Republic of the Philippines

SUPREME COURT
Manila

EN BANC

G.R. No. L-19650             September 29, 1966

CALTEX (PHILIPPINES), INC., petitioner-appellee, 

vs.
ENRICO PALOMAR, in his capacity as THE POSTMASTER GENERAL, respondent-appellant.

Office of the Solicitor General for respondent and appellant.

Ross, Selph and Carrascoso for petitioner and appellee.

CASTRO, J.:

In the year 1960 the Caltex (Philippines) Inc. (hereinafter referred to as Caltex) conceived and laid
the groundwork for a promotional scheme calculated to drum up patronage for its oil products.
Denominated "Caltex Hooded Pump Contest", it calls for participants therein to estimate the actual
number of liters a hooded gas pump at each Caltex station will dispense during a specified period.
Employees of the Caltex (Philippines) Inc., its dealers and its advertising agency, and their
immediate families excepted, participation is to be open indiscriminately to all "motor vehicle owners
and/or licensed drivers". For the privilege to participate, no fee or consideration is required to be
paid, no purchase of Caltex products required to be made. Entry forms are to be made available
upon request at each Caltex station where a sealed can will be provided for the deposit of
accomplished entry stubs.

A three-staged winner selection system is envisioned. At the station level, called "Dealer Contest",
the contestant whose estimate is closest to the actual number of liters dispensed by the hooded
pump thereat is to be awarded the first prize; the next closest, the second; and the next, the third.
Prizes at this level consist of a 3-burner kerosene stove for first; a thermos bottle and a Ray-O-Vac
hunter lantern for second; and an Everready Magnet-lite flashlight with batteries and a screwdriver
set for third. The first-prize winner in each station will then be qualified to join in the "Regional
Contest" in seven different regions. The winning stubs of the qualified contestants in each region will
be deposited in a sealed can from which the first-prize, second-prize and third-prize winners of that
region will be drawn. The regional first-prize winners will be entitled to make a three-day all-
expenses-paid round trip to Manila, accompanied by their respective Caltex dealers, in order to take
part in the "National Contest". The regional second-prize and third-prize winners will receive cash
prizes of P500 and P300, respectively. At the national level, the stubs of the seven regional first-
prize winners will be placed inside a sealed can from which the drawing for the final first-prize,
second-prize and third-prize winners will be made. Cash prizes in store for winners at this final stage
are: P3,000 for first; P2,000 for second; Pl,500 for third; and P650 as consolation prize for each of
the remaining four participants.

Foreseeing the extensive use of the mails not only as amongst the media for publicizing the contest
but also for the transmission of communications relative thereto, representations were made by
Caltex with the postal authorities for the contest to be cleared in advance for mailing, having in view
sections 1954(a), 1982 and 1983 of the Revised Administrative Code, the pertinent provisions of
which read as follows:

SECTION 1954. Absolutely non-mailable matter. — No matter belonging to any of the

following classes, whether sealed as first-class matter or not, shall be imported into the
Philippines through the mails, or to be deposited in or carried by the mails of the Philippines,
or be delivered to its addressee by any officer or employee of the Bureau of Posts:

Written or printed matter in any form advertising, describing, or in any manner pertaining to,
or conveying or purporting to convey any information concerning any lottery, gift enterprise,
or similar scheme depending in whole or in part upon lot or chance, or any scheme, device,
or enterprise for obtaining any money or property of any kind by means of false or fraudulent
pretenses, representations, or promises.

"SECTION 1982. Fraud orders.—Upon satisfactory evidence that any person or company is

engaged in conducting any lottery, gift enterprise, or scheme for the distribution of money, or
of any real or personal property by lot, chance, or drawing of any kind, or that any person or
company is conducting any scheme, device, or enterprise for obtaining money or property of
any kind through the mails by means of false or fraudulent pretenses, representations, or
promises, the Director of Posts may instruct any postmaster or other officer or employee of
the Bureau to return to the person, depositing the same in the mails, with the word
"fraudulent" plainly written or stamped upon the outside cover thereof, any mail matter of
whatever class mailed by or addressed to such person or company or the representative or
agent of such person or company.

SECTION 1983. Deprivation of use of money order system and telegraphic transfer service.
—The Director of Posts may, upon evidence satisfactory to him that any person or company
is engaged in conducting any lottery, gift enterprise or scheme for the distribution of money,
or of any real or personal property by lot, chance, or drawing of any kind, or that any person
or company is conducting any scheme, device, or enterprise for obtaining money or property
of any kind through the mails by means of false or fraudulent pretenses, representations, or
promise, forbid the issue or payment by any postmaster of any postal money order or
telegraphic transfer to said person or company or to the agent of any such person or
company, whether such agent is acting as an individual or as a firm, bank, corporation, or
association of any kind, and may provide by regulation for the return to the remitters of the
sums named in money orders or telegraphic transfers drawn in favor of such person or
company or its agent.

The overtures were later formalized in a letter to the Postmaster General, dated October 31, 1960, in
which the Caltex, thru counsel, enclosed a copy of the contest rules and endeavored to justify its
position that the contest does not violate the anti-lottery provisions of the Postal Law. Unimpressed,
the then Acting Postmaster General opined that the scheme falls within the purview of the provisions
aforesaid and declined to grant the requested clearance. In its counsel's letter of December 7, 1960,
Caltex sought a reconsideration of the foregoing stand, stressing that there being involved no
consideration in the part of any contestant, the contest was not, under controlling authorities,
condemnable as a lottery. Relying, however, on an opinion rendered by the Secretary of Justice on
an unrelated case seven years before (Opinion 217, Series of 1953), the Postmaster General
maintained his view that the contest involves consideration, or that, if it does not, it is nevertheless a
"gift enterprise" which is equally banned by the Postal Law, and in his letter of December 10, 1960
not only denied the use of the mails for purposes of the proposed contest but as well threatened that
if the contest was conducted, "a fraud order will have to be issued against it (Caltex) and all its
representatives".
Caltex thereupon invoked judicial intervention by filing the present petition for declaratory relief
against Postmaster General Enrico Palomar, praying "that judgment be rendered declaring its
'Caltex Hooded Pump Contest' not to be violative of the Postal Law, and ordering respondent to
allow petitioner the use of the mails to bring the contest to the attention of the public". After issues
were joined and upon the respective memoranda of the parties, the trial court rendered judgment as
follows:

In view of the foregoing considerations, the Court holds that the proposed 'Caltex Hooded
Pump Contest' announced to be conducted by the petitioner under the rules marked as
Annex B of the petitioner does not violate the Postal Law and the respondent has no right to
bar the public distribution of said rules by the mails.

The respondent appealed.

The parties are now before us, arrayed against each other upon two basic issues: first, whether the
petition states a sufficient cause of action for declaratory relief; and second, whether the proposed
"Caltex Hooded Pump Contest" violates the Postal Law. We shall take these up in seriatim.

1. By express mandate of section 1 of Rule 66 of the old Rules of Court, which was the applicable
legal basis for the remedy at the time it was invoked, declaratory relief is available to any person
"whose rights are affected by a statute . . . to determine any question of construction or validity
arising under the . . . statute and for a declaration of his rights thereunder" (now section 1, Rule 64,
Revised Rules of Court). In amplification, this Court, conformably to established jurisprudence on the
matter, laid down certain conditions sine qua non therefor, to wit: (1) there must be a justiciable
controversy; (2) the controversy must be between persons whose interests are adverse; (3) the party
seeking declaratory relief must have a legal interest in the controversy; and (4) the issue involved
must be ripe for judicial determination (Tolentino vs. The Board of Accountancy, et al., G.R. No. L-
3062, September 28, 1951; Delumen, et al. vs. Republic of the Philippines, 50 O.G., No. 2, pp. 576,
578-579; Edades vs. Edades, et al., G.R. No. L-8964, July 31, 1956). The gravamen of the
appellant's stand being that the petition herein states no sufficient cause of action for declaratory
relief, our duty is to assay the factual bases thereof upon the foregoing crucible.

As we look in retrospect at the incidents that generated the present controversy, a number of
significant points stand out in bold relief. The appellee (Caltex), as a business enterprise of some
consequence, concededly has the unquestioned right to exploit every legitimate means, and to avail
of all appropriate media to advertise and stimulate increased patronage for its products. In contrast,
the appellant, as the authority charged with the enforcement of the Postal Law, admittedly has the
power and the duty to suppress transgressions thereof — particularly thru the issuance of fraud
orders, under Sections 1982 and 1983 of the Revised Administrative Code, against legally non-
mailable schemes. Obviously pursuing its right aforesaid, the appellee laid out plans for the sales
promotion scheme hereinbefore detailed. To forestall possible difficulties in the dissemination of
information thereon thru the mails, amongst other media, it was found expedient to request the
appellant for an advance clearance therefor. However, likewise by virtue of his jurisdiction in the
premises and construing the pertinent provisions of the Postal Law, the appellant saw a violation
thereof in the proposed scheme and accordingly declined the request. A point of difference as to the
correct construction to be given to the applicable statute was thus reached. Communications in
which the parties expounded on their respective theories were exchanged. The confidence with
which the appellee insisted upon its position was matched only by the obstinacy with which the
appellant stood his ground. And this impasse was climaxed by the appellant's open warning to the
appellee that if the proposed contest was "conducted, a fraud order will have to be issued against it
and all its representatives."
Against this backdrop, the stage was indeed set for the remedy prayed for. The appellee's insistent
assertion of its claim to the use of the mails for its proposed contest, and the challenge thereto and
consequent denial by the appellant of the privilege demanded, undoubtedly spawned a live
controversy. The justiciability of the dispute cannot be gainsaid. There is an active antagonistic
assertion of a legal right on one side and a denial thereof on the other, concerning a real — not a
mere theoretical — question or issue. The contenders are as real as their interests are substantial.
To the appellee, the uncertainty occasioned by the divergence of views on the issue of construction
hampers or disturbs its freedom to enhance its business. To the appellant, the suppression of the
appellee's proposed contest believed to transgress a law he has sworn to uphold and enforce is an
unavoidable duty. With the appellee's bent to hold the contest and the appellant's threat to issue a
fraud order therefor if carried out, the contenders are confronted by the ominous shadow of an
imminent and inevitable litigation unless their differences are settled and stabilized by a tranquilizing
declaration (Pablo y Sen, et al. vs. Republic of the Philippines, G.R. No. L-6868, April 30, 1955).
And, contrary to the insinuation of the appellant, the time is long past when it can rightly be said that
merely the appellee's "desires are thwarted by its own doubts, or by the fears of others" — which
admittedly does not confer a cause of action. Doubt, if any there was, has ripened into a justiciable
controversy when, as in the case at bar, it was translated into a positive claim of right which is
actually contested (III Moran, Comments on the Rules of Court, 1963 ed., pp. 132-133, citing:
Woodward vs. Fox West Coast Theaters, 36 Ariz., 251, 284 Pac. 350).

We cannot hospitably entertain the appellant's pretense that there is here no question of
construction because the said appellant "simply applied the clear provisions of the law to a given set
of facts as embodied in the rules of the contest", hence, there is no room for declaratory relief. The
infirmity of this pose lies in the fact that it proceeds from the assumption that, if the circumstances
here presented, the construction of the legal provisions can be divorced from the matter of their
application to the appellee's contest. This is not feasible. Construction, verily, is the art or process of
discovering and expounding the meaning and intention of the authors of the law with respect to its
application to a given case, where that intention is rendered doubtful, amongst others, by reason of
the fact that the given case is not explicitly provided for in the law (Black, Interpretation of Laws, p.
1). This is precisely the case here. Whether or not the scheme proposed by the appellee is within the
coverage of the prohibitive provisions of the Postal Law inescapably requires an inquiry into the
intended meaning of the words used therein. To our mind, this is as much a question of construction
or interpretation as any other.

Nor is it accurate to say, as the appellant intimates, that a pronouncement on the matter at hand can
amount to nothing more than an advisory opinion the handing down of which is anathema to a
declaratory relief action. Of course, no breach of the Postal Law has as yet been committed. Yet, the
disagreement over the construction thereof is no longer nebulous or contingent. It has taken a fixed
and final shape, presenting clearly defined legal issues susceptible of immediate resolution. With the
battle lines drawn, in a manner of speaking, the propriety — nay, the necessity — of setting the
dispute at rest before it accumulates the asperity distemper, animosity, passion and violence of a
full-blown battle which looms ahead (III Moran, Comments on the Rules of Court, 1963 ed., p. 132
and cases cited), cannot but be conceded. Paraphrasing the language in Zeitlin vs. Arnebergh 59
Cal., 2d., 901, 31 Cal. Rptr., 800, 383 P. 2d., 152, cited in 22 Am. Jur., 2d., p. 869, to deny
declaratory relief to the appellee in the situation into which it has been cast, would be to force it to
choose between undesirable alternatives. If it cannot obtain a final and definitive pronouncement as
to whether the anti-lottery provisions of the Postal Law apply to its proposed contest, it would be
faced with these choices: If it launches the contest and uses the mails for purposes thereof, it not
only incurs the risk, but is also actually threatened with the certain imposition, of a fraud order with
its concomitant stigma which may attach even if the appellee will eventually be vindicated; if it
abandons the contest, it becomes a self-appointed censor, or permits the appellant to put into effect
a virtual fiat of previous censorship which is constitutionally unwarranted. As we weigh these
considerations in one equation and in the spirit of liberality with which the Rules of Court are to be
interpreted in order to promote their object (section 1, Rule 1, Revised Rules of Court) — which, in
the instant case, is to settle, and afford relief from uncertainty and insecurity with respect to, rights
and duties under a law — we can see in the present case any imposition upon our jurisdiction or any
futility or prematurity in our intervention.

The appellant, we apprehend, underrates the force and binding effect of the ruling we hand down in
this case if he believes that it will not have the final and pacifying function that a declaratory
judgment is calculated to subserve. At the very least, the appellant will be bound. But more than this,
he obviously overlooks that in this jurisdiction, "Judicial decisions applying or interpreting the law
shall form a part of the legal system" (Article 8, Civil Code of the Philippines). In effect, judicial
decisions assume the same authority as the statute itself and, until authoritatively abandoned,
necessarily become, to the extent that they are applicable, the criteria which must control the
actuations not only of those called upon to abide thereby but also of those in duty bound to enforce
obedience thereto. Accordingly, we entertain no misgivings that our resolution of this case will
terminate the controversy at hand.

It is not amiss to point out at this juncture that the conclusion we have herein just reached is not
without precedent. In Liberty Calendar Co. vs. Cohen, 19 N.J., 399, 117 A. 2d., 487, where a
corporation engaged in promotional advertising was advised by the county prosecutor that its
proposed sales promotion plan had the characteristics of a lottery, and that if such sales promotion
were conducted, the corporation would be subject to criminal prosecution, it was held that the
corporation was entitled to maintain a declaratory relief action against the county prosecutor to
determine the legality of its sales promotion plan. In pari materia, see also: Bunis vs. Conway, 17
App. Div. 2d., 207, 234 N.Y.S. 2d., 435; Zeitlin vs. Arnebergh, supra; Thrillo, Inc. vs. Scott, 15 N.J.
Super. 124, 82 A. 2d., 903.

In fine, we hold that the appellee has made out a case for declaratory relief.

2. The Postal Law, chapter 52 of the Revised Administrative Code, using almost identical
terminology in sections 1954(a), 1982 and 1983 thereof, supra, condemns as absolutely non-
mailable, and empowers the Postmaster General to issue fraud orders against, or otherwise deny
the use of the facilities of the postal service to, any information concerning "any lottery, gift
enterprise, or scheme for the distribution of money, or of any real or personal property by lot,
chance, or drawing of any kind". Upon these words hinges the resolution of the second issue posed
in this appeal.

Happily, this is not an altogether untrodden judicial path. As early as in 1922, in "El Debate", Inc. vs.
Topacio, 44 Phil., 278, 283-284, which significantly dwelt on the power of the postal authorities
under the abovementioned provisions of the Postal Law, this Court declared that —

While countless definitions of lottery have been attempted, the authoritative one for this
jurisdiction is that of the United States Supreme Court, in analogous cases having to do with
the power of the United States Postmaster General, viz.: The term "lottery" extends to all
schemes for the distribution of prizes by chance, such as policy playing, gift exhibitions, prize
concerts, raffles at fairs, etc., and various forms of gambling. The three essential elements of
a lottery are: First, consideration; second, prize; and third, chance. (Horner vs. States [1892],
147 U.S. 449; Public Clearing House vs. Coyne [1903], 194 U.S., 497; U.S. vs. Filart and
Singson [1915], 30 Phil., 80; U.S. vs. Olsen and Marker [1917], 36 Phil., 395; U.S. vs. Baguio
[1919], 39 Phil., 962; Valhalla Hotel Construction Company vs. Carmona, p. 233, ante.)

Unanimity there is in all quarters, and we agree, that the elements of prize and chance are too
obvious in the disputed scheme to be the subject of contention. Consequently as the appellant
himself concedes, the field of inquiry is narrowed down to the existence of the element of
consideration therein. Respecting this matter, our task is considerably lightened inasmuch as in the
same case just cited, this Court has laid down a definitive yard-stick in the following terms —

In respect to the last element of consideration, the law does not condemn the gratuitous
distribution of property by chance, if no consideration is derived directly or indirectly from the
party receiving the chance, but does condemn as criminal schemes in which a valuable
consideration of some kind is paid directly or indirectly for the chance to draw a prize.

Reverting to the rules of the proposed contest, we are struck by the clarity of the language in which
the invitation to participate therein is couched. Thus —

No puzzles, no rhymes? You don't need wrappers, labels or boxtops? You don't have to buy
anything? Simply estimate the actual number of liter the Caltex gas pump with the hood at
your favorite Caltex dealer will dispense from — to —, and win valuable prizes . . . ." .

Nowhere in the said rules is any requirement that any fee be paid, any merchandise be bought, any
service be rendered, or any value whatsoever be given for the privilege to participate. A prospective
contestant has but to go to a Caltex station, request for the entry form which is available on demand,
and accomplish and submit the same for the drawing of the winner. Viewed from all angles or turned
inside out, the contest fails to exhibit any discernible consideration which would brand it as a lottery.
Indeed, even as we head the stern injunction, "look beyond the fair exterior, to the substance, in
order to unmask the real element and pernicious tendencies which the law is seeking to prevent" ("El
Debate", Inc. vs. Topacio, supra, p. 291), we find none. In our appraisal, the scheme does not only
appear to be, but actually is, a gratuitous distribution of property by chance.

There is no point to the appellant's insistence that non-Caltex customers who may buy Caltex
products simply to win a prize would actually be indirectly paying a consideration for the privilege to
join the contest. Perhaps this would be tenable if the purchase of any Caltex product or the use of
any Caltex service were a pre-requisite to participation. But it is not. A contestant, it hardly needs
reiterating, does not have to buy anything or to give anything of value. 1awphîl.nèt

Off-tangent, too, is the suggestion that the scheme, being admittedly for sales promotion, would
naturally benefit the sponsor in the way of increased patronage by those who will be encouraged to
prefer Caltex products "if only to get the chance to draw a prize by securing entry blanks". The
required element of consideration does not consist of the benefit derived by the proponent of the
contest. The true test, as laid down in People vs. Cardas, 28 P. 2d., 99, 137 Cal. App. (Supp.) 788,
is whether the participant pays a valuable consideration for the chance, and not whether those
conducting the enterprise receive something of value in return for the distribution of the prize.
Perspective properly oriented, the standpoint of the contestant is all that matters, not that of the
sponsor. The following, culled from Corpus Juris Secundum, should set the matter at rest:

The fact that the holder of the drawing expects thereby to receive, or in fact does receive,
some benefit in the way of patronage or otherwise, as a result of the drawing; does not
supply the element of consideration. Griffith Amusement Co. vs. Morgan, Tex. Civ. App., 98
S.W., 2d., 844" (54 C.J.S., p. 849).

Thus enlightened, we join the trial court in declaring that the "Caltex Hooded Pump Contest"
proposed by the appellee is not a lottery that may be administratively and adversely dealt with under
the Postal Law.
But it may be asked: Is it not at least a "gift enterprise, or scheme for the distribution of money, or of
any real or personal property by lot, chance, or drawing of any kind", which is equally prescribed?
Incidentally, while the appellant's brief appears to have concentrated on the issue of consideration,
this aspect of the case cannot be avoided if the remedy here invoked is to achieve its tranquilizing
effect as an instrument of both curative and preventive justice. Recalling that the appellant's action
was predicated, amongst other bases, upon Opinion 217, Series 1953, of the Secretary of Justice,
which opined in effect that a scheme, though not a lottery for want of consideration, may
nevertheless be a gift enterprise in which that element is not essential, the determination of whether
or not the proposed contest — wanting in consideration as we have found it to be — is a prohibited
gift enterprise, cannot be passed over sub silencio.

While an all-embracing concept of the term "gift enterprise" is yet to be spelled out in explicit words,
there appears to be a consensus among lexicographers and standard authorities that the term is
commonly applied to a sporting artifice of under which goods are sold for their market value but by
way of inducement each purchaser is given a chance to win a prize (54 C.J.S., 850; 34 Am. Jur.,
654; Black, Law Dictionary, 4th ed., p. 817; Ballantine, Law Dictionary with Pronunciations, 2nd ed.,
p. 55; Retail Section of Chamber of Commerce of Plattsmouth vs. Kieck, 257 N.W., 493, 128 Neb.
13; Barker vs. State, 193 S.E., 605, 56 Ga. App., 705; Bell vs. State, 37 Tenn. 507, 509, 5 Sneed,
507, 509). As thus conceived, the term clearly cannot embrace the scheme at bar. As already noted,
there is no sale of anything to which the chance offered is attached as an inducement to the
purchaser. The contest is open to all qualified contestants irrespective of whether or not they buy the
appellee's products.

Going a step farther, however, and assuming that the appellee's contest can be encompassed within
the broadest sweep that the term "gift enterprise" is capable of being extended, we think that the
appellant's pose will gain no added comfort. As stated in the opinion relied upon, rulings there are
indeed holding that a gift enterprise involving an award by chance, even in default of the element of
consideration necessary to constitute a lottery, is prohibited (E.g.: Crimes vs. States, 235 Ala 192,
178 So. 73; Russell vs. Equitable Loan & Sec. Co., 129 Ga. 154, 58 S.E., 88; State ex rel. Stafford
vs. Fox-Great Falls Theater Corporation, 132 P. 2d., 689, 694, 698, 114 Mont. 52). But this is only
one side of the coin. Equally impressive authorities declare that, like a lottery, a gift enterprise comes
within the prohibitive statutes only if it exhibits the tripartite elements of prize, chance and
consideration (E.g.: Bills vs. People, 157 P. 2d., 139, 142, 113 Colo., 326; D'Orio vs. Jacobs, 275 P.
563, 565, 151 Wash., 297; People vs. Psallis, 12 N.Y.S., 2d., 796; City and County of Denver vs.
Frueauff, 88 P., 389, 394, 39 Colo., 20, 7 L.R.A., N.S., 1131, 12 Ann. Cas., 521; 54 C.J.S., 851,
citing: Barker vs. State, 193 S.E., 605, 607, 56 Ga. App., 705; 18 Words and Phrases, perm. ed., pp.
590-594). The apparent conflict of opinions is explained by the fact that the specific statutory
provisions relied upon are not identical. In some cases, as pointed out in 54 C.J.S., 851, the terms
"lottery" and "gift enterprise" are used interchangeably (Bills vs. People, supra); in others, the
necessity for the element of consideration or chance has been specifically eliminated by statute. (54
C.J.S., 351-352, citing Barker vs. State, supra; State ex rel. Stafford vs. Fox-Great Falls Theater
Corporation, supra). The lesson that we derive from this state of the pertinent jurisprudence is,
therefore, that every case must be resolved upon the particular phraseology of the applicable
statutory provision.

Taking this cue, we note that in the Postal Law, the term in question is used in association with the
word "lottery". With the meaning of lottery settled, and consonant to the well-known principle of legal
hermeneutics noscitur a sociis — which Opinion 217 aforesaid also relied upon although only insofar
as the element of chance is concerned — it is only logical that the term under a construction should
be accorded no other meaning than that which is consistent with the nature of the word associated
therewith. Hence, if lottery is prohibited only if it involves a consideration, so also must the term "gift
enterprise" be so construed. Significantly, there is not in the law the slightest indicium of any intent to
eliminate that element of consideration from the "gift enterprise" therein included.
This conclusion firms up in the light of the mischief sought to be remedied by the law, resort to the
determination thereof being an accepted extrinsic aid in statutory construction. Mail fraud orders, it is
axiomatic, are designed to prevent the use of the mails as a medium for disseminating printed
matters which on grounds of public policy are declared non-mailable. As applied to lotteries, gift
enterprises and similar schemes, justification lies in the recognized necessity to suppress their
tendency to inflame the gambling spirit and to corrupt public morals (Com. vs. Lund, 15 A. 2d., 839,
143 Pa. Super. 208). Since in gambling it is inherent that something of value be hazarded for a
chance to gain a larger amount, it follows ineluctably that where no consideration is paid by the
contestant to participate, the reason behind the law can hardly be said to obtain. If, as it has been
held —

Gratuitous distribution of property by lot or chance does not constitute "lottery", if it is not
resorted to as a device to evade the law and no consideration is derived, directly or
indirectly, from the party receiving the chance, gambling spirit not being cultivated or
stimulated thereby. City of Roswell vs. Jones, 67 P. 2d., 286, 41 N.M., 258." (25 Words and
Phrases, perm. ed., p. 695, emphasis supplied).

we find no obstacle in saying the same respecting a gift enterprise. In the end, we are persuaded to
hold that, under the prohibitive provisions of the Postal Law which we have heretofore examined, gift
enterprises and similar schemes therein contemplated are condemnable only if, like lotteries, they
involve the element of consideration. Finding none in the contest here in question, we rule that the
appellee may not be denied the use of the mails for purposes thereof.

Recapitulating, we hold that the petition herein states a sufficient cause of action for declaratory
relief, and that the "Caltex Hooded Pump Contest" as described in the rules submitted by the
appellee does not transgress the provisions of the Postal Law.

ACCORDINGLY, the judgment appealed from is affirmed. No costs.

Concepcion, C.J., Reyes, J.B.L., Barrera, Dizon, Regala, Makalintal, Bengzon, J.P., Zaldivar and
Sanchez, JJ., concur.
 Republic of the Philippines
SUPREME COURT
Manila

SECOND DIVISION

G.R. No. 111107 January 10, 1997

LOEONARDO A. PAAT, in his capacity as Officer-in-Charge (OIC), Regional Executive

Director (RED), Region 2 and JOVITO LAYUGAN, JR., in his capacity as Community
Environment and Natural Resources Officer (CENRO), both of the Department of Environment
and Natural Resources (DENR), petitioners, 
vs.
COURT OF APPEALS, HON. RICARDO A. BACULI in his capacity as Presiding Judge of
Branch 2, Regional Trial Court at Tuguegarao, Cagayan, and SPOUSES BIENVENIDO and
VICTORIA DE GUZMAN, respondents.

TORRES, JR., J.:

Without violating the principle of exhaustion of administrative remedies, may an action

for replevin prosper to recover a movable property which is the subject matter of an administrative
forfeiture proceeding in the Department of Environment and Natural Resources pursuant to Section
68-A of P.D. 705, as amended, entitled The Revised Forestry Code of the Philippines?

Are the Secretary of DENR and his representatives empowered to confiscate and forfeit
conveyances used in transporting illegal forest products in favor of the government?

These are two fundamental questions presented before us for our resolution.

The controversy on hand had its incipiency on May 19, 1989 when the truck of private respondent
Victoria de Guzman while on its way to Bulacan from San Jose, Baggao, Cagayan, was seized by
the Department of Environment and Natural Resources (DENR, for brevity) personnel in Aritao,
Nueva Vizcaya because the driver could not produce the required documents for the forest products
found concealed in the truck. Petitioner Jovito Layugan, the Community Environment and Natural
Resources Officer (CENRO) in Aritao, Cagayan, issued on May 23, 1989 an order of confiscation of
the truck and gave the owner thereof fifteen (15) days within which to submit an explanation why the
truck should not be forfeited. Private respondents, however, failed to submit the required
explanation. On June 22, 1989,  Regional Executive Director Rogelio Baggayan of DENR sustained
1

petitioner Layugan's action of confiscation and ordered the forfeiture of the truck invoking Section
68-A of Presidential Decree No. 705 as amended by Executive Order No. 277. Private respondents
filed a letter of reconsideration dated June 28, 1989 of the June 22, 1989 order of Executive Director
Baggayan, which was, however, denied in a subsequent order of July 12, 1989.  Subsequently, the
2

case was brought by the petitioners to the Secretary of DENR pursuant to private respondents'
statement in their letter dated June 28, 1989 that in case their letter for reconsideration would be
denied then "this letter should be considered as an appeal to the Secretary."  Pending resolution
3

however of the appeal, a suit for replevin, docketed as Civil Case 4031, was filed by the private
respondents against petitioner Layugan and Executive Director Baggayan  with the Regional Trial
4

Court, Branch 2 of Cagayan,  which issued a writ ordering the return of the truck to private
5
respondents.  Petitioner Layugan and Executive Director Baggayan filed a motion to dismiss with the
6

trial court contending, inter alia, that private respondents had no cause of action for their failure to
exhaust administrative remedies. The trial court denied the motion to dismiss in an order dated
December 28, 1989.  Their motion for reconsideration having been likewise denied, a petition
7

for certiorari was filed by the petitioners with the respondent Court of Appeals which sustained the
trial court's order ruling that the question involved is purely a legal question.  Hence, this present
8

petition,  with prayer for temporary restraining order and/or preliminary injunction, seeking to reverse
9

the decision of the respondent Court of Appeals was filed by the petitioners on September 9, 1993.
By virtue of the Resolution dated September 27, 1993,  the prayer for the issuance of temporary
10

restraining order of petitioners was granted by this Court.

Invoking the doctrine of exhaustion of administrative remedies, petitioners aver that the trial court
could not legally entertain the suit for replevin because the truck was under administrative seizure
proceedings pursuant to Section 68-A of P.D. 705, as amended by E.O. 277. Private respondents,
on the other hand, would seek to avoid the operation of this principle asserting that the instant case
falls within the exception of the doctrine upon the justification that (1) due process was violated
because they were not given the chance to be heard, and (2) the seizure and forfeiture was unlawful
on the grounds: (a) that the Secretary of DENR and his representatives have no authority to
confiscate and forfeit conveyances utilized in transporting illegal forest products, and (b) that the
truck as admitted by petitioners was not used in the commission of the crime.

Upon a thorough and delicate scrutiny of the records and relevant jurisprudence on the matter, we
are of the opinion that the plea of petitioners for reversal is in order.

This Court in a long line of cases has consistently held that before a party is allowed to seek the
intervention of the court, it is a pre-condition that he should have availed of all the means of
administrative processes afforded him. Hence, if a remedy within the administrative machinery can
still be resorted to by giving the administrative officer concerned every opportunity to decide on a
matter that comes within his jurisdiction then such remedy should be exhausted first before court's
judicial power can be sought, The premature invocation of court's intervention is fatal to one's cause
of action.  Accordingly, absent any finding of waiver or estoppel the case is susceptible of dismissal
11

for lack of cause of

action.  This doctrine of exhaustion of administrative remedies was not without its practical and legal
12

reasons, for one thing, availment of administrative remedy entails lesser expenses and provides for
a speedier disposition of controversies. It is no less true to state that the courts of justice for reasons
of comity and convenience will shy away from a dispute until the system of administrative redress
has been completed and complied with so as to give the administrative agency concerned every
opportunity to correct its error and to dispose of the case. However, we are not amiss to reiterate
that the principle of exhaustion of administrative remedies as tested by a battery of cases is not an
ironclad rule. This doctrine is a relative one and its flexibility is called upon by the peculiarity and
uniqueness of the factual and circumstantial settings of a case. Hence, it is disregarded (1) when
there is a violation of due process,  (2) when the issue involved is purely a legal question,  (3) when
13 14

the administrative action is patently illegal amounting to lack or excess of jurisdiction,  (4) when
15

there is estoppel on the part of the administrative agency concerned,  (5) when there is irreparable
16

injury,  (6) when the respondent is a department secretary whose acts as an alter ego of the
17

President bears the implied and assumed approval of the latter,  (7) when to require exhaustion of
18

administrative remedies would be unreasonable,  (8) when it would amount to a nullification of a

19

claim,  (9) when the subject matter is a private land in land case proceedings,  (10) when the rule
20 21

does not provide a plain, speedy and adequate remedy, and (11) when there are circumstances
indicating the urgency of judicial intervention.22
In the case at bar, there is no question that the controversy was pending before the Secretary of
DENR when it was forwarded to him following the denial by the petitioners of the motion for
reconsideration of private respondents through the order of July 12, 1989. In their letter of
reconsideration dated June 28, 1989,  private respondents clearly recognize the presence of an
23

administrative forum to which they seek to avail, as they did avail, in the resolution of their case. The
letter, reads, thus:

xxx xxx xxx

If this motion for reconsideration does not merit your favorable action, then this letter
should be considered as an appeal to the
Secretary.24

It was easy to perceive then that the private respondents looked up to the Secretary for the review
and disposition of their case. By appealing to him, they acknowledged the existence of an adequate
and plain remedy still available and open to them in the ordinary course of the law. Thus, they
cannot now, without violating the principle of exhaustion of administrative remedies, seek court's
intervention by filing an action for replevin for the grant of their relief during the pendency of an
administrative proceedings.

Moreover, it is important to point out that the enforcement of forestry laws, rules and regulations and
the protection, development and management of forest lands fall within the primary and special
responsibilities of the Department of Environment and Natural Resources. By the very nature of its
function, the DENR should be given a free hand unperturbed by judicial intrusion to determine a
controversy which is well within its jurisdiction. The assumption by the trial court, therefore, of the
replevin suit filed by private respondents constitutes an unjustified encroachment into the domain of
the administrative agency's prerogative. The doctrine of primary jurisdiction does not warrant a court
to arrogate unto itself the authority to resolve a controversy the jurisdiction over which is initially
lodged with an administrative body of special competence.  In Felipe Ismael, Jr. and Co. vs. Deputy
25

Executive Secretary,  which was reiterated in the recent case of Concerned Officials of MWSS
26

vs. Vasquez,  this Court held:

27

Thus, while the administration grapples with the complex and multifarious problems
caused by unbriddled exploitation of these resources, the judiciary will stand clear. A
long line of cases establish the basic rule that the courts will not interfere in matters
which are addressed to the sound discretion of government agencies entrusted with
the regulation of activities coming under the special technical knowledge and training
of such agencies.

To sustain the claim of private respondents would in effect bring the instant controversy beyond the
pale of the principle of exhaustion of administrative remedies and fall within the ambit of excepted
cases heretofore stated. However, considering the circumstances prevailing in this case, we can not
but rule out these assertions of private respondents to be without merit. First, they argued that there
was violation of due process because they did not receive the May 23, 1989 order of confiscation of
petitioner Layugan. This contention has no leg to stand on. Due process does not necessarily mean
or require a hearing, but simply an opportunity or right to be heard.  One may be heard, not solely by
28

verbal presentation but also, and perhaps many times more creditably and practicable than oral
argument, through pleadings.  In administrative proceedings moreover, technical rules of procedure
29

and evidence are not strictly applied; administrative process cannot be fully equated with due
process in its strict judicial sense.  Indeed, deprivation of due process cannot be successfully
30

invoked where a party was given the chance to be heard on his motion for reconsideration,  as in 31

the instant case, when private respondents were undisputedly given the opportunity to present their
side when they filed a letter of reconsideration dated June 28, 1989 which was, however, denied in
an order of July 12, 1989 of Executive Director Baggayan, In Navarro III vs. Damasco,  we ruled that
32

The essence of due process is simply an opportunity to be heard, or as applied to

administrative proceedings, an opportunity to explain one's side or an opportunity to
seek a reconsideration of the action or ruling complained of. A formal or trial type
hearing is not at all times and in all instances essential. The requirements are
satisfied when the parties are afforded fair and reasonable opportunity to explain
their side of the controversy at hand. What is frowned upon is the absolute lack of
notice or hearing.

Second, private respondents imputed the patent illegality of seizure and forfeiture of the truck
because the administrative officers of the DENR allegedly have no power to perform these acts
under the law. They insisted that only the court is authorized to confiscate and forfeit conveyances
used in transporting illegal forest products as can be gleaned from the second paragraph of Section
68 of P.D. 705, as amended by E.O. 277. The pertinent provision reads as follows:

Sec. 68. . . .

xxx xxx xxx

The court shall further order the confiscation in favor of the government of

the timber or any forest products cut, gathered, collected, removed, or possessed, as
well as the machinery, equipments, implements and tools illegaly [sic] used in the
area where the timber or forest products are found. (Emphasis ours)

A reading, however, of the law persuades us not to go along with private respondents' thinking not
only because the aforequoted provision apparently does not mention nor include "conveyances" that
can be the subject of confiscation by the courts, but to a large extent, due to the fact that private
respondents' interpretation of the subject provision unduly restricts the clear intention of the law and
inevitably reduces the other provision of Section 68-A, which is quoted herein below:

Sec. 68-A. Administrative Authority of the Department or His Duly Authorized

Representative To Order Confiscation. In all cases of violation of this Code or other
forest laws, rules and regulations, the Department Head or his duly authorized
representative, may order the confiscation of any forest products illegally cut,
gathered, removed, or possessed or abandoned, and all conveyances used either by
land, water or air in the commission of the offense and to dispose of the same in
accordance with pertinent laws, regulations and policies on the matter. (Emphasis
ours)

It is, thus, clear from the foregoing provision that the Secretary and his duly authorized
representatives are given the authority to confiscate and forfeit any conveyances utilized in violating
the Code or other forest laws, rules and regulations. The phrase "to dispose of the same" is broad
enough to cover the act of forfeiting conveyances in favor of the government. The only limitation is
that it should be made "in accordance with pertinent laws, regulations or policies on the matter." In
the construction of statutes, it must be read in such a way as to give effect to the purpose projected
in the statute.  Statutes should be construed in the light of the object to be achieved and the evil or
33

mischief to be suppressed, and they should be given such construction as will advance the object,
suppress the mischief, and secure the benefits intended.  In this wise, the observation of the
34

Solicitor General is significant, thus:

 But precisely because of the need to make forestry laws "more responsive to present
situations and realities" and in view of the "urgency to conserve the remaining
resources of the country," that the government opted to add Section 68-A. This
amendatory provision is an administrative remedy totally separate and distinct from
criminal proceedings. More than anything else, it is intended to supplant the
inadequacies that characterize enforcement of forestry laws through criminal actions.
The preamble of EO 277-the law that added Section 68-A to PD 705-is most
revealing:

"WHEREAS, there is an urgency to conserve the remaining forest

resources of the country for the benefit and welfare of the present
and future generations of Filipinos;

WHEREAS, our forest resources may be effectively conserved and

protected through the vigilant enforcement and implementation of our
forestry laws, rules and regulations;

WHEREAS, the implementation of our forestry laws suffers from

technical difficulties, due to certain inadequacies in the penal
provisions of the Revised Forestry Code of the Philippines; and

WHEREAS, to overcome this difficulties, there is a need to penalize

certain acts more responsive to present situations and realities;"

It is interesting to note that Section 68-A is a new provision authorizing the DENR to
confiscate, not only "conveyances," but forest products as well. On the other
hand, confiscation of forest products by the "court" in a criminal action has long been
provided for in Section 68. If as private respondents insist, the power on confiscation
cannot be exercised except only through the court under Section 68, then Section
68-A would have no Purpose at all. Simply put, Section 68-A would not have
provided any solution to the problem perceived in EO 277, supra. 35

Private respondents, likewise, contend that the seizure was illegal because the petitioners
themselves admitted in the Order dated July 12, 1989 of Executive Director Baggayan that the truck
of private respondents was not used in the commission of the crime. This order, a copy of which was
given to and received by the counsel of private respondents, reads in part, viz.:

. . . while it is true that the truck of your client was not used by her in the commission
of the crime, we uphold your claim that the truck owner is not liable for the crime and
in no case could a criminal case be filed against her as provided under Article 309
and 310 of the Revised Penal Code. . . 36

We observed that private respondents misread the content of the aforestated order and obviously
misinterpreted the intention of petitioners. What is contemplated by the petitioners when they stated
that the truck "was not used in the commission of the crime" is that it was not used in the
commission of the crime of theft, hence, in no case can a criminal action be filed against the owner
thereof for violation of Article 309 and 310 of the Revised Penal Code. Petitioners did not eliminate
the possibility that the truck was being used in the commission of another crime, that is, the breach
of Section 68 of P.D. 705 as amended by E.O. 277. In the same order of July 12, 1989, petitioners
pointed out:
 . . . However, under Section 68 of P.D. 705 as amended and further amended by
Executive Order No. 277 specifically provides for the confiscation of the conveyance
used in the transport of forest products not covered by the required legal documents.
She may not have been involved in the cutting and gathering of the product in
question but the fact that she accepted the goods for a fee or fare the same is
therefor liable. . .
37

Private respondents, however, contended that there is no crime defined and punishable under
Section 68 other than qualified theft, so that, when petitioners admitted in the July 12, 1989 order
that private respondents could not be charged for theft as provided for under Articles 309 and 310 of
the Revised Penal Code, then necessarily private respondents could not have committed an act
constituting a crime under Section 68. We disagree. For clarity, the provision of Section 68 of P.D.
705 before its amendment by E.O. 277 and the provision of Section 1 of E.O. No. 277 amending the
aforementioned Section 68 are reproduced herein, thus:

Sec. 68. Cutting, gathering and/or collecting timber or other products without license.
— Any person who shall cut, gather, collect, or remove timber or other forest
products from any forest land, or timber from alienable and disposable public lands,
or from private lands, without any authority under a license agreement, lease, license
or permit, shall be guilty of qualified theft as defined and punished under Articles 309
and 310 of the Revised Penal Code . . . (Emphasis ours; Section 68, P.D. 705 before
its amendment by E.O. 277)

Sec. 1. Section 68 of Presidential Decree No. 705, as amended, is hereby amended

to read as follows:

Sec. 68. Cutting, gathering and/or collecting timber or other forest

products without license. — Any person who
shall cut, gather, collect, remove timber or other forest products from
any forest land, or timber from alienable or disposable public land, or
from private land, without any authority, or possess timber or other
forest products without the legal documents as required under
existing forest laws and regulations, shall be punished with the
penalties imposed under Articles 309 and 310 of the Revised Penal
Code . . . (Emphasis ours; Section 1, E.O. No. 277 amending Section
68, P.D. 705 as amended)

With the introduction of Executive Order No. 277 amending Section 68 of P.D. 705, the act of
cutting, gathering, collecting, removing, or possessing forest products without authority constitutes a
distinct offense independent now from the crime of theft under Articles 309 and 310 of the Revised
Penal Code, but the penalty to be imposed is that provided for under Article 309 and 310 of the
Revised Penal Code. This is clear from the language of Executive Order No. 277 when it eliminated
the phrase "shall be guilty of qualified theft as defined and punished under Articles 309 and 310 of
the Revised Penal Code" and inserted the words "shall be punished with the penalties imposed
under Article 309 and 310 of the Revised Penal Code". When the statute is clear and explicit, there
is hardly room for any extended court ratiocination or rationalization of the law.
38

From the foregoing disquisition, it is clear that a suit for replevin can not be sustained against the
petitioners for the subject truck taken and retained by them for administrative forfeiture proceedings
in pursuant to Section 68-A of the P.D. 705, as amended. Dismissal of the replevin suit for lack of
cause of action in view of the private respondents' failure to exhaust administrative remedies should
have been the proper course of action by the lower court instead of assuming jurisdiction over the
case and consequently issuing the writ ordering the return of the truck. Exhaustion of the remedies
in the administrative forum, being a condition precedent prior to one's recourse to the courts and
more importantly, being an element of private respondents' right of action, is too significant to be
waylaid by the lower court.

It is worth stressing at this point, that a suit for replevin is founded solely on the claim that the
defendant wrongfully withholds the property sought to be recovered. It lies to recover possession of
personal chattels that are unlawfully detained.  "To detain" is defined as to mean "to hold or keep in
39

custody,"  and it has been held that there is tortious taking whenever there is an unlawful meddling
40

with the property, or an exercise or claim of dominion over it, without any pretense of authority or
right; this, without manual seizing of the property is sufficient.  Under the Rules of Court, it is
41

indispensable in replevin proceeding that the plaintiff must show by his own affidavit that he is
entitled to the possession of property, that the property is wrongfully detained by the defendant,
alleging the cause of detention, that the same has not been taken for tax assessment, or seized
under execution, or attachment, or if so seized, that it is exempt from such seizure, and the actual
value of the property.  Private respondents miserably failed to convince this Court that a wrongful
42

detention of the subject truck obtains in the instant case. It should be noted that the truck was seized
by the petitioners because it was transporting forest products without the required permit of the
DENR in manifest contravention of Section 68 of P.D. 705 as amended by E.O 277. Section 68-A of
P.D. 705, as amended, unquestionably warrants the confiscation as well as the disposition by the
Secretary of DENR or his duly authorized representatives of the conveyances used in violating the
provision of forestry laws. Evidently, the continued possession or detention of the truck by the
petitioners for administrative forfeiture proceeding is legally permissible, hence, no wrongful
detention exists in the case at bar.

Moreover, the suit for replevin is never intended as a procedural tool to question the orders of
confiscation and forfeiture issued by the DENR in pursuance to the authority given under P.D. 705,
as amended. Section 8 of the said law is explicit that actions taken by the Director of the Bureau of
Forest Development concerning the enforcement of the provisions of the said law are subject to
review by the Secretary of DENR and that courts may not review the decisions of the Secretary
except through a special civil action for certiorari or prohibition. It reads:

Sec. 8. REVIEW — All actions and decisions of the Director are subject to
review, motu propio or upon appeal of any person aggrieved thereby, by the
Department Head whose decision shall be final and executory after the lapse of thirty
(30) days from the receipt of the aggrieved party of said decision, unless appealed to
the President in accordance with Executive Order No. 19, Series of 1966. The
Decision of the Department Head may not be reviewed by the courts except through
a special civil action for certiorari or prohibition.

WHEREFORE, the Petition is GRANTED; the Decision of the respondent Court of Appeals dated
October 16, 1991 and its Resolution dated July 14, 1992 are hereby SET ASIDE AND REVERSED;
the Restraining Order promulgated on September 27, 1993 is hereby made permanent; and the
Secretary of DENR is directed to resolve the controversy with utmost dispatch.

SO ORDERED.
 Republic of the Philippines
SUPREME COURT
Manila

EN BANC

G.R. No. L-22301             August 30, 1967

THE PEOPLE OF THE PHILIPPINES, plaintiff-appellee, 

vs.
MARIO MAPA Y MAPULONG, defendant-appellant.

Francisco P. Cabigao for defendant-appellant.

Office of the Solicitor General Arturo A. Alafriz, Assistant Solicitor General F. R. Rosete and Solicitor
O. C. Hernandez for plaintiff-appellee.

FERNANDO, J.:

The sole question in this appeal from a judgment of conviction by the lower court is whether or not
the appointment to and holding of the position of a secret agent to the provincial governor would
constitute a sufficient defense to a prosecution for the crime of illegal possession of firearm and
ammunition. We hold that it does not.

The accused in this case was indicted for the above offense in an information dated August 14, 1962
reading as follows: "The undersized accuses MARIO MAPA Y MAPULONG of a violation of Section
878 in connection with Section 2692 of the Revised Administrative Code, as amended by
Commonwealth Act No. 56 and as further amended by Republic Act No. 4, committed as follows:
That on or about the 13th day of August, 1962, in the City of Manila, Philippines, the said accused
did then and there wilfully and unlawfully have in his possession and under his custody and control
one home-made revolver (Paltik), Cal. 22, without serial number, with six (6) rounds of ammunition,
without first having secured the necessary license or permit therefor from the corresponding
authorities. Contrary to law."

When the case was called for hearing on September 3, 1963, the lower court at the outset asked the
counsel for the accused: "May counsel stipulate that the accused was found in possession of the
gun involved in this case, that he has neither a permit or license to possess the same and that we
can submit the same on a question of law whether or not an agent of the governor can hold a firearm
without a permit issued by the Philippine Constabulary." After counsel sought from the fiscal an
assurance that he would not question the authenticity of his exhibits, the understanding being that
only a question of law would be submitted for decision, he explicitly specified such question to be
"whether or not a secret agent is not required to get a license for his firearm."

Upon the lower court stating that the fiscal should examine the document so that he could pass on
their authenticity, the fiscal asked the following question: "Does the accused admit that this pistol cal.
22 revolver with six rounds of ammunition mentioned in the information was found in his possession
on August 13, 1962, in the City of Manila without first having secured the necessary license or permit
thereof from the corresponding authority?" The accused, now the appellant, answered categorically:
"Yes, Your Honor." Upon which, the lower court made a statement: "The accused admits, Yes, and
his counsel Atty. Cabigao also affirms that the accused admits."
Forthwith, the fiscal announced that he was "willing to submit the same for decision." Counsel for the
accused on his part presented four (4) exhibits consisting of his appointment "as secret agent of the
Hon. Feliciano Leviste," then Governor of Batangas, dated June 2, 1962; 1 another document likewise
issued by Gov. Leviste also addressed to the accused directing him to proceed to Manila, Pasay and
Quezon City on a confidential mission; 2 the oath of office of the accused as such secret agent, 3 a
certificate dated March 11, 1963, to the effect that the accused "is a secret agent" of Gov.
Leviste.4 Counsel for the accused then stated that with the presentation of the above exhibits he was
"willing to submit the case on the question of whether or not a secret agent duly appointed and
qualified as such of the provincial governor is exempt from the requirement of having a license of
firearm." The exhibits were admitted and the parties were given time to file their respective
memoranda. 1äwphï1.ñët

Thereafter on November 27, 1963, the lower court rendered a decision convicting the accused "of
the crime of illegal possession of firearms and sentenced to an indeterminate penalty of from one
year and one day to two years and to pay the costs. The firearm and ammunition confiscated from
him are forfeited in favor of the Government."

The only question being one of law, the appeal was taken to this Court. The decision must be
affirmed.

The law is explicit that except as thereafter specifically allowed, "it shall be unlawful for any person to
. . . possess any firearm, detached parts of firearms or ammunition therefor, or any instrument or
implement used or intended to be used in the manufacture of firearms, parts of firearms, or
ammunition."5 The next section provides that "firearms and ammunition regularly and lawfully issued
to officers, soldiers, sailors, or marines [of the Armed Forces of the Philippines], the Philippine
Constabulary, guards in the employment of the Bureau of Prisons, municipal police, provincial
governors, lieutenant governors, provincial treasurers, municipal treasurers, municipal mayors, and
guards of provincial prisoners and jails," are not covered "when such firearms are in possession of
such officials and public servants for use in the performance of their official duties." 6

The law cannot be any clearer. No provision is made for a secret agent. As such he is not exempt.
Our task is equally clear. The first and fundamental duty of courts is to apply the law. "Construction
and interpretation come only after it has been demonstrated that application is impossible or
inadequate without them."7 The conviction of the accused must stand. It cannot be set aside.

Accused however would rely on People v. Macarandang,8 where a secret agent was acquitted on
appeal on the assumption that the appointment "of the accused as a secret agent to assist in the
maintenance of peace and order campaigns and detection of crimes, sufficiently put him within the
category of a "peace officer" equivalent even to a member of the municipal police expressly covered
by section 879." Such reliance is misplaced. It is not within the power of this Court to set aside the
clear and explicit mandate of a statutory provision. To the extent therefore that this decision conflicts
with what was held in People v. Macarandang, it no longer speaks with authority.

Wherefore, the judgment appealed from is affirmed.

Concepcion, C.J., Reyes, J.B.L., Dizon, Makalintal, Bengzon, J.P., Zaldivar, Sanchez, Castro and
Angeles, JJ., concur.
 Republic of the Philippines
SUPREME COURT
Manila

SECOND DIVISION

G.R. No. L-34568 March 28, 1988

RODERICK DAOANG, and ROMMEL DAOANG, assisted by their father, ROMEO

DAOANG, petitioners, 
vs.
THE MUNICIPAL JUDGE, SAN NICOLAS, ILOCOS NORTE, ANTERO AGONOY and AMANDA
RAMOS-AGONOY, respondents.

PADILLA, J.:

This is a petition for review on certiorari of the decision, dated 30 June 1971, rendered by the respondent judge * in Spec. Proc. No. 37 of
Municipal Court of San Nicolas, Ilocos Norte, entitled: "In re Adoption of the Minors Quirino Bonilla and Wilson Marcos; Antero Agonoy and
Amanda R. Agonoy, petitioners", the dispositive part of which reads, as follows:

Wherefore, Court renders judgment declaring that henceforth Quirino Bonilla and
Wilson Marcos be, to all legitimate intents and purposes, the children by adoption of
the joint petitioners Antero Agonoy and Amanda R. Agonoy and that the former be
freed from legal obedience and maintenance by their respective parents, Miguel
Bonilla and Laureana Agonoy for Quirino Bonilla and Modesto Marcos and
Benjamina Gonzales for Wilson Marcos and their family names 'Bonilla' and 'Marcos'
be changed with "Agonoy", which is the family name of the petitioners.

Successional rights of the children and that of their adopting parents shall be
governed by the pertinent provisions of the New Civil Code.

Let copy of this decision be furnished and entered into the records of the Local Civil
Registry of San Nicolas, Ilocos Norte, for its legal effects at the expense of the
petitioners.  1

The undisputed facts of the case are as follows:

On 23 March 1971, the respondent spouses Antero and Amanda Agonoy filed a petition with the
Municipal Court of San Nicolas, Ilocos Norte, seeking the adoption of the minors Quirino Bonilla and
Wilson Marcos. The case, entitled: "In re Adoption of the Minors Quirino Bonilla and Wilson Marcos,
Antero Agonoy and Amanda Ramos-Agonoy, petitioners", was docketed therein as Spec. Proc. No.
37.  2

The petition was set for hearing on 24 April 1971 and notices thereof were caused to be served upon
the office of the Solicitor General and ordered published in the ILOCOS TIMES, a weekly newspaper
of general circulation in the province of Ilocos Norte, with editorial offices in Laoag City.  3
On 22 April 1971, the minors Roderick and Rommel Daoang, assisted by their father and
guardian ad litem, the petitioners herein, filed an opposition to the aforementioned petition for
adoption, claiming that the spouses Antero and Amanda Agonoy had a legitimate daughter named
Estrella Agonoy, oppositors' mother, who died on 1 March 1971, and therefore, said spouses were
disqualified to adopt under Art. 335 of the Civil Code. 4

After the required publication of notice had been accomplished, evidence was presented. Thereafter,
the Municipal Court of San Nicolas, Ilocos Norte rendred its decision, granting the petition for
adoption. 5

Hence, the present recourse by the petitioners (oppositors in the lower court).

The sole issue for consideration is one of law and it is whether or not the respondent spouses Antero
Agonoy and Amanda Ramos-Agonoy are disqualified to adopt under paragraph (1), Art. 335 of the
Civil Code.

The pertinent provision of law reads, as follows:

Art. 335. The following cannot adopt:

(1) Those who have legitimate, legitimated, acknowledged natural children, or

children by legal fiction;

xxx xxx xxx

In overruling the opposition of the herein petitioners, the respondents judge held that "to add
grandchildren in this article where no grandchil is included would violate to (sic) the legal maxim that
what is expressly included would naturally exclude what is not included".

But, it is contended by the petitioners, citing the case of In re Adoption of Millendez,  that the
6

adoption of Quirino Bonilla and Wilson Marcos would not only introduce a foreign element into the
family unit, but would result in the reduction of their legititimes. It would also produce an indirect,
permanent and irrevocable disinheritance which is contrary to the policy of the law that a subsequent
reconciliation between the offender and the offended person deprives the latter of the right to
disinherit and renders ineffectual any disinheritance that may have been made.

We find, however, that the words used in paragraph (1) of Art. 335 of the Civil Code, in enumerating
the persons who cannot adopt, are clear and unambiguous. The children mentioned therein have a
clearly defined meaning in law and, as pointed out by the respondent judge, do not include
grandchildren.

Well known is the rule of statutory construction to the effect that a statute clear and unambiguous on
its face need not be interpreted; stated otherwise, the rule is that only statutes with an ambiguous or
doubtful meaning may be the subject of statutory construction.  7

Besides, it appears that the legislator, in enacting the Civil Code of the Philippines, obviously
intended that only those persons who have certain classes of children, are disqualified to adopt. The
Civil Code of Spain, which was once in force in the Philippines, and which served as the pattern for
the Civil Code of the Philippines, in its Article 174, disqualified persons who have legitimate or
legitimated descendants from adopting. Under this article, the spouses Antero and Amanda Agonoy
would have been disqualified to adopt as they have legitimate grandchildren, the petitioners herein.
But, when the Civil Code of the Philippines was adopted, the word "descendants" was changed to
"children", in paragraph (1) of Article 335.

Adoption used to be for the benefit of the adoptor. It was intended to afford to persons who have no
child of their own the consolation of having one, by creating through legal fiction, the relation of
paternity and filiation where none exists by blood relationship.   The present tendency, however, is
8

geared more towards the promotion of the welfare of the child and the enhancement of his
opportunities for a useful and happy life, and every intendment is sustained to promote that
objective.  Under the law now in force, having legitimate, legitimated, acknowledged natural children,
9

or children by legal fiction, is no longer a ground for disqualification to adopt. 

10

WHEREFORE, the petition is DENIED. The judgment of the Municipal Court of San Nicolas, Ilocos
Norte in Spec. Proc. No. 37 is AFFIRMED. Without pronouncement as to costs in this instance.

SO ORDERED.
 Republic of the Philippines
SUPREME COURT
Manila

EN BANC

G.R. No. 123169 November 4, 1996

DANILO E. PARAS, petitioner, 
vs.
COMMISSION ON ELECTIONS, respondent.

RESOLUTION

FRANCISCO, J.:

Petitioner Danilo E. Paras is the incumbent Punong Barangay of Pula, Cabanatuan City who won
during the last regular barangay election in 1994. A petition for his recall as Punong Barangay was
filed by the registered voters of the barangay. Acting on the petition for recall, public respondent
Commission on Elections (COMELEC) resolved to approve the petition, scheduled the petition
signing on October 14, 1995, and set the recall election on November 13,
1995.  At least 29.30% of the registered voters signed the petition, well above the 25% requirement
1

provided by law. The COMELEC, however, deferred the recall election in view of petitioner's
opposition. On December 6, 1995, the COMELEC set anew the recall election, this time on
December 16, 1995. To prevent the holding of the recall election, petitioner filed before the Regional
Trial Court of Cabanatuan City a petition for injunction, docketed as SP Civil Action No. 2254-AF,
with the trial court issuing a temporary restraining order. After conducting a summary hearing, the
trial court lifted the restraining order, dismissed the petition and required petitioner and his counsel to
explain why they should not be cited for contempt for misrepresenting that the barangay recall
election was without COMELEC approval. 2

In a resolution dated January 5, 1996, the COMELEC, for the third time, re-scheduled the recall
election an January 13, 1996; hence, the instant petition for certiorari with urgent prayer for
injunction. On January 12, 1996, the Court issued a temporary restraining order and required the
Office of the Solicitor General, in behalf of public respondent, to comment on the petition. In view of
the Office of the Solicitor General's manifestation maintaining an opinion adverse to that of the
COMELEC, the latter through its law department filed the required comment. Petitioner thereafter
filed a reply.3

Petitioner's argument is simple and to the point. Citing Section 74 (b) of Republic Act No. 7160,
otherwise known as the Local Government Code, which states that "no recall shall take place within
one (1) year from the date of the official's assumption to office or one (1) year immediately preceding
a regular local election", petitioner insists that the scheduled January 13, 1996 recall election is now
barred as the Sangguniang Kabataan (SK) election was set by Republic Act No. 7808 on the first
Monday of May 1996, and every three years thereafter. In support thereof, petitioner
cites Associated Labor Union v. Letrondo-Montejo, 237 SCRA 621, where the Court considered the
SK election as a regular local election. Petitioner maintains that as the SK election is a regular local
election, hence no recall election can be had for barely four months separate the SK election from
the recall election. We do not agree.

The subject provision of the Local Government Code provides:

Sec. 74. Limitations on Recall. — (a) Any elective local official may be the subject of
a recall election only once during his term of office for loss of confidence.

(b) No recall shall take place within one (1) year from the date of the official's
assumption to office or one (1) year immediately preceding a regular local election.

[Emphasis added]

It is a rule in statutory construction that every part of the statute must be interpreted with reference to
the context, i.e., that every part of the statute must be considered together with the other parts, and
kept subservient to the general intent of the whole enactment.  The evident intent of Section 74 is to
4

subject an elective local official to recall election once during his term of office. Paragraph (b)
construed together with paragraph (a) merely designates the period when such elective local official
may be subject of a recall election, that is, during the second year of his term of office. Thus,
subscribing to petitioner's interpretation of the phrase regular local election to include the SK election
will unduly circumscribe the novel provision of the Local Government Code on recall, a mode of
removal of public officers by initiation of the people before the end of his term. And if the SK election
which is set by R.A No. 7808 to be held every three years from May 1996 were to be deemed within
the purview of the phrase "regular local election", as erroneously insisted by petitioner, then no recall
election can be conducted rendering inutile the recall provision of the Local Government Code.

In the interpretation of a statute, the Court should start with the assumption that the legislature
intended to enact an effective law, and the legislature is not presumed to have done a vain thing in
the enactment of a statute.  An interpretation should, if possible, be avoided under which a statute or
5

provision being construed is defeated, or as otherwise expressed, nullified, destroyed, emasculated,

repealed, explained away, or rendered insignificant, meaningless, inoperative or nugatory. 6

It is likewise a basic precept in statutory construction that a statute should be interpreted in harmony
with the Constitution.  Thus, the interpretation of Section 74 of the Local Government Code,
7

specifically paragraph (b) thereof, should not be in conflict with the Constitutional mandate of Section
3 of Article X of the Constitution to "enact a local government code which shall provide for a more
responsive and accountable local government structure instituted through a system of
decentralization with effective mechanism of recall, initiative, and referendum . . . ."

Moreover, petitioner's too literal interpretation of the law leads to absurdity which we cannot
countenance. Thus, in a case, the Court made the following admonition:

We admonish against a too-literal reading of the law as this is apt to constrict rather
than fulfill its purpose and defeat the intention of its authors. That intention is usually
found not in "the letter that killeth but in the spirit that vivifieth". . .
8

The spirit, rather than the letter of a law determines its construction; hence, a statute, as in
this case, must be read according to its spirit and intent.
Finally, recall election is potentially disruptive of the normal working of the local government unit
necessitating additional expenses, hence the prohibition against the conduct of recall election one
year immediately preceding the regular local election. The proscription is due to the proximity of the
next regular election for the office of the local elective official concerned. The electorate could
choose the official's replacement in the said election who certainly has a longer tenure in office than
a successor elected through a recall election. It would, therefore, be more in keeping with the intent
of the recall provision of the Code to construe regular local election as one referring to an election
where the office held by the local elective official sought to be recalled will be contested and be filled
by the electorate.

Nevertheless, recall at this time is no longer possible because of the limitation stated under Section
74 (b) of the Code considering that the next regular election involving the barangay office concerned
is barely seven (7) months away, the same having been scheduled on May 1997.  9

ACCORDINGLY, the petition is hereby dismissed for having become moot and academic. The
temporary restraining order issued by the Court on January 12, 1996, enjoining the recall election
should be as it is hereby made permanent.

SO ORDERED.

Narvasa, C.J., Padilla, Regalado, Romero, Bellosillo, Melo, Puno, Vitug, Kapunan, Mendoza,
Hermosisima, Jr., Panganiban and Torres, Jr., JJ., concur.

Separate Opinions

 
DAVIDE, JR., J., concurring:

I concur with Mr. Justice Ricardo J. Francisco in his ponencia.

However, I wish to add another reason as to why the SK election cannot be considered a "regular
local election" for purposes of recall under Section 74 of the Local Government Code of 1991.

The term "regular local election" must be confined to the regular election of elective local officials, as
distinguished from the regular election of national officials. The elective national officials are the
President, Vice-President, Senators and Congressmen. The elective local officials are Provincial
Governors, Vice-Governors of provinces, Mayors and Vice-Mayors of cities and municipalities,
Members of the Sanggunians of provinces, cities and municipalities, punong barangays and
members of the sangguniang barangays, and the elective regional officials of the Autonomous
Region of Muslim Mindanao. These are the only local elective officials deemed recognized by
Section 2(2) of Article IX-C of the Constitution, which provides:
 Sec. 2. The Commission on Elections shall exercise the following powers and
functions:

xxx xxx xxx

(2) Exercise exclusive original jurisdiction over all contests relating to the elections,
returns, and qualifications of all elective regional, provincial, and city officials, and
appellate jurisdiction over all contests involving elective municipal officials decided by
trial courts of general jurisdiction, or involving elective barangay officials decided by
trial courts of limited jurisdiction.

A regular election, whether national or local, can only refer to an election participated in by those
who possess the right of suffrage, are not otherwise disqualified by law, and who are registered
voters. One of the requirements for the exercise of suffrage under Section 1, Article V of the
Constitution is that the person must be at least 18 years of age, and one requisite before he can vote
is that he be a registered voter pursuant to the rules on registration prescribed in the Omnibus
Election Code (Section 113-118).

Under the law, the SK includes the youth with ages ranging from 15 to 21 (Sec. 424, Local
Government Code of 1991). Accordingly, they include many who are not qualified to vote in a regular
election, viz., those from ages 15 to less than 18. In no manner then may SK elections be
considered a regular election (whether national or local).

Indeed the Sangguniang Kabataan is nothing more than a youth organization, and although fully
recognized in the Local Government Code and vested with certain powers and functions, its elective
officials have not attained the status of local elective officials. So, in Mercado vs. Board of Election
Supervisors (243 SCRA 422 [1995]), this Court ruled that although the SK Chairman is an ex-
officio member of the sangguniang barangay — an elective body — that fact does not make him "an
elective barangay official," since the law specifically provides who comprise the elective officials of
the sangguniang barangay, viz., the punong barangay and the seven (7) regular sangguniang
barangay members elected at large by those qualified to exercise the right of suffrage under Article
V of the Constitution, who are likewise registered voters of the barangay. This shows further that the
SK election is not a regular local election for purposes of recall under Section 74 of the Local
Government Code.

Separate Opinions

DAVIDE, JR., J., concurring:

I concur with Mr. Justice Ricardo J. Francisco in his ponencia.

However, I wish to add another reason as to why the SK election cannot be considered a "regular
local election" for purposes of recall under Section 74 of the Local Government Code of 1991.

The term "regular local election" must be confined to the regular election of elective local officials, as
distinguished from the regular election of national officials. The elective national officials are the
President, Vice-President, Senators and Congressmen. The elective local officials are Provincial
Governors, Vice-Governors of provinces, Mayors and Vice-Mayors of cities and municipalities,
Members of the Sanggunians of provinces, cities and municipalities, punong barangays and
members of the sangguniang barangays, and the elective regional officials of the Autonomous
Region of Muslim Mindanao. These are the only local elective officials deemed recognized by
Section 2(2) of Article IX-C of the Constitution, which provides:

Sec. 2. The Commission on Elections shall exercise the following powers and
functions:

xxx xxx xxx

(2) Exercise exclusive original jurisdiction over all contests relating to the elections,
returns, and qualifications of all elective regional, provincial, and city officials, and
appellate jurisdiction over all contests involving elective municipal officials decided by
trial courts of general jurisdiction, or involving elective barangay officials decided by
trial courts of limited jurisdiction.

A regular election, whether national or local, can only refer to an election participated in by those
who possess the right of suffrage, are not otherwise disqualified by law, and who are registered
voters. One of the requirements for the exercise of suffrage under Section 1, Article V of the
Constitution is that the person must be at least 18 years of age, and one requisite before he can vote
is that he be a registered voter pursuant to the rules on registration prescribed in the Omnibus
Election Code (Section 113-118).

Under the law, the SK includes the youth with ages ranging from 15 to 21 (Sec. 424, Local
Government Code of 1991). Accordingly, they include many who are not qualified to vote in a regular
election, viz., those from ages 15 to less than 18. In no manner then may SK elections be
considered a regular election (whether national or local).

Indeed the Sangguniang Kabataan is nothing more than a youth organization, and although fully
recognized in the Local Government Code and vested with certain powers and functions, its elective
officials have not attained the status of local elective officials. So, in Mercado vs. Board of Election
Supervisors (243 SCRA 422 [1995]), this Court ruled that although the SK Chairman is an ex-
officio member of the sangguniang barangay — an elective body — that fact does not make him "an
elective barangay official," since the law specifically provides who comprise the elective officials of
the sangguniang barangay, viz., the punong barangay and the seven (7) regular sangguniang
barangay members elected at large by those qualified to exercise the right of suffrage under Article
V of the Constitution, who are likewise registered voters of the barangay. This shows further that the
SK election is not a regular local election for purposes of recall under Section 74 of the Local
Government Code.

Narvasa, C.J., Padilla, Regalado, Bellosillo, Vitug and Mendoza, JJ., concur.
 Republic of the Philippines
SUPREME COURT
Manila

EN BANC

G.R. No. L-61236 January 31, 1984

NATIONAL FEDERATION OF LABOR and ZAMBOWOOD MONTHLY EMPLOYEES UNION, ITS

OFFICERS AND MEMBERS, petitioners, 
vs.
THE HONORABLE CARLITO A. EISMA, LT. COL. JACOB CARUNCHO, COMMANDING
OFFICER, ZAMBOANGA DISTRICT COMMAND, PC, AFP, and ZAMBOANGA WOOD
PRODUCTS, respondents.

Jose C. Espina and Potenciano Flores for petitioners.

The Solicitor General for public respondents.

Gaspar V. Tagalo for private respondent Zamboanga Wood Products.

FERNANDO, C.J.:

This Court is confronted once again with the question of whether or not it is a court or a labor arbiter
that can pass on a suit for damages filed by the employer, here private respondent Zamboanga
Wood Products. Respondent Judge Carlito A. Eisma 1 then of the Court of First Instance, now of the Regional Trial
Court of Zamboanga City, was of the view that it is a court and denied a motion to dismiss filed by petitioners National Federation of labor
and Zambowood Monthly Employees Union, its officers and members. It was such an order dated July 20, 1982 that led to the filing of this
certiorari and prohibition proceeding. In the order assailed, it was required that the officers and members of petitioner union appear before
the court to show cause why a writ of preliminary injunction should not be issued against them and in the meanwhile such persons as well as
any other persons acting under their command and on their behalf were "temporarily restrained and ordered to desist and refrain from further
obstructing, impeding and impairing plaintiff's use of its property and free ingress to or egress from plaintiff's Manufacturing Division facilities
at Lumbayao, Zamboanga City and on its road right of way leading to and from said plaintiff's facilities, pending the determination of the
litigation, and unless a contrary order is issued by this Court." 2

The record discloses that petitioner National Federation of Labor, on March 5, 1982, filed with the
Ministry of Labor and Employment, Labor Relations Division, Zamboanga City, a petition for direct
certification as the sole exclusive collective bargaining representative of the monthly paid employees
of the respondent Zamboanga Wood Products, Inc. at its manufacturing plant in Lumbayao,
Zamboanga City.   Such employees, on April 17, 1982 charged respondent firm before the same
3

office of the Ministry of Labor for underpayment of monthly living allowances.  Then came, on May 3, 4

1982, from petitioner union, a notice of strike against private respondent, alleging illegal termination
of Dionisio Estioca, president of the said local union; unfair labor practice, non-payment of living
allowances; and "employment of oppressive alien management personnel without proper permit.   It 5

was followed by the union submitting the minutes of the declaration of strike, "including the ninety
(90) ballots, of which 79 voted for yes and three voted for no."   The strike began on May 23,
6

1982.   On July 9, 1982, private respondent Zambowood filed a complaint with respondent Judge
7

against the officers and members of petitioners union, for "damages for obstruction of private
property with prayer for preliminary injunction and/or restraining order."   It was alleged that 8

defendants, now petitioners, blockaded the road leading to its manufacturing division, thus
preventing customers and suppliers free ingress to or egress from such premises.   Six days later, 9

there was a motion for the dismissal and for the dissolution of the restraining order and opposition to
the issuance of the writ of preliminary injunction filed by petitioners. It was contended that the acts
complained of were incidents of picketing by defendants then on strike against private respondent,
and that therefore the exclusive jurisdiction belongs to the Labor Arbiter pursuant to Batas
Pambansa Blg. 227, not to a court of first instance. 10 There was, as noted earlier, a motion to dismiss, which was
denied. Hence this petition for certiorari.

Four days after such petition was filed, on August 3, 1982, this Court required respondents to
answer and set the plea for a preliminary injunction to be heard on Thursday, August 5, 1982. 11 After
such hearing, a temporary restraining order was issued, "directing respondent Judge and the commanding officer in Zamboanga and his
agents from enforcing the ex-parte order of injunction dated July 20, 1982; and to restrain the respondent Judge from proceeding with the
hearing of the until otherwise case effective as of [that] date and continuing ordered by [the] Court. In the exercise of the right to peaceful
picketing, petitioner unions must abide strictly with Batas Pambansa Blg. 227, specifically Section 6 thereof, amending Article 265 of the
Labor Code, which now reads: '(e) No person engaged in picketing shall commit any act of violence, coercion or intimidation or obstruct the
free ingress to or egress from the employer's premises for lawful purposes, or obstruct public thoroughfares.' " 12

On August 13, 1982, the answer of private respondent was filed sustaining the original jurisdiction of respondent Judge and maintaining that
the order complained of was not in excess of such jurisdiction, or issued with grave abuse of discretion. Solicitor General Estelito P.
Mendoza, 13 on the other hand, instead of filing an answer, submitted a Manifestation in lieu thereof. He met squarely the issue of whether
or not respondent Judge had jurisdiction, and answered in the negative. He (i)ncluded that "the instant petition has merit and should be given
due course."

He traced the changes undergone by the Labor Code, citing at the same time the decisions issued
by this Court after each of such changes. As pointed out, the original wording of Article 217 vested
the labor arbiters with jurisdictional. 14 So it was applied by this Court in Garcia v. Martinez 15 and in Bengzon v.
Inciong. 16 On May 1, 1978, however, Presidential Decree No. 1367 was issued, amending Article 217, and provided "that the Regional
Directors shall not indorse and Labor Arbiters shall not entertain claims for moral and other forms of damages." 17 The ordinary courts were
thus vested with jurisdiction to award actual and moral damages in the case of illegal dismissal of employees. 18 That is not, as pointed out
by the Solicitor General, the end of the story, for on May 1, 1980, Presidential Decree No. 1691 was issued, further amending Article 217,
returning the original jurisdiction to the labor arbiters, thus enabling them to decide "3. All money claims of workers, including those based on
non-payment or underpayment of wages, overtime compensation, separation pay and other benefits provided by law or appropriate
agreement, except claims for employees compensation, social security, medicare and maternity benefits; [and] (5) All other claims arising
from employer-employee relations unless expressly excluded by tills Code." 19 An equally conclusive manifestation of the lack of jurisdiction
of a court of first instance then, a regional trial court now, is Batas Pambansa Blg. 130, amending Article 217 of the Labor Code. It took effect
on August 21, 1981. Subparagraph 2, paragraph (a) is now worded thus: "(2) those that involve wages, hours of work and other terms and
conditions of employment." 20 This is to be compared with the former phraseology "(2) unresolved issue in collective bargaining, including
those that involve wages, hours of work and other terms and conditions of employment." 21 It is to be noted that Batas Pambansa Blg. 130
made no change with respect to the original and exclusive jurisdiction of Labor Arbiters with respect to money claims of workers or claims for
damages arising from employer-employee relations.

Nothing becomes clearer, therefore, than the meritorious character of this petition. certiorari and
prohibition lie, respondent Judge being devoid of jurisdiction to act on the matter.

1. Article 217 is to be applied the way it is worded. The exclusive original jurisdiction of a labor
arbiter is therein provided for explicitly. It means, it can only mean, that a court of first instance judge
then, a regional trial court judge now, certainly acts beyond the scope of the authority conferred on
him by law when he entertained the suit for damages, arising from picketing that accompanied a
strike. That was squarely within the express terms of the law. Any deviation cannot therefore be
tolerated. So it has been the constant ruling of this Court even prior to Lizarraga Hermanos v. Yap
Tico,   a 1913 decision. The ringing words of the ponencia of Justice Moreland still call for
22

obedience. Thus, "The first and fundamental duty of courts, in our judgment, is to apply the law.
Construction and interpretation come only after it has been demonstrated that application is
impossible or inadequate without them."   It is so even after the lapse of sixty years. 
23 24

2. On the precise question at issue under the law as it now stands, this Court has spoken in three
decisions. They all reflect the utmost fidelity to the plain command of the law that it is a labor arbiter,
not a court, that ossesses original and exclusive jurisdiction to decide a claim for damages arising
from picketing or a strike. In Pepsi-Cola Bottling Co. v. Martinez,   the issue was set forth in the
25

opening paragraph, in the ponencia of Justice Escolin: "This petition for certiorari, prohibition and
mandamus raises anew the legal question often brought to this Court: Which tribunal has exclusive
jurisdiction over an action filed by an employee against his employer for recovery of unpaid salaries,
separation benefits and damages — the court of general jurisdiction or the Labor Arbiter of the
National Labor Relations Commission [NLRC]?"   It was categorically held: "We rule that the Labor
26

Arbiter has exclusive jurisdiction over the case."   Then came this portion of the opinion: "Jurisdiction
27

over the subject matter in a judicial proceeding is conferred by the sovereign authority which
organizes the court; and it is given only by law. Jurisdiction is never presumed; it must be conferred
by law in words that do not admit of doubt. Since the jurisdiction of courts and judicial tribunals is
derived exclusively from the statutes of the forum, the issue before us should be resolved on the
basis of the law or statute now in force. We find that law in presidential Decree 1691 which took
effect on May 1, 1980, Section 3 of which reads as follows: ... Article 217. Jurisdiction of Labor
Arbiters and the Commission. — (a) The Labor Arbiters shall have the original and exclusive
jurisdiction to hear and decide the following cases involving all workers, whether agricultural or non-
agricultural: ... 3. All money claims of workers, including those based on nonpayment or
underpayment of wages, overtime compensation, separation pay and other benefits provided by law
or appropriate agreement, except claims for employees' compensation, social security, medicare
and maternity benefits; 4. Cases involving household services; and 5. All other claims arising from
employer-employee relations, unless expressly excluded by this Code."   That same month, two
28

other cases were similarly decided, Ebon v. De Guzman   and Aguda v. Vallejos. 

29 30

3. It is regrettable that the ruling in the above three decisions, decided in March of 1982, was not
followed by private respondent when it filed the complaint for damages on July 9, 1982, more than
four months later.   On this point, reference may be made to our decision in National Federation of
31

Labor, et al. v. The Honorable Minister of Labor and Employment,   promulgated on September 15,
32

1983. In that case, the question involved was the failure of the same private respondent,
Zamboanga Wood Products, Inc., to admit the striking petitioners, eighty-one in number, back to
work after an order of Minister Blas F. Ople certifying to the National Labor Relations Commission
the labor dispute for compulsory arbitration pursuant to Article 264 (g) of the Labor Code of the
Philippines. It was noted in the first paragraph of our opinion in that case: "On the face of it, it seems
difficult to explain why private respondent would not comply with such order considering that the
request for compulsory arbitration came from it. It ignored this notification by the presidents of the
labor unions involved to its resident manager that the striking employees would lift their picket line
and start returning to work on August 20, 1982. Then, too, Minister Ople denied a partial motion for
reconsideration insofar as the return-to-work aspect is concerned which reads: 'We find no merit in
the said Motion for Reconsideration. The Labor code, as amended, specifically Article 264 (g),
mandates that whenever a labor dispute is certified by the Minister of Labor and Employment to the
National Labor Relations Commission for compulsory arbitration and a strike has already taken
place at the time of certification, "all striking employees shall immediately return to work and the
employees shall immediately resume operations and readmit all workers under the same terms and
conditions prevailing before the strike." ' "   No valid distinction can be made between the exercise of
33

compulsory arbitration vested in the Ministry of Labor and the jurisdiction of a labor arbiter to pass
over claims for damages in the light of the express provision of the Labor Code as set forth in Article
217. In both cases, it is the Ministry, not a court of justice, that is vested by law with competence to
act on the matter.

4. The issuance of Presidential Decree No. 1691 and the enactment of Batas Pambansa Blg. 130,
made clear that the exclusive and original jurisdiction for damages would once again be vested in
labor arbiters. It can be affirmed that even if they were not that explicit, history has vindicated the
view that in the appraisal of what was referred to by Philippine American Management & Financing
Co., Inc. v. Management & Supervisors Association of the Philippine-American Management &
Financing Co., Inc.   as "the rather thorny question as to where in labor matters the dividing line is to
34
be drawn"  between the power lodged in an administrative body and a court, the unmistakable trend
35

has been to refer it to the former. Thus: "Increasingly, this Court has been committed to the view that
unless the law speaks clearly and unequivocally, the choice should fall on [an administrative
agency]."   Certainly, the present Labor Code is even more committed to the view that on policy
36

grounds, and equally so in the interest of greater promptness in the disposition of labor matters, a
court is spared the often onerous task of determining what essentially is a factual matter, namely,
the damages that may be incurred by either labor or management as a result of disputes or
controversies arising from employer-employee relations.

WHEREFORE, the writ of certiorari is granted and the order of July 20, 1982, issued by respondent
Judge, is nullified and set aside. The writ of prohibition is likewise granted and respondent Judge, or
whoever acts in his behalf in the Regional Trial Court to which this case is assigned, is enjoin from
taking any further action on Civil Case No. 716 (2751), except for the purpose of dismissing it. The
temporary restraining order of August 5, 1982 is hereby made permanent.

Teehankee, Makasiar, Aquino, Guerrero, Melencio-Herrera, Plana, Escolin Relova and Gutierrez,
Jr., JJ., concur.

Concepcion Jr., J., took no part.

De Castro, J., is on leave.

Separate Opinions

ABAD SANTOS, J., concurring:

I concur and express the hope that Art. 217 should not undergo repeated amendments.