G.R. No.
152259 July 29, 2004 facilities including structures, buildings, shops, quarters, houses, plants and expendable
ALFREDO T. ROMUALDEZ, petitioner,
vs.
THE HONORABLE SANDIGANBAYAN (Fifth Division) and the PEOPLE of the
PHILIPPINES, respondents.
DECISION
PANGANIBAN, J.:
Repetitive motions to invalidate or summarily terminate a criminal indictment prior to
plea and trial, however they may be named or identified -- whether as a motion to quash
or motion to dismiss or by any other nomenclature -- delay the administration of justice
and unduly burden the court system. Grounds not included in the first of such repetitive
motions are generally deemed waived and can no longer be used as bases of similar
motions subsequently filed.
Section 5 of the Anti-Graft Law is constitutional. It penalizes certain presidential
relatives who "intervene, directly or indirectly, in any business, transaction, contract or
application with the Government." This provision is not vague or "impermissibly broad,"
because it can easily be understood with the use of simple statutory construction. Neither
may the constitutionality of a criminal statute such as this be challenged on the basis of
the "overbreadth" and the "void-for-vagueness" doctrines, which apply only to free-
speech cases.
The Case
Before us is a Petition for Certiorari1 under Rule 65 of the Rules of Court, seeking to
set aside the November 20, 20012 and the March 1, 20023 Resolutions of the
Sandiganbayan in Criminal Case No. 13736. The first Resolution disposed thus:
"WHEREFORE, for lack of merit, the Motion to Dismiss is hereby DENIED. The
arraignment of the accused and the pre-trial of the case shall proceed as scheduled."4
The second Resolution denied reconsideration.
The Facts
The facts of the case are narrated by the Sandiganbayan as follows:
"[The People of the Philippines], through the Presidential Commission on Good
Government (PCGG), filed on July 12, 1989 an information before [the anti-graft court]
charging the accused [with] violation of Section 5, Republic Act No. 3019,5 as amended.
The Information reads:
'That on or about and during the period from July 16, 1975 to July 29, 1975, in Metro
Manila, Philippines, and within the jurisdiction of [the Sandiganbayan], said [petitioner],
brother-in-law of Ferdinand E. Marcos, former President of the Philippines, and
therefore, related to the latter by affinity within the third civil degree, did then and there
wil[l]fully and unlawfully, and with evident bad faith, for the purpose of promoting his
self-interested [sic] and/or that of others, intervene directly or indirectly, in a contract
between the National Shipyard and Steel Corporation (NASSCO), a government-owned
and controlled corporation and the Bataan Shipyard and Engineering Company
(BASECO), a private corporation, the majority stocks of which is owned by former
President Ferdinand E. Marcos, whereby the NASSCO sold, transferred and conveyed
to the BASECO its ownership and all its titles and interests over all equipment and
and semi-expendable assets, located at the Engineer Island known as the Engineer Island
Shops including some of its equipment and machineries from Jose Panganiban,
Camarines Norte needed by BASECO in its shipbuilding and ship repair program for the
amount of P5,000,000.00.
'Contrary to law.'
"On December 27, 1996, the accused filed his first 'MOTION TO DISMISS AND TO
DEFER ARRAIGNMENT' claiming that no valid preliminary investigation was
conducted in the instant case. He asserts that if a preliminary investigation could be said
to have been conducted, the same was null and void having been undertaken by a biased
and partial investigative body.
"On January 9, 1997, [the Sandiganbayan], through the First Division, issued an order
giving the accused fifteen days to file a Motion for Reinvestigation with the Office of
the Special Prosecutor.
"[Petitioner] questioned said order before the Supreme Court via a petition for Certiorari
and Prohibition with prayer for temporary restraining order. On January 21, 1998, the
Supreme Court dismissed the petition for failure to show that [the Sandiganbayan]
committed grave abuse of discretion in issuing the assailed order.
"On November 9, 1998, the [petitioner] filed with the Office of the Special Prosecutor a
Motion to Quash.
"On September 22, 1999, x x x Special Prosecution Officer (SPO) III Victorio U.
Tabanguil, manifested that the prosecution had already concluded the reinvestigation of
the case. He recommended the dismissal of the instant case. Both the Deputy Special
Prosecutor and the Special Prosecutor approved the recommendation. However,
Ombudsman Aniano A. Desierto disagreed and directed the prosecutors to let the
[petitioner] present his evidence in Court.
"Subsequently, [petitioner] filed on October 8, 1999 his second 'MOTION TO QUASH
AND TO DEFER ARRAIGNMENT'.
"On February 9, 2000, the [Sandiganbayan] denied the motion for lack of merit.
"On June 19, 2001, [the] accused filed a 'MOTION FOR LEAVE TO FILE MOTION
TO DISMISS'. On June 29, 2001, the [Sandiganbayan] admitted the motion and admitted
the attached (third) Motion to Dismiss.
"The [Motion to Dismiss] raise[d] the following grounds:
'I. THE CONSTITUTIONAL RIGHT TO DUE PROCESS OF LAW OF
[PETITIONER] WAS VIOLATED DURING THE PRELIMINARY INVESTIGATION
STAGE IN THE FOLLOWING WAYS:
'A. NO VALID PRELIMINARY INVESTIGATION WAS CONDUCTED IN THE
INSTANT CASE; AND
'B. THE PRELIMINARY INVESTIGATION WAS CONDUCTED BY A BIASED AND
PARTIAL INVESTIGATOR
'II. THE CONSTITUTIONAL RIGHT OF [PETITIONER] TO BE INFORMED OF
THE NATURE AND CAUSE OF THE ACCUSATION AGAINST HIM WAS
VIOLATED
'III. PURSUANT TO ARTICLE VII, SECTION 17 OF THE 1973 CONSTITUTION,
[PETITIONER] IS IMMUNE FROM CRIMINAL PROSECUTION
'IV. THE CRIMINAL ACTION OR LIABILITY HAS BEEN EXTINGUISHED BY
PRESCRIPTION'"6
Ruling of the Sandiganbayan
The Sandiganbayan explained that all the grounds invoked by petitioner, except the third
one, had already been raised by him and passed upon in its previous Resolutions.7 In
resolving the third ground, the anti-graft court pointed out that Section 17 of the 1973
Constitution became effective only in 1981 when the basic law was amended. Since his
alleged illegal intervention had been committed on or about 1975, the amended provision
was inapplicable to him.8
In denying the Motion for Reconsideration filed by petitioner, the Sandiganbayan passed
upon the other grounds he had raised. It ruled that his right to a preliminary investigation
was not violated, because he had been granted a reinvestigation.9 It further held that his
right to be informed of the nature and cause of the accusation was not trampled upon,
either, inasmuch as the Information had set forth the essential elements of the offense
charged.10
Hence, this Petition.11
The Issues
In his Memorandum, petitioner assigns the following errors for our consideration:
"Whether or not the Honorable Sandiganbayan erred and gravely abused its discretion
amounting to lack of, or in excess of jurisdiction –
I. In not dismissing and/or quashing Criminal Case No. 13736 despite clear and
incontrovertible evidence that:
A. Section 5 of Republic Act No. 3019 is unconstitutional because its vagueness violates
the due process right of an individual to be informed of the nature and the cause of the
accusation against him;
B. Section 5 of Republic Act No. 3019 is unconstitutional because it violates the due
process right of an individual to be presumed innocent until the contrary is proved;
C. The constitutional right of petitioner x x x to be informed of the nature and the cause
of the accusation against him was violated;
D. The constitutional right to due process of law of petitioner x x x was violated during
the preliminary investigation stage in the following ways:
[i] No valid preliminary investigation was con-ducted for Criminal Case No. 13736; and
[ii] The preliminary investigation was conducted by a biased and partial investigator.
E. The criminal action or liability has been extinguished by prescription; and
F. Pursuant to Article VII, Section 17 of the 1973 Constitution, petitioner x x x is immune
from criminal prosecution.
And
II. In light of the foregoing, in denying petitioner['s] x x x right to equal protection of the
laws."12
Simply stated, the issues are as follows: (1) whether Section 5 of Republic Act 3019 is
unconstitutional; (2) whether the Information is vague; (3) whether there was a valid
preliminary investigation; (4) whether the criminal action or liability has been
extinguished by prescription; and (5) whether petitioner is immune from criminal
prosecution under then Section 17 of Article VII of the 1973 Constitution.
The Court's Ruling
The Petition has no merit.
First Issue:
Constitutionality of Section 5,
Republic Act 3019
Petitioner challenged the constitutionality of Section 5 of RA 3019 for the first time in
the Sandiganbayan through a Supplemental Motion to Dismiss. Attached to his
December 7, 2001 Motion for Reconsideration of the Order denying his Motion to
Dismiss was this Supplemental Motion which was, in effect, his third motion to
quash.13 We note that the Petition for Certiorari before us challenges the denial of his
original, not his Supplemental, Motion to Dismiss.
Upon the denial of his original Motion to Quash on February 9, 2000, petitioner could
have filed a motion for reconsideration of the denial. Had reconsideration been turned
down, the next proper remedy would have been either (1) a petition for certiorari14 -- if
there was grave abuse of discretion -- which should be filed within 60 days from notice
of the assailed order;15 or (2) to proceed to trial without prejudice to his right, if final
judgment is rendered against him, to raise the same questions before the proper appellate
court.16 But instead of availing himself of these remedies, he filed a "Motion to Dismiss"
on June 19, 2001.
Impropriety of
Repetitive Motions
There is no substantial distinction between a "motion to quash" and a "motion to
dismiss." Both pray for an identical relief, which is the dismissal of the case. Such
motions are employed to raise preliminary objections, so as to avoid the necessity of
proceeding to trial. A motion to quash is generally used in criminal proceedings to annul
a defective indictment. A motion to dismiss, the nomenclature ordinarily used in civil
proceedings, is aimed at summarily defeating a complaint. Thus, our Rules of Court use
the term "motion to quash" in criminal,17 and "motion to dismiss" in civil,
proceedings.18
In the present case, however, both the "Motion to Quash" and the "Motion to Dismiss"
are anchored on basically the same grounds and pray for the same relief. The hairsplitting
distinction posited by petitioner does not really make a difference.
By filing a Motion to Dismiss, petitioner submitted in effect a prohibited second motion
to quash. A party is not permitted to raise issues, whether similar or different, by
installment. The Rules abhor repetitive motions. Otherwise, there would be no end to
preliminary objections, and trial would never commence. A second motion to quash
delays the administration of justice and unduly burdens the courts. Moreover, Rule 117
provides that grounds not raised in the first motion to quash are generally deemed
waived.19 Petitioner's "Motion to Dismiss" violates this rule.
Constitutionality of
the Challenged Provision
If only for the foregoing procedural lapses, the Petition deserves to be dismissed outright.
However, given the importance of this case in curtailing graft and corruption, the Court
will nevertheless address the other issues on their merit. Petitioner challenges the validity
of Section 5 of Republic Act 3019, a penal statute, on the ground that the act constituting
the offense is allegedly vague and "impermissibly broad."
It is best to stress at the outset that the overbreadth20 and the vagueness21 doctrines have
special application only to free-speech cases. They are not appropriate for testing the
validity of penal statutes. Mr. Justice Vicente V. Mendoza explained the reason as
follows:
"A facial challenge is allowed to be made to a vague statute and to one which is
overbroad because of possible 'chilling effect' upon protected speech. The theory is that
'[w]hen statutes regulate or proscribe speech and no readily apparent construction
suggests itself as a vehicle for rehabilitating the statutes in a single prosecution, the
transcendent value to all society of constitutionally protected expression is deemed to
justify allowing attacks on overly broad statutes with no requirement that the person
making the attack demonstrate that his own conduct could not be regulated by a statute
drawn with narrow specificity.' The possible harm to society in permitting some
unprotected speech to go unpunished is outweighed by the possibility that the protected
speech of others may be deterred and perceived grievances left to fester because of
possible inhibitory effects of overly broad statutes.
This rationale does not apply to penal statutes. Criminal statutes have general
in terrorem effect resulting from their very existence, and, if facial challenge is allowed
for this reason alone, the State may well be prevented from enacting laws against socially
harmful conduct. In the area of criminal law, the law cannot take chances as in the area
of free speech.
xxxxxxxxx
In sum, the doctrines of strict scrutiny, overbreadth, and vagueness are analytical tools
developed for testing "on their faces" statutes in free speech cases or, as they are called
in American law, First Amendment cases. They cannot be made to do service when what
is involved is a criminal statute. With respect to such statute, the established rule is that
'one to whom application of a statute is constitutional will not be heard to attack the
statute on the ground that impliedly it might also be taken as applying to other persons
or other situations in which its application might be unconstitutional.' As has been
pointed out, 'vagueness challenges in the First Amendment context, like overbreadth
challenges typically produce facial invalidation, while statutes found vague as a matter
of due process typically are invalidated [only] 'as applied' to a particular
defendant.'"22 (underscoring supplied)
"To this date, the Court has not declared any penal law unconstitutional on the ground
of ambiguity."23 While mentioned in passing in some cases, the void-for-vagueness
concept has yet to find direct application in our jurisdiction. In Yu Cong Eng v.
Trinidad,24 the Bookkeeping Act was found unconstitutional because it violated the
equal protection clause, not because it was vague. Adiong v. Comelec25 decreed as void
a mere Comelec Resolution, not a statute. Finally, Santiago v. Comelec26 held that a
portion of RA 6735 was unconstitutional because of undue delegation of legislative
powers, not because of vagueness.
Indeed, an "on-its-face" invalidation of criminal statutes would result in a mass acquittal
of parties whose cases may not have even reached the courts. Such invalidation would
constitute a departure from the usual requirement of "actual case and controversy" and
permit decisions to be made in a sterile abstract context having no factual concreteness.
In Younger v. Harris, this evil was aptly pointed out by the U.S. Supreme Court in these
words:27
"[T]he task of analyzing a proposed statute, pinpointing its deficiencies, and requiring
correction of these deficiencies before the statute is put into effect, is rarely if ever an
appropriate task for the judiciary. The combination of the relative remoteness of the
controversy, the impact on the legislative process of the relief sought, and above all the
speculative and amorphous nature of the required line-by-line analysis of detailed
statutes, x x x ordinarily results in a kind of case that is wholly unsatisfactory for deciding
constitutional questions, whichever way they might be decided."
For this reason, generally disfavored is an on-its-face invalidation of statutes, described
as a "manifestly strong medicine" to be employed "sparingly and only as a last resort."
In determining the constitutionality of a statute, therefore, its provisions that have
allegedly been violated must be examined in the light of the conduct with which the
defendant has been charged.28
As conduct -- not speech -- is its object, the challenged provision must be examined only
"as applied" to the defendant, herein petitioner, and should not be declared
unconstitutional for overbreadth or vagueness.
The questioned provision reads as follows:
"Section 5. Prohibition on certain relatives. — It shall be unlawful for the spouse or for
any relative, by consanguinity or affinity, within the third civil degree, of the President
of the Philippines, the Vice-President of the Philippines, the President of the Senate, or
the Speaker of the House of Representatives, to intervene, directly or indirectly, in any
business, transaction, contract or application with the Government: Provided, That this
section shall not apply to any person who, prior to the assumption of office of any of the
above officials to whom he is related, has been already dealing with the Government
along the same line of business, nor to any transaction, contract or application already
existing or pending at the time of such assumption of public office, nor to any application
filed by him the approval of which is not discretionary on the part of the official or
officials concerned but depends upon compliance with requisites provided by law, or
rules or regulations issued pursuant to law, nor to any act lawfully performed in an
official capacity or in the exercise of a profession."
Petitioner also claims that the phrase "to intervene directly or indirectly, in any business,
transaction, contract or application with the Government" is vague and violates his right
to be informed of the cause and nature of the accusation against him.29 He further
complains that the provision does not specify what acts are punishable under the
term intervene, and thus transgresses his right to be presumed innocent.30 We disagree.
Every statute is presumed valid.31 On the party challenging its validity weighs heavily
the onerous task of rebutting this presumption.32 Any reasonable doubt about the
validity of the law should be resolved in favor of its constitutionality.33 To doubt is to
sustain, as tersely put by Justice George Malcolm. In Garcia v. Executive
Secretary,34 the rationale for the presumption of constitutionality was explained by this
Court thus:
"The policy of the courts is to avoid ruling on constitutional questions and to presume
that the acts of the political departments are valid in the absence of a clear and
unmistakable showing to the contrary. To doubt is to sustain. This presumption is based
on the doctrine of separation of powers which enjoins upon each department a becoming
respect for the acts of the other departments. The theory is that as the joint act of
Congress and the President of the Philippines, a law has been carefully studied and
determined to be in accordance with the fundamental law before it was finally
enacted."35
In the instant case, petitioner has miserably failed to overcome such presumption. This
Court has previously laid down the test for determining whether a statute is vague, as
follows:
"x x x [A] statute establishing a criminal offense must define the offense with sufficient
definiteness that persons of ordinary intelligence can understand what conduct is
prohibited by the statute. It can only be invoked against that species of legislation that is
utterly vague on its face, i.e., that which cannot be clarified either by a saving clause or
by construction.
"A statute or act may be said to be vague when it lacks comprehensible standards that
men of common intelligence must necessarily guess at its meaning and differ in its
application. In such instance, the statute is repugnant to the Constitution in two (2)
respects - it violates due process for failure to accord persons, especially the parties
targeted by it, fair notice of what conduct to avoid; and, it leaves law enforcers unbridled
discretion in carrying out its provisions and becomes an arbitrary flexing of the
Government muscle.36 But the doctrine does not apply as against legislations that are
merely couched in imprecise language but which nonetheless specify a standard though
defectively phrased; or to those that are apparently ambiguous yet fairly applicable to
certain types of activities. The first may be 'saved' by proper construction, while no
challenge may be mounted as against the second whenever directed against such
activities.37 With more reason, the doctrine cannot be invoked where the assailed statute
is clear and free from ambiguity, as in this case.
"The test in determining whether a criminal statute is void for uncertainty is whether the
language conveys a sufficiently definite warning as to the proscribed conduct when
measured by common understanding and practice.38 It must be stressed, however, that
the 'vagueness' doctrine merely requires a reasonable degree of certainty for the statute
to be upheld - not absolute precision or mathematical exactitude, as petitioner seems to
suggest. Flexibility, rather than meticulous specificity, is permissible as long as the metes
and bounds of the statute are clearly delineated. An act will not be held invalid merely
because it might have been more explicit in its wordings or detailed in its provisions,
especially where, because of the nature of the act, it would be impossible to provide all
the details in advance as in all other statutes."39
A simpler test was decreed in Dans v. People,40 in which the Court said that there was
nothing vague about a penal law that adequately answered the basic query "What is the
violation?"41 Anything beyond -- the hows and the whys -- are evidentiary matters that
the law itself cannot possibly disclose, in view of the uniqueness of every case.42
The question "What is the violation?" is sufficiently answered by Section 5 of RA 3019,
as follows:
1. The offender is a spouse or any relative by consanguinity or affinity within the third
civil degree of the President of the Philippines, the Vice-President of the Philippines, the
President of the Senate, or the Speaker of the House of Representatives; and
2. The offender intervened directly or indirectly in any business, transaction, contract or
application with the government.
Applicability of
Statutory Construction
As to petitioner's claim that the term intervene is vague, this Court agrees with the Office
of the Solicitor General that the word can easily be understood through simple statutory
construction. The absence of a statutory definition of a term used in a statute will not
render the law "void for vagueness," if the meaning can be determined through the
judicial function of construction.43 Elementary is the principle that words should be
construed in their ordinary and usual meaning.
"x x x. A statute is not rendered uncertain and void merely because general terms are
used therein, or because of the employment of terms without defining them;44 much less
do we have to define every word we use. Besides, there is no positive constitutional or
statutory command requiring the legislature to define each and every word in an
enactment. Congress is not restricted in the form of expression of its will, and its inability
to so define the words employed in a statute will not necessarily result in the vagueness
or ambiguity of the law so long as the legislative will is clear, or at least, can be gathered
from the whole act x x x.
"x x x [I]t is a well-settled principle of legal hermeneutics that words of a statute will be
interpreted in their natural, plain and ordinary acceptation and signification,45 unless it
is evident that the legislature intended a technical or special legal meaning to those
words.46 The intention of the lawmakers - who are, ordinarily, untrained philologists
and lexicographers - to use statutory phraseology in such a manner is always
presumed."47
The term intervene should therefore be understood in its ordinary acceptation, which is
to "to come between."48 Criminally liable is anyone covered in the enumeration of
Section 5 of RA 3019 -- any person who intervenes in any manner in any business,
transaction, contract or application with the government. As we have explained, it is
impossible for the law to provide in advance details of how such acts of intervention
could be performed. But the courts may pass upon those details once trial is concluded.
Thus, the alleged vagueness of intervene is not a ground to quash the information prior
to the commencement of the trial.
In sum, the Court holds that the challenged provision is not vague, and that in any event,
the "overbreath" and "void for vagueness" doctrines are not applicable to this case.
Second Issue:
Allegedly Vague Information
Other than arguing on the alleged intrinsic vagueness of intervene, petitioner further
contends that the Information itself is also unconstitutionally vague, because it does not
specify the acts of intervention that he supposedly performed.49 Again, we disagree.
When allegations in the information are vague or indefinite, the remedy of the accused
is not a motion to quash, but a motion for a bill of particulars.50 The pertinent provision
in the Rules of Court is Section 9 of Rule 116, which we quote:
"Section 9. Bill of particulars. -- The accused may, before arraignment, move for a bill
of particulars to enable him properly to plead and prepare for trial. The motion shall
specify the alleged defects of the complaint or information and the details desired."
The rule merely requires the information to describe the offense with sufficient
particularity as to apprise the accused of what they are being charged with and to enable
the court to pronounce judgment. 51 The particularity must be such that persons of
ordinary intelligence may immediately know what is meant by the information.52
While it is fundamental that every element of the offense must be alleged in the
information,53 matters of evidence -- as distinguished from the facts essential to the
nature of the offense -- need not be averred.54 Whatever facts and circumstances must
necessarily be alleged are to be determined by reference to the definition and the essential
elements of the specific crimes.55
In the instant case, a cursory reading of the Information shows that the elements of a
violation of Section 5 of RA 3019 have been stated sufficiently. Likewise, the allegations
describe the offense committed by petitioner with such particularity as to enable him to
prepare an intelligent defense. Details of the acts he committed are evidentiary matters
that need not be alleged in the Information.
Third Issue:
Preliminary Investigation
Clearly, petitioner already brought the issue of lack of preliminary investigation when
he questioned before this Court in GR No. 128317 the Sandiganbayan's Order giving
him 15 days to file a Motion for Reinvestigation with the Office of the Special
Prosecutor.56 Citing Cojuangco v. Presidential Commission on Good Government,57 he
undauntedly averred that he was deprived of his right to a preliminary investigation,
because the PCGG acted both as complainant and as investigator.58
In the case cited above, this Court declared that while PCGG had the power to conduct
a preliminary investigation, the latter could not do so with the "cold neutrality of an
impartial judge" in cases in which it was the agency that had gathered evidence and
subsequently filed the complaint.59 On that basis, this Court nullified the preliminary
investigation conducted by PCGG and directed the transmittal of the records to the
Ombudsman for appropriate action.
It is readily apparent that Cojuangco does not support the quashal of the Information
against herein petitioner. True, the PCGG initiated the present Complaint against him;
hence, it could not properly conduct the preliminary investigation. However, he was
accorded his rights -- the Sandiganbayan suspended the trial and afforded him a
reinvestigation by the Ombudsman. The procedure outlined in Cojuangco was thus
followed.
The Sandiganbayan's actions are in accord also with Raro v. Sandiganbayan,60 which
held that the failure to conduct a valid preliminary investigation would not warrant the
quashal of an information. If the information has already been filed, the proper procedure
is for the Sandiganbayan to hold the trial in abeyance while the preliminary investigation
is being conducted or completed.61
Fourth Issue:
Prescription
The issue of prescription was the principal basis of the Motion to Quash filed by
petitioner with the Sandiganbayan on October 8, 1999.62 Such issue should be
disregarded at this stage, since he failed to challenge its ruling debunking his Motion
within the 60-day period for the filing of a petition for certiorari. A party may not
circumvent this rule by filing a subsequent motion that raises the same issue and the
same arguments.
Furthermore, it is easy to see why this argument being raised by petitioner is utterly
unmeritorious. He points out that according to the Information, the offense was
committed "during the period from July 16, 1975 to July 29, 1975." He argues that when
the Information was filed on July 12, 1989,63 prescription had already set in, because
the prescriptive period for a violation of Republic Act No. 3019 is only ten (10) years
from the time the offense was allegedly committed. The increase of this prescriptive
period to fifteen (15) years took effect only on March 16, 1982, upon the enactment of
Batas Pambansa Blg. 195.64
Act No. 3326, as amended,65 governs the prescription of offenses penalized by special
laws. Its pertinent provision reads:
"Sec. 2. Prescription shall begin to run from the day of the commission of the violation
of the law, and if the same not be known at the time, from the discovery thereof and the
institution of judicial proceedings for its investigation and punishment.
"The prescription shall be interrupted when proceedings are instituted against the guilty
person, and shall begin to run again if the proceedings are dismissed for reasons not
constituting jeopardy."
Consistent with the provision quoted above, this Court has previously reckoned the
prescriptive period of cases involving RA 3019 (committed prior to the February 1986
EDSA Revolution) from the discovery of the violation.66 In Republic v. Desierto, the
Court explained:
"This issue confronted this Court anew, albeit in a larger scale, in Presidential Ad Hoc
Fact-Finding Committee on Behest Loans v. Desierto. In the said recent case, the Board
of Directors of the Philippine Seeds, Inc. and Development Bank of the Philippines were
charged with violation of paragraphs (e) and (g) of Section 3 of RA No. 3019, by the
Presidential Ad Hoc Fact-Finding Committee on Behest Loans, created by then President
Fidel V. Ramos to investigate and to recover the so-called 'Behest Loans', where the
Philippine Government guaranteed several foreign loans to corporations and entities
connected with the former President Marcos. x x x In holding that the case had not yet
prescribed, this Court ruled that:
'In the present case, it was well-nigh impossible for the State, the aggrieved party, to
have known the violations of RA No. 3019 at the time the questioned transactions were
made because, as alleged, the public officials concerned connived or conspired with the
'beneficiaries of the loans.' Thus, we agree with the COMMITTEE that the prescriptive
period for the offenses with which the respondents in OMB-0-96-0968 were
charged should be computed from the discovery of the commission thereof and not from
the day of such commission.
xxx xxx xxx
'People v. Duque is more in point, and what was stated there stands reiteration: In the
nature of things, acts made criminal by special laws are frequently not immoral or
obviously criminal in themselves; for this reason, the applicable statute requires that if
the violation of the special law is not known at the time, the prescription begins to run
only from the discovery thereof, i.e., discovery of the unlawful nature of the constitutive
act or acts.' (Italics supplied)
"There are striking parallelisms between the said Behest Loans Case and the present one
which lead us to apply the ruling of the former to the latter. First, both cases arose out
of seemingly innocent business transactions; second, both were 'discovered' only after
the government created bodies to investigate these anomalous transactions; third, both
involve prosecutions for violations of RA No. 3019; and, fourth, in both cases, it was
sufficiently raised in the pleadings that the respondents conspired and connived with one
another in order to keep the alleged violations hidden from public scrutiny.
"This Court's pronouncement in the case of Domingo v. Sandiganbayan is quite relevant
and instructive as to the date when the discovery of the offense should be reckoned, thus:
'In the present case, it was well-nigh impossible for the government, the aggrieved party,
to have known the violations committed at the time the questioned transactions were
made because both parties to the transactions were allegedly in conspiracy to perpetuate
fraud against the government. The alleged anomalous transactions could only have been
discovered after the February 1986 Revolution when one of the original respondents,
then President Ferdinand Marcos, was ousted from office. Prior to said date, no person
would have dared to question the legality or propriety of those transactions. Hence, the
counting of the prescriptive period would commence from the date of discovery of the
offense, which could have been between February 1986 after the EDSA Revolution and
26 May 1987 when the initiatory complaint was filed.'"67
The above pronouncement is squarely applicable to the present case. The general rule
that prescription shall begin to run from the day of the commission of the crime cannot
apply to the present case. It is not legally prudent to charge the State, the aggrieved party,
with knowledge of the violation of RA 3019 at the time the alleged intervention was
made. The accused is the late President Ferdinand E. Marcos' brother-in-law. He was
charged with intervening in a sale involving a private corporation, the majority stocks of
which was allegedly owned by President Marcos.
Prior to February 1986, no person was expected to have seriously dared question the
legality of the sale or would even have thought of investigating petitioner's alleged
involvement in the transaction. It was only after the creation68 of PCGG69 and its
exhaustive investigations that the alleged crime was discovered. This led to the initiation
on November 29, 1988 of a Complaint against former President Marcos and petitioner
for violation of the Anti-Graft and Corrupt Practices Act. Consequently, the filing of the
Information on July 12, 1989 was well within the prescriptive period of ten years from
the discovery of the offense.
Fifth Issue
Immunity from Prosecution
Petitioner argues that he enjoys derivative immunity, because he allegedly served as a
high-ranking naval officer -- specifically, as naval aide-de-camp -- of former President
Marcos.70 He relies on Section 17 of Article VII of the 1973 Constitution, as amended,
which we quote:
"The President shall be immune from suit during his tenure. Thereafter, no suit
whatsoever shall lie for official acts done by him or by others pursuant to his specific
orders during his tenure.
"x x x xxx x x x"
As the Sandiganbayan aptly pointed out, the above provision is not applicable to
petitioner because the immunity amendment became effective only in 1981 while the
alleged crime happened in 1975.
In Estrada v. Desierto,71 this Court exhaustively traced the origin of executive
immunity in order to determine the extent of its applicability. We explained therein that
executive immunity applied only during the incumbency of a President. It could not be
used to shield a non-sitting President from prosecution for alleged criminal acts done
while sitting in office. The reasoning of petitioner must therefore fail, since he derives
his immunity from one who is no longer sitting as President. Verily, the felonious acts of
public officials and their close relatives "are not acts of the State, and the officer who
acts illegally is not acting as such but stands on the same footing as any other trespasser."
In sum, petitioner utterly fails to show that the Sandiganbayan gravely abused its
discretion in issuing the assailed Resolutions.72 On the contrary, it acted prudently, in
accordance with law and jurisprudence.
WHEREFORE, the Petition is DISMISSED, and the questioned Resolutions of the
Sandiganbayan AFFIRMED. Costs against petitioner.
SO ORDERED.
Davide, Jr., C.J., Quisumbing, Carpio, Austria-Martinez, Carpio-Morales, Callejo, Sr.,
and Azcuna, JJ., concur.
Puno, Ynares-Santiago, and Sandoval-Gutierrez, JJ., in the result.
Corona, J., on leave.
Tinga, J., in the result. Please see separate opinion.
Chico-Nazario, J., no part. Ponente of assailed SB Resolutions.
x-------------------------------------------------------------------x
SEPARATE OPINION
TINGA, J.:
I concur in the result of the ponencia and the proposition that Section 5 of the Anti-
Plunder Law is constitutional. The validity of the provision has been passed upon by the
Court before in Estrada v. Sandiganbayan.1 I also agree with the ponencia's reiteration
of the ruling in Estrada that Section 5 is receptive to the basic principle in statutory
construction that words should be construed in their ordinary and usual meaning. 2
However, with all due respect, I raise serious objections to the ponencia's holding that
the so-called "void for vagueness" doctrine has special application only to free speech
cases,3 and the undeclared proposition that penal
laws may not be stricken down on the ground of ambiguity. 4 I am aware that the
assertions rely upon the separate opinions of the herein ponente5 and Mr. Justice Vicente
Mendoza6 in Estrada. I am also aware that the critical portion of Mr. Justice Mendoza's
separate opinion in Estrada was cited with approval by Mr. Justice
Bellosillo's ponencia therein.7
The incontrovertible reality though is that the majority's pronouncement in Estrada that
penal statutes cannot be challenged on vagueness grounds did not form part of the ratio
decidendi. The ratio, in the words of Justice Bellosillo, was: "as it is written, the Plunder
Law contains ascertainable standards and well-defined parameters which would enable
the accused to determine the nature of his violation,"8 and thus the law does not suffer
from unconstitutionality. The discussion on the vagueness aspect was not decisive of the
main issue and, therefore, clearly obiter dictum. I submit that it is erroneous to resolve
the present petition on the basis of that dictum in Estrada.
As the obiter dictum in Estrada is needlessly made a ratio in the present case,
the ponencia herein has even unwittingly elevated to doctrinal level the proposition that
the constitutionality of penal laws cannot be challenged on the ground of vagueness. I
humbly submit that the stance is flawed and contrary to fundamental principles of due
process.
The Bill of Rights occupies a position of primacy in the fundamental law.9 It is thus
sacrosanct in this jurisdiction that no person shall be deprived of life, liberty or property
without due process of law.10
A challenge to a penal statute premised on the argument that the law is vague is a proper
invocation of the due process clause. A statute that lacks comprehensible standards that
men of common intelligence must necessarily guess at its meaning and differ as to its
application violates the due process clause, for failure to accord persons fair notice of
the conduct to avoid.11 As held by the Court in People v. Dela Piedra:12
Due process requires that the terms of a penal statute must be sufficiently explicit to
inform those who are subject to it what conduct on their part will render them liable to
its penalties. A criminal statute that "fails to give a person of ordinary intelligence fair
notice that his contemplated conduct is forbidden by the statute," or is so indefinite that
"it encourages arbitrary and erratic arrests and convictions," is void for vagueness. The
constitutional vice in a vague or indefinite statute is the injustice to the accused in placing
him on trial for an offense, the nature of which he is given no fair warning. 13
It should also be reckoned that the Bill of Rights likewise guarantees that no person shall
be held to answer for a criminal offense without due process of law, 14 and that the
accused enjoys the right to be informed of the nature and cause of the accusation against
him or her.15 The Bill of Rights ensures the fullest measure of protection to an accused.
If a particular mode of constitutional challenge, such as one predicated on the "void for
vagueness" doctrine, is available to an ordinary person deprived of property or means of
expression, then more so should it be accessible to one who is in jeopardy of being
deprived of liberty or of life.16
"Vagueness" and "Overbreadth" Are Distinct Concepts
A fundamental flaw, to my mind, in the analysis employed by the ponencia and some of
the separate opinions in Estrada is the notion that the "vagueness" and "overbreadth"
doctrines are the same and should be accorded similar treatment. This is erroneous.
Mr. Justice Kapunan, in his dissenting opinion in Estrada, offers a correct distinction
between "vagueness" and "overbreadth":
A view has been proferred that "vagueness and overbreadth doctrines are not applicable
to penal laws." These two concepts, while related, are distinct from each other. On one
hand, the doctrine of overbreadth applies generally to statutes that infringe upon
freedom of speech. On the other hand, the "void-for-vagueness" doctrine applies to
criminal laws, not merely those that regulate speech or other fundamental
constitutional right. (not merely those that regulate speech or other fundamental
constitutional rights.) The fact that a particular criminal statute does not infringe upon
free speech does not mean that a facial challenge to the statute on vagueness grounds
cannot succeed.17
This view should be sustained, especially in light of the fact that the "void for vagueness"
doctrine has long been sanctioned as a means to invalidate penal statutes.
"Void For Vagueness" Invalidation of Penal Statutes has Long-Standing Jurisprudential
History
As early as 1926, the United States Supreme Court held in Connally v. General
Construction Co., thus: 18
That the terms of a penal statute creating a new offense must be sufficiently explicit to
inform those who are subject to it what conduct on their part will render them liable to
its penalties is a well- recognized requirement, consonant alike with ordinary notions of
fair play and the settled rules of law; and a statute which either forbids or requires the
doing of an act in terms so vague that men of common intelligence must necessarily
guess at its meaning and differ as to its application violates the first essential of due
process of law.
Thus in Connally, a statute prescribing penalties for violation of an eight-hour workday
law was voided, presenting as it did, a "double uncertainty, fatal to its validity as a
criminal statute."19
In Lanzetta v. State of New Jersey,20 a challenge was posed to a statute defining a
"gangster" and prescribing appropriate penalties, for being void for vagueness. The U.S.
Supreme Court ruled that the definition of a "gang" under the statute was vague, and the
statute void for vagueness. It was of no moment that the information against the accused
described the offense with particularity.
If on its face the challenged provision is repugnant to the due process clause,
specification of details of the offense intended to be charged would not serve to validate
it. (United States v. Reese, 92 U.S. 214, 221; Czarra v. Board of Medical Supervisors,
25 App.D.C. 443, 453.) It is the statute, not the accusation under it, that prescribes
the rule to govern conduct and warns against transgression. (See Stromberg v.
California, 283 U.S. 359, 368 , 51 S.Ct. 532, 535, 73 A.L. R. 1484; Lovell v. Griffin, 303
U.S. 444 , 58 S.Ct. 666.) No one may be required at peril of life, liberty or property to
speculate as to the meaning of penal statutes. All are entitled to be informed as to what
the State commands or forbids.21 (Emphasis supplied)
In Bouie v. City of Columbia,22 civil rights protesters were charged with violating a
criminal trespass statute proscribing entry upon the lands of another after notice
prohibiting such entry. A state court construed the statute as applicable to the act of
remaining on the premises of another after receiving notice to leave. The U.S. Supreme
Court reversed, applying again the "void for vagueness" doctrine. Said Court admitted
that "typical applications of the principle, the uncertainty as to the statute's prohibition
resulted from vague or overbroad language in the statute itself."23 Yet the Court noted
that "[t]here can be no doubt that a deprivation of the right of fair warning can result not
only from vague statutory language but also from an unforeseeable and retroactive
judicial expansion of narrow and precise statutory language."24 Accordingly, the Court
overturned the convictions, holding that "the crime for which [they] were convicted was
not enumerated in the statute at the time of their conduct," thus denying the accused due
process of law.25
In Papachristou v. City of Jacksonville,26 a statute penalizing vagrancy was voided by
the U.S. Supreme Court, again for being vague:
This ordinance is void for vagueness, both in the sense that it "fails to give a person of
ordinary intelligence fair notice that his contemplated conduct is forbidden by the
statute," (United States v. Harriss, 347 U.S. 612, 617), and because it encourages
arbitrary and erratic arrests and convictions (Thornhill v. Alabama, 310 U.S. 88;
Herndon v. Lowry, 301 U.S. 242).27
Kolender v. Lawson28 involves another affirmation of the well-established doctrine.
There, the US Supreme Court invalidated a loitering statute requiring a loiterer to
produce credible and reliable identification when requested by a peace officer. It
elucidated:
Although the doctrine focuses on both actual notice to citizens and arbitrary
enforcement, we have recognized recently that the more important aspect of the
vagueness doctrine "is not actual notice, but the other principal element of the doctrine-
the requirement that a legislature establish minimal guidelines to govern law
enforcements. Where the legislature fails to provide such minimal guidelines, a criminal
statute may permit "a standardless sweep [that] allows policemen, prosecutors and juries
to pursue their personal predilections.29
In the fairly recent case of City of Chicago v. Morales,30 the U.S. Supreme Court
affirmed a lower court ruling invalidating as void for vagueness an ordinance prohibiting
"criminal street gang members" from loitering in public places, as well as the conviction
based on the invalidated ordinance. The US Court again asserted:
For it is clear that the vagueness of this enactment makes a facial challenge appropriate.
This is not an ordinance that "simply regulates business behavior and contains a scienter
requirement." (See Hoffman Estates v. Flipside, Hoffman Estates, Inc., 455 U. S. 489,
499 (1982)). It is a criminal law that contains no mens rea requirement
(see Colautti v. Franklin , 439 U. S. 379, 395 (1979)), and infringes on constitutionally
protected rights (see id. , at 391). When vagueness permeates the text of such a law, it is
subject to facial attack.
Vagueness may invalidate a criminal law for either of two independent reasons. First, it
may fail to provide the kind of notice that will enable ordinary people to understand what
conduct it prohibits; second, it may authorize and even encourage arbitrary and
discriminatory enforcement. (See Kolender v. Lawson, 461 U. S., at 357).31
Given the wealth of jurisprudence invalidating penal statutes for suffering from
vagueness, it is mystifying why the notion that the doctrine applies only to "free-speech"
cases has gained a foothold in this Court. It might be argued that the above-cited cases
are foreign jurisprudence, inapplicable to this jurisdiction. Yet it is submitted that the
rule is applicable here, not because of its repeated affirmation by American courts, but
because such rule is lucidly consistent with our own fundamental notions of due process,
as enunciated in our own Constitution.
What then is the standard of due process which must exist both as a procedural and as
substantive requisite to free the challenged ordinance, or any government action for that
matter, from the imputation of legal infirmity; sufficient to spell its doom? It is
responsiveness to the supremacy of reason, obedience to the dictates of justice.
Negatively put, arbitrariness is ruled out and unfairness avoided. To satisfy the due
process requirement, official action, to paraphrase Cardozo, must not outrun the bounds
of reasons and result in sheer oppression. Due process is thus hostile to any official action
marred by lack of reasonableness. Correctly has it been identified as freedom from
arbitrariness. It is the embodiment of the sporting idea of fair play. It exacts fealty "to
those strivings for justice" and judges the act of officialdom of whatever branch" in the
light of reason drawn from considerations of fairness that reflect [democratic] traditions
of legal and political thought." It is not a narrow or "technical conception with fixed
content unrelated to time, place and circumstances," decisions based on such a clause
requiring a "close and perceptive inquiry into fundamental principles of our society."32
The dissent of Justice White, joined by Justice Rehnquist, in Kolender v. Lawson finds
some kinship with Mr. Justice Mendoza's views in Estrada, insofar as they point out a
distinction between the "vagueness" doctrine, as applied to criminal statutes, on one
hand, and as applied to US First Amendment cases, on the other.
The usual rule is that the alleged vagueness of a criminal statute must be judged in light
of the conduct that is charged to be violative of the statute. If the actor is given sufficient
notice that his conduct is within the proscription of the statute, his conviction is not
vulnerable on vagueness grounds, even if as applied to other conduct, the law would be
unconstitutionally vague. None of our cases "suggests that one who has received fair
warning of the criminality of his own conduct from the statute in question is nonetheless
entitled to attack it because the language would not give similar fair warning ;with
respect to other conduct which might be within its broad and literal ambit. One to whose
conduct a statute clearly applies may not successfully challenge it for vagueness." The
correlative rule is that a criminal statute is not unconstitutionally vague on its face unless
it is "impermissibly vague in all of its applications."
These general rules are equally applicable to cases where First Amendment or other
"fundamental" interests are involved. The Court has held that in such circumstances
"more precision in drafting may be required because of the vagueness doctrine in the
case of regulation of expression, a "greater degree of specificity" is demanded than in
other contexts. But the difference in such cases "relates to how strict a test of vagueness
shall be applied in judging a particular criminal statute." It does not permit the challenger
of the statute to confuse vagueness and overbreadth by attacking the enactment as being
vague as applied to conduct other than his own. Of course, if his own actions are
themselves protected by the First Amendment or other constitutional provision, or
if the statute does not fairly warn that it is proscribed, he may not be convicted. But
it would be unavailing for him to claim that although he knew his own conduct was
unprotected and was plainly enough forbidden by the statute, others may be in doubt as
to whether their acts are banned by the law.33 (Emphasis supplied)
Still, the quoted dissenting opinion concedes the applicability of the "void for vagueness"
rule in striking infirm criminal statutes. It just enunciates a greater demand for
"specificity" in statutes which may infringe on free speech protections.
Moreover, Mr. Justice Mendoza likewise invoked American jurisprudence in support of
his view that the overbreadth and vagueness doctrines apply only to free speech
cases.34 He cites, among others, U.S. v. Salerno35
and Broadrick v. Oklahoma.36 In Salerno, the US Supreme Court notes that the
"overbreadth" doctrine was inapplicable outside the context of the First
Amendment.37 Notably though, the US Court did not make the same assertion as to the
"vagueness" doctrine. Had it done so in Salerno, it would have been incongruent with
its previous rulings, as well as with its subsequent ones.
Broadrick v. Oklahoma did not pertain to a challenge to a penal statute, but rather an
Oklahoma law restricting the political activities of that state's classified civil
servants.38 Again, Broadrick may advert to a correct interpretation of the "overbreadth"
doctrine. However, in the face of numerous jurisprudence affirming the "vagueness"
challenge of American penal laws neither Broadrick nor Salerno can be utilized to assert
a converse rule.
Mr. Justice Mendoza's opinion also cites from the American constitutional law textbook
of Sullivan and Gunther, to assert that "vagueness challenges in the First Amendment
context, like overbreadth challenges, typically produce facial invalidation, while statutes
found vague as a matter of due process typically are invalidated only as
applied to a particular defendant."39 This may be a correct restatement of the American
rule. Yet, it does not necessarily mean that penal laws are not susceptible to a "void for
vagueness" challenge. In fact, in the same page cited in Mr. Justice Mendoza's opinion,
Sullivan and Gunther cite cases wherein American penal laws were stricken down for
being vague, such as Connally v. General Construction Co., Kolender v.
Lawson, and Papachristou v. Jacksonville.40
The same citation likewise refers to the odd situation wherein unlike in First Amendment
cases, due process invalidations for vagueness apply only to a particular
defendant. Sullivan and Gunther posit that the broader protection afforded in First
Amendment cases follow from "a special concern about the 'chilling effect' of vague
statutes on protected speech."41 However, the ponencia latches onto this distinction in
order to foist the bugaboo of "mass acquittal" of criminals due to the facial invalidation
of criminal statutes.42 Moreover, the ponencia asserts that such invalidation would
constitute a departure from the usual requirement of actual case and controversy and
permit decisions to be made in a sterile abstract context having no factual concreteness.43
Such concerns are overwrought. In this jurisdiction, judicial review over the
constitutionality of statutes, penal or otherwise, avails only upon the concurrence of (1)
the existence of an appropriate case; (2) an interest personal and substantial by the party
raising the constitutional question; (3) a plea that the function be exercised at the earliest
opportunity; and (4) a necessity that the constitutional question be passed upon in order
to decide the case.44 Challenges to the validity of laws are not lightly undertaken, and
the non-existence of any of the four conditions precedent bar a successful challenge.
Surely, not just anybody picked off the street prepossesses the requisite standing, nor
could just any case present itself as the proper vehicle for a constitutional attack.
These conditions precedent successfully weigh the concerns of the State, fearful of
instabilities brought by frequent invalidations of the laws it passes, and with the basic
component of justice that a person to whom a wrong is done by the State can seek
vindication from the courts. Our basic jurisprudential barrier has shielded this Court for
generations from exercising unwarranted and unmitigated judicial review. There is no
need to further raise the bar for review, especially on such flimsy foundations, lest we
insulate ourselves from the pleas of the truly prejudiced, truly injured, truly violated.
At the same time, the ponencia raises the concern that the invalidation of a void law will
unnecessarily benefit those without actual cases or controversies. It must be remembered
though that the Court will not unhesitatingly strike down a statute if a narrower
alternative affording the same correct relief is available. Within the confines of this
discretion, all the tools of searching inquiry are at the Court's disposal to carve as narrow
a rule as necessary.
Still and all, if there is no alternative but to strike down a void law, there should be no
hesitation on the part of this Court in ruling it so, no matter the effective scope and reach
of the decision. The State has no business promulgating void laws, which stick out like
a cancer infecting our constitutional order. When faced with the proper opportunity, it is
the Court's duty to excise the tumor no matter how painful. Unfortunately, the solution
advocated by the ponencia barring penal statutes from "void for vagueness" assaults
hides the patient from the doctor.
People v. Dela Piedra, earlier cited,45 did not invalidate the statute questioned therein on
the "void for vagueness" ground. Yet it affirms that the "void for vagueness" challenge
to a penal law may be sustained if the statute contravenes due process. The circumstance,
as the ponencia herein points out, that no penal law has been declared unconstitutional
on the ground of ambiguity, does not mean that no penal law can ever be invalidated on
that ground.
As long as the due process clause remains immanent in our Constitution, its long reach
should be applied to deter and punish unwarranted deprivations of life, liberty or
property. Violations of due process are myriad, ranging as they do from the simple to the
complicated, from the isolated to the intermittent, from the abashed to the brazen. No
advance statement can outrightly cast an act as beyond the ambit of the due process
clause, especially when applied to the lot of an accused, for such is simply presumptuous
and anathema to the spirit of fair play.
I may disagree with the eventual conclusions of Justices Kapunan, Ynares-Santiago and
Sandoval-Gutierrez in the Estrada case that Section 5 of the Anti-Plunder Law is void
for vagueness. Yet, I submit that their inquiry as to whether the said criminal statute was
void for being vague is a juristic exercise worth pursuing. If the ponencia affirms the
earlier erroneous pronouncement as asserted in the main by Mr. Justice Mendoza
in Estrada, then I express the same fear articulated by Mr. Justice Kapunan in his dissent,
that "such stance is tantamount to saying that no criminal law can be challenged however
repugnant it is to the constitutional right to due process."46
DANTE O. TINGA
Associate Justice
G.R. No. L-19650 September 29, 1966
CALTEX (PHILIPPINES), INC., petitioner-appellee,
vs.
ENRICO PALOMAR, in his capacity as THE POSTMASTER GENERAL, re-
spondent-appellant.
Office of the Solicitor General for respondent and appellant.
Ross, Selph and Carrascoso for petitioner and appellee.

CASTRO, J.:
In the year 1960 the Caltex (Philippines) Inc. (hereinafter referred to as Caltex) con-
ceived and laid the groundwork for a promotional scheme calculated to drum up patron-
age for its oil products. Denominated "Caltex Hooded Pump Contest", it calls for partic-
ipants therein to estimate the actual number of liters a hooded gas pump at each Caltex
station will dispense during a specified period. Employees of the Caltex (Philippines)
Inc., its dealers and its advertising agency, and their immediate families excepted, par-
ticipation is to be open indiscriminately to all "motor vehicle owners and/or licensed
drivers". For the privilege to participate, no fee or consideration is required to be paid,
no purchase of Caltex products required to be made. Entry forms are to be made available
upon request at each Caltex station where a sealed can will be provided for the deposit
of accomplished entry stubs.
A three-staged winner selection system is envisioned. At the station level, called "Dealer
Contest", the contestant whose estimate is closest to the actual number of liters dispensed
by the hooded pump thereat is to be awarded the first prize; the next closest, the second;
and the next, the third. Prizes at this level consist of a 3-burner kerosene stove for first;
a thermos bottle and a Ray-O-Vac hunter lantern for second; and an Everready Magnet-
lite flashlight with batteries and a screwdriver set for third. The first-prize winner in each
station will then be qualified to join in the "Regional Contest" in seven different regions.
The winning stubs of the qualified contestants in each region will be deposited in a sealed
can from which the first-prize, second-prize and third-prize winners of that region will
be drawn. The regional first-prize winners will be entitled to make a three-day all-ex-
penses-paid round trip to Manila, accompanied by their respective Caltex dealers, in or-
der to take part in the "National Contest". The regional second-prize and third-prize win-
ners will receive cash prizes of P500 and P300, respectively. At the national level, the
stubs of the seven regional first-prize winners will be placed inside a sealed can from
which the drawing for the final first-prize, second-prize and third-prize winners will be
made. Cash prizes in store for winners at this final stage are: P3,000 for first; P2,000 for
second; Pl,500 for third; and P650 as consolation prize for each of the remaining four
participants.
Foreseeing the extensive use of the mails not only as amongst the media for publicizing
the contest but also for the transmission of communications relative thereto, representa-
tions were made by Caltex with the postal authorities for the contest to be cleared in
advance for mailing, having in view sections 1954(a), 1982 and 1983 of the Revised
Administrative Code, the pertinent provisions of which read as follows:
SECTION 1954. Absolutely non-mailable matter. — No matter belonging to any of the
following classes, whether sealed as first-class matter or not, shall be imported into the
Philippines through the mails, or to be deposited in or carried by the mails of the Philip-
pines, or be delivered to its addressee by any officer or employee of the Bureau of Posts:
Written or printed matter in any form advertising, describing, or in any manner pertain-
ing to, or conveying or purporting to convey any information concerning any lottery, gift
enterprise, or similar scheme depending in whole or in part upon lot or chance, or any
scheme, device, or enterprise for obtaining any money or property of any kind by means
of false or fraudulent pretenses, representations, or promises.
"SECTION 1982. Fraud orders.—Upon satisfactory evidence that any person or com-
pany is engaged in conducting any lottery, gift enterprise, or scheme for the distribution
of money, or of any real or personal property by lot, chance, or drawing of any kind, or
that any person or company is conducting any scheme, device, or enterprise for obtaining
money or property of any kind through the mails by means of false or fraudulent pre-
tenses, representations, or promises, the Director of Posts may instruct any postmaster
or other officer or employee of the Bureau to return to the person, depositing the same
in the mails, with the word "fraudulent" plainly written or stamped upon the outside
cover thereof, any mail matter of whatever class mailed by or addressed to such person
or company or the representative or agent of such person or company.
SECTION 1983. Deprivation of use of money order system and telegraphic transfer ser-
vice.—The Director of Posts may, upon evidence satisfactory to him that any person or
company is engaged in conducting any lottery, gift enterprise or scheme for the distribu-
tion of money, or of any real or personal property by lot, chance, or drawing of any kind,
or that any person or company is conducting any scheme, device, or enterprise for ob-
taining money or property of any kind through the mails by means of false or fraudulent
pretenses, representations, or promise, forbid the issue or payment by any postmaster of
any postal money order or telegraphic transfer to said person or company or to the agent
of any such person or company, whether such agent is acting as an individual or as a
firm, bank, corporation, or association of any kind, and may provide by regulation for
the return to the remitters of the sums named in money orders or telegraphic transfers
drawn in favor of such person or company or its agent.
The overtures were later formalized in a letter to the Postmaster General, dated October
31, 1960, in which the Caltex, thru counsel, enclosed a copy of the contest rules and
endeavored to justify its position that the contest does not violate the anti-lottery provi-
sions of the Postal Law. Unimpressed, the then Acting Postmaster General opined that
the scheme falls within the purview of the provisions aforesaid and declined to grant the
requested clearance. In its counsel's letter of December 7, 1960, Caltex sought a recon-
sideration of the foregoing stand, stressing that there being involved no consideration in
the part of any contestant, the contest was not, under controlling authorities, condemna-
ble as a lottery. Relying, however, on an opinion rendered by the Secretary of Justice on
an unrelated case seven years before (Opinion 217, Series of 1953), the Postmaster Gen-
eral maintained his view that the contest involves consideration, or that, if it does not, it
is nevertheless a "gift enterprise" which is equally banned by the Postal Law, and in his
letter of December 10, 1960 not only denied the use of the mails for purposes of the
proposed contest but as well threatened that if the contest was conducted, "a fraud order
will have to be issued against it (Caltex) and all its representatives".
Caltex thereupon invoked judicial intervention by filing the present petition for declara-
tory relief against Postmaster General Enrico Palomar, praying "that judgment be ren-
dered declaring its 'Caltex Hooded Pump Contest' not to be violative of the Postal Law,
and ordering respondent to allow petitioner the use of the mails to bring the contest to
the attention of the public". After issues were joined and upon the respective memoranda
of the parties, the trial court rendered judgment as follows:
In view of the foregoing considerations, the Court holds that the proposed 'Caltex
Hooded Pump Contest' announced to be conducted by the petitioner under the rules
marked as Annex B of the petitioner does not violate the Postal Law and the respondent
has no right to bar the public distribution of said rules by the mails.
The respondent appealed.
The parties are now before us, arrayed against each other upon two basic issues: first,
whether the petition states a sufficient cause of action for declaratory relief; and second,
whether the proposed "Caltex Hooded Pump Contest" violates the Postal Law. We shall
take these up in seriatim.
1. By express mandate of section 1 of Rule 66 of the old Rules of Court, which was the
applicable legal basis for the remedy at the time it was invoked, declaratory relief is
available to any person "whose rights are affected by a statute . . . to determine any
question of construction or validity arising under the . . . statute and for a declaration of
his rights thereunder" (now section 1, Rule 64, Revised Rules of Court). In amplification,
this Court, conformably to established jurisprudence on the matter, laid down certain
conditions sine qua non therefor, to wit: (1) there must be a justiciable controversy; (2)
the controversy must be between persons whose interests are adverse; (3) the party seek-
ing declaratory relief must have a legal interest in the controversy; and (4) the issue
involved must be ripe for judicial determination (Tolentino vs. The Board of Account-
ancy, et al., G.R. No. L-3062, September 28, 1951; Delumen, et al. vs. Republic of the
Philippines, 50 O.G., No. 2, pp. 576, 578-579; Edades vs. Edades, et al., G.R. No. L-
8964, July 31, 1956). The gravamen of the appellant's stand being that the petition herein
states no sufficient cause of action for declaratory relief, our duty is to assay the factual
bases thereof upon the foregoing crucible.
As we look in retrospect at the incidents that generated the present controversy, a number
of significant points stand out in bold relief. The appellee (Caltex), as a business enter-
prise of some consequence, concededly has the unquestioned right to exploit every le-
gitimate means, and to avail of all appropriate media to advertise and stimulate increased
patronage for its products. In contrast, the appellant, as the authority charged with the
enforcement of the Postal Law, admittedly has the power and the duty to suppress trans-
gressions thereof — particularly thru the issuance of fraud orders, under Sections 1982
and 1983 of the Revised Administrative Code, against legally non-mailable schemes.
Obviously pursuing its right aforesaid, the appellee laid out plans for the sales promotion
scheme hereinbefore detailed. To forestall possible difficulties in the dissemination of
information thereon thru the mails, amongst other media, it was found expedient to re-
quest the appellant for an advance clearance therefor. However, likewise by virtue of his
jurisdiction in the premises and construing the pertinent provisions of the Postal Law,
the appellant saw a violation thereof in the proposed scheme and accordingly declined
the request. A point of difference as to the correct construction to be given to the appli-
cable statute was thus reached. Communications in which the parties expounded on their
respective theories were exchanged. The confidence with which the appellee insisted
upon its position was matched only by the obstinacy with which the appellant stood his
ground. And this impasse was climaxed by the appellant's open warning to the appellee
that if the proposed contest was "conducted, a fraud order will have to be issued against
it and all its representatives."
Against this backdrop, the stage was indeed set for the remedy prayed for. The appellee's
insistent assertion of its claim to the use of the mails for its proposed contest, and the
challenge thereto and consequent denial by the appellant of the privilege demanded, un-
doubtedly spawned a live controversy. The justiciability of the dispute cannot be gain-
said. There is an active antagonistic assertion of a legal right on one side and a denial
thereof on the other, concerning a real — not a mere theoretical — question or issue. The
contenders are as real as their interests are substantial. To the appellee, the uncertainty
occasioned by the divergence of views on the issue of construction hampers or disturbs
its freedom to enhance its business. To the appellant, the suppression of the appellee's
proposed contest believed to transgress a law he has sworn to uphold and enforce is an
unavoidable duty. With the appellee's bent to hold the contest and the appellant's threat
to issue a fraud order therefor if carried out, the contenders are confronted by the omi-
nous shadow of an imminent and inevitable litigation unless their differences are settled
and stabilized by a tranquilizing declaration (Pablo y Sen, et al. vs. Republic of the Phil-
ippines, G.R. No. L-6868, April 30, 1955). And, contrary to the insinuation of the appel-
lant, the time is long past when it can rightly be said that merely the appellee's "desires
are thwarted by its own doubts, or by the fears of others" — which admittedly does not
confer a cause of action. Doubt, if any there was, has ripened into a justiciable contro-
versy when, as in the case at bar, it was translated into a positive claim of right which is
actually contested (III Moran, Comments on the Rules of Court, 1963 ed., pp. 132-133,
citing: Woodward vs. Fox West Coast Theaters, 36 Ariz., 251, 284 Pac. 350).
We cannot hospitably entertain the appellant's pretense that there is here no question of
construction because the said appellant "simply applied the clear provisions of the law
to a given set of facts as embodied in the rules of the contest", hence, there is no room
for declaratory relief. The infirmity of this pose lies in the fact that it proceeds from the
assumption that, if the circumstances here presented, the construction of the legal provi-
sions can be divorced from the matter of their application to the appellee's contest. This
is not feasible. Construction, verily, is the art or process of discovering and expounding
the meaning and intention of the authors of the law with respect to its application to a
given case, where that intention is rendered doubtful, amongst others, by reason of the
fact that the given case is not explicitly provided for in the law (Black, Interpretation of
Laws, p. 1). This is precisely the case here. Whether or not the scheme proposed by the
appellee is within the coverage of the prohibitive provisions of the Postal Law inescap-
ably requires an inquiry into the intended meaning of the words used therein. To our
mind, this is as much a question of construction or interpretation as any other.
Nor is it accurate to say, as the appellant intimates, that a pronouncement on the matter
at hand can amount to nothing more than an advisory opinion the handing down of which
is anathema to a declaratory relief action. Of course, no breach of the Postal Law has as
yet been committed. Yet, the disagreement over the construction thereof is no longer
nebulous or contingent. It has taken a fixed and final shape, presenting clearly defined
legal issues susceptible of immediate resolution. With the battle lines drawn, in a manner
of speaking, the propriety — nay, the necessity — of setting the dispute at rest before it
accumulates the asperity distemper, animosity, passion and violence of a full-blown bat-
tle which looms ahead (III Moran, Comments on the Rules of Court, 1963 ed., p. 132
and cases cited), cannot but be conceded. Paraphrasing the language in Zeitlin vs.
Arnebergh 59 Cal., 2d., 901, 31 Cal. Rptr., 800, 383 P. 2d., 152, cited in 22 Am. Jur., 2d.,
p. 869, to deny declaratory relief to the appellee in the situation into which it has been
cast, would be to force it to choose between undesirable alternatives. If it cannot obtain
a final and definitive pronouncement as to whether the anti-lottery provisions of the
Postal Law apply to its proposed contest, it would be faced with these choices: If it
launches the contest and uses the mails for purposes thereof, it not only incurs the risk,
but is also actually threatened with the certain imposition, of a fraud order with its con-
comitant stigma which may attach even if the appellee will eventually be vindicated; if
it abandons the contest, it becomes a self-appointed censor, or permits the appellant to
put into effect a virtual fiat of previous censorship which is constitutionally unwarranted.
As we weigh these considerations in one equation and in the spirit of liberality with
which the Rules of Court are to be interpreted in order to promote their object (section
1, Rule 1, Revised Rules of Court) — which, in the instant case, is to settle, and afford
relief from uncertainty and insecurity with respect to, rights and duties under a law —
we can see in the present case any imposition upon our jurisdiction or any futility or
prematurity in our intervention.
The appellant, we apprehend, underrates the force and binding effect of the ruling we
hand down in this case if he believes that it will not have the final and pacifying function
that a declaratory judgment is calculated to subserve. At the very least, the appellant will
be bound. But more than this, he obviously overlooks that in this jurisdiction, "Judicial
decisions applying or interpreting the law shall form a part of the legal system" (Article
8, Civil Code of the Philippines). In effect, judicial decisions assume the same authority
as the statute itself and, until authoritatively abandoned, necessarily become, to the ex-
tent that they are applicable, the criteria which must control the actuations not only of
those called upon to abide thereby but also of those in duty bound to enforce obedience
thereto. Accordingly, we entertain no misgivings that our resolution of this case will ter-
minate the controversy at hand.
It is not amiss to point out at this juncture that the conclusion we have herein just reached
is not without precedent. In Liberty Calendar Co. vs. Cohen, 19 N.J., 399, 117 A. 2d.,
487, where a corporation engaged in promotional advertising was advised by the county
prosecutor that its proposed sales promotion plan had the characteristics of a lottery, and
that if such sales promotion were conducted, the corporation would be subject to criminal
prosecution, it was held that the corporation was entitled to maintain a declaratory relief
action against the county prosecutor to determine the legality of its sales promotion
plan. In pari materia, see also: Bunis vs. Conway, 17 App. Div. 2d., 207, 234 N.Y.S. 2d.,
435; Zeitlin vs. Arnebergh, supra; Thrillo, Inc. vs. Scott, 15 N.J. Super. 124, 82 A. 2d.,
903.
In fine, we hold that the appellee has made out a case for declaratory relief.
2. The Postal Law, chapter 52 of the Revised Administrative Code, using almost identical
terminology in sections 1954(a), 1982 and 1983 thereof, supra, condemns as absolutely
non-mailable, and empowers the Postmaster General to issue fraud orders against, or
otherwise deny the use of the facilities of the postal service to, any information concern-
ing "any lottery, gift enterprise, or scheme for the distribution of money, or of any real
or personal property by lot, chance, or drawing of any kind". Upon these words hinges
the resolution of the second issue posed in this appeal.
Happily, this is not an altogether untrodden judicial path. As early as in 1922, in "El
Debate", Inc. vs. Topacio, 44 Phil., 278, 283-284, which significantly dwelt on the power
of the postal authorities under the abovementioned provisions of the Postal Law, this
Court declared that —
While countless definitions of lottery have been attempted, the authoritative one for this
jurisdiction is that of the United States Supreme Court, in analogous cases having to do
with the power of the United States Postmaster General, viz.: The term "lottery" extends
to all schemes for the distribution of prizes by chance, such as policy playing, gift exhi-
bitions, prize concerts, raffles at fairs, etc., and various forms of gambling. The three
essential elements of a lottery are: First, consideration; second, prize; and third, chance.
(Horner vs. States [1892], 147 U.S. 449; Public Clearing House vs. Coyne [1903], 194
U.S., 497; U.S. vs. Filart and Singson [1915], 30 Phil., 80; U.S. vs. Olsen and Marker
[1917], 36 Phil., 395; U.S. vs. Baguio [1919], 39 Phil., 962; Valhalla Hotel Construction
Company vs. Carmona, p. 233, ante.)
Unanimity there is in all quarters, and we agree, that the elements of prize and chance
are too obvious in the disputed scheme to be the subject of contention. Consequently as
the appellant himself concedes, the field of inquiry is narrowed down to the existence of
the element of consideration therein. Respecting this matter, our task is considerably
lightened inasmuch as in the same case just cited, this Court has laid down a definitive
yard-stick in the following terms —
In respect to the last element of consideration, the law does not condemn the gratuitous
distribution of property by chance, if no consideration is derived directly or indirectly
from the party receiving the chance, but does condemn as criminal schemes in which a
valuable consideration of some kind is paid directly or indirectly for the chance to draw
a prize.
Reverting to the rules of the proposed contest, we are struck by the clarity of the language
in which the invitation to participate therein is couched. Thus —
No puzzles, no rhymes? You don't need wrappers, labels or boxtops? You don't have to
buy anything? Simply estimate the actual number of liter the Caltex gas pump with the
hood at your favorite Caltex dealer will dispense from — to —, and win valuable
prizes . . . ." .
Nowhere in the said rules is any requirement that any fee be paid, any merchandise be
bought, any service be rendered, or any value whatsoever be given for the privilege to
participate. A prospective contestant has but to go to a Caltex station, request for the
entry form which is available on demand, and accomplish and submit the same for the
drawing of the winner. Viewed from all angles or turned inside out, the contest fails to
exhibit any discernible consideration which would brand it as a lottery. Indeed, even as
we head the stern injunction, "look beyond the fair exterior, to the substance, in order to
unmask the real element and pernicious tendencies which the law is seeking to prevent"
("El Debate", Inc. vs. Topacio, supra, p. 291), we find none. In our appraisal, the scheme
does not only appear to be, but actually is, a gratuitous distribution of property by chance.
There is no point to the appellant's insistence that non-Caltex customers who may buy
Caltex products simply to win a prize would actually be indirectly paying a consideration
for the privilege to join the contest. Perhaps this would be tenable if the purchase of any
Caltex product or the use of any Caltex service were a pre-requisite to participation. But
it is not. A contestant, it hardly needs reiterating, does not have to buy anything or to
give anything of value.1awphîl.nèt
Off-tangent, too, is the suggestion that the scheme, being admittedly for sales promotion,
would naturally benefit the sponsor in the way of increased patronage by those who will
be encouraged to prefer Caltex products "if only to get the chance to draw a prize by
securing entry blanks". The required element of consideration does not consist of the
benefit derived by the proponent of the contest. The true test, as laid down in People vs.
Cardas, 28 P. 2d., 99, 137 Cal. App. (Supp.) 788, is whether the participant pays a valu-
able consideration for the chance, and not whether those conducting the enterprise re-
ceive something of value in return for the distribution of the prize. Perspective properly
oriented, the standpoint of the contestant is all that matters, not that of the sponsor. The
following, culled from Corpus Juris Secundum, should set the matter at rest:
The fact that the holder of the drawing expects thereby to receive, or in fact does receive,
some benefit in the way of patronage or otherwise, as a result of the drawing; does not
supply the element of consideration. Griffith Amusement Co. vs. Morgan, Tex. Civ. App.,
98 S.W., 2d., 844" (54 C.J.S., p. 849).
Thus enlightened, we join the trial court in declaring that the "Caltex Hooded Pump
Contest" proposed by the appellee is not a lottery that may be administratively and ad-
versely dealt with under the Postal Law.
But it may be asked: Is it not at least a "gift enterprise, or scheme for the distribution of
money, or of any real or personal property by lot, chance, or drawing of any kind", which
is equally prescribed? Incidentally, while the appellant's brief appears to have concen-
trated on the issue of consideration, this aspect of the case cannot be avoided if the rem-
edy here invoked is to achieve its tranquilizing effect as an instrument of both curative
and preventive justice. Recalling that the appellant's action was predicated, amongst
other bases, upon Opinion 217, Series 1953, of the Secretary of Justice, which opined in
effect that a scheme, though not a lottery for want of consideration, may nevertheless be
a gift enterprise in which that element is not essential, the determination of whether or
not the proposed contest — wanting in consideration as we have found it to be — is a
prohibited gift enterprise, cannot be passed over sub silencio.
While an all-embracing concept of the term "gift enterprise" is yet to be spelled out in
explicit words, there appears to be a consensus among lexicographers and standard au-
thorities that the term is commonly applied to a sporting artifice of under which goods
are sold for their market value but by way of inducement each purchaser is given a
chance to win a prize (54 C.J.S., 850; 34 Am. Jur., 654; Black, Law Dictionary, 4th ed.,
p. 817; Ballantine, Law Dictionary with Pronunciations, 2nd ed., p. 55; Retail Section of
Chamber of Commerce of Plattsmouth vs. Kieck, 257 N.W., 493, 128 Neb. 13; Barker
vs. State, 193 S.E., 605, 56 Ga. App., 705; Bell vs. State, 37 Tenn. 507, 509, 5 Sneed,
507, 509). As thus conceived, the term clearly cannot embrace the scheme at bar. As
already noted, there is no sale of anything to which the chance offered is attached as an
inducement to the purchaser. The contest is open to all qualified contestants irrespective
of whether or not they buy the appellee's products.
Going a step farther, however, and assuming that the appellee's contest can be encom-
passed within the broadest sweep that the term "gift enterprise" is capable of being ex-
tended, we think that the appellant's pose will gain no added comfort. As stated in the
opinion relied upon, rulings there are indeed holding that a gift enterprise involving an
award by chance, even in default of the element of consideration necessary to constitute
a lottery, is prohibited (E.g.: Crimes vs. States, 235 Ala 192, 178 So. 73; Russell vs.
Equitable Loan & Sec. Co., 129 Ga. 154, 58 S.E., 88; State ex rel. Stafford vs. Fox-Great
Falls Theater Corporation, 132 P. 2d., 689, 694, 698, 114 Mont. 52). But this is only one
side of the coin. Equally impressive authorities declare that, like a lottery, a gift enter-
prise comes within the prohibitive statutes only if it exhibits the tripartite elements of
prize, chance and consideration (E.g.: Bills vs. People, 157 P. 2d., 139, 142, 113 Colo.,
326; D'Orio vs. Jacobs, 275 P. 563, 565, 151 Wash., 297; People vs. Psallis, 12 N.Y.S.,
2d., 796; City and County of Denver vs. Frueauff, 88 P., 389, 394, 39 Colo., 20, 7 L.R.A.,
N.S., 1131, 12 Ann. Cas., 521; 54 C.J.S., 851, citing: Barker vs. State, 193 S.E., 605,
607, 56 Ga. App., 705; 18 Words and Phrases, perm. ed., pp. 590-594). The apparent
conflict of opinions is explained by the fact that the specific statutory provisions relied
upon are not identical. In some cases, as pointed out in 54 C.J.S., 851, the terms "lottery"
and "gift enterprise" are used interchangeably (Bills vs. People, supra); in others, the
necessity for the element of consideration or chance has been specifically eliminated by
statute. (54 C.J.S., 351-352, citing Barker vs. State, supra; State ex rel. Stafford vs. Fox-
Great Falls Theater Corporation, supra). The lesson that we derive from this state of the
pertinent jurisprudence is, therefore, that every case must be resolved upon the particular
phraseology of the applicable statutory provision.
Taking this cue, we note that in the Postal Law, the term in question is used in association
with the word "lottery". With the meaning of lottery settled, and consonant to the well-
known principle of legal hermeneutics noscitur a sociis — which Opinion 217 aforesaid
also relied upon although only insofar as the element of chance is concerned — it is only
logical that the term under a construction should be accorded no other meaning than that
which is consistent with the nature of the word associated therewith. Hence, if lottery is
prohibited only if it involves a consideration, so also must the term "gift enterprise" be
so construed. Significantly, there is not in the law the slightest indicium of any intent to
eliminate that element of consideration from the "gift enterprise" therein included.
This conclusion firms up in the light of the mischief sought to be remedied by the law,
resort to the determination thereof being an accepted extrinsic aid in statutory construc-
tion. Mail fraud orders, it is axiomatic, are designed to prevent the use of the mails as a
medium for disseminating printed matters which on grounds of public policy are de-
clared non-mailable. As applied to lotteries, gift enterprises and similar schemes, justifi-
cation lies in the recognized necessity to suppress their tendency to inflame the gambling
spirit and to corrupt public morals (Com. vs. Lund, 15 A. 2d., 839, 143 Pa. Super. 208).
Since in gambling it is inherent that something of value be hazarded for a chance to gain
a larger amount, it follows ineluctably that where no consideration is paid by the con-
testant to participate, the reason behind the law can hardly be said to obtain. If, as it has
been held —
Gratuitous distribution of property by lot or chance does not constitute "lottery", if it is
not resorted to as a device to evade the law and no consideration is derived, directly or
indirectly, from the party receiving the chance, gambling spirit not being cultivated or
stimulated thereby. City of Roswell vs. Jones, 67 P. 2d., 286, 41 N.M., 258." (25 Words
and Phrases, perm. ed., p. 695, emphasis supplied).
we find no obstacle in saying the same respecting a gift enterprise. In the end, we are
persuaded to hold that, under the prohibitive provisions of the Postal Law which we have
heretofore examined, gift enterprises and similar schemes therein contemplated are con-
demnable only if, like lotteries, they involve the element of consideration. Finding none
in the contest here in question, we rule that the appellee may not be denied the use of the
mails for purposes thereof.
Recapitulating, we hold that the petition herein states a sufficient cause of action for
declaratory relief, and that the "Caltex Hooded Pump Contest" as described in the rules
submitted by the appellee does not transgress the provisions of the Postal Law.
ACCORDINGLY, the judgment appealed from is affirmed. No costs.
Concepcion, C.J., Reyes, J.B.L., Barrera, Dizon, Regala, Makalintal, Bengzon, J.P.,
Zaldivar and Sanchez, JJ., concur.
G.R. No. L-63318 November 25, 1983
PHILIPPINE CONSUMERS FOUNDATION, INC., petitioner,
vs.
NATIONAL TELECOMMUNICATIONS COMMISSION AND PHILIPPINE
LONG DISTANCE TELEPHONE COMPANY, respondents.
Tomas C. Llamas for petitioner.
The Solicitor General for respondent NTC.
Graciano C. Regala and Eliseo B. Alampay for respondent PLDT.
RELOVA, J.:ñé+.£ªwph!1
Petition for certiorari seeking to set aside and annul the decision, dated November 22,
1982, of public respondent National Telecommunications Commission (NTC, for short),
approving the application of the Philippine Long Distance Telephone Company (PLDT,
for short) of its revised schedule for its Subscriber Investment Plan (SIP) for the entire
service area, including the ex-RETELCO area; as well as the order of January 14, 1983
which denied the motion for reconsideration of petitioner Philippine Consumers Foun-
dation, Inc. (PCFI, for short).
Records show that on March 20, 1980, private respondent PLDT filed an application
with the NTC for the approval of a revised schedule for its Subscriber Investment Plan
(SIP), docketed as Case No. 82-27.
On April 14, 1982, the NTC issued an ex-parte order provisionally approving the revised
schedule which, however, was set aside by this Court on August 31, 1982 in the case
of "Samuel Bautista vs. NTC, et al.," 116 SCRA 411. The Court therein ruled that "there
was necessity of a hearing by the Commission before it should have acted on the appli-
cation of the PLDT so that the public could air its opposition, particularly the herein
petitioner and the Solicitor General, representing the government. They should be given
the opportunity to substantiate their objection that the rates under the subscriber invest-
ment plan are excessive and unreasonable and, as a consequence, the low income and
middle class group cannot afford to have telephone connections; and, that there is no
need to increase the rate because the applicant is financially sound."
On November 22, 1982, the NTC rendered the questioned decision permanently approv-
ing PLDT's new and increased SIP rates, the dispositive portion of which
reads: têñ.£îhqwâ£
IN VIEW OF ALL THE FOREGOING, this Commission finds that applicant's reduced
proposals for its revised Subscriber Investment Plan Schedule, upon further reductions
herein ordered with respect to subscriber investments for new installations of single res-
idential telephones in the Metro Manila and Provincial Service Areas, are all within the
50%-of-cost limit provided in P.D. 217; that they are just and reasonable and in conso-
nance with the public policies declared in said decree; and that it is in the public interest
that applicant's revised SIP Schedule be, as it is hereby APPROVED, as follows:
REVISED SIP SCHEDULE
Service Category Revised SIP Rates
Metro Manila Provincial têñ.£îhqw⣠procedure laid down in the Rules of Practice." (p. 130, rollo) Further, the NTC invoked
1. New Installations – its extraordinary powers pursuant to Section 3 of Rule 15 of the Rules of Practice,
1. PBX/PABX Trunk P 5,000 P3,000 "whereby even without an iota or proof to substantiate its application, NTC allowed the
2. Business Phone: desired increase purportedly on a provisional basis. " (p. 129, rollo)
Single line 3,500 2,000 The question is whether or not respondent acted with grave abuse of discretion when it
Party line 2,000 1,600 approved the Revised Subscriber Investment Plan (SIP) of respondent PLDT in the ab-
3. Residential Phone: sence of specific rules and regulations implementing Presidential Decree No. 217. Peti-
Single line 1,800 1,300 tioner claims that these implementing rules and regulations are mandatory pre-requisite
Party line 900 800 for the approval of said SIP rates.
4. Leased Line 2,500 2,500 Respondent NTC admits the absence of rules and regulations referred to in PD 217.
5. Tie trunk or tie line 2,500 2,500 However, it contends that nowhere in said decree is there any legal provision making the
6. Outside local 2,500 2,500 promulgation of rules a mandatory pre-requisite to the establishment of SIP and the de-
II. Transfers – termination of its schedules; that since respondent NTC is enjoined to implement the
1. PBX/PABX 1,500 1,200 declared policies of the decree, for its immediate implementation, it may rely on existing
2. Business Phone: Rules of Practice; that under the same Rules of Practice all existing subscriber invest-
Single line 800 600 ment plans were presented, considered and approved by the NTC; that the promulgation
Party line 600 500 of the rules is inherently an internal and administrative matter and therefore, is not a
3. Residential Phone: proper subject of litigation, much less a duty of the NTC to accomplish; and, that public
Single line 600 500 respondent may or may not promulgate the rules in the immediate implementation of
Party line 500 300 said decree as the word used there is "may."
4. Leased Line 800 800 We are not persuaded.
Revised SIP Rates Presidential Decree No. 217 was promulgated on June 16, 1973 and paragraph 4 of Sec-
Metro Manila Provincial tion 1 thereof provides: têñ.£îhqwâ£
5. Tie trunk or tie line P800 P800 4. In line with the objective of spreading ownership among a wide base of the people,
6. Outside Local 800 800 the concept of telephone subscriber self-financing is hereby adopted whereby a tele-
(pp. 34-35, Rollo) phone subscriber finances part of the capital investments in telephone installations
Petitioner filed a motion for reconsideration of the above judgment on December 14, through the purchase of stocks, whether common or preferred stock, of the telephone
1982, and after a month, or on January 14, 1983, NTC denied said motion for reconsid- company. (Emphasis supplied)
eration. There is merit in the contention of petitioner that it is the duty of respondent NTC to
It is the submission of petitioner that the SIP schedule presented by the PLDT is pre- promulgate rules and regulations because: têñ.£îhqwâ£
mature and, therefore, illegal and baseless, because the NTC has not yet promulgated the 1. P.D. 217 deals with matters so alien, innovative and untested such that existing sub-
required rules and regulations implementing Section 2 of Presidential Decree No. 217 stantive and procedural laws would not be applicable. Thus, the Subscriber Investment
which provides: têñ.£îhqw⣠Plan (SIP) was so set up precisely to ensure the financial viability of public telecommu-
Section 2. The Department of Public Works, Transportation and Communications nications companies which in turn assures the enjoyment of the population at minimum
through its Board of Communications and/or appropriate agency shall see to it that the cost the benefits of a telephone facility.
herein declared policies for the telephone industry are immediately implemented and for The SIP has never been contemplated prior to P.D. 217.
this purpose pertinent rules and regulations may be promulgated ... (Emphasis supplied). The existing law on the other hand, the Public Service Act, diametrically runs counter to
Petitioner avers that the "substitute procedural vehicle utilized by NTC in allowing the the spirit and intention, if not the purpose of P.D. 217. It may even be gainsaid that as
establishment of SIP by PLDT was by treating the appropriate Petition of PLDT as if the long as the optimum number of individuals may enjoy telephone service, there is no
same were a rate case over which the Rules of Practice was applicable. NTC proceeded limitation on the profitability of such companies. Hence, while P.D. 217 encourages the
to invoke the summary powers provided for in the Rules of Practice to fully bear on the profitability of public telecommunication companies, the Public Service Act limits the
hapless consumer, notably the repressive 'Provisional Reliefs;' (pp. 5-6, Rollo) that at the same.
hearings thereof, "NTC limited the numerous oppositors in the instant Application, 2. In the absence of such rules and regulations, there is outright confusion among the
among them PCFI, by applying the two oppositor-rule. This means that only two of the rights of PLDT, the consumers and the government itself. As may clearly be seen, how
oppositors will be heard in representation of all the oppositors, again pursuant to the can the Decision be said to have assured that most of the population will enjoy telephone
facilities? Did the Decision likewise assure the financial viability of PLDT? Was the SO ORDERED.
government's duty to provide telephone service to its constituents subserved by the De-
cision? These questions can never be answered unless such rules and regulations are set
up.
3. Finally, it should be emphasized that NTC is estopped from claiming that there is no
need to promulgate such rules and regulations. In the case of PCFI vs. NTC, G.R. No.
61892, now pending resolution before this Honorable Tribunal, NTC totally refused to
act on a petition filed by PLDT precisely for the promulgation of such rules and regula-
tions.
Why then did NTC refuse to act on such petition if and when there is no need for the
promulgation of such rules and regulations? After all NTC could have simply ruled that
the petition in G.R. No. 61892 is unnecessary because such rules and regulations are
also unnecessary. (pp. 135-136, Rollo)
At any rate, there is no justification for the rate increase of the revised schedule of
PLDT's Subscriber Investment Plan. It is to say the least, untimely, considering the pre-
sent economic condition obtaining in the country. The approved rate defeats the purpose
of the decree which is to spread ownership among the wide base of investors. The State,
in Presidential Decree No. 217 promulgated on June 16, 1973, adopted the basic policies
of the telephone industry, which, among others, are: (1) the attainment of efficient tele-
phone service for as wide an area as possible at the lowest reasonable costs to the sub-
scriber; (2) the capital requirements of telephone utilities obtained from ownership funds
shall be raised from a broad base of investors, involving as large a number of individual
investors as may be possible; and (3) in any subscriber self-financing plan, the amount
of subscriber self-financing will, in no case, exceed fifty per centum (50%) of the cost
of the installed telephone line, as may be determined from time to time by the regulatory
bodies of the State.
The load on the back of our people is heavy enough. Let us not increase its weight further.
Noteworthy is the concurrence of Justice Vicente Abad Santos in the case of Bautista vs.
NTC (supra) that "the PLDT which is reported to have made over 100 million pesos in
profits in just six months but with its service so poor that even the First Lady has taken
notice should think of improved service before increased profits."
Indeed, let t us not aggravate the situation of the populace by raising the revised SIP
schedule plan of the PLDT. A rate increase would be an additional burden on the tele-
phone subscribers. The plan to expand the company program and/or improve its service
is laudable, but the expenses should not be shouldered by the telephone subscribers.
Considering the multi-million profits of the company, the cost of expansion and/or im-
provement should come from part of its huge profits.
Anent the question that petitioner should have appealed the decision of respondent NTC,
instead of filing the instant petition, suffice it to say that certiorari is available despite
existence of the remedy of appeal where public welfare and the advancement of public
policy so dictate, or the orders complained of were issued in excess of or without juris-
diction (Jose vs. Zulueta, 2 SCRA 574).
ACCORDINGLY, the DECISION of the public respondent National Telecommunica-
tions Commission, dated November 22, 1982, and the ORDER dated January 14, 1983.
are hereby ANNULLED and SET ASIDE.