STATCON PART V

INTERPRETATION OF WORDS

I. “EXCLUSIVE”

ALFON V. REPUBLIC [GR L-51201, 29 MAY 1980]

Second Division, Abad Santos (p): 4 concur

Facts: Maria Estrella Veronica Primitiva Duterte was born on 15 May 1952 at the UST Hospital to Filomeno Duterte and
Estrella. She was registered at the Local Civil Registrar’s Office as Maria Estrella Veronica Primitiva Duterte. On 15 June
1952, she was baptized as Maria Estrella Veronica Primitiva Duterte at the St. Anthony de Padua Church, Singalong,
Manila. Estrella Veronica Primitiva Duterte has been taken cared of by Mr. and Mrs. Hector Alfon. She lived in
Mandaluyong for 23 years with her uncle, Hector Alfon. When Maria Estrella started schooling, she used the name
Estrella S. Alfon. She attended her first grade up to fourth year high school at Stella Maris College using the name
Estrella S. Alfon. After graduating from high school she enrolled at the Arellano University and finished Bachelor of
Science in Nursing. Her scholastic records from elementary to college show that she was registered by the name of
Estrella S. Alfon. Petitioner has exercised her right of suffrage under the same name. She has not committed any felony
or misdemeanor.

She filed a verified petition on 28 April 1978 praying that her name be changed from Maria Estrella Veronica Primitiva
Duterte to Estrella S. Alfon. The CFI (Branch XXIII) partially denied petitioner’s prayer on 29 December 1978, granting
the change of first name but not the surname.

The Supreme Court modified the appealed order in as much as that petitioner is allowed to change not only her first
name but also her surname so as to be known as Estrella S. Alfon; without costs.

1. Principally is not equivalent to exclusively

The word “principally” as used in article 364 of the Civil Code is not equivalent to “exclusively” so that there is no legal
obstacle if a legitimate or legitimated child should choose to use the surname of its mother to which it is equally
entitled. In the case at bar, the lower court erred in reasoning that as legitimate child of Filomeno Duterte and Estrella
Alfon she should principally use the surname of her father.

2. Grounds for change of name

The following may be considered, among others, as proper or reasonable causes that may warrant the grant of a
petitioner for change of name; (1) when the name is ridiculous, tainted with dishonor, or is extremely difficult to write or
pronounce; (2) when the request for change is a consequence of a change of status, such as when a natural child is
acknowledged or legitimated; and (3) when the change is necessary to avoid confusion (1 Tolentino 660, Civil Code of
the Philippines, 1953 ed; Haw Liong v. Republic). In the case at bar, to avoid confusion, the petition of name should be
granted as the petitioner has been using the name of Estrella S. Alfon since childhood.

“Exclusive”

THORNTON V. THORNTON, G.R. NO. 154598, AUG. 16, 2004

FACTS: Petitioner was an American, respondent was a Filipino. They were married and had one daughter. After 3 years,
the woman grew restless and bored as a plain housewife and wanted to return to her old job as GRO in a nightclub. One
day, the woman left the family home together with their daughter and told her servants that she was going to Basilan.
The husband filed a petition for habeas corpus in the designated Family Court in Makati City but was dismissed because
the child was in Basilan. When he went to Basilan, he didn’t find them and the barangay office issued a certification that
respondent was no longer residing there. Petitioner filed another petition for habeas corpus in CA which could issue a
writ of habeas corpus enforceable in the entire country. The petition was denied by CA on the ground that it did not
have jurisdiction over the case since RA 8369 (Family Courts Act of 1997) gave family courts exclusive jurisdiction over
petitions for habeas corpus, it impliedly repealed RA 7902 (An Act Expanding the Jurisdiction of CA) and B.P 129 (The
judiciary Reorganization Act of 1980.)

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ISSUE: W/N CA has jurisdiction to issue writs of habeas corpus in cases involving custody of minors in light of the
provision in RA 8369 giving family courts exclusive jurisdiction over such petitions.

HELD: Petition granted. CA should take cognizance of the case because nothing in RA 8369 revoked its jurisdiction to
issue writs of habeas corpus involving custody of minors. The reasoning of CA cant be affirmed because it will result to
iniquitous, leaving petitioners without legal course in obtaining custody. The minor could be transferred from one place
to another and habeas corpus case will be left without legal remedy since family courts take cognizance only cases
within their jurisdiction. Literal interpretation would render it meaningless, lead to absurdity, injustice, and
contradiction. The literal interpretation of “exclusive” will result in grave injustice and negate the policy to protect the
rights and promote welfare of children.

FACTS:

Petitioner, an American, and respondent, a Filipino, were married on August 28, 1998 in the Catholic Evangelical
Church at United Nations Avenue, Manila. A year later, respondent gave birth to a baby girl whom they named
Sequeira Jennifer Delle Francisco Thornton.

However, after three years, respondent grew restless and bored as a plain housewife. She wanted to return to her old
job as a "guest relations officer" in a nightclub, with the freedom to go out with her friends.Petitioner admonished
respondent about her irresponsibility but she continued her carefree ways. On December 7, 2001, respondent left the
family home with her daughter Sequiera without notifying her husband. She told the servants that she was bringing
Sequiera to Purok Marikit, Sta. Clara, Lamitan, Basilan Province.

Petitioner filed a petition for habeas corpus in the designated Family Court in Makati City but this was dismissed,
presumably because of the allegation that the child was in Basilan. Petitioner then went to Basilan to ascertain the
whereabouts of respondent and their daughter. However, he did not find them there and the barangay office of Sta.
Clara, Lamitan, Basilan, issued a certification3 that respondent was no longer residing there. Petitioner then filed
another petition for habeas corpus, this time in the Court of Appeals which could issue a writ of habeas corpus
enforceable in the entire country. However, the petition was denied by the Court of Appeals on the ground that it did
not have jurisdiction over the case.

ISSUE:

Whether or not RA 8369 impliedly repeal BP 129 and RA 7902.

HELD: The petition was Granted. The provisions of RA 8369 reveal no manifest intent to revoke the jurisdiction of the
Court of Appeals and Supreme Court to issue writs of habeas corpus relating to the custody of minors. Further, it
cannot be said that the provisions of RA 8369, RA 7092 and BP 129 are absolutely incompatible since RA 8369 does not
prohibit the Court of Appeals and the Supreme Court from issuing writs of habeas corpus in cases involving the custody
of minors. Thus, the provisions of RA 8369 must be read in harmony with RA 7029 and BP 129 ― that family courts have
concurrent jurisdiction with the Court of Appeals and the Supreme Court in petitions for habeas corpus where the
custody of minors is at issue.

II. “SHALL”
BARANDA VS. GUSTILO
GR NO. 81163 SEPTEMBER 26, 1988

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FACTS:

A parcel of land designated as Lot No. 4517 of the Cadastral Survey of Sta. Barbara, Iloilo covered by original certificate
of title no. 6406 is the land subject of the dispute between petitioner (Eduardo S. Baranda and Alfonso Hitalia) and
respondents(Gregorio Perez, Maria Gotera and Susan Silao). Both parties claimed ownership and possession over the
said land. However during the trial, it was found that the transfer certificate of title held by respondents was
fraudulently acquired. So the transfer certificate of title was ordered to be put in the name of petitioners. In compliance
with the order or the RTC, the Acting Register of Deeds Avito Saclauso annotated the order declaring TCT T-25772 null
and void, cancelled the same and issued new certificate of titles in the name of petitioners. However, by reason of a
separate case pending in the Court of Appeals, a notice of lis pendens was annotated in the new certificate of title. This
prompted the petitioners to move for the cancellation of the notice of lis pendens in the new certificates. Judge Tito
Gustilo then ordered the Acting Register of Deeds for the cancellation of the notice of lis pendens but the Acting
Register of Deeds filed a motion for reconsideration invoking Sec 77 of PD 1529.

ISSUE:

What is the nature of the duty of the Register of Deeds to annotate or annul a notice of lis pendens in a Torrens
certificate of title?

HELD:

Judge Gustilo abused his discretion in sustaining the Acting Register of Deed’s stand that the notice of lis pendens
cannot be cancelled on the ground of pendency of the case in the Court of Appeals. The function of the Register of
Deeds with reference to the registration of deeds, encumbrances, instrument and the like is ministerial in nature. The
acting register of deeds did not have any legal standing to file a motionfor reconsideration of the Judge’s Order
directing him to cancel the notice of lis pendens. Sec. 10 of PD 1529 states that: “It shall be the duty of the register of
deeds to immediately register an instrument presented for registration dealing with real or personal property which
complies with all the requisites for registration.

If the instrument is not registerable, he shall forthwith deny registration thereof and in form the presentor or such
denial in writing, stating the ground and reasons therefore, and advising him of his right to appeal by consulta in
accordance with Sec 117 of this decree.” On the other hand, Sec 117 of PD 117 states that: “When the Register of Deeds
is in doubt with regard to the proper step to be taken or memoranda to be made in pursuance of any deed, mortgage or
other instrument presented to him for registration or where any party in interest does not agree with the action taken
by the Register of Deeds with reference to any such instrument, the question shall be submitted to the Commission of
Land Registration by the Register of Deeds, or by the party in interest through the Register of Deeds.”

DIRECTOR OF LANDS VS. CA

[G.R. NO. 102858. JULY 28, 1997]

FACTS:

Teodoro Abistado filed a petition for original registration of his title over 648 square meters of land under Presidential
Decree (P.D.) No. 1529. The land registration court in its decision dated June 13, 1989 dismissed the petition “for want
of jurisdiction”, in compliance with the mandatory provision requiring publication of the notice of initial hearing in a
newspaper of general circulation. The case was elevated to respondent Court of Appeals which, set aside the decision
of the trial court and ordered the registration of the title in the name of Teodoro Abistado. The Court of Appeals ruled
that it was merely procedural and that the failure to cause such publication did not deprive the trial court of its authority
to grant the application. The Director of Lands represented by the Solicitor General thus elevated this recourse to the
Supreme Court.

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ISSUE:

Whether or not the Director of Lands is correct that newspaper publication of the notice of initial hearing in an original
land registration case is mandatory.

HELD:

YES. Petition was granted.

RATIO:

The pertinent part of Section 23 of Presidential Decree No. 1529 requires publication of the notice of initial hearing. It
should be noted further that land registration is a proceeding in rem. Being in rem, such proceeding requires
constructive seizure of the land as against all persons, including the state, who have rights to or interests in the
property. An in rem proceeding is validated essentially through publication. This being so, the process must strictly be
complied with.

The Supreme Court has no authority to dispense with such mandatory requirement. The law is unambiguous and its
rationale clear. Time and again, this Court has declared that where the law speaks in clear and categorical language,
there is no room for interpretation, vacillation or equivocation; there is room only for application. There is no
alternative. Thus, the application for land registration filed by private respondents must be dismissed without prejudice
to reapplication in the future, after all the legal requisites shall have been duly complied with.

When “shall” is construed as merely permissive.

DIOKNO V. REHABILITATION FINANCE CORPORATION

G.R. NO. L-4712 (JULY 11, 1952)

FACTS:

Petitioner, the holder of a back-pay certificate of indebtedness issued under RA 304, sought to compel Respondent
company to accept his back-pay certificate as payment of his loan from the latter. His basis was Sec. 2 of RA 304, which
provides that “investment funds or banks or other financial institutions owned or controlled by the government shall
subject to availability of loanable funds … accept or discount at not more than two per centum per annum for ten years
such certificate” for certain specified purposes. Respondent company contended however that the word “shall” used in
this particular section of the law is merely directory. The lower court sustained Respondent company.

ISSUE:

W/N Petitioner can use his back-pay certificate to pay for his loan to Respondent company.

HELD:

No. It is true that in its ordinary signification, the word “shall” is imperative.

However, the rule is not absolute; it may be construed as “may” when required by the context or by the intention of the
statute. The modifier, “at not more than two per centum per annum for ten years.”, the interest to be charged, that the
verbphrase is mandatory because not only the law uses “at not more” but the legislative purpose and intent, to conserve
the value of the back pay certificate for the benefit of the holders, for whose benefit the same have been issued, can be
carried out by fixing a maximum limit for discounts. But as to when the discounting or acceptance shall be made, the
context and the sense demand a contrary interpretation. If the acceptance or discount of the certificate is to be “subject”
to the condition of the availability of loanable funds, it is evident the legislature intended that the acceptance shall be

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allowed on the condition that there are “available loanable funds.” In other words, acceptance or discount is to be
permitted only if there are loanable funds.

When “shall” is construed as merely permissive.

BERCES V. GUINGONA, ET. AL.

G.R. NO. 112099 (FEBRUARY 21, 1995)

FACTS:

Petitioner filed two administrative cases against Respondent mayor of Tiwi, Albay for 1) abuse of authority; and 2)
dishonesty, with the Sangguiniang Panlalawigan. Respondent mayor was convicted, and accordingly, suspended in both
cases. Respondent mayor appealed to the Office of the President and prayed for stay of execution under Sec. 67(b) of the
LGC. The Office of the President stayed execution, citing Sec. 68 of RA 7160 and Sec. 6 of A.O. No. 18. According to
Petitioner, the governing law is RA 7160, which contains a mandatory provision that an appeal shall not prevent a decision
from becoming final and executory. Petitioner further contends that A.O. No. 18 was repealed by RA 7160.

ISSUE:

W/N R.A. 7160 repealed A.O. No. 18.

HELD:

No. Sec. 530(f), RA 7160 did not expressly repeal Sec. 6, A.O. No. 18 because it failed to identify or designate the laws on
executive orders that are intended to be repealed. If there was any repeal, it was by implication which is not favored. In
the absence of an express repeal, a subsequent law cannot be construed as repealing a prior law unless an irreconcilable
inconsistency and repugnancy exists between the two. There is none in this case. The first sentence of Sec. 68 provides
that “an appeal shall not prevent a decision from becoming final or executory.” It gives discretion to reviewing appeals to
stay execution. The term “shall” may be read mandatory or directory, depending upon consideration of the entire
provision where it is found.

III. “May”

CAPATI V. OCAMPO

G.R. NO. L-28742 (APRIL 30, 1982)

FACTS:

Plaintiff, a resident of Pampanga, entered into a sub-contract with the Defendant, a resident of Naga City. The Defendant
completed a construction job for the Plaintiff. However, the construction was completed on a date later than what was
agreed in their contract. Hence, Plaintiff filed in the CFI of Pampanga an action for recovery of consequential damages
due to the delay. Defendant filed a motion to dismiss the complaint on the ground that venue of action was improperly
laid. The CFI of Pampanga dismissed the Plaintiff's complaint on ground of improper venue.

ISSUE:

W/N the dismissal of the complaint on the ground of improper venue was correct.

HELD:

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No. The rule on venue of personal actions cognizable by the CFI is found in Sec. 2(b), Rule 4 of the Rules of Court, which
provides that such "actions may be commenced and tried where the Defendant or any of the Defendants resides or may
be found, or where the Plaintiff or any of the Plaintiffs resides, at the election of the Plaintiff." The word "may" is merely
permissive and operates to confer discretion upon a party. Under ordinary circumstances, the term "may be" connotes
possibility; it does not connote certainty. "May" is an auxillary verb indicating liberty, opportunity, permission or
possibility.

“May”

PHIL. CONSUMERS FOUNDATION , INC. V. NAT’L TELECOMMUNICATIONS COMMISSION

G.R. NO. L-63318 (NOVEMBER 25, 1983)

FACTS:

Respondent Commission approved a revised schedule for Subscriber Investment Plan (SIP) filed by Private Respondent.
Petitioner states that SIP schedule presented by the Private Respondent is pre-mature and, therefore, illegal and

baseless, because the Respondent Commission has not yet promulgated the required rules and regulations implementing
Sec. 2 of P.D. 217 which provides, “The Department of Public Works, Transportation and Communications through its
Board of Communications and/or appropriate agency shall see to it that the herein declared policies for the telephone
industry are immediately implemented and for this purpose pertinent rules and regulations may be promulgated ...”

ISSUE:

W/N Respondent Commission acted with grave abuse of discretion.

HELD:

Yes. P.D. 217 deals with matters so alien, innovative and untested such that existing substantive and procedural laws
would not be applicable. Thus, the SIP was so set up precisely to ensure the financial viability of public
telecommunications companies which in turn assures the enjoyment of the population at minimum cost the benefits of
a telephone facility. Without promulgation of rules and regulation there would be confusion among the rights of Private
Respondent, the consumers and the government itself. The plan to expand the company program and/or improve its
service is laudable, but the expenses should not be shouldered by the telephone subscribers. Considering the multi-
million profits of the company, the cost of expansion and/or improvement should come from part of its huge profits.

Interpretation depends upon the context

PEOPLE VS CA, G.R. NO. 11623 NOT DIGESTED

Petitioners assail a Decision of the Court of Appeals which reversed the Regional Trial Court, Branch 116, of Pasay city
and granted the motion for reinvestigation of private respondent Esam Gadi.

On 31 December 1993, Esam Gadi, a national of Saudi Arabia, was apprehended at the Manila International Airport and
subsequently detained for possession of marijuana.

On 3 January 1994, an information was filed and docketed as Criminal Case No. 94-4826 in the Regional Trial Court,
Branch 116, Pasay City charging Esam Gadi with violation of section 81 Article 11, of the Dangerous Drugs Act, as
amended. Three (3) days later, on 6 January 1994, Esam Gadi filed an "Ex Parte Motion to Reduce Bail," from
P90,000.00 to P30,000.00. This Motion was denied. Esam Gadi then posted a cash bond of P90,000.00 which was
approved by the trial court on 10 January 1994.

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On 9 February 1994, Esam Gadi filed a motion for "reinvestigation,"1 claiming that the seriousness of the offense
charged warranted the grant of his motion. Admitting that this motion was filed beyond the five-day period prescribed
in Section 7, Rule 112 of the Rules of Court,2 he contended that the reglementary period was not mandatory. Section 7,
Rule 112 of the Rules of Court provides:

Sec. 7. When accused lawfully arrested without a warrant. — When a person is lawfully arrested without a
warrant for an offense cognizable by the Regional Trial Court the complaint or information may be filed by the
offended party, peace officer or fiscal without a preliminary investigation having first been conducted, on the basis of
the affidavit of the offended party or arresting officer or person.

However, before the filing of such complaint or information, the person arrested may ask for a preliminary
investigation by a proper officer in accordance with this rule, but he must sign a waiver of the provisions of Article 125 of
the Revised Penal Code, as amended, with the assistance of a lawyer and in case of non-availability of a lawyer, a
responsible person of his own choice. Notwithstanding such waiver, he may apply for bail as provided in the
corresponding rule and the investigation must be terminated fifteen (15) days from its inception.

If the case has been filed in court without a preliminary investigation having been conducted, the accused may
within five (5) days from the time he learns of the filing of the information, ask for a preliminary investigation with the
same right to adduce evidence in his favor in the manner prescribed in this Rule. (Emphasis supplied) The motion for
"reinvestigation" was denied by the trial court.

A motion for reconsideration was likewise turned down on 8 March 1994, the date of his arraignment where Esam Gadi
pleaded not guilty. He then challenged the denial of his motion for "reinvestigation" in a petition for certiorari before
the Court of Appeals.

The Court of Appeals granted the petition and reversed the trial court Order denying reinvestigation. Citing Tan vs.
Securities Exchange Commission,3 the Court of Appeals held that the five-day period for asking reinvestigation was
only permissive, considering the use of the word "may." The appellate court also relied on Go vs. Court of Appeals" and
held that a motion for preliminary investigation may be granted even if trial on the merits had begun, provided that the
motion was filed before arraignment.

In this Petition for Review, the Solicitor General contends that it is a mandatory rule that a motion for preliminary
investigation be filed within five (5) days from the time the accused had learned of the filing of the information. It is also
maintained that Esam Gadi had waived his right to preliminary investigation when he posted bail for his release.

Deliberating on the Petition for Review and the Comment of private respondent, the Court finds that the Court of
Appeals fell into reversible error in granting the motion for "reinvestigation" of private respondent.

The period for filing a motion for preliminary investigation after an information has been filed against an accused who
was arrested without a warrant has been characterized as mandatory by the Court. In People vs. Figueroa, 5 the
.Supreme Court applied Section 15, Rule 1126 of the old Rules, which is substantially reproduced in Section 7, Rule 112
of the 1985 Rules of Criminal Procedure. The Court held that Section 15 of old Rule 112 granted the accused the right to
ask for preliminary investigation within a period of five (5) days from the time he learned of the filing of the information.
As the accused in that case did not exercise his right within the five-day period, his motion for "reinvestigation" was
denied.7

Clearly, Section 7 of Rule 112 of the present Rules gives the accused the right to ask for a preliminary investigation; but
it does not give him the right to do so after the lapse of the five-day period. This is in accord with the intent of the Rules
of Criminal Procedure to make preliminary investigation simple and speedy. The Supreme Court, elaborating on the
rationale of the rules on preliminary investigation, held:

The new Rules were drafted in the light of the Court's experience with cases where preliminary
investigations had dragged on for weeks and even months. The Court had intended to remove this clog upon
the judicial machinery and to make a preliminary investigation as simple and speedy as is consistent with the
substantial rights of the accused. The investigation is advisedly preliminary, to be followed by the trial proper.
The investigating judge or prosecuting officer acts upon probable cause and reasonable belief, not upon proof
beyond reasonable doubt. The occasion is not for the full and exhaustive display of the parties' evidence; it is for

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 the presentation of such evidence only as may engender well-grounded belief that an offense has been
committed and that the accused is probably guilty thereof. When all this is fulfilled, the accused will not be
permitted to cast about for fancied reasons to delay the proceedings; the time to ask for more is at the trial.8
(Emphases supplied)

The respondent Court of Appeals held, however, that the five-day period prescribed in Section 7, Rule 112 was not
mandatory as the provision uses the permissive term "may." As already noted, the Court of Appeals cited Tan vs.
Securities and Exchange Commission9 where the Supreme Court held that the term "may" as used in adjective rules is
only permissive and not mandatory.

Tan, however, does not really support a ruling that the five-day period for asking for preliminary investigation of a
person accused of crime is only permissive. Tan was concerned with "may" as used in a provision of the Corporation
Code dealing with the transfer of shares of stock. Two (2) cases relied upon in Tan are equally inapplicable to the
present case. In Shauf vs. Court of Appeals, 10 "may" was used in a U.S. federal statute on equal opportunity for civilian
employment in U.S. military installations which enumerated the remedies of an aggrieved party. Holding that remedial
statutes are to be construed liberally and that the term "may" as used in adjective rules was only permissive and not
mandatory, our Supreme Court held that the substantive remedies of a party were not limited to those enumerated in
that U.S. legislation. 11 In Legaspi vs. Estrella, 12 the Court had to interpret "may" as used in section 146 of Batas
Pambansa Blg. 337 or the old Local Government Code. That term, being indicative of a "possibility" or an 'opportunity,"
was read as permissive rather than mandatory to avoid defeating the purpose of the law immediately to include
sectoral representatives in the legislative councils of local government units.13

While Tan and the cases there cited show that the use of the term "may" is indicative of an Opportunity or possibility,
they cannot be used to support the proposition that the five-day period under section 7 of Rule 112 is not mandatory
and may be disregarded at will. The "opportunity" or "possibility" engendered by the use of the term "may" in this rule
relates only to the option of filing a motion for preliminary investigation; it does not refer to the filing of the motion
after the expiration of the five-day period. This rule grants the accused a right or faculty and not an obligation. In the
sense that he is not obliged to exercise this right, this rule is permissive only; in the sense that he may exercise this right
only within the five-day period, the rule is mandatory. Put a little differently, Esam Gadi had the option or faculty of
demanding preliminary investigation; if he wanted to exercise that option, however, he had to exercise it within the
reglementary period. Upon expiration of that period, his option lapsed.

Much the same situation obtains in respect of the period for filing a petition for review. Section 1, Rule 45 of the Rules of
Court provides that:

Sec. 1. Filing of petition with Supreme Court. — A party may appeal by certiorari from a judgment of
the Court of Appeals, by filing with the Supreme Court a petition for certiorari within fifteen (15) days from
notice of judgment or of the denial of his motion for reconsideration filed in due time, and paying at the same
time, to the clerk of said court the corresponding docketing fee. The petition shall not be acted upon without
proof of service of a copy thereof to the Court of Appeals. (Emphasis supplied)

The use of "may" in Section 1 of Rule 45 refers only to the opportunity or option to file a petition for review. This,
however, does not give a party a license to file a petition for review beyond the fifteen-day period. Hence, under Rule
45, Section 1, a petition for review filed after lapse of the fifteen-day period is not to be entertained. Innumerable
petitions have been denied by the Court for having been filed unseasonably.

The reliance of the Court of Appeals on the case of Rolito Go vs. Court of Appeals 14 is misplaced. In Go, as in the
present case, an information was filed without a prior preliminary investigation of the accused. The accused in both
cases demanded their right to a preliminary investigation before arraignment. The similarity between the two (2) cases
ends there. There are, upon the other hand, critical differences in the fact situations in one and the other case which
must not be overlooked.

In Go, the accused asked for preliminary investigation on the very day the information was filed. In the present case,
Esam Gadi did so only on 9 February 1994, or a month after he had learned of the filing of the information against him.

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In the present case, Esam Gadi insists on the application of Section 7, Rule 112 in effect claiming or conceding there was
a lawful warrantless arrest. It appears that the accused was apprehended while engaged in the commission of an
offense, i.e, possession of marijuana punishable under Section 8, Article II of the Dangerous Drugs Act, as amended. In
Go, the Court relied on the general rule that an information may be filed only after a preliminary investigation has been
conducted. The Court did not apply Section 7, Rule 112 because there had been no arrest at all. The Court found that
accused Rolito Go had merely walked into the police station in the company of his two lawyers and placed himself at
the disposal of the police authorities. In fact, the Court did not consider his act as surrender for the accused did not
expressly declare that he was surrendering himself, probably to avoid the implication that he was admitting his guilt.

Further, in Go, the Prosecutor had himself filed with the trial court a motion for leave to conduct a preliminary
investigation. This motion, along with the application for bail, was in fact initially granted by the trial court. But the trial
court a few days later turned around and inexplicably changed its mind, cancelled the bail, refused to accord
preliminary investigation to the accused Go and the trial began over the vehement protests of Go. The court said:

Nonetheless, since petitioner in his omnibus motion was asking for preliminary investigation and not
for a re-investigation (Crespo vs. Mogul involved a re-investigation), and since the Prosecutor himself did file
with the trial court, on the 5th day after filing the information for murder, a motion for leave to conduct
preliminary investigation (attaching to his motion a copy of petitioner's omnibus motion), we conclude that
petitioner's omnibus motion was in effect filed with the trial court. What was crystal clear was that petitioner
did ask for a preliminary investigation the very day that the information was filed without such preliminary
investigation, and that the trial court was five (5) days later apprised of the desire of the petitioner such
preliminary investigation. Thus, even on the (mistaken) supposition apparently made by the Prosecutor that
Section 7 of Rule 112 of the Revised Rules of Court was applicable, the 5-day reglementary period on Section 7
Rule 112 must be held to have been substantially complied with. 15 (Emphases supplied)

Hence, while the accused in Go was entitled to preliminary investigation as a matter of right, Esam Gadi is not. His right
to demand preliminary investigation was subject to the condition that he should claim it seasonably. He did not do so.
Esam Gadi, accordingly, effectively waived his right to a preliminary investigation.

The denial of Esam Gadi's motion for preliminary investigation is also warranted: by his posting of a cash bail bond
without previously or simultaneously demanding a preliminary investigation. In People vs. Hubilo, 16 an accused who
had posted bail was deemed to have foregone his right to preliminary investigation. In the present case, Esam Gadi
asked for and was granted bail on 10 January 1994, or one month before he asked for a preliminary investigation on 9
February 1994. Once more Esam Gadi in fact waived his right to preliminary investigation.

In Go, in contrast, the accused had asked for preliminary investigation and the right to post bail at the same time in one
omnibus motion. Accordingly, the Court held that the accused in Go had not waived his right to preliminary
investigation:

Again, in the circumstances of this case, we do not believe that by posting bail, petitioner had waived
his right to preliminary investigation. In People v. Selfaison (110 Phil. 839 [1961]), we did not hold that
appellants there had waived their right to preliminary investigation because immediately after their arrest, they
filed bail and proceeded to trial "without previously claiming that they did not have the benefit of a preliminary
investigation." In the instant case, petitioner Go asked for release on recognizance or on bail and for preliminary
investigation in one omnibus motion. He had thus claimed his right to preliminary investigation before
respondent Judge approved the cash bond posted by petitioner and ordered his release on 12 July 1991.
Accordingly, we cannot reasonably imply waiver of preliminary investigation on the part of petitioner. In fact,
when the Prosecutor filed a motion in court asking for leave to conduct preliminary investigation, he clearly if
impliedly recognized that petitioner's claim to preliminary investigation was a legitimate one.17 (Emphases
partly in the original and partly supplied)

All in all, Esam Gadi's demand for preliminary investigation was an afterthought merely. WHEREFORE, the petition for
Review is hereby GRANTED and the assailed Decision of the Court of Appeals is hereby REVERSED and SET ASIDE. The
Orders of the Regional Trial Court, Branch 116 of Pasay City dated 14 February 1994 and 8 March 1994 are hereby
REINSTATED and the Regional Trial Court is ORDERED to proceed with the trial of Criminal Case No. 94-4820, with all
deliberate dispatch. Costs against private respondent.
9
Interpretation depends upon the context
SAN CARLOS MILLING CO. INC. V CIR (1993)

SAN CARLOS MILLING CO. INC. V CIR GR NO 103379, NOVEMBER 23, 1993

FACTS:

Petitioner domestic corporation had for the taxable year 1982 a total income tax overpayment of P781,393 reflected as

creditable income tax. The same amount was reflected in its 1983 tax return including P4,470 representing 3% of 15%
withholding tax on storage credits. Petitioner signified its intention to apply the total creditable amount of P785,863
against its 1984 tax dues coupled with a coupled with a comforting alternative request for a refund or tax credit of the
same. Respondent disallowed the proferred automatic credit scheme but treated the request as an ordinary claim for
refund/tax credit under Section 292 in relation to Section 295 of the Tax Code and accordingly subjected the same for
verification/investigation. Petitioner filed a supplemental petition on March 11, 1986, after having unilaterally effected a
set-off of its creditable income tax vis a vis income tax liabilities, earlier denied by the respondent.

ISSUE:

Whether prior authority from the Commissioner of Internal Revenue is necessary before a corporate taxpayer can credit

excess estimated quarterly income taxes for the succeeding taxable year

RULING:

Yes, authority of the CIR is a requisite before a corporate taxpayer can credit excess taxes paid to estimated tax
liabilities. Section 7 of Revenue Regulation No. 10-77 provides that: “any excess computed and shown shall either (a) be
refunded

to the corporation or (b) may be credited against the estimated quarterly income tax liabilities”

Insofar as the option of tax credit is concerned, this right should not be construed as an absolute right which is available
to the taxpayer at his sole option.

When “may” is construed as mandatory.

DE MESA V. MENCIAS, GR NO. 24583

Facts:

Opponents for Mayoralty of Muntinlupa, Rizal in the 1963 elections were Francisco De Mesa and Maximino Argana. The
electorate’s choice, as tallied by the local board of Canvassers was de Mesa. Elected vice mayor was Loresca.
Meanwhile, Argana protested the election of De Mesa. On March 18, 1964, however, an assassin’s bullet felled De
Mesa, and, forthwith Loresca was, by operation of law, duly installed as his successor. In the election case, the
protestant Argana moved for the constitution of committees on revision of ballots.

On May 6, 1964, the court a quo required the protestee’s widow and children to appear within 15 days from notice in
order to be substituted for the said protestee, if they so desired. They did not, however, comply. The trial court did not
order the opposing party to procure the appointment of the legal representative of the deceased litigant stated under
Rule 3 of the Rules of Court.

10
SEC. 17. Death of party.—After a party dies and the claim is not thereby extinguished, the court shall order, upon proper
notice, the legal representative of the deceased to appear and to be substituted for the deceased, within a period of
thirty (30) days, or within such time as may be granted. If the legal representative fails to appear within said time, the
court may order the opposing party to procure the appointment of a legal representative of the deceased within a time
to be specified by the court, and the representative shall immediately appear for and on behalf of the interest of the
deceased. . . . (Rule 3.)

Argana reiterated his move for the appointment of commissioner on revision of ballots, but this time, without
proposing any provision for representation for the protestee whose widow and children he sought to be declared “non
suited”.

On June 23, 1964, without notice of the protestee and / or his legal representative, the trial court granted the motion
aforesaid. The trial court adjudged the protestant Argana as the duly elected Mayor of Muntinlupa, Rizal in the 1963
elections, and taxed the costs of expenses of the protest against the estate of the deceased protestee De Mesa.

Issue: Whether or not the requirement for the procurement of a legal representative of a deceased litigant is couched in
the permissive term “may” instead of the mandatory character of statutory provisions.

Rulings:

Where the statute provides for the doing of some act which is required by justice or public duty, or where it vests a
public body, municipality, or public officer with power and authority to take some actions which concerns the public
interests or rights of individuals, the permissive language will be construed as mandatory and the execution of the
power may be insisted upon as duty.

ACCORDINGLY, the judgment under review is reversed and in lieu thereof, another is rendered —

(1) Declaring null and void the judgment of the Court of First Instance of Rizal in election case 7924 thereof, dated
August 10, 1964, which proclaimed the protestant Maximino A. Argana the duly elected mayor of Muntinlupa, Rizal in
the 1963 elections, for having been rendered without jurisdiction over the person of the legal representative of the
deceased protestee Francisco de Mesa and all other proceedings taken by said court in said election case subsequent to
the death of the said protestee;

(2) Ordering the protestant Maximino A. Argana, without delay, to vacate the office of the mayor of Muntinlupa, Rizal
and to relinquish the same in favor of Demetrio R. Loresca; and

(3) Ordering the Court of First Instance of Rizal to forthwith appoint the petitioner Demetrio R. Loresca as the legal
representative of the deceased protestee Francisco de Mesa and allow his appearance as such in substitution of the said
deceased for purposes of said election case 7924 of said court, to conduct a new trial in said election case, and
thereafter to render judgment therein as the evidence may warrant.

When “may” is construed as mandatory.

[G.R. No. L-21572. October 4, 1924. ]

MARCELA LLENARES, Plaintiff-Appellant, v. FELISA VALDEAVELLA and ALFONSO ZORETA, Defendants-

Appellees.
Not Digested

1. EXECUTION OF JUDGMENT; LEVY, DEFINITION OF. — The levy of an execution of a judgment consists in the act or
acts by which an officer sets apart or appropriates for the purpose of satisfying the command of the writ, a part or the
whole of the judgment debtor’s property.
11
2. ID.; ID.; FORMALITIES. — In the absence of statutory provisions no special formalities are required for a valid levy of
an execution, and in regard to real property, it is usually sufficient if the seizure of the property is made known to the
occupants thereof and endorsed on the writ.

3. ID.; ID.; ID. — In the Philippine Islands the procedure in levying an execution must be considered regulated by
sections 415 and 429 of the Code of Civil Procedure.

4. ID.; ID.; ID. — In an attempted levy of execution upon real estate no notice of attachment was filed with the register
of deeds and copy thereof served on the defendant. Held: That there was no sufficient levy of execution under the
Philippine statutes and that the sale of the property made under the attempted levy was null and void and conferred no
title on the purchaser.

5. ID.; CONSTRUCTION OF STATUTE. — Powers through the exercise of which a person may be divested of his
property are strictly construed and the provisions regulating the procedure in their exercise are mandatory as to the
essence of the thing to be done.

This is an action in ejectment, the plaintiff alleging that she is the owner of two parcels of land in the barrio of Wacas,
municipality of Tayabas, having acquired said parcels by purchase at a sheriff’s sale under writ of execution issued by
the justice of the peace of the municipality of Tayabas in a case in which she was the plaintiff and the defendant Felisa
Valdeavella and her now deceased husband Zacarias Zabella were the defendants.

The defendants Felisa Valdeavella and Alfonso Zoreta in their answer allege that Felisa Valdeavella never has been in
possession of the parcels as owner: that she and her husband some four years prior to the filing of the answer (October
22, 1918) were in possession of the land as tenants of Irineo Valdeavella, the true owner of the land; and that the
defendant Alfonso Zoreta has been in possession under an agreement made with Zacarias Zabella whereby Zoreta was
to have the use and benefit of the land as security for a debt of P100. Subsequent to the filing of this answer Irineo
Valdeavella was impleaded. In his answer he alleges that he is the owner of the land and has been in possession thereof
for over fifteen years.

The court below rendered judgment in favor of the defendants holding that Irineo Valdeavella was the owner of the
parcels of land in question and that, moreover, the sheriff’s sale under which the plaintiff claims title to the land was
irregular and void inasmuch as there had not been a sufficient levy on the lands, nor a sufficient notice of the sale. From
this judgment the plaintiff appeals to this court.

In her first assignment of error the appellant maintains that the court erred in holding that Irineo Valdeavella was the
owner of the land at the time of the attempted levy of the execution. In our opinion, this assignment of error is well
taken. The testimony in support of the claim of Irineo Valdeavella is so contradictory and inconsistent that no reliance
whatever can be thereon.

Under the second assignment of error the appellant argues that the sale, under execution by virtue of which she claims
ownership of the land, was valid. This assignment cannot be sustained.

The levy of an execution is defined as the acts by which an officer sets apart r appropriates for the purpose of satisfying
the command of the writ, a part or the whole of a judgment debtor’s property. In the absence of statutory provisions no
special formalities are required for a valid levy, and in regard to real property it has usually been held sufficient if the
seizure of the property is made known to the occupants thereof and endorsed on the writ. But it is otherwise where, as
in this jurisdiction, the matter is regulated by statute; there a substantial compliance with the statute is indispensable.

The statutory provisions to this case are found in section 450 and 429 of the Code of Civil Procedure. Section 450 states
that property "may be attached on execution in like manner as upon writs of attachment." This provision while
permissive in form must, nevertheless, be regarded as mandatory. No other method of effecting the levy is prescribed
and it is an old rule that powers through the exercise of which a person may be divested of his property are always
strictly construed and that the provisions regulating the procedure in their exercise are mandatory as to the essence of
the thing to be done. (Lewis’ Sutherland on Statutory Construction, 2d., ed., 627.)

Section 429 of the Code reads as follows:jgc:chanrobles.com.ph

12
"Real property, standing upon the records in the name of the defendant or not appearing at all upon the record, shall be
attached by filing with the registrar of the titles of the land for the province in which the land is situated, a copy of the
order of attachment, together with a description of the property attached, and a notice that it is attached, and by
leaving a similar copy of the order, description and notice with an occupant of the property, if there is one.

"Real property or an interest therein, belonging to the defendant and held by any other person, or standing on the
records in the name of any other person, shall be attached by filing with the registrar of the land titles in the province in
which the land is situated, a copy of the order of attachment, together with a description of the property, and a notice
that such real property and any interest of the defendant therein, held by or standing in the name of such person
(naming him) are attached; and by leaving with the occupant, if any, and with such other person, or his agent, if known
and within the province, a copy of the order, description and notice. The registrar must index attachments filed under
the first paragraph of this section, in the names, both of the plaintiff and of the defendant, and must index attachments
filed under the second paragraph of this section, in the names of the plaintiff and of the defendant and of the person by
whom the property is held or in whose name it stands on the records."cralaw virtua1aw library

In the present case it is admitted by the plaintiff that notice of attachment for the execution was not filed with the
registrar of deeds and that there was no copy thereof served on the defendants. It is therefore clear that the attempted
levy was not made in accordance with the provisions of the statute, and, according to the great weight of authority, a
proper levy is indispensable to a valid sale on execution. A sale unless preceded by a valid levy, is void, and the
purchaser acquires no title. (Leath v. Deweese, 162 Ky., 227; Jarboe v. Hall, 37 Md., 345.)

There having been no sufficient levy of the execution in question, the plaintiff took no title to the property sold
thereunder and the present action can therefore not be maintained.

The judgment appealed from is affirmed, without costs. So ordered.

IV. “EVERY”

NATIONAL HOUSING CORPORATION V. JUCO

G.R. NO. L-64313 (JANUARY 17, 1985)

FACTS:

For being declared guilty of stealing scrap iron owned by Petitioner, Private Respondent was terminated. He filed a
complaint with Respondent Court and Petitioner replied stating that the Respondent Court is without jurisdiction as
Petitioner Corporation is a government owned corporation and the grounds for dismissal were for valid reasons.
Respondent Court however, despite past decisions, decided in favor of the Private Respondent.

ISSUE:

W/N employees of Petitioner are covered by the Labor Code or by the laws and regulations governing the civil service.

HELD:

Petitioner is government owned as it never had any private stockholders. The 1935 constitution’s section 1 article 12
states that “A civil service embracing all branches and subdivisions of the government shall be provided by law.” While
the amendments in section 1 article 12b of the 1973 constitution states that “The civil service embraces every branch,
agency, subdivision and instrumentality of the government, including every government owned or controlled
corporation.”

Clearly, the inclusion of government owned or controlled corporation carries out a message that the coverage is broad
and all-embracing. Furthermore, P.D. 807 Sec. 56 implements the said provision. In addition to this, the Labor Code
states that the mentioned corporations shall be governed by the Civil Service Law.

13
V. “PREVIOUSLY”

RURA V. LOPENA
G. R. NO. L-69810-14 (JUNE 19, 1985)

FACTS:

Petitioner was accused, tried and convicted of five (5) counts of estafa committed on different dates. The counts were
consolidated and tried jointly. Only a single decision was rendered. The Petitioner then applied for probation but was
denied by the fiscal on the ground that he had been previously convicted by final judgment of an offense. The fiscal
invoked Sec. 9 of the Probation Law, which disqualifies persons who have previously been convicted by final judgment
from applying for probation.

The trial court denied his application on the belief that since the crimes were committed on different dates, he was
guilty on each of those dates. Petitioner however contends that since there is only one decision, he has not yet been
previously convicted.

ISSUE:

How should the word “previously” be construed?

HELD:

The word “previously” refers to the date of the conviction and not to the dates of the crimes involved. Although he was
guilty of five counts of estafa, they were tried jointly and only one decision was handed down. Hence, when Petitioner
applied for Probation he had not yet had a final judgment of conviction on his record. He is eligible for probation under
such circumstances.

VI. “TERM” vs “TENURE”

APARRI V. COURT OF APPEALS

G.R. NO. L-30057 (JANUARY 31, 1984)

FACTS:

R.A. 1160 created the National Resettlement and Rehabilitation Administration (NARRA). Said law also empowered its
Board of Directors to appoint and fix the term of office of the General Manager subject to approval of the President.

On January 15, 1960, the Board approved Resolution No. 13 appointing Petitioner as General Manager of NARRA.

On March 15, 1962, the Board approved Resolution No. 24 wherein the President expressed his desire to fix the term of
office of the incumbent General Manager up to March 31, 1962.

ISSUE:

W/N Resolution No. 24 constitutes removal of Petitioner without cause.

HELD:

No, Petitioner’s term of office is deemed expired. R.A. 1160 expressly gives the Board the power to appoint and fix the
term of office of the General Manager. The word ‘term’ describes the period that an office may hold office and upon
expiration of such term, his rights, duties, and authority must cease. In this case, the term of office is not fixed by law,
but by the Board.

14
VII. AND (Conjunctive)

JOSE ANTONIO MAPA V. HON. JOKER ARROYO AND LABRADOR DEVELOPMENT CORPORATION
G.R. NO. 78585 (JULY 5, 1989)

FACTS:

Mapa bought lots from Labrador Development Corporation which are payable in ten years. Mapa defaulted to pay the
installment dues and continued to do so despite constant reminders by Labrador. The latter informed Mapa that the
contracts to sell the lots were cancelled, but Mapa invoked Clause 20 of the four contracts. Said clause obligates
Labrador to complete the development of the lots, except those requiring the services of a public utility company or the
government, within 3 years from the date of the contract. Petitioner contends that P.D. 957 requires Labrador to
provide the “facilities, improvements, and infrastructures for the lots, and other forms of development” if offered and
indicated in the approved subdivision plans.

ISSUE:

W/N Clause 20 of the said contracts include and incorporate P.D. 957 through the doctrine of last antecedent, making
the cancellation of the contracts of sale incorrect.

HELD:

No. Labrador has every right to cancel the contracts of sale, pursuant to Clause 7 of the said contract for the reason of
the lapse of five years of default payment from Mapa. P.D. 957 does not apply because it was enacted long after the
execution of the contracts involved, and, other than those provided in Clause 20, no further written commitment was
made by the developer. The words “which areboffered and indicated in the subdivision or condominium plans” refer not
only to “other forms of development” but also to “facilities, improvements, and infrastructures”. The word “and” is not
meant to separate words, but is a conjunction used to denote a joinder or a union.

VIII. “OR” (Disjunctive)

PEOPLE V. MARTIN
G.R. NO. L-33487 (MAY 31, 1971)

FACTS:

Respondents were charged with violating Sec. 46 of C.A. No. 613 or the Philippine Immigration Act by the Court of First
Instance of La Union, specifically in the act of bringing in and landing. The Court dismissed the charges on the ground of
it being a continuous offense with Criminal Case 6258-M filed in Bulacan against other Respondents who were
concealing and harboring the same Chinese Immigrants who were brought in therefore they had no jurisdiction.

ISSUE:

W/N the act of bringing in and landing constitute a continuous offense with concealing and harboring.

HELD:

No. They are two separate offenses. C.A. No. 613 clearly provides that the four acts are in fact four separate acts. Each
act possesses its own distinctive, different, and disparate meaning. The word OR in C.A. No. 613 cannot be given a non-
disjunctive meaning signifying the separation of one act from the other. The words in the information suggesting
conspiracy are considered a mere surplusage,

15
When “or” means expository or interpretative of preceding term.

[ GR No. L-30761, Jul 11, 1973 ]

SAN MIGUEL CORPORATION v. MUNICIPAL COUNCIL

Not digested. Walay budget!

Petition for writ of certiorari to review the judgment of the Court of First Instance of Cebu, in Civil Case No. R-10631,
upholding the validity of Ordinance No. 23, series of 1966, as amended by Ordinance No. 25, series of 1967, of the
Municipality of Mandaue, Cebu, imposing "a graduated quarterly fixed tax based on the gross value of money or actual
mar-ket value at the time of removal of the manufactured articles from their factories or other manufacturing or
processing establishments."

In enacting the said ordinances, the municipal council of Mandaue, invoked as basis of its authori-ty Republic Act No.
2264 (Local Autonomy Act).

The relevant portion of Section 1, Ordinance No. 23 (1966), as amended by Ordinance No. 25 (1967), pro-vides as
follows:

"SECTION 1. - Municipal License Tax On Proprietors Or Operators Of * * * Breweries, * * *. Proprietors or operators of

* * * breweries, * * * within the territo-rial limits of this municipality shall pay a graduated quarterly fixed tax based on
the gross value in money or actual market value at the time of removal, of the manufactured articles from their
factories * * * during the preceding quarter in accord-ance with the following schedules: * * *:

The pertinent portion of Section 2 of Ordinance No. 23 which was not amended by Ordinance No. 25 states:

"Payment of Municipal License Tax. - A fixed tax imposed in this ordinance must first be paid before any
person can engage in business and is payable for each taxable business; * * *.

"The graduated fixed tax provided in this ordinance shall be paid at the Office of the Mu-nicipal
Treasurer quarterly, on or before the twentieth of January, April, July and Octo-ber; * * *. Provided further,
That as regards businesses already operating at the time this ordinance takes effect, the tax for the initial
quarter shall be paid pursuant to the provisions of this ordinance and shall be based on the gross value in money
during the quarter immediately pre-ceding, * * *.

"Within the time fixed for the payment of the license taxes herein imposed, the taxpayers shall prepare
and file with the Municipal Treasurer, a sworn statement of the gross value in money during the preceding
quarter on the basis of which the tax shall be assessed and collected. * * *".

16
The basic Ordinance was No. 88,[1] which took effect on September 25, 1962, but this was amended by Ordinance No.
23 (Janua-ry 1, 1967), and by Ordinance No. 25 (January 1, 1968).

Petitioner, a domestic corporation engaged in the business of manufacturing beer and other products with a subsidiary
manufacturing plant in Mandaue, Cebu, since December, 1967, paid the taxes prescribed in the aforesaid ordinance,
under protest thus: P309.40 on January 22, 1968 and P5,171.80 as of July 18, 1968, computed respectively "on the basis
of 70,412 and 2,203.070 cases of beer manufactured and removed from said Mandaue plant, multi-plied by P7.60 which
is the prevailing market price (wholesaler's price) per case of beer at the time of the removal".

Claiming that it is adversely affected by the ordinance, which in its view was beyond the power and authority of the
municipality to enact, petitioner brought an action in the Court of First Instance of Cebu, Branch VI, for the annulment
of said ordinance.

Petitioner contends that (1) the phrase "gross value in mo-ney or actual market value" employed in the questioned
ordinance clearly referred to "sales or market price" of the articles or commodities manufactured thereby indicating a
manifest intent to impose a tax based on sales, and (2) that to impose a tax upon the privilege of manufacturing beer,
when the amount of the tax is measured by the gross receipts from its sales of beer, is the same as imposing a tax upon
the product itself.

Respondents upon the other hand insist that the tax im-posed in the questioned ordinance (1) is not a percentage tax or
a tax on the sales of beer but is a tax on the privilege to engage in the business of manufacturing beer, and the phrase
"actual market value" was merely employed as a basis for the classification and graduation of the tax sought to be
imposed; (2) that it is not a specific tax because it is not a tax on the beer itself, but on the privilege of manufacturing
beer; and (3) that with the conversion of Mandaue into a city on June 21, 1969, the appeal has become moot, because
the prohibition against the imposition of any privilege tax on sales or other taxes in any form based thereon, is
applicable only to municipalities.

While We have heretofore announced the doctrine that the grant of power to tax to chartered cities and municipalities
under Section 2 of the Local Autonomy Act is sufficiently ple-nary,[2] it is, however, subject to the exceptions and
limitations contained in the two (2) provisos of the same statute. In other words, the municipal corporation should not
transcend the limitations imposed by the statute on the basis of which the power to tax is sought to be exercised. Thus,
We held in the Marinduque case,[3] that an ordinance providing for a gra-duated tax based on either "gross output or
sales" violates the prohibition on municipalities against imposing any percentage tax on sales, or other taxes in any
form based thereon, as the only standard provided for measuring the gross output is its peso value, as determined from
true copies of receipts and/or invoices that the taxpayer is required to submit to the muni-cipal treasurer.

We are thus confined to the narrow issue of whether or not the challenged ordinance has transcended the exceptions
and limitations imposed by section 2 of Republic Act 2264.

Section 2 of the aforecited statute provides:

"Provided, That municipalities and municipal districts shall, in no case, impose any percent-age tax on sales or other
taxes in any form based thereon nor impose taxes on articles subject to specific tax * * *."

Section 1 of Ordinance No. 88 of the Municipality of Man-daue, as amended by Ordinances Nos. 23 (1967) and 25
(1968), specifically provides that the graduated quarterly fixed tax shall be "based on the gross value in money or actual
market value at the time of removal, of the manufactured products * * * from their factories * * * during the preceding
calen-dar year * * *."

Well settled is the rule that in the absence of legis-lative intent to the contrary, technical or commercial terms and
phrases, when used in tax statutes, are presumed to have been used in their technical sense or in their trade or
commercial meaning. Thus, the phrase "gross value in money" has a well-defined meaning in our taxes. For instance,
the term "gross value in money" of articles sold, bartered, exchanged or transferred, as used in Sections 184, 185 and
186 of the National Internal Revenue Code, has been invariably used as equivalent to "gross selling price" and has been
construed as the total amount of money or its equi-valent which the purchaser pays to the vendor to receive or get the
goods.[4] It must be noted that the ordinance specifical-ly provides that the basis of the tax is the "gross value in money
or actual market value" of the manufactured article.

17
The phrase "actual market value" has been construed as the price which an article "would command in the ordinary
course of business, that is to say, when offered for sale by one willing to sell, but not under compulsion to sell, and
purchased by another who is willing to buy, but under no ob-ligation to purchase it,[5] or the price which the property
will bring in a fair market after fair and reasonable efforts have been made to find a purchaser who will give the highest
price for it.[6] The "actual market value" of property, for purposes of taxation, therefore means the selling price of the
article in the course of ordinary business.

Considering that the phrase "gross value in money" is followed by the words "or actual market value", it is evident that
the latter was intended to explain and clarify the pre-ceding phrase. For the word "or" may be used as the equiva-lent of
"that is to say" and gives that which precedes it the same significance as that which follows it. It is not always
disjunctive and is sometimes interpretative or expository of the preceding word.[7] Certainly We cannot assume that
the phrase "or actual market value" was a mere surplus age, for it serves to clarify and explain the meaning and import
of the preceding phrase. In any event, it is the duty of the courts, so far as reasonably practicable, to read and interpret
a stat-ute as to give life and effect to all its provisions, so as to render it a harmonious whole.

It is also significant to note, that there is a set ratio between the amount of the tax and the volume of sales. Thus if the
"gross value in money or actual market value" of the beer removed from the factory exceeds P37,500.00 per quarter,
the taxpayer is required to pay a quarterly license tax of P160.00 plus P0.30 for every P1,000.00, or fraction of the
excess. In other words in excess of P37,500.00, the taxpayer will pay to the municipality a certain amount of tax
measured by a percent-age of the sales. It is therefore evident that the challenged ordinance was a transparent attempt
on the part of the munici-pality to impose a tax based on sales.

Although section 2 of the ordinance in question provides in a vague manner that the tax shall be assessed and collected
on the basis of the sworn statement of the manager of a firm or corporation "of the gross value in money during the
preceding quarter," in actual practice the quarterly tax levied upon pe-titioner, was computed on the basis of the total
market value of the beer, per quarter, as shown by the shipping memorandum certified to by the storekeeper of the
Bureau of Internal Revenue assigned to the brewery. Thus the taxes amounting to P309.40 and P5,171.80, paid by
petitioner on January 22, 1968 and July 18, 1968, were actually determined respectively on the basis of 70,412 and
2,203.070 cases of beer manufactured and removed from the Mandaue plant, multiplied by P7.60 which is the
prevailing market price (wholesaler's price) per case of beer.

In Laoag Producers' Cooperative Marketing Association, Inc. vs. Municipality of Laoag,[8] We held that the challenged
ordi-nance imposed a tax based on sales, although the ordinance merely imposed a "municipal tax or inspection fee of
one-half (1/2) centavo on every kilo of Virginia leaf tobacco, garlic and onion on all wholesale dealers and vendors"
because, in its application, it does impose a tax based on sales, as it is based on the number of kilos sold and purchased
by him and when the wholesaler or vendor accumulates his stock, he does so for only one purpose, to sell the same at
the appropriate time, and "he cannot by its very nature, carry on his business unless he sells what he has bought."
Similarly, in the case at bar, the circumstance that the tax is imposed upon petitioner at the time of removal from the
factory of the manufactured beer, and not on the date of actual sale, is not of important consequence since petitioner
will, in the end, sell the beer removed from the fac-tory, because by the nature of its business, it has no alterna-tive but
to sell what it has manufactured.

We therefore hold that the questioned ordinance imposed a tax based on sales and therefore beyond the authority of
the municipality to enact.

Having reached this conclusion, it becomes unnecessary to pass upon the additional question posed, i.e., whether or
not the challenged ordinance imposes a tax on a product subject to specific tax.

Respondents however claim that with the conversion of Mandaue into a city pursuant to Republic Act No. 5519, which
was approved on June 21, 1969, the issue has already become moot, since the prohibition contained in section 2 of
Republic Act 2264 applies only to municipalities and not to chartered cities. The same contention has been rejected in
City of Naga v. Court of Appeals,[9] and Laoag Producers' Cooperative Marketing Association, Inc. v. Municipality of
Laoag, supra, where We ruled that the legality of an ordinance depends upon the power of the municipality at the time
of the enactment of the challenged ordinance. Since the municipality of Mandaue had no authority to enact the said
ordinance, the subsequent approval of Republic Act No. 5519 which became effective on June 21, 1969, did not remove
the original infirmity of the ordinance. Indeed there is no provision in the aforecited statute which invests a curative
effect upon the ordi-nances of the municipality which when enacted were be-yond its statutory authority.

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IN VIEW WHEREOF, the appealed judgment is hereby reversed and Ordinance No. 23, series of 1966, as amended by
Ordinance No. 25, series of 1967, which became effective on January 1, 1968, of the Municipality of Mandaue, Cebu, is
hereby declared null and void. Res-pondents are also ordered to refund the taxes paid by Petitioners under the said
ordinance with legal inte-rest thereon. No costs.

IX. SURPLASAGES

DEMAFILES V. COMELEC

G.R. NO. L-28396 (DECEMBER 29, 1967)

FACTS:

Respondent Galido won over Petitioner due to the Provincial Board voting to reject returns. Petitioner challenged the
right of 2 board members to sit, considering that they were reelectionists. Respondent Commission ruled in favor of
Petitioner.

Galido then asked for reconsideration, stating that the 2 board members in question were disqualified only when the
board was acting as a provincial but not as municipal. In light of this, Respondent Commission reversed its previous
decision.

ISSUES:

1. W/N this case is moot and the board had the authority to reject the returns from Precinct 7.

2. W/N the board members who were candidates for reelection were disqualified from sitting in the board in its capacity
as a municipal board of canvassers.

3. W/N Respondent Commission can order the board of canvassers to count a return.

HELD:

RA 4970 reads “the first mayor, vice-mayor and councilors of the municipality of Sebaste shall be elected in the next
general elections for local officials and shall have qualified.” The Supreme Court ruled that “and shall have qualified” is
devoid of meaning. The term of office of municipals shall begin in the 1st day of January following their election,
despite the fact that Sebaste was a newly created municipality.

No, a canvassing board may not reject any returns due to whatever cause. However, since there is a possibility of fraud,
the canvass made and proclamation should be annulled. The law states “any member of a provincial board or of
municipal council who is a candidate for office in any election, shall be incompetent to act on the said body.” Since
Respondent Commission has the power to annul and illegal canvass and proclamation, there is no reason as to why it
cannot order canvassing bodies to count all returns which are otherwise regular.

X. PUNCTUATIONS

United States vs Hart, G.R. No. 8848, November 21, 1913

Facts

The appellants, Hart, Miller and Natividad, were found guilty on a charge of vagrancy under the provisions of
Act no. 519 - An Act Granting The Cebu Broadcasting Company A Temporary Permit To Construct, Maintain And
Operate Radio Broadcasting Stations In The Philippines. All three appealed and showed evidence showed that each of
the defendants was earning a living at a lawful trade or business sufficient enough to support themselves.

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 However, the Attorney-General defended his clients by arguing that in Section 1 of Act no. 519, the phrase “no
visible means of support” only applies to the clause “tramping or straying through the country” and not the first clause
which states that “every person found loitering about saloons or dram shops or gambling houses,” thus making the 3
appellants guilty of vagrancy. He further argued that it been intended for “without visible means of support” to qualify
the first part of the clause, either the comma after gambling houses would have been omitted, or else a comma after
country would have been inserted.

Issue: WON Hart, Miller and Natividad are guilty of vagrancy under the Attorney-General’s argument based on a mere
grammatical criticism.

Held: An argument based upon punctuation alone is not conclusive and the effect intended by the Legislature should be
the relevant determinant of the interpretation of the law. When the meaning of a legislative enactment is in question,
the duty of the courts to ascertain, if possible, the true legislative intention, and adopt that construction of statute
which will give it effect. Moreover, ascertaining the consequences flowing from such construction of the law is also
helpful in determining the soundness of the reasoning.

Considering that the argument of the Attorney-General would suggest a lack of logical classification on the part of the
legislature of the various classes of vagrants and since it was proven that all three of the defendants were earning a
living by legitimate means at a level of comfort higher than usual, Hart, Miller and Natividad were acquitted, with the
costs de officio.

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