Republic of the Philippines different branches of the Government issuing same, and of the Bureau of
SUPREME COURT Printing.
Manila
EN BANC
G.R. No. L-6791 March 29, 1954
THE PEOPLE OF THE PHILIPPINES, plaintiff-appellee,
vs.
QUE PO LAY, defendant-appellant.
Prudencio de Guzman for appellant.
First Assistant Solicitor General Ruperto Kapunan, Jr., and Solicitor Lauro G.
Marquez for appellee.
MONTEMAYOR, J.:
Que Po Lay is appealing from the decision of the Court of First Instance of
Manila, finding him guilty of violating Central Bank Circular No. 20 in
connection with section 34 of Republic Act No. 265, and sentencing him to
suffer six months imprisonment, to pay a fine of P1,000 with subsidiary
imprisonment in case of insolvency, and to pay the costs.
The charge was that the appellant who was in possession of foreign
exchange consisting of U.S. dollars, U.S. checks and U.S. money orders
amounting to about $7,000 failed to sell the same to the Central Bank
through its agents within one day following the receipt of such foreign
exchange as required by Circular No. 20. the appeal is based on the claim
that said circular No. 20 was not published in the Official Gazette prior to the
act or omission imputed to the appellant, and that consequently, said circular
had no force and effect. It is contended that Commonwealth Act. No., 638
and Act 2930 both require said circular to be published in the Official
Gazette, it being an order or notice of general applicability. The Solicitor
General answering this contention says that Commonwealth Act. No. 638
and 2930 do not require the publication in the Official Gazette of said circular
issued for the implementation of a law in order to have force and effect.
We agree with the Solicitor General that the laws in question do not require
the publication of the circulars, regulations and notices therein mentioned in
order to become binding and effective. All that said two laws provide is that
laws, resolutions, decisions of the Supreme Court and Court of Appeals,
notices and documents required by law to be of no force and effect. In other
words, said two Acts merely enumerate and make a list of what should be
published in the Official Gazette, presumably, for the guidance of the
However, section 11 of the Revised Administrative Code provides that
statutes passed by Congress shall, in the absence of special provision, take
effect at the beginning of the fifteenth day after the completion of the
publication of the statute in the Official Gazette. Article 2 of the new Civil
Code (Republic Act No. 386) equally provides that laws shall take effect after
fifteen days following the completion of their publication in the Official
Gazette, unless it is otherwise provided. It is true that Circular No. 20 of the
Central Bank is not a statute or law but being issued for the implementation
of the law authorizing its issuance, it has the force and effect of law
according to settled jurisprudence. (See U.S. vs. Tupasi Molina, 29 Phil., 119
and authorities cited therein.) Moreover, as a rule, circulars and regulations
especially like the Circular No. 20 of the Central Bank in question which
prescribes a penalty for its violation should be published before becoming
effective, this, on the general principle and theory that before the public is
bound by its contents, especially its penal provisions, a law, regulation or
circular must first be published and the people officially and specifically
informed of said contents and its penalties.
Our Old Civil code, ( Spanish Civil Code of 1889) has a similar provision
about the effectivity of laws, (Article 1 thereof), namely, that laws shall be
binding twenty days after their promulgation, and that their promulgation shall
be understood as made on the day of the termination of the publication of the
laws in the Gazette. Manresa, commenting on this article is of the opinion
that the word "laws" include regulations and circulars issued in accordance
with the same. He says:
El Tribunal Supremo, ha interpretado el articulo 1. del codigo Civil en
Sentencia de 22 de Junio de 1910, en el sentido de que bajo la
denominacion generica de leyes, se comprenden tambien
los Reglamentos, Reales decretos, Instrucciones, Circulares y
Reales ordenes dictadas de conformidad con las mismas por el
Gobierno en uso de su potestad. Tambien el poder ejecutivo lo ha
venido entendiendo asi, como lo prueba el hecho de que muchas de
sus disposiciones contienen la advertencia de que empiezan a regir
el mismo dia de su publicacion en la Gaceta, advertencia que seria
perfectamente inutil si no fuera de aplicacion al caso el articulo 1.o
del Codigo Civil. (Manresa, Codigo Civil Español, Vol. I. p. 52).
In the present case, although circular No. 20 of the Central Bank was issued
in the year 1949, it was not published until November 1951, that is, about 3
months after appellant's conviction of its violation. It is clear that said circular,
particularly its penal provision, did not have any legal effect and bound no
one until its publication in the Official Gazzette or after November 1951. In
other words, appellant could not be held liable for its violation, for it was not
binding at the time he was found to have failed to sell the foreign exchange in
his possession thereof.
But the Solicitor General also contends that this question of non-publication
of the Circular is being raised for the first time on appeal in this Court, which
cannot be done by appellant. Ordinarily, one may raise on appeal any
question of law or fact that has been raised in the court below and which is
within the issues made by the parties in their pleadings. (Section 19, Rule 48
of the Rules of Court). But the question of non-publication is fundamental and
decisive. If as a matter of fact Circular No. 20 had not been published as
required by law before its violation, then in the eyes of the law there was no
such circular to be violated and consequently appellant committed no
violation of the circular or committed any offense, and the trial court may be
said to have had no jurisdiction. This question may be raised at any stage of
the proceeding whether or not raised in the court below.
In view of the foregoing, we reverse the decision appealed from and acquit
the appellant, with costs de oficio.
Paras, C.J., Bengzon, Padilla, Reyes, Bautista Angelo, Labrador,
Concepcion and Diokno, JJ., concur.
Republic of the Philippines
SUPREME COURT
Manila
EN BANC
G.R. No. L-63915 April 24, 1985
LORENZO M. TAÑADA, ABRAHAM F. SARMIENTO, and MOVEMENT OF
ATTORNEYS FOR BROTHERHOOD, INTEGRITY AND NATIONALISM,
INC. [MABINI], petitioners,
vs.
HON. JUAN C. TUVERA, in his capacity as Executive Assistant to the
President, HON. JOAQUIN VENUS, in his capacity as Deputy Executive
Assistant to the President , MELQUIADES P. DE LA CRUZ, in his
capacity as Director, Malacañang Records Office, and FLORENDO S.
PABLO, in his capacity as Director, Bureau of Printing, respondents.
ESCOLIN, J.:
Invoking the people's right to be informed on matters of public concern, a
right recognized in Section 6, Article IV of the 1973 Philippine
Constitution, 1 as well as the principle that laws to be valid and enforceable
must be published in the Official Gazette or otherwise effectively
promulgated, petitioners seek a writ of mandamus to compel respondent
public officials to publish, and/or cause the publication in the Official Gazette
of various presidential decrees, letters of instructions, general orders,
proclamations, executive orders, letter of implementation and administrative
orders.
Specifically, the publication of the following presidential issuances is sought:
a] Presidential Decrees Nos. 12, 22, 37, 38, 59, 64, 103,
171, 179, 184, 197, 200, 234, 265, 286, 298, 303, 312, 324,
325, 326, 337, 355, 358, 359, 360, 361, 368, 404, 406, 415,
427, 429, 445, 447, 473, 486, 491, 503, 504, 521, 528, 551,
566, 573, 574, 594, 599, 644, 658, 661, 718, 731, 733, 793,
800, 802, 835, 836, 923, 935, 961, 1017-1030, 1050, 1060-
1061, 1085, 1143, 1165, 1166, 1242, 1246, 1250, 1278,
1279, 1300, 1644, 1772, 1808, 1810, 1813-1817, 1819-
1826, 1829-1840, 1842-1847.
b] Letter of Instructions Nos.: 10, 39, 49, 72, 107, 108, 116,
130, 136, 141, 150, 153, 155, 161, 173, 180, 187, 188, 192,
193, 199, 202, 204, 205, 209, 211-213, 215-224, 226-228,
231-239, 241-245, 248, 251, 253-261, 263-269, 271-273,
275-283, 285-289, 291, 293, 297-299, 301-303, 309, 312-
315, 325, 327, 343, 346, 349, 357, 358, 362, 367, 370, 382,
385, 386, 396-397, 405, 438-440, 444- 445, 473, 486, 488,
498, 501, 399, 527, 561, 576, 587, 594, 599, 600, 602, 609,
610, 611, 612, 615, 641, 642, 665, 702, 712-713, 726, 837-
839, 878-879, 881, 882, 939-940, 964,997,1149-1178,1180-
1278.
c] General Orders Nos.: 14, 52, 58, 59, 60, 62, 63, 64 & 65.
d] Proclamation Nos.: 1126, 1144, 1147, 1151, 1196, 1270,
1281, 1319-1526, 1529, 1532, 1535, 1538, 1540-1547,
1550-1558, 1561-1588, 1590-1595, 1594-1600, 1606-1609,
1612-1628, 1630-1649, 1694-1695, 1697-1701, 1705-1723,
1731-1734, 1737-1742, 1744, 1746-1751, 1752, 1754, 1762,
 1764-1787, 1789-1795, 1797, 1800, 1802-1804, 1806-1807,
1812-1814, 1816, 1825-1826, 1829, 1831-1832, 1835-1836,
1839-1840, 1843-1844, 1846-1847, 1849, 1853-1858, 1860,
1866, 1868, 1870, 1876-1889, 1892, 1900, 1918, 1923,
1933, 1952, 1963, 1965-1966, 1968-1984, 1986-2028, 2030-
2044, 2046-2145, 2147-2161, 2163-2244.
e] Executive Orders Nos.: 411, 413, 414, 427, 429-454, 457-
471, 474-492, 494-507, 509-510, 522, 524-528, 531-532,
536, 538, 543-544, 549, 551-553, 560, 563, 567-568, 570,
574, 593, 594, 598-604, 609, 611- 647, 649-677, 679-703,
705-707, 712-786, 788-852, 854-857.
f] Letters of Implementation Nos.: 7, 8, 9, 10, 11-22, 25-27,
39, 50, 51, 59, 76, 80-81, 92, 94, 95, 107, 120, 122, 123.
g] Administrative Orders Nos.: 347, 348, 352-354, 360- 378,
380-433, 436-439.
The respondents, through the Solicitor General, would have this case
dismissed outright on the ground that petitioners have no legal personality or
standing to bring the instant petition. The view is submitted that in the
absence of any showing that petitioners are personally and directly affected
or prejudiced by the alleged non-publication of the presidential issuances in
question 2 said petitioners are without the requisite legal personality to
institute this mandamus proceeding, they are not being "aggrieved parties"
within the meaning of Section 3, Rule 65 of the Rules of Court, which we
quote:
SEC. 3. Petition for Mandamus.—When any tribunal,
corporation, board or person unlawfully neglects the
performance of an act which the law specifically enjoins as a
duty resulting from an office, trust, or station, or unlawfully
excludes another from the use a rd enjoyment of a right or
office to which such other is entitled, and there is no other
plain, speedy and adequate remedy in the ordinary course of
law, the person aggrieved thereby may file a verified petition
in the proper court alleging the facts with certainty and
praying that judgment be rendered commanding the
defendant, immediately or at some other specified time, to
do the act required to be done to Protect the rights of the
petitioner, and to pay the damages sustained by the
petitioner by reason of the wrongful acts of the defendant.
Upon the other hand, petitioners maintain that since the subject of the
petition concerns a public right and its object is to compel the performance of
a public duty, they need not show any specific interest for their petition to be
given due course.
The issue posed is not one of first impression. As early as the 1910 case
of Severino vs. Governor General, 3 this Court held that while the general
rule is that "a writ of mandamus would be granted to a private individual only
in those cases where he has some private or particular interest to be
subserved, or some particular right to be protected, independent of that
which he holds with the public at large," and "it is for the public officers
exclusively to apply for the writ when public rights are to be subserved
[Mithchell vs. Boardmen, 79 M.e., 469]," nevertheless, "when the question is
one of public right and the object of the mandamus is to procure the
enforcement of a public duty, the people are regarded as the real party in
interest and the relator at whose instigation the proceedings are instituted
need not show that he has any legal or special interest in the result, it being
sufficient to show that he is a citizen and as such interested in the execution
of the laws [High, Extraordinary Legal Remedies, 3rd ed., sec. 431].
Thus, in said case, this Court recognized the relator Lope Severino, a private
individual, as a proper party to the mandamus proceedings brought to
compel the Governor General to call a special election for the position of
municipal president in the town of Silay, Negros Occidental. Speaking for this
Court, Mr. Justice Grant T. Trent said:
We are therefore of the opinion that the weight of authority
supports the proposition that the relator is a proper party to
proceedings of this character when a public right is sought to
be enforced. If the general rule in America were otherwise,
we think that it would not be applicable to the case at bar for
the reason 'that it is always dangerous to apply a general
rule to a particular case without keeping in mind the reason
for the rule, because, if under the particular circumstances
the reason for the rule does not exist, the rule itself is not
applicable and reliance upon the rule may well lead to error'
No reason exists in the case at bar for applying the general
rule insisted upon by counsel for the respondent. The
circumstances which surround this case are different from
those in the United States, inasmuch as if the relator is not a
proper party to these proceedings no other person could be,
as we have seen that it is not the duty of the law officer of
the Government to appear and represent the people in cases
of this character.
The reasons given by the Court in recognizing a private citizen's legal
personality in the aforementioned case apply squarely to the present petition.
Clearly, the right sought to be enforced by petitioners herein is a public right
recognized by no less than the fundamental law of the land. If petitioners
were not allowed to institute this proceeding, it would indeed be difficult to
conceive of any other person to initiate the same, considering that the
Solicitor General, the government officer generally empowered to represent
the people, has entered his appearance for respondents in this case.
Respondents further contend that publication in the Official Gazette is not a
sine qua non requirement for the effectivity of laws where the laws
themselves provide for their own effectivity dates. It is thus submitted that
since the presidential issuances in question contain special provisions as to
the date they are to take effect, publication in the Official Gazette is not
indispensable for their effectivity. The point stressed is anchored on Article 2
of the Civil Code:
Art. 2. Laws shall take effect after fifteen days following the
completion of their publication in the Official Gazette, unless
it is otherwise provided, ...
The interpretation given by respondent is in accord with this Court's
construction of said article. In a long line of decisions,4 this Court has ruled
that publication in the Official Gazette is necessary in those cases where the
legislation itself does not provide for its effectivity date-for then the date of
publication is material for determining its date of effectivity, which is the
fifteenth day following its publication-but not when the law itself provides for
the date when it goes into effect.
Respondents' argument, however, is logically correct only insofar as it
equates the effectivity of laws with the fact of publication. Considered in the
light of other statutes applicable to the issue at hand, the conclusion is easily
reached that said Article 2 does not preclude the requirement of publication
in the Official Gazette, even if the law itself provides for the date of its
effectivity. Thus, Section 1 of Commonwealth Act 638 provides as follows:
Section 1. There shall be published in the Official Gazette [1]
all important legisiative acts and resolutions of a public
nature of the, Congress of the Philippines; [2] all executive
and administrative orders and proclamations, except such as
have no general applicability; [3] decisions or abstracts of
decisions of the Supreme Court and the Court of Appeals as
may be deemed by said courts of sufficient importance to be
so published; [4] such documents or classes of documents
as may be required so to be published by law; and [5] such
documents or classes of documents as the President of the
Philippines shall determine from time to time to have general
applicability and legal effect, or which he may authorize so to
be published. ...
The clear object of the above-quoted provision is to give the general public
adequate notice of the various laws which are to regulate their actions and
conduct as citizens. Without such notice and publication, there would be no
basis for the application of the maxim "ignorantia legis non excusat." It would
be the height of injustice to punish or otherwise burden a citizen for the
transgression of a law of which he had no notice whatsoever, not even a
constructive one.
Perhaps at no time since the establishment of the Philippine Republic has
the publication of laws taken so vital significance that at this time when the
people have bestowed upon the President a power heretofore enjoyed solely
by the legislature. While the people are kept abreast by the mass media of
the debates and deliberations in the Batasan Pambansa—and for the diligent
ones, ready access to the legislative records—no such publicity
accompanies the law-making process of the President. Thus, without
publication, the people have no means of knowing what presidential decrees
have actually been promulgated, much less a definite way of informing
themselves of the specific contents and texts of such decrees. As the
Supreme Court of Spain ruled: "Bajo la denominacion generica de leyes, se
comprenden tambien los reglamentos, Reales decretos, Instrucciones,
Circulares y Reales ordines dictadas de conformidad con las mismas por el
Gobierno en uso de su potestad.5
The very first clause of Section I of Commonwealth Act 638 reads: "There
shall be published in the Official Gazette ... ." The word "shall" used therein
imposes upon respondent officials an imperative duty. That duty must be
enforced if the Constitutional right of the people to be informed on matters of
public concern is to be given substance and reality. The law itself makes a
list of what should be published in the Official Gazette. Such listing, to our
mind, leaves respondents with no discretion whatsoever as to what must be
included or excluded from such publication.
The publication of all presidential issuances "of a public nature" or "of general
applicability" is mandated by law. Obviously, presidential decrees that
provide for fines, forfeitures or penalties for their violation or otherwise
impose a burden or. the people, such as tax and revenue measures, fall
within this category. Other presidential issuances which apply only to
particular persons or class of persons such as administrative and executive
orders need not be published on the assumption that they have been
circularized to all concerned. 6
It is needless to add that the publication of presidential issuances "of a public
nature" or "of general applicability" is a requirement of due process. It is a
rule of law that before a person may be bound by law, he must first be
officially and specifically informed of its contents. As Justice Claudio
Teehankee said in Peralta vs. COMELEC 7:
In a time of proliferating decrees, orders and letters of
instructions which all form part of the law of the land, the
requirement of due process and the Rule of Law demand
that the Official Gazette as the official government repository
promulgate and publish the texts of all such decrees, orders
and instructions so that the people may know where to
obtain their official and specific contents.
The Court therefore declares that presidential issuances of general
application, which have not been published, shall have no force and effect.
Some members of the Court, quite apprehensive about the possible
unsettling effect this decision might have on acts done in reliance of the
validity of those presidential decrees which were published only during the
pendency of this petition, have put the question as to whether the Court's
declaration of invalidity apply to P.D.s which had been enforced or
implemented prior to their publication. The answer is all too familiar. In similar
situations in the past this Court had taken the pragmatic and realistic course
set forth in Chicot County Drainage District vs. Baxter Bank 8 to wit:
The courts below have proceeded on the theory that the Act
of Congress, having been found to be unconstitutional, was
not a law; that it was inoperative, conferring no rights and
imposing no duties, and hence affording no basis for the
challenged decree. Norton v. Shelby County, 118 U.S. 425,
442; Chicago, 1. & L. Ry. Co. v. Hackett, 228 U.S. 559, 566.
It is quite clear, however, that such broad statements as to
the effect of a determination of unconstitutionality must be
taken with qualifications. The actual existence of a statute,
prior to such a determination, is an operative fact and may
have consequences which cannot justly be ignored. The past
cannot always be erased by a new judicial declaration. The
effect of the subsequent ruling as to invalidity may have to
be considered in various aspects-with respect to particular
conduct, private and official. Questions of rights claimed to
have become vested, of status, of prior determinations
deemed to have finality and acted upon accordingly, of
public policy in the light of the nature both of the statute and
of its previous application, demand examination. These
questions are among the most difficult of those which have
engaged the attention of courts, state and federal and it is
manifest from numerous decisions that an all-inclusive
statement of a principle of absolute retroactive invalidity
cannot be justified.
Consistently with the above principle, this Court in Rutter vs.
Esteban 9 sustained the right of a party under the Moratorium Law, albeit said
right had accrued in his favor before said law was declared unconstitutional
by this Court.
Similarly, the implementation/enforcement of presidential decrees prior to
their publication in the Official Gazette is "an operative fact which may have
consequences which cannot be justly ignored. The past cannot always be
erased by a new judicial declaration ... that an all-inclusive statement of a
principle of absolute retroactive invalidity cannot be justified."
From the report submitted to the Court by the Clerk of Court, it appears that
of the presidential decrees sought by petitioners to be published in the
Official Gazette, only Presidential Decrees Nos. 1019 to 1030, inclusive,
1278, and 1937 to 1939, inclusive, have not been so published. 10 Neither the
subject matters nor the texts of these PDs can be ascertained since no
copies thereof are available. But whatever their subject matter may be, it is
undisputed that none of these unpublished PDs has ever been implemented
or enforced by the government. In Pesigan vs. Angeles, 11 the Court, through
Justice Ramon Aquino, ruled that "publication is necessary to apprise the
public of the contents of [penal] regulations and make the said penalties
binding on the persons affected thereby. " The cogency of this holding is
apparently recognized by respondent officials considering the manifestation
in their comment that "the government, as a matter of policy, refrains from
prosecuting violations of criminal laws until the same shall have been
published in the Official Gazette or in some other publication, even though
some criminal laws provide that they shall take effect immediately.
WHEREFORE, the Court hereby orders respondents to publish in the Official
Gazette all unpublished presidential issuances which are of general
application, and unless so published, they shall have no binding force and
effect.
SO ORDERED.
Relova, J., concurs.
Aquino, J., took no part.
Concepcion, Jr., J., is on leave.
 EN BANC
[G.R. No. L-63915. December 29, 1986.]
LORENZO M. TAÑADA, ABRAHAM F. SARMIENTO, and MOVEMENT OF
ATTORNEYS FOR BROTHERHOOD, INTEGRITY AND NATIONALISM,
INC. (MABINI), Petitioners, v. HON. JUAN C. TUVERA. in his capacity as
Executive Assistant to the President, HON. JOAQUIN VENUS, in his
capacity as Deputy Executive Assistant to the President, MELQUIADES
P. DE LA CRUZ, ETC., ET AL., Respondents.
SYLLABUS
FERNAN, J., concurring:chanrob1es virtual 1aw library
1. CIVIL LAW; EFFECT AND APPLICATION OF LAWS; ARTICLE 2, CIVIL
CODE; PUBLICATION OF LAWS MADE TO ENSURE CONSTITUTIONAL
RIGHT TO DUE PROCESS AND TO INFORMATION. — The categorical
statement by this Court on the need for publication before any law be made
effective seeks to prevent abuses on the part if the lawmakers and, at the
time, ensure to the people their constitutional right to due process and to
information on matter of public concern.chanroblesvirtuallawlibrary:red
RESOLUTION
CRUZ, J.:
Due process was invoked by the petitioners in demanding the disclosure or a
number of presidential decrees which they claimed had not been published
as required by law. The government argued that while publication was
necessary as a rule, it was not so when it was "otherwise provided," as when
the decrees themselves declared that they were to become effective
immediately upon their approval. In the decision of this case on April 24,
1985, the Court affirmed the necessity for the publication of some of these
decrees, declaring in the dispositive portion as follows:jgc:chanrobles.com.ph
"WHEREFORE, the Court hereby orders respondents to publish to the
Official Gazette all unpublished presidential issuances which are of general
application, and unless so published, they shall have no binding force and
effect."cralaw virtua1aw library
The petitioners are now before us again, this time to move for
reconsideration/clarification of that decision. 1 Specifically, they ask the
following questions:chanrob1es virtual 1aw library
1. What is meant by "law of public nature" or "general applicability" ?
2. Must a distinction be made between laws of general applicability and laws
which are not?
3. What is meant by "publication" ?
4. Where is the publication to be made?
5. When is the publication to be made?
Resolving their own doubts, the petitioners suggest that there should be no
distinction between laws of general applicability and those which are not; that
publication means complete publication; and that the publication must be
made forthwith in the Official Gazette. 2
In the Comment 3 required of the then Solicitor General, he claimed first that
the motion was a request for an advisory opinion and should therefore be
dismissed, and, on the merits, that the clause "unless it is otherwise
provided" in Article 2 of the Civil Code meant that the publication required
therein was not always imperative; that publication, when necessary, did not
have to be made in the Official Gazette; and that in any case the subject
decision was concurred in only by three justices and consequently not
binding. This elicited a Reply 4 refuting these arguments. Came next the
February Revolution and the Court required the new Solicitor General to file
a Rejoinder in view of the supervening events, under Rule 3, Section 18, of
the Rules of Court. Responding, he submitted that issuances intended only
for the interval administration of a government agency or for particular
persons did not have to be published; that publication when necessary must
be in full and in the Official Gazette; and that, however, the decision under
reconsideration was not binding because it was not supported by eight
members of this Court. 5
The subject of contention is Article 2 of the Civil Code providing as
follows:jgc:chanrobles.com.ph
"ART. 2. Laws shall take effect after fifteen days following the completion of
their publication in the Official Gazette, unless it is otherwise provided. This
Code shall take effect one year after such publication."cralaw virtua1aw
library
After a careful study of this provision and of the arguments of the parties,
both on the original petition and on the instant motion, we have come to the
conclusion, and so hold, that the clause "unless it is otherwise provided"
refers to the date of effectivity and not to the requirement of publication itself,
which cannot in any event be omitted. This clause does not mean that the
legislature may make the law effective immediately upon approval, or on any
other date, without its previous publication.chanrobles virtual lawlibrary
Publication is indispensable in every case, but the legislature may in its
discretion provide that the usual fifteen-day period shall be shortened or
extended. An example, as pointed out by the present Chief Justice in his
separate concurrence in the original decision, 6 is the Civil Code which did
not become effective after fifteen days from its publication in the Official
Gazette but "one year after such publication." The general rule did not apply
because it was "otherwise provided."cralaw virtua1aw library
It is not correct to say that under the disputed clause publication may be
dispensed with altogether. The reason is that such omission would offend
due process insofar as it would deny the public knowledge of the laws that
are supposed to govern it. Surely, if the legislature could validly provide that
a law shall become effective immediately upon its approval notwithstanding
the lack of publication (or after an unreasonably short period after
publication), it is not unlikely that persons not aware of it would be prejudiced
as a result; and they would be so not because of a failure to comply with it
but simply because they did not know of its existence. Significantly, this is not
true only of penal laws as is commonly supposed. One can think of many
non-penal measures, like a law on prescription, which must also be
communicated to the persons they may affect before they can begin to
operate.cralawnad
We note at this point the conclusive presumption that every person knows
the law, which of course presupposes that the law has been published if the
presumption is to have any legal justification at all. It is no less important to
remember that Section 6 of the Bill of Rights recognizes "the right of the
people to information on matters of public concern," and this certainly applies
to, among others, and indeed especially, the legislative enactments of the
government.
The term "laws" should refer to all laws and not only to those of general
application, for strictly speaking all laws relate to the people in general albeit
there are some that do not apply to them directly. An example is a law
granting citizenship to a particular individual, like a relative of President
Marcos who was decreed instant naturalization. It surely cannot be said that
such a law does not affect the public although it unquestionably does not
apply directly to all the people. The subject of such law is a matter of public
interest which any member of the body politic may question in the political
forums or, if he is a proper party, even in the courts of justice. In fact, a law
without any bearing on the public would be invalid as an intrusion of privacy
or as class legislation or as an ultra vires act of the legislature. To be valid,
the law must invariably affect the public interest even if it might be directly
applicable only to one individual, or some of the people only, and not to the
public as a whole.
We hold therefore that all statutes, including those of local application and
private laws, shall be published as a condition for their effectivity, which shall
begin fifteen days after publication unless a different effectivity date is fixed
by the legislature.chanrobles.com:cralaw:red
Covered by this rule are presidential decrees and executive orders
promulgated by the President in the exercise of legislative powers whenever
the same are validly delegated by the legislature or, at present, directly
conferred by the Constitution. Administrative rules and regulations must also
be published if their purpose is to enforce or implement existing law pursuant
also to a valid delegation.
Interpretative regulations and those merely internal in nature, that is,
regulating only the personnel of the administrative agency and not the public,
need not be published. Neither is publication required of the so-called letters
of instructions issued by administrative superiors concerning the rules or
guidelines to be followed by their subordinates in the performance of their
duties.chanroblesvirtuallawlibrary
Accordingly, even the charter of a city must be published notwithstanding
that it applies to only a portion of the national territory and directly affects
only the inhabitants of that place. All presidential decrees must be published,
including even, say, those naming a public place after a favored individual or
exempting him from certain prohibitions or requirements. The circulars issued
by the Monetary Board must be published if they are meant not merely to
interpret but to "fill in the details" of the Central Bank Act which that body is
supposed to enforce.
However, no publication is required of the instructions issued by, say, the
Minister of Social Welfare on the case studies to be made in petitions for
adoption or the rules laid down by the head of a government agency on the
assignments or workload of his personnel or the wearing of office uniforms.
Parenthetically, municipal ordinances are not covered by this rule but by the
Local Government Code.
We agree that the publication must be in full or it is no publication at all since
its purpose is to inform the public of the contents of the laws. As correctly
pointed out by the petitioners, the mere mention of the number of the
presidential decree, the title of such decree, its whereabouts (e.g., "with
Secretary Tuvera"), the supposed date of effectivity, and in a mere
supplement of the Official Gazette cannot satisfy the publication requirement.
This is not even substantial compliance. This was the manner, incidentally, in
which the General Appropriations Act for FY 1975, a presidential decree
undeniably of general applicability and interest, was "published" by the
Marcos administration. 7 The evident purpose was to withhold rather than
disclose information on this vital law.
Coming now to the original decision, it is true that only four justices were
categorically for publication in the Official Gazette 8 and that six others felt
that publication could be made elsewhere as long as the people were
sufficiently informed. 9 One reserved his vote 10 and another merely
acknowledged the need for due publication without indicating where it should
be made, 11 It is therefore necessary for the present membership of this
Court to arrive at a clear consensus on this matter and to lay down a binding
decision supported by the necessary vote.
There is much to be said of the view that the publication need not be made in
the Official Gazette, considering its erratic releases and limited readership.
Undoubtedly, newspapers of general circulation could better perform the
function of communicating the laws to the people as such periodicals are
more easily available, have a wider readership, and come out regularly. The
trouble, though, is that this kind of publication is not the one required or
authorized by existing law. As far as we know, no amendment has been
made of Article 2 of the Civil Code. The Solicitor General has not pointed to
such a law, and we have no information that it exists. If it does, it obviously
has not yet been published.
At any rate, this Court is not called upon to rule upon the wisdom of a law or
to repeal or modify it if we find it impractical. That is not our function. That
function belongs to the legislature. Our task is merely to interpret and apply
the law as conceived and approved by the political departments of the
government in accordance with the prescribed procedure. Consequently, we
have no choice but to pronounce that under Article 2 of the Civil Code, the
publication of laws must be made in the Official Gazette, and not elsewhere,
as a requirement for their effectivity after fifteen days from such publication or
after a different period provided by the legislature.chanrobles law library
We also hold that the publication must be made forthwith, or at least as soon
as possible, to give effect to the law pursuant to the said Article 2. There is
that possibility, of course, although not suggested by the parties that a law
could be rendered unenforceable by a mere refusal of the executive, for
whatever reason, to cause its publication as required. This is a matter,
however, that we do not need to examine at this time.
Finally, the claim of the former Solicitor General that the instant motion is a
request for an advisory opinion is untenable, to say the least, and deserves
no further comment.
The days of the secret laws and the unpublished decrees are over. This is
once again an open society, with all the acts of the government subject to
public scrutiny and available always to public cognizance. This has to be so if
our country is to remain democratic, with sovereignty residing in the people
and all government authority emanating from them.
Although they have delegated the power of legislation, they retain the
authority to review the work of their delegates and to ratify or reject it
according to their lights, through their freedom of expression and their right of
suffrage. This they cannot do if the acts of the legislature are concealed.
Laws must come out in the open in the clear light of the sun instead of
skulking in the shadows with their dark, deep secrets. Mysterious
pronouncements and rumored rules cannot be recognized as binding unless
their existence and contents are confirmed by a valid publication intended to
make full disclosure and give proper notice to the people. The furtive law is
like a scabbarded saber that cannot feint, parry or cut unless the naked blade
is drawn.
WHEREFORE, it is hereby declared that all laws as above defined shall
immediately upon their approval, or as soon thereafter as possible, be
published in full in the Official Gazette, to become effective only after fifteen
days from their publication, or on another date specified by the legislature, in
accordance with Article 2 of the Civil Code.chanroblesvirtual|awlibrary
SO ORDERED.
Teehankee, C.J., Feria, Yap, Narvasa, Melencio-Herrera, Alampay,
Gutierrez, Jr ., and Paras, JJ., concur.
Separate Opinions
FERNAN, J., concurring:chanrob1es virtual 1aw library
While concurring in the Court’s opinion penned by my distinguished
colleague, Mr. Justice Isagani A. Cruz, I would like to add a few
observations. Even as a Member of the defunct Batasang Pambansa, I took
a strong stand against the insidious manner by which the previous
dispensation had promulgated and made effective thousands of decrees,
executive orders, letters of instructions, etc. Never has the law-making power
which traditionally belongs to the legislature been used and abused to satisfy
the whims and caprices of a one-man legislative mill as it happened in the
past regime. Thus, in those days, it was not surprising to witness the sad
spectacle of two presidential decrees bearing the same number, although
covering two different subject matters. In point is the case of two presidential
decrees bearing number 1686 issued on March 19, 1980, one granting
Philippine citizenship to Michael M. Keon, the then President’s nephew and
the other imposing a tax on every motor vehicle equipped with air-
conditioner. This was further exacerbated by the issuance of PD No. 1686-A
also on March 19, 1980 granting Philippine citizenship to basketball players
Jeffrey Moore and Dennis George Still.chanroblesvirtualawlibrary
The categorical statement by this Court on the need for publication before
any law may be made effective seeks to prevent abuses on the part of the
lawmakers and, at the same time, ensures to the people their constitutional
right to due process and to information on matters of public concern.
FELICIANO, J., concurring:chanrob1es virtual 1aw library
I agree entirely with the opinion of the court so eloquently written by Mr.
Justice Isagani A. Cruz. At the same time, I wish to add a few statements to
reflect my understanding of what the Court is saying.chanrobles virtual
lawlibrary
A statute which by its terms provides for its coming into effect immediately
upon approval thereof, is properly interpreted as coming into effect
immediately upon publication thereof in the Official Gazette as provided in
Article 2 of the Civil Code. Such statute, in other words, should not be
regarded as purporting literally to come into effect immediately upon its
approval or enactment and without need of publication. For so to interpret
such statute would be to collide with the constitutional obstacle posed by the
due process clause. The enforcement of prescriptions which are both
unknown to and unknowable by those subjected to the statute, has been
throughout history a common tool of tyrannical governments. Such
application and enforcement constitutes at bottom a negation of the
fundamental principle of legality in the relations between a government and
its people.
At the same time, it is clear that the requirement of publication of a statute in
the Official Gazette, as distinguished from any other medium such as a
newspaper of general circulation, is embodied in a statutory norm and is not
a constitutional command. The statutory norm is set out in Article 2 of the
Civil Code and is supported and reinforced by Section 1 of Commonwealth
Act No. 638 and Section 35 of the Revised Administrative Code. A
specification of the Official Gazette as the prescribed medium of publication
may therefore be changed. Article 2 of the Civil Code could, without creating
a constitutional problem, be amended by a subsequent statute providing, for
instance, for publication either in the Official Gazette or in a newspaper of
general circulation in the country. Until such an amendatory statute is in fact
enacted, Article 2 of the Civil Code must be obeyed and publication effected
in the Official Gazette and not in any other medium.
EN BANC
G.R. No. 127882 January 27, 2004
LA BUGAL-B'LAAN TRIBAL ASSOCIATION, INC., represented by its
Chairman F'LONG MIGUEL M. LUMAYONG, WIGBERTO E. TAÑADA,
PONCIANO BENNAGEN, JAIME TADEO, RENATO R. CONSTANTINO,
JR., F'LONG AGUSTIN M. DABIE, ROBERTO P. AMLOY, RAQIM L.
DABIE, SIMEON H. DOLOJO, IMELDA M. GANDON, LENY B. GUSANAN,
MARCELO L. GUSANAN, QUINTOL A. LABUAYAN, LOMINGGES D.
LAWAY, BENITA P. TACUAYAN, minors JOLY L. BUGOY, represented
by his father UNDERO D. BUGOY, ROGER M. DADING, represented by
his father ANTONIO L. DADING, ROMY M. LAGARO, represented by his
father TOTING A. LAGARO, MIKENY JONG B. LUMAYONG, represented
by his father MIGUEL M. LUMAYONG, RENE T. MIGUEL, represented by
his mother EDITHA T. MIGUEL, ALDEMAR L. SAL, represented by his
father DANNY M. SAL, DAISY RECARSE, represented by her mother
LYDIA S. SANTOS, EDWARD M. EMUY, ALAN P. MAMPARAIR, MARIO
L. MANGCAL, ALDEN S. TUSAN, AMPARO S. YAP, VIRGILIO CULAR,
MARVIC M.V.F. LEONEN, JULIA REGINA CULAR, GIAN CARLO CULAR,
VIRGILIO CULAR, JR., represented by their father VIRGILIO CULAR,
PAUL ANTONIO P. VILLAMOR, represented by his parents JOSE
VILLAMOR and ELIZABETH PUA-VILLAMOR, ANA GININA R. TALJA,
represented by her father MARIO JOSE B. TALJA, SHARMAINE R.
CUNANAN, represented by her father ALFREDO M. CUNANAN,
ANTONIO JOSE A. VITUG III, represented by his mother ANNALIZA A.
VITUG, LEAN D. NARVADEZ, represented by his father MANUEL E.
NARVADEZ, JR., ROSERIO MARALAG LINGATING, represented by her
father RIO OLIMPIO A. LINGATING, MARIO JOSE B. TALJA, DAVID E.
DE VERA, MARIA MILAGROS L. SAN JOSE, SR., SUSAN O. BOLANIO,
OND, LOLITA G. DEMONTEVERDE, BENJIE L. NEQUINTO,1 ROSE LILIA
S. ROMANO, ROBERTO S. VERZOLA, EDUARDO AURELIO C. REYES,
LEAN LOUEL A. PERIA, represented by his father ELPIDIO V.
PERIA,2 GREEN FORUM PHILIPPINES, GREEN FORUM WESTERN
VISAYAS, (GF-WV), ENVIRONMETAL LEGAL ASSISTANCE CENTER
(ELAC), PHILIPPINE KAISAHAN TUNGO SA KAUNLARAN NG
KANAYUNAN AT REPORMANG PANSAKAHAN
(KAISAHAN),3 KAISAHAN TUNGO SA KAUNLARAN NG KANAYUNAN
AT REPORMANG PANSAKAHAN (KAISAHAN), PARTNERSHIP FOR
AGRARIAN REFORM and RURAL DEVELOPMENT SERVICES, INC.
(PARRDS), PHILIPPINE PART`NERSHIP FOR THE DEVELOPMENT OF
HUMAN RESOURCES IN THE RURAL AREAS, INC. (PHILDHRRA),
WOMEN'S LEGAL BUREAU (WLB), CENTER FOR ALTERNATIVE
DEVELOPMENT INITIATIVES, INC. (CADI), UPLAND DEVELOPMENT
INSTITUTE (UDI), KINAIYAHAN FOUNDATION, INC., SENTRO NG
ALTERNATIBONG LINGAP PANLIGAL (SALIGAN), LEGAL RIGHTS AND
NATURAL RESOURCES CENTER, INC. (LRC), petitioners,
vs.
VICTOR O. RAMOS, SECRETARY, DEPARTMENT OF ENVIRONMENT
AND NATURAL RESOURCES (DENR), HORACIO RAMOS, DIRECTOR,
MINES AND GEOSCIENCES BUREAU (MGB-DENR), RUBEN TORRES,
EXECUTIVE SECRETARY, and WMC (PHILIPPINES), INC.4 respondents.
DECISION
CARPIO-MORALES, J.:
The present petition for mandamus and prohibition assails the
constitutionality of Republic Act No. 7942,5 otherwise known as the
PHILIPPINE MINING ACT OF 1995, along with the Implementing Rules and
Regulations issued pursuant thereto, Department of Environment and
Natural Resources (DENR) Administrative Order 96-40, and of the Financial
and Technical Assistance Agreement (FTAA) entered into on March 30, 1995
by the Republic of the Philippines and WMC (Philippines), Inc. (WMCP), a
corporation organized under Philippine laws.
On July 25, 1987, then President Corazon C. Aquino issued Executive Order
(E.O.) No. 2796 authorizing the DENR Secretary to accept, consider and
evaluate proposals from foreign-owned corporations or foreign investors for
contracts or agreements involving either technical or financial assistance for
large-scale exploration, development, and utilization of minerals, which, upon
appropriate recommendation of the Secretary, the President may execute
with the foreign proponent. In entering into such proposals, the President
shall consider the real contributions to the economic growth and general
welfare of the country that will be realized, as well as the development and
use of local scientific and technical resources that will be promoted by the
proposed contract or agreement. Until Congress shall determine otherwise,
large-scale mining, for purpose of this Section, shall mean those proposals
for contracts or agreements for mineral resources exploration, development,
and utilization involving a committed capital investment in a single mining unit
project of at least Fifty Million Dollars in United States Currency (US
$50,000,000.00).7
On March 3, 1995, then President Fidel V. Ramos approved R.A. No. 7942
to "govern the exploration, development, utilization and processing of all
mineral resources."8 R.A. No. 7942 defines the modes of mineral agreements
for mining operations,9 outlines the procedure for their filing and
approval,10 assignment/transfer11 and withdrawal,12and fixes their
terms.13 Similar provisions govern financial or technical assistance
agreements.14
The law prescribes the qualifications of contractors 15 and grants them certain
rights, including timber,16 water17 and easement18 rights, and the right to
possess explosives.19 Surface owners, occupants, or concessionaires are
forbidden from preventing holders of mining rights from entering private lands
and concession areas.20 A procedure for the settlement of conflicts is
likewise provided for.21
The Act restricts the conditions for exploration,22 quarry23 and other24 permits.
It regulates the transport, sale and processing of minerals,25 and promotes
the development of mining communities, science and mining
technology,26and safety and environmental protection.27
The government's share in the agreements is spelled out and
allocated,28 taxes and fees are imposed,29 incentives granted.30 Aside from
penalizing certain acts,31 the law likewise specifies grounds for the
cancellation, revocation and termination of agreements and permits.32
On April 9, 1995, 30 days following its publication on March 10, 1995 in
Malaya and Manila Times, two newspapers of general circulation, R.A. No.
7942 took effect.33 Shortly before the effectivity of R.A. No. 7942, however, or
on March 30, 1995, the President entered into an FTAA with WMCP covering
99,387 hectares of land in South Cotabato, Sultan Kudarat, Davao del Sur
and North Cotabato.34
On August 15, 1995, then DENR Secretary Victor O. Ramos issued DENR
Administrative Order (DAO) No. 95-23, s. 1995, otherwise known as the
Implementing Rules and Regulations of R.A. No. 7942. This was later
repealed by DAO No. 96-40, s. 1996 which was adopted on December 20,
1996.
On January 10, 1997, counsels for petitioners sent a letter to the DENR
Secretary demanding that the DENR stop the implementation of R.A. No.
7942 and DAO No. 96-40,35 giving the DENR fifteen days from receipt36 to
act thereon. The DENR, however, has yet to respond or act on petitioners'
letter.37
Petitioners thus filed the present petition for prohibition and mandamus, with
a prayer for a temporary restraining order. They allege that at the time of the
filing of the petition, 100 FTAA applications had already been filed, covering
an area of 8.4 million hectares,38 64 of which applications are by fully foreign-
owned corporations covering a total of 5.8 million hectares, and at least one
by a fully foreign-owned mining company over offshore areas.39
Petitioners claim that the DENR Secretary acted without or in excess of
jurisdiction:
I
x x x in signing and promulgating DENR Administrative Order No. 96-40
implementing Republic Act No. 7942, the latter being unconstitutional in that
it allows fully foreign owned corporations to explore, develop, utilize and
exploit mineral resources in a manner contrary to Section 2, paragraph 4,
Article XII of the Constitution;
II
x x x in signing and promulgating DENR Administrative Order No. 96-40
implementing Republic Act No. 7942, the latter being unconstitutional in that
it allows the taking of private property without the determination of public use
and for just compensation;
III
x x x in signing and promulgating DENR Administrative Order No. 96-40
implementing Republic Act No. 7942, the latter being unconstitutional in that
it violates Sec. 1, Art. III of the Constitution;
IV
x x x in signing and promulgating DENR Administrative Order No. 96-40
implementing Republic Act No. 7942, the latter being unconstitutional in that
it allows enjoyment by foreign citizens as well as fully foreign owned
corporations of the nation's marine wealth contrary to Section 2, paragraph 2
of Article XII of the Constitution;
V Holdings Limited, a publicly listed major Australian mining and exploration
x x x in signing and promulgating DENR Administrative Order No. 96-40
implementing Republic Act No. 7942, the latter being unconstitutional in that
it allows priority to foreign and fully foreign owned corporations in the
exploration, development and utilization of mineral resources contrary to
Article XII of the Constitution;
VI
x x x in signing and promulgating DENR Administrative Order No. 96-40
implementing Republic Act No. 7942, the latter being unconstitutional in that
it allows the inequitable sharing of wealth contrary to Sections [sic] 1,
paragraph 1, and Section 2, paragraph 4[,] [Article XII] of the Constitution;
VII
x x x in recommending approval of and implementing the Financial and
Technical Assistance Agreement between the President of the Republic of
the Philippines and Western Mining Corporation Philippines Inc. because the
same is illegal and unconstitutional.40
They pray that the Court issue an order:
(a) Permanently enjoining respondents from acting on any
application for Financial or Technical Assistance Agreements;
(b) Declaring the Philippine Mining Act of 1995 or Republic Act No.
7942 as unconstitutional and null and void;
(c) Declaring the Implementing Rules and Regulations of the
Philippine Mining Act contained in DENR Administrative Order No.
96-40 and all other similar administrative issuances as
unconstitutional and null and void; and
(d) Cancelling the Financial and Technical Assistance Agreement
issued to Western Mining Philippines, Inc. as unconstitutional, illegal
and null and void.41
Impleaded as public respondents are Ruben Torres, the then Executive
Secretary, Victor O. Ramos, the then DENR Secretary, and Horacio Ramos,
Director of the Mines and Geosciences Bureau of the DENR. Also impleaded
is private respondent WMCP, which entered into the assailed FTAA with the
Philippine Government. WMCP is owned by WMC Resources International
Pty., Ltd. (WMC), "a wholly owned subsidiary of Western Mining Corporation
company."42 By WMCP's information, "it is a 100% owned subsidiary of WMC
LIMITED."43
Respondents, aside from meeting petitioners' contentions, argue that the
requisites for judicial inquiry have not been met and that the petition does not
comply with the criteria for prohibition and mandamus. Additionally,
respondent WMCP argues that there has been a violation of the rule on
hierarchy of courts.
After petitioners filed their reply, this Court granted due course to the petition.
The parties have since filed their respective memoranda.
WMCP subsequently filed a Manifestation dated September 25, 2002
alleging that on January 23, 2001, WMC sold all its shares in WMCP to
Sagittarius Mines, Inc. (Sagittarius), a corporation organized under Philippine
laws.44WMCP was subsequently renamed "Tampakan Mineral Resources
Corporation."45 WMCP claims that at least 60% of the equity of Sagittarius is
owned by Filipinos and/or Filipino-owned corporations while about 40% is
owned by Indophil Resources NL, an Australian company. 46 It further claims
that by such sale and transfer of shares, "WMCP has ceased to be
connected in any way with WMC."47
By virtue of such sale and transfer, the DENR Secretary, by Order of
December 18, 2001,48 approved the transfer and registration of the subject
FTAA from WMCP to Sagittarius. Said Order, however, was appealed by
Lepanto Consolidated Mining Co. (Lepanto) to the Office of the President
which upheld it by Decision of July 23, 2002.49 Its motion for reconsideration
having been denied by the Office of the President by Resolution of
November 12, 2002,50 Lepanto filed a petition for review51 before the Court of
Appeals. Incidentally, two other petitions for review related to the approval of
the transfer and registration of the FTAA to Sagittarius were recently
resolved by this Court.52
It bears stressing that this case has not been rendered moot either by the
transfer and registration of the FTAA to a Filipino-owned corporation or by
the non-issuance of a temporary restraining order or a preliminary injunction
to stay the above-said July 23, 2002 decision of the Office of the
President.53 The validity of the transfer remains in dispute and awaits final
judicial determination. This assumes, of course, that such transfer cures the
FTAA's alleged unconstitutionality, on which question judgment is reserved.
WMCP also points out that the original claimowners of the major mineralized
areas included in the WMCP FTAA, namely, Sagittarius, Tampakan Mining
Corporation, and Southcot Mining Corporation, are all Filipino-owned
corporations,54 each of which was a holder of an approved Mineral
Production Sharing Agreement awarded in 1994, albeit their respective
mineral claims were subsumed in the WMCP FTAA;55 and that these three
companies are the same companies that consolidated their interests in
Sagittarius to whom WMC sold its 100% equity in WMCP.56 WMCP
concludes that in the event that the FTAA is invalidated, the MPSAs of the
three corporations would be revived and the mineral claims would revert to
their original claimants.57
These circumstances, while informative, are hardly significant in the
resolution of this case, it involving the validity of the FTAA, not the possible
consequences of its invalidation.
Of the above-enumerated seven grounds cited by petitioners, as will be
shown later, only the first and the last need be delved into; in the latter, the
discussion shall dwell only insofar as it questions the effectivity of E. O. No.
279 by virtue of which order the questioned FTAA was forged.
I
Before going into the substantive issues, the procedural questions posed by
respondents shall first be tackled.
REQUISITES FOR JUDICIAL REVIEW
When an issue of constitutionality is raised, this Court can exercise its power
of judicial review only if the following requisites are present:
(1) The existence of an actual and appropriate case;
(2) A personal and substantial interest of the party raising the
constitutional question;
(3) The exercise of judicial review is pleaded at the earliest
opportunity; and
(4) The constitutional question is the lis mota of the case. 58
Respondents claim that the first three requisites are not present.
Section 1, Article VIII of the Constitution states that "(j)udicial power includes
the duty of the courts of justice to settle actual controversies involving rights
which are legally demandable and enforceable." The power of judicial review,
therefore, is limited to the determination of actual cases and controversies.59
An actual case or controversy means an existing case or controversy that is
appropriate or ripe for determination, not conjectural or anticipatory, 60 lest the
decision of the court would amount to an advisory opinion.61 The power does
not extend to hypothetical questions62 since any attempt at abstraction could
only lead to dialectics and barren legal questions and to sterile conclusions
unrelated to actualities.63
"Legal standing" or locus standi has been defined as a personal and
substantial interest in the case such that the party has sustained or will
sustain direct injury as a result of the governmental act that is being
challenged,64alleging more than a generalized grievance.65 The gist of the
question of standing is whether a party alleges "such personal stake in the
outcome of the controversy as to assure that concrete adverseness which
sharpens the presentation of issues upon which the court depends for
illumination of difficult constitutional questions."66 Unless a person is
injuriously affected in any of his constitutional rights by the operation of
statute or ordinance, he has no standing.67
Petitioners traverse a wide range of sectors. Among them are La Bugal
B'laan Tribal Association, Inc., a farmers and indigenous people's
cooperative organized under Philippine laws representing a community
actually affected by the mining activities of WMCP, members of said
cooperative,68 as well as other residents of areas also affected by the mining
activities of WMCP.69 These petitioners have standing to raise the
constitutionality of the questioned FTAA as they allege a personal and
substantial injury. They claim that they would suffer "irremediable
displacement"70 as a result of the implementation of the FTAA allowing
WMCP to conduct mining activities in their area of residence. They thus meet
the appropriate case requirement as they assert an interest adverse to that of
respondents who, on the other hand, insist on the FTAA's validity.
In view of the alleged impending injury, petitioners also have standing to
assail the validity of E.O. No. 279, by authority of which the FTAA was
executed.
Public respondents maintain that petitioners, being strangers to the FTAA,
cannot sue either or both contracting parties to annul it.71 In other words, they
contend that petitioners are not real parties in interest in an action for the
annulment of contract.
Public respondents' contention fails. The present action is not merely one for
annulment of contract but for prohibition and mandamus. Petitioners allege
that public respondents acted without or in excess of jurisdiction in
implementing the FTAA, which they submit is unconstitutional. As the case
involves constitutional questions, this Court is not concerned with whether
petitioners are real parties in interest, but with whether they have legal
standing. As held in Kilosbayan v. Morato:72
x x x. "It is important to note . . . that standing because of its constitutional
and public policy underpinnings, is very different from questions relating to
whether a particular plaintiff is the real party in interest or has capacity to
sue. Although all three requirements are directed towards ensuring that only
certain parties can maintain an action, standing restrictions require a partial
consideration of the merits, as well as broader policy concerns relating to the
proper role of the judiciary in certain areas.["] (FRIEDENTHAL, KANE AND
MILLER, CIVIL PROCEDURE 328 [1985])
Standing is a special concern in constitutional law because in some cases
suits are brought not by parties who have been personally injured by the
operation of a law or by official action taken, but by concerned citizens,
taxpayers or voters who actually sue in the public interest. Hence, the
question in standing is whether such parties have "alleged such a personal
stake in the outcome of the controversy as to assure that concrete
adverseness which sharpens the presentation of issues upon which the court
so largely depends for illumination of difficult constitutional questions." (Baker
v. Carr, 369 U.S. 186, 7 L.Ed.2d 633 [1962].)
As earlier stated, petitioners meet this requirement.
The challenge against the constitutionality of R.A. No. 7942 and DAO No. 96-
40 likewise fulfills the requisites of justiciability. Although these laws were not
in force when the subject FTAA was entered into, the question as to their
validity is ripe for adjudication.
The WMCP FTAA provides:
14.3 Future Legislation
Any term and condition more favourable to Financial &Technical Assistance
Agreement contractors resulting from repeal or amendment of any existing
law or regulation or from the enactment of a law, regulation or administrative
order shall be considered a part of this Agreement.
It is undisputed that R.A. No. 7942 and DAO No. 96-40 contain provisions
that are more favorable to WMCP, hence, these laws, to the extent that they
are favorable to WMCP, govern the FTAA.
In addition, R.A. No. 7942 explicitly makes certain provisions apply to pre-
existing agreements.
SEC. 112. Non-impairment of Existing Mining/Quarrying Rights. – x x x That
the provisions of Chapter XIV on government share in mineral production-
sharing agreement and of Chapter XVI on incentives of this Act shall
immediately govern and apply to a mining lessee or contractor unless the
mining lessee or contractor indicates his intention to the secretary, in writing,
not to avail of said provisions x x x Provided, finally, That such leases,
production-sharing agreements, financial or technical assistance agreements
shall comply with the applicable provisions of this Act and its implementing
rules and regulations.
As there is no suggestion that WMCP has indicated its intention not to avail
of the provisions of Chapter XVI of R.A. No. 7942, it can safely be presumed
that they apply to the WMCP FTAA.
Misconstruing the application of the third requisite for judicial review – that
the exercise of the review is pleaded at the earliest opportunity – WMCP
points out that the petition was filed only almost two years after the execution
of the FTAA, hence, not raised at the earliest opportunity.
The third requisite should not be taken to mean that the question of
constitutionality must be raised immediately after the execution of the state
action complained of. That the question of constitutionality has not been
raised before is not a valid reason for refusing to allow it to be raised
later.73 A contrary rule would mean that a law, otherwise unconstitutional,
would lapse into constitutionality by the mere failure of the proper party to
promptly file a case to challenge the same.
PROPRIETY OF PROHIBITION AND MANDAMUS
Before the effectivity in July 1997 of the Revised Rules of Civil Procedure,
Section 2 of Rule 65 read:
SEC. 2. Petition for prohibition. – When the proceedings of any tribunal,
corporation, board, or person, whether exercising functions judicial or
ministerial, are without or in excess of its or his jurisdiction, or with grave
abuse of discretion, and there is no appeal or any other plain, speedy, and
adequate remedy in the ordinary course of law, a person aggrieved thereby
may file a verified petition in the proper court alleging the facts with certainty
and praying that judgment be rendered commanding the defendant to desist
from further proceeding in the action or matter specified therein.
Prohibition is a preventive remedy.74 It seeks a judgment ordering the
defendant to desist from continuing with the commission of an act perceived
to be illegal.75
The petition for prohibition at bar is thus an appropriate remedy. While the
execution of the contract itself may be fait accompli, its implementation is not.
Public respondents, in behalf of the Government, have obligations to fulfill
under said contract. Petitioners seek to prevent them from fulfilling such
obligations on the theory that the contract is unconstitutional and, therefore,
void.
The propriety of a petition for prohibition being upheld, discussion of the
propriety of the mandamus aspect of the petition is rendered unnecessary.
HIERARCHY OF COURTS
The contention that the filing of this petition violated the rule on hierarchy of
courts does not likewise lie. The rule has been explained thus:
Between two courts of concurrent original jurisdiction, it is the lower court that
should initially pass upon the issues of a case. That way, as a particular case
goes through the hierarchy of courts, it is shorn of all but the important legal
issues or those of first impression, which are the proper subject of attention
of the appellate court. This is a procedural rule borne of experience and
adopted to improve the administration of justice.
This Court has consistently enjoined litigants to respect the hierarchy of
courts. Although this Court has concurrent jurisdiction with the Regional Trial
Courts and the Court of Appeals to issue writs of certiorari, prohibition,
mandamus, quo warranto, habeas corpus and injunction, such concurrence
does not give a party unrestricted freedom of choice of court forum. The
resort to this Court's primary jurisdiction to issue said writs shall be allowed
only where the redress desired cannot be obtained in the appropriate courts
or where exceptional and compelling circumstances justify such invocation.
We held in People v. Cuaresma that:
A becoming regard for judicial hierarchy most certainly indicates that
petitions for the issuance of extraordinary writs against first level ("inferior")
courts should be filed with the Regional Trial Court, and those against the
latter, with the Court of Appeals. A direct invocation of the Supreme Court's
original jurisdiction to issue these writs should be allowed only where there
are special and important reasons therefor, clearly and specifically set out in
the petition. This is established policy. It is a policy necessary to prevent
inordinate demands upon the Court's time and attention which are better
devoted to those matters within its exclusive jurisdiction, and to prevent
further over-crowding of the Court's docket x x x.76 [Emphasis supplied.]
The repercussions of the issues in this case on the Philippine mining
industry, if not the national economy, as well as the novelty thereof,
constitute exceptional and compelling circumstances to justify resort to this
Court in the first instance.
In all events, this Court has the discretion to take cognizance of a suit which
does not satisfy the requirements of an actual case or legal standing when
paramount public interest is involved.77 When the issues raised are of
paramount importance to the public, this Court may brush aside technicalities
of procedure.78
II
Petitioners contend that E.O. No. 279 did not take effect because its
supposed date of effectivity came after President Aquino had already lost her
legislative powers under the Provisional Constitution.
And they likewise claim that the WMC FTAA, which was entered into
pursuant to E.O. No. 279, violates Section 2, Article XII of the Constitution
because, among other reasons:
(1) It allows foreign-owned companies to extend more than mere
financial or technical assistance to the State in the exploitation,
development, and utilization of minerals, petroleum, and other
mineral oils, and even permits foreign owned companies to "operate
and manage mining activities."
(2) It allows foreign-owned companies to extend both technical and
financial assistance, instead of "either technical or financial
assistance."
To appreciate the import of these issues, a visit to the history of the pertinent
constitutional provision, the concepts contained therein, and the laws
enacted pursuant thereto, is in order.
Section 2, Article XII reads in full:
Sec. 2. All lands of the public domain, waters, minerals, coal, petroleum, and
other mineral oils, all forces of potential energy, fisheries, forests or timber,
wildlife, flora and fauna, and other natural resources are owned by the State.
With the exception of agricultural lands, all other natural resources shall not
be alienated. The exploration, development, and utilization of natural
resources shall be under the full control and supervision of the State. The
State may directly undertake such activities or it may enter into co-
production, joint venture, or production-sharing agreements with Filipino
citizens, or corporations or associations at least sixty per centum of whose
capital is owned by such citizens. Such agreements may be for a period not
exceeding twenty-five years, renewable for not more than twenty-five years,
and under such terms and conditions as may be provided by law. In cases of
water rights for irrigation, water supply, fisheries, or industrial uses other than
the development of water power, beneficial use may be the measure and
limit of the grant.
The State shall protect the nation's marine wealth in its archipelagic waters,
territorial sea, and exclusive economic zone, and reserve its use and
enjoyment exclusively to Filipino citizens.
The Congress may, by law, allow small-scale utilization of natural resources
by Filipino citizens, as well as cooperative fish farming, with priority to
subsistence fishermen and fish-workers in rivers, lakes, bays, and lagoons.
The President may enter into agreements with foreign-owned corporations
involving either technical or financial assistance for large-scale exploration,
development, and utilization of minerals, petroleum, and other mineral oils
according to the general terms and conditions provided by law, based on real
contributions to the economic growth and general welfare of the country. In
such agreements, the State shall promote the development and use of local
scientific and technical resources.
The President shall notify the Congress of every contract entered into in
accordance with this provision, within thirty days from its execution.
THE SPANISH REGIME AND THE REGALIAN DOCTRINE
The first sentence of Section 2 embodies the Regalian doctrine or jura
regalia. Introduced by Spain into these Islands, this feudal concept is based
on the State's power of dominium, which is the capacity of the State to own
or acquire property.79
In its broad sense, the term "jura regalia" refers to royal rights, or those rights
which the King has by virtue of his prerogatives. In Spanish law, it refers to a
right which the sovereign has over anything in which a subject has a right of
property or propriedad. These were rights enjoyed during feudal times by the
king as the sovereign.
The theory of the feudal system was that title to all lands was originally held
by the King, and while the use of lands was granted out to others who were
permitted to hold them under certain conditions, the King theoretically
retained the title. By fiction of law, the King was regarded as the original
proprietor of all lands, and the true and only source of title, and from him all
lands were held. The theory of jura regalia was therefore nothing more than a
natural fruit of conquest.80
The Philippines having passed to Spain by virtue of discovery and
conquest,81 earlier Spanish decrees declared that "all lands were held from
the Crown."82
The Regalian doctrine extends not only to land but also to "all natural wealth
that may be found in the bowels of the earth."83 Spain, in particular,
recognized the unique value of natural resources, viewing them, especially
minerals, as an abundant source of revenue to finance its wars against other
nations.84 Mining laws during the Spanish regime reflected this perspective.85
THE AMERICAN OCCUPATION AND THE CONCESSION REGIME
By the Treaty of Paris of December 10, 1898, Spain ceded "the archipelago
known as the Philippine Islands" to the United States. The Philippines was
hence governed by means of organic acts that were in the nature of charters
serving as a Constitution of the occupied territory from 1900 to
1935.86 Among the principal organic acts of the Philippines was the Act of
Congress of July 1, 1902, more commonly known as the Philippine Bill of
1902, through which the United States Congress assumed the administration
of the Philippine Islands.87 Section 20 of said Bill reserved the disposition of
mineral lands of the public domain from sale. Section 21 thereof allowed the
free and open exploration, occupation and purchase of mineral deposits not
only to citizens of the Philippine Islands but to those of the United States as
well:
Sec. 21. That all valuable mineral deposits in public lands in the Philippine
Islands, both surveyed and unsurveyed, are hereby declared to be free and
open to exploration, occupation and purchase, and the land in which they are
found, to occupation and purchase, by citizens of the United States or of said
Islands: Provided, That when on any lands in said Islands entered and
occupied as agricultural lands under the provisions of this Act, but not
patented, mineral deposits have been found, the working of such mineral
deposits is forbidden until the person, association, or corporation who or
which has entered and is occupying such lands shall have paid to the
Government of said Islands such additional sum or sums as will make the
total amount paid for the mineral claim or claims in which said deposits are
located equal to the amount charged by the Government for the same as
mineral claims.
Unlike Spain, the United States considered natural resources as a source of
wealth for its nationals and saw fit to allow both Filipino and American
citizens to explore and exploit minerals in public lands, and to grant patents
to private mineral lands.88 A person who acquired ownership over a parcel of
private mineral land pursuant to the laws then prevailing could exclude other
persons, even the State, from exploiting minerals within his property.89 Thus,
earlier jurisprudence90 held that:
A valid and subsisting location of mineral land, made and kept up in
accordance with the provisions of the statutes of the United States, has the
effect of a grant by the United States of the present and exclusive
possession of the lands located, and this exclusive right of possession and
enjoyment continues during the entire life of the location. x x x.
x x x.
The discovery of minerals in the ground by one who has a valid mineral
location perfects his claim and his location not only against third persons, but
also against the Government. x x x. [Italics in the original.]
The Regalian doctrine and the American system, therefore, differ in one
essential respect. Under the Regalian theory, mineral rights are not included
in a grant of land by the state; under the American doctrine, mineral rights
are included in a grant of land by the government.91
Section 21 also made possible the concession (frequently styled "permit",
license" or "lease")92 system.93 This was the traditional regime imposed by
the colonial administrators for the exploitation of natural resources in the
extractive sector (petroleum, hard minerals, timber, etc.).94
Under the concession system, the concessionaire makes a direct equity
investment for the purpose of exploiting a particular natural resource within a
given area.95 Thus, the concession amounts to complete control by the
concessionaire over the country's natural resource, for it is given exclusive
and plenary rights to exploit a particular resource at the point of
extraction.96 In consideration for the right to exploit a natural resource, the
concessionaire either pays rent or royalty, which is a fixed percentage of the
gross proceeds.97
Later statutory enactments by the legislative bodies set up in the Philippines
adopted the contractual framework of the concession.98 For instance, Act No.
2932,99 approved on August 31, 1920, which provided for the exploration,
location, and lease of lands containing petroleum and other mineral oils and
gas in the Philippines, and Act No. 2719,100 approved on May 14, 1917,
which provided for the leasing and development of coal lands in the
Philippines, both utilized the concession system.101
THE 1935 CONSTITUTION AND THE NATIONALIZATION OF NATURAL
RESOURCES
By the Act of United States Congress of March 24, 1934, popularly known as
the Tydings-McDuffie Law, the People of the Philippine Islands were
authorized to adopt a constitution.102 On July 30, 1934, the Constitutional
Convention met for the purpose of drafting a constitution, and the
Constitution subsequently drafted was approved by the Convention on
February 8, 1935.103 The Constitution was submitted to the President of the
United States on March 18, 1935.104 On March 23, 1935, the President of the
United States certified that the Constitution conformed substantially with the
provisions of the Act of Congress approved on March 24, 1934.105 On May
14, 1935, the Constitution was ratified by the Filipino people. 106
The 1935 Constitution adopted the Regalian doctrine, declaring all natural
resources of the Philippines, including mineral lands and minerals, to be
property belonging to the State.107 As adopted in a republican system, the
medieval concept of jura regalia is stripped of royal overtones and ownership
of the land is vested in the State.108
Section 1, Article XIII, on Conservation and Utilization of Natural Resources,
of the 1935 Constitution provided:
SECTION 1. All agricultural, timber, and mineral lands of the public
domain, waters, minerals, coal, petroleum, and other mineral oils, all
forces of potential energy, and other natural resources of the
Philippines belong to the State, and their disposition, exploitation,
development, or utilization shall be limited to citizens of the
Philippines, or to corporations or associations at least sixty per
centum of the capital of which is owned by such citizens, subject to
any existing right, grant, lease, or concession at the time of the
inauguration of the Government established under this Constitution.
Natural resources, with the exception of public agricultural land, shall
not be alienated, and no license, concession, or lease for the
exploitation, development, or utilization of any of the natural
resources shall be granted for a period exceeding twenty-five years,
except as to water rights for irrigation, water supply, fisheries, or
industrial uses other than the development of water power, in which
cases beneficial use may be the measure and the limit of the grant.
The nationalization and conservation of the natural resources of the country
was one of the fixed and dominating objectives of the 1935 Constitutional
Convention.109 One delegate relates:
There was an overwhelming sentiment in the Convention in favor of the
principle of state ownership of natural resources and the adoption of the
Regalian doctrine. State ownership of natural resources was seen as a
necessary starting point to secure recognition of the state's power to control
their disposition, exploitation, development, or utilization. The delegates of
the Constitutional Convention very well knew that the concept of State
ownership of land and natural resources was introduced by the Spaniards,
however, they were not certain whether it was continued and applied by the
Americans. To remove all doubts, the Convention approved the provision in
the Constitution affirming the Regalian doctrine.
The adoption of the principle of state ownership of the natural resources and
of the Regalian doctrine was considered to be a necessary starting point for
the plan of nationalizing and conserving the natural resources of the country.
For with the establishment of the principle of state ownership of the natural
resources, it would not be hard to secure the recognition of the power of the
State to control their disposition, exploitation, development or utilization. 110
The nationalization of the natural resources was intended (1) to insure their
conservation for Filipino posterity; (2) to serve as an instrument of national
defense, helping prevent the extension to the country of foreign control
through peaceful economic penetration; and (3) to avoid making the
Philippines a source of international conflicts with the consequent danger to
its internal security and independence.111
The same Section 1, Article XIII also adopted the concession system,
expressly permitting the State to grant licenses, concessions, or leases for
the exploitation, development, or utilization of any of the natural resources.
Grants, however, were limited to Filipinos or entities at least 60% of the
capital of which is owned by Filipinos.lawph!l.ne+
The swell of nationalism that suffused the 1935 Constitution was radically
diluted when on November 1946, the Parity Amendment, which came in the
form of an "Ordinance Appended to the Constitution," was ratified in a
plebiscite.112 The Amendment extended, from July 4, 1946 to July 3, 1974,
the right to utilize and exploit our natural resources to citizens of the United
States and business enterprises owned or controlled, directly or indirectly, by
citizens of the United States:113
Notwithstanding the provision of section one, Article Thirteen, and section
eight, Article Fourteen, of the foregoing Constitution, during the effectivity of
the Executive Agreement entered into by the President of the Philippines with
the President of the United States on the fourth of July, nineteen hundred
and forty-six, pursuant to the provisions of Commonwealth Act Numbered
Seven hundred and thirty-three, but in no case to extend beyond the third of
July, nineteen hundred and seventy-four, the disposition, exploitation,
development, and utilization of all agricultural, timber, and mineral lands of
the public domain, waters, minerals, coals, petroleum, and other mineral oils,
all forces and sources of potential energy, and other natural resources of the
Philippines, and the operation of public utilities, shall, if open to any person,
be open to citizens of the United States and to all forms of business
enterprise owned or controlled, directly or indirectly, by citizens of the United
States in the same manner as to, and under the same conditions imposed
upon, citizens of the Philippines or corporations or associations owned or
controlled by citizens of the Philippines.
The Parity Amendment was subsequently modified by the 1954 Revised
Trade Agreement, also known as the Laurel-Langley Agreement, embodied
in Republic Act No. 1355.114
THE PETROLEUM ACT OF 1949 AND THE CONCESSION SYSTEM
In the meantime, Republic Act No. 387,115 also known as the Petroleum Act
of 1949, was approved on June 18, 1949.
The Petroleum Act of 1949 employed the concession system for the
exploitation of the nation's petroleum resources. Among the kinds of
concessions it sanctioned were exploration and exploitation concessions,
which respectively granted to the concessionaire the exclusive right to
explore for116 or develop117 petroleum within specified areas.
Concessions may be granted only to duly qualified persons 118 who have
sufficient finances, organization, resources, technical competence, and skills
necessary to conduct the operations to be undertaken. 119
Nevertheless, the Government reserved the right to undertake such work
itself.120 This proceeded from the theory that all natural deposits or
occurrences of petroleum or natural gas in public and/or private lands in the
Philippines belong to the State.121 Exploration and exploitation concessions
did not confer upon the concessionaire ownership over the petroleum lands
and petroleum deposits.122 However, they did grant concessionaires the right
to explore, develop, exploit, and utilize them for the period and under the
conditions determined by the law.123
Concessions were granted at the complete risk of the concessionaire; the
Government did not guarantee the existence of petroleum or undertake, in
any case, title warranty.124
Concessionaires were required to submit information as maybe required by
the Secretary of Agriculture and Natural Resources, including reports of
geological and geophysical examinations, as well as production
reports.125Exploration126 and exploitation127 concessionaires were also
required to submit work programs.lavvphi1.net
Exploitation concessionaires, in particular, were obliged to pay an annual
exploitation tax,128 the object of which is to induce the concessionaire to
actually produce petroleum, and not simply to sit on the concession without
developing or exploiting it.129 These concessionaires were also bound to pay
the Government royalty, which was not less than 12½% of the petroleum
produced and saved, less that consumed in the operations of the
concessionaire.130 Under Article 66, R.A. No. 387, the exploitation tax may be
credited against the royalties so that if the concessionaire shall be actually
producing enough oil, it would not actually be paying the exploitation tax. 131
Failure to pay the annual exploitation tax for two consecutive years, 132 or the
royalty due to the Government within one year from the date it becomes
due,133 constituted grounds for the cancellation of the concession. In case of
delay in the payment of the taxes or royalty imposed by the law or by the
concession, a surcharge of 1% per month is exacted until the same are
paid.134
As a rule, title rights to all equipment and structures that the concessionaire
placed on the land belong to the exploration or exploitation
concessionaire.135 Upon termination of such concession, the concessionaire
had a right to remove the same.136
The Secretary of Agriculture and Natural Resources was tasked with carrying
out the provisions of the law, through the Director of Mines, who acted under
the Secretary's immediate supervision and control.137 The Act granted the
Secretary the authority to inspect any operation of the concessionaire and to
examine all the books and accounts pertaining to operations or conditions
related to payment of taxes and royalties.138
The same law authorized the Secretary to create an Administration Unit and
a Technical Board.139 The Administration Unit was charged, inter alia, with
the enforcement of the provisions of the law.140 The Technical Board had,
among other functions, the duty to check on the performance of
concessionaires and to determine whether the obligations imposed by the
Act and its implementing regulations were being complied with.141
Victorio Mario A. Dimagiba, Chief Legal Officer of the Bureau of Energy
Development, analyzed the benefits and drawbacks of the concession
system insofar as it applied to the petroleum industry:
Advantages of Concession. Whether it emphasizes income tax or royalty, the
most positive aspect of the concession system is that the State's financial
involvement is virtually risk free and administration is simple and
comparatively low in cost. Furthermore, if there is a competitive allocation of
the resource leading to substantial bonuses and/or greater royalty coupled
with a relatively high level of taxation, revenue accruing to the State under
the concession system may compare favorably with other financial
arrangements.
Disadvantages of Concession. There are, however, major negative aspects
to this system. Because the Government's role in the traditional concession
is passive, it is at a distinct disadvantage in managing and developing policy
for the nation's petroleum resource. This is true for several reasons. First,
even though most concession agreements contain covenants requiring
diligence in operations and production, this establishes only an indirect and
passive control of the host country in resource development. Second, and
more importantly, the fact that the host country does not directly participate in
resource management decisions inhibits its ability to train and employ its
nationals in petroleum development. This factor could delay or prevent the
country from effectively engaging in the development of its resources. Lastly,
a direct role in management is usually necessary in order to obtain a
knowledge of the international petroleum industry which is important to an
appreciation of the host country's resources in relation to those of other
countries.142
Other liabilities of the system have also been noted:
x x x there are functional implications which give the concessionaire great
economic power arising from its exclusive equity holding. This includes, first,
appropriation of the returns of the undertaking, subject to a modest royalty;
second, exclusive management of the project; third, control of production of
the natural resource, such as volume of production, expansion, research and
development; and fourth, exclusive responsibility for downstream operations,
like processing, marketing, and distribution. In short, even if nominally, the
state is the sovereign and owner of the natural resource being exploited, it
has been shorn of all elements of control over such natural resource because
of the exclusive nature of the contractual regime of the concession. The
concession system, investing as it does ownership of natural resources,
constitutes a consistent inconsistency with the principle embodied in our
Constitution that natural resources belong to the state and shall not be
alienated, not to mention the fact that the concession was the bedrock of the
colonial system in the exploitation of natural resources.143
Eventually, the concession system failed for reasons explained by Dimagiba:
Notwithstanding the good intentions of the Petroleum Act of 1949, the
concession system could not have properly spurred sustained oil exploration
activities in the country, since it assumed that such a capital-intensive, high
risk venture could be successfully undertaken by a single individual or a
small company. In effect, concessionaires' funds were easily exhausted.
Moreover, since the concession system practically closed its doors to
interested foreign investors, local capital was stretched to the limits. The old
system also failed to consider the highly sophisticated technology and
expertise required, which would be available only to multinational
companies.144
A shift to a new regime for the development of natural resources thus
seemed imminent.
PRESIDENTIAL DECREE NO. 87, THE 1973 CONSTITUTION AND THE
SERVICE CONTRACT SYSTEM
The promulgation on December 31, 1972 of Presidential Decree No.
87,145 otherwise known as The Oil Exploration and Development Act of 1972
signaled such a transformation. P.D. No. 87 permitted the government to
explore for and produce indigenous petroleum through "service contracts."146
"Service contracts" is a term that assumes varying meanings to different
people, and it has carried many names in different countries, like "work
contracts" in Indonesia, "concession agreements" in Africa, "production-
sharing agreements" in the Middle East, and "participation agreements" in
Latin America.147 A functional definition of "service contracts" in the
Philippines is provided as follows:
A service contract is a contractual arrangement for engaging in the
exploitation and development of petroleum, mineral, energy, land and other
natural resources by which a government or its agency, or a private person
granted a right or privilege by the government authorizes the other party
(service contractor) to engage or participate in the exercise of such right or
the enjoyment of the privilege, in that the latter provides financial or technical
resources, undertakes the exploitation or production of a given resource, or
directly manages the productive enterprise, operations of the exploration and
exploitation of the resources or the disposition of marketing or resources.148
In a service contract under P.D. No. 87, service and technology are furnished
by the service contractor for which it shall be entitled to the stipulated service
fee.149 The contractor must be technically competent and financially capable
to undertake the operations required in the contract.150
Financing is supposed to be provided by the Government to which all
petroleum produced belongs.151 In case the Government is unable to finance
petroleum exploration operations, the contractor may furnish services,
technology and financing, and the proceeds of sale of the petroleum
produced under the contract shall be the source of funds for payment of the
service fee and the operating expenses due the contractor.152 The contractor
shall undertake, manage and execute petroleum operations, subject to the
government overseeing the management of the operations.153 The contractor
provides all necessary services and technology and the requisite financing,
performs the exploration work obligations, and assumes all exploration risks
such that if no petroleum is produced, it will not be entitled to
reimbursement.154 Once petroleum in commercial quantity is discovered, the
contractor shall operate the field on behalf of the government.155
P.D. No. 87 prescribed minimum terms and conditions for every service
contract.156 It also granted the contractor certain privileges, including
exemption from taxes and payment of tariff duties,157 and permitted the
repatriation of capital and retention of profits abroad.158
Ostensibly, the service contract system had certain advantages over the
concession regime.159 It has been opined, though, that, in the Philippines, our
concept of a service contract, at least in the petroleum industry, was basically
a concession regime with a production-sharing element.160
On January 17, 1973, then President Ferdinand E. Marcos proclaimed the
ratification of a new Constitution.161Article XIV on the National Economy and
Patrimony contained provisions similar to the 1935 Constitution with regard
to Filipino participation in the nation's natural resources. Section 8, Article
XIV thereof provides:
Sec. 8. All lands of the public domain, waters, minerals, coal, petroleum and
other mineral oils, all forces of potential energy, fisheries, wildlife, and other
natural resources of the Philippines belong to the State. With the exception of
agricultural, industrial or commercial, residential and resettlement lands of
the public domain, natural resources shall not be alienated, and no license,
concession, or lease for the exploration, development, exploitation, or
utilization of any of the natural resources shall be granted for a period
exceeding twenty-five years, renewable for not more than twenty-five years,
except as to water rights for irrigation, water supply, fisheries, or industrial
uses other than the development of water power, in which cases beneficial
use may be the measure and the limit of the grant.
While Section 9 of the same Article maintained the Filipino-only policy in the
enjoyment of natural resources, it also allowed Filipinos, upon authority of the
Batasang Pambansa, to enter into service contracts with any person or entity
for the exploration or utilization of natural resources.
Sec. 9. The disposition, exploration, development, exploitation, or utilization
of any of the natural resources of the Philippines shall be limited to citizens,
or to corporations or associations at least sixty per centum of which is owned
by such citizens. The Batasang Pambansa, in the national interest, may
allow such citizens, corporations or associations to enter into service
contracts for financial, technical, management, or other forms of assistance
with any person or entity for the exploration, or utilization of any of the natural
resources. Existing valid and binding service contracts for financial, technical,
management, or other forms of assistance are hereby recognized as such.
[Emphasis supplied.]
The concept of service contracts, according to one delegate, was borrowed
from the methods followed by India, Pakistan and especially Indonesia in the
exploration of petroleum and mineral oils.162 The provision allowing such
contracts, according to another, was intended to "enhance the proper
development of our natural resources since Filipino citizens lack the needed
capital and technical know-how which are essential in the proper exploration,
development and exploitation of the natural resources of the country."163
The original idea was to authorize the government, not private entities, to
enter into service contracts with foreign entities.164 As finally approved,
however, a citizen or private entity could be allowed by the National
Assembly to enter into such service contract.165 The prior approval of the
National Assembly was deemed sufficient to protect the national
interest.166 Notably, none of the laws allowing service contracts were passed
by the Batasang Pambansa. Indeed, all of them were enacted by presidential
decree.
On March 13, 1973, shortly after the ratification of the new Constitution, the
President promulgated Presidential Decree No. 151.167 The law allowed
Filipino citizens or entities which have acquired lands of the public domain or
which own, hold or control such lands to enter into service contracts for
financial, technical, management or other forms of assistance with any
foreign persons or entity for the exploration, development, exploitation or
utilization of said lands.168
Presidential Decree No. 463,169 also known as The Mineral Resources
Development Decree of 1974, was enacted on May 17, 1974. Section 44 of
the decree, as amended, provided that a lessee of a mining claim may enter
into a service contract with a qualified domestic or foreign contractor for the
exploration, development and exploitation of his claims and the processing
and marketing of the product thereof.
Presidential Decree No. 704170 (The Fisheries Decree of 1975), approved on
May 16, 1975, allowed Filipinos engaged in commercial fishing to enter into
contracts for financial, technical or other forms of assistance with any foreign
person, corporation or entity for the production, storage, marketing and
processing of fish and fishery/aquatic products.171
Presidential Decree No. 705172 (The Revised Forestry Code of the
Philippines), approved on May 19, 1975, allowed "forest products licensees,
lessees, or permitees to enter into service contracts for financial, technical,
management, or other forms of assistance . . . with any foreign person or
entity for the exploration, development, exploitation or utilization of the forest
resources."173
Yet another law allowing service contracts, this time for geothermal
resources, was Presidential Decree No. 1442,174 which was signed into law
on June 11, 1978. Section 1 thereof authorized the Government to enter into
service contracts for the exploration, exploitation and development of
geothermal resources with a foreign contractor who must be technically and
financially capable of undertaking the operations required in the service
contract.
Thus, virtually the entire range of the country's natural resources –from
petroleum and minerals to geothermal energy, from public lands and forest
resources to fishery products – was well covered by apparent legal authority
to engage in the direct participation or involvement of foreign persons or
corporations (otherwise disqualified) in the exploration and utilization of
natural resources through service contracts.175
THE 1987 CONSTITUTION AND TECHNICAL OR FINANCIAL
ASSISTANCE AGREEMENTS
After the February 1986 Edsa Revolution, Corazon C. Aquino took the reins
of power under a revolutionary government. On March 25, 1986, President
Aquino issued Proclamation No. 3,176 promulgating the Provisional
Constitution, more popularly referred to as the Freedom Constitution. By
authority of the same Proclamation, the President created a Constitutional
Commission (CONCOM) to draft a new constitution, which took effect on the
date of its ratification on February 2, 1987.177
The 1987 Constitution retained the Regalian doctrine. The first sentence of
Section 2, Article XII states: "All lands of the public domain, waters, minerals,
coal, petroleum, and other mineral oils, all forces of potential energy,
fisheries, forests or timber, wildlife, flora and fauna, and other natural
resources are owned by the State."
Like the 1935 and 1973 Constitutions before it, the 1987 Constitution, in the
second sentence of the same provision, prohibits the alienation of natural
resources, except agricultural lands.
The third sentence of the same paragraph is new: "The exploration,
development and utilization of natural resources shall be under the full
control and supervision of the State." The constitutional policy of the State's
"full control and supervision" over natural resources proceeds from the
concept of jura regalia, as well as the recognition of the importance of the
country's natural resources, not only for national economic development, but
also for its security and national defense.178 Under this provision, the State
assumes "a more dynamic role" in the exploration, development and
utilization of natural resources.179
Conspicuously absent in Section 2 is the provision in the 1935 and 1973
Constitutions authorizing the State to grant licenses, concessions, or leases
for the exploration, exploitation, development, or utilization of natural
resources. By such omission, the utilization of inalienable lands of public
domain through "license, concession or lease" is no longer allowed under the
1987 Constitution.180
Having omitted the provision on the concession system, Section 2 proceeded
to introduce "unfamiliar language":181
The State may directly undertake such activities or it may enter into co-
production, joint venture, or production-sharing agreements with Filipino
citizens, or corporations or associations at least sixty per centum of whose
capital is owned by such citizens.
Consonant with the State's "full supervision and control" over natural
resources, Section 2 offers the State two "options."182 One, the State may
directly undertake these activities itself; or two, it may enter into co-
production, joint venture, or production-sharing agreements with Filipino
citizens, or entities at least 60% of whose capital is owned by such citizens.
A third option is found in the third paragraph of the same section:
The Congress may, by law, allow small-scale utilization of natural resources
by Filipino citizens, as well as cooperative fish farming, with priority to
subsistence fishermen and fish-workers in rivers, lakes, bays, and lagoons.
While the second and third options are limited only to Filipino citizens or, in
the case of the former, to corporations or associations at least 60% of the
capital of which is owned by Filipinos, a fourth allows the participation of
foreign-owned corporations. The fourth and fifth paragraphs of Section 2
provide:
The President may enter into agreements with foreign-owned corporations
involving either technical or financial assistance for large-scale exploration,
development, and utilization of minerals, petroleum, and other mineral oils
according to the general terms and conditions provided by law, based on real
contributions to the economic growth and general welfare of the country. In
such agreements, the State shall promote the development and use of local
scientific and technical resources.
The President shall notify the Congress of every contract entered into in
accordance with this provision, within thirty days from its execution.
Although Section 2 sanctions the participation of foreign-owned corporations
in the exploration, development, and utilization of natural resources, it
imposes certain limitations or conditions to agreements with such
corporations.
First, the parties to FTAAs. Only the President, in behalf of the State,
may enter into these agreements, and only with corporations. By
contrast, under the 1973 Constitution, a Filipino citizen, corporation
or association may enter into a service contract with a "foreign
person or entity."
Second, the size of the activities: only large-scale exploration,
development, and utilization is allowed. The term "large-scale usually
refers to very capital-intensive activities."183
Third, the natural resources subject of the activities is restricted to
minerals, petroleum and other mineral oils, the intent being to limit
service contracts to those areas where Filipino capital may not be
sufficient.184
Fourth, consistency with the provisions of statute. The agreements
must be in accordance with the terms and conditions provided by
law.
Fifth, Section 2 prescribes certain standards for entering into such
agreements. The agreements must be based on real contributions to
economic growth and general welfare of the country.
Sixth, the agreements must contain rudimentary stipulations for the
promotion of the development and use of local scientific and
technical resources.
Seventh, the notification requirement. The President shall notify
Congress of every financial or technical assistance agreement
entered into within thirty days from its execution.
Finally, the scope of the agreements. While the 1973 Constitution
referred to "service contracts for financial, technical, management, or
other forms of assistance" the 1987 Constitution provides for
"agreements. . . involving either financial or technical assistance." It
bears noting that the phrases "service contracts" and "management
or other forms of assistance" in the earlier constitution have been
omitted.
By virtue of her legislative powers under the Provisional
Constitution,185 President Aquino, on July 10, 1987, signed into law E.O. No.
211 prescribing the interim procedures in the processing and approval of
applications for the exploration, development and utilization of minerals. The
omission in the 1987 Constitution of the term "service contracts"
notwithstanding, the said E.O. still referred to them in Section 2 thereof:
Sec. 2. Applications for the exploration, development and utilization of
mineral resources, including renewal applications and applications for
approval of operating agreements and mining service contracts, shall be
accepted and processed and may be approved x x x. [Emphasis supplied.]
The same law provided in its Section 3 that the "processing, evaluation and
approval of all mining applications . . . operating agreements and service
contracts . . . shall be governed by Presidential Decree No. 463, as
amended, other existing mining laws, and their implementing rules and
regulations. . . ."
As earlier stated, on the 25th also of July 1987, the President issued E.O.
No. 279 by authority of which the subject WMCP FTAA was executed on
March 30, 1995.
On March 3, 1995, President Ramos signed into law R.A. No. 7942. Section
15 thereof declares that the Act "shall govern the exploration, development,
utilization, and processing of all mineral resources." Such declaration
notwithstanding, R.A. No. 7942 does not actually cover all the modes through
which the State may undertake the exploration, development, and utilization
of natural resources.
The State, being the owner of the natural resources, is accorded the primary
power and responsibility in the exploration, development and utilization
thereof. As such, it may undertake these activities through four modes:
The State may directly undertake such activities.
(2) The State may enter into co-production, joint venture or
production-sharing agreements with Filipino citizens or qualified
corporations.
(3) Congress may, by law, allow small-scale utilization of natural
resources by Filipino citizens.
 (4) For the large-scale exploration, development and utilization of
minerals, petroleum and other mineral oils, the President may enter
into agreements with foreign-owned corporations involving technical
or financial assistance.186
Except to charge the Mines and Geosciences Bureau of the DENR with
performing researches and surveys,187 and a passing mention of
government-owned or controlled corporations,188 R.A. No. 7942 does not
specify how the State should go about the first mode. The third mode, on the
other hand, is governed by Republic Act No. 7076189(the People's Small-
Scale Mining Act of 1991) and other pertinent laws.190 R.A. No. 7942
primarily concerns itself with the second and fourth modes.
Mineral production sharing, co-production and joint venture agreements are
collectively classified by R.A. No. 7942 as "mineral agreements."191 The
Government participates the least in a mineral production sharing agreement
(MPSA). In an MPSA, the Government grants the contractor 192 the exclusive
right to conduct mining operations within a contract area193 and shares in the
gross output.194 The MPSA contractor provides the financing, technology,
management and personnel necessary for the agreement's
implementation.195 The total government share in an MPSA is the excise tax
on mineral products under Republic Act No. 7729,196 amending Section
151(a) of the National Internal Revenue Code, as amended.197
In a co-production agreement (CA),198 the Government provides inputs to the
mining operations other than the mineral resource,199 while in a joint venture
agreement (JVA), where the Government enjoys the greatest participation,
the Government and the JVA contractor organize a company with both
parties having equity shares.200 Aside from earnings in equity, the
Government in a JVA is also entitled to a share in the gross output.201The
Government may enter into a CA202 or JVA203 with one or more contractors.
The Government's share in a CA or JVA is set out in Section 81 of the law:
The share of the Government in co-production and joint venture agreements
shall be negotiated by the Government and the contractor taking into
consideration the: (a) capital investment of the project, (b) the risks involved,
(c) contribution of the project to the economy, and (d) other factors that will
provide for a fair and equitable sharing between the Government and the
contractor. The Government shall also be entitled to compensations for its
other contributions which shall be agreed upon by the parties, and shall
consist, among other things, the contractor's income tax, excise tax, special
allowance, withholding tax due from the contractor's foreign stockholders
arising from dividend or interest payments to the said foreign stockholders, in
case of a foreign national and all such other taxes, duties and fees as
provided for under existing laws.
All mineral agreements grant the respective contractors the exclusive right to
conduct mining operations and to extract all mineral resources found in the
contract area.204 A "qualified person" may enter into any of the mineral
agreements with the Government.205 A "qualified person" is
any citizen of the Philippines with capacity to contract, or a corporation,
partnership, association, or cooperative organized or authorized for the
purpose of engaging in mining, with technical and financial capability to
undertake mineral resources development and duly registered in accordance
with law at least sixty per centum (60%) of the capital of which is owned by
citizens of the Philippines x x x.206
The fourth mode involves "financial or technical assistance agreements." An
FTAA is defined as "a contract involving financial or technical assistance for
large-scale exploration, development, and utilization of natural
resources."207 Any qualified person with technical and financial capability to
undertake large-scale exploration, development, and utilization of natural
resources in the Philippines may enter into such agreement directly with the
Government through the DENR.208 For the purpose of granting an FTAA, a
legally organized foreign-owned corporation (any corporation, partnership,
association, or cooperative duly registered in accordance with law in which
less than 50% of the capital is owned by Filipino citizens) 209 is deemed a
"qualified person."210
Other than the difference in contractors' qualifications, the principal
distinction between mineral agreements and FTAAs is the maximum contract
area to which a qualified person may hold or be granted.211 "Large-scale"
under R.A. No. 7942 is determined by the size of the contract area, as
opposed to the amount invested (US $50,000,000.00), which was the
standard under E.O. 279.
Like a CA or a JVA, an FTAA is subject to negotiation.212 The Government's
contributions, in the form of taxes, in an FTAA is identical to its contributions
in the two mineral agreements, save that in an FTAA:
The collection of Government share in financial or technical assistance
agreement shall commence after the financial or technical assistance
agreement contractor has fully recovered its pre-operating expenses,
exploration, and development expenditures, inclusive.213
III
Having examined the history of the constitutional provision and statutes
enacted pursuant thereto, a consideration of the substantive issues
presented by the petition is now in order.
 THE EFFECTIVITY OF EXECUTIVE ORDER NO. 279
Petitioners argue that E.O. No. 279, the law in force when the WMC FTAA
was executed, did not come into effect.
E.O. No. 279 was signed into law by then President Aquino on July 25, 1987,
two days before the opening of Congress on July 27, 1987.214 Section 8 of
the E.O. states that the same "shall take effect immediately." This provision,
according to petitioners, runs counter to Section 1 of E.O. No. 200,215 which
provides:
SECTION 1. Laws shall take effect after fifteen days following the completion
of their publication either in the Official Gazette or in a newspaper of general
circulation in the Philippines, unless it is otherwise provided. 216 [Emphasis
supplied.]
On that premise, petitioners contend that E.O. No. 279 could have only taken
effect fifteen days after its publication at which time Congress had already
convened and the President's power to legislate had ceased.
Respondents, on the other hand, counter that the validity of E.O. No. 279
was settled in Miners Association of the Philippines v. Factoran, supra. This
is of course incorrect for the issue in Miners Association was not the validity
of E.O. No. 279 but that of DAO Nos. 57 and 82 which were issued pursuant
thereto.
Nevertheless, petitioners' contentions have no merit.
It bears noting that there is nothing in E.O. No. 200 that prevents a law from
taking effect on a date other than – even before – the 15-day period after its
publication. Where a law provides for its own date of effectivity, such date
prevails over that prescribed by E.O. No. 200. Indeed, this is the very
essence of the phrase "unless it is otherwise provided" in Section 1 thereof.
Section 1, E.O. No. 200, therefore, applies only when a statute does not
provide for its own date of effectivity.
What is mandatory under E.O. No. 200, and what due process requires, as
this Court held in Tañada v. Tuvera,217is the publication of the law for without
such notice and publication, there would be no basis for the application of the
maxim "ignorantia legis n[eminem] excusat." It would be the height of
injustice to punish or otherwise burden a citizen for the transgression of a law
of which he had no notice whatsoever, not even a constructive one.
While the effectivity clause of E.O. No. 279 does not require its publication, it
is not a ground for its invalidation since the Constitution, being "the
fundamental, paramount and supreme law of the nation," is deemed written
in the law.218 Hence, the due process clause,219 which, so Tañada held,
mandates the publication of statutes, is read into Section 8 of E.O. No. 279.
Additionally, Section 1 of E.O. No. 200 which provides for publication "either
in the Official Gazette or in a newspaper of general circulation in the
Philippines," finds suppletory application. It is significant to note that E.O. No.
279 was actually published in the Official Gazette220 on August 3, 1987.
From a reading then of Section 8 of E.O. No. 279, Section 1 of E.O. No. 200,
and Tañada v. Tuvera, this Court holds that E.O. No. 279 became effective
immediately upon its publication in the Official Gazette on August 3, 1987.
That such effectivity took place after the convening of the first Congress is
irrelevant. At the time President Aquino issued E.O. No. 279 on July 25,
1987, she was still validly exercising legislative powers under the Provisional
Constitution.221 Article XVIII (Transitory Provisions) of the 1987 Constitution
explicitly states:
Sec. 6. The incumbent President shall continue to exercise legislative powers
until the first Congress is convened.
The convening of the first Congress merely precluded the exercise of
legislative powers by President Aquino; it did not prevent the effectivity of
laws she had previously enacted.
There can be no question, therefore, that E.O. No. 279 is an effective, and a
validly enacted, statute.
THE CONSTITUTIONALITY OF THE WMCP FTAA
Petitioners submit that, in accordance with the text of Section 2, Article XII of
the Constitution, FTAAs should be limited to "technical or financial
assistance" only. They observe, however, that, contrary to the language of
the Constitution, the WMCP FTAA allows WMCP, a fully foreign-owned
mining corporation, to extend more than mere financial or technical
assistance to the State, for it permits WMCP to manage and operate every
aspect of the mining activity. 222
Petitioners' submission is well-taken. It is a cardinal rule in the interpretation
of constitutions that the instrument must be so construed as to give effect to
the intention of the people who adopted it.223 This intention is to be sought in
the constitution itself, and the apparent meaning of the words is to be taken
as expressing it, except in cases where that assumption would lead to
absurdity, ambiguity, or contradiction.224 What the Constitution says
according to the text of the provision, therefore, compels acceptance and
negates the power of the courts to alter it, based on the postulate that the
framers and the people mean what they say.225 Accordingly, following the
literal text of the Constitution, assistance accorded by foreign-owned
corporations in the large-scale exploration, development, and utilization of
petroleum, minerals and mineral oils should be limited to "technical" or
"financial" assistance only.
WMCP nevertheless submits that the word "technical" in the fourth paragraph
of Section 2 of E.O. No. 279 encompasses a "broad number of possible
services," perhaps, "scientific and/or technological in basis."226 It thus posits
that it may also well include "the area of management or operations . . . so
long as such assistance requires specialized knowledge or skills, and are
related to the exploration, development and utilization of mineral
resources."227
This Court is not persuaded. As priorly pointed out, the phrase "management
or other forms of assistance" in the 1973 Constitution was deleted in the
1987 Constitution, which allows only "technical or financial assistance."
Casus omisus pro omisso habendus est. A person, object or thing omitted
from an enumeration must be held to have been omitted intentionally.228 As
will be shown later, the management or operation of mining activities by
foreign contractors, which is the primary feature of service contracts, was
precisely the evil that the drafters of the 1987 Constitution sought to
eradicate.
Respondents insist that "agreements involving technical or financial
assistance" is just another term for service contracts. They contend that the
proceedings of the CONCOM indicate "that although the terminology 'service
contract' was avoided [by the Constitution], the concept it represented was
not." They add that "[t]he concept is embodied in the phrase 'agreements
involving financial or technical assistance.'"229 And point out how members of
the CONCOM referred to these agreements as "service contracts." For
instance:
SR. TAN. Am I correct in thinking that the only difference between
these future service contracts and the past service contracts under
Mr. Marcos is the general law to be enacted by the legislature and
the notification of Congress by the President? That is the only
difference, is it not?
MR. VILLEGAS. That is right.
SR. TAN. So those are the safeguards[?]
MR. VILLEGAS. Yes. There was no law at all governing service
contracts before.
SR. TAN. Thank you, Madam President.230 [Emphasis supplied.]
WMCP also cites the following statements of Commissioners
Gascon, Garcia, Nolledo and Tadeo who alluded to service contracts
as they explained their respective votes in the approval of the draft
Article:
MR. GASCON. Mr. Presiding Officer, I vote no primarily because of
two reasons: One, the provision on service contracts. I felt that if we
would constitutionalize any provision on service contracts, this
should always be with the concurrence of Congress and not guided
only by a general law to be promulgated by Congress. x x
x.231 [Emphasis supplied.]
x x x.
MR. GARCIA. Thank you.
I vote no. x x x.
Service contracts are given constitutional legitimization in Section 3,
even when they have been proven to be inimical to the interests of
the nation, providing as they do the legal loophole for the exploitation
of our natural resources for the benefit of foreign interests. They
constitute a serious negation of Filipino control on the use and
disposition of the nation's natural resources, especially with regard to
those which are nonrenewable.232[Emphasis supplied.]
xxx
MR. NOLLEDO. While there are objectionable provisions in the
Article on National Economy and Patrimony, going over said
provisions meticulously, setting aside prejudice and personalities will
reveal that the article contains a balanced set of provisions. I hope
the forthcoming Congress will implement such provisions taking into
account that Filipinos should have real control over our economy and
patrimony, and if foreign equity is permitted, the same must be
subordinated to the imperative demands of the national interest.
x x x.
 It is also my understanding that service contracts involving foreign
corporations or entities are resorted to only when no Filipino
enterprise or Filipino-controlled enterprise could possibly undertake
the exploration or exploitation of our natural resources and that
compensation under such contracts cannot and should not equal
what should pertain to ownership of capital. In other words, the
service contract should not be an instrument to circumvent the basic
provision, that the exploration and exploitation of natural resources
should be truly for the benefit of Filipinos.
Thank you, and I vote yes.233 [Emphasis supplied.]
x x x.
MR. TADEO. Nais ko lamang ipaliwanag ang aking boto.
Matapos suriin ang kalagayan ng Pilipinas, ang saligang suliranin,
pangunahin ang salitang "imperyalismo." Ang ibig sabihin nito ay ang
sistema ng lipunang pinaghaharian ng iilang monopolyong kapitalista
at ang salitang "imperyalismo" ay buhay na buhay sa National
Economy and Patrimony na nating ginawa. Sa pamamagitan ng
salitang "based on," naroroon na ang free trade sapagkat tayo ay
mananatiling tagapagluwas ng hilaw na sangkap at tagaangkat ng
yaring produkto. Pangalawa, naroroon pa rin ang parity rights, ang
service contract, ang 60-40 equity sa natural resources. Habang
naghihirap ang sambayanang Pilipino, ginagalugad naman ng mga
dayuhan ang ating likas na yaman. Kailan man ang Article on
National Economy and Patrimony ay hindi nagpaalis sa pagkaalipin
ng ating ekonomiya sa kamay ng mga dayuhan. Ang solusyon sa
suliranin ng bansa ay dalawa lamang: ang pagpapatupad ng tunay
na reporma sa lupa at ang national industrialization. Ito ang
tinatawag naming pagsikat ng araw sa Silangan. Ngunit ang mga
landlords and big businessmen at ang mga komprador ay nagsasabi
na ang free trade na ito, ang kahulugan para sa amin, ay ipinipilit sa
ating sambayanan na ang araw ay sisikat sa Kanluran. Kailan man
hindi puwedeng sumikat ang araw sa Kanluran. I vote
no.234 [Emphasis supplied.]
This Court is likewise not persuaded.
As earlier noted, the phrase "service contracts" has been deleted in the 1987
Constitution's Article on National Economy and Patrimony. If the CONCOM
intended to retain the concept of service contracts under the 1973
Constitution, it could have simply adopted the old terminology ("service
contracts") instead of employing new and unfamiliar terms ("agreements . . .
involving either technical or financial assistance"). Such a difference between
the language of a provision in a revised constitution and that of a similar
provision in the preceding constitution is viewed as indicative of a difference
in purpose.235 If, as respondents suggest, the concept of "technical or
financial assistance" agreements is identical to that of "service contracts," the
CONCOM would not have bothered to fit the same dog with a new collar. To
uphold respondents' theory would reduce the first to a mere euphemism for
the second and render the change in phraseology meaningless.
An examination of the reason behind the change confirms that technical or
financial assistance agreements are not synonymous to service contracts.
[T]he Court in construing a Constitution should bear in mind the object
sought to be accomplished by its adoption, and the evils, if any, sought to be
prevented or remedied. A doubtful provision will be examined in light of the
history of the times, and the condition and circumstances under which the
Constitution was framed. The object is to ascertain the reason which induced
the framers of the Constitution to enact the particular provision and the
purpose sought to be accomplished thereby, in order to construe the whole
as to make the words consonant to that reason and calculated to effect that
purpose.236
As the following question of Commissioner Quesada and Commissioner
Villegas' answer shows the drafters intended to do away with service
contracts which were used to circumvent the capitalization (60%-40%)
requirement:
MS. QUESADA. The 1973 Constitution used the words "service
contracts." In this particular Section 3, is there a safeguard against
the possible control of foreign interests if the Filipinos go into
coproduction with them?
MR. VILLEGAS. Yes. In fact, the deletion of the phrase "service
contracts" was our first attempt to avoid some of the abuses in the
past regime in the use of service contracts to go around the 60-40
arrangement. The safeguard that has been introduced – and this, of
course can be refined – is found in Section 3, lines 25 to 30, where
Congress will have to concur with the President on any agreement
entered into between a foreign-owned corporation and the
government involving technical or financial assistance for large-scale
exploration, development and utilization of natural
resources.237 [Emphasis supplied.]
In a subsequent discussion, Commissioner Villegas allayed the fears
of Commissioner Quesada regarding the participation of foreign
 interests in Philippine natural resources, which was supposed to be
restricted to Filipinos.
MS. QUESADA. Another point of clarification is the phrase "and
utilization of natural resources shall be under the full control and
supervision of the State." In the 1973 Constitution, this was limited to
citizens of the Philippines; but it was removed and substituted by
"shall be under the full control and supervision of the State." Was the
concept changed so that these particular resources would be limited
to citizens of the Philippines? Or would these resources only be
under the full control and supervision of the State; meaning,
noncitizens would have access to these natural resources? Is that
the understanding?
MR. VILLEGAS. No, Mr. Vice-President, if the Commissioner reads
the next sentence, it states:
Such activities may be directly undertaken by the State, or it may enter into
co-production, joint venture, production-sharing agreements with Filipino
citizens.
So we are still limiting it only to Filipino citizens.
x x x.
MS. QUESADA. Going back to Section 3, the section suggests that:
The exploration, development, and utilization of natural resources… may be
directly undertaken by the State, or it may enter into co-production, joint
venture or production-sharing agreement with . . . corporations or
associations at least sixty per cent of whose voting stock or controlling
interest is owned by such citizens.
Lines 25 to 30, on the other hand, suggest that in the large-scale exploration,
development and utilization of natural resources, the President with the
concurrence of Congress may enter into agreements with foreign-owned
corporations even for technical or financial assistance.
I wonder if this part of Section 3 contradicts the second part. I am raising this
point for fear that foreign investors will use their enormous capital resources
to facilitate the actual exploitation or exploration, development and effective
disposition of our natural resources to the detriment of Filipino investors. I am
not saying that we should not consider borrowing money from foreign
sources. What I refer to is that foreign interest should be allowed to
participate only to the extent that they lend us money and give us technical
assistance with the appropriate government permit. In this way, we can
insure the enjoyment of our natural resources by our own people.
MR. VILLEGAS. Actually, the second provision about the President does not
permit foreign investors to participate. It is only technical or financial
assistance – they do not own anything – but on conditions that have to be
determined by law with the concurrence of Congress. So, it is very restrictive.
If the Commissioner will remember, this removes the possibility for service
contracts which we said yesterday were avenues used in the previous
regime to go around the 60-40 requirement.238 [Emphasis supplied.]
The present Chief Justice, then a member of the CONCOM, also referred to
this limitation in scope in proposing an amendment to the 60-40 requirement:
MR. DAVIDE. May I be allowed to explain the proposal?
MR. MAAMBONG. Subject to the three-minute rule, Madam
President.
MR. DAVIDE. It will not take three minutes.
The Commission had just approved the Preamble. In the Preamble we
clearly stated that the Filipino people are sovereign and that one of the
objectives for the creation or establishment of a government is to conserve
and develop the national patrimony. The implication is that the national
patrimony or our natural resources are exclusively reserved for the Filipino
people. No alien must be allowed to enjoy, exploit and develop our natural
resources. As a matter of fact, that principle proceeds from the fact that our
natural resources are gifts from God to the Filipino people and it would be a
breach of that special blessing from God if we will allow aliens to exploit our
natural resources.
I voted in favor of the Jamir proposal because it is not really exploitation that
we granted to the alien corporations but only for them to render financial or
technical assistance. It is not for them to enjoy our natural resources. Madam
President, our natural resources are depleting; our population is increasing
by leaps and bounds. Fifty years from now, if we will allow these aliens to
exploit our natural resources, there will be no more natural resources for the
next generations of Filipinos. It may last long if we will begin now. Since 1935
the aliens have been allowed to enjoy to a certain extent the exploitation of
our natural resources, and we became victims of foreign dominance and
control. The aliens are interested in coming to the Philippines because they
would like to enjoy the bounty of nature exclusively intended for Filipinos by
God.
And so I appeal to all, for the sake of the future generations, that if we have
to pray in the Preamble "to preserve and develop the national patrimony for DRAFT OF THE UP PROPOSED ARTICLE XII OF
the sovereign Filipino people and for the generations to come," we must at LAW RESOLUTION NO. THE 1987
this time decide once and for all that our natural resources must be reserved CONSTITUTION 496 OF THE CONSTITUTION
only to Filipino citizens. PROJECT CONSTITUTIONAL
COMMISSION
Thank you.239 [Emphasis supplied.]
Sec. 1. All lands of Sec. 3. All lands of Sec. 2. All lands of
The opinion of another member of the CONCOM is persuasive240 and leaves the public domain, the public domain, the public domain,
no doubt as to the intention of the framers to eliminate service contracts waters, minerals, waters, minerals, waters, minerals,
altogether. He writes: coal, petroleum and coal, petroleum and coal, petroleum, and
other mineral oils, all other mineral oils, all other mineral oils, all
Paragraph 4 of Section 2 specifies large-scale, capital-intensive, highly forces of potential forces of potential forces of potential
technological undertakings for which the President may enter into contracts energy, fisheries, energy, fisheries, energy, fisheries,
with foreign-owned corporations, and enunciates strict conditions that should flora and fauna and forests, flora and forests or timber,
govern such contracts. x x x. other natural fauna, and other wildlife, flora and
resources of the natural resources fauna, and other
This provision balances the need for foreign capital and technology with the Philippines are are owned by the natural resources
need to maintain the national sovereignty. It recognizes the fact that as long owned by the State. State. With the are owned by the
as Filipinos can formulate their own terms in their own territory, there is no With the exception of exception of State. With the
danger of relinquishing sovereignty to foreign interests. agricultural lands, all agricultural lands, all exception of
other natural other natural agricultural lands, all
resources shall not resources shall not other natural
Are service contracts allowed under the new Constitution? No. Under the
be alienated. The be alienated. The resources shall not
new Constitution, foreign investors (fully alien-owned) can NOT participate in
exploration, exploration, be alienated. The
Filipino enterprises except to provide: (1) Technical Assistance for highly
development and development, and exploration,
technical enterprises; and (2) Financial Assistance for large-scale
utilization of natural utilization of natural development, and
enterprises.
resources shall be resources shall be utilization of natural
under the full control under the full control resources shall be
The intent of this provision, as well as other provisions on foreign and supervision of and supervision of under the full control
investments, is to prevent the practice (prevalent in the Marcos government) the State. Such the State. Such and supervision of
of skirting the 60/40 equation using the cover of service activities may be activities may be the State. The State
contracts.241 [Emphasis supplied.] directly undertaken directly undertaken may directly
by the state, or it by the State, or it undertake such
Furthermore, it appears that Proposed Resolution No. 496,242 which was the may enter into co- may enter into co- activities or it may
draft Article on National Economy and Patrimony, adopted the concept of production, joint production, joint enter into co-
"agreements . . . involving either technical or financial assistance" contained venture, production venture, production- production, joint
in the "Draft of the 1986 U.P. Law Constitution Project" (U.P. Law draft) sharing agreements sharing agreements venture, or
which was taken into consideration during the deliberation of the with Filipino citizens with Filipino citizens production-sharing
CONCOM.243 The former, as well as Article XII, as adopted, employed the or corporations or or corporations or agreements with
same terminology, as the comparative table below shows: associations sixty associations at least Filipino citizens, or
per cent of whose sixty per cent of corporations or
voting stock or whose voting stock associations at least
controlling interest is or controlling interest sixty per centum of
owned by such is owned by such whose capital is
citizens for a period citizens. Such owned by such scale exploration, financial workers in rivers,
of not more than agreements shall be citizens. Such development, or assistance for large- lakes, bays, and
twenty-five years, for a period of agreements may be utilization of natural scale exploration, lagoons.
renewable for not twenty-five years, for a period not resources. development, and
more than twenty- renewable for not exceeding twenty- [Emphasis supplied.] utilization of natural The President may
five years and under more than twenty- five years, resources. enter into
such terms and five years, and under renewable for not [Emphasis supplied.] agreements with
conditions as may be such term and more than twenty- foreign-owned
provided by law. In conditions as may be five years, and under corporations
case as to water provided by law. In such terms and involving either
rights for irrigation, cases of water rights conditions as may be technical or
water supply, for irrigation, water provided by law. In financial
fisheries, or supply, fisheries or case of water rights assistance for large-
industrial uses other industrial uses other for irrigation, water scale exploration,
than the than the supply, fisheries, or development, and
development of development for industrial uses other utilization of
water power, water power, than the minerals, petroleum,
beneficial use may beneficial use may development of and other mineral
be the measure and be the measure and water power, oils according to the
limit of the grant. limit of the grant. beneficial use may general terms and
be the measure and conditions provided
The National The Congress may limit of the grant. by law, based on
Assembly may by by law allow small- real contributions to
law allow small scale scale utilization of The State shall the economic growth
utilization of natural natural resources by protect the nation's and general welfare
resources by Filipino Filipino citizens, as marine wealth in its of the country. In
citizens. well as cooperative archipelagic waters, such agreements,
fish farming in rivers, territorial sea, and the State shall
The National lakes, bays, and exclusive economic promote the
Assembly, may, by lagoons. zone, and reserve its development and
two-thirds vote of all use and enjoyment use of local scientific
its members by The President with exclusively to Filipino and technical
special law provide the concurrence of citizens. resources.
the terms and Congress, by special [Emphasis supplied.]
conditions under law, shall provide the The Congress may,
which a foreign- terms and conditions by law, allow small- The President shall
owned corporation under which a scale utilization of notify the Congress
may enter into foreign-owned natural resources by of every contract
agreements with the corporation may Filipino citizens, as entered into in
government enter into well as cooperative accordance with this
involving either agreements with the fish farming, with provision, within
technical or government priority to thirty days from its
financial involving either subsistence execution.
assistance for large- technical or fishermen and fish-
The insights of the proponents of the U.P. Law draft are, therefore, instructive
in interpreting the phrase "technical or financial assistance."
In his position paper entitled Service Contracts: Old Wine in New Bottles?,
Professor Pacifico A. Agabin, who was a member of the working group that
prepared the U.P. Law draft, criticized service contracts for they "lodge
exclusive management and control of the enterprise to the service contractor,
which is reminiscent of the old concession regime. Thus, notwithstanding the
provision of the Constitution that natural resources belong to the State, and
that these shall not be alienated, the service contract system renders
nugatory the constitutional provisions cited."244 He elaborates:
Looking at the Philippine model, we can discern the following vestiges of the
concession regime, thus:
1. Bidding of a selected area, or leasing the choice of the area to the
interested party and then negotiating the terms and conditions of the
contract; (Sec. 5, P.D. 87)
2. Management of the enterprise vested on the contractor, including
operation of the field if petroleum is discovered; (Sec. 8, P.D. 87)
3. Control of production and other matters such as expansion and
development; (Sec. 8)
4. Responsibility for downstream operations – marketing, distribution,
and processing may be with the contractor (Sec. 8);
5. Ownership of equipment, machinery, fixed assets, and other
properties remain with contractor (Sec. 12, P.D. 87);
6. Repatriation of capital and retention of profits abroad guaranteed
to the contractor (Sec. 13, P.D. 87); and
7. While title to the petroleum discovered may nominally be in the
name of the government, the contractor has almost unfettered
control over its disposition and sale, and even the domestic
requirements of the country is relegated to a pro rata basis (Sec. 8).
In short, our version of the service contract is just a rehash of the old
concession regime x x x. Some people have pulled an old rabbit out of a
magician's hat, and foisted it upon us as a new and different animal.
The service contract as we know it here is antithetical to the principle of
sovereignty over our natural resources restated in the same article of the
[1973] Constitution containing the provision for service contracts. If the
service contractor happens to be a foreign corporation, the contract would
also run counter to the constitutional provision on nationalization or
Filipinization, of the exploitation of our natural resources.245 [Emphasis
supplied. Underscoring in the original.]
Professor Merlin M. Magallona, also a member of the working group, was
harsher in his reproach of the system:
x x x the nationalistic phraseology of the 1935 [Constitution] was retained by
the [1973] Charter, but the essence of nationalism was reduced to hollow
rhetoric. The 1973 Charter still provided that the exploitation or development
of the country's natural resources be limited to Filipino citizens or
corporations owned or controlled by them. However, the martial-law
Constitution allowed them, once these resources are in their name, to enter
into service contracts with foreign investors for financial, technical,
management, or other forms of assistance. Since foreign investors have the
capital resources, the actual exploitation and development, as well as the
effective disposition, of the country's natural resources, would be under their
direction, and control, relegating the Filipino investors to the role of second-
rate partners in joint ventures.
Through the instrumentality of the service contract, the 1973 Constitution had
legitimized at the highest level of state policy that which was prohibited under
the 1973 Constitution, namely: the exploitation of the country's natural
resources by foreign nationals. The drastic impact of [this] constitutional
change becomes more pronounced when it is considered that the active
party to any service contract may be a corporation wholly owned by foreign
interests. In such a case, the citizenship requirement is completely set aside,
permitting foreign corporations to obtain actual possession, control, and
[enjoyment] of the country's natural resources.246 [Emphasis supplied.]
Accordingly, Professor Agabin recommends that:
Recognizing the service contract for what it is, we have to expunge it from
the Constitution and reaffirm ownership over our natural resources. That is
the only way we can exercise effective control over our natural resources.
This should not mean complete isolation of the country's natural resources
from foreign investment. Other contract forms which are less derogatory to
our sovereignty and control over natural resources – like technical assistance
agreements, financial assistance [agreements], co-production agreements,
joint ventures, production-sharing – could still be utilized and adopted without
violating constitutional provisions. In other words, we can adopt contract
forms which recognize and assert our sovereignty and ownership over
natural resources, and where the foreign entity is just a pure contractor
instead of the beneficial owner of our economic resources.247 [Emphasis
supplied.]
Still another member of the working group, Professor Eduardo Labitag,
proposed that:
2. Service contracts as practiced under the 1973 Constitution should be
discouraged, instead the government may be allowed, subject to
authorization by special law passed by an extraordinary majority to enter into
either technical or financial assistance. This is justified by the fact that as
presently worded in the 1973 Constitution, a service contract gives full
control over the contract area to the service contractor, for him to work,
manage and dispose of the proceeds or production. It was a subterfuge to
get around the nationality requirement of the constitution.248[Emphasis
supplied.]
In the annotations on the proposed Article on National Economy and
Patrimony, the U.P. Law draft summarized the rationale therefor, thus:
5. The last paragraph is a modification of the service contract provision found
in Section 9, Article XIV of the 1973 Constitution as amended. This 1973
provision shattered the framework of nationalism in our fundamental law (see
Magallona, "Nationalism and its Subversion in the Constitution"). Through the
service contract, the 1973 Constitution had legitimized that which was
prohibited under the 1935 constitution—the exploitation of the country's
natural resources by foreign nationals. Through the service contract, acts
prohibited by the Anti-Dummy Law were recognized as legitimate
arrangements. Service contracts lodge exclusive management and control of
the enterprise to the service contractor, not unlike the old concession regime
where the concessionaire had complete control over the country's natural
resources, having been given exclusive and plenary rights to exploit a
particular resource and, in effect, having been assured of ownership of that
resource at the point of extraction (see Agabin, "Service Contracts: Old Wine
in New Bottles"). Service contracts, hence, are antithetical to the principle of
sovereignty over our natural resources, as well as the constitutional provision
on nationalization or Filipinization of the exploitation of our natural resources.
Under the proposed provision, only technical assistance or financial
assistance agreements may be entered into, and only for large-scale
activities. These are contract forms which recognize and assert our
sovereignty and ownership over natural resources since the foreign entity is
just a pure contractor and not a beneficial owner of our economic resources.
The proposal recognizes the need for capital and technology to develop our
natural resources without sacrificing our sovereignty and control over such
resources by the safeguard of a special law which requires two-thirds vote of
all the members of the Legislature. This will ensure that such agreements will
be debated upon exhaustively and thoroughly in the National Assembly to
avert prejudice to the nation.249 [Emphasis supplied.]
The U.P. Law draft proponents viewed service contracts under the 1973
Constitution as grants of beneficial ownership of the country's natural
resources to foreign owned corporations. While, in theory, the State owns
these natural resources – and Filipino citizens, their beneficiaries – service
contracts actually vested foreigners with the right to dispose, explore for,
develop, exploit, and utilize the same. Foreigners, not Filipinos, became the
beneficiaries of Philippine natural resources. This arrangement is clearly
incompatible with the constitutional ideal of nationalization of natural
resources, with the Regalian doctrine, and on a broader perspective, with
Philippine sovereignty.
The proponents nevertheless acknowledged the need for capital and
technical know-how in the large-scale exploitation, development and
utilization of natural resources – the second paragraph of the proposed draft
itself being an admission of such scarcity. Hence, they recommended a
compromise to reconcile the nationalistic provisions dating back to the 1935
Constitution, which reserved all natural resources exclusively to Filipinos,
and the more liberal 1973 Constitution, which allowed foreigners to
participate in these resources through service contracts. Such a compromise
called for the adoption of a new system in the exploration, development, and
utilization of natural resources in the form of technical agreements or
financial agreements which, necessarily, are distinct concepts from service
contracts.
The replacement of "service contracts" with "agreements… involving either
technical or financial assistance," as well as the deletion of the phrase
"management or other forms of assistance," assumes greater significance
when note is taken that the U.P. Law draft proposed other equally crucial
changes that were obviously heeded by the CONCOM. These include the
abrogation of the concession system and the adoption of new "options" for
the State in the exploration, development, and utilization of natural
resources. The proponents deemed these changes to be more consistent
with the State's ownership of, and its "full control and supervision" (a phrase
also employed by the framers) over, such resources. The Project explained:
3. In line with the State ownership of natural resources, the State should take
a more active role in the exploration, development, and utilization of natural
resources, than the present practice of granting licenses, concessions, or
leases – hence the provision that said activities shall be under the full control
and supervision of the State. There are three major schemes by which the
State could undertake these activities: first, directly by itself; second, by
virtue of co-production, joint venture, production sharing agreements with
Filipino citizens or corporations or associations sixty per cent (60%) of the
voting stock or controlling interests of which are owned by such citizens; or
third, with a foreign-owned corporation, in cases of large-scale exploration,
development, or utilization of natural resources through agreements involving
either technical or financial assistance only. x x x.
At present, under the licensing concession or lease schemes, the
government benefits from such benefits only through fees, charges, ad
valorem taxes and income taxes of the exploiters of our natural resources.
Such benefits are very minimal compared with the enormous profits reaped
by theses licensees, grantees, concessionaires. Moreover, some of them
disregard the conservation of natural resources and do not protect the
environment from degradation. The proposed role of the State will enable it
to a greater share in the profits – it can also actively husband its natural
resources and engage in developmental programs that will be beneficial to
them.
4. Aside from the three major schemes for the exploration, development, and
utilization of our natural resources, the State may, by law, allow Filipino
citizens to explore, develop, utilize natural resources in small-scale. This is in
recognition of the plight of marginal fishermen, forest dwellers, gold panners,
and others similarly situated who exploit our natural resources for their daily
sustenance and survival.250
Professor Agabin, in particular, after taking pains to illustrate the similarities
between the two systems, concluded that the service contract regime was
but a "rehash" of the concession system. "Old wine in new bottles," as he put
it. The rejection of the service contract regime, therefore, is in consonance
with the abolition of the concession system.
In light of the deliberations of the CONCOM, the text of the Constitution, and
the adoption of other proposed changes, there is no doubt that the framers
considered and shared the intent of the U.P. Law proponents in employing
the phrase "agreements . . . involving either technical or financial assistance."
While certain commissioners may have mentioned the term "service
contracts" during the CONCOM deliberations, they may not have been
necessarily referring to the concept of service contracts under the 1973
Constitution. As noted earlier, "service contracts" is a term that assumes
different meanings to different people.251 The commissioners may have been
using the term loosely, and not in its technical and legal sense, to refer, in
general, to agreements concerning natural resources entered into by the
Government with foreign corporations. These loose statements do not
necessarily translate to the adoption of the 1973 Constitution provision
allowing service contracts.
It is true that, as shown in the earlier quoted portions of the proceedings in
CONCOM, in response to Sr. Tan's question, Commissioner Villegas
commented that, other than congressional notification, the only difference
between "future" and "past" "service contracts" is the requirement of a
general law as there were no laws previously authorizing the
same.252 However, such remark is far outweighed by his more categorical
statement in his exchange with Commissioner Quesada that the draft article
"does not permit foreign investors to participate" in the nation's natural
resources – which was exactly what service contracts did – except to provide
"technical or financial assistance."253
In the case of the other commissioners, Commissioner Nolledo himself
clarified in his work that the present charter prohibits service
contracts.254 Commissioner Gascon was not totally averse to foreign
participation, but favored stricter restrictions in the form of majority
congressional concurrence.255 On the other hand, Commissioners Garcia
and Tadeo may have veered to the extreme side of the spectrum and their
objections may be interpreted as votes against any foreign participation in
our natural resources whatsoever.
WMCP cites Opinion No. 75, s. 1987,256 and Opinion No. 175, s. 1990257 of
the Secretary of Justice, expressing the view that a financial or technical
assistance agreement "is no different in concept" from the service contract
allowed under the 1973 Constitution. This Court is not, however, bound by
this interpretation. When an administrative or executive agency renders an
opinion or issues a statement of policy, it merely interprets a pre-existing law;
and the administrative interpretation of the law is at best advisory, for it is the
courts that finally determine what the law means.258
In any case, the constitutional provision allowing the President to enter into
FTAAs with foreign-owned corporations is an exception to the rule that
participation in the nation's natural resources is reserved exclusively to
Filipinos. Accordingly, such provision must be construed strictly against their
enjoyment by non-Filipinos. As Commissioner Villegas emphasized, the
provision is "very restrictive."259 Commissioner Nolledo also remarked that
"entering into service contracts is an exception to the rule on protection of
natural resources for the interest of the nation and, therefore, being an
exception, it should be subject, whenever possible, to stringent
rules."260 Indeed, exceptions should be strictly but reasonably construed;
they extend only so far as their language fairly warrants and all doubts
should be resolved in favor of the general provision rather than the
exception.261
With the foregoing discussion in mind, this Court finds that R.A. No. 7942 is
invalid insofar as said Act authorizes service contracts. Although the statute
employs the phrase "financial and technical agreements" in accordance with
the 1987 Constitution, it actually treats these agreements as service
contracts that grant beneficial ownership to foreign contractors contrary to
the fundamental law.
Section 33, which is found under Chapter VI (Financial or Technical
Assistance Agreement) of R.A. No. 7942 states:
SEC. 33. Eligibility.—Any qualified person with technical and financial
capability to undertake large-scale exploration, development, and utilization
of mineral resources in the Philippines may enter into a financial or technical
assistance agreement directly with the Government through the Department.
[Emphasis supplied.]
"Exploration," as defined by R.A. No. 7942,
means the searching or prospecting for mineral resources by geological,
geochemical or geophysical surveys, remote sensing, test pitting, trending,
drilling, shaft sinking, tunneling or any other means for the purpose of
determining the existence, extent, quantity and quality thereof and the
feasibility of mining them for profit.262
A legally organized foreign-owned corporation may be granted an exploration
permit,263 which vests it with the right to conduct exploration for all minerals in
specified areas,264 i.e., to enter, occupy and explore the same.265Eventually,
the foreign-owned corporation, as such permittee, may apply for a financial
and technical assistance agreement.266
"Development" is the work undertaken to explore and prepare an ore body or
a mineral deposit for mining, including the construction of necessary
infrastructure and related facilities.267
"Utilization" "means the extraction or disposition of minerals."268 A stipulation
that the proponent shall dispose of the minerals and byproducts produced at
the highest price and more advantageous terms and conditions as provided
for under the implementing rules and regulations is required to be
incorporated in every FTAA.269
A foreign-owned/-controlled corporation may likewise be granted a mineral
processing permit.270 "Mineral processing" is the milling, beneficiation or
upgrading of ores or minerals and rocks or by similar means to convert the
same into marketable products.271
An FTAA contractor makes a warranty that the mining operations shall be
conducted in accordance with the provisions of R.A. No. 7942 and its
implementing rules272 and for work programs and minimum expenditures and
commitments.273 And it obliges itself to furnish the Government records of
geologic, accounting, and other relevant data for its mining operation. 274
"Mining operation," as the law defines it, means mining activities involving
exploration, feasibility, development, utilization, and processing.275
The underlying assumption in all these provisions is that the foreign
contractor manages the mineral resources, just like the foreign contractor in
a service contract.
Furthermore, Chapter XII of the Act grants foreign contractors in FTAAs the
same auxiliary mining rights that it grants contractors in mineral agreements
(MPSA, CA and JV).276 Parenthetically, Sections 72 to 75 use the term
"contractor," without distinguishing between FTAA and mineral agreement
contractors. And so does "holders of mining rights" in Section 76. A foreign
contractor may even convert its FTAA into a mineral agreement if the
economic viability of the contract area is found to be inadequate to justify
large-scale mining operations,277 provided that it reduces its equity in the
corporation, partnership, association or cooperative to forty percent (40%). 278
Finally, under the Act, an FTAA contractor warrants that it "has or has access
to all the financing, managerial, and technical expertise. . . ."279 This suggests
that an FTAA contractor is bound to provide some management assistance –
a form of assistance that has been eliminated and, therefore, proscribed by
the present Charter.
By allowing foreign contractors to manage or operate all the aspects of the
mining operation, the above-cited provisions of R.A. No. 7942 have in effect
conveyed beneficial ownership over the nation's mineral resources to these
contractors, leaving the State with nothing but bare title thereto.
Moreover, the same provisions, whether by design or inadvertence, permit a
circumvention of the constitutionally ordained 60%-40% capitalization
requirement for corporations or associations engaged in the exploitation,
development and utilization of Philippine natural resources.
In sum, the Court finds the following provisions of R.A. No. 7942 to be
violative of Section 2, Article XII of the Constitution:
(1) The proviso in Section 3 (aq), which defines "qualified person," to
wit:
 Provided, That a legally organized foreign-owned corporation shall
be deemed a qualified person for purposes of granting an exploration
permit, financial or technical assistance agreement or mineral
processing permit.
(2) Section 23,280 which specifies the rights and obligations of an
exploration permittee, insofar as said section applies to a financial or
technical assistance agreement,
(3) Section 33, which prescribes the eligibility of a contractor in a
financial or technical assistance agreement;
(4) Section 35,281 which enumerates the terms and conditions for
every financial or technical assistance agreement;
(5) Section 39,282 which allows the contractor in a financial and
technical assistance agreement to convert the same into a mineral
production-sharing agreement;
(6) Section 56,283
which authorizes the issuance of a mineral
processing permit to a contractor in a financial and technical
assistance agreement;
The following provisions of the same Act are likewise void as they are
dependent on the foregoing provisions and cannot stand on their own:
(1) Section 3 (g),284which defines the term "contractor," insofar as it
applies to a financial or technical assistance agreement.
Section 34,285 which prescribes the maximum contract area in a
financial or technical assistance agreements;
Section 36,286 which allows negotiations for financial or technical
assistance agreements;
Section 37,287 which prescribes the procedure for filing and
evaluation of financial or technical assistance agreement proposals;
Section 38,288 which limits the term of financial or technical
assistance agreements;
Section 40,289 which allows the assignment or transfer of financial or
technical assistance agreements;
Section 41,290 which allows the withdrawal of the contractor in an
FTAA;
The second and third paragraphs of Section 81,291 which provide for
the Government's share in a financial and technical assistance
agreement; and
Section 90,292 which provides for incentives to contractors in FTAAs
insofar as it applies to said contractors;
When the parts of the statute are so mutually dependent and connected as
conditions, considerations, inducements, or compensations for each other,
as to warrant a belief that the legislature intended them as a whole, and that
if all could not be carried into effect, the legislature would not pass the
residue independently, then, if some parts are unconstitutional, all the
provisions which are thus dependent, conditional, or connected, must fall
with them.293
There can be little doubt that the WMCP FTAA itself is a service contract.
Section 1.3 of the WMCP FTAA grants WMCP "the exclusive right to explore,
exploit, utilise[,] process and dispose of all Minerals products and by-
products thereof that may be produced from the Contract Area."294 The FTAA
also imbues WMCP with the following rights:
(b) to extract and carry away any Mineral samples from the Contract
area for the purpose of conducting tests and studies in respect
thereof;
(c) to determine the mining and treatment processes to be utilised
during the Development/Operating Period and the project facilities to
be constructed during the Development and Construction Period;
(d) have the right of possession of the Contract Area, with full right of
ingress and egress and the right to occupy the same, subject to the
provisions of Presidential Decree No. 512 (if applicable) and not be
prevented from entry into private ands by surface owners and/or
occupants thereof when prospecting, exploring and exploiting for
minerals therein;
xxx
 (f) to construct roadways, mining, drainage, power generation and
transmission facilities and all other types of works on the Contract
Area;
(g) to erect, install or place any type of improvements, supplies,
machinery and other equipment relating to the Mining Operations
and to use, sell or otherwise dispose of, modify, remove or diminish
any and all parts thereof;
(h) enjoy, subject to pertinent laws, rules and regulations and the
rights of third Parties, easement rights and the use of timber, sand,
clay, stone, water and other natural resources in the Contract Area
without cost for the purposes of the Mining Operations;
xxx
(i) have the right to mortgage, charge or encumber all or part of its
interest and obligations under this Agreement, the plant, equipment
and infrastructure and the Minerals produced from the Mining
Operations;
x x x. 295
All materials, equipment, plant and other installations erected or placed on
the Contract Area remain the property of WMCP, which has the right to deal
with and remove such items within twelve months from the termination of the
FTAA.296
Pursuant to Section 1.2 of the FTAA, WMCP shall provide "[all] financing,
technology, management and personnel necessary for the Mining
Operations." The mining company binds itself to "perform all Mining
Operations . . . providing all necessary services, technology and financing in
connection therewith,"297 and to "furnish all materials, labour, equipment and
other installations that may be required for carrying on all Mining
Operations."298> WMCP may make expansions, improvements and
replacements of the mining facilities and may add such new facilities as it
considers necessary for the mining operations.299
These contractual stipulations, taken together, grant WMCP beneficial
ownership over natural resources that properly belong to the State and are
intended for the benefit of its citizens. These stipulations are abhorrent to the
1987 Constitution. They are precisely the vices that the fundamental law
seeks to avoid, the evils that it aims to suppress. Consequently, the contract
from which they spring must be struck down.
In arguing against the annulment of the FTAA, WMCP invokes the
Agreement on the Promotion and Protection of Investments between the
Philippine and Australian Governments, which was signed in Manila on
January 25, 1995 and which entered into force on December 8, 1995.
x x x. Article 2 (1) of said treaty states that it applies to investments whenever
made and thus the fact that [WMCP's] FTAA was entered into prior to the
entry into force of the treaty does not preclude the Philippine Government
from protecting [WMCP's] investment in [that] FTAA. Likewise, Article 3 (1) of
the treaty provides that "Each Party shall encourage and promote
investments in its area by investors of the other Party and shall [admit] such
investments in accordance with its Constitution, Laws, regulations and
investment policies" and in Article 3 (2), it states that "Each Party shall
ensure that investments are accorded fair and equitable treatment." The
latter stipulation indicates that it was intended to impose an obligation upon a
Party to afford fair and equitable treatment to the investments of the other
Party and that a failure to provide such treatment by or under the laws of the
Party may constitute a breach of the treaty. Simply stated, the Philippines
could not, under said treaty, rely upon the inadequacies of its own laws to
deprive an Australian investor (like [WMCP]) of fair and equitable treatment
by invalidating [WMCP's] FTAA without likewise nullifying the service
contracts entered into before the enactment of RA 7942 such as those
mentioned in PD 87 or EO 279.
This becomes more significant in the light of the fact that [WMCP's] FTAA
was executed not by a mere Filipino citizen, but by the Philippine
Government itself, through its President no less, which, in entering into said
treaty is assumed to be aware of the existing Philippine laws on service
contracts over the exploration, development and utilization of natural
resources. The execution of the FTAA by the Philippine Government assures
the Australian Government that the FTAA is in accordance with existing
Philippine laws.300 [Emphasis and italics by private respondents.]
The invalidation of the subject FTAA, it is argued, would constitute a breach
of said treaty which, in turn, would amount to a violation of Section 3, Article
II of the Constitution adopting the generally accepted principles of
international law as part of the law of the land. One of these generally
accepted principles is pacta sunt servanda, which requires the performance
in good faith of treaty obligations.
Even assuming arguendo that WMCP is correct in its interpretation of the
treaty and its assertion that "the Philippines could not . . . deprive an
Australian investor (like [WMCP]) of fair and equitable treatment by
invalidating [WMCP's] FTAA without likewise nullifying the service contracts
entered into before the enactment of RA 7942 . . .," the annulment of the
FTAA would not constitute a breach of the treaty invoked. For this decision
herein invalidating the subject FTAA forms part of the legal system of the (b) Section 23,
Philippines.301 The equal protection clause302 guarantees that such decision
shall apply to all contracts belonging to the same class, hence, upholding (c) Section 33 to 41,
rather than violating, the "fair and equitable treatment" stipulation in said
treaty.
(d) Section 56,

One other matter requires clarification. Petitioners contend that, consistent (e) The second and third paragraphs of Section 81, and
with the provisions of Section 2, Article XII of the Constitution, the President
may enter into agreements involving "either technical or financial assistance"
only. The agreement in question, however, is a technical and financial (f) Section 90.
assistance agreement.
(2) All provisions of Department of Environment and Natural
Petitioners' contention does not lie. To adhere to the literal language of the Resources Administrative Order 96-40, s. 1996 which are not in
Constitution would lead to absurd consequences.303 As WMCP correctly put conformity with this Decision, and
it:
(3) The Financial and Technical Assistance Agreement between the
x x x such a theory of petitioners would compel the government (through the Government of the Republic of the Philippines and WMC Philippines,
President) to enter into contract with two (2) foreign-owned corporations, one Inc.
for financial assistance agreement and with the other, for technical
assistance over one and the same mining area or land; or to execute two (2) SO ORDERED.
contracts with only one foreign-owned corporation which has the capability to
provide both financial and technical assistance, one for financial assistance Davide, Jr., C.J., Puno, Quisumbing, Carpio, Corona, Callejo, Sr., and Tinga.
and another for technical assistance, over the same mining area. Such an JJ., concur.
absurd result is definitely not sanctioned under the canons of constitutional Vitug, J., see Separate Opinion.
construction.304 [Underscoring in the original.] Panganiban, J., see Separate Opinion.
Ynares-Santiago, Sandoval-Gutierrez and Austria-Martinez, JJ., joins J.,
Surely, the framers of the 1987 Charter did not contemplate such an absurd Panganiban's separate opinion.
result from their use of "either/or." A constitution is not to be interpreted as Azcuna, no part, one of the parties was a client.
demanding the impossible or the impracticable; and unreasonable or absurd
consequences, if possible, should be avoided.305 Courts are not to give
words a meaning that would lead to absurd or unreasonable consequences
and a literal interpretation is to be rejected if it would be unjust or lead to Republic of the Philippines
absurd results.306 That is a strong argument against its SUPREME COURT
adoption.307 Accordingly, petitioners' interpretation must be rejected. Manila

The foregoing discussion has rendered unnecessary the resolution of the EN BANC
other issues raised by the petition.

WHEREFORE, the petition is GRANTED. The Court hereby declares

unconstitutional and void:
G.R. No. 104037 May 29, 1992
(1) The following provisions of Republic Act No. 7942:
REYNALDO V. UMALI, petitioner,
vs.
(a) The proviso in Section 3 (aq),
HON. JESUS P. ESTANISLAO, Secretary of Finance, and HON. JOSE U.
ONG, Commissioner of Internal Revenue, respondents.
G.R. No. 104069 May 29, 1992
RENE B. GOROSPE, LEIGHTON R. SIAZON, MANUEL M. SUNGA, PAUL
D. UNGOS, BIENVENIDO T. JAMORALIN, JR., JOSE D. FLORES, JR.,
EVELYN G. VILLEGAS, DOMINGO T. LIGOT, HENRY E. LARON,
PASTOR M. DALMACION, JR., and, JULIUS NORMAN C.
CERRADA, petitioners,
vs
COMMISSIONER OF INTERNAL REVENUE, respondent.
Rene B. Gorospe, Leighton R. Siazon, Manuel M. Sunga, Bienvinido T.
Jamoralin, Jr and Paul D. Ungos for petitioners.
PADILLA, J.:
These consolidated cases are petitions for mandamus and prohibition,
premised upon the following undisputed facts:
Congress enacted Rep. Act 7167, entitled "AN ACT ADJUSTING THE
BASIC PERSONAL AND ADDITIONAL EXEMPTIONS ALLOWABLE TO
INDIVIDUALS FOR INCOME TAX PURPOSES TO THE POVERTY
THRESHOLD LEVEL, AMENDING FOR THE PURPOSE SECTION 29,
PARAGRAPH (L), ITEMS (1) AND (2) (A) OF THE NATIONAL INTERNAL
REVENUE CODE, AS AMENDED, AND FOR OTHER PURPOSES." It
provides as follows:
Sec. (1). The first paragraph of item (1), paragraph (1) of
Section 29 of the National Internal Revenue Code, as
amended, is hereby further amended to read as follows:
(1) Personal Exemptions allowable to individuals –– (1)
Basic personal exemption as follows:
For single individual or married individual
judicially decreed as legally separated with
no qualified dependents P9,000
For head of a family P12,000
For married individual P18,000
Provided, That husband and wife electing to compute their
income tax separately shall be entitled to a personal
exemption of P9,000 each.
Sec. 2. The first paragraph of item (2) (A), paragraph (1) of
Section 29 of the same Code, as amended, is hereby further
amended to read as follows:
(2) Additional exemption.
(a) Taxpayers with dependents. –– A married individual or a
head of family shall be allowed an additional exemption of
Five Thousand Pesos (P5,000) for each
dependent: Provided, That the total number of dependents
for which additional exemptions may be claimed shall not
exceed four dependents: Provided, further, That an
additional exemption of One Thousand Pesos (1,000) shall
be allowed for each child who otherwise qualified as
dependent prior to January 1, 1980: Provided, finally, That
the additional exemption for dependents shall be claimed by
only one of the spouses in case of married individuals
electing to compute their income tax liabilities separately.
Sec. 3. This act shall take effect upon its approval.
Approved. 1
The said act was signed and approved by the President on 19 December
1991 and published on 14 January 1992 in "Malaya" a newspaper of general
circulation.
On 26 December 1991, respondents promulgated Revenue Regulations No.
1-92, the pertinent portions of which read as follows:
Sec. 1. SCOPE –– Pursuant to Sections 245 and 72 of the
National Internal Revenue Code in relation to Republic Act
No. 7167, these Regulations are hereby promulgated
prescribing the collection at source of income tax on
compensation income paid on or after January 1, 1992 under
the Revised Withholding Tax Tables (ANNEX "A") which
 take into account the increase of personal and additional
exemptions.
xxx xxx xxx
Sec. 3. Section 8 of Revenue Regulations No. 6-82 is
amended by Revenue Regulations No. 1-86 is hereby further
amended to read as follows:
Section 8. –– Right to claim the following
exemptions. . . .
Each employee shall be allowed to claim the
following amount of exemption with respect
to compensation paid on or after January 1,
1992.
xxx xxx xxx
Sec. 5. EFFECTIVITY. –– These regulations shall take effect
on compensation income from January 1, 1992.
On 27 February 1992, the petitioner in G.R. No. 104037, a taxpayer and a
resident of Gitnang Bayan Bongabong, Oriental Mindoro, filed a petition
for mandamus for himself and in behalf all individual Filipino taxpayers, to
COMPEL the respondents to implement Rep. Act 7167 with respect to
taxable income of individual taxpayers earned or received on or after 1
January 1991 or as of taxable year ending 31 December 1991.
On 28 February 1992, the petitioners in G.R. No. 104069 likewise filed a
petition for mandamus and prohibition on their behalf as well as for those
other individual taxpayers who might be similarly situated, to compel the
Commissioner of Internal Revenue to implement the mandate of Rep. Act
7167 adjusting the personal and additional exemptions allowable to
individuals for income tax purposes in regard to income earned or received in
1991, and to enjoin the respondents from implementing Revenue
Regulations No. 1-92.
In the Court's resolution of 10 March 1992, these two (2) cases were
consolidated. Respondents were required to comment on the petitions, which
they did within the prescribed period.
The principal issues to be resolved in these cases are: (1) whether or not
Rep. Act 7167 took effect upon its approval by the President on 19
December 1991, or on 30 January 1992, i.e., after fifteen (15) days following
its publication on 14 January 1992 in the "Malaya" a newspaper of general
circulation; and (2) assuming that Rep. Act 7167 took effect on 30 January
1992, whether or not the said law nonetheless covers or applies to
compensation income earned or received during calendar year 1991.
In resolving the first issue, it will be recalled that the Court in its resolution
in Caltex (Phils.), Inc. vs. The Commissioner of Internal Revenue, G.R. No.
97282, 26 June 1991 –– which is on all fours with this case as to the first
issue –– held:
The central issue presented in the instant petition is the
effectivity of R.A. 6965 entitled "An Act Revising The Form of
Taxation on Petroleum Products from Ad Valorem to
Specific, Amending For the Purpose Section 145 of the
National Internal Revenue Code, As amended by Republic
Act Numbered Sixty Seven Hundred Sixty Seven."
Sec. 3 of R.A. 6965 contains the effectivity clause which
provides. "This Act shall take effect upon its approval"
R.A. 6965 was approved on September 19, 1990. It was
published in the Philippine Journal, a newspaper of general
circulation in the Philippines, on September 20, 1990.
Pursuant to the Act, an implementing regulation was issued
by the Commissioner of Internal Revenue, Revenue
Memorandum Circular 85-90, stating that R.A. 6965 took
effect on October 5, 1990. Petitioner took exception thereof
and argued that the law took effect on September 20, 1990
instead.
Pertinent is Article 2 of the Civil Code (as amended by
Executive Order No. 200) which provides:
Art. 2. Laws shall take effect after fifteen
days following the completion of their
publication either in the official Gazette or in
a newspaper of general circulation in the
Philippines, unless it is otherwise provided. .
..
In the case of Tanada vs. Tuvera (L-63915, December 29,
1986, 146 SCRA 446, 452) we construed Article 2 of the
Civil Code and laid down the rule:
 . . .: the) clause "unless it is otherwise
provided" refers to the date of effectivity and
not to the requirement of publication itself,
which cannot in any event be omitted. This
clause does not mean that the legislator
may make the law effective immediately
upon approval, or on any other date without
its previous publication.
Publication is indispensable in every case,
but the legislature may in its discretion
provide that the usual fifteen-day period
shall be shortened or extended. . . .
Inasmuch as R.A. 6965 has no specific date for its effectivity
and neither can it become effective upon its approval
notwithstanding its express statement, following Article 2 of
the Civil Code and the doctrine enunciated in Tanada, supra,
R.A. 6965 took effect fifteen days after September 20, 1990,
or specifically, on October 5, 1990.
Accordingly, the Court rules that Rep. Act 7167 took effect on 30 January
1992, which is after fifteen (15) days following its publication on 14 January
1992 in the "Malaya."
Coming now to the second issue, the Court is of the considered view that
Rep. Act 7167 should cover or extend to compensation income earned or
received during calendar year 1991.
Sec. 29, par. (L), Item No. 4 of the National Internal Revenue Code, as
amended, provides:
Upon the recommendation of the Secretary of Finance, the
President shall automatically adjust not more often than once
every three years, the personal and additional exemptions
taking into account, among others, the movement in
consumer price indices, levels of minimum wages, and bare
subsistence levels.
As the personal and additional exemptions of individual taxpayers were last
adjusted in 1986, the President, upon the recommendation of the Secretary
of Finance, could have adjusted the personal and additional exemptions in
1989 by increasing the same even without any legislation providing for such
adjustment. But the President did not.
However, House Bill 28970, which was subsequently enacted by Congress
as Rep. Act 7167, was introduced in the House of Representatives in
1989 although its passage was delayed and it did not become effective law
until 30 January 1992. A perusal, however, of the sponsorship remarks of
Congressman Hernando B. Perez, Chairman of the House Committee on
Ways and Means, on House Bill 28970, provides an indication of the intent of
Congress in enacting Rep. Act 7167. The pertinent legislative journal
contains the following:
At the outset, Mr. Perez explained that the Bill Provides for
increased personal additional exemptions to individuals in
view of the higher standard of living.
The Bill, he stated, limits the amount of income of individuals
subject to income tax to enable them to spend for basic
necessities and have more disposable income.
xxx xxx xxx
Mr. Perez added that inflation has raised the basic
necessities and that it had been three years since the last
exemption adjustment in 1986.
xxx xxx xxx
Subsequently, Mr. Perez stressed the necessity of passing
the measure to mitigate the effects of the current inflation
and of the implementation of the salary standardization law.
Stating that it is imperative for the government to take
measures to ease the burden of the individual income tax
filers, Mr. Perez then cited specific examples of how the
measure can help assuage the burden to the taxpayers.
He then reiterated that the increase in the prices of
commodities has eroded the purchasing power of the peso
despite the recent salary increases and emphasized that the
Bill will serve to compensate the adverse effects of inflation
on the taxpayers. . . . (Journal of the House of
Representatives, May 23, 1990, pp. 32-33).
It will also be observed that Rep. Act 7167 speaks of the adjustments that it
provides for, as adjustments "to the poverty threshold level." Certainly, "the
poverty threshold level" is the poverty threshold level at the time Rep. Act
7167 was enacted by Congress, not poverty threshold levels in futuro, at
which time there may be need of further adjustments in personal exemptions.
Moreover, the Court can not lose sight of the fact that these personal and
additional exemptions are fixed amounts to which an individual taxpayer is
entitled, as a means to cushion the devastating effects of high prices and a
depreciated purchasing power of the currency. In the end, it is the lower-
income and the middle-income groups of taxpayers (not the high-income
taxpayers) who stand to benefit most from the increase of personal and
additional exemptions provided for by Rep. Act 7167. To that extent, the act
is a social legislation intended to alleviate in part the present economic plight
of the lower income taxpayers. It is intended to remedy the inadequacy of the
heretofore existing personal and additional exemptions for individual
taxpayers.
And then, Rep. Act 7167 says that the increased personal exemptions that it
provides for shall be available thenceforth, that is, after Rep. Act 7167 shall
have become effective. In other words, these exemptions are available upon
the filing of personal income tax returns which is, under the National Internal
Revenue Code, done not later than the 15th day of April after the end of a
calendar year. Thus, under Rep. Act 7167, which became effective, as
aforestated, on 30 January 1992, the increased exemptions are literally
available on or before 15 April 1992(though not before 30 January 1992). But
these increased exemptions can be available on 15 April 1992 only in
respect of compensation income earned or received during the calendar year
1991.
application of Rep. Act 7167. But the law-making authority has spoken and
the Court can not refuse to apply the law-maker's words. Whether or not the
government can afford the drop in tax revenues resulting from such
increased exemptions was for Congress (not this Court) to decide.
WHEREFORE, Sections 1, 3 and 5 of Revenue Regulations No. 1-92 which
provide that the regulations shall take effect on compensation income earned
or received from 1 January 1992 are hereby SET ASIDE. They should take
effect on compensation income earned or received from 1 January 1991.
Since this decision is promulgated after 15 April 1992, the individual
taxpayers entitled to the increased exemptions on compensation income
earned during calendar year 1991 who may have filed their income tax
returns on or before 15 April 1992 (later extended to 24 April 1992) without
the benefit of such increased exemptions, are entitled to the corresponding
tax refunds and/or credits, and respondents are ordered to effect such
refunds and/or credits. No costs.
SO ORDERED.
Narvasa, C.J., Gutierrez, Jr., Feliciano, Bidin, Griño-Aquino, Medialdea,
Regalado, Davide, Jr., Romero, Nocon and Bellosillo, JJ., concur.

The personal exemptions as increased by Rep. Act 7167 cannot be regarded

as available in respect of compensation income received during
the 1990 calendar year; the tax due in respect of said income had already Republic of the Philippines
accrued, and been presumably paid, by 15 April 1991 and by 15 July 1991, SUPREME COURT
at which time Rep. Act 7167 had not been enacted. To make Rep. Act 7167 Manila
refer back to income received during 1990 would require language explicitly
retroactive in purport and effect, language that would have to authorize the FIRST DIVISION
payment of refunds of taxes paid on 15 April 1991 and 15 July 1991: such
language is simply not found in Rep. Act 7167.

The personal exemptions as increased by Rep. Act 7167 cannot be regarded G.R. No. 115068 November 28, 1996
as available only in respect of compensation income received during 1992,
as the implementing Revenue Regulations No. 1-92 purport to provide.
FORTUNE MOTORS (PHILS.) INC. petitioner,
Revenue Regulations No. 1-92 would in effect postpone the availability of the
vs.
increased exemptions to 1 January-15 April 1993, and thus literally defer the
METROPOLITAN BANK AND TRUST COMPANY, and THE COURT OF
effectivity of Rep. Act 7167 to 1 January 1993. Thus, the implementing
APPEALS, respondents.
regulations collide frontally with Section 3 of Rep. Act 7167 which states that
the statute "shall take effect upon its approval." The objective of the
Secretary of Finance and the Commissioner of Internal Revenue in
postponing through Revenue Regulations No. 1-92 the legal effectivity of
Rep. Act 7167 is, of course, entirely understandable –– to defer to 1993 the HERMOSISIMA, JR., J.:
reduction of governmental tax revenues which irresistibly follows from the
Before us is a petition for review of the decision of the Court of
Appeals in CA — G.R CV No. 38340 entitled "Fortune Motors (Phils.)
Inc., v. Metropolitan Bank and Trust Company et al.1 The appellate
court's decision reversed the decision in Civil Case No. 89-5637 of
Branch 150 of the Regional Trial Court of Makati City.
It appears that Fortune Motors (Phils.) Inc. obtained the following
loans from the Metropolitan Bank and Trust Company: (1) P20
Million, on March 31, 1982; (2) P8 Million, on April 30, 1983; (3)
P2,500,000.00, on June 8, 1983 and; (4) P3 Million, on August 16,
1983.
On January 6, 1984, respondent bank consolidated the loans of P8
Million and P3 Million into one promissory note, which amounted to
P12,650,000.00. This included the interest that had accrued thereon
in the amount of P1,650,000.00.
To secure the obligation in the total amount of P34,150,000.00,
petitioner mortgaged certain real estate in favor of respondent bank.
Due to financial constraints, petitioner failed to pay the loan upon
maturity. Consequently on May 25, 1984, respondent bank initiated
extrajudicial foreclosure proceedings and in effect, foreclosed the
real estate mortgage.
The extrajudicial foreclosure was actually conducted by Senior
Deputy Sheriff Pablo Y. Sy who had sent copies of the Notice of
Extrajudicial Sale to the opposing parties by registered mail. In
accordance with law, he posted copies of the Notice of Sheriff's Sale
at three conspicuous public places in Makati — the office of the
Sheriff, the Assessor's Office and the Register of Deeds in Makati.
He thereafter executed the Certificates of Posting on May 20, 1984.
The said notice was in fact published on June 2, 9 and 16, 1984 in
three issues of "The New Record." An affidavit of publication, dated
June 19, 1984,2 was executed by Teddy F. Borres, publisher of the
said newspaper.
Subsequently, the mortgaged property was sold at public auction for
P47,899,264.91 to the mortgagee bank, the highest bidder.
Petitioner failed to redeem the mortgaged property within the one-
year redemption period and so, the titles thereto were consolidated in
the name of respondent bank by which token the latter was entitled
to the possession of the property mortgaged and, in fact possessed
the same.
Petitioner then filed a complaint for the annulment of the extrajudicial
foreclosure, which covered TCT Nos. 461087, 432685, 457590,
432684, S-54185, S-54186, S-54187, and S-54188.
On December 27, 1991, the trial court rendered judgment annulling
the extrajudicial foreclosure of the mortgage.
On May 14, 1992, an appeal was interposed by the respondent to
the Court of Appeals. Acting thereon, the Court of Appeals reversed
the decision rendered by the lower court. Subsequently, the Motion
for Reconsideration filed by petitioner was denied on April 26, 1994.
Aggrieved by the decision rendered by the Court of Appeals,
petitioner appealed before this Court. On May 30, 1994, however, we
issued a Resolution denying said petition. Hence, this motion for
reconsideration.
Petitioner raises the following issues before us, to wit:
I
THAT THE COURT OF APPEALS ERRED IN DECLARING
THAT THE PUBLICATION OF THE NOTICE OF
EXTRAJUDICIAL FORECLOSURE WAS VALID.3
II
THAT THE RESPONDENT COURT OF APPEALS ERRED
IN DECLARING THAT THE NOTICES OF EXTRAJUDICIAL
FORECLOSURE, AND SALE WERE DULY RECEIVED BY
THE PETITIONER.4
III
THAT THE COURT OF APPEALS ERRED IN FAILING TO
ADJUDGE THE IRREGULARITIES IN THE BIDDING,
POSTING, PUBLICATION, AND THE SALE OF FORTUNE
BUILDING.5
IV
THAT THE RESPONDENT COURT OF APPEALS ERRED
IN RENDERING A JUDGMENT BASED ON
PRESUMPTION.6
Petitioner contends that the newspaper "Daily Record" 7 where the
notice of extrajudicial foreclosure was published does not qualify as a
newspaper of general circulation.
It further contends that the population that can be reached by the
"Daily Record" is only .004% as its circulation in Makati in 1984, was
1000 to 1500 per week. Hence, it concludes that only 1648 out of a
population of 412,069 were probable readers of the "Daily Record,"
and that this is not the standard contemplated by law when it refers
to a newspaper of general circulation.
In the case of Bonnevie v. Court of Appeals,8 we had already made a
ruling on this point:
The argument that the publication of the notice in the "Luzon
Weekly Courier" was not in accordance with law as said
newspaper is not of general circulation must likewise be
disregarded. The affidavit of publication, executed by the
publisher, business/advertising manager of the Luzon
Weekly Courier, states that it is "a newspaper of general
circulation in . . . Rizal; and that the Notice of Sheriffs sale
was published in said paper on June 30, July 7 and July 14,
1968." This constitutes prima facie evidence of compliance
with the requisite publication. (Sadang v. GSIS, 18 SCRA
491).
To be a newspaper of general circulation, it is enough that "it
is published for the dissemination of local news and general
information; that it has a bona fide subscription list of paying
subscribers; that it is published at regular intervals." (Basa v.
Mercado, 61 Phil. 632). The newspaper need not have the
largest circulation so long as it is of general circulation.
(Banta v. Pacheco, 74 Phil. 67).
In the case at bench, there was sufficient compliance with the
requirements of the law regarding publication of the notice in a
newspaper of general circulation. This is evidenced by the affidavit of
publication executed by the New Record's publisher, Teddy F.
Borres, which stated that it is a newspaper edited in Manila and
Quezon City and of general circulation in the cities of Manila, Quezon
City et. al., and in the Provinces of Rizal . . . , published every
Saturday by the Daily Record, Inc. This was affirmed by Pedro
Deyto, who was the executive editor of the said newspaper and who
was a witness for petitioner. Deyto testified: a) that the New Record
contains news; b) that it has subscribers from Metro Manila and from
all over the Philippines; c) that it is published once a week or four
times a month; and d) that he had been connected with the said
paper since 1958, an indication that the said newspaper had been in
existence even before that year.9
Another contention posited by petitioner is that the New Record is
published and edited in Quezon City and not in Makati where the
foreclosed property is situated, and that, when New Record's
publisher enumerated the places where said newspaper is being
circulated, Makati was not mentioned.
This contention of petitioner is untenable. In 1984, when the
publisher's affidavit relied upon by petitioner was executed, Makati,
Mandaluyong, San Juan, Parañaque et. al., were still part of the
province of Rizal. Apparently, this is the reason why in the New
Record's affidavit of publication executed by its publisher, the
enumeration of the places where it was being circulated, only the
cities of Manila, Quezon, Caloocan, Pasay, Tagaytay et. al., were
named. Furthermore, as aptly ratiocinated by the Court of Appeals:
The application given by the trial court to the provisions of
P.D. No. 1079 is, to our mind, too narrow and restricted and
could not have been the intention of the said law. Were the
interpretation of the trial court (sic) to be followed, even the
leading dailies in the country like the "Manila Bulletin," the
"Philippine Daily Inquirer," or "The Philippine Star" which all
enjoy a wide circulation throughout the country, cannot
publish legal notices that would be honored outside the place
of their publication. But this is not the interpretation given by
the courts. For what is important is that a paper should be in
general circulation in the place where the properties to be
foreclosed are located in order that publication may serve
the purpose for which it was intended.10
Petitioner also claims that the New Record is not a daily newspaper
because it is published only once a week.
A perusal of Presidential Decree (P.D.) No. 1079 and Act 3135
shows that the said laws do not require that the newspaper which
publishes judicial notices should be a daily newspaper. Under P.D.
1079, for a newspaper to qualify, it is enough that it be a "newspaper
or periodical which is authorized by law to publish and which is
regularly published for at least one (1) year before the date of
publication" which requirement was satisfied by New Record. Nor is
there a requirement, as stated in the said law, that the newspaper
should have the largest circulation in the place of publication.
Petitioner claims that, when its representative went to a newspaper
stand to look for a copy of the new Record, he could not find any.
This allegation can not be made a basis to conclude that the
newspaper "New Record" is not of general circulation. By its own
admission, petitioner's representative was looking for a newspaper
named "Daily Record." Naturally, he could not find a newspaper by
that name as the newspaper's name is "New Record" and not "Daily
Record." Although it is the Daily Record Inc. which publishes the
New Record, it does not mean that the name of the newspaper is
Daily Record.
Petitioner contends that, since it was the Executive Judge who
caused the publication of the notice of the sale and not the Sheriff,
the extrajudicial foreclosure of the mortgage should be deemed
annulled.
Petitioner's contention in this regard is bereft of merit, because Sec.
2 of P.D. No. 1079 clearly provides that:
The executive judge of the court of first instance shall
designate a regular working day and a definite time each
week during which the said judicial notices or advertisements
shall be distributed personally by him 11 for publication to
qualified newspapers or periodicals . . . , which distribution
shall be done by raffle.
The said provision of the law is clear as to who should personally
distribute the judicial notices or advertisements to qualified
newspapers for publication. There was substantial compliance with
the requirements when it was the Executive Judge of the Regional
Trial Court of Makati who caused the publication of the said notice by
the newspaper selected by means of raffle.
With regard to the second assigned error wherein petitioner claims
that it did not personally receive the notices of extrajudicial
foreclosure and sale supposedly sent to it by Metrobank, we find the
same unmeritorious.
Settled is the rule that personal notice to the mortgagor in
extrajudicial foreclosure proceedings is not necessary. Section 3 of
Act No. 3135 governing extrajudicial foreclosure of real estate
mortgages, as amended by Act No. 4118, requires only the posting
of the notice of sale in three public places and the publication of that
notice in a newspaper of general circulation. It is pristine clear from
the above provision that the lack of personal notice to the mortgagor,
herein petitioner, is not a ground to set aside the foreclosure sale.12
Petitioner's expostulation that it did not receive the mailed notice to it
of the sale of the mortgaged property should be brushed aside. The
fact that respondent was able to receive the registry return card from
the mail in regular course shows that the postal item represented by
the return card had been received by the addressee. Otherwise, as
correctly contended by respondent, the mailed item should have
been stamped "Returned to Sender," still sealed with all the postal
markings, and the return card still attached to it.
As to the contention that the signature appearing on the registry
return card receipt appears to be only a dot and that the photostat
copy does not contain a signature at all we find, after a close scrutiny
of the registry return card, that there are strokes before and after the
dot. These strokes appear to be a signature which signifies: a) that
the registry claim card was received at the given address; b) that the
addressee had authorized a person to present the claim card at the
post office and receive the registered mail matter; and c) that the
authorized person signed the return card to acknowledge his receipt
of the mail matter. Even the trial court in its decision ruled that:
. . . the Court finds no cogent reason to overcome the
presumption that Sheriff Pablo Sy performed his task
regularly and in accordance with the rules. A closer look at
the assailed xerox copy of the registry receipt and the
original form which said xerox was admittedly copied would
indeed show that the xerox is not a faithful reproduction of
the original since it does not bear the complete signature of
the addressee as appearing on the original. It does not,
however, follow that the xerox is a forgery. The same bears
slight traces of the signature appearing on the original but,
there is no indication that the one was altered to conform to
the other. Rather, there must have been only a misprint of
the xerox but not amounting to any attempt to falsify the
same.13
Petitioner also claims that it had transferred to a different location but
the notice was sent to its old address. Petitioner failed to notify
respondent of its supposed change of address. Needless to say, it
can be surmised that respondent had sent the notice to petitioner's
official address.
 Anent its third assigned error, petitioner assails the posting of the
notices of sale by the Sheriff in the Office of the Sheriff, Office of the
Assessor and the Register of Deeds as these are not the
conspicuous public places required by law. Furthermore, it also
questions the non-posting of the notice of sale on the property itself
which was to be sold.
Apparently, this assigned error of petitioner is tantamount to a last
ditch effort to extricate itself from the quagmire it is in. Act 3135 does
not require posting of the notice of sale on the mortgaged property.
Section 3 of the said law merely requires that the notice of the sale
be posted for not less than twenty days in at least three public places
of the municipality or city where the property is situated. The
aforementioned places, to wit: the Sheriff's Office, the Assessor's
Office and the Register of Deeds are certainly the public places
contemplated by law, as these are places where people interested in
purchasing real estate congregate.
With regard to the fourth assigned error of petitioner, we do not
subscribe to the latter's view that the decision of the Court of Appeals
was mainly based on the presumption of the regularity of the
performance of official function of the officers involved. A perusal of
the records indubitably shows that the requirement of Act No. 3135
on the extrajudicial foreclosure of real estate mortgage had been
duly complied with by Senior Deputy Sheriff Sy.
WHEREFORE, the petition is DENIED and the decision rendered in
CA-G.R CV No. 38340 is hereby AFFIRMED.
SO ORDERED.
Padilla, Bellosillo, Vitug and Kapunan, JJ., concur.
EN BANC
G.R. No. 100776 October 28, 1993
ALBINO S. CO, Petitioner, vs. COURT OF APPEALS and PEOPLE OF
THE PHILIPPINES, Respondents.
Antonio P. Barredo for petitioner.chanrobles virtual law library
The Solicitor General for the people.
NARVASA, C.J.:
In connection with an agreement to salvage and refloat asunken vessel - and
in payment of his share of the expenses of the salvage operations therein
stipulated - petitioner Albino Co delivered to the salvaging firm on September
1, 1983 a check drawn against the Associated Citizens' Bank, postdated
November 30, 1983 in the sum of P361,528.00. 1 The check was deposited
on January 3, 1984. It was dishonored two days later, the tersely-stated
reason given by the bank being: "CLOSED ACCOUNT." chanrobles virtual
law library
A criminal complaint for violation of Batas Pambansa Bilang 22 2 was filed by
the salvage company against Albino Co with the Regional Trial Court of
Pasay City. The case eventuated in Co's conviction of the crime charged,
and his being sentenced to suffer a term of imprisonment of sixty (60) days
and to indemnify the salvage company in the sum of P361,528.00.
Co appealed to the Court of Appeals. There he sought exoneration upon the
theory that it was reversible error for the Regional Trial Court to have relied,
as basis for its verdict of conviction, on the ruling rendered on September 21,
1987 by this Court in Que v.People, 154 SCRA 160 (1987) 3 - i.e., that a
check issued merely to guarantee the performance of an obligation is
nevertheless covered by B.P. Blg. 22. This was because at the time of the
issuance of the check on September 1, 1983, some four (4) years prior to the
promulgation of the judgment in Que v. People on September 21, 1987, the
delivery of a "rubber" or "bouncing" check as guarantee for an obligation was
not considered a punishable offense, an official pronouncement made in a
Circular of the Ministry of Justice. That Circular (No. 4), dated December 15,
1981, pertinently provided as follows:
2.3.4. Where issuance of bouncing check is neither estafa nor violation of
B.P. Blg. 22.
Where the check is issued as part of an arrangement to guarantee or secure
the payment of an obligation, whether pre-existing or not, the drawer is not
criminally liable for either estafa or violation of B.P. Blg. 22 (Res. No. 438, s.
1981, Virginia Montano vs. Josefino Galvez, June 19, 1981; Res. No. 707, s.
1989; Alice Quizon vs. Lydia Calingo, October 23, 1981, Res. No. 769, s.
1981, Alfredo Guido vs. Miguel A. Mateo, et. al., November 17, 1981; Res.
No. 589, s. 1981, Zenaida Lazaro vs. Maria Aquino, August 7, 1981).
This administrative circular was subsequently reversed by another issued on
August 8, 1984 (Ministry Circular No. 12) - almost one (1) year after Albino
Co had delivered the "bouncing" check to the complainant on September 1,
1983. Said Circular No. 12, after observing inter alia that Circular No. 4 of
December 15, 1981 appeared to have been based on "a misapplication of
the deliberation in the Batasang Pambansa, . . . (or) the explanatory note on
the original bill, i.e. that the intention was not to penalize the issuance of a
check to secure or guarantee the payment of an obligation," as follows: 4
Henceforth, conforming with the rule that an administrative agency having
interpreting authority may reverse its administration interpretation of a
statute, but that its review interpretation applies only prospectively
(Waterbury Savings Bank vs. Danaher, 128 Conn., 476; 20 a2d 455 (1941),
in all cases involving violation of Batas Pambansa Blg. 22 where the check in
question is issued after this date, the claim that the check is issued as a
guarantee or part of an arrangement to secure an obligation collection will no
longer be considered a valid defense.
Co's theory was rejected by the Court of Appeals which affirmed his
conviction. Citing Senarillos v. Hermosisima, 101 Phil. 561, the Appellate
Court opined that the Que doctrine did not amount to the passage of new law
but was merely a construction or interpretation of a pre-existing one, i.e., BP
22, enacted on April 3, 1979.
From this adverse judgment of the Court of Appeals, Albino Co appealed to
this Court on certiorari under Rule 45 of the Rules of Court. By Resolution
dated September 9, 1991, the Court dismissed his appeal. Co moved for
reconsideration under date of October 2, 1991. The Court required comment
thereon by the Office of the Solicitor General. The latter complied and, in its
comment dated December 13, 1991, extensively argued against the merits of
Albino Co's theory on appeal, which was substantially that proffered by him in
the Court of Appeals. To this comment, Albino Co filed a reply dated
February 14, 1992. After deliberating on the parties' arguments and
contentions, the Court resolved, in the interests of justice, to reinstate Albino
Co's appeal and adjudicate the same on its merits.
Judicial decisions applying or interpreting the laws or the Constitution shall
form a part of the legal system of the Philippines," according to Article 8 of
the Civil Code. "Laws shall have no retroactive effect, unless the contrary is
provided," declares Article 4 of the same Code, a declaration that is echoed
by Article 22 of the Revised Penal Code: "Penal laws shall have, a
retroactive effect insofar as they favor the person guilty of a felony, who is
not a habitual criminal . . . 5chanrobles virtual law library
The principle of prospectivity of statutes, original or amendatory, has been
applied in many cases. These include: Buyco v. PNB, 961 2 SCRA 682
(June 30, 1961), holding that Republic Act No. 1576 which divested the
Philippine National Bank of authority to accept back pay certificates in
payment of loans, does not apply to an offer of payment made before
effectivity of the act; Largado v. Masaganda, et al., 5 SCRA 522 (June 30,
1962), ruling that RA 2613, s amended by RA 3090 on June, 1961, granting
to inferior courts jurisdiction over guardianship cases, could not be given
retroactive effect, in the absence of a saving clause; Larga v. Ranada, Jr., 64
SCRA 18, to the effect that Sections 9 and 10 of Executive Order No. 90,
amending Section 4 of PD 1752, could have no retroactive
application; People v. Que Po Lay, 94 Phil. 640, holding that a person cannot
be convicted of violating Circular No. 20 of the Central, when the alleged
violation occurred before publication of the Circular in the Official
Gazette; Baltazar v. C.A., 104 SCRA 619, denying retroactive application to
P.D. No. 27 decreeing the emancipation of tenants from the bondage of the
soil, and P.D. No. 316 prohibiting ejectment of tenants from rice and corn
farmholdings, pending the promulgation of rules and regulations
implementing P.D. No. 27; Nilo v. Court of Appeals, 128 SCRA 519,
adjudging that RA 6389 whichremoved "personal cultivation" as a ground for
the ejectment of a tenant cannot be given retroactive effect in the absence of
a statutory statement for retroactivity; Tac-An v. CA, 129 SCRA 319, ruling
that the repeal of the old Administrative Code by RA 4252 could not be
accorded retroactive effect; Ballardo v. Borromeo, 161 SCRA 500, holding
that RA 6389 should have only prospective application; (see also Bonifacio v.
Dizon, 177 SCRA 294 and Balatbat v. CA, 205 SCRA 419).
The prospectivity principle has also been made to apply to administrative
rulings and circulars, to wit: ABS-CBN Broadcasting Corporation v. CTA, Oct.
12, 1981, 108 SCRA 142, holding that a circular or ruling of the
Commissioner of Internal Revenue may not be given retroactive effect
adversely to a taxpayer: Sanchez v.COMELEC, 193 SCRA 317, ruling that
Resolution No. 90-0590 of the Commission on Elections, which directed the
holding of recall proceedings, had no retroactive application; Romualdez
v. CSC, 197 SCRA 168, where it was ruled that CSC Memorandum Circular
No. 29, s. 1989 cannot be given retrospective effect so as to entitle to
permanent appointment an employee whose temporary appointment had
expired before the Circular was issued.
The principle of prospectivity has also been applied to judicial decisions
which, "although in themselves not laws, are nevertheless evidence of what
the laws mean, . . . (this being) the reason whyunder Article 8 of the New
Civil Code, 'Judicial decisions applying or interpreting the laws or the
Constitution shall form a part of the legal system . . .'"chanrobles virtual law
library
So did this Court hold, for example, in Peo. v. Jabinal, 55 SCRA 607, 611:
It will be noted that when appellant was appointed Secret Agent by the
Provincial Government in 1962, and Confidential Agent by the Provincial
commander in 1964, the prevailing doctrine on the matter was that laid down
by Us in People v. Macarandang (1959) and People v. Lucero(1958). 6 Our
decision in People v. Mapa, 7reversing the aforesaid doctrine, came only in
1967. The sole question in this appeal is: should appellant be acquitted on
the basis of Our rulings in Macarandang and Lucero, or should his conviction
stand in view of the complete reverse of the Macarandang and Lucero
doctrine in Mapa? . . .
Decisions of this Court, although in themselves not laws, are nevertheless
evidence of what the laws mean, and this is the reason why under Article 8 of
the New Civil Code, "Judicial decisions applying or interpreting the laws or
the Constitution shall form a part of the legal system . . ."The interpretation
upon a law by this Court constitutes, in a way, a part of the law as of the date
that law was originally passed, since this Court's construction merely
establishes the contemporaneous legislative intent that the law thus
construed intends to effectuate. The settled rule supported by numerous
authorities is a restatement of the legal maxim "legis interpretation legis vim
obtinet" - the interpretation placed upon the written law by a competent court
has the force of law. The doctrine laid down in Luceroand Macarandang was
part of the jurisprudence, hence, of the law, of the land, at the time appellant
was found in possession of the firearm in question and where he was
arraigned by the trial court. It is true that the doctrine was overruled in the
Mapa case in 1967, but when a doctrine of this Court is overruled and a
different view is adopted, the new doctrine should be applied prospectively,
and should not apply to parties who had relied on, the old doctrine and acted
on the faith thereof. This is especially true in the construction and application
of criminal laws, where it is necessary that the punishment of an act be
reasonably foreseen for the guidance of society.
So, too, did the Court rule in Spouses Gauvain and Bernardita Benzonan
v. Court of Appeals, et al. (G.R. No. 97973) and Development Bank of the
Philippines v. Court of Appeals, et al (G.R. No 97998), Jan. 27, 1992, 205
SCRA 515, 527-528: 8
We sustain the petitioners' position, It is undisputed that the subject lot was
mortgaged to DBP on February 24, 1970. It was acquired by DBP as the
highest bidder at a foreclosure sale on June 18, 1977, and then sold to the
petitioners on September 29, 1979.
At that time, the prevailing jurisprudence interpreting section 119 of R.A. 141
as amended was that enunciated in Monge and Tupas cited above. The
petitioners Benzonan and respondent Pe and the DBP are bound by these
decisions for pursuant to Article 8 of the Civil Code "judicial decisions
applying or interpreting the laws or the Constitution shall form a part of the
legal system of the Philippines." But while our decisions form part of the law
of the land, they are also subject to Article 4 of the Civil Code which provides
that "laws shall have no retroactive effect unless the contrary is provided."
This is expressed in the familiar legal maxim lex prospicit, non respicit, the
law looks forward not backward. The rationale against retroactivity is easy to
perceive. The retroactive application of a law usually divests rights that have
already become vested or impairs the obligations of contract and hence, is
unconstitutional (Francisco vs. Certeza, 3 SCRA 565 [1061]).
The same consideration underlies our rulings giving only prospective effect to
decisions enunciating new doctrines. Thus, we emphasized in People
v. Jabinal, 55 SCRA 607 [1974]" . . . when a doctrine of this Court is
overruled and a different view is adopted, the new doctrine should be applied
prospectively and should not apply to parties who had relied on the old
doctrine and acted on the faith thereof.
A compelling rationalization of the prospectivity principle of judicial decisions
is well set forth in the oft-cited case of Chicot County Drainage Dist. v. Baxter
States Bank, 308 US 371, 374 [1940]. The Chicot doctrine advocates the
imperative necessity to take account of the actual existence of a statute prior
to its nullification, as an operative fact negating acceptance of "a principle of
absolute retroactive invalidity.
Thus, in this Court's decision in Tañada v. Tuvera, 9 promulgated on April 24,
1985 - which declared "that presidential issuances of general application,
which have not been published,shall have no force and effect," and as
regards which declaration some members of the Court appeared "quite
apprehensive about the possible unsettling effect . . . (the) decision might
have on acts done in reliance on the validity of these presidential decrees . .
." - the Court said:
. . . . The answer is all too familiar. In similar situation is in the past this Court,
had taken the pragmatic and realistic course set forth in Chicot County
Drainage District vs.Baxter Bank (308 U.S. 371, 374) to wit:chanrobles virtual
law library
The courts below have proceeded on the theory that the Act of Congress,
having found to be unconstitutional, was not a law; that it was inoperative,
conferring no rights and imposing no duties, and hence affording no basis for
the challenged decree. Norton vs. Shelby County, 118 US 425, 442;
Chicago, I. & L. Ry. Co. v. Hackett, 228 U. S. 559, 566. It is quite clear,
however, that such broad statements as to the effect of a determination of
unconstitutionality must be taken with qualifications. The actual existence of
a statute, prior to such a determination, is an operative fact and may have
consequences which cannot justly be ignored. The past cannot always be
erased by a new judicial declaration. The effect of the subsequent ruling as
to invalidity may have to be considered in various aspects - with respect to
particular conduct, private and official. Questions of rights claimed to have
become vested, of status, of prior determinations deemed to have finality and
acted upon accordingly, of public policy in the light of the nature both of the
statute and of its previous application, demand examination. These questions
are among the most difficult of those who have engaged the attention of
courts, state and federal, and it is manifest from numerous decisions that an
all-inclusive statement of a principle of absolute retroactive invalidity cannot
be justified.
Much earlier, in De Agbayani v. PNB, 38 SCRA 429 - concerning the effects
of the invalidation of "Republic Act No. 342, the moratorium legislation, which
continued Executive Order No. 32, issued by the then President Osmeña,
suspending the enforcement of payment of all debts and other monetary
obligations payable by war sufferers," and which had been "explicitly held in
Rutter v. Esteban (93 Phil. 68 [1953] 10 . . . (to be) in 1953 'unreasonable and
oppressive, and should not be prolonged a minute longer . . ." - the Court
made substantially the same observations, to wit: 11
. . . . The decision now on appeal reflects the orthodox view that an
unconstitutional act, for that matter an executive order or a municipal
ordinance likewise suffering from that infirmity, cannot be the source of any
legal rights or duties. Nor can it justify any official act taken under it. Its
repugnancy to the fundamental law once judicially declared results in its
being to all intents and purposes amere scrap of paper. . . . It is
understandable why it should be so, the Constitution being supreme and
paramount. Any legislative or executive act contrary to its terms cannot
survive.
Such a view has support in logic and possesses the merit of simplicity. lt may
not however be sufficiently realistic. It does not admit of doubt that prior to
the declaration of nullity such challenged legislative or executive act must
have been in force and had to be compiled with. This is so as until after the
judiciary, in an appropriate case, declares its invalidity,, it is entitled to
obedience and respect. Parties may have acted under it and may have
changed theirpositions, what could be more fitting than that in a subsequent
litigation regard be had to what has been done while such legislative or
executive act was in operation and presumed to be valid in all respects. It is
now accepted as a doctrine that prior to its being nullified, its existence is a
fact must be reckoned with. This is merely to reflect awareness that precisely
because the judiciary is the governmental organ which has the final say on
whether or not a legislative or executive measure is valid, a, period of time
may have elapsed before it can exercise the power of judicial review that
may lead to a declaration of nullity. It would be to deprive the law of its quality
of fairness and justice then, if there be no recognition of what had transpired
prior to such adjudication.
In the language of an American Supreme Court decision: 'The actual
existence of a statute, prior to such a determination [of unconstitutionality], is
an operative fact and may have consequences which cannot justly be
ignored. The past cannot always be erased by a new judicial declaration. The
effect of the subsequent ruling as to invalidity may have to be considered in
various aspects, - with respect to particular relations, individual and
corporate, and particular conduct, private and official (Chicot County
Drainage Dist. v. Baxter States Bank, 308 US 371, 374 [1940]). This
language has been quoted with approval in a resolution in Araneta v. Hill (93
Phil. 1002 [1953]) and the decision in Manila Motor Co. Inc. v. Flores (99
Phil. 738 [1956]). An even more recent instance is the opinion of Justice
Zaldivar speaking for the Court in Fernandez v. Cuerva and Co. (L-21114,
Nov. 28, 1967, 21 SCRA 1095).
Again, treating of the effect that should be given to its decision in Olaguer
v. Military Commission No 34, 12 - declaring invalid criminal proceedings
conducted during the martial law regime against civilians, which had resulted
in the conviction and incarceration of numerous persons - this Court, in Tan
vs. Barrios, 190 SCRA 686, at p. 700, ruled as follows:
In the interest of justice and consistently, we hold that Olaguer should, in
principle, be applied prospectively only to future cases and cases still
ongoing or not yet final when that decision was promulgated. Hence, there
should be no retroactive nullification of final judgments, whether of conviction
or acquittal, rendered by military courts against civilians before the
promulgation of the Olaguer decision. Such final sentences should not be
disturbed by the State. Only in particular cases where the convicted person
or the State shows that there was serious denial of constitutional rights of the
accused, should the nullity of the sentence be declared and a retrial be
ordered based on the violation of the constitutional rights of the accused and
not on the Olaguer doctrine. If a retrial is no longer possible, the accused
should be released since judgment against him is null on account of the
violation of his constitutional rights and denial of due process.
xxx xxx xxxchanrobles virtual law library
The trial of thousands of civilians for common crimes before the military
tribunals and commissions during the ten-year period of martial rule (1971-
1981) which were created under general orders issued by President Marcos
in the exercise of his legislative powers is an operative fact that may not just
be ignored. The belated declaration in 1987 of the unconstitutionality and
invalidity of those proceedings did not erase the reality of their consequences
which occurred long before our decision in Olaguer was promulgated and SO ORDERED.
which now prevent us from carrying Olaguer to the limit of its logic. Thus did
this Court rule in Municipality of Malabang v. Benito, 27 SCRA 533, where Padilla, Regalado, Nocon and Puno, JJ., concur.
the question arose as to whether the nullity of creation of a municipality by
executive order wiped out all the acts of the local government
abolished. 13chanrobles virtual law library

It would seem then, that the weight of authority is decidedly in favor of the
Republic of the Philippines
proposition that the Court's decision of September 21, 1987 in Que
SUPREME COURT
v. People, 154 SCRA 160 (1987) 14 that a check issued merely to guarantee
Manila
the performance of an obligation is nevertheless covered by B.P. Blg. 22 -
should not be given retrospective effect to the prejudice of the petitioner and
other persons situated, who relied on the official opinion of the Minister of EN BANC
Justice that such a check did not fall within the scope of B.P. Blg. 22.
G.R. No. 192074 June 10, 2014
Inveighing against this proposition, the Solicitor General invokes U.S.v. Go
Chico, 14 Phil. 128, applying the familiar doctrine that in crimes mala LIGHT RAIL TRANSIT AUTHORITY, represented by its Administrator
prohibita, the intent or motive of the offender is inconsequential, the only MELQUIADES A. ROBLES, Petitioner,
relevant inquiry being, "has the law been violated?" The facts in Go Chico are vs.
substantially different from those in the case at bar. In the former, there was AURORA A. SALVAÑA, Respondent.
no official issuance by the Secretary of Justice or other government officer
construing the special law violated; 15 and it was there observed, among DECISION
others, that "the defense . . . (of) an honest misconstruction of the law under
legal advice" 16 could not be appreciated as a valid defense. In the present LEONEN, J.:
case on the other hand, the defense is that reliance was placed, not on the
opinion of a private lawyer but upon an official pronouncement of no less
An administrative agency has standing to appeal the Civil Service
than the attorney of the Government, the Secretary of Justice, whose
Commission's repeal or modification of its original decision. In such
opinions, though not law, are entitled to great weight and on which reliance
instances, it is included in the concept of a "party adversely affected" by a
may be placed by private individuals is reflective of the correct interpretation
decision of the Civil Service Commission granted the statutory right to
of a constitutional or statutory provision; this, particularly in the case of penal
appeal:
statutes, by the very nature and scope of the authority that resides in as
regards prosecutions for their violation. 17 Senarillos vs.Hermosisima, supra,
relied upon by the respondent Court of Appeals, is crucially different in that in We are asked in this petition for review1 filed by the Light Rail Transit
said case, as in U.S. v. Go Chico, supra, no administrative interpretation Authority (LRTA), a government-owned and -controlled corporation, to modify
antedated the contrary construction placed by the Court on the law invoked. the Civil Service Commission’s finding that respondent was guilty only of
simple dishonesty.
This is after all a criminal action all doubts in which, pursuant to familiar,
fundamental doctrine, must be resolved in favor of the accused. Everything This case developed as follows:
considered, the Court sees no compelling reason why the doctrine of mala
prohibita should override the principle of prospectivity, and its clear On May 12, 2006, then Administrator of the Light Rail Transit Authority,
implications as herein above set out and discussed, negating criminal Melquiades Robles, issued Office Order No. 119, series of 2006.2 The order
liability. revoked Atty. Aurora A. Salvaña’s designation as Officer-in-Charge (OIC) of
the LRTA Administrative Department. It "direct[ed] her instead to handle
WHEREFORE, the assailed decisions of the Court of Appeals and of the special projects and perform such other duties and functions as may be
Regional Trial Court are reversed and set aside, and the criminal prosecution assigned to her"3 by the Administrator.
against the accused-petitioner is DISMISSED, with costs de oficio.
Atty. Salvaña was directed to comply with this office order through a
memorandum issued on May 22, 2006 by Atty. Elmo Stephen P. Triste, the
newly designated OIC of the administrative department. Instead of
complying, Salvaña questioned the order with the Office of the President. 4
In the interim, Salvaña applied for sick leave of absence on May 12, 2006
and from May 15 to May 31, 2006.5 In support of her application, she
submitted a medical certificate6 issued by Dr. Grace Marie Blanco of the
Veterans Memorial Medical Center (VMMC).
LRTA discovered that Dr. Blanco did not issue this medical certificate. Dr.
Blanco also denied having seen or treated Salvaña on May 15, 2006, the
date stated on her medical certificate.7 On June 23, 2006, Administrator
Robles issued a notice of preliminary investigation. The notice directed
Salvaña to explain in writing within 72 hours from her receipt of the notice
"why no disciplinary action should be taken against [her]"8 for not complying
with Office Order No. 119 and for submitting a falsified medical certificate. 9
Salvaña filed her explanation on June 30, 2006.10 She alleged that as a
member of the Bids and Awards Committee, she "refused to sign a
resolution"11 favoring a particular bidder. She alleged that Office Order No.
119 was issued by Administrator Robles to express his "ire and
vindictiveness"12 over her refusal to sign.
The LRTA’s Fact-finding Committee found her explanation unsatisfactory. On
July 26, 2006, it issued a formal charge against her for Dishonesty,
Falsification of Official Document, Grave Misconduct, Gross Insubordination,
and Conduct Prejudicial to the Best Interest of the Service.13
On August 5, 2006, "Salvaña tendered her irrevocable resignation."14 None
of the pleadings alleged that this irrevocable resignation was accepted,
although the resolution of the Fact-finding Committee alluded to
Administrator Robles’ acceptance of the resignation letter.
In the meantime, the investigation against Salvaña continued, and the
prosecution presented its witnesses.15Salvaña "submitted a manifestation
dated September 6, 2006, stating that the Committee was biased and that
[Administrator] Robles was both the accuser and the hearing officer."16
On October 31, 2006, the Fact-finding Committee issued a resolution "finding
Salvaña guilty of all the charges against her and imposed [on] her the penalty
of dismissal from . . . service with all the accessory penalties."17 The LRTA
Board of Directors approved the findings of the Fact-finding Committee18
Salvaña appealed with the Civil Service Commission. "In her appeal, [she]
claimed that she was denied due process and that there [was] no substantial
evidence to support the charges against her."19
On July 18, 2007, the Civil Service Commission modified the decision and
issued Resolution No. 071364.The Civil Service Commission found that
Salvaña was guilty only of simple dishonesty. She was meted a penalty of
suspension for three months.20
LRTA moved for reconsideration21 of the resolution. This was denied in a
resolution dated May 26, 2008.22 LRTA then filed a petition for review with
the Court of Appeals.23
On November 11, 2009, the Court of Appeals24 dismissed the petition and
affirmed the Civil Service Commission’s finding that Salvaña was only guilty
of simple dishonesty. The appellate court also ruled that Administrator
Robles had no standing to file a motion for reconsideration before the Civil
Service Commission because that right only belonged to respondent in an
administrative case.25 LRTA moved for reconsideration26 of this decision but
was denied.27
Hence, LRTA filed this present petition.
Petitioner argues that it has the legal personality to appeal the decision of the
Civil Service Commission before the Court of Appeals.28 It cites Philippine
National Bank v. Garcia29 as basis for its argument that it can be considered
a "person adversely affected" under the pertinent rules and regulations on
the appeal of administrative cases.30 It also argues that respondent’s
falsification of the medical certificate accompanying her application for sick
leave was not merely simple but serious dishonesty.31
Respondent agrees with the ruling of the Court of Appeals that petitioner had
no legal personality to file the appeal since it was not the "person adversely
affected" by the decision. She counters that Administrator Robles had no
authority to file the appeal since he was unable to present a resolution from
the Board of Directors authorizing him to do so.32 She also agrees with the
Civil Service Commission’s finding that she was merely guilty of simple
dishonesty.33
In its reply,34 petitioner points out that it presented a secretary’s
certificate35 dated July 17, 2008 and which it attached to the petitions before
the Civil Service Commission, Court of Appeals, and this court. It argues that
the certificate authorizes the LRTA and its Administrator to file the necessary
motion for reconsideration or appeal regarding this case, and this
authorization has yet to be revoked.36
Both parties filed their respective memoranda before this court on May 23,
201237 and December 6, 2012.38
The legal issues that will determine the results of this case are:
1. Whether the LRTA, as represented by its Administrator, has the
standing to appeal the modification by the Civil Service Commission
of its decision
2. Whether Salvaña was correctly found guilty of simple dishonesty
only
We grant the petition.
The parties may appeal in administrative cases involving members of the civil
service
It is settled that "[t]he right to appeal is not a natural right [or] a part of due
process; it is merely a statutory privilege, and may be exercised only in the
manner and in accordance with the provisions of the law."39 If it is not granted
by the Constitution, it can only be availed of when a statute provides for
it.40 When made available by law or regulation, however, a person cannot be
deprived of that right to appeal. Otherwise, there will be a violation of the
constitutional requirement of due process of law.
Article IX (B), Section 3 of the Constitution mandates that the Civil Service
Commission shall be "the central personnel agency of the Government."41 In
line with the constitutionally enshrined policy that a public office is a public
trust, the Commission was tasked with the duty "to set standards and to
enforce the laws and rules governing the selection, utilization, training, and
discipline of civil servants."42
Civil servants enjoy security of tenure, and "[n]o officer or employee in the
Civil Service shall be suspended or dismissed except for cause as provided
by law and after due process."43 Under Section 12, Chapter 3, Book V of the
Administrative Code, it is the Civil Service Commission that has the power to
"[h]ear and decide administrative cases instituted by or brought before it
directly or on appeal."
The grant of the right to appeal in administrative cases is not new. In
Republic Act No. 2260 or the Civil Service Law of 1959, appeals "by the
respondent"44 were allowed on "[t]he decision of the Commissioner of Civil
Service rendered in an administrative case involving discipline of subordinate
officers and employees."45
Presidential Decree No. 807, while retaining the right to appeal in
administrative cases, amended the phrasing of the party allowed to appeal.
Section 37, paragraph (a), and Section 39, paragraph (a),of Presidential
Decree No. 807 provide:
Sec. 37. Disciplinary Jurisdiction. - (a) The Commission shall decide upon
appeal all administrative cases involving the imposition of a penalty of
suspension for more than thirty days, or fine in an amount exceeding thirty
days' salary, demotion in rank or salary or transfer, removal or dismissal from
office.
Sec. 39. Appeals. - (a) Appeals, where allowable, shall be made by the party
adversely affected by the decision within fifteen days from receipt of the
decision unless a petition shall be decided within fifteen days. (Emphasis
supplied)
Additionally, Section 47, paragraph (1), and Section 49, paragraph (1), of the
Administrative Code provide:
SECTION 47. Disciplinary Jurisdiction.—(1) The Commission shall decide
upon appeal all administrative disciplinary cases involving the imposition of a
penalty of suspension for more than thirty days, or fine in an amount
exceeding thirty days’ salary, demotion in rank or salary or transfer, removal
or dismissal from office.
SECTION 49. Appeals.—(1) Appeals, where allowable, shall be made by the
party adversely affected by the decision within fifteen days from receipt of the
decision unless a petition for reconsideration is seasonably filed, which
petition shall be decided within fifteen days….(Emphasis supplied)
The phrase, "person adversely affected," was not defined in either
Presidential Decree No. 807 or the Administrative Code. This prompted a
series of cases46 providing the interpretation of this phrase.
The first of these cases, Paredes v. Civil Service Commission,47 declared:
Based on [Sections 37 (a) and 39 (a) of Presidential Decree No. 807], appeal
to the Civil Service Commission in an administrative case is extended to the
party adversely affected by the decision, that is, the person or the respondent
employee who has been meted out the penalty of suspension for more than
thirty days; or fine in an amount exceeding thirty days salary demotion in
rank or salary or transfer, removal or dismissal from office. The decision of
the disciplining authority is even final and not appealable to the Civil Service
Commission in cases where the penalty imposed is suspension for not more
than thirty days or fine in an amount not exceeding thirty days
salary.48(Emphasis supplied)
This ruling was repeated in Mendez v. Civil Service Commission49 where this
court stated that:
A cursory reading of P.D. 807, otherwise known as "The Philippine Civil
Service Law" shows that said law does not contemplate a review of decisions
exonerating officers or employees from administrative charges.
....
By inference or implication, the remedy of appeal may be availed of only in a
case where the respondent is found guilty of the charges filed against him.
But when the respondent is exonerated of said charges, as in this case, there
is no occasion for appeal.50 (Emphasis supplied)
The same ratio would be reiterated and become the prevailing doctrine on
the matter in Magpale, Jr. v. Civil Service Commission, 51 Navarro v. Civil
Service Commission and Export Processing Zone,52 University of the
Philippines v. Civil Service Commission,53 and Del Castillo v. Civil Service
Commission.54
In these cases, this court explained that the right to appeal being merely a
statutory privilege can only be availed of by the party specified in the law.
Since the law presumes that appeals will only be made in decisions
prescribing a penalty, this court concluded that the only parties that will be
adversely affected are the respondents that are charged with administrative
offenses. Since the right to appeal is a remedial right that may only be
granted by statute, a government party cannot by implication assert that right
as incidental to its power, since the right to appeal does not form part of due
process.55
In effect, this court equated exonerations in administrative cases to acquittals
in criminal cases wherein the State or the complainant would have no right to
appeal.56 When the Civil Service Commission enacted the Uniform Rules on
Administrative Cases in the Civil Service, or the URACCS, on September 27,
1999, it applied this court’s definition. Thus, Section 2, paragraph (l),Rule I,
and Section 38,Rule III of the URACCS defined "party adversely affected" as
follows:
Section 2. Coverage and Definition of Terms.
....
(l) PARTY ADVERSELY AFFECTED refers to the respondent against whom
a decision in a disciplinary case has been rendered.
For some time, government parties were, thus, barred from appealing
exonerations of civil servants they had previously sanctioned. It was not until
the promulgation by this court of Civil Service Commission v. Dacoycoy57 on
April 29, 1999 that the issue would be revisited.
Civil Service Commission v. Dacoycoyand Philippine National Bank v. Garcia
In Civil Service Commission v. Dacoycoy,58 an administrative complaint for
habitual drunkenness, misconduct, and nepotism was filed against the
Vocational School Administrator of Balicuatro College of Arts and Trade in
Allen, Northern Samar. The Civil Service Commission found Dacoycoy guilty,
but the Court of Appeals overturned this finding and exonerated Dacoycoy of
all charges. The Civil Service Commission then appealed the ruling of the
appellate court. This court, in addressing the issue of the Commission’s
standing, stated that:
Subsequently, the Court of Appeals reversed the decision of the Civil Service
Commission and held respondent not guilty of nepotism. Who now may
appeal the decision of the Court of Appeals to the Supreme Court? Certainly
not the respondent, who was declared not guilty of the charge. Nor the
complainant George P. Suan, who was merely a witness for the government.
Consequently, the Civil Service Commission has become the party adversely
affected by such ruling, which seriously prejudices the civil service system.
Hence, as an aggrieved party, it may appeal the decision of the Court of
Appeals to the Supreme Court. By this ruling, we now expressly abandon
and overrule extant jurisprudence that "the phrase ‘party adversely affected
by the decision’ refers to the government employee against whom the
administrative case is filed for the purpose of disciplinary action which may
take the form of suspension, demotion in rank or salary, transfer, removal or
dismissal from office" and not included are "cases where the penalty imposed
is suspension for not more than thirty (30) days or fine in an amount not
exceeding thirty days salary" or "when the respondent is exonerated of the
charges, there is no occasion for appeal." In other words, we overrule prior
decisions holding that the Civil Service Law "does not contemplate a review
of decisions exonerating officers or employees from administrative charges"
enunciated in Paredes v. Civil Service Commission; Mendez v. Civil Service
Commission; Magpale v. Civil Service Commission; Navarro v. Civil Service
Commission and Export Processing Zone Authority and more recently Del
Castillo v. Civil Service Commission.59 (Emphasis supplied; citations omitted)
In his concurring opinion, then Chief Justice Puno summed up the rationale
for allowing government parties to appeal, thus:
In truth, the doctrine barring appeal is not categorically sanctioned by the
Civil Service Law. For what the law declares as "final" are decisions of heads
of agencies involving suspension for not more than thirty (30) days or fine in
an amount not exceeding thirty (30) days salary.
But there is a clear policy reason for declaring these decisions final. These
decisions involve minor offenses. They are numerous for they are the usual
offenses committed by government officials and employees. To allow their
multiple level appeal will doubtless overburden the quasi-judicial machinery
of our administrative system and defeat the expectation of fast and efficient
action from these administrative agencies. Nepotism, however, is not a petty
offense. Its deleterious effect on government cannot be over-emphasized.
And it is a stubborn evil. The objective should be to eliminate nepotic acts,
hence, erroneous decisions allowing nepotism cannot be given immunity
from review, especially judicial review. It is thus non sequitur to contend that
since some decisions exonerating public officials from minor offenses cannot
be appealed, ergo, even a decision acquitting a government official from a
major offense like nepotism cannot also be appealed.60 (Emphasis supplied)
The decision in Dacoycoy would be reiterated in 2002 when this court
promulgated Philippine National Bank v. Garcia.61 Philippine National Bank
categorically allowed the disciplining authority to appeal the decision
exonerating the disciplined employee.
In that case, the bank charged Ricardo V. Garcia, Jr., one of its check
processors and cash representatives, with gross neglect of duty when he lost
₱7 million in connection with his duties. Both the Civil Service Commission
and the Court of Appeals reversed the bank and exonerated Garcia from all
liability.
This court, however, upheld Philippine National Bank’s right to appeal the
case. Citing Dacoycoy, this court ruled:
Indeed, the battles against corruption, malfeasance and misfeasance will be
seriously undermined if we bar appeals of exoneration. After all,
administrative cases do not partake of the nature of criminal actions, in which
acquittals are final and unappealable based on the constitutional proscription
of double jeopardy.
Furthermore, our new Constitution expressly expanded the range and scope
of judicial review. Thus, to prevent appeals of administrative decisions except
those initiated by employees will effectively and pervertedly erode this
constitutional grant.
Finally, the Court in Dacoycoy ruled that the CSC had acted well within its
rights in appealing the CA’s exoneration of the respondent public official
therein, because it has been mandated by the Constitution to preserve and
safeguard the integrity of our civil service system. In the same light, herein
Petitioner PNB has the standing to appeal to the CA the exoneration of
Respondent Garcia. After all, it is the aggrieved party which has complained
of his acts of dishonesty. Besides, this Court has not lost sight of the fact that
PNB was already privatized on May 27, 1996. Should respondent be finally
exonerated indeed, it might then be incumbent upon petitioner to take him
back into its fold. It should therefore be allowed to appeal a decision that in
its view hampers its right to select honest and trustworthy employees, so that
it can protect and preserve its name as a premier banking institution in our
country.62(Emphasis supplied) Thus, the Civil Service Commission issued
Resolution No. 021600 published on December 29, 2002, which amended
the URACCS, to allow the disciplining authority to appeal the decision
exonerating the employee:
Section 2. Coverage and Definition of Terms. –
....
(l) PARTY ADVERSELY AFFECTED refers to the respondent against whom
a decision in a disciplinary case has been rendered or to the disciplining
authority in an appeal from a decision exonerating the said employee.
Subsequent decisions continued to reiterate the rulings in Dacoycoy and
Philippine National Bank.
In Constantino-David v. Pangandaman-Gania,63 this court explained the
rationale of allowing the Civil Service Commission to appeal decisions of
exonerations as follows:
That the CSC may appeal from an adverse decision of the Court of Appeals
reversing or modifying its resolutions which may seriously prejudice the civil
service system is beyond doubt. In Civil Service Commission v. Dacoycoy[,]
this Court held that the CSC may become the party adversely affected by
such ruling and the aggrieved party who may appeal the decision to this
Court.
The situation where the CSC’s participation is beneficial and indispensable
often involves complaints for administrative offenses, such as neglect of duty,
being notoriously undesirable, inefficiency and incompetence in the
performance of official duties, and the like, where the complainant is more
often than not acting merely as a witness for the government which is the
real party injured by the illicit act. In cases of this nature, a ruling of the Court
of Appeals favorable to the respondent employee is understandably adverse
to the government, and unavoidably the CSC as representative of the
government may appeal the decision to this Court to protect the integrity of
the civil service system.
The CSC may also seek a review of the decisions of the Court of Appeals
that are detrimental to its constitutional mandate as the central personnel
agency of the government tasked to establish a career service, adopt
measures to promote morale, efficiency, integrity, responsiveness,
progressiveness and courtesy in the civil service, strengthen the merit and
rewards system, integrate all human resources development programs for all
levels and ranks, and institutionalize a management climate conducive to
public accountability. Nonetheless, the right of the CSC to appeal the
adverse decision does not preclude the private complainant in appropriate
cases from similarly elevating the decision for review.64
Then in Civil Service Commission v. Gentallan,65 this court declared:
At the outset, it should be noted that the Civil Service Commission, under the
Constitution, is the central personnel agency of the government charged with
the duty of determining questions of qualifications of merit and fitness of
those appointed to the civil service. Thus, the CSC, as an institution whose
primary concern is the effectiveness of the civil service system, has the
standing to appeal a decision which adversely affects the civil service. We
hold, at this juncture, that CSC has the standing to appeal and/or to file its
motion for reconsideration.66
The right to appeal by government parties was not limited to the Civil Service
Commission.
In Pastor v. City of Pasig,67 this court ruled that the City of Pasig had
standing to appeal the decision of the Civil Service Commission reinstating a
city employee to her former position, despite the city government having
reassigned her to another unit.
In Geronga v. Varela,68 this court ruled that the Mayor of Cadiz City had the
right to file a motion for reconsideration of a decision by the Civil Service
Commission exonerating a city employee on the ground that "as the
appointing and disciplining authority, [he] is a real party in interest."69
In Department of Education v. Cuanan,70 this court ruled that the Department
of Education "qualifie[d] as a party adversely affected by the judgment, who
can file an appeal of a judgment of exoneration in an administrative case."71
There are, however, cases, which sought to qualify this right to appeal.
In National Appellate Board v. Mamauag,72 an administrative complaint for
grave misconduct was filed by Quezon City Judge Adoracion G. Angeles
against several members of the Philippine National Police (PNP). The
Central Police District Command (CPDC) of Quezon City, upon investigation,
dismissed the complaint. Dissatisfied, Judge Angeles moved for a
reinvestigation by then PNP Chief Recaredo Sarmiento II.
PNP Chief Sarmiento issued a decision finding the accused police officers
guilty of the offenses charged. Some were meted the penalty of suspension
while others were dismissed from service. Upon motion for reconsideration
by Judge Angeles, Chief Sarmiento modified his ruling and ordered the
dismissal of the suspended police officers.
One of the officers, Police Inspector John Mamauag, appealed the decision
with the National Appellate Board of the National Police Commission. The
National Appellate Board, however, denied the appeal. Mamauag appealed
the denial with the Court of Appeals. The Court of Appeals reversed the
decision of the National Appellate Board and ruled that it was the Philippine
National Police, not Judge Angeles, which had the right to appeal the
decision of PNP Chief Sarmiento, as it was the party adversely affected. The
National Appellate Board then appealed this decision with this court.
This court, while citing Dacoycoy, declared that Judge Angeles, as
complainant, had no right to appeal the dismissal by CPDC of the complaint
against Mamauag. It qualified the right of government agencies to appeal by
specifying the circumstances by which the right may be given, thus:
However, the government party that can appeal is not the disciplining
authority or tribunal which previously heard the case and imposed the
penalty of demotion or dismissal from the service. The government party
appealing must be one that is prosecuting the administrative case against the
respondent. Otherwise, an anomalous situation will result where the
disciplining authority or tribunal hearing the case, instead of being impartial
and detached, becomes an active participant in prosecuting the respondent.
Thus, in Mathay, Jr. v. Court of Appeals, decided after Dacoycoy, the Court
declared:
To be sure, when the resolutions of the Civil Service Commission were
brought before the Court of Appeals, the Civil Service Commission was
included only as a nominal party. As a quasi-judicial body, the Civil Service
Commission can be likened to a judge who should "detach himself from
cases where his decision is appealed to a higher court for review."
In instituting G.R. No. 126354, the Civil Service Commission dangerously
departed from its role as adjudicator and became an advocate. Its mandated
function is to "hear and decide administrative cases instituted by or brought
before it directly or on appeal, including contested appointments and to
review decisions and actions of its offices and agencies," not to
litigate.73 (Emphasis supplied)
The ruling in National Appellate Boardwas applied in Montoya v.
Varilla,74 Pleyto v. PNP-CIDG,75 and Ombudsman v. Liggayu.76
The present rule is that a government party is a "party adversely affected" for
purposes of appeal provided that the government party that has a right to
appeal must be the office or agency prosecuting the case.
Despite the limitation on the government party’s right to appeal, this court
has consistently upheld that right in Dacoycoy. In Civil Service Commission
v. Almojuela,77 we stated that:
More than ten years have passed since the Court first recognized in
Dacoycoy the CSC’s standing to appeal the CA’s decisions reversing or
modifying its resolutions seriously prejudicial to the civil service system.
Since then, the ruling in Dacoycoy has been subjected to clarifications and
qualifications but the doctrine has remained the same: the CSC has standing
as a real party in interest and can appeal the CA’s decisions modifying or
reversing the CSC’s rulings, when the CA action would have an adverse
impact on the integrity of the civil service. As the government’s central
personnel agency, the CSC is tasked to establish a career service and
promote morale, efficiency, integrity, responsiveness, progressiveness, and
courtesy in the civil service; it has a stake in ensuring that the proper
disciplinary action is imposed on an erring public employee, and this stake
would be adversely affected by a ruling absolving or lightening the CSC-
imposed penalty. Further, a decision that declares a public employee not
guilty of the charge against him would have no other appellant than the CSC.
To be sure, it would not be appealed by the public employee who has been
absolved of the charge against him; neither would the complainant appeal
the decision, as he acted merely as a witness for the government. We thus
find no reason to disturb the settled Dacoycoy doctrine.78 (Citations omitted)
Indeed, recent decisions showed that this court has allowed appeals by
government parties. Notably, the government parties’ right to appeal in these
cases was not brought up as an issue by either of the parties.
In Civil Service Commission v. Yu,79 this court allowed the Civil Service
Commission to appeal the Court of Appeals’ decision granting the
reinstatement of a government employee whose appointment had been
revoked by the Commission.
In National Power Corporation v. Civil Service Commission and
Tanfelix,80 the National Power Corporation had previously filed an
administrative complaint against one of its employees, Rodrigo Tanfelix,
resulting in his dismissal from service. When the Civil Service Commission
exonerated Tanfelix and the Court of Appeals affirmed the exoneration, the
National Power Corporation was allowed to appeal.
These cases, however, allowed the disciplining authority to appeal only from
a decision exonerating the said employee. In this case, respondent was not
exonerated; she was found guilty, but the finding was modified. This court
previously stated that:
If the administrative offense found to have been actually committed is of
lesser gravity than the offense charged, the employee cannot be considered
exonerated if the factual premise for the imposition of the lesser penalty
remains the same.81
Dacoycoy, Philippine National Bank, and the URACCS failed to contemplate
a situation where the Civil Service Commission modified the penalty from
dismissal to suspension. The erring civil servant was not exonerated, and the
finding of guilt still stood. In these situations, the disciplinary authority should
be allowed to appeal the modification of the decision.
The LRTA had standing to appeal the modification by the Civil Service
Commission of its decision
The employer has the right "to select honest and trustworthy
employees."82 When the government office disciplines an employee based
on causes and procedures allowed by law, it exercises its discretion. This
discretion is inherent in the constitutional principle that "[p]ublic officers and
employees must, at all times, be accountable to the people, serve them with
utmost responsibility, integrity, loyalty, and efficiency; act with patriotism and
justice, and lead modest lives."83 This is a principle that can be invoked by
the public as well as the government office employing the public officer.
Here, petitioner already decided to dismiss respondent for dishonesty.
Dishonesty is a serious offense that challenges the integrity of the public
servant charged. To bar a government office from appealing a decision that
lowers the penalty of the disciplined employee prevents it from ensuring its
mandate that the civil service employs only those with the utmost sense of
responsibility, integrity, loyalty, and efficiency.
Honesty and integrity are important traits required of those in public service.
If all decisions by quasi-judicial bodies modifying the penalty of dismissal
were allowed to become final and unappealable, it would, in effect, show
tolerance to conduct unbecoming of a public servant. The quality of civil
service would erode, and the citizens would end up suffering for it.
During the pendency of this decision, or on November 18, 2011, the Revised
Rules on Administrative Cases in the Civil Service or RACCS was
promulgated. The Civil Service Commission modified the definition of a "party
adversely affected" for purposes of appeal.
Section 4. Definition of Terms. –
....
k. PARTY ADVERSELY AFFECTED refers to the respondent against whom
a decision in an administrative case has been rendered or to the disciplining
authority in an appeal from a decision reversing or modifying the original
decision. (Emphasis supplied)
Procedural laws have retroactive application. In Zulueta v. Asia Brewery: 84
As a general rule, laws have no retroactive effect. But there are certain
recognized exceptions, such as when they are remedial or procedural in
nature. This Court explained this exception in the following language:
It is true that under the Civil Code of the Philippines, "(l)aws shall have no
retroactive effect, unless the contrary is provided. But there are settled
exceptions to this general rule, such as when the statute is CURATIVE or
REMEDIAL in nature or when it CREATES NEW RIGHTS.
....
On the other hand, remedial or procedural laws, i.e., those statutes relating
to remedies or modes of procedure, which do not create new or take away
vested rights, but only operate in furtherance of the remedy or confirmation of
such rights, ordinarily do not come within the legal meaning of a retrospective
law, nor within the general rule against the retrospective operation of
statutes.
Thus, procedural laws may operate retroactively as to pending proceedings
even without express provision to that effect. Accordingly, rules of procedure
can apply to cases pending at the time of their enactment. In fact, statutes
regulating the procedure of the courts will be applied on actions
undetermined at the time of their effectivity. Procedural laws are
retrospective in that sense and to that extent.85 (Emphasis supplied)
Remedial rights are those rights granted by remedial or procedural laws.
These are rights that only operate to further the rules of procedure or to
confirm vested rights. As such, the retroactive application of remedial rights
will not adversely affect the vested rights of any person. Considering that the
right to appeal is a right remedial in nature, we find that Section 4, paragraph
(k), Rule I of the RACCS applies in this case. Petitioner, therefore, had the
right to appeal the decision of the Civil Service Commission that modified its
original decision of dismissal.
Recent decisions implied the retroactive application of this rule. While the
right of government parties to appeal was not an issue, this court gave due
course to the appeals filed by government agencies before the promulgation
of the Revised Rules on Administrative Cases in the Civil Service.
In Civil Service Commission v. Clave,86 the Government Service and
Insurance System (GSIS) found one of its employees, Aurora M. Clave,
guilty of simple neglect of duty. The Civil Service Commission affirmed the
GSIS’s findings. The Court of Appeals, however, while affirming the Civil
Service Commission, reduced the penalty. Both the GSIS and the Civil
Service Commission were given standing to appeal the decision of the Court
of Appeals.
In GSIS v. Chua,87 the GSIS dismissed Heidi R. Chua for grave misconduct,
dishonesty, and conduct prejudicial to the best interest of service. The Civil
Service Commission affirmed the GSIS, but the Court of Appeals, while
affirming the findings of the Commission, modified the penalty to simple
misconduct. The GSIS was then allowed to bring an appeal of the
modification of the penalty with this court.
Thus, we now hold that the parties adversely affected by a decision in an
administrative case who may appeal shall include the disciplining authority
whose decision dismissing the employee was either overturned or modified
by the Civil Service Commission.
The offense committed was less serious dishonesty, not simple dishonesty
Dishonesty has been defined "as the ‘disposition to lie, cheat, deceive, or
defraud; untrustworthiness, lack of integrity’ . . . ."88 Since the utmost integrity
is expected of public servants, its absence is not only frowned upon but
punished severely.
Section 52, Rule IV of the URACCS provides:
Section 52. Classification of Offenses. – Administrative offenses with
corresponding penalties are classified into grave, less grave or light,
depending on their gravity or depravity and effects on the government
service.
A. The following are grave offenses with their corresponding penalties:
1. Dishonesty - 1st Offense – Dismissal
....
In Remolona v. Civil Service Commission,89 this court explained the rationale
for the severity of the penalty:
It cannot be denied that dishonesty is considered a grave offense punishable
by dismissal for the first offense under Section 23, Rule XIV of the Rules
Implementing Book V of Executive Order No. 292. And the rule is that
dishonesty, in order to warrant dismissal, need not be committed in the
course of the performance of duty by the person charged. The rationale for
the rule is that if a government officer or employee is dishonest or is guilty of
oppression or grave misconduct, even if said defects of character are not
connected with his office, they affect his right to continue in office. The
Government cannot tolerate in its service a dishonest official, even if he
performs his duties correctly and well, because by reason of his government
position, he is given more and ample opportunity to commit acts of
dishonesty against his fellow men, even against offices and entities of the
government other than the office where he is employed; and by reason of his
office, he enjoys and possesses a certain influence and power which renders
the victims of his grave misconduct, oppression and dishonesty less
disposed and prepared to resist and to counteract his evil acts and
actuations. The private life of an employee cannot be segregated from his
public life. Dishonesty inevitably reflects on the fitness of the officer or
employee to continue in office and the discipline and morale of the
service.90 (Emphasis supplied)
However, on April 4, 2006, the Civil Service Commission issued Resolution
No. 06-0538 or the Rules on the Administrative Offense of Dishonesty.
Resolution No. 06-0538 recognizes that dishonesty is a grave offense
punishable by dismissal from service.91 It, however, also recognizes that
"some acts of Dishonesty are not constitutive of an offense so grave as to
warrant the imposition of the penalty of dismissal from the service." 92
Recognizing the attendant circumstances in the offense of dishonesty, the
Civil Service Commission issued parameters "in order to guide the
disciplining authority in charging the proper offense"93 and to impose the
proper penalty.
The resolution classifies dishonesty in three gradations: (1) serious; (2) less
serious; and (3) simple. Serious dishonesty is punishable by
dismissal.94 Less serious dishonesty is punishable by suspension for six
months and one day to one year for the first offense and dismissal for the
second offense.95 Simple dishonesty is punishable by suspension of one
month and one day to six months for the first offense, six months and one
day to one year for the second offense, and dismissal for the third offense.96
The medical certificate respondent submitted to support her application for
sick leave was falsified. The question remains as to whether this act could be
considered serious dishonesty, less serious dishonesty, or simple
dishonesty.
According to the Civil Service Commission’s finding in its resolution:
In the instant case, the prosecution was able to establish that the medical
certificate submitted by Salvaña was spurious or not genuine as the
physician-signatory therein, Dr. Blanco[,] testified that she did not
examine/treat the appellant nor did she issue a medical certificate on May
15, 2006 since she was on sick leave of absence on that particular day.
Worthy [of] mention is that the appellant never bothered to submit any
evidence, documentary or otherwise, to rebut the testimony of Blanco.
Thus, the Commission rules and so holds that the appellant is liable for
Dishonesty but applying the aforementioned CSC Resolution No. 06-0538,
her dishonest act would be classified only as Simple Dishonesty as the same
did not cause damage or prejudice to the government and had no direct
relation to or did not involve the duties and responsibilities of the appellant.
The same is true with the falsification she committed, where the information
falsified was not related to her employment.97 (Emphasis supplied)
In Cuerdo v. Commission on Audit,98 this court previously ruled that "it is the
general policy of this Court to sustain the decisions of administrative
authorities ‘not only on the basis of the doctrine of separation of powers but
also for their presumed knowledge ability and even expertise in the laws they
are entrusted to enforce.’"99 The same case also stated that:
. . . . we reaffirmed the oft-repeated rule that findings of administrative
agencies are generally accorded not only respect but also finality when the
decision and order . . . are not tainted with unfairness or arbitrariness that
would amount to abuse of discretion or lack of jurisdiction. The findings off
acts must be respected, so long as they are supported by substantial
evidence even if not overwhelming or preponderant.100
Petitioner insists that respondent committed serious dishonesty when she
submitted the falsified medical certificate. Under Section 3 of Resolution No.
06-0538, serious dishonesty comprises the following acts:
Section 3. Serious Dishonesty. – The presence of any one of the following
attendant circumstances in the commission of the dishonest act would
constitute the offense of Serious Dishonesty:
a. The dishonest act causes serious damage and grave prejudice to
the government.
b. The respondent gravely abused his authority in order to commit
the dishonest act.
c. Where the respondent is an accountable officer, the dishonest act
directly involves property, accountable forms or money for which he
is directly accountable and the respondent shows an intent to commit
material gain, graft and corruption.
d. The dishonest act exhibits moral depravity on the part of the
respondent.
e. The respondent employed fraud and/or falsification of official
documents in the commission of the dishonest act related to his/her
employment.
f. The dishonest act was committed several times or in various
occasions.
g. The dishonest act involves a Civil Service examination, irregularity
or fake Civil Service eligibility such as, but not limited to,
impersonation, cheating and use of crib sheets.
h. Other analogous circumstances. (Emphasis supplied)
Simple dishonesty, on the other hand, comprises the following offenses:
Section 5. The presence of any of the following attendant circumstances in
the commission of the dishonest act would constitute the offense of Simple
Dishonesty:
a. The dishonest act did not cause damage or prejudice to the
government.
b. The dishonest act had no direct relation to or does not involve the
duties and responsibilities of the respondent.
c. In falsification of any official document, where the information
falsified is not related to his/her employment.
d. That the dishonest act did not result in any gain or benefit to the
offender.
e. Other analogous circumstances. (Emphasis supplied)
This court previously ruled that "[f]alsification of an official document, as an
administrative offense, is knowingly making false statements in official or
public documents."101 Respondent, in her defense, states that she merely
relied on her Health Maintenance Organization’s (HMO) advice that it was
going to issue her a medical certificate after she had gone to the hospital
complaining of hypertension.102 She maintains that she did not know that her
medical certificate was falsified. We do not find this defense credible.
Respondent knew that she was not examined by Dr. Blanco, the medical
certificate’s signatory. She knew that she would not be able to fully attest to
the truthfulness of the information in the certificate. Despite this, she still
submitted the certificate in support of her application for leave.
The Civil Service Commission, however, found that the medical certificate
was falsified. Dr. Blanco repudiated the certificate. Respondent did not
present any evidence to defend its validity. Her application for sick leave,
therefore, should not have been granted since it was unaccompanied by the
proper documents. The Commission correctly found respondent guilty of
dishonesty.
However, it would be wrong to classify this offense as simple dishonesty.
By law, all employees in the civil service are entitled to leave of absence for a
certain number of days, with or without pay. 103 Under Section 1, Rule XVI of
the Omnibus Rules Implementing Book V of the Administrative Code,
government employees are entitled to 15 days of sick leave annually with full
pay.
The grant of sick leave with pay is an exception to the principle of "no work,
no pay," i.e., entitlement to compensation only upon actual service rendered.
As such, applications for leave must be properly filled out and filed
accordingly. Section 16, Rule XVI of the Omnibus Rules Implementing Book
V of the Administrative Code provides the rules for an application for sick
leave:
SECTION 16. All applications for sick leaves of absence for one full day or
more shall be on the prescribed form and shall be filed immediately upon the
employee's return from such leave. Notice of absence, however, should be
sent to the immediate supervisor and/or to the office head. Application for
sick leave in excess of five days shall be accompanied by a proper medical
certificate.
Respondent’s application for sick leave, if approved, would allow her to be
absent from work without any deductions from her salary. Being a
government employee, respondent would have received her salaries coming
from government funds.
Since her application for sick leave was supported by a false medical
certificate, it would have been improperly filed, which made all of her
absences during this period unauthorized. The receipt, therefore, of her
salaries during this period would be tantamount to causing damage or
prejudice to the government since she would have received compensation
she was not entitled to receive.
This act of causing damage or prejudice, however, cannot be classified as
serious since the information falsified had no direct relation to her
employment. Whether or not she was suffering from hypertension is a matter
that has no relation to the functions of her office.
Given these circumstances, the offense committed can be properly identified
as less serious dishonesty. Under Section 4 of Resolution No. 06-0538, less
serious dishonesty is classified by the following acts:
Section 4. The presence of any one of the following attendant circumstances
in the commission of the dishonest act would constitute the offense of Less
Serious Dishonesty:
a. The dishonest act caused damage and prejudice to the
government which is not so serious as to qualify under the
immediately preceding classification.
b. The respondent did not take advantage of his/her position in
committing the dishonest act.
c. Other analogous circumstances. (Emphasis supplied)
We hold, therefore, that respondent Atty. Aurora A. Salvaña is guilty of less
serious dishonesty.
A final note
The records showed that respondent tendered her irrevocable resignation on
August 5, 2006. Petitioner’s acceptance of respondent’s resignation was not
mentioned in any of the pleadings. However, the resolution by the Fact-
finding Committee stated that "[o]n 16 August 2006, the Office of the
Administrator received the resignation."104On the issue of whether
respondent’s resignation mooted its proceedings, it concluded that:
[I]n the response of the Administrator to the letter of resignation filed by
Respondent there was no unconditional acceptance of the same. In fact it
was specified therein that her resignation is "without prejudice to any
appropriate action on any malfeasance or misfeasance committed during her
tenure[."]There can [sic] be no other conclusion from the above that her
resignation does not prevent the administration from proceeding with any
charge/s appropriate under the circumstances.105 (Emphasis in the original)
Resignation from public office, to be effective, requires the acceptance of the
proper government authority. In Republic v. Singun,106 this court stated:
Resignation implies an expression of the incumbent in some form, express or
implied, of the intention to surrender, renounce, and relinquish the office and
the acceptance by competent and lawful authority. To constitute a complete
and operative resignation from public office, there must be: (a) an intention to
relinquish a part of the term; (b) an act of relinquishment; and (c) an
acceptance by the proper authority.
....
In our jurisdiction, acceptance is necessary for resignation of a public officer
to be operative and effective. Without acceptance, resignation is nothing and
the officer remains in office. Resignation to be effective must be accepted by
competent authority, either in terms or by something tantamount to an
acceptance, such as the appointment of the successor. A public officer
cannot abandon his office before his resignation is accepted, otherwise the
officer is subject to the penal provisions of Article 238 of the Revised Penal
Code. The final or conclusive act of a resignation’s acceptance is the notice
of acceptance. The incumbent official would not be in a position to determine
the acceptance of his resignation unless he had been duly notified
therefor.107 (Emphasis supplied)
If there was evidence to show that petitioner did not, in fact, accept
respondent’s resignation, her resignation would have been ineffective.
Respondent’s continued absence from her post would have been deemed
abandonment from her office, of which she could be criminally charged.
Although the response of Administrator Robles was not attached to the
record, it can be concluded from the resolution of the Fact-finding Committee
that he accepted the resignation, albeit with the qualification that it be
"without prejudice to any appropriate action on any malfeasance or
misfeasance committed during her tenure."108
The qualified acceptance of Administrator Robles, however, did not affect the
validity of respondent’s resignation.1âwphi1Section 1, Rule XII of the Civil
Service Commission Memorandum Circular No. 40, series of 1998, as
amended by Civil Service Commission Memorandum Circular No. 15, series
of 1999, requires:
WHEREFORE, the petition is GRANTED. The decision dated November 11,
2009 of the Court of Appeals in CA-G.R. SP. No. 104225 and Resolution No.
071364 dated July 18, 2007 of the Civil Service Commission is AFFIRMED
with the MODIFICATION that respondent, Atty. Aurora A. Salvaña, is found
guilty of Less Serious Dishonesty. The Civil Service Commission is
DIRECTED to attach a copy of this decision to respondent's permanent
employment record.
Let a copy of this decision be given to the Office of the Bar Confidant to
initiate the proper disciplinary action against respondent Atty. Aurora A.
Salvaña.

Sec. 1. Resignation. The following documents shall be submitted to the SO ORDERED.

Commission for record purposes:
MARVIC MARIO VICTOR F. LEONEN
a. The voluntary written notice of the employee informing the Associate Justice
appointing authority that he is relinquishing his position and the
efffectivity date of said resignation; and, WE CONCUR:

b. The acceptance of resignation in writing by the agency head or MARIA LOURDES P. A. SERENO
appointing authority which shall indicate the date of effectivity of the Chief Justice
resignation.

An officer or employee under investigation may be allowed to resign pending PRESBITERO J. VELASCO,
ANTONIO T. CARPIO
decision of his case without prejudice to the continuation of the proceedings JR.
Associate Justice
until finally terminated. Associate Justice

The qualification placed by Administrator Robles on his acceptance does not

TERESITA J. LEONARDO-DE
make respondent’s resignation any less valid. The rules and regulations ARTURO D. BRION
allow the acceptance of resignations while the administrative case is pending CASTRO
Associate Justice
provided that the proceedings will still continue. Associate Justice

We also note that the unauthorized absences were incurred after the DIOSDADO M. PERALTA LUCAS P. BERSAMIN
issuance of Office Order No. 119. Atrespondent’s refusal to comply, she was Associate Justice Associate Justice
administratively charged, which prompted her resignation from office. If there
were irregularities in the issuance of Office Order No. 119, what respondent
should have done would be to occupy the new position and then file the MARIANO C. DEL CASTILLO MARTIN S. VILLARAMA, JR.
proper remedies. She should not have defied the orders of her superiors. Associate Justice Associate Justice

Because of her resignation on August 5, 2006, any modification as to the

service of her suspension became moot. Her permanent employment record, JOSE PORTUGAL PEREZ JOSE CATRAL MENDOZA
however, must reflect the modified penalty. Considering that she is also a Associate Justice Associate Justice
member of the Bar, this court furnishes the Office of the Bar Confidant with a
copy of this decision to initiate the proper disciplinary action against
respondent.
 respective oral and documentary evidence introduced by the parties,
ESTELA M. PERLAS-
BIENVENIDO L. REYES it appears conclusive that plaintiff, before the school year 1948-1949
BERNABE
Associate Justice took up preparatory law course in the defendant University. After
Associate Justice finishing his preparatory law course plaintiff enrolled in the College of
Law of the defendant from the school year 1948-1949. Plaintiff
finished his law studies in the defendant university up to and
CERTIFICATION including the first semester of the fourth year. During all the school
years in which plaintiff was studying law in defendant law college,
I certify that the conclusions in the above Decision had been reached in Francisco R. Capistrano, brother of the mother of plaintiff, was the
dean of the College of Law and legal counsel of the defendant
consultation before the case was assigned to the writer of the opinion of the
university. Plaintiff enrolled for the last semester of his law studies in
court.
the defendant university but failed to pay his tuition fees because his
uncle Dean Francisco R. Capistrano having severed his connection
MARIA LOURDES P. A. SERENO with defendant and having accepted the deanship and
Chief Justice chancellorship of the College of Law of Abad Santos University,
plaintiff left the defendant's law college and enrolled for the last
semester of his fourth year law in the college of law of the Abad
Santos University graduating from the college of law of the latter
university. Plaintiff, during all the time he was studying law in
Republic of the Philippines defendant university was awarded scholarship grants, for scholastic
SUPREME COURT merit, so that his semestral tuition fees were returned to him after the
Manila ends of semester and when his scholarship grants were awarded to
him. The whole amount of tuition fees paid by plaintiff to defendant
EN BANC and refunded to him by the latter from the first semester up to and
including the first semester of his last year in the college of law or the
fourth year, is in total P1,033.87. After graduating in law from Abad
G.R. No. L-15127 May 30, 1961
Santos University he applied to take the bar examination. To secure
permission to take the bar he needed the transcripts of his records in
EMETERIO CUI, plaintiff-appellant, defendant Arellano University. Plaintiff petitioned the latter to issue to
vs. him the needed transcripts. The defendant refused until after he had
ARELLANO UNIVERSITY, defendant-appellee. paid back the P1,033 87 which defendant refunded to him as above
stated. As he could not take the bar examination without those
G.A.S. Sipin, Jr., for plaintiff-appellant. transcripts, plaintiff paid to defendant the said sum under protest.
E. Voltaire Garcia for defendant-appellee. This is the sum which plaintiff seeks to recover from defendant in this
case.
CONCEPCION, J.:
Before defendant awarded to plaintiff the scholarship grants as
Appeal by plaintiff Emeterio Cui from a decision of the Court of First Instance above stated, he was made to sign the following contract covenant
of Manila, absolving defendant Arellano University from plaintiff's complaint, and agreement:
with costs against the plaintiff, and dismissing defendant's counter claim, for
insufficiency of proof thereon. "In consideration of the scholarship granted to me by the University, I
hereby waive my right to transfer to another school without having
In the language of the decision appealed from: refunded to the University (defendant) the equivalent of my
scholarship cash.
The essential facts of this case are short and undisputed. As
established by the agreement of facts Exhibits X and by the
 (Sgd.) Emeterio Cui".
It is admitted that, on August 16, 1949, the Director of Private Schools issued
Memorandum No. 38, series of 1949, on the subject of "Scholarship,"
addressed to "All heads of private schools, colleges and universities,"
reading:
1. School catalogs and prospectuses submitted to this, Bureau show
that some schools offer full or partial scholarships to deserving
students — for excellence in scholarship or for leadership in extra-
curricular activities. Such inducements to poor but gifted students
should be encouraged. But to stipulate the condition that such
scholarships are good only if the students concerned continue in the
same school nullifies the principle of merit in the award of these
scholarships.
2. When students are given full or partial scholarships, it is
understood that such scholarships are merited and earned. The
amount in tuition and other fees corresponding to these scholarships
should not be subsequently charged to the recipient students when
they decide to quit school or to transfer to another institution.
Scholarships should not be offered merely to attract and keep
students in a school.
3. Several complaints have actually been received from students
who have enjoyed scholarships, full or partial, to the effect that they
could not transfer to other schools since their credentials would not
be released unless they would pay the fees corresponding to the
period of the scholarships. Where the Bureau believes that the right
of the student to transfer is being denied on this ground, it reserves
the right to authorize such transfer.
that defendant herein received a copy of this memorandum; that plaintiff
asked the Bureau of Private Schools to pass upon the issue on his right to
secure the transcript of his record in defendant University, without being
required to refund the sum of P1,033.87; that the Bureau of Private Schools
upheld the position taken by the plaintiff and so advised the defendant; and
that, this notwithstanding, the latter refused to issue said transcript of
records, unless said refund were made, and even recommended to said
Bureau that it issue a written order directing the defendant to release said
transcript of record, "so that the case may be presented to the court for
judicial action." As above stated, plaintiff was, accordingly, constrained to
pay, and did pay under protest, said sum of P1,033.87, in order that he could
take the bar examination in 1953. Subsequently, he brought this action for
the recovery of said amount, aside from P2,000 as moral damages, P500 as
exemplary damages, P2,000 as attorney's fees, and P500 as expenses of
litigation.
In its answer, defendant reiterated the stand it took, vis-a-vis the Bureau of
Private Schools, namely, that the provisions of its contract with plaintiff are
valid and binding and that the memorandum above-referred to is null and
void. It, likewise, set up a counterclaim for P10,000.00 as damages, and
P3,000 as attorney's fees.
The issue in this case is whether the above quoted provision of the contract
between plaintiff and the defendant, whereby the former waived his right to
transfer to another school without refunding to the latter the equivalent of his
scholarships in cash, is valid or not. The lower court resolved this question in
the affirmative, upon the ground that the aforementioned memorandum of the
Director of Private Schools is not a law; that the provisions thereof are
advisory, not mandatory in nature; and that, although the contractual
provision "may be unethical, yet it was more unethical for plaintiff to quit
studying with the defendant without good reasons and simply because he
wanted to follow the example of his uncle." Moreover, defendant maintains in
its brief that the aforementioned memorandum of the Director of Private
Schools is null and void because said officer had no authority to issue it, and
because it had been neither approved by the corresponding department
head nor published in the official gazette.
We do not deem it necessary or advisable to consider as the lower court did,
the question whether plaintiff had sufficient reasons or not to transfer from
defendant University to the Abad Santos University. The nature of the issue
before us, and its far reaching effects, transcend personal equations and
demand a determination of the case from a high impersonal plane. Neither
do we deem it essential to pass upon the validity of said Memorandum No.
38, for, regardless of the same, we are of the opinion that the stipulation in
question is contrary to public policy and, hence, null and void. The aforesaid
memorandum merely incorporates a sound principle of public policy. As the
Director of Private Schools correctly pointed, out in his letter, Exhibit B, to the
defendant,
There is one more point that merits refutation and that is whether or
not the contract entered into between Cui and Arellano University on
September 10, 1951 was void as against public policy. In the case of
Zeigel vs. Illinois Trust and Savings Bank, 245 Ill. 180, 19 Ann. Case
127, the court said: 'In determining a public policy of the state, courts
are limited to a consideration of the Constitution, the judicial
decisions, the statutes, and the practice of government officers.' It
might take more than a government bureau or office to lay down or
establish a public policy, as alleged in your communication, but
courts consider the practices of government officials as one of the
 four factors in determining a public policy of the state. It has been
consistently held in America that under the principles relating to the
doctrine of public policy, as applied to the law of contracts, courts of
justice will not recognize or uphold a transaction which its object,
operation, or tendency is calculated to be prejudicial to the public
welfare, to sound morality or to civic honesty (Ritter vs. Mutual Life
Ins. Co., 169 U.S. 139; Heding vs. Gallaghere 64 L.R.A. 811; Veazy
vs. Allen, 173 N.Y. 359). If Arellano University understood clearly the
real essence of scholarships and the motives which prompted this
office to issue Memorandum No. 38, s. 1949, it should have not
entered into a contract of waiver with Cui on September 10, 1951,
which is a direct violation of our Memorandum and an open
challenge to the authority of the Director of Private Schools because
the contract was repugnant to sound morality and civic honesty. And
finally, in Gabriel vs. Monte de Piedad, Off. Gazette Supp. Dec. 6,
1941, p. 67 we read: 'In order to declare a contract void as against
public policy, a court must find that the contract as to consideration
or the thing to be done, contravenes some established interest of
society, or is inconsistent with sound policy and good moralsor tends
clearly to undermine the security of individual rights. The policy
enunciated in Memorandum No. 38, s. 1949 is sound
policy. Scholarship are awarded in recognition of merit not to keep
outstanding students in school to bolster its prestige. In the
understanding of that university scholarships award is a business
scheme designed to increase the business potential of an education
institution. Thus conceived it is not only inconsistent with sound
policy but also good morals. But what is morals? Manresa has this
definition. It is good customs; those generally accepted principles of
morality which have received some kind of social and practical
confirmation. The practice of awarding scholarships to attract
students and keep them in school is not good customs nor has it
received some kind of social and practical confirmation except in
some private institutions as in Arellano University. The University of
the Philippines which implements Section 5 of Article XIV of the
Constitution with reference to the giving of free scholarships to gifted
children, does not require scholars to reimburse the corresponding
value of the scholarships if they transfer to other schools. So also
with the leading colleges and universities of the United States after
which our educational practices or policies are patterned. In these
institutions scholarships are granted not to attract and to keep
brilliant students in school for their propaganda mine but to reward
merit or help gifted students in whom society has an established
interest or a first lien. (Emphasis supplied.)
WHEREFORE, the decision appealed from is hereby reversed and another
one shall be entered sentencing the defendant to pay to the plaintiff the sum
of P1,033.87, with interest thereon at the legal rate from September 1, 1954,
date of the institution of this case, as well as the costs, and dismissing
defendant's counterclaim. It is so ordered.
Bengzon, C.J., Padilla, Labrador, Reyes, J.B.L., Barrera, Parades, Dizon, De
Leon and Natividad, JJ., concur.
Bautista Angelo, J., reserves his vote.
Republic of the Philippines
SUPREME COURT
Manila
EN BANC
G.R. No. 79269 June 5, 1991
PEOPLE OF THE PHILIPPINES, petitioner,
vs.
HON. PROCORO J. DONATO, in his official capacity as Presiding
Judge, Regional Trial Court, Branch XII, Manila; RODOLFO C. SALAS,
alias Commander Bilog, respondents.
The Solicitor General for petitioner.
Jose Suarez, Romeo Capulong, Efren Mercado and Movement of Attorneys
for Brotherhood, Integrity, Nationalism, Inc. (MABINI) for Rodolfo Salas.
DAVIDE, JR., J.:
The People of the Philippines, through the Chief State Prosecutor of the
Department of Justice, the City Fiscal of Manila and the Judge Advocate
General, filed the instant petition for certiorari and prohibition, with a prayer
for restraining order/preliminary injunction, to set aside the order of
respondent Judge dated July 7, 1987 granting bail to the accused Rodolfo
Salas alias "Commander Bilog" in Criminal Case No. 86-48926 for
Rebellion,1 and the subsequent Order dated July 30, 1987 granting the
motion for reconsideration of 16 July 1987 by increasing the bail bond from
P30,000.00 to P50,000.00 but denying petitioner's supplemental motion for
reconsideration of July 17, 1987 which asked the court to allow petitioner to
present evidence in support of its prayer for a reconsideration of the order of
7 July 1987.
The pivotal issues presented before Us are whether the right to bail may,
under certain circumstances, be denied to a person who is charged with an
otherwise bailable offense, and whether such right may be waived.
The following are the antecedents of this petition:
In the original Information2 filed on 2 October 1986 in Criminal Case No. 86-
48926 of the Regional Trial Court of Manila, later amended in an Amended
Information3 which was filed on 24 October 1986, private respondent Rodolfo
Salas, alias "Commander Bilog", and his co-accused were charged for the
crime of rebellion under Article 134, in relation to Article 135, of the Revised
Penal Code allegedly committed as follows:
That in or about 1968 and for some time before said year and
continuously thereafter until the present time, in the City of Manila
and elsewhere in the Philippines, the Communist Party of the
Philippines, its military arm, the New People's Army, its mass
infiltration network, the National Democratic Front with its other
subordinate organizations and fronts, have, under the direction and
control of said organizations' leaders, among whom are the
aforenamed accused, and with the aid, participation or support of
members and followers whose whereabouts and identities are still
unknown, risen publicly and taken arms throughout the country
against the Government of the Republic of the Philippines for the
purpose of overthrowing the present Government, the seat of which
is in the City of Manila, or of removing from the allegiance to that
government and its laws, the country's territory or part of it;
That from 1970 to the present, the above-named accused in their
capacities as leaders of the aforenamed organizations, in conspiracy
with, and in support of the cause of, the organizations
aforementioned, engaged themselves in war against the forces of the
government, destroying property or committing serious violence, and
other acts in the pursuit of their unlawful purpose, such as . . .
(then follows the enumeration of specific acts committed before and
after February 1986).
At the time the Information was filed the private respondent and his co-
accused were in military custody following their arrest on 29 September 1986
at the Philippine General Hospital, Taft Ave., Manila; he had earlier escaped
from military detention and a cash reward of P250,000.00 was offered for his
capture.4
A day after the filing of the original information, or on 3 October 1986, a
petition for habeas corpus for private respondent and his co-accused was
filed with this Court5 which, as shall hereafter be discussed in detail, was
dismissed in Our resolution of 16 October 1986 on the basis of the
agreement of the parties under which herein private respondent "will remain
in legal custody and will face trial before the court having custody over his
person" and the warrants for the arrest of his co-accused are deemed
recalled and they shall be immediately released but shall submit themselves
to the court having jurisdiction over their person.
On November 7, 1986 , private respondent filed with the court below a
Motion to Quash the Information alleging that: (a) the facts alleged do not
constitute an offense; (b) the Court has no jurisdiction over the offense
charged; (c) the Court has no jurisdiction over the persons of the defendants;
and (d) the criminal action or liability has been extinguished, 6 to which
petitioner filed an Opposition7 citing, among other grounds, the fact that in the
Joint Manifestation and Motion dated October 14, 1986, in G.R. No. 76009,
private respondent categorically conceded that:
xxx xxx xxx
Par. 2 (B) — Petitioner Rodolfo Salas will remain in legal custody
and face trial before the court having custody over his person.
In his Order of March 6, 1987,8 respondent Judge denied the motion to
quash.
Instead of asking for a reconsideration of said Order, private respondent filed
on 9 May 1987 a petition for bail,9which herein petitioner opposed in an
Opposition filed on 27 May 198710 on the ground that since rebellion became
a capital offense under the provisions of P.D. Nos. 1996, 942 and 1834,
which amended Article 135 of the Revised Penal Code, by imposing the
penalty of reclusion perpetua to death on those who promote, maintain, or
head a rebellion the accused is no longer entitled to bail as evidence of his
guilt is strong.
On 5 June 1987 the President issued Executive Order No. 187 repealing,
among others, P.D. Nos. 1996, 942 and 1834 and restoring to full force and
effect Article 135 of the Revised Penal Code as it existed before the
amendatory decrees. Thus, the original penalty for rebellion, prision
mayor and a fine not to exceed P20,000.00, was restored.
Executive Order No. 187 was published in the Official Gazette in its June 15,
1987 issue (Vol. 83, No. 24) which was officially released for circulation on
June 26, 1987.
In his Order of 7 July 198711 respondent Judge, taking into consideration
Executive Order No. 187, granted private respondent's petition for bail, fixed
the bail bond at P30,000.00 and imposed upon private respondent the
additional condition that he shall report to the court once every two (2)
months within the first ten (10) days of every period thereof. In granting the
petition respondent Judge stated:
. . . There is no more debate that with the effectivity of Executive
Order No. 187, the offense of rebellion, for which accused Rodolfo
Salas is herein charged, is now punishable with the penalty of prision
mayor and a fine not exceeding P20,000.00, which makes it now
bailable pursuant to Section 13, Article III, 1986 Constitution and
Section 3, Rule 114, 1985 Rules of Criminal Procedure. Unlike the
old rule, bail is now a matter of right in non-capital offenses before
final judgment. This is very evident upon a reading of Section 3, Rule
114, aforementioned, in relation to Section 21, same rule. In view,
therefore, of the present circumstances in this case, said accused-
applicant is now entitled to bail as a matter of right inasmuch as the
crime of rebellion ceased to be a capital offense.
As to the contention of herein petitioner that it would be dangerous to grant
bail to private respondent considering his stature in the CPP-NPA hierarchy,
whose ultimate and overriding goal is to wipe out all vestiges of our
democracy and to replace it with their ideology, and that his release would
allow his return to his organization to direct its armed struggle to topple the
government before whose courts he invokes his constitutional right to bail,
respondent Judge replied:
True, there now appears a clash between the accused's
constitutional right to bail in a non-capital offense, which right is
guaranteed in the Bill of Rights and, to quote again the prosecution,
"the existence of the government that bestows the right, the
paramount interest of the state." Suffice to state that the Bill of
Rights, one of which is the right to bail, is a "declaration of the rights
of the individual, civil, political and social and economic, guaranteed
by the Constitution against impairment or intrusion by any form of
governmental action. Emphasis is placed on the dignity of man and
the worth of individual. There is recognition of certain inherent and
inalienable rights of the individual, which the government is
prohibited from violating" (Quisumbing-Fernando, Philippine
Constitutional Law, 1984 Edition, p. 77). To this Court, in case of
such conflict as now pictured by the prosecution, the same should be
resolved in favor of the individual who, in the eyes of the law, is alone
in the assertion of his rights under the Bill of Rights as against the
State. Anyway, the government is that powerful and strong, having
the resources, manpower and the wherewithals to fight those "who
oppose, threathen (sic) and destroy a just and orderly society and its
existing civil and political institutions." The prosecution's fear may or
may not be founded that the accused may later on jump bail and
rejoin his comrades in the field to sow further disorders and anarchy
against the duly constituted authorities. But, then, such a fear can
not be a reason to deny him bail. For the law is very explicit that
when it comes to bailable offenses an accused is entitled as a matter
of light to bail. Dura est lex sed lex.
In a motion to reconsider12 the above order filed on 16 July 1987, petitioner
asked the court to increase the bail from P30,000.00 to P100,000.00 alleging
therein that per Department of Justice Circular No. 10 dated 3 July 1987, the
bail for the, provisional release of an accused should be in an amount
computed at P10,000.00 per year of imprisonment based on the medium
penalty imposable for the offense and explaining that it is recommending
P100,000.00 because the private respondent "had in the past escaped from
the custody of the military authorities and the offense for which he is charged
is not an ordinary crime, like murder, homicide or robbery, where after the
commission, the perpetrator has achieved his end" and that "the rebellious
acts are not consummated until the well-organized plan to overthrow the
government through armed struggle and replace it with an alien system
based on a foreign ideology is attained."
On 17 July 1987, petitioner filed a supplemental motion for
reconsideration13 indirectly asking the court to deny bail to the private
respondent and to allow it to present evidence in support thereof considering
the "inevitable probability that the accused will not comply with this main
condition of his bail –– to appear in court for trial," a conclusion it claims to be
buttressed "by the following facts which are widely known by the People of
the Philippines and which this Honorable Court may have judicial notice of:
1. The accused has evaded the authorities for thirteen years and was
an escapee from detention when arrested;
2. He was not arrested at his residence as he had no known
address;
3. He was using the false name "Manuel Mercado Castro" at the time
of his arrest and presented a Driver's License to substantiate his
false identity;
 4. The address he gave "Panamitan, Kawit, Cavite," turned out to be
also a false address;
5. He and his companions were on board a private vehicle with a
declared owner whose identity and address were also found to be
false;
6. Pursuant to Ministry Order No. 1-A dated 11 January 1982 , a
reward of P250,000.00 was offered and paid for his arrest,
which "clearly indicate that the accused does not entertain the slightest
intention to appear in court for trial, if released." Petitioner further argues that
the accused, who is the Chairman of the Communist Party of the Philippines
and head of its military arm, the NPA, together with his followers, are now
engaged in an open warfare and rebellion against this government and
threatens the existence of this very Court from which he now seeks
provisional release," and that while he is entitled to bail as a matter of right in
view of Executive Order No. 187 which restored the original penalty for
rebellion under Article 135 of the Revised Penal Code, yet, when the interest
of the State conflicts with that of an individual, that of the former prevails for
"the right of the State of self-preservation is paramount to any of the rights of
an individual enshrined in the Bill of Rights of the Constitution." Petitioner
further invokes precedents in the United States of America holding "that there
is no absolute constitutional barrier to detention of potentially dangerous
resident aliens pending deportation proceedings,14 and that an arrestee may
be incarcerated until trial as he presents a risk of flight; 15 and sustaining a
detention prior to trial of arrestee charged with serious felonies who are
found after an adversary hearing to pose threat to the safety of individuals
and to the community which no condition of release can dispel.16
On 30 July 1987 respondent Judge handed down the Order 17 adverted to in
the introductory portion of this decision the dispositive portion of which reads:
WHEREFORE, in the light of the foregoing considerations, the Court
finds the "supplemental" motion for reconsideration to be without
merit and hereby denies it but finds the first motion for
reconsideration to be meritorious only insofar as the amount of bail is
concerned and hereby reconsiders its Order of July 7, 1987 only to
increase the amount of bail from P30,000.00 to P50,000.00, subject
to the approval of this Court, and with the additional condition that
accused Rodolfo Salas shall report to the court once every two (2)
months within the first ten (10) days of every period thereof
(Almendras vs. Villaluz, et al., L-31665, August 6, 1975, 66 SCRA
58).
In denying the supplemental motion for reconsideration the respondent
Judge took into account the "sudden turn-about" on the part of the petitioner
in that a day earlier it filed a motion for reconsideration wherein it conceded
the right of the private respondent to bail but merely asked to increase the
amount of bail; observed that it is only a reiteration of arguments in its
opposition to the petition for bail of 25 May 1987; asserted that the American
precedents are not applicable since the cases involved deportation of aliens
and, moreover, the U.S. Federal Constitution does not contain a proviso on
the right of an accused to bail in bailable offenses, but only an injunction
against excessive bail; and quoted the concurring opinion of the late Justice
Pedro Tuason in the cases of Nava, et al. vs. Gatmaitan, L-4853, Hernandez
vs. Montesa, L-4964 and Angeles vs. Abaya, L-5108, October 11, 1951, 90
Phil, 172.
Unable to agree with said Order, petitioner commenced this petition
submitting therein the following issues:
THE HONORABLE RESPONDENT JUDGE PROCORO J. DONATO
ACTED WITH GRAVE ABUSE OF DISCRETION AND IN EXCESS
OF HIS JURISDICTION, AND IN TOTAL DISREGARD OF THE
PREVAILING REALITIES, WHEN HE DENIED PETITIONER'S
SUPPLEMENTAL MOTION FOR RECONSIDERATION WITH
PRAYER TO BE GIVEN THE OPPORTUNITY TO ADDUCE
EVIDENCE IN SUPPORT OF ITS OPPOSITION TO THE GRANT
OF BAIL TO THE RESPONDENT RODOLFO SALAS.
THE HONORABLE RESPONDENT JUDGE PROCORO J. DONATO
ACTED WITH GRAVE ABUSE OF DISCRETION AND IN EXCESS
OF HIS JURISDICTION WHEN HE GRANTED BAIL TO THE
RESPONDENT RODOLFO SALAS.
in support of which petitioner argues that private respondent is estopped
from invoking his right to bail, having expressly waived it in G.R. No. 76009
when he agreed to "remain in legal custody and face trial before the court
having custody of his person" in consideration of the recall of the warrant of
arrest for his co-petitioners Josefina Cruz and Jose Concepcion; and the
right to bail, even in non-capital offenses, is not absolute when there is prima
facie evidence that the accused is a serious threat to the very existence of
the State, in which case the prosecution must be allowed to present evidence
for the denial of bail. Consequently, respondent Judge acted with grave
abuse of discretion when he did not allow petitioner to present all the
evidence it may desire to support its prayer for the denial of bail and when he
declared that the State has forfeited its right to do so since during all the time
that the petition for bail was pending, it never manifested, much less hinted,
its intention to adduce such evidence. And that even if release on bail may
be allowed, respondent judge, in fixing the amount of bail at P50,000.00
(originally P30,000.00 only), failed to take into account the lengthy record of
private respondents' criminal background, the gravity of the pending charge,
and the likelihood of flight.18
In Our resolution of 11 August 198719 We required the respondents to
comment on the petition and issued a Temporary Restraining Order ordering
respondent Judge to cease and desist from implementing his order of 30 July
1987 granting bail to private respondent in the amount of P50,000.00.
In his Comment filed on 27 August 1987,20 private respondent asks for the
outright dismissal of the petition and immediate lifting of the temporary
restraining order on the following grounds:
I the Memorandum for petitioner and the Comment as the Memorandum for
RESPONDENT SALAS NEVER WAIVED HIS RIGHT TO BAIL;
NEITHER IS HE ESTOPPED FROM ASSERTING SAID RIGHT. ON
THE CONTRARY IT IS PETITIONER WHO IS ESTOPPED FROM
RAISING THE SAID ISSUE FOR THE FIRST TIME ON APPEAL.
II
RESPONDENT SALAS ENJOYS NOT ONLY THE
CONSTITUTIONAL RIGHT TO BE PRESUMED INNOCENT BUT
ALSO THE RIGHT TO BAIL.
III
RESPONDENT SALAS IS NOT CHARGED WITH A CAPITAL
OFFENSE (RECLUSION PERPETUA), HENCE HE HAS THE
RIGHT TO BAIL AS MANDATED BY THE CONSTITUTION.
IV
THE ORDER OF JULY 30, 1987 DENYING PETITIONER
OPPORTUNITY TO PRESENT EVIDENCE IS CORRECT.
PETITIONER'S ALLEGED RIGHT TO PRESENT EVIDENCE IS
NON-EXISTENT AND/OR HAD BEEN WAIVED.
V penalty imposable for the offense for which the private respondent was
THE ISSUANCE OF A TEMPORARY RESTRAINING ORDER IN
THIS CASE VIOLATES NOT ONLY RESPONDENT SALAS' RIGHT
TO BAIL BUT ALSO HIS OTHER CONSTITUTIONAL RIGHT TO
DUE PROCESS.
We required the petitioner to reply to the comment of private
respondent.21 The reply was filed on 18 September 1987.22
In Our resolution of 15 October 198723 We gave due course to the petition
and required the parties to file simultaneously their memoranda within twenty
days from notice.
In their respective manifestations and motions dated 5 November24 and 23
November 198725 petitioner and private respondents asked to be excused
from filing their Memoranda and that the petition and reply be considered as
private respondent, which We granted in Our resolution of 19 November
198726 and 1 December 1987,27 respectively.
In Our resolution of 14 September 1989 We required the Solicitor General to
express his stand on the issues raised in this petitions,28 which he complied
with by filing his Manifestation on 30 May 199029 wherein he manifests that
he supports the petition and submits that the Order of respondent Judge of
July 7, July 17 and July 30, 1987 should be annulled and set aside asserting
that private respondent had waived the light to bail in view of the agreement
in G.R. No. 76009; that granting bail to him is accepting wide-eyed his
undertaking which he is sure to break; in determining bail, the primary
consideration is to insure the attendance of the accused at the trial of the
case against him which would be frustrated by the "almost certainty that
respondent Salas will lump bail of whatever amount"; and application of the
guidelines provided for in Section 10 of Rule 114, 1985 Rules on Criminal
Procedure on the amount of bail dictates denial of bail to private respondent.
The Solicitor General likewise maintains that the right of the petitioner to
hearing on the application of private respondent for bail cannot be denied by
respondent Judge.
And now on the issues presented in this case.
I.
Unquestionably, at the time the original and the amended Informations for
rebellion and the application for bail were filed before the court below the
charged was reclusion perpetua to death. During the pendency of the
application for bail Executive Order No. 187 was issued by the President, by
virtue of which the penalty for rebellion as originally provided for in Article
135 of the Revised Penal Code was restored. The restored law was the
governing law at the time the respondent court resolved the petition for bail.
We agree with the respondent court that bail cannot be denied to the private
respondent for he is charged with the crime of rebellion as defined in Article
134 of the Revised Penal Code to which is attached the penalty of prision
mayor and a fine not exceeding P20,000.00.30 It is, therefore, a bailable
offense under Section 13 of Article III of the 1987 Constitution which provides
thus:
Sec. 13. All persons, except those charged with offenses punishable
by reclusion perpetua when evidence of guilt is strong, shall, before
conviction, be bailable by sufficient sureties, or be released on
recognizance as may be prescribed by law. The right to bail shall not
be impaired even when the privilege of the writ of habeas corpus is
suspended. Excessive bail shall not be required.
Section 3, Rule 114 of the Rules of Court, as amended, also provides:
Bail, a matter of right: exception. — All persons in custody shall,
before final conviction, be entitled to bail as a matter of right, except
those charged with a capital offense or an offense which, under the
law at the time of its commission and at the time of the application for
bail, is punishable by reclusion perpetua, when evidence of guilt is
strong.
Therefore, before conviction bail is either a matter of right or of discretion. It
is a matter of right when the offense charged is punishable by any penalty
lower than reclusion perpetua.31 To that extent the right is absolute.32
And so, in a similar case for rebellion, People vs. Hernandez, et al., 99 Phil.
515, despite the fact that the accused was already convicted, although
erroneously, by the trial court for the complex crime of rebellion with multiple
murders, arsons and robberies, and sentenced to life imprisonment, We
granted bail in the amount of P30,000.00 during the pendency of his appeal
from such conviction. To the vigorous stand of the People that We must deny
bail to the accused because the security of the State so requires, and
because the judgment of conviction appealed from indicates that the
evidence of guilt of Hernandez is strong, We held:
. . . Furthermore, individual freedom is too basic, too transcendental
and vital in a republican state, like ours, to be derived upon mere
general principles and abstract consideration of public safety.
Indeed, the preservation of liberty is such a major preoccupation of
our political system that, not satisfied with guaranteeing its
enjoyment in the very first paragraph of section (1) of the Bill of
Rights, the framers of our Constitution devoted paragraphs (3), (4),
(5), (6), (7), (8), (11), (12), (13), (14), (15), (16), (17), (18), and (21) of
said section (1) to the protection of several aspects of freedom.
The 1987 Constitution strengthens further the right to bail by explicitly
providing that it shall not be impaired even when the privilege of the writ
of habeas corpus is suspended. This overturns the Court's ruling in Garcia-
Padilla vs. Enrile, et al., supra., to wit:
The suspension of the privilege of the writ of habeas corpus must,
indeed, carry with it the suspension of the right to bail, if the
government's campaign to suppress the rebellion is to be enhanced
and rendered effective. If the right to bail may be demanded during
the continuance of the rebellion, and those arrested, captured and
detained in the course thereof will be released, they would, without
the least doubt, rejoin their comrades in the field thereby jeopardizing
the success of government efforts to bring to an end the invasion,
rebellion or insurrection.
Upon the other hand, if the offense charged is punishable by reclusion
perpetua bail becomes a matter of discretion. It shall be denied if the
evidence of guilt is strong. The court's discretion is limited to determining
whether or not evidence of guilt is strong.33 But once it is determined that the
evidence of guilt is not strong, bail also becomes a matter of right.
In Teehankee vs. Director of Prisons, supra., We held:
The provision on bail in our Constitution is patterned after similar
provisions contained in the Constitution of the United States and that
of many states of the Union. And it is said that:
The Constitution of the United States and the constitution of
the many states provide that all persons shall be bailable by
sufficient sureties, except for capital offenses, where the
proof is evident or the presumption of guilt is great, and,
under such provisions, bail is a matter of right which no court
or judge can properly refuse, in all cases not embraced in
the exceptions. Under such provisions bail is a matter of right
even in cases of capital offenses, unless the proof of guilt is
evident or the presumption thereof is great!34
Accordingly, the prosecution does not have the right to present
evidence for the denial of bail in the instances where bail is a matter
of right. However, in the cases where the grant of bail is
discretionary, due process requires that the prosecution must be
given an opportunity to present, within a reasonable time, all the
evidence that it may desire to introduce before the court should
resolve the motion for bail.35
We agree, however, with petitioner that it was error for the
respondent court to fix the bond at P30,000.00, then later at
P50,000.00 without hearing the prosecution. The guidelines for the
fixing of the amount of bail provided for in Section 10 of Rule 114 of
the Rules of Court are not matters left entirely to the discretion of the
court. As We stated in People vs. Dacudao, et al., 170 SCRA, 489,
495:
Certain guidelines in the fixing of a bailbond call for the
presentation of evidence and reasonable opportunity for the
prosecution to refute it. Among them are the nature and
circumstances of the crime, character and reputation of the
accused, the weight of the evidence against him, the
probability of the accused appearing at the trial, whether or
not the accused is a fugitive from justice, and whether or not
the accused is under bond in other case. . . .
In the instant case petitioner has sufficiently made out allegations
which necessitate a grant of an opportunity to be heard for the
purpose of determining the amount of bail, but not for the denial
thereof because aforesaid Section 10 of Rule 114 does not authorize
any court to deny bail.
II.
It must, however, be stressed that under the present state of the law,
rebellion is no longer punishable byprision mayor and fine not
exceeding P20,000.00. Republic Act No. 6968 approved on 24
October 1990 and which took effect after publication in at least two
newspapers of general circulation, amended, among others, Article
135 of the Revised Penal Code by increasing the penalty for
rebellion such that, as amended, it now reads:
Article 135. Penalty for rebellion, insurrection or coup d'etat.
––– Any person who promotes, maintains, or heads a
rebellion or insurrection shall suffer the penalty of reclusion
perpetua.
Any person merely participating or executing the commands
of others in a rebellion or insurrection shall suffer the penalty
of reclusion perpetua.
xxx xxx xxx
This amendatory law cannot apply to the private respondent for acts
allegedly committed prior to its effectivity. It is not favorable to him.
"Penal laws shall have a retroactive effect insofar as they favor the
person guilty of a felony, who is not a habitual criminal, as this term
is defined in Rule 5 of Article 62 of this Code, although at the time of
the publication of such laws a final sentence has been pronounced
and the convict is serving the same.36
III.
We agree with Petitioner that private respondent has, however,
waived his right to bail in G.R. No. 76009.
On 3 October 1986, or the day following the filing of the original
information in Criminal Case No. 86-48926 with the trial court, a
petition for habeas corpus for herein private respondent, and his co-
accused Josefina Cruz and Jose Concepcion, was filed with this
Court by Lucia Cruz, Aida Concepcion Paniza and Beatriz Salas
against Juan Ponce Enrile, Gen. Fidel Ramos, Brig. Gen. Renato de
Villa, Brig. Gen. Ramon Montaño, and Col. Saldajeno praying,
among others, that the petition be given due course and a writ
of habeas corpusbe issued requiring respondents to produce the
bodies of herein private respondent and his co-accused before the
Court and explain by what authority they arrested and detained them.
The following proceedings took place thereafter in said case:
1. In a resolution of 7 October 1986 We issued a writ of habeas
corpus, required respondents to make a return of the writ on or
before the close of office hours on 13 October and set the petition for
hearing on 14 October 1986 at 10:00 o'clock in the morning.
2. On 13 October 1986 respondents, through the Office of the
Solicitor General, filed a Return To The Writ of Habeas
Corpus alleging therein that private respondent and Josefina
Cruz alias "Mrs. Mercado", and Jose Milo Concepcion alias "Eugene
Zamora" were apprehended by the military on September 29, 1986
in the evening at the Philippine General Hospital Compound at Taft
Ave., Mangga being leaders or members of the Communist Party of
the Philippines, New People's Army and National Democratic Front,
organizations dedicated to the overthrow of the Government through
violent means, and having actually committed acts of rebellion under
Article 134 of the Revised Penal Code, as amended. After their
arrest they were forthwith charged with rebellion before Branch XII of
the Regional Trial Court, National Capital Region in Criminal Case
No. 86-48926 and on 3 October warrants for their arrest were issued
and respondents continue to detain them because of the warrants of
arrest and the pendency of the criminal cases against them.
Respondents further allege that, contrary to the allegation in the
petition, herein private respondent was not a member of the NDF
panel involved in peace negotiations with the Government; neither is
he and his companions Cruz and Concepcion covered by any, safe
conduct pass issued by competent authorities.
3. At the hearing on 14 October 1986 the parties informed the Court
of certain agreements reached between them. We issued a
resolution reading as follows:
When this case was called for hearing this morning,
Attorneys Romeo Capulong, Arno V. Sanidad, Efren H.
Mercado, Edgardo Pamin-tuan, Casiano Sabile, Ramon
Cura, and William Chua appeared for the petitioners with
Atty. Capulong arguing for the petitioners. Solicitor General
Sedfrey Ordonez, Assistant Solicitor General Romeo C. de
la Cruz and Trial Attorney Josue E. Villanueva appeared for
the respondents, with Solicitor General Ordoñez arguing for
the respondents.
Petitioners' counsel, Atty. Romeo Capulong, manifested in
open Court that in conformity with the agreement reached
with the government, the petition for habeas corpus will be
withdrawn with detainee Rodolfo Salas to remain under
custody, whereas his co-detainees Josefina Cruz and Jose
Milo Concepcion will be released immediately.
Solicitor General Sedfrey Ordoñez, also in open Court,
confirmed the foregoing statement made by petitioners'
counsel regarding the withdrawal of the petition for habeas
corpus, declaring that no objection will be interposed to the
immediate release of detainees Josefina Cruz and Jose Milo
Concepcion, and that no bond will be required of them, but
they will continue to face trial with their co-accused, Rodolfo
Salas; further, that they will not be rearrested on the basis of
the warrants issued by the trial court provided that they
manifest in open Court their willingness to subject
themselves to the jurisdiction of the Court and to appear in
court when their presence is required.
In addition, he stated that he is willing to confer with
petitioners' counsel today relative to the compromise
agreement that they have previously undertaken to submit.
Upon manifestation of petitioners' counsel, Atty. Romeo
Capulong, that on his oath as member of the Bar, the
detainees Josefina Cruz and Jose Milo Concepcion have
agreed to subject themselves to the jurisdiction of the trial
court, the Court ordered their immediate release.
Thereafter, the Court approved the foregoing manifestations
and statements and required both parties to SUBMIT to the
Court their compromise agreement by 4:00 o'clock this
afternoon. Teehankee, C.J., is on official leave.
4. At 3:49 o'clock in the afternoon of 14 October 1986 the parties
submitted a Joint Manifestation and Motion duly signed by Atty.
Romeo Capulong, counsel for petitioners, and Solicitor General
Sedfrey Ordoñez, Assistant Solicitor General Romeo C. de la Cruz
and Trial Attorney Josue S. Villanueva, counsel for respondents,
which reads as follows:
COME NOW petitioners and the respondents, assisted by
their respective counsel, and to this Honorable Tribunal
respectfully manifest:
1. That in the discussion between Romeo Capulong,
petitioners' counsel, and Solicitor General Sedfrey A.
Ordoñez on October 13, 1986 exploratory talks were
conducted to find out how the majesty of the law may be
preserved and human considerations may be called into
play.
2. That in the conference both counsel agreed to the
following terms of agreement:
a. The petition for habeas corpus will be withdrawn
by petitioners and Josefina Cruz and Jose Milo
Concepcion will be immediately released but shall
appear at the trial of the criminal case for rebellion
(People v. Rodolfo Salas, et al., Criminal Case No.
4886 [should be 86-48926], Regional Trial Court,
National Capital Judicial Region) filed against them
under their personal recognizance.
 b. Petitioner Rodolfo Salas will remain in legal
custody and face trial before the court having
custody over his person.
c. The warrant of arrest for the persons of Josefina
Cruz and Jose Milo Concepcion is hereby deemed
recalled in view of formal manifestation before the
Supreme Court that they will submit themselves to
the court having jurisdiction over their person.
3. That on October 14, the Solicitor General was able to
obtain the conformity of the Government to the foregoing
terms which were likewise accepted by petitioner (sic) and
their counsel of record.
4. That the two counsel submitted their oral manifestation
during the hearing on October 14 and the present
manifestation in compliance with the resolution announced in
court this morning.
WHEREFORE, it is prayed that the petition for habeas
corpus be dismissed.
5. On 16 October 1986 We issued the following resolution:
G.R. No. 76009 [In the Matter of the Petition for Habeas
Corpus of Rodolfo Salas, Josefina Cruz and Jose Milo
Concepcion, et al. v. Hon. Juan Ponce Enrile, Gen. Fidel V.
Ramos, Brig. Gen. Renato de Villa, Brig. Gen. Ramon
Montaño and Col. Virgilio Saldajeno] considering the Joint
Manifestation and Motion dated October 14, 1986 filed by
Attorneys Romeo Capulong, Arno V. Sanidad, Efren H.
Mercado and Ricardo Fernandez, Jr. as counsel for
petitioners and Solicitor General Sedfrey A. Ordonez and
Assistant Solicitor General Romeo C. de la Cruz and Trial
Attorney Josue S. Villanueva as counsel for respondents
which states that they have entered into an agreement
whereby: [a] the petition for habeas corpus will be withdrawn
by petitioners, and Josefina Cruz and Jose Milo Concepcion
will be immediately released but shall appear at the trial of
the criminal case for rebellion [People vs. Rodolfo Salas, et
al., Criminal Case No. 4886, Regional Trial Court, National
Capital Judicial Region, Branch XII, Manila], filed against
them, on their personal recognizance; [b] petitioner Rodolfo
Salas will remain in legal custody and face trial before the
court having custody over his person; and [c] the warrant of
arrest for the person of Josefina Cruz and Jose Milo
Concepcion is hereby deemed recalled in view of the formal
manifestation before this Court that they will submit
themselves to the court having jurisdiction over their person
and in view of the said agreement, the petition for habeas
corpus be dismissed, the Court Resolved to DISMISS the
petition for habeas corpusbut subject to the condition that
petitioners' lead counsel, Atty. Capulong, upon his oath as
member of the Bar, shall abide by his commitment to ensure
the appearance of Josefina Cruz and Jose Milo Concepcion
at the trial of the criminal case for rebellion filed against
them. Teehankee, C.J., is on official leave.
It is the stand of the petitioner that private respondent, "in agreeing to remain
in legal custody even during the pendency of the trial of his criminal case,
[he] has expressly waived his right to bail."37 Upon the other hand, private
respondent asserts that this claim is totally devoid of factual and legal basis,
for in their petition for habeas corpusthey precisely questioned the legality of
the arrest and the continued detention of Rodolfo Salas, Josefina Cruz and
Jose Milo Concepcion, which was not resolved by this Court or by the
compromise agreement of the parties but left open for further determination
in another proceeding. Moreover, the matter of the right to bail was neither
raised by either party nor resolved by this Court, and the legal steps promptly
taken by private respondent after the agreement was reached, like the filing
of the motion to quash on 7 November 1986 and the petition for bail on 14
May 1987, were clear and positive assertions of his statutory and
constitutional rights to be granted not only provisional but final and
permanent liberty. Finally, private respondent maintains that the term "legal
custody" as used in the Joint Manifestation and Motion simply means that
private respondent agreed to continue to be in the custody of the law or
in custodia legis and nothing else; it is not to be interpreted as waiver.
Interestingly, private respondent admits that:
"Custody" has been held to mean nothing less than actual
imprisonment. It is also defined as the detainer of a person by virtue
of a lawful authority, or the "care and possession of a thing or
person." (Bouviers Law Dictionary, Third Ed, Vol. I, pp. 741-
742 citing Smith v. Com. 59 Pa. 320 and Rolland v. Com. 82 Pa.
306)
He further admits that, in the light of Section 1 of Rule 114 of the Rules of
Court and settled jurisprudence, the "constitutional right to bail is subject to
the limitation that the person applying for admission to bail should be in the
custody of the law or otherwise deprived of his liberty."38
When the parties in G.R. No. 76009 stipulated that:
b. Petitioner Rodolfo Salas will remain in legal custody and face trial
before the court having custody over his person.
they simply meant that Rodolfo Salas, herein respondent, will remain in
actual physical custody of the court, or in actual confinement or detention, as
distinguished from the stipulation concerning his co-petitioners, who were to
be released in view of the recall of the warrants of arrest against them; they
agreed, however, "to submit themselves to the court having jurisdiction over
their persons." Note should be made of the deliberate care of the parties in
making a fine distinction between legal custody and court having custody
over the person in respect to Rodolfo Salas and court having jurisdiction over
the persons of his co-accused. Such a fine distinction was precisely intended
to emphasize the agreement that Rodolfo Salas will not be released, but
should remain in custody. Had the parties intended otherwise, or had this
been unclear to private respondent and his counsel, they should have
insisted on the use of a clearer language. It must be remembered that at the
time the parties orally manifested before this Court on 14 October 1986 the
terms and conditions of their agreement and prepared and signed the Joint
Manifestation and Motion, a warrant of arrest had already been issued by the
trial court against private respondent and his co-accused. The stipulation that
only the warrants of arrest for Josefina Cruz and Jose Milo Concepcion shall
be recalled and that only they shall be released, further confirmed the
agreement that herein petitioner shall remain in custody of the law, or
detention or confinement.
In defining bail as:
. . . the security given for the release of a person in custody of the
law, . . .
Section 1 of Rule 114 of the Revised Rules of Court admits no other meaning
or interpretation for the term "in custody of the law" than that as above
indicated. The purpose of bail is to relieve an accused from imprisonment
until his conviction and yet secure his appearance at the trial. 39 It
presupposes that the person applying for it should be in the custody of the
law or otherwise deprived of liberty.40
Consequently, having agreed in G.R. No. 76009 to remain in legal custody,
private respondent had unequivocably waived his right to bail.
But, is such waiver valid?
Article 6 of the Civil Code expressly provides:
Art. 6. Rights may be waived, unless the waiver is contrary to law,
public order, public policy, morals, or good customs, or prejudicial to
a third person with a right recognized by law.
Waiver is defined as "a voluntary and intentional relinquishment or
abandonment of a known existing legal right, advantage, benefit, claim or
privilege, which except for such waiver the party would have enjoyed; the
voluntary abandonment or surrender, by a capable person, of a right known
by him to exist, with the intent that such right shall be surrendered and such
person forever deprived of its benefit; or such conduct as warrants an
inference of the relinquishment of such right; or the intentional doing of an act
inconsistent with claiming it."41
As to what rights and privileges may be waived, the authority is settled:
. . . the doctrine of waiver extends to rights and privileges of any
character, and, since the word "waiver" covers every conceivable
right, it is the general rule that a person may waive any matter which
affects his property, and any alienable right or privilege of which he is
the owner or which belongs to him or to which he is legally entitled,
whether secured by contract, conferred with statute, or guaranteed
by constitution, provided such rights and privileges rest in the
individual, are intended for his sole benefit, do not infringe on the
rights of others, and further provided the waiver of the right or
privilege is not forbidden by law, and does not contravene public
policy; and the principle is recognized that everyone has a right to
waive, and agree to waive, the advantage of a law or rule made
solely for the benefit and protection of the individual in his private
capacity, if it can be dispensed with and relinquished without
infringing on any public right, and without detriment to the community
at large. . . .
Although the general rule is that any right or privilege conferred by
statute or guaranteed by constitution may be waived, a waiver in
derogation of a statutory right is not favored, and a waiver will be
inoperative and void if it infringes on the rights of others, or would be
against public policy or morals and the public interest may be
waived.
While it has been stated generally that all personal rights conferred
by statute and guaranteed by constitutionmay be waived, it has also
been said that constitutional provisions intended to protect property
may be waived, and even some of the constitutional rights created to
secure personal liberty are subjects of waiver.42
In Commonwealth vs. Petrillo,43 it was held:
Rights guaranteed to one accused of a crime fall naturally into two
classes: (a) those in which the state, as well as the accused, is
interested; and (b) those which are personal to the accused, which
are in the nature of personal privileges. Those of the first class
cannot be waived; those of the second may be.
It is "competent for a person to waive a right guaranteed by the Constitution,
and to consent to action which would be invalid if taken against his will." 44
This Court has recognized waivers of constitutional rights such as, for
example, the right against unreasonable searches and seizures;45 the right to
counsel and to remain silent;46 and the right to be heard.47
Even the 1987 Constitution expressly recognizes a waiver of rights
guaranteed by its Bill of Rights.1âwphi1 Section 12(l) of Article III thereof on
the right to remain silent and to have a competent and independent counsel,
preferably of his own choice states:
. . . These rights cannot be waived except in writing and in the
presence of counsel.
This provision merely particularizes the form and manner of the waiver; it,
nevertheless, clearly suggests that the other rights may be waived in some
other form or manner provided such waiver will not offend Article 6 of the
Civil Code.
We hereby rule that the right to bail is another of the constitutional rights
which can be waived. It is a right which is personal to the accused and
whose waiver would not be contrary to law, public order, public policy,
morals, or good customs, or prejudicial to a third person with a right
recognized by law.
The respondent Judge then clearly acted with grave abuse of discretion in
granting bail to the private respondent.
WHEREFORE, the Orders of respondent Judge of July 7, 1987 and July 30,
1987 in Criminal Case No. 86-48926 entitled People of the Philippines vs.
Rodolfo C. Salas alias Commander Bilog/Henry, Josefina Cruz alias Mrs.
Mercado, and Jose Milo Concepcion alias Eugene Zamora, for Rebellion, are
hereby NULLIFIED and SET ASIDE.
SO ORDERED.
Fernan, C.J., Narvasa, Melencio-Herrera, Gutierrez, Jr., Cruz, Paras,
Feliciano, Gancayco, Padilla, Bidin, Griño-Aquino, Medialdea and Regalado,
JJ., concur.
Sarmiento, J., took no part.
Republic of the Philippines
SUPREME COURT
Manila
EN BANC
G.R. No. L-24022 March 3, 1965
ILOILO PALAY AND CORN PLANTERS ASSOCIATION, INC., ET
AL., petitioners,
vs.
HON. JOSE, Y. FELICIANO, ET AL., respondents.
Jose C. Zulueta and Ramon A. Gonzales for petitioners.
Office of the Solicitor General for respondents.
BAUTISTA ANGELO, J.:
On December 26, 1964, Jose Y. Feliciano, Chairman and General Manager
of the Rice and Corn Administration, wrote the President of the Philippines
urging the immediate importation of 595,400 metric tons of rice, thru a
government agency which the President may designate, pursuant to the
recommendation of the National Economic Council as embodied in its
Resolution No. 70, series of 1964.
On December 27, 1964, the President submitted said letter to his cabinet for
consideration and on December 28, 1964, the cabinet approved the needed
importation. On January 4, 1965, the President designated the Rice and
Corn Administration as the government agency authorized to undertake the
importation pursuant to which Chairman Jose Y. Feliciano announced an
invitation to bid for said importation and set the bidding for February 1, 1965.
Considering that said importation is contrary to Republic Act 3452 which
prohibits the government from importing rice and that there is no law
appropriating funds to finance the same, the Iloilo Palay and Corn Planters
Association, Inc., together with Ramon A. Gonzales, in his capacity as
taxpayer, filed the instant petition before this Court seeking to restrain Jose
Y. Feliciano, in his capacity as Chairman and General Manager of the Rice
and Corn Administration, from conducting the bid scheduled on the date
abovementioned, and from doing any other act that may result in the
contemplated importation until further orders of this Court. For reasons that
do not clearly appear, the Secretary of Foreign Affairs and the Auditor
General were made co-respondents.
Pending decision on the merits, petitioners prayed for the issuance of a writ
of preliminary injunction, which, in due course, this Court granted upon
petitioners' filing a bond in the amount of P50,000.00. This bond having been
filed, the writ was issued on February 10, 1965.
Respondents, in their answer do not dispute the essential allegations of the
petition though they adduced reasons which justify the importation sought to
be made. They anchor the validity of the importation on the provisions of
Republic Act 2207 which, in their opinion, still stand.
It is petitioners' contention that the importation in question being undertaken
by the government even if there is a certification by the National Economic
Council that there is a shortage in the local supply of rice of such gravity as
to constitute a national emergency, is illegal because the same is prohibited
by Republic Act 3452 which, in its Section 10, provides that the importation of
rice and corn is only left to private parties upon payment of the corresponding
taxes. They claim that the Rice and Corn Administration, or any other
government agency, is prohibited from doing so.
It is true that the section above adverted to leaves the importation of rice and
corn exclusively to private parties thereby prohibiting from doing so the Rice
and Corn Administration or any other government agency, but from this it
does not follow that at present there is no law which permits the government
to undertake the importation of rice into the Philippines. And this we say
because, in our opinion, the provision of Republic Act 2207 on the matter still
stands. We refer to Section 2 of said Act wherein, among other things, it
provides that should there be an existing or imminent shortage in the local
supply of rice of such gravity as to constitute a national emergency, and this
is certified by the National Economic Council, the President of the Philippines
may authorize such importation thru any government agency that he may
designate. Here there is no dispute that the National Economic Council has
certified that there is such shortage present which, because of its gravity,
constitutes a national emergency, and acting in pursuance thereof the
President lost no time in authorizing, after consulting his cabinet, the General
Manager of the Rice and Corn Administration to immediately undertake the
needed importation in order to stave off the impending emergency. We find,
therefore, no plausible reason why the disputed importation should be
prevented as petitioners now desire.
The contention that Republic Act 2207 has already been repealed by
Republic Act 3452 is untenable in the light of the divergent provisions
obtaining in said two laws. Admittedly, Section 16 of Republic Act 3452
contains a repealing clause which provides: "All laws or parts thereof
inconsistent with the provisions of this Act are hereby repealed or modified
accordingly." The question may now be asked: what is the nature of this
repealing clause ? It is certainly not an express repealing clause because it
fails to identify or designate the Act or Acts that are intended to be repealed [
Sutherland, Statutory Construction, (1943) Vol. 1, p. 467]. Rather, it is a
clause which predicates the intended repeal upon the condition that a
substantial conflict must be found in existing and prior Acts. Such being the
case, the presumption against implied repeals and the rule against strict
construction regarding implied repeals apply ex proprio vigore. Indeed, the
legislature is presumed to know the existing laws so that, if a repeal is
intended, the proper step is to so express it [Continental Insurance Co. v.
Simpson, 8 F (2d) 439; Weber v. Bailey, 151 Ore. 2188, 51 P (2d) 832; State
v. Jackson, 120 W. Va. 521, 199 S.E. 876]. The failure to add a specific
repealing clause indicates that the intent was not to repeal any existing law
(Crawford, Construction of Statute, 1940 ed., p. 631), unless an
irreconcilable inconsistency and repugnancy exist in the terms of the new
and old laws. Here there is no such inconsistency.
To begin with, the two laws, although with a common objective, refer to
different methods applicable to different circumstances. Thus, the total
banning of importation under normal conditions as provided for in Republic
Act 2207 is one step to achieve the rice and corn sufficiency program of the
Administration. The philosophy behind the banning is that any importation of
rice during a period of sufficiency or even of a minor shortage will unduly
compete with the local producers and depress the local price which may
discourage them from raising said crop. On the other hand, a price support
program and a partial ban of rice importation as embodied in Republic Act
3452 is another step adopted to attend the sufficiency program. While the
two laws are geared towards the same ultimate objective, their methods of
approach are different; one is by a total ban of rice importation and the other
by a partial ban, the same being applicable only to the government during
normal period.
There is another area where the two laws find a common point of
reconciliation: the normalcy of the time underlying both laws. Thus, with
respect to the matter of importation Republic Act 2207 covers three different
situations: (1) when the local produce of rice is sufficient to supply local
consumption; (2) when the local produce falls short of the supply but the
shortage is not enough to constitute a national emergency; and (3) when the
shortage, on the local supply of rice is of such gravity as to constitute a
national emergency. Under the first two situations, no importation is allowed
whether by the government or by the private sector. However, in the case of
the third situation, the law authorizes importation, by the government.
Republic Act 3452, on the other hand, deals only with situations 1 and 2, but
not with. Nowhere in said law can we discern that it covers importation where
the shortage in the local supply is of such gravity as to constitute a national
emergency. In short, Republic Act 3452 only authorizes importation during
normal times, but when there is a shortage in the local supply of such gravity
as to constitute a national emergency, we have to turn to Republic Act 2207.
These two laws therefore, are not inconsistent and so implied repeal does
not ensue.
Our view that Republic Act 3452 merely contemplates importation during
normal times is bolstered by a consideration of the discussion that took place
in Congress of House Bill No. 11511 which was presented in answer to the
request of the Chief Executive that he be given a standby power to import
rice in the Philippines. On this matter, we quote the following views of
Senators Padilla and Almendras:
SENATOR PADILLA: But under Republic Act No. 3452 them is a
proviso in Sec. 10 thereof "that the Rice and Corn Administration or
any government agency is hereby prohibited from importing rice and
corn."
SENATOR ALMENDRAS: That is under normal conditions.
SENATOR PADILLA: "Provided further", it says, "that the importation
of rice, and corn is left to private parties upon payment of the
corresponding tax." So therefore, the position of the Committee as
expressed by the distinguished sponsor, is that Sec. 10 of Republic
Act No. 3452 is applicable under normal conditions.
SENATOR ALMENDRAS: "Yes". (Senate Debate, June 16, 1964).
Much stress is laid on the content of Section 12 of Republic Act 3452 which
gives to the President authority to declare a rice and corn emergency any
time he deems necessary in the public interest and, during the emergency, to
conduct raids, seizure and confiscation of rice and corn hoarded in any
private warehouse or bodega subject to constitutional limitations, to support
the claim that said Act also bans importation on the part of the government
even in case of an emergency. The contention is predicated on a
misinterpretation of the import and meaning of said provision. Note that the
section refers to an emergency where there is an artificial shortage because
of the apparent hoarding undertaken by certain unscrupulous dealers or
businessmen, and not to an actual serious shortage of the commodity
because, if the latter exists, there is really nothing to raid, seize or confiscate,
because the situation creates a real national emergency. Congress by no
means could have intended under such a situation to deprive the government
of its right to import to stave off hunger and starvation. Congress knows that
such remedy is worthless as there is no rice to be found in the Philippines.
Seizure of rice is only of value in fighting hoarding and profiteering, but such
remedy cannot produce the rice needed to solve the emergency. If there is
really insufficient rice stocked in the private warehouses and bodegas such
confiscatory step cannot remedy an actual emergency, in which case we
have to turn to Republic Act 2207.
The two laws can therefore be construed as harmonious parts of the
legislative expression of its policy to promote a rice and corn program. And if
this can be done, as we have shown, it is the duty of this Court to adopt such
interpretation that would give effect to both laws. Conversely, in order to
effect a repeal by implication, the litter statute must be irreconcilably
inconsistent and repugnant to the prior existing law [United States v.
Greathouse,. 166 U.S. 601, 41 L. Ed., 1130; In re Phoenix Hotel Co., 13 F.
Supp. 229; Hammond v. McDonald, 32 Cal. App. 187, 89 P (2d) 407;
Sutherland, Statutory Construction, supra, p. 462]. The old and the new laws
must be absolutely incompatible (Compañia General de Tabacos v. Collector
of Customs, 46 Phil. 8). A mere difference in the terms and provisions of the
statutes is not sufficient to create a repugnancy between them. There must
be such a positive repugnancy between the provisions of the old and the new
statutes that they cannot be made to reconcile and stand together (Crawford,
Construction of Statute, supra, p. 631). The clearest case possible must first
be made before the inference of implied repeal may be drawn [Nagano v.
McGrath, 187 F (2d) 759]. Inconsistency is never presumed.
Republic Act 3848 entitled "An Act Providing for the Importation of Rice
During the Calendar Year Nineteen Hundred Sixty-Four in the Event of
Shortage in Local Supply" cannot be given any nullifying value, as it is
pretended, simply because Section 6 thereof provides that "except as
provided in this Act, no other agency or instrumentality of the Government
shall be allowed to purchase rice from abroad." The reason is that it is a
mere temporary law effective only for a specific year. As its title reads, it is
merely an authority to import rice during the year 1964. The same, therefore,
is now functus officio at least on the matter of importation.
Neither can petitioners successfully pretend that as Section 4 thereof
provides that pending prosecutions for any violation of Republic Acts 2207
and 3452 shall in no way be affected by said Act 3848 the implication is that
the aforesaid Acts have already been repealed. That provision is merely a
safeguard placed therein in order that the prosecutions already undertaken
may not be defeated with the enactment of Republic Act 3848 because the
latter provides for penal provisions which call for lesser penalty. The intention
is to except them from the rule that penal statutes can be given retroactive
effect if favorable to the accused.
To further bolster our view that Republic Act 2207 has not
been impliedly repealed by Republic Act 3452, we wish to briefly quote
hereunder the views expressed by some senators during the discussion of
House Bill 11511 already mentioned above. It should be here repeated that
said bill was presented to accede to the request of the President for a stand-
by power to import in case of emergency in view of the uncertainty of the law,
but that during the discussion thereof it was strongly asserted and apparently
upheld that such request for authority was not necessary because Republic
Act 2207 was still in force. It is probably for this reason that said bill, after
having been approved by the Senate, was killed in the conference committee
that considered it. These views, while not binding, are of persuasive authority
and throw light on the issue relative to the effectivity of Republic Act 2207.
SENATOR LIWAG: ... Now Mr. Chairman, is it the sense of the
Committee that in the case of emergency, in case of an impending
shortage, we can import rice under the provisions of R.A. No. 2207?
SENATOR ALMENDRAS: Yes, that is what we mean, your Honor, in
this paragraph (c), Section 2, page 2, that when we say "under the
provisions of existing law," we are referring to R.A. No. 2207.
xxx xxx xxx
SENATOR PADILLA: I notice, Mr. Senator, that Section 2 paragraph
(c) of the amendment by substitution reads:
Importation of rice and/or corn should be resorted to only in cases of
extreme and under the provisions of existing law.
I suppose that the existing laws referred to are Republic Act No.
2207 and Republic Act No. 3452. Does this section in the proposed
bill by substitution recognize the continued existence of the pertinent
provisions of Republic Act No. 2207 and Republic Act No. 3452 on
rice importation ?
SENATOR ALMENDRAS: Yes, that is the reason, Your Honor, why
we struck out the stand-by power on the part of the President to
import rice.
xxx xxx xxx
SENATOR ALMENDRAS: The position of your Committee, Your
Honor, because of the existing law — that is, Republic Act No. 3452
and Republic Act No. 2207 — that is the reason your Committee
eliminated that stand-by power of the President to import rice.
Because you know, Your Honor, what is the use of that stand-by
power, inasmuch as under Republic Act No. 3452 and Republic Act
No. 2207 the President can designate any government agency to
import rice?
SENATOR PADILLA: Well, it is good to make that clear because in
the decision of the Supreme Court, as I said, there was no clear-cut
holding as to the possible co-existence or implied repeal between
these two Acts.
SENATOR ALMENDRAS: Yes, Your Honor, but the gentleman from
Nueva Ecija, Senator Liwag, informed me that Republic Act No. 2207
has never been repealed.
SENATOR PADILLA: Well, I also concur with that view, but we want
to make that clear ... .
SENATOR PADILLA: "Provided, further," it says, "That the
importation of rice and corn is left to private parties upon payment of
the corresponding taxes." So, therefore, the position of the
Committee, as expressed by the distinguished sponsor is that Sec.
10 of Republic Act No. 3452 is applicable under normal conditions.
SENATOR ALMENDRAS: Yes.
SENATOR PADILLA: So, both provisions of law are in existence.
SENATOR ALMENDRAS: Yes.
SENATOR PADILLA: One is not repealed by the other.
xxx xxx xxx
SENATOR TOLENTINO: Mr. President, there are two views already
expressed on whether Republic Act No. 2207 has been repealed by
Republic Act No. 3452. One view sustains the theory that there has
been a repeal of Republic Act No. 2207 by Republic Act No. 3452
insofar as rice importation is concerned. The other view is that there
is no repeal. The Supreme Court does not state clearly which side
prevails. I take the view that the two laws can be reconciled ... .
 Now, Mr. President, reading those two provisions together, I maintain
that they are not totally repugnant to each other, that it is possible for
them to stand together except on certain points: First, is importation
in case of a national emergency certified by the National Economic
Council permissible? By reading the two provisos together I would
say yes because there is nothing in the proviso contained in Republic
Act No. 3452 which would be inconsistent with importation during a
shortage amounting to a national emergency.
Another circumstance that strengthens our view is that when said House Bill
No. 11511 was finally approved by the Senate, it carried a clause which
expressly repeals, among others, Republic Act No. 2207 (Section 14), but
which bill, as already said, was later killed in the conference committee. This
attitude clearly reveals that Congress preferred to fall back on Republic Act
2207 with regard to future importations.
Anent the point raised relative to the lack of necessary appropriation to
finance the importation in question, suffice it to state that under Republic Act
663 the National Rice and Corn Corporation is authorized to borrow, raise
and secure the money that may be necessary to carry out its objectives. We
refer to Section 3 (e) of said Act which empowers said corporation to secure
money and to encumber any property it has as a guaranty, and Republic Act
No. 3452, which creates the Rice and Corn Administration, transferred its
functions and powers to the latter, including the power to borrow money
under Section 3(e). This provision gives the RCA enough power with which
to finance the importation in question.
WHEREFORE, petition is dismissed. The writ of preliminary injunction issued
by this Court is hereby dissolved. Costs against petitioners.
Paredes, Regala, Makalintal, Bengzon, J.P., and Zaldivar, JJ., concur.
THIRD DIVISION
[G.R. NO. 166562 : March 31, 2009]
BENJAMIN G. TING, Petitioner, v. CARMEN M. VELEZ-TING,Respondent.
DECISION
NACHURA, J.:
Before us is a Petition for Review on Certiorari seeking to set aside the
November 17, 2003 Amended Decision1 of the Court of Appeals (CA), and its
December 13, 2004 Resolution2 in CA-G.R. CV No. 59903. The appellate
court, in its assailed decision and resolution, affirmed the January 9, 1998
Decision3 of the Regional Trial Court (RTC), Branch 23, Cebu City, declaring
the marriage between petitioner and respondent null and void ab initio
pursuant to Article 36 of the Family Code.4
The facts follow.
Petitioner Benjamin Ting (Benjamin) and respondent Carmen Velez-Ting
(Carmen) first met in 1972 while they were classmates in medical
school.5 They fell in love, and they were wed on July 26, 1975 in Cebu City
when respondent was already pregnant with their first child.
At first, they resided at Benjamin's family home in Maguikay, Mandaue
City.6 When their second child was born, the couple decided to move to
Carmen's family home in Cebu City.7 In September 1975, Benjamin passed
the medical board examinations8 and thereafter proceeded to take a
residency program to become a surgeon but shifted to anesthesiology after
two years. By 1979, Benjamin completed the preceptorship program for the
said field9 and, in 1980, he began working for Velez Hospital, owned by
Carmen's family, as member of its active staff,10 while Carmen worked as the
hospital's Treasurer.11
The couple begot six (6) children, namely Dennis, born on December 9,
1975; James Louis, born on August 25, 1977; Agnes Irene, born on April 5,
1981; Charles Laurence, born on July 21, 1986; Myles Vincent, born on July
19, 1988; and Marie Corinne, born on June 16, 1991.12
On October 21, 1993, after being married for more than 18 years to petitioner
and while their youngest child was only two years old, Carmen filed a verified
petition before the RTC of Cebu City praying for the declaration of nullity of
their marriage based on Article 36 of the Family Code. She claimed that
Benjamin suffered from psychological incapacity even at the time of the
celebration of their marriage, which, however, only became manifest
thereafter.13
In her complaint, Carmen stated that prior to their marriage, she was already
aware that Benjamin used to drink and gamble occasionally with his
friends.14 But after they were married, petitioner continued to drink regularly
and would go home at about midnight or sometimes in the wee hours of the
morning drunk and violent. He would confront and insult respondent,
physically assault her and force her to have sex with him. There were also
instances when Benjamin used his gun and shot the gate of their
house.15Because of his drinking habit, Benjamin's job as anesthesiologist
was affected to the point that he often had to refuse to answer the call of his
fellow doctors and to pass the task to other anesthesiologists. Some
surgeons even stopped calling him for his services because they perceived
petitioner to be unreliable. Respondent tried to talk to her husband about the
latter's drinking problem, but Benjamin refused to acknowledge the same.16
Carmen also complained that petitioner deliberately refused to give financial
support to their family and would even get angry at her whenever she asked
for money for their children. Instead of providing support, Benjamin would
spend his money on drinking and gambling and would even buy expensive
equipment for his hobby.17He rarely stayed home18 and even neglected his
obligation to his children.19
Aside from this, Benjamin also engaged in compulsive gambling.20He would
gamble two or three times a week and would borrow from his friends,
brothers, or from loan sharks whenever he had no money. Sometimes,
Benjamin would pawn his wife's own jewelry to finance his gambling. 21 There
was also an instance when the spouses had to sell their family car and even
a portion of the lot Benjamin inherited from his father just to be able to pay off
his gambling debts.22 Benjamin only stopped going to the casinos in 1986
after he was banned therefrom for having caused trouble, an act which he
said he purposely committed so that he would be banned from the gambling
establishments.23
In sum, Carmen's allegations of Benjamin's psychological incapacity
consisted of the following manifestations:
1. Benjamin's alcoholism, which adversely affected his family relationship
and his profession;
2. Benjamin's violent nature brought about by his excessive and regular
drinking;
3. His compulsive gambling habit, as a result of which Benjamin found it
necessary to sell the family car twice and the property he inherited from his
father in order to pay off his debts, because he no longer had money to pay
the same; andcralawlibrary
4. Benjamin's irresponsibility and immaturity as shown by his failure and
refusal to give regular financial support to his family. 24
In his answer, Benjamin denied being psychologically incapacitated. He
maintained that he is a respectable person, as his peers would confirm. He
said that he is an active member of social and athletic clubs and would drink
and gamble only for social reasons and for leisure. He also denied being a
violent person, except when provoked by circumstances.25 As for his alleged
failure to support his family financially, Benjamin claimed that it was Carmen
herself who would collect his professional fees from Velez Hospital when he
was still serving there as practicing anesthesiologist.26 In his testimony,
Benjamin also insisted that he gave his family financial support within his
means whenever he could and would only get angry at respondent for
lavishly spending his hard-earned money on unnecessary things.27 He also
pointed out that it was he who often comforted and took care of their children,
while Carmen played mahjong with her friends twice a week.28
During the trial, Carmen's testimony regarding Benjamin's drinking and
gambling habits and violent behavior was corroborated by Susana Wasawas,
who served as nanny to the spouses' children from 1987 to 1992.29 Wasawas
stated that she personally witnessed instances when Benjamin maltreated
Carmen even in front of their children.30
Carmen also presented as witness Dr. Pureza Trinidad-Oñate, a
psychiatrist.31 Instead of the usual personal interview, however, Dr. Oñate's
evaluation of Benjamin was limited to the transcript of stenographic notes
taken during Benjamin's deposition because the latter had already gone to
work as an anesthesiologist in a hospital in South Africa. After reading the
transcript of stenographic notes, Dr. Oñate concluded that Benjamin's
compulsive drinking, compulsive gambling and physical abuse of respondent
are clear indications that petitioner suffers from a personality disorder. 32
To refute Dr. Oñate's opinion, petitioner presented Dr. Renato D. Obra, a
psychiatrist and a consultant at the Department of Psychiatry in Don Vicente
Sotto Memorial Medical Center, as his expert witness.33 Dr. Obra evaluated
Benjamin's psychological behavior based on the transcript of stenographic
notes, as well as the psychiatric evaluation report prepared by Dr. A.J.L.
Pentz, a psychiatrist from the University of Pretoria in South Africa, and his
(Dr. Obra's) interview with Benjamin's brothers.34 Contrary to Dr. Oñate's
findings, Dr. Obra observed that there is nothing wrong with petitioner's
personality, considering the latter's good relationship with his fellow doctors
and his good track record as anesthesiologist.35
On January 9, 1998, the lower court rendered its Decision36declaring the
marriage between petitioner and respondent null and void. The RTC gave
credence to Dr. Oñate's findings and the admissions made by Benjamin in
the course of his deposition, and found him to be psychologically
incapacitated to comply with the essential obligations of marriage.
Specifically, the trial court found Benjamin an excessive drinker, a
compulsive gambler, someone who prefers his extra-curricular activities to
his family, and a person with violent tendencies, which character traits find
root in a personality defect existing even before his marriage to Carmen. The
decretal portion of the decision reads:
WHEREFORE, all the foregoing considered, judgment is hereby rendered
declaring the marriage between plaintiff and defendant null and void ab initio
pursuant to Art. 36 of the Family Code. x x x
xxx
SO ORDERED.37
Aggrieved, petitioner appealed to the CA. On October 19, 2000, the CA
rendered a Decision38 reversing the trial court's ruling. It faulted the trial
court's finding, stating that no proof was adduced to support the conclusion
that Benjamin was psychologically incapacitated at the time he married
Carmen since Dr. Oñate's conclusion was based only on theories and not on
established fact,39 contrary to the guidelines set forth in Santos v. Court of
Appeals40 and in Rep. of the Phils. v. Court of Appeals and Molina.41
Because of this, Carmen filed a motion for reconsideration, arguing that the
Molina guidelines should not be applied to this case since the Molina
decision was promulgated only on February 13, 1997, or more than five
years after she had filed her petition with the RTC.42She claimed that the
Molina ruling could not be made to apply retroactively, as it would run
counter to the principle of stare decisis. Initially, the CA denied the motion for
reconsideration for having been filed beyond the prescribed period.
Respondent thereafter filed a manifestation explaining compliance with the
prescriptive period but the same was likewise denied for lack of merit.
Undaunted, respondent filed a petition for certiorari 43 with this Court. In a
Resolution44 dated March 5, 2003, this Court granted the petition and
directed the CA to resolve Carmen's motion for reconsideration. 45 On review,
the CA decided to reconsider its previous ruling. Thus, on November 17,
2003, it issued an Amended Decision46 reversing its first ruling and
sustaining the trial court's decision.47
A motion for reconsideration was filed, this time by Benjamin, but the same
was denied by the CA in its December 13, 2004 Resolution.48
Hence, this petition.
For our resolution are the following issues:
I. Whether the CA violated the rule on stare decisis when it refused to follow
the guidelines set forth under the Santos and Molina cases;
II. Whether the CA correctly ruled that the requirement of proof of
psychological incapacity for the declaration of absolute nullity of marriage
based on Article 36 of the Family Code has been liberalized;
andcralawlibrary
III. Whether the CA's decision declaring the marriage between petitioner and
respondent null and void [is] in accordance with law and jurisprudence.
We find merit in the petition.
I. On the issue of stare decisis.
The principle of stare decisis enjoins adherence by lower courts to doctrinal
rules established by this Court in its final decisions. It is based on the
principle that once a question of law has been examined and decided, it
should be deemed settled and closed to further argument.49 Basically, it is a
bar to any attempt to relitigate the same issues,50 necessary for two simple
reasons: economy and stability. In our jurisdiction, the principle is entrenched
in Article 8 of the Civil Code.51
This doctrine of adherence to precedents or stare decisis was applied by the
English courts and was later adopted by the United States. Associate Justice
(now Chief Justice) Reynato S. Puno's discussion on the historical
development of this legal principle in his dissenting opinion in Lambino v.
Commission on Elections52 is enlightening:
The latin phrase stare decisis et non quieta movere means "stand by the
thing and do not disturb the calm." The doctrine started with the English
Courts. Blackstone observed that at the beginning of the 18th century, "it is
an established rule to abide by former precedents where the same points
come again in litigation." As the rule evolved, early limits to its application
were recognized: (1) it would not be followed if it were "plainly unreasonable";
(2) where courts of equal authority developed conflicting decisions; and, (3)
the binding force of the decision was the "actual principle or principles
necessary for the decision; not the words or reasoning used to reach the
decision."
The doctrine migrated to the United States. It was recognized by the framers
of the U.S. Constitution. According to Hamilton, "strict rules and precedents"
are necessary to prevent "arbitrary discretion in the courts." Madison agreed
but stressed that "x x x once the precedent ventures into the realm of altering
or repealing the law, it should be rejected." Prof. Consovoy well noted that
Hamilton and Madison "disagree about the countervailing policy
considerations that would allow a judge to abandon a precedent." He added
that their ideas "reveal a deep internal conflict between the concreteness
required by the rule of law and the flexibility demanded in error correction. It
is this internal conflict that the Supreme Court has attempted to deal with for
over two centuries."
Indeed, two centuries of American case law will confirm Prof. Consovoy's
observation although stare decisis developed its own life in the United
States. Two strains of stare decisis have been isolated by legal scholars. The
first, known as vertical stare decisis deals with the duty of lower courts to
apply the decisions of the higher courts to cases involving the same facts.
The second, known as horizontal stare decisis requires that high courts must
follow its own precedents. Prof. Consovoy correctly observes that vertical
stare decisis has been viewed as an obligation, while horizontal stare decisis,
has been viewed as a policy, imposing choice but not a command. Indeed,
stare decisis is not one of the precepts set in stone in our Constitution.
It is also instructive to distinguish the two kinds of horizontal stare decisis -
constitutional stare decisis and statutory stare decisis. Constitutional stare
decisis involves judicial interpretations of the Constitution while statutory
stare decisis involves interpretations of statutes. The distinction is important
for courts enjoy more flexibility in refusing to apply stare decisis in
constitutional litigations. Justice Brandeis' view on the binding effect of the
doctrine in constitutional litigations still holds sway today. In soothing prose,
Brandeis stated: "Stare decisis is not . . . a universal and inexorable
command. The rule of stare decisis is not inflexible. Whether it shall be
followed or departed from, is a question entirely within the discretion of the
court, which is again called upon to consider a question once decided." In the
same vein, the venerable Justice Frankfurter opined: "the ultimate
touchstone of constitutionality is the Constitution itself and not what we have
said about it." In contrast, the application of stare decisis on judicial
interpretation of statutes is more inflexible. As Justice Stevens explains:
"after a statute has been construed, either by this Court or by a consistent
course of decision by other federal judges and agencies, it acquires a
meaning that should be as clear as if the judicial gloss had been drafted by
the Congress itself." This stance reflects both respect for Congress' role and
the need to preserve the courts' limited resources.
In general, courts follow the stare decisis rule for an ensemble of reasons,
viz.: (1) it legitimizes judicial institutions; (2) it promotes judicial economy;
and, (3) it allows for predictability. Contrariwise, courts refuse to be bound by
the stare decisis rule where (1) its application perpetuates illegitimate and
unconstitutional holdings; (2) it cannot accommodate changing social and
political understandings; (3) it leaves the power to overturn bad constitutional
law solely in the hands of Congress; and, (4) activist judges can dictate the
policy for future courts while judges that respect stare decisis are stuck
agreeing with them.
In its 200-year history, the U.S. Supreme Court has refused to follow the
stare decisis rule and reversed its decisions in 192 cases. The most famous
of these reversals is Brown v. Board of Education which junked Plessy v.
Ferguson's "separate but equal doctrine." Plessy upheld as constitutional a
state law requirement that races be segregated on public transportation. In
Brown, the U.S. Supreme Court, unanimously held that "separate . . . is
inherently unequal." Thus, by freeing itself from the shackles of stare decisis,
the U.S. Supreme Court freed the colored Americans from the chains of
inequality. In the Philippine setting, this Court has likewise refused to be
straitjacketed by the stare decisis rule in order to promote public welfare. In
La Bugal-B'laan Tribal Association, Inc. v. Ramos, we reversed our original
ruling that certain provisions of the Mining Law are unconstitutional. Similarly,
in Secretary of Justice v. Lantion, we overturned our first ruling and held, on
motion for reconsideration, that a private respondent is bereft of the right to
notice and hearing during the evaluation stage of the extradition process.
An examination of decisions on stare decisis in major countries will show that
courts are agreed on the factors that should be considered before
overturning prior rulings. These are workability, reliance, intervening
developments in the law and changes in fact. In addition, courts put in the
balance the following determinants: closeness of the voting, age of the prior
decision and its merits.
The leading case in deciding whether a court should follow the stare decisis
rule in constitutional litigations is Planned Parenthood v. Casey. It
established a 4-pronged test. The court should (1) determine whether the
rule has proved to be intolerable simply in defying practical workability; (2)
consider whether the rule is subject to a kind of reliance that would lend a
special hardship to the consequences of overruling and add inequity to the
cost of repudiation; (3) determine whether related principles of law have so
far developed as to have the old rule no more than a remnant of an
abandoned doctrine; and, (4) find out whether facts have so changed or
come to be seen differently, as to have robbed the old rule of significant
application or justification.53
To be forthright, respondent's argument that the doctrinal guidelines
prescribed in Santos and Molina should not be applied retroactively for being
contrary to the principle of stare decisis is no longer new. The same
argument was also raised but was struck down in Pesca v. Pesca,54 and
again in Antonio v. Reyes.55 In these cases, we explained that the
interpretation or construction of a law by courts constitutes a part of the law
as of the date the statute is enacted. It is only when a prior ruling of this
Court is overruled, and a different view is adopted, that the new doctrine may
have to be applied prospectively in favor of parties who have relied on the old
doctrine and have acted in good faith, in accordance therewith under the
familiar rule of "lex prospicit, non respicit."
II. On liberalizing the required proof for the declaration of nullity of marriage
under Article 36.
Now, petitioner wants to know if we have abandoned the Molina doctrine.
We have not.
In Edward Kenneth Ngo Te v. Rowena Ong Gutierrez Yu-Te,56 we declared
that, in hindsight, it may have been inappropriate for the Court to impose a
rigid set of rules, as the one in Molina, in resolving all cases of psychological
incapacity. We said that instead of serving as a guideline, Molina
unintentionally became a straightjacket, forcing all cases involving
psychological incapacity to fit into and be bound by it, which is not only
contrary to the intention of the law but unrealistic as well because, with
respect to psychological incapacity, no case can be considered as on "all
fours" with another.57
By the very nature of cases involving the application of Article 36, it is logical
and understandable to give weight to the expert opinions furnished by
psychologists regarding the psychological temperament of parties in order to
determine the root cause, juridical antecedence, gravity and incurability of
the psychological incapacity. However, such opinions, while highly advisable,
are not conditions sine qua non in granting petitions for declaration of nullity
of marriage.58 At best, courts must treat such opinions as decisive but not
indispensable evidence in determining the merits of a given case. In fact, if
the totality of evidence presented is enough to sustain a finding of
psychological incapacity, then actual medical or psychological examination of
the person concerned need not be resorted to.59 The trial court, as in any
other given case presented before it, must always base its decision not solely
on the expert opinions furnished by the parties but also on the totality of
evidence adduced in the course of the proceedings.
It was for this reason that we found it necessary to emphasize in Ngo Te that
each case involving the application of Article 36 must be treated distinctly
and judged not on the basis of a priori assumptions, predilections or
generalizations but according to its own attendant facts. Courts should
interpret the provision on a case-to-case basis, guided by experience, the
findings of experts and researchers in psychological disciplines, and by
decisions of church tribunals.
Far from abandoning Molina, we simply suggested the relaxation of the
stringent requirements set forth therein, cognizant of the explanation given by
the Committee on the Revision of the Rules on the rationale of the Rule on
Declaration of Absolute Nullity of Void Marriages and Annulment of Voidable
Marriages (A.M. No. 02-11-10-SC), viz.:
To require the petitioner to allege in the petition the particular root cause of
the psychological incapacity and to attach thereto the verified written report
of an accredited psychologist or psychiatrist have proved to be too expensive
for the parties. They adversely affect access to justice o poor litigants. It is
also a fact that there are provinces where these experts are not available.
Thus, the Committee deemed it necessary to relax this stringent requirement
enunciated in the Molina Case. The need for the examination of a party or
parties by a psychiatrist or clinical psychologist and the presentation of
psychiatric experts shall now be determined by the court during the pre-trial
conference.60
But where, as in this case, the parties had the full opportunity to present
professional and expert opinions of psychiatrists tracing the root cause,
gravity and incurability of a party's alleged psychological incapacity, then
such expert opinion should be presented and, accordingly, be weighed by
the court in deciding whether to grant a petition for nullity of marriage.
III. On petitioner's psychological incapacity.
Coming now to the main issue, we find the totality of evidence adduced by
respondent insufficient to prove that petitioner is psychologically unfit to
discharge the duties expected of him as a husband, and more particularly,
that he suffered from such psychological incapacity as of the date of the
marriage eighteen (18) years ago. Accordingly, we reverse the trial court's
and the appellate court's rulings declaring the marriage between petitioner
and respondent null and void ab initio.
The intendment of the law has been to confine the application of Article 36 to
the most serious cases of personality disorders clearly demonstrative of an
utter insensitivity or inability to give meaning and significance to the
marriage.61 The psychological illness that must have afflicted a party at the
inception of the marriage should be a malady so grave and permanent as to
deprive one of awareness of the duties and responsibilities of the matrimonial
bond he or she is about to assume.62 ςηαñrοblεš νιr†υαl lαω lιbrαrÿ
In this case, respondent failed to prove that petitioner's "defects" were
present at the time of the celebration of their marriage. She merely cited that
prior to their marriage, she already knew that petitioner would occasionally
drink and gamble with his friends; but such statement, by itself, is insufficient
to prove any pre-existing psychological defect on the part of her husband.
Neither did the evidence adduced prove such "defects" to be incurable.
The evaluation of the two psychiatrists should have been the decisive
evidence in determining whether to declare the marriage between the parties
null and void. Sadly, however, we are not convinced that the opinions
provided by these experts strengthened respondent's allegation of
psychological incapacity. The two experts provided diametrically
contradicting psychological evaluations: Dr. Oñate testified that petitioner's
behavior is a positive indication of a personality disorder,63 while Dr. Obra
maintained that there is nothing wrong with petitioner's personality.
Moreover, there appears to be greater weight in Dr. Obra's opinion because,
aside from analyzing the transcript of Benjamin's deposition similar to what
Dr. Oñate did, Dr. Obra also took into consideration the psychological
evaluation report furnished by another psychiatrist in South Africa who
personally examined Benjamin, as well as his (Dr. Obra's) personal interview
with Benjamin's brothers.64 Logically, therefore, the balance tilts in favor of
Dr. Obra's findings.
Lest it be misunderstood, we are not condoning petitioner's drinking and
gambling problems, or his violent outbursts against his wife. There is no valid
excuse to justify such a behavior. Petitioner must remember that he owes
love, respect, and fidelity to his spouse as much as the latter owes the same
to him. Unfortunately, this court finds respondent's testimony, as well as the
totality of evidence presented by the respondent, to be too inadequate to
declare him psychologically unfit pursuant to Article 36.
It should be remembered that the presumption is always in favor of the
validity of marriage. Semper praesumitur pro matrimonio.65 In this case, the
presumption has not been amply rebutted and must, perforce, prevail.
WHEREFORE, premises considered, the Petition for Review on Certiorari is
GRANTED. The November 17, 2003 Amended Decision and the December
13, 2004 Resolution of the Court of Appeals in CA-G.R. CV No. 59903 are
accordingly REVERSED and SET ASIDE.
SO ORDERED.
GUILLEN VS. PESCA
Not Cited Recently
THIRD DIVISION G.R. No. 136921, April 17, 2001 LORNA GUILLEN
PESCA, PETITIONER, VS. ZOSIMO A. PESCA, RESPONDENT.
DECISION
VITUG, J.:
Submitted for review is the decision of the Court of Appeals, promulgated on
27 May 1998, in C.A. G.R. CV. No. 52374, reversing the decision of the
Regional Trial Court ("RTC") of Caloocan City, Branch 130, which has
declared the marriage between petitioner and respondent to be null and
void Ab Initio on the ground of psychological incapacity on the part of
respondent.
Petitioner Lorna G. Pesca and respondent Zosimo A. Pesca first met
sometime in 1975 while on board an inter-island vessel bound for Bacolod
City. After a whirlwind courtship, they got married on 03 March 1975. Initially,
the young couple did not live together as petitioner was still a student in
college and respondent, a seaman, had to leave the country on board an
ocean-going vessel barely a month after the marriage. Six months later, the
young couple established their residence in Quezon City until they were able
to build their own house in Caloocan City where they finally resided. It was
blissful marriage for the couple during the two months of the year that they
could stay together - when respondent was on vacation. The union begot
four children, 19-year old Ruhem, 17-year old Rez, 11-year old Ryan, and 9-
year old Richie.
It started in 1988, petitioner said, when she noticed that respondent
surprisingly showed signs of "psychological incapacity" to perform his marital
covenant. His "true color" of being an emotionally immature and irresponsible
husband became apparent. He was cruel and violent. He was a habitual
drinker, staying with friends daily from 4:00 o'clock in the afternoon until 1:00
o'clock in the morning. When cautioned to stop or, to at least, minimize his
drinking, respondent would beat, slap and kick her. At one time, he chased
petitioner with a loaded shotgun and threatened to kill her in the presence of
the children. The children themselves were not spared from physical
violence.
Finally, on 19 November 1992, petitioner and her children left the conjugal
abode to live in the house of her sister in Quezon City as they could no
longer bear his violent ways. Two months later, petitioner decided to forgive
respondent, and she returned home to give him a chance to change. But, to
her dismay, things did not so turn out as expected. Indeed, matters became
worse.
On the morning of 22 March 1994, about eight o'clock, respondent assaulted
petitioner for about half an hour in the presence of the children. She was
battered black and blue. She submitted herself to medical examination at the
Quezon City General Hospital, which diagnosed her injuries as contusions
and abrasions. Petitioner filed a complaint with the barangay authorities, and
a case was filed against respondent for slight physical injuries. He was
convicted by the Metropolitan Trial Court of Caloocan City and sentenced to
eleven days of imprisonment.
This time, petitioner and her children left the conjugal home for good and
stayed with her sister. Eventually, they decided to rent an apartment.
Petitioner sued respondent before the Regional Trial Court for the declaration
of nullity of their marriage invoking psychological incapacity. Petitioner
likewise sought the custody of her minor children and prayed for
support pendente lite.
Summons, together with a copy of the complaint, was served on respondent
on 25 April 1994 by personal service by the sheriff. As respondent failed to
file an answer or to enter his appearance within the reglementary period, the
trial court ordered the city prosecutor to look into a possible collusion
between the parties. Prosecutor Rosa C. Reyes, on 03 August 1994,
submitted her report to the effect that she found no evidence to establish that
there was collusion between the parties.
On 11 January 1995, respondent belatedly filed, without leave of court, an
answer, and the same, although filed late, was admitted by the court. In his
answer, respondent admitted the fact of his marriage with petitioner and the
birth of their children. He also confirmed the veracity of Annex "A" of the
complaint which listed the conjugal property. Respondent vehemently
denied, however, the allegation that he was psychologically incapacitated.
On 15 November 1995, following hearings conducted by it, the trial court
rendered its decision declaring the marriage between petitioner and
respondent to be null and void Ab Initio on the basis of psychological
incapacity on the part of respondent and ordered the liquidation of the
conjugal partnership.
Respondent appealed the above decision to the Court of Appeals,
contending that the trial court erred, particularly, in holding that there was
legal basis to declare the marriage null and void and in denying his motion to
reopen the case.
The Court of Appeals reversed the decision of the trial court and declared the
marriage between petitioner and respondent valid and subsisting. The
appellate court said:
"Definitely the appellee has not established the following: That the appellant
showed signs of mental incapacity as would cause him to be truly incognitive
of the basic marital covenant, as so provided for in Article 68 of the Family
Code; that the incapacity is grave, has preceded the marriage and is
incurable; that his incapacity to meet his marital responsibility is because of a
psychological, not physical illness; that the root cause of the incapacity has
been identified medically or clinically, and has been proven by an expert; and
that the incapacity is permanent and incurable in nature.
"The burden of proof to show the nullity of marriage lies in the plaintiff and
any doubt should be resolved in favor of the existence and continuation of
the marriage and against its dissolution and nullity."[1]
Petitioner, in her plea to this Court, would have the decision of the Court of
Appeals reversed on the thesis that the doctrine enunciated in Santos vs.
Court of Appeals,[2] promulgated on 14 January 1995, as well as the
guidelines set out in Republic vs. Court of Appeals and Molina,[3]promulgated
on 13 February 1997, should have no retroactive application and, on the
assumption that the Molina ruling could be applied retroactively, the
guidelines therein outlined should be taken to be merely advisory and not
mandatory in nature. In any case, petitioner argues, the application of
the Santos and Molina dicta should warrant only a remand of the case to the
trial court for further proceedings and not its dismissal.
Be that as it may, respondent submits, the appellate court did not err in its
assailed decision for there is absolutely no evidence that has been shown to
prove psychological incapacity on his part as the term has been so defined
in Santos.
Indeed, there is no merit in the petition.
The term "psychological incapacity," as a ground for the declaration of nullity
of a marriage under Article 36 of the Family Code, has been explained by the
Court in Santos and reiterated in Molina. The Court, in Santos, concluded:
"It should be obvious, looking at all the foregoing disquisitions, including, and
most importantly, the deliberations of the Family Code Revision Committee
itself, that the use of the phrase `psychological incapacity' under Article 36 of
the Code has not been meant to comprehend all such possible cases of
psychoses as, likewise mentioned by some ecclesiastical authorities,
extremely low intelligence, immaturity, and like circumstances (cited in Fr.
Artemio Balumad's `Void and Voidable Marriages in the Family Code and
their Parallels in Canon Law,' quoting form the Diagnostic Statistical Manuel
of Mental Disorder by the American Psychiatric Association; Edward
Hudson's `Handbook II for Marriage Nullity Cases'). Article 36 of the Family
Code cannot be taken and construed independently of, but must stand in
conjunction with, existing precepts in our law on marriage. Thus correlated, institution and the foundation of the family[6] that the State cherishes and
`psychological incapacity' should refer to no less than a mental (not physical) protects. While the Court commisserates with petitioner in her unhappy
incapacity that causes a party to be truly incognitive of the basic marital marital relationship with respondent, totally terminating that relationship,
covenants that concomitantly must be assumed and discharged by the however, may not necessarily be the fitting denouement to it. In these cases,
parties to the marriage which, as so expressed by Article 68 of the Family the law has not quite given up, neither should we.
Code, include their mutual obligations to live together, observe love, respect
and fidelity and render help and support. There is hardly any doubt that the WHEREFORE, the herein petition is DENIED. No costs.
intendment of the law has been to confine the meaning of `psychological
incapacity' to the most serious cases of personality disorders clearly SO ORDERED.
demonstrative of an utter insensitivity or inability to give meaning and
significance to the marriage. This psychologic condition must exist at the time Melo, (Chairman), Panganiban, Gonzaga-Reyes, and Sandoval-Gutierrez,
the marriage is celebrated." JJ., concur.
The "doctrine of stare decisis," ordained in Article 8 of the Civil Code,
expresses that judicial decisions applying or interpreting the law shall form
part of the legal system of the Philippines. The rule follows the settled legal
maxim - "legis interpretado legis vim obtinet" - that the interpretation placed
upon the written law by a competent court has the force of law. [4] The Republic of the Philippines
SUPREME COURT
interpretation or construction placed by the courts establishes the
Manila
contemporaneous legislative intent of the law. The latter as so interpreted
and construed would thus constitute a part of that law as of the date the
EN BANC
statute is enacted. It is only when a prior ruling of this Court finds itself later
overruled, and a different view is adopted, that the new doctrine may have to
be applied prospectively in favor of parties who have relied on the old
doctrine and have acted in good faith in accordance therewith[5] under the
familiar rule of "lex prospicit, non respicit." G.R. No. 94723 August 21, 1997

The phrase "psychological incapacity," borrowed from Canon law, is an
entirely novel provision in our statute books, and, until the relatively recent
enactment of the Family Code, the concept has escaped jurisprudential
attention. It is in Santos when, for the first time, the Court has given life to the
term. Molina, that followed, has additionally provided procedural guidelines to
assist the courts and the parties in trying cases for annulment of marriages
grounded on psychological incapacity. Molina has strengthened, not
overturned, Santos.
At all events, petitioner has utterly failed, both in her allegations in the
complaint and in her evidence, to make out a case of psychological
incapacity on the part of respondent, let alone at the time of solemnization of
the contract, so as to warrant a declaration of nullity of the marriage.
Emotional immaturity and irresponsibility, invoked by her, cannot be equated
with psychological incapacity.
KAREN E. SALVACION, minor, thru Federico N. Salvacion, Jr., father
and Natural Guardian, and Spouses FEDERICO N. SALVACION, JR.,
and EVELINA E. SALVACION, petitioners,
vs.
CENTRAL BANK OF THE PHILIPPINES, CHINA BANKING
CORPORATION and GREG BARTELLI y NORTHCOTT, respondents.
TORRES, JR., J.:
In our predisposition to discover the "original intent" of a statute, courts
become the unfeeling pillars of the status quo. Ligle do we realize that
statutes or even constitutions are bundles of compromises thrown our way by
their framers. Unless we exercise vigilance, the statute may already be out of
tune and irrelevant to our day.

The Court reiterates its reminder that marriage is an inviolable social The petition is for declaratory relief. It prays for the following reliefs:
 a.) Immediately upon the filing of this petition, an Order be
issued restraining the respondents from applying and
enforcing Section 113 of Central Bank Circular No. 960;
b.) After hearing, judgment be rendered:
1.) Declaring the respective rights and duties of petitioners
and respondents;
2.) Adjudging Section 113 of Central Bank Circular No. 960
as contrary to the provisions of the Constitution, hence void;
because its provision that "Foreign currency deposits shall
be exempt from attachment, garnishment, or any other order
or process of any court, legislative body, government agency
or any administrative body whatsoever
i.) has taken away the right of petitioners to
have the bank deposit of defendant Greg
Bartelli y Northcott garnished to satisfy the
judgment rendered in petitioners' favor in
violation of substantive due process
guaranteed by the Constitution;
ii.) has given foreign currency depositors an
undue favor or a class privilege in violation
of the equal protection clause of the
Constitution;
iii.) has provided a safe haven for criminals
like the herein respondent Greg Bartelli y
Northcott since criminals could escape civil
liability for their wrongful acts by merely
converting their money to a foreign currency
and depositing it in a foreign currency
deposit account with an authorized bank.
The antecedent facts:
On February 4, 1989, Greg Bartelli y Northcott, an American tourist, coaxed
and lured petitioner Karen Salvacion, then 12 years old to go with him to his
apartment. Therein, Greg Bartelli detained Karen Salvacion for four days, or
up to February 7, 1989 and was able to rape the child once on February 4,
and three times each day on February 5, 6, and 7, 1989. On February 7,
1989, after policemen and people living nearby, rescued Karen, Greg Bartelli
was arrested and detained at the Makati Municipal Jail. The policemen
recovered from Bartelli the following items: 1.) Dollar Check No. 368, Control
No. 021000678-1166111303, US 3,903.20; 2.) COCOBANK Bank Book No.
104-108758-8 (Peso Acct.); 3.) Dollar Account — China Banking Corp.,
US$/A#54105028-2; 4.) ID-122-30-8877; 5.) Philippine Money (P234.00)
cash; 6.) Door Keys 6 pieces; 7.) Stuffed Doll (Teddy Bear) used in seducing
the complainant.
On February 16, 1989, Makati Investigating Fiscal Edwin G. Condaya filed
against Greg Bartelli, Criminal Case No. 801 for Serious Illegal Detention and
Criminal Cases Nos. 802, 803, 804, and 805 for four (4) counts of Rape. On
the same day, petitioners filed with the Regional Trial Court of Makati Civil
Case No. 89-3214 for damages with preliminary attachment against Greg
Bartelli. On February 24, 1989, the day there was a scheduled hearing for
Bartelli's petition for bail the latter escaped from jail.
On February 28, 1989, the court granted the fiscal's Urgent Ex-Parte Motion
for the Issuance of Warrant of Arrest and Hold Departure Order. Pending the
arrest of the accused Greg Bartelli y Northcott, the criminal cases were
archived in an Order dated February 28, 1989.
Meanwhile, in Civil Case No. 89-3214, the Judge issued an Order dated
February 22, 1989 granting the application of herein petitioners, for the
issuance of the writ of preliminary attachment. After petitioners gave Bond
No. JCL (4) 1981 by FGU Insurance Corporation in the amount of
P100,000.00, a Writ of Preliminary Attachment was issued by the trial court
on February 28, 1989.
On March 1, 1989, the Deputy Sheriff of Makati served a Notice of
Garnishment on China Banking Corporation. In a letter dated March 13, 1989
to the Deputy Sheriff of Makati, China Banking Corporation invoked Republic
Act No. 1405 as its answer to the notice of garnishment served on it. On
March 15, 1989, Deputy Sheriff of Makati Armando de Guzman sent his reply
to China Banking Corporation saying that the garnishment did not violate the
secrecy of bank deposits since the disclosure is merely incidental to a
garnishment properly and legally made by virtue of a court order which has
placed the subject deposits in custodia legis. In answer to this letter of the
Deputy Sheriff of Makati, China Banking Corporation, in a letter dated March
20, 1989, invoked Section 113 of Central Bank Circular No. 960 to the effect
that the dollar deposits or defendant Greg Bartelli are exempt from
attachment, garnishment, or any other order or process of any court,
legislative body, government agency or any administrative body, whatsoever.
This prompted the counsel for petitioners to make an inquiry with the Central
Bank in a letter dated April 25, 1989 on whether Section 113 of CB Circular
No. 960 has any exception or whether said section has been repealed or
amended since said section has rendered nugatory the substantive right of
the plaintiff to have the claim sought to be enforced by the civil action
secured by way of the writ of preliminary attachment as granted to the
plaintiff under Rule 57 of the Revised Rules of Court. The Central Bank
responded as follows:
May 26, 1989
Ms. Erlinda S. Carolino
12 Pres. Osmena Avenue
South Admiral Village
Paranaque, Metro Manila
Dear Ms. Carolino:
This is in reply to your letter dated April 25, 1989 regarding
your inquiry on Section 113, CB Circular No. 960 (1983).
The cited provision is absolute in application. It does not
admit of any exception, nor has the same been repealed nor
amended.
The heinous acts of respondent Greg Bartelli which gave rise to the award
The purpose of the law is to encourage dollar accounts
were related in graphic detail by the trial court in its decision as follows:
within the country's banking system which would help in the
development of the economy. There is no intention to render
futile the basic rights of a person as was suggested in your
subject letter. The law may be harsh as some perceive it, but
it is still the law. Compliance is, therefore, enjoined.
Very truly yours,
(SGD) AGAPITO S. FAJARDO
Director1
Meanwhile, on April 10, 1989, the trial court granted petitioners' motion for
leave to serve summons by publication in the Civil Case No. 89-3214 entitled
"Karen Salvacion, et al. vs. Greg Bartelli y Northcott." Summons with the
complaint was a published in the Manila Times once a week for three
consecutive weeks. Greg Bartelli failed to file his answer to the complaint and
was declared in default on August 7, 1989. After hearing the case ex-parte,
the court rendered judgment in favor of petitioners on March 29, 1990, the
dispositive portion of which reads:
WHEREFORE, judgment is hereby rendered in favor of
plaintiffs and against defendant, ordering the latter:
1. To pay plaintiff Karen E. Salvacion the amount of
P500,000.00 as moral damages;
2. To pay her parents, plaintiffs spouses Federico N.
Salvacion, Jr., and Evelina E. Salvacion the amount of
P150,000.00 each or a total of P300,000.00 for both of them;
3. To pay plaintiffs exemplary damages of P100,000.00; and
4. To pay attorney's fees in an amount equivalent to 25% of
the total amount of damages herein awarded;
5. To pay litigation expenses of P10,000.00; plus
6. Costs of the suit.
SO ORDERED.
The defendant in this case was originally detained in the
municipal jail of Makati but was able to escape therefrom on
February 24, 1989 as per report of the Jail Warden of Makati
to the Presiding Judge, Honorable Manuel M. Cosico of the
Regional Trial Court of Makati, Branch 136, where he was
charged with four counts of Rape and Serious Illegal
Detention (Crim. Cases Nos. 802 to 805). Accordingly, upon
motion of plaintiffs, through counsel, summons was served
upon defendant by publication in the Manila Times, a
newspaper of general circulation as attested by the
Advertising Manager of the Metro Media Times, Inc., the
publisher of the said newspaper. Defendant, however, failed
to file his answer to the complaint despite the lapse of the
period of sixty (60) days from the last publication; hence,
upon motion of the plaintiffs, through counsel, defendant was
declared in default and plaintiffs were authorized to present
their evidence ex parte.
In support of the complaint, plaintiffs presented as witnesses
the minor Karen E. Salvacion, her father, Federico N.
Salvacion, Jr., a certain Joseph Aguilar and a certain
Liberato Madulio, who gave the following testimony:
Karen took her first year high school in St. Mary's Academy
in Pasay City but has recently transferred to Arellano
University for her second year.
In the afternoon of February 4, 1989, Karen was at the Plaza
Fair Makati Cinema Square, with her friend Edna Tangile
whiling away her free time. At about 3:30 p.m. while she was
finishing her snack on a concrete bench in front of Plaza
Fair, an American approached her. She was then alone
because Edna Tangile had already left, and she was about
to go home. (TSN, Aug. 15, 1989, pp. 2 to 5)
The American asked her name and introduced himself as
Greg Bartelli. He sat beside her when he talked to her. He
said he was a Math teacher and told her that he has a sister
who is a nurse in New York. His sister allegedly has a
daughter who is about Karen's age and who was with him in
his house along Kalayaan Avenue. (TSN, Aug. 15, 1989, pp.
4-5)
The American asked Karen what was her favorite subject
and she told him it's Pilipino. He then invited her to go with
him to his house where she could teach Pilipino to his niece.
He even gave her a stuffed toy to persuade her to teach his
niece. (Id., pp. 5-6)
They walked from Plaza Fair along Pasong Tamo, turning
right to reach the defendant's house along Kalayaan
Avenue. (Id., p. 6)
When they reached the apartment house, Karen noticed that
defendant's alleged niece was not outside the house but
defendant told her maybe his niece was inside. When Karen
did not see the alleged niece inside the house, defendant
told her maybe his niece was upstairs, and invited Karen to
go upstairs. (Id., p. 7)
Upon entering the bedroom defendant suddenly locked the
door. Karen became nervous because his niece was not
there. Defendant got a piece of cotton cord and tied Karen's
hands with it, and then he undressed her. Karen cried for
help but defendant strangled her. He took a packing tape
and he covered her mouth with it and he circled it around her
head. (Id., p. 7)
Then, defendant suddenly pushed Karen towards the bed
which was just near the door. He tied her feet and hands
spread apart to the bed posts. He knelt in front of her and
inserted his finger in her sex organ. She felt severe pain.
She tried to shout but no sound could come out because
there were tapes on her mouth. When defendant withdrew
his finger it was full of blood and Karen felt more pain after
the withdrawal of the finger. (Id., p. 8)
He then got a Johnson's Baby Oil and he applied it to his sex
organ as well as to her sex organ. After that he forced his
sex organ into her but he was not able to do so. While he
was doing it, Karen found it difficult to breathe and she
perspired a lot while feeling severe pain. She merely
presumed that he was able to insert his sex organ a little,
because she could not see. Karen could not recall how long
the defendant was in that position. (Id. pp. 8-9)
After that, he stood up and went to the bathroom to wash. He
also told Karen to take a shower and he untied her hands.
Karen could only hear the sound of the water while the
defendant, she presumed, was in the bathroom washing his
sex organ. When she took a shower more blood came out
from her. In the meantime, defendant changed the mattress
because it was full of blood. After the shower, Karen was
allowed by defendant to sleep. She fell asleep because she
got tired crying. The incident happened at about 4:00 p.m.
Karen had no way of determining the exact time because
defendant removed her watch. Defendant did not care to
give her food before she went to sleep. Karen woke up at
about 8:00 o'clock the following morning. (Id., pp. 9-10)
The following day, February 5, 1989, a Sunday, after a
breakfast of biscuit and coke at about 8:30 to 9:00 a.m.
defendant raped Karen while she was still bleeding. For
lunch, they also took biscuit and coke. She was raped for the
second time at about 12:00 to 2:00 p.m. In the evening, they
had rice for dinner which defendant had stored downstairs; it
was he who cooked the rice that is why it looks like "lugaw".
For the third time, Karen was raped again during the night.
During those three times defendant succeeded in inserting
his sex organ but she could not say whether the organ was
inserted wholly.
Karen did not see any firearm or any bladed weapon. The
defendant did not tie her hands and feet nor put a tape on
her mouth anymore but she did not cry for help for fear that
she might be killed; besides, all the windows and doors were
closed. And even if she shouted for help, nobody would hear
her. She was so afraid that if somebody would hear her and
would be able to call the police, it was still possible that as
she was still inside the house, defendant might kill her.
Besides, the defendant did not leave that Sunday, ruling out
her chance to call for help. At nighttime he slept with her
again. (TSN, Aug. 15, 1989, pp. 12-14)
On February 6, 1989, Monday, Karen was raped three times,
once in the morning for thirty minutes after a breakfast of
biscuits; again in the afternoon; and again in the evening. At
first, Karen did not know that there was a window because
everything was covered by a carpet, until defendant opened
the window for around fifteen minutes or less to let some air
in, and she found that the window was covered by styrofoam
and plywood. After that, he again closed the window with a
hammer and he put the styrofoam, plywood, and carpet
back. (Id., pp. 14-15)
That Monday evening, Karen had a chance to call for help,
although defendant left but kept the door closed. She went to
the bathroom and saw a small window covered by styrofoam
and she also spotted a small hole. She stepped on the bowl
and she cried for help through the hole. She cried: "Maawa
no po kayo so akin. Tulungan n'yo akong makalabas
dito. Kinidnap ako!" Somebody heard her. It was a woman,
probably a neighbor, but she got angry and said she was
"istorbo". Karen pleaded for help and the woman told her to
sleep and she will call the police. She finally fell asleep but
no policeman came. (TSN, Aug. 15, 1989, pp. 15-16)
She woke up at 6:00 o'clock the following morning, and she
saw defendant in bed, this time sleeping. She waited for him
to wake up. When he woke up, he again got some food but
he always kept the door locked. As usual, she was merely
fed with biscuit and coke. On that day, February 7, 1989, she
was again raped three times. The first at about 6:30 to 7:00
a.m., the second at about 8:30 — 9:00, and the third was
after lunch at 12:00 noon. After he had raped her for the
second time he left but only for a short while. Upon his
return, he caught her shouting for help but he did not
understand what she was shouting about. After she was
raped the third time, he left the house. (TSN, Aug. 15, 1989,
pp. 16-17) She again went to the bathroom and shouted for
help. After shouting for about five minutes, she heard many
voices. The voices were asking for her name and she gave
her name as Karen Salvacion. After a while, she heard a
voice of a woman saying they will just call the police. They
were also telling her to change her clothes. She went from
the bathroom to the room but she did not change her clothes
being afraid that should the neighbors call for the police and
the defendant see her in different clothes, he might kill her.
At that time she was wearing a T-shirt of the American
because the latter washed her dress. (Id., p. 16)
Afterwards, defendant arrived and he opened the door. He
asked her if she had asked for help because there were
many policemen outside and she denied it. He told her to
change her clothes, and she did change to the one she was
wearing on Saturday. He instructed her to tell the police that
she left home and willingly; then he went downstairs but he
locked the door. She could hear people conversing but she
could not understand what they were saying. (Id., p. 19)
When she heard the voices of many people who were
conversing downstairs, she knocked repeatedly at the door
as hard as she could. She heard somebody going upstairs
and when the door was opened, she saw a policeman. The
policeman asked her name and the reason why she was
there. She told him she was kidnapped. Downstairs, he saw
about five policemen in uniform and the defendant was
talking to them. "Nakikipag-areglo po sa mga pulis," Karen
added. "The policeman told him to just explain at the
precinct. (Id., p. 20)
They went out of the house and she saw some of her
neighbors in front of the house. They rode the car of a
certain person she called Kuya Boy together with defendant,
the policeman, and two of her neighbors whom she called
Kuya Bong Lacson and one Ate Nita. They were brought to
Sub-Station I and there she was investigated by a
policeman. At about 2:00 a.m., her father arrived, followed by
her mother together with some of their neighbors. Then they
were brought to the second floor of the police headquarters.
(Id., p. 21)
At the headquarters, she was asked several questions by the
investigator. The written statement she gave to the police
 was marked as Exhibit A. Then they proceeded to the
National Bureau of Investigation together with the
investigator and her parents. At the NBI, a doctor, a medico-
legal officer, examined her private parts. It was already 3:00
in the early morning of the following day when they reached
the NBI. (TSN, Aug. 15, 1989, p. 22) The findings of the
medico-legal officer has been marked as Exhibit B.
She was studying at the St. Mary's Academy in Pasay City at
the time of the incident but she subsequently transferred to
Apolinario Mabini, Arellano University, situated along Taft
Avenue, because she was ashamed to be the subject of
conversation in the school. She first applied for transfer to
Jose Abad Santos, Arellano University along Taft Avenue
near the Light Rail Transit Station but she was denied
admission after she told the school the true reason for her
transfer. The reason for their denial was that they might be
implicated in the case. (TSN, Aug. 15, 1989, p. 46)
xxx xxx xxx
After the incident, Karen has changed a lot. She does not
play with her brother and sister anymore, and she is always
in a state of shock; she has been absent-minded and is
ashamed even to go out of the house. (TSN, Sept. 12, 1989,
p. 10) She appears to be restless or sad, (Id., p. 11) The
father prays for P500,000.00 moral damages for Karen for
this shocking experience which probably, she would always
recall until she reaches old age, and he is not sure if she
could ever recover from this experience. (TSN, Sept. 24,
1989, pp. 10-11)
Pursuant to an Order granting leave to publish notice of decision, said notice
was published in the Manila Bulletin once a week for three consecutive
weeks. After the lapse of fifteen (15) days from the date of the last
publication of the notice of judgment and the decision of the trial court had
become final, petitioners tried to execute on Bartelli's dollar deposit with
China Banking Corporation. Likewise, the bank invoked Section 113 of
Central Bank Circular No. 960.
Thus, petitioners decided to seek relief from this Court.
The issues raised and the arguments articulated by the parties boil down to
two:
May this Court entertain the instant petition despite the fact that original
jurisdiction in petitions for declaratory relief rests with the lower court? Should
Section 113 of Central Bank Circular No. 960 and Section 8 of R.A. 6426, as
amended by P.D. 1246, otherwise known as the Foreign Currency Deposit
Act be made applicable to a foreign transient?
Petitioners aver as heretofore stated that Section 113 of Central Bank
Circular No. 960 providing that "Foreign currency deposits shall be exempt
from attachment, garnishment, or any other order or process of any court,
legislative body, government agency or any administrative body whatsoever."
should be adjudged as unconstitutional on the grounds that: 1.) it has taken
away the right of petitioners to have the bank deposit of defendant Greg
Bartelli y Northcott garnished to satisfy the judgment rendered in petitioners'
favor in violation of substantive due process guaranteed by the Constitution;
2.) it has given foreign currency depositors an undue favor or a class
privilege in violation of the equal protection clause of the Constitution; 3.) it
has provided a safe haven for criminals like the herein respondent Greg
Bartelli y Northcott since criminals could escape civil liability for their wrongful
acts by merely converting their money to a foreign currency and depositing it
in a foreign currency deposit account with an authorized bank; and 4.) The
Monetary Board, in issuing Section 113 of Central Bank Circular No. 960 has
exceeded its delegated quasi-legislative power when it took away: a.) the
plaintiffs substantive right to have the claim sought to be enforced by the civil
action secured by way of the writ of preliminary attachment as granted by
Rule 57 of the Revised Rules of Court; b.) the plaintiffs substantive right to
have the judgment credit satisfied by way of the writ of execution out of the
bank deposit of the judgment debtor as granted to the judgment creditor by
Rule 39 of the Revised Rules of Court, which is beyond its power to do so.
On the other hand, respondent Central Bank, in its Comment alleges that the
Monetary Board in issuing Section 113 of CB Circular No. 960 did not exceed
its power or authority because the subject Section is copied verbatim from a
portion of R.A. No. 6426 as amended by P.D. 1246. Hence, it was not the
Monetary Board that grants exemption from attachment or garnishment to
foreign currency deposits, but the law (R.A. 6426 as amended) itself; that it
does not violate the substantive due process guaranteed by the Constitution
because a.) it was based on a law; b.) the law seems to be reasonable; c.) it
is enforced according to regular methods of procedure; and d.) it applies to
all members of a class.
Expanding, the Central Bank said; that one reason for exempting the foreign
currency deposits from attachment, garnishment or any other order or
process of any court, is to assure the development and speedy growth of the
Foreign Currency Deposit System and the Offshore Banking System in the
Philippines; that another reason is to encourage the inflow of foreign
currency deposits into the banking institutions thereby placing such
institutions more in a position to properly channel the same to loans and
investments in the Philippines, thus directly contributing to the economic
development of the country; that the subject section is being enforced
according to the regular methods of procedure; and that it applies to all
foreign currency deposits made by any person and therefore does not violate
the equal protection clause of the Constitution.
Respondent Central Bank further avers that the questioned provision is
needed to promote the public interest and the general welfare; that the State
cannot just stand idly by while a considerable segment of the society suffers
from economic distress; that the State had to take some measures to
encourage economic development; and that in so doing persons and
property may be subjected to some kinds of restraints or burdens to secure
the general welfare or public interest. Respondent Central Bank also alleges
that Rule 39 and Rule 57 of the Revised Rules of Court provide that some
properties are exempted from execution/attachment especially provided by
law and R.A. No. 6426 as amended is such a law, in that it specifically
provides, among others, that foreign currency deposits shall be exempted
from attachment, garnishment, or any other order or process of any court,
legislative body, government agency or any administrative body whatsoever.
For its part, respondent China Banking Corporation, aside from giving
reasons similar to that of respondent Central Bank, also stated that
respondent China Bank is not unmindful of the inhuman sufferings
experienced by the minor Karen E. Salvacion from the beastly hands of Greg
Bartelli; that it is only too willing to release the dollar deposit of Bartelli which
may perhaps partly mitigate the sufferings petitioner has undergone; but it is
restrained from doing so in view of R.A. No. 6426 and Section 113 of Central
Bank Circular No. 960; and that despite the harsh effect of these laws on
petitioners, CBC has no other alternative but to follow the same.
This Court finds the petition to be partly meritorious.
Petitioner deserves to receive the damages awarded to her by the court. But
this petition for declaratory relief can only be entertained and treated as a
petition for mandamus to require respondents to honor and comply with the
writ of execution in Civil Case No. 89-3214.
This Court has no original and exclusive jurisdiction over a petition for
declaratory relief.2 However, exceptions to this rule have been recognized.
Thus, where the petition has far-reaching implications and raises questions
that should be resolved, it may be treated as one for mandamus.3
Here is a child, a 12-year old girl, who in her belief that all Americans are
good and in her gesture of kindness by teaching his alleged niece the Filipino
language as requested by the American, trustingly went with said stranger to
his apartment, and there she was raped by said American tourist Greg
Bartelli. Not once, but ten times. She was detained therein for four (4) days.
This American tourist was able to escape from the jail and avoid punishment.
On the other hand, the child, having received a favorable judgment in the
Civil Case for damages in the amount of more than P1,000,000.00, which
amount could alleviate the humiliation, anxiety, and besmirched reputation
she had suffered and may continue to suffer for a long, long time; and
knowing that this person who had wronged her has the money, could not,
however get the award of damages because of this unreasonable law. This
questioned law, therefore makes futile the favorable judgment and award of
damages that she and her parents fully deserve. As stated by the trial court
in its decision,
Indeed, after hearing the testimony of Karen, the Court
believes that it was undoubtedly a shocking and traumatic
experience she had undergone which could haunt her mind
for a long, long time, the mere recall of which could make her
feel so humiliated, as in fact she had been actually
humiliated once when she was refused admission at the
Abad Santos High School, Arellano University, where she
sought to transfer from another school, simply because the
school authorities of the said High School learned about
what happened to her and allegedly feared that they might
be implicated in the case.
xxx xxx xxx
The reason for imposing exemplary or corrective damages is
due to the wanton and bestial manner defendant had
committed the acts of rape during a period of serious illegal
detention of his hapless victim, the minor Karen Salvacion
whose only fault was in her being so naive and credulous to
believe easily that defendant, an American national, could
not have such a bestial desire on her nor capable of
committing such a heinous crime. Being only 12 years old
when that unfortunate incident happened, she has never
heard of an old Filipino adage that in every forest there is a
snake, . . . .4
If Karen's sad fate had happened to anybody's own kin, it would be difficult
for him to fathom how the incentive for foreign currency deposit could be
more important than his child's rights to said award of damages; in this case,
the victim's claim for damages from this alien who had the gall to wrong a
child of tender years of a country where he is a mere visitor. This further
illustrates the flaw in the questioned provisions.
It is worth mentioning that R.A. No. 6426 was enacted in 1983 or at a time
when the country's economy was in a shambles; when foreign investments
were minimal and presumably, this was the reason why said statute was
enacted. But the realities of the present times show that the country has
recovered economically; and even if not, the questioned law still denies those
entitled to due process of law for being unreasonable and oppressive. The
intention of the questioned law may be good when enacted. The law failed to
anticipate the iniquitous effects producing outright injustice and inequality
such as the case before us.
It has thus been said that —
But I also know,5 that laws and institutions must go hand in
hand with the progress of the human mind. As that becomes
more developed, more enlightened, as new discoveries are
made, new truths are disclosed and manners and opinions
change with the change of circumstances, institutions must
advance also, and keep pace with the times. . . We might as
well require a man to wear still the coat which fitted him
when a boy, as civilized society to remain ever under the
regimen of their barbarous ancestors.
In his Comment, the Solicitor General correctly opined, thus:
The present petition has far-reaching implications on the
right of a national to obtain redress for a wrong committed by
an alien who takes refuge under a law and regulation
promulgated for a purpose which does not contemplate the
application thereof envisaged by the alien. More specifically,
the petition raises the question whether the protection
against attachment, garnishment or other court process
accorded to foreign currency deposits by PD No. 1246 and
CB Circular No. 960 applies when the deposit does not come
from a lender or investor but from a mere transient or tourist
who is not expected to maintain the deposit in the bank for
long.
The resolution of this question is important for the protection
of nationals who are victimized in the forum by foreigners
who are merely passing through.
xxx xxx xxx
. . . Respondents China Banking Corporation and Central
Bank of the Philippines refused to honor the writ of execution
issued in Civil Case No. 89-3214 on the strength of the
following provision of Central Bank Circular No. 960:
Sec. 113. Exemption from attachment. —
Foreign currency deposits shall be exempt
from attachment, garnishment, or any other
order or process of any court, legislative
body, government agency or any
administrative body whatsoever.
Central Bank Circular No. 960 was issued pursuant to
Section 7 of Republic Act No. 6426:
Sec. 7. Rules and Regulations. The
Monetary Board of the Central Bank shall
promulgate such rules and regulations as
may be necessary to carry out the
provisions of this Act which shall take effect
after the publication of such rules and
regulations in the Official Gazette and in a
newspaper of national circulation for at least
once a week for three consecutive weeks. In
case the Central Bank promulgates new
rules and regulations decreasing the rights
of depositors, the rules and regulations at
the time the deposit was made shall govern.
The aforecited Section 113 was copied from Section 8 of
Republic Act NO. 6426, as amended by P.D. 1246, thus:
Sec. 8. Secrecy of Foreign Currency
Deposits. — All foreign currency deposits
authorized under this Act, as amended by
Presidential Decree No. 1035, as well as
foreign currency deposits authorized under
Presidential Decree No. 1034, are hereby
declared as and considered of an absolutely
confidential nature and, except upon the
written permission of the depositor, in no
instance shall such foreign currency
deposits be examined, inquired or looked
into by any person, government official,
bureau or office whether judicial or
administrative or legislative or any other
entity whether public or private: Provided,
 however, that said foreign currency deposits
shall be exempt from attachment,
garnishment, or any other order or process
of any court, legislative body, government
agency or any administrative body
whatsoever.
The purpose of PD 1246 in according protection against
attachment, garnishment and other court process to foreign
currency deposits is stated in its whereases, viz.:
WHEREAS, under Republic Act No. 6426,
as amended by Presidential Decree No.
1035, certain Philippine banking institutions
and branches of foreign banks are
authorized to accept deposits in foreign
currency;
WHEREAS, under the provisions of
Presidential Decree No. 1034 authorizing
the establishment of an offshore banking
system in the Philippines, offshore banking
units are also authorized to receive foreign
currency deposits in certain cases;
WHEREAS, in order to assure the
development and speedy growth of the
Foreign Currency Deposit System and the
Offshore Banking System in the Philippines,
certain incentives were provided for under
the two Systems such as confidentiality of
deposits subject to certain exceptions and
tax exemptions on the interest income of
depositors who are nonresidents and are not
engaged in trade or business in the
Philippines;
WHEREAS, making absolute the protective
cloak of confidentiality over such foreign
currency deposits, exempting such deposits
from tax, and guaranteeing the vested rights
of depositors would better encourage the
inflow of foreign currency deposits into the
banking institutions authorized to accept
such deposits in the Philippines thereby
placing such institutions more in a position
to properly channel the same to loans and
investments in the Philippines, thus directly
contributing to the economic development of
the country;
Thus, one of the principal purposes of the protection
accorded to foreign currency deposits is "to assure the
development and speedy growth of the Foreign Currency
Deposit system and the Offshore Banking in the Philippines"
(3rd Whereas).
The Offshore Banking System was established by PD No.
1034. In turn, the purposes of PD No. 1034 are as follows:
WHEREAS, conditions conducive to the
establishment of an offshore banking
system, such as political stability, a growing
economy and adequate communication
facilities, among others, exist in the
Philippines;
WHEREAS, it is in the interest of developing
countries to have as wide access as
possible to the sources of capital funds for
economic development;
WHEREAS, an offshore banking system
based in the Philippines will be
advantageous and beneficial to the country
by increasing our links with foreign lenders,
facilitating the flow of desired investments
into the Philippines, creating employment
opportunities and expertise in international
finance, and contributing to the national
development effort.
WHEREAS, the geographical location,
physical and human resources, and other
positive factors provide the Philippines with
the clear potential to develop as another
financial center in Asia;
On the other hand, the Foreign Currency Deposit system
was created by PD. No. 1035. Its purposes are as follows:
 WHEREAS, the establishment of an
offshore banking system in the Philippines
has been authorized under a separate
decree;
WHEREAS, a number of local commercial
banks, as depository bank under the Foreign
Currency Deposit Act (RA No. 6426), have
the resources and managerial competence
to more actively engage in foreign exchange
transactions and participate in the grant of
foreign currency loans to resident
corporations and firms;
WHEREAS, it is timely to expand the foreign
currency lending authority of the said
depository banks under RA 6426 and apply
to their transactions the same taxes as
would be applicable to transaction of the
proposed offshore banking units;
It is evident from the above [Whereas clauses] that the
Offshore Banking System and the Foreign Currency Deposit
System were designed to draw deposits from
foreign lenders and investors (Vide second Whereas of PD
No. 1034; third Whereas of PD No. 1035). It is these
deposits that are induced by the two laws and given
protection and incentives by them.
Obviously, the foreign currency deposit made by a transient
or a tourist is not the kind of deposit encouraged by PD Nos.
1034 and 1035 and given incentives and protection by said
laws because such depositor stays only for a few days in the
country and, therefore, will maintain his deposit in the bank
only for a short time.
Respondent Greg Bartelli, as stated, is just a tourist or a
transient. He deposited his dollars with respondent China
Banking Corporation only for safekeeping during his
temporary stay in the Philippines.
For the reasons stated above, the Solicitor General thus
submits that the dollar deposit of respondent Greg Bartelli is
not entitled to the protection of Section 113 of Central Bank
Circular No. 960 and PD No. 1246 against attachment,
garnishment or other court processes.6
In fine, the application of the law depends on the extent of its justice.
Eventually, if we rule that the questioned Section 113 of Central Bank
Circular No. 960 which exempts from attachment, garnishment, or any other
order or process of any court, legislative body, government agency or any
administrative body whatsoever, is applicable to a foreign transient, injustice
would result especially to a citizen aggrieved by a foreign guest like accused
Greg Bartelli. This would negate Article 10 of the New Civil Code which
provides that "in case of doubt in the interpretation or application of laws, it is
presumed that the lawmaking body intended right and justice to prevail.
"Ninguno non deue enriquecerse tortizeramente con dano de otro." Simply
stated, when the statute is silent or ambiguous, this is one of those
fundamental solutions that would respond to the vehement urge of
conscience. (Padilla vs. Padilla, 74 Phil. 377).
It would be unthinkable, that the questioned Section 113 of Central Bank No.
960 would be used as a device by accused Greg Bartelli for wrongdoing, and
in so doing, acquitting the guilty at the expense of the innocent.
Call it what it may — but is there no conflict of legal policy here? Dollar
against Peso? Upholding the final and executory judgment of the lower court
against the Central Bank Circular protecting the foreign depositor? Shielding
or protecting the dollar deposit of a transient alien depositor against injustice
to a national and victim of a crime? This situation calls for fairness against
legal tyranny.
We definitely cannot have both ways and rest in the belief that we have
served the ends of justice.
IN VIEW WHEREOF, the provisions of Section 113 of CB Circular No. 960
and PD No. 1246, insofar as it amends Section 8 of R.A. No. 6426 are
hereby held to be INAPPLICABLE to this case because of its peculiar
circumstances. Respondents are hereby REQUIRED to COMPLY with the
writ of execution issued in Civil Case No. 89-3214, "Karen Salvacion, et al.
vs. Greg Bartelli y Northcott, by Branch CXLIV, RTC Makati and to
RELEASE to petitioners the dollar deposit of respondent Greg Bartelli y
Northcott in such amount as would satisfy the judgment.
SO ORDERED.
Narvasa, C.J., Regalado, Davide, Jr., Romero, Bellosillo, Melo, Puno, Vitug,
Kapunan, Francisco and Panganiban, JJ., concur.
Padilla, J., took no part.
Mendoza and Hermosisima, Jr., JJ., are on leave.
MARKETING VS. TECSON
Not Cited Recently
G.R. No. L-29131, August 27, 1969 NATIONAL MARKETING
CORPORATION, PLAINTIFF-APPELLANT, VS. MIGUEL D. TECSON, ET
AL., DEFENDANTS, MIGUEL D. TECSON, DEFENDANT-APPELLEE, THE
INSURANCE COMMISSIONER, PETITIONER.
DECISION
CONCEPCION, C.J.:
This appeal has been certified to us by the Court of Appeals, only one
question of law being involved therein.
On November 14, 1955, the Court of First Instance of Manila rendered
judgment, in Civil Case No. 20520 thereof, entitled "Price Stabilization
Corporation vs. Miguel D. Tecson and Alto Surety and Insurance Co.,
Inc.", the dispositive part of which reads as follows:
"For the foregoing consideration, the Court decides this case: (a) Ordering
the defendants Miguel D. Tecson and Alto Surety & Insurance Co. Inc. to pay
jointly and severally plaintiff PRATRA the sum of P7, 200.00 plus 7% interest
from May 25, 1960 until the amount is fully paid, plus P500. 00 for attorney's
fees, and plus costs; (b) Ordering defendant Miguel D. Tecson to indemnify
his co-defendant Alto Surety & Insurance Co. Inc. on the cross-claim for all
the amounts it would be made to pay in this decision, in case defendant Alto
Surety & Insurance Co. Inc. pay the amount adjudged to plaintiff in this
decision.From the date of such payment defendant Miguel D. Tecson would
pay the Alto Surety & Insurance Co. Inc., interest at 12% per annum until
Miguel D. Tecso has fully reimbursed plaintiff of the said amount."
Copy of this decision was, on November 21, 1955, served upon the
defendants in said case.On December 21, 1965, the National Marketing
Corporation, as successor to all the properties, assets, rights, and choses in
action of the Price Stabilization Corporation, as plaintiff in that case and
judgment creditor therein, filed, with the same court, a complaint, docketed
as Civil Case No. 63701 thereof, against the same defendants, for the revival
of the judgment rendered in said Case No. 20520.Defendant Miguel
D. Tecson moved to dismiss said complaint, upon the ground of lack of
jurisdiction over the subject-matter thereof and prescription of action.Acting
upon the motion and plaintiff's opposition thereto, said Court issued, on
February 14, 1966, an order reading:
"Defendant Miguel Tecson seeks the dismissal of the complaint on the
ground of lack of jurisdiction and prescription. As for lack of jurisdiction, as
the amount involved is less than P10,000 as actually these proceedings are
a revival of a decision issued by this same court, the matter of jurisdiction
must be admitted. But as for prescription.Plaintiffs admit the decision of this
Court became final on December 21, 1955.This case was filed exactly on
December 21, 1965 - but more than ten years have passed a year is a period
of 365 days (Art. 13, CCP). Plaintiff forgot that 1960, 1964 were both leap
years so that when this present case was filed it was filed two days too late.
"The complaint insofar as Miguel Tecson is concerned is, therefore,
dismissed as having prescribed."
The National Marketing Corporation appealed from such order to the Court of
Appeals, which, on March 20, 1969, certified the case to this Court, upon the
ground that the only question therein raised is one of law, namely, whether or
not the present action for the revival of a judgment is barred by the statute of
limitations.
Pursuant to Art. 1144-(3) of our Civil Code, an action upon a judgment "must
be brought within ten years from the time the right of action accrues," which,
in the language of Art. 1152 of the same Code, "commences from the time
the judgment sought to be revived has become final." This, in turn, took place
on December 21, 1955, or thirty (30) days from notice of the judgment -
which was received by the defendants herein on November 21, 1955 - no
appeal having been taken therefrom.[1] The issue is thus confined to the date
on which ten (10) years from December 21, 1955 expired.
Plaintiff-appellant alleges that it was December 21, 1965,
but appellee Tecson maintains otherwise, because "when the laws speak of
years x xx it shall be understood that years are of three hundred sixty-five
days each" - according to Art. 13 of our Civil Code - and, 1960 and 1964
being leap years, the month of February in both had 29 days, so that ten (10)
years of 365 days each, or an aggregate of 3,650 days, from December 21,
1955, expired on December 19, 1965.The lower court accepted this view in
its appealed order of dismissal.
Plaintiff-appellant insists that the same "is erroneous, because a year means
a calendar year (Statutory Construction, Interpretation of Laws, by Crowford,
p. 383) and since what is being computed here is the number of years, a
calendar year should be used as the basis of computation.There is no
question that when it is not a leap year, December 21 to December 21 of the
following year is one year, If the extra day in a leap year is not a day of the
year, because it is the 366th day, then to what year does it belong?Certainly,
it must belong to the year where it falls and, therefore, that the 366 days
constitute one year.2
The very conclusion thus reached by appellant shows that its theory
contravenes the explicit provision of Art. 13 of the Civil Code of
the Philippines, limiting the connotation of each "year" - as the term is used in
our laws - to 365 days.Indeed, prior to the approval of the Civil Code of
Spain, the Supreme Court thereof had held, on March 30, 1887, that, when
the law spoke of months, it meant a "natural" month or "solar" month, in the
absence of express provision to the contrary.Such provision was
incorporated into the Civil Code of Spain, subsequently promulgated.Hence,
the same Supreme Court declared3 that, pursuant to Art. 7 of said Code,
"whenever months x x x are referred to in the law, it shall be understood that
the months are of 30 days", not the "natural", "solar" or "calendar" months,
unless they are "designated by name", in which case "they shall be
computed by the actual number of days they have." This concept was,
later, modifiedin the Philippines, by Section 13 of the Revised Administrative
Code, pursuant to which, "month shall be understood to refer to a calendar
month.4 In the language of this Court, in People vs. Del Rosario5, "with the
approval of the Civil Code of the Philippines (Republic Act 386) x x xwe
have reverted to the provisions of the Spanish Civil Code in accordance with
which a month is to be considered as the regular 30-day
month x xxand not the solaror civil month," with the particularity that, whereas
the Spanish Code merely mentioned "months, days or nights," ours has
added thereto the term "years" and explicitly ordains that "it shall be
understood that years are of three hundred sixty-five days."
Although some members of the Court are inclined to think that this legislation
is not realistic, for failure to conform with ordinary experience or practice, the
theory of plaintiff-appellant herein cannot be upheld without ignoring, if not
nullifying, Art. 13 of our Civil Code, and reviving Section 13 of the Revised
Administrative Code, thereby engaging in judicial legislation, and, in effect,
repealing an act of Congress.If public interest demands a reversion to the
policy embodied in the Revised Administrative Code, this may be done
through legislative process, not by judicial decree.
WHEREFORE, the order appealed from should be, as it is hereby affirmed,
without costs.
IT IS SO ORDERED.
Concepcion, C.J., Dizon, Makalintal, Sanchez, Castro, Fernando,
Capistrano, Teehankee and Barredo, JJ., concur.
Reyes and Zaldivar, JJ., are on official leave abroad.
Republic of the Philippines
SUPREME COURT
Manila
FIRST DIVISION
G.R. No. 162155 August 28, 2007
COMMISSIONER OF INTERNAL REVENUE and ARTURO V. PARCERO
in his official capacity as Revenue District Officer of Revenue District
No. 049 (Makati), Petitioners,
vs.
PRIMETOWN PROPERTY GROUP, INC., Respondent.
DECISION
CORONA, J.:
This petition for review on certiorari1 seeks to set aside the August 1, 2003
decision2 of the Court of Appeals (CA) in CA-G.R. SP No. 64782 and its
February 9, 2004 resolution denying reconsideration.3
On March 11, 1999, Gilbert Yap, vice chair of respondent Primetown
Property Group, Inc., applied for the refund or credit of income tax
respondent paid in 1997. In Yap's letter to petitioner revenue district officer
Arturo V. Parcero of Revenue District No. 049 (Makati) of the Bureau of
Internal Revenue (BIR),4 he explained that the increase in the cost of labor
and materials and difficulty in obtaining financing for projects and collecting
receivables caused the real estate industry to slowdown. 5 As a consequence,
while business was good during the first quarter of 1997, respondent suffered
losses amounting to ₱71,879,228 that year.6
According to Yap, because respondent suffered losses, it was not liable for
income taxes.7 Nevertheless, respondent paid its quarterly corporate income
tax and remitted creditable withholding tax from real estate sales to the BIR
in the total amount of ₱26,318,398.32.8 Therefore, respondent was entitled to
tax refund or tax credit.9
On May 13, 1999, revenue officer Elizabeth Y. Santos required respondent to
submit additional documents to support its claim.10 Respondent complied but
its claim was not acted upon. Thus, on April 14, 2000, it filed a petition for
review11 in the Court of Tax Appeals (CTA).
On December 15, 2000, the CTA dismissed the petition as it was filed
beyond the two-year prescriptive period for filing a judicial claim for tax
refund or tax credit.12 It invoked Section 229 of the National Internal Revenue
Code (NIRC):
Sec. 229. Recovery of Taxes Erroneously or Illegally Collected. -- No suit or
proceeding shall be maintained in any court for the recovery of any national
internal revenue tax hereafter alleged to have been erroneously or illegally
assessed or collected, or of any penalty claimed to have been collected
without authority, or of any sum alleged to have been excessively or in any
manner wrongfully collected, until a claim for refund or credit has been duly
filed with the Commissioner; but such suit or proceeding may be maintained,
whether or not such tax, penalty, or sum has been paid under protest or
duress.
In any case, no such suit or proceeding shall be filed after the expiration
of two (2) years from the date of payment of the tax or penalty
regardless of any supervening cause that may arise after
payment: Provided, however, That the Commissioner may, even without a
claim therefor, refund or credit any tax, where on the face of the return upon
which payment was made, such payment appears clearly to have been
erroneously paid. (emphasis supplied)
The CTA found that respondent filed its final adjusted return on April 14,
1998. Thus, its right to claim a refund or credit commenced on that date.13
The tax court applied Article 13 of the Civil Code which states:
Art. 13. When the law speaks of years, months, days or nights, it shall be
understood that years are of three hundred sixty-five days each; months,
of thirty days; days, of twenty-four hours, and nights from sunset to sunrise.
If the months are designated by their name, they shall be computed by the
number of days which they respectively have.
In computing a period, the first day shall be excluded, and the last included.
(emphasis supplied)
Thus, according to the CTA, the two-year prescriptive period under Section
229 of the NIRC for the filing of judicial claims was equivalent to 730 days.
Because the year 2000 was a leap year, respondent's petition, which was
filed 731 days14 after respondent filed its final adjusted return, was filed
beyond the reglementary period.15
Respondent moved for reconsideration but it was denied.16 Hence, it filed an
appeal in the CA.17
On August 1, 2003, the CA reversed and set aside the decision of the
CTA.18 It ruled that Article 13 of the Civil Code did not distinguish between a
regular year and a leap year. According to the CA:
The rule that a year has 365 days applies, notwithstanding the fact that a
particular year is a leap year.19
In other words, even if the year 2000 was a leap year, the periods covered by
April 15, 1998 to April 14, 1999 and April 15, 1999 to April 14, 2000 should
still be counted as 365 days each or a total of 730 days. A statute which is
clear and explicit shall be neither interpreted nor construed.20
Petitioners moved for reconsideration but it was denied.21 Thus, this appeal.
Petitioners contend that tax refunds, being in the nature of an exemption,
should be strictly construed against claimants.22 Section 229 of the NIRC
should be strictly applied against respondent inasmuch as it has been
consistently held that the prescriptive period (for the filing of tax refunds and
tax credits) begins to run on the day claimants file their final adjusted
returns.23 Hence, the claim should have been filed on or before April 13,
2000 or within 730 days, reckoned from the time respondent filed its final
adjusted return.
The conclusion of the CA that respondent filed its petition for review in the
CTA within the two-year prescriptive period provided in Section 229 of the
NIRC is correct. Its basis, however, is not.
The rule is that the two-year prescriptive period is reckoned from the filing of
the final adjusted return.24 But how should the two-year prescriptive period be
computed?
provision above only impliedly repealed all laws inconsistent with the
Administrative Code of 1987.1avvphi1
Implied repeals, however, are not favored. An implied repeal must have been
clearly and unmistakably intended by the legislature. The test is whether the
subsequent law encompasses entirely the subject matter of the former law
and they cannot be logically or reasonably reconciled. 33

As already quoted, Article 13 of the Civil Code provides that when the law
speaks of a year, it is understood to be equivalent to 365 days. In National
Marketing Corporation v. Tecson,25 we ruled that a year is equivalent to 365
days regardless of whether it is a regular year or a leap year. 26
However, in 1987, EO27 292 or the Administrative Code of 1987 was
enacted. Section 31, Chapter VIII, Book I thereof provides:
Both Article 13 of the Civil Code and Section 31, Chapter VIII, Book I of the
Administrative Code of 1987 deal with the same subject matter — the
computation of legal periods. Under the Civil Code, a year is equivalent to
365 days whether it be a regular year or a leap year. Under the
Administrative Code of 1987, however, a year is composed of 12 calendar
months. Needless to state, under the Administrative Code of 1987, the
number of days is irrelevant.

Sec. 31. Legal Periods. — "Year" shall be understood to be twelve
calendar months; "month" of thirty days, unless it refers to a specific
calendar month in which case it shall be computed according to the number
of days the specific month contains; "day", to a day of twenty-four hours and;
"night" from sunrise to sunset. (emphasis supplied)
There obviously exists a manifest incompatibility in the manner of computing
legal periods under the Civil Code and the Administrative Code of 1987. For
this reason, we hold that Section 31, Chapter VIII, Book I of the
Administrative Code of 1987, being the more recent law, governs the
computation of legal periods. Lex posteriori derogat priori.

A calendar month is "a month designated in the calendar without regard to Applying Section 31, Chapter VIII, Book I of the Administrative Code of 1987
the number of days it may contain."28 It is the "period of time running from the to this case, the two-year prescriptive period (reckoned from the time
beginning of a certain numbered day up to, but not including, the respondent filed its final adjusted return34 on April 14, 1998) consisted of 24
corresponding numbered day of the next month, and if there is not a calendar months, computed as follows:
sufficient number of days in the next month, then up to and including the last
day of that month."29 To illustrate, one calendar month from December 31, Year 1st calendar April 15, 1998 to May 14, 1998
2007 will be from January 1, 2008 to January 31, 2008; one calendar month 1 month
from January 31, 2008 will be from February 1, 2008 until February 29,
2008.30 2nd calendar May 15, 1998 to June 14, 1998
month
A law may be repealed expressly (by a categorical declaration that the law is 3rd calendar June 15, 1998 to July 14, 1998
revoked and abrogated by another) or impliedly (when the provisions of a month
more recent law cannot be reasonably reconciled with the previous
one).31Section 27, Book VII (Final Provisions) of the Administrative Code of 4th calendar July 15, 1998 to August 14, 1998
1987 states: month
5th August 15, 1998 to September 14,
Sec. 27. Repealing clause. — All laws, decrees, orders, rules and regulation, calendar 1998
or portions thereof, inconsistent with this Code are hereby repealed or month
modified accordingly.
6th September 15, to October 14, 1998
calendar 1998
A repealing clause like Sec. 27 above is not an express repealing clause month
because it fails to identify or designate the laws to be abolished. 32 Thus, the
 7th calendar October 15, 1998 to November 14, 1998 24th calendar March 15, 2000 to April 14, 2000
month month
8th calendar November 15, 1998 to December 14, 1998
month We therefore hold that respondent's petition (filed on April 14, 2000) was filed
on the last day of the 24th calendar month from the day respondent filed its
9th calendar December 15, 1998 to January 14, 1999 final adjusted return. Hence, it was filed within the reglementary period.
month
10th calendar January 15, 1999 to February 14, 1999 Accordingly, the petition is hereby DENIED. The case is REMANDED to the
month Court of Tax Appeals which is ordered to expeditiously proceed to hear
C.T.A. Case No. 6113 entitled Primetown Property Group, Inc. v.
11th calendar February 15, 1999 to March 14, 1999
Commissioner of Internal Revenue and Arturo V. Parcero.
month
12th calendar March 15, 1999 to April 14, 1999 No costs.
month
Year 13th April 15, 1999 to May 14, 1999 SO ORDERED.
2 calendar
month RENATO C. CORONA
14th calendar May 15, 1999 to June 14, 1999 Associate Justice
month
WE CONCUR:
15th calendar June 15, 1999 to July 14, 1999
month
REYNATO S. PUNO
16th calendar July 15, 1999 to August 14, 1999 Chief Justice
month Chairperson
17th August 15, 1999 to September 14,
calendar 1999 ANGELINA SANDOVAL-
ADOLFO S. AZCUNA
month GUTIERREZ
Associate Justice
Associate Justice
18th September 15, to October 14, 1999
calendar 1999
month
CANCIO C. GARCIA
19th calendar October 15, 1999 to November 14, 1999 Associate Justice
month
20th calendar November 15, 1999 to December 14, 1999 CERTIFICATION
month
21st calendar December 15, 1999 to January 14, 2000 Pursuant to Section 13, Article VIII of the Constitution, I certify that the
month 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.
22nd calendar January 15, 2000 to February 14, 2000
month REYNATO S. PUNO
23rd calendar February 15, 2000 to March 14, 2000 Chief Justice
month

Republic of the Philippines
SUPREME COURT
Manila
EN BANC
G.R. No. L-22595 November 1, 1927
Testate Estate of Joseph G. Brimo, JUAN MICIANO,
administrator, petitioner-appellee,
vs.
ANDRE BRIMO, opponent-appellant.
Ross, Lawrence and Selph for appellant.
Camus and Delgado for appellee.
ROMUALDEZ, J.:
The partition of the estate left by the deceased Joseph G. Brimo is in
question in this case.
The judicial administrator of this estate filed a scheme of partition. Andre
Brimo, one of the brothers of the deceased, opposed it. The court, however,
approved it.
The errors which the oppositor-appellant assigns are:
(1) The approval of said scheme of partition; (2) denial of his participation in
the inheritance; (3) the denial of the motion for reconsideration of the order
approving the partition; (4) the approval of the purchase made by the Pietro
Lana of the deceased's business and the deed of transfer of said business;
and (5) the declaration that the Turkish laws are impertinent to this cause,
and the failure not to postpone the approval of the scheme of partition and
the delivery of the deceased's business to Pietro Lanza until the receipt of
the depositions requested in reference to the Turkish laws.
The appellant's opposition is based on the fact that the partition in question
puts into effect the provisions of Joseph G. Brimo's will which are not in
accordance with the laws of his Turkish nationality, for which reason they are
void as being in violation or article 10 of the Civil Code which, among other
things, provides the following:
Nevertheless, legal and testamentary successions, in respect to the
order of succession as well as to the amount of the successional
rights and the intrinsic validity of their provisions, shall be regulated
by the national law of the person whose succession is in question,
whatever may be the nature of the property or the country in which it
may be situated.
But the fact is that the oppositor did not prove that said testimentary
dispositions are not in accordance with the Turkish laws, inasmuch as he did
not present any evidence showing what the Turkish laws are on the matter,
and in the absence of evidence on such laws, they are presumed to be the
same as those of the Philippines. (Lim and Lim vs. Collector of Customs, 36
Phil., 472.)
It has not been proved in these proceedings what the Turkish laws are. He,
himself, acknowledges it when he desires to be given an opportunity to
present evidence on this point; so much so that he assigns as an error of the
court in not having deferred the approval of the scheme of partition until the
receipt of certain testimony requested regarding the Turkish laws on the
matter.
The refusal to give the oppositor another opportunity to prove such laws does
not constitute an error. It is discretionary with the trial court, and, taking into
consideration that the oppositor was granted ample opportunity to introduce
competent evidence, we find no abuse of discretion on the part of the court in
this particular. There is, therefore, no evidence in the record that the national
law of the testator Joseph G. Brimo was violated in the testamentary
dispositions in question which, not being contrary to our laws in force, must
be complied with and executed. lawphil.net
Therefore, the approval of the scheme of partition in this respect was not
erroneous.
In regard to the first assignment of error which deals with the exclusion of the
herein appellant as a legatee, inasmuch as he is one of the persons
designated as such in will, it must be taken into consideration that such
exclusion is based on the last part of the second clause of the will, which
says:
Second. I like desire to state that although by law, I am a Turkish
citizen, this citizenship having been conferred upon me by conquest
and not by free choice, nor by nationality and, on the other hand,
 having resided for a considerable length of time in the Philippine
Islands where I succeeded in acquiring all of the property that I now
possess, it is my wish that the distribution of my property and
everything in connection with this, my will, be made and disposed of
in accordance with the laws in force in the Philippine islands,
requesting all of my relatives to respect this wish, otherwise, I annul
and cancel beforehand whatever disposition found in this will
favorable to the person or persons who fail to comply with this
request.
The institution of legatees in this will is conditional, and the condition is that
the instituted legatees must respect the testator's will to distribute his
property, not in accordance with the laws of his nationality, but in accordance
with the laws of the Philippines.
If this condition as it is expressed were legal and valid, any legatee who fails
to comply with it, as the herein oppositor who, by his attitude in these
proceedings has not respected the will of the testator, as expressed, is
prevented from receiving his legacy.
The fact is, however, that the said condition is void, being contrary to law, for
article 792 of the civil Code provides the following:
Impossible conditions and those contrary to law or good morals shall
be considered as not imposed and shall not prejudice the heir or
legatee in any manner whatsoever, even should the testator
otherwise provide.
And said condition is contrary to law because it expressly ignores the
testator's national law when, according to article 10 of the civil Code above
quoted, such national law of the testator is the one to govern his
testamentary dispositions.
Said condition then, in the light of the legal provisions above cited, is
considered unwritten, and the institution of legatees in said will is
unconditional and consequently valid and effective even as to the herein
oppositor.
It results from all this that the second clause of the will regarding the law
which shall govern it, and to the condition imposed upon the legatees, is null
and void, being contrary to law.
All of the remaining clauses of said will with all their dispositions and
requests are perfectly valid and effective it not appearing that said clauses
are contrary to the testator's national law.
Therefore, the orders appealed from are modified and it is directed that the
distribution of this estate be made in such a manner as to include the herein
appellant Andre Brimo as one of the legatees, and the scheme of partition
submitted by the judicial administrator is approved in all other respects,
without any pronouncement as to costs.
So ordered.
Street, Malcolm, Avanceña, Villamor and Ostrand, JJ., concur.
EN BANC
G.R. No. L-16749 January 31, 1963
IN THE MATTER OF THE TESTATE ESTATE OF EDWARD E.
CHRISTENSEN, DECEASED.
ADOLFO C. AZNAR, Executor and LUCY CHRISTENSEN, Heir of the
deceased, Executor and Heir-appellees, vs. HELEN CHRISTENSEN
GARCIA, oppositor-appellant.
M. R. Sotelo for executor and heir-appellees.
Leopoldo M. Abellera and Jovito Salonga for oppositor-appellant.
LABRADOR, J.:chanrobles virtual law library
This is an appeal from a decision of the Court of First Instance of Davao,
Hon. Vicente N. Cusi, Jr., presiding, in Special Proceeding No. 622 of said
court, dated September 14, 1949, approving among things the final accounts
of the executor, directing the executor to reimburse Maria Lucy Christensen
the amount of P3,600 paid by her to Helen Christensen Garcia as her legacy,
and declaring Maria Lucy Christensen entitled to the residue of the property
to be enjoyed during her lifetime, and in case of death without issue, one-half
of said residue to be payable to Mrs. Carrie Louise C. Borton, etc., in
accordance with the provisions of the will of the testator Edward E.
Christensen. The will was executed in Manila on March 5, 1951 and contains
the following provisions:
3. I declare ... that I have but ONE (1) child, named MARIA LUCY
CHRISTENSEN (now Mrs. Bernard Daney), who was born in the Philippines
about twenty-eight years ago, and who is now residing at No. 665 Rodger
Young Village, Los Angeles, California, U.S.A.
4. I further declare that I now have no living ascendants, and no descendants
except my above named daughter, MARIA LUCY CHRISTENSEN DANEY.
xxx xxx x x xchanrobles virtual law library
7. I give, devise and bequeath unto MARIA HELEN CHRISTENSEN, now
married to Eduardo Garcia, about eighteen years of age and who,
notwithstanding the fact that she was baptized Christensen, is not in any way
related to me, nor has she been at any time adopted by me, and who, from
all information I have now resides in Egpit, Digos, Davao, Philippines, the
sum of THREE THOUSAND SIX HUNDRED PESOS (P3,600.00), Philippine
Currency the same to be deposited in trust for the said Maria Helen
Christensen with the Davao Branch of the Philippine National Bank, and paid
to her at the rate of One Hundred Pesos (P100.00), Philippine Currency per
month until the principal thereof as well as any interest which may have
accrued thereon, is exhausted..
xxx xxx x x xchanrobles virtual law library
12. I hereby give, devise and bequeath, unto my well-beloved daughter, the
said MARIA LUCY CHRISTENSEN DANEY (Mrs. Bernard Daney), now
residing as aforesaid at No. 665 Rodger Young Village, Los Angeles,
California, U.S.A., all the income from the rest, remainder, and residue of my
property and estate, real, personal and/or mixed, of whatsoever kind or
character, and wheresoever situated, of which I may be possessed at my
death and which may have come to me from any source whatsoever, during
her lifetime: ....
It is in accordance with the above-quoted provisions that the executor in his
final account and project of partition ratified the payment of only P3,600 to
Helen Christensen Garcia and proposed that the residue of the estate be
transferred to his daughter, Maria Lucy Christensen.
Opposition to the approval of the project of partition was filed by Helen
Christensen Garcia, insofar as it deprives her (Helen) of her legitime as an
acknowledged natural child, she having been declared by Us in G.R. Nos. L-
11483-84 an acknowledged natural child of the deceased Edward E.
Christensen. The legal grounds of opposition are (a) that the distribution
should be governed by the laws of the Philippines, and (b) that said order of
distribution is contrary thereto insofar as it denies to Helen Christensen, one
of two acknowledged natural children, one-half of the estate in full ownership.
In amplification of the above grounds it was alleged that the law that should
govern the estate of the deceased Christensen should not be the internal law
of California alone, but the entire law thereof because several foreign
elements are involved, that the forum is the Philippines and even if the case
were decided in California, Section 946 of the California Civil Code, which
requires that the domicile of the decedent should apply, should be applicable.
It was also alleged that Maria Helen Christensen having been declared an
acknowledged natural child of the decedent, she is deemed for all purposes
legitimate from the time of her birth.
The court below ruled that as Edward E. Christensen was a citizen of the
United States and of the State of California at the time of his death, the
successional rights and intrinsic validity of the provisions in his will are to be
governed by the law of California, in accordance with which a testator has
the right to dispose of his property in the way he desires, because the right of
absolute dominion over his property is sacred and inviolable (In re
McDaniel's Estate, 77 Cal. Appl. 2d 877, 176 P. 2d 952, and In re Kaufman,
117 Cal. 286, 49 Pac. 192, cited in page 179, Record on Appeal). Oppositor
Maria Helen Christensen, through counsel, filed various motions for
reconsideration, but these were denied. Hence, this appeal.
The most important assignments of error are as follows:
Ichanrobles virtual law library
THE LOWER COURT ERRED IN IGNORING THE DECISION OF THE
HONORABLE SUPREME COURT THAT HELEN IS THE ACKNOWLEDGED
NATURAL CHILD OF EDWARD E. CHRISTENSEN AND,
CONSEQUENTLY, IN DEPRIVING HER OF HER JUST SHARE IN THE
INHERITANCE.
IIchanrobles virtual law library
THE LOWER COURT ERRED IN ENTIRELY IGNORING AND/OR FAILING
TO RECOGNIZE THE EXISTENCE OF SEVERAL FACTORS, ELEMENTS
AND CIRCUMSTANCES CALLING FOR THE APPLICATION OF INTERNAL
LAW.
IIIchanrobles virtual law library
THE LOWER COURT ERRED IN FAILING TO RECOGNIZE THAT UNDER
INTERNATIONAL LAW, PARTICULARLY UNDER THE RENVOI
DOCTRINE, THE INTRINSIC VALIDITY OF THE TESTAMENTARY
DISPOSITION OF THE DISTRIBUTION OF THE ESTATE OF THE
DECEASED EDWARD E. CHRISTENSEN SHOULD BE GOVERNED BY
THE LAWS OF THE PHILIPPINES.
IVchanrobles virtual law library
THE LOWER COURT ERRED IN NOT DECLARING THAT THE SCHEDULE
OF DISTRIBUTION SUBMITTED BY THE EXECUTOR IS CONTRARY TO
THE PHILIPPINE LAWS.
Vchanrobles virtual law library
THE LOWER COURT ERRED IN NOT DECLARING THAT UNDER THE
PHILIPPINE LAWS HELEN CHRISTENSEN GARCIA IS ENTITLED TO
ONE-HALF (1/2) OF THE ESTATE IN FULL OWNERSHIP.
There is no question that Edward E. Christensen was a citizen of the United
States and of the State of California at the time of his death. But there is also
no question that at the time of his death he was domiciled in the Philippines,
as witness the following facts admitted by the executor himself in appellee's
brief:
In the proceedings for admission of the will to probate, the facts of record
show that the deceased Edward E. Christensen was born on November 29,
1875 in New York City, N.Y., U.S.A.; his first arrival in the Philippines, as an
appointed school teacher, was on July 1, 1901, on board the U.S. Army
Transport "Sheridan" with Port of Embarkation as the City of San Francisco,
in the State of California, U.S.A. He stayed in the Philippines until 1904.
In December, 1904, Mr. Christensen returned to the United States and
stayed there for the following nine years until 1913, during which time he
resided in, and was teaching school in Sacramento, California.
Mr. Christensen's next arrival in the Philippines was in July of the year 1913.
However, in 1928, he again departed the Philippines for the United States
and came back here the following year, 1929. Some nine years later, in
1938, he again returned to his own country, and came back to the Philippines
the following year, 1939.
Wherefore, the parties respectfully pray that the foregoing stipulation of facts
be admitted and approved by this Honorable Court, without prejudice to the
parties adducing other evidence to prove their case not covered by this
stipulation of facts.
Being an American citizen, Mr. Christensen was interned by the Japanese
Military Forces in the Philippines during World War II. Upon liberation, in April
1945, he left for the United States but returned to the Philippines in
December, 1945. Appellees Collective Exhibits "6", CFI Davao, Sp. Proc.
622, as Exhibits "AA", "BB" and "CC-Daney"; Exhs. "MM", "MM-l", "MM-2-
Daney" and p. 473, t.s.n., July 21, 1953.)chanrobles virtual law library
In April, 1951, Edward E. Christensen returned once more to California
shortly after the making of his last will and testament (now in question herein)
which he executed at his lawyers' offices in Manila on March 5, 1951. He
died at the St. Luke's Hospital in the City of Manila on April 30, 1953. (pp. 2-
3)
In arriving at the conclusion that the domicile of the deceased is the
Philippines, we are persuaded by the fact that he was born in New York,
migrated to California and resided there for nine years, and since he came to
the Philippines in 1913 he returned to California very rarely and only for short
visits (perhaps to relatives), and considering that he appears never to have
owned or acquired a home or properties in that state, which would indicate
that he would ultimately abandon the Philippines and make home in the State
of California.
Sec. 16. Residence is a term used with many shades of meaning from mere
temporary presence to the most permanent abode. Generally, however, it is
used to denote something more than mere physical presence. (Goodrich on
Conflict of Laws, p. 29)
As to his citizenship, however, We find that the citizenship that he acquired in
California when he resided in Sacramento, California from 1904 to 1913, was
never lost by his stay in the Philippines, for the latter was a territory of the
United States (not a state) until 1946 and the deceased appears to have
considered himself as a citizen of California by the fact that when he
executed his will in 1951 he declared that he was a citizen of that State; so
that he appears never to have intended to abandon his California citizenship
by acquiring another. This conclusion is in accordance with the following
principle expounded by Goodrich in his Conflict of Laws.
The terms "'residence" and "domicile" might well be taken to mean the same
thing, a place of permanent abode. But domicile, as has been shown, has
acquired a technical meaning. Thus one may be domiciled in a place where
he has never been. And he may reside in a place where he has no domicile.
The man with two homes, between which he divides his time, certainly
resides in each one, while living in it. But if he went on business which would
require his presence for several weeks or months, he might properly be said
to have sufficient connection with the place to be called a resident. It is clear,
however, that, if he treated his settlement as continuing only for the particular
business in hand, not giving up his former "home," he could not be a
domiciled New Yorker. Acquisition of a domicile of choice requires the
exercise of intention as well as physical presence. "Residence simply
requires bodily presence of an inhabitant in a given place, while domicile
requires bodily presence in that place and also an intention to make it one's
domicile." Residence, however, is a term used with many shades of
meaning, from the merest temporary presence to the most permanent abode,
and it is not safe to insist that any one use et the only proper one. (Goodrich,
p. 29)
The law that governs the validity of his testamentary dispositions is defined in
Article 16 of the Civil Code of the Philippines, which is as follows:
ART. 16. Real property as well as personal property is subject to the law of
the country where it is situated.
However, intestate and testamentary successions, both with respect to the
order of succession and to the amount of successional rights and to the
intrinsic validity of testamentary provisions, shall be regulated by the national
law of the person whose succession is under consideration, whatever may
be the nature of the property and regardless of the country where said
property may be found.
The application of this article in the case at bar requires the determination of
the meaning of the term "national law" is used therein.
There is no single American law governing the validity of testamentary
provisions in the United States, each state of the Union having its own
private law applicable to its citizens only and in force only within the state.
The "national law" indicated in Article 16 of the Civil Code above quoted can
not, therefore, possibly mean or apply to any general American law. So it can
refer to no other than the private law of the State of California.
The next question is: What is the law in California governing the disposition
of personal property? The decision of the court below, sustains the
contention of the executor-appellee that under the California Probate Code, a
testator may dispose of his property by will in the form and manner he
desires, citing the case of Estate of McDaniel, 77 Cal. Appl. 2d 877, 176 P.
2d 952. But appellant invokes the provisions of Article 946 of the Civil Code
of California, which is as follows:
If there is no law to the contrary, in the place where personal property is
situated, it is deemed to follow the person of its owner, and is governed by
the law of his domicile.
The existence of this provision is alleged in appellant's opposition and is not
denied. We have checked it in the California Civil Code and it is there.
Appellee, on the other hand, relies on the case cited in the decision and
testified to by a witness. (Only the case of Kaufman is correctly cited.) It is
argued on executor's behalf that as the deceased Christensen was a citizen
of the State of California, the internal law thereof, which is that given in the
abovecited case, should govern the determination of the validity of the
testamentary provisions of Christensen's will, such law being in force in the
State of California of which Christensen was a citizen. Appellant, on the other
hand, insists that Article 946 should be applicable, and in accordance
therewith and following the doctrine of the renvoi, the question of the validity
of the testamentary provision in question should be referred back to the law
of the decedent's domicile, which is the Philippines.
The theory of doctrine of renvoi has been defined by various authors, thus:
The problem has been stated in this way: "When the Conflict of Laws rule of
the forum refers a jural matter to a foreign law for decision, is the reference to
the purely internal rules of law of the foreign system; i.e., to the totality of the
foreign law minus its Conflict of Laws rules?"chanrobles virtual law library
On logic, the solution is not an easy one. The Michigan court chose to accept
the renvoi, that is, applied the Conflict of Laws rule of Illinois which referred
the matter back to Michigan law. But once having determined the the Conflict
of Laws principle is the rule looked to, it is difficult to see why the reference
back should not have been to Michigan Conflict of Laws. This would have
resulted in the "endless chain of references" which has so often been
criticized be legal writers. The opponents of the renvoi would have looked
merely to the internal law of Illinois, thus rejecting the renvoi or the reference
back. Yet there seems no compelling logical reason why the original
reference should be the internal law rather than to the Conflict of Laws rule. It
is true that such a solution avoids going on a merry-go-round, but those who
have accepted the renvoi theory avoid this inextricabilis circulas by getting off
at the second reference and at that point applying internal law. Perhaps the
opponents of the renvoi are a bit more consistent for they look always to
internal law as the rule of reference.
Strangely enough, both the advocates for and the objectors to
the renvoi plead that greater uniformity will result from adoption of their
respective views. And still more strange is the fact that the only way to
achieve uniformity in this choice-of-law problem is if in the dispute the two
states whose laws form the legal basis of the litigation disagree as to whether
the renvoi should be accepted. If both reject, or both accept the doctrine, the
result of the litigation will vary with the choice of the forum. In the case stated
above, had the Michigan court rejected the renvoi, judgment would have
been against the woman; if the suit had been brought in the Illinois courts,
and they too rejected the renvoi, judgment would be for the woman. The
same result would happen, though the courts would switch with respect to
which would hold liability, if both courts accepted the renvoi.
The Restatement accepts the renvoi theory in two instances: where the title
to land is in question, and where the validity of a decree of divorce is
challenged. In these cases the Conflict of Laws rule of the situs of the land,
or the domicile of the parties in the divorce case, is applied by the forum, but
any further reference goes only to the internal law. Thus, a person's title to
land, recognized by the situs, will be recognized by every court; and every
divorce, valid by the domicile of the parties, will be valid everywhere.
(Goodrich, Conflict of Laws, Sec. 7, pp. 13-14.)chanrobles virtual law library
X, a citizen of Massachusetts, dies intestate, domiciled in France, leaving
movable property in Massachusetts, England, and France. The question
arises as to how this property is to be distributed among X's next of kin.
Assume (1) that this question arises in a Massachusetts court. There the rule
of the conflict of laws as to intestate succession to movables calls for an
application of the law of the deceased's last domicile. Since by hypothesis
X's last domicile was France, the natural thing for the Massachusetts court to
do would be to turn to French statute of distributions, or whatever
corresponds thereto in French law, and decree a distribution accordingly. An
examination of French law, however, would show that if a French court were
called upon to determine how this property should be distributed, it would
refer the distribution to the national law of the deceased, thus applying the
Massachusetts statute of distributions. So on the surface of things the
Massachusetts court has open to it alternative course of action: (a) either to
apply the French law is to intestate succession, or (b) to resolve itself into a
French court and apply the Massachusetts statute of distributions, on the
assumption that this is what a French court would do. If it accepts the so-
called renvoi doctrine, it will follow the latter course, thus applying its own
law.
This is one type of renvoi. A jural matter is presented which the conflict-of-
laws rule of the forum refers to a foreign law, the conflict-of-laws rule of
which, in turn, refers the matter back again to the law of the forum. This is
renvoi in the narrower sense. The German term for this judicial process is
'Ruckverweisung.'" (Harvard Law Review, Vol. 31, pp. 523-571.)chanrobles
virtual law library
After a decision has been arrived at that a foreign law is to be resorted to as
governing a particular case, the further question may arise: Are the rules as
to the conflict of laws contained in such foreign law also to be resorted to?
This is a question which, while it has been considered by the courts in but a
few instances, has been the subject of frequent discussion by textwriters and
essayists; and the doctrine involved has been descriptively designated by
them as the "Renvoyer" to send back, or the "Ruchversweisung", or the
"Weiterverweisung", since an affirmative answer to the question postulated
and the operation of the adoption of the foreign law in toto would in many
cases result in returning the main controversy to be decided according to the
law of the forum. ... (16 C.J.S. 872.)chanrobles virtual law library
Another theory, known as the "doctrine of renvoi", has been advanced. The
theory of the doctrine of renvoi is that the court of the forum, in determining
the question before it, must take into account the whole law of the other
jurisdiction, but also its rules as to conflict of laws, and then apply the law to
the actual question which the rules of the other jurisdiction prescribe. This
may be the law of the forum. The doctrine of the renvoi has generally been
repudiated by the American authorities. (2 Am. Jur. 296)
The scope of the theory of renvoi has also been defined and the reasons for
its application in a country explained by Prof. Lorenzen in an article in the
Yale Law Journal, Vol. 27, 1917-1918, pp. 529-531. The pertinent parts of
the article are quoted herein below:
The recognition of the renvoi theory implies that the rules of the conflict of
laws are to be understood as incorporating not only the ordinary or internal
law of the foreign state or country, but its rules of the conflict of laws as well.
According to this theory 'the law of a country' means the whole of its law.
xxx xxx x x xchanrobles virtual law library
Von Bar presented his views at the meeting of the Institute of International
Law, at Neuchatel, in 1900, in the form of the following theses:chanrobles
virtual law library
(1) Every court shall observe the law of its country as regards the application
of foreign laws.
(2) Provided that no express provision to the contrary exists, the court shall
respect:
(a) The provisions of a foreign law which disclaims the right to bind its
nationals abroad as regards their personal statute, and desires that said
personal statute shall be determined by the law of the domicile, or even by
the law of the place where the act in question occurred.
(b) The decision of two or more foreign systems of law, provided it be certain
that one of them is necessarily competent, which agree in attributing the
determination of a question to the same system of law.
xxx xxx x x xchanrobles virtual law library
If, for example, the English law directs its judge to distribute the personal
estate of an Englishman who has died domiciled in Belgium in accordance
with the law of his domicile, he must first inquire whether the law of Belgium
would distribute personal property upon death in accordance with the law of
domicile, and if he finds that the Belgian law would make the distribution in
accordance with the law of nationality - that is the English law - he must
accept this reference back to his own law.
We note that Article 946 of the California Civil Code is its conflict of laws rule,
while the rule applied in In re Kaufman, Supra, its internal law. If the law on
succession and the conflict of laws rules of California are to be enforced
jointly, each in its own intended and appropriate sphere, the principle cited In
re Kaufman should apply to citizens living in the State, but Article 946 should
apply to such of its citizens as are not domiciled in California but in other
jurisdictions. The rule laid down of resorting to the law of the domicile in the
determination of matters with foreign element involved is in accord with the
general principle of American law that the domiciliary law should govern in
most matters or rights which follow the person of the owner.
When a man dies leaving personal property in one or more states, and
leaves a will directing the manner of distribution of the property, the law of
the state where he was domiciled at the time of his death will be looked to in
deciding legal questions about the will, almost as completely as the law of
situs is consulted in questions about the devise of land. It is logical that, since
the domiciliary rules control devolution of the personal estate in case of
intestate succession, the same rules should determine the validity of an
attempted testamentary dispostion of the property. Here, also, it is not that
the domiciliary has effect beyond the borders of the domiciliary state. The
rules of the domicile are recognized as controlling by the Conflict of Laws
rules at the situs property, and the reason for the recognition as in the case
of intestate succession, is the general convenience of the doctrine. The New
York court has said on the point: 'The general principle that a dispostiton of a
personal property, valid at the domicile of the owner, is valid anywhere, is
one of the universal application. It had its origin in that international comity
which was one of the first fruits of civilization, and it this age, when business
intercourse and the process of accumulating property take but little notice of
boundary lines, the practical wisdom and justice of the rule is more apparent
than ever. (Goodrich, Conflict of Laws, Sec. 164, pp. 442-443.)
Appellees argue that what Article 16 of the Civil Code of the Philippines
pointed out as the national law is the internal law of California. But as above
explained the laws of California have prescribed two sets of laws for its
citizens, one for residents therein and another for those domiciled in other
jurisdictions. Reason demands that We should enforce the California internal
law prescribed for its citizens residing therein, and enforce the conflict of laws
rules for the citizens domiciled abroad. If we must enforce the law of
California as in comity we are bound to go, as so declared in Article 16 of our
Civil Code, then we must enforce the law of California in accordance with the
express mandate thereof and as above explained, i.e., apply the internal law
for residents therein, and its conflict-of-laws rule for those domiciled abroad.
It is argued on appellees' behalf that the clause "if there is no law to the
contrary in the place where the property is situated" in Sec. 946 of the
California Civil Code refers to Article 16 of the Civil Code of the Philippines
and that the law to the contrary in the Philippines is the provision in said
Article 16 that the national law of the deceased should govern. This
contention can not be sustained. As explained in the various authorities cited
above the national law mentioned in Article 16 of our Civil Code is the law on
conflict of laws in the California Civil Code, i.e., Article 946, which authorizes
the reference or return of the question to the law of the testator's domicile.
The conflict of laws rule in California, Article 946, Civil Code, precisely refers
back the case, when a decedent is not domiciled in California, to the law of
his domicile, the Philippines in the case at bar. The court of the domicile can
not and should not refer the case back to California; such action would leave
the issue incapable of determination because the case will then be like a
football, tossed back and forth between the two states, between the country
of which the decedent was a citizen and the country of his domicile. The
Philippine court must apply its own law as directed in the conflict of laws rule
of the state of the decedent, if the question has to be decided, especially as
the application of the internal law of California provides no legitime for
children while the Philippine law, Arts. 887(4) and 894, Civil Code of the
Philippines, makes natural children legally acknowledged forced heirs of the
parent recognizing them.
The Philippine cases (In re Estate of Johnson, 39 Phil. 156; Riera vs.
Palmaroli, 40 Phil. 105; Miciano vs. Brimo, 50 Phil. 867; Babcock Templeton
vs. Rider Babcock, 52 Phil. 130; and Gibbs vs. Government, 59 Phil. 293.)
cited by appellees to support the decision can not possibly apply in the case
at bar, for two important reasons, i.e., the subject in each case does not
appear to be a citizen of a state in the United States but with domicile in the
Philippines, and it does not appear in each case that there exists in the state
of which the subject is a citizen, a law similar to or identical with Art. 946 of
the California Civil Code.
We therefore find that as the domicile of the deceased Christensen, a citizen
of California, is the Philippines, the validity of the provisions of his will
depriving his acknowledged natural child, the appellant, should be governed
by the Philippine Law, the domicile, pursuant to Art. 946 of the Civil Code of
California, not by the internal law of California.
WHEREFORE, the decision appealed from is hereby reversed and the case
returned to the lower court with instructions that the partition be made as the
Philippine law on succession provides. Judgment reversed, with costs
against appellees.
Padilla, Bautista Angelo, Concepcion, Reyes, Barrera, Paredes, Dizon,
Regala and Makalintal, JJ., concur.
Bengzon, C.J., took no part.
Republic of the Philippines
SUPREME COURT
Manila
EN BANC
G.R. No. L-23678 June 6, 1967
TESTATE ESTATE OF AMOS G. BELLIS, deceased.
PEOPLE'S BANK and TRUST COMPANY, executor.
MARIA CRISTINA BELLIS and MIRIAM PALMA BELLIS, oppositors-
appellants,
vs.
EDWARD A. BELLIS, ET AL., heirs-appellees.
Vicente R. Macasaet and Jose D. Villena for oppositors appellants.
Paredes, Poblador, Cruz and Nazareno for heirs-appellees E. A. Bellis, et al.
Quijano and Arroyo for heirs-appellees W. S. Bellis, et al.
J. R. Balonkita for appellee People's Bank & Trust Company.
Ozaeta, Gibbs and Ozaeta for appellee A. B. Allsman.
BENGZON, J.P., J.:
This is a direct appeal to Us, upon a question purely of law, from an order of
the Court of First Instance of Manila dated April 30, 1964, approving the
project of partition filed by the executor in Civil Case No. 37089
therein.1äwphï1.ñët
The facts of the case are as follows:
Amos G. Bellis, born in Texas, was "a citizen of the State of Texas and of the
United States." By his first wife, Mary E. Mallen, whom he divorced, he had
five legitimate children: Edward A. Bellis, George Bellis (who pre-deceased
him in infancy), Henry A. Bellis, Alexander Bellis and Anna Bellis Allsman; by
his second wife, Violet Kennedy, who survived him, he had three legitimate
children: Edwin G. Bellis, Walter S. Bellis and Dorothy Bellis; and finally, he
had three illegitimate children: Amos Bellis, Jr., Maria Cristina Bellis and
Miriam Palma Bellis.
On August 5, 1952, Amos G. Bellis executed a will in the Philippines, in
which he directed that after all taxes, obligations, and expenses of
administration are paid for, his distributable estate should be divided, in trust,
in the following order and manner: (a) $240,000.00 to his first wife, Mary E.
Mallen; (b) P120,000.00 to his three illegitimate children, Amos Bellis, Jr.,
Maria Cristina Bellis, Miriam Palma Bellis, or P40,000.00 each and (c) after
the foregoing two items have been satisfied, the remainder shall go to his
seven surviving children by his first and second wives, namely: Edward A.
Bellis, Henry A. Bellis, Alexander Bellis and Anna Bellis Allsman, Edwin G.
Bellis, Walter S. Bellis, and Dorothy E. Bellis, in equal shares.1äwphï1.ñët
Subsequently, or on July 8, 1958, Amos G. Bellis died a resident of San
Antonio, Texas, U.S.A. His will was admitted to probate in the Court of First
Instance of Manila on September 15, 1958.
The People's Bank and Trust Company, as executor of the will, paid all the
bequests therein including the amount of $240,000.00 in the form of shares
of stock to Mary E. Mallen and to the three (3) illegitimate children, Amos
Bellis, Jr., Maria Cristina Bellis and Miriam Palma Bellis, various amounts
totalling P40,000.00 each in satisfaction of their respective legacies, or a total
of P120,000.00, which it released from time to time according as the lower
court approved and allowed the various motions or petitions filed by the latter
three requesting partial advances on account of their respective legacies.
On January 8, 1964, preparatory to closing its administration, the executor
submitted and filed its "Executor's Final Account, Report of Administration
and Project of Partition" wherein it reported, inter alia, the satisfaction of the
legacy of Mary E. Mallen by the delivery to her of shares of stock amounting
to $240,000.00, and the legacies of Amos Bellis, Jr., Maria Cristina Bellis and
Miriam Palma Bellis in the amount of P40,000.00 each or a total of
P120,000.00. In the project of partition, the executor — pursuant to the
"Twelfth" clause of the testator's Last Will and Testament — divided the
residuary estate into seven equal portions for the benefit of the testator's
seven legitimate children by his first and second marriages.
On January 17, 1964, Maria Cristina Bellis and Miriam Palma Bellis filed their
respective oppositions to the project of partition on the ground that they were
deprived of their legitimes as illegitimate children and, therefore, compulsory
heirs of the deceased.
Amos Bellis, Jr. interposed no opposition despite notice to him, proof of
service of which is evidenced by the registry receipt submitted on April 27,
1964 by the executor.1
After the parties filed their respective memoranda and other pertinent
pleadings, the lower court, on April 30, 1964, issued an order overruling the
oppositions and approving the executor's final account, report and
administration and project of partition. Relying upon Art. 16 of the Civil Code,
it applied the national law of the decedent, which in this case is Texas law,
which did not provide for legitimes.
Their respective motions for reconsideration having been denied by the lower
court on June 11, 1964, oppositors-appellants appealed to this Court to raise
the issue of which law must apply — Texas law or Philippine law.
In this regard, the parties do not submit the case on, nor even discuss, the
doctrine of renvoi, applied by this Court in Aznar v. Christensen Garcia, L-
16749, January 31, 1963. Said doctrine is usually pertinent where the
decedent is a national of one country, and a domicile of another. In the
present case, it is not disputed that the decedent was both a national of
Texas and a domicile thereof at the time of his death.2 So that even
assuming Texas has a conflict of law rule providing that the domiciliary
system (law of the domicile) should govern, the same would not result in a
reference back (renvoi) to Philippine law, but would still refer to Texas law.
Nonetheless, if Texas has a conflicts rule adopting the situs theory (lex rei
sitae) calling for the application of the law of the place where the properties
are situated, renvoi would arise, since the properties here involved are found
in the Philippines. In the absence, however, of proof as to the conflict of law
rule of Texas, it should not be presumed different from ours.3 Appellants'
position is therefore not rested on the doctrine of renvoi. As stated, they
never invoked nor even mentioned it in their arguments. Rather, they argue
that their case falls under the circumstances mentioned in the third
paragraph of Article 17 in relation to Article 16 of the Civil Code.
Article 16, par. 2, and Art. 1039 of the Civil Code, render applicable the
national law of the decedent, in intestate or testamentary successions, with
regard to four items: (a) the order of succession; (b) the amount of
successional rights; (e) the intrinsic validity of the provisions of the will; and
(d) the capacity to succeed. They provide that —
ART. 16. Real property as well as personal property is subject to the
law of the country where it is situated.
However, intestate and testamentary successions, both with respect
to the order of succession and to the amount of successional rights
and to the intrinsic validity of testamentary provisions, shall be
regulated by the national law of the person whose succession is
under consideration, whatever may he the nature of the property and
regardless of the country wherein said property may be found.
ART. 1039. Capacity to succeed is governed by the law of the nation
of the decedent.
Appellants would however counter that Art. 17, paragraph three, of the Civil
Code, stating that —
Prohibitive laws concerning persons, their acts or property, and those
which have for their object public order, public policy and good
customs shall not be rendered ineffective by laws or judgments
promulgated, or by determinations or conventions agreed upon in a
foreign country.
prevails as the exception to Art. 16, par. 2 of the Civil Code afore-quoted.
This is not correct. Precisely, Congress deleted the phrase, "notwithstanding
the provisions of this and the next preceding article" when they incorporated
Art. 11 of the old Civil Code as Art. 17 of the new Civil Code, while
reproducing without substantial change the second paragraph of Art. 10 of
the old Civil Code as Art. 16 in the new. It must have been their purpose to
make the second paragraph of Art. 16 a specific provision in itself which must
be applied in testate and intestate succession. As further indication of this
legislative intent, Congress added a new provision, under Art. 1039, which
decrees that capacity to succeed is to be governed by the national law of the
decedent.
It is therefore evident that whatever public policy or good customs may be
involved in our System of legitimes, Congress has not intended to extend the
same to the succession of foreign nationals. For it has specifically chosen to
leave, inter alia, the amount of successional rights, to the decedent's national
law. Specific provisions must prevail over general ones.
Appellants would also point out that the decedent executed two wills — one
to govern his Texas estate and the other his Philippine estate — arguing
from this that he intended Philippine law to govern his Philippine estate.
Assuming that such was the decedent's intention in executing a separate
Philippine will, it would not alter the law, for as this Court ruled in Miciano v.
Brimo, 50 Phil. 867, 870, a provision in a foreigner's will to the effect that his
properties shall be distributed in accordance with Philippine law and not with
his national law, is illegal and void, for his national law cannot be ignored in
regard to those matters that Article 10 — now Article 16 — of the Civil Code
states said national law should govern.
The parties admit that the decedent, Amos G. Bellis, was a citizen of the
State of Texas, U.S.A., and that under the laws of Texas, there are no forced
heirs or legitimes. Accordingly, since the intrinsic validity of the provision of
the will and the amount of successional rights are to be determined under
Texas law, the Philippine law on legitimes cannot be applied to the testacy of
Amos G. Bellis.

Wherefore, the order of the probate court is hereby affirmed in toto, with
costs against appellants. So ordered.

Concepcion, C.J., Reyes, J.B.L., Dizon, Regala, Makalintal, Zaldivar,

Sanchez and Castro, JJ., concur.