G.R. No.

109902 August 2, 1994

ALU-TUCP, Representing Members: ALAN BARINQUE, with 13 others, namely: ENGR. ALAN
G. BARINQUE, ENGR. DARRELL LEE ELTAGONDE, EDUARD H. FOOKSON, JR., ROMEO R.
SARONA, RUSSELL GACUS, JERRY BONTILAO, EUSEBIO MARIN, JR., LEONIDO ECHAVEZ,
BONIFACIO MEJOS, EDGAR S. BONTUYAN, JOSE G. GARGUENA, JR., OSIAS B.
DANDASAN, and GERRY I. FETALVERO, petitioners,
vs.
NATIONAL LABOR RELATIONS COMMISSION and NATIONAL STEEL CORPORATION
(NSC), respondents.

Leonard U. Sawal for petitioners.

Saturnino Mejorada for private respondent.

FELICIANO, J.:

In this Petition for Certiorari, petitioners assail the Resolution of the National Labor Relations
Commission ("NLRC") dated 8 January 1993 which declared petitioners to be project employees of
private respondent National Steel Corporation ("NSC"), and the NLRC's subsequent Resolution of
15 February 1993, denying petitioners' motion for reconsideration.

Petitioners plead that they had been employed by respondent NSC in connection with its Five Year
Expansion Program (FAYEP I & II)   for varying lengths of time when they were separated from
1

NSC's service:

Employee Date Nature of Separated

Employed Employment

1. Alan Barinque 5-14-82 Engineer 1 8-31-91

2. Jerry Bontilao 8-05-85 Engineer 2 6-30-92
3. Edgar Bontuyan 11-03-82 Chairman to present
4. Osias Dandasan 9-21-82 Utilityman 1991
5. Leonido Echavez 6-16-82 Eng. Assistant 6-30-92
6. Darrell Eltagonde 5-20-85 Engineer 1 8-31-91
7. Gerry Fetalvero 4-08-85 Mat. Expediter regularized
8. Eduard Fookson 9-20-84 Eng. Assistant 8-31-91
9. Russell Gacus 1-30-85 Engineer 1 6-30-92
10. Jose Garguena 3-02-81 Warehouseman to present
11. Eusebio Mejos 11-17-82 Survey Aide 8-31-91
12. Bonifacio Mejos 11-17-82 Surv. Party Head 1992
13. Romeo Sarona 2-26-83 Machine Operator 8-31-91 2

On 5 July 1990, petitioners filed separate complaints for unfair labor practice, regularization and
monetary benefits with the NLRC, Sub-Regional Arbitration Branch XII, Iligan City.

The complaints were consolidated and after hearing, the Labor Arbiter in a Decision dated 7 June
1991, declared petitioners "regular project employees who shall continue their employment as such
for as long as such [project] activity exists," but entitled to the salary of a regular employee pursuant
to the provisions in the collective bargaining agreement. It also ordered payment of salary
differentials. 
3

Both parties appealed to the NLRC from that decision. Petitioners argued that they were regular, not
project, employees. Private respondent, on the other hand, claimed that petitioners are project
employees as they were employed to undertake a specific project — NSC's Five Year Expansion
Program (FAYEP I & II).

The NLRC in its questioned resolutions modified the Labor Arbiter's decision. It affirmed the Labor
Arbiter's holding that petitioners were project employees since they were hired to perform work in a
specific undertaking — the Five Years Expansion Program, the completion of which had been
determined at the time of their engagement and which operation was not directly related to the
business of steel manufacturing. The NLRC, however, set aside the award to petitioners of the same
benefits enjoyed by regular employees for lack of legal and factual basis.

Deliberating on the present Petition for Certiorari, the Court considers that petitioners have failed to
show any grave abuse of discretion or any act without or in excess of jurisdiction on the part of the
NLRC in rendering its questioned resolutions of 8 January 1993 and 15 February 1993.

The law on the matter is Article 280 of the Labor Code which reads in full:

Art. 280. Regular and Casual Employment — The provisions of the written

agreement to the contrary notwithstanding and regardless of the oral agreement of
the parties, and employment shall be deemed to be regular where the employee has
been engaged to perform activities which are usually necessary or desirable in the
usual business or trade of the employer, except where the employment has been
fixed for a specific project or undertaking the completion or termination of which has
been determined at the time of the engagement of the employee or where the work
or services to be performed is seasonal in nature and the employment is for the
duration of the season.

An employment shall be deemed to be casual if it is not covered by the preceding

paragraph: Provided, That, any employee who has rendered at least one year
service, whether such service is continuous or broken, shall be considered a regular
employee with respect to the activity in which he is employed and his employment
shall continue while such actually exists. (Emphasis supplied)

Petitioners argue that they are "regular" employees of NSC because: (i) their jobs are "necessary,
desirable and work-related to private respondent's main business, steel-making"; and (ii) they have
rendered service for six (6) or more years to private respondent NSC.  4

The basic issue is thus whether or not petitioners are properly characterized as "project employees"
rather than "regular employees" of NSC. This issue relates, of course, to an important consequence:
the services of project employees are co-terminous with the project and may be terminated upon the
end or completion of the project for which they were hired.   Regular employees, in contract, are
5

legally entitled to remain in the service of their employer until that service is terminated by one or
another of the recognized modes of termination of service under the Labor Code.  6

It is evidently important to become clear about the meaning and scope of the term "project" in the
present context. The "project" for the carrying out of which "project employees" are hired would
ordinarily have some relationship to the usual business of the employer. Exceptionally, the "project"
undertaking might not have an ordinary or normal relationship to the usual business of the employer.
In this latter case, the determination of the scope and parameeters of the "project" becomes fairly
easy. It is unusual (but still conceivable) for a company to undertake a project which has absolutely
no relationship to the usual business of the company; thus, for instance, it would be an unusual
steel-making company which would undertake the breeding and production of fish or the cultivation
of vegetables. From the viewpoint, however, of the legal characterization problem here presented to
the Court, there should be no difficulty in designating the employees who are retained or hired for
the purpose of undertaking fish culture or the production of vegetables as "project employees," as
distinguished from ordinary or "regular employees," so long as the duration and scope of the project
were determined or specified at the time of engagement of the "project employees."   For, as is
7

evident from the provisions of Article 280 of the Labor Code, quoted earlier, the principal test for
determining whether particular employees are properly characterized as "project employees" as
distinguished from "regular employees," is whether or not the "project employees" were assigned to
carry out a "specific project or undertaking," the duration (and scope) of which were specified at the
time the employees were engaged for that project.

In the realm of business and industry, we note that "project" could refer to one or the other of at least
two (2) distinguishable types of activities. Firstly, a project could refer to a particular job or
undertaking that is within the regular or usual business of the employer company, but which is
distinct and separate, and identifiable as such, from the other undertakings of the company. Such
job or undertaking begins and ends at determined or determinable times. The typical example of this
first type of project is a particular construction job or project of a construction company. A
construction company ordinarily carries out two or more discrete identifiable construction projects:
e.g., a twenty-five- storey hotel in Makati; a residential condominium building in Baguio City; and a
domestic air terminal in Iloilo City. Employees who are hired for the carrying out of one of these
separate projects, the scope and duration of which has been determined and made known to the
employees at the time of employment, are properly treated as "project employees," and their
services may be lawfully terminated at completion of the project.

The term "project" could also refer to, secondly, a particular job or undertaking that is not within the
regular business of the corporation. Such a job or undertaking must also be identifiably separate and
distinct from the ordinary or regular business operations of the employer. The job or undertaking also
begins and ends at determined or determinable times. The case at bar presents what appears to our
mind as a typical example of this kind of "project."

NSC undertook the ambitious Five Year Expansion Program I and II with the ultimate end in view of
expanding the volume and increasing the kinds of products that it may offer for sale to the public.
The Five Year Expansion Program had a number of component projects: e.g., (a) the setting up of a
"Cold Rolling Mill Expansion Project"; (b) the establishment of a "Billet Steel-Making Plant" (BSP); (c)
the acquisition and installation of a "Five Stand TDM"; and (d) the "Cold Mill Peripherals
Project."   Instead of contracting out to an outside or independent contractor the tasks
8

of constructing the buildings with related civil and electrical works that would house the new
machinery and equipment, the installation of the newly acquired mill or plant machinery and
equipment and the commissioning of such machinery and equipment, NSC opted to execute and
carry out its Five Yeear Expansion Projects "in house," as it were, by administration. The carrying
out of the Five Year Expansion Program (or more precisely, each of its component projects)
constitutes a distinct undertaking identifiable from the ordinary business and activity of NSC. Each
component project, of course, begins and ends at specified times, which had already been
determined by the time petitioners were engaged. We also note that NSC did the work here involved
— the construction of buildings and civil and electrical works, installation of machinery and
equipment and the commissioning of such machinery — only for itself. Private respondent NSC
was not in the business of constructing buildings and installing plant machinery for the general
business community, i.e., for unrelated, third party, corporations. NSC did not hold itself out to the
public as a construction company or as an engineering corporation.

Which ever type of project employment is found in a particular case, a common basic requisite is
that the designation of named employees as "project employees" and their assignment to a specific
project, are effected and implemented in good faith, and not merely as a means of evading
otherwise applicable requirements of labor laws.

Thus, the particular component projects embraced in the Five Year Expansion Program, to which
petitioners were assigned, were distinguishable from the regular or ordinary business of NSC which,
of course, is the production or making and marketing of steel products. During the time petitioners
rendered services to NSC, their work was limited to one or another of the specific component
projects which made up the FAYEP I and II. There is nothing in the record to show that petitioners
were hired for, or in fact assigned to, other purposes, e.g., for operating or maintaining the old, or
previously installed and commissioned, steel-making machinery and equipment, or for selling the
finished steel products.

We, therefore, agree with the basic finding of the NLRC (and the Labor Arbiter) that the petitioners
were indeed "project employees:"

It is well established by the facts and evidence on record that herein 13 complainants
were hired and engaged for specific activities or undertaking the period of which has
been determined at time of hiring or engagement. It is of public knowledge and which
this Commission can safely take judicial notice that the expansion program (FAYEP)
of respondent NSC consist of various phases [of] project components which are
being executed or implemented independently or simultaneously from each other . . .

In other words, the employment of each "project worker" is dependent and co-
terminous with the completion or termination of the specific activity or undertaking
[for which] he was hired which has been pre-determined at the time of engagement.
Since, there is no showing that they (13 complainants) were engaged to perform
work-related activities to the business of respondent which is steel-making, there is
no logical and legal sense of applying to them the proviso under the second
paragraph of Article 280 of the Labor Code, as amended.

xxx xxx xxx

The present case therefore strictly falls under the definition of "project employees" on
paragraph one of Article 280 of the Labor Code, as amended. Moreover, it has been
held that the length of service of a project employee is not the controlling test of
employment tenure but whether or not "the employment has been fixed for a specific
project or undertaking the completion or termination of which has been determined at
the time of the engagement of the employee". (See Hilario Rada v. NLRC, G.R. No.
96078, January 9, 1992; and Sandoval Shipping, Inc. v. NLRC, 136 SCRA 674
(1985). 9

Petitioners next claim that their service to NSC of more than six (6) years should qualify them as
regular employees. We believe this claim is without legal basis. The simple fact that the employment
of petitioners as project employees had gone beyond one (1) year, does not detract from, or legally
dissolve, their status as project employees.   The second paragraph of Article 280 of the Labor
10

Code, quoted above, providing that an employee who has served for at least one (1) year, shall be
considered a regular employee, relates to casual employees, not to project employees.
In the case of Mercado, Sr. vs. National Labor Relations Commission,   this Court ruled that the
11

proviso in the second paragraph of Article 280 relates only to casual employees and is not
applicable to those who fall within the definition of said Article's first paragraph, i.e., project
employees. The familiar grammatical rule is that a proviso is to be construed with reference to the
immediately preceding part of the provision to which it is attached, and not to other sections thereof,
unless the clear legislative intent is to restrict or qualify not only the phrase immediately preceding
the proviso but also earlier provisions of the statute or even the statute itself as a whole. No such
intent is observable in Article 280 of the Labor Code, which has been quoted earlier.

ACCORDINGLY, in view of the foregoing, the Petition for Certiorari is hereby DISMISSED for lack of
merit. The Resolutions of the NLRC dated 8 January 1993 and 15 February 1993 are hereby
AFFIRMED. No pronouncement as to costs.

SO ORDERED.

G.R. No. 90501               August 5, 1991

ARIS (PHIL.) INC., petitioner,

vs.
NATIONAL LABOR RELATIONS COMMISSION, LABOR ARBITER FELIPE GARDUQUE III,
LEODEGARIO DE GUZMAN, LILIA PEREZ, ROBERTO BESTAMONTE, AIDA OPENA,
REYNALDO TORIADO, APOLINARIO GAGAHINA, RUFINO DE CASTRO, FLORDELIZA RAYOS
DEL SOL, STEVE SANCHO, ESTER CAIRO, MARIETA MAGALAD, and MARY B.
NADALA, respondents.

Cesar C. Cruz & Partners for petitioner.

Zosimo Morillo for respondent Rayos del Sol.

Banzuela, Flores, Miralles, Raneses, Sy & Associates for private respondents.

DAVIDE, JR., J.:

Petitioner assails the constitutionality of the amendment introduced by Section 12 of Republic Act
No. 6715 to Article 223 of the Labor Code of the Philippines (PD No. 442, as amended) allowing
execution pending appeal of the reinstatement aspect of a decision of a labor arbiter reinstating a
dismissed or separated employee and of Section 2 of the NLRC Interim Rules on Appeals under
R.A. No. 6715 implementing the same. It also questions the validity of the Transitory Provision
(Section 17) of the said Interim Rules.

The challenged portion of Section 12 of Republic Act No. 6715, which took effect on 21 March 1989,
reads as follows:

SEC 12. Article 223 of the same code is amended to read as follows:

ART. 223. Appeal.

x x x           x x x          x x x
 In any event, the decision of the Labor Arbiter reinstating a dismissed or separated
employee, in so far as the reinstatement aspect is concerned, shall immediately be
executory, even pending appeal. The employee shall either be admitted back to work under
the same terms and conditions prevailing prior to his dismissal or separation or, at the option
of the employer, merely reinstated in the payroll. The posting of a bond by the employer shall
not stay the execution for reinstatement provided therein.

This is a new paragraph ingrafted into the Article.

Sections 2 and 17 of the "NLRC Interim Rules On Appeals Under R.A. No. 6715, Amending the
Labor Code", which the National Labor Relations Commission (NLRC) promulgated on 8 August
1989, provide as follows:

Section 2. Order of Reinstatement and Effect of Bond. — In so far as the reinstatement

aspect is concerned, the decision of the Labor Arbiter reinstating a dismissed or separated
employee shall immediately be executory even pending appeal. The employee shall either
be admitted back to work under the same terms and conditions prevailing prior to his
dismissal or separation, or, at the option of the employer, merely be reinstated in the payroll.

The posting of a bond by the employer shall not stay the execution for reinstatement.

x x x           x x x          x x x

Section 17. Transitory provision. — Appeals filed on or after March 21, 1989, but prior to the
effectivity of these Interim Rules must conform to the requirements as herein set forth or as
may be directed by the Commission.

The antecedent facts and proceedings which gave rise to this petition are not disputed:

On 11 April 1988, private respondents, who were employees of petitioner, aggrieved by

management's failure to attend to their complaints concerning their working surroundings which had
become detrimental and hazardous, requested for a grievance conference. As none was arranged,
and believing that their appeal would be fruitless, they grouped together after the end of their work
that day with other employees and marched directly to the management's office to protest its long
silence and inaction on their complaints.

On 12 April 1988, the management issued a memorandum to each of the private respondents, who
were identified by the petitioner's supervisors as the most active participants in the rally requiring
them to explain why they should not be terminated from the service for their conduct. Despite their
explanation, private respondents were dismissed for violation of company rules and regulations,
more specifically of the provisions on security and public order and on inciting or participating in
illegal strikes or concerted actions.

Private respondents lost no time in filing a complaint for illegal dismissal against petitioner and Mr.
Gavino Bayan with the regional office of the NLRC at the National Capital Region, Manila, which was
docketed therein as NLRC-NCR-00-0401630-88.

After due trial, Labor Arbiter Felipe Garduque III handed down on 22 June 1989 a decision' the
dispositive portion of which reads:
 ACCORDINGLY, respondent Aris (Phils.), Inc. is hereby ordered to reinstate within ten (10)
days from receipt hereof, herein complainants Leodegario de Guzman, Rufino de Castro,
Lilia M. Perez, Marieta Magalad, Flordeliza Rayos del Sol, Reynaldo Toriado, Roberto
Besmonte, Apolinario Gagahina, Aidam (sic) Opena, Steve C. Sancho Ester Cairo, and Mary
B. Nadala to their former respective positions or any substantial equivalent positions if
already filled up, without loss of seniority right and privileges but with limited backwages of
six (6) months except complainant Leodegario de Guzman.

All other claims and prayers are hereby denied for lack of merit.

SO ORDERED.

On 19 July 1989, complainants (herein private respondents) filed a Motion For Issuance of a Writ of
Execution  pursuant to the above-quoted Section 12 of R.A. No. 6715.
2

On 21 July 1989, petitioner filed its Appeal. 3

On 26 July 1989, the complainants, except Flor Rayos del Sol, filed a Partial Appeal. 4

On 10 August 1989, complainant Flor Rayos del Sol filed a Partial Appeal. 5

On 29 August 1989, petitioner filed an Opposition  to the motion for execution alleging that Section
6

12 of R.A. No. 6715 on execution pending appeal cannot be applied retroactively to cases pending
at the time of its effectivity because it does not expressly provide that it shall be given retroactive
effect  and to give retroactive effect to Section 12 thereof to pending cases would not only result in
7

the imposition of an additional obligation on petitioner but would also dilute its right to appeal since it
would be burdened with the consequences of reinstatement without the benefit of a final judgment.
In their Reply  filed on 1 September 1989, complainants argued that R.A. No. 6715 is not sought to
8

be given retroactive effect in this case since the decision to be executed pursuant to it was rendered
after the effectivity of the Act. The said law took effect on 21 March 1989, while the decision was
rendered on 22 June 1989.

Petitioner submitted a Rejoinder to the Reply on 5 September 1989. 9

On 5 October 1989, the Labor Arbiter issued an Order granting the motion for execution and the
issuance of a partial writ of execution  as far as reinstatement of herein complainants is concerned
10

in consonance with the provision of Section 2 of the rules particularly the last sentence thereof.

In this Order, the Labor Arbiter also made reference to Section 17 of the NLRC Interim Rules in this
wise:

Since Section 17 of the said rules made mention of appeals filed on or after March 21, 1989,
but prior to the effectivity of these interim rules which must conform with the requirements as
therein set forth (Section 9) or as may be directed by the Commission, it obviously treats of
decisions of Labor Arbiters before March 21,1989. With more reason these interim rules be
made to apply to the instant case since the decision hereof (sic) was rendered thereafter. 11

Unable to accept the above Order, petitioner filed the instant petition on 26 October 1989  raising
12

the issues adverted to in the introductory portion of this decision under the following assignment of
errors:
 A. THE LABOR ARBITER A QUO AND THE NLRC, IN ORDERING THE REINSTATEMENT
OF THE PRIVATE RESPONDENTS PENDING APPEAL AND IN PROVIDING FOR
SECTION 2 OF THE INTERIM RULES, RESPECTIVELY, ACTED WITHOUT AND IN
EXCESS OF JURISDICTION SINCE THE BASIS FOR SAID ORDER AND INTERIM RULE,
i.e., SECTION 12 OF R.A. 6715 IS VIOLATIVE OF THE CONSTITUTIONAL GUARANTY
OF DUE PROCESS IT BEING OPPRESSIVE AND UNREASONABLE.

B. GRANTING ARGUENDO THAT THE PROVISION IN(SIC) REINSTATEMENT PENDING

APPEAL IS VALID, NONETHELESS, THE LABOR ARBITER A QUO AND THE NLRC
STILL ACTED IN EXCESS AND WITHOUT JURISDICTION IN RETROACTIVELY
APPLYING SAID PROVISION TO PENDING LABOR CASES.

In Our resolution of 7 March 1989, We required the respondents to comment on the petition.

Respondent NLRC, through the Office of the Solicitor General, filed its Comment on 20 November
1989.  Meeting squarely the issues raised by petitioner, it submits that the provision concerning the
13

mandatory and automatic reinstatement of an employee whose dismissal is found unjustified by the
labor arbiter is a valid exercise of the police power of the state and the contested provision "is then a
police legislation."

As regards the retroactive application thereof, it maintains that being merely procedural in nature, it
can apply to cases pending at the time of its effectivity on the theory that no one can claim a vested
right in a rule of procedure. Moreover, such a law is compatible with the constitutional provision on
protection to labor.

On 11 December 1989, private respondents filed a Manifestation  informing the Court that they are
14

adopting the Comment filed by the Solicitor General and stressing that petitioner failed to comply
with the requisites for a valid petition for certiorari under Rule 65 of the Rules of Court.

On 20 December 1989, petitioner filed a Rejoinder  to the Comment of the Solicitor General.
15

In the resolution of 11 January 1990,  We considered the Comments as respondents' Answers, gave
16

due course to the petition, and directed that the case be calendared for deliberation.

In urging Us to declare as unconstitutional that portion of Section 223 of the Labor Code introduced
by Section 12 of R.A. No. 6715, as well as the implementing provision covered by Section 2 of the
NLRC Interim Rules, allowing immediate execution, even pending appeal, of the reinstatement
aspect of a decision of a labor arbiter reinstating a dismissed or separated employee, petitioner
submits that said portion violates the due process clause of the Constitution in that it is oppressive
and unreasonable. It argues that a reinstatement pending appeal negates the right of the employer
to self-protection for it has been ruled that an employer cannot be compelled to continue in
employment an employee guilty of acts inimical to the interest of the employer; the right of an
employer to dismiss is consistent with the legal truism that the law, in protecting the rights of the
laborer, authorizes neither the oppression nor the destruction of the employer. For, social justice
should be implemented not through mistaken sympathy for or misplaced antipathy against any
group, but even-handedly and fairly. 17

To clinch its case, petitioner tries to demonstrate the oppressiveness of reinstatement pending
appeal by portraying the following consequences: (a) the employer would be compelled to hire
additional employees or adjust the duties of other employees simply to have someone watch over
the reinstated employee to prevent the commission of further acts prejudicial to the employer, (b)
reinstatement of an undeserving, if not undesirable, employee may demoralize the rank and file, and
(c) it may encourage and embolden not only the reinstated employees but also other employees to
commit similar, if not graver infractions.

These rationalizations and portrayals are misplaced and are purely conjectural which, unfortunately,
proceed from a misunderstanding of the nature and scope of the relief of execution pending appeal.

Execution pending appeal is interlinked with the right to appeal. One cannot be divorced from the
other. The latter may be availed of by the losing party or a party who is not satisfied with a judgment,
while the former may be applied for by the prevailing party during the pendency of the appeal. The
right to appeal, however, is not a constitutional, natural or inherent right. It is a statutory privilege of
statutory origin  and, therefore, available only if granted or provided by statute. The law may then
18

validly provide limitations or qualifications thereto or relief to the prevailing party in the event an
appeal is interposed by the losing party. Execution pending appeal is one such relief long recognized
in this jurisdiction. The Revised Rules of Court allows execution pending appeal and the grant
thereof is left to the discretion of the court upon good reasons to be stated in a special order. 19

Before its amendment by Section 12 of R.A. No. 6715, Article 223 of the Labor Code already
allowed execution of decisions of the NLRC pending their appeal to the Secretary of Labor and
Employment.

In authorizing execution pending appeal of the reinstatement aspect of a decision of the Labor
Arbiter reinstating a dismissed or separated employee, the law itself has laid down a compassionate
policy which, once more, vivifies and enhances the provisions of the 1987 Constitution on labor and
the working-man.

These provisions are the quintessence of the aspirations of the workingman for recognition of his
role in the social and economic life of the nation, for the protection of his rights, and the promotion of
his welfare. Thus, in the Article on Social Justice and Human Rights of the Constitution,  which
20

principally directs Congress to give highest priority to the enactment of measures that protect and
enhance the right of all people to human dignity, reduce social, economic, and political inequalities,
and remove cultural inequities by equitably diffusing wealth and political power for the common
good, the State is mandated to afford full protection to labor, local and overseas, organized and
unorganized, and promote full employment and equality of employment opportunities for all; to
guarantee the rights of all workers to self-organization, collective bargaining and negotiations, and
peaceful concerted activities, including the right to strike in accordance with law, security of tenure,
human conditions of work, and a living wage, to participate in policy and decision-making processes
affecting their rights and benefits as may be provided by law; and to promote the principle of shared
responsibility between workers and employers and the preferential use of voluntary modes in settling
disputes. Incidentally, a study of the Constitutions of various nations readily reveals that it is only our
Constitution which devotes a separate article on Social Justice and Human Rights. Thus, by no less
than its fundamental law, the Philippines has laid down the strong foundations of a truly just and
humane society. This Article addresses itself to specified areas of concern labor, agrarian and
natural resources reform, urban land reform and housing, health, working women, and people's
organizations and reaches out to the underprivileged sector of society, for which reason the
President of the Constitutional Commission of 1986, former Associate Justice of this Court Cecilia
Muñoz-Palma, aptly describes this Article as the "heart of the new Charter." 21

These duties and responsibilities of the State are imposed not so much to express sympathy for the
workingman as to forcefully and meaningfully underscore labor as a primary social and economic
force, which the Constitution also expressly affirms With equal intensity.  Labor is an indispensable
22

partner for the nation's progress and stability.

If in ordinary civil actions execution of judgment pending appeal is authorized for reasons the
determination of which is merely left to the discretion of the judge, We find no plausible reason to
withhold it in cases of decisions reinstating dismissed or separated employees. In such cases, the
poor employees had been deprived of their only source of livelihood, their only means of support for
their family their very lifeblood. To Us, this special circumstance is far better than any other which a
judge, in his sound discretion, may determine. In short, with respect to decisions reinstating
employees, the law itself has determined a sufficiently overwhelming reason for its execution
pending appeal.

The validity of the questioned law is not only supported and sustained by the foregoing
considerations. As contended by the Solicitor General, it is a valid exercise of the police power of the
State. Certainly, if the right of an employer to freely discharge his employees is subject to regulation
by the State, basically in the exercise of its permanent police power on the theory that the
preservation of the lives of the citizens is a basic duty of the State, that is more vital than the
preservation of corporate profits.  Then, by and pursuant to the same power, the State may
23

authorize an immediate implementation, pending appeal, of a decision reinstating a dismissed or

separated employee since that saving act is designed to stop, although temporarily since the appeal
may be decided in favor of the appellant, a continuing threat or danger to the survival or even the life
of the dismissed or separated employee and its family.

The charge then that the challenged law as well as the implementing rule are unconstitutional is
absolutely baseless.  Laws are presumed constitutional.  To justify nullification of a law, there must
1âwphi1
24

be a clear and unequivocal breach of the Constitution, not a doubtful and argumentative implication;
a law shall not be declared invalid unless the conflict with the constitution is clear beyond reasonable
doubt.  In Parades, et al. vs. Executive Secretary  We stated:
25 26

2. For one thing, it is in accordance with the settled doctrine that between two possible
constructions, one avoiding a finding of unconstitutionality and the other yielding such a
result, the former is to be preferred. That which will save, not that which will destroy,
commends itself for acceptance. After all, the basic presumption all these years is one of
validity. The onerous task of proving otherwise is on the party seeking to nullify a statute. It
must be proved by clear and convincing evidence that there is an infringement of a
constitutional provision, save in those cases where the challenged act is void on its face.
Absent such a showing, there can be no finding of unconstitutionality. A doubt, even if well-
founded, does not suffice. Justice Malcolm's aphorism is apropos: To doubt is to sustain. 27

The reason for this:

... can be traced to the doctrine of separation of powers which enjoins on each department a
proper respect for the acts of the other departments. ... The theory is that, as the joint act of
the legislative and executive authorities, a law is supposed to have been carefully studied
and determined to be constitution before it was finally enacted. Hence, as long as there is
some other basis that can be used by the courts for its decision, the constitutionality of the
challenged law will not be touched upon and the case will be decided on other available
grounds. 28

The issue concerning Section 17 of the NLRC Interim Rules does not deserve a measure of
attention. The reference to it in the Order of the Labor Arbiter of 5 October 1989 was unnecessary
since the procedure of the appeal proper is not involved in this case. Moreover, the questioned
interim rules of the NLRC, promulgated on 8 August 1989, can validly be given retroactive effect.
They are procedural or remedial in character, promulgated pursuant to the authority vested upon it
under Article 218(a) of the Labor Code of the Philippines, as amended. Settled is the rule that
procedural laws may be given retroactive effect.  There are no vested rights in rules of
29

procedure.  A remedial statute may be made applicable to cases pending at the time of its
30

enactment. 31

WHEREFORE, the petition is hereby DISMISSED for lack of merit. Costs against petitioner.

SO ORDERED.

G.R. No. 94723 August 21, 1997

KAREN E. SALVACION, minor, thru Federico N. Salvacion, Jr., father and Natural Guardian,
and Spouses FEDERICO N. SALVACION, JR., and EVELINA E. SALVACION, petitioners,
vs.
CENTRAL BANK OF THE PHILIPPINES, CHINA BANKING CORPORATION and GREG
BARTELLI y NORTHCOTT, respondents.

TORRES, JR., J.:

In our predisposition to discover the "original intent" of a statute, courts become the unfeeling pillars
of the status quo. Ligle do we realize that statutes or even constitutions are bundles of compromises
thrown our way by their framers. Unless we exercise vigilance, the statute may already be out of
tune and irrelevant to our day.

The petition is for declaratory relief. It prays for the following reliefs:

a.) Immediately upon the filing of this petition, an Order be issued restraining the
respondents from applying and enforcing Section 113 of Central Bank Circular No.
960;

b.) After hearing, judgment be rendered:

1.) Declaring the respective rights and duties of petitioners and respondents;

2.) Adjudging Section 113 of Central Bank Circular No. 960 as contrary to the
provisions of the Constitution, hence void; because its provision that "Foreign
currency deposits shall be exempt from attachment, garnishment, or any other order
or process of any court, legislative body, government agency or any administrative
body whatsoever

i.) has taken away the right of petitioners to have the bank deposit of
defendant Greg Bartelli y Northcott garnished to satisfy the judgment
rendered in petitioners' favor in violation of substantive due process
guaranteed by the Constitution;

ii.) has given foreign currency depositors an undue favor or a class

privilege in violation of the equal protection clause of the Constitution;

iii.) has provided a safe haven for criminals like the herein respondent
Greg Bartelli y Northcott since criminals could escape civil liability for
 their wrongful acts by merely converting their money to a foreign
currency and depositing it in a foreign currency deposit account with
an authorized bank.

The antecedent facts:

On February 4, 1989, Greg Bartelli y Northcott, an American tourist, coaxed and lured petitioner
Karen Salvacion, then 12 years old to go with him to his apartment. Therein, Greg Bartelli detained
Karen Salvacion for four days, or up to February 7, 1989 and was able to rape the child once on
February 4, and three times each day on February 5, 6, and 7, 1989. On February 7, 1989, after
policemen and people living nearby, rescued Karen, Greg Bartelli was arrested and detained at the
Makati Municipal Jail. The policemen recovered from Bartelli the following items: 1.) Dollar Check
No. 368, Control No. 021000678-1166111303, US 3,903.20; 2.) COCOBANK Bank Book No. 104-
108758-8 (Peso Acct.); 3.) Dollar Account — China Banking Corp., US$/A#54105028-2; 4.) ID-122-
30-8877; 5.) Philippine Money (P234.00) cash; 6.) Door Keys 6 pieces; 7.) Stuffed Doll (Teddy Bear)
used in seducing the complainant.

On February 16, 1989, Makati Investigating Fiscal Edwin G. Condaya filed against Greg Bartelli,
Criminal Case No. 801 for Serious Illegal Detention and Criminal Cases Nos. 802, 803, 804, and 805
for four (4) counts of Rape. On the same day, petitioners filed with the Regional Trial Court of Makati
Civil Case No. 89-3214 for damages with preliminary attachment against Greg Bartelli. On February
24, 1989, the day there was a scheduled hearing for Bartelli's petition for bail the latter escaped from
jail.

On February 28, 1989, the court granted the fiscal's Urgent Ex-Parte Motion for the Issuance of
Warrant of Arrest and Hold Departure Order. Pending the arrest of the accused Greg Bartelli y
Northcott, the criminal cases were archived in an Order dated February 28, 1989.

Meanwhile, in Civil Case No. 89-3214, the Judge issued an Order dated February 22, 1989 granting
the application of herein petitioners, for the issuance of the writ of preliminary attachment. After
petitioners gave Bond No. JCL (4) 1981 by FGU Insurance Corporation in the amount of
P100,000.00, a Writ of Preliminary Attachment was issued by the trial court on February 28, 1989.

On March 1, 1989, the Deputy Sheriff of Makati served a Notice of Garnishment on China Banking
Corporation. In a letter dated March 13, 1989 to the Deputy Sheriff of Makati, China Banking
Corporation invoked Republic Act No. 1405 as its answer to the notice of garnishment served on it.
On March 15, 1989, Deputy Sheriff of Makati Armando de Guzman sent his reply to China Banking
Corporation saying that the garnishment did not violate the secrecy of bank deposits since the
disclosure is merely incidental to a garnishment properly and legally made by virtue of a court order
which has placed the subject deposits in custodia legis. In answer to this letter of the Deputy Sheriff
of Makati, China Banking Corporation, in a letter dated March 20, 1989, invoked Section 113 of
Central Bank Circular No. 960 to the effect that the dollar deposits or defendant Greg Bartelli are
exempt from attachment, garnishment, or any other order or process of any court, legislative body,
government agency or any administrative body, whatsoever.

This prompted the counsel for petitioners to make an inquiry with the Central Bank in a letter dated
April 25, 1989 on whether Section 113 of CB Circular No. 960 has any exception or whether said
section has been repealed or amended since said section has rendered nugatory the substantive
right of the plaintiff to have the claim sought to be enforced by the civil action secured by way of the
writ of preliminary attachment as granted to the plaintiff under Rule 57 of the Revised Rules of Court.
The Central Bank responded as follows:
 May 26, 1989

Ms. Erlinda S. Carolino

12 Pres. Osmena Avenue
South Admiral Village
Paranaque, Metro Manila

Dear Ms. Carolino:

This is in reply to your letter dated April 25, 1989 regarding your inquiry on Section
113, CB Circular No. 960 (1983).

The cited provision is absolute in application. It does not admit of any exception, nor
has the same been repealed nor amended.

The purpose of the law is to encourage dollar accounts within the country's banking
system which would help in the development of the economy. There is no intention to
render futile the basic rights of a person as was suggested in your subject letter. The
law may be harsh as some perceive it, but it is still the law. Compliance is, therefore,
enjoined.

Very truly yours,

(SGD) AGAPITO S. FAJARDO

Director1

Meanwhile, on April 10, 1989, the trial court granted petitioners' motion for leave to serve summons
by publication in the Civil Case No. 89-3214 entitled "Karen Salvacion, et al. vs. Greg Bartelli y
Northcott." Summons with the complaint was a published in the Manila Times once a week for three
consecutive weeks. Greg Bartelli failed to file his answer to the complaint and was declared in
default on August 7, 1989. After hearing the case ex-parte, the court rendered judgment in favor of
petitioners on March 29, 1990, the dispositive portion of which reads:

WHEREFORE, judgment is hereby rendered in favor of plaintiffs and against

defendant, ordering the latter:

1. To pay plaintiff Karen E. Salvacion the amount of P500,000.00 as moral damages;

2. To pay her parents, plaintiffs spouses Federico N. Salvacion, Jr., and Evelina E.
Salvacion the amount of P150,000.00 each or a total of P300,000.00 for both of
them;

3. To pay plaintiffs exemplary damages of P100,000.00; and

4. To pay attorney's fees in an amount equivalent to 25% of the total amount of

damages herein awarded;

5. To pay litigation expenses of P10,000.00; plus

6. Costs of the suit.

 SO ORDERED.

The heinous acts of respondent Greg Bartelli which gave rise to the award were related in graphic
detail by the trial court in its decision as follows:

The defendant in this case was originally detained in the municipal jail of Makati but
was able to escape therefrom on February 24, 1989 as per report of the Jail Warden
of Makati to the Presiding Judge, Honorable Manuel M. Cosico of the Regional Trial
Court of Makati, Branch 136, where he was charged with four counts of Rape and
Serious Illegal Detention (Crim. Cases Nos. 802 to 805). Accordingly, upon motion of
plaintiffs, through counsel, summons was served upon defendant by publication in
the Manila Times, a newspaper of general circulation as attested by the Advertising
Manager of the Metro Media Times, Inc., the publisher of the said newspaper.
Defendant, however, failed to file his answer to the complaint despite the lapse of the
period of sixty (60) days from the last publication; hence, upon motion of the
plaintiffs, through counsel, defendant was declared in default and plaintiffs were
authorized to present their evidence ex parte.

In support of the complaint, plaintiffs presented as witnesses the minor Karen E.

Salvacion, her father, Federico N. Salvacion, Jr., a certain Joseph Aguilar and a
certain Liberato Madulio, who gave the following testimony:

Karen took her first year high school in St. Mary's Academy in Pasay City but has
recently transferred to Arellano University for her second year.

In the afternoon of February 4, 1989, Karen was at the Plaza Fair Makati Cinema
Square, with her friend Edna Tangile whiling away her free time. At about 3:30 p.m.
while she was finishing her snack on a concrete bench in front of Plaza Fair, an
American approached her. She was then alone because Edna Tangile had already
left, and she was about to go home. (TSN, Aug. 15, 1989, pp. 2 to 5)

The American asked her name and introduced himself as Greg Bartelli. He sat
beside her when he talked to her. He said he was a Math teacher and told her that
he has a sister who is a nurse in New York. His sister allegedly has a daughter who
is about Karen's age and who was with him in his house along Kalayaan Avenue.
(TSN, Aug. 15, 1989, pp. 4-5)

The American asked Karen what was her favorite subject and she told him it's
Pilipino. He then invited her to go with him to his house where she could teach
Pilipino to his niece. He even gave her a stuffed toy to persuade her to teach his
niece. (Id., pp. 5-6)

They walked from Plaza Fair along Pasong Tamo, turning right to reach the
defendant's house along Kalayaan Avenue. (Id., p. 6)

When they reached the apartment house, Karen noticed that defendant's alleged
niece was not outside the house but defendant told her maybe his niece was inside.
When Karen did not see the alleged niece inside the house, defendant told her
maybe his niece was upstairs, and invited Karen to go upstairs. (Id., p. 7)
Upon entering the bedroom defendant suddenly locked the door. Karen became
nervous because his niece was not there. Defendant got a piece of cotton cord and
tied Karen's hands with it, and then he undressed her. Karen cried for help but
defendant strangled her. He took a packing tape and he covered her mouth with it
and he circled it around her head. (Id., p. 7)

Then, defendant suddenly pushed Karen towards the bed which was just near the
door. He tied her feet and hands spread apart to the bed posts. He knelt in front of
her and inserted his finger in her sex organ. She felt severe pain. She tried to shout
but no sound could come out because there were tapes on her mouth. When
defendant withdrew his finger it was full of blood and Karen felt more pain after the
withdrawal of the finger. (Id., p. 8)

He then got a Johnson's Baby Oil and he applied it to his sex organ as well as to her
sex organ. After that he forced his sex organ into her but he was not able to do so.
While he was doing it, Karen found it difficult to breathe and she perspired a lot while
feeling severe pain. She merely presumed that he was able to insert his sex organ a
little, because she could not see. Karen could not recall how long the defendant was
in that position. (Id. pp. 8-9)

After that, he stood up and went to the bathroom to wash. He also told Karen to take
a shower and he untied her hands. Karen could only hear the sound of the water
while the defendant, she presumed, was in the bathroom washing his sex organ.
When she took a shower more blood came out from her. In the meantime, defendant
changed the mattress because it was full of blood. After the shower, Karen was
allowed by defendant to sleep. She fell asleep because she got tired crying. The
incident happened at about 4:00 p.m. Karen had no way of determining the exact
time because defendant removed her watch. Defendant did not care to give her food
before she went to sleep. Karen woke up at about 8:00 o'clock the following morning.
(Id., pp. 9-10)

The following day, February 5, 1989, a Sunday, after a breakfast of biscuit and coke
at about 8:30 to 9:00 a.m. defendant raped Karen while she was still bleeding. For
lunch, they also took biscuit and coke. She was raped for the second time at about
12:00 to 2:00 p.m. In the evening, they had rice for dinner which defendant had
stored downstairs; it was he who cooked the rice that is why it looks like "lugaw". For
the third time, Karen was raped again during the night. During those three times
defendant succeeded in inserting his sex organ but she could not say whether the
organ was inserted wholly.

Karen did not see any firearm or any bladed weapon. The defendant did not tie her
hands and feet nor put a tape on her mouth anymore but she did not cry for help for
fear that she might be killed; besides, all the windows and doors were closed. And
even if she shouted for help, nobody would hear her. She was so afraid that if
somebody would hear her and would be able to call the police, it was still possible
that as she was still inside the house, defendant might kill her. Besides, the
defendant did not leave that Sunday, ruling out her chance to call for help. At
nighttime he slept with her again. (TSN, Aug. 15, 1989, pp. 12-14)

On February 6, 1989, Monday, Karen was raped three times, once in the morning for
thirty minutes after a breakfast of biscuits; again in the afternoon; and again in the
evening. At first, Karen did not know that there was a window because everything
was covered by a carpet, until defendant opened the window for around fifteen
minutes or less to let some air in, and she found that the window was covered by
styrofoam and plywood. After that, he again closed the window with a hammer and
he put the styrofoam, plywood, and carpet back. (Id., pp. 14-15)

That Monday evening, Karen had a chance to call for help, although defendant left
but kept the door closed. She went to the bathroom and saw a small window covered
by styrofoam and she also spotted a small hole. She stepped on the bowl and she
cried for help through the hole. She cried: "Maawa no po kayo so akin. Tulungan
n'yo akong makalabas dito. Kinidnap ako!" Somebody heard her. It was a woman,
probably a neighbor, but she got angry and said she was "istorbo". Karen pleaded for
help and the woman told her to sleep and she will call the police. She finally fell
asleep but no policeman came. (TSN, Aug. 15, 1989, pp. 15-16)

She woke up at 6:00 o'clock the following morning, and she saw defendant in bed,
this time sleeping. She waited for him to wake up. When he woke up, he again got
some food but he always kept the door locked. As usual, she was merely fed with
biscuit and coke. On that day, February 7, 1989, she was again raped three times.
The first at about 6:30 to 7:00 a.m., the second at about 8:30 — 9:00, and the third
was after lunch at 12:00 noon. After he had raped her for the second time he left but
only for a short while. Upon his return, he caught her shouting for help but he did not
understand what she was shouting about. After she was raped the third time, he left
the house. (TSN, Aug. 15, 1989, pp. 16-17) She again went to the bathroom and
shouted for help. After shouting for about five minutes, she heard many voices. The
voices were asking for her name and she gave her name as Karen Salvacion. After a
while, she heard a voice of a woman saying they will just call the police. They were
also telling her to change her clothes. She went from the bathroom to the room but
she did not change her clothes being afraid that should the neighbors call for the
police and the defendant see her in different clothes, he might kill her. At that time
she was wearing a T-shirt of the American because the latter washed her dress. (Id.,
p. 16)

Afterwards, defendant arrived and he opened the door. He asked her if she had
asked for help because there were many policemen outside and she denied it. He
told her to change her clothes, and she did change to the one she was wearing on
Saturday. He instructed her to tell the police that she left home and willingly; then he
went downstairs but he locked the door. She could hear people conversing but she
could not understand what they were saying. (Id., p. 19)

When she heard the voices of many people who were conversing downstairs, she
knocked repeatedly at the door as hard as she could. She heard somebody going
upstairs and when the door was opened, she saw a policeman. The policeman asked
her name and the reason why she was there. She told him she was kidnapped.
Downstairs, he saw about five policemen in uniform and the defendant was talking to
them. "Nakikipag-areglo po sa mga pulis," Karen added. "The policeman told him to
just explain at the precinct. (Id., p. 20)

They went out of the house and she saw some of her neighbors in front of the house.
They rode the car of a certain person she called Kuya Boy together with defendant,
the policeman, and two of her neighbors whom she called Kuya Bong Lacson and
one Ate Nita. They were brought to Sub-Station I and there she was investigated by
a policeman. At about 2:00 a.m., her father arrived, followed by her mother together
 with some of their neighbors. Then they were brought to the second floor of the
police headquarters. (Id., p. 21)

At the headquarters, she was asked several questions by the investigator. The
written statement she gave to the police was marked as Exhibit A. Then they
proceeded to the National Bureau of Investigation together with the investigator and
her parents. At the NBI, a doctor, a medico-legal officer, examined her private parts.
It was already 3:00 in the early morning of the following day when they reached the
NBI. (TSN, Aug. 15, 1989, p. 22) The findings of the medico-legal officer has been
marked as Exhibit B.

She was studying at the St. Mary's Academy in Pasay City at the time of the incident
but she subsequently transferred to Apolinario Mabini, Arellano University, situated
along Taft Avenue, because she was ashamed to be the subject of conversation in
the school. She first applied for transfer to Jose Abad Santos, Arellano University
along Taft Avenue near the Light Rail Transit Station but she was denied admission
after she told the school the true reason for her transfer. The reason for their denial
was that they might be implicated in the case. (TSN, Aug. 15, 1989, p. 46)

xxx xxx xxx

After the incident, Karen has changed a lot. She does not play with her brother and
sister anymore, and she is always in a state of shock; she has been absent-minded
and is ashamed even to go out of the house. (TSN, Sept. 12, 1989, p. 10) She
appears to be restless or sad, (Id., p. 11) The father prays for P500,000.00 moral
damages for Karen for this shocking experience which probably, she would always
recall until she reaches old age, and he is not sure if she could ever recover from this
experience. (TSN, Sept. 24, 1989, pp. 10-11)

Pursuant to an Order granting leave to publish notice of decision, said notice was published in the
Manila Bulletin once a week for three consecutive weeks. After the lapse of fifteen (15) days from
the date of the last publication of the notice of judgment and the decision of the trial court had
become final, petitioners tried to execute on Bartelli's dollar deposit with China Banking Corporation.
Likewise, the bank invoked Section 113 of Central Bank Circular No. 960.

Thus, petitioners decided to seek relief from this Court.

The issues raised and the arguments articulated by the parties boil down to two:

May this Court entertain the instant petition despite the fact that original jurisdiction in petitions for
declaratory relief rests with the lower court? Should Section 113 of Central Bank Circular No. 960
and Section 8 of R.A. 6426, as amended by P.D. 1246, otherwise known as the Foreign Currency
Deposit Act be made applicable to a foreign transient?

Petitioners aver as heretofore stated that Section 113 of Central Bank Circular No. 960 providing
that "Foreign currency deposits shall be exempt from attachment, garnishment, or any other order or
process of any court, legislative body, government agency or any administrative body whatsoever."
should be adjudged as unconstitutional on the grounds that: 1.) it has taken away the right of
petitioners to have the bank deposit of defendant Greg Bartelli y Northcott garnished to satisfy the
judgment rendered in petitioners' favor in violation of substantive due process guaranteed by the
Constitution; 2.) it has given foreign currency depositors an undue favor or a class privilege in
violation of the equal protection clause of the Constitution; 3.) it has provided a safe haven for
criminals like the herein respondent Greg Bartelli y Northcott since criminals could escape civil
liability for their wrongful acts by merely converting their money to a foreign currency and depositing
it in a foreign currency deposit account with an authorized bank; and 4.) The Monetary Board, in
issuing Section 113 of Central Bank Circular No. 960 has exceeded its delegated quasi-legislative
power when it took away: a.) the plaintiffs substantive right to have the claim sought to be enforced
by the civil action secured by way of the writ of preliminary attachment as granted by Rule 57 of the
Revised Rules of Court; b.) the plaintiffs substantive right to have the judgment credit satisfied by
way of the writ of execution out of the bank deposit of the judgment debtor as granted to the
judgment creditor by Rule 39 of the Revised Rules of Court, which is beyond its power to do so.

On the other hand, respondent Central Bank, in its Comment alleges that the Monetary Board in
issuing Section 113 of CB Circular No. 960 did not exceed its power or authority because the subject
Section is copied verbatim from a portion of R.A. No. 6426 as amended by P.D. 1246. Hence, it was
not the Monetary Board that grants exemption from attachment or garnishment to foreign currency
deposits, but the law (R.A. 6426 as amended) itself; that it does not violate the substantive due
process guaranteed by the Constitution because a.) it was based on a law; b.) the law seems to be
reasonable; c.) it is enforced according to regular methods of procedure; and d.) it applies to all
members of a class.

Expanding, the Central Bank said; that one reason for exempting the foreign currency deposits from
attachment, garnishment or any other order or process of any court, is to assure the development
and speedy growth of the Foreign Currency Deposit System and the Offshore Banking System in the
Philippines; that another reason is to encourage the inflow of foreign currency deposits into the
banking institutions thereby placing such institutions more in a position to properly channel the same
to loans and investments in the Philippines, thus directly contributing to the economic development
of the country; that the subject section is being enforced according to the regular methods of
procedure; and that it applies to all foreign currency deposits made by any person and therefore
does not violate the equal protection clause of the Constitution.

Respondent Central Bank further avers that the questioned provision is needed to promote the
public interest and the general welfare; that the State cannot just stand idly by while a considerable
segment of the society suffers from economic distress; that the State had to take some measures to
encourage economic development; and that in so doing persons and property may be subjected to
some kinds of restraints or burdens to secure the general welfare or public interest. Respondent
Central Bank also alleges that Rule 39 and Rule 57 of the Revised Rules of Court provide that some
properties are exempted from execution/attachment especially provided by law and R.A. No. 6426
as amended is such a law, in that it specifically provides, among others, that foreign currency
deposits shall be exempted from attachment, garnishment, or any other order or process of any
court, legislative body, government agency or any administrative body whatsoever.

For its part, respondent China Banking Corporation, aside from giving reasons similar to that of
respondent Central Bank, also stated that respondent China Bank is not unmindful of the inhuman
sufferings experienced by the minor Karen E. Salvacion from the beastly hands of Greg Bartelli; that
it is only too willing to release the dollar deposit of Bartelli which may perhaps partly mitigate the
sufferings petitioner has undergone; but it is restrained from doing so in view of R.A. No. 6426 and
Section 113 of Central Bank Circular No. 960; and that despite the harsh effect of these laws on
petitioners, CBC has no other alternative but to follow the same.

This Court finds the petition to be partly meritorious.

Petitioner deserves to receive the damages awarded to her by the court. But this petition for
declaratory relief can only be entertained and treated as a petition for mandamus to require
respondents to honor and comply with the writ of execution in Civil Case No. 89-3214.

This Court has no original and exclusive jurisdiction over a petition for declaratory relief.  However,
2

exceptions to this rule have been recognized. Thus, where the petition has far-reaching implications
and raises questions that should be resolved, it may be treated as one for mandamus. 3

Here is a child, a 12-year old girl, who in her belief that all Americans are good and in her gesture of
kindness by teaching his alleged niece the Filipino language as requested by the American,
trustingly went with said stranger to his apartment, and there she was raped by said American tourist
Greg Bartelli. Not once, but ten times. She was detained therein for four (4) days. This American
tourist was able to escape from the jail and avoid punishment. On the other hand, the child, having
received a favorable judgment in the Civil Case for damages in the amount of more than
P1,000,000.00, which amount could alleviate the humiliation, anxiety, and besmirched reputation
she had suffered and may continue to suffer for a long, long time; and knowing that this person who
had wronged her has the money, could not, however get the award of damages because of this
unreasonable law. This questioned law, therefore makes futile the favorable judgment and award of
damages that she and her parents fully deserve. As stated by the trial court in its decision,

Indeed, after hearing the testimony of Karen, the Court believes that it was
undoubtedly a shocking and traumatic experience she had undergone which could
haunt her mind for a long, long time, the mere recall of which could make her feel so
humiliated, as in fact she had been actually humiliated once when she was refused
admission at the Abad Santos High School, Arellano University, where she sought to
transfer from another school, simply because the school authorities of the said High
School learned about what happened to her and allegedly feared that they might be
implicated in the case.

xxx xxx xxx

The reason for imposing exemplary or corrective damages is due to the wanton and
bestial manner defendant had committed the acts of rape during a period of serious
illegal detention of his hapless victim, the minor Karen Salvacion whose only fault
was in her being so naive and credulous to believe easily that defendant, an
American national, could not have such a bestial desire on her nor capable of
committing such a heinous crime. Being only 12 years old when that unfortunate
incident happened, she has never heard of an old Filipino adage that in every forest
there is a
snake, . . . .
4

If Karen's sad fate had happened to anybody's own kin, it would be difficult for him to fathom how the
incentive for foreign currency deposit could be more important than his child's rights to said award of
damages; in this case, the victim's claim for damages from this alien who had the gall to wrong a
child of tender years of a country where he is a mere visitor. This further illustrates the flaw in the
questioned provisions.

It is worth mentioning that R.A. No. 6426 was enacted in 1983 or at a time when the country's
economy was in a shambles; when foreign investments were minimal and presumably, this was the
reason why said statute was enacted. But the realities of the present times show that the country
has recovered economically; and even if not, the questioned law still denies those entitled to due
process of law for being unreasonable and oppressive. The intention of the questioned law may be
good when enacted. The law failed to anticipate the iniquitous effects producing outright injustice
and inequality such as the case before us.

It has thus been said that —

But I also know,  that laws and institutions must go hand in hand with the progress of
5

the human mind. As that becomes more developed, more enlightened, as new
discoveries are made, new truths are disclosed and manners and opinions change
with the change of circumstances, institutions must advance also, and keep pace
with the times. . . We might as well require a man to wear still the coat which fitted
him when a boy, as civilized society to remain ever under the regimen of their
barbarous ancestors.

In his Comment, the Solicitor General correctly opined, thus:

The present petition has far-reaching implications on the right of a national to obtain
redress for a wrong committed by an alien who takes refuge under a law and
regulation promulgated for a purpose which does not contemplate the application
thereof envisaged by the alien. More specifically, the petition raises the question
whether the protection against attachment, garnishment or other court process
accorded to foreign currency deposits by PD No. 1246 and CB Circular No. 960
applies when the deposit does not come from a lender or investor but from a mere
transient or tourist who is not expected to maintain the deposit in the bank for long.

The resolution of this question is important for the protection of nationals who are
victimized in the forum by foreigners who are merely passing through.

xxx xxx xxx

. . . Respondents China Banking Corporation and Central Bank of the Philippines

refused to honor the writ of execution issued in Civil Case No. 89-3214 on the
strength of the following provision of Central Bank Circular No. 960:

Sec. 113. Exemption from attachment. — Foreign currency deposits

shall be exempt from attachment, garnishment, or any other order or
process of any court, legislative body, government agency or any
administrative body whatsoever.

Central Bank Circular No. 960 was issued pursuant to Section 7 of Republic Act No.
6426:

Sec. 7. Rules and Regulations. The Monetary Board of the Central

Bank shall promulgate such rules and regulations as may be
necessary to carry out the provisions of this Act which shall take
effect after the publication of such rules and regulations in the Official
Gazette and in a newspaper of national circulation for at least once a
week for three consecutive weeks. In case the Central Bank
promulgates new rules and regulations decreasing the rights of
depositors, the rules and regulations at the time the deposit was
made shall govern.
The aforecited Section 113 was copied from Section 8 of Republic Act NO. 6426, as
amended by P.D. 1246, thus:

Sec. 8. Secrecy of Foreign Currency Deposits. — All foreign currency

deposits authorized under this Act, as amended by Presidential
Decree No. 1035, as well as foreign currency deposits authorized
under Presidential Decree No. 1034, are hereby declared as and
considered of an absolutely confidential nature and, except upon the
written permission of the depositor, in no instance shall such foreign
currency deposits be examined, inquired or looked into by any
person, government official, bureau or office whether judicial or
administrative or legislative or any other entity whether public or
private: Provided, however, that said foreign currency deposits shall
be exempt from attachment, garnishment, or any other order or
process of any court, legislative body, government agency or any
administrative body whatsoever.

The purpose of PD 1246 in according protection against attachment, garnishment

and other court process to foreign currency deposits is stated in its whereases, viz.:

WHEREAS, under Republic Act No. 6426, as amended by

Presidential Decree No. 1035, certain Philippine banking institutions
and branches of foreign banks are authorized to accept deposits in
foreign currency;

WHEREAS, under the provisions of Presidential Decree No. 1034

authorizing the establishment of an offshore banking system in the
Philippines, offshore banking units are also authorized to receive
foreign currency deposits in certain cases;

WHEREAS, in order to assure the development and speedy growth

of the Foreign Currency Deposit System and the Offshore Banking
System in the Philippines, certain incentives were provided for under
the two Systems such as confidentiality of deposits subject to certain
exceptions and tax exemptions on the interest income of depositors
who are nonresidents and are not engaged in trade or business in the
Philippines;

WHEREAS, making absolute the protective cloak of confidentiality

over such foreign currency deposits, exempting such deposits from
tax, and guaranteeing the vested rights of depositors would better
encourage the inflow of foreign currency deposits into the banking
institutions authorized to accept such deposits in the Philippines
thereby placing such institutions more in a position to properly
channel the same to loans and investments in the Philippines, thus
directly contributing to the economic development of the country;

Thus, one of the principal purposes of the protection accorded to foreign currency
deposits is "to assure the development and speedy growth of the Foreign Currency
Deposit system and the Offshore Banking in the Philippines" (3rd Whereas).
The Offshore Banking System was established by PD No. 1034. In turn, the
purposes of PD No. 1034 are as follows:

WHEREAS, conditions conducive to the establishment of an offshore

banking system, such as political stability, a growing economy and
adequate communication facilities, among others, exist in the
Philippines;

WHEREAS, it is in the interest of developing countries to have as

wide access as possible to the sources of capital funds for economic
development;

WHEREAS, an offshore banking system based in the Philippines will

be advantageous and beneficial to the country by increasing our links
with foreign lenders, facilitating the flow of desired investments into
the Philippines, creating employment opportunities and expertise in
international finance, and contributing to the national development
effort.

WHEREAS, the geographical location, physical and human

resources, and other positive factors provide the Philippines with the
clear potential to develop as another financial center in Asia;

On the other hand, the Foreign Currency Deposit system was created by PD. No.
1035. Its purposes are as follows:

WHEREAS, the establishment of an offshore banking system in the

Philippines has been authorized under a separate decree;

WHEREAS, a number of local commercial banks, as depository bank

under the Foreign Currency Deposit Act (RA No. 6426), have the
resources and managerial competence to more actively engage in
foreign exchange transactions and participate in the grant of foreign
currency loans to resident corporations and firms;

WHEREAS, it is timely to expand the foreign currency lending

authority of the said depository banks under RA 6426 and apply to
their transactions the same taxes as would be applicable to
transaction of the proposed offshore banking units;

It is evident from the above [Whereas clauses] that the Offshore Banking System and
the Foreign Currency Deposit System were designed to draw deposits from
foreign lenders and investors (Vide second Whereas of PD No. 1034; third Whereas
of PD No. 1035). It is these deposits that are induced by the two laws and given
protection and incentives by them.

Obviously, the foreign currency deposit made by a transient or a tourist is not the
kind of deposit encouraged by PD Nos. 1034 and 1035 and given incentives and
protection by said laws because such depositor stays only for a few days in the
country and, therefore, will maintain his deposit in the bank only for a short time.
 Respondent Greg Bartelli, as stated, is just a tourist or a transient. He deposited his
dollars with respondent China Banking Corporation only for safekeeping during his
temporary stay in the Philippines.

For the reasons stated above, the Solicitor General thus submits that the dollar
deposit of respondent Greg Bartelli is not entitled to the protection of Section 113 of
Central Bank Circular No. 960 and PD No. 1246 against attachment, garnishment or
other court processes. 6

In fine, the application of the law depends on the extent of its justice. Eventually, if we rule that the
questioned Section 113 of Central Bank Circular No. 960 which exempts from attachment,
garnishment, or any other order or process of any court, legislative body, government agency or any
administrative body whatsoever, is applicable to a foreign transient, injustice would result especially
to a citizen aggrieved by a foreign guest like accused Greg Bartelli. This would negate Article 10 of
the New Civil Code which provides that "in case of doubt in the interpretation or application of laws, it
is presumed that the lawmaking body intended right and justice to prevail. "Ninguno non deue
enriquecerse tortizeramente con dano de otro." Simply stated, when the statute is silent or
ambiguous, this is one of those fundamental solutions that would respond to the vehement urge of
conscience. (Padilla vs. Padilla, 74 Phil. 377).

It would be unthinkable, that the questioned Section 113 of Central Bank No. 960 would be used as
a device by accused Greg Bartelli for wrongdoing, and in so doing, acquitting the guilty at the
expense of the innocent.

Call it what it may — but is there no conflict of legal policy here? Dollar against Peso? Upholding the
final and executory judgment of the lower court against the Central Bank Circular protecting the
foreign depositor? Shielding or protecting the dollar deposit of a transient alien depositor against
injustice to a national and victim of a crime? This situation calls for fairness against legal tyranny.

We definitely cannot have both ways and rest in the belief that we have served the ends of justice.

IN VIEW WHEREOF, the provisions of Section 113 of CB Circular No. 960 and PD No. 1246, insofar
as it amends Section 8 of R.A. No. 6426 are hereby held to be INAPPLICABLE to this case because
of its peculiar circumstances. Respondents are hereby REQUIRED to COMPLY with the writ of
execution issued in Civil Case No. 89-3214, "Karen Salvacion, et al. vs. Greg Bartelli y Northcott, by
Branch CXLIV, RTC Makati and to RELEASE to petitioners the dollar deposit of respondent Greg
Bartelli y Northcott in such amount as would satisfy the judgment.

SO ORDERED.

G.R. No. 72873 May 28, 1987

CARLOS ALONZO and CASIMIRA ALONZO, petitioners,

vs.
INTERMEDIATE APPELLATE COURT and TECLA PADUA, respondents.

Perpetuo L.B. Alonzo for petitioners.

Luis R. Reyes for private respondent.

CRUZ, J.:

The question is sometimes asked, in serious inquiry or in curious conjecture, whether we are a court
of law or a court of justice. Do we apply the law even if it is unjust or do we administer justice even
against the law? Thus queried, we do not equivocate. The answer is that we do neither because we
are a court both of law and of justice. We apply the law with justice for that is our mission and
purpose in the scheme of our Republic. This case is an illustration.

Five brothers and sisters inherited in equal pro indiviso shares a parcel of land registered in 'the
name of their deceased parents under OCT No. 10977 of the Registry of Deeds of Tarlac. 1

On March 15, 1963, one of them, Celestino Padua, transferred his undivided share of the herein petitioners for the sum of P550.00 by way of
absolute sale. 2 One year later, on April 22, 1964, Eustaquia Padua, his sister, sold her own share to the same vendees, in an instrument
denominated "Con Pacto de Retro Sale," for the sum of P 440.00. 3

By virtue of such agreements, the petitioners occupied, after the said sales, an area corresponding
to two-fifths of the said lot, representing the portions sold to them. The vendees subsequently
enclosed the same with a fence. In 1975, with their consent, their son Eduardo Alonzo and his wife
built a semi-concrete house on a part of the enclosed area. 4

On February 25, 1976, Mariano Padua, one of the five coheirs, sought to redeem the area sold to
the spouses Alonzo, but his complaint was dismissed when it appeared that he was an American
citizen .  On May 27, 1977, however, Tecla Padua, another co-heir, filed her own complaint invoking
5

the same right of redemption claimed by her brother.  6

The trial court * also dismiss this complaint, now on the ground that the right had lapsed, not having been exercised within thirty days
from notice of the sales in 1963 and 1964. Although there was no written notice, it was held that actual knowledge of the sales by the co-
heirs satisfied the requirement of the law. 7

In truth, such actual notice as acquired by the co-heirs cannot be plausibly denied. The other co-
heirs, including Tecla Padua, lived on the same lot, which consisted of only 604 square meters,
including the portions sold to the petitioners .   Eustaquia herself, who had sold her portion, was
8

staying in the same house with her sister Tecla, who later claimed redemption petition.   Moreover, 9

the petitioners and the private respondents were close friends and neighbors whose children went to
school together. 10

It is highly improbable that the other co-heirs were unaware of the sales and that they thought, as they alleged, that the area occupied by the
petitioners had merely been mortgaged by Celestino and Eustaquia. In the circumstances just narrated, it was impossible for Tecla not to
know that the area occupied by the petitioners had been purchased by them from the other. co-heirs. Especially significant was the erection
thereon of the permanent semi-concrete structure by the petitioners' son, which was done without objection on her part or of any of the other
co-heirs.

The only real question in this case, therefore, is the correct interpretation and application of the
pertinent law as invoked, interestingly enough, by both the petitioners and the private respondents.
This is Article 1088 of the Civil Code, providing as follows:

Art. 1088. Should any of the heirs sell his hereditary rights to a stranger before the
partition, any or all of the co-heirs may be subrogated to the rights of the purchaser
by reimbursing him for the price of the sale, provided they do so within the period of
one month from the time they were notified in writing of the sale by the vendor.

In reversing the trial court, the respondent court ** declared that the notice required by the said article was written notice
and that actual notice would not suffice as a substitute. Citing the same case of De Conejero v. Court of Appeals 11 applied by the trial court,
the respondent court held that that decision, interpreting a like rule in Article 1623, stressed the need for written notice although no particular
form was required.
Thus, according to Justice J.B.L. Reyes, who was the ponente of the Court, furnishing the co-heirs
with a copy of the deed of sale of the property subject to redemption would satisfy the requirement
for written notice. "So long, therefore, as the latter (i.e., the redemptioner) is informed in writing of the
sale and the particulars thereof," he declared, "the thirty days for redemption start running. "

In the earlier decision of Butte v. UY, 12 " the Court, speaking through the same learned jurist, emphasized that the written
notice should be given by the vendor and not the vendees, conformably to a similar requirement under Article 1623, reading as follows:

Art. 1623. The right of legal pre-emption or redemption shall not be exercised except
within thirty days from the notice in writing by the prospective vendor, or by the
vendors, as the case may be. The deed of sale shall not be recorded in the Registry
of Property, unless accompanied by an affidavit of the vendor that he has given
written notice thereof to all possible redemptioners.

The right of redemption of co-owners excludes that of the adjoining owners.

As "it is thus apparent that the Philippine legislature in Article 1623 deliberately selected a particular
method of giving notice, and that notice must be deemed exclusive," the Court held that notice given
by the vendees and not the vendor would not toll the running of the 30-day period.

The petition before us appears to be an illustration of the Holmes dictum that "hard cases make bad
laws" as the petitioners obviously cannot argue against the fact that there was really no written
notice given by the vendors to their co-heirs. Strictly applied and interpreted, Article 1088 can lead to
only one conclusion, to wit, that in view of such deficiency, the 30 day period for redemption had not
begun to run, much less expired in 1977.

But as has also been aptly observed, we test a law by its results; and likewise, we may add, by its
purposes. It is a cardinal rule that, in seeking the meaning of the law, the first concern of the judge
should be to discover in its provisions the in tent of the lawmaker. Unquestionably, the law should
never be interpreted in such a way as to cause injustice as this is never within the legislative intent.
An indispensable part of that intent, in fact, for we presume the good motives of the legislature, is
to render justice.

Thus, we interpret and apply the law not independently of but in consonance with justice. Law and
justice are inseparable, and we must keep them so. To be sure, there are some laws that, while
generally valid, may seem arbitrary when applied in a particular case because of its peculiar
circumstances. In such a situation, we are not bound, because only of our nature and functions, to
apply them just the same, in slavish obedience to their language. What we do instead is find a
balance between the word and the will, that justice may be done even as the law is obeyed.

As judges, we are not automatons. We do not and must not unfeelingly apply the law as it is worded,
yielding like robots to the literal command without regard to its cause and consequence. "Courts are
apt to err by sticking too closely to the words of a law," so we are warned, by Justice Holmes again,
"where these words import a policy that goes beyond them." 13 While we admittedly may not legislate, we
nevertheless have the power to interpret the law in such a way as to reflect the will of the legislature. While we may not read into the law a
purpose that is not there, we nevertheless have the right to read out of it the reason for its enactment. In doing so, we defer not to "the letter
that killeth" but to "the spirit that vivifieth," to give effect to the law maker's will.

The spirit, rather than the letter of a statute determines its construction, hence, a
statute must be read according to its spirit or intent. For what is within the spirit is
within the letter but although it is not within the letter thereof, and that which is within
the letter but not within the spirit is not within the statute. Stated differently, a thing
which is within the intent of the lawmaker is as much within the statute as if within the
 letter; and a thing which is within the letter of the statute is not within the statute
unless within the intent of the lawmakers. 14

In requiring written notice, Article 1088 seeks to ensure that the redemptioner is properly notified of the sale and to
indicate the date of such notice as the starting time of the 30-day period of redemption. Considering the shortness of
the period, it is really necessary, as a general rule, to pinpoint the precise date it is supposed to begin, to obviate any
problem of alleged delays, sometimes consisting of only a day or two.

The instant case presents no such problem because the right of redemption was invoked
not days but years after the sales were made in 1963 and 1964. The complaint was filed by Tecla
Padua in 1977, thirteen years after the first sale and fourteen years after the second sale. The delay
invoked by the petitioners extends to more than a decade, assuming of course that there was a valid
notice that tolled the running of the period of redemption.

Was there a valid notice? Granting that the law requires the notice to be written, would such notice
be necessary in this case? Assuming there was a valid notice although it was not in writing. would
there be any question that the 30-day period for redemption had expired long before the complaint
was filed in 1977?

In the face of the established facts, we cannot accept the private respondents' pretense that they
were unaware of the sales made by their brother and sister in 1963 and 1964. By requiring written
proof of such notice, we would be closing our eyes to the obvious truth in favor of their palpably false
claim of ignorance, thus exalting the letter of the law over its purpose. The purpose is clear enough:
to make sure that the redemptioners are duly notified. We are satisfied that in this case the other
brothers and sisters were actually informed, although not in writing, of the sales made in 1963 and
1964, and that such notice was sufficient.

Now, when did the 30-day period of redemption begin?

While we do not here declare that this period started from the dates of such sales in 1963 and 1964,
we do say that sometime between those years and 1976, when the first complaint for redemption
was filed, the other co-heirs were actually informed of the sale and that thereafter the 30-day period
started running and ultimately expired. This could have happened any time during the interval of
thirteen years, when none of the co-heirs made a move to redeem the properties sold. By 1977, in
other words, when Tecla Padua filed her complaint, the right of redemption had already been
extinguished because the period for its exercise had already expired.

The following doctrine is also worth noting:

While the general rule is, that to charge a party with laches in the assertion of an
alleged right it is essential that he should have knowledge of the facts upon which he
bases his claim, yet if the circumstances were such as should have induced inquiry,
and the means of ascertaining the truth were readily available upon inquiry, but the
party neglects to make it, he will be chargeable with laches, the same as if he had
known the facts. 15

It was the perfectly natural thing for the co-heirs to wonder why the spouses Alonzo, who were not among them, should enclose a portion of
the inherited lot and build thereon a house of strong materials. This definitely was not the act of a temporary possessor or a mere mortgagee.
This certainly looked like an act of ownership. Yet, given this unseemly situation, none of the co-heirs saw fit to object or at least inquire, to
ascertain the facts, which were readily available. It took all of thirteen years before one of them chose to claim the right of redemption, but
then it was already too late.

We realize that in arriving at our conclusion today, we are deviating from the strict letter of the law,
which the respondent court understandably applied pursuant to existing jurisprudence. The said
court acted properly as it had no competence to reverse the doctrines laid down by this Court in the
above-cited cases. In fact, and this should be clearly stressed, we ourselves are not abandoning the
De Conejero and Buttle doctrines. What we are doing simply is adopting an exception to the general
rule, in view of the peculiar circumstances of this case.

The co-heirs in this case were undeniably informed of the sales although no notice in writing was
given them. And there is no doubt either that the 30-day period began and ended during the 14
years between the sales in question and the filing of the complaint for redemption in 1977, without
the co-heirs exercising their right of redemption. These are the justifications for this exception.

More than twenty centuries ago, Justinian defined justice "as the constant and perpetual wish to
render every one his due." 16 That wish continues to motivate this Court when it assesses the facts and the law in every case
brought to it for decision. Justice is always an essential ingredient of its decisions. Thus when the facts warrants, we interpret the law in a
way that will render justice, presuming that it was the intention of the lawmaker, to begin with, that the law be dispensed with justice. So we
have done in this case.

WHEREFORE, the petition is granted. The decision of the respondent court is REVERSED and that
of the trial court is reinstated, without any pronouncement as to costs. It is so ordered.

Teehankee, C.J., Yap, Narvasa, Melencio-Herrera Gutierrez, Jr., Paras, Gancayco, Padilla, Bidin,
Sarmiento and Cortes, JJ., concur.

Fernan and Feliciano, JJ., are on leave.

G.R. No. 112099 February 21, 1995

ACHILLES C. BERCES, SR., petitioner,

vs.
HON. EXECUTIVE SECRETARY TEOFISTO T. GUINGONA, JR., CHIEF PRESIDENTIAL LEGAL
COUNSEL ANTONIO CARPIO and MAYOR NAOMI C. CORRAL OF TIWI, ALBAY, respondents.

QUIASON, J.:

This is a petition for certiorari and prohibition under Rule 65 of the Revised Rules of Court with
prayer for mandatory preliminary injunction, assailing the Orders of the Office of the President as
having been issued with grave abuses of discretion. Said Orders directed the stay of execution of
the decision of the Sangguniang Panlalawigan suspending the Mayor of Tiwi, Albay from office.

Petitioner filed two administrative cases against respondent Naomi C. Corral, the incumbent Mayor
of Tiwi, Albay with the Sangguniang Panlalawigan of Albay, to wit:

(1) Administrative Case No. 02-92 for abuse of authority and/or oppression for non-
payment of accrued leave benefits due the petitioner amounting to P36,779.02.

(2) Administrative Case No. 05-92 for dishonesty and abuse of authority for installing
a water pipeline which is being operated, maintained and paid for by the municipality
to service respondent's private residence and medical clinic.
On July 1, 1993, the Sangguniang Panlalawigan disposed the two Administrative cases in the
following manner:

(1) Administrative Case No. 02-92

ACCORDINGLY, respondent Mayor Naomi C. Corral of Tiwi, Albay, is hereby

ordered to pay Achilles Costo Berces, Sr. the sum of THIRTY-SIX THOUSAND AND
SEVEN HUNDRED SEVENTY-NINE PESOS and TWO CENTAVOS (P36,779.02)
per Voucher No. 352, plus legal interest due thereon from the time it was approved in
audit up to final payment, it being legally due the Complainant representing the
money value of his leave credits accruing for services rendered in the municipality
from 1988 to 1992 as a duly elected Municipal Councilor. IN ADDITION, respondent
Mayor NAOMI C. CORRAL is hereby ordered SUSPENDED from office as Municipal
Mayor of Tiwi, Albay, for a period of two (2) months, effective upon receipt hereof for
her blatant abuse of authority coupled with oppression as a public example to deter
others similarly inclined from using public office as a tool for personal vengeance,
vindictiveness and oppression at the expense of the Taxpayer (Rollo, p. 14).

(2) Administrative Case No. 05-92

WHEREFORE, premises considered, respondent Mayor NAOMI C. CORRAL of Tiwi,

Albay, is hereby sentenced to suffer the penalty of SUSPENSION from office as
Municipal Mayor thereof for a period of THREE (3) MONTHS beginning after her
service of the first penalty of suspension ordered in Administrative Case No. 02-92.
She is likewise ordered to reimburse the Municipality of Tiwi One-half of the amount
the latter have paid for electric and water bills from July to December 1992, inclusive
(Rollo, p. 16).

Consequently, respondent Mayor appealed to the Office of the President questioning the decision
and at the same time prayed for the stay of execution thereof in accordance with Section 67(b) of the
Local Government Code, which provides:

Administrative Appeals. — Decision in administrative cases may, within thirty (30)

days from receipt thereof, be appealed to the following:

x x x           x x x          x x x

(b) The Office of the President, in the case of decisions of the

sangguniang panlalawigan and the sangguniang panglungsod of
highly urbanized cities and independent component cities.

Acting on the prayer to stay execution during the pendency of the appeal, the Office of the President
issued an Order on July 28, 1993, the pertinent portions of which read as follows:

xxx xxx xxx

The stay of the execution is governed by Section 68 of R.A. No. 7160 and Section 6
of Administrative Order No. 18 dated 12 February 1987, quoted below:

Sec. 68. Execution Pending Appeal. — An appeal shall not prevent a decision from
becoming final or executory. The respondent shall be considered as having been
 placed under preventive suspension during the pendency of an appeal in the events
he wins such appeal. In the event the appeal results in an exoneration, he shall be
paid his salary and such other emoluments during the pendency of the appeal (R.A.
No. 7160).

Sec. 6 Except as otherwise provided by special laws, the execution of the

decision/resolution/order appealed from is stayed upon filing of the appeal within the
period prescribed herein. However, in all cases, at any time during the pendency of
the appeal, the Office of the President may direct or stay the execution of the
decision/resolution/order appealed from upon such terms and conditions as it may
deem just and reasonable (Adm. Order No. 18).

xxx xxx xxx

After due consideration, and in the light of the Petition for Review filed before this
Office, we find that a stay of execution pending appeal would be just and reasonable
to prevent undue prejudice to public interest.

WHEREFORE, premises considered, this Office hereby orders the suspension/stay

of execution of:

a) the Decision of the Sangguniang Panlalawigan of Albay in

Administrative Case No. 02-92 dated 1 July 1993 suspending Mayor
Naomi C. Corral from office for a period of two (2) months, and

b) the Resolution of the Sangguniang Panlalawigan of Albay in

Administrative Case. No. 05-92 dated 5 July 1993 suspending Mayor
Naomi C. Corral from office for a period of three (3) months (Rollo,
pp. 55-56).

Petitioner then filed a Motion for Reconsideration questioning the aforesaid Order of the Office of the
President.

On September 13, 1990, the Motion for Reconsideration was denied.

Hence, this petition.

II

Petitioner claims that the governing law in the instant case is R.A. No. 7160, which contains a
mandatory provision that an appeal "shall not prevent a decision from becoming final and
executory." He argues that administrative Order No. 18 dated February 12, 1987, (entitle
"Prescribing the Rules and Regulations Governing Appeals to Office the President") authorizing the
President to stay the execution of the appealed decision at any time during the pendency of the
appeal, was repealed by R.A. No. 7160, which took effect on January 1, 1991 (Rollo, pp. 5-6).

The petition is devoid of merit.

Petitioner invokes the repealing clause of Section 530 (f), R.A. No. 7160, which provides:
 All general and special laws, acts, city charters, decrees, executive orders,
administrative regulations, part or parts thereof, which are incosistent with any of the
provisions of this Code, are hereby repealed or modified accordingly.

The aforementioned clause is not an express repeal of Section 6 of Administrative Order No. 18
because it failed to identify or designate the laws or executive orders that are intended to be
repealed (cf. I Sutherland, Statutory Construction 467 [1943]).

If there is any repeal of Administrative Order No. 18 by R.A. No. 7160, it is through implication
though such kind of repeal is not favored (The Philippine American Management Co., Inc. v. The
Philippine American Management Employees Association, 49 SCRA 194 [1973]). There is even a
presumption against implied repeal.

An implied repeal predicates the intended repeal upon the condition that a substantial conflict must
be found between the new and prior laws. In the absence of an express repeal, a subsequent law
cannot be construed as repealing a prior law unless an irreconcible inconsistency and repugnancy
exists in the terms of the new and old laws (Iloilo Palay and Corn Planters Association, Inc. v.
Feliciano, 13 SCRA 377 [1965]). The two laws must be absolutely incompatible (Compania General
de Tabacos v. Collector of Customs, 46 Phil. 8 [1924]). There must be such a repugnancy between
the laws that they cannot be made to stand together (Crawford, Construction of Statutes 631 [1940]).

We find that the provisions of Section 68 of R.A. No. 7160 and Section 6 of Administrative Order No.
18 are not irreconcillably inconsistent and repugnant and the two laws must in fact be read together.

The first sentence of Section 68 merely provides that an "appeal shall not prevent a decision from
becoming final or executory." As worded, there is room to construe said provision as giving
discretion to the reviewing officials to stay the execution of the appealed decision. There is nothing
to infer therefrom that the reviewing officials are deprived of the authority to order a stay of the
appealed order. If the intention of Congress was to repeal Section 6 of Administrative Order No. 18,
it could have used more direct language expressive of such intention.

The execution of decisions pending appeal is procedural and in the absence of a clear legislative
intent to remove from the reviewing officials the authority to order a stay of execution, such authority
can provided in the rules and regulations governing the appeals of elective officials in administrative
cases.

The term "shall" may be read either as mandatory or directory depending upon a consideration of
the entire provisions in which it is found, its object and the consequences that would follow from
construing it one way or the other (cf. De Mesa v. Mencias, 18 SCRA 533 [1966]). In the case at
bench, there is no basis to justify the construction of the word as mandatory.

The Office of the President made a finding that the execution of the decision of the Sagguniang
Panlalawigan suspending respondent Mayor from office might be prejudicial to the public interest.
Thus, in order not to disrupt the rendition of service by the mayor to the public, a stay of the
execution of the decision is in order.

WHEREFORE, the petition is DISMISSED.

SO ORDERED.

G.R. No. 109404             January 22, 1996

FLORENCIO EUGENIO, doing business under the name E & S Delta Village, petitioner,
vs.
EXECUTIVE SECRETARY FRANKLIN M. DRILON, HOUSING AND LAND USE REGULATORY
BOARD (HLURB) AND PROSPERO PALMIANO, respondents.

RESOLUTION

PANGANIBAN, J.:

Did the failure to develop a subdivision constitute legal justification for the non-payment of
amortizations by a buyer on installment under land purchase agreements entered into prior to the
enactment of P.D. 957, "The Subdivision and Condominium Buyers' Protective Decree"? This is the
major question raised in the instant Petition seeking to set aside the Decision of the respondent
Executive Secretary dated March 10, 1992 in O.P. Case No. 3761, which affirmed the order of the
respondent HLURB dated September 1, 1987.

On May 10, 1972, private respondent purchased on installment basis from petitioner and his co-
owner/developer Fermin Salazar, two lots in the E & S Delta Village in Quezon City.

Acting on complaints for non-development docketed as NHA Cases Nos. 2619 and 2620 filed by the
Delta Village Homeowners' Association, Inc., the National Housing Authority rendered a resolution
on January 17, 1979 inter alia ordering petitioner to cease and desist from making further sales of
lots in said village or in any project owned by him.

While NHA Cases Nos. 2619 and 2620 were still pending, private respondent filed with the Office of
Appeals, Adjudication and Legal Affairs (OAALA) of the Human Settlements Regulatory Commission
(HSRC), a complaint (Case No. 80-589) against petitioner and spouses Rodolfo and Adelina Relevo
alleging that, in view of the above NHA resolution, he suspended payment of his amortizations, but
that petitioner resold one of the two lots to the said spouses Relevo, in whose favor title to the said
property was registered. Private respondent further alleged that he suspended his payments
because of petitioner's failure to develop the village.

Private respondent prayed for the annulment of the sale to the Relevo spouses and for
reconveyance of the lot to him.

On October 11, 1983, the OAALA rendered a decision upholding the right of petitioner to cancel the
contract with private respondent and dismissed private respondent's complaint.

On appeal, the Commission Proper of the HSRC reversed the OAALA and, applying P.D. 957,
ordered petitioner to complete the subdivision development and to reinstate private respondent's
purchase contract over one lot, and as to the other, "it appearing that Transfer Certificate of Title No.
269546 has been issued to . . . spouses Rodolfo and Ad(e)lina Relevo . . . , the management of E &
S Delta Village is hereby ordered to immediately refund to the complainant-appellant (herein private
respondent) all payments made thereon, plus interests computed at legal rates from date of receipt
hereof until fully paid."

The respondent Executive Secretary, on appeal, affirmed the decision of the HSRC and denied the
subsequent Motion for Reconsideration for lack of merit and for having been filed out of time.
Petitioner has now filed this Petition for review before the Supreme Court.
Under Revised Administrative Circular No. 1-95, "appeals from judgments or final orders of the . . .
Office of the President . . . may be taken to the Court of Appeals . . . " However, in order to hasten
the resolution of this case, which was deemed submitted for decision one and a half years ago, the
Court resolved to make an exception to the said Circular in the interest of speedy justice.

In his Petition before this Court, petitioner avers that the Executive Secretary erred in applying P.D.
957 and in concluding that the non-development of the E & S Delta Village justified private
respondent's non-payment of his amortizations. Petitioner avers that inasmuch as the land purchase
agreements were entered into in 1972, prior to the effectivity of P.D. 957 in 1976, said law cannot
govern the transaction.

We hold otherwise, and herewith rule that respondent Executive Secretary did not abuse his
discretion, and that P.D. 957 is to be given retroactive effect so as to cover even those contracts
executed prior to its enactment in 1976.

P.D. 957 did not expressly provide for retroactivity in its entirety, but such can be plainly inferred
from the unmistakable intent of the law.

The intent of the law, as culled from its preamble and from the situation, circumstances and
conditions it sought to remedy, must be enforced. On this point, a leading authority on statutory
construction stressed:

The intent of a statute is the law. . . . The intent is the vital part, the essence of the law, and
the primary rule of construction is to ascertain and give effect to the intent. The intention of
the legislature in enacting a law is the law itself, and must be enforced when ascertained,
although it may not be consistent with the strict letter of the statute. Courts will not follow the
letter of a statute when it leads away from the true intent and purpose of the legislature and
to conclusions inconsistent with the general purpose of the act. . . . In construing statutes the
proper course is to start out and follow the trite intent of the legislature and to adopt that
sense which harmonizes best with the context and promotes in the fullest manner the
apparent policy and objects of the legislature. (emphasis supplied.)
1 

It goes without saying that, as an instrument of social justice, the law must favor the weak and the
disadvantaged, including, in this instance, small lot buyers and aspiring homeowners. P.D. 957 was
enacted with no other end in view than to provide a protective mantle over helpless citizens who may
fall prey to the manipulations and machinations of "unscrupulous subdivision and condominium
sellers", and such intent is nowhere expressed more clearly than in its preamble, pertinent portions
of which read as follows:

WHEREAS, it is the policy of the State to afford its inhabitants the requirements of decent
human settlement and to provide them with ample opportunities for improving their quality of
life;

WHEREAS, numerous reports reveal that many real estate subdivision owners, developers,
operators, and/or sellers have reneged on their representations and obligations to provide
and maintain properly subdivision roads, drainage, sewerage, water systems, lighting
systems, and other similar basic requirements, thus endangering the health and safety of
home and lot buyers;

WHEREAS, reports of alarming magnitude also show cases of swindling and fraudulent

manipulations perpetrated by unscrupulous subdivision and condominium sellers and
operators, such as failure to deliver titles to the buyers or titles free from liens and
 encumbrances, and to pay real estate taxes, and fraudulent sales of the same subdivision
lots to different innocent purchasers for value; (emphasis supplied.)
2 

From a dedicated reading of the preamble, it is manifest and unarguable that the legislative intent
must have been to remedy the alarming situation by having P.D. 957 operate retrospectively even
upon contracts already in existence at the time of its enactment. Indeed, a strictly prospective
application of the statute will effectively emasculate it, for then the State will not be able to exercise
its regulatory functions and curb fraudulent schemes and practices perpetrated under or in
connection with those contracts and transactions which happen to have been entered into prior to
P.D. 957, despite obvious prejudice to the very subdivision lot buyers sought to be protected by said
law. It is hardly conceivable that the legislative authority intended to permit such a loophole to
remain and continue to be a source of misery for subdivision lot buyers well into the future.

Adding force to the arguments for the retroactivity of P.D. 957 as a whole are certain of its
provisions, viz., Sections 20, 21 and 23 thereof, which by their very terms have retroactive effect and
will impact upon even those contracts and transactions entered into prior to P.D. 957's enactment:

Sec. 20. Time of Completion. — Every owner or developer shall construct and provide the
facilities, improvements, infrastructures and other forms of development, including water
supply and lighting facilities, which are offered and indicated in the approved subdivision or
condominium plans, brochures, prospectus, printed matters, letters or in any form of
advertisement, within one year from the date of the issuance of the license for the
subdivision or condominium project or such other period of time as may be fixed by the
Authority.

Sec. 21. Sales Prior to Decree. — In cases of subdivision lots or condominium units sold or
disposed of prior to the effectivity of this Decree, it shall be incumbent upon the owner or
developer of the subdivision or condominium project to complete compliance with his or its
obligations as provided in the preceding section within two years from the date of this
Decree unless otherwise extended by the Authority or unless an adequate performance
bond is filed in accordance with Section 6 hereof.

Failure of the owner or, developer to comply with the obligations under this and the
preceding provisions shall constitute a violation punishable under Section 38 and 39 of this
Decree.

Sec. 23. Non-Forfeiture of Payments. — No installment payment made by a buyer in a

subdivision or condominium project for the lot or unit he contracted to buy shall be forfeited
in favor of the owner or developer, when the buyer, after due notice to the owner or
developer, desists from further payment due to the failure of the owner or developer to
develop the subdivision or condominium project according to the approved plans and within
the time limit for complying with the same. Such buyer may, at his option, be reimbursed the
total amount paid including amortization interests but excluding delinquency interests, with
interest thereon at the legal rate. (emphasis supplied)

On the other hand, as argued by the respondent Executive Secretary, the application of P.D. 957 to
the contracts in question will be consistent with paragraph 4 of the contracts themselves, which
expressly provides:

(4) The party of the First Part hereby binds himself to subdivide, develop and improve the
entire area covered by Transfer Certificate of Title No. 168119 of which the parcels of lands
subject of this contract is a part in accordance with the provisions of Quezon City Ordinance
 No. 6561, S-66 and the Party of the First Part further binds himself to comply with and abide
by all laws, rules and regulations respecting the subdivision and development of lots for
residential purposes as may be presently in force or may hereafter be required by laws
passed by the Congress of the Philippines or required by regulations of the Bureau of Lands,
the General Registration Office and other government agencies. (emphasis supplied)

Moreover, as P.D. 957 is undeniably applicable to the contracts in question, it follows that Section 23
thereof had been properly invoked by private respondent when he desisted from making further
payment to petitioner due to petitioner's failure to develop the subdivision project according to the
approved plans and within the time limit for complying with the same. (Such incomplete development
of the subdivision and non-performance of specific contractual and statutory obligations on the part
of the subdivision-owner had been established in the findings of the HLURB which in turn were
confirmed by the respondent Executive Secretary in his assailed Decision.) Furthermore, respondent
Executive Secretary also gave due weight to the following matters: although private respondent
started to default on amortization payments beginning May 1975, so that by the end of July 1975 he
had already incurred three consecutive arrearages in payments, nevertheless, the petitioner, who
had the cancellation option available to him under the contract, did not exercise or utilize the same in
timely fashion but delayed until May 1979 when he finally made up his mind to cancel the contracts.
But by that time the land purchase agreements had already been overtaken by the provisions of P.D.
957, promulgated on July 12, 1976. (In any event, as pointed out by respondent HLURB and
seconded by the Solicitor General, the defaults in amortization payments incurred by private
respondent had been effectively condoned by the petitioner, by reason of the latter's tolerance of the
defaults for a long period of time.)

Likewise, there is no merit in petitioner's contention that respondent Secretary exceeded his
jurisdiction in ordering the refund of private respondent's payments on Lot 12 although (according to
petitioner) only Lot 13 was the subject of the complaint. Respondent Secretary duly noted that the
supporting documents submitted substantiating the claim of non-development justified such order
inasmuch as such claim was also the basis for non-payment of amortizations on said Lot 12.

Finally, since petitioner's motion for reconsideration of the (Executive Secretary's) Decision dated
March 10, 1992 was filed only on the 21st day from receipt thereof, said decision had become final
and executory, pursuant to Section 7 of Administrative Order No. 18 dated February 12, 1987, which
provides that "(d)ecisions/ resolutions/orders of the Office of the President shall, except as otherwise
provided for by special laws, become final after the lapse of fifteen (15) days from receipt of a copy
thereof . . . , unless a motion for reconsideration thereof is filed within such period."

WHEREFORE, there being no showing of grave abuse of discretion, the petition is DENIED due
course and is hereby DISMISSED. No costs.

SO ORDERED.