PHILCONSA VS ENRIQUEZ

Posted by kaye lee on 9:14 AM

G.R. No. 113105 August 19 1994 [Article VI Section 25 - Appropriations]

FACTS:
Petitioners assailed the validity of RA 7663 or General Appropriations Act of 1994.
GAA contains a special provision that allows any members of the Congress the REalignment of
Allocation for Operational Expenses, provided that the total of said allocation is not exceeded.
Philconsa claims that only the Senate President and the Speaker of the House of Representatives
are the ones authorized under the Constitution to realign savings, not the individual members of
Congress themselves.
President signed the law, but Vetoes certain provisions of the law and imposed certain
provisional conditions: that the AFP Chief of Staff is authorized to use savings to augment the
pension funds under the Retirement and Separation Benefits of the AFP.

ISSUE:
Whether or not RA 7663 is violative of Article VI, Section 25 (5) of 1987 Constitution.

RULING:
Yes. Only the Senate President and the Speaker of the House are allowed to approve the
realignment.
Furthermore, two conditions must be met: 1) the funds to be realigned are actually savings, and
2) the transfer is for the purpose of augmenting the items of expenditures to which said transfer
to be made.

As to the certain condition given to the AFP Chief of Staff, it is violative of of Sections 25(5)
and 29(1) of the Article VI of the Constitution. The list of those who may be authorized to
transfer funds is exclusive. the AFP Chief of Staff may not be given authority.
100 Phil. 1063

LABRADOR, J.:
Appeal by certiorari against a judgment of the Court of Appeals, Second Division. The facts of
the case have been briefly stated as follows:

"On March 8, 1952, the United Car Exchange sold to the Fortune
Enterprises, Inc., the following described car
Make: Chevrolet (1947); Plate No. 43-1465
Type: Sedan; Motor No. EAA-20834 (Exhibit 'D').

The same car was sold by the Fortune Enterprises, Inc. to one Salvador Aguinaldo, and for not
having paid it in full, the latter executed on the same date a promissory note in the amount of
P2,400 payable in 20 installments including interest thereon at 12 per cent per annum, the last of
which installments fell due on January 9, 1953 (Exhibit 'A').

"To secure the payment of this note, Aguinaldo executed a deed of chattel mortgage over said
car. The deed was duly registered in the office of the Register of Deeds of Manila at 1:12 p.m. on
March 11, 1952 (Exhibit 'B'). As the buyer-mortgagor defaulted in the payment of the
installments due, counsel for Fortune Enterprises Inc. addressed a letter on May 16, 1952
(Exhibit 'C'), requesting him to make the necessary payment and to keep his account up to date,
so that no court action would be resorted to.

"It further appears that the above-described car found its way again into the United Car
Exchange which sold the same in cash for P4,000 t» one O. N. Borlough on April 6, 1952.
Accordingly, he registered it on the following day with the Motor Vehicles Office." (Decision,
Court of Appeals.)
It also appears from the record that defendant O. N. Borlough took possession of the vehicle
from the time he purchased it. On July 10, 1952, Fortune Enterprises, Inc. brought action against
Salvador Aguinaldo to recover the balance of the purchase price. Borlough filed a third-party
complaint, claiming the vehicle. Thereupon, Fortune Enterprises, Inc. amended its complaint,
including Borlough as a defendant and alleging that he was in connivance with Salvador
Aguinaldo and was unlawfully hiding and concealing the vehicle in order to evade seizure by
judicial process. Borlough answered alleging that he was in legal possession thereof, having
purchased it in good faith and for the full price of P4,000, and that he had a certificate of
registration of the vehicle issued by the Motor Vehicles Office, and he prayed for the dismissal
of the complaint, the return of the vehicle and for damages against the plaintiff.

The vehicle was seized by the sheriff of Manila on August 4, 1952 and was later sold at public
auction. The Court of First Instance rendered judgment in favor of Borlough, and against
plaintiff, ordering the latter to pay Borlough the sum of P4,000, with interest at 6 per cent per
annum, from the date of the seizure of the car on August 4, 1952, and in addition thereto,
attorney's fees in the sum of P1,000.

Upon appeal to the Court of Appeals, this court rendered judgment ordering that Emil B. Fajardo
pay Borlough P4.000 plus attorney's fees and that plaintiff pay to Borlough any amount received
by it in excess of its credits and judicial expenses. The reason for the modification of the
judgment is that the mortgage was superior, being prior in point of time, to whatever rights may
have been acquired by Borlough by reason of his possession and by the registration of his title in
the Motor Vehicles Office.

The question involved in the appeal in this case is one of law and may be stated thus: As between
a prior mortgage executed over a motor vehicle, registered under the Chattel Mortgage Law only,
without annotation thereof in the Motor Vehicles Office, and a subsequent registration of the
vehicle in the Motor Vehicles Office accompanied by actual possession of the motor vehicle,
which should prevail. While the question can be resolved by the general principles found in the
Civil Code and expressly stated in Article 559, there is no need of resorting thereto (the general
principles) in view of the express provisions of the Revised Motor Vehicles Law, which
expressly and specifically regulate the registration, sale or transfer and mortgage of motor
vehicles. The following provisions of said law may help decide the legal question now under
consideration:

"Sec. 5(c) Reports of motor vehicle sales. On the first day of each month, every dealer in motor
vehicles shall furnish the Chief of the Motor Vehicles Office a true report showing the name and
address of each purchaser of a motor vehicle during the previous month and the manufacturer's
serial number and motor number; a brief description of the vehicle, and such other information as
the Chief of the Motor Vehicles Office may require."

"Sec. 5(e) Report of mortgages. Whenever any owner hypothecates or mortgages any motor
vehicle as security for a debt or other obligation, the creditor or person in whose favor the
mortgage is made shall, within seven days, notify the Chief of the Motor Vehicles

Office in writing to the effect, stating the registration number of the motor vehicle, date of
mortgage, names and addresses of both parties, and such other information as the Chief of the
Motor Vehicles Office may require. This notice shall be signed jointly by the parties to the
mortgage.

"On termination, cancellation or foreclosure of the mortgage, a similar written notice signed by
both parties, shall be forwarded to the Chief of the Motor Vehicles Office by the owner.

"These notices shall be filed by the Chief of the Motor Vehicles Office in the motor vehicle
records, and in the absence of more specific information, shall be deemed evidence of the true
status of ownership of the motor vehicle." (Revised Motor Vehicles Law.)
It is to be noted that under section 4(6) of the Revised Motor Vehicles Law the Chief of the
Motor Vehicles Office is required to enter or record, among other things, transfers of motor
vehicles "with a view of making and keeping the same and each all of them as accessible as
possible to and for persons and officers properly interested in the same," and to "issue such
reasonable regulations governing the search and examination of the documents and records * * *
as will be consistent with their availability to the public and their safe and secure preservation."

Two recording laws are here being invoked, one by each contending party the Chattel Mortgage
Law (Act No. 1508), by the mortgagor and the Revised Motor Vehicles Law (Act No. 3992), by
a purchaser in possession. What effect did the passage of the Revised Motor Vehicles Law have
on the previous enactment?

The Revised Motor Vehicles Law is a special legislation enacted to "amend and compile the laws
relative to motor vehicles," whereas the Chattel Mortgage Law is a general law covering
mortgages of all kinds of personal property. The former is the latest attempt to assemble and
compile the motor vehicle laws of the Philippines, all the earlier laws on the subject having been
found to be very deficient in form as well as in substance (Villar and De Vega, Revised Motor
Vehicles Law, p. 1); it had been designed primarily to control the registration and operation of
motor vehicles (section 2, Act No. 3992).

Counsel for petitioner contends that the passage of the Revised Motor Vehicles Law had the
effect of repealing the Chattel Mortgage Law, as regards registration of motor vehicles and of the
recording of transactions affecting the same. We do not believe that it could have been the
intention of the legislature to bring about such a repeal. In the first place, the provisions of the
Revised Motor Vehicles Law on registration are not inconsistent with those of the Chattel
Mortgage Law. In the Second place, implied repeals are not favored; implied repeals are
permitted only in cases of clear and positive inconsistency. The first paragraph of section 5
indicates that the provisions of the Revised Motor Vehicles Law regarding registration and
recording of mortgages are not incompatible with a mortgage under the Chattel Mortgage Law.
The section merely requires report to the Motor Vehicles Office of a mortgage; it does not state
that the registration of the mortgage under the Chattel Mortgage Law is to be dispensed with. We
have, therefore, an additional requirement in the Revised Motor Vehicles Law, aside from the
registration of a chattel mortgage, which is to report a mortgage to the Motor Vehicles Office, if
the subject of the mortgage is a motor vehicle; the report merely supplements or complements
the registration.

The recording provisions of the Revised Motor Vehicles Law, therefore, are merely
complementary to those of the Chattel Mortgage Law. A mortgage in order to affect third
persons should not only be registered in the Chattel Mortgage Registry, but the same should also
be recorded in the Motor Vehicles Office as required by section 5(e) of the Revised Motor
Vehicles Law. And the failure of the respondent mortgagee to report the mortgage executed in its
favor had the effect of making said mortgage ineffective against Borlough, who had his purchase
registered in the said Motor Vehicles Office.

"On failure to comply with the statute, the transferee's title is rendered invalid as against a
subsequent purchaser from the transferor, who is enabled by such failure of compliance to retain
the indicia of ownership, such as a subsequent purchaser in good faith, or a purchaser from a
conditional buyer in possession; and the lien of a chattel mortgage given by the buyer to secure a
purchase money loan never becomes effective in such case as against an innocent
purchaser." (60 Corpus Juris Secundum, p. 171.)

"One holding a lien on a motor vehicle, in so far as he can reasonably do so, must protect himself
and others thereafter dealing in good faith by complying and requiring compliance with the
provisions of the laws concerning certificates of title to motor vehicles, such as statutes
providing for the notation of liens or claims against the motor vehicle certificate of title or
manufacturer's certificate, or for the issuance to the mortgagee of a new certificate of ownership.
Where the lienholder has satisfied himself that the existence of the lien is recited in the certificate
of title, he has done all that the law contemplates that he should do, and there is notice to the
public of the existing lien, which continues valid until the record shows that it has been satisfied
and a new certificate issued on legal authority, even though another certificate which does not
disclose the lien is procured as the result of false statements made in the application therefore,
and the vehicle is purchased by a bona fide purchaser."

"The holder of a lien who is derelict in his duty to comply and require compliance with the
statutory provisions acts at his own peril, and must suffer the consequence of his own
negligence; and accordingly, he is not entitled to the lien as against a subsequent innocent
purchaser or encumbrancer, even though such lien had been previously filed as provided by other
chattel mortgage statutes. The rule is otherwise, however, as against claimants not occupying the
position of innocent purchasers, such as a judgment creditor, or one acquiring title with actual
notice of an unregistered lien, and the statutes do not protect a purchaser holding under a
registered title if a link in the title is forgery. Moreover, such statute will not impair vested rights
of a mortgage under a chattel mortgage duly recorded. (60 C. J. S., pp. 181-182.)
The above authorities leave no room for doubt that purchaser 0. N. Borlough's right to the
vehicle as against the previous and prior mortgagee Fortune Enterprises, Inc., which failed to
record its lien in accordance with the Revised Motor Vehicles Law, should be upheld.

For the foregoing consideration, the judgment of the Court of Appeals is hereby reversed and
that of the Court of First Instance affirmed, with costs against respondent.

Paras, C. J., Bengzon, Padilla, Reyes, A., Bautista Angelo, Concepcion, Reyes, J. B. L.,
and Endencia, JJ., concur
164 Phil. 516

FERNANDO, Acting C.J.:

It is the assumption of jurisdiction over a criminal case for libel by
respondent Municipal Judge Vicente Estanislao[1] of Balanga, Bataan, that
is assailed in this certiorari and prohibition proceeding. The merit of the
petition is apparent if there be deference, as should be the case, to the
ruling in Jalandoni v. Endaya.[2] There was, according to the petition, a
criminal complaint for libel filed by private respondent with the Municipal
Court of Balanga, Bataan, against petitioner, docketed as Criminal Case No.
1575.[3] Pursuant to such criminal complaint, respondent Judge conducted
a preliminary investigation.[4] Then came the challenged order to the effect
that the offense charged is one that falls within the concurrent jurisdiction
of the municipal court of Balanga, Bataan, with the records of the case
being referred to the Provincial Fiscal of Bataan for the filing of the
corresponding information.[5] Subsequently, the Provincial Fiscal of Bataan,
pursuant to such order of respondent Judge, filed an information for libel
against petitioner in the Municipal Court of Balanga, Bataan.[6] A plea of
not guilty was entered by him upon arraignment.[7] On the same day, in a
motion to quash, he raised the question of jurisdiction, his allegation being
that it is a court of first instance and not a municipal court that could try
the offense.[81] Respondent Judge denied such motion to quash.[9] The
motion for reconsideration having been filed and thereafter denied,[10] this
present petition was filed. As noted at the outset, the Jalandoni doctrine is
decisive. Petitioner is entitled to the writs prayed for.
The initial impression yielded, even upon the most cursory reading of the
petition, was that it embodied a correct appreciation of the applicable law,
Article 360 of the Revised Penal Code.[11] Accordingly, respondents were
not only required to answer, but a restraining order was issued. There was
nothing they could say in their subsequent pleadings that militated against
the assertion of petitioner as to a court of first instance having exclusive
jurisdiction. Accordingly, as noted, we find for him.
1. The language of the recent Jalandoni decision makes clear why this
petition should prosper. Thus: "There is no need to make mention again
that it is a court of first instance that is specifically designated to try a libel
case. Article 360 of the Revised Penal Code so provides. Its language is
categorical; its meaning is free from doubt. This is one of those statutory
provisions that leaves no room for interpretation. All that is required is
application. What the law ordains must then be followed. It is as simple as
that. It did not appear to be so to respondent Judge. He would go
ahead. He therefore did invite a suit of this character bent as he was on
treading grounds where his presence was, to put it at its mildest,
unwelcome. He must be restrained."[12] It was likewise noted in the
Jalandoni decision that there has been as yet no previous case where a
municipal court "has been sustained in its determination to go ahead and
try on the merits a prosecution for libel * * *."[13]
2. It is the contention of respondents that the alleged libel, having arisen
from a radio broadcast, is triable by a municipal court, for in a later portion
of Article 360 the phrase "by similar means," is not repeated thus leading
them to conclude that it is only where there is "defamation in writing" that
there is conferment of exclusive jurisdiction in a court of first
instance. Such an argument does not carry weight. It loses sight of the
basic purpose of the act, namely, to prevent inconvenience or even
harassment to those unfortunate enough to be accused of libel, if any
municipal court where there was publication could be chosen by the
complainant as the venue. Since a radio broadcast may be spread far and
wide, much more so than in cases of newspaper publications, it is not
difficult to imagine how deplorable the effect would be for one indicted for
such an offense even if he could rely on a sound and valid offense. This is
contrary to the legal tradition of the Philippines dating back to the
landmark case of United States v. Bustos,[14] where Justice Malcolm
emphasized that to prevent dilution of the constitutional right to free
speech and free press, every libel prosecution should be tested on the
rigorous and exacting standard of whether or not it could be violative of
such fundamental guarantee. It is a commitment to such a cardinal
postulate that is the basis of Article 360 as amended. Its purpose is
therefore crystal-clear. As noted in Sarcos v. Castillo:[15] "It is fundamental
that once the policy or purpose of the law has been ascertained, effect
should be given to it by the judiciary. From Ty Sue v. Hord, decided in
1909, it has been our constant holding that the choice between conflicting
theories falls on that which best accords with the letter of the law and with
its purpose. The next year, in an equally leading decision, United States v.
Toribio, there was a caveat against a construction that would tend 'to defeat
the purpose and object of the legislator.' Then came the admonition in
Riera v. Palmaroli, against an application so narrow 'as to defeat the
manifest purpose of the legislator.' This was repeated in the latest case,
Commissioner of Customs v. Caltex, in almost identical language."[16] Such
an excerpt was quoted with approval in Automotive Parts and Equipment
Company v. Lingad.[17] It is of the essence of judicial duty then to construe
statutes to reflect fidelity to such a concept. In the apt language of
Frankfurter: "A decent respect for the policy of Congress must save us from
imputing to it a self-defeating, if not disingenuous purpose."[18] Certainly,
we must reject a construction that at best amounts to a manifestation of
verbal ingenuity but is certainly at war with the policy enshrined in the law.
3. The further point was raised by respondents that under Republic Act No.
3828, concurrent jurisdiction was conferred on municipal judges in the
capitals of provinces with a court of first instance, in which the penalty
provided for by law does not exceed prision correccional or imprisonment
for not more than six years or a fine of P6,000.00 or both, such fine or
imprisonment being the penalty for libel by means of radio broadcast as
provided under Article 355 of the Revised Penal Code. For then that would
mean that there was an implied repeal of the earlier amendatory act,
Republic Act No. 1289 vesting exclusive jurisdiction on courts of first
instance. Such a point was raised and rejected in the Jalandoni opinion in
these words: "It suffices by way of refutation to call attention to the
doctrine on repeals by implication as set forth in the latest case of Villegas
v. Subido. Thus: 'It has been the constant holding of this court that repeals
by implication are not favored and will not be so declared unless it be
manifest that the legislature so intended. Such a doctrine goes as far back
as United States v. Reyes, a 1908 decision. It is necessary then before such
a repeal is deemed to exist that it be shown that the statutes or statutory
provisions deal with the same subject matter and that the latter be
inconsistent with the former. There must be a showing of repugnancy clear
and convincing in character. The language used in the latter statute must
be such as to render it irreconcilable with what had been formerly
enacted. An inconsistency that falls short of that standard does not
suffice. What is needed is a manifest indication of the legislative purpose to
repeal.' An even more relevant excerpt from Villegas also follows: 'More
specifically, a subsequent statute, general in character as to its terms and
application, is not to be construed as repealing a special or specific
enactment, unless the legislative purpose to do so is manifest. This is so
even if the provisions of the latter are sufficiently comprehensive to include
what was set forth in the special act. This principle has likewise been
consistently applied in decisions of this Court from Manila Railroad Co. v.
Rafferty, decided as far back as 1919.'"[19] That would seem to take care in a
neat and conclusive manner, of this last but futile effort to uphold what was
done by respondent Judge.
WHEREFORE , the writ of certiorari is granted and the challenged
orders of January 15, 1968 as well as of January 27, 1969 are nullified and
set aside on the ground that the exclusive jurisdiction of libel cases belongs
to a court of first instance. The writ of prohibition prayed for is likewise
granted and the restraining order issued by this Court is made permanent,
except for the purpose of dismissing the case for lack of jurisdiction. No
costs.
Barredo, Antonio, Aquino, and Concepcion, Jr., JJ., concur.
FACTS:
SEC. 67 of the Omnibus Election Code reads: Candidates holding elective office. – Any elective official, whether
national or local, running for any office other than the one which he is holding in a permanent capacity, except for
President and Vice-President, shall be considered ipso facto resigned from his office upon the filing of his certificate
of candidacy.

Petitioners alleged that Section 14 of RA 9006 entitled "An Act to Enhance the
Holding of Free, Orderly, Honest, Peaceful and Credible Elections through Fair
Elections Practices, insofar as it repeals Section 67 of the Omnibus Election Code, is
unconstitutional for being in violation of Section 26(1) of the Article VI of the
Constitution, requiring every law to have only one subject which should be in
expressed in its title.
The inclusion of Sec 14 repealing Sec 67 of the Omnibus Election Code in RA 9006
constitutes a proscribed rider. The Sec 14 of RA 9006 primarily deals with the lifting
of the ban on the use of media for election propaganda and the elimination of unfair
election practices. Sec 67 of the OEC imposes a limitation of officials who run for
office other than the one they are holding in a permanent capacity by considering
them as ipso facto resigned therefrom upon filing of the certificate of candidacy. The
repeal of Sec 67 of the OEC is thus not embraced in the title, nor germane to the
subject matter of RA 9006.

ISSUE:
Whether or not Section 14 of RA 9006 is a rider.

RULING:
No. The Court is convinced that the title and the objectives of RA 9006 are
comprehensive enough to include the repeal of Section 67 of the Omnibus Election
Code within its contemplation. To require that the said repeal of Section 67 of the
Code be expressed in the title is to insist that the title be a complete index of its
content. The purported dissimilarity of Section 67 of the Code and the Section 14 of
the RA 9006 does not violate "one subject-one title rule." This Court has held that an
act having a single general subject, indicated in the title, may contain any number of
provisions, no matter how diverse they may be, so long as they are not inconsistent
with or foreign to the general subject, and may be considered in furtherance of such
subject by providing for the method and means of carrying out the general subject.

Section 26(1) of the Constitution provides: Every bill passed by the Congress shall
embrace only one subject which shall be expressed in the title thereof.
The avowed purpose of the constitutional directive that the subject of a bill should be
embraced in its title is to apprise the legislators of the purposes, the nature and scope
of its provisions, and prevent the enactment into law of matters which have not
received the notice, action and study of the legislators and the public. In this case, it
cannot be claimed that the legislators were not apprised of the repeal of Section 67 of
the Code as the same was amply and comprehensively deliberated upon by the
members of the House. In fact, the petitioners as members of the House of
Representatives, expressed their reservations regarding its validity prior to casting
their votes. Undoubtedly, the legislators were aware of the existence of the provision
repealing Section 67 of the Omnibus Election Code.
148 Phil. 443

FERNANDO, J.:
A correct appreciation of the controlling doctrine as to the effect, if any, to
be attached to a statute subsequently adjudged invalid, is decisive of this
appeal from a lower court decision. Plaintiff Francisca Serrano
de Agbayani, now appellee, was able to obtain a favorable judgment in her
suit against defendant, now appellant Philippine National Bank,
permanently enjoining the other defendant, the Provincial Sheriff
of Pangasinan, from proceeding with an extra-judicial foreclosure sale of
land belonging to plaintiff mortgaged to appellant Bank to secure a loan
declared no longer enforceable, the prescriptive period having
lapsed. There was thus a failure to sustain the defense raised by appellant
that if the moratorium under an Executive Order and later an Act
subsequently found unconstitutional were to be counted in the
computation, then the right to foreclose the mortgage was still
subsisting. In arriving at such a conclusion, the lower court manifested a
tenacious adherence to the inflexible view that an unconstitutional act is
not a law, creating no rights and imposing no duties, and thus as
inoperative as if it had never been. It was oblivious to the force of the
principle adopted by this Court that while a statute's repugnancy to the
fundamental law deprives it of its character as a juridical norm, its having
been operative prior to its being nullified is a fact that is not devoid of legal
consequences. As will hereafter be explained, such a failing of the lower
court resulted in an erroneous decision. We find for appellant Philippine
National Bank, and we reverse.
There is no dispute as to the facts. Plaintiff obtained the loan in the amount
of P450.00 from defendant Bank dated July 19, 1939, maturing on July 19,
1944, secured by real estate mortgage duly registered covering property
described in T. C.T. No. 11275 of the province of Pangasinan. As of
November 27, 1959, the balance due on said loan was in the amount of
P1,294.00. As early as July 13 of the same year, defendant instituted extra-
judicial foreclosure proceedings in the office of defendant Provincial Sheriff
of Pangasinan for the recovery of the balance of the loan remaining
unpaid. Plaintiff countered with this suit against both defendants on
August 10, 1959, her main allegation being that the mortgage sought to be
foreclosed had long prescribed, fifteen years having elapsed from the date
of maturity, July 19, 1944. She sought and was able to obtain a writ of
preliminary injunction against defendant Provincial Sheriff, which was
made permanent in the decision now on appeal. Defendant Bank in its
answer prayed for the dismissal of the suit as even on plaintiff's own theory
the defense of prescription would not be available if the period from March
10, 1945, when Executive Order No. 32[1] was issued, to July 26, 1948, when
the subsequent legislative act[2] extending the period of moratorium was
declared invalid, were to be deducted from the computation of the time
during which the bank took no legal steps for the recovery of the loan. As
noted, the lower court did not find such contention persuasive and decided
the suit in favor of plaintiff.
Hence this appeal, which, as made clear at the outset, possesses merit,
there being a failure on the part of the lower court to adhere to the
applicable constitutional doctrine as to the effect to be given to a statute
subsequently declared invalid.
1. The decision now on appeal reflects the orthodox view that an
unconstitutional act, for that matter an executive order or a municipal
ordinance likewise suffering from that infirmity, cannot be the source of
any legal rights or duties. Nor can it justify any official act taken under
it. Its repugnancy to the fundamental law once judicially declared results in
its being to all intents and purposes a mere scrap of paper. As the new Civil
Code puts it: "When the courts declare a law to be inconsistent with the
Constitution, the former shall be void and the latter shall
govern. Administrative or executive acts, orders and regulations shall be
valid only when they are not contrary to the laws or the Constitution."[3] It
is understandable why it should be so, the Constitution being supreme and
paramount. Any legislative or executive act contrary to its terms cannot
survive.
Such a view has support in logic and possesses the merit of simplicity. It
may not however be sufficiently realistic. It does not admit of doubt that
prior to the declaration of nullity such challenged legislative or executive
act must have been in force and had to be complied with. This is so as until
after the judiciary, in an appropriate case, declares its invalidity, it is
entitled to obedience and respect. Parties may have acted under it and may
have changed their positions. What could be more fitting than that in a
subsequent litigation regard be had to what has been done while such
legislative or executive act was in operation and presumed to be valid in all
respects. It is now accepted as a doctrine that prior to its being nullified, its
existence as a fact must be reckoned with. This is merely to reflect
awareness that precisely because the judiciary is the governmental organ
which has the final say on whether or not a legislative or executive measure
is valid, a period of time may have elapsed before it can exercise the power
of judicial review that may lead to a declaration of nullity. It would be to
deprive the law of its quality of fairness and justice then, if there be no
recognition of what had transpired prior to such adjudication.
In the language of an American Supreme Court decision: "The actual
existence of a statute, prior to such a determination [of
unconstitutionality], is an operative fact and may have consequences which
cannot justly be ignored. The past cannot always be erased by a new
judicial declaration. The effect of the subsequent ruling as to invalidity may
have to be considered in various aspects, with respect to particular
relations, individual and corporate, and particular conduct, private and
official."[4] This language has been quoted with approval in a resolution
in Araneta v. Hill[5] and the decision in Manila Motor Co., Inc. v.
Flores.[6] An even more recent instance is the opinion of
Justice Zaldivar speaking for the Court in Fernandez v. Cuerva and Co.[7]
2. Such an approach all the more commends itself whenever police power
legislation intended to promote public welfare but adversely affecting
property rights is involved. While subject to be assailed on due process,
equal protection and non-impairment grounds, all that is required to avoid
the corrosion of invalidity is that the rational basis or reasonableness test is
satisfied. The legislature on the whole is not likely to allow an enactment
suffering, to paraphrase Cardozo, from the infirmity of outrunning the
bounds of reason and resulting in sheer oppression. It may be of course
that if challenged, an adverse judgment could be the result, as its running
counter to the Constitution could still be shown. In the meanwhile though,
in the normal course of things, it has been acted upon by the public and
accepted as valid. To ignore such a fact would indeed be the fruitful parent
of injustice. Moreover, as its constitutionality is conditioned on its being
fair or reasonable, which in turn is dependent on the actual situation, never
static but subject to change, a measure valid when enacted may
subsequently, due to altered circumstances, be stricken down.
That is precisely what happened in connection with Republic Act No. 342,
the moratorium legislation, which continued Executive Order No. 32,
issued by the then President Osmeña, suspending the enforcement of
payment of all debts and other monetary obligations payable by war
sufferers. So it was explicitly held in Rutter v. Esteban[8] where such
enactment was considered in 1953 "unreasonable and oppressive, and
should not be prolonged a minute longer, and, therefore, the same should
be declared null and void and without effect."[9]At the time of the issuance
of the above Executive Order in 1945 and of the passage of such Act in 1948,
there was a factual justification for the moratorium. The Philippines was
confronted with an emergency of impressive magnitude at the time of her
liberation from the Japanese military forces in 1945. Business was at a
standstill. Her economy lay prostrate. Measures, radical measures, were
then devised to tide her over until some semblance of normalcy could be
restored and an improvement in her economy noted. No wonder then that
the suspension of enforcement of payment of the obligations then existing
was declared first by executive order and then by legislation. The Supreme
Court was right therefore in rejecting the contention that on its face, the
Moratorium Law was unconstitutional, amounting as it did to the
impairment of the obligation of contracts. Considering the circumstances
confronting the legitimate government upon its return to the Philippines,
some such remedial device was needed and badly so. An unyielding
insistence then on the right to property on the part of the creditors was not
likely to meet with judicial sympathy. Time passed however, and
conditions did change.
When the legislation was before this Court in 1953, the question before it
was its satisfying the rational basis test, not as of the time of its enactment
but as of such date. Clearly, if then it were found unreasonable, the right to
non-impairment of contractual obligations must prevail over the assertion
of community power to remedy an existing evil. The Supreme Court was
convinced that such indeed was the case. As stated in the opinion of Justice
Bautista Angelo: "But we should not lose sight of the fact that these
obligations had been pending since 1945 as a result of the issuance of
Executive Orders Nos. 25 and 32 and at present their enforcement is still
inhibited because of the enactment of Republic Act No. 342 and would
continue to be unenforceable during the eight-year period granted to
prewar debtors to afford them an opportunity to rehabilitate themselves,
which in plain language means that the creditors would have to observe a
vigil of at least twelve (12) years before they could affect a liquidation of
their investment dating as far back as 1941. This period seems to us
unreasonable, if not oppressive. While the purpose of Congress is
plausible, and should be commended, the relief accorded works injustice to
creditors who are practically left at the mercy of the debtors. Their hope to
effect collection becomes extremely remote, more so if the credits are
unsecured. And the injustice is more patent when, under the law, the
debtor is not even required to pay interest during the operation of the relief,
unlike similar statutes in the United States."[10] The conclusion to which the
foregoing considerations inevitably led was that as of the time of
adjudication, it was apparent that Republic Act No. 342 could not survive
the test of validity. Executive Order No. 32 should likewise be
nullified. That before the decision they were not constitutionally infirm was
admitted expressly. There is all the more reason then to yield assent to the
now prevailing principle that the existence of a statute or executive order
prior to its being adjudged void is an operative fact to which legal
consequences are attached.
3. Precisely though because of the judicial recognition that moratorium
was a valid governmental response to the plight of the debtors who were
war sufferers, this Court has made clear its view in a series of cases
impressive in their number and unanimity that during the eight-year period
that Executive Order No. 32 and Republic Act No. 342 were in force,
prescription did not run. So it has been held from Day v. Court of First
Instance,[11] decided in 1954, to Republic v. Hernaez,[12] handed down only
last year. What is deplorable is that as of the time of the lower court
decision on January 27, 1960, at least eight decisions had left no doubt as to
the prescriptive period being tolled in the meanwhile prior to such
adjudication of invalidity.[13] Speaking of the opposite view entertained by
the lower court, the present Chief Justice, in Liboro v. Finance and Mining
Investments Corp.[14] has categorized it as having been "explicitly and
consistently rejected by this Court."[15]
The error of the lower court in sustaining plaintiff's suit is thus
manifest. From July 19, 1944, when her loan matured, to July 13, 1959,
when extra-judicial foreclosure proceedings were started by appellant
Bank, the time consumed is six days short of fifteen years. The prescriptive
period was tolled, however, from March 10, 1945, the effectivity of
Executive Order No. 32, to May 18, 1953, when the decision of Rutter v.
Esteban was promulgated, covering eight years, two months and eight
days. Obviously then, when resort was had extra-judicially to the
foreclosure of the mortgage obligation, there was time to spare before
prescription could be availed of as a defense.
WHEREFORE, the decision of January 27, 1960 is reversed and the suit
of plaintiff filed August 10, 1959 dismissed. No costs.
Concepcion, C.J., Reyes, J.B.L., Dizon, Makalintal, Zaldivar, Ruiz
Castro, Teehankee, Barredo, Villamor, and Makasiar, JJ., concur.
 Gregorio Honasan II petitioner vs.
The Panel of Investigating Prosecutors
Of the Department of Justice
G.R.No. 159747 April 13,2004

Lessons Applicable: Rule on Interpretative Regulations (persons), Powers of the Ombudsman

(consti), concurrent jurisdiction of the Ombudsman and the DOJ to conduct preliminary investigation
(consti)

Law Applicable: Section 13, Article XI of the Constitution, Art. 2 Civil Code

Facts:
 August 4, 2003: CIDG-PNP/P Director Edguardo Matillano filed an affidavit-complaint with the
Department of Justice (DOJ) which contains the following in part:
o July 27, 2003: crime of coup d’ etat was committed by military personnel who occupied Oakwood and
Senator Gregorio “Gringo” Honasan, II
o On or about 11 p.m. June 4,2003: A meeting was held and presided by Senator Honasan in a house
located in San Juan, Metro Manila
o Early morning of July 27, 2003: Capt. Gerardo Gambala, in behalf of the military rebels occupying
Oakwood, made a public statement aired on national television, stating their withdrawal of support to
the chain of command of the AFP and the Government of President Gloria Macapagal Arroyo.
Willing to risk their lives to achieve the National Recovery Agenda (NRA) of Senator Honasan which
they believe is the only program that would solve the ills of society.

 Sworn statement of AFP Major Perfecto Ragil stated that:

o June 4, 2003 about 11 pm: Senator Gregorio “Gringo” Honasan arrived with Capt. Turinga to hold the
NRP meeting where they concluded the use of force, violence and armed struggle to achieve the
vision of NRP where a junta will be constituted which will run the new government. They had a blood
compact and that he only participated due to the threat made by Senator Honasan when he said
“Kung kaya nating pumatay sa ating mga kalaban, kaya din nating pumatay sa mga kasamahang
magtataksil.”
o July 27, 2003: He saw on TV that Lieutenant Antonio Trillanes, Captain Gerardo Gambala, Captain
Alejano and some others who were present during the NRP meeting he attended, having a press
conference about their occupation of the Oakwood Hotel. He saw that the letter "I" on the arm bands
and the banner is the same letter "I" in the banner is the same as their blood compact wound.
 August 27, 2003: Senator Honasan appeared with counsel at the DOJ to file a a Motion for
Clarification questioning DOJ's jurisdiction over the case since the imputed acts were committed in
relation to his public office by a group of public officials with Salary Grade 31 which should be
handled by the Office of the Ombudsman and the Sandiganbayan
 Senator Honasan then filed a petition for certiorari under Rule 65 of the Rules of Court against the
DOJ Panel and its members, CIDG-PNP-P/Director Eduardo Matillano and Ombudsman Simeon V.
Marcelo, attributing grave abuse of discretion on the part of the DOJ Panel in issuing the
aforequoted Order of September 10, 2003 directing him to file his respective counter-affidavits and
controverting evidence on the ground that the DOJ has no jurisdiction to conduct the preliminary
investigation

Issues:
1. Whether in regards to Ombudsman-DOJ Circular no. 95-001, the office of the Ombudsman
should deputize the prosecutors of the DOJ to conduct the preliminary investigation.
2. Whether the Ombudsman-DOJ Joint Circular no. 95-001 is ineffective on the ground that it was
not published
 3. Whether the Ombudsman has jurisdiction to conduct the preliminary investigation because the
petitioner is a public officer with salary grade 31 (Grade 27 or Higher) thereby falling within the
jurisdiction of the Sandigan Bayan.

Held: Wherefore, the petition for certiorari is DISMISSED for lack of merit

1. No.
 Ombudsman cases involving criminal offenses may be subdivided into two classes, to wit: (1)
those cognizable by the Sandiganbayan, and (2) those falling under the jurisdiction of the regular
courts. The difference between the two, aside from the category of the courts wherein they are
filed, is on the authority to investigate as distinguished from the authority to prosecute
 The power to investigate or conduct a preliminary investigation on any Ombudsman case may
be exercised by an investigator or prosecutor of the Office of the Ombudsman, or by any
Provincial or City Prosecutor or their assistance, either in their regular capacities or as deputized
Ombudsman prosecutors.
 circular supports the view of the respondent Ombudsman that it is just an internal agreement
between the Ombudsman and the DOJ
 The Constitution, The Ombudsman Act of 1989, Administrative order no. 8 of the office of the
Ombudsman. The prevailing jurisprudence and under the Revised Rules on Criminal Procedure,
All recognize and uphold the concurrent jurisdiction of the Ombudsman and the DOJ to conduct
preliminary investigation on charges filed against public officers and employees.
 The DOJ Panel need not be authorized nor deputized by the Ombudsman to conduct the
preliminary investigation for complaints filed with it because the DOJ's authority to act as the
principal law agency of the government and investigate the commission of crimes under the
Revised Penal Code is derived from the Revised Administrative Code which had been held in
the Natividad case13 as not being contrary to the Constitution. Thus, there is not even a need to
delegate the conduct of the preliminary investigation to an agency which has the jurisdiction to
do so in the first place. However, the Ombudsman may assert its primary jurisdiction at any
stage of the investigation.

2. No.
 In the case of People vs. Que Po Lay, 94 Phil. 640 (1954). The only circulars and regulations which
prescribe a penalty for its violation should be published before becoming effective.
 In the case of Taňada V. Tuvera, 146 Scra 453 (1986), The Honorable Court rules that:
o Interpretative regulations and those merely internal in nature, that is regulating only the personnel of
the administrative agency and not the public, need not be published. Neither is publication required
of the so called letters of instructions issued by the administrative superiors concerning the rules on
guidelines to be followed by their subordinates in performance of their duties.
 OMB-DOJ Joint Circulars no. 95-001 is merely an internal circular between the DOJ and the
office of the Ombudsman, Outlining authority and responsibilities among prosecutors of the DOJ
and of the office of the Ombudsman in the conduct of preliminary investigation. It does not
regulate the conduct of persons or the public, in general.

3. No. Whether or not the offense is within exclusive jurisdiction or not will not resolve the present
petition so as not to pre-empt the result of the investigation conducted by the DOJ Panel.