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Republic of the Philippines SUPREME COURT Manila EN BANC G.R. No.

L-4268 January 18, 1951

The questions that emerge from these facts and the arguments are: Did Judge Ramos have authority to dismiss case No. 12263 at the stage when it was thrown out of court? Should the Manila Herald Publishing Co., Inc., and Printers, Inc., come as intervernors into the case for libel instead of bringing an independent action? And did Judge Pecson or Judge Ramos have jurisdiction in case No. 12263 to quash the attachment levied in case No. 11531? In case No. 12263, it should be recalled, neither a motion to dismiss nor an answer had been made when the decision under consideration was handed down. The matter then before the court was a motion seeking a provisional or collateral remedy, connected with and incidental to the principal action. It was a motion to dissolve the preliminary injunction granted by Judge Pecson restraining the sheriff from proceeding with the attachment in case No. 11531. The question of dismissal was suggested by Judge Ramos on a ground perceived by His Honor. To all intents and purposes, the dismissal was decreed by the court on its own initiative. Section 1 Rule 8 enumerates the grounds upon which an action may be dismissed, and it specifically ordains that a motion to this end be filed. In the light of this express requirement we do not believe that the court had power to dismiss the case without the requisite motion duly presented. The fact that the parties filed memoranda upon the court's indication or order in which they discussed the proposition that the action was unnecessary and was improperly brought outside and independently of the case for libel did not supply deficiency. Rule 30 of the Rules of Court provides for the cases in which an action may be dismissed, and the inclusion of those therein provided excludes any other, under the familiar maxim, inclusio unius est exclusio alterius. The only instance in which, according to said Rules, the court may dismiss upon the court's own motion an action is, when the "plaintiff fails to appear at the time of the trial or to prosecute his action for an unreasonable length of time or to comply with the Rules or any order of the court." The Rules of Court are devised as a matter of necessity, intended to be observed with diligence by the courts as well as by the parties for the orderly conduct of litigation and judicial business. In general, it is compliance with these rules which gives the court jurisdiction to act. We are the opinion that the court acted with grave abuse of discretion if not in excess of its jurisdiction in dismissing the case without any formal motion to dismiss. The foregoing conclusions should suffice to dispose of this proceeding for certiorari, but the parties have discussed the second question and we propose to rule upon it if only to put out of the way a probable cause for future controversy and consequent delay in the disposal of the main cause. Section 14 of rule 59, which treats of the steps to betaken when property attached is claimed by the other person than that defendant or his agent, contains the proviso that "Nothing herein contained shall prevent such third person from vindicating his claim to the property by any proper action." What is "proper action"? Section 1 of Rule 2 defines action as "an ordinary suit in court of justice, by which one party prosecutes another for the enforcement or protection of a right, or the prevention or redress of a wrong," while section 2, entitled "Commencement of Action," says that "civil action may be commenced by filing a complaint with the court." "Action" has acquired a well-define, technical meaning, and it is in this restricted sense that the word "action" is used in the above rule. In employing the word "commencement" the rule clearly indicates an action which originates an entire proceeding and puts in motion the instruments of the court calling for summons, answer, etc, and not any intermediary step taken in the course of the proceeding whether by the parties themselves or by a stranger. It would be strange indeed if the framers of the Rules of Court or the Legislature should have employed the term "proper action" instead of "intervention" or equivalent expression if the intention had been just that. It was all the easier, simplier and the more natural to say intervention if that had been the purpose, since the asserted right of the third-party claimant necessarily grows out of the pending suit, the suit in which the order of attachment was issued. The most liberal view that can be taken in favor of the respondents' position is that intervention as a means of protecting the third-party claimants' right is not exclusive but cumulative and suppletory to the right to bring a new, independent suit. It is significant that there are courts which go so far as to take the view that even where the statute expressly grants the right of intervention is such cases as this, the statute does not extend to owners of property attached, for, under this view, "it is considered that the ownership is not one of the essential questions to be determined in the litigation between plaintiff and defendant;" that "whether the property belongs to defendant or claimant, if determined, is considered as shedding no light upon the question in controversy, namely, that defendant is indebted to plaintiff."

MANILA HERALD PUBLISHING CO., INC., doing business under the name of Evening Herald Publishing Co., Inc., and Printers, Inc., petitioner, vs. SIMEON RAMOS, Judge of the Court of First Instance of Manila, MACARIO A. OFILADA, Sheriff of City of Manila, ANTONIO QUIRINO and ALTO SURETY AND INSURANCE CO., INC., respondents. Edmundo M. Reyes and Antonio Barredo for petitioners. Bausa and Ampil for respondents. TUASON, J.: This is a petition for "certiorari with preliminary injunction" arising upon the following antecedents: Respondent Antonio Quirino filed a libel suit, docketed as civil case No. 11531, against Aproniano G. Borres, Pedro Padilla and Loreto Pastor, editor, managing editor and reporter, respectively, of the Daily Record, a daily newspaper published in Manila, asking damages aggregating P90,000. With the filing of this suit, the plaintiff secureda writ of preliminary attachment upon putting up a P50,000 bond, and the Sheriff of the City of Manila levied an attachment upon certain office and printing equipment found in the premises of the Daily Record. Thereafter the Manila Herald Publishing Co. Inc. and Printers, Inc., filed with the sheriff separate third-party claims, alleging that they were the owners of the property attached. Whereupon, the sheriff required of Quirino a counter bound of P41,500 to meet the claim of the Manila Herald Publishing Co., Inc., and another bond of P59,500 to meet the claim of Printers, Inc. These amounts, upon Quirino's motion filed under Section 13, Rule 59, of the Rules of Court, were reduced by the court to P11,000 and P10,000 respectively. Unsuccessful in their attempt to quash the attachment, on October 7, 1950, the Manila Herald Publishing Co., Inc. and Printers, Inc. commenced a joint suit against the sheriff, Quirino and Alto Surety and Insurance Co. Inc., in which the former sought (1) to enjoin the defendants from proceeding with the attachment of the properties above mentioned and (2) P45,000 damages. This suit was docketed as civil case No. 12263. Whereas case No. 11531 was being handled by Judge Sanchez or pending in the branch of the Court presided by him, case No. 12263 fell in the branch of Judge Pecson. On the same date, in virtue of an ex parte motion in case No. 12263 by the Manila Herald Publishing Co. Inc., and Printers, Inc., Judge Pecson issued a writ of preliminary injunction to the sheriff directing him to desist from proceeding with the attachment of the said properties. After the issuance of that preliminary injunction, Antonio Quirino filed an ex parte petition for its dissolution, and Judge Simeon Ramos, to whom case No. 12263 had in the meanwhile been transferred, granted the petition on a bond of P21,000. However Judge Ramos soon set aside the order just mentioned on a motion for reconsideration by the Manila Herald Publishing Co. Inc. and Printer, Inc. and set the matter for hearing for October 14, then continued to October 16. Upon the conclusion of that hearing, Judge Ramos required the parties to submit memoranda on the question whether "the subject matter of civil case No. 12263 should be ventilated in an independent action or by means of a complaint in intervention in civil case No. 11531." Memoranda having been filed, His Honor declared that the suit, in case No. 12263, was "unnecessary, superfluous and illegal" and so dismissed the same. He held that what Manila Herald Publishing Co., Inc., and Printers, Inc., should do was intervene in Case No. 11531.

(See 7 C. J. S., 545 and footnote No. 89 where extracts from the decision in Lewis vs. Lewis, 10 N. W., 586, a leading case, are printed.) Separate action was indeed said to be the correct and only procedure contemplated by Act No. 190, intervention addition to, but not in substitution of, the old process. The new Rules adopted section 121 of Act No. 190 and added thereto Rule 24 (a) of the Federal Rules of Procedure. Combined, the two modes of redress are now section 1 of Rule 13,1 the last clause of which is the newly added provision. The result is that, whereas, "under the old procedure, the third person could not intervene, he having no interest in the debt (or damages) sued upon by the plaintiff," under the present Rules, "a third person claiming to be the owner of such property may, not only file a third-party claim with the sheriff, but also intervene in the action to ask that the writ of attachment be quashed." (I Moran's Comments on the Rules of Court, 3rd Ed., 238, 239.) Yet, the right to inetervene, unlike the right to bring a new action, is not absolute but left to the sound discretion of the court to allow. This qualification makes intervention less preferable to an independent action from the standpoint of the claimants, at least. Because availability of intervention depends upon the court in which Case No. 11531 is pending, there would be assurance for the herein petitioners that they would be permitted to come into that case. Little reflection should disabuse the mind from the assumption that an independent action creates a multiplicity of suits. There can be no multiplicity of suits when the parties in the suit where the attachment was levied are different from the parties in the new action, and so are the issues in the two cases entirely different. In the circumstances, separate action might, indeed, be the more convenient of the two competing modes of redress, in that intervention is more likely to inject confusion into the issues between the parties in the case for debt or damages with which the third-party claimant has nothing to do and thereby retard instead of facilitate the prompt dispatch of the controversy which is underlying objective of the rules of pleading and practice. That is why intervention is subject to the court's discretion. The same reasons which impelled us to decide the second question, just discussed, urge us to take cognizance of and express an opinion on the third.

be, of the prayer for the dissolution of the attachment would be a proper subject of a new proceeding if the party adversely affected should be dissatisfied. The petition for certiorari is granted with costs against the respondents except the respondent Judge. Moran, C.J., Paras, Feria, Pablo, Bengzon, Padilla, Montemayor, Reyes, Jugo and Bautista Angelo, JJ., concur.

Footnotes
1

SECTION 1. When proper. A person may, at any period of a trial, be permitted by the court, in its discretion, to intervene in an action, if he has legal interest in the matter in litigation, or in the success of either of the parties, or an interest against both, or when he is so situated as to be adversely affected by a distribution of other disposition of property in the custody of the court or of an officer thereof. Republic of the Philippines SUPREME COURT Manila EN BANC G.R. No. L-21488 October 14, 1968

The objection that at once suggests itself entertaining in Case No. 12263 the motion to discharge the preliminary attachment levied in case No. 11531 is that by so doing one judge would intefere with another judge's actuations. The objection is superficial and will not bear analysis. It has been seen that a separate action by the third party who claims to be the owner of the property attached is appropriate. If this is so, it must be admitted that the judge trying such action may render judgment ordering the sheriff of whoever has in possession the attached property to deliver it to the plaintiff-claimant or desist from seizing it. It follows further that the court may make an interlocutory order, upon the filing of such bond as may be necessary, to release the property pending final adjudication of the title. Jurisdiction over an action includes jurisdiction over a interlocutory matter incidental to the cause and deemed necessary to preserve the subject matter of the suit or protect the parties' interests. This is self-evident. The fault with the respondents' argument is that it assumes that the Sheriff is holding the property in question by order of the court handling the case for libel. In reality this is true only to limited extent. That court did not direct the sheriff to attach the particular property in dispute. The order was for the sheriff to attach Borres', Padilla's and Pastor's property. He was not supposed to touch any property other than that of these defendants', and if he did, he acted beyond the limits of his authority and upon his personal responsibility. It is true of course that property in custody of the law can not be interferred with without the permission of the proper court, and property legally attached is property in custodia legis. But for the reason just stated, this rule is confined to cases where the property belongs to the defendant or one in which the defendant has proprietary interest. When the sheriff acting beyond the bounds of his office seizes a stranger's property, the rule does not apply and interference with his custody is not interference with another court's order of attachment. It may be argued that the third-party claim may be unfounded; but so may it be meritorious, for the matter. Speculations are however beside the point. The title is the very issue in the case for the recovery of property or the dissolution of the attachment, and pending final decision, the court may enter any interlocutory order calculated to preserve the property in litigation and protect the parties' rights and interests. None of what has been said is to be construed as implying that the setting aside of the attachment prayed for by the plaintiffs in Case No. 12263 should be granted. The preceding discussion is intended merely to point out that the court has jurisdiction to act in the premises, not the way the jurisdiction should be exercised. The granting or denial, as the case may

LUCILA DE LA PAZ, petitioner, vs. COURT OF AGRARIAN RELATIONS and MARCOS PAPAG, respondents. MAKALINTAL, J.: Availing of the right provided for in section 14 of the Republic Act No. 1199, as amended, which reads: Sec. 14. Change of system. The tenant shall have the right to change the tenancy contract to leasehold tenancy and vice versa and from one crop-sharing arrangement to another of the share tenancy. If the share tenancy contract is in writing and is duly registered, the right may be exercised at the expiration of the period of the contract. In the absence of any written contract, the right may be exercised at the end of the agricultural year. In both cases the change to the leasehold system shall be effective one agricultural year after the tenant has served notice of his intention to change upon the landholder. respondent Marcos Papag tenant under the share system of a 3- hectare riceland situated in barrio Tagapo, Sta. Rosa, Laguna sent a letter to the landowner (herein petitioner Lucila de la Paz) on February 16, 1962, informing the latter of his desire to change their tenancy relation to leasehold. Said notice was admittedly received by petitioner on February 19, 1962. The landowner demurred. Instead of agreeing to the tenant's proposal, Lucila de la Paz filed on March 7, 1962 a petition with the Court of Agrarian Relations, Fifth Regional District, Sta. Cruz, Laguna (CAR Case No. 856),praying that court to order and cause confrontation of the parties before said court of "arbitration". In his answer the tenant prayed that the petition be dismissed on the ground that it had been filed mainly to delay the change sought by him. While CAR Case No. 856 was pending, petitioner filed on September 17, 1962 another case before the same court against the same tenant (CAR Case No. 1002). This time petitioner sought to eject the tenant from his landholding on the ground that the latter had deliberately failed to deliver to the former her share of the rice crop in the harvest of August 1962.

At the joint hearing of the two cases on March 12, 1963, the parties entered into a partial stipulation of facts in which they recognized "that the only disputes between the parties are (1) the constitutionality of section 14 of Republic Act 1199 and (2) if said provision of law is held constitutional, then the rental that shall be determined by the Court based on the evidence to be submitted by the parties." In a decision dated March 22, 1963 the Court of Agrarian Relations, after upholding the constitutionality of section 14 of Republic Act 1199, dismissed the two cases against the tenant and declared the relation between him and the landowner to be that of leasehold effective April of 1962, the start of the agricultural season for the second (panahon) crop.1 Respondent court likewise fixed separate rentals for each crop period as follows: for the palagadcrop, at 13- cavans of palay; and for the panahon crop, at 18 cavans of palay, said rentals to be paid to the landowner within ten (10) days from the threshing of the crop or in accordance with future adjustments that maybe made in consonance with law. Her motion to reconsider the decision having been denied, Lucila de la Paz appealed to this Court by way of a petition for certiorari, with an application for a writ of preliminary injunction. On August 8, 1963 we issued the writ prayed for, restraining respondents from issuing a writ of execution in CAR Cases Nos. 856 and 1002. The question as to the constitutionality of section 14 of Republic Act No. 1199, pleaded anew by petitioner in this appeal, is a settled one. The validity of said provision has been repeatedly upheld by this Court in many previous cases 2 and we do not consider it necessary to elaborate further on that matter. Very recently3 this Court reaffirmed its ruling. Another question raised by petitioner refers to the lower court's classification of the land worked by the tenant as second class land, on the basis of its average production per hectare, computed according to the normal average harvest for the three (3) preceding agricultural years.4 Petitioner contends that this method of computation is erroneous since the latter part of section 46(a) of Republic Act 11995 merely speaks of years, not agricultural years, so that if two crops are raised during a given calendar year, both should be taken together in computing the production for one year to serve as basis in determining the land's productivity for purposes of classification under the law. The issue boils down to what the law means when it speaks of "years". Does the term refer to calendar or to agricultural years? If to the first, all the crops produced during one calendar year have to be added together, and the average for three such years is the measure of productivity. But if the word "years" means agricultural years, every crop represents one year, and the average of three such crops should be used as basis to determine productivity. In this connection it may be noted that in rice share tenancy the classification of ricelands into first or second class is determined on the basis of the normal average produce per hectare for the three agricultural years next preceding the current harvest: ricelands yielding an average of more than forty cavans are considered as first class, while those which yield less are considered as second class(secs. 32-33, Republic Act No. 1199). We see no reason, and none has been advanced in this case, why the classification of ricelands under the leasehold system should be on a different basis. The use of the word "years" instead of "agricultural years" as in the case of share tenancy, does inject some vagueness as to the legislative intention on the point, but the logic of the situation convinces us that no change was actually intended. This interpretation finds support in that portion of sec. 46(a) of Republic Act No. 1199 which specially refers to rentals to be paid by the lease tenant: (a) The fixed consideration for the use of ricelands, shall not be more than the equivalent of twenty five per centum in case of first class lands and twenty per centum in case of second class lands of the average gross produce, after deducting the same amount of palay used as seed and the cost of harvesting and threshing of the past three normal harvests. This time the consideration declared by law as rentals for the use of ricelands is computed on the basis of the past three normal harvests, without any qualification. Obviously, whether there be one or two harvests in one calendar year is immaterial: in either case the average for three harvests, after the corresponding deductions, is the basis for computing the rental. The present classification of petitioner's riceland as second class, based as it is on the yield for three previous agricultural years, does not preclude a re-classification in the future, depending upon the corresponding increase in yield for any subject period. The rentals fixed by the trial court are subject to the qualification "that, if the landholder introduced improvements on

the farm which increase its productivity, he may demand for an increase in the rental proportionate to the increase in production resulting from such improvements (and that) in case of disagreement the court shall determine the reasonable increase in rental."6 In fixing the rentals to be paid by the tenant, the Court of Agrarian Relations adopted the following method: Since respondent produces two crops a year, namely, the palagad and the panahon crops, the produce of the latter being in variably much bigger than that of the former, we think it only fair and equitable to both parties that separate rentals be fixed for each kind of crop, one for the palagad, and another for thepanahon crop, especially as the law requires the landholder and tenant to effect an accounting "at the end of each agricultural year ... within ten days after the threshing in case of rice ..." (sec. 17 Republic Act No. 1199). A single fixed rental for both kinds of crop would be disadvantageous to the tenant at harvest time of the palagad crop, where the produce of the land is normally lesser than that of the panahon crop, and disadvantageous to the landholder at harvest time of the panahon crop, where the produce is normally much bigger. We belief the trial Court acted correctly to avoid any inequity that would result if a single rental had been fized for both kinds of crop. We find no error in the actual computation of the rent for each crop as set forth in the decision appealed from. The other points raised by petitioner would have merit only on the assumption that such computation was erroneous, and therefore cannot materially affect the conclusion herein reached. We deem it unnecessary to consider them further. WHEREFORE, the decision of the Court of Agrarian Relations is affirmed. The writ of preliminary injunction previously issued is dissolved. No pronouncement as to costs in this instance. Concepcion, C.J. Reyes, J.B.L., Dizon, Sanchez, Angeles, Fernando and Capistrano, JJ., concur. Castro, J., took no part. Zaldivar, J., is on leave.

Footnotes
1

From the evidence submitted by the parties, it appears that 3- hectare landholding of tenant Marcos Papag ordinarily yields two (2) crops a year. The first crop is called palagad and the second panahon; the former is produced from April to August and the latter from September to January, even extending to the early part of February of the following year.
2

De Ramas v. CAR, L-19555, May 29, 1964; Macasaet v. CAR, L-19750, July 17, 1964; Uichangco v. Gutierrez, L-20275-79, May 31, 1965; Gamboa v. Pallarca, L-20407, March 31, 1966; Quizon v. Ortiz, L-20905, April 30, 1966; Ilusorio v. CAR, L-20344, May 16, 1966; Reyes v. Santos, L-19961, September 14, 1966; Enriquez v. Cabangon, L-21697.
3

See Del Rosario v. De los Santos, L-20589-90, March 21, 1968.

The evidence shows that the produce of tenant Marcos Papag, starting from the palagad crop of April-August 1959 up to and including the panahon crop of September 1961-February 1962 was as follows:

Palagad crop 1958 1959 1960 70 cavans 60 cavans no evidence 1959-1960 1960-196182 1961-1962

Panahon crop ---cavans 77 cavans

1961

72 cavans

111 cavans

"Section 46(a) . . . Classification of ricelands shall be determined by productivity; first class lands being those which yield more than forty canvas per hectare and second class lands being those which yield forty cavans or less, the same to be computed upon the normal average harvest of the three preceding years . . ."
6

As scheduled, the petition for recall was filed on July 2, 1999, accompanied by an affidavit of service of the petition on the Office of the City Mayor. Pursuant to the rules of the COMELEC, copies of the petition were posted on the bulletin boards of the local COMELEC office, the City Hall, the Police Department, the public market at Libertad St. and Taft Avenue, and at the entrance of the Sta. Clara Church on P. Burgos St., all in Pasay City. Subsequently, a verification of the authenticity of the signatures on the resolution was conducted by Ligaya Salayon, the election officer for Pasay City designated by the COMELEC. Oppositions to the petition were filed by petitioner Jovito O. Claudio, Rev. Ronald Langub, and Roberto L. Angeles, alleging procedural and substantive defects in the petition, to wit: (1) the signatures affixed to the resolution were actually meant to show attendance at the PRA meeting; (2) most of the signatories were only representatives of the parties concerned who were sent there merely to observe the proceedings; (3) the convening of the PRA took place within the one-year prohibited period; (4) the election case,[2] filed by Wenceslao Trinidad in this Court, seeking the annulment of the proclamation of petitioner Claudio as mayor of Pasay City, should first be decided before recall proceedings against petitioner could be filed; and (5) the recall resolution failed to obtain the majority of all the members of the PRA, considering that 10 were actually double entries, 14 were not duly accredited members of the barangays, 40 sangguniang kabataan officials had withdrawn their support, and 60 barangay chairs executed affidavits of retraction. Slx In its resolution of October 18, 1999, the COMELEC granted the petition for recall and dismissed the oppositions against it. On the issue of whether the PRA was constituted by a majority of its members, the COMELEC held that the 1,073 members who attended the May 29, 1999 meeting were more than necessary to constitute the PRA, considering that its records showed the total membership of the PRA was 1,790, while the statistics of the Department of Interior and Local Government (DILG) showed that the total membership of the PRA was 1,876. In either case, since only a majority is required to constitute the PRA, clearly, a majority had been obtained in support of the recall resolution. Based on the verification made by election officer Ligaya Salayon, the COMELEC found the signatures of 958 members of the PRA sufficient. On whether the pendency of the case questioning the proclamation of petitioner was a prejudicial question which must first be decided before any recall election could be held, the COMELEC ruled that it was not and that petitioner was merely using the pendency of the case to delay the recall proceedings. Finally, on whether the petition for recall violated the bar on recall within one year from the elective official's assumption of office, the COMELEC ruled in the negative, holding that recall is a process which starts with the filing of the petition for recall. Since the petition was filed on July 2, 1999, exactly one year and a day after petitioner Claudio's assumption of office, it was held that the petition was filed on time. Hence, these petitions. Oral arguments were held in these cases in Baguio City on April 4, 2000, after which the Court, by the vote of 8 to 6 of its members,[3] resolved to dismiss the petition in G.R. No. 140560 for lack of showing that the COMELEC committed a grave abuse of discretion. On the other hand, the Court unanimously dismissed the petition in G.R. No. 140714 on the ground that the issue raised therein had become moot and academic. We now proceed to explain the grounds for our resolution. In its Resolution No. 3121, dated March 9, 2000, the COMELEC set the date of the recall elections in Pasay City on April 15, 2000. Consequently, the petition formandamus in G.R. No. 140714 to compel the COMELEC to fix a date for the recall elections in Pasay City is no longer tenable. We are thus left with only petitioner Claudio's action for certiorari and prohibition. The bone of contention in this case is 74 of the Local Government Code (LCG)[4] which provides: Scslx Limitations on Recall. - (a) Any elective local official may be the subject of a recall election only once during his term of office for loss of confidence. (b) No recall shall take place within one (1) year from the date of the official's assumption to office or one (1) year immediately preceding a regular local election. As defined at the hearing of these cases on April 4, 2000, the issues are:

This provisio is found in Sec. 46(a)

EN BANC [G.R. No. 140560. May 4, 2000] JOVITO O. CLAUDIO, petitioner, vs. COMMISSION ON ELECTIONS, DEPARTMENT OF BUDGET AND MANAGEMENT, COMMISSION ON AUDIT and RICHARD ADVINCULA, respondents. [G.R. No. 140714. May 4, 2000] PREPARATORY RECALL ASSEMBLY OF PASAY CITY, herein represented by its Chairman, RICHARD ADVINCULA, petitioner, vs. THE COMMISSION ON ELECTIONS, DEPARTMENT OF BUDGET AND MANAGEMENT, COMMISSION ON AUDIT and HON. JOVITO O. CLAUDIO,respondents. DECISION MENDOZA, J.: Calrky These are petitions arising from the proceedings initiated by the Preparatory Recall Assembly of Pasay City (PRA) in the Commission on Elections in E.M. No. 99-005 entitled IN THE MATTER OF THE PREPARATORY RECALL ASSEMBLY RESOLUTION NO. 01, S-1999 ADOPTED ON 29 MAY 1999 FOR THE RECALL OF MAYOR JOVITO CLAUDIO OF PASAY CITY. G.R. No. 140560 is a petition for certiorari and prohibition, seeking the nullification of the resolution,[1] dated October 18, 1999, of the COMELEC giving due course to the petition for the recall of petitioner Jovito O. Claudio as mayor of Pasay City. On the other hand, G.R. No. 140714 is a petition formandamus filed by the PRA, represented by its Chair, Richard Advincula, to compel the COMELEC to set the date for the holding of recall elections in Pasay City pursuant to the aforecited resolution of the COMELEC. The facts are as follows: Jovito O. Claudio, petitioner in G.R. No. 140560, was the duly elected mayor of Pasay City in the May 11, 1998 elections. He assumed office on July 1, 1998. Sometime during the second week of May 1999, the chairs of several barangays in Pasay City gathered to discuss the possibility of filing a petition for recall against Mayor Claudio for loss of confidence. On May 19, 1999, at the residence of barangay chair Benjamin Lim, Jr. in Barangay 11, Zone 4, Pasay City, several barangay chairs formed an ad hoc committee for the purpose of convening the PRA. Richard Advincula, private respondent in G.R. No. 140560 and petitioner in G.R. No. 140714, was designated chair. On May 29, 1999, 1,073 members of the PRA composed of barangay chairs, kagawads, and sangguniang kabataan chairs of Pasay City, adopted Resolution No. 01, S-1999, entitled RESOLUTION TO INITIATE THE RECALL OF JOVITO O. CLAUDIO AS MAYOR OF PASAY CITY FOR LOSS OF CONFIDENCE. In a letter dated June 29, 1999, Advincula, as chair of the PRA, invited the Mayor, Vice-Mayor, Station Commander, and thirteen (13) Councilors of Pasay City to witness the formal submission to the Office of the Election Officer on July 2, 1999 of the petition for recall. Mesm

WHETHER, under Section 74 of the Local Government Code of 1991 (R.A. No. 7160) ... A. The word "recall" in paragraph (b) covers a process which includes the convening of the Preparatory Recall Assembly and its approval of the recall resolution.

B. The term "regular local election" in the last clause of paragraph (b) includes the election period for that regular election or simply the date of such election. (1) On Whether the Word "Recall" in Paragraph (b) of 74 of the Local Government Code Includes the Convening of the Preparatory Recall Assembly and the Filing by it of a Recall Resolution Petitioner contends that the term "recall" in 74(b) refers to a process, in contrast to the term "recall election" found in 74(a), which obviously refers to an election. He claims that "when several barangay chairmen met and convened on May 19, 1999 and unanimously resolved to initiate the recall, followed by the taking of votes by the PRA on May 29, 1999 for the purpose of adopting a resolution to initiate the recall of Jovito Claudio as Mayor of Pasay City for loss of confidence, the process of recall began" and, since May 29, 1999 was less than a year after he had assumed office, the PRA was illegally convened and all proceedings held thereafter, including the filing of the recall petition on July 2, 1999, were null and void. Slxsc The COMELEC, on the other hand, maintains that the process of recall starts with the filing of the petition for recall and ends with the conduct of the recall election, and that, since the petition for recall in this case was filed on July 2, 1999, exactly one year and a day after petitioner's assumption of office, the recall was validly initiated outside the one-year prohibited period. Both petitioner Claudio and the COMELEC thus agree that the term "recall" as used in 74 refers to a process. They disagree only as to when the process starts for purposes of the one-year limitation in paragraph (b) of 74. We can agree that recall is a process which begins with the convening of the preparatory, recall assembly or the gathering of the signatures at least 25% of the registered voters of a local government unit, and then proceeds to the filing of a recall resolution or petition with the COMELEC, the verification of such resolution or petition, the fixing of the date of the recall election, and the holding of the election on the scheduled date.[5] However, as used in paragraph (b) of 74, "recall" refers to the election itself by means of which voters decide whether they should retain their local official or elect his replacement. Several reasons can be cited in support of this conclusion. First, 74 deals with restrictions on the power of recall. It is in fact entitled "Limitations on Recall." On the other hand, 69 provides that "the power of recall ...shall be exercised by the registered voters of a local government unit to which the local elective official belongs." Since the power vested on the electorate is not the power to initiate recall proceedings[6] but the power to elect an official into office, the limitations in 74 cannot be deemed to apply to the entire recall proceedings. In other words, the term "recall" in paragraph (b) refers only to the recall election, excluding the convening of the PRA and the filing of a petition for recall with the COMELEC, or the gathering of the signatures of at least 25 % of the voters for a petition for recall. Thus, there may be several PRAs held (as in the case of Bataan Province in 1993) or petitions for recall filed with the COMELEC - there is no legal limit on the number of times such processes may be resorted to. These are merely preliminary steps for the purpose of initiating a recall. The limitations in 74 apply only to the exercise of the power of recall which is vested in the registered voters. It is this - and not merely, the preliminary steps required to be taken to initiate a recall which paragraph (b) of 74 seeks to limit by providing that no recall shall take place within one year from the date of assumption of office of an elective local official. Indeed, this is the thrust of the ruling in Garcia v. COMELEC[7] where two objections were raised against the legality of PRAs: (1) that even the power to initiate recall proceedings is the sole prerogative of the electorate which cannot be delegated to PRAs, and (2) that by vesting this power in a PRA, the law in effect unconstitutionally authorizes it to shorten the term of office of incumbent elective local officials. Both objections were dismissed on the ground that the holding of a PRA is not the recall itself. With respect to the first objection, it was held that it is the power to recall and not the power to initiate recall that the Constitution gave to the people. With respect to the second objection, it was held that a recall resolution "merely sets the stage for the official concerned before the tribunal of the people so he can justify why he should be allowed to continue in office. [But until] the people render their sovereign judgment, the official concerned remains in office . . . ." Sdaadsc

If these preliminary proceedings do not produce a decision by the electorate on whether the local official concerned continues to enjoy the confidence of the people, then, the prohibition in paragraph (b) against the holding of a recall, except one year after the official's assumption of office, cannot apply to such proceedings. The second reason why the term "recall" in paragraph (b) refers to recall election is to be found in the purpose of the limitation itself. There are two limitations in paragraph (b) on the holding of recalls: (1) that no recall shall take place within one year from the date of assumption of office of the official concerned, and (2) that no recall shall take place within one year immediately preceding a regular local election. The purpose of the first limitation is to provide a reasonable basis for judging the performance of an elective local official. In the Bower case[8] cited by this Court in Angobung v. COMELEC,[9] it was held that "The only logical reason which we can ascribe for requiring the electors to wait one year before petitioning for a recall election is to prevent premature action on their part in voting to remove a newly elected official before having had sufficient time to evaluate the soundness of his policies and decisions." The one-year limitation was reckoned as of the filing of a petition for recall because the Municipal Code involved in that case expressly provided that "no removal petition shall be filed against any officer or until he has actually held office for at least twelve months." But however the period of prohibition is determined, the principle announced is that the purpose of the limitation is to provide a reasonable basis for evaluating the performance of an elective local official. Hence, in this case, as long as the election is held outside the one-year period, the preliminary proceedings to initiate a recall can be held even before the end of the first year in office of a local official. It cannot be argued that to allow recall proceedings to be initiated before the official concerned has been in office for oneyear would be to allow him to be judged without sufficient basis. As already stated, it is not the holding of PRA nor the adoption of recall resolutions that produces a judgment on the performance of the official concerned; it is the vote of the electorate in the Election that does. Therefore, as long as the recall election is not held before the official concerned has completed one year in office, he will not be judged on his performance prematurely. Rtcspped Third, to construe the term "recall" in paragraph (b) as including the convening of the PRA for the purpose of discussing the performance in office of elective local officials would be to unduly restrict the constitutional right of speech and of assembly of its members. The people cannot just be asked on the day of the election to decide on the performance of their officials. The crystallization and formation of an informed public opinion takes time. To hold, therefore, that the first limitation in paragraph (b) includes the holding of assemblies for the exchange of ideas and opinions among citizens is to unduly curtail one of the most cherished rights in a free society. Indeed, it is wrong to assume that such assemblies will always eventuate in a recall election. To the contrary, they may result in the expression of confidence in the incumbent. Our esteemed colleague Justice Puno says in his dissent that the purpose of the one-year period in paragraph (b) is to provide the local official concerned a "period of repose" during which "[his] attention should not be distracted by any impediment, especially by disturbance due to political partisanship." Unfortunately, the law cannot really provide for a period of honeymoon or moratorium in politics. From the day an elective official assumes office, his acts become subject to scrutiny and criticism, and it is not always easy to determine when criticism of his performance is politically motivated and when it is not. The only safeguard against the baneful and enervating effects of partisan politics is the good sense and self restraint of the people and its leaders against such shortcomings of our political system. A respite from partisan politics may, have the incidental effect of providing respite from partisanship, but that is not really the purpose of the limitation on recall under the law. The limitation is only intended to provide a sufficient basis for evaluating and judging the performance of an elected local official. In any event, it is argued that the judgments of PRAs are not "as politically unassailable as recalls initiated directly by the people." Justice Puno cites the "embarrassing repudiation by the people of [Kaloocan City's] Preparatory Recall Assembly" when, instead of ousting Mayor Rey Malonzo, they reelected him. Two points may be made against this argument. One is that it is no disparagement of the PRA that in the ensuing election the local official whose recall is sought is actually reelected. Laws converting municipalities into cities and providing for the holding of plebiscites during which the question of cityhood is submitted to the people for their approval are not always approved by the people. Yet, no one can say that Congress is not a good judge of the will of the voters in the locality. In the case of recall elections in Kaloocan City, had it been shown that the PRA was resorted to only because those behind the move to oust the incumbent mayor failed to obtain the signatures of 25% of the voters of that city to a petition for his recall, there may be some plausibility for the claim that PRAs are not as good a gauge of the people's will as are the 25 % of the voters.

Indeed, recalls initiated directly by 25% of the registered voters of a local government unit cannot be more representative of the sentiments of the people than those initiated by PRAs whose members represent the entire electorate in the local government unit. Voters who directly initiate recalls are just as vulnerable to political maneuverings or manipulations as are those composing PRAs. Korte The other point regarding Justice Punos claim is that the question here is not whether recalls initiated by 25% of the voters are better. The issue is whether the one-year period of limitation in paragraph (b) includes the convening of the PRA. Given that question, will convening the PRA outside this period make it any more representative of the people, as the petition filed by 25 % of the registered voters is claimed to be? To sum up, the term "recall" in paragraph (b) refers to the recall election and not to the preliminary proceedings to initiate recall 1. Because 74 speaks of limitations on "recall" which, according to 69, is a power which shall be exercised by the registered voters of a local government unit. Since the voters do not exercise such right except in an election, it is clear that the initiation of recall proceedings is not prohibited within the one-year period provided in paragraph (b); 2. Because the purpose of the first limitation in paragraph (b) is to provide voters a sufficient basis for judging an elective local official, and final judging is not done until the day of the election; and 3. Because to construe the limitation in paragraph (b) as including the initiation of recall proceedings would unduly curtail freedom of speech and of assembly guaranteed in the Constitution. As the recall election in Pasay City is set on April 15, 2000, more than one year after petitioner assumed office as mayor of that city, we hold that there is no bar to its holding on that date. (2) On Whether the Phrase "Regular Local Election" in the Same Paragraph (b) of 74 of the Local Government Code includes the Election Period for that Regular Election or Simply the Date of Such Election Petitioner contends, however, that the date set by the COMELEC for the recall election is within the second period of prohibition in paragraph (b). He argues that the phrase "regular local elections" in paragraph (b) does not only mean "the day of the regular local election" which, for the year 2001 is May 14, but the election period as well, which is normally at least forty five (45) days immediately before the day of the election. Hence, he contends that beginning March 30, 2000, no recall election may be held.Sclaw This contention is untenable. The law is unambiguous in providing that "[n]o recall shall take place within . . . one (1) year immediately preceding a regular local election." Had Congress intended this limitation to refer to the campaign period, which period is defined in the Omnibus Election Code,[10] it could have expressly said so. Moreover, petitioner's interpretation would severely limit the period during which a recall election may be held. Actually, because no recall election may be held until one year after the assumption of office of an elective local official, presumably on June 30 following his election, the free period is only the period from July 1 of the following year to about the middle of May of the succeeding year. This is a period of only nine months and 15 days, more or less. To construe the second limitation in paragraph (b) as including the campaign period would reduce this period to eight months. Such an interpretation must be rejected, because it would devitalize the right of recall which is designed to make local government units" more responsive and accountable." Sclex Indeed, there is a distinction between election period and campaign period. Under the Omnibus Election Code,[11] unless otherwise fixed by the COMELEC, the election period commences ninety (90) days before the day of the election and ends

thirty (30) days thereafter. Thus, to follow petitioner's interpretation that the second limitation in paragraph (b) includes the "election period" would emasculate even more a vital right of the people. To recapitulate the discussion in parts 1 and 2, 74 imposes limitations on the holding of recall elections. First, paragraph (a) prohibits the holding of such election more than once during the term of office of an elective local official. Second, paragraph (b) prohibits the holding of such election within one year from the date the official assumed office. And third, paragraph (b) prohibits the holding of a recall election within one year immediately preceding a regular local election. As succinctly stated in Paras v. COMELEC,[12] "[p]aragraph (b) construed together with paragraph (a) merely designates the period when such elective local official may be subject to recall election, that is, during the second year of office." (3) On Whether the Recall RESOLUTION was Signed by a Majority of the PRA and Duly Verified Petitioner alleges other grounds for seeking the annulment of the resolution of the COMELEC ordering the holding of a recall election. He contends that a majority of the signatures of the members of the PRA was not obtained because 74 members did not really sign the recall resolution. According to petitioner, the 74 merely signed their names on pages 94104 of the resolution to signify their attendance and not their concurrence. Petitioner claims that this is shown by the word "Attendance" written by hand at the top of the page on which the signatures of the 74 begin. This contention has no basis. To be sure, this claim is being raised for the first time in this case. It was not raised before the COMELEC, in which the claim made by petitioner was that some of the names in the petition were double entries, that some members had withdrawn their support for the petition, and that Wenceslao Trinidad's pending election protest was a prejudicial question which must first be resolved before the petition for recall could be given due course. The order of the COMELEC embodying the stipulations of the parties and defining the issues to be resolved does not include the issue now being raised by petitioner. Xlaw Although the word "Attendance" appears at the top of the page, it is apparent that it was written by mistake because it was crossed out by two parallel lines drawn across it. Apparently, it was mistaken for the attendance sheet which is a separate document. It is absurd to believe that the 74 members of the PRA who signed the recall resolution signified their attendance at the meeting twice. It is more probable to believe that they signed pages 94-104 to signify their concurrence in the recall resolution of which the pages in question are part. The other point raised by petitioner is that the recall petition filed in the COMELEC was not duly verified, because Atty. Nelson Ng, who notarized it, is not commissioned as notary public for Pasay City but for Makati City. As in the case of the first claim, this issue was not raised before the COMELEC itself. It cannot, therefore, be raised now. WHEREFORE, G.R. No. 140560 is DISMISSED for lack of merit, while the petition in G.R. No. 140714 is DISMISSED for having been rendered moot and academic. SO ORDERED. MENDOZA, J Davide, Jr., C.J., Bellosillo, Quisumbing, Buena, Gonzaga-Reyes, and Ynares-Santiago, JJ., concur. Melo, and Purisima, JJ., on leave. Puno, J., see dissenting opinion. Vitug, J., reiterate his separate opinion in the resolution of 5 Apr. 2000. Kapunan, J., see attached separate and dissenting opinion. Panganiban, J., joined the dissents of JJ. Puno and Kapunan. Xsc

Pardo, and De Leon, Jr., JJ., join the dissent of J. Puno. Republic of the Philippines SUPREME COURT Manila EN BANC G.R. No. L-9415 April 22, 1957

9. That parties reserve the right to present additional evidence at the trial of the case. When the case was heard, in the Court of Tax Appeals, the following took place, in the language of the decision thereof. . . . the petitioner limited itself to the presentation of Exhibit A, a sample of an L, & M King Size Filter Cigarette; Exhibit A-1, the same brand of cigarette cut longitudinally showing its filter and tobacco contents; Exhibit A-2, the filter of the same brand of cigarette separated from the tobacco portion; and Exhibit B, which consists of a sample of one package of the same brand of cigarette. The respondent on the other hand, adopted as his own exhibits, Exhibits A and B of the petitioner, making them as Exhibits 1 and 2, respectively. His Exhibit 3 is a letter of the Deputy Collector of Internal Revenue addressed to Messrs. Ross, Selph, Carrascoso and Janda, denying the request of the petitioner for refund of the sum of P17.60, and his Exhibit 3-A is a letter of the Acting Collector of Internal Revenue addressed to the General Manager of the petitioner company wherein the former opined that the specific tax on cigarettes is based on the over-all length or weight of the cigarettes. No other evidence was presented by the parties. The case hinges on the construction of Section 137 of the National Internal Revenue Code, as amended, pertinent parts of which we quote: SEC. 137. Specific tax on cigars and cigarettes. On cigars and cigarettes there shall be collected the following taxes: xxx (b) Cigarettes xxx xxx

LIGGETT & MYERS TOBACCO COMPANY, petitioner-appellant, vs. COLLECTOR OF INTERNAL REVENUE, respondent-appellee. Ross, Selph, Carrascoso and Janda for petitioner. Office of the Solicitor General Ambrosio Padilla and Solicitor Jose P. Alejandro for respondent. CONCEPCION, J.: This is a petition, by Liggett & Myers Tobacco Company, for review of a decision of the Court of Tax Appeals affirming another of the Collector of Internal Revenue, denying the claim of said appellant for the refund of P17.60 allegedly overpaid by way of specific tax on four (4) cartons of King Size L & M Filter Cigarettes. Both parties have stipulated:

xxx 1. That petitioner is a foreign corporation duly licensed to do business in the Philippines and respondent is the acting Collector of Internal Revenue of the Philippines; 2. That on or about September 28, 1954, petitioner received a shipment of 4 cartons of ng Size L & M Filter Cigarettes ( 40 packages of 800 cigarettes); 3. That the King Size L & M Filter Cigarettes are made of Virginia type tobacco, wrapped in tin foil and cellophane and mechanically wrapped or packed; 4. That the total length of each King Size L & M Filter Cigarettes is 85 millimeters and the average length of the portion thereof containing tobacco is 70 millimeters, while the average length of the filter element of each of said cigarette which does not contain tobacco is 70 millimeters, while the average length of the filter element of each of said cigarette which does not contain tobacco is 15 millimeters; 5. That the total average weight of King Size L & M Filter Cigarette is 1.2871 kilos per thousand and the average weight of the tobacco content of the aforesaid cigarette is 1.0773 kilos per thousand and the average weight of the filter element of the said number of cigarettes is .2098 kilos; 6. That the Collector of Customs in his capacity as Deputy of the respondent, required the petitioner to pay the amount of P35.20 as specific tax on the aforesaid cigarettes at the rate of P44.00 per thousand, which amount of P35.20 was paid by petitioner under Official Receipts Nos. 136616 and 125370, issued by the Collector of Customs on October 11 and 21, 1954, respectively; 7. That on or about October 18, 1954, petitioner through counsel, filed in the respondent's office a formal claim for refund of P17.60; 8. That on November 22, 1954, the undersigned attorneys received the letter of the Deputy Collector of Internal Revenue dated October 27, 1954, denying petitioner's claim for refund of the amount of P17.60;

xxx

xxx

(2) On cigarettes containing Virginia type tobacco and/or fluecured tobacco of seventy-one millimeters or less in length weighing one and one-forth kilos or less per thousand, wrapped in tinfoil or cellophane or packed in cartons covered with paraffin or wax paper or in tin cans, on each thousand, ten pesos: Provided, That if the length exceeds seventy-one millimeters or if the weight per thousand exceeds one and one-fourth kilos, the tax shall be increased by one hundred per centum. xxx xxx xxx

(4) If the cigarettes taxable under subparagraphs (1), (2) and (3) hereof are mechanically wrapped or packed, the tax shall be increased by one hundred and twenty per centum per thousand cigarettes. The issue is whether the cigarettes in question fall under the first sentence, or under the proviso, of paragraph (b) subdivision (2), in relation to subdivision (4), of said section 137. In this connection, it will be noted that the over-all length of King Size L & M Filter Cigarettes is 85 millimeters and the total average weight thereof 1.2871 kilos per thousand; that each one of said cigarettes has two parts, namely, (a) the main, or bigger, portion, which contains finely cut tobacco, and (b) a smaller portion, on one and thereof, consisting of a filter element correctly described in petitioner's brief as a "white fibrous and non tobacco material" without any tobacco therein; that these two portions form one integral unit, wrapped in one whole, single piece, cigarette paper, with a thicker band of paper over the portion thereof enclosing the filter, evidently to add consistency and strength to the fine, thin cigarette paper covering said portion; that the average length of the portion containing tobacco is 70 millimeters and its average weight 1.0773 kilos per thousand; and that the average length of said filter is 15 millimeters and the average weight thereof 0.2098 kilos per thousand. Thus, if the term "cigarettes," as used in said section 137, were construed to refer only to the portion containing tobacco, the specific tax thereon would be P22 per thousand, whereas the rate of tax would be P44 per thousand, if the filter were considered included within the purview of said term, the Court of Tax Appeals adopted the latter view, for the following reasons, among others:

. . . A casual reading of the provisions of the law involved will readily show that the tobacco contents of a cigarette is not the primordial factor in ascertaining its length and weight for the purpose of the specific tax. It merely states "that if the length exceeds seventy-one millimeters or if the weight per thousand exceeds one and one-fourth kilos, the tax shall be increased by one hundred per centum." The aforesaid provision of our Tax Code imposes a specific tax on cigarettes as a whole without limiting or qualifying what portion of the cigarette is subject to tax and it is not for us to make distinctions if the law does not make any. The word "cigarette" as used in section 137 of the National Internal Revenue Code should be applied in its general and literal sense. Webster defines "cigarette" as a little roll of finely cut tobacco, enclosed usually in paper, tobacco leaf or corn husk used for smoking. From the standard definition itself of the word cigarette, one could readily infer that the paper or corn husk with which the finely cut tobacco is enclosed is considered a part of the cigarette. In the same way, the modern filters which are attached to the latest brand of cigarettes and forming part of it should be considered a part of the cigarette itself. Otherwise, if we are to follow the view of the, petitioner to its logical conclusion, an absurdity would result for we, might as well also exclude the paper wrapper of the cigarette in determining the weight thereof. . . . The language of the law is to us clear and unambiguous, and it is within its word, as well as its spirit, that no distinction should be made, for the purposes of the amount of specific tax, of a cigarette provided with a filter and a cigarette without any filter, as long as both of them are cigarettes. The petitioner does not dispute that the, L & M King Size Filter Cigarettes are cigarettes and the package containing them (Exhibits B and Exhibit 2) bears among others, the following notation: "Notice The manufacturer of the cigarettes herein contained . . . . We do not believe it would be necessary to state that the articles in question having been designated as "cigarettes," a term certain, and definite in its significance and understood by everybody to be such, the law imposing a specific tax on cigarette should be interpreted in such a way that the filters thereof being part and parcel of the cigarettes, should be included in determining their actual length and weight. We are substantially in agreement with the foregoing conclusion. Indeed, the filter of King Size L & M Filter Cigarettes is part and parcel thereof. It is from the viewpoint of smokers, the main feature, or, at least, one of the principal features of L & M Filter Cigarettes and what distinguishes the same from many though not all other cigarettes. It is one of the major devices resorted to induce the smoking public to buy L & M Filter Cigarettes in preference to other cigarettes. In fact, it cannot be separated or detached from the portion containing tobacco without breaking, tearing, or cutting the cigarette paper that wraps the two portions and keeps the same together, as a single, whole cigarette. What is more, the expression "King Size L & M Filters" is printed at the bottom, and the term "L & M FILTERS" appears on four (4) sides, of the package. As if this were not enough to emphasize the importance of the filter, the phrase "THE MIRACLE TIP" is, likewise, printed in a prominent part on both sides of the package. Petitioner-appellant stresses the alleged effects of heavy smoking of cigarettes upon the development of some diseases, particularly lung cancer, asan argument in favor of the application to the cigarettes in question of the low rate of specific tax fixed in the first sentence of paragraph (b) (2) of said section 137; but the courts and the executive department merely apply the law as it is. If cigarette smoking without filter really has injurious effects upon health, and Congress felt that the use of filters should be encouraged, it could and, surely, would enact appropriate legislation therefor. As long, however, as the law does not distinguish between filter cigarettes and nonfilter cigarettes, and said section 137 does not do so, neither the executive department nor the courts may distinguish the one from the other, for purposes of taxation.. Wherefore, the decision appealed from is hereby affirmed, with costs against the petitioner-appellant. It is so ordered. Bengzon, Padilla, Montemayor, Reyes, A., Bautista Angelo, Labrador, Reyes, J.B.L., Endencia and Felix, JJ.,concur. Republic of the Philippines SUPREME COURT Manila EN BANC G.R. No. L-8238 May 25, 1955

VICENTE SANTIAGO, in his capacity as Judge of the Court of First Instance of Manila and TOMAS VALENTON, Sr. and TOMAS VALENTON, Jr., respondents. S. Mejia-Panganiban for petitioner. Evangelista and Valenton for respondents. LABRADOR, J.: This is a petition for certiorari against Honorable Vicente Santiago, Judge of the Court of First Instance of Manila, to annul his order in Civil Case No. 21173, entitled Cesar M. Carandang vs. Tomas Valenton, Sr. et al., suspending the trial of said civil case to await the result of the criminal Case No. 534, Court of First Instance of Batangas. In this criminal case, Tomas Valenton, Jr. was found guilty of the crime of frustrated homicide committed against the person of Cesar Carandang, petitioner herein. Tomas Valenton, Jr. appealed the decision to the Court of Appeals where the case is now pending. The decision of the Court of First Instance of Batangas in the criminal case was rendered on September 1, 1953 and petitioner herein filed a complaint in the Court of First Instance of Manila to recover from the defendant Tomas Valenton, Jr. and his parents, damages, both actual and moral, for the bodily injuries received by him on occasion of the commission of the crime of frustrated homicide by said accused Tomas Valenton Jr. After the defendants submitted their answer, they presented a motion to suspend the trial of the civil case, pending the termination of the criminal case against Tomas Valenton, Jr. in the Court of Appeals. The judge ruled that the trial of the civil action must await the result of the criminal case on appeal. A motion for reconsideration was submitted, but the court denied the same; hence this petition for certiorari. Petitioner invokes Article 33 of the new Civil Code, which is as follows: In cases of defamation, fraud and physical injuries, a civil action for damages, entirely separate and distinct from the criminal action, may be brought by the injured party. Such civil action shall proceed independently of the criminal prosecution, and shall require only a preponderance of evidence. The Code Commission itself states that the civil action allowed (under Article 33) is similar to the action in tort for libel or slander and assault and battery under American law (Reports of the Code Commission, pp. 46-47). But respondents argue that the term "physical injuries" is used to designate a specific crime defined in the Revised Penal Code, and therefore said term should be understood in its peculiar and technical sense, in accordance with the rules statutory construction (Sec. 578, 59 C. J. 979). In the case at bar, the accused was charged with and convicted of the crime of frustrated homicide, and while it was found in the criminal case that a wound was inflicted by the defendant on the body of the petitioner herein Cesar Carandang, which wound is bodily injury, the crime committed is not physical injuries but frustrated homicide, for the reason that the infliction of the wound is attended by the intent to kill. So the question arises whether the term "physical injuries" used in Article 33 means physical injuries in the Revised Penal Code only, or any physical injury or bodily injury, whether inflicted with intent to kill or not. The Article in question uses the words "defamation", "fraud" and "physical injuries." Defamation and fraud are used in their ordinary sense because there are no specific provisions in the Revised Penal Code using these terms as means of offenses defined therein, so that these two terms defamation and fraud must have been used not to impart to them any technical meaning in the laws of the Philippines, but in their generic sense. With this apparent circumstance in mind, it is evident that the term "physical injuries" could not have been used in its specific sense as a crime defined in the Revised Penal Code, for it is difficult to believe that the Code Commission would have used terms in the same article some in their general and another in its technical sense. In other words, the term "physical injuries" should be understood to mean bodily injury, not the crime of physical injuries, because the terms used with the latter are general terms. In any case the Code Commission recommended that the civil for assault and battery in American Law, and this recommendation must have been accepted by the Legislature when it approved the article intact as recommended. If the intent has been to establish a civil action for the bodily harm received by the complainant similar to the civil action for assault and battery, as the Code Commission states, the civil action should lie whether the offense committed is that of physical injuries, or frustrated homicide, or attempted homicide, or even death. A parallel case arose in that of Bixby vs Sioux City, 164 N. W. 641, 643. In that case, the appellant sought to take his case from the scope of the statute by pointing out that inasmuch as notice is required where the cause of action is founded on

CESAR M. CARANDANG, petitioner, vs.

injury to the person, it has no application when the damages sought are for the death of the person. The court ruled that a claim to recover for death resulting from personal injury is as certainly "founded on injury to the person" as would be a claim to recover damages for a non-fatal injury resulting in a crippled body. For the foregoing considerations, we find that the respondent judge committed an error in suspending the trial of the civil case, and his order to that affect is hereby revoked, and he is hereby ordered to proceed with the trial of said civil case without awaiting the result of the pending criminal case. With costs against the defendant-appellees. Pablo, Acting C.J., Bengzon, Padilla, Montemayor, Reyes, A., Bautista Angelo, Concepcion and Reyes, J.B.L., JJ.,concur. EN BANC [G.R. No. L-6296. September 29, 1956.] CU UNJIENG SONS, INC., Petitioner, vs. THE BOARD OF TAX APPEALS and THE COLLECTOR OF INTERNAL REVENUE, Respondents.

1949 59,925.87 1950 47,243.00 10. That according to the returns filed by the Petitioner, it deducted the following war losses for the years set forth below:chanroblesvirtuallawlibrary 1945 22,492.50 1946 7,875.00 1947 94,315.25 11. That the Petitioner claimed no further war losses for any of the returns filed by it for the years 1948 and 1950, inclusive; 12. That the Respondent disallowed the deductions for war losses claimed by the Petitionerfor the years 1946 and 1947 on the ground that all the war losses sustained by the Petitionershould have been claimed as deduction for the year 1945 when the said losses were actually sustained, pursuant to Section 30(d) (2) of the National Internal Revenue Code; 13. That by reason of the said disallowance by the Respondent, the latter sent assessment notices dated April 11, 1949 and March 10, 1949 to the Petitioner demanding the payment of the sums of P9,540.88 and P23,949.88 as deficiency income taxes for the years 1946 and 1947, respectively; 14. That the war damage loss in the amount of P329,682.75 was allowed by the Respondentand as per investigation, it was allowed as a deductible item in 1945, in accordance with Section 30(d) (2) of the National Internal Revenue Code. Briefly stated, the issue is whether the losses, aggregating P1,079,388.05, admittedly suffered by Cu Unjieng Sons, Inc., during the battle for the liberation of Manila and other parts of the Philippines in 1945, were deductible, for income tax purposes, in 1945, when the losses were physically sustained, or in 1950, when Petitioner was advised by the Philippine War Damage Commission that no payments, other than those effected by said Commission in June and November, 1950, would be made for said losses. The determination of this question hinges on the interpretation and construction of section 30 of Commonwealth Act No. 466, otherwise known as the National Internal Revenue Code, from which we quote:chanroblesvirtuallawlibrary Deduction from gross income. In computing net income there shall be allowed as deductions xxx (d) Losses:chanroblesvirtuallawlibrary xxx xxx xxx xxx xxx

DECISION CONCEPCION, J.: This is an appeal, taken by Cu Unjieng Sons, Inc., from a decision of the Board of Tax Appeals, now Court of Tax Appeals, dismissing the formers petition for review of a decision of the Collector of Internal Revenue, finding said corporation liable for the sum of P33,490.76, as deficiency income taxes for the years 1946 and 1947, plus the corresponding 5% surcharge and 1% monthly interest thereon, and affirming said decision, without costs. The case was submitted to said Board of Tax Appeals upon a stipulation of facts, the pertinent part of which is:chanroblesvirtuallawlibrary 1. That the Petitioner is a corporation duly organized and existing under the laws of the Philippines, with its principal office at 310 Dasmarias, Manila, and that more than 70% of the capital stock of which is owned by Filipino citizens; 2. That the Respondent is the duly appointed, qualified and acting Collector of Internal Revenue of the Philippines; 3. That on February 29, 1948, the Petitioner filed with the Philippine War Damage Commission a claim for compensation in accordance with the provisions of Philippine Rehabilitation Act of 1945, for losses sustained during the battle of liberation of Manila and other parts of the Philippines, in the total sum of P1,079,388.05, representing the appraised value of the properties lost; 4. That on June 15, 1950, the Philippine War Damage Commission notified the Petitioner that only the sum of P671,770.19 was approved by the said Commission and that of this amount the sum of P470,239.13 will be paid; 5. That on June 15, 1950, the Philippine War Damage Commission transmitted to thePetitioner U.S. Treasury Warrant No. 1382483 for the sum of P202,531.06 as partial payment of the approved claim of the Petitioner; 6. That on November 8, 1950, the Philippine War Damage Commission transmitted a second United States Treasury Warrant No. 1471286 for the sum of P151,148.31 together with a notice to the Petitioner that the said amount of P151,148.31 would be the last payment to be made by the Commission covering the claim of the Petitioner, unless the United States Congress makes further appropriation therefor. 8. That the Petitioner filed its income tax returns for the years 1945, 1946, 1947, 1948, 1949 and 1950, copies of which are marked Exhibits A, B, C, D, E and F, respectively; 9. That the Petitioner paid no income tax for the years 1945 and 1946, but it paid to theRespondent the following sums:chanroblesvirtuallawlibrary 1947 P2,483.32 1948 51,150.14

(2) By corporations. In the case of a corporation, all losses actually sustained and charged off within the taxable year and not compensated for by insurance or otherwise. (National Internal Revenue Code or C. A. No. 466.) (Emphasis supplied.) This legal provision is implemented by Revenue Regulations No. 2, otherwise known as Income Tax Regulations, issued by the Secretary of Finance, pursuant to Sections 4(1) and 338 of said Commonwealth Act No. 466. Sections 94 and 96 of the aforementioned regulations read:chanroblesvirtuallawlibrary SEC. 94. Losses by corporations. Domestic corporations may deduct losses actually sustained and charged off within the year and not compensated for by insurance or otherwise. xxx xxx xxx

SEC. 96. Losses generally. Losses must usually be evidenced by closed and completed transactions. Moreover, the amount of loss must be reduced by the amount of any insurance or other compensation received, and by the salvage value, in any, of the property cralaw It is not disputed that the losses in question could only be charged off in the income tax return for the year 1945, unless compensated for by insurance or otherwise. Petitionermaintains that said losses were so compensated for by insurance or otherwise; chan roblesvirtualawlibrarythat the said losses were not evidenced by closed or completed transaction, until notice by the Philippine War Damage Commission that further compensation therefor would not be forthcoming; chan roblesvirtualawlibraryand that, inasmuch as such notice was given in 1950, it follows that the losses in question were not chargeable as deductions in the year 1945. The Collector of Internal Revenue and the Board of Tax Appeals held, however, that the said

losses were not compensated for by insurance or otherwise, and that, accordingly, the corresponding deduction was permissible, in 1945, only, not in any other year. The first question for resolution by this Court is whether the losses aforementioned were compensated for by insurance in 1945. Petitioner maintains the affirmative view, relying upon section 5(g) of an Act of Congress of the United States of March 27, 1942, otherwise known as Public Law 506 77th Congress of the United States - subsections (a) and (b) of which provide:chanroblesvirtuallawlibrary SEC. 5g. (a) The Reconstruction Finance Corporation is hereby directed to continue to supply funds to the War Damage Corporation, a corporation created pursuant to section 5d of this Act; chan roblesvirtualawlibrary cralaw The Reconstruction Finance Corporation is authorized to and shall empower the War Damage Corporation to use its funds to provide, through insurance, reinsurance, or otherwise, reasonable protection against loss of or damage to property, real and personal, which may result from enemy attack (including any action taken by the military, naval, or air forces of the United States in resisting enemy attack), with such general exceptions as the War Damage Corporation, with the approval of the Secretary of Commerce, may deem advisable. Such protection shall be made available through the War Damage Corporation on and after a date to be determined and published by the Secretary of Commerce which shall not be later than July 1, 1942, upon the payment of such premium or other charge, and subject to such terms and conditions, as the War Damage Corporation, with the approval of the Secretary of Commerce, may establish, but, in view of the national interest involved, the War Damage Corporation shall from time to time to establish uniform rates for each type of property with respect to which such protection is made available, and, in order to establish a basis for such rates, such Corporation shall estimate the average risk of loss on all property of such type in the United States. Such protection shall be applicable only (1) to such property situated in the United States (including the several States and the District of Columbia), the Philippine Islands, the Canal Zone, the Territories and possessions of the United States, and in such other places as may be determined by the President to be under the dominion and control of the United States, cralaw Provided, That such protection shall not be applicable after the date determined by the Secretary of Commerce under this subsection to property in transit upon which the United States Maritime Commission is authorized to provide marine war-risk insurance. The War Damage Commission, with the approval of the Secretary of Commerce, may suspend, restrict, or otherwise limit such protection in any area to the extent that it may determine to be necessary or advisable in consideration of the loss of control over such area by the United States making it impossible or impracticable to provide such protection in such area. (b) Subject to the authorization and limitations prescribed in subsection (a), any loss or damage to any such property sustained subsequent to December 6, 1941, and prior to the date determined by the Secretary of Commerce under subsection (a), may be compensated by the War Damage Corporation without requiring contract of insurance or the payment of premium or other charge, and such loss or damage may be adjusted as if a policy covering such property was in fact in force at the time of such loss or damage. (U.S. Statutes at Large, Vol. 56, Part I, pp. 175-176.) (Emphasis supplied.) It will be noted that subsection (a) of said section 5(g), authorized the Reconstruction Finance Corporation to empower the War Damage Corporation to use its funds to provide, through insurance, reinsurance or otherwise, reasonable protection against loss of, or damage to, property which may result from enemy attack; chan roblesvirtualawlibraryand that such protection shall be made available cralaw upon payment of such premium or other charge cralaw as the War Damage Commission cralawmay establish. Pursuant to subsection (b) of said section 5(g), any loss or damage to any such property referred to in subsection (a), sustained subsequent to December 6, 1941, and prior to the date determined by the Secretary of Commerce under subsection (a), may be compensated by the quoted War Damage Corporation without requiring a contract of insurance or the payment of premium or other charge. Thus, the above quoted subsections of said Public Law 506 77th Congress of the United States, grant the benefits of the protection therein provided for in two cases, namely:chanroblesvirtuallawlibrary (1) protection through insurance, reinsurance or otherwise, which protection shall be made available cralaw upon the payment of such premium or other charge cralaw as the War Damage Corporation cralaw may establish; chan roblesvirtualawlibraryand (2) protection without requiring a contract of insurance or the payment of premium or other charge. In order to come under subsection (a), there must be (1) insurance, reinsurance or otherwise and (2) payment of such premium or other charge cralaw as the War Damage Corporation cralaw may establish. Admittedly, neither requirement is present in the case at bar. Hence, Petitioner is not entitled to the benefits of said subsection (a). It claims, however, to be within the purview of subsection (b), but the same is applicable only to losses or damages sustained subsequent to December 6, 1941, and prior to the date determined by the Secretary of Commerce under subsection (a), pursuant to which the protection under said Act of Congress shall be

made available cralaw on and after a date to be determined cralaw by the Secretary of Commerce, which shall not be later than July 1, 1942. Having been sustained in 1945, or later than July 1, 1942, it follows that the losses ofPetitioner herein are not, and cannot be, covered by the provisions of the aforementioned subsection (b) of section 5(g). This is borne out by the records of the hearings before the Committee on Territories and Insular Affairs of the Senate of the United States, on the bill which later became the Philippine Rehabilitation Act of 1946. Speaking before said Committee, John Goodloe, General Counsel for the War Damage Corporation said:chanroblesvirtuallawlibrary Mr. GOODLOE. Further, in the opinion of counsel for the RFC and for the War Damage Corporation, the United States Government and War Damage Corporation are morally committed to the payment of war damages that occurred in the Philippine Islands after December 6, 1941, and prior to July 1, 1942, to the extent of reasonable protection for all such damages, but not in excess of approximately $99,000,000 which represents the limitation of $100,000,000 stated in the press release of December 13, 1941, less disbursements made and hereafter to be made on account of war damages which occurred between December 6, 1941, and July 1, 1942 in the United States and its Territories and possession, exclusive of the Virgin Islands. (Emphasis supplied.) Summarizing the view of Mr. Goodloe, language:chanroblesvirtuallawlibrary the Chairman of the Committee used the following

The CHAIRMAN. Let me recapitulate what you have said for the benefit of those who have just come in. We are not legally bound to pay any damages to the Philippine Island inhabitants for war damages in the opinion of the War Damage Corporation. We are morally bound because of certain press release to pay damages up to $100,000,000 for damages inflicted after December 6, 1941, and prior to July 1, 1942. (Emphasis supplied.) Our Resident Commissioner to the United States concurred in said view. We quote from a statement submitted by him to said Committee on October 30, 1945:chanroblesvirtuallawlibrary The act of March 27, 1942, terminated on July 1, 1942, the free insurance protection of the War Insurance Corporation announced in the press releases issued by the Secretary of Commerce on December 12 and 22, 1941. Under the act, however, the War Damage Corporation was authorized to compensate loss or damage to property sustained during the period from December 7, 1941 to June 30, 1942, without requiring any contract of insurance or the payment of premium. The pertinent provision of the act on this point reads as follows:chanroblesvirtuallawlibrary (b) Subject to the authorization and limitations prescribed in subsection (a), any loss or damage to any such property sustained subsequent to December 6, 1941, and prior to the date determined by the Secretary of Commerce under subsection (a), may be compensated by the War Damage Corporation without requiring a contract of insurance or the payment of premium or other charge, and such loss or damage may be adjusted as if a policy covering such property was in fact in force at the time of such loss or damage. Under this provision of the War Damage Act, property losses sustained in the Philippines during the period from December 7, 1941 to June 30, 1942, can thus be paid under the automatic insurance provision of the War Damage corporation. It is, therefore, clear that Filipino and American property owners in the Philippines whose properties suffered damage during the period from December 7, 1941 to June 30, 1942, can receive compensation from War Damage Corporation under the present law. xxx Summarizing, it is submitted 1. That property losses in the Philippines sustained through enemy attack subsequently to December 6, 1941, and prior to July 1, 1942, are automatically covered by the War Insurance Corporation according to press release issued by the Secretary of Commerce on December 13 and December 22, 1941, and validated by the War Damage Act of March 27, 1942; 2. That property losses in the Philippines sustained subsequent to July 1, 1942, cannot come under the insurance protection provided by the act of March 27, 1942, because of loss of control of the Philippines by the United States, making it impractical for effecting insurance coverage on such properties; 3. That the need for providing later for such properties destroyed after July, 1942, was recognized by Congress. (Emphasis supplied.) xxx xxx

Petitioner insist that its property were, in effect, covered by a special statutory insurance, regardless of any legislation thereon, because:chanroblesvirtuallawlibrary (1) on December 13, 1941, the Federal Loan Agency of the United States announced, 1 with the approval of the President of the United States, that the Rehabilitation Finance Corporation had created the War Insurance Corporation (later War Damage Corporation) with a capital of $100,000,000, to provide protection against losses resulting from enemy attack which might be sustained by owners of property in continental United States; chan roblesvirtualawlibrary(2) on December 23, 1941, said Agency further announced 2 that the War Insurance Corporation would extend the same protection to property owners in the Philippines; chan roblesvirtualawlibrary(3) these announcements were published in the Manila Daily Bulletin on December 29, 1941 3 and were subsequently confirmed in radio broadcasts of the Voice of America; chan roblesvirtualawlibrary(4) Jesse Jones, the Federal Loan Administrator of the United States declared that said announcements were intended as insurance policy; chan roblesvirtualawlibraryand (5) compliance therewith, according to Senator Millard Tydings, was a legal obligation on the part of the United States. Petitioner admits (p. 14 of its brief ), however, that to fulfill the commitments made in the aforementioned announcements, the 77th Congress of the United States passed said Public Law No. 506, which, as above stated, does not cover losses sustained later than July 1, 1942. Moreover, said announcements admittedly specified that protection would be given against loss due to enemy attack. 4 Accordingly, section 5g of said Act of Congress provided, in subsections (a) and (b) thereof, for protection against loss or damage to property cralaw which may result from enemy attack (including any action taken by military, naval or air forces of United States in resisting enemy attack). Petitioner herein suffered its aforementioned losses in 1945, during the battle for the liberation of the Philippines by the Allied, especially American Forces. Those losses were not the result of enemy attack, or of action by the armed forces of the United States in resisting enemy attack. The main enemy, in this theater of War, was Japan, and neither Japan, nor any of its associates in the facist Axis, was then attacking in the Philippines. On the contrary the members of the Axis were, early in 1945 and subsequently thereto, in the defensive in all fronts, including the Philippines. They were desperately and hopelessly resisting the relentless attacks of the allied democratic powers, particularly, in these Islands, the American forces of liberation. In the words of the amici curiae the properties of the Petitioners herein cralawwere destroyed or damaged as a result of military action by the armed forces of the United States cralaw. (pages 47-48, amici curiaes brief.) Events subsequent to the approval of said Act of Congress of March 27, 1942, particularly the language of the Philippine Rehabilitation Act of 1946, which will presently be discussed, leave no reason for doubt that said term enemy attack was used in its common, ordinary meaning, as distinguished from other causes of losses or damage to property. It is clear, therefor, that Petitioners losses do not come within the purview either of said Act of Congress of United States of March 27, 1942, or of the announcements above mentioned, and are not compensated for by insurance, as the term is used in our National Internal Revenue Code. It is alleged, however that said losses could not be deducted in 1945, because they were compensated for cralaw otherwise than by insurance, within the purview of section 30 of said Code and section 94 of our Income Tax Regulations. In support of this contention, Petitionerinvokes the Act of Congress of the United States of April 30, 1946, otherwise known as the Philippine Rehabilitation Act of 1946, (Public Law 370 79th Congress), section 102 (a) of which provides:chanroblesvirtuallawlibrary The Commission is hereby authorized to make compensation to the extent hereinafter provided on account of physical loss or destruction of or damage to property in the Philippines occurring after December 7, 1941 (Philippine time), and before October 1, 1945, as a result of one or more of the following perils:chanroblesvirtuallawlibrary (1) Enemy attack; chan roblesvirtualawlibrary(2) action taken by or at the request of the military, naval, or air forces of the United States to prevent such property from coming into the possession of the enemy; chan roblesvirtualawlibrary(3) action taken by enemy representatives, civil or military, or by the representatives of any government cooperating with the enemy; chan roblesvirtualawlibrary(4) action by the armed forces of the United States or other forces cooperating with the armed forces of the United States in opposing, resisting or expelling the enemy from the Philippines; chan roblesvirtualawlibrary(5) looting, pillage, or other lawlessness or disorder accompanying the collapse of civil authority determined by the Commission to have resulted from any of the other perils enumerated in this section or from control by enemy forces:chanroblesvirtuallawlibraryProvided, That such compensation shall be payable only to qualified persons having, on December 7, 1941 (Philippine time), and continuously to and including the time of loss or damage, an insurable interest as owner, mortgagee lien holder, or pledgee in such property so lost or damaged:chanroblesvirtuallawlibrary Provided, further, That any qualified person who acquired any deceased persons interest in any property either (1) as heir, devisee, legatee, or distributee, or (2) as executor or administrator of the estate of any such deceased person for the benefit of one or more heirs, devisees, legatees, or distributees, all of whom are qualified persons, shall be

deemed to have had the same interest in such property during such deceased persons lifetime that such deceased person had:chanroblesvirtuallawlibrary Provided further, That no claim shall be approved in an aggregate amounts which exceeds whichever of the following amounts, as determined by the Commission, is less:chanroblesvirtuallawlibrary (a) The actual cash value, at the time of loss, of property lost or destroyed and the amount of the actual damage to other property of the claimant which was damaged as a direct result of the causes enumerated in this section; chan roblesvirtualawlibrary(b) the cost of repairing or rebuilding such lost or damaged property, or replacing the same with other property of like or similar quality:chanroblesvirtuallawlibrary Provided further, That in case the aggregate amount of the claims which would be payable to any one claimant under the foregoing provisions exceeds $500, the aggregate amount of the claims approved in favor of such claimant shall be reduced by 25 per centum of the excess over $500, As above stated, this law was approved, and became effective, on April 30, 1946. In order to be entitled to defer deductions for losses materially sustained within a given year, the right to compensation therefor, by way of insurance or otherwise, if any, must exist, however, prior to the conclusion of said year. Consequently, the approval of the Philippine Rehabilitation Act of 1946 did not constitute in 1945 a compensation otherwise than by insurance, and did not authorize Petitioner herein to postpone, to another year, its claim for deduction arising from the war losses in question. This notwithstanding, Petitioner insists that said losses were compensated for cralaw otherwise than by insurance before the end of 1945, on account of the following events:chanroblesvirtuallawlibrary (1) in October 1943, President Roosevelt recommended to the Congress of the United States that provision be made for the physical and economic rehabilitation of the Philippines made necessary by the ravages of war; chan roblesvirtualawlibrary(2) an Act of Congress of the United States, approved on June 29, 1944, created a Philippine Rehabilitation Commission to investigate all matters affecting the rehabilitation of the Philippines, including damages to public and private property; chan roblesvirtualawlibrary(3) in January, 1945, the Japanese were already impotent to check the advance of the American forces of liberation in the Philippines; chan roblesvirtualawlibrary(4) on February 27, 1945, General MacArthur stated that destroyed or damaged properties had to be either rehabilitated or indemnified; chan roblesvirtualawlibrary(5) upon his return to the Philippines from a trip to the United States, in May 23, 1945, President Osmea declared that President Truman had pledged to carry out everything President Roosevelt had promised to be done for the Philippines; chan roblesvirtualawlibrary(6) on June 8, 1945, Senator Tydings, reported to the Senate of the United States on the huge task of repairing the widespread devastation visited by war upon our soil; chan roblesvirtualawlibrary(7) soon thereafter, that same year, the War Damage Corporation sent to the Philippines a special mission to survey the war damage therein and to make appropriate reports and recommendations for such actions as may be necessary and desirable in regard to any program of compensation under the Act of Congress of March 27, 1942; chan roblesvirtualawlibrary(8) based upon the report thus submitted, the corresponding bill was introduced in the Senate of the United States, which passed it on December 5, 1945; chan roblesvirtualawlibrary(9) said bill was approved by the House of Representatives of the United States on April 11, 1946; chan roblesvirtualawlibraryand (10) on April 30, 1946, President Truman signed the bill, which thus became the Philippine Rehabilitation Act of 1946. In other words, it is claimed that the acts and declarations of responsible officials and organs of the Government of the United States before the end of 1945 were such as to constitute conclusive assurances that property owners had reasonable expectation, that their war losses would be compensated for. This reasonable expectation, it is said, sufficed to place the losses of herein Petitioner, during 1945, within the purview of the phrase compensated for cralaw otherwise than by insurance in section 30 of our National Internal Revenue Code. Upon careful consideration of the reasons adduced, and the authorities cited, by counsel for the Petitioner and the amici curiae to bolster up this contention, we find that same is untenable. In general, the word otherwise means but for, or under other circumstances (Shepherd vs. Davis, 110 A, 17, 19, 91, N. J. Eq. 468, 30 W & P 496); chan roblesvirtualawlibraryin a different manner; chan roblesvirtualawlibraryin another way, or in other ways (Safe Deposit & Trust Co. of Baltimore vs. New York Life Insurance Co., D.C. Md., 14 F Supp. 721, 726). However, when said term is immediately preceded by an enumeration, it should receive an ejusdem generis interpretation, or be limited in its application by the rule noscitur a sociis. In this connection, words and phrases uses the following language:chanroblesvirtuallawlibrary Under the ejusdem generis rule, a clean-up phrase, such as the term otherwise with respect to a classification which immediately precedes it, includes only things of a like or similar kind, and nothing of a higher class than that which it immediately follows. Hodgson vs. Mountain & Gulf Oil Co., D. C. Wyo. 297 F. 269, 272. xxx xxx xxx

Otherwise, as used in Rev. St. sec. 811, denouncing punishment against whoever shall be found guilty of attempting to rob from the person by cutting or tearing the clothes, or thrusting the hand into the pockets, or otherwise, is intended to include all similar acts to those specified, resorted to in an attempt to rob. State vs. West, 30 So. 848, 106 La. 274. xxx xxx xxx

Upon the other hand, compensation shall take place according to articles 1278 of the Civil Code of the Philippines when two persons, in their own right, are creditors and debtors of each other. (See, also, Art. 1195 of the Civil Code of Spain). This reciprocal right, between creditors and debtors, connotes, necessarily, juridical relations productive of legal obligations, which did not exist between the United States and the herein Petitioner in 1945. The amici curiae invokes the case of Mine Hill & Schulkill Haven R. Co. vs. Smith (184 F. 2d. 422), in which it was held that:chanroblesvirtuallawlibrary cralaw determination of the year of loss calls for a practical, not a legal, test and requires a consideration of all pertinent facts and circumstances, regardless of their objective or subjective nature; chan roblesvirtualawlibrarythe standard for determining the year for the deduction of a loss is a flexible one, varying according to the circumstances of each case; chan roblesvirtualawlibrarythe taxpayers conduct and attitude are to be considered but they are not decisive; chan roblesvirtualawlibrarythe taxpayer has the burden of establishing that a claimed deductible loss was sustained in the taxable year; chan roblesvirtualawlibrarythe question as to the year when the loss was sustained is purely one of fact cralaw. 184 F. 2d 422, 426.) Said decision is not in point. It refers to the time at which a given loss should be deemed sustained as a matter of fact. The issue therein was whether the losses in certain railroad branch lines, which had not been used for a number of years prior to 1942, should be deemed sustained in 1942 and 1943, when said lines were torn up by authority of the Interstate Commerce Commission, as claimed by the taxpayer. The district court decided the question in the negative, following the theory of the Collector of Internal Revenue to the effect that said lines had suffered material deterioration before 1942. Such decision was affirmed by the United States Court of Appeals (Third Circuit). In the case at bar, it is admitted that Petitioners property were physically lost or damaged in 1945. The issue is whether said losses were then compensated for by insurance or otherwise which is a question both of law and fact, although more of law. It is not contended that indemnity was due to Petitioner herein by reason of tort, crime or quasi-contract. Upon the other hand, Petitioner had, in 1945, no right to indemnity springing from law, for the Philippine Rehabilitation Act was not approved until April, 1946. Then again, the press releases and announcements already adverted to created neither a legal obligation nor a contractual one, either express or implied. They were mere expressions of a policy of the Executive Department of the United States. They implied no intent to vest, and did not vest, in the owners of property damaged or destroyed in the Philippines during the war, a legal right to demand indemnity from the United States. Announcement of an official governmental policy by President of the United States does not give rise to a contract in and of itself, for announcement of policy does no more than authorize appropriate government agency to enter into a contract consistent with policy. (Reconstruction Finance Corp. v. MacArthur Mining Co., Inc., No. 14121, United States Court of Appeals, Eight Circuit, Nov. 6, 1950 [syllabus], 184 F. 2d 913.) Moreover, the payment of indemnity by the United States necessarily required an appropriation of public funds which could be made only by an act of Congress of the United States, and, as regards war losses or damages sustained in the Philippines later than July 1, 1942 (like those of Petitioner herein), no such appropriation law existed at the close of 1945 or before. The theory to the effect that an implied contract resulted from the announcement of said policy becomes clearly devoid of merit when we bear in mind that the President of the United States could have validly (though, perhaps, not wisely) changed said policy, without violating either the due process clause or the constitutional provision against impairment of contractual obligations. The accuracy of this self-evident propositions is impliedly admitted in Petitioners brief. Thus, in an effort to distinguish the case at bar from that of U. S. vs. White Dental Manufacturing Co., (supra,) cited in the decision of the Board of Tax Appeals, Petitioner stresses the fact that the obligation to pay cralaw compensation for war losses sustained by the Petitioner during the war was expressly provided by law (referring evidently to the Philippine Rehabilitation Act of 1946), and that no such legislation existed in the case of the White Dental Manufacturing Co. This is an implicit, but, clear, acknowledgment of the fact that Petitioners right to indemnity for its war losses accrued upon the approval of said Act of Congress of the United States. In short, such right did not exist, in legal contemplation, during the year 1945. In fact,Petitioner says that its right to compensation was created by law and entered into the statute book (p. 39, Petitioners Brief). Hence, it could have no legal recognition, much less any juridical effect, prior to April 30, 1946, when said legislation was approved and became effective. Thus, in the aforementioned hearings before the Committee on Territories and Insular Affairs of the Senate of the United States, counsel for the War Damage Corporation expressed the following view:chanroblesvirtuallawlibrary

The words or otherwise in law, when used as a general phrase following an enumeration of particulars, are commonly interpreted in a restricted sense, as referring to such other matters as are kindred to the classes before mentioned, receiving an ejusdem generis interpretation. New York Life Ins. Co. vs. McDearmon, 114 S. W. 57, 59, 133 Mo. App. 671; chan roblesvirtualawlibraryFleming vs. City of Rome, 61 S. E. 5, 6, 130 Ga. 383. (30 Words & Phrases, pp. 495, 496; chan roblesvirtualawlibraryemphasis supplied.) The word otherwise in provision of Revenue Act for allowance of losses, sustained by corporation during taxable year and not compensated for by insurance or otherwise, as deductions in computing its net income, must be construed as limited in application by rule noscitur a sociis. Revenue Act 1928, sec. 23(f) 26 U.S.C.A. Sec. 23( f ). Comar Oil Co. v. Helvering, C.C.A. 8, 107 F. 2d 709, 711. (30 Words & Phrases, 1955 Cumulative Annual Pocket Part, p. 124; chan roblesvirtualawlibraryemphasis supplied.) In other words, the vocable otherwise in the clause compensated for by insurance or otherwise (in section 30 of our National Internal Revenue Code) should be construed to refer to compensation due under a title analogous or similar to insurance. Inasmuch as the latter is a contract establishing a legal obligation (Sec. 2, Art. No. 2427), it follows that in order to be deemed compensated for cralaw otherwise, the losses sustained by a taxpayer must be covered by a judicially enforceable right, springing from any of the juridical sources of obligations, namely:chanroblesvirtuallawlibrary law, contract, quasi- contract, torts or crime (Art. 1157, Civil Code of the Philippines; chan roblesvirtualawlibraryArt. 1089, Civil Code of Spain). Hence, Mertens, in his work on the Law of Federal Income Taxation (Vol. 5, p. 104), states:chanroblesvirtuallawlibrary cralaw The term or otherwise is broad enough to cover any form of off-setting benefit as well as acutal recoupment. However, there must be a measurable right to compensation for the loss with ultimate collection reasonably clear. (Emphasis supplied.) Thus, deduction may not be claimed when the taxpayer is indemnified against loss by a third partys guaranty (Dunne vs. Commissioner of Internal Revenue, 75 F. 2d 255; chan roblesvirtualawlibraryLewellyn vs. Electric Reduction Co., 275 U.S. 243) or by an insurance policy (Allied Turriers Corporation vs. Commissioner, 24 BTA 457; chan roblesvirtualawlibraryHarwick vs. Commissioner, TC Memo, October 4, 1949 affd 184 F. 2d 825; chan roblesvirtualawlibrarythe case of Rose Licht, 37 BTA 1096); chan roblesvirtualawlibraryor when the guilty party is bound to indemnify said loss, it being the result of a breach of contract (Foley et al vs. Commissioner of Internal Revenue, 94 F. 2d 958; chan roblesvirtualawlibraryLucas vs. American Code Co., 280 U. S. 445; chan roblesvirtualawlibraryLouisville Trust Co. vs. Glen. 33 F. Supp. 403, affd 124 F. 2d 418; chan roblesvirtualawlibraryBernard Schulenklooper, T. C. Memo. Par. 47203, P. H.); chan roblesvirtualawlibraryor when the damages resulting from one phase of a given transaction are offset by the benefits derived from another phase of the same transaction (Taylor vs. MacLaughlin, 30 F. Supp. 19). In these cases, there was a legal right to be indemnified and, hence, compensated. Even, however, if there were such right, the loss would be deductible in the year in which it took place materially, when the possibility of recovery is remote (E. R. Hawks, 35 BTA 784). For this reason, it was held in Commissioner of Internal Revenue vs. Thalcher & Son, 76 F. 2d 900 (CCA 2nd, 1935) that a general contractors claim against a defaulting subcontractor for damages was too contingent and uncertain to be regarded as compensated for in the year in which the default took place. Similarly, in U. S. vs. White Dental Manufacturing Co. (274 U. S. 398, 71 L. ed. 1120, 47 S. Ct. 598), the losses sustained by a Pennsylvania Corporation, on account of the mismanagement of its properties, in Berlin, by the German Government, which seized those properties in March, 1918, were deductible from the gross income in that year. In this connection, we should bear in mind that the rules of international law expressly forbid the confiscation of private property owned by an enemy (see Arts. 46 and 47 of the Hague Regulations; chan roblesvirtualawlibraryHaw Pia vs. China Banking Corporation, 80 Phil., 604), and that, accordingly the latter was legally entitled to compensation for said losses. This fact did not bar, however, the deduction thereof from the gross income of the taxpayer, the possibility of collecting said compensation being dependent upon the hazards of the war then in progress. At any rate, there has never been any case in which the words or otherwise, in the income tax law, have been held to include the hope, or even the moral certainty, that a proposed legislation - authorizing payment of an indemnity, not due, either under the general principles of law, or under any particular statute would eventually be approved.

In the opinion of Counsel for the Reconstruction Finance Corporation and War Damage Corporation neither the United States Government nor the War Damage Corporation is legally committed to make payment on account of war damages in the Philippine Islands either by reason of the press release of December 22, 1941, or the Act of March 27, 1942. In our opinion, the United States Government and War Damage Corporation are morally committed to the payment of war damages that occurred in the Philippine Island after December 6, 1941, and before July 1, 1942, to the extent of reasonable protection for all such damages, but not in excess of approximately $99,000,000, which represents the limitation of $100,000,000 stated in the press release of December 13, 1941, less disbursements made and hereafter to be made on account of war damage which occurred between December 6, 1941, and July 1, 1942, in the United States or its territories and possessions, exclusive of the Philippine Islands. xxx xxx xxx

Act No. 1780 is entitled as follows: chanrobles virtualawlibrary An Act to regulate the importation, acquisition, possession, use, and transfer of firearms, and to prohibit the possession of same except in compliance with the provisions of this Act. Section 26 of this Act is in part as follows: chanrobles virtualawlibrary It shall be unlawful for any person to carry concealed about his person any bowie knife, dirk, dagger, kris, or other deadly weapon: chanrobles virtualawlibrary Provided, That this prohibition shall not apply to firearms in possession of persons who have secured a license therefor or who are entitled to carry same under the provisions of this Act. The amended complaint in this case is as follows: chanrobles virtualawlibrary The undersigned accuses Victor Santo Nino of the violation of Act No. 1780, committed as follows: chanrobles virtualawlibrary That on or about the 16th day of August, 1908, in the city of Manila, Philippine Islands, the said Victor Santo Nino, voluntarily, unlawfully, and criminally, had in his possession and concealed about his person a deadly weapon, to wit: chanrobles virtualawlibrary One (1) iron bar, about 15 inches in length provided with an iron ball on one end and a string on the other to tie to the wrist, which weapon had been designed and made for use in fighting, and as a deadly weapon. With violation of the provisions of section 26 of Act No. 1780 of the Philippine Commission. A demurrer to this complaint was sustained in the court below the Government has appealed. The basis for the holding of the court below was that The words or other deadly weapon only signify a kind of weapon included within the preceding classification. In other words, the rule of ejusdem generis must be applied in the interpretation of this law, which rule is as follows: chanrobles virtualawlibrary The most frequent application of this rule is found where specific and generic terms of the same nature are employed in the same act, the latter following the former. While in the abstract, general terms are to be given their natural and full signification, yet where they follow specific words of a like nature they take their meaning from the latter, and are presumed to embrace only things or persons of the kind designated by them. In short, the court below held that the carrying of a revolver concealed about the person would not be a violation of this Act. The rule of construction above referred to is resorted to only for the purpose of determining what the intent of the legislature was in enacting the law. If that intent clearly appears from other parts of the law, and such intent thus clearly manifested is contrary to the result which would reached by application of the rule of ejusdem generis, the latter must give way. In this case the proviso of the Act clearly indicates that in the view of the legislature the carrying of an unlicensed revolver would be a violation of the Act. By the proviso it manifested its intention to include in the prohibition weapons other than the armas blancas therein specified. The judgment of the court below is reversed, and the case is remanded for further proceedings. No costs will be allowed to either party in this court. SO ORDERED. SECOND DIVISION G.R. No. 148408 July 14, 2006

In our opinion, we are not legally or morally committed to pay for war damages which occurred in the Philippine Islands before December 6, 1941, or after July 1, 1942. The feeling that the United States had no legal obligation to indemnify war losses like those sustained by herein Petitioner was such that, speaking before the same Committee, as member of the Philippine Rehabilitation Commission, Tomas L. Cabili, said:chanroblesvirtuallawlibrary I was more impressed by the fact that while it is claimed that there is no legal obligation on the part of the United States to compensate the Philippines for the destruction caused by this war, yet it is recognized that a moral obligation exists. To me moral obligations are more binding, as legal obligations might be circumvented. It is to the great credit of the American people that they should approach this problem from the moral standpoint. Needless to say, the Government of the United States was under no legal obligation to pay indemnity for losses caused by the enemy in the Philippines. Neither was it liable for damages caused by the American forces during its war operations therein, in conformity with the laws and customs of war. (U. S. vs. Caltex [Philippines], Inc., et al., 97 L. ed. 157; chan roblesvirtualawlibraryU. S. vs. Pacific R. Co., 120 U. S. 227; chan roblesvirtualawlibraryJuragua Iron Co. vs. U. S., 212 U. S. 297). Consequently, the indemnity provided for in the Philippine Rehabilitation Act of 1946 was purely an obligation voluntarily assumed solely for moral considerations, and did not exist as a legal obligation prior to the approval of said Act on April 30, 1946. Evidently, Petitioner shared this view in 1945, 1946 and 1947, for its conduct during those years clearly indicates that it did not believe its war losses in 1945 were then compensated for by insurance or otherwise. This is borne out by the fact that it deducted part of said losses (P22,492.50) from its gross income of P56,430.21 in 1945. 5 In other words, it thus regarded its war losses as closed and completed transactions during the year 1945. It likewise, charged off said losses, partly (P37,875.00) in 1946 (when its gross income amounted to P129,778.20) 6 and partly (P194,315.25) in 1947 (when its gross income amounted to P324,512.50). 7 ThusPetitioner, in effect, represented to the Government that it did not consider the question relative to its war losses as having been left open, in 1945, by the statements of officers of the Government of the United States, above referred to, by the introduction of the bill which later on became the Philippine Rehabilitation Act of 1946, and by the approval thereof, and that said question was closed prior to receipt of the aforementioned notice of the Philippine War Damage Commission in November, 1950. In fact, 8 Petitioner did not include in his income tax return for 1950 any deduction for war losses, although the same were not fully covered by the indemnity paid by said Commission. Consequently, Petitioner is now estopped from maintaining that said war losses were compensated for by insurance or otherwise in 1945. Wherefore, the decision appealed from is hereby affirmed, with costs against the Petitioner. It is SO ORDERED. Paras, C.J., Padilla, Bautista Angelo, Labrador, Endencia and Felix JJ., concur. [G. R. No. 5000. March 11, 1909.] THE UNITED STATES, Plaintiff-Appellant, vs. VICTOR SANTO NIO, Defendant-Appellee.

CONCEPCION PARAYNO, petitioner, vs. JOSE JOVELLANOS and the MUNICIPALITY OF CALASIAO, PANGASINAN,* respondents. DECISION

DECISION WILLARD, J.:

CORONA, J.:

This is a petition for review on certiorari under Rule 45 of the 1997 Rules of Court questioning the resolution of the Court of Appeals (CA) which dismissed the petition for certiorari, mandamus and prohibition, with prayer for issuance of a preliminary and mandatory injunction, filed by petitioner Concepcion Parayno against respondents Jose Jovellanos and the Municipality of Calasiao, Pangasinan. Petitioner was the owner of a gasoline filling station in Calasiao, Pangasinan. In 1989, some residents of Calasiao petitioned the Sangguniang Bayan (SB) of said municipality for the closure or transfer of the station to another location. The matter was referred to the Municipal Engineer, Chief of Police, Municipal Health Officer and the Bureau of Fire Protection for investigation. Upon their advise, the Sangguniang Bayan recommended to the Mayor the closure or transfer of location of petitioner's gasoline station. In Resolution No. 50, it declared: a) xxx the existing gasoline station is a blatant violation and disregard of existing law to wit: The Official Zoning Code of Calasiao, Art. 6, Section 44,1 the nearest school building which is San Miguel Elementary School and church, the distances are less than 100 meters. No neighbors were called as witnesses when actual measurements were done by HLURB Staff, Baguio City dated 22 June 1989. b) The gasoline station remains in thickly populated area with commercial/residential buildings, houses closed (sic) to each other which still endangers the lives and safety of the people in case of fire. Moreover, additional selling and storing of several LPG tanks in the station (sic). c) The residents of our barangay always complain of the irritating smell of gasoline most of the time especially during gas filling which tend to expose residents especially children to frequent colds, asthma, cough and the like nowadays. d) xxx the gasoline station violated Building and Fire Safety Codes because the station has 2nd floor storey building used for business rental offices, with iron grilled windows, no firewalls. It also endangers the lives of people upstairs. e) It hampers the flow of traffic, the gasoline station is too small and narrow, the entrance and exit are closed to the street property lines. It couldn't cope situation (sic) on traffic because the place is a congested area.2 Petitioner moved for the reconsideration of the SB resolution but it was denied. Hence, she filed a special civil action for prohibition and mandamus with the Regional Trial Court (RTC) of Dagupan City, Branch 44 against respondents. The case, docketed as SP Civil Case No. 99-03010-D, was raffled to the sala of Judge Crispin Laron. Petitioner claimed that her gasoline station was not covered by Section 44 of the Official Zoning Code since it was not a "gasoline service station" but a "gasoline filling station" governed by Section 21 thereof. She added that the decision of the Housing and Land Use Regulatory Board (HLURB),3 in a previous case filed by the same respondent Jovellanos against her predecessor (Dennis Parayno), barred the grounds invoked by respondent municipality in Resolution No. 50. In the HLURB case, respondent Jovellanos opposed the establishment of the gas station on the grounds that: (1) it was within the 100meter prohibited radius under Section 44 and (2) it posed a pernicious effect on the health and safety of the people in Calasiao. After the hearing on the propriety of issuing a writ of preliminary prohibitory and mandatory injunction, the trial court ruled: There is no basis for the court to issue a writ of preliminary prohibitory and mandatory injunction. Albeit,Section 44 of the Official Zoning Code of respondent municipality does not mention a gasoline filling station, [but] following the principle of ejusdem generis, a gasoline filling station falls within the ambit of Section 44. The gasoline filling station of the petitioner is located under the establishment belonging to the petitioner and is very near several buildings occupied by several persons. Justice dictates that the same should not be allowed to continue operating its business on that particular place. Further, the gasoline filling station

endangers the lives and safety of people because once there is fire, the establishment and houses nearby will be razed to the ground.4(emphasis supplied) Petitioner moved for reconsideration of the decision but it was denied by the trial court. Petitioner elevated the case to the CA via a petition for certiorari, prohibition and mandamus,5 with a prayer for injunctive relief. She ascribed grave abuse of discretion, amounting to lack or excess of jurisdiction, on the part of Judge Laron who dismissed her case. After the CA dismissed the petition, petitioner filed a motion for reconsideration but the same was denied. Hence, this appeal. Before us, petitioner insists that (1) the legal maxim of ejusdem generis did not apply to her case; (2) the closure/transfer of her gasoline filling station by respondent municipality was an invalid exercise of the latter's police powers and (3) it was the principle of res judicata that applied in this case.6 We find merit in the petition. The Principle of Ejusdem Generis We hold that the zoning ordinance of respondent municipality made a clear distinction between "gasoline service station" and "gasoline filling station." The pertinent provisions read: xxx xxx xxx

Section 21. Filling Station. A retail station servicing automobiles and other motor vehicles with gasoline and oil only.7 xxx xxx xxx

Section 42. Service Station. A building and its premises where gasoline oil, grease, batteries, tires and car accessories may be supplied and dispensed at retail and where, in addition, the following services may be rendered and sales and no other. a. Sale and servicing of spark plugs, batteries, and distributor parts; b. Tire servicing and repair, but not recapping or regrooving; c. Replacement of mufflers and tail pipes, water hose, fan belts, brake fluids, light bulbs, fuses, floor mats, seat covers, windshield wipers and wiper blades, grease retainers, wheel, bearing, mirrors and the like; d. Radiator cleaning and flushing; e. Washing and polishing, and sale of automobile washing and polishing materials; f. Grease and lubricating; g. Emergency wiring repairs; h. Minor servicing of carburators;

i. Adjusting and repairing brakes; j. Minor motor adjustments not involving removal of the head or crankcase, or raising the motor.8 xxx xxx xxx

As a rule, this Court does not pass upon evidence submitted by the parties in the lower courts.18 We deem it necessary, however, to recall the findings of the HLURB which petitioner submitted as evidence during the proceedings before the trial court, if only to underscore petitioner's compliance with the requirements of law before she put up her gasoline station. Another factor that should not be left unnoticed is the diligence exercised by [petitioner] in complying with the requirements of the several laws prior to the actual implementation of the project as can be attested by the fact that [petitioner] has secured the necessary building permit and approval of [her] application for authority to relocate as per the letter of the Energy Regulatory Board xxx.19 On the alleged hazardous effects of the gasoline station to the lives and properties of the people of Calasiao, we again note: Relative to the allegations that the project (gasoline station) is hazardous to life and property, the Board takes cognizance of the respondent's contention that the project "is not a fire hazard since petroleum products shall be safely stored in underground tanks and that the installation and construction of the underground tanks shall be in accordance with the Caltex Engineering Procedures which is true to all gasoline stations in the country. xxx Hence, the Board is inclined to believe that the project being hazardous to life and property is more perceived than factual. For, after all, even the Fire Station Commander, after studying the plans and specifications of the subject proposed construction, recommended on 20 January 1989, "to build such buildings after conform (sic) all the requirements of PP 1185." It is further alleged by the complainants that the proposed location is "in the heart of the thickly populated residential area of Calasiao." Again, findings of the [HLURB] staff negate the allegations as the same is within a designated Business/Commercial Zone per the Zoning Ordinance. xxx20 (emphasis supplied) The findings of fact of the HLURB are binding as they are already final and conclusive vis--vis the evidence submitted by respondents. The Principle of Res Judicata Petitioner points out that the HLURB decision in the previous case filed against her predecessor (Dennis Parayno) by respondent Jovellanos had effectively barred the issues in Resolution No. 50 based on the principle of res judicata. We agree. Res judicata refers to the rule that a final judgment or decree on the merits by a court of competent jurisdiction is conclusive of the rights of the parties or their privies in all later suits on all points and matters determined in the former suit.21 For res judicata to apply, the following elements must be present: (1) the judgment or order must be final; (2) the judgment must be on the merits; (3) it must have been rendered by a court having jurisdiction over the subject matter and the parties and (4) there must be, between the first and second actions, identity of parties, of subject matter and of cause of action.22 Respondent municipality does not contest the first, second and third requisites. However, it claims that it was not a party to the HLURB case but only its co-respondent Jovellanos, hence, the fourth requisite was not met. The argument is untenable. The absolute identity of parties is not required for the principle of res judicata to apply.23 A shared identity of interests is sufficient to invoke the application of this principle.24 The proscription may not be evaded by the mere expedient of including an additional party.25 Res judicata may lie as long as there is a community of interests between a party in the first case and a party in the second case although the latter may not have been impleaded in the first.26 In the assailed resolution of respondent municipality, it raised the same grounds invoked by its co-respondent in the HLURB: (1) that the resolution aimed to close down or transfer the gasoline station to another location due to the alleged violation of Section 44 of the zoning ordinance and (2) that the hazards of said gasoline station threatened the health and safety of the public. The HLURB had already settled these concerns and its adjudication had long attained finality. It is to the interest of the public that there should be an end to litigation by the parties over a subject matter already fully and fairly adjudged. Furthermore, an individual should not be vexed twice for the same cause.27

It is evident from the foregoing that the ordinance intended these two terms to be separate and distinct from each other. Even respondent municipality's counsel admitted this dissimilarity during the hearing on the application for the issuance of a writ of preliminary prohibitory and mandatory injunction. Counsel in fact admitted: 1. That there exist[ed] an official zoning code of Calasiao, Pangasinan which [was] not yet amended; 2. That under Article III of said official zoning code there [were] certain distinctions made by said municipality about the designation of the gasoline filling station and that of the gasoline service station as appearing in Article III, Nos. 21 and 42, [respectively]; 3. That the business of the petitioner [was] one of a gasoline filling station as defined in Article III, Section 21 of the zoning code and not as a service station as differently defined under Article 42 of the said official zoning code; 4. That under Section 44 of the official zoning code of Calasiao, the term filling station as clearly defined under Article III, Section 21, [did] not appear in the wordings thereof;9(emphasis supplied) The foregoing were judicial admissions which were conclusive on the municipality, the party making them.10Respondent municipality thus could not find solace in the legal maxim of ejusdem generis11 which means "of the same kind, class or nature." Under this maxim, where general words follow the enumeration of particular classes of persons or things, the general words will apply only to persons or things of the same general nature or class as those enumerated.12 Instead, what applied in this case was the legal maxim expressio unius est exclusio alteriuswhich means that the express mention of one thing implies the exclusion of others.13 Hence, because of the distinct and definite meanings alluded to the two terms by the zoning ordinance, respondents could not insist that "gasoline service station" under Section 44 necessarily included "gasoline filling station" under Section 21. Indeed, the activities undertaken in a "gas service station" did not automatically embrace those in a "gas filling station." The Exercise of Police Powers Respondent municipality invalidly used its police powers in ordering the closure/transfer of petitioner's gasoline station. While it had, under RA 7160,14 the power to take actions and enact measures to promote the health and general welfare of its constituents, it should have given due deference to the law and the rights of petitioner. A local government is considered to have properly exercised its police powers only when the following requisites are met: (1) the interests of the public generally, as distinguished from those of a particular class, require the interference of the State and (2) the means employed are reasonably necessary for the attainment of the object sought to be accomplished and not unduly oppressive.15 The first requirement refers to the equal protection clause and the second, to the due process clause of the Constitution.16 Respondent municipality failed to comply with the due process clause when it passed Resolution No. 50. While it maintained that the gasoline filling station of petitioner was less than 100 meters from the nearest public school and church, the records do not show that it even attempted to measure the distance, notwithstanding that such distance was crucial in determining whether there was an actual violation of Section 44. The different local offices that respondent municipality tapped to conduct an investigation never conducted such measurement either. Moreover, petitioner's business could not be considered a nuisance which respondent municipality could summarily abate in the guise of exercising its police powers. The abatement of a nuisance without judicial proceedings is possible only if it is a nuisance per se. A gas station is not a nuisance per se or one affecting the immediate safety of persons and property,17 hence, it cannot be closed down or transferred summarily to another location.

WHEREFORE, the petition is hereby GRANTED. The assailed resolution of the Court of the Appeals isREVERSED and SET ASIDE. Respondent Municipality of Calasiao is hereby directed to cease and desist from enforcing Resolution No. 50 against petitioner insofar as it seeks to close down or transfer her gasoline station to another location. No costs. SO ORDERED. Puno, Chairperson, Sandoval-Gutierrez, Azcuna, Garcia, J.J., concur. FIRST DIVISION

On March 16, 2000, the Court of Appeals issued a Temporary Restraining Order enjoining the Office of the Ombudsman from implementing the suspension order against private respondent.[7] On March 20, 2000, private respondent filed an amended petition impleading the herein petitioners. [8] On motion of the Office of the Solicitor General, the Court of Appeals dropped the names of the impleaded members of the Office of the Ombudsman pursuant to Section 6, Rule 43 of the 1997 Rules of Civil Procedure.[9] On May 18, 2000, a resolution was issued granting private respondents prayer for the issuance of a Writ of Preliminary Mandatory Injunction against the execution of private respondents suspension. In the same resolution, petitioners were asked to explain why they should not be cited in contempt of court for failing to comply with the Temporary Restraining Order dated March 16, 2000. The dispositive portion thereof reads: WHEREFORE, premises considered, the Urgent Motion for the Issuance of Writ of Preliminary Mandatory Injunction is hereby granted. Let a writ of preliminary mandatory injunction be issued enjoining respondents from implementing immediately the assailed decision of the Ombudsman to suspend petitioner for six (6) months and one (1) day without pay pending final determination of the petition for review by petitioner before this Court. It appearing that respondents failed to implement the resolution of the Court dated March 16, 2000 ordering the issuance of a temporary restraining order restraining respondents from enforcing the assailed decision dated January 6, 2000 and order dated February 4, 2000 of the Office of the Ombudsman, they are hereby ordered to explain within ten (10) days from notice why they should not be cited for indirect contempt of court. SO ORDERED.[10] On May 31, 2000, petitioners, by way of Explanation, [11] manifested to the Court of Appeals that they could not have complied with or implemented the TRO dated March 16, 2000 since they were not yet parties to the case at the time of its issuance. Even assuming that the order was applicable to them, the same was rendered moot and academic by petitioners suspension on March 8, 2000. On June 27, 2000, petitioners motion for reconsideration was denied. [12] On the same date, the Court of Appeals ordered petitioners, under pain of contempt, to reinstate private respondent to his former position pending resolution of his appeal.[13] Hence, on July 7, 2000, private respondent was reinstated as Manager of the Legal Department and Resident Ombudsman of PCSO.[14] In the present recourse, petitioners contend that the Court of Appeals gravely abused its discretion in enjoining the execution of petitioners suspension pending appeal. The petition is without merit. Section 27 of Republic Act No. 6770[15] provides: Section 27. Effectivity and Finality of Decisions. (1) All provisionary orders of the Office of the Ombudsman are immediately effective and executory. A motion for reconsideration of any order, directive or decision of the Office of the Ombudsman must be filed within five (5) days after receipt of written notice and shall be entertained only on the following grounds: xxx Findings of fact of the Office of the Ombudsman when supported by substantial evidence are conclusive. Any order, directive or decision imposing the penalty of public censure or reprimand, suspension of not more than one months salary shall be final and unappealable. In all administrative disciplinary cases, orders, directives or decisions of the Office of the Ombudsman may be appealed to the Supreme Court by filing a petition for certiorari within ten (10) days from receipt of the written notice of the order, directive or decision or denial of the motion for reconsideration in accordance with Rule 45 of the Rules of Court. xxx xxx x x x.

[G.R. No. 144573. September 24, 2002]

ROSARIO N. LOPEZ, in her capacity as Chairman of the PHILIPPINE CHARITY SWEEPSTAKES OFFICE (PCSO), RICARDO G. GOLPEO, in his capacity as PCSO General Manager, MARIA PAZ A. MAGSALIN, in her capacity as PCSO Assistant General Manager for Administration, Atty. Villamin Lam and the PCSO Board of Directors, petitioners, vs. COURT OF APPEALS and ROMEO A. LIGGAYU, respondents. DECISION YNARES-SANTIAGO, J.: Are decisions of the Ombudsman imposing the penalty of six (6) months and one (1) day suspension without pay immediately executory pending appeal? Before us is a petition for certiorari under Rule 65 of the Rules of Court assailing the May 18, 2000 resolution [1] of the Court of Appeals[2] in CA-G.R. SP No. 57588, which granted respondents prayer for the issuance of a Writ of Preliminary Mandatory Injunction enjoining the implementation of respondents suspension pending appeal. The antecedent facts are as follows: Private respondent Atty. Romeo A. Liggayu, Manager of the Legal Department and Resident Ombudsman of the Philippine Charity Sweepstakes Office (PCSO), was administratively charged before the Office of the Ombudsman with: 1) Violation of Republic Act No. 6770 (Ombudsman Act of 1989), for issuing a subpoena without authority purportedly in relation to OMB-0-99-0571 entitled, FACT-FINDING AND INTELLIGENCE BUREAU versus MANUEL MORATO, et al.; and 2) complicity in the anomalous contracts entered into by PCSO and Golden Lion Films for the production of 1,092 episodes of Ang Pangarap Kong Jackpot, subject matter of OMB-0-99-0571 and 0572 entitled, FFIB vs. MANUEL MORATO, et al. and OMB-ADM-0-99-0254 entitled, FFIB vs. ISRAEL G. ESTRELLA, et al.[3] On January 6, 2000, the Office of the Ombudsman dismissed the charge against private respondent in connection with the said anomalous contracts of the PCSO but found him guilty of Conduct Prejudicial To The Best Interest Of The Service for issuing a subpoena in relation to OMB-0-99-0571 entitled, FACT-FINDING AND INTELLIGENCE BUREAU versus MANUEL MORATO, et al., in excess of his authority as Resident Ombudsman of PCSO. Thus, the Office of the Ombudsman imposed upon him the penalty of one (1) year suspension without pay. [4] Later, the penalty was modified to six (6) months and one (1) day suspension without pay.[5] Private respondents motion for reconsideration was denied. On March 6, 2000, a petition for review was filed by the private respondent before the Court of Appeals via Rule 43 of the Rules of Court and prayed for the issuance of a temporary restraining order/and or writ of preliminary injunction to restrain the execution of the decision of the Office of the Ombudsman. Meanwhile, on March 8, 2000, petitioners implemented the suspension of private respondent in compliance with the directive of the Office of the Ombudsman.
[6]

Rule III, Section 7 of the Rules of Procedure of the Office of the Ombudsman,[16] states: Sec. 7. Finality of Decision. Where the respondent is absolved of the charge and in case of conviction where the penalty imposed is public censure or reprimand, suspension of not more than one month, or a fine not equivalent to one month salary, the decision shall be final and unappealable. In all other cases, the decision shall become final after the expiration of ten (10) days from receipt thereof by the respondent, unless a motion for reconsideration or petition for certiorari, shall have been filed by him as prescribed in Section 27 of R.A. 6770. Construing the above-quoted provisions, the Court held in Lapid v. Court of Appeals[17] that only orders, directives or decisions of the Office of the Ombudsman in administrative cases imposing the penalty of public censure, reprimand, or suspension of not more than one month, or a fine not equivalent to one month salary shall be final and unappealable hence, immediately executory. In all other disciplinary cases where the penalty imposed is other than public censure, reprimand, or suspension of not more than one month, or a fine not equivalent to one month salary, the law gives the respondent the right to appeal. In these cases, the order, directive or decision becomes final and executory only after the lapse of the period to appeal if no appeal is perfected, or after the denial of the appeal from the said order, directive or decision. It is only then that execution shall perforce issue as a matter of right. The fact that the Ombudsman Act gives parties the right to appeal from its decisions should generally carry with it the stay of these decisions pending appeal. Otherwise, the essential nature of these judgments as being appealable would be rendered nugatory. As explained by the Court x x x Section 27 states that all provisionary orders of the Office of the Ombudsman are immediately effective and executory; and that any order, directive or decision of the said Office imposing the penalty of censure or reprimand or suspension of not more than one [month, or a fine not equivalent to one month salary], is final and unappealable. As such the legal maxim [expressio] unius est exclusio [alterius] finds application. The express mention of the things included excludes those that are not included. The clear import of these statements taken together is that all other decisions of the Office of the Ombudsman which impose penalties that are not enumerated in the said section 27 are not final, unappealable and immediately executory. An appeal timely filed, such as the one filed in the instant case, will stay the immediate implementation of the decision. This finds support in the Rules of Procedure issued by the Ombudsman itself which states that (I)n all other cases, the decision shall become final after the expiration of ten (10) days from receipt thereof by the respondent, unless a motion for reconsideration or petition for certiorari (should now be petition for review under Rule 43) shall have been filed by him as prescribed in Section 27 of R.A. 6770.[18] Petitioners claim that the applicable provision is Rule 43, Section 12 of the 1997 Rule of Civil Procedure, which provides that [t]he appeal shall not stay the award, judgment, final order or resolution sought to be reviewed unless the Court of Appeals shall direct otherwise upon such terms as it may deem just, lacks merit. While it is true that in Fabian v. Desierto,[19] the Court declared unconstitutional Section 27 of Republic Act No. 6770, and all other provisions of law implementing the same, the declaration should be interpreted to mean that the said provisions are void only insofar as they provide that administrative appeals from the Office of the Ombudsman shall be taken to the Supreme Court. Under the 1997 Rules of Civil Procedure, the proper forum for administrative appeals from the Office of the Ombudsman is the Court of Appeals. The provisions of Section 27 of Republic Act No. 6770 and the Rules of Procedure of the Office of the Ombudsman with respect to the finality and execution of decisions are not affected by the ruling in Fabian v. Desierto, and therefore still stand. It is a fundamental principle in statutory construction that a statute may be constitutional in one part and unconstitutional in another and that if the invalid part is severable from the rest, the portion which is unconstitutional may stand while that which is constitutional is stricken out and rejected. Whenever a statute contains unobjectionable provisions separable from those found to be unconstitutional, it is the duty of the court to so declare and to maintain the act insofar as it is valid. The separability clause found in Section 40 of Republic Act No. 6770 creates the presumption that the legislature intended separability, rather than complete nullity of the statute.[20] Likewise, the Court finds unavailing the claim of petitioners that the stay of execution pending appeal from the order, directive or decision of the Office of the Ombudsman violates the equal protection clause for being unfair to government employees charged under the Civil Service Law, where the decisions in disciplinary cases are immediately executory. The legislature has seen fit to grant a stay of execution pending appeal from disciplinary cases where the penalty imposed by the Office of the Ombudsman is not public censure, reprimand, or suspension of not more than one month, or a fine not equivalent to one month salary. Courts may not, in the guise of interpretation, enlarge the scope of a statute and include therein situations not provided or intended by the lawmakers. An omission at the time of enactment, whether careless or calculated, cannot be judicially supplied notwithstanding that later wisdom may recommend the inclusion.[21] All told, the Court of Appeals committed no grave abuse of discretion in issuing the Writ of Preliminary Mandatory Injunction enjoining the execution of private respondents suspension pending appeal. The penalty imposed on private respondent for Conduct Prejudicial To The Best Interest of The Service was six (6) months and one (1) day suspension without pay. Considering that private respondent appealed from the decision of the Office of the Ombudsman, the stay of execution of the penalty of suspension should therefore issue as a matter of right.

Finally, the Court of Appeals did not abuse its discretion in directing petitioners to explain within ten (10) days from notice why they should not be cited for indirect contempt of court for failing to implement the resolution dated March 16, 2000 restraining the execution pending appeal of the January 6, 2000 decision and February 4, 2000 order of the Office of the Ombudsman. It is within the inherent powers of the Court of Appeals to ensure compliance with its lawful orders. WHEREFORE, in view of all the foregoing, the instant petition is DISMISSED, and the May 18, 2000 resolution of the Court of Appeals in CA-G.R. SP NO. 57588 is AFFIRMED. SO ORDERED. Davide, Jr., C.J., (Chairman), Vitug, and Carpio, JJ., concur. SECOND DIVISION G.R. No. 147749 June 22, 2006

SAN PABLO MANUFACTURING CORPORATION, Petitioner, vs. COMMISSIONER OF INTERNAL REVENUE,* Respondent. DECISION CORONA, J.: In this petition for review under Rule 45 of the Rules of Court, San Pablo Manufacturing Corporation (SPMC) assails the July 19, 20001 and April 3, 2001 resolutions of the Court of Appeals in CA-G.R. SP No. 59139. SPMC is a domestic corporation engaged in the business of milling, manufacturing and exporting of coconut oil and other allied products. It was assessed and ordered to pay by the Commissioner of Internal Revenue the total amount of P8,182,182.852 representing deficiency millers tax and manufacturers sales tax,3 among other deficiency taxes,4 for taxable year 1987. The deficiency millers tax was imposed on SPMCs sales of crude oil to United Coconut Chemicals, Inc. (UNICHEM) while the deficiency sales tax was applied on its sales of corn and edible oil as manufactured products. SPMC opposed the assessments but the Commissioner denied its protest. SPMC appealed the denial of its protest to the Court of Tax Appeals (CTA) by way of a petition for review docketed as CTA Case No. 5423. In its March 10, 2000 decision, the CTA cancelled SPMCs liability for deficiency manufacturers tax on the sales of corn and edible oils but upheld the Commissioners assessment for the deficiency millers tax. SPMC moved for the partial reconsideration of the CTA affirmation of the millers tax assessment but it was denied. SPMC elevated the case to the Court of Appeals via a petition for review of the CTA decision insofar as it upheld the deficiency millers tax assessment. In its July 19, 2000 resolution, the appellate court dismissed the petition on the principal ground5 that the verification attached to it was signed merely by SPMCs chief financial officer without the corporate secretarys certificate, board resolution or power of attorney authorizing him to sign the verification and certification against forum shopping. SPMC sought a reconsideration of the resolution but the same was denied. Hence, this petition. Did the Court of Appeals err when it dismissed SPMCs appeal? SPMC contends that its appeal should have been given due course since it substantially complied with the requirements on verification and certification against forum shopping. It insists on the liberal application of the rules because, on the merits of the petition, SPMC was not liable for the 3% millers tax. It maintains that the crude oil which it sold to UNICHEM was actually exported by UNICHEM as an ingredient of fatty acid and glycerine, hence, not subject to millers tax pursuant to Section 168 of the 1987 Tax Code. For SPMC, Section 168 of the 1987 Tax Code contemplates two exemptions from the millers tax: (a) the milled products in their original state were actually exported by the miller himself or by another person, and (b) the milled products sold by the

miller were actually exported as an ingredient or part of any manufactured article by the buyer or manufacturer of the milled products. The exportation may be effected by the miller himself or by the buyer or manufacturer of the milled products. Since UNICHEM, the buyer of SPMCs milled products, subsequently exported said products, SPMC should be exempted from the millers tax. The petition must fail. Under Rule 43, Section 5 of the Rules of Court, appeals from the CTA and quasi-judicial agencies to the Court of Appeals should be verified. A pleading required to be verified which lacks proper verification shall be treated as an unsigned pleading.6 Moreover, a petition for review under Rule 43 requires a sworn certification against forum shopping.7 Failure of the petitioner to comply with any of the requirements of a petition for review is sufficient ground for the dismissal of the petition.8 A corporation may exercise the powers expressly conferred upon it by the Corporation Code and those that are implied by or are incidental to its existence through its board of directors and/or duly authorized officers and agents.9 Hence, physical acts, like the signing of documents, can be performed only by natural persons duly authorized for the purpose by corporate by-laws or by specific act of the board of directors.10 In the absence of authority from the board of directors, no person, not even the officers of the corporation, can bind the corporation.11 SPMCs petition in the Court of Appeals did not indicate that the person who signed the verification/certification on nonforum shopping was authorized to do so. SPMC merely relied on the alleged inherent power of its chief financial officer to represent SPMC in all matters regarding the finances of the corporation including, among others, the filing of suits to defend or protect it from assessments and to recover erroneously paid taxes. SPMC even admitted that no power of attorney, secretarys certificate or board resolution to prove the affiants authority was attached to the petition. Thus, the petition was not properly verified. Since the petition lacked proper verification, it was to be treated as an unsigned pleading subject to dismissal.12 In PET Plans, Inc. v. Court of Appeals,13 the Court upheld the dismissal by the Court of Appeals of the petition on the ground that the verification and certification against forum shopping was signed by PET Plans, Inc.s first vice-president for legal affairs/corporate secretary without any certification that he was authorized to sign in behalf of the corporation. In BPI Leasing Corporation v. Court of Appeals,14 the Court ruled that the petition should be dismissed outright on the ground that the verification/certification against forum shopping was signed by BPI Leasing Corporations counsel with no specific authority to do so. Since the counsel was purportedly acting for the corporation, he needed a resolution issued by the board of directors that specifically authorized him to institute the petition and execute the certification. Only then would his actions be legally binding on the corporation.15 In this case, therefore, the appellate court did not commit an error when it dismissed the petition on the ground that it was signed by a person who had not been issued any authority by the board of directors to represent the corporation. Neither can the Court subscribe to SPMCs claim of substantial compliance or to its plea for a liberal application of the rules. Save for the most persuasive of reasons, strict compliance with procedural rules is enjoined to facilitate the orderly administration of justice.16 Substantial compliance will not suffice in a matter involving strict observance such as the requirement on non-forum shopping,17 as well as verification. Utter disregard of the rules cannot justly be rationalized by harping on the policy of liberal construction.18 But even if the fatal procedural infirmity were to be disregarded, the petition must still fail for lack of merit. As the CTA correctly ruled, SPMCs sale of crude coconut oil to UNICHEM was subject to the 3% millers tax. Section 168 of the 1987 Tax Code provided: Sec. 168. Percentage tax upon proprietors or operators of rope factories, sugar central mills, coconut oil mills, palm oil mills, cassava mills and desiccated coconut factories. Proprietors or operators of rope factories, sugar central and mills, coconut oil mills, palm oil mills, cassava mills and desiccated coconut factories, shall pay a tax equivalent to three percent (3%) of the gross value in money of all the rope, sugar, coconut oil, palm oil, cassava flour or starch, dessicated coconut,

manufactured, processed or milled by them, including the by-product of the raw materials from which said articles are produced, processed or manufactured, such tax to be based on the actual selling price or market value of these articles at the time they leave the factory or mill warehouse:Provided, however, That this tax shall not apply to rope, coconut oil, palm oil and the by-product of copra from which it is produced or manufactured and dessicated coconut, if such rope, coconut oil, palm oil, copra by-products and dessicated coconuts, shall be removed for exportation by the proprietor or operator of the factory or the miller himself, and are actually exported without returning to the Philippines, whether in their original state or as an ingredient or part of any manufactured article or products: Provided further, That where the planter or the owner of the raw materials is the exporter of the aforementioned milled or manufactured products, he shall be entitled to a tax credit of the miller's taxes withheld by the proprietor or operator of the factory or mill, corresponding to the quantity exported, which may be used against any internal revenue tax directly due from him: and Provided, finally, That credit for any sales, miller's or excise taxes paid on raw materials or supplies used in the milling process shall not be allowed against the miller's tax due, except in the case of a proprietor or operator of a refined sugar factory as provided hereunder. (emphasis supplied) The language of the exempting clause of Section 168 of the 1987 Tax Code was clear. The tax exemption applied only to the exportation of rope, coconut oil, palm oil, copra by-products and dessicated coconuts, whether in their original state or as an ingredient or part of any manufactured article or products, by the proprietor or operator of the factory or by the miller himself. The language of the exemption proviso did not warrant the interpretation advanced by SPMC. Nowhere did it provide that the exportation made by the purchaser of the materials enumerated in the exempting clause or the manufacturer of products utilizing the said materials was covered by the exemption. Since SPMCs situation was not within the ambit of the exemption, it was subject to the 3% millers tax imposed under Section 168 of the 1987 Tax Code. SPMCs proposed interpretation unduly enlarged the scope of the exemption clause. The rule is that the exemption must not be so enlarged by construction since the reasonable presumption is that the State has granted in express terms all it intended to grant and that, unless the privilege is limited to the very terms of the statute, the favor would be intended beyond what was meant.19 Where the law enumerates the subject or condition upon which it applies, it is to be construed as excluding from its effects all those not expressly mentioned. Expressio unius est exclusio alterius. Anything that is not included in the enumeration is excluded therefrom and a meaning that does not appear nor is intended or reflected in the very language of the statute cannot be placed therein.20 The rule proceeds from the premise that the legislature would not have made specific enumerations in a statute if it had the intention not to restrict its meaning and confine its terms to those expressly mentioned.21 The rule of expressio unius est exclusio alterius is a canon of restrictive interpretation.22 Its application in this case is consistent with the construction of tax exemptions in strictissimi juris against the taxpayer. To allow SPMCs claim for tax exemption will violate these established principles and unduly derogate sovereign authority. WHEREFORE, the petition is hereby DENIED. Costs against petitioner. SO ORDERED. RENATO C. CORONA Associate Justice WE CONCUR: EN BANC G.R. No. L-11554 May 27, 1959

SEVERINO DAGDAG, JR., petitioner, vs. HON. DELFIN FLORES, ETC., ET AL., respondents. Gervasio A. Sipin for petitioner. Rafael Ruiz and Graciano Regala for respondents. PARAS, C.J.: This is a petition for certiorari and prohibition seeking to annul the auction sale of the certificate of public convenience of Virginia Sembrano in favor of the Estate of Florencio P. Buan, conducted by the Deputy Sheriff of Ilocos Norte on November 18, 1957, pursuant to a third alias writ of execution issued by the judge of the Court of First Instance of the same province, all made respondents herein, and to prevent the approval of the sale by the respondents Public Service Commission. In a compromise agreement conditionally approved by the Court of First Instance of Ilocos Norte in Civil Case No. 1377, Alfredo Formoso and Virginia R. Sembrano transferred to Isabel, Miguela and Maximo, all surnamed Quirit, all their rights and interest in Public Convenience covered by Certificate No. 69144. On March 23, 1953, all the said Quirits executed in favor of above petitioner a Deed of Sale of the rights over the said certificate of public convenience. On June 27 1956, the Deputy Provincial Sheriff of the same court, in accordance with a second alias writ of execution issued by the said court in Civil Case No. 1734, levied on the lines covered by the aforesaid certificate. Petitioner immediately filed a "Third Party Claim" with the said sheriff as a consequence of which the movant for the second alias writ of execution was required to file a bond of P1,000 so as not to stay execution. On August 4, 1956, petitioner filed with same court, against the said deputy sheriff, a complaint for damages with preliminary injunction, which was subsequently dismissed for lack of cause of action. On appeal to this Court, the order of dismissal was affirmed. Upon the issuance of a third alias writ of execution (in the said Civil Case No. 1734), the lines were conditionally sold at public auction. Thus the present petition with this Court. Petitioner insists that he is a party in interest and is entitled to all his prayers, because there exists a "speed of Sale of Rights" by which the Quirits had transferred and sold to him their rights and interests in the said lines; that the order of the respondent sheriff fixing the bond in the amount of P2,000 to be filed by the plaintiffs in Civil Case No. 1734 is null and void. The primary consideration in the resolution of the case at bar is the determination of the petitioner's right to institute the case. Petitioner premises his action on the Deed of Transfer executed in his favor by the Quirits. By virtue thereof, he claims that he has acquired ownership of the certificate in question. We are brought therefore to the question did the said Deed of Transfer ever become effective as to yield the desired consequences? The deed in question recited the Transfer of the Quirits' rights over the said certificate which were to have been acquired for the Sembranos by virtue of a compromise settlement, the validity and effectivity of which was in turn conditioned on its approval by the court before which the case involving the said compromise settlement was pending. The court's approval was further subject to a prior approval of the transfer by the Public Service Commission. The said compromise settlement conditionally approved by the said court did not therefore become effective, the conditions imposed for its approval not having been fulfilled. There was no approval by the Public Service Commission. Our Civil Code provides: Article 1181. In conditional obligations, the acquisition of rights, as well as the extinguishment or loss of those already acquired, shall depend upon the happening of the event which constitutes the condition. Inasmuch as petitioner's grantors or transferors acquired no rights over the said certificate, nothing passed unto the former. A grantee cannot acquire better rights than what his grantor had. We have pointed out that the transfer without the approval and consent of the Public Service Commission, of a property covered by a franchise is not binding against said Commission and against third persons, and that the original grantee continues to be responsible under the franchise. (See case of Montoya vs. Ignacio, 94 Phil., 182; 50 Off. Gaz. [1], 108; Flores vs. Miranda, supra, p. 266; 57 Off. Gaz. [44], 7938). In view of the foregoing the present petition is dismissed, with costs against petitioner. So ordered.

Bengzon, Padilla, Montemayor, Reyes, A., Bautista Angelo, Labrador and Endencia, JJ., concur. Concepcion, J., concurs in the result. EN BANC G.R. No. L-5606 August 28, 1952

SIMPLICIO PENDON, petitioner-appellant, vs. JULITO DIASNES, respondent-appellee. G. D. Demaisip, F. Hortillas and C. D. for appellant. Golez and Del Rosario for appellee. TUASON, J.: This is an appeal by the plaintiff in a quo warranto proceeding instituted in the Court of First Instance of Iloilo. The petitioner sought to have the defendant, who had been elected municipal mayor of Dumangas, Iloilo, in the general election of November 13, 1951, declared ineligible to that office by reason of a previous conviction for a criminal offense. It is admitted that Julito Diasnes the defendant, was found guilty of estafa and sentenced to one year and one day of imprisonment by the Court of First Instance of Iloilo in 1932, a sentence which was fully extinguished partly in the provincial jail of Iloilo and partly in Bilibid Prison, the prisoner having been released on September 25, 1933. But the defendant alleged that he had been granted absolute pardon by the Governor General sometime in 1934. Only oral evidence was presented to prove the alleged pardon, as copies of it, as well as the original, were said to have been unavailable, and the question on which the appellant devotes much space in his brief deals with the admissibility and sufficiency of this evidence. To prove the unavailability of any copy of the pardon, the defendant introduced (1) deposition (Exhibit "6") of Atty. Honorato B. Masakayan, Executive Officer and Secretary of the Board of Pardon and Parole, who declared that all the records of his office had been destroyed in the last war; (2) deposition (Exhibit "7") of Emilio Punzalan, Chief of the Records Division of the Office of the President who testified to the same effect with reference to the records of the office; (3) deposition (Exhibit "U") of Jose M. Abrigo, Identification Clerk and Custodian of the Records of the Bureau of Prisons, taken in behalf of the appellant himself, stating that there was no record of the plaintiffs' pardon in that bureau but that when pardon was granted after the release of the prisoner copy thereof was not always furnished to the prison authorities; (4) certificate and testimony by the Clerk of Court of Iloilo to the effect that all pre-war records of his office had been destroyed; (5) certificate by the Director of Civil Service stating that there was no record of Diasnes' pardon in his office and that some of the records of said office "were lost or destroyed during the last Pacific War." Regarding the original, the defendant testified that it was burned along with his house when the dwelling was set on fire by the Japanese during the occupation. All these proofs, including the certificates, were admissible in evidence and competent, and constitute sufficient foundation for the introduction of the secondary evidence of the nature and contents of the pardon. Such nature and contents were testified to by the defendant and other witnesses who claimed to have seen or helped procure the pardon, and found by the trial court to be as averred in the answer. These findings are conclusive as far as this Court is concerned, the appellant having elevated the case to the Supreme Court for review on the express statement that only questions of law would be raised. What is more, if we are to believe, as the court below believed, that executive clemency was extended to the defendant, the pardon could not have been other than plenary and absolute, considering the purpose for which it was issued, namely: to enable the beneficiary to exercise the right of suffrage. The other contention is "that the court below erred in not holding that pardon does not remove the incapacity or disqualifications as a voter in matters of convictions of crime against property," (14th assignment of error). This question stemmed from the apparent ambiguity of section 99 of Republic Act No. 180 as amended by Republic Act No. 599, which provides:

The following persons shall not be qualified to vote: (a) Any person who has been sentenced by final judgment to suffer one year or more of imprisonment, such disability not having been removed by plenary pardon. (b) Any person who has been declared by final judgment guilty of any crime against property. (c) Any person who has violated his allegiance to the Republic of the Philippines. (d) Insane or feeble-minded persons. (e) Persons who can not prepare their ballots themselves. The same problem was posed in the case of Cristobal vs. Labrador, 71 Phil., 34, arising from substantially the same facts as those in the present case prior to conviction for estafa and after service on the penalty. In the case this court held that "An absolute pardon not only blots out the crime committed, but removes all disabilities resulting from the conviction," and that, "when granted after the term of imprisonment has expired, absolute pardon removes all that is left of the consequences of conviction." Commenting upon "the suggestion that the disqualification imposed in paragraph (b) of section 94 of Commonwealth Act No. 357 [now paragraph (b) of section 99 of Republic Act No. 180 as amended], does not fall within the purview of the pardoning power of the Chief Executive," the court noted that this "would lead to the impairment of the pardoning power of the Chief Executive," not contemplated in the Constitutions, and will lead furthermore to the result that there will be no way of restoring the political privilege in the case of this nature except through legislative action." The contention in the above-cited case assumed, and the Court seemed to have been taken for granted, perhaps for the sake of argument, that paragraph (b) intended to disqualify from voting any person who has been convicted of any crime. As a matter of fact, that, in our opinion, is not the legislative intent. Actually there is no conflict between paragraphs (a) and (b), and paragraph (b) in no way enroaches upon the pardoning power of the Chief Executive. Paragraph (b) must be construed in conjunction with paragraph (a). Thus, construed, it modifies the part of paragraph (a) which refers to sentences for less than a year and not that which refers to the nature of the crime committed. Paragraph (a) is comprehensive, making no distinction between crimes against property and other classes of crimes. By the terms of this clause (paragraph [a]), all persons convicted of crime of whatever nature and sentenced to one year or more are disqualified to vote. But it makes two exceptions each of which is independent of the other, to wit: (1) when the penalty imposed is less than one year and (2) when pardon is granted. Paragraph (b) qualifies or further limits the first exceptions but not the second. It creates an exception to the exception of paragraph (a) that persons sentenced to less than one year may vote. It is not meant to say that conviction for a crime against property bars the convict from voting irrespective of the penalty and irrespective of whether or not pardon has been granted. Construing paragraphs (a) and (b) together, as stated they should read thus: Absolute pardon for any crime for which one year of imprisonment or more was meted out restores the prisoner to his political rights. Where the penalty is less than one year, disqualification does not attach except when the crime committed is one against property, in which case, the prisoner has to have a pardon, as in the cases provided in paragraph (a), if he is to be allowed to vote. For illustrations: (1) A was prosecuted for physical injuries and condemned to suffer 10 months imprisonment. Though not pardoned, he is not, under paragraph (a), disqualified. (2) B was prosecuted for theft and sentenced to imprisonment for 10 months. Under paragraph (b) he may not vote unless he is pardoned. (3) C was prosecuted and sentenced to four years for physical injuries or estafa. C has to be pardoned if he is to exercise the right of suffrage. This is the class of cases evisaged by paragraph (a); the nature of the crime is immaterial. Carried to its logical conclusion, the appellant's interpretation of section 99 of Republic Act No. 180 as amended would lead to absurd consequences. Under this interpretation the right to vote of a person who has been sentenced by the Chief Executive, while one who has been found guilty of the most heinous crime in the statute booked and sentenced to death recover his political rights through executive clemency.

But, it would be asked, why should paragraph (b) discriminate against crimes against property? And why should it confine itself to crime punishable with less than one year imprisonment? The answer is that major crimes always involve a high degree of moral turpitude. When it comes to lesser crimes, or rather crimes punishable with lighter penalty, the concept is reversed. Petty thefts and petty deceits and embezzlement always involve dishonesty and are reprehensive, while assaults and battery, calumnies, violations of municipal ordinance and traffic regulations, are, more likely than not, the products of violent passion or emotion, negligence or ignorance of law. It is argued that "had the law intended to extend the effects of plenary pardon to those kinds of persons, the law would have so stated." As has been seen, paragraph (a) is all-embracing and it would be more logical to say that if the Congress had intended to exclude crimes against property from the benefits of a plenary pardon, it would have said so directly and explicitly in the same paragraph. The appealed judgment of the lower court is, therefore, affirmed with costs against the appellant. Paras, C.J., Pablo, Bengzon, Padilla, Montemayor, Bautista Angelo and Labrador, JJ., concur.