Court Rules on Suspension of Criminal Case Due to Prejudicial Civil Case

G.R. No.
L-1560 October 25, 1949

DEMETRIA ESTRADA, plaintiff-appellant,
vs.
ULDARICO CASEDA, defendant-appellee.
San Juan, Africe, Yñquez and Benedicto and Enrique M. Fernando for appellant.
Jose E. Erfe for appellee.
TUASON, J.:
This case is before this Court for review of a decision of the Court of First Instance of Manila reversing the
judgment of the municipal court and declaring that "the plaintiff may not eject the defendant from the premises in
question."
It appears that on September 5, 1945, plaintiff brought this suit, for unlawful detainer, alleging that defendant
leased from her a part of a dwelling at a monthly rental of P26; that on August 11, 1945, plaintiff notified defendant
in writing to vacate the premises under lease, because one of her married daughters was going to occupy them by
the first of the following month; that defendant refused to leave.
On October 13, 1945, Judge Mariano Nable, then of the municipal court, gave judgment for plaintiff with order for
defendant to pay the rent from October 1, 1945, at the rate of P26 a month.
On the case being appealed to the Court of First Instance, defendant filed an answer alleging as special defense,
among others not necessary to the solution of this appeal, "that the main motive of the plaintiff in bringing the
present action is to oust the defendant and lease the same premises to third parties who are willing to pay the black
market rental."
In reversing the judgment of the municipal court, the Court of First Instance of Manila, Judge Rafael Dinglasa
presiding, said that "Commonwealth Act No. 689, as amended only provides three grounds for rejecting a lessee or
occupant from a building destined solely for dwelling, namely (1) for willful and deliberate non-payment of rents, (2)
when the lessor has to occupy the building leased, and (3) when the lessee shall have subleased the building or
any part thereof as dwelling or for dwelling purpose without the written consent of the proprietor." None of these
conditions, according to the court, was alleged much less proved. The court correctly held that the fact that the
premises under lease were needed by plaintiff's married daughter was not comprehended in the second ground.
The above requirements were provided in Commonwealth Act No. 689, which was approved October 15, 1945.
Section 14 of that Act provided that the same "shall be in force for a period of two years after its approval."
Republic Act No. 66, approved October 18, 1946, amended section 14 of Commonwealth Act No. 689 so as to read
as follows: "Section 14. This Act shall be in force for a period of four years after its approval."
When did this four-year period commence to run? Is the present lease still within his period?
An amended act is ordinarily to be construed as if the original statute had been repealed, and a new and
independent act in the amended form had been adopted in its stead; or, as frequently stated by the courts, so far
as regards any action after the adoption of the amendment, as if the statute had been originally enacted in its
amended form. The amendment becomes a part of the original statute as if it had always been contained therein,
unless such amendment involves the abrogation of contractual relations between the state and others. Where an
amendment leaves certain portions of the original act unchanged, such portions are continued in force, with the
same meaning and effect they had before the amendment. So where an amendatory act provides that are existing
statute shall be amended to read as recited in the amendatory act, such portions of the existing law as are retained,
either literally or substantially, are regarded as a continuation of the existing law, and not as a new enactment. (59
C. J., 1096, 1097.)lawphi1.nêt
In accordance with this rule, the provision of Republic Act No. 66 amending section 14 of Commonwealth Act No.
689, related back to, and should be computed from the date of the approval of the amended act, that is October 15,
1945. The period as thus construed expired on October 15, 1949.
The judgment of Judge Dinglasan was correct, but, the period reckoned by the trial court being now over, our
decision is that judgment shall be rendered ejecting defendant from the house described in the complaint and
ordering him to pay rent at the rate of P26 a month from October 1, 1945. It is so ordered, without costs.
Ozaeta, Paras, Feria, Montemayor, Reyes and Torres, JJ., concur.
Moran, C.J., Mr. Justice Bengzon voted in conformity with this decision.
Separate Opinions
PADILLA, J., concurring:
I concur in the result. Commonwealth Act No. 689, as amended by Republic Act No. 66, cannot be given
retroactive effect. The cause of action in the case at bar arose before the passage of the Acts.

1
Page
G.R. No. 184861 June 30, 2009
DREAMWORK CONSTRUCTION, INC., Petitioner,
vs.
CLEOFE S. JANIOLA and HON. ARTHUR A. FAMINI, Respondents.
DECISION
VELASCO, JR., J.:
The Case
Petitioner Dreamwork Construction, Inc. seeks the reversal of the August 26, 2008 Decision1 in SCA No. 08-0005
of the Regional Trial Court (RTC), Branch 253 in Las Piñas City. The Decision affirmed the Orders dated October
16, 20072 and March 12, 20083 in Criminal Case Nos. 55554-61 issued by the Metropolitan Trial Court (MTC),
Branch 79 in Las Piñas City.
The Facts
On October 18, 2004, petitioner, through its President, Roberto S. Concepcion, and Vice-President for Finance and
Marketing, Normandy P. Amora, filed a Complaint Affidavit dated October 5, 20044 for violation of Batas Pambansa
Bilang 22 (BP 22) against private respondent Cleofe S. Janiola with the Office of the City Prosecutor of Las Piñas
City. The case was docketed as I.S. No. 04-2526-33. Correspondingly, petitioner filed a criminal information for
violation of BP 22 against private respondent with the MTC on February 2, 2005 docketed as Criminal Case Nos.
55554-61, entitled People of the Philippines v. Cleofe S. Janiola.
On September 20, 2006, private respondent, joined by her husband, instituted a civil complaint against petitioner by
filing a Complaint dated August 20065 for the rescission of an alleged construction agreement between the parties,
as well as for damages. The case was filed with the RTC, Branch 197 in Las Piñas City and docketed as Civil Case
No. LP-06-0197. Notably, the checks, subject of the criminal cases before the MTC, were issued in consideration of
the construction agreement.
Thereafter, on July 25, 2007, private respondent filed a Motion to Suspend Proceedings dated July 24, 20076 in
Criminal Case Nos. 55554-61, alleging that the civil and criminal cases involved facts and issues similar or
intimately related such that in the resolution of the issues in the civil case, the guilt or innocence of the accused
would necessarily be determined. In other words, private respondent claimed that the civil case posed a prejudicial
question as against the criminal cases.
Petitioner opposed the suspension of the proceedings in the criminal cases in an undated Comment/Opposition to
Accused’s Motion to Suspend Proceedings based on Prejudicial Question7 on the grounds that: (1) there is no
prejudicial question in this case as the rescission of the contract upon which the bouncing checks were issued is a
separate and distinct issue from the issue of whether private respondent violated BP 22; and (2) Section 7, Rule
111 of the Rules of Court states that one of the elements of a prejudicial question is that "the previously instituted
civil action involves an issue similar or intimately related to the issue raised in the subsequent criminal action"; thus,
this element is missing in this case, the criminal case having preceded the civil case.
Later, the MTC issued its Order dated October 16, 2007, granting the Motion to Suspend Proceedings, and
reasoned that:
Should the trial court declare the rescission of contract and the nullification of the checks issued as the same are
without consideration, then the instant criminal cases for alleged violation of BP 22 must be dismissed. The belated
filing of the civil case by the herein accused did not detract from the correctness of her cause, since a motion for
suspension of a criminal action may be filed at any time before the prosecution rests (Section 6, Rule 111, Revised
Rules of Court).8
In an Order dated March 12, 2008,9 the MTC denied petitioner’s Motion for Reconsideration dated November 29,
2007.
Petitioner appealed the Orders to the RTC with a Petition dated May 13, 2008. Thereafter, the RTC issued the
assailed decision dated August 26, 2008, denying the petition. On the issue of the existence of a prejudicial
question, the RTC ruled:
Additionally, it must be stressed that the requirement of a "previously" filed civil case is intended merely to obviate
delays in the conduct of the criminal proceedings. Incidentally, no clear evidence of any intent to delay by private
respondent was shown. The criminal proceedings are still in their initial stages when the civil action was instituted.
And, the fact that the civil action was filed after the criminal action was instituted does not render the issues in the
civil action any less prejudicial in character.10
Hence, we have this petition under Rule 45.
The Issue
WHETHER OR NOT THE COURT A QUO SERIOUSLY ERRED IN NOT PERCEIVING GRAVE ABUSE OF
DISCRETION ON THE PART OF THE INFERIOR COURT, WHEN THE LATTER RULED TO SUSPEND
PROCEEDINGS IN CRIM. CASE NOS. 55554-61 ON THE BASIS OF "PREJUDICIAL QUESTION" IN CIVIL CASE
NO. LP-06-0197.11
The Court’s Ruling
This petition must be granted.
The Civil Action Must Precede the Filing of the
Criminal Action for a Prejudicial Question to Exist
Under the 1985 Rules on Criminal Procedure, as amended by Supreme Court Resolutions dated June 17, 1988
2
and July 7, 1988, the elements of a prejudicial question are contained in Rule 111, Sec. 5, which states:
Page
SEC. 5. Elements of prejudicial question. — The two (2) essential elements of a prejudicial question are: (a) the
civil action involves an issue similar or intimately related to the issue raised in the criminal action; and (b) the
resolution of such issue determines whether or not the criminal action may proceed.
Thus, the Court has held in numerous cases12 that the elements of a prejudicial question, as stated in the above-
quoted provision and in Beltran v. People,13 are:
The rationale behind the principle of prejudicial question is to avoid two conflicting decisions. It has two essential
elements: (a) the civil action involves an issue similar or intimately related to the issue raised in the criminal action;
and (b) the resolution of such issue determines whether or not the criminal action may proceed.
On December 1, 2000, the 2000 Rules on Criminal Procedure, however, became effective and the above provision
was amended by Sec. 7 of Rule 111, which applies here and now provides:
SEC. 7. Elements of prejudicial question.—The elements of a prejudicial question are: (a) the previously instituted
civil action involves an issue similar or intimately related to the issue raised in the subsequent criminal action, and
(b) the resolution of such issue determines whether or not the criminal action may proceed. (Emphasis supplied.)
Petitioner interprets Sec. 7(a) to mean that in order for a civil case to create a prejudicial question and, thus,
suspend a criminal case, it must first be established that the civil case was filed previous to the filing of the criminal
case. This, petitioner argues, is specifically to guard against the situation wherein a party would belatedly file a civil
action that is related to a pending criminal action in order to delay the proceedings in the latter.
On the other hand, private respondent cites Article 36 of the Civil Code which provides:
Art. 36. Pre-judicial questions which must be decided before any criminal prosecution may be instituted or may
proceed, shall be governed by rules of court which the Supreme Court shall promulgate and which shall not be in
conflict with the provisions of this Code. (Emphasis supplied.)
Private respondent argues that the phrase "before any criminal prosecution may be instituted or may proceed"
must be interpreted to mean that a prejudicial question exists when the civil action is filed either before the
institution of the criminal action or during the pendency of the criminal action. Private respondent concludes that
there is an apparent conflict in the provisions of the Rules of Court and the Civil Code in that the latter considers a
civil case to have presented a prejudicial question even if the criminal case preceded the filing of the civil case.
We cannot agree with private respondent.
First off, it is a basic precept in statutory construction that a "change in phraseology by amendment of a provision of
law indicates a legislative intent to change the meaning of the provision from that it originally had."14 In the instant
case, the phrase, "previously instituted," was inserted to qualify the nature of the civil action involved in a prejudicial
question in relation to the criminal action. This interpretation is further buttressed by the insertion of "subsequent"
directly before the term criminal action. There is no other logical explanation for the amendments except to qualify
the relationship of the civil and criminal actions, that the civil action must precede the criminal action.
Thus, this Court ruled in Torres v. Garchitorena15 that:
Even if we ignored petitioners’ procedural lapse and resolved their petition on the merits, we hold that
Sandiganbayan did not abuse its discretion amounting to excess or lack of jurisdiction in denying their omnibus
motion for the suspension of the proceedings pending final judgment in Civil Case No. 7160. Section 6, Rule lll of
the Rules of Criminal Procedure, as amended, reads:
Sec. 6. Suspension by reason of prejudicial question. - A petition for suspension of the criminal action based upon
the pendency of a prejudicial question in a civil action may be filed in the office of the prosecutor or the court
conducting the preliminary investigation. When the criminal action has been filed in court for trial, the petition to
suspend shall be filed in the same criminal action at any time before the prosecution rests.
Sec. 7. Elements of prejudicial question. - The elements of a prejudicial question are: (a) the previously instituted
(b) the resolution of such issue determines whether or not the criminal action may proceed.
Under the amendment, a prejudicial question is understood in law as that which must precede the criminal action
and which requires a decision before a final judgment can be rendered in the criminal action with which said
question is closely connected. The civil action must be instituted prior to the institution of the criminal action. In this
case, the Information was filed with the Sandiganbayan ahead of the complaint in Civil Case No. 7160 filed by the
State with the RTC in Civil Case No. 7160. Thus, no prejudicial question exists. (Emphasis supplied.)
Additionally, it is a principle in statutory construction that "a statute should be construed not only to be consistent
with itself but also to harmonize with other laws on the same subject matter, as to form a complete, coherent and
intelligible system."16 This principle is consistent with the maxim, interpretare et concordare leges legibus est
optimus interpretandi modus or every statute must be so construed and harmonized with other statutes as to form a
uniform system of jurisprudence.171 a vv p h i l
In other words, every effort must be made to harmonize seemingly conflicting laws. It is only when harmonization is
impossible that resort must be made to choosing which law to apply.
In the instant case, Art. 36 of the Civil Code and Sec. 7 of Rule 111 of the Rules of Court are susceptible of an
interpretation that would harmonize both provisions of law. The phrase "previously instituted civil action" in Sec. 7
of Rule 111 is plainly worded and is not susceptible of alternative interpretations. The clause "before any criminal
prosecution may be instituted or may proceed" in Art. 36 of the Civil Code may, however, be interpreted to mean
that the motion to suspend the criminal action may be filed during the preliminary investigation with the public
prosecutor or court conducting the investigation, or during the trial with the court hearing the case.
This interpretation would harmonize Art. 36 of the Civil Code with Sec. 7 of Rule 111 of the Rules of Court but also
with Sec. 6 of Rule 111 of the Civil Code, which provides for the situations when the motion to suspend the criminal
3
action during the preliminary investigation or during the trial may be filed. Sec. 6 provides:
Page
SEC. 6. Suspension by reason of prejudicial question.—A petition for suspension of the criminal action based upon
Thus, under the principles of statutory construction, it is this interpretation of Art. 36 of the Civil Code that should
govern in order to give effect to all the relevant provisions of law.
It bears pointing out that the circumstances present in the instant case indicate that the filing of the civil action and
the subsequent move to suspend the criminal proceedings by reason of the presence of a prejudicial question were
a mere afterthought and instituted to delay the criminal proceedings.
In Sabandal v. Tongco,18 we found no prejudicial question existed involving a civil action for specific performance,
overpayment, and damages, and a criminal complaint for BP 22, as the resolution of the civil action would not
determine the guilt or innocence of the accused in the criminal case. In resolving the case, we said:
Furthermore, the peculiar circumstances of the case clearly indicate that the filing of the civil case was a ploy to
delay the resolution of the criminal cases. Petitioner filed the civil case three years after the institution of the
criminal charges against him. Apparently, the civil action was instituted as an afterthought to delay the proceedings
in the criminal cases.19
Here, the civil case was filed two (2) years after the institution of the criminal complaint and from the time that
private respondent allegedly withdrew its equipment from the job site. Also, it is worth noting that the civil case was
instituted more than two and a half (2 ½) years from the time that private respondent allegedly stopped construction
of the proposed building for no valid reason. More importantly, the civil case praying for the rescission of the
construction agreement for lack of consideration was filed more than three (3) years from the execution of the
construction agreement.
Evidently, as in Sabandal, the circumstances surrounding the filing of the cases involved here show that the filing of
the civil action was a mere afterthought on the part of private respondent and interposed for delay. And as correctly
argued by petitioner, it is this scenario that Sec. 7 of Rule 111 of the Rules of Court seeks to prevent. Thus, private
respondent’s positions cannot be left to stand.
The Resolution of the Civil Case Is Not
Determinative of the Prosecution of the Criminal Action
In any event, even if the civil case here was instituted prior to the criminal action, there is, still, no prejudicial
question to speak of that would justify the suspension of the proceedings in the criminal case.
To reiterate, the elements of a prejudicial question under Sec. 7 of Rule 111 of the Rules of Court are: (1) the
previously instituted civil action involves an issue similar or intimately related to the issue raised in the subsequent
criminal action; and (2) the resolution of such issue determines whether or not the criminal action may proceed.
Petitioner argues that the second element of a prejudicial question, as provided in Sec. 7 of Rule 111 of the Rules,
is absent in this case. Thus, such rule cannot apply to the present controversy.
Private respondent, on the other hand, claims that if the construction agreement between the parties is declared
null and void for want of consideration, the checks issued in consideration of such contract would become mere
scraps of paper and cannot be the basis of a criminal prosecution.
We find for petitioner.
It must be remembered that the elements of the crime punishable under BP 22 are as follows:
(1) the making, drawing, and issuance of any check to apply for account or for value;
(2) the knowledge of the maker, drawer, or issuer that at the time of issue there are no sufficient funds in or
credit with the drawee bank for the payment of such check in full upon its presentment; and
(3) the subsequent dishonor of the check by the drawee bank for insufficiency of funds or credit, or
dishonor for the same reason had not the drawer, without any valid cause, ordered the bank to stop
payment.20
Undeniably, the fact that there exists a valid contract or agreement to support the issuance of the check/s or that
the checks were issued for valuable consideration does not make up the elements of the crime. Thus, this Court
has held in a long line of cases21 that the agreement surrounding the issuance of dishonored checks is irrelevant to
the prosecution for violation of BP 22. In Mejia v. People,22 we ruled:
It must be emphasized that the gravamen of the offense charge is the issuance of a bad check. The purpose for
which the check was issued, the terms and conditions relating to its issuance, or any agreement surrounding such
issuance are irrelevant to the prosecution and conviction of petitioner. To determine the reason for which checks
are issued, or the terms and conditions for their issuance, will greatly erode the faith the public reposes in the
stability and commercial value of checks as currency substitutes, and bring havoc in trade and in banking
communities. The clear intention of the framers of B.P. 22 is to make the mere act of issuing a worthless check
malum prohibitum.
Lee v. Court of Appeals23 is even more poignant. In that case, we ruled that the issue of lack of valuable
consideration for the issuance of checks which were later on dishonored for insufficient funds is immaterial to the
success of a prosecution for violation of BP 22, to wit:
Third issue. Whether or not the check was issued on account or for value.
Petitioner’s claim is not feasible. We have held that upon issuance of a check, in the absence of evidence to the
contrary, it is presumed that the same was issued for valuable consideration. Valuable consideration, in turn, may
consist either in some right, interest, profit or benefit accruing to the party who makes the contract, or some
4
forbearance, detriment, loss or some responsibility, to act, or labor, or service given, suffered or undertaken by the
Page
other side. It is an obligation to do, or not to do in favor of the party who makes the contract, such as the maker or
indorser.
In this case, petitioner himself testified that he signed several checks in blank, the subject check included, in
exchange for 2.5% interest from the proceeds of loans that will be made from said account. This is a valuable
consideration for which the check was issued. That there was neither a pre-existing obligation nor an obligation
incurred on the part of petitioner when the subject check was given by Bautista to private complainant on July 24,
1993 because petitioner was no longer connected with Unlad or Bautista starting July 1989, cannot be given merit
since, as earlier discussed, petitioner failed to adequately prove that he has severed his relationship with Bautista
or Unlad.
At any rate, we have held that what the law punishes is the mere act of issuing a bouncing check, not the purpose
for which it was issued nor the terms and conditions relating to its issuance. This is because the thrust of the law is
to prohibit the making of worthless checks and putting them into circulation.24 (Emphasis supplied.)
Verily, even if the trial court in the civil case declares that the construction agreement between the parties is void
for lack of consideration, this would not affect the prosecution of private respondent in the criminal case. The fact of
the matter is that private respondent indeed issued checks which were subsequently dishonored for insufficient
funds. It is this fact that is subject of prosecution under BP 22.lawphil.net
Therefore, it is clear that the second element required for the existence of a prejudicial question, that the resolution
of the issue in the civil action would determine whether the criminal action may proceed, is absent in the instant
case. Thus, no prejudicial question exists and the rules on it are inapplicable to the case before us.
WHEREFORE, we GRANT this petition. We hereby REVERSE and SET ASIDE the August 26, 2008 Decision in
SCA No. 08-0005 of the RTC, Branch 253 in Las Piñas City and the Orders dated October 16, 2007 and March 12,
2008 in Criminal Case Nos. 55554-61 of the MTC, Branch 79 in Las Piñas City. We order the MTC to continue with
the proceedings in Criminal Case Nos. 55554-61 with dispatch.
No costs.
SO ORDERED.
PRESBITERO J. VELASCO, JR.
Associate Justice
WE CONCUR:
CONSUELO YNARES-SANTIAGO
Associate Justice
Chairperson
MINITA V. CHICO-NAZARIO ANTONIO EDUARDO B. NACHURA
Associate Justice Associate Justice
DIOSDADO M. PERALTA
Associate Justice
5
Page
G.R. No. 184861 June 30, 2009
DREAMWORK CONSTRUCTION, INC., Petitioner,
vs.
CLEOFE S. JANIOLA and HON. ARTHUR A. FAMINI, Respondents.
DECISION
VELASCO, JR., J.:
The Case
Petitioner Dreamwork Construction, Inc. seeks the reversal of the August 26, 2008 Decision1 in SCA No. 08-0005
of the Regional Trial Court (RTC), Branch 253 in Las Piñas City. The Decision affirmed the Orders dated October
16, 20072 and March 12, 20083 in Criminal Case Nos. 55554-61 issued by the Metropolitan Trial Court (MTC),
Branch 79 in Las Piñas City.
The Facts
On October 18, 2004, petitioner, through its President, Roberto S. Concepcion, and Vice-President for Finance and
Marketing, Normandy P. Amora, filed a Complaint Affidavit dated October 5, 20044 for violation of Batas Pambansa
Bilang 22 (BP 22) against private respondent Cleofe S. Janiola with the Office of the City Prosecutor of Las Piñas
City. The case was docketed as I.S. No. 04-2526-33. Correspondingly, petitioner filed a criminal information for
violation of BP 22 against private respondent with the MTC on February 2, 2005 docketed as Criminal Case Nos.
55554-61, entitled People of the Philippines v. Cleofe S. Janiola.
On September 20, 2006, private respondent, joined by her husband, instituted a civil complaint against petitioner by
filing a Complaint dated August 20065 for the rescission of an alleged construction agreement between the parties,
as well as for damages. The case was filed with the RTC, Branch 197 in Las Piñas City and docketed as Civil Case
No. LP-06-0197. Notably, the checks, subject of the criminal cases before the MTC, were issued in consideration of
the construction agreement.
Thereafter, on July 25, 2007, private respondent filed a Motion to Suspend Proceedings dated July 24, 20076 in
Criminal Case Nos. 55554-61, alleging that the civil and criminal cases involved facts and issues similar or
intimately related such that in the resolution of the issues in the civil case, the guilt or innocence of the accused
would necessarily be determined. In other words, private respondent claimed that the civil case posed a prejudicial
question as against the criminal cases.
Petitioner opposed the suspension of the proceedings in the criminal cases in an undated Comment/Opposition to
Accused’s Motion to Suspend Proceedings based on Prejudicial Question7 on the grounds that: (1) there is no
prejudicial question in this case as the rescission of the contract upon which the bouncing checks were issued is a
separate and distinct issue from the issue of whether private respondent violated BP 22; and (2) Section 7, Rule
111 of the Rules of Court states that one of the elements of a prejudicial question is that "the previously instituted
civil action involves an issue similar or intimately related to the issue raised in the subsequent criminal action"; thus,
this element is missing in this case, the criminal case having preceded the civil case.
Later, the MTC issued its Order dated October 16, 2007, granting the Motion to Suspend Proceedings, and
reasoned that:
Should the trial court declare the rescission of contract and the nullification of the checks issued as the same are
without consideration, then the instant criminal cases for alleged violation of BP 22 must be dismissed. The belated
filing of the civil case by the herein accused did not detract from the correctness of her cause, since a motion for
suspension of a criminal action may be filed at any time before the prosecution rests (Section 6, Rule 111, Revised
Rules of Court).8
In an Order dated March 12, 2008,9 the MTC denied petitioner’s Motion for Reconsideration dated November 29,
2007.
Petitioner appealed the Orders to the RTC with a Petition dated May 13, 2008. Thereafter, the RTC issued the
assailed decision dated August 26, 2008, denying the petition. On the issue of the existence of a prejudicial
question, the RTC ruled:
Additionally, it must be stressed that the requirement of a "previously" filed civil case is intended merely to obviate
delays in the conduct of the criminal proceedings. Incidentally, no clear evidence of any intent to delay by private
respondent was shown. The criminal proceedings are still in their initial stages when the civil action was instituted.
And, the fact that the civil action was filed after the criminal action was instituted does not render the issues in the
civil action any less prejudicial in character.10
Hence, we have this petition under Rule 45.
The Issue
WHETHER OR NOT THE COURT A QUO SERIOUSLY ERRED IN NOT PERCEIVING GRAVE ABUSE OF
DISCRETION ON THE PART OF THE INFERIOR COURT, WHEN THE LATTER RULED TO SUSPEND
PROCEEDINGS IN CRIM. CASE NOS. 55554-61 ON THE BASIS OF "PREJUDICIAL QUESTION" IN CIVIL CASE
NO. LP-06-0197.11
The Court’s Ruling
This petition must be granted.
The Civil Action Must Precede the Filing of the
Criminal Action for a Prejudicial Question to Exist
Under the 1985 Rules on Criminal Procedure, as amended by Supreme Court Resolutions dated June 17, 1988
6
and July 7, 1988, the elements of a prejudicial question are contained in Rule 111, Sec. 5, which states:
Page
SEC. 5. Elements of prejudicial question. — The two (2) essential elements of a prejudicial question are: (a) the
civil action involves an issue similar or intimately related to the issue raised in the criminal action; and (b) the
resolution of such issue determines whether or not the criminal action may proceed.
Thus, the Court has held in numerous cases12 that the elements of a prejudicial question, as stated in the above-
quoted provision and in Beltran v. People,13 are:
The rationale behind the principle of prejudicial question is to avoid two conflicting decisions. It has two essential
elements: (a) the civil action involves an issue similar or intimately related to the issue raised in the criminal action;
and (b) the resolution of such issue determines whether or not the criminal action may proceed.
On December 1, 2000, the 2000 Rules on Criminal Procedure, however, became effective and the above provision
was amended by Sec. 7 of Rule 111, which applies here and now provides:
SEC. 7. Elements of prejudicial question.—The elements of a prejudicial question are: (a) the previously instituted
(b) the resolution of such issue determines whether or not the criminal action may proceed. (Emphasis supplied.)
Petitioner interprets Sec. 7(a) to mean that in order for a civil case to create a prejudicial question and, thus,
suspend a criminal case, it must first be established that the civil case was filed previous to the filing of the criminal
case. This, petitioner argues, is specifically to guard against the situation wherein a party would belatedly file a civil
action that is related to a pending criminal action in order to delay the proceedings in the latter.
On the other hand, private respondent cites Article 36 of the Civil Code which provides:
Art. 36. Pre-judicial questions which must be decided before any criminal prosecution may be instituted or may
proceed, shall be governed by rules of court which the Supreme Court shall promulgate and which shall not be in
conflict with the provisions of this Code. (Emphasis supplied.)
Private respondent argues that the phrase "before any criminal prosecution may be instituted or may proceed"
must be interpreted to mean that a prejudicial question exists when the civil action is filed either before the
institution of the criminal action or during the pendency of the criminal action. Private respondent concludes that
there is an apparent conflict in the provisions of the Rules of Court and the Civil Code in that the latter considers a
civil case to have presented a prejudicial question even if the criminal case preceded the filing of the civil case.
We cannot agree with private respondent.
First off, it is a basic precept in statutory construction that a "change in phraseology by amendment of a provision of
law indicates a legislative intent to change the meaning of the provision from that it originally had."14 In the instant
case, the phrase, "previously instituted," was inserted to qualify the nature of the civil action involved in a prejudicial
question in relation to the criminal action. This interpretation is further buttressed by the insertion of "subsequent"
directly before the term criminal action. There is no other logical explanation for the amendments except to qualify
the relationship of the civil and criminal actions, that the civil action must precede the criminal action.
Thus, this Court ruled in Torres v. Garchitorena15 that:
Even if we ignored petitioners’ procedural lapse and resolved their petition on the merits, we hold that
Sandiganbayan did not abuse its discretion amounting to excess or lack of jurisdiction in denying their omnibus
motion for the suspension of the proceedings pending final judgment in Civil Case No. 7160. Section 6, Rule lll of
the Rules of Criminal Procedure, as amended, reads:
Sec. 6. Suspension by reason of prejudicial question. - A petition for suspension of the criminal action based upon
Sec. 7. Elements of prejudicial question. - The elements of a prejudicial question are: (a) the previously instituted
(b) the resolution of such issue determines whether or not the criminal action may proceed.
Under the amendment, a prejudicial question is understood in law as that which must precede the criminal action
and which requires a decision before a final judgment can be rendered in the criminal action with which said
question is closely connected. The civil action must be instituted prior to the institution of the criminal action. In this
case, the Information was filed with the Sandiganbayan ahead of the complaint in Civil Case No. 7160 filed by the
State with the RTC in Civil Case No. 7160. Thus, no prejudicial question exists. (Emphasis supplied.)
Additionally, it is a principle in statutory construction that "a statute should be construed not only to be consistent
with itself but also to harmonize with other laws on the same subject matter, as to form a complete, coherent and
intelligible system."16 This principle is consistent with the maxim, interpretare et concordare leges legibus est
optimus interpretandi modus or every statute must be so construed and harmonized with other statutes as to form a
uniform system of jurisprudence.171 a vv p h i l
In other words, every effort must be made to harmonize seemingly conflicting laws. It is only when harmonization is
impossible that resort must be made to choosing which law to apply.
In the instant case, Art. 36 of the Civil Code and Sec. 7 of Rule 111 of the Rules of Court are susceptible of an
interpretation that would harmonize both provisions of law. The phrase "previously instituted civil action" in Sec. 7
of Rule 111 is plainly worded and is not susceptible of alternative interpretations. The clause "before any criminal
prosecution may be instituted or may proceed" in Art. 36 of the Civil Code may, however, be interpreted to mean
that the motion to suspend the criminal action may be filed during the preliminary investigation with the public
prosecutor or court conducting the investigation, or during the trial with the court hearing the case.
This interpretation would harmonize Art. 36 of the Civil Code with Sec. 7 of Rule 111 of the Rules of Court but also
with Sec. 6 of Rule 111 of the Civil Code, which provides for the situations when the motion to suspend the criminal
7
action during the preliminary investigation or during the trial may be filed. Sec. 6 provides:
Page
SEC. 6. Suspension by reason of prejudicial question.—A petition for suspension of the criminal action based upon
Thus, under the principles of statutory construction, it is this interpretation of Art. 36 of the Civil Code that should
govern in order to give effect to all the relevant provisions of law.
It bears pointing out that the circumstances present in the instant case indicate that the filing of the civil action and
the subsequent move to suspend the criminal proceedings by reason of the presence of a prejudicial question were
a mere afterthought and instituted to delay the criminal proceedings.
In Sabandal v. Tongco,18 we found no prejudicial question existed involving a civil action for specific performance,
overpayment, and damages, and a criminal complaint for BP 22, as the resolution of the civil action would not
determine the guilt or innocence of the accused in the criminal case. In resolving the case, we said:
Furthermore, the peculiar circumstances of the case clearly indicate that the filing of the civil case was a ploy to
delay the resolution of the criminal cases. Petitioner filed the civil case three years after the institution of the
criminal charges against him. Apparently, the civil action was instituted as an afterthought to delay the proceedings
in the criminal cases.19
Here, the civil case was filed two (2) years after the institution of the criminal complaint and from the time that
private respondent allegedly withdrew its equipment from the job site. Also, it is worth noting that the civil case was
instituted more than two and a half (2 ½) years from the time that private respondent allegedly stopped construction
of the proposed building for no valid reason. More importantly, the civil case praying for the rescission of the
construction agreement for lack of consideration was filed more than three (3) years from the execution of the
construction agreement.
Evidently, as in Sabandal, the circumstances surrounding the filing of the cases involved here show that the filing of
the civil action was a mere afterthought on the part of private respondent and interposed for delay. And as correctly
argued by petitioner, it is this scenario that Sec. 7 of Rule 111 of the Rules of Court seeks to prevent. Thus, private
respondent’s positions cannot be left to stand.
The Resolution of the Civil Case Is Not
Determinative of the Prosecution of the Criminal Action
In any event, even if the civil case here was instituted prior to the criminal action, there is, still, no prejudicial
question to speak of that would justify the suspension of the proceedings in the criminal case.
To reiterate, the elements of a prejudicial question under Sec. 7 of Rule 111 of the Rules of Court are: (1) the
previously instituted civil action involves an issue similar or intimately related to the issue raised in the subsequent
criminal action; and (2) the resolution of such issue determines whether or not the criminal action may proceed.
Petitioner argues that the second element of a prejudicial question, as provided in Sec. 7 of Rule 111 of the Rules,
is absent in this case. Thus, such rule cannot apply to the present controversy.
Private respondent, on the other hand, claims that if the construction agreement between the parties is declared
null and void for want of consideration, the checks issued in consideration of such contract would become mere
scraps of paper and cannot be the basis of a criminal prosecution.
We find for petitioner.
It must be remembered that the elements of the crime punishable under BP 22 are as follows:
(1) the making, drawing, and issuance of any check to apply for account or for value;
(2) the knowledge of the maker, drawer, or issuer that at the time of issue there are no sufficient funds in or
credit with the drawee bank for the payment of such check in full upon its presentment; and
(3) the subsequent dishonor of the check by the drawee bank for insufficiency of funds or credit, or
dishonor for the same reason had not the drawer, without any valid cause, ordered the bank to stop
payment.20
Undeniably, the fact that there exists a valid contract or agreement to support the issuance of the check/s or that
the checks were issued for valuable consideration does not make up the elements of the crime. Thus, this Court
has held in a long line of cases21 that the agreement surrounding the issuance of dishonored checks is irrelevant to
the prosecution for violation of BP 22. In Mejia v. People,22 we ruled:
It must be emphasized that the gravamen of the offense charge is the issuance of a bad check. The purpose for
which the check was issued, the terms and conditions relating to its issuance, or any agreement surrounding such
issuance are irrelevant to the prosecution and conviction of petitioner. To determine the reason for which checks
are issued, or the terms and conditions for their issuance, will greatly erode the faith the public reposes in the
stability and commercial value of checks as currency substitutes, and bring havoc in trade and in banking
communities. The clear intention of the framers of B.P. 22 is to make the mere act of issuing a worthless check
malum prohibitum.
Lee v. Court of Appeals23 is even more poignant. In that case, we ruled that the issue of lack of valuable
consideration for the issuance of checks which were later on dishonored for insufficient funds is immaterial to the
success of a prosecution for violation of BP 22, to wit:
Third issue. Whether or not the check was issued on account or for value.
Petitioner’s claim is not feasible. We have held that upon issuance of a check, in the absence of evidence to the
contrary, it is presumed that the same was issued for valuable consideration. Valuable consideration, in turn, may
consist either in some right, interest, profit or benefit accruing to the party who makes the contract, or some
8
forbearance, detriment, loss or some responsibility, to act, or labor, or service given, suffered or undertaken by the
Page
other side. It is an obligation to do, or not to do in favor of the party who makes the contract, such as the maker or
indorser.
In this case, petitioner himself testified that he signed several checks in blank, the subject check included, in
exchange for 2.5% interest from the proceeds of loans that will be made from said account. This is a valuable
consideration for which the check was issued. That there was neither a pre-existing obligation nor an obligation
incurred on the part of petitioner when the subject check was given by Bautista to private complainant on July 24,
1993 because petitioner was no longer connected with Unlad or Bautista starting July 1989, cannot be given merit
since, as earlier discussed, petitioner failed to adequately prove that he has severed his relationship with Bautista
or Unlad.
At any rate, we have held that what the law punishes is the mere act of issuing a bouncing check, not the purpose
for which it was issued nor the terms and conditions relating to its issuance. This is because the thrust of the law is
to prohibit the making of worthless checks and putting them into circulation.24 (Emphasis supplied.)
Verily, even if the trial court in the civil case declares that the construction agreement between the parties is void
for lack of consideration, this would not affect the prosecution of private respondent in the criminal case. The fact of
the matter is that private respondent indeed issued checks which were subsequently dishonored for insufficient
funds. It is this fact that is subject of prosecution under BP 22.lawphil.net
Therefore, it is clear that the second element required for the existence of a prejudicial question, that the resolution
of the issue in the civil action would determine whether the criminal action may proceed, is absent in the instant
case. Thus, no prejudicial question exists and the rules on it are inapplicable to the case before us.
WHEREFORE, we GRANT this petition. We hereby REVERSE and SET ASIDE the August 26, 2008 Decision in
SCA No. 08-0005 of the RTC, Branch 253 in Las Piñas City and the Orders dated October 16, 2007 and March 12,
2008 in Criminal Case Nos. 55554-61 of the MTC, Branch 79 in Las Piñas City. We order the MTC to continue with
the proceedings in Criminal Case Nos. 55554-61 with dispatch.
No costs.
SO ORDERED.
PRESBITERO J. VELASCO, JR.
Associate Justice
WE CONCUR:
CONSUELO YNARES-SANTIAGO
Associate Justice
Chairperson
MINITA V. CHICO-NAZARIO ANTONIO EDUARDO B. NACHURA
Associate Justice Associate Justice
DIOSDADO M. PERALTA
Associate Justice
9
Page
G.R. No. 14129 July 31, 1962

PEOPLE OF THE PHILIPPINES, plaintiff-appellant,
vs.
GUILLERMO MANANTAN, defendant-appellee.
Office of the Solicitor General for plaintiff-appellant.
Padilla Law Office for defendant-appellee.
REGALA, J.:
This is an appeal of the Solicitor General from the order of the Court of First Instance of Pangasinan dismissing the
information against the defendant.
The records show that the statement of the case and the facts, as recited in the brief of plaintiff-appellant, is
complete and accurate. The same is, consequently, here adopted, to wit:
In an information filed by the Provincial Fiscal of Pangasinan in the Court of First Instance of that Province,
defendant Guillermo Manantan was charged with a violation Section 54 of the Revised Election Code. A
preliminary investigation conducted by said court resulted in the finding a probable cause that the crime
charged as committed by defendant. Thereafter, the trial started upon defendant's plea of not guilty, the
defense moved to dismiss the information on the ground that as justice of the peace the defendant is one
of the officers enumerated in Section 54 of the Revised Election Code. The lower court denied the motion
to dismiss holding that a justice of the peace is within the purview Section 54. A second motion was filed by
defense counsel who cited in support thereof the decision of the Court of Appeals in People vs. Macaraeg,
(CA-G.R. No. 15613-R, 54 Off. Gaz., pp. 1873-76) where it was held that a justice of the peace is excluded
from the prohibition of Section 54 of the Revised Election Code. Acting on this second motion to dismiss,
the answer of the prosecution, the reply of the defense, and the opposition of the prosecution, the lower
court dismissed the information against the accused upon the authority of the ruling in the case cited by the
defense.
Both parties are submitting this case upon the determination of this single question of law: Is a justice the peace
included in the prohibition of Section 54 of the Revised Election Code?
Section 54 of the said Code reads:
No justice, judge, fiscal, treasurer, or assessor of any province, no officer or employee of the Army, no
member of the national, provincial, city, municipal or rural police force and no classified civil service officer
or employee shall aid any candidate, or exert any influence in any manner in a election or take part therein,
except to vote, if entitled thereto, or to preserve public peace, if he is a peace officer.
Defendant-appellee argues that a justice of the peace is not comprehended among the officers enumerated in
Section 54 of the Revised Election Code. He submits the aforecited section was taken from Section 449 of the
Revised Administrative Code, which provided the following:
SEC. 449. Persons prohibited from influencing elections. — No judge of the First Instance, justice of the
peace, or treasurer, fiscal or assessor of any province and no officer or employee of the Philippine
Constabulary, or any Bureau or employee of the classified civil service, shall aid any candidate or exert
influence in any manner in any election or take part therein otherwise than exercising the right to vote.
When, therefore, section 54 of the Revised Election Code omitted the words "justice of the peace," the omission
revealed the intention of the Legislature to exclude justices of the peace from its operation.
The above argument overlooks one fundamental fact. It is to be noted that under Section 449 of the Revised
Administrative Code, the word "judge" was modified or qualified by the phrase "of First instance", while under
Section 54 of the Revised Election Code, no such modification exists. In other words, justices of the peace were
expressly included in Section 449 of the Revised Administrative Code because the kinds of judges therein were
specified, i.e., judge of the First Instance and justice of the peace. In Section 54, however, there was no necessity
therefore to include justices of the peace in the enumeration because the legislature had availed itself of the more
generic and broader term, "judge." It was a term not modified by any word or phrase and was intended to
comprehend all kinds of judges, like judges of the courts of First Instance, Judges of the courts of Agrarian
Relations, judges of the courts of Industrial Relations, and justices of the peace.
It is a well known fact that a justice of the peace is sometimes addressed as "judge" in this jurisdiction. It is because
a justice of the peace is indeed a judge. A "judge" is a public officer, who, by virtue of his office, is clothed with
judicial authority (U.S. v. Clark, 25 Fed. Cas. 441, 422). According to Bouvier Law Dictionary, "a judge is a public
officer lawfully appointed to decide litigated questions according to law. In its most extensive sense the term
includes all officers appointed to decide litigated questions while acting in that capacity, including justices of the
peace, and even jurors, it is said, who are judges of facts."
A review of the history of the Revised Election Code will help to justify and clarify the above conclusion.
The first election law in the Philippines was Act 1582 enacted by the Philippine Commission in 1907, and which
was later amended by Act. Nos. 1669, 1709, 1726 and 1768. (Of these 4 amendments, however, only Act No. 1709
has a relation to the discussion of the instant case as shall be shown later.) Act No. 1582, with its subsequent 4
amendments were later on incorporated Chapter 18 of the Administrative Code. Under the Philippine Legislature,
several amendments were made through the passage of Acts Nos. 2310, 3336 and 3387. (Again, of these last 3
amendments, only Act No. 3587 has pertinent to the case at bar as shall be seen later.) During the time of the
Commonwealth, the National Assembly passed Commonwealth Act No. 23 and later on enacted Commonwealth
Act No. 357, which was the law enforced until June 1947, when the Revised Election Code was approved. Included
as its basic provisions are the provisions of Commonwealth Acts Nos. 233, 357, 605, 666, 657. The present Code
was further amended by Republic Acts Nos. 599, 867, 2242 and again, during the session of Congress in 1960,
amended by Rep. Acts Nos. 3036 and 3038. In the history of our election law, the following should be noted:
10
Under Act 1582, Section 29, it was provided:

Page
No public officer shall offer himself as a candidate for elections, nor shall he be eligible during the time that
he holds said public office to election at any municipal, provincial or Assembly election, except for
reelection to the position which he may be holding, and no judge of the First Instance, justice of the peace,
provincial fiscal, or officer or employee of the Philippine Constabulary or of the Bureau of Education shall
aid any candidate or influence in any manner or take part in any municipal, provincial, or Assembly election
under the penalty of being deprived of his office and being disqualified to hold any public office whatsoever
for a term of 5 year: Provide, however, That the foregoing provisions shall not be construe to deprive any
person otherwise qualified of the right to vote it any election." (Enacted January 9, 1907; Took effect on
January 15, 1907.)
Then, in Act 1709, Sec. 6, it was likewise provided:
. . . No judge of the First Instance, Justice of the peace provincial fiscal or officer or employee of the
Bureau of Constabulary or of the Bureau of Education shall aid any candidate or influence in any manner to
take part in any municipal provincial or Assembly election. Any person violating the provisions of this
section shall be deprived of his office or employment and shall be disqualified to hold any public office or
employment whatever for a term of 5 years, Provided, however, that the foregoing provisions shall not be
construed to deprive any person otherwise qualified of the right to vote at any election. (Enacted on August
31, 1907; Took effect on September 15, 1907.)
Again, when the existing election laws were incorporated in the Administrative Code on March 10, 1917, the
provisions in question read:
SEC. 449. Persons prohibited from influencing elections. — No judge of the First Instance, justice of the
peace, or treasurer, fiscal or assessor of any province and no officer or employee of the Philippine
Constabulary or any Bureau or employee of the classified civil service, shall aid any candidate or exert
influence in any manner in any election or take part therein otherwise than exercising the right to vote.
(Emphasis supplied)
After the Administrative Code, the next pertinent legislation was Act No. 3387. This Act reads:
SEC. 2636. Officers and employees meddling with the election. — Any judge of the First Instance, justice
of the peace, treasurer, fiscal or assessor of any province, any officer or employee of the Philippine
Constabulary or of the police of any municipality, or any officer or employee of any Bureau of the classified
civil service, who aids any candidate or violated in any manner the provisions of this section or takes part in
any election otherwise by exercising the right to vote, shall be punished by a fine of not less than P100.00
nor more than P2,000.00, or by imprisonment for not less than 2 months nor more than 2 years, and in all
cases by disqualification from public office and deprivation of the right of suffrage for a period of 5 years.
(Approved December 3, 1927.) (Emphasis supplied.)
Subsequently, however, Commonwealth Act No. 357 was enacted on August 22, 1938. This law provided in
Section 48:
SEC. 48. Active Interventation of Public Officers and Employees. — No justice, judge, fiscal, treasurer or
assessor of any province, no officer or employee of the Army, the Constabulary of the national, provincial,
municipal or rural police, and no classified civil service officer or employee shall aid any candidate, nor
exert influence in any manner in any election nor take part therein, except to vote, if entitled thereto, or to
preserve public peace, if he is a peace officer.
This last law was the legislation from which Section 54 of the Revised Election Code was taken.
It will thus be observed from the foregoing narration of the legislative development or history of Section 54 of the
Revised Election Code that the first omission of the word "justice of the peace" was effected in Section 48 of
Commonwealth Act No. 357 and not in the present code as averred by defendant-appellee. Note carefully,
however, that in the two instances when the words "justice of the peace" were omitted (in Com. Act No. 357 and
Rep. Act No. 180), the word "judge" which preceded in the enumeration did not carry the qualification "of the First
Instance." In other words, whenever the word "judge" was qualified by the phrase "of the First Instance", the words
"justice of the peace" would follow; however, if the law simply said "judge," the words "justice of the peace" were
omitted.
The above-mentioned pattern of congressional phraseology would seem to justify the conclusion that when the
legislature omitted the words "justice of the peace" in Rep. Act No. 180, it did not intend to exempt the said officer
from its operation. Rather, it had considered the said officer as already comprehended in the broader term "judge".
It is unfortunate and regrettable that the last World War had destroyed congressional records which might have
offered some explanation of the discussion of Com. Act No. 357 which legislation, as indicated above, has
eliminated for the first time the words "justice of the peace." Having been completely destroyed, all efforts to seek
deeper and additional clarifications from these records proved futile. Nevertheless, the conclusions drawn from the
historical background of Rep. Act No. 180 is sufficiently borne out by reason hid equity.
Defendant further argues that he cannot possibly be among the officers enumerated in Section 54 inasmuch as
under that said section, the word "judge" is modified or qualified by the phrase "of any province." The last
mentioned phrase, defendant submits, cannot then refer to a justice of the peace since the latter is not an officer of
a province but of a municipality.
Defendant's argument in that respect is too strained. If it is true that the phrase "of any province" necessarily
removes justices of the peace from the enumeration for the reason that they are municipal and not provincial
officials, then the same thing may be said of the Justices of the Supreme Court and of the Court of Appeals. They
are national officials. Yet, can there be any doubt that Justices of the Supreme Court and of the Court of Appeals
are not included in the prohibition? The more sensible and logical interpretation of the said phrase is that it qualifies
11
fiscals, treasurers and assessors who are generally known as provincial officers.
The rule of "casus omisus pro omisso habendus est" is likewise invoked by the defendant-appellee. Under the said
Page
rule, a person, object or thing omitted from an enumeration must be held to have been omitted intentionally. If that
rule is applicable to the present, then indeed, justices of the peace must be held to have been intentionally and
deliberately exempted from the operation of Section 54 of the Revised Election Code.
The rule has no applicability to the case at bar. The maxim "casus omisus" can operate and apply only if and when
the omission has been clearly established. In the case under consideration, it has already been shown that the
legislature did not exclude or omit justices of the peace from the enumeration of officers precluded from engaging
in partisan political activities. Rather, they were merely called by another term. In the new law, or Section 54 of the
Revised Election Code, justices of the peace were just called "judges."
In insisting on the application of the rule of "casus omisus" to this case, defendant-appellee cites authorities to the
effect that the said rule, being restrictive in nature, has more particular application to statutes that should be strictly
construed. It is pointed out that Section 54 must be strictly construed against the government since proceedings
under it are criminal in nature and the jurisprudence is settled that penal statutes should be strictly interpreted
against the state.
Amplifying on the above argument regarding strict interpretation of penal statutes, defendant asserts that the spirit
of fair play and due process demand such strict construction in order to give "fair warning of what the law intends to
do, if a certain line is passed, in language that the common world will understand." (Justice Holmes, in McBoyle v.
U.S., 283 U.S. 25, L. Ed. 816).
The application of the rule of "casus omisus" does not proceed from the mere fact that a case is criminal in nature,
but rather from a reasonable certainty that a particular person, object or thing has been omitted from a legislative
enumeration. In the present case, and for reasons already mentioned, there has been no such omission. There has
only been a substitution of terms.
The rule that penal statutes are given a strict construction is not the only factor controlling the interpretation of such
laws; instead, the rule merely serves as an additional, single factor to be considered as an aid in determining the
meaning of penal laws. This has been recognized time and again by decisions of various courts. (3 Sutherland,
Statutory Construction, p. 56.) Thus, cases will frequently be found enunciating the principle that the intent of the
legislature will govern (U.S. vs. Corbet, 215 U.S. 233). It is to be noted that a strict construction should not be
permitted to defeat the policy and purposes of the statute (Ash Sheep Co. v. U.S., 252 U.S. 159). The court may
consider the spirit and reason of a statute, as in this particular instance, where a literal meaning would lead to
absurdity, contradiction, injustice, or would defeat the clear purpose of the law makers (Crawford, Interpretation of
Laws, Sec. 78, p. 294). A Federal District court in the U.S. has well said:
The strict construction of a criminal statute does not mean such construction of it as to deprive it of the
meaning intended. Penal statutes must be construed in the sense which best harmonizes with their intent
and purpose. (U.S. v. Betteridge 43 F. Supp. 53, 56, cited in 3 Sutherland Statutory Construction 56.)
As well stated by the Supreme Court of the United States, the language of criminal statutes, frequently, has been
narrowed where the letter includes situations inconsistent with the legislative plan (U.S. v. Katz, 271 U.S. 354; See
also Ernest Brunchen, Interpretation of the Written Law (1915) 25 Yale L.J. 129.)
Another reason in support of the conclusion reached herein is the fact that the purpose of the statute is to enlarge
the officers within its purview. Justices of the Supreme Court, the Court of Appeals, and various judges, such as the
judges of the Court of Industrial Relations, judges of the Court of Agrarian Relations, etc., who were not included in
the prohibition under the old statute, are now within its encompass. If such were the evident purpose, can the
legislature intend to eliminate the justice of the peace within its orbit? Certainly not. This point is fully explained in
the brief of the Solicitor General, to wit:
On the other hand, when the legislature eliminated the phrases "Judge of First Instance" and justice of the
peace", found in Section 449 of the Revised Administrative Code, and used "judge" in lieu thereof, the
obvious intention was to include in the scope of the term not just one class of judges but all judges,
whether of first Instance justices of the peace or special courts, such as judges of the Court of Industrial
Relations. . . . .
The weakest link in our judicial system is the justice of the peace court, and to so construe the law as to
allow a judge thereof to engage in partisan political activities would weaken rather than strengthen the
judiciary. On the other hand, there are cogent reasons found in the Revised Election Code itself why
justices of the peace should be prohibited from electioneering. Along with Justices of the appellate courts
and judges of the Court of First Instance, they are given authority and jurisdiction over certain election
cases (See Secs. 103, 104, 117-123). Justices of the peace are authorized to hear and decided inclusion
and exclusion cases, and if they are permitted to campaign for candidates for an elective office the
impartiality of their decisions in election cases would be open to serious doubt. We do not believe that the
legislature had, in Section 54 of the Revised Election Code, intended to create such an unfortunate
situation. (pp. 708, Appellant's Brief.)
Another factor which fortifies the conclusion reached herein is the fact that the administrative or executive
department has regarded justices of the peace within the purview of Section 54 of the Revised Election Code.
In Tranquilino O. Calo, Jr. v. The Executive Secretary, the Secretary of Justice, etc. (G.R. No. L-12601), this Court
did not give due course to the petition for certiorari and prohibition with preliminary injunction against the
respondents, for not setting aside, among others, Administrative Order No. 237, dated March 31, 1957, of the
President of the Philippines, dismissing the petitioner as justice of the peace of Carmen, Agusan. It is worthy of
note that one of the causes of the separation of the petitioner was the fact that he was found guilty in engaging in
electioneering, contrary to the provisions of the Election Code.
Defendant-appellee calls the attention of this Court to House Bill No. 2676, which was filed on January 25, 1955. In
that proposed legislation, under Section 56, justices of the peace are already expressly included among the officers
enjoined from active political participation. The argument is that with the filing of the said House Bill, Congress
12
impliedly acknowledged that existing laws do not prohibit justices of the peace from partisan political activities.
Page
The argument is unacceptable. To begin with, House Bill No. 2676 was a proposed amendment to Rep. Act No.
180 as a whole and not merely to section 54 of said Rep. Act No. 180. In other words, House Bill No. 2676 was a
proposed re-codification of the existing election laws at the time that it was filed. Besides, the proposed
amendment, until it has become a law, cannot be considered to contain or manifest any legislative intent. If the
motives, opinions, and the reasons expressed by the individual members of the legislature even in debates, cannot
be properly taken into consideration in ascertaining the meaning of a statute (Crawford, Statutory Construction,
Sec. 213, pp. 375-376), a fortiori what weight can We give to a mere draft of a bill.
On law reason and public policy, defendant-appellee's contention that justices of the peace are not covered by the
injunction of Section 54 must be rejected. To accept it is to render ineffective a policy so clearly and emphatically
laid down by the legislature.
Our law-making body has consistently prohibited justices of the peace from participating in partisan politics. They
were prohibited under the old Election Law since 1907 (Act No. 1582 and Act No. 1709). Likewise, they were so
enjoined by the Revised Administrative Code. Another which expressed the prohibition to them was Act No. 3387,
and later, Com. Act No. 357.
Lastly, it is observed that both the Court of Appeals and the trial court applied the rule of "expressio unius, est
exclusion alterius" in arriving at the conclusion that justices of the peace are not covered by Section 54. Said the
Court of Appeals: "Anyway, guided by the rule of exclusion, otherwise known as expressio unius est exclusion
alterius, it would not be beyond reason to infer that there was an intention of omitting the term "justice of the peace
from Section 54 of the Revised Election Code. . . ."
The rule has no application. If the legislature had intended to exclude a justice of the peace from the purview of
Section 54, neither the trial court nor the Court of Appeals has given the reason for the exclusion. Indeed, there
appears no reason for the alleged change. Hence, the rule of expressio unius est exclusion alterius has been
erroneously applied. (Appellant's Brief, p. 6.)
Where a statute appears on its face to limit the operation of its provisions to particular persons or things by
enumerating them, but no reason exists why other persons or things not so enumerated should not have
been included, and manifest injustice will follow by not so including them, the maxim expressio unius est
exclusion alterius, should not be invoked. (Blevins v. Mullally 135 p. 307, 22 Cal. App. 519.) .
FOR THE ABOVE REASONS, the order of dismissal entered by the trial court should be set aside and this case is
remanded for trial on the merits.
Bengzon, C.J., Bautista Angelo, Labrador, Concepcion, Barrera and Makalintal, JJ., concur.
Padilla and Dizon, JJ., took no part.
Reyes, J.B.L., J., is on leave.
13
Page
G.R. No. L-38736 May 21, 1984
FELIPE G. TAC-AN, petitioner,
vs.
HONORABLE COURT OF APPEALS and ELEUTERIO ACOPIADO, MAXIMINO ACOPIADO, the SPOUSES
JESUS PAGHASIAN and PILAR LIBETARIO, respondents.
Liliano B. Neri for petitioner.
Vic T. Lacaya for private respondents.
ABAD SANTOS, J.:
The petitioner, Felipe G. Tac-An, is a lawyer whose services were engaged by the brothers Eleuterio Acopiado and
Maximino Acopiado who were accused of frustrated murder and theft of large cattle before the Municipal Court of
New Piñan, Zamboanga del Norte in March, 1960.
On April 4, 1960, Tac-An caused a document entitled, "Deed of Quitclaim" to be thumb-marked by the Acopiado
brothers whereby for the sum of P1,200.00 representing his fees as their lawyer in the criminal cases, they
conveyed to him a parcel of land with an area of three hectares. The document was acknowledged before Notary
Public Pacifico Cimafranca on the same date who explained its contents to the Acopiados.
On April 6, 1960, or two days after the execution of the deed, the Acopiados told Tac-An that they were terminating
his services because their wives and parents did not agree that the land be given to pay for his services. They also
said that they had hired another lawyer, a relative, to defend them. But Tac-An continued to represent them.
In the case for frustrated murder, the Acopiados were acquitted. The cases for theft of large cattle were dismissed
due to the desistance of the complainants.
On April 2, 1961, Eleuterio sold his share of the land previously conveyed to Tac-An to Jesus Paghasian and Pilar
Libetario but the latter did not take possession thereof.
In June, 1964, Tac-An appointed Irineo Villejo, a barrio captain, as his overseer in the land. On July 2, 1964, Tac-
An also secured the approval of the Provincial Governor of Zamboanga del Norte to the Deed of Quitclaim. And on
October 7, 1964, Tac-An filed a complaint against the Acopiado brothers, Paghasian and Libetario in the CFI of
Zamboanga del Norte. He prayed that he be declared the owner of the land; that the sale made in favor of
Paghasian and owner Libetario be annulled; and that he be paid damages, attorney's fees, etc.
The Court of First Instance decided in favor of Tac-An whereupon the Acopiados, et al. appealed to the Court of
Appeals.
The Court of Appeals voided the transfer of the land to Tac-An but held that for his services in the criminal cases he
was entitled to the agreed upon amount of P1,200.00. The judgment of the Court of Appeals reads as follows:
WHEREFORE, the judgment appealed from is hereby reversed and set aside. In lieu thereof, another one
is rendered ordering the defendants Acopiados to pay the plaintiff the sum of P1,200.00 with interest at a
legal rate from the date of the finality of this judgment until full payment thereof. No pronouncement as to
costs. (Rollo, pp. 40-41.)
Petitioner Tac-An prays that the decision of the Court of Appeals be set aside and that the decision of the Court of
First Instance be upheld instead.
The petition is not impressed with merit.
The Court of Appeals found as a fact that the Acopiado brothers fully understood the tenor of the Deed of Quitclaim
which they executed. But the Court of Appeals also found as a fact that the Acopiado brothers are Non-Christians,
more specifically Subanons, and that each is married to a Subanon. And because they are Non-Christians, the
Court of Appeals applied Section 145 of the Administrative Code of Mindanao and Sulu which reads as follows:
Sec. 145. Contracts with Non-Christians requisites. -- Save and except contracts of sale or barter of
personal property and contracts of personal service comprehended in chapter seventeen hereof no
contract or agreement shall be made in the Department by any person with any Moro or other non-
Christian tribe or portion thereof the Department or with any individual Moro or other non-Christian
inhabitants of the same for the payment or delivery of money or other things of value in present or in
prospective, or in the manner affecting or relating to any real property, unless such contract or agreement
be executed and approved as follows:
xxx xxx xxx
(b) It shall be executed before a judge of a court of record, justice or auxilliary justice of the peace, or
notary public, and shall bear the approval of the provincial governor wherein the same was executed or his
representative duly authorized in writing for such purpose, indorsed upon it.
It should be stated that under Section 146 of the same Code, contracts or agreements made in violation of Sec.
145 shall be "null and void."
It should be recalled that on July 2, 1964, Tac-An secured the approval of the Provincial Governor of Zamboanga
del Norte to the Deed of Quitclaim and that should have satisfied the requirement of Sec. 145 of the Administrative
Code for Mindanao and Sulu. But it appears that on April 12, 1965, while Tac-An's suit was pending in the trial
court, the Governor of Zamboanga del Norte revoked his approval for the reasons stated therein.
The petitioner now asserts that the revocation of the approval which had been given by the Provincial Governor has
no legal effect and cannot affect his right to the land which had already vested. But as Justice Conrado M.
14
Vasquez, with Justices Mateo Canonoy and Ameurfina M. Herrera concurring, said:
Page
The approval by Provincial Governor Felipe Azcuna appearing on the face of the Deed of Quitclaim (Exh.
"E ") made on July 2, 1964 may no longer be relied upon by the plaintiff in view of the revocation thereof by
the same official on April 12, 1965 (Exh. 4). The revocation was based on the ground that the signature of
Governor Azcuna was obtained thru a false representation to the effect that the alleged transaction was
legal and voluntary when in truth and in fact, as found out later, the said parcel of land was the subject
matter of a court litigation; and, moreover, the non-Christian vendors were not brought before him for
interrogation, confirmation or ratification of the alleged deed of quitclaim. The fact that the revocation was
made after the filing of instant action on October 10, 1964 does not vitiate the aforesaid action of the
Provincial Governor. Significantly, no attempt was made to disprove the truth of the reasons stated in the
certificate of revocation (Exh. 4). (Rollo, p. 37.)
The petitioner also argues that the Administrative Code of Mindanao and Sulu was repealed on June 19, 1965 by
Republic Act No, 4252, hence the approval of the Provincial Governor became unnecessary. Suffice it to say that at
times material to the case, i.e. when the Deed of Quitclaim was executed, when the approval by the Provincial
Governor was given and when the approval was revoked, Sections 145 and 146 of the Administrative Code of
Mindanao and Sulu were in full force and effect and since they were substantive in nature the repealing statute
cannot be given retroactive effect. It should also be stated that the land in question must be presumed to be
conjugal in nature and since the spouses of the Acopiado brothers did not consent to its transfer to the petitioner,
the transaction was at least voidable.
WHEREFORE finding the petition to be lacking in merit, the same is hereby dismissed with costs against the
petitioner.
SO ORDERED.
Makasiar, Aquino, Concepcion, Jr., Guerrero, and De Castro, JJ., concur.
Escolin, J., took no part.
15
Page
G.R. Nos. 60225-26 May 8, 1992
NATIONAL POWER CORPORATION, petitioner,
vs.
HONORABLE ZAIN B. ANGAS, District Judge of the Court of First Instance of Lanao del Sur, HADJI DALUMA KINIDAR,
EBRA ALI and/or GASNARA ALI (intervenors),
MANGORSI CASAN, CASNANGAN BATUGAN, PUNDAMARUG ATOCAL, PASAYOD PADO, DIMAAMPAO BAUTE,
CASNANGAN BAUTE, DIMAPORO SUBANG, TAMBILAWAN OTE, MANISUN ATOCAL, MASACAL TOMIARA (In Civil
Case No. 2277) and LACSAMAN BATUGAN, and/or GUIMBA SHIPPING & DEVELOPMENT CORPORATION,
MAGANCONG DIGAYAN, MOCTARA LAMPACO, LAMPACO PASANDALAN, DIMAPORO SUBANG, HADJI DALUMA
KINIDAR, DIMAAMPAO BAUTE, PANGONOTAN COSNA TAGOL, SALACOP DIMACALING, HADJI SITTIE SOHRA
LINANG BATARA, BERTUDAN PIMPING and/or CADUROG PIMPING, BUTUAN TAGOL, DISANGCOPAN MARABONG,
and HADJI SALIC SAWA (In Civil Case No. 2248), respondents.
Lucio C. Badelles for petitioner. Dimnatang Saro for private respondents.
PARAS, J.:
The basic issue in this original action for certiorari and mandamus filed by the National Power Corporation is
whether or not, in the computation of the legal rate of interest on just compensation for expropriated lands, the law
applicable is Article 2209 of the Civil Code which prescribes a 6% legal interest rate or Central Bank Circular No.
416 which fixed the legal interest rate at 12% per annum. Pending consideration of this code on the merits,
petitioner seeks the issuance of a writ of preliminary injunction and/or restraining order to restrain or enjoin the
respondent judge of the lower court from enforcing the herein assailed orders and from further acting or proceeding
with Civil Case Nos. 2248 and 2277.
The following are the antecedents of the case:
On April 13, 1974 and December 3, 1974, petitioner National Power Corporation, a government-owned and
controlled corporation and the agency through which the government undertakes the on-going infrastructure and
development projects throughout the country, filed two complaints for eminent domain against private respondents
with the Court of First Instance (now Regional Trial Court) of Lanao del Sur, docketed as Civil Case No. 2248 and
Civil Case No. 2277, respectively. The complaint which sought to expropriate certain specified lots situated at
Limogao, Saguiaran, Lanao del Sur was for the purpose of the development of hydro-electric power and production
of electricity as well as the erection of such subsidiary works and constructions as may be necessarily connected
therewith.
Both cases were jointly tried upon agreement of the parties. After responsive pleadings were filed and issues
joined, a series of hearings before court-designated commissioners were held.
On June 15, 1979, a consolidated decision in Civil Cases Nos. 2248 and 2277 was rendered by the lower court,
declaring and confirming that the lots mentioned and described in the complaints have entirely been lawfully
condemned and expropriated by the petitioner, and ordering the latter to pay the private respondents certain sums
of money as just compensation for their lands expropriated "with legal interest thereon . . . until fully paid."
Two consecutive motions for reconsideration of the said consolidated decision were filed by the petitioner. The
same were denied by the respondent court. Petitioner did not appeal the aforesaid consolidated decision, which
became final and executory.
Thus, on May 16, 1980, one of the private respondents (Sittie Sohra Batara) filed an ex-parte motion for the
execution of the June 15, 1979 decision, praying that petitioner be directed to pay her the unpaid balance of
P14,300.00 for the lands expropriated from her, including legal interest which she computed at 6% per annum. The
said motion was granted by the lower court. Thereafter, the lower court directed the petitioner to deposit with its
Clerk of Court the sums of money as adjudged in the joint decision dated June 15, 1979. Petitioner complied with
said order and deposited the sums of money with interest computed at 6% per annum.
On February 10, 1981, one of the private respondents (Pangonatan Cosna Tagol), through counsel, filed with the
trial court an ex-parte motion in Civil Case No. 2248 praying, for the first time, that the legal interest on the just
compensation awarded to her by the court be computed at 12% per annum as allegedly "authorized under and by
virtue of Circular No. 416 of the Central Bank issued pursuant to Presidential Decree No. 116 and in a decision of
the Supreme Court that legal interest allowed in the judgment of the courts, in the absence of express contract,
shall be computed at 12% per annum." (Brief for Respondents, p. 3)
On February 11, 1981, the lower court granted the said motion allowing 12% interest per annum. (Annex L,
Petition). Subsequently, the other private respondents filed motions also praying that the legal interest on the just
compensation awarded to them be computed at 12% per annum, on the basis of which the lower court issued on
March 10, 1981 and August 28, 1981 orders bearing similar import.
Petitioner moved for a reconsideration of the lower court's last order dated August 28, 1981, alleging that the main
decision had already become final and executory with its compliance of depositing the sums of money as just
compensation for the lands condemned, with legal interest at 6% per annum; that the said main decision can no
longer be modified or changed by the lower court; and that Presidential Decree No. 116 is not applicable to this
case because it is Art. 2209 of the Civil Code which applies.
On January 25, 1982, the lower court denied petitioner's, motion for reconsideration, stating that the rate of interest
at the time of the promulgation of the June 15, 1981 decision is that prescribed by Central Bank Circular No. 416
issued pursuant to Presidential Decree No. 116, which is 12% per annum, and that it did not modify or change but
merely amplified its order of August 28, 1981 in the determination of the legal interest.
Petitioner brings the case to Us for a determination of which legal interest is applicable to the transaction in
question.
16
Central Bank Circular No. 416 reads:

By virtue of the authority granted to it under Section 1 of Act No. 2655, as amended, otherwise known as the "Usury Law,"
Page
the Monetary Board, in its Resolution No. 1622 dated July 29, 1974, has prescribed that the rate of interest for the loan or
forbearance of any money, goods or credits and the rate allowed in judgments, in the absence of express contract as to
such rate of interest, shall be twelve per cent (12%) per annum.
It is clear from the foregoing provision that the Central Bank circular applies only to loan or forbearance of money,
goods or credits. This has already been settled in several cases decided by this Court. Private respondents,
however, take exception to the inclusion of the term "judgments" in the said circular, claiming that such term refers
to any judgment directing the payment of legal interest, which term includes the questioned judgment of the lower
court in the case at bar.
Private respondents' contention is bereft of merit. The term "judgments" as used in Section 1 of the Usury Law, as
well as in Central Bank Circular No. 416, should be interpreted to mean only judgments involving loan or
forbearance of money, goods or credits, following the principle of ejusdem generis. Under this doctrine, where
general terms follow the designation of particular things or classes of persons or subjects, the general term will be
construed to comprehend those things or persons of the same class or of the same nature as those specifically
enumerated (Crawford, Statutory Construction, p.191; Go Tiaco vs. Union Ins. Society of Canton; Mutuc vs. COMELEC)
The purpose of the rule on ejusdem generis is to give effect to both the particular and general words, by treating
the particular words as indicating the class and the general words as including all that is embraced in said class,
although not specifically named by the particular words. This is justified on the ground that if the lawmaking body
intended the general terms to be used in their unrestricted sense, it would have not made an enumeration of
particular subjects but would have used only general terms (2 Sutherland, Statutory Construction, 3rd ed., pp. 395-400).
Applying the said rule on statutory construction to Central Bank Circular No. 416, the general term "judgments" can
refer only to judgments in cases involving loans or forbearance of any money, goods or credits. As significantly laid
down by this Court in the case of Reformina vs. Tomol, 139 SCRA 260:
The judgments spoken of and referred to are judgments in litigations involving loans or forbearance of any money, goods
or credits. Any other kind of monetary judgment which has nothing to do with, nor involving loans or forbearance of any
money, goods or credits does not fall within the coverage of the said law for it is not within the ambit of the authority
granted to the Central Bank. The Monetary Board may not tread on forbidden grounds. It cannot rewrite other laws. That
function is vested solely with the legislative authority. It is axiomatic in legal hermeneutics that statutes should be
construed as a whole and not as a series of disconnected articles and phrases. In the absence of a clear contrary
intention, words and phrases in statutes should not be interpreted in isolation from one another. A word or phrase in a
statute is always used in association with other words or phrases and its meaning may thus be modified or restricted by
the latter.
Obviously, therefore, Art. 2209 of the Civil Code, and not Central Bank Circular No. 416, is the law applicable to the
case at bar. Said law reads:
Art. 2209. If the obligation consists in the payment of a sum of money, and the debtor incurs a delay, the indemnity for
damages, there being no stipulation to the contrary, shall be the payment of the interest agreed upon, and in the absence
of stipulation, the legal interest, which is six percent per annum.
The Central Bank circular applies only to loan or forbearance of money, goods or credits and to judgments
involving such loan or forbearance of money, goods or credits. This is evident not only from said circular but also
from Presidential Decree No. 116, which amended Act No. 2655, otherwise known as the Usury Law. On the other
hand, Art. 2209 of the Civil Code applies to transactions requiring the payment of indemnities as damages, in
connection with any delay in the performance of the obligation arising therefrom other than those covering loan or
forbearance of money, goods or credits.
In the case at bar, the transaction involved is clearly not a loan or forbearance of money, goods or credits but
expropriation of certain parcels of land for a public purpose, the payment of which is without stipulation regarding
interest, and the interest adjudged by the trial court is in the nature of indemnity for damages. The legal interest
required to be paid on the amount of just compensation for the properties expropriated is manifestly in the form of
indemnity for damages for the delay in the payment thereof. Therefore, since the kind of interest involved in the
joint judgment of the lower court sought to be enforced in this case is interest by way of damages, and not by way
of earnings from loans, etc. Art. 2209 of the Civil Code shall apply.
As for private respondents' argument that Central Bank Circular No. 416 impliedly repealed or modified Art. 2209 of
the Civil Code, suffice it to state that repeals or even amendments by implication are not favored if two laws can be
fairly reconciled. The Courts are slow to hold that one statute has repealed another by implication, and they will not
make such an adjudication if they can refrain from doing so, or if they can arrive at another result by any
construction which is just and reasonable. Besides, the courts will not enlarge the meaning of one act in order to
decide that it repeals another by implication, nor will they adopt an interpretation leading to an adjudication of
repeal by implication unless it is inevitable and a clear and explicit reason therefor can be adduced. (82 C.J.S. 479-
486). In this case, Central Bank Circular No. 416 and Art. 2209 of the Civil Code contemplate different situations
and apply to different transactions. In transactions involving loan or forbearance of money, goods or credits, as well
as judgments relating to such loan or forbearance of money, goods or credits, the Central Bank circular applies. It
is only in such transactions or judgments where the Presidential Decree allowed the Monetary Board to dip its
fingers into. On the other hand, in cases requiring the payment of indemnities as damages, in connection with any
delay in the performance of an obligation other than those involving loan or forbearance of money, goods or credits,
Art. 2209 of the Civil Code applies. For the Court, this is the most fair, reasonable, and logical interpretation of the
two laws. We do not see any conflict between Central Bank Circular No. 416 and Art. 2209 of the Civil Code or any
reason to hold that the former has repealed the latter by implication.
WHEREFORE, the petition is GRANTED. The Orders promulgated on February 11, 1981, March 10, 1981, August
28, 1981 and January 25, 1982 (as to the recomputation of interest at 12% per annum) are ANNULLED and SET
ASIDE. It is hereby declared that the computation of legal interest at 6% per annum is the correct and valid legal
interest allowed in payments of just compensation for lands expropriated for public use to herein private
respondents by the Government through the National Power Corporation. The injunction heretofore granted is
17
hereby made permanent. No costs.

SO ORDERED.
Page
Melencio-Herrera, Padilla, Regalado and Nocon, JJ., concur

G.R. No. L-31711 September 30, 1971
ANTONIO J. VILLEGAS as Mayor of the City of Manila and MANUEL D. LAPID, petitioners-appellants,
vs.
ABELARDO SUBIDO as Civil Service Commissioner, EDUARDO Z. ROMUALDEZ as Secretary of Finance,
JOSE R. GLORIA as Acting Asst. City Treasurer of Manila, and HON. CONRADO M. VASQUEZ as Presiding
Judge of Branch V, Court of First Instance of Manila, respondents-appellees.
Gregorio A. Ejercito and Restituto R. Villanueva for petitioners-appellants.
Office of the Solicitor General Felix Q. Antonio, Acting Assistant Solicitor General Hector C. Fule and Solicitor
Santiago M. Kapunan for respondents-appellees.
FERNANDO, J.:
Petitioner Antonio J. Villegas, in this appeal from a decision of the lower court dismissing a special civil action for
prohibition, quo warranto and mandamus would lay claim as the Mayor of the City of Manila to the power of
appointment of the Assistant City Treasurer to which office the other petitioner, Manuel D. Lapid, was by him
named even if under its Charter1 such a prerogative is expressly vested in the President of the Philippines.2 He
would invoke a provision in the Decentralization Act to the effect that all "other employees, except teachers, paid
out of provincial, city or municipal general funds, and other local funds shall, subject to civil service law, rules and
regulations, be appointed by the provincial governor, city or municipal mayor upon recommendation of the office
head concerned."3 He is not deterred by the rather general and in explicit character of such statutory language as
he contends for a construction rather generous, if not latitudinarian, in scope purportedly in consonance with the
avowed purpose of the Act of enlarging boundaries of local autonomy. Respondent Abelardo Subido, who was
proceeded against as Commissioner of the Civil Service,4 takes a stand diametrically opposite not only because
there is no legal basis for such a claim in the light of what is expressly ordained in the City Charter but also
because such an interpretation of the provision related upon would disregard the well-settled doctrine that implied
repeals are not favored. The lower court, in a well-written decision by the Honorable Conrado M. Vasquez,
accepted such a view. After a careful study of the matter, we cannot discern any error. We affirm.
The facts as found by the lower court follows: "In a letter dated June 3, 1968, respondent Eduardo Z. Romualdez,
Secretary of Finance, authorized respondent Jose R. Gloria of the Office of the City Treasurer of Manila to assume
the duties of Assistant City Treasurer effective June 1, 1968, vice Felino Fineza who retired from the government
service on May 31, 1968. In administrative Order No. 40, series of 1968, dated June 17, 1968, petitioner Antonio J.
Villegas, Mayor of the City of Manila, directed respondent Gloria to desist and refrain from exercising the duties and
functions of the Assistant City Treasurer,' on the ground that respondent Romualdez "is not empowered to make
such designation." On January 1, 1969, Mayor Villegas, appointed petitioner Manuel D. Lapid, chief of the cash
division of the Office of the City Treasurer of Manila, as Assistant City Treasurer. In a 1st endorsement dated
February 14, 1969, respondent Abelardo Subido, Commissioner of Civil Service disapproved the appointment of
Lapid, basing his action, on an opinion of the Secretary of Justice dated September 19, 1968 to the effect that the
appointment of Assistant Provincial Treasurers is still governed by Section 2088 (A) of the Revised Administrative
Code, and not by Section 4 of the Decentralization Law, Republic Act No. 5185."5
Thereafter on February 25, 1969, to quote anew from the appealed decision: "Mayor Villegas and Manuel D. Lapid
filed the instant petition for prohibition, quo warranto and mandamus, with application for writ of preliminary
injunction, praying that judgment be rendered to declare illegal and void ab initio the authorization given by
respondent Romualdez to respondent Gloria to assume the duties of assistant city treasurer of Manila, and that a
writ of mandamus be issued to respondent Commissioner of Civil Service Subido commanding him to approve the
appointment of petitioner Lapid to the said office in accordance with the civil Service Rules."6 It was not until the
filing of the petition that respondent Jose R. Gloria was nominated by the President of the Philippines to the
position of Assistant City treasurer of Manila and thereafter duly confirmed. After the case was submitted for
judgment on the pleadings and the documentary exhibits stipulated by the parties, the court rendered its decision
on August 4, 1969 dismissing the petition. Hence this appeal by way of certiorari.
With this Tribunal, as with the court below, the decisive question is the applicable law. The Charter of the City of
Manila, enacted in 1949, in express terms did confer on the President of the Philippines, with the consent of the
Commission on Appointments, the power to appoint the Assistant City Treasurer.7 On the other hand, support for
the petition is premised on the expansive interpretation that would be accorded the general provisions found in the
Decentralization Act of 1967 to the effect that it is a city mayor who has the power to appoint all other employees
paid out of city or local funds subject to civil service law, rules and regulations.8
It is understandable why the choice for the lower court was not difficult to make. What has been so clearly ordained
in the Charter is controlling. It survives in the face of the assertion that the additional power granted local officials to
appoint employees paid out of local funds would suffice to transfer such authority to petitioner Mayor. A perusal of
the words of the statute, even if far from searching would not justify such an interpretation. This is all more evident,
considering the fidelity manifested by this Court to the doctrine that looks with less than favor on implied appeals.
The decision now on appeal, to repeat, must be affirmed.
1. The inherent weakness of the contention of petitioner Mayor that would seize upon the vesting of the appointing
power of all other "employees" except teachers paid out of local funds to justify his choice of petitioner Manuel D.
Lapid as Assistant City Treasurer is readily disclosed. The Revised Administrative Code distinguishes one in that
category from an "officer" to designate those "whose duties, not being of a clerical or manual nature, may be
considered to involve the exercise of discretion in the performance of the function of government, whether such
duties are precisely defined by law or not."9 Clearly, the Assistant and City Treasurer is an officer, not an employee.
Then, too, Section 4 of the Decentralization Act relied upon by petitioner City Mayor specifically enumerates, the
officials and their assistants whom he can appoint, specifically excluding therefrom city treasurers.10 The expansive
18
interpretation contended for is thus unwarranted.

Page
Nor is the case strengthened for petitioner City Mayor by the invocation of Pineda v. Claudio.11 It is not to be denied
that in the opinion of the Court, penned by Justice Castro, undue interference with the power and prerogatives of a
local executive is sought to be avoided, considering his primary responsibility for efficient governmental
administration. What is not to be ignored though is that such a principle was announced in connection with the
appointment of a department head, the chief of police, who necessarily must enjoy the fullest confidence of the
local executive, one moreover whose appointment is expressly vested in the city mayor. The principle therein
announced does not extend as far as the choice of an assistant city treasurer whose functions do not require that
much degree of confidence, not to mention the specific grant of such authority to the President. Equally unavailing
then is Villegas v. Subido,12 where this Court, through the then Justice Capistrano, recognized that the choice of
who the city legal officer should be rests solely on the city mayor, such an office requiring as it does the highest
degree of confidence. It bears repeating that the situation in the case before us is of a different category. The
decision appealed from, then, is not to be impugned as a failure to abide by controlling pronouncements of this
Tribunal.
2. Much less is reversal of the lower court decision justified on the plea that the aforesaid provision in the
Decentralization Act had the effect of repealing what is specifically ordained in the city charter. It has been the
constant holding of this Court that repeals by duplication are not favored and will not be so declared unless it be
manifest that the legislature so intended. Such a doctrine goes as far back as United States v. Reyes, a 1908
decision.13 It is necessary then before such a repeal is deemed to exist that it be shown that the statutes or
statutory provisions deal with the same subject matter and that the latter be inconsistent with the former.14 There
must be a showing of repugnancy clear and convincing in character. The language used in the latter statute must
be such as to render it irreconcilable with what had been formerly enacted. An inconsistency that falls short of that
standard does not suffice. What is needed is a manifest indication of the legislative purpose to repeal. 15
More specifically, a subsequent statute, general in character as to its terms and application, is not to be construed
as repealing a special or specific enactment, unless the legislative purpose to do so is manifest. This is so even if
the provisions of the latter are sufficiently comprehensive to include what was set forth in the special act. This
principle has likewise been consistently applied in decisions of this Court from Manila Railroad Co. v.
Rafferty,16 decided as far back as 1919. A citation from an opinion of Justice Tuason is illuminating. Thus: "From
another angle the presumption against repeal is stronger. A special law is not regarded as having been amended
or repealed by a general law unless the intent to repeal or alter is manifest. Generalia specialibus non derogant.
And this is true although the terms of the general act are broad enough to include the matter in the special
statute. ... At any rate, in the event harmony between provisions of this type in the same law or in two laws is
impossible, the specific provision controls unless the statute, considered in its entirety, indicates a contrary
intention upon the part of the legislature. ... A general law is one which embraces a class of subjects or places and
does not omit any subject or place naturally belonging to such class while a special act is one which relates to
particular persons or things of a class. 17
WHEREFORE, the lower court decision of August 4, 1969 is affirmed. Without pronouncement as to costs.
Concepcion, C.J., Reyes, J.B.L., Makalintal, Zaldivar, Castro, Barredo, Villamor and Makasiar, JJ., concur.
Dizon and Teehankee, JJ., took no part.

19
Page
G.R. No. 108072 December 12, 1995
HON. JUAN M. HAGAD, in his capacity as Deputy Ombudsman for the Visayas, petitioner,
vs.
HON. MERCEDES GOZO-DADOLE, Presiding Judge, Branch XXVIII, Regional Trial Court, Mandaue City,
Mandaue City Mayor ALFREDO M. OUANO, Mandaue City Vice-Mayor PATERNO CAÑETE and Mandaue
City Sangguniang Panlungsod Member RAFAEL MAYOL, respondents.
VITUG, J.:
The determination of whether the Ombudsman under Republic Act ("R.A.") No. 6770,1 otherwise known as the
Ombudsman Act of 1989, has been divested of his authority to conduct administrative investigations over local
elective officials by virtue of the subsequent enactment of R.A. No. 7160,2 otherwise known as the Local
Government Code of 1991, is the pivotal issue before the Court in this petition.
The petition seeks (a) to annul the writ of preliminary injunction, dated 21 October 1992, issued against petitioner
by respondent trial court and (b) to prohibit said court from further proceeding with RTC Case No. MDE-14.3
Parenthetically, Deputy Ombudsman for the Visayas Arturo Mojica assumed the office of Juan Hagad, now
resigned,4 who took the initiative in instituting this special civil action for certiorari and prohibition.
The controversy stemmed from the filing of criminal and administrative complaints, on 22 July 1992, against herein
respondents Mayor Alfredo Ouano, Vice-Mayor Paterno Cañete and Sangguniang Panlungsod Member Rafael
Mayol, all public officials of Mandaue City, by Mandaue City Councilors Magno B. Dionson and Gaudiosa O.
Bercede with the Office of the Deputy Ombudsman for the Visayas. The respondents were charged with having
violated R.A. No. 3019, as amended,5 Articles 1706 and 1717 of the Revised Penal Code; and R.A. No.
6713.8 Councilors Dionson and Bercede averred that respondent officials, acting in conspiracy, had caused the
alteration and/or falsification of Ordinance No. 018/92 by increasing the allocated appropriation therein from
P3,494,364.57 to P7,000,000.00 without authority from the Sangguniang Panlungsod of Mandaue City. The
complaints were separately docketed as Criminal Case No. OMB-VIS-92-391 and as Administrative Case No.
OMB-VIS-ADM-92-015.
A day after the filing of the complaints, or on 23 July 1992, a sworn statement was executed by Mandaue City
Council Secretary, Atty. Amado C. Otarra, Jr., in support of the accusations against respondent officials. The next
day, petitioner ordered respondents, including Acting Mandaue City Treasurer Justo G. Ouano and Mandaue City
Budget Officer Pedro M. Guido, to file their counter-affidavits within ten (10) days from receipt of the order.
Forthwith, Councilors Dionson and Bercede moved for the preventive suspension of respondent officials in the
separately docketed administrative case.
Aside from opposing the motion for preventive suspension, respondent officials, on 05 August 1992, prayed for the
dismissal of the complaint on the ground that the Ombudsman supposedly was bereft of jurisdiction to try, hear and
decide the administrative case filed against them since, under Section 63 of the Local Government Code of 1991,
the power to investigate and impose administrative sanctions against said local officials, as well as to effect their
preventive suspension, had now been vested with the Office of the President.
In their opposition, filed on 10 August 1992, Dionson and Bercede argued that the Local Government Code of 1991
could not have repealed, abrogated or otherwise modified the pertinent provisions of the Constitution granting to
the Ombudsman the power to investigate cases against all public officials and that, in any case, the power of the
Ombudsman to investigate local officials under the Ombudsman Act had remained unaffected by the provisions of
the Local Government Code of 1991.
During the hearing on the motion for preventive suspension, the parties were directed by the Deputy Ombudsman
to file their respective memoranda.
In his memorandum, Mayor Ouano reiterated that, under Sections 61 and 63 of the Local Government Code of
1991, the Office of the President, not the Office of the Ombudsman, could lawfully take cognizance of
administrative complaints against any elective official of a province, a highly urbanized city or an independent
component city and to impose disciplinary sanctions, including preventive suspensions, and that there was nothing
in the provision of the Constitution giving to the Office of the Ombudsman superior powers than those of the
President over elective officials of local governments.
In an Order,9 dated 10 September 1992, the Office of the Deputy Ombudsman denied the motion to dismiss and
recommended the preventive suspension of respondent officials, except City Budget Officer Pedro M. Guido, until
the administrative case would have been finally resolved by the Ombudsman.10 Respondent officials were formally
placed under preventive suspension by the Deputy Ombudsman pursuant to an Order11 of 21 September 1992.
On 25 September 1992, a petition for prohibition, with prayer for a writ of preliminary injunction and temporary
restraining order, was filed by respondent officials with the Regional Trial Court of Mandaue City. Acting favorably
on the pleas of petitioning officials, respondent Judge issued, on even date, a restraining order directed at
petitioner, enjoining him ". . . from enforcing and/or implementing the questioned order of preventive suspension
issued in OMB-VIS-ADM-92-015."
Petitioner moved to dismiss the petition but it was to no avail. The court a quo, on 15 October 1992, denied the
motion to dismiss and issued an Order for the issuance of a writ of preliminary injunction, holding thusly:
So by following and applying the well-established rules of statutory construction that endeavor
should be made to harmonize the provisions of these two laws in order that each shall be effective,
it is the finding of this Court that since the investigatory power of the Ombudsman is so general,
broad and vague and gives wider discretion to disciplining authority to impose administrative
20
sanctions against a responsible public official or employee while that of Section 60 of the New
Local Government Code provides for more well defined and specific grounds upon which a local
Page
elective official can be subjected to administrative disciplinary action, that it Could be considered
that the latter law could be an exception to the authority and administrative power of the
Ombudsman to conduct an investigation against local elective officials and as such, the jurisdiction
now to conduct administrative investigation against local elective officials is already lodged before
the offices concerned under Section 61 of Republic Act No. 7160.
xxx xxx xxx
WHEREFORE, foregoing premises considered, Order is hereby issued:
1) Expanding the restraining order dated September 25, 1992 issued by the Court into an Order for
the issuance of a writ of preliminary injunction upon the posting of the petitioners of the bond in the
amount of Fifty thousand pesos (P50,000.00) conditioned that the latter will pay all the costs that
may be adjudged to the adverse party and/or damages which he may sustain by reason of the
injunction, if the Court will finally adjudge that the petitioners are not entitled thereto, and
2) Denying the respondent's Motion to Dismiss dated September 28, 1992 for lack of merit.
SO ORDERED. 12
A writ of preliminary injunction was issued on 21 October 1992.13 A motion for reconsideration made by petitioner
was denied by the trial court.
The instant recourse seeks the nullification of the order of 15 October 1992 and the writ of preliminary injunction of
21 October 1992 both issued by the trial court and prays that respondent judge be directed to desist from further
proceeding with RTC Case No. MDE-14.
There is merit in the petition.
The general investigatory power of the Ombudsman is decreed by Section 13 (1,) Article XI, of the 1987
Constitution,14 thus:
Sec. 13. The Office of the Ombudsman shall have the following powers, functions, and duties:
(1) Investigate on its own, or on complaint by any person, any act or omission of any public official,
employee, office or agency, when such act or omission appears to be illegal, unjust, improper, or
inefficient;
while his statutory mandate to act on administrative complaints is contained in Section 19 of R.A. No. 6770
that reads:
Sec. 19. Administrative complaints. — The Ombudsman shall act on all complaints relating, but not
limited, to acts or omissions which:
1. Are contrary to law or regulation;
2. Are unreasonable, unfair, oppressive or discriminatory;
3. Are inconsistent with the general course of an agency's functions, though in accordance with
law;
4. Proceed from a mistake of law or an arbitrary ascertainment of facts;
5. Are in the exercise of discretionary powers but for an improper purpose; or
6. Are otherwise irregular, immoral or devoid of
justification.
Section 21 of the same statute names the officials who could be subject to the disciplinary authority of the
Ombudsman, viz.:
Sec. 21. Officials Subject to Disciplinary Authority; Exceptions. — The Office of the Ombudsman
shall have disciplinary authority over all elective and appointive officials of the Government and its
subdivisions, instrumentalities and agencies, including Members of the Cabinet, local government,
government-owned or controlled corporations and their subsidiaries except over officials who may
be removed only by impeachment or over Members of Congress, and the Judiciary. (Emphasis
supplied)
Taken in conjunction with Section 24 of R.A. No. 6770, petitioner thus contends that the Office of the
Ombudsman correspondingly has the authority to decree preventive suspension on any public officer or
employee under investigation by it. Said section of the law 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 charges 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 the
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.
Respondent officials, upon the other hand, argue that the disciplinary authority of the Ombudsman over local
officials must be deemed to have been removed by the subsequent enactment of the Local Government Code of
1991 which vests the authority to investigate administrative charges, listed under Section 6015 thereof, on various
21
offices. In the case specifically of complaints against elective officials of provinces and highly urbanized cities, the
Code states:
Page
Sec. 61. Form and Filing of Administrative Complaints. — A verified complaint against any erring
local elective officials shall be prepared as follows:
(a) A complaint against any elective official of a province, a highly urbanized city, an independent
component city or component city shall be filed before the Office of the President.
Thus respondents insist, conformably with Section 63 of the Local Government Code, preventive
suspension can only be imposed by: ". . . the President if the respondent is an elective official of a
province, a highly urbanized or an independent component city; . . . " under sub-paragraph (b) thereof:
(b) Preventive suspension may be imposed at any time after the issues are joined, when the
evidence of guilt is strong, and given the gravity of the offense, there is great probability that the
continuance in office of the respondent could influence the witnesses or pose a threat to the safety
and integrity of the records and other evidence; Provided, That, any single preventive suspension
of local elective officials shall not extend beyond sixty (60) days: Provided, further, That in the
event that several administrative cases are filed against an elective official, he cannot be
preventively suspended for more than ninety (90) days within a single year on the same ground or
grounds existing and known at the time of the first suspension.
In his comment, which the Court required considering that any final resolution of the case would be a matter of
national concern, the Solicitor-General has viewed the Local Government Code of 1991 as having conferred, but
not on an exclusive basis, on the Office of the President (and the various Sanggunians) disciplinary authority over
local elective officials. He posits the stand that the Code did not withdraw the power of the Ombudsman theretofore
vested under R.A. 6770 conformably with a constitutional mandate. In passing, the Solicitor General has also
opined that the appropriate remedy that should have been pursued by respondent officials is a petition
for certiorari before this Court rather than their petition for prohibition filed with the Regional Trial Court.
Indeed, there is nothing in the Local Government Code to indicate that it has repealed, whether expressly or
impliedly, the pertinent provisions of the Ombudsman Act. The two statutes on the specific matter in question are
not so inconsistent, let alone irreconcilable, as to compel us to only uphold one and strike down the other . Well
settled is the rule that repeals of laws by implication are not favored,16 and that courts must generally assume their
congruent application.17 The two laws must be absolutely incompatible,18 and a clear finding thereof must surface,
before the inference of implied repeal may be drawn.19 The rule is expressed in the maxim, interpretare et
concordare legibus est optimus interpretendi, i.e., every statute must be so interpreted and brought into accord with
other laws as to form a uniform system of jurisprudence.20 The fundament is that the legislature should be
presumed to have known the existing laws on the subject and not to have enacted conflicting statutes.21 Hence, all
doubts must be resolved against any implied repeal,22 and all efforts should be exerted in order to harmonize and
give effect to all laws on the subject.23
Certainly, Congress would not have intended to do injustice to the very reason that underlies the creation of the
Ombudsman in the 1987 Constitution which "is to insulate said office from the long tentacles of officialdom."24
Quite interestingly, Sections 61 and 63 of the present Local Government Code run almost parallel with the
provisions then existing under the old code. Section 61 and Section 63 of the precursor local Government Code of
1983, 25 under the heading of "Suspension and Removal," read:
Sec. 61. Form and Filing of Complaints. — Verified complaints against local elective officials shall
be prepared as follows:
(a) Against any elective provincial or city official, before the Minister of Local Government.
Sec. 63. Preventive Suspension. — (1) Preventive suspension may be imposed by the Minister of
Local Government if the respondent is a provincial or city official, by the provincial governor if the
respondent is an elective municipal official, or by the city or municipal mayor if the respondent is an
elective barangay official.
(2) Preventive suspension may be imposed at any time after the issues are joined, when there is
reasonable ground to believe that the respondent has committed the act or acts complained of,
when the evidence of culpability is strong, when the gravity of the offense so warrants, or when the
continuance in office of the respondent could influence the witnesses or pose a threat to the safety
and integrity of the records and other evidence. In all cases, preventive suspension shall not
extend beyond sixty days after the start of said suspension.
(3) At the expiration of sixty days, the suspended official shall be deemed reinstated in office
without prejudice to the continuation of the proceedings against him until its termination. However,
if the delay in the proceedings of the case is due to his fault, neglect or request, the time of the
delay shall not be counted in computing the time of suspension.
The authority to conduct administrative investigation and to impose preventive suspension over elective
provincial or city officials was at that time entrusted to the Minister of Local Government until it became
concurrent with the Ombudsman upon the enactment of R.A. No. 6770, specifically under Sections 21 and
24 thereof, to the extent of the common grant. The Local Government Code of 1991 (R.A. No. 7160), in
fine, did not effect a change from what already prevailed, the modification being only in the substitution of
the Secretary (the Minister) of Local Government by the Office of the President.
Respondent local officials contend that the 6-month preventive suspension without pay under Section 24 of the
Ombudsman Act is much too repugnant to the 60-day preventive suspension provided by Section 63 of the Local
Government Code to even now maintain its application. The two provisions govern differently. In order to justify the
preventive suspension of a public official under Section 24 of R.A. No. 6770, the evidence of guilt should be strong,
and (a) the charge against the officer or employee should involve dishonesty, oppression or grave misconduct or
22
neglect in the performance of duty; (b) the charges should warrant removal from the service; or (c) the respondent's
continued stay in office would prejudice the case filed against him. The Ombudsman can impose the 6-month
Page
preventive suspension to all public officials, whether elective or appointive, who are under investigation. Upon the
other hand, in imposing the shorter period of sixty (60) days of preventive suspension prescribed in the Local
Government Code of 1991 on an elective local official (at any time after the issues are joined), it would be enough
that (a) there is reasonable ground to believe that the respondent has committed the act or acts complained of, (b)
the evidence of culpability is strong, (c) the gravity of the offense so warrants, or (d) the continuance in office of the
respondent could influence the witnesses or pose a threat to the safety and integrity of the records and other
evidence.
Respondent officials, nevertheless, claim that petitioner committed grave abuse of discretion when he caused the
issuance of the preventive suspension order without any hearing.
The contention is without merit. The records reveal that petitioner issued the order of preventive suspension after
the filing (a) by respondent officials of their opposition on the motion for preventive suspension and (b) by Mayor
Ouano of his memorandum in compliance with the directive of petitioner. Be that, as it may, we have heretofore
held that, not being in the nature of a penalty, a preventive suspension can be decreed on an official under
investigation after charges are brought and even before the charges are heard. Naturally, such
a preventive suspension would occur prior to any finding of guilt or innocence. In the early case of Nera
vs. Garcia,26 reiterated in subsequent cases,27 we have said:
In connection with the suspension of petitioner before he could file his answer to the administrative
complaint, suffice it to say that the suspension was not a punishment or penalty for the acts of
dishonesty and misconduct in office, but only as a preventive measure. 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. There is, therefore, nothing improper in suspending an
officer pending his investigation and before the charges against him are heard and be given an
opportunity to prove his innocence.
Moreover, respondent officials were, in point of fact, put on preventive suspension only after petitioner had found, in
consonance with our ruling in Buenaseda vs. Flavier,28 that the evidence of guilt was strong. Petitioner gave his
justification for the preventive suspension in this wise:
After a careful and honest scrutiny of the evidence submitted on record, at this stage, it is the
holding of this office that the evidence of guilt against the respondents in the instant case is strong.
There is no question that the charge against the respondents involves dishonesty or gross
misconduct which would warrant their removal from the service and there is no gainsaying the fact
that the charge for falsification of veritable documents like city ordinances are very serious charges
that affect the very foundations of duly established representative governments. Finally, it is
likewise the holding of this office at this stage that the continued stay in office of respondents may
prejudice the judicious investigation and resolution of the instant case.29
Finally, it does appear, as so pointed out by the Solicitor General, that respondent official's petition for prohibition,
being an application for remedy against the findings of petitioner contained in his 21 September 1992 order, should
not have been entertained by the trial court. The proscription in Section 14 of R.A. No. 6770 reads:
Sec. 14. Restrictions. — No writ of injunction shall be issued by any court to delay an investigation
being conducted by the Ombudsman under this Act, unless there is a prima facie evidence that the
subject matter of the investigation is outside the jurisdiction of the Office of the Ombudsman.
No court shall hear any appeal or application for remedy against the decision or findings of the
Ombudsman, except the Supreme Court, on pure question of law.
Likewise noteworthy is Section 27 of the law which prescribes a direct recourse to this Court on matters
involving orders arising from administrative disciplinary cases originating from the Office of the
Ombudsman; thus:
Sec. 27. Effectivity and Finality of Decisions. — . . .
In all administrative disciplinary cases, orders, directives, or decisions of the Office of the
Ombudsman may be appealed to the Supreme Court by filing a petition for certiorari within ten (10)
days from receipt of the written notice of the order, directive or decision or denial of the motion for
reconsideration in accordance with Rule 45 of the Rules of Court. (Emphasis supplied)
All told, petitioner is plainly entitled to the relief prayed for, and we must, accordingly; grant the petition.
WHEREFORE, the questioned writ of preliminary injunction of 21 October 1992 is ANNULLED and SET ASIDE,
and RTC Case No. MDE-14 is hereby ordered DISMISSED. No costs.
SO ORDERED.
Narvasa, C.J., Feliciano, Padilla, Regalado, Romero, Bellosillo, Melo, Puno, Kapunan, Mendoza, Francisco,
Hermosisima, Jr. and Panganiban, JJ., concur.
Davide, Jr., J., took no part.
23
Page
G.R. No. 214044, June 19, 2019
UNIVERSITY OF THE PHILIPPINES, PETITIONER, v. CITY TREASURER OF QUEZON CITY,
RESPONDENT.
DECISION
CARPIO, J.:
The Case
G.R. No. 214044 is a petition for certiorari and prohibition 1 filed by the University of the Philippines
(UP) against the City Treasurer of Quezon City (City Treasurer) seeking to annul the Statement of
Delinquency dated 27 May 2014 addressed to UP as well as the Final Notice of Delinquency dated 11
July 2014 which required UP to pay real property tax on a parcel of land covered by TCT No. RT-
107350 (192689), which is currently leased to Ayala Land, Inc. (ALI). The petition also seeks to
enjoin the City Treasurer, or any of his agents or representatives, from proceeding with the sale of
the subject land at a public auction pursuant to the 11 July 2014 Final Notice of Delinquency.
The Facts
In their submitted pleadings before this Court, both UP and the City Treasurer admitted that UP is
the registered owner of a parcel of land covered by TCT No. RT-107350 (192689). UP entered into a
contract of lease with ALI over the subject land on 27 October 2006.2
UP further narrated in its petition:

xxxx
5. UP is the registered owner of a parcel of land covered by and more particularly described in TCT
No. RT-107530 (192689) of the Registry of Deeds of Quezon City, with an area of 985,597 square
meters and located along Commonwealth Avenue, Diliman, Quezon City.
6. On 27 October 2006, UP entered into a Contract of Lease with Development Obligations with

[ALI] over a portion of the aforementioned parcel of land containing an area of 380,630 square
meters. The leased property is now known as the UP-Ayala Technohub.
7. In a Notice of Assessment addressed to ALI dated 23 August 2012, ALI was informed that the
subject property has been "reclassified and assessed for taxation purposes with an assessed value of
P499,500,000.00 effective 2009."
8. In a letter to UP President Pascual dated 22 August 2012, the City Assessor of Quezon City
informed UP that the aforementioned Notice of Assessment was served upon ALI as the entity liable
for the real property tax on the subject property pursuant to Section 205(d) and Section 234(a) of
the Local Government Code.
9. In a Statement of Delinquency dated 05 December 2012, addressed to the UP North Property

Holdings, Inc., the [City Treasurer] demanded the payment of real property tax on the subject
property amounting to P78,970,950.00 for the years 2009-2011 and the first three quarters of
2012.
10. In another letter to UP President Pascual dated 09 September 2013, the City Assessor of Quezon
City furnished UP a copy of the letter of the Bureau of Local Government Finance (BLGF) of the
Department of Finance [(DOF)] dated 01 August 2013, which opined that ALI is the party legally
accountable for the real property taxes on the subject property. It was further stated that the City
Assessor's Office "will be sending the official Notice of Assessment and the corresponding Tax
Declaration for the subject property under the name of [ALI]. . ."
11. In another Statement of Delinquency dated 24 September 2013, addressed to the UP North

Property Holdings, Inc., the [City Treasurer] again demanded the payment of real property tax on
the subject property in the updated amount of P102,747,150.00 for the years 2009-2012 and the
first three quarters of 2013.
12. For the first time and without a prior Notice of Assessment, a Statement of Delinquency dated
27 May 2014 addressed to UP was issued by the [City Treasurer] demanding the payment of real
property tax on the subject property amounting to P106,992,990.00 for the years 2009 to 2013 and
the first quarter of 2014.
13. In his letter to the City Treasurer of Quezon City dated 13 June 2014, UP President Pascual
requested the postponement of any proceeding related to the aforementioned Statement of
Delinquency. He explained -
24
We respectfully take exception to the Statement of Delinquency dated 27 May 2014 and the alleged
delinquency of the University with respect to the payment of the real estate taxes. The University of
Page
the Philippines, as the National University, has been granted tax exemptions under Republic Act No.
9500, otherwise known as the University of the Philippines Charter of 2008, that are express, patent
and unambiguous. The grant is exceedingly extensive that it provided the University the exemption
from all taxes and duties vis-a-vis all revenues and assets used for educational purposes or in
support thereof.
Moreover, in the letter of the Bureau of Local Government Finance ("BLGF") dated 01 August 2013,
addressed to the Hon. City Mayor, Herbert M. Bautista, the BLGF opined on the issue as to which
party shall be accountable for the unpaid real estate taxes due on the thirty-seven (37) hectares of
land owned by the University and being leased out to [ALI], the same property which is the subject
of the Statement of Delinquency dated 27 May 2014. The BLGF concluded that "[ALI], being the
lessee, is the legally accountable party to the unpaid real property taxes on the government-owned
UP Property." The foregoing opinion of the BLGF confirms that the University is exempt from real
estate taxes, an absolute right that the University enjoys under R.A. No. 9500.
14. On 22 July 2014, UP received the Final Notice of Delinquency dated 11 July 2014 from the Office
of the City Treasurer demanding the payment of real property tax on the subject property in the
updated amount of P117,182,700.00 for the years 2009-2013 and the first three quarters of 2014. 3
UP filed the present case before this Court within 60 days from receipt of the 11 July 2014 Final
Notice of Delinquency.4
On 29 September 2014, we issued a Resolution5 which required the City Treasurer to file a

Comment. We also issued a Temporary Restraining Order to enjoin the City Treasurer, his agents or
representatives, from enforcing the Final Notice of Delinquency dated 11 July 2014 and proceeding
with the sale of subject land at a public auction scheduled on 20 November 2014.
On 20 July 2015, we issued a Resolution6 requiring the City Treasurer to show cause why he/she
should not be disciplinarily dealt with or held in contempt for failure to file comment before the
period expired on 12 October 2014.
On 7 March 2016, we issued a Resolution 7 imposing upon the City Treasurer a fine of P1,000.00 for
failure to file comment, and required compliance within ten days from notice. On 20 July 2016, we
issued a Resolution8 imposing upon the City Treasurer an increased fine of P2,000.00 for failure to
file comment, and required compliance within ten days from notice.
On 18 August 2016, we received an Urgent Motion for Extension of Time with Manifestation 9 from
Ms. Ruby Rosa G. Guevarra (Ms. Guevarra), Acting Assistant City Treasurer of Quezon City. She
alleged and manifested:
xxxx
2. That as early on [sic] April 15, 2016, herein respondent through its City Treasurer, Ms. Basilia S.
Pacis and to date, through its Acting Assistant City Treasurer, sought for the legal assistance of Atty.
Christian B. Valencia, City Legal Officer of the Local Government Unit, Quezon City, to prepare and
file Comment to the instant Petition for Certiorari and Prohibition, as may be evidenced by the
Indorsement dated August 11, 2016 and Indorsement dated August 15, 2016 true copies of them
are hereto attached as Annexes "1" and "2" and made parts hereof[;]
To date, August 18, 2016, there was no prepared Comment by the City Legal Officer to be filed in
the Honorable Court;
3. That to date, the undersigned, Ms. Ruby Rosa G. Guevarra is in [sic] the Acting Assistant City
Treasurer of the Local Government Unit, Quezon City, as the City Treasurer, Ms. Basilia S. Pacis
retired [from] said position as Treasurer;
4. That to date, the undersigned, Ms. Ruby Rosa G. Guevarra is looking for a counsel to help her in
the preparation and filing of a Comment to the Petition for Certiorari and Prohibition;
5. That the amount of Two Thousand (P2,000) Pesos, as fine for the non-filing of the Comment was
paid, but the said payment shall be considered payment under protest, as the undersigned is
unjustifiably failed [sic], refused and ignored to be legally assisted by the City Legal Officer of the
Local Government Unit, Quezon City, for [sic] the preparation and filing the said required
Comment[.]10
On 29 September 2016, Ms. Guevarra, as Officer in Charge of the City Treasurer's Office, filed her
Comment11 which reads:
1. That the relief prayed for in the instant Petition for Certiorari and Prohibition is the same
allegation specifically stated in its body, that:
to annul the Statement of Delinquency dated 27 May 2014 and the Final Notice of Delinquency dated
11 July 2014.
WITH ALL DUE RESPECT, not within the province of the Honorable Court to adjudicate. Truth to tell,
25
there must be [a] full-blown trial to be conducted by a trial court for the determination of the true
facts whether to annul the said Statement of Delinquency dated 27 May 2014 and the Final Notice of
Page
Delinquency dated 11 July 2014. But, time and again, it is ruled that the Honorable Court is not a
trier of facts.
In APQ Shipmanagement [sic] Co., LTD, versus Casenas, 725 SCRA 108, the Honorable Court
reminded us:
The Supreme Court is not a trier of facts and, thus, its jurisdiction is limited only to reviewing errors
of law.
2. That the respondent is not the real party-in-interest in the instant Petition for Certiorari and
Prohibition[.]
3. That the petitioner failed to file the Motion for Reconsideration, when it admitted the receipt of·
the assailed Notice of Statement of Delinquency dated May 27,2014 and the Final Notice of
Delinquency dated July 11, 2014.
Thus, petitioner filed the Instant Petition without filing the appropriate motion to give the
respondent the opportunity to correct its alleged error.
In Lanier versus People. 719 SCRA 477, the Honorable Court held: Well-established is the rule that a
motion for reconsideration is a condition sine qua non for the filing of a petition for certiorari.
xxxx
[7.] Most importantly, petitioner is not exempted from paying real property tax for its real property
leased to [ALI] pursuant to the mandate of Section 205(d) and Section 234(a) of Republic Act No.
7160, otherwise known as "The Local Government Code of 1991[.]"
Admittedly, on October 27, 2006, petitioner entered into the Contract of Lease with [ALI], subject
matter of which is petitioner's parcel of land covered by Transfer Certificate of Title No. RT-107350
(192689), now allegedly owned by UP North Property Holdings, Inc. Said leased [sic] of the real
property belonging to the petitioner failed to pay the real property tax from 2009-2013 and the first
three quarters of 2014.
In City of Pasig versus Republic, 656 SCRA 271, the Honorable Court unswervingly ruled:
Where the parcels of land owned by the Republic are not properties of public dominion, portions of
the properties leased to taxable entities are not only subject to real estate tax, they can also be sold
at public auction to satisfy the tax delinquency.
Moreover, respondent merely followed the legal basis of the Department of Finance, that:
ALI (Ayala Land Inc.) is the party legally accountable for the real property taxes on the subject
property.
[ALI] was duly notified of the subject Statement of Delinquency and other similar notices. 12
On 28 November 2016, we issued a Resolution13 that, among others, noted Ms. Guevarra's
Comment, and required UP to file a reply. UP, through the OSG, filed its Reply14 on 20 February
2017, where it addressed Ms. Guevarra's questions regarding the propriety of the remedy and the
taxability of UP based on Republic Act No. 950015 and on Section 133(o)16 of the Local Government
Code.
The Issue
Petitioner UP raised only one issue before this Court:

WHETHER PETITIONER UNIVERSITY OF THE PHILIPPINES IS LIABLE FOR REAL PROPERTY TAX
IMPOSED ON THE SUBJECT PROPERTY LEASED TO AYALA LAND, INC.17
The Court's Ruling
We grant the petition.
This Court has the power to decide the present case. Findings of fact are not necessary as the
present petition asks to determine whether UP, as a chartered academic institution with specific
legislated tax exemptions, is legally liable for the real property tax on the land leased to ALI. This
issue is a pure question of law, not of fact.
The property subject of this case refers only to the parcel of land covered by TCT No. RT-107350
(192689). The improvements on this parcel of land that were introduced by ALI are not covered by
the present case.
Timeline of Events and Applicable Laws
The Contract of Lease (with Development Obligations) between UP and ALI was executed on 27
October 2006. The 4th Whereas Clause of the Contract described the project proposal, thus:
26
WHEREAS, in response to the LESSOR's aforementioned invitation, Ayala Land, Inc., in September
Page
2005, submitted to the LESSOR a Development Proposal entitled "DEVELOPMENT PROPOSAL FOR UP
NORTH SCIENCE & TECHNOLOGY PARK," dated August 1, 2005, and subsequently, presented to the
then UP Board of Regents such proposal which is embodied in a presentation manual, entitled
"DEVELOPMENT PROPOSAL FOR UP NORTH SCIENCE & TECHNOLOGY PARK," dated September
2005, both attached hereto and marked as Annexes "E" and "E-1," respectively (the "Development
Proposals"), signifying therein its interest in leasing and developing the UP North S&T Park and
proposing to lease and develop the UP North S&T Park Phase I according to its proposals, into a
prestigious and dynamic science and technology park, where research and technology-based
collaborative projects between technology and the academe thrive, thereby becoming a catalyst for
the development of the information technology and information technology enabled services;18
The Contract provided that ALI owns the improvements on the leased land:
3.2 PERMANENT IMPROVEMENTS; LESSOR TO BECOME OWNER OF PERMANENT IMPROVEMENTS AT
END OF LEASE
xxxx
(c) Before the termination, expiration, or cancellation of this Contract prior to the lapse of the
original Lease Term, all renovations, alterations, and improvements and the Permanent
Improvements constructed during the original Lease Term shall be owned by, and shall be for the
account of the LESSEE; x x x.19
As to real property taxes, the contract between UP and ALI stated:
12.2 REAL ESTATE TAXES ON LAND
Should real estate taxes be levied on the LEASED PREMISES, the LESSOR shall assume the payment
of the real estate taxes on the land, while the LESSEE shall assume the payment of real property
taxes on the improvements introduced on the LEASED PREMISES. 20
On 29 April 2008, Republic Act No. 9500, or the UP Charter of 2008, was signed into law. Republic
Act No. 9500 addressed UP's real property and income derived therefrom in Sections 22 and 25(a).
These sections read:
SEC. 22. Land Grants and Other Real Properties of the University. -
(a) The State shall support the University of the Philippines System as the national university in the
form of lump sum amount, through general appropriations and other financial benefits, and in kind,
through land grants and donations and use of other real properties. To carry out the intent of these
grants, income derived from the development of all land grants and real properties shall be used to
further the end of the national university, as may be decided by the board;
xxxx
(c) The Board may plan, design, approve and/or cause the implementation of land leases: Provided,
That such mechanisms and arrangements shall sustain and protect the environment in accordance
with law, and be exclusive of the academic core zone of the campuses of the University of the
Philippines: Provided, further, That such mechanisms and arrangements shall not conflict with the
academic mission of the national university;
(d) The Board may allow the use of the income coming from real properties of the national
university as security for transactions to generate additional revenues when needed for educational
purposes;
xxxx
SEC. 25. Tax Exemptions. - The provisions of any general or special law to the contrary
notwithstanding:
(a) All revenues and assets of the University of the Philippines used for educational purposes or in
support thereof shall be exempt from all taxes and duties;
x x x x (Emphasis supplied)
A letter,21 dated 22 August 2012 and addressed to the UP President from Mr. Rodolfo M. Ordanes,
Officer In Charge, City Assessor (City Assessor), informed UP of the City Assessor's service of a
Notice of Assessment to ALI This Notice of Assessment had Sections 205 and 234 of the Local
Government Code as its bases. On 23 August 2012, the City Assessor issued a Notice of
Assessment22 to ALI. The notice stated that the land subject of the lease agreement with UP was
reclassified and assessed for taxation purposes with an assessed value of P499,500,000.00 effective
2009. The pertinent provisions of Sections 205 and 234 read:
Section 205. Listing of Real Property in the Assessment Rolls. -
xxxx
27
(d) Real property owned by the Republic of the Philippines, its instrumentalities and political
Page
subdivisions, the beneficial use of which has been granted, for consideration or otherwise, to a
taxable person, shall be listed, valued and assessed in the name of the possessor, grantee or of the
public entity if such property has been acquired or held for resale or lease.
Section 234. Exemptions from Real Property Tax. - The following are exempted from payment of the
real property tax:
(a) Real property owned by the Republic of the Philippines or any of its political subdivisions except
when the beneficial use thereof has been granted, for consideration or otherwise, to a taxable
person;
xxxx
Except as provided herein, any exemption from payment of real property tax previously granted to,
or presently enjoyed by, all persons, whether natural or juridical, including all government-owned or
controlled corporations are hereby withdrawn upon the effectivity of this Code.
The Local Government Code took effect on 1 January 1992.
On 5 December 2012, the City Treasurer issued a Statement of Delinquency 23 to UP North Property
Holdings, Inc. for the period 2009 to 2011 and the first three quarters of 2012 in the total amount of
P78,970,950.00. The total amount included the tax due and penalty.
Mr. Salvador M. Castillo, Officer-In-Charge, Executive Director of Bureau of Local Government

Finance, Department of Finance (BLGF-DOF), sent a letter24 dated 1 August 2013 to Quezon City
Mayor Herbert M. Bautista (Mayor Bautista). This letter also referred to Sections 205 and 234 of the
Local Government Code as bases to conclude that ALI, as the lessee, is the legally accountable party
for the unpaid real property taxes due covering the "government-owned UP property." 25 The 1
August 2013 letter from BLGF DOF to Mayor Bautista also stated:
Evidently, real property owned by the Republic of the Philippines are exempt from payment of the
real property tax. However, if the beneficial use thereof has been granted for consideration or
otherwise to a taxable person, the subject real property shall: (1) be listed, valued and assessed in
the name of the beneficial user; and (2) becomes taxable.
It is also worthy to note that as soon as the notice of assessment is served and received by the
taxpayer, an obligation to pay the amount assessed and demanded arises (BLGF Memorandum
Circular No. 04-2008, January 7, 2008)[.]
As to the argument that as stipulated in the Lease Contract entered into by and between UP and
Ayala Land Inc. that UP shall shoulder the real property taxes due on the subject property, please be
informed of the Supreme Court Decision under G.R. No. 171586, dated July 15, 2009 (National
Power Corporation vs. Province of Quezon and Municipality of Pagbilao), which is quoted in part,
below:
xxx
Lastly, from the points of view of essential fairness and the integrity of our tax system, we find it
essentially wrong to allow the NPC to assume in its BOT contracts the liability of the other
contracting party for taxes that the government can impose on that other party, and at the same
time allow NPC to turn around and say that no taxes should be collected because the NPC is tax-
exempt as a government-owned and controlled corporation. We cannot be a party to this kind of
arrangement; for us to allow it without congressional authority is to intrude into the realm of policy
and to debase the tax system that the Legislature established. We will then also be grossly unfair to
the people of the Province of Quezon and the Municipality of Pagbilao who, by law, stand to benefit
from the tax provisions of the LGC.
xxx
Further, attention is likewise invited to the pertinent portion of another SC Decision (G.R. No. L-
29772), in the case of the City of Baguio vs. Fernando S. Busuego, viz:
. . . when the GSIS sold the property and imposed said condition, the agency although exempt from
the payment of taxes clearly indicated that the property became taxable upon its delivery to the
purchaser and that the sole determinative factor for exemption from realty taxes is the 'use'
to which the property is devoted. And where the 'use' is the test, the ownership is
immaterial. (Martin on the Rev. Adm. Code, 1961, Vol. II, p. 487, citing Apostolic Prefect of Mt.
Province vs. Treasurer of Baguio City, 71 Phil. 547). In the instant case, although the property was
still in the name of the GSIS pending the payment of the full price, its use and possession was
already transferred to the defendant.' Such contractual stipulation that the purchaser on installment
pay the real estate taxes pending completion of payments, although the seller who retained title is
exempt from such taxes, is valid and binding, absent any law to the contrary and none has been
cited by appellant. x x x.
Similarly, therefore, we also deemed it essentially wrong being without congressional authority for
28
UP to assume the real property tax liability of the Ayala Land, Inc. over the subject
property. Hence, we opine that the Ayala Land, Inc., being the lessee, is the legally
Page
accountable party to the unpaid real property taxes due on the government-owned UP
property.26 (Underscoring, boldfacing and italicization in the original)
On 24 September 2013, the City Treasurer issued a Statement of Delinquency 27 to UP North
Property Holdings, Inc. The City Treasurer demanded payment of real property tax on the subject
land in the amount of P102,747,150.00 for the years 2009 to 2012 and the first three quarters of
2013.
On 27 May 2014, the City Treasurer issued a Notice of Delinquency 28 to UP for the years 2009 to
2013 and the first quarter of 2014 in the total amount of P106,992,900.00. The total amount
included the tax due and penalty. This was the first time that the City Treasurer demanded payment
from UP of real property tax on the subject land. The City Treasurer sent the Notice of Delinquency
to UP without any prior issuance of a Notice of Assessment.
On 13 June 2014, then UP President Alfredo E. Pascual (UP President Pascual) wrote then City
Treasurer Edgar T. Villanueva (City Treasurer Villanueva) to address the Statement of Delinquency
dated 27 May 2014. The pertinent portions of the letter read:
We write in connection with the Statement of Delinquency dated 27 May 2014 issued by your office,
which the University received on 3 June 2014. In the Statement of Delinquency, the University was
required to pay the real estate taxes on its property/ies, specifically on Tax Declaration E-128-
00051, for the period from 2009 to the 1st quarter of 2014, which was noted to be in the total
amount of Php106,992,900.00, including penalties. The University was given a period often (10)
days from receipt of the Statement of Delinquency, or until 13 June 2014, to pay the said real estate
taxes.
We respectfully take exception to the Statement of Delinquency dated 27 May 2014 and the alleged
delinquency of the University with respect to the payment of real estate taxes. The University of the
Philippines, as the National University, has been granted tax exemptions under Republic Act No.
9500, otherwise known as the University of the Philippines Charter of 2008, that are express,
patent, and unambiguous. The grant is exceedingly extensive that it provided the University
exemption from all taxes and duties vis-a-vis all its revenues and assets used for educational
purposes or in support thereof.
Moreover, in the letter of the Bureau of Local Government Finance ("BLGF") dated 1 August 2013,
addressed to the Hon. City Mayor, Herbert M. Bautista, the BLGF opined on the issue as to which
party shall be held accountable for the unpaid real estate taxes due on the thirty-seven (37)
hectares of land owned by the University and being leased out to Ayala Land, Inc., the same
property which is [the] subject of the Statement of Delinquency dated 27 May 2014. The BLGF
concluded that "Ayala Land, Inc., being the lessee, is the legally accountable party to the unpaid real
property taxes due on the government-owned UP property." The foregoing opinion of the BLGF
confirms that the University is exempt from real estate taxes, an absolute right that the University
enjoys under [Republic Act] No. 9500.
Finally, while maintaining the position that the University is exempt from real estate taxes, we wish
to point out that the University was not furnished any Notice of Assessment prior to the issuance of
the Statement of Delinquency dated 27 May 2014.29
On 11 July 2014, the City Treasurer issued a Final Notice of Delinquency 30 to UP for the years 2009
to 2013 and the first three quarters of 2014 in the total amount of P117,182,700.00. The total
amount also included the tax due and penalty.
We reiterate that UP is a chartered academic institution with specific legislated tax exemptions.
These tax exemptions come from the Local Government Code, as well as from its legislative charter,
Republic Act No. 9500.
Tax Exemption from the Local Government Code
One source of UP's exemption from tax comes from its character as a government instrumentality.
Section 133(o) of the Local Government Code states that, unless otherwise provided by the Code,
the exercise of taxing powers of the local government units shall not extend to levy of taxes, fees or
charges of any kind on government instrumentalities.31
However, a combined reading of Sections 205 and 234 of the Local Government Code, previously
quoted above, also provides for removal of the exemption to government instrumentalities when
beneficial use of a real property owned by a government instrumentality is granted to a taxable
person. Stated differently, when beneficial use of a real property owned by a government
instrumentality is granted to a taxable person, then the taxable person is not exempted from paying
real property tax on such property. This is the doctrine used by the City Assessor and the City
Treasurer in the present set of facts. The City Assessor and the City Treasurer concluded that ALI is
liable for the real property tax on the land that it leased from UP.
Republic Act No. 9500, however, gave a specific tax exemption to UP which covers the land subject
of the present case. The City Assessor and the City Treasurer overlooked this specific exemption
29
awarded to UP by Republic Act No. 9500. The legislative authority given to UP by Republic Act No.
9500 is the point where the present case differs from our ruling in National Power Corporation v.
Page
Province of Quezon (NPC case)32 which the BLGF-DOF cited in its letter addressed to Mayor Bautista.
Tax Exemption from Republic Act No. 9500
It is clear from the timeline above that the date of effectivity of UP's legislative charter lies between
the date of effectivity of the lease contract between UP and ALI and the dates of issuance of the
Statement of Delinquency and Final Notice of Delinquency from the City Treasurer. Republic Act No.
9500, which took effect in 2008, was not yet enacted when UP and ALI entered into their lease
contract in 2006. However, Republic Act No. 9500 was already operative when the City Treasurer
issued the Statement of Delinquency and Final Notice of Delinquency to UP in 2014. Republic Act No.
9500 was also operative when the City Assessor issued a Notice of Assessment to ALI in 2012, a
Statement of Delinquency to UP North Property Holdings, Inc. in 2012, and a Statement of
Delinquency to UP North Property Holdings, Inc. in 2013.
The enactment and passage of Republic Act No. 9500 in 2008 superseded Sections 205(d) and
234(a) of the Local Government Code. Before the passage of Republic Act No. 9500, there was a
need to determine who had beneficial use of UP's property before the property may be subjected to
real property tax. After the passage of Republic Act No. 9500, there is a need to determine whether
UP's property is used for educational purposes or m support thereof before the property may be
subjected to real property tax.
In University of the Phils. v. Judge Dizon,33 we stated:

The UP was founded on June 18, 1908 through Act 1870 to provide advanced instruction in
literature, philosophy, the sciences, and arts, and to give professional and technical training to
deserving students. Despite its establishment as a body corporate, the UP remains to be a
"chartered institution" performing a legitimate government function. It is an institution of higher
learning, not a corporation established for profit and declaring any dividends. In enacting Republic
Act No. 9500 (The University of the Philippines Charter of 2008), Congress has declared the UP as
the national university "dedicated to the search for truth and knowledge as well as the development
of future leaders."
Irrefragably, the UP is a government instrumentality, performing the State's constitutional mandate

of promoting quality and accessible education. As a government instrumentality, the UP administers
special funds sourced from the fees and income enumerated under Act No. 1870 and Section 1 of
Executive Order No. 714, and from the yearly appropriations, to achieve the purposes laid down by
Section 2 of Act 1870, as expanded in Republic Act No. 9500. All the funds going into the possession
of the UP, including any interest accruing from the deposit of such funds in any banking institution,
constitute a "special trust fund," the disbursement of which should always be aligned with the UP's
mission and purpose, and should always be subject to auditing by the COA.34 (Citations omitted)
In the present set of facts, both parties agree that UP owns the land subject of this case.
Section 22 of Republic Act No. 9500, previously quoted above, allows UP to lease and develop its
land subject to certain conditions. The Contract of Lease between UP and ALI shows that there is an
intent to develop "a prestigious and dynamic science and technology park, where research and
technology-based collaborative projects between technology and the academe thrive, thereby
becoming a catalyst for the development of the information technology and information technology-
enabled service."35 The development of the subject land is clearly for an educational purpose, or at
the very least, in support of an educational purpose.
UP President Pascual pointed out to City Treasurer Villanueva that Republic Act No. 9500 granted
extensive tax exemptions to UP. More specifically, Section 25(a) of Republic Act No. 9500,
previously quoted above, provided that all of UP's "revenues and assets used for educational
purposes or in support thereof shall be exempt from all taxes and duties." Republic Act No.
9500 bases UP's tax exemption upon compliance with the condition that UP's revenues and assets
must be used for educational purposes or in support thereof. There is no longer any need to
determine the tax status of the possessor or of the beneficial user to further ascertain whether UP's
revenue or asset is exempt from tax.
Apart from the rule in statutory construction that a law that is enacted later prevails over a law that
is enacted earlier because it is the latest expression of legislative will, 36 Sections 27 and 30 of
Republic Act No. 9500 provide for rules of construction in favor of Republic Act No. 9500:
SEC. 27. Rules of Construction.- No statutory or other issuances shall diminish the powers, rights,
privileges and benefits accorded to the national university under this Act or enjoyed at present, by it
under other issuances not otherwise modified or repealed under this Act, unless subsequent
legislation expressly provides for their repeal, amendment or modification. Any case of doubt in the
interpretation of any of the provisions of this Charter shall be resolved in favor of the academic
freedom and fiscal autonomy of the University of the Philippines.
SEC. 30. Repealing Clause. - Act No. 1870, as amended, and all laws, decrees, orders, rules, and
30
regulations or other issuances or parts inconsistent with the provisions of this Act are hereby
repealed or modified accordingly.
Page
Non-Applicability of the NPC Case
The facts of the present case are not on all fours with the facts in the NPC case. In the NPC case,
the NPC assumed in its build-operate-transfer (BOT) contract with Mirant Pagbilao Corporation
(Mirant) ''all real estate taxes and assessments, rates and other charges in respect of the site, the
buildings and improvements thereon and the [power plant]." 37 The Municipality of Pagbilao, Quezon
assessed Mirant's tax liabilities and furnished the NPC with a copy of the assessment letter. The NPC
filed a petition before the Local Board of Assessment Appeals and objected to the assessment
against Mirant. The NPC claimed tax exemptions or at least a reassessment for lower tax liability due
to depreciation allowance and lower assessment level. The Local Board of Assessment Appeals, the
Central Board of Assessment Appeals, and the Court of Tax Appeals all ruled against the NPC.
We ruled in the NPC case that the NPC has no right to protest the assessment on Mirant because the
NPC is neither the owner nor the possessor or user of the subject machineries. Under the law, Mirant
is liable for the said taxes based on its "ownership, use, and possession of the plant and its
machineries."38 We further stated in the NPC case that the contractual stipulation between NPC and
Mirant is entirely between them, and "does not bind third persons who are not privy to the contract
x x x."39 Only Mirant can demand compliance from the NPC for the payment of the said taxes, and
the Municipality of Pagbilao and the Province of Quezon cannot demand payment from the NPC.
Neither can these local government units be compelled to recognize the NPC's protest of the
assessment.
We declared in the NPC case that it is "essentially wrong to allow the NPC to assume in its BOT
contracts the liability of the other contracting party for taxes that the government can impose on
that other party, and at the same time allow NPC to turn around and say that no taxes should be
collected because the NPC is tax-exempt as a government-owned and controlled corporation." This
was the situation set up by UP with ALI in 2008, before the passage of Republic Act No. 9500.
Before the passage of Republic Act No. 9500, it was essentially wrong for UP to assume in its lease
contract with ALI the liability of ALI for real property taxes based on its beneficial use of the land,
and then turn around and tell the City Treasurer that UP is exempt from paying taxes on the land
because it is a government instrumentality.
We also declared in the NPC case that if we continue to allow what NPC did to the Province of
Quezon without congressional authority, we "intrude into the realm of policy and to debase the tax
system that the Legislature established." The passage of Republic Act No. 9500 in 2008 obliterated
what was essentially wrong in the lease contract between UP and ALI The legislature established a
tax system that allows UP to validly claim exemption from real property taxes on the land leased to
ALI. Republic Act No. 9500 is UP's congressional authority for this particular exemption from real
property tax. Thus, when the City Treasurer addressed to UP the Statement of Delinquency dated 27
May 2014 and the Final Notice of Delinquency dated 11 July 2014 and required UP to pay real
property tax on the subject land, UP was already authorized by the legislature to validly claim
exemption from real property taxes on the land leased to ALI.
Considering that the subject land and the revenue derived from the lease thereof are used by UP for
educational purposes and in support of its educational purposes, UP should not be assessed, and
should not be made liable for real property tax on the land subject of this case. Under Republic Act
No. 9500, this tax exemption, however, applies only to "assets of the University of the Philippines,"
referring to assets owned by UP. Under the Contract of Lease between UP and ALI, all improvement
on the leased land "shall be owned by, and shall be for the account of the LESSEE [ALI]" during the
term of the lease. The improvements are not "assets" owned by UP; and thus, UP's tax exemption
under Republic Act No. 9500 does not extend to these improvements during the term of the lease.
WHEREFORE, the petition is GRANTED. We DECLARE the University of the

Philippines EXEMPT from real property tax imposed by the City Treasurer of Quezon City on the
parcel of land covered by TCT No. RT-107350 (192689), which is currently leased to Ayala Land,
Inc. Accordingly, we declare VOID the Statement of Delinquency dated 27 May 2014 as well as the
Final Notice of Delinquency dated 11 July 2014 issued by the City Treasurer of Quezon City to the
University of the Philippines in connection with the parcel of land covered by TCT No. RT-107350
(192689). Furthermore, the City Treasurer of Quezon City is permanently restrained from levying on
or selling at public auction the parcel of land covered by TCT No. RT-107350 (192689) to satisfy the
payment of the real property tax delinquency.
SO ORDERED.
Perlas-Bernabe, Caguioa, J. Reyes, Jr., and Lazaro-Javier, JJ., concur.

31
Page
G.R. No. L-26551 February 27, 1976
THE PEOPLE OF THE PHILIPPINES, plaintiff-appellant,
vs.
WENCESLAO ALMUETE FERNANDO FRONDA, FAUSTO DURION and CIPRIANO FRONDA, defendants-
appellees.
Solicitor General Antonio P. Barredo, Assistant Solicitor General Antonio G. Ibarra and Solicitor Vicente A.
Torres for appellant.
Emiliano D. Castellanes for appellees.
AQUINO, J.:
Wenceslao Almuete Fernando Fronda, Cipriano Fronda and Fausto Durion were charged with a violation of section
39 of the Agricultural Tenancy Law. It was alleged in the information that in December, 1963, in Muñoz, Nueva
Ecija the accused being tenants of Margarita Fernando in her riceland, without notice to her or without her consent,
pre-threshed a portion of their respective harvests of five (5) cavans of palay each to her damage in the amount of
P187.50 at P12.50 a cavan (Criminal Case No. SD-179, Court of First Instance of Nueva Ecija, Sto. Domingo
Branch VI).
Upon arraignment the accused pleaded not guilty. They filed motion for a bill of particulars as to the exact date of
the commission of the offense charged. The lower court denied their motion because they had already entered their
plea.
Thereafter, they -filed a motion to quash the information on that grounds (1) that it does not allege facts sufficient to
constitute the crime charged; (2) that there is no law punishing it, and (3) that the court has, no jurisdiction over the
alleged time The fiscal opposed the motion.
The lower court granted the motion and dismissed the information in its order of August 11, 1966. It held that the
information is basically deficient because it does not describe t lie circumstances under which the cavans of palay
were found in the possession of the accused tenants; it does not specify the date agreed upon for the threshing of
the harvests, and it does not allege that the palay found in the tenants' possession exceeded ten percent of their
net share based on the last normal harvest.
The prosecution appealed from the order of dismissal. The Solicitor General argues in his brief that the information
in this case alleges all the elements of the offense defined in section 39 of Republic Act No. 1199, as amended of
Republic Act No. 2263. Sections 39 and 57 of the same law reads as follows:
SEC. 39. Prohibition on Pre-threshing. — It shall be unlawful for either the tenant or landholder, without mutual
consent, to reap or thresh a portion of the crop at any time previous to the date set for its threshing- That if the
tenant n food for his family and the landholder does not or cannot furnish such and refuses to allow the tenant to
reap or thresh a portion of the crop previous to the date set for its threshing, the tenant can reap or thresh not more
than ten percent of his net share in the last normal harvest after giving notice thereof to the landholder or his
representative. Any violation of this situation by either party shall be treated and penalized in accordance with this
Act and/or under the general provisions of law applicable to that act committed.
SEC. 57. Penal Provision. — Violation of the provisions of ... sections thirty-nine and forty-nine of this Act shall be
punished by a fine not exceeding two thousand pesos or imprisonment not exceeding one year, or both, in the
discretion of the Court. ... *
We hold that the order of dismissal should be affirmed because as held in People vs. Adillo, L-23M, November 27,
1975, a case similar to the instant case, section 99 was impliedly repealed by the Agricultural Land Reform Code of
1963, as amended by Republic Act No. 6389 168 O.G. 915) and as implemented by Presidential Decrees Nos. 2,
27 and 316. That Code was already in force when the act complained of was committed. The repeal may be
rationalized in this manner:
The prohibition against pre-reaping or pre-threshing found in section 39 of the Agricultural Tenancy Law of 1954 is
premised on the existence of the rice share tenancy system. The evident purpose is to prevent the tenant and the
landholder from defrauding each other in the division of the harvests.
The Agricultural Land Reform Code superseded the Agricultural Tenancy Law (except as qualified in sections 4
and 35 of the Code). The Code instituted the leasehold system and abolished share tenancy subject to certain
conditions indicated in section 4 thereof. It is significant that section 39 is not reproduced in the Agricultural Land
Reform Code whose section 172 repeals "all laws or part of any law inconsistent with" its provisions.
Under the leasehold system the prohibition against pre-threshing has no, more raison d'etre because the lessee is
obligated to pay a fixed rental as prescribed in section 34 of the Agricultural Land Reform Code, or the Code of
Agrarian Reforms, as redesignated in Republic Act No. 6389 which took effect on September 10, 1971. Thus, the
legal maxim, cessante ratione legis, cessat ipsa lex (the reason for the law ceasing, the law itself also ceases).
applies to this case.
Section 4 of the Code of Agrarian Reforms declared agricultural share tenancy throughout the country as contrary
to public policy and automatically converted it to agricultural leasehold. Presidential Decree No. 2 proclaimed the
entire country "as a land reform area". Presidential Decree No. 27 emancipated the tenant from the bondage of the
soil. And Presidential Decree No. 316 interdicted the ejectment or removal of the tenant-farmer from his
farmholding until the promulgation of the rules and regulations implementing Presidential Decree No. 27. (See
People vs. Adillo, supra).
The legislative intent not to punish anymore the tenant's act of pre- reaping and pre-threshing without notice to the
32
landlord is inferable from the fact that, as already noted, the Code of Agrarian Reforms did not reenact section 39
of the Agricultural Tenancy Law and that it abolished share tenancy which is the basis for penalizing clandestine
Page
pre-reaping and pre-threshing.

All indications point to a deliberate and manifest legislative design to replace the Agricultural Tenancy Law with the
Code of Agrarian Reforms, formerly the Agricultural Land Reform Code, at least as far as ricelands are concerned.
As held in the Adillo case, the act of pre-reaping and pre-threshing without notice to the landlord, which is an
offense under the Agricultural Tenancy Law, had ceased to be an offense under the subsequent law, the Code of
Agrarian Reforms. To prosecute it as an offense when the Code of Agrarian Reforms is already in force would be
repugnant or abhorrent to the policy and spirit of that Code and would subvert the manifest legislative intent not to
punish anymore pre-reaping and pre-threshing without notice to landholder.
It is a rule of legal hermeneutics that "an act which purports to set out in full all that it intends to contain operates as
a repeal of anything omitted which was contain in the old act and not included in the amendatory act" (Crawford,
Construction of Statutes, p. 621 cited in the Adillo case).
A subsequent statute, revising the whole subject matter of a former statute, and evidently intended as a substitute
for it, operates to repeal the former statute" (82 C.J.S. 499). 'The revising statute is in effect a 'legislative
declaration that whatever is embraced in the new statute shall prevail, and whatever is excluded therefrom shall be
discarded" (82 C.J.S. 500).
The repeal of appeal law deprives the courts of jurisdiction to punish persons charged with a violation of the old
penal law prior to its repeal (People vs. Tamayo, 61 Phil. 225; People vs. Sindiong and Pastor, 77 Phil. 1000;
People vs. Binuya, 61 Phil. 208; U.S. vs. Reyes, 10 Phil. 423; U.S. vs. Academia, 10 Phil. 431. See dissent in
Lagrimas vs. Director of Prisons, 57 Phil. 247, 252, 254).
WHEREFORE, the order of dismissal is affirmed with costs de oficio.
SO ORDERED.
Fernando (Chairman), Antonio, Concepcion, Jr. and Martin, JJ., concur.
Barredo, J., took no part.
Martin, J., was designated to sit in the Second Division.
33
Page
G.R. No. 127116 April 8, 1997
ALEX L. DAVID, in his own behalf as Barangay Chairman of Barangay 77, Zone 7, Kalookan City and as
President of the LIGA NG MGA BARANGAY SA PILIPINAS, petitioner,
vs.
COMMISSION ON ELECTIONS, Department of Interior and Local Government, and THE HONORABLE
SECRETARY, Department of Budget and Management, respondents.
G.R. No. 128039 April 8, 1997
LIGA NG MGA BARANGAY QUEZON CITY CHAPTER, Represented by BONIFACIO M. RILLON, petitioner,
vs.
COMMISSION ON ELECTIONS and DEPARTMENT OF BUDGET AND MANAGEMENT, respondents.
PANGANIBAN, J.:
The two petitions before us raise a common question: How long is the term of office of barangay chairmen and
other barangay officials who were elected to their respective offices on the second Monday of May 1994? Is it three
years, as provided by RA 7160 (the Local Government Code) or five years, as contained in RA 6679? Contending
that their term is five years, petitioners ask this Court to order the cancellation of the scheduled barangay election
this coming May 12, 1997 and to reset it to the second Monday of May, 1999.
The Antecedents
G.R. No. 127116
In his capacity as barangay chairman of Barangay 77, Zone 7, Kalookan City and as president of the Liga ng mga
Barangay sa Pilipinas, Petitioner Alex L. David filed on December 2, 1996 a petition for prohibition docketed in this
Court as G.R. No. 127116, under Rule 65 of the Rules of Court, to prohibit the holding of the barangay election
scheduled on the second Monday of May 1997. On January 14, 1997, the Court resolved to require the
respondents to comment on the petition within a non-extendible period of fifteen days ending on January 29, 1997.
On January 29, 1997, the Solicitor General filed his four-page Comment siding with petitioner and praying that "the
election scheduled on May 12, 1997 be held in abeyance." Respondent Commission on Elections filed a separate
Comment, dated February 1, 1997 opposing the petition. On February 11, 1997, the Court issued a Resolution
giving due course to the petition and requiring the parties to file simultaneous memoranda within a non-extendible
period of twenty days from notice. It also requested former Senator Aquilino Q. Pimentel, Jr.1 to act as amicus
curiae and to file a memorandum also within a non-extendible period of twenty days. It noted but did not grant
petitioner's Urgent Motion for Issuance of Temporary Restraining Order and/or Writ of Preliminary Injunction dated
January 31, 1997 (as well as his Urgent Ex-Parte Second Motion to the same effect, dated March 6, 1997).
Accordingly, the parties filed their respective memoranda. The Petition for Leave to Intervene filed on March 17,
1997 by Punong Barangay Rodson F. Mayor was denied as it would just unduly delay the resolution of the case,
his interest like those of all other barangay officials being already adequately represented by Petitioner David who
filed this petition as "president of the Liga ng mga Barangay sa Pilipinas."
G.R. No. 128039
On February 20, 1997, Petitioner Liga ng mga Barangay Quezon City Chapter represented by its president
Bonifacio M. Rillon filed a petition, docketed as G.R. No. 128039, "to seek a judicial review by certiorari to declare
as unconstitutional:
1. Section 43(c) of R.A. 7160 which reads as follows:
(c) The term of office of barangay officials and members of the sangguniang kabataan shall be for
three (3) years, which shall begin after the regular election of barangay officials on the second
Monday of May 1994.
2. COMELEC Resolution Nos. 2880 and 2887 fixing the date of the holding of the barangay
elections on May 12, 1997 and other activities related thereto;
3. The budgetary appropriation of P400 million contained in Republic Act No. 8250 otherwise
known as the General Appropriations Act of 1997 intended to defray the costs and expenses in
holding the 1997 barangay elections:2
Comelec Resolution 2880,3 promulgated on December 27, 1996 and referred to above, adopted a "Calendar of
Activities and List and Periods of Certain Prohibited Acts for the May 12, 1997 Barangay Elections." On the other
hand, Comelec Resolution 2887 promulgated on February 5, 1997 moved certain dates fixed in Resolution 2880.4
Acting on the petition, the Court on February 25, 1997 required respondents to submit their comment thereon within
a non-extendible period of ten days ending on March 7, 1997. The Court further resolved to consolidate the two
cases inasmuch as they raised basically the same issue. Respondent Commission filed its Comment on March 6,
19975 and the Solicitor General, in representation of the other respondent, filed his on March 6, 1997. Petitioner's
Urgent Omnibus Motion for oral argument and temporary restraining order was noted but not granted. The petition
was deemed submitted for resolution by the Court without need of memoranda.
The Issues
Both petitions though worded differently raise the same ultimate issue: How long is the term of office of barangay
officials?
Petitioners6 contend that under Sec. 2 of Republic Act No. 6653, approved on May 6, 1988, "(t)he term of office of
barangay officials shall be for five (5) years . . ." This is reiterated in Republic Act No. 6679, approved on November
34
4, 1988, which reset the barangay elections from "the second Monday of November 1988" to March 28, 1989 and
provided in Sec. 1 thereof that such five-year term shall begin on the "first day of May 1989 and ending on the
Page
thirty-first day of May 1994." Petitioners further aver7 that although Sec. 43 of RA 7160 reduced the term of office of
all local elective officials to three years, such reduction does not apply to barangay officials because (1) RA 6679 is
a special law applicable only to barangays while RA 7160 is a general law which applies to all other local
government units; (2) RA 7160 does not expressly or impliedly repeal RA 6679 insofar as the term of barangay
officials is concerned; (3) while Sec. 8 of Article X of the 1987 constitution fixes the term of elective local officials at
three years, the same provision states that the term of barangay officials "shall be determined by law"; and (4) thus,
it follows that the constitutional intention is to grant barangay officials any term, except three years; otherwise,
"there would be no rhyme or reason for the framers of the Constitution to except barangay officials from the three
year term found in Sec. 8 (of) Article X of the Constitution." Petitioners conclude (1) that the Commission on
Elections committed grave abuse of discretion when it promulgated Resolution Nos. 2880 and 2887 because it
"substituted its own will for that of the legislative and usurped the judicial function . . . by interpreting the conflicting
provisions of Sec. 1 of RA 6679 and Sec. 43 (c) of RA 7160; and (2) that the appropriation of P400 million in the
General Appropriation Act of 1997 (RA 8250) to be used in the conduct of the barangay elections on May 12, 1997
is itself unconstitutional and a waste of public funds.
The Solicitor General agrees with petitioners, arguing that RA 6679 was not repealed by RA 7160 and thus "he
believes that the holding of the barangay elections (o)n the second Monday of May 1997 is without sufficient legal
basis."
Respondent Commission on Elections, through Chairman Bernardo P. Pardo, defends its assailed Resolutions and
maintains that the repealing clause of RA 7160 includes "all laws, whether general or special, inconsistent, with the
provisions of the Local Government Code," citing this Court's dictum in Paras vs. Comelec8 that "the next regular
election involving the barangay office is barely seven (7) months away, the same having been scheduled in May
1997." Furthermore, RA 8250 (the General Appropriations Act for 1997) and RA 8189 (providing for a general
registration of voters) both "indicate that Congress considered that the barangay elections shall take place in May,
1997, as provided for in RA 7160, Sec. 43 (c)."9 Besides, petitioners cannot claim a term of more than three years
since they were elected under the aegis of the Local Government Code of 1991 which prescribes a term of only
three years. Finally, Respondent Comelec denies the charge of grave abuse of discretion stating that the "question
presented . . . is a purely legal one involving no exercise of an act without or in excess of jurisdiction or with grave
abuse of discretion." 10
As amicus curiae, former Senator Aquilino Q. Pimentel, Jr. urges the Court to deny the petitions because (1) the
Local Autonomy Code repealed both RA 6679 and 6653 "not only by implication but by design as well"; (2) the
legislative intent is to shorten the term of barangay officials to three years; (3) the barangay officials should not
have a term longer than that of their administrative superiors, the city and municipal mayors; and (4) barangay
officials are estopped from contesting the applicability of the three-year term provided by the Local Government
Code as they were elected under the provisions of said Code.
From the foregoing discussions of the parties, the Court believes that the issues can be condensed into; three, as
follows:
1. Which law governs the term of office of barangay official: RA 7160 or RA 6679?
2. Is RA 7160 insofar as it shortened such term to only three years constitutional?
3. Are petitioners estopped from claiming a term other than that provided under RA 7160?.
The Court's Ruling
The petitions are devoid of merit.
Brief Historical Background
of Barangay Elections
For a clear understanding of the issues, it is necessary to delve briefly into the history of barangay elections.
An a unit of government, the barangay antedated the Spanish conquest of the Philippines The word "barangay" is
derived from the Malay "balangay," a boat which transported them (the Malays) to these shores. 11 Quoting from
Juan de Plasencia, a Franciscan missionary in 1577, Historian Conrado Benitez 12 wrote that the barangay was
ruled by a dato who exercised absolute powers of government. While the Spaniards kept the barangay as the basic
structure of government, they stripped the dato or rajah, of his powers. 13 Instead, power was centralized nationally
in the governor general and locally in the encomiendero and later, in the alcalde mayor and the gobernadorcillo.
The dato or rajah was much later renamed cabeza de barangay, who was elected by the local citizens possessing
property. The position degenerated from a title of honor to that of a "mere government employee. Only the poor
who needed a salary, no matter how low, accepted the post." 14
After the Americans colonized the Philippines, the barangays became known as "barrios." 15 For some time, the
laws governing barrio governments were found in the Revised Administrative Code of 1916 and later in the Revised
Administrative Code of 1917. 16 Barrios were granted autonomy by the original Barrio Charter, RA 2370, and
formally recognized as quasi-municipal corporations 17 by the Revised Barrio Charter, RA 3590. During the martial
law regime, barrios were "declared" or renamed "barangays" — a reversion really to their pre-Spanish names — by
PD. No. 86 and PD No. 557. Their basic organization and functions under RA 3590, which was expressly "adopted
as the Barangay Charter, were retained. However, the titles of the officials were changed to "barangay captain,"
"barangay councilman," "barangay secretary" and "barangay treasurer."
Pursuant to Sec. 6 of Batas Pambansa Big. 222, 18 "a Punong Barangay (Barangay Captain) and six Kagawads ng
Sangguniang Barangay (Barangay Councilmen), who shall constitute the presiding officer and members of the
Sangguniang Barangay (Barangay Council) respectively" were first elected on May 17, 1982. They had a term of
six years which began on June 7, 1982.
The Local Government Code of 1983 19 also fixed the term of office of local elective officials at six years. 20 Under
this Code, the chief officials of the barangay were the punong barangay, six elective sangguniang barangay
35
members, the kabataang barangay chairman, a barangay secretary and a barangay treasurer. 21 B.P. Blg. 881, the
Omnibus Election Code, 22 reiterated that barangay officials "shall hold office, for six years," and stated that their
Page
election was to be held "on the second Monday of May nineteen hundred and eighty eight and on the same day
every six years thereafter." 23
This election scheduled by B.P. Blg. 881 on the second Monday of May 1988 was reset to "the second Monday of
November 1988 and every five years thereafter 24 by RA 6653. Under this law, the term of office of the barangay
officials was cut to five years 25 and the punong barangay was to be chosen from among themselves by seven
kagawads, who in turn were to be elected at large by the barangay electorate. 26
But the election date set by RA 6653 on the second Monday of November 1988 was again "postponed and reset to
March 28, 1989" by RA 6679, 27 and the term of office of barangay officials was to begin on May 1, 1989 and to end
on May 31, 1994. RA 6679 further provided that "there shall be held a regular election of barangay officials on the
second Monday of May 1994 and on the same day every five (5) years thereafter Their term shall be for five years .
. . " 28 Significantly, the manner of election of the punong barangay was changed. Sec. 5 of said law ordained that
while the seven kagawads were to be elected by the registered voters of the barangay, "(t)he candidate who
obtains the highest number of votes shall be the punong barangay and in the event of a tie, there shall be a
drawing of lots under the supervision of the Commission on Elections."
Under the Local Government Code of 1991, RA 7160, 29 several provisions concerning barangay official were
introduced:
(1) The term of office was reduced to three years, as follows:
Sec. 43. Term of Office. —
xxx xxx xxx
(c) The term of office of barangay officials and members of the sangguniang kabataan shall be for
three (3) years, which shall begin after the regular election of barangay officials on the second
Monday of May, 1994 (Emphasis supplied.)
(2) The composition of the Sangguniang Barangay and the manner of electing its officials were altered, inter alia,
the barangay chairman was to be elected directly by the electorate, as follows:
Sec. 387. Chief Officials and Offices. — (a) There shall be in each barangay a punong barangay,
seven (7) sanggunian barangay members, the sanggunian kabataan chairman, a barangay
secretary and a barangay treasurer.
xxx xxx xxx
Sec. 390. Composition. — The Sangguniang barangay, the legislative body of the barangay, shall
be composed of the punong barangay as presiding officer, and the seven (7) regular sangguniang
barangay members elected at large and the sangguniang kabataan chairman as members.
Sec. 41. Manner of Election. — (a) The . . . punong barangay shall be elected at large . . . by the
qualified voters in the barangay. (Emphasis supplied.)
Pursuant to the foregoing mandates of the Local Autonomy Code, the qualified barangay voters actually voted for
one punong barangay and seven (7) kagawads during the barangay elections held on May 9, 1994. In other words,
the punong barangay was elected directly and separately by the electorate, and not by the seven (7) kagawads
from among themselves.
The First Issue: Clear Legislative Intent
and Design to Limit Term to Three Years
In light of the foregoing brief historical background, the intent and design of the legislature to limit the term of
barangay officials to only three (3) years as provided under the Local Government Code emerges as bright as the
sunlight. The cardinal rule in the interpretation of all laws is to ascertain and give effect to the intent of the
law. 30 And three years is the obvious intent.
First. RA 7160, the Local Government Code, was enacted later than RA 6679. It is basic that in case of an
irreconciliable conflict between two laws of different vintages, the later enactment prevails. 31 Legis posteriores
priores contrarias abrogant. The rationale is simple: a later law repeals an earlier one because it is the later
legislative will. It is to be presumed that the lawmakers knew the older law and intended to change it. In enacting
the older law, the legislators could not have known the newer one and hence could not have intended to change
what they did not know. Under the Civil Code, laws are repealed only by subsequent ones 32 — and not the other
way around.
Under Sec. 43-c of RA 7160, the term of office of barangay officials was fixed at "three (3) years which shall begin
after the regular election of barangay officials on the second Monday of May 1994." This provision is clearly
inconsistent with and repugnant to Sec. 1 of RA 6679 which states that such "term shall be for five years." Note that
both laws refer to the same officials who were elected "on the second Monday of May 1994."
Second. RA 6679 requires the barangay voters to elect seven kagawads and the candidate obtaining the highest
number of votes shall automatically be the punong barangay. RA 6653 empowers the seven elected barangay
kagawads to select the punong barangay from among themselves. On the other hand, the Local Autonomy Code
mandates a direct vote on the barangay chairman by the entire barangay electorate, separately from the seven
kagawads. Hence, under the Code, voters elect eight barangay officials, namely, the punong barangay plus the
seven kagawads. Under both RA 6679 and 6653, they vote for only seven kagawads, and not for the barangay
chairman.
Third. During the barangay elections held on May 9, 1994 (second Monday), the voters actually and directly elected
one punong barangay and seven kagawads. If we agree with the thesis of petitioners, it follows that all the punong
barangays were elected illegally and thus, Petitioner Alex David cannot claim to be a validly elected barangay
36
chairman, much less president of the national league, of barangays which he purports to represent in this petition. It
then necessarily follows also that he is not the real party-in-interest and on that ground, his petition should be
Page
summarily dismissed.
Fourth. In enacting the general appropriations act of 1997, 33 Congress appropriated the amount of P400 million to
cover expenses for the holding of barangay elections this year. Likewise, under Sec. 7 of RA 8189, Congress
ordained that a general registration of voters shall be held "immediately after the barangay elections in 1997."
These are clear and express contemporaneous statements of Congress that barangay officials shall be elected this
May, in accordance with Sec. 43-c of RA 7160.
Fifth. In Paras vs. Comelec, 34 this Court said that "the next regular election involving the barangay office
concerned is barely seven (7) months away, the same having been scheduled in May, 1997." This judicial decision,
per Article 8 of the Civil Code, is now a "part of the legal system of the Philippines."
Sixth. Petitioners pompously claim that RA 6679, being a special law, should prevail over RA 7160, all alleged
general law pursuant to the doctrine of generaila specialibus non derogant. Petitioners are wrong. RA. 7160 is a
codified set of laws that specifically applies to local government units. It specifically and definitively provides in its
Sec. 43-c that "the term of office of barangay officials . . . shall be for three years." It is a special provision that
applies only to the term of barangay officials who were elected on the second Monday of May 1994. With such
particularity, the provision cannot be deemed a general law. Petitioner may be correct in alleging that RA 6679 is a
special law, but they are incorrect in stating (without however giving the reasons therefor) that RA 7160 is
necessarily a general law. 35 It is a special law insofar as it governs the term of office of barangay officials. In its
repealing clause, 36 RA 7160 states that "all general and special laws . . . which are inconsistent with any of the
provisions of this Code are hereby repealed or modified accordingly." There being a clear repugnance and
incompatibility between the two specific provisions, they cannot stand together. The later law, RA 7160, should thus
prevail in accordance with its repealing clause. When a subsequent law encompasses entirely the subject matter of
the former enactments, the latter is deemed repealed. 37
The Second Issue: Three-Year Term
Not Repugnant, to Constitution
Sec. 8, Article X of the Constitution states:
Sec. 8. The term of office of elective local officials, except barangay officials, which shall be
determined by law, shall be three years, and no such official shall serve for more than three
consecutive terms. Voluntary renunciation of the office for any length of time shall not be
considered as an interruption in the continuity of his service for the full term for which he was
elected.
Petetioner Liga ng mga Barangay Quezon City Chapter posits that by excepting barangay officials whose "term
shall be determined by law" from the general provision fixing the term of "elective local officials" at three years, the
Constitution thereby impliedly prohibits Congress from legislating a three year term for such officers. We find this
theory rather novel but nonetheless logically and legally flawed.
Undoubtedly, the Constitution did not expressly prohibit Congress from fixing any term of office for barangay
officials. It merely left the determination of such term to the lawmaking body, without any specific limitation or
prohibition, thereby leaving to the lawmakers full discretion to fix such term in accordance with the exigencies of
public service. It must be remembered that every law has in its favor the presumption of constitutionality. 38 For a
law to be nullified, it must be shown that there is a clear and unequivocal (not just implied) breach of the
Constitution. 39 To strike down a law as unconstitutional, there must be a clear and unequivocal showing that what
the fundamental law prohibits, the statute permits. 40 The petitioners have miserably failed to discharge this burden
and to show clearly the unconstitutionality they aver.
There is absolutely no doubt in our mind that Sec. 43-c of RA 7160 is constitutional. Sec. 8, Article X of the
Constitution — limiting the term of all elective local officials to three years, except that of barangay officials which
"shall be determined by law" — was an amendment proposed by Constitutional Commissioner (now Supreme
Court Justice) Hilario G. Davide, Jr. According to Fr. Joaquin G. Bernas, S.J., the amendment was "readily
accepted without much discussion and formally approved." Indeed, a search into the Record of the Constitutional
Commission yielded only a few pages 41 of actual deliberations, the portions pertinent to the Constitutional
Commission's intent being the following:
MR. NOLLEDO. One clarificatory question, Madam President. What will be the term of the office of
barangay officials as provided for?
MR. DAVIDE. As may be determined by law..
MR. NOLLEDO. As provided for in the Local Government Code?
MR. DAVIDE. Yes.
xxx xxx xxx
THE PRESIDENT. Is there any other comment? Is there any objection to this proposed new
section as submitted by Commissioner Davide and accepted by the Committee?
MR. RODRIGO. Madam President, does this prohibition to serve for more than three consecutive
terms apply to barangay officials?
MR. DAVIDE. Madam President, the voting that we had on the terms of office did not include the
barangay officials because it was then the stand of the Chairman of the Committee on Local
Governments that the term of barangay officials must be determined by law. So it is now for the
law to determine whether the restriction on the number of reelections will be included in the Local
Government Code.
MR. RODRIGO. So that is up to Congress to decide.
37
MR. DAVIDE. Yes.

MR. RODRIGO. I just wanted that clear in the record.
Page
Although the discussions in the Constitutional Commission were very brief, they nonetheless provide the exact
answer to the main issue. To the question at issue here on how long the term of barangay officials is, the answer of
the Commission was simple, clear and quick: "As may be determined by law"; more precisely, "(a)s provided for in
the Local Autonomy Code." And the Local Autonomy Code, in its Sec. 43-c, limits their term to three years.
The Third Issue: Petitioners Estopped From
Challenging Their Three-Year Terms
We have already shown that constitutionally, statutorily, logically, historically and commonsensically, the petitions
are completely devoid of merit. And we could have ended our Decision right here. But there is one last point why
petitioners have no moral ascendancy for their dubious claim to a longer term of office: the equities of their own
petition militate against them. As pointed out by Amicus Curiae Pimentel, 42 petitioners are barred by estoppel from
pursuing their petitions.
Respondent Commission on Elections submitted as Annex "A" of its memorandum, 43 a machine copy of the
certificate of candidacy of Petitioner Alex L. David in the May 9, 1994 barangay elections, the authenticity of which
was not denied by said petitioner. In said certificate of candidacy, he expressly stated under oath that he was
announcing his "candidacy for the office of punong barangay for Barangay 77, Zone 7" of Kalookan City and that
he was "eligible for said office." The Comelec also submitted as Annex "B" 44 to its said memorandum, a certified
statement of the votes obtained by the candidates in said elections, thus:
BARANGAY 77
CERTIFIED LIST OF CANDIDATES
VOTES OBTAINED
May 9, 1994 BARANGAY ELECTIONS
PUNONG BARANGAY VOTES OBTAINED
1. DAVID, ALEX L. 112
KAGAWAD
1. Magalona, Ruben 150
2. Quinto, Nelson L. 130
3. Ramon, Dolores Z. 120
4. Dela Pena, Roberto T. 115
5. Castillo, Luciana 114
6. Lorico, Amy A. 107
7. Valencia, Arnold 102
8. Ang, Jose 97
9. Dequilla, Teresita D. 58
10. Primavera, Marcelina 52
If, as claimed by petitioners, the applicable law is RA 6679, then (1) Petitioner David should not have run and could
not have been elected chairman of his barangay because under RA 6679, there was to be no direct election for the
punong barangay; the kagawad candidate who obtained the highest number of votes was to be automatically
elected barangay chairman; (2) thus, applying said law, the punong barangay should have been Ruben Magalona,
who obtained the highest number of votes among the kagawads — 150, which was much more than David's 112;
(3) the electorate should have elected only seven kagawads and not one punong barangay plus seven kagawads.
In other words, following petitioners' own theory, the election of Petitioner David as well as all the barangay
chairmen of the two Liga petitioners was illegal.
The sum total of these absurdities in petitioners' theory is that barangay officials are estopped from asking for any
term other than that which they ran for and were elected to, under the law governing thie very claim to such offices:
namely, RA 7160, the Local Government Code. Petitioners' belated claim of ignorance as to what law governed
their election to office in 1994 is unacceptable because under Art. 3 of the Civil Code, "(i)gnorance of the law
excuses no one from compliance therewith."
Epilogue
It is obvious that these two petitions must fail. The Constitution and the laws do not support them. Extant
jurisprudence militates against them. Reason and common sense reject them. Equity and morality abhor them.
They are subtle but nonetheless self-serving propositions to lengthen governance without a mandate from the
governed. In a democracy, elected leaders can legally and morally justify their reign only by obtaining the voluntary
consent of the electorate. In this case however, petitioners propose to extend their terms not by seeking the
people's vote but by faulty legal argumentation This Court cannot and will not grant its imprimatur to such
untenable proposition. If they want to continue serving, they must get a new mandate in the elections scheduled on
May 12, 1997.
WHEREFORE, the petitions are DENIED for being completely devoid of merit.
SO ORDERED.
Narvasa, C.J., Padilla, Regalado, Davide, Jr., Romero, Bellosillo, Melo, Puno, Kapunan, Mendoza, Francisco and
Torres, Jr., JJ., concur.
Vitug, J., reserves his vote.
Hermosisima, Jr., J., is on leave.
38
Page
G.R. Nos. 120865-71 December 7, 1995
LAGUNA LAKE DEVELOPMENT AUTHORITY, petitioner,
vs.
COURT OF APPEALS; HON. JUDGE HERCULANO TECH, PRESIDING JUDGE, BRANCH 70, REGIONAL
TRIAL COURT OF BINANGONAN RIZAL; FLEET DEVELOPMENT, INC. and CARLITO ARROYO; THE
MUNICIPALITY OF BINANGONAN and/or MAYOR ISIDRO B. PACIS, respondents.
vs.
COURT OF APPEALS; HON. JUDGE AURELIO C. TRAMPE, PRESIDING JUDGE, BRANCH 163, REGIONAL
TRIAL COURT OF PASIG; MANILA MARINE LIFE BUSINESS RESOURCES, INC. represented by, MR.
TOBIAS REYNALD M. TIANGCO; MUNICIPALITY OF TAGUIG, METRO MANILA and/or MAYOR RICARDO D.
PAPA, JR., respondents.
vs.
COURT OF APPEALS; HON. JUDGE ALEJANDRO A. MARQUEZ, PRESIDING JUDGE, BRANCH 79,
REGIONAL TRIAL COURT OF MORONG, RIZAL; GREENFIELD VENTURES INDUSTRIAL DEVELOPMENT
CORPORATION and R. J. ORION DEVELOPMENT CORPORATION; MUNICIPALITY OF JALA-JALA and/or
MAYOR WALFREDO M. DE LA VEGA, respondents.
vs.
COURT OF APPEALS; HON. JUDGE MANUEL S. PADOLINA, PRESIDING JUDGE, BRANCH 162, REGIONAL
TRIAL COURT OF PASIG, METRO MANILA; IRMA FISHING & TRADING CORP.; ARTM FISHING CORP.; BDR
CORPORATION, MIRT CORPORATION and TRIM CORPORATION; MUNICIPALITY OF BINANGONAN and/or
MAYOR ISIDRO B. PACIS, respondents.
vs.
COURT OF APPEALS; HON. JUDGE ARTURO A. MARAVE, PRESIDING JUDGE, BRANCH 78, REGIONAL
TRIAL COURT OF MORONG, RIZAL; BLUE LAGOON FISHING CORP. and ALCRIS CHICKEN GROWERS,
INC.; MUNICIPALITY OF JALA-JALA and/or MAYOR WALFREDO M. DE LA VEGA, respondents.
vs.
COURT OF APPEALS; HON. JUDGE ARTURO A. MARAVE, PRESIDING JUDGE, BRANCH 78, REGIONAL
TRIAL COURT OF MORONG, RIZAL; AGP FISH VENTURES, INC., represented by its PRESIDENT ALFONSO
PUYAT; MUNICIPALITY OF JALA-JALA and/or MAYOR WALFREDO M. DE LA VEGA, respondents.
vs.
COURT OF APPEALS; HON. JUDGE EUGENIO S. LABITORIA, PRESIDING JUDGE, BRANCH 161,
REGIONAL TRIAL COURT OF PASIG, METRO MANILA; SEA MAR TRADING CO. INC.; EASTERN LAGOON
FISHING CORP.; MINAMAR FISHING CORP.; MUNICIPALITY OF BINANGONAN and/or MAYOR ISIDRO B.
PACIS, respondents.
HERMOSISIMA, JR., J.:
It is difficult for a man, scavenging on the garbage dump created by affluence and profligate consumption and
extravagance of the rich or fishing in the murky waters of the Pasig River and the Laguna Lake or making a
clearing in the forest so that he can produce food for his family, to understand why protecting birds, fish, and trees
is more important than protecting him and keeping his family alive.
How do we strike a balance between environmental protection, on the one hand, and the individual personal
interests of people, on the other?
Towards environmental protection and ecology, navigational safety, and sustainable development, Republic Act
No. 4850 created the "Laguna Lake Development Authority." This Government Agency is supposed to carry out
and effectuate the aforesaid declared policy, so as to accelerate the development and balanced growth of the
Laguna Lake area and the surrounding provinces, cities and towns, in the act clearly named, within the context of
the national and regional plans and policies for social and economic development.
Presidential Decree No. 813 of former President Ferdinand E. Marcos amended certain sections of Republic Act
No. 4850 because of the concern for the rapid expansion of Metropolitan Manila, the suburbs and the lakeshore
towns of Laguna de Bay, combined with current and prospective uses of the lake for municipal-industrial water
supply, irrigation, fisheries, and the like. Concern on the part of the Government and the general public over: — the
environment impact of development on the water quality and ecology of the lake and its related river systems; the
inflow of polluted water from the Pasig River, industrial, domestic and agricultural wastes from developed areas
around the lake; the increasing urbanization which induced the deterioration of the lake, since water quality studies
have shown that the lake will deteriorate further if steps are not taken to check the same; and the floods in
Metropolitan Manila area and the lakeshore towns which will influence the hydraulic system of Laguna de Bay,
since any scheme of controlling the floods will necessarily involve the lake and its river systems, — likewise gave
impetus to the creation of the Authority.
Section 1 of Republic Act No. 4850 was amended to read as follows:
Sec. 1. Declaration of Policy. It is hereby declared to be the national policy to promote, and
39
accelerate the development and balanced growth of the Laguna Lake area and the surrounding
provinces, cities and towns hereinafter referred to as the region, within the context of the national
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and regional plans and policies for social and economic development and to carry out the
development of the Laguna Lake region with due regard and adequate provisions for
environmental management and control, preservation of the quality of human life and ecological
systems, and the prevention of undue ecological disturbances, deterioration and pollution.1
Special powers of the Authority, pertinent to the issues in this case, include:
Sec. 3. Section 4 of the same Act is hereby further amended by adding thereto seven new paragraphs
to be known as paragraphs (j), (k), (l), (m), (n), (o), and (p) which shall read as follows:
xxx xxx xxx
(j) The provisions of existing laws to the contrary notwithstanding, to engage in fish production
and other aqua-culture projects in Laguna de Bay and other bodies of water within its jurisdiction
and in pursuance thereof to conduct studies and make experiments, whenever necessary, with
the collaboration and assistance of the Bureau of Fisheries and Aquatic Resources, with the end
in view of improving present techniques and practices. Provided, that until modified, altered or
amended by the procedure provided in the following sub-paragraph, the present laws, rules and
permits or authorizations remain in force;
(k) For the purpose of effectively regulating and monitoring activities in Laguna de Bay, the
Authority shall have exclusive jurisdiction to issue new permit for the use of the lake waters for
any projects or activities in or affecting the said lake including navigation, construction, and
operation of fishpens, fish enclosures, fish corrals and the like, and to impose necessary
safeguards for lake quality control and management and to collect necessary fees for said
activities and projects: Provided, That the fees collected for fisheries may be shared between the
Authority and other government agencies and political sub-divisions in such proportion as may be
determined by the President of the Philippines upon recommendation of the Authority's
Board: Provided, further, That the Authority's Board may determine new areas of fishery
development or activities which it may place under the supervision of the Bureau of Fisheries and
Aquatic Resources taking into account the overall development plans and programs for Laguna
de Bay and related bodies of water: Provided, finally, That the Authority shall subject to the
approval of the President of the Philippines promulgate such rules and regulations which shall
govern fisheries development activities in Laguna de Bay which shall take into consideration
among others the following: socio-economic amelioration of bonafide resident fishermen whether
individually or collectively in the form of cooperatives, lakeshore town development, a master plan
for fishpen construction and operation, communal fishing ground for lake shore town residents,
and preference to lake shore town residents in hiring laborer for fishery projects;
(l) To require the cities and municipalities embraced within the region to pass appropriate zoning
ordinances and other regulatory measures necessary to carry out the objectives of the Authority
and enforce the same with the assistance of the Authority;
(m) The provisions of existing laws to the contrary notwithstanding, to exercise water rights over
public waters within the Laguna de Bay region whenever necessary to carry out the Authority's
projects;
(n) To act in coordination with existing governmental agencies in establishing water quality
standards for industrial, agricultural and municipal waste discharges into the lake and to
cooperate with said existing agencies of the government of the Philippines in enforcing such
standards, or to separately pursue enforcement and penalty actions as provided for in Section 4
(d) and Section 39-A of this Act: Provided, That in case of conflict on the appropriate water quality
standard to be enforced such conflict shall be resolved thru the NEDA Board.2
To more effectively perform the role of the Authority under Republic Act No. 4850, as though Presidential Decree
No. 813 were not thought to be completely effective, the Chief Executive, feeling that the land and waters of the
Laguna Lake Region are limited natural resources requiring judicious management to their optimal utilization to
insure renewability and to preserve the ecological balance, the competing options for the use of such resources
and conflicting jurisdictions over such uses having created undue constraints on the institutional capabilities of the
Authority in the light of the limited powers vested in it by its charter, Executive Order No. 927 further defined and
enlarged the functions and powers of the Authority and named and enumerated the towns, cities and provinces
encompassed by the term "Laguna de Bay Region".
Also, pertinent to the issues in this case are the following provisions of Executive Order No. 927 which include in
particular the sharing of fees:
Sec 2. Water Rights Over Laguna de Bay and Other Bodies of Water within the Lake Region: To
effectively regulate and monitor activities in the Laguna de Bay region, the Authority shall have
exclusive jurisdiction to issue permit for the use of all surface water for any projects or activities in or
affecting the said region including navigation, construction, and operation of fishpens, fish enclosures,
fish corrals and the like.
For the purpose of this Executive Order, the term "Laguna de Bay Region" shall refer to the Provinces
of Rizal and Laguna; the Cities of San Pablo, Pasay, Caloocan, Quezon, Manila and Tagaytay; the
towns of Tanauan, Sto. Tomas and Malvar in Batangas Province; the towns of Silang and Carmona in
Cavite Province; the town of Lucban in Quezon Province; and the towns of Marikina, Pasig, Taguig,
Muntinlupa, and Pateros in Metro Manila.
Sec 3. Collection of Fees. The Authority is hereby empowered to collect fees for the use of the lake
water and its tributaries for all beneficial purposes including but not limited to fisheries, recreation,
municipal, industrial, agricultural, navigation, irrigation, and waste disposal purpose; Provided, that the
40
rates of the fees to be collected, and the sharing with other government agencies and political
subdivisions, if necessary, shall be subject to the approval of the President of the Philippines upon
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recommendation of the Authority's Board, except fishpen fee, which will be shared in the following
manner; 20 percent of the fee shall go to the lakeshore local governments, 5 percent shall go to the
Project Development Fund which shall be administered by a Council and the remaining 75 percent
shall constitute the share of LLDA. However, after the implementation within the three-year period of
the Laguna Lake Fishery Zoning and Management Plan, the sharing will be modified as follows: 35
percent of the fishpen fee goes to the lakeshore local governments, 5 percent goes to the Project
Development Fund and the remaining 60 percent shall be retained by LLDA; Provided, however, that
the share of LLDA shall form part of its corporate funds and shall not be remitted to the National
Treasury as an exception to the provisions of Presidential Decree No. 1234. (Emphasis supplied)
It is important to note that Section 29 of Presidential Decree No. 813 defined the term "Laguna Lake" in this
manner:
Sec 41. Definition of Terms.
(11) Laguna Lake or Lake. Whenever Laguna Lake or lake is used in this Act, the same shall refer to
Laguna de Bay which is that area covered by the lake water when it is at the average annual
maximum lake level of elevation 12.50 meters, as referred to a datum 10.00 meters below mean lower
low water (M.L.L.W). Lands located at and below such elevation are public lands which form part of
the bed of said lake.
Then came Republic Act No. 7160, the Local Government Code of 1991. The municipalities in the Laguna Lake
Region interpreted the provisions of this law to mean that the newly passed law gave municipal governments the
exclusive jurisdiction to issue fishing privileges within their municipal waters because R.A. 7160 provides:
Sec. 149. Fishery Rentals, Fees and Charges.
(a) Municipalities shall have the exclusive authority to grant fishery privileges in the municipal
waters and impose rental fees or charges therefor in accordance with the provisions of this
Section.
(b) The Sangguniang Bayan may:
(1) Grant fishing privileges to erect fish corrals, oyster, mussel or other aquatic beds or
bangus fry areas, within a definite zone of the municipal waters, as determined by it;
(2) Grant privilege to gather, take or catch bangus fry, prawn fry or kawag-kawag or fry
of other species and fish from the municipal waters by nets, traps or other fishing gears
to marginal fishermen free from any rental fee, charges or any other imposition
whatsoever.
xxx xxx xxx
Sec. 447. Power, Duties, Functions and Compensation. . . . .
xxx xxx xxx
(XI) Subject to the provisions of Book II of this Code, grant exclusive privileges of
constructing fish corrals or fishpens, or the taking or catching of bangus fry, prawn fry
or kawag-kawag or fry of any species or fish within the municipal waters.
xxx xxx xxx
Municipal governments thereupon assumed the authority to issue fishing privileges and fishpen permits. Big
fishpen operators took advantage of the occasion to establish fishpens and fishcages to the consternation of the
Authority. Unregulated fishpens and fishcages, as of July, 1995, occupied almost one-third of the entire lake water
surface area, increasing the occupation drastically from 7,000 hectares in 1990 to almost 21,000 hectares in 1995.
The Mayor's permit to construct fishpens and fishcages were all undertaken in violation of the policies adopted by
the Authority on fishpen zoning and the Laguna Lake carrying capacity.
To be sure, the implementation by the lakeshore municipalities of separate independent policies in the operation of
fishpens and fishcages within their claimed territorial municipal waters in the lake and their indiscriminate grant of
fishpen permits have already saturated the lake area with fishpens, thereby aggravating the current environmental
problems and ecological stress of Laguna Lake.
In view of the foregoing circumstances, the Authority served notice to the general public that:
In compliance with the instructions of His Excellency PRESIDENT FIDEL V. RAMOS given on June
23, 1993 at Pila, Laguna pursuant to Republic Act 4850 as amended by Presidential Decree 813 and
Executive Order 927 series of 1983 and in line with the policies and programs of the Presidential Task
Force on Illegal Fishpens and Illegal Fishing, the general public is hereby notified that:
1. All fishpens, fishcages and other aqua-culture structures in the Laguna de Bay Region, which were
not registered or to which no application for registration and/or permit has been filed with Laguna Lake
Development Authority as of March 31, 1993 are hereby declared outrightly as illegal.
2. All fishpens, fishcages and other aqua-culture structures so declared as illegal shall be subject to
demolition which shall be undertaken by the Presidential Task Force for Illegal Fishpen and Illegal
Fishing.
3. Owners of fishpens, fishcages and other aqua-culture structures declared as illegal shall, without
prejudice to demolition of their structures be criminally charged in accordance with Section 39-A of
Republic Act 4850 as amended by P.D. 813 for violation of the same laws. Violations of these laws
carries a penalty of imprisonment of not exceeding 3 years or a fine not exceeding Five Thousand
Pesos or both at the discretion of the court.
41
All operators of fishpens, fishcages and other aqua-culture structures declared as illegal in accordance
with the foregoing Notice shall have one (1) month on or before 27 October 1993 to show cause
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before the LLDA why their said fishpens, fishcages and other aqua-culture structures should not be
demolished/dismantled.
One month, thereafter, the Authority sent notices to the concerned owners of the illegally constructed fishpens,
fishcages and other aqua-culture structures advising them to dismantle their respective structures within 10 days
from receipt thereof, otherwise, demolition shall be effected.
Reacting thereto, the affected fishpen owners filed injunction cases against the Authority before various regional
trial courts, to wit: (a) Civil Case No. 759-B, for Prohibition, Injunction and Damages, Regional Trial Court, Branch
70, Binangonan, Rizal, filed by Fleet Development, Inc. and Carlito Arroyo; (b) Civil Case No. 64049, for Injunction,
Regional Trial Court, Branch 162, Pasig, filed by IRMA Fishing and Trading Corp., ARTM Fishing Corp., BDR
Corp., MIRT Corp. and TRIM Corp.; (c) Civil Case No. 566, for Declaratory Relief and Injunction, Regional Trial
Court, Branch 163, Pasig, filed by Manila Marine Life Business Resources, Inc. and Tobias Reynaldo M. Tianco;
(d) Civil Case No. 556-M, for Prohibition, Injunction and Damages, Regional Trial Court, Branch 78, Morong, Rizal,
filed by AGP Fishing Ventures, Inc.; (e) Civil Case No. 522-M, for Prohibition, Injunction and Damages, Regional
Trial Court, Branch 78, Morong, Rizal, filed by Blue Lagoon and Alcris Chicken Growers, Inc.; (f) Civil Case No.
554-, for Certiorari and Prohibition, Regional Trial Court, Branch 79, Morong, Rizal, filed by Greenfields Ventures
Industrial Corp. and R.J. Orion Development Corp.; and (g) Civil Case No. 64124, for Injunction, Regional Trial
Court, Branch 15, Pasig, filed by SEA-MAR Trading Co., Inc. and Eastern Lagoon Fishing Corp. and Minamar
Fishing Corporation.
The Authority filed motions to dismiss the cases against it on jurisdictional grounds. The motions to dismiss were
invariably denied. Meanwhile, temporary restraining order/writs of preliminary mandatory injunction were issued in
Civil Cases Nos. 64124, 759 and 566 enjoining the Authority from demolishing the fishpens and similar structures
in question.
Hence, the herein petition for certiorari, prohibition and injunction, G.R. Nos. 120865-71, were filed by the Authority
with this court. Impleaded as parties-respondents are concerned regional trial courts and respective private parties,
and the municipalities and/or respective Mayors of Binangonan, Taguig and Jala-jala, who issued permits for the
construction and operation of fishpens in Laguna de Bay. The Authority sought the following reliefs, viz.:
(A) Nullification of the temporary restraining order/writs of preliminary injunction issued in Civil Cases
Nos. 64125, 759 and 566;
(B) Permanent prohibition against the regional trial courts from exercising jurisdiction over cases
involving the Authority which is a co-equal body;
(C) Judicial pronouncement that R.A. 7610 (Local Government Code of 1991) did not repeal, alter or
modify the provisions of R.A. 4850, as amended, empowering the Authority to issue permits for
fishpens, fishcages and other aqua-culture structures in Laguna de Bay and that, the Authority the
government agency vested with exclusive authority to issue said permits.
By this Court's resolution of May 2, 1994, the Authority's consolidated petitions were referred to the Court of
Appeals.
In a Decision, dated June 29, 1995, the Court of Appeals dismissed the Authority's consolidated petitions, the Court
of Appeals holding that: (A) LLDA is not among those quasi-judicial agencies of government whose decision or
order are appealable only to the Court of Appeals; (B) the LLDA charter does vest LLDA with quasi-judicial
functions insofar as fishpens are concerned; (C) the provisions of the LLDA charter insofar as fishing privileges in
Laguna de Bay are concerned had been repealed by the Local Government Code of 1991; (D) in view of the
aforesaid repeal, the power to grant permits devolved to and is now vested with their respective local government
units concerned.
Not satisfied with the Court of Appeals decision, the Authority has returned to this Court charging the following
errors:
1. THE HONORABLE COURT OF APPEALS PROBABLY COMMITTED AN ERROR WHEN IT
RULED THAT THE LAGUNA LAKE DEVELOPMENT AUTHORITY IS NOT A QUASI-JUDICIAL
AGENCY.
2. THE HONORABLE COURT OF APPEALS COMMITTED SERIOUS ERROR WHEN IT RULED
THAT R.A. 4850 AS AMENDED BY P.D. 813 AND E.O. 927 SERIES OF 1983 HAS BEEN
REPEALED BY REPUBLIC ACT 7160. THE SAID RULING IS CONTRARY TO ESTABLISHED
PRINCIPLES AND JURISPRUDENCE OF STATUTORY CONSTRUCTION.
3. THE HONORABLE COURT OF APPEALS COMMITTED SERIOUS ERROR WHEN IT RULED
THAT THE POWER TO ISSUE FISHPEN PERMITS IN LAGUNA DE BAY HAS BEEN DEVOLVED
TO CONCERNED (LAKESHORE) LOCAL GOVERNMENT UNITS.
We take a simplistic view of the controversy. Actually, the main and only issue posed is: Which agency of the
Government — the Laguna Lake Development Authority or the towns and municipalities comprising the region —
should exercise jurisdiction over the Laguna Lake and its environs insofar as the issuance of permits for fishery
privileges is concerned?
Section 4 (k) of the charter of the Laguna Lake Development Authority, Republic Act No. 4850, the provisions of
Presidential Decree No. 813, and Section 2 of Executive Order No. 927, cited above, specifically provide that the
Laguna Lake Development Authority shall have exclusive jurisdiction to issue permits for the use of all surface
water for any projects or activities in or affecting the said region, including navigation, construction, and operation of
fishpens, fish enclosures, fish corrals and the like. On the other hand, Republic Act No. 7160, the Local
Government Code of 1991, has granted to the municipalities the exclusive authority to grant fishery privileges in
municipal waters. The Sangguniang Bayan may grant fishery privileges to erect fish corrals, oyster, mussels or
other aquatic beds or bangus fry area within a definite zone of the municipal waters.
We hold that the provisions of Republic Act No. 7160 do not necessarily repeal the aforementioned laws creating
42
the Laguna Lake Development Authority and granting the latter water rights authority over Laguna de Bay and the
lake region.
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The Local Government Code of 1991 does not contain any express provision which categorically expressly repeal
the charter of the Authority. It has to be conceded that there was no intent on the part of the legislature to repeal
Republic Act No. 4850 and its amendments. The repeal of laws should be made clear and expressed.
It has to be conceded that the charter of the Laguna Lake Development Authority constitutes a special law.
Republic Act No. 7160, the Local Government Code of 1991, is a general law. It is basic in statutory construction
that the enactment of a later legislation which is a general law cannot be construed to have repealed a special law.
It is a well-settled rule in this jurisdiction that "a special statute, provided for a particular case or class of cases, is
not repealed by a subsequent statute, general in its terms, provisions and application, unless the intent to repeal or
alter is manifest, although the terms of the general law are broad enough to include the cases embraced in the
special law."3
Where there is a conflict between a general law and a special statute, the special statute should prevail since it
evinces the legislative intent more clearly than the general statute. The special law is to be taken as an exception to
the general law in the absence of special circumstances forcing a contrary conclusion. This is because implied
repeals are not favored and as much as possible, effect must be given to all enactments of the legislature. A
special law cannot be repealed, amended or altered by a subsequent general law by mere implication.4
Thus, it has to be concluded that the charter of the Authority should prevail over the Local Government Code of
1991.
Considering the reasons behind the establishment of the Authority, which are environmental protection,
navigational safety, and sustainable development, there is every indication that the legislative intent is for the
Authority to proceed with its mission.
We are on all fours with the manifestation of petitioner Laguna Lake Development Authority that "Laguna de Bay,
like any other single body of water has its own unique natural ecosystem. The 900 km² lake surface water, the eight
(8) major river tributaries and several other smaller rivers that drain into the lake, the 2,920 km² basin or watershed
transcending the boundaries of Laguna and Rizal provinces, greater portion of Metro Manila, parts of Cavite,
Batangas, and Quezon provinces, constitute one integrated delicate natural ecosystem that needs to be protected
with uniform set of policies; if we are to be serious in our aims of attaining sustainable development. This is an
exhaustible natural resource — a very limited one — which requires judicious management and optimal utilization
to ensure renewability and preserve its ecological integrity and balance."
"Managing the lake resources would mean the implementation of a national policy geared towards the protection,
conservation, balanced growth and sustainable development of the region with due regard to the inter-generational
use of its resources by the inhabitants in this part of the earth. The authors of Republic Act 4850 have foreseen this
need when they passed this LLDA law — the special law designed to govern the management of our Laguna de
Bay lake resources."
"Laguna de Bay therefore cannot be subjected to fragmented concepts of management policies where lakeshore
local government units exercise exclusive dominion over specific portions of the lake water. The garbage thrown or
sewage discharged into the lake, abstraction of water therefrom or construction of fishpens by enclosing its certain
area, affect not only that specific portion but the entire 900 km² of lake water. The implementation of a cohesive
and integrated lake water resource management policy, therefore, is necessary to conserve, protect and
sustainably develop Laguna de Bay."5
The power of the local government units to issue fishing privileges was clearly granted for revenue purposes. This
is evident from the fact that Section 149 of the New Local Government Code empowering local governments to
issue fishing permits is embodied in Chapter 2, Book II, of Republic Act No. 7160 under the heading, "Specific
Provisions On The Taxing And Other Revenue Raising Power Of Local Government Units."
On the other hand, the power of the Authority to grant permits for fishpens, fishcages and other aqua-culture
structures is for the purpose of effectively regulating and monitoring activities in the Laguna de Bay region (Section
2, Executive Order No. 927) and for lake quality control and management.6 It does partake of the nature of police
power which is the most pervasive, the least limitable and the most demanding of all State powers including the
power of taxation. Accordingly, the charter of the Authority which embodies a valid exercise of police power should
prevail over the Local Government Code of 1991 on matters affecting Laguna de Bay.
There should be no quarrel over permit fees for fishpens, fishcages and other aqua-culture structures in the Laguna
de Bay area. Section 3 of Executive Order No. 927 provides for the proper sharing of fees collected.
In respect to the question as to whether the Authority is a quasi-judicial agency or not, it is our holding that,
considering the provisions of Section 4 of Republic Act No. 4850 and Section 4 of Executive Order No. 927, series
of 1983, and the ruling of this Court in Laguna Lake Development Authority vs. Court of Appeals, 231 SCRA 304,
306, which we quote:
xxx xxx xxx
As a general rule, the adjudication of pollution cases generally pertains to the Pollution Adjudication
Board (PAB), except in cases where the special law provides for another forum. It must be recognized
in this regard that the LLDA, as a specialized administrative agency, is specifically mandated under
Republic Act No. 4850 and its amendatory laws to carry out and make effective the declared national
policy of promoting and accelerating the development and balanced growth of the Laguna Lake area
and the surrounding provinces of Rizal and Laguna and the cities of San Pablo, Manila, Pasay,
Quezon and Caloocan with due regard and adequate provisions for environmental management and
control, preservation of the quality of human life and ecological systems, and the prevention of undue
ecological disturbances, deterioration and pollution. Under such a broad grant of power and authority,
the LLDA, by virtue of its special charter, obviously has the responsibility to protect the inhabitants of
the Laguna Lake region from the deleterious effects of pollutants emanating from the discharge of
43
wastes from the surrounding areas. In carrying out the aforementioned declared policy, the LLDA is
mandated, among others, to pass upon and approve or disapprove all plans, programs, and projects
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proposed by local government offices/agencies within the region, public corporations, and private
persons or enterprises where such plans, programs and/or projects are related to those of the LLDA
for the development of the region.
xxx xxx xxx
. . . . While it is a fundamental rule that an administrative agency has only such powers as are
expressly granted to it by law, it is likewise a settled rule that an administrative agency has also such
powers as are necessarily implied in the exercise of its express powers. In the exercise, therefore, of
its express powers under its charter, as a regulatory and quasi-judicial body with respect to pollution
cases in the Laguna Lake region, the authority of the LLDA to issue a "cease and desist order" is,
perforce, implied. Otherwise, it may well be reduced to a "toothless" paper agency.
there is no question that the Authority has express powers as a regulatory and quasi-judicial body in
respect to pollution cases with authority to issue a "cease and desist order" and on matters affecting the
construction of illegal fishpens, fishcages and other aqua-culture structures in Laguna de Bay. The
Authority's pretense, however, that it is co-equal to the Regional Trial Courts such that all actions against it
may only be instituted before the Court of Appeals cannot be sustained. On actions necessitating the
resolution of legal questions affecting the powers of the Authority as provided for in its charter, the Regional
Trial Courts have jurisdiction.
In view of the foregoing, this Court holds that Section 149 of Republic Act No. 7160, otherwise known as the Local
Government Code of 1991, has not repealed the provisions of the charter of the Laguna Lake Development
Authority, Republic Act No. 4850, as amended. Thus, the Authority has the exclusive jurisdiction to issue permits
for the enjoyment of fishery privileges in Laguna de Bay to the exclusion of municipalities situated therein and the
authority to exercise such powers as are by its charter vested on it.
Removal from the Authority of the aforesaid licensing authority will render nugatory its avowed purpose of
protecting and developing the Laguna Lake Region. Otherwise stated, the abrogation of this power would render
useless its reason for being and will in effect denigrate, if not abolish, the Laguna Lake Development Authority.
This, the Local Government Code of 1991 had never intended to do.
WHEREFORE, the petitions for prohibition, certiorari and injunction are hereby granted, insofar as they relate to the
authority of the Laguna Lake Development Authority to grant fishing privileges within the Laguna Lake Region.
The restraining orders and/or writs of injunction issued by Judge Arturo Marave, RTC, Branch 78, Morong, Rizal;
Judge Herculano Tech, RTC, Branch 70, Binangonan, Rizal; and Judge Aurelio Trampe, RTC, Branch 163, Pasig,
Metro Manila, are hereby declared null and void and ordered set aside for having been issued with grave abuse of
discretion.
The Municipal Mayors of the Laguna Lake Region are hereby prohibited from issuing permits to construct and
operate fishpens, fishcages and other aqua-culture structures within the Laguna Lake Region, their previous
issuances being declared null and void. Thus, the fishing permits issued by Mayors Isidro B. Pacis, Municipality of
Binangonan; Ricardo D. Papa, Municipality of Taguig; and Walfredo M. de la Vega, Municipality of Jala-jala,
specifically, are likewise declared null and void and ordered cancelled.
The fishpens, fishcages and other aqua-culture structures put up by operators by virtue of permits issued by
Municipal Mayors within the Laguna Lake Region, specifically, permits issued to Fleet Development, Inc. and
Carlito Arroyo; Manila Marine Life Business Resources, Inc., represented by, Mr. Tobias Reynald M. Tiangco;
Greenfield Ventures Industrial Development Corporation and R.J. Orion Development Corporation; IRMA Fishing
And Trading Corporation, ARTM Fishing Corporation, BDR Corporation, Mirt Corporation and Trim Corporation;
Blue Lagoon Fishing Corporation and ALCRIS Chicken Growers, Inc.; AGP Fish Ventures, Inc., represented by its
President Alfonso Puyat; SEA MAR Trading Co., Inc., Eastern Lagoon Fishing Corporation, and MINAMAR Fishing
Corporation, are hereby declared illegal structures subject to demolition by the Laguna Lake Development
Authority.
SO ORDERED.
Davide, Jr., Bellosillo and Kapunan, JJ., concur.
Separate Opinions
I fully concur with the decision written by Mr. Justice R. Hermosisima, Jr.. I would only like to stress what the decision already
states, i.e., that the local government units in the Laguna Lake area are not precluded from imposing permits on fishery
operations for revenue raising purposes of such local government units. In other words, while the exclusive jurisdiction to
determine whether or not projects or activities in the lake area should be allowed, as well as their regulation, is with the Laguna
Lake Development Authority, once the Authority grants a permit, the permittee may still be subjected to an additional local
permit or license for revenue purposes of the local government units concerned. This approach would clearly harmonize the
special law, Rep. Act No. 4850, as amended, with Rep. Act No. 7160, the Local Government Code. It will also enable small
towns and municipalities in the lake area, like Jala-Jala, to rise to some level of economic viability.
Separate Opinions
I fully concur with the decision written by Mr. Justice R. Hermosisima, Jr.. I would only like to stress what the decision already
states, i.e., that the local government units in the Laguna Lake area are not precluded from imposing permits on fishery
operations for revenue raising purposes of such local government units. In other words, while the exclusive jurisdiction to
determine whether or not projects or activities in the lake area should be allowed, as well as their regulation, is with the Laguna
Lake Development Authority, once the Authority grants a permit, the permittee may still be subjected to an additional local
permit or license for revenue purposes of the local government units concerned. This approach would clearly harmonize the
special law, Rep. Act No. 4850, as amended, with Rep. Act No. 7160, the Local Government Code. It will also enable small
towns and municipalities in the lake area, like Jala-Jala, to rise to some level of economic viability.
44
G.R. No. 111097 July 20, 1994

Page
MAYOR PABLO P. MAGTAJAS & THE CITY OF CAGAYAN DE ORO, petitioners,
vs.
PRYCE PROPERTIES CORPORATION, INC. & PHILIPPINE AMUSEMENT AND GAMING
CORPORATION, respondents.
Aquilino G. Pimentel, Jr. and Associates for petitioners.
R.R. Torralba & Associates for private respondent.
CRUZ, J.:
There was instant opposition when PAGCOR announced the opening of a casino in Cagayan de Oro City. Civic
organizations angrily denounced the project. The religious elements echoed the objection and so did the women's
groups and the youth. Demonstrations were led by the mayor and the city legislators. The media trumpeted the
protest, describing the casino as an affront to the welfare of the city.
The trouble arose when in 1992, flush with its tremendous success in several cities, PAGCOR decided to expand
its operations to Cagayan de Oro City. To this end, it leased a portion of a building belonging to Pryce Properties
Corporation, Inc., one of the herein private respondents, renovated and equipped the same, and prepared to
inaugurate its casino there during the Christmas season.
The reaction of the Sangguniang Panlungsod of Cagayan de Oro City was swift and hostile. On December 7, 1992,
it enacted Ordinance No. 3353 reading as follows:
ORDINANCE NO. 3353
AN ORDINANCE PROHIBITING THE ISSUANCE OF BUSINESS PERMIT AND CANCELLING
EXISTING BUSINESS PERMIT TO ANY ESTABLISHMENT FOR THE USING AND ALLOWING
TO BE USED ITS PREMISES OR PORTION THEREOF FOR THE OPERATION OF CASINO.
BE IT ORDAINED by the Sangguniang Panlungsod of the City of Cagayan de Oro, in session
assembled that:
Sec. 1. — That pursuant to the policy of the city banning the operation of casino within its territorial
jurisdiction, no business permit shall be issued to any person, partnership or corporation for the
operation of casino within the city limits.
Sec. 2. — That it shall be a violation of existing business permit by any persons, partnership or
corporation to use its business establishment or portion thereof, or allow the use thereof by others
for casino operation and other gambling activities.
Sec. 3. — PENALTIES. — Any violation of such existing business permit as defined in the
preceding section shall suffer the following penalties, to wit:
a) Suspension of the business permit for sixty (60) days for the
first offense and a fine of P1,000.00/day
b) Suspension of the business permit for Six (6) months for the
second offense, and a fine of P3,000.00/day
c) Permanent revocation of the business permit and imprisonment
of One (1) year, for the third and subsequent offenses.
Sec. 4. — This Ordinance shall take effect ten (10) days from publication thereof.
Nor was this all. On January 4, 1993, it adopted a sterner Ordinance No. 3375-93 reading as follows:
ORDINANCE NO. 3375-93
AN ORDINANCE PROHIBITING THE OPERATION OF CASINO AND PROVIDING PENALTY
FOR VIOLATION THEREFOR.
WHEREAS, the City Council established a policy as early as 1990 against CASINO under its
Resolution No. 2295;
WHEREAS, on October 14, 1992, the City Council passed another Resolution No. 2673, reiterating
its policy against the establishment of CASINO;
WHEREAS, subsequently, thereafter, it likewise passed Ordinance No. 3353, prohibiting the
issuance of Business Permit and to cancel existing Business Permit to any establishment for the
using and allowing to be used its premises or portion thereof for the operation of CASINO;
WHEREAS, under Art. 3, section 458, No. (4), sub paragraph VI of the Local Government Code of
1991 (Rep. Act 7160) and under Art. 99, No. (4), Paragraph VI of the implementing rules of the
Local Government Code, the City Council as the Legislative Body shall enact measure to suppress
any activity inimical to public morals and general welfare of the people and/or regulate or prohibit
such activity pertaining to amusement or entertainment in order to protect social and moral welfare
of the community;
NOW THEREFORE,
BE IT ORDAINED by the City Council in session duly assembled that:
Sec. 1. — The operation of gambling CASINO in the City of Cagayan de Oro is hereby prohibited.
45
Sec. 2. — Any violation of this Ordinance shall be subject to the following penalties:
Page
a) Administrative fine of P5,000.00 shall be imposed against the proprietor, partnership or
corporation undertaking the operation, conduct, maintenance of gambling CASINO in the City and
closure thereof;
b) Imprisonment of not less than six (6) months nor more than one (1) year or a fine in the amount
of P5,000.00 or both at the discretion of the court against the manager, supervisor, and/or any
person responsible in the establishment, conduct and maintenance of gambling CASINO.
Sec. 3. — This Ordinance shall take effect ten (10) days after its publication in a local newspaper
of general circulation.
Pryce assailed the ordinances before the Court of Appeals, where it was joined by PAGCOR as intervenor and
supplemental petitioner. Their challenge succeeded. On March 31, 1993, the Court of Appeals declared the
ordinances invalid and issued the writ prayed for to prohibit their enforcement. 1 Reconsideration of this decision
was denied on July 13, 1993. 2
Cagayan de Oro City and its mayor are now before us in this petition for review under Rule 45 of the Rules of
Court. 3 They aver that the respondent Court of Appeals erred in holding that:
1. Under existing laws, the Sangguniang Panlungsod of the City of Cagayan de Oro does not have
the power and authority to prohibit the establishment and operation of a PAGCOR gambling casino
within the City's territorial limits.
2. The phrase "gambling and other prohibited games of chance" found in Sec. 458, par. (a), sub-
par. (1) — (v) of R.A. 7160 could only mean "illegal gambling."
3. The questioned Ordinances in effect annul P.D. 1869 and are therefore invalid on that point.
4. The questioned Ordinances are discriminatory to casino and partial to cockfighting and are
therefore invalid on that point.
5. The questioned Ordinances are not reasonable, not consonant with the general powers and
purposes of the instrumentality concerned and inconsistent with the laws or policy of the State.
6. It had no option but to follow the ruling in the case of Basco, et al. v. PAGCOR, G.R. No. 91649,
May 14, 1991, 197 SCRA 53 in disposing of the issues presented in this present case.
PAGCOR is a corporation created directly by P.D. 1869 to help centralize and regulate all games of chance,
including casinos on land and sea within the territorial jurisdiction of the Philippines. In Basco v. Philippine
Amusements and Gaming Corporation, 4 this Court sustained the constitutionality of the decree and even cited the
benefits of the entity to the national economy as the third highest revenue-earner in the government, next only to
the BIR and the Bureau of Customs.
Cagayan de Oro City, like other local political subdivisions, is empowered to enact ordinances for the purposes
indicated in the Local Government Code. It is expressly vested with the police power under what is known as the
General Welfare Clause now embodied in Section 16 as follows:
Sec. 16. — General Welfare. — Every local government unit shall exercise the powers expressly
granted, those necessarily implied therefrom, as well as powers necessary, appropriate, or
incidental for its efficient and effective governance, and those which are essential to the promotion
of the general welfare. Within their respective territorial jurisdictions, local government units shall
ensure and support, among other things, the preservation and enrichment of culture, promote
health and safety, enhance the right of the people to a balanced ecology, encourage and support
the development of appropriate and self-reliant scientific and technological capabilities, improve
public morals, enhance economic prosperity and social justice, promote full employment among
their residents, maintain peace and order, and preserve the comfort and convenience of their
inhabitants.
In addition, Section 458 of the said Code specifically declares that:
Sec. 458. — Powers, Duties, Functions and Compensation. — (a) The Sangguniang Panlungsod,
as the legislative body of the city, shall enact ordinances, approve resolutions and appropriate
funds for the general welfare of the city and its inhabitants pursuant to Section 16 of this Code and
in the proper exercise of the corporate powers of the city as provided for under Section 22 of this
Code, and shall:
(1) Approve ordinances and pass resolutions necessary for an efficient and effective city
government, and in this connection, shall:
x x x x x x x x x
(v) Enact ordinances intended to prevent, suppress and impose
appropriate penalties for habitual drunkenness in public places,
vagrancy, mendicancy, prostitution, establishment and
maintenance of houses of ill repute, gambling and other prohibited
games of chance, fraudulent devices and ways to obtain money or
property, drug addiction, maintenance of drug dens, drug pushing,
juvenile delinquency, the printing, distribution or exhibition of
obscene or pornographic materials or publications, and such other
activities inimical to the welfare and morals of the inhabitants of
the city;
This section also authorizes the local government units to regulate properties and businesses within their territorial
46
limits in the interest of the general welfare. 5

Page
The petitioners argue that by virtue of these provisions, the Sangguniang Panlungsod may prohibit the operation of
casinos because they involve games of chance, which are detrimental to the people. Gambling is not allowed by
general law and even by the Constitution itself. The legislative power conferred upon local government units may
be exercised over all kinds of gambling and not only over "illegal gambling" as the respondents erroneously argue.
Even if the operation of casinos may have been permitted under P.D. 1869, the government of Cagayan de Oro
City has the authority to prohibit them within its territory pursuant to the authority entrusted to it by the Local
Government Code.
It is submitted that this interpretation is consonant with the policy of local autonomy as mandated in Article II,
Section 25, and Article X of the Constitution, as well as various other provisions therein seeking to strengthen the
character of the nation. In giving the local government units the power to prevent or suppress gambling and other
social problems, the Local Government Code has recognized the competence of such communities to determine
and adopt the measures best expected to promote the general welfare of their inhabitants in line with the policies of
the State.
The petitioners also stress that when the Code expressly authorized the local government units to prevent and
suppress gambling and other prohibited games of chance, like craps, baccarat, blackjack and roulette, it
meant all forms of gambling without distinction. Ubi lex non distinguit, nec nos distinguere debemos. 6 Otherwise, it
would have expressly excluded from the scope of their power casinos and other forms of gambling authorized by
special law, as it could have easily done. The fact that it did not do so simply means that the local government units
are permitted to prohibit all kinds of gambling within their territories, including the operation of casinos.
The adoption of the Local Government Code, it is pointed out, had the effect of modifying the charter of the
PAGCOR. The Code is not only a later enactment than P.D. 1869 and so is deemed to prevail in case of
inconsistencies between them. More than this, the powers of the PAGCOR under the decree are expressly
discontinued by the Code insofar as they do not conform to its philosophy and provisions, pursuant to Par. (f) of its
repealing clause reading as follows:
(f) All general and special laws, acts, city charters, decrees, executive orders, proclamations and
administrative regulations, or part or parts thereof which are inconsistent with any of the provisions
of this Code are hereby repealed or modified accordingly.
It is also maintained that assuming there is doubt regarding the effect of the Local Government Code on P.D. 1869,
the doubt must be resolved in favor of the petitioners, in accordance with the direction in the Code calling for its
liberal interpretation in favor of the local government units. Section 5 of the Code specifically provides:
Sec. 5. Rules of Interpretation. — In the interpretation of the provisions of this Code, the following
rules shall apply:
(a) Any provision on a power of a local government unit shall be liberally interpreted in its favor,
and in case of doubt, any question thereon shall be resolved in favor of devolution of powers and
of the lower local government unit. Any fair and reasonable doubt as to the existence of the power
shall be interpreted in favor of the local government unit concerned;
xxx xxx xxx
(c) The general welfare provisions in this Code shall be liberally interpreted to give more powers to
local government units in accelerating economic development and upgrading the quality of life for
the people in the community; . . . (Emphasis supplied.)
Finally, the petitioners also attack gambling as intrinsically harmful and cite various provisions of the Constitution
and several decisions of this Court expressive of the general and official disapprobation of the vice. They invoke
the State policies on the family and the proper upbringing of the youth and, as might be expected, call attention to
the old case of U.S. v. Salaveria,7 which sustained a municipal ordinance prohibiting the playing of panguingue.
The petitioners decry the immorality of gambling. They also impugn the wisdom of P.D. 1869 (which they describe
as "a martial law instrument") in creating PAGCOR and authorizing it to operate casinos "on land and sea within the
territorial jurisdiction of the Philippines."
This is the opportune time to stress an important point.
The morality of gambling is not a justiciable issue. Gambling is not illegal per se. While it is generally considered
inimical to the interests of the people, there is nothing in the Constitution categorically proscribing or penalizing
gambling or, for that matter, even mentioning it at all. It is left to Congress to deal with the activity as it sees fit. In
the exercise of its own discretion, the legislature may prohibit gambling altogether or allow it without limitation or it
may prohibit some forms of gambling and allow others for whatever reasons it may consider sufficient. Thus, it has
prohibited jueteng and monte but permits lotteries, cockfighting and horse-racing. In making such choices,
Congress has consulted its own wisdom, which this Court has no authority to review, much less reverse. Well has it
been said that courts do not sit to resolve the merits of conflicting theories. 8 That is the prerogative of the political
departments. It is settled that questions regarding the wisdom, morality, or practicibility of statutes are not
addressed to the judiciary but may be resolved only by the legislative and executive departments, to which the
function belongs in our scheme of government. That function is exclusive. Whichever way these branches decide,
they are answerable only to their own conscience and the constituents who will ultimately judge their acts, and not
to the courts of justice.
The only question we can and shall resolve in this petition is the validity of Ordinance No. 3355 and Ordinance No.
3375-93 as enacted by the Sangguniang Panlungsod of Cagayan de Oro City. And we shall do so only by the
criteria laid down by law and not by our own convictions on the propriety of gambling.
The tests of a valid ordinance are well established. A long line of decisions 9 has held that to be valid, an ordinance
must conform to the following substantive requirements:
1) It must not contravene the constitution or any statute.
47
2) It must not be unfair or oppressive.

3) It must not be partial or discriminatory.
Page
4) It must not prohibit but may regulate trade.

5) It must be general and consistent with public policy.
6) It must not be unreasonable.
We begin by observing that under Sec. 458 of the Local Government Code, local government units are authorized
to prevent or suppress, among others, "gambling and other prohibited games of chance." Obviously, this provision
excludes games of chance which are not prohibited but are in fact permitted by law. The petitioners are less than
accurate in claiming that the Code could have excluded such games of chance but did not. In fact it does. The
language of the section is clear and unmistakable. Under the rule of noscitur a sociis, a word or phrase should be
interpreted in relation to, or given the same meaning of, words with which it is associated. Accordingly, we conclude
that since the word "gambling" is associated with "and other prohibited games of chance," the word should be read
as referring to only illegal gambling which, like the other prohibited games of chance, must be prevented or
suppressed.
We could stop here as this interpretation should settle the problem quite conclusively. But we will not. The vigorous
efforts of the petitioners on behalf of the inhabitants of Cagayan de Oro City, and the earnestness of their
advocacy, deserve more than short shrift from this Court.
The apparent flaw in the ordinances in question is that they contravene P.D. 1869 and the public policy embodied
therein insofar as they prevent PAGCOR from exercising the power conferred on it to operate a casino in Cagayan
de Oro City. The petitioners have an ingenious answer to this misgiving. They deny that it is the ordinances that
have changed P.D. 1869 for an ordinance admittedly cannot prevail against a statute. Their theory is that the
change has been made by the Local Government Code itself, which was also enacted by the national lawmaking
authority. In their view, the decree has been, not really repealed by the Code, but merely "modified pro tanto" in the
sense that PAGCOR cannot now operate a casino over the objection of the local government unit concerned. This
modification of P.D. 1869 by the Local Government Code is permissible because one law can change or repeal
another law.
It seems to us that the petitioners are playing with words. While insisting that the decree has only been
"modified pro tanto," they are actually arguing that it is already dead, repealed and useless for all intents and
purposes because the Code has shorn PAGCOR of all power to centralize and regulate casinos. Strictly speaking,
its operations may now be not only prohibited by the local government unit; in fact, the prohibition is not only
discretionary but mandated by Section 458 of the Code if the word "shall" as used therein is to be given its
accepted meaning. Local government units have now no choice but to prevent and suppress gambling, which in the
petitioners' view includes both legal and illegal gambling. Under this construction, PAGCOR will have no more
games of chance to regulate or centralize as they must all be prohibited by the local government units pursuant to
the mandatory duty imposed upon them by the Code. In this situation, PAGCOR cannot continue to exist except
only as a toothless tiger or a white elephant and will no longer be able to exercise its powers as a prime source of
government revenue through the operation of casinos.
It is noteworthy that the petitioners have cited only Par. (f) of the repealing clause, conveniently discarding the rest
of the provision which painstakingly mentions the specific laws or the parts thereof which are repealed (or modified)
by the Code. Significantly, P.D. 1869 is not one of them. A reading of the entire repealing clause, which is
reproduced below, will disclose the omission:
Sec. 534. Repealing Clause. — (a) Batas Pambansa Blg. 337, otherwise known as the "Local
Government Code," Executive Order No. 112 (1987), and Executive Order No. 319 (1988) are
hereby repealed.
(b) Presidential Decree Nos. 684, 1191, 1508 and such other decrees, orders, instructions,
memoranda and issuances related to or concerning the barangay are hereby repealed.
(c) The provisions of Sections 2, 3, and 4 of Republic Act No. 1939 regarding hospital fund;
Section 3, a (3) and b (2) of Republic Act. No. 5447 regarding the Special Education Fund;
Presidential Decree No. 144 as amended by Presidential Decree Nos. 559 and 1741; Presidential
Decree No. 231 as amended; Presidential Decree No. 436 as amended by Presidential Decree No.
558; and Presidential Decree Nos. 381, 436, 464, 477, 526, 632, 752, and 1136 are hereby
repealed and rendered of no force and effect.
(d) Presidential Decree No. 1594 is hereby repealed insofar as it governs locally-funded projects.
(e) The following provisions are hereby repealed or amended insofar as they are inconsistent with
the provisions of this Code: Sections 2, 16, and 29 of Presidential Decree No. 704; Sections 12 of
Presidential Decree No. 87, as amended; Sections 52, 53, 66, 67, 68, 69, 70, 71, 72, 73, and 74 of
Presidential Decree No. 463, as amended; and Section 16 of Presidential Decree No. 972, as
amended, and
(f) All general and special laws, acts, city charters, decrees, executive orders, proclamations and
administrative regulations, or part or parts thereof which are inconsistent with any of the provisions
of this Code are hereby repealed or modified accordingly.
Furthermore, it is a familiar rule that implied repeals are not lightly presumed in the absence of a clear and
unmistakable showing of such intention. In Lichauco & Co. v. Apostol, 10 this Court explained:
The cases relating to the subject of repeal by implication all proceed on the assumption that if the
act of later date clearly reveals an intention on the part of the lawmaking power to abrogate the
prior law, this intention must be given effect; but there must always be a sufficient revelation of this
intention, and it has become an unbending rule of statutory construction that the intention to repeal
a former law will not be imputed to the Legislature when it appears that the two statutes, or
provisions, with reference to which the question arises bear to each other the relation of general to
48
special.
There is no sufficient indication of an implied repeal of P.D. 1869. On the contrary, as the private respondent points
Page
out, PAGCOR is mentioned as the source of funding in two later enactments of Congress, to wit, R.A. 7309,
creating a Board of Claims under the Department of Justice for the benefit of victims of unjust punishment or
detention or of violent crimes, and R.A. 7648, providing for measures for the solution of the power crisis. PAGCOR
revenues are tapped by these two statutes. This would show that the PAGCOR charter has not been repealed by
the Local Government Code but has in fact been improved as it were to make the entity more responsive to the
fiscal problems of the government.
It is a canon of legal hermeneutics that instead of pitting one statute against another in an inevitably destructive
confrontation, courts must exert every effort to reconcile them, remembering that both laws deserve a becoming
respect as the handiwork of a coordinate branch of the government. On the assumption of a conflict between P.D.
1869 and the Code, the proper action is not to uphold one and annul the other but to give effect to both by
harmonizing them if possible. This is possible in the case before us. The proper resolution of the problem at hand is
to hold that under the Local Government Code, local government units may (and indeed must) prevent and
suppress all kinds of gambling within their territories except only those allowed by statutes like P.D. 1869. The
exception reserved in such laws must be read into the Code, to make both the Code and such laws equally
effective and mutually complementary.
This approach would also affirm that there are indeed two kinds of gambling, to wit, the illegal and those authorized
by law. Legalized gambling is not a modern concept; it is probably as old as illegal gambling, if not indeed more so.
The petitioners' suggestion that the Code authorizes them to prohibit all kinds of gambling would erase the
distinction between these two forms of gambling without a clear indication that this is the will of the legislature.
Plausibly, following this theory, the City of Manila could, by mere ordinance, prohibit the Philippine Charity
Sweepstakes Office from conducting a lottery as authorized by R.A. 1169 and B.P. 42 or stop the races at the San
Lazaro Hippodrome as authorized by R.A. 309 and R.A. 983.
In light of all the above considerations, we see no way of arriving at the conclusion urged on us by the petitioners
that the ordinances in question are valid. On the contrary, we find that the ordinances violate P.D. 1869, which has
the character and force of a statute, as well as the public policy expressed in the decree allowing the playing of
certain games of chance despite the prohibition of gambling in general.
The rationale of the requirement that the ordinances should not contravene a statute is obvious. Municipal
governments are only agents of the national government. Local councils exercise only delegated legislative powers
conferred on them by Congress as the national lawmaking body. The delegate cannot be superior to the principal
or exercise powers higher than those of the latter. It is a heresy to suggest that the local government units can
undo the acts of Congress, from which they have derived their power in the first place, and negate by mere
ordinance the mandate of the statute.
Municipal corporations owe their origin to, and derive their powers and rights wholly from the
legislature. It breathes into them the breath of life, without which they cannot exist. As it creates, so
it may destroy. As it may destroy, it may abridge and control. Unless there is some constitutional
limitation on the right, the legislature might, by a single act, and if we can suppose it capable of so
great a folly and so great a wrong, sweep from existence all of the municipal corporations in the
State, and the corporation could not prevent it. We know of no limitation on the right so far as to the
corporation themselves are concerned. They are, so to phrase it, the mere tenants at will of the
legislature. 11
This basic relationship between the national legislature and the local government units has not been enfeebled by
the new provisions in the Constitution strengthening the policy of local autonomy. Without meaning to detract from
that policy, we here confirm that Congress retains control of the local government units although in significantly
reduced degree now than under our previous Constitutions. The power to create still includes the power to destroy.
The power to grant still includes the power to withhold or recall. True, there are certain notable innovations in the
Constitution, like the direct conferment on the local government units of the power to tax, 12 which cannot now be
withdrawn by mere statute. By and large, however, the national legislature is still the principal of the local
government units, which cannot defy its will or modify or violate it.
The Court understands and admires the concern of the petitioners for the welfare of their constituents and their
apprehensions that the welfare of Cagayan de Oro City will be endangered by the opening of the casino. We share
the view that "the hope of large or easy gain, obtained without special effort, turns the head of the workman" 13 and
that "habitual gambling is a cause of laziness and ruin." 14 In People v. Gorostiza, 15 we declared: "The social
scourge of gambling must be stamped out. The laws against gambling must be enforced to the limit." George
Washington called gambling "the child of avarice, the brother of iniquity and the father of mischief." Nevertheless,
we must recognize the power of the legislature to decide, in its own wisdom, to legalize certain forms of gambling,
as was done in P.D. 1869 and impliedly affirmed in the Local Government Code. That decision can be revoked by
this Court only if it contravenes the Constitution as the touchstone of all official acts. We do not find such
contravention here.
We hold that the power of PAGCOR to centralize and regulate all games of chance, including casinos on land and
sea within the territorial jurisdiction of the Philippines, remains unimpaired. P.D. 1869 has not been modified by the
Local Government Code, which empowers the local government units to prevent or suppress only those forms of
gambling prohibited by law.
Casino gambling is authorized by P.D. 1869. This decree has the status of a statute that cannot be amended or
nullified by a mere ordinance. Hence, it was not competent for the Sangguniang Panlungsod of Cagayan de Oro
City to enact Ordinance No. 3353 prohibiting the use of buildings for the operation of a casino and Ordinance No.
3375-93 prohibiting the operation of casinos. For all their praiseworthy motives, these ordinances are contrary to
P.D. 1869 and the public policy announced therein and are therefore ultra vires and void.
WHEREFORE, the petition is DENIED and the challenged decision of the respondent Court of Appeals is
AFFIRMED, with costs against the petitioners. It is so ordered.
49
Narvasa, C.J., Feliciano, Bidin, Regalado, Romero, Bellosillo, Melo, Quiason, Puno, Vitug, Kapunan and
Mendoza, JJ., concur.
Page

Separate Opinions
I concur with the majority holding that the city ordinances in question cannot modify much less repeal PAGCOR's
general authority to establish and maintain gambling casinos anywhere in the Philippines under Presidential
Decree No. 1869.
In Basco v. Philippine Amusement and Gaming Corporation (PAGCOR), 197 SCRA 52, I stated in a separate
opinion that:
. . . I agree with the decision insofar as it holds that the prohibition, control, and regulation of the
entire activity known as gambling properly pertain to "state policy". It is, therefore, the political
departments of government, namely, the legislative and the executive that should decide on what
government should do in the entire area of gambling, and assume full responsibility to the people
for such policy." (Emphasis supplied)
However, despite the legality of the opening and operation of a casino in Cagayan de Oro City by respondent
PAGCOR, I wish to reiterate my view that gambling in any form runs counter to the government's own efforts to re-
establish and resurrect the Filipino moral character which is generally perceived to be in a state of continuing
erosion.
It is in the light of this alarming perspective that I call upon government to carefully weigh the advantages and
disadvantages of setting up more gambling facilities in the country.
That the PAGCOR contributes greatly to the coffers of the government is not enough reason for setting up more
gambling casinos because, undoubtedly, this will not help improve, but will cause a further deterioration in the
Filipino moral character.
It is worth remembering in this regard that, 1) what is legal is not always moral and 2) the ends do not always justify
the means.
As in Basco, I can easily visualize prostitution at par with gambling. And yet, legalization of the former will not
render it any less reprehensible even if substantial revenue for the government can be realized from it. The same is
true of gambling.
In the present case, it is my considered view that the national government (through PAGCOR) should re-examine
and re-evaluate its decision of imposing the gambling casino on the residents of Cagayan de Oro City; for it is
abundantly clear that public opinion in the city is very much against it, and again the question must be seriously
deliberated: will the prospects of revenue to be realized from the casino outweigh the further destruction of the
Filipino sense of values?

DAVIDE, JR., J., concurring:
While I concur in part with the majority, I wish, however, to express my views on certain aspects of this case.
I.
It must at once be noted that private respondent Pryce Properties Corporation (PRYCE) directly filed with the Court
of Appeals its so-called petition for prohibition, thereby invoking the said court's original jurisdiction to issue writs of
prohibition under Section 9(1) of B.P. Blg. 129. As I see it, however, the principal cause of action therein is one for
declaratory relief: to declare null and unconstitutional — for, inter alia, having been enacted without or in excess of
jurisdiction, for impairing the obligation of contracts, and for being inconsistent with public policy — the challenged
ordinances enacted by the Sangguniang Panglungsod of the City of Cagayan de Oro. The intervention therein of
public respondent Philippine Amusement and Gaming Corporation (PAGCOR) further underscores the "declaratory
relief" nature of the action. PAGCOR assails the ordinances for being contrary to the non-impairment and equal
protection clauses of the Constitution, violative of the Local Government Code, and against the State's national
policy declared in P.D. No. 1869. Accordingly, the Court of Appeals does not have jurisdiction over the nature of the
action. Even assuming arguendo that the case is one for prohibition, then, under this Court's established policy
relative to the hierarchy of courts, the petition should have been filed with the Regional Trial Court of Cagayan de
Oro City. I find no special or compelling reason why it was not filed with the said court. I do not wish to entertain the
thought that PRYCE doubted a favorable verdict therefrom, in which case the filing of the petition with the Court of
Appeals may have been impelled by tactical considerations. A dismissal of the petition by the Court of Appeals
would have been in order pursuant to our decisions in People vs. Cuaresma (172 SCRA 415, [1989])
and Defensor-Santiago vs. Vasquez (217 SCRA 633 [1993]). In Cuaresma, this Court stated:
A last word. This court's original jurisdiction to issue writs of certiorari (as well as
prohibition, mandamus, quo warranto, habeas corpus and injunction) is not exclusive. It is shared
by this Court with Regional Trial Courts (formerly Courts of First Instance), which may issue the
writ, enforceable in any part of their respective regions. It is also shared by this court, and by the
Regional Trial Court, with the Court of Appeals (formerly, Intermediate Appellate Court), although
prior to the effectivity of Batas Pambansa Bilang 129 on August 14, 1981, the latter's competence
to issue the extraordinary writs was restricted by those "in aid of its appellate jurisdiction." This
concurrence of jurisdiction is not, however, to be taken as according to parties seeking any of the
writs an absolute, unrestrained freedom of choice of the court to which application therefor will be
directed. There is after all a hierarchy of courts. That hierarchy is determinative of the revenue of
appeals, and should also serve as a general determinant of the appropriate forum for petitions for
the extraordinary writs. A becoming regard for that judicial hierarchy most certainly indicates that
50
petitions for the issuance of extraordinary writs against first level ("inferior") courts should be filed
with the Regional Trial Court, and those against the latter, with the Court of Appeals. A direct
Page
invocation of the Supreme Court's original jurisdiction to issue these writs should be allowed only
when there are special and important reasons therefor, clearly and specifically set out in the
petition. This is established policy. It is a policy that is necessary to prevent inordinate demands
upon the Court's time and attention which are better devoted to those matters within its exclusive
jurisdiction, and to prevent further over-crowding of the Court's docket. Indeed, the removal of the
restriction of the jurisdiction of the Court of Appeals in this regard, supra — resulting from the
deletion of the qualifying phrase, "in aid of its appellate jurisdiction" — was evidently intended
precisely to relieve this Court pro tanto of the burden of dealing with applications for extraordinary
writs which, but for the expansion of the Appellate Court's corresponding jurisdiction, would have
had to be filed with it. (citations omitted)
And in Vasquez, this Court said:
One final observation. We discern in the proceedings in this case a propensity on the part of
petitioner, and, for that matter, the same may be said of a number of litigants who initiate recourses
before us, to disregard the hierarchy of courts in our judicial system by seeking relief directly from
this Court despite the fact that the same is available in the lower courts in the exercise of their
original or concurrent jurisdiction, or is even mandated by law to be sought therein. This practice
must be stopped, not only because of the imposition upon the previous time of this Court but also
because of the inevitable and resultant delay, intended or otherwise, in the adjudication of the case
which often has to be remanded or referred to the lower court as the proper forum under the rules
of procedure, or as better equipped to resolve the issues since this Court is not a trier of facts. We,
therefore, reiterate the judicial policy that this Court will not entertain direct resort to it unless the
redress desired cannot be obtained in the appropriate courts or where exceptional and compelling
circumstances justify availment of a remedy within and calling for the exercise of our primary
jurisdiction.
II.
The challenged ordinances are (a) Ordinance No. 3353 entitled, "An Ordinance Prohibiting the Issuance of
Business Permit and Canceling Existing Business Permit To Any Establishment for the Using and Allowing to be
Used Its Premises or Portion Thereof for the Operation of Casino," and (b) Ordinance No. 3375-93 entitled, "An
Ordinance Prohibiting the Operation of Casino and Providing Penalty for Violation Therefor." They were enacted to
implement Resolution No. 2295 entitled, "Resolution Declaring As a Matter of Policy to Prohibit and/or Not to Allow
the Establishment of the Gambling Casino in the City of Cagayan de Oro," which was promulgated on 19
November 1990 — nearly two years before PRYCE and PAGCOR entered into a contract of lease under which the
latter leased a portion of the former's Pryce Plaza Hotel for the operation of a gambling casino — which resolution
was vigorously reiterated in Resolution No. 2673 of 19 October 1992.
The challenged ordinances were enacted pursuant to the Sangguniang Panglungsod's express powers conferred
by Section 458, paragraph (a), subparagraphs (1)-(v), (3)-(ii), and (4)-(i), (iv), and (vii), Local Government Code,
and pursuant to its implied power under Section 16 thereof (the general welfare clause) which reads:
Sec. 16. General Welfare. — Every local government unit shall exercise the powers expressly
inhabitants.
The issue that necessarily arises is whether in granting local governments (such as the City of Cagayan de Oro)
the above powers and functions, the Local Government Code has, pro tanto, repealed P.D. No. 1869 insofar as
PAGCOR's general authority to establish and maintain gambling casinos anywhere in the Philippines is concerned.
I join the majority in holding that the ordinances cannot repeal P.D. No. 1869.
III.
The nullification by the Court of Appeals of the challenged ordinances as unconstitutional primarily because it is in
contravention to P.D. No. 1869 is unwarranted. A contravention of a law is not necessarily a contravention of the
constitution. In any case, the ordinances can still stand even if they be conceded as offending P.D. No. 1869. They
can be reconciled, which is not impossible to do. So reconciled, the ordinances should be construed as not
applying to PAGCOR.
IV.
From the pleadings, it is obvious that the government and the people of Cagayan de Oro City are, for obvious
reasons, strongly against the opening of the gambling casino in their city. Gambling, even if legalized, would be
inimical to the general welfare of the inhabitants of the City, or of any place for that matter. The PAGCOR, as a
government-owned corporation, must consider the valid concerns of the people of the City of Cagayan de Oro and
should not impose its will upon them in an arbitrary, if not despotic, manner.

# Separate Opinions
51
I concur with the majority holding that the city ordinances in question cannot modify much less repeal PAGCOR's
general authority to establish and maintain gambling casinos anywhere in the Philippines under Presidential
Page
Decree No. 1869.

In Basco v. Philippine Amusement and Gaming Corporation (PAGCOR), 197 SCRA 52, I stated in a separate
opinion that:
. . . I agree with the decision insofar as it holds that the prohibition, control, and regulation of the
entire activity known as gambling properly pertain to "state policy". It is, therefore, the political
departments of government, namely, the legislative and the executive that should decide on what
government should do in the entire area of gambling, and assume full responsibility to the people
for such policy. (emphasis supplied)
However, despite the legality of the opening and operation of a casino in Cagayan de Oro City by respondent
PAGCOR, I wish to reiterate my view that gambling in any form runs counter to the government's own efforts to re-
establish and resurrect the Filipino moral character which is generally perceived to be in a state of continuing
erosion.
It is in the light of this alarming perspective that I call upon government to carefully weigh the advantages and
disadvantages of setting up more gambling facilities in the country.
That the PAGCOR contributes greatly to the coffers of the government is not enough reason for setting up more
gambling casinos because, undoubtedly, this will not help improve, but will cause a further deterioration in the
Filipino moral character.
It is worth remembering in this regard that, 1) what is legal is not always moral and 2) the ends do not always justify
the means.
As in Basco, I can easily visualize prostitution at par with gambling. And yet, legalization of the former will not
render it any less reprehensible even if substantial revenue for the government can be realized from it. The same is
true of gambling.
In the present case, it is my considered view that the national government (through PAGCOR) should re-examine
and re-evaluate its decision of imposing the gambling casino on the residents of Cagayan de Oro City; for it is
abundantly clear that public opinion in the city is very much against it, and again the question must be seriously
deliberated: will the prospects of revenue to be realized from the casino outweigh the further destruction of the
Filipino sense of values?
DAVIDE, JR., J., concurring:
While I concur in part with the majority, I wish, however, to express my views on certain aspects of this case.
I.
It must at once be noted that private respondent Pryce Properties Corporation (PRYCE) directly filed with the Court
of Appeals its so-called petition for prohibition, thereby invoking the said court's original jurisdiction to issue writs of
prohibition under Section 9(1) of B.P. Blg. 129. As I see it, however, the principal cause of action therein is one for
declaratory relief: to declare null and unconstitutional — for, inter alia, having been enacted without or in excess of
jurisdiction, for impairing the obligation of contracts, and for being inconsistent with public policy — the challenged
ordinances enacted by the Sangguniang Panglungsod of the City of Cagayan de Oro. The intervention therein of
public respondent Philippine Amusement and Gaming Corporation (PAGCOR) further underscores the "declaratory
relief" nature of the action. PAGCOR assails the ordinances for being contrary to the non-impairment and equal
protection clauses of the Constitution, violative of the Local Government Code, and against the State's national
policy declared in P.D. No. 1869. Accordingly, the Court of Appeals does not have jurisdiction over the nature of the
action. Even assuming arguendo that the case is one for prohibition, then, under this Court's established policy
relative to the hierarchy of courts, the petition should have been filed with the Regional Trial Court of Cagayan de
Oro City. I find no special or compelling reason why it was not filed with the said court. I do not wish to entertain the
thought that PRYCE doubted a favorable verdict therefrom, in which case the filing of the petition with the Court of
Appeals may have been impelled by tactical considerations. A dismissal of the petition by the Court of Appeals
would have been in order pursuant to our decisions in People vs. Cuaresma (172 SCRA 415, [1989])
and Defensor-Santiago vs. Vasquez (217 SCRA 633 [1993]). In Cuaresma, this Court stated:
A last word. This court's original jurisdiction to issue writs of certiorari (as well as
prohibition, mandamus, quo warranto, habeas corpus and injunction) is not exclusive. It is shared
by this Court with Regional Trial Courts (formerly Courts of First Instance), which may issue the
writ, enforceable in any part of their respective regions. It is also shared by this court, and by the
Regional Trial Court, with the Court of Appeals (formerly, Intermediate Appellate Court), although
prior to the effectivity of Batas Pambansa Bilang 129 on August 14, 1981, the latter's competence
to issue the extraordinary writs was restricted by those "in aid of its appellate jurisdiction." This
concurrence of jurisdiction is not, however, to be taken as according to parties seeking any of the
writs an absolute, unrestrained freedom of choice of the court to which application therefor will be
directed. There is after all a hierarchy of courts. That hierarchy is determinative of the revenue of
appeals, and should also serve as a general determinant of the appropriate forum for petitions for
the extraordinary writs. A becoming regard for that judicial hierarchy most certainly indicates that
petitions for the issuance of extraordinary writs against first level ("inferior") courts should be filed
with the Regional Trial Court, and those against the latter, with the Court of Appeals. A direct
invocation of the Supreme Court's original jurisdiction to issue these writs should be allowed only
when there are special and important reasons therefor, clearly and specifically set out in the
petition. This is established policy. It is a policy that is necessary to prevent inordinate demands
upon the Court's time and attention which are better devoted to those matters within its exclusive
jurisdiction, and to prevent further over-crowding of the Court's docket. Indeed, the removal of the
restriction of the jurisdiction of the Court of Appeals in this regard, supra — resulting from the
deletion of the qualifying phrase, "in aid of its appellate jurisdiction" — was evidently intended
52
precisely to relieve this Court pro tanto of the burden of dealing with applications for extraordinary
writs which, but for the expansion of the Appellate Court's corresponding jurisdiction, would have
Page
had to be filed with it. (citations omitted)

And in Vasquez, this Court said:
One final observation. We discern in the proceedings in this case a propensity on the part of
petitioner, and, for that matter, the same may be said of a number of litigants who initiate recourses
before us, to disregard the hierarchy of courts in our judicial system by seeking relief directly from
this Court despite the fact that the same is available in the lower courts in the exercise of their
original or concurrent jurisdiction, or is even mandated by law to be sought therein. This practice
must be stopped, not only because of the imposition upon the previous time of this Court but also
because of the inevitable and resultant delay, intended or otherwise, in the adjudication of the case
which often has to be remanded or referred to the lower court as the proper forum under the rules
of procedure, or as better equipped to resolve the issues since this Court is not a trier of facts. We,
therefore, reiterate the judicial policy that this Court will not entertain direct resort to it unless the
redress desired cannot be obtained in the appropriate courts or where exceptional and compelling
circumstances justify availment of a remedy within and calling for the exercise of our primary
jurisdiction.
II.
The challenged ordinances are (a) Ordinance No. 3353 entitled, "An Ordinance Prohibiting the Issuance of
Business Permit and Canceling Existing Business Permit To Any Establishment for the Using and Allowing to be
Used Its Premises or Portion Thereof for the Operation of Casino," and (b) Ordinance No. 3375-93 entitled, "An
Ordinance Prohibiting the Operation of Casino and Providing Penalty for Violation Therefor." They were enacted to
implement Resolution No. 2295 entitled, "Resolution Declaring As a Matter of Policy to Prohibit and/or Not to Allow
the Establishment of the Gambling Casino in the City of Cagayan de Oro," which was promulgated on 19
November 1990 — nearly two years before PRYCE and PAGCOR entered into a contract of lease under which the
latter leased a portion of the former's Pryce Plaza Hotel for the operation of a gambling casino — which resolution
was vigorously reiterated in Resolution No. 2673 of 19 October 1992.
The challenged ordinances were enacted pursuant to the Sangguniang Panglungsod's express powers conferred
by Section 458, paragraph (a), subparagraphs (1)-(v), (3)-(ii), and (4)-(i), (iv), and (vii), Local Government Code,
and pursuant to its implied power under Section 16 thereof (the general welfare clause) which reads:
Sec. 16. General Welfare. — Every local government unit shall exercise the powers expressly
inhabitants.
The issue that necessarily arises is whether in granting local governments (such as the City of Cagayan de Oro)
the above powers and functions, the Local Government Code has, pro tanto, repealed P.D. No. 1869 insofar as
PAGCOR's general authority to establish and maintain gambling casinos anywhere in the Philippines is concerned.
I join the majority in holding that the ordinances cannot repeal P.D. No. 1869.
III.
The nullification by the Court of Appeals of the challenged ordinances as unconstitutional primarily because it is in
contravention to P.D. No. 1869 is unwarranted. A contravention of a law is not necessarily a contravention of the
constitution. In any case, the ordinances can still stand even if they be conceded as offending P.D. No. 1869. They
can be reconciled, which is not impossible to do. So reconciled, the ordinances should be construed as not
applying to PAGCOR.
IV.
From the pleadings, it is obvious that the government and the people of Cagayan de Oro City are, for obvious
reasons, strongly against the opening of the gambling casino in their city. Gambling, even if legalized, would be
inimical to the general welfare of the inhabitants of the City, or of any place for that matter. The PAGCOR, as a
government-owned corporation, must consider the valid concerns of the people of the City of Cagayan de Oro and
should not impose its will upon them in an arbitrary, if not despotic, manner.
53
Page
G.R. No. L-23964 June 1, 1966
GREGORIO V. GAERLAN, JR., petitioner and appellee,
vs.
LUIS C. CATUBIG, respondent and appellant.
D. C. Macaraeg, T. Guadiz, Jr., R. Hidalgo and N. F. Calimlim for petitioner and appellee.
Santos D. Areola for respondent and appellant.
SANCHEZ, J.:
Registered candidates for councilors, amongst others in the eight-seat City Council of Dagupan City — in the 1963
elections — were petitioner Gregorio V. Gaerlan, Jr. and respondent Luis C. Catubig. Having obtained the third
highest number of votes, the City Board of Canvassers, on December 2, 1963, proclaimed respondent Catubig one
of the elected 8 councilors. Petitioner Gaerlan, on the other hand, lost his bid.
Seasonably,1 petitioner went to Court on quo warranto to challenge respondent's eligibility2 for the office, on the
averment of non-age. The judgment below gave the nod to petitioner and held respondent ineligible to hold the
office of councilor of Dagupan City, excluded him there from, and declared vacant the seat he occupies in the City
Board. Respondent appealed.
There is no quarrel as to the facts. Respondent Catubig was born in Dagupan City on May 19, 1939. At the time he
presented his certificate of candidacy on September 10, 1963, he was 24 years, 3 months and 22 days; on election
day, November 12, 1963, he was 24 years, 5 months and 24 days; and at the time he took his oath of office as
councilor on January 1, 1964,3 he was 24 years, 7 months and 13 days. Whether respondent's age be reckoned as
of the date of the filing of his certificate of candidacy, or the date of election,4 or the date set by law for the
assumption of office — the result is the same. Whichever date is adopted, still, respondent was below 25 years of
age.
With the foregoing backdrop, respondent calls upon us to resolve two questions: First, has petitioner a cause of
action against respondent? Second, in the affirmative, is respondent eligible to the office of councilor of Dagupan
City?
1. The thrust of respondent's argument is simply this: Petitioner Gaerlan, Jr. placed 16th out of the 16 candidates;
Gaerlan thus has no right to the office, either by election or otherwise; and said petitioner cannot validly question
respondent's right to sit.
This case calls into question the applicability of Section 173 of the Revised Election Code5 which, in part, reads:
Procedure against an ineligible person. — When a person who is not eligible is elected to a provincial or
municipal office, his right to the office may be contested by any registered candidate for the same office
before the Court of First Instance of the province, within one week after the proclamation of his election, by
filing a petition for quo warranto. ...
The language of this statute is very plain. The right of a non-eligible person elected to a municipal office may be
contested by any registered candidate for the same office. Petitioner perfectly fits into this legal precept. He was a
registered candidate for the same office. It matters not that he has no claim or right to the office of councilor in the
event respondent be ousted. Because the clear-cut language — "any registered candidate for the same office" —
does not require that said candidate, if his quo warranto case prospers, himself occupy that office. Right here, we
find a forbidding obstacle to any other view of the statute. To say otherwise would empty this legal provision of its
obvious contents. Sanchez vs. Del Rosario, supra, is to be read as controlling in the present. There, as here, the
office involved was that of Councilor, the statute under consideration the same Section 173, Revised Election
Code. And again, there as here, petitioner would not sit if the action be successful. This Court there expressly
ruled:
That petitioner would not be entitled to the elective office even if respondent is ordered to vacate the same
is likewise an invalid objection against the institution of this suit, for otherwise, Section 173 of the Revised
Election Code would clearly be rendered nugatory. Under said law, the contestant's right to the office
involved is not contemplated, and thus this Court has repeatedly ruled that respondent's declaration of
ineligibility does not entitle the petitioner to said office (Luison vs. Garcia, G.R. No. L-10981, April 25, 1958;
Llamoso vs. Ferrer, 47 Off. Gaz., No. 2, 727; Calano vs. Cruz, G.R. No. L-6404, January 12, 1954). Yet, in
said rulings, the petitioners have never been considered to be without any legal personality to file the
necessary quo warranto proceedings. We need not conjecture into the philosophy of the law; suffice it to
say that the legislature expressed its intentions very plainly.1äwphï1.ñët
But respondent would want us to apply Section 6 of Rule 66 of the Revised Rules of Court, as follows:
SEC. 6. When an individual may commence such an action. — A person claiming to be entitled to a public
office or position usurped or unlawfully held or exercised by another bring an action in his own name.
Section 6 just quoted is out of focus. Petitioner here is not "claiming to be entitled" to the office of councilor.
Besides, we are unprepared to scuttle the jurisprudence heretofore cited — which is so well buttressed upon law
and reason. Moreover, distinction should be drawn between quo warranto referring to an office filled by election
and quo warranto involving an office held by appointment thus —
... In quo warranto proceedings referring to offices filled by election, what is to be determined is the
eligibility of the candidate elect, while in quo warranto proceedings referring to offices filled by appointment,
what is determined is the legality of the appointment. In the first case when the person elected is ineligible,
the court cannot declare that the candidate occupying the second place has been elected, even if he were
eligible, since the law only authorizes a declaration of election in favor of the person who has obtained a
54
plurality of votes, and has presented his certificate of candidacy. In the second case, the court determines
who has been legally appointed and can and ought to declare who is entitled to occupy the office.6
Page
The foregoing, once again, emphasizes the rule that in quo warranto proceedings referring to offices filled by
election, the only issue is the eligibility of the candidate elected. In such a posture it is beyond debate that the
applicable statute here is Section 173 of the Revised Election Code, the specific law on the subject.
And, petitioner's standing in court is confirmed.
2. Respondent's presses the claim that the question of age-eligibility should be governed by the provisions of
Republic Act 1707 and not by Republic Act 2259.8 For ready reference, we present in parallel columns the two
conflicting legal provisions — on the left side, Section 12, Republic Act No. 170, as amended, and on the right,
Section 6, Republic Act 2259.
Sec. 12 x x x the elective members of the Sec. 6. No person shall be a City Mayor, Vice-
Municipality Board shall be qualified electors of Mayor, or Councilor unless he is at least twenty-
the city, residents therein for at least one year, five years of age, resident of the city for one
and not less than twenty-three years of age. x x x" year prior to his election and is a qualified voter.
Pertinent here it is to state that Republic Act No. 484 amending, inter alia, Section 12 of the Dagupan City Charter,
took effect on June 10, 1950; whereas, Republic Act No. 2259 became law on June 19, 1959 — nine years later.
The problem, cast in legal setting, is whether or not Section 12 should give way to Section 6. On this point the
following reproduced in haec verba from Libarnes vs. Executive Secretary, et al., L-21505, October 24, 1963, is an
authoritative expositor of the law, viz:
Again, the question whether or not a special law has been repealed or amended by one or more
subsequent general laws is dependent mainly upon the intent of Congress in enacting the latter. The
discussions on the floor of Congress show beyond doubt that its members intended to amend or repeal all
provisions of special laws inconsistent with the provisions of Republic Act No. 2259, except those which
are expressly excluded from the operation thereof. In fact, the explanatory note to Senate Bill No. 2, which
upon approval, became Republic Act No. 2259, specifically mentions Zamboanga City, among others that
had been considered by the authors of the bill in drafting the same. Similarly, Section 1 of Republic Act No.
2259 makes reference to "all chartered cities in the Philippines", whereas Section 8 excludes from the
operation of the Act "the cities of Manila, Cavite, Trece Martires and Tagaytay", and Section 4 contains a
proviso exclusively for the City of Baguio, thus showing clearly that all cities not particularly excepted from
the provisions of said Act — including therefor, the City of Zamboanga — are subject thereto.9
The only reference to Dagupan City in Republic Act 2259 is found in Section 2 thereof whereunder voters in said
city, and in the City of Iloilo, are expressly precluded to vote for provincial officials. Therefore, by the terms of the
Libarnes decision, the age-limit provision in the last-named statute (Republic Act 2259) is controlling.
Indeed, we find no warrant in logic to go along with respondent. Adverting to Libarnes, supra, Act 2259 (Section 8)
excludes from the operation thereof a number of cities. Dagupan City is not one of them. We are not to enter into
the impermissible field of injecting into a statute a provision plainly omitted therefrom. And until Congress decrees
otherwise, we are not to tamper with the present statutory set-up. Rather, we should go by what the legislative body
has expressly ordained.
And, this position we take here is accentuated by the fact that by Section 9 of Act 2259,
All Acts or parts of Acts, Executive Orders, rules and regulations inconsistent with the provisions of this Act,
are hereby repealed.
Given the fact that Dagupan City beyond peradventure is removed from the exceptions, it stands to reason itself
that its charter provision on the age limit is thereby repealed. And this, because "the last statute is so broad in its
terms and so clear and explicit in its words so as to show that it was intended to cover the whole subject, and
therefore to displace the prior statute." 10
Specifically with reference to the uniform age limit of 25 years set forth in Section 6 of Republic Act 2259, we take
stock of the phraseology employed. This section starts with "No person shall be ... Councilor unless he is at least
twenty-five years of age". This specific language gives us added reason to believe that in reality — and for the sake
of uniformity — the 23-year age limit in the Dagupan City Charter must have to yield. Because in the legislative
scheme, councilors are conferred the right to succeed the City Mayor in the event the Vice-Mayor is
Unavailable. 11 The City Mayor must at least be 25 years of age. 12 So it is, that in the event a councilor 23 years of
age is elected and before 25 years catapulted to the position of mayor, then we have the anomalous situation
where the person succeeding as mayor will be less than 25 years. Such a situation, it seems to us, is not
contemplated by the law.
With the foregoing guideposts, we are unable to subscribe to the view that respondent's age qualification should be
governed by the provisions of the Dagupan City Charter.
We, accordingly, hold that respondent is disqualified on the ground of non-age: Because at the time he filed his
certificate of candidacy, at the time of the election, and at the time he took his oath of office, he was below the age
of 25 years.
Upon the law and the facts, we vote to affirm the appealed judgment. No costs allowed. So ordered.
Bengzon, C.J., Concepcion, Reyes, J.B.L., Barrera, Dizon, Regala, Makalintal, Bengzon, J.P. and Zaldivar, JJ.,
concur.
55
Page
G.R. No. L-23052 January 29, 1968

CITY OF MANILA, petitioner, vs.
GENARO N. TEOTICO and COURT OF APPEALS, respondents.
City Fiscal Manuel T. Reyes for petitioner. Sevilla, Daza and Associates for respondents.
CONCEPCION, C.J.:
Appeal by certiorari from a decision of the Court of Appeals.
On January 27, 1958, at about 8:00 p.m., Genaro N. Teotico was at the corner of the Old Luneta and P. Burgos
Avenue, Manila, within a "loading and unloading" zone, waiting for a jeepney to take him down town. After waiting
for about five minutes, he managed to hail a jeepney that came along to a stop. As he stepped down from the curb
to board the jeepney, and took a few steps, he fell inside an uncovered and unlighted catch basin or manhole on P.
Burgos Avenue. Due to the fall, his head hit the rim of the manhole breaking his eyeglasses and causing broken
pieces thereof to pierce his left eyelid. As blood flowed therefrom, impairing his vision, several persons came to his
assistance and pulled him out of the manhole. One of them brought Teotico to the Philippine General Hospital,
where his injuries were treated, after which he was taken home. In addition to the lacerated wound in his left upper
eyelid, Teotico suffered contusions on the left thigh, the left upper arm, the right leg and the upper lip apart from an
abrasion on the right infra-patella region. These injuries and the allergic eruption caused by anti-tetanus injections
administered to him in the hospital, required further medical treatment by a private practitioner who charged
therefor P1,400.00.
As a consequence of the foregoing occurrence, Teotico filed, with the Court of First Instance of Manila, a complaint
— which was, subsequently, amended — for damages against the City of Manila, its mayor, city engineer, city
health officer, city treasurer and chief of police. As stated in the decision of the trial court, and quoted with approval
by the Court of Appeals,
At the time of the incident, plaintiff was a practicing public accountant, a businessman and a professor at the University of
the East. He held responsible positions in various business firms like the Philippine Merchandising Co., the A.U. Valencia
and Co., the Silver Swan Manufacturing Company and the Sincere Packing Corporation. He was also associated with
several civic organizations such as the Wack Wack Golf Club, the Chamber of Commerce of the Philippines, Y's Men Club
of Manila and the Knights of Rizal. As a result of the incident, plaintiff was prevented from engaging in his customary
occupation for twenty days. Plaintiff has lost a daily income of about P50.00 during his incapacity to work. Because of the
incident, he was subjected to humiliation and ridicule by his business associates and friends. During the period of his
treatment, plaintiff was under constant fear and anxiety for the welfare of his minor children since he was their only
support. Due to the filing of this case, plaintiff has obligated himself to pay his counsel the sum of P2,000.00.
On the other hand, the defense presented evidence, oral and documentary, to prove that the Storm Drain Section, Office
of the City Engineer of Manila, received a report of the uncovered condition of a catchbasin at the corner of P. Burgos and
Old Luneta Streets, Manila, on January 24, 1958, but the same was covered on the same day (Exhibit 4); that again the
iron cover of the same catch basin was reported missing on January 30, 1958, but the said cover was replaced the next
day (Exhibit 5); that the Office of the City Engineer never received any report to the effect that the catchbasin in question
was not covered between January 25 and 29, 1968; that it has always been a policy of the said office, which is charged
with the duty of installation, repair and care of storm drains in the City of Manila, that whenever a report is received from
whatever source of the loss of a catchbasin cover, the matter is immediately attended to, either by immediately replacing
the missing cover or covering the catchbasin with steel matting that because of the lucrative scrap iron business then
prevailing, stealing of iron catchbasin covers was rampant; that the Office of the City Engineer has filed complaints in court
resulting from theft of said iron covers; that in order to prevent such thefts, the city government has changed the position
and layout of catchbasins in the City by constructing them under the sidewalks with concrete cement covers and openings
on the side of the gutter; and that these changes had been undertaken by the city from time to time whenever funds were
available.
After appropriate proceedings the Court of First Instance of Manila rendered the aforementioned decision
sustaining the theory of the defendants and dismissing the amended complaint, without costs.
On appeal taken by plaintiff, this decision was affirmed by the Court of Appeals, except insofar as the City of Manila
is concerned, which was sentenced to pay damages in the aggregate sum of P6,750.00. 1 Hence, this appeal by the
City of Manila.
The first issue raised by the latter is whether the present case is governed by Section 4 of Republic Act No. 409
(Charter of the City of Manila) reading:
The city shall not be liable or held for damages or injuries to persons or property arising from the failure of
the Mayor, the Municipal Board, or any other city officer, to enforce the provisions of this chapter, or any
other law or ordinance, or from negligence of said Mayor, Municipal Board, or other officers while enforcing
or attempting to enforce said provisions.
or by Article 2189 of the Civil Code of the Philippines which provides:
Provinces, cities and municipalities shall be liable for damages for the death of, or injuries suffered by, any
person by reason of defective conditions of road, streets, bridges, public buildings, and other public works
under their control or supervision.
Manila maintains that the former provision should prevail over the latter, because Republic Act 409, is a special
law, intended exclusively for the City of Manila, whereas the Civil Code is a general law, applicable to the entire
Philippines.
The Court of Appeals, however, applied the Civil Code, and, we think, correctly. It is true that, insofar as its
territorial application is concerned, Republic Act No. 409 is a special law and the Civil Code a general legislation;
but, as regards the subject-matter of the provisions above quoted, Section 4 of Republic Act 409 establishes a
general rule regulating the liability of the City of Manila for: "damages or injury to persons or property arising from
the failure of" city officers "to enforce the provisions of" said Act "or any other law or ordinance, or from negligence"
of the city "Mayor, Municipal Board, or other officers while enforcing or attempting to enforce said provisions." Upon
56
the other hand, Article 2189 of the Civil Code constitutes a particular prescription making "provinces, cities and
municipalities . . . liable for damages for the death of, or injury suffered by any person by reason" — specifically —
Page
"of the defective condition of roads, streets, bridges, public buildings, and other-public works under their control or
supervision." In other words, said section 4 refers to liability arising from negligence, in general, regardless of the
object thereof, whereas Article 2189 governs liability due to "defective streets," in particular. Since the present
action is based upon the alleged defective condition of a road, said Article 2189 is decisive thereon.
It is urged that the City of Manila cannot be held liable to Teotico for damages: 1) because the accident involving
him took place in a national highway; and 2) because the City of Manila has not been negligent in connection
therewith.
As regards the first issue, we note that it is based upon an allegation of fact not made in the answer of the City.
Moreover, Teotico alleged in his complaint, as well as in his amended complaint, that his injuries were due to the
defective condition of a street which is "under the supervision and control" of the City. In its answer to the amended
complaint, the City, in turn, alleged that "the streets aforementioned were and have been constantly kept in good
condition and regularly inspected and the storm drains and manholes thereof covered by the defendant City and
the officers concerned" who "have been ever vigilant and zealous in the performance of their respective functions
and duties as imposed upon them by law." Thus, the City had, in effect, admitted that P. Burgos Avenue was and
is under its control and supervision.
Moreover, the assertion to the effect that said Avenue is a national highway was made, for the first time, in its
motion for reconsideration of the decision of the Court of Appeals. Such assertion raised, therefore, a question of
fact, which had not been put in issue in the trial court, and cannot be set up, for the first time, on appeal, much less
after the rendition of the decision of the appellate court, in a motion for the reconsideration thereof.
At any rate, under Article 2189 of the Civil Code, it is not necessary for the liability therein established to attach that
the defective roads or streets belong to the province, city or municipality from which responsibility is exacted. What
said article requires is that the province, city or municipality have either "control or supervision" over said street or
road. Even if P. Burgos Avenue were, therefore, a national highway, this circumstance would not necessarily
detract from its "control or supervision" by the City of Manila, under Republic Act 409. In fact Section 18(x) thereof
provides:
Sec. 18. Legislative powers. — The Municipal Board shall have the following legislative powers:
xxx xxx xxx
(x) Subject to the provisions of existing law to provide for the laying out, construction and improvement, and to regulate
the use of streets, avenues, alleys, sidewalks, wharves, piers, parks, cemeteries, and other public places; to provide for
lighting, cleaning, and sprinkling of streets and public places; . . . to provide for the inspection of, fix the license fees for
and regulate the openings in the same for the laying of gas, water, sewer and other pipes, the building and repair of
tunnels, sewers, and drains, and all structures in and under the same and the erecting of poles and the stringing of wires
therein; to provide for and regulate cross-works, curbs, and gutters therein, . . . to regulate traffic and sales upon the
streets and other public places; to provide for the abatement of nuisances in the same and punish the authors or owners
thereof; to provide for the construction and maintenance, and regulate the use, of bridges, viaducts and culverts; to
prohibit and regulate ball playing, kite-flying, hoop rolling, and other amusements which may annoy persons using the
streets and public places, or frighten horses or other animals; to regulate the speed of horses and other animals, motor
and other vehicles, cars, and locomotives within the limits of the city; to regulate the lights used on all vehicles, cars, and
locomotives; . . . to provide for and change the location, grade, and crossing of railroads, and compel any such railroad
to raise or lower its tracks to conform to such provisions or changes; and to require railroad companies to fence their
property, or any part thereof, to provide suitable protection against injury to persons or property, and to construct and
repair ditches, drains, sewers, and culverts along and under their tracks, so that the natural drainage of the streets and
adjacent property shall not be obstructed.
This authority has been neither withdrawn nor restricted by Republic Act No. 917 and Executive Order No. 113,
dated May 2, 1955, upon which the City relies. Said Act governs the disposition or appropriation of the highway
funds and the giving of aid to provinces, chartered cities and municipalities in the construction of roads and streets
within their respective boundaries, and Executive Order No. 113 merely implements the provisions of said Republic
Act No. 917, concerning the disposition and appropriation of the highway funds. Moreover, it provides that "the
construction, maintenance and improvement of national primary, national secondary and national aid provincial and
city roads shall be accomplished by the Highway District Engineers and Highway City Engineers under the
supervision of the Commissioner of Public Highways and shall be financed from such appropriations as may be
authorized by the Republic of the Philippines in annual or special appropriation Acts."
Then, again, the determination of whether or not P. Burgos Avenue is under the control or supervision of the City of
Manila and whether the latter is guilty of negligence, in connection with the maintenance of said road, which were
decided by the Court of Appeals in the affirmative, is one of fact, and the findings of said Court thereon are not
subject to our review.
WHEREFORE, the decision appealed from should be as it is hereby affirmed, with costs against the City of Manila.
It is so ordered.1äwphï1.ñët
Reyes, J.B.L., Dizon, Makalintal, Bengzon, J.P., Zaldivar, Sanchez, Castro, Angeles and Fernando, JJ., concur.
57
Page
G.R. No. 127708 March 25, 1999

CITY GOVERNMENT OF SAN PABLO, LAGUNA, CITY TREASURER OF SAN PABLO, LAGUNA and THE
SANGGUNIANG PANGLUNSOD OF SAN PABLO, LAGUNA, petitioners,
vs.
HONORABLE BIENVENIDO V. REYES, in his capacity as Presiding Judge, Regional Trial Court, Branch 29,
San Pablo City and the MANILA ELECTRIC COMPANY, respondents.

GONZAGA-REYES, J.:
This is a petition under Rule 45 of the Rules of Court to review on a pure question of law the decision of the
Regional Trial Court (RTC) of San Pablo City, Branch 29 in Civil Case No. SP-4359(96), entitled "Manila Electric
Company vs. City of San Pablo, Laguna, City Treasurer of San Pablo Laguna, and the Sangguniang Panglunsod of
San Pablo City, Laguna." The RTC declared the imposition of a franchise tax under Section 2.09 Article D of
Ordinance No. 56 otherwise known as the Revenue Code of the City of San Pablo as ineffective and void insofar
as the respondent MERALCO is concerned for being violative of Act No. 3648, Republic Act No. 2340 and PD 551.
The RTC also granted MERALCO'S claim for refund of franchise taxes paid under protest.
The following antecedent facts are undisputed:
Act No. 3648 granted the Escudero Electric Service Company a legislative franchise to maintain and operate an
electric light and power system in the City of San Pablo and nearby municipalities. Section 10 of Act No. 3648
provides:
. . . In consideration of the franchise and rights hereby granted, the grantee shall pay unto the
municipal treasury of each municipality in which it is supplying electric current to the public under
this franchise, a tax equal to two percentum of the gross earnings from electric current sold or
supplied under this franchise in each said municipality. Said tax shall be due and payable quarterly
and shall be in lieu of any and all taxes of any kind nature or description levied, established or
collected by any authority whatsoever, municipal, provincial or insular, now or in the future, on its
poles, wires, insulator, switches, transformers, and structures, installations, conductors, and
accessories placed in and over and under all public property, including public streets and
highways, provincial roads, bridges and public squares, and on its franchise, rights. privileges,
receipts, revenues and profits from which taxes the grantee is hereby expressly exempted.
Escudero's franchise was transferred to the plaintiff (herein respondent) MERALCO under Republic Act No. 2340.
Presidential Decree No. 551 was enacted on September 11, 1974. Section 1 thereof provides the following:
Sec. 1. Any provision of law or local ordinance to the contrary notwithstanding, the franchise tax
payable by all grantees of franchise to generate, distribute and sell electric current for light, heat
and power shall be two percent (2%) of their gross receipts received from the sale of electric
current and from transactions incident to the generation, distribution and sale of electric current.
Such franchise tax shall be payable to the Commissioner of Internal Revenue of his duly
authorized representative on or before the twentieth day of the month following the end of each
calendar quarter or month as may be provided in the respective franchise or pertinent municipal
regulation and shall, any provision of the Local Tax Code or any other law to the contrary
notwithstanding, be in lieu of all taxes and assessments of whatever nature imposed by any
national or local authority on earnings, receipts, income and privilege of generation, distribution
and sale of electric current.
Republic Act No. 7160, otherwise known as the "Local Government Code of 1991" (hereinafter referred to as LGC)
took effect on January 1, 1992. The said Code authorizes the province/city to impose a tax on business enjoying a
franchise at a rate not exceeding fifty percent (50%) of one percent (1%) of the gross annual receipts for the
preceding calendar year realized within its jurisdiction.
On October 5, 1992, the Sangguniang Panglunsod of San Pablo City enacted Ordinance No. 56, otherwise known
as the Revenue Code of the City of San Pablo. The said Ordinance took effect on October 30, 1992. 1
Sec. 2.09, Article D of said Ordinance provides:
Sec. 2.09. Franchise Tax — There is hereby imposed a tax on business enjoying a franchise, at a
rate of fifty percent (50%) of one percent (1%) of the cross annual receipts, which shall include
both cash sales and sales on account realized during the preceding calendar year within the city.
Pursuant to the above-quoted Section 2.09, the petitioner City Treasurer sent to private respondent a letter
demanding payment of the aforesaid franchise tax. From 1994 to 1996, private respondent paid "under protest" a
total amount of P1,857,711.67. 2
The private respondent subsequently filed this action before the Regional Trial Court to declare Ordinance No. 56
null and void insofar as it imposes the franchise tax upon private respondent MERALCO 3 and to claim for a refund
of the taxes paid.
The Court ruled in favor of MERALCO and upheld its argument that the LGC did not expressly or impliedly repeal
the tax exemption/incentive enjoyed by it under its charter The dispositive portion of the decision reads:
WHEREFORE, the imposition of a franchise tax under Sec. 2.09, Article D of Ordinance No. 56
otherwise known as the Revenue Code of the City of San Pablo, is declared ineffective and null
and void insofar as the plaintiff MERALCO is concerned for being of Republic Act. No. 2340, PD
551, and Republic Act No. 7160 and defendants are ordered to refund to the plaintiff the amount of
ONE MILLION EIGHT HUNDRED FIFTY SEVEN THOUSAND SEVEN HUNDRED ELEVEN &
58
67/100 (P1,857,711.67) and such other amounts as may have been paid by the plaintiff under said
Revenue Ordinance No. 56 after the filling of the complaint. 4
Page
SO ORDERED.
Its motion for records for reconsideration having been denied by the trial court. 5 the petitioners filed the instant
petition with this Court raising pure question of law based on the following grounds:
I. RESPONDENT JUDGE GRAVELY ERRED IN HOLDING THAT ACT NO. 3648,
REPUBLIC ACT NO 2340 AND PRESIDENTIAL DECREE NO. 551, AS
AMENDED, INSOFAR AS THEY GRANT TAX INCENTIVES, PRIVILEGES AND
IMMUNITIES TO PRIVATE RESPONDENT, HAVE NOT BEEN REPEALED BY
REPUBLIC ACT NO. 7160.
II. RESPONDENT JUDGE GRAVELY ERRED IN RULING THAT SECTION 193
OF REPUBLIC ACT NO. 7160 HAS NOT WITHDRAWN THE TAX INCENTIVES,
PRIVILEGES AND IMMUNITIES BEING ENJOYED BY THE PRIVATE
RESPONDENT UNDER ACT NO. 3648 REPUBLIC ACT NO. 2340 AND
PRESIDENTIAL DECREE NO. 551 AS AMENDED.
III. RESPONDENT JUDGE GRAVELY ERRED IN HOLDING THAT THE
FRANCHISE TAX IN QUESTION CONSTITUTES AN IMPAIRMENT OF THE
CONTRACT BETWEEN THE GOVERNMENT AND PRIVATE RESPONDENT.
Petitioners' position is that RA 7160 (LGC) expressly repealed Act No. 3648, Republic Act No. 2340 and
Presidential Decree 551 and that pursuant to the provisions of Sections 137 and 193 of the LGC, the province or
city now has the power to impose a franchise tax on a business enjoying a franchise. Petitioners rely on the ruling
in the case of Mactan Cebu International Airport Authority vs. Marcos 6 where the Supreme Court held that the
exemption from real property tax granted to Mactan Cebu International Airport Authority under its charter has been
withdrawn upon the effectivity of the LGC.
In addition, the petitioners cite in their Memorandum dated December 8, 1993 an administrative interpretation made
by the Bureau of Local Government Finance of the Department of Finance in its 3rd indorsement dated February
15, 1994 to the effect that the earlier ruling of the Department of Finance that holders of franchise which contain the
phrase "in lieu of all taxes" proviso are exempt from the payment of any kind of tax is no longer applicable upon the
effectivity of the LGC in view of the withdrawal of tax exemption privileges as provided in Sections 193 and 234
thereof.
We resolve to reverse the court a quo.
The pivotal issue is whether the City of San Pablo may impose a local franchise tax pursuant to the LGC upon the
Manila Electric Company which pays a tax equal to two percent of its gross receipts in lieu of all taxes and
assessments of whatever nature imposed by any national or local authority on savings or income.
It is necessary to reproduce the pertinent provisions of the LGC.
Sec. 137 — Franchise Tax — Notwithstanding any exemption granted by any law or other special
law, the province may impose a tax on business enjoying a franchise, at a rate not exceeding fifty
percent 50% of one percent 1% of the gross annual receipts for the preceding calendar year based
on the incoming receipts, or realized, within its territorial jurisdiction. . . .
Sec. 151 — Scope of Taxing Powers — Except as otherwise provided in this Code, the city, may
levy the taxes, fees, and charges which the province or municipality may
impose: Provided, however, That the taxes, fees and charges levied and collected by highly
urbanized and independent component cities shall accrue to them and distributed in accordance
with the provisions of this Code.
The rates of taxes that the city may levy may exceed the maximum rates allowed for the province
or municipality by not more than fifty percent (50%) except the rates of professional and
amusement taxes.
Sec. 193 — Withdrawal of Tax Exemption Privileges — Unless otherwise provided in this Code,
tax exemptions or incentives granted to, or presently enjoyed by all persons, whether natural or
juridical, including government-owned or controlled corporations, except local water districts,
cooperatives duly registered under R.A. 6938, non- stock and non-profit hospitals and educational
institutions, are hereby withdrawn upon the effectivity of this Code.
Sec. 534 (f) — Repealing Clause — All general and special law, acts, city charters, decrees,
executive orders, proclamation and administrative regulations, or part or parts thereof which are
inconsistent with any of the provisions of this code are hereby repealed or modified accordingly.
Sec. 534 (f), the repealing clause of the LGC, provides that all general and special laws, act, city charters, decrees,
executive orders, proclamations and administrative regulations or parts thereof which are inconsistent with any of
the provisions of the Code are hereby repealed or modified accordingly.
This clause partakes of the nature of a general repealing clause. 7 It is certainly not an express repealing clause
because it fails to designate the specific act or acts identified by number or title, that are intended to be repealed. 8
Was there an implied repeal by Republic Act No. 7160 of the MERALCO franchise insofar as the latter imposes a
2% tax "in lieu of all taxes and assessments of whatever nature"?
We rule affirmatively.
We are mindful of the established rule that repeals by implication are not favored as laws are presumed to be
passed with deliberation and full knowledge of all laws existing on the subject. A general law cannot be construed
to have repealed a special law by mere implication unless the intent to repeal or alter is manifest 9 and it must be
convincingly demonstrated that the two laws are so clearly repugnant and patently inconsistent that they cannot co-
59
exist. 10
It is our view that petitions correctly rely on the provisions of Sections 137 and 193 of the LGC to support their
Page
position that MERALCO`s tax exemption has been withdrawn. The explicit language of Section 137 which
authorizes the province to impose franchise tax "notwithstanding any exemption granted by any law or other
special law" is all-encompassing and clear. The franchise tax is imposable despite any exemption enjoyed under
special laws.
Sec. 193 buttresses the withdrawal of extant tax exemption privileges. By stating that unless otherwise provided in
this Code, tax exemptions or incentives granted to or presently enjoyed by all persons whether natural or juridical,
including government-owned or controlled corporations except 1) local water districts, 2) cooperatives duly
registered under R.A. 6938, (3) non-stock and non-profit hospitals and educational institutions, are withdrawn upon
the effectivity of this code, the obvious import is to limit the exemptions to the three enumerated entities. It is a
basic precept of statutory construction that the express mention of one person, thing, act, or consequence excludes
all others as expressed in the familiar maxim expressio untus est exclusio alterius. 11 In the absence of any
provision of the Code to the contrary, and we find no other provision in point, any existing tax exemption or
incentive enjoyed by MERALCO under existing law was clearly intended to be withdrawn.
Reading together Sections 137 and 193 of the LGC, we conclude that under the LGC the local government unit
may now impose a local tax at a rate not exceeding 50% of 1% of the gross annual receipts for the preceding
calendar year based on the incoming receipts realized within its territorial jurisdiction. The legislative purpose to
withdraw tax privileges enjoy under existing law or charter is clearly manifested by the language used in Sections
137 end 193 categorically withdrawing such exemption subject only to the exceptions enumerated. Since it would
be not only tedious and impractical to attempt to enumerate all the existing statutes providing for special tax
exemptions or privileges, the LGC provided for an express, albeit general, withdrawal of such exemptions or
privileges. No more unequivocal language could have been used.
It is true that the phrase "in lieu of all taxes" found in special franchises has been held in several cases to exempt
the franchise holder from payment of tax on its corporate franchise imposed of the Internal Revenue Code, as the
charter is in the nature of a private contract and the exemption is part of the inducement for the acceptance of the
franchise, and that the imposition of another franchise tax by the local authority would constitute an impairment of
contract between the government and the corporation. 12 But these "magic words" contained in the phrase "shall be
in lieu of all taxes'' 13 have to give way to the peremptory language of the LGC specifically providing for the
withdrawal of such exemption privileges.
Accordingly in Mactan Cebu International Airport Authority vs.
Marcos. 14 this Court held that Section 193 of the LGC prescribes the general rule, viz., the tax exemption or
incentives, granted to or presently enjoyed by natural or juridical persons are withdrawn upon the effectivity of the
LGC except with respect to those entities expressly enumerated. In the same vein, We must hold that the express
withdrawal upon effectivity of the LGC of all exemptions except only as provided therein, can no longer be invoked
by Meralco to disclaim liability for the local tax.
Private respondents further argue that the "in lieu of" provision contained in PD 551, Act. No. 3648 and RA 2340
does not partake of the nature of an exemption, but is a "commutative tax". This contention was raised but was not
upheld in Cagayan Electric Power and Light Co. Inc. vs. Commissioner of Internal Revenue 15 wherein the
Supreme Court stated:
. . . Congress could impair petitioner's legislative franchise by making it liable for income tax from
which heretofore it was exempted by virtue of the exemption provided for in section 3 of its
franchise . . .
. . . Republic Act No. 5431, in amending section 24 of the Tax Code by subjecting to income tax all
corporate tax payers not expressly exempted therein and in section 27 of the Code, had the effect
of withdrawing petitioner's exemption from income tax . . .
Private respondent's invocation of the non-impairment clause of the Constitution is accordingly unavailing. The
LGC was enacted in pursuance of the constitutional policy to ensure autonomy to local governments16 and to
enable them to attain fullest development as self-reliant communities. 17 Thus in Mactan Cebu International Airport
Authority vs. Marcos, supra, this Court pointed out, in upholding the withdrawal of the real estate tax exemption
previously enjoyed by the Mactan Cebu International Airport Authority, as follows:
Note that as reproduced in Section 234 (a) the phrase ''and any government-owned or controlled
corporation so exempt by its charter" was excluded. The justification for this restricted exemption in
Section 234(a) seems obvious: to limit further tax exemption privileges, especially in light of the
general provision on withdrawal of tax exemption privileges in Section 193 and the special
provision on withdrawal of exemption from payment of real property taxes in the last paragraph of
Section 234. These policy considerations are consistent with the State policy to ensure autonomy
to local governments and the objective of the LGC that they enjoy genuine and meaningful local
autonomy to enable them to attain their fullest development as self-reliant communities and make
them effective partners in the attainment of national goals. The power to tax is the most effective
instrument to raise needed revenues to finance and support myriad activities of local government
units for the delivery of basic services essential to the promotion of the general welfare and the
enhancement of peace, progress, and prosperity of the people. It may also be relevant to recall
that the original reasons for the withdrawal of tax exemption privileges granted to government-
owned or controlled corporations and all other units of government were that such privilege
resulted in serious tax base erosion and distortions in the tax treatment of similarly situated
enterprises, and there was a need for these entities to share in the requirements of development,
fiscal or otherwise, by paying the taxes and other charges due from them. 18
The Court therein concluded that:
nothing can prevent Congress from decreeing that even instrumentalities or agencies of the
Government performing governmental functions may be subject to tax. Where it is done precisely
60
to fulfill a constitutional mandate and national policy, no one can doubt its wisdom. 19
Page
The power to tax is primarily vested in Congress. However, in our jurisdiction, it may be exercised by local
legislative bodies, no longer merely by virtue of a valid delegation as before, but pursuant to direct authority
conferred by Section 5, Article X of the Constitution. 20 Thus Article X, Section 5 of the Constitution reads:
Sec. 5 — Each Local Government unit shall have the power to create its own sources of revenue
and to levy taxes, fees and charges subject to such guidelines and limitations as the Congress
may provide, consistent with the basic policy of local autonomy. Such taxes, fees and charges
shall accrue exclusively to the Local Governments.
The important legal effect of Section 5 is that henceforth, in interpreting statutory provision on municipal
fiscal powers, doubts will have to resolved in favor of municipal corporations. 21
There is further basis for tire conclusion that the non-impairment of contract clause cannot be invoked to uphold
Meralco's exemption from the local tax. Escudero Electric Co. was originally given the legislative franchise under
Act. 3648 to operate an electric light and power system in the City of San Pablo and nearby municipalities. The
term of the franchise under Act. No. 3648 is a period of fifty years from the Act's approval in 1929. The said law
provided that the franchise is granted upon the condition that it shall be subject to amendment, or repeal by the
Congress of the United States. 22 Under the 1935. 23 the 1973 24 and the 1987 25 Constitutions, no franchise or right
shall be granted except under the condition that it shall be subject to amendment, alteration or repeal by the
National Assembly when the public interest so requires. With or without the reservation clause, franchises are
subject to alterations through a reasonable exercise of the police power; they are also subject to alteration by the
power to tax, which like police power cannot be contracted away. 26
Finally, while the matter is not of controlling significance, the Court notes that whereas the original Escudero
franchise exempted the franchise holder from all taxes levied or collected "now or in the future" 27 this phrase is
noticeably omitted in the counterpart provision of P.D. 551; that said omission is intended not to foreclose future
taxes may reasonably be deduced by statutory construction.
WHEREFORE, the instant petition is GRANTED. The decision of the Regional Trial Court of San Pablo City,
appealed from is hereby reversed and set aside and the complaint of MERALCO is hereby DISMISSED.
No pronouncement as to costs.
SO ORDERED.
Romero, Vitug, Panganiban and Purisima, JJ., concur.
61
Page

Court Rules on Suspension of Criminal Case Due to Prejudicial Civil Case

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G.R. No.

L-1560 October 25, 1949

G.R. No. 14129 July 31, 1962

Under Act 1582, Section 29, it was provided:

Central Bank Circular No. 416 reads:

hereby made permanent. No costs.

Melencio-Herrera, Padilla, Regalado and Nocon, JJ., concur

interpretation contended for is thus unwarranted.

UP further narrated in its petition:

6. On 27 October 2006, UP entered into a Contract of Lease with Development Obligations with

9. In a Statement of Delinquency dated 05 December 2012, addressed to the UP North Property

11. In another Statement of Delinquency dated 24 September 2013, addressed to the UP North

On 29 September 2014, we issued a Resolution5 which required the City Treasurer to file a

Petitioner UP raised only one issue before this Court:

We grant the petition.

Timeline of Events and Applicable Laws

Mr. Salvador M. Castillo, Officer-In-Charge, Executive Director of Bureau of Local Government

Tax Exemption from the Local Government Code

In University of the Phils. v. Judge Dizon,33 we stated:

Irrefragably, the UP is a government instrumentality, performing the State's constitutional mandate

WHEREFORE, the petition is GRANTED. We DECLARE the University of the

Perlas-Bernabe, Caguioa, J. Reyes, Jr., and Lazaro-Javier, JJ., concur.

pre-reaping and pre-threshing.

MR. DAVIDE. Yes.

G.R. No. 111097 July 20, 1994

limits in the interest of the general welfare. 5

2) It must not be unfair or oppressive.

4) It must not prohibit but may regulate trade.

Decree No. 1869.

had to be filed with it. (citations omitted)

G.R. No. L-23052 January 29, 1968

G.R. No. 127708 March 25, 1999

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