COURSE OUTLINE IN

STATUTORY CONSTRUCTION

1 st Semester, AY 2019-2020

PART 5: INTERPRETATION OF WORDS

I. “Exclusive”

 Alfon vs Republic, G.R. No. L-51201, May 29, 1980

 Thornton vs Thornton, G.R. No. 154598, August 16, 2004

II. “Shall”

 Baranda vs Gustilo, G.R. No. 81163, September 26, 1988

 Director of Lands vs CA, G.R. No. 102858, July 28, 1997

When “shall” is construed as merely permissive:

 Diokno vs Rehabilitation and Finance, G.R. No. L-4712, July 11,

1952
 Berces vs Guingona, G.R. No. 112099, February 21, 1995

III. “May”

 Capati vs Ocampo, G.R. No. L-28742, April 30, 1982

 Philippine Consumer vs. NTC, G.R. No. L-63318, August 18, 1984

Interpretation depends upon the context

 People vs CA, G.R. No. 11623, March 13, 1995

 San Carlos Milling vs CIR, G.R. No. 103379, November 23, 1993

When “may” is construed as mandatory

 De Mesa vs Mecias, G.R. No. L-24583, October 29, 1966

 Llenares vs Valdeavella, G.R. No. L-21572, October 4, 1994

IV. “Every”

 National Housing Corp. vs Juco, G.R. No. L-64313, January 17, 1985
V. “Previously”

 Rura vs Lopena, G.R. No. L-69810-14, June 19, 1985

VI. “Term” vs “Tenure”

 Appari vs CA, G.R. No. L-30057, January 31, 1984

VII. “And” (Conjunctive)

 Mapa vs Arroyo, G.R. No. 78585, July 5, 1989

VIII. “Or” (Disjunctive)

 People vs Martin, G.R. No. L-33487, May 31, 1971

When “or” means expository or interpretative of preceding term

 San Miguel vs Municipal Council, G.R. No. L-30761, July 11, 1973

IX. Surplasages

 Demafiles vs COMELEC, G.R. No. L-28396, December 29, 1967

X. Punctuations

 United States vs Hart, G.R. No. 8848, November 21, 1913

 SECOND DIVISION

[G.R. No. L-51201. May 29, 1980.]

IN THE MATTER OF THE PETITION FOR CHANGE OF NAME OF

MARIA ESTRELLA VERONICA PRIMITIVA DUTERTE, ESTRELLA S.
ALFON, Petitioner, v. REPUBLIC OF THE PHILIPPINES,
Respondent.

DECISION

ABAD SANTOS, J.:

This is a petition filed pursuant to Republic Act No. 5440 to review an

Order of the Court of First Instance of Rizal, Branch XXIII, dated
December 29, 1978, which partially denied petitioner’s prayer for a
change of name. Only a question of law is involved and there is no
controversy over the facts which are well-stated in the questioned
Order as follows:jgc:chanrobles.com.ph

"This is verified petition filed on April 28, 1978 by petitioner Maria

Estrella Veronica Primitiva Duterte through her counsel, Atty. Rosauro
Alvarez, praying that her name be changed from Maria Estrella
Veronica Primitiva Duterte to Estrella S. Alfon.

"The notice setting the petition for hearing on December 14, 1978 at
8:30 o’clock in the morning was published in the Times Journal in its
issues of July 28, August 5 and 11, 1978 and a copy thereof together
with a copy of the petition was furnished the Office of the Solicitor
General (Exhibits C, C-1, C-2 and C-3).

"At the hearing of the petition on December 14, 1978, Atty. Rosauro
Alvarez appeared for the petitioner and Fiscal Donato Sor. Suyat, Jr.
represented the office of the Solicitor General. Upon motion of counsel
for the petitioner, without objection on the part of Fiscal Suyat, the
Deputy Clerk of Court was appointed commissioner to receive the
evidence and to submit the same for resolution of the Court.

"From the testimonial and documentary evidence presented, it appears

that petitioner Maria Estrella Veronica Primitiva Duterte was born on
May 15, 1952 at the U.S.T. Hospital (Exhibit A). She was registered at
the Local Civil Registrar’s Office as Maria Estrella Veronica Primitiva
Duterte. On June 15, 1952, she was baptized as Maria Estrella
Veronica Primitiva Duterte at the St. Anthony de Padua Church,
Singalong, Manila (Exhibit B). Her parents are Filomeno Duterte and
Estrella Veronica Primitiva Duterte has been taken cared of by Mr. and
Mrs. Hector Alfon. Petitioner and her uncle, Hector Alfon, have been
residing at 728 J.R. Yulo Street corner Ideal Street, Mandaluyong,
Metro Manila for twenty three (23) years. When petitioner started
schooling, she used the name Estrella S. Alfon. She attended her first
grade up to fourth year high school at Stella Maris College using the
name Estrella S. Alfon (Exhibits E, E-1, E-2 and E-3). After graduating
from high school she enrolled at the Arellano University and finished
Bachelor of Science in Nursing (Exhibit E-4). Her scholastic records
from elementary to college show that she was registered by the name
of Estrella S. Alfon. Petitioner has exercised her right of suffrage under
the same name (Exhibit D). She has not committed any felony or
misdemeanor (Exhibits G, G-1, G-2, G-3 and G-4).

"Petitioner has advanced the following reasons for filing the

petition:chanrob1es virtual 1aw library

1. She has been using the name Estrella Alfon since her childhood;

2. She has been enrolled in the grade school and in college using the
same name;

3. She has continuously used the name Estrella S. Alfon since her
infancy and all her friends and acquaintances know her by his name;

4. She has exercised her right of suffrage under the same name.
Section 5, Rule 103 of the Rules of Court provides:chanrob1es virtual
1aw library

‘Upon satisfactory proof in open court on the date fixed in the order
that such order has been published as directed and that the allegations
of the petition are true, the court shall, if proper and reasonable cause
appears for changing the name of the petitioner adjudge that such
name be changed in accordance with the prayer of the petition.’

"The evidence submitted shows that the change of name from Maria
Estrella Veronica Primitiva Duterte to Estrella Alfon is not proper and
reasonable with respect to the surname. The fact that petitioner has
been using a different surname and has become known with such
surname does not constitute proper and reasonable cause to legally
authorize and change her surname to Alfon. The birth certificate
clearly shows that the father of petitioner is Filomeno Duterte.
Petitioner likewise admitted this fact in her testimony. To allow
petitioner to change her surname from Duterte to Alfon is equivalent
to allowing her to use her mother’s surname. Article 364 of the Civil
Code provides:chanrob1es virtual 1aw library

‘Legitimate and legitimated children shall principally use the surname

of the father.’

"If another purpose of the petitioner is to carry the surname of Alfon

because her uncle who reared her since childhood has the surname
"Alfon" then the remedy is not a petition for change of name.

"WHEREFORE, the petition insofar as the first name is granted but

denied with respect to the surname. Petitioner is authorized to change
her name from Maria Estrella Veronica Primitiva Duterte to Estrella
Alfon Duterte.

"Let copy of this order be furnished the Local Civil Registrar of Pasig,
Metro Manila pursuant to Section 3, Rule 103 of the Rules of
Court."cralaw virtua1aw library

The lower court should have fully granted the petition.

The only reason why the lower court denied the petitioner’s prayer to
change her surname is that as legitimate child of Filomeno Duterte and
Estrella Alfon she should principally use the surname of her father
invoking Art. 364 of the Civil Code. But the word "principally" as used
in the codal-provision is not equivalent to "exclusively" so that there is
no legal obstacle if a legitimate or legitimated child should choose to
use the surname of its mother to which it is equally entitled. Moreover,
this Court in Haw Liong v. Republic, G.R. No. L-21194, April 29, 1966,
16 SCRA 677, 679, said:jgc:chanrobles.com.ph

"The following may be considered, among others, as proper or

reasonable causes that may warrant the grant of a petitioner for
change of name; (1) when the name is ridiculous, tainted with
dishonor, or is extremely difficult to write or pronounce; (2) when the
request for change is a consequence of a change of status, such as
when a natural child is acknowledged or legitimated; and (3) when the
change is necessary to avoid confusion (Tolentino, Civil Code of the
Philippines, 1953 ed., Vol. 1, p. 660)."cralaw virtua1aw library

In the case at bar, it has been shown that petitioner has, since
childhood, borne the name Estrella S. Alfon although her birth records
and baptismal certificate show otherwise; she was enrolled in the
schools from the grades up to college under the name Estrella S.
Alfon; all her friends call her by this name; she finished her course in
Nursing in college and was graduated and given a diploma under this
name; and she exercised the right of suffrage likewise under this
name. There is therefore ample justification to grant fully her petition
which is not whimsical but on the contrary is based on a solid and
reasonable ground, i.e. to avoid confusion.chanroblesvirtualawlibrary

WHEREFORE, the Order appealed from is hereby modified in that the

petitioner is allowed to change not only her first name but also her
surname so as to be known as ESTRELLA S. ALFON. No costs.

SO ORDERED.
 THIRD DIVISION

[G.R. NO. 154598 : August 16, 2004]

IN THE MATTER OF APPLICATION FOR THE ISSUANCE OF A

WRIT OF HABEAS CORPUS
RICHARD BRIAN THORNTON for and in behalf of the minor child
SEQUEIRA JENNIFER DELLE FRANCISCO THORNTON, Petitioner,
v. ADELFA FRANCISCO THORNTON, Respondent.

DECISION

CORONA, J.:

This is a petition to review, under Rule 45 of the Rules of Court, the

July 5, 2002 resolution1 of the Court of Appeals, Sixteenth Division, in
CA G.R. SP No. 70501 dismissing the petition for habeas corpus on the
grounds of lack of jurisdiction and lack of substance. The dispositive
portion2 read:

WHEREFORE, the Court DISMISSES the petition for habeas corpus on

the grounds that: a) this Court has no jurisdiction over the subject
matter of the petition; and b) the petition is not sufficient in
substance.

Petitioner, an American, and respondent, a Filipino, were married on

August 28, 1998 in the Catholic Evangelical Church at United Nations
Avenue, Manila. A year later, respondent gave birth to a baby girl
whom they named Sequeira Jennifer Delle Francisco Thornton.

However, after three years, respondent grew restless and bored as a

plain housewife. She wanted to return to her old job as a "guest
relations officer" in a nightclub, with the freedom to go out with her
friends. In fact, whenever petitioner was out of the country,
respondent was also often out with her friends, leaving her daughter in
the care of the househelp.
Petitioner admonished respondent about her irresponsibility but she
continued her carefree ways. On December 7, 2001, respondent left
the family home with her daughter Sequiera without notifying her
husband. She told the servants that she was bringing Sequiera to
Purok Marikit, Sta. Clara, Lamitan, Basilan Province.

Petitioner filed a petition for habeas corpus in the designated Family

Court in Makati City but this was dismissed, presumably because of
the allegation that the child was in Basilan. Petitioner then went to
Basilan to ascertain the whereabouts of respondent and their
daughter. However, he did not find them there and the barangay office
of Sta. Clara, Lamitan, Basilan, issued a certification3 that respondent
was no longer residing there.

Petitioner gave up his search when he got hold of respondent's cellular

phone bills showing calls from different places such as Cavite, Nueva
Ecija, Metro Manila and other provinces. Petitioner then filed another
petition for habeas corpus, this time in the Court of Appeals which
could issue a writ of habeas corpus enforceable in the entire country.

However, the petition was denied by the Court of Appeals on the

ground that it did not have jurisdiction over the case. It ruled that
since RA 8369 (The Family Courts Act of 1997) gave family courts
exclusive original jurisdiction over petitions for habeas corpus, it
impliedly repealed RA 7902 (An Act Expanding the Jurisdiction of the
Court of Appeals) and Batas Pambansa 129 (The Judiciary
Reorganization Act of 1980):

Under Sec. 9 (1), BP 129 (1981) the Intermediate Appellate Court

(now Court of Appeals) has jurisdiction to issue a writ of habeas
corpus whether or not in aid of its appellate jurisdiction. This
conferment of jurisdiction was re-stated in Sec. 1, RA 7902 (1995), an
act expanding the jurisdiction of this Court. This jurisdiction finds its
procedural expression in Sec. 1, Rule 102 of the Rules of Court.

In 1997, RA 8369 otherwise known as Family Courts Act was enacted.

It provides:
Sec. 5. Jurisdiction of Family Court. - The Family Courts shall have
exclusive original jurisdiction to hear and decide the following cases:

xxx xxx xxx

b. Petition for guardianship, custody of children, habeas corpus in

relation to the latter.

The vital question is, did RA 8369 impliedly repeal BP 129 and RA
7902 insofar as the jurisdiction of this Court to issue writ of habeas
corpus in custody of minor cases is concerned? The simple answer is,
yes, it did, because there is no other meaning of the word "exclusive"
than to constitute the Family Court as the sole court which can issue
said writ. If a court other than the Family Court also possesses the
same competence, then the jurisdiction of the former is not exclusive
but concurrent - and such an interpretation is contrary to the simple
and clear wording of RA 8369.

Petitioner argues that unless this Court assumes jurisdiction over a

petition for habeas corpus involving custody of minors, a respondent
can easily evade the service of a writ of habeas corpus on him or her
by just moving out of the region over which the Regional Trial Court
issuing the writ has territorial jurisdiction. That may be so but then
jurisdiction is conferred by law. In the absence of a law conferring
such jurisdiction in this Court, it cannot exercise it even if it is
demanded by expediency or necessity.

Whether RA 8369 is a good or unwise law is not within the authority of

this Court - or any court for that matter - to determine. The enactment
of a law on jurisdiction is within the exclusive domain of the
legislature. When there is a perceived defect in the law, the remedy is
not to be sought form the courts but only from the legislature.

The only issue before us therefore is whether the Court of Appeals has
jurisdiction to issue writs of habeas corpus in cases involving custody
of minors in the light of the provision in RA 8369 giving family courts
exclusive original jurisdiction over such petitions.
In his comment, the Solicitor General points out that Section 20 of the
Rule on Custody of Minors and Writ of Habeas Corpus in Relation to
Custody of Minors (A.M. No. 03-04-04-SC, effective May 15, 2003) has
rendered the issue moot. Section 20 of the rule provides that a
petition for habeas corpus may be filed in the Supreme Court,4 Court
of Appeals, or with any of its members and, if so granted, the writ
shall be enforceable anywhere in the Philippines.5

The petition is granted.

The Court of Appeals should take cognizance of the case since there is
nothing in RA 8369 that revoked its jurisdiction to issue writs of
habeas corpus involving the custody of minors.

The Court of Appeals opines that RA 8369 impliedly repealed RA 7902

and BP 129 since, by giving family courts exclusive jurisdiction over
habeas corpus cases, the lawmakers intended it to be the sole court
which can issue writs of habeas corpus. To the court a quo, the word
"exclusive" apparently cannot be construed any other way.

We disagree with the CA's reasoning because it will result in an

iniquitous situation, leaving individuals like petitioner without legal
recourse in obtaining custody of their children. Individuals who do not
know the whereabouts of minors they are looking for would be
helpless since they cannot seek redress from family courts whose writs
are enforceable only in their respective territorial jurisdictions. Thus, if
a minor is being transferred from one place to another, which seems
to be the case here, the petitioner in a habeas corpus case will be left
without legal remedy. This lack of recourse could not have been the
intention of the lawmakers when they passed the Family Courts Act of
1997. As observed by the Solicitor General:

Under the Family Courts Act of 1997, the avowed policy of the State is
to "protect the rights and promote the welfare of children." The
creation of the Family Court is geared towards addressing three major
issues regarding children's welfare cases, as expressed by the
legislators during the deliberations for the law. The legislative intent
behind giving Family Courts exclusive and original jurisdiction over
such cases was to avoid further clogging of regular court dockets,
ensure greater sensitivity and specialization in view of the nature of
the case and the parties, as well as to guarantee that the privacy of
the children party to the case remains protected.

The primordial consideration is the welfare and best interests of the

child. We rule therefore that RA 8369 did not divest the Court of
Appeals and the Supreme Court of their jurisdiction over habeas
corpus cases involving the custody of minors. Again, to quote the
Solicitor General:

To allow the Court of Appeals to exercise jurisdiction over the petition

for habeas corpus involving a minor child whose whereabouts are
uncertain and transient will not result in one of the situations that the
legislature seeks to avoid. First, the welfare of the child is paramount.
Second, the ex parte nature of habeas corpus proceedings will not
result in disruption of the child's privacy and emotional well-being;
whereas to deprive the appellate court of jurisdiction will result in the
evil sought to be avoided by the legislature: the child's welfare and
well being will be prejudiced.

This is not the first time that this Court construed the word "exclusive"
as not foreclosing resort to another jurisdiction. As correctly cited by
the Solicitor General, in Floresca v. Philex Mining Corporation,6 the
heirs of miners killed in a work-related accident were allowed to file
suit in the regular courts even if, under the Workmen's Compensation
Act, the Workmen's Compensation Commissioner had exclusive
jurisdiction over such cases.

We agree with the observations of the Solicitor General that:

While Floresca involved a cause of action different from the case at

bar. it supports petitioner's submission that the word "exclusive" in the
Family Courts Act of 1997 may not connote automatic foreclosure of
the jurisdiction of other courts over habeas corpus cases involving
minors. In the same manner that the remedies in the Floresca case
were selective, the jurisdiction of the Court of Appeals and Family
Court in the case at bar is concurrent. The Family Court can issue writs
of habeas corpus enforceable only within its territorial jurisdiction. On
the other hand, in cases where the territorial jurisdiction for the
enforcement of the writ cannot be determined with certainty, the Court
of Appeals can issue the same writ enforceable throughout the
Philippines, as provided in Sec. 2, Rule 102 of the Revised Rules of
Court, thus:

The Writ of Habeas Corpus may be granted by the Supreme Court, or

any member thereof, on any day and at any time, or by the Court of
Appeals or any member thereof in the instances authorized by law,
and if so granted it shall be enforceable anywhere in the Philippines,
and may be made returnable before the court or any member thereof,
or before a Court of First Instance, or any judge thereof for hearing
and decision on the merits. It may also be granted by a Court of First
Instance, or a judge thereof, on any day and at any time, and
returnable before himself, enforceable only within his judicial district.
(Emphasis supplied)ςrαlαωlιbrαrÿ

In ruling that the Commissioner's "exclusive" jurisdiction did not

foreclose resort to the regular courts for damages, this Court, in the
same Floresca case, said that it was merely applying and giving effect
to the constitutional guarantees of social justice in the 1935 and 1973
Constitutions and implemented by the Civil Code. It also applied the
well-established rule that what is controlling is the spirit and intent,
not the letter, of the law:

"Idolatrous reverence" for the law sacrifices the human being. The
spirit of the law insures man's survival and ennobles him. In the words
of Shakespeare, "the letter of the law killeth; its spirit giveth life."

xxx xxx xxx

It is therefore patent that giving effect to the social justice guarantees
of the Constitution, as implemented by the provisions of the New Civil
Code, is not an exercise of the power of law-making, but is rendering
obedience to the mandates of the fundamental law and the
implementing legislation aforementioned.
Language is rarely so free from ambiguity as to be incapable of being
used in more than one sense. Sometimes, what the legislature actually
had in mind is not accurately reflected in the language of a statute,
and its literal interpretation may render it meaningless, lead to
absurdity, injustice or contradiction.7 In the case at bar, a literal
interpretation of the word "exclusive" will result in grave injustice and
negate the policy "to protect the rights and promote the welfare of
children"8 under the Constitution and the United Nations Convention
on the Rights of the Child. This mandate must prevail over legal
technicalities and serve as the guiding principle in construing the
provisions of RA 8369.

Moreover, settled is the rule in statutory construction that implied

repeals are not favored:

The two laws must be absolutely incompatible, and a clear finding

thereof must surface, before the inference of implied repeal may be
drawn. The rule is expressed in the maxim, interpretare et concordare
leqibus est optimus interpretendi, i.e., every statute must be so
interpreted and brought into accord with other laws as to form a
uniform system of jurisprudence. The fundament is that the legislature
should be presumed to have known the existing laws on the subject
and not have enacted conflicting statutes. Hence, all doubts must be
resolved against any implied repeal, and all efforts should be exerted
in order to harmonize and give effect to all laws on the subject."9

The provisions of RA 8369 reveal no manifest intent to revoke the

jurisdiction of the Court of Appeals and Supreme Court to issue writs
of habeas corpus relating to the custody of minors. Further, it cannot
be said that the provisions of RA 8369, RA 7092 and BP 129 are
absolutely incompatible since RA 8369 does not prohibit the Court of
Appeals and the Supreme Court from issuing writs of habeas corpus in
cases involving the custody of minors. Thus, the provisions of RA 8369
must be read in harmony with RA 7029 and BP 129 ― that family
courts have concurrent jurisdiction with the Court of Appeals and the
Supreme Court in petitions for habeas corpus where the custody of
minors is at issue.
In any case, whatever uncertainty there was has been settled with the
adoption of A.M. No. 03-03-04-SC Re: Rule on Custody of Minors and
Writ of Habeas Corpus in Relation to Custody of Minors. Section 20 of
the rule provides that:

Section 20. Petition for writ of habeas corpus.' - A verified petition for
a writ of habeas corpus involving custody of minors shall be filed with
the Family Court. The writ shall be enforceable within its judicial region
to which the Family Court belongs.

xxx xxx xxx

The petition may likewise be filed with the Supreme Court, Court of
Appeals, or with any of its members and, if so granted, the writ shall
be enforceable anywhere in the Philippines. The writ may be made
returnable to a Family Court or to any regular court within the region
where the petitioner resides or where the minor may be found for
hearing and decision on the merits. (Emphasis Ours)

From the foregoing, there is no doubt that the Court of Appeals and
Supreme Court have concurrent jurisdiction with family courts in
habeas corpus cases where the custody of minors is involved.

One final note. Requiring the serving officer to search for the child all
over the country is not an unreasonable availment of a remedy which
the Court of Appeals cited as a ground for dismissing the petition. As
explained by the Solicitor General:10

That the serving officer will have to "search for the child all over the
country" does not represent an insurmountable or unreasonable
obstacle, since such a task is no more different from or difficult than
the duty of the peace officer in effecting a warrant of arrest, since the
latter is likewise enforceable anywhere within the Philippines.

WHEREFORE, the petition is hereby GRANTED. The petition for habeas

corpus in CA-G.R.-SP-No. 70501 is hereby REINSTATED and
REMANDED to the Court of Appeals, Sixteenth Division.
SO ORDERED.
 THIRD DIVISION

[G.R. No. 81163. September 26, 1988.]

EDUARDO S. BARANDA and ALFONSO HITALIA, Petitioners, v.

HONORABLE JUDGE TITO GUSTILO, ACTING REGISTER OF DEEDS
AVITO SACLAUSO, HONORABLE COURT OF APPEALS, and ATTY.
HECTOR P. TEODOSIO, Respondents.

Eduardo S. Baranda, for Petitioners.

Rico & Associates for Private Respondents.

SYLLABUS

1. REMEDIAL LAW; CIVIL PROCEDURE; ACTIONS; NOTICE OF LIS PENDENS;

PURPOSE. — "Lis pendens has been conceived to protect the real rights of
the party causing the registration thereof. With the lis pendens duly
recorded, he could rest secure that he would not lose the property or any
part of it. For, notice of lis pendens serves as a warning to a prospective
purchaser or incumbrancer that the particular property is in litigation; and
that he should keep his hands off the same, unless of course he intends to
gamble on the results of the litigation. (Section 24, Rule 14, Rules of Court;
Jamora v. Duran, Et Al., 69 Phil. 3, 11; I Martin, Rules of Court, p. 415,
footnote 3, citing cases.)" (Nataño v. Esteban, 18 SCRA 481, 485-485).
2. ID.; ID.; ID.; ID.; DISCRETIONARY POWER OF THE COURT TO CANCEL
LIS PENDENS; DELAYING TACTICS OF PARTY IN CASE AT BAR IS A GROUND
FOR CANCELLATION. — A notice of lis pendens of Civil Case No. 15871 was
annotated on petitioner’s Certificate of Title No. 106098 covering Lot No.
4517, Sta. Barbara Cadastre. It appears, however, that private respondents
in filing said case were trying to delay the full implementation of the final
decisions in G.R. No. 62042 as well as G.R. No. 64432 wherein this Court
ordered the immediate implementation of the writs of possession and
demolition in the reconstitution proceedings involving said lot. The foregoing
facts necessitate the application of the rule enunciated in the cases of
Victoriano v. Rovira (55 Phil. 1000), Municipal Council of Parañaque v. Court
of First Instance of Rizal (70 Phil. 363) and Sarmiento v. Ortiz (10 SCRA
158), to the effect that: "We have once held that while ordinarily a notice of
pendency which has been filed in a proper case, cannot be cancelled while
the action is pending and undetermined, the proper court has the
discretionary power to cancel it under peculiar circumstances, as for
instance, where the evidence so far presented by the plaintiff does not bear
out the main allegations of his complaint, and where the continuances of the
trial, for which the plaintiff is responsible, are unnecessarily delaying the
determination of the case to the prejudice of the defendant. Victoriano v.
Rovira, supra; The Municipal Council of Parañaque v. Court of First Instance
of Rizal, supra)"

3. CIVIL LAW; LAND REGISTRATION; P.D. NO. 1529; ALLOWS

CANCELLATION OF LIS PENDENS UPON PROOF THAT THE PURPOSE OF
NOTICE IS TO MOLEST THE ADVERSE PARTY; FAILURE TO CANCEL NOTICE
PURSUANT THERETO, AN ABUSE OF DISCRETION. — Respondent Judge Tito
Gustilo abused his discretion in sustaining the respondent Acting Register of
Deeds’ stand that the notice of lis pendens in the certificates of titles of the
petitioners over Lot No. 4571, Barbara Cadastre cannot be cancelled on the
ground of pendency of Civil Case No. 15871 with the Court of Appeals. In
upholding the position of the Acting Register of Deeds based on Section 77
of Presidential Decree No. 1529, he conveniently forgot the first paragraph
thereof which provides: "Cancellation of lis pendens. — Before final
judgment, a notice of lis pendens may be cancelled upon Order of the Court
after proper showing that the notice is for the purpose of molesting the
adverse party, or that it is not necessary to protect the rights of the party
who caused it to be registered. It may also be cancelled by the Register of
Deeds upon verified petition of the party who caused the registration
thereof."cralaw virtua1aw library

4. ID.; ID.; ID.; DUTY OF REGISTER OF DEEDS IS MINISTERIAL. — Under

Sections 10 and 117 of Presidential Decree No. 1529, the function of a
Register of Deeds with reference to the registration of deeds encumbrance,
instruments and the like is ministerial in nature.

5. STATUTORY CONSTRUCTION; STATUTES; WHERE WORDS ARE CLEAR

AND UNEQUIVOCAL STATUTES MUST BE TAKEN TO MEAN EXACTLY WHAT IT
DAYS; P.D. NO. 1529 IS CLEAR. — The elementary rule in statutory
construction is that when the words and phrases of the statute are clear and
unequivocal, their meaning must be determined from the language
employed and the statute must be taken to mean exactly what it says.
(Aparri v. Court of Appeals, 127 SCRA 231; Insular Bank of Asia and
America Employees’ Union [IBAAEU] v. Inciong, 132 SCRA 663) The statute
concerning the function of the Register of Deeds to register instruments in a
torrens certificate of title is clear and leaves no room for construction.

6. ID.; ID.; MEANING OF WORD "SHALL." — According to Webster’s Third

International Dictionary of the English Language — the word shall means
"ought to, must, . . . obligation - used to express a command or exhortation,
used in laws, regulations or directives to express what is mandatory."cralaw
virtua1aw library

7. CRIMINAL LAW; AND REGISTRATION; P.D. NO. 1529; A REGISTER OF

DEEDS HAS NO LEGAL STANDING TO FILE A MOTION FOR COMMISSIONER
MUST BE SOUGHT IN CASE OF DOUBT. — The respondent Acting Register of
Deeds did not have any legal standing to file a motion for reconsideration of
the respondent Judge’s Order directing him to cancel the notice of lis
pendens annotated in the certificates of titles of the petitioners over the
subject parcel of land. In case of doubt as to the proper step to be taken in
pursuance of any deed . . . or other instrument presented to him, he should
have asked the opinion of the Commissioner of Land Registration now, the
Administrator of the National Land Title and Deeds Registration
Administration in accordance with Section 117 of Presidential Decree No.
1529.

8. REMEDIAL LAW; JUDGMENT; EXECUTION; DELAY IN THE

IMPLEMENTATION OF COURT’S FINAL RESOLUTION; RESPONSIBILITY FALLS
ON THE RESPONDENT JUDGE. — In the ultimate analysis, however, the
responsibility for the delays in the full implementation of this Court’s already
final resolutions in G.R. No. 62042 and G.R. No. 64432 which includes the
cancellation of the notice of lis pendens annotated in the certificates of titles
of the petitioners over Lot No. 4517 of the Sta. Barbara Cadastre falls on the
respondent Judge. He should never have allowed himself to become part of
dilatory tactics, giving as excuse the wrong impression that Civil Case No.
15871 filed by the private respondents involves another set of parties
claiming Lot No. 4517 under their own Torrens Certificate of Title.

DECISION

GUTIERREZ, JR., J.:

Eduardo S. Baranda and Alfonso Hitalia were the petitioners in G.R. No.
64432 and the private respondents in G.R. No. 62042. The subject matter of
these two (2) cases and the instant case is the same — a parcel of land
designated as Lot No. 4517 of the Cadastral Survey of Sta. Barbara, Iloilo
covered by Original Certificate of Title No. 6406.
The present petition arose from the same facts and events which triggered
the filing of the earlier petitions. These facts and events are cited in our
resolution dated December 29, 1983 in G.R. No. 64432, as
follows:jgc:chanrobles.com.ph

". . . This case has its origins in a petition for reconstitution of title filed with
the Court of First Instance of Iloilo involving a parcel of land known as Lot
No. 4517 of the Sta. Barbara Cadastre covered by Original Certificate of Title
No. 6406 in the name of Romana Hitalia. Eventually, Original Certificate of
Title No. 6406 was cancelled and Transfer Certificate of Title No. 106098 was
issued in the names of Alfonso Hitalia and Eduardo S. Baranda. The Court
issued a writ of possession which Gregorio Perez, Maria P. Gotera and
Susana Silao refused to honor on the ground that they also have TCT No.
25772 over the same Lot No. 4517. The Court, after considering the private
respondents’ opposition and finding TCT No. 25772 fraudulently acquired,
ordered that the writ of possession be carried out. A motion for
reconsideration having been denied, a writ of demolition was issued on
March 29, 1982. Perez and Gotera filed a petition for certiorari and
prohibition with the Court of Appeals. On August 6, 1982, the Court of
Appeals deemed the petition. Perez and Gotera filed the petition for review
on certiorari denominated as G.R. No. 62042 before the Supreme Court. As
earlier stated the petition was denied in a resolution dated January 7, 1983.
The motion for reconsideration was denied in another resolution dated March
25, 1983, which also stated that the denial is final. This decision in G.R. No.
62042, in accordance with the entry of judgment, became final on March 25,
1983. The petitioners in the instant case — G.R. No. 64432 — contend that
the writs of possession and demolition issued in the respondent court should
now be implemented; that Civil Case No. 00827 before the Intermediate
Appellate Court was filed only to delay the implementation of the writ; that
counsel for the respondent should be held in contempt of court for engaging
in a concerted but futile effort to delay the execution of the writs of
possession and demolition and that petitioners are entitled to damages
because of prejudice caused by the filing of this petition before the
Intermediate Appellate Court. On September 26, 1983, this Court issued a
Temporary Restraining Order to maintain the status quo, both in the
Intermediate Appellate Court and in the Regional Trial Court of Iloilo.
Considering that — (1) there is merit in the instant petition for indeed the
issues discussed in G.R. No. 64432 as raised in Civil Case No. 00827 before
the respondent court have already been passed upon in G.R. No. 62042; and
(2) the Temporary Restraining Order issued by the Intermediate Appellate
Court was only intended not to render the petition moot and academic
pending the Court’s consideration of the issues, the Court RESOLVED to
DIRECT the respondent Intermediate Appellate Court not to take cognizance
of issues already resolved by this Court and accordingly DISMISS the
petition in Civil Case No. 00827. Immediate implementation of the writs of
possession and demolition is likewise ordered." (pp. 107-108, Rollo — G.R.
No. 64432)

On May 9, 1984, the Court issued a resolution denying with finality a motion
for reconsideration of the December 29, 1983 resolution in G.R. No. 64432.
On this same date, another resolution was issued, this time in G.R. No.
62042, referring to the Regional Trial Court of Iloilo the ex-parte motion of
the private respondents (Baranda and Hitalia) for execution of the judgment
in the resolutions dated January 7, 1983 and March 9, 1983. In the
meantime, the then Intermediate Appellate Court issued a resolution dated
February 10, 1984, dismissing Civil Case No. 00827 which covered the same
subject matter as the Resolutions abovecited pursuant to our Resolution
dated December 29, 1983. The resolution dated December 29, 1983 in G.R.
No. 64432 became final on May 20, 1984.

Upon motions of the petitioners, the Regional Trial Court of Iloilo, Branch 23
presided by Judge Tito G. Gustilo issued the following
order:jgc:chanrobles.com.ph

"Submitted are the following motions filed by movants Eduardo S. Baranda

and Alfonso Hitalia through counsel dated August 28,
1984:jgc:chanrobles.com.ph
"(a) Reiterating Motion for Execution of Judgment of Resolutions dated
January 7, 1983 and March 9, 1983 Promulgated by Honorable Supreme
Court (First Division) in G.R. No. 62042;

"(b) Motion for Execution of Judgment of Resolution dated December 29,

1983 Promulgated by Honorable Supreme Court (First Division) in G.R. No.
64432;

"(c) The Duties of the Register of Deeds are purely ministerial under Act
496, therefore she must register all orders, judgment, resolutions of this
Court and that of Honorable Supreme Court.

"Finding the said motions meritorious and there being no opposition thereto,
the same is hereby GRANTED.

"WHEREFORE, Transfer Certificate of Title No. T-25772 is hereby declared

null and void and Transfer Certificate of Title No. T-106098 is hereby
declared valid and subsisting title concerning the ownership of Eduardo S.
Baranda and Alfonso Hitalia, all of Sta. Barbara Cadastre.

"The Acting Register of Deeds of Iloilo is further ordered to register the

Subdivision Agreement of Eduardo S. Baranda and Alfonso Hitalia as prayed
for." (p. 466, Rollo - G.R. No. 64432).

The above order was set aside on October 8, 1984 upon a motion for
reconsideration and manifestation filed by the Acting Register of Deeds of
Iloilo, Atty. Helen P. Sornito on the ground that there was a pending case
before this Court, an Action for Mandamus, Prohibition, Injunction under
G.R. No. 67661 filed by Atty. Eduardo Baranda, against the former which
remained unresolved.
In view of this development, the petitioners filed in G.R. No. 62042 and G.R.
No. 64432 ex-parte motions for issuance of an order directing the Regional
Trial Court and Acting Register of Deeds to execute and implement the
judgments of this Court. They prayed that an order be
issued:jgc:chanrobles.com.ph

"1. Ordering both the Regional Trial Court of Iloilo Branch XXIII, under Hon.
Judge Tito G. Gustilo and the acting Register of Deeds Helen P. Sornito to
register the Order dated September 5, 1984 of the lower court;

"2. To cancel No. T-25772. Likewise to cancel No. T-106098 and once
cancelled to issue new certificates of title to each of Eduardo S. Baranda and
Alfonso Hitalia;

Plus other relief and remedies equitable under the premises." (p. 473, 64432
Rollo)

Acting on these motions, we issued on September 17, 1986 a Resolution in

G.R. No. 62042 and G.R. No. 64432 granting the motions as prayed for.
Acting on another motion of the same nature filed by the petitioners, we
issued another Resolution dated October 8, 1986 referring the same to the
Court Administrator for implementation by the judge below.

In compliance with our resolutions, the Regional Trial Court of Iloilo, Branch
23 presided by Judge Tito G. Gustilo issued two (2) orders dated November
6, 1986 and January 6, 1987 respectively, to wit:jgc:chanrobles.com.ph

"O R D E R
"This is an Ex-parte Motion and Manifestation submitted by the movants
through counsel on October 20, 1986; the Manifestation of Atty. Helen
Sornito, Register of Deeds of the City of Iloilo, and formerly acting register
of deeds for the Province of Iloilo dated October 23, 1986 and the
Manifestation of Atty. Avito S. Saclauso, Acting Register of Deeds, Province
of Iloilo dated November 5, 1986.

"Considering that the motion of movants Atty. Eduardo S. Baranda and

Alfonso Hitalia dated August 12, 1986 seeking the full implementation of the
writ of possession was granted by the Honorable Supreme Court, Second
Division per its Resolution dated September 17, 1986, the present motion is
hereby GRANTED.

"WHEREFORE, the Acting Register of Deeds, Province of Iloilo, is hereby

ordered to register the Order of this Court dated September 5, 1984 as
prayed for.

x x x

"O R D E R

"This is a Manifestation and Urgent Petition for the Surrender of Transfer

Certificate of Title No. T-25772 submitted by the petitioners Atty. Eduardo S.
Baranda and Alfonso Hitalia on December 2, 1986 in compliance with the
order of this Court dated November 25, 1986, a Motion for Extension of Time
to File Opposition filed by Maria Provido Gotera through counsel on
December 4, 1986 which was granted by the Court pursuant to its Order
dated December 15, 1986. Considering that no Opposition was filed within
the thirty (30) days period granted by the Court finding the petition tenable,
the same is hereby GRANTED.
"WHEREFORE, Maria Provido Gotera is hereby ordered to surrender Transfer
Certificate of Title No. T-25772 to this Court within ten (10) days from the
date of this order, after which period, Transfer Certificate of Title No. T-
25772 is hereby declared annulled and the Register of Deeds of Iloilo is
ordered to issue a new Certificate of Title in lieu thereof in the name of
petitioners Atty. Eduardo S. Baranda and Alfonso Hitalia, which certificate
shall contain a memorandum of the annulment of the outstanding duplicate."
(pp. 286-287, Rollo 64432)

On February 9, 1987, Atty. Hector Teodosio, the counsel of Gregorio Perez,

private respondent in G.R. No. 64432 and petitioner in G.R. No. 62042, filed
a motion for explanation in relation to the resolution dated September 17,
1986 and manifestation asking for clarification on the following
points:jgc:chanrobles.com.ph

"a. As to the prayer of Atty. Eduardo Baranda for the cancellation of TCT T-
25772, should the same be referred to the Court of Appeals (as mentioned
in the Resolution of November 27, 1985) or is it already deemed granted by
implication (by virtue of the Resolution dated September 17, 1986)?

"b. Does the Resolution dated September 17, 1986 include not only the
implementation of the writ of possession but also the cancellation of TCT T-
25772 and the subdivision of Lot 4517?" (p. 536, Rollo — 64432).

Acting on this motion and the other motions filed by the parties, we issued a
resolution dated May 25, 1987 noting all these motions and stating
therein:chanrob1es virtual 1aw library

x x x
"Since entry of judgment in G.R. No. 62042 was made on January 7, 1983
and in G.R. No. 64432 on May 30, 1984, and all that remains is the
implementation of our resolutions, this COURT RESOLVED to refer the
matters concerning the execution of the decisions to the Regional Trial Court
of Iloilo City for appropriate action and to apply disciplinary sanctions upon
whoever attempts to trifle with the implementation of the resolutions of this
Court. No further motions in these cases will be entertained by this Court."
(p. 615, Rollo - 64432)

In the meantime, in compliance with the Regional Trial Court’s orders dated
November 6, 1986 and January 6, 1987, Acting Register of Deeds Avito
Saclauso annotated the order declaring Transfer Certificate of Title No. T-
25772 as null and void, cancelled the same and issued new certificates of
titles numbers T-111560, T-111561 and T-111562 in the name of petitioners
Eduardo S. Baranda and Alfonso Hitalia in lieu of Transfer Certificate of Title
No. T-106098.

However, a notice of lis pendens "on account of or by reason of a separate

case (Civil Case No. 15871) still pending in the Court of Appeals" was carried
out and annotated in the new certificates of titles issued to the petitioners.
This was upheld by the trial court after setting aside its earlier order dated
February 12, 1987 ordering the cancellation of lis pendens.

This prompted the petitioners to file another motion in G.R. No. 62042 and
G.R. No. 64432 to order the trial court to reinstate its order dated February
12, 1987 directing the Acting Register of Deeds to cancel the notice of lis
pendens in the new certificates of titles.

In a resolution dated August 17, 1987, we resolved to refer the said motion
to the Regional Trial Court of Iloilo City, Branch 23 for appropriate action.
Since respondent Judge Tito Gustilo of the Regional Trial Court of Iloilo,
Branch 23 denied the petitioners’ motion to reinstate the February 12, 1987
order in another order dated September 17, 1987, the petitioners filed this
petition for certiorari, prohibition and mandamus with preliminary injunction
to compel the respondent judge to reinstate his order dated February 12,
1987 directing the Acting Register of Deeds to cancel the notice of lis
pendens annotated in the new certificates of titles issued in the name of the
petitioners.

The records show that after the Acting Register of Deeds annotated a notice
of lis pendens on the new certificates of titles issued in the name of the
petitioners, the petitioners filed in the reconstitution case an urgent ex-parte
motion to immediately cancel notice of lis pendens annotated thereon.

In his order dated February 12, 1987, respondent Judge Gustilo granted the
motion and directed the Acting Register of Deeds of Iloilo to cancel the lis
pendens found on Transfer Certificate of Title Nos. T-106098; T-111560; T-
111561 and T-111562.

Respondent Acting Register of Deeds Avito Saclauso filed a motion for

reconsideration of the February 12, 1987 order stating
therein:jgc:chanrobles.com.ph

"That the undersigned hereby asks for a reconsideration of the said order
based on the second paragraph of Section 77 of P.D. 1529, to
wit:jgc:chanrobles.com.ph

"‘At any time after final judgment in favor of the defendant or other
disposition of the action such as to terminate finally all rights of the plaintiff
in and to the land and/or buildings involved, in any case in which a
memorandum or notice of Lis Pendens has been registered as provided in
the preceding section, the notice of Lis Pendens shall be deemed cancelled
upon the registration of a certificate of the clerk of court in which the action
or proceeding was pending stating the manner of disposal thereof.’

"That the lis pendens under Entry No. 427183 was annotated on T-106098,
T-111560, T-111561 and T-111562 by virtue of a case docketed as Civil
Case No. 15871, now pending with the Intermediate Court of Appeals,
entitled, ‘Calixta Provido, Ricardo Provido, Sr., Maxima Provido and Perfecto
Provido, Plaintiffs, versus Eduardo Baranda and Alfonso Hitalia,
Respondents.’

"That under the above-quoted provisions of P.D. 152, the cancellation of

subject Notice of Lis Pendens can only be made or deemed cancelled upon
the registration of the certificate of the Clerk of Court in which the action or
proceeding was pending, stating the manner of disposal thereof.

"Considering that Civil Case No. 1587, upon which the Notice of Lis Pendens
was based is still pending with the Intermediate Court of Appeals, only the
Intermediate Court of Appeals and not this Honorable Court in a mere
cadastral proceedings can order the cancellation of the Notice of Lis
Pendens." (pp. 68-69, Rollo)

Adopting these arguments and on the ground that some if not all of the
plaintiffs in Civil Case No. 15871 were not privies to the case affected by the
Supreme Court resolutions, respondent Judge Tito Gustilo set aside his
February 12, 1987 order and granted the Acting Register of Deeds’ motion
for reconsideration.

The issue hinges on whether or not the pendency of the appeal in Civil Case
No. 15871 with the Court of Appeals prevents the court from cancelling the
notice of lis pendens in the certificates of titles of the petitioners which were
earlier declared valid and subsisting by this Court in G.R. No. 62042 and
G.R. No. 64432. A corollary issue is on the nature of the duty of a Register
of Deeds to annotate or annul a notice of lis pendens in a torrens certificate
of title.

Civil Case No. 15871 was a complaint to seek recovery of Lot No. 4517 of
Sta. Barbara Cadastre Iloilo, (the same subject matter of G.R. No 62042 and
G.R. No. 64432) from petitioners Baranda and Hitalia filed by Calixta
Provido, Ricardo Provido, Maxima Provido and Perfecta Provido before the
Regional Trial Court of Iloilo, Branch 23. At the instance of Atty. Hector P.
Teodosio, the Providos’ counsel, a notice of lis pendens was annotated on
petitioners’ Certificate of Title No. T-106098 covering Lot No. 4517, Sta.
Barbara Cadastre.

Acting on a motion to dismiss filed by the petitioners, the court issued an

order dated October 24, 1984 dismissing Civil Case No. 15871.

The order was then appealed to the Court of Appeals. This appeal is the
reason why respondent Judge Gustilo recalled the February 12, 1987 order
directing the Acting Register of Deeds to cancel the notice of lis pendens
annotated on the certificates of titles of the petitioners.

This petition is impressed with merit.

Maria Provido Gotera was one of the petitioners in G.R. No. 62042. Although
Calixta Provido, Ricardo Provido, Maxima Provido and Perfecta Provido, the
plaintiffs in Civil Case No. 15871 were not impleaded as parties, it is very
clear in the petition that Maria Provido was acting on behalf of the Providos
who allegedly are her co-owners in Lot No. 4517, Sta. Barbara Cadastre as
shown by Transfer Certificate of Title No. T-25772 issued in her name and
the names of the plaintiffs in Civil Case No. 15871, among others. (Annex
"E," G.R. No. 62042, p. 51, Rollo) In fact, one of the issues raised by
petitioners Maria Provido Gotera and Gregoria Perez in G.R. No. 62042 was
as follows:chanrob1es virtual 1aw library
x x x

"2. Whether or not, in the same reconstitution proceedings, respondent

Judge Midpantao L. Adil had the authority to declare as null and void the
transfer certificate of title in the name of petitioner Maria Provido Gotera and
her other co-owners." (p. 3, Rollo; Emphasis supplied)

It thus appears that the plaintiffs in Civil Case No. 15871 were privies to
G.R. No. 62042 contrary to the trial court’s findings that they were not.

G.R. No. 62042 affirmed the order of the then Court of First Instance of Iloilo
in the reconstitution proceedings declaring TCT No. 25772 in the name of
Providos over Lot No. 4517, Sta. Barbara Cadastre null and void for being
fraudulently obtained and declaring TCT No. 106098 over the same parcel
Lot No. 4517, Sta. Barbara Cadastre in the name of petitioners Eduardo
Baranda and Alfonso Hitalia valid and subsisting.

The decision in G.R. No. 62042 became final and executory on March 25,
1983 long before Civil Case No. 15871 was filed.

Under these circumstances, it is crystal clear that the Providos, private

respondents herein, in filing Civil Case No. 15871 were trying to delay the
full implementation of the final decisions in G.R. No. 62042 as well as G.R.
No. 64432 wherein this Court ordered immediate implementation of the
writs of possession and demolition in the reconstitution proceedings
involving Lot No. 4517, Sta. Barbara Cadastre.
The purpose of a notice of lis pendens is defined in the following
manner:jgc:chanrobles.com.ph

"Lis pendens has been conceived to protect the real rights of the party
causing the registration thereof. With the lis pendens duly recorded, he
could rest secure that he would not lose the property or any part of it. For,
notice of lis pendens serves as a warning to a prospective purchaser or
incumbrancer that the particular property is in litigation; and that he should
keep his hands off the same, unless of course he intends to gamble on the
results of the litigation. (Section 24, Rule 14, Rules of Court; Jamora v.
Duran, Et Al., 69 Phil. 3, 11; I Martin, Rules of Court, p. 415, footnote 3,
citing cases.)" (Nataño v. Esteban, 18 SCRA 481, 485-486).

The private respondents are not entitled to this protection. The facts
obtaining in this case necessitate the application of the rule enunciated in
the cases of Victoriano v. Rovira (55 Phil. 1000), Municipal Council of
Parañaque v. Court of First Instance of Rizal (70 Phil. 363) and Sarmiento v.
Ortiz (10 SCRA 158), to the effect that:jgc:chanrobles.com.ph

"We have once held that while ordinarily a notice of pendency which has
been filed in a proper case, cannot be cancelled while the action is pending
and undetermined, the proper court has the discretionary power to cancel it
under peculiar circumstances, as for instance, where the evidence so far
presented by the plaintiff does not bear out the main allegations of his
complaint, and where the continuances of the trial, for which the plaintiff is
responsible, are unnecessarily delaying the determination of the case to the
prejudice of the defendant. Victoriano v. Rovira, supra; The Municipal
Council of Parañaque v. Court of First Instance of Rizal, supra)"

The facts of this case in relation to the earlier cases brought all the way to
the Supreme Court illustrate how the private respondents tried to block but
unsuccessfully the already final decisions in G.R. No. 62042 and G.R. No.
64432.
Parenthetically, respondent Judge Tito Gustilo abused his discretion in
sustaining the respondent Acting Register of Deeds’ stand that the notice of
lis pendens in the certificates of titles of the petitioners over Lot No. 4571,
Barbara Cadastre cannot be cancelled on the ground of pendency of Civil
Case No. 15871 with the Court of Appeals. In upholding the position of the
Acting Register of Deeds based on Section 77 of Presidential Decree No.
1529, he conveniently forgot the first paragraph thereof which
provides:jgc:chanrobles.com.ph

"Cancellation of lis pendens. — Before final judgment, a notice of lis pendens

may be cancelled upon Order of the Court after proper showing that the
notice is for the purpose of molesting the adverse party, or that it is not
necessary to protect the rights of the party who caused it to be registered. It
may also be cancelled by the Register of Deeds upon verified petition of the
party who caused the registration thereof."cralaw virtua1aw library

This Court cannot understand how respondent Judge Gustilo could have
been misled by the respondent Acting Register of Deeds on this matter when
in fact he was the same Judge who issued the order dismissing Civil Case
No. 15871 prompting the private respondents to appeal said order dated
October 10, 1984 to the Court of Appeals. The records of the main case are
still with the court below but based on the order, it can be safely assumed
that the various pleadings filed by the parties subsequent to the motion to
dismiss filed by the petitioners (the defendants therein) touched on the issue
of the validity of TCT No. 25772 in the name of the Providos over Lot
Number 4571, Sta. Barbara Cadastre in the light of the final decisions in
G.R. No. 62042 and G.R. No. 64432.

The next question to be determined is on the nature of the duty of the

Register of Deeds to annotate and/or cancel the notice of lis pendens in a
torrens certificate of title.
Section 10, Presidential Decree No. 1529 states that "It shall be the duty of
the Register of Deeds to immediately register an instrument presented for
registration dealing with real or personal property which complies with all
the requests for registration . . . If the instrument is not registrable, he shall
forthwith deny registration thereof and inform the presentor of such denial in
writing, stating the ground or reasons therefore, and advising him of his
right to appeal by consulta in accordance with Section 117 of this
Decree."cralaw virtua1aw library

Section 117 provides that "When the Register of Deeds is in doubt with
regard to the proper step to be taken or memoranda to be made in
pursuance of any deed, mortgage or other instrument presented to him for
registration or where any party in interest does not agree with the action
taken by the Register of Deeds with reference to any such instrument, the
question shall be submitted to the Commission of Land Registration by the
Register of Deeds, or by the party in interest thru the Register of Deeds . .
."cralaw virtua1aw library

The elementary rule in statutory construction is that when the words and
phrases of the statute are clear and unequivocal, their meaning must be
determined from the language employed and the statute must be taken to
mean exactly what it says. (Aparri v. Court of Appeals, 127 SCRA 231;
Insular Bank of Asia and America Employees’ Union [IBAAEU] v. Inciong,
132 SCRA 663) The statute concerning the function of the Register of Deeds
to register instruments in a torrens certificate of title is clear and leaves no
room for construction. According to Webster’s Third International Dictionary
of the English Language — the word shall means "ought to, must, . . .
obligation - used to express a command or exhortation, used in laws,
regulations or directives to express what is mandatory." Hence, the function
of a Register of Deeds with reference to the registration of deeds
encumbrances, instruments and the like is ministerial in nature. The
respondent Acting Register of Deeds did not have any legal standing to file a
motion for reconsideration of the respondent Judge’s Order directing him to
cancel the notice of lis pendens annotated in the certificates of titles of the
petitioners over the subject parcel of land. In case of doubt as to the proper
step to be taken in pursuance of any deed . . . or other instrument
presented to him, he should have asked the opinion of the Commissioner of
Land Registration now, the Administrator of the National Land Title and
Deeds Registration Administration in accordance with Section 117 of
Presidential Decree No. 1529.

In the ultimate analysis, however, the responsibility for the delays in the full
implementation of this Court’s already final resolutions in G.R. No. 62042
and G.R. No. 64432 which includes the cancellation of the notice of lis
pendens annotated in the certificates of titles of the petitioners over Lot No.
4517 of the Sta. Barbara Cadastre falls on the respondent Judge. He should
never have allowed himself to become part of dilatory tactics, giving as
excuse the wrong impression that Civil Case No. 15871 filed by the private
respondents involves another set of parties claiming Lot No. 4517 under
their own Torrens Certificate of Title.

WHEREFORE, the instant petition is GRANTED. The February 12, 1987 order
of the Regional Trial Court of Iloilo, Branch 23 is REINSTATED. All
subsequent orders issued by the trial court which annulled the February 12,
1987 order are SET ASIDE. Costs against the private respondents.

SO ORDERED.
 THIRD DIVISION

[G.R. No. 102858. July 28, 1997]

THE DIRECTOR OF LANDS, Petitioner, v. COURT OF APPEALS and

TEODORO ABISTADO, substituted by MARGARITA, MARISSA,
MARIBEL, ARNOLD and MARY ANN, all surnamed ABISTADO,
Respondents.

DECISION

PANGANIBAN, J.:

Is newspaper publication of the notice of initial hearing in an original land

registration case mandatory or directory?

Statement of the Case

The Court of Appeals ruled that it was merely procedural and that the failure
to cause such publication did not deprive the trial court of its authority to
grant the application. But the Solicitor General disagreed and thus filed this
petition to set aside the Decision1 promulgated on July 3, 1991 and the
subsequent Resolution2 promulgated on November 19, 1991 by Respondent
Court of Appeals3 in CA-G.R. CV No. 23719. The dispositive portion of the
challenged Decision reads:4chanroblesvirtuallawlibrary

"WHEREFORE, premises considered, the judgment of dismissal appealed

from is hereby set aside, and a new one entered confirming the registration
and title of applicant, Teodoro Abistado, Filipino, a resident of Barangay 7,
Poblacion Mamburao, Occidental Mindoro, now deceased and substituted by
Margarita, Marissa, Maribel, Arnold and Mary Ann, all surnamed Abistado,
represented by their aunt, Miss Josefa Abistado, Filipinos, residents of
Poblacion Mamburao, Occidental Mindoro, to the parcel of land covered
under MSI (IV-A-8) 315-D located in Poblacion Mamburao, Occidental
Mindoro.

The oppositions filed by the Republic of the Philippines and private oppositor
are hereby dismissed for want of evidence.

Upon the finality of this decision and payment of the corresponding taxes
due on this land, let an order for the issuance of a decree be issued."

The Facts

On December 8, 1986, Private Respondent Teodoro Abistado filed a petition

for original registration of his title over 648 square meters of land under
Presidential Decree (PD) No. 1529.5 The application was docketed as Land
Registration Case (LRC) No. 86 and assigned to Branch 44 of the Regional
Trial Court of Mamburao, Occidental Mindoro.6 However, during the
pendency of his petition, applicant died. Hence, his heirs -- Margarita,
Marissa, Maribel, Arnold and Mary Ann, all surnamed Abistado -- represented
by their aunt Josefa Abistado, who was appointed their guardian ad litem,
were substituted as applicants.

The land registration court in its decision dated June 13, 1989 dismissed the
petition for want of jurisdiction. However, it found that the applicants
through their predecessors-in-interest had been in open, continuous,
exclusive and peaceful possession of the subject land since 1938.
In dismissing the petition, the trial court
reasoned:7chanroblesvirtuallawlibrary

"x x x. However, the Court noted that applicants failed to comply with the
provisions of Section 23 (1) of PD 1529, requiring the Applicants to publish
the notice of Initial Hearing (Exh. `E') in a newspaper of general circulation
in the Philippines. Exhibit `E' was only published in the Official Gazette
(Exhibits `F' and `G'). Consequently, the Court is of the well considered
view that it has not legally acquired jurisdiction over the instant application
for want of compliance with the mandatory provision requiring publication of
the notice of initial hearing in a newspaper of general circulation."

The trial court also cited Ministry of Justice Opinion No. 48, Series of 1982,
which in its pertinent portion provides:8chanroblesvirtuallawlibrary

It bears emphasis that the publication requirement under Section 23 [of PD

1529] has a two-fold purpose; the first, which is mentioned in the provision
of the aforequoted provision refers to publication in the Official Gazette, and
is jurisdictional; while the second, which is mentioned in the opening clause
of the same paragraph, refers to publication not only in the Official Gazette
but also in a newspaper of general circulation, and is procedural. Neither one
nor the other is dispensable. As to the first, publication in the Official
Gazette is indispensably necessary because without it, the court would be
powerless to assume jurisdiction over a particular land registration case. As
to the second, publication of the notice of initial hearing also in a newspaper
of general circulation is indispensably necessary as a requirement of
procedural due process; otherwise, any decision that the court may
promulgate in the case would be legally infirm.

Unsatisfied, private respondents appealed to Respondent Court of Appeals

which, as earlier explained, set aside the decision of the trial court and
ordered the registration of the title in the name of Teodoro Abistado.
The subsequent motion for reconsideration was denied in the challenged CA
Resolution dated November 19, 1991.

The Director of Lands represented by the Solicitor General thus elevated this
recourse to us. This Court notes that the petitioners counsel anchored his
petition on Rule 65. This is an error. His remedy should be based on Rule 45
because he is appealing a final disposition of the Court of Appeals. Hence,
we shall treat his petition as one for review under Rule 45, and not for
certiorari under Rule 65.9chanroblesvirtuallawlibrary

The Issue

Petitioner alleges that Respondent Court of Appeals committed grave abuse

of discretion10 in holding

x x x that publication of the petition for registration of title in LRC Case No.
86 need not be published in a newspaper of general circulation, and in not
dismissing LRC Case No. 86 for want of such publication.

Petitioner points out that under Section 23 of PD 1529, the notice of initial
hearing shall be published both in the Official Gazette and in a newspaper of
general circulation. According to petitioner, publication in the Official Gazette
is necessary to confer jurisdiction upon the trial court, and xxx in xxx a
newspaper of general circulation to comply with the notice requirement of
due process.11chanroblesvirtuallawlibrary

Private respondents, on the other hand, contend that failure to comply with
the requirement of publication in a newspaper of general circulation is a
mere procedural defect. They add that publication in the Official Gazette is
sufficient to confer jurisdiction.12chanroblesvirtuallawlibrary
In reversing the decision of the trial court, Respondent Court of Appeals
ruled:13chanroblesvirtuallawlibrary

x x x although the requirement of publication in the Official Gazette and in a

newspaper of general circulation is couched in mandatory terms, it cannot
be gainsaid that the law also mandates with equal force that publication in
the Official Gazette shall be sufficient to confer jurisdiction upon the court.

Further, Respondent Court found that the oppositors were afforded the
opportunity to explain matters fully and present their side. Thus, it justified
its disposition in this wise:14chanroblesvirtuallawlibrary

x x x We do not see how the lack of compliance with the required procedure
prejudiced them in any way. Moreover, the other requirements of:
publication in the Official Gazette, personal notice by mailing, and posting at
the site and other conspicuous places, were complied with and these are
sufficient to notify any party who is minded to make any objection of the
application for registration.

The Courts Ruling

We find for petitioner.

Newspaper Publication Mandatory

The pertinent part of Section 23 of Presidential Decree No. 1529 requiring

publication of the notice of initial hearing reads as follows:
Sec. 23. Notice of initial hearing, publication, etc. -- The court shall, within
five days from filing of the application, issue an order setting the date and
hour of the initial hearing which shall not be earlier than forty-five days nor
later than ninety days from the date of the order.

The public shall be given notice of initial hearing of the application for land
registration by means of (1) publication; (2) mailing; and (3) posting.

1. By publication. --

Upon receipt of the order of the court setting the time for initial hearing, the
Commissioner of Land Registration shall cause a notice of initial hearing to
be published once in the Official Gazette and once in a newspaper of general
circulation in the Philippines: Provided, however, that the publication in the
Official Gazette shall be sufficient to confer jurisdiction upon the court. Said
notice shall be addressed to all persons appearing to have an interest in the
land involved including the adjoining owners so far as known, and `to all
whom it may concern.' Said notice shall also require all persons concerned to
appear in court at a certain date and time to show cause why the prayer of
said application shall not be granted.

xxx xxx xxx

Admittedly, the above provision provides in clear and categorical terms that
publication in the Official Gazette suffices to confer jurisdiction upon the land
registration court. However, the question boils down to whether, absent any
publication in a newspaper of general circulation, the land registration court
can validly confirm and register the title of private respondents.
We answer this query in the negative. This answer is impelled by the
demands of statutory construction and the due process rationale behind the
publication requirement.

The law used the term shall in prescribing the work to be done by the
Commissioner of Land Registration upon the latters receipt of the court order
setting the time for initial hearing. The said word denotes an imperative and
thus indicates the mandatory character of a statute.15 While concededly
such literal mandate is not an absolute rule in statutory construction, as its
import ultimately depends upon its context in the entire provision, we hold
that in the present case the term must be understood in its normal
mandatory meaning. In Republic vs. Marasigan,16 the Court through Mr.
Justice Hilario G. Davide, Jr. held that Section 23 of PD 1529 requires notice
of the initial hearing by means of (1) publication, (2) mailing and (3)
posting, all of which must be complied with. If the intention of the law were
otherwise, said section would not have stressed in detail the requirements of
mailing of notices to all persons named in the petition who, per Section 15 of
the Decree, include owners of adjoining properties, and occupants of the
land. Indeed, if mailing of notices is essential, then by parity of reasoning,
publication in a newspaper of general circulation is likewise imperative since
the law included such requirement in its detailed provision.

It should be noted further that land registration is a proceeding in rem.17

Being in rem, such proceeding requires constructive seizure of the land as
against all persons, including the state, who have rights to or interests in the
property. An in rem proceeding is validated essentially through publication.
This being so, the process must strictly be complied with. Otherwise,
persons who may be interested or whose rights may be adversely affected
would be barred from contesting an application which they had no
knowledge of. As has been ruled, a party as an owner seeking the inscription
of realty in the land registration court must prove by satisfactory and
conclusive evidence not only his ownership thereof but the identity of the
same, for he is in the same situation as one who institutes an action for
recovery of realty.18 He must prove his title against the whole world. This
task, which rests upon the applicant, can best be achieved when all persons
concerned -- nay, the whole world -- who have rights to or interests in the
subject property are notified and effectively invited to come to court and
show cause why the application should not be granted. The elementary
norms of due process require that before the claimed property is taken from
concerned parties and registered in the name of the applicant, said parties
must be given notice and opportunity to oppose.

It may be asked why publication in a newspaper of general circulation should

be deemed mandatory when the law already requires notice by publication in
the Official Gazette as well as by mailing and posting, all of which have
already been complied with in the case at hand. The reason is due process
and the reality that the Official Gazette is not as widely read and circulated
as newspapers and is oftentimes delayed in its circulation, such that the
notices published therein may not reach the interested parties on time, if at
all. Additionally, such parties may not be owners of neighboring properties,
and may in fact not own any other real estate. In sum, the all-encompassing
in rem nature of land registration cases, the consequences of default orders
issued against the whole world and the objective of disseminating the notice
in as wide a manner as possible demand a mandatory construction of the
requirements for publication, mailing and posting.

Admittedly, there was failure to comply with the explicit publication

requirement of the law. Private respondents did not proffer any excuse;
even if they had, it would not have mattered because the statute itself
allows no excuses. Ineludibly, this Court has no authority to dispense with
such mandatory requirement. The law is unambiguous and its rationale
clear. Time and again, this Court has declared that where the law speaks in
clear and categorical language, there is no room for interpretation,
vacillation or equivocation; there is room only for application.19 There is no
alternative. Thus, the application for land registration filed by private
respondents must be dismissed without prejudice to reapplication in the
future, after all the legal requisites shall have been duly complied with.

WHEREFORE, the petition is GRANTED and the assailed Decision and

Resolution are REVERSED and SET ASIDE. The application of private
respondent for land registration is DISMISSED without prejudice. No costs.

SO ORDERED.
 EN BANC

[G.R. No. L-4712. July 11, 1952.]

RAMON DIOKNO, Plaintiff-Appellant, v. REHABILITATION FINANCE

CORPORATION, Defendant-Appellee.

The appellant in his own behalf.

Sixto de la Costa for Appellee.

SYLLABUS

1. STATUTORY CONSTRUCTION; "SHALL" MAY BE CONSTRUED AS "MAY." —

In its ordinary signification the word "shall" is imperative or mandatory.
However, this signification is not always followed; it may be construed as
"may," when so required by the context or by the intention of the statute.

2. ID.; BACKPAY LAW; REPUBLIC ACT NO. 304, SECTION 2 CONSTRUED AS

DIRECTORY. — Section 2 of Republic Act No. 304, in so far as the discount
and acceptance of backpay certificates are concerned, should be interpreted
to be directory merely, not mandatory, the same to be construed as a
directive for the Rehabilitation Finance Corporation to invest a reasonable
portion of its funds for the discount of backpay certificates, from time to
time in its sound discretion, as circumstances and its resources may
warrant.

3. OBLIGATIONS AND CONTRACTS; ACTIONS FOR SPECIFIC PERFORMANCE

DOES NOT LIE IF OBLIGATION IS NOT CONTRACTUAL. — If an action is not
based on any contractual relation between plaintiff and defendant, it may
not be one for specific performance.

4. PLEADING AND PRACTICE; MANDAMUS DOES NOT LIE TO COMPEL

ACCEPTANCE OF BACKPAY CERTIFICATE IN PAYMENT OF OBLIGATION
CONTRACTED AFTER 1948. — Mandamus does not lie to compel the
Rehabilitation Finance Corporation to accept backpay certificates in payment
of outstanding loans. Although there is no provision expressly authorizing
such acceptance, nor is there one prohibiting it, yet the duty imposed by the
Backpay Law upon said Corporation as to the acceptance or discount of
backpay certificates is neither clear nor ministerial, but discretionary merely,
and such special civil action does not issue to control the exercise of
discretion of a public officer.

DECISION

LABRADOR, J.:

Plaintiff is the holder of a backpay certificate of indebtedness issued by the

Treasurer of the Philippines under the provisions of Republic Act No. 304 of a
face value of P75,857.14 dated August 30, 1948. On or about November 10,
1950, when this action was brought, he had an outstanding loan with the
Rehabilitation Finance Corporation, contracted therewith on January 27,
1950, in the total sum of P50,000, covered by a mortgage on his property
situated at 44 Alhambra, Ermita, Manila, with interest at 4 per cent per
annum, of which P47,355.28 was still unpaid. In this action he seeks to
compel the defendant corporation to accept payment of the balance of his
indebtedness with his backpay certificate. The defendant resists the suit on
the ground that plaintiff’s demand is not only not authorized by section 2 of
Republic Act No. 304 but contrary to the provisions thereof, and furthermore
because plaintiff’s loan was obtained on January 27, 1950, much after the
passage of Republic Act No. 304, and because the law permits only
"acceptance or discount of backpay certificates," not the repayment of loans.
The court a quo held that section 2 of Republic Act No. 304 is permissive
merely, and that even if it were mandatory, plaintiff’s case can not fall
thereunder because he is not acquiring property for a home or constructing
a residential house, but compelling the acceptance of his backpay certificate
to pay a debt he contracted after the enactment of Republic Act No. 304. It,
therefore, dismissed the complaint with costs.

The appeal involves the interpretation of section 2 of Republic Act No. 304,
which provides:chanrob1es virtual 1aw library

. . . And provided, also, That investment funds or banks or other financial

institutions owned or controlled by the Government shall, subject to
availability of loanable funds, and any provision of their charters, articles of
incorporations, by-laws, or rules and regulations to the contrary
notwithstanding, accept or discount at not more than two per centum per
annum for ten years such certificate for the following purposes only: (1) the
acquisition of real property for use as the applicant’s home, or (2) the
building or construction or reconstruction of the residential house of the
payee of said certificate: . . .

It is first contended by the appellant that the above provision is mandatory,

not only because it employs the word "shall", which in its ordinary
signification is mandatory, not permissive, but also because the provision is
applicable to institutions of credit under the control of the Government, and
because otherwise the phrases "subject to availability of loanable funds" and
"any provisions of this charter, . . . and regulations to the contrary
notwithstanding" would be superfluous.

It is true that in its ordinary signification the word "shall" is imperative.

In common or ordinary parlance, and in its ordinary signification, the term
"shall’ is a word of command, and one which has always or which must be
given a compulsory meaning; as denoting obligation. It has a peremptory
meaning, and it is generally imperative or mandatory. It has the invariable
significance of operating to impose a duty which may be enforced,
particularly if public policy is in favor of this meaning or when addressed to
public officials, or where a public interest is involved, or where the public or
persons have rights which ought to be exercised or enforced, unless a
contrary intent appears. People v. O’Rourke, 13 P. 2d. 989, 992, 124 Cal.
App. 752. (39 Words and Phrases, Permanent Ed., p. 90.) .

The presumption is that the word "shall" in a statute is used in an

imperative, and not in a directory, sense. If a different interpretation is
sought, it must rest upon something in the character of the legislation or in
the context which will justify a different meaning. Haythorn v. Van Keuren &
Son, 74 A. 502, 504, 79 N. J. L. 101; Board of Finance of School City of
Aurora v. People’s Nat. Bank of Lawrenceburg, 89 N. E. 904, 905, 44 Ind.
App. 578. (39 Words and Phrases, Permanent Ed., p. 93.)

However, the rule is not absolute; it may be construed as "may", when so

required by the context or by the intention of the statute.

In its ordinary signification, "shall" is imperative, and not permissive, though

it may have the latter meaning when required by the context. Town of Milton
v. Cook, 138 N. E. 589, 590, 244 Mass. 93. (39 Words and Phrases,
Permanent Ed., p. 89.) .

"Must" or "shall’ in a statute is not always imperative, but may be consistent

with an exercise of discretion. In re O’Hara, 82 N. Y. S. 293, 296, 40 Misc.
355, citing In re Thurber’s Estate, 162 N. Y. 244, 252, 56 N. E. 638, 639.
(Ibid. p. 92.) .
The word "shall" is generally regarded as imperative, but in some contexts it
is given a permissive meaning, the intended meaning being determined by
what is intended by the statute. National Transit Co. v. Boardman, 197 A.
239, 241, 328 Pa. 450.

The word "shall" is to be construed as merely permissive, where no public

benefit or private right requires it to be given an imperative meaning.
Sheldon v. Sheldon, 134 A. 904, 905, 100 N. J. Ex. 24.

Presumption is that word "shall," in ordinance, is mandatory; but, where it is

necessary to give effect to legislative intent, the word will be construed as
"may." City of Colorado Springs v. Street, 254 p. 440, 441, 81 Colo. 181.

The word "shall" does not necessarily indicate a mandatory behest. Grimsrud
v. Johnson, 202 N. W. 72, 73, 162 Minn. 98.

Words like "may," "must," "shall," etc., are constantly used in statutes
without intending that they shall be taken literally, and in their construction
the object evidently designed to be reached limits and controls the literal
import of the terms and phrases employed. Fields v. United States, 27 App.
D. C. 433, 440. (39 Words and Phrases, Permanent Ed., pp. 89, 92).

In this jurisdiction the tendency has been to interpret the word "shall" as the
context or a reasonable construction of the statute in which it is used
demands or requires. Thus the provision of section 11 of Rule 4 of the Rules
requiring a municipal judge or a justice of the peace to render judgment at
the conclusion of the trial has been held to be directory. (Alejandro v. Judge
of First Instance 1 40 Off. Gaz., 9th Supp., 261). In like manner section 178
of the Election Law, in so far as it requires that appeals shall be decided in
three months, has been held to be directory for the Court of Appeals.
(Querubin v. The Court of Appeals, 2 46 Off. Gaz., 155).
In the provision subject of controversy, it is to be noted that the verb-phrase
"shall accept or discount" has two modifiers, namely, "subject to availability
of loanable funds" and "at not more than two per centum per annum for ten
years." As to the second modifier, the interest to be charged, there seems to
be no question that the verbphrase is mandatory, because not only does the
law use "at not more" but the legislative purpose and intent, to conserve the
value of the backpay certificate for the benefit of the holders, for whose
benefit the same have been issued, can be carried out by fixing a maximum
limit for discounts. But as to when the discounting or acceptance shall be
made, the context and the sense demand a contrary interpretation. The
phrase "subject" means "being under the contingency of" (Webster’s Int.
Dict.) a condition. If the acceptance or discount of the certificates is to be
"subject" to the condition of the availability of loanable funds, it is evident
that the Legislature intended that the acceptance shall be allowed on the
condition that there are "available loanable funds." In other words,
acceptance or discount is to be permitted only if there are loanable funds.

Let us now consider the meaning of the condition imposed for accepting or
discounting certificates, the "availability of loanable funds." On this issue the
appellant contends that the mere facts that P50,000 was loaned to him and
that the Rehabilitation Finance Corporation has been granting loans up to
the time plaintiff offered to pay the loan with his certificate — these prove
that there are "available loanable funds." As the court a quo did not pass on
such availability, he also contends that this is a question of fact to be
determined by the courts. The defendant denies the existence of "available
loanable funds." The gist of plaintiffs’ contention is that any and all funds of
the Rehabilitation Finance Corporation are subject to the provision for the
discount or acceptance of the certificates; that of defendant-appellee is that
only funds made available for the purpose of discounting backpay certificates
may be used for such purpose and that at the time the action was filed there
were no such funds.

The Rehabilitation Finance Corporation was created by Republic Act No. 85,
which was approved on October 29, 1946. The corporation was created "to
provide credit facilities for the rehabilitation and development of agriculture,
commerce and industry, the reconstruction of property damaged by war,
and the broadening and diversification of the national economy" (section 1),
and to achieve the above aims it was granted the following
powers:chanrob1es virtual 1aw library

SEC. 2. Corporate powers. — The Rehabilitation Finance Corporation shall

have power:chanrob1es virtual 1aw library

(a) To grant loans for home building and for the rehabilitation, establishment
or development of any agricultural, commercial or industrial enterprise,
including public utilities;

(b) To grant loans to provincial, city and municipal governments for the
rehabilitation, construction or reconstruction of public markets, waterworks,
toll bridges, slaughterhouses, and other self- liquidating or income-producing
services;

(c) To grant loans to agencies and corporations owned or controlled by the

Government of the Republic of the Philippines for the production and
distribution of electrical power, for the purchase and subdivision of rural and
urban estates, for housing projects, for irrigation and waterworks systems,
and for other essential industrial and agricultural enterprises;

(d) To grant loans to cooperative associations to facilitate production, the

marketing of crops, and the acquisition of essential commodities;

(e) To underwrite, purchase, own, sell, mortgage or otherwise dispose of

stocks, bonds, debentures, securities and other evidences of indebtedness
issued for or in connection with any project or enterprise referred to in the
preceding paragraphs;
(f) To issue bonds, debentures, securities, collaterals, and other obligations
with the approval of the President, but in no case to exceed at any one time
an aggregate amount equivalent to one hundred per centum of its
subscribed capital and surplus. . . . .

If the Rehabilitation Finance Corporation is to carry out the aims and

purposes for which it was created, it must evolve a definite plan of the
industries or activities which it should rehabilitate, establish or develop, and
apportion its available funds and resources among these, consistent with the
policies outlined in its charter.

As of May 31, 1948, immediately prior to the passage of the Backpay Law, it
had granted the following classes of loans.

Agricultural loans P23,610,350.74

Industrial loans 22,717,565.87

Real Estate loans 34,601,258.29

Loans for purchase, Subdivision and

Resale of Landed Estates 7,271,258.78

Loans to Provinces, Cities, and

Municipalitiesfor Self-liquidating

Projects 1,889,763.00

____________

Total Loans P90,090,077.68

(Exhibit 2).

As of February 2, 1951, the corporation had accepted in payment of loans

granted before June 18, 1948, the total amount of P8,225,299.96, as
required by section 2 of the Backpay Law. (See Exhibit 11, p. 4.)

The third anniversary report of the Rehabilitation Finance Corporation dated

January 2, 1950 (Exhibit 1), shows that the funds originally available to the
corporation came from the following sources:chanrob1es virtual 1aw library

Funds made available:chanrob1es virtual 1aw library

Initial cash capital P50,000,000.00

Cash transferred from Financial

Rehabilitation funds 2,423,079.74

Cash received from Surplus Property

Commission 26,350,000.00

Cash received from Phil. Shipping Adm. 3,700,000.00

Cash payment of capital 82,473,079.74

Proceeds of bond issues 58,909,148.18

Advances from the Central Bank 10,000,000.00

There was also collectible from loans the total amount of P28,659,442.12, so
that the total cash available to the corporation from January 2, 1947, to
November 30, 1949, was P180,041,670.04. But the total amount of loans
already approved as of the last date was P203,667,403.78 and the total of
approved loans pending release was P25,342,020.78, and the only cash
balance available in November, 1949, to meet these approved loans was
P1,716,286.71.

It may readily be seen from the above data that were we to follow
appellants’ theory and contention that the law is mandatory, the loan he had
applied for, as well as that of any holder of a backpay certificate, would have
to be paid out of this available cash, pursuant to the alleged mandate of
section 2 of the Backpay Law. The compulsory acceptance and discount of
certificates will bring about, as a direct and necessary consequence, the
suspension of all, if not of most, of the activities of the Rehabilitation Finance
Corporation; and no agricultural or industrial loans, or loans to financial
institutions and local governments for their markets, waterworks, etc., would
be granted, until all the backpay certificates (amounting to some hundred
millions of pesos) shall have been accepted or discounted. And as the
defendant-appellant forcefully argues, even funds obtained by the
Rehabilitation Finance Corporation by the issue of bonds, at rates of interest
of more than 2 per cent, the rate fixed for the discount of backpay
certificates, will have to be loaned to holders of backpay certificates at a
loss, to the prejudice of the corporation. There would be loans for holders of
backpay certificates, but none for rehabilitation or reconstruction, or
development of industries, or of the national economy; there would be funds
for employees’ loans, but none for those engaged in agriculture and
industry, none for the improvements of public services, etc, as all
Rehabilitation Finance Corporation funds will be necessary to meet the
demands of holders of backpay certificates. And if it be remembered that the
provision is intended for all financial institutions controlled by the
Government, the consequences would be felt by all industries and activities,
and the whole scheme of national financial organization and development
disrupted. It seems evident that the legislature never could have intended
such absurd consequences, even with all the sympathy that it is showing for
holders of backpay certificates.

But while we agree with the appellee that it could not have been the
intention of Congress to disrupt the whole scheme of rehabilitation,
reconstruction, and development envisioned in the Rehabilitation Act, by its
passage of section 2 of the Backpay Law, neither are we prepared to follow
appellee’s insinuation that the section is impracticable or impossible of
execution by the Rehabilitation Finance Corporation in the situation in which
its funds and resources were at the time of the trial. In our opinion, what the
Legislature intended by the provision in dispute is that the Rehabilitation
Finance Corporation, through its Board of Directors, should from time to
time set aside some reasonable amount for the discount of backpay
certificates, when this can be done without unduly taxing its resources, or
unduly prejudicing the plan of rehabilitation and development that it has
mapped out, or that which the corresponding authority has laid down as a
policy. This legislative intention can be inferred from the fact that Congress
itself expressly ordered that all financial institutions accept or discount
backpay certificates in payment of those loans, evidently laying down an
example to be followed by financial institutions under its control. The loans
granted under section 2 of the law by the Rehabilitation Finance Corporation
amounted to P8,225,299.96. It is not shown or even pretended that the
payment of this considerable amount has impaired or disrupted the activities
of the Rehabilitation Finance Corporation. It is not claimed, either, that at
the time of the filing of appellant’s action the Rehabilitation Finance
Corporation was in no position to set aside a modest sum, in a manner
similar to the creation of a sinking fund, for the discount of backpay
certificates to help the Government comply with its financial commitments.
We are convinced that the Rehabilitation Finance Corporation may, without
impairment of its activities, set aside from time to time, say, half a million
pesos or a considerable part thereof, for the payment of backpay
certificates. But these circumstances notwithstanding, we are of the opinion
that the law in question (section 2 of the Backpay Law), in so far as the
discount and acceptance of backpay certificates are concerned, should be
interpreted to be directory merely, not mandatory, as claimed by plaintiff-
appellant, the same to be construed as a directive for the Rehabilitation
Finance Corporation to invest a reasonable portion of its funds for the
discount of backpay certificates, from time to time and in its sound
discretion, as circumstances and its resources may warrant.

Having come to the conclusion that section 2 of the Backpay Law is directory
merely, we now address ourselves to the propriety of the action, which the
plaintiff and appellant labels as specific performance. As the action is not
based on any contractual relation between the plaintiff and appellant and the
defendant and appellee, it may be one for specific performance; it is in effect
predicated on a supposed legal duty imposed by law and is properly
designated as a special civil action of mandamus, because the appellant
seeks to compel the appellee to accept his backpay certificate in payment of
his outstanding obligation. We are not impressed by the defense, technical in
a sense, that the Rehabilitation Finance Corporation is not expressly
authorized to accept certificates in payment of outstanding loans. There is
no provision expressly authorizing this procedure or system; but neither is
there one prohibiting it. The legislature had once ordered it; the
Rehabilitation Finance Corporation has once authorized it. We believe the
legislature could not have intended to discriminate against those who have
already built their houses, who have contracted obligations in so doing. We
prefer to predicate our ruling that this special action does not lie on the
ground that the duty imposed by the Backpay Law upon the appellee as to
the acceptance or discount of backpay certificates is neither clear nor
ministerial, but discretionary merely and that mandamus does not issue to
control the exercise of discretion of a public officer. (Viuda e Hijos de
Crispulo Zamora v. Wright and Segado, 53 Phil., 613, 621, Blanco v. Board
of Medical Examiners, 46 Phil., 190, 192, citing Lamb v. Phipps, 22 Phil.,
456; Gonzales v. Board of Pharmacy, 20 Phil., 367, etc.) It is, however,
argued on behalf of the appellant that inasmuch as the Board of Directors of
the Rehabilitation Finance Corporation has seen fit to approve a resolution
accepting backpay certificates amounting to P151,000 (Exhibit H), law and
equity demand that the same privilege should be accorded him. The trial
court held that the above resolution was illegal and that its unauthorized
enactment (which he called a "wrong") does not justify its repetition for the
benefit or appellant. As we have indicated above, we believe that its
approval (not any supposed discrimination on behalf of some special
holders) can be defended under the law, but that the passage of a similar
resolution can not be enjoined by an action of mandamus.

We must admit, however, that appellant’s case is not entirely without any
merit or justification; similar situations have already been favorably acted
upon by the Congress, when it ordered that certificates be accepted in
payment of outstanding obligations, and by the Rehabilitation Finance
Corporation in its above-mentioned resolution. But we feel we are powerless
to enforce his claim, as the acceptance and discount of backpay certificates
has been placed within the sound discretion of the Rehabilitation Finance
Corporation, and subject to the availability of loanable funds, and said
discretion may not be reviewed or controlled by us. It is clear that this
remedy must be available in other quarters, not in the courts of justice.

For all the foregoing considerations, we are constrained to dismiss the

appeal, with costs against the Appellant.

Paras, C.J., Feria, Pablo, Padilla, Tuason, Montemayor and Bautista Angelo,
JJ., concur.
EN BANC

[G.R. No. 112099. February 21, 1995.]

ACHILLES C. BERCES, SR., Petitioner, v. HON. EXECUTIVE SECRETARY

TEOFISTO T. GUINGONA, JR., CHIEF PRESIDENTIAL LEGAL COUNSEL
ANTONIO CARPIO and MAYOR NAOMI C. CORRAL OF TIWI, ALBAY,
Respondents.

DECISION

QUIASON, J.:

This is a petition for Certiorari and prohibition under Rule 65 of the Revised
Rules of Court with prayer for mandatory preliminary injunction, assailing
the Orders of the Office of the President as having been issued with grave
abuses of discretion. Said Orders directed the stay of execution of the
decision of the Sangguniang Panlalawigan suspending the Mayor of Tiwi,
Albay from office.

I
Petitioner filed two administrative cases against respondent Naomi C. Corral,
the incumbent Mayor of Tiwi, Albay with the Sangguniang Panlalawigan of
Albay, to wit:nadchanroblesvirtualawlibrary

(1) Administrative Case No. 02-92 for abuse of authority and/or oppression
for non-payment of accrued leave benefits due the petitioner amounting to
P36,779.02.

(2) Administrative Case No. 05-92 for dishonesty and abuse of authority for
installing a water pipeline which is being operated, maintained and paid for
by the municipality to service respondent's private residence and medical
clinic.

On July 1, 1993, the Sangguniang Panlalawigan disposed the two

Administrative cases in the following manner:nadchanroblesvirtualawlibrary

"(1) Administrative Case No. 02-92

ACCORDINGLY, respondent Mayor Naomi C. Corral of Tiwi, Albay, is hereby

ordered to pay Achilles Costo Berces, Sr. the sum of THIRTY-SIX THOUSAND
AND SEVEN HUNDRED SEVENTY-NINE PESOS and TWO CENTAVOS
(P36,779.02) per Voucher No. 352, plus legal interest due thereon from the
time it was approved in audit up to final payment, it being legally due the
Complainant representing the money value of his leave credits accruing for
services rendered in the municipality from 1988 to 1992 as a duly elected
Municipal Councilor. IN ADDITION, respondent Mayor NAOMI C. CORRAL is
hereby ordered SUSPENDED from office as Municipal Mayor of Tiwi, Albay,
for a period of two (2) months, effective upon receipt hereof for her blatant
abuse of authority coupled with oppression as a public example to deter
others similarly inclined from using public office as a tool for personal
vengeance, vindictiveness and oppression at the expense of the Taxpayer
(Rollo, p. 14).
"(2) Administrative Case No. 05-92

WHEREFORE, premises considered, respondent Mayor NAOMI C. CORRAL of

Tiwi, Albay, is hereby sentenced to suffer the penalty of SUSPENSION from
office as Municipal Mayor thereof for a period of THREE (3) MONTHS
beginning after her service of the first penalty of suspension ordered in
Administrative Case No. 02-92. She is likewise ordered to reimburse the
Municipality of Tiwi One-half of the amount the latter have paid for electric
and water bills from July to December 1992, inclusive" (Rollo, p. 16).cralaw

Consequently, respondent Mayor appealed to the Office of the President

questioning the decision and at the same time prayed for the stay of
execution thereof in accordance with Section 67(b) of the Local Government
Code, which provides:nadchanroblesvirtualawlibrary

"Administrative Appeals. — Decision in administrative cases may, within

thirty (30) days from receipt thereof, be appealed to the
following:nadchanroblesvirtualawlibrary

xxx xxx xxx

(b) The Office of the President, in the case of decisions of the sangguniang
panlalawigan and the sangguniang panglungsod of highly urbanized cities
and independent component cities."

Acting on the prayer to stay execution during the pendency of the appeal,
the Office of the President issued an Order on July 28, 1993, pertinent
portions of which read as follows:nadchanroblesvirtualawlibrary
xxx xxx xxx

"The stay or execution is governed by Section 68 of R.A. No. 7160 and

Section 6 of Administrative Order No. 18 dated 12 February 1987, quoted
below:nadchanroblesvirtualawlibrary

'SEC. 68. Execution Pending Appeal. — An appeal shall not prevent a

decision from becoming final or executory. The respondent shall be
considered as having been placed under preventive suspension during the
pendency of an appeal in the event he wins such appeal. In the event the
appeal results in an exoneration, he shall be paid his salary and such other
emoluments during the pendency of the appeal (R.A. No. 7160).cralaw

'SEC. 6. Except as otherwise provided by special laws, the execution of the

decision/resolution/order appealed from is stayed upon the filing of the
appeal within the period prescribed herein. However, in all cases, at any
time during the pendency of the appeal, the Office of the President may
direct or stay the execution of the decision/resolution/order appealed from
upon such terms and conditions as it may deem just and reasonable (Adm.
Order No. 18).'"

xxx xxx xxx

"After due consideration, and in the light of the Petition for Review filed
before this Office, we find that a stay of execution pending appeal would be
just and reasonable to prevent undue prejudice to public interest.
"WHEREFORE, premises considered, this Office hereby orders the
suspension/stay of execution of:nadchanroblesvirtualawlibrary

a) the Decision of the Sangguniang Panlalawigan of Albay in Administrative

Case No. 02-92 dated 1 July 1993 suspending Mayor Naomi C. Corral from
office for a period of two (2) months, and

b) the Resolution of the Sangguniang Panlalawigan of Albay in

Administrative Case No. 05-92 dated 5 July 1993 suspending Mayor Naomi
C. Corral from office for a period of three (3) months" (Rollo, pp. 55-56).
nadchanroblesvirtuallawlibrary

Petitioner then filed a Motion for Reconsideration questioning the aforesaid

Order of the Office of the President.

On September 13, 1990, the Motion for Reconsideration was denied.

Hence, this petition.

II

Petitioner claims that the governing law in the instant case is R.A. No. 7160,
which contains a mandatory provision that an appeal "shall not prevent a
decision from becoming final and executory." He argues that Administrative
Order No. 18 dated February 12, 1987, (entitled "Prescribing the Rules and
Regulations Governing Appeals to the Office of the President") authorizing
the President to stay the execution of the appealed decision at any time
during the pendency of the appeal, was repealed by R.A. No. 7160, which
took effect on January 1, 1991 (Rollo, pp. 5-6).cralaw
The petition is devoid of merit.

Petitioner invokes the repealing clause of Section 530 (f), R.A. No. 7160,
which provides:nadchanroblesvirtualawlibrary

"All general and special laws, acts, city charters, decrees, executive orders,
administrative regulations, part or parts thereof, which are inconsistent with
any of the provisions of this Code, are hereby repealed or modified
accordingly."

The aforementioned clause is not an express repeal of Section 6 of

Administrative Order No. 18 because it failed to identify or designate the
laws or executive orders that are intended to be repealed (cf . I Sutherland,
Statutory Construction 467 [1943]).cralaw

If there is any repeal of Administrative Order No. 18 by R.A. No. 7160, it is

through implication though such kind of repeal is not favored (The Philippine
American Management Co., Inc. v. The Philippine American Management
Employees Association, 49 SCRA 194 [1973]). There is even a presumption
against implied repeal.

An implied repeal predicates the intended repeal upon the condition that a
substantial conflict must be found between the new and prior laws. In the
absence of an express repeal, a subsequent law cannot be construed as
repealing a prior law unless an irreconcilable inconsistency and repugnancy
exists in the terms of the new and old laws (Iloilo Palay and Corn Planters
Association, Inc. v. Feliciano, 13 SCRA 377 [1965]). There must be such a
repugnancy between the laws that they cannot be made to stand together
(Crawford, Construction of Statutes 631 [1940]).cralaw
We find that the provisions of Section 68 of R.A. No. 7160 and Section 68 of
R.A. No. 7160 and Section 6 of Administrative Order No. 18 are not
irreconcilably inconsistent and repugnant and the two laws must in fact be
read together.

The first sentence of Section 68 merely provides that an "appeal shall not
prevent a decision from becoming final or executory." As worded, there is
room to construe said provision as giving discretion to the reviewing officials
to stay the execution of the appealed decision. There is nothing to infer
therefrom that the reviewing officials are deprived of the authority to order a
stay of the appealed order. If the intention of Congress was to repeal
Section 6 of Administrative Order No. 18, it could have used more direct
language expressive of such intention.

The execution of decisions pending appeal is procedural and in the absence

of a clear legislative intent to remove from the reviewing officials the
authority to order a stay of execution, such authority can be provided in the
rules and regulations governing the appeals of elective officials in
administrative cases.

The term "shall" may be read either as mandatory or directory depending

upon a consideration of the entire provision in which it is found, its object
and the consequences that would follow from construing it one way or the
other (cf. De Mesa v. Mencias, 18 SCRA 533 [1966]). In the case at bench,
there is no basis to justify the construction of the word as mandatory.

The Office of the President made a finding that the execution of the decision
of the Sangguniang Panlalawigan suspending respondent Mayor from office
might be prejudicial to the public interest. Thus, in order not to disrupt the
rendition of service by the mayor to the public, a stay of the execution of the
decision is in order. nadchanroblesvirtuallawlibrary
WHEREFORE, the petition is DISMISSED.

SO ORDERED.
 SECOND DIVISION

G.R. No. L-28742 April 30, 1982

VIRGILIO CAPATI, Plaintiff-Appellant, v. DR. JESUS P. OCAMPO,

defendant-appellee.

ESCOLIN, J.:

We set aside the order of the Court of First Instance of Pampanga in Civil
Case No. 3188 which dismissed the plaintiff's complaint on ground of
improper venue.chanroblesvirtualawlibrary chanrobles virtual law library

Plaintiff Virgilio Capati a resident of Bacolor, Pampanga, was the contractor

of the Feati Bank for the construction of its building in Iriga, Camarines Sur.
On May 23, 1967, plaintiff entered into a sub-contract with the defendant
Dr. Jesus Ocampo, a resident of Naga City, whereby the latter, in
consideration of the amount of P2,200.00, undertook to construct the vault
walls, exterior walls and columns of the said Feati building in accordance
with the specifications indicated therein. Defendant further bound himself to
complete said construction on or before June 5, 1967 and, to emphasize this
time frame for the completion of the construction job, defendant affixed his
signature below the following stipulation written in bold letters in the sub-
contract: "TIME IS ESSENTIAL, TO BE FINISHED 5 JUNE' 67." chanrobles
virtual law library

Claiming that defendant finished the construction in question only on June

20, 1967, plaintiff filed in the Court of First Instance of Pampanga an action
for recovery of consequential damages in the sum of P85,000.00 with
interest, plus attorney's fees and costs. The complaint alleged inter alia that
"due to the long unjustified delay committed by defendant, in open violation
of his express written agreement with plaintiff, the latter has suffered great
irreparable loss and damage ... " chanrobles virtual law library

Defendant filed a motion to dismiss the complaint on the ground that venue
of action was improperly laid. The motion was premised on the stipulation
printed at the back of the contract which reads: chanrobles virtual law
library

14. That all actions arising out, or relating to this contract may be instituted
in the Court of First Instance of the City of Naga.

Plaintiff filed an opposition to the motion, claiming that their agreement to

hold the venue in the Court of First Instance of Naga City was merely
optional to both contracting parties. In support thereof, plaintiff cited the use
of the word "may " in relation with the institution of any action arising out of
the contract.chanroblesvirtualawlibrary chanrobles virtual law library

The lower court, in resolving the motion to dismiss, ruled that "there was no
sense in providing the aforequoted stipulation, pursuant to Sec. 3 of Rule 4
of the Revised Rules of Court, if after all, the parties are given the discretion
or option of filing the action in their respective residences," and thereby
ordered the dismissal of the complaint.chanroblesvirtualawlibrary chanrobles
virtual law library

Hence, this appeal.chanroblesvirtualawlibrary chanrobles virtual law library

The rule on venue of personal actions cognizable by the courts of first

instance is found in Section 2 (b), Rule 4 of the Rules of Court, which
provides that such "actions may be commenced and tried where the
defendant or any of the defendants resides or may be found, or where the
plaintiff or any of the plaintiffs resides, at the election of the plaintiff." The
said section is qualified by the following provisions of Section 3 of the same
rule: chanrobles virtual law library

By written agreement of the parties the venue of an action may be changed

or transferred from one province to another.chanroblesvirtualawlibrary
chanrobles virtual law library

Defendant stands firm on his contention that because of the aforequoted

covenant contained in par. 14 of the contract, he cannot be sued in any
court except the Court of First Instance of Naga City. We are thus called
upon to rule on the issue as to whether the stipulation of the parties on
venue is restrictive in the sense that any litigation arising from the contract
can be filed only in the court of Naga City, or merely permissive in that the
parties may submit their disputes not only in Naga City but also in the court
where the defendant or the plaintiff resides, at the election of the plaintiff,
as provided for by Section 2 (b) Rule 4 of the Rules of
Court.chanroblesvirtualawlibrary chanrobles virtual law library

It is well settled that the word "may" is merely permissive and operates to
confer discretion upon a party. Under ordinary circumstances, the term "may
be" connotes possibility; it does not connote certainty. "May" is an auxillary
verb indicating liberty, opportunity, permission or possibility. 1

In Nicolas vs. Reparations Commission 2, a case involving the interpretation

of a stipulation as to venue along lines similar to the present one, it was held
that the agreement of the parties which provided that "all legal actions
arising out of this contract ... may be brought in and submitted to the
jurisdiction of the proper courts in the City of Manila," is not
mandatory.chanroblesvirtualawlibrary chanrobles virtual law library

We hold that the stipulation as to venue in the contract in question is simply

permissive. By the said stipulation, the parties did not agree to file their
suits solely and exclusively with the Court of First Instance of Naga. They
merely agreed to submit their disputes to the said court, without waiving
their right to seek recourse in the court specifically indicated in Section 2
(b), Rule 4 of the Rules of Court.chanroblesvirtualawlibrary chanrobles
virtual law library

Since the complaint has been filed in the Court of First Instance of
Pampanga, where the plaintiff resides, the venue of action is properly laid in
accordance with Section 2 (b), Rule 4 of the Rules of
Court.chanroblesvirtualawlibrary chanrobles virtual law library

WHEREFORE, the order appealed from is hereby set aside. Let the records
be returned to the court of origin for further proceedings. Costs against
defendant-appellee.chanroblesvirtualawlibrary chanrobles virtual law library

SO ORDERED.
 EN BANC

[G.R. No. L-63318. August 18, 1984.]

PHILIPPINE CONSUMERS FOUNDATION, INC., Petitioner, v.

NATIONAL TELECOMMUNICATIONS COMMISSION and PHILIPPINE
LONG DISTANCE TELEPHONE CO., Respondents.

Tomas C. Llamas, for Petitioners.

The Solicitor General for respondent NTC.

Eliseo Alampay, Jr., Graciano C. Regala and Augusto San Pedro for
Private Respondents.

RESOLUTION

MAKASIAR, J.:

On March 2, 1983, petitioner filed the instant petition praying, among

others, that the decision of respondent NTC dated November 22, 1982 and
the order dated January 14, 1983 be annulled and set aside on the grounds
therein stated (pp. 2-19, rec.).

After the petitioner, the private respondent, and the Solicitor General for
public respondent NTC filed their respective comments and memoranda (pp.
47-53, 96-106, 109-116, 127-142, 147-164, 206-221, rec.), on November
25, 1983, the decision sought to be reconsidered was promulgated,
annulling and setting aside the challenged decision and order, respectively
dated November 22, 1982 and January 14, 1983 (pp. 225-232, rec.).

Said decision is not unanimous as it bears the concurrence of only 9

members of this Court, while 3 members took no part and 1 member
reserved his vote (p. 232, rec.).

In a resolution dated January 10, 1984 and released on January 17, 1984,
the Court granted respondent PLDT’s motion for 15-day extension from the
expiration of the reglementary period within which to file a motion for
reconsideration (pp. 233, 236, rec.).

On January 12, 1984, PLDT filed its motion for reconsideration (pp. 237-268,
rec.).

On February 27, 1984, respondent PLDT filed a motion to admit attached

supplemental motion for reconsideration (pp. 281-301, rec.).

On February 27, 1984, public respondent NTC, thru the Solicitor General,
filed a manifestation and motion that it is joining co-respondent PLDT in its
motion for reconsideration thereby adopting the same as its own (pp. 302-
303, 305-306, rec.).
In a resolution dated March 1, 1984 and issued on March 2, 1984, the Court
admitted the supplemental motion for reconsideration of PLDT, noted the
manifestation and motion of the Solicitor General for and in behalf of
respondent NTC that it is joining the motion for reconsideration of PLDT and
adopting it as its own, and required petitioner to comment within 10 days
from notice on the aforesaid supplemental motion for reconsideration of
PLDT (p. 304-A, rec.).chanrobles lawlibrary : rednad

On March 28, 1984, petitioner filed its comment on respondent’s motion for
reconsideration (pp. 310-317, rec.).

In a resolution dated April 3, 1984 and issued on April 11, 1984, the Court
denied the motion for reconsideration (p. 318-A, rec.).

On April 6, 1984, respondent of PLDT filed a motion to strike out "discussion

(e)" in petitioner’s "comment on respondents’ motions" dated March 20,
1984 (pp. 319-321, rec.).

In a resolution dated April 12, 1984 and issued on April 16, 1984, the Court
required petitioner’s counsel Atty. Tomas Llamas to comment within 10 days
from notice on the aforesaid motion to strike out (p. 323, rec.).

On April 17, 1984, respondent PLDT, thru counsel, filed a motion for leave to
file within 15 days from date a second motion for reconsideration (pp. 324-
326, rec.).

On April 27, 1984, petitioner filed an opposition to the aforesaid motion of

PLDT for leave to file within 15 days to file a second motion for
reconsideration (pp. 328-330, rec.).
On May 2, 1984, private respondent PLDT filed a second motion for
reconsideration with an annex (pp. 332-344, rec.).

In a resolution dated May 8, 1984 but issued on May 11, 1984, the Court
granted the motion of PLDT to file a second motion for reconsideration within
15 days from April 16, 1984, noted the opposition of petitioner to said
motion, and required petitioner to comment within 15 days from notice on
the aforesaid second motion for reconsideration of PLDT for the
reconsideration of the decision of November 25, 1983 (p. 345, rec.).

On May 4, 1984, petitioner filed its comment on the second motion for
reconsideration of private respondent (pp. 346-350, rec.).

In a resolution dated May 10, 1984 and issued on May 16, 1984, the Court
required respondents to file a reply within 10 days from notice on the
aforesaid comment of petitioner on private respondent PLDT’s motion
praying that the discussion (par. 3) in petitioner’s comment on the first
motion for reconsideration and the supplemental motion for reconsideration
be deleted (p. 352, rec.).

On May 21, 1984, public respondent NTC filed a manifestation joining private
respondent PLDT and adopting the latter’s second motion for reconsideration
(pp. 353-354, rec.), which the Court granted in a resolution dated May 29,
1984 and issued on June 6, 1984 (p. 355-A).

On May 28, 1984, respondent PLDT filed a motion for extension of 10 days
or until June 7, 1984 within which to submit the required reply in the
resolution of May 10, 1984 and issued on May 16, 1984 (pp. 356-357, rec.),
which was granted in a resolution dated June 5, 1984 and issued on July 3,
1984 (p. 357-A, rec.).
On June 1, 1984, petitioner filed its comment on PLDT’s second motion for
reconsideration, with a motion to declare final the decision with respect to
public respondent NTC (pp. 358-362, rec.).

A day before June 1, 1984, or on May 31, 1984, private respondent PLDT
filed its reply to petitioner’s "comment on motion of private respondent"
dated May 4, 1984 [motion to strike] (pp. 366-369, rec.).

On July 16, 1984, after its motions for extension were granted, public
respondent NTU, thru the Solicitor General, finally filed its reply (pp. 370-
371, 372-A, 373, 375-381, rec.).chanrobles law library

It should be emphasized that the resolution of this Court dated April 3, 1984
but issued on April 11, 1984, denying the first motion for reconsideration,
did not state that the denial is final (see p. 318-A, rec.).

And the motion of May 29, 1984 but filed on June 1, 1984 of petitioner to
declare as final the decision of November 25, 1983 (which motion was
included in plaintiff’s comment on PLDT’s second motion for reconsideration)
with respect to public respondent NTC (pp. 361-362, rec.), was not acted
upon by this Court, ostensibly because as early as May 21, 1984, public
respondent NTC, thru the Solicitor General, filed a manifestation that it is
joining private respondent PLDT in its second motion for reconsideration
dated May 18, 1984 and adopting it as its own (pp. 353-354, rec.).

II

It is not disputed — and should be emphasized — that on August 31, 1982,

this Court set aside the NTC order dated April 14, 1982 in the case of
Samuel Bautista v. NTC, Et. Al. (16 SCRA 411) provisionally approving the
revised schedule of rates for the Subscriber Investments Plan, on the ground
that there was necessity of a hearing by the Commission before it could
have acted on the PLDT application for said revised schedule, to give
opportunity to the public, especially herein petitioner and the Solicitor
General, to substantiate their objections to the said schedule as excessive
and unreasonable, especially for the low-income and middle-income groups,
which cannot afford telephone connections and that there is no need to
increase the rate because PLDT is financially sound.

Thereafter, in NTC Case No. 82-87 entitled "Re Philippine Long Distance
Telephone Co.," respondent NTC conducted several hearings on PLDT’s
revised Subscriber Investments Plan schedule at which written oppositions
were filed by herein petitioner PCFI, the Solicitor General, Atty. Samuel
Bautista, Flora Alabanza, the municipality of Marikina, and the Integrated
Telecommunications Suppliers’ Association of the Philippines (ITESAP). Other
oppositors failed to file their written oppositions. The hearings on the merits
actually started on August 4, 1982 and continued for four (4) subsequent
dates.

The oppositors, thru counsel, thoroughly cross-examined the witness for the
applicant, Mr. Romeo Sisteban, applicant’s Vice- President for Budget and
Financial Planning.

None of the oppositors opted to present evidence but merely filed

Memoranda and thereafter manifested that the case is submitted for
decision. Because PLDT made some concessions in favor of the oppositors,
oppositors ITESAP, Eastern Telecommunications, Inc., Philippine Global
Communications, Inc. (Philcom) Globe-Mackay Cable and Radio Corporation
(GMCR) withdrew their opposition and manifested that they are no longer
opposing the application, after which respondent NTC issued the challenged
decision of November 22, 1982.
Respondent NTC rendered the challenged decision dated November 22,
1982, approving the revised schedule on the ground that the rates are
within the 50% of-cost limit provided in P.D. No. 217, that they are just and
reasonable and in consonance with the public policies declared in said
decree, and that such approval is in the public interest (see NTC decision of
Nov. 22, 1982, pp. 2-19, rec.).

It is undisputed therefore that petitioner and the other oppositors were

accorded due process.

From said decision dated November 22, 1982, petitioner filed the instant
petition.

III

The decision promulgated on November 25, 1983 interprets the rule-making

authority delegated in Section 2 of P.D. No. 217 to the then Department of
Public Works, Transportation and Communications as mandatory, which
construction is not supported by the actual phraseology of said Section 2,
which reads thus:jgc:chanrobles.com.ph

"The Department of Public Works, Transportation and Communications,

through its Board of Communications and/or appropriate agency shall see to
it that the herein declared policies for the telephone industry are
immediately implemented and for this purpose, pertinent rules and
regulations may be promulgated" (Emphasis supplied).

The basic canon of statutory interpretation is that the word used in the law
must be given its ordinary meaning, unless a contrary intent is manifest
from the law itself. Hence, the phrase "may be promulgated" should not be
construed to mean "shall" or "must." It shall be interpreted in its ordinary
sense as permissive or discretionary on the part of the delegate —
department or the Board of Communications then, now the National
Telecommunications Commission -whether or not to promulgate pertinent
rules and regulations. There is nothing in P.D. No. 217 which commands that
the phrase "may be promulgated" should be construed as "shall be
promulgated." The National Telecommunications Commission can function
and has functioned without additional rules, aside from the existing Public
Service Law, as amended, and the existing rules already issued by the Public
Service Commission, as well as the 1978 rules issued by the Board of
Communications, the immediate predecessor of respondent NTC. It should
be recalled that the PLDT petition for approval of its revised SIP schedule
was filed on March 20, 1980.

P.D. No. 217 does not make the rules and regulations to be promulgated by
the respondent NTC as essential to the exercise of its jurisdiction over
applications for SIP schedules. In Ang Tibay v. CIR (69 Phil. 635), this Court,
through Mr. Justice Jose P. Laurel, did not include the promulgation of rules
and regulations as among the seven (7) requirements of due process in
quasi-judicial proceedings before a quasi-judicial body such as the
respondent NTC.

What is patently mandatory on the ministry or National Telecommunications

Commission is the immediate implementation of the policies declared in P.D.
No. 217. To repeat, the ministry or the NTC "shall see to it that the herein
declared policies for the telephone industry are immediately implemented . .
." The formulation of rules and regulations is purely discretionary on the part
of the delegate.

Both words "shall" and "may be" are employed in the lone sentence of
Section 2 of P.D. No. 217. This graphically demonstrates that P.D. No. 217
preserves the distinction between their ordinary, usual or normal senses.
This is emphasized by the fact that under Section 3 of P.D. No. 217, only
"the pertinent provisions" of the Public Service Act, as amended, which are
in conflict with the provisions of P.D. No. 217, had been repealed or modified
by said P.D. No. 217.

Section 3 of P.D. No. 217 states:jgc:chanrobles.com.ph

"The pertinent provisions of the Public Service Act, as amended, the

franchise of the Philippine Long Distance Telephone Company under Act
3436, as amended, all existing legislative and/or municipal franchises and
other laws, executive orders, proclamations, rules regulations or parts
thereof, as are in conflict with the provisions of this Decree are hereby
repealed or modified accordingly."cralaw virtua1aw library

And under the Public Service Act, as amended (C.A. No. 146), the Board of
Communications then, now the NTC, can fix a provisional amount for the
subscriber’s investment to be effective immediately, without hearing (par. 3
of Sec. 16, C.A. 146, as amended).

Section 16 (c) of C.A. No. 146, as amended, provides:jgc:chanrobles.com.ph

"(c) To fix and determine individual or joint rates, toll, charges,

classifications, or schedules thereof, as well as communication, mileage,
kilometrage, and other special rates which shall be imposed, observed, and
followed thereafter by any public service: Provided, That the Commission
may, in its discretion approve rates proposed by public services provisionally
and without necessity of any hearing but it shall call a hearing thereon within
thirty days thereafter, upon publication and notice to the concerns operating
in the territory affected: Provided further, That in case the public service
equipment of an operator is used principally or secondary for the promotion
of a private business, the net profits of said private business shall be
considered in relation with the public service of such operator for the
purpose of firing the rates."cralaw virtua1aw library

The Rules of Practice and Procedures promulgated on January 25, 1978 by

the Board of Communications, the immediate predecessor of respondent
NTC, pursuant to Section 11 of the Public Service Act, otherwise known as
Commonwealth Act No. 146, as amended, govern the rules of practice and
procedure before the BOC then, now respondent NTC. Section 2 of said
Rules defines their scope, including exempting parties from the application of
the rules in the interest of justice and to best serve the public interest, and
the NTC may apply such suitable procedure to improve the service in the
transaction of public service. Thus, Section 2 of Rule 1 of said Rules
reads:jgc:chanrobles.com.ph

"Sec. 2. Scope. — These rules govern pleadings, practice and procedure

before the Board of Communications in all matters of hearing, investigation
and proceedings within the jurisdiction of the Board. However, in the
broader interest of justice and in order to best serve the public interest, the
Board may, in any particular matter, except it from these rules and apply
such suitable procedure to improve the service in the transaction of the
public business."cralaw virtua1aw library

Sections 4 and 5 of Rule 2 of said rules insure the appearance of the

Solicitor General and other consumers or users. The notice of hearing is
required to be published and to be served on the affected parties by Section
2 of Rule 8; while Section 1 of Rule 9 allows the filing of written oppositions
to the application. Under Section 3 of Rule 15, the BOC then, now the NTC,
may grant, on motion of the applicant or on its own initiative, provisional
relief based on the pleading, supporting affidavits and other documents
attached thereto, without prejudice to a final decision after completion of the
hearing which shall be called within thirty (30) days from the grant of the
provisional relief.
Finally, Section 1 of Rule 19 provides for the suppletory application of the
Rules of Court governing proceedings before the Court of First Instance
then, now the Regional Trial Courts, which are not inconsistent with the rules
of practice and procedure promulgated by the BOC on January 25, 1978.

There is nothing in P.D. No. 217 modifying, much less repealing Section 16
(c) of the Public Service Act, as amended.chanrobles virtual lawlibrary

It is true that P.D. No. 1874 promulgated on July 21, 1983 amending
Section 2 of P.D. No. 217 expressly authorizes the National
Telecommunications Commission (now the successor of the Board of
Communications) to approve "such amounts for subscriber investments as
applied for provisionally and without the necessity of a hearing; but shall call
a hearing thereon within thirty (30) days thereafter, upon publication and
notice to all parties affected." But such amendment merely reiterates or
confirms paragraph (c) of Section 16 of C.A. No. 146, as amended,
otherwise known as the Public Service Law, and serves merely to clarify the
seeming ambiguity of the repealing clause in Section 3 of P.D. No. 217 to
dissipate all doubts on such power of the National Telecommunications
Commission.

The construction of the majority decision of November 25, 1983 of the word
"may" to mean "shall" is too strained, if not tortured.

IV

WE cannot subscribe to the view that the National Telecommunications

Commission should or must promulgate "pertinent rules and regulations" ;
because the existing substantive and procedural laws as well as the rules
promulgated by the Public Service Commission under and pursuant to the
Public Service Law, otherwise known as CA No. 146, as amended, are more
than adequate to determine the reasonability of the amounts of investment
of telephone subscribers, the viability of the company and the other factors
that go into determining such amounts and such viability. The existing laws
and rules on rate-making are more than sufficient for a proper determination
of such amounts of investments of individual subscribers and the profitability
of the venture.

The adequacy of the existing Public Service Law, otherwise known as C.A.
No. 146, as amended, and rules had been demonstrated, because they have
been applied in the following cases involving PLDT:chanrob1es virtual 1aw
library

1. PLDT v. PSC, G.R. No. L-26762, Aug. 31, 1970, 34 SCRA 609;

2. Republic v. PLDT, G.R. No. L-18841, Jan. 27, 1969, 26 SCRA 620;

3. PLDT v. PSC, G.R. Nos. L-24198 & L-24207-10, Dec. 18, 1968, 26 SCRA
427;

4. Republic Telephone Co. v. PLDT, G.R. No. L-21070; PLDT v. Republic

Telephone Co., G.R. No. L-21075, both decided on Sept. 23; 1968, 25 SCRA
80;

5. PLDT v. Medina, G.R. No. L-24658, April 3, 1968, 23 SCRA 1; and

6. PLDT v. Medina, G.R. Nos. L-24340-44, July 18, 1967, 20 SCRA 659.

As heretofore stated, as early as January 25, 1978, other pertinent rules of

practice and procedure were promulgated by the then Board of
Communications, now the respondent National Telecommunications
Commission, implementing P.D. No. 217, in addition to the applicable
provisions of the Public Service Law, as amended, and the rules previously
issued by the Public Service Commission (Annex 2 to the Memo of
respondent PLDT filed on August 15, 1983, pp. 147-165, rec.).

Even before 1978, respondent applied the procedure prescribed by the

Public Service Law, as amended, and the rules previously issued by the
Public Service Commission, the NTC predecessor, in several cases involving
similar applications for SIP schedules of Filipino Telephone Corporation (BOC
Case No. 73-064; see BOC decision in said cases dated December 5, 1974,
May 11, 1978, March 15, 1977, Feb. 19, 1976 and Aug. 31, 1978 — Annexes
3, 4, 4-A, 5, pp. 166-195, rec.).

The majority opinion recognizes that for the last three years, the PLDT had
earned a yearly average net profit of over P100 million and the existing
subscribers have been receiving their corresponding quarterly dividends on
their investments.

It should be stressed that Section 5 of Article XIV of the 1973 Constitution,

as amended, expressly directs that "the State shall encourage equity
participation in public utilities by the general public." As above-stated, the
existing individual subscribers of PLDT had been sharing in the net profits of
the company every quarter after the promulgation of P.D. 217 on June 16,
1973.cralawnad

The amount that is provisionally approved under the subscriber’s investment

plan for PBX/PAEX trunks and for business telephones in Metro Manila and
the provinces, whether new installations or transfers, appears to be
reasonable, including those for the leased lines or outside local.
To lighten the burden of subscribers, investments may be paid in
installments or under some convenient arrangements which the NTC may
authorize, which is now expressly provided for in Section 1 of P.D. 1874
amending Sec. 6 of P.D. 217.

Section 1 of P.D. 1874 directs that:jgc:chanrobles.com.ph

"Section 1, paragraph 6 of the Presidential Decree No. 217 is hereby

amended to read as follows:jgc:chanrobles.com.ph

"‘6. In any subscriber self-financing plan, the amount of subscriber self-

financing will, in no case, exceed fifty per centum (50%) of the amount
which results from dividing the telephone utility’s gross investment in
telephone plant in service by its number of primary stations in service, both
as reported in the utility’s latest audited annual report rendered to the
National Telecommunications Commission; PROVIDED, however, that the
amount payable by the telephone subscriber may be paid on installment or
under such payment arrangement as the National Telecommunications
Commission may authorize."cralaw virtua1aw library

It should be likewise emphasized that pursuant to the mandate of Section 5,

Article XIV of the 1973 Constitution, as amended, the law-making authority,
in issuing both P.D. Nos 217 and 1874, established the all-important policy
of making available on regular and uninterrupted basis the telephone service
because it is.

"a crucial element in the conduct of business activity, . . . and is essential for
the smooth and efficient function of industry;
". . . efficient telephone service contributes directly to national development
by facilitating trade and commerce;

". . . the telephone industry is one of the most highly capital intensive
industries;

". . . the telephone industry has fundamentally different financing

characteristics from other utilities in that capital requirements per telephone
unit installed increase as the number of customers serviced also increases
instead of decreasing in cost per unit as in power and water utilities;

". . . continued reliance on the traditional sources of capital funds through

foreign and domestic borrowing and through public ownership of common
capital stock will result in a high cost of capital, heavy cash requirements for
amortization and thus eventually in higher effective cost of telephone service
to subscribers;

". . . the subscribers to telephone service tend to be among the residents of

urban areas and among the relatively higher income segment of the
population;

". . . it is in the interest of the national economy to encourage savings and to

place these savings in productive enterprises; and

". . . it is the announced policies of the government to encourage the

spreading out of ownership in public utilities" (see Whereases of P.D. 217;
Emphasis supplied).
P.D. No. 217 further states as the basic policies of the State concerning the
telephone industry "in the interest of social, economic and general well-
being of the people . . . —

"1. The attainment of efficient telephone service for as wide an area as

possible at the lowest reasonable cost to the subscriber;

"2. The expansion of telephone service shall be financed through an optimal

combination of domestic and foreign sources of financing and an optimal
combination of debt and equity funds so as to minimize the aggregate cost
of capital of telephone utilities;

"3. Consistent with the declared policy of the State to attain widespread
ownership of public utilities obtained from ownership funds shall be raised
from a broad base of investors, involving as large a number of individual
investors as may be possible;

"4. In line with the objective of spreading ownership among a wide base of
the people, the concept of telephone subscriber self-financing is hereby
adopted whereby a telephone subscriber finances part of the capital
investments in telephone installations through the purchase of stocks,
whether common or preferred stock, of the telephone company;

"5. As part of any subscriber self-financing plan, when the issuance of

preferred stock is contemplated, it is required that the subscriber be
assured, in all cases of a fixed annual income from his investment and that
these preferred capital stocks be convertible into common shares, after a
reasonable period and under reasonable terms, at the option of the
preferred stockholder; and
"6. In any subscriber self-financing plan, the amount of subscriber self-
financing will, in no case, exceed fifty per centum (50%) of the cost of the
installed telephone line, as may be determined from time to time by the
regulatory bodies of the State."cralaw virtua1aw library

The same policies and objectives are substantially re-stated and capsulized
in the three Whereases of P.D. No. 1874 amending P.D. No. 217 as pointed
out in the basic policies aforestated in P.D. No. 217 that the cost per
telephone unit increases in proportion to the increase in the number of
customers served; and that foreign borrowing will impose heavy cash
requirements for amortizations of such foreign loans which would result in
the higher effective costs of telephone service to subscribers and ultimately
would be a heavy drain on our dollar reserves, which will result in our
inability to meet our other foreign commitments and mark the image of the
Republic of the Philippines in international trade relations. Thus, P.D. No.
217 stresses that in the interest of the national economy it is essential to
encourage savings and to place these savings (subscriber’s investments) in
productive enterprises.

PLDT is profitable for the subscribers-investors as shown by its net profit and
the dividends received quarterly by the existing subscribers.

There is no showing — not even an allegation — that the net profits realized
by PLDT all these years have been dissipated and not plowed back into the
firm to improve its service.

But the rising cost of materials and labor needed to improve the PLDT
service, aggravated by the devaluation of our currency, all the more justify
the revised SIP schedule approved by the respondent NTC.

The approved revised SIP schedule, which appears reasonable and fair is
herein reproduced:jgc:chanrobles.com.ph
"REVISED SIP SCHEDULE

Revised SIP Rates

"Service Category Metro Manila Provincial

"I. New Installations —

"1. PBX/PABX Trunk P5,000 P3,000

2. Business Phone:chanrob1es virtual 1aw library

Single line 3,500 2,000

Party line 2,000 1,500

3. Residential Phone:chanrob1es virtual 1aw library

Single line 1,800 1,300

Party line 900 800

4. Leased line 2,500 2,500

5. Tie trunk or tie line 2,500 2,500

6. Outside local 2,500 2,500

"II. Transfers —

"1. PBX/PABX 1,500 1,200

2. Business Phone:chanrob1es virtual 1aw library

Single line 800 600

Party line 600 500

3. Residential Phone:chanrob1es virtual 1aw library

Single line 600 500

Party line 500 300

4. Leased line 800 800

5. Tie trunk or tie line 800 800

6. Outside local 800 800"

(pp. 34-35, rec.).

With the dividends that will be received quarterly under the revised SIP
schedule the subscribers (whether of phone installations for business with or
without trunk lines, as well as transfers of the same; or of residential phones
whether single or party line as well as transfers of the same), will recover
their investments after some years and will thereafter remain stockholders
and part-owners of PLDT. All the subscribers therefore, are assured not only
of profits from, but also preservation of, their investments, which are not
donation to PLDT.

There are always two sides — sometimes more — to a case or proposition or

issue. There are many cases decided by this Court where this Court had
reconsidered. Its decisions and even reversed Itself, conformably to the
environmental facts and the applicable law.

After a re-study of the facts and the law, illuminated by mutual exchange of
views, the members of the Court may and do change their minds.

To repeat, the decision of November 25, 1983 was not a unanimous decision
for it has the concurrence of only nine (9) members of the Court, because
three (3) took no part and one (1) reserved his vote (p 232, rec.).

WHEREFORE, THE DECISION OF NOVEMBER 25, 1983 SHOULD BE AS IT IS

HEREBY RECONSIDERED AND SET ASIDE AND THE PETITION IS HEREBY
DISMISSED. NO COSTS.chanrobles virtualawlibrary
chanrobles.com:chanrobles.com.ph

SO ORDERED.

Concepcion, Jr., Guerrero, Escolin, De la Fuente and Cuevas, JJ., concur.

Fernando, C.J., took no part.

Aquino and Plana, JJ., concurs in the result.

Separate Opinions

TEEHANKEE, J., dissenting:chanrob1es virtual 1aw library

I join the dissents of Justices Abad Santos and Relova. I only wish to add
that there has been a departure here from the Court’s usual practice and
rules (cf. Rule 52, sec. 2; Rule 51, sec. 1; and Rule 56, secs. 1 and 11) of
setting the case for rehearing and hearing the parties in oral argument when
a new majority (because of a change of votes or new members or for
whatever reason) is inclined to reconsider and overturn the original
majority; more so, on a second motion for reconsideration, the first motion
for reconsideration having been denied without a dissenting vote and the
parties not having been previously heard in oral argument.

GUTIERREZ, JR., J., concurring:chanrob1es virtual 1aw library

My concurrence in Mr. Justice Makasiar’s ponencia is not without certain

misgivings. I agree with the Court’s views on the powers of the National
Telecommunications Commission, the applicability of existing rules and
regulations, and the policy declarations in P.D. Nos. 217 and 1874. However,
while now convinced that the increase in mandatory investments for
subscribers is based on law and that there is no showing of arbitrariness in
the law’s implementation, I must confess that I see no justification for the
continued inefficient services rendered by the respondent telephone
company. When the Court was deliberating on the motion for
reconsideration, my own residential telephone was out of order. And I
believe that our experiences in our neighborhood do not represent isolated
cases. I have yet to hear from or about satisfied PLDT customers.chanrobles
virtualawlibrary chanrobles.com:chanrobles.com.ph

My point is — increased rates and increases in the "subscribers’ self-

financing plan" must be matched by equivalent and demonstrably improved
telephone service. More than its duty to increase rates and subscribers’ fees
whenever warranted, the respondent Commission has the statutory and
greater obligation to supervise "the attainment of efficient telephone service
for as wide an area as possible at the lowest reasonable cost to the
subscribers."cralaw virtua1aw library

I am aware that almost all major components of our telephone system must
be imported from foreign sources. Since the Philippine peso is now worth
one American nickel, the cost of services based on imported materials must
increase. Loans contracted when the foreign exchange rate was not so
disadvantageous now require double or treble amortizations in depreciated
pesos. The Court cannot assume the role of King Canute. Only the financial
experts in the political departments can return the peso to a respectable
value. Moreover, it is indeed to the nation’s advantage to look for local
capital sources instead of resorting to more foreign borrowings.

I must stress, however, that consumers would not mind paying reasonable
increases if they get satisfactory services. The respondent telephone
company has yet to solve this elementary and glaringly obvious problem.
Pinpointing the cause and applying the solution should be the company’s
number one concern.chanrobles virtual lawlibrary

ABAD SANTOS, J., dissenting:chanrob1es virtual 1aw library

I vote to deny the second Motion for Reconsideration. I am amazed that the
decision which was promulgated as recently as November 25, 1983, with no
dissenting opinion to dilute its acceptability should now be reconsidered. My
amazement is heightened by the fact that when the case was discussed on
July 26, 1984, I had the impression that the motion was doomed so that a
request to defer action on it would have met the same fate had not the
request been put on a pag-bigyan basis.

The case involves a simple problem of statutory construction — that of

Section 2 of Presidential Decree No. 217. It reads as
follows:jgc:chanrobles.com.ph

"The Department of Public Works, Transportation and Communications,

through its Board of Communications and/or appropriate agency shall see to
it that the herein declared policies for the telephone industry are
immediately implemented and for this purpose, pertinent rules and
regulations may be promulgated."cralaw virtua1aw library

The issue is whether or not the National Telecommunications (NTC) must

first promulgate the rules and regulations mentioned in the decree before it
can approve the Subscriber Investment Plan (SIP) of private respondent
Philippine Long Distance Telephone Co. (PLDT).

The decision, without any dissenting opinion, sustained the petitioner’s

contention that it is the duty of NTC to first promulgate rules and
regulations.

The resolution, which is not unanimous, does not subscribe to the view that
the NTC should or must promulgate rules and regulations because, it is said,
the decree must be given its ordinary meaning; the word used is the
permissive "may" and not the mandatory "shall." The non-unanimous
resolution thus relies on the canons index animi sermo est (speech is the
indication of intent) and a verba legis non est recedendum (from the words
of the statute there should be no departure).chanrobles virtual lawlibrary
Any lawyer of modest sophistication knows that canons of statutory
construction march in pairs of opposite. Thus with the canons above
mentioned we have the following opposite: verba intentioni, non e contra,
debent inservire (words ought to be more subservient to the intent and not
the intent to the words). Sutherland explains the limits of literalism
thus:jgc:chanrobles.com.ph

"The literal interpretation of the words of an act should not prevail if it

creates a result contrary to the apparent intention of the legislature and if
the words are sufficiently flexible to admit of a construction which will
effectuate the legislative intention. The intention prevails over the letter, and
the letter must if possible be read so as to conform to the spirit of the
act.’While the intention of the legislature must be ascertained from the
words used to express it, the manifest reason and obvious purpose of the
law should not be sacrificed to a literal interpretation of such words.’ Thus
words or clauses may be enlarged or restricted to harmonize with other
provisions of an act. The particular inquiry is not what is the abstract force of
the words or what they may comprehend, but in what sense were they
intended to be understood or what understanding do they convey as used in
the particular act," (Vol. 2A Statutory Construction, pp. 65-66 [1972].)

It is an elementary rule in statutory construction that the word "may" in a

statute is permissive while the word "shall" is mandatory. The rule, however,
is not absolute. Thus Professor Luis J. Gonzaga
states:jgc:chanrobles.com.ph

"According to Black, ‘Where the statute provides for the doing of some act
which is required by justice or public duty, or where it in- vests a public
body, municipality or officer with power and authority to take some action
which concerns the public interest or rights of individuals, the permissive
language will be construed as mandatory and the execution of the power
may be insisted upon as a duty.’ Thus, where the statute provided that ‘the
commissioners may take into consideration the enhanced value to the
remaining land of an owner whose land was taken for highway purposes,’ it
was held that the word ‘may’ should be given a mandatory meaning and is
the same as the word ‘shall’, since it directs the doing of a thing for the sake
of justice or the public good. Similarly, a statute by which municipal
corporations are ‘authorized and empowered’ to provide for the support of
indigent persons within their limits or to make public improvements as to
open and repair streets, remove obstructions from highways, construct
sewers and the like, are to be construed as mandatory although they only
purport to grant permission or authority since the public has an interest in
such matters and the grant of authority is therefore equivalent to the
imposition of duty." (Statutes and their Construction, pp. 98-99
[1969].)chanrobles virtual lawlibrary

In the case at bar compelling reasons dictate that the provision of the decree
should be construed as mandatory rather than merely directory. They are
stated in the unanimous decision as follows:jgc:chanrobles.com.ph

"1. P.D. 217 deals with matters so alien, innovative and untested such that
existing substantive and procedural laws would not be applicable. Thus, the
Subscriber Investment Plan (SIP) was so set up precisely to ensure the
financial viability of public telecommunications companies which in turn
assures the enjoyment of the population at minimum cost the benefits of a
telephone facility.

"The SIP has never been contemplated prior to P.D. 217.

"The existing law on the other hand, the Public Service Act, diametrically
runs counter to the spirit and intention, if not the purpose of P.D. 217. It
may even be gainsaid that as long as the optimum number of individuals
may enjoy telephone service, there is no limitation on the profitability of
such companies. Hence, while P.D. 217 encourages the profitability of public
telecommunication companies, the Public Service Act limits the same.
"2. In the absence of such rules and regulations, there is outright
commission among the rights of PLDT, the consumers and the government
itself. As may clearly be seen, how can the Decision be said to have assured
that most of the population will enjoy telephone facilities? Did the Decision
likewise assure the financial viability of PLDT? Was the government’s duty to
provide telephone service to its constituents subserved by the Decision?
These questions can never be answered unless such rules and regulations
are set up.

"3. Finally, it should be emphasized that NTC is estopped from claiming that
there is no need to promulgate such rules and regulations. In the case of
PCFI v. NTC, G.R. No. 61892, now pending resolution before this Honorable
Tribunal, NTC totally refused to act on a petition filed by PLDT precisely for
the promulgation of such rules and regulations.

"Why then did NTC refuse to act on such petition if and when there is no
need for the promulgation of such rules and regulations? After all, NTC could
have simply ruled that the petition in G.R. No. 61892 is unnecessary
because such rules and regulations are also unnecessary. (pp. 135-136,
Rollo)"

The above reasons also rebut the contention in the non-unanimous

resolution that the existing substantive and procedural laws as well as the
rules promulgated by the Public Service Commission are more than
adequate to determine the reasonableness of the amounts of investment of
telephone subscribers, etc.

The PLDT’s SIP is an unreasonable imposition by a utility company on a

captive public. The injury is compounded by the fact that although the
company makes mega profits its service, to use a McEnroe expression, is the
pits.cralawnad
Teehankee, J., dissents.

Melencio-Herrera, J., concurs.

RELOVA, J., dissenting:chanrob1es virtual 1aw library

For the reasons stated in my ponencia of November 25, 1983, I vote to

DENY the second motion for reconsideration, dated May 2, 1984, filed by
private respondent Philippine Long Distance Telephone Company, through
counsel. The argument advanced in the motion that Presidential Decree No.
217 was amended by Presidential Decree No. 1874 which was issued on July
21, 1983, is without merit. Section 4 of said PD 1874 specifically provides
that "all decisions or orders of the National Telecommunications Commission
heretofore issued approving subscribers investment plans or revisions
thereof, are hereby declared valid and legal in all respects, excepting such
decisions or orders as, on the date of this decree, are pending review by the
Supreme Court." The case at bar was filed with this Court on March 3, 1983
or before the issuance of Presidential Decree No. 1874.

Besides, Section 1 of Presidential Decree No. 217 which was promulgated on

June 16, 1973 declares that "in the interest of the social, economic and
general well being of the people, the State hereby adopts the following basic
policies of the telephone industry:chanrob1es virtual 1aw library

1. The attainment of efficient telephone service for as wide an area as

possible at the lowest reasonable cost to the subscriber."cralaw virtua1aw
library

x x x
Teehankee, J., dissents.

Melencio-Herrera, J., concurs.

 SECOND DIVISION

G.R. No. 103379 November 23, 1993

SAN CARLOS MILLING, CO., INCORPORATED, Petitioner, vs.

COMMISSIONER OF INTERNAL REVENUE and COURT OF APPEALS,
Respondents.

Valdes, Valdes & Associates for petitioner.chanrobles virtual law library

The Solicitor General for respondent Commissioner of Internal Revenue.

PADILLA, J.:

Assailed in this petition for review on certiorari is the decision * of the Court
of Appeals in CA-G.R. Sp. No. 22346, dated 23 December 1991, the
dispositive part of which reads:

WHEREFORE, in view of the foregoing consideration, the petition is hereby

DISMISSED, without pronouncement as to costs. 1chanrobles virtual law
library

The undisputed facts, as succinctly stated by the Court of Tax Appeals and
adopted by the Court of Appeals in its decision under review, are as follows:

Petitioner domestic corporation had for the taxable year 1982 a total income
tax overpayment of P781,393.00 reflected as creditable income tax in its
annual final adjustment return. The application of the amount for the 1983
tax liabilities remained unutilized in view of petitioner's net loss for the year
and still yet had a credible income tax of P4,470.00 representing the 3% of
15% withholding tax on storage credits. Accordingly the final adjustment
income tax return for the taxable year 1983 reflected the amount of
P781,393.00 carried over as tax credit and P4,470.00 creditable income
tax.chanroblesvirtualawlibrarychanrobles virtual law library

In a May 17, 1984 letter to the respondent, petitioner signified its intention
to apply the total creditable amount of P785,863.00 against its 1984 tax
dues consistent with the provision of Section 86, ibid, coupled with a
comforting alternative request for a refund or tax credit of the
same.chanroblesvirtualawlibrarychanrobles virtual law library

Respondent disallowed the proffered automatic credit scheme but treated

the request as an ordinary claim for refund/tax credit under Section 292 in
relation to Section 295 of the Tax Code and accordingly subjected the same
for verification/investigation.chanroblesvirtualawlibrarychanrobles virtual law
library

No sooner than the respondent could act on the claim, petitioner filed a
petition for review on July 18, 1984. And before this Court could formally
hear the case, petitioner filed a supplemental petition on March 11, 1986,
after having unilaterally effected a set-off of its credible income tax vis a vis
income tax liabilities, earlier denied by the respondent. 2chanrobles virtual
law library

On 28 February 1990, the Court of Tax Appeals dismissed the petition and
held that prior investigation by and authority from the Commissioner of
Internal Revenue were necessary before a taxpayer could avail of the
provisions of Section 86 (now Section 69) of the Tax Code. 3 A motion for
reconsideration was then filed but was denied in a resolution dated 25 June
1990 without prejudice, however, to any administrative claim for tax refund
or tax credit.chanroblesvirtualawlibrarychanrobles virtual law library
Thereafter, petitioner appealed the adverse decision of the Court of Tax
Appeals to the Court of Appeals. On 23 December 1991, respondent Court
dismissed the appeal.chanroblesvirtualawlibrarychanrobles virtual law library

Hence, this recourse.chanroblesvirtualawlibrarychanrobles virtual law library

The main issue to be resolved in the petition at bench is whether or not prior
authority from the Commissioner of Internal Revenue is necessary before a
corporate taxpayer can credit excess estimated quarterly income taxes paid
against the estimated quarterly income tax liabilities for the succeeding
taxable year, under Section 86 (now Section 69) of the Tax
Code.chanroblesvirtualawlibrarychanrobles virtual law library

It is the contention of the petitioner, among others, that in the aforecited

provision of the Tax Code, nowhere is it stated that the "imprimatur" or
approval of the Commissioner of Internal Revenue must be secured prior to
crediting a refundable tax amount. Petitioner further posits that neither does
Revenue Regulation No. 10-77 implementing the Tax Code provision require
prior approval of the Commissioner of Internal Revenue to avail of the
automatic tax credit scheme.chanroblesvirtualawlibrarychanrobles virtual law
library

After a careful study of the records of the present petition, we find the
petition to be devoid of merit.chanroblesvirtualawlibrarychanrobles virtual
law library

We begin with the subject Tax Code provision under scrutiny, thus:

Sec. 86. Final Adjustment Return. - Every corporation liable to tax under
Section 24 shall file a final adjustment return covering the total net income
for the preceding calendar or fiscal year. If the sum of the quarterly tax
payments made during the said taxable year is not equal to the total tax due
on the entire taxable net income of that year the corporation shall
either:chanrobles virtual law library

(a) Pay the excess tax still due; orchanrobles virtual law library

(b) Be refunded the excess amount paid, as the case may

be.chanroblesvirtualawlibrarychanrobles virtual law library

In case the corporation is entitled to refund of the excess estimated

quarterly income tax paid, the refundable amount shown on its final
adjustment return may be credited against the estimated quarterly income
tax liabilities for the taxable quarters of the succeeding taxable year.
(Emphasis supplied)

On 7 October 1977, the Commissioner of Internal Revenue issued the

implementing rules and regulations pertaining to the subject provision. The
procedure laid out in said rules is found in Revenue Regulation No. 10-77,
section 7 thereof, which reads:

Sec. 7. Any excess of the total quarterly payments over the actual income
tax computed and shown in the adjustment or final corporate income tax
return shall either (a) be refunded to the corporation, or (b) may be credited
against the estimated quarterly income tax liabilities for the quarters of the
succeeding taxable year. The corporation must signify in its annual corporate
adjustment return its intention whether to request for the refund of the
overpaid income tax or claim for automatic tax credit to be applied against
its income tax liabilities for the quarters of the succeeding taxable year, by
filling up the appropriate box on the corporate tax return, BIR Form No.
1702.
The case of Commissioner of Internal Revenue vs. ESSO Standard Eastern,
Inc., et al., 4cited by petitioner, while not squarely in point, has touched on
a significant aspect directly related to the issue at hand. There it was said:

The Commissioner's position is that income taxes are determined and paid
on an annual basis, and that such determination and payment of annual
taxes are separate and independent transactions; and that a tax credit could
not be so considered until it has been finally approved and the taxpayer duly
notified thereof . . . . (Emphasis supplied)

In other words, far from bolstering its position, petitioner's citation of the
above case only serves to weaken the same. What petitioner obviously seeks
is judicial sanction of its act of unilaterally declaring as tax credit its excess
estimated quarterly income taxes paid in a given year against its tax
liabilities for the quarters of the succeeding taxable year. If petitioner's
theory were to be sustained, this could wreak havoc and confusion in the tax
system.chanroblesvirtualawlibrarychanrobles virtual law library

The respondent Court held that the choice of a corporate taxpayer for an
automatic tax credit does not ipso facto confer on it the right to immediately
avail of the same. Respondent court went on to emphasize the need for an
investigation to ascertain the correctness of the corporate returns and the
amount sought to be credited. We
agree.chanroblesvirtualawlibrarychanrobles virtual law library

It is difficult to see by what process of ratiocination petitioner insists on the

literal interpretation of the word "automatic." Such literal interpretation has
been discussed and precluded by the respondent court in its decision of 23
December 1991 where, as aforestated, it ruled that "once a taxpayer opts
for either a refund or the automatic tax credit scheme, and signified his
option in accordance with the regulation, this does not ipso facto confer on
him the right to avail of the same immediately. An investigation, as a matter
of procedure, is necessary to enable the Commissioner to determine the
correctness of the petitioner's returns, and the tax amount to be credited.
5chanrobles virtual law library

Prior approval by the Commissioner of Internal Revenue of the tax credit

under then section 86 (now section 69) of the Tax Code would appear to be
the most reasonable interpretation to be given to said section. An
opportunity must be given the internal revenue branch of the government to
investigate and confirm the veracity of the claims of the taxpayer. The
absolute freedom that petitioner seeks to automatically credit tax payments
against tax liabilities for a succeeding taxable year, can easily give rise to
confusion and abuse, depriving the government of authority and control over
the manner by which the taxpayers credit and offset their tax liabilities, not
to mention the resultant loss of revenue to the government under such a
scheme.chanroblesvirtualawlibrarychanrobles virtual law library

Petitioner points out that the automatic tax credit scheme under the law
refers to the amount "shown" in the final adjustment return of the corporate
taxpayer and not as determined by the Commissioner, thereby recognizing
the computation made by the taxpayer. This contention is not impressed
with merit. To reiterate, Section 7 of Revenue Regulation No. 10-77 provides
that "(a)ny excess . . . computed and shown . . . shall either (a) be refunded
to the corporation, or (b) may be credited against the estimated quarterly
income tax liabilities. . . ."chanrobles virtual law library

The above rule is clear. It does not mean that reference to the amount
"shown" in the final adjustment return prepared by the taxpayer implies that
the taxpayer need not seek approval of the Commissioner prior to its
effective availment of the tax credit scheme, it simply cannot credit an
amount it deems as correct. Rather, it provides two (2) remedies, that is,
the excess may either be refunded or credited, and insofar as the option of
tax credit is concerned, this right should not be construed as an absolute
right which is available to the taxpayer at his sole option. It is our view that
tax credit under the cited provision should be construed as an alternative
remedy (to a refund) subject to the fulfillment of certain requirements, i.e.,
prior verification and approval by the Commissioner of Internal
Revenue.chanroblesvirtualawlibrarychanrobles virtual law library

Further, the cited legal provision itself employs the word "may" in the phrase
"may be credited", implying that the availability of the remedy of tax credit
is not absolute and mandatory; it does not confer an absolute right on the
taxpayer to avail of the tax credit scheme if it so chooses; neither does it
impose a duty on the part of the government to sit back and allow an
important facet of tax collection to be at the sole control and discretion of
the taxpayer.chanroblesvirtualawlibrarychanrobles virtual law library

As aptly held by this Court in In re Guarina: 6

Whether the word "may" in the statute is to be construed as mandatory and

imposing a duty, or merely permissive and conferring discretion, is to be
determined in each case from the apparent intention of the statute as
gathered from the context, as well as from the language of the particular
provision. The question in each case is whether, taken as a whole and
viewed in the light of surrounding circumstances, it can be said that a
purpose existed on the part of the legislator to enact a law mandatory in
character. If it can, then it should be given a mandatory effect; if not, then it
should be given its ordinary permissive effect. . . .

Anent the issue on petitioner's entitlement to a refund/credit under Sections

292 and 295 (now Sections 230 and 204 of the Tax Code) - since automatic
tax credit without prior approval of the Commission of Internal Revenue
under then Section 86 would not be available to the taxpayer - it must be
stressed that the remedy of a refund/credit has never been denied the
petitioner. On the contrary, the Commissioner of Internal Revenue has long
informed petitioner that its request for automatic tax credit has been treated
as an ordinary claim for refund/tax credit under Section 292 in relation to
Section 295 of the Tax Code, and that the same has been referred for
investigation, report and recommendation to the Chief, Agriculture and
Natural Resources Division of the Bureau of Internal Revenue. All that
petitioner had to do, therefore, is to inquire regarding the status of its claim
for refund/credit and await the decision in regard
thereto.chanroblesvirtualawlibrarychanrobles virtual law library

WHEREFORE, the petition is hereby DENIED. The decision of the Court of

Appeals appealed from is AFFIRMED with costs against the
petitioner.chanroblesvirtualawlibrarychanrobles virtual law library

SO ORDERED.
 EN BANC

G.R. No. L-24583 October 29, 1966

MAGDALENA SIBULO VDA. DE MESA, widow of the late Francisco de

Mesa, JUAN GILBUENA, DR. PEDRO MOLERA, DEMETRIO PRESNEDI
and LUCIO VICTA, as Officers and in representation of the Local
Chapter of the Liberal Party in Muntinlupa, Rizal, and DEMETRIO R.
LORESCA, petitioners,

vs.

HON. EULOGIO MENCIAS and/or Judge of the Court of First Instance

of Rizal, MAXIMINO A. ARGANA, the CHIEF OF POLICE, and the
MUNICIPAL TREASURER, both of Muntinlupa, Rizal, respondents.

Jovito R. Salonga and Neptali A. Gonzales for petitioners.

Jose W. Diokno for respondents.

CASTRO, J.:

In this petition for certiorari with preliminary injunction, the petitioners ask
this Court to review a three-to-two decision rendered by a special division of
the Court of Appeals on March 26, 1965 in C.A. 35019-R, sustaining the
validity of the proceedings had and taken by the Court of First Instance of
Rizal in election case 7924 before it (Maximino A. Argana, protestant vs.
Francisco De Mesa, protestee). The issue of nullity of the judgment
promulgated in the said election case was elevated to the Court of Appeals
on a petition for certiorari and mandamus, upon the contention that the said
court of first instance illegally and incorrectly did not allow the substitution
of the present petitioners as parties for De Mesa, after the latter's death,
and thereafter denied due course to their appeal from the said judgment.
The antecedent facts are not complicated.

Opponents for the mayoralty of Muntinlupa, Rizal in the 1963 elections were
Francisco De Mesa and Maximino A. Argana. The electorate's choice, as
tallied by the local board of canvassers, was De Mesa. Elected vice-mayor
with him was Demetrio R. Loresca. Duly, proclaimed elected, these two
qualified and assumed their respective positions upon the commencement of
their term of office.

Meanwhile and in due season, defeated candidate Argana, charging the

perpetration of frauds, terrorism and other irregularities in certain precincts,
protested the election of De Mesa, which protest was docketed as election
case 7924, supra, in the Court of First Instance of Rizal, the Honorable
Eulogio Mencias presiding. In his return to the protest, De Mesa traversed
the charges, and, in a counter-protest incorporated therein, sought to shift
responsibility for irregularities to the protestant and his followers, impugning
in view thereof the results in some thirteen precincts.

On March 18, 1964, however, an assassin's bullet felled De Mesa, and,

forthwith, vice-mayor Loresca was, by operation of law, duly installed as his
successor. Notice of De Mesa's demise was given on April 22, 1964 to the
court a quo thru a "Constancia" filed by the decedent's counsel of record, in
which they also indicated their belief that, by reason of said death, their
authority as such counsel was terminated.

In the election case, meanwhile, the protestant Argana moved for the
constitution of committees on revision of ballots. Expressly to hear
protestee's view thereon and to afford him a chance to propose his
commissioners, this motion was set for hearing but, quite understandably,
no appearance was entered for the deceased protestee. Accordingly, on May
6, 1964, the court a quo required the protestee's widow and children to
appear within fifteen days from notice in order to be substituted for said
protestee, if they so desired. They did not, however, comply. Taking no
further action in the premises, the trial court left the matter at that.

Then proceeding ex parte, on June 11, 1964, the protestant Argana

reiterated his move for the appointment of commissioners on revision of
ballots, but this time without proposing any provision for representation for
the protestee whose widow and children he sought to be declared "non-
suited." On June 23, 1964, without notice to the protestee and/or his legal
representative — as indeed none had thus far been named — the trial court
granted the motion aforesaid.

With the constitution of the committee on revision of ballots in which,

incidentally, Ramon Antilon Jr. was motu proprio named and then served as
commissioner for the deceased protestee, the completion of the proceedings
on revision, and the submission of the report thereon, the trial court, in its
decision of August 10, 1964, adjudged the protestant Maximino A. Argana as
the duly elected mayor of Muntinlupa, Rizal in the 1963 elections, and taxed
the costs and expenses of the protest against the estate of the deceased
protestee Francisco De Mesa.

On August 17, 1964, within the reglementary period for the finality of the
decision aforesaid, a three-pronged move was taken by De Mesa's widow,
Magdalena Sibulo Vda. de De Mesa, and the local chapter of the Liberal Party
of which the deceased protestee was a member, thru its president and
secretary. First, they sought leave to represent the deceased protestee,
invoking specifically said protestee's interest to keep his political opponent
out of the contested office in order to maintain his successor therein, which
interest was not abated by his death; second, they moved for the
reconsideration of the August 10, 1964 decision and/or for new trial based,
inter alia, upon the ground that, for failure to order the protestant to procure
the appointment of a legal representative of the deceased protestee after his
widow and children had failed to appear, pursuant to the applicable
provisions of the Rules of Court, it was legally improper for the trial court to
have proceeded ex parte with the election case; and third, they filed a
"Cautionary Notice of Appeal" in anticipation of the possible denial of their
said motion for reconsideration and new trial.

Pleading lack of personality both of De Mesa's widow and the local Liberal
Party Chapter to intervene in the case, as well as the absence of any ground
for a new trial, the protestant opposed the foregoing moves. To the
opposition, the movant below filed their reply.

On September 25, 1964 the court a quo, subscribing to the position taken by
the protestant, denied the movants' petition for leave to represent the
deceased protestee, and order stricken from the record their motion for
reconsideration and new trial and their cautionary notice of appeal.

On October 6, 1964 Argana qualified as mayor and assumed office.

Forthwith, on October 7, 1964 the movants aforesaid gave notice of their

intention to take the matter on appeal to the Court of Appeals. This was met
with the protestant's motion to strike out their notice of appeal, grounded on
the trial court's finding of movants' want of personality to appear in the
case, and consequently to appeal the decision a quo.

In the meantime, Demetrio R. Loresca made common cause with De Mesa's

widow and the local Liberal Party Chapter, and moved for leave to be added
to and/or substituted as party-protestee, claiming a legal and continuing
interest in the outcome of the election protest as successor to De Mesa.

On November 10, 1964 the trial court dictated twin order (1) granting the
protestant's motion to strike out the notice of appeal heretofore adverted to;
and (2) denying Loresca's motion to be substituted a party-protestee.
This development sent the herein petitioners to the Court of Appeals on a
petition for certiorari and mandamus, with preliminary injunction (CA 35019-
R), to nullify for lack of jurisdiction the proceedings taken by the trial court
in the election case aforesaid without allowing the intervention and/or the
inclusion of a legal representative of the deceased protestee; or, in the
alternative, to compel the trial court to give due course to the petitioners'
appeal from the decision in said case. Upon bond duly filed and approved,
the Court of Appeals issued the writ of preliminary injunction prayed for.
However, upon respondents' motion and over the opposition of the
petitioners, the effect of said writ was temporarily suspended until the case
was finally decided by the Court of Appeals.

Appropriate proceedings having been had in the case, the latter court,
besides finding the inapplicability to election cases of the provisions of
Section 17, Rule 3 of the Rules of Court on substitution of parties in case of
death, opined that the petitioners likewise lacked the legal standing and/or
capacity to appear in election case 7924 aforesaid and/or to appeal from the
decision rendered therein, and that furthermore while the petitioner Loresca
may have had such personality he nevertheless failed to timely invoke the
same to protect his interests. Accordingly, it denied the petition for certiorari
and mandamus and consequently permanently dissolved the writ of
preliminary injunction theretofore issued.

Hence, the present recourse.

The vital issue, to which all other issues appear to be subsidiary, is the
determination of the legal effect of the proceedings taken by the trial court
in the election contest before it subsequent to the demise of the protestee
De Mesa.

As we approach this question, certain postulates project themselves to the

fore. It is axiomatic that an election contest, involving as it does not only the
adjudication and settlement of the private interests of the rival candidates
but also the paramount need of dispelling once and for all the uncertainty
that beclouds the real choice of the electorate with respect to who shall
discharge the prerogatives of the offices within their gift, is a proceeding
imbued with public interest which raises it onto a plane over and above
ordinary civil actions. For this reason, broad perspectives of public policy
impose upon courts the imperative duty to ascertain by all means within
their command who is the real candidate elected in as expeditious a manner
as possible, without being fettered by technicalities and procedural barriers
to the end that the will of the people may not be frustrated (Ibasco vs. Ilao,
et al., G.R. L-17512, December 29, 1960; Reforma vs. De Luna, G.R. L-
13242, July 31, 1958). So inextricably intertwined are the interests of the
contestants and those of the public that there can be no gainsaying the logic
of the proposition that even the voluntary cessation in office of the protestee
not only does not ipso facto divest him of the character of an adversary in
the contest inasmuch as he retains a party interest to keep his political
opponent out of the office and maintain therein his successor, but also does
not in any manner impair or detract from the jurisdiction of the court to
pursue the proceeding to its final conclusion (De Los Angeles vs. Rodriguez,
46 Phil. 595, 597; Salcedo vs. Hernandez, 62 Phil. 584, 587; Galves vs.
Maramba, G.R. L-13206).

Upon the same principle, the death of the protestee De Mesa did not abate
the proceedings in the election protest filed against him, and it may be
stated as a rule that an election contest survives and must be prosecuted to
final judgment despite the death of the protestee.

With the death of De Mesa, however, a contingency not expressly provided

for by the Revised Election Code was ushered in. Nevertheless, the, hiatus in
the special law posed no impediment to the course of the proceedings
because, precisely by express mandate of Rule 134 of the Rules of Court,
said rules, though not generally applicable to election cases, may however
be applied "by analogy or in a suppletory character and whenever
practicable and convenient." For the eventuality here involved, the Rules
specifically plot the course of action to be taken, in the following language:
SEC. 17. Death of party.—After a party dies and the claim is not thereby
extinguished, the court shall order, upon proper notice, the legal
representative of the deceased to appear and to be substituted for the
deceased, within a period of thirty (30) days, or within such time as may be
granted. If the legal representative fails to appear within said time, the court
may order the opposing party to procure the appointment of a legal
representative of the deceased within a time to be specified by the court,
and the representative shall immediately appear for and on behalf of the
interest of the deceased. . . . (Rule 3.)

That the applicability of the foregoing precept to the election contest below
was initially conceded is borne out by the proceedings on record. The trial
court, it will be recalled in its order of May 6, 1964, required the widow and
children of the deceased protestee to appear and be substituted for and on
his behalf and to protect his interest in the case. But when they failed to
comply — mainly because of the shock and agony that followed in the wake
of the violent death of the protestee — the trial court took no further steps
in the premises and, instead, at the instance of the protestant, declared said
widow and children non-suited, proceeded with the case ex parte, and
effectively blocked all attempts at intervention and/or substitution in behalf
of the deceased protestee. In these moves, the trial court did not only merit
the unqualified sanction of the Court of Appeals but the latter, taking an
even more radical of the matter, actually held that the rule relied upon has
no application to election cases.

We cannot give our imprimatur to the foregoing view. All reasonable

intendments deducible from the law and the essential nature of the case
involved, to our mind, unerringly tend to the contrary. All the very least,
nothing extant in the Revised Election Code either expressly or by
implication renders inappropriate the application of said principle of
substitution in case of death to proceedings thereunder. On the contrary,
because of its clear failure to meet the contingency in question, the need to
supplement the deficiency becomes imperative. Then the exertion of judicial
power to hear and determine a cause implicitly presupposes in the trial
court, amongst other essentials, jurisdiction over the persons of the parties.
That jurisdiction was inevitably impaired upon the death of the protestee
pending the proceedings below such that unless and until a legal
representative is for him duly named and within the jurisdiction of the trial
court, no adjudication in the cause could have been accorded any validity or
binding effect upon any party, in representation of the deceased, without
trenching upon the fundamental right to a day in court which is the very
essence of the constitutionally enshrined guarantee of due process. As
cogently synthesized in Cupples vs. Castro, 137 P. 2d., 755 —

Where contestant was declared elected and contestee appealed after which
contestant died, rights of parties could not be determined in absence of
contestant and his legal representative and submission would be set aside
and cause taken from calendar to be heard only after representative for
contestant should have been substituted. (Francisco, The Revised Election
Code, 1957 ed., p. 583).

If this be the case with the contestant, a fortiori no less can be said of the
contestee whose rights as well as those of his successor by operation of law
would be at hazard in an ex parte proceeding. Further still, the fundamental
purpose of the Revised Election Code, it has been recognized, is to protect
the integrity of elections and suppress all evils that may vitiate their purity
and defeat the popular will. Judicial experience teaches that more often than
not frauds and irregularities committed during the voting come to light only
when the ballot boxes are opened and their contents examined. At no time
then in the course of an election contest is the need for vigilance more to be
insisted upon than during that critical stage when the ballot boxes are
opened and the ballots themselves are revised. To deny a party to the
contest the representation that the law allows him at this juncture is virtually
to take away one of the most effective measures designed for the
approximation of the primordial objective election laws are intended to
achieve.

In the light of the foregoing, it is our considered view that Section 17, Rule 3
of the Rules of Court applies to election contests to the same extent and
with the same force and effect as it does in ordinary civil actions. And we
declare that unless and until the procedure therein detailed is strictly
adhered to, proceedings taken by a court in the absence of a duly appointed
legal representative of the deceased protestee must be stricken down as null
and void. Considering that, in the case at bar, the trial court failed to order
the protestant to procure the appointment of a legal representative of the
deceased protestee after the latter's widow and children had failed to comply
with the court order requiring their appearance to be substituted in lieu of
their predecessor, but instead — in derogation of the precepts of the Rule in
question and in the total absence of a legal representative of the deceased
protestee — proceeded ex parte with the election case, said court not only
acted with grave abuse of discretion but actually committed a clear extra-
limitation of its lawful jurisdiction which, perforce, tainted all its proceedings
with the indelible stigma of nullity (Barrameda, et al. vs. Barbara, 90 Phil.
718, 722, 723; Ferreria vs. Ibarra Vda. de Gonzales, et al., 55 O.G. No. 8,
1358, 136263; Sarmiento, etc., et al. vs. Ortiz, et al., G.R. L-18583, January
31, 1964; Caisip vs. Cabangon, G.R. L-14684-14686, August 26, 1960).

It is no argument against this conclusion to contend that the requirement for

the procurement of a legal representative of a deceased litigant is couched
in the permissive term "may" instead of the mandatory word "shall." While
the ordinary acceptations of these terms may indeed be resorted to as
guides in the ascertainment of the mandatory or directory character of
statutory provisions, they are in no wise absolute and inflexible criteria in
the vast areas of law and equity. Depending upon a consideration of the
entire provision, its nature, its object and the consequences that would
follow from construing it one way or the other, the convertibility of said
terms either as mandatory or permissive is a standard recourse in statutory
construction. Thus, Black is authority for the rule that "Where the statute
provides for the doing of some act which is required by justice or public
duty, or where it invests a public body, municipality or public officer with
power and authority to take some action which concerns the public interest
or rights of individuals, the permissive language will be construed as
mandatory and the execution of the power may be insisted upon as a duty"
(Black, Interpretation of Laws, pp. 540-543). The matter here involved not
only concerns public interest but also goes into the jurisdiction of the trial
court and is of the essence of the proceedings taken thereon. On this point,
there is authority to the effect that in statutes relating to procedure, as is
the one now under consideration, every act which is jurisdictional, or of the
essence of the proceedings, or is prescribed for the protection or benefit of
the party affected, is mandatory (Gonzaga, Statutes and their Construction,
p. 98, citing: Estate of Naval, G.R. No. L-6736, May 4, 1954). The present
case is well within the purview of this doctrine.

Nor may the motu proprio appointment by the trial court of Ramon Antilon
Jr. as commissioner for the deceased protestee in the revision proceedings
be decreed a substantial compliance with the legal requirement. As aptly
observed in the dissent to the decision under review, said commissioner was
not the legal representative contemplated by the Rules to be substituted for
the deceased protestee. Said commissioner was not supposed to represent
the protestee as a party litigant. His appointment as such was made
exclusively upon the initiative of the trial court and is authorized by the law.
Section 175, Revised Election Code, merely as a time-saving device for the
convenience of the court and the parties in the purely mechanical operation
of opening the ballots and tabulating the count and in the interest of a
speedy and expeditious revision and recount of the contested ballots
(Hontiveros vs. Altavas, 24 Phil. 632, 649-650; Raymundo vs. Gonzales, 80
Phil. 719, 721). For all legal intents and purposes, while said commissioner's
appointment may be proposed by the contestants themselves, he is
nevertheless exclusively an officer or an agent of the court under its direct
control and supervision.

Equally unacceptable is the proposition that, because time is of the essence

in an election contest, recourse to the appointment of a legal representative
of a deceased protestee which can only protract and delay the progress of
the case is but a finical matter of procedure which can justifiably be
dispensed with. The validity of the injunction for the prompt disposal of
election controversies as repeatedly postulated in a consistent array of
jurisprudence is not open to debate. The terms of office of elective officials
are relatively brief. To dissipate within the shortest time possible any aura of
doubt upon the true result of elections is a much sought-after desideratum.
But, salutary though the precept may be, it is no justification for cutting
procedural corners or taking legal short cuts not warranted in a system of
procedure where the rule of law is still held paramount over and above all
considerations of mere convenience and expediency. We would be the last to
advocate a departure from the policy of early settlement of electoral
disputes, but we are not prepared to lend our approval to a course of action
which would tend to achieve one object of desire at the expense of the
orderly administration of justice and with the sacrifice of the fundamental
right of litigants to due process of law. Otherwise, the speedy trial required
by the law would be converted into a denial of justice (Querubin vs. Court of
Appeals, 82 Phil. 226, 230). In law — as in any other sphere of human
relations — the end very seldom, if at all, justifies the means. And, in the
case at bar, the admittedly imperative demand for a speedy disposition of
the controversy cannot deter our hand from striking down illegality in the
proceedings therein and remanding the case for new trial, despite the
concomitant delay that may be occasioned thereby, since that is the only
course open if the ends of justice are to be subserved (Salcedo vs.
Hernandez, 62 Phil. 584, 587).

Consequent to the conclusion we have just reached, we confront the issue of

who is the legal representative of the deceased protestee entitled to be
substituted in his stead.

As the record of the case reveals, three different aspirants vied for that legal
representation: Demetrio R. Loresca, the vice-mayor who succeeded to the
position of mayor upon the protestee's demise; Magdalena Sibulo Vda. de De
Mesa, the protestee's widow; and the local chapter of the Liberal Party at
Muntinlupa, Rizal, to which the deceased protestee belonged, as represented
by its officers who are co-petitioners herein. An examination of the
countervailing interests of these parties seems in order.

By virtue of Section 7 of the Local Autonomy Act, Republic Act 2264, the
vice-mayor stands next in line of succession to the mayor in case of a
permanent vacancy in the latter's position. Upon the death of the protestee
mayor in the case at bar, Loresca as then incumbent vice-mayor succeeded
by operation of law to the vacated office and, as a matter of right, is entitled
to occupy the same for the unexpired term thereof or until the protest
against his predecessor is decided adversely against the latter. The outcome
of that contest thus bears directly upon his right to his present position and,
amongst all, he is the person most keenly concerned and interested in the
fair and regular conduct thereof in order that the true will of the electorate
will be upheld. His status as a real party in interest in the continuation of the
proceedings — a fact conceded by the decision under review itself — cannot
thus be disputed.

It is not correct to subject Loresca, as the Court of Appeals did, respecting

his interest in the controversy to the operation of the equitable principle of
laches. The initiative to cause his substitution in lieu of the deceased
protestee was not Loresca's. It was the trial court's as well as the
protestant's duty, upon being apprised of the protestee's death, to cause the
appointment of his legal representative according to the procedure
delineated in the Rules. Failing in this duty, it never became the obligation of
Loresca to take it upon himself to be appointed as such legal representative,
as in fact, he was not even duly and seasonably notified, much less ordered,
to appear and be so substituted. In this posture, and particularly because, as
above held, the trial court did not even acquire jurisdiction over him, no
room exists for the operation of the rule on laches against him. His
intervention should not have been denied.

The same cannot, however, be said of the protestee's widow or of the local
Liberal Party chapter of Muntinlupa. The protestee's claim to the contested
office is not in any sense a right transmissible to this widow or heirs. Said
widow's only remaining interest in the outcome of the case is limited to no
more than the possible award of costs against the deceased protestee.
Besides not being such an interest as would justify her substitution for her
deceased husband as an indispensable legal representative, the right to such
an award if eventually made has already been waived by the protestant
Argana. This effectively withdraws the widow from the picture altogether.
Much less has the local Liberal Party Chapter any claim to substitution. Not
being duly incorporated as a juridical person, it can have no personality to
sue or be sued as such. And while it conceivably may derive some indirect
benefit consequent to the resolution of the contest in favor of the deceased
protestee, neither the chapter itself nor the officers thereof would become
entitled thereby to any right to the contested office in case of a favorable
judgment, nor, for that matter, do they stand to sustain any direct prejudice
in case of an adverse one. No basis therefore exists upon which to predicate
their claim to substitution.

The foregoing views render academic the alternative issue raised by the
petitioners regarding the propriety of their appeal from the trial court's
decision in the main case.

ACCORDINGLY, the judgment under review is reversed and in lieu thereof,

another is rendered —

(1) Declaring null and void the judgment of the Court of First Instance of
Rizal in election case 7924 thereof, dated August 10, 1964, which
proclaimed the protestant Maximino A. Argana the duly elected mayor of
Muntinlupa, Rizal in the 1963 elections, for having been rendered without
jurisdiction over the person of the legal representative of the deceased
protestee Francisco de Mesa and all other proceedings taken by said court in
said election case subsequent to the death of the said protestee;

(2) Ordering the protestant Maximino A. Argana, without delay, to vacate

the office of the mayor of Muntinlupa, Rizal and to relinquish the same in
favor of Demetrio R. Loresca; and

(3) Ordering the Court of First Instance of Rizal to forthwith appoint the
petitioner Demetrio R. Loresca as the legal representative of the deceased
protestee Francisco de Mesa and allow his appearance as such in substitution
of the said deceased for purposes of said election case 7924 of said court, to
conduct a new trial in said election case, and thereafter to render judgment
therein as the evidence may warrant.

No pronouncement as to costs.
Concepcion, C.J., Reyes, J.B.L., Dizon, Regala, Makalintal, Bengzon, J.P.,
Zaldivar and Sanchez, JJ., concurs.

Barrera, J., is on leave.

 SECOND DIVISION

[G.R. No. L-21572. October 4, 1924. ]

MARCELA LLENARES, Plaintiff-Appellant, v. FELISA VALDEAVELLA

and ALFONSO ZORETA, Defendants-Appellees.

Domingo Lopez for Appellant.

Francisco & Lualhati for Appellees.

SYLLABUS

1. EXECUTION OF JUDGMENT; LEVY, DEFINITION OF. — The levy of an

execution of a judgment consists in the act or acts by which an officer sets
apart or appropriates for the purpose of satisfying the command of the writ,
a part or the whole of the judgment debtor’s property.

2. ID.; ID.; FORMALITIES. — In the absence of statutory provisions no

special formalities are required for a valid levy of an execution, and in regard
to real property, it is usually sufficient if the seizure of the property is made
known to the occupants thereof and endorsed on the writ.

3. ID.; ID.; ID. — In the Philippine Islands the procedure in levying an

execution must be considered regulated by sections 415 and 429 of the
Code of Civil Procedure.
4. ID.; ID.; ID. — In an attempted levy of execution upon real estate no
notice of attachment was filed with the register of deeds and copy thereof
served on the defendant. Held: That there was no sufficient levy of
execution under the Philippine statutes and that the sale of the property
made under the attempted levy was null and void and conferred no title on
the purchaser.

5. ID.; CONSTRUCTION OF STATUTE. — Powers through the exercise of

which a person may be divested of his property are strictly construed and
the provisions regulating the procedure in their exercise are mandatory as to
the essence of the thing to be done.

DECISION

OSTRAND, J. :

This is an action in ejectment, the plaintiff alleging that she is the owner of
two parcels of land in the barrio of Wacas, municipality of Tayabas, having
acquired said parcels by purchase at a sheriff’s sale under writ of execution
issued by the justice of the peace of the municipality of Tayabas in a case in
which she was the plaintiff and the defendant Felisa Valdeavella and her now
deceased husband Zacarias Zabella were the defendants.

The defendants Felisa Valdeavella and Alfonso Zoreta in their answer allege
that Felisa Valdeavella never has been in possession of the parcels as owner:
that she and her husband some four years prior to the filing of the answer
(October 22, 1918) were in possession of the land as tenants of Irineo
Valdeavella, the true owner of the land; and that the defendant Alfonso
Zoreta has been in possession under an agreement made with Zacarias
Zabella whereby Zoreta was to have the use and benefit of the land as
security for a debt of P100. Subsequent to the filing of this answer Irineo
Valdeavella was impleaded. In his answer he alleges that he is the owner of
the land and has been in possession thereof for over fifteen years.

The court below rendered judgment in favor of the defendants holding that
Irineo Valdeavella was the owner of the parcels of land in question and that,
moreover, the sheriff’s sale under which the plaintiff claims title to the land
was irregular and void inasmuch as there had not been a sufficient levy on
the lands, nor a sufficient notice of the sale. From this judgment the plaintiff
appeals to this court.

In her first assignment of error the appellant maintains that the court erred
in holding that Irineo Valdeavella was the owner of the land at the time of
the attempted levy of the execution. In our opinion, this assignment of error
is well taken. The testimony in support of the claim of Irineo Valdeavella is
so contradictory and inconsistent that no reliance whatever can be thereon.

Under the second assignment of error the appellant argues that the sale,
under execution by virtue of which she claims ownership of the land, was
valid. This assignment cannot be sustained.

The levy of an execution is defined as the acts by which an officer sets apart
r appropriates for the purpose of satisfying the command of the writ, a part
or the whole of a judgment debtor’s property. In the absence of statutory
provisions no special formalities are required for a valid levy, and in regard
to real property it has usually been held sufficient if the seizure of the
property is made known to the occupants thereof and endorsed on the writ.
But it is otherwise where, as in this jurisdiction, the matter is regulated by
statute; there a substantial compliance with the statute is indispensable.
The statutory provisions to this case are found in section 450 and 429 of the
Code of Civil Procedure. Section 450 states that property "may be attached
on execution in like manner as upon writs of attachment." This provision
while permissive in form must, nevertheless, be regarded as mandatory. No
other method of effecting the levy is prescribed and it is an old rule that
powers through the exercise of which a person may be divested of his
property are always strictly construed and that the provisions regulating the
procedure in their exercise are mandatory as to the essence of the thing to
be done. (Lewis’ Sutherland on Statutory Construction, 2d., ed., 627.)

Section 429 of the Code reads as follows:jgc:chanrobles.com.ph

"Real property, standing upon the records in the name of the defendant or
not appearing at all upon the record, shall be attached by filing with the
registrar of the titles of the land for the province in which the land is
situated, a copy of the order of attachment, together with a description of
the property attached, and a notice that it is attached, and by leaving a
similar copy of the order, description and notice with an occupant of the
property, if there is one.

"Real property or an interest therein, belonging to the defendant and held by

any other person, or standing on the records in the name of any other
person, shall be attached by filing with the registrar of the land titles in the
province in which the land is situated, a copy of the order of attachment,
together with a description of the property, and a notice that such real
property and any interest of the defendant therein, held by or standing in
the name of such person (naming him) are attached; and by leaving with
the occupant, if any, and with such other person, or his agent, if known and
within the province, a copy of the order, description and notice. The registrar
must index attachments filed under the first paragraph of this section, in the
names, both of the plaintiff and of the defendant, and must index
attachments filed under the second paragraph of this section, in the names
of the plaintiff and of the defendant and of the person by whom the property
is held or in whose name it stands on the records."cralaw virtua1aw library
In the present case it is admitted by the plaintiff that notice of attachment
for the execution was not filed with the registrar of deeds and that there was
no copy thereof served on the defendants. It is therefore clear that the
attempted levy was not made in accordance with the provisions of the
statute, and, according to the great weight of authority, a proper levy is
indispensable to a valid sale on execution. A sale unless preceded by a valid
levy, is void, and the purchaser acquires no title. (Leath v. Deweese, 162
Ky., 227; Jarboe v. Hall, 37 Md., 345.)

There having been no sufficient levy of the execution in question, the

plaintiff took no title to the property sold thereunder and the present action
can therefore not be maintained.

The judgment appealed from is affirmed, without costs. So ordered.

Johnson, Street, Malcolm, Avanceña, Villamor, and Romualdez, JJ., concur.

 EN BANC

[G.R. No. 64313. January 17, 1985.]

NATIONAL HOUSING CORPORATION, Petitioner, v. BENJAMIN JUCO

AND THE NATIONAL LABOR RELATIONS COMMISSION, Respondents.

SYLLABUS

1. ADMINISTRATIVE LAW; EMPLOYEES OF GOVERNMENT-OWNED AND

CONTROLLED CORPORATIONS; GOVERNED BY THE CIVIL SERVICE LAW. —
There should no longer be any question at this time that employees of
government-owned or controlled corporations are governed by the civil
service law and civil service rules and regulations. The constitutional
provision (Section 1, Article XII-B of the Constitution) has been implemented
by statute. Presidential Decree No. 807 is unequivocal that personnel of
government-owned or controlled corporations belong to the civil service and
are subject to civil service requirements, and Article 277 of Presidential
Decree No. 442.

2. REMEDIAL LAW; JURISDICTION; NATIONAL HOUSING AUTHORITY;

UNDER THE JURISDICTION OF THE CIVIL SERVICE COMMISSION. —
Applying the pertinent provisions of the Constitution, the Labor Code as
amended, and the Civil Service Decree as amended and the precedent in the
Alliance of Government Workers decision, it is clear that the petitioner
National Housing Corporation comes under the jurisdiction of the Civil
Service Commission, not the Ministry of Labor and Employment. This
becomes more apparent if we consider the fact that the NHC performs
governmental functions and not proprietary ones.
ABAD SANTOS, J., dissenting:chanrob1es virtual 1aw library

1. ADMINISTRATIVE LAW; CIVIL SERVICE LAW; EMPLOYEES OF THE

NATIONAL HOUSING ADMINISTRATION, A CORPORATION CREATED BY
SPECIAL LAW, NOT COVERED. — It was Justice Abad Santos, as Secretary of
Justice, who issued Opinion No. 62, series of 1976, for the Commissioner of
Civil Service who wanted to know the scope of the constitutional provisions
on the Civil Service in respect of government-owned or controlled
corporations. In response I opined, for the reasons stated therein, that only
those corporations created by special law are contemplated. In the case at
bar the National Housing Corporation was not created by special law; it was
organized pursuant to the Corporation Law — Act No. 1459 entitled, AN ACT
PROVIDING FOR THE FORMATION AND ORGANIZATION OF CORPORATIONS,
DEFINING THEIR POWERS, FIXING THE DUTIES OF DIRECTORS AND OTHER
OFFICERS THEREOF, DECLARING THE RIGHTS AND LIABILITIES OF
SHAREHOLDERS AND MEMBERS, PRESCRIBING THE CONDITIONS UNDER
WHICH SUCH CORPORATIONS MAY TRANSACT BUSINESS. [Act No. 1459
has been replaced by Batas Pambansa Blg. 68 known as The New
Corporation Code.] In the light of my opinion, the National Housing
Corporation is not covered by the Civil Service provisions of the constitution.

DECISION

GUTIERREZ, JR., J.:

Are employees of the National Housing Corporations (NHC) covered by the

Labor Code or by laws and regulations governing the civil service?
The background facts of this case are stated in the respondent-appellee’s
brief as follows:jgc:chanrobles.com.ph

"The records reveal that private respondent (Benjamin C. Juco) was a

project engineer of the National Housing Corporation (NHC) from November
16, 1970 to May 14, 1975. For having been implicated in a crime of theft
and/or malversation of public funds involving 214 pieces of scrap G.I. pipes
owned by the corporation which was allegedly committed on March 5, 1975.
Juco’s services were terminated by NHC effective as of the close of working
hours on May 14, 1975. On March 25, 1977 he filed a complaint for illegal
dismissal against petitioner (NHC) with Regional Office No. 4, Department of
Labor (now Ministry of Labor and Employment) docketed as R04-3-3309-77
(Annex A, Petition). The said complaint was certified by Regional Branch No.
IV of the NLRC for compulsory arbitration where it was docketed as Case No.
RB-IV-12038-77 and assigned to Labor Arbiter Ernilo V. Peñalosa. The latter
conducted the hearing. By agreement of the parties, the case was submitted
for resolution upon submission of their respective position papers. Private
respondent (Juco) submitted his position paper on July 15, 1977. He
professed innocence of the criminal acts imputed against him contending
that he was dismissed based on purely fabricated charges purposely to
harass him because he stood as a witness in the theft case filed against
certain high officials of the respondent’s establishment’ (NHC) and prayed
for ‘his immediate reinstatement to his former position in the NHC without
loss of seniority rights and the consequent payment of his full back wages
plus all the benefits appertaining thereto’. On July 28, 1977, the NHC also
filed its position paper alleging that the Regional Office Branch IV, Manila,
NLRC, ‘is without authority to entertain the case for lack of jurisdiction,
considering that the NHC is a government owned and controlled corporation;
that even assuming that this case falls within the jurisdiction of this Office,
respondent firm (now petitioner) maintains that complainant (Juco), now
private respondent, was separated from the service for valid and justified
reasons, i.e., for having sold company properties consisting of 214 pieces of
scrap G.I. pipes at a junk shop in Alabang, Muntinlupa, Metro Manila, and
thereafter appropriating the proceeds thereof to his own benefit.’
The pertinent portion of the decision of respondent National Labor Relations
Commission (NLRC) reads:chanrobles lawlibrary : rednad

"The fact that in the early case of Fernandez v. Cedro (NLRC Case No.
201165-74, May 19, 1975) the Commission, (Second Division) ruled that the
respondent National Housing Corporation is a government-owned or
controlled corporation does not preclude us from later taking a contrary
stand if by doing so the ends of justice could better be served.

"For although adherence to precedents (stare decisis) is a sure formula for

achieving uniformity of action and conducive to the smooth operation of an
office, idolatrous reverence for precedents which have outlived their validity
and usefulness retards progress and should therefore be avoided. In fact,
even courts do reverse themselves for reasons of justice and equity. This
Commission as an Administrative body performing quasi-judicial function is
no exception.

"WHEREFORE, in the light of the foregoing, the decision appealed from is

hereby, set aside. In view, however, of the fact that the Labor Arbiter did
not resolve the issue of illegal dismissal, we have opted to remand this case
to the Labor Arbiter a quo for resolution of the aforementioned issue."cralaw
virtua1aw library

The NHC is a one hundred percent (100%) government-owned corporation

organized in accordance with Executive Order No. 399, the Uniform Charter
of Government Corporations, dated January 5, 1951. Its shares of stock are
owned by the Government Service Insurance System, the Social Security
System, the Development Bank of the Philippines, the National Investment
and Development Corporation, and the People’s Homesite and Housing
Corporation. Pursuant to Letter of Instruction NO. 118, the capital stock of
NHC was increased from P100 million to P250 million with the five
government institutions abovementioned subscribing in equal proportion to
the increased capital stock. The NHC has never had any private
stockholders. The government has been the only stockholder from its
creation to the present.

There should no longer be any question at this time that employees of

government-owned or controlled corporations are governed by the civil
service law and civil service rules and regulations.

Section 1, Article XII-B of the Constitution specifically

provides:jgc:chanrobles.com.ph

"The Civil Service embraces every branch, agency, subdivision, and

instrumentality of the Government, including every government-owned or
controlled corporation . . ."cralaw virtua1aw library

The 1935 Constitution had a similar provision in its Section 1, Article XII
which stated:jgc:chanrobles.com.ph

"A Civil Service embracing all branches and subdivisions of this Government
shall be provided by law."cralaw virtua1aw library

The inclusion of "government-owned or controlled corporations" within the

embrace of the Civil service shows a deliberate effort of the framers to plug
an earlier loophole which allowed government-owned or controlled
corporations to avoid the full consequences of the all encompassing
coverage of the civil service system. The same explicit intent is shown by the
addition of "agency" and "instrumentality" to branches and subdivisions of
the Government. All offices and firms of the government are covered.

The amendments introduced in 1973 are not idle exercises or meaningless

gestures. They carry the strong message that civil service coverage is broad
and all-embracing insofar as employment in the government in any of its
governmental or corporate arms is concerned.

The constitutional provision has been implemented by statute. Presidential

Decree No. 807 is unequivocal that personnel of government-owned or
controlled corporations belong to the civil service and are subject to civil
service requirements.

It provides:jgc:chanrobles.com.ph

"SEC. 56. Government-owned or Controlled Corporations Personnel —All

permanent personnel of government-owned or controlled corporations
whose positions are now embraced in the civil service shall continue in the
service until they have been given a chance to qualify in an appropriate
examination, but in the meantime, those who do not possess the appropriate
civil service eligibility shall not be promoted until they qualify in an
appropriate civil service examination. Services of temporary personnel may
be terminated any time."cralaw virtua1aw library

The very Labor Code, P. D. No. 442 as amended, which the respondent
NLRC wants to apply in its entirety to the private respondent
provides:jgc:chanrobles.com.ph

"ART. 277. Government employees — The terms and conditions of

employment of all government employees, including employees of
government-owned and controlled corporations shall be governed by the
Civil Service Law, rules and regulations, Their salaries shall be standardized
by the National Assembly as provided for in the New Constitution. However,
there shall be reduction of existing wages, benefits and other terms and
conditions of employment being enjoyed by them at the time of the adoption
of the Code."cralaw virtua1aw library
Our decision in Alliance of Government Workers Et. Al. v. Honorable Minister
of Labor and Employment, Et. Al. (124 SCRA 1) gives the background of the
amendment which includes government-owned or controlled corporations in
the embrace of the civil service.

We stated:jgc:chanrobles.com.ph

"‘Records of the 1971 Constitutional Convention show that in the

deliberation held relative to what is now Section 1(1), Article XII-B, supra,
the issue of the inclusion of government-owned or controlled corporations
figured prominently.

"‘The late delegate Roberto S. Oca, a recognized labor leader, vehemently

objected to the inclusion of government-owned or controlled corporations in
the Civil Service. He argued that such inclusion would put asunder the right
of workers in government corporations, recognized in jurisprudence under
the 1935 Constitution, to form and join labor unions for purposes of
collective bargaining with their employers in the same manner as in the
private section (see: records of 1971 Constitutional Convention).

"‘In contrast, other labor experts and delegates to the 1971 Constitutional
Convention enlightened the members of the Committee on Labor on the
divergent situation of government workers under the 1935 Constitution, and
called for its rectification. Thus, in a Position Paper dated November 22,
1971, submitted to the Committee on Labor, 1971 Constitutional
Convention, then Acting Commissioner of Civil Service Epi Rey Pangramuyen
declared:jgc:chanrobles.com.ph

"‘It is the stand, therefore, of this Commission that by reason of the nature
of the public employer and the peculiar character of the public service, it
must necessarily regard the right to strike given to unions in private industry
as not applying to public employees and civil service employees. It has been
stated that the Government, in contrast to the private employer, protects
the interests of all people in the public service, and that accordingly, such
conflicting interests as are present in private labor relations could not exist
in the relations between government and those whom they employ.

"‘Moreover, determination of employment conditions as well as supervision

of the management of the public service is in the hands of legislative homes.
It is further emphasized that government agencies in the performance of
their duties have a right to demand undivided allegiance from their workers
and must always maintain a pronounced esprit de corps or firm discipline
among their staff members. It would be highly incompatible with these
requirements of the public service, if personnel took orders from union
leaders or put solidarity with members of the working class above solidarity
with the Government. This would be inimical to the public interest.

"‘Moreover, it is asserted that public employees by joining labor unions may

be compelled to support objectives which are political in nature and thus
jeopardize the fundamental principle that the governmental machinery must
be impartial and non-political in the sense of party politics.’ (See: Records of
1971 Constitutional Convention)

"‘Similarly, Delegate Leandro P. Garcia, expressing for the inclusion of

government-owned or controlled corporations in the Civil Service,
argued:jgc:chanrobles.com.ph

"‘It is meretricious to contend that because Government-owned or controlled

corporations yield profits, their employees are entitled to better wages and
fringe benefits than employees of Government other than Government-
owned and controlled corporations which are not making profits. There is no
gainsaying the fact that the capital they use is the people’s money.’ (see:
Records of the 1971 Constitutional Convention)
"Summarizing the deliberations of the 1971 Constitutional Convention on the
inclusion of Government-owned or controlled corporations, Dean Joaquin G.
Bernas, SJ., of the Ateneo de Manila University Professional School of Law,
stated that government-owned corporations came under attack as milking
cows of a privileged few enjoying salaries far higher than their counterparts
in the various branches of government, while the capital of these
corporations belongs to the Government and government money is pumped
into them whenever on the brink of disaster, and they should therefore come
under the strict surveillance of the Civil Service System. (Bernas, The 1973
Philippine Constitution, Notes and Cases, 1974 ed., p. 524).’"

Applying the pertinent provisions of the Constitution, the Labor Code as

amended, and the Civil Service Decree as amended and the precedent in the
Alliance of Government Workers decision, it is clear that the petitioner
National Housing Corporation comes under the jurisdiction of the Civil
Service Commission, not the Ministry of Labor and
Employment.chanrobles.com:cralaw:red

This becomes more apparent if we consider the fact that the NHC performs
governmental functions and not proprietary ones.

The NHC was organized for the governmental objectives stated in its
amended articles of incorporation as follows:jgc:chanrobles.com.ph

"SECOND: That the purpose for which the corporation is organized is to

assist and carry out the coordinated massive housing program of the
government, principally but not limited to low-cost housing with the
integration, cooperation and assistance of all governmental agencies
concerned, through the carrying on of any or all the following
activities:jgc:chanrobles.com.ph
"1) The acquisition, development or reclamation of lands for the purpose of
construction and building therein preferably low-cost housing so as to
provide decent and durable dwelling for the greatest number of inhabitants
in the country;

"2) The promotion and development of physical, social and economic

community growth through the establishment of general physical plans for
urban, suburban and metropolitan areas to be characterized by efficient
landuse patterns;

"3) The coordination and implementation of all projects of the government

for the establishment of nationwide and massive low-cost housing;

"4) The undertaking and conducting of research and technical studies of the
development and promotion of construction of houses and buildings of sound
standards of design liability, durability, safety, comfort and size for
improvement of the architectural and engineering designs and utility of
houses and buildings with the utilization of new and/or native materials
economics in material and construction, distribution, assembly and
construction and of applying advanced housing and building technology.

"5) Construction and installation in these projects of low-cost housing

privately or cooperatively owned water and sewerage system or waste
disposal facilities, and the formulations of a unified or officially coordinated
urban transportation system as a part of a comprehensive development plan
in these areas."cralaw virtua1aw library

The petitioner points out that it was established as an instrumentality of the

government to accomplish governmental policies and objectives and extend
essential services to the people. It would be incongruous if employees
discharging essentially governmental functions are not covered by the same
law and rules which govern those performing other governmental functions.
If government corporations discharging proprietary functions now belong to
the civil service with more reason should those performing governmental
functions be governed by civil service law.chanrobles virtual lawlibrary

The respondent NLRC cites a 1976 opinion of the Secretary of Justice which
holds that the phrase "government-owned or controlled corporations" in
Section 1, Article XII-B of the Constitution contemplates only those
government-owned or controlled corporations created by special law, The
opinion states that since the Constitution provides for the organization or
regulation of private corporations only by "general law", expressly excluding
government-owned or controlled corporations, it follows that whenever the
Constitution mentions government-owned or controlled corporations, it must
refer to those created by special law. P.D. No. 868 which repeals all
charters, laws, decrees, rules, and provisions exempting any branch,
agency, subdivision, or instrumentality of the government, including
government-owned or controlled corporations from the civil service law and
rules is also cited to show that corporations not governed by special charters
or laws are not to be brought within civil service coverage. The discussions
in the Constitutional Convention are also mentioned. It appears that at the
time the Convention discussed government-owned or controlled
corporations, all such corporations were organized only under special laws or
charters.

The fact that "private" corporations owned or controlled by the government

may be created by special charter does not mean that such corporations not
created by special law are not covered by the civil service. Nor does the
decree repealing all charters and special laws granting exemption from the
civil service law imply that government corporations not created by special
law are exempt from civil service coverage. These charters and statutes are
the only laws granting such exemption and, therefore, they are the only
ones which could be repealed. There was no similar exempting provision in
the general law which called for repeal. And finally, the fact that the
Constitutional Convention discussed only corporations created by special law
or charter cannot be an argument to exclude petitioner NHC from civil
service coverage. As stated in the cited speech delivered during the
convention sessions of March 9, 1972, all government corporations then in
existence were organized under special laws or charters. The convention
delegates could not possibly discuss government-owned or controlled
corporations which were still non-existent or about whose existence they
were unaware.

Section I of Article XII-B, Constitution uses the word "every" to modify the
phrase "government-owned or controlled corporation."cralaw virtua1aw
library

"Every" means each one of a group, without exception. It means all possible
and all, taken one by one. Of course, our decision in this case refers to a
corporation created as a government-owned or controlled entity. It does not
cover cases involving private firms taken over by the government in
foreclosure or similar proceedings. We reserve judgment on these latter
cases when the appropriate controversy is brought to this Court.

The infirmity of the respondents’ position lies in its permitting a

circumvention or emasculation of Section 1, Article XII-B of the Constitution.
It would be possible for a regular ministry of government to create a host of
subsidiary corporations under the Corporation Code funded by a willing
legislature. A government-owned corporation could create several subsidiary
corporations. These subsidiary corporations would enjoy the best of two
worlds. Their officials and employees would be privileged individuals, free
from the strict accountability required by the Civil Service Decree and the
regulations of the Commission on Audit. Their incomes would not be subject
to the competitive restraints of the open market nor to the terms and
conditions of civil service employment. Conceivably, all government-owned
or controlled corporations could be created, no longer by special charters,
but through incorporation under the general law. The constitutional
amendment including such corporations in the embrace of the civil service
would cease to have application. Certainly, such a situation cannot be
allowed to exist.cralawnad
WHEREFORE, the petition is hereby GRANTED. The questioned decision of
the respondent National Labor Relations Commission is SET ASIDE. The
decision of the Labor Arbiter dismissing the case before it for lack of
jurisdiction is REINSTATED.

SO ORDERED.

Fernando, C.J., Teehankee, Makasiar, Aquino, Concepcion, Jr., Melencio-

Herrera, Plana, Escolin, Relova, De la Fuente and Cuevas, JJ., concur.

Separate Opinions

ABAD SANTOS, J., dissenting:chanrob1es virtual 1aw library

It was I, as Secretary of Justice, who issued Opinion No. 62, series of 1976,
for the Commissioner of Civil Service who wanted to know the scope of the
constitutional provisions on the Civil Service in respect of government-
owned or controlled corporations. In response I opined, for the reasons
stated therein, that only those corporations created by special law are
contemplated.

In the case at bar the National Housing Corporation was not created by
special law; it was organized pursuant to the Corporation Law — Act No.
1459 entitled, AN ACT PROVIDING FOR THE FORMATION AND
ORGANIZATION OF CORPORATIONS, DEFINING THEIR POWERS, FIXING
THE DUTIES OF DIRECTORS AND OTHER OFFICERS THEREOF, DECLARING
THE RIGHTS AND LIABILITIES OF SHAREHOLDERS AND MEMBERS,
PRESCRIBING THE CONDITIONS UNDER WHICH SUCH CORPORATIONS MAY
TRANSACT BUSINESS. [Act No. 1459 has been replaced by Batas Pambansa
Blg. 68 known as The New Corporation Code.] In the light of my opinion, the
National Housing Corporation is not covered by the Civil Service provisions
of the constitution. Hence I dissent.

Is the National Housing Corporation covered by the Labor Code? I am not

prepared to answer this question at this time. I do wish to emphasize that
whether or not a corporation is "government-owned or controlled" depends
upon the purpose of the inquiry. A corporation may be "government-owned
or controlled" for one purpose but not for another. In other words, it is not
possible to broadly categorize a corporation as "government-owned or
controlled."cralaw virtua1aw library

It may be asked, if the National Housing Corporation is not covered by the

Civil Service should it not be covered instead by the Labor Code? My answer
is, not necessarily. For it may well be that the National Housing Corporation
is in limbo.

The following corporations (the list is not exhaustive) appear to be

"government-owned or controlled" not by virtue of foreclosure or similar
proceedings:chanrob1es virtual 1aw library

Human Settlements Development Corporation

Nayon Filipino Foundation, Inc.

Philippine Aero Space Development Corporation

Philippine Associated Smelting and Refining Corporation

Petrophil Corporation
Petron TBA Corporation

Philippine National Oil Co.

Food Terminal, Inc.

Republic Planters Bank

QUARE: Is this Court ready to hold that each and everyone of the above-
named corporation is government-owned or controlled for Civil Service
purposes?
 SECOND DIVISION

[G.R. Nos. L-69810-14. June 19, 1985.]

TEODULO RURA, Petitioner, v. THE HON. GERVACIO A. LOPENA,

Presiding Judge of the 2nd Municipal Circuit Trial Court of Tubigon-
Clarin, Tubigon, Bohol and PEOPLE OF THE PHILIPPINES,
Respondents.

DECISION

ABAD SANTOS, J.:

This case involves the application of the Probation Law (P.D. No. 968, as
amended), more specifically Section 9 thereof which disqualifies from
probation those persons:jgc:chanrobles.com.ph

"(c) who have previously been convicted by final judgment of an offense

punished by imprisonment of not less than one month and one day and/or a
fine of not less than Two Hundred Pesos."cralaw virtua1aw library

Petitioner Teodulo Rura was accused, tried and convicted of five (5) counts
of estafa committed on different dates in the Municipal Circuit Trial Court of
Tubigon-Clarin, Tubigon, Bohol, denominated as Criminal Case Nos. 523,
524, 525, 526 and 527.chanrobles law library : red
The five cases were jointly tried and a single decision was rendered on
August 18, 1983. Rura was sentenced to a total prison term of seventeen
(17) months and twenty-five (25) days. In each criminal case the sentence
was three (3) months and fifteen (15) days.

Rura appealed to the Regional Trial Court of Bohol but said court affirmed
the decision of the lower court. When the case was remanded to the court of
origin for execution of judgment, Rura applied for probation. The application
was opposed by a probation officer of Bohol on the ground that Rura is
disqualified for probation under Sec. 9 (c) of the Probation Law quoted
above. The court denied the application for probation. A motion for
reconsideration was likewise denied. Hence the instant petition.

The question which is raised is whether or not the petitioner is disqualified

for probation.

In denying the application for probation, the respondent judge

said:jgc:chanrobles.com.ph

"Though the five estafa cases were jointly tried and decided by the Court
convicting the accused thereof, yet the dates of commission are different.
Upon conviction, he was guilty of said offenses as of the dates of commission
of the acts complained of." (Rollo, p. 58.)

Upon the other hand, the petitioner argues:jgc:chanrobles.com.ph

"We beg to disagree. There is no previous conviction by final judgment to

speak of. The five (5) cases of Estafa were tried jointly and there is only one
decision rendered on the same date — August 18, 1983. It could not be
presumed that accused-petitioner had been convicted one after the other for
the five cases of Estafa because the conviction in these cases took place
within the same day, August 18, 1983 by means of a Joint Decision, and not
in a separate decision.chanrobles law library

"Previous conviction, we submit, presupposes that there is a prior sentence

or that there was already a decision rendered which convicted the accused.
In this instant cases, however, there is only one decision rendered on the
five (5) counts of Estafa which was promulgated on the same date. In other
words the effects of conviction does not retract to the date of the
commission of the offense as the trial court held." (Id., pp. 8-9.)

We hold for the petitioner. When he applied for probation he had no previous
conviction by final judgment. When he applied for probation the only
conviction against him was the judgment which was the subject of his
application. The statute relates "previous" to the date of conviction, not to
the date of the commission of the crime.

WHEREFORE, the petition is granted and the respondent judge is directed to

give due course to the petitioner’s application for probation. No
costs.chanrobles law library

SO ORDERED.
 SECOND DIVISION

[G.R. No. L-30057. January 31, 1984.]

BRUNO O. APARRI, Petitioner, v. THE COURT OF APPEALS and LAND

AUTHORITY, the latter in substitution for REMEDIOS O. FORTICH, as
Chairman, ANGELINO M. BANZON, RAFAEL B. HILAO, VALERIANO
PLANTILLA and SEVERO YAP, as members of the Board of Directors
of the defunct National Resettlement and Rehabilitation
Administration (NARRA), Respondents.

Enrique D. Tayag for Petitioner.

Magno B. Pablo and Cipriano A. Tan for respondent Land Authority.

SYLLABUS

1. ADMINISTRATIVE LAW; PUBLIC OFFICERS; PUBLIC OFFICE, DEFINED. —

A public office is the right, authority, and duty created and conferred by law,
by which for a given period, either fixed by law or enduring at the pleasure
of the creating power, an individual is invested with some portion of the
sovereign functions of the government, to be exercised by him for the
benefit of the public (Mechem, Public Offices and Officers, Sec. 1).

2. ID.; ID.; PUBLIC OFFICE, NATURE OF RIGHT THERETO. — The right to

hold a public office under our political system is therefore not a natural right.
It exists, when it exists at all, only because and by virtue of some law
expressly or impliedly creating and conferring it (Mechem, Ibid., Sec. 64).
There is no such thing as a vested interest or an estate in an office, or even
an absolute right to hold office. Excepting constitutional offices which
provide for special immunity as regards salary and tenure, no one can be
said to have any vested right in an office or its salary (42 Am. Jur. 881).

3. ID.; ID.; APPOINTMENT, DEFINED. — By "appointment" is meant the act

of designation by the executive officer, board or body, to whom that power
has been delegated, of the individual who is to exercise the functions of a
given office (Mechem, op. cit., Sec. 102). When the power of appointment is
absolute, and the appointee has been determined upon, no further consent
or approval is necessary, and the formal evidence of the appointment, the
commission, may issue at once. Where, however, the assent or confirmation
of some other officer or body is required, the commission can issue or the
appointment is complete only when such assent or confirmation is obtained
(People v. Bissell, 49 Cal. 407). To constitute an "appointment" to office,
there must be some open, unequivocal act of appointment on the part of the
appointing authority empowered to make it, and it may be said that an
appointment to office is made and is complete when the last act required of
the appointing authority has been performed (Molnar v. City of Aurora, 348
N.E. 2d 262, 38 Ill. App. 3d 580). In either case, the appointment becomes
complete when the last act required of the appointing power is performed
(State v. Barbour, 53 Conn. 76, 55 Am. Rep. 65).

4. ID.; ID.; TERM OF OFFICE, DEFINED. — The word "term" in a legal sense
means a fixed and definite period of time which the law describes that an
officer may hold an office (Sueppel v. City Council of Iowa City, 136 N.W. 2D
523, quoting 67 CJS OFFICERS, secs. 42, 54[1l). According to Mechem, the
term of office is the period during which an office may be held. Upon the
expiration of the officer’s term, unless he is authorized by law to hold over,
his rights, duties and authority as a public officer must ipso facto cease
(Mechem, op. cit., Secs. 396-397). In the law on Public Officers, the most
natural and frequent method by which a public officer ceases to be such is
by the expiration of the term for which he was elected or appointed. The
question of when this event has occurred depends upon a number of
considerations, the most prominent of which, perhaps, are whether he was
originally elected or appointed for a definite term or for a term dependent
upon some act or event . . . (Mechem, op. cit., Sec. 384).

5. ID.; ID.; ID.; FIXING OF TERM COMPLETES REQUISITES FOR

APPOINTMENT IN CASE AT BAR. — The petitioner was appointed as general
manager pursuant to Resolution No. 13 (series of 1960 — approved on
January 15, 1960) of the Board of Directors of the national Resettlement and
Rehabilitation Administration (NARRA) as per authority of paragraph 2,
Section 8 of Republic Act 1160 which gives said Board the power "to appoint
and fix the term of office of the general manager . . ." A careful perusal of
the resolution points out the fact that the appointment is by itself incomplete
because of the lack of approval of the President of the Philippines to such
appointment. However, such appointment was made complete upon
approval of Resolution No. 24 (series of 1962 — approved March 15, 1962)
wherein the President submitted to the Board his "desire" to fix the term of
office of the petitioner up to the close of office hours on March 31, 1962. The
questioned resolution corrected whatever requisite lacking in the earlier
Resolution No. 13 of the respondent Board. Resolution No. 24, approved by
the respondent Board and pursuant to "the desire of the President" legally
fixed the term of office of petitioner as mandated by paragraph 2, Section 8
of Republic Act 1160.

6. ID.; ID.; ID.; FIXING OF TERM IN CASE AT BAR, NOT REMOVAL. — In the
case at bar, the term of office is not filed by law. However, the power to fix
the term is vested in the Board of Directors subject to the recommendation
of the Office of Economic Coordination and the approval of the President of
the Philippines. Resolution No. 24 (series of 1962) speaks of no removal but
an expiration of the term of office of the petitioner.

7. STATUTORY CONSTRUCTION; NO NEED OF CONSTRUCTION WHERE THE

STATUTE IS CLEAR. — The statute is undeniably clear. It is the rule in
statutory construction that if the words and phrases of a statute are not
obscure or ambiguous, its meaning and the intention of the legislature must
be determined from the language employed, and, where there is no
ambiguity in the words, there is no room for construction (Black on
Interpretation of Laws, Sec. 51). The courts may not speculate as to the
probable intent of the legislature apart from the words (Hondoras v. Soto, 8
Am. St., Rep. 744). The reason for the rule is that the legislature must be
presumed to know the meaning of words, to have used words advisedly and
to have expressed its intent by the use of such words as are found in the
statute (50 Am. Jur. p. 212).

DECISION

MAKASIAR, J.:

This petition for certiorari seeks to review the decision of the then Court of
Appeals (now Intermediate Appellate Court under BP 129) dated September
24, 1968, affirming the decision of the then Court of First Instance (now
Regional Trial Court), the dispositive portion of which is as
follows:chanrob1es virtual 1aw library

WHEREFORE, the judgment of the lower court insofar as it decrees the

dismissal of the present petition for mandamus is hereby affirmed, without
pronouncement as to costs" (p. 50, rec.)

The facts of the case are as follows:chanrob1es virtual 1aw library

On January 15, 1960, private respondents (as members of the Board of

Directors of the defunct National Resettlement and Rehabilitation
Administration created under Republic Act No. 1160, approved June 18,
1954 — NARRA) approved the following resolution:jgc:chanrobles.com.ph

"RESOLUTION NO. 13 (Series of 1960)

"RESOLVED, as it is hereby resolved, to appoint Mr. Bruno O. Aparri as

General Manager of the National Resettlement and Rehabilitation
Administration (NARRA) with all the rights, prerogatives and compensation
appurtenant thereto to take effect on January 16, 1960);

"RESOLVED FURTHER, as it is hereby resolved, to inform the President of the

Philippines of the above appointment of Mr. Aparri" (p. 2, rec.)

Pursuant thereto, private respondent Remedios O. Fortich, in her capacity as

Chairman of the NARRA Board, appointed petitioner Bruno O. Aparri as
reflected in the following letter:jgc:chanrobles.com.ph

"Manila, January 22, 1960

"Mr. Bruno O. Aparri

c/o NARRA, Manila

"SIR:jgc:chanrobles.com.ph

"You are hereby appointed as GENERAL MANAGER in the National

Resettlement and Rehabilitation Administration (NARRA) with compensation
at the rate of TWELVE THOUSAND (P12,000.00) PESOS per annum, the
appointment to take effect January 16, 1960 . . . REINSTATEMENT . . ." (p.
2, rec.)

The power of the Board of Directors of the NARRA to appoint the general
manager is provided for in paragraph (2), Section 8, Republic Act No. 1160
(approved June 18, 1954), to wit:jgc:chanrobles.com.ph

"Sec. 8. Powers and Duties of the Board of Directors. — The Board of

Directors shall have the following powers and duties: . . ..

"2) To appoint and fix the term of office of General Manager . . ., subject to
the recommendation of the Office of Economic Coordination and the approval
of the President of the Philippines, . . .. The Board, by a majority vote of all
members, may, for cause, upon recommendation of the Office of Economic
Coordination and with the approval of the President of the Philippines,
suspend and/or remove the General Manager and/or the Assistant General
Manager" (p. 46, rec., Emphasis supplied)

On March 15, 1962, the same Board of Directors approved the following
resolution:jgc:chanrobles.com.ph

"RESOLUTION NO. 24 (Series of 1962)

"WHEREAS, the Chairman of the Board has transmitted to the Board of

Directors the desire of the Office of the President, Malacañang, Manila, to fix
the term of office of the incumbent General Manager up to the close of office
hours on March 31, 1962, in accordance with the provision of Section 8, sub-
section 2 of R.A. No. 1160;
"NOW, THEREFORE, BE IT RESOLVED, as it is hereby resolved, that the
Board of Directors hereby fix, as it is hereby fixed, the term of office of the
incumbent General Manager of the National Resettlement and Rehabilitation
Administration (NARRA) to March 31, 1962" (pp. 6-7, rec., Emphasis
supplied)

Petitioner filed a petition for mandamus with preliminary injunction with the
then Court of First Instance of Manila on March 29, 1962. The petition
prayed to annul the resolution of the NARRA Board dated March 15, 1962, to
command the Board to allow petitioner to continue in office as General
Manager until he vacates said office in accordance with law and to sentence
the private respondents jointly and severally to pay the petitioner actual
damages in the sum of P95,000.00, plus costs.chanrobles virtual lawlibrary

On August 8, 1963, when the case was still pending decision in the lower
court, Republic Act No. 3844, otherwise known as the Agricultural Land
Reform Code, took effect. The said law abolished the NARRA (Sec. 73, R.A.
3844) and transferred its functions and powers to the Land Authority. On
October 21, 1963, the then Court of First Instance of Manila rendered
judgment, finding "that this case has become academic by reason of the
approval of the Agricultural Land Reform Code (Republic Act No. 3844) and
thereby dismissing the instant petition without pronouncement as to costs"
(p. 5, rec.)

On appeal to the then Court of Appeals, the appellate tribunal, speaking

through then Mr. Justice Antonio C. Lucero, affirmed the decision of the
lower court in dismissing the petition for mandamus. Pertinent provisions of
the decision are as follows:chanrob1es virtual 1aw library

x x x
"In the light of the foregoing facts, it is evident that Bruno O. Aparri
accepted the position of General Manager without fixed term and his
appointment is, in essence, terminable at the pleasure of the appointing
power which, in this case, is the Board of Directors. Where, as in the case at
bar, the appointing officer, that is, the Board of Directors, had fixed the term
of office of the incumbent Manager to end on March 31, 1962, the
replacement of Bruno O. Aparri is not removal but by reason of the term of
his office which is one of the recognized modes of terminating official
relations. Considering that the term of office of the General Manager of the
NARRA is not fixed by law nor has it been fixed by the Board of Directors at
the time of his appointment although it had the power to do so, it is obvious
that the term of office of herein petitioner Bruno O. Aparri expired on March
31, 1962 and his right to hold the said office was thereby extinguished. In
other words, Bruno O. Aparri’s cessation from office invokes no removal but
merely the expiration of the term of office which was within the power of the
Board of Directors to fix. Hence, Bruno O. Aparri continues only for so long
as the term of his office has not ended (Alba v. Hon. Jose N. Evangelista,
100 Phil. 683) [Decision of the Court of Appeals, pp. 48-39, rec., Emphasis
supplied].

The motion for reconsideration by petitioner in the then Court of Appeals

was denied on January 10, 1969.

On January 20, 1969, the petitioner filed a petition for certiorari to review
the decision of the then Court of Appeals dated September 24, 1968 (pp. 1-
41, rec.). The same was initially denied for lack of merit in a resolution dated
January 27, 1969 (p. 55, rec.); but on motion for reconsideration filed on
February 11, 1969, the petition was given due course (p. 66, rec.).

The only legal issue sought to be reviewed is whether or not Board

Resolution No. 24 (series of 1962) was a removal or dismissal of petitioner
without cause.
WE affirm. WE hold that the term of office of the petitioner expired on March
31, 1962.

A public office is the right, authority, and duty created and conferred by law,
by which for a given period, either fixed by law or enduring at the pleasure
of the creating power, an individual is invested with some portion of the
sovereign functions of the government, to be exercised by him for the
benefit of the public (Mechem, Public Offices and Officers, Sec. 1). The right
to hold a public office under our political system is therefore not a natural
right. It exists, when it exists at all, only because and by virtue of some law
expressly or impliedly creating and conferring it (Mechem, Ibid., Sec. 64).
There is no such thing as a vested interest or an estate in an office, or even
an absolute right to hold office. Excepting constitutional offices which
provide for special immunity as regards salary and tenure, no one can be
said to have any vested right in an office or its salary (42 Am. Jur. 881).

The National Resettlement and Rehabilitation Administration (NARRA) was

created under Republic Act No. 1160 (approved June 18, 1954), which
provides that:jgc:chanrobles.com.ph

"Sec. 2. NATIONAL RESETTLEMENT AND REHABILITATION ADMINISTRATION

— . . . there is hereby created a corporation to be known as National
Resettlement and Rehabilitation Administration hereafter referred to as
‘NARRA’ to perform under the supervision and control of the President of the
Philippines, through the Office of Economic Coordinator all the duties and
functions of the Bureau of Lands as provided for in Commonwealth Act
numbered Six Hundred and Ninety-One, as amended, and such other duties
as are hereinafter specified in this Act. It shall be headed by a General
Manager and an Assistant Manager who shall be appointed as hereinafter
provided" (Emphasis supplied).

Paragraph 2, Section 8 of Republic Act 1160 expressly gives to the Board of

Directors of the NARRA the power "to appoint and fix the term of office of
the general manager . . . subject to the recommendation of Economic
Coordination and the approval of the President of the Philippines" (Emphasis
supplied).

By "appointment" is meant the act of designation by the executive officer,

board or body, to whom that power has been delegated, of the individual
who is to exercise the functions of a given office (Mechem, op. cit., Sec.
102). When the power of appointment is absolute, and the appointee has
been determined upon, no further consent or approval is necessary, and the
formal evidence of the appointment, the commission, may issue at once.
Where, however, the assent or confirmation of some other officer or body is
required, the commission can issue or the appointment is complete only
when such assent or confirmation is obtained (People v. Bissell, 49 Cal.
407). To constitute an "appointment" to office, there must be some open,
unequivocal act of appointment on the part of the appointing authority
empowered to make it, and it may be said that an appointment to office is
made and is complete when the last act required of the appointing authority
has been performed (Molnar v. City of Aurora, 348 N.E. 2d 262, 38 Ill. App.
3d 580). In either case, the appointment becomes complete when the last
act required of the appointing power is performed (State v. Barbour, 53
Conn. 76, 55 Am. Rep. 65).

The petitioner was appointed as general manager pursuant to Resolution No.

13 (series of 1960 — approved on January 15, 1960) of the Board of
Directors. A careful perusal of the resolution points out the fact that the
appointment is by itself incomplete because of the lack of approval of the
President of the Philippines to such appointment. Thus, We note that
Resolution No. 13 states:chanrob1es virtual 1aw library

x x x
". . . RESOLVED FURTHER, as it is hereby resolved, to inform the President
of the Philippines of the above appointment of Mr. Aparri" (p. 2, rec.)

Presumably, the Board of Directors of the NARRA expected that such

appointment be given approval by the then President. Lacking such approval
by the President as required by the law (par. 2, Sec. 8 of R.A. 1160), the
appointment of petitioner was not complete. The petitioner can, at best, be
classified as a de facto officer because he assumed office "under color of a
known appointment or election, void because the officer was not eligible or
because there was a want of power in the electing body, or by reasons of
some defect or irregularity in its exercise, such ineligibility, want of power,
or defect being unknown to the public" (State v. Carroll, 38 Conn. 449, 9
Am. Rep. 409).

However, such appointment was made complete upon approval of Resolution

No. 24 (series of 1962 — approved March 15, 1962) wherein the President
submitted to the Board his "desire" to fix the term of office of the petitioner
up to the close of office hours on March 31, 1962. The questioned resolution
corrected whatever requisite lacking in the earlier Resolution No. 13 of the
respondent Board. Resolution No. 24, approved by the respondent Board
and pursuant to "the desire of the President" legally fixed the term of office
of petitioner as mandated by paragraph 2, Section 8 of Republic Act
1160.chanrobles virtual lawlibrary

The word "term" in a legal sense means a fixed and definite period of time
which the law describes that an officer may hold an office (Sueppel v. City
Council of Iowa City, 136 N.W. 2D 523, quoting 67 CJS OFFICERS, secs. 42,
54[1l). According to Mechem, the term of office is the period during which
an office may be held. Upon the expiration of the officer’s term, unless he is
authorized by law to hold over, his rights, duties and authority as a public
officer must ipso facto cease (Mechem, op. cit., Secs. 396-397). In the law
on Public Officers, the most natural and frequent method by which a public
officer ceases to be such is by the expiration of the term for which he was
elected or appointed. The question of when this event has occurred depends
upon a number of considerations, the most prominent of which, perhaps, are
whether he was originally elected or appointed for a definite term or for a
term dependent upon some act or event . . . (Mechem, op. cit., Sec. 384).

It is necessary in each case to interpret the word "term" with the purview of
statutes so as to effectuate the statutory scheme pertaining to the office
under examination (Barber v. Blue, 417 P. 2D 401, 51 Cal. Rptr. 865, 65
C.2d N5). In the case at bar, the term of office is not filed by law. However,
the power to fix the term is vested in the Board of Directors subject to the
recommendation of the Office of Economic Coordination and the approval of
the President of the Philippines. Resolution No. 24 (series of 1962) speaks of
no removal but an expiration of the term of office of the
petitioner.chanrobles law library

The statute is undeniably clear. It is the rule in statutory construction that if

the words and phrases of a statute are not obscure or ambiguous, its
meaning and the intention of the legislature must be determined from the
language employed, and, where there is no ambiguity in the words, there is
no room for construction (Black on Interpretation of Laws, Sec. 51). The
courts may not speculate as to the probable intent of the legislature apart
from the words (Hondoras v. Soto, 8 Am. St., Rep. 744). The reason for the
rule is that the legislature must be presumed to know the meaning of words,
to have used words advisedly and to have expressed its intent by the use of
such words as are found in the statute (50 Am. Jur. p.
212).chanroblesvirtualawlibrary

Removal entails the ouster of an incumbent before the expiration of his term
(Manalang v. Quitoriano, 50 O.G. 2515). The petitioner in this case was not
removed before the expiration of his term. Rather, his right to hold the office
ceased by the expiration on March 31, 1962 of his term to hold such office.

WHEREFORE, THE DECISION APPEALED FROM IS HEREBY AFFIRMED.

WITHOUT COSTS.

SO ORDERED.
 SECOND DIVISION

G.R. No. 78585 July 5, 1989

JOSE ANTONIO MAPA, Petitioner, vs. HON. JOKER ARROYO, in his

Capacity as Executive Secretary, and LABRADOR DEVELOPMENT
CORPORATION, Respondents.

Francisco T. Mamaug for petitioner.chanrobles virtual law library

Emiliano S. Samson for private respondent.

REGALADO, J.:

We are called upon once again, in this special civil action for certiorari, for a
pronouncement as to whether or not there has been grave abuse of
discretion amounting to lack or excess of jurisdiction on the part of the
executive branch of Government, particularly in the adjudication of a
controversy originally commenced in one of its regulatory
agencies.chanroblesvirtualawlibrary chanrobles virtual law library

Petitioner herein seeks the reversal of the decision of the Office of the
President, rendered by the Deputy Executive Secretary on April 24,1987, 1
which dismissed his appeal from the resolution of the Commission Proper,
Human Settlements Regulatory Commission (HSRC, for short), promulgated
on January 10, 1986 and affirming the decision of July 3, 1985 of the Office
of Adjudication and Legal Affairs (OAALA, for brevity) of HSRC. Petitioner
avers that public respondent "gravely transcended the sphere of his
discretion" in finding that Presidential Decree No. 957 is inapplicable to the
contracts to sell involved in this case and in consequently dismissing the
same. 2chanrobles virtual law library

The established facts on which the assailed decision is based are set out
therein as follows:

Records disclose that, on September 18, 1975, appellant Jose Antonio Mapa
and appellee Labrador Development Corporation (Labrador, for short),
owner/developer of the Barangay Hills Subdivision in Antipolo, Rizal, entered
into two contracts to sell over lots 12 and 13 of said subdivision. On different
months in 1976, they again entered into two similar contracts involving lots
15 and 16 in the same subdivision. Under said contracts, Mapa undertook to
make a total monthly installment of P2,137.54 over a period of ten (10)
years. Mapa, however, defaulted in the payment thereof starting December
1976, prompting Labrador to send to the former a demand letter, dated May
5, 1977, giving him until May 18, 1977, within which to settle his unpaid
installments for the 4 lots amounting to P15,411.66, with a warning that
non-payment thereof will result in the cancellation of the four (4) contracts.
Despite receipt of said letter on May 6,1977, Mapa failed to take any action
thereon. Labrador subsequently wrote Mapa another letter, dated June 15,
1982, which the latter received on June 21, 1982, reminding him of his total
arrears amounting to P180,065.27 and demanding payment within 5 days
from receipt thereof, but which letter Mapa likewise ignored. Thus, on
August 16, 1982, Labrador sent Mapa a notarial cancellation of the four (4)
contracts to sell, which Mapa received on August 20, 1982. On September
10, 1982, however, Mapa's counsel sent Labrador a letter calling Labrador's
attention to, and demanding its compliance with, Clause 20 of the four (4)
contracts to sell which relates to Labrador's obligation to provide, among
others, lighting/water facilities to subdivision lot
buyers.chanroblesvirtualawlibrary chanrobles virtual law library

On September 10, 1982, Labrador issued a certification holding the

implementation of the letter dated August 16, 1982 (re notarial cancellation)
pending the complete development of road lot cul de sac within the
properties of Mapa at Barangay Hills Subdivision.' Thereafter on October
25,1982, Labrador sent Mapa a letter informing him 'that the construction of
road, sidewalk, curbs and gutters adjacent to Block 11 Barangay Hills
Subdivision are already completed' and further requesting Mapa to 'come to
our office within five (5) days upon receipt of this letter to settle your
account.' chanrobles virtual law library

On December 10, 1982, Mapa tendered payment by means of a check in the

amount of P 2,137.54, but Labrador refused to accept payment for the
reason that it was agreed 'that after the development of the cul de sac, he
(complainant) will pay in full the total amount due,' which Labrador
computed at P 260,138.61. On December 14, 1982, Mapa wrote Labrador
claiming that 'you have not complied with the requirements for water and
light facilities in lots 12, 13, 15 & 16 Block 2 of Barangay Hills Subdivision.'
The following day, Mapa filed a complaint against Labrador for the latter's
neglect to put 1) a water system that meets the minimum standard as
specified by HSRC, and 2) electrical power supply. By way of relief, Mapa
requested the HSRC to direct Labrador to provide the facilities
aforementioned, and to issue a cease and desist order enjoining Labrador
from cancelling the contracts to sell.chanroblesvirtualawlibrarychanrobles
virtual law library

After due hearing/investigation, which included an on-site inspection of the

subdivision, OAALA, issued its decision of July 3, 1985, dismissing the
complaint and declaring that after the lapse of 5 years from complainant's
default respondent had every right to rescind the contract pursuant to
Clause 7 thereof. . .chanroblesvirtualawlibrary chanrobles virtual law library

Per its resolution of January 10, 1986, the Commission Proper, HSRC,
affirmed the aforesaid OAALA decision. 3chanrobles virtual law library

It was petitioner's adamant submission in the administrative proceedings

that the provisions of Presidential Decree No. 957 4 and implementing rules
form part of the contracts to sell executed by him and respondent
corporation, hence the obligations imposed therein had to be complied with
by Labrador within the period provided. Since, according to petitioner,
Labrador failed to perform the aforementioned obligations, it is precluded
from rescinding the subject contracts to sell since petitioner consequently
did not incur in delay on his part.chanroblesvirtualawlibrary chanrobles
virtual law library

Such intransigent position of petitioner has not changed in the petition at bar
and unyielding reliance is placed on the provisions of Presidential Decree No.
957 and its implementing rules. The specific provisions of the Decree which
are persistently relied upon read:

SEC. 20. Time of Completion. - Every owner or developer shall construct and
provide the facilities, improvements, infrastructures and other forms of
development, including water supply and lighting facilities, which are offered
and indicated in the approved subdivision or condominium plans, brochures,
prospectus, printed matters letters or in any form of advertisements, within
one year from the date of the issuance of the license for the subdivision or
condominium project or such other period of time as may be fixed by the
Authority.chanroblesvirtualawlibrary chanrobles virtual law library

SEC. 21. Sales Prior to Decree. - In cases of subdivision lots or condominium

units sold or disposed of prior to the effectivity of this Decree, it shall be
incumbent upon the owner or developer of the subdivision or condominium
project to complete compliance with his or its obligations as provided in the
preceding section within two years from the date of this Decree unless
otherwise extended by the Authority or unless an adequate performance
bond is filed in accordance with Section 6 hereof.chanroblesvirtualawlibrary
chanrobles virtual law library

Failure of the owner or developer to comply with the obligations under this
and the preceding provisions shall constitute a violation punishable under
Sections 38 and 39 of this Decree.
Rule V of the implementing rules, on the other hand, requires two (2)
sources of electric power, two (2) deep-well and pump sets with a specified
capacity and two standard fire hose flows with a capacity of 175 gallons per
minute. 5chanrobles virtual law library

The provision, in said contracts to sell which, according to petitioner,

includes and incorporates the aforequoted statutory provisions, is Clause 20
of said contracts which provides:

Clause 20. SUBDIVISION DEVELOPMENT - To insure the physical

development of the subdivision, the SELLER hereby obliges itself to provide
the individual lot buyer with the following: chanrobles virtual law library

a) PAVED ROADS chanrobles virtual law library

b) UNDERGROUND DRAINAGE chanrobles virtual law library

c) CONCRETE CURBS AND GUTTERS chanrobles virtual law library

d) WATER SYSTEM chanrobles virtual law library

e) PARK AND OPEN SPACE chanrobles virtual law library

These improvements shall apply only to the portions of the subdivision which
are for sale or have been sold. All improvements except those requiring the
services of a public utility company or the government shall be completed
within a period of three (3) years from date of this contract. Failure by the
SELLER to reasonably comply with the above schedule shall permit the
BUYER/ S to suspend his monthly installments without any penalties or
interest charges until such time that these improvements shall have been
made as scheduled. 6chanrobles virtual law library

As recently reiterated, it is jurisprudentially settled that absent a clear,

manifest and grave abuse of discretion amounting to want of jurisdiction, the
findings of the administrative agency on matters falling within its
competence will not be disturbed by the courts. 7Specifically with respect to
factual findings, they are accorded respect, if not finality, because of the
special knowledge and expertise gained by these tribunals from handling the
specific matters falling under their jurisdiction. Such factual findings may be
disregarded only if they "are not supported by evidence; where the findings
are vitiated by fraud, imposition or collusion; where the procedure which led
to the factual findings is irregular; when palpable errors are committed; or
when grave abuse of discretion, arbitrariness or capriciousness is manifest."
8 chanrobles virtual law library

A careful scrutiny of the records of the instant case reveals that the
circumstances thereof do not fag under the aforesaid excepted cases, with
the findings duly supported by the evidence.chanroblesvirtualawlibrary
chanrobles virtual law library

Petitioner's insistence on the applicability of Presidential Decree No. 957

must be rejected. Said decree was issued on July 12, 1976 long after the
execution of the contracts involved. Obviously and necessarily, what
subsequently were statutorily provided therein as obligations of the owner or
developer could not have been intended by the parties to be a part of their
contracts. No intention to give restrospective application to the provisions of
said decree can be gathered from the language thereof. Section 20, in
relation to Section 21, of the decree merely requires the owner or developer
to construct the facilities, improvements, infrastructures and other forms of
development but only such as are offered and indicated in the approved
subdivision or condominium plans, brochures, prospectus, printed matters,
letters or in any form of advertisements. Other than what are provided in
Clause 20 of the contract, no further written commitment was made by the
developer in this respect. To read into the contract the matters desired by
petitioner would have the law impose additional obligations on the parties to
a contract executed before that very law existed or was
contemplated.chanroblesvirtualawlibrary chanrobles virtual law library

We further reject petitioner's strained and tenuous application of the so-

called doctrine of last antecedent in the interpretation of Section 20 and,
correlatively, of Section 21. He would thereby have the enumeration of
"facilities, improvements, infrastructures and other forms of development"
interpreted to mean that the demonstrative phrase "which are offered and
indicated in the approved subdivision plans, etc." refer only to "other forms
of development" and not to "facilities, improvements and infrastructures."
While this subserves his purpose, such bifurcation whereby the supposed
adjectival phrase is set apart from the antecedent words, is illogical and
erroneous. The complete and applicable rule is ad proximum antecedens fiat
relatio nisi impediatur sentencia. 9 Relative words refer to the nearest
antecedent, unless it be prevented by the context. In the present case, the
employment of the word "and" between "facilities, improvements,
infrastructures" and "other forms of development," far from supporting
petitioner's theory, enervates it instead since it is basic in legal hermeneutics
that "and" is not meant to separate words but is a conjunction used to
denote a joinder or union.chanroblesvirtualawlibrary chanrobles virtual law
library

Thus, if ever there is any valid ground to suspend the monthly installments
due from petitioner, it would only be based on non-performance of the
obligations provided in Clause 20 of the contract, particularly the alleged
non-construction of the cul-de-sac. But, even this is unavailing and is
obviously being used only to justify petitioner's default. The on-site
inspection of the subdivision conducted by the OAALA and its subsequent
report reveal that Labrador substantially complied with its obligation.
10chanrobles virtual law library
Furthermore, the initial non-construction of the cul-de-sac, as private
respondent Labrador explained, was because petitioner Mapa requested the
suspension of its construction since his intention was to purchase the
adjoining lots and thereafter enclose the same. 11 If these were not true,
petitioner would have invoked that supposed default in the first instance. As
the OAALA noted, petitioner "stopped payments of his monthly obligations as
early as December, 1976, which is a mere five months after the effectivity of
P.D. No. 957 or about a year after the execution of the contracts. This
means that respondent still has 1 and 1/2 years to comply with its legal
obligation to develop the subdivision under said P.D. and two years to do so
under the agreement, hence, it was improper for complainant to have
suspended payments in December, 1976 on the ground of non-development
since the period allowed for respondent's obligation to undertake such
development has not yet expired." 12 chanrobles virtual law library

ON THE FOREGOING CONSIDERATIONS, the petition should be, as it is

hereby DISMISSED.chanroblesvirtualawlibrary chanrobles virtual law library

SO ORDERED.
 EN BANC

[G.R. No. L-33487. May 31, 1971.]

THE PEOPLE OF THE PHILIPPINES, Plaintiff-Appellant, v. MAXIMO

MARTIN, CANDIDO MARTIN and RODOLFO HIGASHI, Defendants-
Appellees.

Solicitor General Felix V. Makasiar, Assistant Solicitor General Isidro

C. Borromeo and Solicitor Dominador L. Quiroz, for Plaintiff-
Appellant.

Marianito Licudan for Defendants-Appellees.

SYLLABUS

1. CRIMINAL LAW; COMMONWEALTH ACT NO. 613 (IMMIGRATION ACT OF

1940); ACT OF BRINGING INTO, ACT OF LANDING, ACT OF CONCEALING OR
ACT OF HARBORING ILLEGAL ENTRANTS; CONSTITUTE FOUR SEPARATE
ACTS; EACH ACT POSSESSED OF DISTINCTIVE, DIFFERENT AND DISPARATE
MEANING. — Scanning Section 46 in its entire context, it is at once
apparent, there being no indication to the contrary, that the act of bringing
into, the act of landing, the act of concealing, the act of harboring, are four
separate acts, each act possessing its own distinctive, different and
disparate meaning. "Bring into" has reference to the act of placing an alien
within the territorial waters of the Philippines. "Land" refers to the act of
putting ashore an alien. "Conceal" refers to the act of hiding an alien.
"Harbor" refers to the act of giving shelter and aid to an alien. It is of course
understood that the alien brought into or landed in the Philippines or
concealed or harbored, is an "alien not duly admitted by any immigration
officer or not lawfully entitled to enter or reside within the Philippines under
the terms of the immigration laws."cralaw virtua1aw library

2. REMEDIAL LAW; CRIMINAL PROCEDURE; PROSECUTION OF OFFENSES

CONTINUING OFFENSE, GENERAL CONCEPT. — The general concept of a
continuing offense is that the essential ingredients of the crime are
committed in different provinces. An example is the complex offense of
kidnapping with murder if the victim is transported through different
provinces before he is actually killed. In such case, the CFI of any province
in which any one of the essential elements of said complex offense has been
committed, has jurisdiction to take cognizance of the offense.

3. STATUTORY CONSTRUCTION; WORD "OR" INTERPRETED; WHEN "OR"

MAY READ "AND." — The rule is too well settled to require any citation of
authorities that the word "or" is a disjunctive term signifying dissociation and
independence of one thing from each of the other things enumerated unless
the context requires a different interpretation While in the interpretation of
statutes, ‘or’ may read ‘and’ and vice versa, it is so only when the context so
requires.

DECISION

CASTRO, J.:

This appeal by the People of the Philippines from the order dated August 2,
1968 of the Court of First Instance of La Union dismissing criminal case A-
392 on the ground of lack of jurisdiction, was certified by the Court of
Appeals to this Court, the issues raised being purely of law.

The central issue is the proper interpretation of the provisions of section 46

of Commonwealth Act 613, as amended by Rep. Act 144 and Rep. Act 827,
otherwise known as the Philippine Immigration Act.

The defendants Maximo Martin, Candido Martin and Rodolfo Higashi were
charged in criminal case A-392 of the CFI of La Union with a violation of
section 46 of Com. Act 613, as amended. The information dated January 12,
1968 recites as follows:jgc:chanrobles.com.ph

"The undersigned Acting-State Prosecutor, and Asst. Provincial Fiscal accuse

MAXIMO MARTIN, CANDIDO MARTIN and RODOLFO HIGASHI of violation of
Sec. 46 of Commonwealth Act No. 613 otherwise known as Philippine
Immigration Act of 1940, as amended by Republic Act No. 827, committed
as follows:jgc:chanrobles.com.ph

"That on or about the 22nd day of September, 1966, in the Municipality of

Sto. Tomas, Province of La Union, Philippines, and within the jurisdiction of
this Honorable Court, the above-named accused, conspiring and
confederating together and mutually helping one another and in active aid
with Filipino nationals who are presently charged before the Court of First
Instance of Bulacan in Crim. Case No. 6258-M, did then and there wilfully,
unlawfully and feloniously bring in and carry into the Philippines thirty nine
(39) Chinese aliens who traveled by the Chinese vessel ‘Chungking’ from the
port of Hongkong and who are not duly admitted by any immigration officer
or not lawfully entitled to enter the Philippines, and from the Chinese vessel
‘Chungking,’ accused took delivery, loaded, and ferried the Chinese aliens in
the vessel ‘MARU XI’ owned, operated, under the charge and piloted by all
the herein accused from outside into the Philippines, surreptitiously landing
the said aliens at Barrio Damortis, Sto. Tomas, La Union, Philippines, which
place of landing is not a duly authorized port of entry in the
Philippines."cralaw virtua1aw library

After the thirty-nine (39) illegal entrants were landed in barrio Damortis, as
charged in the indictment, they were loaded in a car and two jeepneys for
transport to Manila. They did not however reach their destination because
they were intercepted by Philippine Constabulary agents in Malolos, Bulacan.

For concealing and harboring these thirty-nine aliens, Jose Pascual, Filipinas
Domingo, Jose Regino, Alberto Bunyi, Emerdoro Santiago and Ibarra
Domingo were charged before the Court of First Instance of Bulacan in
criminal case 6258-M. The amended information in the said criminal case
reads as follows:jgc:chanrobles.com.ph

"The undersigned Provincial Fiscal accuses Jose Pascual, Filipinas Domingo,

Jose Regino, Alberto Bunyi, Emerdoro Santiago and Ibarra Domingo of the
violation of Section 46 of Commonwealth Act No. 613, otherwise known as
the Philippine Immigration Act of 1940, as amended by Republic Act No.
827, committed as follows:jgc:chanrobles.com.ph

"That on or about the 22nd day of September, 1966, in the municipality of

Malolos, Province of Bulacan, Philippines, and within the jurisdiction of this
Honorable Court, the above named accused and several others whose
identities are still unknown, conspiring and confederating and aiding one
another, did then and there wilfully, unlawfully and feloniously, bring,
conceal and harbor 39 Chinese aliens not duly admitted by any immigration
officer or not lawfully entitled to enter or reside within the Philippines under
the terms of the Immigration Laws, whose names are as follows: Hung
Chang Cheong, Hung Ling Choo, Sze Lin Chuk, Chian Giok Eng, Mung Bun
Bung, Lee Chin Kuo, Gan Kee Chiong, See Sei, Hong Chun, Go Kian Sim,
Kho Ming Jiat, See Lee Giok, Uy Chin Chu, Go Su Kim, Go Chu, Chiang Tian,
Chua Tuy Tee, Sy Jee Chi, Sy Sick Bian, Sy Kang Liu, Ang Chi Hun, Kho Chu,
Chua Hong, Lim Chin Chin, Ang Lu Him, William Ang, Sy Siu Cho, Ang Puy
Hua, Sy Chi Tek, Lao Sing Tee, Cua Tiong Bio, Kho Lee Fun, Kho Lee Fong,
Ang Giok, Sy Si Him, Sy Lin Su, Lee Hun, Sy Siong Go and Sy Cho Lung,
who previously earlier on the same day, thru the aid, help and manipulation
of the abovenamed accused, were loaded and ferried to the shore from the
Chinese vessel ‘CHIUNG HING’ in a fishing vessel known as the ‘MARU XI’
and landed at barrio Damortis, Sto. Tomas, La Union, and immediately upon
landing were loaded in 3 vehicles an automobile bearing plate No. H-3812-
Manila driven and operated by Emerdoro Santiago and 2 jeepneys with
plates Nos. S-27151-Philippines, 1966 and S-26327-Philippines, 1966 driven
and operated by Jose Regino and Alberto Bunyi, respectively, and brought
southwards along the MacArthur highway and upon reaching Malolos,
Bulacan, were apprehended by the agents of the Philippine Constabulary,
the latter confiscating and impounding the vehicles used in carrying and
transporting the said aliens and including the sum of P15,750.00 found in
the possession of the accused Jose Pascual which was used and/or to be
used in connection with the commission of the crime charged."cralaw
virtua1aw library

On July 1, 1968 the three accused in criminal case A-392 filed a "motion to
dismiss" [quash] on the ground that the CFI of La Union has no jurisdiction
over the offense charged in the said indictment as the court had been pre-
empted from taking cognizance of the case by the pendency in the CFI of
Bulacan of criminal case 6258-M. This motion was opposed by the
prosecution.

On August 2, 1968 the Court of First Instance of La Union dismissed the

case, with costs de oficio. The Government’s motion for reconsideration was
denied; hence the present recourse.

In this appeal the Government contends that the lower court erred (1) "in
declaring that the information in the instant case [A-392] alleges conspiracy
between the accused herein and the persons accused in criminal case 6258-
M of the Court of First Instance of Bulacan;" (2) "in holding that by reason of
said allegation of conspiracy in the information in this case [A-392], the act
of one of the accused in both criminal cases is deemed the act of all the
accused and that as a consequence all those accused in the two cases are
liable and punishable for one offense or violation of section 46 of
Commonwealth Act 613, as amended, although committed by and through
the different means specified in said section;" (3) "in holding that the
violation of section 46 of Commonwealth Act 613, as amended, committed
by the accused in both criminal cases partakes of the nature of a transitory
or continuing offense;" and (4) "in declaring that it lacks jurisdiction and is
now excluded from taking cognizance of this case [A-392] and in dismissing
it."cralaw virtua1aw library

Section 46 of Commonwealth Act 613, as amended, reads as

follows:jgc:chanrobles.com.ph

"Any individual who shall bring into or land in the Philippines or conceal or
harbor any alien not duly admitted by any immigration officer or not lawfully
entitled to enter or reside within the Philippines under the terms of the
immigration laws, or attempts, conspires with, or aids another to commit
any such act, and any alien who enters the Philippines without inspection
and admission by the immigration officials, or obtains entry into the
Philippines by wilful, false, or misleading representation or wilful
concealment of a material fact, shall be guilty of an offense and upon
conviction thereof, shall be fined not more than ten thousand pesos,
imprisoned for not more than ten years, and deported if he is an alien.

"If the individual who brings into or lands in the Philippines or conceals or
harbors any alien not duly admitted by any immigration officer or not
lawfully entitled to enter or reside herein, or who attempts, conspires with or
aids another to commit any such act, is the pilot, master, agent, owner,
consignee, or any person in charge of the vessel or aircraft which brought
the alien into the Philippines from any place outside thereof, the fine
imposed under the first paragraph hereof shall constitute a lien against the
vessel or aircraft and may be enforced in the same manner as fines are
collected and enforced against vessels under the customs laws: Provided,
however, That if the court shall in its discretion consider forfeiture to be
justified by the circumstances of the case, it shall order, in lieu of the fine
imposed, the forfeiture of the vessel or aircraft in favor of the Government,
without prejudice to the imposition of the penalty of imprisonment provided
in the preceding paragraph."cralaw virtua1aw library

To be stressed at the outset is the significant repetition, in the second

paragraph above-quoted, of basic words and concepts set forth in the first
paragraph. Thus, the first paragraph begins with: "Any individual who shall
bring into or land, in the Philippines or conceal or harbor any alien . . .;" the
second paragraph starts with: "If the individual who brings into or lands in
the Philippines or conceals or harbors any alien . . ." (Emphasis ours)
Scanning section 46 in its entire context, it is at once apparent, there being
no indication to the contrary, that the act of bringing into, the act of landing,
the act of concealing, the act of harboring, are four separate acts, each act
possessing its own distinctive, different and disparate meaning. "Bring into"
has reference to the act of placing an alien within the territorial waters of the
Philippines. "Land" refers to the act of putting ashore an alien. "Conceal"
refers to the act of hiding an alien. "Harbor" refers to the act of giving
shelter and aid to an alien. It is of course understood that the alien brought
into or landed in the Philippines, or concealed or harbored, is an "alien not
duly admitted by any immigration officer or not lawfully entitled to enter or
reside within the Philippines under the, terms of the immigration laws." 1

The rule is too well-settled to require any citation of authorities that the
word "or" is a disjunctive term signifying dissociation and independence of
one thing from each of the other things enumerated unless the context
requires a different interpretation. While in, the interpretation of statutes,
‘or’ may read ‘and’ and vice versa, it is so only when the context so requires.
2

A reading of section 46 above-quoted does not justify giving the word "or" a
non-disjunctive meaning.
Bringing into and landing in the Philippines of the 39 aliens were completed
when they were placed ashore in the barrio of Damortis on September 22,
1966. The act of the six accused in criminal case 6258-M before the CFI of
Bulacan of transporting the aliens constitutes the offenses of "concealing"
and "harboring," as the terms are used in section 46 of our Immigration
Laws. The court a quo in point of fact accepted this interpretation when it
observed that "it could happen that different individuals, acting separately
from, and independently of each other could violate and be criminally liable
for violation of the Immigration Act, if each individual independently
commits any of the means specified under said section 46 of Commonwealth
Act 613, as amended by Republic Act 827. For example, an individual acting
independently, with the use of a motor boat, brings into the country and
lands several Chinese aliens and after doing so he goes away. There is no
question that said individual violated said section 46 of the Immigration Act,
for bringing into and landing in the Philippines some aliens. Now, after the
said landing of the said aliens another individual also acting independently,
without connection whatsoever with the one who brought and landed the
said aliens, and knowing that the Chinese aliens have no right to enter the
country or unlawfully conceals or harbors the said aliens. There is no doubt
that this person is also liable and punishable for another separate violation
of said section 46 of Commonwealth Act 613."cralaw virtua1aw library

This notwithstanding, the court dismissed this case on the ground that there
is an express allegation in the information of connivance between the three
defendants-appellees herein and the six accused in criminal case 6258-M of
the CFI of Bulacan. In our view the court a quo incurred in error in reaching
this conclusion. This error, which is one of misinterpretation of the
phraseology of the information, was induced by a mis-reading of the first
portion of the said information which states as
follows:jgc:chanrobles.com.ph

"That on or about the 22nd day of September, 1966, in the Municipality of

Sto. Tomas, Province of La Union, Philippines, and within the jurisdiction of
this Honorable Court, the above-named accused, conspiring and
confederating together and mutually helping one another and in active aid
with Filipino nationals who are presently charged before the CFI of Bulacan
in Crim. Case No. 6258-M, did then and there wilfully, unlawfully and
feloniously bring in and ferry into the Philippines thirty-nine (39) Chinese
aliens who traveled by the Chinese vessel ‘Chungking’ from the port of
Hongkong . . ." (Emphasis ours)

It is crystal-clear that the words, "the above-named accused, conspiring and

confederating together and mutually helping one another," can refer only
and exclusively to the three persons accused in this case, namely Maximo
Martin, Candido Martin and Rodolfo Higashi. While the unfortunate insertion
in the information of the clause reading, "and in active aid with Filipino
nationals who are presently charged before the CFI of Bulacan in Criminal
Case No. 6258-M," may yield the implication that the three defendants-
appellees and the six accused in criminal case 6258-M before the CFI of
Bulacan, may have agreed on the sequence of the precise steps to be taken
in the smuggling of the Chinese aliens and on the identities of the persons
charged with consummating each step, still there seems to be no question
that the three defendants-appellees are charged only with bringing in and
landing on Philippine soil the thirty-nine aliens, whereas the six accused in
criminal case 6258-M are charged only with concealing and harboring the
said aliens. It is technically absurd to draw a conclusion of conspiracy among
the three defendants-appellees and the six accused in the criminal case
6258-M before the CFI of Bulacan who are not named defendants in this
case.

At all events, the words, "and in active aid with Filipino nationals who are
presently charged before the CFI of Bulacan in Crim. Case No. 6258-M," can
and should be considered as a surplusage, and may be omitted from the
information without doing violence to or detracting from the intendment of
the said indictment. These words should therefore be disregarded.

Finally, the court a quo erred in maintaining the view that the acts of
bringing into and landing aliens in the Philippines illegally and the acts of
concealing and harboring them constitute one "transitory and continuing
violation." We here repeat and emphasize that the acts of bringing into and
landing an alien in the Philippines are completed once the alien is brought
ashore on Philippine territory, and are separate and distinct from the acts of
concealing and harboring such alien. If the aliens in this case were
apprehended immediately after landing, there would be no occasion for
concealing and harboring them. Upon the other hand, one set of persons
may actually accomplish the act of bringing in and/or landing aliens in the
Philippines, and another completely different set of persons may conceal
and/or harbor them. The general concept of a continuing offense is that the
essential ingredients of the crime are committed in different provinces. An
example is the complex offense of kidnapping with murder if the victim is
transported through different provinces before he is actually killed. In such
case, the CFI of any province in which any one of the essential elements of
said complex offense has been committed, has jurisdiction to take
cognizance of the offense. 3

The conclusion thus become ineluctable that the court a quo erred in
refusing to take cognizance of the case at bar.

ACCORDINGLY, the order of the Court of First Instance of La Union of August

2, 1968, dismissing this case and cancelling the bail bond posted by the
three defendants-appellees, is set aside, and this case is remanded for
further proceedings in accordance with law.

Concepcion, C.J., Reyes, J.B.L., Dizon, Makalintal, Zaldivar, Fernando,

Teehankee, Barredo and Villamor, JJ., concur.

Makasiar, J., did not take part.

 EN BANC

[G.R. No. L-30761. July 11, 1973.]

THE SAN MIGUEL CORPORATION, Petitioner, v. THE MUNICIPAL

COUNCIL, THE MAYOR, and THE MUNICIPAL TREASURER OF THE
MUNICIPALITY OF MANDAUE, PROVINCE OF CEBU, Respondents.

Gadioma & Josue for Petitioner.

Acting City Fiscal Lawrence A. Parawan for Respondents.

DECISION

ANTONIO, J.:

Petition for writ of certiorari to review the judgment of the Court of First
Instance of Cebu, in Civil Case No. R-10631, upholding the validity of
Ordinance No. 23, series of 1966, as amended by Ordinance No. 25, series
of 1967, of the Municipality of Mandaue, Cebu, imposing "a graduated
quarterly fixed tax based on the gross value of money or actual market
value at the time of removal of the manufactured articles from their factories
or other manufacturing or processing establishments."cralaw virtua1aw
library
In enacting the said ordinances, the municipal council of Mandaue invoked
as basis of its authority Republic Act No. 2264 (Local Autonomy Act).

The relevant portion of Section 1, Ordinance No. 23 (1966), as amended by

Ordinance No. 25 (1967), provides as follows:jgc:chanrobles.com.ph

"SECTION 1. Municipal License Tax On Proprietors Or Operators Of . . .

Breweries, . . . Proprietors or operators of . . . breweries, . . . within the
territorial limits of this municipality shall pay a graduated quarterly fixed tax
based on the gross value in money or actual market value at the time of
removal, of the manufactured articles from their factories . . . during the
preceding quarter in accordance with the following schedules: . . .
:chanrob1es virtual 1aw library

CLASS QUARTERLY LICENSE TAX

P160.00 and P0.30 for

QUARTERLY GROSS VALUE each P1,000 or fraction

thereof in excess

1 P37,500.00 or over of P37,500.00 gross value.

2 P31,250.00 to P37,499.99 P158.00 per quarter

3 25,000.00 to 31,249.99 132.00" "

4 20,000.00 to 24,999.99 105.00" "

5 15,000.00 to 19,999.99 83.00" "

6 12,500.00 to 14,999.99 63.00" "

7 10,000.00 to 12,499.99 50.00" "

8 8,750.00 to 9,999.99 42.00" "

9 7,500.00 to 8,749.99 37.00" "

10 6,500.00 to 7,499.99 31.00" "

11 5,500.00 to 6,499.99 27.00" "

12 4,500.00 to 5,499.99 23.00" "

13 3,750.00 to 4,499.99 19.00" "

14 3,000.00 to 3,799.99 16.00" "

15 2,500.00 to 2,999.99 13.00" "

16 2,000.00 to 2,499.99 11.00" "

17 1,750.00 to 1,999.99 9.00" "

18 1,500.00 to 1,749.99 8.00" "

19 1,250.00 to 1,499.99 7.00" "

20 Less than P1,250.00 5.00" "

The pertinent portion of Section 2 of Ordinance No. 23 which was not

amended by Ordinance No. 25 states:jgc:chanrobles.com.ph

"Payment of Municipal License Tax. — A fixed tax imposed in this ordinance

must first be paid before any person can engage in business and is payable
for each taxable business; . . .

"The graduated fixed tax provided in this ordinance shall be paid at the
Office of the Municipal Treasurer quarterly, on or before the twentieth of
January, April, July and October; . . . Provided further, That as regards
businesses already operating at the time this ordinance takes effect, the tax
for the initial quarter shall be paid pursuant to the provisions of this
ordinance and shall be based on the gross value in money during the quarter
immediately preceding,. . . .

"Within the time fixed for the payment of the license taxes herein imposed,
the taxpayers shall prepare and file with the Municipal Treasurer, a sworn
statement of the gross value in money during the preceding quarter on the
basis of which the tax shall be assessed and collected . . .

The basic Ordinance was No. 88, 1 which took effect on September 25,
1962, but this was amended by Ordinance No. 23 (January 1, 1967), and by
Ordinance No. 25 (January 1, 1968).

Petitioner, a domestic corporation engaged in the business of manufacturing

beer and other products with a subsidiary manufacturing plant in Mandaue,
Cebu, since December, 1967, paid the taxes prescribed in the aforesaid
ordinance, under protest thus: P309.40 on January 22, 1968 and P5,171.80
as of July 18, 1968, computed respectively "on the basis of 70,412 and
2,203.070 cases of beer manufactured and removed from said Mandaue
plant, multiplied by P7.60 which is the prevailing market price (wholesaler’s
price) per case of beer at the time of the removal."

Claiming that it is adversely affected by the ordinance, which in its view was
beyond the power and authority of the municipality to enact, petitioner
brought and action in the Court of First Instance of Cebu, Branch VI, for the
annulment of said ordinance.

Petitioner contends that (1) the phrase "gross value in money or actual
market value" employed in the questioned ordinance clearly referred to
"sales or market price" of the articles or commodities manufactured thereby
indicating a manifest intent to impose a tax based on sales, and (2) that to
impose a tax upon the privilege of manufacturing beer, when the amount of
the tax is measured by the gross receipts from its sales of beer, is the same
as imposing a tax upon the product itself.

Respondents upon the other hand insist that the tax imposed in the
questioned ordinance (1) is not a percentage tax or a tax on the sales of
beer but is a tax on the privilege to engage in the business of manufacturing
beer, and the phrase "actual market value" was merely employed as a basis
for the classification and graduation of the tax sought to be imposed; (2)
that it is not a specific tax because it is not a tax on the beer itself, but on
the privilege of manufacturing beer; and (3) that with the conversion of
Mandaue into a city on June 21, 1969, the appeal has become moot,
because the prohibition against the imposition of any privilege tax on sales
or other taxes in any form based thereon, is applicable only to
municipalities.

While We have heretofore announced the doctrine that the grant of power to
tax to charterred cities and municipalities under Section 2 of the Local
Autonomy Act is sufficiently plenary, 2 it is, however, subject to the
exceptions and limitations contained in the two (2) provisos of the same
statute. In other words, the municipal corporation should not transcend the
limitations imposed by the statute on the basis of which the power to tax is
sought to be exercised. Thus, We held in the Marinduque case, 3 that an
ordinance providing for a graduated tax based on either "gross output or
sales" violates the prohibition on municipalities against imposing any
percentage tax on sales, or other taxes in any form based thereon, as the
only standard provided for measuring the gross output is its peso value, as
determined from true copies of receipts and/or invoices that the taxpayer is
required to submit to the municipal treasurer.

We are thus confined to the narrow issue of whether or not the challenged
ordinance has transcended the exceptions and limitations imposed by
section 2 of Republic Act 2264.

Section 2 of the aforecited statute provides:jgc:chanrobles.com.ph

"Provided, That municipalities and municipal districts shall, in no case,

impose any percentage tax on sales or other taxes in any form based
thereon nor impose taxes on articles subject to specific tax. . . ."cralaw
virtua1aw library
Section 1 of Ordinance No. 88 of the Municipality of Mandaue, as amended
by Ordinances Nos. 23 (1967) and 25 (1968), specifically provides that the
graduated quarterly fixed tax shall be "based on the gross value in money or
actual market value at the time of removal, of the manufactured products . .
. from their factories . . . during the preceding calendar year . . ."cralaw
virtua1aw library

Well settled is the rule that in the absence of legistative intent to the
contrary, technical or commercial terms and phrases, when used in tax
statutes, are presumed to have been used in their technical sense or in their
trade or commercial meaning. Thus, the phrase "gross value in money" has
a well-defined meaning in our tax statutes. For instance, the term gross
value in money" of articles sold, bartered, exchanged or transferred, as used
in Sections 184, 185 and 186 of the National Internal Revenue Code, has
been invariably used as equivalent to "gross selling price" and has been
construed as the total mount of money or its equivalent which the purchaser
pays to the vendor to receive or get the goods. 4 It must be noted that the
ordinance specifically provides that the basis of the tax is the "gross value in
money or actual market value" of the manufactured article.

The phrase "actual market value" has been construed as the price which an
article "would command in the ordinary course of business, that is to say,
when offered for sale by one willing to sell, but not under compulsion to sell,
and purchased by another who is willing to buy, but under no obligation to
purchase it, 5 or the price which the property will bring in a fair market after
fair and reasonable efforts have been made to find a purchaser who will give
the highest price for it. 6 The "actual market value" of property, for purposes
of taxation, therefore means the selling price of the article in the course of
ordinary business.

Considering that the phrase "gross value in money" is followed by the words
"or actual market value", it is evident that the latter was intended to explain
and clarify the preceding phrase. For the word "or" may be used as the
equivalent of "that is to say" and gives that which precedes it the same
significance as that which follows it. It is not always disjunctive and is
sometimes interpretative or expository of the preceding word. 7 Certainly
We cannot assume that the phrase "or actual market value" was a mere
surplusage, for it serves to clarify and explain the meaning and import of the
preceding phrase. In any event, it is the duty of the courts, so far as
reasonably practicable, to read and interpret a statute as to give life and
effect to all its provisions, so as to render it a harmonious whole.

It is also significant to note, that there is a set ratio between the amount of
the tax and the volume of sales. Thus if the "gross value in money or actual
market value" of the been removed from the factory exceeds P37,500.00 per
quarter, the taxpayer is required to pay a quarterly license tax of P160.00
plus P0.30 for every P1,000.00 or fraction of the excess. In other words in
excess of P37,500.00, the taxpayer will pay to the municipality a certain
amount of tax measured by a percentage of the sales. It is therefore evident
that the challenged ordinance was a transparent attempt on the part of the
municipality to impose a tax based on sales.

Although section 2 of the ordinance in question provides in a vague manner

that the tax shall be assessed and collected on the basis of the sworn
statement of the manager of a firm or corporation "of the gross value in
money during the preceding quarter," in actual practice the quarterly tax
levied upon petitioner, was computed on the basis of the total market value
of the beer, per quarter, as shown by the shipping memorandum certified to
by the storekeeper of the Bureau of Internal Revenue assigned to the
brewery. Thus the taxes amounting to P309.40 and P5,171.80, paid by
petitioner on January 22, 1968 and July 18, 1968, were actually determined
respectively on the basis of 70,412 and 2,203.070 cases of beer
manufactured and removed from the Mandaue plant, multiplied by P7.60
which is the prevailing market price (wholesaler’s price) per case of beer.

In Laoag Producers’ Cooperative Marketing Association, Inc. v. Municipality

of Laoag, 8 We held that the challenged ordinance imposed a tax based on
sales, although the ordinance merely imposed a "municipal tax or inspection
fee of one-half (1/2) centavo on every kilo of Virginia leaf tobacco, garlic and
onion on all wholesale dealers and vendors" because, in its application, it
does impose a tax based on sales, as it is based on the number of kilos sold
and purchased by him and when the wholesaler or vendor accumulates his
stock, he does so for only one purpose, to sell the same at the appropriate
time, and "he cannot by its very nature, carry on his business unless he sells
what he has bought." Similarly, in the case at bar, the circumstance that the
tax is imposed upon petitioner at the time of removal from the factory of the
manufactured beer, and not on the date of actual sale, is not of important
consequence since petitioner will, in the end, sell the been removed from the
factory, because by the nature of its business, it has no alternative but to
sell what it has manufactured.

We therefore hold that the questioned ordinance imposed a tax based on

sales and therefore beyond the authority of the municipality to enact.

Having reached this conclusion, it becomes unnecessary to pass upon the

additional question posed, i.e., whether or not the challenged ordinance
imposes a tax on a product subject to specific tax.

Respondents however claim that with the conversion of Mandaue into a city
pursuant to Republic Act No. 5519, which was approved on June 21, 1969,
the issue has already become moot, since the prohibition contained in
section 2 of Republic Act 2264 applies only to municipalities and not to
chartered cities. The same contention has been rejected in City of Naga v.
Court of Appeals, 9 and Laoag Producers’ Cooperative Marketing Association,
Inc. v. Municipality of Laoag, supra, where We ruled that the legality of an
ordinance depends upon the power of the municipality at the time of the
enactment of the challenged ordinance. Since the municipality of Mandaue
had no authority to enact the said ordinance, the subsequent approval of
Republic Act No. 5519 which became effective on June 21, 1969, did not
remove the original infirmity of the ordinance. Indeed there is no provision
in the aforecited statute which invests a curative effect upon the ordinances
of the municipality which when enacted were beyond its statutory authority.
IN VIEW WHEREOF, the appealed judgment is hereby reversed and
Ordinance No. 23, series of 1966, as amended by Ordinance No. 25, series
of 1967, which became effective on January 1, 1968, of the Municipality of
Mandaue, Cebu, is hereby declared null and void. Respondents are also
ordered to refund the taxes paid by Petitioners under the said ordinance,
with legal interest thereon. No costs.

Makalintal, Actg. C . J., Zaldivar, Castro, Teehankee, Makasiar and Esguerra,

JJ., concur.

Fernando and Barredo, JJ., did not take part.

 EN BANC

[G.R. No. L-28396. December 29, 1967.]

AGRIPINO DEMAFILES, Petitioner, v. COMMISSION ON ELECTIONS,

PROVINCIAL BOARD OF ANTIQUE, in its capacity as Board of
Canvassers for the newly created Municipality of Sebaste of the
Province of Antique, and BENITO B. GALIDO, Respondents.

Salonga, Ordoñez, Sicat & Associates for Respondent.

Ramon Barrios for respondent Comelec.

Jose W. Diokno for Petitioner.

SYLLABUS

1. STATUTORY CONSTRUCTION; FAILURE TO EXPRESS A MEANING;

COURT’S DUTY. — That the term of office of the first municipal officials of
Sebaste begins immediately after their proclamation cannot be concluded
from the provisions of Section 2 of Republic Act 4870 which provides that
"The first mayor, vice-mayor and councilors of the Municipality of Sebaste
shall be elected in the next general elections for local officials and shall have
qualified (sic)." It is quite probable that that is what the legislature meant.
But here is a case of a failure to express a meaning, and a becoming sense
of judicial modesty forbids the courts from assuming and consequently from
supplying. Accordingly, the general rule that the term of office of municipal
officials shall begin on the first day of January following their election
prevails in this case. The earlier assumption of office of respondent Galido is
void.

2. COMMISSION ON ELECTIONS; BOARD OF CANVASSERS; NATURE OF

FUNCTIONS. — It is the ministerial function of a board of canvassers to
count the results as they appear in the returns which on their face do not
reveal any irregularities or falsities. The return in this case shows nothing on
its face from which the canvassers might conclude that it does not speak the
truth. It is only when it is compared with the certificate of the election
registrar that a discrepancy appears as to the number of registered voters.
The return therefore is by no means "obviously manufactured" so as to
justify its exclusion.

3. ID.; ID.; ID.; QUESTION OF FRAUD SHOULD BE THRESHED OUT IN AN

ELECTION CONTEST. — The question of whether or not more people than
registered voters were allowed to vote in precinct 7 should be threshed out
in an election contest.

4. ID.; ID.; REELECTIONIST MEMBERS ARE INCOMPETENT TO ACT IN SAID

BOARD. — Section 28 of the Revised Election Code which provides that any
member of the provincial board who is a candidate for an elective office shall
be incompetent to act in said board, draws no distinction between the
provincial board acting as a provincial board of canvassers and the same
board acting as a municipal canvassing body for new municipalities. Hence
reelectionist members of the provincial board are disqualified under said
section even when they sit as a municipal board of canvassers. Where two of
the four members of the board of canvassers were disqualified from sitting
in it because they were candidates for reelection, then the canvass and
proclamation made by said board should be annulled.

5. ID.; POWER TO ANNUL ILLEGAL CANVASS. — It is now settled doctrine

that the COMELEC has the power to annul an illegal proclamation as when
they are based on incomplete returns, and order a new canvass to be made
by counting the returns wrongfully excluded.

DECISION

CASTRO, J.:

The new municipality of Sebaste 1 in Antique province held its first election
of officers in the general elections of November 14, 1967, with the petitioner
Agripino Demafiles and the respondent Benito B. Galido vying for the
mayoralty.

On November 21 the respondent Galido asked the provincial board, acting as

municipal board of canvassers pursuant to section 167(b) of the Revised
Election Code, to disregard, as "obviously manufactured", the election return
from precinct 7 on the ground that said return shows that 195 voters were
registered (of whom 188 voted), when, according to a certificate of the
municipal election registrar only 182 had registered in that precinct as of
October 30, 1967. At its session on the following day, November 22, the
board, over the objection of one member, voted to reject the return from
precinct 7 and then proceeded with the canvass of the returns from the
other precincts. The resulting tally gave Galido 888 votes as against 844 for
Demafiles. Accordingly, Galido was proclaimed mayor-elect of the
municipality of Sebaste.

On November 24 Demafiles wired the Commission on Elections, protesting

the board’s action of rejection of the return from precinct 7 and the
subsequent proclamation of Galido, and challenging the right of two board
members, Julito Moscoso and Quirico Escaño, to sit, considering that they
were reelectionists. Acting on the protest, the COMELEC resolved on
November 28, 1967:jgc:chanrobles.com.ph

"To annul the canvass and proclamation of the local officials of the new
municipality of Sebaste, Antique, which was made by the Provincial Board of
Antique;

"To constitute the Board of Canvassers by appointing the substitutes

pursuant to the provisions of Sec. 167 (a) of the Revised Election Code,
which shall canvass anew the results of the election for local offices of
Sebaste, Antique, in accordance with the Instructions to Board of Canvassers
contained in the Resolution of the Commission No. RR-544, particularly No.
5-K thereof, and thereafter to proclaim the winning candidates for local
offices of said municipality."cralaw virtua1aw library

In turn, Galido asked for a reconsideration on the ground that the two
members of the provincial board who were reelectionists were disqualified
from sitting only when the board was acting as a provincial, but not as a
municipal, board of canvassers and that the COMELEC resolution annulling
the canvass and proclamation of officials was issued without giving him an
opportunity to be heard. In its resolution of December 4, 1967 the
respondent Commission reconsidered its previous order and held "that the
canvass and proclamation already made of the local officials . . .
stands."cralaw virtua1aw library

Failing to secure a reconsideration of this latter resolution, Demafiles filed

the present petition for mandamus and certiorari to set aside the aforesaid
resolution of the COMELEC, to annul the proclamation of Galido, and to
secure an order directing the COMELEC to appoint substitute members of the
provincial board and to order a new canvass of the returns, including that
from precinct 7.
The three principal issues tendered for resolution in this case are: (1)
whether the respondent board of canvassers was within the periphery of its
power in rejecting the return from precinct 7 on the strength of an election
registrar’s certificate that a less number of voters than that shown in the
return had registered; (2) whether the provincial board members, who were
candidates for reelection, were disqualified from sitting in the board in its
capacity as a municipal board of canvassers; and (3) whether the
Commission on Elections can order the board of canvassers to count a return
from a given precinct.

These issues, together with the arguments of the parties, will be discussed
seriatim, but we must first proceed to dispose of the preliminary question
raised by the respondent Galido, namely, that this case is moot because he
had taken his oath and assumed office on November 22, pursuant to
Republic Act 4870.

Obviously, the frame of reference is section 2 of the statute which

reads:jgc:chanrobles.com.ph

"The first mayor, vice-mayor and councilors of the Municipality of Sebaste

shall be elected in the next general elections for local officials and shall have
qualified [sic]."cralaw virtua1aw library

In our view, the last portion of the provision — "and shall have qualified" —
is devoid of any meaning, is unmitigated jargon in or out of context, and
does not warrant the respondent’s reading that the term of office of the first
municipal officials of Sebaste begins immediately after their proclamation. It
is quite probable that is what the legislature meant. But here is a clear case
of a failure to express a meaning, and a becoming sense of judicial modesty
forbids the courts from assuming and, consequently, from supplying. "If
there is no meaning in it," said the King in Alice in Wonderland, "that saves a
world of trouble, you know, as we needn’t try to find any." Frankfurter, who
himself was fond of quoting this passage, admonishes that "a judge must
not rewrite a statute, neither to enlarge nor to contract it. Whatever
temptations the statesmanship of policy-making might wisely suggest,
construction must eschew interpolation and evisceration. 2 Accordingly, we
have to go by the general rule that the term of office of municipal officials
shall begin on the first day of January following their election, 3 and so the
assumption of office by the respondent Galido in no way affected the basic
issues in this case, which we now reach and resolve.

First, a canvassing board performs a purely ministerial function — that of

compiling and adding the results as they appear in the returns transmitted
to it. This is the teaching in Nacionalista Party v. Commission on Elections: 4
"the canvassers are to be satisfied of the genuineness of the returns —
namely, that the papers presented to them are not forged and spurious, that
they are returns, and that they are signed by the proper officers. When so
satisfied, . . . they may not reject any returns because of informalities in
them or because of illegal and fraudulent practices in the elections." 5 Thus,
they cannot pass upon the validity of an election return, much less exclude it
from the canvass on the ground that the votes cast in the precinct from
whence it came are illegal. 6

But the exclusion of the return in this case is sought to be justified on the
ground that it is "obviously manufactured" because, contrary to the
statement therein that there were 195 registered voters, of whom 188
voted, the certificate of the local election registrar states that only 182
voters had registered on October 30, 1967. Lagumbay v. Commission on
Elections 7 is cited in support of this view. In Lagumbay the returns were
palpably false as it was indeed statistically improbable that "all the eight
candidates of one party garnered all the votes, each of them receiving
exactly the same number, whereas all the eight candidates of the other
party got precisely nothing." In other words, the aid of evidence aliunde was
not needed, as "the fraud [being] so palpable from the return itself (res ipsa
loquitur — the thing speaks for itself), there is no reason to accept it and
give it prima facie value."cralaw virtua1aw library
On the other hand, the return in this case shows nothing on its face from
which the canvassers might conclude that it does not speak the truth. It is
only when it is compared with the certificate of the election registrar that a
discrepancy appears as to the number of registered voters. The return
therefore is by no means "obviously manufactured" so as to justify its
exclusion.

This is not to belittle the respondent’s claim that more people than
registered voters were allowed to vote in precinct 7. Perhaps that is true,
although the petitioner claims that after October 30, 1967 eight more voters
were allowed to register (making a total of 190 voters), and on the day of
the election 5 voters erroneously assigned to precinct 6 were allowed to vote
in precinct 7 because that was where they were really assigned. The point is
simply that this question should be threshed out in an election contest.
Lagumbay itself explicitly says —

"Of course we agree that fraud in the holding of the election should be
handled — and finally settled — by the corresponding courts or electoral
tribunals. That is the general rule, where testimonial or documentary
evidence is necessary . . ."cralaw virtua1aw library

Consequently, the canvass made and proclamation had should be annulled.

8

Second, the canvass and proclamation should be annulled because two of

the four members of the board of canvassers were disqualified from sitting
in it, they being candidates for reelection. As this Court held in Salcedo v.
Commission on Elections: 9

"And added reason for the nullification of the actuation of the Provincial
Board of Oriental Mindoro is the fact that its members were disqualified to
act it appearing that they were all candidates for reelection. This is clear
from Section 28 of the Revised Election Code which provides that any
member of the provincial board who is a candidate for an elective office shall
be incompetent to act in said board in the performance of its duties in
connection with the election."cralaw virtua1aw library

Branding the above statement as obiter dictum, the respondent Galido

argues that reelectionist members of the provincial board are disqualified
under section 28 only when the board acts as a provincial board of
canvassers, to prevent them from canvassing their own votes, and not when
they sit as a municipal board of canvassers.

With respect to the canvass and proclamation made by the provincial board
of Oriental Mindoro, three issues were raised in Salcedo, in resolving which
this Court held (1) that a provincial board cannot act as a municipal board of
canvassers where a municipal council has been formed; (2) that provincial
board members who are candidates for reelection are disqualified to sit in
the board; and (3) that a board of canvassers which excludes from canvass
the return from a precinct acts "in contravention of law."cralaw virtua1aw
library

At any rate the language of section 28 is all-inclusive.

Thus:jgc:chanrobles.com.ph

"Any member of a provincial board or of a municipal council who is a

candidate for office in any election, shall be incompetent to act on said body
in the performance of the duties thereof relative to said election . . ."cralaw
virtua1aw library

The statute draws no distinction between the provincial board acting as a

provincial board of canvassers and the same board acting as a municipal
canvassing body for new municipalities, and so we make none, in line with
the maxim ubi lex non distinguit, nec nos distinguere debemos.
Third, it is now settled doctrine that the COMELEC has the power to annul an
illegal canvass and an illegal proclamation as when they are based on
incomplete returns, and order a new canvass to be made by counting the
returns wrongfully excluded. 10 If it has power to direct that certain copies
of election returns be used in preference to other copies of the same returns,
11 there is no reason why it cannot direct canvassing bodies to count all
returns which are otherwise regular. Indeed, it is its duty to do so, failing
which it may be compelled by mandamus. As earlier pointed out, it is the
ministerial function of a board of canvassers to count the results as they
appear in the returns which on their face do not reveal any irregularities or
falsities.

ACCORDINGLY, the resolutions dated December 4 and 8, 1967 of the

Commission on Elections are set aside, and the canvass of returns made and
the subsequent proclamation of the respondent Benito B. Galido are
annulled. The respondent Commission on Elections is hereby directed (1) to
appoint new members of the board of canvassers in substitution of Julito
Moscoso and Quirico Escaño, and (2) immediately thereafter to order the
board of canvassers as reconstituted to convene, canvass all votes including
those appearing in the return from precinct 7, and, in accordance with the
results of such canvass, proclaim the winning candidates. Costs against the
private respondent Galido.

Concepcion, C.J., Reyes, J.B.L., Makalintal, Bengzon, J.P., Sanchez and

Angeles, JJ., concur.

Dizon, Zaldivar and Fernando, JJ., did not take part.

1. Created by virtue of Republic Act 4870.

2. Frankfurter, Some Reflections on the Reading of Statutes, Columbia Law
Review 527, 533 (1947).

3. Revised Election Code, Sec. 7.

4. 85 Phil. 149, 157-158 (1949).

5. Id. at 157-158.

6. Abendante v. Relato, 94 Phil. 8 (1953).

7. L-25444, Jan. 31, 1966.

8. Salcedo v. Commission on Elections, 106 Phil. 953.

9. Id.

10. Abendante v. Relato, supra, note 6; Olaño v. Ronquillo, L-17912, May

31, 1963; Lacson v. Commission on Elections L-16261, Dec. 28, 1961.

11. Espino v. Zaldivar, L-22325, Dec. 11, 1967.

 FIRST DIVISION

[G.R. No. 8848. November 21, 1913. ]

THE UNITED STATES, Plaintiff-Appellee, v. WILLIAM C. HART, C.J.

MILLER, and SERVILLANO NATIVIDAD, Defendants-Appellants.

Pedro Abad Santos for appellants Hart and Natividad.

W.H. Booram for appellant Miller.

Solicitor-General Harvey for Appellee.

SYLLABUS

1. VAGRANCY; LOITERING ABOUT SALOONS, DRAM SHOPS, OR GAMBLING

HOUSES; VISIBLE MEANS OF SUPPORT. — A person is not guilty of vagrancy
under the second paragraph of section 1 of the Vagrancy Act for frequenting
saloons, dram shops, or gambling houses, unless it be shown that he is
without visible means of support.

2. STATUTORY CONSTRUCTION; PUNCTUATION EMPLOYED. — If the

punctuation of a statute gives it a meaning which is reasonable and in
apparent accord with the legislative will, it may be used as an additional
argument for adopting the literal meaning of the words of a statute as thus
punctuated. But an argument based upon punctuation alone is not
conclusive, and the courts will not hesitate change the punctuation when
necessary, to give to the Act the effect intended by the Legislature,
disregarding superfluous or incorrect punctuation marks, and inserting
others where necessary.

DECISION

TRENT, J. :

The appellants, Hart, Miller, and Natividad, were arraigned in the Court of
First Instance of Pampanga on a charge of vagrancy under the provision of
Act No. 519, found guilty, and were each sentenced to six months’
imprisonment. Hart and Miller were further sentenced to a fine of P200, and
Natividad to a fine of P100. All appealed.

The evidence of the prosecution as to the defendant Hart shows that he

pleaded guilty and was convicted on a gambling charge about two or three
weeks before his arrest on the vagrancy charge; that he had been
conducting two gambling games, one in his saloon and the other in another
house, for a considerable length of time, the games running every night. The
defense showed that Hart and one Dunn operated a hotel and saloon at
Angeles which did a business, according to the bookkeeper, of P96,000
during the nineteen months preceding the trial; that Hart was also the sole
proprietor of a saloon in the barrio of Tacondo; that he raised imparted hogs
which he sold to the Army garrison at Camp Stotsenberg, which business
netted him during the preceding year about P4,000; that he was authorized
to sell several hundred hectares of land owned by one Carrillo in Tacondo;
that he administered, under power of attorney, the same property; and that
he furnished a building for and paid the teacher of the first public school in
Tacondo, said school being under Government supervision. The evidence of
the prosecution as to Miller was that he had the reputation of being a
gambler; that he pleaded guilty and was fined for participating in a gambling
game about two weeks before his arrest on the present charge of vagrancy;
and that he was seen in houses of prostitution and in a public dance hall in
Tacondo on various occasions. The defense showed without contradiction
that Miller had been discharged from the Army about the year previously;
that during his term of enlistment he had been made sergeant; that he
received rating as "excellent" on being discharged; that since his discharge
he had been engaged in tailoring business near Camp Stotsenberg under
articles of partnership with one Buckerd, Miller having contributed P1,000 to
the partnership; that the business netted each partner about P300 per
month; that Miller attended to business in an efficient manner every day;
and that his work was first class.

The evidence of the prosecution as to Natividad was that he had gambled

nearly every night for a considerable time prior to his arrest on the charge of
vagrancy, in the saloon of one Raymundo, as well as in Hart’s saloon; that
Natividad sometimes acted as banker; and that he had pleaded guilty to a
charge of gambling and had been sentenced to pay a fine therefor about two
weeks before his arrest on the vagrancy charge. The defense showed that
Natividad was a tailor, married, and had a house of his own; that he made
good clothes, and earned from P80 to P100 per month, which was sufficient
to support his family.

From his evidence it will be noted that each of the defendants was earning a
living at a lawful trade or business, quite sufficient to support himself in
comfort, and that the evidence which the prosecution must rely upon for a
conviction consists of their having spent their evenings in regularly licensed
saloons, participating in gambling games which are expressly made unlawful
by the Gambling Act, No. 1757, and that Miller frequented a dance hall and
houses of prostitution.

Section 1 of Act No. 519 is divided into seven clauses, separated by

semicolons. Each clause enumerates a certain calls of person who, within the
meaning of this statute, are to be considered as vagrants. For the purpose of
this discussion, we quote this section below, and number each of these
seven clauses.

"(1) Every person having no apparent means of subsistence, who had the
physical ability to work, and who neglects to apply himself or herself to some
lawful calling; (2) every person found loitering about saloons or dram shops
or gambling housed, or tramping or straying through the country without
visible means of support; (3) every person known to be a pickpocket, thief,
burglar, ladrone, either by his own confession or by his having been
convicted of either said offenses, and having no visible or lawful means of
support when found loitering about any gambling house, cockpit, or in any
outlying barrio of a pueblo; (4) every idle or dissolute person of associate of
known thieves or ladrones who wanders about the country at unusual hours
of the night; (5) every idle person who lodges in any barn, shed, outhouse,
vessel, or place other than such as is kept for lodging purposed, without the
permission of the owner or a person entitled to the possession thereof; (6)
every lewd or dissolute person who lives in and about houses of ill fame;
every common prostitute and common drunkard, is a vagrant."cralaw
virtua1aw library

It is insisted by the Attorney-General that as visible means of support would

not be a bar to a conviction under any one of the last four clauses of this
act, it was not the intention of the Legislature to limit the crime of vagrancy
to those having no visible means of support. Relying upon the second clause
to sustain the guilt of the defendant, the Attorney-General then proceeds to
argue that "visible means of support" as used in that clause does not apply
to "every person found loitering about saloons or dram shops on gambling
houses," but is confined entirely to "or tramping or straying through the
country." It is insisted that had it been intended for "without visible means
of support" to qualify the first part of the clause, either the comma after
gambling house would have been omitted, or else a comma after country
would have been inserted.

When the meaning of legislative enactment is in question, it is the duty of

the courts to ascertain, if possible, the true legislative intention, and adopt
that the construction of the statute of the statute which will give it effect.
The construction finally adopted should be based upon something more
substantial than the mere punctuation found in the printed Act. If the
punctuation of the statute gives it a meaning which is reasonable and in
apparent accord with the legislative will, it may be used as an additional
argument for adopting the literal meaning of the words of the statute as thus
punctuated. But an argument based upon punctuation alone is not
conclusive, and the courts will not hesitate to a change the punctuation
when necessary, to give to the Act the effect intended by the Legislature,
disregarding superfluous or incorrect punctuation marks, and inserting
others where necessary.

The Attorney-General has based his argument upon the proposition that
neither visible means of support not a lawful calling is a sufficient defense
under the last four paragraphs of the section; hence, not being universally a
defense to a charge of vagrancy, they should not be allowed except where
the Legislature has so provided. He then proceeds to show, by a "mere
grammatical criticism: of the second paragraph, that the Legislature did not
intend to allow visible means of support or a lawful calling to block a
prosecution for vagrancy founded on the charge that the defendant was
found loitering around saloons, dram shops, and gambling houses.

A most important step in this reasoning, necessary to make it sound, is to

ascertain the consequences flowing from such a construction of the law.
What is loitering? The dictionaries say it is idling or wasting one’s time. The
time spent in saloons, dram shops, and gambling houses is seldom anything
but that. So that under the proposed construction, practically all who
frequent such places commit a crime in so doing, for which they are liable to
punishment under the Vagrancy Law. We cannot believe that it was the
intention of the Legislature to penalize what, in the case of saloons and dram
shops, is under the law’s protection. If it be urged that what is true of
saloons and dram shops is not true of gambling houses in this respect, we
encounter the wording of the law, which makes no distinction whatever
between loitering around saloon and dram shops, and loitering around
gambling houses.
The offense of vagrancy and defined in Act No. 519 is the Anglo-Saxon
method of dealing with the habitually idle and harmful parasites society.
While the statutes of the various States of the American Union differ greatly
as to the classification of such persons, their scope is substantially the same.
Of those statutes we have had an opportunity to examine, but two or three
contain a provision similar to the second paragraph of Act No. 519. (Mo.
Ann. Stat., sec. 2228; sec 1314.) That the absence of visible means of
support or a lawful calling is necessary under these statutes to a conviction
for loitering around saloons, dram shops, and gambling houses is not even
negatived by the punctuation employed. In the State of Tennessee,
however, we find an exact counterpart for paragraph 2 of section 1 of our
own Act (Code of Tenn., sec 3023), with the same
punctuation:jgc:chanrobles.com.ph

". . . or for any person to be found loitering about saloons or dram shops,
gambling houses, or houses of ill fame, or tramping or strolling through the
country without any visible means of support."cralaw virtua1aw library

A further thought suggests itself on connection with the punctuation of the

paragraph in question. The section, as stated above, is divided into seven
clauses, separated by semicolons. To say that two classes of vagrants are
defined in paragraph 2, as to one of which visible means of support or a
lawful calling is not a good defense, and as to the other which such a
defense is sufficient, would imply a lack of logical classification on the part of
the legislature of the various classes of vagrants. this we are not inclined to
do.

In the case at bar, all three of the defendants were earning a living by
legitimate methods in a degree of comfort higher than the average. Their
sole offense was gambling, which the legislature deemed advisable to make
the subject of a penal law. the games in which they participated were
apparently played openly, in a licenses public saloon, where the officers of
the law could have entered as easily as did the patrons. It is believed that
Act No. 1757 is adequate, if enforced, to suppress the gambling proclivities
of any person making a good living ar a lawful trade of business.

For these reasons, the defendants are acquitted, with the costs de oficio.

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

Johnson and Moreland, JJ., concur the result.