Statutory Construction Cases

Republic of the Philippines
SUPREME COURT
Manila
EN BANC
G.R. No. 2122 September 13, 1905
PEDRO T. ACOSTA, plaintiff-appellant,

vs.
DAVID FLOR, defendant-appellee.
W.A. Kincaid for appellant.

Hartigan, Marple, Solignac and Gutierrez for appellee.
MAPA, J.:
It is alleged in the complaint that at the municipal elections held on the 1st day of December, 1903, in the town of
Laoag, Province of Ilocos Norte, the plaintiff and the defendant were candidates for the office of municipal president of
the said town; that as a result of the said election the plaintiff was elected to the said office by a majority of 100 votes,
and that notwithstanding this fact the defendant has usurped said office and unlawfully held the same since the plaintiff
was the person entitled to the exercise of said office. The complaint further sets out other acts in regard to illegalities
alleged to have been committed during the election. The prayer of the complaint is to the effect that judgment be
entered against the defendant, excluding him from the exercise of such office and that the plaintiff be declared to be
entitled to the same and that he be given possession thereof, and for such other and further relief as the facts in the
case would warrant in favor of the plaintiff.
The case having proceeded to trial, the plaintiff introduced various witnesses, all and each of whom testified to facts
which, if true, would more or less gravely affect the legality of the election. Not a single witness, however, confirmed
the allegations contained in the complaint, to the effect that the plaintiff had obtained a majority of 100 votes at the said
election, nor can it be inferred from the evidence introduced by the plaintiff that he, as a result of the said election, or
for any other reason, was entitled to the office of municipal president of Laoag, now held by the defendant.
In view of the evidence introduced at the trial by the plaintiff, and before the defendant had presented his, the court, on
the latter's motion, acquitted the defendant, imposing the costs upon the plaintiff. The court based its action upon the
following grounds: (1) That the plaintiff could not maintain the action brought by him because he had failed to establish
his alleged right to the exercise of the office in question; and (2) that there was no necessity to inquire into the right of
the defendant to hold the said office for the reason that this question had already been determined by the provincial
board after a consideration of the various protests presented to it in regard to irregularities committed during the last
election held at Laoag for the office of municipal president and other municipal officials, and for the further reason that
the presumption is that a person holding a public office was duly appointed or elected thereto.
The plaintiff excepted to his ruling of the court, moved for a new trial, and thereafter brought the case to this court for
review. An examination of the evidence of record supports the finding of the court below to the effect that the plaintiff
has failed to prove in any way, shape, or form that he was entitled to the office in question, as alleged by him in his
complaint. There is no dispute upon this question. The appellant, himself, when the motion of the defendant to dismiss
was argued, and from the decision of which he appealed to this court, clearly admitted that he had failed to establish
his right to the exercise of the office in question. (Page 17 of the bill of exceptions.) And on page 52 of his brief, he also
assumes that he had been unable to establish his alleged right to the office in question.
The question that we have to decide, therefore, is whether, notwithstanding what has already been said, and
notwithstanding the fact that the plaintiff has failed to show that he had any right to the office of municipal president of
Laoag, he can maintain an action such as this for the purpose of excluding the defendant from the exercise of said
office on account of illegalities alleged to have been committed in the elections.
The right to maintain such an action is especially and expressly governed by the provisions of sections 197 to 216 of
the Code of Civil Procedure.
The code, after enumerating in sections 197 and 198 the cases in which such an action may be brought and the
persons against whom they may be brought, goes on to determine with careful distinction those who have the right to
maintain such action.
Section 199 provides that "the Attorney-General of the Islands, or the fiscal of any province, when directed by the Chief
Executive of the Islands, must commence any such action; and when upon the complaint or otherwise he has good
reason to believe that any case specified in the two preceding sections can be established by proof, he must
commence such action."
Section 200 provides that "the Attorney-General of the Islands or the fiscal for a province, may, at his own instance,
bring such an action, or he may, on leave of the court in which the action is to be commenced, or a judge thereof in
vacation, bring the action upon the relation of and at the request of another person; but, if the action is brought at the
request of and upon the relation of another person, the officer bringing it may require an indemnity for expenses and
costs of the action, to be given to him by the party at whose request and upon whose relation the same is brought,
before commencing it."
Finally, section 201, under the heading "An individual may commence such action," provides as follows: "A person
claiming to be entitled to a public office, unlawfully held and exercised by another, may bring an action therefor."
If the legislator had intended to give to all citizens alike the right to maintain an action for usurpation of public office, he
would have plainly said so in order to avoid doubt on a subject of such far-reaching importance. A simple provision
would have sufficed for this purpose. Far from it, the legislator has on the contrary especially and specifically provided
in sections 199, 200, and 201 who must and who may bring such actions; and it is very clear that it was his intention to
give such right to those expressly mentioned in the above-cited sections and to no other, following the well-known rule
of law "inclusio unius est exclusio alterius." It has been noticed that the above referred to three sections only mention
the Attorney-General, the provincial fiscal, and the individual claiming to be entitled to the office unlawfully held and
exercised by another. It is to be inferred from this last provision that the individual who does not claim to have such a
right can not bring an action for usurpation of public office.
This inference is supported by the provisions of section 202 which says that when the action is against a person for
usurping an office, the complaint shall set forth the name of the person who claims to be entitled thereto, with an
averment of his right to the same. Why should this be required as an essential requisite if it were not necessary that the
individual bringing the action should claim the right to exercise the office in question?
Our opinion is that the law has reserved to the Attorney-General and to the provincial fiscals, as the case may be, the
right to bring such action, an in but one case does the law authorize an individual to bring such an action, to wit, when
that person claims to have the right to the exercise of the office unlawfully held and exercised by another. Aside from
this case an individual can not maintain such action. The law, in our opinion, does not allow of any other construction. If
an individual, whether or not he has the right to the office alleged to have been usurped by another were to be
permitted to maintain such an action, it would serve no purpose and section 201 would be evidently superfluous. It
would be a useless and redundant provision of the code.
As a consequence of what has been said no individual can bring a civil action relating to the usurpation of a public
office without averring that he has a right to the same; and at any stage of the proceedings, if it be shown that such
individual has no such right, the action may be dismissed because there is no legal ground upon which it may proceed
when the fundamental basis of such action is destroyed as is the case here. This is what actually happened in this
case. After all of the evidence presented by the plaintiff had been introduced, it was found, and he himself so admitted
that he had failed to establish in any way, shape, or form that he had any right to the office of municipal president of the
town of Laoag as he had alleged in his complaint without foundation for such allegation. Consequently the judge very
properly acquitted the defendant of the complaint.
The appellant contends that the court below should have first inquired into the right of the defendant to the office in
question and that no other question can be raised or investigated until this point has been determined, and alleges that
the question of the right of the plaintiff to the said office does not arise until it has been determined that the defendant is
not entitled to the exercise of such office. In support of his contention he relies upon the provisions of section 202 of the
Code of Civil Procedure.
This section provides as follows: "When the action is against a person for usurping an office, the complaint shall set
forth the name of the person who claims to be entitled thereto, with an averment of his right to the same; and that the
defendant is unlawfully in possession of the same; and judgment may be rendered upon the right of the defendant, and
also upon the right of the person so averred to be entitled, or only upon the right of the defendant, as justice requires."
From the words above italicized the appellant infers that the court below should have first passed upon the right of the
defendant and afterwards upon the right of the plaintiff. In our opinion this should be done at the same time and in the
same judgment. It is immaterial what method the court may follow in the statement and determination of the questions
in the rendition of his judgment because even though the court may pass upon the right of the plaintiff first, and the
right of the defendant afterwards, or vice versa, this procedure would not vitiate the judgment, provided the court does
not fail to state therein what the rights of the contending parties to the office are. But all of this, of course, presupposes
that the action has been properly brought and duly prosecuted to a judgment. This, at the same time, presupposes that
the plaintiff had a right to maintain his action upon the evidence submitted by him at the trial. It is impossible to
prosecute a suit without a cause of action. Therefore, whenever before judgment it is conclusively proven that the
plaintiff has no right to maintain the action since he has not the essential conditions required by law in order to bring
and maintain such action, his complaint should be dismissed and it becomes unnecessary to pass upon the right of the
defendant who has a perfect right to the undisturbed possession of his office, unless action is brought by a person
having a right to maintain the same under the law.
It may be said that under section 202 the court may only pass upon the right of the defendant when the justice of the
case so demands. This is true, but this only refers to cases where the action is brought by the Attorney-General or by
the provincial fiscal, as the case may be. In such cases it is not necessary that there be a person claiming to be entitled
to the office alleged to have been usurped, because although there be no such person, as in the case of a vacant
office, for instance, the fiscal could and even should bring such action against the person usurping the office in
accordance with the provisions of sections 200 and 199, respectively, as the case may be. The manner in which
judgment should be rendered according to section 202 perfectly meets the various cases provided for in the three
preceding sections; and it becomes the duty of the court to pass upon the rights of the defendants only whenever it is
not an essential requisite for the due prosecution of the action that there be a person claiming to be entitled to the
office thus usurped, something which only happens where the Attorney-General or the fiscal of any province brings the
action against the usurper.
As a result of the foregoing, we can not here pass upon the validity or nullity of the election of the defendant, for the
reason, among others which it is not necessary to state here, that the defendant has no right to maintain such an action
as this.
The order of the court below appealed from, is hereby affirmed. After the expiration of twenty days let judgment be
entered in accordance herewith and let the case be remanded to the court from whence it came for further proceedings
in accordance with the law. So ordered.
Arellano, C.J., Torres, Johnson, and Carson, JJ., concur.

Willard, J., did not sit in this case.
SUPREME COURT
Manila
THIRD DIVISION
G.R. No. 181517 July 6, 2015
GREEN STAR EXPRESS, INC. and FRUTO SAYSON, JR., Petitioners,

vs.
NISSIN-UNIVERSAL ROBINA CORPORATION, Respondent.
DECISION
PERALTA, J.:
For resolution is a Petition for Review under Rule 45 of the Rules of Court which petitioners Green Star Express, Inc.
and Fruto Sayson, Jr. brought before the Court, assailing the Decision 1 of the Court of Appeals (CA) dated September
17, 2007 and its Resolution2 dated January 22, 2008 in CA-G.R. SP No. 86824. The CA nullified the Resolution dated
May 5, 2004 of the Regional Trial Court (RTC) of San Pedro, Laguna, Branch 31, in Civil Case No. SPL-0969, and
dismissed the complaint for lack of jurisdiction.
The following are the antecedents of the case:
On February 25, 2003, a Mitsubishi L-300 van which Universal Robina Corporation ( URC) owned figured in a vehicular
accident with petitioner Green Star Express, Inc.' s (Green Star) passenger bus, resulting in the death of the van's
driver. Thus, the bus driver, petitioner Fruto Sayson, Jr., was charged with the crime of reckless imprudence resulting
in homicide.
Thereafter, Green Star sent a demand letter to respondent NissinUniversal Robina Corporation (NURC) for the repair
of its passenger bus amounting to ₱567, 070.68. NURC denied any liability therefore and argued that the criminal case
shall determine the ultimate liabilities of the parties. Thereafter, the criminal case was dismissed without prejudice, due
to insufficiency of evidence.
Sayson and Green Star then filed a complaint for damages against NURC before the R TC of San Pedro, Laguna.
Francis Tinio, one of NURC's employees, was the one who received the summons. On February 6, 2004, NURC filed a
Motion to Dismiss claiming lack of jurisdiction due to improper service.
On May 5, 2004, the RTC issued a Resolution denying NURC's motion to dismiss. It ruled that there was substantial
compliance because there was actual receipt of the summons by NURC. The dispositive portion of said Resolution
thus reads:
WHEREFORE, in view of the foregoing, defendant's "Motion to Dismiss" is hereby DENIED.3
Since its Motion for Reconsideration was denied, NURC elevated the case to the CA via a Petition for Certiorari. On
September 17, 2007, the CA reversed the RTC ruling, hence:
WHEREFORE, the instant Petition for Certiorari is GRANTED. The assailed Resolutions, dated May 5, 2004 and dated
July 26, 2004, of the Regional Trial Court of San Pedro, Laguna, Branch 31, in Civil Case No. SPL-0969, are hereby
NULLIFIED and a new one rendered granting Petitioner's Motion to Dismiss, dated February 3, 2004. Private
Respondents' Amended Complaint for Damages filed against Petitioner Nissin-Universal Robina Corporation is
accordingly dismissed for lack of jurisdiction.
SO ORDERED.4
Aggrieved, Green Star and Sayson moved for reconsideration, but the same was denied. Hence, this petition.
The lone issue is whether or not the summons was properly served on NURC, vesting the trial court with jurisdiction.
The petition is benefit of merit.
It is a well-established rule that the rules on service of summons upon a domestic private juridical entity must be strictly
complied with. Otherwise, the court cannot be said to have acquired jurisdiction over the person of the defendant.5
NURC maintains that the RTC did not acquire jurisdiction over it as the summons was received by its cost accountant,
Francis Tinio. It argues that under Section 11, Rule 14 of the 1997 Rules of Court, which provides the rule on service
1âwphi1
of summons upon a juridical entity, in cases where the defendant is a domestic corporation like NURC, summons may
be served only through its officers.6 Thus:
Section 11. Service upon domestic private juridical entity. – When the defendant is a corporation, partnership or
association organized under the laws of the Philippines with a juridical personality, service may be made on the
president, managing partner, general manager, corporate secretary, treasurer, or in-house counsel.7
This provision replaced the former Section 13, Rule 14 of the 1964 Rules of Court which read:
Section 13. Service upon private domestic corporation or partnership. - If the defendant is a corporation organized
under the laws of the Philippines or a partnership duly registered, service may be made on the president, manager,
secretary, cashier, agent, or any of its directors.8
In the past, the Court upheld service of summons upon a construction project manager, a corporation’s assistant
manager, and ordinary clerk of a corporation, private secretary of corporate executives, retained counsel, and officials
who had control over the operations of the corporation like the assistant general manager or the corporation’s Chief
Finance and Administrative Officer. The Court then considered said persons as "agent" within the contemplation of the
old rule. Notably, under the new Rules, service of summons upon an agent of the corporation is no longer
authorized,9 The rule now likewise states "general manager" instead of "manager"; "corporate secretary" instead of
merely "secretary"; and "treasure" instead of "cashier."10 It has now become restricted, limited, and exclusive only to the
persons enumerated in the aforementioned provision, following the rule in statutory construction that the express
mention of one person excludes all others, or expression unions est exclusion alterius. Service must, therefore, be
made only on the person expressly listed in the rules.11 If the revision committee intended to liberalize the rule on
service of summons, it could have easily done so by clear and concise language.12
Here, Tinio, a, member of NURC’s accounting staff, received the summons on January 22, 2004. Green star claims
that it was received upon instruction of Junadette Avedillo. The general manager of the corporation. Such fact,
however, does not appear in the Sheriff’s Return.13 The Return did not even state whether Avedillo was present at the
time the summons was received by Tinio, the supposed assistant manager. Green Star further avers that the sheriff
tendered the summons, but Avedillo simply refused to sign and receive the same. She then allegedly instructed Tinio to
just receive it in her behalf. However, Green Star never presented said sheriff as witness during the hearing of NURC’s
motion to dismiss to attest to said claim. And while the sheriff executed an affidavit which appears to support such
allegation, the same was likewise not presented as evidence. It was only when the case was already before the CA
that said affidavit first surfaced. Since the service of summons was made on a cost accountant, which is not one of the
designated persons under Section 11 of Rule 14, the trial court did not vadily acquire jurisdiction over NURC,14 although
the corporation may have actually received the summons.15 To rule otherwise will be an outright circumvention of the
rules, aggravating further the delay in the administration of justice.16
At this juncture, it is worth emphasizing that notice to enable the other party to be heard and to present evidence is not
a mere technicality or a trivial matter in any administrative or judicial proceedings. The service of summons is a vital
and indispensable ingredient of due process. Corporations would be easily deprived of their right to present their
defense in a multi-million peso suit, if the Court would disregard the mandate of the Rules on the service of summons.17
WHEREFORE, the petition is DENIED. The Court of Appeals Decision dated September 17, 2007 and Resolution
dated January 22, 2008 in CA-G.R. SP No. 86824 are hereby AFFIRMED.
SO ORDERED.
DIOSDADO M. PERALTA**
Associate Justice
WE CONCUR:
TERESITA J. LEONARDO-DE CASTRO*
Associate Justice
JOSE PORTUGAL PEREZ*** ESTELA M. PERLAS-BERNABE***

Associate Justice Associate Justice
MARVIC M.V.F LEONEN*****

Associate Justice
ATTESTATION
I attest that the conclusions in the above Decision had been reached in consultation before the case was assigned to
the writer of the opinion of the Court's Division.
DIOSDADO M. PERALTA
Associate Justice
Acting Chairperson, Third Division
CERTIFICATION
Pursuant to Section 13, Article VIII of the Constitution and the Division Acting Chairperson's Attestation, I certify that
the conclusions in the above Decision had been reached in consultation before the case was assigned to the writer of
the opinion of the Court's Division.
MARIA LOURDES P.A. SERENO

Chief Justice
Footnotes
*
Designated Acting Member in lieu of Associate Justice Martin S. Villarama, Jr., per Raffle dated September
24, 2014.
**
Per Special Order No. 2071 dated June 23, 2015.
Designated Acting Member in lieu of Associate Justice Bienvenido L. Reyes, per Special Order No. 2084
***
dated June 29, 2015.
Designated Acting Member in lieu of Associate Justice Presbitero J. Velasco, Jr., per Special Order No. 2072
****
dated June 23, 2015.
Designated Acting Member in lieu of Associate Justice Francis H. Jardeleza, per Special Order No. 2095-A
*****
dated July 1, 2015.
1
Penned by Associate Justice Noel G. Tijam, with Associate Justices Martin S. Villarama, Jr. (now a member of
this Court), and Sesinando E. Villon; concurring; rollo, pp. 21-29.
2
Id. at 30-31.
3
Rollo, p. 23.
4
Id. at 29. (Emphasis in the original)
5
Atiko Trans, Inc. v. Prudential Guarantee and Assurance, Inc., 67 l Phil. 388, 401 (2011).
6
Cathay Metal Corporation v. Laguna West Multi-Purpose Cooperative, Inc., G.R. No. 172204, July 2, 2014.
7
Emphasis ours.
8
Emphasis ours
9
E.B. Villarosa & Partner Co., ltd v. Imperial Development Corporation, 370 Phil. 921, 928(1999)
10
Spouses Mason v. CA, 459 Phil. 689, 697 (2003).
11
Dole Philippines, Inc. v. All Season Farm, Corp., 579 Phil. 700, 705 (2008).
12
E.B. Villarosa & Partner Co., ltd. V. Imperial Development Corporation, supra note 9, at 927.
13
Rollo, p. 44.
14
Dole Philippines, Inc. v. All Season Farm, Corp., supra note 11, at 704.
15
Spouses Mason v. CA, supra note 10, at 697; 699.
16
Development Corporation supra note 9, at 931
17
Spouses Mason v. CA, supra note 10, at 699.
SUPREME COURT
Manila
EN BANC
G.R. No. 172087 March 15, 2011
PHILIPPINE AMUSEMENT AND GAMING CORPORATION (PAGCOR), Petitioner,

vs.
THE BUREAU OF INTERNAL REVENUE (BIR), represented herein by HON. JOSE MARIO BUÑAG, in his official
capacity as COMMISSIONER OF INTERNAL REVENUE, Public Respondent,
JOHN DOE and JANE DOE, who are persons acting for, in behalf, or under the authority of Respondent.Public
and Private Respondents.
DECISION
PERALTA, J.:
For resolution of this Court is the Petition for Certiorari and Prohibition1 with prayer for the issuance of a Temporary
Restraining Order and/or Preliminary Injunction, dated April 17, 2006, of petitioner Philippine Amusement and Gaming
Corporation (PAGCOR), seeking the declaration of nullity of Section 1 of Republic Act (R.A.) No. 9337 insofar as it
amends Section 27 (c) of the National Internal Revenue Code of 1997, by excluding petitioner from exemption from
corporate income tax for being repugnant to Sections 1 and 10 of Article III of the Constitution. Petitioner further seeks
to prohibit the implementation of Bureau of Internal Revenue (BIR) Revenue Regulations No. 16-2005 for being
contrary to law.
The undisputed facts follow.
PAGCOR was created pursuant to Presidential Decree (P.D.) No. 1067-A2 on January 1, 1977. Simultaneous to its
creation, P.D. No. 1067-B3 (supplementing P.D. No. 1067-A) was issued exempting PAGCOR from the payment of any
type of tax, except a franchise tax of five percent (5%) of the gross revenue.4 Thereafter, on June 2, 1978, P.D. No.
1399 was issued expanding the scope of PAGCOR's exemption.5
To consolidate the laws pertaining to the franchise and powers of PAGCOR, P.D. No. 18696 was issued. Section 13
thereof reads as follows:
Sec. 13. Exemptions. — x x x
(1) Customs Duties, taxes and other imposts on importations. - All importations of equipment, vehicles,
automobiles, boats, ships, barges, aircraft and such other gambling paraphernalia, including
accessories or related facilities, for the sole and exclusive use of the casinos, the proper and efficient
management and administration thereof and such other clubs, recreation or amusement places to be
established under and by virtue of this Franchise shall be exempt from the payment of duties, taxes and
other imposts, including all kinds of fees, levies, or charges of any kind or nature.
Vessels and/or accessory ferry boats imported or to be imported by any corporation having existing
contractual arrangements with the Corporation, for the sole and exclusive use of the casino or to be
used to service the operations and requirements of the casino, shall likewise be totally exempt from the
payment of all customs duties, taxes and other imposts, including all kinds of fees, levies, assessments
or charges of any kind or nature, whether National or Local.
(2) Income and other taxes. - (a) Franchise Holder: No tax of any kind or form, income or otherwise, as
well as fees, charges, or levies of whatever nature, whether National or Local, shall be assessed and
collected under this Franchise from the Corporation; nor shall any form of tax or charge attach in any
way to the earnings of the Corporation, except a Franchise Tax of five percent (5%)of the gross
revenue or earnings derived by the Corporation from its operation under this Franchise. Such tax shall
be due and payable quarterly to the National Government and shall be in lieu of all kinds of taxes,
levies, fees or assessments of any kind, nature or description, levied, established, or collected by any
municipal, provincial or national government authority.
(b) Others: The exemption herein granted for earnings derived from the operations conducted
under the franchise, specifically from the payment of any tax, income or otherwise, as well as
any form of charges, fees or levies, shall inure to the benefit of and extend to corporation(s),
association(s), agency(ies), or individual(s) with whom the Corporation or operator has any
contractual relationship in connection with the operations of the casino(s) authorized to be
conducted under this Franchise and to those receiving compensation or other remuneration
from the Corporation as a result of essential facilities furnished and/or technical services
rendered to the Corporation or operator.
The fee or remuneration of foreign entertainers contracted by the Corporation or operator in pursuance
of this provision shall be free of any tax.
(3) Dividend Income. − Notwithstanding any provision of law to the contrary, in the event the
Corporation should declare a cash dividend income corresponding to the participation of the private
sector shall, as an incentive to the beneficiaries, be subject only to a final flat income rate of ten percent
(10%) of the regular income tax rates. The dividend income shall not in such case be considered as
part of the beneficiaries' taxable income; provided, however, that such dividend income shall be totally
exempted from income or other form of taxes if invested within six (6) months from the date the
dividend income is received in the following:
(a) operation of the casino(s) or investments in any affiliate activity that will ultimately redound
to the benefit of the Corporation; or any other corporation with whom the Corporation has any
existing arrangements in connection with or related to the operations of the casino(s);
(b) Government bonds, securities, treasury notes, or government debentures; or
(c) BOI-registered or export-oriented corporation(s).7
PAGCOR's tax exemption was removed in June 1984 through P.D. No. 1931, but it was later restored by Letter of
Instruction No. 1430, which was issued in September 1984.
On January 1, 1998, R.A. No. 8424,8 otherwise known as the National Internal Revenue Code of 1997, took effect.
Section 27 (c) of R.A. No. 8424 provides that government-owned and controlled corporations (GOCCs) shall pay
corporate income tax, except petitioner PAGCOR, the Government Service and Insurance Corporation, the Social
Security System, the Philippine Health Insurance Corporation, and the Philippine Charity Sweepstakes Office, thus:
(c) Government-owned or Controlled Corporations, Agencies or Instrumentalities. - The provisions of existing special
general laws to the contrary notwithstanding, all corporations, agencies or instrumentalities owned and controlled by
the Government, except the Government Service and Insurance Corporation (GSIS), the Social Security System
(SSS), the Philippine Health Insurance Corporation (PHIC), the Philippine Charity Sweepstakes Office (PCSO), and the
Philippine Amusement and Gaming Corporation (PAGCOR), shall pay such rate of tax upon their taxable income as
are imposed by this Section upon corporations or associations engaged in similar business, industry, or activity.9
With the enactment of R.A. No. 933710 on May 24, 2005, certain sections of the National Internal Revenue Code of
1997 were amended. The particular amendment that is at issue in this case is Section 1 of R.A. No. 9337, which
amended Section 27 (c) of the National Internal Revenue Code of 1997 by excluding PAGCOR from the enumeration
of GOCCs that are exempt from payment of corporate income tax, thus:
(c) Government-owned or Controlled Corporations, Agencies or Instrumentalities. - The provisions of existing special
general laws to the contrary notwithstanding, all corporations, agencies, or instrumentalities owned and controlled by
(SSS), the Philippine Health Insurance Corporation (PHIC), and the Philippine Charity Sweepstakes Office (PCSO),
shall pay such rate of tax upon their taxable income as are imposed by this Section upon corporations or associations
engaged in similar business, industry, or activity.
Different groups came to this Court via petitions for certiorari and prohibition11 assailing the validity and constitutionality
of R.A. No. 9337, in particular:
1) Section 4, which imposes a 10% Value Added Tax (VAT) on sale of goods and properties; Section 5, which
imposes a 10% VAT on importation of goods; and Section 6, which imposes a 10% VAT on sale of services
and use or lease of properties, all contain a uniform proviso authorizing the President, upon the
recommendation of the Secretary of Finance, to raise the VAT rate to 12%. The said provisions were alleged to
be violative of Section 28 (2), Article VI of the Constitution, which section vests in Congress the exclusive
authority to fix the rate of taxes, and of Section 1, Article III of the Constitution on due process, as well as of
Section 26 (2), Article VI of the Constitution, which section provides for the "no amendment rule" upon the last
reading of a bill;
2) Sections 8 and 12 were alleged to be violative of Section 1, Article III of the Constitution, or the guarantee of
equal protection of the laws, and Section 28 (1), Article VI of the Constitution; and
3) other technical aspects of the passage of the law, questioning the manner it was passed.
On September 1, 2005, the Court dismissed all the petitions and upheld the constitutionality of R.A. No. 9337.12
On the same date, respondent BIR issued Revenue Regulations (RR) No. 16-2005,13 specifically identifying PAGCOR
as one of the franchisees subject to 10% VAT imposed under Section 108 of the National Internal Revenue Code of
1997, as amended by R.A. No. 9337. The said revenue regulation, in part, reads:
Sec. 4. 108-3. Definitions and Specific Rules on Selected Services. —
xxxx
(h) x x x
Gross Receipts of all other franchisees, other than those covered by Sec. 119 of the Tax Code, regardless of how their
franchisees may have been granted, shall be subject to the 10% VAT imposed under Sec.108 of the Tax Code. This
includes, among others, the Philippine Amusement and Gaming Corporation (PAGCOR), and its licensees or
franchisees.
Hence, the present petition for certiorari.
PAGCOR raises the following issues:
WHETHER OR NOT RA 9337, SECTION 1 (C) IS NULL AND VOID AB INITIO FOR BEING REPUGNANT TO THE
EQUAL PROTECTION [CLAUSE] EMBODIED IN SECTION 1, ARTICLE III OF THE 1987 CONSTITUTION.
II
WHETHER OR NOT RA 9337, SECTION 1 (C) IS NULL AND VOID AB INITIO FOR BEING REPUGNANT TO THE
NON-IMPAIRMENT [CLAUSE] EMBODIED IN SECTION 10, ARTICLE III OF THE 1987 CONSTITUTION.
III
WHETHER OR NOT RR 16-2005, SECTION 4.108-3, PARAGRAPH (H) IS NULL AND VOID AB INITIO FOR BEING
BEYOND THE SCOPE OF THE BASIC LAW, RA 8424, SECTION 108, INSOFAR AS THE SAID REGULATION
IMPOSED VAT ON THE SERVICES OF THE PETITIONER AS WELL AS PETITIONER’S LICENSEES OR
FRANCHISEES WHEN THE BASIC LAW, AS INTERPRETED BY APPLICABLE JURISPRUDENCE, DOES NOT
IMPOSE VAT ON PETITIONER OR ON PETITIONER’S LICENSEES OR FRANCHISEES.14
The BIR, in its Comment15 dated December 29, 2006, counters:

I
SECTION 1 OF R.A. NO. 9337 AND SECTION 13 (2) OF P.D. 1869 ARE BOTH VALID AND CONSTITUTIONAL
PROVISIONS OF LAWS THAT SHOULD BE HARMONIOUSLY CONSTRUED TOGETHER SO AS TO GIVE EFFECT
TO ALL OF THEIR PROVISIONS WHENEVER POSSIBLE.
II
SECTION 1 OF R.A. NO. 9337 IS NOT VIOLATIVE OF SECTION 1 AND SECTION 10, ARTICLE III OF THE 1987
CONSTITUTION.
III
BIR REVENUE REGULATIONS ARE PRESUMED VALID AND CONSTITUTIONAL UNTIL STRICKEN DOWN BY
LAWFUL AUTHORITIES.
The Office of the Solicitor General (OSG), by way of Manifestation In Lieu of Comment,16 concurred with the arguments
of the petitioner. It added that although the State is free to select the subjects of taxation and that the inequity resulting
from singling out a particular class for taxation or exemption is not an infringement of the constitutional limitation, a tax
law must operate with the same force and effect to all persons, firms and corporations placed in a similar situation.
Furthermore, according to the OSG, public respondent BIR exceeded its statutory authority when it enacted RR No.
16-2005, because the latter's provisions are contrary to the mandates of P.D. No. 1869 in relation to R.A. No. 9337.
The main issue is whether or not PAGCOR is still exempt from corporate income tax and VAT with the enactment of
R.A. No. 9337.
After a careful study of the positions presented by the parties, this Court finds the petition partly meritorious.
Under Section 1 of R.A. No. 9337, amending Section 27 (c) of the National Internal Revenue Code of 1977, petitioner
is no longer exempt from corporate income tax as it has been effectively omitted from the list of GOCCs that are
exempt from it. Petitioner argues that such omission is unconstitutional, as it is violative of its right to equal protection
of the laws under Section 1, Article III of the Constitution:
Sec. 1. No person shall be deprived of life, liberty, or property without due process of law, nor shall any person be
denied the equal protection of the laws.
In City of Manila v. Laguio, Jr.,17 this Court expounded the meaning and scope of equal protection, thus:
Equal protection requires that all persons or things similarly situated should be treated alike, both as to rights conferred
and responsibilities imposed. Similar subjects, in other words, should not be treated differently, so as to give undue
favor to some and unjustly discriminate against others. The guarantee means that no person or class of persons shall
be denied the same protection of laws which is enjoyed by other persons or other classes in like circumstances. The
"equal protection of the laws is a pledge of the protection of equal laws." It limits governmental discrimination. The
equal protection clause extends to artificial persons but only insofar as their property is concerned.
xxxx
Legislative bodies are allowed to classify the subjects of legislation. If the classification is reasonable, the law may
operate only on some and not all of the people without violating the equal protection clause. The classification must, as
an indispensable requisite, not be arbitrary. To be valid, it must conform to the following requirements:
1) It must be based on substantial distinctions.
2) It must be germane to the purposes of the law.
3) It must not be limited to existing conditions only.
4) It must apply equally to all members of the class.18

It is not contested that before the enactment of R.A. No. 9337, petitioner was one of the five GOCCs exempted from
payment of corporate income tax as shown in R.A. No. 8424, Section 27 (c) of which, reads:
(c) Government-owned or Controlled Corporations, Agencies or Instrumentalities. - The provisions of existing special or
general laws to the contrary notwithstanding, all corporations, agencies or instrumentalities owned and controlled by
(SSS), the Philippine Health Insurance Corporation (PHIC), the Philippine Charity Sweepstakes Office (PCSO), and the
Philippine Amusement and Gaming Corporation (PAGCOR), shall pay such rate of tax upon their taxable income as
are imposed by this Section upon corporations or associations engaged in similar business, industry, or activity.19
A perusal of the legislative records of the Bicameral Conference Meeting of the Committee on Ways on Means dated
October 27, 1997 would show that the exemption of PAGCOR from the payment of corporate income tax was due to
the acquiescence of the Committee on Ways on Means to the request of PAGCOR that it be exempt from such
tax.20 The records of the Bicameral Conference Meeting reveal:
HON. R. DIAZ. The other thing, sir, is we --- I noticed we imposed a tax on lotto winnings.
CHAIRMAN ENRILE. Wala na, tinanggal na namin yon.
HON. R. DIAZ. Tinanggal na ba natin yon?
CHAIRMAN ENRILE. Oo.
HON. R. DIAZ. Because I was wondering whether we covered the tax on --- Whether on a universal basis, we included
a tax on cockfighting winnings.
CHAIRMAN ENRILE. No, we removed the ---
HON. R. DIAZ. I . . . (inaudible) natin yong lotto?
CHAIRMAN ENRILE. Pati PAGCOR tinanggal upon request.
CHAIRMAN JAVIER. Yeah, Philippine Insurance Commission.
CHAIRMAN ENRILE. Philippine Insurance --- Health, health ba. Yon ang request ng Chairman, I will accept. (laughter)
Pag-Pag-ibig yon, maliliit na sa tao yon.
HON. ROXAS. Mr. Chairman, I wonder if in the revenue gainers if we factored in an amount that would reflect the VAT
and other sales taxes---
CHAIRMAN ENRILE. No, we’re talking of this measure only. We will not --- (discontinued)
HON. ROXAS. No, no, no, no, from the --- arising from the exemption. Assuming that when we release the money into
the hands of the public, they will not use that to --- for wallpaper. They will spend that eh, Mr. Chairman. So when they
spend that---
CHAIRMAN ENRILE. There’s a VAT.
HON. ROXAS. There will be a VAT and there will be other sales taxes no. Is there a quantification? Is there an
approximation?
CHAIRMAN JAVIER. Not anything.
HON. ROXAS. So, in effect, we have sterilized that entire seven billion. In effect, it is not circulating in the economy
which is unrealistic.
CHAIRMAN ENRILE. It does, it does, because this is taken and spent by government, somebody receives it in the form
of wages and supplies and other services and other goods. They are not being taken from the public and stored in a
vault.
CHAIRMAN JAVIER. That 7.7 loss because of tax exemption. That will be extra income for the taxpayers.
HON. ROXAS. Precisely, so they will be spending it.21
The discussion above bears out that under R.A. No. 8424, the exemption of PAGCOR from paying corporate income
tax was not based on a classification showing substantial distinctions which make for real differences, but to reiterate,
the exemption was granted upon the request of PAGCOR that it be exempt from the payment of corporate income tax.
With the subsequent enactment of R.A. No. 9337, amending R.A. No. 8424, PAGCOR has been excluded from the
enumeration of GOCCs that are exempt from paying corporate income tax. The records of the Bicameral Conference
Meeting dated April 18, 2005, of the Committee on the Disagreeing Provisions of Senate Bill No. 1950 and House Bill
No. 3555, show that it is the legislative intent that PAGCOR be subject to the payment of corporate income tax, thus:
THE CHAIRMAN (SEN. RECTO). Yes, Osmeña, the proponent of the amendment.
SEN. OSMEÑA. Yeah. Mr. Chairman, one of the reasons why we're even considering this VAT bill is we want to show
the world who our creditors, that we are increasing official revenues that go to the national budget. Unfortunately today,
Pagcor is unofficial.
Now, in 2003, I took a quick look this morning, Pagcor had a net income of 9.7 billion after paying some small taxes
that they are subjected to. Of the 9.7 billion, they claim they remitted to national government seven billion. Pagkatapos,
there are other specific remittances like to the Philippine Sports Commission, etc., as mandated by various laws, and
then about 400 million to the President's Social Fund. But all in all, their net profit today should be about 12 billion.
That's why I am questioning this two billion. Because while essentially they claim that the money goes to
government, and I will accept that just for the sake of argument. It does not pass through the appropriation
process. And I think that at least if we can capture 35 percent or 32 percent through the budgetary process,
first, it is reflected in our official income of government which is applied to the national budget, and secondly,
it goes through what is constitutionally mandated as Congress appropriating and defining where the money is
spent and not through a board of directors that has absolutely no accountability.
REP. PUENTEBELLA. Well, with all due respect, Mr. Chairman, follow up lang.
There is wisdom in the comments of my good friend from Cebu, Senator Osmeña.
SEN. OSMEÑA. And Negros.
REP. PUENTEBELLA. And Negros at the same time ay Kasimanwa. But I would not want to put my friends from the
Department of Finance in a difficult position, but may we know your comments on this knowing that as Senator
Osmeña just mentioned, he said, "I accept that that a lot of it is going to spending for basic services," you know, going
to most, I think, supposedly a lot or most of it should go to government spending, social services and the like. What is
your comment on this? This is going to affect a lot of services on the government side.
THE CHAIRMAN (REP. LAPUS). Mr. Chair, Mr. Chair.
SEN. OSMEÑA. It goes from pocket to the other, Monico.
REP. PUENTEBELLA. I know that. But I wanted to ask them, Mr. Senator, because you may have your own pre-
judgment on this and I don't blame you. I don't blame you. And I know you have your own research. But will this not
affect a lot, the disbursements on social services and other?
REP. LOCSIN. Mr. Chairman. Mr. Chairman, if I can add to that question also. Wouldn't it be easier for you to explain
to, say, foreign creditors, how do you explain to them that if there is a fiscal gap some of our richest corporations has
[been] spared [from] taxation by the government which is one rich source of revenues. Now, why do you save, why do
you spare certain government corporations on that, like Pagcor? So, would it be easier for you to make an argument if
everything was exposed to taxation?
REP. TEVES. Mr. Chair, please.
THE CHAIRMAN (REP. LAPUS). Can we ask the DOF to respond to those before we call Congressman Teves?
MR. PURISIMA. Thank you, Mr. Chair.
Yes, from definitely improving the collection, it will help us because it will then enter as an official revenue
although when dividends declare it also goes in as other income. (sic)
xxxx
REP. TEVES. Mr. Chairman.
xxxx
THE CHAIRMAN (REP. LAPUS). Congressman Teves.
REP. TEVES. Yeah. Pagcor is controlled under Section 27, that is on income tax. Now, we are talking here on
value-added tax. Do you mean to say we are going to amend it from income tax to value-added tax, as far as
Pagcor is concerned?
THE CHAIRMAN (SEN. RECTO). No. We are just amending that section with regard to the exemption from
income tax of Pagcor.
xxxx
REP. NOGRALES. Mr. Chairman, Mr. Chairman. Mr. Chairman.
THE CHAIRMAN (REP. LAPUS). Congressman Nograles.
REP. NOGRALES. Just a point of inquiry from the Chair. What exactly are the functions of Pagcor that are VATable?
What will we VAT in Pagcor?
THE CHAIRMAN (REP. LAPUS). This is on own income tax. This is Pagcor income tax.
REP. NOGRALES. No, that's why. Anong i-va-Vat natin sa kanya. Sale of what?
xxxx
REP. VILLAFUERTE. Mr. Chairman, my question is, what are we VATing Pagcor with, is it the . . .
REP. NOGRALES. Mr. Chairman, this is a secret agreement or the way they craft their contract, which basis?
THE CHAIRMAN (SEN. RECTO). Congressman Nograles, the Senate version does not discuss a VAT on Pagcor
but it just takes away their exemption from non-payment of income tax.22
Taxation is the rule and exemption is the exception.23 The burden of proof rests upon the party claiming exemption to
prove that it is, in fact, covered by the exemption so claimed.24 As a rule, tax exemptions are construed strongly against
the claimant.25 Exemptions must be shown to exist clearly and categorically, and supported by clear legal provision.26
In this case, PAGCOR failed to prove that it is still exempt from the payment of corporate income tax, considering that
Section 1 of R.A. No. 9337 amended Section 27 (c) of the National Internal Revenue Code of 1997 by omitting
PAGCOR from the exemption. The legislative intent, as shown by the discussions in the Bicameral Conference
Meeting, is to require PAGCOR to pay corporate income tax; hence, the omission or removal of PAGCOR from
exemption from the payment of corporate income tax. It is a basic precept of statutory construction that the express
mention of one person, thing, act, or consequence excludes all others as expressed in the familiar maxim expressio
unius est exclusio alterius.27 Thus, the express mention of the GOCCs exempted from payment of corporate income
tax excludes all others. Not being excepted, petitioner PAGCOR must be regarded as coming within the purview of the
general rule that GOCCs shall pay corporate income tax, expressed in the maxim: exceptio firmat regulam in casibus
non exceptis.28
PAGCOR cannot find support in the equal protection clause of the Constitution, as the legislative records of the
Bicameral Conference Meeting dated October 27, 1997, of the Committee on Ways and Means, show that PAGCOR’s
exemption from payment of corporate income tax, as provided in Section 27 (c) of R.A. No. 8424, or the National
Internal Revenue Code of 1997, was not made pursuant to a valid classification based on substantial distinctions and
the other requirements of a reasonable classification by legislative bodies, so that the law may operate only on some,
and not all, without violating the equal protection clause. The legislative records show that the basis of the grant of
exemption to PAGCOR from corporate income tax was PAGCOR’s own request to be exempted.
Petitioner further contends that Section 1 (c) of R.A. No. 9337 is null and void ab initio for violating the non-impairment
clause of the Constitution. Petitioner avers that laws form part of, and is read into, the contract even without the parties
expressly saying so. Petitioner states that the private parties/investors transacting with it considered the tax
exemptions, which inure to their benefit, as the main consideration and inducement for their decision to transact/invest
with it. Petitioner argues that the withdrawal of its exemption from corporate income tax by R.A. No. 9337 has the effect
of changing the main consideration and inducement for the transactions of private parties with it; thus, the amendatory
provision is violative of the non-impairment clause of the Constitution.
Petitioner’s contention lacks merit.
The non-impairment clause is contained in Section 10, Article III of the Constitution, which provides that no law
impairing the obligation of contracts shall be passed. The non-impairment clause is limited in application to laws that
derogate from prior acts or contracts by enlarging, abridging or in any manner changing the intention of the
parties.29 There is impairment if a subsequent law changes the terms of a contract between the parties, imposes new
conditions, dispenses with those agreed upon or withdraws remedies for the enforcement of the rights of the parties.30
As regards franchises, Section 11, Article XII of the Constitution31 provides that no franchise or right shall be granted
except under the condition that it shall be subject to amendment, alteration, or repeal by the Congress when the
common good so requires.32
In Manila Electric Company v. Province of Laguna,33 the Court held that a franchise partakes the nature of a grant,
which is beyond the purview of the non-impairment clause of the Constitution.34 The pertinent portion of the case
states:
While the Court has, not too infrequently, referred to tax exemptions contained in special franchises as being in the
nature of contracts and a part of the inducement for carrying on the franchise, these exemptions, nevertheless, are far
from being strictly contractual in nature. Contractual tax exemptions, in the real sense of the term and where the non-
impairment clause of the Constitution can rightly be invoked, are those agreed to by the taxing authority in contracts,
such as those contained in government bonds or debentures, lawfully entered into by them under enabling laws in
which the government, acting in its private capacity, sheds its cloak of authority and waives its governmental immunity.
Truly, tax exemptions of this kind may not be revoked without impairing the obligations of contracts. These contractual
tax exemptions, however, are not to be confused with tax exemptions granted under franchises. A franchise partakes
the nature of a grant which is beyond the purview of the non-impairment clause of the Constitution. Indeed, Article XII,
Section 11, of the 1987 Constitution, like its precursor provisions in the 1935 and the 1973 Constitutions, is explicit that
no franchise for the operation of a public utility shall be granted except under the condition that such privilege shall be
subject to amendment, alteration or repeal by Congress as and when the common good so requires.35
In this case, PAGCOR was granted a franchise to operate and maintain gambling casinos, clubs and other recreation
or amusement places, sports, gaming pools, i.e., basketball, football, lotteries, etc., whether on land or sea, within the
territorial jurisdiction of the Republic of the Philippines.36 Under Section 11, Article XII of the Constitution, PAGCOR’s
franchise is subject to amendment, alteration or repeal by Congress such as the amendment under Section 1 of R.A.
No. 9377. Hence, the provision in Section 1 of R.A. No. 9337, amending Section 27 (c) of R.A. No. 8424 by
withdrawing the exemption of PAGCOR from corporate income tax, which may affect any benefits to PAGCOR’s
transactions with private parties, is not violative of the non-impairment clause of the Constitution.
Anent the validity of RR No. 16-2005, the Court holds that the provision subjecting PAGCOR to 10% VAT is invalid for
being contrary to R.A. No. 9337. Nowhere in R.A. No. 9337 is it provided that petitioner can be subjected to VAT. R.A.
No. 9337 is clear only as to the removal of petitioner's exemption from the payment of corporate income tax, which was
already addressed above by this Court.
As pointed out by the OSG, R.A. No. 9337 itself exempts petitioner from VAT pursuant to Section 7 (k) thereof, which
reads:
Sec. 7. Section 109 of the same Code, as amended, is hereby further amended to read as follows:
Section 109. Exempt Transactions. - (1) Subject to the provisions of Subsection (2) hereof, the following transactions
shall be exempt from the value-added tax:
xxxx
(k) Transactions which are exempt under international agreements to which the Philippines is a signatory or under
special laws, except Presidential Decree No. 529.37
Petitioner is exempt from the payment of VAT, because PAGCOR’s charter, P.D. No. 1869, is a special law that grants
petitioner exemption from taxes.
Moreover, the exemption of PAGCOR from VAT is supported by Section 6 of R.A. No. 9337, which retained Section
108 (B) (3) of R.A. No. 8424, thus:
[R.A. No. 9337], SEC. 6. Section 108 of the same Code (R.A. No. 8424), as amended, is hereby further amended to
read as follows:
SEC. 108. Value-Added Tax on Sale of Services and Use or Lease of Properties. —
(A) Rate and Base of Tax. — There shall be levied, assessed and collected, a value-added tax equivalent to ten
percent (10%) of gross receipts derived from the sale or exchange of services, including the use or lease of properties:
xxx
xxxx
(B) Transactions Subject to Zero Percent (0%) Rate. — The following services performed in the Philippines by VAT-
registered persons shall be subject to zero percent (0%) rate;
xxxx
(3) Services rendered to persons or entities whose exemption under special laws or international agreements to which
the Philippines is a signatory effectively subjects the supply of such services to zero percent (0%) rate;
x x x x38
As pointed out by petitioner, although R.A. No. 9337 introduced amendments to Section 108 of R.A. No. 8424 by
imposing VAT on other services not previously covered, it did not amend the portion of Section 108 (B) (3) that
subjects to zero percent rate services performed by VAT-registered persons to persons or entities whose exemption
under special laws or international agreements to which the Philippines is a signatory effectively subjects the supply of
such services to 0% rate.
Petitioner's exemption from VAT under Section 108 (B) (3) of R.A. No. 8424 has been thoroughly and extensively
discussed in Commissioner of Internal Revenue v. Acesite (Philippines) Hotel Corporation.39 Acesite was the owner
and operator of the Holiday Inn Manila Pavilion Hotel. It leased a portion of the hotel’s premises to PAGCOR. It
incurred VAT amounting to ₱30,152,892.02 from its rental income and sale of food and beverages to PAGCOR from
January 1996 to April 1997. Acesite tried to shift the said taxes to PAGCOR by incorporating it in the amount assessed
to PAGCOR. However, PAGCOR refused to pay the taxes because of its tax-exempt status. PAGCOR paid only the
amount due to Acesite minus VAT in the sum of ₱30,152,892.02. Acesite paid VAT in the amount of ₱30,152,892.02 to
the Commissioner of Internal Revenue, fearing the legal consequences of its non-payment. In May 1998, Acesite
sought the refund of the amount it paid as VAT on the ground that its transaction with PAGCOR was subject to zero
rate as it was rendered to a tax-exempt entity. The Court ruled that PAGCOR and Acesite were both exempt from
paying VAT, thus:
xxxx
PAGCOR is exempt from payment of indirect taxes
It is undisputed that P.D. 1869, the charter creating PAGCOR, grants the latter an exemption from the payment of
taxes. Section 13 of P.D. 1869 pertinently provides:
Sec. 13. Exemptions. —
xxxx
(2) Income and other taxes. - (a) Franchise Holder: No tax of any kind or form, income or otherwise, as well as fees,
charges or levies of whatever nature, whether National or Local, shall be assessed and collected under this Franchise
from the Corporation; nor shall any form of tax or charge attach in any way to the earnings of the Corporation, except a
Franchise Tax of five (5%) percent of the gross revenue or earnings derived by the Corporation from its operation
under this Franchise. Such tax shall be due and payable quarterly to the National Government and shall be in lieu of all
kinds of taxes, levies, fees or assessments of any kind, nature or description, levied, established or collected by any
municipal, provincial, or national government authority.
(b) Others: The exemptions herein granted for earnings derived from the operations conducted under the franchise
specifically from the payment of any tax, income or otherwise, as well as any form of charges, fees or levies, shall inure
to the benefit of and extend to corporation(s), association(s), agency(ies), or individual(s) with whom the Corporation or
operator has any contractual relationship in connection with the operations of the casino(s) authorized to be conducted
under this Franchise and to those receiving compensation or other remuneration from the Corporation or operator as a
result of essential facilities furnished and/or technical services rendered to the Corporation or operator.
Petitioner contends that the above tax exemption refers only to PAGCOR's direct tax liability and not to indirect taxes,
like the VAT.
We disagree.
A close scrutiny of the above provisos clearly gives PAGCOR a blanket exemption to taxes with no distinction on
whether the taxes are direct or indirect. We are one with the CA ruling that PAGCOR is also exempt from indirect
taxes, like VAT, as follows:
Under the above provision [Section 13 (2) (b) of P.D. 1869], the term "Corporation" or operator refers to PAGCOR.
Although the law does not specifically mention PAGCOR's exemption from indirect taxes, PAGCOR is undoubtedly
exempt from such taxes because the law exempts from taxes persons or entities contracting with PAGCOR in casino
operations. Although, differently worded, the provision clearly exempts PAGCOR from indirect taxes. In fact, it goes
one step further by granting tax exempt status to persons dealing with PAGCOR in casino operations. The
unmistakable conclusion is that PAGCOR is not liable for the P30, 152,892.02 VAT and neither is Acesite as the latter
is effectively subject to zero percent rate under Sec. 108 B (3), R.A. 8424. (Emphasis supplied.)
Indeed, by extending the exemption to entities or individuals dealing with PAGCOR, the legislature clearly granted
exemption also from indirect taxes. It must be noted that the indirect tax of VAT, as in the instant case, can be shifted
or passed to the buyer, transferee, or lessee of the goods, properties, or services subject to VAT. Thus, by extending
the tax exemption to entities or individuals dealing with PAGCOR in casino operations, it is exempting
PAGCOR from being liable to indirect taxes.
The manner of charging VAT does not make PAGCOR liable to said tax.
It is true that VAT can either be incorporated in the value of the goods, properties, or services sold or leased, in which
case it is computed as 1/11 of such value, or charged as an additional 10% to the value. Verily, the seller or lessor has
the option to follow either way in charging its clients and customer. In the instant case, Acesite followed the latter
method, that is, charging an additional 10% of the gross sales and rentals. Be that as it may, the use of either method,
and in particular, the first method, does not denigrate the fact that PAGCOR is exempt from an indirect tax, like VAT.
VAT exemption extends to Acesite

Thus, while it was proper for PAGCOR not to pay the 10% VAT charged by Acesite, the latter is not liable for the
payment of it as it is exempt in this particular transaction by operation of law to pay the indirect tax. Such exemption
falls within the former Section 102 (b) (3) of the 1977 Tax Code, as amended (now Sec. 108 [b] [3] of R.A. 8424), which
provides:
Section 102. Value-added tax on sale of services.- (a) Rate and base of tax - There shall be levied, assessed and
collected, a value-added tax equivalent to 10% of gross receipts derived by any person engaged in the sale of services
x x x; Provided, that the following services performed in the Philippines by VAT registered persons shall be subject to
0%.
xxxx
(3) Services rendered to persons or entities whose exemption under special laws or international agreements to which
the Philippines is a signatory effectively subjects the supply of such services to zero (0%) rate (emphasis supplied).
The rationale for the exemption from indirect taxes provided for in P.D. 1869 and the extension of such exemption to
entities or individuals dealing with PAGCOR in casino operations are best elucidated from the 1987 case
of Commissioner of Internal Revenue v. John Gotamco & Sons, Inc., where the absolute tax exemption of the World
Health Organization (WHO) upon an international agreement was upheld. We held in said case that the exemption of
contractee WHO should be implemented to mean that the entity or person exempt is the contractor itself who
constructed the building owned by contractee WHO, and such does not violate the rule that tax exemptions are
personal because the manifest intention of the agreement is to exempt the contractor so that no contractor's tax may
be shifted to the contractee WHO. Thus, the proviso in P.D. 1869, extending the exemption to entities or individuals
dealing with PAGCOR in casino operations, is clearly to proscribe any indirect tax, like VAT, that may be shifted to
PAGCOR.40
Although the basis of the exemption of PAGCOR and Acesite from VAT in the case of The Commissioner of Internal
Revenue v. Acesite (Philippines) Hotel Corporation was Section 102 (b) of the 1977 Tax Code, as amended, which
section was retained as Section 108 (B) (3) in R.A. No. 8424,41 it is still applicable to this case, since the provision
relied upon has been retained in R.A. No. 9337.42 1avv phi 1
It is settled rule that in case of discrepancy between the basic law and a rule or regulation issued to implement said
law, the basic law prevails, because the said rule or regulation cannot go beyond the terms and provisions of the basic
law.43 RR No. 16-2005, therefore, cannot go beyond the provisions of R.A. No. 9337. Since PAGCOR is exempt from
VAT under R.A. No. 9337, the BIR exceeded its authority in subjecting PAGCOR to 10% VAT under RR No. 16-2005;
hence, the said regulatory provision is hereby nullified.
WHEREFORE, the petition is PARTLY GRANTED. Section 1 of Republic Act No. 9337, amending Section 27 (c) of the
National Internal Revenue Code of 1997, by excluding petitioner Philippine Amusement and Gaming Corporation from
the enumeration of government-owned and controlled corporations exempted from corporate income tax is valid and
constitutional, while BIR Revenue Regulations No. 16-2005 insofar as it subjects PAGCOR to 10% VAT is null and void
for being contrary to the National Internal Revenue Code of 1997, as amended by Republic Act No. 9337.
No costs.
SO ORDERED.
DIOSDADO M. PERALTA
Associate Justice
WE CONCUR:
RENATO C. CORONA
Chief Justice
ANTONIO T. CARPIO CONCHITA CARPIO MORALES

On Official Leave
PRESBITERO J. VELASCO, JR.
ANTONIO EDUARDO B. NACHURA
Associate Justice
Associate Justice
On Official Leave
TERESITA J. LEONARDO-DE CASTRO
ARTURO D. BRION
Associate Justice
Associate Justice
LUCAS P. BERSAMIN MARIANO C. DEL CASTILLO

ROBERTO A. ABAD MARTIN S. VILLARAMA, JR.

JOSE PORTUGAL PEREZ JOSE CATRAL MENDOZA

MA. LOURDES P.A. SERENO

Associate Justice
CERTIFICATION
Pursuant to Section 13, Article VIII of the Constitution, it is hereby certified that the conclusions in the above Decision
had been reached in consultation before the case was assigned to the writer of the opinion of the Court.
RENATO C. CORONA
Chief Justice
Footnotes
* On official leave.
1 Under Rule 65 of the Rules of Court.
2CREATING THE PHILIPPINE AMUSEMENTS AND GAMING CORPORATION, DEFINING ITS POWERS
AND FUNCTIONS, PROVIDING FUNDS THEREFOR, AND FOR OTHER PURPOSES.
3GRANTING THE PAGCOR A FRANCHISE TO ESTABLISH, OPERATE AND MAINTAIN GAMBLING

CASINOS ON LAND OR WATER WITHIN THE TERRITORIAL JURISDICTION OF THE REPUBLIC OF THE
PHILIPPINES.
4 Section 4 of P.D. No. 1067-B, provides:
Section 4. Exemptions. —
(1) Duties, taxes and other imposts on importations. - All importations of equipment, vehicles, boats,
ships, barges, aircraft and other gambling paraphernalia or facilities for the sale and exclusive use of
the casinos, clubs and other recreation or amusement places to be established under and by virtue of
this Franchise shall be exempt from the payment of duties, taxes and other imports.
(2) Income and other taxes. - No income or any other form shall be assessed and collected under this
Franchise from the franchise holder; nor shall any form of tax or charge attach in any way to the
earnings of the franchise holder, EXCEPT a Franchise Tax of five percent (5%) of the gross revenue or
earnings derived by the franchise holder from its operation under this Franchise. Such tax shall be due
and payable quarterly to the National Government and shall be in lieu of all taxes of any kind, nature or
description, levied, established, or collected by any municipal, provincial or National authority.
(Emphasis supplied.)
5 Section 3, P.D. No. 1399, in part, reads:
Section 3. Section 4 of Presidential Decree No. 1067-B is hereby amended to read as follows:
Section 4. Exemptions. — x x x
(1) Duties, taxes and other imposts on importation. – x x x
(2) Income and other taxes. —
(a) Franchise Holder: No tax of any kind or form, income or otherwise, as well as fees, charges, or
levies of whatever nature, shall be assessed and collected under this Franchise from the Franchise
Holder; nor shall any form of tax or charge attach in any way to the earnings of the Franchise Holder,
except a Franchise Tax of five percent (5 %) of the gross revenue or earnings derived by the Franchise
Holder form its operation under this Franchise. Such tax shall be due and payable to the National
Government and shall be in lieu of all taxes, levies, fees or assessments of any kind, nature or
description, levied, established, or collected by any municipal, provincial or national authority.
(b) Others: The exemption herein granted for earnings derived from the operations conducted under the
franchise, specifically from the payment of any tax, income or otherwise, as well as any form of
charges, fees or levies, shall inure to the benefit of and extend to corporation/s, association/s,
agency/ies, or individual/s with whom the Franchise has any contractual relationship in connection with
the operations of the casino/s authorized to be conducted under the franchise and to those receiving
compensation or other remuneration from the Franchise Holder as a result of essential facilities
furnished and/or technical services rendered to the Franchise Holder. (Emphasis supplied.)
6CONSOLIDATING AND AMENDING PRESIDENTIAL DECREE NOS. 1067-A, 1067-B, 1067-C, 1399 AND
1632, RELATIVE TO THE FRANCHISE AND POWERS OF THE PHILIPPINE AMUSEMENT AND GAMING
CORPORATION (PAGCOR).
7 Emphasis supplied.
8AN ACT AMENDING THE NATIONAL INTERNAL REVENUE CODE, AS AMENDED, AND FOR OTHER
PURPOSES.
10AN ACT AMENDING SECTIONS 27, 28, 34, 106. 107, 108, 109, 110, 111, 112, 113, 114, 116, 117, 119,
121, 148, 151, 236, 237, AND 288 OF THE NATIONAL INTERNAL REVENUE CODE OF 1997, AS
AMENDED, AND FOR OTHER PURPOSES.
11 G.R. Nos. 168056, 168207, 168461, 168463 and 168730.
12 See Abakada Guro Party List v. Ermita, 506 Phil. 1 (2005).
13Revenue Regulations No. 16-2005 states: "Pursuant to the provisions of Secs. 244 and 245 of the National
Internal Revenue Code of 1997, as last amended by Republic Act No. 9337 (Tax Code), in relation to Sec. 23
of the said Republic Act, these Regulations are hereby promulgated to implement Title IV of the Tax Code, as
well as other provisions pertaining to Value-Added Tax (VAT). These Regulations supersedes Revenue
Regulations No. 14-2005 dated June 22, 2005."
14 Rollo, pp. 18-19; 318-319.
15 Id. at 230-260.
16 Id. at 190-222.
17 495 Phil. 289 (2005).
18 Id. at 326, citing Ichong v. Hernandez, 101 Phil. 1155 (1957), 16B Am Jur. 2d § 779 299, citing State of
Missouri ex rel. Gaines v. Canada, 305 U.S. 337, 59 S. Ct. 232, 83 L. Ed. 208 (1938), reh'g denied, 305 U.S.
676, 59 S. Ct. 356, 83 L. Ed. 437 (1939) and mandate conformed to, 344 Mo. 1238, 131 S.W. 2d 217 (1939),
Romer v. Evans, 517 U.S. 620, 116 S. Ct. 1620, 134 L. Ed. 2d 855, 109 Ed. Law Rep. 539, 70 Fair Empl. Prac.
Cas. (BNA) 1180, 68 Empl. Prac. Dec. (CCH) 44013 (1996), Walker v. Board of Supervisors of Monroe County,
224 Miss. 801, 81 So. 2d 225 (1955), cert. denied, 350 U.S. 887, 76 S. Ct. 142, 100 L. Ed. 782 (1955); Preisler
v. Calcaterra, 362 Mo. 662, 243 S.W. 2d 62 (1951); Smith, Bell & Co. v. Natividad, 40 Phil. 136, 145 (1919):
Nuñez v. Sandiganbayan, 197 Phil. 407 (1982); Cruz, Isagani A., Constitutional Law 125 (1998) and People v.
Cayat, 68 Phil. 12 (1939).
23 National Power Corporation v. Province of Isabela, G.R. No. 165827, June 16, 2006, 491 SCRA 169, 180.
24 Id.
25 National Power Corporation v. City of Cabanatuan, 449 Phil. 233, 259 (2003).
26 Id.
27 Id.; Ruben E. Agpalo, Statutory Construction, Fifth Edition, © 2003, p. 222.
C.N. Hodges v. Municipal Board, Iloilo City, et al.,125 Phil. 442, 449 (1967); Ruben E. Agpalo, Statutory
28
Construction, Fifth Edition, © 2003, pp. 222-223.
BANAT Party-list v. COMELEC, G.R. No. 177508, August 7, 2009, 595 SCRA 477, 498, citing Serrano v.
29
Gallant Maritime Services, Inc., 582 SCRA 254 (2009).
30 Id., citing Clemons v. Nolting, 42 Phil. 702 (1922).
31The Constitution, Art. XII, Sec. 11. No franchise, certificate, or any other form of authorization for the
operation of a public utility shall be granted except to citizens of the Philippines or to corporations or
associations organized under the laws of the Philippines at least sixty per centum of whose capital is owned by
such citizens, nor shall such franchise, certificate or authorization be exclusive in character or for a longer
period than fifty years. Neither shall any such franchise or right be granted except under the condition that it
shall be subject to amendment, alteration, or repeal by the Congress when the common good so requires. The
State shall encourage equity participation in public utilities by the general public. The participation of foreign
investors in the governing body of any public utility enterprise shall be limited to their proportionate share in its
capital, and all the executive and managing officers of such corporation or association must be citizens of the
Philippines. (Emphasis supplied.)
33 366 Phil. 428 (1999).
34 Id. at 438. (Emphasis supplied.)
35 Id. at 438-439. (Emphasis supplied.)

36 See P.D. No. 1869, Sec. 10.
G.R. No. 147295, February 16, 2007, 516 SCRA 93, 101, citing Commissioner of Internal Revenue v. John
39
Gotamco & Sons, Inc., 148 SCRA 36 (1987).
40 Id. at 98-101. (Emphasis supplied.)
41 R.A. No. 8424, SEC. 108. Value-Added Tax on Sale of Services and Use or Lease of Properties. — x x x
Rate and Base of Tax. — There shall be levied, assessed and collected, a value-added tax equivalent
to ten percent (10%) of gross receipts derived from the sale or exchange of services, including the use
or lease of properties.
The phrase "sale or exchange of services" means the performance of all kinds of services in the
Philippines for others for a fee, remuneration or consideration, including those performed or rendered
by xxx services of franchise grantees of telephone and telegraph, radio and television broadcasting and
all other franchise grantees except those under Section 119 of this Code; x x x
xxxx
(B) Transactions Subject to Zero Percent (0%) Rate.—The following services performed in the
Philippines by VAT-registered persons shall be subject to zero percent (0%) rate;
xxxx
(3) Services rendered to persons or entities whose exemption under special laws or international
agreements to which the Philippines is a signatory effectively subjects the supply of such services to
zero percent (0%) rate;
x x x x (Emphasis supplied.)
42 Section 6 of R.A. No. 9337states:
SEC. 6. Section 108 of the same Code, as amended, is hereby further amended to read as follows:
SEC. 108. Value-Added Tax on Sale of Services and Use or Lease of Properties. —
(A) Rate and Base of Tax— There shall be levied, assessed and collected, a value-added tax
equivalent to ten percent (10%) of gross receipts derived from the sale or exchange of services,
including the use or lease of properties x x x
xxxx
(B) Transactions Subject to Zero percent (0%) Rate.—The following services performed in the
Philippines by VAT-registered persons shall be subject to zero percent (0%) rate;
xxxx
(3) Services rendered to persons or entities whose exemption under special laws or international
agreements to which the Philippines is a signatory effectively subjects the supply of such services to
zero percent (0%) rate;
x x x x (Emphasis supplied.) 43 Hijo Plantation, Inc. v. Central Bank, 247 Phil. 154, 162 (1988),
citing People v. Lim, 108 Phil. 1091 (1960).
SUPREME COURT
Manila
EN BANC
G.R. No. L-32717 November 26, 1970
AMELITO R. MUTUC, petitioner,

vs.
COMMISSION ON ELECTIONS, respondent.
Amelito R. Mutuc in his own behalf.
Romulo C. Felizmena for respondent.
FERNANDO, J.:
The invocation of his right to free speech by petitioner Amelito Mutuc, then a candidate for delegate to the
Constitutional Convention, in this special civil action for prohibition to assail the validity of a ruling of respondent
Commission on Elections enjoining the use of a taped jingle for campaign purposes, was not in vain. Nor could it be
considering the conceded absence of any express power granted to respondent by the Constitutional Convention Act
to so require and the bar to any such implication arising from any provision found therein, if deference be paid to the
principle that a statute is to be construed consistently with the fundamental law, which accords the utmost priority to
freedom of expression, much more so when utilized for electoral purposes. On November 3, 1970, the very same day
the case was orally argued, five days after its filing, with the election barely a week away, we issued a minute
resolution granting the writ of prohibition prayed for. This opinion is intended to explain more fully our decision.
In this special civil action for prohibition filed on October 29, 1970, petitioner, after setting forth his being a resident of
Arayat, Pampanga, and his candidacy for the position of delegate to the Constitutional Convention, alleged that
respondent Commission on Elections, by a telegram sent to him five days previously, informed him that his certificate
of candidacy was given due course but prohibited him from using jingles in his mobile units equipped with sound
systems and loud speakers, an order which, according to him, is "violative of [his] constitutional right ... to freedom of
speech."1 There being no plain, speedy and adequate remedy, according to petitioner, he would seek a writ of
prohibition, at the same time praying for a preliminary injunction. On the very next day, this Court adopted a resolution
requiring respondent Commission on Elections to file an answer not later than November 2, 1970, at the same time
setting the case for hearing for Tuesday November 3, 1970. No preliminary injunction was issued. There was no denial
in the answer filed by respondent on November 2, 1970, of the factual allegations set forth in the petition, but the
justification for the prohibition was premised on a provision of the Constitutional Convention Act,2which made it unlawful
for candidates "to purchase, produce, request or distribute sample ballots, or electoral propaganda gadgets such as
pens, lighters, fans (of whatever nature), flashlights, athletic goods or materials, wallets, bandanas, shirts, hats,
matches, cigarettes, and the like, whether of domestic or foreign origin."3 It was its contention that the jingle proposed
to be used by petitioner is the recorded or taped voice of a singer and therefore a tangible propaganda material, under
the above statute subject to confiscation. It prayed that the petition be denied for lack of merit. The case was argued,
on November 3, 1970, with petitioner appearing in his behalf and Attorney Romulo C. Felizmena arguing in behalf of
respondent.
This Court, after deliberation and taking into account the need for urgency, the election being barely a week away,
issued on the afternoon of the same day, a minute resolution granting the writ of prohibition, setting forth the absence
of statutory authority on the part of respondent to impose such a ban in the light of the doctrine of ejusdem generis as
well as the principle that the construction placed on the statute by respondent Commission on Elections would raise
serious doubts about its validity, considering the infringement of the right of free speech of petitioner. Its concluding
portion was worded thus: "Accordingly, as prayed for, respondent Commission on Elections is permanently restrained
and prohibited from enforcing or implementing or demanding compliance with its aforesaid order banning the use of
political jingles by candidates. This resolution is immediately executory."4
1. As made clear in our resolution of November 3, 1970, the question before us was one of power. Respondent
Commission on Elections was called upon to justify such a prohibition imposed on petitioner. To repeat, no such
authority was granted by the Constitutional Convention Act. It did contend, however, that one of its provisions referred
to above makes unlawful the distribution of electoral propaganda gadgets, mention being made of pens, lighters, fans,
flashlights, athletic goods or materials, wallets, bandanas, shirts, hats, matches, and cigarettes, and concluding with
the words "and the like."5 For respondent Commission, the last three words sufficed to justify such an order. We view
the matter differently. What was done cannot merit our approval under the well-known principle of ejusdem generis, the
general words following any enumeration being applicable only to things of the same kind or class as those specifically
referred to.6 It is quite apparent that what was contemplated in the Act was the distribution of gadgets of the kind
referred to as a means of inducement to obtain a favorable vote for the candidate responsible for its distribution.
The more serious objection, however, to the ruling of respondent Commission was its failure to manifest fealty to a
cardinal principle of construction that a statute should be interpreted to assure its being in consonance with, rather than
repugnant to, any constitutional command or prescription.7 Thus, certain Administrative Code provisions were given a
"construction which should be more in harmony with the tenets of the fundamental law."8 The desirability of removing in
that fashion the taint of constitutional infirmity from legislative enactments has always commended itself. The judiciary
may even strain the ordinary meaning of words to avert any collision between what a statute provides and what the
Constitution requires. The objective is to reach an interpretation rendering it free from constitutional defects. To
paraphrase Justice Cardozo, if at all possible, the conclusion reached must avoid not only that it is unconstitutional, but
also grave doubts upon that score.9
2. Petitioner's submission of his side of the controversy, then, has in its favor obeisance to such a cardinal precept. The
view advanced by him that if the above provision of the Constitutional Convention Act were to lend itself to the view
that the use of the taped jingle could be prohibited, then the challenge of unconstitutionality would be difficult to meet.
For, in unequivocal language, the Constitution prohibits an abridgment of free speech or a free press. It has been our
constant holding that this preferred freedom calls all the more for the utmost respect when what may be curtailed is the
dissemination of information to make more meaningful the equally vital right of suffrage. What respondent Commission
did, in effect, was to impose censorship on petitioner, an evil against which this constitutional right is directed. Nor
could respondent Commission justify its action by the assertion that petitioner, if he would not resort to taped jingle,
would be free, either by himself or through others, to use his mobile loudspeakers. Precisely, the constitutional
guarantee is not to be emasculated by confining it to a speaker having his say, but not perpetuating what is uttered by
him through tape or other mechanical contrivances. If this Court were to sustain respondent Commission, then the
effect would hardly be distinguishable from a previous restraint. That cannot be validly done. It would negate indirectly
what the Constitution in express terms assures. 10
3. Nor is this all. The concept of the Constitution as the fundamental law, setting forth the criterion for the validity of any
public act whether proceeding from the highest official or the lowest functionary, is a postulate of our system of
government. That is to manifest fealty to the rule of law, with priority accorded to that which occupies the topmost rung
in the legal hierarchy. The three departments of government in the discharge of the functions with which it is entrusted
have no choice but to yield obedience to its commands. Whatever limits it imposes must be observed. Congress in the
enactment of statutes must ever be on guard lest the restrictions on its authority, whether substantive or formal, be
transcended. The Presidency in the execution of the laws cannot ignore or disregard what it ordains. In its task of
applying the law to the facts as found in deciding cases, the judiciary is called upon to maintain inviolate what is
decreed by the fundamental law. Even its power of judicial review to pass upon the validity of the acts of the coordinate
branches in the course of adjudication is a logical corollary of this basic principle that the Constitution is paramount. It
overrides any governmental measure that fails to live up to its mandates. Thereby there is a recognition of its being the
supreme law.
To be more specific, the competence entrusted to respondent Commission was aptly summed up by the present Chief
Justice thus: "Lastly, as the branch of the executive department — although independent of the President — to which
the Constitution has given the 'exclusive charge' of the 'enforcement and administration of all laws relative to the
conduct of elections,' the power of decision of the Commission is limited to purely 'administrative questions.'" 11 It has
been the constant holding of this Court, as it could not have been otherwise, that respondent Commission cannot
exercise any authority in conflict with or outside of the law, and there is no higher law than the Constitution. 12Our
decisions which liberally construe its powers are precisely inspired by the thought that only thus may its responsibility
under the Constitution to insure free, orderly and honest elections be adequately fulfilled. 13 There could be no
justification then for lending approval to any ruling or order issuing from respondent Commission, the effect of which
would be to nullify so vital a constitutional right as free speech. Petitioner's case, as was obvious from the time of its
filing, stood on solid footing.
WHEREFORE, as set forth in our resolution of November 3, 1970, respondent Commission is permanently restrained
and prohibited from enforcing or implementing or demanding compliance with its aforesaid order banning the use of
political taped jingles. Without pronouncement as to costs.
Concepcion, C.J., Reyes, J.B.L., Makalintal, Zaldivar, Castro, Barredo and Villamor, JJ., concur.
Dizon and Makasiar, JJ., are on leave.
Separate Opinions
TEEHANKEE, J., concurring:
In line with my separate opinion in Badoy vs. Ferrer1 on the unconstitutionality of the challenged provisions of the 1971
Constitutional Convention Act, I concur with the views of Mr. Justice Fernando in the main opinion that "there could be
no justification .... for lending approval to any ruling or order issuing from respondent Commission, the effect of which
would be to nullify so vital a constitutional right as free speech." I would only add the following observations:
This case once again calls for application of the constitutional test of reasonableness required by the due process
clause of our Constitution. Originally, respondent Commission in its guidelines prescribed summarily that the use by a
candidate of a "mobile unit — roaming around and announcing a meeting and the name of the candidate ... is
prohibited. If it is used only for a certain place for a meeting and he uses his sound system at the meeting itself, there is
no violation."2Acting upon petitioner's application, however, respondent Commission ruled that "the use of a sound
system by anyone be he a candidate or not whether stationary or part of a mobile unit is not prohibited by the 1971
Constitutional Convention Act" but imposed the condition — "provided that there are no jingles and no streamers or
posters placed in carriers."
Respondent Commission's narrow view is that "the use of a 'jingle,' a verbally recorded form of election propaganda, is
no different from the use of a 'streamer' or 'poster,' a printed form of election propaganda, and both forms of election
advertisement fall under the prohibition contained in sec. 12 of R.A. 6132," and "the record disc or tape where said
'jingle' has been recorded can be subject of confiscation by the respondent Commission under par. (E) of sec. 12 of
R.A. 6132." In this modern day and age of the electronically recorded or taped voice which may be easily and
inexpensively disseminated through a mobile sound system throughout the candidate's district, respondent
Commission would outlaw "recorded or taped voices" and would exact of the candidate that he make use of the mobile
sound system only by personal transmission and repeatedly personally sing his "jingle" or deliver his spoken message
to the voters even if he loses his voice in the process or employ another person to do so personally even if this should
prove more expensive and less effective than using a recorded or taped voice.
Respondent Commission's strictures clearly violate, therefore, petitioner's basic freedom of speech and expression.
They cannot pass the constitutional test of reasonableness in that they go far beyond a reasonable relation to the
proper governmental object and are manifestly unreasonable, oppressive and arbitrary.
Insofar as the placing of the candidate's "streamers" or posters on the mobile unit or carrier is concerned, respondent
Commission's adverse ruling that the same falls within the prohibition of section 12, paragraphs (C) and (E) has not
been appealed by petitioner. I would note that respondent Commission's premise that "the use of a 'jingle' ... is no
different from the use of a 'streamer' or 'poster' "in that these both represent forms of election advertisements — to
make the candidate and the fact of his candidacy known to the voters — is correct, but its conclusion is not. The
campaign appeal of the "jingle" is through the voters' ears while that of the "streamers" is through the voters' eyes. But
if it be held that the Commission's ban on "jingles" abridges unreasonably, oppressively and arbitrarily the candidate's
right of free expression, even though such "jingles" may occasionally offend some sensitive ears, the Commission's
ban on "streamers" being placed on the candidate's mobile unit or carrier, which "streamers" are less likely to offend
the voters' sense of sight should likewise be held to be an unreasonable, oppressive and arbitrary curtailment of the
candidate's same constitutional right.
The intent of the law to minimize election expenses as invoked by respondent Commission, laudable as it may be,
should not be sought at the cost of the candidate's constitutional rights in the earnest pursuit of his candidacy, but is to
be fulfilled in the strict and effective implementation of the Act's limitation in section 12(G) on the total expenditures that
may be made by a candidate or by another person with his knowledge and consent.
# Separate Opinions
In line with my separate opinion in Badoy vs. Ferrer1 on the unconstitutionality of the challenged provisions of the 1971
Constitutional Convention Act, I concur with the views of Mr. Justice Fernando in the main opinion that "there could be
no justification .... for lending approval to any ruling or order issuing from respondent Commission, the effect of which
would be to nullify so vital a constitutional right as free speech." I would only add the following observations:
This case once again calls for application of the constitutional test of reasonableness required by the due process
clause of our Constitution. Originally, respondent Commission in its guidelines prescribed summarily that the use by a
candidate of a "mobile unit — roaming around and announcing a meeting and the name of the candidate ... is
prohibited. If it is used only for a certain place for a meeting and he uses his sound system at the meeting itself, there is
no violation."2Acting upon petitioner's application, however, respondent Commission ruled that "the use of a sound
system by anyone be he a candidate or not whether stationary or part of a mobile unit is not prohibited by the 1971
Constitutional Convention Act" but imposed the condition — "provided that there are no jingles and no streamers or
posters placed in carriers."
Respondent Commission's narrow view is that "the use of a 'jingle,' a verbally recorded form of election propaganda, is
no different from the use of a 'streamer' or 'poster,' a printed form of election propaganda, and both forms of election
advertisement fall under the prohibition contained in sec. 12 of R.A. 6132," and "the record disc or tape where said
'jingle' has been recorded can be subject of confiscation by the respondent Commission under par. (E) of sec. 12 of
R.A. 6132." In this modern day and age of the electronically recorded or taped voice which may be easily and
inexpensively disseminated through a mobile sound system throughout the candidate's district, respondent
Commission would outlaw "recorded or taped voices" and would exact of the candidate that he make use of the mobile
sound system only by personal transmission and repeatedly personally sing his "jingle" or deliver his spoken message
to the voters even if he loses his voice in the process or employ another person to do so personally even if this should
prove more expensive and less effective than using a recorded or taped voice.
Respondent Commission's strictures clearly violate, therefore, petitioner's basic freedom of speech and expression.
They cannot pass the constitutional test of reasonableness in that they go far beyond a reasonable relation to the
proper governmental object and are manifestly unreasonable, oppressive and arbitrary.
Insofar as the placing of the candidate's "streamers" or posters on the mobile unit or carrier is concerned, respondent
Commission's adverse ruling that the same falls within the prohibition of section 12, paragraphs (C) and (E) has not
been appealed by petitioner. I would note that respondent Commission's premise that "the use of a 'jingle' ... is no
different from the use of a 'streamer' or 'poster' "in that these both represent forms of election advertisements — to
make the candidate and the fact of his candidacy known to the voters — is correct, but its conclusion is not. The
campaign appeal of the "jingle" is through the voters' ears while that of the "streamers" is through the voters' eyes. But
if it be held that the Commission's ban on "jingles" abridges unreasonably, oppressively and arbitrarily the candidate's
right of free expression, even though such "jingles" may occasionally offend some sensitive ears, the Commission's
ban on "streamers" being placed on the candidate's mobile unit or carrier, which "streamers" are less likely to offend
the voters' sense of sight should likewise be held to be an unreasonable, oppressive and arbitrary curtailment of the
candidate's same constitutional right.
The intent of the law to minimize election expenses as invoked by respondent Commission, laudable as it may be,
should not be sought at the cost of the candidate's constitutional rights in the earnest pursuit of his candidacy, but is to
be fulfilled in the strict and effective implementation of the Act's limitation in section 12(G) on the total expenditures that
may be made by a candidate or by another person with his knowledge and consent.
# Footnotes
1 Petition, paragraphs 1 to 5.
2 Republic Act No. 6132 (1970).
3 Section 12 (E), Ibid.
4 Resolution of Nov. 3, 1970.
5 Section 12(E), Constitutional Convention Act.
6 Cf. United States v. Santo Nino, 13 Phil. 141 (1909); Go Tiaoco y Hermanos v. Union Insurance
Society of Canton, 40 Phil. 40 (1919); People vs. Kottinger 45 Phil. 352 (1923); Cornejo v. Naval, 54
Phil. 809 (1930); Ollada v. Court of Tax Appeals, 99 Phil. 605 (1956); Roman Catholic Archbishop of
Manila v. Social Security Commission, L-15045, Jan. 20, 1961, 1 SCRA 10.
7 Cf. Herras Teehankee v. Rovira, 75 Phil. 634 (1945); Manila Electric Co. v. Public Utilities Employees
Association, 79 Phil. 409 (1947); Araneta v. Dinglasan, 84 Phil. 368 (1949); Guido v. Rural Progress
Administration, 84 Phil. 847 (1949); City of Manila v. Arellano Law Colleges, 85 Phil. 663 (1950);
Ongsiako v. Gamboa, 86 Phil. 50 (1950); Radiowealth v. Agregado, 86 Phil. 429 (1950); Sanchez v.
Harry Lyons Construction, Inc., 87 Phil. 532 (1950); American Bible Society v. City of Manila, 101 Phil.
386 (1957); Gonzales v. Hechanova, L-21897, Oct. 22, 1963, 9 SCRA 230; Automotive Parts and
Equipment Co., Inc. v. Lingad, L-26406, Oct. 31, 1969, 30 SCRA 248; J. M. Tuason and Co., Inc. v.
Land Tenure Administration, L-21064, Feb. 18, 1970, 31 SCRA 413.
8 Radiowealth v. Agregado, 86 Phil. 429 (1950).
9 Moore Ice Cream Co. v. Ross, 289 US 373 (1933).
10 Cf. Saia v. People of the State of New York, 334 US 558 (1948).
11 Abcede v. Hon. Imperial, 103 Phil. 136 (1958). The portion of the opinion from which the above
excerpt is taken reads in full: 'Lastly, as the branch of the executive department — although
independent of the President — to which the Constitution has given the 'exclusive charge' of the
'enforcement and administration of all laws relative to the conduct of elections,' the power of decision of
the Commission is limited to purely 'administrative questions.' (Article X, sec. 2, Constitution of the
Philippines) It has no authority to decide matters 'involving the right to vote.' It may not even pass upon
the legality of a given vote (Nacionalista Party v. Commission on Elections, 47 Off. Gaz., [6], 2851). We
do not see, therefore, how it could assert the greater and more far-reaching authority to determine who
— among those possessing the qualifications prescribed by the Constitution, who have complied with
the procedural requirements, relative to the filing of certificate of candidacy — should be allowed to
enjoy the full benefits intended by law therefore. The question whether in order to enjoy those benefits
— a candidate must be capable of 'understanding the full meaning of his acts and the true significance
of election,' and must have — over a month prior to the elections (when the resolution complained of
was issued) 'the tiniest chance to obtain the favorable indorsement of a substantial portion of the
electorate, is a matter of policy, not of administration and enforcement of the law which policy must be
determined by Congress in the exercise of its legislative functions. Apart from the absence of specific
statutory grant of such general, broad power as the Commission claims to have, it is dubious whether, if
so granted — in the vague, abstract, indeterminate and undefined manner necessary in order that it
could pass upon the factors relied upon in said resolution (and such grant must not be deemed made,
in the absence of clear and positive provision to such effect, which is absent in the case at bar) — the
legislative enactment would not amount to undue delegation of legislative power. (Schechter vs. U.S.,
295 US 495, 79 L. ed. 1570.)" pp. 141-142.
12 Cf. Cortez v. Commission on Elections, 79 Phil. 352 (1947); Nacionalista Party v. Commission on
Elections, 85 Phil. 149 (1949); Guevara v. Commission on Elections, 104 Phil. 268 (1958); Masangcay
v. Commission on Elections, L-13827, Sept. 28, 1962, 6 SCRA 27; Lawsin v. Escalona, L-22540, July
31, 1964, 11 SCRA 643; Ututalum v. Commission on Elections,
L-25349, Dec. 3, 1965, 15 SCRA 465; Janairo v. Commission on Elections, L-28315, Dec. 8, 1967, 21
SCRA 1173; Abes v. Commission on Elections, L-28348, Dec. 15, 1967, 21 SCRA 1252; Ibuna v.
Commission on Elections,
L-28328, Dec. 29, 1967, 21 SCRA 1457; Binging Ho v. Mun. Board of Canvassers,
L-29051, July 28, 1969, 28 SCRA 829.
13 Cf. Cauton v. Commission on Elections, L-25467, April 27, 1967, 19 SCRA 911. The other cases are
Espino v. Zaldivar, L-22325, Dec. 11, 1967, 21 SCRA 1204; Ong v. Commission on Elections, L-28415,
Jan. 29, 1968, 22 SCRA 241; Mutuc v. Commission on Elections, L-28517, Feb. 21, 1968, 22 SCRA
662; Pedido v. Commission on Elections, L-28539, March 30, 1968, 22 SCRA 1403; Aguam v.
Commission on Elections, L-28955, May 28, 1968, 23 SCRA 883; Pelayo, Jr. v. Commission on
Elections, L-28869, June 29, 1968, 23 SCRA 1374; Pacis v. Commission on Elections, L-29026, Sept.
28, 1968, 25 SCRA 377; Ligot v. Commission on Elections, L-31380, Jan. 21, 1970, 31 SCRA 45;
Abrigo v. Commission on Elections, L-31374, Jan. 21, 1970, 31 SCRA 27; Moore v. Commission on
Elections, L-31394, Jan. 23, 1970, 31 SCRA 60; Ilarde v. Commission on Elections, L-31446, Jan. 23,
1970, 31 SCRA 72; Sinsuat v. Pendatun,
L-31501, June 30, 1970, 33 SCRA 630.
1 L-32546 & 32551, Oct. 17, 1970, re: sections 8(A) and 12(F) and other related provisions.
2 Petition, page 9.
SUPREME COURT
Manila
EN BANC
G.R. No. L-5000 March 11, 1909
THE UNITED STATES, plaintiff-appellant,

vs.
VICTOR SANTO NIÑO, defendant-appellee.
Attorney-General Villamor for appellant.

No appearance for appellee.
WILLARD, J.:
Act No. 1780 is entitled as follows: "An Act to regulate the importation, acquisition, possession, use, and transfer of
firearms, and to prohibit the possession of same except in compliance with the provisions of this Act."
Section 26 of this Act is in part as follows:
It shall be unlawful for any person to carry concealed about his person any bowie knife, dirk, dagger, kris, or
other deadly weapon: Provided, That this prohibition shall not apply to firearms in the possession of persons
who have secured a license therefor or who are entitled to carry same under the provisions of this Act.
The amended complaint in this case is as follows:
The undersigned accuses Victor Santo Niño of the violation of Act No. 1780, committed as follows:
That on or about the 16th day of August, 1908, in the city of Manila, Philippine Islands, the said Victor Santo
Niño, voluntarily, unlawfully, and criminally, had in his possession and concealed about his person a deadly
weapon, to wit: One (1) iron bar, about 15 inches in length provided with an iron ball on one end and a string on
the other to tie the wrist, which weapon had been designed and made for use in fighting, as a deadly weapon.
With violation of the provisions of section 26 of Act No. 1780 of the Philippine Commission.
A demurrer to this complaint was sustained in the court below and the Government has appealed.
The basis for the holding of the court below was that —
The words "or other deadly weapon" only signify a kind of weapon included within the preceding classification.
In other words, the rule of ejusdem generis must be applied in the interpretation of this law, which rule is as
follows:
"The most frequent application of this rule is found where specific and generic terms of the same nature are
employed in the same act, the latter following the former. While in the abstract, general terms are to be given
their natural and full signification, yet where they follow specific words of a like nature they take their meaning
from the latter, and are presumed to embrace only things or persons of the kind designated by them."
In short, the court below held that the carrying of a revolver concealed about the person would not be a violation of this
Act. The rule of construction above referred to is resorted to only for the purpose of determining what the intent of the
legislature was in enacting the law. If that intent clearly appears from one parts of the law, and such intent thus clearly
manifested is contrary to the result which would be reached by application of the rule of ejusdem generis, the latter
must give way. In this case the proviso to the Act clearly indicates that in the view of the legislature the carrying of an
unlicensed revolver would be a violation of the Act. By the proviso it manifested its intention to include in the prohibition
weapons other than the armas blancas therein specified.
The judgment of the court below is reversed, and the case is remanded for further proceedings. No costs will be
allowed to either party in this court. So ordered.
Arellano, C. J., Torres, Mapa, Johnson, and Carson, JJ., concur.

SECOND DIVISION
G.R. No. 148408 July 14, 2006
CONCEPCION PARAYNO, petitioner,

vs.
JOSE JOVELLANOS and the MUNICIPALITY OF CALASIAO, PANGASINAN,* respondents.
DECISION
CORONA, J.:
This is a petition for review on certiorari under Rule 45 of the 1997 Rules of Court questioning the resolution of the
Court of Appeals (CA) which dismissed the petition for certiorari, mandamus and prohibition, with prayer for issuance of
a preliminary and mandatory injunction, filed by petitioner Concepcion Parayno against respondents Jose Jovellanos
and the Municipality of Calasiao, Pangasinan.
Petitioner was the owner of a gasoline filling station in Calasiao, Pangasinan. In 1989, some residents of Calasiao
petitioned the Sangguniang Bayan (SB) of said municipality for the closure or transfer of the station to another location.
The matter was referred to the Municipal Engineer, Chief of Police, Municipal Health Officer and the Bureau of Fire
Protection for investigation. Upon their advise, the Sangguniang Bayan recommended to the Mayor the closure or
transfer of location of petitioner's gasoline station. In Resolution No. 50, it declared:
a) xxx the existing gasoline station is a blatant violation and disregard of existing law to wit:
The Official Zoning Code of Calasiao, Art. 6, Section 44,1 the nearest school building which is San
Miguel Elementary School and church, the distances are less than 100 meters. No neighbors were
called as witnesses when actual measurements were done by HLURB Staff, Baguio City dated 22 June
1989.
b) The gasoline station remains in thickly populated area with commercial/residential buildings, houses closed
(sic) to each other which still endangers the lives and safety of the people in case of fire. Moreover, additional
selling and storing of several LPG tanks in the station (sic).
c) The residents of our barangay always complain of the irritating smell of gasoline most of the time especially
during gas filling which tend to expose residents especially children to frequent colds, asthma, cough and the
like nowadays.
d) xxx the gasoline station violated Building and Fire Safety Codes because the station has 2nd floor storey
building used for business rental offices, with iron grilled windows, no firewalls. It also endangers the lives of
people upstairs.
e) It hampers the flow of traffic, the gasoline station is too small and narrow, the entrance and exit are closed to
the street property lines. It couldn't cope situation (sic) on traffic because the place is a congested area.2
Petitioner moved for the reconsideration of the SB resolution but it was denied. Hence, she filed a special civil action
for prohibition and mandamus with the Regional Trial Court (RTC) of Dagupan City, Branch 44 against respondents.
The case, docketed as SP Civil Case No. 99-03010-D, was raffled to the sala of Judge Crispin Laron.
Petitioner claimed that her gasoline station was not covered by Section 44 of the Official Zoning Code since it was not
a "gasoline service station" but a "gasoline filling station" governed by Section 21 thereof. She added that the decision
of the Housing and Land Use Regulatory Board (HLURB),3 in a previous case filed by the same respondent Jovellanos
against her predecessor (Dennis Parayno), barred the grounds invoked by respondent municipality in Resolution No.
50. In the HLURB case, respondent Jovellanos opposed the establishment of the gas station on the grounds that: (1) it
was within the 100-meter prohibited radius under Section 44 and (2) it posed a pernicious effect on the health and
safety of the people in Calasiao.
After the hearing on the propriety of issuing a writ of preliminary prohibitory and mandatory injunction, the trial court
ruled:
There is no basis for the court to issue a writ of preliminary prohibitory and mandatory injunction.
Albeit, Section 44 of the Official Zoning Code of respondent municipality does not mention a gasoline
filling station, [but] following the principle of ejusdem generis, a gasoline filling station falls within the
ambit of Section 44.
The gasoline filling station of the petitioner is located under the establishment belonging to the petitioner and is
very near several buildings occupied by several persons. Justice dictates that the same should not be
allowed to continue operating its business on that particular place. Further, the gasoline filling station
endangers the lives and safety of people because once there is fire, the establishment and houses
nearby will be razed to the ground.4(emphasis supplied)
Petitioner moved for reconsideration of the decision but it was denied by the trial court.
Petitioner elevated the case to the CA via a petition for certiorari, prohibition and mandamus,5 with a prayer for
injunctive relief. She ascribed grave abuse of discretion, amounting to lack or excess of jurisdiction, on the part of
Judge Laron who dismissed her case.
After the CA dismissed the petition, petitioner filed a motion for reconsideration but the same was denied. Hence, this
appeal.
Before us, petitioner insists that (1) the legal maxim of ejusdem generis did not apply to her case; (2) the
closure/transfer of her gasoline filling station by respondent municipality was an invalid exercise of the latter's police
powers and (3) it was the principle of res judicata that applied in this case.6
We find merit in the petition.
The Principle of Ejusdem Generis
We hold that the zoning ordinance of respondent municipality made a clear distinction between "gasoline service
station" and "gasoline filling station." The pertinent provisions read:
xxx xxx xxx
Section 21. Filling Station. A retail station servicing automobiles and other motor vehicles with gasoline and oil
only.7
xxx xxx xxx
Section 42. Service Station. A building and its premises where gasoline oil, grease, batteries, tires and car
accessories may be supplied and dispensed at retail and where, in addition, the following services may be
rendered and sales and no other.
a. Sale and servicing of spark plugs, batteries, and distributor parts;
b. Tire servicing and repair, but not recapping or regrooving;
c. Replacement of mufflers and tail pipes, water hose, fan belts, brake fluids, light bulbs, fuses, floor
mats, seat covers, windshield wipers and wiper blades, grease retainers, wheel, bearing, mirrors and
the like;
d. Radiator cleaning and flushing;
e. Washing and polishing, and sale of automobile washing and polishing materials;
f. Grease and lubricating;
g. Emergency wiring repairs;

h. Minor servicing of carburators;
i. Adjusting and repairing brakes;
j. Minor motor adjustments not involving removal of the head or crankcase, or raising the motor.8
xxx xxx xxx
It is evident from the foregoing that the ordinance intended these two terms to be separate and distinct from each
other. Even respondent municipality's counsel admitted this dissimilarity during the hearing on the application for the
issuance of a writ of preliminary prohibitory and mandatory injunction. Counsel in fact admitted:
1. That there exist[ed] an official zoning code of Calasiao, Pangasinan which [was] not yet amended;
2. That under Article III of said official zoning code there [were] certain distinctions made by said
municipality about the designation of the gasoline filling station and that of the gasoline service station
as appearing in Article III, Nos. 21 and 42, [respectively];
3. That the business of the petitioner [was] one of a gasoline filling station as defined in Article III,
Section 21 of the zoning code and not as a service station as differently defined under Article 42 of the
said official zoning code;
4. That under Section 44 of the official zoning code of Calasiao, the term filling station as clearly
defined under Article III, Section 21, [did] not appear in the wordings thereof;9(emphasis supplied)
The foregoing were judicial admissions which were conclusive on the municipality, the party making
them.10Respondent municipality thus could not find solace in the legal maxim of ejusdem generis11 which means "of the
same kind, class or nature." Under this maxim, where general words follow the enumeration of particular classes of
persons or things, the general words will apply only to persons or things of the same general nature or class as those
enumerated.12 Instead, what applied in this case was the legal maxim expressio unius est exclusio alteriuswhich means
that the express mention of one thing implies the exclusion of others.13 Hence, because of the distinct and definite
meanings alluded to the two terms by the zoning ordinance, respondents could not insist that "gasoline service station"
under Section 44 necessarily included "gasoline filling station" under Section 21. Indeed, the activities undertaken in a
"gas service station" did not automatically embrace those in a "gas filling station."
The Exercise of Police Powers
Respondent municipality invalidly used its police powers in ordering the closure/transfer of petitioner's gasoline station.
While it had, under RA 7160,14 the power to take actions and enact measures to promote the health and general
welfare of its constituents, it should have given due deference to the law and the rights of petitioner.
A local government is considered to have properly exercised its police powers only when the following requisites are
met: (1) the interests of the public generally, as distinguished from those of a particular class, require the interference
of the State and (2) the means employed are reasonably necessary for the attainment of the object sought to be
accomplished and not unduly oppressive.15 The first requirement refers to the equal protection clause and the second,
to the due process clause of the Constitution.16
Respondent municipality failed to comply with the due process clause when it passed Resolution No. 50. While it
maintained that the gasoline filling station of petitioner was less than 100 meters from the nearest public school and
church, the records do not show that it even attempted to measure the distance, notwithstanding that such distance
was crucial in determining whether there was an actual violation of Section 44. The different local offices that
respondent municipality tapped to conduct an investigation never conducted such measurement either.
Moreover, petitioner's business could not be considered a nuisance which respondent municipality could summarily
abate in the guise of exercising its police powers. The abatement of a nuisance without judicial proceedings is possible
only if it is a nuisance per se. A gas station is not a nuisance per se or one affecting the immediate safety of persons
and property,17 hence, it cannot be closed down or transferred summarily to another location.
As a rule, this Court does not pass upon evidence submitted by the parties in the lower courts.18 We deem it
necessary, however, to recall the findings of the HLURB which petitioner submitted as evidence during the proceedings
before the trial court, if only to underscore petitioner's compliance with the requirements of law before she put up her
gasoline station.
Another factor that should not be left unnoticed is the diligence exercised by [petitioner] in complying with the
requirements of the several laws prior to the actual implementation of the project as can be attested by the fact
that [petitioner] has secured the necessary building permit and approval of [her] application for authority to
relocate as per the letter of the Energy Regulatory Board xxx.19
On the alleged hazardous effects of the gasoline station to the lives and properties of the people of Calasiao, we again
note:
Relative to the allegations that the project (gasoline station) is hazardous to life and property, the Board takes
cognizance of the respondent's contention that the project "is not a fire hazard since petroleum products shall
be safely stored in underground tanks and that the installation and construction of the underground tanks shall
be in accordance with the Caltex Engineering Procedures which is true to all gasoline stations in the country.
xxx
Hence, the Board is inclined to believe that the project being hazardous to life and property is more
perceived than factual. For, after all, even the Fire Station Commander, after studying the plans and
specifications of the subject proposed construction, recommended on 20 January 1989, "to build such buildings
after conform (sic) all the requirements of PP 1185." It is further alleged by the complainants that the
proposed location is "in the heart of the thickly populated residential area of Calasiao." Again, findings
of the [HLURB] staff negate the allegations as the same is within a designated Business/Commercial
Zone per the Zoning Ordinance. xxx20 (emphasis supplied)
The findings of fact of the HLURB are binding as they are already final and conclusive vis-à-vis the evidence submitted
by respondents.
The Principle of Res Judicata
Petitioner points out that the HLURB decision in the previous case filed against her predecessor (Dennis Parayno) by
respondent Jovellanos had effectively barred the issues in Resolution No. 50 based on the principle of res judicata. We
agree.
Res judicata refers to the rule that a final judgment or decree on the merits by a court of competent jurisdiction is
conclusive of the rights of the parties or their privies in all later suits on all points and matters determined in the former
suit.21 For res judicata to apply, the following elements must be present: (1) the judgment or order must be final; (2) the
judgment must be on the merits; (3) it must have been rendered by a court having jurisdiction over the subject matter
and the parties and (4) there must be, between the first and second actions, identity of parties, of subject matter and of
cause of action.22
Respondent municipality does not contest the first, second and third requisites. However, it claims that it was not a
party to the HLURB case but only its co-respondent Jovellanos, hence, the fourth requisite was not met. The argument
is untenable.
The absolute identity of parties is not required for the principle of res judicata to apply.23 A shared identity of interests is
sufficient to invoke the application of this principle.24 The proscription may not be evaded by the mere expedient of
including an additional party.25 Res judicata may lie as long as there is a community of interests between a party in the
first case and a party in the second case although the latter may not have been impleaded in the first.26
In the assailed resolution of respondent municipality, it raised the same grounds invoked by its co-respondent in the
HLURB: (1) that the resolution aimed to close down or transfer the gasoline station to another location due to the
alleged violation of Section 44 of the zoning ordinance and (2) that the hazards of said gasoline station threatened the
health and safety of the public. The HLURB had already settled these concerns and its adjudication had long attained
finality. It is to the interest of the public that there should be an end to litigation by the parties over a subject matter
already fully and fairly adjudged. Furthermore, an individual should not be vexed twice for the same cause.27
WHEREFORE, the petition is hereby GRANTED. The assailed resolution of the Court of the Appeals
is REVERSEDand SET ASIDE. Respondent Municipality of Calasiao is hereby directed to cease and desist from
enforcing Resolution No. 50 against petitioner insofar as it seeks to close down or transfer her gasoline station to
another location.
No costs.
SO ORDERED.
Puno, Chairperson, Sandoval-Gutierrez, Azcuna, Garcia, J.J., concur.
Footnotes
* Hon. Crispin C. Laron, of the Regional Trial Court of Dagupan City, Branch 44, was impleaded as respondent.
Under Section 4, Rule 45 of the 1997 Rules of Court, lower courts or judges thereof need not be impleaded
either as petitioners or respondents.
1 Section 44. Gasoline Service Stations:
In business or industrial zones, no gasoline service station, commercial gasoline bus station or public
parking lot shall be allowed within one hundred (100) meters away from any public or private school,
public library, playground, church, and hospital based on the straight line method measured from the
nearest side of the building nearest the lot if there are no intervening buildings to the nearest pump of
the gasoline station; records, pp. 69-70. (italics supplied)
2 Rollo, pp. 9-10.
3 HLURB Case No. TPZ-C-01-9-0003, entitled "Jose Jovellanos v. Dennis Parayno."
4 Rollo, pp. 72-75.
5 CA-G.R. SP No. 61838.
6 Rollo, p. 7.
7 Rollo, p. 39.
8 Id., p. 40.
9 Annex "E," rollo, p. 70.
10
Section 4, Rule 129, Rules of Court; see also Evidence, by R.J. Francisco, 1996 Edition.
11 Memorandum of Respondent, rollo, p. 125.
12 Ching v. Salinas, G.R. No. 161295, 29 June 2005.
NFA v. Masada Security Agency, Inc., G.R. No. 163448, 8 March 2005, 453 SCRA 70; Strong v. Repide, 6
13
Phil. 680 (1906).
14The Local Government Code of 1991; Section 16. General Welfare.― Every local government unit shall
exercise the powers expressly granted, those necessarily implied therefrom, as well as powers necessary,
appropriate, or incidental for its efficient and effective governance, and those which are essential to the
promotion of the general welfare within their respective territorial jurisdictions. Local government units shall
ensure and support, among other things, the preservation and enrichment of culture, promote health and
safety, enhance the right of the people to a balanced ecology, encourage and support the development of
appropriate and self-reliant scientific technological capabilities, improve public morals, enhance economic
prosperity and social justice, promote full employment among their residents xxx.
15 Lucena Grand Central Terminal, Inc. v. JAC Liner, Inc., G.R. No. 148339, 23 February 2005, 452 SCRA 174.
16 Id.
17 Monteverde v. Generoso, 52 Phil. 123 (1982).
18Factual issues are not within the province of the Supreme Court, as it is not a trier of facts and it is not
required to examine or contrast the oral and documentary evidence de novo. Nevertheless, the Court has the
authority to review, even reverse, the factual findings of lower courts in exceptional instances. (Lagon v.
Hooven Comalco Industries, Inc., G.R. No. 135657, 17 January 2001, 349 SCRA 363.)
19 Rollo, p. 66.
20 Id., p. 65.
21 Taganas v. Emuslan, G.R. No. 146980, 2 September 2003, 410 SCRA 237.
22Development Bank of the Philippines v. La Campana Development Corporation, G.R. No. 137694, 17
January 2005, 448 SCRA 384.
23 Carlet v. Court of Appeals, 341 Phil. 99 (1997).
24 Id.
25 Heirs of the Late Faustina Adalid v. Court of Appeals, G.R. No. 122202, 26 May 2005, 459 SCRA 27.
26 Sempio v. Court of Appeals, 348 Phil. 627 (1998).
27 Id.
SUPREME COURT
Manila
EN BANC
G.R. No. 14129 July 31, 1962
PEOPLE OF THE PHILIPPINES, plaintiff-appellant,

vs.
GUILLERMO MANANTAN, defendant-appellee.
Office of the Solicitor General for plaintiff-appellant.

Padilla Law Office for defendant-appellee.
REGALA, J.:
This is an appeal of the Solicitor General from the order of the Court of First Instance of Pangasinan dismissing the
information against the defendant.
The records show that the statement of the case and the facts, as recited in the brief of plaintiff-appellant, is complete
and accurate. The same is, consequently, here adopted, to wit:
In an information filed by the Provincial Fiscal of Pangasinan in the Court of First Instance of that Province,
defendant Guillermo Manantan was charged with a violation Section 54 of the Revised Election Code. A
preliminary investigation conducted by said court resulted in the finding a probable cause that the crime
charged as committed by defendant. Thereafter, the trial started upon defendant's plea of not guilty, the
defense moved to dismiss the information on the ground that as justice of the peace the defendant is one of the
officers enumerated in Section 54 of the Revised Election Code. The lower court denied the motion to dismiss
holding that a justice of the peace is within the purview Section 54. A second motion was filed by defense
counsel who cited in support thereof the decision of the Court of Appeals in People vs. Macaraeg, (CA-G.R.
No. 15613-R, 54 Off. Gaz., pp. 1873-76) where it was held that a justice of the peace is excluded from the
prohibition of Section 54 of the Revised Election Code. Acting on this second motion to dismiss, the answer of
the prosecution, the reply of the defense, and the opposition of the prosecution, the lower court dismissed the
information against the accused upon the authority of the ruling in the case cited by the defense.
Both parties are submitting this case upon the determination of this single question of law: Is a justice the peace
included in the prohibition of Section 54 of the Revised Election Code?
Section 54 of the said Code reads:
No justice, judge, fiscal, treasurer, or assessor of any province, no officer or employee of the Army, no member
of the national, provincial, city, municipal or rural police force and no classified civil service officer or employee
shall aid any candidate, or exert any influence in any manner in a election or take part therein, except to vote, if
entitled thereto, or to preserve public peace, if he is a peace officer.
Defendant-appellee argues that a justice of the peace is not comprehended among the officers enumerated in Section
54 of the Revised Election Code. He submits the aforecited section was taken from Section 449 of the Revised
Administrative Code, which provided the following:
SEC. 449. Persons prohibited from influencing elections. — No judge of the First Instance, justice of the peace,
or treasurer, fiscal or assessor of any province and no officer or employee of the Philippine Constabulary, or
any Bureau or employee of the classified civil service, shall aid any candidate or exert influence in any manner
in any election or take part therein otherwise than exercising the right to vote.
When, therefore, section 54 of the Revised Election Code omitted the words "justice of the peace," the omission
revealed the intention of the Legislature to exclude justices of the peace from its operation.
The above argument overlooks one fundamental fact. It is to be noted that under Section 449 of the Revised
Administrative Code, the word "judge" was modified or qualified by the phrase "of First instance", while under Section
54 of the Revised Election Code, no such modification exists. In other words, justices of the peace were expressly
included in Section 449 of the Revised Administrative Code because the kinds of judges therein were specified, i.e.,
judge of the First Instance and justice of the peace. In Section 54, however, there was no necessity therefore to include
justices of the peace in the enumeration because the legislature had availed itself of the more generic and broader
term, "judge." It was a term not modified by any word or phrase and was intended to comprehend all kinds of judges,
like judges of the courts of First Instance, Judges of the courts of Agrarian Relations, judges of the courts of Industrial
Relations, and justices of the peace.
It is a well known fact that a justice of the peace is sometimes addressed as "judge" in this jurisdiction. It is because a
justice of the peace is indeed a judge. A "judge" is a public officer, who, by virtue of his office, is clothed with judicial
authority (U.S. v. Clark, 25 Fed. Cas. 441, 422). According to Bouvier Law Dictionary, "a judge is a public officer
lawfully appointed to decide litigated questions according to law. In its most extensive sense the term includes all
officers appointed to decide litigated questions while acting in that capacity, including justices of the peace, and even
jurors, it is said, who are judges of facts."
A review of the history of the Revised Election Code will help to justify and clarify the above conclusion.
The first election law in the Philippines was Act 1582 enacted by the Philippine Commission in 1907, and which was
later amended by Act. Nos. 1669, 1709, 1726 and 1768. (Of these 4 amendments, however, only Act No. 1709 has a
relation to the discussion of the instant case as shall be shown later.) Act No. 1582, with its subsequent 4 amendments
were later on incorporated Chapter 18 of the Administrative Code. Under the Philippine Legislature, several
amendments were made through the passage of Acts Nos. 2310, 3336 and 3387. (Again, of these last 3 amendments,
only Act No. 3587 has pertinent to the case at bar as shall be seen later.) During the time of the Commonwealth, the
National Assembly passed Commonwealth Act No. 23 and later on enacted Commonwealth Act No. 357, which was
the law enforced until June 1947, when the Revised Election Code was approved. Included as its basic provisions are
the provisions of Commonwealth Acts Nos. 233, 357, 605, 666, 657. The present Code was further amended by
Republic Acts Nos. 599, 867, 2242 and again, during the session of Congress in 1960, amended by Rep. Acts Nos.
3036 and 3038. In the history of our election law, the following should be noted:
Under Act 1582, Section 29, it was provided:
No public officer shall offer himself as a candidate for elections, nor shall he be eligible during the time that he
holds said public office to election at any municipal, provincial or Assembly election, except for reelection to the
position which he may be holding, and no judge of the First Instance, justice of the peace, provincial fiscal, or
officer or employee of the Philippine Constabulary or of the Bureau of Education shall aid any candidate or
influence in any manner or take part in any municipal, provincial, or Assembly election under the penalty of
being deprived of his office and being disqualified to hold any public office whatsoever for a term of 5
year: Provide, however, That the foregoing provisions shall not be construe to deprive any person otherwise
qualified of the right to vote it any election." (Enacted January 9, 1907; Took effect on January 15, 1907.)
Then, in Act 1709, Sec. 6, it was likewise provided:
. . . No judge of the First Instance, Justice of the peace provincial fiscal or officer or employee of the Bureau of
Constabulary or of the Bureau of Education shall aid any candidate or influence in any manner to take part in
any municipal provincial or Assembly election. Any person violating the provisions of this section shall be
deprived of his office or employment and shall be disqualified to hold any public office or employment whatever
for a term of 5 years, Provided, however, that the foregoing provisions shall not be construed to deprive any
person otherwise qualified of the right to vote at any election. (Enacted on August 31, 1907; Took effect on
September 15, 1907.)
Again, when the existing election laws were incorporated in the Administrative Code on March 10, 1917, the provisions
in question read:
SEC. 449. Persons prohibited from influencing elections. — No judge of the First Instance, justice of the peace,
or treasurer, fiscal or assessor of any province and no officer or employee of the Philippine Constabulary or any
Bureau or employee of the classified civil service, shall aid any candidate or exert influence in any manner in
any election or take part therein otherwise than exercising the right to vote. (Emphasis supplied)
After the Administrative Code, the next pertinent legislation was Act No. 3387. This Act reads:
SEC. 2636. Officers and employees meddling with the election. — Any judge of the First Instance, justice of the
peace, treasurer, fiscal or assessor of any province, any officer or employee of the Philippine Constabulary or
of the police of any municipality, or any officer or employee of any Bureau of the classified civil service, who
aids any candidate or violated in any manner the provisions of this section or takes part in any election
otherwise by exercising the right to vote, shall be punished by a fine of not less than P100.00 nor more than
P2,000.00, or by imprisonment for not less than 2 months nor more than 2 years, and in all cases by
disqualification from public office and deprivation of the right of suffrage for a period of 5 years. (Approved
December 3, 1927.) (Emphasis supplied.)
Subsequently, however, Commonwealth Act No. 357 was enacted on August 22, 1938. This law provided in Section
48:
SEC. 48. Active Interventation of Public Officers and Employees. — No justice, judge, fiscal, treasurer or
assessor of any province, no officer or employee of the Army, the Constabulary of the national, provincial,
municipal or rural police, and no classified civil service officer or employee shall aid any candidate, nor exert
influence in any manner in any election nor take part therein, except to vote, if entitled thereto, or to preserve
public peace, if he is a peace officer.
This last law was the legislation from which Section 54 of the Revised Election Code was taken.
It will thus be observed from the foregoing narration of the legislative development or history of Section 54 of the
Revised Election Code that the first omission of the word "justice of the peace" was effected in Section 48 of
Commonwealth Act No. 357 and not in the present code as averred by defendant-appellee. Note carefully, however,
that in the two instances when the words "justice of the peace" were omitted (in Com. Act No. 357 and Rep. Act No.
180), the word "judge" which preceded in the enumeration did not carry the qualification "of the First Instance." In other
words, whenever the word "judge" was qualified by the phrase "of the First Instance", the words "justice of the peace"
would follow; however, if the law simply said "judge," the words "justice of the peace" were omitted.
The above-mentioned pattern of congressional phraseology would seem to justify the conclusion that when the
legislature omitted the words "justice of the peace" in Rep. Act No. 180, it did not intend to exempt the said officer from
its operation. Rather, it had considered the said officer as already comprehended in the broader term "judge".
It is unfortunate and regrettable that the last World War had destroyed congressional records which might have offered
some explanation of the discussion of Com. Act No. 357 which legislation, as indicated above, has eliminated for the
first time the words "justice of the peace." Having been completely destroyed, all efforts to seek deeper and additional
clarifications from these records proved futile. Nevertheless, the conclusions drawn from the historical background of
Rep. Act No. 180 is sufficiently borne out by reason hid equity.
Defendant further argues that he cannot possibly be among the officers enumerated in Section 54 inasmuch as under
that said section, the word "judge" is modified or qualified by the phrase "of any province." The last mentioned phrase,
defendant submits, cannot then refer to a justice of the peace since the latter is not an officer of a province but of a
municipality.
Defendant's argument in that respect is too strained. If it is true that the phrase "of any province" necessarily removes
justices of the peace from the enumeration for the reason that they are municipal and not provincial officials, then the
same thing may be said of the Justices of the Supreme Court and of the Court of Appeals. They are national officials.
Yet, can there be any doubt that Justices of the Supreme Court and of the Court of Appeals are not included in the
prohibition? The more sensible and logical interpretation of the said phrase is that it qualifies fiscals, treasurers and
assessors who are generally known as provincial officers.
The rule of "casus omisus pro omisso habendus est" is likewise invoked by the defendant-appellee. Under the said
rule, a person, object or thing omitted from an enumeration must be held to have been omitted intentionally. If that rule
is applicable to the present, then indeed, justices of the peace must be held to have been intentionally and deliberately
exempted from the operation of Section 54 of the Revised Election Code.
The rule has no applicability to the case at bar. The maxim "casus omisus" can operate and apply only if and when the
omission has been clearly established. In the case under consideration, it has already been shown that the legislature
did not exclude or omit justices of the peace from the enumeration of officers precluded from engaging in partisan
political activities. Rather, they were merely called by another term. In the new law, or Section 54 of the Revised
Election Code, justices of the peace were just called "judges."
In insisting on the application of the rule of "casus omisus" to this case, defendant-appellee cites authorities to the
effect that the said rule, being restrictive in nature, has more particular application to statutes that should be strictly
construed. It is pointed out that Section 54 must be strictly construed against the government since proceedings under
it are criminal in nature and the jurisprudence is settled that penal statutes should be strictly interpreted against the
state.
Amplifying on the above argument regarding strict interpretation of penal statutes, defendant asserts that the spirit of
fair play and due process demand such strict construction in order to give "fair warning of what the law intends to do, if
a certain line is passed, in language that the common world will understand." (Justice Holmes, in McBoyle v. U.S., 283
U.S. 25, L. Ed. 816).
The application of the rule of "casus omisus" does not proceed from the mere fact that a case is criminal in nature, but
rather from a reasonable certainty that a particular person, object or thing has been omitted from a legislative
enumeration. In the present case, and for reasons already mentioned, there has been no such omission. There has
only been a substitution of terms.
The rule that penal statutes are given a strict construction is not the only factor controlling the interpretation of such
laws; instead, the rule merely serves as an additional, single factor to be considered as an aid in determining the
meaning of penal laws. This has been recognized time and again by decisions of various courts. (3 Sutherland,
Statutory Construction, p. 56.) Thus, cases will frequently be found enunciating the principle that the intent of the
legislature will govern (U.S. vs. Corbet, 215 U.S. 233). It is to be noted that a strict construction should not be permitted
to defeat the policy and purposes of the statute (Ash Sheep Co. v. U.S., 252 U.S. 159). The court may consider the
spirit and reason of a statute, as in this particular instance, where a literal meaning would lead to absurdity,
contradiction, injustice, or would defeat the clear purpose of the law makers (Crawford, Interpretation of Laws, Sec. 78,
p. 294). A Federal District court in the U.S. has well said:
The strict construction of a criminal statute does not mean such construction of it as to deprive it of the meaning
intended. Penal statutes must be construed in the sense which best harmonizes with their intent and purpose.
(U.S. v. Betteridge 43 F. Supp. 53, 56, cited in 3 Sutherland Statutory Construction 56.)
As well stated by the Supreme Court of the United States, the language of criminal statutes, frequently, has been
narrowed where the letter includes situations inconsistent with the legislative plan (U.S. v. Katz, 271 U.S. 354; See also
Ernest Brunchen, Interpretation of the Written Law (1915) 25 Yale L.J. 129.)
Another reason in support of the conclusion reached herein is the fact that the purpose of the statute is to enlarge the
officers within its purview. Justices of the Supreme Court, the Court of Appeals, and various judges, such as the judges
of the Court of Industrial Relations, judges of the Court of Agrarian Relations, etc., who were not included in the
prohibition under the old statute, are now within its encompass. If such were the evident purpose, can the legislature
intend to eliminate the justice of the peace within its orbit? Certainly not. This point is fully explained in the brief of the
Solicitor General, to wit:
On the other hand, when the legislature eliminated the phrases "Judge of First Instance" and justice of the
peace", found in Section 449 of the Revised Administrative Code, and used "judge" in lieu thereof, the obvious
intention was to include in the scope of the term not just one class of judges but all judges, whether of first
Instance justices of the peace or special courts, such as judges of the Court of Industrial Relations. . . . .
The weakest link in our judicial system is the justice of the peace court, and to so construe the law as to allow a
judge thereof to engage in partisan political activities would weaken rather than strengthen the judiciary. On the
other hand, there are cogent reasons found in the Revised Election Code itself why justices of the peace
should be prohibited from electioneering. Along with Justices of the appellate courts and judges of the Court of
First Instance, they are given authority and jurisdiction over certain election cases (See Secs. 103, 104, 117-
123). Justices of the peace are authorized to hear and decided inclusion and exclusion cases, and if they are
permitted to campaign for candidates for an elective office the impartiality of their decisions in election cases
would be open to serious doubt. We do not believe that the legislature had, in Section 54 of the Revised
Election Code, intended to create such an unfortunate situation. (pp. 708, Appellant's Brief.)
Another factor which fortifies the conclusion reached herein is the fact that the administrative or executive department
has regarded justices of the peace within the purview of Section 54 of the Revised Election Code.
In Tranquilino O. Calo, Jr. v. The Executive Secretary, the Secretary of Justice, etc. (G.R. No. L-12601), this Court did
not give due course to the petition for certiorari and prohibition with preliminary injunction against the respondents, for
not setting aside, among others, Administrative Order No. 237, dated March 31, 1957, of the President of the
Philippines, dismissing the petitioner as justice of the peace of Carmen, Agusan. It is worthy of note that one of the
causes of the separation of the petitioner was the fact that he was found guilty in engaging in electioneering, contrary
to the provisions of the Election Code.
Defendant-appellee calls the attention of this Court to House Bill No. 2676, which was filed on January 25, 1955. In that
proposed legislation, under Section 56, justices of the peace are already expressly included among the officers
enjoined from active political participation. The argument is that with the filing of the said House Bill, Congress impliedly
acknowledged that existing laws do not prohibit justices of the peace from partisan political activities.
The argument is unacceptable. To begin with, House Bill No. 2676 was a proposed amendment to Rep. Act No. 180 as
a whole and not merely to section 54 of said Rep. Act No. 180. In other words, House Bill No. 2676 was a proposed re-
codification of the existing election laws at the time that it was filed. Besides, the proposed amendment, until it has
become a law, cannot be considered to contain or manifest any legislative intent. If the motives, opinions, and the
reasons expressed by the individual members of the legislature even in debates, cannot be properly taken into
consideration in ascertaining the meaning of a statute (Crawford, Statutory Construction, Sec. 213, pp. 375-376),
a fortiori what weight can We give to a mere draft of a bill.
On law reason and public policy, defendant-appellee's contention that justices of the peace are not covered by the
injunction of Section 54 must be rejected. To accept it is to render ineffective a policy so clearly and emphatically laid
down by the legislature.
Our law-making body has consistently prohibited justices of the peace from participating in partisan politics. They were
prohibited under the old Election Law since 1907 (Act No. 1582 and Act No. 1709). Likewise, they were so enjoined by
the Revised Administrative Code. Another which expressed the prohibition to them was Act No. 3387, and later, Com.
Act No. 357.
Lastly, it is observed that both the Court of Appeals and the trial court applied the rule of "expressio unius, est
exclusion alterius" in arriving at the conclusion that justices of the peace are not covered by Section 54. Said the Court
of Appeals: "Anyway, guided by the rule of exclusion, otherwise known as expressio unius est exclusion alterius, it
would not be beyond reason to infer that there was an intention of omitting the term "justice of the peace from Section
54 of the Revised Election Code. . . ."
The rule has no application. If the legislature had intended to exclude a justice of the peace from the purview of Section
54, neither the trial court nor the Court of Appeals has given the reason for the exclusion. Indeed, there appears no
reason for the alleged change. Hence, the rule of expressio unius est exclusion alterius has been erroneously applied.
(Appellant's Brief, p. 6.)
Where a statute appears on its face to limit the operation of its provisions to particular persons or things by
enumerating them, but no reason exists why other persons or things not so enumerated should not have been
included, and manifest injustice will follow by not so including them, the maxim expressio unius est exclusion
alterius, should not be invoked. (Blevins v. Mullally 135 p. 307, 22 Cal. App. 519.) .
FOR THE ABOVE REASONS, the order of dismissal entered by the trial court should be set aside and this case is
remanded for trial on the merits.
Bengzon, C.J., Bautista Angelo, Labrador, Concepcion, Barrera and Makalintal, JJ., concur.
Padilla and Dizon, JJ., took no part.
Reyes, J.B.L., J., is on leave.
SUPREME COURT
Manila
EN BANC
G.R. No. L-9274 February 1, 1957
RUFINO LOPEZ & SONS, INC., petitioner,

vs.
THE COURT OF TAX APPEALS, respondent.
Isidro A. Vera and Eulalio F. Legaspi for petitioner.

Office of the Solicitor General Ambrosio Padila, Assistant Solicitor General Ramon L. Avanceña and Solicitor
Felicisimo R. Rosete for respondent.
MONTEMAYOR, J.:
Petitioner appellant Rufino Lopez & Sons, Inc. is appealing from a resolution of the Court of Tax Appeals dismissing its
appeal from a decision of the Collector of Customs for the Port of Manila, assessing additional fees on petitioner for a
certain importation of wire netting. The facts are simple and undisputed. Lopez & Sons imported hexagonal wire netting
from Hamburg, Germany. The Manila Collector of Customs assessed the corresponding customs duties on the
importation on the basis of consular and supplies invoices. Said customs duties were paid and the shipments were
released. Subsequently, however, and freight of said wire netting and as a result of the reassessment, additional
customs duties in the amount of P1,966.59 were levied and imposed upon petitioner. Failing to secure a
reconsideration of the reassessment and levy of additional customs duties, Lopez & Sons appealed to the Court of Tax
Appeals. Acting upon a motion to dismiss the appeal, filed by the Solicitor General on the ground of lack of jurisdiction,
the Tax Court, by its resolution of May 23, 1955, dismissed the appeal on the ground that it had no jurisdiction to
review decisions of the Collector of Customs of Manila, citing section 7 of Republic Act No. 1125, creating said tax
court. From said resolution of dismissal, Lopez & Sons appealed to us, seeking a reversal of said resolution of
dismissal.
For purposes of reference, we are reproducing section 7 of Republic Act No. 1125 relied upon by the Tax Court and
the Solicitor General, as well as Section 11 of the same Act invoked by the petitioner:
Sec. 7. Jurisdiction. — The Court of Tax Appeals shall exercise exclusive appellate jurisdiction to review by
appeal, as herein provided —
(1) Decisions of the Collector of Internal Revenue in cases involving disputed assessments, refunds of internal
revenue taxes, fees or other charges, penalties imposed in relation thereto, or other matters arising under the
National Internal Revenue Code or other law or part of law administered by the Bureau of Internal Revenue;
(2) Decisions of the Commissioner of Customs in cases involving liability for customs duties, fees or other
money charges, seizure, detention or release of property affected; fines, forfeitures or other penalties imposed
in relation thereto, or other matters arising under the Customs Law or other law or part of law administered by
the Bureau of Customs; and
(3) Decisions of provincial or city Board of Assessment Appeals in case involving the assessment and taxation
of real property or other matters arising under the assessment Law, including rules and regulations relative
thereto.
xxx xxx xxx
SEC. 11. Who may appeal; effect of appeal. — Any person, association or corporation adversely by a decision
or ruling of the Collector of Internal Revenue, the Collector of Customs or any provincial or city Board of
Assessment Appeals may file an appeal in the Court of Tax Appeals within thirty days after the receipt of such
decision or ruling.
No appeal taken to the Court of Tax Appeals from the decision of the Collector of Internal Revenue or the
Collector of the Customs shall suspend the payment, levy, distraint, and/or sale of any property of the taxpayer
for the satisfaction of his tax liability as provided by existing law: Provided, however, that when in the opinion of
the Court the collection by the Bureau of Internal Revenue or the Commissioner of Customs may jeopardize
the interests of the Government and/or the taxpayer the Court at any stage of the proceeding may suspend the
said collection and require the taxpayer either to deposit the amount claimed or to file a surety bond for not
more than double the amount with the Court. (Emphasis supplied.)
There is really a discrepancy between Sections 7 and 11 above reproduced. Section 7 provides that the Court of Tax
Appeals has exclusive appellate jurisdiction to review by appeal decisions of the Collector of Internal Revenue,
decisions of the Commissioner of Customs and decisions of provincial or city Board of Assessment Appeals on cases
mentioned in said section. On the other hand, section 11 of the same Republic Act in listing and enumerating the
persons and entities who may appeal as well as the effect of said appeal, mentions those affected by a decision or
ruling of the Collector of Internal Revenue, the Collector of Customs or any provincial or City Board of Assessment
Appeals, and fails to mention the Commissioner of Customs. Taken literally, a person affected by a decision of the
Collector of Customs may appeal to the Court of Tax Appeals; and since no mention is made about decisions of the
Commissioner of Customs, a person affected by said decision may not appeal to the Court of Tax Appeals. However,
section 7 of the Act above reproduced specially provides that the Court of Tax Appeals has appellate jurisdiction to
review decisions of the Commissioner of Customs. That legal provision conferring appellate jurisdiction on the Court of
Tax Appeals to review decisions of the Commissioner of Customs would be empty, meaningless, and unenforceable
because under Section 11, no person affected by the decision of the Commissioner of customs may appeal to the Tax
Court. These two meaningless, and unenforceable because under Section 11, should be harmonized and reconciled if
possible, in order to give effect to the whole Act.
We are in entire accord with the Tax Court and the Solicitor General that a clerical error was committed in section 11,
mentioning therein the Collector of Customs. It should be, as it was meant to be, the Commissioner of Customs. There
are several reasons in support of this view. Under the Customs Law, found in sections 1137 to 1419 of the Revised
Administrative Code, the Commissioner of Customs (Insular Collector of Customs) is the Chief of the Bureau of
Customs and has jurisdiction over the whole country as regards the enforcement of the Customs Law, whereas, there
are about sixteen Collectors of Customs for the sixteen collection districts and principal parts of entry into which the
Philippines has been divided. These Collectors of Customs are subordinates of the Commissioner of Customs over
whom he has supervision and control (section 1152, Revised Administrative Code). Pursuant to said supervision and
control, under section 1405 of the Revised Administrative Code, when any new or unsettled question shall be
determined by the Collector of Customs, he shall, if matter is not otherwise carried upon for review in ordinary course,
notify the Commissioner of his decision, submitting an adequate statement of acts involved. What is more important is
the provision of section 1380, which reproduce below:
SEC. 1380. Review by Commissioner. — The person aggrieved by the decision of the Collector of Customs in
any matter presented upon protest or by his action in any case of seizure may, within fifteen days after
notification in writing by the collector of his action or decision, give written notice to the collector signifying his
desore to have the matter reviewed by the Commissioner.
Thereupon, the Collector of Customs shall forthwith transmit all the papers in the cause to the Commissioner,
who shall approve, modify, or reverse the action of his subordinate and shall take such steps and make such
order or orders as may be necessary to give effect to his decision.
Under this section, any person affected or aggrieved by the decision of the Collector of Customs may appeal the
decision to the Commissioner of Customs. From all this, it is clear if we followed the literal meaning and wording of
section 11 of Republic Act No. 1125, in the sense that persons affected by a decision of the Collector of Customs may
appeal directly tot he Court of Tax Appeals, then the supervision and control of the Commissioner of Customs over his
Collector of Customs, and his right to review their decisions upon appeal to him by the persons affected by said
decision would, not only be gravely affected, but even destroyed. We cannot believe that was the intention of the
Legislature in passing Republic Act No. 1125. It is more reasonable and logical to hold that in Section 11 of the Act, the
Legislature meant and intended to say, the Commissioner of Customs, instead of Collector of Customs in the first
paragraph and the first part of the second paragraph of said section. In thus holding, the Court are not exactly indulging
in judicial legislation. They are merely endeavoring to rectify and correct a clearly clerical error in the wording of a
statute, in order to give due course and carry out the evident intention of the Legislature. This the Courts should and
can validly do. Under the rules of statutory construction, it is not the letter but rather the spirit of the law and intention of
the Legislature that is important and which matters. When the interpretation of a statute according to the exact and
literal import of its words would lead to absurd or mischievous results, or would contravene the clear purposes of the
Legislature, it should be construed according to its spirit and reason, disregarding as far as necessary, the latter of the
law. Statutes may be extended to cover cases not within the literal meaning of the terms, for that which is clearly within
the intention of the Legislature in enacting the law is as much within the statute as if it were within the latter. Here the
error (clerical and misprint) is plain and obvious. It is within the province of the courts to correct said error. This is not to
correct the act of the Legislature, but rather to carry out and give due course to the true intention of said Legislature.
(Black on Interpretation of Laws, 2nd edition, pp. 66-67; 157-158.).
Furthermore, section 11 of Republic Act 1125 may well be regarded as a mere complement or implementation of
section 7. Since section 7 provides that the Tax Court has jurisdiction to review by appeal, decisions of the Collector of
Internal Revenue. decisions of the Commissioner of Customs, and decisions of provincial or city Boards of Assessment
Appeals, so section 11 naturally provides that persons adversely affected by said decisions may appeal to the Tax
Court. However, in enumerating the governmental bodies or agencies rendering said decisions that may be appealed,
it erroneously listed the Collector instead of the Commissioner, of Customs. The error is plain.
As a matter of fact, the Court of Tax Appeals in its resolution of dismissal of May 23, 1955 cites in support thereof a
resolution promulgated by it on January 22, 1955 in C.T.A. Case No. 17, entitled "Acting Collector of
Customs vs.Acting Commissioner of Customs", wherein it said:
The phrase "Collector of Customs" appearing in the above-mentioned provision (section 11) of Republic Act
No. 1125 is clearly an oversight on the part of Congress. It should read "Commissioner of Customs" to make
the provision conform with section 7 of the said Republic Act section 1380 of the Revised Administrative Code.
Petitioner contends that the literal meaning of Section 11 of Republic Act No. 1125 should be adopted in the sense that
the Court of Tax Appeals has concurrent jurisdiction with the Commissioner of Customs over Appeals from decisions of
Collectors of Customs, so that a person adversely affected by a decision of a Collector of Customs is given the choice
of appealing the said decision either to the Commissioner of Customs or to the Courts of Tax Appeals. We find
contention unteable. In the first place, the two remedies suggested are entirely different, one from the other; an appeal
to the Commissioner of Customs is purely administrative, whereas, appeal to the Court of Tax Appeal is manifestly
judicial. And it is a sound rule that before one resorts to the Courts, the administrative remedy provided by law should
first be exhausted. In the second place, the two remedies suggested by the petitioner would result in confusion
because a person adversely affected by a decision of a Collector of Customs could not be sure where to seek the
remedy, whether with the Commissioner of Customs or with the Court of Tax Appeals, and it might even be difficult for
him to decide because, if he took the appeal directly to the Tax Court, that would ordinarily cut off his remedy before
the Commissioner of Customs for the reason that, should the Court of Tax Appeals decide against him, he may not
appeal said decision to the Commissioner of Customs because the Commissioner as an administrative officer may not
review the decision of the Court. On the other hand, if the person affected by a decision of a Collector of Customs took
his appeal to the Commissioner of Customs, and there receives an adverse decision, he may yet appeal therefrom to
the Court of Tax Appeals. In the third place, even if the person affected by an adverse ruling of the Collector of
Customs took his appeal to the Court of Tax Appeals, as advocated by counsel for the petitioner, under the literal
meaning of section 11, the Tax Court may refuse to entertain said appeal, as was done in the present case, on the
ground that under section 7 of Republic Act No. 1125, it had no jurisdiction to review a decision of the Collector of
Customs, section 7 clearly limiting its appellate jurisdiction to review decisions of the Commissioner of Customs.
In view of the foregoing, we hold that under the law, particularly, the Customs Law and Republic Act No. 1125, the
Court of Tax Appeals has no jurisdiction to review by appeal, decisions of the Collector of Customs. The appealed
order of dismissal is hereby affirmed, with costs.
Paras, C.J., Bengzon, Padilla, Reyes, A., Bautista Angelo Labrador, Concepcion, Reyes, J.B.L., Endencia and Felix,
JJ., concur.
SUPREME COURT
Manila
EN BANC
G.R. No. L-68709 July 19, 1985
NAPOLEON E. SANCIANGCO, petitioner,

vs.
THE HONORABLE JOSE A. ROÑO Minister, Ministry of Local Government; THE SANGGUNIANG
PANLUNGSOD OF OZAMIZ CITY; THE HONORABLE BENJAMIN A. FUENTES, Vice Mayor of Ozamiz City and
Presiding Officer of the Sangguniang Panlungsod of Ozamiz City; THE HONORABLE ANTONIO G.
CABALLERO, JESUS S. ANONAT, MANUEL T. CORTES, IRENE S. LUANSING, REMEDIOS J. RAMIRO,
DOMINADOR B. BORJE, FILOMENO L. ROMERO, FLORENCIO L. GARCIA, and HARRY S. OAMINAL Members,
Sangguniang Panlungsod of Ozamiz City, respondents.
Abraham F. Sarmiento and Mariano Sarmiento for petitioner.
The Solicitor General for respondents.
MELENCIO-HERRERA, J.:
The sole issue for determination in this Petition for Certiorari, Prohibition and mandamus with Preliminary Injunction
and/or Restraining Order is whether or not an appointive member of the Sangguniang Panlungsod, who ran for the
position of Mambabatas Pambansa in the elections of May 14, 1984, should be considered as resigned or on forced
leave of absence upon the filing of his Certificate of Candidacy. The resolution of the controversy hinges on the
construction to be given to Section 13 of Batas Pambansa Blg, 697, which provides as follows:
Sec. 13. Effects of filing of certificate of candidacy.
(1) Any person holding a public appointive office or position, including active officers and members of
the Armed Forces of the Philippines and the Integrated National Police, as well as officials and
employees of government-owned and government-controlled corporations and their subsidiaries, shall
ipso facto cease in office or position as of the time he filed his certificate of candidacy: Provided,
however, that the Prime Minister, the Deputy Prime Minister, the Members of the Cabinet, and the
Deputy Ministers shall continue in the offices they presently hold notwithstanding the filing of their
certificates of candidacy.
(2) Governors, mayors, members of the various sanggunians or barangay officials shall, upon filing
certificate of candidacy be considered on forced leave of absence from office. (Emphasis supplied)
Petitioner was elected Barangay Captain of Barangay Sta. Cruz, Ozamiz City, in the May 17, 1982 Barangay elections.
Later, he was elected President of the Association of Barangay Councils (ABC) of Ozamiz City by the Board of
Directors of the said Association. As the President of the Association, petitioner was appointed by the President of the
Philippines as a member of the City's Sangguniang Panlungsod.
On March 27, 1984, petitioner filed his Certificate of Candidacy for the May 14, 1984 Batasan Pambansa elections for
Misamis Occidental under the banner of the Mindanao Alliance. He was not successful in the said election.
Invoking Section 13(2), Article 5 of Batas Pambansa Blg. 697 (supra), petitioner informed respondent Vice-Mayor
Benjamin A. Fuentes, Presiding Officer of the Sangguniang Panlungsod, that he was resuming his duties as member of
that body. The matter was elevated to respondent Minister of Local Government Jose A. Rono who ruled that since
petitioner is an appointive official, he is deemed to have resigned from his appointive position upon the filing of his
Certificate of Candidacy.
Petitioner impugns said ruling on the ground that since Section 13(2) of Batasan Pambansa Blg. 697 makes no
distinction between elective and appointive officials, the legislative intent is clear that even appointive Barangay
officials are deemed also covered by the said provision.
There is no question that petitioner holds a public appointive position. He was appointed by the President as a member
of the City's Sangguniang Panlungsod by virtue of his having been elected President of the Association of Barangay
Councils. This was pursuant to Section 3, paragraph 1 of Batas Pambansa Blg. 51 (An Act Providing for the elective or
Appointive Positions in Various Local Governments and for Other Purposes), which provides that:
Sec. 3. Cities. —There shall be in each city such elective local officials as provided in their respective
charters, including the city mayor, the city vice-mayor, and the elective members of the sangguniang
panglungsod, all of whom shall be elected by the qualified voters in the city. In addition thereto, there
shall be appointive sangguniang panglungsod members consisting of the president of the city
association of barangay councils, the president of the city federation of the kabataang barangay, and
one representative each from the agricultural and industrial labor sectors who shall be appointed by,
the president (Prime Minister) whenever, as determined by the sangguniang panglungsod, said sectors
are of sufficient number in the city to warrant representation. (emphasis supplied)
The appointive character of petitioner's position was reiterated in Section 173 of the Local Government Code (B.P. Blg.
337), reading as follows:
Sec 173. Composition and Compensation. — (1) the sangguniang panlungsod, as the legislative body
of the city, shall be composed of the vice-mayor, as presiding officer, the elected sangguniang
panlungsod members, and the members who may be appointed by the President of the Philippines
consisting of the presidents of the Katipunan panglungsod ng mga barangay and the Kabataang
barangay, city federation. (Emphasis supplied)
Since petitioner is unquestionably an appointive member of the Sangguniang Panlungsod of Ozamiz City, he is
deemed to have ipso facto ceased to be such member when he filed his certificate of candidacy for the May 14, 1984
Batasan elections.
Petitioner avers, however, that the fact that he is merely an appointive member of the Sangguniang Panlungsod of
Ozamiz City "is really of no moment since subsection 2, Section 13. B.P. 697, makes no distinction between elective
and appointive officials, and at any rate, legislative intent makes clear that appointive officials are deemed covered by
the provision.
Although it may be that Section 13(2), B.P. Blg. 697, admits of more than one construction, taking into consideration
the nature of the positions of the officials enumerated therein, namely, governors, mayors, members of the various
sanggunians or barangay officials, the legislative intent to distinguish between elective positions in section 13(2), as
contrasted to appointive positions in section 13(l) under the all-encompassing clause reading "any person holding
public appointive office or position," is clear. It is a rule of statutory construction that "when the language of a particular
section of a statute admits of more than one construction, that construction which gives effect to the evident purpose
and object sought to be attained by the enactment of the statute as a whole, must be followed." 1
A statute's clauses and phrases should not be taken as detached and isolated expressions, but the
whole and every part thereof must be considered in fixing the meaning of any of its parts. 2
The legislative intent to cover public appointive officials in subsection (1), and officials mentioned in subsection (2)
which should be construed to refer to local elective officials, can be gleaned from the proceedings of the Batasan
Pambansa recorded as follows:
Mr. Valdez: ... May I go to paragraph 2 of Sec. 16, Mr. Speaker which says:
Any local elective officials, including an elected barangay official shall ipso facto cease
in his office or position as at the time he filed his certificate of candidacy, unless
otherwise provided by law. (later amended and is now Subsection 2 of sec. 13)
Now, do the words 'local elective official' refer to the office or to an

incumbent who has been elected, not appointed?
Mr. Albano. Paragraph 2 covers elective official; paragraph I covers appointive officials.
So, if he is an appointive local official he would fall under paragraph (1) because it says:
'Any person holding appointive office or position.' It does not distinguish if it is appointive
or elective position.
Mr. Valdez. In other words, Mr. Speaker, do I get the distinguished sponsor correctly
that an appointed mayor but holding an elective position is not within the
comprehension of this section or this paragraph?
Mr. Albano. No, Mr. Speaker, that would refer to paragraph 2. What maybe the
Gentleman's contemplation is: Suppose a person is appointed to the position of a
mayor, will he be covered under paragraph 1 and should be cease to hold office upon
filing his Certificate of Candidacy?
Mr. Valdez. Yes.
Mr. Albano. I would say, yes, he would fall under paragraph 1. But if he is an elective
local official he would fall under paragraph 2.
Mr. Valdez. In other words, this is a description of the mode and manner by which the
occupant is brought to the office.
Mr. Albano. Yes.
Mr. Valdez. ... not the description of the office itself.
Mr. Albano. No, Mr. Speaker.
Mr. Valdez. I see. Now we come to the other portion which refers to elected barangay
official. Why is it that the provision isolates the nature of the official of the barangay who
had been elected, not appointed, is he supposed to be within the purview of paragraph
2?
Mr. Albano. No. Mr. Speaker, I will call the Gentleman's attention to paragraph 1: Any
person holding a public appointive office or position ... I presume and I assume that the
office in the barangay council is still contemplated in the words 'appointive office.'
Mr. Valdez. Under paragraph l?
Mr. Albano. Yes, Mr. Speaker. 3 (Emphasis supplied)
Nor do we perceive any violation of the equal protection clause, as petitioner contends, since Section 13 of B.P. Blg.
697 applies alike to all persons subject to such legislation under like circumstances and conditions. Neither can
petitioner justifiably contend that he was removed from office without due process of law since it was of his own choice
that he ran for a seat in the Batasan Pambansa. The consequence that followed his unsuccessful attempt at the
elections arose from law.
It goes without saying that although petitioner, by filing his certificate of candidacy for the Batasan Pambansa
ceased, ipso facto, to be an appointive member of the Sangguniang Panlungsod, he remains an elective Barangay
Captain from which position he may be considered as having been on "forced leave of absence." He also continues as
President of the Association of Barangay Councils but will need a reappointment by the President, as member of the
Sangguniang Panlungsod of Ozamiz City as the law speaks of "members who may be appointed by the President."
WHEREFORE, finding no grave abuse of discretion on the part of respondent officials, the Writs prayed for are denied,
and this Petition is hereby ordered dismissed. No costs.
SO ORDERED.
Fernando, C.J., Makasiar, Abad Santos, Plana, Escolin, Relova, Gutierrez, Jr., De la Fuente, Cuevas and Alampay,
JJ., concur.
Aquino and Concepcion, Jr., took no part.
Separate Opinions
TEEHANKEE, J., dissenting:
There is no question petitioner is an elected baranggay official. He was elected barangay captain of his barangay. He
was furthermore elected President of the Association of Barangay Councils (ABC) of Ozamis City, and as such, he was
entitled to be appointed, ex-oficio, as he was in fact appointed by the President as member of the sangguniang
panglunsod. The appointment became functus oficio upon its exercise and petitioner's assumption of the office.
Under Section 13(2) of B.P. Blg. 697 governing the 1984 election for the Batasan Pambansa, petitioner as member of
the said sanggunian should be considered as having gone "on forced leave of absence from office" upon his filing of
his certificate of candidacy and running (unsuccessfully) for a seat to the Batasan Pambansa, like similarly situated
governors and mayors. The letter and spirit of the Act support petitioner's position. As the decision itself points out, he
rightfully remains as barangay captain and president of the ABC. As president of the ABC, petitioner should be held as
merely having been on forced leave of absence from the ex oficio position of sangguniang member to which he held an
appointment. He has correctly submitted that the law makes no distinction between elective or appointive sanggunian
members. The basic position of barangay captain and ABC president held by him are essentially elective. He cannot
fall under Section 13(l) of the Act which refers to purely appointive officials, including active officers and members of
the Armed Forces of the Philippines and officials and employees of government-owned and controlled corporations,
under the statutory construction rule of noscitur a sociis.
Separate Opinions
TEEHANKEE, J., dissenting:
There is no question petitioner is an elected baranggay official. He was elected barangay captain of his barangay. He
was furthermore elected President of the Association of Barangay Councils (ABC) of Ozamis City, and as such, he was
entitled to be appointed, ex-oficio, as he was in fact appointed by the President as member of the sangguniang
panglunsod. The appointment became functus oficio upon its exercise and petitioner's assumption of the office.
Under Section 13(2) of B.P. Blg. 697 governing the 1984 election for the Batasan Pambansa, petitioner as member of
the said sanggunian should be considered as having gone "on forced leave of absence from office" upon his filing of
his certificate of candidacy and running (unsuccessfully) for a seat to the Batasan Pambansa, like similarly situated
governors and mayors. The letter and spirit of the Act support petitioner's position. As the decision itself points out, he
rightfully remains as barangay captain and president of the ABC. As president of the ABC, petitioner should be held as
merely having been on forced leave of absence from the ex oficio position of sangguniang member to which he held an
appointment. He has correctly submitted that the law makes no distinction between elective or appointive sanggunian
members. The basic position of barangay captain and ABC president held by him are essentially elective. He cannot
fall under Section 13(l) of the Act which refers to purely appointive officials, including active officers and members of
the Armed Forces of the Philippines and officials and employees of government-owned and controlled corporations,
under the statutory construction rule of noscitur a sociis.
Footnotes
1 U.S. vs. Navarro, et al., 19 Phil. 134 (1911).
2 Commissioner of Customs vs. Esso Standard Eastern, Inc., 66 SCRA 113 (1975).
3 p. 399, Record of the Batasan, Vol. 4, 1983-1984, February 9, 1984 proceeding.

SUPREME COURT
Manila
FIRST DIVISION
G.R. No. L-39419 April 12, 1982
MAPALAD AISPORNA, petitioner,

vs.
THE COURT OF APPEALS and THE PEOPLE OF THE PHILIPPINES, respondents.
DE CASTRO, J.:
In this petition for certiorari, petitioner-accused Aisporna seeks the reversal of the decision dated August 14, 1974 1in
CA-G.R. No. 13243-CR entitled "People of the Philippines, plaintiff-appellee, vs. Mapalad Aisporna, defendant-appellant" of
respondent Court of Appeals affirming the judgment of the City Court of Cabanatuan 2 rendered on August 2, 1971 which
found the petitioner guilty for having violated Section 189 of the Insurance Act (Act No. 2427, as amended) and sentenced
her to pay a fine of P500.00 with subsidiary imprisonment in case of insolvency, and to pay the costs.
Petitioner Aisporna was charged in the City Court of Cabanatuan for violation of Section 189 of the Insurance Act on
November 21, 1970 in an information 3 which reads as follows:
That on or before the 21st day of June, 1969, in the City of Cabanatuan, Republic of the Philippines,
and within the jurisdiction of this Honorable Court, the above-named accused, did then and there,
wilfully, unlawfully and feloniously act as agent in the solicitation or procurement of an application for
insurance by soliciting therefor the application of one Eugenio S. Isidro, for and in behalf of Perla
Compania de Seguros, Inc., a duly organized insurance company, registered under the laws of the
Republic of the Philippines, resulting in the issuance of a Broad Personal Accident Policy No. 28PI-RSA
0001 in the amount not exceeding FIVE THOUSAND PESOS (P5,000.00) dated June 21, 1969, without
said accused having first secured a certificate of authority to act as such agent from the office of the
Insurance Commissioner, Republic of the Philippines.
CONTRARY TO LAW.
The facts, 4 as found by the respondent Court of Appeals are quoted hereunder:
IT RESULTING: That there is no debate that since 7 March, 1969 and as of 21 June, 1969, appellant's
husband, Rodolfo S. Aisporna was duly licensed by Insurance Commission as agent to Perla
Compania de Seguros, with license to expire on 30 June, 1970, Exh. C; on that date, at Cabanatuan
City, Personal Accident Policy, Exh. D was issued by Perla thru its author representative, Rodolfo S.
Aisporna, for a period of twelve (12) months with beneficiary as Ana M. Isidro, and for P5,000.00;
apparently, insured died by violence during lifetime of policy, and for reasons not explained in record,
present information was filed by Fiscal, with assistance of private prosecutor, charging wife of Rodolfo
with violation of Sec. 189 of Insurance Law for having, wilfully, unlawfully, and feloniously acted, "as
agent in the solicitation for insurance by soliciting therefore the application of one Eugenio S. Isidro for
and in behalf of Perla Compaña de Seguros, ... without said accused having first secured a certificate
of authority to act as such agent from the office of the Insurance Commission, Republic of the
Philippines."
and in the trial, People presented evidence that was hardly disputed, that aforementioned policy was
issued with active participation of appellant wife of Rodolfo, against which appellant in her defense
sought to show that being the wife of true agent, Rodolfo, she naturally helped him in his work, as clerk,
and that policy was merely a renewal and was issued because Isidro had called by telephone to renew,
and at that time, her husband, Rodolfo, was absent and so she left a note on top of her husband's desk
to renew ...
Consequently, the trial court found herein petitioner guilty as charged. On appeal, the trial court's decision was affirmed
by the respondent appellate court finding the petitioner guilty of a violation of the first paragraph of Section 189 of the
Insurance Act. Hence, this present recourse was filed on October 22, 1974. 5
In its resolution of October 28, 1974, 6 this Court resolved, without giving due course to this instant petition, to require the
respondent to comment on the aforesaid petition. In the comment 7 filed on December 20, 1974, the respondent, represented
by the Office of the Solicitor General, submitted that petitioner may not be considered as having violated Section 189 of the
Insurance Act. 8 On April 3, 1975, petitioner submitted his Brief 9 while the Solicitor General, on behalf of the respondent, filed
a manifestation 10 in lieu of a Brief on May 3, 1975 reiterating his stand that the petitioner has not violated Section 189 of the
Insurance Act.
In seeking reversal of the judgment of conviction, petitioner assigns the following errors 11 allegedly committed by the
appellate court:
1. THE RESPONDENT COURT OF APPEALS ERRED IN FINDING THAT RECEIPT OF

COMPENSATION IS NOT AN ESSENTIAL ELEMENT OF THE CRIME DEFINED BY THE FIRST
PARAGRAPH OF SECTION 189 OF THE INSURANCE ACT.
2. THE RESPONDENT COURT OF APPEALS ERRED IN GIVING DUE WEIGHT TO EXHIBITS F, F-

1, TO F-17, INCLUSIVE SUFFICIENT TO ESTABLISH PETITIONER'S GUILT BEYOND
REASONABLE DOUBT.
3. THE RESPONDENT COURT OF APPEALS ERRED IN NOT ACQUITTING HEREIN PETITIONER.
We find the petition meritorious.
The main issue raised is whether or not a person can be convicted of having violated the first paragraph of Section 189
of the Insurance Act without reference to the second paragraph of the same section. In other words, it is necessary to
determine whether or not the agent mentioned in the first paragraph of the aforesaid section is governed by the
definition of an insurance agent found on its second paragraph.
The pertinent provision of Section 189 of the Insurance Act reads as follows:
No insurance company doing business within the Philippine Islands, nor any agent thereof, shall pay
any commission or other compensation to any person for services in obtaining new insurance, unless
such person shall have first procured from the Insurance Commissioner a certificate of authority to act
as an agent of such company as hereinafter provided. No person shall act as agent, sub-agent, or
broker in the solicitation of procurement of applications for insurance, or receive for services in
obtaining new insurance, any commission or other compensation from any insurance company doing
business in the Philippine Islands, or agent thereof, without first procuring a certificate of authority so to
act from the Insurance Commissioner, which must be renewed annually on the first day of January, or
within six months thereafter. Such certificate shall be issued by the Insurance Commissioner only upon
the written application of persons desiring such authority, such application being approved and
countersigned by the company such person desires to represent, and shall be upon a form approved by
the Insurance Commissioner, giving such information as he may require. The Insurance Commissioner
shall have the right to refuse to issue or renew and to revoke any such certificate in his discretion. No
such certificate shall be valid, however, in any event after the first day of July of the year following the
issuing of such certificate. Renewal certificates may be issued upon the application of the company.
Any person who for compensation solicits or obtains insurance on behalf of any insurance company, or
transmits for a person other than himself an application for a policy of insurance to or from such
company or offers or assumes to act in the negotiating of such insurance, shall be an insurance agent
within the intent of this section, and shall thereby become liable to all the duties, requirements,
liabilities, and penalties to which an agent of such company is subject.
Any person or company violating the provisions of this section shall be fined in the sum of five hundred
pesos. On the conviction of any person acting as agent, sub-agent, or broker, of the commission of any
offense connected with the business of insurance, the Insurance Commissioner shall immediately
revoke the certificate of authority issued to him and no such certificate shall thereafter be issued to
such convicted person.
A careful perusal of the above-quoted provision shows that the first paragraph thereof prohibits a person from acting as
agent, sub-agent or broker in the solicitation or procurement of applications for insurance without first procuring a
certificate of authority so to act from the Insurance Commissioner, while its second paragraph defines who is an
insurance agent within the intent of this section and, finally, the third paragraph thereof prescribes the penalty to be
imposed for its violation.
The respondent appellate court ruled that the petitioner is prosecuted not under the second paragraph of Section 189
of the aforesaid Act but under its first paragraph. Thus —
... it can no longer be denied that it was appellant's most active endeavors that resulted in issuance of
policy to Isidro, she was there and then acting as agent, and received the pay thereof — her defense
that she was only acting as helper of her husband can no longer be sustained, neither her point that
she received no compensation for issuance of the policy because
any person who for compensation solicits or obtains insurance on behalf of any
insurance company or transmits for a person other than himself an application for a
policy of insurance to or from such company or offers or assumes to act in the
negotiating of such insurance, shall be an insurance agent within the intent of this
section, and shall thereby become liable to all the duties, requirements, liabilities, and
penalties, to which an agent of such company is subject. paragraph 2, Sec. 189,
Insurance Law,
now it is true that information does not even allege that she had obtained the insurance,
for compensation
which is the gist of the offense in Section 189 of the Insurance Law in its 2nd paragraph, but what
appellant apparently overlooks is that she is prosecuted not under the 2nd but under the 1st paragraph
of Sec. 189 wherein it is provided that,
No person shall act as agent, sub-agent, or broker, in the solicitation or procurement of

applications for insurance, or receive for services in obtaining new insurance any
commission or other compensation from any insurance company doing business in the
Philippine Island, or agent thereof, without first procuring a certificate of authority to act
from the insurance commissioner, which must be renewed annually on the first day of
January, or within six months thereafter.
therefore, there was no technical defect in the wording of the charge, so that Errors 2 and 4 must be
overruled. 12
From the above-mentioned ruling, the respondent appellate court seems to imply that the definition of an insurance agent
under the second paragraph of Section 189 is not applicable to the insurance agent mentioned in the first paragraph.
Parenthetically, the respondent court concludes that under the second paragraph of Section 189, a person is an insurance
agent if he solicits and obtains an insurance for compensation, but, in its first paragraph, there is no necessity that a person
solicits an insurance for compensation in order to be called an insurance agent.
We find this to be a reversible error. As correctly pointed out by the Solicitor General, the definition of an insurance
agent as found in the second paragraph of Section 189 is intended to define the word "agent" mentioned in the first and
second paragraphs of the aforesaid section. More significantly, in its second paragraph, it is explicitly provided that the
definition of an insurance agent is within the intent of Section 189. Hence —
Any person who for compensation ... shall be an insurance agent within the intent of this section, ...
Patently, the definition of an insurance agent under the second paragraph holds true with respect to the agent
mentioned in the other two paragraphs of the said section. The second paragraph of Section 189 is a definition and
interpretative clause intended to qualify the term "agent" mentioned in both the first and third paragraphs of the
aforesaid section.
Applying the definition of an insurance agent in the second paragraph to the agent mentioned in the first and second
paragraphs would give harmony to the aforesaid three paragraphs of Section 189. Legislative intent must be
ascertained from a consideration of the statute as a whole. The particular words, clauses and phrases should not be
studied as detached and isolated expressions, but the whole and every part of the statute must be considered in fixing
the meaning of any of its parts and in order to produce harmonious whole. 13 A statute must be so construed as to
harmonize and give effect to all its provisions whenever possible. 14 The meaning of the law, it must be borne in mind, is not
to be extracted from any single part, portion or section or from isolated words and phrases, clauses or sentences but from a
general consideration or view of the act as a whole. 15 Every part of the statute must be interpreted with reference to the
context. This means that every part of the statute must be considered together with the other parts, and kept subservient to
the general intent of the whole enactment, not separately and independently. 16 More importantly, the doctrine of associated
words (Noscitur a Sociis) provides that where a particular word or phrase in a statement is ambiguous in itself or is equally
susceptible of various meanings, its true meaning may be made clear and specific by considering the company in which it is
found or with which it is associated. 17
Considering that the definition of an insurance agent as found in the second paragraph is also applicable to the agent
mentioned in the first paragraph, to receive a compensation by the agent is an essential element for a violation of the first
paragraph of the aforesaid section. The appellate court has established ultimately that the petitioner-accused did not receive
any compensation for the issuance of the insurance policy of Eugenio Isidro. Nevertheless, the accused was convicted by
the appellate court for, according to the latter, the receipt of compensation for issuing an insurance policy is not an essential
element for a violation of the first paragraph of Section 189 of the Insurance Act.
We rule otherwise. Under the Texas Penal Code 1911, Article 689, making it a misdemeanor for any person for direct
or indirect compensation to solicit insurance without a certificate of authority to act as an insurance agent, an
information, failing to allege that the solicitor was to receive compensation either directly or indirectly, charges no
offense. 18 In the case of Bolen vs. Stake, 19 the provision of Section 3750, Snyder's Compiled Laws of Oklahoma 1909 is
intended to penalize persons only who acted as insurance solicitors without license, and while acting in such capacity
negotiated and concluded insurance contracts for compensation. It must be noted that the information, in the case at bar,
does not allege that the negotiation of an insurance contracts by the accused with Eugenio Isidro was one for compensation.
This allegation is essential, and having been omitted, a conviction of the accused could not be sustained. It is well-settled in
Our jurisprudence that to warrant conviction, every element of the crime must be alleged and proved. 20
After going over the records of this case, We are fully convinced, as the Solicitor General maintains, that accused did
not violate Section 189 of the Insurance Act.
WHEREFORE, the judgment appealed from is reversed and the accused is acquitted of the crime charged, with
costs de oficio.
SO ORDERED.
Teehankee (Acting C.J.,) Makasiar, De Castro, Fernandez, Guerrero and Melencio-Herrera, JJ., concur.
Plana, J., took no part.
Footnotes
1 p. 21, Rollo.
2 p. 11, CA Rollo.
3 p. 10, CA Rollo.
4 pp. 21-22, Rollo.
5 p. 7, Rollo.
6 p. 36, Rollo.
7 p. 51, Rollo.
8 p. 58, Rollo.
9 p. 69, Rollo.
10 p. 71, Rollo.
11 p. 69, Rollo; p. 6, Brief for the Petitioner.
12 pp. 25 and 26, Rollo.
13 Araneta vs. Concepcion, 99 Phil. 709; Tamayo vs. Gsell, 35 Phil. 953; Lopez vs. El Hogar Filipino,
47 Phil. 249; Chartered Bank vs. Imperial, 48 Phil. 931.
14 People vs. Polmon 86 Phil. 350.
15 82 C.J.S., Section 345, pp. 699-700.
16 Tamayo vs. Gsell, 35 Phil. 953.
17 Co Kim Cham vs. Valdez Tan Keh & Dizon, 75 Phil. 371.
18 Jasper vs. State, 73 Tex. Cr. R 197; 164 S.W. 851.
19 149 p. 1074, 11 Okla. Crim. 594.
20 People vs. Sy Gesiong, 60 Phil. 614.

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Republic of the Philippines

G.R. No. 2122 September 13, 1905

PEDRO T. ACOSTA, plaintiff-appellant,

W.A. Kincaid for appellant.

Arellano, C.J., Torres, Johnson, and Carson, JJ., concur.

G.R. No. 181517 July 6, 2015

GREEN STAR EXPRESS, INC. and FRUTO SAYSON, JR., Petitioners,

The following are the antecedents of the case:

WHEREFORE, in view of the foregoing, defendant's "Motion to Dismiss" is hereby DENIED.3

JOSE PORTUGAL PEREZ*** ESTELA M. PERLAS-BERNABE***

MARVIC M.V.F LEONEN*****

MARIA LOURDES P.A. SERENO

dated June 29, 2015.

dated June 23, 2015.

dated July 1, 2015.

G.R. No. 172087 March 15, 2011

PHILIPPINE AMUSEMENT AND GAMING CORPORATION (PAGCOR), Petitioner,

The undisputed facts follow.

Sec. 13. Exemptions. — x x x

(b) Government bonds, securities, treasury notes, or government debentures; or

(c) BOI-registered or export-oriented corporation(s).7

Sec. 4. 108-3. Definitions and Specific Rules on Selected Services. —

Hence, the present petition for certiorari.

PAGCOR raises the following issues:

The BIR, in its Comment15 dated December 29, 2006, counters:

1) It must be based on substantial distinctions.

2) It must be germane to the purposes of the law.

3) It must not be limited to existing conditions only.

4) It must apply equally to all members of the class.18

CHAIRMAN ENRILE. Wala na, tinanggal na namin yon.

HON. R. DIAZ. Tinanggal na ba natin yon?

CHAIRMAN ENRILE. Oo.

CHAIRMAN ENRILE. No, we removed the ---

HON. R. DIAZ. I . . . (inaudible) natin yong lotto?

CHAIRMAN ENRILE. Pati PAGCOR tinanggal upon request.

CHAIRMAN JAVIER. Yeah, Philippine Insurance Commission.

CHAIRMAN ENRILE. There’s a VAT.

CHAIRMAN JAVIER. Not anything.

HON. ROXAS. Precisely, so they will be spending it.21

SEN. OSMEÑA. And Negros.

THE CHAIRMAN (REP. LAPUS). Mr. Chair, Mr. Chair.

SEN. OSMEÑA. It goes from pocket to the other, Monico.

MR. PURISIMA. Thank you, Mr. Chair.

REP. TEVES. Mr. Chairman.

THE CHAIRMAN (REP. LAPUS). Congressman Teves.

REP. NOGRALES. Mr. Chairman, Mr. Chairman. Mr. Chairman.

THE CHAIRMAN (REP. LAPUS). Congressman Nograles.

Petitioner’s contention lacks merit.

PAGCOR is exempt from payment of indirect taxes

Sec. 13. Exemptions. —

VAT exemption extends to Acesite

ANTONIO T. CARPIO CONCHITA CARPIO MORALES

LUCAS P. BERSAMIN MARIANO C. DEL CASTILLO

ROBERTO A. ABAD MARTIN S. VILLARAMA, JR.

JOSE PORTUGAL PEREZ JOSE CATRAL MENDOZA

MA. LOURDES P.A. SERENO

1 Under Rule 65 of the Rules of Court.

3GRANTING THE PAGCOR A FRANCHISE TO ESTABLISH, OPERATE AND MAINTAIN GAMBLING

4 Section 4 of P.D. No. 1067-B, provides:

5 Section 3, P.D. No. 1399, in part, reads:

(1) Duties, taxes and other imposts on importation. – x x x

(2) Income and other taxes. —

11 G.R. Nos. 168056, 168207, 168461, 168463 and 168730.

JOSE PORTUGAL PEREZ* ESTELA M. PERLAS-BERNABE*