Professional Documents
Culture Documents
Full-Texts STAT CON PART FIVE Case7-13
Full-Texts STAT CON PART FIVE Case7-13
COMPILATION
PART
5:
INTERPRETATION
OF
WORDS
“May”
(7)
Capati
vs
Ocampo,
G.R.
No.
L-‐28742,
April
30,
1982
We
set
aside
the
order
of
the
Court
of
First
Instance
of
Pampanga
in
Civil
Case
No.
3188
which
dismissed
the
plaintiff's
complaint
on
ground
of
improper
venue.
Plaintiff
Virgilio
Capati
a
resident
of
Bacolor,
Pampanga,
was
the
contractor
of
the
Feati
Bank
for
the
construction
of
its
building
in
Iriga,
Camarines
Sur.
On
May
23,
1967,
plaintiff
entered
into
a
sub-‐contract
with
the
defendant
Dr.
Jesus
Ocampo,
a
resident
of
Naga
City,
whereby
the
latter,
in
consideration
of
the
amount
of
P2,200.00,
undertook
to
construct
the
vault
walls,
exterior
walls
and
columns
of
the
said
Feati
building
in
accordance
with
the
specifications
indicated
therein.
Defendant
further
bound
himself
to
complete
said
construction
on
or
before
June
5,
1967
and,
to
emphasize
this
time
frame
for
the
completion
of
the
construction
job,
defendant
affixed
his
signature
below
the
following
stipulation
written
in
bold
letters
in
the
sub-‐contract:
"TIME
IS
ESSENTIAL,
TO
BE
FINISHED
5
JUNE'
67."
Claiming
that
defendant
finished
the
construction
in
question
only
on
June
20,
1967,
plaintiff
filed
in
the
Court
of
First
Instance
of
Pampanga
an
action
for
recovery
of
consequential
damages
in
the
sum
of
P85,000.00
with
interest,
plus
attorney's
fees
and
costs.
The
complaint
alleged
inter
alia
that
"due
to
the
long
unjustified
delay
committed
by
defendant,
in
open
violation
of
his
express
written
agreement
with
plaintiff,
the
latter
has
suffered
great
irreparable
loss
and
damage
...
"
Defendant
filed
a
motion
to
dismiss
the
complaint
on
the
ground
that
venue
of
action
was
improperly
laid.
The
motion
was
premised
on
the
stipulation
printed
at
the
back
of
the
contract
which
reads:
14.
That
all
actions
arising
out,
or
relating
to
this
contract
may
be
instituted
in
the
Court
of
First
Instance
of
the
City
of
Naga.
Plaintiff
filed
an
opposition
to
the
motion,
claiming
that
their
agreement
to
hold
the
venue
in
the
Court
of
First
Instance
of
Naga
City
was
merely
optional
to
both
contracting
parties.
In
support
thereof,
plaintiff
cited
the
use
of
the
word
"may
"
in
relation
with
the
institution
of
any
action
arising
out
of
the
contract.
The
lower
court,
in
resolving
the
motion
to
dismiss,
ruled
that
"there
was
no
sense
in
providing
the
aforequoted
stipulation,
pursuant
to
Sec.
3
of
Rule
4
of
the
Revised
Rules
of
Court,
if
after
all,
the
parties
are
given
the
discretion
or
option
of
filing
the
action
in
their
respective
residences,"
and
thereby
ordered
the
dismissal
of
the
complaint.
The
rule
on
venue
of
personal
actions
cognizable
by
the
courts
of
first
instance
is
found
in
Section
2
(b),
Rule
4
of
the
Rules
of
Court,
which
provides
that
such
"actions
may
be
commenced
and
tried
where
the
defendant
or
any
of
the
defendants
resides
or
may
be
found,
or
where
the
plaintiff
or
any
of
the
plaintiffs
resides,
at
the
election
of
the
plaintiff."
The
said
section
is
qualified
by
the
following
provisions
of
Section
3
of
the
same
rule:
By
written
agreement
of
the
parties
the
venue
of
an
action
may
be
changed
or
transferred
from
one
province
to
another.
Defendant
stands
firm
on
his
contention
that
because
of
the
aforequoted
covenant
contained
in
par.
14
of
the
contract,
he
cannot
be
sued
in
any
court
except
the
Court
of
First
Instance
of
Naga
City.
We
are
thus
called
upon
to
rule
on
the
issue
as
to
whether
the
stipulation
of
the
parties
on
venue
is
restrictive
in
the
sense
that
any
litigation
arising
from
the
contract
can
be
filed
only
in
the
court
of
Naga
City,
or
merely
permissive
in
that
the
parties
may
submit
their
disputes
not
only
in
Naga
City
but
also
in
the
court
where
the
defendant
or
the
plaintiff
resides,
at
the
election
of
the
plaintiff,
as
provided
for
by
Section
2
(b)
Rule
4
of
the
Rules
of
Court.
It
is
well
settled
that
the
word
"may"
is
merely
permissive
and
operates
to
confer
discretion
upon
a
party.
Under
ordinary
circumstances,
the
term
"may
be"
connotes
possibility;
it
does
not
connote
certainty.
"May"
is
an
1
auxillary
verb
indicating
liberty,
opportunity,
permission
or
possibility.
2
In
Nicolas
vs.
Reparations
Commission
,
a
case
involving
the
interpretation
of
a
stipulation
as
to
venue
along
lines
similar
to
the
present
one,
it
was
held
that
the
agreement
of
the
parties
which
provided
that
"all
legal
actions
arising
out
of
this
contract
...
may
be
brought
in
and
submitted
to
the
jurisdiction
of
the
proper
courts
in
the
City
of
Manila,"
is
not
mandatory.
We
hold
that
the
stipulation
as
to
venue
in
the
contract
in
question
is
simply
permissive.
By
the
said
stipulation,
the
parties
did
not
agree
to
file
their
suits
solely
and
exclusively
with
the
Court
of
First
Instance
of
Naga.
They
merely
agreed
to
submit
their
disputes
to
the
said
court,
without
waiving
their
right
to
seek
recourse
in
the
court
specifically
indicated
in
Section
2
(b),
Rule
4
of
the
Rules
of
Court.
Since
the
complaint
has
been
filed
in
the
Court
of
First
Instance
of
Pampanga,
where
the
plaintiff
resides,
the
venue
of
action
is
properly
laid
in
accordance
with
Section
2
(b),
Rule
4
of
the
Rules
of
Court.
WHEREFORE,
the
order
appealed
from
is
hereby
set
aside.
Let
the
records
be
returned
to
the
court
of
origin
for
further
proceedings.
Costs
against
defendant-‐appellee.
SO ORDERED.
(8)
Philippine
Consumer
vs.
NTC,
G.R.
No.
L-‐63318,
August
18,
1984
I
On
March
2,
1983,
petitioner
filed
the
instant
petition
praying,
among
others,
that
the
decision
of
respondent
NTC
dated
November
22,
1982
and
the
order
dated
January
14,
1983
be
annulled
and
set
aside
on
the
grounds
therein
stated
(pp.
2-‐19,
rec.).
After
the
petitioner,
the
private
respondent,
and
the
Solicitor
General
for
public
respondent
NTC
filed
their
respective
comments
and
memoranda
(pp.
47-‐53,
96-‐106,
109-‐116,
127-‐142,
147-‐164,
206-‐221,
rec.),
on
November
25,
1983,
the
decision
sought
to
be
reconsidered
was
promulgated,
annulling
and
setting
aside
the
challenged
decision
and
order,
respectively
dated
November
22,
1982
and
January
14,
1983
(pp.
225-‐232,
rec.).
Said
decision
is
not
unanimous
as
it
bears
the
concurrence
of
only
9
members
of
this
Court,
while
3
members
took
no
part
and
1
member
reserved
his
vote
(p
232,
rec.)
In
a
resolution
dated
January
10,
1984
and
released
on
January
17,
1984,
the
Court
granted
respondent
PLDT's
motion
for
15-‐day
extension
from
the
expiration
of
the
reglementary
period
within
which
to
file
a
motion
for
reconsideration
(pp.
233,
236,
rec.).
On January 12, 1984, PLDT filed its motion for reconsideration (pp. 237-‐268, rec.).
On February 27, 1984, respondent PLDT filed a motion to admit attached supplemental motion for reconsideration (pp. 281-‐301, rec.).
On
February
27,
1984,
public
respondent
NTC,
thru
the
Solicitor
General,
filed
a
manifestation
and
motion
that
it
is
joining
core,
respondent
PLDT
in
its
motion
for
reconsideration
thereby
adopting
the
same
as
its
own
(pp.
302-‐303,
305-‐306,
rec.).
In
a
resolution
dated
March
1,
1984
and
issued
on
March
2,
1984,
the
Court
admitted
the
supplemental
motion
for
reconsideration
of
PLDT,
noted
the
manifestation
and
motion
of
the
Solicitor
General
for
and
in
behalf
of
respondent
NTC
that
it
is
joining
the
motion
for
reconsideration
of
PLDT
and
adopting
it
as
its
own,
and
required
petitioner
to
convenient
within
10
days
from
notice
on
the
aforesaid
supplemental
motion
for
reconsideration
of
PLDT
(p.
304-‐A,
rec.).
On
March
28,
1984,
petitioner
filed
its
comment
on
respondent's
motion
for
reconsideration
(pp.
310-‐317,
rec.).
In
a
resolution
dated
April
3,
1984
and
issued
on
April
11,
1984,
the
Court
denied
the
motion
for
reconsideration
(p.
318A,
rec.).
On
April
6,
1984,
respondent
PLDT
filed
a
motion
to
strike
out
"discussion
(e)"
in
petitioner's
"comment
on
respondents'
motions"
dated
March
20,
1984
(pp.
319-‐321,
rec.).
In
a
resolution
dated
April
12,
1984
and
issued
on
April
16,
1984,
the
Court
required
petitioner's
counsel
Atty.
Tomas
Llamas
to
comment
within
10
days
from
notice
on
the
aforesaid
motion
to
strike
out
(p.
323,
rec.).
On
April
17,
1984,
respondent
PLDT,
thru
counsel,
filed
a
motion
for
leave
to
file
within
15
days
from
date
a
second
motion
for
reconsideration
(pp.
324-‐326,
rec.).
On
April
27,
1984,
petitioner
filed
an
opposition
to
the
aforesaid
motion
of
PLDT
for
leave
to
file
within
15
days
to
file
a
second
motion
for
reconsideration
(pp.
328-‐330,
rec.).
On May 2, 1984, private respondent PLDT filed a second motion for reconsideration with an annex (pp. 332-‐344, rec.).
In
a
resolution
dated
May
8,
1984
but
issued
on
May
11,
1984,
the
Court
granted
the
motion
of
PLDT
to
file
a
second
motion
for
reconsideration
within
15
days
from
April
16,
1984,
noted
the
opposition
of
petitioner
to
said
motion,
and
required
petitioner
to
comment
within
15
days
from
notice
on
the
aforesaid
second
motion
for
reconsideration
of
PLDT
for
the
reconsideration
of
the
decision
of
November
25,
1983
(p.
345,
rec.).
On May 4, 1984, petitioner filed its comment on the second motion for reconsideration of private respondent (pp. 346-‐350, rec.).
In
a
resolution
dated
May
10,
1984
and
issued
on
May
16,
1984,
the
Court
required
respondents
to
file
a
reply
within
10
days
from
notice
on
the
aforesaid
comment
of
petitioner
on
private
respondent
PLDT's
motion
praying
that
the
discussion
(par.
3)
in
petitioner's
comment
on
the
first
motion
for
reconsideration
and
the
supplemental
motion
for
reconsideration
be
deleted
(p.
352,
rec.).
On
May
21,
1984,
public
respondent
NTC
filed
a
manifestation
joining
private
respondent
PLDT
and
adopting
the
latter's
second
motion
for
reconsideration
(pp.
353-‐354,
rec.),
which
the
Court
granted
in
a
resolution
dated
May
29,
1984
and
issued
on
June
6,
1984
(p.
355-‐A).
On
May
28,1984,
respondent
PLDT
filed
a
motion
for
extension
of
10
days
or
until
June
7,
1984
within
which
to
submit
the
required
reply
in
the
resolution
of
May
10,
1984
and
issued
on
May
16,
1984
(pp.
356-‐357,
rec.),
which
was
granted
in
a
resolution
dated
June
5,
1984
and
issued
on
July
3,
1984
(p.
357-‐A,
rec.).
On
June
1,
1984,
petitioner
filed
its
comment
on
PLDT's
second
motion
for
reconsideration,
with
a
motion
to
declare
final
the
decision
with
respect
to
public
respondent
NTC
(pp.
358362,
rec.).
A
day
before
June
1,
1984,
or
on
May
31,
1984,
private
respondent
PLDT
filed
its
reply
to
petitioner's
"comment
on
motion
of
private
respondent"
dated
May
4,
1984
[motion
to
strike]
(pp.
366-‐369,
rec.).
On
July
16,
1984,
after
its
motions
for
extension
were
granted,
public
respondent
NTC
thru
the
Solicitor
General,
finally
filed
its
reply
(pp.
370-‐371,
372-‐A,
373,
375-‐381,
rec.).
It
should
be
emphasized
that
the
resolution
of
this
Court
dated
April
3,
1984
but
issued
on
April
11,
1984,
denying
the
first
motion
for
reconsideration
did
not
state
that
the
denial
is
final
(see
p.
318-‐A,
rec.).
And
the
motion
of
May
29,
1984
but
filed
on
June
1,
1984
of
petitioner
to
declare
as
final
the
decision
of
November
25,
1983
(which
motion
was
included
in
plaintiff's
comment
on
PLDT's
second
motion
for
reconsideration)
with
respect
to
public
respondent
NTC
(pp.
361-‐362,
rec.),
was
not
acted
upon
by
this
Court,
ostensibly
because
as
early
as
May
21,
1984,
public
respondent
NTC,
thru
the
Solicitor
General,
filed
a
manifestation
that
it
is
joining
private
respondent
PLDT
in
its
second
motion
for
reconsideration
dated
May
18,
1984
and
adopting
it
as
its
own
(pp.
353-‐354,
rec.).
II
It
is
not
disputed
—
and
should
be
emphasized
that
on
August
31,
1982,
this
Court
set
aside
the
NTC
order
dated
April
14,
1982
in
the
case
of
Samuel
Bautista
vs.
NTC,
et
al.
(16
SCRA
411)
provisionally
approving
the
revised
schedule
of
rates
for
the
Subscriber
Investments
Plan,
on
the
ground
that
there
was
necessity
of
a
hearing
by
the
Commission
before
it
could
have
acted
on
the
PLDT
application
for
said
revised
schedule,
to
give
opportunity
to
the
public,
especially
herein
petitioner
and
the
Solicitor
General
to
substantiate
their
objections
to
the
said
schedule
as
excessive
and
unreasonable,
especially
for
the
low-‐income
and
middle-‐income
groups,
which
cannot
afford
telephone
connections
and
that
there
is
no
need
to
increase
the
rate
because
PLDT
is
f inancially
sound.
Thereafter,
in
NTC
Case
No.
82-‐87
entitled
"Re
Philippine
Long
Distance
Telephone
Co.
respondent
NTC
conducted
several
hearings
on
PLDT's
revised
Subscriber
Investments
Plan
schedule
at
which
written
oppositions
were
filed
by
herein
petitioner
PCFI,
the
Solicitor
General,
Atty.
Samuel
Bautista,
Flora
Alabanza,
the
municipality
of
Marikina,
and
the
Integrated
Telecommunications
Suppliers'
Association
of
the
Philippines
(ITESAP).
Other
oppositors
failed
to
file
their
written
oppositions.
The
hearings
on
the
merits
actually
started
on
August
4,
1982
and
continued
for
four
(4)
subsequent
dates.
The
oppositors,
thru
counsel,
thoroughly
cross-‐examined
the
witness
for
the
applicant,
Mr.
Romeo
Sisteban
applicant's
Vice-‐President
for
Budget
and
Financial
Planning.
None
of
the
oppositors
opted
to
present
evidence
but
merely
filed
Memoranda
and
thereafter
manifested
that
the
case
is
submitted
for
decision
Because
PLDT
made
some
concessions
in
favor
of
the
oppositors,
oppositors
ITESAP,
Eastern
Telecommunications,
Inc.,
Philippine
Global
Communications,
Inc.
(Philcom),
Globe-‐Mackay
Cable
and
Radio
Corporation
(GMCR)
withdrew
their
opposition
and
manifested
that
they
are
no
longer
opposing
the
application
after
which
respondent
NTC
issued
the
challenged
decision
of
November
22,
1982.
Respondent
NTC
rendered
the
challenged
decision
dated
November
22,
1982,
approving
the
revised
schedule
on
the
ground
that
the
rates
are
within
the
50%
of
cost
limit
provided
in
P.D.
No.
217,
that
they
are
just
and
reasonable
and
in
consonance
with
the
public
policies
declared
in
said
decree,
and
that
such
approval
is
in
the
public
interest
(see
NTC
decision
of
Nov.
22,
1982,
pp.
2-‐19,
rec.).
It is undisputed therefore that petitioner and the other oppositors were accorded due process.
From said decision dated November 22, 1982, petitioner filed the instant petition.
III
The
decision
promulgated
on
November
25,
1983
interprets
the
rule-‐making
authority
delegated
in
Section
2
of
P.D.
No.
217
to
the
then
Department
of
Public
Works,
Transportation
and
Communications
as
mandatory,
which
construction
is
not
supported
by
the
actual
phraseology
of
said
Section
2,
which
reads
thus:
The
Department
of
Public
Works,
Transportation
and
Communications,
through
its
Board
of
Communications
and/or
appropriate
agency
shall
see
to
it
that
the
herein
declared
policies
for
the
telephone
industry
are
immediately
implemented
and
for
this
purpose,
pertinent
rules
and
regulations
may
be
promulgated
(emphasis
supplied).
The
basic
canon
of
statutory
interpretation
is
that
the
word
used
in
the
law
must
be
given
its
ordinary
meaning,
unless
a
contrary
intent
is
manifest
from
the
law
itself.
Hence,
the
phrase
"may
be
promulgated"
should
not
be
construed
to
mean
"shall"
or
"must".
It
shall
be
interpreted
in
its
ordinary
sense
as
permissive
or
discretionary
on
the
part
of
the
delegate
—
department
or
the
Board
6f
Communications
then,
now
the
National
Telecommunications
Commission
—
whether
or
not
to
promulgate
pertinent
rules
and
regulations.
There
is
nothing
in
P.D.
No.
217
which
commands
that
the
phrase
"may
be
promulgated"
should
be
construed
as
"shall
be
promulgated."
The
National
Telecommunications
Commission
can
function
and
has
functioned
without
additional
rules,
aside
from
the
existing
Public
Service
Law,
as
amended,
and
the
existing
rules
already
issued
by
the
Public
Service
Commission,
as
well
as
the
1978
rules
issued
by
the
Board
of
Communications,
the
immediate
predecessor
of
respondent
NTC.
It
should
be
recalled
that
the
PLDT
petition
for
approval
of
its
revised
SIP
schedule
was
filed
on
March
20,1980.
P.D.
No.
217
does
not
make
the
rules
and
regulations
to
be
promulgated
by
the
respondent
NTC
as
essential
to
the
exercise
of
its
jurisdiction
over
applications
for
SIP
schedules.
In
Ang
Tibay
vs.
CIR
(69
Phil.
635),
this
Court,
through
Mr.
Justice
Jose
P.
Laurel,
did
not
include
the
promulgation
of
rules
and
regulations
as
among
the
seven
(7)
requirements
of
due
process
in
quasi-‐judicial
proceedings
before
a
quasi-‐judicial
body
such
as
the
respondent
NTC.
What
is
patently
mandatory
on
the
ministry
or
National
Telecommunications
Commission
is
the
immediate
implementation
of
the
policies
declared
in
P.D.
No.
217.
To
repeat,
the
ministry
or
the
NTC
"shall
see
to
it
that
the
herein
declared
policies
for
the
telephone
industry
are
immediately
implemented
..."
The
formulation
of
rules
and
regulations
is
purely
discretionary
on
the
part
of
the
delegate.
Both
words
"shall
and
"may
be"
are
employed
in
the
lone
sentence
of
Section
2
of
P.D.
No.
217.
This
graphically
demonstrates
that
P.D.
No.
217
preserves
the
distinction
between
their
ordinary,
usual
or
nominal
senses.
This
is
emphasized
by
the
fact
that
under
Section
3
of
P.D.
No.
217,
only
"the
pertinent
provisions"
of
the
Public
Service
Act,
as
amended,
which
are
in
conflict
with
the
provisions
of
P.D.
No.
217,
had
been
repealed
or
modified
by
said
P.D.
No.
217.
The
pertinent
provisions
of
the
Public
Service
Act,
as
amended,
the
franchise
of
the
Philippine
Long
Distance
Telephone
Company
under
Act
3436,
as
amended,
all
existing
legislative
and/or
municipal
franchises
and
other
laws,
executive
orders,
proclamations,
rules
and
regulations
or
parts
thereof,
as
are
in
conflict
with
the
provisions
of
this
Decree
are
hereby
repealed
or
modified
accordingly.
And
under
the
Public
Service
Act,
as
amended
(C.A.
No.
146),
the
board
of
Communications
then,
now
the
NTC,
can
fix
a
provisional
amount
for
the
subscriber's
investment
to
be
effective
immediately,
without
hearing
(par.
3
of
Sec.
16,
C.A.
146,
as
amended).
Section 16 (c) of C.A. No. 146, as amended, provides:
(c)
To
fix
and
determine
individual
or
joint
rates,
toll
charges,
classifications,
or
schedules
thereof,
as
well
as
communication,
mileage,
kilometrage,
and
oilier
special
rates
which
shall
be
imposed,
observed,
and
followed
thereafter
by
any
public
service:
Provided
That
the
Commission
may,
in
its
discretion
approve
rates
proposed
by
public
services
provisionally
and
without
necessity
of
any
hearing,
but
it
shall
call
a
hearing
thereon
within
thirty
days
thereafter,
upon
publication
and
notice
to
the
concerns
operating
in
the
territory
affects
Provided
further,
That
in
case
the
public
service
equipment
of
an
operator
is
used
principally
or
secondarily
for
the
promotion
of
a
private
business,
the
net
profits
of
said
private
business
shall
be
considered
in
relation
with
the
public
service
of
such
operator
for
the
purpose
of
fixing
the
rates.
The
Rules
of
Practice
and
Procedures
promulgated
on
January
25,
1978
by
the
Board
of
Communications,
the
immediate
predecessor
of
respondent
NTC,
pursuant
to
Section
11
of
the
Public
Service
Act,
otherwise
known
as
Commonwealth
Act
No.
146,
as
amended,
govern
the
rules
of
practice
and
procedure
before
the
BOC
then,
now
respondent
NTC.
Section
2
of
said
Rules
defines
their
scope,
including
exempting
parties
from
the
application
of
the
rules
in
the
interest
of
justice
and
to
best
serve
the
public
interest,
and
the
NTC
may
apply
such
suitable
procedure
to
improve
the
service
in
the
transaction
of
public
service.
Thus,
Section
2
of
Rule
1
of
said
Rules
reads:
Sec.
2.
Scope.
—
These
rules
govern
pleadings,
practice
and
procedure
before
the
Board
of
Communications
in
all
matters
of
hearing,
investigation
and
proceedings
within
the
jurisdiction
of
the
Board.
However,
in
the
broader
interest
of
justice
and
in
order
to
best
serve
the
public
interest,
the
Board
may,
in
any
particular
matter,
except
it
from
these
rules
and
apply
such
suitable
procedure
to
improve
the
service
in
the
transaction
of
the
public
business.
Sections
4
and
5
of
Rule
2
of
said
rules
insure
the
appearance
of
the
Solicitor
General
and
other
consumers
or
users.
The
notice
of
hearing
is
required
to
be
published
and
to
be
served
on
the
affected
parties
by
Section
2
of
Rule
8;
while
Section
I
of
Rule
9
allows
the
filing
of
written
oppositions
to
the
application
Under
Section
3
of
Rule
15,
the
BOC
then,
now
the
NTC,
may
grant,
on
motion
of
the
applicant
or
on
its
own
initiative,
provisional
relief
based
on
the
pleading,
supporting
affidavits
and
other
documents
attached
thereto,
without
prejudice
to
a
final
decision
after
completion
of
the
hearing
which
shall
be
caged
within
thirty
(30)
days
from
the
grant
of
the
provisional
relief.
Finally,
Section
1
of
Rule
19
provides
for
the
suppletory
application
of
the
Rules
of
Court
governing
proceedings
before
the
Court
of
First
Instance
then,
now
the
Regional
Trial
Courts,
which
are
not
inconsistent
with
the
rules
of
practice
and
procedure
promulgated
by
the
BOC
on
January
25,
1978.
There
is
nothing
in
P.D.
No.
217
modifying,
much
less
repeating
Section
16
(c)
of
the
Public
Service
Act,
as
amended.
It
is
true
that
P.D.
No.
1874
promulgated
on
July
21,
1983
amending
Section
2
of
P.D.
No.
217
expressly
authorizes
the
National
Telecommunications
Commission
(now
the
successor
of
the
Board
of
Communications)
to
approve
"such
amounts
for
subscriber
investments
as
applied
for
provisionally
and
without
the
necessity
of
a
hearing;
but
shall
call
a
hearing
thereon
within
thirty
(30)
days
thereafter,
upon
publication
and
notice
to
all
parties
affected."
But
such
amendment
merely
reiterates
or
confirms
paragraph
(c)
of
Section
16
of
C.A.
No.
146,
as
amended,
otherwise
known
as
the
Public
Service
Law,
and
serves
merely
to
clarify
the
seeming
ambiguity
of
the
repealing
clause
in
Section
3
of
P.D.
No.
217
to
dissipate
an
doubts
on
such
power
of
the
National
Telecommunications
Commission.
The construction of the majority decision of November 25, 1983 of the word "may" to mean "shall" is too strained, if not tortured.
IV
WE
cannot
subscribe
to
the
view
that
the
National
Telecommunications
Commission
should
or
must
promulgate
"pertinent
rules
and
regulations
because
the
existing
substantive
and
procedural
laws
as
well
as
the
rules
promulgated
by
the
Public
Service
Commission
under
and
pursuant
to
the
Public
Service
Law,
otherwise
known
as
CA
No.
146,
as
amended,
are
more
than
adequate
to
determine
the
reasonability
of
the
amounts
of
investment
of
telephone
subscribers,
the
viability
of
the
company
and
the
other
factors
that
go
into
determining
such
amounts
and
such
viability.
The
existing
laws
and
rules
on
rate-‐making
are
more
than
sufficient
for
a
proper
determination
of
such
amounts
of
investments
of
individual
subscribers
and
the
profitability
of
the
venture.
The
adequacy
of
the
existing
Public
Service
Law,
otherwise
known
as
C.A.
No.
146,
as
amended,
and
rules
had
been
demonstrated,
because
they
have
been
applied
in
the
following
cases
involving
PLDT:
1. PLDT vs. PSC, G.R. No. L-‐26762, Aug. 31, 1970, 34 SCRA 609;
2. Republic vs. PLDT, G.R. No. L-‐18841, Jan. 27, 1969, 26 SCRA 620;
3. PLDT vs. PSC, G.R. Nos. L-‐24198 & L-‐24207-‐10, Dec. 18, 1968, 26 SCRA 427;
4.
Republic
Telephone
Co.
vs.
PLDT,
G.R.
No.
L-‐21070;
PLDT
vs.
Republic
Telephone
Co.,
G.R.
No.
L-‐21075,
both
decided
on
Sept.
23,
1968,
25
SCRA
80;
5. PLDT vs. Medina, G.R. No. L-‐24658, April 3, 1968, 23 SCRA 1; and
6. PLDT vs. Medina, G.R. Nos. L-‐24340-‐44, July 18, 1967, 20 SCRA 669.
As
heretofore
stated,
as
early
as
January
25,
1978,
other
pertinent
rules
of
practice
and
procedure
were
promulgated
by
the
then
Board
of
Communications,
now
the
respondent
National
Telecommunications
Commission,
implementing
P.D.
No,
217,
in
addition
to
the
applicable
provisions
of
the
Public
Service
Law,
as
amended,
and
the
rules
previously
issue
by
the
Public
Service
Commission
(Annex
2
to
the
Memo
of
respondent
PLDT
filed
on
August
15,
1983,
pp.
147-‐165,
rec.).
Even
before
1978,
respondent
applied
the
procedure
prescribed
by
the
Public
Service
Law,
as
amended,
and
the
rules
previously
issued
by
the
Public
Service
Commission,
the
NTC
predecessor,
in
several
cases
involving
similar
applications
for
SIP
schedules
of
Filipino
Telephone
Corporation
(BOC
Case
No.
73-‐064;
see
BOC
decision
in
said
cases
dated
December
5,
1974,
May
11,
1978,
March
15,
1977,
Feb.
19,
1976
and
Aug.
31,
1978
—
Annexes
3,
4,
4-‐A,
5,
pp.
166-‐195,
rec.).
The
majority
opinion
recognizes
that
for
the
last
three
years,
the
PLDT
had
earned
a
yearly
average
net
profit
of
over
P100
million
and
the
existing
subscribers
have
been
receiving
their
corresponding
quarterly
dividends
on
their
investments.
It
should
be
stressed
that
Section
5
of
Article
XIV
of
the
1973
Constitution,
as
amended,
expressly
directs
that
"the
State
shall
encourage
equity
participation
in
public
utilities
by
the
general
public."
As
above-‐stated,
the
existing
individual
subscribers
of
PLDT
had
been
sharing
in
the
net
profits
of
the
company
every
quarter
after
the
promulgation
of
P.D.
217
on
June
16,
1973.
The
amount
that
is
provisionally
approved
under
the
subscriber's
investment
plan
for
PBX/PAEX
trunks
and
for
business
telephones
in
Metro
Manila
and
the
provinces,
whether
new
installations
or
transfers,
appears
to
be
reasonable,
including
those
for
the
leased
lines
or
outside
local.
To
lighten
the
burden
of
subscribers,
investments
may
be
paid
in
installments
or
under
some
convenient
arrangements
which
the
NTC
may
authorize,
which
is
now
expressly
provided
for
in
Section
1
of
P.D.
1874
amending
Sec.
6
of
P.D.
217.
Section 1, paragraph 6 of the Presidential Decree No. 217 is hereby amended to read as follows:
6.
In
any
subscriber
self-‐financing
plan,
the
amount
of
subscriber
self-‐financing
wilt
in
no
case,
exceed
fifty
per
centum
(50%)
of
the
amount
which
results
from
dividing
the
telephone
utility's
gross
investment
in
telephone
plant
in
service
by
its
number
of
primary
stations
in
service,
both
as
reported
in
the
utility's
latest
audited
annual
report
rendered
he
National
Telecommunications
Commission;
PROVIDED,
however,
that
the
amount
payable
by
the
telephone
subscriber
may
be
paid
on
installment
or
under
such
payment
arrangement
as
the
National
Telecommunications
Commission
may
authorize.
V
It
should
be
likewise
emphasized
that
pursuant
to
the
mandate
of
Section
5,
Article
XIV
of
the
1973
Constitution,
as
amended,
the
law-‐making
authority,
in
issuing
both
P.D.
Nos.
217
and
1874,
established
the
all-‐important
policy
of
making
available
on
regular
and
uninterrupted
basis
the
telephone
service
because
it
is
a
crucial
element
in
the
conduct
of
business
activity
...
and
is
essential
for
the
smooth
and
efficient
function
of
industry,
... efficient telephone service contributes directly to national development by facilitating trade and commerce;
... the telephone industry is one of the most highly capital intensive industries;
...
the
telephone
industry
has
fundamentally
different
financing
characteristics
from
other
utilities
in
that
capital
requirements
per
telephone
unit
installed
increase
as
the
number
of
customers
serviced
also
increases
instead
of
decreasing
in
cost
per
unit
as
in
power
and
water
utilities;
...
continued
reliance
on
the
traditional
sources
of
capital
funds
through
foreign
and
domestic
borrowing
and
through
public
ownership
of
common
capital
stock
will
result
in
a
high
cost
of
capital
heavy
cash
requirements
for
amortization
and
thus
eventually
in
higher
effective
cost
of
telephone
service
to
subscribers;
...
the
subscribers
to
telephone
service
tend
to
be
among
the
residents
of
urban
areas
and
among
the
relatively
higher
income
segment
of
the
population;
...
it
is
in
the
interest
of
the
national
economy
to
encourage
savings
and
to
place
these
savings
in
productive
enterprises
and
...
it
is
the
announced
policies
of
the
government
to
encourage
the
spreading
out
of
ownership
in
public
utilities
(see
Whereases
of
P.D.
217;
emphasis
supplied).
P.D.
No.
217
further
states
as
the
basic
policies
of
the
State
concerning
the
telephone
industry
"in
the
interest
of
social,
economic
and
general
well-‐being
of
the
people
...
1.
The
attainment
of
efficient
telephone
service
for
as
wide
an
area
as
possible
at
the
lowest
reasonable
cost
to
the
subscriber;
2.
The
expansion
of
telephone
service
shall
be
financed
through
an
optimal
combination
of
domestic
and
foreign
sources
of
financing
and
an
optimal
combination
of
debt
and
equity
funds
so
as
to
minimize
the
aggregate
cost
of
capital
of
telephone
utilities;
3.
Consistent
with
the
declared
policy
of
the
State
to
attain
widespread
ownership
of
public
utilities
obtained
from
ownership
funds
shall
be
raised
from
a
broad
base
of
investors,
involving
as
large
a
number
of
individual
investors
as
may
be
possible;
4.
In
line
with
the
objective
of
spreading
ownership
among
a
wide
base
of
the
people,
the
concept
of
telephone
subscriber
self-‐financing
is
hereby
adopted
whereby
a
telephone
subscriber
finances
part
of
the
capital
investments
in
telephone
installations
through
the
purchase
of
stocks,
whether
common
or
preferred
stock,
of
the
telephone
company;
5.
As
part
of
any
subscriber
self-‐financing
plan,
when
the
issuance
of
preferred
stock
is
contemplated,
it
is
required
that
the
subscriber
be
assured,
in
all
cases
of
a
fixed
annual
income
from
his
investment
and
that
these
preferred
capital
stocks
be
convertible
into
common
shares,
after
a
reasonable
period
and
under
reasonable
terms,
at
the
option
of
the
preferred
stockholder;
and
6.
In
any
subscriber
self-‐financing
plan,
the
amount
of
subscriber
self-‐financing
wig,
in
no
case,
exceed
fifty
per
centum
(50%)
of
the
cost
of
the
installed
telephone
line,
as
may
be
determined
from
time
to
time
by
the
regulatory
bodies
of
the
State.
The
same
policies
and
objectives
are
substantially
re-‐stated
and
capsulized
in
the
three
Whereases
of
P.D.
No.
1874
amending
P.D.
No.
217
as
pointed
out
in
the
basic
policies
aforestated
in
P.D.
No.
217
that
the
cost
per
telephone
unit
increases
in
proportion
to
the
increase
in
the
number
of
customers
served;
and
that
foreign
borrowing
will
impose
heavy
cash
requirements
for
amortizations
of
such
foreign
loans
which
would
result
in
the
higher
effective
costs
of
telephone
service
to
subscribers
and
ultimately
would
be
a
heavy
drain
on
our
dollar
reserves,
which
will
result
in
our
inability
to
meet
our
other
foreign
commitments
and
mark
the
image
of
the
Republic
of
the
Philippines
in
international
trade
relations.
Thus,
P.D.
No.
217
stresses
that
in
the
interest
of
the
national
economy
it
is
essential
to
encourage
savings
and
to
place
these
savings
(subscriber's
investments)
in
productive
enterprises.
PLDT
is
profitable
for
the
subscribers-‐investors
as
shown
by
its
net
profit
and
the
dividends
received
quarterly
by
the
existing
subscribers.
There
is
no
showing
—
not
even
an
allegation
—
that
the
net
profits
realized
by
PLDT
all
these
years
have
been
dissipated
and
not
plowed
back
into
the
firm
to
improve
its
service.
But
the
rising
cost
of
materials
and
labor
needed
to
improve
the
PLDT
service,
aggravated
by
the
devaluation
of
our
currency,
all
the
more
justify
the
revised
SIP
schedule
approved
by
the
respondent
NTC.
The approved revised SIP schedule, which appears reasonable and fair is herein reproduced: (I removed the table)
With
the
dividends
that
will
be
received
quarterly
under
the
revised
SIP
schedule,
the
subscribers
(whether
of
phone
installations
for
business
with
or
without
trunk
lines,
as
wen
as
transfers
of
the
same;
or
of
residential
phones
whether
single
or
party
line
as
well
as
transfers
of
the
same),
will
recover
their
investments
after
some
years
and
will
thereafter
remain
stockholders
and
part-‐owners
of
PLDT.
All
the
subscribers
therefore,
are
assured
not
only
of
profits
from
but
also
preservation
of,
their
investments,
which
are
not
donations
to
PLDT.
There
are
always
two
sides
—
sometimes
more
—
to
a
case
or
proposition
or
issue.
There
are
many
cases
decided
by
this
Court
where
this
Court
had
reconsidered
Its
decisions
and
even
reversed
Itself,
conformably
to
the
environmental
facts
and
the
applicable
law.
After
a
re-‐study
of
the
facts
and
the
law,
illuminated
by
mutual
exchange
of
views
the
members
of
the
Court
may
and
do
change
their
minds.
To
repeat,
the
decision
of
November
25,
1983
was
not
a
unanimous
decision
for
it
has
the
concurrence
of
only
nine
(9)
members
of
the
Court,
because
three
(3)
took
no
part
and
one
(1)
reserved
his
vote
(p.
232,
rec.).
WHEREFORE,
THE
DECISION
OF
NOVEMBER
25,
1983
SHOULD
BE
AS
IT
IS
HEREBY
RECONSIDERED
AND
SET
ASIDE
AND
THE
PETTION
IS
HEREBY
DISMISSED.
NO
COSTS.
SO
ORDERED.
Interpretation
depends
upon
the
context
(9)
People
vs
CA,
G.R.
No.
11623,
March
13,
1995
Petitioners
assail
a
Decision
of
the
Court
of
Appeals
which
reversed
the
Regional
Trial
Court,
Branch
116,
of
Pasay
city
and
granted
the
motion
for
reinvestigation
of
private
respondent
Esam
Gadi.
On
31
December
1993,
Esam
Gadi,
a
national
of
Saudi
Arabia,
was
apprehended
at
the
Manila
International
Airport
and
subsequently
detained
for
possession
of
marijuana.
On
3
January
1994,
an
information
was
filed
and
docketed
as
Criminal
Case
No.
94-‐4826
in
the
Regional
Trial
Court,
Branch
116,
Pasay
City
charging
Esam
Gadi
with
violation
of
section
81
Article
11,
of
the
Dangerous
Drugs
Act,
as
amended.
Three
(3)
days
later,
on
6
January
1994,
Esam
Gadi
filed
an
"Ex
Parte
Motion
to
Reduce
Bail,"
from
P90,000.00
to
P30,000.00.
This
Motion
was
denied.
Esam
Gadi
then
posted
a
cash
bond
of
P90,000.00
which
was
approved
by
the
trial
court
on
10
January
1994.
1
On
9
February
1994,
Esam
Gadi
filed
a
motion
for
"reinvestigation,"
claiming
that
the
seriousness
of
the
offense
charged
warranted
the
grant
of
his
motion.
Admitting
that
this
motion
was
filed
beyond
the
five-‐day
period
prescribed
in
Section
7,
Rule
112
of
the
Rules
2
of
Court,
he
contended
that
the
reglementary
period
was
not
mandatory.
Section
7,
Rule
112
of
the
Rules
of
Court
provides:
However,
before
the
filing
of
such
complaint
or
information,
the
person
arrested
may
ask
for
a
preliminary
investigation
by
a
proper
officer
in
accordance
with
this
rule,
but
he
must
sign
a
waiver
of
the
provisions
of
Article
125
of
the
Revised
Penal
Code,
as
amended,
with
the
assistance
of
a
lawyer
and
in
case
of
non-‐availability
of
a
lawyer,
a
responsible
person
of
his
own
choice.
Notwithstanding
such
waiver,
he
may
apply
for
bail
as
provided
in
the
corresponding
rule
and
the
investigation
must
be
terminated
fifteen
(15)
days
from
its
inception.
If
the
case
has
been
filed
in
court
without
a
preliminary
investigation
having
been
conducted,
the
accused
may
within
five
(5)
days
from
the
time
he
learns
of
the
filing
of
the
information,
ask
for
a
preliminary
investigation
with
the
same
right
to
adduce
evidence
in
his
favor
in
the
manner
prescribed
in
this
Rule.
(Emphasis
supplied)
The
motion
for
"reinvestigation"
was
denied
by
the
trial
court.
A
motion
for
reconsideration
was
likewise
turned
down
on
8
March
1994,
the
date
of
his
arraignment
where
Esam
Gadi
pleaded
not
guilty.
He
then
challenged
the
denial
of
his
motion
for
"reinvestigation"
in
a
petition
for
certiorari
before
the
Court
of
Appeals.
The
Court
of
Appeals
granted
the
petition
and
reversed
the
trial
court
Order
denying
reinvestigation.
Citing
Tan
vs.
Securities
Exchange
3
Commission,
the
Court
of
Appeals
held
that
the
five-‐day
period
for
asking
reinvestigation
was
only
permissive,
considering
the
use
of
the
word
"may."
The
appellate
court
also
relied
on
Go
vs.
Court
of
Appeals"
and
held
that
a
motion
for
preliminary
investigation
may
be
granted
even
if
trial
on
the
merits
had
begun,
provided
that
the
motion
was
filed
before
arraignment.
In
this
Petition
for
Review,
the
Solicitor
General
contends
that
it
is
a
mandatory
rule
that
a
motion
for
preliminary
investigation
be
filed
within
five
(5)
days
from
the
time
the
accused
had
learned
of
the
filing
of
the
information.
It
is
also
maintained
that
Esam
Gadi
had
waived
his
right
to
preliminary
investigation
when
he
posted
bail
for
his
release.
Deliberating
on
the
Petition
for
Review
and
the
Comment
of
private
respondent,
the
Court
finds
that
the
Court
of
Appeals
fell
into
reversible
error
in
granting
the
motion
for
"reinvestigation"
of
private
respondent.
The
period
for
filing
a
motion
for
preliminary
investigation
after
an
information
has
been
filed
against
an
accused
who
was
arrested
5
without
a
warrant
has
been
characterized
as
mandatory
by
the
Court.
In
People
vs.
Figueroa,
the
.Supreme
Court
applied
Section
15,
6
Rule
112
of
the
old
Rules,
which
is
substantially
reproduced
in
Section
7,
Rule
112
of
the
1985
Rules
of
Criminal
Procedure.
The
Court
held
that
Section
15
of
old
Rule
112
granted
the
accused
the
right
to
ask
for
preliminary
investigation
within
a
period
of
five
(5)
days
from
the
time
he
learned
of
the
filing
of
the
information.
As
the
accused
in
that
case
did
not
exercise
his
right
within
the
five-‐day
7
period,
his
motion
for
"reinvestigation"
was
denied.
Clearly,
Section
7
of
Rule
112
of
the
present
Rules
gives
the
accused
the
right
to
ask
for
a
preliminary
investigation;
but
it
does
not
give
him
the
right
to
do
so
after
the
lapse
of
the
five-‐day
period.
This
is
in
accord
with
the
intent
of
the
Rules
of
Criminal
Procedure
to
make
preliminary
investigation
simple
and
speedy.
The
Supreme
Court,
elaborating
on
the
rationale
of
the
rules
on
preliminary
investigation,
held:
The
new
Rules
were
drafted
in
the
light
of
the
Court's
experience
with
cases
where
preliminary
investigations
had
dragged
on
for
weeks
and
even
months.
The
Court
had
intended
to
remove
this
clog
upon
the
judicial
machinery
and
to
make
a
preliminary
investigation
as
simple
and
speedy
as
is
consistent
with
the
substantial
rights
of
the
accused.
The
investigation
is
advisedly
preliminary,
to
be
followed
by
the
trial
proper.
The
investigating
judge
or
prosecuting
officer
acts
upon
probable
cause
and
reasonable
belief,
not
upon
proof
beyond
reasonable
doubt.
The
occasion
is
not
for
the
full
and
exhaustive
display
of
the
parties'
evidence;
it
is
for
the
presentation
of
such
evidence
only
as
may
engender
well-‐grounded
belief
that
an
offense
has
been
committed
and
that
the
accused
is
probably
guilty
thereof.
When
all
this
is
fulfilled,
the
accused
will
not
be
permitted
to
cast
about
for
fancied
reasons
to
delay
the
proceedings;
the
time
to
ask
for
more
is
at
the
8
trial.
(Emphases
supplied)
The
respondent
Court
of
Appeals
held,
however,
that
the
five-‐day
period
prescribed
in
Section
7,
Rule
112
was
not
mandatory
as
the
provision
uses
the
permissive
term
"may."
As
already
noted,
the
Court
of
Appeals
cited
Tan
vs.
Securities
and
Exchange
9
Commission
where
the
Supreme
Court
held
that
the
term
"may"
as
used
in
adjective
rules
is
only
permissive
and
not
mandatory.
Tan,
however,
does
not
really
support
a
ruling
that
the
five-‐day
period
for
asking
for
preliminary
investigation
of
a
person
accused
of
crime
is
only
permissive.
Tan
was
concerned
with
"may"
as
used
in
a
provision
of
the
Corporation
Code
dealing
with
the
transfer
of
10
shares
of
stock.
Two
(2)
cases
relied
upon
in
Tan
are
equally
inapplicable
to
the
present
case.
In
Shauf
vs.
Court
of
Appeals,
"may"
was
used
in
a
U.S.
federal
statute
on
equal
opportunity
for
civilian
employment
in
U.S.
military
installations
which
enumerated
the
remedies
of
an
aggrieved
party.
Holding
that
remedial
statutes
are
to
be
construed
liberally
and
that
the
term
"may"
as
used
in
adjective
rules
was
only
permissive
and
not
mandatory,
our
Supreme
11
Court
held
that
the
substantive
remedies
of
a
party
were
not
limited
to
those
enumerated
in
that
U.S.
legislation.
In
Legaspi
vs.
Estrella,
12
the
Court
had
to
interpret
"may"
as
used
in
section
146
of
Batas
Pambansa
Blg.
337
or
the
old
Local
Government
Code.
That
term,
being
indicative
of
a
"possibility"
or
an
'opportunity,"
was
read
as
permissive
rather
than
mandatory
to
avoid
defeating
the
13
purpose
of
the
law
immediately
to
include
sectoral
representatives
in
the
legislative
councils
of
local
government
units.
While
Tan
and
the
cases
there
cited
show
that
the
use
of
the
term
"may"
is
indicative
of
an
Opportunity
or
possibility,
they
cannot
be
used
to
support
the
proposition
that
the
five-‐day
period
under
section
7
of
Rule
112
is
not
mandatory
and
may
be
disregarded
at
will.
The
"opportunity"
or
"possibility"
engendered
by
the
use
of
the
term
"may"
in
this
rule
relates
only
to
the
option
of
filing
a
motion
for
preliminary
investigation;
it
does
not
refer
to
the
filing
of
the
motion
after
the
expiration
of
the
five-‐day
period.
This
rule
grants
the
accused
a
right
or
faculty
and
not
an
obligation.
In
the
sense
that
he
is
not
obliged
to
exercise
this
right,
this
rule
is
permissive
only;
in
the
sense
that
he
may
exercise
this
right
only
within
the
five-‐day
period,
the
rule
is
mandatory.
Put
a
little
differently,
Esam
Gadi
had
the
option
or
faculty
of
demanding
preliminary
investigation;
if
he
wanted
to
exercise
that
option,
however,
he
had
to
exercise
it
within
the
reglementary
period.
Upon
expiration
of
that
period,
his
option
lapsed.
Much
the
same
situation
obtains
in
respect
of
the
period
for
filing
a
petition
for
review.
Section
1,
Rule
45
of
the
Rules
of
Court
provides
that:
Sec.
1.
Filing
of
petition
with
Supreme
Court.
—
A
party
may
appeal
by
certiorari
from
a
judgment
of
the
Court
of
Appeals,
by
filing
with
the
Supreme
Court
a
petition
for
certiorari
within
fifteen
(15)
days
from
notice
of
judgment
or
of
the
denial
of
his
motion
for
reconsideration
filed
in
due
time,
and
paying
at
the
same
time,
to
the
clerk
of
said
court
the
corresponding
docketing
fee.
The
petition
shall
not
be
acted
upon
without
proof
of
service
of
a
copy
thereof
to
the
Court
of
Appeals.
(Emphasis
supplied)
The
use
of
"may"
in
Section
1
of
Rule
45
refers
only
to
the
opportunity
or
option
to
file
a
petition
for
review.
This,
however,
does
not
give
a
party
a
license
to
file
a
petition
for
review
beyond
the
fifteen-‐day
period.
Hence,
under
Rule
45,
Section
1,
a
petition
for
review
filed
after
lapse
of
the
fifteen-‐day
period
is
not
to
be
entertained.
Innumerable
petitions
have
been
denied
by
the
Court
for
having
been
filed
unseasonably.
14
The
reliance
of
the
Court
of
Appeals
on
the
case
of
Rolito
Go
vs.
Court
of
Appeals
is
misplaced.
In
Go,
as
in
the
present
case,
an
information
was
filed
without
a
prior
preliminary
investigation
of
the
accused.
The
accused
in
both
cases
demanded
their
right
to
a
preliminary
investigation
before
arraignment.
The
similarity
between
the
two
(2)
cases
ends
there.
There
are,
upon
the
other
hand,
critical
differences
in
the
fact
situations
in
one
and
the
other
case
which
must
not
be
overlooked.
In
Go,
the
accused
asked
for
preliminary
investigation
on
the
very
day
the
information
was
filed.
In
the
present
case,
Esam
Gadi
did
so
only
on
9
February
1994,
or
a
month
after
he
had
learned
of
the
filing
of
the
information
against
him.
In
the
present
case,
Esam
Gadi
insists
on
the
application
of
Section
7,
Rule
112
in
effect
claiming
or
conceding
there
was
a
lawful
warrantless
arrest.
It
appears
that
the
accused
was
apprehended
while
engaged
in
the
commission
of
an
offense,
i.e,
possession
of
marijuana
punishable
under
Section
8,
Article
II
of
the
Dangerous
Drugs
Act,
as
amended.
In
Go,
the
Court
relied
on
the
general
rule
that
an
information
may
be
filed
only
after
a
preliminary
investigation
has
been
conducted.
The
Court
did
not
apply
Section
7,
Rule
112
because
there
had
been
no
arrest
at
all.
The
Court
found
that
accused
Rolito
Go
had
merely
walked
into
the
police
station
in
the
company
of
his
two
lawyers
and
placed
himself
at
the
disposal
of
the
police
authorities.
In
fact,
the
Court
did
not
consider
his
act
as
surrender
for
the
accused
did
not
expressly
declare
that
he
was
surrendering
himself,
probably
to
avoid
the
implication
that
he
was
admitting
his
guilt.
Further,
in
Go,
the
Prosecutor
had
himself
filed
with
the
trial
court
a
motion
for
leave
to
conduct
a
preliminary
investigation.
This
motion,
along
with
the
application
for
bail,
was
in
fact
initially
granted
by
the
trial
court.
But
the
trial
court
a
few
days
later
turned
around
and
inexplicably
changed
its
mind,
cancelled
the
bail,
refused
to
accord
preliminary
investigation
to
the
accused
Go
and
the
trial
began
over
the
vehement
protests
of
Go.
The
court
said:
Nonetheless,
since
petitioner
in
his
omnibus
motion
was
asking
for
preliminary
investigation
and
not
for
a
re-‐investigation
(Crespo
vs.
Mogul
involved
a
re-‐investigation),
and
since
the
Prosecutor
himself
did
file
with
the
trial
court,
on
the
5th
day
after
filing
the
information
for
murder,
a
motion
for
leave
to
conduct
preliminary
investigation
(attaching
to
his
motion
a
copy
of
petitioner's
omnibus
motion),
we
conclude
that
petitioner's
omnibus
motion
was
in
effect
filed
with
the
trial
court.
What
was
crystal
clear
was
that
petitioner
did
ask
for
a
preliminary
investigation
the
very
day
that
the
information
was
filed
without
such
preliminary
investigation,
and
that
the
trial
court
was
five
(5)
days
later
apprised
of
the
desire
of
the
petitioner
such
preliminary
investigation.
Thus,
even
on
the
(mistaken)
supposition
apparently
made
by
the
Prosecutor
that
Section
7
of
Rule
112
of
the
Revised
Rules
of
Court
was
applicable,
the
5-‐day
reglementary
period
on
Section
7
Rule
112
15
must
be
held
to
have
been
substantially
complied
with.
(Emphases
supplied)
Hence,
while
the
accused
in
Go
was
entitled
to
preliminary
investigation
as
a
matter
of
right,
Esam
Gadi
is
not.
His
right
to
demand
preliminary
investigation
was
subject
to
the
condition
that
he
should
claim
it
seasonably.
He
did
not
do
so.
Esam
Gadi,
accordingly,
effectively
waived
his
right
to
a
preliminary
investigation.
The
denial
of
Esam
Gadi's
motion
for
preliminary
investigation
is
also
warranted:
by
his
posting
of
a
cash
bail
bond
without
previously
16
or
simultaneously
demanding
a
preliminary
investigation.
In
People
vs.
Hubilo,
an
accused
who
had
posted
bail
was
deemed
to
have
foregone
his
right
to
preliminary
investigation.
In
the
present
case,
Esam
Gadi
asked
for
and
was
granted
bail
on
10
January
1994,
or
one
month
before
he
asked
for
a
preliminary
investigation
on
9
February
1994.
Once
more
Esam
Gadi
in
fact
waived
his
right
to
preliminary
investigation.
In
Go,
in
contrast,
the
accused
had
asked
for
preliminary
investigation
and
the
right
to
post
bail
at
the
same
time
in
one
omnibus
motion.
Accordingly,
the
Court
held
that
the
accused
in
Go
had
not
waived
his
right
to
preliminary
investigation:
Again,
in
the
circumstances
of
this
case,
we
do
not
believe
that
by
posting
bail,
petitioner
had
waived
his
right
to
preliminary
investigation.
In
People
v.
Selfaison
(110
Phil.
839
[1961]),
we
did
not
hold
that
appellants
there
had
waived
their
right
to
preliminary
investigation
because
immediately
after
their
arrest,
they
filed
bail
and
proceeded
to
trial
"without
previously
claiming
that
they
did
not
have
the
benefit
of
a
preliminary
investigation."
In
the
instant
case,
petitioner
Go
asked
for
release
on
recognizance
or
on
bail
and
for
preliminary
investigation
in
one
omnibus
motion.
He
had
thus
claimed
his
right
to
preliminary
investigation
before
respondent
Judge
approved
the
cash
bond
posted
by
petitioner
and
ordered
his
release
on
12
July
1991.
Accordingly,
we
cannot
reasonably
imply
waiver
of
preliminary
investigation
on
the
part
of
petitioner.
In
fact,
when
the
Prosecutor
filed
a
motion
in
court
asking
for
leave
to
conduct
preliminary
investigation,
he
clearly
if
impliedly
recognized
that
petitioner's
claim
to
preliminary
17
investigation
was
a
legitimate
one.
(Emphases
partly
in
the
original
and
partly
supplied)
All in all, Esam Gadi's demand for preliminary investigation was an afterthought merely.
WHEREFORE,
the
petition
for
Review
is
hereby
GRANTED
and
the
assailed
Decision
of
the
Court
of
Appeals
is
hereby
REVERSED
and
SET
ASIDE.
The
Orders
of
the
Regional
Trial
Court,
Branch
116
of
Pasay
City
dated
14
February
1994
and
8
March
1994
are
hereby
REINSTATED
and
the
Regional
Trial
Court
is
ORDERED
to
proceed
with
the
trial
of
Criminal
Case
No.
94-‐4820,
with
all
deliberate
dispatch.
Costs
against
private
respondent.
WE CONCUR:
(10)
San
Carlos
Milling
vs
CIR,
G.R.
No.
103379,
November
23,
1993
Assailed
in
this
petition
for
review
on
certiorari
is
the
decision
*
of
the
Court
of
Appeals
in
CA-‐G.R.
Sp.
No.
22346,
dated
23
December
1991,
the
dispositive
part
of
which
reads:
WHEREFORE,
in
view
of
the
foregoing
consideration,
the
petition
is
hereby
DISMISSED,
without
pronouncement
as
1
to
costs.
The
undisputed
facts,
as
succinctly
stated
by
the
Court
of
Tax
Appeals
and
adopted
by
the
Court
of
Appeals
in
its
decision
under
review,
are
as
follows:
Petitioner
domestic
corporation
had
for
the
taxable
year
1982
a
total
income
tax
overpayment
of
P781,393.00
reflected
as
creditable
income
tax
in
its
annual
final
adjustment
return.
The
application
of
the
amount
for
the
1983
tax
liabilities
remained
unutilized
in
view
of
petitioner's
net
loss
for
the
year
and
still
yet
had
a
credible
income
tax
of
P4,470.00
representing
the
3%
of
15%
withholding
tax
on
storage
credits.
Accordingly
the
final
adjustment
income
tax
return
for
the
taxable
year
1983
reflected
the
amount
of
P781,393.00
carried
over
as
tax
credit
and
P4,470.00
creditable
income
tax.
In
a
May
17,
1984
letter
to
the
respondent,
petitioner
signified
its
intention
to
apply
the
total
creditable
amount
of
P785,863.00
against
its
1984
tax
dues
consistent
with
the
provision
of
Section
86,
ibid,
coupled
with
a
comforting
alternative
request
for
a
refund
or
tax
credit
of
the
same.
Respondent
disallowed
the
proffered
automatic
credit
scheme
but
treated
the
request
as
an
ordinary
claim
for
refund/tax
credit
under
Section
292
in
relation
to
Section
295
of
the
Tax
Code
and
accordingly
subjected
the
same
for
verification/investigation.
No
sooner
than
the
respondent
could
act
on
the
claim,
petitioner
filed
a
petition
for
review
on
July
18,
1984.
And
before
this
Court
could
formally
hear
the
case,
petitioner
filed
a
supplemental
petition
on
March
11,
1986,
after
having
unilaterally
effected
a
set-‐off
of
its
credible
income
tax
vis
a
vis
income
tax
liabilities,
earlier
denied
by
the
2
respondent.
On
28
February
1990,
the
Court
of
Tax
Appeals
dismissed
the
petition
and
held
that
prior
investigation
by
and
authority
from
the
Commissioner
of
Internal
Revenue
were
necessary
before
a
taxpayer
could
avail
of
the
provisions
of
Section
86
(now
Section
69)
of
3
the
Tax
Code.
A
motion
for
reconsideration
was
then
filed
but
was
denied
in
a
resolution
dated
25
June
1990
without
prejudice,
however,
to
any
administrative
claim
for
tax
refund
or
tax
credit.
Thereafter,
petitioner
appealed
the
adverse
decision
of
the
Court
of
Tax
Appeals
to
the
Court
of
Appeals.
On
23
December
1991,
respondent
Court
dismissed
the
appeal.
The
main
issue
to
be
resolved
in
the
petition
at
bench
is
whether
or
not
prior
authority
from
the
Commissioner
of
Internal
Revenue
is
necessary
before
a
corporate
taxpayer
can
credit
excess
estimated
quarterly
income
taxes
paid
against
the
estimated
quarterly
income
tax
liabilities
for
the
succeeding
taxable
year,
under
Section
86
(now
Section
69)
of
the
Tax
Code.
It
is
the
contention
of
the
petitioner,
among
others,
that
in
the
aforecited
provision
of
the
Tax
Code,
nowhere
is
it
stated
that
the
"imprimatur"
or
approval
of
the
Commissioner
of
Internal
Revenue
must
be
secured
prior
to
crediting
a
refundable
tax
amount.
Petitioner
further
posits
that
neither
does
Revenue
Regulation
No.
10-‐77
implementing
the
Tax
Code
provision
require
prior
approval
of
the
Commissioner
of
Internal
Revenue
to
avail
of
the
automatic
tax
credit
scheme.
After a careful study of the records of the present petition, we find the petition to be devoid of merit.
We begin with the subject Tax Code provision under scrutiny, thus:
Sec.
86.
Final
Adjustment
Return.
—
Every
corporation
liable
to
tax
under
Section
24
shall
file
a
final
adjustment
return
covering
the
total
net
income
for
the
preceding
calendar
or
fiscal
year.
If
the
sum
of
the
quarterly
tax
payments
made
during
the
said
taxable
year
is
not
equal
to
the
total
tax
due
on
the
entire
taxable
net
income
of
that
year
the
corporation
shall
either:
(b) Be refunded the excess amount paid, as the case may be.
In
case
the
corporation
is
entitled
to
refund
of
the
excess
estimated
quarterly
income
tax
paid,
the
refundable
amount
shown
on
its
final
adjustment
return
may
be
credited
against
the
estimated
quarterly
income
tax
liabilities
for
the
taxable
quarters
of
the
succeeding
taxable
year.
(Emphasis
supplied)
On
7
October
1977,
the
Commissioner
of
Internal
Revenue
issued
the
implementing
rules
and
regulations
pertaining
to
the
subject
provision.
The
procedure
laid
out
in
said
rules
is
found
in
Revenue
Regulation
No.
10-‐77,
section
7
thereof,
which
reads:
Sec.
7.
Any
excess
of
the
total
quarterly
payments
over
the
actual
income
tax
computed
and
shown
in
the
adjustment
or
final
corporate
income
tax
return
shall
either
(a)
be
refunded
to
the
corporation,
or
(b)
may
be
credited
against
the
estimated
quarterly
income
tax
liabilities
for
the
quarters
of
the
succeeding
taxable
year.
The
corporation
must
signify
in
its
annual
corporate
adjustment
return
its
intention
whether
to
request
for
the
refund
of
the
overpaid
income
tax
or
claim
for
automatic
tax
credit
to
be
applied
against
its
income
tax
liabilities
for
the
quarters
of
the
succeeding
taxable
year,
by
filling
up
the
appropriate
box
on
the
corporate
tax
return,
BIR
Form
No.
1702.
4
The
case
of
Commissioner
of
Internal
Revenue
vs.
ESSO
Standard
Eastern,
Inc.,
et
al.,
cited
by
petitioner,
while
not
squarely
in
point,
has
touched
on
a
significant
aspect
directly
related
to
the
issue
at
hand.
There
it
was
said:
The
Commissioner's
position
is
that
income
taxes
are
determined
and
paid
on
an
annual
basis,
and
that
such
determination
and
payment
of
annual
taxes
are
separate
and
independent
transactions;
and
that
a
tax
credit
could
not
be
so
considered
until
it
has
been
finally
approved
and
the
taxpayer
duly
notified
thereof
.
.
.
.
(Emphasis
supplied)
In
other
words,
far
from
bolstering
its
position,
petitioner's
citation
of
the
above
case
only
serves
to
weaken
the
same.
What
petitioner
obviously
seeks
is
judicial
sanction
of
its
act
of
unilaterally
declaring
as
tax
credit
its
excess
estimated
quarterly
income
taxes
paid
in
a
given
year
against
its
tax
liabilities
for
the
quarters
of
the
succeeding
taxable
year.
If
petitioner's
theory
were
to
be
sustained,
this
could
wreak
havoc
and
confusion
in
the
tax
system.
The
respondent
Court
held
that
the
choice
of
a
corporate
taxpayer
for
an
automatic
tax
credit
does
not
ipso
facto
confer
on
it
the
right
to
immediately
avail
of
the
same.
Respondent
court
went
on
to
emphasize
the
need
for
an
investigation
to
ascertain
the
correctness
of
the
corporate
returns
and
the
amount
sought
to
be
credited.
We
agree.
It
is
difficult
to
see
by
what
process
of
ratiocination
petitioner
insists
on
the
literal
interpretation
of
the
word
"automatic."
Such
literal
interpretation
has
been
discussed
and
precluded
by
the
respondent
court
in
its
decision
of
23
December
1991
where,
as
aforestated,
it
ruled
that
"once
a
taxpayer
opts
for
either
a
refund
or
the
automatic
tax
credit
scheme,
and
signified
his
option
in
accordance
with
the
regulation,
this
does
not
ipso
facto
confer
on
him
the
right
to
avail
of
the
same
immediately.
An
investigation,
as
a
matter
of
procedure,
is
necessary
to
enable
the
Commissioner
to
determine
the
correctness
of
the
petitioner's
returns,
and
the
tax
amount
to
5
be
credited.
Prior
approval
by
the
Commissioner
of
Internal
Revenue
of
the
tax
credit
under
then
section
86
(now
section
69)
of
the
Tax
Code
would
appear
to
be
the
most
reasonable
interpretation
to
be
given
to
said
section.
An
opportunity
must
be
given
the
internal
revenue
branch
of
the
government
to
investigate
and
confirm
the
veracity
of
the
claims
of
the
taxpayer.
The
absolute
freedom
that
petitioner
seeks
to
automatically
credit
tax
payments
against
tax
liabilities
for
a
succeeding
taxable
year,
can
easily
give
rise
to
confusion
and
abuse,
depriving
the
government
of
authority
and
control
over
the
manner
by
which
the
taxpayers
credit
and
offset
their
tax
liabilities,
not
to
mention
the
resultant
loss
of
revenue
to
the
government
under
such
a
scheme.
Petitioner
points
out
that
the
automatic
tax
credit
scheme
under
the
law
refers
to
the
amount
"shown"
in
the
final
adjustment
return
of
the
corporate
taxpayer
and
not
as
determined
by
the
Commissioner,
thereby
recognizing
the
computation
made
by
the
taxpayer.
This
contention
is
not
impressed
with
merit.
To
reiterate,
Section
7
of
Revenue
Regulation
No.
10-‐77
provides
that
"(a)ny
excess
.
.
.
computed
and
shown
.
.
.
shall
either
(a)
be
refunded
to
the
corporation,
or
(b)
may
be
credited
against
the
estimated
quarterly
income
tax
liabilities.
.
.
."
The
above
rule
is
clear.
It
does
not
mean
that
reference
to
the
amount
"shown"
in
the
final
adjustment
return
prepared
by
the
taxpayer
implies
that
the
taxpayer
need
not
seek
approval
of
the
Commissioner
prior
to
its
effective
availment
of
the
tax
credit
scheme,
it
simply
cannot
credit
an
amount
it
deems
as
correct.
Rather,
it
provides
two
(2)
remedies,
that
is,
the
excess
may
either
be
refunded
or
credited,
and
insofar
as
the
option
of
tax
credit
is
concerned,
this
right
should
not
be
construed
as
an
absolute
right
which
is
available
to
the
taxpayer
at
his
sole
option.
It
is
our
view
that
tax
credit
under
the
cited
provision
should
be
construed
as
an
alternative
remedy
(to
a
refund)
subject
to
the
fulfillment
of
certain
requirements,
i.e.,
prior
verification
and
approval
by
the
Commissioner
of
Internal
Revenue.
Further,
the
cited
legal
provision
itself
employs
the
word
"may"
in
the
phrase
"may
be
credited",
implying
that
the
availability
of
the
remedy
of
tax
credit
is
not
absolute
and
mandatory;
it
does
not
confer
an
absolute
right
on
the
taxpayer
to
avail
of
the
tax
credit
scheme
if
it
so
chooses;
neither
does
it
impose
a
duty
on
the
part
of
the
government
to
sit
back
and
allow
an
important
facet
of
tax
collection
to
be
at
the
sole
control
and
discretion
of
the
taxpayer.
6
As
aptly
held
by
this
Court
in
In
re
Guarina:
Whether
the
word
"may"
in
the
statute
is
to
be
construed
as
mandatory
and
imposing
a
duty,
or
merely
permissive
and
conferring
discretion,
is
to
be
determined
in
each
case
from
the
apparent
intention
of
the
statute
as
gathered
from
the
context,
as
well
as
from
the
language
of
the
particular
provision.
The
question
in
each
case
is
whether,
taken
as
a
whole
and
viewed
in
the
light
of
surrounding
circumstances,
it
can
be
said
that
a
purpose
existed
on
the
part
of
the
legislator
to
enact
a
law
mandatory
in
character.
If
it
can,
then
it
should
be
given
a
mandatory
effect;
if
not,
then
it
should
be
given
its
ordinary
permissive
effect.
.
.
.
Anent
the
issue
on
petitioner's
entitlement
to
a
refund/credit
under
Sections
292
and
295
(now
Sections
230
and
204
of
the
Tax
Code)
—
since
automatic
tax
credit
without
prior
approval
of
the
Commission
of
Internal
Revenue
under
then
Section
86
would
not
be
available
to
the
taxpayer
—
it
must
be
stressed
that
the
remedy
of
a
refund/credit
has
never
been
denied
the
petitioner.
On
the
contrary,
the
Commissioner
of
Internal
Revenue
has
long
informed
petitioner
that
its
request
for
automatic
tax
credit
has
been
treated
as
an
ordinary
claim
for
refund/tax
credit
under
Section
292
in
relation
to
Section
295
of
the
Tax
Code,
and
that
the
same
has
been
referred
for
investigation,
report
and
recommendation
to
the
Chief,
Agriculture
and
Natural
Resources
Division
of
the
Bureau
of
Internal
Revenue.
All
that
petitioner
had
to
do,
therefore,
is
to
inquire
regarding
the
status
of
its
claim
for
refund/credit
and
await
the
decision
in
regard
thereto.
WHEREFORE,
the
petition
is
hereby
DENIED.
The
decision
of
the
Court
of
Appeals
appealed
from
is
AFFIRMED
with
costs
against
the
petitioner.
SO ORDERED.
When
“may”
is
construed
as
mandatory
(11)
De
Mesa
vs
Mecias,
G.R.
No.
L-‐24583,
October
29,
1966
In
this
petition
for
certiorari
with
preliminary
injunction,
the
petitioners
ask
this
Court
to
review
a
three-‐to-‐two
decision
rendered
by
a
special
division
of
the
Court
of
Appeals
on
March
26,
1965
in
C.A.
35019-‐R,
sustaining
the
validity
of
the
proceedings
had
and
taken
by
the
Court
of
First
Instance
of
Rizal
in
election
case
7924
before
it
(Maximino
A.
Argana,
protestant
vs.
Francisco
De
Mesa,
protestee).
The
issue
of
nullity
of
the
judgment
promulgated
in
the
said
election
case
was
elevated
to
the
Court
of
Appeals
on
a
petition
for
certiorari
and
mandamus,
upon
the
contention
that
the
said
court
of
first
instance
illegally
and
incorrectly
did
not
allow
the
substitution
of
the
present
petitioners
as
parties
for
De
Mesa,
after
the
latter's
death,
and
thereafter
denied
due
course
to
their
appeal
from
the
said
judgment.
Opponents
for
the
mayoralty
of
Muntinlupa,
Rizal
in
the
1963
elections
were
Francisco
De
Mesa
and
Maximino
A.
Argana.
The
electorate's
choice,
as
tallied
by
the
local
board
of
canvassers,
was
De
Mesa.
Elected
vice-‐mayor
with
him
was
Demetrio
R.
Loresca.
Duly,
proclaimed
elected,
these
two
qualified
and
assumed
their
respective
positions
upon
the
commencement
of
their
term
of
office.
Meanwhile
and
in
due
season,
defeated
candidate
Argana,
charging
the
perpetration
of
frauds,
terrorism
and
other
irregularities
in
certain
precincts,
protested
the
election
of
De
Mesa,
which
protest
was
docketed
as
election
case
7924,
supra,
in
the
Court
of
First
Instance
of
Rizal,
the
Honorable
Eulogio
Mencias
presiding.
In
his
return
to
the
protest,
De
Mesa
traversed
the
charges,
and,
in
a
counter-‐protest
incorporated
therein,
sought
to
shift
responsibility
for
irregularities
to
the
protestant
and
his
followers,
impugning
in
view
thereof
the
results
in
some
thirteen
precincts.
On
March
18,
1964,
however,
an
assassin's
bullet
felled
De
Mesa,
and,
forthwith,
vice-‐mayor
Loresca
was,
by
operation
of
law,
duly
installed
as
his
successor.
Notice
of
De
Mesa's
demise
was
given
on
April
22,
1964
to
the
court
a
quo
thru
a
"Constancia"
filed
by
the
decedent's
counsel
of
record,
in
which
they
also
indicated
their
belief
that,
by
reason
of
said
death,
their
authority
as
such
counsel
was
terminated.
In
the
election
case,
meanwhile,
the
protestant
Argana
moved
for
the
constitution
of
committees
on
revision
of
ballots.
Expressly
to
hear
protestee's
view
thereon
and
to
afford
him
a
chance
to
propose
his
commissioners,
this
motion
was
set
for
hearing
but,
quite
understandably,
no
appearance
was
entered
for
the
deceased
protestee.
Accordingly,
on
May
6,
1964,
the
court
a
quo
required
the
protestee's
widow
and
children
to
appear
within
fifteen
days
from
notice
in
order
to
be
substituted
for
said
protestee,
if
they
so
desired.
They
did
not,
however,
comply.
Taking
no
further
action
in
the
premises,
the
trial
court
left
the
matter
at
that.
Then
proceeding
ex
parte,
on
June
11,
1964,
the
protestant
Argana
reiterated
his
move
for
the
appointment
of
commissioners
on
revision
of
ballots,
but
this
time
without
proposing
any
provision
for
representation
for
the
protestee
whose
widow
and
children
he
sought
to
be
declared
"non-‐suited."
On
June
23,
1964,
without
notice
to
the
protestee
and/or
his
legal
representative
—
as
indeed
none
had
thus
far
been
named
—
the
trial
court
granted
the
motion
aforesaid.
With
the
constitution
of
the
committee
on
revision
of
ballots
in
which,
incidentally,
Ramon
Antilon
Jr.
was
motu
proprio
named
and
then
served
as
commissioner
for
the
deceased
protestee,
the
completion
of
the
proceedings
on
revision,
and
the
submission
of
the
report
thereon,
the
trial
court,
in
its
decision
of
August
10,
1964,
adjudged
the
protestant
Maximino
A.
Argana
as
the
duly
elected
mayor
of
Muntinlupa,
Rizal
in
the
1963
elections,
and
taxed
the
costs
and
expenses
of
the
protest
against
the
estate
of
the
deceased
protestee
Francisco
De
Mesa.
On
August
17,
1964,
within
the
reglementary
period
for
the
finality
of
the
decision
aforesaid,
a
three-‐pronged
move
was
taken
by
De
Mesa's
widow,
Magdalena
Sibulo
Vda.
de
De
Mesa,
and
the
local
chapter
of
the
Liberal
Party
of
which
the
deceased
protestee
was
a
member,
thru
its
president
and
secretary.
First,
they
sought
leave
to
represent
the
deceased
protestee,
invoking
specifically
said
protestee's
interest
to
keep
his
political
opponent
out
of
the
contested
office
in
order
to
maintain
his
successor
therein,
which
interest
was
not
abated
by
his
death;
second,
they
moved
for
the
reconsideration
of
the
August
10,
1964
decision
and/or
for
new
trial
based,
inter
alia,
upon
the
ground
that,
for
failure
to
order
the
protestant
to
procure
the
appointment
of
a
legal
representative
of
the
deceased
protestee
after
his
widow
and
children
had
failed
to
appear,
pursuant
to
the
applicable
provisions
of
the
Rules
of
Court,
it
was
legally
improper
for
the
trial
court
to
have
proceeded
ex
parte
with
the
election
case;
and
third,
they
filed
a
"Cautionary
Notice
of
Appeal"
in
anticipation
of
the
possible
denial
of
their
said
motion
for
reconsideration
and
new
trial.
Pleading
lack
of
personality
both
of
De
Mesa's
widow
and
the
local
Liberal
Party
Chapter
to
intervene
in
the
case,
as
well
as
the
absence
of
any
ground
for
a
new
trial,
the
protestant
opposed
the
foregoing
moves.
To
the
opposition,
the
movant
below
filed
their
reply.
On
September
25,
1964
the
court
a
quo,
subscribing
to
the
position
taken
by
the
protestant,
denied
the
movants'
petition
for
leave
to
represent
the
deceased
protestee,
and
order
stricken
from
the
record
their
motion
for
reconsideration
and
new
trial
and
their
cautionary
notice
of
appeal.
On October 6, 1964 Argana qualified as mayor and assumed office.
Forthwith,
on
October
7,
1964
the
movants
aforesaid
gave
notice
of
their
intention
to
take
the
matter
on
appeal
to
the
Court
of
Appeals.
This
was
met
with
the
protestant's
motion
to
strike
out
their
notice
of
appeal,
grounded
on
the
trial
court's
finding
of
movants'
want
of
personality
to
appear
in
the
case,
and
consequently
to
appeal
the
decision
a
quo.
In
the
meantime,
Demetrio
R.
Loresca
made
common
cause
with
De
Mesa's
widow
and
the
local
Liberal
Party
Chapter,
and
moved
for
leave
to
be
added
to
and/or
substituted
as
party-‐protestee,
claiming
a
legal
and
continuing
interest
in
the
outcome
of
the
election
protest
as
successor
to
De
Mesa.
On
November
10,
1964
the
trial
court
dictated
twin
order
(1)
granting
the
protestant's
motion
to
strike
out
the
notice
of
appeal
heretofore
adverted
to;
and
(2)
denying
Loresca's
motion
to
be
substituted
a
party-‐protestee.
This
development
sent
the
herein
petitioners
to
the
Court
of
Appeals
on
a
petition
for
certiorari
and
mandamus,
with
preliminary
injunction
(CA
35019-‐R),
to
nullify
for
lack
of
jurisdiction
the
proceedings
taken
by
the
trial
court
in
the
election
case
aforesaid
without
allowing
the
intervention
and/or
the
inclusion
of
a
legal
representative
of
the
deceased
protestee;
or,
in
the
alternative,
to
compel
the
trial
court
to
give
due
course
to
the
petitioners'
appeal
from
the
decision
in
said
case.
Upon
bond
duly
filed
and
approved,
the
Court
of
Appeals
issued
the
writ
of
preliminary
injunction
prayed
for.
However,
upon
respondents'
motion
and
over
the
opposition
of
the
petitioners,
the
effect
of
said
writ
was
temporarily
suspended
until
the
case
was
finally
decided
by
the
Court
of
Appeals.
Appropriate
proceedings
having
been
had
in
the
case,
the
latter
court,
besides
finding
the
inapplicability
to
election
cases
of
the
provisions
of
Section
17,
Rule
3
of
the
Rules
of
Court
on
substitution
of
parties
in
case
of
death,
opined
that
the
petitioners
likewise
lacked
the
legal
standing
and/or
capacity
to
appear
in
election
case
7924
aforesaid
and/or
to
appeal
from
the
decision
rendered
therein,
and
that
furthermore
while
the
petitioner
Loresca
may
have
had
such
personality
he
nevertheless
failed
to
timely
invoke
the
same
to
protect
his
interests.
Accordingly,
it
denied
the
petition
for
certiorari
and
mandamus
and
consequently
permanently
dissolved
the
writ
of
preliminary
injunction
theretofore
issued.
The
vital
issue,
to
which
all
other
issues
appear
to
be
subsidiary,
is
the
determination
of
the
legal
effect
of
the
proceedings
taken
by
the
trial
court
in
the
election
contest
before
it
subsequent
to
the
demise
of
the
protestee
De
Mesa.
As
we
approach
this
question,
certain
postulates
project
themselves
to
the
fore.
It
is
axiomatic
that
an
election
contest,
involving
as
it
does
not
only
the
adjudication
and
settlement
of
the
private
interests
of
the
rival
candidates
but
also
the
paramount
need
of
dispelling
once
and
for
all
the
uncertainty
that
beclouds
the
real
choice
of
the
electorate
with
respect
to
who
shall
discharge
the
prerogatives
of
the
offices
within
their
gift,
is
a
proceeding
imbued
with
public
interest
which
raises
it
onto
a
plane
over
and
above
ordinary
civil
actions.
For
this
reason,
broad
perspectives
of
public
policy
impose
upon
courts
the
imperative
duty
to
ascertain
by
all
means
within
their
command
who
is
the
real
candidate
elected
in
as
expeditious
a
manner
as
possible,
without
being
fettered
by
technicalities
and
procedural
barriers
to
the
end
that
the
will
of
the
people
may
not
be
frustrated
(Ibasco
vs.
Ilao,
et
al.,
G.R.
L-‐17512,
December
29,
1960;
Reforma
vs.
De
Luna,
G.R.
L-‐13242,
July
31,
1958).
So
inextricably
intertwined
are
the
interests
of
the
contestants
and
those
of
the
public
that
there
can
be
no
gainsaying
the
logic
of
the
proposition
that
even
the
voluntary
cessation
in
office
of
the
protestee
not
only
does
not
ipso
facto
divest
him
of
the
character
of
an
adversary
in
the
contest
inasmuch
as
he
retains
a
party
interest
to
keep
his
political
opponent
out
of
the
office
and
maintain
therein
his
successor,
but
also
does
not
in
any
manner
impair
or
detract
from
the
jurisdiction
of
the
court
to
pursue
the
proceeding
to
its
final
conclusion
(De
Los
Angeles
vs.
Rodriguez,
46
Phil.
595,
597;
Salcedo
vs.
Hernandez,
62
Phil.
584,
587;
Galves
vs.
Maramba,
G.R.
L-‐13206).
Upon
the
same
principle,
the
death
of
the
protestee
De
Mesa
did
not
abate
the
proceedings
in
the
election
protest
filed
against
him,
and
it
may
be
stated
as
a
rule
that
an
election
contest
survives
and
must
be
prosecuted
to
final
judgment
despite
the
death
of
the
protestee.
With
the
death
of
De
Mesa,
however,
a
contingency
not
expressly
provided
for
by
the
Revised
Election
Code
was
ushered
in.
Nevertheless,
the,
hiatus
in
the
special
law
posed
no
impediment
to
the
course
of
the
proceedings
because,
precisely
by
express
mandate
of
Rule
134
of
the
Rules
of
Court,
said
rules,
though
not
generally
applicable
to
election
cases,
may
however
be
applied
"by
analogy
or
in
a
suppletory
character
and
whenever
practicable
and
convenient."
For
the
eventuality
here
involved,
the
Rules
specifically
plot
the
course
of
action
to
be
taken,
in
the
following
language:
SEC.
17.
Death
of
party.—After
a
party
dies
and
the
claim
is
not
thereby
extinguished,
the
court
shall
order,
upon
proper
notice,
the
legal
representative
of
the
deceased
to
appear
and
to
be
substituted
for
the
deceased,
within
a
period
of
thirty
(30)
days,
or
within
such
time
as
may
be
granted.
If
the
legal
representative
fails
to
appear
within
said
time,
the
court
may
order
the
opposing
party
to
procure
the
appointment
of
a
legal
representative
of
the
deceased
within
a
time
to
be
specified
by
the
court,
and
the
representative
shall
immediately
appear
for
and
on
behalf
of
the
interest
of
the
deceased.
.
.
.
(Rule
3.)
That
the
applicability
of
the
foregoing
precept
to
the
election
contest
below
was
initially
conceded
is
borne
out
by
the
proceedings
on
record.
The
trial
court,
it
will
be
recalled
in
its
order
of
May
6,
1964,
required
the
widow
and
children
of
the
deceased
protestee
to
appear
and
be
substituted
for
and
on
his
behalf
and
to
protect
his
interest
in
the
case.
But
when
they
failed
to
comply
—
mainly
because
of
the
shock
and
agony
that
followed
in
the
wake
of
the
violent
death
of
the
protestee
—
the
trial
court
took
no
further
steps
in
the
premises
and,
instead,
at
the
instance
of
the
protestant,
declared
said
widow
and
children
non-‐suited,
proceeded
with
the
case
ex
parte,
and
effectively
blocked
all
attempts
at
intervention
and/or
substitution
in
behalf
of
the
deceased
protestee.
In
these
moves,
the
trial
court
did
not
only
merit
the
unqualified
sanction
of
the
Court
of
Appeals
but
the
latter,
taking
an
even
more
radical
of
the
matter,
actually
held
that
the
rule
relied
upon
has
no
application
to
election
cases.
We
cannot
give
our
imprimatur
to
the
foregoing
view.
All
reasonable
intendments
deducible
from
the
law
and
the
essential
nature
of
the
case
involved,
to
our
mind,
unerringly
tend
to
the
contrary.
All
the
very
least,
nothing
extant
in
the
Revised
Election
Code
either
expressly
or
by
implication
renders
inappropriate
the
application
of
said
principle
of
substitution
in
case
of
death
to
proceedings
thereunder.
On
the
contrary,
because
of
its
clear
failure
to
meet
the
contingency
in
question,
the
need
to
supplement
the
deficiency
becomes
imperative.
Then
the
exertion
of
judicial
power
to
hear
and
determine
a
cause
implicitly
presupposes
in
the
trial
court,
amongst
other
essentials,
jurisdiction
over
the
persons
of
the
parties.
That
jurisdiction
was
inevitably
impaired
upon
the
death
of
the
protestee
pending
the
proceedings
below
such
that
unless
and
until
a
legal
representative
is
for
him
duly
named
and
within
the
jurisdiction
of
the
trial
court,
no
adjudication
in
the
cause
could
have
been
accorded
any
validity
or
binding
effect
upon
any
party,
in
representation
of
the
deceased,
without
trenching
upon
the
fundamental
right
to
a
day
in
court
which
is
the
very
essence
of
the
constitutionally
enshrined
guarantee
of
due
process.
As
cogently
synthesized
in
Cupples
vs.
Castro,
137
P.
2d.,
755
—
Where
contestant
was
declared
elected
and
contestee
appealed
after
which
contestant
died,
rights
of
parties
could
not
be
determined
in
absence
of
contestant
and
his
legal
representative
and
submission
would
be
set
aside
and
cause
taken
from
calendar
to
be
heard
only
after
representative
for
contestant
should
have
been
substituted.
(Francisco,
The
Revised
Election
Code,
1957
ed.,
p.
583).
If
this
be
the
case
with
the
contestant,
a
fortiori
no
less
can
be
said
of
the
contestee
whose
rights
as
well
as
those
of
his
successor
by
operation
of
law
would
be
at
hazard
in
an
ex
parte
proceeding.
Further
still,
the
fundamental
purpose
of
the
Revised
Election
Code,
it
has
been
recognized,
is
to
protect
the
integrity
of
elections
and
suppress
all
evils
that
may
vitiate
their
purity
and
defeat
the
popular
will.
Judicial
experience
teaches
that
more
often
than
not
frauds
and
irregularities
committed
during
the
voting
come
to
light
only
when
the
ballot
boxes
are
opened
and
their
contents
examined.
At
no
time
then
in
the
course
of
an
election
contest
is
the
need
for
vigilance
more
to
be
insisted
upon
than
during
that
critical
stage
when
the
ballot
boxes
are
opened
and
the
ballots
themselves
are
revised.
To
deny
a
party
to
the
contest
the
representation
that
the
law
allows
him
at
this
juncture
is
virtually
to
take
away
one
of
the
most
effective
measures
designed
for
the
approximation
of
the
primordial
objective
election
laws
are
intended
to
achieve.
In
the
light
of
the
foregoing,
it
is
our
considered
view
that
Section
17,
Rule
3
of
the
Rules
of
Court
applies
to
election
contests
to
the
same
extent
and
with
the
same
force
and
effect
as
it
does
in
ordinary
civil
actions.
And
we
declare
that
unless
and
until
the
procedure
therein
detailed
is
strictly
adhered
to,
proceedings
taken
by
a
court
in
the
absence
of
a
duly
appointed
legal
representative
of
the
deceased
protestee
must
be
stricken
down
as
null
and
void.
Considering
that,
in
the
case
at
bar,
the
trial
court
failed
to
order
the
protestant
to
procure
the
appointment
of
a
legal
representative
of
the
deceased
protestee
after
the
latter's
widow
and
children
had
failed
to
comply
with
the
court
order
requiring
their
appearance
to
be
substituted
in
lieu
of
their
predecessor,
but
instead
—
in
derogation
of
the
precepts
of
the
Rule
in
question
and
in
the
total
absence
of
a
legal
representative
of
the
deceased
protestee
—
proceeded
ex
parte
with
the
election
case,
said
court
not
only
acted
with
grave
abuse
of
discretion
but
actually
committed
a
clear
extra-‐limitation
of
its
lawful
jurisdiction
which,
perforce,
tainted
all
its
proceedings
with
the
indelible
stigma
of
nullity
(Barrameda,
et
al.
vs.
Barbara,
90
Phil.
718,
722,
723;
Ferreria
vs.
Ibarra
Vda.
de
Gonzales,
et
al.,
55
O.G.
No.
8,
1358,
136263;
Sarmiento,
etc.,
et
al.
vs.
Ortiz,
et
al.,
G.R.
L-‐18583,
January
31,
1964;
Caisip
vs.
Cabangon,
G.R.
L-‐14684-‐14686,
August
26,
1960).
It
is
no
argument
against
this
conclusion
to
contend
that
the
requirement
for
the
procurement
of
a
legal
representative
of
a
deceased
litigant
is
couched
in
the
permissive
term
"may"
instead
of
the
mandatory
word
"shall."
While
the
ordinary
acceptations
of
these
terms
may
indeed
be
resorted
to
as
guides
in
the
ascertainment
of
the
mandatory
or
directory
character
of
statutory
provisions,
they
are
in
no
wise
absolute
and
inflexible
criteria
in
the
vast
areas
of
law
and
equity.
Depending
upon
a
consideration
of
the
entire
provision,
its
nature,
its
object
and
the
consequences
that
would
follow
from
construing
it
one
way
or
the
other,
the
convertibility
of
said
terms
either
as
mandatory
or
permissive
is
a
standard
recourse
in
statutory
construction.
Thus,
Black
is
authority
for
the
rule
that
"Where
the
statute
provides
for
the
doing
of
some
act
which
is
required
by
justice
or
public
duty,
or
where
it
invests
a
public
body,
municipality
or
public
officer
with
power
and
authority
to
take
some
action
which
concerns
the
public
interest
or
rights
of
individuals,
the
permissive
language
will
be
construed
as
mandatory
and
the
execution
of
the
power
may
be
insisted
upon
as
a
duty"
(Black,
Interpretation
of
Laws,
pp.
540-‐543).
The
matter
here
involved
not
only
concerns
public
interest
but
also
goes
into
the
jurisdiction
of
the
trial
court
and
is
of
the
essence
of
the
proceedings
taken
thereon.
On
this
point,
there
is
authority
to
the
effect
that
in
statutes
relating
to
procedure,
as
is
the
one
now
under
consideration,
every
act
which
is
jurisdictional,
or
of
the
essence
of
the
proceedings,
or
is
prescribed
for
the
protection
or
benefit
of
the
party
affected,
is
mandatory
(Gonzaga,
Statutes
and
their
Construction,
p.
98,
citing:
Estate
of
Naval,
G.R.
No.
L-‐6736,
May
4,
1954).
The
present
case
is
well
within
the
purview
of
this
doctrine.
Nor
may
the
motu
proprio
appointment
by
the
trial
court
of
Ramon
Antilon
Jr.
as
commissioner
for
the
deceased
protestee
in
the
revision
proceedings
be
decreed
a
substantial
compliance
with
the
legal
requirement.
As
aptly
observed
in
the
dissent
to
the
decision
under
review,
said
commissioner
was
not
the
legal
representative
contemplated
by
the
Rules
to
be
substituted
for
the
deceased
protestee.
Said
commissioner
was
not
supposed
to
represent
the
protestee
as
a
party
litigant.
His
appointment
as
such
was
made
exclusively
upon
the
initiative
of
the
trial
court
and
is
authorized
by
the
law.
Section
175,
Revised
Election
Code,
merely
as
a
time-‐
saving
device
for
the
convenience
of
the
court
and
the
parties
in
the
purely
mechanical
operation
of
opening
the
ballots
and
tabulating
the
count
and
in
the
interest
of
a
speedy
and
expeditious
revision
and
recount
of
the
contested
ballots
(Hontiveros
vs.
Altavas,
24
Phil.
632,
649-‐650;
Raymundo
vs.
Gonzales,
80
Phil.
719,
721).
For
all
legal
intents
and
purposes,
while
said
commissioner's
appointment
may
be
proposed
by
the
contestants
themselves,
he
is
nevertheless
exclusively
an
officer
or
an
agent
of
the
court
under
its
direct
control
and
supervision.
Equally
unacceptable
is
the
proposition
that,
because
time
is
of
the
essence
in
an
election
contest,
recourse
to
the
appointment
of
a
legal
representative
of
a
deceased
protestee
which
can
only
protract
and
delay
the
progress
of
the
case
is
but
a
finical
matter
of
procedure
which
can
justifiably
be
dispensed
with.
The
validity
of
the
injunction
for
the
prompt
disposal
of
election
controversies
as
repeatedly
postulated
in
a
consistent
array
of
jurisprudence
is
not
open
to
debate.
The
terms
of
office
of
elective
officials
are
relatively
brief.
To
dissipate
within
the
shortest
time
possible
any
aura
of
doubt
upon
the
true
result
of
elections
is
a
much
sought-‐after
desideratum.
But,
salutary
though
the
precept
may
be,
it
is
no
justification
for
cutting
procedural
corners
or
taking
legal
short
cuts
not
warranted
in
a
system
of
procedure
where
the
rule
of
law
is
still
held
paramount
over
and
above
all
considerations
of
mere
convenience
and
expediency.
We
would
be
the
last
to
advocate
a
departure
from
the
policy
of
early
settlement
of
electoral
disputes,
but
we
are
not
prepared
to
lend
our
approval
to
a
course
of
action
which
would
tend
to
achieve
one
object
of
desire
at
the
expense
of
the
orderly
administration
of
justice
and
with
the
sacrifice
of
the
fundamental
right
of
litigants
to
due
process
of
law.
Otherwise,
the
speedy
trial
required
by
the
law
would
be
converted
into
a
denial
of
justice
(Querubin
vs.
Court
of
Appeals,
82
Phil.
226,
230).
In
law
—
as
in
any
other
sphere
of
human
relations
—
the
end
very
seldom,
if
at
all,
justifies
the
means.
And,
in
the
case
at
bar,
the
admittedly
imperative
demand
for
a
speedy
disposition
of
the
controversy
cannot
deter
our
hand
from
striking
down
illegality
in
the
proceedings
therein
and
remanding
the
case
for
new
trial,
despite
the
concomitant
delay
that
may
be
occasioned
thereby,
since
that
is
the
only
course
open
if
the
ends
of
justice
are
to
be
subserved
(Salcedo
vs.
Hernandez,
62
Phil.
584,
587).
Consequent
to
the
conclusion
we
have
just
reached,
we
confront
the
issue
of
who
is
the
legal
representative
of
the
deceased
protestee
entitled
to
be
substituted
in
his
stead.
As
the
record
of
the
case
reveals,
three
different
aspirants
vied
for
that
legal
representation:
Demetrio
R.
Loresca,
the
vice-‐mayor
who
succeeded
to
the
position
of
mayor
upon
the
protestee's
demise;
Magdalena
Sibulo
Vda.
de
De
Mesa,
the
protestee's
widow;
and
the
local
chapter
of
the
Liberal
Party
at
Muntinlupa,
Rizal,
to
which
the
deceased
protestee
belonged,
as
represented
by
its
officers
who
are
co-‐petitioners
herein.
An
examination
of
the
countervailing
interests
of
these
parties
seems
in
order.
By
virtue
of
Section
7
of
the
Local
Autonomy
Act,
Republic
Act
2264,
the
vice-‐mayor
stands
next
in
line
of
succession
to
the
mayor
in
case
of
a
permanent
vacancy
in
the
latter's
position.
Upon
the
death
of
the
protestee
mayor
in
the
case
at
bar,
Loresca
as
then
incumbent
vice-‐mayor
succeeded
by
operation
of
law
to
the
vacated
office
and,
as
a
matter
of
right,
is
entitled
to
occupy
the
same
for
the
unexpired
term
thereof
or
until
the
protest
against
his
predecessor
is
decided
adversely
against
the
latter.
The
outcome
of
that
contest
thus
bears
directly
upon
his
right
to
his
present
position
and,
amongst
all,
he
is
the
person
most
keenly
concerned
and
interested
in
the
fair
and
regular
conduct
thereof
in
order
that
the
true
will
of
the
electorate
will
be
upheld.
His
status
as
a
real
party
in
interest
in
the
continuation
of
the
proceedings
—
a
fact
conceded
by
the
decision
under
review
itself
—
cannot
thus
be
disputed.
It
is
not
correct
to
subject
Loresca,
as
the
Court
of
Appeals
did,
respecting
his
interest
in
the
controversy
to
the
operation
of
the
equitable
principle
of
laches.
The
initiative
to
cause
his
substitution
in
lieu
of
the
deceased
protestee
was
not
Loresca's.
It
was
the
trial
court's
as
well
as
the
protestant's
duty,
upon
being
apprised
of
the
protestee's
death,
to
cause
the
appointment
of
his
legal
representative
according
to
the
procedure
delineated
in
the
Rules.
Failing
in
this
duty,
it
never
became
the
obligation
of
Loresca
to
take
it
upon
himself
to
be
appointed
as
such
legal
representative,
as
in
fact,
he
was
not
even
duly
and
seasonably
notified,
much
less
ordered,
to
appear
and
be
so
substituted.
In
this
posture,
and
particularly
because,
as
above
held,
the
trial
court
did
not
even
acquire
jurisdiction
over
him,
no
room
exists
for
the
operation
of
the
rule
on
laches
against
him.
His
intervention
should
not
have
been
denied.
The
same
cannot,
however,
be
said
of
the
protestee's
widow
or
of
the
local
Liberal
Party
chapter
of
Muntinlupa.
The
protestee's
claim
to
the
contested
office
is
not
in
any
sense
a
right
transmissible
to
this
widow
or
heirs.
Said
widow's
only
remaining
interest
in
the
outcome
of
the
case
is
limited
to
no
more
than
the
possible
award
of
costs
against
the
deceased
protestee.
Besides
not
being
such
an
interest
as
would
justify
her
substitution
for
her
deceased
husband
as
an
indispensable
legal
representative,
the
right
to
such
an
award
if
eventually
made
has
already
been
waived
by
the
protestant
Argana.
This
effectively
withdraws
the
widow
from
the
picture
altogether.
Much
less
has
the
local
Liberal
Party
Chapter
any
claim
to
substitution.
Not
being
duly
incorporated
as
a
juridical
person,
it
can
have
no
personality
to
sue
or
be
sued
as
such.
And
while
it
conceivably
may
derive
some
indirect
benefit
consequent
to
the
resolution
of
the
contest
in
favor
of
the
deceased
protestee,
neither
the
chapter
itself
nor
the
officers
thereof
would
become
entitled
thereby
to
any
right
to
the
contested
office
in
case
of
a
favorable
judgment,
nor,
for
that
matter,
do
they
stand
to
sustain
any
direct
prejudice
in
case
of
an
adverse
one.
No
basis
therefore
exists
upon
which
to
predicate
their
claim
to
substitution.
The
foregoing
views
render
academic
the
alternative
issue
raised
by
the
petitioners
regarding
the
propriety
of
their
appeal
from
the
trial
court's
decision
in
the
main
case.
ACCORDINGLY, the judgment under review is reversed and in lieu thereof, another is rendered —
(1)
Declaring
null
and
void
the
judgment
of
the
Court
of
First
Instance
of
Rizal
in
election
case
7924
thereof,
dated
August
10,
1964,
which
proclaimed
the
protestant
Maximino
A.
Argana
the
duly
elected
mayor
of
Muntinlupa,
Rizal
in
the
1963
elections,
for
having
been
rendered
without
jurisdiction
over
the
person
of
the
legal
representative
of
the
deceased
protestee
Francisco
de
Mesa
and
all
other
proceedings
taken
by
said
court
in
said
election
case
subsequent
to
the
death
of
the
said
protestee;
(2)
Ordering
the
protestant
Maximino
A.
Argana,
without
delay,
to
vacate
the
office
of
the
mayor
of
Muntinlupa,
Rizal
and
to
relinquish
the
same
in
favor
of
Demetrio
R.
Loresca;
and
(3)
Ordering
the
Court
of
First
Instance
of
Rizal
to
forthwith
appoint
the
petitioner
Demetrio
R.
Loresca
as
the
legal
representative
of
the
deceased
protestee
Francisco
de
Mesa
and
allow
his
appearance
as
such
in
substitution
of
the
said
deceased
for
purposes
of
said
election
case
7924
of
said
court,
to
conduct
a
new
trial
in
said
election
case,
and
thereafter
to
render
judgment
therein
as
the
evidence
may
warrant.
Concepcion,
C.J.,
Reyes,
J.B.L.,
Dizon,
Regala,
Makalintal,
Bengzon,
J.P.,
Zaldivar
and
Sanchez,
JJ.,
concurs.
Barrera,
J.,
is
on
leave.
(12)
Llenares
vs
Valdeavella,
G.R.
No.
L-‐21572,
October
4,
1994
This
is
an
action
in
ejectment,
the
plaintiff
alleging
that
she
is
the
owner
of
two
parcels
of
land
in
the
barrio
of
Wacas,
municipality
of
Tayabas,
having
acquired
said
parcels
by
purchase
at
a
sheriff's
sale
under
a
writ
of
execution
issued
by
the
justice
of
the
peace
of
the
municipality
of
Tayabas
in
a
case
in
which
she
was
the
plaintiff
and
the
defendant
Felisa
Valdeavella
and
her
now
deceased
husband
Zacarias
Zabella
were
the
defendants.
The
defendants
Felisa
Valdeavella
and
Alfonso
Zoreta
in
their
answer
allege
that
Felisa
Valdeavella
never
has
been
in
possession
of
the
parcels
as
owner;
that
she
and
her
husband
some
four
years
prior
to
the
filing
of
the
answer
(October
22,
1918)
were
in
possession
of
the
land
as
tenants
of
Irineo
Valdeavella,
the
true
owner
of
the
land;
and
that
the
defendant
Alfonso
Zoreta
has
been
in
possession
under
an
agreement
made
with
Zacarias
Zabella
whereby
Zoreta
was
to
have
the
use
and
benefit
of
the
land
as
security
for
a
debt
of
P100.
Subsequent
to
the
filing
of
this
answer
Irineo
Valdeavella
was
impleaded.
In
his
answer
he
alleges
that
he
is
the
owner
of
the
land
and
has
been
in
possession
thereof
for
over
fifteen
years.
The
court
below
rendered
judgment
in
favor
of
the
defendants
holding
that
Irineo
Valdeavella
was
the
owner
of
the
parcels
of
land
in
question
and
that,
moreover,
the
sheriff's
sale
under
which
the
plaintiff
claims
title
to
the
land
was
irregular
and
void
inasmuch
as
there
had
not
been
a
sufficient
levy
on
the
lands,
nor
a
sufficient
notice
of
the
sale.
From
this
judgment
the
plaintiff
appeals
to
this
court.
In
her
first
assignment
of
error
the
appellant
maintains
that
the
court
erred
in
holding
that
Irineo
Valdeavella
was
the
owner
of
the
land
at
the
time
of
the
attempted
levy
of
the
execution.
In
our
opinion,
this
assignment
of
error
is
well
taken.
The
testimony
in
support
of
the
claim
of
Ireneo
Valdeavella
is
so
contradictory
and
inconsistent
that
no
reliance
whatever
can
be
placed
thereon.
Under
the
second
assignment
of
error
the
appellant
argues
that
the
sale,
under
execution
by
virtue
of
which
she
claims
ownership
of
the
land,
was
valid.
This
assignment
cannot
be
sustained.
The
levy
of
an
execution
is
defined
as
the
acts
by
which
an
officer
sets
apart
of
appropriates
for
the
purpose
of
satisfying
the
command
of
the
writ,
a
part
or
the
whole
of
a
judgment
debtor's
property.
In
the
absence
of
statutory
provisions
no
special
formalities
are
required
for
a
valid
levy,
and
in
regard
to
real
property
it
has
usually
been
held
sufficient
if
the
seizure
of
the
property
is
made
known
to
the
occupants
thereof
and
endorsed
on
the
writ.
But
it
is
otherwise
where,
as
in
this
jurisdiction,
the
matter
is
regulated
by
statute;
there
a
substantial
compliance
with
the
statute
is
indispensable.
The
statutory
provisions
to
this
case
are
found
in
sections
450
and
429
of
the
Code
of
Civil
Procedure.
Section
450
states
that
property
"may
be
attached
on
execution
in
like
manner
as
upon
writs
of
attachment."
This
provision
while
permissive
in
form
must,
nevertheless,
be
regarded
as
mandatory.
No
other
method
of
effecting
the
levy
is
prescribed
and
it
is
an
old
rule
that
powers
through
the
exercise
of
which
a
person
may
be
divested
of
his
property
are
always
strictly
construed
and
that
the
provisions
regulating
the
procedure
in
their
exercise
are
mandatory
as
to
the
essence
of
the
thing
to
be
done.
(Lewis'
Sutherland
on
Statutory
Construction,
2d
ed.,
sec.
627.)
chanrobles
virtual
law
library
‘Real
property,
standing
upon
the
records
in
the
name
of
the
defendant
or
not
appearing
at
all
upon
the
record.
shall
be
attached
by
filing
with
the
registrar
of
titles
of
land
for
the
province
in
which
the
land
is
situated,
a
copy
of
the
order
of
attachment,
together
with
a
description
of
the
property
attached,
and
a
notice
that
it
is
attached,
and
by
leaving
a
similar
copy
of
the
order,
description
and
notice
with
an
occupant
of
the
property,
if
there
is
one.’
Real
property
or
an
interest
therein,
belonging
to
the
defendant
and
held
by
any
other
person,
or
standing
on
the
records
in
the
name
of
any
other
person,
shall
be
attached
by
filing
with
the
registrar
of
land
titled
in
the
province
in
which
the
land
is
situated,
a
copy
of
the
order
of
attachment,
together
with
a
description
of
the
property,
and
a
notice
that
such
real
property
and
any
interest
of
the
defendant
therein,
held
by
or
standing
in
the
name
of
such
other
person
(naming
him)
are
attached;
and
by
leaving
with
the
occupant,
if
any,
and
with
such
other
person,
or
his
agent,
if
known
and
within
the
province,
a
copy
of
the
order,
description
and
notice.
The
registrar
must
index
attachment
filed
under
the
first
paragraph
of
this
section,
in
the
names,
both
of
the
plaintiff
and
of
the
defendant,
and
must
index
attachments
filed
under
the
second
paragraph
of
this
section,
in
the
names
of
the
plaintiff
and
of
the
defendant
and
of
the
person
by
whom
the
property
is
held
or
in
whose
name
it
stands
on
the
records.
In
the
present
case
it
is
admitted
by
the
plaintiff
that
notice
of
attachment
for
the
execution
was
not
filed
with
the
registrar
of
deeds
and
that
there
was
no
copy
thereof
served
on
the
defendants.
It
is
therefore
clear
that
the
attempted
levy
was
not
made
in
accordance
with
the
provisions
of
the
statute,
and,
according
to
the
great
weight
of
authority,
a
proper
levy
is
indispensable
to
a
valid
sale
on
execution.
A
sale
unless
preceded
by
a
valid
levy,
is
void,
and
the
purchaser
acquires
no
title.
(Leath
vs.
Deweese,
162
Ky.,
227;
Jarboe
vs.
Hall,
37
Md.,
345.)
chanrobles
virtual
law
library
There
having
been
no
sufficient
levy
of
the
execution
in
question,
the
plaintiff
took
to
the
property
sold
thereunder
and
the
present
action
can
therefore
not
be
maintained.
The judgment appealed from is affirmed, without costs. So ordered.
“Every”
(13)
National
Housing
Corp.
vs
Juco,
G.R.
No.
L-‐64313,
January
17,
1985
Are
employees
of
the
National
Housing
Corporation
(NHC)
covered
by
the
Labor
Code
or
by
laws
and
regulations
governing
the
civil
service?
The background facts of this case are stated in the respondent-‐appellee's brief as follows:
The
records
reveal
that
private
respondent
(Benjamin
C.
Juco)
was
a
project
engineer
of
the
National
Housing
Corporation
(NHC)
from
November
16,
1970
to
May
14,
1975.
For
having
been
implicated
in
a
crime
of
theft
and/or
malversation
of
public
funds
involving
214
pieces
of
scrap
G.I.
pipes
owned
by
the
corporation
which
was
allegedly
committed
on
March
5,
1975.
Juco's
services
were
terminated
by
(NHC)
effective
as
of
the
close
of
working
hours
on
May
14,
1975.
On
March
25,
1977
he
filed
a
complaint
for
illegal
dismissal
against
petitioner
(NHC)
with
Regional
Office
No.
4,
Department
of
Labor
(now
Ministry
of
Labor
and
Employment)
docketed
as
R04-‐3-‐3309-‐77
(Annex
A,
Petition).
The
said
complaint
was
certified
by
Regional
Branch
No.
IV
of
the
NLRC
for
compulsory
arbitration
where
it
was
docketed
as
Case
No.
RB-‐IV-‐12038-‐77
and
assigned
to
Labor
Arbiter
Ernilo
V.
Peñalosa.
The
latter
conducted
the
hearing.
By
agreement
of
the
parties,
the
case
was
submitted
for
resolution
upon
submission
of
their
respective
position
papers.
Private
respondent
(Juco)
submitted
his
position
paper
on
July
15,
1977.
He
professed
innocence
of
the
criminal
acts
imputed
against
him
contending
"that
he
was
dismissed
based
on
purely
fabricated
charges
purposely
to
harass
him
because
he
stood
as
a
witness
in
the
theft
case
filed
against
certain
high
officials
of
the
respondent's
establishment"
(NHC)
and
prayed
for
'his
immediate
reinstatement
to
his
former
position
in
the
(NHC)
without
loss
of
seniority
rights
and
the
consequent
payment
of
his
will
back
wages
plus
all
the
benefits
appertaining
thereto.
On
July
28,
1977,
the
NHC
also
filed
its
position
paper
alleging
that
the
Regional
Office
Branch
IV,
Manila,
NLRC,
"is
without
authority
to
entertain
the
case
for
lack
of
jurisdiction,
considering
that
the
NHC
is
a
government
owned
and
controlled
corporation;
that
even
assuming
that
this
case
falls
within
the
jurisdiction
of
this
Office,
respondent
firm
(now
petitioner)
maintains
that
respondent
(Juco),
now
private
respondent,
was
separated
from
the
service
for
valid
and
justified
reasons,
i.e.,
for
having
sold
company
properties
consisting
of
214
pieces
of
scrap
G.I.
pipes
at
a
junk
shop
in
Alabang,
Muntinlupa,
Metro
Manila,
and
thereafter
appropriating
the
proceeds
thereof
to
his
own
benefit."
The pertinent portion of the decision of respondent National Labor Relations Commission (NLRC) reads:
The
fact
that
in
the
early
case
of
Fernandez
v.
Cedro
(NLRC
Case
No.
201165-‐74,
May
19,
1975)
the
Commission,
(Second
Division)
ruled
that
the
respondent
National
Housing
Corporation
is
a
government-‐owned
or
controlled
corporation
does
not
preclude
us
from
later
taking
a
contrary
stand
if
by
doing
so
the
ends
of
justice
could
better
be
served.
For
although
adherence
to
precedents
(stare
decisis)
is
a
sum
formula
for
achieving
uniformity
of
action
and
conducive
to
the
smooth
operation
of
an
office,
Idolatrous
reverence
for
precedents
which
have
outlived
their
validity
and
usefulness
retards
progress
and
should
therefore
be
avoided.
In
fact,
even
courts
do
reverse
themselves
for
reasons
of
justice
and
equity.
This
Commission
as
an
Administrative
body
performing
quasi
judicial
function
is
no
exception.
WHEREFORE,
in
the
light
of
the
foregoing,
the
decision
appealed
from
is
hereby,
set
aside.
In
view,
however,
of
the
fact
that
the
Labor
Arbiter
did
not
resolve
the
issue
of
illegal
dismissal
we
have
opted
to
remand
this
case
to
the
Labor
Arbiter
a
quo
for
resolution
of
the
aforementioned
issue.
The
NHC
is
a
one
hundred
percent
(100%)
government-‐owned
corporation
organized
in
accordance
with
Executive
Order
No.
399,
the
Uniform
Charter
of
Government
Corporations,
dated
January
5,
1951.
Its
shares
of
stock
are
owned
by
the
Government
Service
Insurance
System
the
Social
Security
System,
the
Development
Bank
of
the
Philippines,
the
National
Investment
and
Development
Corporation,
and
the
People's
Homesite
and
Housing
Corporation.
Pursuant
to
Letter
of
Instruction
No.
118,
the
capital
stock
of
NHC
was
increased
from
P100
million
to
P250
million
with
the
five
government
institutions
above
mentioned
subscribing
in
equal
proportion
to
the
increased
capital
stock.
The
NHC
has
never
had
any
private
stockholders.
The
government
has
been
the
only
stockholder
from
its
creation
to
the
present.
There
should
no
longer
be
any
question
at
this
time
that
employees
of
government-‐owned
or
controlled
corporations
are
governed
by
the
civil
service
law
and
civil
service
rules
and
regulations.
The
Civil
Service
embraces
every
branch,
agency,
subdivision,
and
instrumentality
of
the
Government,
including
every
government-‐owned
or
controlled
corporation.
...
The 1935 Constitution had a similar provision in its Section 1, Article XI I which stated:
A Civil Service embracing all branches and subdivisions of the Government shall be provided by law.
The
inclusion
of
"government-‐owned
or
controlled
corporations"
within
the
embrace
of
the
civil
service
shows
a
deliberate
effort
of
the
framers
to
plug
an
earlier
loophole
which
allowed
government-‐owned
or
controlled
corporations
to
avoid
the
full
consequences
of
the
an
encompassing
coverage
of
the
civil
service
system.
The
same
explicit
intent
is
shown
by
the
addition
of
"agency"
and
"instrumentality"
to
branches
and
subdivisions
of
the
Government.
All
offices
and
firms
of
the
government
are
covered.
The
amendments
introduced
in
1973
are
not
Idle
exercises
or
a
meaningless
gestures.
They
carry
the
strong
message
that
t
civil
service
coverage
is
broad
and
an-‐
embracing
insofar
as
employment
in
the
government
in
any
of
its
governmental
or
corporate
arms
is
concerned.
The
constitutional
provision
has
been
implemented
by
statute.
Presidential
Decree
No.
807
is
unequivocal
that
personnel
of
government-‐owned
or
controlled
corporations
belong
to
the
civil
service
and
are
subject
to
civil
service
requirements.
It provides:
SEC.
56.
Government-‐owned
or
Controlled
Corporations
Personnel.
—
All
permanent
personnel
of
government-‐
owned
or
controlled
corporations
whose
positions
are
now
embraced
in
the
civil
service
shall
continue
in
the
service
until
they
have
been
given
a
chance
to
qualify
in
an
appropriate
examination,
but
in
the
meantime,
those
who
do
not
possess
the
appropriate
civil
service
eligibility
shag
not
be
promoted
until
they
qualify
in
an
appropriate
civil
service
examination.
Services
of
temporary
personnel
may
be
terminated
any
time.
The
very
Labor
Code,
P.
D.
No.
442
as
amended,
which
the
respondent
NLRC
wants
to
apply
in
its
entirety
to
the
private
respondent
provides:
ART.
277.
Government
employees.
—
The
terms
and
conditions
of
employment
of
all
government
employees,
including
employees
of
government-‐owned
and
controlled
corporations
shall
be
governed
by
the
Civil
Service
Law,
rules
and
regulations.
Their
salaries
shall
be
standardized
by
the
National
Assembly
as
provided
for
in
the
New
Constitution.
However,
there
shall
be
reduction
of
existing
wages,
benefits
and
other
terms
and
conditions
of
employment
being
enjoyed
by
them
at
the
time
of
the
adoption
of
the
Code.
Our
decision
in
Alliance
of
Government
Workers,
et
al
v.
Honorable
Minister
of
Labor
and
Employment
et
all.
(124
SCRA
1)
gives
the
background
of
the
amendment
which
includes
government-‐owned
or
controlled
corporations
in
the
embrace
of
the
civil
service.
We
stated:
Records
of
the
1971
Constitutional
Convention
show
that
in
the
deliberation
held
relative
to
what
is
now
Section
1(1),
Article
XII-‐B,
supra,
the
issue
of
the
inclusion
of
government-‐owned
or
controlled
corporations
figured
prominently.
The
late
delegate
Roberto
S.
Oca,
a
recognized
labor
leader,
vehemently
objected
to
the
inclusion
of
government-‐
owned
or
controlled
corporations
in
the
Civil
Service.
He
argued
that
such
inclusion
would
put
asunder
the
right
of
workers
in
government
corporations,
recognized
in
jurisprudence
under
the
1935
Constitution,
to
form
and
join
labor
unions
for
purposes
of
collective
bargaining
with
their
employers
in
the
same
manner
as
in
the
private
section
(see:
records
of
1971
Constitutional
Convention).
In
contrast,
other
labor
experts
and
delegates
to
the
1971
Constitutional
Convention
enlightened
the
members
of
the
Committee
on
Labor
on
the
divergent
situation
of
government
workers
under
the
1935
Constitution,
and
called
for
its
rectification.
Thus,
in
a
Position
Paper
dated
November
22,
197
1,
submitted
to
the
Committee
on
Labor,
1971
Constitutional
Convention,
then
Acting
Commissioner
of
Civil
Service
Epi
Rey
Pangramuyen
declared:
It
is
the
stand,
therefore,
of
this
Commission
that
by
reason
of
the
nature
of
the
public
employer
and
the
peculiar
character
of
the
public
service,
it
must
necessary
regard
the
right
to
strike
given
to
unions
in
private
industry
as
not
applying
to
public
employees
and
civil
service
employees.
It
has
been
stated
that
the
Government,
in
contrast
to
the
private
employer,
protects
the
interests
of
all
people
in
the
public
service,
and
that
accordingly,
such
conflicting
interests
as
are
present
in
private
labor
relations
could
not
exist
in
the
relations
between
government
and
those
whom
they
employ.
Moreover,
determination
of
employment
conditions
as
well
as
supervision
of
the
management
of
the
public
service
is
in
the
hands
of
legislative
bodies.
It
is
further
emphasized
that
government
agencies
in
the
performance
of
their
duties
have
a
right
to
demand
undivided
allegiance
from
their
workers
and
must
always
maintain
a
pronounced
esprit
de
corps
or
firm
discipline
among
their
staff
members.
It
would
be
highly
incompatible
with
these
requirements
of
the
public
service,
if
personnel
took
orders
from
union
leaders
or
put
solidarity
with
members
of
the
working
class
above
solidarity
with
the
Government.
This
would
be
inimical
to
the
public
interest.
Moreover,
it
is
asserted
that
public
employees
by
joining
labor
unions
may
be
compelled
to
support
objectives
which
are
political
in
nature
and
thus
jeopardize
the
fundamental
principle
that
the
governmental
machinery
must
be
impartial
and
non-‐political
in
the
sense
of
party
politics.
(See:
Records
of
1971
Constitutional
Convention).
Similar,
Delegate
Leandro
P.
Garcia,
expressing
for
the
inclusion
of
government-‐owned
or
controlled
corporations
in
the
Civil
Service,
argued:
Summarizing
the
deliberations
of
the
1971
Constitutional
Convention
on
the
inclusion
of
Government-‐owned
or
controlled
corporation
Dean
Joaquin
G.
Bernas,
SJ.,
of
the
Ateneo
de
Manila
University
Professional
School
of
Law,
stated
that
government-‐owned
corporations
came
under
attack
as
g
cows
of
a
privileged
few
enjoying
salaries
far
higher
than
their
counterparts
in
the
various
branches
of
government,
while
the
capital
of
these
corporations
belongs
to
the
Government
and
government
money
is
pumped
into
them
whenever
on
the
brink
of
disaster,
and
they
should
therefore
come
under
the
strict
surveillance
of
the
Civil
Service
System.
(Bernas,
The
1973
Philippine
Constitution,
Notes
and
Cases,
1974
ed.,
p.
524).
Applying
the
pertinent
provisions
of
the
Constitution,
the
Labor
Code
as
amended,
and
the
Civil
Service
Decree
as
amended
and
the
precedent
in
the
Alliance
of
Government
Workers
decision,
it
is
clear
that
the
petitioner
National
Housing
Corporation
comes
under
the
jurisdiction
of
the
Civil
Service
Commission,
not
the
Ministry
of
Labor
and
Employment.
This
becomes
more
apparent
if
we
consider
the
fact
that
the
NHC
performs
governmental
functions
and
not
proprietary
ones.
The NHC was organized for the governmental objectives stated in its amended articles of incorporation as follows:
SECOND:
That
the
purpose
for
which
the
corporation
is
organized
is
to
assist
and
carry
out
the
coordinated
massive
housing
program
of
the
government,
principally
but
not
limited
to
low-‐cost
housing
with
the
integration
cooperation
and
assistance
of
all
governmental
agencies
concerned,
through
the
carrying
on
of
any
or
all
the
following
activities:
l)
The
acquisition,
development
or
reclamation
of
lands
for
the
purpose
of
construction
and
building
therein
preferably
low-‐cost
housing
so
as
to
provide
decent
and
durable
dwelling
for
the
greatest
number
of
inhabitants
in
the
country;
2)
The
promotion
and
development
of
physical
social
and
economic
community
growth
through
the
establishment
of
general
physical
plans
for
urban,
suburban
and
metropolitan
areas
to
be
characterized
by
efficient
land
use
patterns;
3)
The
coordination
and
implementation
of
all
projects
of
the
government
for
the
establishment
of
nationwide
and
massive
low
cost
housing;
4)
The
undertaking
and
conducting
of
research
and
technical
studies
of
the
development
and
promotion
of
construction
of
houses
and
buildings
of
sound
standards
of
design
liability,
durability,
safety,
comfort
and
size
for
improvement
of
the
architectural
and
engineering
designs
and
utility
of
houses
and
buildings
with
the
utilization
of
new
and/or
native
materials
economics
in
material
and
construction,
distribution,
assembly
and
construction
and
of
applying
advanced
housing
and
building
technology.
5)
Construction
and
installation
in
these
projects
of
low-‐cost
housing
privately
or
cooperatively
owned
water
and
sewerage
system
or
waste
disposal
facilities,
and
the
formulations
of
a
unified
or
officially
coordinated
urban
transportation
system
as
a
part
of
a
comprehensive
development
plan
in
these
areas.
The
petitioner
points
out
that
it
was
established
as
an
instrumentality
of
the
government
to
accomplish
governmental
policies
and
objectives
and
extend
essential
services
to
the
people.
It
would
be
incongruous
if
employees
discharging
essentially
governmental
functions
are
not
covered
by
the
same
law
and
rules
which
govern
those
performing
other
governmental
functions.
If
government
corporations
discharging
proprietary
functions
now
belong
to
the
civil
service
with
more
reason
should
those
performing
governmental
functions
be
governed
by
civil
service
law.
The
respondent
NLRC
cites
a
1976
opinion
of
the
Secretary
of
Justice
which
holds
that
the
phrase
"government-‐owned
or
controlled
corporations"
in
Section
1,
Article
XII-‐B
of
the
Constitution
contemplates
only
those
government-‐owned
or
controlled
corporations
created
by
special
law.
The
opinion
states
that
since
the
Constitution
provides
for
the
organization
or
regulation
of
private
corporations
only
by
"general
law",
expressly
excluding
government-‐owned
or
controlled
corporations,
it
follows
that
whenever
the
Constitution
mentions
government-‐owned
or
controlled
corporations,
it
must
refer
to
those
created
by
special
law.
P.D.
No.
868
which
repeals
all
charters,
laws,
decrees,
rules,
and
provisions
exempting
any
branch,
agency,
subdivision,
or
instrumentality
of
the
government,
including
government-‐
owned
or
controlled
corporations
from
the
civil
service
law
and
rules
is
also
cited
to
show
that
corporations
not
governed
by
special
charters
or
laws
are
not
to
be
brought
within
civil
service
coverage.
The
discussions
in
the
Constitutional
Convention
are
also
mentioned.
It
appears
that
at
the
time
the
Convention
discussed
government-‐owned
or
controlled
corporations,
all
such
corporations
were
organized
only
under
special
laws
or
charters.
The
fact
that
"private"
corporations
owned
or
controlled
by
the
government
may
be
created
by
special
charter
does
not
mean
that
such
corporations
not
created
by
special
law
are
not
covered
by
the
civil
service.
Nor
does
the
decree
repealing
all
charters
and
special
laws
granting
exemption
from
the
civil
service
law
imply
that
government
corporations
not
created
by
special
law
are
exempt
from
civil
service
coverage.
These
charters
and
statutes
are
the
only
laws
granting
such
exemption
and,
therefore,
they
are
the
only
ones
which
could
be
repealed.
There
was
no
similar
exempting
provision
in
the
general
law
which
called
for
repeal.
And
finally,
the
fact
that
the
Constitutional
Convention
discussed
only
corporations
created
by
special
law
or
charter
cannot
be
an
argument
to
exclude
petitioner
NHC
from
civil
service
coverage.
As
stated
in
the
cited
speech
delivered
during
the
convention
sessions
of
March
9,
1972,
all
government
corporations
then
in
existence
were
organized
under
special
laws
or
charters.
The
convention
delegates
could
not
possibly
discuss
government-‐owned
or
controlled
corporations
which
were
still
non-‐existent
or
about
whose
existence
they
were
unaware.
Section
I
of
Article
XII-‐B,
Constitution
uses
the
word
"every"
to
modify
the
phrase
"government-‐owned
or
controlled
corporation."
"Every"
means
each
one
of
a
group,
without
exception
It
means
all
possible
and
all
taken
one
by
one.
Of
course,
our
decision
in
this
case
refers
to
a
corporation
created
as
a
government-‐owned
or
controlled
entity.
It
does
not
cover
cases
involving
private
firms
taken
over
by
the
government
in
foreclosure
or
similar
proceedings.
We
reserve
judgment
on
these
latter
cases
when
the
appropriate
controversy
is
brought
to
this
Court.
The
infirmity
of
the
respondents'
position
lies
in
its
permitting
a
circumvention
or
emasculation
of
Section
1,
Article
XII-‐B
of
the
Constitution
It
would
be
possible
for
a
regular
ministry
of
government
to
create
a
host
of
subsidiary
corporations
under
the
Corporation
Code
funded
by
a
willing
legislature.
A
government-‐owned
corporation
could
create
several
subsidiary
corporations.
These
subsidiary
corporations
would
enjoy
the
best
of
two
worlds.
Their
officials
and
employees
would
be
privileged
individuals,
free
from
the
strict
accountability
required
by
the
Civil
Service
Decree
and
the
regulations
of
the
Commission
on
Audit.
Their
incomes
would
not
be
subject
to
the
competitive
restraints
of
the
open
market
nor
to
the
terms
and
conditions
of
civil
service
employment.
Conceivably,
all
government-‐owned
or
controlled
corporations
could
be
created,
no
longer
by
special
charters,
but
through
incorporation
under
the
general
law.
The
constitutional
amendment
including
such
corporations
in
the
embrace
of
the
civil
service
would
cease
to
have
application.
Certainly,
such
a
situation
cannot
be
allowed
to
exist.
WHEREFORE,
the
petition
is
hereby
GRANTED.
The
questioned
decision
of
the
respondent
National
Labor
Relations
Commission
is
SET
ASIDE.
The
decision
of
the
Labor
Arbiter
dismissing
the
case
before
it
for
lack
of
jurisdiction
is
REINSTATED.
SO ORDERED.
Note: This case has dissenting opinions. Check online if you want to read