[G.R. No. L-63915. December 29, 1986.

LORENZO M. TAÑADA, ABRAHAM F. SARMIENTO, and MOVEMENT OF ATTORNEYS FOR

BROTHERHOOD, INTEGRITY AND NATIONALISM, INC. (MABINI), petitioners, vs. HON. JUAN C.
TUVERA. in his capacity as Executive Assistant to the President, HON. JOAQUIN VENUS, in his capacity
as Deputy Executive Assistant to the President, MELQUIADES P. DE LA CRUZ, ETC., ET AL.,
respondents.

SYLLABUS

FERNAN, J., concurring:

1. CIVIL LAW; EFFECT AND APPLICATION OF LAWS; ARTICLE 2, CIVIL CODE; PUBLICATION OF LAWS
MADE TO ENSURE CONSTITUTIONAL RIGHT TO DUE PROCESS AND TO INFORMATION. — The categorical
statement by this Court on the need for publication before any law be made effective seeks to prevent
abuses on the part if the lawmakers and, at the time, ensure to the people their constitutional right to
due process and to information on matter of public concern. cda

RESOLUTION

CRUZ, J p:

Due process was invoked by the petitioners in demanding the disclosure or a number of presidential
decrees which they claimed had not been published as required by law. The government argued that
while publication was necessary as a rule, it was not so when it was "otherwise provided," as when the
decrees themselves declared that they were to become effective immediately upon their approval. In
the decision of this case on April 24, 1985, the Court affirmed the necessity for the publication of some
of these decrees, declaring in the dispositive portion as follows:

"WHEREFORE, the Court hereby orders respondents to publish to the Official Gazette all unpublished
presidential issuances which are of general application, and unless so published, they shall have no
binding force and effect."

The petitioners are now before us again, this time to move for reconsideration/clarification of that
decision. 1 Specifically, they ask the following questions:

1. What is meant by "law of public nature" or "general applicability"?

2. Must a distinction be made between laws of general applicability and laws which are not?

3. What is meant by "publication"?

4. Where is the publication to be made?

5. When is the publication to be made?

1
Resolving their own doubts, the petitioners suggest that there should be no distinction between laws of
general applicability and those which are not; that publication means complete publication; and that the
publication must be made forthwith in the Official Gazette. 2

In the Comment 3 required of the then Solicitor General, he claimed first that the motion was a request
for an advisory opinion and should therefore be dismissed, and, on the merits, that the clause "unless it
is otherwise provided" in Article 2 of the Civil Code meant that the publication required therein was not
always imperative; that publication, when necessary, did not have to be made in the Official Gazette;
and that in any case the subject decision was concurred in only by three justices and consequently not
binding. This elicited a Reply 4 refuting these arguments. Came next the February Revolution and the
Court required the new Solicitor General to file a Rejoinder in view of the supervening events, under
Rule 3, Section 18, of the Rules of Court. Responding, he submitted that issuances intended only for the
interval administration of a government agency or for particular persons did not have to be published;
that publication when necessary must be in full and in the Official Gazette; and that, however, the
decision under reconsideration was not binding because it was not supported by eight members of this
Court. 5

The subject of contention is Article 2 of the Civil Code providing as follows:

"ART. 2.Laws shall take effect after fifteen days following the completion of their publication in the
Official Gazette, unless it is otherwise provided. This Code shall take effect one year after such
publication."

After a careful study of this provision and of the arguments of the parties, both on the original petition
and on the instant motion, we have come to the conclusion, and so hold, that the clause "unless it is
otherwise provided" refers to the date of effectivity and not to the requirement of publication itself,
which cannot in any event be omitted. This clause does not mean that the legislature may make the law
effective immediately upon approval, or on any other date, without its previous publication. cdphil

Publication is indispensable in every case, but the legislature may in its discretion provide that the usual
fifteen-day period shall be shortened or extended. An example, as pointed out by the present Chief
Justice in his separate concurrence in the original decision, 6 is the Civil Code which did not become
effective after fifteen days from its publication in the Official Gazette but "one year after such
publication." The general rule did not apply because it was "otherwise provided."

It is not correct to say that under the disputed clause publication may be dispensed with altogether. The
reason is that such omission would offend due process insofar as it would deny the public knowledge of
the laws that are supposed to govern it. Surely, if the legislature could validly provide that a law shall
become effective immediately upon its approval notwithstanding the lack of publication (or after an
unreasonably short period after publication), it is not unlikely that persons not aware of it would be
prejudiced as a result; and they would be so not because of a failure to comply with it but simply
because they did not know of its existence. Significantly, this is not true only of penal laws as is
commonly supposed. One can think of many non-penal measures, like a law on prescription, which must
also be communicated to the persons they may affect before they can begin to operate.

2
We note at this point the conclusive presumption that every person knows the law, which of course
presupposes that the law has been published if the presumption is to have any legal justification at all. It
is no less important to remember that Section 6 of the Bill of Rights recognizes "the right of the people
to information on matters of public concern," and this certainly applies to, among others, and indeed
especially, the legislative enactments of the government.

The term "laws" should refer to all laws and not only to those of general application, for strictly speaking
all laws relate to the people in general albeit there are some that do not apply to them directly. An
example is a law granting citizenship to a particular individual, like a relative of President Marcos who
was decreed instant naturalization. It surely cannot be said that such a law does not affect the public
although it unquestionably does not apply directly to all the people. The subject of such law is a matter
of public interest which any member of the body politic may question in the political forums or, if he is a
proper party, even in the courts of justice. In fact, a law without any bearing on the public would be
invalid as an intrusion of privacy or as class legislation or as an ultra vires act of the legislature. To be
valid, the law must invariably affect the public interest even if it might be directly applicable only to one
individual, or some of the people only, and not to the public as a whole.

We hold therefore that all statutes, including those of local application and private laws, shall be
published as a condition for their effectivity, which shall begin fifteen days after publication unless a
different effectivity date is fixed by the legislature.

Covered by this rule are presidential decrees and executive orders promulgated by the President in the
exercise of legislative powers whenever the same are validly delegated by the legislature or, at present,
directly conferred by the Constitution. Administrative rules and regulations must also be published if
their purpose is to enforce or implement existing law pursuant also to a valid delegation.

Interpretative regulations and those merely internal in nature, that is, regulating only the personnel of
the administrative agency and not the public, need not be published. Neither is publication required of
the so-called letters of instructions issued by administrative superiors concerning the rules or guidelines
to be followed by their subordinates in the performance of their duties.

Accordingly, even the charter of a city must be published notwithstanding that it applies to only a
portion of the national territory and directly affects only the inhabitants of that place. All presidential
decrees must be published, including even, say, those naming a public place after a favored individual or
exempting him from certain prohibitions or requirements. The circulars issued by the Monetary Board
must be published if they are meant not merely to interpret but to "fill in the details" of the Central
Bank Act which that body is supposed to enforce.

However, no publication is required of the instructions issued by, say, the Minister of Social Welfare on
the case studies to be made in petitions for adoption or the rules laid down by the head of a
government agency on the assignments or workload of his personnel or the wearing of office uniforms.
Parenthetically, municipal ordinances are not covered by this rule but by the Local Government Code.

3
We agree that the publication must be in full or it is no publication at all since its purpose is to inform
the public of the contents of the laws. As correctly pointed out by the petitioners, the mere mention of
the number of the presidential decree, the title of such decree, its whereabouts (e.g., "with Secretary
Tuvera"), the supposed date of effectivity, and in a mere supplement of the Official Gazette cannot
satisfy the publication requirement. This is not even substantial compliance. This was the manner,
incidentally, in which the General Appropriations Act for FY 1975, a presidential decree undeniably of
general applicability and interest, was "published" by the Marcos administration. 7 The evident purpose
was to withhold rather than disclose information on this vital law.

Coming now to the original decision, it is true that only four justices were categorically for publication in
the Official Gazette 8 and that six others felt that publication could be made elsewhere as long as the
people were sufficiently informed. 9 One reserved his vote 10 and another merely acknowledged the
need for due publication without indicating where it should be made, 11 It is therefore necessary for the
present membership of this Court to arrive at a clear consensus on this matter and to lay down a binding
decision supported by the necessary vote.

There is much to be said of the view that the publication need not be made in the Official Gazette,
considering its erratic releases and limited readership. Undoubtedly, newspapers of general circulation
could better perform the function of communicating the laws to the people as such periodicals are more
easily available, have a wider readership, and come out regularly. The trouble, though, is that this kind
of publication is not the one required or authorized by existing law. As far as we know, no amendment
has been made of Article 2 of the Civil Code. The Solicitor General has not pointed to such a law, and we
have no information that it exists. If it does, it obviously has not yet been published.

At any rate, this Court is not called upon to rule upon the wisdom of a law or to repeal or modify it if we
find it impractical. That is not our function. That function belongs to the legislature. Our task is merely to
interpret and apply the law as conceived and approved by the political departments of the government
in accordance with the prescribed procedure. Consequently, we have no choice but to pronounce that
under Article 2 of the Civil Code, the publication of laws must be made in the Official Gazette, and not
elsewhere, as a requirement for their effectivity after fifteen days from such publication or after a
different period provided by the legislature.

We also hold that the publication must be made forthwith, or at least as soon as possible, to give effect
to the law pursuant to the said Article 2. There is that possibility, of course, although not suggested by
the parties that a law could be rendered unenforceable by a mere refusal of the executive, for whatever
reason, to cause its publication as required. This is a matter, however, that we do not need to examine
at this time.

Finally, the claim of the former Solicitor General that the instant motion is a request for an advisory
opinion is untenable, to say the least, and deserves no further comment.

The days of the secret laws and the unpublished decrees are over. This is once again an open society,
with all the acts of the government subject to public scrutiny and available always to public cognizance.

4
This has to be so if our country is to remain democratic, with sovereignty residing in the people and all
government authority emanating from them.

Although they have delegated the power of legislation, they retain the authority to review the work of
their delegates and to ratify or reject it according to their lights, through their freedom of expression
and their right of suffrage. This they cannot do if the acts of the legislature are concealed.

Laws must come out in the open in the clear light of the sun instead of skulking in the shadows with
their dark, deep secrets. Mysterious pronouncements and rumored rules cannot be recognized as
binding unless their existence and contents are confirmed by a valid publication intended to make full
disclosure and give proper notice to the people. The furtive law is like a scabbarded saber that cannot
feint, parry or cut unless the naked blade is drawn.

WHEREFORE, it is hereby declared that all laws as above defined shall immediately upon their approval,
or as soon thereafter as possible, be published in full in the Official Gazette, to become effective only
after fifteen days from their publication, or on another date specified by the legislature, in accordance
with Article 2 of the Civil Code.

SO ORDERED.

Teehankee, C .J ., Feria, Yap, Narvasa, Melencio-Herrera, Alampay, Gutierrez, Jr ., and Paras, JJ ., concur.

Separate Opinions

FERNAN, J ., concurring:

While concurring in the Court's opinion penned by my distinguished colleague, Mr. Justice Isagani A.
Cruz, I would like to add a few observations. Even as a Member of the defunct Batasang Pambansa, I
took a strong stand against the insidious manner by which the previous dispensation had promulgated
and made effective thousands of decrees, executive orders, letters of instructions, etc. Never has the
law-making power which traditionally belongs to the legislature been used and abused to satisfy the
whims and caprices of a one-man legislative mill as it happened in the past regime. Thus, in those days,
it was not surprising to witness the sad spectacle of two presidential decrees bearing the same number,
although covering two different subject matters. In point is the case of two presidential decrees bearing
number 1686 issued on March 19, 1980, one granting Philippine citizenship to Michael M. Keon, the
then President's nephew and the other imposing a tax on every motor vehicle equipped with air-
conditioner. This was further exacerbated by the issuance of PD No. 1686-A also on March 19, 1980
granting Philippine citizenship to basketball players Jeffrey Moore and Dennis George Still. cdll

The categorical statement by this Court on the need for publication before any law may be made
effective seeks to prevent abuses on the part of the lawmakers and, at the same time, ensures to the
people their constitutional right to due process and to information on matters of public concern.

FELICIANO, J ., concurring:

5
I agree entirely with the opinion of the court so eloquently written by Mr. Justice Isagani A. Cruz. At the
same time, I wish to add a few statements to reflect my understanding of what the Court is saying.
cdlex

A statute which by its terms provides for its coming into effect immediately upon approval thereof, is
properly interpreted as coming into effect immediately upon publication thereof in the Official Gazette
as provided in Article 2 of the Civil Code. Such statute, in other words, should not be regarded as
purporting literally to come into effect immediately upon its approval or enactment and without need of
publication. For so to interpret such statute would be to collide with the constitutional obstacle posed
by the due process clause. The enforcement of prescriptions which are both unknown to and
unknowable by those subjected to the statute, has been throughout history a common tool of tyrannical
governments. Such application and enforcement constitutes at bottom a negation of the fundamental
principle of legality in the relations between a government and its people.

At the same time, it is clear that the requirement of publication of a statute in the Official Gazette, as
distinguished from any other medium such as a newspaper of general circulation, is embodied in a
statutory norm and is not a constitutional command. The statutory norm is set out in Article 2 of the
Civil Code and is supported and reinforced by Section 1 of Commonwealth Act No. 638 and Section 35 of
the Revised Administrative Code. A specification of the Official Gazette as the prescribed medium of
publication may therefore be changed. Article 2 of the Civil Code could, without creating a constitutional
problem, be amended by a subsequent statute providing, for instance, for publication either in the
Official Gazette or in a newspaper of general circulation in the country. Until such an amendatory statute
is in fact enacted, Article 2 of the Civil Code must be obeyed and publication effected in the Official
Gazette and not in any other medium.

6
 [G.R. No. 63915. April 24, 1985.]

LORENZO M. TAÑADA, ABRAHAM F. SARMIENTO, and MOVEMENT OF ATTORNEYS FOR

BROTHERHOOD, INTEGRITY AND NATIONALISM, INC. [MABINI], petitioners, vs. HON. JUAN C.
TUVERA, in his capacity as Executive Assistant to the President, HON. JOAQUIN VENUS, in his capacity
as Deputy Executive Assistant to the President, MELQUIADES P. DE LA CRUZ, in his capacity as
Director, Malacañang Records Office, and FLORENDO S. PABLO, in his capacity as Director, Bureau of
Printing, respondents.

Lorenzo M. Tañada, Abraham F. Sarmiento, Mabini Legal Aid Committee for petitioners

Solicitor General for respondents.

SYLLABUS

1. CONSTITUTIONAL LAW; STATUTES; PUBLICATION IN THE OFFICIAL GAZETTE; LEGAL

PERSONALITY OF PETITIONERS TO FILE MANDAMUS TO COMPEL PUBLICATION, RECOGNIZED. — The
subject of the petition is to compel the performance of a public duty and petitioners maintain they need
not show any specific interest for their petition to be given due course. The right sought to be enforced
by petitioners is a public right recognized by no less than the fundamental law of the land. If petitioners
were not allowed to institute this proceeding, it would indeed be difficult to conceive of any other
person to initiate the same, considering that the Solicitor General, the government officer generally
empowered to represent the people, has entered his appearance for respondents in this case.

2. ID.; ID.; ID.; ARTICLE 2 CIVIL CODE DOES NOT PRECLUDE PUBLICATION IN THE OFFICIAL GAZETTE
EVEN IF THE LAW ITSELF PROVIDES FOR DATE OF ITS EFFECTIVITY. — That publication in the Official
Gazette is not a sine qua non requirement for the effectivity of laws where the laws themselves provide
for their own effectivity dates is correct only insofar as it equates the effectivity of laws with the fact of
publication. Considered in the light of other statutes applicable to the issue at hand, the conclusion is
easily reached that said Article 2 does not preclude the requirement of publication in the Official
Gazette, even if the law itself provides for the date of its effectivity.

3. ID.; ID.; ID.; RATIONALE. — The clear object of Article 2 of the Civil Code is to give the general
public adequate notice of the various laws which are to regulate their actions and conduct as citizens.
Without such notice and publication, there would be no basis for the application of the maxim
"ignorantia legis non excusat." It would be the height of injustice to punish or otherwise burden a citizen
for the transgression of a law of which he had no notice whatsoever, not even a constructive one.

4. ID.; ID.; ID.; PUBLICATION OF PRESIDENTIAL ISSUANCES "OF A PUBLIC NATURE" OR "OF
GENERAL APPLICABILITY," A REQUIREMENT OF DUE PROCESS; UNPUBLISHED PRESIDENTIAL ISSUANCES
WITHOUT FORCE AND EFFECT. — The publication of all presidential issuances "of a public nature" or "of
general applicability" is mandated by law. Obviously, presidential decrees that provide for fines,
forfeitures or penalties for their violation or otherwise impose a burden on the people, such as tax and
revenue measures, fall within this category. Other presidential issuances which apply only to particular

7
persons such as administrative and executive orders need not be published on the assumption that they
have been circularized to all concerned. (People vs. Que Po Lay, 94 Phil. 640; Balbuena, et al. vs.
Secretary of Education, et al., 110 Phil. 150) It is needless to add that the publication of presidential
issuances "of a public nature" or "of general applicability" is a requirement of due process. It is a rule of
law that before a person may be bound by law, he must first be officially and specifically informed of its
contents. The Court therefore declares that presidential issuances of general application, which have not
been published, shall have no force and effect.

5. ID.; ID.; ID.; DECLARATION OF INVALIDITY OF UNPUBLISHED PRESIDENTIAL DECREES DOES NOT
AFFECT THOSE WHICH HAVE BEEN ENFORCED OR IMPLEMENTED PRIOR TO THEIR PUBLICATION. — The
implementation/enforcement of presidential decrees prior to their publication in the Official Gazette is
"an operative fact which may have consequences which cannot be justly ignored. The past cannot
always be erased by a new judicial declaration . . .that an all inclusive statement of a principle of
absolute retroactive invalidity cannot be justified."

FERNANDO, C.J., concurring with qualification:

1. CONSTITUTIONAL LAW; STATUTES; PUBLICATION REQUIREMENT NEED NOT BE CONFINED TO

THE OFFICIAL GAZETTE. — It is of course true that without the requisite publication, a due process
question would arise if made to apply adversely to a party who is not even aware of the existence of any
legislative or executive act having the force and effect of law. But such publication required need not be
confined to the Official Gazette. From the pragmatic standpoint, there is an advantage to be gained. It
conduces to certainty. That is to be admitted. It does not follow, however, that failure to do so would in
all cases and under all circumstances result in a statute, presidential decree, or any other executive act
of the same category being bereft of any binding force and effect. To so hold would raise a constitutional
question. Such a pronouncement would lend itself to the interpretation that such a legislative or
presidential act is bereft of the attribute of effectivity unless published in the Official Gazette. There is no
such requirement in the Constitution.

2. ID.; ID.; ID.; ID.; REQUIREMENT IN ART. 2 CIVIL CODE DOES NOT HAVE THE JUDICIAL FORCE OF A
CONSTITUTIONAL COMMAND. — The Chief Justice's qualified concurrence goes no further than to
affirm that publication is essential to the effectivity of a legislative or executive act of a general
application. He is not in agreement with the view that such publication must be in the Official Gazette.
The Civil Code itself in its Article 2 expressly recognizes that the rule as to laws taking effect after fifteen
days following the completion of their publication in the Official Gazette is subject to this exception,
"unless it is otherwise provided." Moreover, the Civil Code is itself only a legislative enactment, Republic
Act No. 386. It does not and cannot have the juridical force of a constitutional command. A later
legislative or executive act which has the force and effect of law can legally provide for a different rule.

3. ID.; ID.; ID.; TO DECLARE UNPUBLISHED PRESIDENTIAL ISSUANCES WITHOUT LEGAL FORCE AND
EFFECT WOULD RESULT IN UNDESIRABLE CONSEQUENCES. — Nor does the Chief Justice agree with the
rather sweeping conclusion in the opinion of Justice Escolin that presidential decrees and executive acts
not thus previously published in the Official Gazette would be devoid of any legal character. That would

8
be, in his opinion, to go too far. It may be fraught, as earlier noted, with undesirable consequences. He
finds himself therefore unable to yield assent to such a pronouncement.

TEEHANKEE, J., concurring:

1. CONSTITUTIONAL LAW; STATUTES, PUBLICATION IN THE OFFICIAL GAZETTE; NECESSARY

PURSUANT TO THE BASIC CONSTITUTIONAL REQUIREMENTS OF DUE PROCESS. — The Rule of Law
connotes a body of norms and laws published and ascertainable and of equal application to all similarly
circumstanced and not subject to arbitrary change but only under certain set procedure. The Court had
consistently stressed that "it is an elementary rule of fair play and justice that a reasonable opportunity
to be informed must be afforded to the people who are commanded to obey before they can be
punished for its violation," (People vs. de Dios, G.R. No. L-11003, August 31, 1959, per the late Chief
Justice Paras) citing the settled principle based on due process enunciated in earlier cases that "before
the public is bound by its contents. especially its penal provisions, a law, regulation or circular must first
be published and the people officially and specially informed of said contents and its penalties." Without
official publication in the Official Gazette as required by Article 2 of the Civil Code and Revised
Administrative Code, there would be no basis nor justification for the corollary rule of Article 3 of the
Civil Code (based on constructive notice that the provisions of the law are ascertainable from the public
and official repository where they are duly published) that "Ignorance of the law excuses no one from
compliance therewith."

2. ID.; ID.; ID.; RESPONDENTS' CONTENTION THAT "ONLY LAWS WHICH ARE SILENT AS TO THEIR
EFFECTIVITY DATE NEED TO BE PUBLISHED IN THE OFFICIAL GAZETTE FOR THEIR EFFECTIVITY,"
UNTENABLE. — The plain text and meaning of the Civil Code is that "laws shall take effect after fifteen
days following the completion of their publication in the Official Gazette, unless it is otherwise
provided," i.e. a different effectivity date is provided by the law itself. This proviso perforce refers to a
law that had been duly published pursuant to the basic constitutional requirements of due process. The
best example of this is the Civil Code itself: the same Article 2 provides otherwise that it "shall take
effect (only) one year (not 15 days) after such publication." To sustain respondents misreading that
"most laws or decrees specify the date of their effectivity and for this reason, publication in the Official
Gazette is not necessary for their effectivity" would be to nullify and render nugatory the Civil Code's
indispensable and essential requirement of prior publication in the Official Gazette by the simple
expedient of providing for immediate effectivity or an earlier effectivity date in the law itself before the
completion of 15 days following its publication which is the period generally fixed by the Civil Code for
its proper dissemination.

MELENCIO-HERRERA, J., concurring:

CONSTITUTIONAL LAW; STATUTES; PUBLICATION IN THE OFFICIAL GAZETTE; RETROACTIVITY IN

EFFECTIVITY DATE NOT ALLOWED WHERE IT WILL RUN COUNTER TO CONSTITUTIONAL RIGHTS OR
DESTROY VESTED RIGHTS. — There cannot be any question but that even if a decree provides for a date
of effectivity, it has to be published. When a date effectivity is mentioned in the decree but the decree
becomes effective only fifteen (15) days after its publication in the Official Gazette, it will not mean that

9
the decree can have retroactive effect to the date of effectivity mentioned in the decree itself. There
should be no retroactivity if the retroactivity will run counter to constitutional rights or shall destroy
vested rights.

PLANA, J., separate opinion:

1. CONSTITUTIONAL LAW; STATUTES; PUBLICATION IN THE OFFICIAL GAZETTE NOT ESSENTIAL FOR
EFFECTIVITY FOR EFFECTIVITY OF LAWS. — The Philippine Constitution does not require the publication
of laws as a prerequisite for their effectivity, unlike some Constitutions elsewhere. It may be said though
that the guarantee of due process requires notice of laws to affected parties before they can be bound
thereby; but such notice is not necessarily by publication in the Official Gazette. The due process clause
is not that precise. Neither is the publication in the Official Gazette required by any statute as a
prerequisite for their effectivity, if said laws already provide for their effectivity date.

2. ID.; ID.; PUBLICATION MAY BE MADE ELSEWHERE THAN IN THE OFFICIAL GAZETTE. — Article 2
of the Civil Code provides that "laws shall take effect after fifteen days following the completion of their
publication in the Official Gazette, unless it is otherwise provided." Two things may be said of this
provision: Firstly, it obviously does not apply to a law with a built-in provision as to when it will take
effect. Secondly, it clearly recognizes that each law may provide not only a different period for reckoning
its effectivity date but also a different mode of notice. Thus, a law may prescribe that it shall be
published elsewhere than in the Official Gazette.

3. ID.; ID.; COMMONWEALTH ACT 638 CANNOT NULLIFY OR RESTRICT OPERATION OF A STATUTE
WITH A PROVISION AS TO ITS EFFECTIVITY. — Not all legislative acts are required to be published in the
Official Gazette but only "important" ones "of a public nature." Moreover, Commonwealth Act No. 638
does not provide that publication in the Official Gazette is essential for the effectivity of laws. This is as it
should be, for all statutes are equal and stand on the same footing. A law, especially an earlier one of
general application such as Commonwealth Act No. 638, cannot nullify or restrict the operation of a
subsequent statute that has a provision of its own as to when and how it will take effect. Only a higher
law, which is the Constitution, can assume the role.

DECISION

ESCOLIN, J p:

Invoking the people's right to be informed on matters of public concern, a right recognized in Section 6,
Article IV of the 1973 Philippine Constitution, 1 as well as the principle that laws to be valid and
enforceable must be published in the Official Gazette or otherwise effectively promulgated, petitioners
seek a writ of mandamus to compel respondent public officials to publish, and or cause the publication
in the Official Gazette of various presidential decrees, letters of instructions, general orders,
proclamations, executive orders, letter of implementation and administrative orders.

Specifically, the publication of the following presidential issuances is sought:

10
a] Presidential Decrees Nos. 12, 22, 37, 38, 59, 64, 103, 171, 179, 184, 197, 200, 234, 265, 286, 298,
303, 312, 324, 325, 326, 337, 355, 358, 359, 360, 361, 368, 404, 406, 415, 427, 429, 445, 447, 473, 486,
491, 503, 504, 521, 528, 551, 566, 573, 574, 594, 599, 644, 658, 661, 718, 731, 733, 793, 800, 802, 835,
836, 923, 935, 961, 1017-1030, 1050, 1060-1061, 1085, 1143, 1165, 1166, 1242, 1246, 1250, 1278, 1279,
1300, 1644, 1772, 1808, 1810, 1813-1817, 1819-1826, 1829-1840, 1842-1847.

b] Letter of Instructions Nos.: 10, 39, 49, 72, 107, 108, 116, 130, 136, 141, 150, 153, 155, 161, 173,
180, 187, 188, 192, 193, 199, 202, 204, 205, 209, 211-213, 215-224, 226-228, 231-239, 241-245, 248-
251, 253-261, 263-269, 271-273, 275-283, 285-289, 291, 293, 297-299, 301-303, 309, 312-315, 325, 327,
343, 346, 349, 357, 358, 362, 367, 370, 382, 385, 386, 396-397, 405, 438-440, 444-445, 473, 486, 488,
498, 501, 399, 527, 561, 576, 587, 594, 599, 600, 602, 609, 610, 611, 612, 615, 641, 642, 665, 702, 712-
713, 726, 837-839, 878-879, 881, 882, 939-940, 964, 997, 1149-1178, 1180-1278.

c] General Orders Nos.: 14, 52, 58, 59, 60, 62, 63, 64 & 65.

d] Proclamation Nos.: 1126, 1144, 1147, 1151, 1196, 1270, 1281, 1319-1526, 1529, 1532, 1535,
1538, 1540-1547, 1550-1558, 1561-1588, 1590-1595, 1594-1600, 1606-1609, 1612-1628, 1630-1649,
1694-1695, 1697-1701, 1705-1723, 1731-1734, 1737-1742, 1744, 1746-1751, 1752, 1754, 1762, 1764-
1787, 1789-1795, 1797, 1800, 1802-1804, 1806-1807, 1812-1814, 1816, 1825-1826, 1829, 1831-1832,
1835-1836, 1839-1840, 1843-1844, 1846-1847, 1849, 1853-1858, 1860, 1866, 1868, 1870, 1876-1889,
1892, 1900, 1918, 1923, 1933, 1952, 1963, 1965-1966, 1968-1984, 1986-2028, 2030-2044, 2046-2145,
2147-2161, 2163-2244.

e] Executive Orders Nos.: 411, 413, 414, 427, 429-454, 457-471, 474-492, 494-507, 509-510, 522,
524-528, 531-532, 536, 538, 543-544, 549, 551-553, 560, 563, 567-568, 570, 574, 593, 594, 598-604,
609, 611-647, 649-677, 679-703, 705-707, 712-786, 788-852, 854-857.

f] Letters of Implementation Nos.: 7, 8, 9, 10, 11-22, 25-27, 39, 50, 51, 59, 76, 80-81, 92, 94, 95,
107, 120, 122, 123.

g] Administrative Orders Nos.: 347, 348, 352-354, 360-378, 380-433, 436-439.

The respondents, through the Solicitor General, would have this case dismissed outright on the ground
that petitioners have no legal personality or standing to bring the instant petition. The view is submitted
that in the absence of any showing that petitioners are personally and directly affected or prejudiced by
the alleged non-publication of the presidential issuances in question 2 said petitioners are without the
requisite legal personality to institute this mandamus proceeding, they are not being "aggrieved parties"
within the meaning of Section 3, Rule 65 of the Rules of Court, which we quote: Cdpr

"SEC. 3. Petition for Mandamus. — When any tribunal, corporation, board or person unlawfully neglects
the performance of an act which the law specifically enjoins as a duty resulting from an office, trust, or
station, or unlawfully excludes another from the use and enjoyment of a right or office to which such
other is entitled, and there is no other plain, speedy and adequate remedy in the ordinary course of law,
the person aggrieved thereby may file a verified petition in the proper court alleging the facts with

11
certainty and praying that judgment be rendered commanding the defendant, immediately or at some
other specified time, to do the act required to be done to protect the rights of the petitioner, and to pay
the damages sustained by the petitioner by reason of the wrongful acts of the defendant."

Upon the other hand, petitioners maintain that since the subject of the petition concerns a public right
and its object is to compel the performance of a public duty, they need not show any specific interest for
their petition to be given due course.

The issue posed is not one of first impression. As early as the 1910 case of Severino vs. Governor
General, 3 this Court held that while the general rule is that "a writ of mandamus would be granted to a
private individual only in those cases where he has some private or particular interest to be subserved,
or some particular right to be protected, independent of that which he holds with the public at large,"
and "it is for the public officers exclusively to apply for the writ when public rights are to be subserved
[Mitchell vs. Boardmen, 79 M.e., 469]," nevertheless, "when the question is one of public right and the
object of the mandamus is to procure the enforcement of a public duty, the people are regarded as the
real party in interest and the relator at whose instigation the proceedings are instituted need not show
that he has any legal or special interest in the result, it being sufficient to show that he is a citizen and as
such interested in the execution of the laws [High, Extraordinary Legal Remedies, 3rd ed., sec. 431]."

Thus, in said case, this Court recognized the relator Lope Severino, a private individual, as a proper party
to the mandamus proceedings brought to compel the Governor General to call a special election for the
position of municipal president in the town of Silay, Negros Occidental. Speaking for this Court, Mr.
Justice Grant T. Trent said:

"We are therefore of the opinion that the weight of authority supports the proposition that the relator is
a proper party to proceedings of this character when a public right is sought to be enforced. If the
general rule in America were otherwise, we think that it would not be applicable to the case at bar for
the reason 'that it is always dangerous to apply a general rule to a particular case without keeping in
mind the reason for the rule, because, if under the particular circumstances the reason for the rule does
not exist, the rule itself is not applicable and reliance upon the rule may well lead to error.'

"No reason exists in the case at bar for applying the general rule insisted upon by counsel for the
respondent. The circumstances which surround this case are different from those in the United States,
inasmuch as if the relator is not a proper party to these proceedings no other person could be, as we
have seen that it is not the duty of the law officer of the Government to appear and represent the
people in cases of this character."

The reasons given by the Court in recognizing a private citizen's legal personality in the aforementioned
case apply squarely to the present petition. Clearly, the right sought to be enforced by petitioners herein
is a public right recognized by no less than the fundamental law of the land. If petitioners were not
allowed to institute this proceeding, it would indeed be difficult to conceive of any other person to
initiate the same, considering that the Solicitor General, the government officer generally empowered to
represent the people, has entered his appearance for respondents in this case.

12
Respondents further contend that publication in the Official Gazette is not a sine qua non requirement
for the effectivity of laws where the laws themselves provide for their own effectivity dates. It is thus
submitted that since the presidential issuances in question contain special provisions as to the date they
are to take effect, publication in the Official Gazette is not indispensable for their effectivity. The point
stressed is anchored on Article 2 of the Civil Code:

"Art. 2. Laws shall take effect after fifteen days following the completion of their publication in the
Official Gazette, unless it is otherwise provided, . . ."

The interpretation given by respondent is in accord with this Court's construction of said article. In a
long line of decisions, 4 this Court has ruled that publication in the Official Gazette is necessary in those
cases where the legislation itself does not provide for its effectivity date — for then the date of
publication is material for determining its date of effectivity, which is the fifteenth day following its
publication — but not when the law itself provides for the date when it goes into effect.

Respondents' argument, however, is logically correct only insofar as it equates the effectivity of laws
with the fact of publication. Considered in the light of other statutes applicable to the issue at hand, the
conclusion is easily reached that said Article 2 does not preclude the requirement of publication in the
Official Gazette, even if the law itself provides for the date of its effectivity. Thus, Section 1 of
Commonwealth Act 638 provides as follows:

"Section 1. There shall be published in the Official Gazette [1] all important legislative acts and
resolutions of a public nature of the Congress of the Philippines; [2] all executive and administrative
orders and proclamations, except such as have no general applicability; [3] decisions or abstracts of
decisions of the Supreme Court and the Court of Appeals as may be deemed by said courts of sufficient
importance to be so published; [4] such documents or classes of documents as may be required so to be
published by law; and [5] such documents or classes of documents as the President of the Philippines
shall determine from time to time to have general applicability and legal effect, or which he may
authorize so to be published. . . ."

The clear object of the above quoted provision is to give the general public adequate notice of the
various laws which are to regulate their actions and conduct as citizens. Without such notice and
publication, there would be no basis for the application of the maxim "ignorantia legis non excusat." It
would be the height of injustice to punish or otherwise burden a citizen for the transgression of a law of
which he had no notice whatsoever, not even a constructive one.

Perhaps at no time since the establishment of the Philippine Republic has the publication of laws taken
so vital significance that at this time when the people have bestowed upon the President a power
heretofore enjoyed solely by the legislature. While the people are kept abreast by the mass media of the
debates and deliberations in the Batasan Pambansa — and for the diligent ones, ready access to the
legislative records — no such publicity accompanies the law-making process of the President. Thus,
without publication, the people have no means of knowing what presidential decrees have actually been
promulgated, much less a definite way of informing themselves of the specific contents and texts of

13
such decrees. As the Supreme Court of Spain ruled: "Bajo la denominacion genrica de leyes, se
comprenden tambin los reglamentos, Reales decretos, Instrucciones, Circulares y Reales ordines
dictadas de conformidad con las mismas por el Gobierno en uso de su potestad." 5

The very first clause of Section 1 of Commonwealth Act 638 reads: "There shall be published in the
Official Gazette . . ." The word "shall" used therein imposes upon respondent officials an imperative
duty. That duty must be enforced if the Constitutional right of the people to be informed on matters of
public concern is to be given substance and reality. The law itself makes a list of what should be
published in the official Gazette. Such listing, to our mind, leaves respondents with no discretion
whatsoever as to what must be included or excluded from such publication.

The publication of all presidential issuances "of a public nature" or "of general applicability" is mandated
by law. Obviously, presidential decrees that provide for fines, forfeitures or penalties for their violation
or otherwise impose a burden on the people, such as tax and revenue measures, fall within this
category. Other presidential issuances which apply only to particular persons or class of persons such as
administrative and executive orders need not be published on the assumption that they have been
circularized to all concerned. 6

It is needless to add that the publication of presidential issuances "of a public nature" or "of general
applicability" is a requirement of due process. It is a rule of law that before a person may be bound by
law, he must first be officially and specifically informed of its contents. As Justice Claudio Teehankee said
in Peralta vs. COMELEC: 7

"In a time of proliferating decrees, orders and letters of instructions which all form part of the law of the
land, the requirement of due process and the Rule of Law demand that the Official Gazette as the official
government repository promulgate and publish the texts of all such decrees, orders and instructions so
that the people may know where to obtain their official and specific contents."

The Court therefore declares that presidential issuances of general application, which have not been
published, shall have no force and effect. Some members of the Court, quite apprehensive about the
possible unsettling effect this decision might have on acts done in reliance of the validity of those
presidential decrees which were published only during the pendency of this petition, have put the
question as to whether the Court's declaration of invalidity apply to P.D.s which had been enforced or
implemented prior to their publication. The answer is all too familiar. In similar situations in the past this
Court had taken the pragmatic and realistic course set forth in Chicot County Drainage District vs. Baxter
Bank 8 to wit:

"The courts below have proceeded on the theory that the Act of Congress, having been found to be
unconstitutional, was not a law; that it was inoperative, conferring no rights and imposing no duties, and
hence affording no basis for the challenged decree. Norton v. Shelby County, 118 U.S. 425, 442; Chicago,
I. & L. Ry. Co. v. Hackett, 228 U.S. 559, 566. It is quite clear, however, that such broad statements as to
the effect of a determination of unconstitutionality must be taken with qualifications. The actual
existence of a statute, prior to such a determination, is an operative fact and may have consequences
which cannot justly be ignored. The past cannot always be erased by a new judicial declaration. The

14
effect of the subsequent ruling as to invalidity may have to be considered in various aspects — with
respect to particular conduct, private and official. Questions of rights claimed to have become vested, of
status, of prior determinations deemed to have finality and acted upon accordingly, of public policy in
the light of the nature both of the statute and of its previous application, demand examination. These
questions are among the most difficult of those which have engaged the attention of courts, state and
federal, and it is manifest from numerous decisions that an all-inclusive statement of a principle of
absolute retroactive invalidity cannot be justified."

Consistently with the above principle, this Court in Rutter vs. Esteban 9 sustained the right of a party
under the Moratorium Law, albeit said right had accrued in his favor before said law was declared
unconstitutional by this Court.

Similarly, the implementation/enforcement of presidential decrees prior to their publication in the

Official Gazette is "an operative fact which may have consequences which cannot be justly ignored. The
past cannot always be erased by a new judicial declaration . . . that an all-inclusive statement of a
principle of absolute retroactive invalidity cannot be justified."

From the report submitted to the Court by the Clerk of Court, it appears that of the presidential decrees
sought by petitioners to be published in the Official Gazette, only Presidential Decrees Nos. 1019 to
1030, inclusive, 1278, and 1937 to 1939, inclusive, have not been so published. 10 Neither the subject
matters nor the texts of these PDs can be ascertained since no copies thereof are available. But
whatever their subject matter may be, it is undisputed that none of these unpublished PDs has ever
been implemented or enforced by the government. In Pesigan vs. Angeles, 11 the Court, through
Justice Ramon Aquino, ruled that "publication is necessary to apprise the public of the contents of
[penal] regulations and make the said penalties binding on the persons affected thereby." The cogency
of this holding is apparently recognized by respondent officials considering the manifestation in their
comment that "the government, as a matter of policy, refrains from prosecuting violations of criminal
laws until the same shall have been published in the Official Gazette or in some other publication, even
though some criminal laws provide that they shall take effect immediately."

WHEREFORE, the Court hereby orders respondents to publish in the Official Gazette all unpublished
presidential issuances which are of general application, and unless so published, they shall have no
binding force and effect.

SO ORDERED.

Relova, J., concur.

Aquino, J., took no part.

Concepcion, Jr., J., is on leave.

Gutierrez, Jr., J., I concur insofar as publication is necessary but reserve my vote as to the necessity of
such publication being in the Official Gazette.

15
De la Fuente, J., Insofar as the opinion declares the unpublished decrees and issuances of a public nature
or general applicability ineffective, until due publication thereof.

Separate Opinions

FERNANDO, C.J., concurring with qualification:

There is on the whole acceptance on my part of the views expressed in the ably written opinion of
Justice Escolin. I am unable, however, to concur insofar as it would unqualifiedly impose the
requirement of publication in the Official Gazette for unpublished "presidential issuances" to have
binding force and effect.

I shall explain why.

1. It is of course true that without the requisite publication, a due process question would arise if
made to apply adversely to a party who is not even aware of the existence of any legislative or executive
act having the force and effect of law. My point is that such publication required need not be confined
to the Official Gazette. From the pragmatic standpoint, there is an advantage to be gained. It conduces
to certainty. That is too be admitted. It does not follow, however, that failure to do so would in all cases
and under all circumstances result in a statute, presidential decree or any other executive act of the
same category being bereft of any binding force and effect. To so hold would, for me, raise a
constitutional question. Such a pronouncement would lend itself to the interpretation that such a
legislative or presidential act is bereft of the attribute of effectivity unless published in the Official
Gazette. There is no such requirement in the Constitution as Justice Plana so aptly pointed out. It is true
that what is decided now applies only to past "presidential issuances." Nonetheless, this clarification is,
to my mind, needed to avoid any possible misconception as to what is required for any statute or
presidential act to be impressed with binding force or effectivity.

2. It is quite understandable then why I concur in the separate opinion of Justice Plana. Its first
paragraph sets forth what to me is the constitutional doctrine applicable to this case. Thus: "The
Philippine Constitution does not require the publication of laws as a prerequisite for their effectivity,
unlike some Constitutions elsewhere. It may be said though that the guarantee of due process requires
notice of laws to affected parties before they can be bound thereby; but such notice is not necessarily by
publication in the Official Gazette. The due process clause is not that precise." 1 I am likewise in
agreement with its closing paragraph: "In fine, I concur in the majority decision to the extent that it
requires notice before laws become effective, for no person should be bound by a law without notice.
This is elementary fairness. However, I beg to disagree insofar as it holds that such notice shall be by
publication in the Official Gazette." 2

3. It suffices, as was stated by Judge Learned Hand, that law as the command of the government
"must be ascertainable in some form if it is to be enforced at all." 3 It would indeed be to reduce it to
the level of mere futility, as pointed out by Justice Cardozo, "if it is unknown and unknowable." 4
Publication, to repeat, is thus essential. What I am not prepared to subscribe to is the doctrine that it
must be in the Official Gazette. To be sure once published therein there is the ascertainable mode of

16
determining the exact date of its effectivity. Still for me that does not dispose of the question of what is
the jural effect of past presidential decrees or executive acts not so published. For prior thereto, it could
be that parties aware of their existence could have conducted themselves in accordance with their
provisions. If no legal consequences could attach due to lack of publication in the Official Gazette, then
serious problems could arise. Previous transactions based on such "Presidential Issuances" could be
open to question. Matters deemed settled could still be inquired into. I am not prepared to hold that
such an effect is contemplated by our decision. Where such presidential decree or executive act is made
the basis of a criminal prosecution, then, of course, its ex post facto character becomes evident. 5 In civil
cases though, retroactively as such is not conclusive on the due process aspect. There must still be a
showing of arbitrariness. Moreover, where the challenged presidential decree or executive act was
issued under the police power, the non-impairment clause of the Constitution may not always be
successfully invoked. There must still be that process of balancing to determine whether or not it could
in such a case be tainted by infirmity. 6 In traditional terminology, there could arise then a question of
unconstitutional application. That is as far as it goes.

4. Let me make therefore that my qualified concurrence goes no further than to affirm that
publication is essential to the effectivity of a legislative or executive act of a general application. I am not
in agreement with the view that such publication must be in the Official Gazette. The Civil Code itself in
its Article 2 expressly recognizes that the rule as to laws taking effect after fifteen days following the
completion of their publication in the Official Gazette is subject to this exception, "unless it is otherwise
provided." Moreover, the Civil Code is itself only a legislative enactment, Republic Act No. 386. It does
not and cannot have the juridical force of a constitutional command. A later legislative or executive act
which has the force and effect of law can legally provide for a different rule.

5. Nor can I agree with the rather sweeping conclusion in the opinion of Justice Escolin that
presidential decrees and executive acts not thus previously published in the Official Gazette would be
devoid of any legal character. That would be, in my opinion, to go too far. It may be fraught, as earlier
noted, with undesirable consequences. I find myself therefore unable to yield assent to such a
pronouncement.

I am authorized to state that Justices Makasiar, Abad Santos, Cuevas, and Alampay concur in this
separate opinion.

Makasiar, Abad Santos, Cuevas and Alampay, JJ., concur.

TEEHANKEE, J., concurring:

I concur with the main opinion of Mr. Justice Escolin and the concurring opinion of Mme. Justice
Herrera. The Rule of Law connotes a body of norms and laws published and ascertainable and of equal
application to all similarly circumstanced and not subject to arbitrary change but only under certain set
procedures. The Court has consistently stressed that "it is an elementary rule of fair play and justice that
a reasonable opportunity to be informed must be afforded to the people who are commanded to obey
before they can be punished for its violation," 1 citing the settled principle based on due process
enunciated in earlier cases that "before the public is bound by its contents, especially its penal

17
provisions, a law, regulation or circular must first be published and the people officially and specially
informed of said contents and its penalties."

Without official publication in the Official Gazette as required by Article 2 of the Civil Code and the
Revised Administrative Code, there would be no basis nor justification for the corollary rule of Article 3
of the Civil Code (based on constructive notice that the provisions of the law are ascertainable from the
public and official repository where they are duly published) that "Ignorance of the law excuses no one
from compliance therewith."

Respondents' contention based on a misreading of Article 2 of the Civil Code that "only laws which are
silent as to their effectivity [date] need be published in the Official Gazette for their effectivity" is
manifestly untenable. The plain text and meaning of the Civil Code is that "laws shall take effect after
fifteen days following the completion of their publication in the Official Gazette, unless it is otherwise
provided," i.e. a different effectivity date is provided by the law itself. This proviso perforce refers to a
law that has been duly published pursuant to the basic constitutional requirements of due process. The
best example of this is the Civil Code itself: the same Article 2 provides otherwise that it "shall take
effect [only] one year [not 15 days] after such publication." 2 To sustain respondents' misreading that
"most laws or decrees specify the date of their effectivity and for this reason, publication in the Official
Gazette is not necessary for their effectivity" 3 would be to nullify and render nugatory the Civil Code's
indispensable and essential requirement of prior publication in the Official Gazette by the simple
expedient of providing for immediate effectivity or an earlier effectivity date in the law itself before the
completion of 15 days following its publication which is the period generally fixed by the Civil Code for
its proper dissemination.

MELENCIO-HERRERA, J., concurring:

I agree. There cannot be any question but that even if a decree provides for a date of effectivity, it has to
be published. What I would like to state in connection with that proposition is that when a date of
effectivity is mentioned in the decree but the decree becomes effective only fifteen (15) days after its
publication in the Official Gazette, it will not mean that the decree can have retroactive effect to the
date of effectivity mentioned in the decree itself. There should be no retroactivity if the retroactivity will
run counter to constitutional rights or shall destroy vested rights.

PLANA, J., concurring and dissenting:

The Philippine Constitution does not require the publication of laws as a prerequisite for their effectivity,
unlike some Constitutions elsewhere. * It may be said though that the guarantee of due process
requires notice of laws to affected parties before they can be bound thereby; but such notice is not
necessarily by publication in the Official Gazette. The due process clause is not that precise. Neither is
the publication of laws in the Official Gazette required by any statute as a prerequisite for their
effectivity, if said laws already provide for their effectivity date.

Article 2 of the Civil Code provides that "laws shall take effect after fifteen days following the completion
of their publication in the Official Gazette, unless it is otherwise provided." Two things may be said of

18
this provision: Firstly, it obviously does not apply to a law with a built-in provision as to when it will take
effect. Secondly, it clearly recognizes that each law may provide not only a different period for reckoning
its effectivity date but also a different mode of notice. Thus, a law may prescribe that it shall be
published elsewhere than in the Official Gazette.

Commonwealth Act No. 638, in my opinion, does not support the proposition that for their effectivity,
laws must be published in the Official Gazette. The said law is simply "An Act to Provide for the Uniform
Publication and Distribution of the Official Gazette." Conformably therewith, it authorizes the
publication of the Official Gazette, determines its frequency, provides for its sale and distribution, and
defines the authority of the Director of Printing in relation thereto. It also enumerates what shall be
published in the Official Gazette, among them, "important legislative acts and resolutions of a public
nature of the Congress of the Philippines" and "all executive and administrative orders and
proclamations, except such as have no general applicability." It is noteworthy that not all legislative acts
are required to be published in the Official Gazette but only "important" ones "of a public nature."
Moreover, the said law does not provide that publication in the Official Gazette is essential for the
effectivity of laws. This is as it should be, for all statutes are equal and stand on the same footing. A law,
especially an earlier one of general application such as Commonwealth Act No. 638, cannot nullify or
restrict the operation of a subsequent statute that has a provision of its own as to when and how it will
take effect. Only a higher law, which is the Constitution, can assume that role.

In fine, I concur in the majority decision to the extent that it requires notice before laws become
effective, for no person should be bound by a law without notice. This is elementary fairness. However, I
beg to disagree insofar as it holds that such notice shall be by publication in the Official Gazette.

Cuevas and Alampay, JJ., concur.

19
 [G.R. No. 46623. December 7, 1939.]

MARCIAL KASILAG, petitioner, vs. RAFAELA RODRIGUEZ, URBANO ROQUE, SEVERO MAPILISAN and
IGNACIO DEL ROSARIO, respondents.

Luis M. Kasilag; for petitioner.

Fortunato de Leon; for respondents.

SYLLABUS

1. CONTRACTS, INTERPRETATION; MORTGAGE OF IMPROVEMENTS UPON LAND ACQUIRED AS

HOMESTEAD. — The cardinal rule in the interpretation of contracts is to the effect that the intention of
the contracting parties should always prevail because their will has the force of law between them.
Article 1281 of the Civil Code consecrates this rule and provides, further, that if the terms of a contract
are clear and leave no doubt as to the intention of the contracting parties, the literal sense of its
stipulations shall be followed; and if the words appear to be contrary to the evident intention of the
contracting parties, the intention shall prevail. The contract set out in Exhibit 1' should be interpreted in
accordance with these rules. As the terms thereof are clear and leave no room for doubt, it should be
interpreted according to the literal meaning of its clauses. The words used by the contracting parties in
Exhibit 1 clearly show that they intended to enter into the principal contract of loan in the amount of
P1,000, with interest at 12 per cent per annum, and into the accessory contract of mortgage of the
improvements on the land acquired as homestead, the parties having, moreover, agreed upon the pacts
and conditions stated in the deed. In other words, the parties entered into a contract of mortgage of the
improvements on the land acquired as homestead, to secure the payment of the indebtedness for
P1,000 and the stipulated interest thereon.

2. ID.; ID.; ID.; ANTICHRESIS. — Another fundamental rule in the interpretation of contracts, not
less important than those indicated is to the effect that the terms, clauses and conditions contrary to
law, morals and public order should be separated from the valid and legal contract when such
separation can be made because they are independent of the valid contract which expresses the will of
the contracting parties. Addressing ourselves now to the contract entered into by the parties, set out in
Exhibit 1, we stated that the principal contract is that of loan and the accessory that of mortgage of the
improvements upon the land acquired as a homestead. There is no question that the first of these
contracts is valid as it is not against the law. The second, or the mortgage of the improvements, is
expressly authorized by section 116 of Act No. 2874, as amended by section 23 of Act No. 3517. It will be
recalled that by clause VIII of Exhibit 1 the parties agreed that should E. A. fail to redeem the mortgage
within the stipulated period of four and a half years, by paying the loan together with interest, she
would execute in favor of the petitioner an absolute deed of sale of the land for P1,000, including the
interest stipulated and owing. This stipulation was verbally modified by the same parties after the
expiration of one year, in the sense that the petitioner would take possession of the land and would
benefit by the fruits thereof on condition that he would condone the payment of interest upon the loan
and he would attend to the payment of the land tax. These pacts made by the parties independently,
were calculated to alter the mortgage contract clearly entered into, converting the latter into a contract

20
of antichresis (article 1881 of the Civil Code). The contract of antichresis, being a real incumbrance
burdening the land, is illegal and void because it is condemned by section 116 of Act No. 2874, as
amended, but the clauses regarding the contract of antichresis being independent and separable from
the contract of mortgage, can be eliminated, thereby leaving the latter in being because it is legal and
valid.

3. ID.; ID.; ID.; ID.; POSSESSION IN GOOD FAITH. — It is a fact that the petitioner is not conversant
with the laws because he is not a lawyer. In accepting the mortgage of the improvements he proceeded
on the well-grounded belief that he was not violating the prohibition regarding the alienation of the
land. In taking possession thereof and in consenting to receive its fruits, he did not know, as clearly as a
jurist does, that the possession and enjoyment of the fruits are attributes of the contract of antichresis
and that the latter, as a lien, was prohibited by section 116. These considerations again bring us to the
conclusion that, as to the petitioner, his ignorance of the provisions of section 116 is excusable and may,
therefore, be the basis of his good faith. We do not give much importance to the change of the tax
declaration, which consisted in making the petitioner appear as the owner of the land, because such an
act may only be considered as a sequel to the change of possession and enjoyment of the fruits by the
petitioner, about which we have stated that the petitioner's ignorance of the law is possible and
excusable. We, therefore, hold that the petitioner acted in good faith in taking possession of the land
and enjoying its fruits.

4. ID.; ID.; ID.; ID.; ID. — The petitioner being a possessor in good faith within the meaning of
article 433 of the Civil Code and having introduced the improvements upon the land as such, the
provisions of article 361 of the same Code are applicable; wherefore, the respondents are entitled to
have the improvements and plants upon indemnifying the petitioner the value thereof which we fix at
P3,000, as appraised by the trial court; or the respondents may elect to compel the petitioner to have
the land by paying its market value to be fixed by the court of origin.

DECISION

IMPERIAL, J p:

This is an appeal taken by the defendant-petitioner from the decision of the Court of Appeals which
modified that rendered by the Court of First Instance of Bataan in civil case No. 1504 of said court and
held: that the contract, Exhibit "1" is entirely null and void and without effect; that the plaintiffs-
respondents, then appellants, are the owners of the disputed land, with its improvements, in common
ownership with their brother Gavino Rodriguez, hence, they are entitled to the possession thereof; that
the defendant-petitioner should yield possession of the land in their favor, with all the improvements
thereon and free from any lien; that the plaintiffs-respondents jointly and severally pay to the
defendant-petitioner the sum of P1,000 with interest at 6 per cent per annum from the date of the
decision; and absolved the plaintiffs-respondents from the cross-complaint relative to the value of the
improvements claimed by the defendant-petitioner. The appealed decision also ordered the registrar of
deeds of Bataan to cancel certificate of title No. 325, in the name of the deceased Emiliana Ambrosio
and to issue in lieu thereof another certificate of title in favor of the plaintiffs-respondents and their

21
brother Gavino Rodriguez, as undivided owners in equal parts, free of all liens and incumbrances except
those expressly provided by law, without special pronouncement as to the costs.

The respondents, children and heirs of the deceased Emiliana Ambrosio, commenced the aforesaid civil
case to the end that they recover from the petitioner the possession of the land and its improvements
granted by way of homestead to Emiliana Ambrosio under patent No. 16074 issued on January 11, 1931,
with certificate of title No. 325 issued by the registrar of deeds of Bataan on June 27, 1931 in her favor,
under section 122 of Act. No. 496, which land was surveyed and identified in the cadastre of the
municipality of Limay, Province of Bataan, as lot No. 285; that the petitioner pay to them the sum of
P650 being the approximate value of the fruits which he received from the land; that the petitioner sign
all the necessary documents to transfer the land and its possession to the respondents; that the
petitioner be restrained, during the pendency of the case, from conveying or encumbering the land and
its improvements; that the registrar of deeds of Bataan cancel certificate of title No. 325 and issue in lieu
thereof another in favor of the respondents, and that the petitioner pay the costs of suit.

The petitioner denied in his answer all the material allegations of the complaint and by way of special
defense alleged that he was in possession of the land and that he was receiving the fruits thereof by
virtue of a mortgage contract, entered into between him and the deceased Emiliana Ambrosio on May
16, 1932, which was duly ratified by a notary public; and in counterclaim asked that the respondents pay
him the sum of P1,000 with 12 per cent interest per annum which the deceased owed him and that,
should the respondents be declared to have a better right to the possession of the land, that they be
sentenced to pay him the sum of P5,000 as value of all the improvements which he introduced upon the
land.

On May 16, 1932 Emiliana Ambrosio, in life, and the petitioner executed the following public deed: "This
agreement, made and entered into this 16th day of May, 1932, by and between Emiliana Ambrosio,
Filipino, of legal age, widow and resident of Limay, Bataan, P. I., hereinafter called the party of the first
part, and Marcial Kasilag, Filipino, of legal age, married to Asuncion Roces, and resident at 312 Perdigon
Street, Manila, P. I., hereinafter called party of the second part.

"WITNESSETH: That the parties hereto hereby covenant and agree to and with each other as follows:

"ARTICLE I. That the party of the first part is the absolute registered owner of a parcel of land in the
barrio of Alañgan, municipality of Limay, Province of Bataan, her title thereto being evidenced by
homestead certificate of title No. 325 issued by the bureau of Lands on June 11, 1931, said land being lot
No. 285 of the Limay Cadastre, General Land Registration Office Cadastral Record No. 1054, bounded
and described as follows:

"Beginning at point marked 1 on plan E-57394, N. 84° 32' W. 614.82 m. from B. B. M. No. 3, thence N.
66° 35' E. 307.15 m. to point "2"; S. 5° 07' W. to point "5"; 6° 10' E. 104.26 m. to point "4"; S. 82° 17' W.
to point "5"; S. 28° 63' W. 72.26 m. to point "6"; N. 71° 09' W. to point "7"; N. 1° 42' E. 173.72 m. to
point 1, point of beginning,

"Containing an area of 6.7540 hectares.

22
"Points 1, 2, 6 and 7, B. L.; points 3, 4 and 5, stakes; points 4, 5 and 6 on bank of Alañgan River.

"Bounded on the North, by property claimed by Maria Ambrocio; on the East, by Road; on the South, by
Alañgan River and property claimed by Maxima de la Cruz; and on the West, by property claimed by Jose
del Rosario.

"Bearing true. Declination 0° 51' E.

"Surveyed under authority of sections 12-22, Act No. 2874 and in accordance with existing regulations of
the Bureau of Lands, by Mamerto Jacinto, public land surveyor, on July 8, 1927 and approved on
February 25, 1931.

"ARTICLE II. That the improvements on the above described land consist of the following:

"Four (4) mango trees, fruit bearing: one hundred ten (110) hills of bamboo trees; one (1) tamarind and
six (6) bonga trees.

"ARTICLE III. That the assessed value of the land is P940 and the assessed value of the improvements
is P860, as evidenced by tax declaration No. 3531 of the municipality of Limay, Bataan.

"ARTICLE IV. That for and in consideration of the sum of one thousand pesos (P1,000) Philippine
currency, paid by the party of second part to the party of the first part, receipt whereof is hereby
acknowledged, the party of the first part hereby encumbers and hypothecates, by way of mortgage, only
the improvements described in Articles II and III hereof, of which improvements the party of the first
part is the absolute owner.

"ARTICLE V. That the condition of said mortgage is such that if the party of the first part shall well
and truly pay, or cause to be paid to the party of the second part, his heirs, assigns, or executors, on or
before the 16th day of November, 1936, or four and one-half (41) years after date of the execution of
this instrument, the aforesaid sum of one thousand pesos (P1,000) with interest at 12 Per cent per
annum, then said mortgage shall be and become null and void; otherwise the same shall be and shall
remain in full force and effect, and subject to foreclosure in the manner and form provided by law for
the amount due thereunder, with costs and also attorney's fees in the event of such foreclosure.

"ARTICLE VI. That the party of the first part shall pay all taxes and assessments which are or may
become due on the above described land and improvements during the term of this agreement

"ARTICLE VII. That within thirty (30) days after date of execution of this agreement, the party of the
first part shall file a motion before the Court of First Instance at Balanga, Bataan, P. I., requesting
cancellation of Homestead Certificate of Title No. 325 referred to in Article I hereof and the issuance, in
lieu thereof, of a certificate of title under the provisions of Land Registration Act No. 496, as amended by
Act 3901.

"ARTICLE VIII. It is further agreed that if upon the expiration of the period of time (4½) years stipulated
in this mortgage, the mortgagor should fail to redeem this mortgage, she would execute a deed of

23
absolute sale of the property herein described for the same amount as this mortgage, including all
unpaid interests at the rate of 12 per cent per annum, in favor of the mortgagee.

"ARTICLE IX. That in the event the contemplated motion under Article VII hereof is not approved by
the Court, the foregoing contract of sale shall automatically become null and void, and the mortgage
stipulated under Article IV and V shall remain in full force and effect. "In testimony whereof, the parties
hereto have hereunto set their hands the day and year first hereinbefore written.

( Sgd. ) "MARCIAL KASILAG

( Sgd. ) EMILIANA AMBROSIO

"Signed in the presence of:

( Sgd. ) "ILLEGIBLE

( Sgd. ) GAVINO RODRIGUEZ

PHILIPPINE ISLANDS }

BALANGA, BATAAN } ss.

"Before me this day personally appeared Emiliana Ambrosio without cedula by reason of her sex, to me
known and known to me to be the person who signed the foregoing instrument, and acknowledged to
me that she executed the same as her free and voluntary act and deed.

"I hereby certify that this instrument consists of three (3) pages including this page of the
acknowledgment and that each page thereof is signed by the parties to the instrument and the
witnesses in their presence and in the presence of each other, and that the land treated in this
instrument consists of only one parcel.

"In witness whereof I have hereunto set my hand and affixed my notarial seal, this 16th day of May,
1932.

(Sgd.) "NICOLAS NAVARRO

Notary Public

My commission expires December 31, 1933

24
"DOC. NO. 178

Page 36 of my register

Book NO. IV"

One year after the execution of the aforequoted deed, that is, in 1933, it came to pass that Emiliana
Ambrosio was unable to pay the stipulated interest as well as the tax on the land and its improvements.
For this reason, she and the petitioner entered into another verbal contract whereby she conveyed to
the latter the possession of the land on condition that the latter would not collect the interest on the
loan, would attend to the payment of the land tax, would benefit by the fruits of the land, and would
introduce improvements thereon. By virtue of this verbal contract, the petitioner entered upon the
possession of the land, gathered the products thereof, did not collect the interest on the loan,
introduced improvements upon the land valued at P5,000, according to him and on May 22, 1934 the
tax declaration was transferred in his name and on March 6, 1936 the assessed value of the land was in-
creased from P1,020 to P2,180.

After an analysis of the conditions of Exhibit "1" the Court of Appeals came to the conclusion and so held
that the contract entered into by and between the parties, set out in the said public deed, was one of
absolute purchase and sale of the land and its improvements. And upon this ruling it held null and void
and without legal effect the entire Exhibit 1 as well as the subsequent verbal contract entered into
between the parties, ordering, however, the respondents to pay to the petitioner, jointly and severally,
the loan of P1,000, with legal interest at 6 per cent per annum from the date of the decision. In this first
assignment of error the petitioner contends that the Court of appeals violated the law in holding that
Exhibit 1 is an absolute deed of sale of the land and its improvements and that it is void and without any
legal effect.

The cardinal rule in the interpretation of contracts is to the effect that the intention of the contracting
parties should always prevail because their will has the force of law between them. Article 1281 of the
Civil Code consecrates this rule and provides, that if the terms of a contract are clear and leave no doubt
as to the intention of the contracting parties, the literal sense of its stipulations shall be followed; and if
the words appear to be contrary to the evident intention of the contracting parties, the intention shall
prevail. The contract set out in Exhibit I should be interpreted in accordance with these rules. As the
terms thereof are clear and leave no room for doubt, it should be interpreted according to the literal
meaning of its clauses. The words used by the contracting parties in Exhibit 1 clearly show that they
intended to enter into the principal contract of loan in the amount of P1,000, with interest at 12 per
cent per annum, and into the accessory contract of mortgage of the improvements on the land acquired
as homesteads the parties having, moreover, agreed upon the pacts and conditions stated in the deed.
In other words, the parties entered into a contract of mortgage of the improvements on the land
acquired as homestead, to secure the payment of the indebtedness for P1,000 and the stipulated

25
interest thereon. In clause V the parties stipulated that Emiliana Ambrosio was to pay, within four and a
half years, or until November 16, 1936, the debt with interest thereon, in which event the mortgage
would not have any effect; in clause VI the parties agreed that the tax on the land and its improvements,
during the existence of the mortgage, should be paid by the owner of the land; in clause VII it was
covenanted that within thirty days from the date of the contract, the owner of the land would file a
motion in the Court of First Instance of Bataan asking that certificate of title No. 325 be cancelled and
that in lieu thereof another be issued under the provisions of the Land Registration Act, No. 496, as
amended by Act No. 3901; in clause VIII the parties agreed that should Emiliana Ambrosio fail to redeem
the mortgage within the stipulated period of four years and a half, she would execute an absolute deed
of sale of the land in favor of the mortgagee, the petitioner, for the same amount of the loan of P1,000
including unpaid interest; and in clause IX it was stipulated that in case the motion to be presented
under clause VII should be disapproved by the Court of First Instance of Bataan, the contract of sale
would automatically become void and the mortgage would subsist in all its force.

Another fundamental rule in the interpretation of contracts, not less important than those indicated, is
to the effect that the terms, clauses and conditions contrary to law, morals and public order should be
separated from the valid and legal contract when such separation can be made because they are
independent of the valid contract which expresses the will of the contracting parties. Manresa,
commenting on article 1255 of the Civil Code and stating the rule of separation just mentioned, gives his
views as follows:

"On the supposition that the various pacts, clauses or conditions are valid, no difficulty is presented; but
should they be void, the question is as to what extent they may produce the nullity of the principal
obligation. Under the view that such features of the obligation are added to it and do not go to its
essence, a criterion based upon the stability of juridical relations should tend to consider the nullity as
confined to the clause or pact suffering therefrom, except in case where the latter, by an established
connection or by manifest intention of the parties, is inseparable from the principal obligation, and is a
condition, juridically speaking, of that the nullity of which it would also occasion." ( Manresa,
Commentaries on the Civil Code, Volume 8, p. 575.)

The same view prevails in the Anglo-American law, as condensed in the following words:

"Where an agreement founded on a legal consideration contains several promises, or a promise to do

several things, and a part only of the things to be done are illegal, the promises which can be separated,
or the promise, so far as it can be separated, from the illegality, may be valid. The rule is that a lawful
promise made for a lawful consideration is not invalid merely because an unlawful promise was made at
the same time and for the same consideration, and this rule applies, although the invalidity is due to
violation of a statutory provision, unless the statute expressly or by necessary implication declares the
entire contract void. . . " (13 C. J., par. 470, p. 512; New York Cent. etc. R. Co. v. Gray, 239 U. S., 583; 60
Law. ed., 451; U. S. v. Moran, 97 U. S., 413, 24 Law. ed., 1017: U. S. v. Ilodson, 10 Wall, 395; 19 Law ed.
937; Gelpcke v. Dubuque, 1 Wall. 175, 17 Law. ed., 520; U. S. v. Bradly, 10 Pet. 343, 9 Law. ed., 448;
Borland v. Prindle, 144 Fed. 713; Western Union Tel. Co. v. Kansas Pac. R. Co., 4 Fed., 284; Northern Pac.
R. Co. v. U. S., 15 Ct. Cl., 428.)

26
Addressing ourselves now to the contract entered into by the parties, set out in Exhibit 1, we stated that
the principal contract is that of loan and the accessory that of mortgage of the improvements upon the
land acquired as a homestead. There is no question that the first of these contracts is valid as it is not
against the law. The second, or the mortgage of the improvements, is expressly authorized by section
116 of Act No. 2874, as amended by section 23 of Act No. 3517, reading:

"SEC. 116. Except in favor of the Government or any of its branches, units, or institutions, or legally
constituted banking corporations, lands acquired under the free patent or homestead provisions shall
not be subject to encumbrance or alienation from the date of the approval of the application and for a
term of five years from and after the date of issuance of the patent or grant, nor shall they become
liable to the satisfaction of any debt contracted prior to the expiration of said period; but the
improvements or crops on the land may be mortgaged or pledged to qualified persons, associations, or
corporations."

It will be recalled that by clause VIII of Exhibit 1 the parties agreed that should Emiliana Ambrosio fail to
redeem the mortgage within the stipulated period of four and a half years, by paying the loan together
with interest, she would execute in favor of the petitioner an absolute deed of sale of the land for
P1,000, including the interest stipulated and owing. This stipulation was verbally modified by the same
parties after the expiration of one year, in the sense that the petitioner would take possession of the
land and would benefit by the fruits thereof on condition that he would condone the payment of
interest upon the loan and he would attend to the payment of the land tax. These pacts made by the
parties independently were calculated to alter the mortgage contract clearly entered into, converting
the latter into a contract of antichresis. (Article 1881 of the Civil Code.) The contract of antichresis, being
a real encumbrance burdening the land, is illegal and void because it is condemned by section 116 of Act
No. 2874, as amended, but the clauses regarding the contract of antichresis, being independent of and
separable from the contract of mortgage, can be eliminated, thereby leaving the latter in being because
it is legal and valid.

The foregoing considerations bring us to the conclusion that the first assignment of error is well-founded
and that error was committed in holding that the contract entered into between the parties was one of
absolute sale of the land and its improvements and that Exhibit 1 is null and void.

In the second assignment of error the petitioner contends that the Court of Appeals erred in holding
that he is guilty of violating the Public Land Act because he entered into the contract, Exhibit 1. The
assigned error is vague and not specific. If it attempts to show that the said document is valid in its
entirety, it is not well-founded because we have already said that certain pacts thereof are illegal
because they are prohibited by section 116 of Act No. 2874, as amended.

In the third assignment of error the petitioner insists that his testimony, as to the verbal agreement
entered into between him and Emiliana Ambrosio, should have been accepted by the Court of Appeals;
and in the fourth and last assignment of error the same petitioner contends that the Court of Appeals
erred in holding that he acted in bad faith in taking possession of the land and in taking advantage of the

27
fruits thereof, resulting in the denial of his right to be reimbursed for the value of the improvements
introduced by him.

We have seen that subsequent to the execution of the contract, Exhibit 1, the parties entered into
another verbal contract whereby the petitioner was authorized to take possession of the land, to receive
the fruits thereof and to introduce improvements thereon, provided that he would renounce the
payment of stipulated interest and he would assume payment of the land tax. The possession by the
petitioner and his receipt of the fruits of the land, considered as integral elements of the contract of
antichresis, are illegal and void agreements because, as already stated, the contract of antichresis is a
lien and as such is expressly prohibited by section 116 of Act No. 2874, as amended. The Court of
Appeals held that the petitioner acted in bad faith in taking possession of the land because he knew that
the contract he made with Emiliana Ambrosio was an absolute deed of sale and, further, that the latter
could not sell the land because it is prohibited by section 116. The Civil Code does not expressly define
what is meant by bad faith, but section 433 provides that "Every person who is unaware of any flaw in
his title, or in the manner of its acquisition, by which it is invalidated, shall be deemed a possessor in
good faith"; and provides, further, that "Possessors aware of such flaw are deemed possessors in bad
faith." Article 1950 of the same Code, covered by Chapter II relative to prescription of ownership and
other real rights, provides, in turn, that "Good faith on the part of the possessor consists in his belief
that the person from whom he received the thing was the owner of the same, and could transmit the
title thereto." We do not have before us a case of prescription of ownership, hence, the last article is not
squarely in point. In resume, it may be stated that a person is deemed a possessor in bad faith when he
knows that there is a flaw in his title or in the manner of its acquisition, by which it is invalidated.

Borrowing the language of Article 433, the question to be answered is whether the petitioner should be
deemed a possessor in good faith because he was unaware of any flaw in his title or in the manner of its
acquisition by which it is invalidated. It will be noted that ignorance of the flaw is the keynote of the
rule. From the facts found established by the Court of Appeals we can neither deduce nor presume that
the petitioner was aware of a flaw in his title or in the manner of its acquisition, aside from the
prohibition contained in section 116. This being the case, the question is whether good faith may be
premised upon ignorance of the laws. Manresa, commenting on article 434 in connection with the
preceding article, sustains the affirmative. He says:

"We do not believe that in real life there are not many cases of good faith founded upon an error of law.
When the acquisition appears in a public document, the capacity of the parties has already been passed
upon by competent authority, and even established by appeals taken from final judgments and
administrative remedies against the qualification of registrars, and the possibility of error is remote
under such circumstances; but, unfortunately, private documents and even verbal agreements far
exceed public documents in number, and while no one should be ignorant of the law, the truth is that
even we who are called upon to know and apply it fall into error not infrequently. However, a clear,
manifest, and truly unexcusable ignorance is one thing, to which undoubtedly refers article 2, and
another and different thing is possible and excusable error arising from complex legal principles and
from the interpretation of conflicting doctrines.

28
"But even ignorance of the law may be based upon an error of fact, or better still, ignorance of a fact is
possible as to the capacity to transmit and as to the intervention of certain persons, compliance with
certain formalities and appreciation of certain acts, and an error of law is possible in the interpretation
of doubtful doctrines." (Manresa, Commentaries on the Spanish Civil Code. Volume IV, pp. 100, 101 and
102.)

According to this author, gross and inexeusable ignorance of the law may not be the basis of good faith,
but possible, excusable ignorance may be such basis. It is a fact that the petitioner is not conversant
with the laws because he is not a lawyer. In accepting the mortgage of the improvements he proceeded
on the well-grounded belief that he was not violating the prohibition regarding the alienation of the
land. In taking possession thereof and in consenting to receive its fruits, he did not know, as clearly as a
jurist does, that the possession and enjoyment of the fruits are attributes of the contract of antichresis
and that the latter, as a lien, was prohibited by section 116. These considerations again bring us to the
conclusion that, as to the petitioner, his ignorance of the provisions of section 116 is excusable and may,
therefore, be the basis of his good faith. We do not give much importance to the change of the tax
declaration, which consisted in making the petitioner appear as the owner of the land, because such an
act may only be considered as a sequel to the change of possession and enjoyment of the fruits by the
petitioner, to about which we have stated that the petitioner's ignorance of the law is possible and
excusable. We, therefore, hold that the petitioner acted in good faith in taking possession of the land
and enjoying its fruits.

The petitioner being a possessor in good faith within the meaning of article 433 of the Civil Code and
having introduced the improvements upon the land as such, the provisions of article 361 of the same
Code are applicable; wherefore, the respondents are entitled to have the improvements and plants
upon indemnifying the petitioner the value thereof which we fix at P3,000, as appraised by the trial
court; or the respondents may elect to compel the petitioner to have the land by paying its market value
to be fixed by the court of origin.

The respondents also prayed in their complaint that the petitioner be compelled to pay them the sum of
P650, being the approximate value of the fruits obtained by the petitioner from the land. The Court of
Appeals affirmed the judgment of the trial court denying the claim or indemnity for damages, being of
the same opinion as the trial court that the respondents have not established such damages. Under the
verbal contract between the petitioner and the deceased Emiliana Ambrosio, during the latter's lifetime,
the former would take possession of the land and would receive the fruits of the mortgaged
improvements on condition that he would no longer collect the stipulated interest and that he would
attend to the payment of the land tax. This agreement, at bottom, is tantamount to the stipulation that
the petitioner should apply the value of the fruits of the land to the payment of stipulated interest on
the loan of P1,000 which is, in turn, another of the elements characterizing the contract of antichresis
under article 1881 of the Civil Code. It was not possible for the parties to stipulate further that the value
of the fruits be also applied to the payment of the capital, because the truth was that nothing remained
after paying the interest at 12% per annum. This interest, at the rate fixed, amounted to P120 per
annum, whereas the market value of the fruits obtainable from the land hardly reached said amount in
view of the fact that the assessed value of said improvements was, according to the decision, P860. To

29
this should be added the fact that, under the verbal agreement, from the value of the fruits had to be
taken a certain amount to pay the annual land tax. We mention these data here to show that the
petitioner is also not bound to render an accounting of the value of the fruits of the mortgaged
improvements for the reason stated that said value hardly covers the interest earned by the secured
indebtedness.

For all the foregoing considerations, the appealed decision is reversed, and we hereby adjudge: (1) that
the contract of mortgage of the improvements, set out in Exhibit 1, is valid and binding (2) that the
contract of antichresis agreed upon verbally by the parties is a real incumbrance which burdens the land
and, as such, is null and without effect; (3) that the petitioner is a possessor in good faith; (4) that the
respondents may elect to have the improvements introduced by the petitioner by paying the latter the
value thereof, P3,000, or to compel the petitioner to buy and have the land where the improvements or
plants are found, by paying them its market value to be fixed by the court of origin, upon hearing the
parties; (5) that the respondents have a right to the possession of the land and to enjoy the mortgaged
improvements; and (6) that the respondents may redeem the mortgage of the improvements by paying
to the petitioner within three months the amount of P1,000, without interest, as that stipulated is set
off by the value of the fruits of the mortgaged improvements which the petitioner received; and in
default thereof the petitioner may ask for the public sale of said improvements for the purpose of
applying the proceeds thereof to the payment of his said credit. Without special pronouncement as to
the costs in all instances. So ordered.

Diaz, J., concur.

Separate Opinions

VILLA-REAL, J., concurring and dissenting:

According to the contract entered into on May 16, 1932, between Emiliana Ambrosio, in life, and the
petitioner Marcial Kasilag, the first, in consideration of the sum of P1,000 given to her by the second,
constituted a mortgage on the improvements only of the land which she acquired by way of homestead.
The improvements which she mortgaged consisted of four fruit-bearing mango trees, one hundred ten
hills of bamboo trees, 1 tamarind tree and 6 betelnut trees, the assessed value of which was P660. The
conditions of the loan were that if the mortgagor should pay the mortgagee on November 16, 1936, that
is, four and a half years after the execution of the deed, said sum of P1,000 with interest thereon at 12%
per annum, the aforesaid mortgage would become null and void, otherwise it would remain in full force
and effect and would be subject to foreclosure in the manner provided by law; that the mortgagor
would pay all the land taxes on the land and its improvements during the duration of the contract; and
that if after the expiration of the said period of four and a half years the mortgagor should fail to redeem
the mortgage, she would execute in favor of the mortgagee an absolute deed of sale of the property
described in the contract for the same sum of P1,000 plus interest due and unpaid at the rate of 12 per
cent per annum.

The principal rule in the interpretation of contracts is that "If the terms of a contract are clear and leave
no doubt as to the intention of the contracting parties, the literal sense of its stipulations shall be

30
followed. If the words appear to be contrary to the evident intention of the contracting parties, the
intention shall prevail" (article 1281, Civil Code). "In order to judge as to the intention of the contracting
parties, attention must be paid principally to their conduct at the time of making the contract and
subsequently thereto." (Article 1282.)

Now, then, what is the true nature of the contract entered into between the parties by virtue of the
deed of sale executed by them on May 16, 1932? The Court of Appeals held that it is an absolute deed
of sale of a land with a homestead certificate of title, under the guise of a loan secured by a mortgage
upon its improvements in order to go around the prohibition contained in section 116 of Act No. 2874,
as amended by section 23 of Act No. 3517.

Closely examined, the only clauses of the contract which may lead to the conclusion that it is one of sale
are those which state that if at the expiration of the period of four years and a half the mortgagor
should fail to pay the amount of the loan plus interest due and unpaid at the rate of 12 per cent per
annum, she would execute in favor of the mortgagee a deed of absolute sale of the land whose
improvements were mortgaged for the amount of the loan and the interest owing. It will be seen that
the sale would not be made until after the lapse of four and a half years from the execution of the deed,
if the mortgagor should fail or should not wish to redeem the mortgaged improvements. Consequently,
the obligation contracted by said mortgagor was no more than a conditional promise to sell. Now, then,
is this promise to sell valid? Like any other onerous, consensual and mutually binding contract, that of
promise to sell requires for its legal existence and validity the concurrence of consent, consideration and
subject-matter. The contract before us does not show what is the cause or consideration for such
promise to sell. Assuming that it was the economic impotence of the mortgagor to redeem the
mortgaged improvements, before she could be compelled to comply with her obligation to sell, there is
need to wait until she should fail to exercise the right to redeem either due to lack of funds or to
abandonment. The cause will come into being only upon the happening of said event after the four and
a half years and only then will the said contract of promise to sell have juridical existence. The P1,000
and its interest, should the mortgagor fail to redeem the improvements upon the maturity of the
indebtedness, would be the consideration of the sale; because the promise to sell is a contract different
and distinct from that of sale and each requires a consideration for its legal existence and validity.

The terms of the contract are clear and explicit and do not leave room for doubt that the intention of
the contracting parties was to constitute a mortgage on the improvements of the land in litigation to
secure the payment of the loan for P1,000, with interest thereon at 12 per cent per annum. It cannot be
said that this contract is simulated because the assessed value of the improvements is P860 only. It is
well known that rural properties are valued for assessment purposes not less than half of their market
value. The true value of the said improvements may therefore be P1,720, and the mortgagee may have
considered that adequate. Moreover, the petitioner could not have the property whose improvements
were mortgaged to him even should the mortgagor default in the payment of interest. He could only
have the mortgaged improvements in case of foreclosure should he bid therefor at the sale. Neither
could the mortgagor sell the same property to the mortgagee, even after the expiration of five years
from the issuance of the homestead certificate of title, for then the sale would be in satisfaction of an
obligation contracted during the five years, which is prohibited by the of mentioned section 116 of Act

31
No. 2874, as amended by section 23 of Act No. 3517. The fact that after one year the contracting parties
had novated the contract of loan secured by a mortgage, converting the same into a contract of
antichresis because of the mortgagor's failure to pay the accrued interest, does not show that they
intended to enter into a contract of sale, because the conversion in this case of the contract of loan
secured by a mortgage into one of antichresis was accidental, due to the mortgagor's default in the
payment of unpaid interest for the first year. If the parties' intention from the beginning had been to sell
the property, the mortgagee would have immediately entered upon the possession of the land instead
of waiting until after the expiration of one year. The transfer of the Torrens certificate of title to the
homestead by the original owner to the mortgagee in 1934 was only a consequence of the conversion of
the mortgage loan into an antichretic loan, the parties having erroneously believed that it was necessary
to make such a transfer. The setting off of the interest on the debt against the fruits of the property
given in antichresis finds authority in article 1885 of the Civil Code. There is, therefore, no ambiguity in
the terms of the contract warranting the search outside its four corners for the true intention of the
contracting parties other than that of entering into a contract of loan secured by the said improvements.
If the true intention of the contracting parties, as clearly gathered from the terms of the contract, was to
enter into a contract of loan secured by a mortgage upon the improvements, although they should
convert it into a contract of antichresis after one year and although after the maturity of the loan with
interest they may wish to convert it into one of absolute sale-both conversions being illegal and, hence,
void,-the original intention of entering into a contract of loan secured by a mortgage upon the
improvements would prevail, the said contract of loan being the only one legal and valid, and the
petitioner having acted in good faith in making it.

The verbal contract of antichresis, entered into by the petitioner Marcial Kasilag and Emiliana Ambrosio,
being null and void ab initio and without any legal effect because it is in violation of the express
prohibition of section 116 of Act No. 2874, as amended by section 23 of Act No. 3517, (article 4 of the
Civil Code), the contracting parties should restore to each other the things which have been the subject-
matter of the contract, together with their fruits, and the price paid therefor, together with interest,
pursuant to Article 1303 of the same Code. Marcial Kasilag, therefore, should return to Emiliana
Ambrosio or to her heirs the possession of the homestead and the improvements thereon with its fruits,
and Emiliana Ambrosio or her heirs should pay him the sum of P1,000, being the amount of the loan,
plus interest due and unpaid.

As to the improvements introduced upon the land by the petitioner, having done so with the knowledge
and consent of its owner Emiliana-Ambrosio, the former acted in good faith, and under article 361 of the
Civil Code, the owner of the land may have the said improvements upon paying the indemnity provided
in articles 453 and 454, or may compel the said Marcial Kasilag, who introduced the said improvements,
to pay the price of the land. If the herein respondents, as heirs of Emiliana Ambrosio, do not wish or are
unable to pay for said improvements, and Marcial Kasilag does not wish or is unable to pay for the land,
said petitioner would lose his right of retention over the same (Bernardo vs. Batclan, 37 Off. G., No. 74,
p. 1382), provided that he may remove the improvements which he had introduced in good faith.

In view of the foregoing, I concur in the majority opinion except insofar as it holds that the interest is set
off against the fruits of the mortgaged improvements, because as a result of the nullity of the contract

32
of antichresis the petitioner should return to the respondents the products of the mortgaged
improvements, and the latter should pay to the petitioner the amount of the loan plus interest due and
unpaid at the rate of 12 per cent per annum from the date of the contract until fully paid.

LAUREL, J., concurring:

On August 27, 1918, Emiliana Ambrosio put in a home- stead application for lot No. 285 of the Limay
Cadastre, Province of Bataan. After complying with the requisite legal formalities, she obtained therefor
homestead patent No. 16074 and homestead certificate of title 325 on June 11, 1931, the same having
been recorded in the registry of Deeds of Bataan on June 26, 1931. On May 16, 1932, she entered with
the herein petitioner, Marcial Kasilag, into a contract, Exhibit 1, inserted in the foregoing majority
opinion.

Sometime in 1933, or a year after the execution of the aforequoted deed, the patentee failed to pay the
stipulated interest and land taxes, whereupon, the mortgagee, Marcial Kasilag, and the mortgagor,
Emiliana Ambrosio, verbally agreed that the former would pay the land taxes and waive the unpaid
interest, enter into the possession of the property in question, introducing improvements thereon, and
thereafter be reimbursed for the value of such improvements. Under this verbal pact, Kasilag went into
possession of the property, planted it with fruit trees allegedly valued at P5,000, and, on May 22, 1934,
declared the same for taxation purposes. In 1934 the original homesteader, Emiliana Ambrosio, died
leaving as heirs her children, Rafaela Rodriguez, Severo Mapilisan, Ignacio del Rosario and Gavino
Rodriguez.

On May 16, 1936, the said heirs, with the exception of Gavino Rodriguez who testified for the
defendant, sued Marcial Kasilag in the Court of First Instance of Bataan to recover the possession of the
aforesaid property belonging to their mother. For answer, the defendant put in as a general denial plea,
a special defense that his possession was in good faith with the knowledge and tolerance of the
plaintiffs, a counterclaim for P1,000 representing the loan to the deceased homesteader with stipulated
interest thereon, and a recoupment for P5,000 allegedly the value of the improvements he had
introduced upon the land. On the issues thus joined, the trial court gave judgment for the defendant
couched in the following language:

"Resuming all that has been said above, the court finds and declares that the deed of combined
mortgage and sale executed by Emiliana Ambrosio in favor of the defendant Marcial Kasilag and dated
May 16, 1932, is null and void as a contract for a future conveyance or sale of the homestead, but valid
as an equitable mortgage on the improvements for the sum of P1,000; and that the possession of the
homestead by the defendant Marcial Kasilag by virtue of paid contract or by virtue of any other
agreement is null and void, but that the making of the improvements thereon by him, which the court
finds to be valued at P3,000, by virtue of the verbal agreement entered into after the executing of the
original instrument of mortgage, was in good faith, entitling the said Marcial Kasilag to be reimbursed of
their actual value, the above-mentioned amount. Where- fore, let judgment be entered declaring that
the plaintiffs are entitled to the possession as owners of the homestead subject of the present suit, lot
No. 285 of the Limay cadastral survey, subject to an encumbrance of the improvements for the sum of

33
P1,000 in favor of the defendant, ordering the defendant to deliver unto the plaintiffs the possession of
said homestead, and directing the said plaintiffs in turn to pay unto the defendant jointly and severally,
as heirs of their deceased mother Rafaela Rodriguez the sum of P3,000, value of improvements
introduced on said homestead by defendant. Let there be no pronouncement as to costs." On appeal by
the plaintiffs, the Third Division of the Court of Appeals reached a different result and modified the
judgment of the trial court as follows:

"Wherefore, the appealed judgment is hereby modified by declaring that the contract, Exhibit '1', is
entirely null and void; that the plaintiffs and appellants are the owners of the lot in question together
with all the improvements thereon in common with their brother, Gavino Rodriguez, and are, therefore,
entitled to the possession thereof; ordering the defendant and appellee to vacate and deliver the
possession of the aforesaid lot together with all the improvements thereon to the aforementioned
plaintiffs and appellants free from any encumbrance; requiring the latter, however, to pay jointly and
severally to the said appellee the sum of P1,000 with interest thereon at the rate of 6 per cent per
annum from and including the date this decision becomes final; and absolving the said plaintiffs and
appellants from the cross-complaint with respect to the value of the improvements claimed by the
appellee.

"It is further ordered that the register of deeds of Bataan cancel the certificate of title No. 325 in the
name of the deceased, Emiliana Ambrosio, and issue in lieu thereof a new certificate of title in favor of
the herein plaintiffs and appellants and their brother, Gavino Rodriguez, as owners pro indiviso and in
equal shares free from any lien or encumbrance except those expressly provided by law.

"Without special pronouncement as to the costs."

The case is before us on petition for certiorari which was given due course, filed by defendant-appellee,
Marcial Kasilag, now petitioner, against plaintiffs-appellants, Rafaela Rodriguez and others, now
respondents. The burden of petitioner's case is condensed in the following assignments of error:

The Honorable Court of Appeals erred:

"I. In having interpreted that document Exhibit '1' is an absolute sale and declared it entirely null
and void, and in not having interpreted and declared that it is a deed of combined mortgage and future
sale which, if void as a contract for the future conveyance of the homestead in question is, however,
valid as an equitable mortgage on the improvements thereof for the sum of P1,000 loaned by the
petitioner Marcial Kasilag to the homestead owner Emiliana Ambrosio.

"II. In holding that the petitioner was guilty of the violation of the public land law for having entered
into said contract Exhibit '1'.

"III. In not giving probative value to the uncontradicted testimony of the petitioner Marcial Kasilag
that he was expressly authorized by the homestead owner Emiliana Ambrosio to introduce
improvements in said homestead.

34
"IV. In not declaring that the possession by the petitioner Marcial Kasilag of said homestead and the
introduction by him of improvements therein by virtue of the verbal agreement entered into after the
execution of the original instrument of mortgage was in good faith, entitling him to be reimbursed of the
actual value of improvements he introduced."

Boiled down to the fundamentals, there are only two propositions which stand to be resolved in this
appeal: (1) What is the legal nature of the agreement, Exhibit 1, entered into by and between the
parties? and (2) Is Marcial Kasilag guilty of bad faith in entering upon the possession of the homestead,
paying the land tax and introducing improvements thereon?

The numerous adjudications in controversies of this nature will show that each case must be decided in
the light of the attendant circumstances and the situation of the parties which, upon the whole, mark its
character. However, for the purpose of ascertaining the manner and extent to which persons have
intended to be bound by their written agreements, the safe criterion, the time honored test, is their
intention which is intimately woven into the instrument itself. It is true that resort to extrinsic evidence
is imperative when the contract is ambiguous and is susceptible of divergent interpretations;
nevertheless, the primary obligation of the courts is to discover the intention of the contracting parties,
as it is expressed by the language of the document itself. We are not authorized to make a contract for
the parties.

In the trial court as in the Court of Appeals, the discussion centered on the nature and validity of the
document, Exhibit 1. This is the correct approach. The Court of Appeals, however, rejected the
conclusion of the trial court that it is a deed of combined mortgage and sale, and ruled that it is an
absolute deed of sale which is null and void in its entirety because it is banned by section 116, as
amended of the Public Land Act. The ruling is now assailed by the petitioner. I share petitioner's view
that the deed is not what it was construed to be by the Court of Appeals.

From Article I to III thereof is a description of the homestead and the improvements existing thereon. By
its Article IV the homesteader, Emiliana Ambrosio, "encumbers and hipothecates, by way of mortgage,
only the improvements described in Articles II and III" under the conditions set out in Articles V, VI and
VII. Its closing Articles VIII and IX, particularly relied upon by the Court of Appeals, speak, not of a
present deed of absolute sale, but of one to be executed "upon the expiration of the period of time (41,
years) stipulated in the mortgage" if "the mortgagor should fail to redeem this mortgage". In other
words, the redemption of the mortgage by the payment of the loan may bring about the frustration of
the contemplated sale, hence, to hold unqualifiedly that the whole of Exhibit 1, or even a part thereof, is
an absolute deed of sale would be to do violence to the terms of the document itself.

Still other tokens drive home the same conviction. The intimation by the Court of Appeals that the
petitioner "know, therefore, that the land subject of the patent could not be alienated by express
prohibition of law," is an argument that the petitioner could not have brazenly disregarded the law by
intending Exhibit 1 to be an absolute deed of sale. Its further observation that "the stipulation under
article VIII of the contract, Exhibit '1' . . . clearly indicates that there was nothing left to be done except
the execution of the deed of absolute sale," is a concession that no such sale has yet been executed.

35
Finally, it will be recalled that under Article VII of Exhibit 1, "within thirty (30) days after date of
execution of this agreement the party of the first part shall file a motion before the Court of First
Instance of Balanga, Bataan, P. I., requesting cancellation of homestead certificate of title No. 325
referred to in Article 1 hereof and the issuance, in lieu thereof, of a certificate of title under the
provisions of Land Registration Act 496, as amended by Act 3901." And by its Article IX it provides "That
in the event the contemplated motion under Article VII hereof is not approved by the Court, the
foregoing contract of sale shall automatically become null and void." (Emphasis is mine.) We have
nothing in the record to show that the required motion was filed within thirty days or thereafter, by
Emiliana Ambrosio in life, or by her successors-in-interest after her death. Indeed, Homestead Certificate
of Title No. 325, sought to be substituted by another through the said motion, still stands. It is, evident,
therefore, that the projected sale has and may never come into being, because under Article IX of
Exhibit 1, it became automatically null and void. This view, incidentally, precludes further consideration
of the validity or invalidity of the sale clause of Exhibit 1, as it will be purely academic to dwell upon the
nature and effect of a contract that has passed out of existence in the contemplation of the parties.

Having reached the conclusion, upon its plain language and unequivocal import, that Exhibit 1 is
essentially and fundamentally a mortgage upon the improvements found on the questioned homestead,
with a conditional clause for the future sale of said homestead and improvements which has become a
"dead twig" still attached to a living tree because the condition has never been performed, I would,
under Articles 1281 and 1283 of the Civil Code, be otherwise content in resting our decision of this
aspect of the case on this interpretation. But I do not propose to so limit my inquiry in view of the fact
that the Court of Appeals points to contemporaneous and subsequent circumstances, beyond the four
corners of the document, Exhibit 1, allegedly revelatory of petitioner's concealed but evident intention
to circumvent the law. I may state, at the outset, that these circumstances are fairly susceptible of
legitimate explanations. The appealed decision could not conceive of a man, of petitioner's intelligence,
who "would accept improvements valued at only P860 as security for the payment of a larger amount of
P1,000." But we are concerned with an assessed valuation which is not always nor even frequently the
value that it can command in the market. To ignore this is to live in monastic seclusion. The appealed
decision would imply from the fact that petitioner subsequently paid the land taxes and from the further
fact that Emiliana never paid stipulated interest on the one thousand-peso loan, that Exhibit 1 was
meant to vest absolute title irretrievably in the petitioner. It could hardly be supposed at the time of the
execution of Exhibit 1 that the homesteader would fail to make these payments, nor does it seem just to
draw from these circumstances, induced by Emiliana's own neglect, deductions unfavorable to the
petitioner. That the petitioner went upon the possession of the questioned property is not proof that he
was even then already the would-be owner thereof, for as elsewhere stated, the said possession came
practically at the suggestion of or at least with the consent of Emiliana Ambrosio as a result of her failure
to live up to her part of the bargain. Finally, the Court of Appeals asked: "If the real purpose was to
mortgage the improvements only as specified in article IV of the contract, why is it that in article VIII
thereof it was provided that in case of failure to redeem the alleged mortgage the grantor would be
required to execute a deed of absolute sale of the property described therein for the same amount of
the mortgage in favor of the grantee, and not of 'the improvements only'?" The precaution which the
petitioner took to have the sale clause of Exhibit I so phrased that the said sale would not be effected

36
until after the expiration of the five- year period prohibited by law, at which time the alienation of the
homestead would then have been perfectly legitimate, may not be without significance to show
petitioner's respect for and intention to be on the side of the law. The very mention of the word "sale"
in the document in question argues against any attempt at concealment, for if the said document was
intended as a cover and cloak of an illegal alienation, then the reference to the contract of sale therein
was illtimed and foolhardy.

The question next at hand is whether or not the mortgage constituted upon the improvements of the
homestead is valid. It is, under express provisions of section 116 of the Public Land Act, before 2nd after
its amendment, reading pertinently that "the improvements or crops on the land may be mortgaged or
pledged to qualified persons, associations, or corporations." I find no occasion to dispute this legislative
policy however mistaken it may be. It is sufficient to observe that what the law permits may be done.
Upon the other hand, I find no occasion to test the legality of the sale provisions of Exhibit 1 for, as I
have heretofore said, this question is, in my opinion, moot. Moreover, the petitioner, technically, is
barred from raising this question, as he did not appeal from and, therefore, abided by the decision of
the trial court which outlawed this sale clause as violative of the provisions of section 116 of the Public
Land Act. This part of the decision of the trial court was affirmed by the Court of Appeals when the latter
struck down Exhibit 1 in its entirety and, even now, petitioner does not complain against the destruction
of Exhibit 1 with respect to its sale clause. In other words, counsel for petitioner concedes all along that
the said sale clause may be properly legislated out. As the mortgage provisions of Exhibit 1 are
independent of and severable from the rest thereof, the same are perfectly enforceable. Where a part
of the contract is perfectly valid and separable from the rest, the valid portion should not be avoided.
(Ollendorff vs. Abrahamson, 38 Phil., 585.)

The question yet to be answered is whether the petitioner's possession of the questioned homestead
was in good faith so as to entitle him to reimbursement for improvements introduced upon the land.
The basis of petitioner's possession was a verbal agreement with the original homesteader whereby, for
failure of the latter to comply with her obligations to pay land taxes and stipulated interest on the loan,
the former assumed the said obligations for the privilege of going into possession of the property,
introducing improvements thereon, and thereafter being reimbursed for the value of such
improvements. The petitioner did enter upon such possession, planted the land to fruit trees valued at
P5,000, according to him, and P3,000, according to the trial judge. It should be stated, in passing, that
the Court of Appeals was unable to belie this verbal agreement, although it was of the opinion "that the
trial court erred in giving probative value to the testimony of the appellee with reference to the alleged
verbal agreement". Its reason for the opinion is not because the testimony is untrue, but because even if
it were true, "it only tends to corroborate the allegation that he acted in bad faith when he took
possession of the property and made improvements thereon, because then he knew full well that the
homestead owner could not enter into an agreement involving the future final and absolute alienation
of the homestead in his favor." As the said opinion and the reason back of it does not involve a question
of strict fact, it is in our power to inquire into its soundness. The weakness of the argument lies, first, in
its (a) inconsistency and (b) in the misconception of the legal principle involved: inconsistency, because
it considers entry of possession, payment of land tax as facts tending to show the real character of the

37
transaction and as evidencing bad faith on the part of the petitioner, but at the same time it improperly
rejects the verbal agreement by which such facts are established. It is clear that we cannot directly
reject the verbal agreement between the parties in so far as it is favorable to Ambrosio and indirectly
reject it in so far as it is favorable to the petitioner. The misconception proceeds from the erroneous
legal conclusion that, upon the facts, the good faith is atributable to the petitioner alone and that
Ambrosio was not to be blamed for the prohibited alienation of the homestead, as I shall presently
proceed to discuss.

In holding that the petitioner was a possessor in bad faith, the decision sought to be reviewed first laid
down the premise that such possession is banned by law at least for five years from the issuance of
patent (section 116, Public Land Act), assumed that the petitioner had knowledge of such law, and then
drew the conclusion that petitioner was aware of the illegality of his possession. We think that the
assumption and conclusion are precipitate. As observed in the foregoing majority opinion-citing
Manresa-knowledge of a legal provision does not necessarily mean knowledge of its true meaning and
scope, or of the interpretation which the courts may place upon it. In this particular case, what section
116 of the Public Land Act prohibits is the "incumbrance or alienation" of land acquired thereunder
within the period prescribed therein. We may concede, as assumed by the appealed decision, that the
petitioner was cognizant of said section 116, but this is not saying that petitioner knew that his
possession came under the phrase "incumbrance or alienation" prohibited by law, and that the
petitioner, therefore, knew that his possession was illegal. The import of the phrase "incumbrance or
alienation" is a subject upon which "men of reason may reasonably differ," in the same way that we
ourselves have differed in the deliberation of this case. It is not correct to assume that the petitioner had
knowledge of the illegality of his possession. The contrary assumption, namely, that petitioner had no
idea of such illegality, would have been more in accord with the experience of everyday, for petitioner
would not have invested money and labor in the land and assumed obligations incumbent upon the
homesteader if he had even the least suspicion that all his efforts would count for nothing and would in
the end entangle him in a mild scandal. As possession in bad faith does not necessarily mean possession
illegal under the law, is being necessary that the possessor be aware of such illegality, it follows that the
petitioner's possession of the homestead of the respondents was in good faith. (Art. 433, Civil Code.)
"Good faith is always presumed, and the burden of proving bad faith on the part of the possessor rests
upon the person alleging it" (article 434, Civil Code.) As a bona fide possessor, and it being unquestioned
that the improvements introduced by him upon the land redounded to its benefit, the petitioner is by
law entitled to be paid for the value of such improvements in the amount of P3,000, as found by the trial
judge. "Useful expenditures shall be paid the possessor in good faith with the same right of retention,
the person who has defeated him in his possession having the option of refunding the amount of such
expenditures or paying him the increase in value which the thing has acquired by reason thereof."
(Article 453, 2nd par., Civil Code). The reimbursement in this particular case is the more in order in view
of the express undertaking of respondents' predecessor-in-interest to pay therefor.

Even the equities of the case militate against the respondents and in favor of the petitioner. There is a
concession that the petitioner's possession was neither imposed upon nor wrested from the
homesteader; on the contrary, it came about by virtue of a mutual agreement whereby the said

38
homesteader and the herein respondents were spared the burden of paying for land taxes and
stipulated interest and extended the benefit of having their land improved on condition that they pay
the value of such improvements upon redeeming the land. We also have uncontradicted fact that P400
of the one thousand-peso loan were given to the herein respondents and the balance kept by their
mother. They may not reap and retain these benefits and at the same time repudiate and go back upon
contractual obligations solemnly entered into.

But let me grant that the contract, Exhibit 1, is one of absolute sale, as found by the Court of Appeals,
what then? As the land could not be alienated for five years from the date of the issuance of the patent,
the sale was illegal and void because it was entered into in violation of section 116 of the Public Land
Act, as amended. By whom was the law violated? Certainly, not by Kasilag alone but by Ambrosio as
well. Both are presumed to know the law, and we cannot justly charge Kasilag alone with that
knowledge on the alleged reason that Kasilag is rich and Ambrosio is poor. Neither can we proceed on
the bare assumption that because Exhibit 1 was written in English it was prepared by Kasilag as if he
were the only English speaking person in the Province of Bataan where the document was executed. Are
we already living in the midst of a communistic society that we shall have to incline invariably the
balance in favor of a litigant because he happens to be poor and against the litigant who happens to be
well-to-do, regardless of the merits of the case? And to this end, shall we, by a series of assumptions and
deductions, impute to a party malice aforethought dishonesty and bad faith, in entering into a
transaction made in the open sun, publicly recorded and whose effectiveness was even conditioned by
the approval of a court of justice? If so, then I dare say that we have not profited by the admonition of
Aristotle in his Metaphysics centuries ago that "justice is a virtue of the soul which discards party,
friendship and sentiment and is therefore always represented as blind." There is a charm in rhetoric but
its value in cool judicial reasoning is nil.

And if — as we are confidently told — we should relax the legal principle with reference to Ambrosio,
because she was "poor and ignorant," I am reluctant to believe that she was ignorant of the condition
against the alienation inserted in all homestead patents, and my knowledge of the Public Land Law, of
the activities of the Department and bureau charged with the administration of public lands, gives me
just the contrary impression. Every homestead patent contains that condition. Circulars and instructions
and general information have been issued in pursuance with law. (Sec. 5, Act No. 2874; see also sec. 5,
Commonwealth Act No. 141.) I must presume that the Government and its officials charged with the
administration of public lands have complied with the law and their duties in this connection, and I
cannot believe that Ambrosio, when she alienated the property, was unaware of the legal prohibition.
Under the circumstances, then, it is reasonable to conclude that on the hypothesis that the document,
Exhibit 1, was a contract of absolute sale between Kasilag and Ambrosio, both of them were guilty of
infraction of the law. If this is correct, what is the legal situation of the parties?

Justinian who, by his Corpus Juris Civiles, still speaks through practically all the civil codes of Continental
Europe, considers both as having acted in good faith. "Realmente," bluntly observes Manresa, "si los dos
que se encuentran en lucha sobre la propiedad han provocado el conflicto por su voluntad; a ciencia y
paciencia del dueño del suelo, ante cuya vista las obras se han ejecutado, y con conciencia, por parte del
que edifica o planta, de que el terreno no es suyo, no hay razon alguna que abone derecho preferente

39
en favor de ninguno de los dos; deben, por tanto, tratarse como si los dos hubiesen obrado de buena fe;
la mala fe del uno extingue y neutraliza, en justa reciprocidad, la del otro." (Manresa, Codigo Civil,
segunda edicion Tomo III pag. 203.)Article 364 of our Civil Code then comes into play. "When there has
been bad faith, not only on the part of the person who built, sewed, or planted on another's land, but
also on the part of the owner of the latter, the rights of both shall be the same as if they had acted in
good faith. Bad faith on the part of the owner is deemed to exist whenever the act has been done in his
presence, with his knowledge and tolerance, and without opposition on his part." (Article 364, Civil
Code; see also arts. 1303, 1306 ibid.) The codal section is evidently based upon the venerable maxim of
equity that one who comes into equity must come with clean hands. A court which seeks to enforce on
the part of the defendant uprightness, fairness, and conscientiousness also insists that, if relief is to be
granted, it must be to a plaintiff whose conduct is not inconsistent with the standards he seeks to have
applied to his adversary.

Fundamenta justitiae sunt, ut ne cui noceatur, deinde ut communi serviatur. I therefore concur in the
result.

CONCEPCION, J., dissenting:

In view of the findings of fact of the Court of Appeals, which are final according to law, I dissent from the
majority opinion as to the legal denomination of the contract really entered into by the petitioner and
the now deceased Emiliana Ambrosio.

The facts according to the decision of the Court of Appeals are as follows:

"On August 27, 1918, the deceased, Emiliana Ambrosio applied for the land in question as a homestead,
now known as lot No. 285 of the Limay cadastral survey of Bataan, and the application was approved on
September 10, 1919. A final proof was submitted on November 10, 1927 which was approved on
October 17, 1929. The homestead patent No. 16074 and homestead certificate of title No. 325 were
issued in favor of the applicant on June 11, 1931 which were re- corded on June 26, 1931 in the office of
the register of deeds in accordance with the provisions of section 122 of ,Act 496.

"On or about May 16, 1932, the homestead owner, Emiliana Ambrosio offered to sell the property to the
defendant and appellee, Marcial Kasilag. The latter, upon examining her title found that it was a
homestead patent and knew, therefore, that the land subject of the patent could not be alienated by
express prohibition of law, so he devised a means by which the proposed sale might not appear in any
document and had the patentee, Emiliana Ambrosio, execute a public instrument, Exhibit '1', purporting
to be a mere mortgage of the improvements thereon consisting of four mango trees, fruit bearing; 110
hills of bamboo trees, 1 tamarind, and 6 bonga trees, with the assessed value of P860, in consideration
of the sum of P1,000 alleged to have been loaned by the said Kasilag to the said patentee, Emiliana
Ambrosio. It was expressly stipulated in that document that the aforementioned amount should be paid
within four and a half years from the date of the instrument (May 16, 1932), the condition being that if
she would fail to redeem the alleged mortgage at the expiration of the stipulated period, she would
execute a deed of absolute sale of the property therein described for the same amount of the alleged
mortgage (P1,000) including all unpaid interest at the rate of 12 per cent per annum in favor of the

40
alleged mortgagee. It was further stipulated therein that the said Emiliana should pay all the taxes and
assessment which might become due on the land and improvements during the term of the agreement
and that within thirty days after the date of the execution thereof she should file a motion before the
Court of First Instance of Bataan requesting the cancellation of the homestead certificate No. 325 above
referred to and the issuance in lieu thereof a certificate of title under the provisions of the Land
Registration Act 496, as amended by Act 3901.

"The lot in question was originally declared for land tax purposes in the name of the homestead (owner)
Emiliana Ambrosio, and assessed at P1,020 in 1933; but on May 22, 1934, the tax declaration was
transferred in the name of the appellee, Marcial Kasilag, and on March 6, 1936 the assessed value was
raised to P2,180.

"Emiliana, however, never paid any interest on the alleged loan of P1,000 or paid taxes on the land since
the execution of the contract.

"The evidence further discloses that the appellant entered upon the actual possession of the land and
had been holding the same up to the present time, having planted various kinds of fruit trees valued
according to him at P5,000, and collected the products thereof for his own exclusive benefit."

Relying upon the foregoing facts, the majority contends that the contract executed by the parties was
one of mortgage, as per Exhibit 1, with a promise to sell the land in question. I cannot hold to these
rulings of the majority, because the nature of the contract of mortgage is inconsistent with the idea that
the creditor should immediately enter upon the possession of the mortgaged land; that he should pay
the land tax; that he should introduce improvements thereon, and that he should accept as security
something whose values does not cover the amount of the loan sought to be secured, for in this case
the supposed loan was P1,000, and what were mortgaged were only the improvements consisting of 4
mango trees, 110 hills of bamboo trees, 1 tamarind tree and 6 betelnut trees, assessed at P860.

I believe that the contract which the parties intended to execute is a promise to sell the land, for which
reason Ambrosio retained the right of ownership of the land and its improvements while the deed of the
promised sale had not been executed. Under the terms of the deed Exhibit 1, Kasilag could not be
considered the owner of the land, nor could he execute any act premised upon the assumption of
ownership, nor could he alienate the same as he had no title to it. But the parties, in consideration of
the fact that Kasilag paid in advance the price of the land and assumed the obligation to pay the tax
thereon, which Ambrosio could not pay, agreed that Kasilag may enter upon the enjoyment of the land
until the promise to sell is converted in fact into an absolute sale by the execution of the corresponding
deed by Ambrosio. It was stipulated, however, that if the sale is not approved by the Court, Kasilag
would collect the amount of P1,000 paid by him as a mortgage credit, with all the interest due and
payable.

Under these circumstances, the conclusion of law that Kasilag acted in bad faith is not supported by the
established facts.

41
Wherefore, the plaintiffs are bound to comply with the contract as heirs of Ambrosio, by executing in
favor of Kasilag the deed of sale of the land, but should the sale, for any reason, be not approved,
Kasilag may collect the amount of P1,000 with all the interests thereon, and may execute the judgment
obtained by him upon the land and all its improvements, deducting, however, in his favor the value of
the improvements which he introduced upon the land in good faith.

In view of the foregoing, I am of the opinion that the decision of the Court of Appeals should be
reversed and that another should be entered against the respondents, requiring them to execute the
deed of sale of the land in favor of the petitioner, provided that if the sale, for any reason, be not
approved by the court, the petitioner may execute his credit upon the land and all its improvements,
after deducting the value of the improvements introduced by him upon the land.

MORAN, J., dissenting:

According to section 116 of Act No. 2874, as amended by section 23 of Act No. 3517, "lands acquired
under the free patent or homestead provisions shall not be subject to en- cumbrance or alienation from
the date of the approval of the application and for a term of five years from and after the date of
issuance of the patent or grant, nor shall they become liable to the satisfaction of any debt contracted
prior to the expiration of said period."

About June 11, 1931, homestead patent No. 16074 was issued to Emiliana Ambrosio, now deceased. On
May 16, 1932 Emiliana Ambrosio offered the sale of the said homestead to the herein petitioner,
Marcial Kasilag, and in view of the above-quoted legal prohibition, the parties executed the document
Exhibit 1, copied in the majority decision. The heirs of Emiliana Ambrosio filed a complaint for the
annulment of the contract in the Court of First Instance of Bataan, and from the judgment rendered by
said court an appeal was taken to the Court of Appeals, which held that the true contract between the
parties is one of absolute sale, wherefore, it is null and void under the already cited legal prohibition.
Marcial Kasilag comes to this court on certiorari, and this Court reverses the decision of the Court of
Appeals.

The only question is as to the true contract between the parties at the time of the execution of the deed
Exhibit 1: Kasilag contends that the contract is that set out in the document Exhibit 1, that is, a mortgage
of the improvements of the homestead to secure a loan of one thousand pesos given to Emiliana
Ambrosio; and the latter's heirs, in turn, contend that the contract is one of absolute sale of the
homestead, wherefore, it is null and void. The findings of the Court of Appeals are as follows:

"The pertinent facts as disclosed by the evidence of record are as follows:

"On August 27, 1918 the deceased, Emiliana Ambrosio, applied for the land in question as a homestead,
now known as lot No. 285 of the Limay cadastral survey of Bataan, and the application was approved on
September 10, 1919. A final proof was submitted on November 10, 1927 which was approved on
October 17, 1929. The homestead patent No. 16074 and homestead certificate of title No. 325 were
issued in favor of the applicant on June 11, 1931 which were recorded on June 26, 1931 in the office of
the register of deeds in accordance with the provisions of Section 122 of Act No. 496.

42
"On or about May 16, 1932, the homestead owner Emiliana Ambrosio offered to sell the property to the
defendant and appellee, Marcial Kasilag. The latter, upon examining her title found that its was a
homestead patent and knew, therefore, that the land subject of the patent could not be alienated by
express prohibition of law, so he devised means by which the proposed sale might not appear in any
document and had the patentee, Emiliana Ambrosio, execute a public instrument, Exhibit 1, purporting
to be a mere mortgage of the improvements thereon consisting of four mango trees, fruit bearing; one
hundred ten hills of bamboo trees, one thousand and six bonga trees, with the assessed value of P860,
in consideration of the sum of P1,000 alleged to have been loaned by the said Kasilag to the said
patentee Emiliana Ambrosio. It was expressly stipulated in that document that the aforementioned
amount should be paid within four and a half years from the date of the instrument (May 16, 1932), the
condition being that if she failed to redeem the alleged mortgage at the expiration of the stipulated
period, she would execute a deed of absolute sale of the property therein described for the same
amount of the alleged mortgage (P1,000) including all unpaid interest at the rate of 12 per cent per
annum in favor of the alleged mortgagee. It was further stipulated therein that the said Emiliana should
pay all the taxes and assessment which might become due on the land and improvements during the
term of the agreement and that within thirty days after the date of the execution thereof she should file
a motion before the Court of First Instance of Bataan requesting the cancellation of the homestead
certificate No. 325 above referred to and the issuance in lieu thereof of a certificate of title under the
provisions of the Land Registration Act No. 496, as amended by Act No. 3901.

"The lot in question was originally declared for land tax purposes in the name of the homestead owner,
Emiliana Ambrosio, and assessed at P1,020 in 1933; but on May 22, 1934, the tax declaration was
transferred in the name of the appellee, Marcial Kasilag, and on March 6, 1936 the assessed value was
raised to P2,180.

"Emiliana, however, never paid any interest on the alleged loan of P1,000 or paid taxes on the land since
the execution of the contract.

"The evidence further discloses that the appellee entered upon the actual possession of the land and
had been holding the same up to the present time, having planted various kinds of fruit trees valued
according to him at P5,000, and collected the products thereof for his own exclusive benefit.

"Construing the contract, Exhibit 1, in the light of all the foregoing facts and circumstances under which
it was executed in relation to the subsequent acts of the contracting parties, we are led to the
inescapable conclusion that their real intention was to execute an agreement of absolute sale of the
homestead together with the improvements thereon. The stipulation concerning an alleged mortgage in
the instrument is a mere devise to circumvent the law which expressly prohibits the alienation or
encumbrance of the homestead during the period of five years from the date of the issuance of the
homestead patent. (Sec. 116 of Act No. 2874 as amended by Act No. 3517.)

"It is inconceivable, and, therefore, we refuse to believe that the appellee, Marcial Kasilag, being an
intelligent man far above the average, would accept improvements valued at only P860 as security for
the payment of a larger amount of P1,000, the alleged loan. We entertain no doubt that at the time the

43
execution of the contract, Exhibit 1, the appellee knew that the homestead owner, Emiliana Ambrosio, a
poor ignorant woman, was badly in need of money and that she was determined to dispose of and
alienate definitely her homestead, as evidenced by the fact testified to by Gavino Rodriguez as witness
for the said appellee that she actually offered to sell the land to the latter. He also knew that she would
not be able to pay back to him such a large amount with interest of 12 per cent per annum because she
had no other income except what she would derive from the homestead. Under such circumstances,
there is reason to believe that she was no longer concerned with the form in which the contract would
be drawn, as long as she could obtain the amount of P1,000 which was agreeable to her as the price of
the homestead she offered to sell to the appellee. This conclusion is supported in part by the
subsequent action of Emiliana in not paying any interest on the alleged loan of P1,000 or the land taxes
thereon since the execution of the contract and by the action of the appellee in declaring the land for
tax purposes in his own name as owner thereof, notwithstanding that he had no interest in the land, as
he alleged, except in the improvements only.

"The contract of absolute sale was consummated, because the grantor, Emiliana, received full payment
of the purchase price disguised as a loan of P1,000 and placed the grantee, Marcial Kasilag, in absolute
possession and control of the land conveyed to him with all the improvements thereon. The stipulation
under article VIII of the contract, Exhibit 1, to the effect that the grantor 'would execute a deed of
absolute sale of the property herein described for the said amount of this mortgage including all unpaid
interest at the rate of 12 per cent per annum in favor of the mortgagee,' clearly indicates that there was
nothing left to be done except the execution of the deed of absolute sale, which is merely a matter of
form in contracts of this nature, which was postponed until after the expiration of four and a half years
because by that time the period of five years within which the property could not be alienated nor
encumbered in any way, as provided by section 116 of Act No. 2874 as amended by Act No. 3517, supra,
would have already expired. If the real purpose was to mortgage the improvements only as specified in
article IV of the contract, why is it that in article VIII thereof it was provided that in case of failure to
redeem the alleged mortgage the grantor would be required to execute a deed of absolute sale of the
property described therein for the same amount of the mortgage in favor of the grantee, and not of 'the
improvements only'? It is clear, therefore, that the real contract under Exhibit 1, was one of absolute
sale and not a mortgage with future sale."

In other words, although the document Exhibit 1 states that it is a mortgage of the improvements, with
a stipulation regarding a future sale of the land in case of failure to comply with the mortgage
obligations, in reality the true contract between the parties is one of absolute sale in the light of the
circumstances of the case, among them the following:

First. Emiliana Ambrosio offered the sale, not the mortgage, of her homestead to Marcial Kasilag, and it
is a fact found established by the Court of Appeals that she was agreeable to the sum of one thousand
pesos as the price of the sale offered by her. If this is so, it is unlikely that Kasilag would refuse the offer
of sale of the homestead and would accept in lieu thereof a simple mortgage of the improvements, for
the same sum of one thousand pesos;

44
Second. In the deed it is stipulated that, if at the expiration of the period of four and a half years, the
debtor should fail to redeem the mortgage, she would execute in favor of the creditor, Marcial Kasilag, a
deed of absolute sale not only of the mortgaged improvements but also of the land for the same
amount of the loan of one thousand pesos. This magic conversion of the mortgage of the improvements
into an absolute sale of the land at the expiration of four and a half years and without any additional
consideration can only mean that the two contracts are one and the same thing, and that the first has
been availed of to go around the legal prohibition. The scheme is very obvious, and to make any attempt
to reconcile it with good faith is simply to fall into it.

The mortgage of the improvements could not have been intended because the supposed loan which it
guaranteed was the same price of the stipulated sale to be later executed, and further because Kasilag
knew, according to the findings of fact of the Court of Appeals, that Emiliana Ambrosio was a poor and
ignorant woman who was not in a position to return the one thousand pesos;

Third. Kasilag had always considered the contract as one of sale of the land and not as a mortgage of the
improvements, because he put the tax declaration of the land in his name, paid the corresponding land
tax, took possession of the land, received the fruits thereof for his exclusive use, and introduced thereon
permanent improvements, one of them being a summer house, all of which were valued at about five
thousand pesos. It is not an attribute of a contract of mortgage that the creditor should take possession
of the mortgaged property, or that he should pay the taxes thereon. Kasilag would not spend five
thousand pesos for permanent improvements if he knew that his possession was precarious.

Fourth. In the document it is stipulated that the debtor would pay interest, but she did not pay any, and
the alleged t mortgage was not foreclosed thereby, which shows that the stipulation was nothing but a
ruse.

Fifth. The deed Exhibit 1 was drawn by Kasilag, because it is in English, and the other party is a poor and
ignorant woman, wherefore, all doubts and uncertainties arising therefrom should be resolved against
Kasilag. It is to be noted that in this document are phrases indicative of the real contract between the
parties. For instance: in clause IV the word paid and not loaned is used in referring to the loan of one
thousand pesos; and clause IX of the document states "the foregoing contract of sale".

Under all these circumstances, the irresistible conclusion is that the real contract between the parties is
an absolute sale, and that the contract of mortgage was made to appear in the document Exhibit 1 for
the sole purpose of defeating the legal prohibition. Nevertheless, the majority of this Court, brushing
aside the findings of fact made by the Court of Appeals without stating its reasons therefor, holds as to
the document Exhibit 1, that "as the terms thereof are clear and leave no room for doubt, it should be
interpreted according to the literal meaning of its clauses." I have already shown in speaking of the
second circumstance, that the context itself of the document Exhibit 1 discloses strong tokens that the
contract between the parties was one of sale and not of mortgage. Moreover, the rule relied upon by
the majority is only applicable in the absence of any allegation that the document does not express the
real contract between the parties. Under section 285, No. 1, of Act No. 190, a document, however clear
its conditions may be, may and should be rejected when it is alleged and shown by evidence aliunde that

45
it does not express the true intent of the parties. We have often considered a document, by its terms a
contract of absolute sale, as one of mortgage because it has been so alleged and established by
convincing oral evidence. (Cuyugan vs. Santos, 34 Phil., 100; Villa vs. Santiago, 38 Phil., 167; Laureano vs.
Kilayco, 34 Phil., 148; Cuyugan vs. Santos, 39 Phil., 970; Rodriguez vs. Pamintuan, 37 Phil., 876; see also
Manalo vs. Gueco, 42 Phil., 925; Gatmaitan vs. Nepomuceno, 42 Phil., 295.)

The majority decision does not only pass over the findings of fact made by the Court of Appeals, but,
further, gives weight to certain facts which said court finds not to have been established. For instance,
we have the following passages from the majority decision:

"One year after the execution of the aforequoted deed, that is, in 1933, it came to pass that Emiliana
Ambrosio was unable to pay the stipulated interest as well as the tax on the land and its improvements.
For this reason, she and the petitioner entered into another verbal contract whereby she conveyed to
the latter the possession of the land on condition that the latter would not collect the interest on the
loan, would attend to the payment of the land tax, would benefit by the fruits of the land, and would
introduce improvements thereon. . .

. . . This stipulation was verbally modified by the same parties after the expiration of one year, in the
sense that the petitioner would take possession of the land and would benefit by the fruits thereof on
condition that he would condone the payment of interest upon the loan and he would attend to the
payment of the land tax. . . "

These two paragraphs state as an established fact the supposed verbal contract between the parties
which Kasilag tried to prove by his testimony. However, the Court of Appeals expressly held: "We
believe, however, that the trial court erred in giving probative value to the testimony of the appellee
(Marcial Kasilag) with reference to the alleged verbal agreement with the deceased, Emiliana Ambrosio,
and based thereon the conclusion that the appellee acted in good faith." (Words in parenthesis are
mine.)

Rule 47, paragraph (b), of our Rules, provides expressly that in appeals to this court on certiorari, "only
questions of law may be raised and must be distinctly set forth." And we have held in various decisions
that in passing upon the legal conclusions of the Court of Appeals, we shall abide by the findings of fact
of said court.

I, moreover, find certain ambiguities in the majority decision, for while it states on the one hand that the
verbal contract had for its purpose the "alteration of the mortgage contract clearly entered into,
converting the latter into a contract of antichresis," (underscoring mine) thereby implying that the
mortgage contract was abandoned by the parties and ceased to exist, in the dispositive part of its
decision, the majority holds that the mortgage of the improvements is valid and binding, and gives to
the respondents the right to "redeem the mortgage of the improvements by paying to the petitioner
within three months the amount of P1,000 . . ." It, therefore, requires compliance with a contract that
has ceased to exist.

46
While on the one hand the majority states that the aforesaid verbal contract is one of antichresis and
that it is void, on the other hand, it gives force thereto by holding that the interest on the loan of one
thousand pesos is sufficiently "set off by the value of the fruits of the mortgaged improvements which
the petitioner received." And, furthermore, why should the interest be set off against the fruits of the
improvements only and not against those of the entire land? And if the verbal contract of antichresis is
void, why is Kasilag not required to render an accounting of the fruits of the land received by him which
may exceed the total amount of interest, taxes and even the principal itself ?

The majority states that Kasilag, in taking possession of the homestead, receiving its fruits and
introducing improvements thereon did so under the void contract of antichresis, and did so in good faith
as he was excusably unaware of the legal provision which prohibits the incumbrance of the homestead
within the period of five years. Whether Kasilag was aware or unaware of the legal prohibition is again a
factual question resolved by the Court of Appeals as follows: "the appellee (Marcial Kasilag) was also
aware of these provisions which were incorporated in the homestead patent shown to him at the
beginning of the transaction" (Words in parenthesis are mine). I do not understand how we can disturb
this factual finding.

I found, moreover, that in the majority decision it is ordered that, if the heirs of Emiliana Ambrosio
cannot pay the value of the permanent improvements introduced by Marcial Kasilag, the latter may
have the homestead by paying to them its price in the market. The improvements were appraised by the
trial court at three thousand pesos, and as the heirs of Emiliana Ambrosio probably inherited nothing
from the latter but poverty, they will eventually be unable to pay the said amount and, in the last
analysis, will lose the homestead of their mother. The practical effect, therefore, of the majority decision
is that the heirs of Emiliana Ambrosio will be deprived of the homestead by virtue of a void antichretic
obligation contracted by her within the period of five years from the granting of the homestead. And
this, at least, is in violation of the spirit of section 116 of the Homestead Act.

I have other reasons which I need not set out to bring this dissent to a close. But before I conclude, I
should like to state that the Homestead Act has been enacted for the welfare and protection of the
poor. The law gives a needy citizen a piece of land where he may build a modest house for himself and
family and plant what is necessary for subsistence and for the satisfaction of life's other needs. The right
of the citizens to their homes and to the things necessary for their subsistence is as vital as the right to
life itself. They have a right to live with a certain degree of comfort as become human beings, and the
State which looks after the welfare of the people's happiness is under a duty to safeguard the
satisfaction of this vital right. Moreover, a man with a home and a means of subsistence is a lover of
peace and order and will profess affection for his country, whereas one without a home and in penury is
not only a social parasite but also a dangerous element in the social order. The Homestead Act at once
aims at the promotion of wholesome and happy citizenship and the wiping out of the germs of social
discontent found everywhere.

Considering the social and economic ends of the Homestead Act, the courts should exercise supreme
care and strict vigilance towards faithful compliance with all its benign provisions and against the defeat,
directly or indirectly, of its highly commendable purposes. And it is my firm conviction that where, as in

47
the present case, a rich and clever man attempts to wrest a homestead granted to a poor and ignorant
woman, the slightest tokens of illegality should be enough to move the courts to apply the strong arm of
the law.

I dissent from the majority decision and vote for the affirmance of the decision of the Court of Appeals.

Avanceña, C.J., concurs.

[A.M. No. MTJ-92-706. March 29, 1995.]

LUPO ALMODIEL ATIENZA, complainant, vs. JUDGE FRANCISCO F. BRILLANTES, JR., Metropolitan Trial
Court, Branch 20, Manila, respondent.

SYLLABUS

1. CIVIL LAW; FAMILY CODE; NULLITY OF PREVIOUS MARRIAGE MAY BE INVOKED FOR PURPOSES
OF REMARRIAGE; REMARRIAGE MUST BE ENTERED ON OR AFTER AUGUST 3, 1988. — Article 40 is
applicable to remarriages entered into after the effectivity of the Family Code on August 3, 1988
regardless of the date of the first marriage.

2. ID.; ID.; APPLICATION OF LAWS; MAY BE GIVEN RETROACTIVE APPLICATION WHERE IT DOES
NOT PREJUDICE OR IMPAIR VESTED RIGHTS. — Under Article 256 of the Family Code, said Article is given
"retroactive effect insofar as it does not prejudice or impair vested or acquired rights in accordance with
the Civil Code or other laws." This is particularly true with Article 40, which is a rule of procedure.
Respondent has not shown any vested right that was impaired by the application of Article 40 to his
case.

3. ID.; ID.; ID.; NOT PRECLUDED BY MERE ADVERSE EFFECT ON LITIGANTS' RIGHT; REASON. — The
fact that procedural statutes may somehow affect the litigants' rights may not preclude their retroactive
application to pending actions. The retroactive application of procedural laws is not violative of any right
of a person who may feel that he is adversely affected (Gregorio v. Court of Appeals, 26 SCRA 229
[1968]). The reason is that as a general rule no vested right may attach to, nor arise from, procedural
laws (Billones v. Court of Industrial Relations, 14 SCRA 674 [1965]).

4. JUDICIAL ETHICS; JUDGES; CONTRACTING TWO MARRIAGES WITH THE SAME WOMAN
WITHOUT A MARRIAGE LICENSE AND COHABITING WITH ANOTHER CONSTITUTE GROSS IMMORALITY;
CASE AT BENCH. — Respondent was given an opportunity to correct the flaw in his first marriage when

48
he and Ongkiko were married for the second time. His failure to secure a marriage license on these two
occasions betrays his sinister motives and bad faith. It is evident that respondent failed to meet the
standard of moral fitness for membership in the legal profession. While the deceit employed by
respondent existed prior to his appointment as a Metropolitan Trial Judge, his immoral and illegal act of
cohabiting with De Castro began and continued when he was already in the judiciary.

DECISION

QUIASON, J p:

This is a complaint by Lupo A. Atienza for Gross Immorality and Appearance of Impropriety against Judge
Francisco Brillantes, Jr., Presiding Judge of the Metropolitan Trial Court, Branch 20, Manila.

Complainant alleges that he has two children with Yolanda De Castro, who are living together at No. 34
Galaxy Street, Bel-Air Subdivision, Makati, Metro Manila. He stays in said house, which he purchased in
1987, whenever he is in Manila.

In December 1991, upon opening the door to his bedroom, he saw respondent sleeping on his
(complainant's) bed. Upon inquiry, he was told by the houseboy that respondent had been cohabiting
with De Castro. Complainant did not bother to wake up respondent and instead left the house after
giving instructions to his houseboy to take care of his children.

Thereafter, respondent prevented him from visiting his children and even alienated the affection of his
children for him.

Complainant claims that respondent is married to one Zenaida Ongkiko with whom he has five children,
as appearing in his 1986 and 1991 sworn statements of assets and liabilities. Furthermore, he alleges
that respondent caused his arrest on January 13, 1992, after he had a heated argument with De Castro
inside the latter's office.

For his part, respondent alleges that complainant was not married to De Castro and that the filing of the
administrative action was related to complainant's claim on the Bel-Air residence, which was disputed
by De Castro.

Respondent denies that he caused complainant's arrest and claims that he was even a witness to the
withdrawal of the complaint for Grave Slander filed by De Castro against complainant. According to him,
it was the sister of De Castro who called the police to arrest complainant.

Respondent also denies having been married to Ongkiko, although he admits having five children with
her. He alleges that while he and Ongkiko went through a marriage ceremony before a Nueva Ecija town
mayor on April 25, 1965, the same was not a valid marriage for lack of a marriage license. Upon the
request of the parents of Ongkiko, respondent went through another marriage ceremony with her in
Manila on June 5, 1965. Again, neither party applied for a marriage license. Ongkiko abandoned
respondent 19 years ago, leaving their children to his care and custody as a single parent.

49
Respondent claims that when he married De Castro in civil rites in Los Angeles, California on December
4, 1991, he believed, in all good faith and for all legal intents and purposes, that he was single because
his first marriage was solemnized without a license.

Under the Family Code, there must be a judicial declaration of the nullity of a previous marriage before a
party thereto can enter into a second marriage. Article 40 of said Code provides:

"The absolute nullity of a previous marriage may be invoked for the purposes of remarriage on the basis
solely of a final judgment declaring such previous marriage void."

Respondent argues that the provision of Article 40 of the Family Code does not apply to him considering
that his first marriage took place in 1965 and was governed by the Civil Code of the Philippines; while
the second marriage took place in 1991 and governed by the Family Code.

Article 40 is applicable to remarriages entered into after the effectivity of the Family Code on August 3,
1988 regardless of the date of the first marriage. Besides, under Article 256 of the Family Code, said
Article is given "retroactive effect insofar as it does not prejudice or impair vested or acquired rights in
accordance with the Civil Code or other laws." This is particularly true with Article 40, which is a rule of
procedure. Respondent has not shown any vested right that was impaired by the application of Article
40 to his case.

The fact that procedural statutes may somehow affect the litigants' rights may not preclude their
retroactive application to pending actions. The retroactive application of procedural laws is not violative
of any right of a person who may feel that he is adversely affected (Gregorio v. Court of Appeals, 26
SCRA 229 [1968]). The reason is that as a general rule no vested right may attach to, nor arise from,
procedural laws (Billones v. Court of Industrial Relations, 14 SCRA 674 [1965]).

Respondent is the last person allowed to invoke good faith. He made a mockery of the institution of
marriage and employed deceit to be able to cohabit with a woman, who begot him five children.

Respondent passed the Bar examinations in 1962 and was admitted to the practice of law in 1963. At
the time he went through the two marriage ceremonies with Ongkiko, he was already a lawyer. Yet, he
never secured any marriage license. Any law student would know that a marriage license is necessary
before one can get married. Respondent was given an opportunity to correct the flaw in his first
marriage when he and Ongkiko were married for the second time. His failure to secure a marriage
license on these two occasions betrays his sinister motives and bad faith.

It is evident that respondent failed to meet the standard of moral fitness for membership in the legal
profession.

While the deceit employed by respondent existed prior to his appointment as a Metropolitan Trial
Judge, his immoral and illegal act of cohabiting with De Castro began and continued when he was
already in the judiciary.

50
The Code of Judicial Ethics mandates that the conduct of a judge must be free of a whiff of impropriety,
not only with respect to his performance of his judicial duties but also as to his behavior as a private
individual. There is no duality of morality. A public figure is also judged by his private life. A judge, in
order to promote public confidence in the integrity and impartiality of the judiciary, must behave with
propriety at all times, in the performance of his judicial duties and in his everyday life. These are judicial
guideposts too self-evident to be overlooked. No position exacts a greater demand on moral
righteousness and uprightness of an individual than a seat in the judiciary. (Imbing v. Tiongzon, 229
SCRA 690 [1994).

WHEREFORE, respondent is DISMISSED from the service with forfeiture of all leave and retirement
benefits and with prejudice to reappointment in any branch, instrumentality, or agency of the
government, including government-owned and controlled corporations. This decision is immediately
executory. prLL

SO ORDERED.

Narvasa, C.J., Feliciano, Padilla, Bidin, Regalado, Davide, Jr., Romero, Bellosillo, Melo, Puno, Vitug,
Kapunan, Mendoza and Francisco, JJ., concur.

[G.R. No. 112193. March 13, 1996.]

JOSE E. ARUEGO, JR., SIMEONA SAN JUAN ARUEGO, MA. IMMACULADA T. ALANON, ROBERTO A.
TORRES, CRISTINA A. TORRES, JUSTO JOSE TORRES and AGUSTIN TORRES, petitioners, vs. THE HON.
COURT OF APPEALS, THIRTEENTH DIVISION and ANTONIA ARUEGO, respondents.

Delia L. Hermoso for petitioners.

R.O. Acebedo & Associates Law Office for private respondent.

SYLLABUS

1. CIVIL LAW; FAMILY CODE; CANNOT BE GIVEN RETROACTIVE EFFECT WHEN ITS APPLICATION
WILL PREJUDICE VESTED RIGHT OF THE PARTY. — The present law cannot be given retroactive effect
insofar as the instant case is concerned, as its application will prejudice the vested right of private
respondent to have her case decided under Article 285 of the Civil Code. The right was vested on her by
the fact that she filed her action under the regime of the Civil Code. Prescinding from this, the
conclusion then ought to be that the action was not yet barred, notwithstanding the fact that it was
brought when the putative father was already deceased, since private respondent was then still a minor

51
when it was filed, an exception to the general rule provided under Article 285 of the Civil Code. Hence,
the trial court, which acquired jurisdiction over the case by the filing of the complaint, never lost
jurisdiction over the same despite the passage of E.O. No. 209, also known as the Family Code of the
Philippines.

2. REMEDIAL LAW; JURISDICTION; ONCE ATTACHED CANNOT BE OUSTED BY SUBSEQUENT EVENT.

— Our ruling herein reinforces the principle that the jurisdiction of a court, whether in criminal or civil
cases, once attached cannot be ousted by subsequent happenings or events, although of a character
which would have prevented jurisdiction from attaching in the first instance, and it retains jurisdiction
until it finally disposes of the case.

DECISION

HERMOSISIMA, JR., J p:

On March 7, 1983, a Complaint 1 for Compulsory Recognition and Enforcement of Successional Rights
was filed before Branch 30 of the Regional Trial Court of Manila by the minors, private respondent
Antonia F. Aruego and her alleged sister Evelyn F. Aruego, represented by their mother and natural
guardian, Luz M. Fabian. Named defendants therein were Jose E. Aruego, Jr. and the five (5) minor
children of the deceased Gloria A. Torres, represented by their father and natural guardian, Justo P.
Torres, Jr., now the petitioners herein.

In essence, the complaint avers that the late Jose M. Aruego, Sr., a married man, had an amorous
relationship with Luz M. Fabian sometime in 1959 until his death on March 30, 1982. Out of this
relationship were born Antonia F. Aruego and Evelyn F. Aruego on October 5, 1962 and September 3,
1963, respectively. The complaint prayed for an Order praying that herein private respondent and
Evelyn be declared the illegitimate children of the deceased Jose M. Aruego, Sr.; that herein petitioners
be compelled to recognize and acknowledge them as the compulsory heirs of the deceased Jose M.
Aruego; that their share and participation in the estate of their deceased father be determined and
ordered delivered to them.

The main basis of the action for compulsory recognition is their alleged "open and continuous
possession of the status of illegitimate children" as stated in paragraphs 6 and 7 of the Complaint, to wit:

"6. The plaintiffs' father, Jose M. Aruego, acknowledged and recognized the herein plaintiffs as his
children verbally among plaintiffs' and their mother's family friends, as well as by myriad different
paternal ways, including but not limited to the following:

(a) Regular support and educational expenses;

(b) Allowance to use his surname;

(c) Payment of maternal bills;

(d) Payment of baptismal expenses and attendance therein;

52
(e) Taking them to restaurants and department stores on occasions of family rejoicing;

(f) Attendance to school problems of plaintiffs;

(g) Calling and allowing plaintiffs to his office every now and then;

(h) Introducing them as such children to family friends.

7. The plaintiffs are thus, in continuous possession of the status of (illegitimate) children of the
deceased Jose M. Aruego who showered them, with the continuous and clear manifestations of paternal
care and affection as above outlined." 2

Petitioners denied all these allegations.

After trial, the lower court rendered judgment, dated June 15, 1992, the dispositive portion of which
reads:

"WHEREFORE, judgment is rendered —

1. Declaring Antonia Aruego as illegitimate daughter of Jose Aruego and Luz Fabian;

2. Evelyn Fabian is not an illegitimate daughter of Jose Aruego with Luz Fabian;

3. Declaring that the estate of deceased Jose Aruego are the following:

4. Antonia Aruego is entitled to a share equal to 1/2 portion of share of the legitimate children of
Jose Aruego;

5. Defendants are hereby ordered to recognize Antonia Aruego as the illegitimate daughter of Jose
Aruego with Luz Fabian;

6. Defendants are hereby ordered to deliver to Antonia Aruego (her) share in the estate of Jose
Aruego, Sr.;

7. Defendants to play (sic) plaintiff's (Antonia Aruego) counsel the sum of P10,000.00 as atty.'s fee;

8. Cost against the defendants." 3

Herein petitioners filed a Motion for Partial Reconsideration of the decision alleging loss of jurisdiction
on the part of the trial court over the complaint by virtue of the passage of Executive Order No. 209 (as
amended by Executive Order No. 227), otherwise known as the Family Code of the Philippines which
took effect on August 3, 1988. This motion was denied by the lower court in the Order, dated January
14, 1993.

Petitioners interposed an appeal but the lower court refused to give it due course on the ground that it
was filed out of time.

53
A Petition for Prohibition and Certiorari with prayer for a Writ of Preliminary Injunction was filed by
herein petitioners before respondent Court of Appeals, the petition was dismissed for lack of merit in a
decision promulgated on August 31, 1993. A Motion for Reconsideration when filed was denied by the
respondent court in a minute resolution, dated October 13, 1993.

Hence, this Petition for Review on Certiorari under Rule 45 alleging the following grounds:

RESPONDENT COURT HAD DECIDED A QUESTION OF SUBSTANCE IN A WAY NOT IN ACCORD WITH THE
LAW AND IS DIRECTLY CONTRADICTORY TO THE APPLICABLE DECISION ALREADY ISSUED BY THIS
HONORABLE COURT.

RESPONDENT COURT ERRED IN HOLDING THAT THE PETITION FILED BY PETITIONERS BEFORE IT DOES
NOT INVOLVE A QUESTION OF JURISDICTION.

RESPONDENT COURT HAD CLEARLY ERRED IN RULING THAT THERE IS NO PERCEPTIBLE DIFFERENCE
BETWEEN THE CIVIL CODE PROVISION AND THOSE OF THE FAMILY CODE ANENT THE TIME AN ACTION
FOR COMPULSORY RECOGNITION MAY BE MADE AND THAT THERE IS NO DIFFERENCE UNDER THE CIVIL
CODE FROM THAT OF THE FAMILY CODE CONCERNING THE REQUIREMENT THAT AN ACTION FOR
COMPULSORY RECOGNITION ON THE GROUND OF CONTINUOUS POSSESSION OF THE STATUS OF AN
ILLEGITIMATE CHILD SHOULD BE FILED DURING THE LIFETIME OF THE PUTATIVE PARENT, IN UTTER
DISREGARD OF THE RULING OF THIS HONORABLE COURT IN THE UYGUANGCO CASE THAT THE CIVIL
CODE PROVISION HAD BEEN SUPERSEDED, OR AT LEAST MODIFIED BY THE CORRESPONDING ARTICLES
IN THE FAMILY CODE.

RESPONDENT COURT ERRED IN DISMISSING PETITIONERS' PETITION FOR PROHIBITION AND IN HOLDING
THAT PETITIONERS REMEDY IS THAT OF AN APPEAL WHICH ALLEGEDLY HAD ALREADY BEEN LOST. 4

Private respondent's action for compulsory recognition as an illegitimate child was brought under Book
I, Title VIII of the Civil Code on PERSONS, specifically Article 285 thereof, which state the manner by
which illegitimate children may prove their filiation, to writ:

"Art. 285. The action for the recognition of natural children may be brought only during the
lifetime of the presumed parents, except in the following cases:

(1) If the father or mother died during the minority of the child, in which case the latter may file the
action before the expiration of four years from the attainment of his majority; . . ."

54
Petitioners, on the other hand, submit that with the advent of the New Family Code on August 3, 1988,
the trial court lost jurisdiction over the complaint of private respondent on the ground of prescription,
considering that under Article 175, paragraph 2, in relation to Article 172 of the New Family Code, it is
provided that an action for compulsory recognition of illegitimate filiation, if based on the "open and
continuous possession of the status of an illegitimate child," must be brought during the lifetime of the
alleged parent without any exception, otherwise the action will be barred by prescription. The law cited
reads:

"Article 172. The filiation of legitimate children is established by any of the following:

(1) The record of birth appearing in the civil register or a final judgment; or

(2) An admission of legitimate filiation in a public document or a private handwritten instrument

and signed by the parent concerned.

In the absence of the foregoing evidence, the legitimate filiation shall be proved by:

(1) The open and continuous possession of the status of a legitimate child; or

(2) Any other means allowed by the Rules of Court and special laws."

"Article 175. Illegitimate children may establish their illegitimate filiation in the same way and on the
same evidence as legitimate children.

The action must be brought within the same period specified in Article 173 [during the lifetime of the
child], except when the action is based on the second paragraph of Article 172, in which case the action
may be brought during the lifetime of the alleged parent."

In the case at bench, petitioners point out that, since the complaint of private respondent and her
alleged sister was filed on March 7, 1983, or almost one (1) year after the death of their presumed
father on March 30, 1982, the action has clearly prescribed under the new rule as provided in the Family
Code. Petitioners, further, maintain that even if the action was filed prior to the effectivity of the Family
Code, this new law must be applied to the instant case pursuant to Article 256 of the Family Code which
provides:

"This Code shall have retroactive effect insofar as it does not prejudice or impair vested or acquired
rights in accordance with the Civil Code or other laws."

The basic question that must be resolved in this case, therefore, appears to be: Should the provisions of
the Family Code be applied in the instant case? As a corollary, Will the application of the Family Code in
this case prejudice or impair any vested right of the private respondent such that it should not be given
retroactive effect in this particular case?

The phrase "vested or acquired rights" under Article 256, is not defined by the Family Code. "The
Committee did not define what is meant by a 'vested or acquired right,' thus leaving it to the courts to

55
determine what it means as each particular issue is submitted to them. It is difficult to provide the
answer for each and every question that may arise in the future." 5

In Tayag vs. Court of Appeals, 6 a case which involves a similar complaint denominated as "Claim for
Inheritance" but treated by this court as one to compel recognition as an illegitimate child brought prior
to the effectivity of the Family Code by the mother of the minor child, and based also on the "open and
continuous possession of the status of an illegitimate child," we had occasion to rule that:

"Under the circumstances obtaining in the case at bar, we hold that the right of action of the minor child
has been vested by the filing of the complaint in court under the regime of the Civil Code and prior to
the effectivity of the Family Code. We herein adopt our ruling in the recent case of Republic of the
Philippines vs. Court of Appeals, et al. 7 where we held that the fact of filing of the petition already
vested in the petitioner her right to file it and to have the same proceed to final adjudication in
accordance with the law in force at the time, and such right can no longer be prejudiced or impaired by
the enactment of a new law.

Accordingly, Article 175 of the Family Code finds no proper application to the instant case since it will
ineluctably affect adversely a right of private respondent and, consequentially, of the minor child she
represents, both of which have been vested with the filing of the complaint in court. The trial court is,
therefore, correct in applying the provisions of Article 285 of the Civil Code and in holding that private
respondent's cause of action has not yet prescribed."

Tayag applies four-square with the case at bench. The action brought by private respondent Antonia
Aruego for compulsory recognition and enforcement of successional rights which was filed prior to the
advent of the Family Code, must be governed by Article 285 of the Civil Code and not by Article 175,
paragraph 2 of the Family Code. The present law cannot be given retroactive effect insofar as the instant
case is concerned, as its application will prejudice the vested right of private respondent to have her
case decided under Article 285 of the Civil Code. The right was vested to her by the fact that she filed
her action under the regime of the Civil Code. Prescinding from this, the conclusion then ought to be
that the action was not yet barred, notwithstanding the fact that it was brought when the putative
father was already deceased, since private respondent was then still a minor when it was filed, an
exception to the general rule provided under Article 285 of the Civil Code. Hence, the trial court, which
acquired jurisdiction over the case by the filing of the complaint, never lost jurisdiction over the same
despite the passage of E.O. No. 209 also known as the Family Code of the Philippines.

Our ruling herein reinforces the principle that the jurisdiction of a court, whether in criminal or civil
cases, once attached cannot be ousted by subsequent happenings or events, although of a character
which would have prevented jurisdiction from attaching in the first instance, and it retains jurisdiction
until it finally disposes of the case. 8

WHEREFORE, the petition is DENIED and the decision of the Court of Appeals dated August 31, 1993 and
its Resolution dated October 13, 1993 are hereby AFFIRMED.

SO ORDERED.

56
Padilla, Bellosillo and Kapunan, JJ., concur.

Vitug, J., also believes that the Court of Appeals did not err in holding that the petition before it did not
involve a question of jurisdiction and cannot thus be a substitute for a lost appeal.

[G.R. No. 66826. August 19, 1988.]

BANK OF THE PHILIPPINE ISLANDS, petitioner, vs. THE INTERMEDIATE APPELLATE COURT and RIZALDY
T. ZSHORNACK respondents.

Pacis & Reyes Law Office for petitioner.

Ernesto T. Zshornack, Jr. for private respondent.

SYLLABUS

1. CIVIL LAW; DEPOSIT; NATURE; CASE AT BAR. — The Commercial Bank and Trust Co.
(subsequently absorbed by petitioner Bank of the Philippine Islands) through its assistant branch
manager for Quezon City acknowledged receipt from the private respondent of US$3,000.00 for
safekeeping. The subsequent acts of the parties also show that the intent of the parties was really for
the bank to safely keep the dollars and to return it to Zshornack at a later time. Thus, Zshornack
demanded the return of the money on May 10, 1976, or over five months later. The above arrangement
is that contract defined under Article 1962, New Civil Code, which reads: Art. 1962. A deposit is
constituted from the moment a person receives a thing belonging to another, with the obligation of
safely keeping it and of returning the same. If the safekeeping of the thing delivered is not the principal
purpose of the contract, there is no deposit but some other contract.

2. REMEDIAL LAW; ALLEGATIONS IN PLEADINGS; EFFECT OF FAILURE TO SPECIFICALLY DENY

THEREIN THE DUE EXECUTION OF DOCUMENTS. — The respondent's second cause of action was based
on an actionable document. It was therefore incumbent upon the bank to specifically deny under oath
the due execution of the document, as prescribed under Rule 8, Section 8, if it desired: (1) to question
the authority of Garcia to bind the corporation; and (2) to deny its capacity to enter into such contract.
No sworn answer denying the due execution of the document in question, or questioning the authority
of Garcia to bind the bank, or denying the bank's capacity to enter into the contract, was ever filed.
Hence, the bank is deemed to have admitted not only Garcia's authority, but also the bank's power, to
enter into the contract in question.

3. ID.; VOID CONTRACTS; CONTRACTS EXECUTED AGAINST A MANDATORY/PROHIBITORY LAW. —

The mere safekeeping of the greenbacks, without selling them to the Central Bank within one business
day from receipt, is a transaction which is not authorized by CB Circular No. 20, it must be considered as

57
one which falls under the general class of prohibited transactions. Hence, pursuant to Article 5 of the
Civil Code, it is void, having been executed against the provisions of a mandatory/prohibitory law.

4. ID.; ID.; ID.; EFFECT. — It affords neither of the parties a cause of action against the other.
"When the nullity proceeds from the illegality of the cause or object of the contract, and the act
constitutes a criminal offense, both parties being in pari delicto, they shall have no cause of action
against each other . . . " [Art. 1411, New Civil Code.] The only remedy is one on behalf of the State to
prosecute the parties for violating the law.

DECISION

CORTES, J p:

The original parties to this case were Rizaldy T. Zshornack and the Commercial Bank and Trust Company
of the Philippines [hereafter referred to as "COMTRUST."] In 1980, the Bank of the Philippine Islands
(hereafter referred to as "BPI") absorbed COMTRUST through a corporate merger, and was substituted
as party to the case.

Rizaldy Zshornack initiated proceedings on June 28, 1976 by filing in the Court of First Instance of Rizal
— Caloocan City a complaint against COMTRUST alleging four causes of action. Except for the third
cause of action, the CFI ruled in favor of Zshornack. The bank appealed to the Intermediate Appellate
Court which modified the CFI decision absolving the bank from liability on the fourth cause of action.
The pertinent portions of the judgment, as modified, read:

IN VIEW OF THE FOREGOING, the Court renders judgment as follows:

1. Ordering the defendant COMTRUST to restore to the dollar savings account of plaintiff (No. 25-
4109) the amount of U.S $1,000.00 as of October 27, 1975 to earn interest together with the remaining
balance of the said account at the rate fixed by the bank for dollar deposits under Central Bank Circular
343;

2. Ordering defendant COMTRUST to return to the plaintiff the amount of U.S. $3,000.00
immediately upon the finality of this decision, without interest for the reason that the said amount was
merely held in custody for safekeeping, but was not actually deposited with the defendant COMTRUST
because being cash currency, it cannot by law be deposited with plaintiff's dollar account and
defendant's only obligation is to return the same to plaintiff upon demand;

5. Ordering defendant COMTRUST to pay plaintiff in the amount of P8,000.00 as damages in the
concept of litigation expenses and attorney's fees suffered by plaintiff as a result of the failure of the
defendant bank to restore to his (plaintiff's) account the amount of U.S. $1,000.00 and to return to him
(plaintiff) the U.S. $3,000.00 cash left for safekeeping.

Costs against defendant COMTRUST.

SO ORDERED. [Rollo, pp. 47-48.]

58
Undaunted, the bank comes to this Court praying that it be totally absolved from any liability to
Zshornack. The latter not having appealed the Court of Appeals decision, the issues facing this Court are
limited to the bank's liability with regard to the first and second causes of action and its liability for
damages.

1. We first consider the first cause of action.

On the dates material to this case, Rizaldy Zshornack and his wife, Shirley Gorospe, maintained in
COMTRUST, Quezon City Branch, a dollar savings account and a peso current account.

On October 27, 1975, an application for a dollar draft was accomplished by Virgilio V. Garcia, Assistant
Branch Manager of COMTRUST Quezon City, payable to a certain Leovigilda D. Dizon in the amount of
$1,000.00. In the application, Garcia indicated that the amount was to be charged to Dollar Savings Acct.
No. 25-4109, the savings account of the Zshornacks; the charges for commission, documentary stamp
tax and others totalling P17.46 were to be charged to Current Acct. No. 210-465-29, again, the current
account of the Zshornacks. There was no indication of the name of the purchaser of the dollar draft.

On the same date, October 27, 1975, COMTRUST, under the signature of Virgilio V. Garcia, issued a
check payable to the order of Leovigilda D. Dizon in the sum of US$1,000 drawn on the Chase
Manhattan Bank, New York, with an indication that it was to be charged to Dollar Savings Acct. No. 25-
4109.

When Zshornack noticed the withdrawal of US$1,000.00 from his account, he demanded an explanation
from the bank. In answer, COMTRUST claimed that the peso value of the withdrawal was given to Atty.
Ernesto Zshornack, Jr., brother of Rizaldy, on October 27, 1975 when he (Ernesto) encashed with
COMTRUST a cashier's check for P8,450.00 issued by the Manila Banking Corporation payable to
Ernesto.

Upon consideration of the foregoing facts, this Court finds no reason to disturb the ruling of both the
trial court and the Appellate Court on the first cause of action. Petitioner must be held liable for the
unauthorized withdrawal of US$1,000.00 from private respondent's dollar account.

In its desperate attempt to justify its act of withdrawing from its depositor's savings account, the bank
has adopted inconsistent theories. First, it still maintains that the peso value of the amount withdrawn
was given to Atty. Ernesto Zshornack, Jr. when the latter encashed the Manilabank Cashier's Check. At
the same time, the bank claims that the withdrawal was made pursuant to an agreement where
Zshornack allegedly authorized the bank to withdraw from his dollar savings account such amount
which, when converted to pesos, would be needed to fund his peso current account. If indeed the peso
equivalent of the amount withdrawn from the dollar account was credited to the peso current account,
why did the bank still have to pay Ernesto?

At any rate, both explanations are unavailing. With regard to the first explanation, petitioner bank has
not shown how the transaction involving the cashier's check is related to the transaction involving the
dollar draft in favor of Dizon financed by the withdrawal from Rizaldy's dollar account. The two

59
transactions appear entirely independent of each other. Moreover, Ernesto Zshornack, Jr., possesses a
personality distinct and separate from Rizaldy Zshornack. Payment made to Ernesto cannot be
considered payment to Rizaldy. prcd

As to the second explanation, even if we assume that there was such an agreement, the evidence do not
show that the withdrawal was made pursuant to it. Instead, the record reveals that the amount
withdrawn was used to finance a dollar draft in favor of Leovigilda D. Dizon, and not to fund the current
account of the Zshornacks. There is no proof whatsoever that peso Current Account No. 210-465-29 was
ever credited with the peso equivalent of the US$1,000.00 withdrawn on October 27, 1975 from Dollar
Savings Account No. 25-4109.

2. As for the second cause of action, the complaint filed with the trial court alleged that on
December 8, 1975, Zshornack entrusted to COMTRUST, thru Garcia, US$3,000.00 cash (popularly known
as greenbacks) for safekeeping, and that the agreement was embodied in a document, a copy of which
was attached to and made part of the complaint. The document reads:

Makati Cable Address:

Philippines "COMTRUST"

COMMERCIAL BANK AND TRUST COMPANY

of the Philippines

Quezon City Branch

December 8, 1975

MR. RIZALDY T. ZSHORNACK

&/OR MRS. SHIRLEY E. ZSHORNACK

Sir/Madam:

We acknowledged (sic) having received from you today the sum of US DOLLARS: THREE THOUSAND
ONLY (US$3,000.00) for safekeeping.

Received by:(Sgd.)

VIRGILIO V. GARCIA

It was also alleged in the complaint that despite demands, the bank refused to return the money.

In its answer, COMTRUST averred that the US$3,000 was credited to Zshornack's peso current account
at prevailing conversion rates.

It must be emphasized that COMTRUST did not deny specifically under oath the authenticity and due
execution of the above instrument.

60
During trial, it was established that on December 8, 1975 Zshornack indeed delivered to the bank
US$3,000 for safekeeping. When he requested the return of the money on May 10, 1976, COMTRUST
explained that the sum was disposed of in this manner: US$2,000.00 was sold on December 29, 1975
and the peso proceeds amounting to P14,920.00 were deposited to Zshornack's current account per
deposit slip accomplished by Garcia; the remaining US$1,000. 00 was sold on February 3, 1976 and the
peso proceeds amounting to P8,350.00 were deposited to his current account per deposit slip also
accomplished by Garcia.

Aside from asserting that the US$3,000.00 was properly credited to Zshornack's current account at
prevailing conversion rates, BPI now posits another ground to defeat private respondent's claim. It now
argues that the contract embodied in the document is the contract of depositum (as defined in Article
1962, New Civil Code), which banks do not enter into. The bank alleges that Garcia exceeded his powers
when he entered into the transaction. Hence, it is claimed, the bank cannot be liable under the contract,
and the obligation is purely personal to Garcia. LexLib

Before we go into the nature of the contract entered into, an important point which arises on the
pleadings, must be considered.

The second cause of action is based on a document purporting to be signed by COMTRUST, a copy of
which document was attached to the complaint. In short, the second cause of action was based on an
actionable document. It was therefore incumbent upon the bank to specifically deny under oath the due
execution of the document, as prescribed under Rule 8, Section 8, if it desired: (1) to question the
authority of Garcia to bind the corporation; and (2) to deny its capacity to enter into such contract. [See,
E.B. Merchant v. International Banking Corporation, 6 Phil. 314 (1906).] No sworn answer denying the
due execution of the document in question, or questioning the authority of Garcia to bind the bank, or
denying the bank's capacity to enter into the contract, was ever filed. Hence, the bank is deemed to
have admitted not only Garcia's authority, but also the bank's power, to enter into the contract in
question.

In the past, this Court had occasion to explain the reason behind this procedural requirement.

The reason for the rule enunciated in the foregoing authorities will, we think, be readily appreciated. In
dealing with corporations the public at large is bound to rely to a large extent upon outward
appearances. If a man is found acting for a corporation with the external indicia of authority, any
person, not having notice of want of authority, may usually rely upon those appearances; and if it be
found that the directors had permitted the agent to exercise that authority and thereby held him out as
a person competent to bind the corporation, or had acquiesced in a contract and retained the benefit
supposed to have been conferred by it, the corporation will be bound notwithstanding the actual
authority may never have been granted . . . Whether a particular officer actually possesses the authority
which he assumes to exercise is frequently known to very few, and the proof of it usually is not readily
accessible to the stranger who deals with the corporation on the faith of the ostensible authority
exercised by some of the corporate officers. It is therefore reasonable in a case where an officer of a
corporation has made a contract in its name, that the corporation should be required, if it denies his

61
authority, to state such defense in its answer. By this means the plaintiffs apprised of the fact that the
agent's authority is contested; and he is given an opportunity to adduce evidence showing either that
the authority existed or that the contract was ratified and approved [Ramirez v. Orientalist Co. and
Fernandez, 38 Phil. 634, 645-646 (1918).]

Petitioner's argument must also be rejected for another reason. The practical effect of absolving a
corporation from liability every time an officer enters into a contract which is beyond corporate powers,
even without the proper allegation or proof that the corporation has not authorized nor ratified the
officer's act, is to cast corporations in so perfect a mold that transgressions and wrongs by such artificial
beings become impossible [Bissell v. Michigan Southern and N.I.R Cos, 22 N.Y 258 (1860).] "To say that a
corporation has no right to do unauthorized acts is only to put forth a very plain truism; but to say that
such bodies have no power or capacity to err is to impute to them an excellence which does not belong
to any created existence with which we are acquainted. The distinction between power and right is no
more to be lost sight of in respect to artificial than in respect to natural persons." [Ibid.]

Having determined that Garcia's act of entering into the contract binds the corporation, we now
determine the correct nature of the contract, and its legal consequences, including its enforceability.
LibLex

The document which embodies the contract states that the US$3,000.00 was received by the bank for
safekeeping. The subsequent acts of the parties also show that the intent of the parties was really for
the bank to safely keep the dollars and to return it to Zshornack at a later time. Thus, Zshornack
demanded the return of the money on May 10, 1976, or over five months later.

The above arrangement is that contract defined under Article 1962, New Civil Code, which reads:

Art. 1962. A deposit is constituted from the moment a person receives a thing belonging to
another, with the obligation of safely keeping it and of returning the same. If the safekeeping of the
thing delivered is not the principal purpose of the contract, there is no deposit but some other contract.

Note that the object of the contract between Zshornack and COMTRUST was foreign exchange. Hence,
the transaction was covered by Central Bank Circular No. 20, Restrictions on Gold and Foreign Exchange
Transactions, promulgated on December 9, 1949, which was in force at the time the parties entered into
the transaction involved in this case. The circular provides:

2. Transactions in the assets described below and all dealings in them of whatever nature,
including, where applicable their exportation and importation, shall NOT be effected, except with
respect to deposit accounts included in sub-paragraphs (b) and (c) of this paragraph, when such deposit
accounts are owned by and in the name of banks.

(a) Any and all assets, provided they are held through, in, or with banks or banking institutions
located in the Philippines, including money, checks, drafts, bullions, bank drafts deposit accounts
(demand, time and savings), all debts, indebtedness or obligations, financial brokers and investment
houses notes, debentures, stocks, bonds, coupons, bank acceptances, mortgages, pledges, liens or other

62
rights in the nature of security, expressed in foreign currencies, or if payable abroad, irrespective of the
currency in which they are expressed, and belonging to any person, firm, partnership, association,
branch office, agency, company or other unincorporated body or corporation residing or located within
the Philippines;

(b) Any and all assets of the kinds included and or described in subparagraph (a) above, whether or
not held through, in, or with banks or banking institutions, and existent within the Philippines, which
belong to any person, film, partnership, association, branch office, agency, company or other
unincorporated body or corporation not residing or located within the Philippines;

(c) Any and all assets existent within the Philippines including money, checks, drafts, bullions, bank
drafts, all debts, indebtedness or obligations, financial securities commonly dealt in by bankers, brokers
and investment houses, notes, debentures, stock, bonds, coupons, bank acceptances, mortgages,
pledges, liens or other rights in the nature of security expressed in foreign currencies, or if payable
abroad, irrespective of the currency in which they are expressed, and belonging to any person, firm,
partnership, association, branch office, agency, company or other unincorporated body or corporation
residing or located within the Philippines.

4. (a) All receipts of foreign exchange shall be sold daily to the Central Bank by those authorized to
deal in foreign exchange. All receipts of foreign exchange by any person, firm, partnership, association,
branch office, agency, company or other unincorporated body or corporation shall be sold to the
authorized agents of the Central Bank by the recipients within one business day following the receipt of
such foreign exchange. Any person, firm, partnership, association, branch office, agency, company or
other unincorporated body or corporation, residing or located within the Philippines, who acquires on
and after the date of this Circular foreign exchange shall not unless licensed by the Central Bank, dispose
of such foreign exchange in whole or in part, nor receive less than its full value, nor delay taking
ownership thereof except as such delay is customary; Provided, further, That within one day upon taking
ownership, or receiving payment, of foreign exchange the aforementioned persons and entities shall sell
such foreign exchange to designated agents of the Central Bank.

8. Strict observance of the provisions of this Circular is enjoined; and any person, firm or
corporation, foreign or domestic, who being bound to the observance thereof, or of such other rules,
regulations or directives as may hereafter be issued in implementation of this Circular, shall fail or refuse
to comply with, or abide by, or shall violate the same, shall be subject to the penal sanctions provided in
the Central Bank Act.

Paragraph 4 (a) above was modified by Section 6 of Central Bank Circular No. 281, Regulations on
Foreign Exchange, promulgated on November 26, 1969 by limiting its coverage to Philippine residents
only. Section 6 provides:

SEC. 6. All receipts of foreign exchange by any resident person, firm, company or corporation shall be
sold to authorized agents of the Central Bank by the recipients within one business day following the
receipt of such foreign exchange. Any resident person, firm, company or corporation residing or located
within the Philippines, who acquires foreign exchange shall not, unless authorized by the Central Bank,

63
dispose of such foreign exchange in whole or in part, nor receive less than its full value, nor delay taking
ownership thereof except as such delay is customary; Provided, That, within one business day upon
taking ownership or receiving payment of foreign exchange the aforementioned persons and entities
shall sell such foreign exchange to the authorized agents of the Central Bank.

As earlier stated, the document and the subsequent acts of the parties show that they intended the
bank to safekeep the foreign exchange, and return it later to Zshornack, who alleged in his complaint
that he is a Philippine resident. The parties did not intended to sell the US dollars to the Central Bank
within one business day from receipt. Otherwise, the contract of depositum would never have been
entered into at all.

Since the mere safekeeping of the greenbacks, without selling them to the Central Bank within one
business day from receipt, is a transaction which is not authorized by CB Circular No. 20, it must be
considered as one which falls under the general class of prohibited transactions. Hence, pursuant to
Article 5 of the Civil Code, it is void, having been executed against the provisions of a
mandatory/prohibitory law. More importantly, it affords neither of the parties a cause of action against
the other. "When the nullity proceeds from the illegality of the cause or object of the contract, and the
act constitutes a criminal offense, both parties being in pari delicto, they shall have no cause of action
against each other . . . " [Art. 1411, New Civil Code.] The only remedy is one on behalf of the State to
prosecute the parties for violating the law.

We thus rule that Zshornack cannot recover under the second cause of action.

3. Lastly, we find the P8,000.00 awarded by the courts a quo as damages in the concept of
litigation expenses and attorney's fees to be reasonable. The award is sustained. LLpr

WHEREFORE, the decision appealed from is hereby MODIFIED. Petitioner is ordered to restore to the
dollar savings account of private respondent the amount of US$1,000.00 as of October 27, 1975 to earn
interest at the rate fixed by the bank for dollar savings deposits. Petitioner is further ordered to pay
private respondent the amount of P8,000.00 as damages. The other causes of action of private
respondent are ordered dismissed.

SO ORDERED.

Gutierrez, Jr. and Bidin, JJ., concur.

Fernan, C.J., took no part — was counsel for Bank of P.I. (Cebu).

Feliciano, J., concurs in the result.

64
 [G.R. No. L-30061. February 27, 1974.]

THE PEOPLE OF THE PHILIPPINES, plaintiff-appellees, vs. JOSE JABINAL Y CARMEN, defendant-
appellant.

Solicitor General Felix V . Makasiar and Solicitor Antonio M. Martinez for plaintiff-appellee.

Pedro Panganiban y Tolentino for defendant-appellant.

DECISION

ANTONIO, J p:

Appeal from the judgment of the Municipal Court of Batangas (provincial capital), Batangas, in Criminal
Case No. 889, finding the accused guilty of the crime of Illegal Possession of Firearm and Ammunition
and sentencing him to suffer an indeterminate penalty ranging from one (1) year and one (1) day to two
(2) years imprisonment, with the accessories provided by law, which raises in issue the validity of his
conviction based on a retroactive application of Our ruling in People v. Mapa. 1

The complaint filed against the accused reads:

"That on or about 9:00 o'clock, p.m., the 5th day of September, 1964, in the poblacion, Municipality of
Batangas, Province of Batangas, Philippines, and within the jurisdiction of this Honorable Court, the
above-named accused, a person not authorized by law, did then and there wilfully, unlawfully and
feloniously keep in his possession, custody and direct control a revolver Cal. .22, RG-8 German made
with one (1) live ammunition and four (4) empty shells without first securing the necessary permit or
license to possess the same."

At the arraignment on September 11, 1964, the accused entered a plea of not guilty, after which trial
was accordingly held.

The accused admitted that on September 5, 1964, he was in possession of the revolver and the
ammunition described in the complaint, without the requisite license or permit. He, however, claimed to
be entitled to exoneration because, although he had no license or permit, he had an appointment as
Secret Agent from the Provincial Governor of Batangas and an appointment as Confidential Agent from
the PC Provincial Commander, and the said appointments expressly carried with them the authority to
possess and carry the firearm in question.

Indeed, the accused had appointments from the above-mentioned officials as claimed by him. His
appointment from Governor Feliciano Leviste, dated December 10, 1962, reads:

"Reposing special trust and confidence in your civic spirit, and trusting that you will be an effective agent
in the detection of crimes and in the preservation of peace and order in the province of Batangas,
especially with respect to the suppression of trafficking in explosives, jueteng, illegal cockfighting, cattle
rustling, robbery and the detection of unlicensed firearms, you are hereby appointed a SECRET AGENT of
the undersigned, the appointment to take effect immediately, or as soon as you have qualified for the

65
position. As such Secret Agent, your duties shall be those generally of a peace officer and particularly to
help in the preservation of peace and order in this province and to make reports thereon to me once or
twice a month. It should be clearly understood that any abuse of authority on your part shall be
considered sufficient ground for the automatic cancellation of your appointment and immediate
separation from the service. In accordance with the decision of the Supreme Court in G.R. No. L-12088
dated December 23, 1969, you will have the right to bear a firearm, particularly described below, for use
in connection with the performance of your duties.

"By virtue hereof, you may qualify and enter upon the performance of your duties by taking your oath of
office and filing the original thereof with us.

Very truly yours,

(Sgd.) FELICIANO LEVISTE

Provincial Governor

FIREARM AUTHORIZED TO CARRY:

Kind: — ROHM-Revolver

Make: — German

SN: — 64

Cal: — .22"

On March 15, 1964, the accused was also appointed by the PC Provincial Commander of Batangas as
Confidential Agent with duties to furnish information regarding smuggling activities wanted persons,
loose firearms, subversives and other similar subjects that night affect the peace and order condition in
Batangas province, and in connection with these duties he was temporarily authorized to possess an
ROHM revolver, Cal. .22 RG-8 SN-64, for his personal protection while in the performance of official
duties.

The accused contended before the court a quo that in view of his above-mentioned appointments as
Secret Agent and Confidential Agent, with authority to possess the firearm subject matter of the
prosecution, he was entitled to acquittal on the basis of the Supreme Court's decisions in People v.
Macarandang 2 and People v. Lucero. 3 The trial court, while conceding that on the basis of the
evidence of record the accused had really been appointed Secret Agent and Confidential Agent by the
Provincial Governor and the PC Provincial Commander of Batangas, respectively, with authority to
possess and carry the firearm described in the complaint, nevertheless held the accused in its decision
dated December 27, 1968, criminally liable for illegal possession of a firearm and ammunition on the
ground that the rulings of the Supreme Court in the cases of Macarandang and Lucero were reversed
and abandoned in People v. Mapa, supra. The court considered as mitigating circumstances the
appointments of the accused as Secret Agent and Confidential Agent.

66
Let us advert to Our decisions in People v. Macarandang, supra, People v. Lucero, supra, and People v.
Mapa, supra. In Macarandang, We reversed the trial court's judgment of conviction against the accused
because it was shown that at the time he was found to possess a certain firearm and ammunition
without license or permit, he had an appointment from the Provincial Governor as Secret Agent to assist
in the maintenance of peace and order and in the detection of crimes, with authority to hold and carry
the said firearm and ammunition. We there held that while it is true that the Governor has no authority
to issue any firearm license or permit, nevertheless, section 879 of the Revised Administrative Code
provides that "peace officers" are exempted from the requirements relating to the issuance of license to
possess firearms; and Macarandang's appointment as Secret Agent to assist in the maintenance of
peace and order and detection of crimes, sufficiently placed him in the category of a "peace officer"
equivalent even to a member of the municipal police who under section 879 of the Revised
Administrative Code are exempted from the requirements relating to the issuance of license to possess
firearms. In Lucero, We held that under the circumstances of the case, the granting of the temporary
use of the firearm to the accused was a necessary means to carry out the lawful purpose of the battalion
commander and must be deemed incident to or necessarily included in the duty and power of said
military commander to effect the capture of a Huk leader. In Mapa, expressly abandoning the doctrine in
Macarandang, and by implication, that in Lucero, We sustained the judgment of conviction on the
following ground:

"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. (Sec. 878, as amended by Republic Act No. 4, Revised Administrative Code.) 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.' (Sec. 879, Revised Administrative Code.)

'The law cannot be any clearer. No provision is made for a secret agent. As such he is not exempt. . . ."

It will be noted that when appellant was appointed Secret Agent by the Provincial Government in 1962,
and Confidential Agent by the Provincial Commander in 1964, the prevailing doctrine on the matter was
that laid down by Us in People v. Macarandang (1959) and People v. Lucero (1958). Our decision in
People v. Mapa reversing the aforesaid doctrine came only in 1967. The sole question in this appeal is:
Should appellant be acquitted on the basis of Our rulings in Macarandang and Lucero, or should his
conviction stand in view of the complete reversal of the Macarandang and Lucero doctrine in Mapa? The
Solicitor General is of the first view, and he accordingly recommends reversal of the appealed judgment.

Decisions of this Court, although in themselves not laws, are nevertheless evidence of what the laws
mean, and this is the reason why under Article 8 of the New Civil Code, "Judicial decisions applying or
interpreting the laws or the Constitution shall form a part of the legal system . . ." The interpretation

67
upon a law by this Court constitutes, in a way, a part of the law as of the date that law was originally
passed, since this Court's construction merely establishes the contemporaneous legislative intent that
the law thus construed intends to effectuate. The settled rule supported by numerous authorities is a
restatement of the legal maxim "legis interpretatio legis vim obtinet" — the interpretation placed upon
the written law by a competent court has the force of law. The doctrine laid down in Lucero and
Macarandang was part of the jurisprudence, hence, of the law, of the land, at the time appellant was
found by possession of the firearm in question and when he was arraigned by the trial court. It is true
that the doctrine was overruled in the Mapa case in 1967, but when a doctrine of this Court is overruled
and a different view is adopted, the new doctrine should be applied prospectively, and should not apply
to parties who had relied on the old doctrine and acted on the faith thereof. This is especially true in the
construction and application of criminal laws, where it is necessary that the punishability of an act be
reasonably foreseen for the guidance of society.

It follows, therefore, that considering that appellant was conferred his appointments as Secret Agent
and Confidential Agent and authorized to possess a firearm pursuant to the prevailing doctrine
enunciated in Macarandang and Lucero, under which no criminal liability would attach to his possession
of said firearm in spite of the absence of a license and permit therefor, appellant must he absolved.
Certainly, appellant may not be punished for an act which at the time it was done was held not to be
punishable.

WHEREFORE, the judgment appealed from is hereby reversed, and appellant is acquitted, with costs de
oficio.

Zaldivar, Barredo, Fernandez and Aquino, JJ ., concur.

Fernando, J ., did not take part.

68
 [G.R. No. L-5691. December 27, 1910.]

S. D. MARTINEZ and his wife, CARMEN ONG DE MARTINEZ, plaintiffs-appellees, vs. WILLIAM VAN
BUSKIRK, defendant-appellant.

Lionel D. Hargis for appellant.

Sanz and Oppisso for appellee.

SYLLABUS

1. MASTER AND SERVANT; DRIVERS OF HORSES; CUSTOM AND USAGE; NEGLIGENCE. — A

coachman or driver, who had driven the horses composing his team for a considerable time, during
which the animals has shown no disposition to become unruly, left his team as usual and was assisting in
unloading the wagon when the horses bolted and running into the plaintiffs' carriage caused personal
injuries to the plaintiff and damage to the vehicle. It was further shown that, to leave teams under like
circumstances and to assist in unloading the wagon, is the custom of drivers in the city and that the
custom is sanctioned by employers. Held: That acts, the performance of which has not proven
destructive or injurious and which have been generally acquiesced in by society for so long a time as to
have ripened into a custom, can not be held to be unreasonable or imprudent and that, under the
circumstances, the driver was not guilty of negligence in so leaving his team while assisting in unloading
his wagon.

DECISION

MORELAND, J p:

The facts found by the trial court are undisputed by either party in this case. They are —

"That on the 11th day of September, 1908, the plaintiff, Carmen Ong de Martinez, was riding in a
carromata on Calle Real, district of Ermita, city of Manila, P.I., along the left-hand side of the street as
she was going, when a delivery wagon belonging to the defendant used for the purpose of
transportation of fodder by the defendant, and to which was attached a pair of horses, came along the
street in the opposite direction to that the in which said plaintiff was proceeding, and that thereupon
the driver of the said plaintiff's carromata, observing that the delivery wagon of the defendant was
coming at great speed, crowded close to the sidewalk on the left-hand side of the street and stopped, in
order to give defendant's delivery wagon an opportunity to pass by, but that instead of passing by the
defendant's wagon and horses ran into the carromata occupied by said plaintiff with her child and
overturned it, severely wounding said plaintiff by making a serious cut upon her head, and also injuring
the carromata itself and the harness upon the horse which was drawing it.

"These facts are not dispute, but the defendant presented evidence to the effect that the cochero, who
was driving his delivery wagon at the time the accident occurred, was a good servant and was
considered a safe and reliable cochero; that the delivery wagon had sent to deliver some forage at Paco
Livery Stable on Calle Herran, and that for the purpose of delivery thereof the cochero driving the team

69
as defendant's employee tied the driving lines of the horses to the front end of the delivery wagon and
then went back inside of the wagon for the purpose of unloading the forage to be delivered; that while
unloading the forage and in the act of carrying some of it out, another vehicle drove by, the driver of
which cracked a whip and made some other noises, which frightened the horses attached to the delivery
wagon and they ran away, and the driver was thrown from the inside of the wagon out through the rear
upon the ground and was unable to stop the horses; that the horses then ran up and on which street
they came into collision with the carromata in which the plaintiff, Carmen Ong de Martinez, was riding."

The defendant himself was not with the vehicle on the day in question.

Upon these facts the court below found the defendant guilty of negligence and gave judgment against
him for P442.50, with interest thereon at the rate of 6 per cent per annum from the 17th day of
October, 1908, and for the costs of the action. The case is before us on an appeal from that judgment.

There is no general law of negligence in the Philippine Islands except that embodied in the Civil Code.
The provisions of that code pertinent to this case are —

"Art. 1902. A person who by an act or omission causes damage to another when there is fault or
negligence shall be obliged to repair the damage so done.

"Art. 1903. The obligation imposed by preceding article is demandable, not only for personal acts
and omissions, but also for those of the persons for whom they should be responsible.

"The father, and on his death or incapacity the mother, is liable for the damages caused by the minors
who live with them.

"Guardians are liable for the damages caused by minors or incapacitated persons who are under their
authority and live with them.

"Owners of directors of an establishment or enterprise are equally liable for the damages caused by the
employees in the service of the branches in which the latter may be employed or on account of their
duties.

"The State is liable in this sense when it acts through a special agent, but not when the damages should
have been caused by the official to whom properly it pertained to do the act performed, in which case
the provisions of the preceding article shall be applicable.

"Finally, masters or directors of arts and trades are liable for the damages caused by their pupils or
apprentices while they are under their custody.

"The liability referred to in this article shall cease when the persons mentioned therein prove that they
employed all the diligence of a good father of a family to avoid the damage."

Passing the question whether or not an employer who has furnished a gentle and tractable team and a
trusty and capable driver is, under the last paragraph of the above provisions, liable for the negligence

70
of such driver in handling the team, we are of the opinion that the judgment must be reversed upon the
ground that the evidence does not disclose that the cochero was negligent.

While the law relating to negligence in this jurisdiction may possibly be some what different from that in
Anglo-Saxon countries, a question we do not now discuss, the rules under which the fact of negligence is
determined are, nevertheless, generally the same. That is to say, while the law designating the person
responsible for a negligent act may not be the same here as in many jurisdictions, the law determining
what is a negligent act is the same here, generally speaking, as elsewhere. (Supreme court of Spain, 4
December, 1903; 16 May, 1893; 27 June, 1894; 9 April, 1896; 14 March, 1901; 2 March, 1904; 7
February, 1905; 16 June, 1905; 23 June, 1905; 13 April, 1903; 7 March, 1902; 12 June, 1900; 2 March,
1907; 18 March, 1898; 3 June, 1901.)

It appears from the undisputed evidence that the horses which caused the damage were gentle and
tractable; that the cochero was experienced and capable; that he had driven one of the horses several
years and the other five or six months; that he had been in the habit, during all that time, of leaving
them in the condition in which they were left on the day of the accident; that they had never run away
up to that time and there had been, therefore, no accident due to such practice; that to leave the horses
and assist in unloading the merchandise in the manner described on the day of the accident was the
custom of all cochero who delivered merchandise of the character of that which was being delivered by
the cochero of the defendant on the day in question, which custom was sanctioned by their employers.

In our judgment, the cochero of the defendant was not negligent in leaving the horses in the manner
described by the evidence in this case, either under Spanish or American jurisprudence. (Lynch vs.
Nurdin, 1 Q. B., 422; Rumsey vs. Nelson, 58 Vt., 590; Drake vs. Mount, 33 N. J. L., 442; Hoboken Land and
Improvement Co. vs. Lally, 48 N. J. L., 604; Wasmer vs. D. L. & W. R. R. Co., 80 N. Y., 212.)

In the case of Hayman vs. Hewitt (Peake N. P. Cas., pt. 2, p. 170), Lord Kenyon said:

"He was performing his duty while removing the goods into the house, and, if every person who
suffered a cart to remain in the street while he took goods out of it was obliged to employ another to
look after the horses, it would be impossible for the business of the metropolis to go on.

In the case of Griggs vs. Fleckenstein (14 Minn., 81), the court said:

"The degree of care required of the plaintiff, or those in charge of his horse, at the time of the injury, is
that which would be exercised by a person of ordinary care and prudence under like circumstances. It
can not be said that the fact of leaving the horse unhitched is in itself negligence. Whether it is
negligence to leave a horse unhitched must be depend upon the disposition of the horse; whether he
was under the observation and control of some person all the time, and many other circumstances; and
is a question to be determined by the jury from the facts of each case."

In the case of Belles vs. Kellner (67 N. J. L., 255), it was held that it was error on the part of the trial court
to refuse to charge that "it is not negligence for the driver of a quite, gentle horse to leave him

71
unhitched and otherwise unattended on the side of a public highways while the driver is upon the
sidewalk loading goods on the wagon." The said court closed its opinion with these words:

"There was evidence which could have fully justified the jury in finding that the horse was quite and
gentle, and that the driver was upon the sidewalk loading goods on the wagon, at time of the alleged
injury, and that the horse had been used for years in that way without accident. The refusal of the trial
court to charge as requested left the jury free to find was verdict against the defendant, although the
jury was convinced that these facts were proven.

In the case of Southworth vs. Ry. Co. (105 Mass., 342), it was held:

"That evidence that a servant, whom traders employed to deliver goods, upon stopping with his horse
and wagon to deliver a parcel at a house from fifty to a hundred rods from a railroad crossing, left the
horse unfastened for four or five minutes while he was in the house, knowing that it was not afraid of
cars, and having used it for three or four months without ever hitching it or knowing it to start, is not
conclusive, as a matter of law, of a want of due care on his part."

The duty, a violation of which is claimed to be negligence in the respect in question, is to exercise
reasonable care and prudence. Where reasonable care is employed in doing an act not itself illegal or
inherently likely to produce damage to others, there will be no liability, although damage in fact ensues.
(Milwaukee Ry. Co. vs. Arms, 91 U. S., 489; Parrott vs. Wells, 15 Wall., 524; Brown vs. Kendall, 6 Cushing,
292; Jackson Architectural Iron Works vs. Hurlbut, 158 N. Y., 34 Westerfield vs. Levis, 43 La. An., 63; Niosi
vs. Empire Steam Laundry, 117 Cal., 257.)

The act of defendant's driver in leaving the horses in the manner proved was not unreasonable or
imprudent. Acts the performance of which has not proved destructive or injurious and which have,
therefore, been acquiesced in by society for so long a time that they have ripened into custom, can not
be held to be themselves unreasonable or imprudent. Indeed the very reason why they have been
permitted by society is that they beneficial rather than prejudicial. Accidents sometimes happen and
injuries result from the most ordinary acts of life. But such are not their natural or customary results. To
hold that, because such an act once resulted in accident or injury, the actor is necessarily negligent, is to
go far. The fact that the doctrine of res ipsa loquitur is sometimes successfully invoked in such a case,
does not in any sense militate against the reasoning presented. That maxim at most only creates a prima
facie case, and that only in the absence of proof of the circumstances under which the act complained of
was performed. It is something invoked in favor of the plaintiff before defendant's case showing the
conditions and circumstances under which the injury occurred, the creative reason for the doctrine of
res ipsa loquitur disappears. This is demonstrated by the case of Inland and Seaboard Costing Co. vs.
Tolson (139 U.S., 551), where the court said (p. 554):

". . . The whole effect of the instruction in question, as applied to the case before the jury, was that if the
steamboat, on a calm day and in smooth water, was thrown with such force against a wharf properly
built, as to tear up some of the planks of the flooring, this would be prima facie evidence of negligence
on the part of the defendant's agent in making the landing, unless upon the whole evidence in the case
this prima facie evidence was rebutted. As such damage to a wharf is not ordinarily done by a steamboat

72
under control of her officers and carefully managed by them, evidence that such damage was done in
this case was prima facie, and, if unexplained, sufficient evidence of negligence on their part, and the
jury might properly be so instructed."

There was presented in this case, and by the plaintiffs themselves, not only the fact of the runway and
the accident resulting therefrom, but also the conditions under which the runaway occurred. Those
conditions showing of themselves that the defendant's cochero was not negligent in the management of
the horse, the prima facie case in plaintiffs' favor, if any, was destroyed as soon as made.

It is a matter of common knowledge as well as proof that it is the universal practice of merchants to
deliver merchandise of the kind of that being delivered at the time of the injury, in the manner in which
that was then being delivered; and that it is the universal practice to leave the horses in the manner in
which they were left at the time of the accident. This is the custom in all cities. It has not been
productive of accidents or injuries. The public, finding itself unprejudiced by such practice, has
acquiesced for years without objection. Ought the public now, through the courts, without prior
objection or notice, to be permitted to reverse the practice of decades and thereby make culpable and
guilty one who had every reason and assurance to believe that he was acting under the sanction of the
strongest of all civil forces, the custom of a people? We think not.

The judgment is reversed, without special finding as to costs. So ordered.

Arellano, C.J., Mapa, Johnson, Carson and Trent, JJ., concur.

Separate Opinions

TORRES, J., dissenting:

I am of the opinion that the judgment should be affirmed.

73
 [G.R. No. 50654. November 6, 1989.]

RUDY GLEO ARMIGOS, petitioner, vs. COURT OF APPEALS, CRISTITO MATA, and JUDGE L. D. CARPIO,
in his capacity as Judge of the Court of First Instance of Davao del Sur, Branch V, respondents.

David W. Natividad for petitioner.

Calamba, Garcia, Geralde & Calamba Law Offices for respondents.

SYLLABUS

1. CIVIL LAW; PRELIMINARY TITLE; COMPUTATION OF PERIOD; LAST DAY OF PERIOD COMPUTED
INCLUDED, EXCEPTION; DAY SYNONYMOUS WITH DATE. — The rule stated in Article 13 of the Civil Code
to the effect that "In computing a period, the first day shall be excluded, and the last day included" is
similar, but not identical to Section 4 of the Code of Civil Procedure which provided that "Unless
otherwise specially provided, the time within which an act is required by law to be done shall be
computed by excluding the first day and including the last; and if the last be Sunday or a legal holiday it
shall be excluded", as well as the old Rule 28 of the Rules of Court which stated that "In computing any
period of time prescribed or allowed by the Rules of Court, by order of a court, or by any other
applicable statute, the day of the act, event or default after which the designated period of time begins
to run is not to be included. The last day of the period so computed is to be included, unless it is a
Sunday or a legal holiday, in which event the time shall run until the end of the next day which is neither
a Sunday or a legal holiday." In applying this rule, the Court considered the day as synonymous with the
date and we find no cogent reason to adopt a different view.

2. ID.; ID.; ID.; ID.; ID.; RATIONALE. — Human memory on dates or days is frail and unless the day is
an extraordinary one for a person, there is no reasonable certainty of its correctness. What more for the
exact hour when a pleading, order or decision is received by a party.

3. REMEDIAL LAW; CIVIL PROCEDURE; APPEAL; PERIOD FOR FILING HABEAS CORPUS CASES. —
Petitioner's suggestion that the computation of the period to appeal should commence on the hour he
received a copy of the decision may find application in appeals in habeas corpus cases where the law
requires that such appeals should be made within 48 hours from notice of judgment.

4. ID.; ID.; ID.; PERFECTION THEREOF NOT ONLY MANDATORY BUT JURISDICTIONAL, EXCEPTION;
CASE AT BAR. — While it is true that rules of procedure are to be interpreted liberally so that the real
matter in dispute may be submitted to the judgment of the court, and that the trial court is vested with
discretion to allow or admit an appeal filed out of time, this discretion is not unconditional. There must
be justifiable reason to warrant such action, since the perfection of an appeal in the manner and within
the period laid down by law is not only mandatory but jurisdictional, and in the absence of any
jurisdiction to approve or admit an appeal filed out of time. In the instant case, the petitioner failed to
prove, or even claim, that his failure to appeal on time was due to fraud, accident, mistake or excusable
negligence.

DECISION

74
PADILLA, J p:

Review on certiorari of the decision * of the Court of Appeals, which dismissed the petition filed and
docketed therein as CA-G.R. No. SP-07192-R, entitled: "Rudy Gleo Armigos, petitioner, versus Judge L.D.
Carpio, respondent," and the resolution denying the motion for reconsideration of said decision. Cdpr

The undisputed facts are as follows:

The private respondent, Cristito Mata, filed a complaint against the herein petitioner with the Municipal
Court of Digos Davao del Sur, docketed as Civil Case No. 971, for the collection of damages and
attorney's fees. After trial, judgment was rendered in favor of the private respondent and against the
herein petitioner. A copy of the decision was received by the petitioner on 8 June 1977, and the
following day, 9 June 1977, he filed a notice of appeal with the said municipal court, and on 24 June
1977, he completed the other requirements for the perfection of an appeal, including the filing of an
appeal bond and the payment of the appellate court docket fee. However, when the case was elevated
to the Court of First Instance of Davao del Sur (Branch V) for the consideration of the appeal, the
presiding judge thereof ruled that the appeal was filed beyond the reglementary period; consequently,
he dismissed the appeal.

Whereupon, the petitioner filed a petition for certiorari, mandamus with preliminary injunction with the
Court of Appeals, claiming that from 8 June 1977, when he received a copy of the decision of the
municipal court, to 24 June 1977, when he perfected his appeal, only fifteen (15) days had elapsed so
that the decision of the Court of First Instance of Davao del Sur, dismissing his appeal for having been
filed beyond the reglementary period, is erroneous and contrary to law. The petitioner contended that
the computation of the period to appeal should commence on the hour he received copy of the
decision, so that the first of the 15-day period comprising 24 hours is from 4:00 o'clock p.m. of 9 June
1977 to 4:00 o'clock p.m. of 10 June 1977 and the last day, from 4:00 o'clock p.m. of 23 June 1977 to
4:00 o'clock p.m. of 24 June 1977.

The Court of Appeals, however, rejected the novel interpretation suggested as it would result in many
confusing situations and many unreliable testimonies as to the time a copy of a decision, order or
pleading is received, and cited the case of Republic of the Philippines vs. Encarnacion, 1 where this Court
held that when a law was to be effective upon approval by the President and the President signed the
same on 16 June 1950, the law should be considered to have taken effect not on the exact hour when
the President signed the same on 16 June 1950 but from the very first minute or hour of said day of 16
June 1950.

The petitioner filed a motion for reconsideration of the appellate court's decision, but his motion was
denied in a resolution promulgated on 7 December 1978.

Hence, the present recourse.

We find no merit in the petition. The rule stated in Article 13 of the Civil Code to the effect that "In
computing a period, the first day shall be excluded, and the last day included" is similar, but not identical

75
to Section 4 of the Code of Civil Procedure which provided that "Unless otherwise specially provided, the
time within which an act is required by law to be done shall be computed by excluding the first day and
including the last; and if the last be Sunday or a legal holiday it shall be excluded", as well as the old Rule
28 of the Rules of Court which stated that "In computing any period of time prescribed or allowed by the
Rules of Court, by order of a court, or by any other applicable statute, the day of the act, event or
default after which the designated period of time begins to run is not to be included. The last day of the
period so computed is to be included, unless it is a Sunday or a legal holiday, in which event the time
shall run until the end of the next day which is neither a Sunday or a legal holiday." In applying this rule,
the Court considered the day as synonymous with the date and we find no cogent reason to adopt a
different view.

Besides, human memory on dates or days is frail and unless the day is an extraordinary one for a person,
there is no reasonable certainty of its correctness. What more for the exact hour when a pleading, order
or decision is received by a party?

Petitioner's suggestion, however, may find application in appeals in habeas corpus cases where the law
requires that such appeals should be made within 48 hours from notice of judgment. 2

While it is true that rules of procedure are to be interpreted liberally so that the real matter in dispute
may be submitted to the judgment of the court, and that the trial court is vested with discretion to allow
or admit an appeal filed out of time, this discretion is not unconditional. There must be justifiable reason
to warrant such action, since the perfection of an appeal in the manner and within the period laid down
by law is not only mandatory but jurisdictional, and in the absence of any justifying circumstance, the
court has no jurisdiction to approve or admit an appeal filed out of time. 3 In the instant case, the
petitioner failed to prove, or even claim, that his failure to appeal on time was due to fraud, accident,
mistake or excusable negligence.

WHEREFORE, the petition is DENIED. With costs against the petitioner.

SO ORDERED.

Melencio-Herrera (Chairman), Sarmiento and Regalado, JJ., concur.

Paras, J., took no part.

76
 [G.R. No. L-29131. August 27, 1969.]

NATIONAL MARKETING CORPORATION, plaintiff- appellant, vs. MIGUEL D. TECSON, ET AL.,

defendants, MIGUEL D. TECSON, defendant-appellee, THE INSURANCE COMMISSIONER, petitioner.

Government Corporate Counsel Leopoldo M. Abellera and Trial Atty. Antonio M. Brillantes for
plaintiff-appellant.

Antonio T. Lacdan for defendant-appellee.

The Solicitor General for petitioner.

SYLLABUS

1. CIVIL LAW; PRESCRIPTION OF ACTIONS; ACTION FOR REVIVAL OF JUDGMENT; PERIOD

THEREFOR. — Pursuant to Article 1144-(3) of our Civil Code, an action upon a judgment "must be
brought within 10 years from the time the right of action accrues," which, in the language of Art. 1152 of
the same Code "commences from the time judgment sought to be revived has become final."

2. ID.; ID.; ID.; ID.; PRESCRIBED IN INSTANT CASE. — An action for revival of judgment which
become final on December 21, 1955, was filed on December 21, 1965. The lower court dismissed the
action on the ground of prescription, it having found that the aggregate of 10 years or 3,650 days from
December 21, 1955 expired on December 19, 1965, there being two leap years with the month of
February of 29 days. HELD: The order of dismissal should be affirmed. Art. 13 of the Civil Code of the
Philippines limits the computation of each "year" to 365 days.

3. ID.; ID.; INTERPRETATION OF MONTHS; JURISPRUDENCE. — Prior to the approval of the Civil
Code of Spain, the Supreme Court thereof had held on March 30, 1887, that, when the law spoke of
months, it meant a "natural" month or "solar" month, in the absence of express provision to the
contrary. Such provision was incorporated into the Civil Code of Spain, subsequently promulgated.
Hence, the same Supreme Court declared that, pursuant to Art. 7 of said Code, "whenever months . . .
are referred to in the law, it shall be understood that the months are of 30 days," not the "natural,"
"solar" or "calendar" months, unless they are "designated by name," in which case "they shall be
computed by the actual number of days they have." This concept was later, modified in the Philippines,
by Section 13 of the Revised Administrative Code, pursuant to which, "month shall be understood to
refer to a calendar month." In the language of this Court, in People vs. Del Rosario "with the approval of
the Civil Code of the Philippines (Republic Act 386) . . . we have reverted to the provisions of the Spanish
Civil Code in accordance with which a month is to be considered as the regular 30-day month and not
the solar or civil month," with the particularity that, whereas the Spanish Code merely mentioned
"months, days or nights," ours has added thereto the term "years" and explicitly ordains that "it shall be
understood that years are of three hundred sixty-five days."

4. SUPREME COURT; NO POWER OF LEGISLATION BY JUDICIAL DECREE. — Where, by upholding

the theory of appellant, Article 13 of the Civil Code of the Philippines is ignored and Section 13 of the
Revised Administrative Code is revived, the Court by such an interpretation would be engaging in judicial

77
legislation, and in effect, repealing an act of Congress. If public interest demands a reversion to the
policy embodied in the Revised Administrative Code, this may be done through legislative process, not
by judicial decree.

DECISION

CONCEPCION, J p:

This appeal has been certified to us by the Court of Appeals, only one question of law being involved
therein.

On November 14, 1955, the Court of First Instance of Manila rendered judgment, in Civil Case No. 20520
thereof, entitled "Price Stabilization Corporation vs. Miguel D. Tecson and Alto Surety and Insurance Co.,
Inc.," the dispositive part of which reads as follows.

"For the foregoing consideration, the Court decides this ease:

"(a) Ordering the defendants Miguel D. Tecson, and Alto Surety & Insurance Co. Inc. to pay jointly
and severally plaintiff PRATRA the sum of P7,200.00 plus 7% interest from May 25, 1960 until the
amount is fully paid, plus P500.00 for attorney's fees, and plus costs;

"(b) Ordering defendant Miguel D. Tecson to indemnify his co-defendant Alto Surety & Insurance
Co., Inc. on the cross-claim for all the amounts it would be made to pay in this decision, in case
defendant Alto Surety & Insurance Co., Inc. pay the amount adjudged to plaintiff in this decision. From
the date of such payment defendant Miguel D. Tecson would pay the Alto Surety & Insurance Co., Inc.,
interest at 12% per annum until Miguel D. Tecson has fully reimbursed plaintiff of the said amount."

Copy of this decision was, on November 21, 1955, served upon the defendants in said case. On
December 21, 1965, the National Marketing Corporation, as successor to all the properties, assets, rights
and chooses in action of the Price Stabilization Corporation, as plaintiff in that case and judgment
creditor therein, filed, with the same court, a complaint, docketed as Civil Case No. 63701 thereof,
against the same defendants, for the revival of the judgment rendered in said Case No. 20520.
Defendant Miguel D. Tecson moved to dismiss said complaint, upon the ground of lack of jurisdiction
over the subject-matter thereof and prescription of action. Acting upon the motion and plaintiff's
opposition thereto, said Court issued, on February 14, 1966, an order reading:

"Defendant Miguel Tecson seeks the dismissal of the complaint on the ground of lack of jurisdiction and
prescription. As for lack of jurisdiction, as the amount involved is less than P10,000 as actually these
proceedings are a revival of a decision issued by this same court, the matter of jurisdiction must be
admitted. But as for prescription. Plaintiffs admit the decision of this Court became final on December
21,1955. This case was filed exactly on December 21, 1965 — but more than ten years have passed a
year is a period of 365 days (Art. 13, CCP). Plaintiff forgot that 1960, 1964 were both leap years so that
when this present case was filed it was filed two days too late.

"The complaint insofar as Miguel Tecson is concerned is, therefore, dismissed as having prescribed."

78
The National Marketing Corporation appealed from such order to the Court of Appeals, which, on March
20, 1969, certified the case to this Court, upon the ground that the only question therein raised is one of
law, namely, whether or not the present action for the revival of a judgment is barred by the statute of
limitations.

Pursuant to Art. 1144-(3) of our Civil Code, an action upon a judgment "must be brought within ten
years-from the time the right of action accrues," which, in the language of Art. 1152 of the same Code,
"commences from the time the judgment sought to be revived has become final." This, in turn, took
place on December 21, 1955, or thirty (30) days from notice of the judgment — which was received by
the defendants herein on November 21, 1955 — no appeal having been taken therefrom. 1 The issue is
thus confined to the date on which ten (10) years from December 21, 1955 expired.

Plaintiff-appellant alleges that it was December 21, 1965, but appellee Tecson maintains otherwise,
because "when the laws speak of years . . . it shall be understood that years are of three hundred sixty-
five days each" — according to Art. 13 of our Civil Code - and, 1960 and 1964 being leap years, the
month of February in both had 29 days, so that ten (10) years of 365 days each, or an aggregate of 3,650
days, from December 21, 1955, expired on December 19, 1965. The lower court accepted this view in its
appealed order of dismissal.

Plaintiff-appellant insists that the same "is erroneous, because a year means a calendar year (Statutory
Construction, Interpretation of Laws, by Crowford, p. 383) and since what is being computed here is the
number of years, a calendar year should be used as the basis of computation. There is no question that
when it is not a leap year, December 21 to December 21 of the following year is one year. If the extra
day in a leap year is not a day of the year, because it is the 366 day, then to what year does it belong?
Certainly, it must belong to the year where it falls and, therefore, that the 366 days constitute one year."
2

The very conclusion thus reached by appellant shows that its theory contravenes the explicit provision
of Art. 13 of the Civil Code of the Philippines, limiting the connotation of each "year" — as the term is
used in our laws — to 365 days. Indeed, prior to the approval of the Civil Code of Spain, the Supreme
Court thereof had held, on March 30, 1887, that, when the law spoke of months, it meant a "natural"
month or "solar" month, in the absence of express provision to the contrary. Such provision was
incorporated into the Civil Code of Spain, subsequently promulgated. Hence, the same Supreme Court
declared 3 that, pursuant to Art. 7 of said Code, "'whenever months . . . are referred to in the law, it
shall be understood that the months, are of 30 days", not the "natural", "solar" or "calendar" months,
unless they are "designated by name," in which case "they shall be computed by the actual number of
days they have." This concept was, later, modified in the Philippines, by Section 13 of the Revised
Administrative Code, pursuant to which, "month shall be understood to refer to a calendar month." 4 In
the language of this Court, in People vs. Del Rosario, 5 "with the approval of the Civil Code of the
Philippines (Republic Act 386) . . . we have reverted to the provisions of the Spanish Civil Code in
accordance with which a month is to be considered as the regular 30-day month . . . and not the solar or
civil month," with the particularity that, whereas the Spanish Code merely mentioned "months, days or

79
nights," ours has added thereto the term "years " and explicitly ordains that "it shall be understood that
years are of three hundred sixty-five days."

Although some members of the Court are inclined to think that this legislation is not realistic, for failure
to conform with ordinary experience or practice, the theory of plaintiff-appellant herein cannot be
upheld without ignoring, if not nullifying, Art. 13 of our Civil Code, and reviving Section 13 of The
Revised Administrative Code, thereby engaging in judicial legislation, and, in effect, repealing an act of
Congress. If public interest demands a reversion to the policy embodied in the Revised Administrative
Code, this may be done through legislative process, not by judicial decree.

WHEREFORE, the order appealed from should, as it is hereby affirmed, without costs. It is so ordered.

Dizon, Makalintal, Sanchez, Castro, Fernando, Capistrano, Teehankee and Barredo, JJ., concur.

Reyes, J.B.L. and Zaldivar, JJ., are on official leave abroad.

[G.R. No. 915. August 1, 1902.]

THE UNITED STATES, complainant-appellant, vs. AMBROSIO TIQUI, defendant-appellee.

Solicitor-General Araneta, for appellant.

Simplicio del Rosario, for private prosecutor.

Basilio R. Mapa, for appellee.

SYLLABUS

1. CRIMINAL PROCEDURE; APPEAL; COMPUTATION OF TIME. — In determining whether an appeal

has been taken within the fifteen days allowed by law the first day is excluded and the last day is
included.

DECISION

ARELLANO, C .J p:

The final judgment in this case having been pronounced on the 31st day of March last, the complaining
witness, on the 5th day of April, gave notice of appeal. The appeal was allowed. Counsel for the accused
now moves the court to dismiss the appeal on the ground that it was taken on the sixteenth day after
the promulgation of the sentence, fifteen days being the term assigned by article 47 of the law.

80
The question arising is whether the fifteen days are to be counted from the very day of the publication
of the judgment.

In a doubtful case the law will be interpreted in the light of its underlying principles. The law in question
is based upon the American legislation, and the local legislation in force prior to its promulgation, which,
by section 1 thereof, is declared to be continued in force in so far as not in conflict with its provisions.

Under the American system, in computing time the first day is excluded and the last day included, it not
being necessary to cite authority in support of this proposition, inasmuch as the same doctrine has been
established in the special legislation of the Philippines, as may be seen in articles 4 and 76 of the Code of
Civil Procedure now in force. No rule was more uniform in the law as formerly and as still enforced in
these Islands, as may be seen in the Codes of Criminal and Civil Procedure, as well as in the Code of
Commerce and the Civil Code. Article 1130 of the Civil Code establishes as a principle that "when the
term of an obligation is fixed by days to be counted from a specified one, such day shall be excluded
from the computation, which shall begin in the following day." It not being demonstrated that article 47
of General Orders No. 58, upon the subject of criminal procedure has intentionally departed from these
precedents, it must be construed harmoniously with the other law, both substantive and adjective,
which is wholly uniform on this subject. The reason why the first day is excluded is undoubtedly because
the appellant is given fifteen days in which to appeal, and as Paragraph 1, article 7 of the Civil Code
provides that a day shall always be understood to consist of twenty-four hours, it follows that the period
allowed would not be fifteen complete days were the day in question - that is, the day of the publication
of the judgment — to be included in the computation.

The motion is therefore overruled, with costs. So ordered.

Torres, Cooper, Willard and Ladd, JJ ., concur.

Ladd, J ., did not sit in this case.

81
 [G.R. No. 6889. March 23, 1915.]

JOAQUIN IBAÑEZ DE ALDECOA Y PALET ET AL., plaintiffs-appellants, vs. THE HONGKONG & SHANGHAI
BANKING CORPORATION, ET AL., defendants-appellants.

Chicote & Miranda and Tirso de Irureta Goyena for plaintiffs.

Haussermann, Cohn & Fisher for defendants.

SYLLABUS

1. GUARDIAN AND WARD; "PATRIA POTESTAD" (PARENTAL AUTHORITY) IMPLIED REPEAL. — The
provisions of the present Code of Civil Procedure on guardianship repeal by implication those of the Civil
Code relating to that portion of the patria potestad (parental authority) which gives to parents the
administration and usufruct of the property of their minor children. But parents are still entitled, under
normal conditions, to the custody and care of the persons of their minor children.

2. ID.; ID.; ID.; SCOPE OF SECTION 581 OF THE CODE OF CIVIL PROCEDURE. — The saving proviso of
section 581 of the Code of Civil Procedure was intended to withhold the application of the new law from
all those incompetents who were at that time being taken care of under the provisions of the Civil Code
and who would otherwise have been affected by the new law. A parent exercising the patria potestad
(parental authority) over the property of his minor children was substantially, although not eo nomine,
as nearly a guardian within the meaning of that word as used in the Code of Civil Procedure as the Civil
Code guardian. The prerogative of the parent over the property of his minor children under the patria
potestad (parental authority) and the Civil Code guardian have both been abolished by the new law of
guardianship. It is therefore held that pending cases of the one and of the other are equally saved from
the operation of the new law by section 581.

3. PARENT AND CHILD- EMANCIPATION BY PARENTS NO LONGER POSSIBLE. — Formal

emancipation of minor children by their parents after the age of 18 is no longer possible.

4. ID.; ID.; IMPLIED EMANCIPATION. — As to whether implied emancipation is still permissible and
as to the validity of contract entered into by minor children while living apart from and independently of
their parents under the present condition of the law, quaere.

5. ID.; EMANCIPATION AFTER ENACTMENT OF CODE OF CIVIL PROCEDURE. — A parent assumed

charge of the property of her minor children in 1895 under the provisions of the Civil Code relating to
the patria potestad (parental authority). Subsequent to the enactment of the new Code of Civil
Procedure in 1901, she formally emancipated these children and still later the children executed a
mortgage upon their real property with the formal consent of their mother. Held, That the patria
potestad (parental authority) of the mother did not terminate upon the enactment of the new Code of
Civil Procedure, but was saved from the operation of the new law by section 581 thereof. Hence, her
rights and duties as to her children as well as theirs, should be regulated by the provisions of the Civil
Code. Under the Civil Code the mother could validly emancipate the children, and, subsequent to such

82
emancipation, the children could execute a binding mortgage upon their real property with the consent
of their mother.

ON MOTION for rehearing:

6. PARENT AND CHILD; EMANCIPATION; CONFLICT OF INTERESTS. — Under the Civil Code, a
formally emancipated child has full capacity to control his own person and property save only with the
express limitations enumerated in article 317. Hence, conflicting interests of the parent and child do not
of themselves require, as in the case of minor children not emancipated, the appointment of a next
friend.

7. CONTRACTS; STATEMENT OF FALSE CONSIDERATION. — Plaintiffs became sureties for a debt

owing by a firm of which they believed themselves to be partners. It later turned out that they were
creditors and not partners of the said firm. In either case the plaintiffs were interested in tiding the firm
over its financial difficulties and preserving its business intact. Held, That there was a valid and subsisting
consideration for the mortgage contract.

DECISION

TRENT, J p:

This is an appeal from the judgment of the Court of First Instance of the city of Manila entered on the
27th day of January, 1911.

This action was commenced in October, 1908, by Joaquin Ibañez de Aldecoa and Zoilo Ibañez de Aldecoa
to cancel a certain instrument of mortgage executed by them, jointly with Aldecoa & Co. and Isabel
Palet, in favor of the Hongkong and Shanghai Banking Corporation. By this mortgage various properties
of Aldecoa & Co., of Isabel Palet, and of the plaintiffs were hypothecated to secure the payment unto
the bank of an overdraft of Aldecoa & Co., amounting to P475,000. The judgment of the trial court
dismisses the action as to Joaquin Ibañez de Aldecoa and grants the relief sought in favor of Zoilo Ibañez
de Aldecoa. Both Joaquin Ibañez de Aldecoa and the bank appealed.

The plaintiffs, Joaquin Ibañez de Aldecoa and Zoilo Ibañez de Aldecoa, were born in the Philippine
Islands on March 27, 1884, and July 4, 1885, respectively, the legitimate children of Zoilo Ibañez de
Aldecoa and Isabel Palet. Both parents were natives of Spain. The father's domicile was in Manila,
Philippine Islands, and he died here on October 4, 1895. The widow, still retaining her Manila domicile,
left the Philippine Islands and went to Spain in 1897, because of her health, and did not return until
1902. The two plaintiffs accompanied her on this journey and returned with her. After the death of the
father, the firm of Aldecoa & Co., of which he had been a member, was reorganized, and his widow
became one of the general, or "capitalistic," partners of the firm. In the public instrument which
constitutes the articles of copartnership, the plaintiffs appear as partners.

On July 31, 1903, Isabel Palet, the mother of the plaintiffs, who were then over the age of 18 years, went
before a notary public and executed two instruments (Exhibits D and E) wherein and whereby she
emancipated her two sons, the plaintiffs, with their consent. No guardian of the person or property of

83
these two plaintiffs had ever been applied for or appointed under and by virtue of the provisions of the
Code of Civil Procedure since the promulgation of said Code in 1901. Instead, the plaintiffs had
continued from the death of their father under the custody of their mother until the execution of
Exhibits D and E.

On February 23, 1906, the firm of Aldecoa & Co. was heavily indebted to the Hongkong and Shanghai
Bank, and the latter was desirous of collecting or securing the payment of this indebtedness. The
correspondence between Aldecoa & Co. and Isabel Palet, the plaintiffs, and the bank disclosed that the
bank would foreclose this account unless the same was sufficiently guaranteed by adequate securities. It
was finally proposed that Isabel Palet and her two sons, the plaintiffs, should mortgage, in addition to
certain securities of Aldecoa & Co., certain of their real properties as security for the obligations of
Aldecoa & Co. So, on February 23, 1906, the mortgage, which is the subject matter of the present action,
was executed. On December 31, 1906, the firm of Aldecoa & Co. expired by limitation of the partnership
term, and the firm went into liquidation.

On June 30, 1907, Aldecoa & Co. in liquidation, for the purposes of certain litigation about to be
commenced in its behalf, required an injunction bond in the sum of P50,000, which was furnished by the
bank upon the condition that any liability incurred on the part of the bank upon the injunction bond
would be added to the existing debt of Aldecoa & Co. and would be covered by the mortgage of
February 23, 1906. An agreement to this effect was executed by Isabel Palet, by the plaintiff Joaquin
Ibañez de Aldecoa, who had then attained his full majority, and by Zoilo Ibañez de Aldecoa, who was not
yet 23 years of age. Subsequent thereto, and in 1908, the plaintiffs commenced an action against their
mother, Isabel Palet, and Aldecoa & Co., in which the bank was not a party, and in September of that
year, procured a judgment annulling the articles of copartnership of Aldecoa & Co., in so far as the
plaintiffs were concerned, and decreeing that they were creditors and not partners of that firm.

The question is presented whether Doña Isabel Palet could legally emancipate the plaintiffs under the
law in force in this country in July, 1903, and thus confer upon them capacity to execute a valid
mortgage on their real property with her consent. The solution of this question involves an inquiry as to
the effect of the provisions of the new Code of Civil Procedure relating to guardianship upon certain
provisions of the Civil Code relating to the control by parents over the persons and property of their
minor children.

Under the Civil Code parents had general control over the persons of their children and also over their
property. The following articles of the Civil Code illustrate the extent of the parental authority over the
property of their minor children under that code:

"159. The father, or in his absence, the mother, is the legal administrator of the property of the
children who are under their authority.

"160. The ownership of property which a child not emancipated may have acquired, or acquires by its
work or industry or for any good consideration, is vested in the child, and the usufruct in the father or
mother, who has him or her under his or her authority and in his or her company; but if the child, with
the consent of the parents, lives independently of them, he or she shall be considered as emancipated

84
for all purposes with regard to said property and shall own it and enjoy the usufruct and administration
thereof.

"161. The ownership and usufruct of what the child acquires with the capital of his or her parents is
vested in the latter; but should the parents expressly assign to him or her the whole or a part of the
profits which he or she may obtain, such profits shall not be chargeable to the latter in the inheritance.

"162. The ownership or usufruct of the property or income donated or left by will to a child not
emancipated, to cover the cost of his or her education and instruction, is vested in him or her; but the
father or the mother shall have the administration thereof if no other proviso has been made in the gifts
or bequest, in which case the will of the donors shall be strictly observed."

Nothing is here said of a bonded guardian appointed by the court and required to account to the court
for the property and income of the child's estate. Filiation stood in lieu of those legal safeguards with
which the present Code of Procedure envelops the property of a minor child. Not only this, but the
income or usufruct of property inherited by the child or bequeathed to it belonged to the parent unless
the child had been formally emancipated or lived apart from his parent with the latter's consent. (Art.
160.) True it is that the law prevented the alienation or incumbrance of real property of the child
without permission of the court (Civil Code, art. 164; Mortgage Law, art. 205) and required the parent to
give security, binding himself or herself to comply with the obligations imposed upon usufructuaries in
case the parent contracted a second marriage. (Civil Code, art. 492; Mort. Law, art. 200.) But restrictions
such as these did not make a parent a guardian. The Civil Code drew a sharp and clearly distinguishable
line between guardianship, properly so called, and the patria potestad, or parental authority. They were
provided for in separate titles, and the definition of guardianship contained in article 199 of that code
provided that it "is the custody of the person and property, or of the property only, of those who, not
being under parental authority, are incapable of taking care of themselves."

The contrast between the patria potestad of the Civil Code and guardianship under our present code of
procedure is none the less marked. The latter requires a guardian to obtain his appointment from the
court; to execute a bond for the faithful performance of his duties; to make an inventory of the
property, the management of which he undertakes, and to render accounts at specified intervals; to
manage the estate of his ward frugally and without waste and apply the income and profits thereof to
the support of the ward so far as may be necessary. A guardian is a court officer responsible to the
court, and dischargeable by the court alone.

There was, however, no conflict between the patria potestad and guardianship under the Civil Code.
This was for the reason, as stated above, that the law of guardianship expressly excluded the patria
potestad from its operation. But in the enactment of the present code of procedure, no attempt was
made, in dealing with the subject of guardianship, to exclude the patria potestad from the operation of
the law of guardianship. For the purpose of inaugurating a procedure on the subject of guardianship
more in consonance with the remainder of the new procedure, whole sections of the California probate
procedure were incorporated almost verbatim in the new code. These borrowed sections comprise
practically all of our present law of guardianship. As there is no such institution in the State of California

85
as the patria potestad, it is manifest that no provision saving it from the operation of the law of
guardianship would be found in the laws of that State. In other words, the law of guardianship in
California extended to and included minor children whose parents were still living. It was this law which
was incorporated into the new code of procedure, and the Philippine Commission inserted no exception
saving the institution of patria potestad from its operation. The language of the new law is too plain to
permit of the courts giving it an interpretation which would permit of the continued existence of the
patria potestad with regard to the child's estate, unless language be wholly disregarded; Section 551
provides that the court may appoint a guardian of the person or estate of a minor. Certainly, this
language is comprehensive enough to include all minors, whether their parents are living or not. If the
law does not command or prohibit, it permits; and where the grant is unrestricted, it reaches all subjects
within the grant. Section 553 expressly abolishes the prerogative of the father and the mother, in the
order named, of administering the property of their minor children, and gives the court power to
appoint another person. Here, the specific language of the law shows that guardianship is meant to
include minor children whose parents or one of them are living.

Under section 553, the person appointed guardian of the child's estate is entitled to possession. This is
clearly inconsistent with the parent's right of usufruct, for the usufructuary is entitled to possession.
Section 569 provides for the sale of real estate and the reinvestment of the proceeds. It is apparent that
this section contemplates an absolute sale, and that such a sale is not consistent with a usufructuary
interest vested in the parent. These, as well as other specific provisions of the new code, make it clear
that the repugnance between the patria potestad and the new law of guardianship is such that the
parent, as such, no longer has the power to enjoy the administration and usufruct of the property of his
minor children.

Keeping this resume of the repugnance between the patria potestad and the new law of guardianship in
mind, let us now notice the argument that the appointment of a guardian under the new law for a minor
child whose parents, or one of them, is living is a discretionary duty of the court; and that the patria
potestad may still exist, subject only to the power of the court to bring the child and his property under
the operation of the new law of guardianship.

It is true that section 551 confers the power of appointment upon the court as a matter of discretion —
"when it appears necessary or convenient." But the scope of this discretion is restricted to the question
of whether there shall or shall not be appointed a statutory guardian. It does not delegate to the court
the power of deciding whether the child and his property shall be governed by the Spanish patria
potestad or by the provisions of the present Code of Civil Procedure. It does not leave to the court the
power to bestow the usufruct of the child's property upon the parent as a matter of grace. As we have
stated above, the new law of guardianship was enacted without the slightest attempt being made to
preserve the institution of patria potestad. As we have also seen, the Civil Code selected minor children
whose parents or one of them was living as a special class of incompetents for whom a special form of
guardianship was provided, and this was recognized as an exception from the operation of the law of
guardianship (art. 199). The new law of guardianship, as contained in the Code of Civil Procedure, was
enacted without reference to the preexisting law relating to incapacitated persons. It was borrowed
almost verbatim, and certainly in all substantial particulars, from the statute of California, where the

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Spanish patria potestad was unknown. We must interpret and apply that law as it comes to us and allow
to it the full vigor of its language. Its application here, in accordance with well known rules of statutory
construction and interpretation, should correspond in fundamental points, at least, with its application
in the jurisdiction from whence it was taken. It must be taken as the intent of the legislature that the
practical application of those provisions of the Code of Civil Procedure relating to guardianship should
conform in the main with the practice under the same statute in California. It is obligatory upon the
judicial department to follow the intent of the legislative branch of the Government in the application of
laws. It is but stating the proposition in different terms to say that our present law of guardianship does
not contemplate a reference by the court to the provisions of the Civil Code relating to the patria
potestad in resolving the question of whether a guardian ought to be appointed for a minor child whose
parents or one of them is living. That the fact of the child's having a parent or parents may be taken into
consideration by the court in determining the question may not be disputed. Section 553, as we have
seen, recognizes the closest bond of kinship known to nature as a sufficient guaranty for the faithful care
of the child's person. But such is not the case with the child's property. The law says that as to the
administration of the estate of a minor child a parent shall only have a preferential right; and, when the
parent does secure an appointment as guardian of a child's estate, he must qualify as any stranger
would, and perform the same duties and accept the same compensation as a stranger. Can anything be
more inconsistent with the right which the patria potestad grants the parent of administration and
usufruct in the child's property by mere operation of law, and requiring neither appointment nor
supervision by the court (except in a very limited sense, Civil Code, art. 160; Mortgage Law, arts. 200 and
205)? The truth is that the patria potestad and the present law of guardianship cover the same subject;
i. e., the custody and care of the person and property of minor children whose parents or one of them is
living. By this, of course, we do not mean to restrict the new law to this class of incompetents alone. The
provisions of the two laws are entirely repugnant to each other; they are totally irreconcilable if any
proper respect be had for the language used in the latest law, and the evident intent of the legislative
department in enacting it. The former must, therefore, yield to the latter.

The provisions of the new code of procedure on guardianship being applicable to minor children whose
parents or one of them are still living, it is clear that those articles of the Civil Code relating to
emancipation of minors by their parents are also, partially at least, repealed. By reference to these
articles (314-319), it will be noted that by emancipating his child the parent surrenders to it the right to
the usufruct and administration of his property. This, of course, is based upon the a priori condition of
the law of patria potestad that the parent has the usufruct and administration of the child's property to
give, which, as we have seen, he no longer has. Not having the right in the first place, and, hence, no
authority to concede it to his child, the formal emancipation of a minor child by the parent cannot now
have the effect prescribed in articles 314-319 of the Civil Code. For, were this power of emancipating his
minor child still retained by the parent, the latter could, by the exercise of it, deprive the court guardian
of the administration and control of the estate, or, in other words, the court proceedings with reference
to the person and property of the minor child would, by the parent's act, be annulled.

We have now determined that the right of administration and usufruct of the child's property, granted
by the former law to the parent, and the right of the latter to emancipate his child in accordance with

87
the provisions of article 314 et seq., of the Civil Code, whereby the child takes over the administration
and usufruct of his own property, have been repealed by the chapter of the new code of procedure
relating to guardianship. But we deem it necessary, before proceeding further, to say that there are
some provisions of the patria potestad which are not necessarily in conflict with the new code of
procedure. Parents are never deprived of the custody and care of their children except for cause. This is
a universal rule of all systems of law, as beneficient to the child as it is just to the parent. Indeed, it
might well be said to belong to the realm of natural justice. Happily, however, it is unnecessary to resort
to generalities to show that the patria potestad of the Civil Code with respect to the persons of minor
children is not inconsistent with the new law of guardianship. Section 553 of the new code provides that
the father and the mother, in the order named, are considered the natural guardians of the child and as
such entitled to the custody and care for the education of the minor. Chapter 41 is devoted to "adoption
and custody of minors." Section 768 provides that the effect of adoption shall be to free the child from
all legal obligation of obedience" to his parents. From section 770, it seems clear that parents may not
be deprived of the custody of their children because of unworthiness except after hearing. Section 771
provides that in the case of spouses living separate or divorced the court shall determine which of them
shall have "the care; custody and control of the offspring." The italicized words clearly acknowledge a
right in the parents, under normal conditions, to exercise parental authority over the persons of their
minor children.

But so far as the property of such children is concerned, the rights of the parent must be subordinated
to the efficient working of the new law of guardianship. It is not, of course, true that a guardian for the
property of the minor child will be appointed in all cases. It is always within the discretion of the court to
do so. We apprehend that no proper case for such an appointment would be presented to the court
where a child's work or industry were productive of small earnings which would necessarily be
consumed in its own support, and which the parent is required to give. The same might possibly be said
with reference to property acquired by the child for a good consideration. The purpose of the law is to
protect the estate of the child from the avarice of designing persons be they whom they may. It would
hardly seem necessary to carry this doctrine to the point where the parent having the custody of the
person of the minor child should not be entitled to its earnings or that portion thereof necessary for its
support as compensation for the care and support which such parent is called upon to give. We do not
think the repeal of that branch of the patria potestad relating to the child's property carries with it any
such a consequence.

But there are other questions the solution of which may be difficult if they are presented to the courts in
the present state of the law. Under the Civil Code, a child might be emancipated formally (art. 315) or
impliedly (art. 160) by the parent. In either case his contracts with third persons were binding upon him,
except when they tended to divest him of his real property. Formal emancipation, as we have stated
above, is no longer possible. Is implied emancipation still permissible? If so, to what extent may such a
child validly bind himself by contract ? May children living apart from their parents and supporting
themselves recover money paid for necessaries? What control have such children over their own
property acquired by their own work or industry or for a good consideration? These are questions which
we do not find it now necessary to consider.

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Before proceeding to determine what effect the new law of guardianship had upon pending cases of
patria potestad, it seems well to note the effect upon the status of a child emancipated by the
concession of the parent exercising the patria potestad. Article 167 provides that the patria potestad
terminates by the emancipation of the child. Article 314 provides that emancipation takes place (1) by
marriage; (2) by majority; and (3) by the concession of the father or mother exercising the patria
potestad. It was by this latter method that Isabel Palet terminated her patria potestad over the
appellant children. Article 317 provides that upon emancipation by concession of the parent the child is
qualified to control his person and property as if of age, with the exception that until he attains his
majority, he cannot borrow money nor encumber or sell his real property without the consent of the
parent, or, in the absence thereof, of a guardian. As we have said, that code imposed upon children
whose parents or one of them was living the patria potestad in lieu of guardianship imposed upon all
other incompetents. By mutual consent of the parent exercising the patria potestad and the child
subject to it, it could be terminated after the child reached the age of eighteen, in which case there was
substituted therefor a veto power, exercised by the parent, upon the child's capacity to borrow money
and to sell or encumber his real property. Under this arrangement, whether the parent emancipated his
child or continued exercising the patria potestad over it until it reached the age of majority, the child
was subject to a continuing status of dependency upon the parent until it became of age. The parent
was permitted to exercise a limited control over the property of his minor child after having
emancipated it, for the same reason that he was permitted to exercise the patria potestad before its
emancipation. That is to say, the parental love and affection was deemed a safeguard against
covetousness, and an incentive to watchfulness over the child's property equivalent to those legal
safeguards exacted of an ordinary guardian. In other words, the relationship between the parent and
the child was deemed a sufficient reason, for intrusting to the former those duties which would have
devolved otherwise upon a guardian. In point of strict fact, it would seem that, instead of the patria
potestad being terminated by the parent's emancipating his child, there was still a remnant of it left in
the parent's absolute veto of the child's right to borrow money or dispose of or encumber his real
property. The law gave no sanction to such contracts when entered into without the parent's consent.
The parent's control over the estate of his minor child before as well as after emancipation was deemed
a sufficient substitute for guardianship, properly so called. This control or supervision of the parent over
his minor child's estate began with the occurrence of a mere fact — the acquirement of property by the
child, and it terminated with a fact — the complete emancipation (by majority) of the child. It required
no judicial sanction for its beginning or ending. While it might be modified by the child's emancipation at
the age of eighteen, it was not extinguished. It was a legal status created between the parent and the
child continued throughout the infancy of the latter. We conclude, therefore, that the emancipation of
the appellant children in 1903 is no sufficient reason, in and of itself, for holding that a statutory
guardian ought to have been forthwith appointed under the provisions of the new Code of Civil
Procedure. There was no such break in the duties of the parent, the inexperienced child was not so
utterly thrown upon the tender mercies of a selfish world as to require the intervention of a guardian
appointed under the new law. Unless the new law of guardianship abrogated the rights of those parents
administering the estates of their minor children under the patria potestad at the time it went into
effect, it did not abrogate the rights of those same parents to subsequently emancipate such children
under the provisions of articles 314-317 of the Civil Code. The parent's right of emancipating his child

89
depended upon the antecedent right to exercise the patria potestad. The former was necessarily a
consequence of the latter, and it the parent exercising the patria potestad at the time the new law took
effect was not molested, neither was he deprived of the right to subsequently emancipate his child and
thereby confer upon the latter capacity to contract with third persons.

Having determined that the present Code of Civil Procedure has repealed the patria potestad with
reference to the child's estate and the power of emancipation by concession of the parent, the question
remains, Does the new order of things apply to a parent who assumed charge of the property of her
minor children in 1895? If it does, then the execution of the mortgage which the appellant children now
seek to have annulled was an act properly devolving upon a guardian appointed by the court, who must
have asked for and received the court's approval to enter into the said contract before it could bind the
property of the children. On the other hand, if the new law does not affect estates of minor children
whose parents assumed charge thereof prior to the enactment of the new code, the validity of the
mortgage must be determined by the provisions of the Civil Code. To state the proposition in another
form, Were all parents administering the property of their minor children by virtue of the provisions of
the Civil Code on October 1, 1901 (the date the new law of guardianship became operative), ipso facto
deprived of their control over the estates of their minor children? Did it immediately become necessary
to bring these estates under the operation of the new law?

Under cover of procedure a radical departure from the substantive law had been made. The Civil Code
provided a method of conserving the estates of minor children through the agency of their parents,
without the necessity of judicial intervention (except in a very limited sense). It had, furthermore,
endowed the minor child after emancipation by concession of the parent with the capacity to freely
contract with third persons, requiring only the parent's approval of contracts in alienation of or
encumbering the child's real property and for the borrowing of money. And lastly, it gave to third
persons entering into contracts with emancipated children assurance that such contracts were binding
and valid upon the children. The new law of guardianship practically placed the parent in the position of
a stranger to the child's estate, giving him only a preferential right, other things being equal, to an
appointment as guardian of the estate. It brought the child's estate under the control of the court. And
finally the incapacity of the children between the age of 18 and the age of majority to contract with third
persons could not be modified in the least by mutual consent of the parent and child, and, hence,
contracts made in that manner were no longer binding upon the child. The change was abrupt, it was
entire, and, unfortunately, it was not specified but implied. Whether the change was casual or intended,
it is unnecessary to determine. That it occurred is the unavoidable conclusion. Under these
circumstances the inquiry naturally arises, Does the new law contain any saving provision excepting
from its operation those estates of minor children which were being administered either by the parents
under the patria potestad or by the children themselves under the provisions of the Civil Code relating
to emancipation by concession of the parent? That the authors of the new code recognized a conflict
between the new law of guardianship and the existing system of caring for the estates of incompetents
is evident from an examination of section 581 thereof. That section reads:

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"Pending guardianship to proceed in accordance with Spanish law, with certain exceptions. — All
proceedings in cases of guardianship pending in the Philippine Islands at the time of the passage of this
Act, shall proceed in accordance with the existing Spanish procedure under which the guardians were
appointed: Provided, nevertheless, That any guardian appointed under existing Spanish law may be
removed in accordance with the provisions of section live hundred and seventy-four of this Act, and his
successor may be appointed as therein provided, and every successor to a guardian so removed shall, in
the administration of the person or estate, or either, as the case may be, of his ward, be governed by
the provisions of this Act."

This section saves from the operation of the new Act all proceedings in cases of guardianship pending in
the Philippine Islands at the time of its passage. Does this refer to and include the administration of the
property of minor children by their parents under the provisions of the Civil Code? If it does, then the
authority which Isabel Palet exercised over the Property of her minor children was not affected by the
enactment of the new code of procedure, and she was at liberty to proceed as she did, in accordance
with the provisions of the Civil Code, to emancipate her children by a formal declaration, and they
thereupon acquired the capacity extended to emancipated children by article 317 of that code.

Examining the section with a view to ascertain the mere literal meaning of the language used, we are at
once met with the argument that it refers only to cases of guardianship and that the parent
administering the estate of his minor child in accordance with the Civil Code is not a guardian, either
under the Civil Code or as that word is used in the Code of Civil Procedure. Hence, according to this
argument, the patria potestad and the ancillary right of emancipation pertaining to the parent are not
saved from the operation of the new law by section 581. But we are of the opinion that this argument
amounts to a play upon words rather than to a reasonable interpretation of the section. In the first
place, the question arises, In what sense were the words "guardian" and its derivative, "guardianship,"
used in section 581 ? Were they used in the same sense as in the preceding sections of Chapter 27 of the
new Act, the chapter prescribing the new law of guardianship? If so, they include the administration of
the estates of all incompetents, including infants whose parents are living, for that is the design of the
new law of guardianship. If the argument under examination is sound, it must be held that the authors
of the code descended from this all inclusive meaning of the word when they finally came to the
consideration of what ought to be saved, and attempted to deal only with guardianship as that term is
understood in the civil law. A careful examination of the entire Act, in the light of the conditions under
which it was passed. reveals convincing evidence that the authors of the code attempted no such nicety
of expression in section 581. With the advent of American sovereignty in 1898 there came an influx of
American ideas of administration of justice. A new code of criminal procedure was enacted under
authority of the military governor in 1900, and early in 1901 the first Philippine Commission undertook
as one of its first tasks the reorganization of the courts and the enactment of a new code of civil
procedure. The new legislation did not purport to be an amendment of the Spanish law on the subject.
On the contrary, it was a virtual substitution of the one for the other. The various sections of the Code of
Civil Procedure were, practically speaking, adopted without material alteration from one or another of
the States of the American Union. Both executive and legislative affairs were, at the time, being
discharged by a single body — the Philippine Commission — and the pressure of business afforded little

91
opportunity or time to carefully survey the field covered by the new legislation and discover how much
of the former law would be affected by the new Act. The only method that could be safely followed,
under the circumstances, was to ruthlessly brush aside the Spanish law and inaugurate the new in the
form which had withstood the test of time in the United States, and leave the extent of the change to be
ascertained by the courts in the actual administration of the new code by determining implied repeals.
Hence, the authors of the new code expressed themselves entirely in terms of American law. Instances
pointing to this fact are numerous. Thus, "embezzlement" in section 30; "adverse possession" in section
41; "battery" and "slander" in section 43; "corporation" in section 198 and various other sections; many
of the terms used in the chapter on evidence; "residuary legatee" in section 644; "heir" as it is used in
various sections of the probate procedure; all show quite clearly the extent to which the authors of the
new code held to the technical terms of American law in compiling the new code. Bearing in mind such
extreme instances of the terms in which the authors of the new code expressed themselves, is it
possible that they stopped to make a distinction in section 581 between the administration of a minor's
estate by his parent and the administration of the estates of all other incompetents? They knew that the
system they were introducing was applicable to the estates of all incompetents. The fact — that they
inaugurated this new system of caring for the estates of incompetents clearly shows that they
disapproved, without distinction, of all the existing law on that subject. The administration of the estate
of a minor by his parent was impliedly repealed by the new law. Is it not reasonable to suppose that the
saving clause, which it was deemed desirable to insert in the new law, was intended, by implication, to
include those pending cases of that nature? A saving clause is enacted to save something which would
otherwise be lost. When existing procedure is altered or substituted by another, it is usual to save those
proceedings pending under the old law at the time the new law takes effect. This was the purpose of
section 581. It was designed to save undisturbed all pending proceedings in guardianship cases; that is,
those proceedings already begun and still unfinished, which would otherwise have been affected by the
new law, were to be allowed to continue to determination in accordance with the old law. There was no
reason for allowing guardianships, so called under the Civil Code, pending at the time the new code
went into effect, to continue undisturbed by the new law, while parents who were administering the
property of their minor children under the same code must submit to the new regulations. Both were
equally favored institutions under the civil law, and both were equally disapproved by the authors of the
new code.

But it is said that those pending cases wherein the parents were administering the property of their
minor children do not come within the saving provisions of section 581. because that section refers only
to pending cases of guardianship wherein the guardians were appointed in accordance with the Spanish
procedure; that is, guardians who were subject to removal by the court in accordance with the
provisions of section 524 of the new code, and whose successors could be appointed as therein
provided.

Guardianship, so called under the Civil Code, was conferred (a) by will; (b) by law; and (c) by the family
council. Guardians thus designated were removable generally by the family council. The right to
administer the property of an infant child was conferred upon the parent by law. Under article 169 of
the Civil Code the parent lost the authority over his minor child (1) by a final judgment in a criminal case;

92
and (2) by a final judgment in a case for divorce. And under article 171 the courts had the power to
deprive parents of the parental authority or suspend the exercise thereof when they treated their
children with excessive cruelty, or if they gave them corrupting orders, advice, or examples. The courts
could also deprive the parents either totally or partially of the usufruct of the child's property.

All pending cases of testamentary guardianships, legitimate guardianships, and guardianships conferred
by family councils fall within the provisions of section 581. The guardians in these cases may be removed
by the court in accordance with the provisions of section 574, and their successors appointed as therein
provided. What sound reason can be advanced for excluding those pending cases wherein the person
and property of the minor child were being cared for by the parent under the patria potestad? The
patria potestad was conferred by law. In each instance the law specifically designated in their order the
persons who were entitled to the care and custody of the child and the administration of its property. In
those particulars both are the same. But how may a court, under the authority conferred upon it by
section 581, remove a parent who is exercising the patria potestad over the person and property of his
minor child and appoint a guardian in accordance with the provisions of section 574 of the person and
property of such child?

The question might be answered by pointing out that if the probate court was duly informed that a
parent had lost the authority over his minor child, or had lost the parental authority over both the child
and its property as provided in articles 169 and 171 of the Civil Code, it could proceed to appoint a
regular guardian for both the person and property of the child. It may be true that the probate court
would not have the power to deprive a parent who was exercising the patria potestad over the person
and property of his minor child of either the possession of the child or its property, and appoint a
guardian to take charge of either or both. This, if true, is not, in our opinion, a sufficient reason for
excluding from the operation of section 581 those pending cases wherein the affairs of minor children
were being administered by their parents in accordance with the former law.

In the final analysis, it seems that protection from the effects of the new law is claimed for the Civil Code
guardian because he was exercising his duties eo nomine, while the parent and parties dealing with that
parent are to be denied that protection because the parent acted under the patria potestad or under
those provisions of the code relating to emancipation of the child by concession of the parent.

The first premise of the plaintiffs' case rests upon the proposition that the parent's right to administer
the property of his child has been abolished by the new law of guardianship. This conclusion is reached
by determining that this right and the present law of guardianship cover the same subject, that they are
repugnant to each other, that they cannot stand together, and that, therefore, the latter law repeals the
former. The second premise of the plaintiffs' case is that pending cases of patria potestad are not within
the saving clause of section 581. This conclusion is reached by disregarding the substance of the two
methods of caring for the minor children and their property, and clinging to the word forms " patria
potestad" and "guardianship." In the first premise the intent of the law is the determining factor. In the
second premise, the intent is disregarded.

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But it is asked why the plaintiffs were not given the same status when they were emancipated in 1903 as
any other incompetents whose Civil Code guardians had died, resigned, or been removed, inasmuch as
the plaintiffs and their mother occupied the same position for the purpose of bringing them within the
saving provision of section 581 as a Civil Code guardian and his wards. We have attempted to show that
the emancipation of the plaintiffs was not an interruption of the dependency of the child upon the
parent; that the parent did not thereby divest herself of control over the child's property. Hence, there
could not follow any such hiatus in the protection afforded the child as occurs by resignation or removal
of a guardian so called under the Civil Code. The difference between the status of the two groups of
children is clear and fundamental.

We therefore conclude that it was intended by the saving provision of section 581 to withhold the
application of the new law from all those cases which were already being taken care of under the
provisions of the Civil Code, and that the plaintiffs had full power to charge their estates with the
mortgage which they now seek to disaffirm.

It is urged finally that admitting all else, emancipation of the plaintiffs could not be valid because the
admitted emancipation was not contained in a public instrument, as required by article 316 of the Civil
Code. This article provides that the emancipation by the concession of the father or mother exercising
the patria potestad, shall be granted by a public instrument or by an appearance before a municipal
judge. In the case at bar the emancipation documents were acknowledged or duly executed before a
notary public in 1903. The notary public exercised his authority not by virtue of the Spanish law, but
under authority of Act No. 136.

A document acknowledged before a notary public, in accordance with the provisions of an Act of the
Philippine Commission, is a public instrument within the meaning of article 1924 of the Civil Code.
(Gochuico vs. Ocampo, 7 Phil. Rep., 15; Soler vs. Alzoua, 8 Phil. Rep., 539; De la Rama vs. Robles, 8 Phil.
Rep., 712; McMicking vs. Kimura, 12 Phil. Rep., 98.) The phrase referred to in article 1924 of the Civil
Code and which was brought in question in these cases reads: "In a public instrument" — "escritura
publica." Exactly the same words, "escritura publica," are used in article 316. If a document which was
acknowledged before a notary public appointed under an Act of the Commission, was a public
document within the meaning of that phrase in article 1924, it certainly must be held to be a public
document within the meaning of that phrase in article 316, as both are exactly the same.

The conclusions we have arrived at make it unnecessary to consider the ratification of the mortgage
contract by the plaintiff, Joaquin Ibañez de Aldecoa, after having arrived at the age of majority.
Nevertheless, we might say that we fully agree with the holding of the trial court upon this point.
Whether the plaintiffs were creditors or partners of Aldecoa & Co. is likewise unimportant. Neither
relation would prevent them in any way from guaranteeing the payment of the debt owed by the firm.

The judgment of the court below, in so far as it sustains the validity of the mortgage contract as to
Joaquin Ibañez de Aldecoa, is affirmed. In so far as that judgment declares the nullity of the mortgage as
to Zoilo Ibañez de Aldecoa, it is reversed, and the mortgage is hereby declared binding upon the latter.

No costs will be allowed in this instance

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Arellano, C.J., and Araullo, J., concur.

Johnson, J., dissents.

Separate Opinions

TORRES, J., concurring:

I concur in the admirable opinion of the majority of this court, and as it is a matter that concerns the
personal rights and obligations of a family of Spanish nationality, some of the former having been
exercised and the latter having been enforced in this country, wherein they are aliens, I think it
necessary to set down as one more ground for the decision in the present suit that the widow of the
deceased Aldecoa, Doña Isabel Palet, and her children, Zoilo and Joaquin Ibañez de Aldecoa, being
Spaniards born in what was then Spanish territory and the children of Spanish parents, brought along
with them upon coming to these Islands the laws of their personal status with all the effects thereof, for
by general agreement of civilized nations, wherein a compact of reciprocity has been established for the
greater welfare of society and the benefit of their respective citizens, the law of persons accompanies
the individual who moves to a foreign country.

Man's activity is not limited and circumscribed within his native country. His manifold dealings with
others sometimes impel him to leave it and settle in a foreign land, and as the laws of the other
countries to which a person may move in search of work, of improvement, or for other reasons, are
varied and diverse, it has been determined by general assent and common agreement among civilized
nations that the laws relating to family rights and obligations, and the status, condition, and legal
capacity of the persons, accompany a person even when he moves to a foreign country; that he is
wholly bound to observe the laws of his native land, although he may reside in another and different
country. It has been thus prescribed in article 9 of the Civil Code, under the provisions whereof the
citizen of one nation, as for example the Spanish, does not cease to be such by moving his residence to
these Islands, and to that end the laws governing his personal rights accompany him in his emigration
because they are more suited to his personal affairs.

Although under article 10 of the same Code personal property is subject to the laws of the nation of the
owner thereof and real property to the laws of the country in which it is situated, still the legal and the
testamentary successions, both with respect to the orders of succession as to the extent of the rights
thereof and the intrinsic validity of their provisions, are regulated by the laws of the nation of the person
whose succession is in question, whatever may be the nature of the property and the country where it
may be situate.

The positive right in connection with the principle of nationality and the law of persons has been upheld
by the Spanish supreme court even before the enforcement of the Civil Code, in its decision of
November 6, 1867, wherein the doctrine is laid down that in the absence of a special treaty the law of
persons must govern the acts that concern the alien's person in civil matters, being subordinated to the
laws in the country of which he is a subject and decisive for him of all the questions of fitness, capacity,
and personal rights.

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In another decision, January 29, 1875, it is stated that the personal law for the individual is the law of
the country to which he belongs, that it accompanies him wherever he may move and regulates his
personal rights, his capacity to transmit by testate or intestate succession and the governance of his
marriage and family. And in the decision of January 13, 1885, the following was established: It is a
principle of private international law that status and capacity accompany a person abroad and the
personal laws of his own country must be applied to him.

The exercise of the right of parental authority, based on the provisions of article 154 of the Civil Code, is
one of the rights governed by the laws included in the law of persons, to the effect that the father, or in
his absence the mother, even though he resides abroad with his children, does not lose such right but
carries it along with him to the country where he resides.

The right of granting emancipation on the part of the father or mother who exercises parental authority
is another of the rights that he carries along with him to the foreign country wherein he resides, because
it is likewise included in the law of persons, and accompanies him even to the country in which he
intends to reside. (Arts. 314-319, Civil Code.)

On these grounds there can be no question that the widow of the deceased Aldecoa, Isabel Palet,
exercised parental authority over her children had by her deceased husband Aldecoa and availed herself
of a perfectly legal right, supported by the regulations of their law of persons, as Spaniards, in granting
emancipation to her sons Zoilo and Joaquin, over 18 years old, and in giving them her consent so that
they might encumber their respective shares in realty or property which they had inherited from their
deceased father, for the purpose of maintaining the credit enjoyed by the commercial firm entitled
"Aldecoa & Co.," and to avoid a premature and unnecessary liquidation at the instance of the Hongkong
Bank.

MORELAND, J., concurring:

I agree with the judgment in this decision, but reserve my opinion as to the grounds on which it is based
and the reasoning adduced in support thereof.

DECISION ON MOTION FOR REHEARING.

AUGUST 26, 1915.

TRENT, J.:

A motion for rehearing has been made in this case. It is urged that our decision overlooks the fact that
the plaintiff children are citizens of this country, and, hence, governed by the laws thereof. Without
determining the political status of the plaintiffs, we have at some length endeavored to show that,
clothing them with Philippine citizenship, the present law of guardianship, as contained in our Code of
Civil Procedure, does not apply to them by reason of the saving provisions of section 581. The
concurring opinion assumes their Spanish citizenship, and, hence, their amenability to the laws of Spain.
We might add that the admirable briefs of counsel for the defendant bank contain lengthy and strong
arguments to the effect that these children are not citizens of the Philippine Islands, but citizens of

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Spain. If this be true, then it may be that this case ought to be decided in accordance with the provisions
of the Spanish Civil Code, as stated in the concurring opinion. We purposely avoided a discussion of the
political status of the plaintiffs, basing our decision entirely upon the existing laws of these Islands, as we
understand them.

It is urged that the emancipation of the plaintiffs could not have been validly made for the reason that it
was not recorded in a public document. This point was raised in the briefs and has been already
answered in our decision.

It is next urged that the mortgage is invalid as to the plaintiffs because the mother's interests as a
partner of the firm were directly opposed to the children's interests. Article 165 of the Civil Code is
quoted in support of this contention. This article is clearly limited by its own words to children "not
emancipated." Article 317 confers full capacity upon an emancipated child to control his person and
property with the limitations stated. One of these is the encumbrance of his real property, which may
not be done without the consent of the parent or, in his or her absence, of the tutor. The resolutions of
the Direccion General de los Registros (Nov. 4, 1896; Jan. 7, 1907; and Jan. 30, 1911) distinctly hold that
a formally emancipated child may participate in the division of an inheritance with the parent's consent,
even when the latter is also interested. Certainly, the division of an undivided inheritance between the
parent and the emancipated child is as strong a case of conflicting interests as is the case at bar.
Manresa endeavors to apply article 165 to article 317 by analogy, and cites the resolution of November
19, 1898, in support of this contention. That case, however, was not one of formal emancipation, but of
emancipation by marriage, and the land court expressly held that it was governed by articles 315 and 59
of the Civil Code and not by article 317. The case of November 14, 1896, one of formal emancipation
and cited above, was expressly distinguished in the resolution of November 19, 1898, upon which
Manresa relies. For that matter, article 165 is nowhere cited or discussed in the last mentioned
resolution. We do not feel authorized to add to those limitations upon the capacity of a formally
emancipated child in view of the decisions of the highest authorities on the point to which we have
referred above.

It is urged, lastly, that the mortgage contract is void as to the plaintiffs by reason of a lack of
consideration. It is asserted that they executed the mortgage under the impression that they were
partners in the firm of Aldecoa & Co., when, as decided by a final judgment of the Court of First
Instance, they were not such partners. Article 1276 of the Civil Code provides:

"A statement of a false consideration in contracts shall render them void, unless it be proven that they
were based on another real and licit one."

By the same judgment which released the plaintiffs from their obligations as partners of the firm, they
were declared creditors of that firm. Here was a valid and subsisting consideration for the mortgage; the
creditors' desire to preserve the firm intact in the hope of recovering from it in due course their total
credits. It seems clear that it was the object of the mother and the plaintiff children to thus save the
business, and it matters little that the plaintiffs were creditors and not partners.

We see no reason for disturbing the decision heretofore rendered. Motion denied.

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Arellano, C.J., Torres and Araullo, JJ., concur.

Carson, J., reserves his vote.

[G.R. No. 2935. March 23, 1909.]

THE GOVERNMENT OF THE PHILIPPINE ISLANDS, plaintiff-appellee, vs. GEORGE I. FRANK, defendant-
appellant.

Bishop & O'Brien, for appellant.

Attorney-General Wilfley, for appellee.

SYLLABUS

1. CONTRACTS; GOVERNMENT CONTRACT NOT PREJUDICED BY SUBSEQUENT AMENDMENT OF

THE LAW. — A contract made between the Government of the Philippine Islands and an employee,
under the provisions of Acts Nos. 80 and 224, is not affected by any subsequent amendment of said
Acts. The legislative department of the Government is expressly prohibited by section 5 of the Act of
Congress of July 1, 1902, from altering or changing the terms of a contract.

2. ID.; EXECUTION; INTERPRETATION AND VALIDITY; REMEDIES. — No rule is better settled in law
than that matters bearing upon the execution, interpretation, and validity of a contract are determined
by the law of the place where the contract is made. (Scudder vs. Union National Bank, 91 U. S., 406.)
Matters connected with performance are regulated by the law prevailing at the place of performance.
Remedies, such as the bringing of suit, admissibility of evidence, and the statute of limitations, depend
upon the law of the place where the action is brought.

DECISION

JOHNSON, J p:

Judgment was rendered in the lower court on the 5th day of September, 1905. the defendant appealed.
On the 12th day of October, 1905, the appellant filed his printed bill of exceptions with the clerk of the
Supreme Court. On the 5th day of December, 1905, the appellant filed his brief with the clerk of the
Supreme Court. On the 19th day of January, 1906, the Attorney-General filed his brief in said cause.
Nothing further was done in said cause until on about the 30th day of January, 1909, when the
respective parties were requested by this court to prosecute the appeal under penalty of having the
same dismissed for failure so to do; whereupon the appellant, by petition, had the cause placed upon
the calendar and the same was heard on the 2d day of February, 1909.

The facts from the record appear to be as follows:

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First. That on or about the 17th day of April, 1903, in the city of Chicago, in the State of Illinois, in the
United States, the defendant, through a representative of the Insular Government of the Philippine
Islands, entered into a contract for a period of two years with the plaintiff, by which the defendant was
to receive a salary of 1,200 dollars per year as a stenographer in the service of the said plaintiff, and in
addition thereto was to be paid in advance the expenses incurred in traveling from the said city of
Chicago to Manila, and one-half salary during said period of travel.

Second. Said contract contained a provision that in case of a violation of its terms on the part of the
defendant, he should become liable to the plaintiff for the amount expended by the Government by way
of expenses incurred in traveling from Chicago to Manila and the one-half salary paid during such
period.

Third. The defendant entered upon the performance of his contract upon the 30th day of April, 1903,
and was paid half-salary from the date until June 4, 1903, the date of his arrival in the Philippine Islands.

Fourth. That on the 11th day of February, 1904, the defendant left the service of the plaintiff and
refused to make a further compliance with the terms of the contract.

Fifth. On the 3d day of December, 1904, the plaintiff commenced an action in the Court of First Instance
of the city of Manila to recover from the defendant the sum of 269.23 dollars, which amount the
plaintiff claimed had been paid to the defendant as expenses incurred in traveling from Chicago to
Manila, and as half-salary for the period consumed in travel.

Sixth. It was expressly agreed between the parties to said contract that Laws No. 80 and No. 224 should
constitute a part of said contract.

To the complaint of the plaintiff the defendant filed a general denial and a special defense, alleging in his
special defense that the Government of the Philippine Islands had amended Laws No. 80 and No. 224
and had thereby materially altered the said contract, and also that he was a minor at the time the
contract was entered into and was therefore not responsible under the law.

To the special defense of the defendant the plaintiff filed a demurrer, which demurrer the court
sustained.

Upon the issue thus presented, and after hearing the evidence adduced during the trial of the cause, the
lower court rendered a judgment against the defendant and in favor of the plaintiff for the sum of
265.90 dollars. The lower court found that at the time the defendant quit the service of the plaintiff
there was due him from the said plaintiff the sum of 3.33 dollars, leaving a balance due the plaintiff in
the sum of 265.90 dollars. From this judgment the defendant appealed and made the following
assignments of error:

1. The court erred in sustaining plaintiff's demurrer to defendant's special defenses.

2. The court erred in rendering judgment against the defendant on the facts.

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With reference to the above assignments of error, it may be said that the mere fact that the legislative
department of the Government of the Philippine Islands had amended said Acts No. 80 and No. 224 by
Acts No. 643 and No. 1040 did not have the effect of changing the terms of the contract made between
the plaintiff and the defendant. The legislative department of the Government is expressly prohibited by
section 5 of the Act of Congress of 1902 from altering or changing the terms of a contract. The right
which the defendant had acquired by virtue of Acts No. 80 and No. 224 had not been changed in any
respect by the fact that said laws had been amended. These acts, constituting the terms of the contract,
still constituted a part of said contract and were enforceable in favor of the defendant.

The defendant alleged in his special defense that he was a minor and therefore the contract could not
be enforced against him. The record discloses that, at the time the contract was entered into in the
State of Illinois, he was an adult under the laws of that State and had full authority to contract. The
plaintiff [the defendant] claims that, by reason of the fact that, under that laws of the Philippine Islands
at the time the contract was made, made persons in said Islands did not reach their majority until they
had attained the age of 23 years, he was not liable under said contract, contending that the laws of the
Philippine Islands governed. It is not disputed — upon the contrary the fact is admitted — that at the
time and place of the making of the contract in question the defendant had full capacity to make the
same. No rule is better settled in law than that matters bearing upon the execution, interpretation and
validity of a contract are determined b the law of the place where the contract is made. (Scudder vs.
Union National Bank, 91 U. S., 406.) Matters connected with its performance are regulated by the law
prevailing at the place of performance. Matters respecting a remedy, such as the bringing of suit,
admissibility of evidence, and statutes of limitations, depend upon the law of the place where the suit is
brought. (Idem.)

The defendant's claim that he was an adult when he left Chicago but was a minor when he arrived at
Manila; that he was an adult a the time he made the contract but was a minor at the time the plaintiff
attempted to enforce the contract, more than a year later, is not tenable.

Our conclusions with reference to the first above assignment of error are, therefore.

First. That the amendments to Acts No. 80 and No. 224 in no way affected the terms of the contract in
question; and

Second. The plaintiff [defendant] being fully qualified to enter into the contract at the place and time
the contract was made, he can not plead infancy as a defense at the place where the contract is being
enforced.

We believe that the above conclusions also dispose of the second assignment of error.

For the reasons above stated, the judgment of the lower court is affirmed, with costs.

Arellano, C.J., Torres, Mapa, Carson and Willard, JJ., concur.

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