G.R. No.

L-28329 August 17, 1975

COMMISSIONER OF CUSTOMS, petitioner,

vs.
ESSO STANDARD EASTERN, INC., (Formerly: Standard-Vacuum Refining Corp.
(Phil.), respondent.

FACTS:
This is an appeal from the decision of the court of Tax Appeals (CTA) reversing the
Commissioner of Customs’ decision holding respondent ESSO Standard Eastern, Inc.,
liable for special import tax on certain articles imported by the latter under Republic Act
No. 387, otherwise known as the Petroleum Act of 1949.
Petitioner contends that the special import tax under R.A. No.1394 is separate and
distinct from the custom duty prescribed by the Tariff and Custom Code, and that the
exemption enjoyed by the respondent from the payment of customs duties under the
Petroleum Act of 1949 does not include exemption from the payment of the special
import tax provided in R.A. No. 1394.

Specifically, petitioner assigns two (2) errors allegedly committed by the CTA in the
assailed decision, to wit:

1. THE COURT OF TAX APPEALS ERRED IN HOLDING THAT THE TERM

“CUSTOMS DUTY” IN ARTICLE 103 OF R.A NO. 387 INCLUDES THE
SPECIAL IMPORT TAX IMPOSED BY REPUBLIC ACT NO. 1394;

2. THE COURT OF TAX APPEALS ERRED IN HOLDING THAT EXEMPTION

FROM PAYMENT OF CUSTOMS DUTIES UNDER REPUBLIC ACT NO. 387
INCLUDES EXEMPTION FROM PAYMENT OF THE SPECIAL IMPORT TAX

ISSUE:

1. Whether or not the CTA is correct in ruling that special import tax is considered a
customs duty; and

2. Whether or not the CTA is correct in holding that exemption from payment of
custom duties includes exemption from payment of special import tax.
RULING:
In both issues, the CTA is correct. In deciding the case, the Supreme Court ruled that it
is essential to determine the intention of the legislature through interpretation of the two
statutes involved.
It is well accepted principle that where a statute is ambiguous, as R.A. No. 1394
appears to be, courts may examine both the printed pages of the published Act as well
as those extrinsic matters that may aid in construing the meaning of the statute, such as
the history of its enactment, the reasons for the passage of the bill and purposes to be
accomplished by the measure.
Petitioner’s two assignments of errors shows that one is anchored on practically the
same ground as the other: both involve the interpretation of R.A. No. 387 (The
Petroleum Act of 1949) in relation with R.A. No. 1394 (The Special Import Tax Law).
In order to determine the true intent of the legislature, the particular clauses and
phrases of the statute should not be taken as detached and isolated expressions, but
the whole and every part thereof must be considered in fixing the meaning of any of its
parts. In fact, every statute should receive such construction as will make it harmonize
with the pre-existing body of laws.
The title of Republic Act No. 387 and the provisions of its three articles just cited give a
clue to the intent of the Philippine legislature, which is to encourage the exploitation and
development of the petroleum resources of the country.
Against this unambiguous language of R.A. No. 387, there is the subsequent legislation.
R.A. No. 1394, the Special Import Tax Law. The title indicates unmistakably that it is
repealing six prior statutes. As will be seen later, all these laws dealt with the imposition
of a special excise tax on foreign exchange or other form of levy on importation of
goods into the country. Section 6 of Republic Act No. 1394 declares that the tax
provided for in its Section 1 shall not be imposed against importation into the Philippines
of machinery and/or raw materials to be used by new and necessary industries as
determined in accordance with R.A. No. 901 and a long list of other goods, articles,
machinery, equipment, accessories and others.
WHEREFORE, taking into consideration the weight given by this Court to the findings
and conclusions of the Court of Tax Appeals on a matter it is well-equipped to handle,
which findings and conclusions. We find no reason to overturn, the petition of the
Commissioner of Customs to reverse the decision of the Court of Tax Appeals should
be, as it is hereby, denied.
G.R. No. L-21258. October 31, 1967.
FILIPINAS LIFE ASSURANCE COMPANY, Petitioner,
v.
THE COURT OF TAX APPEALS and THE COMMISSIONER OF INTERNAL
REVENUE, Respondents.

FACTS:

Petitioner filed an income tax return reporting total gross income of P26k. It
subsequently filed an amended return reporting total gross income of P20k,
accompanied with a claim for refund of P2.7k, due to the fact that in its amended return,
it only reported 25% of the dividends from domestic corporations

The claim for refund was filed with respondent Commissioner on Internal Revenue but
as he has not been heard from, petitioner took the matter to the Court of Tax Appeals
(CTA) to avoid prescription.

CTA denied the claim for refund on the ground that the proviso allowing the return of
only 25% of the income from dividends is found in the subsection, although of the same
section.

ISSUE:

Whether or not domestic and resident foreign life insurance companies are entitled to
return only 25 per cent of their income from dividends under the 1957 amendment of
section 24 of the National Internal Revenue Code?

RULING:

While proviso is deemed to apply only to the immediately preceding clause or provision
as a general rule of statutory construction, its position cannot override intention. Thus,
the position of a proviso, although possessed of considerable influence, is not
necessarily controlling, as the proviso may apply to sections or portions thereof which
follows it or even to the entire statute.

In the ascertainment of intention, the legislative history of statute is extremely more

important than position. Following the legislative history of the statute, it will be thus
seen that dividend exclusion has always been a dominant feature of corporate income
tax since a corporation cannot deduct from its gross income the amount of dividends it
distributed to its corporation-shareholders during the taxable year, any distributed
earnings are necessarily taxed twice.

A review of the circumstances which promoted the amendment of Section 24 in 1957

shows no intention to withdraw from life insurance companies. The amendment was
intended for a two-fold purpose: (1) change the tax base to investment income, and (2)
lower tax on life insurance companies. Following this intention, the legislature could not
have intended to withdraw such privilege from them. Hence, it is held that domestic and
resident foreign life insurance companies are entitled to the benefits of dividend
exclusion, the position of the proviso allowing it notwithstanding.

ACCORDINGLY, the decision appealed from is reversed, and the respondent

Commissioner of Internal Revenue is ordered to refund to the petitioner company the
amount of P2,721 as excess income tax for 1958. No pronouncement as to costs.
G.R. No. 231658, July 04, 2017

REPRESENTATIVES EDCEL C. LAGMAN, TOMASITO S. VILLARIN, GARY C.

ALEJAÑO, EMMANUEL A. BILLONES, AND TEDDY BRAWNER BAGUILAT,
JR., Petitioners, v. HON. SALVADOR C. MEDIALDEA, EXECUTIVE SECRETARY;
HON. DELFIN N. LORENZANA, SECRETARY OF THE DEPARTMENT OF
NATIONAL DEFENSE AND MARTIAL LAW ADMINISTRATOR; AND GEN.
EDUARDO AÑO, CHIEF OF STAFF OF THE ARMED FORCES OF THE
PHILIPPINES AND MARTIAL LAW IMPLEMENTOR, Respondents.

FACTS:
Effective May 23, 2017, and for a period not exceeding 60 days, President Rodrigo Roa
Duterte issued Proclamation No. 216 declaring a state of martial law and suspending
the privilege of the writ habeas corpus in the whole of Mindanao.
After the submission of the report and the briefings, the Senate issued P.S. Resolution
No. 388 expressing full support to the martial law proclamation and finding Proclamation
No. 216 “to be satisfactory, constitutional and in accordance with the law”. In the same
Resolution, the Senate declared that it found “no compelling reason to revoke the
same”.
The Senate’s counterpart in the lower house shared the same sentiments. The House
of Representatives likewise issued House Resolution No. 1050 ‘’EXPRESSING THE
FULL SUPPORT OF THE HOUSE OF REPRESENTATIVES TO PRESIDENT
RODRIGO DUTERTE AS IT FINDS NO REASON TO REVOKE PROCLAMATION NO.
216, ENTITLED ‘DECLARING A STATE OF MARTIAL LAW AND SUSPENDING THE
PRIVILEGE OF THE WRIT OF HABEAS CORPUS IN THE WHOLE OF MINDANAO’’.

ISSUE:
Whether or not Proclamation No. 216 may be considered vague and thus void
because of a.) its inclusion of “other rebel groups”; and b.) the absence of any guideline
specifying its actual operational parameters within the entire Mindanao region.
RULING:
No, Proclamation No. 216 is being facially challenged on the ground of “vagueness” by
the insertion of the phrase “other rebel groups” in its Whereas Clause and for lack of
available guidelines specifying its actual operational parameters within the entire
Mindanao region, making the proclamation susceptible to broad interpretation,
misinterpretation, or confusion, cannot be sustained.
This argument lacks legal basis.
In People v Nazario, the Court held that:
As a rule, a statute or act may be said to be vague when it lacks comprehensible
standards that men ‘of common intelligence must necessarily guess at its meaning and
differ as to its application’.

In the case at bar, the term “other rebel groups” in Proclamation No. 216 is not at all
vague when viewed in the context of the words that accompany it. Verily, the text of
Proclamation No. 55, which it cited by way of reference in its Whereas clauses.
Therefore, there is no need for the Court to determine the constitutionality of the
implementing and/or operational guidelines, general orders, arrest orders and other
orders issued after the proclamation for being irrelevant to its review. Thus, any act
committed under the said orders in violation of the Constitution and the laws, such as
criminal acts or human rights violations, should be resolved in a separate proceeding.
Finally, there is a risk that if the Court wades into these areas, it would be deemed a
trespassing into the sphere that is reserved exclusively for Congress in exercise of its
power to revoke.
[G.R. NO. 176951]

LEAGUE OF CITIES OF THE PHILIPPINES (LCP) represented by LCP National

President JERRY P. TREÑAS, CITY OF ILOILO represented by MAYOR JERRY P.
TREÑAS, CITY OF CALBAYOG represented by MAYOR MEL SENEN S.
SARMIENTO, and JERRY P. TREÑAS in his personal capacity as
taxpayer Petitioners, v. COMMISSION ON ELECTIONS; MUNICIPALITY OF
BAYBAY, PROVINCE OF LEYTE; MUNICIPALITY OF BOGO, PROVINCE OF CEBU;
MUNICIPALITY OF CATBALOGAN, PROVINCE OF WESTERN SAMAR;
MUNICIPALITY OF TANDAG, PROVINCE OF SURIGAO DEL SUR; MUNICIPALITY
OF BORONGAN, PROVINCE OF EASTERN SAMAR; and MUNICIPALITY OF
TAYABAS, PROVINCE OF QUEZON, Respondents.

FACTS:

The 11th Congress enacted into law 33 bills converting 33 municipalities into cities.
However, it did not act on bills converting 24 other municipalities into cities.

Subsequently, the 12th Congress enacted Republic Act No. 9009 (RA 9009), which took
effect on 20 June 2001, amending Section 450 of the Local Government Code by
increasing the annual income requirement for conversion of a municipality into a city
from P20million to P100million.

Thereafter, 16 municipalities filed their individual cityhood bills. The 16 cityhood bills
contained a common provision exempting all the 16 municipalities from the P100million
income requirement of RA 9009. The cityhood bills were approved by the House of
Representatives and the Senate, and lapsed into law without the President’s signature.
Said Cityhood Laws directed the Commission on Elections (COMELEC) to hold
plebiscites to determine whether the voters in each municipality approved of the
conversion.

Petitioners sought to declare the 16 Cityhood Laws unconstitutional for violation of

Section 10, Article X of the Constitution and the equal protection clause, lamenting that
the wholesale conversion of municipalities into cities would reduce the share of existing
cities in the Internal Revenue Allotment (IRA).

On 18 November 2008, the Supreme Court En Banc, by a majority vote, declared the
16 Cityhood Laws to be in violation of Section 10, Article X of the 1987 Constitution,
which provides that no city shall be created except in accordance with the criteria
established in the local government code. The Supreme Court held that since
respondent municipalities did not meet the P100million income requirement under
Section 450 of the Local Government Code, as amended by RA 9009, the Cityhood
Laws converting said municipalities into cities were unconstitutional.

The Supreme Court also declared the 16 Cityhood Laws to be in violation of the equal
protection clause since there was no valid classification between those entitled and
those not entitled to exemption from the P100million income requirement: (1) there was
no substantial distinction between municipalities with pending cityhood bills in the 11th
Congress when RA 9009 was enacted and municipalities that did not have such
pending bills; (2) the classification criterion −mere pendency of a cityhood bill in the 11th
Congress −was not germane to the purpose of the law, which was to prevent fiscally
nonviable municipalities from converting into cities; (3) the pendency of a cityhood bill in
the 11th Congress limited the exemption to a specific condition existing at the time of
passage of RA 9009 – a condition that would never happen again, violating the
requirement that a valid classification must not be limited to existing conditions only; and
(4) limiting the exemption only to the 16 respondent municipalities violated the
requirement that the classification must apply to all similarly situated; municipalities with
the same income as the 16 respondent municipalities could not convert into cities.

On 31 March 2009, the Supreme Court En Banc, also by a majority vote, denied the
respondent municipalities’ first motion for reconsideration. On 28 April 2009, the
Supreme Court En Banc, by a split vote, denied the respondent municipalities’ second
motion for reconsideration. The 18 November 2008 Decision became final and
executory and was recorded in the Book of Entries of Judgments on 21 May 2009.

However, on 21 December 2009, the Supreme Court En Banc reversed the 18

November 2008 Decision and upheld the constitutionality of the Cityhood Laws. The
Court reasoned that: (1) When Section 10, Article X of the 1987 Constitution speaks of
the local government code, the reference cannot be to any specific statute or
codification of laws, let alone the Local Government Code (LGC) of 1991. It would be
noted that at the time of the adoption of the 1987 Constitution, Batas Pambansa Blg.
(BP) 337, the then LGC, was still in effect. Had the framers of the 1987 Constitution
intended to isolate the embodiment of the criteria only in the LGC, they would have
referred to BP 337.

Also, they would not have provided for the enactment by Congress of a new LGC, as
they did in Section 3, Article X of the Constitution. Accordingly, the criteria for creation of
cities need not be embodied in the LGC. Congress can impose such criteria in a
consolidated set of laws or a single-subject enactment or through amendatory laws. The
passage of amendatory laws, such as RA 9009, was no different from the enactment of
the cityhood laws specifically exempting a particular political subdivision from the criteria
earlier mentioned.

Congress, in enacting the exempting laws, effectively decreased the already codified
indicators. (2) Deliberations on RA 9009, particularly the floor exchange between
Senators Aquilino Pimentel and Franklin Drilon, indicated the following complementary
legislative intentions: (a) the then pending cityhood bills would be outside the pale of the
proposed P100million minimum income requirement; and (b) RA 9009 would not have
any retroactive effect insofar as the pending cityhood bills were concerned. That said
deliberations were undertaken in the 11th and/or 12th Congress (or before the cityhood
laws were passed during the 13th Congress) and Congress was not a continuing
legislative body, was immaterial. Debates, deliberations, and proceedings of Congress
and the steps taken in the enactment of the law, in this case the cityhood laws in
relation to RA 9009 or vice versa, were part of its legislative history and may be
consulted, if appropriate, as aids in the interpretation of the law. (3) Petitioners could not
plausibly invoke the equal protection clause because no deprivation of property resulted
by the enactment of the Cityhood Laws. It was presumptuous on the part of petitioner
LCP member-cities to already stake a claim on the IRA, as if it were their property, as
the IRA was yet to be allocated.

Furthermore, the equal protection clause does not preclude reasonable classification
which (a) rests on substantial distinctions; (b) is germane to the purpose of the law; (c)
is not be limited to existing conditions only; and (d) applies equally to all members of the
same class. All of these requisites had been met by the subject Cityhood Laws: (a)
Respondent municipalities were substantially different from other municipalities desirous
to be cities.

They had pending cityhood bills before the passage of RA 9009, and years before the
enactment of the amendatory RA 9009, respondent municipalities had already met the
income criterion exacted for cityhood under the LGC of 1991. However, due to
extraneous circumstances (the impeachment of then President Estrada, the related
jueteng scandal investigations conducted before, and the EDSA events that followed
the aborted impeachment), the bills for their conversion remained unacted upon by
Congress.

To impose on them the much higher income requirement after what they had gone
through would appear to be unfair; (b) the exemption of respondent municipalities from
the P100million income requirement was meant to reduce the inequality, occasioned by
the passage of the amendatory RA 9009, between respondent municipalities and the 33
other municipalities whose cityhood bills were enacted during the 11th Congress; and
(c) the uniform exemption clause would apply to municipalities that had pending
cityhood bills before the passage of RA 9009 and were compliant with then Sec. 450 of
the LGC of 1991, which prescribed an income requirement of P20 million.

(4) The existence of the cities consequent to the approval of the Cityhood Laws in the
plebiscites held in the affected municipalities is now an operative fact. New cities appear
to have been organized and are functioning accordingly, with new sets of officials and
employees. Pursuant to the operative fact doctrine, the constitutionality of the Cityhood
Laws in question should be upheld.

Petitioners moved for reconsideration (ad cautelam) and for the annulment of 21
December 2009 Decision. Some petitioners-in-intervention also moved for
reconsideration (ad cautelam).

ISSUE:

1. Whether the Cityhood Laws violate Section 10, Article X of the Constitution; and
2. Whether the Cityhood Laws violate the equal protection clause.

RULING:

The Cityhood Laws violate Sections 6 and 10, Article X of the Constitution, and are thus
unconstitutional.
First, applying the P100 million income requirement in RA 9009 to the present case is a
prospective, not a retroactive application, because RA 9009 took effect in 2001 while
the cityhood bills became law more than five years later.

Second, the Constitution requires that Congress shall prescribe all the criteria for the
creation of a city in the Local Government Code and not in any other law, including the
Cityhood Laws.

Third, the Cityhood Laws violate Section 6, Article X of the Constitution because they
prevent a fair and just distribution of the national taxes to local government units.

Fourth, the criteria prescribed in Section 450 of the Local Government Code, as
amended by RA 9009, for converting a municipality into a city are clear, plain and
unambiguous, needing no resort to any statutory construction.

Fifth, the intent of members of the 11th Congress to exempt certain municipalities from
the coverage of RA 9009 remained an intent and was never written into Section 450 of
the Local Government Code.

Sixth, the deliberations of the 11th or 12th Congress on unapproved bills or resolutions
are not extrinsic aids in interpreting a law passed in the 13th Congress.

Seventh, even if the exemption in the Cityhood Laws were written in Section 450 of the
Local Government Code, the exemption would still be unconstitutional for violation of
the equal protection clause.

WHEREFORE, respondent LGUs' Motion for Reconsideration dated June 2, 2009, their
"Motion to Amend the Resolution of April 28, 2009 by Declaring Instead that
Respondents' 'Motion for Reconsideration of the Resolution of March 31, 2009' and
'Motion for Leave to File and to Admit Attached Second Motion for Reconsideration of
the Decision Dated November 18, 2008' Remain Unresolved and to Conduct Further
Proceedings," dated May 14, 2009, and their second Motion for Reconsideration of the
Decision dated November 18, 2008 are GRANTED. The June 2, 2009, the March 31,
2009, and April 31, 2009 Resolutions are REVERSED and SET ASIDE. The entry of
judgment made on May 21, 2009 must accordingly be RECALLED.

The instant consolidated petitions and petitions-in-intervention are DISMISSED. The

cityhood laws, namely Republic Act Nos. 9389, 9390, 9391, 9392, 9393, 9394, 9398,
9404, 9405, 9407, 9408, 9409, 9434, 9435, 9436, and 9491 are
declared VALID and CONSTITUTIONAL.
[G.R. Nos. L-16696]

LUCIANO ESCOSURA, DIONISIO ASIS, PRIMATIVO BINALBER, PROCOPIO

CIPRIANO, FEDERICO HIPOLITO, CESAR VILLAREAL, and PABLO R.
CRUZ, Petitioners-Appellees, v. SAN MIGUEL BREWERY, INC., Respondent-
Appellant.

FACTS:

Petitioners-appellees are all employees of herein respondent- appellant San Miguel

Brewery, Inc. who became compulsorily covered under the Social Security System (now
Commission) in September, 1957. At various times during their employment, they fell ill
and were confined in the hospital for treatment. For the duration of their confinement,
they were given by the employer sick leave pay to the extent of 50% of their wages for
the first 3 days and 75% of such pay thereafter, pursuant to its Health, Welfare and
Retirement Plan. Such receipt of sick leave pays notwithstanding, the employee claimed
for sickness benefit allowance under the Social Security Act for the respective period of
their confinement, thus: chanrob1es virtual 1aw library

Amount of

Name of Employee Claim Period of confinement

1. Luciano Escosura P November 27, 1958 to June 1, 1959 or 187 days

2. Dionisio Asis 19.24 March 20, 1959 to April 12, 1959 or 23 days

3. Primitivo Binalber 15.05 February 2, 1959 to March 2, 1959 or 29 days

4. Procopio Cipriano 25.30 November 16, 1958 to December 28, 1958 or 43 days

5. Federico Hipolito 48.26 January 1, 1959 to February 8, 1959 or 39 days

6. Cesar Villareal 3.70 April 3, 1959 to April 12, 1959 or 10 days

7. Pablo B. Cruz January 24, 1959 to March 1, 1959 or 36 days

They contend that under Section 14(a) of Republic Act 1161, their receipt of sick-leave
pay less than the full wage does not preclude them from claiming for the allowances
provided in the law. The company, for its part, countered that having already received
sick leave to pay (although not full pay) from their employer, the petitioners cannot for
the same period claim entitlement to the benefits under the Social Security Act as these
are exclusive to those not receiving any leave privileges at all from the employer.
[G.R. No. 9144. March 27, 1915. ]

THE UNITED STATES, Plaintiff-Appellee, v. VENANCIO DE GUZMAN (alias

CACALASAN), Defendant-Appellant.

FACTS:

Defendant De Guzman, along with Pedro and Serapio Macarling, was convicted of
asesinato (murder) and sentenced to life imprisonment.

The evidence of record leaves no room for doubt that, on the day and at place
mentioned in the information, De Guzman who was walking through a field with Pedro
and Serapio Macarling and Rufino Garin, deceased, struck the latter on the head,
knocked him down and held him on the ground while Pedro Macarling stabbed him to
death. Information was duly filed charging De Guzman, jointly with the two Macarlings,
with the murder of Guzman entered into an agreement with the fiscal under the terms of
which he promised to appear and testify as a witness for the Government at the trial of
his coaccused, and to tell the truth as to all that occurred, provided the information was
dismissed as to him and he himself was not brought to trial. With the consent of the
court, and in pursuance of this agreement, he was not arraigned nor brought to trial, and
the information was dismissed as to him. One of his coaccused pleaded guilty and the
other not guilty, and thereafter the case came on for trial. after several witnesses had
been called, De Guzman was placed on the witness stand, and denied all knowledge of
the murder. He denied that he had ever said anything implicating his coaccused, and
swore that a statement made by him before a justice of the peace was false, and that it
had been made through fear of certain police officer.

The Solicitor General relying on provisions of General orders recommends the

discharge of the appellant.

Section 34, 35, and 36 of General orders No. 58, upon which counsel for defense and
the SolicitorGeneral rely, are as follows:

SEC. 34. When two or more persons shall be included in the same charge, the court, at
any time before the defendants have entered upon their defense or upon the application
of the counsel of the Government, may direct any defendant to be discharged, that he
may be a witness for the United States.

SEC. 35. When two or more persons shall be included in the same charge, and the
court shall be of opinion in respect to a particular defendant that there is not sufficient
evidence to put him on his defense, it must order him to be discharged before the
evidence is closed, that he may be a witness for his codefendant.
SEC. 36. The order indicated in sections thirtyfour and thirtyfive shall amount to an
acquittal of the defendant discharged, and shall be a bar to future prosecution for the
same offense.

The question raised on this appeal being his right to exemption from prosecution for the
crime thus committed, on the ground that a former information, charging the same
offense, had been dismissed as to him in order that he might testify as a witness for the
prosecution.

ISSUE:

Should the defendant be discharged from prosecution even if he did not faithfully
comply as to the sworn agreement made prior the trial which entitled him immunity as
witness for the States

RULING:

No, the defendant should not be discharged.

General rule of statutory construction that courts may take judicial notice of the original
and history of the statutes which they are called upon to construe and administer, and of
the facts which affect their derivation, validity and operation. Looking at the legislative
history of the statute under the old system of criminal procedure with a system borrowed
on large part from English and American precedents, it can be gleaned that faithful
performance is necessary to avail of the bar to criminal prosecution. Failure of the
Defendant in the case at bar to faithfully and honestly carry out his undertaking to
appear as witness and to tell the truth at the trial of his co-accused deprived him of the
right to plead his formal dismissal as a bar to his prosecution.

The Court find no errors in the proceedings prejudicial to the substantial rights of the
accused, and the judgment convicting and sentencing him should therefore be affirmed,
with the costs of this instance against him. So ordered.
[G.R. No. L-55230]

HON. RICHARD J. GORDON, in his capacity as City Mayor of

Olongapo, Petitioner, v. JUDGE REGINO T. VERIDIANO II and Spouses EDUARDO
and ROSALINDA YAMBAO, Respondents.

FACTS:
On March 21, 1980 a joint team composed of agents from the FDA and narcotics
agents from the Philippine Constabulary conducted a "test buy" at San Sebastian Drug
Store and was sold 200 tablets of Valium, 10 mg. worthP410.00 without a doctor's
prescription. A report on the operation was submitted to the petitioner, as mayor of
Olongapo City. He issued a letter summarily revoking Mayor's Permit for rampant
violation of R.A. 5921, otherwise known as the Pharmacy Law and R.A. 6425 or the
Dangerous Drugs Act of 1972.
Later, when the petitioner went to Singapore, Vice-Mayor Alfredo T. de Perio, Jr.
caused the posting of a sign board at the San Sebastian Drug Store announcing its
permanent closure. Acting on the same investigation report of the "test-buy," and after
hearing, FDA Administrator Arsenio Regala, on April 25, 1980, directed the closure of
the drug store for three days and its payment of a P100.00 fine for violation of R.A. No.
3720.
On April 29, 1980, the FDA lifted its closure order after noting that the penalties
imposed had already been discharged and allowed the drug store to resume operations.
On April 30, 1980, Yambao wrote a letter to the petitioner seeking reconsideration of the
revocation of Mayor's Permit having received no reply, she and her husband filed with
the Regional Trial Court of Olongapo City a complaint for mandamus and damages,
with a prayer for a writ of preliminary injunction, against the petitioner and Vice-Mayor
de Perio.

On the same date, Yambao requested permission from the FDA to exchange the
locations of the San Sebastian Drug Store and the Olongapo City Drug Store for
reasons of "business preference. The request was granted. But when informed of this
action, the petitioner, in a letter to the private respondent dated May 13, 1980,
disapproved the transfers and suspended Mayor's Permit No. 1955 for the Olongapo
City Drug Store.

The Yambaos then filed a supplemental complaint questioning the said suspension and
praying for the issuance of a preliminary writ of prohibitory injunction. On the same day,
the respondent judge issued an order directing the... maintenance of the status quo with
respect to the Olongapo City Drug Store pending resolution of the issues.

On May 21, 1980, the petitioner wrote the FDA requesting reconsideration of its order of
April 29, 1980, allowing resumption of the operation of the San Sebastian Drug Store
The request was denied by the FDA After a joint hearing and an exchange of
memoranda thereon, the respondent judge issued an order DENIED the revocation of
Mayor's Permit... for the San Sebastian Drug Store... motion for reconsideration of the
above-stated order was denied.

The petitioner there upon came to this Court in this petition for certiorari and prohibition
with preliminary injunction, to challenge the aforesaid orders.

ISSUES:

Whether or not the Mayor of Olongapo City has the power to grant and revoke licenses
for the operation of drug stores.

RULING:

The Food and Drug Administration was created under R.A No. 3720 and vested with all
drug inspection functions in line with "the policy of the State to insure safe and good
quality supply of food, drug and cosmetics, and to regulate the production, sale and
traffic of the same to protect the health of the people.

When the drug addiction problem continued to aggravate, P.D. No. 280 was
promulgated to give more teeth to the powers of the FDA, thus:

Food and Drug Administrator is hereby authorized to order the closure, or suspend or
revoke the license of any drug establishment which after administrative investigation is
found guilty of selling or dispensing drugs, medicines and other similar substances the
petitioner, traces his authority to the charter of Olongapo City, R.A. No. 4645, which
inter alia empowers the city mayor under Section 10 thereof:

“To grant or refuse municipal licenses to operate or permits of all classes and to revoke
the same for violation of the conditions upon which they were granted, or if acts
prohibited by law or city ordinances are being committed under protection of such
licenses... or in the premises in which the business for which the same have been
granted is carried on, or for any other good reason of general interest."

The charter also provides, in connection with the powers of the city health officer, that:
"He and his representatives shall have the power to arrest violators of health laws,
ordinances, rules and regulations and to recommend the revocation or suspension of
the permits of the different establishments to the City Mayor for violation of health...
laws, ordinances, rules and regulations. Courts of justice, when confronted with
apparently conflicting statutes, should endeavor to reconcile the same instead of
declaring outright the invalidity of one as against the other.
Such alacrity should be avoided. The wise policy is for the judge to harmonize them if
this is possible, bearing in mind that they are equally the handiwork of the same
legislature, and so give effect to both while at the same time also according due respect
to a coordinate department of the government.

A study of the said laws will show that the authorization to operate issued by the FDA is
a condition precedent to the grant of a mayor's permit to the drug store seeking to
operate within the limits of the city. The power to determine if the opening of the drug
store is conformable to the national policy and the laws on the regulation of drug sales
belongs to the FDA.As the infraction involved the pharmacy and drug laws which the
FDA had the direct responsibility to execute, the mayor had no authority to... interpose
his own findings on the matter and substitute them for the decision already made by the
FDA.

In the present case, the condition allegedly violated related to a national law, not to a
matter of merely local concern, and so came... under the jurisdiction of the FDA. The
petitioner magnifies the infraction committed by the San Sebastian Drug Store but the
FDA minimizes it. According to the FDA Administrator, valium is not even a prohibited
drug, which is why the penalty imposed was only a 3-day closure of the drug store and
a fine ofP100.00.

The FDA had no authority to revoke that particular condition of the mayor's permits
indicating the sites of the two drug stores as approved by the mayor in the light of the
needs of the city. Only the mayor could.

Our holding is that the petitioner acted invalidly in revoking Mayor's Permit No. 1954
after the FDA had authorized the resumption of operations of the San Sebastian Drug
Store following the enforcement of the penalties imposed upon it. However, it was
competent for the petitioner to suspend Mayor's Permit No. 1955 for the transfer of the
Olongapo City Drug Store in violation of the said permit.

Principles: Courts of justice, when confronted with apparently conflicting statutes,

should endeavor to reconcile the same instead of declaring outright the invalidity of one
as against the other. The wise policy is for the judge to harmonize them if this is
possible, bearing in mind that they are equally the handiwork of the same legislature,
and so give effect to both while at the same time also according due respect to a
coordinate department of the government. Settled is the rule that the factual findings of
administrative authorities are accorded great respect because of their acknowledged
expertise in the fields of specialization to which they are assigned.
[G.R. No. L-46095]
PHILIPPINE NATIONAL BANK, Petitioner, v. HONORABLE ELIAS B. ASUNCION,
FABAR INCORPORATED, JOSE MA. BARREDO, CARMEN B. BORROMEO and
TOMAS L. BORROMEO, Respondents.

FACTS:
Antonio and Asuncion Chua were the owners of a parcel of land covered by a TCT and
registered in their names. Upon the death of Antonio, the probate court appointed his
son, private respondent Allan Chua as special administrator of the intestate estate. The
court also authorized Allan to obtain a loan accommodation from PNB to be secured by
a real estate mortgage over the above-mentioned parcel of land, which Allan did for
P450,000.00 with interest.
For failure to pay the loan in full, the bank extra judicially foreclosed the real estate
mortgage. During the auction, PNB was the highest bidder. However, the loan had a
payable balance. To claim this deficiency, PNB instituted an action with the RTC against
Asuncion and Allan.
The Regional Trial Court dismissed PNB’s complaint.
The Court of Appeals affirmed the decision. PNB appealed contending that under
prevailing jurisprudence, when the proceeds from an extrajudicial foreclosure is not
enough to pay off the loan, the mortgagee can file a civil case against the mortgagor to
satisfy the deficiency.
ISSUE:
Whether or not PNB may still pursue by civil action the recovery of the balance of
indebtedness after having foreclosed the property securing the same.
RULING:
No. Case law holds that this rule grants to the mortgage three distinct, independent and
mutually exclusive remedies that can be alternatively pursued by the mortgage creditor
for the satisfaction of his credit in case the mortgagor dies, among them: (1) to waive
the mortgage and claim the entire debt from the estate of the mortgagor as an ordinary
claim; (2) to foreclose the mortgage judicially and prove any deficiency as an ordinary
claim; and (3) to rely on the mortgage exclusively, foreclosing the same at any time
before it is barred by prescription without right to file a claim for any deficiency.
Petitioner herein has chosen the mortgage-creditors option of extra judicially foreclosing
the mortgaged property of the Chuas. This choice now bars any subsequent deficiency
claim against the estate of the deceased, Antonio M. Chua. Petitioner may no longer
avail of the complaint for the recovery of the balance of indebtedness against said
estate, after petitioner foreclosed the property securing the mortgage in its favor. It
follows that in this case no further liability remains on the part of respondents and the
late Antonio M. Chuas estate.
WHEREFORE, judgment is hereby rendered modifying the appealed orders of
respondent court dated November 29, 1976 and January 26, 1977 in the sense that as
against the deceased Manuel H. Barredo, the case is dismissed, but as against all the
other solidary debtors, the case is remanded to respondent court for further
proceedings.

No costs.
[G.R. No. 87119]
HON. GEMILIANO C. LOPEZ, JR., in his capacity as City Mayor of
Manila, Petitioner, v. THE CIVIL SERVICE COMMISSION, HON. DANILO R.
LACUNA, in his capacity as Vice-Mayor and Presiding Officer of the City Council
of Manila, and THE CITY COUNCIL OF MANILA, Respondents.

FACTS:

On September 13, 1988, the Vice-Mayor of Manila and Presiding Officer of the City
Council of Manila, the Hon. Danilo R. Lacuna, submitted to the Civil Service Commission,
through the Regional Director of the National Capital Region, the appointments of
nineteen officers and employees in the Executive Staff of the Office of the Presiding
Officer, City Council of Manila, pursuant to the provisions of Section 15, of said Republic
Act No. 409, as amended, which reads:

Sec. 15. The Board shall appoint and the Vice Mayor shall sign all appointments of the
other employees of the Board.

The City Budget Officer of Manila later sought from the Personnel Bureau of the Mayor’s
office “comment and/or recommendation” on whether the payroll of the newly appointed
employees of the City Council may be paid on the basis of appointments signed by the
Vice-Mayor.2 The Personnel Bureau then forwarded the query to the City Legal Officer
who, in a 3rd endorsement dated September 19, 1988,3 rendered an opinion that the
proper appointing officer is the City Mayor and not the City Council. This opinion was
transmitted by the Secretary to the City Mayor to the Commission.

On February 1, 1989, the Commission promulgated Resolution No. 89-075, and held that
contrary to the opinion of the City Legal Officer, it is the City Council to which the
appointing power is vested. The dispositive portion thereof is as follows:

WHEREFORE, foregoing premises considered, the Commission resolved to rule, as it

hereby rules that the proper appointing authority of the officers and employees of the City
Council of Manila is the City Council and the signatory of individual appointments thus
issued is the City Vice-Mayor of Manila.

As the petitioner contends, Section 15 of Republic Act No. 409 as amended has
supposedly been repealed by Republic Act No. 5185, specifically, Section 4 thereof,
which we quote, in part:

The City Assessor, City Agriculturist, City Chief of Police and City Chief of Fire
Department and other heads of offices entirely paid out of city funds and their respective
assistants or deputies shall, subject to civil service law, rules and regulations, be
appointed by the City Mayor: Provided, however, That this section shall not apply to
Judges, Auditors, Fiscals, City Superintendents of Schools, Supervisors, Principals, City
Treasurers, City Health Officers and City Engineers.

All other employees, except teachers, paid out of provincial, city or municipal general
funds, road and bridge funds, school funds, and other local funds, shall, subject to civil
service law, rules and regulations, be appointed by the Provincial Governor, City or
Municipal Mayor upon recommendation of the office head concerned. . . .

and by Batas Blg. 337, we likewise quote:

Sec. 171. Chief Executive; Compensation, Powers, and Duties. —

(2) The city mayor shall:
(h) Appoint, in accordance with civil service law, rules and regulations, all officers and
employees of the city, whose appointments are not otherwise provided in this Code;

ISSUE:

The only question in this petition, denominated as a “direct appeal under Article VIII,
Section 5 (2) (e), of the Constitution and Section 9(3), of Batas Blg. 129,” is whether the
City Council of Manila still has the power to appoint Council officers and employees under
Republic Act No. 409, otherwise known as the Charter of the City of Manila, or whether
the power is now vested with the City Mayor pursuant to Republic Act No. 5185, the
Decentralization Law, and Batas Blg. 337, the Local Government Code. The facts are as
follows:

RULING:

There is no doubt that Republic Act No. 409, which provides specifically for the
organization of the Government of the City of Manila, is a special law, and whereas
Republic Act No. 5185 and Batas Blg. 337, which apply to municipal governments in
general, are general laws. As the Solicitor General points out, and we agree with him, it
is a canon of statutory construction that a special law prevails over a general law —
regardless of their dates of passage — and the special is to be considered as remaining
an exception to the general.
[G.R. No. L-23052]

CITY OF MANILA, Petitioner, v. GENERO M. TEOTICO and THE COURT OF

APPEALS, Respondents.

FACTS:

Teotico fell inside an uncovered and unlighted catch basin or manhole on P. Burgos
Avenue, Manila as he was trying to board a jeepney, causing injuries which required
him to incur medical expenses.

Teotico filed, with the CFI of Manila, a complaint for damages against the City of Manila,
its mayor, city engineer, city health officer, city treasurer and chief of police.

The CFI of Manila rendered a decision in favor of Teotico and dismissing the amended
complaint, without costs.

On appeal taken by plaintiff, this decision was affirmed by the CA, except insofar as the
City of Manila is concerned, which was sentenced to pay damages in the aggregate
sum of P6,750.00. Hence, this appeal for certiorari by the City of Manila.

ISSUE:
Whether or not the City of Manila should be held liable as the incident happened on a
NATIONAL highway

RULING:

YES.

The question to be determined is if present case is governed by Section 4 of Republic

Act No. 409 (Charter of the City of Manila) reading:

The city shall not be liable or held for damages or injuries to persons or property arising
from the failure of the Mayor, the Municipal Board, or any other city officer, to enforce
the provisions of this chapter, or any other law or ordinance, or from negligence of said
Mayor, Municipal Board, or other officers while enforcing or attempting to enforce said
provisions or by Article 2189 of the Civil Code of the Philippines which provides:

Provinces, cities and municipalities shall be liable for damages for the death of, or
injuries suffered by, any person by reason of defective conditions of road, streets,
bridges, public buildings, and other public works under their control or supervision.
Manila maintains that the former provision should prevail over the latter, because
Republic Act 409, is a special law, intended exclusively for the City of Manila, whereas
the Civil Code is a general law, applicable to the entire Philippines.

The Court of Appeals, however, applied the Civil Code, and, we think, correctly. It is true
that, insofar as its territorial application is concerned, Republic Act No. 409 is a special
law and the Civil Code a general legislation; but, as regards the subject-matter of the
provisions above quoted, Section 4 of Republic Act 409 establishes a general rule
regulating the liability of the City of Manila for: “damages or injury to persons or
property.

Upon the other hand, Article 2189 of the Civil Code constitutes a particular prescription
making “provinces, cities and municipalities liable for damages for the death of, or injury
suffered by any person by reason” — specifically — “of the defective condition of roads,
streets, bridges, public buildings, and other-public works under their control or
supervision.”

In other words, said section 4 refers to liability arising from negligence, in general,
regardless of the object thereof, whereas Article 2189 governs liability due to “defective
streets,” in particular. Since the present action is based upon the alleged defective
condition of a road, said Article 2189 is decisive thereon.

Teotico alleged in his complaint his injuries were due to the defective condition of a
street which is “under the supervision and control” of the City. In its answer to the
amended complaint, the City, in turn, alleged that “the streets aforementioned were and
have been constantly kept in good condition and regularly inspected and the storm
drains and manholes thereof covered by the defendant City and the officers concerned”
who “have been ever vigilant and zealous in the performance of their respective
functions and duties as imposed upon them by law.“ Thus, the City had, in
effect, admitted that P. Burgos Avenue was and is under its control and supervision.

Moreover, the assertion to the effect that said Avenue is a national highway was made,
for the first time, in its MR of the decision of the Court of Appeals.

Such assertion raised, therefore, a question of fact, which had not been put in issue in
the trial court, and cannot be set up, for the first time, on appeal, much less after the
rendition of the decision of the appellate court, in a motion for the reconsideration
thereof.

At any rate, under Article 2189 of the Civil Code, it is not necessary for the liability
therein established to attach that the defective roads or streets belong to the province,
city or municipality from which responsibility is exacted. What said article requires is that
the province, city or municipality have either “control or supervision” over said street
or road. Even if P. Burgos Avenue were, therefore, a national highway, this
circumstance would not necessarily detract from its “control or supervision” by the City
of Manila, under Republic Act 409. In fact, Section 18(x) thereof provides:
Sec. 18. Legislative powers. — The Municipal Board shall have the following legislative
powers:

Subject to the provisions of existing law to provide for the laying out,
construction and improvement, and to regulate the use of streets, avenues, alleys,
sidewalks, wharves, piers, parks, cemeteries, and other public places; to provide for
lighting, cleaning, and sprinkling of streets and public places; the building and repair of
tunnels, sewers, and drains, and all structures in and under the same to provide for and
regulate cross-works, curbs, and gutters therein and regulate the use, of bridges,
viaducts and culverts to regulate the lights used on all vehicles, cars, and locomotives;

Then, again, the determination of whether or not P. Burgos Avenue is under the control
or supervision of the City of Manila and whether the latter is guilty of negligence, in
connection with the maintenance of said road, which were decided by the Court of
Appeals in the affirmative, is one of fact, and the findings of said Court there on are not
subject to our review.

WHEREFORE, the decision appealed from should be as it is hereby affirmed, with costs
against the City of Manila. It is so ordered.
[G.R. No. 226679]

SALVADOR ESTIPONA, JR. Y ASUELA, Petitioner, v. HON. FRANK E. LOBRIGO,

PRESIDING JUDGE OF THE REGIONAL TRIAL COURT, BRANCH 3, LEGAZPI
CITY, ALBAY, AND PEOPLE OF THE PHILIPPINES, Respondents.

FACTS:

Petitioner Salvador Estipona, Jr. was accused in Criminal Case No. 13586 for violation
of Section 11, Article II of R.A. No. 9165, for having illegally have in his possession
0.084 gram of shabu. Under Section 23 of R.A. No. 9165, plea-bargaining is prohibited
in all drug cases.

On June 15, 2016, he filed a Motion to Allow the Accused to Enter into a Plea
Bargaining Agreement, praying to withdraw his not guilty plea and be allowed to enter a
plea of guilty to the lesser offense of violation of Section 12 of R.A. No. 9165 (for
Possession of Drug Paraphernalia).

The trial court denied his Motion holding that Section 23 of R.A. No. 9165 expressly
prohibits plea-bargaining in drugs cases. Estipona filed a Motion for Reconsideration
which was denied by the trial court.

Arguing that Sec. 23 of RA No. 9165 is unconstitutional for it encroaches upon the
Supreme Court's rule-making power and therefore violative of the equal protection
clause, he filed a Petition before the SC to declare Sec. 23 unconstitutional.

The Solicitor General opposed the petition on the ground that (1) Congress was not
impleaded, (2) the constitutionality of the law cannot be attached collaterally, (3) the
proper action should have been a petition for relief before the RTC, and (4) the petition
fails to satisfy the requisites for judicial review.

ISSUES:

1. Whether section 23 of republic act no. 9165, which prohibits plea bargaining in all
violations of the said law, is unconstitutional for being violative of the
constitutional right to equal protection of the law.

2. Whether section 23 of republic act no. 9165 is unconstitutional as it encroached

upon the power of the supreme court to promulgate rules of procedure.
 3. Whether the regional trial court, as presided by hon. Frank e. Lobrigo, committed
grave abuse of discretion amounting to lack or excess of jurisdiction when it
refused to declare section 23 of republic act no. 9165 as unconstitutional.10

HELD:

The Supreme Court ruled:

On Matters of Technicality:

On matters of technicality, some points raised by the OSG maybe correct. Nonetheless,
without much further ado, it must be underscored that it is within this Court's power to
make exceptions to the rules of court. Under proper conditions, We may permit the full
and exhaustive ventilation of the parties' arguments and positions despite the supposed
technical infirmities of a petition or its alleged procedural flaws. In discharging its solemn
duty as the final arbiter of constitutional issues, the Court shall not shirk from its
obligation to determine novel issues, or issues of first impression, with far-reaching
implications.

Likewise, matters of procedure and technicalities normally take a backseat when issues
of substantial and transcendental importance are present. We have acknowledged that
the Philippines' problem on illegal drugs has reached "epidemic," "monstrous," and
"harrowing" proportions, and that its disastrously harmful social, economic, and spiritual
effects have broken the lives, shattered the hopes, and destroyed the future of
thousands especially our young citizens.

Bearing in mind the very important and pivotal issues raised in this petition, technical
matters should not deter Us from having to make the final and definitive pronouncement
that everyone else depends for enlightenment and guidance. When public interest
requires, the Court may brush aside procedural rules in order to resolve a constitutional
issue.

On SC's Rule-Making Power:

The power to promulgate rules of pleading, practice and procedure is now Our exclusive
domain and no longer shared with the Executive and Legislative departments.

It should be stressed that the power to promulgate rules of pleading, practice and
procedure was granted by our Constitutions to this Court to enhance its independence,
for in the words of Justice Isagani Cruz "without independence and integrity, courts will
lose that popular trust so essential to the maintenance of their vigor as champions of
justice." Hence, our Constitutions continuously vested this power to this Court for it
enhances its independence. Under the 1935 Constitution, the power of this Court to
promulgate rules concerning pleading, practice and procedure was granted but it
appeared to be co-existent with legislative power for it was subject to the power of
Congress to repeal, alter or supplement.

While the power to define, prescribe, and apportion the jurisdiction of the various courts
is, by constitutional design, vested unto Congress, the power to promulgate rules
concerning the protection and enforcement of constitutional rights, pleading, practice,
and procedure in all courts belongs exclusively to this Court.

The power of Congress (to repeal, alter or supplement the rules concerning pleading,
practice and procedure, and the admission to the practice of law in the Philippines
under Sec. 13, Art, VIII of he 1935 Constitution), however, is not as absolute as it may
appear on its surface. In In re: Cunanan, Congress in the exercise of its power to
amend rules of the Supreme Court regarding admission to the practice of law, enacted
the Bar Flunkers Act of 1953 which considered as a passing grade, the average of 70%
in the bar examinations after July 4, 1946 up to August 1951 and 71% in the 1952 bar
examinations. This Court struck down the law as unconstitutional.

The rule making power of this [1987] Court was expanded. This Court for the first time
was given the power to promulgate rules concerning the protection and enforcement of
constitutional rights. The Court was also granted for the .first time the power to
disapprove rules of procedure of special courts and quasi-judicial bodies. But most
importantly, the 1987 Constitution took away the power of Congress to repeal, alter, or
supplement rules concerning pleading, practice and procedure. In fine, the power to
promulgate rules of pleading, practice and procedure is no longer shared by this Court
with Congress, more so with the Executive. x x x.

Thus, as it now stands, Congress has no authority to repeal, alter, or supplement rules
concerning pleading, practice, and procedure.x x x. The separation of powers among
the three co-equal branches of our government has erected an impregnable wall that
keeps the power to promulgate rules of pleading, practice and procedure within the sole
province of this Court. The other branches trespass upon this prerogative if they enact
laws or issue orders that effectively repeal, alter or modify any of the procedural rules
promulgated by the Court. Viewed from this perspective, We have rejected previous
attempts on the part of the Congress, in the exercise of its legislative power, to amend
the Rules of Court (Rules).

On Plea-Bargaining:

The Supreme Court's sole prerogative to issue, amend, or repeal procedural rules is
limited to the preservation of substantive rights, i.e., the former should not diminish,
increase or modify the latter. "Substantive law is that part of the law which creates,
defines and regulates rights, or which regulates the right and duties which give rise to a
cause of action; that part of the law which courts are established to administer; as
opposed to adjective or remedial law, which prescribes the method of enforcing rights or
obtain redress for their invasions." Fabian v. Hon. Desierto laid down the test for
determining whether a rule is substantive or procedural in nature.

In determining whether a rule prescribed by the Supreme Court, for the practice and
procedure of the lower courts, abridges, enlarges, or modifies any substantive right, the
test is whether the rule really regulates procedure, that is, the judicial process for
enforcing rights and duties recognized by substantive law and for justly administering
remedy and redress for a disregard or infraction of them. If the rule takes away a vested
right, it is not procedural. If the rule creates a right such as the right to appeal, it may be
classified as a substantive matter; but if it operates as a means of implementing an
existing right then the rule deals merely with procedure.

Does Sec. 23, RA 9165 Violate the Equal Protection Clause?

At this point, We shall not resolve the issue of whether Section 23 of R.A. No. 9165 is
contrary to the constitutional right to equal protection of the law in order not to preempt
any future discussion by the Court on the policy considerations behind Section 23 of
R.A. No. 9165. Pending deliberation on whether or not to adopt the statutory provision
in toto or a qualified version thereof, we deem it proper to declare as invalid the
prohibition against plea bargaining on drug cases until and unless it is made part of the
rules of procedure through an administrative circular duly issued for the purpose.

WHEREFORE, the petition for certiorari and prohibition is GRANTED. Section 23 of

Republic Act No. 9165 is declared unconstitutional for being contrary to the rule-making
authority of the Supreme Court under Section 5(5), Article VIII of the 1987 Constitution.

SO ORDERED.
[G.R. No. L-11555]
THE UNITED STATES, Plaintiff-Appellee, v. GABINO SOLIMAN, Defendant-
Appellant.
FACTS:

Soliman, testifying in his on behalf in the course of another criminal case in which he,
with several others, was charged with estafa, swore falsely to certain material
allegations of fact. He testified falsely that a sworn statement offered in evidence in
support of the charge of estafa, which was in effect an extrajudicial confession of his
guilt, had not been executed voluntarily, and that its execution had not been procured
by the police by the use of force, intimidation and prolonged torture. The trial judge who
presided in the former case acquitted him on the ground that there was room for
reasonable doubt. Soliman is however, guilty of perjury as defined and penalized in
Section 3 of Act No. 1697. However, since judgement was entered on November 1915,
section 3 of Act No. 1697 was expressly repealed by the enactment of the
Administrative Code which was effective on july 1, 1916 and it has been suggested that
the judgement convicting and sentencing the accused under the provisions of that
statute should not be sustained and the repeal of the statute should be held to have the
effect of remitting and extinguishing the criminal liability of the accused incurred under
the provisions of the repealed law prior to the enactment of the Administrative Code.

ISSUES:

1. Whether or not the repeal of Section 3 of Act No. 1697 by the enactment of the
Administrative code had the effect of providing new and distinct penalties for the
commission of the crime of perjury.

2. Whether or not the new penalties are more favorable to the convict in the case at bar
than those imposed by the trial judge.

RULING:

(1) Section 3 of Act No. 1697, which defined and penalized the crime of perjury,
repealed the provisions of the Penal Code defining and penalizing the crime of perjury,
not expressly, but by implication, and we are of opinion that the repeal of Act No. 1697
revived those provisions of the code. The old rule continues in force where a law which
repeals a prior law, not expressly but by implication, it itself repealed; and that in such
cases the repeal of the repealing law revives the prior law, unless the language of the
repealing statute provides otherwise. In the case at bar, the express repeal of section 3
of Act No. 1697 by the enactment of the Administrative Code (Act No. 2657) revived the
provisions of the Penal Code touching perjury, which were themselves repealed, not
expressly but by implication, by the enactment of Act No. 1697.

(2) The penalties prescribed in the Penal Code is less than that imposed in Section 3 of
Act No. 1697.
Hence, the penalty imposed by the court below must be revoked and the penalty
prescribed in the Penal Code should be imposed.
[G.R. No. 109404]
FLORENCIO EUGENIO, doing business under the name E & S Delta
Village, Petitioner, v. EXECUTIVE SECRETARY FRANKLIN Y. DRILLON, HOUSING
AND LAND USE REGULATORY BOARD (HLURB) AND PROSPERO
PALMIANO, Respondents.

FACTS:
Prospero Palmiano (Palmiano) purchased on installment 2 lots in E&S Delta Village in
QC from Florencio Eugenio (Eugenio) and his co-owner, Fermin Salazar. Due to non-
development of the subdivision, Delta Village Homeowners Association filed a case with
the National Housing Authority, which rendered a resolution ordering Eugenio to stop
selling more lots on the village and any other projects owned by him.
In view of the above resolution and non-development of the village, Palmiano
suspended payments for the said lots, to which Eugenio sold one of it to Spouses
Relevo, I whose favor the said property was registered. Palmiano prayed with the
Human Settlements Regulatory Commission (HSRC) for the annulment of sale to
Spouses Relevo and re conveyance of the property to him.
HSRC ruled in favor Eugenio and dismissed Palmiano’s complaint On appeal,
Commission Proper of HSRC revered the previous decision, and applied PD 957
ordering Eugenio to complete the development of the village and reinstate the purchase
contract over one lot and for the other lot, to immediately refund to Palmiano all
payments made there on plus legal interest from date of receipt hereof until fully paid.
On appeal, the Executive Secretary affirmed the decision and denied subsequent MR of
Eugenio for lack of merit and having filed past deadline. Eugenio filed a motion for
review before the SC, averring that the Executive Secretary erred in applying PD 957,
as the purchase agreement was entered in 1972 before the effectivity of PD 957 in
1976, and justifying Palmiano’s nonpayment for non-development of the village.
ISSUE:
Whether or not PD 957 should have retroactive effect.
RULING:
Yes. Even if PD 957 did not expressly provide for its retroactivity, the same can be
inferred from the intent of the law as shown in its preamble.
"WHEREAS, it is the policy of the State to afford its inhabitants the requirements of
decent human settlement and to provide them with ample opportunities for improving
their quality of life;
"WHEREAS, numerous reports reveal that many real estate subdivision owners,
developers, operators, and/or sellers have reneged on their representations and
obligations to provide and maintain properly subdivision roads, drainage, sewerage,
water systems, lighting systems, and other similar basic requirements, thus
endangering the health and safety of home and lot buyers;
"WHEREAS, reports of alarming magnitude also show cases of swindling and
fraudulent manipulations perpetrated by unscrupulous subdivision and condominium
sellers and operators, such as failure to deliver titles to the buyers or titles free from
liens and encumbrances, and to pay real estate taxes, and fraudulent sales “The intent
of a statute is the law. The intent is the vital part, the essence of the law, and the
primary rule of construction is to ascertain and give effect to the intent. The intention of
the legislature in enacting a law is the law itself and must be enforced when
ascertained, although it may not be consistent with the strict letter of the statute. Courts
will not follow the letter of a statute when it leads away from the true intent and purpose
of the legislature and to conclusions inconsistent with the general purpose of the act. In
construing statutes, the proper course is to start out and follow the true intent of the
legislature and to adopt that sense which harmonizes best with the context and
promotes in the fullest manner the apparent policy and objects of the legislature.”
WHEREFORE, there being no showing of grave abuse of discretion, the petition is
DENIED due course and is hereby DISMISSED. No costs.

SO ORDERED.
[G.R. No. 85869]

THE NATIONAL IRRIGATION ADMINISTRATION (NIA), represented

by the Project Manager, Magat River Multi-Purpose
Project, Petitioner, v. ESTANISLAO GAMIT AND THE HONORABLE
COURT OF APPEALS, Respondents.

FACTS:
Estanislao Gamit filed with the RTC of Roxas Isabela, Branch XXIII, a complaint against
the defendant National Irrigation Administration for reformation of contract, recovery of
possession and damages, that defendant is in charge of the implementation of the
Irrigation Program of the national government to increase food production nationwide,
after some negotiations were made, entered into a CONTRACT OF LEASE, over
plaintiff's urban parcel of land
An undivided portion of twenty-five thousand (25,000) square meters... more or less,
and forming part of that parcel of land with a total area of thirty thousand and five
(30,005) square meters funded by a multi-billion loan from the world bank
For a consideration or rental in the sum of ten centavos (P0.10) per square meter, per
year, for ten (10) years, from date of execution of the instrument, for the use by
defendant on which to construct the Administration Building and other facilities for
Division III, Magat River Multi-Purpose Project at San Manuel, Isabela.
That in at least three paragraphs, (4, 8, 9) of the contract of lease the defendant surrep-
titiously inserted, the following stipulations, situated at the poblacion (Centro), San
Manuel, Isabela further negotiations followed, and a document denominated as
'AGREEMENT' was prepared by herein defendant for the signature of plaintiff and the
latter and his wife signed the same, with one Engr. Antonio A. Ramos, then the Chief of
Division III, MRMP, San Manuel, Isabela, signing as an instrumental witness; for
reasons known only to the Asst. Project Manager the whole rental of the leased
premises was offered to be paid by the defendant and the plaintiff being then in need of
cash, as he was then in financial distress accepted the offer, and finally received the
whole amount in a letter defendant notified the former, of the election to purchase the
leased premises, allegedly in accordance with stipulation No. 8 quoted above and
contained in the contract of lease.
The contract of lease entered into, by and between herein plaintiff and defendant does
not express the real agreement or intention of the parties, as there was error or mistake
of fact on the part of plaintiff, aggravated by his state of financial distress at the time the
contract was signed, and herein defendant acted fraudulently or inequitably exercising
undue influence over plaintiff on account of the latter's financial distress
That the real agreement or intention of the parties was only for the lease of the twenty
five (25,000) thousand square meters by defendant at the rate of P0.10 centavos per
square meter, for a period of ten (10) years from date of execution with the right of...
defendant to purchase the area upon the termination of the lease, on a price certain or
consideration to be negotiated and agreed upon, by and between the parties after the
lapse of the ten (10) year period the document was not however signed by him, for
which reason, the contract of lease was not perfected defendant acted fraudulently and
inequitably, taking advantage of the financial distress of herein plaintiff, when it caused
the unlawful insertion of the stipulation contained in paragraphs 4, 8 and 9 quoted
above, in the contract of lease, and the same are all contrary to law and void ab-initio,
because the fixing of the price of the land to be purchased can never be left to the
discretion or will of one of the contracting parties; and in this case, it was defendant
alone who determined the price and if this is so, then the validity or compliance of the
contract cannot be demanded by herein defendant, for the reason that a contract of
sale, is essentially bilateral in character he fair and reasonable price or market value of
the land in suit which is an urban land Poblacion or Centro of the town of San Manuel,
this province, is no less than Fifty Pesos (P50.00) per square meter as agreed upon, the
area to be leased is only twenty five (25,000) thousand square meters, as evidenced by
the encumbrance registered at the back of TCT No. T-85689, in the name of plaintiff
leaving a portion of five (5,000) thousand square meters, as free from the lien and
encumbrance after the lease contract was executed and registered, herein defendant
fenced the area leased, but in the process, the latter stealthily and surreptitiously
expanded its occupation and it included the remaining portion of five (5,000) thousand
square... meters, unencumbered, as evidenced by a relocation survey conducted by
one Geodetic Engineer Apolinar P. Alvarez in the premises plaintiff failed to realize the
expected income stated in the immediately preceding paragraph due to the unlawful
occupation of the area by defendant since the year 1975 to the present, and despite
repeated demands, the defendant refuses to deliver the possession of the encroached
portion of 5,000 square meters to the plaintiff, with accounting of its corresponding
produce, up to the present; however, should defendant desires to purchase the
remaining portion of 5,000 square meters, plaintiff offers a price of no less than
P50.00 per square meter which is the fair and reasonable market value of the land... for
the fraudulent and inequitable acts committed by defendant, plaintiff is entitled to actual
or compensatory damages representing unrealized income of the 5,000 square meters
encroached portion, which is estimated to be no less than 25 cavans of palay (25% of
100 as rental per crop, for three (3) cropping’s a year), or a total of 75 cavans per year
and/or a grand total of 750 cavans of palay at 46 kilos per cavan for ten (10) years, at
the current price of P3.50 per kilo; and entitled to nominal or temperate damages... in
the sum of P30,000.00 plus moral and exemplary damages of no less than P60,000.00
for the public good... prayed
That defendant admits the allegations in paragraph 2 of the complaint
That defendant admits the allegations in paragraph 3... but it specifically denies the rest
of the allegation therein, more specifically that... plaintiff's land is urban land, the fact of
the matter being that it is rice land at the time NIA took possession of the same
The plaintiff seasonably filed a reply to the defendant's answer, after which, the case
was set for pre-trial.
After the pre-trial, the court a quo as there is no genuine issue of material fact this case
could be decided by way of summary judgment pursuant to Sec. 3, Rule 20 of the Rules
of Court which provides as follows
That the issue in this case, is a question of law not a question of fact because it involved
the interpretation of the contract between the parties only. Therefore, there is no
genuine issue of material fact to be determined by the court in a trial on the merits and...
the case may be decided by way of summary judgment under Sec. 3, Rule 20 of the
Rules of Court
1. That the contract is denominated as contract of lease with the right to purchase and
not a deed of sale;
2. That the contract stipulated a period of ten (10) years from June 6, 1975 the date
when it was executed to June 6, 1985;
3. That the defendant has an option to buy the property.
Hence, there is no need to reform the agreement. First, because it has already expired
and second, the contract is very clear that it is only a contract of lease with option or
right to purchase. However, the agreement or stipulation that should... the defendant
exercise its option to buy the amount of P25,000.00 paid as rental should be considered
null and void as if there is no such agreement between the parties for it being illegal.
Dissatisfied, the defendant appealed to the Court of Appeals judgment appealed from is
AFFIRMED with the following modifications:
1. That in case the defendant would exercise its option to buy under the contract,
the total purchase price of the two and one-half hectares is P25,000.00; and
2. The amount of attorney's fees is reduced to P30,000.00.
The present petition for review on certiorari of the decision of the Court of Appeals
In order that an action for reformation of instrument as provided in Article 1359 of the
Civil Code may prosper, the following requisites must concur: (1) there must have been
a meeting of the minds of the parties to the contract; (2) the instrument does not
express the true intention of the parties; and (3) the failure of the instrument to express
the true intention of the parties is due to mistake, fraud, inequitable conduct or accident.

Issues:
1. Whether or not the court of appeals has properly interpreted the contract.
2. Whether or not the stipulation in the contract that rentals paid shall be considered
part of the purchase price is null and void, being pactum commissorium.
3. Whether or not the court of appeals erred in awarding damages and attorney's
fees.
RULING:
A contract, according to Article 1305 of the Civil Code, "is a meeting of the minds
between two persons whereby one binds himself, with respect to the other, to give
something or to render some service." Once the minds of the contracting parties meet, a
valid contract exists, whether it is reduced to writing or not.
And, when the terms of an agreement have been reduced to writing, it is considered as
containing all the terms agreed upon and there can be, between the parties and their
successors in interest, no evidence of such terms other than the contents of the written
agreement, except when it fails to express the true intent and agreement of the parties
thereto.
In which case, one of the parties may bring an action for the... reformation of the
instrument to the end that such true intention may be expressed.
Otherwise stated, the complaint at bar alleges that the contract of lease with right to
purchase does not express the true intention and agreement of the parties thereto due
to mistake on the part of the plaintiff and fraud on the part of the defendant by unlawfully
inserting the stipulations contained in paragraphs 4, 8 and 9 in said contract of lease.
As a general rule, parole evidence is not admissible for the purpose of varying the terms
of a contract. However, when the issue that a contract does not express the intention of
the parties and the proper foundation is laid therefor -- as in the present case -- the
court should hear the evidence for the purpose of ascertaining the true intention of the
parties we hold that the trial court erred in holding that the issue in this case is a
question of law and not a question of fact because it merely involves the interpretation
of the contract between the parties. The lower court erred in not conducting a trial for
the purpose of determining the true intention of the parties. It failed to appreciate the
distinction between interpretation and reformation of contracts. While the aim in
interpretation of contracts is to ascertain the true intention of the parties, interpretation is
not, however, equivalent to reformation of contracts.
"Interpretation" is the act of making intelligible what was before not understood,
ambiguous, or not obvious. It is a method by which the meaning of language is
ascertained.
The "interpretation" of a contract is the determination of the meaning attached to the
words written or spoken which make the contract. On the other hand, "reformation" is
that remedy in equity by means of which a written instrument is made or construed so
as to express or conform to the real intention of the parties.
In granting reformation, therefore, equity is not really making a new contract for the
parties, but is confirming and perpetuating the real contract between the parties which,
under the technical rules of law, could not be enforced but for such reformation.
In the case at bar raises the issue that the contract of lease does not express the true
intention or agreement of the parties due to mistake on the part of the plaintiff and fraud
on the part of the defendant
The court a quo should have conducted a trial and received the evidence of the parties
for the purpose of ascertaining the true intention of the parties when they executed the
instrument in question.
The decision of the trial court dated 20 March 1986 as well as the decision of the Court
of Appeals dated 14 November 1988 are hereby SET ASIDE and the case should be,
as it is hereby, REMANDED to the court of origin for further proceedings in accordance
with this decision.