3G.R. No.

110898             February 20, 1996

PEOPLE OF THE PHILIPPINES, petitioner,

vs.
HON. JUDGE ANTONIO C. EVANGELISTA, as Presiding Judge of Branch XXI, 10th Judicial
Region, RTC of Misamis Oriental, Cagayan de Oro City, and GRILDO S.
TUGONON, respondents.

DECISION

MENDOZA, J.:

Private respondent Grildo S. Tugonan was charged with frustrated homicide in the Regional Trial
Court of Misamis Oriental (Branch 21), the information against him alleging

That on or about the 26th day of May, 1988, at more or less 9:00 o'clock in the evening at
Barangay Publican+.3, Municipality of Villanueva, Province of Misamis Oriental, Republic of
the Philippines and within the jurisdiction of this Honorable Court, the above-named accused
with intent to kill and with the use of a knife, which he was then conveniently provided of, did
then and there willfully, unlawfully and feloniously assault, attack and stab Roque T. Bade
thereby inflicting upon him the following injuries, to wit:

Stab wound, right iliac area,

0.5 cm. penetrating non
perforating lacerating posterior
peritoneum, 0,5 cm.

thus performing all the acts of execution which would produce the crime of Homicide as a
consequence but which, nevertheless, did not produce it by reason of causes independent of
the will of the accused, that is by timely medical attendance which prevented his death.

CONTRARY TO and in violation of Article 249 in relation to Article 6 of the Revised Penal
Code.

After trial he was found guilty and sentenced to one year of prision correccional in its minimum
period and ordered to pay to the offended party P5,000.00 for medical expense, without subsidiary
imprisonment, and the costs. The RTC appreciated in his favor the privileged mitigating
circumstances of incomplete self-defense and the mitigating circumstance of voluntary surrender.

On appeal the Court of Appeals affirmed private respondent's conviction but modified his sentence
by imposing on him an indeterminate penalty of 2 months of arresto mayor, as minimum, to 2 years
and 4 months of prision correccional, as maximum. 1

On December 21, 1992, respondent Judge Antonio C. Evangelista of the RTC set the case for
repromulgation on January 4, 1993.

On December 28, 1992, private respondent filed a petition for probation, alleging that (1) he
2 

possessed all the qualifications and none of the disqualifications for probation under P.D. No. 968,
as amended; (2) the Court of Appeals has in fact reduced the penalty imposed on him by the trial
court; (3) in its resolution, the Court of Appeals took no action on a petition for probation which he
had earlier filed with it so that the petition could be filed with the trial court; (4) in the trial court's
decision, two mitigating circumstances of incomplete self-defense and voluntarily surrender were
appreciated in his favor; and (5) in Santos To v. Paño, the Supreme Court upheld the right of the
3 

accused to probation notwithstanding the fact that he had appealed from his conviction by the trial
court.

On February 2, 1993, the RTC ordered private respondent to report for interview to the Provincial
Probation Officer. The Provincial Probation Officer on the other hand was required to submit his
report with recommendation to the court within 60 days. 4

On February 18, 1993, Chief Probation and Parole Officer Isias B. Valdehueza recommended denial
of private respondent's application for probation on the ground that by appealing the sentence of the
trial court, when he could have then applied for probation, private respondent waived the right to
make his application. The Probation Officer thought the present case to be distinguishable
from Santos To v. Paño in the sense that in this case the original sentence imposed on private
respondent by the trial court (1 year of imprisonment) was probationable and there was no reason
for private respondent not to have filed his application for probation then, whereas in Santos To
v. Paño the penalty only became probationable after it had been reduced as a result of the appeal.

On April 16, 1993 Valdehueza reiterated his "respectful recommendation that private respondent's
5 

application for probation be denied and that a warrant of arrest be issued for him to serve his
sentence in jail."

The RTC set aside the Probation Officer's recommendation and granted private respondent's
application for probation in its order of April 23, 1993, Hence this petition by the prosecution.
6 

The issue in this case is whether the RTC committed a grave abuse of its discretion by granting
private respondent's application for probation despite the fact that he had appealed from the
judgment of his conviction of the trial court.

The Court holds that it did.

Until its amendment by P.D. No. 1990 in 1986, it was possible under P.D. No. 986, otherwise known
as the Probation Law, for the accused to take his chances on appeal by allowing probation to be
granted even after an accused had appealed his sentence and failed to obtain an acquittal, just so
long as he had not yet started to serve the sentence. Accordingly, in Santos To v. Paño, it was held
7 

that the fact that the accused had appealed did not bar him from applying for probation especially
because it was as a result of the appeal that his sentence was reduced and made the probationable
limit.

The law was, however, amended by P.D. No. 1990 which took effect on January 15, 1986 precisely
8 

to put a stop to the practice of appealing from judgments of conviction even if the sentence is
probationable for the purpose of securing an acquittal and applying for probation only if the accused
fails in his bid. Thus, as amended by P.D. No, 1990, §4 of the Probation Law now reads:

§4. Grant of Probation. Subject to the provisions of this Decree, the trial court may, after it
shall have convicted and sentenced a defendant, and upon application by said
defendant within the period for perfecting an appeal, suspend the execution of the sentence
and place the defendant on probation for such period and upon such terms and conditions
as it may deem best; Provided, That no application for probation shall be entertained or
granted if the defendant has perfected the appeal from the judgment of conviction.
 Probation may be granted whether the sentence imposes a term of imprisonment or a fine
only. An application for probation shall be filed with the trial court. The filing of the application
shall be deemed a waiver of the right to appeal.

An order granting or denying probation shall not be appealable. (Emphasis added).

Since private respondent filed his application for probation on December 28, 1992, after P.D. No.
1990 had taken effect, it is covered by the prohibition that "no application for probation shall be
9 

entertained or granted if the defendant has perfected the appeal from the judgment of conviction"
and that "the filing of the application shall be deemed a waiver of the right to appeal," Having
appealed from the judgment of the trial court and having applied for probation only after the Court of
Appeals had affirmed his conviction, private respondent was clearly precluded from the benefits of
probation.

Private respondent argues, however, that a distinction should be drawn between meritorious appeals
(like his appeal notwithstanding the appellate court's affirmance of his conviction) and unmeritorious
appeals. But the law does not make any distinction and so neither should the Court. In fact if an
appeal is truly meritorious the accused would be set free and not only given probation. Private
respondent's original sentence (1 year of prision correccional in its minimum period) and the
modified sentence imposed by the Court of Appeals (2 months of arresto mayor, as minimum, to 2
years and 4 months of prision correccional, as maximum) are probationable. Thus the fact that he
appealed meant that private respondent was taking his chances which the law precisely frowns
upon. This is precisely the evil that the amendment in P.D. No. 1990 sought to correct, since in the
words of the preamble to the amendatory law, "probation was not intended as an escape hatch and
should not be used to obstruct and delay the administration of justice, but should be availed of at the
first opportunity by offenders who are willing to be reformed and rehabilitated."

The ruling of the RTC that "[h]aving not perfected an appeal against the Court of Appeals decision,
[private respondent] is, therefore, not covered by [the amendment in] P.D. 1990" is an obvious
misreading of the law. The perfection of the appeal referred in the law refers to the .appeal taken
from a judgment of conviction by the trial court and not that of the appellate court, since under the
law an application for probation is filed with the trial court which can only grant the same "after it
shall have convicted and sentenced [the] defendant, and upon application by said defendant within
the period for perfecting an appeal. "Accordingly, in Llamado v. Court of Appeals,  it was held that
10 

the petitioner who had appealed his sentence could not subsequently apply for probation.

WHEREFORE, the petition is GRANTED and the order of April 23, 1993 of the Regional Trial Court
of Misamis Oriental (Branch 21) granting probation to private respondent Grildo S. Tugonon is SET
ASIDE.

SO ORDERED.

Regalado, Romero and Puno, JJ., concur.

P.D. No. 968, §4; as amended by P.D. No. 1287 provided:

7 

Sec. 4. Grant of Probation. Subject to the provisions of this Decree, the court
may, after it shall have convicted and sentenced a defendant but before he begins to
serve his sentence and upon his application, suspend the execution of said sentence
and place the defendant on probation for such period and upon such terms and
conditions as it may deem best.
 The prosecuting officer concerned shall be notified by the court of the filing of the
application for probation and he may submit his comment on such application within
ten days from receipt of the notification.

Probation may be granted whether the sentence imposes a term of imprisonment or

a fine with subsidiary imprisonment in ease of in solvency. An application for
probation shall be filed with the trial court, with notice to the appellate court if an
appeal has been taken from the sentence of conviction. The filing of the application
shall be deemed a waiver of the right to appeal, or the automatic withdrawal of a
pending appeal. In the latter case, however, if the application is filed on or after the
date of the judgment of the appellate court, said application shall be acted upon by
the trial court on the basis of the judgment of the appellate court

An order granting or denying probation shall not be appealable. 

G.R. No. 87416             April 8, 1991

CECILIO S. DE VILLA, petitioner,
vs.
THE HONORABLE COURT OF APPEALS, PEOPLE OF THE PHILIPPINES, HONORABLE JOB
B. MADAYAG, and ROBERTO Z. LORAY ES, respondents.

San Jose Enriquez, Lacas Santos & Borje for petitioner.

Eduardo R. Robles for private respondent.

PARAS, J.:

This petition for review on certiorari seeks to reverse and set aside the decision* of the Court of
Appeals promulgated on February 1, 1989 in CA-G.R. SP No. 16071 entitled "Cecilio S. de Villa vs.
Judge Job B. Madayag, etc. and Roberto Z. Lorayes," dismissing the petition for certiorari filed
therein.

The factual backdrop of this case, as found by the Court of Appeals, is as follows:

On October 5, 1987, petitioner Cecilio S. de Villa was charged before the Regional Trial
Court of the National Capital Judicial Region (Makati, Branch 145) with violation of Batas
Pambansa Bilang 22, allegedly committed as follows:

That on or about the 3rd day of April 1987, in the municipality of Makati, Metro
Manila, Philippines and within the jurisdiction of this Honorable Court, the above-
named accused, did, then and there willfully, unlawfully and feloniously make or draw
and issue to ROBERTO Z. LORAYEZ, to apply on account or for value a Depositors
Trust Company Check No. 3371 antedated March 31, 1987, payable to herein
complainant in the total amount of U.S. $2,500.00 equivalent to P50,000.00, said
accused well knowing that at the time of issue he had no sufficient funds in or credit
with drawee bank for payment of such check in full upon its presentment which check
when presented to the drawee bank within ninety (90) days from the date thereof
was subsequently dishonored for the reason "INSUFFICIENT FUNDS" and despite
 receipt of notice of such dishonor said accused failed to pay said ROBERTO Z.
LORAYEZ the amount of P50,000.00 of said check or to make arrangement for full
payment of the same within five (5) banking days after receiving said notice.

After arraignment and after private respondent had testified on direct examination, petitioner
moved to dismiss the Information on the following grounds: (a) Respondent court has no
jurisdiction over the offense charged; and (b) That no offense was committed since the check
involved was payable in dollars, hence, the obligation created is null and void pursuant to
Republic Act No. 529 (An Act to Assure Uniform Value of Philippine Coin and Currency).

On July 19, 1988, respondent court issued its first questioned orders stating:

Accused's motion to dismiss dated July 5, 1988, is denied for lack of merit.

Under the Bouncing Checks Law (B.P. Blg. 22), foreign checks, provided they are
either drawn and issued in the Philippines though payable outside thereof, or made
payable and dishonored in the Philippines though drawn and issued outside thereof,
are within the coverage of said law. The law likewise applied to checks drawn against
current accounts in foreign currency.

Petitioner moved for reconsideration but his motion was subsequently denied by respondent
court in its order dated September 6, 1988, and which reads:

Accused's motion for reconsideration, dated August 9, 1988, which was opposed by
the prosecution, is denied for lack of merit.1âwphi1

The Bouncing Checks Law is applicable to checks drawn against current accounts in
foreign currency (Proceedings of the Batasang Pambansa, February 7, 1979, p.
1376, cited in Makati RTC Judge (now Manila City Fiscal) Jesus F. Guerrero's The
Ramifications of the Law on Bouncing Checks, p. 5). (Rollo, Annex "A", Decision, pp.
20-22).

A petition for certiorari seeking to declare the nullity of the aforequoted orders dated July 19,
1988 and September 6, 1988 was filed by the petitioner in the Court of Appeals wherein he
contended:

(a) That since the questioned check was drawn against the dollar account of
petitioner with a foreign bank, respondent court has no jurisdiction over the same or
with accounts outside the territorial jurisdiction of the Philippines and that Batas
Pambansa Bilang 22 could have not contemplated extending its coverage over dollar
accounts;

(b) That assuming that the subject check was issued in connection with a private
transaction between petitioner and private respondent, the payment could not be
legally paid in dollars as it would violate Republic Act No. 529; and

(c) That the obligation arising from the issuance of the questioned check is null and
void and is not enforceable with the Philippines either in a civil or criminal suit. Upon
such premises, petitioner concludes that the dishonor of the questioned check
cannot be said to have violated the provisions of Batas Pambansa Bilang 22. (Rollo,
Annex "A", Decision, p. 22).
On February 1, 1989, the Court of Appeals rendered a decision, the decretal portion of which
reads:

WHEREFORE, the petition is hereby dismissed. Costs against petitioner.

SO ORDERED. (Rollo, Annex "A", Decision, p. 5)

A motion for reconsideration of the said decision was filed by the petitioner on February 7,
1989 (Rollo, Petition, p. 6) but the same was denied by the Court of Appeals in its resolution
dated March 3, 1989 (Rollo, Annex "B", p. 26).

Hence, this petition.

In its resolution dated November 13, 1989, the Second Division of this Court gave due
course to the petition and required the parties to submit simultaneously their respective
memoranda (Rollo, Resolution, p. 81).

The sole issue in this case is whether or not the Regional Trial Court of Makati has
jurisdiction over the case in question.

The petition is without merit.

Jurisdiction is the power with which courts are invested for administering justice, that is, for
hearing and deciding cases (Velunta vs. Philippine Constabulary, 157 SCRA 147 [1988]).

Jurisdiction in general, is either over the nature of the action, over the subject matter, over
the person of the defendant, or over the issues framed in the pleadings (Balais vs. Balais,
159 SCRA 37 [1988]).

Jurisdiction over the subject matter is determined by the statute in force at the time of
commencement of the action (De la Cruz vs. Moya, 160 SCRA 538 [1988]).

The trial court's jurisdiction over the case, subject of this review, can not be questioned.

Sections 10 and 15(a), Rule 110 of the Rules of Court specifically provide that:

Sec. 10. Place of the commission of the offense. The complaint or information is

sufficient if it can be understood therefrom that the offense was committed or some
of the essential ingredients thereof occured at some place within the jurisdiction of
the court, unless the particular place wherein it was committed constitutes an
essential element of the offense or is necessary for identifying the offense charged.

Sec. 15. Place where action is to be instituted. (a) Subject to existing laws, in all
criminal prosecutions the action shall be instituted and tried in the court of the
municipality or territory where the offense was committed or any of the essential
ingredients thereof took place.

In the case of People vs. Hon. Manzanilla (156 SCRA 279 [1987] cited in the case of Lim vs.
Rodrigo, 167 SCRA 487 [1988]), the Supreme Court ruled "that jurisdiction or venue is
determined by the allegations in the information."
The information under consideration specifically alleged that the offense was committed in
Makati, Metro Manila and therefore, the same is controlling and sufficient to vest jurisdiction
upon the Regional Trial Court of Makati. The Court acquires jurisdiction over the case and
over the person of the accused upon the filing of a complaint or information in court which
initiates a criminal action (Republic vs. Sunga, 162 SCRA 191 [1988]).

Moreover, it has been held in the case of Que v. People of the Philippines (154 SCRA 160
[1987] cited in the case of People vs. Grospe, 157 SCRA 154 [1988]) that "the determinative
factor (in determining venue) is the place of the issuance of the check."

On the matter of venue for violation of Batas Pambansa Bilang 22, the Ministry of
Justice, citing the case of People vs. Yabut (76 SCRA 624 [1977], laid down the following
guidelines in Memorandum Circular No. 4 dated December 15, 1981, the pertinent portion of
which reads:

(1) Venue of the offense lies at the place where the check was executed and
delivered; (2) the place where the check was written, signed or dated does not
necessarily fix the place where it was executed, as what is of decisive importance is
the delivery thereof which is the final act essential to its consummation as an
obligation; . . . (Res. No. 377, s. 1980, Filtex Mfg. Corp. vs. Manuel Chua, October
28, 1980)." (See The Law on Bouncing Checks Analyzed by Judge Jesus F.
Guerrero, Philippine Law Gazette, Vol. 7. Nos. 11 & 12, October-December, 1983, p.
14).

It is undisputed that the check in question was executed and delivered by the petitioner to
herein private respondent at Makati, Metro Manila.

However, petitioner argues that the check in question was drawn against the dollar account
of petitioner with a foreign bank, and is therefore, not covered by the Bouncing Checks Law
(B.P. Blg. 22).

But it will be noted that the law does not distinguish the currency involved in the case. As the
trial court correctly ruled in its order dated July 5, 1988:

Under the Bouncing Checks Law (B.P. Blg. 22), foreign checks, provided they are
either drawn and issued in the Philippines though payable outside thereof . . . are
within the coverage of said law.

It is a cardinal principle in statutory construction that where the law does not distinguish
courts should not distinguish.  Parenthetically, the rule is that where the law does not make
1âwphi1

any exception, courts may not except something unless compelling reasons exist to justify it
(Phil. British Assurance Co., Inc. vs. IAC, 150 SCRA 520 [1987]).

More importantly, it is well established that courts may avail themselves of the actual
proceedings of the legislative body to assist in determining the construction of a statute of
doubtful meaning (Palanca vs. City of Manila, 41 Phil. 125 [1920]). Thus, where there is
doubts as to what a provision of a statute means, the meaning put to the provision during the
legislative deliberation or discussion on the bill may be adopted (Arenas vs. City of San
Carlos, 82 SCRA 318 [1978]).
 The records of the Batasan, Vol. III, unmistakably show that the intention of the lawmakers is
to apply the law to whatever currency may be the subject thereof. The discussion on the floor
of the then Batasang Pambansa fully sustains this view, as follows:

x x x           x x x          x x x

THE SPEAKER. The Gentleman from Basilan is recognized.

MR. TUPAY. Parliamentary inquiry, Mr. Speaker.

THE SPEAKER. The Gentleman may proceed.

MR. TUPAY. Mr. Speaker, it has been mentioned by one of the Gentlemen who
interpellated that any check may be involved, like U.S. dollar checks, etc. We are
talking about checks in our country. There are U.S. dollar checks, checks, in our
currency, and many others.

THE SPEAKER. The Sponsor may answer that inquiry.

MR. MENDOZA. The bill refers to any check, Mr. Speaker, and this check may be a
check in whatever currency. This would not even be limited to U.S. dollar checks.
The check may be in French francs or Japanese yen or deutschunorhs. (sic.) If
drawn, then this bill will apply.

MR TUPAY. So it include U.S. dollar checks.

MR. MENDOZA. Yes, Mr. Speaker.

x x x           x x x          x x x

(p. 1376, Records of the Batasan, Volume III; Emphasis supplied).

PREMISES CONSIDERED, the petition is DISMISSED for lack of merit.

G.R. No. L-14787             January 28, 1961

COLGATE-PALMOLIVE PHILIPPINE, INC., petitioner,

vs.
HON. PEDRO M. GIMENEZ as Auditor General and ISMAEL MATHAY as AUDITOR OF THE
CENTRAL BANK OF THE PHILIPPINES, respondents.

Ross, Selph and Carrascoso for petitioner.

Office of the Solicitor General for respondents.

GUTIERREZ DAVID, J.:

The petitioner Colgate-Palmolive Philippines, Inc. is a corporation duly organized and existing under
Philippine laws engaged in the manufacture of toilet preparations and household remedies. On
several occasions, it imported from abroad various materials such as irish moss extract, sodium
benzoate, sodium saccharinate precipitated calcium carbonate and dicalcium phosphate, for use as
stabilizers and flavoring of the dental cream it manufactures. For every importation made of these
materials, the petitioner paid to the Central Bank of the Philippines the 17% special excise tax on the
foreign exchange used for the payment of the cost, transportation and other charges incident
thereto, pursuant to Republic Act No. 601, as amended, commonly known as the Exchange Tax
Law.

On March 14, 1956, the petitioner filed with the Central Bank three applications for refund of the 17%
special excise tax it had paid in the aggregate sum of P113,343.99. The claim for refund was based
on section 2 of Republic Act 601, which provides that "foreign exchange used for the payment of the
cost, transportation and/or other charges incident to the importation into the Philippines of . . .
stabilizer and flavors . . . shall be refunded to any importer making application therefor, upon
satisfactory proof of actual importation under the rules and regulations to be promulgated pursuant
to section seven thereof." After the applications were processed by the officer-in-charge of the
Exchange Tax Administration of the Central Bank, that official advised, the petitioner that of the total
sum of P113,343.99 claimed by it for refund, the amount of P23,958.13 representing the 17%
special excise tax on the foreign exchange used to import irish moss extract, sodium benzoate and
precipitated calcium carbonate had been approved. The auditor of the Central Bank, however,
refused to pass in audit its claims for refund even for the reduced amount fixed by the Officer-in-
Charge of the Exchange Tax Administration, on the theory that toothpaste stabilizers and flavors are
not exempt under section 2 of the Exchange Tax Law.

Petitioner appealed to the Auditor General, but the latter or, December 4, 1958 affirmed the ruling of
the auditor of the Central Bank, maintaining that the term "stabilizer and flavors" mentioned in
section 2 of the Exchange Tax Law refers only to those used in the preparation or manufacture of
food or food products. Not satisfied, the petitioner brought the case to this Court thru the present
petition for review.

The decisive issue to be resolved is whether or not the foreign exchange used by petitioner for the
importation of dental cream stabilizers and flavors is exempt from the 17% special excise tax
imposed by the Exchange Tax Law, (Republic Act No. 601) so as to entitle it to refund under section
2 thereof, which reads as follows:

SEC, 2. The tax collected under the preceding section on foreign exchange used for the
payment of the cost, transportation and/or other charges incident to importation into the
Philippines of rice, flour, canned milk, cattle and beef, canned fish, soya beans, butterfat,
chocolate, malt syrup, tapioca, stabilizer and flavors, vitamin concentrate, fertilizer, poultry
feed; textbooks, reference books, and supplementary readers approved by the Board of
Textbooks and/or established public or private educational institutions; newsprint imported
by or for publishers for use in the publication of books, pamphlets, magazines and
newspapers; book paper, book cloth, chip board imported for the printing of supplementary
readers (approved by the Board of Textbooks) to be supplied to the Government under
contracts perfected before the approval of this Act, the quantity thereof to be certified by the
Director of Printing; anesthetics, anti-biotics, vitamins, hormones, x-ray films, laboratory
reagents, biologicals, dental supplies, and pharmaceutical drugs necessary for compounding
medicines; medical and hospital supplies listed in the appendix to this Act, in quantities to be
certified by the Director of Hospitals as actually needed by the hospitals applying therefor;
drugs and medicines listed in the said appendix; and such other drugs and medicines as
may be certified by the Secretary of Health from time to time to promote and protect the
health of the people of the Philippines shall be refunded to any importer making application
therefor, upon satisfactory proof of actual importation under the rules and regulations to be
promulgated pursuant to section seven thereof." (Emphasis supplied.)
The ruling of the Auditor General that the term "stabilizer and flavors" as used in the law refers only
to those materials actually used in the preparation or manufacture of food and food products is
based, apparently, on the principle of statutory construction that "general terms may be restricted by
specific words, with the result that the general language will be limited by the specific language
which indicates the statute's object and purpose." (Statutory Construction by Crawford, 1940 ed. p.
324-325.) The rule, however, is, in our opinion, applicable only to cases where, except for one
general term, all the items in an enumeration belong to or fall under one specific class. In the case at
bar, it is true that the term "stabilizer and flavors" is preceded by a number of articles that may be
classified as food or food products, but it is likewise true that the other items immediately following it
do not belong to the same classification. Thus "fertilizer" and "poultry feed" do not fall under the
category of food or food products because they are used in the farming and poultry industries,
respectively. "Vitamin concentrate" appears to be more of a medicine than food or food product, for,
as matter of fact, vitamins are among those enumerated in the list of medicines and drugs appearing
in the appendix to the law. It should also here be stated that "cattle", which is among those listed
preceding the term in question, includes not only those intended for slaughter but also those for
breeding purposes. Again, it is noteworthy that under, Republic Act No. 814 amending the above-
quoted section of Republic Act No. 601, "industrial starch", which does not always refer to food for
human consumption, was added among the items grouped with "stabilizer and flavors". Thus, on the
basis of the grouping of the articles alone, it cannot validly be maintained that the term "stabilizer
and flavors" as used in the above-quoted provision of the Exchange Tax Law refers only to those
used in the manufacture of food and food products. This view is supported by the principle "Ubi lex
non distinguish nec nos distinguire debemos", or "where the law does not distinguish, neither do we
distinguish". (Ligget & Myers Tobacco Company vs. Collector of Internal Revenue, 53 Off. Gaz. No.
15, page 4831). Since the law does not distinguish between "stabilizer and flavors" used in the
preparation of food and those used in the manufacture of toothpaste or dental cream, we are not
authorized to make any distinction and must construe the words in their general sense. The rule of
construction that general and unlimited terms are restrained and limited by particular recitals when
used in connection with them, does not require the rejection of general terms entirely. It is intended
merely as an aid in ascertaining the intention of the legislature and is to be taken in connection with
other rules of construction. (See Handbook of the Construction and Interpretation of Laws by Black,
p. 215.216, 2nd ed.)

Having arrived at the above conclusion, we deem it now idle to pass upon the other questions raised
by the parties.

WHEREFORE, the decision under review is reversed and the respondents are hereby ordered to
audit petitioners applications for refund which were approved by the Officer-in-Charge of the
Exchange Tax Administration in the total amount of P23,958.13.

Bengzon, Bautista Angelo, Concepcion, Reyes, J.B.L., Barrera, Paredes and Dizon, JJ., concur.
Labrador, J., reserves his vote.

G.R. No. L-47757-61 January 28, 1980

THE PEOPLE OF THE PHILIPPINES, ABUNDIO R. ELLO, As 4th Assistant of Provincial Bohol
VICENTE DE LA SERNA. JR., as complainant all private prosecutor, petitioners,
vs.
HON. VICENTE B. ECHAVES, JR., as Judge of the Court of First Instance of Bohol Branch II,
ANO DACULLO, GERONIMO OROYAN, MARIO APARICI, RUPERTO CAJES and MODESTO S
SUELLO, respondents.
AQUINO, J.:p

The legal issue in this case is whether Presidential Decree No. 772, which penalizes squatting and similar acts, applies to agricultural lands.
The decree (which took effect on August 20, 1975) provides:

SECTION 1. Any person who, with the use of force, intimidation or threat, or taking
advantage of the absence or tolerance of the landowner, succeeds in occupying or
possessing the property of the latter against his will for residential, commercial or any
other purposes, shall be punished by an imprisonment ranging from six months to
one year or a fine of not less than one thousand nor more than five thousand pesos
at the discretion of the court, with subsidiary imprisonment in case of insolvency.
(2nd paragraph is omitted.)

The record shows that on October 25, 1977 Fiscal Abundio R. Ello filed with the lower court separate
informations against sixteen persons charging them with squatting as penalized by Presidential
Decree No. 772. The information against Mario Aparici which is similar to the other fifteen
informations, reads:

That sometime in the year 1974 continuously up to the present at barangay

Magsaysay, municipality of Talibon, province of Bohol, Philippines and within the
jurisdiction of this Honorable Court, the above-named accused, with stealth and
strategy, enter into, occupy and cultivate a portion of a grazing land physically
occupied, possessed and claimed by Atty. Vicente de la Serna, Jr. as successor to
the pasture applicant Celestino de la Serna of Pasture Lease Application No. 8919,
accused's entrance into the area has been and is still against the win of the offended
party; did then and there willfully, unlawfully, and feloniously squat and cultivate a
portion of the said grazing land; said cultivating has rendered a nuisance to and has
deprived the pasture applicant from the full use thereof for which the land applied for
has been intended, that is preventing applicant's cattle from grazing the whole area,
thereby causing damage and prejudice to the said applicant-possessor-occupant,
Atty. Vicente de la Serna, Jr. (sic)

Five of the informations, wherein Ano Dacullo, Geronimo Oroyan, Mario Aparici, Ruperto Cajes and
Modesto Suello were the accused, were raffled to Judge Vicente B. Echaves, Jr. of Branch II
(Criminal Cases Nos. 1824, 1828, 1832, 1833 and 1839, respectively).

Before the accused could be arraigned, Judge Echaves motu proprio issued an omnibus order
dated December 9, 1977 dismissing the five informations on the grounds (1) that it was alleged that
the accused entered the land through "stealth and strategy", whereas under the decree the entry
should be effected "with the use of force, intimidation or threat, or taking advantage of the absence
or tolerance of the landowner", and (2) that under the rule of ejusdem generis the decree does not
apply to the cultivation of a grazing land.

Because of that order, the fiscal amended the informations by using in lieu of "stealth and strategy"
the expression "with threat, and taking advantage of the absence of the ranchowner and/or tolerance
of the said ranchowner". The fiscal asked that the dismissal order be reconsidered and that the
amended informations be admitted.

The lower court denied the motion. It insisted that the phrase "and for other purposes" in the decree
does not include agricultural purposes because its preamble does not mention the Secretary of
Agriculture and makes reference to the affluent class.
From the order of dismissal, the fiscal appealed to this Court under Republic Act No. 5440. The
appeal is devoid of merit.

We hold that the lower court correctly ruled that the decree does not apply to pasture lands because
its preamble shows that it was intended to apply to squatting in urban communities or more
particularly to illegal constructions in squatter areas made by well-to-do individuals. The squating
complained of involves pasture lands in rural areas.

The preamble of the decree is quoted below:

WHEREAS, it came to my knowledge that despite the issuance of Letter of

Instruction No. 19 dated October 2, 1972, directing the Secretaries of National
Defense, Public Work. 9 and communications, Social Welfare and the Director of
Public Works, the PHHC General Manager, the Presidential Assistant on Housing
and Rehabilitation Agency, Governors, City and Municipal Mayors, and City and
District Engineers, "to remove an illegal constructions including buildings on and
along esteros and river banks, those along railroad tracks and those built without
permits on public and private property." squatting is still a major problem in urban
communities all over the country;

WHEREAS, many persons or entities found to have been unlawfully occupying public
and private lands belong to the affluent class;

WHEREAS, there is a need to further intensify the government's drive against this
illegal and nefarious practice.

It should be stressed that Letter of Instruction No. 19 refers to illegal constructions on public and
private property. It is complemented by Letter of Instruction No. 19-A which provides for the
relocation of squatters in the interest of public health, safety and peace and order.

On the other hand, it should be noted that squatting on public agricultural lands, like the grazing
lands involved in this case, is punished by Republic Act No. 947 which makes it unlawful for any
person, corporation or association to forcibly enter or occupy public agricultural lands. That law
provides:

SECTION 1. It shall be unlawful for any person corporation or association to enter or

occupy, through force, intimidation, threat, strategy or stealth, any public agriculture
land including such public lands as are granted to private individuals under the
provision of the Public Land Act or any other laws providing for the of public
agriculture lands in the Philippines and are duly covered by the corresponding
applications for the notwithstanding standing the fact that title thereto still remains in
the Government or for any person, natural or judicial to investigate induce or force
another to commit such acts.

Violations of the law are punished by a fine of not exceeding one thousand or imprisonment for not
more than one year, or both such fine and imprisonment in the discretion of the court, with subsidiary
imprisonment in case of insolvency. (See People vs. Lapasaran 100 Phil. 40.)

The rule of ejusdem generis (of the same kind or species) invoked by the trial court does not apply to
this case. Here, the intent of the decree is unmistakable. It is intended to apply only to urban
communities, particularly to illegal constructions. The rule of ejusdem generis is merely a tool of
statutory construction which is resorted to when the legislative intent is uncertain (Genato
Commercial Corp. vs. Court of Tax Appeals, 104 Phil. 615,618; 28 C.J.S. 1049-50).

WHEREFORE, the trial court's order of dismissal is affirmed. No costs.

SO ORDERED.

Barredo, Antonio, Concepcion Jr. and Abad Santos, J., concur.

G.R. No. 106719 September 21, 1993

DRA. BRIGIDA S. BUENASEDA, Lt. Col. ISABELO BANEZ, JR., ENGR. CONRADO REY
MATIAS, Ms. CORA S. SOLIS and Ms. ENYA N. LOPEZ, petitioners,
vs.
SECRETARY JUAN FLAVIER, Ombudsman CONRADO M. VASQUEZ, and NCMH NURSES
ASSOCIATION, represented by RAOULITO GAYUTIN, respondents.

Renato J. Dilag and Benjamin C. Santos for petitioners.

Danilo C. Cunanan for respondent Ombudsman.

Crispin T. Reyes and Florencio T. Domingo for private respondent.

QUIASON, J.:

This is a Petition for Certiorari, Prohibition and Mandamus, with Prayer for Preliminary Injunction or
Temporary Restraining Order, under Rule 65 of the Revised Rules of Court.

Principally, the petition seeks to nullify the Order of the Ombudsman dated January 7, 1992,
directing the preventive suspension of petitioners,
Dr. Brigida S. Buenaseda, Chief of Hospital III; Isabelo C. Banez, Jr., Administrative Officer III;
Conrado Rey Matias, Technical Assistant to the Chief of Hospital; Cora C. Solis, Accountant III; and
Enya N. Lopez, Supply Officer III, all of the National Center for Mental Health. The petition also asks
for an order directing the Ombudsman to disqualify Director Raul Arnaw and Investigator Amy de
Villa-Rosero, of the Office of the Ombudsman, from participation in the preliminary investigation of
the charges against petitioner (Rollo, pp. 2-17; Annexes to Petition, Rollo, pp. 19-21).

The questioned order was issued in connection with the administrative complaint filed with the
Ombudsman (OBM-ADM-0-91-0151) by the private respondents against the petitioners for violation
of the Anti-Graft and Corrupt Practices Act.

According to the petition, the said order was issued upon the recommendation of Director Raul
Arnaw and Investigator Amy de Villa-Rosero, without affording petitioners the opportunity to
controvert the charges filed against them. Petitioners had sought to disqualify Director Arnaw and
Investigator Villa-Rosero for manifest partiality and bias (Rollo, pp. 4-15).

On September 10, 1992, this Court required respondents' Comment on the petition.
On September 14 and September 22, 1992, petitioners filed a "Supplemental Petition (Rollo, pp.
124-130); Annexes to Supplemental Petition; Rollo pp. 140-163) and an "Urgent Supplemental
Manifestation" (Rollo,
pp. 164-172; Annexes to Urgent Supplemental Manifestation; Rollo, pp. 173-176), respectively,
averring developments that transpired after the filing of the petition and stressing the urgency for the
issuance of the writ of preliminary injunction or temporary restraining order.

On September 22, 1992, this Court ". . . Resolved to REQUIRE the respondents to MAINTAIN in the
meantime, the STATUS QUO pending filing of comments by said respondents on the original
supplemental manifestation" (Rollo, p. 177).

On September 29, 1992, petitioners filed a motion to direct respondent Secretary of Health to
comply with the Resolution dated September 22, 1992 (Rollo, pp. 182-192, Annexes, pp. 192-203).
In a Resolution dated October 1, 1992, this Court required respondent Secretary of Health to
comment on the said motion.

On September 29, 1992, in a pleading entitled "Omnibus Submission," respondent NCMH Nurses
Association submitted its Comment to the Petition, Supplemental Petition and Urgent Supplemental
Manifestation. Included in said pleadings were the motions to hold the lawyers of petitioners in
contempt and to disbar them (Rollo, pp. 210-267). Attached to the "Omnibus Submission" as
annexes were the orders and pleadings filed in Administrative Case No. OBM-ADM-0-91-1051
against petitioners (Rollo, pp. 268-480).

The Motion for Disbarment charges the lawyers of petitioners with:

(1) unlawfully advising or otherwise causing or inducing their clients — petitioners Buenaseda, et al.,
to openly defy, ignore, disregard, disobey or otherwise violate, maliciously evade their preventive
suspension by Order of July 7, 1992 of the Ombudsman . . ."; (2) "unlawfully interfering with and
obstructing the implementation of the said order (Omnibus Submission, pp. 50-52; Rollo, pp. 259-
260); and (3) violation of the Canons of the Code of Professional Responsibility and of
unprofessional and unethical conduct "by foisting blatant lies, malicious falsehood and outrageous
deception" and by committing subornation of perjury, falsification and fabrication in their pleadings
(Omnibus Submission, pp. 52-54; Rollo, pp. 261-263).

On November 11, 1992, petitioners filed a "Manifestation and Supplement to 'Motion to Direct
Respondent Secretary of Health to Comply with 22 September 1992 Resolution'" (Manifestation
attached to Rollo without pagination between pp. 613 and 614 thereof).

On November 13, 1992, the Solicitor General submitted its Comment dated November 10, 1992,
alleging that: (a) "despite the issuance of the September 22, 1992 Resolution directing respondents
to maintain the status quo, respondent Secretary refuses to hold in abeyance the implementation of
petitioners' preventive suspension; (b) the clear intent and spirit of the Resolution dated September
22, 1992 is to hold in abeyance the implementation of petitioners' preventive suspension, the status
quo obtaining the time of the filing of the instant petition; (c) respondent Secretary's acts in refusing
to hold in abeyance implementation of petitioners' preventive suspension and in tolerating and
approving the acts of Dr. Abueva, the OIC appointed to replace petitioner Buenaseda, are in
violation of the Resolution dated September 22, 1992; and
(d) therefore, respondent Secretary should be directed to comply with the Resolution dated
September 22, 1992 immediately, by restoring the status quo ante contemplated by the aforesaid
resolution" (Comment attached to Rollo without paginations between pp. 613-614 thereof).

In the Resolution dated November 25, 1992, this Court required respondent Secretary to comply
with the aforestated status quo order, stating inter alia, that:
 It appearing that the status quo ante litem motam, or the last peaceable uncontested
status which preceded the present controversy was the situation obtaining at the time
of the filing of the petition at bar on September 7, 1992 wherein petitioners were then
actually occupying their respective positions, the Court hereby ORDERS that
petitioners be allowed to perform the duties of their respective positions and to
receive such salaries and benefits as they may be lawfully entitled to, and that
respondents and/or any and all persons acting under their authority desist and refrain
from performing any act in violation of the aforementioned Resolution of September
22, 1992 until further orders from the Court (Attached to Rollo after p. 615 thereof).

On December 9, 1992, the Solicitor General, commenting on the Petition, Supplemental Petition and
Supplemental Manifestation, stated that (a) "The authority of the Ombudsman is only to recommend
suspension and he has no direct power to suspend;" and (b) "Assuming the Ombudsman has the
power to directly suspend a government official or employee, there are conditions required by law for
the exercise of such powers; [and] said conditions have not been met in the instant case" (Attached
to Rollo without pagination).

In the pleading filed on January 25, 1993, petitioners adopted the position of the Solicitor General
that the Ombudsman can only suspend government officials or employees connected with his office.
Petitioners also refuted private respondents' motion to disbar petitioners' counsel and to cite them for
contempt (Attached to Rollo without pagination).

The crucial issue to resolve is whether the Ombudsman has the power to suspend government
officials and employees working in offices other than the Office of the Ombudsman, pending the
investigation of the administrative complaints filed against said officials and employees.

In upholding the power of the Ombudsman to preventively suspend petitioners, respondents (Urgent
Motion to Lift Status Quo, etc, dated January 11, 1993, pp. 10-11), invoke Section 24 of R.A. No.
6770, which provides:

Sec. 24. Preventive Suspension. — The Ombudsman or his Deputy may preventively

suspend any officer or employee under his authority pending an investigation, if in his
judgment the evidence of guilt is strong, and (a) the charge against such officer or
employee involves dishonesty, oppression or grave misconduct or neglect in the
performance of duty; (b) the charge would warrant removal from the service; or (c)
the respondent's continued stay in office may prejudice the case filed against him.

The preventive suspension shall continue until the case is terminated by the Office of
Ombudsman but not more than six months, without pay, except when the delay in
the disposition of the case by the Office of the Ombudsman is due to the fault,
negligence or petition of the respondent, in which case the period of such delay shall
not be counted in computing the period of suspension herein provided.

Respondents argue that the power of preventive suspension given the Ombudsman under Section
24 of R.A. No. 6770 was contemplated by Section 13 (8) of Article XI of the 1987 Constitution, which
provides that the Ombudsman shall exercise such other power or perform such functions or duties
as may be provided by law."

On the other hand, the Solicitor General and the petitioners claim that under the 1987 Constitution,
the Ombudsman can only recommend to the heads of the departments and other agencies the
preventive suspension of officials and employees facing administrative investigation conducted by
his office. Hence, he cannot order the preventive suspension himself.
They invoke Section 13(3) of the 1987 Constitution which provides that the Office of the
Ombudsman shall have inter alia the power, function, and duty to:

Direct the officer concerned to take appropriate action against a public official or
employee at fault, and recommend his removal, suspension, demotion, fine, censure
or prosecution, and ensure compliance therewith.

The Solicitor General argues that under said provision of the Constitutions, the Ombudsman has
three distinct powers, namely: (1) direct the officer concerned to take appropriate action against
public officials or employees at fault; (2) recommend their removal, suspension, demotion fine,
censure, or prosecution; and (3) compel compliance with the recommendation (Comment dated
December 3, 1992, pp. 9-10).

The line of argument of the Solicitor General is a siren call that can easily mislead, unless one bears
in mind that what the Ombudsman imposed on petitioners was not a punitive but only a preventive
suspension.

When the constitution vested on the Ombudsman the power "to recommend the suspension" of a
public official or employees (Sec. 13 [3]), it referred to "suspension," as a punitive measure. All the
words associated with the word "suspension" in said provision referred to penalties in administrative
cases, e.g. removal, demotion, fine, censure. Under the rule of Noscitor a sociis, the word
"suspension" should be given the same sense as the other words with which it is associated. Where
a particular word is equally susceptible of various meanings, its correct construction may be made
specific by considering the company of terms in which it is found or with which it is associated (Co
Kim Chan v. Valdez Tan Keh, 75 Phil. 371 [1945]; Caltex (Phils.) Inc. v. Palomar, 18 SCRA 247
[1966]).

Section 24 of R.A. No. 6770, which grants the Ombudsman the power to preventively suspend
public officials and employees facing administrative charges before him, is a procedural, not a penal
statute. The preventive suspension is imposed after compliance with the requisites therein set forth,
as an aid in the investigation of the administrative charges.

Under the Constitution, the Ombudsman is expressly authorized to recommend to the appropriate
official the discipline or prosecution of erring public officials or employees. In order to make an
intelligent determination whether to recommend such actions, the Ombudsman has to conduct an
investigation. In turn, in order for him to conduct such investigation in an expeditious and efficient
manner, he may need to suspend the respondent.

The need for the preventive suspension may arise from several causes, among them, the danger of
tampering or destruction of evidence in the possession of respondent; the intimidation of witnesses,
etc. The Ombudsman should be given the discretion to decide when the persons facing
administrative charges should be preventively suspended.

Penal statutes are strictly construed while procedural statutes are liberally construed (Crawford,
Statutory Construction, Interpretation of Laws, pp. 460-461; Lacson v. Romero, 92 Phil. 456 [1953]).
The test in determining if a statute is penal is whether a penalty is imposed for the punishment of a
wrong to the public or for the redress of an injury to an individual (59 Corpuz Juris, Sec. 658;
Crawford, Statutory Construction, pp. 496-497). A Code prescribing the procedure in criminal cases
is not a penal statute and is to be interpreted liberally (People v. Adler, 140 N.Y. 331; 35 N.E. 644).

The purpose of R.A. No. 6770 is to give the Ombudsman such powers as he may need to perform
efficiently the task committed to him by the Constitution. Such being the case, said statute,
particularly its provisions dealing with procedure, should be given such interpretation that will
effectuate the purposes and objectives of the Constitution. Any interpretation that will hamper the
work of the Ombudsman should be avoided.

A statute granting powers to an agency created by the Constitution should be liberally construed for
the advancement of the purposes and objectives for which it was created (Cf. Department of Public
Utilities v. Arkansas Louisiana Gas. Co., 200 Ark. 983, 142 S.W. (2d) 213 [1940]; Wallace v.
Feehan, 206 Ind. 522, 190 N.E., 438 [1934]).

In Nera v. Garcia, 106 Phil. 1031 [1960], this Court, holding that a preventive suspension is not a
penalty, said:

Suspension is a preliminary step in an administrative investigation. If after such

investigation, the charges are established and the person investigated is found guilty
of acts warranting his removal, then he is removed or dismissed. This is the penalty.

To support his theory that the Ombudsman can only preventively suspend respondents in
administrative cases who are employed in his office, the Solicitor General leans heavily on the
phrase "suspend any officer or employee under his authority" in Section 24 of R.A. No. 6770.

The origin of the phrase can be traced to Section 694 of the Revised Administrative Code, which
dealt with preventive suspension and which authorized the chief of a bureau or office to "suspend
any subordinate or employee in his bureau or under his authority pending an investigation . . . ."

Section 34 of the Civil Service Act of 1959 (R.A. No. 2266), which superseded Section 694 of the
Revised Administrative Code also authorized the chief of a bureau or office to "suspend any
subordinate officer or employees, in his bureau or under his authority."

However, when the power to discipline government officials and employees was extended to the
Civil Service Commission by the Civil Service Law of 1975 (P.D. No. 805), concurrently with the
President, the Department Secretaries and the heads of bureaus and offices, the phrase
"subordinate officer and employee in his bureau" was deleted, appropriately leaving the phrase
"under his authority." Therefore, Section 41 of said law only mentions that the proper disciplining
authority may preventively suspend "any subordinate officer or employee under his authority pending
an investigation . . ." (Sec. 41).

The Administrative Code of 1987 also empowered the proper disciplining authority to "preventively
suspend any subordinate officer or employee under his authority pending an investigation" (Sec. 51).

The Ombudsman Law advisedly deleted the words "subordinate" and "in his bureau," leaving the
phrase to read "suspend any officer or employee under his authority pending an investigation . . . ."
The conclusion that can be deduced from the deletion of the word "subordinate" before and the
words "in his bureau" after "officer or employee" is that the Congress intended to empower the
Ombudsman to preventively suspend all officials and employees under investigation by his office,
irrespective of whether they are employed "in his office" or in other offices of the government. The
moment a criminal or administrative complaint is filed with the Ombudsman, the respondent therein
is deemed to be "in his authority" and he can proceed to determine whether said respondent should
be placed under preventive suspension.

In their petition, petitioners also claim that the Ombudsman committed grave abuse of discretion
amounting to lack of jurisdiction when he issued the suspension order without affording petitioners
the opportunity to confront the charges against them during the preliminary conference and even
after petitioners had asked for the disqualification of Director Arnaw and Atty. Villa-Rosero (Rollo, pp.
6-13). Joining petitioners, the Solicitor General contends that assuming arguendo that the
Ombudsman has the power to preventively suspend erring public officials and employees who are
working in other departments and offices, the questioned order remains null and void for his failure
to comply with the requisites in Section 24 of the Ombudsman Law (Comment dated December 3,
1992, pp. 11-19).

Being a mere order for preventive suspension, the questioned order of the Ombudsman was validly
issued even without a full-blown hearing and the formal presentation of evidence by the parties.
In Nera, supra, petitioner therein also claimed that the Secretary of Health could not preventively
suspend him before he could file his answer to the administrative complaint. The contention of
petitioners herein can be dismissed perfunctorily by holding that the suspension meted out was
merely preventive and therefore, as held in Nera, there was "nothing improper in suspending an
officer pending his investigation and before tho charges against him are heard . . . (Nera v.
Garcia., supra).

There is no question that under Section 24 of R.A. No. 6770, the Ombudsman cannot order the
preventive suspension of a respondent unless the evidence of guilt is strong and (1) the charts
against such officer or employee involves dishonesty, oppression or grave misconduct or neglect in
the performance of duty; (2) the charge would warrant removal from the service; or (3) the
respondent's continued stay in office may prejudice the case filed against him.

The same conditions for the exercise of the power to preventively suspend officials or employees
under investigation were found in Section 34 of R.A. No. 2260.

The import of the Nera decision is that the disciplining authority is given the discretion to decide
when the evidence of guilt is strong. This fact is bolstered by Section 24 of R.A. No. 6770, which
expressly left such determination of guilt to the "judgment" of the Ombudsman on the basis of the
administrative complaint. In the case at bench, the Ombudsman issued the order of preventive
suspension only after: (a) petitioners had filed their answer to the administrative complaint and the
"Motion for the Preventive Suspension" of petitioners, which incorporated the charges in the criminal
complaint against them (Annex 3, Omnibus Submission, Rollo, pp. 288-289; Annex 4, Rollo,
pp. 290-296); (b) private respondent had filed a reply to the answer of petitioners, specifying 23
cases of harassment by petitioners of the members of the private respondent (Annex 6, Omnibus
Submission, Rollo, pp. 309-333); and (c) a preliminary conference wherein the complainant and the
respondents in the administrative case agreed to submit their list of witnesses and documentary
evidence.

Petitioners herein submitted on November 7, 1991 their list of exhibits (Annex 8 of Omnibus
Submission, Rollo, pp. 336-337) while private respondents submitted their list of exhibits (Annex 9 of
Omnibus Submission, Rollo, pp. 338-348).

Under these circumstances, it can not be said that Director Raul Arnaw and Investigator Amy de
Villa-Rosero acted with manifest partiality and bias in recommending the suspension of petitioners.
Neither can it be said that the Ombudsman had acted with grave abuse of discretion in acting
favorably on their recommendation.

The Motion for Contempt, which charges the lawyers of petitioners with unlawfully causing or
otherwise inducing their clients to openly defy and disobey the preventive suspension as ordered by
the Ombudsman and the Secretary of Health can not prosper (Rollo, pp. 259-261). The Motion
should be filed, as in fact such a motion was filed, with the Ombudsman. At any rate, we find that the
acts alleged to constitute indirect contempt were legitimate measures taken by said lawyers to
question the validity and propriety of the preventive suspension of their clients.

On the other hand, we take cognizance of the intemperate language used by counsel for private
respondents hurled against petitioners and their counsel (Consolidated: (1) Comment on Private
Respondent" "Urgent Motions, etc.;
(2) Adoption of OSG's Comment; and (3) Reply to Private Respondent's Comment and
Supplemental Comment, pp. 4-5).

A lawyer should not be carried away in espousing his client's cause. The language of a lawyer, both
oral or written, must be respectful and restrained in keeping with the dignity of the legal profession
and with his behavioral attitude toward his brethren in the profession (Lubiano v. Gordolla, 115
SCRA 459 [1982]). The use of abusive language by counsel against the opposing counsel
constitutes at the same time a disrespect to the dignity of the court of justice. Besides, the use of
impassioned language in pleadings, more often than not, creates more heat than light.

The Motion for Disbarment (Rollo, p. 261) has no place in the instant special civil action, which is
confined to questions of jurisdiction or abuse of discretion for the purpose of relieving persons from
the arbitrary acts of judges and quasi-judicial officers. There is a set of procedure for the discipline of
members of the bar separate and apart from the present special civil action.

WHEREFORE, the petition is DISMISSED and the Status quo ordered to be maintained in the

Resolution dated September 22, 1992 is LIFTED and SET ASIDE.

SO ORDERED.

Narvasa, C.J., Cruz, Padilla, Bidin, Griño-Aquino, Regalado, Davide, Jr., Romero, Nocon, Melo,
Puno and Vitug, JJ., concur.

Feliciano, J., is on leave.

G.R. No. 79094 June 22, 1988

MANOLO P. FULE, petitioner,
vs.
THE HONORABLE COURT OF APPEALS, respondent.

Balagtas P. Ilagan for petitioner.

The Solicitor General for respondent.

MELENCIO-HERRERA, J.:

This is a Petition for Review on certiorari of the Decision of respondent Appellate Court, which affirmed the judgment of the Regional Trial
Court, Lucena City, Branch LIV, convicting petitioner (the accused-appellant) of Violation of Batas Pambansa Blg. 22 (The Bouncing Checks
Law) on the basis of the Stipulation of Facts entered into between the prosecution and the defense during the pre-trial conference in the Trial
Court. The facts stipulated upon read:

a) That this Court has jurisdiction over the person and subject matter of this case;
 b) That the accused was an agent of the Towers Assurance Corporation on or before
January 21, 1981;

c) That on January 21, 1981, the accused issued and made out check No. 26741,
dated January 24, 1981 in the sum of P2,541.05;

d) That the said check was drawn in favor of the complaining witness, Roy Nadera;

e) That the check was drawn in favor of the complaining witness in remittance of
collection;

f) That the said check was presented for payment on January 24, 1981 but the same
was dishonored for the reason that the said checking account was already closed;

g) That the accused Manolo Fule has been properly Identified as the accused party
in this case.

At the hearing of August 23, 1985, only the prosecution presented its evidence consisting of Exhibits
"A," "B" and "C." At the subsequent hearing on September 17, 1985, petitioner-appellant waived the
right to present evidence and, in lieu thereof, submitted a Memorandum confirming the Stipulation of
Facts. The Trial Court convicted petitioner-appellant.

On appeal, respondent Appellate Court upheld the Stipulation of Facts and affirmed the judgment of
conviction. 
1

Hence, this recourse, with petitioner-appellant contending that:

The Honorable Respondent Court of Appeals erred in the decision of the Regional
Trial Court convicting the petitioner of the offense charged, despite the cold fact that
the basis of the conviction was based solely on the stipulation of facts made during
the pre-trial on August 8, 1985, which was not signed by the petitioner, nor by his
counsel.

Finding the petition meritorious, we resolved to give due course.

The 1985 Rules on Criminal Procedure, which became effective on January 1, 1985, applicable to
this case since the pre-trial was held on August 8, 1985, provides:

SEC. 4. Pre-trial agreements must be signed. — No agreement or admission made

or entered during the pre-trial conference shall be used in evidence against the
accused unless reduced to writing and signed by him and his counsel. (Rule 118)
[Emphasis supplied]

By its very language, the Rule is mandatory. Under the rule of statutory construction, negative words
and phrases are to be regarded as mandatory while those in the affirmative are merely directory
(McGee vs. Republic, 94 Phil. 820 [1954]). The use of the term "shall" further emphasizes its
mandatory character and means that it is imperative, operating to impose a duty which may be
enforced (Bersabal vs. Salvador, No. L-35910, July 21, 1978, 84 SCRA 176). And more importantly,
penal statutes whether substantive and remedial or procedural are, by consecrated rule, to be strictly
applied against the government and liberally in favor of the accused (People vs. Terrado No. L-
23625, November 25, 1983, 125 SCRA 648).
The conclusion is inevitable, therefore, that the omission of the signature of the accused and his
counsel, as mandatorily required by the Rules, renders the Stipulation of Facts inadmissible in
evidence. The fact that the lawyer of the accused, in his memorandum, confirmed the Stipulation of
Facts does not cure the defect because Rule 118 requires both the accused and his counsel to sign
the Stipulation of Facts. What the prosecution should have done, upon discovering that the accused
did not sign the Stipulation of Facts, as required by Rule 118, was to submit evidence to establish
the elements of the crime, instead of relying solely on the supposed admission of the accused in the
Stipulation of Facts. Without said evidence independent of the admission, the guilt of the accused
cannot be deemed established beyond reasonable doubt.

Consequently, under the circumstances obtaining in this case, the ends of justice require that
evidence be presented to determine the culpability of the accused. When a judgment has been
entered by consent of an attorney without special authority, it will sometimes be set aside or
reopened (Natividad vs. Natividad, 51 Phil. 613 [1928]).

WHEREFORE, the judgment of respondent Appellate Court is REVERSED and this case is hereby
ordered RE-OPENED and REMANDED to the appropriate Branch of the Regional Trial Court of
Lucena City, for further reception of evidence.

SO ORDERED.

Yap, C.J., Fernan, Narvasa, Cruz, Feliciano, Gancayco, Padilla, Bidin, Sarmiento, Cortes, Griño-
Aquino and Medialdea, JJ., concur.

Paras, J., took no part.

Gutierrez, Jr., J., is on leave.

G.R. No. L-35910 July 21, 1978

PURITA BERSABAL, petitioner,
vs.
HONORABLE JUDGE SERAFIN SALVADOR, as Judge of the Court of First Instance of
Caloocan City, Branch XIV, TAN THAT and ONG PIN TEE, respondents.

MAKASIAR, J.:

On March 23, 1972, petitioner Purita Bersabal seeks to annul the orders of respondent Judge of
August 4, 1971, October 30, 1971 and March 15, 1972 and to compel said respondent Judge to
decide petitioner's perfected appeal on the basis of the evidence and records of the case submitted
by the City Court of Caloocan City plus the memorandum already submitted by the petitioner and
respondents.

Since only questions of law were raised therein, the Court of Appeals, on October 13, 1972, issued a
resolution certifying said case to this Court pursuant to Section 17, paragraph (4) of the Judiciary Act
of 1948, as amended.

As found by the Court of Appeals, the facts of this case are as follows:
 It appears that private respondents Tan That and Ong Pin Tee filed an ejectment
suit, docketed as Civil Case No. 6926 in the City Court of Caloocan City, against the
petitioner. A decision was rendered by said Court on November 25, 1970, which
decision was appealed by the petitioner to the respondent Court and docketed
therein as Civil Case No. C-2036.

During the pendency of the appeal the respondent court issued on March 23, 1971
an order which reads:

Pursuant to the provisions of Rep. Act No. 6031, the Clerk of Court of
Caloocan City, is hereby directed to transmit to this Court within
fifteen (15) days from receipt hereof the transcripts of stenographic
notes taken down during the hearing of this case before the City
Court of Caloocan City, and likewise, counsels for both parties are
given thirty (30) days from receipt of this order within which to file
their respective memoranda, and thereafter, this case shall be
deemed submitted for decision by this Court.

which order was apparently received by petitioner on April 17, 1971.

The transcript of stenographic notes not having yet been forwarded to the
respondent court, petitioner filed on May 5, 1971 a 'MOTION EX-PARTE TO
SUBMIT MEMORANDUM WITHIN 30 DAYS FROM RECEIPT OF NOTICE OF
SUBMISSION OF THE TRANSCRIPT OF STENOGRAPHIC NOTES TAKEN
DURING THE HEARING OF THE CASE BEFORE THE CITY COURT OF
CALOOCAN CITY' which was granted by respondent court on May 7, 1971.
However, before the petitioner could receive any such notice from the respondent
court, the respondent Judge issued an order on August 4, 1971 which says:

For failure of the defendant-appellant to prosecute her appeal the

same is hereby ordered DISMISSED with costs against her.

Petitioner filed a motion for reconsideration of the order on September 28, 1971,
citing as a ground the granting of his ex-parte motion to submit memorandum within
30 days from notice of the submission of the stenographic notes taken before the
City Court. Private respondents filed their opposition to the motion on September
30,1971. In the meantime, on October 20,1971, petitioner filed her memorandum
dated October 18, 1971. On October 30, 1971 the respondent Court denied the
motion for reconsideration. Then on January 25, 1972, petitioner filed a motion for
leave to file second motion for reconsideration which was likewise denied by the
respondent court on March 15, 1972. Hence this petition.

The sole inquiry in the case at bar can be stated thus: Whether, in the light of the provisions of the
second paragraph of Section 45 of Republic Act No. 296, as amended by R.A. No. 6031, the mere
failure of an appellant to submit on nine the memorandum mentioned in the same paragraph would
empower the Court of First Instance to dismiss the appeal on the ground of failure to Prosecute; or,
whether it is mandatory upon said Court to proceed to decide the appealed case on the basis of the
evidence and records transmitted to it, the failure of the appellant to submit a memorandum on time
notwithstanding.

The second paragraph of Section 45 of R.A. No. 296, otherwise known as the Philippine Judiciary
Act of 1948, as amended by R.A. No. 6031 provides, in part, as follows:
 Courts of First Instance shall decide such appealed cases on the basis of the
evidence and records transmitted from the city or municipal courts: Provided, That
the parties may submit memoranda and/or brief with oral argument if so requested ...
. (Emphasis supplied).

The foregoing provision is clear and leaves no room for doubt. It cannot be interpreted otherwise
than that the submission of memoranda is optional on the part of the parties. Being optional on the
part of the parties, the latter may so choose to waive submission of the memoranda. And as a logical
concomitant of the choice given to the Parties, the Court cannot dismiss the appeal of the party
waiving the submission of said memorandum the appellant so chooses not to submit the
memorandum, the Court of First Instance is left with no alternative but to decide the case on the
basis of the evidence and records transmitted from the city or municipal courts. In other words, the
Court is not empowered by law to dismiss the appeal on the mere failure of an appellant to submit
his memorandum, but rather it is the Court's mandatory duty to decide the case on the basis of the
available evidence and records transmitted to it.

As a general rule, the word "may" when used in a statute is permissive only and operates to confer
discretion; while the word "shall" is imperative, operating to impose a duty which may be enforced
(Dizon vs. Encarnacion, L-18615, Dec. 24, 1963, 9 SCRA 714, 716-717). The implication is that the
Court is left with no choice but to decide the appealed case either on the basis of the evidence and
records transmitted to it, or on the basis of the latter plus memoranda and/or brief with oral argument
duly submitted and/or made on request.

Moreover, memoranda, briefs and oral arguments are not essential requirements. They may be
submitted and/or made only if so requested.

Finally, a contrary interpretation would be unjust and dangerous as it may defeat the litigant's right to
appeal granted to him by law. In the case of Republic vs. Rodriguez
(L-26056, May 29, 1969, 28 SCRA 378) this Court underscored "the need of proceeding with caution
so that a party may not be deprived of its right to appeal except for weighty reasons." Courts should
heed the rule in Municipality of Tiwi, Albay vs. Cirujales
(L-37520, Dec. 26, 1973, 54 SCRA 390, 395), thus:

The appellate court's summary dismissal of the appeal even before receipt of the
records of the appealed case as ordered by it in a prior mandamus case must be set
aside as having been issued precipitously and without an opportunity to consider and
appreciate unavoidable circumstances of record not attributable to petitioners that
caused the delay in the elevation of the records of the case on appeal.

In the instant case, no notice was received by petitioner about the submission of the transcript of the
stenographic notes, so that his 30-day period to submit his memorandum would commence to run.
Only after the expiration of such period can the respondent Judge act on the case by deciding it on
the merits, not by dismissing the appeal of petitioner.

WHEREFORE, THE CHALLENGED ORDERS OF RESPONDENT JUDGE DATED AUGUST 4,

1971, OCTOBER 30, 1971 AND MARCH 15, 1971 ARE HEREBY SET ASIDE AS NULL AND VOID
AND THE RESPONDENT COURT IS HEREBY DIRECTED TO DECIDE CIVIL CASE NO. C-2036
ON THE MERITS. NO COSTS.

Muñoz Palma, Fernandez and Guerrero, JJ., concur.

 __________________________________________________
G.R. No. 167631 December 16, 2005

Jenette Marie B. Crisologo, Petitioner,

vs.
GLOBE TELECOM INC. and Cesar M. Maureal, Vice President for Human
Resources, Respondents.

RESOLUTION

AUSTRIA-MARTINEZ, J.:

Petitioner was an employee of respondent company. When she was promoted as Director of
Corporate Affairs and Regulatory Matters, she became entitled to an executive car, and she
procured a 1997 Toyota Camry. In April 2002, she was separated from the company. Petitioner filed
a complaint for illegal dismissal and reinstatement with the National Labor Relations Commission
(NLRC), which later dismissed the complaint. Petitioner filed, on August 12, 2004, a petition
for certiorari with the Court of Appeals, docketed as CA-G.R. SP No. 85679 assailing the NLRC’s
dismissal.

Pending said petition, respondent company filed with the Regional Trial Court of Mandaluyong
(Branch 213) an action for recovery of possession of a motor vehicle with application for a writ of
replevin with damages, docketed as Civil Case No. MC04-2480. Petitioner filed a motion to dismiss
on the ground of litis pendentia and forum shopping but this was denied by the trial court. Thus,
petitioner filed a petition for certiorari with the Court of Appeals, docketed as CA-G.R. SP No.
85927. Petitioner also filed with the Court of Appeals a motion for the issuance of a writ of prohibition
1 

to enjoin proceedings in the replevin case before the trial court.

Thereafter, respondent company filed a motion to declare defendant in default in Civil Case No.
MC04-2480, which was granted by the trial court. Respondent company was thus allowed to present
its evidence ex-parte. Petitioner filed a motion for reconsideration of the order of default but it was
denied by the trial court. On April 5, 2005, the trial court rendered a judgment by default, the
dispositive portion of which reads:

WHEREFORE, finding merit in all the foregoing uncontroverted facts supported by documentary
exhibits, judgment is hereby rendered declaring plaintiff to have the right of possession over the
subject motor vehicle and ordering defendant plaintiff to pay plaintiff the following:

1. The amount of TWO MILLION FIVE HUNDRED FIFTY SIX THOUSAND FOUR HUNDRED
SIXTY PESOS (p2,556,460.00) as damages in the form of unpaid daily car rental for 730 (From 15
August 2002 until 22 June 2004) days at THREE THOUSAND FIVE HUNDRED TWO PESOS
(P3,502.00) per day;

2. The sum of TWO HUNDRED THOUSAND PESOS (₱200,000.00) AS AND BY WAY OF

Attorney’s fee;

3. The sum of TWO HUNDRED THOUSAND PESOS (₱200,000.00) as exemplary damages in order
to deter others from doing similar act in withholding possession of a property to another to which
he/she has no right to possess; and

4. Costs of suit.
SO ORDERED.

Petitioner then filed with the Court a petition for review on certiorari under Rule 45 of the Rules of
Court, which was denied by the Court in a Resolution dated May 16, 2005, for being the wrong
remedy under the 1997 Rules of Civil Procedure, as amended.

Petitioner thus filed the present motion for reconsideration, alleging that the filing of said petition is
the proper recourse, citing Matute vs. Court of Appeals, 26 SCRA 798 (1969), wherein it was ruled
that a defendant declared in default has the remedy set forth in Section 2, paragraph 3 of Rule 41 of
the old Rules of Court. Petitioner then cited in her motion, "Section 2, paragraph 3 or (c) of the Rules
2 

of Civil Procedure."3

Evidently, petitioner misread the provision cited in the Matute case as that pertaining to Section 2(c),
Rule 41 of the 1997 Rules of Civil Procedure, as amended, which states: "(c) Appeal by certiorari. -
In all cases where only questions of law are raised or involved, the appeal shall be to the Supreme
Court by petition for review on certiorari in accordance with Rule 45." Hence, she directly filed her
petition for review on certiorari with the Court.

Petitioner should be reminded that the Matute case is of 1969 vintage and pertained to the old Rules
of Court. As stated in the Matute case, a defendant validly declared in default has the remedy set
forth in Section 2, paragraph 3 of Rule 41. Note that under the old Rules, Section 2, paragraph 3 of
Rule 41 governed appeals from Courts of First Instance, the Social Security Commission and the
Court of Agrarian Relations TO THE COURT OF APPEALS, and reads:

A party who has been declared in default may likewise appeal from the judgment rendered against
him as contrary to the evidence or to the law, even if no petition for relief to set aside the order of
default has been presented by him in accordance with Rule 38. (Emphasis supplied)

Had petitioner been more circumspect, she would have easily ascertained that said Section 2,
paragraph 3 of Rule 41 of the old Rules of Court, as cited in the Matute case, had already been
superseded by the 1997 Rules of Civil Procedure, as amended, and under these new rules, the
different modes of appeal are clearly laid down.

The decision sought to be reviewed in this case is a judgment by default rendered by the trial court
in Civil Case No. MC04-2480. As such, the applicable rule is Section 2, Rule 41 of the 1997 Rules
of Civil Procedure, as amended, which provides for the different modes of appeal from a Regional
Trial Court’s judgment or final order, to wit:

Section 2. Modes of appeal. —

(a) Ordinary appeal. — The appeal to the Court of Appeals in cases decided by the Regional
Trial Court in the exercise of its original jurisdiction shall be taken by filing a notice of appeal
with the court which rendered the judgment or final order appealed from and serving a copy
thereof upon the adverse party. No record on appeal shall be required except in special
proceedings and other cases of multiple or separate appeals where the law or these Rules so
require. In such cases, the record on appeal shall be filed and served in like manner.

(b) Petition for review. — The appeal to the Court of Appeals in cases decided by the Regional Trial
Court in the exercise of its appellate jurisdiction shall be by petition for review in accordance with
Rule 42.
(c) Appeal by certiorari. — In all cases where only questions of law are raised or involved, the appeal
shall be to the Supreme Court by petition for review on certiorari in accordance with Rule 45.
(Emphasis supplied)

In Cerezo vs. Tuazon, the Court reiterated the remedies available to a party declared in default:
4 

a) The defendant in default may, at any time after discovery thereof and before judgment, file
a motion under oath to set aside the order of default on the ground that his failure to answer was
due to fraud, accident, mistake or excusable negligence, and that he has a meritorious defense
(Sec. 3, Rule 18 [now Sec. 3(b), Rule 9]);

b) If the judgment has already been rendered when the defendant discovered the default, but before
the same has become final and executory, he may file a motion for new trial under Section 1 (a) of
Rule 37;

c) If the defendant discovered the default after the judgment has become final and executory, he
may file a petition for relief under Section 2 [now Section 1] of Rule 38; and

d) He may also appeal from the judgment rendered against him as contrary to the evidence or to the
law, even if no petition to set aside the order of default has been presented by him (Sec. 2, Rule 41).

Moreover, a petition for certiorari to declare the nullity of a judgment by default is also available if the
trial court improperly declared a party in default, or even if the trial court properly declared a party in
default, if grave abuse of discretion attended such declaration. 5

The filing of the present petition is clearly not the proper remedy to assail the default judgment
rendered by the trial court. Petitioner still has the available remedy of filing with the Regional Trial
Court a motion for new trial or an ordinary appeal to the Court of Appeals from the trial court’s
default judgment. Note that petitioner admits that she was "properly declared in default." Thus, there
6 

is no question of any improvident or improper declaration of default by the trial court, and the remedy
of filing a special civil action for certiorari has been effectively foreclosed on petitioner. Her only
recourse then is to file an ordinary appeal with the Court of Appeals under Section 2(a), Rule 41 of
the 1997 Rules of Civil Procedure, as amended.

Instead, she came directly to this Court via petition for review on certiorari, without setting forth
substantial reasons why the ordinary remedies under the law should be disregarded and the petition
entertained. Petitioner cannot even find solace in the Matute case as the old Rules of Court then
applicable explicitly laid down the remedy of an ordinary appeal to the Court of Appeals, and not
appeal by certiorari to this Court, by a defendant declared in default.

Petitioner further argues that the petition involved questions of law, and the Court should have taken
cognizance of the case. The grounds set forth in her petition prove otherwise, viz.:

GROUNDS

THE COMPLAINT FOR REPLEVIN FILED BY RESPONDENTS AGAINST PETITIONER SHOULD

HAVE BEEN DISMISSED ON THE GROUND OF LITIS PENDENTIA AND FOR RESPONDENTS’
VIOLATION OF THE RULES AGAINST FORUM-SHOPPING
 II

THE TRIAL COURT WENT AHEAD WITH THE EX-PARTE PRESENTATION OF RESPONDENT’S
EVIDENCE DESPITE THE PETITIONER’S PENDING MOTION FOR RECONSIDERATION

III

THE MONETARY AWARDS FOR DAMAGES AND ATTORNEY’S FEES ARE UNWARRANTED
AND UNJUSTIFIABLE CONSIDERING THAT SUCH ARE NOT SUPPORTED BY LAW AND
JURISPRUDENCE

IV

THE COURT A QUO ISSUED THE ASSAILED DECISION IN A WAY THAT IT IS NOT IN ACCORD
WITH LAW OR APPLICABLE DECISIONS OF THE SUPREME COURT AND HAS SO FAR
DEPARTED FROM THE USUAL COURSE OF JUDICIAL PROCEEDINGS AS TO CALL FOR THE
EXERCISE BY THE SUPREME COURT OF ITS POWER OF SUPERVISION

The test of whether a question is one of law or of fact is not the appellation given to such question by
the party raising the same; rather, it is whether the appellate court can determine the issue raised
without reviewing or evaluating the evidence, in which case, it is a question of law; otherwise, it is a
question of fact. The issues on the award of damages call for a re-evaluation of the evidence before
7 

the trial court, which is obviously a question of fact. Cases where an appeal involved questions of
fact, of law, or both fall within the exclusive appellate jurisdiction of the Court of
Appeals. (Emphasis supplied)
8 

It is on this score that the Court is inclined to concur with petitioner’s argument that even if the
remedy resorted to was wrong, the Court may refer the case to the Court of Appeals under Rule 56,
Section 6, paragraph 2 of the 1997 Rules of Civil Procedure, as amended, which provides: "(A)n
appeal by certiorari taken to the Supreme Court from the Regional Trial Court submitting issues of
fact may be referred to the Court of Appeals for decision or appropriate action." This despite the
express provision in Section 5(f) of the same Rule, which provides that an appeal may be dismissed
when there is error in the choice or mode of appeal.

Both Sections 5(f) and 6 of Rule 57 use the term "may," denoting discretion on the part of the Court
in dismissing the appeal or referring the case to the Court of Appeals. The question of fact involved
in the appeal and substantial ends of justice warrant a referral of this case to the Court of Appeals
for further appropriate proceedings.

WHEREFORE, the motion for reconsideration is GRANTED. The petition is reinstated and the case
is REFERRED to the Court of Appeals for appropriate action.

SO ORDERED.

MA. ALICIA AUSTRIA-MARTINEZ

Associate Justice

WE CONCUR:
G.R. No. 117188 August 7, 1997

LOYOLA GRAND VILLAS HOMEOWNERS (SOUTH) ASSOCIATION, INC., petitioner,

vs.
HON. COURT OF APPEALS, HOME INSURANCE AND GUARANTY CORPORATION, EMDEN
ENCARNACION and HORATIO AYCARDO, respondents.

ROMERO, J.:

May the failure of a corporation to file its by-laws within one month from the date of its incorporation,
as mandated by Section 46 of the Corporation Code, result in its automatic dissolution?

This is the issue raised in this petition for review on certiorari of the Decision  of the Court of Appeals
1

affirming the decision of the Home Insurance and Guaranty Corporation (HIGC). This quasi-judicial
body recognized Loyola Grand Villas Homeowners Association (LGVHA) as the sole homeowners'
association in Loyola Grand Villas, a duly registered subdivision in Quezon City and Marikina City
that was owned and developed by Solid Homes, Inc. It revoked the certificates of registration issued
to Loyola Grand Villas homeowners (North) Association Incorporated (the North Association for
brevity) and Loyola Grand Villas Homeowners (South) Association Incorporated (the South
Association).

LGVHAI was organized on February 8, 1983 as the association of homeowners and residents of the
Loyola Grand Villas. It was registered with the Home Financing Corporation, the predecessor of
herein respondent HIGC, as the sole homeowners' organization in the said subdivision under
Certificate of Registration No. 04-197. It was organized by the developer of the subdivision and its
first president was Victorio V. Soliven, himself the owner of the developer. For unknown reasons,
however, LGVHAI did not file its corporate by-laws.

Sometime in 1988, the officers of the LGVHAI tried to register its by-laws. They failed to do so.   To
2

the officers' consternation, they discovered that there were two other organizations within the
subdivision — the North Association and the South Association. According to private respondents, a
non-resident and Soliven himself, respectively headed these associations. They also discovered that
these associations had five (5) registered homeowners each who were also the incorporators,
directors and officers thereof. None of the members of the LGVHAI was listed as member of the
North Association while three (3) members of LGVHAI were listed as members of the South
Association.  The North Association was registered with the HIGC on February 13, 1989 under
3

Certificate of Registration No. 04-1160 covering Phases West II, East III, West III and East IV. It
submitted its by-laws on December 20, 1988.

In July, 1989, when Soliven inquired about the status of LGVHAI, Atty. Joaquin A. Bautista, the head
of the legal department of the HIGC, informed him that LGVHAI had been automatically dissolved for
two reasons. First, it did not submit its by-laws within the period required by the Corporation Code
and, second, there was non-user of corporate charter because HIGC had not received any report on
the association's activities. Apparently, this information resulted in the registration of the South
Association with the HIGC on July 27, 1989 covering Phases West I, East I and East II. It filed its by-
laws on July 26, 1989.

These developments prompted the officers of the LGVHAI to lodge a complaint with the HIGC. They
questioned the revocation of LGVHAI's certificate of registration without due notice and hearing and
concomitantly prayed for the cancellation of the certificates of registration of the North and South
Associations by reason of the earlier issuance of a certificate of registration in favor of LGVHAI.

On January 26, 1993, after due notice and hearing, private respondents obtained a favorable ruling
from HIGC Hearing Officer Danilo C. Javier who disposed of HIGC Case No. RRM-5-89 as follows:

WHEREFORE, judgment is hereby rendered recognizing the Loyola Grand Villas

Homeowners Association, Inc., under Certificate of Registration No. 04-197 as the duly
registered and existing homeowners association for Loyola Grand Villas homeowners, and
declaring the Certificates of Registration of Loyola Grand Villas Homeowners (North)
Association, Inc. and Loyola Grand Villas Homeowners (South) Association, Inc. as hereby
revoked or cancelled; that the receivership be terminated and the Receiver is hereby ordered
to render an accounting and turn-over to Loyola Grand Villas Homeowners Association, Inc.,
all assets and records of the Association now under his custody and possession.

The South Association appealed to the Appeals Board of the HIGC. In its Resolution of September
8, 1993, the Board   dismissed the appeal for lack of merit.
4

Rebuffed, the South Association in turn appealed to the Court of Appeals, raising two issues. First,
whether or not LGVHAI's failure to file its by-laws within the period prescribed by Section 46 of the
Corporation Code resulted in the automatic dissolution of LGVHAI. Second, whether or not two
homeowners' associations may be authorized by the HIGC in one "sprawling subdivision." However,
in the Decision of August 23, 1994 being assailed here, the Court of Appeals affirmed the Resolution
of the HIGC Appeals Board.

In resolving the first issue, the Court of Appeals held that under the Corporation Code, a private
corporation commences to have corporate existence and juridical personality from the date the
Securities and Exchange Commission (SEC) issues a certificate of incorporation under its official
seal. The requirement for the filing of by-laws under Section 46 of the Corporation Code within one
month from official notice of the issuance of the certificate of incorporation presupposes that it is
already incorporated, although it may file its by-laws with its articles of incorporation. Elucidating on
the effect of a delayed filing of by-laws, the Court of Appeals said:

We also find nothing in the provisions cited by the petitioner, i.e., Section 46 and 22,
Corporation Code, or in any other provision of the Code and other laws which provide or at
least imply that failure to file the by-laws results in an automatic dissolution of the
corporation. While Section 46, in prescribing that by-laws must be adopted within the period
prescribed therein, may be interpreted as a mandatory provision, particularly because of the
use of the word "must," its meaning cannot be stretched to support the argument that
automatic dissolution results from non-compliance.

We realize that Section 46 or other provisions of the Corporation Code are silent on the
result of the failure to adopt and file the by-laws within the required period. Thus, Section 46
and other related provisions of the Corporation Code are to be construed with Section 6 (1)
of P.D. 902-A. This section empowers the SEC to suspend or revoke certificates of
registration on the grounds listed therein. Among the grounds stated is the failure to file by-
laws (see also II Campos: The Corporation Code, 1990 ed., pp. 124-125). Such suspension
or revocation, the same section provides, should be made upon proper notice and hearing.
Although P.D. 902-A refers to the SEC, the same principles and procedures apply to the
public respondent HIGC as it exercises its power to revoke or suspend the certificates of
registration or homeowners association. (Section 2 [a], E.O. 535, series 1979, transferred the
powers and authorities of the SEC over homeowners associations to the HIGC.)
 We also do not agree with the petitioner's interpretation that Section 46, Corporation Code
prevails over Section 6, P.D. 902-A and that the latter is invalid because it contravenes the
former. There is no basis for such interpretation considering that these two provisions are not
inconsistent with each other. They are, in fact, complementary to each other so that one
cannot be considered as invalidating the other.

The Court of Appeals added that, as there was no showing that the registration of LGVHAI had been
validly revoked, it continued to be the duly registered homeowners' association in the Loyola Grand
Villas. More importantly, the South Association did not dispute the fact that LGVHAI had been
organized and that, thereafter, it transacted business within the period prescribed by law.

On the second issue, the Court of Appeals reiterated its previous ruling   that the HIGC has the
5

authority to order the holding of a referendum to determine which of two contending associations
should represent the entire community, village or subdivision.

Undaunted, the South Association filed the instant petition for review on certiorari. It elevates as sole
issue for resolution the first issue it had raised before the Court of Appeals, i.e., whether or not the
LGVHAI's failure to file its by-laws within the period prescribed by Section 46 of the Corporation
Code had the effect of automatically dissolving the said corporation.

Petitioner contends that, since Section 46 uses the word "must" with respect to the filing of by-laws,
noncompliance therewith would result in "self-extinction" either due to non-occurrence of a
suspensive condition or the occurrence of a resolutory condition "under the hypothesis that (by) the
issuance of the certificate of registration alone the corporate personality is deemed already formed."
It asserts that the Corporation Code provides for a "gradation of violations of requirements." Hence,
Section 22 mandates that the corporation must be formally organized and should commence
transaction within two years from date of incorporation. Otherwise, the corporation would be deemed
dissolved. On the other hand, if the corporation commences operations but becomes continuously
inoperative for five years, then it may be suspended or its corporate franchise revoked.

Petitioner concedes that Section 46 and the other provisions of the Corporation Code do not provide
for sanctions for non-filing of the by-laws. However, it insists that no sanction need be provided
"because the mandatory nature of the provision is so clear that there can be no doubt about its being
an essential attribute of corporate birth." To petitioner, its submission is buttressed by the facts that
the period for compliance is "spelled out distinctly;" that the certification of the SEC/HIGC must show
that the by-laws are not inconsistent with the Code, and that a copy of the by-laws "has to be
attached to the articles of incorporation." Moreover, no sanction is provided for because "in the first
place, no corporate identity has been completed." Petitioner asserts that "non-provision for remedy
or sanction is itself the tacit proclamation that non-compliance is fatal and no corporate existence
had yet evolved," and therefore, there was "no need to proclaim its demise."   In a bid to convince
6

the Court of its arguments, petitioner stresses that:

. . . the word MUST is used in Sec. 46 in its universal literal meaning and corollary human
implication — its compulsion is integrated in its very essence — MUST is always
enforceable by the inevitable consequence — that is, "OR ELSE". The use of the
word MUST in Sec. 46 is no exception — it means file the by-laws within one month after
notice of issuance of certificate of registration OR ELSE. The OR ELSE, though not
specified, is inextricably a part of MUST . Do this or if you do not you are "Kaput". The
importance of the by-laws to corporate existence compels such meaning for as decreed the
by-laws is "the government" of the corporation. Indeed, how can the corporation do any
lawful act as such without by-laws. Surely, no law is indeed to create chaos.  7
Petitioner asserts that P.D. No. 902-A cannot exceed the scope and power of the Corporation Code
which itself does not provide sanctions for non-filing of by-laws. For the petitioner, it is "not proper to
assess the true meaning of Sec. 46 . . . on an unauthorized provision on such matter contained in
the said decree."

In their comment on the petition, private respondents counter that the requirement of adoption of by-
laws is not mandatory. They point to P.D. No. 902-A as having resolved the issue of whether said
requirement is mandatory or merely directory. Citing Chung Ka Bio v. Intermediate Appellate
Court,   private respondents contend that Section 6(I) of that decree provides that non-filing of by-
8

laws is only a ground for suspension or revocation of the certificate of registration of corporations
and, therefore, it may not result in automatic dissolution of the corporation. Moreover, the adoption
and filing of by-laws is a condition subsequent which does not affect the corporate personality of a
corporation like the LGVHAI. This is so because Section 9 of the Corporation Code provides that the
corporate existence and juridical personality of a corporation begins from the date the SEC issues a
certificate of incorporation under its official seal. Consequently, even if the by-laws have not yet been
filed, a corporation may be considered a de facto corporation. To emphasize the fact the LGVHAI
was registered as the sole homeowners' association in the Loyola Grand Villas, private respondents
point out that membership in the LGVHAI was an "unconditional restriction in the deeds of sale
signed by lot buyers."

In its reply to private respondents' comment on the petition, petitioner reiterates its argument that the
word " must" in Section 46 of the Corporation Code is mandatory. It adds that, before the ruling
in Chung Ka Bio v. Intermediate Appellate Court could be applied to this case, this Court must first
resolve the issue of whether or not the provisions of P.D. No. 902-A prescribing the rules and
regulations to implement the Corporation Code can "rise above and change" the substantive
provisions of the Code.

The pertinent provision of the Corporation Code that is the focal point of controversy in this case
states:

Sec. 46. Adoption of by-laws. — Every corporation formed under this Code, must within one
(1) month after receipt of official notice of the issuance of its certificate of incorporation by the
Securities and Exchange Commission, adopt a code of by-laws for its government not
inconsistent with this Code. For the adoption of by-laws by the corporation, the affirmative
vote of the stockholders representing at least a majority of the outstanding capital stock, or of
at least a majority of the members, in the case of non-stock corporations, shall be necessary.
The by-laws shall be signed by the stockholders or members voting for them and shall be
kept in the principal office of the corporation, subject to the stockholders or members voting
for them and shall be kept in the principal office of the corporation, subject to inspection of
the stockholders or members during office hours; and a copy thereof, shall be filed with the
Securities and Exchange Commission which shall be attached to the original articles of
incorporation.

Notwithstanding the provisions of the preceding paragraph, by-laws may be adopted and
filed prior to incorporation; in such case, such by-laws shall be approved and signed by all
the incorporators and submitted to the Securities and Exchange Commission, together with
the articles of incorporation.

In all cases, by-laws shall be effective only upon the issuance by the Securities and
Exchange Commission of a certification that the by-laws are not inconsistent with this Code.
 The Securities and Exchange Commission shall not accept for filing the by-laws or any
amendment thereto of any bank, banking institution, building and loan association, trust
company, insurance company, public utility, educational institution or other special
corporations governed by special laws, unless accompanied by a certificate of the
appropriate government agency to the effect that such by-laws or amendments are in
accordance with law.

As correctly postulated by the petitioner, interpretation of this provision of law begins with the
determination of the meaning and import of the word "must" in this section Ordinarily, the word
"must" connotes an imperative act or operates to impose a duty which may be enforced.   It is9

synonymous with "ought" which connotes compulsion or mandatoriness.   However, the word "must"
10

in a statute, like "shall," is not always imperative. It may be consistent with an exercise of discretion.
In this jurisdiction, the tendency has been to interpret "shall" as the context or a reasonable
construction of the statute in which it is used demands or requires.   This is equally true as regards
11

the word "must." Thus, if the languages of a statute considered as a whole and with due regard to its
nature and object reveals that the legislature intended to use the words "shall" and "must" to be
directory, they should be given that meaning. 12

In this respect, the following portions of the deliberations of the Batasang Pambansa No. 68 are
illuminating:

MR. FUENTEBELLA. Thank you, Mr. Speaker.

On page 34, referring to the adoption of by-laws, are we made to understand here, Mr.
Speaker, that by-laws must immediately be filed within one month after the issuance? In
other words, would this be mandatory or directory in character?

MR. MENDOZA. This is mandatory.

MR. FUENTEBELLA. It being mandatory, Mr. Speaker, what would be the effect of the
failure of the corporation to file these by-laws within one month?

MR. MENDOZA. There is a provision in the latter part of the Code which identifies and
describes the consequences of violations of any provision of this Code. One such
consequences is the dissolution of the corporation for its inability, or perhaps, incurring
certain penalties.

MR. FUENTEBELLA. But it will not automatically amount to a dissolution of the corporation
by merely failing to file the by-laws within one month. Supposing the corporation was late,
say, five days, what would be the mandatory penalty?

MR. MENDOZA. I do not think it will necessarily result in the automatic or ipso
facto dissolution of the corporation. Perhaps, as in the case, as you suggested, in the case of
El Hogar Filipino where a quo warranto action is brought, one takes into account the gravity
of the violation committed. If the by-laws were late — the filing of the by-laws were late by,
perhaps, a day or two, I would suppose that might be a tolerable delay, but if they are
delayed over a period of months — as is happening now — because of the absence of a
clear requirement that by-laws must be completed within a specified period of time, the
corporation must suffer certain consequences.  13
This exchange of views demonstrates clearly that automatic corporate dissolution for failure to file
the by-laws on time was never the intention of the legislature. Moreover, even without resorting to
the records of deliberations of the Batasang Pambansa, the law itself provides the answer to the
issue propounded by petitioner.

Taken as a whole and under the principle that the best interpreter of a statute is the statute itself
(optima statuli interpretatix est ipsum statutum),   Section 46 aforequoted reveals the legislative
14

intent to attach a directory, and not mandatory, meaning for the word "must" in the first sentence
thereof. Note should be taken of the second paragraph of the law which allows the filing of the by-
laws even prior to incorporation. This provision in the same section of the Code rules out mandatory
compliance with the requirement of filing the by-laws "within one (1) month after receipt of official
notice of the issuance of its certificate of incorporation by the Securities and Exchange Commission."
It necessarily follows that failure to file the by-laws within that period does not imply the "demise" of
the corporation. By-laws may be necessary for the "government" of the corporation but these are
subordinate to the articles of incorporation as well as to the Corporation Code and related
statutes.  There are in fact cases where by-laws are unnecessary to corporate existence or to the
15

valid exercise of corporate powers, thus:

In the absence of charter or statutory provisions to the contrary, by-laws are not necessary
either to the existence of a corporation or to the valid exercise of the powers conferred upon
it, certainly in all cases where the charter sufficiently provides for the government of the
body; and even where the governing statute in express terms confers upon the corporation
the power to adopt by-laws, the failure to exercise the power will be ascribed to mere
nonaction which will not render void any acts of the corporation which would otherwise be
valid.   (Emphasis supplied.)
16

As Fletcher aptly puts it:

It has been said that the by-laws of a corporation are the rule of its life, and that until by-laws
have been adopted the corporation may not be able to act for the purposes of its creation,
and that the first and most important duty of the members is to adopt them. This would seem
to follow as a matter of principle from the office and functions of by-laws. Viewed in this light,
the adoption of by-laws is a matter of practical, if not one of legal, necessity. Moreover, the
peculiar circumstances attending the formation of a corporation may impose the obligation to
adopt certain by-laws, as in the case of a close corporation organized for specific purposes.
And the statute or general laws from which the corporation derives its corporate existence
may expressly require it to make and adopt by-laws and specify to some extent what they
shall contain and the manner of their adoption. The mere fact, however, of the existence of
power in the corporation to adopt by-laws does not ordinarily and of necessity make the
exercise of such power essential to its corporate life, or to the validity of any of its acts. 
17

Although the Corporation Code requires the filing of by-laws, it does not expressly provide for the
consequences of the non-filing of the same within the period provided for in Section 46. However,
such omission has been rectified by Presidential Decree No. 902-A, the pertinent provisions on the
jurisdiction of the SEC of which state:

Sec. 6. In order to effectively exercise such jurisdiction, the Commission shall possess the
following powers:

xxx xxx xxx

 (1) To suspend, or revoke, after proper notice and hearing, the franchise or certificate of
registration of corporations, partnerships or associations, upon any of the grounds provided
by law, including the following:

xxx xxx xxx

5. Failure to file by-laws within the required period;

xxx xxx xxx

In the exercise of the foregoing authority and jurisdiction of the Commission or by a

Commissioner or by such other bodies, boards, committees and/or any officer as may be
created or designated by the Commission for the purpose. The decision, ruling or order of
any such Commissioner, bodies, boards, committees and/or officer may be appealed to the
Commission sitting en banc within thirty (30) days after receipt by the appellant of notice of
such decision, ruling or order. The Commission shall promulgate rules of procedures to
govern the proceedings, hearings and appeals of cases falling with its jurisdiction.

The aggrieved party may appeal the order, decision or ruling of the Commission sitting en
banc to the Supreme Court by petition for review in accordance with the pertinent provisions
of the Rules of Court.

Even under the foregoing express grant of power and authority, there can be no automatic corporate
dissolution simply because the incorporators failed to abide by the required filing of by-laws
embodied in Section 46 of the Corporation Code. There is no outright "demise" of corporate
existence. Proper notice and hearing are cardinal components of due process in any democratic
institution, agency or society. In other words, the incorporators must be given the chance to explain
their neglect or omission and remedy the same.

That the failure to file by-laws is not provided for by the Corporation Code but in another law is of no
moment. P.D. No. 902-A, which took effect immediately after its promulgation on March 11, 1976, is
very much apposite to the Code. Accordingly, the provisions abovequoted supply the law governing
the situation in the case at bar, inasmuch as the Corporation Code and P.D. No. 902-A are statutes
in pari materia. Interpretare et concordare legibus est optimus interpretandi. Every statute must be
so construed and harmonized with other statutes as to form a uniform system of jurisprudence.  18

As the "rules and regulations or private laws enacted by the corporation to regulate, govern and
control its own actions, affairs and concerns and its stockholders or members and directors and
officers with relation thereto and among themselves in their relation to it,"   by-laws are
19

indispensable to corporations in this jurisdiction. These may not be essential to corporate birth but
certainly, these are required by law for an orderly governance and management of corporations.
Nonetheless, failure to file them within the period required by law by no means tolls the automatic
dissolution of a corporation.

In this regard, private respondents are correct in relying on the pronouncements of this Court
in Chung Ka Bio v. Intermediate Appellate Court,   as follows:
20

. . . . Moreover, failure to file the by-laws does not automatically operate to dissolve a
corporation but is now considered only a ground for such dissolution.
 Section 19 of the Corporation Law, part of which is now Section 22 of the Corporation Code,
provided that the powers of the corporation would cease if it did not formally organize and
commence the transaction of its business or the continuation of its works within two years
from date of its incorporation. Section 20, which has been reproduced with some
modifications in Section 46 of the Corporation Code, expressly declared that "every
corporation formed under this Act, must within one month after the filing of the articles of
incorporation with the Securities and Exchange Commission, adopt a code of by-laws."
Whether this provision should be given mandatory or only directory effect remained a
controversial question until it became academic with the adoption of PD 902-A. Under this
decree, it is now clear that the failure to file by-laws within the required period is only a
ground for suspension or revocation of the certificate of registration of corporations.

Non-filing of the by-laws will not result in automatic dissolution of the corporation. Under
Section 6(I) of PD 902-A, the SEC is empowered to "suspend or revoke, after proper notice
and hearing, the franchise or certificate of registration of a corporation" on the ground inter
alia of "failure to file by-laws within the required period." It is clear from this provision that
there must first of all be a hearing to determine the existence of the ground, and secondly,
assuming such finding, the penalty is not necessarily revocation but may be only suspension
of the charter. In fact, under the rules and regulations of the SEC, failure to file the by-laws
on time may be penalized merely with the imposition of an administrative fine without
affecting the corporate existence of the erring firm.

It should be stressed in this connection that substantial compliance with conditions

subsequent will suffice to perfect corporate personality. Organization and commencement of
transaction of corporate business are but conditions subsequent and not prerequisites for
acquisition of corporate personality. The adoption and filing of by-laws is also a condition
subsequent. Under Section 19 of the Corporation Code, a Corporation commences its
corporate existence and juridical personality and is deemed incorporated from the date the
Securities and Exchange Commission issues certificate of incorporation under its official
seal. This may be done even before the filing of the by-laws, which under Section 46 of the
Corporation Code, must be adopted "within one month after receipt of official notice of the
issuance of its certificate of incorporation." 
21

That the corporation involved herein is under the supervision of the HIGC does not alter the result of
this case. The HIGC has taken over the specialized functions of the former Home Financing
Corporation by virtue of Executive Order No. 90 dated December 17, 1989.   With respect to
22

homeowners associations, the HIGC shall "exercise all the powers, authorities and responsibilities
that are vested on the Securities and Exchange Commission . . . , the provision of Act 1459, as
amended by P.D. 902-A, to the contrary notwithstanding."  23

WHEREFORE, the instant petition for review on certiorari is hereby DENIED and the questioned
Decision of the Court of Appeals AFFIRMED. This Decision is immediately executory. Costs against
petitioner.

SO ORDERED.

G.R. No. 98382 May 17, 1993

PHILIPPINE NATIONAL BANK, petitioner,

vs.
THE COURT OF APPEALS and EPIFANIO DE LA CRUZ, respondents.
Santiago, Jr., Vidad, Corpus & Associates for petitioner.

Pedro R. Lazo for spouses-intervenors.

Rosendo G. Tansinsin, Jr. for private respondent.

MELO, J.:

The notices of sale under Section 3 of Act No. 3135, as amended by Act No. 4118, on extra-judicial
foreclosure of real estate mortgage are required to be posted for not less than twenty days in at least
three public places of the municipality or city where the property is situated, and if such property is
worth more than four hundred pesos, such notices shall also be published once a week for at least
three consecutive weeks in a newspaper of general circulation in the municipality or city.

Respondent court, through Justice Filemon Mendoza with whom Justices Campos, Jr. and Aldecoa,
Jr. concurred, construed the publication of the notices on March 28, April 11 and l2, 1969 as a fatal
announcement and reversed the judgment appealed from by declaring void, inter alia, the auction
sale of the foreclosed pieces of realty, the final deed of sale, and the consolidation of ownership (p.
27, Rollo).

Hence, the petition at bar, premised on the following backdrop lifted from the text of the challenged
decision:

The facts of the case as related by the trial court are, as follows:

This is a verified complaint brought by the plaintiff for the

reconveyance to him (and resultant damages) of two (2) parcels of
land mortgaged by him to the defendant Philippine National Bank
(Manila), which the defendant allegedly unlawfully foreclosed. The
defendant then consolidated ownership unto itself, and subsequently
sold the parcels to third parties. The amended Answer of the
defendant states on the other hand that the extrajudicial foreclosure,
consolidation of ownership, and subsequent sale to the third parties
were all valid, the bank therefore counterclaims for damages and
other equitable remedies.

x x x           x x x          x x x

From the evidence and exhibits presented by both parties, the Court
is of the opinion that the following facts have been proved: Two lots,
located at Bunlo, Bocaue, Bulacan (the first covered by Torrens
Certificate No. 16743 and possessed of an area of approximately
3,109 square meters: the second covered by Torrens Certificate No.
5787, possessed of an area of around 610 square meters, and upon
which stood a residential-commercial building were mortgaged to the
defendant Philippine National Bank. The lots were under the common
names of the plaintiff (Epifanio dela Cruz), his brother (Delfin) and his
sister (Maria). The mortgage was made possible because of the grant
by the latter two to the former of a special power of attorney to
 mortgage the lots to the defendant. The lots were mortgaged to
guarantee the following promissory notes:

(1) a promissory note for Pl2,000.00, dated September 2, 1958, and payable within
69 days (date of maturity — Nov. l0, 1958);

(2) a promissory note for P4,000.00, dated September 22, 1958, and payable within
49 days (date of maturity — Nov. 10, 1958);

(3) a promissory note for P4,000.00, dated June 30, 1.958  and payable within 120
1

days (date of maturity — Nov. 10, 1958) See also Annex C of the complaint itself).

[1 This date of June 30, 1958 is disputed by the plaintiff who claims that the correct
date is June 30, 1961, which is the date actually mentioned in the promissory note. It
is however difficult to believe the plaintiff's contention since if it were true and correct,
this would mean that nearly three (3) years elapsed between the second and the
third promissory note; that at the time the third note was executed, the first two had
not yet been paid by the plaintiff despite the fact that the first two were supposed to
be payable within 69 and 49 days respectively. This state of affairs would have
necessitated the renewal of said two promissory notes. No such renewal was proved,
nor was the renewal ever alleged. Finally, and this is very significant: the third
mentioned promissory note states that the maturity date is Nov. 10, 1958. Now then,
how could the loan have been contracted on June 30, 1961? It will be observed that
in the bank records, the third mentioned promissory note was really executed on
June 30, 1958 (See Exhs. 9 and 9-A). The Court is therefore inclined to believe that
the date "June 30, 1961" was a mere clerical error and hat the true and correct date
is June 1958. However, even assuming that the true and correct date is June 30,
1961, the fact still remains that the first two promissory notes had been guaranteed
by the mortgage of the two lots, and therefore, it was legal and proper to foreclose
on the lots for failure to pay said two promissory notes.

On September 6, 1961, Atty. Ramon de los Reyes of the bank (PNB) presented
under Act No. 3135 a foreclosure petition of the two mortgaged lots before the
Sheriff's Office at Malolos, Bulacan; accordingly, the two lots were sold or auctioned
off on October 20, 1961 with the defendant PNB as the highest bidder for
P28,908.46. On March 7, 1963, Sheriff Leopoldo Palad executed a Final Deed of
Sale, in response to a letter-request by the Manager of the PNB (Malolos Branch).
On January 15, 1963 a Certificate of Sale in favor of the defendant was executed by
Sheriff Palad. The final Deed of Sale was registered in the Bulacan Registry of
Property on March 19, 1963. Inasmuch as the plaintiff did not volunteer to buy back
from the PNB the two lots, the PNB sold on June 4, 1970 the same to spouses
Conrado de Vera and Marina de Vera in a "Deed of Conditional Sale". (Decision,
pp.3-5; Amended Record on Appeal, pp. 96-98).

After due consideration of the evidence, the CFI on January 22, 1978 rendered its
Decision, the dispositive portion of which reads:

WHEREFORE, PREMISES CONSIDERED, the instant complaint

against the defendant Philippine National Bank is hereby ordered
DISMISSED, with costs against the plaintiff. The Counterclaim
against the plaintiff is likewise DISMISSED, for the Court does not
believe that the complaint had been made in bad faith.
 SO ORDERED. (Decision, p. B.; Amended Record on Appeal, p. 100)

Not satisfied with the judgment, plaintiff interposed the present appeal assigning as
errors the following:

I.

THE LOWER COURT ERRED IN HOLDING IN FOOTNOTE I OF ITS DECISION

THAT IT IS THEREFORE INCLINED TO BELIEVE THAT THE DATE "JUNE 30,
1962" WAS A MERE CLERICAL ERROR AND THAT THE TRUE AND CORRECT
DATE IS JUNE 30, 1958. IT ALSO ERRED IN HOLDING IN THE SAME
FOOTNOTE I THAT "HOWEVER, EVEN ASSUMING THAT THE TRUE AND
CORRECT DATE IS JUNE 30, 1961, THE FACT STILL REMAINS THAT THE
FIRST TWO PROMISSORY NOTES HAD BEEN GUARANTEED BY THE
MORTGAGE OF THE TWO LOTS, AND THEREFORE, IT WAS LEGAL AND
PROPER TO FORECLOSE ON THE LOTS FOR FAILURE TO PAY SAID TWO
PROMISSORY NOTES". (page 115, Amended Record on Appeal)

II.

THE LOWER COURT ERRED IN NOT HOLDING THAT THE PETITION FOR
EXTRAJUDICIAL FORECLOSURE WAS PREMATURELY FILED AND IS A MERE
SCRAP OF PAPER BECAUSE IT MERELY FORECLOSED THE ORIGINAL AND
NOT THE AMENDED MORTGAGE.

III.

THE LOWER COURT ERRED IN HOLDING THAT "IT IS CLEAR THAT THE
AUCTION SALE WAS NOT PREMATURE". (page 117, Amended Record on Appeal)

IV.

THE LOWER COURT ERRED IN HOLDING THAT "SUFFICE IT TO STATE THAT

ACTUALLY THE POWER OF ATTORNEY GIVEN TO THE PNB WAS EMBODIED
IN THE REAL ESTATE MORTGAGE (EXB. 10) WHICH WAS REGISTERED IN THE
REGISTRY OF PROPERTY OF BULACAN AND WAS ANNOTATED ON THE TWO
TORRENS CERTIFICATES INVOLVED" (page 118, Amended Record on Appeal).

V.

THE LOWER COURT ERRED IN HOLDING THAT "THE NOTICES REQUIRED

UNDER SEC. 3 OF ACT NO. 3135 WERE ALL COMPLIED WITH" AND "THAT THE
DAILY RECORD . . . IS A NEWSPAPER OF GENERAL CIRCULATION (pages 117-
118, Amended Record on Appeal).

VI.

THE LOWER COURT ERRED IN NOT DECLARING THE CERTIFICATE OF SALE,

FINAL DEED OF SALE AND AFFIDAVIT OF CONSOLIDATION, NULL AND VOID.

VII.
 THE LOWER COURT ERRED IN NOT ORDERING DEFENDANT TO RECONVEY
TO PLAINTIFF THE PARCELS OF LAND COVERED BY T.C.T. NOS. 40712 AND
40713 OF BULACAN (page 8, Amended Record on Appeal)

VIII.

THE LOWER COURT ERRED IN NOT ORDERING DEFENDANT TO PAY TO

PLAINTIFF REASONABLE AMOUNTS OF MORAL AND EXEMPLARY DAMAGES
AND ATTORNEY'S FEES (page 8. Amended Record on Appeal).

IX.

THE LOWER COURT ERRED IN DISMISSING THE INSTANT COMPLAINT

AGAINST THE PHILIPPINE NATIONAL BANK WITH COSTS AGAINST THE
PLAINTIFF. (page 118, Amended Record on Appeal)." (Brief for Plaintiff-Appellant,
pp. 1-4) (pp. 17-21, Rollo)

With reference to the pertinent issue at hand, respondent court opined:

The Notices of Sale of appellant's foreclosed properties were published on March

228, April 11 and April 12, 1969 issues of the newspaper "Daily Record" (Amended
Record on Appeal, p. 108). The date March 28, 1969 falls on a Friday while the dates
April 11 and 12, 1969 are on a Friday and Saturday, respectively. Section 3 of Act
No. 3135 requires that the notice of auction sale shall be "published once a week for
at least three consecutive weeks". Evidently, defendant-appellee bank failed to comly
with this legal requirement. The Supreme Court has held that:

The rule is that statutory provisions governing publication of notice of

mortgage foreclosure sales must be strictly complied with, and that
even slight deviations therefrom will invalidate the notice and render
the sale at least voidable (Jalandoni vs. Ledesma, 64 Phil. l058. G.R.
No. 42589, August 1937 and October 29, 1937). Interpreting Sec.
457 of the Code of Civil Procedure (reproduced in Sec. 18(c) of Rule
39, Rules of Court and in Sec. 3 of Act No. 3135) in Campomanes
vs. Bartolome and German & Co. (38 Phil. 808, G.R. No. 1309,
October 18, 1918), this Court held that if a sheriff sells without notice
prescribed by the Code of Civil Procedure induced thereto by the
judgment creditor, and the purchaser at the sale is the judgment
creditor, the sale is absolutely void and no title passes. This is
regarded as the settled doctrine in this jurisdiction whatever the rule
may be elsewhere (Boria vs. Addison, 14 Phil. 895, G.R. No. 18010,
June 21, 1922).

. . . It has been held that failure to advertise a mortgage foreclosure

sale in compliance with statutory requirements constitutes a
jurisdictional defect invalidating the sale and that a substantial error
or omission in a notice of sale will render the notice insufticient and
vitiate the sale (59 C.J.S. 1314). (Tambunting vs. Court of Appeals, L-
48278, November 8, 1988; 167 SCRA 16, 23-24).

In view of the admission of defendant-appellee in its pleading showing that there was
no compliance of the notice prescribed in Section 3 of Act No. 3135, as amended by
 Act 4118, with respect to the notice of sale of the foreclosed real properties in this
case, we have no choice but to declare the auction sale as absolutely void in view of
the fact that the highest bidder and purchaser in said auction sale was defendant-
appellee bank. Consequently, the Certificate of Sale, the Final Deed of Sale and
Affidavit of Consolidation are likewise of no legal efffect. (pp. 24-25, Rollo)

Before we focus our attention on the subject of whether or not there was valid compliance in regard
to the required publication, we shall briefly discuss the other observations of respondent court vis-a-
vis herein private respondent's ascriptions raised with the appellate court when his suit for
reconveyance was dismissed by the court of origin even as private respondent does not impugn the
remarks of respondent court along this line.

Although respondent court acknowledged that there was an ambiguity on the date of execution of
the third promissory note (June 30, 1961) and the date of maturity thereof (October 28, 1958), it was
nonetheless established that the bank introduced sufficient proof to show that the discrepancy was a
mere clerical error pursuant to Section 7, Rule l30 of the Rules of Court. Anent the second
disputation aired by private respondent, the appellate court observed that inasmuch as the original
as well as the subsequent mortgage were foreclosed only after private respondent's default, the
procedure pursued by herein petitioner in foreclosing the collaterals was thus appropriate albeit the
petition therefor contained only a copy of the original mortgage.

It was only on the aspect of publication of the notices of sale under Act No. 3135, as amended, and
attorney's fees where herein private respondent scored points which eliminated in the reversal of the
trial court's decision. Respondent court was of the impression that herein petitioner failed to comply
with the legal requirement and the sale effected thereafter must be adjudged invalid following the
ruling of this Court in Tambunting vs. Court of Appeals (167 SCRA 16 [1988]); p. 8, Decision, p.
24, Rollo). In view of petitioner's so-called indifference to the rules set forth under Act No. 3135, as
amended, respondent court expressly authorized private respondent to recover attorney's fees
because he was compelled to incur expenses to protect his interest.

Immediately upon the submission of a supplemental petition, the spouses Conrado and Marina De
Vera filed a petition in intervention claiming that the two parcels of land involved herein were sold to
them on June 4, 1970 by petitioner for which transfer certificates of title were issued in their favor (p.
40, Rollo). On the other hand, private respondent pressed the idea that the alleged intervenors have
no more interest in the disputed lots in view of the sale effected by them to Teresa Castillo, Aquilino
and Antonio dela Cruz in 1990 (pp. 105-106, Rollo).

On March 9, 1992, the Court resolved to give due course to the petition and required the parties to
submit their respective memoranda (p. 110, Rollo).

Now, in support of the theory on adherence to the conditions spelled in the preliminary portion of this
discourse, the pronouncement of this Court in Bonnevie vs. Court of Appeals (125 SCRA [1983]; p.
135, Rollo) is sought to be utilized to press the point that the notice need not be published for three
full weeks. According to petitioner, there is no breach of the proviso since after the first publication
on March 28, 1969, the second notice was published on April 11, 1969 (the last day of the second
week), while the third publication on April 12, 1969 was announced on the first day of the third week.
Petitioner thus concludes that there was no violation from the mere happenstance that the third
publication was made only a day after the second publication since it is enough that the second
publication be made on any day within the second week and the third publication, on any day within
the third week. Moreover, in its bid to rectify its admission in judicio, petitioner asseverates that said
admission alluded to refers only to the dates of publications, not that there was non-compliance with
the publication requirement.
Private respondent, on the other hand, views the legal question from a different perspective. He
believes that the period between each publication must never be less than seven consecutive days
(p. 4, Memorandum; p. 124, Rollo).

We are not convinced by petitioner's submissions because the disquisition in support thereof rests
on the erroneous impression that the day on which the first publication was made, or on March 28,
1969, should be excluded pursuant to the third paragraph of Article 17 of the New Civil Code.

It must be conceded that Article 17 is completely silent as to the definition of what is a "week".
In Concepcion vs. Zandueta (36 O.G. 3139 [1938]; Moreno, Philippine Law Dictionary, Second Ed.,
1972, p. 660), this term was interpreted to mean as a period of time consisting of seven consecutive
days — a definition which dovetails with the ruling in E.M. Derby and Co. vs. City of Modesto, et al.
(38 Pac. Rep. 900 [1984]; 1 Paras, Civil Code of the Philippines Annotated, Twelfth Ed., 1989, p. 88;
1 Tolentino, Commentaries and Jurisprudence on th Civil Code, 1990, p. 46). Following the
interpretation in Derby as to the publication of an ordinance for "at least two weeks" in some
newspaper that:

. . . here there is no date or event suggesting the exclusion of the first day's
publication from the computation, and the cases above cited take this case out of the
rule stated in Section 12, Code Civ. Proc. which excludes the first day and includes
the last;

the publication effected on April 11, 1969 cannot be construed as sufficient advertisement for
the second week because the period for the first week should be reckoned from March 28,
1969 until April 3, 1969 while the second week should be counted from April 4, 1969 until
April 10, 1969. It is clear that the announcement on April 11, 1969 was both theoretically and
physically accomplished during the first day of the third week and cannot thus be equated
with compliance in law. Indeed, where the word is used simply as a measure of duration of
time and without reference to the calendar, it means a period of seven consecutive days
without regard to the day of the week on which it begins (1 Tolentino, supra at p. 467 citing
Derby).

Certainly, it would have been absurd to exclude March 28, 1969 as reckoning point in line with the
third paragraph of Article 13 of the New Civil Code, for the purpose of counting the first week of
publication as to the last day thereof fall on April 4, 1969 because this will have the effect of
extending the first week by another day. This incongruous repercussion could not have been the
unwritten intention of the lawmakers when Act No. 3135 was enacted. Verily, inclusion of the first
day of publication is in keeping with the computation in Bonnevie vs. Court of Appeals (125 SCRA
122 [1983]) where this Court had occasion to pronounce, through Justice Guerrero, that the
publication of notice on June 30, July 7 and July 14, 1968 satisfied the publication requirement under
Act No. 3135. Respondent court cannot, therefore, be faulted for holding that there was no
compliance with the strict requirements of publication independently of the so- called admission in
judicio.

WHEREFORE, the petitions for certiorari and intervention are hereby dismissed and the decision of
the Court of Appeals dated April 17, 1991 is hereby affirmed in toto.

SO ORDERED.