealed by the restrictive provisions of Article 173 of the New Labor
Code. Section 5 of the Workmen's Compensation Act (before it was amended by R.A. No. 772 on June
20, 1952), predecessor of Article 173 of the New Labor Code, has been superseded by the aforestated
provisions of the New Civil Code, a subsequent law, which took effect on August 30, 1950, which obey
the constitutional mandates of social justice enhancing as they do the rights of the workers as against
their employers. Article 173 of the New Labor Code seems to diminish the rights of the workers and
therefore collides with the social justice guarantee of the Constitution and the liberal provisions of the
New Civil Code.

The guarantees of social justice embodied in Sections 6, 7 and 9 of Article II of the 1973 Constitution are
statements of legal principles to be applied and enforced by the courts. Mr. Justice Robert Jackson in the
case of West Virginia State Board of Education vs. Barnette, with characteristic eloquence, enunciated:

The very purpose of a Bill of Rights was to withdraw certain subjects from the vicissitudes of political
controversy, to place them beyond the reach of majorities and officials and to establish them as legal
principles to be applied by the courts. One's right to life, liberty, and property, to free speech, a free
press, freedom of worship and assembly, and other fundamental rights may not be submitted to vote;
they depend on the outcome of no elections (319 U.S. 625, 638, 87 L.ed. 1638, emphasis supplied).

In case of any doubt which may be engendered by Article 173 of the New Labor Code, both the New
Labor Code and the Civil Code direct that the doubts should be resolved in favor of the workers and
employees.

Thus, Article 4 of the New Labor Code, otherwise known as Presidential Decree No. 442, as amended,
promulgated on May 1, 1974, but which took effect six months thereafter, provides that "all doubts in
the implementation and interpretation of the provisions of this Code, including its implementing rules
and regulations, shall be resolved in favor of labor" (Art. 2, Labor Code).

Article 10 of the New Civil Code states: "In case of doubt in the interpretation or application of laws, it is
presumed that the law-making body intended right and justice to prevail. "
More specifically, Article 1702 of the New Civil Code likewise directs that. "In case of doubt, all labor
legislation and all labor contracts shall be construed in favor of the safety and decent living of the
laborer."

Before it was amended by Commonwealth Act No. 772 on June 20, 1952, Section 5 of the Workmen's
Compensation Act provided:

Sec. 5. Exclusive right to compensation.- The rights and remedies granted by this Act to an employee by
reason of a personal injury entitling him to compensation shall exclude all other rights and remedies
accruing to the employee, his personal representatives, dependents or nearest of kin against the
employer under the Civil Code and other laws, because of said injury (emphasis supplied).

Employers contracting laborecsrs in the Philippine Islands for work outside the same may stipulate with
such laborers that the remedies prescribed by this Act shall apply exclusively to injuries received outside
the Islands through accidents happening in and during the performance of the duties of the
employment; and all service contracts made in the manner prescribed in this section shall be presumed
to include such agreement.

Only the second paragraph of Section 5 of the Workmen's Compensation Act No. 3428, was amended by
Commonwealth Act No. 772 on June 20, 1952, thus:

Sec. 5. Exclusive right to compensation.- The rights and remedies granted by this Act to an employee by
reason of a personal injury entitling him to compensation shall exclude all other rights and remedies
accruing to the employee, his personal representatives, dependents or nearest of kin against the
employer under the Civil Code and other laws, because of said injury.

Employers contracting laborers in the Philippine Islands for work outside the same shall stipulate with
such laborers that the remedies prescribed by this Act shall apply to injuries received outside the Island
through accidents happening in and during the performance of the duties of the employment. Such
stipulation shall not prejudice the right of the laborers to the benefits of the Workmen's Compensation
Law of the place where the accident occurs, should such law be more favorable to them (As amended by
section 5 of Republic Act No. 772).

Article 173 of the New Labor Code does not repeal expressly nor impliedly the applicable provisions of
the New Civil Code, because said Article 173 provides:
Art. 173. Exclusiveness of liability.- Unless otherwise provided, the liability of the State Insurance
Fund under this Title shall be exclusive and in place of all other liabilities of the employer to the
employee, his dependents or anyone otherwise entitled to receive damages on behalf of the employee
or his dependents. The payment of compensation under this Title shall bar the recovery of benefits as
provided for in Section 699 of the Revised Administrative Code, Republic Act Numbered Eleven hundred
sixty-one, as amended, Commonwealth Act Numbered One hundred eighty- six, as amended,
Commonwealth Act Numbered Six hundred ten, as amended, Republic Act Numbered Forty-eight
hundred Sixty-four, as amended, and other laws whose benefits are administered by the System during
the period of such payment for the same disability or death, and conversely (emphasis supplied).

As above-quoted, Article 173 of the New Labor Code expressly repealed only Section 699 of the Revised
Administrative Code, R.A. No. 1161, as amended, C.A. No. 186, as amended, R.A. No. 610, as amended,
R.A. No. 4864, as amended, and all other laws whose benefits are administered by the System (referring
to the GSIS or SSS).

Unlike Section 5 of the Workmen's Compensation Act as aforequoted, Article 173 of the New Labor
Code does not even remotely, much less expressly, repeal the New Civil Code provisions heretofore
quoted.

It is patent, therefore, that recovery under the New Civil Code for damages arising from negligence, is
not barred by Article 173 of the New Labor Code. And the damages recoverable under the New Civil
Code are not administered by the System provided for by the New Labor Code, which defines the
"System" as referring to the Government Service Insurance System or the Social Security System (Art.
167 [c], [d] and [e] of the New Labor Code).

Furthermore, under Article 8 of the New Civil Code, decisions of the Supreme Court form part of the law
of the land.

Article 8 of the New Civil Code provides:

Art. 8. Judicial decisions applying or interpreting the laws or the Constitution shall form a part of the
legal system of the Philippines.

The Court, through the late Chief Justice Fred Ruiz Castro, in People vs. Licera ruled:
Article 8 of the Civil Code of the Philippines decrees that judicial decisions applying or interpreting the
laws or the Constitution form part of this jurisdiction's legal system. These decisions, although in
themselves not laws, constitute evidence of what the laws mean. The application or interpretation
placed by the Court upon a law is part of the law as of the date of the enactment of the said law since
the Court's application or interpretation merely establishes the contemporaneous legislative intent that
the construed law purports to carry into effect" (65 SCRA 270, 272-273 [1975]).

WE ruled that judicial decisions of the Supreme Court assume the same authority as the statute itself
(Caltex vs. Palomer, 18 SCRA 247; 124 Phil. 763).

The aforequoted provisions of Section 5 of the Workmen's Compensation Act, before and after it was
amended by Commonwealth Act No. 772 on June 20, 1952, limited the right of recovery in favor of the
deceased, ailing or injured employee to the compensation provided for therein. Said Section 5 was not
accorded controlling application by the Supreme Court in the 1970 case of Pacana vs. Cebu Autobus
Company (32 SCRA 442) when WE ruled that an injured worker has a choice of either to recover from
the employer the fixed amount set by the Workmen's Compensation Act or to prosecute an ordinary
civil action against the tortfeasor for greater damages; but he cannot pursue both courses of action
simultaneously. Said Pacana case penned by Mr. Justice Teehankee, applied Article 1711 of the Civil
Code as against the Workmen's Compensation Act, reiterating the 1969 ruling in the case of Valencia vs.
Manila Yacht Club (28 SCRA 724, June 30,1969) and the 1958 case of Esguerra vs. Munoz Palma (104
Phil. 582), both penned by Justice J.B.L. Reyes. Said Pacana case was concurred in by Justices J.B.L.
Reyes, Dizon, Makalintal, Zaldivar, Castro, Fernando and Villamor.

Since the first sentence of Article 173 of the New Labor Code is merely a re-statement of the first
paragraph of Section 5 of the Workmen's Compensation Act, as amended, and does not even refer,
neither expressly nor impliedly, to the Civil Code as Section 5 of the Workmen's Compensation Act did,
with greater reason said Article 173 must be subject to the same interpretation adopted in the cases of
Pacana, Valencia and Esguerra aforementioned as the doctrine in the aforesaid three (3) cases is faithful
to and advances the social justice guarantees enshrined in both the 1935 and 1973 Constitutions.

It should be stressed likewise that there is no similar provision on social justice in the American Federal
Constitution, nor in the various state constitutions of the American Union. Consequently, the restrictive
nature of the American decisions on the Workmen's Compensation Act cannot limit the range and
compass of OUR interpretation of our own laws, especially Article 1711 of the New Civil Code, vis-a-vis
Article 173 of the New Labor Code, in relation to Section 5 of Article II and Section 6 of Article XIV of the
1935 Constitution then, and now Sections 6, 7 and 9 of the Declaration of Principles and State Policies of
Article II of the 1973 Constitution.
The dissent seems to subordinate the life of the laborer to the property rights of the employer. The right
to life is guaranteed specifically by the due process clause of the Constitution. To relieve the employer
from liability for the death of his workers arising from his gross or wanton fault or failure to provide
safety devices for the protection of his employees or workers against the dangers which are inherent in
underground mining, is to deprive the deceased worker and his heirs of the right to recover indemnity
for the loss of the life of the worker and the consequent loss to his family without due process of law.
The dissent in effect condones and therefore encourages such gross or wanton neglect on the part of
the employer to comply with his legal obligation to provide safety measures for the protection of the
life, limb and health of his worker. Even from the moral viewpoint alone, such attitude is un-Christian.

It is therefore patent that giving effect to the social justice guarantees of the Constitution, as
implemented by the provisions of the New Civil Code, is not an exercise of the power of law-making, but
is rendering obedience to the mandates of the fundamental law and the implementing legislation
aforementioned.

The Court, to repeat, is not legislating in the instant case.

It is axiomatic that no ordinary statute can override a constitutional provision.

The words of Section 5 of the Workmen's Compensation Act and of Article 173 of the New Labor Code
subvert the rights of the petitioners as surviving heirs of the deceased mining employees. Section 5 of
the Workmen's Compensation Act and Article 173 of the New Labor Code are retrogressive; because
they are a throwback to the obsolete laissez-faire doctrine of Adam Smith enunciated in 1776 in his
treatise Wealth of Nations (Collier's Encyclopedia, Vol. 21, p. 93, 1964), which has been discarded soon
after the close of the 18th century due to the Industrial Revolution that generated the machines and
other mechanical devices (beginning with Eli Whitney's cotton gin of 1793 and Robert Fulton's
steamboat of 1807) for production and transportation which are dangerous to life, limb and health. The
old socio-political-economic philosophy of live-and-let-live is now superdesed by the benign Christian
shibboleth of live-and-help others to live. Those who profess to be Christians should not adhere to Cain's
selfish affirmation that he is not his brother's keeper. In this our civilization, each one of us is our
brother's keeper. No man is an island. To assert otherwise is to be as atavistic and ante-deluvian as the
1837 case of Prisley vs. Fowler (3 MN 1,150 reprint 1030) invoked by the dissent, The Prisley case was
decided in 1837 during the era of economic royalists and robber barons of America. Only ruthless,
unfeeling capitalistics and egoistic reactionaries continue to pay obeisance to such un-Christian doctrine.
The Prisley rule humiliates man and debases him; because the decision derisively refers to the lowly
worker as "servant" and utilizes with aristocratic arrogance "master" for "employer." It robs man of his
inherent dignity and dehumanizes him. To stress this affront to human dignity, WE only have to restate
the quotation from Prisley, thus: "The mere relation of the master and the servant never can imply an
obligation on the part of the master to take more care of the servant than he may reasonably be
expected to do himself." This is the very selfish doctrine that provoked the American Civil War which
generated so much hatred and drew so much precious blood on American plains and valleys from 1861
to 1864.

"Idolatrous reverence" for the letter of the law sacrifices the human being. The spirit of the law insures
man's survival and ennobles him. In the words of Shakespeare, "the letter of the law killeth; its spirit
giveth life."

It is curious that the dissenting opinion clings to the myth that the courts cannot legislate.

That myth had been exploded by Article 9 of the New Civil Code, which provides that "No judge or court
shall decline to render judgment by reason of the silence, obscurity or insufficiency of the laws. "

Hence, even the legislator himself, through Article 9 of the New Civil Code, recognizes that in certain
instances, the court, in the language of Justice Holmes, "do and must legislate" to fill in the gaps in the
law; because the mind of the legislator, like all human beings, is finite and therefore cannot envisage all
possible cases to which the law may apply Nor has the human mind the infinite capacity to anticipate all
situations.

But about two centuries before Article 9 of the New Civil Code, the founding fathers of the American
Constitution foresaw and recognized the eventuality that the courts may have to legislate to supply the
omissions or to clarify the ambiguities in the American Constitution and the statutes.

'Thus, Alexander Hamilton pragmatically admits that judicial legislation may be justified but denies that
the power of the Judiciary to nullify statutes may give rise to Judicial tyranny (The Federalist, Modern
Library, pp. 503-511, 1937 ed.). Thomas Jefferson went farther to concede that the court is even
independent of the Nation itself (A.F.L. vs. American Sash Company, 1949 335 US 538).

Many of the great expounders of the American Constitution likewise share the same view. Chief Justice
Marshall pronounced: "It is emphatically the province and duty of the Judicial department to say what
the law is (Marbury vs. Madison I Cranch 127 1803), which was re-stated by Chief Justice Hughes when
he said that "the Constitution is what the judge says it is (Address on May 3, 1907, quoted by President
Franklin Delano Roosevelt on March 9, 1937). This was reiterated by Justice Cardozo who pronounced
that "No doubt the limits for the judge are narrower. He legislates only between gaps. He fills the open
spaces in the law. " (The Nature of the Judicial Process, p. 113). In the language of Chief Justice Harlan F.
Stone, "The only limit to the judicial legislation is the restraint of the judge" (U.S. vs. Butler 297 U.S. 1
Dissenting Opinion, p. 79), which view is also entertained by Justice Frankfurter and Justice Robert
Jackson. In the rhetoric of Justice Frankfurter, "the courts breathe life, feeble or strong, into the inert
pages of the Constitution and all statute books."

It should be stressed that the liability of the employer under Section 5 of the Workmen's Compensation
Act or Article 173 of the New Labor Code is limited to death, ailment or injury caused by the nature of
the work, without any fault on the part of the employers. It is correctly termed no fault liability. Section
5 of the Workmen's Compensation Act, as amended, or Article 173 of the New Labor Code, does not
cover the tortious liability of the employer occasioned by his fault or culpable negligence in failing to
provide the safety devices required by the law for the protection of the life, limb and health of the
workers. Under either Section 5 or Article 173, the employer remains liable to pay compensation
benefits to the employee whose death, ailment or injury is work-connected, even if the employer has
faithfully and diligently furnished all the safety measures and contrivances decreed by the law to protect
the employee.

The written word is no longer the "sovereign talisman." In the epigrammatic language of Mr. Justice
Cardozo, "the law has outgrown its primitive stage of formalism when the precise word was the
sovereign talisman, and every slip was fatal" (Wood vs. Duff Gordon 222 NW 88; Cardozo, The Nature of
the Judicial Process 100). Justice Cardozo warned that: "Sometimes the conservatism of judges has
threatened for an interval to rob the legislation of its efficacy. ... Precedents established in those items
exert an unhappy influence even now" (citing Pound, Common Law and Legislation 21 Harvard Law
Review 383, 387).

Finally, Justice Holmes delivered the coup de grace when he pragmatically admitted, although with a
cautionary undertone: "that judges do and must legislate, but they can do so only interstitially they are
confined from molar to molecular motions" (Southern Pacific Company vs. Jensen, 244 US 204 1917).
And in the subsequent case of Springer vs. Government (277 US 188, 210-212, 72 L.ed. 845, 852- 853),
Justice Holmes pronounced:

The great ordinances of the Constitution do not establish and divide fields of black and white. Even the
more specific of them are found to terminate in a penumbra shading gradually from one extreme to the
other. x x x. When we come to the fundamental distinctions it is still more obvious that they must be
received with a certain latitude or our government could not go on.

To make a rule of conduct applicable to an individual who but for such action would be free from it is to
legislate yet it is what the judges do whenever they determine which of two competing principles of
policy shall prevail.
xxx xxx xxx

It does not seem to need argument to show that however we may disguise it by veiling words we do not
and cannot carry out the distinction between legislative and executive action with mathematical
precision and divide the branches into waterlight compartments, were it ever so desirable to do so,
which I am far from believing that it is, or that the Constitution requires.

True, there are jurists and legal writers who affirm that judges should not legislate, but grudgingly
concede that in certain cases judges do legislate. They criticize the assumption by the courts of such law-
making power as dangerous for it may degenerate into Judicial tyranny. They include Blackstone, Jeremy
Bentham, Justice Black, Justice Harlan, Justice Roberts, Justice David Brewer, Ronald Dworkin, Rolf
Sartorious, Macklin Fleming and Beryl Harold Levy. But said Justices, jurists or legal commentators, who
either deny the power of the courts to legislate in-between gaps of the law, or decry the exercise of such
power, have not pointed to examples of the exercise by the courts of such law-making authority in the
interpretation and application of the laws in specific cases that gave rise to judicial tyranny or
oppression or that such judicial legislation has not protected public interest or individual welfare,
particularly the lowly workers or the underprivileged.

On the other hand, there are numerous decisions interpreting the Bill of Rights and statutory
enactments expanding the scope of such provisions to protect human rights. Foremost among them is
the doctrine in the cases of Miranda vs. Arizona (384 US 436 1964), Gideon vs. Wainright (372 US 335),
Escubedo vs. Illinois (378 US 478), which guaranteed the accused under custodial investigation his rights
to remain silent and to counsel and to be informed of such rights as even as it protects him against the
use of force or intimidation to extort confession from him. These rights are not found in the American
Bill of Rights. These rights are now institutionalized in Section 20, Article IV of the 1973 Constitution.
Only the peace-and-order adherents were critical of the activism of the American Supreme Court led by
Chief Justice Earl Warren.

Even the definition of Identical offenses for purposes of the double jeopardy provision was developed by
American judicial decisions, not by amendment to the Bill of Rights on double jeopardy (see Justice
Laurel in People vs. Tarok, 73 Phil. 260, 261-268). And these judicial decisions have been re-stated in
Section 7 of Rule 117 of the 1985 Rules on Criminal Procedure, as well as in Section 9 of Rule 117 of the
1964 Revised Rules of Court. In both provisions, the second offense is the same as the first offense if the
second offense is an attempt to commit the first or frustration thereof or necessarily includes or is
necessarily included in the first offense.
The requisites of double jeopardy are not spelled out in the Bill of Rights. They were also developed by
judicial decisions in the United States and in the Philippines even before people vs. Ylagan (58 Phil. 851-
853).

Again, the equal protection clause was interpreted in the case of Plessy vs. Ferguson (163 US 537) as
securing to the Negroes equal but separate facilities, which doctrine was revoked in the case of Brown
vs. Maryland Board of Education (349 US 294), holding that the equal protection clause means that the
Negroes are entitled to attend the same schools attended by the whites-equal facilities in the same
school-which was extended to public parks and public buses.

De-segregation, not segregation, is now the governing principle.

Among other examples, the due process clause was interpreted in the case of People vs. Pomar (46 Phil.
440) by a conservative, capitalistic court to invalidate a law granting maternity leave to working women-
according primacy to property rights over human rights. The case of People vs. Pomar is no longer the
rule.

As early as 1904, in the case of Lochner vs. New York (198 US 45, 76, 49 L. ed. 937, 949), Justice Holmes
had been railing against the conservatism of Judges perverting the guarantee of due process to protect
property rights as against human rights or social justice for the working man. The law fixing maximum
hours of labor was invalidated. Justice Holmes was vindicated finally in 1936 in the case of West Coast
Hotel vs. Parish (300 US 377-79; 81 L. ed. 703) where the American Supreme Court upheld the rights of
workers to social justice in the form of guaranteed minimum wage for women and minors, working
hours not exceeding eight (8) daily, and maternity leave for women employees.

The power of judicial review and the principle of separation of powers as well as the rule on political
questions have been evolved and grafted into the American Constitution by judicial decisions (Marbury
vs. Madison, supra Coleman vs. Miller, 307 US 433, 83 L. ed. 1385; Springer vs. Government, 277 US 210-
212, 72 L. ed. 852, 853).

It is noteworthy that Justice Black, who seems to be against judicial legislation, penned a separate
concurring opinion in the case of Coleman vs. Miller, supra, affirming the doctrine of political question
as beyond the ambit of judicial review. There is nothing in both the American and Philippine
Constitutions expressly providing that the power of the courts is limited by the principle of separation of
powers and the doctrine on political questions. There are numerous cases in Philippine jurisprudence
applying the doctrines of separation of powers and political questions and invoking American
precedents.
Unlike the American Constitution, both the 1935 and 1973 Philippine Constitutions expressly vest in the
Supreme Court the power to review the validity or constitutionality of any legislative enactment or
executive act.

WHEREFORE, THE TRIAL COURT'S ORDER OF DISMISSAL IS HEREBY REVERSED AND SET ASIDE AND THE
CASE IS REMANDED TO IT FOR FURTHER PROCEEDINGS. SHOULD A GREATER AMOUNT OF DAMAGES BE
DECREED IN FAVOR OF HEREIN PETITIONERS, THE PAYMENTS ALREADY MADE TO THEM PURSUANT TO
THE WORKMEN'S COMPENSATION ACT SHALL BE DEDUCTED. NO COSTS.

SO ORDERED.

Fernando, C.J., Teehankee, Plana, Escolin, De la Fuente, Cuevas and Alampay JJ., concur.

Concepcion, Jr., J., is on leave.

Abad Santos and Relova, JJ., took no part.

Separate Opinions

MELENCIO-HERRERA, J., dissenting:

A
This case involves a complaint for damages for the death of five employees of PHILEX Mining
Corporation under the general provisions of the Civil Code. The Civil Code itself, however, provides for
its non-applicability to the complaint. It is specifically provided in Article 2196 of the Code, found in Title
XVIII-Damages that:

COMPENSATION FOR WORKMEN AND OTHER EMPLOYEES IN CASE OF DEATH, INJURY OR ILLNESS IS
REGULATED BY SPECIAL LAWS.

Compensation and damages are synonymous. In Esguerra vs. Muñoz Palma, etc., et al., 104 Phil. 582,
586, Justice J.B.L. Reyes had said:

Petitioner also avers that compensation is not damages. This argument is but a play on words. The term
compensation' is used in the law (Act 3812 and Republic Act 772) in the sense of indemnity for damages
suffered, being awarded for a personal injury caused or aggravated by or in the course of employment.
...

By the very provisions of the Civil Code, it is a "special law", not the Code itself, which has to apply to the
complaint involved in the instant case. That "special law", in reference to the complaint, can be no other
than the Workmen's Compensation

Even assuming, without conceding, that an employee is entitled to an election of remedies, as the
majority rules, both options cannot be exercised simultaneously, and the exercise of one will preclude
the exercise of the other. The petitioners had already exercised their option to come under the
Workmen's Compensation Act, and they have already received compensation payable to them under
that Act. Stated differently, the remedy under the Workmen's Compensation Act had already become a
"finished transaction".

There are two considerations why it is believed petitioners should no longer be allowed to exercise the
option to sue under the Civil Code. In the first place, the proceedings under the Workmen's
Compensation Act have already become the law in regards to" the "election of remedies", because
those proceedings had become a "finished transaction".

In the second place, it should be plainly equitable that, if a person entitled to an "election of remedies"
makes a first election and accepts the benefits thereof, he should no longer be allowed to avail himself
of the second option. At the very least, if he wants to make a second election, in disregard of the first
election he has made, when he makes the second election he should surrender the benefits he had
obtained under the first election, This was not done in the case before the Court.
B.

'There is full concurrence on my part with the dissenting opinion of Mr. Justice Gutierrez upholding "the
exclusory provision of the Workmen's Compensation Act." I may further add:

1. The Workmen's Compensation Act (Act No. 3428) was approved on December 10, 1927 and
took effect on June 10, 1928. It was patterned from Minnesota and Hawaii statutes.

Act No. 3428 was adopted by the Philippine legislature, in Spanish and some sections of the law were
taken from the statutes of Minnesota and Hawaii, (Chapter 209 of the Revised Laws of Hawaii, 1925).
[Morabe & Inton, Workmen's Compensation Act, p. 2]

Under the Workmen's Compensation Act of Hawaii, when the Act is applicable, the remedy under the
Act is exclusive The following is stated in 1 Schneider Workmen's Compensation Text, pp. 266, 267.

Sec. 112. Hawaii

Statutory Synopsis. The act is compulsory as to employees in 'all industrial employment' and employees
of the territory and its political subdivisions. (Sections 7480-7481, S.S., Vol. 1, p. 713.)

Compensation is not payable when injury is due to employee's willful intention to injure himself or
another or to his intoxication. (Sec. 7482, S.S., p. 713.)

When the act is applicable the remedy thereunder is exclusive (Sec. 7483, S.S., p. 714.)

2. In providing for exclusiveness of the remedy under our Workmen's Compensation Act, the
Philippine Legislature worded the first paragraph of Section 5 of the Act as follows:

SEC. 5. Exclusive right to compensation.-The rights and remedies granted by this Act to an employee

by reason of a personal injury entitling him to compensation

shall exclude all other rights and remedies accruing to the employee, his personal representatives,
dependents or nearest of kin against the employer

under the Civil Code and other laws, because of said injury (Paragraphing and emphasis supplied)

In regards to the intent of the Legislature under the foregoing provision:

A cardinal rule in the interpretation of statutes is that the meaning and intention of the law-making
body must be sought, first of all in the words of the statute itself, read and considered in their natural,
ordinary, commonly-accepted and most obvious significations, according to good and approved usage
and without resorting to forced or subtle construction Courts, therefore, as a rule, cannot presume that
the law-making body does not know the meaning of words and the rules of grammar. Consequently, the
grammatical reading of a statute must be presumed to yield its correct sense. (Espino vs. Cleofe 52 SCRA
92, 98) [Italics supplied]

3. The original second paragraph of Section 5 provided:

Employers contracting laborers in the Philippine Islands for work outside the same shall stipulate with
such laborers that the remedies prescribed by this Act shall apply exclusively to injuries received outside
the Islands through accidents happening in and during the performance of the duties of the
employment. (Italics supplied)

The use of the word "exclusively is a further confirmation of the exclusory provision of the Act, subject
only to exceptions which may be provided in the Act itself.

4. It might be mentioned that, within the Act itself, provision is made for remedies other than
within the Act itself. Thus, Section 6, in part, provides:

SEC. 6. Liability of third parties.-In case an employee suffers an injury for which compensation is due
under this Act by any other person besides his employer, it shall be optional with such injured employee
either to claim compensation from his employer, under this Act, or sue such other person for damages,
in accordance with law; ... (Emphasis supplied)
If the legislative intent under the first paragraph of Section 5 were to allow the injured employee to sue
his employer under the Civil Code, the legislator could very easily have formulated the said first
paragraph of Section 5 according to the pattern of Section 6. That that was not done shows the
legislative intent not to allow any option to an employee to sue the employer under the Civil Code for
injuries compensable under the Act.

5. There should be no question but that the original first paragraph of Section 5 of the Workmen's
Compensation Act, formulated in 1927, provided that an injured worker or employee, or his heirs, if
entitled to compensation under the Act, cannot have independent recourse neither to the Civil Code nor
to any other law relative to the liability of the employer. After 1927, there were occasions when the
legislator had the opportunity to amend the first paragraph of Section 5 such that the remedies under
the Act would not be exclusive; yet, the legislator refrained from doing so. That shows the legislatives
continuing intent to maintain the exclusory provision of the first paragraph of Section 5 unless otherwise
provided in the Act itself.

(a) The original second paragraph of Section 5 provided:

Employers contracting laborers in the Philippine Islands for work outside the same shall stipulate with
such laborers that the remedies prescribed by this Act shall apply (exclusively) to injuries received
outside the Islands through accidents happening in and during the performance of the duties of the
employment (and all service contracts made in the manner prescribed in this section be presumed to
include such agreement).

On June 20, 1952, through RA 772, the foregoing second paragraph was amended with the elimination
of the underlined words in parentheses, and the addition of this sentence at the end of the paragraph:

Such stipulation shall not prejudice the right of the laborers to the benefits of the Workmen's
Compensation Law of the place where the accident occurs, should such law be more favorable to them.
(Emphasis supplied)

It will be seen that, within the Act itself, the exclusory character of the Act was amended. At that time, if
he had so desired, the legislator could have amended the first paragraph of Section 5 so that the
employee would have the option to sue the employer under the Act, or under the Civil Code, should the
latter be more favorable to him.

(b) The Workmen's Compensation Act, which took effect in 1927, grants compensation to an
injured employee without regard to the presence or absence of negligence on the part of the employer.
The compensation is deemed an expense chargeable to the industry (Murillo vs. Mendoza, 66 Phil. 689
[1938]).

In time, it must have been thought that it was inequitable to have the amount of compensation, caused
by negligence on the part of the employer, to be the same amount payable when the employer was not
negligent. Based on that thinking, Section 4-A 1 was included into the Act, on June 20, 1952, through RA
772. Said Section 4-A increased the compensation payable by 50% in case there was negligence on the
part of the employer. That additional section evidenced the intent of the legislator not to give an option
to an employee, injured with negligence on the part of the employer, to sue the latter under the
provisions of the Civil Code.

On June 20, 1964, Section 4-A was amended (insubstantially) by RA 4119. The legislator was again given
the opportunity to provide, but he did not, the option to an employee to sue under the Act or under the
Civil Code.

When a Court gives effect to a statute not in accordance with the intent of the law-maker, the Court is
unjustifiably legislating.

It is in view of the foregoing that I vote for affirmation of the trial Court's dismissal of the Complaint.

GUTIERREZ, JR., J., dissenting:

To grant the petition and allow the victims of industrial accidents to file damages suits based on torts
would be a radical innovation not only contrary to the express provisions of the Workmen's
Compensation Act but a departure from the principles evolved in the long history of workmen's
compensation. At the very least, it should be the legislature and not this Court which should remove the
exclusory provision of the Workmen's Compensation Act, a provision reiterated in the present Labor
Code on employees' compensation.

Workmen's compensation evolved to remedy the evils associated with the situation in the early years of
the industrial revolution when injured workingmen had to rely on damage suits to get recompense.

Before workmen's compensation, an injured worker seeking damages would have to prove in a tort suit
that his employer was either negligent or in bad faith, that his injury was caused by the employer and
not a fellow worker, and that he was not guilty of contributory negligence. The employer could employ
not only his wealth in defeating the claim for damages but a host of common law defenses available to
him as well. The worker was supposed to know what he entered into when he accepted employment. As
stated in the leading case of Priestley u. Fowler (3 M. & W. 1, 150 Reprint 1030) decided in 1837 "the
mere relation of the master and the servant never can imply an obligation on the part of the master to
take more care of the servant than he may reasonably be expected to do of himself." By entering into a
contract of employment, the worker was deemed to accept the risks of employment that he should
discover and guard against himself.

The problems associated with the application of the fellow servant rule, the assumption of risk doctrine,
the principle of contributory negligence, and the many other defenses so easily raised in protracted
damage suits illustrated the need for a system whereby workers had only to prove the fact of covered
employment and the fact of injury arising from employment in order to be compensated.

The need for a compensation scheme where liability is created solely by statute and made compulsory
and where the element of fault-either the fault of the employer or the fault of the employee-
disregarded became obvious. Another objective was to have simplified, expeditious, inexpensive, and
non-litigious procedures so that victims of industrial accidents could more readily, if not automatically,
receive compensation for work-related injuries.

Inspite of common law defenses to defeat a claim being recognized, employers' liability acts were a
major step in the desired direction. However, employers liability legislation proved inadequate.
Legislative reform led to the workmen's compensation.

I cite the above familiar background because workmen's compensation represents a compromise. In
return for the near certainty of receiving a sum of money fixed by law, the injured worker gives up the
right to subject the employer to a tort suit for huge amounts of damages. Thus, liability not only
disregards the element of fault but it is also a pre- determined amount based on the wages of the
injured worker and in certain cases, the actual cost of rehabilitation. The worker does not receive the
total damages for his pain and suffering which he could otherwise claim in a civil suit. The employer is
required to act swiftly on compensation claims. An administrative agency supervises the program. And
because the overwhelming mass of workingmen are benefited by the compensation system, individual
workers who may want to sue for big amounts of damages must yield to the interests of their entire
working class.

The nature of the compensation principle is explained as follows:

An appreciation of the nature of the compensation principle is essential to an understanding of the acts
and the cases interpreting them.
By the turn of the century it was apparent that the toll of industrial accidents of both the avoidable and
unavoidable variety had become enormous, and government was faced with the problem of who was to
pay for the human wreckage wrought by the dangers of modern industry. If the accident was avoidable
and could be attributed to the carelessness of the employer, existing tort principles offered some
measure of redress. Even here, however, the woeful inadequacy of the fault principle was manifest. The
uncertainty of the outcome of torts litigation in court placed the employee at a substantial
disadvantage. So long as liability depended on fault there could be no recovery until the finger of blame
had been pointed officially at the employer or his agents. In most cases both the facts and the law were
uncertain. The witnesses, who were usually fellow workers of the victim, were torn between friendship
or loyalty to their class, on the one hand, and fear of reprisal by the employer, on the other. The
expense and delay of litigation often prompted the injured employee to accept a compromise
settlement for a fraction of the full value of his claim. Even if suit were successfully prosecuted, a large
share of the proceeds of the judgment were exacted as contingent fees by counsel. Thus the employer
against whom judgment was cast often paid a substantial damage bill, while only a part of this enured to
the benefit of the injured employee or his dependents. The employee's judgment was nearly always too
little and too late.

xxx xxx xxx

Workmen's Compensation rests upon the economic principle that those persons who enjoy the product
of a business- whether it be in the form of goods or services- should ultimately bear the cost of the
injuries or deaths that are incident to the manufacture, preparation and distribution of the product. ...

xxx xxx xxx

Under this approach the element of personal fault either disappears entirely or is subordinated to
broader economic considerations. The employer absorbs the cost of accident loss only initially; it is
expected that this cost will eventually pass down the stream of commerce in the form of increase price
until it is spread in dilution among the ultimate consumers. So long as each competing unit in a given
industry is uniformly affected, no producer can gain any substantial competitive advantage or suffer any
appreciable loss by reason of the general adoption of the compensation principle.

In order that the compensation principle may operate properly and with fairness to all parties it is
essential that the anticipated accident cost be predictable and that it be fixed at a figure that will not
disrupt too violently the traffic in the product of the industry affected. Thus predictability and
moderateness of cost are necessary from the broad economic viewpoint. ....
Compensation, then, differs from the conventional damage suit in two important respects: Fault on the
part of either employer or employee is eliminated; and compensation payable according to a definitely
limited schedule is substituted for damages. All compensation acts alike work these two major changes,
irrespective of how they may differ in other particulars.

Compensation, when regarded from the viewpoint of employer and employee represents a compromise
in which each party surrenders certain advantages in order to gain others which are of more importance
both to him and to society. The employer gives up the immunity he otherwise would enjoy in cases
where he is not at fault, and the employee surrenders his former right to full damages and accepts
instead a more modest claim for bare essentials, represented by compensation.

The importance of the compromise character of compensation cannot be overemphasized. The statutes
vary a great deal with reference to the proper point of balance. The amount of weekly compensation
payments and the length of the period during which compensation is to be paid are matters concerning
which the acts differ considerably. The interpretation of any compensation statute will be influenced
greatly by the court's reaction to the basic point of compromise established in the Act. If the court feels
that the basic compromise unduly favors the employer, it will be tempted to restore what it regards as a
proper balance by adopting an interpretation that favors the worker. In this way, a compensation act
drawn in a spirit of extreme conservatism may be transformed by a sympathetic court into a fairly liberal
instrument; and conversely, an act that greatly favors the laborer may be so interpreted by the courts
that employers can have little reason to complain. Much of the unevenness and apparent conflict in
compensation decisions throughout the various jurisdictions must be attributed to this." (Malone &
Plant, Workmen's Compensation American Casebook Series, pp. 63-65).

The schedule of compensation, the rates of payments, the compensable injuries and diseases, the
premiums paid by employers to the present system, the actuarial stability of the trust fund and many
other interrelated parts have all been carefully studied before the integrated scheme was enacted in to
law. We have a system whose parts must mesh harmonious with one another if it is to succeed. The
basic theory has to be followed.

If this Court disregards this totality of the scheme and in a spirit of generosity recasts some parts of the
system without touching the related others, the entire structure is endangered. For instance, I am
personally against stretching the law and allowing payment of compensation for contingencies never
envisioned to be compensable when the law was formulated. Certainly, only harmful results to the
principle of workmen's compensation can arise if workmen, whom the law allows to receive
employment compensation, can still elect to file damage suits for industrial accidents. It was precisely
for this reason that Section 5 of the Workmen's Compensation Act, which reads:
SEC. 5. Exclusive right to compensation.-The rights and remedies granted by this Act to an employee by
reason of a personal injury entitling him to compensation shall exclude all other rights and remedies
accruing to the employee, his personal representatives, dependents or nearest of kin against the
employer under the Civil Code and other laws because of said injury. ...

Article 173 of the labor Code also provides:

ART. 173. Exclusivenesss of liability.—Unless otherwise provided, the liability of the State
Insurance Fund under this Title shall be exclusive and in place of all other liabilities of the employer to
the employee his dependents or anyone otherwise entitled to receive damages on behalf of the
employee or his dependents.

I am against the Court assuming the role of legislator in a matter calling for actuarial studies and public
hearings. If employers already required to contribute to the State Insurance Fund will still have to bear
the cost of damage suits or get insurance for that purpose, a major study will be necessary. The issue
before us is more far reaching than the interests of the poor victims and their families. All workers
covered by workmen's compensation and all employers who employ covered employees are affected.
Even as I have deepest sympathies for the victims, I regret that I am constrained to dissent from the
majority opinion.

Separate Opinions

MELENCIO-HERRERA, J., dissenting:

This case involves a complaint for damages for the death of five employees of PHILEX Mining
Corporation under the general provisions of the Civil Code. The Civil Code itself, however, provides for
its non-applicability to the complaint. It is specifically provided in Article 2196 of the Code, found in Title
XVIII-Damages that:

COMPENSATION FOR WORKMEN AND OTHER EMPLOYEES IN CASE OF DEATH, INJURY OR ILLNESS IS
REGULATED BY SPECIAL LAWS.

Compensation and damages are synonymous. In Esguerra vs. Muñoz Palma, etc., et al., 104 Phil. 582,
586, Justice J.B.L. Reyes had said:

Petitioner also avers that compensation is not damages. This argument is but a play on words. The term
compensation' is used in the law (Act 3812 and Republic Act 772) in the sense of indemnity for damages
suffered, being awarded for a personal injury caused or aggravated by or in the course of employment.
...

By the very provisions of the Civil Code, it is a "special law", not the Code itself, which has to apply to the
complaint involved in the instant case. That "special law", in reference to the complaint, can be no other
than the Workmen's Compensation

Even assuming, without conceding, that an employee is entitled to an election of remedies, as the
majority rules, both options cannot be exercised simultaneously, and the exercise of one will preclude
the exercise of the other. The petitioners had already exercised their option to come under the
Workmen's Compensation Act, and they have already received compensation payable to them under
that Act. Stated differently, the remedy under the Workmen's Compensation Act had already become a
"finished transaction".

There are two considerations why it is believed petitioners should no longer be allowed to exercise the
option to sue under the Civil Code. In the first place, the proceedings under the Workmen's
Compensation Act have already become the law in regards to" the "election of remedies", because
those proceedings had become a "finished transaction".

In the second place, it should be plainly equitable that, if a person entitled to an "election of remedies"
makes a first election and accepts the benefits thereof, he should no longer be allowed to avail himself
of the second option. At the very least, if he wants to make a second election, in disregard of the first
election he has made, when he makes the second election he should surrender the benefits he had
obtained under the first election, This was not done in the case before the Court.
B.

'There is full concurrence on my part with the dissenting opinion of Mr. Justice Gutierrez upholding "the
exclusory provision of the Workmen's Compensation Act." I may further add:

1. The Workmen's Compensation Act (Act No. 3428) was approved on December 10, 1927 and
took effect on June 10, 1928. It was patterned from Minnesota and Hawaii statutes.

Act No. 3428 was adopted by the Philippine legislature, in Spanish and some sections of the law were
taken from the statutes of Minnesota and Hawaii, (Chapter 209 of the Revised Laws of Hawaii, 1925).
[Morabe & Inton, Workmen's Compensation Act, p. 2]

Under the Workmen's Compensation Act of Hawaii, when the Act is applicable, the remedy under the
Act is exclusive The following is stated in 1 Schneider Workmen's Compensation Text, pp. 266, 267.

Sec. 112. Hawaii

Statutory Synopsis. The act is compulsory as to employees in 'all industrial employment' and employees
of the territory and its political subdivisions. (Sections 7480-7481, S.S., Vol. 1, p. 713.)

Compensation is not payable when injury is due to employee's willful intention to injure himself or
another or to his intoxication. (Sec. 7482, S.S., p. 713.)

When the act is applicable the remedy thereunder is exclusive (Sec. 7483, S.S., p. 714.)

2. In providing for exclusiveness of the remedy under our Workmen's Compensation Act, the
Philippine Legislature worded the first paragraph of Section 5 of the Act as follows:

SEC. 5. Exclusive right to compensation.-The rights and remedies granted by this Act to an employee

by reason of a personal injury entitling him to compensation

shall exclude all other rights and remedies accruing to the employee, his personal representatives,
dependents or nearest of kin against the employer

under the Civil Code and other laws, because of said injury (Paragraphing and emphasis supplied)

In regards to the intent of the Legislature under the foregoing provision:

A cardinal rule in the interpretation of statutes is that the meaning and intention of the law-making
body must be sought, first of all in the words of the statute itself, read and considered in their natural,
ordinary, commonly-accepted and most obvious significations, according to good and approved usage
and without resorting to forced or subtle construction Courts, therefore, as a rule, cannot presume that
the law-making body does not know the meaning of words and the rules of grammar. Consequently, the
grammatical reading of a statute must be presumed to yield its correct sense. (Espino vs. Cleofe 52 SCRA
92, 98) [Italics supplied]

3. The original second paragraph of Section 5 provided:

Employers contracting laborers in the Philippine Islands for work outside the same shall stipulate with
such laborers that the remedies prescribed by this Act shall apply exclusively to injuries received outside
the Islands through accidents happening in and during the performance of the duties of the
employment. (Italics supplied)

The use of the word "exclusively is a further confirmation of the exclusory provision of the Act, subject
only to exceptions which may be provided in the Act itself.

4. It might be mentioned that, within the Act itself, provision is made for remedies other than
within the Act itself. Thus, Section 6, in part, provides:

SEC. 6. Liability of third parties.-In case an employee suffers an injury for which compensation is due
under this Act by any other person besides his employer, it shall be optional with such injured employee
either to claim compensation from his employer, under this Act, or sue such other person for damages,
in accordance with law; ... (Emphasis supplied)
If the legislative intent under the first paragraph of Section 5 were to allow the injured employee to sue
his employer under the Civil Code, the legislator could very easily have formulated the said first
paragraph of Section 5 according to the pattern of Section 6. That that was not done shows the
legislative intent not to allow any option to an employee to sue the employer under the Civil Code for
injuries compensable under the Act.

5. There should be no question but that the original first paragraph of Section 5 of the Workmen's
Compensation Act, formulated in 1927, provided that an injured worker or employee, or his heirs, if
entitled to compensation under the Act, cannot have independent recourse neither to the Civil Code nor
to any other law relative to the liability of the employer. After 1927, there were occasions when the
legislator had the opportunity to amend the first paragraph of Section 5 such that the remedies under
the Act would not be exclusive; yet, the legislator refrained from doing so. That shows the legislatives
continuing intent to maintain the exclusory provision of the first paragraph of Section 5 unless otherwise
provided in the Act itself.

(a) The original second paragraph of Section 5 provided:

Employers contracting laborers in the Philippine Islands for work outside the same shall stipulate with
such laborers that the remedies prescribed by this Act shall apply (exclusively) to injuries received
outside the Islands through accidents happening in and during the performance of the duties of the
employment (and all service contracts made in the manner prescribed in this section be presumed to
include such agreement).

On June 20, 1952, through RA 772, the foregoing second paragraph was amended with the elimination
of the underlined words in parentheses, and the addition of this sentence at the end of the paragraph:

Such stipulation shall not prejudice the right of the laborers to the benefits of the Workmen's
Compensation Law of the place where the accident occurs, should such law be more favorable to them.
(Emphasis supplied)

It will be seen that, within the Act itself, the exclusory character of the Act was amended. At that time, if
he had so desired, the legislator could have amended the first paragraph of Section 5 so that the
employee would have the option to sue the employer under the Act, or under the Civil Code, should the
latter be more favorable to him.

(b) The Workmen's Compensation Act, which took effect in 1927, grants compensation to an
injured employee without regard to the presence or absence of negligence on the part of the employer.
The compensation is deemed an expense chargeable to the industry (Murillo vs. Mendoza, 66 Phil. 689
[1938]).

In time, it must have been thought that it was inequitable to have the amount of compensation, caused
by negligence on the part of the employer, to be the same amount payable when the employer was not
negligent. Based on that thinking, Section 4-A 1 was included into the Act, on June 20, 1952, through RA
772. Said Section 4-A increased the compensation payable by 50% in case there was negligence on the
part of the employer. That additional section evidenced the intent of the legislator not to give an option
to an employee, injured with negligence on the part of the employer, to sue the latter under the
provisions of the Civil Code.

On June 20, 1964, Section 4-A was amended (insubstantially) by RA 4119. The legislator was again given
the opportunity to provide, but he did not, the option to an employee to sue under the Act or under the
Civil Code.

When a Court gives effect to a statute not in accordance with the intent of the law-maker, the Court is
unjustifiably legislating.

It is in view of the foregoing that I vote for affirmation of the trial Court's dismissal of the Complaint.

GUTIERREZ, JR., J., dissenting:

To grant the petition and allow the victims of industrial accidents to file damages suits based on torts
would be a radical innovation not only contrary to the express provisions of the Workmen's
Compensation Act but a departure from the principles evolved in the long history of workmen's
compensation. At the very least, it should be the legislature and not this Court which should remove the
exclusory provision of the Workmen's Compensation Act, a provision reiterated in the present Labor
Code on employees' compensation.

Workmen's compensation evolved to remedy the evils associated with the situation in the early years of
the industrial revolution when injured workingmen had to rely on damage suits to get recompense.

Before workmen's compensation, an injured worker seeking damages would have to prove in a tort suit
that his employer was either negligent or in bad faith, that his injury was caused by the employer and
not a fellow worker, and that he was not guilty of contributory negligence. The employer could employ
not only his wealth in defeating the claim for damages but a host of common law defenses available to
him as well. The worker was supposed to know what he entered into when he accepted employment. As
stated in the leading case of Priestley u. Fowler (3 M. & W. 1, 150 Reprint 1030) decided in 1837 "the
mere relation of the master and the servant never can imply an obligation on the part of the master to
take more care of the servant than he may reasonably be expected to do of himself." By entering into a
contract of employment, the worker was deemed to accept the risks of employment that he should
discover and guard against himself.

The problems associated with the application of the fellow servant rule, the assumption of risk doctrine,
the principle of contributory negligence, and the many other defenses so easily raised in protracted
damage suits illustrated the need for a system whereby workers had only to prove the fact of covered
employment and the fact of injury arising from employment in order to be compensated.

The need for a compensation scheme where liability is created solely by statute and made compulsory
and where the element of fault-either the fault of the employer or the fault of the employee-
disregarded became obvious. Another objective was to have simplified, expeditious, inexpensive, and
non-litigious procedures so that victims of industrial accidents could more readily, if not automatically,
receive compensation for work-related injuries.

Inspite of common law defenses to defeat a claim being recognized, employers' liability acts were a
major step in the desired direction. However, employers liability legislation proved inadequate.
Legislative reform led to the workmen's compensation.

I cite the above familiar background because workmen's compensation represents a compromise. In
return for the near certainty of receiving a sum of money fixed by law, the injured worker gives up the
right to subject the employer to a tort suit for huge amounts of damages. Thus, liability not only
disregards the element of fault but it is also a pre- determined amount based on the wages of the
injured worker and in certain cases, the actual cost of rehabilitation. The worker does not receive the
total damages for his pain and suffering which he could otherwise claim in a civil suit. The employer is
required to act swiftly on compensation claims. An administrative agency supervises the program. And
because the overwhelming mass of workingmen are benefited by the compensation system, individual
workers who may want to sue for big amounts of damages must yield to the interests of their entire
working class.

The nature of the compensation principle is explained as follows:

An appreciation of the nature of the compensation principle is essential to an understanding of the acts
and the cases interpreting them.
By the turn of the century it was apparent that the toll of industrial accidents of both the avoidable and
unavoidable variety had become enormous, and government was faced with the problem of who was to
pay for the human wreckage wrought by the dangers of modern industry. If the accident was avoidable
and could be attributed to the carelessness of the employer, existing tort principles offered some
measure of redress. Even here, however, the woeful inadequacy of the fault principle was manifest. The
uncertainty of the outcome of torts litigation in court placed the employee at a substantial
disadvantage. So long as liability depended on fault there could be no recovery until the finger of blame
had been pointed officially at the employer or his agents. In most cases both the facts and the law were
uncertain. The witnesses, who were usually fellow workers of the victim, were torn between friendship
or loyalty to their class, on the one hand, and fear of reprisal by the employer, on the other. The
expense and delay of litigation often prompted the injured employee to accept a compromise
settlement for a fraction of the full value of his claim. Even if suit were successfully prosecuted, a large
share of the proceeds of the judgment were exacted as contingent fees by counsel. Thus the employer
against whom judgment was cast often paid a substantial damage bill, while only a part of this enured to
the benefit of the injured employee or his dependents. The employee's judgment was nearly always too
little and too late.

xxx xxx xxx

Workmen's Compensation rests upon the economic principle that those persons who enjoy the product
of a business- whether it be in the form of goods or services- should ultimately bear the cost of the
injuries or deaths that are incident to the manufacture, preparation and distribution of the product. ...

xxx xxx xxx

Under this approach the element of personal fault either disappears entirely or is subordinated to
broader economic considerations. The employer absorbs the cost of accident loss only initially; it is
expected that this cost will eventually pass down the stream of commerce in the form of increase price
until it is spread in dilution among the ultimate consumers. So long as each competing unit in a given
industry is uniformly affected, no producer can gain any substantial competitive advantage or suffer any
appreciable loss by reason of the general adoption of the compensation principle.

In order that the compensation principle may operate properly and with fairness to all parties it is
essential that the anticipated accident cost be predictable and that it be fixed at a figure that will not
disrupt too violently the traffic in the product of the industry affected. Thus predictability and
moderateness of cost are necessary from the broad economic viewpoint. ....
Compensation, then, differs from the conventional damage suit in two important respects: Fault on the
part of either employer or employee is eliminated; and compensation payable according to a definitely
limited schedule is substituted for damages. All compensation acts alike work these two major changes,
irrespective of how they may differ in other particulars.

Compensation, when regarded from the viewpoint of employer and employee represents a compromise
in which each party surrenders certain advantages in order to gain others which are of more importance
both to him and to society. The employer gives up the immunity he otherwise would enjoy in cases
where he is not at fault, and the employee surrenders his former right to full damages and accepts
instead a more modest claim for bare essentials, represented by compensation.

The importance of the compromise character of compensation cannot be overemphasized. The statutes
vary a great deal with reference to the proper point of balance. The amount of weekly compensation
payments and the length of the period during which compensation is to be paid are matters concerning
which the acts differ considerably. The interpretation of any compensation statute will be influenced
greatly by the court's reaction to the basic point of compromise established in the Act. If the court feels
that the basic compromise unduly favors the employer, it will be tempted to restore what it regards as a
proper balance by adopting an interpretation that favors the worker. In this way, a compensation act
drawn in a spirit of extreme conservatism may be transformed by a sympathetic court into a fairly liberal
instrument; and conversely, an act that greatly favors the laborer may be so interpreted by the courts
that employers can have little reason to complain. Much of the unevenness and apparent conflict in
compensation decisions throughout the various jurisdictions must be attributed to this." (Malone &
Plant, Workmen's Compensation American Casebook Series, pp. 63-65).

The schedule of compensation, the rates of payments, the compensable injuries and diseases, the
premiums paid by employers to the present system, the actuarial stability of the trust fund and many
other interrelated parts have all been carefully studied before the integrated scheme was enacted in to
law. We have a system whose parts must mesh harmonious with one another if it is to succeed. The
basic theory has to be followed.

If this Court disregards this totality of the scheme and in a spirit of generosity recasts some parts of the
system without touching the related others, the entire structure is endangered. For instance, I am
personally against stretching the law and allowing payment of compensation for contingencies never
envisioned to be compensable when the law was formulated. Certainly, only harmful results to the
principle of workmen's compensation can arise if workmen, whom the law allows to receive
employment compensation, can still elect to file damage suits for industrial accidents. It was precisely
for this reason that Section 5 of the Workmen's Compensation Act, which reads:
SEC. 5. Exclusive right to compensation.-The rights and remedies granted by this Act to an employee by
reason of a personal injury entitling him to compensation shall exclude all other rights and remedies
accruing to the employee, his personal representatives, dependents or nearest of kin against the
employer under the Civil Code and other laws because of said injury. ...

Article 173 of the labor Code also provides:

ART. 173. Exclusivenesss of liability.—Unless otherwise provided, the liability of the State
Insurance Fund under this Title shall be exclusive and in place of all other liabilities of the employer to
the employee his dependents or anyone otherwise entitled to receive damages on behalf of the
employee or his dependents.

I am against the Court assuming the role of legislator in a matter calling for actuarial studies and public
hearings. If employers already required to contribute to the State Insurance Fund will still have to bear
the cost of damage suits or get insurance for that purpose, a major study will be necessary. The issue
before us is more far reaching than the interests of the poor victims and their families. All workers
covered by workmen's compensation and all employers who employ covered employees are affected.
Even as I have deepest sympathies for the victims, I regret that I am constrained to dissent from the
majority opinion.

Footnotes

1 SEC. 4-A. Right to additional compensation.- In case of the employee's death, injury or
sickness due to the failure of the to comply with any law, or with any order, rule or
regulation of the Workmen's Compensation Commission or the Bureau of Labor Standards
or should the employer violate the provisions of Republic Act Numbered Six hundred
seventy-nine and its amendments or fail to install and maintain safety appliances, or take
other precautions for the prevention of accidents or occupational disease, he shall be liable
to pay an additional compensation equal to fifty per centum of the compensation fixed in
this Act.
Case Digest:

Republic of the Philippines

SUPREME COURT

Manila

EN BANC

G.R. No. L-30642 April 30, 1985

PERFECTO S. FLORESCA, in his own behalf and on behalf of the minors ROMULO and NESTOR S.
FLORESCA; and ERLINDA FLORESCA-GABUYO, PEDRO S. FLORESCA, JR., CELSO S. FLORESCA, MELBA S.
FLORESCA, JUDITH S. FLORESCA and CARMEN S. FLORESCA;

LYDIA CARAMAT VDA. DE MARTINEZ in her own behalf and on behalf of her minor children LINDA,
ROMEO, ANTONIO JEAN and ELY, all surnamed Martinez; and DANIEL MARTINEZ and TOMAS MARTINEZ;

SALUSTIANA ASPIRAS VDA. DE OBRA, in her own behalf and on behalf of her minor children JOSE,
ESTELA, JULITA SALUD and DANILO, all surnamed OBRA;

LYDIA CULBENGAN VDA. DE VILLAR, in her own behalf and on behalf of her minor children EDNA,
GEORGE and LARRY III, all surnamed VILLAR;

DOLORES LOLITA ADER VDA. DE LANUZA, in her own behalf and on behalf of her minor children EDITHA,
ELIZABETH, DIVINA, RAYMUNDO, NESTOR and AURELIO, JR. all surnamed LANUZA;

EMERENCIANA JOSE VDA. DE ISLA, in her own behalf and on behalf of her minor children JOSE,
LORENZO, JR., MARIA, VENUS and FELIX, all surnamed ISLA, petitioners,

vs.

PHILEX MINING CORPORATION and HON. JESUS P. MORFE, Presiding Judge of Branch XIII, Court of First
Instance of Manila, respondents.
Rodolfo C. Pacampara for petitioners.

Tito M. Villaluna for respondents.

DECISION

MAKASIAR, J.:

This is a petition to review the order of the former Court of First Instance of Manila, Branch XIII, dated
December 16, 1968 dismissing petitioners’ complaint for damages on the ground of lack of jurisdiction.

Petitioners are the heirs of the deceased employees of Philex Mining Corporation (hereinafter referred
to as Philex), who, while working at its copper mines underground operations at Tuba, Benguet on June
28, 1967, died as a result of the cave-in that buried them in the tunnels of the mine. Specifically, the
complaint alleges that Philex, in violation of government rules and regulations, negligently and
deliberately failed to take the required precautions for the protection of the lives of its men working
underground. Portion of the complaint reads:

xxx xxx xxx

9. That for sometime prior and up to June 28,1967, the defendant PHILEX, with gross and reckless
negligence and imprudence and deliberate failure to take the required precautions for the due
protection of the lives of its men working underground at the time, and in utter violation of the laws and
the rules and regulations duly promulgated by the Government pursuant thereto, allowed great amount
of water and mud to accumulate in an open pit area at the mine above Block 43-S-1 which seeped
through and saturated the 600 ft. column of broken ore and rock below it, thereby exerting tremendous
pressure on the working spaces at its 4300 level, with the result that, on the said date, at about 4 o’clock
in the afternoon, with the collapse of all underground supports due to such enormous pressure,
approximately 500,000 cubic feet of broken ores rocks, mud and water, accompanied by surface
boulders, blasted through the tunnels and flowed out and filled in, in a matter of approximately five (5)
minutes, the underground workings, ripped timber supports and carried off materials, machines and
equipment which blocked all avenues of exit, thereby trapping within its tunnels of all its men above
referred to, including those named in the next preceding paragraph, represented by the plaintiffs
herein;

10. That out of the 48 mine workers who were then working at defendant PHILEX’s mine on the said
date, five (5) were able to escape from the terrifying holocaust; 22 were rescued within the next 7 days;
and the rest, 21 in number, including those referred to in paragraph 7 hereinabove, were left mercilessly
to their fate, notwithstanding the fact that up to then, a great many of them were still alive, entombed
in the tunnels of the mine, but were not rescued due to defendant PHILEX’s decision to abandon rescue
operations, in utter disregard of its bounden legal and moral duties in the premises;

xxx xxx xxx

12. That defendant PHILEX not only violated the law and the rules and regulations duly promulgated by
the duly constituted authorities as set out by the Special Committee above referred to, in their Report of
investigation, pages 7-13, Annex ‘B’ hereof, but also failed completely to provide its men working
underground the necessary security for the protection of their lives notwithstanding the fact that it had
vast financial resources, it having made, during the year 1966 alone, a total operating income of P
38,220,254.00, or net earnings, after taxes of P19,117,394.00, as per its 11th Annual Report for the year
ended December 31, 1966, and with aggregate assets totaling P 45,794,103.00 as of December 31, 1966;

xxx xxx xxx

(pp. 42-44, rec.)

A motion to dismiss dated May 14, 1968 was filed by Philex alleging that the causes of action of
petitioners based on an industrial accident are covered by the provisions of the Workmen’s
Compensation Act (Act 3428, as amended by RA 772) and that the former Court of First Instance has no
jurisdiction over the case. Petitioners filed an opposition dated May 27, 1968 to the said motion to
dismiss claiming that the causes of action are not based on the provisions of the Workmen’s
Compensation Act but on the provisions of the Civil Code allowing the award of actual, moral and
exemplary damages, particularly:

Art. 2176. Whoever by act or omission causes damage to another, there being fault or negligence, is
obliged to pay for the damage done. Such fault or negligence, if there is no pre- existing contractual
relation between the parties, is called a quasi-delict and is governed by the provisions of this Chapter.
Art. 2178. The provisions of articles 1172 to 1174 are also applicable to a quasi-delict.

(b) Art. 1173—The fault or negligence of the obligor consists in the omission of that diligence which is
required by the nature of the obligation and corresponds with the circumstances of the persons, of the
time and of the place. When negligence shows bad faith, the provisions of Articles 1171 and 2201,
paragraph 2 shall apply.

Art. 2201. x x x x x x x x x

In case of fraud, bad faith, malice or wanton attitude, the obligor shall be responsible for all damages
which may be reasonably attributed to the non-performance of the obligation.

Art. 2231. In quasi-delicts, exemplary damages may be granted if the defendant acted with gross
negligence.

After a reply and a rejoinder thereto were filed, respondent Judge issued an order dated June 27, 1968
dismissing the case on the ground that it falls within the exclusive jurisdiction of the Workmen’s
Compensation Commission. On petitioners’ motion for reconsideration of the said order, respondent
Judge, on September 23, 1968, reconsidered and set aside his order of June 27, 1968 and allowed Philex
to file an answer to the complaint. Philex moved to reconsider the aforesaid order which was opposed
by petitioners.

On December 16, 1968, respondent Judge dismissed the case for lack of jurisdiction and ruled that in
accordance with the established jurisprudence, the Workmen’s Compensation Commission has exclusive
original jurisdiction over damage or compensation claims for work-connected deaths or injuries of
workmen or employees, irrespective of whether or not the employer was negligent, adding that if the
employer’s negligence results in work-connected deaths or injuries, the employer shall, pursuant to
Section 4-A of the Workmen’s Compensation Act, pay additional compensation equal to 50% of the
compensation fixed in the Act.

Petitioners thus filed the present petition.

In their brief, petitioners raised the following assignment of errors:

I

THE LOWER COURT ERRED IN DISMISSING THE PLAINTIFFS- PETITIONERS’ COMPLAINT FOR LACK OF
JURISDICTION.

II

THE LOWER COURT ERRED IN FAILING TO CONSIDER THE CLEAR DISTINCTION BETWEEN CLAIMS FOR
DAMAGES UNDER THE CIVIL CODE AND CLAIMS FOR COMPENSATION UNDER THE WORKMEN’S
COMPENSATION ACT.

In the first assignment of error, petitioners argue that the lower court has jurisdiction over the cause of
action since the complaint is based on the provisions of the Civil Code on damages, particularly Articles
2176, 2178, 1173, 2201 and 2231, and not on the provisions of the Workmen’s Compensation Act. They
point out that the complaint alleges gross and brazen negligence on the part of Philex in failing to take
the necessary security for the protection of the lives of its employees working underground. They also
assert that since Philex opted to file a motion to dismiss in the court a quo, the allegations in their
complaint including those contained in the annexes are deemed admitted.

In the second assignment of error, petitioners asseverate that respondent Judge failed to see the
distinction between the claims for compensation under the Workmen’s Compensation Act and the
claims for damages based on gross negligence of Philex under the Civil Code. They point out that
workmen’s compensation refers to liability for compensation for loss resulting from injury, disability or
death of the working man through industrial accident or disease, without regard to the fault or
negligence of the employer, while the claim for damages under the Civil Code which petitioners pursued
in the regular court, refers to the employer’s liability for reckless and wanton negligence resulting in the
death of the employees and for which the regular court has jurisdiction to adjudicate the same.

On the other hand, Philex asserts that work-connected injuries are compensable exclusively under the
provisions of Sections 5 and 46 of the Workmen’s Compensation Act, which read:

SEC. 5. Exclusive right to compensation.—The rights and remedies granted by this Act to an employee by
reason of a personal injury entitling him to compensation shall exclude all other rights and remedies
accruing to the employee, his personal representatives, dependents or nearest of kin against the
employer under the Civil Code and other laws because of said injury …

SEC. 46. Jurisdiction.— The Workmen’s Compensation Commissioner shall have exclusive jurisdiction to
hear and decide claims for compensation under the Workmen’s Compensation Act, subject to appeal to
the Supreme Court, …

Philex cites the case of Manalo vs. Foster Wheeler (98 Phil. 855 [1956]) where it was held that “all claims
of workmen against their employer for damages due to accident suffered in the course of employment
shall be investigated and adjudicated by the Workmen’s Compensation Commission,” subject to appeal
to the Supreme Court.

Philex maintains that the fact that an employer was negligent, does not remove the case from the
exclusive character of recoveries under the Workmen’s Compensation Act; because Section 4-A of the
Act provides an additional compensation in case the employer fails to comply with the requirements of
safety as imposed by law to prevent accidents. In fact, it points out that Philex voluntarily paid the
compensation due the petitioners and all the payments have been accepted in behalf of the deceased
miners, except the heirs of Nazarito Floresca who insisted that they are entitled to a greater amount of
damages under the Civil Code.

In the hearing of this case, then Undersecretary of Labor Israel Bocobo, then Atty. Edgardo Angara, now
President of the University of the Philippines, Justice Manuel Lazaro, as corporate counsel and Assistant
General Manager of the GSIS Legal Affairs Department, and Commissioner on Elections, formerly UP Law
Center Director Froilan Bacungan, appeared as amici curiae and thereafter, submitted their respective
memoranda.

The issue to be resolved as WE stated in the resolution of November 26, 1976, is:

Whether the action of an injured employee or worker or that of his heirs in case of his death under the
Workmen’s Compensation Act is exclusive, selective or cumulative, that is to say, whether his or his
heirs’ action is exclusively restricted to seeking the limited compensation provided under the
Workmen’s Compensation Act or whether they have a right of selection or choice of action between
availing of the worker’s right under the Workmen’s Compensation Act and suing in the regular courts
under the Civil Code for higher damages (actual, moral and/or exemplary) from the employer by virtue
of negligence (or fault) of the employer or of his other employees or whether they may avail
cumulatively of both actions, i.e., collect the limited compensation under the Workmen’s Compensation
Act and sue in addition for damages in the regular courts.
There are divergent opinions in this case. Justice Lazaro is of the opinion that an injured employee or
worker, or the heirs in case of his death, may initiate a complaint to recover damages (not
compensation under the Workmen’s Compensation Act) with the regular court on the basis of
negligence of an employer pursuant to the Civil Code provisions. Atty. Angara believes otherwise. He
submits that the remedy of an injured employee for work-connected injury or accident is exclusive in
accordance with Section 5 of the Workmen’s Compensation Act, while Atty. Bacungan’s position is that
the action is selective. He opines that the heirs of the employee in case of his death have a right of
choice to avail themselves of the benefits provided under the Workmen’s Compensation Act or to sue in
the regular court under the Civil Code for higher damages from the employer by virtue of negligence of
the latter. Atty. Bocobo’s stand is the same as that of Atty. Bacungan and adds that once the heirs elect
the remedy provided for under the Act, they are no longer entitled to avail themselves of the remedy
provided for under the Civil Code by filing an action for higher damages in the regular court, and vice
versa.

On August 3, 1978, petitioners-heirs of deceased employee Nazarito Floresca filed a motion to dismiss
on the ground that they have amicably settled their claim with respondent Philex. In the resolution of
September 7, 1978, WE dismissed the petition only insofar as the aforesaid petitioners are connected, it
appearing that there are other petitioners in this case.

WE hold that the former Court of First Instance has jurisdiction to try the case,

It should be underscored that petitioners’ complaint is not for compensation based on the Workmen’s
Compensation Act but a complaint for damages (actual, exemplary and moral) in the total amount of
eight hundred twenty-five thousand (P825,000.00) pesos. Petitioners did not invoke the provisions of
the Workmen’s Compensation Act to entitle them to compensation thereunder. In fact, no allegation
appeared in the complaint that the employees died from accident arising out of and in the course of
their employments. The complaint instead alleges gross and reckless negligence and deliberate failure
on the part of Philex to protect the lives of its workers as a consequence of which a cave-in occurred
resulting in the death of the employees working underground. Settled is the rule that in ascertaining
whether or not the cause of action is in the nature of workmen’s compensation claim or a claim for
damages pursuant to the provisions of the Civil Code, the test is the averments or allegations in the
complaint (Belandres vs. Lopez Sugar Mill, Co., Inc., 97 Phil. 100).

In the present case, there exists between Philex and the deceased employees a contractual relationship.
The alleged gross and reckless negligence and deliberate failure that amount to bad faith on the part of
Philex, constitute a breach of contract for which it may be held liable for damages. The provisions of the
Civil Code on cases of breach of contract when there is fraud or bad faith, read:
Art. 2232. In contracts and quasi-contracts, the court may award exemplary damages if the defendant
acted in a wanton, fraudulent, reckless, oppressive or malevolent manner.

Art. 2201. In contracts and quasi-contracts, the damages for which the obligor who acted in good faith is
able shall be those that are the natural and probable consequences of the breach of the obligation, and
which the parties have foreseen or could have reasonably foreseen at the time the obligation was
constituted.

In cases of fraud, bad faith, malice or wanton attitude, the obligor shall be responsible for all damages
which may be reasonably attributed to the non-performance of the obligation.

Furthermore, Articles 2216 et seq., Civil Code, allow the payment of all kinds of damages, as assessed by
the court.

The rationale in awarding compensation under the Workmen’s Compensation Act differs from that in
giving damages under the Civil Code. The compensation acts are based on a theory of compensation
distinct from the existing theories of damages, payments under the acts being made as compensation
and not as damages (99 C.J.S. 53). Compensation is given to mitigate the harshness and insecurity of
industrial life for the workman and his family. Hence, an employer is liable whether negligence exists or
not since liability is created by law. Recovery under the Act is not based on any theory of actionable
wrong on the part of the employer (99 C.J.S. 36).

In other words, under the compensation acts, the employer is liable to pay compensation benefits for
loss of income, as long as the death, sickness or injury is work-connected or work-aggravated, even if
the death or injury is not due to the fault of the employer (Murillo vs. Mendoza, 66 Phil. 689). On the
other hand, damages are awarded to one as a vindication of the wrongful invasion of his rights. It is the
indemnity recoverable by a person who has sustained injury either in his person, property or relative
rights, through the act or default of another (25 C.J.S. 452).

The claimant for damages under the Civil Code has the burden of proving the causal relation between
the defendant’s negligence and the resulting injury as well as the damages suffered. While under the
Workmen’s Compensation Act, there is a presumption in favor of the deceased or injured employee that
the death or injury is work-connected or work-aggravated; and the employer has the burden to prove
otherwise (De los Angeles vs. GSIS, 94 SCRA 308; Carino vs. WCC, 93 SCRA 551; Maria Cristina Fertilizer
Corp. vs. WCC, 60 SCRA 228).
The claim of petitioners that the case is not cognizable by the Workmen’s Compensation Commission
then, now Employees Compensation Commission, is strengthened by the fact that unlike in the Civil
Code, the Workmen’s Compensation Act did not contain any provision for an award of actual, moral and
exemplary damages. What the Act provided was merely the right of the heirs to claim limited
compensation for the death in the amount of six thousand (P6,000.00) pesos plus burial expenses of two
hundred (P200.00) pesos, and medical expenses when incurred (Sections 8, 12 and 13, Workmen’s
Compensation Act), and an additional compensation of only 50% if the complaint alleges failure on the
part of the employer to “install and maintain safety appliances or to take other precautions for the
prevention of accident or occupational disease” (Section 4-A, Ibid.). In the case at bar, the amount
sought to be recovered is over and above that which was provided under the Workmen’s Compensation
Act and which cannot be granted by the Commission.

Moreover, under the Workmen’s Compensation Act, compensation benefits should be paid to an
employee who suffered an accident not due to the facilities or lack of facilities in the industry of his
employer but caused by factors outside the industrial plant of his employer. Under the Civil Code, the
liability of the employer, depends on breach of contract or tort. The Workmen’s Compensation Act was
specifically enacted to afford protection to the employees or workmen. It is a social legislation designed
to give relief to the workman who has been the victim of an accident causing his death or ailment or
injury in the pursuit of his employment (Abong vs. WCC, 54 SCRA 379).

WE now come to the query as to whether or not the injured employee or his heirs in case of death have
a right of selection or choice of action between availing themselves of the worker’s right under the
Workmen’s Compensation Act and suing in the regular courts under the Civil Code for higher damages
(actual, moral and exemplary) from the employers by virtue of that negligence or fault of the employers
or whether they may avail themselves cumulatively of both actions, i.e., collect the limited
compensation under the Workmen’s Compensation Act and sue in addition for damages in the regular
courts.

In disposing of a similar issue, this Court in Pacaña vs. Cebu Autobus Company, 32 SCRA 442, ruled that
an injured worker has a choice of either to recover from the employer the fixed amounts set by the
Workmen’s Compensation Act or to prosecute an ordinary civil action against the tortfeasor for higher
damages but he cannot pursue both courses of action simultaneously.

In Pacaña WE said:

In the analogous case of Esguerra vs. Munoz Palma, involving the application of Section 6 of the
Workmen’s Compensation Act on the injured workers’ right to sue third- party tortfeasors in the regular
courts, Mr. Justice J.B.L. Reyes, again speaking for the Court, pointed out that the injured worker has the
choice of remedies but cannot pursue both courses of action simultaneously and thus balanced the
relative advantage of recourse under the Workmen’s Compensation Act as against an ordinary action.

As applied to this case, petitioner Esguerra cannot maintain his action for damages against the
respondents (defendants below), because he has elected to seek compensation under the Workmen’s
Compensation Law, and his claim (case No. 44549 of the Compensation Commission) was being
processed at the time he filed this action in the Court of First Instance. It is argued for petitioner that as
the damages recoverable under the Civil Code are much more extensive than the amounts that may be
awarded under the Workmen’s Compensation Act, they should not be deemed incompatible. As already
indicated, the injured laborer was initially free to choose either to recover from the employer the fixed
amounts set by the Compensation Law or else, to prosecute an ordinary civil action against the
tortfeasor for higher damages. While perhaps not as profitable, the smaller indemnity obtainable by the
first course is balanced by the claimant’s being relieved of the burden of proving the causal connection
between the defendant’s negligence and the resulting injury, and of having to establish the extent of the
damage suffered; issues that are apt to be troublesome to establish satisfactorily. Having staked his
fortunes on a particular remedy, petitioner is precluded from pursuing the alternate course, at least
until the prior claim is rejected by the Compensation Commission. Anyway, under the proviso of Section
6 aforequoted, if the employer Franklin Baker Company recovers, by derivative action against the
alleged tortfeasors, a sum greater than the compensation he may have paid the herein petitioner, the
excess accrues to the latter.

Although the doctrine in the case of Esguerra vs. Munoz Palma (104 Phil. 582), applies to third-party
tortfeasor, said rule should likewise apply to the employer-tortfeasor.

Insofar as the heirs of Nazarito Floresca are concerned, as already stated, the petition has been
dismissed in the resolution of September 7, 1978 in view of the amicable settlement reached by Philex
and the said heirs.

With regard to the other petitioners, it was alleged by Philex in its motion to dismiss dated May 14, 1968
before the court a quo, that the heirs of the deceased employees, namely Emerito Obra, Larry Villar, Jr.,
Aurelio Lanuza, Lorenzo Isla and Saturnino Martinez submitted notices and claims for compensation to
the Regional Office No. 1 of the then Department of Labor and all of them have been paid in full as of
August 25, 1967, except Saturnino Martinez whose heirs decided that they be paid in installments (pp.
106-107, rec.). Such allegation was admitted by herein petitioners in their opposition to the motion to
dismiss dated May 27, 1968 (pp. 121-122, rec.) in the lower court, but they set up the defense that the
claims were filed under the Workmen’s Compensation Act before they learned of the official report of
the committee created to investigate the accident which established the criminal negligence and
violation of law by Philex, and which report was forwarded by the Director of Mines to the then
Executive Secretary Rafael Salas in a letter dated October 19, 1967 only (p. 76, rec.).
WE hold that although the other petitioners had received the benefits under the Workmen’s
Compensation Act, such may not preclude them from bringing an action before the regular court
because they became cognizant of the fact that Philex has been remiss in its contractual obligations with
the deceased miners only after receiving compensation under the Act. Had petitioners been aware of
said violation of government rules and regulations by Philex, and of its negligence, they would not have
sought redress under the Workmen’s Compensation Commission which awarded a lesser amount for
compensation. The choice of the first remedy was based on ignorance or a mistake of fact, which
nullifies the choice as it was not an intelligent choice. The case should therefore be remanded to the
lower court for further proceedings. However, should the petitioners be successful in their bid before
the lower court, the payments made under the Workmen’s Compensation Act should be deducted from
the damages that may be decreed in their favor.

Contrary to the perception of the dissenting opinion, the Court does not legislate in the instant case. The
Court merely applies and gives effect to the constitutional guarantees of social justice then secured by
Section 5 of Article 11 and Section 6 of Article XIV of the 1935 Constitution, and now by Sections 6, 7,
and 9 of Article 11 of the DECLARATION OF PRINCIPLES AND STATE POLICIES of the 1973 Constitution, as
amended, and as implemented by Articles 2176, 2177, 2178, 1173, 2201, 2216, 2231 and 2232 of the
New Civil Code of 1950.

To emphasize, the 1935 Constitution declares that:

Sec. 5. The promotion of social justice to insure the well-being and economic security of all the people
should be the concern of the State (Art. II).

Sec. 6. The State shall afford protection to labor, especially to working women, and minors, and shall
regulate the relations between landowner and tenant, and between labor and capital in industry and in
agriculture. The State may provide for compulsory arbitration (Art. XIV).

The 1973 Constitution likewise commands the State to “promote social justice to insure the dignity,
welfare, and security of all the people “… regulate the use … and disposition of private property and
equitably diffuse property ownership and profits “establish, maintain and ensure adequate social
services in, the field of education, health, housing, employment, welfare and social security to guarantee
the enjoyment by the people of a decent standard of living” (Sections 6 and 7, Art. II, 1973 Constitution);
“… afford protection to labor, … and regulate the relations between workers and employers …, and
assure the rights of workers to … just and humane conditions of work”(Sec. 9, Art. II, 1973 Constitution,
emphasis supplied).

The foregoing constitutional guarantees in favor of labor institutionalized in Section 9 of Article 11 of the
1973 Constitution and re-stated as a declaration of basic policy in Article 3 of the New Labor Code, thus:

Art. 3. Declaration of basic policy.—The State shall afford protection to labor, promote full employment,
ensure equal work opportunities regardless of sex, race or creed, and regulate the relations between
workers and employers. The State shall assure the rights of workers to self-organization, collective
bargaining, security of tenure, and just and humane conditions of work. (emphasis supplied).

The aforestated constitutional principles as implemented by the aforementioned articles of the New
Civil Code cannot be impliedly repealed by the restrictive provisions of Article 173 of the New Labor
Code. Section 5 of the Workmen’s Compensation Act (before it was amended by R.A. No. 772 on June
20, 1952), predecessor of Article 173 of the New Labor Code, has been superseded by the aforestated
provisions of the New Civil Code, a subsequent law, which took effect on August 30, 1950, which obey
the constitutional mandates of social justice enhancing as they do the rights of the workers as against
their employers. Article 173 of the New Labor Code seems to diminish the rights of the workers and
therefore collides with the social justice guarantee of the Constitution and the liberal provisions of the
New Civil Code.

The guarantees of social justice embodied in Sections 6, 7 and 9 of Article II of the 1973 Constitution are
statements of legal principles to be applied and enforced by the courts. Mr. Justice Robert Jackson in the
case of West Virginia State Board of Education vs. Barnette, with characteristic eloquence, enunciated:

The very purpose of a Bill of Rights was to withdraw certain subjects from the vicissitudes of political
controversy, to place them beyond the reach of majorities and officials and to establish them as legal
principles to be applied by the courts. One’s right to life, liberty, and property, to free speech, a free
press, freedom of worship and assembly, and other fundamental rights may not be submitted to vote;
they depend on the outcome of no elections (319 U.S. 625, 638, 87 L.ed. 1638, emphasis supplied).

In case of any doubt which may be engendered by Article 173 of the New Labor Code, both the New
Labor Code and the Civil Code direct that the doubts should be resolved in favor of the workers and
employees.

Thus, Article 4 of the New Labor Code, otherwise known as Presidential Decree No. 442, as amended,
promulgated on May 1, 1974, but which took effect six months thereafter, provides that “all doubts in
the implementation and interpretation of the provisions of this Code, including its implementing rules
and regulations, shall be resolved in favor of labor” (Art. 2, Labor Code).

Article 10 of the New Civil Code states: “In case of doubt in the interpretation or application of laws, it is
presumed that the law-making body intended right and justice to prevail. ”

More specifically, Article 1702 of the New Civil Code likewise directs that. “In case of doubt, all labor
legislation and all labor contracts shall be construed in favor of the safety and decent living of the
laborer.”

Before it was amended by Commonwealth Act No. 772 on June 20, 1952, Section 5 of the Workmen’s
Compensation Act provided:

Sec. 5. Exclusive right to compensation.- The rights and remedies granted by this Act to an employee by
reason of a personal injury entitling him to compensation shall exclude all other rights and remedies
accruing to the employee, his personal representatives, dependents or nearest of kin against the
employer under the Civil Code and other laws, because of said injury (emphasis supplied).

Employers contracting laborers in the Philippine Islands for work outside the same may stipulate with
such laborers that the remedies prescribed by this Act shall apply exclusively to injuries received outside
the Islands through accidents happening in and during the performance of the duties of the
employment; and all service contracts made in the manner prescribed in this section shall be presumed
to include such agreement.

Only the second paragraph of Section 5 of the Workmen’s Compensation Act No. 3428, was amended by
Commonwealth Act No. 772 on June 20, 1952, thus:

Sec. 5. Exclusive right to compensation.- The rights and remedies granted by this Act to an employee by
reason of a personal injury entitling him to compensation shall exclude all other rights and remedies
accruing to the employee, his personal representatives, dependents or nearest of kin against the
employer under the Civil Code and other laws, because of said injury.

Employers contracting laborers in the Philippine Islands for work outside the same shall stipulate with
such laborers that the remedies prescribed by this Act shall apply to injuries received outside the Island
through accidents happening in and during the performance of the duties of the employment. Such
stipulation shall not prejudice the right of the laborers to the benefits of the Workmen’s Compensation
Law of the place where the accident occurs, should such law be more favorable to them (As amended by
section 5 of Republic Act No. 772).

Article 173 of the New Labor Code does not repeal expressly nor impliedly the applicable provisions of
the New Civil Code, because said Article 173 provides:

Art. 173. Exclusiveness of liability.- Unless otherwise provided, the liability of the State Insurance Fund
under this Title shall be exclusive and in place of all other liabilities of the employer to the employee, his
dependents or anyone otherwise entitled to receive damages on behalf of the employee or his
dependents. The payment of compensation under this Title shall bar the recovery of benefits as
provided for in Section 699 of the Revised Administrative Code, Republic Act Numbered Eleven hundred
sixty-one, as amended, Commonwealth Act Numbered One hundred eighty- six, as amended,
Commonwealth Act Numbered Six hundred ten, as amended, Republic Act Numbered Forty-eight
hundred Sixty-four, as amended, and other laws whose benefits are administered by the System during
the period of such payment for the same disability or death, and conversely (emphasis supplied).

As above-quoted, Article 173 of the New Labor Code expressly repealed only Section 699 of the Revised
Administrative Code, R.A. No. 1161, as amended, C.A. No. 186, as amended, R.A. No. 610, as amended,
R.A. No. 4864, as amended, and all other laws whose benefits are administered by the System (referring
to the GSIS or SSS).

Unlike Section 5 of the Workmen’s Compensation Act as aforequoted, Article 173 of the New Labor
Code does not even remotely, much less expressly, repeal the New Civil Code provisions heretofore
quoted.

It is patent, therefore, that recovery under the New Civil Code for damages arising from negligence, is
not barred by Article 173 of the New Labor Code. And the damages recoverable under the New Civil
Code are not administered by the System provided for by the New Labor Code, which defines the
“System” as referring to the Government Service Insurance System or the Social Security System (Art.
167 [c], [d] and [e] of the New Labor Code).

Furthermore, under Article 8 of the New Civil Code, decisions of the Supreme Court form part of the law
of the land.

Article 8 of the New Civil Code provides:

Art. 8. Judicial decisions applying or interpreting the laws or the Constitution shall form a part of the
legal system of the Philippines.

The Court, through the late Chief Justice Fred Ruiz Castro, in People vs. Licera ruled:

Article 8 of the Civil Code of the Philippines decrees that judicial decisions applying or interpreting the
laws or the Constitution form part of this jurisdiction’s legal system. These decisions, although in
themselves not laws, constitute evidence of what the laws mean. The application or interpretation
placed by the Court upon a law is part of the law as of the date of the enactment of the said law since
the Court’s application or interpretation merely establishes the contemporaneous legislative intent that
the construed law purports to carry into effect” (65 SCRA 270, 272-273 [1975]).

WE ruled that judicial decisions of the Supreme Court assume the same authority as the statute itself
(Caltex vs. Palomar, 18 SCRA 247; 124 Phil. 763).

The aforequoted provisions of Section 5 of the Workmen’s Compensation Act, before and after it was
amended by Commonwealth Act No. 772 on June 20, 1952, limited the right of recovery in favor of the
deceased, ailing or injured employee to the compensation provided for therein. Said Section 5 was not
accorded controlling application by the Supreme Court in the 1970 case of Pacana vs. Cebu Autobus
Company (32 SCRA 442) when WE ruled that an injured worker has a choice of either to recover from
the employer the fixed amount set by the Workmen’s Compensation Act or to prosecute an ordinary
civil action against the tortfeasor for greater damages; but he cannot pursue both courses of action
simultaneously. Said Pacana case penned by Mr. Justice Teehankee, applied Article 1711 of the Civil
Code as against the Workmen’s Compensation Act, reiterating the 1969 ruling in the case of Valencia vs.
Manila Yacht Club (28 SCRA 724, June 30,1969) and the 1958 case of Esguerra vs. Munoz Palma (104
Phil. 582), both penned by Justice J.B.L. Reyes. Said Pacana case was concurred in by Justices J.B.L.
Reyes, Dizon, Makalintal, Zaldivar, Castro, Fernando and Villamor.

Since the first sentence of Article 173 of the New Labor Code is merely a re-statement of the first
paragraph of Section 5 of the Workmen’s Compensation Act, as amended, and does not even refer,
neither expressly nor impliedly, to the Civil Code as Section 5 of the Workmen’s Compensation Act did,
with greater reason said Article 173 must be subject to the same interpretation adopted in the cases of
Pacana, Valencia and Esguerra aforementioned as the doctrine in the aforesaid three (3) cases is faithful
to and advances the social justice guarantees enshrined in both the 1935 and 1973 Constitutions.
It should be stressed likewise that there is no similar provision on social justice in the American Federal
Constitution, nor in the various state constitutions of the American Union. Consequently, the restrictive
nature of the American decisions on the Workmen’s Compensation Act cannot limit the range and
compass of OUR interpretation of our own laws, especially Article 1711 of the New Civil Code, vis-a-vis
Article 173 of the New Labor Code, in relation to Section 5 of Article II and Section 6 of Article XIV of the
1935 Constitution then, and now Sections 6, 7 and 9 of the Declaration of Principles and State Policies of
Article II of the 1973 Constitution.

The dissent seems to subordinate the life of the laborer to the property rights of the employer. The right
to life is guaranteed specifically by the due process clause of the Constitution. To relieve the employer
from liability for the death of his workers arising from his gross or wanton fault or failure to provide
safety devices for the protection of his employees or workers against the dangers which are inherent in
underground mining, is to deprive the deceased worker and his heirs of the right to recover indemnity
for the loss of the life of the worker and the consequent loss to his family without due process of law.
The dissent in effect condones and therefore encourages such gross or wanton neglect on the part of
the employer to comply with his legal obligation to provide safety measures for the protection of the
life, limb and health of his worker. Even from the moral viewpoint alone, such attitude is un-Christian.

It is therefore patent that giving effect to the social justice guarantees of the Constitution, as
implemented by the provisions of the New Civil Code, is not an exercise of the power of law-making, but
is rendering obedience to the mandates of the fundamental law and the implementing legislation
aforementioned.

The Court, to repeat, is not legislating in the instant case.

It is axiomatic that no ordinary statute can override a constitutional provision.

The words of Section 5 of the Workmen’s Compensation Act and of Article 173 of the New Labor Code
subvert the rights of the petitioners as surviving heirs of the deceased mining employees. Section 5 of
the Workmen’s Compensation Act and Article 173 of the New Labor Code are retrogressive; because
they are a throwback to the obsolete laissez-faire doctrine of Adam Smith enunciated in 1776 in his
treatise Wealth of Nations (Collier’s Encyclopedia, Vol. 21, p. 93, 1964), which has been discarded soon
after the close of the 18th century due to the Industrial Revolution that generated the machines and
other mechanical devices (beginning with Eli Whitney’s cotton gin of 1793 and Robert Fulton’s
steamboat of 1807) for production and transportation which are dangerous to life, limb and health. The
old socio-political-economic philosophy of live-and-let-live is now superseded by the benign Christian
shibboleth of live-and-help others to live. Those who profess to be Christians should not adhere to
Cain’s selfish affirmation that he is not his brother’s keeper. In this our civilization, each one of us is our
brother’s keeper. No man is an island. To assert otherwise is to be as atavistic and ante-deluvian as the
1837 case of Prisley vs. Fowler (3 MN 1,150 reprint 1030) invoked by the dissent, the Prisley case was
decided in 1837 during the era of economic royalists and robber barons of America. Only ruthless,
unfeeling capitalistics and egoistic reactionaries continue to pay obeisance to such un-Christian doctrine.
The Prisley rule humiliates man and debases him; because the decision derisively refers to the lowly
worker as “servant” and utilizes with aristocratic arrogance “master” for “employer.” It robs man of his
inherent dignity and dehumanizes him. To stress this affront to human dignity, WE only have to restate
the quotation from Prisley, thus: “The mere relation of the master and the servant never can imply an
obligation on the part of the master to take more care of the servant than he may reasonably be
expected to do himself.” This is the very selfish doctrine that provoked the American Civil War which
generated so much hatred and drew so much precious blood on American plains and valleys from 1861
to 1864.

“Idolatrous reverence” for the letter of the law sacrifices the human being. The spirit of the law insures
man’s survival and ennobles him. In the words of Shakespeare, “the letter of the law killeth; its spirit
giveth life.”

It is curious that the dissenting opinion clings to the myth that the courts cannot legislate.

That myth had been exploded by Article 9 of the New Civil Code, which provides that “No judge or court
shall decline to render judgment by reason of the silence, obscurity or insufficiency of the laws. ”

Hence, even the legislator himself, through Article 9 of the New Civil Code, recognizes that in certain
instances, the court, in the language of Justice Holmes, “do and must legislate” to fill in the gaps in the
law; because the mind of the legislator, like all human beings, is finite and therefore cannot envisage all
possible cases to which the law may apply Nor has the human mind the infinite capacity to anticipate all
situations.

But about two centuries before Article 9 of the New Civil Code, the founding fathers of the American
Constitution foresaw and recognized the eventuality that the courts may have to legislate to supply the
omissions or to clarify the ambiguities in the American Constitution and the statutes.

‘Thus, Alexander Hamilton pragmatically admits that judicial legislation may be justified but denies that
the power of the Judiciary to nullify statutes may give rise to Judicial tyranny (The Federalist, Modern
Library, pp. 503-511, 1937 ed.). Thomas Jefferson went farther to concede that the court is even
independent of the Nation itself (A.F.L. vs. American Sash Company, 1949 335 US 538).
Many of the great expounders of the American Constitution likewise share the same view. Chief Justice
Marshall pronounced: “It is emphatically the province and duty of the Judicial department to say what
the law is (Marbury vs. Madison, I Cranch 127 1803), which was re-stated by Chief Justice Hughes when
he said that “the Constitution is what the judge says it is (Address on May 3, 1907, quoted by President
Franklin Delano Roosevelt on March 9, 1937). This was reiterated by Justice Cardozo who pronounced
that “No doubt the limits for the judge are narrower. He legislates only between gaps. He fills the open
spaces in the law. ” (The Nature of the Judicial Process, p. 113). In the language of Chief Justice Harlan F.
Stone, “The only limit to the judicial legislation is the restraint of the judge” (U.S. vs. Butler, 297 U.S. 1
Dissenting Opinion, p. 79), which view is also entertained by Justice Frankfurter and Justice Robert
Jackson. In the rhetoric of Justice Frankfurter, “the courts breathe life, feeble or strong, into the inert
pages of the Constitution and all statute books.”

It should be stressed that the liability of the employer under Section 5 of the Workmen’s Compensation
Act or Article 173 of the New Labor Code is limited to death, ailment or injury caused by the nature of
the work, without any fault on the part of the employers. It is correctly termed no fault liability. Section
5 of the Workmen’s Compensation Act, as amended, or Article 173 of the New Labor Code, does not
cover the tortious liability of the employer occasioned by his fault or culpable negligence in failing to
provide the safety devices required by the law for the protection of the life, limb and health of the
workers. Under either Section 5 or Article 173, the employer remains liable to pay compensation
benefits to the employee whose death, ailment or injury is work-connected, even if the employer has
faithfully and diligently furnished all the safety measures and contrivances decreed by the law to protect
the employee.

The written word is no longer the “sovereign talisman.” In the epigrammatic language of Mr. Justice
Cardozo, “the law has outgrown its primitive stage of formalism when the precise word was the
sovereign talisman, and every slip was fatal” (Wood vs. Duff Gordon, 222 NW 88; Cardozo, The Nature of
the Judicial Process 100). Justice Cardozo warned that: “Sometimes the conservatism of judges has
threatened for an interval to rob the legislation of its efficacy. … Precedents established in those items
exert an unhappy influence even now” (citing Pound, Common Law and Legislation 21 Harvard Law
Review 383, 387).

Finally, Justice Holmes delivered the coup de grace when he pragmatically admitted, although with a
cautionary undertone: “that judges do and must legislate, but they can do so only interstitially they are
confined from molar to molecular motions” (Southern Pacific Company vs. Jensen, 244 US 204 1917).
And in the subsequent case of Springer vs. Government (277 US 188, 210-212, 72 L.ed. 845, 852- 853),
Justice Holmes pronounced:
The great ordinances of the Constitution do not establish and divide fields of black and white. Even the
more specific of them are found to terminate in a penumbra shading gradually from one extreme to the
other. x x x. When we come to the fundamental distinctions it is still more obvious that they must be
received with a certain latitude or our government could not go on.

To make a rule of conduct applicable to an individual who but for such action would be free from it is to
legislate yet it is what the judges do whenever they determine which of two competing principles of
policy shall prevail.

xxx xxx xxx

It does not seem to need argument to show that however we may disguise it by veiling words we do not
and cannot carry out the distinction between legislative and executive action with mathematical
precision and divide the branches into waterlight compartments, were it ever so desirable to do so,
which I am far from believing that it is, or that the Constitution requires.

True, there are jurists and legal writers who affirm that judges should not legislate, but grudgingly
concede that in certain cases judges do legislate. They criticize the assumption by the courts of such law-
making power as dangerous for it may degenerate into Judicial tyranny. They include Blackstone, Jeremy
Bentham, Justice Black, Justice Harlan, Justice Roberts, Justice David Brewer, Ronald Dworkin, Rolf
Sartorious, Macklin Fleming and Beryl Harold Levy. But said Justices, jurists or legal commentators, who
either deny the power of the courts to legislate in-between gaps of the law, or decry the exercise of such
power, have not pointed to examples of the exercise by the courts of such law-making authority in the
interpretation and application of the laws in specific cases that gave rise to judicial tyranny or
oppression or that such judicial legislation has not protected public interest or individual welfare,
particularly the lowly workers or the underprivileged.

On the other hand, there are numerous decisions interpreting the Bill of Rights and statutory
enactments expanding the scope of such provisions to protect human rights. Foremost among them is
the doctrine in the cases of Miranda vs. Arizona (384 US 436 1964), Gideon vs. Wainright (372 US 335),
Escubedo vs. Illinois (378 US 478), which guaranteed the accused under custodial investigation his rights
to remain silent and to counsel and to be informed of such rights as even as it protects him against the
use of force or intimidation to extort confession from him. These rights are not found in the American
Bill of Rights. These rights are now institutionalized in Section 20, Article IV of the 1973 Constitution.
Only the peace-and-order adherents were critical of the activism of the American Supreme Court led by
Chief Justice Earl Warren.
Even the definition of Identical offenses for purposes of the double jeopardy provision was developed by
American judicial decisions, not by amendment to the Bill of Rights on double jeopardy (see Justice
Laurel in People vs. Tarok, 73 Phil. 260, 261-268). And these judicial decisions have been re-stated in
Section 7 of Rule 117 of the 1985 Rules on Criminal Procedure, as well as in Section 9 of Rule 117 of the
1964 Revised Rules of Court. In both provisions, the second offense is the same as the first offense if the
second offense is an attempt to commit the first or frustration thereof or necessarily includes or is
necessarily included in the first offense.

The requisites of double jeopardy are not spelled out in the Bill of Rights. They were also developed by
judicial decisions in the United States and in the Philippines even before People vs. Ylagan (58 Phil. 851-
853).

Again, the equal protection clause was interpreted in the case of Plessy vs. Ferguson (163 US 537) as
securing to the Negroes equal but separate facilities, which doctrine was revoked in the case of Brown
vs. Maryland Board of Education (349 US 294), holding that the equal protection clause means that the
Negroes are entitled to attend the same schools attended by the whites-equal facilities in the same
school-which was extended to public parks and public buses.

De-segregation, not segregation, is now the governing principle.

Among other examples, the due process clause was interpreted in the case of People vs. Pomar (46 Phil.
440) by a conservative, capitalistic court to invalidate a law granting maternity leave to working women-
according primacy to property rights over human rights. The case of People vs. Pomar is no longer the
rule.

As early as 1904, in the case of Lochner vs. New York (198 US 45, 76, 49 L. ed. 937, 949), Justice Holmes
had been railing against the conservatism of Judges perverting the guarantee of due process to protect
property rights as against human rights or social justice for the working man. The law fixing maximum
hours of labor was invalidated. Justice Holmes was vindicated finally in 1936 in the case of West Coast
Hotel vs. Parish (300 US 377-79; 81 L. ed. 703) where the American Supreme Court upheld the rights of
workers to social justice in the form of guaranteed minimum wage for women and minors, working
hours not exceeding eight (8) daily, and maternity leave for women employees.

The power of judicial review and the principle of separation of powers as well as the rule on political
questions have been evolved and grafted into the American Constitution by judicial decisions (Marbury
vs. Madison, supra Coleman vs. Miller, 307 US 433, 83 L. ed. 1385; Springer vs. Government, 277 US 210-
212, 72 L. ed. 852, 853).
It is noteworthy that Justice Black, who seems to be against judicial legislation, penned a separate
concurring opinion in the case of Coleman vs. Miller, supra, affirming the doctrine of political question
as beyond the ambit of judicial review. There is nothing in both the American and Philippine
Constitutions expressly providing that the power of the courts is limited by the principle of separation of
powers and the doctrine on political questions. There are numerous cases in Philippine jurisprudence
applying the doctrines of separation of powers and political questions and invoking American
precedents.

Unlike the American Constitution, both the 1935 and 1973 Philippine Constitutions expressly vest in the
Supreme Court the power to review the validity or constitutionality of any legislative enactment or
executive act.

WHEREFORE, THE TRIAL COURT’S ORDER OF DISMISSAL IS HEREBY REVERSED AND SET ASIDE AND THE
CASE IS REMANDED TO IT FOR FURTHER PROCEEDINGS. SHOULD A GREATER AMOUNT OF DAMAGES BE
DECREED IN FAVOR OF HEREIN PETITIONERS, THE PAYMENTS ALREADY MADE TO THEM PURSUANT TO
THE WORKMEN’S COMPENSATION ACT SHALL BE DEDUCTED. NO COSTS.

SO ORDERED.

Fernando, C.J., Teehankee, Plana, Escolin, De la Fuente, Cuevas and Alampay JJ., concur.

Concepcion, Jr., J., is on leave.

Abad Santos and Relova, JJ., took no part.

Footnote

1 SEC. 4-A. Right to additional compensation.- In case of the employee’s death, injury or sickness due to
the failure of the to comply with any law, or with any order, rule or regulation of the Workmen’s
Compensation Commission or the Bureau of Labor Standards or should the employer violate the
provisions of Republic Act Numbered Six hundred seventy-nine and its amendments or fail to install and
maintain safety appliances, or take other precautions for the prevention of accidents or occupational
disease, he shall be liable to pay an additional compensation equal to fifty per centum of the
compensation fixed in this Act.
READ CASE DIGEST HERE.

Justice Melencio-Herrera: Dissenting Opinion

Justice Gutierrez, Jr.: Dissenting Opinion

Republic of the Philippines

SUPREME COURT

Manila

EN BANC

G.R. No. 108763 February 13, 1997

REPUBLIC OF THE PHILIPPINES,

vs.

COURT OF APPEALS and RORIDEL OLAVIANO MOLINA, respondents.

PANGANIBAN, J.:

The Family Code of the Philippines provides an entirely new ground (in addition to those enumerated in
the Civil Code) to assail the validity of a marriage, namely, "psychological incapacity." Since the Code's
effectivity, our courts have been swamped with various petitions to declare marriages void based on this
ground. Although this Court had interpreted the meaning of psychological incapacity in the recent case
of Santos vs. Court of Appeals, still many judges and lawyers find difficulty in applying said novel
provision in specific cases. In the present case and in the context of the herein assailed Decision of the
Court of Appeals, the Solicitor General has labelled — exaggerated to be sure but nonetheless
expressive of his frustration — Article 36 as the "most liberal divorce procedure in the world." Hence,
this Court in addition to resolving the present case, finds the need to lay down specific guidelines in the
interpretation and application of Article 36 of the Family Code.

Before us is a petition for review on certiorari under Rule 45 challenging the January 25, 1993 Decision1
of the Court of Appeals2 in CA-G.R. CV No. 34858 affirming in toto the May 14, 1991 decision of the
Regional Trial Court of La Trinidad,3 Benguet, which declared the marriage of respondent Roridel
Olaviano Molina to Reynaldo Molina void ab initio, on the ground of "psychological incapacity" under
Article 36 of the Family Code.
The Facts

This case was commenced on August 16, 1990 with the filing by respondent Roridel O. Molina of a
verified petition for declaration of nullity of her marriage to Reynaldo Molina. Essentially, the petition
alleged that Roridel and Reynaldo were married on April 14, 1985 at the San Agustin Church4 in Manila;
that a son, Andre O. Molina was born; that after a year of marriage, Reynaldo showed signs of
"immaturity and irresponsibility" as a husband and a father since he preferred to spend more time with
his peers and friends on whom he squandered his money; that he depended on his parents for aid and
assistance, and was never honest with his wife in regard to their finances, resulting in frequent quarrels
between them; that sometime in February 1986, Reynaldo was relieved of his job in Manila, and since
then Roridel had been the sole breadwinner of the family; that in October 1986 the couple had a very
intense quarrel, as a result of which their relationship was estranged; that in March 1987, Roridel
resigned from her job in Manila and went to live with her parents in Baguio City; that a few weeks later,
Reynaldo left Roridel and their child, and had since then abandoned them; that Reynaldo had thus
shown that he was psychologically incapable of complying with essential marital obligations and was a
highly immature and habitually quarrel some individual who thought of himself as a king to be served;
and that it would be to the couple's best interest to have their marriage declared null and void in order
to free them from what appeared to be an incompatible marriage from the start.

In his Answer filed on August 28, 1989, Reynaldo admitted that he and Roridel could no longer live
together as husband and wife, but contended that their misunderstandings and frequent quarrels were
due to (1) Roridel's strange behavior of insisting on maintaining her group of friends even after their
marriage; (2) Roridel's refusal to perform some of her marital duties such as cooking meals; and (3)
Roridel's failure to run the household and handle their finances.

During the pre-trial on October 17, 1990, the following were stipulated:

1. That the parties herein were legally married on April 14, 1985 at the Church of St. Augustine,
Manila;

2. That out of their marriage, a child named Albert Andre Olaviano Molina was born on July 29,
1986;

3. That the parties are separated-in-fact for more than three years;
4. That petitioner is not asking support for her and her child;

5. That the respondent is not asking for damages;

6. That the common child of the parties is in the custody of the petitioner wife.

Evidence for herein respondent wife consisted of her own testimony and that of her friends Rosemarie
Ventura and Maria Leonora Padilla as well as of Ruth G. Lalas, a social worker, and of Dr. Teresita
Hidalgo-Sison, a psychiatrist of the Baguio General Hospital and Medical Center. She also submitted
documents marked as Exhibits "A" to "E-1." Reynaldo did not present any evidence as he appeared only
during the pre-trial conference.

On May 14, 1991, the trial court rendered judgment declaring the marriage void. The appeal of
petitioner was denied by the Court of Appeals which affirmed in toto the RTC's decision. Hence, the
present recourse.

The Issue

In his petition, the Solicitor General insists that "the Court of Appeals made an erroneous and incorrect
interpretation of the phrase 'psychological incapacity' (as provided under Art. 36 of the Family Code)
and made an incorrect application thereof to the facts of the case," adding that the appealed Decision
tended "to establish in effect the most liberal divorce procedure in the world which is anathema to our
culture."

In denying the Solicitor General's appeal, the respondent Court relied5 heavily on the trial court's
findings "that the marriage between the parties broke up because of their opposing and conflicting
personalities." Then, it added it sown opinion that "the Civil Code Revision Committee (hereinafter
referred to as Committee) intended to liberalize the application of our civil laws on personal and family
rights. . . ." It concluded that:

As ground for annulment of marriage, We view psychologically incapacity as a broad range of mental
and behavioral conduct on the part of one spouse indicative of how he or she regards the marital union,
his or her personal relationship with the other spouse, as well as his or her conduct in the long haul for
the attainment of the principal objectives of marriage. If said conduct, observed and considered as a
whole, tends to cause the union to self-destruct because it defeats the very objectives of marriage, then
there is enough reason to leave the spouses to their individual fates.

In the case at bar, We find that the trial judge committed no indiscretion in analyzing and deciding the
instant case, as it did, hence, We find no cogent reason to disturb the findings and conclusions thus
made.

Respondent, in her Memorandum, adopts these discussions of the Court of Appeals.

The petitioner, on the other hand, argues that "opposing and conflicting personalities" is not equivalent
to psychological incapacity, explaining that such ground "is not simply the neglect by the parties to the
marriage of their responsibilities and duties, but a defect in their psychological nature which renders
them incapable of performing such marital responsibilities and duties."

The Court's Ruling

The petition is meritorious.

In Leouel Santos vs. Court of Appeals6 this Court, speaking thru Mr. Justice Jose C. Vitug, ruled that
"psychological incapacity should refer to no less than a mental (nor physical) incapacity . . . and that
(t)here is hardly any doubt that the intendment of the law has been to confine the meaning of
'psychological incapacity' to the most serious cases of personality disorders clearly demonstrative of an
utter insensitivity or inability to give meaning and significance to the marriage. This psychologic
condition must exist at the time the marriage is celebrated." Citing Dr. Gerardo Veloso, a former
presiding judge of the Metropolitan Marriage Tribunal of the Catholic Archdiocese of Manila,7 Justice
Vitug wrote that "the psychological incapacity must be characterized by (a) gravity, (b) juridical
antecedence, and (c) incurability."

On the other hand, in the present case, there is no clear showing to us that the psychological defect
spoken of is an incapacity. It appears to us to be more of a "difficulty," if not outright "refusal" or
"neglect" in the performance of some marital obligations. Mere showing of "irreconciliable differences"
and "conflicting personalities" in no wise constitutes psychological incapacity. It is not enough to prove
that the parties failed to meet their responsibilities and duties as married persons; it is essential that
they must be shown to be incapable of doing so, due to some psychological (nor physical) illness.
The evidence adduced by respondent merely showed that she and her husband could nor get along with
each other. There had been no showing of the gravity of the problem; neither its juridical antecedence
nor its incurability. The expert testimony of Dr. Sison showed no incurable psychiatric disorder but only
incompatibility, not psychological incapacity. Dr. Sison testified:8

COURT

Q It is therefore the recommendation of the psychiatrist based on your findings that it is better for
the Court to annul (sic) the marriage?

A Yes, Your Honor.

Q There is no hope for the marriage?

A There is no hope, the man is also living with another woman.

Q Is it also the stand of the psychiatrist that the parties are psychologically unfit for each other but
they are psychologically fit with other parties?

A Yes, Your Honor.

Q Neither are they psychologically unfit for their professions?

A Yes, Your Honor.

The Court has no more questions.

In the case of Reynaldo, there is no showing that his alleged personality traits were constitutive of
psychological incapacity existing at the time of marriage celebration. While some effort was made to
prove that there was a failure to fulfill pre-nuptial impressions of "thoughtfulness and gentleness" on
Reynaldo's part of being "conservative, homely and intelligent" on the part of Roridel, such failure of
expectation is nor indicative of antecedent psychological incapacity. If at all, it merely shows love's
temporary blindness to the faults and blemishes of the beloved.

During its deliberations, the Court decided to go beyond merely ruling on the facts of this case vis-a-vis
existing law and jurisprudence. In view of the novelty of Art. 36 of the Family Code and the difficulty
experienced by many trial courts interpreting and applying it, the Court decided to invite two amici
curiae, namely, the Most Reverend Oscar V. Cruz,9 Vicar Judicial (Presiding Judge) of the National
Appellate Matrimonial Tribunal of the Catholic Church in the Philippines, and Justice Ricardo C. Puno, 10
a member of the Family Code Revision Committee. The Court takes this occasion to thank these friends
of the Court for their informative and interesting discussions during the oral argument on December 3,
1996, which they followed up with written memoranda.

From their submissions and the Court's own deliberations, the following guidelines in the interpretation
and application of Art. 36 of the Family Code are hereby handed down for the guidance of the bench
and the bar:

(1) The burden of proof to show the nullity of the marriage belongs to the plaintiff. Any doubt
should be resolved in favor of the existence and continuation of the marriage and against its dissolution
and nullity. This is rooted in the fact that both our Constitution and our laws cherish the validity of
marriage and unity of the family. Thus, our Constitution devotes an entire Article on the Family, 11
recognizing it "as the foundation of the nation." It decrees marriage as legally "inviolable," thereby
protecting it from dissolution at the whim of the parties. Both the family and marriage are to be
"protected" by the state.

The Family Code 12 echoes this constitutional edict on marriage and the family and emphasizes the
permanence, inviolability and solidarity

(2) The root cause of the psychological incapacity must be (a) medically or clinically identified, (b)
alleged in the complaint, (c) sufficiently proven by experts and (d) clearly explained in the decision.
Article 36 of the Family Code requires that the incapacity must be psychological — not physical.
although its manifestations and/or symptoms may be physical. The evidence must convince the court
that the parties, or one of them, was mentally or physically ill to such an extent that the person could
not have known the obligations he was assuming, or knowing them, could not have given valid
assumption thereof. Although no example of such incapacity need be given here so as not to limit the
application of the provision under the principle of ejusdem generis, 13 nevertheless such root cause
must be identified as a psychological illness and its incapacitating nature explained. Expert evidence may
be given qualified psychiatrist and clinical psychologists.
(3) The incapacity must be proven to be existing at "the time of the celebration" of the marriage.
The evidence must show that the illness was existing when the parties exchanged their "I do's." The
manifestation of the illness need not be perceivable at such time, but the illness itself must have
attached at such moment, or prior thereto.

(4) Such incapacity must also be shown to be medically or clinically permanent or incurable. Such
incurability may be absolute or even relative only in regard to the other spouse, not necessarily
absolutely against everyone of the same sex. Furthermore, such incapacity must be relevant to the
assumption of marriage obligations, not necessarily to those not related to marriage, like the exercise of
a profession or employment in a job. Hence, a pediatrician may be effective in diagnosing illnesses of
children and prescribing medicine to cure them but may not be psychologically capacitated to procreate,
bear and raise his/her own children as an essential obligation of marriage.

(5) Such illness must be grave enough to bring about the disability of the party to assume the
essential obligations of marriage. Thus, "mild characteriological peculiarities, mood changes, occasional
emotional outbursts" cannot be accepted as root causes. The illness must be shown as downright
incapacity or inability, nor a refusal, neglect or difficulty, much less ill will. In other words, there is a
natal or supervening disabling factor in the person, an adverse integral element in the personality
structure that effectively incapacitates the person from really accepting and thereby complying with the
obligations essential to marriage.

(6) The essential marital obligations must be those embraced by Articles 68 up to 71 of the Family
Code as regards the husband and wife as well as Articles 220, 221 and 225 of the same Code in regard to
parents and their children. Such non-complied marital obligation(s) must also be stated in the petition,
proven by evidence and included in the text of the decision.

(7) Interpretations given by the National Appellate Matrimonial Tribunal of the Catholic Church in
the Philippines, while not controlling or decisive, should be given great respect by our courts. It is clear
that Article 36 was taken by the Family Code Revision Committee from Canon 1095 of the New Code of
Canon Law, which became effective in 1983 and which provides:

The following are incapable of contracting marriage: Those who are unable to assume the essential
obligations of marriage due to causes of psychological nature. 14

Since the purpose of including such provision in our Family Code is to harmonize our civil laws with the
religious faith of our people, it stands to reason that to achieve such harmonization, great persuasive
weight should be given to decision of such appellate tribunal. Ideally — subject to our law on evidence
— what is decreed as canonically invalid should also be decreed civilly void.
This is one instance where, in view of the evident source and purpose of the Family Code provision,
contemporaneous religious interpretation is to be given persuasive effect. Here, the State and the
Church — while remaining independent, separate and apart from each other — shall walk together in
synodal cadence towards the same goal of protecting and cherishing marriage and the family as the
inviolable base of the nation.

(8) The trial court must order the prosecuting attorney or fiscal and the Solicitor General to appear
as counsel for the state. No decision shall he handed down unless the Solicitor General issues a
certification, which will be quoted in the decision, briefly staring therein his reasons for his agreement or
opposition, as the case may be, to the petition. The Solicitor General, along with the prosecuting
attorney, shall submit to the court such certification within fifteen (15) days from the date the case is
deemed submitted for resolution of the court. The Solicitor General shall discharge the equivalent
function of the defensor vinculi contemplated under Canon 1095.

In the instant case and applying Leouel Santos, we have already ruled to grant the petition. Such ruling
becomes even more cogent with the use of the foregoing guidelines.

WHEREFORE, the petition is GRANTED. The assailed Decision is REVERSED and SET ASIDE. The marriage
of Roridel Olaviano to Reynaldo Molina subsists and remains valid.

SO ORDERED.

Narvasa, C.J., Davide, Jr., Bellosillo, Melo, Puno Francisco, Hermosisima, Jr., and Torres, Jr., JJ., concur.

Regalado, Kapunan and Mendoza, JJ., concurs in the result.

Separate Opinions
PADILLA, J., concuring opinion:

I concur in the result of the decision penned by Mr. Justice Panganiban but only because of the peculiar
facts of the case. As to whether or not the psychological incapacity exists in a given case calling for
annulment of a marriage, depends crucially, more than in any field of the law, on the facts of the case. In
Leouel Santos v. Court of Appeals and Julia Rosario-Bedia Santos, G.R. No. 112019, 4 January 1995, 240
SCRA 20-36, I maintained, and I still maintain, that there was psychological incapacity on the part of the
wife to discharge the duties of a wife in a valid marriage. The facts of the present case, after an indepth
study, do not support a similar conclusion. Obviously, each case must be judged, not on the basis of a
priori assumptions, predilections or generalizations but according to its own facts. In the field of
psychological incapacity as a ground for annulment of marriage, it is trite to say that no case is on "all
fours" with another case. The trial judge must take pains in examining the actual millieu and the
appellate court must, as much as possible, avoid substituting its own judgment for that of the trial court.

ROMERO, J., separate opinion:

The majority opinion, overturning that of the Court of Appeals which affirmed the Regional Trial Court
ruling. upheld petitioner Solicitor General's position that "opposing and conflicting personalities" is not
equivalent to psychological incapacity, for the latter "is not simply the neglect by the parties to the
marriage of their responsibilities and duties, but a defect in their Psychological nature which renders
them incapable of performing such marital responsibilities and duties.

In the present case, the alleged personality traits of Reynaldo, the husband, did not constitute so much
"psychological incapacity" as a "difficulty," if not outright "refusal" or "neglect" in the performance of
some marital obligations. "It is not enough to prove that the parties failed to meet their responsibilities
and duties as married persons; it is essential that they must be shown to be incapable of doing so, due
to some psychological (not physical) illness."

I would add that neither should the incapacity be the result of mental illness. For if it were due to
insanity or defects in the mental faculties short of insanity, there is a resultant defect of vice of consent,
thus rendering the marriage annulable under Art. 45 of the Family Code.

That the intent of the members of the U.P. Law Center's Civil Code Revision Committee was to exclude
mental inability to understand the essential nature of marriage and focus strictly on psychological
incapacity is demonstrated in the way the provision in question underwent revisions.
At the Committee meeting of July 26, 1986, the draft provision read:

(7) Those marriages contracted by any party who, at the time of the celebration, was wanting in the
sufficient use of reason or judgment to understand the essential nature of marriage or was
psychologically or mentally incapacitated to discharge the essential marital obligations, even if such lack
of incapacity is made manifest after the celebration.

The twists and turns which the ensuing discussion took finally produced the following revised provision
even before the session was over:

(7) That contracted by any party who, at the time of the celebration, was psychologically
incapacitated to discharge the essential marital obligations, even if such lack or incapacity becomes
manifest after the celebration.

Noticeably, the immediately preceding formulation above has dropped any reference to "wanting in the
sufficient use of reason or judgment to understand the essential nature or marriage" and to "mentally
incapacitated." It was explained that these phrases refer to "defects in the mental faculties vitiating
consent, which is not the idea . . . but lack of appreciation of one's marital obligation." There being a
defect in consent, "it is clear that it should be a ground for voidable marriage because there is the
appearance of consent and it is capable of convalidation for the simple reason that there are lucid
intervals and there are sanity is curable. . . . Psychological incapacity does not refer to mental faculties
and has nothing to do with consent; it refers to obligations attendant to

marriage."1

My own position as a member of the Committee then was that psychological incapacity is, in a sense,
insanity of a lesser degree.

As to the proposal of Justice Caguioa to use the term "psychological or mental impotence," Archbishop
Oscar Cruz opined in he earlier February 9, 1984 session that this term "is an invention of some
churchmen who are moralists but not canonists, that is why it is considered a weak phrase." He said that
the Code of Canon Law would rather express it as "psychological or mental incapacity to discharge. . . ."
Justice Ricardo C. Puno opined that sometimes a person may be psychologically impotent with one but
not with another.

One of the guidelines enumerated in the majority opinion for the interpretation and application of Art.
36 is: "Such incapacity must also be shown to be medically or clinically permanent or incurable. Such
incurability may be absolute or even relative only in regard to the other spouse, not necessarily
absolutely against everyone of the same sex."

The Committee, through Prof. Araceli T. Barrera, considered the inclusion of the phrase" and is
incurable" but Prof. Esteban B. Bautista commented that this would give rise to the question of how
they will determine curability and Justice Caguioa agreed that it would be more problematic. Yet the
possibility that one may be cured after the psychological incapacity becomes manifest after the
marriage was not ruled out by Justice Puno and Justice Alice Sempio-Diy. Justice Caguioa suggested that
the remedy was to allow the afflicted spouse to remarry.

For clarity, the Committee classified the bases for determining void marriages, viz:

1. lack of one or more of the essential requisites of marriage as contract;

2. reasons of public policy;

3. special cases and special situations.

The ground of psychological incapacity was subsumed under "special cases and special situations,"
hence its special treatment in Art. 36 in the Family Code as finally enacted.

Nowhere in the Civil Code provisions on Marriage is there a ground for avoiding or annulling marriages
that even comes close to being psychological in nature.

Where consent is vitiated due to circumstances existing at the time of the marriage, such marriage
which stands valid until annulled is capable of ratification or convalidation.

On the other hand, for reasons of public policy or lack of essential requisites, some marriages are void
from the beginning.

With the revision of Book I of the Civil Code, particularly the provisions on Marriage, the drafters, now
open to fresh winds of change in keeping with the more permissive mores and practices of the time,
took a leaf from the relatively liberal provisions of Canon Law.
Canon 1095 which states, inter alia, that the following persons are incapable of contracting marriage: "3.
(those) who, because of causes of a psychological nature, are unable to assume the essential obligations
of marriage" provided the model for what is now Art. 36 of the Family Code: "A marriage contracted by
any party who, at the time of the celebration, was psychologically incapacitated to comply with the
essential marital obligations of marriage, shall likewise be void even if such incapacity becomes manifest
only after its solemnization.

It bears stressing that unlike in Civil Law, Canon Law recognizes only two types of marriages with respect
to their validity: valid and void. Civil Law, however, recognizes an intermediate state, the voidable or
annullable marriages. When the Ecclesiastical Tribunal "annuls" a marriage, it actually declares the
marriage null and void, i.e., it never really existed in the first place, for a valid sacramental marriage can
never be dissolved. Hence, a properly performed and consummated marriage between two living
Roman Catholics can only be nullified by the formal annulment process which entails a full tribunal
procedure with a Court selection and a formal hearing.

Such so-called church "annulments" are not recognized by Civil Law as severing the marriage ties as to
capacitate the parties to enter lawfully into another marriage. The grounds for nullifying civil marriage,
not being congruent with those laid down by Canon Law, the former being more strict, quite a number
of married couples have found themselves in limbo — freed from the marriage bonds in the eyes of the
Catholic Church but yet unable to contract a valid civil marriage under state laws. Heedless of civil law
sanctions, some persons contract new marriages or enter into live-in relationships.

It was precisely to provide a satisfactory solution to such anomalous situations that the Civil Law
Revision Committee decided to engraft the Canon Law concept of psychological incapacity into the
Family Code — and classified the same as a ground for declaring marriages void ab initio or totally in
existent from the beginning.

A brief historical note on the Old Canon Law (1917). This Old Code, while it did not provide directly for
psychological incapacity, in effect recognized the same indirectly from a combination of three old
canons: "Canon #1081 required persons to 'be capable according to law' in order to give valid consent;
Canon #1082 required that persons 'be at least not ignorant' of the major elements required in
marriage; and Canon #1087 (the force and fear category) required that internal and external freedom be
present in order for consent to be valid. This line of interpretation produced two distinct but related
grounds for annulment, called 'lack of due discretion' and 'lack of due competence.' Lack of due
discretion means that the person did not have the ability to give valid consent at the time of the
wedding and therefore the union is invalid. Lack of due competence means that the person was
incapable of carrying out the obligations of the promise he or she made during the wedding ceremony.
"Favorable annulment decisions by the Roman Rota in the 1950s and 1960s involving sexual disorders
such as homosexuality and nymphomania laid the foundation for a broader approach to the kind of
proof necessary for psychological grounds for annulment. The Rota had reasoned for the first time in
several cases that the capacity to give valid consent at the time of marriage was probably not present in
persons who had displayed such problems shortly after the marriage. The nature of this change was
nothing short of revolutionary. Once the Rota itself had demonstrated a cautious willingness to use this
kind of hindsight, the way was paved for what came after 1970. Diocesan Tribunals began to accept
proof of serious psychological problems that manifested themselves shortly after the ceremony as proof
of an inability to give valid consent at the time of the ceremony.

Furthermore, and equally significant, the professional opinion of a psychological expert became
increasingly important in such cases. Data about the person's entire life, both before and after the
ceremony, were presented to these experts and they were asked to give professional opinions about a
party's mental at the time of the wedding. These opinions were rarely challenged and tended to be
accepted as decisive evidence of lack of valid consent.

The Church took pains to point out that its new openness in this area did not amount to the addition of
new grounds for annulment, but rather was an accommodation by the Church to the advances made in
psychology during the past decades. There was now the expertise to provide the all-important
connecting link between a marriage breakdown and premarital causes.

During the 1970s, the Church broadened its whole idea of marriage from that of a legal contract to that
of a covenant. The result of this was that it could no longer be assumed in annulment cases that a
person who could intellectually understand the concept of marriage could necessarily give valid consent
to marry. The ability to both grasp and assume the real obligations of a mature, lifelong commitment are
now considered a necessary prerequisite to valid matrimonial consent.2

Rotal decisions continued applying the concept of incipient psychological incapacity, "not only to sexual
anomalies but to all kinds of personality disorders that incapacitate a spouse or both spouses from
assuming or carrying out the essential obligations of marriage. For marriage . . . is not merely
cohabitation or the right of the spouses to each others' body for heterosexual acts, but is, in its totality,
the right to the community of the whole of life, i.e., the right to a developing. lifelong relationship. Rotal
decisions since 1973 have refined the meaning of psychological or psychic capacity for marriage as
presupposing the development of an adult personality; as meaning the capacity of the spouses to give
themselves to each other and to accept the other as a distinct person; that the spouses must be 'other
oriented' since the obligations of marriage are rooted in a self-giving love; and that the spouses must
have the capacity for interpersonal relationship because marriage is more than just a physical reality but
involves a true intertwining of personalities. The fulfillment of the obligations of marriage depends.
according to Church decisions, on the strength of this interpersonal relationship. A serious incapacity for
interpersonal sharing and support is held to impair the relationship and consequently, the ability to
fulfill the essential marital obligations. The marital capacity of one spouse is not considered in isolation
but in reference to the fundamental relationship to the other spouse.3

Fr. Green, in an article in Catholic Mind, lists six elements necessary to the mature marital relationship:

The courts consider the following elements crucial to the marital commitment: (1) a permanent and
faithful commitment to the marriage partner; (2) openness to children and partner; (3) stability; (4)
emotional maturity; (5) financial responsibility; (6) an ability to cope with the ordinary stresses and
strains of marriage, etc.

Fr. Green goes on to speak about some of the psychological conditions that might lead to the failure of a
marriage:

At stake is a type of constitutional impairment precluding conjugal communion even with the best
intentions of the parties. Among the psychic factors possibly giving rise to his or her inability to fulfill
marital obligations are the following: (1) antisocial personality with its fundamental lack of loyalty to
persons or sense of moral values; (2) hyperesthesia, where the individual has no real freedom of sexual
choice; (3) the inadequate personality where personal responses consistently fallshort of reasonable
expectations.

xxx xxx xxx

The psychological grounds are the best approach for anyone who doubts whether he or she has a case
for an annulment on any other terms. A situation that does not fit into any of the more traditional
categories often fits very easily into the psychological category.

As new as the psychological grounds are, experts are already detecting a shift in their use. Whereas
originally the emphasis was on the parties' inability to exercise proper judgment at the time of the
marriage (lack of due discretion), recent cases seem to be concentrating on the parties' to assume or
carry out their responsibilities an obligations as promised (lack of due competence). An advantage to
using the ground of lack of due competence is that the at the time the marriage was entered into civil
divorce and breakup of the family almost is of someone's failure out marital responsibilities as promised
at the time the marriage was entered into.4
In the instant case, "opposing and conflicting personalities" of the spouses were not considered
equivalent to psychological incapacity. As well in Santos v. Court of Appeals cited in the ponencia, the
Court held that the failure of the wife to return home from the U.S. or to communicate with her
husband for more then five years is not proof of her psychological incapacity as to render the marriage a
nullity.5 Therefore, Art. 36 is inapplicable and the marriages remain valid and subsisting.

However in the recent case of Chi Ming Tsoi v. Court of Appeals,6 this Court upheld both the Regional
Trial Court and the Court of Appeals in declaring the presence of psychological incapacity on the part of
the husband. Said petitioner husband, after ten (10) months' sleeping with his wife never had coitus
with her, a fact he did not deny but he alleged that it was due to the physical disorder of his wife which,
however, he failed to prove. Goaded by the indifference and stubborn refusal of her husband to fulfill a
basic marital obligation described as "to procreate children based on the universal principle that
procreation of children through sexual cooperation is the basic end of marriage," the wife brought the
action in the lower court to declare the marriage null.

The Court, quoting Dr. Gerardo Veloso, a former Presiding Judge of the Metropolitan Marriage Tribunal
of the Catholic Archdiocese of Manila (Branch I) on Psychological incapacity concluded:

If a spouse, although physically capable but simply refuses to perform his or her essential marriage
obligations, and the refusal is senseless and constant, Catholic marriage tribunals attribute the causes to
psychological incapacity than to stubborn refusal. Senseless and protracted refusal is equivalent to
psychological incapacity. Thus, the prolonged refusal of a spouse to have sexual intercourse with his or
her spouse is considered a sign of psychological incapacity.

We declared:

This Court, finding the gravity of the failed relationship in which the parties found themselves trapped in
its mire of unfulfilled vows and unconsummated marital obligations, can do no less but sustain the
studied judgment of respondent appellate court.

1 concur with the majority opinion that the herein marriage remains valid and subsisting absent
psychological incapacity (under Art. 36 of the Family Code) on the part of either or both of the spouses.
VITUG, J., concurring:

I fully concur with my esteemed 'colleague Mr. Justice Artemio V. Panganiban in his ponencia, and I find
to be most helpful the guidelines that he prepared for the bench and the bar in the proper appreciation
of Article 36 of Executive Order No. 209 ("The Family Code of the Philippines"). The term "psychological
incapacity" was neither defined nor exemplified by the Family Code. Thus —

Art. 36. A marriage contracted by any party who, at the time of the celebration, was psychologically
incapacitated to comply with the essential marital obligations of marriage, shall likewise be void even if
such incapacity becomes manifest only after its solemnization.

The Revision Committee, constituted under the auspices of the U.P. Law Center, which drafted the Code
explained:

(T)he Committee would like the judge to interpret the provision on a case-to-case basis, guided by
experience, the findings of experts and researchers in psychological disciplines, and by decisions of
church tribunals which, although not binding on the civil courts, may be given persuasive effect since the
provision was taken from Canon Law.1

Article 36 of the Family Code was concededly taken from Canon 1095 of the New Code of Canon Law —

Canon 1095. (The following persons) are incapable of contracting marriage; (those) —

1. who lack sufficient use of reason;

2. who suffer from a grave defect of discretion of judgment concerning essential matrimonial
rights and duties, to be given and accepted mutually;

3. who for causes of psychological nature are unable to assume the essential obligations of
marriage —

that should give that much value to Canon Law jurisprudence as an aid to the interpretation and
construction of the statutory enactment.2
The principles in the proper application of the law teach us that the several provisions of a Code must be
read like a congruent whole. Thus, in determining the import of "psychological incapacity" under Article
36, one must also read it along with, albeit to be taken as distinct from, the other grounds enumerated
in the Code, like Articles 35, 37, 38 and 41 that would likewise, but for distinct reasons, render the
marriage merely voidable, or Article 55 that could justify a petition for legal separation. Care must be
observed so that these various circumstances are not applied so indiscriminately as if the law were
indifferent on the matter.

I would wish to reiterate the Court's' statement in Santos vs. Court of Appeals;3 viz:

(T)he use of the phrase "psychological incapacity" under Article 36 of the Code has not been meant to
comprehend all such possible cases of psychoses as, likewise mentioned by some ecclesiastical
authorities, extremely low intelligence, immaturity, and like circumstances. . . Article 36 of the Family
Code cannot be taken and construed independently of, but must stand in conjunction with, existing
precepts in our law on marriage. Thus correlated, "psychological incapacity" should refer to no less than
a mental (not physical) incapacity that causes a party to be truly incognitive of the basic marital
covenants that concomitantly must be assumed and discharged by the parties to the marriage which, as
so expressed by Article 68 of the Family Code, include their mutual obligations to live together, observe
love, respect and fidelity and render help and support. There is hardly any doubt that the intendment of
the law has been to confine the meaning of "psychological incapacity" to the most serious cases of
personality disorders clearly demonstrative of an utter insensitivity or inability of the spouse to have
sexual relations with the other. This conclusion is implicit under Article 54 of the Family Code which
considers children conceived prior to the judicial declaration of nullity of the void marriage to be
"legitimate."

The other forms of psychoses, if existing at the inception of marriage, like the state of a party being of
unsound mind or concealment of drug addiction, habitual alcoholism, homosexuality or lesbianism,
merely renders the marriage contract voidable pursuant to Article 46, Family Code. If drug addiction,
habitual alcoholism, lesbianism or homosexuality should occur only during the marriage, they become
mere grounds for legal separation under Article 55 of the Family Code. These provisions of the Code,
however, do not necessarily preclude the possibility of these various circumstances being themselves,
depending on the degree and severity of the disorder, indicia of psychological

incapacity.4

In fine, the term "psychological incapacity," to be a ground for then nullity of marriage under Article 36
of the Family Code, must be able to pass the following tests; viz:
First, the incapacity must be psychological or mental, not physical, in nature;

Second, the psychological incapacity must relate to the inability, not mere refusal, to understand,
assume end discharge the basic marital obligations of living together, observing love, respect and fidelity
and rendering mutual help and support;

Third, the psychologic condition must exist at the time the marriage is contracted although its overt
manifestations and the marriage may occur only thereafter; and

Fourth, the mental disorder must be grave or serious and incurable.

It may well be that the Family Code Revision Committee has envisioned Article 36, as not a few
observers would suspect, as another form of absolute divorce or, as still others would also put it, to be a
alternative to divorce; however, the fact still remains that the language of the law has failed to carry out,
even if true, any such intendment. It might have indeed turned out for the better, if it were otherwise,
there could be good reasons to doubt the constitutionality of the measure. The fundamental law itself,
no less, has laid down in terse language its unequivocal command on how the State should regard
marriage and the family, thus —

Section 2, Article XV:

Sec. 2. Marriage, as an inviolable social institution, is the foundation of the family and shall be
protected by the State.

Section 12, Article II:

Sec. 12. The State recognizes the sanctity of family life and shall protect and strengthen the family as a
basic autonomous social institution . . . .

Section 1, Article XV:

Sec. 1. The State recognizes the Filipino family as the foundation of the nation. Accordingly, it shall
strengthen its solidarity and actively promote its total development. (The 1987 Constitution)
The case of Marcelino vs. Cruz, 121 SCRA 51, might here be significant not so much for the specific issue
there resolved but for the tone it has set. The Court there has held that constitutional provisions are to
be considered mandatory unless by necessary implication, a different intention is manifest such that to
have them enforced strictly would cause more harm than by disregarding them. It is quite clear to me
that the constitutional mandate on marriage and the family has not been meant to be simply directory
in character, nor for mere expediency or convenience, but one that demands a meaningful, not half-
hearted, respect.

Separate Opinions

PADILLA, J., concuring opinion:

I concur in the result of the decision penned by Mr. Justice Panganiban but only because of the peculiar
facts of the case. As to whether or not the psychological incapacity exists in a given case calling for
annulment of a marriage, depends crucially, more than in any field of the law, on the facts of the case. In
Leouel Santos v. Court of Appeals and Julia Rosario-Bedia Santos, G.R. No. 112019, 4 January 1995, 240
SCRA 20-36, I maintained, and I still maintain, that there was psychological incapacity on the part of the
wife to discharge the duties of a wife in a valid marriage. The facts of the present case, after an indepth
study, do not support a similar conclusion. Obviously, each case must be judged, not on the basis of a
priori assumptions, predilections or generalizations but according to its own facts. In the field of
psychological incapacity as a ground for annulment of marriage, it is trite to say that no case is on "all
fours" with another case. The trial judge must take pains in examining the actual millieu and the
appellate court must, as much as possible, avoid substituting its own judgment for that of the trial court.

ROMERO, J., separate opinion:

The majority opinion, overturning that of the Court of Appeals which affirmed the Regional Trial Court
ruling. upheld petitioner Solicitor General's position that "opposing and conflicting personalities" is not
equivalent to psychological incapacity, for the latter "is not simply the neglect by the parties to the
marriage of their responsibilities and duties, but a defect in their Psychological nature which renders
them incapable of performing such marital responsibilities and duties.

In the present case, the alleged personality traits of Reynaldo, the husband, did not constitute so much
"psychological incapacity" as a "difficulty," if not outright "refusal" or "neglect" in the performance of
some marital obligations. "It is not enough to prove that the parties failed to meet their responsibilities
and duties as married persons; it is essential that they must be shown to be incapable of doing so, due
to some psychological (not physical) illness."

I would add that neither should the incapacity be the result of mental illness. For if it were due to
insanity or defects in the mental faculties short of insanity, there is a resultant defect of vice of consent,
thus rendering the marriage annulable under Art. 45 of the Family Code.

That the intent of the members of the U.P. Law Center's Civil Code Revision Committee was to exclude
mental inability to understand the essential nature of marriage and focus strictly on psychological
incapacity is demonstrated in the way the provision in question underwent revisions.

At the Committee meeting of July 26, 1986, the draft provision read:

(7) Those marriages contracted by any party who, at the time of the celebration, was wanting in the
sufficient use of reason or judgment to understand the essential nature of marriage or was
psychologically or mentally incapacitated to discharge the essential marital obligations, even if such lack
of incapacity is made manifest after the celebration.

The twists and turns which the ensuing discussion took finally produced the following revised provision
even before the session was over:

(7) That contracted by any party who, at the time of the celebration, was psychologically
incapacitated to discharge the essential marital obligations, even if such lack or incapacity becomes
manifest after the celebration.

Noticeably, the immediately preceding formulation above has dropped any reference to "wanting in the
sufficient use of reason or judgment to understand the essential nature or marriage" and to "mentally
incapacitated." It was explained that these phrases refer to "defects in the mental faculties vitiating
consent, which is not the idea . . . but lack of appreciation of one's marital obligation." There being a
defect in consent, "it is clear that it should be a ground for voidable marriage because there is the
appearance of consent and it is capable of convalidation for the simple reason that there are lucid
intervals and there are sanity is curable. . . . Psychological incapacity does not refer to mental faculties
and has nothing to do with consent; it refers to obligations attendant to

marriage."1
My own position as a member of the Committee then was that psychological incapacity is, in a sense,
insanity of a lesser degree.

As to the proposal of Justice Caguioa to use the term "psychological or mental impotence," Archbishop
Oscar Cruz opined in he earlier February 9, 1984 session that this term "is an invention of some
churchmen who are moralists but not canonists, that is why it is considered a weak phrase." He said that
the Code of Canon Law would rather express it as "psychological or mental incapacity to discharge. . . ."
Justice Ricardo C. Puno opined that sometimes a person may be psychologically impotent with one but
not with another.

One of the guidelines enumerated in the majority opinion for the interpretation and application of Art.
36 is: "Such incapacity must also be shown to be medically or clinically permanent or incurable. Such
incurability may be absolute or even relative only in regard to the other spouse, not necessarily
absolutely against everyone of the same sex."

The Committee, through Prof. Araceli T. Barrera, considered the inclusion of the phrase" and is
incurable" but Prof. Esteban B. Bautista commented that this would give rise to the question of how
they will determine curability and Justice Caguioa agreed that it would be more problematic. Yet the
possibility that one may be cured after the psychological incapacity becomes manifest after the
marriage was not ruled out by Justice Puno and Justice Alice Sempio-Diy. Justice Caguioa suggested that
the remedy was to allow the afflicted spouse to remarry.

For clarity, the Committee classified the bases for determining void marriages, viz:

1. lack of one or more of the essential requisites of marriage as contract;

2. reasons of public policy;

3. special cases and special situations.

The ground of psychological incapacity was subsumed under "special cases and special situations,"
hence its special treatment in Art. 36 in the Family Code as finally enacted.
Nowhere in the Civil Code provisions on Marriage is there a ground for avoiding or annulling marriages
that even comes close to being psychological in nature.

Where consent is vitiated due to circumstances existing at the time of the marriage, such marriage
which stands valid until annulled is capable of ratification or convalidation.

On the other hand, for reasons of public policy or lack of essential requisites, some marriages are void
from the beginning.

With the revision of Book I of the Civil Code, particularly the provisions on Marriage, the drafters, now
open to fresh winds of change in keeping with the more permissive mores and practices of the time,
took a leaf from the relatively liberal provisions of Canon Law.

Canon 1095 which states, inter alia, that the following persons are incapable of contracting marriage: "3.
(those) who, because of causes of a psychological nature, are unable to assume the essential obligations
of marriage" provided the model for what is now Art. 36 of the Family Code: "A marriage contracted by
any party who, at the time of the celebration, was psychologically incapacitated to comply with the
essential marital obligations of marriage, shall likewise be void even if such incapacity becomes manifest
only after its solemnization.

It bears stressing that unlike in Civil Law, Canon Law recognizes only two types of marriages with respect
to their validity: valid and void. Civil Law, however, recognizes an intermediate state, the voidable or
annullable marriages. When the Ecclesiastical Tribunal "annuls" a marriage, it actually declares the
marriage null and void, i.e., it never really existed in the first place, for a valid sacramental marriage can
never be dissolved. Hence, a properly performed and consummated marriage between two living
Roman Catholics can only be nullified by the formal annulment process which entails a full tribunal
procedure with a Court selection and a formal hearing.

Such so-called church "annulments" are not recognized by Civil Law as severing the marriage ties as to
capacitate the parties to enter lawfully into another marriage. The grounds for nullifying civil marriage,
not being congruent with those laid down by Canon Law, the former being more strict, quite a number
of married couples have found themselves in limbo — freed from the marriage bonds in the eyes of the
Catholic Church but yet unable to contract a valid civil marriage under state laws. Heedless of civil law
sanctions, some persons contract new marriages or enter into live-in relationships.

It was precisely to provide a satisfactory solution to such anomalous situations that the Civil Law
Revision Committee decided to engraft the Canon Law concept of psychological incapacity into the
Family Code — and classified the same as a ground for declaring marriages void ab initio or totally in
existent from the beginning.

A brief historical note on the Old Canon Law (1917). This Old Code, while it did not provide directly for
psychological incapacity, in effect recognized the same indirectly from a combination of three old
canons: "Canon #1081 required persons to 'be capable according to law' in order to give valid consent;
Canon #1082 required that persons 'be at least not ignorant' of the major elements required in
marriage; and Canon #1087 (the force and fear category) required that internal and external freedom be
present in order for consent to be valid. This line of interpretation produced two distinct but related
grounds for annulment, called 'lack of due discretion' and 'lack of due competence.' Lack of due
discretion means that the person did not have the ability to give valid consent at the time of the
wedding and therefore the union is invalid. Lack of due competence means that the person was
incapable of carrying out the obligations of the promise he or she made during the wedding ceremony.

"Favorable annulment decisions by the Roman Rota in the 1950s and 1960s involving sexual disorders
such as homosexuality and nymphomania laid the foundation for a broader approach to the kind of
proof necessary for psychological grounds for annulment. The Rota had reasoned for the first time in
several cases that the capacity to give valid consent at the time of marriage was probably not present in
persons who had displayed such problems shortly after the marriage. The nature of this change was
nothing short of revolutionary. Once the Rota itself had demonstrated a cautious willingness to use this
kind of hindsight, the way was paved for what came after 1970. Diocesan Tribunals began to accept
proof of serious psychological problems that manifested themselves shortly after the ceremony as proof
of an inability to give valid consent at the time of the ceremony.

Furthermore, and equally significant, the professional opinion of a psychological expert became
increasingly important in such cases. Data about the person's entire life, both before and after the
ceremony, were presented to these experts and they were asked to give professional opinions about a
party's mental at the time of the wedding. These opinions were rarely challenged and tended to be
accepted as decisive evidence of lack of valid consent.

The Church took pains to point out that its new openness in this area did not amount to the addition of
new grounds for annulment, but rather was an accommodation by the Church to the advances made in
psychology during the past decades. There was now the expertise to provide the all-important
connecting link between a marriage breakdown and premarital causes.

During the 1970s, the Church broadened its whole idea of marriage from that of a legal contract to that
of a covenant. The result of this was that it could no longer be assumed in annulment cases that a
person who could intellectually understand the concept of marriage could necessarily give valid consent
to marry. The ability to both grasp and assume the real obligations of a mature, lifelong commitment are
now considered a necessary prerequisite to valid matrimonial consent.2

Rotal decisions continued applying the concept of incipient psychological incapacity, "not only to sexual
anomalies but to all kinds of personality disorders that incapacitate a spouse or both spouses from
assuming or carrying out the essential obligations of marriage. For marriage . . . is not merely
cohabitation or the right of the spouses to each others' body for heterosexual acts, but is, in its totality,
the right to the community of the whole of life, i.e., the right to a developing. lifelong relationship. Rotal
decisions since 1973 have refined the meaning of psychological or psychic capacity for marriage as
presupposing the development of an adult personality; as meaning the capacity of the spouses to give
themselves to each other and to accept the other as a distinct person; that the spouses must be 'other
oriented' since the obligations of marriage are rooted in a self-giving love; and that the spouses must
have the capacity for interpersonal relationship because marriage is more than just a physical reality but
involves a true intertwining of personalities. The fulfillment of the obligations of marriage depends.
according to Church decisions, on the strength of this interpersonal relationship. A serious incapacity for
interpersonal sharing and support is held to impair the relationship and consequently, the ability to
fulfill the essential marital obligations. The marital capacity of one spouse is not considered in isolation
but in reference to the fundamental relationship to the other spouse.3

Fr. Green, in an article in Catholic Mind, lists six elements necessary to the mature marital relationship:

The courts consider the following elements crucial to the marital commitment: (1) a permanent and
faithful commitment to the marriage partner; (2) openness to children and partner; (3) stability; (4)
emotional maturity; (5) financial responsibility; (6) an ability to cope with the ordinary stresses and
strains of marriage, etc.

Fr. Green goes on to speak about some of the psychological conditions that might lead to the failure of a
marriage:

At stake is a type of constitutional impairment precluding conjugal communion even with the best
intentions of the parties. Among the psychic factors possibly giving rise to his or her inability to fulfill
marital obligations are the following: (1) antisocial personality with its fundamental lack of loyalty to
persons or sense of moral values; (2) hyperesthesia, where the individual has no real freedom of sexual
choice; (3) the inadequate personality where personal responses consistently fallshort of reasonable
expectations.

xxx xxx xxx

The psychological grounds are the best approach for anyone who doubts whether he or she has a case
for an annulment on any other terms. A situation that does not fit into any of the more traditional
categories often fits very easily into the psychological category.

As new as the psychological grounds are, experts are already detecting a shift in their use. Whereas
originally the emphasis was on the parties' inability to exercise proper judgment at the time of the
marriage (lack of due discretion), recent cases seem to be concentrating on the parties' to assume or
carry out their responsibilities an obligations as promised (lack of due competence). An advantage to
using the ground of lack of due competence is that the at the time the marriage was entered into civil
divorce and breakup of the family almost is of someone's failure out marital responsibilities as promised
at the time the marriage was entered into.4

In the instant case, "opposing and conflicting personalities" of the spouses were not considered
equivalent to psychological incapacity. As well in Santos v. Court of Appeals cited in the ponencia, the
Court held that the failure of the wife to return home from the U.S. or to communicate with her
husband for more then five years is not proof of her psychological incapacity as to render the marriage a
nullity.5 Therefore, Art. 36 is inapplicable and the marriages remain valid and subsisting.

However in the recent case of Chi Ming Tsoi v. Court of Appeals,6 this Court upheld both the Regional
Trial Court and the Court of Appeals in declaring the presence of psychological incapacity on the part of
the husband. Said petitioner husband, after ten (10) months' sleeping with his wife never had coitus
with her, a fact he did not deny but he alleged that it was due to the physical disorder of his wife which,
however, he failed to prove. Goaded by the indifference and stubborn refusal of her husband to fulfill a
basic marital obligation described as "to procreate children based on the universal principle that
procreation of children through sexual cooperation is the basic end of marriage," the wife brought the
action in the lower court to declare the marriage null.

The Court, quoting Dr. Gerardo Veloso, a former Presiding Judge of the Metropolitan Marriage Tribunal
of the Catholic Archdiocese of Manila (Branch I) on Psychological incapacity concluded:

If a spouse, although physically capable but simply refuses to perform his or her essential marriage
obligations, and the refusal is senseless and constant, Catholic marriage tribunals attribute the causes to
psychological incapacity than to stubborn refusal. Senseless and protracted refusal is equivalent to
psychological incapacity. Thus, the prolonged refusal of a spouse to have sexual intercourse with his or
her spouse is considered a sign of psychological incapacity.
We declared:

This Court, finding the gravity of the failed relationship in which the parties found themselves trapped in
its mire of unfulfilled vows and unconsummated marital obligations, can do no less but sustain the
studied judgment of respondent appellate court.

1 concur with the majority opinion that the herein marriage remains valid and subsisting absent
psychological incapacity (under Art. 36 of the Family Code) on the part of either or both of the spouses.

VITUG, J., concurring:

I fully concur with my esteemed 'colleague Mr. Justice Artemio V. Panganiban in his ponencia, and I find
to be most helpful the guidelines that he prepared for the bench and the bar in the proper appreciation
of Article 36 of Executive Order No. 209 ("The Family Code of the Philippines"). The term "psychological
incapacity" was neither defined nor exemplified by the Family Code. Thus —

Art. 36. A marriage contracted by any party who, at the time of the celebration, was psychologically
incapacitated to comply with the essential marital obligations of marriage, shall likewise be void even if
such incapacity becomes manifest only after its solemnization.

The Revision Committee, constituted under the auspices of the U.P. Law Center, which drafted the Code
explained:

(T)he Committee would like the judge to interpret the provision on a case-to-case basis, guided by
experience, the findings of experts and researchers in psychological disciplines, and by decisions of
church tribunals which, although not binding on the civil courts, may be given persuasive effect since the
provision was taken from Canon Law.1

Article 36 of the Family Code was concededly taken from Canon 1095 of the New Code of Canon Law —

Canon 1095. (The following persons) are incapable of contracting marriage; (those) —
1. who lack sufficient use of reason;

2. who suffer from a grave defect of discretion of judgment concerning essential matrimonial
rights and duties, to be given and accepted mutually;

3. who for causes of psychological nature are unable to assume the essential obligations of
marriage —

that should give that much value to Canon Law jurisprudence as an aid to the interpretation and
construction of the statutory enactment.2

The principles in the proper application of the law teach us that the several provisions of a Code must be
read like a congruent whole. Thus, in determining the import of "psychological incapacity" under Article
36, one must also read it along with, albeit to be taken as distinct from, the other grounds enumerated
in the Code, like Articles 35, 37, 38 and 41 that would likewise, but for distinct reasons, render the
marriage merely voidable, or Article 55 that could justify a petition for legal separation. Care must be
observed so that these various circumstances are not applied so indiscriminately as if the law were
indifferent on the matter.

I would wish to reiterate the Court's' statement in Santos vs. Court of Appeals;3 viz:

(T)he use of the phrase "psychological incapacity" under Article 36 of the Code has not been meant to
comprehend all such possible cases of psychoses as, likewise mentioned by some ecclesiastical
authorities, extremely low intelligence, immaturity, and like circumstances. . . Article 36 of the Family
Code cannot be taken and construed independently of, but must stand in conjunction with, existing
precepts in our law on marriage. Thus correlated, "psychological incapacity" should refer to no less than
a mental (not physical) incapacity that causes a party to be truly incognitive of the basic marital
covenants that concomitantly must be assumed and discharged by the parties to the marriage which, as
so expressed by Article 68 of the Family Code, include their mutual obligations to live together, observe
love, respect and fidelity and render help and support. There is hardly any doubt that the intendment of
the law has been to confine the meaning of "psychological incapacity" to the most serious cases of
personality disorders clearly demonstrative of an utter insensitivity or inability of the spouse to have
sexual relations with the other. This conclusion is implicit under Article 54 of the Family Code which
considers children conceived prior to the judicial declaration of nullity of the void marriage to be
"legitimate."
The other forms of psychoses, if existing at the inception of marriage, like the state of a party being of
unsound mind or concealment of drug addiction, habitual alcoholism, homosexuality or lesbianism,
merely renders the marriage contract voidable pursuant to Article 46, Family Code. If drug addiction,
habitual alcoholism, lesbianism or homosexuality should occur only during the marriage, they become
mere grounds for legal separation under Article 55 of the Family Code. These provisions of the Code,
however, do not necessarily preclude the possibility of these various circumstances being themselves,
depending on the degree and severity of the disorder, indicia of psychological

incapacity.4

In fine, the term "psychological incapacity," to be a ground for then nullity of marriage under Article 36
of the Family Code, must be able to pass the following tests; viz:

First, the incapacity must be psychological or mental, not physical, in nature;

Second, the psychological incapacity must relate to the inability, not mere refusal, to understand,
assume end discharge the basic marital obligations of living together, observing love, respect and fidelity
and rendering mutual help and support;

Third, the psychologic condition must exist at the time the marriage is contracted although its overt
manifestations and the marriage may occur only thereafter; and

Fourth, the mental disorder must be grave or serious and incurable.

It may well be that the Family Code Revision Committee has envisioned Article 36, as not a few
observers would suspect, as another form of absolute divorce or, as still others would also put it, to be a
alternative to divorce; however, the fact still remains that the language of the law has failed to carry out,
even if true, any such intendment. It might have indeed turned out for the better, if it were otherwise,
there could be good reasons to doubt the constitutionality of the measure. The fundamental law itself,
no less, has laid down in terse language its unequivocal command on how the State should regard
marriage and the family, thus —

Section 2, Article XV:

Sec. 2. Marriage, as an inviolable social institution, is the foundation of the family and shall be
protected by the State.
Section 12, Article II:

Sec. 12. The State recognizes the sanctity of family life and shall protect and strengthen the family as a
basic autonomous social institution . . . .

Section 1, Article XV:

Sec. 1. The State recognizes the Filipino family as the foundation of the nation. Accordingly, it shall
strengthen its solidarity and actively promote its total development. (The 1987 Constitution)

The case of Marcelino vs. Cruz, 121 SCRA 51, might here be significant not so much for the specific issue
there resolved but for the tone it has set. The Court there has held that constitutional provisions are to
be considered mandatory unless by necessary implication, a different intention is manifest such that to
have them enforced strictly would cause more harm than by disregarding them. It is quite clear to me
that the constitutional mandate on marriage and the family has not been meant to be simply directory
in character, nor for mere expediency or convenience, but one that demands a meaningful, not half-
hearted, respect.

Footnotes

1 Rollo pp. 25-33.

2 Sixteenth Division composed of J., Segundino G. Chua, ponente and chairman JJ., Serafin V.C.
Guingona and Ricardo P. Galvez, concurring.

3 Presided by Judge Heilia S. Mallare-Phillipps.

4 Solemnized by Fr. Jesus C. Encinas.

5 The Court of Appeals reproduced in its Decision a substantial portion of the RTC Decision is
follows:
"To sustain her claim that respondent is psychologically incapacitated to comply with his marital
obligations, petitioner testified that he is immature, irresponsible, dependent, disrespectful, arrogant, a
chronic liar, and an infidel. These characteristics of respondent are based on petitioner's testimony that
the former failed to be gainfully employed after he was relieved from the office of the Government
Corporate Counsel sometime in February, 1986. leaving petitioner as the sole breadwinner of the family.
Also when they were separated in fact, respondent practically abandoned both petitioner-mother and
son except during the first few months of separation when respondent regularly visited his son and gave
him a monthly allowance of P1,000.00 for about two to four months. Respondent is likewise dependent
on his parents for financial aid and support as he has no savings, preferring to spend his money with his
friends and peers. A year after their marriage, respondent informed petitioner that he bought a house
and lot at BF Homes, Parañaque for about a million pesos. They then transferred there only for the
petitioner to discover a few months later that they were actually renting the house with the
respondent's parents responsible for the payment of the rentals. Aside from this. respondent would also
lie about his salary and ability. And that at present, respondent is living with his mistress and their child.
which fact he does not deny.

It is unfortunate that the marriage between petitioner and respondent turned sour if we look at the
background of their relationship. During their college days, when they were still going steady,
respondent observed petitioner to be conservative, homely, and intelligent causing him to believe then
that she would make an ideal wife and mother. Likewise, petitioner fell in love with respondent because
of his thoughtfulness and gentleness. After a year, however, they decided to break their relationship
because of some differences in their personalities. Almost five (5) years later, while they were working
in Manila, petitioner and respondent rekindled their love affair. They became very close and petitioner
was glad to observe a more mature respondent. Believing that they know each other much better after
two years of going steady, they decided to settle down and get married. It would seem. therefore, that
petitioner and respondent knew each other well and were then prepared for married life.

During their marriage, however, the true personalities of the parties cropped-up and dominated their
life together. Unexpectedly on both their parts, petitioner and respondent failed to respond properly to
the situation. This failure resulted in their frequent arguments and fighting's. In fact, even with the
intervention and help of their parents who arranged for their possible reconciliation, the parties could
not come to terms.

It seems clear at this stage that the marriage between the parties broke-up because of their opposing
and conflicting personalities (sic). Neither of them can accept and understand the weakness of the
other. No one gives in and instead, blame each other for whatever problem or misunderstanding/s they
encounter. In fine, respondent cannot be solely responsible for the failure of other (sic) marriage.
Rather, this resulted because both parties cannot relate to each other as husband and wife which is
unique and requisite in marriage.
Marriage is a special contract of permanent union between a man and a woman with the basic objective
of establishing a conjugal and family life. (Article 1, Family Code). The unique element of permanency of
union signifies a continuing, developing, and lifelong relationship between the parties. Towards this end,
the parties must fully understand and accept the (implications and consequences of being permanently)
united in marriage. And the maintenance of this relationship demands from the parties, among others,
determination to succeed in their marriage as well as heartfelt understanding, acceptance, cooperation,
and support for each other. Thus, the Family Code requires them to live together, to observe mutual
(love, respect and fidelity, and render mutual help and support. Failure to observe) and perform these
fundamental roles of a husband and a wife will most likely lead to the break-up of the marriage. Such is
the unfortunate situation in this case. (Decision, pp. 5-8; Original Records, pp. 70-73).

6 240 SCRA 20, 34, January 4, 1995.

7 Quoted from Justice Alicia Sempio-Diy, Handbook on the Family Code, First Edition, 1988.

8 TSN, April 6, 1991, p. 5.

9 The National Appellate Matrimonial Tribunal reviews all decisions of the marriage tribunals of
each archdiocese in the country. Aside from heading the Appellate Tribunal, Most. Rev. Cruz is also
incumbent president of the Catholic Bishops' Conference of the Philippines, Archbishop of Dagupan-
Lingayen, and holds the degrees of Doctor of Canon Law and Doctor of Divinity. Archbishop Cruz was
also Secretary-General of the Second Plenary Council of the Philippines — PCP II — held from January
20, 1991 to February 17, 1991, which is the rough equivalent of a parliament or a constitutional
convention in the Philippine Church, and where the ponente, who was a Council member, had the
privilege of being overwhelmed by his keen mind and prayerful discernments.

10 Justice Puno was a former member of the Court of Appeals, retired Minister of Justice, author,
noted civil law professor and the law practitioner.

Article XV

THE FAMILY
Sec. 1. The State recognizes the Filipino Family as the foundation of the nation. Accordingly, it shall
strengthen its solidarity and actively promote its total development.

Sec. 2. Marriage, as an inviolable social institution, is the foundation of the family and shall be
protected by the state.

Sec. 3. The State shall defend:

(1) The right of spouses to found a family in accordance with their religious connections and the
demands of responsible parenthood;

(2) The right of children to assistance, including proper care and nutrition, and special protection
from all forms of neglect, abuse, cruelty. exploitation, and other conditions prejudicial to their
development;

(3) The right of the family to a family living wage and income;

(4) The right of families or family associations to participate in the planning and implementation of
policies and programs that affect them.

Sec. 4. The family has the duty to care for its elderly members but the state may also do so through just
programs of social security.

Art. 1 Marriage is a special contract of permanent union between a man and a woman entered into in
accordance with law for the establishment of conjugal and family life. It is the foundation of the family
and an inviolable social institution whose nature, consequences, and incidents are governed by law and
not subject to stipulation, except that marriage settlements may fix the property relations during the
marriage within the limits provided by this Code.

13 Salita vs. Magtolis, 233 SCRA 100, June 13, 1994.

14 This text is taken from the Memorandum of Archbishop Cruz. On the other hand, the text used
in Santos v. CA reads:
"Canon 1095. They are incapable of contracting marriage:

xxx xxx xxx

3. Who for causes of psychological nature are unable to assume the essential obligations of
marriage.

The difference in wording between this and that in Arch. Cruz's Memorandum is due to the fact that the
original Canon is written in Latin and both versions are differently-worded English translations.

ROMERO, J., separate opinion:

1 Justice Caguioa's explanation in the Minutes of July 26, 1986 of the Civil Code Revision
Committee of the U.P. Law Center.

2 Zwack , Joseph P. Annulment, A Step-by-Step Guide.

3 The Code of Canon Law, A Text and Commentary, The Canon Law Society of America, Paulist
Press, New York, 1985.

4 Zwack, ibid., p. 47.

5 G.R. No. 112019, 240 SCRA 20 (1995).

6 G.R. No. 119190 (1997).

VITUG, J., concurring:

1 Mr. Justice Josue N. Bellosillo, quoting Mme. Justice Alicia V. Sempio-Diy, In Salita vs. Hon.
Magtolis, 233 SCRA 100.

2 In Santos vs. Court Appeals, 240 SCRA 20.

3 Supra.

4 At pages 34-35.
Case Digest:

Republic vs CA and Molina (G.R. No. 108763)

Posted: August 18, 2011 in Case Digests

Tags: Marriage, Psychological Incapacity, Void Marriages 0

This is a petition for review on certiorari by the Solicitor General assailing the January 25, 1993 Decision
of the Court of Appeals in CA-G. R. CV No. 34858 which affirmed the May 14, 1991 Decision of the
Regional Trial Court of La Trinidad, Benguet, declaring the respondent Roridel Olaviano Molina and
Reynaldo Molina’s marriage as void ab initio, on the ground of “psychological incapacity” under Article
36 of the Family Code.

FACTS:

Roridel Olaviano was married to Reynaldo Molina on 14 April 1985 in Manila, and gave birth to a son a
year after. Reynaldo showed signs of “immaturity and irresponsibility” on the early stages of the
marriage, observed from his tendency to spend time with his friends and squandering his money with
them, from his dependency from his parents, and his dishonesty on matters involving his finances.
Reynaldo was relieved of his job in 1986, Roridel became the sole breadwinner thereafter. In March
1987, Roridel resigned from her job in Manila and proceeded to Baguio City. Reynaldo left her and their
child a week later. The couple is separated-in-fact for more than three years.

On 16 August 1990, Roridel filed a verified petition for declaration of nullity of her marriage to Reynaldo
Molina. Evidence for Roridel consisted of her own testimony, that of two of her friends, a social worker,
and a psychiatrist of the Baguio General Hospital and Medical Center. Reynaldo did not present any
evidence as he appeared only during the pre-trial conference. On 14 May 1991, the trial court rendered
judgment declaring the marriage void. The Solicitor General appealed to the Court of Appeals. The Court
of Appeals denied the appeals and affirmed in toto the RTC’s decision. Hence, the present recourse.

ISSUE: Whether opposing or conflicting personalities should be construed as psychological incapacity

HELD:The Court of Appeals erred in its opinion the Civil Code Revision Committee intended to liberalize
the application of Philippine civil laws on personal and family rights, and holding psychological incapacity
as a broad range of mental and behavioral conduct on the part of one spouse indicative of how he or
she regards the marital union, his or her personal relationship with the other spouse, as well as his or
her conduct in the long haul for the attainment of the principal objectives of marriage; where said
conduct, observed and considered as a whole, tends to cause the union to self-destruct because it
defeats the very objectives of marriage, warrants the dissolution of the marriage.
The Court reiterated its ruling in Santos v. Court of Appeals, where psychological incapacity should refer
to no less than a mental (not physical) incapacity, existing at the time the marriage is celebrated, and
that there is hardly any doubt that the intendment of the law has been to confine the meaning of
‘psychological incapacity’ to the most serious cases of personality disorders clearly demonstrative of an
utter insensitivity or inability to give meaning and significance to the marriage. Psychological incapacity
must be characterized by gravity, juridical antecedence, and incurability. In the present case, there is no
clear showing to us that the psychological defect spoken of is an incapacity; but appears to be more of a
“difficulty,” if not outright “refusal” or “neglect” in the performance of some marital obligations. Mere
showing of “irreconcilable differences” and “conflicting personalities” in no wise constitutes
psychological incapacity.

The Court, in this case, promulgated the guidelines in the interpretation and application of Article 36 of
the Family Code, removing any visages of it being the most liberal divorce procedure in the world: (1)
The burden of proof belongs to the plaintiff; (2) the root cause of psychological incapacity must be
medically or clinically identified, alleged in the complaint, sufficiently proven by expert, and clearly
explained in the decision; (3) The incapacity must be proven existing at the time of the celebration of
marriage; (4) the incapacity must be clinically or medically permanent or incurable; (5) such illness must
be grave enough; (6) the essential marital obligation must be embraced by Articles 68 to 71 of the
Family Code as regards husband and wife, and Articles 220 to 225 of the same code as regards parents
and their children; (7) interpretation made by the National Appellate Matrimonial Tribunal of the
Catholic Church, and (8) the trial must order the fiscal and the Solicitor-General to appeal as counsels for
the State.

The Supreme Court granted the petition, and reversed and set aside the assailed decision; concluding
that the marriage of Roridel Olaviano to Reynaldo Molina subsists and remains valid.
Republic of the Philippines

SUPREME COURT

Manila

FIRST DIVISION

G.R. No. L-39419 April 12, 1982

MAPALAD AISPORNA, petitioner,

vs.

THE COURT OF APPEALS and THE PEOPLE OF THE PHILIPPINES, respondents.

DE CASTRO, J.:

In this petition for certiorari, petitioner-accused Aisporna seeks the reversal of the decision dated
August 14, 1974 1 in CA-G.R. No. 13243-CR entitled "People of the Philippines, plaintiff-appellee, vs.
Mapalad Aisporna, defendant-appellant" of respondent Court of Appeals affirming the judgment of the
City Court of Cabanatuan 2 rendered on August 2, 1971 which found the petitioner guilty for having
violated Section 189 of the Insurance Act (Act No. 2427, as amended) and sentenced her to pay a fine of
P500.00 with subsidiary imprisonment in case of insolvency, and to pay the costs.

Petitioner Aisporna was charged in the City Court of Cabanatuan for violation of Section 189 of the
Insurance Act on November 21, 1970 in an information 3 which reads as follows:

That on or before the 21st day of June, 1969, in the City of Cabanatuan, Republic of the Philippines, and
within the jurisdiction of this Honorable Court, the above-named accused, did then and there, wilfully,
unlawfully and feloniously act as agent in the solicitation or procurement of an application for insurance
by soliciting therefor the application of one Eugenio S. Isidro, for and in behalf of Perla Compania de
Seguros, Inc., a duly organized insurance company, registered under the laws of the Republic of the
Philippines, resulting in the issuance of a Broad Personal Accident Policy No. 28PI-RSA 0001 in the
amount not exceeding FIVE THOUSAND PESOS (P5,000.00) dated June 21, 1969, without said accused
having first secured a certificate of authority to act as such agent from the office of the Insurance
Commissioner, Republic of the Philippines.
CONTRARY TO LAW.

The facts, 4 as found by the respondent Court of Appeals are quoted hereunder:

IT RESULTING: That there is no debate that since 7 March, 1969 and as of 21 June, 1969, appellant's
husband, Rodolfo S. Aisporna was duly licensed by Insurance Commission as agent to Perla Compania de
Seguros, with license to expire on 30 June, 1970, Exh. C; on that date, at Cabanatuan City, Personal
Accident Policy, Exh. D was issued by Perla thru its author representative, Rodolfo S. Aisporna, for a
period of twelve (12) months with beneficiary as Ana M. Isidro, and for P5,000.00; apparently, insured
died by violence during lifetime of policy, and for reasons not explained in record, present information
was filed by Fiscal, with assistance of private prosecutor, charging wife of Rodolfo with violation of Sec.
189 of Insurance Law for having, wilfully, unlawfully, and feloniously acted, "as agent in the solicitation
for insurance by soliciting therefore the application of one Eugenio S. Isidro for and in behalf of Perla
Compaña de Seguros, ... without said accused having first secured a certificate of authority to act as
such agent from the office of the Insurance Commission, Republic of the Philippines."

and in the trial, People presented evidence that was hardly disputed, that aforementioned policy was
issued with active participation of appellant wife of Rodolfo, against which appellant in her defense
sought to show that being the wife of true agent, Rodolfo, she naturally helped him in his work, as clerk,
and that policy was merely a renewal and was issued because Isidro had called by telephone to renew,
and at that time, her husband, Rodolfo, was absent and so she left a note on top of her husband's desk
to renew ...

Consequently, the trial court found herein petitioner guilty as charged. On appeal, the trial court's
decision was affirmed by the respondent appellate court finding the petitioner guilty of a violation of the
first paragraph of Section 189 of the Insurance Act. Hence, this present recourse was filed on October
22, 1974. 5

In its resolution of October 28, 1974, 6 this Court resolved, without giving due course to this instant
petition, to require the respondent to comment on the aforesaid petition. In the comment 7 filed on
December 20, 1974, the respondent, represented by the Office of the Solicitor General, submitted that
petitioner may not be considered as having violated Section 189 of the Insurance Act. 8 On April 3, 1975,
petitioner submitted his Brief 9 while the Solicitor General, on behalf of the respondent, filed a
manifestation 10 in lieu of a Brief on May 3, 1975 reiterating his stand that the petitioner has not
violated Section 189 of the Insurance Act.
In seeking reversal of the judgment of conviction, petitioner assigns the following errors 11 allegedly
committed by the appellate court:

1. THE RESPONDENT COURT OF APPEALS ERRED IN FINDING THAT RECEIPT OF COMPENSATION IS

NOT AN ESSENTIAL ELEMENT OF THE CRIME DEFINED BY THE FIRST PARAGRAPH OF SECTION 189 OF
THE INSURANCE ACT.

2. THE RESPONDENT COURT OF APPEALS ERRED IN GIVING DUE WEIGHT TO EXHIBITS F, F-1, TO F-
17, INCLUSIVE SUFFICIENT TO ESTABLISH PETITIONER'S GUILT BEYOND REASONABLE DOUBT.

3. THE RESPONDENT COURT OF APPEALS ERRED IN NOT ACQUITTING HEREIN PETITIONER.

We find the petition meritorious.

The main issue raised is whether or not a person can be convicted of having violated the first paragraph
of Section 189 of the Insurance Act without reference to the second paragraph of the same section. In
other words, it is necessary to determine whether or not the agent mentioned in the first paragraph of
the aforesaid section is governed by the definition of an insurance agent found on its second paragraph.

The pertinent provision of Section 189 of the Insurance Act reads as follows:

No insurance company doing business within the Philippine Islands, nor any agent thereof, shall pay any
commission or other compensation to any person for services in obtaining new insurance, unless such
person shall have first procured from the Insurance Commissioner a certificate of authority to act as an
agent of such company as hereinafter provided. No person shall act as agent, sub-agent, or broker in the
solicitation of procurement of applications for insurance, or receive for services in obtaining new
insurance, any commission or other compensation from any insurance company doing business in the
Philippine Islands, or agent thereof, without first procuring a certificate of authority so to act from the
Insurance Commissioner, which must be renewed annually on the first day of January, or within six
months thereafter. Such certificate shall be issued by the Insurance Commissioner only upon the written
application of persons desiring such authority, such application being approved and countersigned by
the company such person desires to represent, and shall be upon a form approved by the Insurance
Commissioner, giving such information as he may require. The Insurance Commissioner shall have the
right to refuse to issue or renew and to revoke any such certificate in his discretion. No such certificate
shall be valid, however, in any event after the first day of July of the year following the issuing of such
certificate. Renewal certificates may be issued upon the application of the company.
Any person who for compensation solicits or obtains insurance on behalf of any insurance company, or
transmits for a person other than himself an application for a policy of insurance to or from such
company or offers or assumes to act in the negotiating of such insurance, shall be an insurance agent
within the intent of this section, and shall thereby become liable to all the duties, requirements,
liabilities, and penalties to which an agent of such company is subject.

Any person or company violating the provisions of this section shall be fined in the sum of five hundred
pesos. On the conviction of any person acting as agent, sub-agent, or broker, of the commission of any
offense connected with the business of insurance, the Insurance Commissioner shall immediately revoke
the certificate of authority issued to him and no such certificate shall thereafter be issued to such
convicted person.

A careful perusal of the above-quoted provision shows that the first paragraph thereof prohibits a
person from acting as agent, sub-agent or broker in the solicitation or procurement of applications for
insurance without first procuring a certificate of authority so to act from the Insurance Commissioner,
while its second paragraph defines who is an insurance agent within the intent of this section and,
finally, the third paragraph thereof prescribes the penalty to be imposed for its violation.

The respondent appellate court ruled that the petitioner is prosecuted not under the second paragraph
of Section 189 of the aforesaid Act but under its first paragraph. Thus —

... it can no longer be denied that it was appellant's most active endeavors that resulted in issuance of
policy to Isidro, she was there and then acting as agent, and received the pay thereof — her defense
that she was only acting as helper of her husband can no longer be sustained, neither her point that she
received no compensation for issuance of the policy because

any person who for compensation solicits or obtains insurance on behalf of any insurance company or
transmits for a person other than himself an application for a policy of insurance to or from such
company or offers or assumes to act in the negotiating of such insurance, shall be an insurance agent
within the intent of this section, and shall thereby become liable to all the duties, requirements,
liabilities, and penalties, to which an agent of such company is subject. paragraph 2, Sec. 189, Insurance
Law,

now it is true that information does not even allege that she had obtained the insurance,
for compensation

which is the gist of the offense in Section 189 of the Insurance Law in its 2nd paragraph, but what
appellant apparently overlooks is that she is prosecuted not under the 2nd but under the 1st paragraph
of Sec. 189 wherein it is provided that,

No person shall act as agent, sub-agent, or broker, in the solicitation or procurement of applications for
insurance, or receive for services in obtaining new insurance any commission or other compensation
from any insurance company doing business in the Philippine Island, or agent thereof, without first
procuring a certificate of authority to act from the insurance commissioner, which must be renewed
annually on the first day of January, or within six months thereafter.

therefore, there was no technical defect in the wording of the charge, so that Errors 2 and 4 must be
overruled. 12

From the above-mentioned ruling, the respondent appellate court seems to imply that the definition of
an insurance agent under the second paragraph of Section 189 is not applicable to the insurance agent
mentioned in the first paragraph. Parenthetically, the respondent court concludes that under the second
paragraph of Section 189, a person is an insurance agent if he solicits and obtains an insurance for
compensation, but, in its first paragraph, there is no necessity that a person solicits an insurance for
compensation in order to be called an insurance agent.

We find this to be a reversible error. As correctly pointed out by the Solicitor General, the definition of
an insurance agent as found in the second paragraph of Section 189 is intended to define the word
"agent" mentioned in the first and second paragraphs of the aforesaid section. More significantly, in its
second paragraph, it is explicitly provided that the definition of an insurance agent is within the intent of
Section 189. Hence —

Any person who for compensation ... shall be an insurance agent within the intent of this section, ...

Patently, the definition of an insurance agent under the second paragraph holds true with respect to the
agent mentioned in the other two paragraphs of the said section. The second paragraph of Section 189
is a definition and interpretative clause intended to qualify the term "agent" mentioned in both the first
and third paragraphs of the aforesaid section.
Applying the definition of an insurance agent in the second paragraph to the agent mentioned in the
first and second paragraphs would give harmony to the aforesaid three paragraphs of Section 189.
Legislative intent must be ascertained from a consideration of the statute as a whole. The particular
words, clauses and phrases should not be studied as detached and isolated expressions, but the whole
and every part of the statute must be considered in fixing the meaning of any of its parts and in order to
produce harmonious whole. 13 A statute must be so construed as to harmonize and give effect to all its
provisions whenever possible. 14 The meaning of the law, it must be borne in mind, is not to be
extracted from any single part, portion or section or from isolated words and phrases, clauses or
sentences but from a general consideration or view of the act as a whole. 15 Every part of the statute
must be interpreted with reference to the context. This means that every part of the statute must be
considered together with the other parts, and kept subservient to the general intent of the whole
enactment, not separately and independently. 16 More importantly, the doctrine of associated words
(Noscitur a Sociis) provides that where a particular word or phrase in a statement is ambiguous in itself
or is equally susceptible of various meanings, its true meaning may be made clear and specific by
considering the company in which it is found or with which it is associated. 17

Considering that the definition of an insurance agent as found in the second paragraph is also applicable
to the agent mentioned in the first paragraph, to receive a compensation by the agent is an essential
element for a violation of the first paragraph of the aforesaid section. The appellate court has
established ultimately that the petitioner-accused did not receive any compensation for the issuance of
the insurance policy of Eugenio Isidro. Nevertheless, the accused was convicted by the appellate court
for, according to the latter, the receipt of compensation for issuing an insurance policy is not an
essential element for a violation of the first paragraph of Section 189 of the Insurance Act.

We rule otherwise. Under the Texas Penal Code 1911, Article 689, making it a misdemeanor for any
person for direct or indirect compensation to solicit insurance without a certificate of authority to act as
an insurance agent, an information, failing to allege that the solicitor was to receive compensation
either directly or indirectly, charges no offense. 18 In the case of Bolen vs. Stake, 19 the provision of
Section 3750, Snyder's Compiled Laws of Oklahoma 1909 is intended to penalize persons only who acted
as insurance solicitors without license, and while acting in such capacity negotiated and concluded
insurance contracts for compensation. It must be noted that the information, in the case at bar, does
not allege that the negotiation of an insurance contracts by the accused with Eugenio Isidro was one for
compensation. This allegation is essential, and having been omitted, a conviction of the accused could
not be sustained. It is well-settled in Our jurisprudence that to warrant conviction, every element of the
crime must be alleged and proved. 20

After going over the records of this case, We are fully convinced, as the Solicitor General maintains, that
accused did not violate Section 189 of the Insurance Act.
WHEREFORE, the judgment appealed from is reversed and the accused is acquitted of the crime
charged, with costs de oficio.

SO ORDERED.

Teehankee (Acting C.J.,) Makasiar, De Castro, Fernandez, Guerrero and Melencio-Herrera, JJ., concur.

Plana, J., took no part.

Case Digest:

AISPORNA V CA (DIGEST)

DECEMBER 10, 2017 BY THELOWLYLAWSTUDENT

Aisporna v Court of Appeals and the People of the Philippines

G.R. No. L-39419

12 April 1982

TOPIC: Statutory Construction, Doctrine of Associated Words (Noscitur a Sociis)

FACTS:

Petitioner Aisporna was charged for violation of Section 189 of the Insurance Act.

Petitioner’s husband, Rodolfo S. Aisporna (Rodolfo) was duly licensed by the Insurance Commission as
agent to Perla Compania de Seguros. Thru Rodolfo, a 12- month Personal Accident Policy was issued by
Perla with beneficiary to Ana M. Isidro for P50,000. The insured died by violence during lifetime of
policy.

Subsequently, petitioner was charged because the aforementioned policy was issued with her active
participation, which is not allowed because she did not possess a certificate of authority to act as agent
from the office of the Insurance Commission.

Petitioner contended that being the wife of Rodolfo, she naturally helped him in his work, and that the
policy was merely a renewal and was issued because her husband was not around when Isidro called by
telephone. Instead, appellant left a note on top of her husband’s desk.

The trial court found petitioner guilty as charged. On appeal, the trial court’s decisions was affirmed by
respondent appellate court, finding petitioner guilty of a violation of the first paragraph of Sec 189 of
the insurance act.
ISSUE:

Whether or not a person can be convicted of having violated the first paragraph of Section 189 of the
Insurance Act without reference to the second paragraph of the same section.

RULING:

The petition is meritorious. Petition appealed from is reversed, and accused is acquitted of the crime
charged.

A perusal of the provision in question shows that the first paragraph thereof prohibits a person from
acting as agent, sub-agent or broker in the solicitation or procurement of applications for insurance
without first procuring a certificate of authority so to act from the Insurance Commissioner, while its
second paragraph defines who an insurance agent is within the intent of this section and, finally, the
third paragraph thereof prescribes the penalty to be imposed for its violation.

The definition of an insurance agent as found in the second paragraph of Section 189 is intended to
define the word “agent” mentioned in the first and second paragraphs of the aforesaid section. More
significantly, in its second paragraph, it is explicitly provided that the definition of an insurance agent is
within the intent of Section 189.

Applying the definition of an insurance agent in the second paragraph to the agent mentioned in the
first and second paragraphs would give harmony to the aforesaid three paragraphs of Section 189.
Legislative intent must be ascertained from a consideration of the statute as a whole. The particular
words, clauses and phrases should not be studied as detached and isolated expressions, but the whole
and every part of the statute must be considered in fixing the meaning of any of its parts and in order to
produce harmonious whole. A statute must be so construed as to harmonize and give effect to all its
provisions whenever possible. More importantly the doctrine of associated words (Noscitur a Sociis)
provides that where a particular word or phrase in a statement is ambiguous in itself or is equally
susceptible of various meanings, its true meaning may be made clear and specific by considering the
company in which it is found or with which it is associated.

Considering that the definition of an insurance agent as found in the second paragraph is also applicable
to the agent mentioned in the first paragraph, to receive compensation by the agent is an essential
element for a violation of the first paragraph of the aforesaid section.
In the case at bar, the information does not allege that the negotiation of an insurance contracts by the
accused with Eugenio Isidro was one for compensation. This allegation is essential, and having been
omitted, a conviction of the accused could not be sustained. It is well-settled in Our jurisprudence that
to warrant conviction, every element of the crime must be alleged and proved.

The accused did not violate Section 189 of the Insurance Act.
Republic of the Philippines

SUPREME COURT

Manila

EN BANC

G.R. No. L-34964 January 31, 1973

CHINA BANKING CORPORATION and TAN KIM LIONG, petitioners-appellants,

vs.

HON. WENCESLAO ORTEGA, as Presiding Judge of the Court of First Instance of Manila, Branch VIII, and
VICENTE G. ACABAN, respondents-appellees.

Sy Santos, Del Rosario and Associates for petitioners-appellants.

Tagalo, Gozar and Associates for respondents-appellees.

MAKALINTAL, J.:

The only issue in this petition for certiorari to review the orders dated March 4, 1972 and March 27,
1972, respectively, of the Court of First Instance of Manila in its Civil Case No. 75138, is whether or not a
banking institution may validly refuse to comply with a court process garnishing the bank deposit of a
judgment debtor, by invoking the provisions of Republic Act No. 1405. *

On December 17, 1968 Vicente Acaban filed a complaint in the court a quo against Bautista Logging Co.,
Inc., B & B Forest Development Corporation and Marino Bautista for the collection of a sum of money.
Upon motion of the plaintiff the trial court declared the defendants in default for failure to answer
within the reglementary period, and authorized the Branch Clerk of Court and/or Deputy Clerk to
receive the plaintiff's evidence. On January 20, 1970 judgment by default was rendered against the
defendants.

To satisfy the judgment, the plaintiff sought the garnishment of the bank deposit of the defendant B & B
Forest Development Corporation with the China Banking Corporation. Accordingly, a notice of
garnishment was issued by the Deputy Sheriff of the trial court and served on said bank through its
cashier, Tan Kim Liong. In reply, the bank' cashier invited the attention of the Deputy Sheriff to the
provisions of Republic Act No. 1405 which, it was alleged, prohibit the disclosure of any information
relative to bank deposits. Thereupon the plaintiff filed a motion to cite Tan Kim Liong for contempt of
court.

In an order dated March 4, 1972 the trial court denied the plaintiff's motion. However, Tan Kim Liong
was ordered "to inform the Court within five days from receipt of this order whether or not there is a
deposit in the China Banking Corporation of defendant B & B Forest Development Corporation, and if
there is any deposit, to hold the same intact and not allow any withdrawal until further order from this
Court." Tan Kim Liong moved to reconsider but was turned down by order of March 27, 1972. In the
same order he was directed "to comply with the order of this Court dated March 4, 1972 within ten (10)
days from the receipt of copy of this order, otherwise his arrest and confinement will be ordered by the
Court." Resisting the two orders, the China Banking Corporation and Tan Kim Liong instituted the instant
petition.

The pertinent provisions of Republic Act No. 1405 relied upon by the petitioners reads:

Sec. 2. All deposits of whatever nature with banks or banking institutions in the Philippines including
investments in bonds issued by the Government of the Philippines, its political subdivisions and its
instrumentalities, are hereby considered as of absolutely confidential nature and may not be examined,
inquired or looked into by any person, government official, bureau or office, except upon written
permission of the depositor, or in cases of impeachment, or upon order of a competent court in cases of
bribery or dereliction of duty of public officials, or in cases where the money deposited or invested is the
subject matter of the litigation.

Sec 3. It shall be unlawful for any official or employee of a banking institution to disclose to any person
other than those mentioned in Section two hereof any information concerning said deposits.

Sec. 5. Any violation of this law will subject offender upon conviction, to an imprisonment of not more
than five years or a fine of not more than twenty thousand pesos or both, in the discretion of the court.
The petitioners argue that the disclosure of the information required by the court does not fall within
any of the four (4) exceptions enumerated in Section 2, and that if the questioned orders are complied
with Tan Kim Liong may be criminally liable under Section 5 and the bank exposed to a possible damage
suit by B & B Forest Development Corporation. Specifically referring to this case, the position of the
petitioners is that the bank deposit of judgment debtor B & B Forest Development Corporation cannot
be subject to garnishment to satisfy a final judgment against it in view of the aforequoted provisions of
law.

We do not view the situation in that light. The lower court did not order an examination of or inquiry
into the deposit of B & B Forest Development Corporation, as contemplated in the law. It merely
required Tan Kim Liong to inform the court whether or not the defendant B & B Forest Development
Corporation had a deposit in the China Banking Corporation only for purposes of the garnishment issued
by it, so that the bank would hold the same intact and not allow any withdrawal until further order. It
will be noted from the discussion of the conference committee report on Senate Bill No. 351 and House
Bill No. 3977, which later became Republic Act 1405, that it was not the intention of the lawmakers to
place bank deposits beyond the reach of execution to satisfy a final judgment. Thus:

Mr. MARCOS. Now, for purposes of the record, I should like the Chairman of the Committee on Ways
and Means to clarify this further. Suppose an individual has a tax case. He is being held liable by the
Bureau of Internal Revenue for, say, P1,000.00 worth of tax liability, and because of this the deposit of
this individual is attached by the Bureau of Internal Revenue.

Mr. RAMOS. The attachment will only apply after the court has pronounced sentence declaring the
liability of such person. But where the primary aim is to determine whether he has a bank deposit in
order to bring about a proper assessment by the Bureau of Internal Revenue, such inquiry is not
authorized by this proposed law.

Mr. MARCOS. But under our rules of procedure and under the Civil Code, the attachment or
garnishment of money deposited is allowed. Let us assume, for instance, that there is a preliminary
attachment which is for garnishment or for holding liable all moneys deposited belonging to a certain
individual, but such attachment or garnishment will bring out into the open the value of such deposit. Is
that prohibited by this amendment or by this law?

Mr. RAMOS. It is only prohibited to the extent that the inquiry is limited, or rather, the inquiry is
made only for the purpose of satisfying a tax liability already declared for the protection of the right in
favor of the government; but when the object is merely to inquire whether he has a deposit or not for
purposes of taxation, then this is fully covered by the law.
Mr. MARCOS. And it protects the depositor, does it not?

Mr. RAMOS. Yes, it protects the depositor.

Mr. MARCOS. The law prohibits a mere investigation into the existence and the amount of the deposit.

Mr. RAMOS. Into the very nature of such deposit.

Mr. MARCOS. So I come to my original question. Therefore, preliminary garnishment or attachment of

the deposit is not allowed?

Mr. RAMOS. No, without judicial authorization.

Mr. MARCOS. I am glad that is clarified. So that the established rule of procedure as well as the
substantive law on the matter is amended?

Mr. RAMOS. Yes. That is the effect.

Mr. MARCOS. I see. Suppose there has been a decision, definitely establishing the liability of an
individual for taxation purposes and this judgment is sought to be executed ... in the execution of that
judgment, does this bill, or this proposed law, if approved, allow the investigation or scrutiny of the bank
deposit in order to execute the judgment?

Mr. RAMOS. To satisfy a judgment which has become executory.

Mr. MARCOS. Yes, but, as I said before, suppose the tax liability is P1,000,000 and the deposit is half a
million, will this bill allow scrutiny into the deposit in order that the judgment may be executed?

Mr. RAMOS. Merely to determine the amount of such money to satisfy that obligation to the
Government, but not to determine whether a deposit has been made in evasion of taxes.
xxx xxx xxx

Mr. MACAPAGAL. But let us suppose that in an ordinary civil action for the recovery of a sum of
money the plaintiff wishes to attach the properties of the defendant to insure the satisfaction of the
judgment. Once the judgment is rendered, does the gentleman mean that the plaintiff cannot attach the
bank deposit of the defendant?

Mr. RAMOS. That was the question raised by the gentleman from Pangasinan to which I replied that
outside the very purpose of this law it could be reached by attachment.

Mr. MACAPAGAL. Therefore, in such ordinary civil cases it can be attached?

Mr. RAMOS. That is so.

(Vol. II, Congressional Record, House of Representatives, No. 12, pp. 3839-3840, July 27, 1955).

It is sufficiently clear from the foregoing discussion of the conference committee report of the two
houses of Congress that the prohibition against examination of or inquiry into a bank deposit under
Republic Act 1405 does not preclude its being garnished to insure satisfaction of a judgment. Indeed
there is no real inquiry in such a case, and if the existence of the deposit is disclosed the disclosure is
purely incidental to the execution process. It is hard to conceive that it was ever within the intention of
Congress to enable debtors to evade payment of their just debts, even if ordered by the Court, through
the expedient of converting their assets into cash and depositing the same in a bank.

WHEREFORE, the orders of the lower court dated March 4 and 27, 1972, respectively, are hereby
affirmed, with costs against the petitioners-appellants.

Zaldivar, Castro, Fernando, Barredo, Makasiar, Antonio and Esguerra, JJ., concur.

Concepcion, C.J. and Teehankee, J., took no part.

Case Digest:

CHINA BANK V ORTEGA

Chinabank v Ortega

GR. L-34964

Facts:

On December 17, 1968 Vicente Acaban filed a complaint in the court a quo against Bautista Logging Co.,
Inc., B & B Forest Development Corporation and Marino Bautista for the collection of a sum of money.
Upon motion of the plaintiff, the court declared the defendants in default for not answering within the
prescribe period. To satisfy the judgment, the plaintiff sought for the garnishment of the bank deposits
of the defendants with the China Banking Corporation. Consequently, a notice of garnishment was
issued by the deputy sheriff of the trial court and served on the bank’s cashier. The bank cashier, replied
in the negative. In the reply, he invited the attention of the sheriff to RA 1405. The plaintiff then filed a
motion to cite the cashier for contempt of court. The trial court, despite having denied the motion,
ordered that the cashier confirm whether or not the defendants have existing deposit in their bank. The
cashier moved to reconsider but was denied and, subsequently, he was ordered to comply with the
order of the court within 10 days, otherwise, he would be arrested. Hence this petition.

Issue:

Whether or not china bank may validly refuse to comply with a court process garnishing the bank
deposit of the debtor by invoking the provisions of RA 1405.

Held:

The prohibition against examination of or inquiry into a bank deposit under Republic Act 1405 does not
preclude its being garnished to insure satisfaction of a judgment. In the present case, there was no
inquiry as to how much the actual deposits are, the only inquiry that the court had was whether or not
there are deposits of the then defendants in China bank
Republic of the Philippines

SUPREME COURT

Manila

FIRST DIVISION

G.R. No. L-37867 February 22, 1982

BOARD OF ADMINISTRATORS, PHILIPPINES VETERANS ADMINISTRATION, petitioner,

vs.

HON. JOSE G. BAUTISTA, in his capacity as Presiding Judge of the CFI Manila, Branch III, and CALIXTO V.
GASILAO, respondents.

GUERRERO, J.:

This is a petition to review on certiorari the decision of respondent Court of First Instance of Manila,
Branch III, rendered on October 25, 1973 in Civil Case No. 90450 for mandamus filed by Calixto V.
Gasilao against the Board of Administrators of the Philippine Veterans Administration.

The facts as found by the Court a quo to have been established by the pleadings find by the parties are
stated in the decision under review from which We quote the following:

Calixto V. Gasilao, pauper litigant and petitioner in the above-entitled case, was a veteran in good
standing during World War II. On October 19, 1955, he filed a claim for disability pension under Section
9, Republic Act No. 65. The claim was disapproved by the Philippine Veterans Board (now Board of
Administrators, Philippine Veterans Administration).

Meanwhile, Republic Act 65 was amended by Republic Act 1362 on June 22, 1955 by including as part of
the benefit of P50.00, P10.00 a month for each of the unmarried minor children below 18 of the veteran
Republic Act No. 1362 was implemented by the respondents only on July 1, 1955.
On June 18, 1957, Section 9 of Republic Act No. 65 was further amended by Republic Act 1920
increasing the life pension of the veteran to P100.00 a month and maintaining the P10.00 a month each
for the unmarried minor children below 18.

Fortunately, on August 8, 1968, the claim of the petitioner which was disapproved in December, 1955
was reconsidered and his claim was finally approved at the rate of P100.00 a month, life pension, and
the additional Pl0.00 for each of his ten unmarried minor children below 18. In view of the approval of
the claim of petitioner, he requested respondents that his claim be made retroactive as of the date
when his original application was flied or disapproved in 1955. Respondents did not act on his request.

On June 22, 1969, Section 9 of Republic Act No. 65 was amended by Republic Act No. 5753 which
increased the life pension of the veteran to P200.00 a month and granted besides P30.00 a month for
the wife and P30.00 a month each for his unmarried minor children below 18. In view of the new law,
respondents increased the monthly pension of petitioner to P125.00 effective January 15, 1971 due to
insufficient funds to cover full implementation. His wife was given a monthly pension of P7.50 until
January 1, 1972 when Republic Act 5753 was fully implemented.

Petitioner now claims that he was deprived of his right to the pension from October 19, 1955 to June 21,
1957 at the rate of P50.00 per month plus P10.00 a month each for his six (6) unmarried minor children
below 18. lie also alleges that from June 22, 1957 to August 7, 1968 he is entitled to the difference of
P100.00 per month plus P10.00 a month each for his seven (7) unmarried nor children below 18. Again,
petitioner asserts the difference of P100.00 per month, plus P30.00 a month for his wife and the
difference of P20.00 a month each for his four (4) unmarried minor children below 18 from June 22,
1969 up to January 14, 1971 and finally, the difference of P75.00 per month plus P30.00 a month for his
wife and the difference of P20.00 a month for his three (3) unmarried minor children below 18 from
January 15, 1971 to December 31, 1971. 1

According to the records, the parties, through their respective counsels, filed on September 24, 1973 the
following stipulation of facts in the lower Court:

STIPULATION OF FACTS

COME NOW the parties thru their respective counsel, and unto this Honorable Court, respectfully state
that they agree on the following facts which may be considered as proved without the need of the
introduction of any evidence thereon, to wit:
1. Petitioner was a veteran in good standing during the last World War that took active
participation in the liberation drive against the enemy, and due to his military service, he was rendered
disabled.

2. The Philippine Veterans Administration, formerly the Philippine Veterans Board, (now Philippine
Veterans Affairs Office) is an agency of the Government charged with the administration of different
laws giving various benefits in favor of veterans and their orphans/or widows and parents; that it has
the power to adopt rules and regulations to implement said laws and to pass upon the merits and
qualifications of persons applying for rights and privileges extended by this Act pursuant to such rules
and regulations as it may adopt to insure the speedy and honest fulfillment of its aims and purposes.

3. On July 23, 1955, petitioner filed a claim (Claim No. Dis-12336) for disability pension under Section 9
of RA 65, with the Philippine Veterans Board (later succeeded by the Philippine Veterans Administration,
now Philippine Veterans Affairs Office), alleging that he was suffering from PTB, which he incurred in
line of duty.

4. Due to petitioner's failure to complete his supporting papers and submit evidence to establish his
service connected illness, his claim was disapproved by the Board of the defunct Philippine Veterans
Board on December 18, 1955.

5. On August 8, 1968, petitioner was able to complete his supporting papers and, after due investigation
and processing, the Board of Administrators found out that his disability was 100% thus he was awarded
the full benefits of section 9 of RA 65, and was therefore given a pension of P100.00 a month and with
an additional P 10.00 a month for each of his unmarried minor children pursuant to RA 1920, amending
section 9 of RA 65.

6. RA 5753 was approved on June 22, 1969, providing for an increase in the basic pension to P200.00 a
month and the additional pension, to P30.00 a month for the wife and each of the unmarried minor
children. Petitioner's monthly pension was, however, increased only on January 15, 1971, and by 25% of
the increases provided by law, due to the fact that it was only on said date that funds were released for
the purpose, and the amount so released was only sufficient to pay only 25% of the increase.

7. On January 15, 1972, more funds were released to implement fully RA 5753 and snow payment in full
of the benefits thereunder from said date.
WHEREFORE, it is respectfully prayed that a decision be rendered in accordance with the foregoing
stipulation of facts. It is likewise prayed that the parties be granted a period of (15) days within which to
file their memoranda. 2

Upon consideration of the foregoing and the Memoranda filed by the parties, the lower Court rendered
judgment against therein respondent Board of Administrators, the dispositive portion of which reads as
follows:

WHEREFORE, premises considered, judgment is hereby rendered for petitioner and the respondents are
ordered to make petitioner's pension effective as of December 18, 1955 at the rate of P50.00 per
month; and the rate increased to P100.00 per month plus P10.00 per month each for his ten unmarried
minor children below 18 years of age from June 22, 1957 up to August 7..1968; to pay the difference of
P100.00 per month plus P30.00 per month and P20.00 per month each for his ten unmarried children
below 18 years of age from June 22, 1969 up to January 15, 1971, the difference of P75.00 per month
plus P22.50 per month for his wife and P20.00 per month each for his unmarried nor children then
below 18 years of age from January 16, 1971 up to December 31, 1971.

SO ORDERED.

Manila, October 25, 1973. 3

In its Petition before this Court, the Board of Administrators of the Philippine Veterans Administration,
through the Office of the Solicitor General, challenges the abovementioned decision of the Court a quo
on the following grounds:

1. The lower Court erred in ordering the petitioners to retroact the effectivity of their award to
respondent Calixto V. Gasilao of full benefits under section 9 of RA 65 to December 18, 1955, the date
when his application was disapproved due to dis failure to complete his supporting papers and submit
evidence to establish his service connected illness, and not August 8, 1968, the date when he was able
to complete his papers and allow processing and approval of his application.

2. The lower Court erred in ordering payment of claims which had prescribed.

3. The lower Court erred in allowing payment of claims under a law for which no funds had been
released. 4
The question raised under the first assigned error is: When should private respondent Gasilao's pension
benefits start

The lower Court, quoting excerpts from Our decision in Begosa vs. Chairman Philippine Veterans
Administration, 5 ruled that Gasilao's pension benefits should retroact to the date of the disapproval of
his claim on December 18, 1955, and not commence from the approval thereon on August 8, 1968 as
contended by the Board of Administrators.

Petitioner maintains the stand that the facts of the Begosa case are not similar to those of the case at
bar to warrant an application of the ruling therein on the retroactivity of a pension award to the date of
prior disapproval of the claim. In the Begosa case, the Supreme Court speaking thru then Associate
Justice, now Chief Justice Fernando, affirmed the decision of the lower Court, and ruled in part as
follows:

From the facts just set out, it will be noted that plaintiff filed his said claim for disability pension as far
back as March 4, 1955; that it was erroneously disapproved on June 21, 1955, because his dishonorable
discharge from the Army was not a good or proper ground for the said disapproval and that on
reconsideration asked for by him on November 1, 1957, which he continued to follow up, the Board of
Administrators, Philippine Veterans Administration, composed of herein defendants, which took over
the duties of the Philippine Veterans Board, finally approved his claim on September 2, 1964, at the rate
of P30.00 a month. 6

Had it not been for the said error, it appears that there was no good ground to deny the said claim, so
that the latter was valid and meritorious even as of the date of its filing on March 4, 1955, hence to
make the same effective only as of the date of its approval on September 2, 1964 — according to
defendant's stand — would be greatly unfair and prejudicial to plaintiff. 7

In other words, the favorable award which claimant Begosa finally obtained on September 2, 1964 was
made to retroact to the date of prior disapproval of the claim on June 2, 1955 for the reason that such
disapproval was erroneously made.

In the instant case, on the other hand, the herein claim of respondent Gasilao was denied on December
18, 1955 because of his "failure to complete his supporting papers and submit evidence to establish his
service-connected illness" (Stipulation of Facts, Par. 4, ante). Nonetheless, the Stipulation of Facts
admitted in par. 1 that "Petitioner was a veteran in good standing during the last World War that took
active participation in the liberation drive against the enemy, and due to his military service, he was
rendered disabled." From this admission in par. 1, it can reasonably be deduced that the action on the
claim of Gasilao was merely suspended by the Philippine Veterans Administration pending the
completion of the required supporting papers and evidence to establish his service-connected illness.
Hence, Our ruling in the Begosa case making retroactive the award in favor of the veteran still holds.

Republic Act No. 65 otherwise known as the Veterans' Bill of Rights, as amended, does not explicitly
provide for the effectivity of pension awards. However, petitioner seeks to remedy this legislative
deficiency by citing Section 15 of the law which in part reads as follows:

Sec. 15. Any person who desires to take advantage of the rights and privileges provided for in this Act
should file his application with the Board ...

Petitioner contends that since the foregoing section impliedly requires that the application filed should
first be approved by the Board of Administrators before the claimant could receive his pension,
therefore, an award of pension benefits should commence form the date of he approval of the
application.

This stand of the petitioner does not appear to be in consonance with the spirit and intent of the law,
considering that Republic Act 65 is a veteran pension law which must be accorded a liberal construction
and interpretation in order to favor those entitled to the rights, privileges and benefits granted
thereunder, among which are the right to resume old positions in the government, educational benefits,
the privilege to take promotional examinations, a life pension for the incapacitated, pensions for widow
and children, hospitalization and medical care benefits.

As it is generally known, the purpose of Congress in granting veteran pensions is to compensate, as far
as may be, a class of men who suffered in the service for the hardships they endured and the dangers
they encountered, 8 and more particularly, those who have become incapacitated for work owing to
sickness, disease or injuries sustained while in line of duty. 9 A veteran pension law is, therefore, a
governmental expression of gratitude to and recognition of those who rendered service for the country,
especially during times of war or revolution, by extending to them regular monetary aid. For this reason,
it is the general rule that a liberal construction is given to pension statutes in favor of those entitled to
pension. Courts tend to favor the pensioner, but such constructional preference is to be considered with
other guides to interpretation, and a construction of pension laws must depend on its own particular
language. 10

Significantly, the original text of RA 65 provided that:

Sec. 6. It also shall be the duty of the Board (then the Philippine Veterans Board) to pass upon the merits
and qualifications of persons applying for the rights and/or privileges extended by this Act, pursuant to
such rules as it may adopt to insure the speedy and honest fulfillment of its aims and purposes.
(Emphasis supplied.)

The foregoing provision clearly makes it incumbent upon the implementing Board to carry out the
provisions of the statute in the most expeditious way possible and without unnecessary delay. In the
Begosa case, it took nine years (from June 2, 1955 to September 2, 1964) before the claimant finally
obtained his pension grant, whereas in the instant case, it took about twelve years (from December,
1955 to August 8, 1968) for respondent Gasilao to receive his pension claim. To Our mind, it would be
more in consonance with the spirit and intentment of the law that the benefits therein granted be
received and enjoyed at the earliest possible time by according retroactive effect to the grant of the
pension award as We have done in the Begosa case.

On the other hand, if the pension awards are made effective only upon approval of the corresponding
application which would be dependent on the discretion of the Board of Administrators which as noted
above had been abused through inaction extending to nine years, even to twelve years, the noble and
humanitarian purposes for which the law had enacted could easily be thwarted or defeated.

On the issue of prescription, petitioner cites Article 1144 of the Civil Code which provides:

Art. 1144. The following actions must be brought within ten years from the time the right of action
accrues:

(1) Upon a written contract;

(2) Upon an obligation created by law; and

(3) Upon a judgment.

Petitioner now contends that since the action was filed in the lower Court on April 13, 1973 seeking the
payment of alleged claims which have accrued more than ten (10) years prior to said date, the same
should have been disallowed as to the prescribed claims.
The obligation of the government to pay pension was created by law (Sec. 9, R.A. 65). Hence, the ten-
year prescriptive period should be counted from the date of passage of the law which is September 25,
1946, the reason being that it is only from said date that private respondent could have filed his
application. Taking September 25, 1946 as the point of reference, the actual filing of Gasilao's
application on July 23, 1955 was clearly made within and effectively interrupted the prescriptive period.
It is not the date of the commencement of the action in the lower Court which should be reckoned with,
for it was not on said date that Gasilao first sought to claim his pension benefits, but on July 23, 1955
when he filed his application with the defunct Philippine Veterans Board. As We had the occasion to
state in the case of Vda. de Nator vs. C.I.R., 11 "the basis of prescription is the unwarranted failure to
bring the matter to the attention of those who are by law authorized to take cognizance thereof."

The Stipulation of Facts do not show and neither do the records indicate when Gasilao attempted to
reinstate his claim after the same was disapproved on December 18, 1955. What is evident is that he did
take steps to reinstate his claim because on August 8, 1968, herein petitioner finally approved his
application. We find it more logical to presume that upon being properly notified of the disapproval of
his application and the reasons therefor, Gasilao, being the interested party that he was proceeded to
work for the completion of the requirements of the Board, as in fact he was successful in meeting such
requirements. There is nothing in the record to show intentional abandonment of the claim to as to
make the prescriptive period continue to run again.

The third ground relied upon in support of this Petition involves the issue as to whether or not the
payment of increased pension provided in the amendatory Act, R.A. 5753, could be ordered, even where
there was no actual release of funds for the purpose, although the law itself expressly provided for an
appropriation. In the case of Board of Adminitrators, Philippine Veterans Administration vs. Hon. Agcoili,
et al., 12 penned by Chief Justice Fred Ruiz Castro, the same issue was treated in this wise:

... The inability of the petitioner to pay Abrera the differential of P60.00 in monthly pension is attributed
by it, in its own words, "to the failure of Congress to appropriate the necessary funds to cover all claims
for benefits, pensions and allowances." And the petitioner states that it has "no alternative but to
suspend (full implementation of said laws until such time, as sufficient funds have been appropriated by
Congress" to cover the total amount of all approved claims.

We find the explanation of the petitioner satisfactory, but we nevertheless hold that as a matter of law
Abrera is entitled to a monthly pension of P120.00 from January 1, 1972 when Republic Act 5753 was
implemented up to the present, if his physical disability rating has continued and continues to be 60%.
Payment to him of what is due him from January 1, 1972 must however remain subject to the
availability of Government funds duly set aside for the purpose and subject further periodic re-rating of
his physical disability.
But even if we have thus defined the precise terms, nature and scope of the entitlement of the
respondent Abrera, for the guidance of petitioner, we nevertheless refrain from ordering the petitioner
to pay the amount of P120.00 per month from January 1, 1972 that is due to the respondent by virtue of
the mandate of section 9 of Republic Act 65, as amended by Republic Act 5753, because the
Government has thus far not provided the necessary funds to pay all valid claims duly approved under
the authority of said statute. 13 (Emphasis supplied.)

ACCORDINGLY, the judgment of the Court a quo is hereby modified to read as follows:

WHEREFORE, premises considered, the Board of Administrators of the Philippine Veterans

Administration (now the Philippine Veterans Affairs Office) is hereby ordered to make Gasilao's pension
effective December 18, 1955 at the rate of P50-00 per month plus P10.00 per month for each of his then
unmarried minor children below 18, and the former amount increased to P100.00 from June 22, 1957 to
August 7, 1968.

The differentials in pension to which said Gasilao, his wife and his unmarried minor children below 18
are entitled for the period from June 22, 1969 to January 14, 1972 by virtue of Republic Act No. 5753 are
hereby declared subject to the availability of Government funds appropriated for the purpose.

SO ORDERED.

Teehankee (Chairman), Makasiar, Fernandez, Melencio-Herrera and Plana, JJ., concur.

CASE DIGEST: BOARD OF ADMINISTRATORS OF PVA V BAUTISTA

BOARD OF ADMINISTRATORS OF PVA V BAUTISTA

G.R. No. L-37867

Facts:

In 1955, private respondent Gasilao, a war veteran during the World War II, filed a claim for disability
before the public petitioners under Section 9 of RA 65. The claim was denied. Meanwhile, the said act
was amended by RA 1362, including now benefits for the pensioner’s unmarried children below 18
years. Another amendment was made in 1957, increasing the life pension of the veteran but retaining
the same benefits for his children.

In 1968, after 12 years following the disapproved claim, it was reconsidered and the claim was finally
approved. The respondent, thereafter, requested from the petitioners that his claim be made
retroactive from the time his original claim was disapproved. The petitioners did not act on his request.
Private respondent claims that he was deprived of his right to the pension from the time his claim was
disapproved until the time of reconsideration. He filed a petition before the lower court and was
granted.

The petitioners through the Solicitor General challenged the decision of the lower court. Hence, this
petition.

Issue:

Whether or not the claim for pension works in the retroactive.

Held:

Yes. Taking September 25, 1946 as the point of reference, the original claim of the respondent was
within 10 years, as prescribed by law. It would be more in consonance with the spirit and intention of
the law that the benefits therein granted be received and enjoyed at the earliest possible time by
according retroactive effect to the grant of the pension award. If the pension awards are made effective
only upon approval of the corresponding application which would be dependent on the discretion of the
Board of Administrators which as noted above had been abused through inaction extending to nine
years, even to twelve years, the noble and humanitarian purposes for which the law had enacted could
easily be thwarted or defeated.
Republic of the Philippines

SUPREME COURT

Manila

FIRST DIVISION

G.R. No. 107797 August 26, 1996

PURITA SALVATIERRA, ELENITA SALVATIERRA NUNEZ, ANSELMO SALVATIERRA, JR., EMELITA

SALVATIERRA, and ROMEL SALVATIERRA, petitioners,

vs.

THE HONORABLE COURT OF APPEALS and SPS. LINO LONGALONG and PACIENCIA MARIANO,
respondents.

HERMOSISIMA, JR. J.:p

The intricate yet timeworn issue of prescription has come to the fore in this case. Which prescriptive
period for actions for annulment should prevail, Art. 1391 of the New Civil Code which limits the filing of
actions to four (4) years or Art. 1144 of the same Code which limits the period of the filing of actions on
certain grounds to ten years? Likewise, at issue is whether or not there was a double sale to a party or
parties under the facts obtaining.

The petitioners in this case filed the herein petition for certiorari, assailing as they do the decision of the
Court of Appeals which held 1:

WHEREFORE, the decision appealed from is herein REVERSED, defendants-appellees are ordered to
reconvey to plaintiffs-appellants the 149-sq. m. portion of Lot. 26 registered in the name of Anselmo
Salvatierra under OCT 0-4221 as described in the deed of sale Exh. "A" or "1" of this case; and
defendants-appellees are furthermore ordered to pay plaintiffs-appellants the amount of P5,000.00 as
attorney's fees.

The antecedent facts are not disputed:

In 1930, Enrique Salvatierra died intestate and without any issue. He was survived by his legitimate
brothers: Tomas, Bartolome, Venancio and Macario, and sister Marcela, all surnamed Salvatierra. His
estate consisted of three (3) parcels of land, more particularly described in the following manner:

Cad. Lot No. 25 covered by Tax Declaration No. 11950

A parcel of land Lot No. 25, situated at Poblacion, San Leonardo, Nueva Ecija. Bounded on the NE-Lots
Nos. 26 & 27; on the SE-Rizal St., SW-Lot No. 24; and on the NW-Bonifacio Street. Containing an area of
ONE THOUSAND ONE HUNDRED AND SIXTEEN (1,116) sq. m. more or less and assessed at P1,460.00.

Cad. Lot No. 26 covered by Tax Decl. No. 11951

A parcel of land situated at Poblacion, San Leonardo, Nueva Ecija, Lot No. 26, bounded on the NE-Lot
No. 29 & 27; on the SE-Lot No. 25; and on the NW-Bonifacio St. Containing an area of SEVEN HUNDRED
FORTY NINE (749) sq. m. more or less and assessed at P720.00.

Cad. Lot No. 27 Covered by Tax Decl. No. 11949

A parcel of land situated at Poblacion, San Leonardo, Nueva Ecija, Lot No. 27, bounded on the NE-Lot
No. 28; SE-Rizal St.; SW-Lot No. 25 and on the NW-Lot No. 26. Containing an area of SIX HUNDRED
SEVENTY (670) sq. m. more or less.

(Exh. :B: or "2")

On May 4, 1966, Macario Salvatierra sold Lot No. 26 to his son, Anselmo Salvatierra by means of a deed
of sale, and in consideration of the amount of P1,000.00. Meanwhile, Marcela, prior to her death sold
her 1/5 undivided share in the Estate of Enrique Salvatierra to her brother, Venancio. After the death of
Bartolome, his heirs Catalina and Ignacia Marquez sold his 1/5 undivided share to Tomas and his wife,
Catalina Azarcon.

On September 24, 1968, an "Extrajudicial Partition with Confirmation of Sale" was executed by and
among the surviving legal heirs and descendants of Enrique Salvatierra, which consisted of the
aforementioned Lot No. 25, 26 and 27. By virtue of the sale executed by Marcela in favor of Venancio,
the latter now owns 2/5 shares of the estate. By virtue of the sale by Bartolome's heirs Catalina and
Ignacia, of his undivided shares to Tomas, now deceased, represented by his widow, Catalina Azarcon,
the latter now owns 2/5 shares in the said estate. Anselmo Salvatierra represented his father Macario,
who had already died. The extrajudicial partition with confirmation of sale summed up the shares
assigned to the heirs of Enrique Salvatierra:

To: VENANCIO SALVATIERRA — 1,041 sq. m. known as Lot

No. 27 covered by Tax Decl. N. 11949 and portion of Lot

No. 26 covered by Tax Decl. No. 11951;

To: Macario Salvatierra now ANSELMO SALVATIERRA — 405 sq. m. known as Lot No. 26-part and
covered by Tax. Decl. No. 11951;

To: HEIRS OF TOMAS SALVATIERRA — 1,116 sq. m. the whole of Lot No. 25 and declared under Tax
Decl. No. 11950.

Legal Heirs of Tomas Salvatierra are:

Montano Salvatierra

Anselmo Salvatierra

Donata Salvatierra

Francisco Salvatierra

Cecilio Salvatierra

Leonilla Salvatierra

(Exhs. "B-1", and 2-B", p. 8, id.).2

(Emphasis supplied)

Thereafter, on June 15, 1970, Venancio sold the whole of Lot No. 27 and a 149-sq. m. portion of Lot 26
for the consideration of P8,500.00 to herein respondent spouses Lino Longalong and Paciencia Mariano.
The Longalongs took possession of the said lots. It was discovered in 1982 (through a relocation survey)
that the 149 sq. m. portion of Lot No. 26 was outside their fence. It turned out that Anselmo Salvatierra
was able to obtain a title, Original Certificate of Title No. 0-4221 in his name, the title covering the whole
of Lot No. 26 which has an area of 749 sq. m.

Efforts to settle the matter at the barangay level proved futile because Purita Salvatierra (widow of
Anselmo) refused to yield to the demand of Lino Longalong to return to the latter the 149 sq. m. portion
of Lot No. 26.

Private respondents Longalong then filed a case with the RTC for the reconveyance of the said portion of
Lot 26. The court a quo dismissed the case on the following grounds: 1) that Longalong, et al. failed to
establish ownership of the portion of the land in question, and 2) that the prescriptive period of four (4)
years from discovery of the alleged fraud committed by defendants' predecessor Anselmo Salvatierra
within which plaintiffs should have filed their action had already elapsed. 3

On appeal, the Court of Appeals ruled:

To start with, a vendor can sell only what he owns or what he is authorized to sell (Segura v. Segura, 165
SCRA 368). As to the co-owner of a piece of land, he can of course sell his pro indiviso share therein to
anyone (Art. 493, New Civil Code; Pamplona v. Moreto, 96 SCRA 775), but he cannot sell more than his
share therein.

The deed of extrajudicial partition with confirmation of previous sale Exh. "B" or "2" executed by the
heirs of Enrique Salvatierra was explicit that the share of Anselmo Salvatierra which he got from his
father Macario Salvatierra thru sale, was only Four Hundred Five (405) sq. mts. out of Lot No. 26 (Exhs.
"B-1" and "B-2"), the whole lot of which has an area of 749 sq. mts., so that 344 sq. mts. of said lot do
not pertain to Anselmo Salvatierra and his heirs, herein defendants-appellees. This must be the reason
why, in said deed of extrajudicial partition, Venancio Salvatierra was still given a "portion of Lot No. 26
covered by Tax Declaration No. 11951" (Exh. "B-3", p. 7, Rec.), for logically, if the whole of Lot No. 26
measuring 749 sq. mts. had been given to Anselmo Salvatierra, Venancio Salvatierra would no longer be
entitled to a portion of said lot. And as both parties to this case do not at all dispute the truth,
correctness, and authenticity of the deed of extrajudicial partition with confirmation of sale Exh. "B" or
"2" dated September 24, 1968, as in fact both parties even marked the same as their own exhibit, we
have no choice but simply to enforce the provisions of said deed.

Now, as we have stated earlier, Macario Salvatierra, even before the extrajudicial partition of the three
lots left by the late Enrique Salvatierra among his heirs, could very well dispose only of his pro indiviso
share in said lots, as he in fact did on May 4, 1966 in a deed of sale in favor of his son Anselmo
Salvatierra; and two years later, on September 24, 1968, when the deed of extrajudicial partition Exh.
"B" or "2" was executed by the heirs of Enrique Salvatierra, it was stipulated that Macario's share in Lot
No. 26 was only 405 sq. mts. thereof, which share Macario had already sold to his son Anselmo
Salvatierra. As of September 24, 1968, the date of said deed of partition, then, Anselmo Salvatierra
already knew that he had only acquired 405 sq. mts. of Lot No. 26 from his father Macario Salvatierra,
and yet on May 20, 1980, or 12 years later, he proceeded with the registration of the earlier deed of sale
between him and his father and of the whole Lot No. 26 with an area of 749 sq. mts. although he
already knew through the deed of extrajudicial partition Exh. "A" or "1" that he was only entitled to 405
sq. mts. out of Lot No. 26, and which knowledge he could not deny as he was one of the signatories to
said deed of extrajudicial partition (Exh. "B-1" or "2-b").

It is, therefore, obvious and clear, on the basis of the evidence on record, that when Anselmo Salvatierra
registered the deed of sale Exh. "7" dated May 4, 1966 between him and his father Macario Salvatierra
on May 20, 1980, and when he obtained a title in his name over the whole of Lot No. 26 with an area of
749 sq. mts., he did so with intent to defraud the other heirs of the late Enrique Salvatierra, particularly
Venancio Salvatierra and the latter's heirs and successors-in-interest, for he, Anselmo Salvatierra, knew
that he was entitled to only 405 sq. mts. out of the whole Lot No. 26 with an area of 749 sq. mts. In fact,
a closer look at the deed of sale Exh. "7" dated May 4, 1966 between father and son, Macario and
Anselmo, reveals that the word and figure "SEVEN HUNDRED FORTY NINE (749)" sq. mts. written therein
appear to have been only superimposed over another word and figure that had been erased, and even
the word "FORTY NINE" was merely inserted and written above the regular line, thereby creating the
strong conviction that said word and figure were altered to suit Anselmo's fraudulent design (p. 12,
Rec.).

Apparently, the lower court failed to examine carefully the deed of extrajudicial partition Exh. "B" or "2"
and the deed of sale Exh. "7" between Macario Salvatierra and his son Anselmo Salvatierra, for had it
done so, it could not have failed to notice that Anselmo Salvatierra received only 405 sq. mts. out of Lot
No. 26 from his father Macario Salvatierra, not the whole Lot No. 26 measuring 749 sq. mts. The lower
court was also of the mistaken impression that this case involves a double sale of Lot No. 26, when the
truth is that Macario Salvatierra could only sell and, therefore, sold only 405 sq. mts. out of Lot No. 26 to
his son Anselmo by virtue of the deed of sale Exh. "7", not the whole 749 sq. mts. of said lot, and
plaintiffs in turn bought by virtue of the deed of sale Exh. "A" 149 sq. mts. out of the remaining area of
344 sq. mts. of Lot No. 26 from Venancio Salvatierra, to whom said 344-sq. mt. portion of Lot No. 26 was
given under the deed of partition Exh. "B" or "2".
Neither can we agree with the lower court that even if plaintiffs-appellants had established their
ownership over the 149-sq. mt. portion of Lot No. 26 in question, they are already barred by
prescription to recover said portion from defendants. In this connection, the lower court ratiocinated
that an action for reconveyance should be filed within four (4) years from the discovery of the fraud,
citing Esconde v. Barlongay, 152 SCRA 603, which in turn cited Babin v. Medalla, 108 SCRA 666, so that
since plaintiffs-appellants filed their action for reconveyance only on November 22, 1985 or five years
after the issuance of Anselmo Salvatierra's title over Lot No. 26 on May 20, 1980, said court held that
appellant's action for reconveyance against defendants has already prescribed.

At this juncture, we find the need to remind the court a quo as well as other trial courts to keep abreast
with the latest jurisprudence so as not to cause possible miscarriages of justice in the disposition of the
cases before them. In the relatively recent case of Caro v. CA, 180 SCRA 401, the Supreme Court clarified
the seemingly confusing precedents on the matter of prescription of actions for reconveyance of real
property, as follows:

We disagree. The case of Liwalug Amerold, et al. v. Molok Bagumbaran, G.R. L-33261, September 30,
1987, 154 SCRA 396 illuminated what used to be a gray area on the prescriptive period for an action to
reconvey the title to real property and corrollarily, its point of reference:

. . . It must be remembered that before August 30, 1950, the date of the effectivity of the new Civil
Code, the Old Code of Civil Procedure (Act No. 190) governed prescription. It provided:

Sec. 43. Other civil actions; how limited. — Civil actions other than for the recovery of real property can
only be brought within the following periods after the right of action accrues:

3. Within four years: . . . An action for relief on the ground of fraud, but the right of action in such
case shall not be deemed to have accrued until the discovery of the fraud:

xxx xxx xxx

In contract under the present Civil Code, we find that just as an implied or constructive trust in an
offspring of the law (Art. 1465, Civil Code), so is the corresponding obligation to reconvey the property
and the title thereto in favor of the true owner. In this context, and vis-a-vis prescription, Article 1144 of
the Civil Code is applicable.
Art. 1144. The following actions must be brought within ten years from the time the right of action
accrues:

1) Upon a written contract;

2) Upon an obligation created by law;

3) Upon a judgment;

xxx xxx xxx

An action for reconveyance based on an implied or constructive trust must perforce prescribe in ten
years and not otherwise. A long line of decisions of this Court, and of very recent vintage at that,
illustrated this rule. Undoubtedly, it is now well-settled that an action for reconveyance based on an
implied or constructive trust prescribes in ten years from the issuance of the Torrens title over the
property. The only discordant note, it seems, is Balbin v. Medalla, which states that the prescriptive
period for a reconveyance action is four years. However, this variance can be explained by the
erroneous reliance on Gerona v. de Guzman. But in Gerona, the fraud was discovered on June 25, 1948,
hence Section 43(3) of Act No. 190 was applied, the New Civil Code not coming into effect until August
30, 1950 as mentioned earlier. It must be stressed, at this juncture, that Article 1144 and Article 1456,
are new provisions. They have "no counterparts in the old Civil Code or in the old Code of Civil
Procedure, the latter being than resorted to as legal basis of the four-year prescriptive period for an
action for reconveyance of title of real property acquired under false pretenses.

An Action for reconveyance has its basis in Section 53, paragraph 3 of Presidential Decree No. 1529,
which provides:

In all cases of registration procured by fraud, the owner may pursue all his legal and equitable remedies
against the parties to such fraud without prejudice, however, to the rights of any innocent holder of the
decree of registration on the original petition or application, . . .

This provision should be read in conjunction with Article 1456 of the Civil Code, which provides:
Art. 1456. If property is acquire through mistake or fraud, the person obtaining it is, by force of
law, considered a trustee of an implied trust for the benefit of the person from whom the property
comes.

The law thereby creates the obligation of the trustee to reconvey the property and the tile thereto in
favor of the true owner. Correlating Section 53, paragraph 3 of Presidential Decree No. 1529 and Article
1456 of the Civil Code with Article 1144 (2) of the Civil Code, supra, the prescriptive period for the
reconveyance of fraudulently registered real property is ten (10) years reckoned from the date of the
issuance of the certificate of title. In the present case, therefore, inasmuch as Civil Case No. 10235 was
filed on June 4, 1975, it was well-within the prescriptive period of ten (10) years from the date of the
issuance of "Original Certificate of Title No. 0-6836 on September 17, 1970."

(All Emphasis Supplied).

And the above ruling was re-affirmed in the very recent case of Tale vs. C.A. G.R. No. 101028,
promulgated only last April 23, 1992.

Guided by the above clarificatory doctrine on prescription of actions for reconveyance of real property,
it is obvious that the lower court erred in relying on the discredited ruling in Esconde v. Barlongay,
supra, which case in turn relied on the earlier discredited case of Balbin v. Medalla, also supra, which
mistakenly limited the running of the prescriptive period in an action for reconveyance of real property
to only four (4) years form the issuance of the certificate of title.

Since OCT No. 0-4221 over Lot No. 26 was issued to Anselmo Salvatierra on May 20, 1980, appellants'
filing of the instance action for reconveyance on November 22, 1985 was well within the ten (10) year
prescriptive period provided by law for such action.

A motion for reconsideration having been denied, petitioners brought this petition to set aside the
decision of the respondent appellate court and to affirm in toto the decision of the trial court.

Petitioners assail the decision of the respondent appellate court for its failure to consider the application
and interpretation of certain provisions of the New Civil Code in the case at bar, namely Articles 1134,
493, 1088, 1544, 1431, 1396, and 1391. 4
Since petitioners invoke the abovementioned provisions of law, it is apparent that they rely on the
theory that this is a case of double sale of Lot No. 26 to both petitioners and respondents Longalong, et
al. A perusal of the records and evidence (exhibits and annexes), however, reveals otherwise. Both
parties did not dispute the existence and contents of the Extrajudicial Partition with Confirmation of
Sale, as both presented them as their respective exhibits (Exh. "B-1" and "2"). The parties may not have
realized it, but the deciding factor of this dispute is this very document itself. It is very clear therein that
Macario Salvatierra's share in the estate of the deceased Enrique Salvatierra is only 405 sq. m. out of the
749 sq. m. comprising Lot No. 26. Since Venancio Salvatierra, under this document, is to get a portion of
Lot No. 26 in addition to Lot No. 27, then it follows that Venancio is entitled to the remaining 344 sq. m.
of Lot No. 26, after deducting the 405 sq. m. share of Macario.

We find no ambiguity in the terms and stipulations of the extrajudicial partition. The terms of the
agreement are clear and unequivocal, hence the literal and plain meaning thereof should be observed. 5
The applicable provision of law in the case at bar is Article 1370 of the New Civil Code which states:

Art. 1370. If the terms of a contract are clear and leave no doubt upon the intention of the
contracting parties, the literal meaning of its stipulation shall control.

Contracts which are the private laws of the contracting parties, should be fulfilled according to the literal
sense of their stipulations, if their terms are clear and leave no room for doubt as to the intention of the
contracting parties, for contracts are obligatory, no matter what their forms maybe, whenever the
essential requisites for their validity are present. 6

As such, the confirmation of sale between Macario and his son Anselmo, mentioned in the extrajudicial
partition involves only the share of Macario in the estate. The law is clear on the matter that where
there are two or more heirs, the whole estate of the decedent its, before its partition, owned in
common by such heirs, 7 and hence, the effect of the alienation or the mortgage, with respect to the co-
owners, shall be limited to the portion which may be alloted to him in the division upon the termination
of the co-ownership. 8

It goes without saying, therefore, that what Anselmo bought from his father in 1966 was only his
father's share in the estate which turned out to be 405 sq. m. of Lot No. 26, as agreed upon during their
extrajudicial partition, in which Anselmo was a signatory. The registration of the whole Lot No. 26 in the
name of Anselmo Salvatierra was therefore, done with evident bad faith. A careful examination of Deed
of Sale (Exh. 7) dated May 4, 1966 between Macario and Anselmo (father and son) shows that an
alteration was perpetrated by the superimposition of the words and figure SEVEN HUNDRED FORTY
NINE (749) sq. m. over other words and figures therein. Besides, when Anselmo Salvatierra obtained the
Original Certificate of Title No. 0-4221 covering the whole of Lot No. 26 on May 20, 1980, he had already
known that he was entitled to only 405 sq. m. of the said lot since the extrajudicial partition has already
been executed earlier in 1968. Obviously, Anselmo's act of registering the whole Lot No. 26 in his name
was intended to defraud Venancio who was then legally entitled to a certain portion of Lot No. 26 by the
extrajudicial partition.

With regard to the issue as to prescription of the action, we agree with the respondents appellate court
that this action has not yet prescribed. Indeed, the applicable provision in the case at bar is Art. 1144 of
the New Civil Code which provides that:

Art. 1144. The following actions must be brought within ten years from the time the right of action
accrues:

(1) Upon written contract;

(2) Upon an obligation created by law; and

(3) Upon a judgment.

Art. 1391 9 of the same code, referred to by petitioners is not in point. This article must be read in
conjunction with Art. 1390 10 which refers to voidable contracts. This case at hand involves fraud
committed by petitioner Anselmo Salvatierra in registering the whole of Lot No. 26 in his name, with
evident bad faith. In effect, an implied trust was created by virtue of Art. 1456 of the New Civil Code
which states:

Art. 1456. If property is acquired through mistake or fraud, the person obtaining it is, by force of
law, considered a trustee of an implied trust for the benefit of the person from whom the property
comes.

Implied trust is defined as the right, enforceable solely in equity, to the beneficial enjoyment of
property, the legal title to which is vested in another and is further subdivided into resulting and
constructive trust. 11 While resulting trust is one raised by implication of law and presumed to have
been contemplated by the parties; constructive trust, on the other hand, is one raised by construction of
law or arising by operation of law. 12
This case more specifically involves constructive trust. In a more restricted sense, it is a trust not created
by any words, either expressly or impliedly, evincing a direct intention to create a trust, but by the
construction of equity in order to satisfy the demands of justice. 13 It does not arise by agreement or
intention but by operation of law. 14

In this connection, we hold that an action for reconveyance of registered land based on an implied trust
may be barred by laches. The prescriptive period for such actions is ten (10) years from the date the
right of action accrued. 15 We have held in the case of Armamento v. Central Bank 16 that an action for
reconveyance of registered land based on implied trust, prescribes in ten (10) years even if the decree of
registration is no longer open to review.

In Duque v. Domingo, 17 especially, we went further by stating:

The registration of an instrument in the Office of the Register of Deeds constitutes constructive notice to
the whole world, and, therefore, discovery of the fraud is deemed to have taken place at the time of
registration. Such registration is deemed to be a constructive notice that the alleged fiduciary or trust
relationship has been repudiated. It is now settled that an action on an implied or constructive trust
prescribes in ten (10) years from the date the right of action accrued.

The complaint for reconveyance was filed by the Longalong spouses on November 22, 1985, only five (5)
years after the issuance of the O.C.T.

No. 0-4221 over Lot No. 26 in the name of Anselmo Salvatierra. Hence prescription has not yet set in.

We find no reason to disturb the findings of the respondent Court of Appeals as to facts its said factual
findings having been supported by substantial evidence on record. They are final and conclusive and
may not be reviewed on appeal. The analysis by the Court of Appeals of the evidence on record and the
process by which it arrived at its findings on the basis thereof, impel conferment of the Supreme Court's
approval on said findings, on account of the intrinsic merit and cogency thereof no less than that Court's
superior status as a review tribunal. 18 No reversible errors can be attributed to the findings of the
respondent Court of Appeals because the decision herein assailed was properly supported by substantial
evidence on record, which were not in anyway impugned by the petitioners.

IN VIEW OF THE FOREGOING CONSIDERATIONS, we resolve to DENY the petition for want of merit, with
costs against petitioners.

SO ORDERED.
Padilla, Vitug and Kapunan, JJ., concur.

Bellosillo, J., took no part.

Footnotes

1 Rollo, p. 12.

2 Rollo, p. 19.

3 Rollo, p. 21.

4 Rollo, pp. 7-9 quoting:

"Art. 1134. Ownership and other real rights over immovable property are acquired by ordinary
prescription through possession of ten years. (1957a)

"Art. 493. Each co-owner shall have the full ownership of his part and of the fruits and benefits
pertaining thereto, and he may therefore alienate, assign or mortgage it, and even substitute another
person in its enjoyment, except when personal rights are involved. But the effect of the alienation or the
mortgage, with respect to the co-owners, shall be limited to the portion which may be allotted to him in
the division upon the termination of the co-ownership. (399)

"Art. 1088. Should any of the heirs sell his hereditary rights to a stranger before the partition, any or
all of the co-heirs may be subrogated to the rights of the purchaser by reimbursing him for the price of
the sale, provided they do so within the period of one month from the time they were notified in writing
of the sale by the vendor. (1067a).

"Art. 1544. If the same thing should have been sold to different vendees, the ownership shall be
transferred to the person who may have first taken possession thereof in good faith, if it should be
immovable property.
Should it be immovable property, the ownership shall belong to the person acquiring it who in good
faith first recorded it in the Registry of Property.

Should there be no inscription, the ownership shall pertain to the person who in good faith was first in
the possession; and, in the absence thereof, to the person who presents the oldest title, provided there
is good faith. (1473).

"Art. 1431. Through estoppel an admission or representation is rendered conclusive upon the
person making it, and cannot be denied or disproved as against the person relying thereon.

"Art. 1396. Ratification cleanses the contract from all its defects from the moment it was
constituted. (1313).

"Art. 1391. The action for annulment shall be brought within four years.

This period shall begin:

In cases of intimidation, violence or undue influence, from the time the defect of the consent ceases.

In case of mistake or fraud, from the time of the discovery of the same.

And when the action refers to contracts entered into by minors or other incapacitated persons, from the
time the guardianship ceases. (1301a)."

5 Pickel v. Alonzo, 111 SCRA 341.

6 Phil. American General Insurance Co., Inc. v. Mutuc, 61 SCRA 22.

7 Art. 1078, New Civil Code.

8 Art. 493, New Civil Code.

9 Art. 1391. The action for annulment shall be brought within four years.

This period shall begin:

In cases of intimidation, violence or undue influence, from the time the defect of the consent ceases.

In case of mistake of fraud, from the time of the discovery of the same.

And when the action refers to contracts entered into by minors or other

incapacitated persons, from the time the guardianship ceases. (1301a).

10 Art. 1390 The following contracts are voidable or annullable, even though there may have
been no damage to the contracting parties:

(1) Those where one of the parties is incapable of giving consent to a contract;

(2) Those where the consent is vitiated by mistake, violence, intimidation, undue influence or fraud.

These contracts are binding, unless they are annulled by a proper action in court. They are susceptible of
ratification. (n)

11 Ramos, et al. v. 61 SCRA 284.

12 Ibid.

13 Ibid.
14 Ibid.

15 Vda. de Nacalaban v. CA, 80 SCRA 428.

16 96 SCRA 178.

17 80 SCRA 654.

18 Lauron v. Court of Appeals, 184 SCRA 215.

Republic of the Philippines

SUPREME COURT

Manila

SECOND DIVISION

G.R. No. L-25316 February 28, 1979

KAPISANAN NG MGA MANGGAGAWA SA MANILA RAILROAD COMPANY CREDIT UNION, INC., petitioner-
appellant,

vs.

MANILA RAILROAD COMPANY, respondent appellee.

Gregorio E. Fajardo for appellant.

Gregorio Baroque for appellee.

FERNANDO, J.:

In this mandamus petition dismissed by the lower court, petitioner-appellant would seek a reversal of
such decision relying on what it considered to be a right granted by Section 62 of the Republic Act No.
2023, more specifically the first two paragraphs thereof: "... (1) A member of a cooperative may,
notwithstanding the provisions of existing laws, execute an agreement in favor of the co-operative
authorizing his employer to deduct from the salary or wages payable to him by the employer such
amount as may be specified in the agreement and to pay the amount so deducted to the co-operative in
satisfaction of any debt or other demand owing from the member to the co-operative. (2) Upon the
exemption of such agreement the employer shall if so required by the co-operative by a request in
writing and so long as such debt or other demand or any part of it remains unpaid, make the claimant
and remit forth with the amount so deducted to the co-operative."1

To show that such is futile, the appealed decision, as quoted in the brief for petitioner-appellant, stated
the following: "Then petitioner contends that under the above provisions of Rep. Act 2023, the loans
granted by credit union to its members enjoy first priority in the payroll collection from the respondent's
employees' wages and salaries. As can be clearly seen, there is nothing in the provision of Rep. Act 2023
hereinabove quoted which provides that obligation of laborers and employees payable to credit unions
shall enjoy first priority in the deduction from the employees' wages and salaries. The only effect of Rep.
Act 2023 is to compel the employer to deduct from the salaries or wages payable to members of the
employees' cooperative credit unions the employees' debts to the union and to pay the same to the
credit union. In other words, if Rep. Act 2023 had been enacted, the employer could not be compelled
to act as the collecting agent of the employees' credit union for the employees' debt to his credit union
but to contend that the debt of a member of the employees cooperative credit union as having first
priority in the matter of deduction, is to write something into the law which does not appear. In other
words, the mandatory character of Rep. Act 2023 is only to compel the employer to make the deduction
of the employees' debt from the latter's salary and turn this over to the employees' credit union but this
mandatory character does not convert the credit union's credit into a first priority credit. If the
legislative intent in enacting pars. 1 and 2 of Sec. 62 of Rep. Act 2023 were to give first priority in the
matter of payments to the obligations of employees in favor of their credit unions, then, the law would
have so expressly declared. Thus, the express provisions of the New Civil Code, Arts. 2241, 2242 and
2244 show the legislative intent on preference of credits. 2

Such an interpretation, as could be expected, found favor with the respondent-appellee, which, in its
brief, succinctly pointed out "that there is nothing in said provision from which it could be implied that it
gives top priority to obligations of the nature of that payable to petitioner, and that, therefore,
respondent company, in issuing the documents known as Exhibit "3" and Exhibit "P", which establish the
order of priority of payment out of the salaries of the employees of respondent-appellee, did not violate
the above-quoted Section 62 of Republic Act 2023. In promulgating Exhibit "3", [and] Exhibit "P"
respondent, in effect, implemented the said provision of law. 3

This petition being one for mandamus and the provision of law relied upon being clear on its face, it
would appear that no favorable action can be taken on this appeal. We affirm.

1. The applicable provision of Republic Act No. 2023 quoted earlier, speaks for itself. There is no
ambiguity. As thus worded, it was so applied. Petitioner-appellant cannot therefore raise any valid
objection. For the lower court to view it otherwise would have been to alter the law. That cannot be
done by the judiciary. That is a function that properly appertains to the legislative branch. As was
pointed out in Gonzaga v. Court of Appeals: 4 "It has been repeated time and time again that where the
statutory norm speaks unequivocally, there is nothing for the courts to do except to apply it. The law,
leaving no doubt as to the scope of its operation, must be obeyed. Our decisions have consistently born
to that effect. 5.

2. Clearly, then, mandamus does not lie. Petitioner-appellant was unable to show a clear legal
right. The very law on which he would base his action fails to supply any basis for this petition. A more
rigorous analysis would have prevented him from instituting a a suit of this character. In J.R.S. Business
Corporation v. Montesa, 6 this Court held. "Man-damus is the proper remedy if it could be shown that
there was neglect on the part of a tribunal in the performance of an act, which specifically the law
enjoins as a duty or an unlawful exclusion of a party from the use and enjoyment of a right to which he
is entitled. 7 The opinion continued in this wise:"According to former Chief Justice Moran," only specific
legal rights may be enforced by mandamus if they are clear and certain. If the legal rights are of the
petitioner are not well defined, clear, and certain, the petition must be dismissed. In support of the
above view, Viuda e Hijos de Crispulo Zamora v. Wright was cited. As was there categorically stated:
"This court has held that it is fundamental that the duties to be enforced by mandamus must be those
which are clear and enjoined by law or by reason of official station, and that petitioner must have a
clear, legal right to the thing and that it must be the legal duty of the defendant to perform the required
act.' As expressed by the then Justice Recto in a subsequent opinion: "It is well establish that only
specific legal rights are enforceable by mandamus, that the right sought to be enforced must be certain
and clear, and that the writ not issue in cases where the right is doubtful." To the same effect is the
formulation of such doctrine by former Justice Barrera: "Stated otherwise, the writ never issues in
doubtful cases. It neither confers powers nor imposes duties. It is simply a command to exercise a power
already possessed and to perform a duty already imposed." 8 So it has been since then. 9 The latest
reported case, Province. of Pangasinan v. Reparations Commission, 10 this court speaking through
Justice Concepcion Jr., reiterated such a well-settled doctrine: "It has also been held that it is essential to
the issuance of the writ of mandamus that the plaintiff should have a clear legal right to the thing
demanded, and it must be the imperative duty of the defendant to perform the act required. It never
issues in doubtful cases. 11

WHEREFORE, the appealed decision is affirmed. No pronouncement as to costs.

Barredo, Antonio, Concepcion, Jr., Santos and Abad Santos, JJ., concur.

Aquino, J., took no part.

#Footnotes

1 Section 62 of Republic Act No. 2023 (1957).

2 Brief for the Petitioner-Appellant, 7-8.

3 Brief for the Respondent-Appellee, 4-5.

4 L-27455, June 28,1973, 61 SCRA 381.

5 Ibid, 385. The following cases were cited: People v. Mapa, L-22301, Aug. 30, 1967, 20 SCRA
1164; Pacific Oxygen & Acetylene Co. v. Central Bank, L-2l88l, March 1, 1968, 22 SCRA 917; Dequito v.
Lopez, L-27757, March 28, 1968, 22 SCRA 1352; Padilla v. City of Pasay L-24039, June 29, 1968, 23 SCRA
1349, Garcia v. Vasquez, L-26808, March 28, 1969, 27 SCRA 505; La Perla Cigar and Cigarette Factory v.
Capapas, L-27948 & 28001-11, July 31, 1969, 28 SCRA 1085; Mobil Oil Phil. Inc. v. Diocares, L-26371, July
30, 1969, 29 SCRA 656; Luzon Surety Co, Inc. v. De Garcia, L-25669, Oct. 31, 1969, 30 SCRA 111; Vda. de
Macabenta v. Davao Stevedore Terminal Co., L-27489, April 30, 1970, 32 SCRA 563; Republic Flour Mills,
Inc. v. Commissioner of Customs L-28463, May 31, 1971, 39 SCRA 269, Maritime Co. of the Phil. v.
Reparations L-29203, July 26, 1971, 40 SCRA 70, Allied Brokerage Corp. v. Commissioner of Customs, L-
27641, Aug. 31, 1971, 40 SCRA 555.

6 L-23783, April 25, 1968, 23 SCRA 190.

7 Ibid, 197.

8 Ibid, 197-198. The citation from former Chief Justice Moran is found in Comments on the Rules
of Court, 1963 ed., at 172; the Crispulo Zamora decision is reported in 53 Phil 613, 621 (1929). the
citation from Justice Recto is found in Sanson v. Barrios, reported in 63 Phil. 198, 202 (1936); and that
from Justice Barrera, from Alzate V. Aldana in 118 Phil. 221, 225 (1963).

9 Cf. Valdez v. Gutierrez, L-25819, May 22, 1968, 23 SCRA 661; Lemi v. Valencia, L-20768, Nov. 29,
1968, 26 SCRA 203; Commissioner of Immigration v. Go Tieng, L-22581, May 21, 1969, 28 SCRA 237;
Vda. de Serra v. Salas, L-27150, Nov. 28, 1969, 30 SCRA 541; Del Rosario v. Subido, L-30091, Jan. 30,
1970, 31 SCRA 382; Yuvienco v. Canonoy, L-23352, June 30, 1971, 39 SCRA 597; Enriquez Jr. v. Bidin, L-
29620, Oct. 12, 1972, 47 SCRA 183, Orencia v. Enrile, L-28997, Feb. 22, 1974, 55 SCRA 580; Isada v.
Bocar, L-33535, Jan. 17, 1975, 62 SCRA 37; Garcia v. Faculty Admission Committee, L-40779, Nov. 28,
1975, 68 SCRA 277; Ocampo v. Subido, L-28344, Aug. 27, 1976, 72 SCRA 443.

10 L-27448, November 29, 1977, 80 SCRA 376.

11 Ibid, 380. Gonzales v. Board of Pharmacy, 20 Phil. 367, was cited.
Republic of the Philippines

SUPREME COURT

Manila

SECOND DIVISION

G.R. No. L-27760 May 29, 1974

CRISPIN ABELLANA and FRANCISCO ABELLANA, petitioners,

vs.

HONORABLE GERONIMO R. MARAVE, Judge, Court of First Instance of Misamis Occidental, Branch II; and
GERONIMO CAMPANER, MARCELO LAMASON, MARIA GURREA, PACIENCIOSA FLORES and ESTELITA
NEMEN0, respondents.

Prud. V. Villafuerte for petitioners.

Hon. Geronimo R. Marave in his own behalf.

FERNANDO, J.:p

This petition for certiorari is characterized by a rather vigorous insistence on the part of petitioners
Crispin Abellana and Francisco Abellana that an order of respondent Judge was issued with grave abuse
of discretion. It is their contention that he ought to have dismissed an independent civil action filed in
his court, considering that the plaintiffs, as offended parties, private respondents here,1 failed to
reserve their right to institute it separately in the City Court of Ozamis City, when the criminal case for
physical injuries through reckless imprudence was commenced. Such a stand of petitioners was sought
to be bolstered by a literal reading of Sections 1 and 2 of Rule 111.2 It does not take into account,
however, the rule as to a trial de novo found in Section 7 of Rule 123.3 What is worse, petitioners
appear to be oblivious of the principle that if such an interpretation were to be accorded the applicable
Rules of Court provisions, it would give rise to a grave constitutional question in view of the
constitutional grant of power to this Court to promulgate rules concerning pleading, practice, and
procedure being limited in the sense that they "shall not diminish, increase, or modify substantive
rights."4 It thus appears clear that the petition for certiorari is without merit.

The relevant facts were set forth in the petition and admitted in the answer. The dispute had its origins
in a prosecution of petitioner Francisco Abellana of the crime of physical injuries through reckless
imprudence in driving his cargo truck, hitting a motorized pedicab resulting in injuries to its passengers,
namely, private respondents Marcelo Lamason, Maria Gurrea, Pacienciosa Flores, and Estelita Nemeño.
The criminal case was filed with the city court of Ozamis City, which found the accused Francisco
Abellana guilty as charged, damages in favor of the offended parties likewise being awarded. The
accused, now petitioner, Francisco Abellana appealed such decision to the Court of First Instance.5 At
this stage, the private respondents as the offended parties filed with another branch of the Court of First
Instance of Misamis Occidental, presided by respondent Judge, a separate and independent civil action
for damages allegedly suffered by them from the reckless driving of the aforesaid Francisco Abellana.6
In such complaint, the other petitioner, Crispin Abellana, as the alleged employer, was included as
defendant. Both of them then sought the dismissal of such action principally on the ground that there
was no reservation for the filing thereof in the City Court of Ozamis. It was argued by them that it was
not allowable at the stage where the criminal case was already on appeal.7

Respondent Judge was not persuaded. On April 28, 1967, he issued the following order: "This is a
motion to dismiss this case on the ground that in Criminal Case No. OZ-342 which was decided by the
City Court and appealed to this Court, the offended parties failed to expressly waive the civil action or
reserve their right to institute it separately in said City Court, as required in Section 1, Rule 111, Rules of
Court. From the Records of Criminal Case No. OZ-342, it appears that the City Court convicted the
accused. On appeal to this Court, the judgment of the City Court was vacated and a trial de novo will
have to be conducted. This Court has not as yet begun trying said criminal case. In the meantime, the
offended parties expressly waived in this Court the civil action impliedly instituted with the criminal
action, and reserve their right to institute a separate action as in fact, they did file. The Court is of the
opinion that at this stage, the offended parties may still waive the civil action because the judgment of
the City Court is vacated and a trial de novo will have to be had. In view of this waiver and reservation,
this Court would be precluded from judging civil damages against the accused and in favor of the
offended parties. [Wherefore], the motion to dismiss is hereby denied. ..."8 There was a motion for
reconsideration which was denied. Hence this petition.

The only basis of petitioners for the imputation that in the issuance of the challenged order there was a
grave abuse of discretion, is their reading of the cited Rules of Court provision to the effect that upon
the institution of a criminal action "the civil action for recovery of civil liability arising from the offense
charge is impliedly instituted with the criminal action, unless the offended party ...reserves his right to
institute it
separately."9 Such an interpretation, as noted, ignores the de novo aspect of appealed cases from city
courts.10 It does likewise, as mentioned, give rise to a constitutional question to the extent that it could
yield a meaning to a rule of court that may trench on a substantive right. Such an interpretation is to be
rejected. Certiorari, to repeat, clearly does not lie.

1. In the language of the petition, this is the legal proposition submitted for the consideration of this
Court : "That a separate civil action can be legally filed and allowed by the court only at the institution,
or the right to file such separate civil action reserved or waived, at such institution of the criminal action,
and never on appeal to the next higher court."11 It admits of no doubt that an independent civil action
was filed by private respondents only at the stage of appeal. Nor was there any reservation to that
effect when the criminal case was instituted in the city court of Ozamis. Petitioners would then take
comfort from the language of the aforesaid Section 1 of Rule 111 for the unwarranted conclusion that
absent such a reservation, an independent civil action is barred. In the first place, such an inference does
not per se arise from the wording of the cited rule. It could be looked upon plausibly as a non-sequitur.
Moreover, it is vitiated by the grievous fault of ignoring what is so explicitly provided in Section 7 of Rule
123: "An appealed case shall be tried in all respects anew in the Court of First Instance as if it had been
originally instituted in that court."12 Unlike petitioners, respondent Judge was duly mindful of such a
norm. This Court has made clear that its observance in appealed criminal cases is mandatory.13 In a
1962 decision, People v. Carreon,14 Justice Barrera, as ponente, could trace such a rule to a 1905
decision, Andres v. Wolfe.15 Another case cited by him is Crisostomo v. Director of Prisons,16 where
Justice Malcolm emphasized how deeply rooted in Anglo-American legal history is such a rule. In the
latest case in point, People v. Jamisola,17 this Court, through Justice Dizon, reiterated such a doctrine in
these words: "The rule in this jurisdiction is that upon appeal by the defendant from a judgment of
conviction by the municipal court, the appealed decision is vacated and the appealed case 'shall be tried
in all respects anew in the court of first instance as if it had been originally instituted in that court.'"18
So it is in civil cases under Section 9 of Rule 40.19 Again, there is a host of decisions attesting to its
observance.20 It cannot be said then that there was an error committed by respondent Judge, much less
a grave abuse of discretion, which is indispensable if this petition were to prosper.

2. Nor is the above the only ground for rejecting the contention of petitioners. The restrictive
interpretation they would place on the applicable rule does not only result in its emasculation but also
gives rise to a serious constitutional question. Article 33 of the Civil Code is quite clear: "In cases of ...
physical injuries, a civil action for damages, entirely separate and distinct from the criminal action, may
be brought by the injured party. Such civil action shall proceed independently of the criminal
prosecution, and shall require only a preponderance of evidence."21 That is a substantive right, not to
be frittered away by a construction that could render it nugatory, if through oversight, the offended
parties failed at the initial stage to seek recovery for damages in a civil suit. As referred to earlier, the
grant of power to this Court, both in the present Constitution and under the 1935 Charter, does not
extend to any diminution, increase or modification of substantive right.22 It is a well-settled doctrine
that a court is to avoid construing a statute or legal norm in such a manner as would give rise to a
constitutional doubt. Unfortunately, petitioners, unlike respondent Judge, appeared to lack awareness
of the undesirable consequence of their submission. Thus is discernible another insuperable obstacle to
the success of this suit.

3. Nor is this all that needs to be said. It is understandable for any counsel to invoke legal propositions
impressed with a certain degree of plausibility if thereby the interest of his client would be served. That
is though, merely one aspect of the matter. There is this other consideration. He is not to ignore the
basic purpose of a litigation, which is to assure parties justice according to law. He is not to fall prey, as
admonished by Justice Frankfurter, to the vice of literalness. The law as an instrument of social control
will fail in its function if through an ingenious construction sought to be fastened on a legal norm,
particularly a procedural rule, there is placed an impediment to a litigant being given an opportunity of
vindicating an alleged right.23 The commitment of this Court to such a primordial objective has been
manifested time and time again.24

WHEREFORE, this petition for certiorari is dismissed.

Costs against petitioners.

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

Antonio, J., concurs on the bases of par. nos. 2 & 3 of opinion.

Footnotes

1 The private respondents are: Geronimo Campaner, Marcelo Lamason, Maria Gurrea, Pacienciosa
Flores and Estelita Nemeño.

2 The aforesaid sections read as follows: "Sec. 1. Institution of criminal and civil actions. — When a
criminal action is instituted, the civil action for recovery of civil liability arising from the offense charged
is impliedly instituted with the criminal action, unless the offended party expressly waives the civil
action or reserves his right to institute it separately. Sec. 2. Independent civil action. — In the cases
provided for in Articles 31, 32, 33, 34 and 2177 of the Civil Code of the Philippines, an independent civil
action entirely separate and distinct from the criminal action, may be brought by the injured party
during the pendency of the criminal case, provided the right is reserved as required in the preceding
section. Such civil action shall proceed independently of the criminal prosecution, and shall require only
a preponderance of evidence." .

3 Section 7 of Rule 123 reads as follows: "An appeal case shall be tried in all respects anew in the Court
of First Instances as if it had been originally instituted in that court."

4 According to Article VIII, Section 13 of the 1935 Constitution: "The Supreme Court shall have the
power to promulgate runs concerning pleading, practice, and procedure in all courts, and the admission
to the practice of law. Said rules shall be uniform for all courts of the same grade and shall not diminish,
increase, or modify substantive rights. The existing laws on pleading, practice, and procedure are hereby
repealed as statutes, and are declared Rules of Courts, subject to the power of the Supreme Court to
alter and modify the same. The Congress shall have the power to repeal, alter, or supplement the rules
concerning pleading, practice, and procedure, and the admission to the practice of law in the
Philippines." The present Constitution, in its Article X, Section 5, paragraph (5), empowers this Court to
promulgate "rules concerning pleading, practice, and procedure in all courts, the admission to the
practice of law, and the integration of the Bar, which, however, may be repealed, altered, or
supplemented by the National Assembly. Such rules shall provide a simplified and inexpensive
procedure for the speedy disposition of cases, shall be uniform for all courts of the same grade, and shall
not diminish, increase, or modify substantive rights."

5 Petition, pars. 2 and 3.

6 Ibid, par. 4.

7 Ibid, par. 5.

8 Ibid, par. 9.

9 Cf. Rules of Court, Section 1 of Rule 111.

10 Cf. Section 7 of Rule 123, Rules of Court.

11 Petition, Ground for Reversal of the Court Order Involved, 4.

12 Cf. Section 7 of Rule 123 (1964).

13 Cf. People v. Jaramilia, 97 Phil. 880 (1955); Escudero v. Lucero, 103 Phil. 672 (1958); People v.
Malayao, L-12103, February 28, 1961, 1 SCRA 628; People v. Carreon, L-17920, May 30, 1962, 5 SCRA
252; People v. Jamisola, L-27332, November 28, 1969, 30 SCRA 555.

14 L-17920, May 30, 1962, 5 SCRA 252.

15 5 Phil. 60.

16 41 Phil. 368 (1921). Cf. People v. Co Hiok, 62 Phil. 501 (1935).

17 L-27332, November 28, l969, 30 SCRA 555..

18 Ibid, 556-557.

19 Section 9 of Rule 40 reads: "A perfected appeal shall operate to vacate the judgment of the justice of
the peace or the municipal court, and the action when duly docketed in the Court of First Instance shall
stand for trial de novo upon its merits in accordance with the regular procedure in the court, as though
the same had never been tried before and had been originally there commenced. If the appeal is
withdrawn, or dismissed for failure to prosecute, the judgment shall be deemed revived and shall
forthwith be remanded to the justice of the peace or municipal court for execution."

20 Cf. Lichauco v. Guash, 76 Phil. 5 (1946); Torres v. Ocampo, 80 Phil. 36 (1948); Ricohermoso v.
Enriquez and Ricohermoso, 85 Phil. 88 (1949); Evangelista v. Soriano, 92 Phil. 190 (1952); Vda. de Valdez
v. Farinas, 94 Phil. 850 (1954); Royal Shirt Factory, Inc. v. Co Bon Tic, 94 Phil. 994 (1954); Acierto Y. De
Laperal, 107 Phil. 1088 (1960); Singh v. Liberty Insurance Corp., L-16860, July 31, 1963, 8 SCRA 517,
Florendo, Sr. v. Buyser, L-24316, Nov. 28, 1967, 21 SCRA 1106; Permanent Concrete Products, Inc. v.
Teodoro, L-29766, Nov. 29, 1968, 26 SCRA 332.

21 Article 33 includes the other cases of deformation and fraud.

22 Cf. Article X, Section 5, par. 5 of the Constitution and Article VIII, Section 13 of the 1935 Constitution.

23 Cf. Avila v. Gimenez, L-24615, February 28, 1969, 27 SCRA 321.

24 Cf. Aguinaldo v. Aguinaldo, L-30362, November 26, 1970, 36 SCRA 137.

EN BANC

[G.R. No. 123169. November 4, 1996]

DANILO E. PARAS, petitioner, vs. COMMISSION ON ELECTIONS, respondent.

RESOLUTION

FRANCISCO, J.:

Petitioner Danilo E. Paras is the incumbent Punong Barangay of Pula, Cabanatuan City who won during
the last regular barangay election in 1994. A petition for his recall as Punong Barangay was filed by the
registered voters of the barangay. Acting on the petition for recall, public respondent Commission on
Elections (COMELEC) resolved to approve the petition, scheduled the petition signing on October 14,
1995, and set the recall election on November 13, 1995.[1] At least 29.30% of the registered voters
signed the petition, well above the 25% requirement provided by law. The COMELEC, however, deferred
the recall election in view of petitioners opposition. On December 6, 1995, the COMELEC set anew the
recall election, this time on December 16, 1995. To prevent the holding of the recall election, petitioner
filed before the Regional Trial Court of Cabanatuan City a petition for injunction, docketed as SP Civil
Action No. 2254-AF, with the trial court issuing a temporary restraining order. After conducting a
summary hearing, the trial court lifted the restraining order, dismissed the petition and required
petitioner and his counsel to explain why they should not be cited for contempt for misrepresenting that
the barangay recall election was without COMELEC approval.[2]

In a resolution dated January 5, 1996, the COMELEC, for the third time, re-scheduled the recall election
on January 13, 1996; hence, the instant petition for certiorari with urgent prayer for injunction. On
January 12, 1996, the Court issued a temporary restraining order and required the Office of the Solicitor
General, in behalf of public respondent, to comment on the petition. In view of the Office of the Solicitor
Generals manifestation maintaining an opinion adverse to that of the COMELEC, the latter through its
law department filed the required comment. Petitioner thereafter filed a reply.[3]

Petitioners argument is simple and to the point. Citing Section 74 (b) of Republic Act No. 7160,
otherwise known as the Local Government Code, which states that no recall shall take place within one
(1) year from the date of the officials assumption to office or one (1) year immediately preceding a
regular local election, petitioner insists that the scheduled January 13, 1996 recall election is now barred
as the Sangguniang Kabataan (SK) election was set by Republic Act No. 7808 on the first Monday of May
1996, and every three years thereafter. In support thereof, petitioner cites Associated Labor Union v.
Letrondo-Montejo, 237 SCRA 621, where the Court considered the SK election as a regular local election.
Petitioner maintains that as the SK election is a regular local election, hence no recall election can be
had for barely four months separate the SK election from the recall election. We do not agree.

The subject provision of the Local Government Code provides:

SEC. 74. Limitations on Recall. (a) Any elective local official may be the subject of a recall election only
once during his term of office for loss of confidence.

(b) No recall shall take place within one (1) year from the date of the officials assumption to office or
one (1) year immediately preceding a regular local election.

[Emphasis added.]

It is a rule in statutory construction that every part of the statute must be interpreted with reference to
the context, i.e., that every part of the statute must be considered together with the other parts, and
kept subservient to the general intent of the whole enactment.[4] The evident intent of Section 74 is to
subject an elective local official to recall election once during his term of office. Paragraph (b) construed
together with paragraph (a) merely designates the period when such elective local official may be
subject of a recall election, that is, during the second year of his term of office. Thus, subscribing to
petitioners interpretation of the phrase regular local election to include the SK election will unduly
circumscribe the novel provision of the Local Government Code on recall, a mode of removal of public
officers by initiation of the people before the end of his term. And if the SK election which is set by R.A.
No. 7808 to be held every three years from May 1996 were to be deemed within the purview of the
phrase regular local election, as erroneously insisted by petitioner, then no recall election can be
conducted rendering inutile the recall provision of the Local Government Code.

In the interpretation of a statute, the Court should start with the assumption that the legislature
intended to enact an effective law, and the legislature is not presumed to have done a vain thing in the
enactment of a statute.[5] An interpretation should, if possible, be avoided under which a statute or
provision being construed is defeated, or as otherwise expressed, nullified, destroyed, emasculated,
repealed, explained away, or rendered insignificant, meaningless, inoperative or nugatory.[6]

It is likewise a basic precept in statutory construction that a statute should be interpreted in harmony
with the Constitution.[7] Thus, the interpretation of Section 74 of the Local Government Code,
specifically paragraph (b) thereof, should not be in conflict with the Constitutional mandate of Section 3
of Article X of the Constitution to enact a local government code which shall provide for a more
responsive and accountable local government structure instituted through a system of decentralization
with effective mechanisms of recall, initiative, and referendum x x x.

Moreover, petitioners too literal interpretation of the law leads to absurdity which we cannot
countenance. Thus, in a case, the Court made the following admonition:

We admonish against a too-literal reading of the law as this is apt to constrict rather than fulfill its
purpose and defeat the intention of its authors. That intention is usually found not in the letter that
killeth but in the spirit that vivifieth x x x[8]

The spirit, rather than the letter of a law determines its construction; hence, a statute, as in this case,
must be read according to its spirit and intent.

Finally, recall election is potentially disruptive of the normal working of the local government unit
necessitating additional expenses, hence the prohibition against the conduct of recall election one year
immediately preceding the regular local election. The proscription is due to the proximity of the next
regular election for the office of the local elective official concerned. The electorate could choose the
officials replacement in the said election who certainly has a longer tenure in office than a successor
elected through a recall election. It would, therefore, be more in keeping with the intent of the recall
provision of the Code to construe regular local election as one referring to an election where the office
held by the local elective official sought to be recalled will be contested and be filled by the electorate.

Nevertheless, recall at this time is no longer possible because of the limitation stated under Section 74
(b) of the Code considering that the next regular election involving the barangay office concerned is
barely seven (7) months away, the same having been scheduled on May 1997.[9]

ACCORDINGLY, the petition is hereby dismissed for having become moot and academic. The temporary
restraining order issued by the Court on January 12, 1996, enjoining the recall election should be as it is
hereby made permanent.

SO ORDERED.

Romero, Melo, Puno, Kapunan, Hermosisima, Jr., Panganiban, and Torres, Jr., JJ., concur.
Narvasa, C.J., Padilla, Regalado, Bellosillo, Vitug, and Mendoza, JJ., concur in the majority and separate
concurring opinions.

Davide, Jr., Please see separate concurring opinion.

Republic of the Philippines

SUPREME COURT

Manila

SECOND DIVISION

G.R. No. L-43760 August 21, 1976

PHILIPPINE ASSOCIATION OF FREE LABOR UNIONS (PAFLU), petitioner

vs.

BUREAU OF LABOR RELATIONS, HONORABLE CARMELO C. NORIEL, NATIONAL FEDERATION OF FREE

LABOR UNIONS (NAFLU), and PHILIPPINE BLOOMING MILLS CO., INC., respondents.

Guevara, Pineda, Guevara & Castillon for petitioner.

Olalia Dimapilis & Associates for respondent Union (NAFLU)

Assistant Solicitor General Reynato S. Puno and Solicitor Jesus V. Diaz for respondent Bureau of Labor
Relations, etc., et al.

FERNANDO, Acting C.J.:

A certification by respondent Director of Labor Relations, Carmelo C. Noriel, that respondent National
Federation of Free Labor Unions (NAFLU) as the exclusive bargaining agent of all the employees in the
Philippine Blooming Mills, Company, Inc. disregarding the objection raised by petitioner, the Philippine
Association of Free Labor Unions (PAFLU), is assailed in this certiorari proceeding. Admittedly, in the
certification election held on February 27, 1976, respondent Union obtained 429 votes as against 414 of
petitioner Union. Again, admittedly, under the Rules and Regulations implementing the present Labor
Code, a majority of the valid votes cast suffices for certification of the victorious labor union as the sole
and exclusive bargaining agent.1 There were four votes cast by employees who did not want any union.
2 On its face therefore, respondent Union ought to have been certified in accordance with the above
applicable rule. Petitioner, undeterred, would seize upon the doctrine announced in the case of Allied
Workers Association of the Philippines v. Court of Industrial Relations3 that spoiled ballots should be
counted in determining the valid votes cast. Considering there were seventeen spoiled ballots, it is the
submission that there was a grave abuse of discretion on the part of respondent Director. Implicit in the
comment of respondent Director of Labor Relations, 4 considered as an answer, is the controlling weight
to be accorded the implementing rule above-cited, no inconsistency being shown between such rule and
the present Labor Code. Under such a view, the ruling in the Allied Workers Association case that arose
during the period when it was the Industrial Peace Act 5, that was in effect and not the present law, no
longer possesses relevance. It cannot and should not be applied. It is not controlling. There was no
abuse of discretion then, much less a grave one.

This Court is in agreement. The law is on the side of respondent Director, not to mention the decisive
fact appearing in the Petition itself that at most, only ten of the spoiled ballots "were intended for the
petitioner Union,"6 thus rendering clear that it would on its own showing obtain only 424 votes as
against 429 for respondent Union. certiorari does not lie.

1. What is of the essence of the certification process, as noted in Lakas Ng Manggagawang Pilipino
v. Benguet Consolidated, Inc.7 "is that every labor organization be given the opportunity in a free and
honest election to make good its claim that it should be the exclusive collective bargaining
representative."8 Petitioner cannot complain. It was given that opportunity. It lost in a fair election. It
came out second best. The implementing rule favors, as it should, respondent Union, It obtained a
majority of the valid votes cast. So our law Prescribes. It is equally the case in the United States as this
excerpt from the work of Cox and Bok makes clear: "It is a well-settled rule that a representative will he
certified even though less than a majority of all the employees in the unit cast ballots in favor of the
union. It is enough that the union be designated by a majority of the valid ballots, and this is so even
though only a small proportion of the eligible voters participates. Following the analogy of political
elections, the courts have approved this practice of the Board."9

2. There is this policy consideration. The country is at present embarked on a wide-scale

industrialization project. As a matter of fact, respondent firm is engaged in such activity.
Industrialization, as noted by Professor Smith, Merrifield and Rothschild, "can thrive only as there is
developed a. stable structure of law and order in the productive sector."10 That objective is best
attained in a collective bargaining regime, which is a manifestation of industrial democracy at work, if
there be no undue obstacles placed in the way of the choice of a bargaining representative. To insist on
the absolute majority where there are various unions and where the possibility of invalid ballots may
not be ruled out, would be to frustrate that goal. For the probability of a long drawn-out, protracted
process is not easy to dismiss. That is not unlikely given the intensity of rivalry among unions capable of
enlisting the allegiance of a group of workers. It is to avoid such a contingency that there is this explicit
pronouncement in the implementing rule. It speaks categorically. It must be obeyed. That was what
respondent Director did.
3. Nor can fault of a grave and serious character be imputed to respondent Director presumably
because of failure to abide by the doctrine or pronouncement of this Court in the aforesaid Allied
Workers Association case. The reliance is on this excerpt from the opinion: "However, spoiled ballots,
i.e., those which are defaced, torn or marked (Rules for Certification Elections, Rule II, sec. 2[j]) should
be counted in determining the majority since they are nevertheless votes cast by those who are
qualified to do so." 11 Nothing can be clearer than that its basis is a paragraph in a section of the then
applicable rules for certification elections. 12 They were promulgated under the authority of the then
prevailing Industrial Peace Act. 13 That Legislation is no longer in force, having been superseded by the
present Labor Code which took effect on November 1, 1974. This certification election is governed
therefore, as was made clear, by the present Labor Code and the Rules issued thereunder. Absent a
showing that such rules and regulations -are violative of the Code, this Court cannot ignore their
existence. When, as should be the case, a public official acts in accordance with a norm therein
contained, no infraction of the law is committed. Respondent Director did, as he ought to, comply with
its terms. He took into consideration only the "valid votes" as was required by the Rules. He had no
choice as long as they remain in force. In a proper showing, the judiciary can nullify any rule it found in
conflict with the governing statute. 14 That was not even attempted here. All that petitioner did was to
set forth in two separate paragraphs the applicable rule followed by respondent Director 15 and the
governing article. 16 It did not even bother to discuss why such rule was in conflict with the present
Labor Code. It failed to point out any repugnancy. Such being the case, respondent Director must be
upheld.

4. The conclusion reached by us derives further support from the deservedly high repute attached
to the construction placed by the executive officials entrusted with the responsibility of applying a
statute. The Rules and Regulations implementing the present Labor Code were issued by Secretary Blas
Ople of the Department of Labor and took effect on February 3, 1975, the present Labor Code having
been made known to the public as far back as May 1, 1974, although its date of effectivity was
postponed to November 1, 1974, although its date of effectivity was postponed to November 1, 1974. It
would appear then that there was more than enough time for a really serious and careful study of such
suppletory rules and regulations to avoid any inconsistency with the Code. This Court certainly cannot
ignore the interpretation thereafter embodied in the Rules. As far back as In re Allen," 17 a 1903
decision, Justice McDonough, as ponente, cited this excerpt from the leading American case of Pennoyer
v. McConnaughy, decided in 1891: "The principle that the contemporaneous construction of a statute by
the executive officers of the government, whose duty it is to execute it, is entitled to great respect, and
should ordinarily control the construction of the statute by the courts, is so firmly embedded in our
jurisprudence that no authorities need be cited to support it." 18 There was a paraphrase by Justice
Malcolm of such a pronouncement in Molina v. Rafferty," 19 a 1918 decision: "Courts will and should
respect the contemporaneous construction placed upon a statute by the executive officers whose duty
it is to enforce it, and unless such interpretation is clearly erroneous will ordinarily be controlled
thereby." 20 Since then, such a doctrine has been reiterated in numerous decisions . 21 As was
emphasized by Chief Justice Castro, "the construction placed by the office charged with implementing
and enforcing the provisions of a Code should he given controlling weight. " 22
WHEREFORE, the petition for certiorari is dismissed. Costs against petitioner Philippine Association of
Free Labor Unions (PAFLU).

Barredo, Antonio, Aquino and Concepcion Jr., JJ., concur.

Footnotes

1 Rule 6 of the Rules and Regulations implementing the Labor Code of the Philippines, Section 8,
subsection (f), reads as follows: "The union which obtained majority of the valid votes cast by eligible
voters shall be certified as the sole and exclusive bargaining agent of all the workers in the appropriate
unit. However, in order to have a valid election, at least fifty-one percent of all eligible voters in the
appropriate bargaining unit shall have cast their votes."

2 Another labor union, PLAC, obtained a zero vote.

3 L-22580 and 22950, June 6, 1967, 20 SCRA 364.

4 The comment was submitted by Assistant Solicitor General Reynato S. Puno, assisted by Solicitor
Jesus V. Diaz.

5 Republic Act No. 875 (1953).

6 As set forth in that portion of the petition labeled Statement of the Case: "c) Petitioner appealed
from the certification ... , calling attention to the fact that such certification contravenes the provision of
the law (Art. 256, Labor Code); that the seventeen (17) spoiled ballots should be taken into account in
considering the majority, especially so that out of the 17 spoiled ballots ten (10) were intended for the
petitioner; ... Petition. 3-4.

7 L-35075, November 24, 1972, 48 SCRA 169.

8 Ibid, Cf. United Employees Union v. Noriel, L-40810, Oct. 3, 1975, 67 SCRA 267; Philippine
Association of Free Unions v. Bureau of Labor Relations, L-42115, Jan. 27, 1976, 69 SCRA 132;
Federacion Obrera v. Noriel, L-41937, July 6, 1976.

9 Cox and Bok, Labor Law, Seventh Ed., 373 (1969), citing New York Handkerchief Mfg. Co. v.
NLRB, 114 F. 2d 114 (7th Cir., 1940), certiorari denied 311 U.S. 704, 61 S. Ct. 170, 85 L. Ed. 457 (1941)
and Virginian Ry. Co. v. System Federation No, 40, 300 US 5157 57 S. Ct. 592, 81 L. Ed. 789 (1937).

10 Smith, Merrifield, Rothschild, Collective Bargaining and Labor Arbitration 13 (1970).

11 L-22580 and 22950, 20 SCRA 364, 369.

12 It is regrettable that quotation marks were used in the petition and yet no indication is made
that this pronouncement is in accordance with rules for certification election. It certainly could not have.
been the intention of counsel for petitioners, but such an omission possibly may give rise to a
misinterpretation as to their motive. They are well-advised to take a little more care next time in the
filing and preparation of pleadings to assure accuracy.

13 Republic Act No. 875 (1953).

14 Cf. Teoxon v. Member of the Board of Administrators, L-25619, June 30, 1970, 33 SCRA 585.

15 Rule 6, Section 8, Subsection (f).

16 Art. 256 of the Labor Code.

17 2 Phil 630.

18 Ibid, 640. Pennoyer v. McConnaughly is cited in 140 US 1. The excerpt is on p. 23 thereof, Cf.
Government v. Municipality of Binalonan, 32 Phil. 634 (1915).

19 37 Phil. 545.
20 Ibid, 555.

21 Cf. Madrigal v. Rafferty, 38 Phil. 414 (1918); Philippine Sugar Centrals Agency v. Insular Collector,
51 Phil. 131 (1927); Yra v. Abaño, 52 Phil. 380 (1928); People v. Hernandez, 59 Phil. 272 (1933); Ortua v.
Singson Encarnacion, 59 Phil. 440 (1934); Regalado v. Yulo, 61 Phil. 173 (1935); Bengzon v. Secretary of
Justice, 62 Phil. 912 (1936); Director of Lands v. Abaya, 63 Phil. 559 (1936); Everett v. Bautista, 69 Phil.
137 (1939); Krivenko v. Register of Deeds, 79 Phil. 461 (1947); Manantan v. Municipality of Luna, 82 Phil.
844 (1949); Tamayo v. Manila Hotel Co., 101 Phil. 811 (1975); Tan v. Municipality of Pagbilao, L-14264,
April 30, 1963, 7 SCRA 887, Asturias Sugar Central v. Commissioner of Customs, L-19337, Sept. 30, 1969,
29 SCRA 617; University of the Philippines v. Court of Appeals, L-28153, Jan. 28, 1971, 37 SCRA 64;
Orencia v. Enrile, L-28887, Feb. 22, 1974, 55 SCRA Nov. 15, 1974, 61 SCRA 580. The latest case in point is
Sarmiento v. Nolasco, L-38565, Nov. 15, 1974, 61 SCRA 80.

22 Asturias Sugar Central, Inc. v. Commissioner of Customs, L-19337, Sept. 30, 1969, 29 SCRA 617,
623. The words placed in the bracket likewise come from that portion of the opinion of then Justice
Castro, but the Code in question is the Tariff and Customs Code. It should be obvious that such a
principle applies as well to the present Labor Code.
Republic of the Philippines

SUPREME COURT

Manila

SECOND DIVISION

G.R. No. L-50320 March 30, 1988

PHILIPPINE APPAREL, WORKERS UNION, petitioner,

vs.

THE NATIONAL LABOR RELATIONS COMMISSION APPAREL PHILIPPINE APPAREL, INC., respondents.

RESOLUTION

PARAS, J. :

This is a classic case of dilatory tactics employed to obstruct justice.

On July 31, 1981, this Court rendered Judgment in this case, the dispositive portion of which reads:

WHEREFORE, the writ of certiorari is hereby granted, the decision of the respondent Commission is
hereby set aside, and private respondent is hereby directed to pay, in addition to the increased
allowance provided for in P.D. 1123, the negotiated wage increase of P0.80 daily effective April 1, 1977
as well as all other wage increases embodied in the collective bargaining agreement, to all covered
employees. Costs against private respondent.

This decision, is immediately executory (p. 178, rec.).

A motion for reconsideration of the July 31, 1981 decision. this Court was filed by private respondent.
Petitioner, through the Paterno D. Menzon Law Office, filed a comment thereon. This Court, on October
21, 1981 denied the aforesaid motion for reconsideration and the denial was declared final Entry of
judgment was made on October 30, 1981 (Rollo, p. 244).

On December 18, 1981 the respondent NLRC issued an order, through Labor Arbiter Antonio Tria Tirona,
directing the Chief of the Research and Information Division of the NLRC to designate a Socio-Economic
Analyst to compute the awards due the members of the petitioner union in accordance with the final
disposition of this case.

On January 10, 1983 petitioner flied an "Urgent Manifestation and Motion" claiming that despite its
filing of a motion for execution dated November 12, 1981, a manifestation and motion dated February
10, 1982, and another manifestation and motion dated February 26, 1982, the execution arm of public
respondent NLRC continued to fail to implement the decision of this Court. Petitioner prayed that those
obstructing the implementation of the decision be declared in contempt, especially the president of
Bagong Pilipino Philippine Apparel Workers' Union (BPPAWU) and private respondent PAI for
circumventing the final decision of this Court by offering members of petitioner the amount of P500
each as full payment of their claims in the instant case.

The respondent NLRC, in its Comment on petitioner's "Urgent Manifestation and Motion" explained that
it could not issue a writ of execution because the actual or exact amounts of the various awards due the
members of the petitioner union could not be determined. For that matter, even with the submission of
the "Report of Examiner" prepared by the Research and Information Division of the NLRC, it was not
possible for the NLRC to issue a writ of execution in full satisfaction of the judgment of this Court
because said "Report of Examiner" did not include the computation of the amounts due for the months
of May, June, November and December 1978, and January and February 1980 as the pertinent records
covering those periods were not available at the time of the preparation of the Report. Adding
confusion was the fact that even before the submission of the "Report of Examiner," private respondent
PAI had already made payments in satisfaction of this Court's decision to some of the members of the
petitioner union. Moreover, after the submission of the Reports, and notwithstanding its exception to
the findings therein, private respondent PAI continued to make payments to the other members of the
union. Respondent PAI offered the payment to petitioner's counsel but the latter refused to accept the
payment because the amount offered left some 88 members of the petitioner unpaid. Petitioner's
counsel was willing to accept the money only as partial payment, but not as full payment as PAI wanted
it to be.

On October 27, 1983, this Court issued an order requiring private respondent PAI to comply fully with
this Court's decision of July 31, 1981; to pay the members of the petitioner the amount of P695,413.17,
with 10% thereof to be deducted as attorney's fees payable to the Menzon Law Office; to make
available, within ten (10) days from notice thereof, to public respondent its payrolls corresponding to
the unpaid periods, for the latter to prepare immediately a computation within thirty (30.1 days from
receipt of such payrolls; and, thereafter, to pay members of petitioner the remaining backwages within
ten (1 0) days from receipt of such computation. In that same order of October 27, 1983, the BPPAWU,
Atty. Luis D. Flores and respondent Philippine Apparel, Inc. were adjudged guilty of contempt and were
ordered to pay one thousand pesos (Pl,000) each within ten (10) days from notice thereof.

The Court justified its ruling as follows:

...The judgment in this case has already become final and executory and as such the prevailing party as a
matter of right is entitled to a writ of execution. What seems to be the problem in this case is that
execution of the judgment cannot be had at the earliest possible time, since a computation of the
amount due the members of petitioner must first be undertaken. The Report of the Examiner indicating
the amount due them was submitted only after one and a half years, so that in the meantime,
negotiations on how the judgment may be executed were made. It is the posture of the Paterno D.
Menzon Law Office that the judgment cannot be negotiated, hence any act to subvert it is
contemptuous.

We agree, The attempts of the BPPAWU and its counsel and respondent company to render the decision
of this Court meaningless by paying the backwages of the affected employees in a lesser amount clearly
manifest a willful disregard on their part, of the authority of this Court as the final arbiter of cases
brought to it. The series of acts by the BPPAWU from the outset, where they caused the
'Kapahintulutan' to be circulated and signed by workers declaring as invalid any acts of petitioner union
and its counsel to the time they campaigned for the workers to receive the amount of P300.00 or
P500.00 but with the concomitant obligation to release the company from any further liability showed
disrespect for the administration of justice.

The BPPAWU and its counsel cannot pretend that they are just being more protective to the employees
when they encouraged them to receive the amount of P300.00 or P500.00. They know too well that said
amount is much less than that to be received by the employees after computing all the backwages if the
decision is executed. It would have been laudable had not the company pressed the workers to sign the
quitclaims and release of which the BPPAWU cannot pretend to be unaware, for the payment could be
taken as initial compliance with the judgment with the balance to be paid by the company when the
final computation of the backwages has been finished and submitted by the Research and Information
Division of the National Labor Relations Commission. Indeed, their questionable acts do not sit well with
a desire to implement the decision of this Court. If the BPPAWU is really after the welfare of the
employees, they will not leave any stone unturned to get the best for them by giving effect to the
decision of this Court.
In our decision, we have ordered the company to pay the negotiated wage increase of P0.80 daily
effective April 1, 1977. As per petitioner's; computation, as may be gleaned from the urgent motion for
issuance of a restraining order dated March 11, 1982, on backwages alone, not counting adjustments in
overtime pay and other benefits, each employee is entitled to receive at the very least of Pl,248.00
(P0.80 x 26 working days x 12 months x 5 years from 1977 to 1982) [p. 281, recli If we shall include the
backwages corresponding from January, 1983 to the present, the same will definitely be higher than
Pl,248.00. Clearly, the offer by the company, supported by the BPPAWU to pay the employees in the
amount of P300.00 or P500.00 as full and final payment is unjust to them, especially if We shall consider
that some employees did not have the alternative but to accept the payment because they were in a
tight financial condition. Such move cannot he sanctioned by this Court, for otherwise giving effect to
the award of backwages would be left to the whim of the losing company taking advantage of the
rationale behind the decision in Mercury Drug Co. v. CIR (L-23357, promulgated April 30, 1974, 56 SCRA
695), the quitclaims and releases signed by the employees are considered null and void. The employees
are therefore still entitled to the difference between what is due them and the amount they received.
Another important consideration is that if We countenance such act, the sanctity of the contract validly
entered into by the parties which as in this case was interpreted by this Court, will be violated. Rollo, pp.
382-384)

In their obvious attempts to derail the implementation of this Court's decision which had long become
final and executory as far back as over six years ago on October 21, 1981, private respondents endlessly
belabored this Court's ruling finding them guilty of contempt. Enough is enough. If there is anything that
needs to be done in this case, it is the fun and complete implementation of this Court's final and
executory decision.

PREMISES CONSIDERED, We hereby enjoin the respondent NLRC to fully implement this Court's
Resolution dated October 27,1983, with these modifications: (a) To pay members of the petitioner the
partial backwages in the amount of P695,413.17 plus legal interest computed from the time the decision
became final (October 21, 1981) until fully paid, with 10% thereof to be deducted as attorney's fees
payable to the Menzon Law Office, less the amount that respondent company may have paid to some
members of the petitioner union; and (b) The BPPAWU Atty. Luis D. Flores and respondent Philippine
Apparel, Inc. are hereby adjudged guilty of contempt and are ordered to pay TEN THOUSAND
(P10,000.00) PESOS each within ten (10) days from notice thereof. This resolution is immediately
executory.

SO ORDERED.

Yap (Chairman), Melencio-Herrera, Padilla and Sarmiento JJ., concur

Republic of the Philippines

SUPREME COURT

Manila

SECOND DIVISION

G.R. No. L-52415 October 23, 1984

INSULAR BANK OF ASIA AND AMERICA EMPLOYEES' UNION (IBAAEU), petitioner,

vs.

HON. AMADO G. INCIONG, Deputy Minister, Ministry of Labor and INSULAR BANK OF ASIA AND
AMERICA, respondents.

Sisenando R. Villaluz, Jr. for petitioner.

Abdulmaid Kiram Muin colloborating counsel for petitioner.

The Solicitor General Caparas, Tabios, Ilagan Alcantara & Gatmaytan Law Office and Sycip, Salazar,
Feliciano & Hernandez Law Office for respondents.

MAKASIAR, J.:ñé+.£ªwph!1

This is a petition for certiorari to set aside the order dated November 10, 1979, of respondent Deputy
Minister of Labor, Amado G. Inciong, in NLRC case No. RB-IV-1561-76 entitled "Insular Bank of Asia and
America Employees' Union (complainant-appellee), vs. Insular Bank of Asia and America" (respondent-
appellant), the dispositive portion of which reads as follows: têñ.£îhqwâ£

xxx xxx xxx

ALL THE FOREGOING CONSIDERED, let the appealed Resolution en banc of the National Labor Relations
Commission dated 20 June 1978 be, as it is hereby, set aside and a new judgment. promulgated
dismissing the instant case for lack of merit (p. 109 rec.).

The antecedent facts culled from the records are as follows:

On June 20, 1975, petitioner filed a complaint against the respondent bank for the payment of holiday
pay before the then Department of Labor, National Labor Relations Commission, Regional Office No. IV
in Manila. Conciliation having failed, and upon the request of both parties, the case was certified for
arbitration on July 7, 1975 (p. 18, NLRC rec.

On August 25, 1975, Labor Arbiter Ricarte T. Soriano rendered a decision in the above-entitled case,
granting petitioner's complaint for payment of holiday pay. Pertinent portions of the decision read:
têñ.£îhqwâ£

xxx xxx xxx

The records disclosed that employees of respondent bank were not paid their wages on unworked
regular holidays as mandated by the Code, particularly Article 208, to wit: têñ.£îhqwâ£

Art. 208. Right to holiday pay.

(a) Every worker shall be paid his regular daily wage during regular holidays, except in retail and
service establishments regularly employing less than 10 workers.

(b) The term "holiday" as used in this chapter, shall include: New Year's Day, Maundy Thursday,
Good Friday, the ninth of April the first of May, the twelfth of June, the fourth of July, the thirtieth of
November, the twenty-fifth and the thirtieth of December and the day designated by law for holding a
general election.

xxx xxx xxx

This conclusion is deduced from the fact that the daily rate of pay of the bank employees was computed
in the past with the unworked regular holidays as excluded for purposes of determining the deductible
amount for absences incurred Thus, if the employer uses the factor 303 days as a divisor in determining
the daily rate of monthly paid employee, this gives rise to a presumption that the monthly rate does not
include payments for unworked regular holidays. The use of the factor 303 indicates the number of
ordinary working days in a year (which normally has 365 calendar days), excluding the 52 Sundays and
the 10 regular holidays. The use of 251 as a factor (365 calendar days less 52 Saturdays, 52 Sundays, and
10 regular holidays) gives rise likewise to the same presumption that the unworked Saturdays, Sundays
and regular holidays are unpaid. This being the case, it is not amiss to state with certainty that the
instant claim for wages on regular unworked holidays is found to be tenable and meritorious.

WHEREFORE, judgment is hereby rendered:

(a) xxx xxxx xxx

(b) Ordering respondent to pay wages to all its employees for all regular h(olidays since November
1, 1974 (pp. 97-99, rec., underscoring supplied).

Respondent bank did not appeal from the said decision. Instead, it complied with the order of Arbiter
Ricarte T. Soriano by paying their holiday pay up to and including January, 1976.

On December 16, 1975, Presidential Decree No. 850 was promulgated amending, among others, the
provisions of the Labor Code on the right to holiday pay to read as follows: têñ.£îhqwâ£

Art. 94. Right to holiday pay. — (a) Every worker shall be paid his regular daily wages during regular
holidays, except in retail and service establishments regularly employing less than ten (10) workers;

(b) The employer may require an employee to work on any holiday but such employee shall be paid
a compensation equivalent to twice his regular rate and

(c) As used in this Article, "holiday" includes New Year's Day, Maundy Thursday, Good Friday, the
ninth of April, the first of May, the twelfth of June, the fourth of July, the thirtieth of November, the
twenty-fifth and the thirtieth of December, and the day designated by law for holding a general election.
Accordingly, on February 16, 1976, by authority of Article 5 of the same Code, the Department of Labor
(now Ministry of Labor) promulgated the rules and regulations for the implementation of holidays with
pay. The controversial section thereof reads: têñ.£îhqwâ£

Sec. 2. Status of employees paid by the month. — Employees who are uniformly paid by the month,
irrespective of the number of working days therein, with a salary of not less than the statutory or
established minimum wage shall be presumed to be paid for all days in the month whether worked or
not.

For this purpose, the monthly minimum wage shall not be less than the statutory minimum wage
multiplied by 365 days divided by twelve" (italics supplied).

On April 23, 1976, Policy Instruction No. 9 was issued by the then Secretary of Labor (now Minister)
interpreting the above-quoted rule, pertinent portions of which read: têñ.£îhqwâ£

xxx xxx xxx

The ten (10) paid legal holidays law, to start with, is intended to benefit principally daily employees. In
the case of monthly, only those whose monthly salary did not yet include payment for the ten (10) paid
legal holidays are entitled to the benefit.

Under the rules implementing P.D. 850, this policy has been fully clarified to eliminate controversies on
the entitlement of monthly paid employees, The new determining rule is this: If the monthly paid
employee is receiving not less than P240, the maximum monthly minimum wage, and his monthly pay is
uniform from January to December, he is presumed to be already paid the ten (10) paid legal holidays.
However, if deductions are made from his monthly salary on account of holidays in months where they
occur, then he is still entitled to the ten (10) paid legal holidays. ..." (emphasis supplied).

Respondent bank, by reason of the ruling laid down by the aforecited rule implementing Article 94 of
the Labor Code and by Policy Instruction No. 9, stopped the payment of holiday pay to an its employees.

On August 30, 1976, petitioner filed a motion for a writ of execution to enforce the arbiter's decision of
August 25, 1975, whereby the respondent bank was ordered to pay its employees their daily wage for
the unworked regular holidays.
On September 10, 1975, respondent bank filed an opposition to the motion for a writ of execution
alleging, among others, that: (a) its refusal to pay the corresponding unworked holiday pay in
accordance with the award of Labor Arbiter Ricarte T. Soriano dated August 25, 1975, is based on and
justified by Policy Instruction No. 9 which interpreted the rules implementing P. D. 850; and (b) that the
said award is already repealed by P.D. 850 which took effect on December 16, 1975, and by said Policy
Instruction No. 9 of the Department of Labor, considering that its monthly paid employees are not
receiving less than P240.00 and their monthly pay is uniform from January to December, and that no
deductions are made from the monthly salaries of its employees on account of holidays in months
where they occur (pp. 64-65, NLRC rec.).

On October 18, 1976, Labor Arbiter Ricarte T. Soriano, instead of issuing a writ of execution, issued an
order enjoining the respondent bank to continue paying its employees their regular holiday pay on the
following grounds: (a) that the judgment is already final and the findings which is found in the body of
the decision as well as the dispositive portion thereof is res judicata or is the law of the case between
the parties; and (b) that since the decision had been partially implemented by the respondent bank,
appeal from the said decision is no longer available (pp. 100-103, rec.).

On November 17, 1976, respondent bank appealed from the above-cited order of Labor Arbiter Soriano
to the National Labor Relations Commission, reiterating therein its contentions averred in its opposition
to the motion for writ of execution. Respondent bank further alleged for the first time that the
questioned order is not supported by evidence insofar as it finds that respondent bank discontinued
payment of holiday pay beginning January, 1976 (p. 84, NLRC rec.).

On June 20, 1978, the National Labor Relations Commission promulgated its resolution en banc
dismissing respondent bank's appeal, the dispositive portion of which reads as follows: têñ.£îhqwâ£

In view of the foregoing, we hereby resolve to dismiss, as we hereby dismiss, respondent's appeal; to set
aside Labor Arbiter Ricarte T. Soriano's order of 18 October 1976 and, as prayed for by complainant, to
order the issuance of the proper writ of execution (p. 244, NLRC rec.).

Copies of the above resolution were served on the petitioner only on February 9, 1979 or almost eight.
(8) months after it was promulgated, while copies were served on the respondent bank on February 13,
1979.

On February 21, 1979, respondent bank filed with the Office of the Minister of Labor a motion for
reconsideration/appeal with urgent prayer to stay execution, alleging therein the following: (a) that
there is prima facie evidence of grave abuse of discretion, amounting to lack of jurisdiction on the part
of the National Labor Relations Commission, in dismissing the respondent's appeal on pure technicalities
without passing upon the merits of the appeal and (b) that the resolution appealed from is contrary to
the law and jurisprudence (pp. 260-274, NLRC rec.).

On March 19, 1979, petitioner filed its opposition to the respondent bank's appeal and alleged the
following grounds: (a) that the office of the Minister of Labor has no jurisdiction to entertain the instant
appeal pursuant to the provisions of P. D. 1391; (b) that the labor arbiter's decision being final,
executory and unappealable, execution is a matter of right for the petitioner; and (c) that the decision of
the labor arbiter dated August 25, 1975 is supported by the law and the evidence in the case (p. 364,
NLRC rec.).

On July 30, 1979, petitioner filed a second motion for execution pending appeal, praying that a writ of
execution be issued by the National Labor Relations Commission pending appeal of the case with the
Office of the Minister of Labor. Respondent bank filed its opposition thereto on August 8, 1979.

On August 13, 1979, the National Labor Relations Commission issued an order which states:
têñ.£îhqwâ£

The Chief, Research and Information Division of this Commission is hereby directed to designate a Socio-
Economic Analyst to compute the holiday pay of the employees of the Insular Bank of Asia and America
from April 1976 to the present, in accordance with the Decision of the Labor Arbiter dated August 25,
1975" (p. 80, rec.).

On November 10, 1979, the Office of the Minister of Labor, through Deputy Minister Amado G. Inciong,
issued an order, the dispositive portion of which states: têñ.£îhqwâ£

ALL THE FOREGOING CONSIDERED, let the appealed Resolution en banc of the National Labor Relations
Commission dated 20 June 1978 be, as it is hereby, set aside and a new judgment promulgated
dismissing the instant case for lack of merit (p. 436, NLRC rec.).

Hence, this petition for certiorari charging public respondent Amado G. Inciong with abuse of discretion
amounting to lack or excess of jurisdiction.

The issue in this case is: whether or not the decision of a Labor Arbiter awarding payment of regular
holiday pay can still be set aside on appeal by the Deputy Minister of Labor even though it has already
become final and had been partially executed, the finality of which was affirmed by the National Labor
Relations Commission sitting en banc, on the basis of an Implementing Rule and Policy Instruction
promulgated by the Ministry of Labor long after the said decision had become final and executory.

WE find for the petitioner.

WE agree with the petitioner's contention that Section 2, Rule IV, Book III of the implementing rules and
Policy Instruction No. 9 issued by the then Secretary of Labor are null and void since in the guise of
clarifying the Labor Code's provisions on holiday pay, they in effect amended them by enlarging the
scope of their exclusion (p. 1 1, rec.).

Article 94 of the Labor Code, as amended by P.D. 850, provides: têñ.£îhqwâ£

Art. 94. Right to holiday pay. — (a) Every worker shall be paid his regular daily wage during regular
holidays, except in retail and service establishments regularly employing less than ten (10) workers. ...

The coverage and scope of exclusion of the Labor Code's holiday pay provisions is spelled out under
Article 82 thereof which reads: têñ.£îhqwâ£

Art. 82. Coverage. — The provision of this Title shall apply to employees in all establishments and
undertakings, whether for profit or not, but not to government employees, managerial employees, field
personnel members of the family of the employer who are dependent on him for support domestic
helpers, persons in the personal service of another, and workers who are paid by results as determined
by the Secretary of Labor in appropriate regulations.

... (emphasis supplied).

From the above-cited provisions, it is clear that monthly paid employees are not excluded from the
benefits of holiday pay. However, the implementing rules on holiday pay promulgated by the then
Secretary of Labor excludes monthly paid employees from the said benefits by inserting, under Rule IV,
Book Ill of the implementing rules, Section 2, which provides that: "employees who are uniformly paid
by the month, irrespective of the number of working days therein, with a salary of not less than the
statutory or established minimum wage shall be presumed to be paid for all days in the month whether
worked or not. "

Public respondent maintains that "(T)he rules implementing P. D. 850 and Policy Instruction No. 9 were
issued to clarify the policy in the implementation of the ten (10) paid legal holidays. As interpreted,
'unworked' legal holidays are deemed paid insofar as monthly paid employees are concerned if (a) they
are receiving not less than the statutory minimum wage, (b) their monthly pay is uniform from January
to December, and (c) no deduction is made from their monthly salary on account of holidays in months
where they occur. As explained in Policy Instruction No, 9, 'The ten (10) paid legal holidays law, to start
with, is intended to benefit principally daily paid employees. In case of monthly, only those whose
monthly salary did not yet include payment for the ten (10) paid legal holidays are entitled to the
benefit' " (pp. 340-341, rec.). This contention is untenable.

It is elementary in the rules of statutory construction that when the language of the law is clear and
unequivocal the law must be taken to mean exactly what it says. In the case at bar, the provisions of the
Labor Code on the entitlement to the benefits of holiday pay are clear and explicit - it provides for both
the coverage of and exclusion from the benefits. In Policy Instruction No. 9, the then Secretary of Labor
went as far as to categorically state that the benefit is principally intended for daily paid employees,
when the law clearly states that every worker shall be paid their regular holiday pay. This is a flagrant
violation of the mandatory directive of Article 4 of the Labor Code, which states that "All doubts in the
implementation and interpretation of the provisions of this Code, including its implementing rules and
regulations, shall be resolved in favor of labor." Moreover, it shall always be presumed that the
legislature intended to enact a valid and permanent statute which would have the most beneficial effect
that its language permits (Orlosky vs. Haskell, 155 A. 112.)

Obviously, the Secretary (Minister) of Labor had exceeded his statutory authority granted by Article 5 of
the Labor Code authorizing him to promulgate the necessary implementing rules and regulations.

Public respondent vehemently argues that the intent and spirit of the holiday pay law, as expressed by
the Secretary of Labor in the case of Chartered Bank Employees Association v. The Chartered Bank
(NLRC Case No. RB-1789-75, March 24, 1976), is to correct the disadvantages inherent in the daily
compensation system of employment — holiday pay is primarily intended to benefit the daily paid
workers whose employment and income are circumscribed by the principle of "no work, no pay." This
argument may sound meritorious; but, until the provisions of the Labor Code on holiday pay is amended
by another law, monthly paid employees are definitely included in the benefits of regular holiday pay. As
earlier stated, the presumption is always in favor of law, negatively put, the Labor Code is always strictly
construed against management.
While it is true that the contemporaneous construction placed upon a statute by executive officers
whose duty is to enforce it should be given great weight by the courts, still if such construction is so
erroneous, as in the instant case, the same must be declared as null and void. It is the role of the
Judiciary to refine and, when necessary, correct constitutional (and/or statutory) interpretation, in the
context of the interactions of the three branches of the government, almost always in situations where
some agency of the State has engaged in action that stems ultimately from some legitimate area of
governmental power (The Supreme Court in Modern Role, C. B. Swisher 1958, p. 36).

Thus. in the case of Philippine Apparel Workers Union vs. National Labor Relations Commission (106
SCRA 444, July 31, 1981) where the Secretary of Labor enlarged the scope of exemption from the
coverage of a Presidential Decree granting increase in emergency allowance, this Court ruled that:
têñ.£îhqwâ£

... the Secretary of Labor has exceeded his authority when he included paragraph (k) in Section 1 of the
Rules implementing P. D. 1 1 23.

xxx xxx xxx

Clearly, the inclusion of paragraph k contravenes the statutory authority granted to the Secretary of
Labor, and the same is therefore void, as ruled by this Court in a long line of cases . . . .. têñ.£îhqwâ£

The recognition of the power of administrative officials to promulgate rules in the administration of the
statute, necessarily limited to what is provided for in the legislative enactment, may be found in the
early case of United States vs. Barrios decided in 1908. Then came in a 1914 decision, United States vs.
Tupasi Molina (29 Phil. 119) delineation of the scope of such competence. Thus: "Of course the
regulations adopted under legislative authority by a particular department must be in harmony with the
provisions of the law, and for the sole purpose of carrying into effect its general provisions. By such
regulations, of course, the law itself cannot be extended. So long, however, as the regulations relate
solely to carrying into effect the provisions of the law, they are valid." In 1936, in People vs. Santos, this
Court expressed its disapproval of an administrative order that would amount to an excess of the
regulatory power vested in an administrative official We reaffirmed such a doctrine in a 1951 decision,
where we again made clear that where an administrative order betrays inconsistency or repugnancy to
the provisions of the Act, 'the mandate of the Act must prevail and must be followed. Justice Barrera,
speaking for the Court in Victorias Milling inc. vs. Social Security Commission, citing Parker as well as
Davis did tersely sum up the matter thus: "A rule is binding on the Courts so long as the procedure fixed
for its promulgation is followed and its scope is within the statutory authority granted by the legislature,
even if the courts are not in agreement with the policy stated therein or its innate wisdom. ... On the
other hand, administrative interpretation of the law is at best merely advisory, for it is the courts that
finally determine chat the law means."
"It cannot be otherwise as the Constitution limits the authority of the President, in whom all executive
power resides, to take care that the laws be faithfully executed. No lesser administrative executive office
or agency then can, contrary to the express language of the Constitution assert for itself a more
extensive prerogative. Necessarily, it is bound to observe the constitutional mandate. There must be
strict compliance with the legislative enactment. Its terms must be followed the statute requires
adherence to, not departure from its provisions. No deviation is allowable. In the terse language of the
present Chief Justice, an administrative agency "cannot amend an act of Congress." Respondents can be
sustained, therefore, only if it could be shown that the rules and regulations promulgated by them were
in accordance with what the Veterans Bill of Rights provides" (Phil. Apparel Workers Union vs. National
Labor Relations Commission, supra, 463, 464, citing Teozon vs. Members of the Board of Administrators,
PVA 33 SCRA 585; see also Santos vs. Hon. Estenzo, et al, 109 Phil. 419; Hilado vs. Collector of Internal
Revenue, 100 Phil. 295; Sy Man vs. Jacinto & Fabros, 93 Phil. 1093; Olsen & Co., Inc. vs. Aldanese and
Trinidad, 43 Phil. 259).

This ruling of the Court was recently reiterated in the case of American Wire & Cable Workers Union
(TUPAS) vs. The National Labor Relations Commission and American Wire & Cable Co., Inc., G.R. No.
53337, promulgated on June 29, 1984.

In view of the foregoing, Section 2, Rule IV, Book III of the Rules to implement the Labor Code and Policy
instruction No. 9 issued by the then Secretary of Labor must be declared null and void. Accordingly,
public respondent Deputy Minister of Labor Amado G. Inciong had no basis at all to deny the members
of petitioner union their regular holiday pay as directed by the Labor Code.

II

It is not disputed that the decision of Labor Arbiter Ricarte T. Soriano dated August 25, 1975, had
already become final, and was, in fact, partially executed by the respondent bank.

However, public respondent maintains that on the authority of De Luna vs. Kayanan, 61 SCRA 49,
November 13, 1974, he can annul the final decision of Labor Arbiter Soriano since the ensuing
promulgation of the integrated implementing rules of the Labor Code pursuant to P.D. 850 on February
16, 1976, and the issuance of Policy Instruction No. 9 on April 23, 1976 by the then Secretary of Labor
are facts and circumstances that transpired subsequent to the promulgation of the decision of the labor
arbiter, which renders the execution of the said decision impossible and unjust on the part of herein
respondent bank (pp. 342-343, rec.).
This contention is untenable.

To start with, unlike the instant case, the case of De Luna relied upon by the public respondent is not a
labor case wherein the express mandate of the Constitution on the protection to labor is applied. Thus
Article 4 of the Labor Code provides that, "All doubts in the implementation and interpretation of the
provisions of this Code, including its implementing rules and regulations, shall be resolved in favor of
labor and Article 1702 of the Civil Code provides that, " In case of doubt, all labor legislation and all labor
contracts shall be construed in favor of the safety and decent living for the laborer.

Consequently, contrary to public respondent's allegations, it is patently unjust to deprive the members
of petitioner union of their vested right acquired by virtue of a final judgment on the basis of a labor
statute promulgated following the acquisition of the "right".

On the question of whether or not a law or statute can annul or modify a judicial order issued prior to its
promulgation, this Court, through Associate Justice Claro M. Recto, said: têñ.£îhqwâ£

xxx xxx xxx

We are decidedly of the opinion that they did not. Said order, being unappealable, became final on the
date of its issuance and the parties who acquired rights thereunder cannot be deprived thereof by a
constitutional provision enacted or promulgated subsequent thereto. Neither the Constitution nor the
statutes, except penal laws favorable to the accused, have retroactive effect in the sense of annulling or
modifying vested rights, or altering contractual obligations" (China Ins. & Surety Co. vs. Judge of First
Instance of Manila, 63 Phil. 324, emphasis supplied).

In the case of In re: Cunanan, et al., 19 Phil. 585, March 18, 1954, this Court said: "... when a court
renders a decision or promulgates a resolution or order on the basis of and in accordance with a certain
law or rule then in force, the subsequent amendment or even repeal of said law or rule may not affect
the final decision, order, or resolution already promulgated, in the sense of revoking or rendering it void
and of no effect." Thus, the amendatory rule (Rule IV, Book III of the Rules to Implement the Labor
Code) cannot be given retroactive effect as to modify final judgments. Not even a law can validly annul
final decisions (In re: Cunanan, et al., Ibid).

Furthermore, the facts of the case relied upon by the public respondent are not analogous to that of the
case at bar. The case of De Luna speaks of final and executory judgment, while iii the instant case, the
final judgment is partially executed. just as the court is ousted of its jurisdiction to annul or modify a
judgment the moment it becomes final, the court also loses its jurisdiction to annul or modify a writ of
execution upon its service or execution; for, otherwise, we will have a situation wherein a final and
executed judgment can still be annulled or modified by the court upon mere motion of a panty This
would certainly result in endless litigations thereby rendering inutile the rule of law.

Respondent bank counters with the argument that its partial compliance was involuntary because it did
so under pain of levy and execution of its assets (p. 138, rec.). WE find no merit in this argument.
Respondent bank clearly manifested its voluntariness in complying with the decision of the labor arbiter
by not appealing to the National Labor Relations Commission as provided for under the Labor Code
under Article 223. A party who waives his right to appeal is deemed to have accepted the judgment,
adverse or not, as correct, especially if such party readily acquiesced in the judgment by starting to
execute said judgment even before a writ of execution was issued, as in this case. Under these
circumstances, to permit a party to appeal from the said partially executed final judgment would make a
mockery of the doctrine of finality of judgments long enshrined in this jurisdiction.

Section I of Rule 39 of the Revised Rules of Court provides that "... execution shall issue as a matter of
right upon the expiration of the period to appeal ... or if no appeal has been duly perfected." This rule
applies to decisions or orders of labor arbiters who are exercising quasi-judicial functions since "... the
rule of execution of judgments under the rules should govern all kinds of execution of judgment, unless
it is otherwise provided in other laws" Sagucio vs. Bulos 5 SCRA 803) and Article 223 of the Labor Code
provides that "... decisions, awards, or orders of the Labor Arbiter or compulsory arbitrators are final
and executory unless appealed to the Commission by any or both of the parties within ten (10) days
from receipt of such awards, orders, or decisions. ..."

Thus, under the aforecited rule, the lapse of the appeal period deprives the courts of jurisdiction to alter
the final judgment and the judgment becomes final ipso jure (Vega vs. WCC, 89 SCRA 143, citing Cruz vs.
WCC, 2 PHILAJUR 436, 440, January 31, 1978; see also Soliven vs. WCC, 77 SCRA 621; Carrero vs. WCC
and Regala vs. WCC, decided jointly, 77 SCRA 297; Vitug vs. Republic, 75 SCRA 436; Ramos vs. Republic,
69 SCRA 576).

In Galvez vs. Philippine Long Distance Telephone Co., 3 SCRA 422, 423, October 31, 1961, where the
lower court modified a final order, this Court ruled thus: têñ.£îhqwâ£

xxx xxx xxx

The lower court was thus aware of the fact that it was thereby altering or modifying its order of January
8, 1959. Regardless of the excellence of the motive for acting as it did, we are constrained to hold
however, that the lower court had no authorities to make said alteration or modification. ...
xxx xxx xxx

The equitable considerations that led the lower court to take the action complained of cannot offset the
dem ands of public policy and public interest — which are also responsive to the tenets of equity —
requiring that an issues passed upon in decisions or final orders that have become executory, be
deemed conclusively disposed of and definitely closed for, otherwise, there would be no end to
litigations, thus setting at naught the main role of courts of justice, which is to assist in the enforcement
of the rule of law and the maintenance of peace and order, by settling justiciable controversies with
finality.

xxx xxx xxx

In the recent case of Gabaya vs. Mendoza, 113 SCRA 405, 406, March 30, 1982, this Court said:
têñ.£îhqwâ£

xxx xxx xxx

In Marasigan vs. Ronquillo (94 Phil. 237), it was categorically stated that the rule is absolute that after a
judgment becomes final by the expiration of the period provided by the rules within which it so
becomes, no further amendment or correction can be made by the court except for clerical errors or
mistakes. And such final judgment is conclusive not only as to every matter which was offered and
received to sustain or defeat the claim or demand but as to any other admissible matter which must
have been offered for that purpose (L-7044, 96 Phil. 526). In the earlier case of Contreras and Ginco vs.
Felix and China Banking Corp., Inc. (44 O.G. 4306), it was stated that the rule must be adhered to
regardless of any possible injustice in a particular case for (W)e have to subordinate the equity of a
particular situation to the over-mastering need of certainty and immutability of judicial pronouncements

xxx xxx xxx

III

The despotic manner by which public respondent Amado G. Inciong divested the members of the
petitioner union of their rights acquired by virtue of a final judgment is tantamount to a deprivation of
property without due process of law Public respondent completely ignored the rights of the petitioner
union's members in dismissing their complaint since he knew for a fact that the judgment of the labor
arbiter had long become final and was even partially executed by the respondent bank.

A final judgment vests in the prevailing party a right recognized and protected by law under the due
process clause of the Constitution (China Ins. & Surety Co. vs. Judge of First Instance of Manila, 63 Phil.
324). A final judgment is "a vested interest which it is right and equitable that the government should
recognize and protect, and of which the individual could no. be deprived arbitrarily without injustice"
(Rookledge v. Garwood, 65 N.W. 2d 785, 791).

lt is by this guiding principle that the due process clause is interpreted. Thus, in the pithy language of
then Justice, later Chief Justice, Concepcion "... acts of Congress, as well as those of the Executive, can
deny due process only under pain of nullity, and judicial proceedings suffering from the same flaw are
subject to the same sanction, any statutory provision to the contrary notwithstanding (Vda. de Cuaycong
vs. Vda. de Sengbengco 110 Phil. 118, emphasis supplied), And "(I)t has been likewise established that a
violation of a constitutional right divested the court of jurisdiction; and as a consequence its judgment is
null and void and confers no rights" (Phil. Blooming Mills Employees Organization vs. Phil. Blooming
Mills Co., Inc., 51 SCRA 211, June 5, 1973).

Tested by and pitted against this broad concept of the constitutional guarantee of due process, the
action of public respondent Amado G. Inciong is a clear example of deprivation of property without due
process of law and constituted grave abuse of discretion, amounting to lack or excess of jurisdiction in
issuing the order dated November 10, 1979.

WHEREFORE, THE PETITION IS HEREBY GRANTED, THE ORDER OF PUBLIC RESPONDENT IS SET ASIDE,
AND THE DECISION OF LABOR ARBITER RICARTE T. SORIANO DATED AUGUST 25, 1975, IS HEREBY
REINSTATED.

COSTS AGAINST PRIVATE RESPONDENT INSULAR BANK OF ASIA AND AMERICA

SO ORDERED.1äwphï1.ñët

Guerrero, Escolin and Cuevas, JJ., concur.

Aquino and Abad Santos, JJ., concur in the result.

Concepcion Jr., J., took no part.
Republic of the Philippines

SUPREME COURT

Manila

EN BANC

G.R. No. L-44717 August 28, 1985

THE CHARTERED BANK EMPLOYEES ASSOCIATION, petitioner,

vs.

HON. BLAS F. OPLE, in his capacity as the Incumbent Secretary of Labor, and THE CHARTERED BANK,
respondents.

GUTIERREZ, JR., J.:

This is a petition for certiorari seeking to annul the decision of the respondent Secretary, now Minister
of Labor which denied the petitioner's claim for holiday pay and its claim for premium and overtime pay
differentials. The petitioner claims that the respondent Minister of Labor acted contrary to law and
jurisprudence and with grave abuse of discretion in promulgating Sec. 2, Rule IV, Book III of the
Integrated Rules and in issuing Policy Instruction No. 9, both referring to holidays with pay.

On May 20, 1975, the Chartered Bank Employees Association, in representation of its monthly paid
employees/members, instituted a complaint with the Regional Office No. IV, Department of Labor, now
Ministry of Labor and Employment (MOLE) against private respondent Chartered Bank, for the payment
of ten (10) unworked legal holidays, as well as for premium and overtime differentials for worked legal
holidays from November 1, 1974.

The memorandum for the respondents summarizes the admitted and/or undisputed facts as follows:

l. The work force of respondent bank consists of 149 regular employees, all of whom are paid by
the month;
2. Under their existing collective bargaining agreement, (Art. VII thereof) said monthly paid
employees are paid for overtime work as follows:

Section l. The basic work week for all employees excepting security guards who by virtue of the
nature of their work are required to be at their posts for 365 days per year, shall be forty (40) hours
based on five (5) eight (8) hours days, Monday to Friday.

Section 2. Time and a quarter hourly rate shall be paid for authorized work performed in excess of eight
(8) hours from Monday through Friday and for any hour of work performed on Saturdays subject to
Section 5 hereof.

Section 3. Time and a half hourly rate shall be paid for authorized work performed on Sundays, legal and
special holidays.

xxx xxx xxx

xxx xxx xxx

Section 5. The provisions of Section I above notwithstanding the BANK may revert to the six (6) days
work week, to include Saturday for a four (4) hour day, in the event the Central Bank should require
commercial banks to open for business on Saturday.

3. In computing overtime pay and premium pay for work done during regular holidays, the divisor
used in arriving at the daily rate of pay is 251 days although formerly the divisor used was 303 days and
this was when the respondent bank was still operating on a 6-day work week basis. However, for
purposes of computing deductions corresponding to absences without pay the divisor used is 365 days.

4. All regular monthly paid employees of respondent bank are receiving salaries way beyond the
statutory or minimum rates and are among the highest paid employees in the banking industry.

5. The salaries of respondent bank's monthly paid employees suffer no deduction for holidays
occurring within the month.
On the bases of the foregoing facts, both the arbitrator and the National Labor Relations Commission
(NLRC) ruled in favor of the petitioners ordering the respondent bank to pay its monthly paid
employees, holiday pay for the ten (10) legal holidays effective November 1, 1974 and to pay premium
or overtime pay differentials to all employees who rendered work during said legal holidays. On appeal,
the Minister of Labor set aside the decision of the NLRC and dismissed the petitioner's claim for lack of
merit basing its decision on Section 2, Rule IV, Book Ill of the Integrated Rules and Policy Instruction No.
9, which respectively provide:

Sec. 2. Status of employees paid by the month. Employees who are uniformly paid by the month,
irrespective of the number of working days therein, with a salary of not less than the statutory or
established minimum wage shall be presumed to be paid for all days in the month whether worked or
not.

POLICY INSTRUCTION NO. 9

TO: All Regional Directors

SUBJECT: PAID LEGAL HOLIDAYS

The rules implementing PD 850 have clarified the policy in the implementation of the ten (10) paid legal
holidays. Before PD 850, the number of working days a year in a firm was considered important in
determining entitlement to the benefit. Thus, where an employee was working for at least 313 days, he
was considered definitely already paid. If he was working for less than 313, there was no certainty
whether the ten (10) paid legal holidays were already paid to him or not.

The ten (10) paid legal holidays law, to start with, is intended to benefit principally daily employees. In
the case of monthly, only those whose monthly salary did not yet include payment for the ten (10) paid
legal holidays are entitled to the benefit.

Under the rules implementing PD 850, this policy has been fully clarified to eliminate controversies on
the entitlement of monthly paid employees. The new determining rule is this: 'If the monthly paid
employee is receiving not less than P240, the maximum monthly minimum wage, and his monthly pay is
uniform from January to December, he is presumed to be already paid the ten (10) paid legal holidays.
However, if deductions are made from his monthly salary on account of holidays in months where they
occur, then he is still entitled to the ten (10) paid legal holidays.
These new interpretations must be uniformly and consistently upheld.

This issuance shall take effect immediately.

The issues are presented in the form of the following assignments of errors:

First Error

Whether or not the Secretary of Labor erred and acted contrary to law in promulgating Sec. 2, Rule IV,
Book III of the Integrated Rules and Policy Instruction No. 9.

Second Error

Whether or not the respondent Secretary of Labor abused his discretion and acted contrary to law in
applying Sec. 2, Rule IV of the Integrated Rules and Policy Instruction No. 9 abovestated to private
respondent's monthly-paid employees.

Third Error

Whether or not the respondent Secretary of Labor, in not giving due credence to the respondent bank's
practice of paying its employees base pay of 100% and premium pay of 50% for work done during legal
holidays, acted contrary to law and abused his discretion in denying the claim of petitioners for
unworked holidays and premium and overtime pay differentials for worked holidays.

The petitioner contends that the respondent Minister of Labor gravely abused his discretion in
promulgating Section 2, Rule IV, Book III of the Integrated Rules and Policy Instruction No. 9 as
guidelines for the implementation of Articles 82 and 94 of the Labor Code and in applying said guidelines
to this case. It maintains that while it is true that the respondent Minister has the authority in the
performance of his duty to promulgate rules and regulations to implement, construe and clarify the
Labor Code, such power is limited by provisions of the statute sought to be implemented, construed or
clarified. According to the petitioner, the so-called "guidelines" promulgated by the respondent Minister
totally contravened and violated the Code by excluding the employees/members of the petitioner from
the benefits of the holiday pay, when the Code itself did not provide for their expanding the Code's clear
and concise conclusion and notwithstanding the Code's clear and concise phraseology defining those
employees who are covered and those who are excluded from the benefits of holiday pay.

On the other hand, the private respondent contends that the questioned guidelines did not deprive the
petitioner's members of the benefits of holiday pay but merely classified those monthly paid employees
whose monthly salary already includes holiday pay and those whose do not, and that the guidelines did
not deprive the employees of holiday pay. It states that the question to be clarified is whether or not the
monthly salaries of the petitioner's members already includes holiday pay. Thus, the guidelines were
promulgated to avoid confusion or misconstruction in the application of Articles 82 and 94 of the Labor
Code but not to violate them. Respondent explains that the rationale behind the promulgation of the
questioned guidelines is to benefit the daily paid workers who, unlike monthly-paid employees, suffer
deductions in their salaries for not working on holidays. Hence, the Holiday Pay Law was enacted
precisely to countervail the disparity between daily paid workers and monthly-paid employees.

The decision in Insular Bank of Asia and America Employees' Union (IBAAEU) v. Inciong (132 SCRA 663)
resolved a similar issue. Significantly, the petitioner in that case was also a union of bank employees. We
ruled that Section 2, Rule IV, Book III of the Integrated Rules and Policy Instruction No. 9, are contrary to
the provisions of the Labor Code and, therefore, invalid This Court stated:

It is elementary in the rules of statutory construction that when the language of the law is clear and
unequivocal the law must be taken to mean exactly what it says. In the case at bar, the provisions of the
Labor Code on the entitlement to the benefits of holiday pay are clear and explicit it provides for both
the coverage of and exclusion from the benefit. In Policy Instruction No. 9, the then Secretary of Labor
went as far as to categorically state that the benefit is principally intended for daily paid employees,
when the law clearly states that every worker shall be paid their regular holiday pay. This is flagrant
violation of the mandatory directive of Article 4 of the Labor Code, which states that 'All doubts in the
implementation and interpretation of the provisions of this Code, including its implementing rules and
regulations, shall be resolved in favor of labor.' Moreover, it shall always be presumed that the
legislature intended to enact a valid and permanent statute which would have the most beneficial effect
that its language permits (Orlosky v. Hasken, 155 A. 112)

Obviously, the Secretary (Minister) of Labor had exceeded his statutory authority granted by Article 5 of
the Labor Code authorizing him to promulgate the necessary implementing rules and regulations.

We further ruled:

While it is true that the contemporaneous construction placed upon a statute by executive officers
whose duty is to enforce it should be given great weight by the courts, still if such construction is so
erroneous, as in the instant case, the same must be declared as null and void. It is the role of the
Judiciary to refine and, when necessary correct constitutional (and/or statutory) interpretation, in the
context of the interactions of the three branches of the government, almost always in situations where
some agency of the State has engaged in action that stems ultimately from some legitimate area of
governmental power (The Supreme Court in Modern Role, C.B. Swisher 1958, p. 36).

xxx xxx xxx

In view of the foregoing, Section 2, Rule IV, Book III of the Rules to implement the Labor Code and Policy
Instruction No. 9 issued by the then Secretary of Labor must be declared null and void. Accordinglyl
public respondent Deputy Minister of Labor Amado G. Inciong had no basis at all to deny the members
of petitioner union their regular holiday pay as directed by the Labor Code.

Since the private respondent premises its action on the invalidated rule and policy instruction, it is clear
that the employees belonging to the petitioner association are entitled to the payment of ten (10) legal
holidays under Articles 82 and 94 of the Labor Code, aside from their monthly salary. They are not
among those excluded by law from the benefits of such holiday pay.

Presidential Decree No. 850 states who are excluded from the holiday provisions of that law. It states:

ART. 82. Coverage. The provision of this Title shall apply to employees in all establishments and
undertakings, whether for profit or not, but not to government employees, managerial employees, field
personnel members of the family of the employer who are dependent on him for support, domestic
helpers, persons in the personal service of another, and workers who are paid by results as determined
by the Secretary of Labor in appropriate regulations. (Emphasis supplied).

The questioned Section 2, Rule IV, Book III of the Integrated Rules and the Secretary's Policy Instruction
No. 9 add another excluded group, namely, "employees who are uniformly paid by the month." While
the additional exclusion is only in the form of a presumption that all monthly paid employees have
already been paid holiday pay, it constitutes a taking away or a deprivation which must be in the law if it
is to be valid. An administrative interpretation which diminishes the benefits of labor more than what
the statute delimits or withholds is obviously ultra vires.

It is argued that even without the presumption found in the rules and in the policy instruction, the
company practice indicates that the monthly salaries of the employees are so computed as to include
the holiday pay provided by law. The petitioner contends otherwise.
One strong argument in favor of the petitioner's stand is the fact that the Chartered Bank, in computing
overtime compensation for its employees, employs a "divisor" of 251 days. The 251 working days divisor
is the result of subtracting all Saturdays, Sundays and the ten (10) legal holidays from the total number
of calendar days in a year. If the employees are already paid for all non-working days, the divisor should
be 365 and not 251.

The situation is muddled somewhat by the fact that, in computing the employees' absences from work,
the respondent bank uses 365 as divisor. Any slight doubts, however, must be resolved in favor of the
workers. This is in keeping with the constitutional mandate of promoting social justice and affording
protection to labor (Sections 6 and 9, Article II, Constitution). The Labor Code, as amended, itself
provides:

ART. 4. Construction in favor of labor. All doubts in the implementation and interpretation of the
provisions of this Code, including its implementing rules and regulations, shall be resolved in favor of
labor.

Any remaining doubts which may arise from the conflicting or different divisors used in the computation
of overtime pay and employees' absences are resolved by the manner in which work actually rendered
on holidays is paid. Thus, whenever monthly paid employees work on a holiday, they are given an
additional 100% base pay on top of a premium pay of 50%. If the employees' monthly pay already
includes their salaries for holidays, they should be paid only premium pay but not both base pay and
premium pay.

The contention of the respondent that 100% base pay and 50% premium pay for work actually rendered
on holidays is given in addition to monthly salaries only because the collective bargaining agreement so
provides is itself an argument in favor of the petitioner stand. It shows that the Collective Bargaining
Agreement already contemplated a divisor of 251 days for holiday pay computations before the
questioned presumption in the Integrated Rules and the Policy Instruction was formulated. There is
furthermore a similarity between overtime pay, which is computed on the basis of 251 working days a
year, and holiday pay, which should be similarly treated notwithstanding the public respondents'
issuances. In both cases overtime work and holiday work- the employee works when he is supposed to
be resting. In the absence of an express provision of the CBA or the law to the contrary, the computation
should be similarly handled.

We are not unmindful of the fact that the respondent's employees are among the highest paid in the
industry. It is not the intent of this Court to impose any undue burdens on an employer which is already
doing its best for its personnel. we have to resolve the labor dispute in the light of the parties' own
collective bargaining agreement and the benefits given by law to all workers. When the law provides
benefits for "employees in all establishments and undertakings, whether for profit or not" and lists
specifically the employees not entitled to those benefits, the administrative agency implementing that
law cannot exclude certain employees from its coverage simply because they are paid by the month or
because they are already highly paid. The remedy lies in a clear redrafting of the collective bargaining
agreement with a statement that monthly pay already includes holiday pay or an amendment of the law
to that effect but not an administrative rule or a policy instruction.

WHEREFORE, the September 7, 1976 order of the public respondent is hereby REVERSED and SET ASIDE.
The March 24, 1976 decision of the National Labor Relations Commission which affirmed the October
30, 1975 resolution of the Labor Arbiter but deleted interest payments is REINSTATED.

SO ORDERED.

Makasiar, C.J., Concepcion, Jr., Melencio-Herrera, Plana, Escolin, Relova, De la Fuente, Cuevas, Alampay
and Patajo, JJ., concur.

Teehankee, J., in the result.

Aquino, J., took no part.

The Lawphil Project - Arellano Law Foundation

Republic of the Philippines

SUPREME COURT

Manila

EN BANC

G.R. No. L-16704 March 17, 1962

VICTORIAS MILLING COMPANY, INC., petitioner-appellant,

vs.

SOCIAL SECURITY COMMISSION, respondent-appellee.

Ross, Selph and Carrascoso for petitioner-appellant.

Office of the Solicitor General and Ernesto T. Duran for respondent-appellee.

BARRERA, J.:

On October 15, 1958, the Social Security Commission issued its Circular No. 22 of the following tenor: .

Effective November 1, 1958, all Employers in computing the premiums due the System, will take into
consideration and include in the Employee's remuneration all bonuses and overtime pay, as well as the
cash value of other media of remuneration. All these will comprise the Employee's remuneration or
earnings, upon which the 3-1/2% and 2-1/2% contributions will be based, up to a maximum of P500 for
any one month.

Upon receipt of a copy thereof, petitioner Victorias Milling Company, Inc., through counsel, wrote the
Social Security Commission in effect protesting against the circular as contradictory to a previous
Circular No. 7, dated October 7, 1957 expressly excluding overtime pay and bonus in the computation of
the employers' and employees' respective monthly premium contributions, and submitting, "In order to
assist your System in arriving at a proper interpretation of the term 'compensation' for the purposes of"
such computation, their observations on Republic Act 1161 and its amendment and on the general
interpretation of the words "compensation", "remuneration" and "wages". Counsel further questioned
the validity of the circular for lack of authority on the part of the Social Security Commission to
promulgate it without the approval of the President and for lack of publication in the Official Gazette.

Overruling these objections, the Social Security Commission ruled that Circular No. 22 is not a rule or
regulation that needed the approval of the President and publication in the Official Gazette to be
effective, but a mere administrative interpretation of the statute, a mere statement of general policy or
opinion as to how the law should be construed.

Not satisfied with this ruling, petitioner comes to this Court on appeal.

The single issue involved in this appeal is whether or not Circular No. 22 is a rule or regulation, as
contemplated in Section 4(a) of Republic Act 1161 empowering the Social Security Commission "to
adopt, amend and repeal subject to the approval of the President such rules and regulations as may be
necessary to carry out the provisions and purposes of this Act."

There can be no doubt that there is a distinction between an administrative rule or regulation and an
administrative interpretation of a law whose enforcement is entrusted to an administrative body. When
an administrative agency promulgates rules and regulations, it "makes" a new law with the force and
effect of a valid law, while when it renders an opinion or gives a statement of policy, it merely interprets
a pre-existing law (Parker, Administrative Law, p. 197; Davis, Administrative Law, p. 194). Rules and
regulations when promulgated in pursuance of the procedure or authority conferred upon the
administrative agency by law, partake of the nature of a statute, and compliance therewith may be
enforced by a penal sanction provided in the law. This is so because statutes are usually couched in
general terms, after expressing the policy, purposes, objectives, remedies and sanctions intended by the
legislature. The details and the manner of carrying out the law are often times left to the administrative
agency entrusted with its enforcement. In this sense, it has been said that rules and regulations are the
product of a delegated power to create new or additional legal provisions that have the effect of law.
(Davis, op. cit., p. 194.) .

A rule is binding on the courts so long as the procedure fixed for its promulgation is followed and its
scope is within the statutory authority granted by the legislature, even if the courts are not in
agreement with the policy stated therein or its innate wisdom (Davis, op. cit., 195-197). On the other
hand, administrative interpretation of the law is at best merely advisory, for it is the courts that finally
determine what the law means.

Circular No. 22 in question was issued by the Social Security Commission, in view of the amendment of
the provisions of the Social Security Law defining the term "compensation" contained in Section 8 (f) of
Republic Act No. 1161 which, before its amendment, reads as follows: .
(f) Compensation — All remuneration for employment include the cash value of any remuneration paid
in any medium other than cash except (1) that part of the remuneration in excess of P500 received
during the month; (2) bonuses, allowances or overtime pay; and (3) dismissal and all other payments
which the employer may make, although not legally required to do so.

Republic Act No. 1792 changed the definition of "compensation" to:

(f) Compensation — All remuneration for employment include the cash value of any remuneration paid
in any medium other than cash except that part of the remuneration in excess of P500.00 received
during the month.

It will thus be seen that whereas prior to the amendment, bonuses, allowances, and overtime pay given
in addition to the regular or base pay were expressly excluded, or exempted from the definition of the
term "compensation", such exemption or exclusion was deleted by the amendatory law. It thus became
necessary for the Social Security Commission to interpret the effect of such deletion or elimination.
Circular No. 22 was, therefore, issued to apprise those concerned of the interpretation or understanding
of the Commission, of the law as amended, which it was its duty to enforce. It did not add any duty or
detail that was not already in the law as amended. It merely stated and circularized the opinion of the
Commission as to how the law should be construed. 1äwphï1.ñët

The case of People v. Jolliffe (G.R. No. L-9553, promulgated on May 30, 1959) cited by appellant, does
not support its contention that the circular in question is a rule or regulation. What was there said was
merely that a regulation may be incorporated in the form of a circular. Such statement simply meant
that the substance and not the form of a regulation is decisive in determining its nature. It does not lay
down a general proposition of law that any circular, regardless of its substance and even if it is only
interpretative, constitutes a rule or regulation which must be published in the Official Gazette before it
could take effect.

The case of People v. Que Po Lay (50 O.G. 2850) also cited by appellant is not applicable to the present
case, because the penalty that may be incurred by employers and employees if they refuse to pay the
corresponding premiums on bonus, overtime pay, etc. which the employer pays to his employees, is not
by reason of non-compliance with Circular No. 22, but for violation of the specific legal provisions
contained in Section 27(c) and (f) of Republic Act No. 1161.

We find, therefore, that Circular No. 22 purports merely to advise employers-members of the System of
what, in the light of the amendment of the law, they should include in determining the monthly
compensation of their employees upon which the social security contributions should be based, and
that such circular did not require presidential approval and publication in the Official Gazette for its
effectivity.

It hardly need be said that the Commission's interpretation of the amendment embodied in its Circular
No. 22, is correct. The express elimination among the exemptions excluded in the old law, of all
bonuses, allowances and overtime pay in the determination of the "compensation" paid to employees
makes it imperative that such bonuses and overtime pay must now be included in the employee's
remuneration in pursuance of the amendatory law. It is true that in previous cases, this Court has held
that bonus is not demandable because it is not part of the wage, salary, or compensation of the
employee. But the question in the instant case is not whether bonus is demandable or not as part of
compensation, but whether, after the employer does, in fact, give or pay bonus to his employees, such
bonuses shall be considered compensation under the Social Security Act after they have been received
by the employees. While it is true that terms or words are to be interpreted in accordance with their
well-accepted meaning in law, nevertheless, when such term or word is specifically defined in a
particular law, such interpretation must be adopted in enforcing that particular law, for it can not be
gainsaid that a particular phrase or term may have one meaning for one purpose and another meaning
for some other purpose. Such is the case that is now before us. Republic Act 1161 specifically defined
what "compensation" should mean "For the purposes of this Act". Republic Act 1792 amended such
definition by deleting same exemptions authorized in the original Act. By virtue of this express
substantial change in the phraseology of the law, whatever prior executive or judicial construction may
have been given to the phrase in question should give way to the clear mandate of the new law.

IN VIEW OF THE FOREGOING, the Resolution appealed from is hereby affirmed, with costs against
appellant. So ordered.

Bengzon, C.J., Padilla, Bautista Angelo, Labrador, Concepcion, Reyes, J.B.L., Paredes, Dizon and De Leon,
JJ., concur.