Case Digests for Statutory Construction

Caltex v. Palomar G.R. No. L-19650 (1966)

Topic. Definition of Statutory Construction

Case. Petition for declaratory relief against Postmaster Palomar

Facts. Caltex initiated a promotional scheme entitled “Caltex Hooded Pump Contest” where
contenders would guess the amount of liters contained in a covered pump. To join, participants
need not purchase any Caltex products but only to request entry forms from their local Caltex
stations. Choosing winners would be of three-levels: Dealer, Regional, and National Contest. At
the first level, whoever has the closest determinations of the hooded pump contents wins along
with other two runner-ups with corresponding prizes. First prize for Dealer Contest elevates to
Regional and the same mechanics of first, second, third prizes come into play. First prize from
the Regional goes to National Contest.

Foreseeing the imminent bulk use of mail for the scheme, Caltex asked postal authorities to be
cleared of some pertinent provisions in the Postal Law. The Postal Law enumerates non-
mailable matters, authorizes issuance of fraud order, and identifies effect of violating said law.
Some items under non-mailable matters are advertising on lottery, gift enterprise, or other
similar schemes. In response to Caltex’s request, Postmaster Palomar denied Caltex’s plea
saying that its scheme falls under advertising for lottery, which constitute non-mailable matter.
Caltex asked for reconsideration; Postmaster reiterated his stance and added that if scheme
pushes through, fraud order would be served. Caltex sought judicial intervention. And trial
court ruled in their favor. Postmaster now appealed.

Issue. Does “Caltex Hooded Pump Contest” violate Postal Law? -No

Ratio. What is prohibited by the Postal Law is lottery, inter alia. Lottery necessarily includes
consideration, prize, and chance. Caltex’s contest does include the elements of prize and
chance but not consideration as no purchase is required of participants. Is it a gift enterprise?
Still no because no purchase. Lottery is prohibited if there is consideration; thereby gift
enterprise is also
prohibited if there is consideration, following noscitur a sociis. But as demonstrated, neither is
Caltex’s game a lottery nor a gift enterprise. Hence it should be allowed to proceed.

Doctrine: Construction is defined as the “art or process of discovering and expounding the
meaning and intention of the authors of the law with respect to its application to a given case,
where that intention is rendered doubtful, among others, by reason of the fact that the given
case is not explicitly provided for in the law”. It applies in this case in how the ponencia
examined the meaning of “lottery” to come to a conclusion. Specifically, it applied when the
court looked into what lottery meant: consideration, prize, and chance. This allowed for a
decisive interpretation of the word in question.
FACTS:
Caltex conceived a promotional scheme which will increase its patronage for oil products called
“Caltex Hooded Pump Contest.” The contest calls for participants to estimate the number of
liters a hooded gas pump at each Caltex station will dispense during a specified period. To
participate, entry forms are only needed which can be made available upon request at each
Caltex station. No fee is required to be paid nor purchase has to be made prior to participating.
Foreseeing the extensive use of mails to publicize the promotional scheme, Caltex made
representations with the postal authorities to secure advanced clearance for mailing. Caltex,
through its counsel, posited that the contest does not violate anti-lottery provisions of the
Postal Law. The Postmaster General Palomar declined the grant of the requested clearance.
Caltex sought a reconsideration. Palomar maintained that if the contest was pursued, a fraud
order will be issued against Caltex. Thus, this case at bar.

ISSUES:
1. Whether or not the petition states a sufficient cause of action for declaratory relief
2. Whether or not the proposed contest violates the Postal Law

RULINGS:
The Court held that the petition states a sufficient cause of action for declaratory relief since it
qualifies for the 4 requisites on invoking declaratory relief available to any person whose rights
are affected by a statute to determine any question of construction or validity. To the
petitioner, the construction hampers or disturbs its freedom to enhance its business while to
the respondent, suppression of the petitioner’s proposed contest believed to transgress the law
he has sworn to uphold and enforce is an unavoidable duty.
Likewise, using the rules of Statutory Construction in discovering the meaning and intention of
the authors in a case clouded with doubt as to its application, it was held that the promotional
scheme does not violate the Postal Law in that it does not entail lottery or gift enterprise. Using
the principle “noscitur a sociis’, the term under construction shall be understood by the words
preceding and following it. Thus, using the definitions of lottery and gift enterprise which both
has the requisites of prize, chance and consideration, the promo contest does not clearly
violate the Postal Law because of lack of consideration.
People v. Mapa G. R. No. L-22301 (1967)
Topic. When construction is necessary

Case. Appeal lower court decision finding Mapa guilty of illegal possession of firearms

Facts. Accused Mapa had in his possession a 22-cal homemade revolver without serial number,
with ammunition. Mapa does not have license from Philippine Constabulary. Lower court found
him guilty of illegal possession of firearm. Mapa appeals.

Issue. Can a secret agent of a governor carry a gun without necessary permits? –No

Ratio. No he cannot because the law does not afford secret agents of such impunity. The law
provides that “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” unless otherwise provided.
To the exception, the law states 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.” Secret agents are not included in the exception list of people who are entitled to not
have their guns registered. Because of this, Mapa’s carrying of his gun without the necessary
permits is illegal.

Doctrine: The law is clear that there is no exemption for a secret agent. The relevant Statutory
Construction here is: “Construction and interpretation come only after it has been
demonstrated that application is impossible or inadequate without them.” Given that the law is
adequate, the court need not squabble over the what the law meant. No construction or
interpretation is necessary.
Daoang v. Municipal Judge G.R. No. L-34568 (1988)
Topic. When construction is necessary

Case. Petition for review on certiorari of Judge decision

Facts. Mr. and Mrs. Agonoy filed the adoption of a certain Bonillia and a certain Marcos. While
the court heard the petition, minors Daoang, with their father, filed an opposition arguing that
the Agonoy’s cannot adopt because they had a daughter, the oppositor’s mother. The mother is
dead now, but they contend that they are the Agonoy’s grandchildren. The petitioners bank
their petition on Art. 335 of the Civil Code enumerates entities who cannot adopt and one of
which are “those who have legitimate, legitimated, acknowledged natural children, or children
by legal fiction.”

Issue. Can Agonoy spouses adopt? –Yes

Ratio. They can adopt because the law does not include grandchildren as one of the
prohibitions of adopting. Again, the law provides that entities who cannot adopt are “those
who have legitimate, legitimated, acknowledged natural children, or children by legal fiction.”
The Agonoys having no living children, can adopt Borillia and Marcos. That the petitioners are
grandchildren of the Agonoys is undisputed. However, the Agonoys having a grandchild does
not prohibit them from adopting children. Hence, the Agonoy’s are entitled to adopt.

It should be noted however that the Spanish Civil Code, from which PH Civil Code was adopted,
disqualified persons who have legitimate/d descendants from adopting which would have been
favorable to the opposition. In its adoption in the Civil Code, the framers dropped
“descendants” and inserted “children”.

Doctrine: Relevant law is clear that having grandchildren is not included in the list of entities
who cannot adopt. As per statutory construction, what needs to be remembered for this case
are the following: “A statute clear and unambiguous on its face need not be interpreted; stated
otherwise, the rule is that only statutes with an ambiguous or doubtful meaning may be the
subject of statutory construction.” In so far as Art. 335 is clear, the courts need not inquire
further to its meaning.

Alonzo v. Intermediate Appellate Court G. R. No. 72873 (1987)

Topic. Characteristics of construction: Necessary when legislative intent cannot be ascertained

Case. Appeal of lower court decision dismissing redemption claim

Facts. Five siblings equally inherited pro indiviso* land from their deceased parents. Sibling 1
sold his share to Alonzos. Sibling 2 also sold his share to Alonzos a year after. Alonzos built a
house and a fence in their bought land. Sibling 3 lived in inherited land, which was next to the
Alonzo’s house. Sibling 2 lived there with her. Sibling 3 is friends with Alonzos in that their
children went to school together. 13 years after, Sibling 4 filed for redemption but revoked
because he is American citizen. Year after, Sibling 3 filed complaint for redemption.

Trial court dismissed complaint saying that 30-day period for filing after notice of sale had
lapsed. Art. 1623 of the Civil Code which states that “the right of legal pre-emption or
redemption shall not be exercised except within thirty days from the notice in writing by the
prospective vendor/s.” Since 13 years has passed, the court presumes that at some point, the
siblings have been informed and that the prescription has passed. Though no written notice
was served to the siblings, court held complainants had actual knowledge given that they are
neighbors.

Issue. Did the lower court interpret and apply the relevant law correctly? -Yes

Ratio. Yes, the lower court was correct in its application of the law because the facts prove the
likelihood of the notice happening at one point. The relevant law is Art. 1623 of the Civil Code
which states that “the right of legal pre-emption or redemption shall not be exercised except
within thirty days from the notice in writing by the prospective vendor/s.” (1) One of the issues
here is whether notice was given the complainants. Even if we grant that there was no written
notice, it is impossible to deem there being no notice at all. They live next to each other. (2)
When did the notice begin? The Court does not know but it assumes that it had begun and
elapsed in the 13 years.

Regarding the prescription of the right of redemption, the law specifically states that it should
be 30 days after notice. Given the 13 years, the court assumes that the prescription has as well
lapsed.

Doctrine: By letter of the law, the complainants would have won this case. But, due to the
circumstances, the Court stuck to the spirit of the law and gave leeway to the Alonzos.

“The spirit, rather than the letter of a statute determines its construction, hence, a statute must
be read according to its spirit or intent. For what is within the spirit is within the letter but
although it is not within the letter thereof, and that which is within the letter but not within the
spirit is not within the statute. Stated differently, a thing which is within the intent of the
lawmaker is as much within the statute as if within the letter; and a thing which is within the
letter of the statute is not within the statute unless within the intent of the lawmakers.” -
Agpalo

*Pro indiviso it was not divided legally nor formally but only equally among the heirs.

Endencia v. David G.R. Nos. L-6355-56 (1953)

Topic. Characteristics of construction: Judicial function

Case. Joint appeal from lower court decision declaring RA 590 Sec. 13 unconstitutional and
ordering CIR to refund
Facts. Prior to this case, SC ruled on Perfecto v. Meer regarding same issue. In Perfecto, SC
found that judge is not liable to income tax because it is against Art. VIII Sec. 9 of the
Constitution which provides that judges “shall receive compensation…which shall not be
diminished during their continuance in office.” After this decision, Congress passed RA 590
which deems no public officer salary exempt from income tax. Its rationale was that taxing
salary is not a decrease in compensation. In present case, despite RA 590’s promulgation, the
lower court that first received this case ruled in favor of the judges following the constitutional
provision.

Issue. Is RA 590 Constitutional even after SC decision? -No

Ratio. No it is not because the SC, which has the power to interpret that laws, has already ruled
on the issue. For the rationale, recall separation of powers. Legislature is tasked with creating
laws; executive with executing laws; and judiciary with interpretation and application of laws.
Congress’s insistence that taxing their salaries is not equivalent to a decrease of compensation
is an act of interpreting the phrase “which shall not be diminished during their continuance.” In
short, Congress acted outside of its capacities. Only the judiciary has the power to do what
Congress just did: to interpret. With RA 590 being unconstitutional, the judiciary’s decision in
Perfecto is retained. In so far as the present case has similarities with Perfecto, the instant case
should also be in favor of the judges.

Doctrine: Judiciary has the power to interpret laws. If it has decided on a case regarding a
constitutional provision, the Senate cannot pass a law that runs counter to same provision.
Nitafan v. Commissioner of Internal Revenue G.R. No. 78780 (1987)
Topic. Purpose of construction: determine legislative intent

Case. Petition to prohibit CIR and SC Financial Officer from making deductions of withholding
taxes from petitioners’ salaries

Facts. Judges salaries have been deducted for tax purposes. Petitioners filed the present
petition to halt the deduction. In their petition they assert that the law provides that their
salaries should not be decreased. To substantiate this, they postulate the previous and current
formulations of the relevant law:

1935 Constitution: “[Judges] shall receive such compensation as may be fixed by law, which
shall not be diminished during their continuance in office.”

1973 Constitution: “The salary of the Chief Justice and of the Associate Justices of the Supreme
court, and of judges of inferior courts shall be fixed by law, which shall not be decreased during
their continuance in office” and “No salary or any form of emolument of any public officer or
employee, including constitutional officers, shall be exempt from payment of income tax.”
1987 Constitution: “The salary of the Chief Justice and of the Associate Justices of the Supreme
Court, and of judges of lower courts shall be fixed by law. During their continuance in office,
their salary shall not be decreased.”

Petitioners claim that framers intended to use original concept of “non-dimunition” as 1973
Constitution.

Issue. Should the petitioner judges’s salary be subject to income tax? -Yes

Ratio. Their salaries should be subject to income tax because such is the intention of the
Consitutional Commission. Peeking at the transcript of Concom, it can be found that
Commissioner Rigos intended to delete proposed exemption grant to judiciary to equalize three
branches. Other than Rigos, Commissioner Bernas also quipped to subject their salaries to
general income tax like all taxpayers. Commissioner Aquino opines that the exemption grants
privilege to judges and is against the principles of tax uniformity and equal protection of laws.
Commissioner Rigos proposed changing “diminished” to “decreased” in line with
intergovernmental equality. Commissioner Bernas agreed with “decreased” but with the
understanding that it is subject to tax.

This change affects previously decided cases such as Perfecto and Endencia. Since the two run
counter to the new law, the doctrines in the two cases are now inoperative.

Doctrine: The relevant rule of Statutory Construction in this case is: “The primary task in
constitutional construction is to ascertain and thereafter assure the realization of the purpose
of the framers and of the people in the adoption of the Constitution.” To be able to ascertain
the proper understanding of the judge’s salary as the law intended, the court had to examine
the framers’ intent.

People v. Concepcion 44 Phil. 126 (1922)

Topic. Purpose of Construction: determine legislative intent

Case. Appeal from a lower court decision

Facts. Philippine National Bank President Concepcion issued a memo limiting the discretional
power of local manager at Aparri, Cagayan to grant loans and discount negotiable documents to
P5000 to P10000.

Manager asked for authorization from Concepcion about an establishment’s, Puno y

Concepcion, loan. PNB Pres. Concepcion authorized extension of credit to Puno y Concepcion in
the amount of P300,000. Security consisted of 6 demand notes. The notes and interest were
paid accordingly.
Puno y Concepcion consisted of several members including PNB President Concepcion’s wife
Rosario San Agustin.
Cagayan CFI found PNB Pres. Concepcion guilty of violating Sec. 35 of Act No. 2747 which reads:
“The National Bank shall not, directly or indirectly, grant loans to any of the members of the
board of directors of the bank nor to agents of the branch banks.” Sec. 49 of same act
prescribes punishments. But these were later repealed by Act. No. 2938 on Jan. 1921, after CFI
decision.

Issue. (1) Was the credit grant a “loan”? –Yes

(2) Was it a “loan” or “discount”? -Loan
(3) Was it an “indirect loan”? -Yes
(4) Can he be convicted when relevant provisions have been repealed? -Yes
(5) Was it in violation of Sec. 35 of Act. No. 2747? –Yes
(6) Can good faith be his defense? -No

Ratio. (1) Concession of credit necessary involves granting of a loan.

(2) Because interest was not deducted from the face of the notes, but was paid when the notes
fell due and they were single-name and not double-name paper.
(3) They are man and wife.
(4) “Where an Act of the Legislature which penalizes an offense, such repeal does not have the
effect of thereafter depriving the courts of jurisdiction to try, convict, and sentence offenders
charged with violations of the old law.”
(5) Defense contend that 35 refers to bank. 49 refers to punishment not on bank but person.
Therefore, they argue that there is no penalty for person. This is misconstrued. If corporation is
forbidden to do an act, same extends to directors.
(6) Under this statute, criminal intent is immaterial.

Doctrine: The principles can be found in ratio 3. “Directly or indirectly” could be problematic to
understand. But looking at the legislative intent would clear things out. In the inclusion of this
phrase, the Legislature intended to prohibit temptation for bank director. Personal interest and
duty at times conflict and the provision saw this coming. In this case, it is apparent that
Concepcion is interested to see his wife succeed which overcame his duty to PNB. Therefore, he
is “indirectly” a participant.

Definitions:
Credit of an individual: his ability to borrow money by virtue of the confidence or trust reposed
by a lender that he will pay what he may promise.
Loan: delivery by one party and the receipt by the other party of a given sum of money, upon
an agreement, express or implied, to repay the sum of money, upon an agreement, express or
implied, to repay the sum loaned, with or without interest.
Discount: Interest is deducted in advance; always on double-name paper.
Loan: Interest is taken at the expiration of a credit; generally on single-name paper.

Tanada v. Yulo G.R. No.43575 (1935)

Topic. Purpose of construction: Limitation on the power of courts to construe
Case. Action of quo warranto to clarify Judge Tañada’s position

Facts. 1911, Dec.: Tanada appointed justice of peace in Alabat, Tayabas by Governor-General
with consent of Philippine Commission

1931, Nov.: Act No. 3899 providing 65 y.o. as retirement age of judges approved

1933, Jan.: date for cessation from office as per Act No. 3899

1934, Sept.: Tanada transferred to Perez, Tayabas but same position

1935, Oct.: Tanada reached 65 years of age

1935: DOJ, through CFI Judge, ordered Tanada to surrender office

Issue: (1) Does Act. No. 3899 apply to Tanada? -No

(2) Does the transfer denote a new appointment? -No

Ratio: (1) Tanada has not reached 65 when the Act was approved. The law provides that judges
who are already 65 years old upon the time the Act No. 3899 takes effect should surrender
their offices. In this case, Tanada was only 64 when said Act gained approval. Although Tanada
did reach 65 later, such is immaterial as the law only includes those who have reached said date
on approval and not after its approval.
(2) The transfer is not a new appointment because it does not meet the elements of an
appointment. Appointments necessarily has two things: appointment by Governor-General and
consent of Philippine Senate. Transfer only needs the word of the Governor-General. As applied
to Tanada, his transfer is not an appointment because his second reassignment did not have
the consent of Philippine Senate. As well, by definition, transfer is the enlargement or change of
jurisdiction grounded on the original appointment. It being grounded on the original
appointment, no new appointment is necessary.

Doctrine: The relevant statutory doctrine for this case can be seen in Ratio 1. Defense argues
that the relevant provision is “defective and does not convey the legislative intent.” Later, it
was learned that the defense was actually seeking for the insertion of a phrase in the provision
which would then explicitly disqualify Tanada from office. To address this argument, the court
differentiates between liberal construction, which the court is allowed to do, and judicial
legislation, which is beyond the court’s jurisdiction. Liberal construction allows courts to find
out the true meaning of a provision through legislative intent. Judicial legislation, meanwhile, is
when the court adds certain elements/words in a provision that has been omitted. In short, the
defense sought judicial legislation, an act which courts cannot do.

Floresca v. Philex G.R. No. L-30642 (1985)

Topic. Purpose of Construction: Limitation on the power of courts to construe
Case. Petition to review lower court decision dismissing a civil complaint lodged against Philex

Facts. It is alleged that prior to the accident, Philex failed to address safety concerns in the
mining site. Much water accumulated in an open pit area which caused pressure in the working
shafts below. As a result, said area collapsed. Out of 48, 5 escaped, 22 rescued within the week.
But 21 were left to die due to Philex’s order to stop rescue mission.

Heirs of the 21 filed a civil complaint in CFI. Philex filed a motion to dismiss arguing that the
accident falls under the Workers’ Compensation Act (WCA) and thus outside of CFI jurisdiction.
WCA provides that (1) such work-connected deaths are within the jurisdiction of Workmen’s
Compensation Commission (WCC) and (2) if the employer is negligent, employer shall pay the
compensation plus 50% of same compensation. But in essence, the respondents invoke Section
5 of the WCA which states: “Exclusive right to compensation — The rights and remedies
granted by this Act to an employee by reason of a personal injury entitling him to compensation
shall exclude all other rights and remedies accruing to the employee, his personal
representatives, dependents or nearest of kin against the employer under the Civil Code and
other laws because of said injury.” Because the heirs have already received compensation, they
are no longer entitled to a damage suit.

The heirs of the deceased filed the present petition.

Issue. (1) Does CFI has jurisdiction? -Yes

(2) Whether the petitioners can only avail of WCA action or have a choice between WCA action
and civil damage in regular court or can avail of both WCA and civil damage? –Choose either
one but not both.

Ratio. To answer the two issues, (2) should be addressed before (1). (2) Generally, petitioners
must choose between a WCA action and civil suit. This is what the Section 5 of WCA provides
and what has been applied in various court decisions. But the court decided to render leeway to
the petitioners given the peculiarity of the instances. Petitioners have already received
compensation under the WCA. Afterwards, they learned of the true cause of the accident which
was Philex’s negligence. And then they filed a civil suit. The court reasoned that had the
petitioners learned of the cause much sooner, petitioners would have filed for a civil suit
instead. Petitioners’ initial resort to WCA action, the court said, is based on ignorance or
mistake of fact. Because petitioners were not informed of the true cause, they had not the
choice between a WCA and a civil suit. This then creates an exception to Section 5 of WCA.
Hence, court remanded the case to lower court for proper judgment. (1) CFI now has
jurisdiction because of the court’s making an exception of the case.

Doctrine: The topic, limitation on the power of courts to construe, can be found within court’s
discussion of the second issue. The two dissenting opinions posit that a careful reading of
Section 5 of WCA would demonstrate that when a complainant has already availed of
compensation via WCA, his/her right to sue in civil or other courts are understood to have been
extinguished. After passage of WCA, legislature had plenty of occasion to modify relevant
provision but did not do so. This, according to dissent, is manifest of legislative’s continuing
intent to retain the exclusivity provided therein. In the majority opinion’s decision to allow
petitioners to file case despite having received their WCA compensation, dissent argues that
the court has exercised a power outside of its capacities, i.e. that it has legislated.

To this, the majority opinion enunciates that it has not legislated. What it did was a mere
implementation of the Constitution and relevant statutes. Secs. 6, 7, and 9 of Art. II of 1973
Constitution guarantees social justice, establishes adequate services in employment, and
protects labor. With these provisions, the present court only gave effect to the rights
petitioners are entitled to. No legislation occurred, because the principles are already present
and need only be applied.