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aG.R. No.

L-19650 September 29, 1966

CALTEX (PHILIPPINES), INC., petitioner-appellee,


vs.
ENRICO PALOMAR, in his capacity as THE POSTMASTER GENERAL, respondent-appellant.

Office of the Solicitor General for respondent and appellant.


Ross, Selph and Carrascoso for petitioner and appellee.

CASTRO, J.:

In the year 1960 the Caltex (Philippines) Inc. (hereinafter referred to as Caltex) conceived and laid the groundwork for a promotional scheme calculated to drum up patronage for its
oil products. Denominated "Caltex Hooded Pump Contest", it calls for participants therein to estimate the actual number of liters a hooded gas pump at each Caltex station will
dispense during a specified period. Employees of the Caltex (Philippines) Inc., its dealers and its advertising agency, and their immediate families excepted, participation is to be
open indiscriminately to all "motor vehicle owners and/or licensed drivers". For the privilege to participate, no fee or consideration is required to be paid, no purchase of Caltex
products required to be made. Entry forms are to be made available upon request at each Caltex station where a sealed can will be provided for the deposit of accomplished entry
stubs.

A three-staged winner selection system is envisioned. At the station level, called "Dealer Contest", the contestant whose estimate is closest to the actual number of liters dispensed
by the hooded pump thereat is to be awarded the first prize; the next closest, the second; and the next, the third. Prizes at this level consist of a 3-burner kerosene stove for first; a
thermos bottle and a Ray-O-Vac hunter lantern for second; and an Everready Magnet-lite flashlight with batteries and a screwdriver set for third. The first-prize winner in each station
will then be qualified to join in the "Regional Contest" in seven different regions. The winning stubs of the qualified contestants in each region will be deposited in a sealed can from
which the first-prize, second-prize and third-prize winners of that region will be drawn. The regional first-prize winners will be entitled to make a three-day all-expenses-paid round
trip to Manila, accompanied by their respective Caltex dealers, in order to take part in the "National Contest". The regional second-prize and third-prize winners will receive cash
prizes of P500 and P300, respectively. At the national level, the stubs of the seven regional first-prize winners will be placed inside a sealed can from which the drawing for the final
first-prize, second-prize and third-prize winners will be made. Cash prizes in store for winners at this final stage are: P3,000 for first; P2,000 for second; Pl,500 for third; and P650 as
consolation prize for each of the remaining four participants.

Foreseeing the extensive use of the mails not only as amongst the media for publicizing the contest but also for the transmission of communications relative thereto, representations
were made by Caltex with the postal authorities for the contest to be cleared in advance for mailing, having in view sections 1954(a), 1982 and 1983 of the Revised Administrative
Code, the pertinent provisions of which read as follows:

SECTION 1954. Absolutely non-mailable matter. — No matter belonging to any of the following classes, whether sealed as first-class matter or not, shall be imported into the
Philippines through the mails, or to be deposited in or carried by the mails of the Philippines, or be delivered to its addressee by any officer or employee of the Bureau of Posts:
Written or printed matter in any form advertising, describing, or in any manner pertaining to, or conveying or purporting to convey any information concerning any lottery, gift
enterprise, or similar scheme depending in whole or in part upon lot or chance, or any scheme, device, or enterprise for obtaining any money or property of any kind by means of
false or fraudulent pretenses, representations, or promises.

"SECTION 1982. Fraud orders.—Upon satisfactory evidence that any person or company is engaged in conducting any lottery, gift enterprise, or scheme for the distribution of
money, or of any real or personal property by lot, chance, or drawing of any kind, or that any person or company is conducting any scheme, device, or enterprise for obtaining money
or property of any kind through the mails by means of false or fraudulent pretenses, representations, or promises, the Director of Posts may instruct any postmaster or other officer
or employee of the Bureau to return to the person, depositing the same in the mails, with the word "fraudulent" plainly written or stamped upon the outside cover thereof, any mail
matter of whatever class mailed by or addressed to such person or company or the representative or agent of such person or company.

SECTION 1983. Deprivation of use of money order system and telegraphic transfer service.—The Director of Posts may, upon evidence satisfactory to him that any person or
company is engaged in conducting any lottery, gift enterprise or scheme for the distribution of money, or of any real or personal property by lot, chance, or drawing of any kind, or
that any person or company is conducting any scheme, device, or enterprise for obtaining money or property of any kind through the mails by means of false or fraudulent pretenses,
representations, or promise, forbid the issue or payment by any postmaster of any postal money order or telegraphic transfer to said person or company or to the agent of any such
person or company, whether such agent is acting as an individual or as a firm, bank, corporation, or association of any kind, and may provide by regulation for the return to the
remitters of the sums named in money orders or telegraphic transfers drawn in favor of such person or company or its agent.

The overtures were later formalized in a letter to the Postmaster General, dated October 31, 1960, in which the Caltex, thru counsel, enclosed a copy of the contest rules and
endeavored to justify its position that the contest does not violate the anti-lottery provisions of the Postal Law. Unimpressed, the then Acting Postmaster General opined that the
scheme falls within the purview of the provisions aforesaid and declined to grant the requested clearance. In its counsel's letter of December 7, 1960, Caltex sought a
reconsideration of the foregoing stand, stressing that there being involved no consideration in the part of any contestant, the contest was not, under controlling authorities,
condemnable as a lottery. Relying, however, on an opinion rendered by the Secretary of Justice on an unrelated case seven years before (Opinion 217, Series of 1953), the
Postmaster General maintained his view that the contest involves consideration, or that, if it does not, it is nevertheless a "gift enterprise" which is equally banned by the Postal Law,
and in his letter of December 10, 1960 not only denied the use of the mails for purposes of the proposed contest but as well threatened that if the contest was conducted, "a fraud
order will have to be issued against it (Caltex) and all its representatives".

Caltex thereupon invoked judicial intervention by filing the present petition for declaratory relief against Postmaster General Enrico Palomar, praying "that judgment be rendered
declaring its 'Caltex Hooded Pump Contest' not to be violative of the Postal Law, and ordering respondent to allow petitioner the use of the mails to bring the contest to the attention
of the public". After issues were joined and upon the respective memoranda of the parties, the trial court rendered judgment as follows:

In view of the foregoing considerations, the Court holds that the proposed 'Caltex Hooded Pump Contest' announced to be conducted by the petitioner under the rules marked as
Annex B of the petitioner does not violate the Postal Law and the respondent has no right to bar the public distribution of said rules by the mails.

The respondent appealed.

The parties are now before us, arrayed against each other upon two basic issues: first, whether the petition states a sufficient cause of action for declaratory relief; and second,
whether the proposed "Caltex Hooded Pump Contest" violates the Postal Law. We shall take these up in seriatim.
1. By express mandate of section 1 of Rule 66 of the old Rules of Court, which was the applicable legal basis for the remedy at the time it was invoked, declaratory relief is available
to any person "whose rights are affected by a statute . . . to determine any question of construction or validity arising under the . . . statute and for a declaration of his rights
thereunder" (now section 1, Rule 64, Revised Rules of Court). In amplification, this Court, conformably to established jurisprudence on the matter, laid down certain conditions sine
qua non therefor, to wit: (1) there must be a justiciable controversy; (2) the controversy must be between persons whose interests are adverse; (3) the party seeking declaratory
relief must have a legal interest in the controversy; and (4) the issue involved must be ripe for judicial determination (Tolentino vs. The Board of Accountancy, et al., G.R. No. L-3062,
September 28, 1951; Delumen, et al. vs. Republic of the Philippines, 50 O.G., No. 2, pp. 576, 578-579; Edades vs. Edades, et al., G.R. No. L-8964, July 31, 1956). The gravamen of
the appellant's stand being that the petition herein states no sufficient cause of action for declaratory relief, our duty is to assay the factual bases thereof upon the foregoing crucible.

As we look in retrospect at the incidents that generated the present controversy, a number of significant points stand out in bold relief. The appellee (Caltex), as a business
enterprise of some consequence, concededly has the unquestioned right to exploit every legitimate means, and to avail of all appropriate media to advertise and stimulate increased
patronage for its products. In contrast, the appellant, as the authority charged with the enforcement of the Postal Law, admittedly has the power and the duty to suppress
transgressions thereof — particularly thru the issuance of fraud orders, under Sections 1982 and 1983 of the Revised Administrative Code, against legally non-mailable schemes.
Obviously pursuing its right aforesaid, the appellee laid out plans for the sales promotion scheme hereinbefore detailed. To forestall possible difficulties in the dissemination of
information thereon thru the mails, amongst other media, it was found expedient to request the appellant for an advance clearance therefor. However, likewise by virtue of his
jurisdiction in the premises and construing the pertinent provisions of the Postal Law, the appellant saw a violation thereof in the proposed scheme and accordingly declined the
request. A point of difference as to the correct construction to be given to the applicable statute was thus reached. Communications in which the parties expounded on their
respective theories were exchanged. The confidence with which the appellee insisted upon its position was matched only by the obstinacy with which the appellant stood his ground.
And this impasse was climaxed by the appellant's open warning to the appellee that if the proposed contest was "conducted, a fraud order will have to be issued against it and all its
representatives."

Against this backdrop, the stage was indeed set for the remedy prayed for. The appellee's insistent assertion of its claim to the use of the mails for its proposed contest, and the
challenge thereto and consequent denial by the appellant of the privilege demanded, undoubtedly spawned a live controversy. The justiciability of the dispute cannot be gainsaid.
There is an active antagonistic assertion of a legal right on one side and a denial thereof on the other, concerning a real — not a mere theoretical — question or issue. The
contenders are as real as their interests are substantial. To the appellee, the uncertainty occasioned by the divergence of views on the issue of construction hampers or disturbs its
freedom to enhance its business. To the appellant, the suppression of the appellee's proposed contest believed to transgress a law he has sworn to uphold and enforce is an
unavoidable duty. With the appellee's bent to hold the contest and the appellant's threat to issue a fraud order therefor if carried out, the contenders are confronted by the ominous
shadow of an imminent and inevitable litigation unless their differences are settled and stabilized by a tranquilizing declaration (Pablo y Sen, et al. vs. Republic of the Philippines,
G.R. No. L-6868, April 30, 1955). And, contrary to the insinuation of the appellant, the time is long past when it can rightly be said that merely the appellee's "desires are thwarted by
its own doubts, or by the fears of others" — which admittedly does not confer a cause of action. Doubt, if any there was, has ripened into a justiciable controversy when, as in the
case at bar, it was translated into a positive claim of right which is actually contested (III Moran, Comments on the Rules of Court, 1963 ed., pp. 132-133, citing: Woodward vs. Fox
West Coast Theaters, 36 Ariz., 251, 284 Pac. 350).

We cannot hospitably entertain the appellant's pretense that there is here no question of construction because the said appellant "simply applied the clear provisions of the law to a
given set of facts as embodied in the rules of the contest", hence, there is no room for declaratory relief. The infirmity of this pose lies in the fact that it proceeds from the assumption
that, if the circumstances here presented, the construction of the legal provisions can be divorced from the matter of their application to the appellee's contest. This is not feasible.
Construction, verily, is the art or process of discovering and expounding the meaning and intention of the authors of the law with respect to its application to a given case, where that
intention is rendered doubtful, amongst others, by reason of the fact that the given case is not explicitly provided for in the law (Black, Interpretation of Laws, p. 1). This is precisely
the case here. Whether or not the scheme proposed by the appellee is within the coverage of the prohibitive provisions of the Postal Law inescapably requires an inquiry into the
intended meaning of the words used therein. To our mind, this is as much a question of construction or interpretation as any other.
Nor is it accurate to say, as the appellant intimates, that a pronouncement on the matter at hand can amount to nothing more than an advisory opinion the handing down of which is
anathema to a declaratory relief action. Of course, no breach of the Postal Law has as yet been committed. Yet, the disagreement over the construction thereof is no longer
nebulous or contingent. It has taken a fixed and final shape, presenting clearly defined legal issues susceptible of immediate resolution. With the battle lines drawn, in a manner of
speaking, the propriety — nay, the necessity — of setting the dispute at rest before it accumulates the asperity distemper, animosity, passion and violence of a full-blown battle
which looms ahead (III Moran, Comments on the Rules of Court, 1963 ed., p. 132 and cases cited), cannot but be conceded. Paraphrasing the language in Zeitlin vs. Arnebergh 59
Cal., 2d., 901, 31 Cal. Rptr., 800, 383 P. 2d., 152, cited in 22 Am. Jur., 2d., p. 869, to deny declaratory relief to the appellee in the situation into which it has been cast, would be to
force it to choose between undesirable alternatives. If it cannot obtain a final and definitive pronouncement as to whether the anti-lottery provisions of the Postal Law apply to its
proposed contest, it would be faced with these choices: If it launches the contest and uses the mails for purposes thereof, it not only incurs the risk, but is also actually threatened
with the certain imposition, of a fraud order with its concomitant stigma which may attach even if the appellee will eventually be vindicated; if it abandons the contest, it becomes a
self-appointed censor, or permits the appellant to put into effect a virtual fiat of previous censorship which is constitutionally unwarranted. As we weigh these considerations in one
equation and in the spirit of liberality with which the Rules of Court are to be interpreted in order to promote their object (section 1, Rule 1, Revised Rules of Court) — which, in the
instant case, is to settle, and afford relief from uncertainty and insecurity with respect to, rights and duties under a law — we can see in the present case any imposition upon our
jurisdiction or any futility or prematurity in our intervention.

The appellant, we apprehend, underrates the force and binding effect of the ruling we hand down in this case if he believes that it will not have the final and pacifying function that a
declaratory judgment is calculated to subserve. At the very least, the appellant will be bound. But more than this, he obviously overlooks that in this jurisdiction, "Judicial decisions
applying or interpreting the law shall form a part of the legal system" (Article 8, Civil Code of the Philippines). In effect, judicial decisions assume the same authority as the statute
itself and, until authoritatively abandoned, necessarily become, to the extent that they are applicable, the criteria which must control the actuations not only of those called upon to
abide thereby but also of those in duty bound to enforce obedience thereto. Accordingly, we entertain no misgivings that our resolution of this case will terminate the controversy at
hand.

It is not amiss to point out at this juncture that the conclusion we have herein just reached is not without precedent. In Liberty Calendar Co. vs. Cohen, 19 N.J., 399, 117 A. 2d., 487,
where a corporation engaged in promotional advertising was advised by the county prosecutor that its proposed sales promotion plan had the characteristics of a lottery, and that if
such sales promotion were conducted, the corporation would be subject to criminal prosecution, it was held that the corporation was entitled to maintain a declaratory relief action
against the county prosecutor to determine the legality of its sales promotion plan. In pari materia, see also: Bunis vs. Conway, 17 App. Div. 2d., 207, 234 N.Y.S. 2d., 435; Zeitlin vs.
Arnebergh, supra; Thrillo, Inc. vs. Scott, 15 N.J. Super. 124, 82 A. 2d., 903.

In fine, we hold that the appellee has made out a case for declaratory relief.

2. The Postal Law, chapter 52 of the Revised Administrative Code, using almost identical terminology in sections 1954(a), 1982 and 1983 thereof, supra, condemns as absolutely
non-mailable, and empowers the Postmaster General to issue fraud orders against, or otherwise deny the use of the facilities of the postal service to, any information concerning
"any lottery, gift enterprise, or scheme for the distribution of money, or of any real or personal property by lot, chance, or drawing of any kind". Upon these words hinges the
resolution of the second issue posed in this appeal.

Happily, this is not an altogether untrodden judicial path. As early as in 1922, in "El Debate", Inc. vs. Topacio, 44 Phil., 278, 283-284, which significantly dwelt on the power of the
postal authorities under the abovementioned provisions of the Postal Law, this Court declared that —

While countless definitions of lottery have been attempted, the authoritative one for this jurisdiction is that of the United States Supreme Court, in analogous cases having to do with
the power of the United States Postmaster General, viz.: The term "lottery" extends to all schemes for the distribution of prizes by chance, such as policy playing, gift exhibitions,
prize concerts, raffles at fairs, etc., and various forms of gambling. The three essential elements of a lottery are: First, consideration; second, prize; and third, chance. (Horner vs.
States [1892], 147 U.S. 449; Public Clearing House vs. Coyne [1903], 194 U.S., 497; U.S. vs. Filart and Singson [1915], 30 Phil., 80; U.S. vs. Olsen and Marker [1917], 36 Phil., 395;
U.S. vs. Baguio [1919], 39 Phil., 962; Valhalla Hotel Construction Company vs. Carmona, p. 233, ante.)

Unanimity there is in all quarters, and we agree, that the elements of prize and chance are too obvious in the disputed scheme to be the subject of contention. Consequently as the
appellant himself concedes, the field of inquiry is narrowed down to the existence of the element of consideration therein. Respecting this matter, our task is considerably lightened
inasmuch as in the same case just cited, this Court has laid down a definitive yard-stick in the following terms —

In respect to the last element of consideration, the law does not condemn the gratuitous distribution of property by chance, if no consideration is derived directly or indirectly from the
party receiving the chance, but does condemn as criminal schemes in which a valuable consideration of some kind is paid directly or indirectly for the chance to draw a prize.

Reverting to the rules of the proposed contest, we are struck by the clarity of the language in which the invitation to participate therein is couched. Thus —

No puzzles, no rhymes? You don't need wrappers, labels or boxtops? You don't have to buy anything? Simply estimate the actual number of liter the Caltex gas pump with the hood
at your favorite Caltex dealer will dispense from — to —, and win valuable prizes . . . ." .

Nowhere in the said rules is any requirement that any fee be paid, any merchandise be bought, any service be rendered, or any value whatsoever be given for the privilege to
participate. A prospective contestant has but to go to a Caltex station, request for the entry form which is available on demand, and accomplish and submit the same for the drawing
of the winner. Viewed from all angles or turned inside out, the contest fails to exhibit any discernible consideration which would brand it as a lottery. Indeed, even as we head the
stern injunction, "look beyond the fair exterior, to the substance, in order to unmask the real element and pernicious tendencies which the law is seeking to prevent" ("El Debate", Inc.
vs. Topacio, supra, p. 291), we find none. In our appraisal, the scheme does not only appear to be, but actually is, a gratuitous distribution of property by chance.

There is no point to the appellant's insistence that non-Caltex customers who may buy Caltex products simply to win a prize would actually be indirectly paying a consideration for
the privilege to join the contest. Perhaps this would be tenable if the purchase of any Caltex product or the use of any Caltex service were a pre-requisite to participation. But it is not.
A contestant, it hardly needs reiterating, does not have to buy anything or to give anything of value.1awphîl.nèt

Off-tangent, too, is the suggestion that the scheme, being admittedly for sales promotion, would naturally benefit the sponsor in the way of increased patronage by those who will be
encouraged to prefer Caltex products "if only to get the chance to draw a prize by securing entry blanks". The required element of consideration does not consist of the benefit
derived by the proponent of the contest. The true test, as laid down in People vs. Cardas, 28 P. 2d., 99, 137 Cal. App. (Supp.) 788, is whether the participant pays a valuable
consideration for the chance, and not whether those conducting the enterprise receive something of value in return for the distribution of the prize. Perspective properly oriented, the
standpoint of the contestant is all that matters, not that of the sponsor. The following, culled from Corpus Juris Secundum, should set the matter at rest:

The fact that the holder of the drawing expects thereby to receive, or in fact does receive, some benefit in the way of patronage or otherwise, as a result of the drawing; does not
supply the element of consideration. Griffith Amusement Co. vs. Morgan, Tex. Civ. App., 98 S.W., 2d., 844" (54 C.J.S., p. 849).

Thus enlightened, we join the trial court in declaring that the "Caltex Hooded Pump Contest" proposed by the appellee is not a lottery that may be administratively and adversely
dealt with under the Postal Law.
But it may be asked: Is it not at least a "gift enterprise, or scheme for the distribution of money, or of any real or personal property by lot, chance, or drawing of any kind", which is
equally prescribed? Incidentally, while the appellant's brief appears to have concentrated on the issue of consideration, this aspect of the case cannot be avoided if the remedy here
invoked is to achieve its tranquilizing effect as an instrument of both curative and preventive justice. Recalling that the appellant's action was predicated, amongst other bases, upon
Opinion 217, Series 1953, of the Secretary of Justice, which opined in effect that a scheme, though not a lottery for want of consideration, may nevertheless be a gift enterprise in
which that element is not essential, the determination of whether or not the proposed contest — wanting in consideration as we have found it to be — is a prohibited gift enterprise,
cannot be passed over sub silencio.

While an all-embracing concept of the term "gift enterprise" is yet to be spelled out in explicit words, there appears to be a consensus among lexicographers and standard authorities
that the term is commonly applied to a sporting artifice of under which goods are sold for their market value but by way of inducement each purchaser is given a chance to win a
prize (54 C.J.S., 850; 34 Am. Jur., 654; Black, Law Dictionary, 4th ed., p. 817; Ballantine, Law Dictionary with Pronunciations, 2nd ed., p. 55; Retail Section of Chamber of
Commerce of Plattsmouth vs. Kieck, 257 N.W., 493, 128 Neb. 13; Barker vs. State, 193 S.E., 605, 56 Ga. App., 705; Bell vs. State, 37 Tenn. 507, 509, 5 Sneed, 507, 509). As thus
conceived, the term clearly cannot embrace the scheme at bar. As already noted, there is no sale of anything to which the chance offered is attached as an inducement to the
purchaser. The contest is open to all qualified contestants irrespective of whether or not they buy the appellee's products.

Going a step farther, however, and assuming that the appellee's contest can be encompassed within the broadest sweep that the term "gift enterprise" is capable of being extended,
we think that the appellant's pose will gain no added comfort. As stated in the opinion relied upon, rulings there are indeed holding that a gift enterprise involving an award by chance,
even in default of the element of consideration necessary to constitute a lottery, is prohibited (E.g.: Crimes vs. States, 235 Ala 192, 178 So. 73; Russell vs. Equitable Loan & Sec.
Co., 129 Ga. 154, 58 S.E., 88; State ex rel. Stafford vs. Fox-Great Falls Theater Corporation, 132 P. 2d., 689, 694, 698, 114 Mont. 52). But this is only one side of the coin. Equally
impressive authorities declare that, like a lottery, a gift enterprise comes within the prohibitive statutes only if it exhibits the tripartite elements of prize, chance and consideration
(E.g.: Bills vs. People, 157 P. 2d., 139, 142, 113 Colo., 326; D'Orio vs. Jacobs, 275 P. 563, 565, 151 Wash., 297; People vs. Psallis, 12 N.Y.S., 2d., 796; City and County of Denver
vs. Frueauff, 88 P., 389, 394, 39 Colo., 20, 7 L.R.A., N.S., 1131, 12 Ann. Cas., 521; 54 C.J.S., 851, citing: Barker vs. State, 193 S.E., 605, 607, 56 Ga. App., 705; 18 Words and
Phrases, perm. ed., pp. 590-594). The apparent conflict of opinions is explained by the fact that the specific statutory provisions relied upon are not identical. In some cases, as
pointed out in 54 C.J.S., 851, the terms "lottery" and "gift enterprise" are used interchangeably (Bills vs. People, supra); in others, the necessity for the element of consideration or
chance has been specifically eliminated by statute. (54 C.J.S., 351-352, citing Barker vs. State, supra; State ex rel. Stafford vs. Fox-Great Falls Theater Corporation, supra). The
lesson that we derive from this state of the pertinent jurisprudence is, therefore, that every case must be resolved upon the particular phraseology of the applicable statutory
provision.

Taking this cue, we note that in the Postal Law, the term in question is used in association with the word "lottery". With the meaning of lottery settled, and consonant to the
well-known principle of legal hermeneutics noscitur a sociis — which Opinion 217 aforesaid also relied upon although only insofar as the element of chance is concerned — it is only
logical that the term under a construction should be accorded no other meaning than that which is consistent with the nature of the word associated therewith. Hence, if lottery is
prohibited only if it involves a consideration, so also must the term "gift enterprise" be so construed. Significantly, there is not in the law the slightest indicium of any intent to
eliminate that element of consideration from the "gift enterprise" therein included.

This conclusion firms up in the light of the mischief sought to be remedied by the law, resort to the determination thereof being an accepted extrinsic aid in statutory construction.
Mail fraud orders, it is axiomatic, are designed to prevent the use of the mails as a medium for disseminating printed matters which on grounds of public policy are declared
non-mailable. As applied to lotteries, gift enterprises and similar schemes, justification lies in the recognized necessity to suppress their tendency to inflame the gambling spirit and
to corrupt public morals (Com. vs. Lund, 15 A. 2d., 839, 143 Pa. Super. 208). Since in gambling it is inherent that something of value be hazarded for a chance to gain a larger
amount, it follows ineluctably that where no consideration is paid by the contestant to participate, the reason behind the law can hardly be said to obtain. If, as it has been held —
Gratuitous distribution of property by lot or chance does not constitute "lottery", if it is not resorted to as a device to evade the law and no consideration is derived, directly or
indirectly, from the party receiving the chance, gambling spirit not being cultivated or stimulated thereby. City of Roswell vs. Jones, 67 P. 2d., 286, 41 N.M., 258." (25 Words and
Phrases, perm. ed., p. 695, emphasis supplied).

we find no obstacle in saying the same respecting a gift enterprise. In the end, we are persuaded to hold that, under the prohibitive provisions of the Postal Law which we have
heretofore examined, gift enterprises and similar schemes therein contemplated are condemnable only if, like lotteries, they involve the element of consideration. Finding none in the
contest here in question, we rule that the appellee may not be denied the use of the mails for purposes thereof.

Recapitulating, we hold that the petition herein states a sufficient cause of action for declaratory relief, and that the "Caltex Hooded Pump Contest" as described in the rules
submitted by the appellee does not transgress the provisions of the Postal Law.

ACCORDINGLY, the judgment appealed from is affirmed. No costs.

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.
A

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.

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 Decision 1 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, 7Justice 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.

G.R. No. L-50999 March 23, 1990

JOSE SONGCO, ROMEO CIPRES, and AMANCIO MANUEL, petitioners,


vs
NATIONAL LABOR RELATIONS COMMISSION (FIRST DIVISION), LABOR ARBITER FLAVIO AGUAS, and F.E. ZUELLIG (M), INC., respondents.

Raul E. Espinosa for petitioners.

Lucas Emmanuel B. Canilao for petitioner A. Manuel.

Atienza, Tabora, Del Rosario & Castillo for private respondent.


MEDIALDEA, J.:

This is a petition for certiorari seeking to modify the decision of the National Labor Relations Commission in NLRC Case No. RB-IV-20840-78-T entitled, "Jose Songco and Romeo
Cipres, Complainants-Appellants, v. F.E. Zuellig (M), Inc., Respondent-Appellee" and NLRC Case No. RN- IV-20855-78-T entitled, "Amancio Manuel, Complainant-Appellant, v. F.E.
Zuellig (M), Inc., Respondent-Appellee," which dismissed the appeal of petitioners herein and in effect affirmed the decision of the Labor Arbiter ordering private respondent to pay
petitioners separation pay equivalent to their one month salary (exclusive of commissions, allowances, etc.) for every year of service.

The antecedent facts are as follows:

Private respondent F.E. Zuellig (M), Inc., (hereinafter referred to as Zuellig) filed with the Department of Labor (Regional Office No. 4) an application seeking clearance to terminate
the services of petitioners Jose Songco, Romeo Cipres, and Amancio Manuel (hereinafter referred to as petitioners) allegedly on the ground of retrenchment due to financial losses.
This application was seasonably opposed by petitioners alleging that the company is not suffering from any losses. They alleged further that they are being dismissed because of
their membership in the union. At the last hearing of the case, however, petitioners manifested that they are no longer contesting their dismissal. The parties then agreed that the
sole issue to be resolved is the basis of the separation pay due to petitioners. Petitioners, who were in the sales force of Zuellig received monthly salaries of at least P40,000. In
addition, they received commissions for every sale they made.

The collective Bargaining Agreement entered into between Zuellig and F.E. Zuellig Employees Association, of which petitioners are members, contains the following provision (p.
71, Rollo):

ARTICLE XIV — Retirement Gratuity

Section l(a)-Any employee, who is separated from employment due to old age, sickness, death or permanent lay-off not due to the fault of said employee shall receive from the
company a retirement gratuity in an amount equivalent to one (1) month's salary per year of service. One month of salary as used in this paragraph shall be deemed equivalent to
the salary at date of retirement; years of service shall be deemed equivalent to total service credits, a fraction of at least six months being considered one year, including
probationary employment. (Emphasis supplied)

On the other hand, Article 284 of the Labor Code then prevailing provides:

Art. 284. Reduction of personnel. — The termination of employment of any employee due to the installation of labor saving-devices, redundancy, retrenchment to prevent losses,
and other similar causes, shall entitle the employee affected thereby to separation pay. In case of termination due to the installation of labor-saving devices or redundancy, the
separation pay shall be equivalent to one (1) month pay or to at least one (1) month pay for every year of service, whichever is higher. In case of retrenchment to prevent losses and
other similar causes, the separation pay shall be equivalent to one (1) month pay or at least one-half (1/2) month pay for every year of service, whichever is higher. A fraction of at
least six (6) months shall be considered one (1) whole year. (Emphasis supplied)

In addition, Sections 9(b) and 10, Rule 1, Book VI of the Rules Implementing the Labor Code provide:

xxx
Sec. 9(b). Where the termination of employment is due to retrechment initiated by the employer to prevent losses or other similar causes, or where the employee suffers from a
disease and his continued employment is prohibited by law or is prejudicial to his health or to the health of his co-employees, the employee shall be entitled to termination pay
equivalent at least to his one month salary, or to one-half month pay for every year of service, whichever is higher, a fraction of at least six (6) months being considered as one whole
year.

xxx

Sec. 10. Basis of termination pay. — The computation of the termination pay of an employee as provided herein shall be based on his latest salary rate, unless the same was
reduced by the employer to defeat the intention of the Code, in which case the basis of computation shall be the rate before its deduction. (Emphasis supplied)

On June 26,1978, the Labor Arbiter rendered a decision, the dispositive portion of which reads (p. 78, Rollo):

RESPONSIVE TO THE FOREGOING, respondent should be as it is hereby, ordered to pay the complainants separation pay equivalent to their one month salary (exclusive of
commissions, allowances, etc.) for every year of service that they have worked with the company.

SO ORDERED.

The appeal by petitioners to the National Labor Relations Commission was dismissed for lack of merit.

Hence, the present petition.

On June 2, 1980, the Court, acting on the verified "Notice of Voluntary Abandonment and Withdrawal of Petition dated April 7, 1980 filed by petitioner Romeo Cipres, based on the
ground that he wants "to abide by the decision appealed from" since he had "received, to his full and complete satisfaction, his separation pay," resolved to dismiss the petition as to
him.

The issue is whether or not earned sales commissions and allowances should be included in the monthly salary of petitioners for the purpose of computation of their separation pay.

The petition is impressed with merit.

Petitioners' position was that in arriving at the correct and legal amount of separation pay due them, whether under the Labor Code or the CBA, their basic salary, earned sales
commissions and allowances should be added together. They cited Article 97(f) of the Labor Code which includes commission as part on one's salary, to wit;

(f) 'Wage' paid to any employee shall mean the remuneration or earnings, however designated, capable of being expressed in terms of money, whether fixed or ascertained on a
time, task, piece, or commission basis, or other method of calculating the same, which is payable by an employer to an employee under a written or unwritten contract of
employment for work done or to be done, or for services rendered or to be rendered, and includes the fair and reasonable value, as determined by the Secretary of Labor, of board,
lodging, or other facilities customarily furnished by the employer to the employee. 'Fair reasonable value' shall not include any profit to the employer or to any person affiliated with
the employer.
Zuellig argues that if it were really the intention of the Labor Code as well as its implementing rules to include commission in the computation of separation pay, it could have
explicitly said so in clear and unequivocal terms. Furthermore, in the definition of the term "wage", "commission" is used only as one of the features or designations attached to the
word remuneration or earnings.

Insofar as the issue of whether or not allowances should be included in the monthly salary of petitioners for the purpose of computation of their separation pay is concerned, this has
been settled in the case of Santos v. NLRC, et al., G.R. No. 76721, September 21, 1987, 154 SCRA 166, where We ruled that "in the computation of backwages and separation pay,
account must be taken not only of the basic salary of petitioner but also of her transportation and emergency living allowances." This ruling was reiterated in Soriano v. NLRC, et
al., G.R. No. 75510, October 27, 1987, 155 SCRA 124 and recently, in Planters Products, Inc. v. NLRC, et al., G.R. No. 78524, January 20, 1989.

We shall concern ourselves now with the issue of whether or not earned sales commission should be included in the monthly salary of petitioner for the purpose of computation of
their separation pay.

Article 97(f) by itself is explicit that commission is included in the definition of the term "wage". It has been repeatedly declared by the courts that where the law speaks in clear and
categorical language, there is no room for interpretation or construction; there is only room for application (Cebu Portland Cement Co. v. Municipality of Naga, G.R. Nos. 24116-17,
August 22, 1968, 24 SCRA 708; Gonzaga v. Court of Appeals, G.R.No. L-2 7455, June 28,1973, 51 SCRA 381). A plain and unambiguous statute speaks for itself, and any attempt
to make it clearer is vain labor and tends only to obscurity. How ever, it may be argued that if We correlate Article 97(f) with Article XIV of the Collective Bargaining Agreement,
Article 284 of the Labor Code and Sections 9(b) and 10 of the Implementing Rules, there appears to be an ambiguity. In this regard, the Labor Arbiter rationalized his decision in this
manner (pp. 74-76, Rollo):

The definition of 'wage' provided in Article 96 (sic) of the Code can be correctly be (sic) stated as a general definition. It is 'wage ' in its generic sense. A careful perusal of the same
does not show any indication that commission is part of salary. We can say that commission by itself may be considered a wage. This is not something novel for it cannot be
gainsaid that certain types of employees like agents, field personnel and salesmen do not earn any regular daily, weekly or monthly salaries, but rely mainly on commission earned.

Upon the other hand, the provisions of Section 10, Rule 1, Book VI of the implementing rules in conjunction with Articles 273 and 274 (sic) of the Code specifically states that the
basis of the termination pay due to one who is sought to be legally separated from the service is 'his latest salary rates.

x x x.

Even Articles 273 and 274 (sic) invariably use 'monthly pay or monthly salary'.

The above terms found in those Articles and the particular Rules were intentionally used to express the intent of the framers of the law that for purposes of separation pay they mean
to be specifically referring to salary only.

.... Each particular benefit provided in the Code and other Decrees on Labor has its own pecularities and nuances and should be interpreted in that light. Thus, for a specific
provision, a specific meaning is attached to simplify matters that may arise there from. The general guidelines in (sic) the formation of specific rules for particular purpose. Thus, that
what should be controlling in matters concerning termination pay should be the specific provisions of both Book VI of the Code and the Rules. At any rate, settled is the rule that in
matters of conflict between the general provision of law and that of a particular- or specific provision, the latter should prevail.

On its part, the NLRC ruled (p. 110, Rollo):


From the aforequoted provisions of the law and the implementing rules, it could be deduced that wage is used in its generic sense and obviously refers to the basic wage rate to be
ascertained on a time, task, piece or commission basis or other method of calculating the same. It does not, however, mean that commission, allowances or analogous income
necessarily forms part of the employee's salary because to do so would lead to anomalies (sic), if not absurd, construction of the word "salary." For what will prevent the employee
from insisting that emergency living allowance, 13th month pay, overtime, and premium pay, and other fringe benefits should be added to the computation of their separation pay.
This situation, to our mind, is not the real intent of the Code and its rules.

We rule otherwise. The ambiguity between Article 97(f), which defines the term 'wage' and Article XIV of the Collective Bargaining Agreement, Article 284 of the Labor Code and
Sections 9(b) and 10 of the Implementing Rules, which mention the terms "pay" and "salary", is more apparent than real. Broadly, the word "salary" means a recompense or
consideration made to a person for his pains or industry in another man's business. Whether it be derived from "salarium," or more fancifully from "sal," the pay of the Roman soldier,
it carries with it the fundamental idea of compensation for services rendered. Indeed, there is eminent authority for holding that the words "wages" and "salary" are in essence
synonymous (Words and Phrases, Vol. 38 Permanent Edition, p. 44 citing Hopkins vs. Cromwell, 85 N.Y.S. 839,841,89 App. Div. 481; 38 Am. Jur. 496). "Salary," the etymology of
which is the Latin word "salarium," is often used interchangeably with "wage", the etymology of which is the Middle English word "wagen". Both words generally refer to one and the
same meaning, that is, a reward or recompense for services performed. Likewise, "pay" is the synonym of "wages" and "salary" (Black's Law Dictionary, 5th Ed.). Inasmuch as the
words "wages", "pay" and "salary" have the same meaning, and commission is included in the definition of "wage", the logical conclusion, therefore, is, in the computation of the
separation pay of petitioners, their salary base should include also their earned sales commissions.

The aforequoted provisions are not the only consideration for deciding the petition in favor of the petitioners.

We agree with the Solicitor General that granting, in gratia argumenti, that the commissions were in the form of incentives or encouragement, so that the petitioners would be
inspired to put a little more industry on the jobs particularly assigned to them, still these commissions are direct remuneration services rendered which contributed to the increase of
income of Zuellig . Commission is the recompense, compensation or reward of an agent, salesman, executor, trustees, receiver, factor, broker or bailee, when the same is
calculated as a percentage on the amount of his transactions or on the profit to the principal (Black's Law Dictionary, 5th Ed., citing Weiner v. Swales, 217 Md. 123, 141 A.2d 749,
750). The nature of the work of a salesman and the reason for such type of remuneration for services rendered demonstrate clearly that commission are part of petitioners' wage or
salary. We take judicial notice of the fact that some salesmen do not receive any basic salary but depend on commissions and allowances or commissions alone, are part of
petitioners' wage or salary. We take judicial notice of the fact that some salesman do not received any basic salary but depend on commissions and allowances or commissions
alone, although an employer-employee relationship exists. Bearing in mind the preceeding dicussions, if we adopt the opposite view that commissions, do not form part of wage or
salary, then, in effect, We will be saying that this kind of salesmen do not receive any salary and therefore, not entitled to separation pay in the event of discharge from employment.
Will this not be absurd? This narrow interpretation is not in accord with the liberal spirit of our labor laws and considering the purpose of separation pay which is, to alleviate the
difficulties which confront a dismissed employee thrown the the streets to face the harsh necessities of life.

Additionally, in Soriano v. NLRC, et al., supra, in resolving the issue of the salary base that should be used in computing the separation pay, We held that:

The commissions also claimed by petitioner ('override commission' plus 'net deposit incentive') are not properly includible in such base figure since such commissions must be
earned by actual market transactions attributable to petitioner.

Applying this by analogy, since the commissions in the present case were earned by actual market transactions attributable to petitioners, these should be included in their
separation pay. In the computation thereof, what should be taken into account is the average commissions earned during their last year of employment.
The final consideration is, in carrying out and interpreting the Labor Code's provisions and its implementing regulations, the workingman's welfare should be the primordial and
paramount consideration. This kind of interpretation gives meaning and substance to the liberal and compassionate spirit of the law as provided for in Article 4 of the Labor Code
which states that "all doubts in the implementation and interpretation of the provisions of the Labor Code including its implementing rules and regulations shall be resolved in favor of
labor" (Abella v. NLRC, G.R. No. 71812, July 30,1987,152 SCRA 140; Manila Electric Company v. NLRC, et al., G.R. No. 78763, July 12,1989), and Article 1702 of the Civil Code
which 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.

ACCORDINGLY, the petition is hereby GRANTED. The decision of the respondent National Labor Relations Commission is MODIFIED by including allowances and commissions in
the separation pay of petitioners Jose Songco and Amancio Manuel. The case is remanded to the Labor Arbiter for the proper computation of said separation pay.

SO ORDERED.

G.R. No. 189600 June 29, 2010

MILAGROS E. AMORES, Petitioner,


vs.
HOUSE OF REPRESENTATIVES ELECTORAL TRIBUNAL and EMMANUEL JOEL J. VILLANUEVA,Respondents.

DECISION

CARPIO MORALES, J.:

Via this petition for certiorari, Milagros E. Amores (petitioner) challenges the Decision of May 14, 2009 and Resolution No. 09-130 of August 6, 2009 of the House of Representatives
Electoral Tribunal (public respondent), which respectively dismissed petitioner’s Petition for Quo Warranto questioning the legality of the assumption of office of Emmanuel Joel J.
Villanueva (private respondent) as representative of the party-list organization Citizens’ Battle Against Corruption (CIBAC) in the House of Representatives, and denied petitioner’s
Motion for Reconsideration.

In her Petition for Quo Warranto1 seeking the ouster of private respondent, petitioner alleged that, among other things, private respondent assumed office without a formal
proclamation issued by the Commission on Elections (COMELEC); he was disqualified to be a nominee of the youth sector of CIBAC since, at the time of the filing of his certificates
of nomination and acceptance, he was already 31 years old or beyond the age limit of 30 pursuant to Section 9 of Republic Act (RA) No. 7941, otherwise known as the Party-List
System Act; and his change of affiliation from CIBAC’s youth sector to its overseas Filipino workers and their families sector was not effected at least six months prior to the May 14,
2007 elections so as to be qualified to represent the new sector under Section 15 of RA No. 7941.

Not having filed his Answer despite due notice, private respondent was deemed to have entered a general denial pursuant to public respondent’s Rules.2

As earlier reflected, public respondent, by Decision of May 14, 2009, 3 dismissed petitioner’s Petition for Quo Warranto, finding that CIBAC was among the party-list organizations
which the COMELEC had partially proclaimed as entitled to at least one seat in the House of Representatives through National Board of Canvassers (NBC) Resolution No. 07-60
dated July 9, 2007. It also found the petition which was filed on October 17, 2007 to be out of time, the reglementary period being 10 days from private respondent’s proclamation.
Respecting the age qualification for youth sectoral nominees under Section 9 of RA No. 7941, public respondent held that it applied only to those nominated as such during the first
three congressional terms after the ratification of the Constitution or until 1998, unless a sectoral party is thereafter registered exclusively as representing the youth sector, which
CIBAC, a multi-sectoral organization, is not.

In the matter of private respondent’s shift of affiliation from CIBAC’s youth sector to its overseas Filipino workers and their families sector, public respondent held that Section 15 of
RA No. 7941 did not apply as there was no resultant change in party-list affiliation.

Her Motion for Reconsideration having been denied by Resolution No. 09-130 dated August 6, 2009,4 petitioner filed the present Petition for Certiorari.5

Petitioner contends that, among other things, public respondent created distinctions in the application of Sections 9 and 15 of RA No. 7941 that are not found in the subject
provisions, fostering interpretations at war with equal protection of the laws; and NBC Resolution No. 07-60, which was a partial proclamation of winning party-list organizations, was
not enough basis for private respondent to assume office on July 10, 2007, especially considering that he admitted receiving his own Certificate of Proclamation only on December
13, 2007.

In his Comment,6 private respondent avers in the main that petitioner has not substantiated her claims of grave abuse of discretion against public respondent; and that he became a
member of the overseas Filipinos and their families sector years before the 2007 elections.

It bears noting that the term of office of party-list representatives elected in the May, 2007 elections will expire on June 30, 2010. While the petition has, thus, become moot and
academic, rendering of a decision on the merits in this case would still be of practical value. 7

The Court adopts the issues framed by public respondent, to wit: (1) whether petitioner’s Petition for Quo Warranto was dismissible for having been filed unseasonably; and (2)
whether Sections 9 and 15 of RA No. 7941 apply to private respondent.

On the first issue, the Court finds that public respondent committed grave abuse of discretion in considering petitioner’s Petition for Quo Warranto filed out of time. Its counting of the
10-day reglementary period provided in its Rules8 from the issuance of NBC Resolution No. 07-60 on July 9, 2007 is erroneous.

To be sure, while NBC Resolution No. 07-60 partially proclaimed CIBAC as a winner in the May, 2007 elections, along with other party-list organizations,9 it was by no measure a
proclamation of private respondent himself as required by Section 13 of RA No. 7941.

Section 13. How Party-List Representatives are Chosen. Party-list representatives shall be proclaimed by the COMELEC based on the list of names submitted by the respective
parties, organizations, or coalitions to the COMELEC according to their ranking in said list.

AT ALL EVENTS, this Court set aside NBC Resolution No. 07-60 in Barangay Association for National Advancement and Transparency v. COMELEC 10 after revisiting the formula
for allocation of additional seats to party-list organizations.

Considering, however, that the records do not disclose the exact date of private respondent’s proclamation, the Court overlooks the technicality of timeliness and rules on the merits.
Alternatively, since petitioner’s challenge goes into private respondent’s qualifications, it may be filed at anytime during his term.
Qualifications for public office are continuing requirements and must be possessed not only at the time of appointment or election or assumption of office but during the officer's
entire tenure. Once any of the required qualifications is lost, his title may be seasonably challenged. 11

On the second and more substantial issue, the Court shall first discuss the age requirement for youth sector nominees under Section 9 of RA No. 7941 reading:

Section 9. Qualifications of Party-List Nominees. No person shall be nominated as party-list representative unless he is a natural-born citizen of the Philippines, a registered voter, a
resident of the Philippines for a period of not less than one (1)year immediately preceding the day of the election, able to read and write, a bona fide member of the party or
organization which he seeks to represent for at least ninety (90) days preceding the day of the election, and is at least twenty-five (25) years of age on the day of the election.

In case of a nominee of the youth sector, he must at least be twenty-five (25) but not more than thirty (30) years of age on the day of the election. Any youth sectoral representative
who attains the age of thirty (30) during his term shall be allowed to continue in office until the expiration of his term. (Emphasis and underscoring supplied.)

The Court finds no textual support for public respondent’s interpretation that Section 9 applied only to those nominated during the first three congressional terms after the ratification
of the Constitution or until 1998, unless a sectoral party is thereafter registered exclusively as representing the youth sector.

A cardinal rule in statutory construction is that when the law is clear and free from any doubt or ambiguity, there is no room for construction or interpretation. There is only room for
application.12

As the law states in unequivocal terms that a nominee of the youth sector must at least be twenty-five (25) but not more than thirty (30) years of age on the day of the election, so it
must be that a candidate who is more than 30 on election day is not qualified to be a youth sector nominee. Since this mandate is contained in RA No. 7941, the Party-List System
Act, it covers ALL youth sector nominees vying for party-list representative seats.

As petitioner points out, RA No. 7941 was enacted only in March, 1995. There is thus no reason to apply Section 9 thereof only to youth sector nominees nominated during the first
three congressional terms after the ratification of the Constitution in 1987. Under this interpretation, the last elections where Section 9 applied were held in May, 1995 or two months
after the law was enacted. This is certainly not sound legislative intent, and could not have been the objective of RA No. 7941.

There is likewise no rhyme or reason in public respondent’s ratiocination that after the third congressional term from the ratification of the Constitution, which expired in 1998,
Section 9 of RA No. 7941 would apply only to sectoral parties registered exclusively as representing the youth sector. This distinction is nowhere found in the law. Ubi lex non
distinguit nec nos distinguire debemus. When the law does not distinguish, we must not distinguish. 13

Respecting Section 15 of RA No. 7941, the Court fails to find even an iota of textual support for public respondent’s ratiocination that the provision did not apply to private
respondent’s shift of affiliation from CIBAC’s youth sector to its overseas Filipino workers and their families sector as there was no resultant change in party-list affiliation. Section 15
reads:

Section 15. Change of Affiliation; Effect. Any elected party-list representative who changes his political party or sectoral affiliation during his term of office shall forfeit his seat:
Provided, That if he changes his political party orsectoral affiliation within six (6) months before an election, he shall not be eligible for nomination as party-list representative under
his new party or organization. (emphasis and underscoring supplied.)
What is clear is that the wording of Section 15 covers changes in both political party and sectoral affiliation. And the latter may occur within the same party since multi-sectoral
party-list organizations are qualified to participate in the Philippine party-list system. Hence, a nominee who changes his sectoral affiliation within the same party will only be eligible
for nomination under the new sectoral affiliation if the change has been effected at least six months before the elections. Again, since the statute is clear and free from ambiguity, it
must be given its literal meaning and applied without attempted interpretation. This is the plain meaning rule or verba legis, as expressed in the maxim index animi sermo or speech
is the index of intention.14

It is, therefore, beyond cavil that Sections 9 and 15 of RA No. 7941 apply to private respondent.

The Court finds that private respondent was not qualified to be a nominee of either the youth sector or the overseas Filipino workers and their families sector in the May, 2007
elections.

The records disclose that private respondent was already more than 30 years of age in May, 2007, it being stipulated that he was born in August, 1975. 15 Moreover, he did not
change his sectoral affiliation at least six months before May, 2007, public respondent itself having found that he shifted to CIBAC’s overseas Filipino workers and their families
sector only on March 17, 2007.161avvphi1

That private respondent is the first nominee of CIBAC, whose victory was later upheld, is of no moment. A party-list organization’s ranking of its nominees is a mere indication of
preference, their qualifications according to law are a different matter.

It not being contested, however, that private respondent was eventually proclaimed as a party-list representative of CIBAC and rendered services as such, he is entitled to keep the
compensation and emoluments provided by law for the position until he is properly declared ineligible to hold the same.17

WHEREFORE, the petition is GRANTED. The Decision dated May 14, 2009 and Resolution No. 09-130 dated August 6, 2009 of the House of Representatives Electoral Tribunal
are SET ASIDE. Emmanuel Joel J. Villanueva is declared ineligible to hold office as a member of the House of Representatives representing the party-list organization CIBAC.

SO ORDERED

G.R. No. 74851 December 9, 1999

RIZAL COMMERCIAL BANKING CORPORATION, petitioner,


vs.
INTERMEDIATE APPELLATE COURT AND BF HOMES, INC., respondents.

RESOLUTION

MELO, J.:
On September 14, 1992, the Court passed upon the case at bar and rendered its decision, dismissing the petition of Rizal Commercial Banking Corporation (RCBC), thereby
affirming the decision of the Court of Appeals which canceled the transfer certificate of title issued in favor of RCBC, and reinstating that of respondent BF Homes.

This will now resolve petitioner's motion for reconsideration which, although filed in 1992 was not deemed submitted for resolution until in late 1998. The delay was occasioned by
exchange of pleadings, the submission of supplemental papers, withdrawal and change of lawyers, not to speak of the case having been passed from one departing to another
retiring justice. It was not until May 3, 1999, when the case was re-raffled to herein ponente, but the record was given to him only sometime in the late October 1999.

By way of review, the pertinent facts as stated in our decision are reproduced herein, to wit:

On September 28, 1984, BF Homes filed a "Petition for Rehabilitation and for Declaration of Suspension of Payments" (SEC Case No. 002693) with the Securities and Exchange
Commission (SEC).

One of the creditors listed in its inventory of creditors and liabilities was RCBC.

On October 26, 1984, RCBC requested the Provincial Sheriff of Rizal to extra-judicially foreclose its real estate mortgage on some properties of BF Homes. A notice of extra-judicial
foreclosure sale was issued by the Sheriff on October 29, 1984, scheduled on November 29, 1984, copies furnished both BF Homes (mortgagor) and RCBC (mortgagee).

On motion of BF Homes, the SEC issued on November 28, 1984 in SEC Case No. 002693 a temporary restraining order (TRO), effective for 20 days, enjoining RCBC and the
sheriff from proceeding with the public auction sale. The sale was rescheduled to January 29, 1985.

On January 25, 1985, the SEC ordered the issuance of a writ of preliminary injunction upon petitioner's filing of a bond. However, petitioner did not file a bond until January 29, 1985,
the very day of the auction sale, so no writ of preliminary injunction was issued by the SEC. Presumably, unaware of the filing of the bond, the sheriffs proceeded with the public
auction sale on January 29, 1985, in which RCBC was the highest bidder for the properties auctioned.

On February 5, 1985, BF Homes filed in the SEC a consolidated motion to annul the auction sale and to cite RCBC and the sheriff for contempt. RCBC opposed the motion

Because of the proceedings in the SEC, the sheriff withheld the delivery to RCBC of a certificate of sale covering the auctioned properties.

On February 13, 1985, the SEC in Case No. 002693 belatedly issued a writ of preliminary injunction stopping the auction sale which had been conducted by the sheriff two weeks
earlier.

On March 13, 1985, despite SEC Case No. 002693, RCBC filed with the Regional Trial Court, Br. 140, Rizal (CC 10042) an action for mandamus against the provincial sheriff of
Rizal and his deputy to compel them to execute in its favor a certificate of sale of the auctioned properties.

In answer, the sheriffs alleged that they proceeded with the auction sale on January 29, 1985 because no writ of preliminary injunction had been issued by SEC as of that date, but
they informed the SEC that they would suspend the issuance of a certificate of sale to RCBC.

On March 18, 1985, the SEC appointed a Management Committee for BF Homes.
On RCBC's motion in the mandamus case, the trial court issued on May 8, 1985 a judgment on the pleadings, the dispositive portion of which states:

WHEREFORE, petitioner's Motion for Judgment on the pleadings is granted and judgment is hereby rendered ordering respondents to execute and deliver to petitioner the
Certificate of the Auction Sale of January 29, 1985, involving the properties sold therein, more particularly those described in Annex "C" of their Answer." (p. 87, Rollo.)

On June 4, 1985, B.F. Homes filed an original complaint with the IAC pursuant to Section 9 of B.P. 129 praying for the annulment of the judgment, premised on the following:

. . .: (1) even before RCBC asked the sheriff to extra-judicially foreclose its mortgage on petitioner's properties, the SEC had already assumed exclusive jurisdiction over those
assets, and (2) that there was extrinsic fraud in procuring the judgment because the petitioner was not impleaded as a party in the mandamus case, respondent court did not acquire
jurisdiction over it, and it was deprived of its right to be heard. (CA Decision, p. 88, Rollo).

On April 8, 1986, the IAC rendered a decision, setting aside the decision of the trial court, dismissing the mandamus case and suspending issuance to RCBC of new land titles, "until
the resolution of case by SEC in Case No. 002693," disposing as follows:

WHEREFORE, the judgment dated May 8, 1985 in Civil Case No. 10042 is hereby annulled and set aside and the case is hereby dismissed. In view of the admission of respondent
Rizal Commercial Banking Corporation that the sheriff's certificate of sale has been registered on BF Homes' TCT's . . . (here the TCTs were enumerated) the Register of Deeds for
Pasay City is hereby ordered to suspend the issuance to the mortgagee-purchaser, Rizal Commercial Banking Corporation, of the owner's copies of the new land titles replacing
them until the matter shall have been resolved by the Securities and Exchange Commission in SEC Case No. 002693.

(p. 257-260, Rollo; also pp. 832-834, 213 SCRA 830 [1992]; Emphasis in the original.)

On June 18, 1986, RCBC appealed the decision of the then Intermediate Appellate Court (now, back to its old revered name, the Court of Appeals) to this Court, arguing that:

1. Petitioner did not commit extrinsic fraud in excluding private respondent as party defendant in Special Civil Case No. 10042 as private respondent was not indispensable party
thereto, its participation not being necessary for the full resolution of the issues raised in said case.

2. SEC Case No. 2693 cannot be invoked to suspend Special Civil Case No. 10042, and for that matter, the extra-judicial foreclosure of the real estate mortgage in petitioner's favor,
as these do not constitute actions against private respondent contemplated under Section 6(c) of Presidential Decree No. 902-A.

3. Even assuming arguendo that the extra-judicial sale constitute an action that may be suspended under Section 6(c) of Presidential Decree No. 902-A, the basis for the
suspension thereof did not exist so as to adversely affect the validity and regularity thereof.

4. The Regional Trial court had jurisdiction to take cognizable of Special Civil Case No. 10042.

5. The Regional Trial court had jurisdiction over Special Civil Case No. 10042.

(p. 5, Rollo.)
On November 12, 1986, the Court gave due course to the petition. During the pendency of the case, RCBC brought to the attention of the Court an order issued by the SEC on
October 16, 1986 in Case No. 002693, denying the consolidated Motion to Annul the Auction Sale and to cite RCBC and the Sheriff for Contempt, and ruling as follows:

WHEREFORE, the petitioner's "Consolidated Motion to Cite Sheriff and Rizal Commercial Banking Corporation for Contempt and to Annul Proceedings and Sale," dated February 5,
1985, should be as is, hereby DENIED.

While we cannot direct the Register of Deeds to allow the consolidation of the titles subject of the Omnibus Motion dated September 18, 1986 filed by the Rizal Commercial Banking
Corporation, and therefore, denies said Motion, neither can this Commission restrain the said bank and the Register of Deeds from effecting the said consolidation.

SO ORDERED.

(p. 143, Rollo.)

By virtue of the aforesaid order, the Register of Deeds of Pasay City effected the transfer of title over subject pieces of property to petitioner RCBC, and the issuance of new titles in
its name. Thereafter, RCBC presented a motion for the dismissal of the petition, theorizing that the issuance of said new transfer certificates of title in its name rendered the petition
moot and academic.

In the decision sought to be reconsidered, a greatly divided Court (Justices Gutierrez, Nocon, and Melo concurred with the ponente, Justice Medialdea; Chief Justice Narvasa,
Justices Bidin, Regalado, and Bellosillo concurred only in the result; while Justice Feliciano dissented and was joined by Justice Padilla, then Justice, now Chief Justice Davide, and
Justice Romero; Justices Griño-Aquino and Campos took no part) denied petitioner's motion to dismiss, finding basis for nullifying and setting aside the TCTs in the name of RCBC.
Ruling on the merits, the Court upheld the decision of the Intermediate Appellate Court which dismissed the mandamus case filed by RCBC and suspended the issuance of new
titles to RCBC. Setting aside RCBC's acquisition of title and nullifying the TCTs issued to it, the Court held that:

. . . whenever a distressed corporation asks the SEC for rehabilitation and suspension of payments, preferred creditors may no longer assert such preference, but . . . stand on equal
footing with other creditors. Foreclosure shall be disallowed so as not to prejudice other creditors, or cause discrimination among them. If foreclosure is undertaken despite the fact
that a petition, for rehabilitation has been filed, the certificate of sale shall not be delivered pending rehabilitation. Likewise, if this has also been done, no transfer of title shall be
effected also, within the period of rehabilitation. The rationale behind PD 902-A, as amended to effect a feasible and viable rehabilitation. This cannot be achieved if one creditor is
preferred over the others.

In this connection, the prohibition against foreclosure attaches as soon as a petition for rehabilitation is filed. Were it otherwise, what is to prevent the petitioner from delaying the
creation of a Management Committee and in the meantime dissipate all its assets. The sooner the SEC takes over and imposes a freeze on all the assets, the better for all
concerned.

(pp. 265-266, Rollo; also p. 838, 213 SCRA 830 [1992].)

Then Justice Feliciano (joined by three other Justices), dissented and voted to grant the petition. He opined that the SEC acted prematurely and without jurisdiction or legal authority
in enjoining RCBC and the sheriff from proceeding with the public auction sale. The dissent maintain that Section 6 (c) of Presidential Decree 902-A is clear and unequivocal that,
claims against the corporations, partnerships, or associations shall be suspended only upon the appointment of a management committee, rehabilitation receiver, board or body.
Thus, in the case under consideration, only upon the appointment of the Management Committee for BF Homes on March 18, 1985, should the suspension of actions for claims
against BF Homes have taken effect and not earlier.

In support of its motion for reconsideration, RCBC contends:

The restraining order and the writ of preliminary injunction issued by the Securities and Exchange Commission enjoining the foreclosure sale of the properties of respondent BF
Homes were issued without or in excess of its jurisdiction because it was violative of the clear provision of Presidential Decree No. 902-A, and are therefore null and void; and

Petitioner, being a mortgage creditor, is entitled to rely solely on its security and to refrain from joining the unsecured creditors in SEC Case No. 002693, the petition for rehabilitation
filed by private respondent.

We find the motion for reconsideration meritorious.

The issue of whether or not preferred creditors of distressed corporations stand on equal footing with all other creditors gains relevance and materiality only upon the appointment of
a management committee, rehabilitation receiver, board, or body. Insofar as petitioner RCBC is concerned, the provisions of Presidential Decree No. 902-A are not yet applicable
and it may still be allowed to assert its preferred status because it foreclosed on the mortgage prior to the appointment of the management committee on March 18, 1985. The Court,
therefore, grants the motion for reconsideration on this score.

The law on the matter, Paragraph (c), Section 6 of Presidential Decree 902-A, provides:

Sec. 6. In order to effectively exercise such jurisdiction, the Commission shall posses the following powers:

c) To appoint one or more receivers of the property, real and personal, which is the subject of the action pending before the Commission in accordance with the pertinent provisions
of the Rules of Court in such other cases whenever necessary to preserve the rights of the parties litigants to and/or protect the interest of the investing public and
creditors; Provided, however, that the Commission may, in appropriate cases, appoint a rehabilitation receiver of corporations, partnerships or other associations not supervised or
regulated by other government agencies who shall have, in addition to the powers of a regular receiver under the provisions of the Rules of Court, such functions and powers as are
provided for in the succeeding paragraph (d) hereof: Provided, finally, That upon appointment of a management committee rehabilitation receiver, board or body, pursuant to this
Decree, all actions for claims against corporations, partnerships or associations under management or receivership, pending before any court, tribunal, board or body shall be
suspended accordingly. (As amended by PDs No. 1673, 1758 and by PD No. 1799. Emphasis supplied.)

It is thus adequately clear that suspension of claims against a corporation under rehabilitation is counted or figured up only upon the appointment of a management committee or a
rehabilitation receiver. The holding that suspension of actions for claims against a corporation under rehabilitation takes effect as soon as the application or a petition for
rehabilitation is filed with the SEC — may, to some, be more logical and wise but unfortunately, such is incongruent with the clear language of the law. To insist on such ruling, no
matter how practical and noble, would be to encroach upon legislative prerogative to define the wisdom of the law — plainly judicial legislation.

It bears stressing that the first and fundamental duty of the Court is to apply the law. When the law is clear and free from any doubt or ambiguity, there is no room for construction or
interpretation. As has been our consistent ruling, where the law speaks in clear and categorical language, there is no occasion for interpretation; there is only room for application
(Cebu Portland Cement Co. vs. Municipality of Naga, 24 SCRA-708 [1968]).
Where the law is clear and unambiguous, it must be taken to mean exactly what it says and the court has no choice but to see to it that its mandate is obeyed (Chartered Bank
Employees Association vs. Ople, 138 SCRA 273 [1985]; Luzon Surety Co., Inc. vs. De Garcia, 30 SCRA 111 [1969]; Quijano vs. Development Bank of the Philippines, 35 SCRA 270
[1970]).

Only when the law is ambiguous or of doubtful meaning may the court interpret or construe its true intent. Ambiguity is a condition of admitting two or more meanings, of being
understood in more than one way, or of referring to two or more things at the same time. A statute is ambiguous if it is admissible of two or more possible meanings, in which case,
the Court is called upon to exercise one of its judicial functions, which is to interpret the law according to its true intent.

Furthermore, as relevantly pointed out in the dissenting opinion, a petition for rehabilitation does nor always result in the appointment of a receiver or the creation of a management
committee. The SEC has to initially determine whether such appointment is appropriate and necessary under the circumstances. Under Paragraph (d), Section 6 of Presidential
Decree No. 902-A, certain situations must be shown to exist before a management committee may be created or appointed, such as;

1. when there is imminent danger of dissipation, loss, wastage or destruction of assets or other properties; or

2. when there is paralization of business operations of such corporations or entities which may be prejudicial to the interest of minority stockholders, parties-litigants or to the general
public.

On the other hand, receivers may be appointed whenever:

1. necessary in order to preserve the rights of the parties-litigants; and/or

2. protect the interest of the investing public and creditors. (Section 6 (c), P.D. 902-A.)

These situations are rather serious in nature, requiring the appointment of a management committee or a receiver to preserve the existing assets and property of the corporation in
order to protect the interests of its investors and creditors. Thus, in such situations, suspension of actions for claims against a corporation as provided in Paragraph (c) of Section 6,
of Presidential Decree No. 902-A is necessary, and here we borrow the words of the late Justice Medialdea, "so as not to render the SEC management Committee irrelevant and
inutile and to give it unhampered "rescue efforts" over the distressed firm" (Rollo, p. 265).

Otherwise, when such circumstances are not obtaining or when the SEC finds no such imminent danger of losing the corporate assets, a management committee or rehabilitation
receiver need not be appointed and suspension of actions for claims may not be ordered by the SEC. When the SEC does not deem it necessary to appoint a receiver or to create a
management committee, it may be assumed, that there are sufficient assets to sustain the rehabilitation plan and, that the creditors and investors are amply protected.

Petitioner additionally argues in its motion for reconsideration that, being a mortgage creditor, it is entitled to rely on its security and that it need not join the unsecured creditors in
filing their claims before the SEC appointed receiver. To support its position, petitioner cites the Court's ruling in the case of Philippine Commercial International Bank vs. Court of
Appeals, (172 SCRA 436 [1989]) that an order of suspension of payments as well as actions for claims applies only to claims of unsecured creditors and cannot extend to creditors
holding a mortgage, pledge, or any lien on the property.

Ordinarily, the Court would refrain from discussing additional matters such as that presented in RCBC's second ground, and would rather limit itself only to the relevant issues by
which the controversy may be settled with finality.
In view, however, of the significance of such issue, and the conflicting decisions of this Court on the matter, coupled with the fact that our decision of September 14, 1992, if not
clarified, might mislead the Bench and the Bar, the Court resolved to discuss further.

It may be recalled that in the herein en banc majority opinion (pp. 256-275, Rollo, also published as RCBC vs. IAC, 213 SCRA 830 [1992]), we held that:

. . . whenever a distressed corporation asks the SEC for rehabilitation and suspension of payments, preferred creditors may no longer assert such preference, but . . . stand on equal
footing with other creditors. Foreclosure shall be disallowed so as not to prejudice other creditors, or cause discrimination among them. If foreclosure is undertaken despite the fact
that a petition for rehabilitation has been filed, the certificate of sale shall not be delivered pending rehabilitation. Likewise, if this has also, been done, no transfer of title shall be
effected also, within the period of rehabilitation. The rationale behind PD 902-A, as amended, is to effect a feasible and viable rehabilitation. This cannot be achieved if one creditor
is preferred over the others.

In this connection, the prohibition against foreclosure attaches as soon as a petition for rehabilitation is filed. Were it otherwise, what is to prevent the petitioner from delaying the
creation of a Management Committee and in the meantime dissipate all its assets. The sooner the SEC takes over and imposes a freeze on all the assets, the better for all
concerned.

(pp. 265-266, Rollo; also p. 838, 213 SCRA 830 [1992] Emphasis supplied)

The foregoing majority opinion relied upon BF Homes, Inc. vs. Court of Appeals (190 SCRA 262 [1990] — per Cruz, J.: First Division) where it held that "when a corporation
threatened by bankruptcy is taken over by a receiver, all the creditors should stand on an equal footing. Not anyone of them should be given preference by paying one or some of
them ahead of the others. This is precisely the reason for the suspension of all pending claims against the corporation under receivership. Instead of creditors vexing the courts with
suits against the distressed firm, they are directed to file their claims with the receiver who is a duly appointed officer of the SEC (pp. 269-270; emphasis in the original). This ruling is
a reiteration of Alemar's Sibal & Sons, Inc. vs. Hon. Jesus M. Elbinias (pp. 99-100; 186 SCRA 94 [1991] — per Fernan, C.J.: Third Division).

Taking the lead from Alemar's Sibal & Sons, the Court also applied this same ruling in Araneta vs. Court of Appeals(211 SCRA 390 [1992] — per Nocon, J.: Second Division).

All the foregoing cases departed from the ruling of the Court in the much earlier case of PCIB vs. Court of Appeals(172 SCRA 436 [1989] — per Medialdea, J.: First Division) where
the Court categorically ruled that:

SEC's order for suspension of payments of Philfinance as well as for all actions of claims against Philfinance could only be applied to claims of unsecured creditors. Such order can
not extend to creditors holding a mortgage, pledge or any lien on the property unless they give up the property, security or lien in favor of all the creditors of Philfinance . . .

(p. 440. Emphasis supplied)

Thus, in BPI vs. Court of Appeals (229 SCRA 223 [1994] — per Bellosilio, J.: First Division) the Court explicitly stared that ". . . the doctrine in the PCIB Case has since been
abrogated. In Alemar's Sibal & Sons v. Elbinias, BF Homes, Inc. v. Court of Appeals, Araneta v. Court of Appeals and RCBC v. Court of Appeals, we already ruled that whenever a
distressed corporation asks SEC for rehabilitation and suspension of payments, preferred creditors may no longer assert such preference, but shall stand on equal footing with other
creditors . . ." (pp. 227-228).
It may be stressed, however, that of all the cases cited by Justice Bellosillo in BPI, which abandoned the Court's ruling in PCIB, only the present case satisfies the constitutional
requirement that "no doctrine or principle of law laid down by the court in a decision rendered en banc or in division may be modified or reversed except by the court sitting en banc"
(Sec 4, Article VIII, 1987 Constitution). The rest were division decisions.

It behooves the Court, therefore, to settle the issue in this present resolution once and for all, and for the guidance of the Bench and the Bar, the following rules of thumb shall are
laid down:

1. All claims against corporations, partnerships, or associations that are pending before any court, tribunal, or board, without distinction as to whether or not a creditor is secured or
unsecured, shall be suspended effective upon the appointment of a management committee, rehabilitation receiver, board, or body in accordance which the provisions of
Presidential Decree No. 902-A.

2. Secured creditors retain their preference over unsecured creditors, but enforcement of such preference is equally suspended upon the appointment of a management committee,
rehabilitation receiver, board, or body. In the event that the assets of the corporation, partnership, or association are finally liquidated, however, secured and preferred credits under
the applicable provisions of the Civil Code will definitely have preference over unsecured ones.

In other words, once a management committee, rehabilitation receiver, board or body is appointed pursuant to P.D. 902-A, all actions for claims against a distressed corporation
pending before any court, tribunal, board or body shall be suspended accordingly.

This suspension shall not prejudice or render ineffective the status of a secured creditor as compared totally unsecured creditor P.D. 902-A does not state anything to this effect.
What it merely provides is that all actions for claims against the corporation, partnership or association shall be suspended. This should give the receiver a chance to rehabilitate the
corporation if there should still be a possibility of doing so. (This will be in consonance with Alemar's BF Homes, Araneta, and RCBC insofar as enforcing liens by preferred creditors
are concerned.)

However, in the event that rehabilitation is no longer feasible and claims against the distressed corporation would eventually have to be settled, the secured creditors shall enjoy
preference over the unsecured creditors (still maintaining PCIB ruling), subject only to the provisions of the Civil Code on Concurrence and Preferences of Credit (our ruling in State
Investment House, Inc. vs. Court of Appeals, 277 SCRA 209 [1997]).

The Majority ruling in our 1992 decision that preferred creditors of distressed corporations shall, in a way, stand an equal footing with all other creditors, must be read and
understood in the light of the foregoing rulings. All claims of both a secured or unsecured creditors, without distinction on this score, are suspended once a management committee
is appointed. Secured creditors, in the meantime, shall not be allowed to assert such preference before the Securities and Exchange Commission. It may be stressed, however, that
this shall only take effect upon the appointment of a management committee, rehabilitation receiver, board, or body, as opined in the dissent.

In fine, the Court grants the motion for reconsideration for the cogent reason that suspension of actions for claims commences only from the time a management committee or
receiver is appointed by the SEC. Petitioner RCBC, therefore, could have rightfully, as it did, move for the extrajudicial foreclosure of its mortgage on October 26, 1984 because a
management committee was not appointed by the SEC until March 18, 1985.

WHEREFORE, petitioner's motion for reconsideration is hereby GRANTED. The decision, dated September 14, 1992 is vacated, the decision of Intermediate Appellate Court in
AC-G.R. No. SP-06313 REVERSED and SET ASIDE, and the judgment of the Regional Trial Court National Capital Judicial Region, Branch 140, in Civil Case No. 10042
REINSTATED.
SO ORDERED.

G.R. No. L-23607 May 23, 1967

GO KA TOC SONS and CO., ETC., plaintiff-appellee,


vs.
RICE AND CORN BOARD, defendant-appellant.

Office of the Solicitor General Arturo A. Alafriz, Assistant Solicitor General A. A. Torres, Solicitor C. S. Gaddi and Atty. A. J. Gustilo for defendant-appellant.
Antonio C. Sanchez and Vicente Cabahug for plaintiff appellee.

BENGZON, J.P., J.:

Plaintiff-appellee Go Ka Toc Sons & Co. is a duly registered partnership, not wholly owned by Filipinos, engaged since 1958 in the manufacture, processing and marketing of
vegetable oil extracted from corn, rice, copra, soybean, peanuts, fish, and other vegetable products. 1äwphï1.ñët

On August 2, 1960, Republic Act 3018 was approved, Section 1 of which prohibited, among others, partnerships whose capital was not wholly owned by citizens of the Philippines
from engaging, directly or indirectly, in the rice and/or corn industry. The law was to take effect on January 1, 1951. However, Section 3 (a) allowed such partnerships, upon
registration with the municipal treasurer, to continue business until two years from and after January 1, 1961.

SEC. 3. All such persons, associations, partnerships or corporations that have complied with the requirements provided in Section two hereof, if they so apply, shall be allowed to
continue to engage in their respective lines of activity in the rice and to and/or corn industry only for the purpose of liquidation, as follows:

(a) Those engaged in the retail, wholesale, culture, transporting, handling, distribution or acquisition for the purpose of trade of rice and/or corn and the by-products thereof shall be
allowed to continue to engage therein for a period of two years from the date of effectivity of this Act;

xxx xxx xxx

On November 21, 1960, the newly created Rice and Corn Board 1 issued Resolution No. 10, pursuant to Section 6 of the law, defining the term "by product" used in the law, as
follows:

By-product shall mean the secondary products resulting from the process of husking, grinding, milling, and cleaning of palay and corn, such as, but not limited to "binlid," "darak,"
"tanop," "tiktik," "corn husk," "corn drips," and "corn meals."
And on July 10, 1961, the RICOB issued Gen. Circular No. 1, as amended, which defined the term "capital investment" used in Section 3 of Republic Act 3018 which limits the
maximum amount of capital investments of alien persons and entities engaged in the rice and/or corn industry to the amount stated in their statement made pursuant to Section 2 of
the law.

These two circulars have been duly published and translated into the local dialect pursuant to Section 6 of Republic Act 3018.

Plaintiff-appellee, having been required by agents of RICOB to register in accordance with Section 2 of the law and the latter's resolution, dated January 3, 1961, ruling that
manufacturers and/or dealers of bijon, noodle, corn starch, gawgaw, rice wine, poultry feeds and other by products of rice and corn are covered by the law, filed action in the Court of
First Instance to declare the said law and RICOB Resolution No. 10, Nov. 21, 1960 and Gen. Circular No. 1, July 10, 1961, as inapplicable to it. Pending trial on the merits, the lower
court issued the writ of preliminary injunction prayed for.

To abbreviate the proceedings, the parties entered into a stipulation of facts. Thereupon, the lower court rendered judgment (a) declaring Republic Act 3018 not applicable to
plaintiff's business; (b) declaring null and void RICOB's Resolution No. 10, dated November 21, 1960 and General Circular No. 10, as amended, dated July 10, 1961 in so far as they
were and are being made applicable to plaintiff's business and (c) making and declaring permanent and perpetual the preliminary writ of injunction issued in the case.

Not satisfied with the foregoing ruling, defendant RICOB, through the Solicitor General has taken the instant appeal to raise questions purely of law.

Admittedly, plaintiff-appellee has stopped from engaging in the purchase and sale of rice and/or corn since the lapse of the two-year period from the effectivity of the law. It has
limited its activities to the trade, processing and manufacture of corn and rice oil from raw materials consisting of corn germ proper or embryo ("sungo") and "tahup," as well as from
rice husk it secures from others who mill rice and corn. In the processing and manufacture of coin oil, plaintiff also produces a residue called "corn meal" or "corn meal germ" which it
sells and trades. Are these activities covered by Republic Act 3018?

Section 1 of the law defines "rice and/or corn industry" as including the handling of distribution, either in wholesale or retail, and the acquisition for purpose of trade, of the
by-products of rice and corn.

SECTION 1. No person who is not a citizen of the Philippines, or association, partnership or Corporation, the capital or capital stock of which is now wholly owned by citizens of the
Philippines, shall directly or indirectly engage in the rice and/or corn industry except as provided in Section three of this Act.

As used in this Act, the term rice "and/or corn industry" shall mean and include the culture, milling, warehousing, transporting, exportation, importation, handling the distribution,
either in wholesale or retail, the provisions of Republic Act Numbered Eleven hundred and eighty to the contrary notwithstanding, or the acquisition for the purpose of trade of
rice (husked or unhusked) or corn and the by-products thereof: Provided, That public utilities duly licensed and registered in accordance with law may transport corn or rice.
(Emphasis supplied).

Now, "tahup," "sungo" and "rice husk," which plaintiffs acquires from rice and corn millers and from which it manufactures the vegetable oil and produces the "corn meal" or "corn
germ meal" that it subsequently distributes and sells are clearly by-products of rice and/or corn.2

Although the term "by-product" is not particularly and by specifically stated in the title of Republic Act 3018, its inclusion in the body of the law is not invalid, as the lower court held,
since it is germane to the subject matter expressed in the title of the law.3
Neither is the statutory inclusion of said term in the definition of the phrases "rice and/or corn industry" an invalid legislative usurpation of the court's function to interpret the laws, as
the lower court also ruled. This definition is part of the law itself.

Finally, the lower court determined the purpose and intention behind the law, thus:

x x x In the opinion of the Court, it was never the intention of the Legislature in enacting Republic Act No. 3018 to include in its purpose or scope the processing of the by-products of
rice and corn because Filipinos do not depend for their survival by eating the by-products of rice and corn. . . . .

Assuming, without admitting, that the law in question really intended to include in its object the nationalization not only of the rice and corn industry but also the trade of the
by-products just mentioned above, the business in which the plaintiff has been engaged and since December 31, 1962, as is at present, engaged, the Court is of the opinion that in
the trade, processing, manufacture of corn and rice oil from the raw materials of corn germ proper or embryo (sungo) and tahup and from rice husk converting the remaining parts
into "corn meal" or "corn germ meal" which is traded and sold and that it acquired its raw materials from those engaged milling rice and/or corn. the said Republic Act No. 3018 does
not cover the plaintiff's business activities just mentioned.

This is a fair and reasonable interpretation and application of said Republic Act No. 3018, because to include in its control, limitation and prohibition the business of the plaintiff
mentioned above, would be not only to render the said law unconstitutional for not including in its title "and the by-products thereof," but also to unreasonably stretch out and expand
the scope and intention of the law to include in its context the processing and extracting of oil from rice and corn and the manufacture of corn meal or corn germ meal and the selling
and trading of the same.

As a logical result of this interpretation of the law spelled out by this Court, it must necessarily follow that the Resolution No. 10, Annex 1 and the general circular dated July 10, 1961,
quoted under paragraph 3 of the parties' Stipulation of Facts are hereby declared null and void in so far as they attempted to include in the scope of said law the defendant's
business activities described above in which it engaged since December 31, 1962, and in which it has been engaged partly engaged since its formation in 1959.

What the court a quo did was to resort to statutory construction. But this was improper as well as incorrect. The law is clear in enunciating the policy that only Filipinos and
associations, partnerships or corporations 100% Filipino can engage even in the trade and acquisition of the by-products of rice and/or corn. So the court's only duty was to apply
the law as it was.4 The purpose of the Act, as expressed in the introductory note of the bill, can control the language of the law only in case of ambiguity. 5 There is none here.
Furthermore, the court below's interpretation would render the statute nugatory and defeat its aims, rather than apply and effectuate its provisions,6 since it struck off the phrase
"by-products thereof" from the text of the law.

Since plaintiff-appellee is covered by the statute, there is no necessity for an extensive discussion regarding the validity of Resolution No. 10 of November 21, 1960. The power and
authority of appellant RICOB to issue such rules and regulations implementing the law, proceeds from the law itself. 7 Said resolution, by enumerating some specific examples of
by-products of rice and/,or corn, merely carried out the provisions of law. And the sole reason why the lower court invalidated it, was its mistaken stand that the term
"by-product" ought not to have been made a part of the statute.

The foregoing considerations render moot and academic the question regarding the validity of General Circular No. 1 on July 10, 1961.

Wherefore, the judgment appealed from is reversed and the writ of injunction issued therein is annulled and set aside. No costs. So ordered.
G.R. No. L-22301 August 30, 1967

THE PEOPLE OF THE PHILIPPINES, plaintiff-appellee,


vs.
MARIO MAPA Y MAPULONG, defendant-appellant.

Francisco P. Cabigao for defendant-appellant.


Office of the Solicitor General Arturo A. Alafriz, Assistant Solicitor General F. R. Rosete and Solicitor O. C. Hernandez for plaintiff-appellee.

FERNANDO, J.:

The sole question in this appeal from a judgment of conviction by the lower court is whether or not the appointment to and holding of the position of a secret agent to the provincial
governor would constitute a sufficient defense to a prosecution for the crime of illegal possession of firearm and ammunition. We hold that it does not.

The accused in this case was indicted for the above offense in an information dated August 14, 1962 reading as follows: "The undersized accuses MARIO MAPA Y MAPULONG of
a violation of Section 878 in connection with Section 2692 of the Revised Administrative Code, as amended by Commonwealth Act No. 56 and as further amended by Republic Act
No. 4, committed as follows: That on or about the 13th day of August, 1962, in the City of Manila, Philippines, the said accused did then and there wilfully and unlawfully have in his
possession and under his custody and control one home-made revolver (Paltik), Cal. 22, without serial number, with six (6) rounds of ammunition, without first having secured the
necessary license or permit therefor from the corresponding authorities. Contrary to law."

When the case was called for hearing on September 3, 1963, the lower court at the outset asked the counsel for the accused: "May counsel stipulate that the accused was found in
possession of the gun involved in this case, that he has neither a permit or license to possess the same and that we can subm it the same on a question of law whether or not an
agent of the governor can hold a firearm without a permit issued by the Philippine Constabulary." After counsel sought from the fiscal an assurance that he would not question the
authenticity of his exhibits, the understanding being that only a question of law would be submitted for decision, he explicitly specified such question to be "whether or not a secret
agent is not required to get a license for his firearm."

Upon the lower court stating that the fiscal should examine the document so that he could pass on their authenticity, the fiscal asked the following question: "Does the accused admit
that this pistol cal. 22 revolver with six rounds of ammunition mentioned in the information was found in his possession on August 13, 1962, in the City of Manila without first having
secured the necessary license or permit thereof from the corresponding authority?" The accused, now the appellant, answered categorically: "Yes, Your Honor." Upon which, the
lower court made a statement: "The accused admits, Yes, and his counsel Atty. Cabigao also affirms that the accused admits."

Forthwith, the fiscal announced that he was "willing to submit the same for decision." Counsel for the accused on his part presented four (4) exhibits consisting of his appointment
"as secret agent of the Hon. Feliciano Leviste," then Governor of Batangas, dated June 2, 1962; 1 another document likewise issued by Gov. Leviste also addressed to the accused
directing him to proceed to Manila, Pasay and Quezon City on a confidential mission; 2 the oath of office of the accused as such secret agent,3 a certificate dated March 11, 1963, to
the effect that the accused "is a secret agent" of Gov. Leviste.4 Counsel for the accused then stated that with the presentation of the above exhibits he was "willing to submit the case
on the question of whether or not a secret agent duly appointed and qualified as such of the provincial governor is exempt from the requirement of having a license of firearm." The
exhibits were admitted and the parties were given time to file their respective memoranda.1äwphï1.ñët
Thereafter on November 27, 1963, the lower court rendered a decision convicting the accused "of the crime of illegal possession of firearms and sentenced to an indeterminate
penalty of from one year and one day to two years and to pay the costs. The firearm and ammunition confiscated from him are forfeited in favor of the Government."

The only question being one of law, the appeal was taken to this Court. The decision must be affirmed.

The law is explicit that except as thereafter specifically allowed, "it shall be unlawful for any person to . . . possess any firearm, detached parts of firearms or ammunition therefor, or
any instrument or implement used or intended to be used in the manufacture of firearms, parts of firearms, or ammunition."5 The next section provides that "firearms and ammunition
regularly and lawfully issued to officers, soldiers, sailors, or marines [of the Armed Forces of the Philippines], the Philippine Constabulary, guards in the employment of the Bureau of
Prisons, municipal police, provincial governors, lieutenant governors, provincial treasurers, municipal treasurers, municipal mayors, and guards of provincial prisoners and jails," are
not covered "when such firearms are in possession of such officials and public servants for use in the performance of their official duties." 6

The law cannot be any clearer. No provision is made for a secret agent. As such he is not exempt. Our task is equally clear. The first and fundamental duty of courts is to apply the
law. "Construction and interpretation come only after it has been demonstrated that application is impossible or inadequate without them."7 The conviction of the accused must stand.
It cannot be set aside.

Accused however would rely on People v. Macarandang,8 where a secret agent was acquitted on appeal on the assumption that the appointment "of the accused as a secret agent
to assist in the maintenance of peace and order campaigns and detection of crimes, sufficiently put him within the category of a "peace officer" equivalent even to a member of the
municipal police expressly covered by section 879." Such reliance is misplaced. It is not within the power of this Court to set aside the clear and explicit mandate of a statutory
provision. To the extent therefore that this decision conflicts with what was held in People v. Macarandang, it no longer speaks with authority.

Wherefore, the judgment appealed from is affirmed.

G.R. No. L-25659 October 31, 1969

LUZON SURETY CO., INC., petitioner,


vs.
JOSEFA AGUIRRE DE GARCIA, VICENTE GARCIA and the FOURTH DIVISION OF THE COURT OF APPEALS, respondents.

Tolentino and Garcia and D. R. Cruz for petitioner.


Rodolfo J. Herman for respondents.

FERNANDO, J.:

The crucial question in this petition for the review of a decision of the Court of Appeals, to be passed upon for the first time, is whether or not a conjugal partnership, in the absence
of any showing of benefits received, could be held liable on an indemnity agreement executed by the husband to accommodate a third party in favor of a surety company. The Court
of Appeals held that it could not. Petitioner Luzon Surety Co., Inc., dissatisfied with such a judgment, which was an affirmance of a lower court decision, would have us reverse. We
do not see it that way. The Court of Appeals adjudicated the matter in accordance with law. We affirm what it did.
As noted in the brief of petitioner Luzon Surety Co., Inc., on October 18, 1960, a suit for injunction was filed in the Court of First Instance of Negros Occidental against its Provincial
Sheriff by respondents-spouses, Josefa Aguirre de Garcia and Vicente Garcia "to enjoin [such Sheriff] from selling the sugar allegedly owned by their conjugal partnership, pursuant
to a writ of garnishment issued by virtue of a writ of execution issued in Civil Case No. 3893 of the same Court of First Instance ... against the respondent Vicente Garcia ... ."1

There was a stipulation of facts submitted. There is no question as to one Ladislao Chavez, as principal, and petitioner Luzon Surety Co., Inc., executing a surety bond in favor of the
Philippine National Bank, Victorias Branch, to guaranty a crop loan granted by the latter to Ladislao Chavez in the sum of P9,000.00. On or about the same date, Vicente Garcia,
together with the said Ladislao Chavez and one Ramon B. Lacson, as guarantors, signed an indemnity agreement wherein they bound themselves, jointly and severally, to
indemnify now petitioner Luzon Surety Co., Inc. against any and all damages, losses, costs, stamps, taxes, penalties, charges and expenses of whatsoever kind and nature which
the petitioner may at any time sustain or incur in consequence of having become guarantor upon said bond, to pay interest at the rate of 12% per annum, computed and
compounded quarterly until fully paid; and to pay 15% of the amount involved in any litigation or other matters growing out of or connected therewith for attorney's fees.

It was likewise stipulated that on or about April 27, 1956, the Philippine National Bank filed a complaint before the Court of First Instance of Negros Occidental, docketed as its Civil
Case No. 3893, against Ladislao Chavez and Luzon Surety Co., Inc. to recover the amount of P4,577.95, in interest, attorney's fees, and costs of the suit. On or about August 8,
1957, in turn, a third-party complaint against Ladislao Chavez, Ramon B. Lacson and Vicente Garcia, based on the indemnity agreement, was instituted by Luzon Surety Co., Inc.

Then, as set forth by the parties, on September 17, 1958, the lower court rendered a decision condemning Ladislao Chavez and Luzon Surety Co., Inc., to pay the plaintiff jointly and
severally the amount of P4,577.95 representing the principal and accrued interest of the obligation at the rate of 6% per annum as of January 6, 1956, with a daily interest of
P0.7119 on P4,330.91 from January 6, 1956, until fully paid, plus the sum of P100.00 as attorney's fees, and to pay the costs. The same decision likewise ordered the third party
defendants, Ladislao Chavez, Vicente Garcia, and Ramon B. Lacson, to pay Luzon Surety Co., Inc., the total amount to be paid by it to the plaintiff Philippine National Bank.

On July 30, 1960, pursuant to the aforesaid decision, the Court of First Instance of Negros Occidental issued a writ of execution against Vicente Garcia for the satisfaction of the
claim of petitioner in the sum of P8,839.97. Thereafter, a writ of garnishment was issued by the Provincial Sheriff of Negros Occidental dated August 9, 1960, levying and garnishing
the sugar quedans of the now respondent-spouses, the Garcias, from their sugar plantation, registered in the names of both of them. 2 The suit for injunction filed by the Garcia
spouses was the result.

As noted, the lower court found in their favor. In its decision of April 30, 1962, it declared that the garnishment in question was contrary to Article 161 of the Civil Code and granted
their petition, making the writ of preliminary injunction permanent. Luzon Surety, Inc. elevated the matter to the Court of Appeals, which, as mentioned at the outset, likewise reached
the same result. Hence this petition for review.

We reiterate what was set forth at the opening of this opinion. There is no reason for a reversal of the judgment. The decision sought to be reviewed is in accordance with law.

As explained in the decision now under review: "It is true that the husband is the administrator of the conjugal property pursuant to the provisions of Art. 163 of the New Civil Code.
However, as such administrator the only obligations incurred by the husband that are chargeable against the conjugal property are those incurred in the legitimate pursuit of his
career, profession or business with the honest belief that he is doing right for the benefit of the family. This is not true in the case at bar for we believe that the husband in acting as
guarantor or surety for another in an indemnity agreement as that involved in this case did not act for the benefit of the conjugal partnership. Such inference is more emphatic in this
case, when no proof is presented that Vicente Garcia in acting as surety or guarantor received consideration therefor, which may redound to the benefit of the conjugal partnership."3

In the decision before us, the principal error assigned is the above holding of the Court of Appeals that under Article 161 of the Civil Code no liability was incurred by the conjugal
partnership. While fully conscious of the express language of Article 161 of the Civil Code, petitioner, in its well-written brief submitted by its counsel, would impress on us that in this
case it could not be said that no benefit was received by the conjugal partnership. It sought to lend some semblance of plausibility to this view thus: "The present case involves a
contract of suretyship entered into by the husband, the respondent Vicente Garcia, in behalf of a third person. A transaction based on credit through which, by our given definitions,
respondent Vicente Garcia, by acting as guarantor and making good his guaranty, acquires the capacity of being trusted, adds to his reputation or esteem, enhances his standing as
a citizen in the community in which he lives, and earns the confidence of the business community. He can thus secure money with which to carry on the purposes of their conjugal
partnership."4

While not entirely, without basis, such an argument does not carry conviction. Its acceptance would negate the plain meaning of what is expressly provided for in Article 161. In the
most categorical language, a conjugal partnership under that provision is liable only for such "debts and obligations contracted by the husband for the benefit of the conjugal
partnership." There must be the requisite showing then of some advantage which clearly accrued to the welfare of the spouses. There is none in this case. Nor could there be,
considering that the benefit was clearly intended for a third party, one Ladislao Chavez. While the husband by thus signing the indemnity agreement may be said to have added to
his reputation or esteem and to have earned the confidence of the business community, such benefit, even if hypothetically accepted, is too remote and fanciful to come within the
express terms of the provision.

Its language is clear; it does not admit of doubt. No process of interpretation or construction need be resorted to. It peremptorily calls for application. Where a requirement is made in
explicit and unambiguous terms, no discretion is left to the judiciary. It must see to it that its mandate is obeyed. So it is in this case. That is how the Court of Appeals acted, and what
it did cannot be impugned for being contrary to law. 5

Moreover, it would negate the plain object of the additional requirement in the present Civil Code that a debt contracted by the husband to bind a conjugal partnership must redound
to its benefit. That is still another provision indicative of the solicitude and tender regard that the law manifests for the family as a unit. Its interest is paramount; its welfare uppermost
in the minds of the codifiers and legislators.

This particular codal provision in question rightfully emphasizes the responsibility of the husband as administrator. 6He is supposed to conserve and, if possible, augment the funds of
the conjugal partnership, not dissipate them. If out of friendship or misplaced generosity on his part the conjugal partnership would be saddled with financial burden, then the family
stands to suffer. No objection need arise if the obligation thus contracted by him could be shown to be for the benefit of the wife and the progeny if any there be. That is but fair and
just. Certainly, however, to make a conjugal partnership respond for a liability that should appertain to the husband alone is to defeat and frustrate the avowed objective of the new
Civil Code to show the utmost concern for the solidarity and well-being of the family as a unit.7 The husband, therefore, as is wisely thus made certain, is denied the power to
assume unnecessary and unwarranted risks to the financial stability of the conjugal partnership.

No useful purpose would be served by petitioner assigning as one of the errors the observation made by the Court of Appeals as to the husband's interest in the conjugal property
being merely inchoate or a mere expectancy in view of the conclusion thus reached as to the absence of any liability on the part of the conjugal partnership. Nor was it error for the
Court of Appeals to refuse to consider a question raised for the first time on appeal. Now as to the question of jurisdiction of the lower court to entertain this petition for injunction
against the Provincial Sheriff, to which our attention is invited, neither the Court of Appeals nor the lower court having been asked to pass upon it. Of course, if raised earlier, it ought
to have been seriously inquired into. We feel, however, that under all the circumstances of the case, substantial justice would be served if petitioner be held as precluded from now
attempting to interpose such a barrier. The conclusion that thereby laches had intervened is not unreasonable. Such a response on our part can be predicated on the authoritative
holding in Tijam v. Sibonghanoy.8

WHEREFORE, the decision of the Court of Appeals of December 17, 1965, now under review, is affirmed with costs against petitioner Luzon Surety Co., Inc.