G.R. No.

L-24750 May 16, 1980

DOROTEO BANAWA, JULIANA MENDOZA, CASIANO AMPONIN and GLICERIA

ABRENICA, petitioners,
vs.
PRIMITIVA MIRANO, GREGORIA MIRANO, JUANA MIRANO and MARCIANO
MIRANO, respondents.

Jose W. Diokno for petitioners.

Recto Law Office for respondents.

FERNANDEZ, J.: ñé+.£ªwph!1

This is a petition for review by certiorari of the decision of the Court of Appeals promulgated
on April 12, 1965 1 in CA G.R. No. 23597-R, entitled "Primitive Mirano, et al., Plaintiffs-
Appellees, versus, Doroteo Banawa, et al., Defendants-Appellants", the dispositive part of
which is:têñ.£îhqw â£

In view of the foregoing, the appealed judgment is hereby affirmed, with costs
against defendants-appellants.

The judgment of the lower court which was affirmed reads as follows: têñ.£îhqw â£

WHEREFORE, judgment is hereby rendered:

(a) Declaring the plaintiffs to be the owners of the two parcels of land
described in paragraph 3 of the complaint;

(b) Ordering the defendants to deliver the possession of the said parcels of
land to the plaintiffs;

(c) Declaring the deed of sale executed by Roman Biscocho, Paula Biscocho
and Maria Carmen Mendoza in favor of Doroteo Banawa and Juliana
Mendoza, dated April 4, 1940, as evidenced by Exhibit 'E' and its registration
in the registry of deeds of Batangas, to be null and void;

(d) Declaring null and void the deed of donation, dated August 7, 1956,
evidenced by Exhibit 'D' executed by the spouses Doroteo Banawa and
Juliana Mendoza in favor of the spouses Casiano Amponin and Gliceria
Abrenica as well as Tax Declarations No. 26818 in the names of the spouses
Doroteo Banawa and Juliana Mendoza, and No. 26845 in the names of the
spouses Casiano Amponin and Gliceria Abrenica, and the registration of the
said deed of donation in the registry of deeds of Batangas; and

(e) Ordering the defendants to pay to the plaintiffs actual damages in the
amount of P 4,500 and attorney's fees in the amount of P500.00, and the
costs of this action.
 SO ORDERED. 2

The spouses Doroteo Banawa and Juliana Mendoza both died during the pendency of this
case in the Court of Appeals. They have been substituted by the petitioners Casiano
Amponin and his wife Gliceria Abrenica, legally adopted daughter of one of the deceased
petitioners and donee of the Carsuche property. 3

The petitioners filed on May 20, 1965, a motion for reconsideration of the decision of the
Court of Appeals. Said motion was denied on June 28, 1965. 4

As found by the Court of Appeals, the facts are: têñ.£îhqw â£

It appears that sometime in 1911, Maria Mirano a niece of appellant Juliana

Mendoza, and who was then about nine years old, was taken in by the
appellants-spouses, Doroteo Banawa and Juliana Mendoza, in the latter's
house in Mahabang Lodlod, Taal, Batangas. Appellants spouses being
childless, treated and reared her up like their own child. They hired a private
tutor to teach her the rudiments of reading, writing and arithmetic. They
supported her, gave her money, clothes and even jewelry. Maria reciprocated
their care and affection by helping with the household chores.

A few years later, the spouses opened up a store for general merchandise in
barrio Lutucan, Sariaya, Quezon, from which they derived considerable
income and which enabled them to acquire several parcels of land.

On July 31, 1949, after a lingering illness, Maria Mirano died in Taal,
Batangas while still living with the spouses. At the time of her death she left
as her only nearest relatives the herein plaintiffs, namely Primitiva Mirano,
who is a surviving sister, and Gregoria, Juana and Marciano, all surnamed
Mirano, who are the children of a deceased brother, Martin Mirano.

The parties do not dispute the Identity of the two parcels of land in
controversy, which are described in paragraph 3 of the complaint as
follows:têñ.£îhqw â£

1. A parcel of sugar land situated in the Barrio of Iba, Taal,

Batangas, with an area of 44,200 square meters, more or
less. Bounded on the North, by Ravine; on the East, by the
property of Leodovico Garcia; on the South by the property of
Gregorio Amponin; and on the West, by the property of
Gregorio Maria Aniversario (now Doroteo Banawa). Under
Tax Declaration No. 25994 in the name of Maria Mirano and
assessed at P2,210.00.

2. A parcel of sugar land situated in the barrio of Carsuche,

Taal, Batangas, with an area of 54,093 square meters, more
or less. Bounded on the North, by the property of Agapito Aro
and Alley; on the East, by an Alley; on the South, by the
properties of Filomeno Diomampo, Gregorio de la Rosa and
Andres Moratilla; and on the West, by the property of Agapito
Aro. Under Tax Declaration No. 19786 in the name of Maria
Mirano and assessed at P2,760.00.
For purposes of clearness and convenience, and since the respective
assertions and evidences adduced by the parties regarding the two parcels
of land are in sharp divergence, we shall refer to the first parcel as the Iba
Property and to the second parcel as the Carsuche property and, moreover,
we shall treat and discuss the two separately.

Parcel 1, or the Iba Property.

The parties agree that the Iba Property was originally owned by Placido
Punzalan from whom it was acquired on May 5, 1921. Plaintiffs' evidence
upon this point tends to show that the acquisition of the said parcel of land
was pursuant to a deed of sale contained in a public instrument
acknowledged before Notary Public Ramon A. Cabrera on the date
aforesaid, a photostatic copy of which was introduced in evidence as Exhibit
'A', the same having been secured from an original copy on file with the
Division of Archives, Bureau of Libraries. The deed of sale in question states
that the Iba property consisted formerly of two parcels of land and that they
were sold for the amount of P2,000.00 in favor of Maria Mirano. Defendant
Doroteo Banawa impliedly admitted the execution of this notarial document
when he declared that in the execution of the document concerning the
purchase of the Iba property from Punzalan the notary public charged him
P20.00 and another P5.00 for stamps in the name of Maria Mirano since
1923 (Exhs. 'A-1' to 'A-7').

By contrast, defendants' claim of ownership over the Iba property is

predicated upon their assertion that the money used in buying said land
pertained to the spouses Doroteo Banawa and Juliana Mendoza. Defendants
contend that since 1919 Placido Punzalan borrowed money from defendant
spouses on three different occasions for the sums of P1,200.00, P1,800.00
and P1,080.00, respectively, each of which was evidenced by Exhs. '1', '2',
and '3', respectively. Upon the failure of Placido Punzalan to discharge said
obligations in 1921, he agreed to sell the land aforementioned to the spouses
for P 3,700.00, but as the total value of the three loans was P4,080.00,
Punzalan had to reimburse to said spouses the difference of P380.00. The
document of sale stated the price to be only P2,000.00 in view of the fact that
Doroteo Banawa had only P25.00 with him when the deed was prepared by
the notary public, and the latter was charging P10.00 for every one thousand
pesos mentioned as the consideration of the contract, Defendants likewise
maintain that the sale was made to appear in favor of Maria Mirano because
said spouses being already old, they want to leave something to Maria
Mirano for her to lean upon when they would have been gone. They,
however, made Maria understand that although the property was placed
under her name, they would continue to be the owners thereof, to administer
and enjoy the fruits of the same as long as they live, and that she would
become the owner of the land only after their death. Maria supposedly
expressed her conformity to and appreciation for the said arrangement. Maria
Mirano was 19 years old when the deed of sale was executed.

Parcel 2, or the Carsuche Property.

There is no dispute between the parties that the Carsuche property was
acquired by way of purchase from its original owners, to wit: Roman
 Biscocho, his sister Paula Biscocho, and sister-in-law Carmen Mendoza. The
sale took place sometime in December, 1935. There is, however, a sharp
conflict of evidence between the parties concerning the form of the document
evidencing the same and in whose favor the sale was made at that time. The
plaintiffs claim that the sale was evidenced by a public instrument executed
before and ratified by Notary Public Vicente Ilagan of Taal, Batangas, and
that the vendee mentioned in the said document was Maria Mirano. The
defendants, on the other hand, assert that the sale was evidenced by a
private writing prepared in the handwriting of Roman Biscocho and that it was
in favor of the spouses Doroteo Banawa and Juliana Mendoza. Neither the
public instrument allegedly ratified by Atty. Ilagan nor the private writing
supposedly prepared by Roman Biscocho was presented before the lower
court.

After laying the proper predicate for the presentation of secondary evidence,
the plaintiffs presented Atty. Vicente Ilagan and Roman Biscocho to testify
upon the execution of the aforesaid public instrument in December, 1935.
These two declared that sometime in December, 1935, the spouses Doroteo
Banawa and Juliana Mendoza, Maria Mirano, Roman Biscocho, Paula
Biscocho and Carmen Mendoza, accompanied by Atty. Regino Aro, went to
the office of Atty. Ilagan in Taal, Batangas; that Atty. Aro, who was a
classmate of Atty. Ilagan in the law school, asked the latter's permission to
use his typewriter on which he prepared a document in English and which he
asked Atty. Ilagan to ratify; that Atty. Ilagan translated into Tagalog the
contents of the said document to the parties and. the witnesses, after which
they all signed the same; that the document involved the sale of the
Carsuche property in favor of Maria Mirano: that after paying him P20.00 for
his services which Atty. Ilagan would not accept at first, Doroteo Banawa
asked Atty. Ilagan in Tagalog whether the document that he ratified was
'strong enough' (Matibay) to safeguard the rights of Maria Mirano, to which
Atty. Ilagan answered in the affirmative.

Doroteo Banawa, on the other hand, stated that on being offered the
Carsuche property by the owners thereof, they agreed on the purchase price
of P3,700.00 of which a down payment of P1,200.00 was made and, later, an
additional sum of P100.00 was given to Roman Biscocho, both payments
being evidenced by a receipt dated December 15, 1936 (Exh. '9'). A few days
later, Roman Biscocho prepared in his own handwriting a private document
selling the Carsuche property in favor of the spouses Doroteo Banawa and
Juliana Mendoza for the sum of P4,000.00, the vendors having asked for a
P300.00 increase in price. Doroteo Banawa, thereafter brought said private
document to the municipal treasurer of Taal, Batangas, to whom he
expressed the desire to have the land declared in the name of Maria Mirano
so that the latter might attend to the payment of taxes over the land
whenever he was away. This wish of Doroteo Banawa was done by his
thumb-marking an affidavit, thus accounting for the fact that said land
appears in the name of Maria Mirano in the tax declarations covering the
same from 1934 to 1956. 5

The petitioners assign the following errors: têñ.£îhqw â£

I
 THE HONORABLE COURT OF APPEALS GRAVELY ERRED IN LAW IN
RULING THAT THE PLACING OF IBA PROPERTY IN THE NAME OF THE
LATE MARIA MIRANO WAS IN THE NATURE OF A DONATION INTER-
VIVOS.

II

THE HONORABLE COURT OF APPEALS GRAVELY ERRED IN LAW IN

RULING THAT PETITIONERS' INTERPRETATION OF ARTICLE 632 OF
THE OLD CIVIL CODE IS TOO LITERAL AND IGNORES THE RATIONALE
OF THE LEGAL PROVISION.

III

THE HONORABLE COURT OF APPEALS GRAVELY ERRED IN LAW IN

RULING THAT THE 'EXCEPTIVE' CLAUSE' OF ARTICLE 1448 OF THE
CIVIL CODE IS APPLICABLE IN THE PRESENT CASE.

IV

THE HONORABLE COURT OF APPEALS GRAVELY ERRED IN LAW IN

RULING THAT SECTION 5, RULE 100 OF THE OLD RULES OF COURT
DOES NOT APPLY IN THE INSTANT CASE BECAUSE MARIA MIRANO
WAS NOT LEGALLY ADOPTED.

THE HONORABLE COURT OF APPEALS GRAVELY ERRED IN LAW IN

RULING WITH RESPECT TO THE CARSUCHE PROPERTY (LOT NO. 2)
THAT THE DEED OF SALE EXECUTED IN 1940 IN FAVOR OF THE
PETITIONERS DOROTEO BANAWA AND HIS WIFE JULIANA MENDOZA
AND WHICH WAS DULY REGISTERED DID NOT IMPAIR THE
PRETENDED SALE TO MARIA MIRANO. 6

The first, second, third and fourth errors assigned refer to the Iba property, parcel 1, while
the fifth error assigned refers to the Carsuche property, Lot 2. 7

As may be discerned from the assignment of errors, the basic issue is the ownership of the
two parcels of land in question. The plaintiffs appellees, respondents herein, assert title to
the lands as heirs of Maria Mirano. Defendants-appellants, petitioners herein, claim
ownership over them by virtue of purchase from the original owners.

Considering that in the case at bar the findings of fact of the Court of Appeals are not
contrary to those of the trial court, a minute scrutiny by this Court of said findings is not
necessary. In Tolentino vs. de Jesus, et al., 8 this Court held:
têñ.£îhqwâ£

The findings of facts of the respondent Court of Appeals are conclusive on

the parties and on this Court (Tamayo vs. Callejo, L- 25563, July 28, 1972,
46 SCRA 27; Nery, et al. vs. Lorenzo, et al., L-23096 & L-23376, April 27,
1972, 44 SCRA 43 1; Villacrucis vs. CA, L-29831, March 29, 1972, 44 SCRA
176; Dela Cruz, et al. vs. CA, L-24000, Nov. 29, 1971, 42 SCRA 68; Naga
 Dev. Corp. vs. CA, L-28175, Sept. 30, 1971, 41 SCRA 105, 115; Lacson &
Basilio vs. Pineda, et al., L-28523, July 16, 1971, 40 SCRA 35; Quiñ;ano, et
al. vs. CA, et al., L-23024, May 31, 1971, 39 SCRA 227; Reyes, et al. vs. CA,
et al., L-28466, March 27, 1971, 38 SCRA 138, 142; Gotamco Hermanas vs.
Shotwell, et al., L-22519, March 27, 1971, 38 SCRA 112-117; Limjoco vs.
CA, L-20656, Feb. 27, 1971, 37 SCRA 663-669; De Garcia, et al. vs. CA, L-
20264, Jan. 30, 1971, 37 SCRA 130, 136-137; Simeon vs. Peñ;a, L-29049,
Dec. 29, 1970, 36 SCRA 611), unless (1) the conclusion is a finding
grounded entirely on speculation, surmise and conjectures; (2) the inference
made is manifestly mistaken; (3) there is grave abuse of discretion; (4) the
judgment is based on misapprehension of facts; (5) the Court of Appeals
went beyond the issues of the case and its findings are contrary to the
admission of both appellant and appellees [Roque vs. Buan, L-22459, Oct.
31, 1967, 21 SCRA 648]; (6) the findings of facts of the Court of Appeals are
contrary to those of the trial court; (7) said findings of facts are conclusions
without citation of specific evidence on which they are based; (8) the facts set
forth in the petition as well as in the petitioner's main and reply briefs are not
disputed by the respondents [Garcia vs. CA, L-26490, June 30, 1970, 33
SCRA 622] ; and (9) when the finding of fact of the Court of Appeals is
premised on the absence of evidence and is contradicted by evidence on
record [Salazar vs. Gutierrez, L-21727, May 29, 1970, 33 SCRA 243].

The instant case does not fall under any of the exceptions.

However, all the issues raised by the petitioners shall be passed upon individually.

The first error assigned reads: têñ.£îhqwâ£

The Honorable Court of Appeals gravely erred in law in ruling that the placing
of the Iba Properly in the name of the late Maria Mirano was in the nature of
a donation inter-vivos.

The respondents 9 correctly pointed out that neither the Court of Appeals nor the Court of
First Instance of Batangas categorically stated that the placing of the properties in the name
of Maria Mirano was in the nature of a donation inter-vivos. In rejecting the petitioners'
contention that a donation mortis causa was executed, the Court of Appeals said that, under
the facts and circumstances narrated by the petitioners, the placing of the Iba property in the
name of Maria Mirano-if it was to be called a donation at all - was not in the nature of a
donation mortis causa, but rather it would be in the nature of a donation inter-vivos, giving its
reasons and citing the applicable law and decisions of this Court on the matter. The Court of
First Instance made the same hypothetical conclusion. 10

The finding of the Court of First Instance of Batangas which was sustained by the Court of
Appeals is that what was donated by the spouses Doroteo Banawa and Juliana Mendoza to
Maria Mirano was the money used in the purchase of the lands in question. This conclusion
of the Court of First Instance of Batangas was supported by the testimony of Macario B. Aro,
a nephew of the deceased Doroteo Banawa, that the money used by Maria Mirano in the
purchase of the Iba and Carsuche properties was given to her by, Doroteo Banawa. 11

If the money used by Maria Mirano in purchasing the properties was given to her by the
spouses Doroteo Banawa and Juliana Mendoza, or by either of them, then the money had
belonged to her. Maria Mirano purchased and paid for the said properties with her money. As
a matter or fact, the deed of sale, Exhibit "A", 12 recites as follows:
têñ.£îhqwâ£

Que en consideracion a la suma de Dos Mil Pesos moneda filipina

(P2,000.00) que me ha pagado Maria Mirano ... .

It is also contended by the petitioners that the deeds of sale executed by the owners of the
land in favor of Maria Mirano were simulated contracts intended to shortcut two different
transactions: (1) a sale in favor of the spouses Doroteo Banawa and Juliana Mendoza; and
(2) a donation of lands by the spouses in favor of Maria Mirano. 13

There are two kinds of simulated contracts, namely: the absolutely simulated contract and
the relatively simulated one. In both instances, however, their nullity is based on the want of
true consent of the parties. There is no intent to be bound or the true intent is hidden or
concealed. Such contracts are even generally regarded as fraudulent with intent of injuring
third persons. The purpose, therefore, of a simulated contract which may be annulled is to
conceal the parties' true intent, or to deceive or defraud third persons.

From the record, there is no showing of deception or fraud, nor of concealment of intent of
the parties as to the sale of the Iba property by the vendors in favor of Maria Mirano. The
transactions which transpired were purely: (1) donations of money or things representing or
equivalent to money by the spouses in favor of Maria Mirano which could be made and
accepted verbally; and (2) purchase of lands by Maria Mirano with the use of that money or
credits (pre-existing indebtedness in favor of the spouses) as consideration thereof.

The petitioners' contention that "the contract of sale had been intended to be a contract of
sale between the vendors and the spouses Doroteo Banawa and Juliana Mendoza" has no
merit. The petitioners were present when the sales were made to Maria Mirano. They were
the ones who caused the titles to the properties to be placed in the name of Maria Mirano
because they wished "that after our death Maria Mirano could have something for her
maintenance. 14Moreover, the testimony of Vicente Ilagan, the notary public before whom the
deed of sale was executed, to the effect that he was asked by Doroteo Banawa in Tagalog
"Kung matibay ang documenting ito para kay Maria" 15 and to which query he answered,
"Yes, Sir", 16 supports this conclusion. The conduct of the spouses at the time of the
execution of the contracts are inconsistent with those which the petitioners, the late spouses
and their successors-in interest, now assert. Their intention to make Maria Mirano the owner
of the said parcels of land was clearly shown by their conduct at the time of the execution of
the deeds of sale which influenced the vendors to believe that Maria Mirano was indeed the
vendee in their agreement. The petitioners had full knowledge of the facts surrounding the
execution of the document of sale. They are equitably estopped 17 to deny that the transfer of
the lands in question in favor of Maria Mirano was the actual and true intent of the parties as
embodied in the documents of sale of the Iba and Carsuche properties. The documents are
what they purport to be — contracts of sale from the vendors to the vendee, Maria Mirano.

The petitioners submit that since there was transfer of title to the land in litigation to Maria
Mirano when the purchase price was in fact actually paid by the petitioners-spouses, an
implied trust was created. The present law on implied trust is Article 1448 of the New Civil
Code which provides: têñ.£îhqw â£

Art. 1448. There is an implied trust when property is sold, and the legal
estate is granted to one party but the price is paid by another for the purpose
of having beneficial interest of the property. The former is the trustee, while
 the latter is the beneficiary. However if the person to whom the title is
conveyed is a child, legitimate or illegitimate, of the one paying the price of
the sale, no trust is implied by law, it being disputably presumed that there is
a gift in favor of the child.

The transactions in question took place before the Civil Code of the Philippines became
effective on August 30, 1950. Hence Article 1448 of said Code is not applicable. 18

Moreover, there is no showing that Maria Mirano bought the lands in question in trust for the
petitioners.

The petitioners also claim that they have become owners of the properties by acquisitive
prescription under Article 1957 of the Old Civil Code which provides: têñ.£îhqw â£

Ownership and other real rights in immovable property shall prescribe by

possession in good faith and under a just title for ten years as between
persons present and for twenty years as between absentees.

The above-cited provision speaks of two essential requirements: (1) possession for ten (10)
years as between persons present and twenty (20) years, for absentees; and (2) a just title.

As regards the Iba property (Lot No. 1), petitioners have not presented any title, just or
otherwise, to support their claim. And Article 1954 of the Old Civil Code provides, further,
that a "just title must be proven; it never can be presumed."

Not having a just title, as required by Article 1957 of the Old Civil Code, the petitioners
cannot invoke prescription with respect to the Iba property.

The petitioners also assert ownership by acquisitive prescription over the Iba property under
Section 41 of the Code of Civil Procedure. The pertinent portion of Section 41 of the Code of
Civil Procedure reads têñ.£îhqw â£

Ten years actual adverse possession by any person claiming to be the owner
for that time of any land or interest in land, uninterruptedly continued for ten
years by occupancy, descent, grants, or otherwise in whatever way such
occupancy may have commenced or continued, shall vest in every actual
occupant or possessor of such land a full and complete title, saving to the
persons under disabilities the rights secured by the next section. In order to
constitute such title by prescription or adverse possession, the possession by
the claimant or by the person under or through whom he claims must have
been actual open, public, continuous, under a claim of title exclusive of any
other right and adverse to all other claimants ...

It is a fact that while Maria Mirano was alive she possessed the property in question as the
owner thereof Hence, it is error for the petitioners to claim ownership over the Iba property by
acquisitive prescription under Article 41 of the Code of Civil Procedure for their possession of
the said property became adverse and exclusive only in July 1949 after Maria Mirano's
death. From 1949 to the date of the filing in 1957 of the present action by the respondents
only eight years had elapsed.

The second error assigned is: têñ.£îhqw â£

 The Honorable Court of Appeals gravely erred in law in ruling that petitioners'
interpretation of Article 632 of the Old Civil Code is too literal and ignores the
rationale of the legal provision.

Article 632 of the Old Civil Code provides: "Donations of personal property may be made
verbally or in writing. Verbal donation requires the simultaneous delivery of the gift. In the
absence of this requisite the donation shall produce no effect, unless made in writing and
accepted in the same form."

It is contended by the petitioners that oral donation of personal property requires

simultaneous delivery of the gift. As regards the Iba property, the consideration given by
Maria Mirano for the purchase of the said property from Placido Punzalan was the pre-
existing debts of the latter to the spouses Doroteo Banawa and Juliana Mendoza.

The contention of the petitioners that there was no simultaneous delivery of the credits to
Maria Mirano is not meritorious. Delivery may be actual or constructive.

Actual delivery consists in the giving of actual possession to the vendee or his agent, as for
example, in manually transferring the possession of a thing from the vendor to the vendee.

Constructive delivery is a general term comprehending all those acts which, although not
conferring physical possession of the thing, have been held by construction of law equivalent
to acts of real delivery, as for example, the giving of the key to the house, as constructive
delivery of the house from the vendor to the vendee.

In the instant case, the oral donation of the gift consisting of pre-existing obligations of the
vendor, Placido Punzalan, was simultaneous or concurrent with the constructive delivery
thereof to Maria Mirano when the spouses consented to the execution of the deed of sale of
the Iba property in favor of Maria Mirano. The execution of the said deed of sale constituted
payment by the vendor, Placido Punzalan, of his outstanding obligations due to the spouses,
Doroteo Banawa and Juliana Mendoza. Consequently, there was constructive transfer of
possession of the incorporeal rights of the spouses over the property in question to Maria
Mirano.

It is no longer necessary to discuss the third error assigned because of the holding that
Article 1448 of the New Civil Code has no retroactive application to the instant case.

Anent the fourth error assigned, the petitioners urge that the donor spouses are entitled to
the land in question by virtue of Section 5, Rule 100 of the Old Rules of Court, the pertinent
portion of which reads: têñ.£îhqwâ£

... In case of the death of the child, his parents and relatives by nature, and
not by adoption, shall be his legal heirs, except as to property received or
inherited by the adopted child from either of his parents by adoption, which
shall become the property of the latter or their legitimate relatives who shall
participate in the order established by the Civil Code for intestate estates.

The submission of the petitioners is that extrajudicial adoption is within the contemplation
and spirit of this rule of reversion adoptive. However, the rule involved specifically provides
for the case of the judicially adopted child. It is an elementary rule of construction that when
the language of the law is clear and unequivocal, the law must be taken to mean exactly
what it says.
The fifth error assigned is: têñ.£îhqwâ£

The Honorable Court of Appeals gravely erred in law in ruling with respect to
the Carsuche property (Lot No. 2) that the deed of sale executed in 1940 in
favor of the petitioner Doroteo Banawa and his wife Juliana Mendoza did not
impair the pretended sale to Maria Mirano.

The Court of Appeals found that there was a sale of the Carsuche property in 1935 in favor
of Maria Mirano and that such sale was embodied in a public instrument. However, in 1940
the same land was sold to the petitioners. The sale was duly registered. The petitioners
immediately entered into the possession of the land as owners.

The claim of the petitioners that they have acquired by acquisitive prescription the Carsuche
property (Lot No. 2) is meritorious.

Section 40 of the Code of Civil Procedure provides: "Period of prescription as to real estate
— An action for recovery of title to, or possession of, real property, or an interest therein, can
only be brought within ten years after the cause of action accrues."

That the aforesaid Section 40 governs the instant case is clear from Article 1116 of the New
Civil Code which provides that "prescriptions already running before the effectivity of the
New Civil Code, shall be governed by the laws previously in force." The prescriptive period
commenced to run since 1940, the date the sale in favor of the Banawas was registered with
the Register of Deeds of Batangas. Hence the Code of Civil Procedure governs.

The instant case, not having been filed within ten (10) years from the time the cause of
action accrued in 1940, prescribed under Section 40 of the Code of Civil Procedure in 1950
because the same was filed only in 1957, seventeen (17) years later.

The possession of the Banawas over the Carsuche property ripened into full ownership in
1950, ten (10) years after 1940, when the possession of the petitioner-spouses which was
actual, open, public and continuous, under a claims of title exclusive of any other right and
adverse to all other claim commenced. (Sec. 41, Code of Civil Procedure). The sale in favor
of the Banawas was registered in 1940 with the Register of Deeds of Batangas. The actual
and adverse possession of the petitioner-spouses was continued by their present
successors.

The alleged bad faith of the petitioners in that they knew that the land was previously sold to
Maria Mirano is of no consequence because Section 41 of the Code of Civil Procedure
provides that there is prescription "in whatever way such occupancy may have commenced."
As held in one case "... guilty knowledge is of no moment for under the law title by
prescription may be acquired in whatever way possession may have been commenced or
continued and so long as the possessor had possessed the land openly, publicly,
continuously and under a claim of title for a period of over ten years." 19

The trial court found that the two parcels of land in question with a combined area of a little
less than ten (10) hectares had an average annual net yield of P 500.00. A total amount of P
4,500.00 as actual damages was awarded in as much as Maria Mirano had been dead for
nine (9) years when the decision of the trial court was rendered. An adjustment should be
made in view of the finding of this Court that the Carsuche property, Lot 2, belongs to the
petitioners.
The Iba property, Lot 1, is about 45% of the combined area of the two lands in question.
Forty-five percent (45 %) of the annual net income of P500.00 is equivalent to P225.00.
Maria Mirano has been dead for about thirty-one (31) years now. During all this period, the
petitioners have been in possession of the Iba property and receiving the products thereof.
They should pay as actual damages the total amount of P6,975.00 representing the net
income for the period of thirty-one (31) years on the basis of P225.00 a year.

The respondents are also entitled to attorney's fees in the amount of P1,000.00.

WHEREFORE, the decision of the Court of Appeals is hereby affirmed as to the Iba property
(Lot No. 1) but reversed as to the Carsuche property (Lot No. 2) which was acquired by the
spouses Doroteo Banawa and Juliana Mendoza who could validly donate the said property
to Casiano Amponin and Gliceria Abrenica The petitioners are ordered to pay the private
respondents the total amount of Six Thousand Nine Hundred Seventy-Five Pesos
(P6,975.00) as actual damages and the amount of One Thousand Pesos (P1,000.00) as
attorney's fees, without pronouncement as to costs.

SO ORDERED.

Guerrero, De Castro and Melencio-Herrera, JJ., concur. 1äwphï1.ñët

Teehankee (Chairman), concurs in the result.

Separate Opinions

MAKASIAR, J., concurring and dissenting:

I dissent, re the Iba parcel; because there was no valid donation of the land or of the
purchase money. In addition to the views expressed by the learned counsel for the
petitioners, to which I subscribe, I wish to stress the following:

1. The money with which to buy the property was not donated to Maria by the spouses
Juliana Mendoza and Doroteo Banawa. Said spouses would not donate the large amount of
P4,080.00 (although the deed states the amount as P2,000.00) to Maria Mirano who was
merely tutored to learn the 3 R's — reading, writing and arithmetic — at the expense of said
spouses. While it is true that they supported her, gave her money, clothes and even jewelry,
they did not send her to school, much less give her a college education. It is unthinkable that
the said spouses would give her P4,080.00 when they could not even give her a primary
education which would cost very much less (from 1911 to 1915). The jewelry they could have
given to her could not be better than trinkets, the cost of which was negligible but could be a
fond possession of a poor, impressionable child in the rural area like Maria;

2. No cash actually passed to Maria from the spouses The amount of P4,080.00 allegedly
donated by the spouses to Maria represented the various loans in the amounts of P1,200.00,
P1,800.00 and P1,080.00 previously extended to Placido Punzalan who, as vendor, sold the
Iba parcel in payment of his debt. While the purchase price was P3,700.00, the purchase
price was made to appear in the document as P2,000.00 to save on notarial fees;

3. Up to the time of her death on July 31, 1949 at the age of 48, Maria was still living with the
spouses who reared her. This fact shows that Maria was still being supported by the spouses
Doroteo Banawa and Juliana Mendoza;

4. If there was a valid donation of the money to pay for the Iba sugar land in Taal in 1921,
which consists of 4.42 hectares, it would seem that Maria would have sufficient funds derived
from the produce of such a big parcel with which to purchase for herself the Carsuche parcel
for the amount of P3,700.00 or P4,000.00. But the fact of the matter is that it was still the
spouses Juliana Mendoza and Doroteo Banawa who paid for the Carsuche property, only
that the sale was allegedly made in favor of Maria, whom they did not legally adopt, to insure
the survival of Maria long after they would have been dead as they were then already old.
Again, this goes against the grain of human nature; because no such deep concern was
exhibited by the spouses in favor of their legally adopted daughter Gliceria Abrenica; and

5. The spouses legally adopted petitioner Gliceria Abrenica, wife of co-petitioner Casiano
Amponin, but never legally adopted Maria, niece of petitioner Juliana Mendoza. If the said
spouses wanted to favor their niece Maria for helping in their business, they could have
easily adopted her legally and thereby make her their legal heir, like petitioner Gliceria
Abrenica.

I concur re the Carsuche parcel.

There was no valid sale in favor of Maria Mirano of said lot because:

1. While a photostat copy of the earlier deed of sale of 1921 was secured from the Division of
Archives of the Bureau of Libraries and submitted in evidence as Exhibit A; no copy of the
later alleged deed of sale in 1935 was presented in evidence concerning the Carsuche
parcel. If there was such a 1935 deed of sale (14 years after the 1921 deed), a certified true
copy thereof could be more easily secured from the Division of Archives of the Bureau of
Libraries, as it was a later document (1935) than the 1921 deed of sale, which is available.
The alleged sale in December, 1935 was allegedly notarized by Atty. Vicente Ilagan. It is
strange that Atty. Aro who allegedly prepared the deed of sale, was not the one who
notarized the same;

2. In 1935, Maria was already 23 years old. Being a very important document purportedly
evidencing her title to the Carsuche sugar land also in Taal, of 5.4093 hectares, she should
have retained the original or a copy of the alleged deed of sale, specially considering that the
sum of P4,000.00 was allegedly paid for the same;

3. The cancelled tax declaration of the previous owner the vendor - or the new tax
declaration in the name of the buyer, usually states the reason for such cancellation, like a
deed of sale with its date and may include the name of the notary public and place of
execution of the document. There is no intimation of such a statement or entry in the
cancelled tax declaration of the vendor or in the new tax declaration in the name of Maria
Mirano; and

4. There is no discussion of any exhaustive examination of the other four possible sources of
the copies of the alleged 1935 deed of sale — from the vendor, the notary public, the office
of the clerk of court, and as above-stated, the alleged vendee herself.
Separate Opinions

MAKASIAR, J., concurring and dissenting:

I dissent, re the Iba parcel; because there was no valid donation of the land or of the
purchase money. In addition to the views expressed by the learned counsel for the
petitioners, to which I subscribe, I wish to stress the following:

1. The money with which to buy the property was not donated to Maria by the spouses
Juliana Mendoza and Doroteo Banawa. Said spouses would not donate the large amount of
P4,080.00 (although the deed states the amount as P2,000.00) to Maria Mirano who was
merely tutored to learn the 3 R's — reading, writing and arithmetic — at the expense of said
spouses. While it is true that they supported her, gave her money, clothes and even jewelry,
they did not send her to school, much less give her a college education. It is unthinkable that
the said spouses would give her P4,080.00 when they could not even give her a primary
education which would cost very much less (from 1911 to 1915). The jewelry they could have
given to her could not be better than trinkets, the cost of which was negligible but could be a
fond possession of a poor, impressionable child in the rural area like Maria;

2. No cash actually passed to Maria from the spouses The amount of P4,080.00 allegedly
donated by the spouses to Maria represented the various loans in the amounts of P1,200.00,
P1,800.00 and P1,080.00 previously extended to Placido Punzalan who, as vendor, sold the
Iba parcel in payment of his debt. While the purchase price was P3,700.00, the purchase
price was made to appear in the document as P2,000.00 to save on notarial fees;

3. Up to the time of her death on July 31, 1949 at the age of 48, Maria was still living with the
spouses who reared her. This fact shows that Maria was still being supported by the spouses
Doroteo Banawa and Juliana Mendoza;

4. If there was a valid donation of the money to pay for the Iba sugar land in Taal in 1921,
which consists of 4.42 hectares, it would seem that Maria would have sufficient funds derived
from the produce of such a big parcel with which to purchase for herself the Carsuche parcel
for the amount of P3,700.00 or P4,000.00. But the fact of the matter is that it was still the
spouses Juliana Mendoza and Doroteo Banawa who paid for the Carsuche property, only
that the sale was allegedly made in favor of Maria, whom they did not legally adopt, to insure
the survival of Maria long after they would have been dead as they were then already old.
Again, this goes against the grain of human nature; because no such deep concern was
exhibited by the spouses in favor of their legally adopted daughter Gliceria Abrenica; and

5. The spouses legally adopted petitioner Gliceria Abrenica, wife of co-petitioner Casiano
Amponin, but never legally adopted Maria, niece of petitioner Juliana Mendoza. If the said
spouses wanted to favor their niece Maria for helping in their business, they could have
easily adopted her legally and thereby make her their legal heir, like petitioner Gliceria
Abrenica.

I concur re the Carsuche parcel.

There was no valid sale in favor of Maria Mirano of said lot because:
1. While a photostat copy of the earlier deed of sale of 1921 was secured from the Division of
Archives of the Bureau of Libraries and submitted in evidence as Exhibit A; no copy of the
later alleged deed of sale in 1935 was presented in evidence concerning the Carsuche
parcel. If there was such a 1935 deed of sale (14 years after the 1921 deed), a certified true
copy thereof could be more easily secured from the Division of Archives of the Bureau of
Libraries, as it was a later document (1935) than the 1921 deed of sale, which is available.
The alleged sale in December, 1935 was allegedly notarized by Atty. Vicente Ilagan. It is
strange that Atty. Aro who allegedly prepared the deed of sale, was not the one who
notarized the same;

2. In 1935, Maria was already 23 years old. Being a very important document purportedly
evidencing her title to the Carsuche sugar land also in Taal, of 5.4093 hectares, she should
have retained the original or a copy of the alleged deed of sale, specially considering that the
sum of P4,000.00 was allegedly paid for the same;

3. The cancelled tax declaration of the previous owner the vendor - or the new tax
declaration in the name of the buyer, usually states the reason for such cancellation, like a
deed of sale with its date and may include the name of the notary public and place of
execution of the document. There is no intimation of such a statement or entry in the
cancelled tax declaration of the vendor or in the new tax declaration in the name of Maria
Mirano; and

4. There is no discussion of any exhaustive examination of the other four possible sources of
the copies of the alleged 1935 deed of sale - from the vendor, the notary public, the office of
the clerk of court, and as above-stated, the alleged vendee herself.
G.R. No. L-25577 March 15, 1966

ONOFRE P. GUEVARA, petitioner,

vs.
RAOUL M. INOCENTES, respondent.

Ambrosia Padilla and Onofre Guevara for the petitioner.

Office of the Solicitor General for the respondent.

BAUTISTA ANGELO, J.:

This decision is written in keeping with the statement we made in our resolution dated
February 16, 1966.

Petitioner was extended an ad interim appointment as Undersecretary of Labor by the former

Executive on November 18, 1965, having taken his oath of office on November 25 of the
same year, and considering that the ad interim appointment for the same position extended
to respondent by the incumbent Executive on January 23, 1966 is invalid in spite of
Memorandum Circular No. 8 issued by the latter on the same date declaring all ad
interim appointments made by the former Executive as having lapsed with the adjournment
of the special session of Congress at about midnight of January 22, 1966, petitioner brought
before this Court the instant petition for quo warranto seeking to be declared the person
legally entitled to said office of Undersecretary of Labor.

The petition is predicated on the following grounds: (1) under Article VII, Section 10(4) of the
Constitution, petitioner's ad interim appointment is valid and permanent and may only
become ineffective either upon express disapproval by the Commission on Appointments or
upon the adjournment of the regular session of Congress of 1966; (2) here there has been
no express disapproval by the Commission on Appointments because the same has never
been constituted during the special session called by President Marcos in his Proclamation
No. 2, series of 1966; and (3) there has been no adjournment of the Congress as
contemplated in the Constitution because (a) the aforesaid special session was suspended
by the House on Saturday, January 22, 1966 at 10:55 p.m. to be resumed on Monday,
January 24, 1966 at 10:00 a.m.; (b) the resolution approved by the Senate on January 23,
1966 at past 2:00 a.m. for adjournment sine die is not the adjournment contemplated in
Article VII, Section 10(a) of our Constitution; (c) the suspension by the House or the
adjournment by the Senate to resume the session on January 24, 1966 at 10:00 a.m. meant
the end of the special session and the start of the regular session as a continuous session
without any interruption; and (d) the phrase "until the next adjournment of the Congress"
must be related with the phrase "until disapproval by the Commission on Appointments" so
that the adjournment contemplated should refer to a regular session during which the
Commission on Appointments may be organized and allowed to discharge its functions as
such.

Respondent, on the other hand, set up the following defenses: (1) petitioner's ad
interim appointment lapsed when Congress adjourned its last special session called under
Proclamation No. 2 of President Marcos; (2) an ad interim appointment ceases to be valid
after each term of Congress and so petitioner's appointment must have lapsed as early as
December 30, 1965; (3) petitioner's ad interim appointment as well as others made under
similar conditions, is contrary to morals, good customs and public policy, and hence null and
void; and (4) petitioner's appointment is void in the light of the doctrine laid down
in Rodriguez, Jr. vs. Quirino, G.R. No. L-19800 October 28, 1953.
After due deliberation, the Court resolved that the ad interim appointment extended to
petitioner on November 18, 1965 by the former Executive lapsed when the special session of
Congress adjourned sine die at about midnight of January 22, 1966, as embodied in our
resolution dated February 16, 1966.

We will now elaborate on the reasons expressed in said resolution.

The important provision to be considered is Article VII, Section 10, Subsection 4 of our
Constitution, which provides:

The President shall have the power to make appointments during the recess of the
Congress, but such appointments shall be effective only until disapproval by the
Commission on Appointments or until the next adjournment of the Congress.

A perusal of the above-quoted provision would at once reveal that it is the clear intent of the
framers of our Constitution to make a recess appointment effective only (a) until disapproval
by the Commission on Appointments, or (b) until the next adjournment of Congress, and
never a day longer regardless of the nature of the session adjourned. And this is so
considering the plain language of the aforesaid provision which is free from any ambiguity in
the light of the well-settled rule of statutory construction that "when the intention of the
legislature is so apparent from the face of the statute that there can be no question as to its
meaning there is no room for construction" (Vol. 2, Sutherland, Statutory Construction, p.
316). Hence, the above provision contemplates two modes of termination of an ad
interim appointment, or of one made during the recess of Congress, which are completely
separate from, and independent of, each other. And while during the special session called
under proclamation No. 2 no Commission on Appointments was organized by Congress, the
second mode of termination, however, had its constitutional effect, as when Congress
adjourned sine die at about midnight of January 22. 1966. Such adjournment, in legal
contemplation, had the effect of terminating petitioner's appointment thereby rendering it
legally ineffective.

Petitioner's theory that the first mode of termination consisting in the disapproval by the
Commission on Appointments should be inseparately related with the clause "until the next
adjournment of Congress" in the sense that the Commission has to be first organized in
order that the last mode may operate is untenable considering that the latter is not
dependent upon, nor influenced in any manner by the operation of the former. As already
stated, the two modes of termination are completely separate from and independent of each
other. If the framers of the Constitution had intended to make the operation of the second
clause dependent upon the prior constitution of the Commission on Appointments they
should have so stated in clear terms considering that the first clause implies a positive act of
the Commission, while the second an entirely separate and independent act of Congress.
Indeed, the theory of petitioner, if carried to its logical conclusion, may result into the
anomaly that, should Congress be controlled by a party not inclined to organize said
Commission, or should there arise a group which for reasons of its own indulges in
obstructionism, the Commission on Appointments contemplated in the Constitution is never
organized as a consequence of the action of either, any appointment made during the recess
of Congress would never run the test of legislative scrutiny and would thereby then be
always considered permanent even if it is extended ad interim, a result which, to be sure,
was never intended by the framers of our Constitution. It thus becomes imperative that we
avoid such absurd result.
It is true that the provision of the Constitution we are now considering in speaking of the
mode of termination epitomized in the phrase "until the next adjournment of the Congress"
does not make any reference to any specific session of the Congress, — whether regular or
special, — but such silence is of no moment, for it is a well-known maxim in statutory
construction that when the law does not distinguish we should not distinguish. UBI LEX NON
DISTINGUIT NEC NOS DISTINGUERE DEBEMUS (Robles vs. Zambales Chromite Mining
Company, et al., G. R. No. L-12560, September 30, 1958). Consequently, it is safe to
conclude that the framers of our Constitution in employing merely the word adjournment as a
mode of terminating an appointment made during the recess of Congress had in mind either
the regular or special session, and not simply the regular one as contended by petitioner.

Under our tripartite form of government predicated on the principle of separation of powers
the power to appoint is inherently an executive function while the power to confirm or reject
appointments belongs to the legislative department, the latter power having been conferred
as a check on the former. This power to check may be exercised through the members of
both Houses in the Commission on Appointments. But although the Commission on
Appointments is provided for in the Constitution, its organization requires congressional
action, and once organized, by express provision of the Constitution, it "shall meet only while
Congress is in session." Consequently, if for any reason Congress adjourns a regular or
special session without organizing the Commission on Appointments, Congress should be
deemed to have impliedly exercised said power to check by allowing the ad
interim appointments to lapse as provided for in the Constitution.

The next important inquiry is: Since Congress in its special session held under Proclamation
No. 2 of the President, series of 1966, did not deem it wise to organize the Commission on
Appointments to act on the recess appointments made by the former Executive, can it be
said that Congress is deemed to have impliedly exercised its power to check on such recess
appointments when it adjourned its special session at about 12:00 o'clock midnight of
January 22, 1966?

The answer must of necessity be in the affirmative inasmuch as that special session actually
adjourned in legal contemplation at about 12:00 midnight of January 22, 1966 considering
that the Senate adjourned sine die at about said hour. Although the House allegedly
suspended its session at 10:55 p.m. on January 22, 1966 to be resumed on Monday,
January 24, 1966, at 10:00 a.m., Congress cannot be considered to be in special session
subsequently to January 22 for the reason that the House without the Senate which had
adjourned sine die, is not "Congress." Indeed, when the Senate adjourned at 12:00 midnight
on January 22, 1966 this adjournment should be considered as the "next adjournment of the
Congress" of the special session notwithstanding the alleged suspension of the session
earlier by the House for the reason that neither the House nor the Senate can hold session
independently of the other in the same manner as neither can transact any legislative
business after the adjournment of the other. None other than President Macapagal and
Speaker Cornelio Villareal expressed such opinion when as members of the Lower House in
1954 they expoused and defended the same on the floor as can be seen from the following
transcript of the congressional record:

Mr. MACAPAGAL — . . . Since the Senate has, by its own responsibility, adjourned
one and a half hours ago, therefore, under the present facts, in our Constitution this
House is automatically adjourned, and therefore it is improper and illegal for us to
continue the proceedings farther.

xxx xxx xxx

 Mr. VILLAREAL — Mr. Speaker, although it is true that I do not want to appeal from
the ruling of the Chair, nonetheless, I maintain that our actuations from the time we
approved that resolution will be illegal acts, and I do not want this Congress to
commit illegal acts because it will affect the dignity of this Chamber. We are not
unaware of the facts. I invite the Presiding Officer and everybody here to go to the
Senate now, and if they accept my challenge, let us go so that I can prove to them
that there is not one ghost of any Senator in that Chamber. The Senate has actually
adjourned, Mr. Speaker, and are we to have a fiction here that the Senators are still
holding a session? We approved that resolution of adjournment before twelve o'clock
tonight knowing that the Senate adjourned two or three hours ago. Are we crazy here
to believe that the Senators are still holding sessions? How can we in conscience
justify our actuations here that we are still doing something for the benefit of the
people when in fact and in truth we are not because we cannot do so? . . .

Mr. Speaker, let us be frank; let us be honest to ourselves; let us not ridicule
ourselves; let us adjourn now because we having nothing to do and all that we will do
will be illegal beginning now. . . .

Mr. Speaker. I honestly believe that legally we cannot do anything any further, and if I
am the author of a bill pending approval, I would not submit the bill for passage now
because that will be the subject of litigation in court as to whether such approval will
be legal or not, and I would never risk my committee report to be submitted after the
approval of that resolution, knowing fully well that actually and physically that Upper
Chamber has already adjourned. (Congressional Record, House of Representatives,
3rd Congress, Republic of the Philippines, First Regular and First Special Sessions,
Vol. I, pp. 4091 and 4094).1äwphï1.ñët

As a corollary, the theory that there was a continuous session without any interruption when
the house allegedly suspended its session at 10:55 p.m. on January 22, 1966 to be resumed
on Monday, January 24, 1966 at 10:00 a.m. cannot be accepted, because such theory runs
counter to well-established parliamentary precedents and practice. Thus, for one thing,
between January 22, 1966 at 10:55 p.m. and January 24, 1966 at 10:35 a.m. when the
House opened its regular session, there intervened January 23, 1966, which was Sunday,
and as such is expressly excluded by the Constitution as a session day of Congress. For
another, it is imperative that there be a "constructive recess" between a special and regular
session, as when a regular session succeeds immediately a special session or vice-versa,
and so a special session cannot be held immediately before a regular session without any
interruption nor can both be held simultaneously together. Hinds' Precedents has the
following to say on the matter:

The commissions granted during the recess prior to the convening of Congress in
extraordinary session November 9, 1903, of course furnished lawful warrant for the
assumption by the persons named therein of the duties of the offices to which they
were, respectively, commissioned. Their names were regularly sent to the Senate
thereafter. If confirmed, of course they would hold under appointment initiated by the
nomination without any regard to the recess commission. If not confirmed, their right
to hold under the recess nomination absolutely ended at 12 o'clock meridian on the
7th of December, 1903, for at that hour the extraordinary session ended and the
regular session of Congress began by operation of law. An extraordinary session and
a regular session can not coexist, and the beginning of the regular session at 12
o'clock was the end of the extraordinary session; not a constructive end of it, but an
actual end of it. At 12 o'clock December 7 the President pro tempore of the Senate
said:
 Senators, the hour provided by law for the meeting of the first regular session
of the Fifty-eighth Congress having arrived, I declare the extraordinary
session adjourned without day.

Aside from the statement upon the record that the "hour had struck" which marked
the ending of the one and the beginning of the other, the declaration of the President
pro tempore was without efficacy. It did not operate to adjourn without day either the
Congress or the Senate. Under the law the arrival of the hour did both.

The constitutional provision that the commission shall expire at the end of the next
session is self-executing, and when the session expires the right to hold under the
commission expires with it. If there be no appreciable point of time between the end
of one session and the beginning of another, since of necessity one ends and
another begins, the tenure under the commission as absolutely terminates as if
months of recess supervened. (Hinds' Precedents of the House of Representatives
of the United States, Vol. V, p. 854.)

Considering now petitioner's ad interim appointment and others extended under similar
conditions in the light of the doctrine we laid down in the Aytona case, we may say that they
were even more irregular than those involved in said case to the extend that they may be
avoided even on this ground alone. Thus, while President Garcia only extended 350 ad
interim appointments after he had lost the election, President Macapagal made 1,717 ad
interim appointments most of which were made only after the elections in November, 1965.
As a consequence, the following anomalies were noted: a former presidential assistant was
appointed judge of three different salas, another was appointed to a non-existing branch of
the Court of First Instance of Pangasinan, while still another who had a pending disbarment
case received an ad interim appointment as judge of first instance. This is indeed a far cry
from the following admonition we made in the Aytona case:

Of course, nobody will assert that President Garcia ceased to be such earlier than at
noon of December 30, 1961. But it is common sense to believe that after the
proclamation of the election of President Macapagal, his was no more than a
"caretaker" administration. He was duty bound to prepare for the orderly transfer of
authority to the incoming President, and he should not do acts which, he ought to
know, would embarrass or obstruct the policies of his successor. The time for debate
had passed; the electorate had spoken. It was not for him to use his powers as
incumbent President to continue the political warfare that had ended or to avail
himself of presidential prerogatives to serve partisan purposes. The filling up of
vacancies in important positions, if few, and so spaced as to afford some assurance
of deliberate action and careful consideration of the need for the appointment and the
appointee's qualifications may undoubtedly be permitted. But the issuance of 350
appointments in one night and the planned induction of almost all of them a few
hours before the inauguration of the new President may, with some reason, be
regarded by the latter as an abuse of Presidential prerogatives, the steps taken being
apparently a mere partisan effort to fill all vacant positions irrespective of fitness and
other conditions, and thereby to deprive the new administration of an opportunity to
make the corresponding appointments. (Aytona vs. Castillo, et al., G.R. No. L-19313,
January 20, 1962.)

It is hoped that now and hereafter such excess in the exercise of power should be obviated
to avoid confusion, uncertainty, embarrassment and chaos which may cause disruption in
the normal function of government to the prejudice of public interest. It is time that such
excess be stopped in the interest of the public weal.

Wherefore, petition is denied. No costs.

Bengzon, C.J., Reyes, J.B.L., Barrera and Regala, JJ., concur.

Makalintal, J., dissents for the same reasons previously expressed by him in the resolution of
Feb. 16, 1966.
Bengzon, J.P., and Sanchez, JJ., took no part.

Separate Opinions

CONCEPCION, J., concurring:

Having been extended an ad interim appointment, dated November 18, 1965, as

Undersecretary of Labor, petitioner Onofre F. Guevara assumed the office on November 25,
1965. The question for determination is whether his title to said office has lapsed upon
adjournment of the special session of Congress that began on January 17, 1966, in view of
the provisions of Section 10(4), Article VII of the Constitution, reading:

The President shall have the power to make appointments during the recess of the
Congress, but such appointments shall be effective only until disapproval by the
Commission on Appointments or until the next adjournment of the Congress.

Petitioner maintains that the question adverted to above should be answered in the negative,
for there has been no adjournment of Congress because the aforementioned special session
had commenced on January 17, 1966, and, although the Senate had adjourned sine
die shortly after midnight of January 22 to 23, 1966, the House of Representatives merely
suspended its session on January 22, 1966, at 10:55 p.m., "to be resumed on January 24,
1966, at 10:00 a.m." when the present regular session began. Petitioner concludes,
therefrom, that Congress has been in continuous session without any interruption" since
January 17, 1966.

This pretense is clearly devoid of merit for:

1. The Senate had admittedly adjourned at about midnight of January 22 to 23, 1966.
Inasmuch as the House of Representatives is only a part of our Congress, not Congress
itself, it follows necessarily that "Congress" can not be said to have been in session on
January 23, 1966.

2. Not even the House was in special session on January 23 and 24, 1966. The fact is that it
did not hold any session on January 23, 1966. Although it purported to have "suspended" the
session on January 22 to be resumed on January 24, the House did not, evidently, intend to
"resume" the special session on January 24, 1966, at 10:00 a.m., for: a) the members of the
House knew that the regular session would then begin; b) the regular session did begin on
January 24, 1966, at 10:00 a.m.; and c) they did not meet, or try or even purport to meet
in special session on January 24, 1966, or at any other time after January 22, 1966. In other
words, when, on January 22, 1966 at 10:55 p.m., the House placed on record that the
(special) session was then suspended to be resumed on January 24, 1966, at 10:00 a.m., it
meant that the Congressmen would meet on January 24, 1966, at 10:00 a.m., not in special
session, but to begin the regular session.
3. Petitioner does not claim that Congress is still in special session. It is, likewise, an
undisputable and undisputed fact that the regular session of Congress had begun on
January 24, 1966. Since the commencement of such regular session has necessarily put an
end, ipso facto, to the special session that began on January 17, 1966, the inevitable
conclusion is that Congress, assembled in such special session, has adjourned since, at
least, January 24, 1966,1even if we assumed hypothetically that its two (2) Houses had
actually assembled daily in legislative session, without any interruption, from January 17 up
to this date, which is not a fact. Indeed, said assumption does not offset the fact that the
present regular session of Congress is different, distinct and separate from said special
session; that said regular session is not the session next following the issuance of
petitioner's ad interim appointment; and that, even if the regular session had followed the
special session, without any physical solution of continuity, said special session, which is the
one next to said ad interim appointment has in fact and in law been adjourned. Hence, it is
admitted in the petition herein (par. 6[d]) that the aforementioned "suspension by the House"
of its session on January 22, to be resumed on January 24, 1966, at 10:00 a.m. "meant the
end of the special session."

It is next urged by petitioner that the clause "the next adjournment of the Congress" in the
above quoted provision of our fundamental law refers to an adjournment of Congress
assembled in regular session. I am unable to accept this view because:

1) To do so would entail a judicial legislation by the insertion of the word "regular" in

said provision. We can not even justify such act upon the ground of judicial
construction, for "where the language of a statute is plain and unambiguous" — as
the constitutional precept in question is — "there is no occasion for construction, and
the statute must be given effect according to its plain and obvious meaning,"2 and
"this is true even though other meanings of the language employed could be fraud."3

The editor of American Jurisprudence has expressed itself as follows:

x x x Where the language of a statute is plain and unambiguous and conveys

a clear and definite meaning, there is no occasion for resorting to the rules of
statutory construction, and the court has no right to look for or impose
another meaning.4

2) Neither can we adopt petitioner's theory without, in effect, amending the

Constitution, and violating its requirement therefor of "a vote of three-fourths (3/4) of
all the Members of the Senate and of the House of Representatives voting
separately" and a ratification by a majority of the votes cast at a plebiscite called for
the purpose.5 As the branch of the Government to which the task of being the last
bulwark of the Constitution has been assigned, we can not adopt the posture
advocated by the petitioner, entailing as it does an impairment of the basic tenets of
our political system, and the assumption of omnipotent powers which, admittedly, we
do not have.

3) Petitioner's theory is refuted by the fact — admitted by petitioner and his counsel
— that the adjournment of a special session of Congress may render ineffective
an ad interim appointment made prior thereto, if said appointment had been
preceded by a regular session of a new Congress. In fact, upon adjournment of the
regular session of Congress in 1965, ad interim appointments were made, some of
which, including those of several members of this Court, were renewed upon the
adjournment of each of the several special sessions called after said regular session.
 In other words, it is an established practice in this jurisdiction, confirmed no less than
by the party backing up petitioner herein, that ad interim appointments made before a
given special session of Congress, expire upon the adjournment thereof.

4) Petitioner's theory is further refuted by the fact that, if a special session is held
before the initial regular session of a new Congress, and the Commission on
Appointments is organized during said special session, its adjournment would
admittedly extinguish the effectivity of ad interim appointments made prior thereto,
provided, according to petitioner, that the Commission has had reasonable time
during that session to act on said appointments.

In this connection, it should be noted that, although Congress convenes in regular session
on the fourth Monday of January, it may by law fix another date for the beginning of said
session.6 Suppose that the date fixed by law therefor is, say, June 19 (Rizal's birthday); that
ad interim appointments have been made on January 2, following the assumption of office of
a new President, who calls four (4) special sessions, one after the other, each for thirty (30)
days, the first to begin on January 5; and that the Commission on Appointments is duly
organized on January 10. Shall we hold that, if the Commission does not act on said
appointments, the same shall be effective until the adjournment of the regular session of
Congress, which, in our hypothesis, would take place early in October? Indeed, there is no
plausible reason to distinguish between the adjournment of a regular session and that of a
special session, insofar as the effect thereof upon ad interim appointments is concerned.

The main argument adduced in support of petitioner's theory that the adjournment of the last
special session of Congress cannot affect the effectivity of his ad interim appointment, is that
the Commission on Appointments had not been organized during said special session and
that, even if then organized, the Commission would not have had enough time, during that
session, to consider the 1,717 ad interim appointments made after the last special session
held in 1965.

With respect to the last part of the argument, the Constitution does not make the extinctive
effect of the "next adjournment of the Congress" upon ad interim appointments made prior
thereto dependent on the sufficiency of the time available to the Commission on
Appointments. Thus, if the Commission on Appointments were not organized until, say, May
15, 1966, there could be no possible doubt that such ad interim appointments as may have
been made prior to the present regular session of Congress, no matter how many said
appointments may be, would lapse upon adjournment of Congress at about May 20, or five
(5) days later, even if this period of time were manifestly inadequate to permit a reasonable
consideration of said appointments.

Let us now consider the theory that the "next adjournment of the Congress" does not
extinguish the effectivity of ad interim appointments made prior thereto, unless the
Commission on Appointments has been organized before said adjournment. This theory is
contradicted by the admission of petitioner's counsel during the hearing of this case, that,
upon adjournment of a regular session of Congress, ad interim appointments made before
said session would lapse, even if the Commission on Appointments had not been organized
prior to said adjournment.

The aforementioned theory is, moreover, predicated upon false assumptions, namely: that
the "next adjournment of the Congress" should be construed in relation only to the
"disapproval of the Commission on Appointments," not to "the recess of the Congress"; that
"the next adjournment of the Congress" terminates the effectivity of ad interim appointments
because the Commission on Appointments cannot function when Congress is not in session;
and that Congress would be usurping the functions of the Commission on Appointments if
said appointments lapsed by the adjournment of Congress, although the Commission had
not as yet been constituted.

At the outset, it is well to remember that one of the fundamental tenets underlying our
constitutional system is the principle of separation of powers, pursuant to which the powers
of government are mainly divided into three classes,7 each of which is assigned to a given
branch of the service.8 The main characteristic of said principle is not, however, this
allocation of powers among said branches of the service,9 but the fact that: 1) each
department is independent of the others and supreme within its own sphere; and 2) the
power vested in one department cannot be given or delegated, either by the same or by Act
of Congress, to any other department. The reason is that, otherwise, instead of
being separated, said powers are likely to be concentrated - and hence united - in one (1)
department, 10 thereby seriously jeopardizing our republican system. Indeed, history has
shown that sovereignty cannot long remain in the people when the powers of Government
are in the hands of one man, for the latter is thus placed in a position, and would eventually
be inclined, to change his role, from that of a public servant to that of master of the people.

The separation of powers in our Government is not, however, absolute. Not all legislative
powers are vested in Congress. Some, like the veto power and the power to make rules of
Court, are explicitly vested in the President and the Supreme Court, respectively. 11 Similarly,
not all executive powers are vested in the President. Some, like the treaty-making power, are
shared by him with the legislative department. 12 Not all judicial powers are vested in courts
of justice. Some — like the pardoning power — are lodged exclusively in the President. 13

As a consequence, there is some overlapping of powers and a system of checks and

balances, under which a department may exercise some measure of restraint, upon
another department. Such is the situation as regards appointing power of the Executive,
which is subject to said restraint by the legislative department. 14 Indeed, the latter may limit
said executive power by, inter alia, prescribing the qualifications of the appointees, fixing
their term of office, or disapproving appointments to some offices.

With respect to the approval or disapproval of appointments, the framers of our Constitution
considered it, however, impractical to entrust the exercise of the power to the whole National
Assembly or Congress. Considering its sizeable membership, it was deemed wiser to vest
the power of confirmation or rejection of appointments upon a body, small enough to permit
reasonable expeditious action, when necessary, but sufficiently representative to reflect
substantially the views of the legislature. Hence, the Commission on Appointments, which,
under the present Constitution, consists of "twelve Senators and twelve Members of the
House of Representatives elected by each House, respectively, on basis of proportional
representation of the political parties therein." 15 Although, in the discharge of their duties, the
Members of the Commission are not under the control of Congress, it is only obvious, from
the composition of the Commission — particularly the equal representation therein of each
House of Congress and the manner of selection of the Members of the Commission — that
the same was expected to reflect the feelings of Congress on presidential appointments, and
this expectation has, invariably, been borne out by the facts. In other words, the Commission
was intended to be, and is an agent of Congress, or the means by which Congress may
check the appointing power of the President.

More specifically, appointments made by the President are subject to two (2) forms of
legislative restraint, namely: a) disapproval of the Commission on Appointments; and b)
termination of the effectivity of ad interim appointments upon "the next adjournment of the
Congress."

As regards the first form of restraint, the Constitution provides that regular appointments to
specified offices shall be made only after consent thereto has been given by the Commission
on Appointments, to which the President must have first submitted the corresponding
nominations. 16 Inasmuch as the Commission can act only while Congress is in session, 17 no
appointments could be made during a recess of Congress for lack of said consent, if the
provision above quoted had not been inserted in the fundamental law. Pursuant thereto,
which Congress is not in session, a nomination need not be made. Neither is the previous
consent of the Commission on Appointments necessary, for, being impotent to act at such
time, said consent cannot possibly be given. In order to avoid a hiatus in the public service
— to forestall a suspension in the exercise of governmental functions — the President may
"make appointments during the recess of the Congress, but such appointments shall be
effective only until disapproval by the Commission on Appointments or until the next
adjournment of the Congress."

Now, why is the lifetime of ad interim appointments limited? Because, if they

expired before the session of Congress, the evil sought to be avoided — interruption in the
discharge of essential functions — may take place. Because the same evil would result if the
appointments ceased to be effective during the session of Congress and before its
adjournment. 18 Upon the other hand, once Congress has adjourned, the evil aforementioned
may easily be conjured by the issuance of other ad interim appointments or reappointments.

In short, an ad interim appointment ceases to be effective upon disapproval by the

Commission, because the incumbent can not continue holding office over the positive
objection of the Commission. It ceases, also, upon the next adjournment of the Congress,"
simply because the President may then issue new appointments — not because of
implied disapproval of the Commission deduce from its inaction during the session of
Congress, for, under the Constitution, the Commission may affect adversely the ad
interim appointments only by action, never by omission. If the adjournment of Congress were
an implied disapproval of ad interim appointments made prior thereto, then the President
could no longer appoint those so bypassed by the Commission. But, the fact is that the
President may reappoint them, thus clearly indicating that the reason for said termination of
the ad interim appointments is not the disapproval thereof allegedly inferred from said
omission of the Commission, but, the circumstance that, upon said adjournment of the
Congress, the President is free to make ad interim appointments or reappointments.

It is thus patent that the adjournment of Congress operates differently from the disapproval
by the Commission; that the effect of the former is predicated upon a premise other than that
of the latter; and that the opinion of the majority of the Court in the case at bar, not only does
not lead to an encroachment by Congress upon the field assigned to the Commission on
Appointments, but is, moreover, in consonance with the latter and the spirit of the
fundamental law.

In fact, the first draft of our Constitution provided that ad interim appointments shall "become
ineffective after a period of three months or upon disapproval" by a Permanent Commission,
which was to perform the functions of the Commission on Appointments. In other words, it
subjected the effectivity of said appointments to (1) a period (three months) and (2) a
condition (disapproval by the Permanent Commission). It is worthy of notice, in this
connection, that the operation of said period was not conditioned upon the organization of
the Permanent Commission. The provision incorporated into the original
Constitution 19 adopted, in principle, the same limitations: a period and a condition. In lieu of
the "Permanent Commission", it used the phrase "Commission on Appointments", and
instead of the three-month term in the draft, it, merely, inserted the clause "until the next
adjournment of the National Assembly". Upon the amendment of our Constitution, by the
establishment of a bicameral legislature, the term "Congress" was substituted in lieu of the
"National Assembly". The philosophy of the original draft was thereby preserved — the
effectivity of ad interim appointments is subject to a condition (disapproval by the
Commission on Appointments) and a period (the next adjournment of the Congress,
regardless of whether the Commission on Appointments was been organized or not).

A portion of my concurring and dissenting opinion in Aytona vs. Castillo (L-19313, Jan. 19,
1962) has been quoted in support of petitioner herein. Detached from the context thereof, the
quotation seemingly gives an impression altogether at variance with the obvious import of
said opinion. The Aytona case did not involve the legal issue posed in this case — the effect
of the adjournment of a special session of Congress upon ad interim appointments made
prior thereto. The question raised in the Aytona case was whether an incoming President
could, before Congress had met in regular or special session, validly withdraw ad
interim appointments made by the outgoing President, in order that the Commission on
Appointments could not act, even if it wanted to, on said appointments. In the regular session
of Congress following said withdrawal of ad interim appointments, the Commission on
Appointments was actually organized. What is more, the Commission did, in fact, approve or
confirm some of the aforementioned ad interim appointments. The Aytona case was decided
even before the next session of Congress had begun. An incident thereof 20 was decided
before the adjournment of said session. There was no occasion, therefore, to pass upon the
effect of said adjournment. In the case at bar, the ad interim appointments made by the
outgoing President were not withdrawn by the incoming President before the special session
of Congress; the Commission on Appointments was not organized during said special
session; and the President merely considered said appointments 21 ineffective upon the
adjournment of the aforementioned special session, as well as withdrawn.

True, there are a number of things in common between the Aytona case and the one at bar;
in both cases the outgoing President had made hundreds of ad interim appointments
knowing that he had lost his bid for reelection; in both cases equity is, admittedly, against the
action taken by the outgoing President and in favor of that taken by the incoming President;
in both cases the judicial verdict has been in favor of the latter. But, then, there are the
following points of difference: (1) the right of the incoming President to withdraw said
appointments in the Aytona case was defended by those who deny the existence of such
right in the present case; (2) those who invoked equity in favor of the measure taken by the
incoming President in the Aytona case, now object to the application of the rules of equity in
favor of the action taken by the incoming President in the case at bar; (3) the only legal
ground, in support of our decision in the Aytona case was a principle of equity in the writs of
prohibition and mandamus sought by Aytona depended upon the sound discretion of the
Court to be exercised on equitable principles, because of which the writs were denied —
whereas, in addition to equity, there is a clear and explicit provision of the Constitution in
support of the step taken by the incoming President in the present case; (4) those who urged
the condition of said decision in the Aytona case, backed by no other principles than those of
equity, and hailed it as an act of justice, now maintains that said principles, plus said
constitutional provision, are insufficient to warrant a similar decision in the present case.

It is trite to say that the interest of the appointees involved therein cannot but be the object of
grave concern. But, the Courts must apply the law as they find it, not as they wish it to be.
Moreover, the power to make ad interim appointments and the lifetime thereof are dictated
by considerations of public policy — the neccessity of insuring continuity in the discharge of
the sovereign functions of the State. The protection of the interest of the appointees
is subordinate to such policy and merely incidental thereto. Under our constitutional set up,
the President is the principal administrative officer of the Government. As such, he is the
officer mainly responsible for the faithful execution of the laws and the maintenance of law
and order in the Philippines. Consistently with this responsibility, he has authority to appoint
those who shall assist him in the discharge of his difficult task. He may exercise such
authority, even if his term is about to expire, but, only to avoid a disruption in the operation of
the Government. And his appointees — particularly those whose appointments have been
confirmed by the Commission on Appointments — shall be entitled to remain in office, even
after the expiration of his term. But, the recipients of his ad interim appointments are
forwarned that the same are subject to the resolutory condition and the period adverted to
above. They know that, unless approved by the Commission prior thereto, the appointments
cease to be effective upon the expiration of said period. They know that the incoming
Executive may then either re-appoint those whose ad interim appointments had lapsed or
appoint others whom he may deem fit to carry out the policies of his administration. In the
exercise of this authority, his functions are mainly political, and, hence, not subject to judicial
review.

Wherefore, I vote to dismiss the petition and concur in the majority opinion, penned by Mr.
Justice Felix Bautista Angelo.

DIZON, J., concurring:

I concur. However, aside from the reasons given in support of the majority opinion penned by
Mr. Justice Felix Bautista Angelo, I am of the opinion that the ad interim appointments
extended to petitioner Guevara must be deemed to have lapsed for the reasons given in
support of the concurring opinion penned by former Justice Sabino Padilla in the Aytona
case — with which I concur.

Footnotes

CONCEPCION, J., concurring:

1The Constitutional provision that the commission shall expire at the end of the next
session is self-executing, and when the session expires the right to hold under the
commission expires with it. If there be no appreciable point of time between the end
of one session and the beginning of another, since of necessity one ends and
another begins, the tenure under the commission is absolutely terminated as if
months of recess supervened. Hind's Precedents of the House of Representatives,
see pp. 859-861 and 862-864, Vol- 5.

2 82 C.J.S. 577.

Hattemer v. State Tax Commission, 177 So. 156, 235 Ala. 44; City of Birmingham v.
3

Southern Express Co., 51 So. 159, Ala. 529; Hartford Accident & Indemnity Co. v.
W.S. Dickey Clay Mfg. Co., 24 A. 2d 315, 26 Del. Ch. 411; State ex rel, Grodin v.
Barnes, 161 So. 568, 573, 119 Fla. 405; Home Owners' Loan Corporation v. District
Court of Woodbury Country, 272 N.W. 416, 223 Iowa 269; 82 C.J.S. 582.

4 50 Am. Jur. 205-206.

5 Art. XV, Const. of the Phil.

6 Art. VI, Sec. 9, Const. of the Phil.

7 The legislative, the executive and the judicial.

The legislative to Congress, the executive to the President, and the judicial to the
8

Supreme Court and such inferior courts as may be established by law.

9 For there may be allocation or division of powers without separation of powers.

10 In all likelihood in the Executive, who has the armed forces under his command.

11 Art. VI, Sec. 20(2) (3), and Art. VIII, Sec. 13, Const. of the Phil.

12 Or the Senate, as regards treaties, Art. VI, Sec. 10(7), Const. of the Phil.

13 Art. VII, Sec. 10(6), Const. of the Phil.

14The Constitution has provided for an elaborate system of checks and balances to
secure coordination in the workings of the various departments of the government.
For example, the Chief Executive under our Constitution is so far made a check on
the legislative power that this assessment is required in the enactment of laws. This,
however, is subject to the further check that a bill may become a law notwithstanding
the refusal of the President to approve it, by a vote of two-thirds or three-fourths, as
the case may be, of the National Assembly. The President has also the right to
convene the Assembly in special session whenever he chooses. On the other hand,
the National Assembly operates as a check on the Executive in the sense that its
consent through its Commission on Appointments is necessary in the appointment of
certain officers; and the concurrence of a majority of all its members is essential to
the conclusion of treaties. . . . . " (Angara vs. Electoral Commission, 63 Phil. 130.)

The Congress of the Philippines operates as a check on the other

departments through the exercise of powers expressly or impliedly conferred
upon it. This, while the power to appoint executive officers is essentially an
executive function, presidential nominations to said offices is subject to
confirmation by the Commission on Appointments, composed of some
members of both houses of Congress. (Francisco, Philippine Political Law,
1955 ed., p. 149.)

Congress may check the President through its Commission on

Appointments, by rejecting appointments made by the President. (Martin,
Philippine Political Law, 1964 Rev. Ed., p. 70.)

The President, in addition to the general grant of executive power, was also
expressly conferred the veto power which is essentially legislative in nature;
and the Commission on Appointments, a legislative agency, was given the
specific power to participate in the essentially executive power of
appointment by confirming or rejecting presidential appointments. (Tañada &
Carreon, Pol. Law of the Phil., Vol. 1, pp. 182-183, 206-207.)

15 Art. VI, Sec. 12, Const. of the Phil.

16 Art. VII, Sec. 10(3), Const. of the Phil.

17 Art. VI, Sec. 13, Const. of the Phil.

During such session there must first be a nomination, and only after the
18

Commission has consented thereto may the President issue the corresponding
appointment.

19 Under which the legislative power was vested in a unicameral National Assembly.

The intervention of Perfecto Querubin, Resolution of March 30, 1962. See, also,
20

Cunanan vs. Tan, L-19721, May 10, 1962.

21
Including those made by him before said special session.
G.R. No. L-17888 October 29, 1968

RESINS, INCORPORATED, petitioner,

vs.
AUDITOR GENERAL OF THE PHILIPPINES and THE CENTRAL BANK OF THE
PHILIPPINES, respondents.

Lichauco Picazo & Agcaoili for petitioner.

Assistant Solicitor General Jose P. Alejandro, Solicitor Jorge R. Coquia and Central Bank
Legal Counsel for respondents.

FERNANDO, J.:

Petitioner here, as did petitioner in Casco Philippine Chemical Co., Inc. v. Gimenez,1 would
seek a refund2 from respondent Central Bank on the claim that it was exempt from the
margin fee under Republic Act No. 2609 for the importation of urea and formaldehyde, as
separate units, used for the production of synthetic glue of which it was a manufacturer.
Since the specific language of the Act speak of "urea formaldehyde,"3 and petitioner
admittedly did import urea and formaldehyde separately, its plea could be granted only if we
could construe the above provision of law to read "urea and formaldehyde." In the
above Casco decision, we could not see our way clear to doing so. We still cannot see it that
way. Hence, this petition must fail.

Our inability to indulge petitioner in the aforecited Casco petition was made clear by the
present Chief Justice. Thus: "Hence, 'urea formaldehyde' is clearly a finished product, which
is patently distinct and different from 'urea' and 'formaldehyde', as separate articles used in
the manufacture of the synthetic resins known as 'urea formaldehyde'. Petitioner contends,
however, that the bill approved in Congress contained the copulative conjunction 'and'
between the terms 'urea' and 'formaldehyde', and that the members of Congress intended to
exempt 'urea' and 'formaldehyde' separately as essential elements in the manufacture of the
synthetic resin glue called 'urea. fomaldehyde' not the latter as a finished product, citing in
support of this view the statements made on the floor of the Senate, during the consideration
of the bill before said House, by members thereof. But, said individual statements do not
necessarily reflect the view of the Senate. Much less do they indicate the intent of the House
of Representatives ... Furthermore, it is well settled that the enrolled bill — which uses the
term 'urea formaldehyde' instead of 'urea and formaldehyde' — is conclusive upon the courts
as regards the tenor of the measure passed by Congress and approved by the President ... If
there has been any mistake in the printing of the bill before it was certified by the officers of
Congress and approved by the Executive — on which we cannot speculate, without
jeopardizing the principle of separation of powers and undermining one of the cornerstones
of our democratic system — the remedy is by amendment or curative legislation, not by
judicial decree."

To which we can only add that deference to the scope and implication of the function
entrusted by the Constitution to the judiciary leaves us no other alternative. For nothing is
better settled than that the first and fundamental duty of courts is to apply the law as they find
it, not as they would like it to be. Fidelity to such a task precludes construction or
interpretation, unless application is impossible or inadequate without it.4 Such is not the case
in the situation presented here. So we have held in Casco Philippine Chemical Co., Inc. v.
Gimenez. We do so again.
Then, again, there is merit in the contention of the Solicitor General, as counsel for
respondent Central Bank, and the Auditor General, that as a refund undoubtedly partakes of
a nature of an exemption, it cannot be allowed unless granted in the most explicit and
categorical language. As was held by us in Commissioner of Internal Revenue vs.
Guerrero:5 "From 1906, in Catholic Church vs. Hastings to 1966, in Esso Standard Eastern,
Inc. vs. Acting Commissioner of Customs, it has been the constant and uniform holding that
exemption from taxation is not favored and is never presumed, so that if granted it must be
strictly construed against the taxpayer. Affirmatively put, the law frowns on exemption from
taxation, hence, an exempting provision should be construed strictissimi juris." Certainly,
whatever may be said of the statutory language found in Republic Act 2609, it would be
going too far to assert that there was such a clear and manifest intention of legislative will as
to compel such a refund.

One last matter. Petitioner would assail as devoid of support in law the action taken by the
respondent Auditor General in an indorsement to the respondent Central Bank 6 causing it to
overrule its previous resolution and to adopt the view in such indorsement to the effect that
the importation of urea and of formaldehyde, as separate units, did not come within the
purview of the statutory language that granted such exemption. It does not admit of doubt
that the respondent Auditor General's interpretation amounts to a literal adherence to the
statute as enacted. As such, it cannot be said to be contrary to law. As a matter of fact, it is
any other view, as is evident from the above, that is susceptible to well-founded criticism, as
lacking legal basis. Under the circumstances, the respondent Auditor General was merely
complying with his duty in thus calling the attention of respondent Central Bank.

The limit of his constitutional function was clearly set forth in Guevara v. Gimenez,7 the
opinion being rendered by the present Chief Justice. Thus: "Under our Constitution, the
authority of the Auditor General, in connection with expenditures of the Government is limited
to the auditing of expenditures of funds or property pertaining to, or held in trust by, the
Government or the provinces or municipalities thereof (Article XI, section 2, of the
Constitution). Such function is limited to a determination of whether there is a law
appropriating funds for a given purpose; whether a contract, made by the property officer,
has been entered into in comformity with said appropriation law; whether the goods or
services covered by said contract have been delivered or rendered in pursuance of the
provisions thereof, as attested to by the proper officer; and whether payment therefor has
been authorized by the officials of the corresponding department or bureau. If these
requirements have been fulfilled, it is the ministerial duty of the Auditor General to approve
and pass in audit the voucher and treasury warrant for said payment. He has no discretion or
authority to disapprove said payment upon the ground that the aforementioned contract was
unwise or that the amount stipulated therein is unreasonable. If he entertains such belief, he
may do no more than discharge the duty imposed upon him by the Constitution (Article XI,
section 2), 'to bring to the attention of the proper administrative officer expenditures of funds
or property which, in his opinion, are irregular, unnecessary, excessive or extravagant.' This
duty implies a negation of the power to refuse and disapprove payment of such
expenditures, for its disapproval, if he had authority therefor, would bring to the attention of
the aforementioned administrative officer the reasons for the adverse action thus taken by
the General Auditing office, and, hence, render the imposition of said duty unnecessary."

In the same way that the Auditor General, by virtue of the above function, which is intended
to implement the constitutional mandate that no money can be paid out of the treasury
except in the pursuance of appropriation made by law,8 must carefully see to it that there is in
fact such statutory enactment, no refund, which likewise represents a diminution of public
funds in the treasury, should be allowed unless the law clearly so provides. The Auditor
General would be sadly remiss in the discharge of his responsibility under the Constitution if,
having the statute before him, he allows such a refund when, under the terms thereof, it
cannot be done. His actuation here cannot be stigmatized as violative of any legal precept;
as a matter of fact, it is precisely in accordance with the constitutional mandate.

WHEREFORE, this petition is denied, with costs against petitioner.

Concepcion, C.J., Reyes, J.B.L., Dizon, Makalintal, Sanchez, Castro, Angeles and
Capistrano, JJ., concur.
Zaldivar, J., is on leave.

Footnotes

1 L-17931, February 28, 1963.

2 According to the Prayer in the Brief for Petitioner dated March 27, 1961, it had
deposited with respondent Central Bank the amount of P52,271.09, exclusive of
further sums filed by it since the date of the filing of this petition, representing the
margin fee deposited by it on its various importation of urea and formaldehyde as
separate articles.

3 Section 2, par. XVIII, Republic Act No. 2609.

4People v. Mapa, L-22301, August 30, 1967; Pacific Oxygen & Acetylene Co. v.
Central Bank, L-21881, March 1, 1968; Dequito v. Lopez, L-27757, March 28, 1968;
and Padilla v. City of Pasay, L-24039, June 29, 1968.

5 L-20942, September 22, 1967.

6 3rd Indorsement dated July 13, 1960.

7L-17115, Nov. 30, 1962. Cf. Radiowealth, Inc. v. Agregado, 86 Phil. 429 (1950);
Phil. Operations, Inc. v. Auditor General, 94 Phil. 868 (1954); Villegas v. Auditor
General, L-21352, Nov. 29, 1966. The rather broad language in Matute v.
Hernandez, 66 Phil. 68 (1938) has thus been qualified.

8 Par. 2, Section 23, Article VI, Constitution of the Philippines.

G.R. No. L-15819 October 27, 1920

CARLOS PALANCA, plaintiff-appelle,

vs.
THE CITY OF MANILA and WENCESLAO TRINIDAD, defendants-appellants.

City Fiscal Diaz for appellants.

Cohn & Fisher for appellee.

This is an appeal from an amended decision of the Court of First Instance of the city of
Manila, the Honorable Simplicio del Rosario presiding, requiring the defendant City to pay to
the plaintiff the sum of P2,400 with legal interest thereon from the respective dates on which
the several payments composing the amount were made, without costs. It is one of those
exceptional cases in which the facts are agreed upon the law is certain, and in which there is
merely needed, in our judgment, the application of the law to the facts to decide the issue.
We propose to set out in order the facts, the law, the issue, and the opinion.

F A C T S.

Omitting the formal paragraphs 1 and 8 of the stipulation, the facts are:

2. That at all times between the 1st day of July, 1914, to and including the 30th day
of June, 1916, plaintiff herein has been engaged in the business of distilling
spirituous liquors in the city of Manila, Philippine Islands, and has been, during all of
said period of time, the lawful holder of the distiller's license required by the laws of
the Philippine Islands then in force for the operation and conduct of said business,
and that he has paid the taxes imposed upon holders of such licenses.

3. That the premises in which plaintiff conducted his said business of wholesale
liquor distiller under said license during the said period of time are located at No.
1925 Calle Anloague, Manila, Philippine Islands.

4. That between the 1st day of June, 1914, and the 30th day of June, 1916, both
dates inclusive, plaintiff maintained a store at Nos. 538-540 Calle Pinpin, in the city of
Manila, Philippine Islands, for the sale at wholesale of distilled liquors, as hereinafter
specified; which said store is not adjacent to plaintiff's said distillery, but is entirely
separate and distinct therefrom.

5. That the said store at Nos. 538-540 Calle Pinpin was operated and maintained by
plaintiff soley and exclusively for the sale at wholesale of liquors distilled by him at
his said licensed distillery at No. 1925 Calle Anloague; and that at no time has
plaintiff sold or offered for sale, or stored or kept for sale at said store Nos. 538-540
Calle Pinpin any liquors other than those distilled by him at his said distillery; that
during the period of time to which this stipulation relates no sales of the products of
plaintiff's distillery were made at the distillery, but the sales of the entire product of
said distillery were made at the said store at Calle Pinpin, Nos. 538-540.

6. That the defendant, the city of Manila, through the city assessor and collector,
made demand upon plaintiff that he take out a wholesale liquor dealer's license and
pay therefor at the rate of P1,200 a year, as a condition to allowing plaintiff to operate
and maintain his said store at Nos. 538-540 Calle Pinpin and sell therein at
wholesale the liquors distilled by him pursuant to his said distiller's license; and
 plaintiff, therefore, under protest, took out the license required of him with respect to
said store.
1aw ph!l.net

7. That thereafter, the plaintiff paid to the city assessor and collector of the city of
Manila, acting for and on behalf of the defendant, city of Manila, and on account of
the wholesale liquor dealer's license mentioned in paragraph 6 of this stipulation, the
sum of P300 for each of the third and fourth quarters of the year 1914, a like sum for
each of the quarters of the year 1915, and a like sum for each of the first and second
quarters of the year 1916, making a total of payments made during said period of the
sum of P2,400; that at the time of making the said payments, the plaintiff duly
protested the same in writing; that said protests were overruled and denied, and no
part of the money so paid under protest has been refunded to plaintiff.

L A W.

It will be noted that the protested payments cover the period between July 1, 1914 and June
30, 1916. The law then in force regulating the sale of intoxicating liquors within the city of
Manila was the Manila Liquor License Act No. 59, as amended by Act No. 95. Section 16
and 17 thereof, the latter as superseded by Act No. 95, provided:

Sec. 16. Licenses for periods of one year may be issued to any person or persons of
good character, authorizing him or them to conduct the business of a distiller of
alcoholic liquors and to sell, give away or otherwise dispose of the products of such
distillery, in quantities of one gallon (three and seventy-eight one-hundredths litres)
or more, upon payment in advance of the sum of six hundred pesos. A license of this
class shall be known as a "distiller's license," and it shall be unlawful for any person
or persons to conduct any distillery for the manufacture of alcoholic liquors without
such license, or, having secured such license, to sell, give away or otherwise dispose
of the products of such distillery except as herein prescribed.

Sec. 17. Licenses for periods of one year may be issued to any person or persons of
good character, authorizing him or them to keep in stock and sell or give away
fermented malt, vinous and spirituous liquors in quantities of one gallon (three and
seventy-eight one-hundredths litres) or more, upon payment in advance of the sum
of twelve hundred pesos; but such licenses may be paid in advance in four quarterly
installments of three hundred pesos each, at the election of the licensee. A license of
this class shall be known as a "First Class Wholesale Liquor License," and it shall be
unlawful for any person or persons to sell or otherwise dispose of fermented malt,
vinous and spirituous liquors at wholesale without such license, or having obtained
such license, to sell or otherwise dispose of such liquors except as herein prescribed,
but nothing herein shall be construed as prohibiting any person or persons holding a
"Brewer's License" or "Distiller's License" from disposing of the products of such
brewery or distillery.

I S S U E.

The sole question presented by the appeal is whether plaintiff, by taking out and paying for
his license as a distiller, was entitled to sell the products of his distillery in a store separate
and distinct therefrom without the necessity of taking out and paying for an additional license
as a wholesale liquor dealer.

O P I N I O N.
Although the city fiscal advances numerous canons of statutory construction which are not
debatable in support of his plea for a revocation, we yet reiterate what we said in the
beginning of this decision, that there is merely needed the application of the law to the facts
to decide the issue. Statues which are plain and specific should be applied without attempted
construction and interpretation. (Lizarraga Hermanos vs. Yap Tico [1913], 24 Phil., 504;
Philippine Railway Co. vs. Nolting [1916], 34 Phil., 401; U.S. vs. Fisher [1804], 3 Cranch,
358.)

Concentrating our attention, therefore, on the specific legal provisions, it is first noted that
according to section 16 of the Manila Liquor License Act, the license to be granted to
distillers not only authorizes the licensee "to conduct the business of a distiller of alcoholic
liquors" but also "to sell, give away or otherwise dispose of the products of such distillery, in
quantities of one gallon or more." The legislative intention is reinforced by the succeeding
section of the same Act as amended, which provides that persons desiring to engage in
business as wholesale liquor dealers shall obtain the wholesale liquor dealer's license, with
the proviso that "nothing herein shall be construed as prohibiting any person or persons
holding a 'brewer's license' or 'distiller's license' from disposing of the products of such
brewery or distillery." No provision of the Act limits the place of sale or disposition of the
products of the licensed distiller to the distillery proper. To read into the law the words "at the
place of production" would be doing violence to its phraseology and would be invading the
legislative sphere.

Legislative intention is most eloquently demonstrated by a comparison of the law as it

existed in 1914 to 1916 and as it now exists. The Administrative Code of 1916 in its sections
2502 and 2503 and the Administrative Code of 1917 in its sections 2530 and 2531, continue
the identical language of Act No. 59 as amended by Act No. 95, but with the careful insertion
of the phrases "in the distillery" and "at the place of production." Since the enactment of the
Administrative Code of 1916, there can be no doubt that a distiller disposing of the products
of his distillery at an establishment separate and distinct from the distillery itself must obtain
a wholesale liquor dealer's license. And the fact that the Legislature found it necessary, in
order to effect that purpose, to modify the terms of the original statute when reenacting it as
a part of the Administrative Code, by the insertion of the words "at the place of production,"
shows that prior to the introduction of that amendment the statute had a different meaning. It
is an express recognition on the part of the legislative branch of the government that without
the use of such words of limitation the license to the distiller would permit him to sell the
products of the distillery at places other than "the place of production."

Among the numerous points made by the city fiscal to support his case, is one intended to
show that the Manila Liquor License Act was taken from the State of Ohio; that this is shown
by the fact that the bill was presented in the Philippine Commission by its President Mr. Taft;
That years before, Mr. Taft had taken part as counsel in a case before the Supreme Court of
Ohio, the result of which bears out the contention of the city fiscal; and that, accordingly, the
statute adopted from Ohio carried with it the construction there given to it. We agree that
both pursuant to the Philippine Code of Civil Procedure (secs. 275, 313, as amended by Act
No. 2210, sec. 1) and the rules of statutory construction, the courts could avail themselves of
the actual proceedings of the legislative body to assist in determining the construction of a
statute of doubtful import. (U.S. vs. Pons [1916], 34 Phil., 729; 25 R.C.L., pp. 1039, 1040.)
But waiving for the moment the observation before made, to the effect that the true meaning
of the language used in the statute is not at all obscure, the proceedings in the Philippine
Commission prove in this instance to be of little assistance. The public session minutes of
the Philippine Commission, as quoted in the brief of the fiscal, simply showed in a general
way the power of the Commission to enact legislation of this character.
As to the case cited by counsel, in which Mr. Taft was an attorney (Senior vs. Ratterman
[1887], 44 Ohio St., 661), the principal holding there was that wholesale liquor dealers not
manufacturers are within the terms of the Act of the General Assembly passed May 14,
1986, and are liable to the tax therein imposed. A later decision of much more importance,
which the fiscal overlooked, coming from the same court, is Brewing Co. vs. Talbot ([1898],
59 Ohio, St., 511). In the course of the decision, it was said: "As the statute formerly stood
manufacturers were exempt from the tax without regard to the place or places where they
sold their products. But since the amendment of March 21, 1887 (84 O.L., 224) they are so
exempt only when they confine their business to selling at the manufactory. By that
amendment the words 'at the manufactory' were inserted as they now appear in sections
4364-16, above quoted, and they are so far restrictive of the class of exemptions from the tax
as they existed prior to the amendment, that thereafter manufacturers who should engage in
the business of selling their liquors elsewhere than at the manufactory, become liable to the
tax like other dealers. If that was not the purpose and effect of the amendment it had non
whatever." If then the fiscal's rather far-fetched assumptions predicated on the statues of
Ohio show anything, it is that in Ohio, like in the Philippines, legislative amendment was
required before liquor manufactures became liable to the tax imposed on other dealers.

We hold that under the law in force during the period to which this litigation relates, the
plaintiff under his distiller's license could not be required to take out an additional license as
a wholesale liquor dealer for the sale of the products of his distillery.

Two minor points quire brief consideration before we bring this decision to a close. The
judgment of the trial court permitted the plaintiff to recover the amount of the license fee paid
under protest with interest. This was correct for a number of reasons. In the first place, the
Manila Liquor License Act, both as previously existing and as now existing, is a part of the
Manila Charter; so that under no condition would section 1579 of the Administrative Code of
1917 permitting actions for the recovery of internal revenue taxes illegally collected "without
interest," be applicable. And in the second place, this action concerns taxes collected before
the enactment of said section 1579 (Hongkong & Shanghai Banking Corporation vs. Rafferty
[1918], 39 Phil., 145)

On the insistence of the fiscal, the trial court was persuaded to amend the judgment
rendered by eliminating therefrom the payment of costs by the defendant to the plaintiff. In so
doing the attorney led the court to commit an error which, unfortunately, cannot now be
righted, since the plaintiff did not appeal, by misinterpreting the language of our decision in
Hongkong & Shanghai Banking Corporation vs. Rafferty, supra. The ruling in that case was
that no costs shall be allowed against the Government of the Philippine Islands where the
Government is the unsuccessful party. There is, however, a marked difference between
sovereignties, such as the United States, and States, and governments such as exist in
Porto Rico and the Philippine Islands, and public corporations which sue and can be sued. It
is admitted herein that the defendant is the City of Manila. Consequently, the general rule
that costs are imposed upon the unsuccessful party applies in municipal corporation cases.
Plaintiff has the right to his costs in this instance.

Judgment is affirmed, with costs against the appellants. So ordered.

G.R. No. L-2348 February 27, 1950

GREGORIO PERFECTO, plaintiff-appellee,

vs.
BIBIANO MEER, Collector of Internal Revenue, defendant-appellant.

First Assistant Solicitor General Roberto A. Gianzon and Solicitor Francisco Carreon for
oppositor and appellant.
Gregorio Perfecto in his own behalf.

BENGZON, J.:

In April, 1947 the Collector of Internal Revenue required Mr. Justice Gregorio Perfecto to pay
income tax upon his salary as member of this Court during the year 1946. After paying the
amount (P802), he instituted this action in the Manila Court of First Instance contending that
the assessment was illegal, his salary not being taxable for the reason that imposition of
taxes thereon would reduce it in violation of the Constitution.

The Manila judge upheld his contention, and required the refund of the amount collected.
The defendant appealed.

The death of Mr. Justice Perfecto has freed us from the embarrassment of passing upon the
claim of a colleague. Still, as the outcome indirectly affects all the members of the Court,
consideration of the matter is not without its vexing feature. Yet adjudication may not be
declined, because (a) we are not legally disqualified; (b) jurisdiction may not be renounced,
ad it is the defendant who appeals to this Court, and there is no other tribunal to which the
controversy may be referred; (c) supreme courts in the United States have decided similar
disputes relating to themselves; (d) the question touches all the members of the judiciary
from top to bottom; and (e) the issue involves the right of other constitutional officers whose
compensation is equally protected by the Constitution, for instance, the President, the
Auditor-General and the members of the Commission on Elections. Anyway the subject has
been thoroughly discussed in many American lawsuits and opinions, and we shall hardly do
nothing more than to borrow therefrom and to compare their conclusions to local conditions.
There shall be little occasion to formulate new propositions, for the situation is not
unprecedented.

Our Constitution provides in its Article VIII, section 9, that the members of the Supreme
Court and all judges of inferior courts "shall receive such compensation as may be fixed by
law, which shall not be diminished during their continuance in office." It also provides that
"until Congress shall provide otherwise, the Chief Justice of the Supreme Court shall receive
an annual compensation of sixteen thousand pesos". When in 1945 Mr. Justice Perfecto
assumed office, Congress had not "provided otherwise", by fixing a different salary for
associate justices. He received salary at the rate provided by the Constitution, i.e., fifteen
thousand pesos a year.

Now, does the imposition of an income tax upon this salary in 1946 amount to a diminution
thereof?.
A note found at page 534 of volume 11 of the American Law Reports answers the question
in the affirmative. It says:

Where the Constitution of a state provides that the salaries of its judicial officers shall
not be dismissed during their continuance in office, it had been held that the state
legislature cannot impose a tax upon the compensation paid to the judges of its
court. New Orleans v. Lea (1859) 14 La. Ann. 194; Opinion of Attorney-General if N.
C. (1856) 48 N. C. (3 Jones, L.) Appx. 1; Re Taxation of Salaries of Judges (1902)
131 N. C. 692, 42 S. E. 970; Com. ex. rel. Hepburn v. Mann (1843) 5 Watts & S,.
(Pa.) 403 [but see to the contrary the earlier and much criticized case of
Northumberland county v. Chapman (1829) 2 Rawle (Pa.) 73]*

A different rule prevails in Wisconsin, according to the same annotation. Another state
holding the contrary view is Missouri.

The Constitution of the United States, likes ours, forbids the diminution of the compensation
of Judges of the Supreme Court and of inferior courts. The Federal Governments has an
income tax law. Does it embrace the salaries of federal judges? In answering this question,
we should consider four periods:

First period. No attempts was made to tax the compensation of Federal judges up to 1862 1.

Second period. 1862-1918. In July, 1862, a statute was passed subjecting the salaries of
"civil officers of the United States" to an income tax of three per cent. Revenue officers,
construed it as including the compensation of all judges; but Chief Justice Taney, speaking
for the judiciary, wrote to the Secretary of the Treasury a letter of protest saying, among
other things:

The act in question, as you interpret it, diminishes the compensation of every judge 3
per cent, and if it can be diminished to that extent by the name of a tax, it may, in the
same way, be reduced from time to time, at the pleasure of the legislature.

The judiciary is one of the three great departments of the government, created and
established by the Constitution. Its duties and powers are specifically set forth, and
are of a character that requires it to be perfectly independent of the two other
departments, and in order to place it beyond the reach and above even the suspicion
of any such influence, the power to reduce their compensation is expressly withheld
from Congress, and excepted from their powers of legislation.

Language could not be more plain than that used in the Constitution. It is, moreover,
one of its most important and essential provisions. For the articles which limits the
powers of the legislative and executive branches of the government, and those which
provide safeguards for the protection of the citizen in his person and property, would
be of little value without a judiciary to uphold and maintain them, which was free from
every influence, direct and indirect, that might by possibility in times of political
excitement warp their judgments.

Upon these grounds I regard an act of Congress retaining in the Treasury a portion
of the Compensation of the judges, as unconstitutional and void2.

The protest was unheeded, although it apparently bore the approval of the whole Supreme
Court, that ordered it printed among its records. But in 1869 Attorney-General Hoar upon the
request of the Secretary of the Treasury rendered an opinion agreeing with the Chief Justice.
The collection of the tax was consequently discontinued and the amounts theretofore
received were all refunded. For half a century thereafter judges' salaries were not taxed as
income.3

Third period. 1919-1938. The Federal Income Tax Act of February 24, 1919 expressly
provided that taxable income shall include "the compensation of the judges of the Supreme
Court and inferior courts of the United States". Under such Act, Walter Evans, United States
judge since 1899, paid income tax on his salary; and maintaining that the impost reduced his
compensation, he sued to recover the money he had delivered under protest. He was upheld
in 1920 by the Supreme Court in an epoch-making decision.*, explaining the purpose, history
and meaning of the Constitutional provision forbidding impairment of judicial salaries and the
effect of an income tax upon the salary of a judge.

With what purpose does the Constitution provide that the compensation of the judges
"shall not be diminished during their continuance in office"? Is it primarily to benefit
the judges, or rather to promote the public weal by giving them that independence
which makes for an impartial and courageous discharge of the judicial function?
Does the provision merely forbid direct diminution, such as expressly reducing the
compensation from a greater to a less sum per year, and thereby leave the way open
for indirect, yet effective, diminution, such as withholding or calling back a part as tax
on the whole? Or does it mean that the judge shall have a sure and continuing right
to the compensation, whereon he confidently may rely for his support during his
continuance in office, so that he need have no apprehension lest his situation in this
regard may be changed to his disadvantage?

The Constitution was framed on the fundamental theory that a larger measure of
liberty and justice would be assured by vesting the three powers — the legislative,
the executive, and the judicial — in separate departments, each relatively
independent of the others and it was recognized that without this independence — if
it was not made both real and enduring — the separation would fail of its purpose. all
agreed that restraints and checks must be imposed to secure the requisite measure
of independence; for otherwise the legislative department, inherently the strongest,
might encroach on or even come to dominate the others, and the judicial, naturally
the weakest, might be dwarf or swayed by the other two, especially by the legislative.

The particular need for making the judiciary independent was elaborately pointed our
by Alexander Hamilton in the Federalist, No. 78, from which we excerpt the following:

xxx xxx xxx

At a later period John Marshall, whose rich experience as lawyer, legislator, and
chief justice enable him to speak as no one else could, tersely said (debates Va.
Gonv. 1829-1831, pp. 616, 619): . . . Our courts are the balance wheel of our whole
constitutional system; and our is the only constitutional system so balanced and
controlled. Other constitutional systems lacks complete poise and certainly of
operation because they lack the support and interpretation of authoritative,
undisputable courts of law. It is clear beyond all need of exposition that for the
definite maintenance of constitutional understandings it is indispensable, alike for the
preservation of the liberty of the individual and for the preservation of the integrity of
the powers of the government, that there should be some nonpolitical forum in which
those understandings can be impartially debated and determined. That forum our
courts supply. There the individual may assert his rights; there the government must
accept definition of its authority. There the individual may challenge the legality of
governmental action and have it adjudged by the test of fundamental principles, and
that test the government must abide; there the government can check the too
aggressive self-assertion of the individual and establish its power upon lines which all
can comprehend and heed. The constitutional powers of the courts constitute the
ultimate safeguard alike of individual privilege and of governmental prerogative. It is
in this sense that our judiciary is the balance wheel of our entire system; it is meant
to maintain that nice adjustment between individual rights and governmental powers
which constitutes political liberty. Constitutional government in the United States, pp.
17, 142.

Conscious in the nature and scope of the power being vested in the national courts,
recognizing that they would be charge with responsibilities more delicate and
important than any ever before confide to judicial tribunals, and appreciating that they
were to be, in the words of George Washington, "the keystone of our political fabric",
the convention with unusual accord incorporated in the Constitution the provision that
the judges "shall hold their offices during good behavior, and shall at stated times
receive for their services a compensation which shall not be diminished during their
continuance in office." Can there be any doubt that the two things thus coupled in
place — the clause in respect of tenure during good behaviour and that in respect of
an undiminishable compensation-were equally coupled in purpose? And is it not plain
that their purposes was to invest the judges with an independence in keeping with
the delicacy and importance of their task, and with the imperative need for its
impartial and fearless performance? Mr. Hamilton said in explanation and support of
the provision (Federalist No. 79): "Next to permanency in office, nothing can
contribute more to the independence of the judges than a fixed provision for their
support. . . . In the general course of human nature, a power over a man's
subsistence amounts to a power over his will.

xxx xxx xxx

These considerations make it very plain, as we think, that the primary purpose of the
prohibition against diminution was not to benefit the judges, but, like the clause in
respect of tenure, to attract good and competent men to the bench, and to promote
that independence of action and judgment which is essential to the maintenance of
the guaranties, limitations, and pervading principles of the constitution, and to the
admiration of justice without respect to persons, and with equal concern for the poor
and the rich.

xxx xxx xxx

But it is urged that what plaintiff was made to pay back was an income tax, and that a
like tax was exacted of others engaged in private employment.

If the tax in respect of his compensation be prohibited, it can find no justification in

the taxation of other income as to which there is no prohibition, for, of course, doing
what the Constitution permits gives no license to do what it prohibits.

The prohibition is general, contains no excepting words, and appears to be directed

against all diminution, whether for one purpose or another; and the reason for its
adoption, as publicly assigned at the time and commonly accepted ever since, make
 with impelling force for the conclusion that the fathers of the Constitution intended to
prohibit diminution by taxation as well as otherwise, that they regarded the
independence of the judges as of far greater importance than any revenue that could
come from taxing their salaries. (American law Reports, annotated, Vol. 11, pp. 522-
25; Evans vs. Gore, supra.)

In September 1, 1919, Samuel J. Graham assumed office as judge of the Unites States court
of claims. His salary was taxed by virtue of the same time income tax of February 24, 1919.
At the time he qualified, a statute fixed his salary at P7,500. He filed action for
reimbursement, submitting the same theory on which Evans v. Gore had been decided. The
Supreme Court of the United States in 1925 reaffirmed that decision. It overruled the
distinction offered by Solicitor-General Beck that Judge Graham took office after the income
tax had been levied on judicial salaries, (Evans qualified before), and that Congress had
power "to impose taxes which should apply to the salaries of Federal judges appointed after
the enactment of the taxing statute." (The law had made no distinction as to judges
appointed before or after its passage)

Fourth period. 1939 — Foiled in their previous attempts, the Revenue men persisted, and
succeeded in inserting in the United States Revenue Act of June, 1932 the modified proviso
that "gross income" on which taxes were payable included the compensation "of judges of
courts of the United States taking office after June 6, 1932". Joseph W. Woodrough qualified
as United States circuit judge on May 1, 1933. His salary as judge was taxed, and before the
Supreme Court of the United States the issue of decrease of remuneration again came up.
That court, however, ruled against him, declaring (in 1939) that Congress had the power to
adopt the law. It said:

The question immediately before us is whether Congress exceeded its constitutional

power in providing that United States judges appointed after the Revenue Act of
1932 shall not enjoy immunity from the incidence of taxation to which everyone else
within the defined classes of income is subjected. Thereby, of course, Congress has
committed itself to the position that a non-discriminatory tax laid generally on net
income is not, when applied to the income of federal judge, a diminution of his salary
within the prohibition of Article 3, Sec. 1 of the Constitution. To suggest that it makes
inroads upon the independence of judges who took office after the Congress has
thus charged them with the common duties of citizenship, by making them bear their
aliquot share of the cost of maintaining the Government, is to trivialize the great
historic experience on which the framers based the safeguards of Article 3, Sec. 1.
To subject them to a general tax is merely to recognize that judges also are citizens,
and that their particular function in government does not generate an immunity from
sharing with their fellow citizens the material burden of the government whose
Constitution and laws they are charged with administering. (O'Malley vs. Woodrough,
59 S. Ct. 838, A. L. R. 1379.)

Now, the case for the defendant-appellant Collector of Internal Revenue is premised mainly
on this decision (Note A). He claims it holds "that federal judges are subject to the payment
of income taxes without violating the constitutional prohibition against the reduction of their
salaries during their continuance in office", and that it "is a complete repudiation of the ratio
decidenci of Evans vs. Gore". To grasp the full import of the O'Malley precedent, we should
bear in mind that:
1. It does not entirely overturn Miles vs. Graham. "To the extent that what the Court now
says is inconsistent with what said in Miles vs. Graham, the latter can not survive", Justice
Frankfurter announced.

2. It does not expressly touch nor amend the doctrine in Evans vs, Gore, although it indicates
that the Congressional Act in dispute avoided in part the consequences of that case.

Carefully analyzing the three cases (Evans, Miles and O'Malley) and piecing them together,
the logical conclusion may be reached that although Congress may validly declare by law
that salaries of judges appointed thereafter shall be taxed as income (O'Malley vs.
Woodrough) it may not tax the salaries of those judges already in office at the time of such
declaration because such taxation would diminish their salaries (Evans vs. Gore; Miles vs.
Graham). In this manner the rationalizing principle that will harmonize the allegedly
discordant decision may be condensed.

By the way, Justice Frankfurter, writing the O'Malley decision, says the Evans precedent met
with disfavor from legal scholarship opinion. Examining the issues of Harvard Law review at
the time of Evans vs. Gore (Frankfurter is a Harvard graduate and professor), we found that
such school publication criticized it. Believing this to be the "inarticulate consideration that
may have influenced the grounds on which the case went off"4, we looked into the criticism,
and discovered that it was predicated on the position that the 16th Amendment empowered
Congress "to collect taxes on incomes from whatever source derived" admitting of no
exception. Said the Harvard Law Journal:

In the recent case of Evans vs. Gore the Supreme Court of the United States
decided that by taxing the salary of a federal judge as a part of his income, Congress
was in effect reducing his salary and thus violating Art. III, sec. 1, of the Constitution.
Admitting for the present purpose that such a tax really is a reduction of salary, even
so it would seem that the words of the amendment giving power to tax 'incomes, from
whatever source derived', are sufficiently strong to overrule pro tanto the provisions
of Art. III, sec. 1. But, two years ago, the court had already suggested that the
amendment in no way extended the subjects open to federal taxation. The decision
in Evans vs. Gore affirms that view, and virtually strikes from the amendment the
words "from whatever source derived". (Harvard law Review, vol. 34, p. 70)

The Unites States Court's shift of position5 might be attributed to the above detraction which,
without appearing on the surface, led to Frankfurter's sweeping expression about judges
being also citizens liable to income tax. But it must be remembered that undisclosed factor
— the 16th Amendment — has no counterpart in the Philippine legal system. Our
Constitution does not repeat it. Wherefore, as the underlying influence and the unuttered
reason has no validity in this jurisdiction, the broad generality loses much of its force.

Anyhow the O'Malley case declares no more than that Congress may validly enact a
law taxing the salaries of judges appointed after its passage. Here in the Philippines no such
law has been approved.

Besides, it is markworthy that, as Judge Woodrough had qualified after the express
legislative declaration taxing salaries, he could not very well complain. The United States
Supreme Court probably had in mind what in other cases was maintained, namely, that the
tax levied on the salary in effect decreased the emoluments of the office and therefore the
judge qualified with such reduced emoluments.6
The O'Malley ruling does not cover the situation in which judges already in office are made to
pay tax by executive interpretation, without express legislative declaration. That state of
affairs is controlled by the administrative and judicial standards herein-before described in
the "second period" of the Federal Government, namely, the views of Chief Justice Taney
and of Attorney-General Hoar and the constant practice from 1869 to 1938, i.e., when the
Income Tax Law merely taxes "income" in general, it does not include salaries of judges
protected from diminution.

In this connection the respondent would make capital of the circumstance that the Act of
1932, upheld in the O'Malley case, has subsequently been amended by making it applicable
even to judges who took office before1932. This shows, the appellant argues, that Congress
interprets the O'Malley ruling to permit legislative taxation of the salary of judges whether
appointed before the tax or after. The answer to this is that the Federal Supreme Court
expressly withheld opinion on that amendment in the O'Malley case. Which is significant.
Anyway, and again, there is here no congressional directive taxing judges' salaries.

Wherefore, unless and until our Legislature approves an amendment to the Income Tax Law
expressly taxing "that salaries of judges thereafter appointed", the O'Malley case is not
relevant. As in the United States during the second period, we must hold that salaries of
judges are not included in the word "income" taxed by the Income Tax Law. Two paramount
circumstances may additionally be indicated, to wit: First, when the Income Tax Law was first
applied to the Philippines 1913, taxable "income" did not include salaries of judicial officers
when these are protected from diminution. That was the prevailing official belief in the United
States, which must be deemed to have been transplanted here;7 and second, when the
Philippine Constitutional Convention approved (in 1935) the prohibition against diminution off
the judges' compensation, the Federal principle was known that income tax on judicial
salaries really impairs them. Evans vs. Gore and Miles vs. Graham were then outstanding
doctrines; and the inference is not illogical that in restraining the impairment of judicial
compensation the Fathers of the Constitution intended to preclude taxation of the same.8

It seems that prior to the O'Malley decision the Philippine Government did not collect income
tax on salaries of judges. This may be gleaned from General Circular No. 449 of the
Department of Finance dated March 4, 1940, which says in part:

xxx xxx xxx

The question of whether or not the salaries of judges should be taken into account in
computing additional residence taxes is closely linked with the liability of judges to
income tax on their salaries, in fact, whatever resolution is adopted with respect to
either of said taxes be followed with respect to the other. The opinion of the Supreme
Court of the United States in the case of O'Malley v. Woodrough, 59 S. Ct. 838, to
which the attention of this department has been drawn, appears to have enunciated
a new doctrine regarding the liability of judges to income tax upon their salaries. In
view of the fact that the question is of great significance, the matter was taken up in
the Council of State, and the Honorable, the Secretary of Justice was requested to
give an opinion on whether or not, having in mind the said decision of the Supreme
Court of the United States in the case of O'Malley v. Woodrough, there is
justification in reversing our present ruling to the effect that judges are not liable to
tax on their salaries. After going over the opinion of the court in the said case, the
Honorable, the Secretary of Justice, stated that although the ruling of the Supreme
Court of the United States is not binding in the Philippines, the doctrine therein
enunciated has resolved the issue of the taxability of judges' salaries into a question
 of policy. Forthwith, His Excellency the President decided that the best policy to
adopt would be to collect income and additional residence taxes from the President
of the Philippines, the members of the Judiciary, and the Auditor General, and the
undersigned was authorized to act accordingly.

In view of the foregoing, income and additional residence taxes should be levied on
the salaries received by the President of the Philippines, members of the Judiciary,
and the Auditor General during the calendar year 1939 and thereafter. . . . .
(Emphasis ours.)

Of course, the Secretary of Justice correctly opined that the O'Malley decision "resolved the
issue of taxability of judges' salaries into a question of policy." But that policy must be
enunciated by Congressional enactment, as was done in the O'Malley case, not by
Executive Fiat or interpretation.

This is not proclaiming a general tax immunity for men on the bench. These pay taxes. Upon
buying gasoline, or other commodities, they pay the corresponding duties. Owning real
property, they pay taxes thereon. And on incomes other than their judicial salary,
assessments are levied. It is only when the tax is charged directly on their salary and the
effect of the tax is to diminish their official stipend — that the taxation must be resisted as an
infringement of the fundamental charter.

Judges would indeed be hapless guardians of the Constitution if they did not perceive and
block encroachments upon their prerogatives in whatever form. The undiminishable
character of judicial salaries is not a mere privilege of judges — personal and therefore
waivable — but a basic limitation upon legislative or executive action imposed in the public
interest. (Evans vs. Gore)

Indeed the exemption of the judicial salary from reduction by taxation is not really a gratuity
or privilege. Let the highest court of Maryland speak:

The exemption of the judicial compensation from reduction is not in any true sense a
gratuity, privilege or exemption. It is essentially and primarily compensation based
upon valuable consideration. The covenant on the part of the government is a
guaranty whose fulfillment is as much as part of the consideration agreed as is the
money salary. The undertaking has its own particular value to the citizens in securing
the independence of the judiciary in crises; and in the establishment of the
compensation upon a permanent foundation whereby judicial preferment may be
prudently accepted by those who are qualified by talent, knowledge, integrity and
capacity, but are not possessed of such a private fortune as to make an assured
salary an object of personal concern. On the other hand, the members of the
judiciary relinquish their position at the bar, with all its professional emoluments,
sever their connection with their clients, and dedicate themselves exclusively to the
discharge of the onerous duties of their high office. So, it is irrefutable that they
guaranty against a reduction of salary by the imposition of a tax is not an exemption
from taxation in the sense of freedom from a burden or service to which others are
liable. The exemption for a public purpose or a valid consideration is merely a
nominal exemption, since the valid and full consideration or the public purpose
promoted is received in the place of the tax. Theory and Practice of Taxation (1900),
D. A. Wells, p. 541. (Gordy vs. Dennis (Md.) 1939, 5 Atl. Rep. 2d Series, p. 80)
It is hard to see, appellants asserts, how the imposition of the income tax may imperil the
independence of the judicial department. The danger may be demonstrated. Suppose there
is power to tax the salary of judges, and the judiciary incurs the displeasure of the
Legislature and the Executive. In retaliation the income tax law is amended so as to levy a
30 per cent on all salaries of government officials on the level of judges. This naturally
reduces the salary of the judges by 30 per cent, but they may not grumble because the tax is
general on all receiving the same amount of earning, and affects the Executive and the
Legislative branches in equal measure. However, means are provided thereafter in other
laws, for the increase of salaries of the Executive and the Legislative branches, or their
perquisites such as allowances, per diems, quarters, etc. that actually compensate for the 30
per cent reduction on their salaries. Result: Judges compensation is thereby diminished
during their incumbency thanks to the income tax law. Consequence: Judges must "toe the
line" or else. Second consequence: Some few judges might falter; the great majority will not.
But knowing the frailty of human nature, and this chink in the judicial armor, will the parties
losing their cases against the Executive or the Congress believe that the judicature has not
yielded to their pressure?

Respondent asserts in argumentation that by executive order the President has subjected
his salary to the income tax law. In our opinion this shows obviously that, without such
voluntary act of the President, his salary would not be taxable, because of constitutional
protection against diminution. To argue from this executive gesture that the judiciary could,
and should act in like manner is to assume that, in the matter of compensation and power
and need of security, the judiciary is on a par with the Executive. Such assumption certainly
ignores the prevailing state of affairs.

The judgment will be affirmed. So ordered.

Moran, C.J., Pablo, Padilla, Tuason, Montemayor, Reyes and Torres, JJ., concur.

Separate Opinions

OZAETA., J., dissenting:

It is indeed embarrassing that this case was initiated by a member of this Court upon which
devolves the duty to decide it finally. The question of whether the salaries of the judges, the
members of the Commission on Elections, the Auditor General, and the President of the
Philippines are immune from taxation, might have been raised by any interested party other
than a justice of the Supreme Court with less embarrassment to the latter.

The question is simple and not difficult of solution. We shall state our opinion as concisely as
possible.

The first income tax law of the Philippines was Act No. 2833, which was approved on March
7, 1919, to take effect on January 1, 1920. Section 1 (a) of said Act provided:

There shall be levied, assessed, collected, and paid annually upon the entire net
income received in the preceding calendar year from all sources by every individual,
a citizen or resident of the Philippine Islands, a tax of two per centum upon such
income. . . . (Emphasis ours.)
Section 2 (a) of said Act provided:

Subject only to such exemptions and deductions as are hereinafter allowed, the
taxable net income of a person shall include gains, profits, and income derived from
salaries, wages or compensation for personal service of whatever kind and is
whatever form paid, or from professions, vocations, businesses, trade, commerce,
sales, or dealings in property, whether real or personal, growing out of the ownership
or use of or interest in real or personal property, also from interest, rent, dividends,
securities, or the transaction of any business carried on for gain or profit, or gains,
profits, and income derived from any source whatever.

That income tax law has been amended several times, specially as to the rates of the tax,
but the above-quoted provisions (except as to the rate) have been preserved intact in the
subsequent Acts. The present income tax law is Title II of the National Internal Revenue
Code, Commonwealth Act No. 466, sections 21, 28 and 29 of which incorporate the texts of
the above-quoted provisions of the original Act in exactly the same language. There can be
no dispute whatsoever that judges (who are individuals) and their salaries (which are
income) are as clearly comprehended within the above-quoted provisions of the law as if
they were specifically mentioned therein; and in fact all judges had been and were paying
income tax on their salaries when the Constitution of the Philippines was discussed and
approved by the Constitutional Convention and when it was submitted to the people for
confirmation in the plebiscite of May 14, 1935.

Now, the Constitution provides that the members of the Supreme Court and all judges of
inferior courts "shall receive such compensation as may be fixed by law, which shall not be
diminished during their continuance in office." (Section 9, Article VIII, emphasis ours.)a

The simple question is: In approving the provisions against the diminution of the
compensation of judges and other specified officers during their continuance in office, did the
framers of the Constitution intend to nullify the then existing income tax law insofar as it
imposed a tax on the salaries of said officers ? If they did not, then the income tax law, which
has been incorporated in the present National Internal Revenue Code, remains in force in its
entirety and said officers cannot claim exemption therefrom on their salaries.

Section 2 of Article XVI of the Constitution provides that all laws of the Philippine Islands
shall remain operative, unless inconsistent with this Constitution, until amended, altered,
modified. or repealed by the Congress of the Philippines.

In resolving the question at bar, we must take into consideration the following well-settled
rules:

"A constitution shall be held to be prepared and adopted in reference to existing

statutory laws, upon the provisions of which in detail it must depend to be set in
practical operation" (People vs. Potter, 47 N. Y. 375; People vs. Draper, 15 N. Y.
537; Cass vs. Dillon, 2 Ohio St. 607; People vs. N. Y., 25 Wend. (N. Y. 22). (Barry
vs. Traux, 3 A. & E. Ann. Cas 191, 193.).

Courts are bound to presume that the people adopting a constitution are familiar with
the previous and existing laws upon the subjects to which its provisions relate, and
upon which they express their judgment and opinion in its adoption (Baltimore vs.
State, 15 Md. 376, 480; 74 Am. Dec. 572; State vs. Mace, 5 Md. 337; Bandel vs.
Isaac, 13 Md. 202; Manly vs. State, 7 Md. 135; Hamilton vs. St. Louis County Ct., 15
 Mo. 5; People vs. Gies, 25 Mich. 83; Servis vs. Beatty, 32 Miss. 52; Pope vs. Phifer,
3 Heisk. (Tenn.) 686; People vs. Harding, 53 Mich. 48, 51 Am. Rep. 95; Creve Coeur
Lake Ice Co. vs. Tamm, 138 Mo. 385, 39 S. W. Rep. 791). (Idem.)

A constitutional provision must be presumed to have been framed and adopted in the
light and understanding of prior and existing laws and with reference to them.
Constitutions, like statutes, are properly to be expounded in the light of conditions
existing at the time of their adoption, the general spirit of the times, and the prevailing
sentiments among the people. Reference may be made to the historical facts relating
to the original or political institutions of the community or to prior well-known
practices and usages. (11 Am. Ju., Constitutional Law, 676-678.)

The salaries provided in the Constitution for the Chief Justice and each associate Justice,
respectively, of the Supreme Court were the same salaries ]which they were receiving at the
time the Constitution was framed and adopted and on which they were paying income tax
under the existing income tax law. It seems clear to us that for them to receive the same
salaries, subject to the same tax, after the adoption of the Constitution as before does not
involve any diminution at all. The fact that the plaintiff was not a member of the Court when
the Constitution took effect, makes no difference. The salaries of justices and judges were
subject to income tax when he was appointed in the early part of 1945. In fact he must have
declared and paid income tax on his salary for 19454 — he claimed exemption only
beginning 1946. It seems likewise clear that when the framers of the Constitution fixed those
salaries, they must have taken into consideration that the recipients were paying income tax
thereon. There was no necessity to provide expressly that said salaries shall be subject to
income tax because they knew that already so provided. On the other hand, if exemption
from any tax on said salaries had been intended, it would have been specifically to so
provide, instead of merely saying that the compensation as fixed "shall not be diminished
during their continuance in office."

In the light of the antecedents, the prohibition against diminution cannot be interpreted to
include or refer to general taxation but to a law by which said salaries may be fixed. The
sentence in question reads: "They shall receive such compensation as may be fixed by law,
which shall not be diminished during their continuance in office." The next sentence reads:
"Until the Congress shall provide otherwise, the Chief Justice of the Supreme Court shall
receive an annual compensation of P16,000, and each associate Justice, P15,000." It is
plain that the Constitution authorizes the Congress to pass a law fixing another rate of
compensation, but that such rate must be higher than that which the justices receive at he
time of its enactment or, if lower, it must not affect those justice already in office. In other
words, Congress may approve a law increasing the salaries of the justices at any time, but it
cannot approve a law decreasing their salaries unless such law is made effective only as to
justices appointed after its approval.

It would be a strained and unreasonable construction of the prohibition against diminution to

read into it an exemption from taxation. There is no justification for the belief or assumption
that the framers of the Constitution intended to exempt the salaries of said officers from
taxes. They knew that it was and is the unavoidable duty of every citizen to bear his aliquot
share of the cost of maintaining the Government; that taxes are the very blood that sustains
the life of the Government. To make all citizens share the burden of taxation equitably, the
Constitution expressly provides that "the rule of taxation shall be uniform." (Section 22 [1],
Article VI.) We think it would be a contravention of this provision to read into the prohibition
against diminution of the salaries of the judges and other specified officers an exemption
from taxes on their salaries. How could the rule of income taxation be uniform if it should not
be applied to a group of citizens in the same situation as other income earners ? It is to us
inconceivable that the framers ever intended to relieve certain officers of the Government
from sharing with their fellows citizens the material burden of the Government — to exempt
their salaries from taxes. Moreover, the Constitution itself specifies what properties are
exempt from taxes, namely: "Cemeteries, churches, and parsonages or convents
appurtenant thereto, and all lands, buildings, and improvements used exclusively for
religious, charitable, or educational purposes." (Sec. 22 [3], Article VI.) The omission of the
salaries in question from this enumeration is in itself an eloquent manifestation of intention to
continue the imposition of taxes thereon as provided in the existing law. Inclusio est exclusio
alterius.

We have thus far read and construed the pertinent portions of our own Constitution and
income tax law in the light of the antecedent circumstances and of the operative factors
which prevailed at the time our Constitution was framed, independently of the construction
now prevailing in the United States of similar provisions of the federal Constitution in relation
to the present federal income tax law, under which the justices of the Supreme Court, and
the federal judges are now, and since the case of O'Malley vs. Woodrough was decided on
May 22, 1939, have been, paying income tax on their salaries. Were this a majority opinion,
we could end here with the consequent reversal of the judgment appealed from. But ours is a
voice in the wilderness, and we may permit ourselves to utter it with more vehemence and
emphasis so that future players on this stage perchance may hear and heed it. Who knows?
The Gospel itself was a voice in the wilderness at the time it was uttered.

We have to comment on Anglo-American precedents since the majority decision from which
we dissent is based on some of them. Indeed, the majority say they "hardly do nothing more
than to borrow therefrom and to compare their conclusions to local conditions." which we
shall presently show did not obtain in the United States at the time the federal and state
Constitutions were adopted. We shall further show that in any event what they now borrow is
not usable because it has long been withdrawn from circulation.

When the American Constitution was framed and adopted, there was no income tax law in
the United States. To this circumstance may be attributed the claim made by some federal
judges headed by Chief Justice Taney, when under the Act of Congress of July 1, 1862, their
salaries were subjected to an income tax, that such tax was a diminution of their salaries and
therefore prohibited by the Constitution. Chief Justice Taney's claim and his protest against
the tax were not heeded, but no federal judge deemed it proper to sue the Collector of
Internal Revenue to recover the taxes they continued to pay under protest for several years.
In 1869, the Secretary of the Treasury referred the question to Atty. General Hoar, and that
officer rendered an opinion in substantial accord with Chief Justice Taney's protest, and also
advised that the tax on the President's compensation was likewise invalid. No judicial
pronouncement, however, was made of such invalidity until June 1, 1920, when the case
of Evans vs. Gore (253 U.S. 245, 64 L. ed. 887) was decided upon the constitutionality of
section 213 of the Act of February 24, 1919, which required the computation of incomes for
the purpose of taxation to embrace all gains, profits, income and the like, "including in the
case of the President of the United States, the judges of the Supreme and inferior courts of
the United States, [and others] . . . the compensation received as such." The Supreme Court
of the United States, speaking through Mr. Justice Van Devanter, sustained the suit with the
dissent of Justice Holmes and Brandeis. The doctrine of Evans vs. Gore holding in effect that
an income tax on a judge's salary is a diminution thereof prohibited by the Constitution, was
reaffirmed in 1925 in Miles vs. Graham, 69 L. ed 1067.

In 1939, however, the case of O'Malley vs. Woodrough (59 S. Ct. 838, 122 A. L. R. 1379)
was brought up to the test the validity of section 22 of the Revenue Act of June 6, 1932,
which included in the "gross income," on the basis of which taxes were to be paid, the
compensation of "judges of courts of the United States taking office after June 6, 1932." And
in that case the Supreme Court of the United States, with only one dissent (that of Justice
Butler), abandoned the doctrine of Evans vs. Gore and Miles vs. Graham by holding:

To subject them [the judges] to a general tax is merely to recognize that judges are
also citizens, and that their particular function in government does not generate an
immunity from sharing with their fellow citizens the material burden of the
government whose Constitution and laws they are charged with administering.

The decision also says:

To suggest that it [the law in question] makes inroads upon the independence of
judges who took office after Congress had thus charged them with the common
duties of citizenship, by making them bear their aliquot share of the cost of
maintaining the Government, is to trivialize the great historic experience on which the
framers based the safeguard of Article 3, section 1.

Commenting on the above-quoted portions of the latest decision of the Supreme Court of the
United States on the subject, Prof. William Bennett, Munro, in his book, The Government of
the United States, which is used as a text in various universities, says: ". . .

All of which seems to be common sense, for surely the framers of the Constitution
from ever cutting a judge's salary, did not intend to relieve all federal judges from the
general obligations of citizenship. As for the President, he has never raised the issue;
every occupant of the White House since 1913 has paid his income tax without
protest. (Pages 371-372.)

We emphasize that the doctrine of Evans vs. Gore and Miles vs. Graham is no longer
operative, and that all United States judges, including those who took office before June 6,
1932, are subject to and pay income tax on their salaries; for after the submission of
O'Malley vs. Woodrough for decision the Congress of the United States, by section 3 of the
Public Salary Act of 1939, amended section 22 (a) of the Revenue Act of June 6, 1932, so as
to make it applicable to "judges of courts of the United States who took office on or
before June 6, 1932." And the validity of that Act, in force for more than a decade, has not
been challenged.

Our colleagues import and transplant here the dead limbs of Evans vs. Gore and Miles vs.
Graham and attempt to revive and nurture them with painstaking analyses and diagnoses
that they had not suffered a fatal blow from O'Malley vs. Woodrough. We refuse to join this
heroic attempt because we believe it is futile.

They disregard the actual damage and minimize it by trying to discover the process by which
it was inflicted and he motivations that led to the infliction. They say that the chief axe-
wielder, Justice Frankfurter, was a Harvard graduate and professor and that the Harvard Law
Journal had criticized Evans vs. Gore; that the dissenters in said case (Holmes and
Brandeis) were Harvard men like Frankfurter; and that they believe this to be the "inarticulate
consideration that may have influenced the grounds on which the case [O'Malley vs.
Woodrough] went off." This argument is not valid, in our humble belief. It was not only the
Harvard Law Journal that had criticized Evans vs. Gore. Justice Frankfurter and his
colleagues said that the decision in that case "met with wide and steadily growing disfavor
from legal scholarship and professional opinion," and they cited the following:
Clark, Furthermore Limitations Upon Federal Income Taxation, 30 Yale L. J. 75;
Corwin, Constitutional Law in 1919-1920, 15 Am. Pol. Sci. Rev. 635, 641-644;
Fellman, Diminution of Judicial Salaries, 24 Iowa L. Rev. 89; Lowndes, Taxing Income of
Federal Judiciary, 19 Va. L. Rev. 153; Powell, Constitutional Law in 1919-1920, 19 Mich. L.
Rev. 117, 118; Powell, The Sixteenth Amendment and Income from State Securities,
National Income Tax Magazine (July, 1923), 5, 6; 20 Columbia L. Rev. 794; 43 Harvard L.
Rev. 318; 20 Ill. L. Rev. 376; 45 Law Quarterly Rev. 291; 7 Va. L. Rev. 69; 3 University of
Chicago L. Rev. 141. Justice Frankfurter and his colleagues also said that "Evans vs.
Gore itself was rejected by most of the courts before whom the matter came after that
decision." Is not the intention to throw Evans vs. Gore into the graveyard of abandoned
cases manifest from all this and from the holding that judges are also citizens, liable to
income tax on their salaries?

The majority say that "unless and until our legislature approves an amendment to the income
tax law expressly taxing 'the salaries of judges thereafter appointed,' the O'Malley case is not
relevant." We have shown that our income tax law taxes the salaries of judges as clearly as
if they are specifically mentioned therein, and that said law took effect long before the
adoption of the Constitution and long before the plaintiff was appointed.

We agree that the purpose of the constitutional provision against diminution of the salaries of
judges during their continuance in office is to safeguard the independence of the Judicial
Department. But we disagree that to subject the salaries of judges to a general income tax
law applicable to all income earners would in any way affect their independence. Our own
experience since the income tax law went effect in 1920 is the best refutation of such
assumption.

The majority give an example by which the independence of judges may be imperiled thru
the imposition of a tax on their salaries. They say: Suppose there is power to tax the salaries
of judges and the judiciary incurs the displeasure of the Legislature and the Executive. In
retaliation the income tax law is amended so as to levy a 30 per cent tax on all salaries of
government officials on the level of judges, and by means of another law the salaries of the
executive and the legislative branches are increased to compensate for the 30 per cent
reduction of their salaries. To this we reply that if such a vindictive measure is ever resorted
to (which we cannot imagine), we shall be the first ones to vote to strike it down as a
palpable violation of the Constitution. There is no parity between such hypothetical law and
the general income tax law invoked by the defendant in this case. We believe that an income
tax law applicable only against the salaries of judges and not against those or all other
income earners may be successfully assailed as being in contravention not only of the
provision against diminution of the salaries of judges but also of the uniformity of the rule of
taxation as well as of the equal protection clause of the Constitution. So the danger
apprehended by the majority is not real but surely imaginary.

We vote for the reversal of the judgment appealed from the dismissal of plaintiff's complaint.

Paras J., concurs.

Footnotes

*Evans vs. Gore, 253 U. S. 245 and Gordy v. Dennis, 5 Atl. (2d) 69, hold identical
view.
1 Evans vs. Gore, 253 U. S. 254, 64 L. ed. 887.

2 157 U. S. 701, Evans vs. Gore, supra.

3 See Evans vs. Gore, supra.

* Evans vs. Gore, supra.

(Note A) The defendant also relies on the dissenting opinion of Mr. Justice
Holmes in Evans vs. Gore, supra, forgetting that subsequently Justice
Holmes did not dissent in Miles vs. Graham, and apparently accepted Evans
vs. Gore as authority in writing his opinion in Gillespie vs. Oklahoma, 257 U.
S. 501, 66 Law ed. 338. This remark applies to Taylor vs. Gehner (1931), No.
45 S. W. (2d) 59, which merely echoes Holmes dissent.

State vs. Nygaard, 159, Wisc. 396 and the decision of English courts invoked
by appellant, are refuted or distinguished in Gordy vs. Dennis, 5 Alt. (2d) 68,
known to him since he invokes the minority opinion therein.

4Frankfurter, The Administrative Side of Chief Justice Hughes, Harvard Law Review,
November, 1949.

5 It was a coincidence that the dissenters (Holmes and Brandeis) were Harvard men
like Frankfurter. It is not unlikely that the Harvard professor and admirer of Justice
Holmes (whose biography he wrote in 1938) noted and unconsciously absorbed the
dissent.

6 Baker vs. C.I.R. 149 Fed. (2d) 342.

7It requires a very clear case to justify changing the construction of a constitutional
provision which has been acquiesced in for so long a period as fifty years. (States vs.
Frear, 138 Wisc. 536, 120 N. W. 216. See also Hill vs. Tohill, 225 Ill. 384, 80 NE,
253.

8On persuasive weight of contemporary construction of constitutional provision, see

generally Cooley, Constitutional Limitation 98th Ed.) Vol. I pp. 144 et seq.

aThe Constitution also provides that the President shall "receive a compensation to
be ascertained by law which shall be neither increased nor diminished during the
period for which he shall have been elected" (section 9, Article VII); that the Auditor
General "shall receive an annual compensation to be fixed by law which shall not be
diminished during his continuance in office" (section 1, Article XI); and that the
salaries of the chairman and the members of the Commission on Elections "shall be
neither increased nor diminished during their term of office" (section 1, Article X).
G.R. No. L-26702 October 18, 1979

JUAN AUGUSTO B. PRIMICIAS, plaintiff-appellee,

vs.
THE MUNICIPALITY OF URDANETA, PANGASINAN, ET AL., defendants-appellants.

Ambrosio Padilla Law Offices for appellee.

Primicias, Castillo & Macaraeg for appellants.

DE CASTRO, J.:

The main issue in this appeal is the validity of Ordinance No. 3, Series of 1964, enacted on
March 13,1964 by the Municipal Council of Urdaneta, Pangasinan, which was declared null
and void by the Court of First Instance of Lingayen, Pangasinan, in its decision dated June
29, 1966, the dispositive portion of which reads as follows:

WHEREFORE, this Court renders decision declaring Ordinance No, 3, Series

of 1964, to be null and void; making the writ of preliminary injunction
heretofore issued against the defendant, Felix D. Soriano definite and
permanent; and further restraining the defendants, Amadeo R. Perez, Jr.,
Lorenzo G. Suyat and Estanislao Andrada, from enforcing the said ordinance
all throughout Urdaneta; and ordering the said defendants to return to the
plaintiff his drivers (sic) license CIN 017644, a copy of which is Exhibit D-1,
and to pay the costs of suit. 1

From the aforecited decision, defendants appealed to this Court. The antecedent facts of this
case are as follows: 2

On February 8, 1965, Juan Augusta B. Primacias plaintiff appellee, was driving his car within
the jurisdiction of Urdaneta when a member of Urdaneta's Municipal Police asked him to
stop. He was told, upon stopping, that he had violated Municipal Ordinance No. 3, Series of
1964, "and more particularly, for overtaking a truck." The policeman then asked for plaintiff's
license which he surrendered, and a temporary operator's permit was issued to him. This
incident took place about 200 meters away from a school building, at Barrio Nancamaliran,
Urdaneta.

Thereafter, a criminal complaint was filed in the Municipal Court of Urdaneta against
Primicias for violation of Ordinance No. 3, Series of 1964. Due to the institution of the
criminal case, plaintiff Primicias initiated an action for the annulment of said ordinance with
prayer for the issuance of preliminary injunction for the purpose of restraining defendants
Municipality of Urdaneta, Mayor Perez, Police Chief Suyat, Judge Soriano and Patrolman
Andrada from enforcing the ordinance. The writ was issued and Judge Soriano was enjoined
from further proceeding in the criminal case.
After trial, the Court of First Instance rendered the questioned decision holding that the
ordinance was null and void and had been repealed by Republic Act No. 4136, otherwise
known as the Land Transportation and Traffic Code. Now, defendants, appellants herein,
allege that the lower court erred in: 3

1. declaring that Municipal Ordinance No. 3 (Series of 1964) of Urdaneta is

null and void;

2. requiring the municipal council of Urdaneta in the enactment of said

ordinance to give maximum allowable speed and to make classification of
highways;

3. holding that said ordinance is in conflict with section 35 par. b(4) of

Republic Act 4136;

4. requiring that said ordinance be approved by the Land Transportation

Commissioner;

5. holding that said ordinance is not clear and definite in its terms;

6. issuing ex-parte a writ of injunction to restrain the proceedings in criminal

case no. 3140.

The ordinance in question provides: 4

SECTION 1 - That the following speed limits for vehicular traffic along the
National Highway and the Provincial Roads within the territorial limits of
Urdaneta shall be as follows:

a. Thru crowded streets approaching intersections at 'blind

corners, passing school zones or thickly populated areas,
duly marked with sign posts, the maximum speed limit
allowable shall be 20 kph.

SECTION 2 - That any person or persons caught driving any motor vehicle
violating the provisions of this ordinance shall be fined P10.00 for the first
offense; P20.00 for the second offense; and P30.00 for the third and
succeeding offenses, the Municipal Judge shall recommend the cancellation
of the license of the offender to the Motor Vehicle's Office (MVO); or failure to
pay the fine imposed, he shall suffer a subsidiary imprisonment in
accordance with law.

Appellants contend that the Ordinance is valid, being "patterned after and based on Section
53, 5 par. 4 of Act No. 3992, as amended (Revised Motor Vehicle Law)." In so arguing,
appellants fail to note that Act No. 3992 has been superseded by Republic Act No. 4136, the
Land Transportation and 'Traffic Code, which became effective on June 20, 1964, about
three months after the questioned ordinance was approved by Urdaneta's Municipal Council.
The explicit repeal of the aforesaid Act is embodied in Section 63, Republic Act No. 4136, to
wit:
 Act Numbered thirty-nine hundred ninety-two (3992) as amended, and all
laws, executive orders, ordinance, resolutions, regulations or paints thereof in
conflict with the provisions of this Act are repealed.

By this express repeal, and the general rule that a later law prevails over an earlier
law, 6 appellants are in error in contending that "a later enactment of the law relating to the
same subject matter as that of an earlier statute is not sufficient to cause an implied repeal of
the original law." Pursuant to Section 63, Republic Act No. 4136, the ordinance at bar is thus
placed within the ambit of Republic Act No. 4136, and not Act No. 3992. The validity of
Ordinance No. 3, Series of 1964, must therefore be determined vis-a-vis Republic Act No.
4136, the "mother statute" so to speak, which was in force at the time the criminal case was
brought against Primicias for the violation of the said ordinance.

An essential requisite for a valid ordinance is, among others, that is "must not contravene . . .
the statute," 7 for it is a "fundamental principle that municipal ordinances are inferior in status
and subordinate to the laws of the state." 8Following this general rule, whenever there is a
conflict between an ordinance and a statute, the ordinance "must give way. 9

Since the Ordinance is aimed at regulating traffic, Chapter IV Traffic Rules), Article I (Speed
Limits and Keeping to the Right), consisting of sections 35, to 38 of Republic Act No. 4136,
particularly Sections 35, 36, 38 contain the provisions material to its validity. Section 35 (b),
Republic Act No. 4136, which took the place of Section 53, par. (4), Act No. 3992, provides
restrictions as to speed thus:

MAXIMUM ALLOWABLE SPEEDS

Passenger cars and Motor trucks

motorcycle and buses

1. On open country roads, with

"blind corners" not closely bordered

by habitation. 80 km. 50 km.

2. On through streets or per hour per hour

boulevards, clear of traffic, with "no

blind corners" when so designated. 40 km. 30 km.

3. On city and municipal per hour per hour

streets, with light traffic, when not

designated "through streets." 30 km. 30 km.

4. Through crowded streets ap per hour per hour

proaching intersection at "blind cor

ners," passing school zones, passing

other vehicles which are stationary, or

for similar circumstances. 20 km. 20 km.

per hour per hour

A look at the aforecited section and Section 1, par. (a) of the Ordinance shows that the latter
is more or less a restatement only of number (4), par. (b), Section 35. As observed by the
trial court, the Ordinance "refers to only one of the four classifications mentioned in
paragraph (b), Section 35." 10 limiting the rates of speed for

vehicular traffic along the national highway and The provincial roads within
the territorial limits of Urdaneta to 20 kilometers per hour without regard to
whether the road is an open country roads (six), or through streets or
boulevards, or city or municipal streets with light traffic. 11

As also found correctly by the lower court, the Municipal Council of Urdaneta did not make
any classification of its thoroughfares, contrary to the explicit requirement laid down by
Section 38, Republic Act No. 4136, which provides:

Classification of highways. - Public highways shall be properly classified for

traffic purposes by the provincial board or city council having jurisdiction over
them, and said provincial board, municipal board or city council shall provide
appropriate signs therefor, subject to the approval of the Commissioner. It
shall be the duty of every provincial, city and municipal secretary to certify to
the Commissioner the names, locations, and limits of all "through streets"
designated as such by the provincial board, municipal board or council.

Under this section, a local legislative body intending to control traffic in public highways 12 is
supposed to classify, first, and then mark them with proper signs, all to be approved by the
Land Transportation Commissioner. To hold that the provisions of Section 38 are mandatory
is sanctioned by a ruling 13 that

statutes which confer upon a public body or officer . . . power to perform acts
which concern the public interests or rights of individuals, are generally,
regarded as mandatory although the language is permissive only since the
are construed as imposing duties rather than conferring privileges.

The classifications which must be based on Section 35 are necessary in view of Section 36
which states that "no provincial, city or municipal authority shall enact or enforce any
ordinance or resolution specifying maximum allowable speeds other than those provided in
this Act." In this case, however, there is no showing that the marking of the streets and areas
falling under Section 1, par. (a), Ordinance No. 3, Series of 1964, was done with the
approval of the Land Transportation Commissioner. Thus, on this very ground alone, the
Ordinance becomes invalid. Since it lacks the requirement imposed by Section 38, the
provincial, city, or municipal board or council is enjoined under Section 62 of the Land
Transportation and Traffic Code from "enacting or enforcing any ordinance or resolution in
conflict with the provisions of this Act."

Regarding the contention that the lower court erred in holding that said "Ordinance is not
clear and definite in its terms." We agree with the Court a quo that when the Municipal
Council of Urdaneta used the phrase "vehicular traffic" (Section 1, Ordinance) it "did not
distinguish between passenger cars and motor vehicles and motor trucks and buses." 14 This
conclusion is bolstered by the fact that nowhere in the Ordinance is "vehicular traffic"
defined. Considering that this is a regulatory ordinance, its clearness, definiteness and
certainty are all the more important so that "an average man should be able with due care,
after reading it,, to understand and ascertain whether he will incur a penalty for particular
acts or courses of conduct." 15 In comparison, Section 35(b), Republic Act No. 4136 on which
Section 1 of the Ordinance must be based, stated that the rates of speed enumerated therein
refer to motor vehicle, 16 specifying the speed for each kind of vehicle. At the same time, to
avoid vagueness, Art. 11, Section 3 defines what a motor vehicle is and passenger
automobiles are.

On the issue of whether a writ of injunction can restrain the proceedings in Criminal Case
No. 3140, the general rule is that "ordinarily, criminal prosecution may not be blocked by
court prohibition or injunction." 17 Exceptions however are allowed in the following instances:

1. for the orderly administration of justice;

2. to prevent the use of the strong arm of the law in an oppressive and
vindictive manner;

3. to avoid multiplicity of actions;

4. to afford adequate protection to constitutional rights;

5. in proper cases, because the statute relied upon is unconstitutional or was

held invalid. 18

The local statute or ordinance at bar being invalid, the exception just cited obtains in this
case. Hence, the lower court did not err in issuing the writ of injunction against defendants.
Moreover, considering that "our law on municipal corporations is in principle patterned after
that of the United States, " 19 it would not be amiss for Us to adopt in this instance the ruling
that to enjoin the enforcement of a void ordinance, "injunction has frequently been sustained
in order to prevent a multiplicity of prosecutions under it." 20

In view of the foregoing, the appealed decision is hereby affirmed.

SO ORDERED.

Teehankee, Acting C.J., Barredo, Makasiar, Concepcion Jr., Santos, Fernandez, Guerrero,
and Melencio-Herrera, JJ., concur.

Aquino, J., took no part.

Antonio, J., is on leave.

Separate Opinions

ABAD SANTOS, J., concurring:

The ordinance in question was in effect a speed trap for unwary motorists for which Urdaneta
had become notorious.

# Separate Opinions

ABAD SANTOS, J., concurring:

The ordinance in question was in effect a speed trap for unwary motorists for which Urdaneta
had become notorious.

#Footnotes

1 Record on Appeal, pp. 50-51.

2 Ibid, pp. 36-38.

3 Rollo, pp. 76-77.

4 Rollo, pp. 39-40.

5 Section 53 enumerated the rates of speed of motor vehicles for the roads
classified in the said section.

6 Enrile vs. Vinuya, 37 SCRA 381, 382 (1976).

7 Martin, Ruperto G. Public Corporations, 1977 ed., p. 140, Citing

Cooley's Municipal Corporations, p. 170, 171, and U.S. v. Abendan, 24 Phil.
165; U.S. v. Chan Tienco, 25 Phil. 89, 91.

8 Am. Jur. 2d Sec. 374, p. 406.

9 City of Basilan v. Hechanova, L-23841, August 30, 1974, 58 SCRA 711.

10 Record on Appeal, p. 45.

11 Ibid., p. 42.

12 Art. 11, Sec. 30), R.A. No. 4136 states that highways "shall mean every
public thoroughfare public boulevard, driveway, avenue, park, alley and
caution but shall not include roadway upon grounds owned by private
persons, colleges, universities or other similar institutions.

13 Vda. de Mesa, et. al. v. Mencias, etc., et. al., L-24583, October 29, 1966,
18 SCRA 533, 542.
14 Record on Appeal, p. 46.

15 Am. Jur. 2d Sec. 367, p. 394.

16 Section 35(b) starts with "(s)ubject to the provisions of the preceding

paragraph, the rates of speed of any motor vehicle shall not exceed the
following. . ."

17 Gorospe v. Penaflorida, 101 Phil. 892, citing 43 C.J.S. 768, 770; Lava v.
Gonzales, L-23048, July 31, 1964, 11 SCRA 650, 651; Ramos v. Torres, L-
23454, October 25, 1968, 25 SCRA 557, 563.

18 Ramos v. Torres, L-23454, October 25, 1968, 25 SCRA 557, 564;

Hernandez v. Albano, L-19272, January 25, 1967, 19 SCRA 95, 96.

19 Homeowners Association of the Phil., Inc. v. Municipal Board of the City of

Manila, 24 SCRA 856, 858 (1968).

20 6 MCQUILLIN 70, (3rd ed.), citing among others, Chicago v. Collins, 175
ILL. 445, 51 N.E. 907, 67 Am. St. Rep. 224; Holland v. Baltimore, 11 Md 186.
G.R. No. L-22036 April 30, 1979

TESTATE ESTATE OF THE LATE REVEREND FATHER PASCUAL RIGOR. THE PARISH
PRIEST OF THE ROMAN CATHOLIC CHURCH OF VICTORIA, TARLAC, petitioner-
appellant,
vs.
BELINA RIGOR, NESTORA RIGOR, FRANCISCA ESCOBAR DE RIGOR and JOVITA
ESCOBAR DE FAUSTO, respondents-appellees.

D. Tañedo, Jr. for appellants.

J. Palanca, Sr. for appellee.

AQUINO, J.:

This case is about the efficaciousness or enforceability of a devise of ricelands located at

Guimba, Nueva Ecija, with a total area of around forty- four hectares That devise was made
in the will of the late Father Pascual Rigor, a native of Victoria Tarlac, in favor of his nearest
male relative who would study for the priesthood.

The parish priest of Victoria, who claimed to be a trustee of the said lands, appealed to this
Court from the decision of the Court of Appeals affirming the order of the probate court
declaring that the said devise was inoperative (Rigor vs. Parish Priest of the Roman Catholic
Church of Victoria, Tarlac, CA-G.R. No. 24319-R, August 1, 1963).

The record discloses that Father Rigor, the parish priest of Pulilan, Bulacan, died on August
9, 1935, leaving a will executed on October 29, 1933 which was probated by the Court of
First Instance of Tarlac in its order of December 5, 1935. Named as devisees in the will were
the testators nearest relatives, namely, his three sisters: Florencia Rigor-Escobar, Belina
Rigor-Manaloto and Nestora Rigor-Quiambao. The testator gave a devise to his cousin,
Fortunato Gamalinda.

In addition, the will contained the following controversial bequest (paragraphing supplied to
facilitate comprehension of the testamentary provisions):

Doy y dejo como legado CUATRO (4) PARCELAS de terreno palayeros

situados en el municipiooo de Guimba de la provinciaaa de NUEVA ECIJA,
cuyo num. de CERTIFICADO DE TRANSFERENCIA DE TITULO SON; —
Titulo Num. 6530, mide 16,249 m. cuadrados de superficie Titulo Num. 6548,
mide 242,998 m. cuadrados de superficie y annual 6525, mide 62,665 m.
cuadrados de superficie; y Titulo Num. 6521, mide 119,251 m. cuadrados de
superficie; a cualquier pariente mio varon mas cercano que estudie la carrera
eclesiatica hasta ordenarse de Presbiterado o sea Sacerdote; las
condiciones de estate legado son;

(1.a) Prohibe en absoluto la venta de estos terrenos arriba situados objectos

de este legado;
 (2.a) Que el legatario pariente mio mas cercano tendra derecho de empezar
a gozar y administrar de este legado al principiar a curzar la Sagrada
Teologio, y ordenado de Sacerdote, hasta su muerte; pero que pierde el
legatario este derecho de administrar y gozar de este legado al dejar de
continuar sus estudios para ordenarse de Presbiterado (Sacerdote).

Que el legatario una vez Sacerdote ya estara obligado a celebrar cada año
VEINTE (20) Misas rezadas en sufragio de mi alma y de mis padres difuntos,
y si el actual legatario, quedase excomulgado, IPSO FACTO se le despoja
este legado, y la administracion de esto pasara a cargo del actual Parroco y
sus sucesores de la Iglecia Catolica de Victoria, Tarlac.

Y en intervalo de tiempo que no haya legatario acondicionado segun lo

arriba queda expresado, pasara la administracion de este legado a cargo del
actual Parroco Catolico y sus sucesores, de Victoria, Tarlac.

El Parroco administrador de estate legado, acumulara, anualmente todos los

productos que puede tener estate legado, ganando o sacando de los
productos anuales el CINCO (5) por ciento para su administracion, y los
derechos correspondientes de las VEINTE (20) Misas rezadas que debiera
el Parroco celebrar cada año, depositando todo lo restante de los productos
de estate legado, en un banco, a nombre de estate legado.

To implement the foregoing bequest, the administratix in 1940 submitted a project containing
the following item:

5. LEGACY OF THE CHURCH

That it be adjudicated in favor of the legacy purported to be given to the

nearest male relative who shall take the priesthood, and in the interim to be
administered by the actual Catholic Priest of the Roman Catholic Church of
Victoria, Tarlac, Philippines, or his successors, the real properties
hereinbelow indicated, to wit:

T L
i
t o
l t
e
N N
o o
.
. H
A T A
r a s
e x s.
a V
i D al
n e u
c e
a .
s
.

T 3 1 1 P
- 6 . 8 3
6 6 6 7 4
5 3 2 4 0.
3 4 0 0
0 9 0
 T 3 2 1 7,
- 4 4 8 2
6 4 . 7 9
5 5 2 3 0.
4 - 9 0 0
8 C 9 0
8

T 3 6 1 1,
- 6 . 8 8
6 7 2 7 8
5 0 6 3 0.
2 6 6 0
5 5 0

T 3 1 1 3,
- 6 1 8 5
6 6 . 7 8
5 6 9 3 0.
2 2 3 0
1 5 0
1

Total amount and value — 44.1163 P13,090.00

Judge Roman A. Cruz in his order of August 15, 1940, approving the project of partition,
directed that after payment of the obligations of the estate (including the sum of P3,132.26
due to the church of the Victoria parish) the administratrix should deliver to the devisees their
respective shares.

It may be noted that the administratrix and Judge Cruz did not bother to analyze the meaning
and implications of Father Rigor's bequest to his nearest male relative who would study for
the priesthood. Inasmuch as no nephew of the testator claimed the devise and as the
administratrix and the legal heirs believed that the parish priest of Victoria had no right to
administer the ricelands, the same were not delivered to that ecclesiastic. The testate
proceeding remained pending.

About thirteen years after the approval of the project of partition, or on February 19, 1954,
the parish priest of Victoria filed in the pending testate proceeding a petition praying for the
appointment of a new administrator (succeeding the deceased administration Florencia
Rigor), who should deliver to the church the said ricelands, and further praying that the
possessors thereof be ordered to render an accounting of the fruits. The probate court
granted the petition. A new administrator was appointed. On January 31, 1957 the parish
priest filed another petition for the delivery of the ricelands to the church as trustee.

The intestate heirs of Father Rigor countered with a petition dated March 25, 1957 praying
that the bequest be d inoperative and that they be adjudged as the persons entitled to the
said ricelands since, as admitted by the parish priest of Victoria, "no nearest male relative of"
the testator "has ever studied for the priesthood" (pp. 25 and 35, Record on Appeal). That
petition was opposed by the parish priest of Victoria.
Finding that petition to be meritorious, the lower court, through Judge Bernabe de Aquino,
declared the bequest inoperative and adjudicated the ricelands to the testator's legal heirs in
his order of June 28, 1957. The parish priest filed two motions for reconsideration.

Judge De Aquino granted the respond motion for reconsideration in his order of December
10, 1957 on the ground that the testator had a grandnephew named Edgardo G. Cunanan
(the grandson of his first cousin) who was a seminarian in the San Jose Seminary of the
Jesuit Fathers in Quezon City. The administrator was directed to deliver the ricelands to the
parish priest of Victoria as trustee.

The legal heirs appealed to the Court of Appeals. It reversed that order. It held that Father
Rigor had created a testamentary trust for his nearest male relative who would take the holy
orders but that such trust could exist only for twenty years because to enforce it beyond that
period would violate "the rule against perpetuities. It ruled that since no legatee claimed the
ricelands within twenty years after the testator's death, the same should pass to his legal
heirs, citing articles 888 and 912(2) of the old Civil Code and article 870 of the new Civil
Code.

The parish priest in this appeal contends that the Court of Appeals erred in not finding that
the testator created a public charitable trust and in not liberally construing the testamentary
provisions so as to render the trust operative and to prevent intestacy.

As refutation, the legal heirs argue that the Court of Appeals d the bequest inoperative
because no one among the testator's nearest male relatives had studied for the priesthood
and not because the trust was a private charitable trust. According to the legal heirs, that
factual finding is binding on this Court. They point out that appellant priest's change of theory
cannot be countenanced in this appeal .

In this case, as in cases involving the law of contracts and statutory construction, where the
intention of the contracting parties or of the lawmaking body is to be ascertained, the primary
issue is the determination of the testator's intention which is the law of the case (dicat testor
et erit lex. Santos vs. Manarang, 27 Phil. 209, 215; Rodriguez vs. Court of Appeals, L-28734,
March 28, 1969, 27 SCRA 546).

The will of the testator is the first and principal law in the matter of testaments. When his
intention is clearly and precisely expressed, any interpretation must be in accord with the
plain and literal meaning of his words, except when it may certainly appear that his intention
was different from that literally expressed (In re Estate of Calderon, 26 Phil. 333).

The intent of the testator is the cardinal rule in the construction of wills." It is "the life and soul
of a will It is "the first greatest rule, the sovereign guide, the polestar, in giving effect to a
will". (See Dissent of Justice Moreland in Santos vs. Manarang, 27 Phil. 209, 223, 237-8.)

One canon in the interpretation of the testamentary provisions is that "the testator's intention
is to be ascertained from the words of the wilt taking into consideration the circumstances
under which it was made", but excluding the testator's oral declarations as to his intention
(Art. 789, Civil Code of the Philippines).

To ascertain Father Rigor's intention, it may be useful to make the following re-statement of
the provisions of his will.
1. that he bequeathed the ricelands to anyone of his nearest male relatives who would
pursue an ecclesiastical career until his ordination as a priest.

2. That the devisee could not sell the ricelands.

3. That the devisee at the inception of his studies in sacred theology could enjoy and
administer the ricelands, and once ordained as a priest, he could continue enjoying and
administering the same up to the time of his death but the devisee would cease to enjoy and
administer the ricelands if he discontinued his studies for the priesthood.

4. That if the devisee became a priest, he would be obligated to celebrate every year twenty
masses with prayers for the repose of the souls of Father Rigor and his parents.

5. That if the devisee is excommunicated, he would be divested of the legacy and the
administration of the riceland would pass to the incumbent parish priest of Victoria and his
successors.

6. That during the interval of time that there is no qualified devisee as contemplated above,
the administration of the ricelands would be under the responsibility of the incumbent parish
priest of Victoria and his successors, and

7. That the parish priest-administrator of the ricelands would accumulate annually the
products thereof, obtaining or getting from the annual produce five percent thereof for his
administration and the fees corresponding to the twenty masses with prayers that the parish
priest would celebrate for each year, depositing the balance of the income of the devise in
the bank in the name of his bequest.

From the foregoing testamentary provisions, it may be deduced that the testator intended to
devise the ricelands to his nearest male relative who would become a priest, who was
forbidden to sell the ricelands, who would lose the devise if he discontinued his studies for
the priesthood, or having been ordained a priest, he was excommunicated, and who would
be obligated to say annually twenty masses with prayers for the repose of the souls of the
testator and his parents.

On the other hand, it is clear that the parish priest of Victoria would administer the ricelands
only in two situations: one, during the interval of time that no nearest male relative of the
testator was studying for the priesthood and two, in case the testator's nephew became a
priest and he was excommunicated.

What is not clear is the duration of "el intervalo de tiempo que no haya legatario
acondicionado", or how long after the testator's death would it be determined that he had a
nephew who would pursue an ecclesiastical vocation. It is that patent ambiguity that has
brought about the controversy between the parish priest of Victoria and the testator's legal
heirs.

Interwoven with that equivocal provision is the time when the nearest male relative who
would study for the priesthood should be determined. Did the testator contemplate only his
nearest male relative at the time of his death? Or did he have in mind any of his nearest
male relatives at anytime after his death?
We hold that the said bequest refers to the testator's nearest male relative living at the time
of his death and not to any indefinite time thereafter. "In order to be capacitated to inherit, the
heir, devisee or legatee must be living at the moment the succession opens, except in case
of representation, when it is proper" (Art. 1025, Civil Code).

The said testamentary provisions should be sensibly or reasonably construed. To construe

them as referring to the testator's nearest male relative at anytime after his death would
render the provisions difficult to apply and create uncertainty as to the disposition of his
estate. That could not have been his intention.

In 1935, when the testator died, his nearest leagal heirs were his three sisters or second-
degree relatives, Mrs. Escobar, Mrs. Manaloto and Mrs. Quiambao. Obviously, when the
testator specified his nearest male relative, he must have had in mind his nephew or a son of
his sister, who would be his third-degree relative, or possibly a grandnephew. But since he
could not prognosticate the exact date of his death or state with certitude what category of
nearest male relative would be living at the time of his death, he could not specify that his
nearest male relative would be his nephew or grandnephews (the son of his nephew or
niece) and so he had to use the term "nearest male relative".

It is contended by the legal heirs that the said devise was in reality intended for Ramon
Quiambao, the testator's nephew and godchild, who was the son of his sister, Mrs.
Quiambao. To prove that contention, the legal heirs presented in the lower court the affidavit
of Beatriz Gamalinda, the maternal grandmother of Edgardo Cunanan, who deposed that
after Father Rigor's death her own son, Valentin Gamalinda, Jr., did not claim the devise,
although he was studying for the priesthood at the San Carlos Seminary, because she
(Beatriz) knew that Father Rigor had intended that devise for his nearest male
relative beloning to the Rigor family (pp. 105-114, Record on Appeal).

Mrs. Gamalinda further deposed that her own grandchild, Edgardo G. Cunanan, was not the
one contemplated in Father Rigor's will and that Edgardo's father told her that he was not
consulted by the parish priest of Victoria before the latter filed his second motion for
reconsideration which was based on the ground that the testator's grandnephew, Edgardo,
was studying for the priesthood at the San Jose Seminary.

Parenthetically, it should be stated at this juncture that Edgardo ceased to be a seminarian in

1961. For that reason, the legal heirs apprised the Court of Appeals that the probate court's
order adjudicating the ricelands to the parish priest of Victoria had no more leg to stand on
(p. 84, Appellant's brief).

Of course, Mrs. Gamalinda's affidavit, which is tantamount to evidence aliunde as to the

testator's intention and which is hearsay, has no probative value. Our opinion that the said
bequest refers to the testator's nephew who was living at the time of his death, when his
succession was opened and the successional rights to his estate became vested, rests on a
judicious and unbiased reading of the terms of the will.

Had the testator intended that the "cualquier pariente mio varon mas cercano que estudie la
camera eclesiatica" would include indefinitely anyone of his nearest male relatives born after
his death, he could have so specified in his will He must have known that such a broad
provision would suspend for an unlimited period of time the efficaciousness of his bequest.

What then did the testator mean by "el intervalo de tiempo que no haya legatario
acondicionado"? The reasonable view is that he was referring to a situation whereby his
nephew living at the time of his death, who would like to become a priest, was still in grade
school or in high school or was not yet in the seminary. In that case, the parish priest of
Victoria would administer the ricelands before the nephew entered the seminary. But the
moment the testator's nephew entered the seminary, then he would be entitled to enjoy and
administer the ricelands and receive the fruits thereof. In that event, the trusteeship would be
terminated.

Following that interpretation of the will the inquiry would be whether at the time Father Rigor
died in 1935 he had a nephew who was studying for the priesthood or who had manifested
his desire to follow the ecclesiastical career. That query is categorically answered in
paragraph 4 of appellant priest's petitions of February 19, 1954 and January 31, 1957. He
unequivocally alleged therein that "not male relative of the late (Father) Pascual Rigor has
ever studied for the priesthood" (pp. 25 and 35, Record on Appeal).

Inasmuch as the testator was not survived by any nephew who became a priest, the
unavoidable conclusion is that the bequest in question was ineffectual or inoperative.
Therefore, the administration of the ricelands by the parish priest of Victoria, as envisaged in
the wilt was likewise inoperative.

The appellant in contending that a public charitable trust was constituted by the testator in is
favor assumes that he was a trustee or a substitute devisee That contention is untenable. A
reading of the testamentary provisions regarding the disputed bequest not support the view
that the parish priest of Victoria was a trustee or a substitute devisee in the event that the
testator was not survived by a nephew who became a priest.

It should be understood that the parish priest of Victoria could become a trustee only when
the testator's nephew living at the time of his death, who desired to become a priest, had not
yet entered the seminary or, having been ordained a priest, he was excommunicated. Those
two contingencies did not arise, and could not have arisen in this case because no nephew
of the testator manifested any intention to enter the seminary or ever became a priest.

The Court of Appeals correctly ruled that this case is covered by article 888 of the old Civil
Code, now article 956, which provides that if "the bequest for any reason should be
inoperative, it shall be merged into the estate, except in cases of substitution and those in
which the right of accretion exists" ("el legado ... por qualquier causa, no tenga efecto se
refundira en la masa de la herencia, fuera de los casos de sustitucion y derecho de
acrecer").

This case is also covered by article 912(2) of the old Civil Code, now article 960 (2), which
provides that legal succession takes place when the will "does not dispose of all that belongs
to the testator." There being no substitution nor accretion as to the said ricelands the same
should be distributed among the testator's legal heirs. The effect is as if the testator had
made no disposition as to the said ricelands.

The Civil Code recognizes that a person may die partly testate and partly intestate, or that
there may be mixed succession. The old rule as to the indivisibility of the testator's win is no
longer valid. Thus, if a conditional legacy does not take effect, there will be intestate
succession as to the property recovered by the said legacy (Macrohon Ong Ham vs.
Saavedra, 51 Phil. 267).

We find no merit in the appeal The Appellate Court's decision is affirmed. Costs against the
petitioner.