G.R. No.

121075 July 24, 1997

DELTA MOTORS CORPORATION, petitioner, 

vs.
COURT OF APPEALS, HON. ROBERTO M. LAGMAN, and STATE INVESTMENT HOUSE,
INC., respondents.

DAVIDE, JR., J.:

This is a Petition for Certiorari  under Rule 65 of the Revised Rules of Court seeking the reversal of
1

the Resolutions of the Court of Appeals in CA-G.R. SP No. 29147 dated 5 January 1995  and 14
2

July 1995.  The former denied the Omnibus Motion filed by petitioner Delta Motors Corporation
3

(hereinafter DELTA), while the latter amended the earlier Resolution.

The pleadings and annexes in the record of CA-G.R. SP No. 29147 disclose the following material
operative facts:

Private respondent State Investment House, Inc. (hereinafter, SIHI) brought an action for a sum of
money against DELTA in the Regional Trial Court (RTC) of Manila, Branch VI. The case was
docketed as Civil Case No. 84-23019. DELTA was declared in default, and on 5 December 1984,
the RTC, per Judge Ernesto Tengco, rendered a decision  the dispositive portion of which reads as
4

follows:

WHEREFORE, in view of the foregoing considerations, judgment is hereby rendered

ordering the defendant to pay unto plaintiff the amount of P20,061,898.97 as its total
outstanding obligation and to pay 25% of the total obligation as and for attorney's
fees, plus cost of suit.

The decision could not be served on DELTA, either personally or by registered mail, due to its earlier
dissolution. However, Delta had been taken over by the Philippine National Bank (PNB) in the
meantime. This notwithstanding, SIHI moved, on 4 November 1986, for service of the decision by
way of publication, which the trial court allowed in its order of 6 December 1986. The decision was
published in the Thunderer, a weekly newspaper published in Manila. After publication, SIHI moved
for execution of the judgment, which the trial court granted in its order of 11 March 1987 on the
ground that no appeal had been taken by DELTA despite publication of the decision. The writ of
execution was issued and pursuant thereto certain properties of DELTA in Iloilo and Bacolod City
were levied upon and sold. The sheriff likewise levied on some other properties of DELTA.

DELTA then commenced a special civil action for certiorari with the Court of Appeals, which was
docketed as CA-G.R. SP No. 23068, wherein DELTA insisted that: (a) the trial court did not acquire
jurisdiction over the person of the defendant (DELTA) since there was no valid/proper service of
summons, thus rendering the decision null and void; and (b) the void decision never became final
and executory.

In its decision of 22 January 1991  the Court of Appeals ruled against DELTA on the first ground, but
5

found that the record before it "is bereft of any showing that a copy of the assailed judgment had
been properly served on P.N.B. which assumed DELTA's operation upon the latter's dissolution."
Accordingly the Court of Appeals ruled that:
 [T]he [decision] did not become executory (Vda. de Espiritu v. CFI, L-30486, Oct. 31,
1972; Tuazon v. Molina, L-55697, Feb. 26, 1981).

If further opined that service by publication did not cure the fatal defect and thus decreed as
follows:

WHEREFORE, while the assailed decision was validly rendered by the respondent
court, nonetheless it has not attained finality pending service of a copy thereof on
petitioner DELTA, which may appeal therefore within the reglementary period. 6

In a motion for reconsideration, DELTA insisted that there was no valid service of summons and the
decision of the RTC was not in accordance with the Rules, hence, void.  SIHI also filed a motion for
7

reconsideration claiming that DELTA was not dissolved, and even if it were, its corporate personality
to receive service of processes subsisted; moreover, its right to appeal had been lost.  These
8

motions were denied by the Court of Appeals in its resolution of 27 May 1991.  Unsatisfied, DELTA
9

filed with this Court a petition for review on certiorari (G.R. No. 100366) which was denied in the
resolution of 16 September 1991 for non-compliance with Circular No. 1-88. A motion for
reconsideration was denied in the resolution of 9 October 1991, a copy of which was received by
DELTA on 31 October 1991.  10

On 12 November 1991, DELTA filed a Notice of Appeal   with the RTC in Civil Case No. 84-23019,
11

indicating therein that it was appealing from the 5 December 1984 decision, and prayed as follows:

WHEREFORE, it is most respectfully prayed of this Honorable Court that this Notice
of Appeal be noted and the records of this case be elevated to the Court of Appeals.

SIHI filed on 2 December 1991 a motion to dismiss DELTA's appeal   on the ground that it was filed
12

out of time, since DELTA obtained a certified true copy of the decision from the RTC on 21
September 1990, hence it had only fifteen days therefrom within which to appeal from the decision.
Despite DELTA's opposition,   the trial court dismissed the Notice of Appeal.   DELTA moved to
13 14

reconsider,   which SIHI opposed.   In its order   of 14 September 1992 the trial court denied Delta's
15 16 17

motion.

DELTA then filed with the Court of Appeals a petition for certiorari under Rule 65 of the Rules of
Court. The case was docketed as CA-G.R. SP No. 29147.   In its petition, Delta prayed for the: (a)
18

annulment of the order of the trial court dated 3 June 1992 dismissing the Notice of Appeal dated 6
November 1991; (b) annulment of the order of the trial court dated 14 September 1992 denying the
motion for reconsideration of the former; and (c) elevation of the original records of Civil Case No.
84-23019 to the Court of Appeals.

On 30 October 1992 the Court of Appeals issued in CA-G.R. SP No. 29147 a restraining order
enjoining respondents and any and all other persons acting on their behalf "from enforcing or
directing the enforcement of the Decision, subject of the petition."   Thereafter, in its resolution
19

promulgated on 22 December 1992,   the Court of Appeals gave due course to the petition in said
20

case, considered the comments of private respondents therein as its answer and required the
parties to submit their respective memoranda.

On 17 June 1993 the Court of Appeals promulgated its decision   in CA-G.R. SP No. 29147, the
21

dispositive portion providing:

 WHEREFORE, the questioned order of the respondent court dated June 3, 1992,
dismissing the notice of appeal dated November 6, 1991; and the order dated
September 14, 1992 of the same court denying the motion for reconsideration filed
by the petitioner, through counsel, are hereby SET ASIDE; and respondent court
hereby ordered to ELEVATE the records of the case to the Court of Appeals, on
appeal.

On 18 January 1993, the RTC elevated the record of Civil Case No. 84-23019 to the Court of
Appeals.

SIHI appealed to this Court from the decision by way of a petition for review.   It contended that
22

DELTA had lost the right to appeal in view of the lapse of more than 15 days from DELTA's receipt
of a certified true copy of the RTC decision in Civil Case No. 84-23019. This petition for review was
docketed as G.R. No. 110677.  23

While SIHI's petition in G.R. No. 110677 was pending before this Court, DELTA filed on 14 February
1994, in CA G.R. SP No. 29147 of the Court of Appeals, an Omnibus Motion   to: 24

1) DECLARE AS NULL AND VOID AB INITIO AND WITHOUT ANY FORCE AND
EFFECT THE ORDER OF RESPONDENT COURT DATED MARCH 11, 1987
ORDERING THE ISSUANCE OF THE WRIT OF EXECUTION;

2) DECLARE AS NULL AND VOID AB INITIO AND WITHOUT ANY FORCE AND
EFFECT THE WRIT OF EXECUTION ISSUED PURSUANT TO THE ORDER
DATED MARCH 11, 1987;

3) ALL OTHER PROCEEDINGS HELD, CONDUCTED AND EXECUTED BY

RESPONDENT SHERIFF IMPLEMENTING THE AFORESAID WRIT OF
EXECUTION.

SIHI opposed the motion   on grounds that: a) there was a pending appeal by certiorari with this
25

Court, thus the Court of Appeals was without jurisdiction to entertain the Omnibus Motion; b) the
Omnibus Motion was barred by res judicata; and c) the filing of the Omnibus Motion was a clear act
of forum-shopping and should then be denied outright.

In its resolution of 7 June 1994, the Court of Appeals merely noted the Omnibus Motion and stated:

It appearing that there is a pending petition for review with the Supreme Court of this
Court's Decision dated June 17, 1993, it would be improper for this Court to act on
the Omnibus Motion filed by petitioner Delta Motor Corporation . . . . 26

On 18 July 1994 this Court's Second Division issued a resolution   in G.R. No. 110677 denying the
27

petition therein for failure to sufficiently show that the Court of Appeals committed reversible error in
the questioned judgment. SIHI's motion for reconsideration was denied in the resolution of this Court
of 21 September 1994.  28

On 26 October 1994 DELTA filed a manifestation and motion   to resolve its Omnibus Motion of
29

February 10, 1994.

In its resolution of 5 January 1995,   the Court of Appeals denied DELTA's Omnibus Motion, holding:
30
 [T]he matters prayed for in the Omnibus Motion of petitioner Delta Motor Corporation
dated February 10, 1994 and abovequoted are matters which were not raised as
issues by petitioner in the instant petition and, therefore, not within the jurisdiction
and power of this Court in the instant petition to decide. 
31

On 27 January 1995 DELTA filed a motion for reconsideration and/or clarification   wherein it alleged
32

that: (a) while it was true that the matters prayed for in the Omnibus Motion of petitioner were not
raised in the instant petition, they were, nevertheless, included in the general prayer in the petition
"for such other reliefs and remedies just and equitable in the premises;" (b) it could not file the
Omnibus Motion with the RTC since the records of Civil Case No. 84-23019 had already been
elevated to the Court of Appeals and upon the perfection of the appeal, the trial court lost jurisdiction
over the case; and (c) the matters raised in the Omnibus Motion were incidental to and included in
the appellate jurisdiction of the Court of Appeals.

On the other hand, on 2 February 1995, SIHI filed a motion for clarification   wherein it asked for the
33

deletion, for being mere obiter dictum, the following paragraph in the Resolution of 5 January 1995,
to wit:

While it is true that as a necessary consequence the decision of the Court of Appeals
dated January 22, 1991 ruling that the decision in Civil Case No. 84-23019 "has not
attained finality pending service of a copy thereof on petitioner Delta, which may
appeal therefrom within the reglementary period", all proceedings and/or orders
arising from the trial courts decision in Civil Case No. 84-23019 are null and
void . . . .

SIHI argued that this paragraph was "not necessary to the decision of the case before it"   and
34

"cannot be considered binding for the purpose of establishing precedent;"   likewise, the Resolution
35

itself did not decide the incident on its merits or consider and dispose of the issues, nor determine
the respective rights of the parties concerned.

In its resolution of 14 July 1995,   the Court of Appeals granted SIHI's motion for clarification and
36

denied DELTA's motion for reconsideration. As to the latter, it ruled that:

[P]etitioner DELTA is not without remedy, especially considering the ruling of the
Court of Appeals in the first petition for certiorari (CA-G.R. SP No. 23068) which
ruled thus:

WHEREFORE, while the assailed decision was validly rendered by

the respondent court, nonetheless it has not attained finality pending
service of a copy thereof on petitioner DELTA, which may appeal
therefrom within the reglementary period.

Clearly, the only issue in this petition (CA-G.R. SP No. 29147) is as to the validity of
the questioned orders of respondent court dated June 3, 1992 (dismissing the notice
of appeal dated November 6, 1991) and the Order dated September 14, 1992 of the
same court (denying the motion for reconsideration filed by the petitioner through
counsel). 37

It then decreed to amend its Resolution of 5 January 1995 by deleting the assailed
paragraph.
DELTA then filed the instant petition, insisting that the matters raised in the Omnibus Motion were
incidental to and included in the appellate jurisdiction of the Court of Appeals; hence, it had
jurisdiction to rule on said motion. As regards the grant of SIHI's motion to strike out a paragraph in
the resolution of 5 January 1995 for being obiter dictum, DELTA submitted that the latter contained a
finding or affirmation of fact, thus could not have constituted obiter dictum.

After SIHI filed its comment, we gave due course to the petition and required the parties to submit
their respective memoranda. DELTA and SIHI did so on 16 April 1996 and on 13 May 1996,
respectively.

After a painstaking review of the record in CA-G.R. SP No. 29147, we are more than convinced that
respondent Court of Appeals committed no reversible error in denying DELTA's Omnibus Motion.
The decision of the Court of Appeals of 17 June 1993 in CA-G.R. Sp. No. 29147 had long become
final insofar as DELTA was concerned, and it very well knew that the only issues raised therein
concerned the trial court's orders of 3 June 1992 and 14 September 1992. As a matter of fact, at the
time Delta filed the petition in CA-G.R. SP No. 29147, the orders sought to be declared null and void
in the Omnibus Motion had already been issued, they having been so issued at the commencement
of CA-G.R. SP No. 23068. In short, if DELTA intended such orders to be challenged in CA-G.R. SP
No. 29147, it could have explicitly alleged them as sources of additional causes of action and prayed
for the corresponding affirmative relief therefrom, and if this course of action initially proved
unavailing then DELTA could and should have moved for reconsideration on that aspect. After the
finality of the decision in said case, any attempt to introduce or revive the issue had become
procedurally impermissible. Plainly, the issues raised in the Omnibus Motion could have been
allowed during the pendency of said case by way of amendments to the petition.

Moreover, the Court of Appeals correctly denied petitioner's Omnibus Motion in keeping with
jurisprudence  concerning Section 7 of Rule 51 of the Rules of Court on the Procedure in the Court
38

of Appeals, which mandates that:

Sec 7. Questions that may be decided. — No error which does not affect the
jurisdiction over the subject matter will be considered unless stated in the assignment
of errors and properly argued in the brief, save as the court, at its option, may notice
plain errors not specified, and also clerical errors.

Clearly then, the Court of Appeals could only consider errors raised by petitioner in CA-G.R. SP No.
29147, which were limited to the trial court's orders of 3 June 1992 and 14 September 1992. These
were the only errors Delta argued extensively in its brief. To allow DELTA's Omnibus Motion which it
filed more than eight months from promulgation of the decision in CA-G.R. SP No. 29147, or long
after finality of said case, would result in abandonment of sound judicial process.

In light of the dispositive portions of the Court of Appeals' decisions of 22 January 1991 in CA-G.R.
SP No. 23068, and of 17 June 1993 in CA-G.R. SP No. 29147, we cannot agree with SIHI that
DELTA is barred by res judicata. This conclusion is further fortified by the unequivocal statements of
the Court of Appeals in its challenged resolution of 14 July 1995 that:

[P]etitioner DELTA is not without remedy, especially considering the ruling of the
Court of Appeals in the first petition for certiorari (CA-G.R. SP No. 23068) . . .

xxx xxx xxx

Clearly, the only issue in this petition (CA-G.R. SP No. 29147) is as to the validity of
the questioned orders of respondent court dated June 3, 1992 (dismissing the notice
 of appeal dated November 6, 1991) and the Order dated September 14, 1992 of the
same court (denying the motion for reconsideration filed by the petitioner through
counsel.)

The Court of Appeals likewise did not commit reversible error in deleting the phrase SIHI protested
as obiter dictum.

An obiter dictum has been defined as an opinion expressed by a court upon some question of law
which is not necessary to the decision of the case before it.   It is a remark made, or opinion
39

expressed, by a judge, in his decision upon a cause, "by the way," that is, incidentally or collaterally,
and not directly upon the question before him, or upon a point not necessarily involved in the
determination of the cause, or introduced by way of illustration, or analogy or argument. Such are
not binding as precedent.  40

The assailed phrase was indeed obiter dictum as it touched upon a matter not raised by petitioner
expressly in its petition assailing the dismissal of its notice of appeal. It was not a prerequisite in
disposing of the aforementioned issue. The body of the resolution did not contain any discussion on
such matter nor mention any principle of law to support such statement.

WHEREFORE, the instant petition is DISMISSED and the challenged resolutions of 5 January 1995
and 14 July 1995 in C.A. G.R.-SP. NO. 29147 are AFFIRMED.

Cost against petitioner.

SO ORDERED.

Narvasa, C.J., Francisco and Panganiban, JJ., concur.

Melo, J., took no part.

G.R. No. 87977 March 19, 1990

ILUMINADO URBANO and MARCIAL ACAPULCO, petitioners, 

vs.
FRANCISCO I. CHAVEZ, RAMON BARCELONA and AMY LAZARO-JAVIER, respondents.

G.R. No. 88578 March 19, 1990

NEMESIO G. CO, petitioner, 
vs.
REGIONAL TRIAL COURT OF PASIG (BRANCH 165), THE OFFICE OF THE SOLICITOR
GENERAL and FRANCISCO I. CHAVEZ, respondents.

Tañada Vivo & Tan and Benjamin C. Santos Law Office for petitioner in 88578.

GANCAYCO, J.:
Can the Office of the Solicitor General represent a public officer or employee in the preliminary
investigation of a criminal action against him or in a civil action for damages against him? This is the
principal issue in these two consolidated Petitions.

G.R. No. 87977

Sometime in 1988, the petitioners in G.R. No. 87977, namely, Iluminado Urbano and Marcial
Acapulco, instituted a criminal case against Secretary Luis Santos of the Department of Local
Government as well as Sectoral Representatives Pacifico Conol and Jason Ocampos, Jr. of the
Sangguniang Panlungsod of Tangub City, for alleged violation of the provisions of Republic Act No.
3019, as amended, otherwise known as the Anti-Graft and Corrupt Practices Act. The complaint
against them was filed with the Office of the Ombudsman and was docketed as OSP Case No. 88-
02780. The Office of the Solicitor General, through Solicitor General Francisco I. Chavez, Assistant
Solicitor General Ramon A. Barcelona and Solicitor Amy C. Lazaro-Javier, entered its appearance
as counsel for the said respondents as far as the preliminary investigation of the case is concerned.

By way of a special civil action for prohibition filed with this Court, the said petitioners seek to enjoin
the Solicitor General and his associates from acting as counsel for the said respondents in the
course of the preliminary investigation. The said petitioners submit that in the event that the
corresponding information is filed against the said respondents with the Sandiganbayan and a
judgment of conviction is rendered by the said court, the appearance of the Office of the Solicitor
General on behalf of the said respondents during the preliminary investigation will be in conflict with
its role as the appellate counsel of the People of the Philippines.

In its Comment filed on June 13, 1989, the Office of the Solicitor General manifested that the issue
raised by the petitioners had been squarely resolved in favor of the said Office in Anti-Graft League
of the Philippines, Inc. v. Hon.Ortega  and Solicitor General v. Garrido. 
1 2

G.R. No. 88578

On December 29, 1987, the petitioner in G.R. No. 88578, namely, Nemesio G. Co, filed an Amended
Complaint for damages against Solicitor General Francisco I. Chavez, the Businessworld Publishing
Corporation, Raul L. Locsin and one John Doe. The Amended Complaint was filed with Branch 165
of the Regional Trial Court in Pasig, Metro Manila and was docketed as Civil Case No. 55379. The
Honorable Milagros V. Caguioa was the presiding judge therein.

In sum, the Amended Complaint alleged, inter alia, that the defendant Chavez knowingly, willfully
and maliciously published and/or caused to be published certain defamatory imputations against the
petitioner in an article which appeared in the December 4, 1987 issue of Business World, a
periodical publication in Metro Manila, and that he caused the publication thereof by way of an
interview characterized by bad faith and actual malice. The petitioner also alleged that the
defamatory remarks impute that he was a close associate of former President Ferdinand Marcos
and his daughter Imee Marcos-Manotoc and that he was involved in some anomalous transactions
relating to the funds of the national government during the time that President Marcos was in office.
It appears that at the time of the publication of the questioned article, Solicitor General Chavez was
the counsel of the Presidential Commission on Good Government (PCGG), the government agency
responsible for the investigation of alleged graft and corrupt practices relating to the former
President, his relatives and his close associates.

On February 11, 1988, the private defendants Businessworld Publishing Corporation and Raul L.
Locsin filed a joint Motion to Dismiss.
On February 12, 1988, the Office of the Solicitor General sought an extension of time to file the
required responsive pleading. On March 14, 1988, the said Office filed a Motion to Dismiss on behalf
of Solicitor General Chavez. Thereafter, the trial court set the case for oral argument on June 23,
1988.

During the scheduled oral argument, the counsel of the petitioner objected to the appearance of the
Office of the Solicitor General on behalf of Solicitor General Chavez. The trial court issued an Order
suspending the proceedings and instructed the parties to submit their respective positions on the
propriety of the appearance of the said Office for the Solicitor General himself. The parties complied
with the instructions of the trial court.

By way of a Motion seeking the disqualification of the Office of the Solicitor General to act as
counsel of Solicitor General Chavez, the petitioner manifested to the trial court that he is suing the
Solicitor General in his personal capacity for acts which he committed beyond the scope of his
authority and as such he cannot be represented by the said Office in the civil suit instituted with the
trial court. 
3

On the other hand, the Office of the Solicitor General manifested that the objection raised by the
petitioner is an afterthought on account of its belated character, and that this objection
notwithstanding, it is authorized to represent any public official even if the said official is sued in his
personal capacity pursuant to the unconditional provisions of Presidential Decree No. 478 which
defines the functions of the said Office, as well as Executive Order No. 300 issued on July 26, 1987
which made the said office an independent agency under the Office of the President of the
Philippines.   In support of this contention, the said Office cited the pronouncement of this Court
4

in Anti-Graft League of the Philippines, Inc.   The said office also maintained that the cause of action
5

against the Solicitor General is for acts committed by him in his official capacity, i.e., as legal counsel
of the PCGG under Executive Order No. 14, series of 1986, and that the assailed actuations of a
public official are presumed to have been done in the lawful performance of his duties.   In support
6

thereof, the said Office cited the ruling of this Court in Peralta v. Firme. 
7

In addition to the arguments above, the Office of the Solicitor General argued that public policy
militates against the disqualification of the said Office from representing the Solicitor General in his
capacity as a public official because, if it where the other way around, public officials will hesitate to
perform their official functions for fear of being haled to court by almost anybody for the purpose of
accounting for official acts, not to mention the trouble of having to hire a private lawyer at his own
expense in order to defend himself.  8

The petitioner submitted his Reply thereto, alleging therein, among others, that the argument of the
Solicitor General is untenable inasmuch as the expression of his views by way of an interview
subsequently featured in a newspaper article is not an official function of the Solicitor General and
that the jurisprudence cited by the Office of the Solicitor General opposes the position it had taken. 9

In an Order dated November 9, 1988, the trial court denied the Motion of the petitioner for lack of
merit.   The petitioner sought a reconsideration of the Order. On the other hand, the Office of the
10

Solicitor General opposed the reconsideration sought by the petitioner.   The petitioner filed a Reply
11

to the opposition on the part of the said Office   which, in turn, filed a Rejoinder to the Reply. 
12 13

In another Order dated May 26, 1989, the trial court denied the reconsideration sought by the
petitioner. The pertinent portion of the said Order is as follows —

After a careful study, assessment and dissertation of the grounds, arguments

advanced by the parties in their respective pleadings now under consideration, as
 well as the applicable laws and jurisprudence cited therein, the Court has arrived at
the inescapable conclusion, and so holds that the plaintiff failed to satisfactorily
convince the Court that the Office of the Solicitor General cannot and/or does not
have the authority to represent the defendant Francisco I. Chavez in this case, for
the simple reason that it is indisputable that at the time said defendant allegedly
made the malicious imputations against the plaintiff, he was then and still is the
incumbent Solicitor General, and at the same time the counsel for the Presidential
Commission on Good Government or PCGG.  14

Thus, the Order of the trial court dated May 26, 1989 is challenged before this Court on the ground
that the same amounts to a grave abuse of discretion amounting to lack of jurisdiction on the part of
the trial court.   The petitioner now asks the Court to order the Office of the Solicitor General to
15

desist from representing the Solicitor General in the civil suit for damages.

On August 21, 1989, the Office of the Solicitor General filed its Comment on the Petition, reiterating
therein its position before the trial court.  16

On August 31, 1989, the Court resolved to consider the said Comment as the Answer to the Petition
and to give due course to the Petition.   Nonetheless, on October 4, 1989, the petitioner filed his
17

Reply to the Comment, reiterating therein his arguments raised before the trial court.  18

The issue raised in G.R. No. 87977 relates to the authority of the Office of the Solicitor General to
appear for certain government officials in the course of the preliminary investigation of their case
before the Office of the Ombudsman. The issue raised in G.R. No. 88578 pertains to the authority of
the said Office to appear for the Solicitor General who was haled to court in a civil suit for damages
arising from an alleged defamatory remark which appeared in a newspaper. Both petitioners raise
pure questions of law inasmuch as there are no evidentiary matters to be evaluated by this Court.
Moreover, if the only issue is whether or not the conclusions of the trial court are in consonance with
law and jurisprudence, then the issue is a pure question of law.   Thus, the Court resolved to
19

consolidate both Petitions and to treat them as Petitions for certiorari on pure questions of law in
accordance with the provisions of the Rules of Court.   In due time, both Petitions were deemed
20

submitted for decision.

In resolving both Petitions, the Court must take into account the duties and functions of the Office of
the Solicitor General. Presidential Decree No. 478   defines such duties and functions, to wit —
21

Sec. 1. Functions and Organization. — 1) The Office of the Solicitor General shall
represent the Government of the Philippines, its agencies and instrumentalities and
its officials and agents in any litigation, proceeding, investigation or matter requiring
the services of a lawyer. . . (Emphasis supplied)

The Office of the Solicitor General submits that on the basis of this provision, it can represent or
otherwise defend any public official without any qualification or distinction in any litigation, and that
an intepretation thereof to the effect that it is authorized to represent a public official only when the
said official is clearly shown to be sued in his official capacity is erroneous. In short, the said Office
argues that inasmuch as the law does not make a distinction as to the type of litigation wherein the
said Office can enter its appearance as counsel, there should be no distinction made.  22

A similar provision can be found in Section 1661 of the Revised Administrative Code. It reads as
follows: "As principal law officer of the Government, the Solicitor General shall have the authority to
act for and represent the Government of the Philippine Islands, its officers and agents in any official
investigation, proceeding or matter requiring the services of a lawyer." Like the cited provision of
Presidential Decree No. 478, this provision does not have any qualifying phrase. The argument of
the Office of the Solicitor General as regards Presidential Decree No. 478 seems to apply to this
provision as well. Executive Order No. 300, series of 1987 cited by the said Office merely reiterates
the provisions of the aforementioned Presidential Decree.

In Anti-Graft League of the Philippines, Inc.,   this Court pointed out that the phrase "official
23

investigation, proceeding or matter requiring the services of a lawyer" found in Section 1661 of the
Revised Administrative Code embraces a preliminary investigation in a criminal case initiated
against a public official considering that the law makes no qualification as to the nature or character
of the "official investigation" contemplated. The Court emphasized, however, that where the
investigation results in an information filed against the public official concerned, then that official may
no longer be represented by the Office of the Solicitor General and that, accordingly, he will have to
get his own private counsel. Thus, this Court held that the Office of the Solicitor General can
represent the public official at the preliminary investigation of his case, and that if an information is
eventually filed against the said public official, the said Office may no longer represent him in the
litigation. This ruling was reiterated in Solicitor General v. Garrido. 
24

What is the rationale behind this rule which allows the Office of the Solicitor General to represent a
public official during the preliminary investigation of his case, and which prohibits the said office from
further representing the said public official when an information is filed against him with the
appropriate court? In Anti-Graft League of the Philippines, Inc., this Court stressed that in the
performance of their duties, public officials can be subjected to numerous suits, whether ill-founded
or not, and that by threats of possible criminal prosecution, parties adversely affected by official
action can stay the hand of the public official concerned. The Court observed that there may be
hesitancy and diffidence in the execution of their duties if public officials are deterred by the thought
that they could be brought to court and face criminal charges. The Court conluded that as an
assurance against timidity the Office of the Solicitor General sees to it that the public officials
concerned are duly represented by counsel in the preliminary investigation. As to why the public
official concerned may no longer be represented by the Office of the Solicitor General, the ostensible
reason is this: the said Office may no longer represent him considering that its position as counsel
for the accused will be in direct conflict with its responsibilities as the appellate counsel of the People
of the Philippines in all criminal cases.

The Court believes that the ruling announced in Anti-Graft League of the Philippines, Inc. and
reiterated in Garridoshould be re-examined in the light of the nature of a suit against a public official.

Under the Presidential Decree No. 478 aforecited, the Solicitor General shall represent the
Government of the Philippines, its agencies and instrumentalities and its officials and agents
in any litigation, proceeding, investigation or matter requiring the services of a lawyer. This is as it
should be as he is the principal law officer of the Government.  25

In Anti-Graft League of the Philippines, Inc., this Court interpreted this to embrace "both civil and
criminal investigation, proceeding or matter requiring the services of a lawyer.  26

In Garrido, the Court sustained the authority of the Solicitor General to enter his appearance on
behalf of public officials charged with violating a penal statute for acts connected with the
performance of their official duties.27

It is undisputed that the Office of the Solicitor General is the appellate counsel of the People of the
Philippines in all criminal cases. As such, the said Office participates in a criminal case only when
the same has reached the appellate courts. It is the office of the city, provincial or state prosecutor,
as the case may be, and not the Office of the Solicitor General, which attends to the investigation
and the prosecution of criminal cases in the first instance.

However, under the doctrine announced in Anti-Graft League of the Philippines, Inc. and Garrido,
the Office of the Solicitor General is authorized to enter its appearance as counsel for any public
official, against whom a criminal charge had been instituted, during the preliminary investigation
stage thereof. Nevertheless, in the same case, this Court held that once an information is filed
against the public official, the Office of the Solicitor General can no longer represent the said official
in the litigation. The anomaly in this paradigm becomes obvious when, in the event of a judgment of
conviction, the case is brought on appeal to the appellate courts. The Office of the Solicitor General,
as the appellate counsel of the People of the Philippines, is expected to take a stand against the
accused. More often than not, it does. Accordingly, there is a clear conflict of interest here, and one
which smacks of ethical considerations, where the Office of the Solicitor General as counsel for the
public official, defends the latter in the preliminary investigation stage of the criminal case, and
where the same office, as appellate counsel of the People of the Philippines, represents the
prosecution when the case is brought on appeal. This anomalous situation could not have been
contemplated and allowed by the law, its unconditional terms and provisions notwithstanding. It is a
situation which cannot be countenanced by the Court.

Otherwise, if the Solicitor General who represents the state on appeal in criminal cases can appear
for the accused public official in a preliminary investigation, then by the same token a provincial or
city fiscal, his assistant or any government prosecutor who represents the People of the Philippines
at the preliminary investigation of a case up to the trial thereof can appear for an accused public
official at the preliminary investigation being conducted by another fiscal, prosecutor or municipal
judge. The situation would simply be scandalous, to say the least.

There is likewise another reason, as earlier discussed, why the Office of the Solicitor General cannot
represent an accused in a criminal case. Inasmuch as the State can speak and act only by law,
whatever it does say and do must be lawful, and that which is unlawful is not the word or deed of the
State, but is the mere wrong or trespass of those individual persons who falsely speak and act in its
name.   Therefore, the accused public official should not expect the State, through the Office of the
28

Solicitor General, to defend him for a wrongful act which cannot be attributed to the State itself. In
the same light, a public official who is sued in a criminal case is actually sued in his personal
capacity inasmuch as his principal, the State, can never be the author of a wrongful act, much less
commit a crime.

Thus, the Court rules that the Office of the Solicitor General is not authorized to represent a public
official at any stage of a criminal case. For this reason, the doctrine announced in Anti-Graft League
of the Philippines, Inc. v.Hon. Ortega and Solicitor General v. Garrido, and all decided cases
affirming the same; in so far as they are inconsistent with this pronouncement, should be deemed
abandoned. The principle of stare decisis notwithstanding, it is well-settled that a doctrine which
should be abandoned or modified should be abandoned or modified accordingly. After all, more
important than anything else is that this Court should be right.  29

This observation should apply as well to a public official who is haled to court on a civil suit for
damages arising from a felony allegedly committed by him.   Any pecuniary liability he may be held
30

to account for on the occasion of such civil suit is for his own account. The State is not liable for the
same. A fortiori, the Office of the Solicitor General likewise has no authority to represent him in such
a civil suit for damages.

For all these reasons, the argument of the Office of the Solicitor General to the effect that it has the
authority to represent or otherwise defend any public official without any qualification or distinction in
any litigation pursuant to the unconditional provisions of Presidential Decree No. 478 and the other
cited laws is untenable. Applying these principles to the case at bar, the Office of the Solicitor
General has no authority to represent Solicitor General Chavez in the civil suit for damages filed
against him in the Regional Trial Court arising from allegedly defamatory remarks uttered by him.

The issues raised in these two Petitions have been resolved on the basis of law and jurisprudence
as well as the pertinent arguments of the parties concerned. The other points raised by them are
irrelevant to the proper disposition of these cases and need not be considered.

The Court is aware of the possibility of public officials being haled to court in an endless array of civil
suits. With or without this pronouncement, and considering the nature of a public office in the
Philippines vis-a-vis the litigious character of most Filipinos as demonstrated by the number of cases
filed in the courts daily, this scenario is a fact that must be accepted. The possibility of being brought
to court is an occupational hazard of both the public officer and the citizen, in the same way that
every occupation has its own hazards to reckon with. This grim reality notwithstanding, public
officials should know that nobody is above the law.

Of course, there is the Citizens Legal Aid Office of the Department of Justice that may be made to
assist in the defense of any such public official. As to respondent Francisco I. Chavez, he may
appear in his own defense in his private capacity in the action for damages against him. The
services of private counsel may also be availed of. And if it is the intention of the State to protect
public officials from alleged harassment suits, then the creation of a separate office of government
lawyers for this purpose may be in order. But certainly the Office of the Solicitor General can not
assume a responsibility in defense of such public officials beyond its statutory authority.

Accordingly, the Court is of the opinion, and so holds that the Office of the Solicitor General is not
authorized to represent a public official at any stage of a criminal case or in a civil suit for damages
arising from a felony. This pronouncement applies to all public officials and employees in the
executive, legislative and judicial branches of the Government.

WHEREFORE, in view of the foregoing, the herein Petitions are hereby GRANTED. The Office of
the Solicitor General is permanently prohibited from representing the said respondents in OSP Case
No. 88-02780 pending in the Office of the Ombudsman and respondent Francisco I. Chavez in Civil
Case No. 55379 pending before the Regional Trial Court of Pasig, Metro Manila. No pronouncement
as to costs.

SO ORDERED.

Fernan, C.J., Narvasa, Melencio-Herrera, Gutierrez, Jr., Cruz, Paras, Padilla, Bidin, Sarmiento,
Cortes, Griño-Aquino, Medialdea and Regalado, JJ., concur.

Feliciano, J., Did not participate in the deliberations.

 G.R. No. L-47616             October 15, 1941

JOSE TAN CHONG, petitioner-appellee, 

vs.
SECRETARY OF LABOR, respondent-appellant.

Raquiza & Hernando for petitioner.

First Assistant Solicitor-General B. L. Reyes and Solicitor Lacson for respondent.
LAUREL, J.:

This is an appeal taken by the Solicitor-General from the decision of the Court of Jose Tan Chong
for a writ of habeas corpus to secure his release from the custody of the Secretary of Labor.

It appears that the petitioner was born in San Pablo, Laguna, in the month of July, 1915, of a
Chinese father named Tan Chong Hong and a Filipino mother named Antonia Mangahis; that his
parents were legally married; that sometime in 1925 when the petitioner was about ten years old he
was taken by his parents to China; that on January 25, 1940, he arrived at the port of Manila and
sought entry as a native born citizen. The board of Special Inquiry assigned to hear his case, denied
him admission on the alleged ground that he is a Chinese citizen, and on appeal, the Secretary of
labor affirmed the decision of the Board and ordered the deportation of the petitioner to the port from
whence he came. The petitioner sued for a writ of habeas corpus in the Court of First Instance of
Manila which was granted. Hence, the present appeal by the Solicitor-General.

The petitioner, having been born in the Philippines before the approval of our Constitution, of a
Chinese father and a Filipino mother, is a Filipino citizen. This conclusion is in harmony with the
policy embodied in the Constitution (par. 4 sec. 1, Art. IV; Torres vs. Tan Chim, G. R. No. 46593,
promulgated Feb. 3, 1940; Gallofin vs. Ordoñez, G.R. No. 46782, promulgated June 27, 1940). His
sojourn in China did not adversely affect his Philippine citizenship, it appearing that ever since he
was twelve years old he wanted to return to the Philippines but his father would not allow him to
come, and he did not have means to pay for his transportation back to the Philippines until the date
of his return. Animus revertendi existed here. (Lim Teco vs. Collector of Customs, 23 Phil., 84;
Muñoz vs. Collector of Customs, 20 Phil., 494; Lorenzo vs. McCoy, 15 Phil., 559.) lawphil.net

The judgment of the lower court is accordingly affirmed, without pronouncement regarding costs. So
ordered.

G.R. No. 162155               August 28, 2007

COMMISSIONER OF INTERNAL REVENUE and ARTURO V. PARCERO in his official capacity

as Revenue District Officer of Revenue District No. 049 (Makati), Petitioners, 
vs.
PRIMETOWN PROPERTY GROUP, INC., Respondent.

DECISION

CORONA, J.:

This petition for review on certiorari1 seeks to set aside the August 1, 2003 decision2 of the Court of
Appeals (CA) in CA-G.R. SP No. 64782 and its February 9, 2004 resolution denying
reconsideration.3

On March 11, 1999, Gilbert Yap, vice chair of respondent Primetown Property Group, Inc., applied
for the refund or credit of income tax respondent paid in 1997. In Yap's letter to petitioner revenue
district officer Arturo V. Parcero of Revenue District No. 049 (Makati) of the Bureau of Internal
Revenue (BIR),4 he explained that the increase in the cost of labor and materials and difficulty in
obtaining financing for projects and collecting receivables caused the real estate industry to
slowdown.5 As a consequence, while business was good during the first quarter of 1997, respondent
suffered losses amounting to ₱71,879,228 that year.6

According to Yap, because respondent suffered losses, it was not liable for income
taxes.7 Nevertheless, respondent paid its quarterly corporate income tax and remitted creditable
withholding tax from real estate sales to the BIR in the total amount of ₱26,318,398.32.8 Therefore,
respondent was entitled to tax refund or tax credit.9

On May 13, 1999, revenue officer Elizabeth Y. Santos required respondent to submit additional
documents to support its claim.10 Respondent complied but its claim was not acted upon. Thus, on
April 14, 2000, it filed a petition for review11 in the Court of Tax Appeals (CTA).

On December 15, 2000, the CTA dismissed the petition as it was filed beyond the two-year
prescriptive period for filing a judicial claim for tax refund or tax credit.12 It invoked Section 229 of the
National Internal Revenue Code (NIRC):

Sec. 229. Recovery of Taxes Erroneously or Illegally Collected. -- No suit or proceeding shall be
maintained in any court for the recovery of any national internal revenue tax hereafter alleged to
have been erroneously or illegally assessed or collected, or of any penalty claimed to have been
collected without authority, or of any sum alleged to have been excessively or in any manner
wrongfully collected, until a claim for refund or credit has been duly filed with the Commissioner; but
such suit or proceeding may be maintained, whether or not such tax, penalty, or sum has been paid
under protest or duress.

In any case, no such suit or proceeding shall be filed after the expiration of two (2) years from
the date of payment of the tax or penalty regardless of any supervening cause that may arise
after payment: Provided, however, That the Commissioner may, even without a claim therefor,
refund or credit any tax, where on the face of the return upon which payment was made, such
payment appears clearly to have been erroneously paid. (emphasis supplied)

The CTA found that respondent filed its final adjusted return on April 14, 1998. Thus, its right to
claim a refund or credit commenced on that date.13

The tax court applied Article 13 of the Civil Code which states:

Art. 13. When the law speaks of years, months, days or nights, it shall be understood that years are
of three hundred sixty-five days each; months, of thirty days; days, of twenty-four hours, and
nights from sunset to sunrise.

If the months are designated by their name, they shall be computed by the number of days which
they respectively have.

In computing a period, the first day shall be excluded, and the last inclu2ded. (emphasis supplied)

Thus, according to the CTA, the two-year prescriptive period under Section 229 of the NIRC for the
filing of judicial claims was equivalent to 730 days. Because the year 2000 was a leap year,
respondent's petition, which was filed 731 days14 after respondent filed its final adjusted return, was
filed beyond the reglementary period.15

Respondent moved for reconsideration but it was denied.16 Hence, it filed an appeal in the CA.17
On August 1, 2003, the CA reversed and set aside the decision of the CTA.18 It ruled that Article 13
of the Civil Code did not distinguish between a regular year and a leap year. According to the CA:

The rule that a year has 365 days applies, notwithstanding the fact that a particular year is a leap
year.19

In other words, even if the year 2000 was a leap year, the periods covered by April 15, 1998 to April
14, 1999 and April 15, 1999 to April 14, 2000 should still be counted as 365 days each or a total of
730 days. A statute which is clear and explicit shall be neither interpreted nor construed.20

Petitioners moved for reconsideration but it was denied.21 Thus, this appeal.

Petitioners contend that tax refunds, being in the nature of an exemption, should be strictly
construed against claimants.22 Section 229 of the NIRC should be strictly applied against respondent
inasmuch as it has been consistently held that the prescriptive period (for the filing of tax refunds
and tax credits) begins to run on the day claimants file their final adjusted returns.23 Hence, the claim
should have been filed on or before April 13, 2000 or within 730 days, reckoned from the time
respondent filed its final adjusted return.

The conclusion of the CA that respondent filed its petition for review in the CTA within the two-year
prescriptive period provided in Section 229 of the NIRC is correct. Its basis, however, is not.

The rule is that the two-year prescriptive period is reckoned from the filing of the final adjusted
return.24 But how should the two-year prescriptive period be computed?

As already quoted, Article 13 of the Civil Code provides that when the law speaks of a year, it is
understood to be equivalent to 365 days. In National Marketing Corporation v. Tecson,25 we ruled
that a year is equivalent to 365 days regardless of whether it is a regular year or a leap year.26

However, in 1987, EO27 292 or the Administrative Code of 1987 was enacted. Section 31, Chapter
VIII, Book I thereof provides:

Sec. 31. Legal Periods. — "Year" shall be understood to be twelve calendar months; "month" of

thirty days, unless it refers to a specific calendar month in which case it shall be computed according
to the number of days the specific month contains; "day", to a day of twenty-four hours and; "night"
from sunrise to sunset. (emphasis supplied)

A calendar month is "a month designated in the calendar without regard to the number of days it
may contain."28 It is the "period of time running from the beginning of a certain numbered day up to,
but not including, the corresponding numbered day of the next month, and if there is not a sufficient
number of days in the next month, then up to and including the last day of that month."29 To illustrate,
one calendar month from December 31, 2007 will be from January 1, 2008 to January 31, 2008; one
calendar month from January 31, 2008 will be from February 1, 2008 until February 29, 2008.30

A law may be repealed expressly (by a categorical declaration that the law is revoked and abrogated
by another) or impliedly (when the provisions of a more recent law cannot be reasonably reconciled
with the previous one).31Section 27, Book VII (Final Provisions) of the Administrative Code of 1987
states:

Sec. 27. Repealing clause. — All laws, decrees, orders, rules and regulation, or portions thereof,
inconsistent with this Code are hereby repealed or modified accordingly.
A repealing clause like Sec. 27 above is not an express repealing clause because it fails to identify
or designate the laws to be abolished.32 Thus, the provision above only impliedly repealed all laws
inconsistent with the Administrative Code of 1987. 1avvphi1

Implied repeals, however, are not favored. An implied repeal must have been clearly and
unmistakably intended by the legislature. The test is whether the subsequent law encompasses
entirely the subject matter of the former law and they cannot be logically or reasonably reconciled.33

Both Article 13 of the Civil Code and Section 31, Chapter VIII, Book I of the Administrative Code of
1987 deal with the same subject matter — the computation of legal periods. Under the Civil Code, a
year is equivalent to 365 days whether it be a regular year or a leap year. Under the Administrative
Code of 1987, however, a year is composed of 12 calendar months. Needless to state, under the
Administrative Code of 1987, the number of days is irrelevant.

There obviously exists a manifest incompatibility in the manner of computing legal periods under the
Civil Code and the Administrative Code of 1987. For this reason, we hold that Section 31, Chapter
VIII, Book I of the Administrative Code of 1987, being the more recent law, governs the computation
of legal periods. Lex posteriori derogat priori.

Applying Section 31, Chapter VIII, Book I of the Administrative Code of 1987 to this case, the two-
year prescriptive period (reckoned from the time respondent filed its final adjusted return34 on April
14, 1998) consisted of 24 calendar months, computed as follows:

Year 1 1st calendar April 15, 1998 to May 14, 1998

month
  2nd calendar May 15, 1998 to June 14, 1998
month
  3rd calendar June 15, 1998 to July 14, 1998
month
  4th calendar July 15, 1998 to August 14, 1998
month
  5th calendar August 15, 1998 to September 14,
month 1998
  6th calendar September 15, to October 14, 1998
month 1998
  7th calendar October 15, 1998 to November 14, 1998
month
  8th calendar November 15, 1998 to December 14, 1998
month
  9th calendar December 15, 1998 to January 14, 1999
month
  10th calendar January 15, 1999 to February 14, 1999
month
  11th calendar February 15, 1999 to March 14, 1999
month
  12th calendar March 15, 1999 to April 14, 1999
month
Year 2 13th calendar April 15, 1999 to May 14, 1999
month
  14th calendar May 15, 1999 to June 14, 1999
month
  15th calendar June 15, 1999 to July 14, 1999
month
  16th calendar July 15, 1999 to August 14, 1999
month
  17th calendar August 15, 1999 to September 14,
month 1999
  18th calendar September 15, to October 14, 1999
month 1999
  19th calendar October 15, 1999 to November 14, 1999
month
  20th calendar November 15, 1999 to December 14, 1999
month
  21st calendar December 15, 1999 to January 14, 2000
month
  22nd calendar January 15, 2000 to February 14, 2000
month
  23rd calendar February 15, 2000 to March 14, 2000
month
  24th calendar March 15, 2000 to April 14, 2000
month

We therefore hold that respondent's petition (filed on April 14, 2000) was filed on the last day of the
24th calendar month from the day respondent filed its final adjusted return. Hence, it was filed within
the reglementary period.

Accordingly, the petition is hereby DENIED. The case is REMANDED to the Court of Tax Appeals
which is ordered to expeditiously proceed to hear C.T.A. Case No. 6113 entitled Primetown Property
Group, Inc. v. Commissioner of Internal Revenue and Arturo V. Parcero.

No costs.

G.R. No. 184823               October 6, 2010

COMMISSIONER OF INTERNAL REVENUE, Petitioner, 

vs.
AICHI FORGING COMPANY OF ASIA, INC., Respondent.

DECISION
DEL CASTILLO, J.:

A taxpayer is entitled to a refund either by authority of a statute expressly granting such right,
privilege, or incentive in his favor, or under the principle of solutio indebiti requiring the return of
taxes erroneously or illegally collected. In both cases, a taxpayer must prove not only his entitlement
to a refund but also his compliance with the procedural due process as non-observance of the
prescriptive periods within which to file the administrative and the judicial claims would result in the
denial of his claim.

This Petition for Review on Certiorari under Rule 45 of the Rules of Court seeks to set aside the July
30, 2008 Decision1 and the October 6, 2008 Resolution2 of the Court of Tax Appeals (CTA) En Banc.

Factual Antecedents

Respondent Aichi Forging Company of Asia, Inc., a corporation duly organized and existing under
the laws of the Republic of the Philippines, is engaged in the manufacturing, producing, and
processing of steel and its by-products.3 It is registered with the Bureau of Internal Revenue (BIR) as
a Value-Added Tax (VAT) entity4 and its products, "close impression die steel forgings" and "tool and
dies," are registered with the Board of Investments (BOI) as a pioneer status.5

On September 30, 2004, respondent filed a claim for refund/credit of input VAT for the period July 1,
2002 to September 30, 2002 in the total amount of ₱3,891,123.82 with the petitioner Commissioner
of Internal Revenue (CIR), through the Department of Finance (DOF) One-Stop Shop Inter-Agency
Tax Credit and Duty Drawback Center.6

Proceedings before the Second Division of the CTA

On even date, respondent filed a Petition for Review7 with the CTA for the refund/credit of the same
input VAT. The case was docketed as CTA Case No. 7065 and was raffled to the Second Division of
the CTA.

In the Petition for Review, respondent alleged that for the period July 1, 2002 to September 30,
2002, it generated and recorded zero-rated sales in the amount of ₱131,791,399.00,8 which was
paid pursuant to Section 106(A) (2) (a) (1), (2) and (3) of the National Internal Revenue Code of
1997 (NIRC);9 that for the said period, it incurred and paid input VAT amounting to ₱3,912,088.14
from purchases and importation attributable to its zero-rated sales;10and that in its application for
refund/credit filed with the DOF One-Stop Shop Inter-Agency Tax Credit and Duty Drawback Center,
it only claimed the amount of ₱3,891,123.82.11

In response, petitioner filed his Answer12 raising the following special and affirmative defenses, to wit:

4. Petitioner’s alleged claim for refund is subject to administrative investigation by the

Bureau;

5. Petitioner must prove that it paid VAT input taxes for the period in question;

6. Petitioner must prove that its sales are export sales contemplated under Sections 106(A)
(2) (a), and 108(B) (1) of the Tax Code of 1997;

7. Petitioner must prove that the claim was filed within the two (2) year period prescribed in
Section 229 of the Tax Code;
 8. In an action for refund, the burden of proof is on the taxpayer to establish its right to
refund, and failure to sustain the burden is fatal to the claim for refund; and

9. Claims for refund are construed strictly against the claimant for the same partake of the
nature of exemption from taxation.13

Trial ensued, after which, on January 4, 2008, the Second Division of the CTA rendered a Decision
partially granting respondent’s claim for refund/credit. Pertinent portions of the Decision read:

For a VAT registered entity whose sales are zero-rated, to validly claim a refund, Section 112 (A) of
the NIRC of 1997, as amended, provides:

SEC. 112. Refunds or Tax Credits of Input Tax. –

(A) Zero-rated or Effectively Zero-rated Sales. – Any VAT-registered person, whose sales are zero-
rated or effectively zero-rated may, within two (2) years after the close of the taxable quarter when
the sales were made, apply for the issuance of a tax credit certificate or refund of creditable input tax
due or paid attributable to such sales, except transitional input tax, to the extent that such input tax
has not been applied against output tax: x x x

Pursuant to the above provision, petitioner must comply with the following requisites: (1) the
taxpayer is engaged in sales which are zero-rated or effectively zero-rated; (2) the taxpayer is VAT-
registered; (3) the claim must be filed within two years after the close of the taxable quarter when
such sales were made; and (4) the creditable input tax due or paid must be attributable to such
sales, except the transitional input tax, to the extent that such input tax has not been applied against
the output tax.

The Court finds that the first three requirements have been complied [with] by petitioner.

With regard to the first requisite, the evidence presented by petitioner, such as the Sales Invoices
(Exhibits "II" to "II-262," "JJ" to "JJ-431," "KK" to "KK-394" and "LL") shows that it is engaged in sales
which are zero-rated.

The second requisite has likewise been complied with. The Certificate of Registration with OCN
1RC0000148499 (Exhibit "C") with the BIR proves that petitioner is a registered VAT taxpayer.

In compliance with the third requisite, petitioner filed its administrative claim for refund on September
30, 2004 (Exhibit "N") and the present Petition for Review on September 30, 2004, both within the
two (2) year prescriptive period from the close of the taxable quarter when the sales were made,
which is from September 30, 2002.

As regards, the fourth requirement, the Court finds that there are some documents and claims of
petitioner that are baseless and have not been satisfactorily substantiated.

xxxx

In sum, petitioner has sufficiently proved that it is entitled to a refund or issuance of a tax credit
certificate representing unutilized excess input VAT payments for the period July 1, 2002 to
September 30, 2002, which are attributable to its zero-rated sales for the same period, but in the
reduced amount of ₱3,239,119.25, computed as follows:
 Amount of Claimed Input VAT ₱ 3,891,123.82
Less:  
Exceptions as found by the ICPA 41,020.37

Net Creditable Input VAT ₱ 3,850,103.45

Less:  
Output VAT Due 610,984.20
Excess Creditable Input VAT ₱ 3,239,119.25

WHEREFORE, premises considered, the present Petition for Review is PARTIALLY GRANTED.
Accordingly, respondent is hereby ORDERED TO REFUND OR ISSUE A TAX CREDIT
CERTIFICATE in favor of petitioner [in] the reduced amount of THREE MILLION TWO HUNDRED
THIRTY NINE THOUSAND ONE HUNDRED NINETEEN AND 25/100 PESOS (₱3,239,119.25),
representing the unutilized input VAT incurred for the months of July to September 2002.

SO ORDERED.14

Dissatisfied with the above-quoted Decision, petitioner filed a Motion for Partial
Reconsideration,15 insisting that the administrative and the judicial claims were filed beyond the two-
year period to claim a tax refund/credit provided for under Sections 112(A) and 229 of the NIRC. He
reasoned that since the year 2004 was a leap year, the filing of the claim for tax refund/credit on
September 30, 2004 was beyond the two-year period, which expired on September 29, 2004.16 He
cited as basis Article 13 of the Civil Code,17 which provides that when the law speaks of a year, it is
equivalent to 365 days. In addition, petitioner argued that the simultaneous filing of the
administrative and the judicial claims contravenes Sections 112 and 229 of the NIRC.18 According to
the petitioner, a prior filing of an administrative claim is a "condition precedent"19 before a judicial
claim can be filed. He explained that the rationale of such requirement rests not only on the doctrine
of exhaustion of administrative remedies but also on the fact that the CTA is an appellate body which
exercises the power of judicial review over administrative actions of the BIR. 20

The Second Division of the CTA, however, denied petitioner’s Motion for Partial Reconsideration for
lack of merit. Petitioner thus elevated the matter to the CTA En Banc via a Petition for Review.21

Ruling of the CTA En Banc

On July 30, 2008, the CTA En Banc affirmed the Second Division’s Decision allowing the partial tax
refund/credit in favor of respondent. However, as to the reckoning point for counting the two-year
period, the CTA En Banc ruled:

Petitioner argues that the administrative and judicial claims were filed beyond the period allowed by
law and hence, the honorable Court has no jurisdiction over the same. In addition, petitioner further
contends that respondent's filing of the administrative and judicial [claims] effectively eliminates the
authority of the honorable Court to exercise jurisdiction over the judicial claim.

We are not persuaded.

Section 114 of the 1997 NIRC, and We quote, to wit:

SEC. 114. Return and Payment of Value-added Tax. –

(A) In General. – Every person liable to pay the value-added tax imposed under this Title shall file a
quarterly return of the amount of his gross sales or receipts within twenty-five (25) days following the
close of each taxable quarter prescribed for each taxpayer: Provided, however, That VAT-registered
persons shall pay the value-added tax on a monthly basis.

[x x x x ]

Based on the above-stated provision, a taxpayer has twenty five (25) days from the close of each
taxable quarter within which to file a quarterly return of the amount of his gross sales or receipts. In
the case at bar, the taxable quarter involved was for the period of July 1, 2002 to September 30,
2002. Applying Section 114 of the 1997 NIRC, respondent has until October 25, 2002 within which to
file its quarterly return for its gross sales or receipts [with] which it complied when it filed its VAT
Quarterly Return on October 20, 2002.

In relation to this, the reckoning of the two-year period provided under Section 229 of the 1997 NIRC
should start from the payment of tax subject claim for refund. As stated above, respondent filed its
VAT Return for the taxable third quarter of 2002 on October 20, 2002. Thus, respondent's
administrative and judicial claims for refund filed on September 30, 2004 were filed on time because
AICHI has until October 20, 2004 within which to file its claim for refund.

In addition, We do not agree with the petitioner's contention that the 1997 NIRC requires the
previous filing of an administrative claim for refund prior to the judicial claim. This should not be the
case as the law does not prohibit the simultaneous filing of the administrative and judicial claims for
refund. What is controlling is that both claims for refund must be filed within the two-year prescriptive
period.

In sum, the Court En Banc finds no cogent justification to disturb the findings and conclusion spelled
out in the assailed January 4, 2008 Decision and March 13, 2008 Resolution of the CTA Second
Division. What the instant petition seeks is for the Court En Banc to view and appreciate the
evidence in their own perspective of things, which unfortunately had already been considered and
passed upon.

WHEREFORE, the instant Petition for Review is hereby DENIED DUE COURSE and DISMISSED
for lack of merit. Accordingly, the January 4, 2008 Decision and March 13, 2008 Resolution of the
CTA Second Division in CTA Case No. 7065 entitled, "AICHI Forging Company of Asia, Inc.
petitioner vs. Commissioner of Internal Revenue, respondent" are hereby AFFIRMED in toto.

SO ORDERED.22

Petitioner sought reconsideration but the CTA En Banc denied23 his Motion for Reconsideration.

Issue

Hence, the present recourse where petitioner interposes the issue of whether respondent’s judicial
and administrative claims for tax refund/credit were filed within the two-year prescriptive period
provided in Sections 112(A) and 229 of

the NIRC.24

Petitioner’s Arguments
Petitioner maintains that respondent’s administrative and judicial claims for tax refund/credit were
filed in violation of Sections 112(A) and 229 of the NIRC.25 He posits that pursuant to Article 13 of the
Civil Code,26 since the year 2004 was a leap year, the filing of the claim for tax refund/credit on
September 30, 2004 was beyond the two-year period, which expired on September 29, 2004.27

Petitioner further argues that the CTA En Banc erred in applying Section 114(A) of the NIRC in
determining the start of the two-year period as the said provision pertains to the compliance
requirements in the payment of VAT.28 He asserts that it is Section 112, paragraph (A), of the same
Code that should apply because it specifically provides for the period within which a claim for tax
refund/ credit should be made.29

Petitioner likewise puts in issue the fact that the administrative claim with the BIR and the judicial
claim with the CTA were filed on the same day.30 He opines that the simultaneous filing of the
administrative and the judicial claims contravenes Section 229 of the NIRC, which requires the prior
filing of an administrative claim.31 He insists that such procedural requirement is based on the
doctrine of exhaustion of administrative remedies and the fact that the CTA is an appellate body
exercising judicial review over administrative actions of the CIR.32

Respondent’s Arguments

For its part, respondent claims that it is entitled to a refund/credit of its unutilized input VAT for the
period July 1, 2002 to September 30, 2002 as a matter of right because it has substantially complied
with all the requirements provided by law.33 Respondent likewise defends the CTA En Banc in
applying Section 114(A) of the NIRC in computing the prescriptive period for the claim for tax
refund/credit. Respondent believes that Section 112(A) of the NIRC must be read together with
Section 114(A) of the same Code.34

As to the alleged simultaneous filing of its administrative and judicial claims, respondent contends
that it first filed an administrative claim with the One-Stop Shop Inter-Agency Tax Credit and Duty
Drawback Center of the DOF before it filed a judicial claim with the CTA.35 To prove this, respondent
points out that its Claimant Information Sheet No. 4970236 and BIR Form No. 1914 for the third
quarter of 2002,37 which were filed with the DOF, were attached as Annexes "M" and "N,"
respectively, to the Petition for Review filed with the CTA.38 Respondent further contends that the
non-observance of the 120-day period given to the CIR to act on the claim for tax refund/credit in
Section 112(D) is not fatal because what is important is that both claims are filed within the two-year
prescriptive period.39 In support thereof, respondent cites Commissioner of Internal Revenue v.
Victorias Milling Co., Inc.40 where it was ruled that "[i]f, however, the [CIR] takes time in deciding the
claim, and the period of two years is about to end, the suit or proceeding must be started in the
[CTA] before the end of the two-year period without awaiting the decision of the [CIR]."41 Lastly,
respondent argues that even if the period had already lapsed, it may be suspended for reasons of
equity considering that it is not a jurisdictional requirement.42

Our Ruling

The petition has merit.

Unutilized input VAT must be claimed within two years after the close of the taxable quarter when
the sales were made

In computing the two-year prescriptive period for claiming a refund/credit of unutilized input VAT, the
Second Division of the CTA applied Section 112(A) of the NIRC, which states:
SEC. 112. Refunds or Tax Credits of Input Tax. –

(A) Zero-rated or Effectively Zero-rated Sales – Any VAT-registered person, whose sales are zero-
rated or effectively zero-rated may, within two (2) years after the close of the taxable quarter when
the sales were made, apply for the issuance of a tax credit certificate or refund of creditable input tax
due or paid attributable to such sales, except transitional input tax, to the extent that such input tax
has not been applied against output tax: Provided, however, That in the case of zero-rated sales
under Section 106(A)(2)(a)(1), (2) and (B) and Section 108 (B)(1) and (2), the acceptable foreign
currency exchange proceeds thereof had been duly accounted for in accordance with the rules and
regulations of the Bangko Sentral ng Pilipinas (BSP): Provided, further, That where the taxpayer is
engaged in zero-rated or effectively zero-rated sale and also in taxable or exempt sale of goods or
properties or services, and the amount of creditable input tax due or paid cannot be directly and
entirely attributed to any one of the transactions, it shall be allocated proportionately on the basis of
the volume of sales. (Emphasis supplied.)

The CTA En Banc, on the other hand, took into consideration Sections 114 and 229 of the NIRC,
which read:

SEC. 114. Return and Payment of Value-Added Tax. –

(A) In General. – Every person liable to pay the value-added tax imposed under this Title shall file a
quarterly return of the amount of his gross sales or receipts within twenty-five (25) days following the
close of each taxable quarter prescribed for each taxpayer: Provided, however, That VAT-registered
persons shall pay the value-added tax on a monthly basis.

Any person, whose registration has been cancelled in accordance with Section 236, shall file a
return and pay the tax due thereon within twenty-five (25) days from the date of cancellation of
registration: Provided, That only one consolidated return shall be filed by the taxpayer for his
principal place of business or head office and all branches.

xxxx

SEC. 229. Recovery of tax erroneously or illegally collected. –

No suit or proceeding shall be maintained in any court for the recovery of any national internal
revenue tax hereafter alleged to have been erroneously or illegally assessed or collected, or of any
penalty claimed to have been collected without authority, or of any sum alleged to have been
excessively or in any manner wrongfully collected, until a claim for refund or credit has been duly
filed with the Commissioner; but such suit or proceeding may be maintained, whether or not such
tax, penalty or sum has been paid under protest or duress.

In any case, no such suit or proceeding shall be filed after the expiration of two (2) years from the
date of payment of the tax or penalty regardless of any supervening cause that may arise after
payment: Provided, however, That the Commissioner may, even without written claim therefor,
refund or credit any tax, where on the face of the return upon which payment was made, such
payment appears clearly to have been erroneously paid. (Emphasis supplied.)

Hence, the CTA En Banc ruled that the reckoning of the two-year period for filing a claim for
refund/credit of unutilized input VAT should start from the date of payment of tax and not from the
close of the taxable quarter when the sales were made.43
The pivotal question of when to reckon the running of the two-year prescriptive period, however, has
already been resolved in Commissioner of Internal Revenue v. Mirant Pagbilao Corporation,44 where
we ruled that Section 112(A) of the NIRC is the applicable provision in determining the start of the
two-year period for claiming a refund/credit of unutilized input VAT, and that Sections 204(C) and
229 of the NIRC are inapplicable as "both provisions apply only to instances of erroneous payment
or illegal collection of internal revenue taxes."45 We explained that:

The above proviso [Section 112 (A) of the NIRC] clearly provides in no uncertain terms
that unutilized input VAT payments not otherwise used for any internal revenue tax due the
taxpayer must be claimed within two years reckoned from the close of the taxable quarter
when the relevant sales were made pertaining to the input VAT regardless of whether said tax
was paid or not. As the CA aptly puts it, albeit it erroneously applied the aforequoted Sec. 112 (A),
"[P]rescriptive period commences from the close of the taxable quarter when the sales were made
and not from the time the input VAT was paid nor from the time the official receipt was issued." Thus,
when a zero-rated VAT taxpayer pays its input VAT a year after the pertinent transaction, said
taxpayer only has a year to file a claim for refund or tax credit of the unutilized creditable input VAT.
The reckoning frame would always be the end of the quarter when the pertinent sales or transaction
was made, regardless when the input VAT was paid. Be that as it may, and given that the last
creditable input VAT due for the period covering the progress billing of September 6, 1996 is the
third quarter of 1996 ending on September 30, 1996, any claim for unutilized creditable input VAT
refund or tax credit for said quarter prescribed two years after September 30, 1996 or, to be precise,
on September 30, 1998. Consequently, MPC’s claim for refund or tax credit filed on December 10,
1999 had already prescribed.

Reckoning for prescriptive period under

Secs. 204(C) and 229 of the NIRC inapplicable

To be sure, MPC cannot avail itself of the provisions of either Sec. 204(C) or 229 of the NIRC which,
for the purpose of refund, prescribes a different starting point for the two-year prescriptive limit for
the filing of a claim therefor. Secs. 204(C) and 229 respectively provide:

Sec. 204. Authority of the Commissioner to Compromise, Abate and Refund or Credit Taxes. – The
Commissioner may –

xxxx

(c) Credit or refund taxes erroneously or illegally received or penalties imposed without authority,
refund the value of internal revenue stamps when they are returned in good condition by the
purchaser, and, in his discretion, redeem or change unused stamps that have been rendered unfit
for use and refund their value upon proof of destruction. No credit or refund of taxes or penalties
shall be allowed unless the taxpayer files in writing with the Commissioner a claim for credit or
refund within two (2) years after the payment of the tax or penalty: Provided, however, That a return
filed showing an overpayment shall be considered as a written claim for credit or refund.

xxxx

Sec. 229. Recovery of Tax Erroneously or Illegally Collected. – No suit or proceeding shall be
maintained in any court for the recovery of any national internal revenue tax hereafter alleged to
have been erroneously or illegally assessed or collected, or of any penalty claimed to have been
collected without authority, of any sum alleged to have been excessively or in any manner wrongfully
collected without authority, or of any sum alleged to have been excessively or in any manner
wrongfully collected, until a claim for refund or credit has been duly filed with the Commissioner; but
such suit or proceeding may be maintained, whether or not such tax, penalty, or sum has been paid
under protest or duress.

In any case, no such suit or proceeding shall be filed after the expiration of two (2) years from the
date of payment of the tax or penalty regardless of any supervening cause that may arise after
payment: Provided, however, That the Commissioner may, even without a written claim therefor,
refund or credit any tax, where on the face of the return upon which payment was made, such
payment appears clearly to have been erroneously paid.

Notably, the above provisions also set a two-year prescriptive period, reckoned from date of
payment of the tax or penalty, for the filing of a claim of refund or tax credit. Notably too, both
provisions apply only to instances of erroneous payment or illegal collection of internal
revenue taxes.

MPC’s creditable input VAT not erroneously paid

For perspective, under Sec. 105 of the NIRC, creditable input VAT is an indirect tax which can be
shifted or passed on to the buyer, transferee, or lessee of the goods, properties, or services of the
taxpayer. The fact that the subsequent sale or transaction involves a wholly-tax exempt client,
resulting in a zero-rated or effectively zero-rated transaction, does not, standing alone, deprive the
taxpayer of its right to a refund for any unutilized creditable input VAT, albeit the erroneous, illegal,
or wrongful payment angle does not enter the equation.

xxxx

Considering the foregoing discussion, it is clear that Sec. 112 (A) of the NIRC, providing a two-
year prescriptive period reckoned from the close of the taxable quarter when the relevant
sales or transactions were made pertaining to the creditable input VAT, applies to the instant
case, and not to the other actions which refer to erroneous payment of taxes. 46 (Emphasis
supplied.)

In view of the foregoing, we find that the CTA En Banc erroneously applied Sections 114(A) and 229
of the NIRC in computing the two-year prescriptive period for claiming refund/credit of unutilized
input VAT. To be clear, Section 112 of the NIRC is the pertinent provision for the refund/credit of
input VAT. Thus, the two-year period should be reckoned from the close of the taxable quarter when
the sales were made.

The administrative claim was timely filed

Bearing this in mind, we shall now proceed to determine whether the administrative claim was timely
filed.

Relying on Article 13 of the Civil Code,47 which provides that a year is equivalent to 365 days, and
taking into account the fact that the year 2004 was a leap year, petitioner submits that the two-year
period to file a claim for tax refund/ credit for the period July 1, 2002 to September 30, 2002 expired
on September 29, 2004.48

We do not agree.

In Commissioner of Internal Revenue v. Primetown Property Group, Inc.,49 we said that as between
the Civil Code, which provides that a year is equivalent to 365 days, and the Administrative Code of
1987, which states that a year is composed of 12 calendar months, it is the latter that must prevail
following the legal maxim, Lex posteriori derogat priori.50 Thus:

Both Article 13 of the Civil Code and Section 31, Chapter VIII, Book I of the Administrative Code of
1987 deal with the same subject matter – the computation of legal periods. Under the Civil Code, a
year is equivalent to 365 days whether it be a regular year or a leap year. Under the Administrative
Code of 1987, however, a year is composed of 12 calendar months. Needless to state, under the
Administrative Code of 1987, the number of days is irrelevant.

There obviously exists a manifest incompatibility in the manner of

computing legal periods under the Civil Code and the Administrative Code of 1987. For this reason,
we hold that Section 31, Chapter VIII, Book I of the Administrative Code of 1987, being the more
recent law, governs the computation of legal periods. Lex posteriori derogat priori.

Applying Section 31, Chapter VIII, Book I of the Administrative Code of 1987 to this case, the two-
year prescriptive period (reckoned from the time respondent filed its final adjusted return on April 14,
1998) consisted of 24 calendar months, computed as follows:

Year 1 1st calendar month April 15, 1998 to May 14, 1998
2nd calendar month May 15, 1998 to June 14, 1998
3rd calendar month June 15, 1998 to July 14, 1998
4th calendar month July 15, 1998 to August 14, 1998
5th calendar month August 15, 1998 to September 14, 1998
6th calendar month September 15, 1998 to October 14, 1998
7th calendar month October 15, 1998 to November 14, 1998
8th calendar month November 15, 1998 to December 14, 1998
9th calendar month December 15, 1998 to January 14, 1999
10th calendar month January 15, 1999 to February 14, 1999
11th calendar month February 15, 1999 to March 14, 1999
12th calendar month March 15, 1999 to April 14, 1999
Year 2 13th calendar month April 15, 1999 to May 14, 1999
14th calendar month May 15, 1999 to June 14, 1999
15th calendar month June 15, 1999 to July 14, 1999
16th calendar month July 15, 1999 to August 14, 1999
17th calendar month August 15, 1999 to September 14, 1999
18th calendar month September 15, 1999 to October 14, 1999
19th calendar month October 15, 1999 to November 14, 1999
20th calendar month November 15, 1999 to December 14, 1999
 21st calendar month December 15, 1999 to January 14, 2000
22nd calendar month January 15, 2000 to February 14, 2000
23rd calendar month February 15, 2000 to March 14, 2000
24th calendar month March 15, 2000 to April 14, 2000

We therefore hold that respondent's petition (filed on April 14, 2000) was filed on the last day of the
24th calendar month from the day respondent filed its final adjusted return. Hence, it was filed within
the reglementary period.51

Applying this to the present case, the two-year period to file a claim for tax refund/credit for the
period July 1, 2002 to September 30, 2002 expired on September 30, 2004. Hence, respondent’s
administrative claim was timely filed.

The filing of the judicial claim was premature

However, notwithstanding the timely filing of the administrative claim, we

are constrained to deny respondent’s claim for tax refund/credit for having been filed in violation of
Section 112(D) of the NIRC, which provides that:

SEC. 112. Refunds or Tax Credits of Input Tax. –

xxxx

(D) Period within which Refund or Tax Credit of Input Taxes shall be Made. – In proper cases, the
Commissioner shall grant a refund or issue the tax credit certificate for creditable input taxes within
one hundred twenty (120) days from the date of submission of complete documents in support of the
application filed in accordance with Subsections (A) and (B) hereof.

In case of full or partial denial of the claim for tax refund or tax credit, or the failure on the part of the
Commissioner to act on the application within the period prescribed above, the taxpayer affected
may, within thirty (30) days from the receipt of the decision denying the claim or after the expiration
of the one hundred twenty day-period, appeal the decision or the unacted claim with the Court of Tax
Appeals. (Emphasis supplied.)

Section 112(D) of the NIRC clearly provides that the CIR has "120 days, from the date of the
submission of the complete documents in support of the application [for tax refund/credit]," within
which to grant or deny the claim. In case of full or partial denial by the CIR, the taxpayer’s recourse
is to file an appeal before the CTA within 30 days from receipt of the decision of the CIR. However, if
after the 120-day period the CIR fails to act on the application for tax refund/credit, the remedy of the
taxpayer is to appeal the inaction of the CIR to CTA within 30 days.

In this case, the administrative and the judicial claims were simultaneously filed on September 30,
2004. Obviously, respondent did not wait for the decision of the CIR or the lapse of the 120-day
period. For this reason, we find the filing of the judicial claim with the CTA premature.

Respondent’s assertion that the non-observance of the 120-day period is not fatal to the filing of a
judicial claim as long as both the administrative and the judicial claims are filed within the two-year
prescriptive period52 has no legal basis.
There is nothing in Section 112 of the NIRC to support respondent’s view. Subsection (A) of the said
provision states that "any VAT-registered person, whose sales are zero-rated or effectively zero-
rated may, within two years after the close of the taxable quarter when the sales were made, apply
for the issuance of a tax credit certificate or refund of creditable input tax due or paid attributable to
such sales." The phrase "within two (2) years x x x apply for the issuance of a tax credit certificate or
refund" refers to applications for refund/credit filed with the CIR and not to appeals made to the CTA.
This is apparent in the first paragraph of subsection (D) of the same provision, which states that the
CIR has "120 days from the submission of complete documents in support of the application filed in
accordance with Subsections (A) and (B)" within which to decide on the claim.

In fact, applying the two-year period to judicial claims would render nugatory Section 112(D) of the
NIRC, which already provides for a specific period within which a taxpayer should appeal the
decision or inaction of the CIR. The second paragraph of Section 112(D) of the NIRC envisions two
scenarios: (1) when a decision is issued by the CIR before the lapse of the 120-day period; and (2)
when no decision is made after the 120-day period. In both instances, the taxpayer has 30 days
within which to file an appeal with the CTA. As we see it then, the 120-day period is crucial in filing
an appeal with the CTA.

With regard to Commissioner of Internal Revenue v. Victorias Milling, Co., Inc.53 relied upon by
respondent, we find the same inapplicable as the tax provision involved in that case is Section 306,
now Section 229 of the NIRC. And as already discussed, Section 229 does not apply to
refunds/credits of input VAT, such as the instant case.

In fine, the premature filing of respondent’s claim for refund/credit of input VAT before the CTA
warrants a dismissal inasmuch as no jurisdiction was acquired by the CTA.

WHEREFORE, the Petition is hereby GRANTED. The assailed July 30, 2008 Decision and the
October 6, 2008 Resolution of the Court of Tax Appeals are hereby REVERSED and SET ASIDE.
The Court of Tax Appeals Second Division is DIRECTED to dismiss CTA Case No. 7065 for having
been prematurely filed.

SO ORDERED.

MARIANO C. DEL CASTILLO

Associate Justice

WE CONCUR:

RENATO C. CORONA
Chief Justice
Chairperson

PRESBITERO J. VELASCO, JR. TERESITA J. LEONARDO-DE CASTRO

Associate Justice Associate Justice

JOSE PORTUGAL PEREZ

Associate Justice

CERTIFICATION
Pursuant to Section 13, Article VIII of the Constitution, it is hereby certified that the conclusions in
the above Decision had been reached in consultation before the case was assigned to the writer of
the opinion of the Court’s Division.

G.R. No. 97973 January 27, 1992

SPOUSES GAUVAIN and BERNARDITA BENZONAN, petitioners, 

vs.
COURT OF APPEALS, BENITO SALVANI PE and DEVELOPMENT BANK OF THE
PHILIPPINES, respondents.

G.R. No. 97998 January 27, 1992

DEVELOPMENT BANK OF THE PHILIPPINES, petitioner, 

vs.
COURT OF APPEALS and BENITO SALVANI PE, respondents.

Ruben E. Agpalo for Sps. Gauvain and Bernardita Benzonan.

Vicente R. Acsay for Benito Salvani Pe.

Thomas T. Jacobo for DBP.

GUTIERREZ, JR., J.:

This is a petition to review the August 31, 1990 decision of the Court of Appeals which sustained the
right of respondent Benito Salvani Pe to repurchase a parcel of land foreclosed by petitioner
Development Bank of the Philippines (DBP) and sold to petitioners Gauvain and Bernardita
Benzonan.

Respondent Pe is a businessman in General Santos City who owns extensive commercial and
agricultural properties. He is the proprietor of the firm "Dadiangas B.P. Trading." One of the
properties he acquired through free patents and miscellaneous sales from the Bureau of Lands is a
26,064 square meters parcel covered by Free Patent No. 46128 issued on October 29, 1969. OCT
No. P-2404 was issued on November 24, 1969.

On February 24, 1970 or barely three months after he acquired the land, the respondent mortgaged
the lot in question, together with another lot covered by TCT No. 3614 and some chattels to secure a
commercial loan of P978,920.00 from the DBP. The lot was developed into a commercial-industrial
complex with ricemill and warehouse facilities, a solar drier, an office and residential building,
roadway, garden, depository, and dumping grounds for various materials.

When the private respondent failed to pay his loan after more than seven years had passed, DBP
foreclosed the mortgage on June 28, 1977. On that date, the total obligation amounted to
P1,114,913.34. DBP was the highest bidder. Certificates of sale were issued in its favor;
P452,995.00 was for the two lots and P108,450.00 for the chattels. The certificate covering the
disputed lot was registered with the Registry of Deeds on January 24, 1978.
After the foreclosure sale, respondent Pe leased the lot and its improvements from DBP for
P1,500.00 a month. Part of the property was also leased by DBP to the then National Grains
Authority.

The respondent failed to redeem the property within the one year period. On September 24, 1979
DBP sold the lot to the petitioner for P1,650,000.00 payable in quarterly amortizations over a five
year period. The petitioners occupied the purchased lot and introduced further improvements worth
P970,000.00.

On July 12, 1983, claiming that he was acting within the legal period given to him to repurchase,
respondent Pe offered in writing to repurchase the lot for P327,995.00. DBP countered, however,
that over the years a total of P3,056,739.52 had already been incurred in the preservation,
maintenance, and introduction of improvements.

On October 4, 1983, Pe filed a complaint for repurchase under Section 119 of Commonwealth Act
No. 141 with the Regional Trial Court (RTC) of General Santos City.

On November 27, 1986, the trial court rendered judgment. The dispositive portion reads:

WHEREFORE, in view of the foregoing, the defendant Development Bank of the

Philippines is ordered:

1) to reconvey unto the plaintiff the parcel of land in question (Lot No. P-2404) for the
repurchase price of P327,995.00 plus legal interest from June 18, 1977 to June 19,
1978 only, and the expenses of extrajudicial foreclosure of mortgage; expenses for
registration and ten percent (10%) attorneys fees;

2) ordering the defendants to vacate forever the premises of said property in favor of
the plaintiff upon payment of the total repurchase price;

3) ordering the defendants, jointly and solidarily, to pay the plaintiff attorney's fees in
the amount of P25,000.00;

4) and to set an example to government banking and lending institutions not to take
borrowers for granted by making it hard for them to repurchase by misleading them,
the bank is hereby ordered to pay the plaintiff by way of exemplary damages in the
amount of P50,000.00;

Ordering further the defendant DBP:

5) to reimburse the co-defendants spouses Benzonan the amount they have paid or
advanced the defendant DBP for the purchase of Lot O.C.T. No. P-2404;

6) ordering the defendants to pay the cost of suit. (Rollo of G.R. No. 97973, pp. 74-
75)

On appeal, the Court of Appeals affirmed the decision with modifications as follows:

xxx xxx xxx

 All the foregoing premises considered, judgment is hereby rendered AFFIRMING the
decision rendered by the court a quo with the modification that the defendant DBP
shall reimburse to its co-defendant Benzonan spouses all amounts that the latter
have paid for the land, minus interest, and that the Benzonan spouses shall be
allowed to remove the improvement that they have made on the property under
litigation, without impairing or damaging the same. (Rollo of G.R. No. 97973, p. 105)

A motion for reconsideration was denied on March 19, 1991.

The petitioners-spouses in G.R. No. 97973 raise the following "legal issues, reasons, or errors"
allegedly committed by the Court of Appeals, to wit:

1. The Court of Appeals erred in holding that conversion and use of the land in
question to industrial or commercial purposes, as a result of which it could no longer
be used for cultivation, and the fact that respondent Pe has vast holdings whose
motive in seeking to repurchase the property is to continue the business or for
speculation or greater profits did not deprive him of the right to repurchase under
Sec. 119 of CA 141, and, as a result, in ignoring or disregarding Pe's admissions and
undisputed facts establishing such circumstances, contrary to what this Court held
in Santana v. Mariñas, 94 SCRA 853 [1979], Vargas v. Court of Appeals, 91 SCRA
195 [1979] and Simeon v. Peña, 36 SCRA 610 [1970].

2. Assuming, arguendo, that respondent Pe still had the right to repurchase the land
under Sec. 119 of CA 141, the Court of Appeals erred in not counting the 5-year
period from the date of foreclosure sale on June 18, 1977 or at the very most from its
registration on January 24, 1978, in accordance with the prevailing doctrinal law at
the time as enunciated in Monge v. Angeles, 101 Phil. 561 [1957], Oliva
v.Lamadrid, 21 SCRA 737 [1967] and Tupas v. Damasco, 132 SCRA 593 [1984],
pursuant to which Pe's right to repurchase already expired.

3. The Court of Appeals erred in applying retroactively the ruling in Belisario

v. Intermediate Appellate Court, 165 SCRA 101 [1988], which held that the 5-year
period is counted from the date after the one-year period to redeem foreclosed
homestead expired, to the foreclosure of the land in question in 1977, as its
retroactive application revived Pe's lost right of repurchase and defeated petitioners'
right of ownership that already accrued under the then prevailing doctrinal law.

4. Assuming, arguendo, that respondent Pe had the right to repurchase the land in

question and assuming, further, that the 5-year period is to be counted from the
consolidation of ownership after the expiration of the one-year period to redeem, the
Court of Appeals erred in not holding that the mere filing of an action for repurchase
without tendering or depositing the repurchase price did not satisfy the requirements
of repurchase, Pe's failure to make the tender or deposit even up to the present
being confirmatory of speculative motive behind his attempt to repurchase.

5. Assuming, finally, that respondent Pe is entitled to repurchase the property, the

Court of Appeals erred in not holding that petitioners are possessors in good faith,
similar to a vendee a retro, entitled (a) to reimbursement of necessary and useful
expenses under Article 1616 of the Civil Code as held in Calagan v. CFI of
Davao, 95 SCRA 498 [1980] and in Lee v. Court of Appeals, 68 SCRA 196 [1975];
and (b) to refund of all amounts paid by them by reason of the sale of the property in
 their favor, including interest payments, in both instances with right of retention.
(Rollo of G.R. No. 97973, pp. 14-16)

In G.R No. 97998, DBP limited its petition to the value of the repurchase price and the nature of the
contract between the parties. It framed the issues as follows:

1. The Court of Appeals erred in not holding that Section 31 of Commonwealth Act
No. 459 as amended is not applicable in the instant case to determine the
repurchase price contrary to decisions of the Honorable Supreme Court in the
following cases: DBP v. Jimenez, et al. (36 SCRA 426) and DBP v. Mirang (66
SCRA 141).

2. The Court of Appeals erred in not holding that the law between the contracting
parties are the terms and conditions embodied in the contract signed by them.
(Rollo of G.R. No. 97998, p. 12)

We find merit in the petitions.

The determination of the main issues raised by the petitioners calls for the proper application of
Section 119 of CA 141 as amended which provides: "Every conveyance of land acquired under the
free patent or homestead provisions, when proper, shall be subject to repurchase by the applicant,
his widow, or legal heirs, within a period of five years from the date of conveyance."

There is no dispute over the fact that the Government awarded the land to respondent Pe so that he
could earn a living by farming the land. Did respondent Pe lose his right to repurchase the subject
agricultural lot under the aforequoted law considering its conversion for industrial or commercial
purposes? The evidence relating to the conversion is sufficiently established and yet was not
properly appreciated by the respondent court.

Only three months after getting the free patent and the original certificate of title over the subject lot,
it was mortgaged by respondent Pe to get a commercial loan of nearly P1 million from DBP. Pe
spent the proceeds of the loan to construct permanent improvements on the lot for his rice-mill and
other businesses, i.e., two warehouse buildings; administration-residential building; perimeter fence;
solar and concrete drier; shed; machine shop; dirty kitchen; and machineries and equipments such
as ricemill (TSN, August 13, 1984, pp. 173-174). The entire lot has been converted to serve
commercial and industrial purposes. The testimony of petitioners Gauvain Benzonan on this score
has not been successfully challenged, viz:

Q. Out of this 2.6 hectares land area, how much of this is devoted to
the solar drier construction?

A. The solar drier is about one thousand (1,000) square meters . . .

ah no, about six thousand (6,000) square meters.

Q. What about the area occupied by the warehouse and the ricemill
complex?

A. The warehouse and ricemill complex is occupying about one and a

half (1 1/2) hectares.
 Q. What about the area occupied by the residence as well as the
roadways?

A. It covers about another half of a hectare again, Sir.

Q. Is any part of this two point six hectares devoted to agricultural

production or production of agricultural crops?

A. None whatsoever because the other portion is occupied as a

dumping area for our waste materials. (TSN, PP. 361-362, Sept. 3,
1985).

The conversion of the lot for commercial purposes is understandable considering that the heart of
General Santos City developed in that area.

The respondent does not deny that, he is using the land for purely commercial and industrial
purposes. His explanation is that the land may be converted into agricultural land in the future. He
applies the Krivenko v. Register of Deeds of Manila (79 Phil. 461 [1947]) ruling that lands not
mineral or forest are agricultural in nature and may be devoted to business purposes without losing
their agricultural classification.

Indeed, the records show that it was never the intention of respondent Pe to utilize the land, given to
him for free by the Government, for agricultural purposes. He was not the kind of poor farmer for
whom homesteads and free patents were intended by the law.

As stated by the petitioners:

1. Respondent Pe acquired by free patent the land in question with an area of 2.6064
hectares, which was issued Original Certificate of Title No. P-2404 on November 24,
1969. Instead of cultivating it for agricultural purposes, Pe mortgaged the land, along
with another land, on February 24, 1970, or only three (3) months from issuance of
OCT No. 
P-2404, with the DBP for P978,920.00. (par. 4, complaint, Annex "A"). Pe testified
that his purpose was to construct in the land in question "bodega", an administration-
residential building, a perimeter fence, a concrete drier, and for some machineries
and equipment." (TSN, p. 95, June 22, 1984). He stated that the improvements and
facilities in the land included "the warehouse, the ricemill and a big warehouse
housing the palay of stocks of the National Grains Authority and an administration-
residential building, a solar drier and a perimeter fence and some sheds or
garage . . . a small piggery pen of several compartments, a dirty kitchen . . . a
machine shop." (TSN, pp. 173-174, August 13, 1984). Pe used the property for such
purposes and operated the ricemill business for a period of about nine (9) years until
September, 1979 (pars. 7 and 8, complaint, Annex "A"), without paying the DBP of
his mortgage indebtedness, as a result of which DBP foreclosed the properties.
(Annex "F")

2. Respondent Pe testified that the land in question with its improvements has an
appraised value of P1,347,860.00 in 1974, and P2,028,030.00 in 1976. (TSN, pp.
176, 177, August 13, 1984). Petitioner Gauvain Benzonan claimed it has a fair
market value, as of 1985, of P5,000,000.00. (p. 8, trial court decision, Annex "F"). As
against such value of the land and improvements, respondent Pe insisted that the
 repurchase price should only be the principal sum of P327,995.00. (par. 10,
complaint, Annex "A")

3. Respondent Pe, when he testified in 1984, said he was 60 years old; he is now
therefore over 66 years old. He is a "businessman and resident of Dadiangas,
General Santos City" (TSN, p. 3, June 20, 1984), doing business under the style,
"Dadiangas B.P. Trading" (TSN, 144, June 22, 1984). In his sworn declaration dated
July 18, 1983, filed with the assessor's office pursuant to P.D. No. 1612, he listed the
following real properties and their market value, all situated in General Santos City,
to wit (Exh. 11-Benzonan):

(a) 447 sq. m. residential P 28,720.00

(b) 11.9980 hectares of agri. lot P 23,880.00
(c) 2.000 hectares of agri. lot P 40,000.00
(d) 2.000 hectares of agri. lot P 40,000.00
(e) 6,064 sq. m. of industrial lot P303,200.00
(f) Industrial building P434,130.00
(g) Industrial machinery P 96,000.00

On June 22, 1984, when Pe testified, he said that "I own three (3) residential lots,"
(TSN, p. 153, June 22, 1984) and that he and his wife own in Antique Province
"around twenty (20) hectares planted to coconut and sugarcane" (ibid., p. 145); he
used to have 30 hectares of agricultural lands and 22 subdivision lots, which he sold
to Norma Salvani and Carlos Salvani. (TSN, pp. 166-169, June 22, 1984); Exhs. 1, 1-
A, 1-B, 1-C, 3, 6, 6-A-Benzonan). (Rollo of G.R. No. 97973, pp. 17-19)

In the light of the records of these cases, we rule that respondent Pe cannot repurchase the disputed
property without doing violence to everything that CA No. 141 (as amended) stands for.

We ruled in Simeon v. Peña, 36 SCRA 610, 617 [1970] through Chief Justice Claudio Teehankee,
that:

xxx xxx xxx

These findings of fact of the Court of Appeals that "(E)vidently, the reconveyance
sought by the plaintiff (petitioner) is not in accordance with the purpose of the law,
that is, "to preserve and keep in the family of the homesteader that portion of public
land which the State has gratuitously given to him"" and expressly found by it to "find
justification from the evidence of record. . . ."

Under the circumstances, the Court is constrained to agree with the Court of Appeals
that petitioners' proposed repurchase of the property does not fall within the purpose,
spirit and meaning of section 119 of the Public Land Act, authorizing redemption of
the homestead from any vendee thereof.

We reiterated this ruling in Vargas v. Court of Tax Appeals, 91 SCRA 195, 200, [1979] viz:

As regards the case of Simeon v. Peña, petitioners ought to know that petitioner
therein was not allowed to repurchase because the lower court found that his
purpose was only speculative and for profit. In the present case, the Court of Appeals
 found that herein petitioners' purposes and motives are also speculative and for
profit.

It might be well to note that the underlying principle of Section 119 of Commonwealth
Act No. 141 is to give the homesteader or patentee every chance to preserve for
himself and his family the land that the State had gratuitously given to him as a
reward for his labor in cleaning and cultivating it. (Simeon v. Peña, 36 SCRA 617).
As found by the Court of Appeals, the motive of the petitioners in repurchasing the
lots in question being one for speculation and profit, the same therefore does not fall
within the purpose, spirit and meaning of said section.

and in Santana et al. v. Mariñas, 94 SCRA 853, 861-862 [1979] to wit:

In Simeon v. Peña we analyzed the various cases previously decided, and arrived at
the conclusion that the plain intent, the raison d' etre, of Section 119, C.A. No. 141
". . . is to give the homesteader or patentee every chance to preserve for himself and
his family the land that the state had gratuitously given to him as a reward for his
labor in cleaning and cultivating it." In the same breath, we agreed with the trial court,
in that case, that "it is in this sense that the provision of law in question becomes
unqualified and unconditional. And in keeping with such reasons behind the passage
of the law, its basic objective is to promote public policy, that is, to provide home and
decent living for destitutes, aimed at promoting a class of independent small
landholders which is the bulwark of peace and order.

As it was in Simeon v. Peña, respondent Mariñas' intention in exercising the right of

repurchase "is not for the purpose of preserving the same within the family fold," but
"to dispose of it again for greater profit in violation of the law's policy and spirit." The
foregoing conclusions are supported by the trial court's findings of fact already cited,
culled from evidence adduced. Thus respondent Mariñas was 71 years old and a
widower at the time of the sale in 1956; that he was 78 when he testified on October
24, 1963 (or over 94 years old today if still alive); that . . . he was not living on the
property when he sold the same but was residing in the poblacion attending to a
hardware store, and that the property was no longer agricultural at the time of the
sale, but was a residential and commercial lot in the midst of many subdivisions. The
profit motivation behind the effort to repurchase was conclusively shown when the
then plaintiff's counsel, in the case below, Atty. Loreto Castillo, in his presence,
suggested to herein petitioners' counsel, Atty. Rafael Dinglasan ". . . to just add to
the original price so the case would be settled." Moreover, Atty. Castillo manifested in
court that an amicable settlement was possible, for which reason he asked for time
"within which to settle the terms thereof'" and that "the plaintiff . . . Mr. Mariñas, has
manifested to the Court that if the defendants would be willing to pay the sum of One
Peso and Fifty Centavos (P1.50) per square meter, he would be willing to accept the
offer and dismiss the case."

Our decisions were disregarded by the respondent court which chose to adopt a Court of Appeals
ruling in Lim, et al. v. Cruz, et al., CA-G.R. No. 67422, November 25, 1983 that the motives of the
homesteader in repurchasing the land are inconsequential" and that it does not matter even "when
the obvious purpose is for selfish gain or personal aggrandizement."

The other major issue is when to count the five-year period for the repurchase by respondent Pe —
whether from the date of the foreclosure sale or from the expiration of the one year period to redeem
the foreclosed property.
The respondent court ruled that the period of repurchase should be counted from the expiration of
the one year period to redeem the foreclosed property. Since the one year period to redeem expired
on January 24, 1979 and he filed Case No. 280 on October 4, 1983 to enforce his right to
repurchase the disputed property, the Court of Appeals held that Pe exercised his right to
repurchase within the five-year period provided by Section 119 of CA 141 as amended.

The respondent court cited Belisario, et al., v. Intermediate Appellate Court, et al., 165 SCRA 101,
107 [1988] where we held:

. . . In addition, Section 119 of Commonwealth Act 141 provides that every

conveyance of land acquired under the free patent or homestead patent provisions of
the Public Land Act, when proper, shall be subject to repurchase by the applicant, his
widow or legal heirs within the period of five years from the date of conveyance. The
five-year period of redemption fixed in Section 119 of the Public Land Law of
homestead sold at extrajudicial foreclosure begins to run from the day after the
expiration of the one-year period of repurchase allowed in an extrajudicial
foreclosure. (Manuel v. PNB, et al., 101 Phil. 968) Hence, petitioners still had five (5)
years from July 22, 1972 (the expiration of the redemption period under Act 3135)
within which to exercise their right to repurchase under the Public Land Act.

As noted by the respondent court, the 1988 case of Belisario reversed the previous rulings of this
Court enunciated in Monge, et al., v. Angeles, et al., 101 Phil. 563 [1957] and Tupas v. Damasco, et
al., 132 SCRA 593 [1984] to the effect that the five year period of repurchase should be counted
from the date of conveyance or foreclosure sale. The petitioners, however, urge that Belisario should
only be applied prospectively or after 1988 since it established a new doctrine.

We sustain the petitioners' position. It is undisputed that the subject lot was mortgaged to DBP on
February 24, 1970. It was acquired by DBP as the highest bidder at a foreclosure sale on June 18,
1977, and then sold to the petitioners on September 29, 1979.

At that time, the prevailing jurisprudence interpreting section 119 of R.A. 141 as amended was that
enunciated in Monge and Tupas cited above. The petitioners Benzonan and respondent Pe and the
DBP are bound by these decisions for pursuant to Article 8 of the Civil Code "judicial decisions
applying or interpreting the laws or the Constitution shall form a part of the legal system of the
Philippines." But while our decisions form part of the law of the land, they are also subject to Article 4
of the Civil Code which provides that "laws shall have no retroactive effect unless the contrary is
provided." This is expressed in the familiar legal maxim lex prospicit, non respicit, the law looks
forward not backward. The rationale against retroactivity is easy to perceive. The retroactive
application of a law usually divests rights that have already become vested or impairs the obligations
of contract and hence, is unconstitutional (Francisco v. Certeza, 3 SCRA 565 [1961]).

The same consideration underlies our rulings giving only prospective effect to decisions enunciating
new doctrines. Thus, we emphasized in People v. Jabinal, 55 SCRA 607 [1974] ". . . when a
doctrine of this Court is overruled and a different view is adopted, the new doctrine should be applied
prospectively and should not apply to parties who had relied on the old doctrine and acted on the
faith thereof."

There may be special cases where weighty considerations of equity and social justice will warrant a
retroactive application of doctrine to temper the harshness of statutory law as it applies to poor
farmers or their widows and orphans. In the present petitions, however, we find no such equitable
considerations. Not only did the private respondent apply for free agricultural land when he did not
need it and he had no intentions of applying it to the noble purposes behind the law, he would now
repurchase for only P327,995.00, the property purchased by the petitioners in good faith for
P1,650,000.00 in 1979 and which, because of improvements and the appreciating value of land
must be worth more than that amount now.

The buyers in good faith from DBP had a right to rely on our rulings in Monge and Tupas when they
purchased the property from DBP in 1979 or thirteen (13) years ago. Under the rulings in these two
cases, the period to repurchase the disputed lot given to respondent Pe expired on June 18, 1982.
He failed to exercise his right. His lost right cannot be revived by relying on the 1988 case
of Belisario. The right of petitioners over the subject lot had already become vested as of that time
and cannot be impaired by the retroactive application of the Belisario ruling.

Considering our above findings, we find no need to resolve the other issues raised by the petitioners
in their petitions.

WHEREFORE, the questioned decision of the respondent court is hereby REVERSED and SET
ASIDE. The complaint for repurchase under Section 119 of Commonwealth Act No. 141 as
amended is DISMISSED. No pronouncement as to costs.

Feliciano, Bidin, Davide, Jr. and Romero, JJ., concur.

G.R. No. 100776 October 28, 1993

ALBINO S. CO, petitioner, 
vs.
COURT OF APPEALS and PEOPLE OF THE PHILIPPINES, respondents.

Antonio P. Barredo for petitioner.

The Solicitor General for the people.

NARVASA, C.J.:

In connection with an agreement to salvage and refloat asunken vessel — and in payment of his
share of the expenses of the salvage operations therein stipulated — petitioner Albino Co delivered
to the salvaging firm on September 1, 1983 a check drawn against the Associated Citizens' Bank,
postdated November 30, 1983 in the sum of P361,528.00.  The check was deposited on January 3,
1

1984. It was dishonored two days later, the tersely-stated reason given by the bank being: "CLOSED
ACCOUNT."

A criminal complaint for violation of Batas Pambansa Bilang 22  was filed by the salvage company
2

against Albino Co with the Regional Trial Court of Pasay City. The case eventuated in Co's
conviction of the crime charged, and his being sentenced to suffer a term of imprisonment of sixty
(60) days and to indemnify the salvage company in the sum of P361,528.00.

Co appealed to the Court of Appeals. There he sought exoneration upon the theory that it was
reversible error for the Regional Trial Court to have relied, as basis for its verdict of conviction, on
the ruling rendered on September 21, 1987 by this Court in Que v. People, 154 SCRA 160
(1987)  — i.e., that a check issued merely to guarantee the performance of an obligation is
3

nevertheless covered by B.P. Blg. 22. This was because at the time of the issuance of the check
on September 1, 1983, some four (4) years prior to the promulgation of the judgment in Que
v. Peopleon September 21, 1987, the delivery of a "rubber" or "bouncing" check as guarantee for an
obligation was not considered a punishable offense, an official pronouncement made in a Circular of
the Ministry of Justice. That Circular (No. 4), dated December 15, 1981, pertinently provided as
follows:

2.3.4. Where issuance of bouncing check is neither estafa nor violation of B.P. Blg.
22.

Where the check is issued as part of an arrangement to guarantee or secure the

payment of an obligation, whether pre-existing or not, the drawer is not criminally
liable for either estafa or violation of B.P. Blg. 22 (Res. No. 438, s. 1981, Virginia
Montano vs. Josefino Galvez, June 19, 1981; Res. No. 707, s. 1989; Alice Quizon vs.
Lydia Calingo, October 23, 1981, Res. No. 769, s. 1981, Alfredo Guido vs. Miguel A.
Mateo, et. al., November 17, 1981; Res. No. 589, s. 1981, Zenaida Lazaro vs. Maria
Aquino, August 7, 1981).

This administrative circular was subsequently reversed by another issued on August 8, 1984
(Ministry Circular No. 12) — almost one (1) year after Albino Co had delivered the "bouncing" check
to the complainant on September 1, 1983. Said Circular No. 12, after observing inter alia that
Circular No. 4 of December 15, 1981 appeared to have been based on "a misapplication of the
deliberation in the Batasang Pambansa, . . . (or) the explanatory note on the original bill, i.e. that the
intention was not to penalize the issuance of a check to secure or guarantee the payment of an
obligation," as follows:
4

Henceforth, conforming with the rule that an administrative agency having

interpreting authority may reverse its administration interpretation of a statute, but
that its review interpretation applies only prospectively (Waterbury Savings Bank vs.
Danaher, 128 Conn., 476; 20 a2d 455 (1941), in all cases involving violation of Batas
Pambansa Blg. 22 where the check in question is issued after this date, the claim
that the check is issued as a guarantee or part of an arrangement to secure an
obligation collection will no longer be considered a valid defense.

Co's theory was rejected by the Court of Appeals which affirmed his conviction. Citing Senarillos
v. Hermosisima, 101 Phil. 561, the Appellate Court opined that the Que doctrine did not amount to
the passage of new law but was merely a construction or interpretation of a pre-existing one, i.e., BP
22, enacted on April 3, 1979.

From this adverse judgment of the Court of Appeals, Albino Co appealed to this Court
on certiorari under Rule 45 of the Rules of Court. By Resolution dated September 9, 1991, the Court
dismissed his appeal. Co moved for reconsideration under date of October 2, 1991. The Court
required comment thereon by the Office of the Solicitor General. The latter complied and, in its
comment dated December 13, 1991, extensively argued against the merits of Albino Co's theory on
appeal, which was substantially that proffered by him in the Court of Appeals. To this comment,
Albino Co filed a reply dated February 14, 1992. After deliberating on the parties' arguments and
contentions, the Court resolved, in the interests of justice, to reinstate Albino Co's appeal and
adjudicate the same on its merits.

Judicial decisions applying or interpreting the laws or the Constitution shall form a
part of the legal system of the Philippines," according to Article 8 of the Civil Code.
"Laws shall have no retroactive effect, unless the contrary is provided," declares
Article 4 of the same Code, a declaration that is echoed by Article 22 of the Revised
 Penal Code: "Penal laws shall have, a retroactive effect insofar as they favor the
person guilty of a felony, who is not a habitual criminal . . .
5

The principle of prospectivity of statutes, original or amendatory, has been applied in many cases.
These include: Buyco v. PNB, 961 2 SCRA 682 (June 30, 1961), holding that Republic Act No. 1576
which divested the Philippine National Bank of authority to accept back pay certificates in payment of
loans, does not apply to an offer of payment made before effectivity of the act; Largado
v. Masaganda, et al., 5 SCRA 522 (June 30, 1962), ruling that RA 2613, s amended by RA 3090 on
June, 1961, granting to inferior courts jurisdiction over guardianship cases, could not be given
retroactive effect, in the absence of a saving clause; Larga v. Ranada, Jr., 64 SCRA 18, to the effect
that Sections 9 and 10 of Executive Order No. 90, amending Section 4 of PD 1752, could have no
retroactive application; People v. Que Po Lay, 94 Phil. 640, holding that a person cannot be
convicted of violating Circular No. 20 of the Central, when the alleged violation occurred before
publication of the Circular in the Official Gazette; Baltazar v. C.A., 104 SCRA 619, denying
retroactive application to P.D. No. 27 decreeing the emancipation of tenants from the bondage of the
soil, and P.D. No. 316 prohibiting ejectment of tenants from rice and corn farmholdings, pending the
promulgation of rules and regulations implementing P.D. No. 27; Nilo v. Court of Appeals, 128 SCRA
519, adjudging that RA 6389 whichremoved "personal cultivation" as a ground for the ejectment of a
tenant cannot be given retroactive effect in the absence of a statutory statement for
retroactivity; Tac-An v. CA, 129 SCRA 319, ruling that the repeal of the old Administrative Code by
RA 4252 could not be accorded retroactive effect; Ballardo v. Borromeo, 161 SCRA 500, holding
that RA 6389 should have only prospective application; (see also Bonifacio v. Dizon, 177 SCRA 294
and Balatbat v. CA, 205 SCRA 419).

The prospectivity principle has also been made to apply to administrative rulings and circulars, to
wit: ABS-CBN Broadcasting Corporation v. CTA, Oct. 12, 1981, 108 SCRA 142, holding that a
circular or ruling of the Commissioner of Internal Revenue may not be given retroactive effect
adversely to a taxpayer: Sanchez v.COMELEC, 193 SCRA 317, ruling that Resolution No. 90-0590
of the Commission on Elections, which directed the holding of recall proceedings, had no retroactive
application; Romualdez v. CSC, 197 SCRA 168, where it was ruled that CSC Memorandum Circular
No. 29, s. 1989 cannot be given retrospective effect so as to entitle to permanent appointment an
employee whose temporary appointment had expired before the Circular was issued.

The principle of prospectivity has also been applied to judicial decisions which, "although in
themselves not laws, are nevertheless evidence of what the laws mean, . . . (this being) the reason
whyunder Article 8 of the New Civil Code, 'Judicial decisions applying or interpreting the laws or the
Constitution shall form a part of the legal system . . .'"

So did this Court hold, for example, in Peo. v. Jabinal, 55 SCRA 607, 611:

It will be noted that when appellant was appointed Secret Agent by the Provincial
Government in 1962, and Confidential Agent by the Provincial commander in 1964,
the prevailing doctrine on the matter was that laid down by Us in People
v. Macarandang (1959) and People v. Lucero (1958).  Our decision in People
6

v. Mapa,  reversing the aforesaid doctrine, came only in 1967. The sole question in
7

this appeal is: should appellant be acquitted on the basis of Our rulings
in Macarandang and Lucero, or should his conviction stand in view of the complete
reverse of the Macarandang and Lucero doctrine in Mapa? . . .

Decisions of this Court, although in themselves not laws, are nevertheless evidence
of what the laws mean, and this is the reason why under Article 8 of the New Civil
Code, "Judicial decisions applying or interpreting the laws or the Constitution shall
 form a part of the legal system . . ."The interpretation upon a law by this Court
constitutes, in a way, a part of the law as of the date that law was originally passed,
since this Court's construction merely establishes the contemporaneous legislative
intent that the law thus construed intends to effectuate. The settled rule supported by
numerous authorities is a restatement of the legal maxim "legis interpretation legis
vim obtinet" — the interpretation placed upon the written law by a competent court
has the force of law. The doctrine laid down in Lucero and Macarandang was part of
the jurisprudence, hence, of the law, of the land, at the time appellant was found in
possession of the firearm in question and where he was arraigned by the trial court. It
is true that the doctrine was overruled in the Mapa case in 1967, but when a doctrine
of this Court is overruled and a different view is adopted, the new doctrine should be
applied prospectively, and should not apply to parties who had relied on, the old
doctrine and acted on the faith thereof. This is especially true in the construction and
application of criminal laws, where it is necessary that the punishment of an act be
reasonably foreseen for the guidance of society.

So, too, did the Court rule in Spouses Gauvain and Bernardita Benzonan v. Court of Appeals, et al.
(G.R. No. 97973) and Development Bank of the Philippines v. Court of Appeals, et al (G.R. No
97998), Jan. 27, 1992, 205 SCRA 515, 527-528: 8

We sustain the petitioners' position, It is undisputed that the subject lot was
mortgaged to DBP on February 24, 1970. It was acquired by DBP as the highest
bidder at a foreclosure sale on June 18, 1977, and then sold to the petitioners on
September 29, 1979.

At that time, the prevailing jurisprudence interpreting section 119 of R.A. 141 as
amended was that enunciated in Monge and Tupas cited above. The petitioners
Benzonan and respondent Pe and the DBP are bound by these decisions for
pursuant to Article 8 of the Civil Code "judicial decisions applying or interpreting the
laws or the Constitution shall form a part of the legal system of the Philippines." But
while our decisions form part of the law of the land, they are also subject to Article 4
of the Civil Code which provides that "laws shall have no retroactive effect unless the
contrary is provided." This is expressed in the familiar legal maxim lex prospicit, non
respicit, the law looks forward not backward. The rationale against retroactivity is
easy to perceive. The retroactive application of a law usually divests rights that have
already become vested or impairs the obligations of contract and hence, is
unconstitutional (Francisco vs. Certeza, 3 SCRA 565 [1061]).

The same consideration underlies our rulings giving only prospective effect to
decisions enunciating new doctrines. Thus, we emphasized in People v. Jabinal, 55
SCRA 607 [1974]" . . . when a doctrine of this Court is overruled and a different view
is adopted, the new doctrine should be applied prospectively and should not apply to
parties who had relied on the old doctrine and acted on the faith thereof.

A compelling rationalization of the prospectivity principle of judicial decisions is well set forth in the
oft-cited case of Chicot County Drainage Dist. v. Baxter States Bank, 308 US 371, 374 [1940]. The
Chicot doctrine advocates the imperative necessity to take account of the actual existence of a
statute prior to its nullification, as an operative fact negating acceptance of "a principle of absolute
retroactive invalidity.

Thus, in this Court's decision in Tañada v. Tuvera,  promulgated on April 24, 1985 — which declared
9

"that presidential issuances of general application, which have not been published,shall have no
force and effect," and as regards which declaration some members of the Court appeared "quite
apprehensive about the possible unsettling effect . . . (the) decision might have on acts done in
reliance on the validity of these presidential decrees . . ." — the Court said:

. . . . The answer is all too familiar. In similar situation is in the past this Court, had
taken the pragmatic and realistic course set forth in Chicot County Drainage District
vs. Baxter Bank (308 U.S. 371, 374) to wit:

The courts below have proceeded on the theory that the Act of Congress, having
found to be unconstitutional, was not a law; that it was inoperative, conferring no
rights and imposing no duties, and hence affording no basis for the challenged
decree. Norton vs. Shelby County, 118 US 425, 442; Chicago, I. & L. Ry. Co. v.
Hackett, 228 U. S. 559, 566. It is quite clear, however, that such broad statements as
to the effect of a determination of unconstitutionality must be taken with
qualifications. The actual existence of a statute, prior to such a determination, is an
operative fact and may have consequences which cannot justly be ignored. The past
cannot always be erased by a new judicial declaration. The effect of the subsequent
ruling as to invalidity may have to be considered in various aspects — with respect to
particular conduct, private and official. Questions of rights claimed to have become
vested, of status, of prior determinations deemed to have finality and acted upon
accordingly, of public policy in the light of the nature both of the statute and of its
previous application, demand examination. These questions are among the most
difficult of those who have engaged the attention of courts, state and federal, and it is
manifest from numerous decisions that an all-inclusive statement of a principle of
absolute retroactive invalidity cannot be justified.

Much earlier, in De Agbayani v. PNB, 38 SCRA 429 — concerning the effects of the invalidation of
"Republic Act No. 342, the moratorium legislation, which continued Executive Order No. 32, issued
by the then President Osmeña, suspending the enforcement of payment of all debts and other
monetary obligations payable by war sufferers," and which had been "explicitly held in Rutter v.
Esteban (93 Phil. 68 [1953]   . . . (to be) in 1953 'unreasonable and oppressive, and should not be
10

prolonged a minute longer . . ." — the Court made substantially the same observations, to wit: 11

. . . . The decision now on appeal reflects the orthodox view that an unconstitutional
act, for that matter an executive order or a municipal ordinance likewise suffering
from that infirmity, cannot be the source of any legal rights or duties. Nor can it justify
any official act taken under it. Its repugnancy to the fundamental law once judicially
declared results in its being to all intents and purposes amere scrap of paper. . . . It is
understandable why it should be so, the Constitution being supreme and paramount.
Any legislative or executive act contrary to its terms cannot survive.

Such a view has support in logic and possesses the merit of simplicity. lt may not
however be sufficiently realistic. It does not admit of doubt that prior to the
declaration of nullity such challenged legislative or executive act must have been in
force and had to be compiled with. This is so as until after the judiciary, in an
appropriate case, declares its invalidity,, it is entitled to obedience and respect.
Parties may have acted under it and may have changed theirpositions, what could be
more fitting than that in a subsequent litigation regard be had to what has been done
while such legislative or executive act was in operation and presumed to be valid in
all respects. It is now accepted as a doctrine that prior to its being nullified, its
existence is a fact must be reckoned with. This is merely to reflect awareness that
precisely because the judiciary is the governmental organ which has the final say on
 whether or not a legislative or executive measure is valid, a, period of time may have
elapsed before it can exercise the power of judicial review that may lead to a
declaration of nullity. It would be to deprive the law of its quality of fairness and
justice then, if there be no recognition of what had transpired prior to such
adjudication.

In the language of an American Supreme Court decision: 'The actual existence of a

statute, prior to such a determination [of unconstitutionality], is an operative fact and
may have consequences which cannot justly be ignored. The past cannot always be
erased by a new judicial declaration. The effect of the subsequent ruling as to
invalidity may have to be considered in various aspects, — with respect to particular
relations, individual and corporate, and particular conduct, private and official (Chicot
County Drainage Dist. v. Baxter States Bank, 308 US 371, 374 [1940]). This
language has been quoted with approval in a resolution in Araneta v. Hill (93 Phil.
1002 [1953]) and the decision in Manila Motor Co. Inc. v. Flores (99 Phil. 738 [1956]).
An even more recent instance is the opinion of Justice Zaldivar speaking for the
Court in Fernandez v. Cuerva and Co. (L-21114, Nov. 28, 1967, 21 SCRA 1095).

Again, treating of the effect that should be given to its decision in Olaguer v. Military Commission No
34,   — declaring invalid criminal proceedings conducted during the martial law regime against
12

civilians, which had resulted in the conviction and incarceration of numerous persons — this Court,
in Tan vs. Barrios, 190 SCRA 686, at p. 700, ruled as follows:

In the interest of justice and consistently, we hold that Olaguer should, in principle,
be applied prospectively only to future cases and cases still ongoing or not yet final
when that decision was promulgated. Hence, there should be no retroactive
nullification of final judgments, whether of conviction or acquittal, rendered by military
courts against civilians before the promulgation of the Olaguer decision. Such final
sentences should not be disturbed by the State. Only in particular cases where the
convicted person or the State shows that there was serious denial of constitutional
rights of the accused, should the nullity of the sentence be declared and a retrial be
ordered based on the violation of the constitutional rights of the accused and not on
the Olaguer doctrine. If a retrial is no longer possible, the accused should be
released since judgment against him is null on account of the violation of his
constitutional rights and denial of due process.

xxx xxx xxx

The trial of thousands of civilians for common crimes before the military tribunals and
commissions during the ten-year period of martial rule (1971-1981) which were
created under general orders issued by President Marcos in the exercise of his
legislative powers is an operative fact that may not just be ignored. The belated
declaration in 1987 of the unconstitutionality and invalidity of those proceedings did
not erase the reality of their consequences which occurred long before our decision
in Olaguer was promulgated and which now prevent us from carrying Olaguer to the
limit of its logic. Thus did this Court rule in Municipality of Malabang v. Benito, 27
SCRA 533, where the question arose as to whether the nullity of creation of a
municipality by executive order wiped out all the acts of the local government
abolished.  13

It would seem then, that the weight of authority is decidedly in favor of the proposition that the
Court's decision of September 21, 1987 in Que v. People, 154 SCRA 160 (1987)   that a check
14
issued merely to guarantee the performance of an obligation is nevertheless covered by B.P. Blg. 22
— should not be given retrospective effect to the prejudice of the petitioner and other persons
situated, who relied on the official opinion of the Minister of Justice that such a check did not fall
within the scope of B.P. Blg. 22.

Inveighing against this proposition, the Solicitor General invokes U.S. v. Go Chico, 14 Phil. 128,
applying the familiar doctrine that in crimes mala prohibita, the intent or motive of the offender is
inconsequential, the only relevant inquiry being, "has the law been violated?" The facts in Go
Chico are substantially different from those in the case at bar. In the former, there was no official
issuance by the Secretary of Justice or other government officer construing the special law
violated;   and it was there observed, among others, that "the defense . . . (of) an honest
15

misconstruction of the law under legal advice"   could not be appreciated as a valid defense. In the
16

present case on the other hand, the defense is that reliance was placed, not on the opinion of a
private lawyer but upon an official pronouncement of no less than the attorney of the Government,
the Secretary of Justice, whose opinions, though not law, are entitled to great weight and on which
reliance may be placed by private individuals is reflective of the correct interpretation of a
constitutional or statutory provision; this, particularly in the case of penal statutes, by the very nature
and scope of the authority that resides in as regards prosecutions for their violation.  Senarillos
17

vs.Hermosisima, supra, relied upon by the respondent Court of Appeals, is crucially different in that
in said case, as in U.S. v. Go Chico, supra, no administrative interpretation antedated the contrary
construction placed by the Court on the law invoked.

This is after all a criminal action all doubts in which, pursuant to familiar, fundamental doctrine, must
be resolved in favor of the accused. Everything considered, the Court sees no compelling reason
why the doctrine of mala prohibita should override the principle of prospectivity, and its clear
implications as herein above set out and discussed, negating criminal liability.

WHEREFORE, the assailed decisions of the Court of Appeals and of the Regional Trial Court are
reversed and set aside, and the criminal prosecution against the accused-petitioner is DISMISSED,
with costs de oficio.

SO ORDERED.

[G.R. No. 143789. November 27, 2000.]

SYSTEMS FACTORS CORPORATION and MODESTO DEAN, Petitioners, v. NATIONAL LABOR

RELATIONS COMMISSION, RONALDO LAZAGA and LUIS C. SINGSON, Respondents.

RESOLUTION

GONZAGA-REYES, J.:

The instant petition seeks to set aside the Resolution dated February 15, 2000 dismissing the petition
for certiorari and the Resolution dated June 22, 2000 denying the motion for reconsideration, both issued by
the Court of Appeals in CA-G.R. SP No. 56849. chanrob1es virtua1 1aw 1ibrary

Petitioner Systems Factors Corporation is a corporation engaged in the business of installing electrical
system in buildings and infrastructure projects wherein it employs electricians, engineers and other
personnel. Private respondents Ronaldo Lazaga and Luis Singson were employed by petitioner corporation
as electricians in one of its projects. Private respondents filed a complaint against petitioners for illegal
dismissal and non-payment of backwages, service incentive fees, premium pay, separation pay and other
allowances. The Labor Arbiter rendered judgment ordering petitioners to reinstate private respondents to
their former positions and to pay them backwages. On appeal, the NLRC affirmed the LA-decision.
Petitioners allegedly received the NLRC judgment on August 10, 1999 and a motion for reconsideration
thereto was filed on August 20, 1999. On November 25, 1999, petitioners received the NLRC-Resolution
dated November 11, 1999 denying their motion for reconsideration. Hence, on January 24, 2000, petitioners
filed a petition for certiorari pursuant to Rule 65 with the Court of Appeals. On February 15, 2000, the Court
of Appeals issued a resolution denying the petition for failure of petitioners to comply with procedural
requirements, i.e., (1) the petition was filed out of time, and (2) except for the assailed NLRC resolutions,
the documents and material portions referred to in the petition were not certified. On Motion for
Reconsideration, the Court of Appeals, in its Resolution dated June 22, 2000, applied this Court’s ruling in
the case of Cadayona v. Court of Appeals, et. al., G.R. No. 128772, February 3, 2000 and gave weight to
petitioners’ submission that only the questioned resolution need be certified and not the entire records. Said
motion for reconsideration was nonetheless denied in view of its finding that the petition was filed out of
time.

The Court of Appeals, in finding that the petition for certiorari was filed out of time, reckoned the counting of
the period of sixty (60) days, pursuant to Section 4, Rule 65 of the 1997 Rules of Civil Procedure, from
receipt on August 10, 1999 of the NLRC-resolution dismissing the appeal which is interrupted by the filing on
August 20, 1999 of the Motion for Reconsideration; and the remaining period to be counted from receipt on
November 25, 1999 of the resolution denying the motion for reconsideration. As found by the Court of
Appeals, the petition was filed late as petitioners had fifty (50) days remaining or until January 14, 2000
within which to file the petition for certiorari. The petition for certiorari was filed only on January 24, 2000.
1aw 1ibrary
chanrob1es virtua1

In the instant petition, petitioners invoke A.M. No. 00-2-03-SC, which took effect on September 1, 2000,
specifically amending Section 4, Rule 65 of the 1997 Rules of Civil Procedure wherein the sixty-day period is
reckoned from receipt of the resolution denying the motion for reconsideration. Thus, from receipt by
petitioners on November 25, 1999 of the resolution denying the motion for reconsideration, the filing of the
petition for certiorari with the Court of Appeals on January 24, 2000 would have been within the
reglementary period. Petitioners argue that before a party can file a petition for certiorari, a motion for
reconsideration is a mandatory pleading and thus, it is logical to assume that the sixty-day period should be
reckoned from notice of resolution denying the motion for reconsideration. Petitioners likewise argue that
remedial laws should be construed liberally in order to give litigants ample opportunity to prove their
respective claims and avoid denial of substantial justice due to legal technicalities.

On September 18, 2000, this Court issued a Resolution requiring respondents to comment on the petition.

Respondents filed their Comment alleging that the issue in the present petition is not whether liberality
should be applied. They contend that the controversy sought to be laid to rest would multiply as similar
requests for liberality, leniency and exceptions would be filed. They argue that the Labor Code mandates
that conflicts in the interpretation of the law and the rules should be resolved in favor of the working man,
respondents herein. Moreover, the plea of liberality should be denied as there is no reason other than
neglect of counsel that may compel this Court to treat this case as an exception to the rule.

We find for the petitioners.

A.M. No. 00-2-03-SC amended Section 4, Rule 65 of the 1997 Rules of Civil Procedure (as amended by the
Resolution of July 21, 1998), which took effect September 1, 2000 and provides: jgc:chanrobles.com.ph

"SEC. 4. When and where petition filed. — The petition shall be filed not later than sixty (60) days from
notice of the judgment, order or resolution. In case a motion for reconsideration or near trial is timely filed,
whether such motion is required or not, the sixty (60) day period shall be counted from notice of the denial
of said motion.

The petition shall be filed in the Supreme Court or, if it relates to the acts or omissions of a lower court or of
a corporation, board, officer or person, in the Regional Trial Court exercising jurisdiction over the territorial
area as defined by the Supreme Court. It may also be filed in the Court of Appeals whether or not the same
is in aid of its appellate jurisdiction, or in the Sandiganbayan if it is in aid of its appellate jurisdiction. If it
involves the acts or omissions of a quasi-judicial agency, unless otherwise provided by law or these rules,
the petition shall be filed in and cognizable only by the Court of Appeals.

No extension of time to file the petition shall be granted except for compelling reason and in no case
exceeding fifteen (15) days." cralaw virtua1aw library

We hold that the amendment under A.M. No. 00-2-03-SC wherein the sixty-day period to file a petition
for certiorari is reckoned from receipt of the resolution denying the motion for reconsideration should be
deemed applicable. Remedial statutes or statutes relating to remedies or modes of procedure, which do not
create new or take away vested rights, but only operate in furtherance of the remedy or confirmation of
rights already existing, do not come within the legal conception of a retroactive law, or the general rule
against retroactive operation of statutes. 1 Statutes regulating to the procedure of the courts will be
construed as applicable to actions pending and undetermined at the time of their passage. Procedural laws
are retroactive in that sense and to that extent. The retroactive application of procedural laws is not
violative of any right of a person who may feel that he is adversely affected. 2 The reason is that as a
general rule, no vested right may attach to nor arise from procedural laws. 3 chanrob1es virtua1 1aw 1ibrary

The above conclusion is in consonance with the provision in Section 6, Rule 1 of the 1997 Rules of Civil
Procedure that" (T)hese Rules shall be liberally construed in order to promote their objective of securing a
just, speedy and inexpensive disposition of every action and proceeding." cralaw virtua1aw library

WHEREFORE, the petition is hereby GRANTED. The assailed Resolutions dated February 15, 2000 and June
22, 2000 are hereby SET ASIDE and the case is REMANDED to the Court of Appeals for further proceedings. 

SO ORDERED.

G.R. No. 141959               September 29, 2000

JUANITA NARZOLES, PERLITA GUTIERREZ, MYLENE GERONAGA, LETICIA M. FORNAL,

ARNEL DIMALIBOT, MARITES SAGUID, IRENE MARCENE, ABRAM GERONAGA, ROLANDO
LU, MARIBETH HERNANDEZ, CORAZON AGARAP, PATRICIA ROSARIO, BERNADETTE LU,
ANGELES MANGUL and JOSEFINA MARTE, petitioners, 
vs.
NATIONAL LABOR RELATIONS COMMISSION, EASTERN MINDORO INSTITUTE OF
TECHNOLOGY AND SCIENCES (EMITS), AND MR. MARCIAL S. SEMILLA, respondents.

RESOLUTION

KAPUNAN, J.:

Section 4, rule 65, as amended by Circular No. 39-98, provides that the 60-day period for filing a
petition for certiorari shall be interrupted by the filing of a motion for reconsideration or new trial. In
the event of the denial of the motion, the petitioner only has the remaining period within which to file
the petition. Does the amendment apply to cases where the motion for reconsideration was filed
before the amendment although the petition was filed after the amendment took effect? This is the
question originally raised by the instant petition.

From the adverse decision of the Labor Arbiter dismissing their complaint for illegal dismissal,
petitioner-employees appealed to the National Labor Relations Commission. The NLRC modified the
decision of the Labor Arbiter and ordered respondents to reinstate petitioners "but without
backwages." Petitioners received the NLRC decision on 23 July 1998, and filed a motion for
reconsideration on 3 August 1998. (The last day for filing said motion was on 2 August 1998, a
Sunday.)

On September 1, 1998, the amendment to Section 4, Rule 65 took effect per Circular No. 39-98. The
amendment added another paragraph to said Section, and reads:

If the petitioner had filed a motion for new trial or reconsideration in due time after notice of said
judgment, order, or resolution the period herein fixed shall be interrupted. If the motion is denied, the
aggrieved party may file the petition within the remaining period, but which shall not be less than five
(5) days in any event, reckoned from notice of such denial. No extension of time to file the petition
shall be granted except for the most compelling reason and in no case to exceed fifteen (15) days.

Previous to the amendment, Section 4, Rule 65 provided in the lone paragraph that "(t)he petition
may be filed not later than sixty (60) days from notice of the judgment, order or resolution sought to
be assailed in the Supreme Court."

On 19 October 1998, petitioners received a copy of the NLRC Resolution denying their motion for
reconsideration. Petitioners filed a petition for certiorari in this Court on 17 December 1998. The
Court referred the case to the Court of Appeals pursuant to the ruling in St. Martin Funeral Homes
vs. NLRC. 1

Acting on the petition, the court of appeals denied the same for late filing. Apparently, the CA applied
Section 4, Rule 65, as amended by Circular No. 39-98, in computing the period for the filing of the
petition for certiorari. It held:

The reglementary period to file petition for certiorari is sixty (60) days from notice of the accrual of
the cause for certiorari (Sec. 4, Rule 65, 1997 Rules of Civil Procedure).

Petitioner's last day to file their petition for certiorari is December 8, 1998. The petition was filed
before the Honorable Supreme Court on December 17, 1998. Consequently, this court hereby
RESOLVES TO DISMISS the petition for having been filed beyond the reglementary period. 2

Their motion for reconsideration having been denied by the CA, petitioners filed the present petition
for review.

There is no question that the amendments brought about by Circular No. 39-98, which took effect on
September 1, 1998, were already in force, and therefore applicable when petitioners filed their
petition. Statutes regulating the procedure of the courts are applicable to actions pending and
undetermined at the time of their passage. Procedural laws are retroactive in that sense. No vested
3 

rights attach to procedural laws. Consequently, the CA, in accordance with Circular No. 39-98,
4 

correctly deducted the 16 days (the fifteenth day was a Sunday) it took for petitioners to file their
motion for reconsideration from the 60-day reglementary period. As petitioners only had the
remaining period of 44 days from 19 October 1998, when it received a copy of the resolution denying
reconsideration, to file the petition for certiorari, or until 8 December 1998, the filing of the petition on
17 December 1998 was nine (9) days too late.

Petitioners, however, claim exception to the retroactive application of Circular No. 39-98 since it
would work injustice to them. We do not deem it necessary to rule on this contention in view of
5 

further amendments to Section 4, Rule 65.

The Court has observed that Circular No. 39-98 has generated tremendous confusion resulting in
the dismissal of numerous cases for late filing. This may have been because, historically, i.e., even
before the 1997 revision to the Rules of Civil Procedure, a party had a fresh period from receipt of
the order denying the motion for reconsideration to file a petition for certiorari. Were it not for the
amendments brought about by Circular No. 39-98, the cases so dismissed would have been
resolved on the merits. Hence, the Court deemed it wise to revert to the old rule allowing a party a
fresh 60-day period from notice of the denial of the motion for reconsideration to file a petition
for certiorari. Earlier this year, the Court resolved, in A.M. No. 00-2-03-SC, to further amend Section
4, Rule 65 to read as follows:
Sec. 4. When and were petition filed. - The petition shall be filed not later than sixty (60) days from
notice of the judgment, order or resolution. In case a motion for reconsideration or new trial is timely
filed, whether such motion is required or not, the sixty (60) day period shall be counted from notice of
the denial of said motion.

The petition shall be filed in the Supreme Court or, if it relates to the acts or omissions of a lower
court or of a corporation, board, officer or person, in the Regional Trial Court exercising jurisdiction
over the territorial area as defined by the Supreme Court. It may also be filed in the Court of Appeals
whether or not the same is in aid of its appellate jurisdiction, or in the Sandiganbayan if it is in aid of
its appellate jurisdiction. If it involves the acts or omissions of a quasi-judicial agency, unless
otherwise provided by law or these rules, the petition shall be filed in and cognizable only by the
Court of Appeals.

No extension of time to file the petition shall be granted except for compelling reason and in no case
exceeding fifteen (15) days.  [Underscoring supplied.]
1âwphi1

The latest amendments took effect on September 1, 2000, following its publication in the Manila
Bulletin on august 4, 2000 and in the Philippine Daily Inquirer on August 7, 2000, two newspapers of
general circulation.

In view of its purpose, the Resolution further amending Section 4, Rule 65 can only be described as
curative in nature, and the principles governing curative statutes are applicable.

Curative statutes are enacted to cure defects in a prior law or to validate legal proceedings which
would otherwise be void for want of conformity with certain legal requirements. They are intended to
6 

supply defects, abridge superfluities and curb certain evils. They are intended to enable persons to
carry into effect that which they have designed or intended, but has failed of expected legal
consequence by reason of some statutory disability or irregularity in their own action. They make
valid that which, before the enactment of the statute was invalid. Their purpose is to give validity to
acts done that would have been invalid under existing laws, as if existing laws have been complied
with. Curative statutes, therefore, by their very essence, are retroactive.
7  8

Accordingly, while the Resolution states that the same "shall take effect on September 1, 2000,
following its publication in two (2) newspapers of general circulation," its retroactive application
cannot be denied. In short, the filing of the petition for certiorari in this Court on 17 December 1998 is
deemed to be timely, the same having been made within the 60-day period provided under the
curative Resolution. We reach this conclusion bearing in mind that the substantive aspects of this
case involves the rights and benefits, even the livelihood, of petitioner-employees.

As regards the contention of respondents that the case ought to be dismissed, considering that only
three of the fifteen petitioners verified the petition for certiorari originally filed in this Court, the same
is best resolved by the Court of Appeals, where the records of the case remain.

IN VIEW OF THE FOREGOING, the Court Resolved to GIVE DUE COURSE to, and GRANT, the
petition. The case is hereby REMANDED to the Court of Appeals for further proceedings.

SO ORDERED.

Davide, Jr., C.J., (Chairman), Puno, Pardo, and Ynares-Santiago, JJ., concur.

G.R. No. 71177 February 29, 1988

ERECTORS, INC., petitioner, 
vs.
THE HONORABLE NATIONAL LABOR RELATIONS COMMISSION AND DANILO
CRIS, respondents.

SARMIENTO, J.:

This case should not have reached this Tribunal. It should have, in fact, been terminated three years ago but for the petitioner's counsels
who had the temerity to cite a non-existent law with the obvious intention of delaying the proceedings if not outrightly evading financial
responsibility under the law. This actuation, indeed, is flagrant dishonesty. We cannot let it pass.

But before we proceed, a recital of the background of the controversy is in order.

The private respondent, Danilo Cris, a contract worker as Earthworks Engineer in Taif, Kingdom of
Saudi Arabia, filed the case with the Philippine Overseas Employment Administration (POEA) on
February 27, 1984 for the illegal termination of his contract of employment with the petitioner herein,
Erectors, Inc. The petitioner, as a defense, contended that the private respondent was estopped
from questioning the legality of his termination as he already voluntarily and freely received his
termination pay. The POEA, on September 27,1984, rendered a decision adverse to petitioner, the
dispositive portion of which reads:

WHEREFORE, judgment is rendered ordering the respondents ERECTORS, INC.

and SOCIETE AUXILLAIRE D'ENTERPRISES (S.A.E.) jointly and severally, to pay
the complainant, DANILO CRIS the sum of SEVEN THOUSAND ONE HUNDRED
SIXTY SIX DOLLARS AND SIXTY SIX CENTS ($ 7,166.6), or its equivalent in
Philippine Currency at the time of actual payment, representing the unpaid salaries
for the unexpired term of complainant's contract.  1

The decision was received by the petitioner on October 25, 1984. Fifteen days later, or on November
9 of the same year, the petitioner filed a motion for reconsideration with the respondent National
Labor Relations Commission (NLRC). The motion which was treated as an appeal was dismissed by
the NLRC "for having been filed out of time."  2

The petitioner, through counsel, alleged that the respondent NLRC committed grave abuse of
discretion in dismissing the case and affirmed that the motion for reconsideration or appeal was
seasonably filed explaining thus:

xxx xxx xxx

While it is true that between 25 October 1984 (date of receipt of the POEA decision)
and 09 November 1984 (actual date of filing of petitioner's motion for
reconsideration), there were actually fifteen (15) calendar days, however, it can not
be disputed that within said period there were only ten (10) working days, and five (5)
non-working or legal holidays, which were as follows:

October 26, 1984--Saturday

October 27,1984--Sunday

November 1, 1984--All Saint's Day

 November 3, 1984--Saturday

November 4,198--Sunday  3

xxx xxx xxx

In support of its contention, the petitioner cited two provisions allegedly of the 1984 POEA rules and
procedures, specifying Rule XXIV, sec. 1, and Rule XXV, sec. 2, thereof, which purportedly provide:

Rule XXV

xxx xxx xxx

Section 2. Finality of Decision, Order or Award — all decisions, orders or award shall
become final after the lapse of ten (10) working days from receipt of a copy thereof
by the parties and no appeal has been perfected within same period.

RULE XXIV

Section 1. Motion for Reconsideration. — The aggrieved party may within ten (10)
working days from receipt of the decision, order or resolution of the Administration,
may file for a motion for reconsideration; otherwise, the decision shall be final and
executory (Emphasis supplied)  4

These cited rules do not exist. Nowhere in any law or rules relative to the POEA may the above
provisions be found.

The POEA was created only on May 1, 1982 by virtue of Executive Order No. 797. Pursuant to the
said Executive Order, the then Minister of Labor, Blas F. Ople promulgated on September 5, 1983
the POEA Rules and Regulations on Overseas Employment which took effect on January 1, 1984.
These 1984 Rules were superseded on May 21, 1985 by the POEA Rules & Regulations.

For the reason that the petitioner's appeal with the NLRC was filed on November 9,1984, the 1984
Rules should govern. And this was precisely what the petitioner insisted upon — the POEA rules
obtaining in 1984 must be applied.   Yet therein, it is clear that the period for perfecting an appeal or
5

a Motion for Reconsideration is ten (10) calendar days. The pertinent rule on the matter is found in
Book VII, Rule 5, of the 1984 Rules and Regulations on Overseas Employment (POEA/MOLE) to
wit:

Section 1. MOTION FOR RECONSIDERATION AND/OR APPEAL. The aggrieved

party may, within ten (10) calendar days from receipt of the decision, order or
resolution file a motion for reconsideration which shall specify in detail the particular
errors and objections, otherwise the decision shall be final and executory. Such
motion for reconsideration shall be treated as an appeal as provided in this Rule
otherwise the same shall not be entertained.

The above rule is expressed in a language so simple and precise that there is no necessity to
interpret it.

Moreover, as early as 1982, this Court, in the landmark case of Vir-Jen Shipping & Marine Services,
Inc. vs. NLRC construed the ten (10) day period for filing of appeals  from decisions of Labor Arbiters
6 7
or compulsory arbitrators as ten (10) calendar days, as well as the raison d' etre for the shorter
period, thus:

xxx xxx xxx

...if only because We believe that it is precisely in the interest of labor that the law
has commanded that labor cases be promptly, if not peremptorily, disposed of. Long
periods for any acts to be done by the contending parties can be taken advantage of
more by management than by labor. Most labor claims are decided in their favor and
management is generally the appellant. Delay, in most instances, gives the
employers more opportunity not only to prepare even ingenious defense, what with
well-paid talented lawyers they can afford, but even to wear out the efforts and
meager resources of the workers, to the point that not infrequently the latter either
give up or compromise for less than what is due them.

xxx xxx xxx

The POEA rule applicable in this case is precisely in consonance with the above ruling in that it
expressed in no uncertain terms that the period for appeal is ten (10) calendar days. For "not even
the Secretary of Labor has the power to amend or alter in any material sense whatever the law itself
unequivocably specifies or fixes."  8

There is, thus, no doubt that the law mandates that the period for filing a motion for reconsideration
or appeal with the NLRC is ten (10) calendar days and not ten (10) working days.

It is, therefore, obvious that the counsels for the petitioner deliberately tried to mislead this Court if
only to suit their client's ends. On this regard, said counsels have much explaining to do.

WHEREFORE, in view of the foregoing, the Petition is hereby DISMISSED and the assailed
Resolution of the public respondent, dated December 28, 1984, AFFIRMED. The Temporary
Restraining Order issued by this Court on July 10, 1985 is hereby LIFTED. The counsels for the
petitioner are also admonished for foisting a non-existent rule with the warning that repetition of the
same or similar offense will be dealt with more severely. With triple costs against the petitioner.

This Decision is IMMEDIATELY EXECUTORY.

SO ORDERED.

G.R. No. L-10806            July 6, 1918

MONICA BONA, petitioner-appellant, 
vs.
HOSPICIO BRIONES, ET AL., objectors-appellees.

Ramon Pimentel for appellant.

Ocampo and De la Rosa for appellees.

TORRES, J.:

Counsel for Monica Bona, the widow by the second marriage of the deceased Francisco Briones
who died on August 14, 1913, applied for the probate of the will which the said deceased husband
on September 16, 1911, executed during his lifetime; for the fixing of a day for the hearing and
presentation of evidence after all the interested parties had been cited; and then for the approval of
the partition had been cited; and then for the approval of the partition property made by the testator
in the said will. By an order dated January 20, 1915, Monica Bona's petition was granted and a date
set for the trial and other necessary proceedings for the probate of said will.

Counsel for Hospicio, Gregoria, and Carmen, all surnamed Briones, the legitimate children by the
first marriage of the testator, by a pleading dated March 5, 1915, opposed the probate of the will
presented by the widow of the deceased Briones, alleging that the said will was executed before two
witnesses only and under unlawful and undue pressure or influence exercised upon the person of
the testator who thus signed through fraud and deceit; and he prayed that for that reason the said
will be declared null and of no value, with costs against the petitioners.

The trial of the case opened and in the presence of counsel for both parties, Gregorio Bustilla, one of
the witnesses of the said will, was examined and he stated under oath: That he as well as Sixto
Barrameda and Domingo de la Fuente, was actually present as attesting witness when Francisco
Briones executed his will in the month of September in his (Bustilla's) house situated in the
municipality of Bao, Ambos Camarines; that Francisco Briones knowing of the presence of notary
Domingo de la Fuente in the house, he went upstairs and announced himself; that on being asked
what he wanted, Briones stated that he wanted to execute his will; that after Briones and the notary
had talked with each other, the former left and after a while returned bringing with him some paper;
that then Domingo de la Fuente, under the direction of Francisco Briones, began to draft the will,
which when finished was signed by the latter in the presence of the notary, of the declarant, and of
another witness, Sixto Barrameda; that then the three witnesses — the declarant, de la Fuente, and
Barrameda — signed in the presence of each other. The declarant identified the signature placed on
the will by the testator Briones and those of the other witnesses Sixto Barrameda and Domingo dela
Fuente, who all signed in the presence of the testator himself. He stated further that the testator at
that moment was in his sound judgment and not forced to execute the will. He identified the
document Exhibit A as the will executed by Francisco Briones and the signature of the latter as the
one placed by the testator. By agreement of both parties it was made to appear in the record that, if
the witnesses Sixto Barrameda and Domingo de la Fuente were called, they would have testified in
the same terms as witness Gregorio Bustilla.

In view of the above, the judge rendered judgment, dated March 27, 1915, denying probate to the
will Exhibit A as executed by Francisco Briones. From the judgment, counsel for Monica Bona
appealed and prayed to be allowed to sue further as a pauper; whereupon, by order of March 31,
1915, the judge admitted the appeal, ordered the original records to be brought up, and reiterated
his order of December 28, 1913, declaring Bona as a pauper, for the purposes of the appeal
interposed.

The whole issue discussed by the parties and submitted for the decision of this court resolves itself
as to whether or not in the execution of the will in question the solemnities prescribed by section 618
of Act No. 190 have been observed.

But before proceeding further it is indispensable to note that the will in question was executed by
Francisco Briones on September 16, 1911, as already stated and the order denying probate was
rendered on March 27, 1915, both dated being prior to that of Act No. 2645 amending said section
618 and promulgated on February 24, 1916, which took effect only from July first of the last named
year: so that, in order to explain whether or not the above-mentioned will was executed in
accordance with the law then in force, the last named law cannot be applied and the will in question
should be examined in accordance with, and under the rules of, the law in force at the time of its
execution.
The oft-repeated section 618 of Act No. 190 says:

No will, except as provided in the preceding section, shall be valid to pass any estate, real or
personal, nor charge or affect the same, unless it be in writing and signed by the testator, or
by some other person in his presence, and by his express direction, and attested and
subscribed by three or more credible witnesses in the presence of the testator and of each
other. But the absence of such form of attestation shall not render the will invalid if it is
proven that the will was in fact signed and attested as in this section provided.

A mere reading of the last four paragraphs or parts of the will Exhibit A shows in a clear manner that
the said will in its form and contents expresses without shadow of doubt the will of the testator; and
that in its execution the solemnities prescribed by the above-mentioned section 618 of Act No. 190
have been observed.

Even though Domingo de la Fuente drafted the will and intervened in its preparation as a notary, by
the order and under the express direction of the testator, it is nevertheless true that he did it as a
witness to the execution of the said will with positive and concrete acts, while the two other
witnesses Gregorio Bustilla and Sixto Barrameda merely attested all that appeared in the second of
the four paragraphs mentioned; for in its they certify that the foregoing testament contains the last
will of the testator Francisco Briones; that the latter told them that before and at the time that he
dictated his will, there was no inducement nor threat by anybody; and that as he did not know how to
write the Spanish language, said testator requested Domingo de la Fuente to write the will, and he
did it as it is now drafted, certifying also, that the testator Briones signed his will voluntarily with his
own hand, in the presence of the declarants who, as witnesses, signed the instrument on the date
expressed. Domingo de la Fuente on his part declared that the two said witnesses formally swore
before him on the certification which precedes the said will and, according to this testimony as
shown in the records and the testimony of the above-mentioned witnesses, the said Domingo de la
Fuente wrote and drafted the said will Exhibit A by the order and under the direction of the testator
Francisco Briones, who signed in the presence of the witnesses, Bustilla and Barrameda and of
Notary Domingo de la Fuente, all of whom immediately signed also in the presence of the testator,
each doing it in the presence of each other. So that, although it is not shown expressly that Domingo
de la Fuente was an attesting witness to the will, yet it cannot be denied that it was he who wrote it
by the order and under the direction of the testator; that he was a witness to its execution from the
first to its last line; and that he was perfectly aware of the fact that all that he had written in the
document Exhibit A expresses the genuine and true will of the testator. He saw and was present
when the latter signed his will, as also when the two witnesses Bustilla and Barrameda affixed their
signatures; said witnesses also saw and were present when Domingo de la Fuente signed at the
end of the said document.

The name of Domingo de la Fuente appears as that of a notary who certifies as to the certainty of
the will made by Francisco Briones and of the signatures of the testator as well as of the witnesses
at its end; and as the law does not require that one of the witnesses must necessarily be a notary,
and it cannot be denied that Domingo de la Fuente attested the execution and the signing of the will
not only by the testator but also by the attesting witnesses, it cannot but be admitted that Domingo
de la Fuente intervened, attested, and signed the testament as a witness.

This is a case in which the judicial criterion should be inspired in the sense that it is not defeated,
and if the wish of the testator is so manifest and express as in the instant case, it is not proper nor
just to invalidate the will of Francisco Briones merely because of some small defect in form which is
not essential nor of great importance, such as the failure to state therein that Domingo de la Fuente
was also a witness to the said will when he signed it twice. As a matter of act, he understood the
contents of the will better than the two other attesting witnesses, for he really was a witness and he
attested the execution of the will during its making until it was terminated and signed by the testator,
by the witnesses, and by himself, even though he did it in the capacity of a notary.

The last paragraph of section 618 of Act No. 190 supplies a legal basis to support the validity of the
will in question with the conditions for its probate because, notwithstanding the existence of such
defect merely in the form and not in the substance, the certification of authenticity and the very text
of the will show in a clear and indubitable manner that the will Exhibit A contains the last will of the
testator, and that it was signed by the latter and attested as being true and legitimate not only the
two witnesses Bustilla and Barrameda but also by the one who wrote it, Domingo de la Fuente, who
was also a truthful and reliable witness, even though he be called a notary public.

The requisites established by Act No. 2645, which amended the oft-repeated section 618 cannot be
required in the probate of the will here, inasmuch as this document was executed in September,
1911, five years before said amendatory law began to take effect (July 1, 1916), while the testator
died on August 14, 1913, two years and some months before the enforcement of the said law; and
so, the only law applicable to the present case is the provision contained in section 618 of Act No.
190, and in accordance with the provisions of this section, the said will should be probated; for it has
been presented to the court many months before the amendatory act went into effect.

It is well-known that the principle that a new law shall not have retroactive effect only governs the
rights arising from acts done under the rule of the former law; but if the right be declared for the first
time by a subsequent law it shall take effect from that time even though it has arisen from acts
subject to the former laws, provided that it does not prejudice another acquired right of the same
origin.

It is well-known that hereditary rights are not born nor does the will produce any effect until the
moment of the death of the person whose inheritance is concerned. (Decision rendered in cassation
by the supreme court of Spain on June 24, 1897.)

In view of these facts, it follows that the judgment appealed from should be reversed and it should be
declared as we hereby declare that the will Exhibit A has been executed in due form by Francisco
Briones on September 16, 1911, and that the said will contains and expresses the last will and
testamentary wishes of the deceased testator. Consequently, let the records be returned to the court
wherefrom they came with a certified copy of this resolution in order that the judge, upon petition by
the proper party, may provide for the necessary proceedings with respect to the inheritance, and the
clerk of the court may issue certified copies of the said testament; without any special ruling as to
costs. so ordered.

G.R. No. L-24022             March 3, 1965

ILOILO PALAY AND CORN PLANTERS ASSOCIATION, INC., ET AL., petitioners, 

vs.
HON. JOSE, Y. FELICIANO, ET AL., respondents.

Jose C. Zulueta and Ramon A. Gonzales for petitioners.

Office of the Solicitor General for respondents.

BAUTISTA ANGELO, J.:

On December 26, 1964, Jose Y. Feliciano, Chairman and General Manager of the Rice and Corn
Administration, wrote the President of the Philippines urging the immediate importation of 595,400
metric tons of rice, thru a government agency which the President may designate, pursuant to the
recommendation of the National Economic Council as embodied in its Resolution No. 70, series of
1964.

On December 27, 1964, the President submitted said letter to his cabinet for consideration and on
December 28, 1964, the cabinet approved the needed importation. On January 4, 1965, the
President designated the Rice and Corn Administration as the government agency authorized to
undertake the importation pursuant to which Chairman Jose Y. Feliciano announced an invitation to
bid for said importation and set the bidding for February 1, 1965.

Considering that said importation is contrary to Republic Act 3452 which prohibits the government
from importing rice and that there is no law appropriating funds to finance the same, the Iloilo Palay
and Corn Planters Association, Inc., together with Ramon A. Gonzales, in his capacity as taxpayer,
filed the instant petition before this Court seeking to restrain Jose Y. Feliciano, in his capacity as
Chairman and General Manager of the Rice and Corn Administration, from conducting the bid
scheduled on the date abovementioned, and from doing any other act that may result in the
contemplated importation until further orders of this Court. For reasons that do not clearly appear,
the Secretary of Foreign Affairs and the Auditor General were made co-respondents.

Pending decision on the merits, petitioners prayed for the issuance of a writ of preliminary injunction,
which, in due course, this Court granted upon petitioners' filing a bond in the amount of P50,000.00.
This bond having been filed, the writ was issued on February 10, 1965.

Respondents, in their answer do not dispute the essential allegations of the petition though they
adduced reasons which justify the importation sought to be made. They anchor the validity of the
importation on the provisions of Republic Act 2207 which, in their opinion, still stand.

It is petitioners' contention that the importation in question being undertaken by the government even
if there is a certification by the National Economic Council that there is a shortage in the local supply
of rice of such gravity as to constitute a national emergency, is illegal because the same is prohibited
by Republic Act 3452 which, in its Section 10, provides that the importation of rice and corn is only
left to private parties upon payment of the corresponding taxes. They claim that the Rice and Corn
Administration, or any other government agency, is prohibited from doing so.

It is true that the section above adverted to leaves the importation of rice and corn exclusively to
private parties thereby prohibiting from doing so the Rice and Corn Administration or any other
government agency, but from this it does not follow that at present there is no law which permits the
government to undertake the importation of rice into the Philippines. And this we say because, in our
opinion, the provision of Republic Act 2207 on the matter still stands. We refer to Section 2 of said
Act wherein, among other things, it provides that should there be an existing or imminent shortage in
the local supply of rice of such gravity as to constitute a national emergency, and this is certified by
the National Economic Council, the President of the Philippines may authorize such importation thru
any government agency that he may designate. Here there is no dispute that the National Economic
Council has certified that there is such shortage present which, because of its gravity, constitutes a
national emergency, and acting in pursuance thereof the President lost no time in authorizing, after
consulting his cabinet, the General Manager of the Rice and Corn Administration to immediately
undertake the needed importation in order to stave off the impending emergency. We find, therefore,
no plausible reason why the disputed importation should be prevented as petitioners now desire.

The contention that Republic Act 2207 has already been repealed by Republic Act 3452 is untenable
in the light of the divergent provisions obtaining in said two laws. Admittedly, Section 16 of Republic
Act 3452 contains a repealing clause which provides: "All laws or parts thereof inconsistent with the
provisions of this Act are hereby repealed or modified accordingly." The question may now be asked:
what is the nature of this repealing clause ? It is certainly not an express repealing clause because it
fails to identify or designate the Act or Acts that are intended to be repealed [ Sutherland, Statutory
Construction, (1943) Vol. 1, p. 467]. Rather, it is a clause which predicates the intended repeal upon
the condition that a substantial conflict must be found in existing and prior Acts. Such being the
case, the presumption against implied repeals and the rule against strict construction regarding
implied repeals apply ex proprio vigore. Indeed, the legislature is presumed to know the existing
laws so that, if a repeal is intended, the proper step is to so express it [Continental Insurance Co. v.
Simpson, 8 F (2d) 439; Weber v. Bailey, 151 Ore. 2188, 51 P (2d) 832; State v. Jackson, 120 W. Va.
521, 199 S.E. 876]. The failure to add a specific repealing clause indicates that the intent was not to
repeal any existing law (Crawford, Construction of Statute, 1940 ed., p. 631), unless an
irreconcilable inconsistency and repugnancy exist in the terms of the new and old laws. Here there is
no such inconsistency.

To begin with, the two laws, although with a common objective, refer to different methods applicable
to different circumstances. Thus, the total banning of importation under normal conditions as
provided for in Republic Act 2207 is one step to achieve the rice and corn sufficiency program of the
Administration. The philosophy behind the banning is that any importation of rice during a period of
sufficiency or even of a minor shortage will unduly compete with the local producers and depress the
local price which may discourage them from raising said crop. On the other hand, a price support
program and a partial ban of rice importation as embodied in Republic Act 3452 is another step
adopted to attend the sufficiency program. While the two laws are geared towards the same ultimate
objective, their methods of approach are different; one is by a total ban of rice importation and the
other by a partial ban, the same being applicable only to the government during normal period.

There is another area where the two laws find a common point of reconciliation: the normalcy of the
time underlying both laws. Thus, with respect to the matter of importation Republic Act 2207 covers
three different situations: (1) when the local produce of rice is sufficient to supply local consumption;
(2) when the local produce falls short of the supply but the shortage is not enough to constitute a
national emergency; and (3) when the shortage, on the local supply of rice is of such gravity as to
constitute a national emergency. Under the first two situations, no importation is allowed whether by
the government or by the private sector. However, in the case of the third situation, the law
authorizes importation, by the government.

Republic Act 3452, on the other hand, deals only with situations 1 and 2, but not with. Nowhere in
said law can we discern that it covers importation where the shortage in the local supply is of such
gravity as to constitute a national emergency. In short, Republic Act 3452 only authorizes
importation during normal times, but when there is a shortage in the local supply of such gravity as
to constitute a national emergency, we have to turn to Republic Act 2207. These two laws therefore,
are not inconsistent and so implied repeal does not ensue.

Our view that Republic Act 3452 merely contemplates importation during normal times is bolstered
by a consideration of the discussion that took place in Congress of House Bill No. 11511 which was
presented in answer to the request of the Chief Executive that he be given a standby power to
import rice in the Philippines. On this matter, we quote the following views of Senators Padilla and
Almendras:

SENATOR PADILLA: But under Republic Act No. 3452 them is a proviso in Sec. 10 thereof
"that the Rice and Corn Administration or any government agency is hereby prohibited from
importing rice and corn."

SENATOR ALMENDRAS: That is under normal conditions.

 SENATOR PADILLA: "Provided further", it says, "that the importation of rice, and corn is left
to private parties upon payment of the corresponding tax." So therefore, the position of the
Committee as expressed by the distinguished sponsor, is that Sec. 10 of Republic Act No.
3452 is applicable under normal conditions.

SENATOR ALMENDRAS: "Yes". (Senate Debate, June 16, 1964).

Much stress is laid on the content of Section 12 of Republic Act 3452 which gives to the President
authority to declare a rice and corn emergency any time he deems necessary in the public interest
and, during the emergency, to conduct raids, seizure and confiscation of rice and corn hoarded in
any private warehouse or bodega subject to constitutional limitations, to support the claim that said
Act also bans importation on the part of the government even in case of an emergency. The
contention is predicated on a misinterpretation of the import and meaning of said provision. Note that
the section refers to an emergency where there is an artificial shortage because of the apparent
hoarding undertaken by certain unscrupulous dealers or businessmen, and not to an actual serious
shortage of the commodity because, if the latter exists, there is really nothing to raid, seize or
confiscate, because the situation creates a real national emergency. Congress by no means could
have intended under such a situation to deprive the government of its right to import to stave off
hunger and starvation. Congress knows that such remedy is worthless as there is no rice to be found
in the Philippines. Seizure of rice is only of value in fighting hoarding and profiteering, but such
remedy cannot produce the rice needed to solve the emergency. If there is really insufficient rice
stocked in the private warehouses and bodegas such confiscatory step cannot remedy an actual
emergency, in which case we have to turn to Republic Act 2207.

The two laws can therefore be construed as harmonious parts of the legislative expression of its
policy to promote a rice and corn program. And if this can be done, as we have shown, it is the duty
of this Court to adopt such interpretation that would give effect to both laws. Conversely, in order to
effect a repeal by implication, the litter statute must be irreconcilably inconsistent and repugnant to
the prior existing law [United States v. Greathouse,. 166 U.S. 601, 41 L. Ed., 1130; In re Phoenix
Hotel Co., 13 F. Supp. 229; Hammond v. McDonald, 32 Cal. App. 187, 89 P (2d) 407; Sutherland,
Statutory Construction, supra, p. 462]. The old and the new laws must be absolutely incompatible
(Compañia General de Tabacos v. Collector of Customs, 46 Phil. 8). A mere difference in the terms
and provisions of the statutes is not sufficient to create a repugnancy between them. There must be
such a positive repugnancy between the provisions of the old and the new statutes that they cannot
be made to reconcile and stand together (Crawford, Construction of Statute, supra, p. 631). The
clearest case possible must first be made before the inference of implied repeal may be drawn
[Nagano v. McGrath, 187 F (2d) 759]. Inconsistency is never presumed.

Republic Act 3848 entitled "An Act Providing for the Importation of Rice During the Calendar Year
Nineteen Hundred Sixty-Four in the Event of Shortage in Local Supply" cannot be given any
nullifying value, as it is pretended, simply because Section 6 thereof provides that "except as
provided in this Act, no other agency or instrumentality of the Government shall be allowed to
purchase rice from abroad." The reason is that it is a mere temporary law effective only for a specific
year. As its title reads, it is merely an authority to import rice during the year 1964. The same,
therefore, is now functus officio at least on the matter of importation.

Neither can petitioners successfully pretend that as Section 4 thereof provides that pending
prosecutions for any violation of Republic Acts 2207 and 3452 shall in no way be affected by said
Act 3848 the implication is that the aforesaid Acts have already been repealed. That provision is
merely a safeguard placed therein in order that the prosecutions already undertaken may not be
defeated with the enactment of Republic Act 3848 because the latter provides for penal provisions
which call for lesser penalty. The intention is to except them from the rule that penal statutes can be
given retroactive effect if favorable to the accused.

To further bolster our view that Republic Act 2207 has not been impliedly repealed by Republic Act
3452, we wish to briefly quote hereunder the views expressed by some senators during the
discussion of House Bill 11511 already mentioned above. It should be here repeated that said bill
was presented to accede to the request of the President for a stand-by power to import in case of
emergency in view of the uncertainty of the law, but that during the discussion thereof it was strongly
asserted and apparently upheld that such request for authority was not necessary because Republic
Act 2207 was still in force. It is probably for this reason that said bill, after having been approved by
the Senate, was killed in the conference committee that considered it. These views, while not
binding, are of persuasive authority and throw light on the issue relative to the effectivity of Republic
Act 2207.

SENATOR LIWAG: ... Now Mr. Chairman, is it the sense of the Committee that in the case of
emergency, in case of an impending shortage, we can import rice under the provisions of
R.A. No. 2207?

SENATOR ALMENDRAS: Yes, that is what we mean, your Honor, in this paragraph (c),
Section 2, page 2, that when we say "under the provisions of existing law," we are referring
to R.A. No. 2207.

xxx     xxx     xxx

SENATOR PADILLA: I notice, Mr. Senator, that Section 2 paragraph (c) of the amendment
by substitution reads:

Importation of rice and/or corn should be resorted to only in cases of extreme and under the
provisions of existing law.

I suppose that the existing laws referred to are Republic Act No. 2207 and Republic Act No.
3452. Does this section in the proposed bill by substitution recognize the continued
existence of the pertinent provisions of Republic Act No. 2207 and Republic Act No. 3452 on
rice importation ?

SENATOR ALMENDRAS: Yes, that is the reason, Your Honor, why we struck out the stand-
by power on the part of the President to import rice.

xxx     xxx     xxx

SENATOR ALMENDRAS: The position of your Committee, Your Honor, because of the
existing law — that is, Republic Act No. 3452 and Republic Act No. 2207 — that is the
reason your Committee eliminated that stand-by power of the President to import rice.
Because you know, Your Honor, what is the use of that stand-by power, inasmuch as under
Republic Act No. 3452 and Republic Act No. 2207 the President can designate any
government agency to import rice?

SENATOR PADILLA: Well, it is good to make that clear because in the decision of the
Supreme Court, as I said, there was no clear-cut holding as to the possible co-existence or
implied repeal between these two Acts.
 SENATOR ALMENDRAS: Yes, Your Honor, but the gentleman from Nueva Ecija, Senator
Liwag, informed me that Republic Act No. 2207 has never been repealed.

SENATOR PADILLA: Well, I also concur with that view, but we want to make that clear ... .

SENATOR PADILLA: "Provided, further," it says, "That the importation of rice and corn is left
to private parties upon payment of the corresponding taxes." So, therefore, the position of
the Committee, as expressed by the distinguished sponsor is that Sec. 10 of Republic Act
No. 3452 is applicable under normal conditions.

SENATOR ALMENDRAS: Yes.

SENATOR PADILLA: So, both provisions of law are in existence.

SENATOR ALMENDRAS: Yes.

SENATOR PADILLA: One is not repealed by the other.

xxx     xxx     xxx

SENATOR TOLENTINO: Mr. President, there are two views already expressed on whether
Republic Act No. 2207 has been repealed by Republic Act No. 3452. One view sustains the
theory that there has been a repeal of Republic Act No. 2207 by Republic Act No. 3452
insofar as rice importation is concerned. The other view is that there is no repeal. The
Supreme Court does not state clearly which side prevails. I take the view that the two laws
can be reconciled ... .

Now, Mr. President, reading those two provisions together, I maintain that they are not totally
repugnant to each other, that it is possible for them to stand together except on certain
points: First, is importation in case of a national emergency certified by the National
Economic Council permissible? By reading the two provisos together I would say yes
because there is nothing in the proviso contained in Republic Act No. 3452 which would be
inconsistent with importation during a shortage amounting to a national emergency.

Another circumstance that strengthens our view is that when said House Bill No. 11511 was finally
approved by the Senate, it carried a clause which expressly repeals, among others, Republic Act
No. 2207 (Section 14), but which bill, as already said, was later killed in the conference committee.
This attitude clearly reveals that Congress preferred to fall back on Republic Act 2207 with regard to
future importations.

Anent the point raised relative to the lack of necessary appropriation to finance the importation in
question, suffice it to state that under Republic Act 663 the National Rice and Corn Corporation is
authorized to borrow, raise and secure the money that may be necessary to carry out its objectives.
We refer to Section 3 (e) of said Act which empowers said corporation to secure money and to
encumber any property it has as a guaranty, and Republic Act No. 3452, which creates the Rice and
Corn Administration, transferred its functions and powers to the latter, including the power to borrow
money under Section 3(e). This provision gives the RCA enough power with which to finance the
importation in question.

WHEREFORE, petition is dismissed. The writ of preliminary injunction issued by this Court is hereby
dissolved. Costs against petitioners.
Paredes, Regala, Makalintal, Bengzon, J.P., and Zaldivar, JJ., concur.

Separate Opinions

REYES, J.B.L., J., dissenting:

It is regrettable that in their effort to uphold the Government's power to import rice, under Section 2
of Republic Act 2207, the majority opinion seems to have overlooked that the repeal of statutes is
primarily a matter of legislative intention; and that on its face, Republic Act No. 3452 was plainly
intended to supersede the prior law, Republic Act No. 2207.

The specific issue, in brief, is whether the extraordinary emergency power to import rice and corn,
granted to the President by Section 2 of Republic Act 2207, may still be considered as subsisting at
present, notwithstanding the terms of Section 10 of the subsequent Republic Act No. 3452.

For convenience, we present in parallel columns the specific provisions of the respective acts:

REP. ACT NO. 2207  REP. ACT NO. 3452

(1959) (1962)

SEC. 2. Prohibition. It shall be SEC. 10. ... Provided, that the Rice

unlawful for any person, association, and Corn Administration or any
corporation or government agency to other government agency is hereby
import rice and corn into any point in prohibited from importing rice and
the Philippines: Provided, however, corn: Provided, further, That the
That should there be an existing or importation of rice and corn is left to
imminent shortage in the local private parties upon payment of the
supply of the abovementioned corresponding taxes. (Emphasis
commodities of such gravity as to Supplied)
constitute a national emergency,
upon certification to this effect by the
National Economic Council, based
on the studies of the Office of
Statistical Coordination of said body,
the President of the Philippines may
authorize the importation of the
commodities, through
anygovernment agency that he may
designate in such quantities as the
National Economic Council may
determine necessary to cover the
shortage, subject to the taxes, duties
and/or special charges as now
provided by law: Provided,further,
That contracts for such importation
shall be only on straightsales basis,
and awarded only after a public
 bidding, with sealed bids. (Emphasis
supplied)

It is apparent at first sight that the two provisions contradict each other. First, in policy; because
under Republic Act No. 2207, the general rule is that no person or entity, public or private, shall
import rice and corn; while under the later Act, Republic Act No. 3452, the importation of rice and
corn is left to private parties, with no restriction other than the payment of tax. Second, in procedure;
under Republic Act 2207, the President, in case of emergency, may import rice and corn in
quantities certified by the National Economic Council as necessary, through any government
agency that he may designate; while by Act 3452 any government agency is prohibited from
importing rice and corn, said prohibition being express, absolute, total, and unconditional. Not only
this, but violation of the prohibition is sanctioned by a P10,000 fine and imprisonment for not more
than 5 years (sec. 15, Act 3452).

We cannot see how the majority opinion can contend that the presidential power to make
importations of rice and corn still subsists, in view of the unqualified terms of Republic Act 3452.
If any government agency is prohibited from importing rice and corn by the later law, and the
violation of the prohibition is penalized by fine and imprisonment, in what manner can the President
make the importation? He cannot do so directly, since Act 2207 specifically requires that it be done
"through any government agency". How, then, may he import?

It is unnecessary to resort to legal gymnastics in order to realize why this must be so. Suffice it to
note that the Administration's power to import rice in certified emergencies under Act 2207 was but a
mere corollary to the total ban on rice and corn imports under that Act, and the existence of such
exceptional import power necessarily depended on the continuation of that total prohibition. 1äwphï1.ñët

Section 2 of Republic Act No. 2207 clearly shows how intimate was this dependence between the
emergency importing authority granted to the government and the maintenance of the normal non-
import policy.

SEC. 2. Prohibition: It shall be unlawful for any person, association, corporation

or government agency to import rice and corn into any point in the Philippines, provided,
however, that should there be an existing or imminent shortage in the local supply of the
above-mentioned commodities, of such gravity as to constitute a national emergency,
upon certification to this effect by the National Economic Council, based on the studies of the
Office of Statistical Coordination of said body, the President of the Philippines may authorize
the importation of these commodities, through any government agency that he may
designate, in such quantities as the National Economic Council may determine necessary to
cover the shortage, subject to taxes, duties and/or special charges as now provided by law;
provided, further, that contracts for such importation shall be only on straight sales basis, and
awarded only after a public bidding, with sealed bids. (Emphasis supplied)

So closely linked were the policy and the emergency import power that the latter was not even set
apart in a section. Therefore, repeal of the absolute ban on imports, prescribed in the opening
portion of the section quoted, necessarily entails the disappearance of the emergency power to
import rice and corn established by the later part of the same legal provision. Where the basic rule
disappears, the exception thereto must necessarily cease to operate, since the exception becomes
automatically functus officio for lack of basis.

The total banning of cereal imports logically, under Act 2207, meant that whenever the domestic
crop became insufficient to satisfy the demand for rice and corn, the latter had to be brought from
outside to fill the gap; and the legislature decided (in Act 2207) that it should be done through
governmental agencies. But under Republic Act 3452, the total prohibition to import disappeared,
and private parties were authorized to bring in the cereals at any time; hence, the exceptional
importing power of the Government lost all reason for its existence, because the private imports
allowed by Act 3452 were contemplated and intended to make up for the difference between
demand and supply, without necessity of government intervention. In truth, the expression in Section
10 of Act 3452 —

SEC. 10. ... Provided, That the Rice and Corn Administration or any other government
agency is hereby prohibited from importing rice and corn; Provided, further, That the
importation of rice and corn is left to private parties upon payment of the corresponding
taxes. (Emphasis supplied)

can only mean that the Administration must desist from importing, and leave to private parties the
task of bringing such cereals from without in order to make up for whatever shortages in production
should occur.

That only private parties, and not the government, can import the cereals finds confirmation in the
legislative journals. In the Congressional Record, No. 48, March 30, 1962, page 1360, containing the
transcript of the Senate debates on the bill that later became Republic Act No. 3452, the following
appears:

CUENCO AMENDMENT

Mr. CUENCO. Mr. Speaker, on page 3, line 16, change the period (.) to colon and add the
following: PROVIDED, THAT THE RICE AND CORN ADMINISTRATION OR ANY OTHER
GOVERNMENT AGENCY IS HEREBY PROHIBITED FROM IMPORTING RICE AND
CORN: PROVIDED, FURTHER, THAT THE IMPORTATION OF RICE AND CORN IS LEFT
TO PRIVATE PARTIES UPON PAYMENT OF THE CORRESPONDING TAXES.

Mr. OCAMPO. Suppose there is a calamity, Mr. Speaker.

Mr. CUENCO. Leave that to private parties.

Mr. OCAMPO. Accepted, Mr. Speaker.

The SPEAKER. Is there any objection? (After a pause). The chair does not hear any. The
amendment is approved. (Congressional Record, No. 48, March 30, 1962, p. 1360)

The Senate Journal, No. 59, May 8, 1962, also contains the following illuminating remarks:

SENATOR LEDESMA: So it is on the understanding then, Your Honor, that we could

proceed with the discussion.

Your Honor, House Bill No. 339, as I have already stated, specifically provides that
appointment of personnel should be in accordance with the Civil Service Law as well as with
the WAPCO. It seems to me that this provision is very laudable and very, very reasonable.
The second important feature in this proposed measure is that it prohibits importation by the
government. I think this should be clarified in the sense that, at the same time, it allows
importation by private parties but with the payment of the corresponding duties. Or rather,
under House Bill No. 339, the general policy which is being set in the proposed measure is
 that the government should not resort to importation but that importation of the cereal is
open at all times to any citizen of this country so long as he pays the corresponding duties
and other taxes which are imposed by our government. (Senate Journal, No. 59, May 8,
1962)

It is thus clear that if section 16 of Republic Act 3452 providing that —

All laws or parts thereof inconsistent with the provisions of this Act are hereby repealed or
modified accordingly",.

intended to refer to any preceding statute at all, it must have referred to Republic Act No. 2207.
Hence, the Presidential power to import no longer exists.

In arguing in favor of the Government's power to import even now, the majority opinion avers that
Republic Act No. 3452 is designed to apply only to normal times and conditions. This is plainly
absurd, for in normal times, when production equals consumption, no importation need be
authorized, for none will be required.

The majority opinion stresses that Republic Act 3452 does not repeal Act 2207 in express terms.
Granting arguendothat this were true, despite the express prohibition of government imports in
section 10 of the later Act, yet it does not elucidate why the legislature found it necessary, or
expedient, to enact an entirely different law, instead of merely providing for the amendment of the
prior statute (R.A. 2207). If both laws were designed to attain the same end, rice and corn sufficiency
for our country, and only a change of method was intended, why enact two statutes not only
unconnected with each other, but actually contradictory?

That the two laws are inconsistent with each other cannot be gainsaid. Under Act 2207, no person or
entity, public or private, could import rice or corn, since under Section 2 thereof "it shall be unlawful
for any person, association, corporation or government entity to import rice and corn"; while under
Act 3452, on the contrary, "importation of rice and corn is left to private parties" (sec. 10) at any time,
with no other restriction than the payment of taxes. How can it be said that the two laws, with so
diametrically opposite philosophies, were intended to co-exist?

Because the two laws covering the same field are plainly incompatible with each other (since private
importation of rice and corn cannot, at the same time, be unlawful under Act 2207 and lawful under
Act 3452), it is inescapable to conclude that the later statute (3452) is, and must have been,
intended to revise, supersede, and replace the former law (Act 2207).The established rule in this
jurisdiction in such a case is that —

While as a general rule, implied repeal of a former statute by a later one is not favored, yet if
the later act covers the whole subject of the earlier one and is clearly intended as a
substitute it will operate similarly as a repeal of the earlier act (Posadas vs. National City
Bank of New York, 296 U.S. 497, 80 Law Ed. 351) (quoted and applied in In re Guzman, 73
Phil. 52).

pines adopted the American doctrine that in such a revision of the law, whatever is excluded is
discarded and repealed (In re Guzman supra, at pp. 52-53).1

It has been held that "where the legislature frames a new statute upon a certain subject-
matter, and the legislative intention appears from the latter statute to be to frame a new
scheme in relation to such subject-matter and make a revision of the whole subject, that
 whatever is embraced in the new statute shall prevail, and that whatever is excluded is
discarded". (People v. Thornton, 186 Ill. 162, 173, 75 N.E. 841.)

And an author says: "So where there are two statutes on the same subject, passed at
different dates, and it is plain from the frame-work and substance of the last that it was
intended to cover the whole subject, and to be a complete and perfect system or provision in
itself, the last must be held to be a legislative declaration that whatever is embraced in it
shall prevail and whatever is excluded is discarded and repealed."

Or, as more tersely put in Madison vs. Southern Wisconsin R. Co., 10 A. L. R. 910, at page 915:

6. A subsequent statute, evidently intended as a substitute for one revised, operates as a

repeal of the latter without any express words to that effect; and so any distinct provision of
the old law, not incorporated into the later one, is to be, deemed to have been intentionally
annulled. Smith, Stat. Constr. sec. 784; Bartlett v. King, 12 Mass. 537, 7 Am. Dec. 99:

This rule, expressly adopted by this very Supreme Court, utterly destroys the contention of the
majority opinion that because the Government's power under Republic Act 2207, to make imports of
rice and corn in case of certified emergency, is nowhere expressly repealed by Republic Act 3452,
such power must be still deemed to exist. No such power can now exist for the reason that the Act
conferring it was totally and unconditionally superseded and repealed by Act 3452. The contradictory
philosophies of both Acts testify to that effect.

The majority also avers that Republic Act No. 3452 does not contemplate situations where the
shortage in local supply is of such gravity as to constitute a national emergency. It also asserts that
Act 3452 refers only to artificialshortages through hoarding, and does not cover natural shortages
where the rice and corn crops do not suffice to meet the demands of consumption. Unfortunately,
the opposite of these assertions is precisely true. Thus,

Section 1 of Act 3452 provides: The Government shall engage in the purchase of these
basic foods from tenants, farmers, growers, producers and landowners in the Philippines ...
and whenever circumstances brought about by any cause, natural or artificial, should so
require, (the Government) shall sell and dispose of these commodities to the consumers ... .

Section 3 of Act 3452 — With a view to regulating the level of supply of rice and corn
throughout the country, the Administration is authorized to accumulate stocks as a national
reserve in such quantities as it may deem proper and necessary to meet any
contingencies. ...

Section 12, Act 3452 — "The President of the Philippines is hereby authorized to declare a
rice and corn emergency any time he deems necessary in the public interest. During the
emergency period, the Rice and Corn Administration, upon the direction of the President,
shall, subject to constitutional limitation, conduct raids, seizures, and confiscation of rice and
con hoarded in any private warehouse or bodega: Provided, That the Rice and Corn
Administration shall pay such confiscated rice and corn at the prevailing consumer's price of
the Rice and Corn Administration. (Emphasis supplied)

Certainly the words used by the statute, "any cause, natural or artificial", "any contingencies", "rice
and corn emergency" are broad enough to cover all contingencies, natural deficiency due to
insufficient production, as well as artificial shortages due to hoarding. The terms employed exempt
the legislature from the accusation that it still has left some emergency unprovided for. What it did
deny the Government was the power to import rice and corn whenever it so chooses; instead, the
law expressly prescribed "that the Rice and Corp. Administration or any government agency is
hereby prohibited from importing rice and corn" (sec. 10, R.A. 3452), a command that, as previously
observed, squarely contradicts and vacates that permission to import previously granted under
Republic Act 2207. The Government, therefore, may not now bring in rice and corn from
abroad, unless special legislative authorization is first obtained, as was done for 1964 by Republic
Act No. 3848.

The very fact that the Administration went to and obtained from the Legislature permission to import
300,000 metric tons of rice during the calendar year 1964 (Rep. Act No. 3848), and made use of that
permission, is the best proof that the Executive felt that its former power under Republic Act No.
2207 no longer existed after the passage of Republic Act No. 3452. Such action places the
Administration in estoppel to assert the contrary. Why should it seek authority to make importation
during 1964 if it still possessed that granted by Republic Act 2207?

Note that, in consenting the Government's importing 300,000 tons of rice in 1964, the Legislature
once more re-affirmed the prohibition of further government imports in section 6 of the enabling law,
Republic Act No. 3848:

SEC. 6 — Except as provided in this Act, no other agency or instrumentality of the

Government shall be allowed to purchase rice from abroad." (Emphasis supplied)

which is a virtual repetition of the restraint imposed by Republic Act 3452. In addition, the law
imposed the further condition that the importation be made only upon two-thirds vote of the National
Economic Council, where Republic Act 2207 specified no particular majority.

The main opinion seeks to minimize the effect of these reiterated prohibitions by claiming that said
section 6 was intended to operate only for 1964. If that had been the intention, then section 6 was
absolutely unnecessary because the authority given by Act 3848 was a limitation in itself, as it only
permitted the importation of 300,000 metric tons for the calendar year 1964. Under such a grant, any
excess beyond the quantity fixed, and any import after 1964, were automatically forbidden. The
enactment of section 6 of Act 3848, therefore, was an actual reassertion of the policy of outlawing
Government imports, as declared in Republic Act 3452. If anything, it meant that to import rice now,
the Executive must first obtain an enabling law.

Moreover, the financing by the Government of its foreign purchase of rice would violate the
Constitutional restraint against paying money out of the Treasury, "except in pursuance of an
appropriation made by law" (Art. VI, sec. 23, par. 3), and no law making such appropriation has been
enacted. Under the Revised Administrative Code, sections 606 and 607, no contract involving the
expenditure of public funds can be made without previous appropriation therefor, duly certified by the
Auditor General. Nor can these inhibitions be evaded by the ruse of causing a Government agency
to borrow the funds required for the purpose, considering that any and all government agencies are
flatly forbidden to import rice (Republic Act 3452, sec. 10), and the borrowing of funds to finance
importation is essential for the execution thereof.

Finally, we see no point in the quotations from statements made in the Senate during the
deliberations on House Bill No. 11511. That bill never became law, and is not before the Court. The
statements quoted are not binding, this Court having the exclusive prerogative of construing the
legislative enactments.

The effect in the majority decision is, after the Legislature had expressly prohibited government
agencies to import rice and corn, and after the lawmaking body refused to pass the bill (House Bill
No. 11511) granting the Executive a stand-by authority to import, a decision of this Court now
reverses this clear policy of the Legislature, and hands the Executive a blanket power to do what the
laws have expressly forbidden.

Bengzon, C.J., Concepcion, Barrera and Dizon, JJ., concur.

G.R. No. L-44896             July 31, 1936

RODOLFO A. SCHNECKENBURGER, petitioner, 
vs.
MANUEL V. MORAN, Judge of First Instance of Manila, respondent.

Cardenas and Casal for petitioner.

Office of the Solicitor-General Hilado for respondent.

ABAD SANTOS, J.:

The petitioner was duly accredited honorary consul of Uruguay at Manila, Philippine Islands on June
11, 1934. He was subsequently charged in the Court of First Instance of Manila with the crime of
falsification of a private document. He objected to the jurisdiction of the court on the ground that both
under the Constitution of the United States and the Constitution of the Philippines the court below
had no jurisdiction to try him. His objection having been overruled, he filed this petition for a writ of
prohibition with a view to preventing the Court of First Instance of Manila from taking cognizance of
the criminal action filed against him.

In support of this petition counsel for the petitioner contend (1) That the Court of First Instance of
Manila is without jurisdiction to try the case filed against the petitioner for the reason that under
Article III, section 2, of the Constitution of the United States, the Supreme Court of the United States
has original jurisdiction in all cases affecting ambassadors, other public ministers, and consuls, and
such jurisdiction excludes the courts of the Philippines; and (2) that even under the Constitution of
the Philippines original jurisdiction over cases affecting ambassadors, other public ministers, and
consuls, is conferred exclusively upon the Supreme Court of the Philippines.

This case involves no question of diplomatic immunity. It is well settled that a consul is not entitled to
the privileges and immunities of an ambassador or minister, but is subject to the laws and
regulations of the country to which he is accredited. (Ex parte Baiz, 135 U. S., 403; 34 Law. ed.,
222.) A consul is not exempt from criminal prosecution for violations of the laws of the country where
he resides. (U. S. vs. Ravara, 2 Dall., 297; 1 Law. ed., 388; Wheaton's International Law [2d ed.],
423.) The substantial question raised in this case is one of jurisdiction.

1. We find no merit in the contention that Article III, section 2, of the Constitution of the
United States governs this case. We do not deem it necessary to discuss the question
whether the constitutional provision relied upon by the petitioner extended ex propio
vigore over the Philippines. Suffice it to say that the inauguration of the Philippine
Commonwealth on November 15, 1935, has brought about a fundamental change in the
political and legal status of the Philippines. On the date mentioned the Constitution of the
Philippines went into full force and effect. This Constitution is the supreme law of the land.
Not only the members of this court but all other officers, legislative, executive and judicial, of
the Government of the Commonwealth, are bound by oath to support the Constitution.
(Article XIII, section 2.) This court owes its own existence to the great instrument, and
 derives all its powers therefrom. In the exercise of its powers and jurisdiction, this court is
bound by the provisions of the Constitution. The Constitution provides that the original
jurisdiction of this court "shall include all cases affecting ambassadors, other public ministers,
and consuls." In deciding the instant case this court cannot go beyond this constitutional
provision.

2. It remains to consider whether the original jurisdiction thus conferred upon this court by
the Constitution over cases affecting ambassadors, other public ministers, and consuls, is
exclusive. The Constitution does not define the jurisdiction of this court in specific terms, but
merely provides that "the Supreme Court shall have such original and appellate jurisdiction
as may be possessed and exercised by the Supreme Court of the Philippine Islands at the
time of the adoption of this Constitution." It then goes on to provide that the original
jurisdiction of this court "shall include all cases affecting ambassadors, other public ministers,
and consuls."

In the light of the constitutional provisions above adverted to, the question arises whether the original
jurisdiction possessed and exercised by the Supreme Court of the Philippine Islands at the time of
the adoption of the Constitution was exclusive.

The original jurisdiction possessed and exercised by the Supreme Court of the Philippine Islands at
the time of the adoption of the Constitution was derived from section 17 of Act No. 136, which reads
as follows: The Supreme Court shall have original jurisdiction to issue writs of mandamus, certiorari,
prohibition, habeas corpus, and quo warrantoin the cases and in the manner prescribed in the Code
of Civil Procedure, and to hear and determine the controversies thus brought before it, and in other
cases provided by law." Jurisdiction to issue writs of quo warranto, certiorari, mandamus, prohibition,
and habeas corpus was also conferred on the Courts of First Instance by the Code of Civil
Procedure. (Act No. 190, secs. 197, 217, 222, 226, and 525.) It results that the original jurisdiction
possessed and exercised by the Supreme Court of the Philippine Islands at the time of the adoption
of the Constitution was not exclusive of, but concurrent with, that of the Courts of First Instance.
Inasmuch as this is the same original jurisdiction vested in this court by the Constitution and made to
include all cases affecting ambassadors, other public ministers, and consuls, it follows that the
jurisdiction of this court over such cases is not exclusive.

The conclusion we have reached upon this branch of the case finds support in the pertinent
decisions of the Supreme Court of the United States. The Constitution of the United States provides
that the Supreme Court shall have "original jurisdiction" in all cases affecting ambassadors, other
public ministers, and consuls. In construing this constitutional provision, the Supreme Court of the
United States held that the "original jurisdiction thus conferred upon the Supreme Court by the
Constitution was not exclusive jurisdiction, and that such grant of original jurisdiction did not prevent
Congress from conferring original jurisdiction in cases affecting consuls on the subordinate courts of
the Union. (U. S. vs. Ravara, supra; Bors vs. Preston, 111 U. S., 252; 28 Law. ed., 419.)

3. The laws in force in the Philippines prior to the inauguration of the Commonwealth conferred upon
the Courts of the First Instance original jurisdiction in all criminal cases to which a penalty of more
than six months' imprisonment or a fine exceeding one hundred dollars might be imposed. (Act No.
136, sec. 56.) Such jurisdiction included the trial of criminal actions brought against consuls for, as
we have already indicated, consuls, not being entitled to the privileges and immunities of
ambassadors or ministers, are subject to the laws and regulations of the country where they reside.
By Article XV, section 2, of the Constitution, all laws of the Philippine Islands in force at the time of
the adoption of the Constitution were to continue in force until the inauguration of the
Commonwealth; thereafter, they were to remain operative, unless inconsistent with the Constitution
until amended, altered, modified, or repealed by the National Assembly. The original jurisdiction
granted to the Courts of First Instance to try criminal cases was not made exclusively by any, law in
force prior to the inauguration of the Commonwealth, and having reached the conclusion that the
jurisdiction conferred upon this court by the Constitution over cases affecting ambassadors, other
public ministers, and consuls, is not an exclusive jurisdiction, the laws in force at the time of the
adoption of the Constitution, granting the Courts of First Instance jurisdiction in such cases, are not
inconsistent with the Constitution, and must be deemed to remain operative and in force, subject to
the power of the National Assembly to amend alter, modify, or repeal the same. (Asiatic P.
Co. vs. Insular Collector of Customs, U. S. Supreme Court [Law. ed.], Adv. Ops., vol. 80, No. 12, pp.
620, 623.)

We conclude, therefore, that the Court of First Instance of Manila has jurisdiction to try the petitioner,
an that the petition for a writ of prohibition must be denied. So ordered.

Avanceña, C. J., Villa-Real, Imperial, Diaz, and Recto, JJ., concur.

Separate Opinions

LAUREL, J., concurring:

In my humble opinion, there are three reasons why the jurisdiction of this court over the petitioner in
the instant case is concurrent and not exclusive. The strictly legal reason is set forth in the preceding
illuminating opinion. The other reasons are (a) historical and based on what I consider is the (b)
theory upon which the grant of legislative authority under our Constitution is predicated.

(a) As the provision in our Constitution regarding jurisdiction in cases affecting ambassadors, other
public ministers, and consuls, has been taken from the Constitution of the United States,
considerable light would be gained by an examination of the history and interpretation thereof in the
United States.

The fifth resolution of the New Jersey plan (Paterson resolutions of June 15, 1787) gave the
Supreme Court of the United States, the only national court under the plan, authority to hear and
determine "by way of appeal, in the dernier resort . . . all cases touching the rights of
ambassadors . . . ." This clause, however, was not approved. On July 18, the Convention of 1787
voted an extraordinarily broad jurisdiction to the Supreme Court extending "to cases arising under
laws passed by the general legislature, and to such other questions as involve the national peace
and harmony." This general proposition was considerably narrowed by Randolph in his draft of May
29 which, however, did not mention anything about ambassadors, other public ministers and
consuls. But the Committee of Detail, through Rutledge, reported on August 6 as follows: "Article XI,
Section 3. The jurisdiction of the Supreme Court shall extend . . . to all cases affecting ambassadors,
other public ministers and consuls; . . . In . . . cases affecting ambassadors, other public ministers
and consuls, . . . this jurisdiction shall be original . . . ."On September 12, the Committee on Style
reported the provision as follows: "Article III, Section 2. The judicial power shall extend . . . to all
cases affecting ambassadors, other public ministers and consuls . . . In (all) cases affecting
ambassadors, other public ministers and consuls . . . the Supreme Court shall have original
jurisdiction." This provision was approved in the convention with hardly any amendment or debate
and is now found in clause 2, section 2 of Article III of the Constitution of the United States. (The
Constitution and the Courts, Article on "Growth of the Constitution", by William M. Meigs, New York,
1924, vol. 1, pp. 228, 229. See also Farrand, Records of the Federal Convention of 1787, Yale
University Press, 1934, 3 vols.; Warren, The Making of the Constitution, Boston, 1928, pp. 534-537.)
The word "original", however, was early interpreted as not exclusive. Two years after the adoption of
the Federal Constitution, or in 1789, the First Judiciary Act (Act of September 24, 1789, 1 Stat., c.
20, 687) was approved by the first Congress creating the United States District and Circuit Courts
which were nisi prius courts, or courts of first instance which dealt with different items of litigation.
The district courts are now the only federal courts of first instance, the circuit courts having been
abolished by the Act of March 3, 1911, otherwise known as the Judicial Code. The Judiciary Act of
1787 invested the district courts with jurisdiction, exclusively of the courts of the several states, of all
suits against consuls or vice-consuls and the Supreme Court of the United States with original but
not exclusive jurisdiction of all suits in which a consul or vice-consul shall be a party. By the passage
of the Act of February 18, 1875 (18 Stat., 470, c. 137), the clause giving the federal courts exclusive
jurisdiction was repealed and, since then state courts have had concurrent jurisdiction with the
federal courts over civil or criminal proceedings against a consul or vice-consul. At the present time,
the federal courts exercise exclusive jurisdiction "of suits or proceedings against ambassadors or
other or other public ministers, or their domestics or domestic servants, as a court of law can have
consistently with the law of nations; and original, but not exclusive, jurisdiction, of all suits brought by
ambassadors or other public ministers, or in which a consul or vice-consul is a party." (Act of March
8, 1911, 36 Stat., 1156, reenacting sec. 687 of the Act of September 24, 1789; 28 U. S. C. A., sec.
341; Hopkins' Federal Judicial Code, 4th ed., by Babbit, 1934, sec. 233.) The district courts now
have original jurisdiction of all suits against consuls and vice-consuls." (Act of March 3, 1911, 36
Stat., 1093; 28 U. S. C. A., sec. 41, subsec. 18; Hopkins' Federal Judicial Code, 4th ed., by Babbit,
1934, sec. 24, par. 18.)

The Judiciary Act of 1789 was one of the early and most satisfactory acts passed by the Congress of
the United States. It has remained essentially unchanged for more than 145 years. It was prepared
chiefly by Oliver Ellsworth of Connecticut (1 Ann. Cong., 18, April 7, 1789) one of the ablest jurists in
the Constitutional Convention, who was later Chief Justice of the Supreme Court of the United
States (1796-1800). It is interesting to note that 10 of the 18 senators and 8 of the members of the
House of the first Congress had been among the 55 delegates who actually attended the Convention
that adopted the federal Constitution (Warren, Congress, the Constitution and the Supreme Court
[Boston, 1935], p. 99). When, therefore, the first Congress approved the Judiciary Act of 1789
vesting in the Supreme Court original but not exclusive jurisdiction of all suits in which a consul or a
vice-consul shall be a party, express legislative interpretation as to the meaning of the word
"original" as not being exclusive was definitely made and this interpretation has never been
repudiated. As stated by the Supreme Court of the United States in Ames vs. Kansas ([1884], 111 U.
S., 449; 4 S. Ct., 437; 28 Law. ed., 482):

In view of the practical construction put on this provision of the Constitution by Congress, at
the very moment of the organization of the government, and of the significant fact that, from
1789 until now, no court of the United States has ever in its actual adjudications determined
to the contrary, we are unable to say that it is not within the power of Congress to grant to
the inferior courts of the United States jurisdiction in cases where the Supreme Court has
been vested by the Constitution with original jurisdiction. It rests with the legislative
department of the government to say to what extent such grants shall be made, and it may
safely be assumed that nothing will ever be done to encroach upon the high privileges of
those for whose protection the constitutional provision was intended. At any rate, we are
unwilling to say that the power to make the grant does not exist.

Dicta in some earlier cases seem to hold that the word "original" means "exclusive" and as observed
by Justice Field in United States vs. Louisiana ([1887], 123 U. S., 36; 8 S. Ct., 17; 31 Law. ed., 69),
the question has given rise to some differences of opinion among the earlier members of the
Supreme Court of the United States. (See, for instance, dissenting opinion of Iredell, J., in U.
S. vs. Ravara [1793], 2 Dall., 297; 1 Law. ed., 388.) Reliance was had on more or less general
expressions made by Chief Justice Marshall in the case of Marbury vs. Madison ([1803], 1 Cranch,
137; 2 Law. ed., 60), where it was said:

"If congress remains at liberty to give this court appellate jurisdiction, where the constitution has
declared their jurisdiction shall be original; and original jurisdiction where the constitution has
declared it shall be appellate; the distribution of jurisdiction, made in the constitution, is form without
substance." But Chief Justice Marshall who penned the decision in this case in 1803 had occasion
later, in 1821, to explain the meaning and extent of the pronouncements made in the Marbury case.
He said:

In the case of Marbury vs. Madison ([1803], 1 Cranch [U. S.], 137, 172; 2 Law. ed., 60), the
single question before the court, so far as that case can be applied to this, was, whether the
legislature could give this court original jurisdiction in a case in which the Constitution had
clearly not given it, and in which no doubt respecting the construction of the article could
possibly be raised. The court decided, and we think very properly, that the legislature could
not give original jurisdiction in such a case. But, in the reasoning of the court in support of
this decision, some expressions are used which go far beyond it. The counsel for Marbury
had insisted on the unlimited discretion of the legislature in the apportionment of the judicial
power; and it is against this argument that the reasoning of the court is directed. They say
that, if such had been the intention of the article, "it would certainly have been useless to
proceed farther than to define the judicial power, and the tribunals in which it should be
vested." The court says, that such a construction would render the clause, dividing the
jurisdiction of the court into original and appellate, totally useless; that "affirmative words are
often, in their operation, negative of other objects than those which are affirmed; and, in this
case (in the case of Marbury vs. Madison), a negative or exclusive sense must be given to
them, or they have no operation at all." "It cannot be presumed," adds the court, "that any
clause in the Constitution is intended to be without effect; and, therefore, such a construction
is inadmissible, unless the words require it." The whole reasoning of the court proceeds upon
the idea that the affirmative words of the clause giving one sort of jurisdiction, must imply a
negative of any other sort of jurisdiction, because otherwise the words would be totally
inoperative, and this reasoning is advanced in a case to which it was strictly applicable. If in
that case original jurisdiction could have been exercised, the clause under consideration
would have been entirely useless. Having such cases only in its view, the court lays down a
principle which is generally correct, in terms much broader than the decision, and not only
much broader than the reasoning with which that decision is supported, but in some
instances contradictory to its principle. The reasoning sustains the negative operation of the
words in that case, because otherwise the clause would have no meaning whatever, and
because such operation was necessary to give effect to the intention of the article. The effort
now made is, to apply the conclusion to which the court was conducted by that reasoning in
the particular case, to one in which the words have their full operation when understood
affirmatively, and in which the negative, or exclusive sense, is to be so used as to defeat
some of the great objects of the article. To this construction the court cannot give its assent.
The general expressions in the case of Marbury vs. Madison must be understood with the
limitations which are given to them in this opinion; limitations which in no degree affect the
decision in that case, or the tenor of its reasoning. (Cohens vs. Virginia [1821], 6 Wheat.,
264, 400; 5 Law. ed., 257.)

What the Supreme Court in the case of Marbury vs. Madison held then was that Congress could not
extend its original jurisdiction beyond the cases expressly mentioned in the Constitution, the rule of
construction being that affirmative words of the Constitution declaring in what cases the Supreme
Court shall have original jurisdiction must be construed negatively as to all other cases. (See Ex
parte Vallandigham [1864], 1 Wall., 243, 252; 17 Law. ed., 589; Martin vs. Hunter's Lessee [1816], 1
Wheat., 305, 330; 4 Law. ed., 97; U. S. vs. Haynes [D. C. Mass., 1887], 29 Fed., 691, 696.) That
was all.

It should be observed that Chief Justice Marshall concurred in the opinion in the case of
Davis vs. Packard (11833], 7 Pet., 276; 8 Law. ed., 684). In this case the jurisdiction of the state
court of New York over a civil suit against a foreign consul was denied solely on the ground that
jurisdiction had been conferred in such a case upon the district courts of the United States
exclusively of the state courts. Such a ground, says Justice Harlan in Bors vs. Preston ([1884], 111
U. S., 252; 4 S. Ct., 407; 28 Law. ed., 419), would probably not have been given had it been
believed that the grant of original jurisdiction to the Supreme Court deprived Congress of the power
to confer concurrent original jurisdiction in such cases upon subordinate courts of the Union,
concluding that the decision in the case "may be regarded, as an affirmance of the constitutionality
of the Act of 1789, giving original jurisdiction in such cases, also, to District Courts of the United
States." Of the seven justices who concurred in the judgment in the case of Davis, five participated
in the decision of Osborn vs. Bank of the United States ([1824], 9 Wheat., 738; 6 Law. ed., 204), also
penned by Chief Justice Marshall and relied upon as authority together with
Marbury vs. Madison, supra.

The rule enunciated in Bors vs. Preston, supra, is the one followed in the United States. The
question involved in that case was whether the Circuit Court then existing had jurisdiction under the
Constitution and laws of the United States to hear and determine any suit whatever against the
consul of a foreign government. Justice Harlan said:

The Constitution declares that "The judicial power of the United States shall extend . . . to all cases
affecting ambassadors or other public ministers and consuls;" to controversies between citizens of a
state and foreign citizens or subjects; that "In all cases affecting ambassadors, other public ministers
and consuls, . . . the Supreme Court shall have original jurisdiction;" and that in all other cases
previously mentioned in the same clause "The Supreme Court shall have appellate jurisdiction, both
as to law and fact, with such exceptions and under such regulations as the Congress shall make."
The Judiciary Act of 1789 invested the District Courts of the United States with jurisdiction,
exclusively of the courts of the several States, of all suits against consuls or vice-consuls, except for
offenses of a certain character; this court, with "Original, but not exclusive, jurisdiction of all suits . . .
in which a consul or vice-consul shall be a party;" and the circuit courts with jurisdiction of civil suits
in which an alien is a party. (l Stat. at L., 76-80.) In this act we have an affirmance, by the first
Congress — many of whose members participated in the Convention which adopted the Constitution
and were, therefore, conversant with the purposes of its framers — of the principle that the original
jurisdiction of this court of cases in which a consul or vice-consul is a party, is not necessarily
exclusive, and that the subordinate courts of the Union may be invested with jurisdiction of cases
affecting such representatives of foreign governments. On a question of constitutional construction,
this fact is entitled to great weight.

In this case of Bors, Justice Harlan adopted the view entertained by Chief Justice Taney in the
earlier case of Gittings vs. Crawford (C. C. Md., 1838; Taney's Dec., 1, 10). In that case of Gittings, it
was held that neither public policy nor convenience would justify the Supreme Court in implying that
Congress is prohibited from giving original jurisdiction in cases affecting consuls to the inferior
judicial tribunals of the United States. Chief Justice Taney said:

If the arrangement and classification of the subjects of jurisdiction into appellate and original,
as respects the Supreme Court, do not exclude that tribunal from appellate power in the
cases where original jurisdiction is granted, can it be right, from the same clause, to imply
words of exclusion as respects other courts whose jurisdiction is not there limited or
prescribed, but left for the future regulation of Congress? The true rule in this case is, I think,
 the rule which is constantly applied to ordinary acts of legislation, in which the grant of
jurisdiction over a certain subject-matter to one court, does not, of itself, imply that that
jurisdiction is to be exclusive. In the clause in question, there is nothing but mere affirmative
words of grant, and none that import a design to exclude the subordinate jurisdiction of other
courts of the United States on the same subject-matter. (See also U.S. vs. Ravara [1793], 2
Dall., 297; 1 Law. ed., 388; United States vs. Louisiana [1887], 123 U. S., 36; 8 S. Ct., 17; 31
Law. ed., 69; Ex parte Baiz [1890],135 U. S., 403; 10 S. Ct., 854; 34 Law. ed., 222, denying
writ of prohibition Hollander vs. Baiz [D. C. N. Y., 1890]; 41 Fed., 732; Iasigi vs. Van de Carr
[1897], 166 U.S., 391; 17 S. Ct., 595; 41 Law. ed., 1045; Graham vs. Strucken [C. C. N. Y.,
1857]; 4 Blatchf., 58; Lorway vs. Lousada [D. C. Mass., 1866]; Fed. Cas., No. 8517; St.
Luke's Hospital vs. Barclay [C. C. N. Y., 1855]; 3 Blatchf., 259; State of Texas vs. Lewis [C.
C. Tex., 1882], 14 Fed., 65; State of Alabama vs. Wolffe (C. C. Ala., 1883], 18 Fed., 836,
837; Pooley vs. Luco [D. C. Cal., 1896], 76 Fed., 146.)

It is interesting to note that in the case of St. Luke's Hospital vs. Barclay, supra, the jurisdiction of
circuit courts exclusive of state courts over aliens, no exception being made as to those who were
consuls, was maintained. (See1 U. S. Stat. at L., c. 20, sec. 11, pp. 78, 79.)

From the history of, and the judicial interpretation placed on, clause 2, section 2 of Article III of the
Constitution of the United States it seems clear that the word "original" in reference to the jurisdiction
of Supreme Court of the United States over cases affecting ambassadors, other public ministers and
consuls, was never intended to be exclusive as to prevent the Congress from vesting concurrent
jurisdiction over cases affecting consuls and vice-consuls in other federal courts.

It should be observed that the Philadelphia Convention of 1787 placed cases affecting the official
representatives of foreign powers under the jurisdiction of Federal Supreme Court to prevent the
public peace from being jeopardized. Since improper treatment of foreign ambassadors, other public
ministers and consuls may be a casus belli, it was thought that the federal government, which is
responsible for their treatment under international law, should itself be provided with the means to
meet the demands imposed by international duty. (Tucker, The Constitution of the United States
[1899], vol. II, 760, 772; vide, The Federalist, No. LXXXI, Ashley's Reprint [1917], 415.) Bearing in
mind in the distinction which international law establishes between ambassadors and other public
ministers, on the one hand, and consuls and other commercial representatives, on the other,
Congress saw it fit to provide in one case a rule different from the other, although as far as consuls
and vice-consuls are concerned, the jurisdiction of the Federal Supreme Court, as already observed,
though original is not exclusive. But in the United States, there are two judicial systems, independent
one from the other, while in the Philippines there is but one judicial system. So that the reason in the
United States for excluding certain courts — the state courts — from taking cognizance of cases
against foreign representatives stationed in the United States does not obtain in the Philippines
where the court of the lowest grade is as much a part of an integrated system as the highest court.

Let us now turn our own laws as they affect the case of the petitioner. Undoubtedly Philippine courts
are not federal courts and they are not governed by the Judiciary Acts of the United States. We have
a judicial system of our own, standing outside the sphere of the American federal system and
possessing powers and exercising jurisdiction pursuant to the provisions of our own Constitution and
laws.

The jurisdiction of our courts over consuls is defined and determined by our Constitution and laws
which include applicable treaties and accepted rules of the laws of nations. There are no treaties
between the United States and Uruguay exempting consuls of either country from the operation of
local criminal laws. Under the generally accepted principles of international law, declared by our
Constitution as part of the law of the nation (Art. II sec. 3, cl. 2), consuls and vice-consuls and other
commercial representatives of foreign nations do not possess the status and can not claim the
privilege and immunities accorded to ambassadors and ministers. (Wheaton, International Law, sec.
249; Kent, Commentaries, 44; Story on the Constitution, sec. 1660; Mathews, The American
Constitutional System [1932], 204, 205; Gittings vs. Crawford, C. C. Md., 1838; Taney's Dec., 1;
Wilcox vs. Luco, 118 Cal., 639; 45 Pac., 676; 2 C. J., 9 R. C. L., 161.) The only provisions touching
the subject to which we may refer are those found in the Constitution of the Philippines. Let us trace
the history of these provisions.

The report of the committee on the Judicial Power, submitted on September 29, 1934, did not
contain any provisions regarding cases affecting ambassadors, other public ministers and consuls.
The draft of the sub-committee of seven of the Sponsorship Committee, submitted on October 20,
1934, however, contains the following provision:

Article X, Section 2. The Supreme Court shall have such original jurisdiction as may be
possessed and exercised by the present Supreme Court of the Philippine Islands at the time
of the adoption of this Constitution, which jurisdiction shall include all cases affecting
ambassadors, other foreign ministers and consuls . . . ." The Special Committee on the
Judiciary, composed principally of Delegates Vicente J. Francisco and Norberto Romualdez,
included in its report the provisions which now appear in sections 2 and 3 of Article VIII of the
Constitution. Section 2 provides:

The National Assembly shall have the power to define, prescribed, and apportion the
jurisdiction of the various courts, but may not deprive the Supreme Court of its original
jurisdiction over cases affecting ambassadors, other ministers and consuls . . . . And the
second sentence of section 3 provides:

The original jurisdiction of the Supreme Court shall include all cases affecting ambassadors,
other public ministers and consuls.

The provision in our Constitution in so far as it confers upon our Supreme Court "original jurisdiction
over cases affecting ambassadors, other public ministers and consuls" is literally the same as that
contained in clause 2, section 2 of Article III of the United States Constitution.

In the course of the deliberation of the Constitutional Convention, some doubt was expressed
regarding the character of the grant of "original jurisdiction" to our Supreme Court. An examination of
the records of the proceedings of the Constitutional convention show that the framers of our
Constitution were familiar with the history of, and the judicial construction placed on, the same
provision of the United States Constitution. In order to end what would have been a protracted
discussion on the subject, a member of the Special Committee on the Judiciary gave the following
information to the members of the Convention:

. . . Sr. Presidente, a fin de poder terminar con el Articulo 2, el Comite esta dispuesto a hacer
constar que la interpretacion que debe dard a la ultima parte de dicho articulo es la misma
interpretacion que siempre se ha dado a semejante disposicion en la Constitucion de los Estados
Unidos. (January 16,1935.) Without further discussion, the provision was then and there approved.

It thus appears that the provision in question has been given a well-settled meaning in the United
States — the country of its origin. It has there received definite and hitherto unaltered legislative and
judicial interpretation. And the same meaning was ascribed to it when incorporated in our own
Constitution. To paraphrase Justice Gray of the Supreme Court of the United States, we are justified
in interpreting the provision of the Constitution in the light of the principles and history with which its
framers were familiar. (United States vs. Wong Kin Ark [1897], 169 U. S., 649; 18 S. Ct., 456; 42
Law. ed., 890, cited with approval in Kepner vs. United States, a case of Philippine origin [1904]; 195
U. S., 100; 49 Law. ed., 114.)

(b) What has been said hereinabove is not unnecessary attachment to history or idolatrous
adherence to precedents. In referring to the history of this provision of our Constitution it is realized
that historical discussion while valuable is not necessarily decisive. Rationally, however, the
philosophical reason for the conclusion announced is not far to seek if certain principles of
constitutional government are borne in mind. The constitution is both a grant of, and a limitation
upon, governmental powers. In the absence of clear and unequivocal restraint of legislative
authority, the power is retained by the people and is exercisable by their representatives in their
legislature. The rule is that the legislature possess plenary power for all purposes of civil
government. A prohibition to exercise legislative power is the exception. (Denio, C. J., in
People vs. Draper, 15 N.Y., 532, 543.) These prohibitions or restrictions are found either in the
language used, or in the purpose held in view as well as the circumstances which led to the adoption
of the particular provision as part of the fundamental law. (Ex parte Lewis, 45 Tex. Crim. Rep., 1; 73
S. W., 811; 108 Am. St. Rep., 929.)

Subject to certain limitations, the Filipino people, through their delegates, have committed legislative
power in a most general way to the National Assembly has plenary legislative power in all matters of
legislation except as limited by the constitution. When, therefore, the constitution vests in the
Supreme Court original jurisdiction in cases affecting ambassadors, other public ministers and
consuls, without specifying the exclusive character of the grant, the National Assembly is not
deprived of its authority to make that jurisdiction concurrent. It has been said that popular
government lives because of the inexhaustible reservoir of power behind. It is unquestionable that
the mass of powers of government is vested in the representatives of the people, and that these
representatives are no further restrained under our system than by the express language of the
instrument imposing the restraint, or by particular provisions which, by clear intendment, have that
effect. (Angara vs. Electoral Commission, p.139, ante.) What the Constitution prohibits is merely the
deprivation of the Supreme Court of its original jurisdiction over cases affecting ambassadors, other
public ministers and consuls and while it must be admitted that original jurisdiction if made
concurrent no longer remains exclusive, it is also true that jurisdiction does not cease to be original
merely because it is concurrent.

It is also quite true that concurrent original jurisdiction in this class of cases would mean the sharing
of the Supreme Court with the most inferior courts of cases affecting ambassadors, other public
ministers and consuls such that the Supreme Court would have concurrent jurisdiction with the
lowest courts in our judicial hierarchy, the justice of the peace of the courts, in a petty case for the
instance, the violation of a municipal ordinance affecting the parties just mentioned. However, no
serious objection to these result can be seen other that the misinterpreted unwillingness to share this
jurisdiction with a court pertaining to the lowest category in our judicial organization. Upon the other
hand, the fundamental reasoning would apply with equal force if the highest court of the land is
made to take recognizance exclusively of a case involving the violation of the municipal ordinance
simply because of the character of the parties affected. After alluding to the fact that the position of
consul of a foreign government is sometimes filled by a citizen of the United States (and this also
true in the Philippines) Chief Justice Taney, in Gittings vs. Crawford, supra, observed:

It could hardly have been the intention of the statesmen who framed our constitution to
require that one of our citizens who had a petty claim of even less than five dollars against
another citizen, who had been clothed by some foreign government with the consular office,
should be compelled to go into the Supreme Court to have a jury summoned in order to
enable him to recover it; nor could it have been intended, that the time of that court, with all
its high duties to perform, should be taken up with the trial of every petty offense that might
 be committed by a consul by any part of the United States; that consul, too, being often one
of our own citizens.

Probably, the most serious objection to the interpretation herein advocated is, that considering the
actual distribution of jurisdiction between the different courts in our jurisdiction, there may be cases
where the Supreme Court may not actually exercise either original — whether exclusive or
concurrent — or appellate jurisdiction, notwithstanding the grant of original jurisdiction in this class of
cases to the Supreme Court. If, for instance, a criminal case is brought either in a justice of the
peace court or in a Court of First Instance against a foreign consul and no question of law is
involved, it is evident that in case of conviction, the proceedings will terminate in the Court Appeals
and will not reach the Supreme Court. In this case, the Supreme Court will be deprived of all
jurisdiction in a case affecting a consul notwithstanding the grant thereto in the Constitution of
original jurisdiction in all cases affecting consuls. This is a situation, however, created not by the
Constitution but by existing legislation, and the remedy is in the hands of the National Assembly. The
Constitution cannot deal with every casus omissus, and in the nature of things, must only deal with
fundamental principles, leaving the detail of administration and execution to the other branches of
the government. It rests with the National Assembly to determine the inferior courts which shall
exercise concurrent original jurisdiction with the Supreme Court in cases affecting ambassadors,
other public ministers and consuls, considering the nature of the offense and irrespective of the
amount of controversy. The National Assembly may as in the United States (Cooley, Constitutional
Law, 4th ed. [1931], sec. 4, p. 156), provide for appeal to the Supreme Court in all cases affecting
foreign diplomatic and consular representatives.

Before the approval of the Constitution, jurisdiction over consuls was exercisable by our courts. This
is more so now that the Independence Law and Constitution framed and adopted pursuant thereto
are in force. The fact that the National Assembly has not enacted any law determining what courts of
the of the Philippines shall exercise concurrent jurisdiction with the Supreme Court is of no moment.
This can not mean and should not be interpreted to mean that the original jurisdiction vested in the
Supreme Court by the Constitution is not concurrent with other national courts of inferior category.

The respondent judge of the Court of First Instance of the City of Manila having jurisdiction to take
cognizance of the criminal case brought against the petitioner, the writ of prohibition should be
denied.

G.R. No. 155635             November 7, 2008

MARIA REBECCA MAKAPUGAY BAYOT, petitioner, 

vs.
THE HONORABLE COURT OF APPEALS and VICENTE MADRIGAL BAYOT, respondents.

x-------------------------------------------x

G.R. No. 163979             November 7, 2008

MARIA REBECCA MAKAPUGAY BAYOT, petitioner, 

vs.
VICENTE MADRIGAL BAYOT, respondent.

DECISION

VELASCO, JR., J.:
 The Case

Before us are these two petitions interposed by petitioner Maria Rebecca Makapugay Bayot impugning
certain issuances handed out by the Court of Appeals (CA) in CA-G.R. SP No. 68187.

In the first, a petition for certiorari1 under Rule 65 and docketed as G.R. No. 155635, Rebecca assails and
seeks to nullify the April 30, 2002 Resolution2 of the CA, as reiterated in another Resolution of September
2, 2002,3 granting a writ of preliminary injunction in favor of private respondent Vicente Madrigal Bayot
staving off the trial court's grant of support pendente lite to Rebecca.

The second, a petition for review under Rule 45,4 docketed G.R. No. 163979, assails the March 25, 2004
Decision5 of the CA, (1) dismissing Civil Case No. 01-094, a suit for declaration of absolute nullity of
marriage with application for support commenced by Rebecca against Vicente before the Regional Trial
Court (RTC) in Muntinlupa City; and (2) setting aside certain orders and a resolution issued by the RTC in
the said case.

Per its Resolution of August 11, 2004, the Court ordered the consolidation of both cases.

The Facts

Vicente and Rebecca were married on April 20, 1979 in Sanctuario de San Jose, Greenhills,
Mandaluyong City. On its face, the Marriage Certificate6 identified Rebecca, then 26 years old, to be an
American citizen7 born in Agaña, Guam, USA to Cesar Tanchiong Makapugay, American, and Helen
Corn Makapugay, American.

On November 27, 1982 in San Francisco, California, Rebecca gave birth to Marie Josephine Alexandra or
Alix. From then on, Vicente and Rebecca's marital relationship seemed to have soured as the latter,
sometime in 1996, initiated divorce proceedings in the Dominican Republic. Before the Court of the First
Instance of the Judicial District of Santo Domingo, Rebecca personally appeared, while Vicente was duly
represented by counsel. On February 22, 1996, the Dominican court issued Civil Decree No.
362/96,8 ordering the dissolution of the couple's marriage and "leaving them to remarry after completing
the legal requirements," but giving them joint custody and guardianship over Alix. Over a year later, the
same court would issue Civil Decree No. 406/97,9 settling the couple's property relations pursuant to an
Agreement10 they executed on December 14, 1996. Said agreement specifically stated that the "conjugal
property which they acquired during their marriage consist[s] only of the real property and all the
improvements and personal properties therein contained at 502 Acacia Avenue, Alabang, Muntinlupa."11

Meanwhile, on March 14, 1996, or less than a month from the issuance of Civil Decree No. 362/96,
Rebecca filed with the Makati City RTC a petition12 dated January 26, 1996, with attachments, for
declaration of nullity of marriage, docketed as Civil Case No. 96-378. Rebecca, however, later
moved13 and secured approval14 of the motion to withdraw the petition.

On May 29, 1996, Rebecca executed an Affidavit of Acknowledgment15 stating under oath that she is an
American citizen; that, since 1993, she and Vicente have been living separately; and that she is carrying a
child not of Vicente.

On March 21, 2001, Rebecca filed another petition, this time before the Muntinlupa City RTC, for
declaration of absolute nullity of marriage16 on the ground of Vicente's alleged psychological incapacity.
Docketed as Civil Case No. 01-094 and entitled as Maria Rebecca Makapugay Bayot v. Vicente Madrigal
Bayot, the petition was eventually raffled to Branch 256 of the court. In it, Rebecca also sought the
dissolution of the conjugal partnership of gains with application for support pendente lite for her and Alix.
Rebecca also prayed that Vicente be ordered to pay a permanent monthly support for their daughter Alix
in the amount of PhP 220,000.
On June 8, 2001, Vicente filed a Motion to Dismiss17 on, inter alia, the grounds of lack of cause of action
and that the petition is barred by the prior judgment of divorce. Earlier, on June 5, 2001, Rebecca filed
and moved for the allowance of her application for support pendente lite.

To the motion to dismiss, Rebecca interposed an opposition, insisting on her Filipino citizenship, as
affirmed by the Department of Justice (DOJ), and that, therefore, there is no valid divorce to speak of.

Meanwhile, Vicente, who had in the interim contracted another marriage, and Rebecca commenced
several criminal complaints against each other. Specifically, Vicente filed adultery and perjury complaints
against Rebecca. Rebecca, on the other hand, charged Vicente with bigamy and concubinage.

Ruling of the RTC on the Motion to Dismiss

and Motion for Support Pendente Lite

On August 8, 2001, the RTC issued an Order18 denying Vicente's motion to dismiss Civil Case No. 01-094
and granting Rebecca's application for support pendente lite, disposing as follows:

Wherefore, premises considered, the Motion to Dismiss filed by the respondent is DENIED.
Petitioner's Application in Support of the Motion for Support Pendente Lite is hereby GRANTED.
Respondent is hereby ordered to remit the amount of TWO HUNDRED AND TWENTY
THOUSAND PESOS (Php 220,000.00) a month to Petitioner as support for the duration of the
proceedings relative to the instant Petition.

SO ORDERED.19

The RTC declared, among other things, that the divorce judgment invoked by Vicente as bar to the
petition for declaration of absolute nullity of marriage is a matter of defense best taken up during actual
trial. As to the grant of support pendente lite, the trial court held that a mere allegation of adultery against
Rebecca does not operate to preclude her from receiving legal support.

Following the denial20 of his motion for reconsideration of the above August 8, 2001 RTC order, Vicente
went to the CA on a petition for certiorari, with a prayer for the issuance of a temporary restraining order
(TRO) and/or writ of preliminary injunction.21 His petition was docketed as CA-G.R. SP No. 68187.

Grant of Writ of Preliminary Injunction by the CA

On January 9, 2002, the CA issued the desired TRO.22 On April 30, 2002, the appellate court granted, via
a Resolution, the issuance of a writ of preliminary injunction, the decretal portion of which reads:

IN VIEW OF ALL THE FOREGOING, pending final resolution of the petition at bar, let the Writ of
Preliminary Injunction be ISSUED in this case, enjoining the respondent court from implementing
the assailed Omnibus Order dated August 8, 2001 and the Order dated November 20, 2001, and
from conducting further proceedings in Civil Case No. 01-094, upon the posting of an injunction
bond in the amount of P250,000.00.

SO ORDERED.23

Rebecca moved24 but was denied reconsideration of the aforementioned April 30, 2002 resolution. In the
meantime, on May 20, 2002, the preliminary injunctive writ25 was issued. Rebecca also moved for
reconsideration of this issuance, but the CA, by Resolution dated September 2, 2002, denied her motion.

The adverted CA resolutions of April 30, 2002 and September 2, 2002 are presently being assailed in
Rebecca's petition for certiorari, docketed under G.R. No. 155635.
 Ruling of the CA

Pending resolution of G.R. No. 155635, the CA, by a Decision dated March 25, 2004, effectively
dismissed Civil Case No. 01-094, and set aside incidental orders the RTC issued in relation to the case.
The fallo of the presently assailed CA Decision reads:

IN VIEW OF THE FOREGOING, the petition is GRANTED. The Omnibus Order dated August 8,
2001 and the Order dated November 20, 2001 are REVERSED and SET ASIDE and a new one
entered DISMISSING Civil Case No. 01-094, for failure to state a cause of action. No
pronouncement as to costs.

SO ORDERED.26

To the CA, the RTC ought to have granted Vicente's motion to dismiss on the basis of the following
premises:

(1) As held in China Road and Bridge Corporation v. Court of Appeals, the hypothetical-admission rule
applies in determining whether a complaint or petition states a cause of action.27 Applying said rule in the
light of the essential elements of a cause of action,28 Rebecca had no cause of action against Vicente for
declaration of nullity of marriage.

(2) Rebecca no longer had a legal right in this jurisdiction to have her marriage with Vicente declared
void, the union having previously been dissolved on February 22, 1996 by the foreign divorce decree she
personally secured as an American citizen. Pursuant to the second paragraph of Article 26 of the Family
Code, such divorce restored Vicente's capacity to contract another marriage.

(3) Rebecca's contention about the nullity of a divorce, she being a Filipino citizen at the time the foreign
divorce decree was rendered, was dubious. Her allegation as to her alleged Filipino citizenship was also
doubtful as it was not shown that her father, at the time of her birth, was still a Filipino citizen. The
Certification of Birth of Rebecca issued by the Government of Guam also did not indicate the nationality of
her father.

(4) Rebecca was estopped from denying her American citizenship, having professed to have that
nationality status and having made representations to that effect during momentous events of her life,
such as: (a) during her marriage; (b) when she applied for divorce; and (c) when she applied for and
eventually secured an American passport on January 18, 1995, or a little over a year before she initiated
the first but later withdrawn petition for nullity of her marriage (Civil Case No. 96-378) on March 14, 1996.

(5) Assuming that she had dual citizenship, being born of a purportedly Filipino father in Guam, USA
which follows the jus soli principle, Rebecca's representation and assertion about being an American
citizen when she secured her foreign divorce precluded her from denying her citizenship and impugning
the validity of the divorce.

Rebecca seasonably filed a motion for reconsideration of the above Decision, but this recourse was
denied in the equally assailed June 4, 2004 Resolution.29 Hence, Rebecca's Petition for Review on
Certiorari under Rule 45, docketed under G.R. No. 163979.

The Issues

In G.R. No. 155635, Rebecca raises four (4) assignments of errors as grounds for the allowance of her
petition, all of which converged on the proposition that the CA erred in enjoining the implementation of the
RTC's orders which would have entitled her to support pending final resolution of Civil Case No. 01-094.
In G.R. No. 163979, Rebecca urges the reversal of the assailed CA decision submitting as follows:

THE COURT OF APPEALS GRAVELY ERRED IN NOT MENTIONING AND NOT TAKING INTO
CONSIDERATION IN ITS APPRECIATION OF THE FACTS THE FACT OF PETITIONER'S
FILIPINO CITIZENSHIP AS CATEGORICALLY STATED AND ALLEGED IN HER PETITION
BEFORE THE COURT A QUO.

II

THE COURT OF APPEALS GRAVELY ERRED IN RELYING ONLY ON ANNEXES TO THE

PETITION IN RESOLVING THE MATTERS BROUGHT BEFORE IT.

III

THE COURT OF APPEALS GRAVELY ERRED IN FAILING TO CONSIDER THAT

RESPONDENT IS ESTOPPED FROM CLAIMING THAT HIS MARRIAGE TO PETITIONER HAD
ALREADY BEEN DISSOLVED BY VIRTUE OF HIS SUBSEQUENT AND CONCURRENT ACTS.

IV

THE COURT OF APPEALS GRAVELY ERRED IN RULING THAT THERE WAS ABUSE OF
DISCRETION ON THE PART OF THE TRIAL COURT, MUCH LESS A GRAVE ABUSE.30

We shall first address the petition in G.R. No. 163979, its outcome being determinative of the success or
failure of the petition in G.R. No. 155635.

Three legal premises need to be underscored at the outset. First, a divorce obtained abroad by an alien
married to a Philippine national may be recognized in the Philippines, provided the decree of divorce is
valid according to the national law of the foreigner.31 Second, the reckoning point is not the citizenship of
the divorcing parties at birth or at the time of marriage, but their citizenship at the time a valid divorce is
obtained abroad. And third, an absolute divorce secured by a Filipino married to another Filipino is
contrary to our concept of public policy and morality and shall not be recognized in this jurisdiction.32

Given the foregoing perspective, the determinative issue tendered in G.R. No. 155635, i.e., the propriety
of the granting of the motion to dismiss by the appellate court, resolves itself into the questions of: first,
whether petitioner Rebecca was a Filipino citizen at the time the divorce judgment was rendered in the
Dominican Republic on February 22, 1996; and second, whether the judgment of divorce is valid and, if
so, what are its consequent legal effects?

The Court's Ruling

The petition is bereft of merit.

Rebecca an American Citizen in the Purview of This Case

There can be no serious dispute that Rebecca, at the time she applied for and obtained her divorce from
Vicente, was an American citizen and remains to be one, absent proof of an effective repudiation of such
citizenship. The following are compelling circumstances indicative of her American citizenship: (1) she
was born in Agaña, Guam, USA; (2) the principle of jus soli is followed in this American territory granting
American citizenship to those who are born there; and (3) she was, and may still be, a holder of an
American passport.33
And as aptly found by the CA, Rebecca had consistently professed, asserted, and represented herself as
an American citizen, particularly: (1) during her marriage as shown in the marriage certificate; (2) in the
birth certificate of Alix; and (3) when she secured the divorce from the Dominican Republic. Mention may
be made of the Affidavit of Acknowledgment34 in which she stated being an American citizen.

It is true that Rebecca had been issued by the Bureau of Immigration (Bureau) of Identification (ID)
Certificate No. RC 9778 and a Philippine Passport. On its face, ID Certificate No. RC 9778 would tend to
show that she has indeed been recognized as a Filipino citizen. It cannot be over-emphasized, however,
that such recognition was given only on June 8, 2000 upon the affirmation by the Secretary of Justice of
Rebecca's recognition pursuant to the Order of Recognition issued by Bureau Associate Commissioner
Edgar L. Mendoza.

For clarity, we reproduce in full the contents of ID Certificate No. RC 9778:

To Whom It May Concern:

This is to certify that *MARIA REBECCA MAKAPUGAY BAYOT* whose photograph and

thumbprints are affixed hereto and partially covered by the seal of this Office, and whose other
particulars are as follows:

Place of Birth:     Guam, USA       Date of Birth:     March 5, 1953

Sex:     female                              Civil Status:     married       Color of Hair:    brown

Color of Eyes:     brown               Distinguishing marks on face:    none

was - r e c o g n i z e d - as a citizen of the Philippines as per pursuant to Article IV, Section 1,

Paragraph 3 of the 1935 Constitution per order of Recognition JBL 95-213 signed by Associate
Commissioner Jose B. Lopez dated October 6, 1995, and duly affirmed by Secretary of Justice
Artemio G. Tuquero in his 1st Indorsement dated June 8, 2000.

Issued for identification purposes only. NOT VALID for travel purposes.

Given under my hand and seal this 11th day of October, 1995

(SGD) EDGAR L. MENDOZA

ASSO. COMMISSIONER

Official Receipt No. 5939988

issued at Manila
dated Oct. 10, 1995 for P 2,000

From the text of ID Certificate No. RC 9778, the following material facts and dates may be deduced: (1)
Bureau Associate Commissioner Jose B. Lopez issued the Order of Recognition on October 6, 1995; (2)
the 1st Indorsement of Secretary of Justice Artemio G. Tuquero affirming Rebecca's recognition as a
Filipino citizen was issued on June 8, 2000 or almost five years from the date of the order of recognition;
and (3) ID Certificate No. RC 9778 was purportedly issued on October 11, 1995 after the payment of the
PhP 2,000 fee on October 10, 1995 per OR No. 5939988.

What begs the question is, however, how the above certificate could have been issued by the Bureau on
October 11, 1995 when the Secretary of Justice issued the required affirmation only on June 8, 2000. No
explanation was given for this patent aberration. There seems to be no error with the date of the issuance
of the 1st Indorsement by Secretary of Justice Tuquero as this Court takes judicial notice that he was the
Secretary of Justice from February 16, 2000 to January 22, 2001. There is, thus, a strong valid reason to
conclude that the certificate in question must be spurious.

Under extant immigration rules, applications for recognition of Filipino citizenship require the affirmation
by the DOJ of the Order of Recognition issued by the Bureau. Under Executive Order No. 292, also
known as the 1987 Administrative Code, specifically in its Title III, Chapter 1, Sec. 3(6), it is the DOJ
which is tasked to "provide immigration and naturalization regulatory services and implement the laws
governing citizenship and the admission and stay of aliens." Thus, the confirmation by the DOJ of any
Order of Recognition for Filipino citizenship issued by the Bureau is required.

Pertinently, Bureau Law Instruction No. RBR-99-00235 on Recognition as a Filipino Citizen clearly
provides:

The Bureau [of Immigration] through its Records Section shall automatically furnish the
Department of Justice an official copy of its Order of Recognition within 72 days from its date of
approval by the way of indorsement for confirmation of the Order by the Secretary of Justice
pursuant to Executive Order No. 292. No Identification Certificate shall be issued before the
date of confirmation by the Secretary of Justice and any Identification Certificate issued by
the Bureau pursuant to an Order of Recognition shall prominently indicate thereon the date of
confirmation by the Secretary of Justice. (Emphasis ours.)

Not lost on the Court is the acquisition by Rebecca of her Philippine passport only on June 13, 2000, or
five days after then Secretary of Justice Tuquero issued the 1st Indorsement confirming the order of
recognition. It may be too much to attribute to coincidence this unusual sequence of close events which,
to us, clearly suggests that prior to said affirmation or confirmation, Rebecca was not yet recognized as a
Filipino citizen. The same sequence would also imply that ID Certificate No. RC 9778 could not have
been issued in 1995, as Bureau Law Instruction No. RBR-99-002 mandates that no identification
certificate shall be issued before the date of confirmation by the Secretary of Justice. Logically, therefore,
the affirmation or confirmation of Rebecca's recognition as a Filipino citizen through the 1st Indorsement
issued only on June 8, 2000 by Secretary of Justice Tuquero corresponds to the eventual issuance of
Rebecca's passport a few days later, or on June 13, 2000 to be exact.

When Divorce Was Granted Rebecca, She Was not a

Filipino Citizen and Was not Yet Recognized as One

The Court can assume hypothetically that Rebecca is now a Filipino citizen. But from the foregoing
disquisition, it is indubitable that Rebecca did not have that status of, or at least was not yet recognized
as, a Filipino citizen when she secured the February 22, 1996 judgment of divorce from the Dominican
Republic.

The Court notes and at this juncture wishes to point out that Rebecca voluntarily withdrew her original
petition for declaration of nullity (Civil Case No. 96-378 of the Makati City RTC) obviously because she
could not show proof of her alleged Filipino citizenship then. In fact, a perusal of that petition shows that,
while bearing the date January 26, 1996, it was only filed with the RTC on March 14, 1996 or less than a
month after Rebecca secured, on February 22, 1996, the foreign divorce decree in question.
Consequently, there was no mention about said divorce in the petition. Significantly, the only documents
appended as annexes to said original petition were: the Vicente-Rebecca Marriage Contract (Annex "A")
and Birth Certificate of Alix (Annex "B"). If indeed ID Certificate No. RC 9778 from the Bureau was truly
issued on October 11, 1995, is it not but logical to expect that this piece of document be appended to
form part of the petition, the question of her citizenship being crucial to her case?

As may be noted, the petition for declaration of absolute nullity of marriage under Civil Case No. 01-094,
like the withdrawn first petition, also did not have the ID Certificate from the Bureau as attachment. What
were attached consisted of the following material documents: Marriage Contract (Annex "A") and Divorce
Decree. It was only through her Opposition (To Respondent's Motion to Dismiss dated 31 May 2001)36 did
Rebecca attach as Annex "C" ID Certificate No. RC 9778.

At any rate, the CA was correct in holding that the RTC had sufficient basis to dismiss the petition for
declaration of absolute nullity of marriage as said petition, taken together with Vicente's motion to dismiss
and Rebecca's opposition to motion, with their respective attachments, clearly made out a case of lack of
cause of action, which we will expound later.

Validity of Divorce Decree

Going to the second core issue, we find Civil Decree Nos. 362/96 and 406/97 valid.

First, at the time of the divorce, as above elucidated, Rebecca was still to be recognized, assuming for
argument that she was in fact later recognized, as a Filipino citizen, but represented herself in public
documents as an American citizen. At the very least, she chose, before, during, and shortly after her
divorce, her American citizenship to govern her marital relationship. Second, she secured personally said
divorce as an American citizen, as is evident in the text of the Civil Decrees, which pertinently declared:

IN THIS ACTION FOR DIVORCE in which the parties expressly submit to the jurisdiction of this
court, by reason of the existing incompatibility of temperaments x x x. The parties MARIA
REBECCA M. BAYOT, of United States nationality, 42 years of age, married, domiciled and
residing at 502 Acacia Ave., Ayala Alabang, Muntin Lupa, Philippines, x x x, who personally
appeared before this court, accompanied by DR. JUAN ESTEBAN OLIVERO, attorney, x x x
and VICENTE MADRIGAL BAYOT, of Philippine nationality, of 43 years of age, married and
domiciled and residing at 502 Acacia Ave., Ayala Alabang, Muntin Lupa, Filipino, appeared
before this court represented by DR. ALEJANDRO TORRENS, attorney, x x x, revalidated by
special power of attorney given the 19th of February of 1996, signed before the Notary Public
Enrico L. Espanol of the City of Manila, duly legalized and authorizing him to subscribe all the
acts concerning this case.37 (Emphasis ours.)

Third, being an American citizen, Rebecca was bound by the national laws of the United States of
America, a country which allows divorce. Fourth, the property relations of Vicente and Rebecca were
properly adjudicated through their Agreement38executed on December 14, 1996 after Civil Decree No.
362/96 was rendered on February 22, 1996, and duly affirmed by Civil Decree No. 406/97 issued on
March 4, 1997. Veritably, the foreign divorce secured by Rebecca was valid.

To be sure, the Court has taken stock of the holding in Garcia v. Recio  that a foreign divorce can be
recognized here, provided the divorce decree is proven as a fact and as valid under the national law of
the alien spouse.39 Be this as it may, the fact that Rebecca was clearly an American citizen when she
secured the divorce and that divorce is recognized and allowed in any of the States of the Union,40 the
presentation of a copy of foreign divorce decree duly authenticated by the foreign court issuing said
decree is, as here, sufficient.

It bears to stress that the existence of the divorce decree has not been denied, but in fact admitted by
both parties. And neither did they impeach the jurisdiction of the divorce court nor challenge the validity of
its proceedings on the ground of collusion, fraud, or clear mistake of fact or law, albeit both appeared to
have the opportunity to do so. The same holds true with respect to the decree of partition of their conjugal
property. As this Court explained in Roehr v. Rodriguez:

Before our courts can give the effect of res judicata to a foreign judgment [of divorce] x x x, it
must be shown that the parties opposed to the judgment had been given ample opportunity to do
so on grounds allowed under Rule 39, Section 50 of the Rules of Court (now Rule 39, Section 48,
1997 Rules of Civil Procedure), to wit:
 SEC. 50. Effect of foreign judgments.--The effect of a judgment of a tribunal of a foreign
country, having jurisdiction to pronounce the judgment is as follows:

(a) In case of a judgment upon a specific thing, the judgment is conclusive upon the title
to the thing;

(b) In case of a judgment against a person, the judgment is presumptive evidence of a

right as between the parties and their successors in interest by a subsequent title; but the
judgment may be repelled by evidence of a want of jurisdiction, want of notice to the
party, collusion, fraud, or clear mistake of law or fact.

It is essential that there should be an opportunity to challenge the foreign judgment, in order for
the court in this jurisdiction to properly determine its efficacy. In this jurisdiction, our Rules of
Court clearly provide that with respect to actions in personam, as distinguished from actions in
rem, a foreign judgment |merely constitutes prima facieevidence of the justness of the claim of a
party and, as such, is subject to proof to the contrary.41

As the records show, Rebecca, assisted by counsel, personally secured the foreign divorce while Vicente
was duly represented by his counsel, a certain Dr. Alejandro Torrens, in said proceedings. As things
stand, the foreign divorce decrees rendered and issued by the Dominican Republic court are valid and,
consequently, bind both Rebecca and Vicente.

Finally, the fact that Rebecca may have been duly recognized as a Filipino citizen by force of the June 8,
2000 affirmation by Secretary of Justice Tuquero of the October 6, 1995 Bureau Order of Recognition will
not, standing alone, work to nullify or invalidate the foreign divorce secured by Rebecca as an American
citizen on February 22, 1996. For as we stressed at the outset, in determining whether or not a divorce
secured abroad would come within the pale of the country's policy against absolute divorce, the reckoning
point is the citizenship of the parties at the time a valid divorce is obtained.42

Legal Effects of the Valid Divorce

Given the validity and efficacy of divorce secured by Rebecca, the same shall be given a res
judicata effect in this jurisdiction. As an obvious result of the divorce decree obtained, the
marital vinculum between Rebecca and Vicente is considered severed; they are both freed from the bond
of matrimony. In plain language, Vicente and Rebecca are no longer husband and wife to each other. As
the divorce court formally pronounced: "[T]hat the marriage between MARIA REBECCA M. BAYOT and
VICENTE MADRIGAL BAYOT is hereby dissolved x x x leaving them free to remarry after
completing the legal requirements."43

Consequent to the dissolution of the marriage, Vicente could no longer be subject to a husband's
obligation under the Civil Code. He cannot, for instance, be obliged to live with, observe respect and
fidelity, and render support to Rebecca.44

The divorce decree in question also brings into play the second paragraph of Art. 26 of the Family Code,
providing as follows:

Art. 26. x x x x

Where a marriage between a Filipino citizen and a foreigner is validly celebrated and a divorce is
thereafter validly obtained abroad by the alien spouse capacitating him or her to remarry, the
Filipino spouse shall likewise have capacity to remarry under Philippine law. (As amended by
E.O. 227)
In Republic v. Orbecido III, we spelled out the twin elements for the applicability of the second paragraph
of Art. 26, thus:

x x x [W]e state the twin elements for the application of Paragraph 2 of Article 26 as follows:

1. There is a valid marriage that has been celebrated between a Filipino citizen and a foreigner;
and

2. A valid divorce is obtained abroad by the alien spouse capacitating him or her to remarry.

The reckoning point is not the citizenship of the parties at the time of the celebration of the
marriage, but their citizenship at the time a valid divorce is obtained abroad by the alien spouse
capacitating the latter to remarry.45

Both elements obtain in the instant case. We need not belabor further the fact of marriage of Vicente and
Rebecca, their citizenship when they wed, and their professed citizenship during the valid divorce
proceedings.

Not to be overlooked of course is the fact that Civil Decree No. 406/97 and the Agreement executed on
December 14, 1996 bind both Rebecca and Vicente as regards their property relations. The Agreement
provided that the ex-couple's conjugal property consisted only their family home, thus:

9. That the parties stipulate that the conjugal property which they acquired during their
marriage consists onlyof the real property and all the improvements and personal properties
therein contained at 502 Acacia Avenue, Ayala Alabang, Muntinlupa, covered by TCT No.
168301 dated Feb. 7, 1990 issued by the Register of Deeds of Makati, Metro Manila registered in
the name of Vicente M. Bayot, married to Rebecca M. Bayot, x x x.46 (Emphasis ours.)

This property settlement embodied in the Agreement was affirmed by the divorce court which, per its
second divorce decree, Civil Decree No. 406/97 dated March 4, 1997, ordered that, "THIRD: That the
agreement entered into between the parties dated 14th day of December 1996 in Makati City, Philippines
shall survive in this Judgment of divorce by reference but not merged and that the parties are hereby
ordered and directed to comply with each and every provision of said agreement."47

Rebecca has not repudiated the property settlement contained in the Agreement. She is thus estopped by
her representation before the divorce court from asserting that her and Vicente's conjugal property was
not limited to their family home in Ayala Alabang.48

No Cause of Action in the Petition for Nullity of Marriage

Upon the foregoing disquisitions, it is abundantly clear to the Court that Rebecca lacks, under the
premises, cause of action. Philippine Bank of Communications v. Trazo explains the concept and
elements of a cause of action, thus:

A cause of action is an act or omission of one party in violation of the legal right of the other. A
motion to dismiss based on lack of cause of action hypothetically admits the truth of the
allegations in the complaint. The allegations in a complaint are sufficient to constitute a cause of
action against the defendants if, hypothetically admitting the facts alleged, the court can render a
valid judgment upon the same in accordance with the prayer therein. A cause of action exists if
the following elements are present, namely: (1) a right in favor of the plaintiff by whatever means
and under whatever law it arises or is created; (2) an obligation on the part of the named
defendant to respect or not to violate such right; and (3) an act or omission on the part of such
 defendant violative of the right of the plaintiff or constituting a breach of the obligation of the
defendant to the plaintiff for which the latter may maintain an action for recovery of damages.49

One thing is clear from a perusal of Rebecca's underlying petition before the RTC, Vicente's motion to
dismiss and Rebecca's opposition thereof, with the documentary evidence attached therein: The
petitioner lacks a cause of action for declaration of nullity of marriage, a suit which presupposes the
existence of a marriage.

To sustain a motion to dismiss for lack of cause of action, the movant must show that the claim for relief
does not exist rather than that a claim has been defectively stated or is ambiguous, indefinite, or
uncertain.50 With the valid foreign divorce secured by Rebecca, there is no more marital tie binding her to
Vicente. There is in fine no more marriage to be dissolved or nullified.

The Court to be sure does not lose sight of the legal obligation of Vicente and Rebecca to support the
needs of their daughter, Alix. The records do not clearly show how he had discharged his duty, albeit
Rebecca alleged that the support given had been insufficient. At any rate, we do note that Alix, having
been born on November 27, 1982, reached the majority age on November 27, 2000, or four months
before her mother initiated her petition for declaration of nullity. She would now be 26 years old. Hence,
the issue of back support, which allegedly had been partly shouldered by Rebecca, is best litigated in a
separate civil action for reimbursement. In this way, the actual figure for the support of Alix can be proved
as well as the earning capacity of both Vicente and Rebecca. The trial court can thus determine what
Vicente owes, if any, considering that support includes provisions until the child concerned shall have
finished her education.

Upon the foregoing considerations, the Court no longer need to delve into the issue tendered in G.R. No.
155635, that is, Rebecca's right to support pendente lite. As it were, her entitlement to that kind of support
hinges on the tenability of her petition under Civil Case No. 01-094 for declaration of nullity of marriage.
The dismissal of Civil Case No. 01-094 by the CA veritably removed any legal anchorage for, and
effectively mooted, the claim for support pendente lite.

WHEREFORE, the petition for certiorari in G.R. No. 155635 is hereby DISMISSED on the ground of
mootness, while the petition for review in G.R. No. 163979 is hereby DENIED for lack of merit.
Accordingly, the March 25, 2004 Decision and June 4, 2004 Resolution of the CA in CA-G.R. SP No.
68187 are hereby AFFIRMED. Costs against petitioner.

SO ORDERED.

G.R. No. 171914               July 23, 2014

SOLEDAD L. LAVADIA, Petitioner, 
vs.
HEIRS OF JUAN LUCES LUNA, represented by GREGORIO Z. LUNA and EUGENIA
ZABALLERO-LUNA,Respondents.

DECISION

BERSAMIN, J.:

Divorce between Filipinos is void and ineffectual under the nationality rule adopted by Philippine law.
Hence, any settlement of property between the parties of the first marriage involving Filipinos
submitted as an incident of a divorce obtained in a foreign country lacks competent judicial approval,
and cannot be enforceable against the assets of the husband who contracts a subsequent marriage.
 The Case

The petitioner, the second wife of the late Atty. Juan Luces Luna, appeals the adverse decision
promulgated on November 11, 2005,  whereby the Court of Appeals (CA) affirmed with modification
1

the decision rendered on August 27, 2001 by the Regional Trial Court (RTC), Branch 138, in Makati
City.  The CA thereby denied her right in the 25/100 pro indiviso share of the husband in a
2

condominium unit, and in the law books of the husband acquired during the second marriage.

Antecedents

The antecedent facts were summarized by the CA as follows:

ATTY. LUNA, a practicing lawyer, was at first a name partner in the prestigious law firm Sycip,
Salazar, Luna, Manalo, Hernandez & Feliciano Law Offices at that time when he was living with his
first wife, herein intervenor-appellant Eugenia Zaballero-Luna (EUGENIA), whom he initially married
ina civil ceremony conducted by the Justice of the Peace of Parañaque, Rizal on September 10,
1947 and later solemnized in a church ceremony at the Pro-Cathedral in San Miguel, Bulacan on
September 12, 1948. In ATTY. LUNA’s marriage to EUGENIA, they begot seven (7) children,
namely: Regina Maria L. Nadal, Juan Luis Luna, Araceli Victoria L. Arellano, Ana Maria L. Tabunda,
Gregorio Macario Luna, Carolina Linda L. Tapia, and Cesar Antonio Luna. After almost two (2)
decades of marriage, ATTY. LUNA and EUGENIA eventually agreed to live apart from each other in
February 1966 and agreed to separation of property, to which end, they entered into a written
agreement entitled "AGREEMENT FOR SEPARATION AND PROPERTY SETTLEMENT" dated
November 12, 1975, whereby they agreed to live separately and to dissolve and liquidate their
conjugal partnership of property.

On January 12, 1976, ATTY. LUNA obtained a divorce decree of his marriage with EUGENIA from
the Civil and Commercial Chamber of the First Circumscription of the Court of First Instance of Sto.
Domingo, Dominican Republic. Also in Sto.Domingo, Dominican Republic, on the same date, ATTY.
LUNA contracted another marriage, this time with SOLEDAD. Thereafter, ATTY. LUNA and
SOLEDAD returned to the Philippines and lived together as husband and wife until 1987.

Sometime in 1977, ATTY. LUNA organized a new law firm named: Luna, Puruganan, Sison and
Ongkiko (LUPSICON) where ATTY. LUNA was the managing partner.

On February 14, 1978, LUPSICON through ATTY. LUNA purchased from Tandang Sora
Development Corporation the 6th Floor of Kalaw-Ledesma Condominium Project(condominium unit)
at Gamboa St., Makati City, consisting of 517.52 square meters, for ₱1,449,056.00, to be paid on
installment basis for 36months starting on April 15, 1978. Said condominium unit was to be usedas
law office of LUPSICON. After full payment, the Deed of Absolute Sale over the condominium unit
was executed on July 15, 1983, and CCT No. 4779 was issued on August 10, 1983, which was
registered bearing the following names:

"JUAN LUCES LUNA, married to Soledad L. Luna (46/100); MARIO E. ONGKIKO, married to Sonia
P.G. Ongkiko (25/100); GREGORIO R. PURUGANAN, married to Paz A. Puruganan (17/100); and
TERESITA CRUZ SISON, married to Antonio J.M. Sison (12/100) x x x" Subsequently, 8/100 share
of ATTY. LUNA and 17/100 share of Atty. Gregorio R. Puruganan in the condominium unit was sold
to Atty. Mario E. Ongkiko, for which a new CCT No. 21761 was issued on February 7, 1992 in the
following names:

"JUAN LUCES LUNA, married to Soledad L. Luna (38/100); MARIO E. ONGKIKO, married to Sonia
P.G. Ongkiko (50/100); TERESITA CRUZ SISON, married to Antonio J.M. Sison (12/100) x x x"
Sometime in 1992, LUPSICON was dissolved and the condominium unit was partitioned by the
partners but the same was still registered in common under CCT No. 21716. The parties stipulated
that the interest of ATTY. LUNA over the condominium unit would be 25/100 share. ATTY. LUNA
thereafter established and headed another law firm with Atty. Renato G. Dela Cruzand used a
portion of the office condominium unit as their office. The said law firm lasted until the death of
ATTY. JUAN on July 12, 1997.

After the death of ATTY. JUAN, his share in the condominium unit including the lawbooks, office
furniture and equipment found therein were taken over by Gregorio Z. Luna, ATTY. LUNA’s son of
the first marriage. Gregorio Z. Luna thenleased out the 25/100 portion of the condominium unit
belonging to his father to Atty. Renato G. De la Cruz who established his own law firm named
Renato G. De la Cruz & Associates.

The 25/100 pro-indiviso share of ATTY. Luna in the condominium unit as well as the law books,
office furniture and equipment became the subject of the complaint filed by SOLEDAD against the
heirs of ATTY. JUAN with the RTC of Makati City, Branch 138, on September 10, 1999, docketed as
Civil Case No. 99-1644. The complaint alleged that the subject properties were acquired during the
existence of the marriage between ATTY. LUNA and SOLEDAD through their joint efforts that since
they had no children, SOLEDAD became co-owner of the said properties upon the death of ATTY.
LUNA to the extent of ¾ pro-indiviso share consisting of her ½ share in the said properties plus her
½ share in the net estate of ATTY. LUNA which was bequeathed to her in the latter’s last will and
testament; and thatthe heirs of ATTY. LUNA through Gregorio Z. Luna excluded SOLEDAD from her
share in the subject properties. The complaint prayed that SOLEDAD be declared the owner of the
¾ portion of the subject properties;that the same be partitioned; that an accounting of the rentals on
the condominium unit pertaining to the share of SOLEDAD be conducted; that a receiver be
appointed to preserve ad administer the subject properties;and that the heirs of ATTY. LUNA be
ordered to pay attorney’s feesand costs of the suit to SOLEDAD. 3

Ruling of the RTC

On August 27, 2001, the RTC rendered its decision after trial upon the aforementioned
facts,  disposing thusly:
4

WHEREFORE, judgment is rendered as follows:

(a) The 24/100 pro-indiviso share in the condominium unit located at the SIXTH FLOOR of
the KALAW LEDESMA CONDOMINIUM PROJECT covered by Condominium Certificate of
Title No. 21761 consisting of FIVE HUNDRED SEVENTEEN (517/100) SQUARE METERS
is adjudged to have been acquired by Juan Lucas Luna through his sole industry;

(b) Plaintiff has no right as owner or under any other concept over the condominium unit,
hence the entry in Condominium Certificate of Title No. 21761 of the Registry of Deeds of
Makati with respect to the civil status of Juan Luces Luna should be changed from "JUAN
LUCES LUNA married to Soledad L. Luna" to "JUAN LUCES LUNA married to Eugenia
Zaballero Luna";

(c) Plaintiff is declared to be the owner of the books Corpus Juris, Fletcher on Corporation,
American Jurisprudence and Federal Supreme Court Reports found in the condominium unit
and defendants are ordered to deliver them to the plaintiff as soon as appropriate
arrangements have been madefor transport and storage.

No pronouncement as to costs.
SO ORDERED. 5

Decision of the CA

Both parties appealed to the CA. 6

On her part, the petitioner assigned the following errors to the RTC, namely:

I. THE LOWER COURT ERRED IN RULING THAT THE CONDOMINIUM UNIT WAS
ACQUIRED THRU THE SOLE INDUSTRY OF ATTY. JUAN LUCES LUNA;

II. THE LOWER COURT ERRED IN RULING THAT PLAINTIFFAPPELLANT DID NOT
CONTRIBUTE MONEY FOR THE ACQUISITION OF THE CONDOMINIUM UNIT;

III. THE LOWER COURT ERRED IN GIVING CREDENCE TO PORTIONS OF THE

TESTIMONY OF GREGORIO LUNA, WHO HAS NO ACTUAL KNOWLEDGE OF THE
ACQUISITION OF THE UNIT, BUT IGNORED OTHER PORTIONS OF HIS TESTIMONY
FAVORABLE TO THE PLAINTIFF-APPELLANT;

IV. THE LOWER COURT ERRED IN NOT GIVING SIGNIFICANCE TO THE FACT THAT
THE CONJUGAL PARTNERSHIP BETWEEN LUNA AND INTERVENOR-APPELLANT
WAS ALREADY DISSOLVED AND LIQUIDATED PRIOR TO THE UNION OF PLAINTIFF-
APPELLANT AND LUNA;

V. THE LOWER COURT ERRED IN GIVING UNDUE SIGNIFICANCE TO THE ABSENCE

OF THE DISPOSITION OF THE CONDOMINIUM UNIT IN THE HOLOGRAPHIC WILL OF
THE PLAINTIFF-APPELLANT;

VI. THE LOWER COURT ERRED IN GIVING UNDUE SIGNIFICANCE TO THE FACTTHAT
THE NAME OF PLAINTIFF-APPELLANT DID NOT APPEAR IN THE DEED OF ABSOLUTE
SALE EXECUTED BY TANDANG SORA DEVELOPMENT CORPORATION OVER THE
CONDOMINIUM UNIT;

VII. THE LOWER COURT ERRED IN RULING THAT NEITHER ARTICLE 148 OF THE
FAMILYCODE NOR ARTICLE 144 OF THE CIVIL CODE OF THE PHILIPPINES ARE
APPLICABLE;

VIII. THE LOWER COURT ERRED IN NOT RULING THAT THE CAUSE OF ACTION OF
THE INTERVENOR-APPELLANT HAS BEEN BARRED BY PESCRIPTION AND LACHES;
and

IX. THE LOWER COURT ERRED IN NOT EXPUNGING/DISMISSING THE

INTERVENTION FOR FAILURE OF INTERVENOR-APPELLANT TO PAY FILING FEE. 7

In contrast, the respondents attributedthe following errors to the trial court, to wit:

I. THE LOWER COURT ERRED IN HOLDING THAT CERTAIN FOREIGN LAW BOOKS IN
THE LAW OFFICE OF ATTY. LUNA WERE BOUGHT WITH THE USE OF PLAINTIFF’S
MONEY;
 II. THE LOWER COURT ERRED IN HOLDING THAT PLAINTIFF PROVED BY
PREPONDERANCE OF EVIDENCE (HER CLAIM OVER) THE SPECIFIED FOREIGN LAW
BOOKS FOUND IN ATTY. LUNA’S LAW OFFICE; and

III. THE LOWER COURT ERRED IN NOT HOLDING THAT, ASSUMING PLAINTIFF PAID
FOR THE SAID FOREIGN LAW BOOKS, THE RIGHT TO RECOVER THEM HAD
PRESCRIBED AND BARRED BY LACHES AND ESTOPPEL. 8

On November 11, 2005, the CA promulgated its assailed modified decision,  holding and ruling:
9

EUGENIA, the first wife, was the legitimate wife of ATTY. LUNA until the latter’s death on July 12,
1997. The absolute divorce decree obtained by ATTY. LUNA inthe Dominican Republic did not
terminate his prior marriage with EUGENIA because foreign divorce between Filipino citizens is not
recognized in our jurisdiction. x x x10

xxxx

WHEREFORE, premises considered, the assailed August 27, 2001 Decision of the RTC of
MakatiCity, Branch 138, is hereby MODIFIEDas follows:

(a) The 25/100 pro-indiviso share in the condominium unit at the SIXTH FLOOR of the
KALAW LEDESMA CONDOMINIUM PROJECT covered by Condominium Certificate of Title
No. 21761 consisting of FIVE HUNDRED SEVENTEEN (517/100) (sic) SQUARE METERS
is hereby adjudged to defendants-appellants, the heirs of Juan Luces Luna and Eugenia
Zaballero-Luna (first marriage), having been acquired from the sole funds and sole industry
of Juan Luces Luna while marriage of Juan Luces Luna and Eugenia Zaballero-Luna (first
marriage) was still subsisting and valid;

(b) Plaintiff-appellant Soledad Lavadia has no right as owner or under any other concept
over the condominium unit, hence the entry in Condominium Certificate of Title No. 21761 of
the Registry of Deeds ofMakati with respect to the civil status of Juan Luces Luna should be
changed from "JUAN LUCES LUNA married to Soledad L. Luna" to "JUAN LUCES LUNA
married to Eugenia Zaballero Luna";

(c) Defendants-appellants, the heirs of Juan Luces Luna and Eugenia Zaballero-Luna(first
marriage) are hereby declared to be the owner of the books Corpus Juris, Fletcher on
Corporation, American Jurisprudence and Federal Supreme Court Reports found in the
condominium unit.

No pronouncement as to costs.

SO ORDERED. 11

On March 13, 2006,  the CA denied the petitioner’s motion for reconsideration.
12 13

Issues

In this appeal, the petitioner avers in her petition for review on certiorarithat:
 A. The Honorable Court of Appeals erred in ruling that the Agreement for Separation and
Property Settlement executed by Luna and Respondent Eugenia was unenforceable; hence,
their conjugal partnership was not dissolved and liquidated;

B. The Honorable Court of Appeals erred in not recognizing the Dominican Republic court’s
approval of the Agreement;

C. The Honorable Court of Appeals erred in ruling that Petitioner failed to adduce sufficient
proof of actual contribution to the acquisition of purchase of the subjectcondominium unit;
and

D. The Honorable Court of Appeals erred in ruling that Petitioner was not entitled to the
subject law books. 14

The decisive question to be resolved is who among the contending parties should be entitled to the
25/100 pro indivisoshare in the condominium unit; and to the law books (i.e., Corpus Juris, Fletcher
on Corporation, American Jurisprudence and Federal Supreme Court Reports).

The resolution of the decisive question requires the Court to ascertain the law that should determine,
firstly, whether the divorce between Atty. Luna and Eugenia Zaballero-Luna (Eugenia) had validly
dissolved the first marriage; and, secondly, whether the second marriage entered into by the late
Atty. Luna and the petitioner entitled the latter to any rights in property. Ruling of the Court

We affirm the modified decision of the CA.

1. Atty. Luna’s first marriage with Eugenia

subsisted up to the time of his death

The first marriage between Atty. Luna and Eugenia, both Filipinos, was solemnized in the Philippines
on September 10, 1947. The law in force at the time of the solemnization was the Spanish Civil
Code, which adopted the nationality rule. The Civil Codecontinued to follow the nationality rule, to
the effect that Philippine laws relating to family rights and duties, or to the status, condition and legal
capacity of persons were binding upon citizens of the Philippines, although living abroad.  Pursuant
15

to the nationality rule, Philippine laws governed thiscase by virtue of bothAtty. Luna and Eugenio
having remained Filipinos until the death of Atty. Luna on July 12, 1997 terminated their marriage.

From the time of the celebration ofthe first marriage on September 10, 1947 until the present,
absolute divorce between Filipino spouses has not been recognized in the Philippines. The non-
recognition of absolute divorce between Filipinos has remained even under the Family Code,  even 16

if either or both of the spouses are residing abroad.  Indeed, the only two types of defective marital
17

unions under our laws have beenthe void and the voidable marriages. As such, the remedies against
such defective marriages have been limited to the declaration of nullity ofthe marriage and the
annulment of the marriage.

It is true that on January 12, 1976, the Court of First Instance (CFI) of Sto. Domingo in the
Dominican Republic issued the Divorce Decree dissolving the first marriage of Atty. Luna and
Eugenia.  Conformably with the nationality rule, however, the divorce, even if voluntarily obtained
18

abroad, did not dissolve the marriage between Atty. Luna and Eugenia, which subsisted up to the
time of his death on July 12, 1997. This finding conforms to the Constitution, which characterizes
marriage as an inviolable social institution,  and regards it as a special contract of permanent union
19

between a man and a woman for the establishment of a conjugal and family life.  The non-
20
recognition of absolute divorce in the Philippines is a manifestation of the respect for the sanctity of
the marital union especially among Filipino citizens. It affirms that the extinguishment of a valid
marriage must be grounded only upon the death of either spouse, or upon a ground expressly
provided bylaw. For as long as this public policy on marriage between Filipinos exists, no divorce
decree dissolving the marriage between them can ever be given legal or judicial recognition and
enforcement in this jurisdiction.

2. The Agreement for Separation and Property Settlement

was void for lack of court approval

The petitioner insists that the Agreement for Separation and Property Settlement (Agreement) that
the late Atty. Luna and Eugenia had entered into and executed in connection with the divorce
proceedings before the CFI of Sto. Domingo in the Dominican Republic to dissolve and liquidate
their conjugal partnership was enforceable against Eugenia. Hence, the CA committed reversible
error in decreeing otherwise.

The insistence of the petitioner was unwarranted.

Considering that Atty. Luna and Eugenia had not entered into any marriage settlement prior to their
marriage on September 10, 1947, the system of relative community or conjugal partnership of gains
governed their property relations. This is because the Spanish Civil Code, the law then in force at
the time of their marriage, did not specify the property regime of the spouses in the event that they
had not entered into any marriage settlement before or at the time of the marriage. Article 119 of the
Civil Codeclearly so provides, to wit:

Article 119. The future spouses may in the marriage settlements agree upon absolute or relative
community of property, or upon complete separation of property, or upon any other regime. In the
absence of marriage settlements, or when the same are void, the system of relative community or
conjugal partnership of gains as established in this Code, shall govern the property relations
between husband and wife.

Article 142 of the Civil Codehas defined a conjugal partnership of gains thusly:

Article 142. By means of the conjugal partnership of gains the husband and wife place in a common
fund the fruits of their separate property and the income from their work or industry, and divide
equally, upon the dissolution of the marriage or of the partnership, the net gains or benefits obtained
indiscriminately by either spouse during the marriage.

The conjugal partnership of gains subsists until terminated for any of various causes of termination
enumerated in Article 175 of the Civil Code, viz:

Article 175. The conjugal partnership of gains terminates:

(1) Upon the death of either spouse;

(2) When there is a decree of legal separation;

(3) When the marriage is annulled;

(4) In case of judicial separation of property under Article 191.

The mere execution of the Agreement by Atty. Luna and Eugenia did not per sedissolve and
liquidate their conjugal partnership of gains. The approval of the Agreement by a competent court
was still required under Article 190 and Article 191 of the Civil Code, as follows:

Article 190. In the absence of an express declaration in the marriage settlements, the separation of
property between spouses during the marriage shall not take place save in virtue of a judicial order.
(1432a)

Article 191. The husband or the wife may ask for the separation of property, and it shall be decreed
when the spouse of the petitioner has been sentenced to a penalty which carries with it civil
interdiction, or has been declared absent, or when legal separation has been granted.

xxxx

The husband and the wife may agree upon the dissolution of the conjugal partnership during the
marriage, subject to judicial approval. All the creditors of the husband and of the wife, as well as of
the conjugal partnership shall be notified of any petition for judicialapproval or the voluntary
dissolution of the conjugal partnership, so that any such creditors may appear atthe hearing to
safeguard his interests. Upon approval of the petition for dissolution of the conjugal partnership, the
court shall take such measures as may protect the creditors and other third persons.

After dissolution of the conjugal partnership, the provisions of articles 214 and 215 shall apply. The
provisions of this Code concerning the effect of partition stated in articles 498 to 501 shall be
applicable. (1433a)

But was not the approval of the Agreement by the CFI of Sto. Domingo in the Dominican Republic
sufficient in dissolving and liquidating the conjugal partnership of gains between the late Atty. Luna
and Eugenia?

The query is answered in the negative. There is no question that the approval took place only as an
incident ofthe action for divorce instituted by Atty. Luna and Eugenia, for, indeed, the justifications for
their execution of the Agreement were identical to the grounds raised in the action for divorce.  With
21

the divorce not being itself valid and enforceable under Philippine law for being contrary to Philippine
public policy and public law, the approval of the Agreement was not also legally valid and
enforceable under Philippine law. Consequently, the conjugal partnership of gains of Atty. Luna and
Eugenia subsisted in the lifetime of their marriage.

3. Atty. Luna’s marriage with Soledad, being bigamous,

was void; properties acquired during their marriage
were governed by the rules on co-ownership

What law governed the property relations of the second marriage between Atty. Luna and Soledad?

The CA expressly declared that Atty. Luna’s subsequent marriage to Soledad on January 12, 1976
was void for being bigamous,  on the ground that the marriage between Atty. Luna and Eugenia had
22

not been dissolved by the Divorce Decree rendered by the CFI of Sto. Domingo in the Dominican
Republic but had subsisted until the death of Atty. Luna on July 12, 1997.

The Court concurs with the CA.

In the Philippines, marriages that are bigamous, polygamous, or incestuous are void. Article 71 of
the Civil Codeclearly states:

Article 71. All marriages performed outside the Philippines in accordance with the laws in force in the
country where they were performed, and valid there as such, shall also be valid in this country,
except bigamous, polygamous, or incestuous marriages as determined by Philippine law.

Bigamy is an illegal marriage committed by contracting a second or subsequent marriage before the
first marriage has been legally dissolved, or before the absent spouse has been declared
presumptively dead by means of a judgment rendered in the proper proceedings.  A bigamous
23

marriage is considered void ab initio.24

Due to the second marriage between Atty. Luna and the petitioner being void ab initioby virtue of its
being bigamous, the properties acquired during the bigamous marriage were governed by the rules
on co-ownership, conformably with Article 144 of the Civil Code, viz:

Article 144. When a man and a woman live together as husband and wife, but they are not married,
ortheir marriage is void from the beginning, the property acquired by eitheror both of them through
their work or industry or their wages and salaries shall be governed by the rules on co-ownership.(n)

In such a situation, whoever alleges co-ownership carried the burden of proof to confirm such
fact.  To establish co-ownership, therefore, it became imperative for the petitioner to offer proof of
1âwphi1

her actual contributions in the acquisition of property. Her mere allegation of co-ownership, without
sufficient and competent evidence, would warrant no relief in her favor. As the Court explained in
Saguid v. Court of Appeals: 25

In the cases of Agapay v. Palang, and Tumlos v. Fernandez, which involved the issue of co-
ownership ofproperties acquired by the parties to a bigamous marriage and an adulterous
relationship, respectively, we ruled that proof of actual contribution in the acquisition of the property
is essential. The claim of co-ownership of the petitioners therein who were parties to the bigamous
and adulterousunion is without basis because they failed to substantiate their allegation that they
contributed money in the purchase of the disputed properties. Also in Adriano v. Court of Appeals,
we ruled that the fact that the controverted property was titled in the name of the parties to an
adulterous relationship is not sufficient proof of coownership absent evidence of actual contribution
in the acquisition of the property.

As in other civil cases, the burden of proof rests upon the party who, as determined by the pleadings
or the nature of the case, asserts an affirmative issue. Contentions must be proved by competent
evidence and reliance must be had on the strength of the party’s own evidence and not upon the
weakness of the opponent’s defense. This applies with more vigor where, as in the instant case, the
plaintiff was allowed to present evidence ex parte.  The plaintiff is not automatically entitled to the
1âwphi1

relief prayed for. The law gives the defendantsome measure of protection as the plaintiff must still
prove the allegations in the complaint. Favorable relief can be granted only after the court
isconvinced that the facts proven by the plaintiff warrant such relief. Indeed, the party alleging a fact
has the burden of proving it and a mereallegation is not evidence. 26

The petitioner asserts herein that she sufficiently proved her actual contributions in the purchase of
the condominium unit in the aggregate amount of at least ₱306,572.00, consisting in direct
contributions of ₱159,072.00, and in repaying the loans Atty. Luna had obtained from Premex
Financing and Banco Filipino totaling ₱146,825.30;  and that such aggregate contributions of
27

₱306,572.00 corresponded to almost the entire share of Atty. Luna in the purchase of the
condominium unit amounting to ₱362,264.00 of the unit’s purchase price of ₱1,449,056.00.  The 28
petitioner further asserts that the lawbooks were paid for solely out of her personal funds, proof of
which Atty. Luna had even sent her a "thank you" note;  that she had the financial capacity to make
29

the contributions and purchases; and that Atty. Luna could not acquire the properties on his own due
to the meagerness of the income derived from his law practice.

Did the petitioner discharge her burden of proof on the co-ownership?

In resolving the question, the CA entirely debunked the petitioner’s assertions on her actual
contributions through the following findings and conclusions, namely:

SOLEDAD was not able to prove by preponderance of evidence that her own independent funds
were used to buy the law office condominium and the law books subject matter in contentionin this
case – proof that was required for Article 144 of the New Civil Code and Article 148 of the Family
Code to apply – as to cases where properties were acquired by a man and a woman living together
as husband and wife but not married, or under a marriage which was void ab initio. Under Article 144
of the New Civil Code, the rules on co-ownership would govern. But this was not readily applicable
to many situations and thus it created a void at first because it applied only if the parties were not in
any way incapacitated or were without impediment to marry each other (for it would be absurd to
create a co-ownership where there still exists a prior conjugal partnership or absolute community
between the man and his lawful wife). This void was filled upon adoption of the Family Code. Article
148 provided that: only the property acquired by both of the parties through their actual joint
contribution of money, property or industry shall be owned in common and in proportion to their
respective contributions. Such contributions and corresponding shares were prima faciepresumed to
be equal. However, for this presumption to arise, proof of actual contribution was required. The
same rule and presumption was to apply to joint deposits of money and evidence of credit. If one of
the parties was validly married to another, his or her share in the co-ownership accrued to the
absolute community or conjugal partnership existing in such valid marriage. If the party who acted in
bad faith was not validly married to another, his or her share shall be forfeited in the manner
provided in the last paragraph of the Article 147. The rules on forfeiture applied even if both parties
were in bad faith. Co-ownership was the exception while conjugal partnership of gains was the strict
rule whereby marriage was an inviolable social institution and divorce decrees are not recognized in
the Philippines, as was held by the Supreme Court in the case of Tenchavez vs. Escaño, G.R. No.
L-19671, November 29, 1965, 15 SCRA 355, thus:

xxxx

As to the 25/100pro-indivisoshare of ATTY. LUNA in the condominium unit, SOLEDAD failed to

prove that she made an actual contribution to purchase the said property. She failed to establish that
the four (4) checks that she presented were indeed used for the acquisition of the share of ATTY.
LUNA in the condominium unit. This was aptly explained in the Decision of the trial court, viz.:

"x x x The first check, Exhibit "M" for ₱55,000.00 payable to Atty. Teresita Cruz Sison was issued on
January 27, 1977, which was thirteen (13) months before the Memorandum of Agreement, Exhibit
"7" was signed. Another check issued on April 29, 1978 in the amount of ₱97,588.89, Exhibit "P"
was payable to Banco Filipino. According to the plaintiff, thiswas in payment of the loan of Atty.
Luna. The third check which was for ₱49,236.00 payable to PREMEX was dated May 19, 1979, also
for payment of the loan of Atty. Luna. The fourth check, Exhibit "M", for ₱4,072.00 was dated
December 17, 1980. None of the foregoing prove that the amounts delivered by plaintiff to the
payees were for the acquisition of the subject condominium unit. The connection was simply not
established. x x x"
SOLEDAD’s claim that she made a cash contribution of ₱100,000.00 is unsubstantiated. Clearly,
there is no basis for SOLEDAD’s claim of co-ownership over the 25/100 portion of the condominium
unit and the trial court correctly found that the same was acquired through the sole industry of ATTY.
LUNA, thus:

"The Deed of Absolute Sale, Exhibit "9", covering the condominium unit was in the name of Atty.
Luna, together with his partners in the law firm. The name of the plaintiff does not appear as vendee
or as the spouse of Atty. Luna. The same was acquired for the use of the Law firm of Atty. Luna. The
loans from Allied Banking Corporation and Far East Bank and Trust Company were loans of Atty.
Luna and his partners and plaintiff does not have evidence to show that she paid for them fully or
partially. x x x"

The fact that CCT No. 4779 and subsequently, CCT No. 21761 were in the name of "JUAN LUCES
LUNA, married to Soledad L. Luna" was no proof that SOLEDAD was a co-owner of the
condominium unit. Acquisition of title and registration thereof are two different acts. It is well settled
that registration does not confer title but merely confirms one already existing. The phrase "married
to" preceding "Soledad L. Luna" is merely descriptive of the civil status of ATTY. LUNA.

SOLEDAD, the second wife, was not even a lawyer. So it is but logical that SOLEDAD had no
participation in the law firm or in the purchase of books for the law firm. SOLEDAD failed to prove
that she had anything to contribute and that she actually purchased or paid for the law office
amortization and for the law books. It is more logical to presume that it was ATTY. LUNA who
bought the law office space and the law books from his earnings from his practice of law rather than
embarrassingly beg or ask from SOLEDAD money for use of the law firm that he headed. 30

The Court upholds the foregoing findings and conclusions by the CA both because they were
substantiated by the records and because we have not been shown any reason to revisit and undo
them. Indeed, the petitioner, as the party claiming the co-ownership, did not discharge her burden of
proof. Her mere allegations on her contributions, not being evidence,  did not serve the purpose. In
31

contrast, given the subsistence of the first marriage between Atty. Luna and Eugenia, the
presumption that Atty. Luna acquired the properties out of his own personal funds and effort
remained. It should then be justly concluded that the properties in litislegally pertained to their
conjugal partnership of gains as of the time of his death. Consequently, the sole ownership of the
25/100 pro indivisoshare of Atty. Luna in the condominium unit, and of the lawbooks pertained to the
respondents as the lawful heirs of Atty. Luna.

WHEREFORE, the Court AFFIRMS the decision promulgated on November 11, 2005; and ORDERS
the petitioner to pay the costs of suit.

SO ORDERED.