FIRST DIVISION 5. To provide reasonable financial spousal support to the petitioner.

G.R. No. 201043 June 16, 2014 The Local Police Officers and the Barangay Officials through the Chairman in the area where
the petitioner and respondent live at Poblacion, Claveria, Misamis Oriental and Bobuntogan,
Jasaan, Misamis Oriental are directed to respond to any request for assistance from the petitioner
REPUBLIC OF THE PHILIPPINES, represented by the Armed Forces of the Philippines
for the implementation of this order. They are also directed to accompany the petitioner to their
Finance Center (AFPFC), Petitioner,
conjugal abode at Purok 2, Bobuntogan, Jasaan, Misamis Oriental to get her personal belongings
vs.
in order to insure the safety of the petitioner.
DAISY R. YAHON, Respondent.

The Deputy Sheriff of this Court is ordered to immediately serve the Temporary Protection Order
DECISION
(TPO) upon the respondent personally and to seek and obtain the assistance of law enforcement
agents, if needed, for purposes of effecting the smooth implementation of this order.
VILLARAMA, JR., J.:
In the meantime, let copy of this order and petition be served upon the respondent for him to file
Before the Court is a petition for review on certiorari under Rule 45 which seeks to nullify and an OPPOSITION within a period of five (5) days from receipt hereof and let a Preliminary
set aside the Decision1 dated November 29, 2011 and Resolution2 dated March 9, 2012 of the Conference and hearing on the merits be set on October 17, 2006 at 2:00 o’clock in the afternoon.
Court of Appeals (CA) Mindanao Station in CA-G.R. SP No. 02953-MIN. The CA affirmed the
orders and decision of the Regional Trial Court (RTC) of Cagayan de Oro City, Branch 22
To insure that petitioner can receive a fair share of respondent’s retirement and other benefits,
granting temporary and permanent protection orders, and denying the motion to lift the said
the following agencies thru their heads are directed to WITHHOLD any retirement, pension and
temporary protection order (TPO).
other benefits of respondent, S/SGT. CHARLES A. YAHON, a member of the Armed Forces of
the Philippines assigned at 4ID, Camp Evangelista, Patag, Cagayan de Oro City until further
Daisy R. Yahon (respondent) filed a petition for the issuance of protection order under the orders from the court:
provisions of Republic Act (R.A.) No. 9262,3 otherwise known as the "Anti-Violence Against
Women and Their Children Act of 2004," against her husband, S/Sgt. Charles A. Yahon (S/Sgt.
1. Commanding General/Officer of the Finance Center of the Armed Forces of the
Yahon), an enlisted personnel of the Philippine Army who retired in January 2006. Respondent
Philippines, Camp Emilio Aguinaldo, Quezon City;
and S/Sgt. Yahon were married on June 8, 2003. The couple did not have any child but
respondent has a daughter with her previous live-in partner.
2. The Management of RSBS, Camp Emilio Aguinaldo, Quezon City;
On September 28, 2006, the RTC issued a TPO, as follows:
3. The Regional Manager of PAG-IBIG, Mortola St., Cagayan de Oro City.
Finding the herein petition for the Issuance of Protection Order to be sufficient in form and
substance and to prevent great and irreparable injury to the petitioner, a TEMPORARY VIOLATION OF THIS ORDER IS PUNISHABLE BY LAW.
PROTECTION ORDER is forthwith issued to respondent, S/SGT. CHARLES A. YAHON
directing him to do the following acts:
IF THE RESPONDENT APPEARS WITHOUT COUNSEL ON THE DATE OF THE
PRELIMINARYCONFERENCE AND HEARING ON THE MERITS OF THE ISSUANCE OF
1. Respondent is enjoined from threatening to commit or committing further acts of A PERMANENT PROTECTION ORDER, THE COURT SHALL NOT RESCHEDULE OR
physical abuse and violence against the petitioner; POSTPONE THE PRELIMINARY CONFERENCE AND HEARING BUT SHALL APPOINT
A LAWYER FOR THE RESPONDENT AND IMMEDIATELY PROCEED WITH THE SAID
HEARING.
2. To stay away at a distance of at least 500 meters from petitioner, her residence or
her place of work;
IF THE RESPONDENT FAILS TO APPEAR ON THE DATE OF THE PRELIMINARY
CONFERENCE AND HEARING ON THE MERITS DESPITE PROPER NOTICE, THE
3. To refrain from harassing, annoying, intimidating, contacting or communicating
COURT SHALL ALLOW EX-PARTE PRESENTATION OF EVIDENCE BY THE
with petitioner; 4. Respondent is prohibited from using or possessing any firearm or
PETITIONER AND RENDER JUDGMENT ON THE BASIS OF THE PLEADINGS AND
deadly weapon on occasions not related to his job;
EVIDENCE ON RECORD. NO DELEGATION OF THE RECEPTION OF EVIDENCE
SHALL BE ALLOWED.
SO ORDERED.4 (Emphasis supplied.) WHEREFORE, premises considered, judgment is hereby rendered GRANTING the petition,
thus, pursuant to Sec. 30 of A.M. No. 04-10-1-SC, let a PERMANENT PROTECTION ORDER
be issued immediately and respondent, S/Sgt. CHARLES A.YAHON is ordered to give to
S/Sgt. Yahon, having been personally served with copy of the TPO, appeared during the
petitioner, DAISY R. YAHON the amount of FOUR THOUSAND PESOS (Php4,000.00) per
scheduled pre-trial but informed the court that he did not yet have a counsel and requested for
month by way of spousal support.
time to hire his own counsel. However, he did not hire a counsel nor file an opposition or answer
to the petition. Because of his failure to appear in the subsequent hearings of the case, the RTC
allowed the ex-parte presentation of evidence to determine the necessity of issuance of a Pursuant to the order of the court dated February 6, 2007, respondent, S/Sgt. Charles A. Yahon
Permanent Protection Order (PPO). is directed to give it to petitioner 50% of whatever retirement benefits and other claims that may
be due or released to him from the government and the said share of petitioner shall be
automatically deducted from respondent’s benefits and claims and be given directly to the
Meanwhile, as prayed for by respondent who manifested that S/Sgt. Yahon deliberately refused
petitioner, Daisy R. Yahon.
to give her spousal support as directed in the TPO (she claimed that she had no source of
livelihood since he had told her to resign from her job and concentrate on keeping their house),
the RTC issued another order directing S/Sgt. Yahon to give respondent spousal support in the Let copy of this decision be sent to the Commanding General/Officer of Finance Center of the
amount of ₱4,000.00 per month and fifty percent (50%) of his retirement benefits which shall be Armed Forces of the Philippines, Camp Emilio Aguinaldo, Quezon City; the Management of
automatically deducted and given directly to respondent.5 RSBS, Camp Emilio Aguinaldo, Quezon City and the Regional Manager of PAG-IBIG, Mortola
St., Cagayan de Oro City for their guidance and strict compliance.
In her testimony, respondent also said that S/Sgt. Yahon never complied with the TPO as he
continued making threats and inflicting physical abuse on her person, and failed to give her SO ORDERED.7 (Emphasis supplied.)
spousal support as ordered by the court.
Herein petitioner Armed Forces of the Philippines Finance Center (AFPFC), assisted by the
On July 23, 2007, the RTC rendered its Decision,6 as follows: Office of the Judge Advocate General (OTJAG), AFP, filed before the RTC a Manifestation and
Motion (To Lift Temporary Protection Order Against the AFP)8 dated November 10, 2008.
Stating that it was making a limited and special appearance, petitioner manifested that on August
After careful review and scrutiny of the evidence presented in this case, this court finds that there
29, 2008, it furnished the AFP Pension and Gratuity Management Center (PGMC) copy of the
is a need to permanently protect the applicant, Daisy R. Yahon from further acts of violence that
TPO for appropriate action. The PGMC, on September 2, 2008, requested the Chief, AFPFC the
might be committed by respondent against her. Evidences showed that respondent who was a
temporary withholding of the thirty-six (36) Months Lump Sum (MLS) due to S/Sgt. Yahon.
member of the Armed Forces of the Philippines assigned at the Headquarters 4ID Camp
Thereafter, on October 29, 2008, PGMC forwarded a letter to the Chief of Staff, AFP for the
Evangelista, Cagayan de Oro City had been repeatedly inflicting physical, verbal, emotional and
OTJAG for appropriate action on the TPO, and requesting for legal opinion as to the propriety
economic abuse and violence upon the petitioner. Respondent in several instances had slapped,
of releasing the 36 MLS of S/Sgt. Yahon. Petitioner informed the RTC that S/Sgt. Yahon’s check
mauled and punched petitioner causing her physical harm. Exhibits G and D are medical
representing his 36 MLS had been processed and is ready for payment by the AFPFC, but to date
certificates showing physical injuries suffered by petitioner inflicted by the respondent at
said check has not been claimed by respondent.
instances of their marital altercations. Respondent at the height of his anger often poked a gun
on petitioner and threatened to massacre her and her child causing them to flee for their lives and
sought refuge from other people. He had demanded sex from petitioner at an unreasonable time Petitioner further asserted that while it has initially discharged its obligation under the TPO, the
when she was sick and chilling and when refused poked a gun at her. Several police blotters were RTC had not acquired jurisdiction over the military institution due to lack of summons, and
offered as evidence by petitioner documenting the incidents when she was subjected to hence the AFPFC cannot be bound by the said court order. Additionally, petitioner contended
respondent’s ill temper and ill treatment. Verbally, petitioner was not spared from respondent’s that the AFPFC is not a party-in-interest and is a complete stranger to the proceedings before the
abuses by shouting at her that he was wishing she would die and he would celebrate if it happens RTC on the issuance of TPO/PPO. Not being impleaded in the case, petitioner lamented that it
and by calling and sending her threatening text messages. These incidents had caused petitioner was not afforded due process and it was thus improper to issue execution against the AFPFC.
great psychological trauma causing her [to] fear for her life and these forced her to seek refuge Consequently, petitioner emphasized its position that the AFPFC cannot be directed to comply
from the court for protection. Economically, petitioner was also deprived by respondent of her with the TPO without violating its right to procedural due process.
spousal support despite order of the court directing him to give a monthly support of
Php4,000.00. In view of the foregoing, this court finds a need to protect the life of the petitioner
In its Order9 dated December 17, 2008, the RTC denied the aforesaid motion for having been
not only physically but also emotionally and psychologically.
filed out of time. It noted that the September 28, 2006 TPO and July 23, 2007 Decision granting
Permanent Protection Order (PPO) to respondent had long become final and executory.
Based on the evidence presented, both oral and documentary, and there being no controverting
evidence presented by respondent, this Court finds that the applicant has established her case by
Petitioner’s motion for reconsideration was likewise denied under the RTC’s Order10 dated
preponderance of evidence.
March 6, 2009.
On May 27, 2009, petitioner filed a petition for certiorari before the CA praying for the (a) Prohibition of the respondent from threatening to commit or committing,
nullification of the aforesaid orders and decision insofar as it directs the AFPFC to automatically personally or through another, any of the acts mentioned in Section 5 of this Act;
deduct from S/Sgt. Yahon’s retirement and pension benefits and directly give the same to
respondent as spousal support, allegedly issued with grave abuse of discretion amounting to lack
(b) Prohibition of the respondent from harassing, annoying, telephoning, contacting
of jurisdiction. Respondent filed her Comment with Prayer for Issuance of Preliminary
or otherwise communicating with the petitioner, directly or indirectly;
Injunction, manifesting that there is no information as to whether S/Sgt. Yahon already received
his retirement benefit and that the latter has repeatedly violated the TPO, particularly on the
provision of spousal support. (c) Removal and exclusion of the respondent from the residence of the petitioner,
regardless of ownership of the residence, either temporarily for the purpose of
protecting the petitioner, or permanently where no property rights are violated, and if
After due hearing, the CA‘s Twenty-Second Division issued a Resolution11 granting
respondent must remove personal effects from the residence, the court shall direct a
respondent’s application, viz:
law enforcement agent to accompany the respondent to the residence, remain there
until respondent has gathered his things and escort respondent from the residence;
Upon perusal of the respective pleadings filed by the parties, the Court finds meritorious private
respondent’s application for the issuance of an injunctive relief. While the 36-month lump sum
(d) Directing the respondent to stay away from petitioner and any designated family
retirement benefits of S/Sgt. Charles A. Yahon has already been given to him, yet as admitted
or household member at a distance specified by the court, and to stay away from the
by petitioner itself, the monthly pension after the mentioned retirement benefits has not yet been
residence, school, place of employment, or any specified place frequented by the
released to him. It appears that the release of such pension could render ineffectual the eventual
petitioner and any designated family or household member;
ruling of the Court in this Petition.

(e) Directing lawful possession and use by petitioner of an automobile and other
IN VIEW OF THE FOREGOING, let a WRIT OF PRELIMINARY INJUNCTION issue
essential personal effects, regardless of ownership, and directing the appropriate law
enjoining the Armed Forces of the Philippines Finance Center, its employees, agents,
enforcement officer to accompany the petitioner to the residence of the parties to
representatives, and any all persons acting on its behalf, from releasing the remaining pension
ensure that the petitioner is safely restored to the possession of the automobile and
that may be due to S/Sgt. Charles A. Yahon.
other essential personal effects, or to supervise the petitioner’s or respondent’s
removal of personal belongings;
SO ORDERED.12
(f) Granting a temporary or permanent custody of a child/children to the petitioner;
By Decision dated November 29, 2011, the CA denied the petition for certiorari and affirmed
the assailed orders and decision of the RTC. The CA likewise denied petitioner’s motion for
(g) Directing the respondent to provide support to the woman and/or her child if
reconsideration.
entitled to legal support. Notwithstanding other laws to the contrary, the court shall
order an appropriate percentage of the income or salary of the respondent to be
In this petition, the question of law presented is whether petitioner military institution may be withheld regularly by the respondent's employer for the same to be automatically
ordered to automatically deduct a percentage from the retirement benefits of its enlisted remitted directly to the woman. Failure to remit and/or withhold or any delay in the
personnel, and to give the same directly to the latter’s lawful wife as spousal support in remittance of support to the woman and/or her child without justifiable cause shall
compliance with a protection order issued by the RTC pursuant to R.A. No. 9262. render the respondent or his employer liable for indirect contempt of court;

A protection order is an order issued by the court to prevent further acts of violence against (h) Prohibition of the respondent from any use or possession of any firearm or deadly
women and their children, their family or household members, and to grant other necessary weapon and order him to surrender the same to the court for appropriate disposition
relief. Its purpose is to safeguard the offended parties from further harm, minimize any disruption by the court, including revocation of license and disqualification to apply for any
in their daily life and facilitate the opportunity and ability to regain control of their life.13 The license to use or possess a firearm. If the offender is a law enforcement agent, the
protection orders issued by the court may be a Temporary Protection Order (TPO) or a Permanent court shall order the offender to surrender his firearm and shall direct the appropriate
Protection Order (PPO), while a protection order that may be issued by the barangay shall be authority to investigate on the offender and take appropriate action on matter;
known as a Barangay Protection Order (BPO).14
(i) Restitution for actual damages caused by the violence inflicted, including, but not
Section 8 of R.A. No. 9262 enumerates the reliefs that may be included in the TPO, PPO or BPO, limited to, property damage, medical expenses, child care expenses and loss of
to wit: income;
 (j) Directing the DSWD or any appropriate agency to provide petitioner temporary The foregoing exemptions have been incorporated in the 1997 Rules of Civil Procedure, as
shelter and other social services that the petitioner may need; and amended, which governs execution of judgments and court orders. Section 13 of Rule 39
enumerates those properties which are exempt from execution:
(k) Provision of such other forms of relief as the court deems necessary to protect and
provide for the safety of the petitioner and any designated family or household SEC. 13. Property exempt from execution.– Except as otherwise expressly provided by law, the
member, provided petitioner and any designated family or household member following property, and no other, shall be exempt from execution:
consents to such relief. (Emphasis supplied.)
xxxx
Petitioner argues that it cannot comply with the RTC’s directive for the automatic deduction of
50% from S/Sgt. Yahon’s retirement benefits and pension to be given directly to respondent, as
(l) The right to receive legal support, or money or property obtained as such support, or any
it contravenes an explicit mandate under the law governing the retirement and separation of
pension or gratuity from the Government;(Emphasis supplied.)
military personnel.

It is basic in statutory construction that in case of irreconcilable conflict between two laws, the
The assailed provision is found in Presidential Decree (P.D.) No. 1638, 15 which states: Section
later enactment must prevail, being the more recent expression of legislative will.17 Statutes must
31. The benefits authorized under this Decree, except as provided herein, shall not be subject to
be so construed and harmonized with other statutes as to form a uniform system of
attachment, garnishment, levy, execution or any tax whatsoever; neither shall they be assigned,
jurisprudence.18 However, if several laws cannot be harmonized, the earlier statute must yield to
ceded, or conveyed to any third person: Provided, That if a retired or separated officer or enlisted
the later enactment. The later law is the latest expression of the legislative will. 19
man who is entitled to any benefit under this Decree has unsettled money and/or property
accountabilities incurred while in the active service, not more than fifty per centum of the
pension gratuity or other payment due such officer or enlisted man or his survivors under this We hold that Section 8(g) of R.A. No. 9262, being a later enactment, should be construed as
Decree may be withheld and be applied to settle such accountabilities. (Emphasis supplied.) laying down an exception to the general rule above-stated that retirement benefits are exempt
from execution. The law itself declares that the court shall order the withholding of a percentage
of the income or salary of the respondent by the employer, which shall be automatically remitted
A similar provision is found in R.A. No. 8291, otherwise known as the "Government Service
directly to the woman "[n]otwithstanding other laws to the contrary."
Insurance System Act of 1997," which reads:

Petitioner further contends that the directive under the TPO to segregate a portion of S/Sgt.
SEC. 39. Exemption from Tax, Legal Process and Lien -- x x x
Yahon’s retirement benefits was illegal because said moneys remain as public funds, citing the
case of Pacific Products v. Ong.20 In that case, this Court sustained the CA when it held that the
xxxx garnishment of the amount of ₱10,500 payable to BML Trading and Supply while it was still in
the possession of the Bureau of Telecommunications was illegal and therefore, null and void.
The CA therein relied on the previous rulings in Director of Commerce and Industry v.
The funds and/or the properties referred to herein as well as the benefits, sums or monies
Concepcion21 and Avendano v. Alikpala, et al.22 wherein this Court declared null and void the
corresponding to the benefits under this Act shall be exempt from attachment, garnishment,
garnishment of the salaries of government employees.
execution, levy or other processes issued by the courts, quasi-judicial agencies or administrative
bodies including Commission on Audit (COA) disallowances and from all financial obligations
of the members, including his pecuniary accountability arising from or caused or occasioned by Citing the two aforementioned cases, we thus declared in Pacific Products:
his exercise or performance of his official functions or duties, or incurred relative to or in
connection with his position or work except when his monetary liability, contractual or
A rule, which has never been seriously questioned, is that money in the hands of public officers,
otherwise, is in favor of the GSIS.
although it may be due government employees, is not liable to the creditors of these employees
in the process of garnishment. One reason is, that the State, by virtue of its sovereignty may not
In Sarmiento v. Intermediate Appellate Court,16 we held that a court order directing the be sued in its own courts except by express authorization by the Legislature, and to subject its
Philippine National Bank to refrain from releasing to petitioner all his retirement benefits and to officers to garnishment would be to permit indirectly what is prohibited directly. Another reason
deliver one-half of such monetary benefits to plaintiff as the latter’s conjugal share is illegal and is that moneys sought to be garnished, as long as they remain in the hands of the disbursing
improper, as it violates Section 26 of CA 186 (old GSIS Law) which exempts retirement benefits officer of the Government, belong to the latter, although the defendant in garnishment may be
from execution. entitled to a specific portion thereof. And still another reason which covers both of the foregoing
is that every consideration of public policy forbids it.23

We disagree.
Section 8(g) of R.A. No. 9262 used the general term "employer," which includes in its coverage 1. Withdrawal of financial support or preventing the victim from engaging in any
the military institution, S/Sgt. Yahon’s employer. Where the law does not distinguish, courts legitimate profession, occupation, business or activity, except in cases wherein the
should not distinguish. Thus, Section 8(g) applies to all employers, whether private or other spouse/partner objects on valid, serious and moral grounds as defined in Article
government. 73 of the Family Code;

It bears stressing that Section 8(g) providing for spousal and child support, is a support 2. Deprivation or threat of deprivation of financial resources and the right to the use
enforcement legislation.1âwphi1 In the United States, provisions of the Child Support and enjoyment of the conjugal, community or property owned in common;
Enforcement Act24 allow garnishment of certain federal funds where the intended recipient has
failed to satisfy a legal obligation of child support. As these provisions were designed "to avoid
3. Destroying household property;
sovereign immunity problems" and provide that "moneys payable by the Government to any
individual are subject to child support enforcement proceedings," the law is clearly intended to
"create a limited waiver of sovereign immunity so that state courts could issue valid orders 4. Controlling the victims' own money or properties or solely controlling the conjugal
directed against Government agencies attaching funds in their possession."25 money or properties.28

This Court has already ruled that R.A. No. 9262 is constitutional and does not violate the equal The relief provided in Section 8(g) thus fulfills the objective of restoring the dignity of women
protection clause. In Garcia v. Drilon26 the issue of constitutionality was raised by a husband who are victims of domestic violence and provide them continued protection against threats to
after the latter failed to obtain an injunction from the CA to enjoin the implementation of a their personal safety and security.
protection order issued against him by the RTC. We ruled that R.A. No. 9262 rests on real
substantial distinctions which justify the classification under the law: the unequal power
"The scope of reliefs in protection orders is broadened to ensure that the victim or offended party
relationship between women and men; the fact that women are more likely than men to be
victims of violence; and the widespread bias and prejudice against women. is afforded all the remedies necessary to curtail access by a perpetrator to the victim. This serves
to safeguard the victim from greater risk of violence; to accord the victim and any designated
family or household member safety in the family residence, and to prevent the perpetrator from
We further held in Garcia that the classification is germane to the purpose of the law, viz: committing acts that jeopardize the employment and support of the victim. It also enables the
court to award temporary custody of minor children to protect the children from violence, to
prevent their abduction by the perpetrator and to ensure their financial support." 29
The distinction between men and women is germane to the purpose of R.A. 9262, which is to
address violence committed against women and children, spelled out in its Declaration of Policy,
as follows: WHEREFORE, the petition is DENIED for lack of merit. The Decision dated November 29,
2011 and Resolution dated March 9, 2012 of the Court of Appeals Mindanao Station in CA-G.R.
SP No. 02953-MIN are AFFIRMED and UPHELD.
SEC. 2. Declaration of Policy.– It is hereby declared that the State values the dignity of women
and children and guarantees full respect for human rights. The State also recognizes the need to
protect the family and its members particularly women and children, from violence and threats No costs.
to their personal safety and security.
SO ORDERED.
Towards this end, the State shall exert efforts to address violence committed against women and
children in keeping with the fundamental freedoms guaranteed under the Constitution and the
provisions of the Universal Declaration of Human Rights, the Convention on the Elimination of
All Forms of Discrimination Against Women, Convention on the Rights of the Child and other
international human rights instruments of which the Philippines is a party. 27

Under R.A. No. 9262, the provision of spousal and child support specifically address one form EN BANC
of violence committed against women – economic abuse.

D. "Economic abuse" refers to acts that make or attempt to make a woman financially dependent
which includes, but is not limited to the following:
G.R. No. 115245 July 11, 1995
JUANITO C. PILAR, petitioner, the offices of the Commission the full, true and itemized statement of all
vs. contributions and expenditures in connection with the election.
COMMISSION ON ELECTIONS, respondent.
No person elected to any public office shall enter upon the duties of his
office until he has filed the statement of contributions and expenditures
herein required.
QUIASON, J.:
The same prohibition shall apply if the political party which nominated
the winning candidate fails to file the statement required herein within the
This is a petition for certiorari under Rule 65 of the Revised Rules of Court assailing the
period prescribed by this Act.
Resolution dated April 28, 1994 of the Commission on Elections (COMELEC) in UND No. 94-
040.
Except candidates for elective barangay office, failure to file the
statements or reports in connection with electoral contributions and
I
expenditures as required herein shall constitute an administrative offense
for which the offenders shall be liable to pay an administrative fine
On March 22, 1992, petitioner Juanito C. Pilar filed his certificate of candidacy for the position ranging from One Thousand Pesos ( P1,000.00) to Thirty Thousand Pesos
of member of the Sangguniang Panlalawigan of the Province of Isabela. (P30,000.00), in the discretion of the Commission.

On March 25, 1992, petitioner withdrew his certificate of candidacy. The fine shall be paid within thirty (30) days from receipt of notice of
such failure; otherwise, it shall be enforceable by a writ of execution
issued by the Commission against the properties of the offender.
In M.R. Nos. 93-2654 and 94-0065 dated November 3, 1993 and February 13, 1994 respectively,
the COMELEC imposed upon petitioner the fine of Ten Thousand Pesos (P10,000.00) for failure
to file his statement of contributions and expenditures. It shall be the duty of every city or municipal election registrar to advise
in writing, by personal delivery or registered mail, within five (5) days
from the date of election all candidates residing in his jurisdiction to
In M.R. No. 94-0594 dated February 24, 1994, the COMELEC denied the motion for
comply with their obligation to file their statements of contributions and
reconsideration of petitioner and deemed final M.R. Nos. 93-2654 and 94-0065 (Rollo, p. 14). expenditures.

Petitioner went to the COMELEC En Banc (UND No. 94-040), which denied the petition in a
For the commission of a second or subsequent offense under this Section,
Resolution dated April 28, 1994 (Rollo, pp. 10-13). the administrative fine shall be from Two Thousand Pesos (P2,000.00) to
Sixty Thousand Pesos (P60,000.00), in the discretion of the Commission.
Hence, this petition for certiorari. In addition, the offender shall be subject to perpetual disqualification to
hold public office (Emphasis supplied).
We dismiss the petition.
To implement the provisions of law relative to election contributions and expenditures, the
COMELEC promulgated on January 13, 1992 Resolution No. 2348 (Re: Rules and Regulations
II Governing Electoral Contributions and Expenditures in Connection with the National and Local
Elections on
Section 14 of R.A. No. 7166 entitled "An Act Providing for Synchronized National and Local May 11, 1992). The pertinent provisions of said Resolution are:
Elections and for Electoral Reforms, Authorizing Appropriations Therefor, and for Other
Purposes" provides as follows: Sec. 13. Statement of contributions and expenditures: Reminders to
candidates to file statements. Within five (5) days from the day of the
Statement of Contributions and Expenditures: Effect of Failure to File election, the Law Department of the Commission, the regional election
Statement. Every candidate and treasurer of the political party shall, director of the National Capital Region, the provincial election
within thirty (30) days after the day of the election, file in duplicate with supervisors and the election registrars shall advise in writing by personal
delivery or registered mail all candidates who filed their certificates of
 candidacy with them to comply with their obligation to file their In the case at bench, as the law makes no distinction or qualification as to whether the candidate
statements of contributions and expenditures in connection with the pursued his candidacy or withdrew the same, the term "every candidate" must be deemed to refer
elections. Every election registrar shall also advise all candidates residing not only to a candidate who pursued his campaign, but also to one who withdrew his candidacy.
in his jurisdiction to comply with said obligation (Emphasis supplied).
The COMELEC, the body tasked with the enforcement and administration of all laws and
Sec. 17. Effect of failure to file statement. (a) No person elected to any regulations relative to the conduct of an election, plebiscite, initiative, referendum, and recall
public office shall enter upon the duties of his office until he has filed the (The Constitution of the Republic of the Philippines, Art. IX(C), Sec. 2[1]), issued Resolution
statement of contributions and expenditures herein required. No. 2348 in implementation or interpretation of the provisions of Republic Act No. 7166 on
election contributions and expenditures. Section 13 of Resolution No. 2348 categorically refers
to "all candidates who filed their certificates of candidacy."
The same prohibition shall apply if the political party which nominated
the winning candidates fails to file the statement required within the
period prescribed by law. Furthermore, Section 14 of the law uses the word "shall." As a general rule, the use of the word
"shall" in a statute implies that the statute is mandatory, and imposes a duty which may be
enforced , particularly if public policy is in favor of this meaning or where public interest is
(b) Except candidates for elective barangay office, failure to file
involved. We apply the general rule (Baranda v. Gustilo, 165 SCRA 757 [1988]; Diokno v.
statements or reports in connection with the electoral contributions and
Rehabilitation Finance Corporation, 91 Phil. 608 [1952]).
expenditures as required herein shall constitute an administrative offense
for which the offenders shall be liable to pay an administrative fine
ranging from One Thousand Pesos (P1,000) to Thirty Thousand Pesos The state has an interest in seeing that the electoral process is clean, and ultimately expressive
(P30,000), in the discretion of the Commission. of the true will of the electorate. One way of attaining such objective is to pass legislation
regulating contributions and expenditures of candidates, and compelling the publication of the
same. Admittedly, contributions and expenditures are made for the purpose of influencing the
The fine shall be paid within thirty (30) days from receipt of notice of
results of the elections (B.P. Blg. 881, Sec. 94; Resolution No. 2348, Sec. 1). Thus, laws and
such failure; otherwise, it shall be enforceable by a writ of execution
regulations prescribe what contributions are prohibited (B.P. Blg. 881, Sec. 95, Resolution No.
issued by the Commission against the properties of the offender.
2348, Sec. 4), or unlawful (B.P. Blg. 881, Sec. 96), and what expenditures are authorized (B.P.
Blg. 881, Sec. 102; R.A. No. 7166, Sec. 13; Resolution No. 2348, Sec. 7) or lawful (Resolution
For the commission of a second or subsequent offense under this section, No. 2348, Sec. 8).
the administrative fine shall be from Two Thousand Pesos (P2,000) to
Sixty Thousand Pesos (P60,000), in the discretion of the Commission. In
Such statutes are not peculiar to the Philippines. In "corrupt and illegal practices acts" of several
addition, the offender shall be subject to perpetual disqualification to hold
states in the United States, as well as in federal statutes, expenditures of candidates are regulated
public office.
by requiring the filing of statements of expenses and by limiting the amount of money that may
be spent by a candidate. Some statutes also regulate the solicitation of campaign contributions
Petitioner argues that he cannot be held liable for failure to file a statement of contributions and (26 Am Jur 2d, Elections § 287). These laws are designed to compel publicity with respect to
expenditures because he was a "non-candidate," having withdrawn his certificates of candidacy matters contained in the statements and to prevent, by such publicity, the improper use of moneys
three days after its filing. Petitioner posits that "it is . . . clear from the law that candidate must devoted by candidates to the furtherance of their ambitions (26 Am Jur 2d, Elections § 289).
have entered the political contest, and should have either won or lost" (Rollo, p. 39). These statutes also enable voters to evaluate the influences exerted on behalf of candidates by
the contributors, and to furnish evidence of corrupt practices for annulment of elections
(Sparkman v. Saylor [Court of Appeals of Kentucky], 180 Ky. 263, 202 S.W. 649 [1918]).
Petitioner's argument is without merit.

State courts have also ruled that such provisions are mandatory as to the requirement of filing
Section 14 of R.A. No. 7166 states that "every candidate" has the obligation to file his statement
(State ex rel. Butchofsky v. Crawford [Court of Civil Appeals of Texas], 269 S.W. 2d 536 [1954];
of contributions and expenditures. Best v. Sidebottom, 270 Ky. 423,109 S.W. 2d 826 [1937]; Sparkman v. Saylor, supra.)

Well-recognized is the rule that where the law does not distinguish, courts should not
It is not improbable that a candidate who withdrew his candidacy has accepted contributions and
distinguish, Ubi lex non distinguit nec nos distinguere debemos (Philippine British Assurance incurred expenditures, even in the short span of his campaign. The evil sought to be prevented
Co. Inc. v. Intermediate Appellate Court, 150 SCRA 520 [1987]; cf Olfato v. Commission on by the law is not all too remote.
Elections, 103 SCRA 741 [1981]). No distinction is to be made in the application of a law where
none is indicated (Lo Cham v. Ocampo, 77 Phil. 636 [1946]).
It is notesworthy that Resolution No. 2348 even contemplates the situation where a candidate SECOND DIVISION
may not have received any contribution or made any expenditure. Such a candidate is not
excused from filing a statement, and is in fact required to file a statement to that effect. Under
G.R. No. 110898 February 20, 1996
Section 15 of Resolution No. 2348, it is provided that "[i]f a candidate or treasurer of the party
has received no contribution, made no expenditure, or has no pending obligation, the statement
shall reflect such fact." PEOPLE OF THE PHILIPPINES, petitioner,
vs.
HON. JUDGE ANTONIO C. EVANGELISTA, as Presiding Judge of Branch XXI, 10th
Lastly, we note that under the fourth paragraph of Section 73 of the B.P. Blg. 881 or the Omnibus
Judicial Region, RTC of Misamis Oriental, Cagayan de Oro City, and GRILDO S.
Election Code of the Philippines, it is provided that "[t]he filing or withdrawal of certificate of
TUGONON, respondents.
candidacy shall not affect whatever civil, criminal or administrative liabilities which a candidate
may have incurred." Petitioner's withdrawal of his candidacy did not extinguish his liability for
the administrative fine. DECISION

WHEREFORE, the petition is DISMISSED. MENDOZA, J.:

Private respondent Grildo S. Tugonan was charged with frustrated homicide in the Regional
Trial Court of Misamis Oriental (Branch 21), the information against him alleging

That on or about the 26th day of May, 1988, at more or less 9:00 o'clock in the
evening at Barangay Publican+.3, Municipality of Villanueva, Province of Misamis
Oriental, Republic of the Philippines and within the jurisdiction of this Honorable
Court, the above-named accused with intent to kill and with the use of a knife, which
he was then conveniently provided of, did then and there willfully, unlawfully and
feloniously assault, attack and stab Roque T. Bade thereby inflicting upon him the
following injuries, to wit:

Stab wound, right iliac area,

0.5 cm. penetrating non
perforating lacerating posterior
peritoneum, 0,5 cm.

thus performing all the acts of execution which would produce the crime of Homicide
as a consequence but which, nevertheless, did not produce it by reason of causes
independent of the will of the accused, that is by timely medical attendance which
prevented his death.

CONTRARY TO and in violation of Article 249 in relation to Article 6 of the Revised

Penal Code.

After trial he was found guilty and sentenced to one year of prision correccional in its minimum
period and ordered to pay to the offended party P5,000.00 for medical expense, without
subsidiary imprisonment, and the costs. The RTC appreciated in his favor the privileged
mitigating circumstances of incomplete self-defense and the mitigating circumstance of
voluntary surrender.
On appeal the Court of Appeals affirmed private respondent's conviction but modified his to be granted even after an accused had appealed his sentence and failed to obtain an acquittal,
sentence by imposing on him an indeterminate penalty of 2 months of arresto mayor, as just so long as he had not yet started to serve the sentence. 7 Accordingly, in Santos To v. Paño,
minimum, to 2 years and 4 months of prision correccional, as maximum.1 it was held that the fact that the accused had appealed did not bar him from applying for probation
especially because it was as a result of the appeal that his sentence was reduced and made the
probationable limit.
On December 21, 1992, respondent Judge Antonio C. Evangelista of the RTC set the case for
repromulgation on January 4, 1993.
The law was, however, amended by P.D. No. 1990 which took effect on January 15,
2 19868 precisely to put a stop to the practice of appealing from judgments of conviction even if
On December 28, 1992, private respondent filed a petition for probation, alleging that (1) he
the sentence is probationable for the purpose of securing an acquittal and applying for probation
possessed all the qualifications and none of the disqualifications for probation under P.D. No.
only if the accused fails in his bid. Thus, as amended by P.D. No, 1990, §4 of the Probation Law
968, as amended; (2) the Court of Appeals has in fact reduced the penalty imposed on him by
now reads:
the trial court; (3) in its resolution, the Court of Appeals took no action on a petition for probation
which he had earlier filed with it so that the petition could be filed with the trial court; (4) in the
trial court's decision, two mitigating circumstances of incomplete self-defense and voluntarily §4. Grant of Probation. Subject to the provisions of this Decree, the trial court may,
surrender were appreciated in his favor; and (5) in Santos To v. Paño,3 the Supreme Court upheld after it shall have convicted and sentenced a defendant, and upon application by said
the right of the accused to probation notwithstanding the fact that he had appealed from his defendant within the period for perfecting an appeal, suspend the execution of the
conviction by the trial court. sentence and place the defendant on probation for such period and upon such terms
and conditions as it may deem best; Provided, That no application for probation shall
be entertained or granted if the defendant has perfected the appeal from the judgment
On February 2, 1993, the RTC ordered private respondent to report for interview to the Provincial
of conviction.
Probation Officer. The Provincial Probation Officer on the other hand was required to submit his
report with recommendation to the court within 60 days. 4
Probation may be granted whether the sentence imposes a term of imprisonment or a
fine only. An application for probation shall be filed with the trial court. The filing of
On February 18, 1993, Chief Probation and Parole Officer Isias B. Valdehueza recommended
the application shall be deemed a waiver of the right to appeal.
denial of private respondent's application for probation on the ground that by appealing the
sentence of the trial court, when he could have then applied for probation, private respondent
waived the right to make his application. The Probation Officer thought the present case to be An order granting or denying probation shall not be appealable. (Emphasis added).
distinguishable from Santos To v. Paño in the sense that in this case the original sentence
imposed on private respondent by the trial court (1 year of imprisonment) was probationable and
Since private respondent filed his application for probation on December 28, 1992, after P.D.
there was no reason for private respondent not to have filed his application for probation then,
No. 1990 had taken effect,9 it is covered by the prohibition that "no application for probation
whereas in Santos To v. Paño the penalty only became probationable after it had been reduced
shall be entertained or granted if the defendant has perfected the appeal from the judgment of
as a result of the appeal.
conviction" and that "the filing of the application shall be deemed a waiver of the right to appeal,"
Having appealed from the judgment of the trial court and having applied for probation only after
On April 16, 1993 Valdehueza reiterated5 his "respectful recommendation that private the Court of Appeals had affirmed his conviction, private respondent was clearly precluded from
respondent's application for probation be denied and that a warrant of arrest be issued for him to the benefits of probation.
serve his sentence in jail."
Private respondent argues, however, that a distinction should be drawn between meritorious
The RTC set aside the Probation Officer's recommendation and granted private respondent's appeals (like his appeal notwithstanding the appellate court's affirmance of his conviction) and
application for probation in its order of April 23, 1993, 6 Hence this petition by the prosecution. unmeritorious appeals. But the law does not make any distinction and so neither should the Court.
In fact if an appeal is truly meritorious the accused would be set free and not only given
probation. Private respondent's original sentence (1 year of prision correccional in its minimum
The issue in this case is whether the RTC committed a grave abuse of its discretion by granting
period) and the modified sentence imposed by the Court of Appeals (2 months of arresto mayor,
private respondent's application for probation despite the fact that he had appealed from the
as minimum, to 2 years and 4 months of prision correccional, as maximum) are probationable.
judgment of his conviction of the trial court.
Thus the fact that he appealed meant that private respondent was taking his chances which the
law precisely frowns upon. This is precisely the evil that the amendment in P.D. No. 1990 sought
The Court holds that it did. to correct, since in the words of the preamble to the amendatory law, "probation was not intended
as an escape hatch and should not be used to obstruct and delay the administration of justice, but
should be availed of at the first opportunity by offenders who are willing to be reformed and
Until its amendment by P.D. No. 1990 in 1986, it was possible under P.D. No. 986, otherwise rehabilitated."
known as the Probation Law, for the accused to take his chances on appeal by allowing probation
The ruling of the RTC that "[h]aving not perfected an appeal against the Court of Appeals SECOND DIVISION
decision, [private respondent] is, therefore, not covered by [the amendment in] P.D. 1990" is an
obvious misreading of the law. The perfection of the appeal referred in the law refers to the
G.R. No. 87416 April 8, 1991
.appeal taken from a judgment of conviction by the trial court and not that of the appellate court,
since under the law an application for probation is filed with the trial court which can only grant
the same "after it shall have convicted and sentenced [the] defendant, and upon application by CECILIO S. DE VILLA, petitioner,
said defendant within the period for perfecting an appeal. "Accordingly, in Llamado v. Court of vs.
Appeals, 10 it was held that the petitioner who had appealed his sentence could not subsequently THE HONORABLE COURT OF APPEALS, PEOPLE OF THE PHILIPPINES,
apply for probation. HONORABLE JOB B. MADAYAG, and ROBERTO Z. LORAYES, respondents.

WHEREFORE, the petition is GRANTED and the order of April 23, 1993 of the Regional Trial San Jose Enriquez, Lacas Santos & Borje for petitioner.
Court of Misamis Oriental (Branch 21) granting probation to private respondent Grildo S. Eduardo R. Robles for private respondent.
Tugonon is SET ASIDE.

SO ORDERED.

PARAS, J.:

This petition for review on certiorari seeks to reverse and set aside the decision* of the Court of
Appeals promulgated on February 1, 1989 in CA-G.R. SP No. 16071 entitled "Cecilio S. de Villa
vs. Judge Job B. Madayag, etc. and Roberto Z. Lorayes," dismissing the petition
for certiorari filed therein.

The factual backdrop of this case, as found by the Court of Appeals, is as follows:

On October 5, 1987, petitioner Cecilio S. de Villa was charged before the Regional
Trial Court of the National Capital Judicial Region (Makati, Branch 145) with
violation of Batas Pambansa Bilang 22, allegedly committed as follows:

That on or about the 3rd day of April 1987, in the municipality of Makati,
Metro Manila, Philippines and within the jurisdiction of this Honorable
Court, the above-named accused, did, then and there willfully, unlawfully
and feloniously make or draw and issue to ROBERTO Z. LORAYEZ, to
apply on account or for value a Depositors Trust Company Check No.
3371 antedated March 31, 1987, payable to herein complainant in the total
amount of U.S. $2,500.00 equivalent to P50,000.00, said accused well
knowing that at the time of issue he had no sufficient funds in or credit
with drawee bank for payment of such check in full upon its presentment
which check when presented to the drawee bank within ninety (90) days
from the date thereof was subsequently dishonored for the reason
"INSUFFICIENT FUNDS" and despite receipt of notice of such dishonor
said accused failed to pay said ROBERTO Z. LORAYEZ the amount of
P50,000.00 of said check or to make arrangement for full payment of the
same within five (5) banking days after receiving said notice.
After arraignment and after private respondent had testified on direct examination, (c) That the obligation arising from the issuance of the questioned check
petitioner moved to dismiss the Information on the following grounds: (a) is null and void and is not enforceable with the Philippines either in a civil
Respondent court has no jurisdiction over the offense charged; and (b) That no or criminal suit. Upon such premises, petitioner concludes that the
offense was committed since the check involved was payable in dollars, hence, the dishonor of the questioned check cannot be said to have violated the
obligation created is null and void pursuant to Republic Act No. 529 (An Act to provisions of Batas Pambansa Bilang 22. (Rollo, Annex "A", Decision, p.
Assure Uniform Value of Philippine Coin and Currency). 22).

On July 19, 1988, respondent court issued its first questioned orders stating: On February 1, 1989, the Court of Appeals rendered a decision, the decretal portion
of which reads:
Accused's motion to dismiss dated July 5, 1988, is denied for lack of
merit. WHEREFORE, the petition is hereby dismissed. Costs against petitioner.

Under the Bouncing Checks Law (B.P. Blg. 22), foreign checks, provided SO ORDERED. (Rollo, Annex "A", Decision, p. 5)
they are either drawn and issued in the Philippines though payable outside
thereof, or made payable and dishonored in the Philippines though drawn
A motion for reconsideration of the said decision was filed by the petitioner on
and issued outside thereof, are within the coverage of said law. The law
February 7, 1989 (Rollo, Petition, p. 6) but the same was denied by the Court of
likewise applied to checks drawn against current accounts in foreign
Appeals in its resolution dated March 3, 1989 (Rollo, Annex "B", p. 26).
currency.

Hence, this petition.

Petitioner moved for reconsideration but his motion was subsequently denied by
respondent court in its order dated September 6, 1988, and which reads:
In its resolution dated November 13, 1989, the Second Division of this Court gave
due course to the petition and required the parties to submit simultaneously their
Accused's motion for reconsideration, dated August 9, 1988, which was
respective memoranda (Rollo, Resolution, p. 81).
opposed by the prosecution, is denied for lack of merit.1âwphi1

The sole issue in this case is whether or not the Regional Trial Court of Makati has
The Bouncing Checks Law is applicable to checks drawn against current
jurisdiction over the case in question.
accounts in foreign currency (Proceedings of the Batasang Pambansa,
February 7, 1979, p. 1376, cited in Makati RTC Judge (now Manila City
Fiscal) Jesus F. Guerrero's The Ramifications of the Law on Bouncing The petition is without merit.
Checks, p. 5). (Rollo, Annex "A", Decision, pp. 20-22).
Jurisdiction is the power with which courts are invested for administering justice, that
A petition for certiorari seeking to declare the nullity of the aforequoted orders dated is, for hearing and deciding cases (Velunta vs. Philippine Constabulary, 157 SCRA
July 19, 1988 and September 6, 1988 was filed by the petitioner in the Court of 147 [1988]).
Appeals wherein he contended:
Jurisdiction in general, is either over the nature of the action, over the subject matter,
(a) That since the questioned check was drawn against the dollar account over the person of the defendant, or over the issues framed in the pleadings (Balais
of petitioner with a foreign bank, respondent court has no jurisdiction over vs. Balais, 159 SCRA 37 [1988]).
the same or with accounts outside the territorial jurisdiction of the
Philippines and that Batas Pambansa Bilang 22 could have not
Jurisdiction over the subject matter is determined by the statute in force at the time
contemplated extending its coverage over dollar accounts;
of commencement of the action (De la Cruz vs. Moya, 160 SCRA 538 [1988]).

(b) That assuming that the subject check was issued in connection with a
The trial court's jurisdiction over the case, subject of this review, can not be
private transaction between petitioner and private respondent, the
payment could not be legally paid in dollars as it would violate Republic questioned.
Act No. 529; and
Sections 10 and 15(a), Rule 110 of the Rules of Court specifically provide that:
 Sec. 10. Place of the commission of the offense. The complaint or However, petitioner argues that the check in question was drawn against the dollar
information is sufficient if it can be understood therefrom that the offense account of petitioner with a foreign bank, and is therefore, not covered by the
was committed or some of the essential ingredients thereof occured at Bouncing Checks Law (B.P. Blg. 22).
some place within the jurisdiction of the court, unless the particular place
wherein it was committed constitutes an essential element of the offense
But it will be noted that the law does not distinguish the currency involved in the
or is necessary for identifying the offense charged.
case. As the trial court correctly ruled in its order dated July 5, 1988:

Sec. 15. Place where action is to be instituted. (a) Subject to existing laws,
Under the Bouncing Checks Law (B.P. Blg. 22), foreign checks, provided
in all criminal prosecutions the action shall be instituted and tried in the
they are either drawn and issued in the Philippines though payable outside
court of the municipality or territory where the offense was committed or
thereof . . . are within the coverage of said law.
any of the essential ingredients thereof took place.

It is a cardinal principle in statutory construction that where the law does not
In the case of People vs. Hon. Manzanilla (156 SCRA 279 [1987] cited in the case of
distinguish courts should not distinguish.1âwphi1 Parenthetically, the rule is that
Lim vs. Rodrigo, 167 SCRA 487 [1988]), the Supreme Court ruled "that jurisdiction
where the law does not make any exception, courts may not except something unless
or venue is determined by the allegations in the information."
compelling reasons exist to justify it (Phil. British Assurance Co., Inc. vs. IAC, 150
SCRA 520 [1987]).
The information under consideration specifically alleged that the offense was
committed in Makati, Metro Manila and therefore, the same is controlling and
More importantly, it is well established that courts may avail themselves of the actual
sufficient to vest jurisdiction upon the Regional Trial Court of Makati. The Court
proceedings of the legislative body to assist in determining the construction of a
acquires jurisdiction over the case and over the person of the accused upon the filing
statute of doubtful meaning (Palanca vs. City of Manila, 41 Phil. 125 [1920]). Thus,
of a complaint or information in court which initiates a criminal action (Republic vs.
where there is doubts as to what a provision of a statute means, the meaning put to
Sunga, 162 SCRA 191 [1988]).
the provision during the legislative deliberation or discussion on the bill may be
adopted (Arenas vs. City of San Carlos, 82 SCRA 318 [1978]).
Moreover, it has been held in the case of Que v. People of the Philippines (154 SCRA
160 [1987] cited in the case of People vs. Grospe, 157 SCRA 154 [1988]) that "the
The records of the Batasan, Vol. III, unmistakably show that the intention of the
determinative factor (in determining venue) is the place of the issuance of the check."
lawmakers is to apply the law to whatever currency may be the subject thereof. The
discussion on the floor of the then Batasang Pambansa fully sustains this view, as
On the matter of venue for violation of Batas Pambansa Bilang 22, the Ministry of follows:
Justice, citing the case of People vs. Yabut (76 SCRA 624 [1977], laid down the
following guidelines in Memorandum Circular No. 4 dated December 15, 1981, the
xxx xxx xxx
pertinent portion of which reads:

THE SPEAKER. The Gentleman from Basilan is recognized.

(1) Venue of the offense lies at the place where the check was executed
and delivered; (2) the place where the check was written, signed or dated
does not necessarily fix the place where it was executed, as what is of MR. TUPAY. Parliamentary inquiry, Mr. Speaker.
decisive importance is the delivery thereof which is the final act essential
to its consummation as an obligation; . . . (Res. No. 377, s. 1980, Filtex
Mfg. Corp. vs. Manuel Chua, October 28, 1980)." (See The Law on THE SPEAKER. The Gentleman may proceed.
Bouncing Checks Analyzed by Judge Jesus F. Guerrero, Philippine Law
Gazette, Vol. 7. Nos. 11 & 12, October-December, 1983, p. 14). MR. TUPAY. Mr. Speaker, it has been mentioned by one of the
Gentlemen who interpellated that any check may be involved, like U.S.
It is undisputed that the check in question was executed and delivered by the dollar checks, etc. We are talking about checks in our country. There are
U.S. dollar checks, checks, in our currency, and many others.
petitioner to herein private respondent at Makati, Metro Manila.

THE SPEAKER. The Sponsor may answer that inquiry.

 MR. MENDOZA. The bill refers to any check, Mr. Speaker, and this EN BANC
check may be a check in whatever currency. This would not even be
limited to U.S. dollar checks. The check may be in French francs or
G.R. No. L-14787 January 28, 1961
Japanese yen or deutschunorhs. (sic.) If drawn, then this bill will apply.

COLGATE-PALMOLIVE PHILIPPINE, INC., petitioner,

MR TUPAY. So it include U.S. dollar checks.
vs.
HON. PEDRO M. GIMENEZ as Auditor General and ISMAEL MATHAY as AUDITOR
MR. MENDOZA. Yes, Mr. Speaker. OF THE CENTRAL BANK OF THE PHILIPPINES, respondents.

xxx xxx xxx Ross, Selph and Carrascoso for petitioner.

Office of the Solicitor General for respondents.
(p. 1376, Records of the Batasan, Volume III; Emphasis supplied).
GUTIERREZ DAVID, J.:
PREMISES CONSIDERED, the petition is DISMISSED for lack of merit.
The petitioner Colgate-Palmolive Philippines, Inc. is a corporation duly organized and existing
under Philippine laws engaged in the manufacture of toilet preparations and household remedies.
Melencio-Herrera, Padilla, Sarmiento and Regalado, JJ., concur.
On several occasions, it imported from abroad various materials such as irish moss extract,
sodium benzoate, sodium saccharinate precipitated calcium carbonate and dicalcium phosphate,
for use as stabilizers and flavoring of the dental cream it manufactures. For every importation
made of these materials, the petitioner paid to the Central Bank of the Philippines the 17% special
excise tax on the foreign exchange used for the payment of the cost, transportation and other
charges incident thereto, pursuant to Republic Act No. 601, as amended, commonly known as
the Exchange Tax Law.

On March 14, 1956, the petitioner filed with the Central Bank three applications for refund of
the 17% special excise tax it had paid in the aggregate sum of P113,343.99. The claim for refund
was based on section 2 of Republic Act 601, which provides that "foreign exchange used for the
payment of the cost, transportation and/or other charges incident to the importation into the
Philippines of . . . stabilizer and flavors . . . shall be refunded to any importer making application
therefor, upon satisfactory proof of actual importation under the rules and regulations to be
promulgated pursuant to section seven thereof." After the applications were processed by the
officer-in-charge of the Exchange Tax Administration of the Central Bank, that official advised,
the petitioner that of the total sum of P113,343.99 claimed by it for refund, the amount of
P23,958.13 representing the 17% special excise tax on the foreign exchange used to import irish
moss extract, sodium benzoate and precipitated calcium carbonate had been approved. The
auditor of the Central Bank, however, refused to pass in audit its claims for refund even for the
reduced amount fixed by the Officer-in-Charge of the Exchange Tax Administration, on the
theory that toothpaste stabilizers and flavors are not exempt under section 2 of the Exchange Tax
Law.

Petitioner appealed to the Auditor General, but the latter or, December 4, 1958 affirmed the
ruling of the auditor of the Central Bank, maintaining that the term "stabilizer and flavors"
mentioned in section 2 of the Exchange Tax Law refers only to those used in the preparation or
manufacture of food or food products. Not satisfied, the petitioner brought the case to this Court
thru the present petition for review.
The decisive issue to be resolved is whether or not the foreign exchange used by petitioner for nos distinguire debemos", or "where the law does not distinguish, neither do we distinguish".
the importation of dental cream stabilizers and flavors is exempt from the 17% special excise tax (Ligget & Myers Tobacco Company vs. Collector of Internal Revenue, 53 Off. Gaz. No. 15,
imposed by the Exchange Tax Law, (Republic Act No. 601) so as to entitle it to refund under page 4831). Since the law does not distinguish between "stabilizer and flavors" used in the
section 2 thereof, which reads as follows: preparation of food and those used in the manufacture of toothpaste or dental cream, we are not
authorized to make any distinction and must construe the words in their general sense. The rule
of construction that general and unlimited terms are restrained and limited by particular recitals
SEC, 2. The tax collected under the preceding section on foreign exchange used for
when used in connection with them, does not require the rejection of general terms entirely. It is
the payment of the cost, transportation and/or other charges incident to importation
intended merely as an aid in ascertaining the intention of the legislature and is to be taken in
into the Philippines of rice, flour, canned milk, cattle and beef, canned fish, soya
connection with other rules of construction. (See Handbook of the Construction and
beans, butterfat, chocolate, malt syrup, tapioca, stabilizer and flavors, vitamin
Interpretation of Laws by Black, p. 215.216, 2nd ed.)
concentrate, fertilizer, poultry feed; textbooks, reference books, and supplementary
readers approved by the Board of Textbooks and/or established public or private
educational institutions; newsprint imported by or for publishers for use in the Having arrived at the above conclusion, we deem it now idle to pass upon the other questions
publication of books, pamphlets, magazines and newspapers; book paper, book cloth, raised by the parties.
chip board imported for the printing of supplementary readers (approved by the Board
of Textbooks) to be supplied to the Government under contracts perfected before the
WHEREFORE, the decision under review is reversed and the respondents are hereby ordered to
approval of this Act, the quantity thereof to be certified by the Director of Printing;
audit petitioners applications for refund which were approved by the Officer-in-Charge of the
anesthetics, anti-biotics, vitamins, hormones, x-ray films, laboratory reagents,
Exchange Tax Administration in the total amount of P23,958.13.
biologicals, dental supplies, and pharmaceutical drugs necessary for compounding
medicines; medical and hospital supplies listed in the appendix to this Act, in
quantities to be certified by the Director of Hospitals as actually needed by the Bengzon, Bautista Angelo, Concepcion, Reyes, J.B.L., Barrera, Paredes and Dizon, JJ., concur.
hospitals applying therefor; drugs and medicines listed in the said appendix; and such Labrador, J., reserves his vote.
other drugs and medicines as may be certified by the Secretary of Health from time
to time to promote and protect the health of the people of the Philippines shall be
refunded to any importer making application therefor, upon satisfactory proof of
actual importation under the rules and regulations to be promulgated pursuant to
section seven thereof." (Emphasis supplied.)

The ruling of the Auditor General that the term "stabilizer and flavors" as used in the law refers
only to those materials actually used in the preparation or manufacture of food and food products
is based, apparently, on the principle of statutory construction that "general terms may be
restricted by specific words, with the result that the general language will be limited by the
specific language which indicates the statute's object and purpose." (Statutory Construction by
Crawford, 1940 ed. p. 324-325.) The rule, however, is, in our opinion, applicable only to cases
where, except for one general term, all the items in an enumeration belong to or fall under one
specific class. In the case at bar, it is true that the term "stabilizer and flavors" is preceded by a
number of articles that may be classified as food or food products, but it is likewise true that the
other items immediately following it do not belong to the same classification. Thus "fertilizer"
and "poultry feed" do not fall under the category of food or food products because they are used
in the farming and poultry industries, respectively. "Vitamin concentrate" appears to be more of
a medicine than food or food product, for, as matter of fact, vitamins are among those enumerated
in the list of medicines and drugs appearing in the appendix to the law. It should also here be
stated that "cattle", which is among those listed preceding the term in question, includes not only
those intended for slaughter but also those for breeding purposes. Again, it is noteworthy that
under, Republic Act No. 814 amending the above-quoted section of Republic Act No. 601,
"industrial starch", which does not always refer to food for human consumption, was added
among the items grouped with "stabilizer and flavors". Thus, on the basis of the grouping of the EN BANC
articles alone, it cannot validly be maintained that the term "stabilizer and flavors" as used in the
above-quoted provision of the Exchange Tax Law refers only to those used in the manufacture [G.R. No. 89483. August 30, 1990.]
of food and food products. This view is supported by the principle "Ubi lex non distinguish nec
REPUBLIC OF THE PHILIPPINES THRU: THE PRESIDENTIAL COMMISSION ON
GOOD GOVERNMENT (PCGG), AFP ANTI-GRAFT BOARD, COL. ERNESTO A. The case was set for preliminary investigation by the PCGG. Private respondent moved to
PUNSALANG and PETER T. TABANG, Petitioners, v. HON. EUTROPIO MIGRINO, as dismiss the case on the following grounds: (1) that the PCGG has no jurisdiction over his person;
Presiding Judge, Regional Trial Court, NCJR, Branch 151, Pasig, Metro Manila and (2) that the action against him under Rep. Act No. 1379 has already prescribed; (3) that E.O. No.
TROADIO TECSON, Respondents. 14, insofar as it suspended the provisions of Rep. Act No. 1379 on prescription of actions, was
inapplicable to his case; and (4) that having retired from the AFP on May 9, 1984, he was now
The Solicitor General, for Petitioners. beyond the reach of Rep. Act No. 3019. The Board opposed the motion to dismiss.

Pacifico B. Advincula for Private Respondent. In a resolution dated February 8, 1989, the PCGG denied the motion to dismiss for lack of merit.
Private respondent moved for reconsideration but this was denied by the PCGG in a resolution
dated March 8, 1989. Private respondent was directed to submit his counter-affidavit and other
DECISION controverting evidence on March 20, 1989 at 2:00 p.m.

On March 13, 1989, private respondent filed a petition for prohibition with preliminary
CORTES, J.: injunction with the Regional Trial Court in Pasig, Metro Manila. The case was docketed as Case
No. 57092 and raffled to Branch 151, respondent judge’s court. Petitioner filed a motion to
dismiss and opposed the application for the issuance of a writ of preliminary injunction on the
This case puts in issue the authority of the Presidential Commission on Good Government principal ground that the Regional Trial Court had no jurisdiction over the Board, citing the case
(PCGG), through the New Armed Forces of the Philippines Anti-Graft Board (hereinafter of PCGG v. Peña, G.R. No. 77663, April 12, 1988, 159 SCRA 556. Private respondent opposed
referred to as the "Board"), to investigate and cause the prosecution of petitioner, a retired the motion to dismiss. Petitioner replied to the opposition.
military officer, for violation of Republic Acts Nos. 3019 and 1379.
On June 23, 1989, respondent judge denied petitioner’s motion to dismiss. On June 26, 1989,
Assailed by the Republic in this petition for certiorari, prohibition and/or mandamus with prayer respondent judge granted the application for the issuance of a writ of preliminary injunction,
for the issuance of a writ of preliminary injunction and/or temporary restraining order are the enjoining petitioners from investigating or prosecuting private respondent under Rep. Acts Nos.
orders of respondent judge in Civil Case No. 57092 Branch 151 of the Regional Trial Court of 3019 and 1379 upon the filing of a bond in the amount of Twenty Thousand Pesos (P20,000.00).
Pasig, Metro Manila: (1) dated June 23, 1989, denying petitioners’ Motion to Dismiss and
Opposition, and (2) dated June 26, 1989, granting private respondent’s application for the Hence, the instant petition.
issuance of a writ of preliminary injunction. Thus, the petition seeks the annulment of the two
orders, the issuance of an injunction to enjoin respondent judge from proceeding with Civil Case On August 29, 1989, the Court issued a restraining order enjoining respondent judge from
No. 57092 and, finally, the dismissal of the case before the trial court. enforcing his orders dated June 23, 1989 and June 26, 1989 and from proceeding with Civil Case
No. 57092.
The controversy traces its roots to the order of then PCGG Chairman Jovito R. Salonga, dated
May 13, 1986, which created the New Armed Forces of the Philippines Anti-Graft Board. The Private respondent filed his comment, to which petitioners filed a reply. A rejoinder to the reply
Board was created to "investigate the unexplained wealth and corrupt practices of AFP was filed by private Respondent. The Court gave due course to the petition and the parties filed
personnel, both retired and in active service." The order further stated that" [t]he Board shall be their memoranda. Thereafter, the case was deemed submitted.
primarily charged with the task of investigating cases of alleged violations of the Anti-Graft and
Corrupt Practices Act (Republic Act No. 3019, as amended) and shall make the necessary The issues raised in the petition are as follows:chanrob1es virtual 1aw library
recommendations to appropriate government agencies and instrumentalities with respect to the
action to be taken thereon based on its findings."cralaw virtua1aw library I.
Acting on information received by the Board, which indicated the acquisition of wealth beyond
his lawful income, private respondent Lt. Col. Troadio Tecson (ret.) was required by the Board WHETHER OR NOT RESPONDENT JUDGE GRAVELY ABUSED HIS DISCRETION OR
to submit his explanation/comment together with his supporting evidence by October 31, 1987 ACTED WITHOUT OR IN EXCESS OF JURISDICTION IN ASSUMING JURISDICTION
[Annex "B", Petition]. Private respondent requested, and was granted, several postponements, OVER AND INTERFERING WITH THE ORDERS AND FUNCTIONS OF THE
but was unable to produce his supporting evidence because they were allegedly in the custody PRESIDENTIAL COMMISSION ON GOOD GOVERNMENT.
of his bookkeeper who had gone abroad.

Just the same, the Board proceeded with its investigation and submitted its resolution, dated June II.
30, 1988, recommending that private respondent be prosecuted and tried for violation of Rep.
Act No. 3019, as amended, and Rep. Act No. 1379, as amended.chanrobles lawlibrary : rednad
WHETHER, OR NOT RESPONDENT JUDGE GRAVELY ABUSED HIS DISCRETION OR
ACTED WITHOUT OR IN EXCESS OF JURISDICTION IN ISSUING THE ASSAILED
ORDER DATED JUNE 26, 1989 ENJOINING PETITIONERS FROM INVESTIGATING
AND PROSECUTING PRIVATE RESPONDENT FOR VIOLATION OF REPUBLIC ACT A close reading of E. O. No. 1 and related executive orders will readily show what is
NO. 3019, OTHERWISE KNOWN AS ANTI-GRAFT AND CORRUPT PRACTICES ACT contemplated within the term "subordinate."cralaw virtua1aw library
AND REPUBLIC ACT NO. 1379, OTHERWISE KNOWN AS AN ACT FOR THE
FORFEITURE OF UNLAWFULLY ACQUIRED PROPERTY [Rollo, p. 19]. The Whereas Clauses of E. O. No. 1 express the urgent need to recover the ill-gotten wealth
amassed by former President Ferdinand E. Marcos, his immediate family, relatives, and close
As to the first issue, petitioner contends that following the ruling of the Court in PCGG v. Peña associates both here and abroad.
the Board, being a creation and/or extension of the PCGG, is beyond the jurisdiction of the
Regional Trial Court. On the second issue, petitioner strongly argues that the private E.O. No. 2 freezes "all assets and properties in the Philippines in which former President Marcos
respondent’s case falls within the jurisdiction of the PCGG. and/or his wife, Mrs. Imelda Romualdez Marcos, their close relatives, subordinates, business
associates, dummies, agents, or nominees have any interest or participation."cralaw virtua1aw
The pivotal issue is the second one. On this point, private respondent’s position is as library
follows:chanrob1es virtual 1aw library
Applying the rule in statutory construction known as ejusdem generis, that is —
1. . . . he is not one of the subordinates contemplated in Executive Orders 1 , 2 , 14 and 14-A as
the alleged illegal acts being imputed to him, that of alleged amassing wealth beyond his legal [W]here general words follow an enumeration of persons or things, by words of a particular and
means while Finance Officer of the Philippine Constabulary, are acts of his own alone, not specific meaning, such general words are not to be construed in their widest extent, but are to be
connected with his being a crony, business associate, etc. or subordinate as the petition does not held as applying only to persons or things of the same kind or class as those specifically
allege so. Hence the PCGG has no jurisdiction to investigate him. mentioned [Smith, Bell & Co., Ltd. v. Register of Deeds of Davao, 96 Phil. 53, 58 (1954), citing
Black on Interpretation of Laws, 2nd Ed., 203].
If indeed private respondent amassed wealth beyond his legal means, the procedure laid down
by Rep. Act 1379 as already pointed out before be applied. And since, he has been separated the term "subordinate" as used in E.O. Nos. 1 and 2 would refer to one who enjoys a close
from the government more than four years ago, the action against him under Republic Act 1379 association or relation with former Pres. Marcos and/or his wife, similar to the immediate family
has already prescribed. member, relative, and close associate in E.O. No. 1 and the close relative, business associate,
dummy, agent, or nominee in E.O. No. 2.
2. . . . no action can be filed anymore against him now under Republic Act 1379 for recovery of
unexplained wealth for the reason that he has retired more than four years ago. Thus, as stated by the Court in Bataan Shipyard & Engineering Co., Inc. v. PCGG, G.R. No.
75885, May 27, 1987, 150 SCRA 181, 205-206.
3. . . . The order creating the AFP Anti-Graft Board (Annex "A", Petition) is null and void.
Nowhere in Executive Orders 1, 2, 14 and 14-A is there any authority given to the commission, The situations envisaged and sought to be governed [by Proclamation No. 3 and E.O. Nos. 1, 2
its chairman and members, to create Boards or bodies to be invested with powers similar to the and 14] are self-evident, these being:chanrob1es virtual 1aw library
powers invested with the commission .. [Comment, pp. 6-7; Rollo, pp. 117-118].
1) that" (i)ll gotten properties (were) amassed by the leaders and supporters of the previous
1. The most important question to be resolved in this case is whether or not private respondent regime" ;
may be investigated and caused to be prosecuted by the Board, an agency of the PCGG, for
violation of Rep. Acts Nos. 3019 and 1379. According to petitioners, the PCGG has the power a) more particularly, that" (i)ll-gotten wealth (was) accumulated by former President Ferdinand
to investigate and cause the prosecution of private respondent because he is a "subordinate" of E. Marcos, his immediate family, relatives, subordinates, and close associates, . . . located in the
former President Marcos. They cite the PCGG’s jurisdiction over — Philippines or abroad, xx (and) business enterprises and entities (came to be) owned or controlled
by them, during . . . (the Marcos) administration, directly or through nominees, by taking undue
(a) The recovery of all ill-gotten wealth accumulated by former President Ferdinand E. Marcos, advantage of their public office and/or using their powers, authority, influence, connections or
his immediate family, relatives, subordinates and close associates, whether located in the relationship;"
Philippines or abroad, including the takeover or sequestration of all business enterprises and
entities owned or controlled by them, during his administration, directly or through nominees, b) otherwise stated, that "there are assets and properties pertaining to former President Ferdinand
by taking undue advantage of their public office and/or using their powers, authority, influence, E. Marcos, and/or his wife Mrs. Imelda Romualdez Marcos, their close relatives, subordinates,
connections or relationship. [E.O. No. 1, sec. 2.]. business associates, dummies, agents or nominees which had been or were acquired by them
directly or indirectly, through or as a result of the improper or illegal use of funds or properties
Undoubtedly, the alleged unlawful accumulation of wealth was done during the administration owned by the Government of the Philippines or any of its branches, instrumentalities, enterprises,
of Pres. Marcos. However, what has to be inquired into is whether or not private respondent banks or financial institutions, or by taking undue advantage of their office, authority, influence,
acted as a "subordinate" of Pres. Marcos within the contemplation of E.O. No. 1, the law creating connections or relationship, resulting in their unjust enrichment and causing grave damage and
the PCGG, when he allegedly unlawfully acquired the properties. prejudice to the Filipino people and the Republic of the Philippines" ;
 The resolution alleges that private respondent unlawfully accumulated wealth by taking
c) that "said assets and properties are in the form of bank accounts, deposits, trust accounts, advantage of his office as Finance Officer of the Philippine Constabulary. No attempt is made in
shares of stocks, buildings, shopping centers, condominiums, mansions, residences, estates, and the Board’s resolution to link him or his accumulation of wealth to former Pres. Marcos and/or
other kinds of real and personal properties in the Philippines and in various countries of the his wife.
world;" and.
(c) The letter of the Board chairman to the chairman of the PCGG, dated July 28, 1988, is
2) that certain "business enterprises and properties (were) taken over by the government of the clear:chanrob1es virtual 1aw library
Marcos Administration or by entities or persons close to former President Marcos." [Footnotes
deleted]. Respectfully transmitted herewith for the prosecution before the Sandiganbayan is the case folder
of COLONEL TROADIO TECSON (Ret) who after preliminary investigation of the case by the
It does not suffice, as in this case, that the respondent is or was a government official or employee Board, found a prima facie evidence against subject officer for violating Section 8, R.A. 3019,
during the administration of former Pres. Marcos. There must be a prima facie showing that the as amended by BP 195, otherwise known as the Anti-Graft and Corrupt Practices Act and R.A.
respondent unlawfully accumulated wealth by virtue of his close association or relation with 1379, otherwise known as an Act for the Forfeiture of Unlawfully Acquired Property." [Rollo,
former Pres. Marcos and/or his wife. This is so because otherwise the respondent’s case will fall p. 46].
under existing general laws and procedures on the matter. Rep. Act No. 3019, the Anti-Graft and
Corrupt Practices Act, penalizes the corrupt practices of any public officer. Under Rep. Act No. Moreover, from the allegations of petitioner in its memorandum, it would appear that private
1379 (An Act Declaring Forfeited in Favor of the State Any Property Found to Have Been respondent accumulated his wealth for his own account. Petitioner quoted the letter of Ignacio
Unlawfully Acquired By Any Public Officer or Employee and Providing for the Procedure Datahan, a retired PC sergeant, to General Fidel Ramos, the material portion of which
Therefor), whenever any public officer or employee has acquired during his incumbency an reads:chanrob1es virtual 1aw library
amount of property which is manifestly out of proportion to his salary as such public officer or
employee and to his other lawful income and the income from legitimately acquired property, . . . After an official in the military unit received an Allotment Advice the same signed a cash
said property shall be presumed prima facie to have been unlawfully acquired [Sec. 2]. The advance voucher, let us say in the amount of P5,000.00. Without much ado, outright, Col. Tecson
Solicitor General shall file the petition and prosecute the case in behalf of the Republic, after paid the amount. The official concerned was also made to sign the receipt portion on the voucher
preliminary investigation by the provincial or city prosecutor [Ibid]. the amount of which was left blank. Before the voucher is passed for routine processing by Mrs.
Leonor Cagas, clerk of Col. Tecson and its facilitator, the maneuver began. The amount on the
Moreover, the record shows that private respondent was being investigated for unlawfully face of the cash advance voucher is altered or superimposed. The original amount of P5,000.00
acquired wealth under Rep. Acts Nos. 3019 and 1379, and not under E.O. Nos. 1, 2, 14 and 14- was now made say, P95,000.00. So it was actually the amount of P95,000.00 that appeared on
A. the records. The difference of P90,000.00 went to the syndicate.

Since private respondent was being investigated by the PCGG through the AFP Anti-Graft Board . . . Boy Tanyag, bookkeeper in Col. Tecson’s office took care of the work.
it would have been presumed that this was under Rep. Acts Nos. 3019 and 1379 in relation to
E.O. Nos. 1, 2, 14 and 14-A. But the record itself belies this presumption:chanrob1es virtual 1aw . . . In the liquidation of the altered cash advance amount, names of persons found in the
library Metropolitan Manila Telephone Directory with fictitious addresses appeared as recipients or
payees. Leonor and Boy got their shares on commission basis of the looted amount while the
(a) The letter of the chairman of the AFP Anti-Graft Board to private respondent, dated October greater part went to Col. Tecson. [Rollo, pp. 184-185.].
16, 1987, states: "This letter is in connection with the alleged information received by the AFP
Anti-Graft Board indicating your acquisition of wealth beyond legal means of income in Clearly, this alleged unlawful accumulation of wealth is not that contemplated in E.O. Nos. 1, 2,
violation of Rep. Act No. 3019 known as the Anti-Graft and Corrupt Practices Act." [Rollo, p. 14 and 14-A.
39].
2. It will not do to cite the order of the PCGG Chairman, dated May 13, 1986, creating the Board
(b) The Resolution dated June 30, 1988 of the Board categorically states:chanrob1es virtual 1aw and authorizing it to investigate the unexplained wealth and corrupt practices of AFP personnel,
library both retired and in active service, to support the contention that PCGG has jurisdiction over the
case of private Respondent. The PCGG cannot do more than what it was empowered to do. Its
I. PRELIMINARY STATEMENT:chanrob1es virtual 1aw library powers are limited. Its task is limited to the recovery of the ill-gotten wealth of the Marcoses,
their relatives and cronies. The PCGG cannot, through an order of its chairman, grant itself
This refers to the case against Col Troadio B. Tecson PC (Ret) for alleged unexplained wealth additional powers — powers not contemplated in its enabling law.
pursuant to R.A. 3019, as amended, otherwise known as Anti-Graft and Corrupt Practices Act
and R.A. 1379, as amended, otherwise known as the "Act for Forfeiture of Unlawfully Acquired 3. Petitioner assails the trial court’s cognizance of the petition filed by private Respondent.
Property." [Rollo, p. 43]. Particularly, petitioner argues that the trial court cannot acquire jurisdiction over the PCGG. This
matter has already been settled in Peña, supra, where the Court ruled that those who wish to
question or challenge the PCGG’s acts or orders must seek recourse in the Sandiganbayan, which provided therein had lapsed insofar as private respondent is concerned, we cannot say that he
is vested with exclusive and original jurisdiction. The Sandiganbayan’s decisions and final had already acquired a vested right that may not be prejudiced by a subsequent enactment.
orders are in turn subject to review on certiorari exclusively by this Court. [Ibid, at pp. 564-565].
Moreover, to bar the Government from recovering ill-gotten wealth would result in the validation
The ruling in Peña was applied in PCGG v. Aquino, G.R. No. 77816, June 30, 1988, 163 SCRA or legitimization of the unlawful acquisition, a consequence at variance with the clear intent of
363, Soriano III v. Yuson, G.R. No. 74910 (and five other cases), August 10, 1988, 164 SCRA Rep. Act No. 1379, which provides:chanrobles virtual lawlibrary
226 and Olaguer v. RTC, NCJR, Br. 48, G.R. No. 81385, February 21, 1989, 170 SCRA 478,
among others, to enjoin the regional trial courts from interfering with the actions of the PCGG. SEC. 11. Laws on prescription. — The laws concerning acquisitive prescription and limitation
of actions cannot be invoked by, nor shall they benefit the respondent, in respect to any property
Respondent judge clearly acted without or in excess of his jurisdiction when he took cognizance unlawfully acquired by him.
of Civil Case No. 57092 and issued the writ of preliminary injunction against the PCGG.
Thus, we hold that the appropriate prosecutory agencies, i.e., the city or provincial prosecutor
4. Thus, we are confronted with a situation wherein the PCGG acted in excess of its jurisdiction and the Solicitor General under sec. 2 of Rep. Act No. 1379, may still investigate the case and
and, hence, may be enjoined from doing so, but the court that issued the injunction against the file the petition for the forfeiture of unlawfully acquired wealth against private respondent, now
PCGG has not been vested by law with jurisdiction over it and, thus, the injunction issued was a private citizen. (On the other hand, as regards respondents for violations of Rep. Acts Nos.
null and void. 3019 and 1379 who are still in the government service, the agency granted the power to
investigate and prosecute them is the Office of the Ombudsman [Rep. Act No. 6770]). Under
The nullification of the assailed order of respondent judge issuing the writ of preliminary Presidential Decree No. 1606, as amended, and Batas Pambansa Blg. 195 violations of Rep. Acts
injunction is therefore in order. Likewise, respondent judge must be enjoined from proceeding Nos. 3019 and 1379 shall be tried by the Sandiganbayan.
with Civil Case No. 57092.
7. The Court hastens to add that this decision is without prejudice to the prosecution of private
But in view of the patent lack of authority of the PCGG to investigate and cause the prosecution respondent under the pertinent provisions of the Revised Penal Code and other related penal
of private respondent for violation of Rep. Acts Nos. 3019 and 1379, the PCGG must also be laws.
enjoined from proceeding with the case, without prejudice to any action that may be taken by
the proper prosecutory agency. The rule of law mandates that an agency of government be WHEREFORE, the order of respondent judge dated June 26, 1989 in Civil Case No. 57092 is
allowed to exercise only the powers granted it. NULLIFIED and SET ASIDE. Respondent judge is ORDERED to dismiss Civil Case No.
57092. The temporary restraining order issued by the Court on August 29, 1989 is MADE
5. The pronouncements made above should not be taken to mean that the PCGG’s creation of PERMANENT. The PCGG is ENJOINED from proceeding with the investigation and
the AFP Anti-Graft Board is a nullity and that the PCGG has no authority to investigate and prosecution of private respondent in I.S. No. 37, without prejudice to his investigation and
cause the prosecution of members and former members of the Armed Forces of the Philippines prosecution by the appropriate prosecutory agency.
for violations of Rep. Acts Nos. 3019 and 1379. The PCGG may investigate and cause the
prosecution of active and retired members of the AFP for violations of Rep. Acts Nos. 3019 and SO ORDERED.
1379 only in relation to E.O. Nos. 1, 2, 14 and 14-A, i.e., insofar as they involve the recovery of
the ill-gotten wealth of former Pres. Marcos and his family and "cronies." But the PCGG would Fernan, C.J., Narvasa, Melencio-Herrera, Gutierrez, Jr., Cruz, Paras, Feliciano, Gancayco,
not have jurisdiction over an ordinary case falling under Rep. Acts Nos. 3019 and 1379, as in Padilla, Bidin, Griño-Aquino, Medialdea and Regalado, JJ., concur.
the case at bar. E.O. Nos. 1, 2, 14 and 14-A did not envision the PCGG as the investigator and
prosecutor of all unlawful accumulations of wealth. The PCGG was created for a specific and Sarmiento, J., on leave.
limited purpose, as we have explained earlier, and necessarily its powers must be construed with
this in mind.

6. n his pleadings, private respondent contends that he may no longer be prosecuted because of
prescription. He relies on section 2 of Rep. Act No. 1379 which provides that" [t]he right to file
such petition [for forfeiture of unlawfully acquired wealth] shall prescribe within four years from
the date of resignation, dismissal or separation or expiration of the term of the officer or
employee concerned." He retired on May 9, 1984, or more than six (6) years ago. However, it
must be pointed out that section 2 of Rep. Act No. 1379 should be deemed amended or repealed
by Article XI, section 15 of the 1987 Constitution which provides that" [t]he right of the State to
recover properties unlawfully acquired by public officials or employees, from them or from their
nominees or transferees, shall not be barred by prescription, laches, or estoppel." Considering
that sec. 2 of Rep. Act No. 1379 was deemed amended or repealed before the prescriptive period
SECOND DIVISION from grazing the whole area, thereby causing damage and prejudice to the
said applicant-possessor-occupant, Atty. Vicente de la Serna, Jr. (sic)
G.R. No. L-47757-61 January 28, 1980
Five of the informations, wherein Ano Dacullo, Geronimo Oroyan, Mario Aparici, Ruperto Cajes
and Modesto Suello were the accused, were raffled to Judge Vicente B. Echaves, Jr. of Branch
THE PEOPLE OF THE PHILIPPINES, ABUNDIO R. ELLO, As 4th Assistant of
II (Criminal Cases Nos. 1824, 1828, 1832, 1833 and 1839, respectively).
Provincial Bohol VICENTE DE LA SERNA. JR., as complainant all private
prosecutor, petitioners,
vs. Before the accused could be arraigned, Judge Echaves motu proprio issued an omnibus order
HON. VICENTE B. ECHAVES, JR., as Judge of the Court of First Instance of Bohol dated December 9, 1977 dismissing the five informations on the grounds (1) that it was alleged
Branch II, ANO DACULLO, GERONIMO OROYAN, MARIO APARICI, RUPERTO that the accused entered the land through "stealth and strategy", whereas under the decree the
CAJES and MODESTO S SUELLO, respondents. entry should be effected "with the use of force, intimidation or threat, or taking advantage of the
absence or tolerance of the landowner", and (2) that under the rule of ejusdem generis the decree
does not apply to the cultivation of a grazing land.

Because of that order, the fiscal amended the informations by using in lieu of "stealth and
AQUINO, J.:p
strategy" the expression "with threat, and taking advantage of the absence of the ranchowner
and/or tolerance of the said ranchowner". The fiscal asked that the dismissal order be
The legal issue in this case is whether Presidential Decree No. 772, which penalizes squatting reconsidered and that the amended informations be admitted.
and similar acts, applies to agricultural lands. The decree (which took effect on August 20, 1975)
provides:
The lower court denied the motion. It insisted that the phrase "and for other purposes" in the
decree does not include agricultural purposes because its preamble does not mention the
SECTION 1. Any person who, with the use of force, intimidation or Secretary of Agriculture and makes reference to the affluent class.
threat, or taking advantage of the absence or tolerance of the landowner,
succeeds in occupying or possessing the property of the latter against his
From the order of dismissal, the fiscal appealed to this Court under Republic Act No. 5440. The
will for residential, commercial or any other purposes, shall be punished
appeal is devoid of merit.
by an imprisonment ranging from six months to one year or a fine of not
less than one thousand nor more than five thousand pesos at the discretion
of the court, with subsidiary imprisonment in case of insolvency. (2nd We hold that the lower court correctly ruled that the decree does not apply to pasture lands
paragraph is omitted.) because its preamble shows that it was intended to apply to squatting in urban communities or
more particularly to illegal constructions in squatter areas made by well-to-do individuals. The
squating complained of involves pasture lands in rural areas.
The record shows that on October 25, 1977 Fiscal Abundio R. Ello filed with the lower court
separate informations against sixteen persons charging them with squatting as penalized by
Presidential Decree No. 772. The information against Mario Aparici which is similar to the other The preamble of the decree is quoted below:
fifteen informations, reads:
WHEREAS, it came to my knowledge that despite the issuance of Letter
That sometime in the year 1974 continuously up to the present at barangay of Instruction No. 19 dated October 2, 1972, directing the Secretaries of
Magsaysay, municipality of Talibon, province of Bohol, Philippines and National Defense, Public Work. 9 and communications, Social Welfare
within the jurisdiction of this Honorable Court, the above-named accused, and the Director of Public Works, the PHHC General Manager, the
with stealth and strategy, enter into, occupy and cultivate a portion of a Presidential Assistant on Housing and Rehabilitation Agency, Governors,
grazing land physically occupied, possessed and claimed by Atty. Vicente City and Municipal Mayors, and City and District Engineers, "to remove
de la Serna, Jr. as successor to the pasture applicant Celestino de la Serna an illegal constructions including buildings on and along esteros and river
of Pasture Lease Application No. 8919, accused's entrance into the area banks, those along railroad tracks and those built without permits on
has been and is still against the win of the offended party; did then and public and private property." squatting is still a major problem in urban
there willfully, unlawfully, and feloniously squat and cultivate a portion communities all over the country;
of the said grazing land; said cultivating has rendered a nuisance to and
has deprived the pasture applicant from the full use thereof for which the
WHEREAS, many persons or entities found to have been unlawfully
land applied for has been intended, that is preventing applicant's cattle
occupying public and private lands belong to the affluent class;
 WHEREAS, there is a need to further intensify the government's drive FIRST DIVISION
against this illegal and nefarious practice.
January 20, 2016
It should be stressed that Letter of Instruction No. 19 refers to illegal constructions on public and
private property. It is complemented by Letter of Instruction No. 19-A which provides for the
G.R. No. 180235
relocation of squatters in the interest of public health, safety and peace and order.

ALTA VISTA GOLF AND COUNTRY CLUB, Petitioner,

On the other hand, it should be noted that squatting on public agricultural lands, like the grazing
vs.
lands involved in this case, is punished by Republic Act No. 947 which makes it unlawful for
THE CITY OF CEBU, HON. MAYOR TOMAS R. OSMEÑA, in his capacity as Mayor of
any person, corporation or association to forcibly enter or occupy public agricultural lands. That
Cebu, and TERESITA C. CAMARILLO, in her capacity as the City Treasurer, Respondents.
law provides:

DECISION
SECTION 1. It shall be unlawful for any person corporation or association
to enter or occupy, through force, intimidation, threat, strategy or stealth,
any public agriculture land including such public lands as are granted to LEONARDO-DE CASTRO, J.:
private individuals under the provision of the Public Land Act or any other
laws providing for the of public agriculture lands in the Philippines and
are duly covered by the corresponding applications for the Before the Court is a Petition for Review on Certiorari of the Resolution1 dated March 14, 2007
notwithstanding standing the fact that title thereto still remains in the and the Order2 dated October 3, 2007 of the Regional Trial Court (RTC), Cebu City, Branch 9
in Civil Case No. CEB-31988, dismissing the Petition for Injunction, Prohibition, Mandamus,
Government or for any person, natural or judicial to investigate induce or
force another to commit such acts. Declaration of Nullity of Closure Order, Declaration of Nullity of Assessment, and Declaration
of Nullity of Section 42 of Cebu City Tax: Ordinance, with Prayer for Temporary Restraining
Order and Writ of Preliminary Injunction3 filed by petitioner Alta Vista Golf and Country Club
Violations of the law are punished by a fine of not exceeding one thousand or imprisonment for against respondents City of Cebu (Cebu City), then Cebu City Mayor Tomas R. Osmeña
not more than one year, or both such fine and imprisonment in the discretion of the court, with (Osmeña), and then Cebu City Treasurer Teresita Camarillo (Camarillo).
subsidiary imprisonment in case of insolvency. (See People vs. Lapasaran 100 Phil. 40.)
Petitioner is a non-stock and non-profit corporation operating a golf course in Cebu City.
The rule of ejusdem generis (of the same kind or species) invoked by the trial court does not
apply to this case. Here, the intent of the decree is unmistakable. It is intended to apply only to
On June 21, 1993, the Sangguniang Panlungsod of Cebu City enacted City Tax: Ordinance No.
urban communities, particularly to illegal constructions. The rule of ejusdem generis is merely a
tool of statutory construction which is resorted to when the legislative intent is uncertain (Genato LXIX, otherwise known as the "Revised Omnibus Tax: Ordinance of the City of Cebu" (Revised
Commercial Corp. vs. Court of Tax Appeals, 104 Phil. 615,618; 28 C.J.S. 1049-50). Omnibus Tax: Ordinance). Section 42 of the said tax ordinance on amusement tax was amended
by City Tax Ordinance Nos. LXXXII4 and LXXXIV5 (which were enacted by the Sangguniang
Panlungsod of Cebu City on December 2, 1996 and April 20, 1998, respectively6) to read as
WHEREFORE, the trial court's order of dismissal is affirmed. No costs. follows:

SO ORDERED. Section 42. Rate of Tax. - There shall be paid to the Office of the City Treasurer by the
proprietors, lessees or operators of theaters, cinemas, concert halls, circuses and other similar
places of entertainment, an amusement tax at the rate of thirty percent (30%), golf courses and
polo grounds at the rate of twenty percent (20% ), of their gross receipts on entrance, playing
green, and/or admission fees; PROVIDED, HOWEVER, That in case of movie premieres or gala
shows for the benefit of a charitable institution/foundation or any government institution where
higher admission fees are charged, the aforementioned rate of thirty percent (30%) shall be levied
against the gross receipts based on the regular admission fees, subject to the approval of the
Sangguniang Panlungsod; PROVIDED FURTHER, That in case payment of the amusement tax
is made promptly on or before the date hereinbelow prescribed, a rebate of five percent (5%) on
the aforementioned gross receipts shall be given to the proprietors, lessees or operators of
theaters; PROVIDED FURTHERMORE, that as an incentive to theater operators who own the
real property and/or building where the theater is located, an additional one percent (1 %) rebate
 shall be given to said operator/real property owner concerned for as long as their theater/movie
Non-Securing of Permit 979.33
houses are then (10) years old or older or the theater or movie house is located at the city's
redevelopment area bounded on the north by Gen. Maxilom Street up to the port area; on the
Sub-Total P 82,997.98
south by V. Rama Avenue up to San Nicolas area; and on the west by B. Rodriguez St. and
General Maxilom Avenue; PROVIDED FINALLY, that the proceeds of this additional one
Less: Payment based on computer assessment 74,858.61
percent (1 %) rebate shall be used by the building/property owner-theater operator to modernize
their theater facilities. (Emphases supplied.) Short payment P 12,723.18

25% surcharge 3,180.80

In an Assessment Sheet7 dated August 6, 1998, prepared by Cebu City Assessor Sandra I. Po,
72%
petitioner was originally assessed deficiency business taxes, fees, and other charges for theinterest
year 11,450.00
1998, in the total amount of P3,820,095.68, which included amusement tax on its golf course
amounting to P2,612,961.24 based on gross receipts of P13,064,806.20.8 Penalty for understatement 500.00

Amount Due P 27 ,854.85

Through the succeeding years, respondent Cebu City repeatedly attempted to collect from
petitioner its deficiency business taxes, fees, and charges for 1998, a substantial portionAdd: Amusement Tax on golf course
of which P 1,373,761.24
consisted of the amusement tax on the golf course. Petitioner steadfastly refused to pay the
amusement tax arguing that the imposition of said tax by Section 42 of the Revised25% surcharge (P6,868,806.20 x 20%)
Omnibus 343,440.31
Tax Ordinance, as amended, was irregular, improper, and illegal. Petitioner reasoned that under
72% Interest 1,236,385.12 2,953,586.67
the Local Government Code, amusement tax can only be imposed on operators of theaters,
cinemas, concert halls, or places where one seeks to entertain himself by seeing or viewing a
show or performance. Petitioner further cited the ruling in Philippine Basketball Association
GRAND TOTAL P 2,981,441.5210
(PBA) v. Court of Appeals9 that under Presidential Decree No. 231, otherwise known as the
Lo.cal Tax Code of 1973, the province could only impose amusement tax on admission from the
proprietors, lessees, or operators of theaters, cinematographs, concert halls, circuses, and other
places of amusement, but not professional basketball games. Professional basketball games did (Emphasis supplied.)
not fall under the same category as theaters, cinematographs, concert halls, and circuses as the
latter basically belong to artistic forms of entertainment while the former catered to sports and
gaming. Petitioner, through counsel, wrote respondent Camarillo a letter11 dated October 17, 2005 still
disputing the amusement tax assessment on its golf course for 1998 for being illegal. Petitioner,
in a subsequent letter dated November 30, 2005, proposed that:
Through a letter dated October 11, 2005, respondent Camarillo sought to collect once more from
petitioner deficiency business taxes, fees, and charges for the year 1998, totaling P2,981,441.52,
computed as follows: While the question of the legality of the amusement tax on golf courses is still unresolved, may
we propose that Alta Vista Golf and Country Club settle first the other assessments contained in
your Assessment Sheet issued on October 11, 2005.
Restaurant - P4,021,830.65 P 40,950.00

Permit Fee 2,000.00 At this early stage, we also request that pending resolution of the legality of the amusement tax
imposition on golf courses in [the Revised Omnibus Tax Ordinance, as amended], Alta Vista
Liquor-Pl,940,283.80 20,160.00 Golf and Country Club be issued the required Mayor's and/or Business Permit.12

Permit Fee 2,000.00

Respondent Camarillo treated the letter dated October 17, 2005 of petitioner as a Protest of
Commission/Other Income 14,950.00 Assessment and rendered on December 5, 2005 her ruling denying said Protest on the following
grounds: (a) a more thorough and comprehensive reading of the PBA case would reveal that the
P 1,262,764.28 Court actually ruled therein that PBA was liable to pay amusement tax, but to the national
government, not the local government; (b) section 42 of the Revised Omnibus Tax Ordinance,
Permit Fee 1,874.00 as amended, enjoyed the presumption of constitutionality and petitioner failed to avail itself of
the remedy under Section 187 of the Local Government Code to challenge the legality or validity
Retail Cigarettes - P42,076. 11 - Permit 84.15 of Section 42 of the Revised Omnibus Tax Ordinance, as amended, by filing an appeal with the
Secretary of Justice within 30 days from effectivity of said ordinance; and ( c) the Office of the
City Attorney issued a letter dated July 9, 2004 affirming respondent Camarillo's position that the powers expressly granted, those necessarily implied therefrom, as well as powers necessary,
petitioner was liable to pay amusement tax on its golf course.13 Ultimately, respondent Camarillo appropriate, or incidental of its efficient and effective governance, and those which are essential
held: to the promotion of the general welfare."

WHEREFORE, upon consideration of the legal grounds as above-mentioned, we reiterate our This CLOSURE ORDER precisely satisfies these legal precedents. Hence now, in view whereof,
previous stand on the validity of the ASSESSMENT SHEET pertaining to the Tax Deficiencies your business establishment is hereby declared closed in direct contravention of the above-
for CY 1998 and this ruling serve as the FINAL DEMAND for immediate settlement and specified laws and city ordinances. Please cease and desist from further operating your business
payment of your amusement tax liabilities and/or delinquencies otherwise we will constrained immediately upon receipt of this order.
(sic) the non-issuance of a Mayor's Business Permit for nonpayment of the said deficiency on
amusement tax and/or other tax liabilities as well as to file the appropriate filing of administrative
This closure order is without prejudice to the constitutional/statutory right of the City to file
and judicial remedies for the collection of the said tax liability and the letter treated as a Protest
criminal cases against corporate officers, who act for and its behalf, for violations of Section 114
of Assessment that was duly submitted before this office is hereby DENIED.14
of the REVISED CITY TAX ORDINANCE OF THE CITY OF CEBU and Section 516 of the
LOCAL GOVERNMENT CODE, with penalties of imprisonment and/or fine.
Shortly after, on January 12, 2006, petitioner was served with a Closure Order15 dated December
28, 2005 issued by respondent City Mayor Osmeña. According to the Closure Order, petitioner
FOR STRICT AND IMMEDIATE COMPLIANCE.16
committed blatant violations of the laws and Cebu City Ordinances, to wit:

The foregoing developments prompted petitioner to file with the RTC on January 13, 2006 a
1. Operating a business without a business permit for five (5) years, from year
Petition for Injunction, Prohibition, Mandamus, Declaration of Nullity of Closure Order,
2001-2005, in relation to Chapters I and II and the penalty clauses under Sections 4,
Declaration of Nullity of Assessment, and Declaration of Nullity of Section 42 of Cebu City Tax
6, 8, 66 (f) and 114 of the City Tax Ordinance No. 69, otherwise known as the
Ordinance, with Prayer for Temporary Restraining Order and Writ of Preliminary Injunction,
REVISED CITY TAX ORDINANCE OF THE CITY OF CEBU, as amended By
against respondents, which was docketed as Civil Case No. CEB-31988.17 Petitioner eventually
C.O. 75;
filed an Amended Petition on January 19, 2006.18 Petitioner argued that the Closure Order is
unconstitutional as it had been summarily issued in violation of its right to due process; a city
2. Nonpayment of deficiency on Business Taxes and Fees amounting to mayor has no power under the Local Government Code to deny the issuance of a business permit
Seventeen Thousand Four Hundred Ninety-Nine Pesos and Sixty-Four Centavos and order the closure of a business for nonpayment of taxes; Section 42 of the Revised Omnibus
(Php17,499.64), as adjusted, despite repeated demands in violation [of] Sections 4 Tax Ordinance, as amended, is null and void for being ultra vires or beyond the taxing authority
and 8 of City Tax Ordinance No. 69, as amended; of respondent Cebu City, and consequently, the assessment against petitioner for amusement tax
for 1998 based on said Section 42 is illegal and unconstitutional; and assuming arguendo that
respondent Cebu City has the power to impose amusement tax on petitioner, such tax for 1998
3. Nonpayment of deficiency on Amusement Tax and the penalties relative
already prescribed and could no longer be enforced.
therewith totaling Two Million Nine Hundred Fifty-Three Thousand Five
Hundred Eighty-Six Pesos and Eighty-Six Centavos (Php2,953,586.86) in
violation of Sections 4 and 8 in relation to Section 42 of City Tax Ordinance No. 69, Respondents filed a Motion to Dismiss based on the grounds of (a) lack of jurisdiction of the
as amended, business permit-violation of the Article 172, Revised Penal Code of the RTC over the subject matter; (b) non-exhaustion of administrative remedies; (c) noncompliance
Philippines. (Emphases supplied.) with Section 187 of the Local Government Code, which provides the procedure and prescriptive
periods for challenging the validity of a local tax ordinance; (d) noncompliance with Section 252
of the Local Government Code and Section 75 of Republic Act No. 3857, otherwise known as
The Closure Order established respondent Mayor Osmeña's authority for issuance of the same
the Revised Charter of the City of Cebu, requiring payment under protest of the tax assessed;
and contained the following directive:
and (e) failure to establish the authority of Ma. Theresa Ozoa (Ozoa) to institute the case on
behalf of petitioner.19
As the chief executive of the City, the Mayor has the power and duty to: Enforce all laws and
ordinances relative to the governance of the city x x x and, in addition to the foregoing, shall x
In its Opposition to the Motion to Dismiss, petitioner countered that the RTC, a court of general
x x Issue such executive orders for the faithful and appropriate enforcement and execution of
jurisdiction, could take cognizance of its Petition in Civil Case No. CEB-31988, which not only
laws and ordinances x x x.1âwphi1 These are undeniable in the LOCAL GOVERNMENT
involved the issue of legality or illegality of a tax ordinance, but also sought the declaration of
CODE, Section 455, par. (2) and par. (2)(iii).
nullity of the Closure Order and the issuance of writs of injunction and prohibition. Petitioner
likewise asserted that Section 195 of the Local Government Code on the protest of assessment
Not only that, these powers can be exercised under the general welfare clause of the Code, does not require payment under protest. Section 252 of the same Code invoked by respondents
particularly Section 16 thereof, where it is irrefutable that "every government unit shall exercise applies only to real property taxes. In addition, petitioner maintained that its Petition in Civil
Case No. CEB-31988 could not be barred by prescription. There is nothing in the Local Mayor refused the issuance of the business permit because all the requisites for the issuance of
Government Code that could deprive the courts of the power to determine the constitutionality the said permit are all complied with.24
or validity of a tax ordinance due to prescription. It is the constitutional duty of the courts to pass
upon the validity of a tax ordinance and such duty cannot be limited or restricted. Petitioner
On March 20, 2006, petitioner paid under protest to respondent Cebu City, through respondent
further contended that there is no need for exhaustion of administrative remedies given that the
Camarillo, the assessed amusement tax, plus penalties, interest, and surcharges, in the total
issues involved are purely legal; the notice of closure is patently illegal for having been issued
amount of P2,750,249.17.25
without due process; and there is an urgent need for judicial intervention. Lastly, petitioner
pointed out that there were sufficient allegations in the Petition that its filing was duly authorized
by petitioner. At any rate, petitioner already attached to its Opposition its Board Resolution No. Since the parties agreed that the issues raised in Civil Case No. CEB-31988 were all legal in
104 authorizing Ozoa to file a case to nullify the Closure Order. Thus, petitioner prayed for the nature, the RTC already considered the case submitted for resolution after the parties filed their
denial of the Motion to Dismiss.20 respective Memorandum.26

Respondents, in their Rejoinder to Petitioner's Opposition to the Motion to Dismiss, 21 asserted On March 14, 2007, the R TC issued a Resolution granting the Motion to Dismiss of respondents.
that the Closure Order was just a necessary consequence of the nonpayment by petitioner of the Quoting from Reyes and Hagonoy Market Vendor Association v. Municipality of Hagonoy,
amusement tax assessed against it. The Revised Omnibus Tax Ordinance of respondent Cebu Bulacan,27 the RTC sustained the position of respondents that Section 187 of the Local
City directs that no permit shall be issued to a business enterprise which made no proper payment Government Code is mandatory. Thus, the RTC adjudged:
of tax and, correspondingly, no business enterprise may be allowed to operate or continue to
operate without a business permit. The fundamental issue in the case was still the nonpayment
by petitioner of amusement tax. Respondents relied on Reyes v. Court of Appeals,22 in which the From the above cited cases, it can be gleaned that the period in the filing of the protests is
important. In other words, it is the considered opinion of this court [that] when a taxpayer
Court categorically ruled that the prescriptive periods fixed in Section 187 of the Local
Government Code are mandatory and prerequisites before seeking redress from a competent questions the validity of a tax ordinance passed by a local government legislative body, a
court. Section 42 of the Revised Omnibus Tax Ordinance, as amended, was passed on April 20, different procedure directed in Section 187 is to be followed. The reason for this could be because
the tax ordinance is clearly different from a law passed by Congress. The local government code
1998, so the institution by petitioner of Civil Case No. CEB-31988 before the RTC on January
13, 2006 - without payment under protest of the assessed amusement tax and filing of an appeal has set several limitations on the taxing power of the local government legislative bodies
before the Secretary of Justice within 30 days from the effectivity of the Ordinance - was long including the issue of what should be taxed.
barred by prescription.
In this case, since the Petitioner failed to comply with the procedure outlined in Section 187 of
After filing by the parties of their respective Memorandum, the RTC issued an Order23 dated the Local Government Code and the fact that this case was filed way beyond the period to file a
March 16, 2006 denying the prayer of petitioner for issuance of a Temporary Restraining Order case in court, then this court believes that the action must fail.
(TRO). The RTC found that when the business permit of petitioner expired and it was operating
without a business permit, it ceased to have a legal right to do business. The RTC affirmed Because of the procedural infirmity in bringing about this case to the court, then the substantial
respondent Mayor Osmeña's authority to issue or grant business licenses and permits pursuant issue of the propriety of imposing amusement taxes on the green fees could no longer be
to the police power inherent in his office; and such authority to issue or grant business licenses determined.
and permits necessarily included the authority to suspend or revoke or even refuse the issuance
of the said business licenses and permits in case of violation of the conditions for the issuance
of the same. The RTC went on to hold that: WHEREFORE, in view of the aforegoing, this case is hereby DISMISSED. 28

[Petitioner] was given opportunities to be heard when it filed a protest [of] the assessment which The RTC denied the Motion for Reconsideration of petitioner in an Order dated October 3, 2007.
was subsequently denied. To the mind of this court, this already constitutes the observance of
due process and that [petitioner] had already been given the opportunity to be heard. Due process Petitioner is presently before the Court on pure questions of law, viz.:
and opportunity to be heard does not necessarily mean winning the argument in one's favor but
to be given the fair chance to explain one's side or views with regards [to] the matter in issue,
which in this case is the legality of the tax assessment. I. WHETHER OR NOT THE POWER OF JUDICIAL REVIEW OVER THE VALIDITY OF
A LOCAL TAX ORDINANCE HAS BEEN RESTRICTED BY SECTION 187 OF THE
LOCAL GOVERNMENT CODE.
It is therefore clear that when this case was filed, [petitioner] had no more legal right in its favor
for the courts to protect. It would have been a different story altogether had [petitioner] paid the
tax assessment for the green fees even under protest and despite payment and [respondent] II. WHETHER OR NOT THE CITY OF CEBU OR ANY LOCAL GOVERNMENT CAN
VALIDLY IMPOSE AMUSEMENT TAX TO THE ACT OF PLAYING GOLF.29
There is merit in the instant Petition. the Secretary of Justice acting upon the appeal, the aggrieved party may file appropriate
proceedings with a court of competent jurisdiction.
The RTC judgment on pure questions of law may be directly appealed to this Court via a
petition for review on certiorari. Indeed, the Court established in Reyes that the aforequoted provision is a significant procedural
requisite and, therefore, mandatory:
Even before the RTC, the parties already acknowledged that the case between them involved
only questions of law; hence, they no longer presented evidence and agreed to submit the case Clearly, the law requires that the dissatisfied taxpayer who questions the validity or legality of a
for resolution upon submission of their respective memorandum. tax ordinance must file his appeal to the Secretary of Justice, within 30 days from effectivity
thereof. In case the Secretary decides the appeal, a period also of 30 days is allowed for an
aggrieved party to go to court. But if the Secretary does not act thereon, after the lapse of 60
It is incontestable that petitioner may directly appeal to this Court from the judgment of the RTC
days, a party could already proceed to seek relief in court. These three separate periods are clearly
on pure questions of law via its Petition for Review on Certiorari. Rule 41, Section 2(c) of the
given for compliance as a prerequisite before seeking redress in a competent court. Such statutory
Rules of Court provides that "[i]n all cases where only questions of law are raised or involved,
periods are set to prevent delays as well as enhance the orderly and speedy discharge of judicial
the appeal shall be to the Supreme Court by petition for review on certiorari in accordance with
functions. For this reason the courts construe these provisions of statutes as mandatory.
Rule 45." As the Court declared in Bonifacio v. Regional Trial Court of Makati, Branch 14930:

A municipal tax ordinance empowers a local government unit to impose taxes. The power to tax
The established policy of strict observance of the judicial hierarchy of courts, as a rule, requires
is the most effective instrument to raise needed revenues to finance and support the myriad
that recourse must first be made to the lowerranked court exercising concurrent jurisdiction with
activities of local government units for the delivery of basic services essential to the promotion
a higher court. A regard for judicial hierarchy clearly indicates that petitions for the issuance of
of the general welfare and enhancement of peace, progress, and prosperity of the people.
extraordinary writs against first level courts should be filed in the RTC and those against the
Consequently, any delay in implementing tax measures would be to the detriment of the public.
latter should be filed in the Court of Appeals. The rule is not iron-clad, however, as it admits of
It is for this reason that protests over tax ordinances are required to be done within certain time
certain exceptions.
frames. In the instant case, it is our view that the failure of petitioners to appeal to the Secretary
of Justice within 30 days as required by Sec. 187 of R.A. 7160 is fatal to their cause.32 (Citations
Thus, a strict application of the rule is unnecessary when cases brought before the appellate omitted.)
courts do not involve factual but purely legal questions. (Citations omitted.)
The Court further affirmed in Hagonoy that:
"A question of law exists when the doubt or controversy concerns the correct application of law
or jurisprudence to a certain set of facts; or when the issue does not call for an examination of
At this point, it is apropos to state that the timeframe fixed by law for parties to avail of their
the probative value of the evidence presented, the truth or falsehood of facts being admitted[;]"
legal remedies before competent courts is not a "mere technicality" that can be easily brushed
and it may be brought directly before this Court, the undisputed final arbiter of all questions of
aside. The periods stated in Section 187 of the Local Government Code are
law.31
mandatory. Ordinance No. 28 is a revenue measure adopted by the municipality of Hagonoy to
fix and collect public market stall rentals. Being its lifeblood, collection of revenues by the
The present case is an exception to Section 187 of the Local Government Code and the government is of paramount importance. The funds for the operation of its agencies and
doctrine of exhaustion of administrative remedies. provision of basic services to its inhabitants are largely derived from its revenues and collections.
Thus, it is essential that the validity of revenue measures is not left uncertain for a considerable
length of time. Hence, the law provided a time limit for an aggrieved party to assail the legality
Section 187 of the Local Government Code reads:
of revenue measures and tax ordinances.33 (Citations omitted.)

Sec. 187. Procedure ·for Approval and Effectivity of Tax Ordinances and Revenue Measures; Nevertheless, in later cases, the Court recognized exceptional circumstances that justify
Mandatory Public Hearings. – The procedure for approval of local tax ordinances and revenue
noncompliance by a taxpayer with Section 187 of the Local Government Code.
measures shall be in accordance with the provisions of this Code: Provided, That public hearings
shall be conducted for the purpose prior to the enactment thereof: Provided, further, That any
question on the constitutionality or legality of tax ordinances or revenue measures may be raised The Court ratiocinated in Ongsuco v. Malones,34 thus:
on appeal within thirty (30) days from the effectivity thereof to the Secretary of Justice who shall
render a decision within sixty (60) days from the date of receipt of the appeal: Provided,
It is true that the general rule is that before a party is allowed to seek the intervention of the court,
however, That such appeal shall not have the effect of suspending the effectivity of the ordinance
he or she should have availed himself or herself of all the means of administrative processes
and the accrual and payment of the tax, fee, or charge levied therein: Provided, finally, That
afforded him or her. Hence, if resort to a remedy within the administrative machinery can still
within thirty (30) days after receipt of the decision or the lapse of the sixty-day period without
be made by giving the administrative officer concerned every opportunity to decide on a matter ordinances) in the first instance, without deciding questions which pertain to legislative policy.
that comes within his or her jurisdiction, then such remedy should be exhausted first before the (Emphases supplied, citations omitted.)
court's judicial power can be sought. The premature invocation of the intervention of the court
is fatal to one's cause of action. The doctrine of exhaustion of administrative remedies is based
In Cagayan Electric Power and Light Co., Inc. (CEPALCO) v. City of Cagayan De Oro, 35 the
on practical and legal reasons. The availment of administrative remedy entails lesser expenses
Court initially conceded that as in Reyes, the failure of taxpayer CEPALCO to appeal to the
and provides for a speedier disposition of controversies. Furthermore, the courts of justice, for
Secretary of Justice within the statutory period of 30 days from the effectivity of the ordinance
reasons of comity and convenience, will shy away from a dispute until the system of
should have been fatal to its cause. However, the Court purposefully relaxed the application of
administrative redress has been completed and complied with, so as to give the administrative
the rules in view of the more substantive matters.
agency concerned every opportunity to correct its error and dispose of the case. However, there
are several exceptions to this rule.
Similar to Ongsuco and CEPALCO, the case at bar constitutes an exception to the general rule.
Not only does the instant Petition raise pure questions of law, but it also involves substantive
The rule on the exhaustion of administrative remedies is intended to preclude a court from
matters imperative for the Court to resolve.
arrogating unto itself the authority to resolve a controversy, the jurisdiction over which is initially
lodged with an administrative body of special competence. Thus, a case where the issue raised
is a purely legal question, well within the competence; and the jurisdiction of the court and Section 42 of the Revised Omnibus Tax Ordinance, as amended, imposing amusement tax on
not the administrative agency, would clearly constitute an exception. Resolving questions golf courses is null and void as it is beyond the authority of respondent Cebu City to enact
of law, which involve the interpretation and application of laws, constitutes essentially an under the Local Government Code.
exercise of judicial power that is exclusively allocated to the Supreme Court and such lower
courts the Legislature may establish.
The Local Government Code authorizes the imposition by local government units of amusement
tax under Section 140, which provides:
In this case, the parties are not disputing any factual matter on which they still need to
present evidence. The sole issue petitioners raised before the RTC in Civil Case No. 25843 was
Sec. 140. Amusement Tax. - (a) The province may levy an amusement tax to be collected from
whether Municipal Ordinance No. 98-01 was valid and enforceable despite the absence, prior to
its enactment, of a public hearing held in accordance with Article 276 of the Implementing Rules the proprietors, lessees, or operators of theaters, cinemas, concert halls, circuses, boxing
and Regulations of the Local Government Code. This is undoubtedly a pure question of law, stadia, and other places of amusement at a rate of not more than thirty percent (30%) of the
gross receipts from admission fees.
within the competence and jurisdiction of the RTC to resolve.

Paragraph 2(a) of Section 5, Article VIII of the Constitution, expressly establishes the appellate (b) In the case of theaters or cinemas, the tax shall first be deducted and withheld by
their proprietors, lessees, or operators and paid to the provincial treasurer before the
jurisdiction of this Court, and impliedly recognizes the original jurisdiction of lower courts over
cases involving the constitutionality or validity of an ordinance: gross receipts are divided between said proprietors, lessees, or operators and the
distributors of the cinematographic films.

Section 5. The Supreme Court shall have the following powers:

(c) The holding of operas, concerts, dramas, recitals, painting, and art exhibitions,
flower shows, musical programs, literary and oratorical presentations, except pop,
xxxx rock, or similar concerts shall be exempt from the payment of the tax hereon imposed.

(2) Review, revise, reverse, modify or affirm on appeal or certiorari, as the law or (d) The sangguniang panlalawigan may prescribe the time, manner, terms and
the Rules of Court may provide, final judgments and orders of lower courts in: conditions for the payment of tax. In case of fraud or failure to pay the tax,
the sangguniang panlalawigan may impose such surcharges, interests and penalties
as it may deem appropriate.
(a) All cases in which the constitutionality or validity of any treaty, international or
executive agreement, law, presidential decree, proclamation, order,
instruction, ordinance, or regulation is in question. (e) The proceeds from the amusement tax shall be shared equally by the province and
"the municipality where such amusement places are located. (Emphasis supplied.)
In J.M Tuason and Co., Inc. v. Court of Appeals, Ynot v. Intermediate Appellate
Court, and Commissioner of Internal Revenue v. Santos, the Court has affirmed the jurisdiction "Amusement places," as defined in Section 13l(c) of the Local Government Code, "include
of the RTC to resolve questions of constitutionality and validity of laws (deemed to include local theaters, cinemas, concert halls, circuses and other places of amusement where one seeks
admission to entertain oneself by seeing or viewing the show or performance."
The pronouncements of the Court in Pelizloy Realty Corporation v. The Province of However, even as the phrase 'other places of amusement' was already clarified in Philippine
Benguet36 are of particular significance to this case. The Court, in Pelizloy Realty, declared null Basketball Association, Section 140 of the LGC adds to the enumeration of 'places of
and void the second paragraph of Article X, Section 59 of the Benguet Provincial Code, in so far amusement' which may properly be subject to amusement tax. Section 140 specifically mentions
as it imposes amusement taxes on admission fees to resorts, swimming pools, bath houses, hot 'boxing stadia' in addition to "theaters, cinematographs, concert halls [and] circuses" which were
springs, and tourist spots. Applying the principle of ejusdem generis, as well as the ruling in already mentioned in PD No. 231. Also, 'artistic expression' as a characteristic does not pertain
the PBA case, the Court expounded on the authority of local government units to impose to 'boxing stadia'.
amusement tax under Section 140, in relation to Section 131(c), of the Local Government Code,
as follows:
In the present case, the Court need not embark on a laborious effort at statutory construction.
Section 131 (c) of the LGC already provides a clear definition of' amusement places':
Under the principle of ejusdem generis, "where a general word or phrase follows an enumeration
of particular and specific words of the same class or where the latter follow the former, the
xxxx
general word or phrase is to be construed to include, or to be restricted to persons, things or cases
akin to, resembling, or of the same kind or class as those specifically mentioned."
Indeed, theaters, cinemas, concert halls, circuses, and boxing stadia are bound by a
common typifying characteristic in that they are all venues primarily for the staging of
The purpose and rationale of the principle was explained by the Court in National Power
spectacles or the holding of public shows, exhibitions, performances, and other events
Corporation v. Angas as follows:
meant to be viewed by an audience. Accordingly, 'other places of amusement' must be
interpreted in light of the typifying characteristic of being venues "where one seeks
The purpose of the rule on ejusdem generis is to give effect to both the particular and general admission to entertain oneself by seeing or viewing the show or performances" or being
words, by treating the particular words as indicating the class and the general words as including venues primarily used to stage spectacles or hold public shows, exhibitions, performances,
all that is embraced in said class, although not specifically named by the particular words. This and other events meant to be viewed by an audience.
is justified on the ground that if the lawmaking body intended the general terms to be used in
their unrestricted sense, it would have not made an enumeration of particular subjects but would
As defined in The New Oxford American Dictionary, 'show' means "a spectacle or display of
have used only general terms. [2 Sutherland, Statutory Construction, 3rd ed., pp. 395-400].
something, typically an impressive one"; while 'performance' means "an act of staging or
presenting a play, a concert, or other form of entertainment." As such, the ordinary definitions
In Philippine Basketball Association v. Court of Appeals, the Supreme Court had an opportunity of the words 'show' and 'performance' denote not only visual engagement (i.e., the seeing
to interpret a starkly similar provision or the counterpart provision of Section 140 of the LGC in or viewing of things) but also active doing (e.g., displaying, staging or presenting) such that
the Local Tax Code then in effect. Petitioner Philippine Basketball Association (PBA) contended actions are manifested to, and (correspondingly) perceived by an audience.
that it was subject to the imposition by LGUs of amusement taxes (as opposed to amusement
taxes imposed by the national government). In support of its contentions, it cited Section 13 of
Considering these, it is clear that resorts, swimming pools, bath houses, hot springs and tourist
Presidential Decree No. 231, otherwise known as the Local Tax Code of 1973, (which is
spots cannot be considered venues primarily "where one seeks admission to entertain oneself by
analogous to Section 140 of the LGC) providing the following:
seeing or viewing the show or performances". While it is true that they may be venues where
people are visually engaged, they are not primarily venues for their proprietors or operators to
Section 13. Amusement tax on admission. – The province shall impose a tax on admission to be actively display, stage or present shows and/or performances.
collected from the proprietors, lessees, or operators of theaters, cinematographs, concert halls,
circuses and other places of amusement x x x.
Thus, resorts, swimming pools, bath houses, hot springs and tourist spots do not belong to the
same category or class as theaters, cinemas, concert halls, circuses, and boxing stadia. It follows
Applying the principle of ejusdem generis, the Supreme Court rejected PBA's assertions and that they cannot be considered as among the 'other places of amusement' contemplated by
rioted that: Section 140 of the LGC and which may properly be subject to amusement taxes. 37 (Emphases
supplied, citations omitted.)
[I]n determining the meaning of the phrase 'other places of amusement', one must refer to the
prior enumeration of theaters, cinematographs, concert halls and circuses with artistic expression In light of Pelizloy Realty, a golf course cannot be considered a place of amusement. As
as their common characteristic. Professional basketball games do not fall under the same petitioner asserted, people do not enter a golf course to see or view a show or performance.
category as theaters, cinematographs, concert halls and circuses as the latter basically belong to Petitioner also, as proprietor or operator of the golf course, does not actively display, stage, or
artistic forms of entertainment while the former caters to sports and gaming. present a show or performance. People go to a golf course to engage themselves in a physical
sport activity, i.e., to play golf; the same reason why people go to a gym or court to play
badminton or tennis or to a shooting range for target practice, yet there is no showing herein that
such gym, court, or shooting range is similarly considered an amusement place subject to
amusement tax. There is no basis for singling out golf courses for amusement tax purposes from TERESITA J. LEONARDO-DE CASTRO
other places where people go to play sports. This is in contravention of one of the fundamental Associate Justice
principles of local taxation: that the "[t]axation shall be uniform in each local government
unit."38 Uniformity of taxation, like the kindred concept of equal protection, requires that all
WE CONCUR:
subjects or objects of taxation, similarly situated, are to be treated alike both in privileges and
liabilities.39
EN BANC
40
Not lost on the Court is its declaration in Manila Electric Co. v. Province of Laguna that under
the 1987 Constitution, "where there is neither a grant nor a prohibition by statute, the tax power G.R. No. 169435 February 27, 2008
[of local government units] must be deemed to exist although Congress may provide statutory
limitations and guidelines." Section 186 of the Local Government Code also expressly grants
local government units the following residual power to tax: MUNICIPALITY OF NUEVA ERA, ILOCOS NORTE, represented by its Municipal
Mayor, CAROLINE ARZADON-GARVIDA, petitioner,
vs.
Sec. 186. Power to Levy Other Taxes; Fees, or Charges. – Local government units may exercise MUNICIPALITY OF MARCOS, ILOCOS NORTE, represented by its Municipal Mayor,
the power to levy taxes, fees, or charges on any base or subject not otherwise specifically SALVADOR PILLOS, and the HONORABLE COURT OF APPEALS, respondents.
enumerated herein or taxed under the provisions of the National Internal Revenue Code,
as amended, or other applicable laws: Provided, that the taxes, fees, or charges shall not be
unjust, excessive, oppressive, confiscatory or contrary to declared national policy: Provided, DECISION
further, That the ordinance levying such taxes, fees or charges shall not be enacted without any
prior public hearing conducted for the purpose.1awp++i1 (Emphasis supplied.) REYES, R.T., J.:

Respondents, however, cannot claim that Section 42 of the Revised Omnibus Tax Ordinance, as AS the law creating a municipality fixes its boundaries, settlement of boundary disputes between
amended, imposing amusement tax on golf courses, was enacted pursuant to the residual power municipalities is facilitated by carrying into effect the law that created them.
to tax of respondent Cebu City. A local government unit may exercise its residual power to tax
when there is neither a grant nor a prohibition by statute; or when such taxes, fees, or charges
are not otherwise specifically enumerated in the Local Government Code, National Internal Any alteration of boundaries that is not in accordance with the law creating a municipality is not
Revenue Code, as amended, or other applicable laws. In the present case, Section 140, in relation the carrying into effect of that law but its amendment, which only the Congress can do.1
to Section 131 (c), of the Local Government Code already explicitly and clearly cover
amusement tax and respondent Cebu City must exercise its authority to impose amusement tax For Our review on certiorari is the Decision2 of the Court of Appeals (CA) reversing to a certain
within the limitations and guidelines as set forth in said statutory provisions. extent that3 of the Regional Trial Court (RTC), Branch 12, Laoag City, Ilocos Norte, in a case
that originated from the Sangguniang Panlalawigan (SP) of Ilocos Norte about the boundary
WHEREFORE, in view of all the foregoing, the Court GRANTS the instant Petition, dispute between the Municipalities of Marcos and Nueva Era in Ilocos Norte.
and REVERSES and SETS ASIDE the Resolution dated March 14, 2007 and the Order dated
October 3, 2007 of the Regional Trial Court, Cebu City, Branch 9 in Civil Case No. CEB-31988. The CA declared that Marcos is entitled to have its eastern boundary extended up "to the
The Court DECLARES NULL and VOID the following: (a) Section 42 of the Revised boundary line between the province of Ilocos Norte and Kalinga-Apayao."4 By this extension of
Omnibus Tax Ordinance of the City of Cebu, as amended by City Tax Ordinance Nos. LXXXII Marcos' eastern boundary, the CA allocated to Marcos a portion of Nueva Era's territory.
and LXXXIV, insofar as it imposes amusement tax of 20% on the gross receipts on entrance,
playing green, and/or admission fees of golf courses; (b) the tax assessment against petitioner
for amusement tax on its golf course for the year 1998 in the amount of Pl,373,761.24, plus The Facts
surcharges and interest pertaining to said amount, issued by the Office of the City Treasurer,
City of Cebu; and (c) the Closure Order dated December 28, 2005 issued against Alta Vista Golf The Municipality of Nueva Era was created from the settlements of Bugayong, Cabittaoran,
and Country Club by the Office of the Mayor, City of Cebu. The Court also ORDERS the City Garnaden, Padpadon, Padsan, Paorpatoc, Tibangran, and Uguis which were previously
of Cebu to refund to Alta Vista Golf and Country Club the amusement tax, penalties, surcharge, organized as rancherias, each of which was under the independent control of a chief. Governor
and interest paid under protest by the latter in the total amount of P2, 750,249 .17 or to apply the General Francis Burton Harrison, acting on a resolution passed by the provincial government of
same amount as tax credit against existing or future tax liability of said Club. Ilocos Norte, united these rancherias and created the township of Nueva Era by virtue of
Executive Order (E.O.) No. 66 5 dated September 30, 1916.
SO ORDERED.
The Municipality of Marcos, on the other hand, was created on June 22, 1963 pursuant to reasoning was founded upon the fact that Nueva Era was between Marcos and the Ilocos Norte-
Republic Act (R.A.) No. 3753 entitled "An Act Creating the Municipality of Marcos in the Apayao boundary such that if Marcos was to be bounded on the east by the Ilocos Norte-Apayao
Province of Ilocos Norte." Section 1 of R.A. No. 3753 provides: boundary, part of Nueva Era would consequently be obtained by it. 6

SECTION 1. The barrios of Capariaan, Biding, Escoda, Culao, Alabaan, Ragas and Marcos did not claim any part of Nueva Era as its own territory until after almost 30 years, 7 or
Agunit in the Municipality of Dingras, Province of Ilocos Norte, are hereby separated only on March 8, 1993, when its Sangguniang Bayan passed Resolution No. 93-015.8 Said
from the said municipality and constituted into a new and separate municipality to be resolution was entitled: "Resolution Claiming an Area which is an Original Part of Nueva Era,
known as the Municipality of Marcos, with the following boundaries: But Now Separated Due to the Creation of Marcos Town in the Province of Ilocos Norte."

On the Northwest, by the barrios Biding-Rangay boundary going down to the barrios Marcos submitted its claim to the SP of Ilocos Norte for its consideration and approval. The SP,
Capariaan-Gabon boundary consisting of foot path and feeder road; on the Northeast, on the other hand, required Marcos to submit its position paper.9
by the Burnay River which is the common boundary of barrios Agunit and
Naglayaan; on the East, by the Ilocos Norte-Mt. Province boundary; on the South, by
In its position paper, Marcos alleged that since its northeastern and eastern boundaries under
the Padsan River which is at the same time the boundary between the municipalities
R.A. No. 3753 were the Burnay River and the Ilocos Norte-Mountain Province boundary,
of Banna and Dingras; on the West and Southwest, by the boundary between the
respectively, its eastern boundary should not be limited to the former Dingras-Nueva Era
municipalities of Batac and Dingras.
boundary, which was coterminous and aligned with the eastern boundary of Dingras. According
to Marcos, its eastern boundary should extend further to the east or up to the Ilocos-Norte-Mt.
The Municipality of Marcos shall have its seat of government in the barrio of Biding. Province boundary pursuant to the description of its eastern boundary under R.A. No. 3753. 10

Based on the first paragraph of the said Section 1 of R.A. No. 3753, it is clear that Marcos shall In view of its claim over the middle portion of Nueva Era, Marcos posited that Nueva Era was
be derived from the listed barangays of Dingras, namely: Capariaan, Biding, Escoda, Culao, cut into two parts. And since the law required that the land area of a municipality must be
Alabaan, Ragas and Agunit. The Municipality of Nueva Era or any of its barangays was not compact and contiguous, Nueva Era's northern isolated portion could no longer be considered as
mentioned. Hence, if based only on said paragraph, it is clear that Nueva Era may not be its territory but that of Marcos'. Thus, Marcos claimed that it was entitled not only to the middle
considered as a source of territory of Marcos. portion11 of Nueva Era but also to Nueva Era's isolated northern portion. These areas claimed by
Marcos were within Barangay Sto. Niño, Nueva Era.
There is no issue insofar as the first paragraph is concerned which named only Dingras as the
mother municipality of Marcos. The problem, however, lies in the description of Marcos' Nueva Era reacted to the claim of Marcos through its Resolution No. 1, Series of 1993. It alleged
boundaries as stated in the second paragraph, particularly in the phrase: "on the East, by the that since time immemorial, its entire land area was an ancestral domain of the "tinguians," an
Ilocos Norte-Mt. Province boundary." indigenous cultural community. It argued to the effect that since the land being claimed by
Marcos must be protected for the tinguians, it must be preserved as part of Nueva Era.12
It must be noted that the term "Mt. Province" stated in the above phrase refers to the present
adjoining provinces of Benguet, Mountain Province, Ifugao, Kalinga and Apayao, which were According to Nueva Era, Marcos was created out of the territory of Dingras only. And since R.A.
then a single province. No. 3753 specifically mentioned seven (7) barrios of Dingras to become Marcos, the area which
should comprise Marcos should not go beyond the territory of said barrios.13
Mt. Province was divided into the four provinces of Benguet, Mountain Province, Ifugao, and
Kalinga-Apayao by virtue of R.A. No. 4695 which was enacted on June 18, 1966. On February From the time Marcos was created in 1963, its eastern boundary had been considered to be
14, 1995, the province of Kalinga-Apayao, which comprises the sub-provinces of Kalinga and aligned and coterminous with the eastern boundary of the adjacent municipality of Dingras.
Apayao, was further converted into the regular provinces of Kalinga and Apayao pursuant to However, based on a re-survey in 1992, supposedly done to conform to the second paragraph of
R.A. No. 7878. Section 1 of R.A. No. 3753, an area of 15,400 hectares of Nueva Era was alleged to form part of
Marcos.14 This was the area of Barangay Sto. Niño, Nueva Era that Marcos claimed in its
position paper.
The part of then Mt. Province which was at the east of Marcos is now the province of Apayao.
Hence, the eastern boundary referred to by the second paragraph of Section 1 of R.A. No. 3753
is the present Ilocos Norte-Apayao boundary. On March 29, 2000, the SP of Ilocos Norte ruled in favor of Nueva Era. The fallo of its
decision15 reads:
On the basis of the said phrase, which described Marcos' eastern boundary, Marcos claimed that
the middle portion of Nueva Era, which adjoins its eastern side, formed part of its territory. Its
 WHEREFORE, in view of all the foregoing, this Body has no alternative but to RTC Decision
dismiss, as it hereby DISMISSES said petition for lack of merit. The disputed area
consisting of 15,400 hectares, more or less, is hereby declared as part and portion of
On appeal by Marcos, the RTC affirmed the decision of the SP in its decision 20 of March 19,
the territorial jurisdiction of respondent Nueva Era.16
2001. The dispositive part of the RTC decision reads:

R.A. No. 3753 expressly named the barangays that would comprise Marcos, but none of Nueva
WHEREFORE, the instant appeal is hereby DISMISSED. The questioned decision
Era's barangays were mentioned. The SP thus construed, applying the rule of expressio unius est
of the Sangguniang Panlalawigan of Ilocos Norte is hereby AFFIRMED.
exclusio alterius, that no part of Nueva Era was included by R.A. No. 3753 in creating Marcos.17

No costs.
The SP ratiocinated that if Marcos was to be bounded by Mt. Province, it would encroach upon
a portion, not only of Nueva Era but also of Abra. Thus:
SO ORDERED.21
x x x Even granting, for the sake of argument, that the eastern boundary of Marcos is
indeed Mountain Province, Marcos will then be claiming a portion of Abra because The RTC reasoned out in this wise:
the province, specifically Barangay Sto. Niño, Nueva Era, is actually bounded on the
East by the Province of Abra. Abra is situated between and separates the Provinces
The position of the Municipality of Marcos is that the provision of R.A. 3753 as
of Ilocos Norte and Mountain Province.
regards its boundary on the East which is the "Ilocos Norte-Mt. Province" should
prevail.
This is precisely what this body would like to avoid. Statutes should be construed in
the light of the object to be achieved and the evil or mischief to be suppressed, and
they should be given such construction as will advance the object, suppress the On the other hand, the Municipality of Nueva Era posits the theory that only the
mischief and secure the benefits intended.18 (Citations omitted) barrios of the Municipality of Dingras as stated in R.A. 3753 should be included in
the territorial jurisdiction of the Municipality of Marcos. The Sangguniang
Panlalawigan agreed with the position of Nueva Era.
The SP further explained:
xxxx
Invariably, it is not the letter, but the spirit of the law and the intent of the legislature
that is important. When the interpretation of the statute according to the exact and
literal import of its words would lead to absurdity, it should be construed according An examination of the Congressional Records during the deliberations of the R.A.
3753 (House Bill No. 3721) shows the Explanatory Note of Congressman Simeon M.
to the spirit and reason, disregarding if necessary the letters of the law. It is believed
that congress did not intend to have this absurd situation to be created when it created Valdez, 2nd District, Ilocos Norte, to wit:
the Municipality of Marcos. This body, by the mandate given to it by the RA 7160
otherwise known Local Government Code, so believes that respondent Nueva Era or EXPLANATORY NOTE
any portion thereof has been excluded from the ambit of RA 3753. Under the
principle of "espressio (sic) unios (sic) est exclusio alterius," by expressly naming
the barangays that will comprise the town of Marcos, those not mentioned are This bill seeks to create in the Province of Ilocos Norte a new municipality
deemed excluded. In Republic Act 4354, where Section 2 thereof enumerated the to be known as the Municipality of Marcos, to be comprised by the present
barrios comprising the City of Davao excluding the petitioner Barrio Central as part barrios of Capariaan, Biding Escoda, Culao, Alabaan, Ragas and
of the said City, the court held that there arose a prima facie conclusion that the said Agunit, all in the Municipality of Dingras of the same province. The seat
law abolished Barrio Central as part of Davao City. of government will be in the sitio of San Magro in the present barrio of
Ragas.

Historically, the hinterlands of Nueva Era have been known to be the home of our
brothers and sisters belonging to peculiar groups of non-(C)hristian inhabitants with xxxx
their own rich customs and traditions and this body takes judicial notice that the
inhabitants of Nueva Era have proudly claimed to be a part of this rich culture. With On the other hand, the Municipality of Dingras will not be adversely
this common ancestral heritage which unfortunately is absent with Marcos, let it not affected too much because its finances will still be sound and stable. Its
be disturbed.19 (Emphasis ours and citations omitted) capacity to comply with its obligations, especially to its employees and
personnel, will not be diminished nor its operations paralyzed. On the
 contrary, economic development in both the mother and the proposed In a Decision27 dated June 6, 2005, the CA partly reversed the RTC decision with the following
municipalities will be accelerated. disposition:

In view of the foregoing, approval of this bill is earnestly requested. WHEREFORE, we partially GRANT the petition treated as one
for certiorari. The Decisions of both the Sangguniang Panlalawigan and
Regional Trial Court of Ilocos Norte are REVERSED and SET ASIDE insofar as
(Sgd.) SIMEON M. VALDEZ
they made the eastern boundary of the municipality of Marcos co-terminous with the
Congressman, 2nd District
eastern boundary of Dingras town, and another is rendered extending the said
Ilocos Norte22
boundary of Marcos to the boundary line between the province of Ilocos Norte and
Kalinga-Apayao, but the same Decisions are AFFIRMED with respect to the
Parenthetically, the legislative intent was for the creation of the denial of the claim of Marcos to the detached northern portion of barangay Sto. Niño
Municipality of Marcos, Ilocos Norte from the barrios (barangays) of the which should, as it is hereby ordered to, remain with the municipality of Nueva Era.
Municipality of Dingras, Ilocos Norte only. Hence, the Municipality of No costs.
Marcos cannot add any area beyond the territorial jurisdiction of the
Municipality of Dingras, Ilocos Norte. This conclusion might have been
SO ORDERED.28
different only if the area being claimed by the Municipality of Marcos is
within the territorial jurisdiction of the Municipality of Dingras and not
the Municipality of Nueva Era. In such case, the two conflicting In concluding that the eastern boundary of Marcos was the boundary line between Ilocos Norte
provisions may be harmonized by including such area within the and Kalinga-Apayao, the CA gave the following explanation:
territorial jurisdiction of the Municipality of Dingras as within the
territorial jurisdiction of the Municipality of Marcos.23 (Emphasis ours)
Clearly then, both the SP and the RTC erred when they ruled that the eastern boundary of Marcos
is only coterminous with the eastern boundary of the adjacent municipality of Dingras and
CA Disposition refused to extend it up to the boundary line between the provinces of Ilocos Norte and Mountain
Province (Kalinga-Apayao). R.A. No. 3753, the law creating Marcos, is very explicit and leaves
no room for equivocation that the boundaries of Marcos town are:
Still determined to have a more extensive eastern boundary, Marcos filed a petition for
review24 of the RTC decision before the CA. The issues raised by Marcos before the CA were:
"On the Northwest by the barrios Biding-Rangay boundary going down
to the barrios Capariaan-Gabon boundary consisting of foot path and
1. Whether or not the site of Hercules Minerals and Oil, Inc. which is within a
feeder road; on the Northeast, by the Burnay River which is the common
Government Forest Reservation in Barangay Sto. Niño, formerly of Nueva Era, is a
boundary of barrios Agunit and Naglayaan; on the East, by the Ilocos
part of the newly created Municipality of Marcos, Ilocos Norte.
Norte-Mt. Province boundary; on the South by the Padsan River, which
is at the same time the boundary between the municipalities of Banna and
2. Whether or not the portion of Barangay Sto. Niño on the East which is separated Dingras; on the West and Southwest by the boundary between the
from Nueva Era as a result of the full implementation of the boundaries of the new municipalities of Batac and Dingras."
Municipality of Marcos belongs also to Marcos or to Nueva Era.25
To stop short at the eastern boundary of Dingras as the eastern boundary also of
The twin issues involved two portions of Nueva Era, viz.: (1) middle portion, where Hercules Marcos and refusing to go farther to the boundary line between Ilocos Norte and
Minerals and Oil, Inc. is located; and (2) northern portion of Nueva Era, which, according to Mountain Province (Kalinga-Apayao) is tantamount to amending the law which
Marcos, was isolated from Nueva Era in view of the integration to Marcos of said middle portion. Congress alone can do. Both the SP and RTC have no competence to undo a valid act
of Congress.
Marcos prayed before the CA that the above two portions of Nueva Era be declared as part of its
own territory. It alleged that it was entitled to the middle portion of Nueva Era in view of the It is not correct to say that Congress did not intend to take away any part of Nueva
description of Marcos' eastern boundary under R.A. No. 3753. Marcos likewise contended that Era and merge it with Marcos for it is chargeable with conclusive knowledge that
it was entitled to the northern portion of Nueva Era which was allegedly isolated from Nueva when it provided that the eastern boundary of Marcos is the boundary line between
Era when Marcos was created. It posited that such isolation of territory was contrary to law Ilocos Norte and Mountain Province, (by the time of both the SB and RTC Decision
because the law required that a municipality must have a compact and contiguous territory. 26 was already Kalinga-Apayao), it would be cutting through a portion of Nueva Era.
As the law is written so must it be applied. Dura lex sed lex!29
The CA likewise held that the province Abra was not located between Marcos and Kalinga- others; properly identified by metes and bounds with technical
Apayao; and that Marcos would not encroach upon a portion of Abra for it to be bounded by descriptions; and sufficient to provide for such basic services and facilities
Kalinga-Apayao, to wit: to meet the requirements of its populace.31

Nueva Era's contention that to lay out the eastern jurisdiction of Marcos to the The CA also expressed the view that Marcos adopted the wrong mode of appeal in bringing the
boundary line between Ilocos Norte and Mountain Province (Kalinga-Apayao) would case to it. The case, according to the CA, was appealable only to the RTC. Nonetheless, despite
mean annexing part of the municipality of Itnig, province of Abra to Marcos as Abra its pronouncement that the case was dismissible, the CA took cognizance of the same by treating
is between Ilocos Norte and Mountain Province is geographically erroneous. From it as one for certiorari, to wit:
Nueva Era's own map of Region 1, which also depicts the locations of Kalinga-
Apayao, Abra, Mountain Province, Benguet and Nueva Vizcaya after the partition of
A final word. At the outset, we agonized over the dilemma of choosing between
the old Mountain Province into the provinces of Kalinga-Apayao, Ifugao, Mountain
dismissing outright the petition at bar or entertaining it. This is for the simple reason
Province and Benguet, the province of Abra is situated far to the south of Kalinga
that a petition for review is a mode of appeal and is not appropriate as the Local
Apayao and is between the latter and the present Mountain Province, which is farther
Government Code provides for the remedy of appeal in boundary disputes only to the
south of Abra. Abra is part of the eastern boundary of Ilocos Sur while Kalinga-
Regional Trial Court but not any further appeal to this Court. Appeal is a purely
Apayao is the eastern boundary of Ilocos Norte. Hence, in no way will the eastern
statutory right. It cannot be exercised unless it is expressly granted by law. This is
boundary of the municipality of Marcos encroach upon a portion of Abra. 30
too basic to require the citation of supporting authority.

However, Marcos' claim over the alleged isolated northern portion of Nueva Era was denied.
xxxx
The CA ruled:

By the same token, since the Local Government Code does not explicitly grant the
Going now to the other area involved, i.e., the portion of Sto. Niño that is separated
right of further appeal from decisions of the RTCs in boundary disputes between or
from its mother town Nueva Era and now lies east of the municipalities of Solsona
among local government units, Marcos town cannot exercise that right from the
and Dingras and north of Marcos, it bears stressing that it is not included within the
adverse decision of the RTC of Ilocos Norte. Nonetheless, because of the
area of Marcos as defined by law. But since it is already detached from Sto. Niño,
transcendental legal and jurisdictional issues involved, we solved our inceptive
Marcos is laying claim to it to be integrated into its territory by the SP because it is
dilemma by treating the petition at bar as a special civil action for certiorari.32
contiguous to a portion of said municipality.

Nueva Era was not pleased with the decision of the CA. Hence, this petition for review on
We hold that the SP has no jurisdiction or authority to act on the claim, for it will
certiorari under Rule 45.
necessarily substantially alter the north eastern and southern boundaries of Marcos
from that defined by law and unduly enlarge its area. Only Congress can do that.
True, the SP may substantially alter the boundary of a barangay within its Issues
jurisdiction. But this means the alteration of the boundary of a barangay in relation
to another barangay within the same municipality for as long as that will not result
in any change in the boundary of that municipality. The area in dispute therefore Nueva Era now raises the following issues:
remains to be a part of Sto. Niño, a barangay of Nueva Era although separated by the
newly created Marcos town pursuant to Section 7(c) of the 1991 Local Government a) Whether or not, the Court of Appeals has jurisdiction on the Petition for Review
Code which states: on Appeal, since Sec. 119 of the Local Government Code, which provides that "An
appeal to the Decision of the Sangguniang Panlalawigan is exclusively vested to the
SEC. 7. Creation and Conversion. - As a general rule, the creation of a Regional Trial Court, without further Appeal to the Court of Appeals";
local government unit or its conversion from one level to another shall be
based on verifiable indicators of viability and projected capacity to b) Whether or not, the Court of Appeals gravely abused its discretion, in treating the
provide services, to wit: Petition for Review On Appeal, filed under Rule 45, Revised Rules of Court, as a
Petition for Certiorari, under Rule 65 of the Revised Rules of Court;
xxxx
c) Whether or not, the Court of Appeals erred in its appreciation of facts, in declaring
that MARCOS East is not coterminous with the Eastern boundary of its mother town-
(c) Land Area. - It must be contiguous, unless it comprises two or more
islands or is separated by a local government unit independent of the Dingras. That it has no factual and legal basis to extend MARCOS territory
 beyond Brgys. Agunit (Ferdinand) and Culao (Elizabeth) of Marcos, and to go further True, appeal is a purely statutory right and it cannot be exercised unless it is expressly granted
East, by traversing and disintegrating Brgy. Sto. Niño, and drawing parallel lines by law. Nevertheless, the CA can pass upon the petition for review precisely because the law
from Sto. Niño, there lies Abra, not Mt. Province or Kalinga-Apayao.33 allows it.

Basically, there are two (2) issues to resolve here: (1) whether or not the mode of appeal adopted Batas Pambansa (B.P.) Blg. 129 or the Judiciary Reorganization Act of 1980, as amended by
by Marcos in bringing the case to the CA is proper; and (2) whether or not the eastern boundary R.A. No. 7902,38 vests in the CA the appellate jurisdiction over all final judgments, decisions,
of Marcos extends over and covers a portion of Nueva Era. resolutions, orders or awards of Regional Trial Courts and quasi-judicial agencies,
instrumentalities, boards or commissions, among others.39 B.P. Blg. 129 has been further
supplemented by the 1997 Rules of Civil Procedure, as amended, which provides for the remedy
Our Ruling
of appeal via petition for review under Rule 42 to the CA in cases decided by the RTC in the
exercise of its appellate jurisdiction.
Marcos correctly appealed the RTC judgment via petition for review under Rule 42.
Thus, the CA need not treat the appeal via petition for review filed by Marcos as a petition
Under Section 118(b) of the Local Government Code, "(b)oundary disputes involving two (2) or for certiorari to be able to pass upon the same. B.P. Blg. 129, as amended, which is
more municipalities within the same province shall be referred for settlement to the sangguniang supplemented by Rule 42 of the Rules of Civil Procedure, gives the CA the authority to entertain
panlalawigan concerned." The dispute shall be formally tried by the said sanggunian in case the appeals of such judgments and final orders rendered by the RTC in the exercise of its appellate
disputing municipalities fail to effect an amicable settlement. 34 jurisdiction.

The SP of Ilocos validly took cognizance of the dispute between the parties. The appeal of the At the time of creation of Marcos, approval in a plebiscite of the creation of a local government
SP judgment to the RTC was likewise properly filed by Marcos before the RTC. The problem, unit is not required.
however, lies in whether the RTC judgment may still be further appealed to the CA.
Section 10, Article X of the 1987 Constitution provides that:
The CA pronounced that the RTC decision on the boundary dispute was not appealable to it. It
ruled that no further appeal of the RTC decision may be made pursuant to Section 119 of the
No province, city, municipality, or barangay may be created, divided, merged,
Local Government Code35 which provides:
abolished, or its boundary substantially altered, except in accordance with the criteria
established in the local government code and subject to approval by a majority of the
SECTION 119. Appeal. - Within the time and manner prescribed by the Rules of votes cast in a plebiscite in the political units directly affected.40
Court, any party may elevate the decision of the sanggunian concerned to the proper
Regional Trial Court having jurisdiction over the area in dispute. The Regional Trial
The purpose of the above constitutional provision was acknowledged by the Court through
Court shall decide the appeal within one (1) year from the filing thereof. Pending
Justice Reynato S. Puno in Miranda v. Aguirre,41 where it was held that:
final resolution of the disputed area prior to the dispute shall be maintained and
continued for all legal purposes.
The 1987 Constitution, more than any of our previous Constitutions, gave more
reality to the sovereignty of our people for it was borne out of the people power in
The CA concluded that since only the RTC was mentioned as appellate court, the case may no
the 1986 EDSA revolution. Its Section 10, Article X addressed the undesirable
longer be further appealed to it. The CA stated that "(a)ppeal is a purely statutory right. It cannot
practice in the past whereby local government units were created, abolished, merged
be exercised unless it is expressly granted by law. This is too basic to require the citation of
or divided on the basis of the vagaries of politics and not of the welfare of the people.
supporting authority."36
Thus, the consent of the people of the local government unit directly affected was
required to serve as a checking mechanism to any exercise of legislative power
The CA, however, justified its taking cognizance of the case by declaring that: "because of the creating, dividing, abolishing, merging or altering the boundaries of local government
transcendental legal and jurisdictional issues involved, we solved our inceptive dilemma by units. It is one instance where the people in their sovereign capacity decide on a
treating the petition at bar as a special civil action for certiorari."37 matter that affects them - direct democracy of the people as opposed to democracy
thru people's representatives. This plebiscite requirement is also in accord with the
philosophy of the Constitution granting more autonomy to local government units. 42
The CA erred in declaring that only the RTC has appellate jurisdiction over the judgment of the
SP.
Nueva Era contends that the constitutional and statutory43 plebiscite requirement for the creation Only the barrios (now barangays) of Dingras from which Marcos obtained its territory are named
of a local government unit is applicable to this case. It posits that the claim of Marcos to its in R.A. No. 3753. To wit:
territory should be denied due to lack of the required plebiscite.
SECTION 1. The barrios of Capariaan, Biding, Escoda, Culao, Alabaan, Ragas and
We agree with Nueva Era's contention that Marcos' claim over parts of its territory is not tenable. Agunit in the Municipality of Dingras, Province of Ilocos Norte, are hereby separated
However, the reason is not the lack of the required plebiscite under the 1987 and 1973 from the said municipality and constituted into a new and separate municipality to be
constitutions and the Local Government Code of 1991 but other reasons as will be discussed known as the Municipality of Marcos, with the following boundaries:
below.
Since only the barangays of Dingras are enumerated as Marcos' source of territory, Nueva Era's
At the time Marcos was created, a plebiscite was not required by law to create a local government territory is, therefore, excluded.
unit. Hence, Marcos was validly created without conducting a plebiscite. As a matter of fact, no
plebiscite was conducted in Dingras, where it was derived.
Under the maxim expressio unius est exclusio alterius, the mention of one thing implies the
exclusion of another thing not mentioned. If a statute enumerates the things upon which it is to
Lex prospicit, non respicit. The law looks forward, not backward.44 It is the basic norm that operate, everything else must necessarily and by implication be excluded from its operation and
provisions of the fundamental law should be given prospective application only, unless effect.49 This rule, as a guide to probable legislative intent, is based upon the rules of logic and
legislative intent for its retroactive application is so provided. 45 natural workings of the human mind.50

In the comparable case of Ceniza v. Commission on Elections46 involving the City of Mandaue, Had the legislature intended other barangays from Nueva Era to become part of Marcos, it could
the Court has this to say: have easily done so by clear and concise language. Where the terms are expressly limited to
certain matters, it may not by interpretation or construction be extended to other matters. 51 The
rule proceeds from the premise that the legislature would not have made specified enumerations
Petitioners assail the charter of the City of Mandaue as unconstitutional for not having
in a statute had the intention been not to restrict its meaning and to confine its terms to those
been ratified by the residents of the city in a plebiscite. This contention is
expressly mentioned.52
untenable. The Constitutional requirement that the creation, division, merger,
abolition, or alteration of the boundary of a province, city, municipality, or barrio
should be subject to the approval by the majority of the votes cast in a plebiscite in Moreover, since the barangays of Nueva Era were not mentioned in the enumeration
the governmental unit or units affected is a new requirement that came into being of barangays out of which the territory of Marcos shall be set, their omission must be held to
only with the 1973 Constitution. It is prospective in character and therefore cannot have been done intentionally. This conclusion finds support in the rule of casus omissus pro
affect the creation of the City of Mandaue which came into existence on June 21, omisso habendus est, which states that a person, object or thing omitted from an enumeration
1969.47 (Citations omitted and underlining supplied). must be held to have been omitted intentionally.53

Moreover, by deciding this case, We are not creating Marcos but merely interpreting the law that Furthermore, this conclusion on the intention of the legislature is bolstered by the explanatory
created it. Its creation was already a fait accompli. Therefore, there is no reason for Us to further note of the bill which paved the way for the creation of Marcos. Said explanatory note mentioned
require a plebiscite. only Dingras as the mother municipality of Marcos.

As pointed out by Justice Isagani Cruz, to wit: Where there is ambiguity in a statute, as in this case, courts may resort to the explanatory note
to clarify the ambiguity and ascertain the purpose and intent of the statute. 54
Finally, it should be observed that the provisions of the Constitution should be given
only a prospective application unless the contrary is clearly intended. Were the rule Despite the omission of Nueva Era as a mother territory in the law creating Marcos, the latter
otherwise, rights already acquired or vested might be unduly disturbed or withdrawn still contends that said law included Nueva Era. It alleges that based on the description of its
even in the absence of an unmistakable intention to place them within the scope of boundaries, a portion of Nueva Era is within its territory.
the Constitution.48
The boundaries of Marcos under R.A. No. 3753 read:
No part of Nueva Era's territory was taken for the creation of Marcos under R.A. No. 3753.
On the Northwest, by the barrios Biding-Rangay boundary going down to the barrios
Capariaan-Gabon boundary consisting of foot path and feeder road; on the Northeast,
 by the Burnay River which is the common boundary of barrios Agunit and WHEREFORE, the petition is GRANTED. The Decision of the Court of Appeals is
Naglayaan; on the East, by the Ilocos Norte-Mt. Province boundary; on the South, by partly REVERSED. The Decision of the Regional Trial Court in Ilocos Norte is Reinstated.
the Padsan River which is at the same time the boundary between the municipalities
of Banna and Dingras; on the West and Southwest, by the boundary between the
SO ORDERED.
municipalities of Batac and Dingras.

EN BANC
Marcos contends that since it is "bounded on the East, by the Ilocos Norte-Mt. Province
boundary," a portion of Nueva Era formed part of its territory because, according to it, Nueva
Era is between the Marcos and Ilocos Norte-Mt. Province boundary. Marcos posits that in order
for its eastern side to reach the Ilocos Norte-Mt. Province boundary, it will necessarily traverse
the middle portion of Nueva Era.
G.R. No. 106719 September 21, 1993

Marcos further claims that it is entitled not only to the middle portion of Nueva Era but also to
its northern portion which, as a consequence, was isolated from the major part of Nueva Era. DRA. BRIGIDA S. BUENASEDA, Lt. Col. ISABELO BANEZ, JR., ENGR. CONRADO
REY MATIAS, Ms. CORA S. SOLIS and Ms. ENYA N. LOPEZ, petitioners,
vs.
We cannot accept the contentions of Marcos. SECRETARY JUAN FLAVIER, Ombudsman CONRADO M. VASQUEZ, and NCMH
NURSES ASSOCIATION, represented by RAOULITO GAYUTIN, respondents.
Only Dingras is specifically named by law as source territory of Marcos. Hence, the said
description of boundaries of Marcos is descriptive only of the listed barangays of Dingras as a Renato J. Dilag and Benjamin C. Santos for petitioners.
compact and contiguous territory.
Danilo C. Cunanan for respondent Ombudsman.
Considering that the description of the eastern boundary of Marcos under R.A. No. 3753 is
ambiguous, the same must be interpreted in light of the legislative intent.
Crispin T. Reyes and Florencio T. Domingo for private respondent.

The law must be given a reasonable interpretation, to preclude absurdity in its application.55 We
thus uphold the legislative intent to create Marcos out of the territory of Dingras only.

Courts must give effect to the general legislative intent that can be discovered from or is QUIASON, J.:
unraveled by the four corners of the statute, and in order to discover said intent, the whole statute,
and not only a particular provision thereof, should be considered. 56 Every section, provision or This is a Petition for Certiorari, Prohibition and Mandamus, with Prayer for Preliminary
clause of the statute must be expounded by reference to each other in order to arrive at the effect Injunction or Temporary Restraining Order, under Rule 65 of the Revised Rules of Court.
contemplated by the legislature. The intention of the legislator must be ascertained from the
whole text of the law, and every part of the act is to be taken into view. 57
Principally, the petition seeks to nullify the Order of the Ombudsman dated January 7, 1992,
directing the preventive suspension of petitioners,
It is axiomatic that laws should be given a reasonable interpretation, not one which defeats the Dr. Brigida S. Buenaseda, Chief of Hospital III; Isabelo C. Banez, Jr., Administrative Officer
very purpose for which they were passed. This Court has in many cases involving the III; Conrado Rey Matias, Technical Assistant to the Chief of Hospital; Cora C. Solis, Accountant
construction of statutes always cautioned against narrowly interpreting a statute as to defeat the III; and Enya N. Lopez, Supply Officer III, all of the National Center for Mental Health. The
purpose of the legislature and stressed that it is of the essence of judicial duty to construe statutes petition also asks for an order directing the Ombudsman to disqualify Director Raul Arnaw and
so as to avoid such a deplorable result (of injustice or absurdity) and that therefore "a literal Investigator Amy de Villa-Rosero, of the Office of the Ombudsman, from participation in the
interpretation is to be rejected if it would be unjust or lead to absurd results." 58 preliminary investigation of the charges against petitioner (Rollo, pp. 2-17; Annexes to
Petition, Rollo, pp. 19-21).
Statutes are to be construed in the light of the purposes to be achieved and the evils sought to be
remedied. Thus, in construing a statute, the reason for its enactment should be kept in mind and The questioned order was issued in connection with the administrative complaint filed with the
the statute should be construed with reference to the intended scope and purpose. The court may Ombudsman (OBM-ADM-0-91-0151) by the private respondents against the petitioners for
consider the spirit and reason of the statute, where a literal meaning would lead to absurdity, violation of the Anti-Graft and Corrupt Practices Act.
contradiction, injustice, or would defeat the clear purpose of the lawmakers. 59
According to the petition, the said order was issued upon the recommendation of Director Raul respondents to maintain the status quo, respondent Secretary refuses to hold in abeyance the
Arnaw and Investigator Amy de Villa-Rosero, without affording petitioners the opportunity to implementation of petitioners' preventive suspension; (b) the clear intent and spirit of the
controvert the charges filed against them. Petitioners had sought to disqualify Director Arnaw Resolution dated September 22, 1992 is to hold in abeyance the implementation of petitioners'
and Investigator Villa-Rosero for manifest partiality and bias (Rollo, pp. 4-15). preventive suspension, the status quo obtaining the time of the filing of the instant petition; (c)
respondent Secretary's acts in refusing to hold in abeyance implementation of petitioners'
preventive suspension and in tolerating and approving the acts of Dr. Abueva, the OIC appointed
On September 10, 1992, this Court required respondents' Comment on the petition.
to replace petitioner Buenaseda, are in violation of the Resolution dated September 22, 1992;
and
On September 14 and September 22, 1992, petitioners filed a "Supplemental Petition (Rollo, pp. (d) therefore, respondent Secretary should be directed to comply with the Resolution dated
124-130); Annexes to Supplemental Petition; Rollo pp. 140-163) and an "Urgent Supplemental September 22, 1992 immediately, by restoring the status quo ante contemplated by the aforesaid
Manifestation" (Rollo, resolution" (Comment attached to Rollo without paginations between pp. 613-614 thereof).
pp. 164-172; Annexes to Urgent Supplemental Manifestation; Rollo, pp. 173-176), respectively,
averring developments that transpired after the filing of the petition and stressing the urgency
In the Resolution dated November 25, 1992, this Court required respondent Secretary to comply
for the issuance of the writ of preliminary injunction or temporary restraining order.
with the aforestated status quo order, stating inter alia, that:

On September 22, 1992, this Court ". . . Resolved to REQUIRE the respondents to MAINTAIN
It appearing that the status quo ante litem motam, or the last peaceable
in the meantime, the STATUS QUO pending filing of comments by said respondents on the
uncontested status which preceded the present controversy was the
original supplemental manifestation" (Rollo, p. 177).
situation obtaining at the time of the filing of the petition at bar on
September 7, 1992 wherein petitioners were then actually occupying their
On September 29, 1992, petitioners filed a motion to direct respondent Secretary of Health to respective positions, the Court hereby ORDERS that petitioners be
comply with the Resolution dated September 22, 1992 (Rollo, pp. 182-192, Annexes, pp. 192- allowed to perform the duties of their respective positions and to receive
203). In a Resolution dated October 1, 1992, this Court required respondent Secretary of Health such salaries and benefits as they may be lawfully entitled to, and that
to comment on the said motion. respondents and/or any and all persons acting under their authority desist
and refrain from performing any act in violation of the aforementioned
Resolution of September 22, 1992 until further orders from the Court
On September 29, 1992, in a pleading entitled "Omnibus Submission," respondent NCMH
(Attached to Rollo after p. 615 thereof).
Nurses Association submitted its Comment to the Petition, Supplemental Petition and Urgent
Supplemental Manifestation. Included in said pleadings were the motions to hold the lawyers of
petitioners in contempt and to disbar them (Rollo, pp. 210-267). Attached to the "Omnibus On December 9, 1992, the Solicitor General, commenting on the Petition, Supplemental Petition
Submission" as annexes were the orders and pleadings filed in Administrative Case No. OBM- and Supplemental Manifestation, stated that (a) "The authority of the Ombudsman is only to
ADM-0-91-1051 against petitioners (Rollo, pp. 268-480). recommend suspension and he has no direct power to suspend;" and (b) "Assuming the
Ombudsman has the power to directly suspend a government official or employee, there are
conditions required by law for the exercise of such powers; [and] said conditions have not been
The Motion for Disbarment charges the lawyers of petitioners with: met in the instant case" (Attached to Rollo without pagination).
(1) unlawfully advising or otherwise causing or inducing their clients — petitioners Buenaseda,
et al., to openly defy, ignore, disregard, disobey or otherwise violate, maliciously evade their
preventive suspension by Order of July 7, 1992 of the Ombudsman . . ."; (2) "unlawfully In the pleading filed on January 25, 1993, petitioners adopted the position of the Solicitor General
interfering with and obstructing the implementation of the said order (Omnibus Submission, pp. that the Ombudsman can only suspend government officials or employees connected with his
50-52; Rollo, pp. 259-260); and (3) violation of the Canons of the Code of Professional office. Petitioners also refuted private respondents' motion to disbar petitioners' counsel and to
Responsibility and of unprofessional and unethical conduct "by foisting blatant lies, malicious cite them for contempt (Attached to Rollo without pagination).
falsehood and outrageous deception" and by committing subornation of perjury, falsification and
fabrication in their pleadings (Omnibus Submission, pp. 52-54; Rollo, pp. 261-263).
The crucial issue to resolve is whether the Ombudsman has the power to suspend government
officials and employees working in offices other than the Office of the Ombudsman, pending the
On November 11, 1992, petitioners filed a "Manifestation and Supplement to 'Motion to Direct investigation of the administrative complaints filed against said officials and employees.
Respondent Secretary of Health to Comply with 22 September 1992 Resolution'" (Manifestation
attached to Rollo without pagination between pp. 613 and 614 thereof).
In upholding the power of the Ombudsman to preventively suspend petitioners, respondents
(Urgent Motion to Lift Status Quo, etc, dated January 11, 1993, pp. 10-11), invoke Section 24
On November 13, 1992, the Solicitor General submitted its Comment dated November 10, 1992, of R.A. No. 6770, which provides:
alleging that: (a) "despite the issuance of the September 22, 1992 Resolution directing
 Sec. 24. Preventive Suspension. — The Ombudsman or his Deputy may the word "suspension" should be given the same sense as the other words with which it is
preventively suspend any officer or employee under his authority pending associated. Where a particular word is equally susceptible of various meanings, its correct
an investigation, if in his judgment the evidence of guilt is strong, and (a) construction may be made specific by considering the company of terms in which it is found or
the charge against such officer or employee involves dishonesty, with which it is associated (Co Kim Chan v. Valdez Tan Keh, 75 Phil. 371 [1945]; Caltex (Phils.)
oppression or grave misconduct or neglect in the performance of duty; (b) Inc. v. Palomar, 18 SCRA 247 [1966]).
the charge would warrant removal from the service; or (c) the respondent's
continued stay in office may prejudice the case filed against him.
Section 24 of R.A. No. 6770, which grants the Ombudsman the power to preventively suspend
public officials and employees facing administrative charges before him, is a procedural, not a
The preventive suspension shall continue until the case is terminated by penal statute. The preventive suspension is imposed after compliance with the requisites therein
the Office of Ombudsman but not more than six months, without pay, set forth, as an aid in the investigation of the administrative charges.
except when the delay in the disposition of the case by the Office of the
Ombudsman is due to the fault, negligence or petition of the respondent,
Under the Constitution, the Ombudsman is expressly authorized to recommend to the appropriate
in which case the period of such delay shall not be counted in computing
official the discipline or prosecution of erring public officials or employees. In order to make an
the period of suspension herein provided.
intelligent determination whether to recommend such actions, the Ombudsman has to conduct
an investigation. In turn, in order for him to conduct such investigation in an expeditious and
Respondents argue that the power of preventive suspension given the Ombudsman under Section efficient manner, he may need to suspend the respondent.
24 of R.A. No. 6770 was contemplated by Section 13 (8) of Article XI of the 1987 Constitution,
which provides that the Ombudsman shall exercise such other power or perform such functions
The need for the preventive suspension may arise from several causes, among them, the danger
or duties as may be provided by law."
of tampering or destruction of evidence in the possession of respondent; the intimidation of
witnesses, etc. The Ombudsman should be given the discretion to decide when the persons facing
On the other hand, the Solicitor General and the petitioners claim that under the 1987 administrative charges should be preventively suspended.
Constitution, the Ombudsman can only recommend to the heads of the departments and other
agencies the preventive suspension of officials and employees facing administrative
Penal statutes are strictly construed while procedural statutes are liberally construed (Crawford,
investigation conducted by his office. Hence, he cannot order the preventive suspension himself.
Statutory Construction, Interpretation of Laws, pp. 460-461; Lacson v. Romero, 92 Phil. 456
[1953]). The test in determining if a statute is penal is whether a penalty is imposed for the
They invoke Section 13(3) of the 1987 Constitution which provides that the Office of the punishment of a wrong to the public or for the redress of an injury to an individual (59 Corpuz
Ombudsman shall have inter alia the power, function, and duty to: Juris, Sec. 658; Crawford, Statutory Construction, pp. 496-497). A Code prescribing the
procedure in criminal cases is not a penal statute and is to be interpreted liberally (People v.
Adler, 140 N.Y. 331; 35 N.E. 644).
Direct the officer concerned to take appropriate action against a public
official or employee at fault, and recommend his removal, suspension,
demotion, fine, censure or prosecution, and ensure compliance therewith. The purpose of R.A. No. 6770 is to give the Ombudsman such powers as he may need to perform
efficiently the task committed to him by the Constitution. Such being the case, said statute,
particularly its provisions dealing with procedure, should be given such interpretation that will
The Solicitor General argues that under said provision of the Constitutions, the Ombudsman has
effectuate the purposes and objectives of the Constitution. Any interpretation that will hamper
three distinct powers, namely: (1) direct the officer concerned to take appropriate action against
the work of the Ombudsman should be avoided.
public officials or employees at fault; (2) recommend their removal, suspension, demotion fine,
censure, or prosecution; and (3) compel compliance with the recommendation (Comment dated
December 3, 1992, pp. 9-10). A statute granting powers to an agency created by the Constitution should be liberally construed
for the advancement of the purposes and objectives for which it was created (Cf. Department of
Public Utilities v. Arkansas Louisiana Gas. Co., 200 Ark. 983, 142 S.W. (2d) 213 [1940];
The line of argument of the Solicitor General is a siren call that can easily mislead, unless one
Wallace v. Feehan, 206 Ind. 522, 190 N.E., 438 [1934]).
bears in mind that what the Ombudsman imposed on petitioners was not a punitive but only a
preventive suspension.
In Nera v. Garcia, 106 Phil. 1031 [1960], this Court, holding that a preventive suspension is not
a penalty, said:
When the constitution vested on the Ombudsman the power "to recommend the suspension" of
a public official or employees (Sec. 13 [3]), it referred to "suspension," as a punitive measure.
All the words associated with the word "suspension" in said provision referred to penalties in Suspension is a preliminary step in an administrative investigation. If after
administrative cases, e.g. removal, demotion, fine, censure. Under the rule of Noscitor a sociis, such investigation, the charges are established and the person investigated
 is found guilty of acts warranting his removal, then he is removed or Being a mere order for preventive suspension, the questioned order of the Ombudsman was
dismissed. This is the penalty. validly issued even without a full-blown hearing and the formal presentation of evidence by the
parties. In Nera, supra, petitioner therein also claimed that the Secretary of Health could not
preventively suspend him before he could file his answer to the administrative complaint. The
To support his theory that the Ombudsman can only preventively suspend respondents in
contention of petitioners herein can be dismissed perfunctorily by holding that the suspension
administrative cases who are employed in his office, the Solicitor General leans heavily on the
meted out was merely preventive and therefore, as held in Nera, there was "nothing improper in
phrase "suspend any officer or employee under his authority" in Section 24 of R.A. No. 6770.
suspending an officer pending his investigation and before tho charges against him are heard . .
. (Nera v. Garcia., supra).
The origin of the phrase can be traced to Section 694 of the Revised Administrative Code, which
dealt with preventive suspension and which authorized the chief of a bureau or office to "suspend
There is no question that under Section 24 of R.A. No. 6770, the Ombudsman cannot order the
any subordinate or employee in his bureau or under his authority pending an investigation . . . ."
preventive suspension of a respondent unless the evidence of guilt is strong and (1) the charts
against such officer or employee involves dishonesty, oppression or grave misconduct or neglect
Section 34 of the Civil Service Act of 1959 (R.A. No. 2266), which superseded Section 694 of in the performance of duty; (2) the charge would warrant removal from the service; or (3) the
the Revised Administrative Code also authorized the chief of a bureau or office to "suspend any respondent's continued stay in office may prejudice the case filed against him.
subordinate officer or employees, in his bureau or under his authority."
The same conditions for the exercise of the power to preventively suspend officials or employees
However, when the power to discipline government officials and employees was extended to the under investigation were found in Section 34 of R.A. No. 2260.
Civil Service Commission by the Civil Service Law of 1975 (P.D. No. 805), concurrently with
the President, the Department Secretaries and the heads of bureaus and offices, the phrase
The import of the Nera decision is that the disciplining authority is given the discretion to decide
"subordinate officer and employee in his bureau" was deleted, appropriately leaving the phrase
when the evidence of guilt is strong. This fact is bolstered by Section 24 of R.A. No. 6770, which
"under his authority." Therefore, Section 41 of said law only mentions that the proper
expressly left such determination of guilt to the "judgment" of the Ombudsman on the basis of
disciplining authority may preventively suspend "any subordinate officer or employee under his
the administrative complaint. In the case at bench, the Ombudsman issued the order of preventive
authority pending an investigation . . ." (Sec. 41).
suspension only after: (a) petitioners had filed their answer to the administrative complaint and
the "Motion for the Preventive Suspension" of petitioners, which incorporated the charges in the
The Administrative Code of 1987 also empowered the proper disciplining authority to criminal complaint against them (Annex 3, Omnibus Submission, Rollo, pp. 288-289; Annex
"preventively suspend any subordinate officer or employee under his authority pending an 4, Rollo,
investigation" (Sec. 51). pp. 290-296); (b) private respondent had filed a reply to the answer of petitioners, specifying 23
cases of harassment by petitioners of the members of the private respondent (Annex 6, Omnibus
Submission, Rollo, pp. 309-333); and (c) a preliminary conference wherein the complainant and
The Ombudsman Law advisedly deleted the words "subordinate" and "in his bureau," leaving the respondents in the administrative case agreed to submit their list of witnesses and
the phrase to read "suspend any officer or employee under his authority pending an investigation documentary evidence.
. . . ." The conclusion that can be deduced from the deletion of the word "subordinate" before
and the words "in his bureau" after "officer or employee" is that the Congress intended to
empower the Ombudsman to preventively suspend all officials and employees under Petitioners herein submitted on November 7, 1991 their list of exhibits (Annex 8 of Omnibus
investigation by his office, irrespective of whether they are employed "in his office" or in other Submission, Rollo, pp. 336-337) while private respondents submitted their list of exhibits
offices of the government. The moment a criminal or administrative complaint is filed with the (Annex 9 of Omnibus Submission, Rollo, pp. 338-348).
Ombudsman, the respondent therein is deemed to be "in his authority" and he can proceed to
determine whether said respondent should be placed under preventive suspension.
Under these circumstances, it can not be said that Director Raul Arnaw and Investigator Amy de
Villa-Rosero acted with manifest partiality and bias in recommending the suspension of
In their petition, petitioners also claim that the Ombudsman committed grave abuse of discretion petitioners. Neither can it be said that the Ombudsman had acted with grave abuse of discretion
amounting to lack of jurisdiction when he issued the suspension order without affording in acting favorably on their recommendation.
petitioners the opportunity to confront the charges against them during the preliminary
conference and even after petitioners had asked for the disqualification of Director Arnaw and
The Motion for Contempt, which charges the lawyers of petitioners with unlawfully causing or
Atty. Villa-Rosero (Rollo, pp. 6-13). Joining petitioners, the Solicitor General contends that
otherwise inducing their clients to openly defy and disobey the preventive suspension as ordered
assuming arguendo that the Ombudsman has the power to preventively suspend erring public
by the Ombudsman and the Secretary of Health can not prosper (Rollo, pp. 259-261). The Motion
officials and employees who are working in other departments and offices, the questioned order
should be filed, as in fact such a motion was filed, with the Ombudsman. At any rate, we find
remains null and void for his failure to comply with the requisites in Section 24 of the
that the acts alleged to constitute indirect contempt were legitimate measures taken by said
Ombudsman Law (Comment dated December 3, 1992, pp. 11-19).
lawyers to question the validity and propriety of the preventive suspension of their clients.
On the other hand, we take cognizance of the intemperate language used by counsel for private
respondents hurled against petitioners and their counsel (Consolidated: (1) Comment on Private
Respondent" "Urgent Motions, etc.;
(2) Adoption of OSG's Comment; and (3) Reply to Private Respondent's Comment and
Supplemental Comment, pp. 4-5).

A lawyer should not be carried away in espousing his client's cause. The language of a lawyer,
both oral or written, must be respectful and restrained in keeping with the dignity of the legal EN BANC
profession and with his behavioral attitude toward his brethren in the profession (Lubiano v.
Gordolla, 115 SCRA 459 [1982]). The use of abusive language by counsel against the opposing
counsel constitutes at the same time a disrespect to the dignity of the court of justice. Besides, G.R. No. 79094 June 22, 1988
the use of impassioned language in pleadings, more often than not, creates more heat than light.
MANOLO P. FULE, petitioner,
vs.
The Motion for Disbarment (Rollo, p. 261) has no place in the instant special civil action, which
is confined to questions of jurisdiction or abuse of discretion for the purpose of relieving persons THE HONORABLE COURT OF APPEALS, respondent.
from the arbitrary acts of judges and quasi-judicial officers. There is a set of procedure for the
discipline of members of the bar separate and apart from the present special civil action. Balagtas P. Ilagan for petitioner.

WHEREFORE, the petition is DISMISSED and the Status quo ordered to be maintained in the The Solicitor General for respondent.
Resolution dated September 22, 1992 is LIFTED and SET ASIDE.

SO ORDERED.
MELENCIO-HERRERA, J.:

This is a Petition for Review on certiorari of the Decision of respondent Appellate Court, which
affirmed the judgment of the Regional Trial Court, Lucena City, Branch LIV, convicting
petitioner (the accused-appellant) of Violation of Batas Pambansa Blg. 22 (The Bouncing
Checks Law) on the basis of the Stipulation of Facts entered into between the prosecution and
the defense during the pre-trial conference in the Trial Court. The facts stipulated upon read:

a) That this Court has jurisdiction over the person and subject matter of
this case;

b) That the accused was an agent of the Towers Assurance Corporation

on or before January 21, 1981;

c) That on January 21, 1981, the accused issued and made out check No.
26741, dated January 24, 1981 in the sum of P2,541.05;

d) That the said check was drawn in favor of the complaining witness,
Roy Nadera;

e) That the check was drawn in favor of the complaining witness in

remittance of collection;
 f) That the said check was presented for payment on January 24, 1981 but of Facts does not cure the defect because Rule 118 requires both the accused and his counsel to
the same was dishonored for the reason that the said checking account was sign the Stipulation of Facts. What the prosecution should have done, upon discovering that the
already closed; accused did not sign the Stipulation of Facts, as required by Rule 118, was to submit evidence
to establish the elements of the crime, instead of relying solely on the supposed admission of the
accused in the Stipulation of Facts. Without said evidence independent of the admission, the
g) That the accused Manolo Fule has been properly Identified as the
guilt of the accused cannot be deemed established beyond reasonable doubt.
accused party in this case.

Consequently, under the circumstances obtaining in this case, the ends of justice require that
At the hearing of August 23, 1985, only the prosecution presented its evidence consisting of
evidence be presented to determine the culpability of the accused. When a judgment has been
Exhibits "A," "B" and "C." At the subsequent hearing on September 17, 1985, petitioner-
entered by consent of an attorney without special authority, it will sometimes be set aside or
appellant waived the right to present evidence and, in lieu thereof, submitted a Memorandum
reopened (Natividad vs. Natividad, 51 Phil. 613 [1928]).
confirming the Stipulation of Facts. The Trial Court convicted petitioner-appellant.

WHEREFORE, the judgment of respondent Appellate Court is REVERSED and this case is
On appeal, respondent Appellate Court upheld the Stipulation of Facts and affirmed the judgment
hereby ordered RE-OPENED and REMANDED to the appropriate Branch of the Regional Trial
of conviction. 1
Court of Lucena City, for further reception of evidence.

Hence, this recourse, with petitioner-appellant contending that:

SO ORDERED.

The Honorable Respondent Court of Appeals erred in the decision of the

FIRST DIVISION
Regional Trial Court convicting the petitioner of the offense charged,
despite the cold fact that the basis of the conviction was based solely on
the stipulation of facts made during the pre-trial on August 8, 1985, which G.R. No. L-35910 July 21, 1978
was not signed by the petitioner, nor by his counsel.
PURITA BERSABAL, petitioner,
Finding the petition meritorious, we resolved to give due course. vs.
HONORABLE JUDGE SERAFIN SALVADOR, as Judge of the Court of First Instance
of Caloocan City, Branch XIV, TAN THAT and ONG PIN TEE, respondents.
The 1985 Rules on Criminal Procedure, which became effective on January 1, 1985, applicable
to this case since the pre-trial was held on August 8, 1985, provides:

SEC. 4. Pre-trial agreements must be signed. — No agreement or

admission made or entered during the pre-trial conference shall be used MAKASIAR, J.:
in evidence against the accused unless reduced to writing and signed by
him and his counsel. (Rule 118) [Emphasis supplied]
On March 23, 1972, petitioner Purita Bersabal seeks to annul the orders of respondent Judge of
August 4, 1971, October 30, 1971 and March 15, 1972 and to compel said respondent Judge to
By its very language, the Rule is mandatory. Under the rule of statutory construction, negative decide petitioner's perfected appeal on the basis of the evidence and records of the case submitted
words and phrases are to be regarded as mandatory while those in the affirmative are merely by the City Court of Caloocan City plus the memorandum already submitted by the petitioner
directory (McGee vs. Republic, 94 Phil. 820 [1954]). The use of the term "shall" further and respondents.
emphasizes its mandatory character and means that it is imperative, operating to impose a duty
which may be enforced (Bersabal vs. Salvador, No. L-35910, July 21, 1978, 84 SCRA 176). And
Since only questions of law were raised therein, the Court of Appeals, on October 13, 1972,
more importantly, penal statutes whether substantive and remedial or procedural are, by
issued a resolution certifying said case to this Court pursuant to Section 17, paragraph (4) of the
consecrated rule, to be strictly applied against the government and liberally in favor of the
Judiciary Act of 1948, as amended.
accused (People vs. Terrado No. L-23625, November 25, 1983, 125 SCRA 648).

As found by the Court of Appeals, the facts of this case are as follows:
The conclusion is inevitable, therefore, that the omission of the signature of the accused and his
counsel, as mandatorily required by the Rules, renders the Stipulation of Facts inadmissible in
evidence. The fact that the lawyer of the accused, in his memorandum, confirmed the Stipulation
It appears that private respondents Tan That and Ong Pin Tee filed an leave to file second motion for reconsideration which was likewise denied
ejectment suit, docketed as Civil Case No. 6926 in the City Court of by the respondent court on March 15, 1972. Hence this petition.
Caloocan City, against the petitioner. A decision was rendered by said
Court on November 25, 1970, which decision was appealed by the
The sole inquiry in the case at bar can be stated thus: Whether, in the light of the provisions of
petitioner to the respondent Court and docketed therein as Civil Case No.
the second paragraph of Section 45 of Republic Act No. 296, as amended by R.A. No. 6031, the
C-2036.
mere failure of an appellant to submit on nine the memorandum mentioned in the same paragraph
would empower the Court of First Instance to dismiss the appeal on the ground of failure to
During the pendency of the appeal the respondent court issued on March Prosecute; or, whether it is mandatory upon said Court to proceed to decide the appealed case on
23, 1971 an order which reads: the basis of the evidence and records transmitted to it, the failure of the appellant to submit a
memorandum on time notwithstanding.
Pursuant to the provisions of Rep. Act No. 6031,
the Clerk of Court of Caloocan City, is hereby The second paragraph of Section 45 of R.A. No. 296, otherwise known as the Philippine
directed to transmit to this Court within fifteen (15) Judiciary Act of 1948, as amended by R.A. No. 6031 provides, in part, as follows:
days from receipt hereof the transcripts of
stenographic notes taken down during the hearing
Courts of First Instance shall decide such appealed cases on the basis of
of this case before the City Court of Caloocan City,
the evidence and records transmitted from the city or municipal courts:
and likewise, counsels for both parties are given
Provided, That the parties may submit memoranda and/or brief with oral
thirty (30) days from receipt of this order within
argument if so requested ... . (Emphasis supplied).
which to file their respective memoranda, and
thereafter, this case shall be deemed submitted for
decision by this Court. The foregoing provision is clear and leaves no room for doubt. It cannot be interpreted otherwise
than that the submission of memoranda is optional on the part of the parties. Being optional on
the part of the parties, the latter may so choose to waive submission of the memoranda. And as
which order was apparently received by petitioner on April 17, 1971.
a logical concomitant of the choice given to the Parties, the Court cannot dismiss the appeal of
the party waiving the submission of said memorandum the appellant so chooses not to submit
The transcript of stenographic notes not having yet been forwarded to the the memorandum, the Court of First Instance is left with no alternative but to decide the case on
respondent court, petitioner filed on May 5, 1971 a 'MOTION EX- the basis of the evidence and records transmitted from the city or municipal courts. In other
PARTE TO SUBMIT MEMORANDUM WITHIN 30 DAYS FROM words, the Court is not empowered by law to dismiss the appeal on the mere failure of an
RECEIPT OF NOTICE OF SUBMISSION OF THE TRANSCRIPT OF appellant to submit his memorandum, but rather it is the Court's mandatory duty to decide the
STENOGRAPHIC NOTES TAKEN DURING THE HEARING OF THE case on the basis of the available evidence and records transmitted to it.
CASE BEFORE THE CITY COURT OF CALOOCAN CITY' which was
granted by respondent court on May 7, 1971. However, before the
As a general rule, the word "may" when used in a statute is permissive only and operates to
petitioner could receive any such notice from the respondent court, the
confer discretion; while the word "shall" is imperative, operating to impose a duty which may
respondent Judge issued an order on August 4, 1971 which says:
be enforced (Dizon vs. Encarnacion, L-18615, Dec. 24, 1963, 9 SCRA 714, 716-717). The
implication is that the Court is left with no choice but to decide the appealed case either on the
For failure of the defendant-appellant to prosecute basis of the evidence and records transmitted to it, or on the basis of the latter plus memoranda
her appeal the same is hereby ordered DISMISSED and/or brief with oral argument duly submitted and/or made on request.
with costs against her.
Moreover, memoranda, briefs and oral arguments are not essential requirements. They may be
Petitioner filed a motion for reconsideration of the order on September 28, submitted and/or made only if so requested.
1971, citing as a ground the granting of his ex-parte motion to submit
memorandum within 30 days from notice of the submission of the
Finally, a contrary interpretation would be unjust and dangerous as it may defeat the litigant's
stenographic notes taken before the City Court. Private respondents filed
right to appeal granted to him by law. In the case of Republic vs. Rodriguez
their opposition to the motion on September 30,1971. In the meantime, on
(L-26056, May 29, 1969, 28 SCRA 378) this Court underscored "the need of proceeding with
October 20,1971, petitioner filed her memorandum dated October 18,
caution so that a party may not be deprived of its right to appeal except for weighty reasons."
1971. On October 30, 1971 the respondent Court denied the motion for
Courts should heed the rule in Municipality of Tiwi, Albay vs. Cirujales
reconsideration. Then on January 25, 1972, petitioner filed a motion for
(L-37520, Dec. 26, 1973, 54 SCRA 390, 395), thus:
 The appellate court's summary dismissal of the appeal even before receipt
of the records of the appealed case as ordered by it in a prior mandamus
case must be set aside as having been issued precipitously and without an
opportunity to consider and appreciate unavoidable circumstances of
record not attributable to petitioners that caused the delay in the elevation
of the records of the case on appeal.

In the instant case, no notice was received by petitioner about the submission of the transcript of THIRD DIVISION
the stenographic notes, so that his 30-day period to submit his memorandum would commence
to run. Only after the expiration of such period can the respondent Judge act on the case by
deciding it on the merits, not by dismissing the appeal of petitioner. G.R. No. 167982 August 13, 2008

WHEREFORE, THE CHALLENGED ORDERS OF RESPONDENT JUDGE DATED OFFICE OF THE OMBUDSMAN, petitioner,
vs.
AUGUST 4, 1971, OCTOBER 30, 1971 AND MARCH 15, 1971 ARE HEREBY SET ASIDE
AS NULL AND VOID AND THE RESPONDENT COURT IS HEREBY DIRECTED TO MERCEDITAS DE SAHAGUN, MANUELA T. WAQUIZ and RAIDIS J.
DECIDE CIVIL CASE NO. C-2036 ON THE MERITS. NO COSTS. BASSIG, respondent.*

Muñoz Palma, Fernandez and Guerrero, JJ., concur. DECISION

AUSTRIA-MARTINEZ, J.:

Before the Court is a Petition for Review on Certiorari under Rule 45 of the Rules of Court
assailing the Decision1 dated April 28, 2005 of the Court of Appeals (CA) in CA-G.R. SP No.
78008 which set aside the Orders dated March 10, 2003 and June 24, 2003 of the petitioner
Office of the Ombudsman in OMB-ADM-0-00-0721.

The material antecedents are as follows:

On November 13, 1992, respondent Raidis J. Bassig, Chief of the Research and Publications
Division of the Intramuros Administration, submitted a Memorandum to then Intramuros
Administrator Edda V. Henson (Henson) recommending that Brand Asia, Ltd. be commissioned
to produce a video documentary for a television program, as well implement a media plan and
marketing support services for Intramuros.

On November 17, 1992, the Bids and Awards Committee (BAC) of the Intramuros
Administration, composed of respondent Merceditas de Sahagun, as Chairman, with respondent
Manuela T. Waquiz and Dominador C. Ferrer, Jr. (Ferrer), as members, submitted a
recommendation to Henson for the approval of the award of said contract to Brand Asia, Ltd.
On the same day, Henson approved the recommendation and issued a Notice of Award to Brand
Asia, Ltd.

On November 23, 1992, a contract of service to produce a video documentary on Intramuros for
TV program airing was executed between Henson and Brand Asia, Ltd. On December 1, 1992,
a Notice to Proceed was issued to Brand Asia, Ltd.
On June 2, 1993, the BAC, with Augusto P. Rustia (Rustia) as additional member, recommended Dissatisfied, respondents filed a Petition for Review8 with the CA assailing the Orders dated
to Henson the approval of the award of contract for print collaterals to Brand Asia, Ltd. On the March 10, 2003 and June 24, 2003 of the Ombudsman.
same day, Henson approved the recommendation and issued a Notice of Award/Notice to
Proceed to Brand Asia, Ltd.
On April 28, 2005, the CA rendered a Decision 9 setting aside the Orders dated March 10, 2003
and June 24, 2003 of the Ombudsman. The CA held that respondents may no longer be
On June 22, 1993, a contract of services to produce print collaterals was entered between Henson prosecuted since the complaint was filed more than seven years after the imputed acts were
and Brand Asia, Ltd. committed which was beyond the one year period provided for by Section 20 (5) of Republic
Act (R.A.) No. 6770, otherwise known as "The Ombudsman Act of 1989"; and that the nature
of the function of the Ombudsman was purely recommendatory and it did not have the power to
On March 7, 1995, an anonymous complaint was filed with the Presidential Commission Against
penalize erring government officials and employees. The CA relied on the following statement
Graft and Corruption (PGAC) against Henson in relation to the contracts entered into with Brand
made by the Court in Tapiador v. Office of the Ombudsman,10 to wit:
Asia, Ltd.

x x x Besides, assuming arguendo, that petitioner [Tapiador] was administratively

On November 30, 1995, Henson was dismissed from the service by the Office of the President
liable, the Ombudsman has no authority to directly dismiss the petitioner from
upon recommendation of the PGAC which found that the contracts were entered into without
the government service, more particularly from his position in the BID. Under
the required public bidding and in violation of Section 3 (a) and (e) of Republic Act (R.A.) No.
Section 13, subparagraph 3, of Article XI of the 1987 Constitution, the Ombudsman
3019, or the Anti-Graft and Corrupt Practices Act.
can only "recommend" the removal of the public official or employee found to
be at fault, to the public official concerned.11 (Emphasis supplied)
On August 8, 1996, an anonymous complaint was filed with the Ombudsman against the BAC
in relation to the latter’s participation in the contracts with Brand Asia, Ltd. for which Henson
Hence, the present petition raising the following issues (1) whether Section 20 (5) of R.A. No.
was dismissed from service.
6770 prohibits administrative investigations in cases filed more than one year after commission,
and (2) whether the Ombudsman only has recommendatory, not punitive, powers against erring
On September 5, 2000, Fact-Finding Intelligence Bureau (FFIB) filed criminal and government officials and employees.
administrative charges against respondents, along with Ferrer and Rustia, for violation of Section
3 (a) and (c) of R.A. No. 3019 in relation to Section 1 of Executive Order No. 302 and grave
The Court rules in favor of the petitioner.
misconduct, conduct grossly prejudicial to the best interest of the service and gross violation of
Rules and Regulations pursuant to the Administrative Code of 1987, docketed as OMB-0-00-
1411 and OMB-ADM-0-00-0721, respectively.2 OMB-0-00-1411 was dismissed on February The issues in the present case are settled by precedents.
27, 2002 for lack of probable cause.3
On the first issue, well-entrenched is the rule that administrative offenses do not
In his proposed Decision4 dated June 19, 2002, Graft Investigation Officer II Joselito P. Fangon prescribe.12 Administrative offenses by their very nature pertain to the character of public
recommended the dismissal of OMB-ADM-0-00-0721. officers and employees. In disciplining public officers and employees, the object sought is not
the punishment of the officer or employee but the improvement of the public service and the
preservation of the public’s faith and confidence in our government. 13
However, then Ombudsman Simeon V. Marcelo disapproved the recommendation. In an
Order5 dated March 10, 2003, he held that there was substantial evidence to hold respondents
administratively liable since the contracts awarded to Brand Asia, Ltd. failed to go through the Respondents insist that Section 20 (5) of R.A. No. 6770, to wit:
required procedure for public bidding under Executive Order No. 301 dated July 26, 1987.
Respondents and Ferrer were found guilty of grave misconduct and dismissed from service.
SEC. 20. Exceptions. – The Office of the Ombudsman may not conduct the
Rustia was found guilty of simple misconduct and suspended for six months without pay.
necessary investigation of any administrative act or omission complained of if it
believes that:
On March 17, 2003, respondents, along with Rustia, filed a Motion for Reconsideration. 6
xxx
On June 24, 2003, Ombudsman Marcelo issued an Order7 partially granting the motion for
reconsideration. Respondents and Ferrer were found guilty of the lesser offense of simple
(5) The complaint was filed after one year from the occurrence of the act or omission
misconduct and suspended for six months without pay. Rustia's suspension was reduced to three
complained of. (Emphasis supplied)
months.
proscribes the investigation of any administrative act or omission if the complaint was filed after b) treated as a grievance/request for assistance which may be referred to the Public
one year from the occurrence of the complained act or omission. Assistance Bureau, this Office, for appropriate action under Section 2, Rule IV of this
Rules;
In Melchor v. Gironella,14 the Court held that the period stated in Section 20(5) of R.A. No. 6770
does not refer to the prescription of the offense but to the discretion given to the Ombudsman on c) referred to other disciplinary authorities under paragraph 2, Section 23, R.A. 6770
whether it would investigate a particular administrative offense. The use of the word "may" in for the taking of appropriate administrative proceedings;
the provision is construed as permissive and operating to confer discretion.15 Where the words
of a statute are clear, plain and free from ambiguity, they must be given their literal meaning and
d) referred to the appropriate office/agency or official for the conduct of further fact-
applied without attempted interpretation.16
finding investigation; or

In Filipino v. Macabuhay,17 the Court interpreted Section 20 (5) of R.A. No. 6770 in this manner:
e) docketed as an administrative case for the purpose of administrative adjudication
by the Office of the Ombudsman. (Emphasis supplied)
Petitioner argues that based on the abovementioned provision [Section 20(5) of RA
6770)], respondent's complaint is barred by prescription considering that it was filed
It is, therefore, discretionary upon the Ombudsman whether or not to conduct an investigation of
more than one year after the alleged commission of the acts complained of.
a complaint even if it was filed after one year from the occurrence of the act or omission
complained of.
Petitioner's argument is without merit.
Thus, while the complaint herein was filed only on September 5, 2000, or more than seven years
The use of the word "may" clearly shows that it is directory in nature and not after the commission of the acts imputed against respondents in November 1992 and June 1993,
mandatory as petitioner contends. When used in a statute, it is permissive only and it was within the authority of the Ombudsman to conduct the investigation of the subject
operates to confer discretion; while the word "shall" is imperative, operating to complaint.
impose a duty which may be enforced. Applying Section 20(5), therefore, it is
discretionary upon the Ombudsman whether or not to conduct an investigation
On the second issue, the authority of the Ombudsman to determine the administrative liability
on a complaint even if it was filed after one year from the occurrence of the act
of a public official or employee, and to direct and compel the head of the office or agency
or omission complained of. In fine, the complaint is not barred by
concerned to implement the penalty imposed is likewise settled.
prescription.18 (Emphasis supplied)

In Ledesma v. Court of Appeals,22 the Court has ruled that the statement in Tapiador that made
The declaration of the CA in its assailed decision that while as a general rule the word "may" is
reference to the power of the Ombudsman to impose an administrative penalty was merely
directory, the negative phrase "may not" is mandatory in tenor; that a directory word, when
an obiter dictum and could not be cited as a doctrinal declaration of this Court, thus:
qualified by the word "not," becomes prohibitory and therefore becomes mandatory in character,
is not plausible. It is not supported by jurisprudence on statutory construction.
x x x [A] cursory reading of Tapiador reveals that the main point of the case was the
failure of the complainant therein to present substantial evidence to prove the charges
As the Court recently held in Office of the Ombudsman v. Court of Appeals,19 Section 20 of R.A.
of the administrative case. The statement that made reference to the power of the
No. 6770 has been clarified by Administrative Order No. 17, 20 which amended Administrative
Ombudsman is, at best, merely an obiter dictum and, as it is unsupported by
Order No. 07, otherwise known as the Rules of Procedure of the Office of the Ombudsman.
sufficient explanation, is susceptible to varying interpretations, as what precisely is
Section 4, Rule III21 of the amended Rules of Procedure of the Office of the Ombudsman reads:
before us in this case. Hence, it cannot be cited as a doctrinal declaration of this
Court nor is it safe from judicial examination.23 (Emphasis supplied)
Section 4. Evaluation. - Upon receipt of the complaint, the same shall be evaluated
to determine whether the same may be:
In Estarija v. Ranada,24 the Court reiterated its pronouncements in Ledesma and categorically
stated:
a) dismissed outright for any grounds stated under Section 20 of Republic Act
No. 6770, provided, however, that the dismissal thereof is not mandatory and
x x x [T]he Constitution does not restrict the powers of the Ombudsman in Section
shall be discretionary on the part of the Ombudsman or the Deputy
13, Article XI of the 1987 Constitution, but allows the Legislature to enact a law that
Ombudsman concerned;
would spell out the powers of the Ombudsman. Through the enactment of Rep. Act
No. 6770, specifically Section 15, par. 3, the lawmakers gave the Ombudsman such
 powers to sanction erring officials and employees, except members of Congress, and
the Judiciary. To conclude, we hold that Sections 15, 21, 22 and 25 of Republic Act
No. 6770 are constitutionally sound. The powers of the Ombudsman are not
merely recommendatory. His office was given teeth to render this constitutional
body not merely functional but also effective. Thus, we hold that under Republic
Act No. 6770 and the 1987 Constitution, the Ombudsman has the constitutional
power to directly remove from government service an erring public official other
than a member of Congress and the Judiciary.25 (Emphasis supplied)

The power of the Ombudsman to directly impose administrative sanctions has been repeatedly
reiterated in the subsequent cases of Barillo v. Gervasio,26 Office of the Ombudsman v.
Madriaga,27 Office of the Ombudsman v. Court of Appeals,28 Balbastro v. Junio,29 Commission
on Audit, Regional Office No. 13, Butuan City v. Hinampas,30 Office of the Ombudsman v. G.R. No. 117188 August 7, 1997
Santiago,31 Office of the Ombudsman v. Lisondra,32 and most recently in Deputy Ombudsman
for the Visayas v. Abugan33 and continues to be the controlling doctrine.
LOYOLA GRAND VILLAS HOMEOWNERS (SOUTH) ASSOCIATION,
INC., petitioner,
In fine, it is already well-settled that the Ombudsman's power as regards the administrative vs.
penalty to be imposed on an erring public officer or employee is not merely recommendatory. HON. COURT OF APPEALS, HOME INSURANCE AND GUARANTY
The Ombudsman has the power to directly impose the penalty of removal, suspension, demotion, CORPORATION, EMDEN ENCARNACION and HORATIO AYCARDO, respondents.
fine, censure, or prosecution of a public officer or employee, other than a member of Congress
and the Judiciary, found to be at fault, within the exercise of its administrative disciplinary
authority as provided in the Constitution, R.A. No. 6770, as well as jurisprudence. This power
gives the said constitutional office teeth to render it not merely functional, but also effective. 34
ROMERO, J.:
Thus, the CA committed a reversible error in holding that the case had already prescribed and
that the Ombudsman does not have the power to penalize erring government officials and May the failure of a corporation to file its by-laws within one month from the date of its
employees. incorporation, as mandated by Section 46 of the Corporation Code, result in its automatic
dissolution?
WHEREFORE, the petition is GRANTED. The Decision dated April 28, 2005 of the Court of
Appeals in CA-G.R. SP No. 78008 is REVERSED and SET ASIDE. The Order dated June 24, This is the issue raised in this petition for review on certiorari of the Decision1 of the Court of
2003 of the Office of the Ombudsman is REINSTATED. Appeals affirming the decision of the Home Insurance and Guaranty Corporation (HIGC). This
quasi-judicial body recognized Loyola Grand Villas Homeowners Association (LGVHA) as the
SO ORDERED. sole homeowners' association in Loyola Grand Villas, a duly registered subdivision in Quezon
City and Marikina City that was owned and developed by Solid Homes, Inc. It revoked the
certificates of registration issued to Loyola Grand Villas homeowners (North) Association
Incorporated (the North Association for brevity) and Loyola Grand Villas Homeowners (South)
Association Incorporated (the South Association).

LGVHAI was organized on February 8, 1983 as the association of homeowners and residents of
the Loyola Grand Villas. It was registered with the Home Financing Corporation, the predecessor
of herein respondent HIGC, as the sole homeowners' organization in the said subdivision under
Certificate of Registration No. 04-197. It was organized by the developer of the subdivision and
its first president was Victorio V. Soliven, himself the owner of the developer. For unknown
reasons, however, LGVHAI did not file its corporate by-laws.

Sometime in 1988, the officers of the LGVHAI tried to register its by-laws. They failed to do
so. 2 To the officers' consternation, they discovered that there were two other organizations
within the subdivision — the North Association and the South Association. According to private In resolving the first issue, the Court of Appeals held that under the Corporation Code, a private
respondents, a non-resident and Soliven himself, respectively headed these associations. They corporation commences to have corporate existence and juridical personality from the date the
also discovered that these associations had five (5) registered homeowners each who were also Securities and Exchange Commission (SEC) issues a certificate of incorporation under its
the incorporators, directors and officers thereof. None of the members of the LGVHAI was listed official seal. The requirement for the filing of by-laws under Section 46 of the Corporation Code
as member of the North Association while three (3) members of LGVHAI were listed as within one month from official notice of the issuance of the certificate of incorporation
members of the South Association.3 The North Association was registered with the HIGC on presupposes that it is already incorporated, although it may file its by-laws with its articles of
February 13, 1989 under Certificate of Registration No. 04-1160 covering Phases West II, East incorporation. Elucidating on the effect of a delayed filing of by-laws, the Court of Appeals said:
III, West III and East IV. It submitted its by-laws on December 20, 1988.
We also find nothing in the provisions cited by the petitioner, i.e., Section 46 and 22,
In July, 1989, when Soliven inquired about the status of LGVHAI, Atty. Joaquin A. Bautista, Corporation Code, or in any other provision of the Code and other laws which provide
the head of the legal department of the HIGC, informed him that LGVHAI had been or at least imply that failure to file the by-laws results in an automatic dissolution of
automatically dissolved for two reasons. First, it did not submit its by-laws within the period the corporation. While Section 46, in prescribing that by-laws must be adopted within
required by the Corporation Code and, second, there was non-user of corporate charter because the period prescribed therein, may be interpreted as a mandatory provision,
HIGC had not received any report on the association's activities. Apparently, this information particularly because of the use of the word "must," its meaning cannot be stretched
resulted in the registration of the South Association with the HIGC on July 27, 1989 covering to support the argument that automatic dissolution results from non-compliance.
Phases West I, East I and East II. It filed its by-laws on July 26, 1989.
We realize that Section 46 or other provisions of the Corporation Code are silent on
These developments prompted the officers of the LGVHAI to lodge a complaint with the HIGC. the result of the failure to adopt and file the by-laws within the required period. Thus,
They questioned the revocation of LGVHAI's certificate of registration without due notice and Section 46 and other related provisions of the Corporation Code are to be construed
hearing and concomitantly prayed for the cancellation of the certificates of registration of the with Section 6 (1) of P.D. 902-A. This section empowers the SEC to suspend or
North and South Associations by reason of the earlier issuance of a certificate of registration in revoke certificates of registration on the grounds listed therein. Among the grounds
favor of LGVHAI. stated is the failure to file by-laws (see also II Campos: The Corporation Code, 1990
ed., pp. 124-125). Such suspension or revocation, the same section provides, should
be made upon proper notice and hearing. Although P.D. 902-A refers to the SEC, the
On January 26, 1993, after due notice and hearing, private respondents obtained a favorable
same principles and procedures apply to the public respondent HIGC as it exercises
ruling from HIGC Hearing Officer Danilo C. Javier who disposed of HIGC Case No. RRM-5-
its power to revoke or suspend the certificates of registration or homeowners
89 as follows:
association. (Section 2 [a], E.O. 535, series 1979, transferred the powers and
authorities of the SEC over homeowners associations to the HIGC.)
WHEREFORE, judgment is hereby rendered recognizing the Loyola Grand Villas
Homeowners Association, Inc., under Certificate of Registration No. 04-197 as the
We also do not agree with the petitioner's interpretation that Section 46, Corporation
duly registered and existing homeowners association for Loyola Grand Villas
Code prevails over Section 6, P.D. 902-A and that the latter is invalid because it
homeowners, and declaring the Certificates of Registration of Loyola Grand Villas
contravenes the former. There is no basis for such interpretation considering that
Homeowners (North) Association, Inc. and Loyola Grand Villas Homeowners
these two provisions are not inconsistent with each other. They are, in fact,
(South) Association, Inc. as hereby revoked or cancelled; that the receivership be
complementary to each other so that one cannot be considered as invalidating the
terminated and the Receiver is hereby ordered to render an accounting and turn-over
other.
to Loyola Grand Villas Homeowners Association, Inc., all assets and records of the
Association now under his custody and possession.
The Court of Appeals added that, as there was no showing that the registration of LGVHAI had
been validly revoked, it continued to be the duly registered homeowners' association in the
The South Association appealed to the Appeals Board of the HIGC. In its Resolution of
Loyola Grand Villas. More importantly, the South Association did not dispute the fact that
September 8, 1993, the Board 4 dismissed the appeal for lack of merit.
LGVHAI had been organized and that, thereafter, it transacted business within the period
prescribed by law.
Rebuffed, the South Association in turn appealed to the Court of Appeals, raising two
issues. First, whether or not LGVHAI's failure to file its by-laws within the period prescribed by
On the second issue, the Court of Appeals reiterated its previous ruling 5 that the HIGC has the
Section 46 of the Corporation Code resulted in the automatic dissolution of LGVHAI. Second,
authority to order the holding of a referendum to determine which of two contending associations
whether or not two homeowners' associations may be authorized by the HIGC in one "sprawling
should represent the entire community, village or subdivision.
subdivision." However, in the Decision of August 23, 1994 being assailed here, the Court of
Appeals affirmed the Resolution of the HIGC Appeals Board.
Undaunted, the South Association filed the instant petition for review on certiorari. It elevates Appellate Court, 8 private respondents contend that Section 6(I) of that decree provides that non-
as sole issue for resolution the first issue it had raised before the Court of Appeals, i.e., whether filing of by-laws is only a ground for suspension or revocation of the certificate of registration
or not the LGVHAI's failure to file its by-laws within the period prescribed by Section 46 of the of corporations and, therefore, it may not result in automatic dissolution of the corporation.
Corporation Code had the effect of automatically dissolving the said corporation. Moreover, the adoption and filing of by-laws is a condition subsequent which does not affect the
corporate personality of a corporation like the LGVHAI. This is so because Section 9 of the
Corporation Code provides that the corporate existence and juridical personality of a corporation
Petitioner contends that, since Section 46 uses the word "must" with respect to the filing of by-
begins from the date the SEC issues a certificate of incorporation under its official seal.
laws, noncompliance therewith would result in "self-extinction" either due to non-occurrence of
Consequently, even if the by-laws have not yet been filed, a corporation may be considered a de
a suspensive condition or the occurrence of a resolutory condition "under the hypothesis that
facto corporation. To emphasize the fact the LGVHAI was registered as the sole homeowners'
(by) the issuance of the certificate of registration alone the corporate personality is deemed
association in the Loyola Grand Villas, private respondents point out that membership in the
already formed." It asserts that the Corporation Code provides for a "gradation of violations of
LGVHAI was an "unconditional restriction in the deeds of sale signed by lot buyers."
requirements." Hence, Section 22 mandates that the corporation must be formally organized and
should commence transaction within two years from date of incorporation. Otherwise, the
corporation would be deemed dissolved. On the other hand, if the corporation commences In its reply to private respondents' comment on the petition, petitioner reiterates its argument that
operations but becomes continuously inoperative for five years, then it may be suspended or its the word " must" in Section 46 of the Corporation Code is mandatory. It adds that, before the
corporate franchise revoked. ruling in Chung Ka Bio v. Intermediate Appellate Court could be applied to this case, this Court
must first resolve the issue of whether or not the provisions of P.D. No. 902-A prescribing the
rules and regulations to implement the Corporation Code can "rise above and change" the
Petitioner concedes that Section 46 and the other provisions of the Corporation Code do not
substantive provisions of the Code.
provide for sanctions for non-filing of the by-laws. However, it insists that no sanction need be
provided "because the mandatory nature of the provision is so clear that there can be no doubt
about its being an essential attribute of corporate birth." To petitioner, its submission is buttressed The pertinent provision of the Corporation Code that is the focal point of controversy in this case
by the facts that the period for compliance is "spelled out distinctly;" that the certification of the states:
SEC/HIGC must show that the by-laws are not inconsistent with the Code, and that a copy of
the by-laws "has to be attached to the articles of incorporation." Moreover, no sanction is
Sec. 46. Adoption of by-laws. — Every corporation formed under this Code, must
provided for because "in the first place, no corporate identity has been completed." Petitioner
within one (1) month after receipt of official notice of the issuance of its certificate
asserts that "non-provision for remedy or sanction is itself the tacit proclamation that non-
of incorporation by the Securities and Exchange Commission, adopt a code of by-
compliance is fatal and no corporate existence had yet evolved," and therefore, there was "no
laws for its government not inconsistent with this Code. For the adoption of by-laws
need to proclaim its demise." 6 In a bid to convince the Court of its arguments, petitioner stresses
by the corporation, the affirmative vote of the stockholders representing at least a
that:
majority of the outstanding capital stock, or of at least a majority of the members, in
the case of non-stock corporations, shall be necessary. The by-laws shall be signed
. . . the word MUST is used in Sec. 46 in its universal literal meaning and corollary by the stockholders or members voting for them and shall be kept in the principal
human implication — its compulsion is integrated in its very essence — MUST is office of the corporation, subject to the stockholders or members voting for them and
always enforceable by the inevitable consequence — that is, "OR ELSE". The use of shall be kept in the principal office of the corporation, subject to inspection of the
the word MUST in Sec. 46 is no exception — it means file the by-laws within one stockholders or members during office hours; and a copy thereof, shall be filed with
month after notice of issuance of certificate of registration OR ELSE. The OR ELSE, the Securities and Exchange Commission which shall be attached to the original
though not specified, is inextricably a part of MUST . Do this or if you do not you are articles of incorporation.
"Kaput". The importance of the by-laws to corporate existence compels such meaning
for as decreed the by-laws is "the government" of the corporation. Indeed, how can
Notwithstanding the provisions of the preceding paragraph, by-laws may be adopted
the corporation do any lawful act as such without by-laws. Surely, no law is indeed
and filed prior to incorporation; in such case, such by-laws shall be approved and
to create chaos. 7
signed by all the incorporators and submitted to the Securities and Exchange
Commission, together with the articles of incorporation.
Petitioner asserts that P.D. No. 902-A cannot exceed the scope and power of the Corporation
Code which itself does not provide sanctions for non-filing of by-laws. For the petitioner, it is
In all cases, by-laws shall be effective only upon the issuance by the Securities and
"not proper to assess the true meaning of Sec. 46 . . . on an unauthorized provision on such matter
Exchange Commission of a certification that the by-laws are not inconsistent with
contained in the said decree."
this Code.

In their comment on the petition, private respondents counter that the requirement of adoption
The Securities and Exchange Commission shall not accept for filing the by-laws or
of by-laws is not mandatory. They point to P.D. No. 902-A as having resolved the issue of
any amendment thereto of any bank, banking institution, building and loan
whether said requirement is mandatory or merely directory. Citing Chung Ka Bio v. Intermediate
 association, trust company, insurance company, public utility, educational institution now — because of the absence of a clear requirement that by-laws must be completed
or other special corporations governed by special laws, unless accompanied by a within a specified period of time, the corporation must suffer certain consequences. 13
certificate of the appropriate government agency to the effect that such by-laws or
amendments are in accordance with law.
This exchange of views demonstrates clearly that automatic corporate dissolution for failure to
file the by-laws on time was never the intention of the legislature. Moreover, even without
As correctly postulated by the petitioner, interpretation of this provision of law begins with the resorting to the records of deliberations of the Batasang Pambansa, the law itself provides the
determination of the meaning and import of the word "must" in this section Ordinarily, the word answer to the issue propounded by petitioner.
"must" connotes an imperative act or operates to impose a duty which may be enforced. 9 It is
synonymous with "ought" which connotes compulsion or mandatoriness. 10 However, the word
Taken as a whole and under the principle that the best interpreter of a statute is the statute itself
"must" in a statute, like "shall," is not always imperative. It may be consistent with an exercise
(optima statuli interpretatix est ipsum statutum), 14 Section 46 aforequoted reveals the legislative
of discretion. In this jurisdiction, the tendency has been to interpret "shall" as the context or a
intent to attach a directory, and not mandatory, meaning for the word "must" in the first sentence
reasonable construction of the statute in which it is used demands or requires. 11 This is equally
thereof. Note should be taken of the second paragraph of the law which allows the filing of the
true as regards the word "must." Thus, if the languages of a statute considered as a whole and
by-laws even prior to incorporation. This provision in the same section of the Code rules out
with due regard to its nature and object reveals that the legislature intended to use the words
mandatory compliance with the requirement of filing the by-laws "within one (1) month after
"shall" and "must" to be directory, they should be given that meaning.12
receipt of official notice of the issuance of its certificate of incorporation by the Securities and
Exchange Commission." It necessarily follows that failure to file the by-laws within that period
In this respect, the following portions of the deliberations of the Batasang Pambansa No. 68 are does not imply the "demise" of the corporation. By-laws may be necessary for the "government"
illuminating: of the corporation but these are subordinate to the articles of incorporation as well as to the
Corporation Code and related statutes.15 There are in fact cases where by-laws are unnecessary
to corporate existence or to the valid exercise of corporate powers, thus:
MR. FUENTEBELLA. Thank you, Mr. Speaker.

In the absence of charter or statutory provisions to the contrary, by-laws are not
On page 34, referring to the adoption of by-laws, are we made to understand here,
necessary either to the existence of a corporation or to the valid exercise of the powers
Mr. Speaker, that by-laws must immediately be filed within one month after the
conferred upon it, certainly in all cases where the charter sufficiently provides for the
issuance? In other words, would this be mandatory or directory in character?
government of the body; and even where the governing statute in express terms
confers upon the corporation the power to adopt by-laws, the failure to exercise the
MR. MENDOZA. This is mandatory. power will be ascribed to mere nonaction which will not render void any acts of the
corporation which would otherwise be valid. 16 (Emphasis supplied.)
MR. FUENTEBELLA. It being mandatory, Mr. Speaker, what would be the effect of
the failure of the corporation to file these by-laws within one month? As Fletcher aptly puts it:

MR. MENDOZA. There is a provision in the latter part of the Code which identifies It has been said that the by-laws of a corporation are the rule of its life, and that until
and describes the consequences of violations of any provision of this Code. One such by-laws have been adopted the corporation may not be able to act for the purposes of
consequences is the dissolution of the corporation for its inability, or perhaps, its creation, and that the first and most important duty of the members is to adopt
incurring certain penalties. them. This would seem to follow as a matter of principle from the office and functions
of by-laws. Viewed in this light, the adoption of by-laws is a matter of practical, if
not one of legal, necessity. Moreover, the peculiar circumstances attending the
MR. FUENTEBELLA. But it will not automatically amount to a dissolution of the formation of a corporation may impose the obligation to adopt certain by-laws, as in
corporation by merely failing to file the by-laws within one month. Supposing the the case of a close corporation organized for specific purposes. And the statute or
corporation was late, say, five days, what would be the mandatory penalty?
general laws from which the corporation derives its corporate existence may
expressly require it to make and adopt by-laws and specify to some extent what they
MR. MENDOZA. I do not think it will necessarily result in the automatic or ipso shall contain and the manner of their adoption. The mere fact, however, of the
facto dissolution of the corporation. Perhaps, as in the case, as you suggested, in the existence of power in the corporation to adopt by-laws does not ordinarily and of
case of El Hogar Filipino where a quo warranto action is brought, one takes into necessity make the exercise of such power essential to its corporate life, or to the
account the gravity of the violation committed. If the by-laws were late — the filing validity of any of its acts. 17
of the by-laws were late by, perhaps, a day or two, I would suppose that might be a
tolerable delay, but if they are delayed over a period of months — as is happening
Although the Corporation Code requires the filing of by-laws, it does not expressly provide for interpretandi. Every statute must be so construed and harmonized with other statutes as to form
the consequences of the non-filing of the same within the period provided for in Section 46. a uniform system of jurisprudence. 18
However, such omission has been rectified by Presidential Decree No. 902-A, the pertinent
provisions on the jurisdiction of the SEC of which state:
As the "rules and regulations or private laws enacted by the corporation to regulate, govern and
control its own actions, affairs and concerns and its stockholders or members and directors and
Sec. 6. In order to effectively exercise such jurisdiction, the Commission shall officers with relation thereto and among themselves in their relation to it," 19 by-laws are
possess the following powers: indispensable to corporations in this jurisdiction. These may not be essential to corporate birth
but certainly, these are required by law for an orderly governance and management of
corporations. Nonetheless, failure to file them within the period required by law by no means
xxx xxx xxx
tolls the automatic dissolution of a corporation.

(1) To suspend, or revoke, after proper notice and hearing, the franchise or
In this regard, private respondents are correct in relying on the pronouncements of this Court
certificate of registration of corporations, partnerships or associations, upon any of
in Chung Ka Bio v. Intermediate Appellate Court, 20 as follows:
the grounds provided by law, including the following:

. . . . Moreover, failure to file the by-laws does not automatically operate to dissolve
xxx xxx xxx
a corporation but is now considered only a ground for such dissolution.

5. Failure to file by-laws within the required period;

Section 19 of the Corporation Law, part of which is now Section 22 of the
Corporation Code, provided that the powers of the corporation would cease if it did
xxx xxx xxx not formally organize and commence the transaction of its business or the
continuation of its works within two years from date of its incorporation. Section 20,
which has been reproduced with some modifications in Section 46 of the Corporation
In the exercise of the foregoing authority and jurisdiction of the Commission or by a
Code, expressly declared that "every corporation formed under this Act, must within
Commissioner or by such other bodies, boards, committees and/or any officer as may one month after the filing of the articles of incorporation with the Securities and
be created or designated by the Commission for the purpose. The decision, ruling or Exchange Commission, adopt a code of by-laws." Whether this provision should be
order of any such Commissioner, bodies, boards, committees and/or officer may be
given mandatory or only directory effect remained a controversial question until it
appealed to the Commission sitting en banc within thirty (30) days after receipt by became academic with the adoption of PD 902-A. Under this decree, it is now clear
the appellant of notice of such decision, ruling or order. The Commission shall that the failure to file by-laws within the required period is only a ground for
promulgate rules of procedures to govern the proceedings, hearings and appeals of
suspension or revocation of the certificate of registration of corporations.
cases falling with its jurisdiction.

Non-filing of the by-laws will not result in automatic dissolution of the corporation.
The aggrieved party may appeal the order, decision or ruling of the Commission Under Section 6(I) of PD 902-A, the SEC is empowered to "suspend or revoke, after
sitting en banc to the Supreme Court by petition for review in accordance with the proper notice and hearing, the franchise or certificate of registration of a corporation"
pertinent provisions of the Rules of Court. on the ground inter alia of "failure to file by-laws within the required period." It is
clear from this provision that there must first of all be a hearing to determine the
Even under the foregoing express grant of power and authority, there can be no automatic existence of the ground, and secondly, assuming such finding, the penalty is not
corporate dissolution simply because the incorporators failed to abide by the required filing of necessarily revocation but may be only suspension of the charter. In fact, under the
by-laws embodied in Section 46 of the Corporation Code. There is no outright "demise" of rules and regulations of the SEC, failure to file the by-laws on time may be penalized
corporate existence. Proper notice and hearing are cardinal components of due process in any merely with the imposition of an administrative fine without affecting the corporate
democratic institution, agency or society. In other words, the incorporators must be given the existence of the erring firm.
chance to explain their neglect or omission and remedy the same.
It should be stressed in this connection that substantial compliance with conditions
That the failure to file by-laws is not provided for by the Corporation Code but in another law is subsequent will suffice to perfect corporate personality. Organization and
of no moment. P.D. No. 902-A, which took effect immediately after its promulgation on March commencement of transaction of corporate business are but conditions subsequent
11, 1976, is very much apposite to the Code. Accordingly, the provisions abovequoted supply and not prerequisites for acquisition of corporate personality. The adoption and filing
the law governing the situation in the case at bar, inasmuch as the Corporation Code and P.D. of by-laws is also a condition subsequent. Under Section 19 of the Corporation Code,
No. 902-A are statutes in pari materia. Interpretare et concordare legibus est optimus a Corporation commences its corporate existence and juridical personality and is
 deemed incorporated from the date the Securities and Exchange Commission issues The following are the antecedents.
certificate of incorporation under its official seal. This may be done even before the
filing of the by-laws, which under Section 46 of the Corporation Code, must be
On 9 April 2002, private respondent Jose Martillos (respondent) filed a complaint against
adopted "within one month after receipt of official notice of the issuance of its
petitioners for illegal dismissal and money claims such as the payment of separation pay in lieu
certificate of incorporation." 21
of reinstatement plus full backwages, service incentive leave, 13 th month pay, litigation
expenses, underpayment of holiday pay and other equitable reliefs before the National Capital
That the corporation involved herein is under the supervision of the HIGC does not alter the Arbitration Branch of the National Labor Relations Commission (NLRC), docketed as NLRC
result of this case. The HIGC has taken over the specialized functions of the former Home NCR South Sector Case No. 30-04-01856-02.
Financing Corporation by virtue of Executive Order No. 90 dated December 17, 1989. 22 With
respect to homeowners associations, the HIGC shall "exercise all the powers, authorities and
Respondent alleged that he had been hired as a driver-mechanic sometime in 1988 but was not
responsibilities that are vested on the Securities and Exchange Commission . . . , the provision
made to sign any employment contract by petitioners. As driver mechanic, respondent was
of Act 1459, as amended by P.D. 902-A, to the contrary notwithstanding." 23
assigned to work at Carmona, Cavite and he worked daily from 7:00 a.m. to 10:00 p.m. at the
rate of P200.00 a day. He was also required to work during legal holidays but was only paid an
WHEREFORE, the instant petition for review on certiorari is hereby DENIED and the additional 30% holiday pay. He likewise claimed that he had not been paid service incentive
questioned Decision of the Court of Appeals AFFIRMED. This Decision is immediately leave and 13th month pay during the entire course of his employment. On 16 March 2002, his
executory. Costs against petitioner. employment was allegedly terminated without due process.5

SO ORDERED. Petitioners denied respondent’s allegations. They contended that respondent had been hired on
several occasions as a project employee and that his employment was coterminous with the
duration of the projects. They also maintained that respondent was fully aware of this
arrangement. Considering that respondent’s employment had been validly terminated after the
completion of the projects, petitioners concluded that he is not entitled to separation pay and
other monetary claims, even attorney’s fees.6

The Labor Arbiter ruled that respondent had been illegally dismissed after finding that he had
acquired the status of a regular employee as he was hired as a driver with little interruption from
one project to another, a task which is necessary to the usual trade of his employer. 7 The Labor
Arbiter pertinently stated as follows:

SECOND DIVISION x x x If it were true that complainant was hired as project employee, then there should
have been project employment contracts specifying the project for which
G.R. No. 172409 February 4, 2008 complainant’s services were hired, as well as the duration of the project as required
in Art. 280 of the Labor Code. As there were four (4) projects where complainant
was allegedly assigned, there should have been the equal number of project
ROOS INDUSTRIAL CONSTRUCTION, INC. and OSCAR TOCMO, petitioners, employment contracts executed by the complainant. Further, for every project
vs. termination, there should have been the equal number of termination report submitted
NATIONAL LABOR RELATIONS COMMISSION and JOSE to the Department of Labor and Employment. However, the record shows that there
MARTILLOS, respondents. is only one termination [report] submitted to DOLE pertaining to the last project
assignment of complainant in Carmona, Cavite.
DECISION
In the absence of said project employment contracts and the corresponding
TINGA, J.: Termination Report to DOLE at every project termination, the inevitable conclusion
is that the complainant was a regular employee of the respondents.
In this Petition for Review on Certiorari1 under Rule 45 of the 1997 Rules of Civil Procedure,
petitioners Roos Industrial Construction, Inc. and Oscar Tocmo assail the Court of In the case of Maraguinot, Jr. v. NLRC, 284 SCRA 539, 556 [1998], citing capital
Appeals’2 Decision dated 12 January 2006 in C.A. G.R. SP No. 87572 and its Resolution3 dated Industrial Construction Group v. NLRC, 221 SCRA 469, 473-474 [1993], it was ruled
10 April 2006 denying their Motion for Reconsideration. 4 therein that a project employee may acquire the status of a regular employee when
 the following concurs: (1) there is a continuous rehiring of project employees even review.18 On 12 January 2006, the Court of Appeals affirmed the challenged resolution of the
after the cessation of a project; and (2) the tasks performed by the alleged "project NLRC. Hence, the instant petition.
employee" are vital, necessary and indispensable to the usual business or trade of the
employer. Both factors are present in the instant case. Thus, even granting that
Before this Court, petitioners reiterate their previous assertions. They insist on the application
complainant was hired as a project employee, he eventually became a regular
of Star Angel Handicraft v. National Labor Relations Commission, et al.19where it was held that
employee as there was a continuous rehiring of this services.
a motion for reduction of bond may be filed in lieu of the bond during the period for appeal.
They aver that Borja Estate v. Ballad,20which underscored the importance of the filing of a cash
xxx or surety bond in the perfection of appeals in labor cases, had not been promulgated yet in 2003
when they filed their appeal. As such, the doctrine in Borja could not be given retroactive effect
for to do so would prejudice and impair petitioners’ right to appeal. Moreover, they point out
In the instant case, apart from the fact that complainant was not made to sign any
that judicial decisions have no retroactive effect.21
project employment contract x x x he was successively transferred from one project
after another, and he was made to perform the same kind of work as driver. 8
The Court denies the petition.
The Labor Arbiter ordered petitioners to pay respondent the aggregate sum of P224,647.17
representing backwages, separation pay, salary differential, holiday pay, service incentive leave The Court reiterates the settled rule that an appeal from the decision of the Labor Arbiter
pay and 13th month pay.9 involving a monetary award is only deemed perfected upon the posting of a cash or surety bond
within ten (10) days from such decision.22 Article 223 of the Labor Code states:
Petitioners received a copy of the Labor Arbiter’s decision on 17 December 2003. On 29
December 2003, the last day of the reglementary period for perfecting an appeal, petitioners filed ART. 223. Appeal.—Decisions, awards or orders of the Labor Arbiter are final and
a Memorandum of Appeal10 before the NLRC and paid the appeal fee. However, instead of executory unless appealed to the Commission by any or both parties within ten (10)
posting the required cash or surety bond within the reglementary period, petitioners filed a calendar days from receipt of such decisions, awards, or orders. …
Motion for Extension of Time to Submit/Post Surety Bond.11 Petitioners stated that they could
not post and submit the required surety bond as the signatories to the bond were on leave during
In case of a judgment involving a monetary award, an appeal by the employer may
the holiday season, and made a commitment to post and submit the surety bond on or before 6
be perfected only upon the posting of a cash or surety bond issued by a reputable
January 2004. The NLRC did not act on the motion. Thereafter, on 6 January 2004, petitioners
bonding company duly accredited by the Commission in the amount equivalent to
filed a surety bond equivalent to the award of the Labor Arbiter. 12
the monetary award in the judgment appealed from.

In a Resolution13 dated July 29, 2004, the Second Division of the NLRC dismissed petitioners’
xxx
appeal for lack of jurisdiction. The NLRC stressed that the bond is an indispensable requisite for
the perfection of an appeal by the employer and that the perfection of an appeal within the
reglementary period and in the manner prescribed by law is mandatory and jurisdictional. In Contrary to petitioners’ assertion, the appeal bond is not merely procedural but jurisdictional.
addition, the NLRC restated that its Rules of Procedure proscribes the filing of any motion for Without said bond, the NLRC does not acquire jurisdiction over the appeal.23 Indeed, non-
extension of the period within which to perfect an appeal. The NLRC summed up that compliance with such legal requirements is fatal and has the effect of rendering the judgment
considering that petitioners’ appeal had not been perfected, it had no jurisdiction to act on said final and executory.24 It must be stressed that there is no inherent right to an appeal in a labor
appeal and the assailed decision, as a consequence, has become final and executory. 14 The NLRC case, as it arises solely from the grant of statute.25
likewise denied petitioners’ Motion for Reconsideration 15 for lack of merit in another
Resolution.16 On 11 November 2004, the NLRC issued an entry of judgment declaring its
resolution final and executory as of 9 October 2004. On respondent’s motion, the Labor Arbiter Evidently, the NLRC did not acquire jurisdiction over petitioners’ appeal within the ten (10)-day
ordered that the writ of execution be issued to enforce the award. On 26 January 2005, a writ of reglementary period to perfect the appeal as the appeal bond was filed eight (8) days after the
last day thereof. Thus, the Court cannot ascribe grave abuse of discretion to the NLRC or error
execution was issued.17
to the Court of Appeals in refusing to take cognizance of petitioners’ belated appeal.

Petitioners elevated the dismissal of their appeal to the Court of Appeals by way of a special
While indeed the Court has relaxed the application of this requirement in cases where the failure
civil action of certiorari. They argued that the filing of the appeal bond evinced their willingness
to comply and was in fact substantial compliance with the Rules. They likewise maintained that to comply with the requirement was justified or where there was substantial compliance with the
the NLRC gravely abused its discretion in failing to consider the meritorious grounds for their rules,26 the overpowering legislative intent of Article 223 remains to be for a strict application of
the appeal bond requirement as a requisite for the perfection of an appeal and as a burden
motion for extension of time to file the appeal bond. Lastly, petitioners contended that the NLRC
gravely erred in issuing an entry of judgment as the assailed resolution is still open for imposed on the employer.27 As the Court held in the case of Borja Estate v. Ballad:28
 The intention of the lawmakers to make the bond an indispensable requisite for the At all events, the decision of the Labor Arbiter appears to be well-founded and petitioners’ ill-
perfection of an appeal by the employer is underscored by the provision that an appeal starred appeal untenable.
may be perfected "only upon the posting of a cash or surety bond." The word "only"
makes it perfectly clear that the LAWMAKERS intended the posting of a cash or
WHEREFORE, the Petition is DENIED. Costs against petitioners.
surety bond by the employer to be

SO ORDERED.
the exclusive means by which an employer’s appeal may be considered completed.
The law however does not require its outright payment, but only the posting of a bond
to ensure that the award will be eventually paid should the appeal fail. What THIRD DIVISION
petitioners have to pay is a moderate and reasonable sum for the premium of such
bond.29

Moreover, no exceptional circumstances obtain in the case at bar which would warrant a
relaxation of the bond requirement as a condition for perfecting the appeal. It is only in highly G.R. No. 98382 May 17, 1993
meritorious cases that this Court opts not to strictly apply the rules and thus prevent a grave
injustice from being done30 and this is not one of those cases. PHILIPPINE NATIONAL BANK, petitioner,
vs.
In addition, petitioners cannot take refuge behind the Court’s ruling in Star Angel. Pertinently, THE COURT OF APPEALS and EPIFANIO DE LA CRUZ, respondents.
the Court stated in Computer Innovations Center v. National Labor Relations Commission:31
Santiago, Jr., Vidad, Corpus & Associates for petitioner.
Moreover, the reference in Star Angel to the distinction between the period to file the
appeal and to perfect the appeal has been pointedly made only once by this Court Pedro R. Lazo for spouses-intervenors.
in Gensoli v. NLRC thus, it has not acquired the sheen of venerability reserved for
repeatedly-cited cases. The distinction, if any, is not particularly evident or material
in the Labor Code; hence, the reluctance of the Court to adopt such doctrine. Rosendo G. Tansinsin, Jr. for private respondent.
Moreover, the present provision in the NLRC Rules of Procedure, that "the filing of
a motion to reduce bond shall not stop the running of the period to perfect appeal"
flatly contradicts the notion expressed in Star Angel that there is a distinction between
filing an appeal and perfecting an appeal.
MELO, J.:

Ultimately, the disposition of Star Angel was premised on the ruling that a motion for
reduction of the appeal bond necessarily stays the period for perfecting the appeal, The notices of sale under Section 3 of Act No. 3135, as amended by Act No. 4118, on extra-
and that the employer cannot be expected to perfect the appeal by posting the proper judicial foreclosure of real estate mortgage are required to be posted for not less than twenty
bond until such time the said motion for reduction is resolved. The unduly stretched- days in at least three public places of the municipality or city where the property is situated, and
out distinction between the period to file an appeal and to perfect an appeal was not if such property is worth more than four hundred pesos, such notices shall also be published once
material to the resolution of Star Angel, and thus could properly be considered a week for at least three consecutive weeks in a newspaper of general circulation in the
as obiter dictum.32 municipality or city.

Lastly, the Court does not agree that the Borja doctrine should only be applied prospectively. In Respondent court, through Justice Filemon Mendoza with whom Justices Campos, Jr. and
the first place, Borja is not a ground-breaking precedent as it is a reiteration, emphatic though, Aldecoa, Jr. concurred, construed the publication of the notices on March 28, April 11 and l2,
of long standing jurisprudence.33 It is well to recall too our pronouncement in Senarillos v. 1969 as a fatal announcement and reversed the judgment appealed from by declaring void, inter
Hermosisima, et al.34 that the judicial interpretation of a statute constitutes part of the law as of alia, the auction sale of the foreclosed pieces of realty, the final deed of sale, and the
the date it was originally passed, since the Court’s construction merely establishes the consolidation of ownership (p. 27, Rollo).
contemporaneous legislative intent that the interpreted law carried into effect. Such judicial
doctrine does not amount to the passage of a new law but consists merely of a construction or Hence, the petition at bar, premised on the following backdrop lifted from the text of the
interpretation of a pre-existing one, as is the situation in this case.35 challenged decision:
The facts of the case as related by the trial court are, as follows: [1 This date of June 30, 1958 is disputed by the plaintiff who claims that
the correct date is June 30, 1961, which is the date actually mentioned in
the promissory note. It is however difficult to believe the plaintiff's
This is a verified complaint brought by the plaintiff
contention since if it were true and correct, this would mean that nearly
for the reconveyance to him (and resultant
three (3) years elapsed between the second and the third promissory note;
damages) of two (2) parcels of land mortgaged by
that at the time the third note was executed, the first two had not yet been
him to the defendant Philippine National Bank
paid by the plaintiff despite the fact that the first two were supposed to be
(Manila), which the defendant allegedly
payable within 69 and 49 days respectively. This state of affairs would
unlawfully foreclosed. The defendant then
have necessitated the renewal of said two promissory notes. No such
consolidated ownership unto itself, and
renewal was proved, nor was the renewal ever alleged. Finally, and this is
subsequently sold the parcels to third parties. The
very significant: the third mentioned promissory note states that the
amended Answer of the defendant states on the
maturity date is Nov. 10, 1958. Now then, how could the loan have been
other hand that the extrajudicial foreclosure,
contracted on June 30, 1961? It will be observed that in the bank records,
consolidation of ownership, and subsequent sale to
the third mentioned promissory note was really executed on June 30, 1958
the third parties were all valid, the bank therefore
(See Exhs. 9 and 9-A). The Court is therefore inclined to believe that the
counterclaims for damages and other equitable
date "June 30, 1961" was a mere clerical error and hat the true and correct
remedies.
date is June 1958. However, even assuming that the true and correct date
is June 30, 1961, the fact still remains that the first two promissory notes
xxx xxx xxx had been guaranteed by the mortgage of the two lots, and therefore, it
was legal and proper to foreclose on the lots for failure to pay said two
promissory notes.
From the evidence and exhibits presented by both
parties, the Court is of the opinion that the
following facts have been proved: Two lots, On September 6, 1961, Atty. Ramon de los Reyes of the bank (PNB)
located at Bunlo, Bocaue, Bulacan (the first presented under Act No. 3135 a foreclosure petition of the two mortgaged
covered by Torrens Certificate No. 16743 and lots before the Sheriff's Office at Malolos, Bulacan; accordingly, the two
possessed of an area of approximately 3,109 square lots were sold or auctioned off on October 20, 1961 with the defendant
meters: the second covered by Torrens Certificate PNB as the highest bidder for P28,908.46. On March 7, 1963, Sheriff
No. 5787, possessed of an area of around 610 Leopoldo Palad executed a Final Deed of Sale, in response to a letter-
square meters, and upon which stood a residential- request by the Manager of the PNB (Malolos Branch). On January 15,
commercial building were mortgaged to the 1963 a Certificate of Sale in favor of the defendant was executed by
defendant Philippine National Bank. The lots were Sheriff Palad. The final Deed of Sale was registered in the Bulacan
under the common names of the plaintiff (Epifanio Registry of Property on March 19, 1963. Inasmuch as the plaintiff did not
dela Cruz), his brother (Delfin) and his sister volunteer to buy back from the PNB the two lots, the PNB sold on June
(Maria). The mortgage was made possible because 4, 1970 the same to spouses Conrado de Vera and Marina de Vera in a
of the grant by the latter two to the former of a "Deed of Conditional Sale". (Decision, pp.3-5; Amended Record on
special power of attorney to mortgage the lots to Appeal, pp. 96-98).
the defendant. The lots were mortgaged to
guarantee the following promissory notes:
After due consideration of the evidence, the CFI on January 22, 1978
rendered its Decision, the dispositive portion of which reads:
(1) a promissory note for Pl2,000.00, dated September 2, 1958, and
payable within 69 days (date of maturity — Nov. l0, 1958);
WHEREFORE, PREMISES CONSIDERED, the
instant complaint against the defendant Philippine
(2) a promissory note for P4,000.00, dated September 22, 1958, and National Bank is hereby ordered DISMISSED,
payable within 49 days (date of maturity — Nov. 10, 1958); with costs against the plaintiff. The Counterclaim
against the plaintiff is likewise DISMISSED, for
the Court does not believe that the complaint had
(3) a promissory note for P4,000.00, dated June 30, 1.9581 and payable been made in bad faith.
within 120 days (date of maturity — Nov. 10, 1958) See also Annex C of
the complaint itself).
 SO ORDERED. (Decision, p. B.; Amended Record V.
on Appeal, p. 100)
THE LOWER COURT ERRED IN HOLDING THAT "THE NOTICES
Not satisfied with the judgment, plaintiff interposed the present appeal REQUIRED UNDER SEC. 3 OF ACT NO. 3135 WERE ALL
assigning as errors the following: COMPLIED WITH" AND "THAT THE DAILY RECORD . . . IS A
NEWSPAPER OF GENERAL CIRCULATION (pages 117-118,
Amended Record on Appeal).
I.

VI.
THE LOWER COURT ERRED IN HOLDING IN FOOTNOTE I OF ITS
DECISION THAT IT IS THEREFORE INCLINED TO BELIEVE
THAT THE DATE "JUNE 30, 1962" WAS A MERE CLERICAL THE LOWER COURT ERRED IN NOT DECLARING THE
ERROR AND THAT THE TRUE AND CORRECT DATE IS JUNE 30, CERTIFICATE OF SALE, FINAL DEED OF SALE AND AFFIDAVIT
1958. IT ALSO ERRED IN HOLDING IN THE SAME FOOTNOTE I OF CONSOLIDATION, NULL AND VOID.
THAT "HOWEVER, EVEN ASSUMING THAT THE TRUE AND
CORRECT DATE IS JUNE 30, 1961, THE FACT STILL REMAINS
VII.
THAT THE FIRST TWO PROMISSORY NOTES HAD BEEN
GUARANTEED BY THE MORTGAGE OF THE TWO LOTS, AND
THEREFORE, IT WAS LEGAL AND PROPER TO FORECLOSE ON THE LOWER COURT ERRED IN NOT ORDERING DEFENDANT
THE LOTS FOR FAILURE TO PAY SAID TWO PROMISSORY TO RECONVEY TO PLAINTIFF THE PARCELS OF LAND
NOTES". (page 115, Amended Record on Appeal) COVERED BY T.C.T. NOS. 40712 AND 40713 OF BULACAN (page
8, Amended Record on Appeal)
II.
VIII.
THE LOWER COURT ERRED IN NOT HOLDING THAT THE
PETITION FOR EXTRAJUDICIAL FORECLOSURE WAS THE LOWER COURT ERRED IN NOT ORDERING DEFENDANT
PREMATURELY FILED AND IS A MERE SCRAP OF PAPER TO PAY TO PLAINTIFF REASONABLE AMOUNTS OF MORAL
BECAUSE IT MERELY FORECLOSED THE ORIGINAL AND NOT AND EXEMPLARY DAMAGES AND ATTORNEY'S FEES (page 8.
THE AMENDED MORTGAGE. Amended Record on Appeal).

III. IX.

THE LOWER COURT ERRED IN HOLDING THAT "IT IS CLEAR THE LOWER COURT ERRED IN DISMISSING THE INSTANT
THAT THE AUCTION SALE WAS NOT PREMATURE". (page 117, COMPLAINT AGAINST THE PHILIPPINE NATIONAL BANK WITH
Amended Record on Appeal) COSTS AGAINST THE PLAINTIFF. (page 118, Amended Record on
Appeal)." (Brief for Plaintiff-Appellant, pp. 1-4) (pp. 17-21, Rollo)
IV.
With reference to the pertinent issue at hand, respondent court opined:
THE LOWER COURT ERRED IN HOLDING THAT "SUFFICE IT TO
STATE THAT ACTUALLY THE POWER OF ATTORNEY GIVEN TO The Notices of Sale of appellant's foreclosed properties were published
THE PNB WAS EMBODIED IN THE REAL ESTATE MORTGAGE on March 228, April 11 and April 12, 1969 issues of the newspaper "Daily
(EXB. 10) WHICH WAS REGISTERED IN THE REGISTRY OF Record" (Amended Record on Appeal, p. 108). The date March 28, 1969
PROPERTY OF BULACAN AND WAS ANNOTATED ON THE TWO falls on a Friday while the dates April 11 and 12, 1969 are on a Friday and
TORRENS CERTIFICATES INVOLVED" (page 118, Amended Record Saturday, respectively. Section 3 of Act No. 3135 requires that the notice
on Appeal). of auction sale shall be "published once a week for at least three
consecutive weeks". Evidently, defendant-appellee bank failed to comly
with this legal requirement. The Supreme Court has held that:
 The rule is that statutory provisions governing discrepancy was a mere clerical error pursuant to Section 7, Rule l30 of the Rules of Court. Anent
publication of notice of mortgage foreclosure sales the second disputation aired by private respondent, the appellate court observed that inasmuch
must be strictly complied with, and that even slight as the original as well as the subsequent mortgage were foreclosed only after private respondent's
deviations therefrom will invalidate the notice and default, the procedure pursued by herein petitioner in foreclosing the collaterals was thus
render the sale at least voidable (Jalandoni vs. appropriate albeit the petition therefor contained only a copy of the original mortgage.
Ledesma, 64 Phil. l058. G.R. No. 42589, August
1937 and October 29, 1937). Interpreting Sec. 457
It was only on the aspect of publication of the notices of sale under Act No. 3135, as amended,
of the Code of Civil Procedure (reproduced in Sec.
and attorney's fees where herein private respondent scored points which eliminated in the
18(c) of Rule 39, Rules of Court and in Sec. 3 of
reversal of the trial court's decision. Respondent court was of the impression that herein
Act No. 3135) in Campomanes vs.
petitioner failed to comply with the legal requirement and the sale effected thereafter must be
Bartolome and German & Co. (38 Phil. 808, G.R.
adjudged invalid following the ruling of this Court in Tambunting vs. Court of Appeals (167
No. 1309, October 18, 1918), this Court held that
SCRA 16 [1988]); p. 8, Decision, p. 24, Rollo). In view of petitioner's so-called indifference to
if a sheriff sells without notice prescribed by the
the rules set forth under Act No. 3135, as amended, respondent court expressly authorized private
Code of Civil Procedure induced thereto by the
respondent to recover attorney's fees because he was compelled to incur expenses to protect his
judgment creditor, and the purchaser at the sale is
interest.
the judgment creditor, the sale is absolutely void
and no title passes. This is regarded as the settled
doctrine in this jurisdiction whatever the rule may Immediately upon the submission of a supplemental petition, the spouses Conrado and Marina
be elsewhere (Boria vs. Addison, 14 Phil. 895, De Vera filed a petition in intervention claiming that the two parcels of land involved herein
G.R. No. 18010, June 21, 1922). were sold to them on June 4, 1970 by petitioner for which transfer certificates of title were issued
in their favor (p. 40, Rollo). On the other hand, private respondent pressed the idea that the
alleged intervenors have no more interest in the disputed lots in view of the sale effected by them
. . . It has been held that failure to advertise a
to Teresa Castillo, Aquilino and Antonio dela Cruz in 1990 (pp. 105-106, Rollo).
mortgage foreclosure sale in compliance with
statutory requirements constitutes a jurisdictional
defect invalidating the sale and that a substantial On March 9, 1992, the Court resolved to give due course to the petition and required the parties
error or omission in a notice of sale will render the to submit their respective memoranda (p. 110, Rollo).
notice insufticient and vitiate the sale (59 C.J.S.
1314). (Tambunting vs. Court of Appeals, L-
48278, November 8, 1988; 167 SCRA 16, 23-24). Now, in support of the theory on adherence to the conditions spelled in the preliminary portion
of this discourse, the pronouncement of this Court in Bonnevie vs. Court of Appeals (125 SCRA
[1983]; p. 135, Rollo) is sought to be utilized to press the point that the notice need not be
In view of the admission of defendant-appellee in its pleading showing published for three full weeks. According to petitioner, there is no breach of the proviso since
that there was no compliance of the notice prescribed in Section 3 of Act after the first publication on March 28, 1969, the second notice was published on April 11, 1969
No. 3135, as amended by Act 4118, with respect to the notice of sale of (the last day of the second week), while the third publication on April 12, 1969 was announced
the foreclosed real properties in this case, we have no choice but to declare on the first day of the third week. Petitioner thus concludes that there was no violation from the
the auction sale as absolutely void in view of the fact that the highest mere happenstance that the third publication was made only a day after the second publication
bidder and purchaser in said auction sale was defendant-appellee bank. since it is enough that the second publication be made on any day within the second week and
Consequently, the Certificate of Sale, the Final Deed of Sale and Affidavit the third publication, on any day within the third week. Moreover, in its bid to rectify its
of Consolidation are likewise of no legal efffect. (pp. 24-25, Rollo) admission in judicio, petitioner asseverates that said admission alluded to refers only to the dates
of publications, not that there was non-compliance with the publication requirement.
Before we focus our attention on the subject of whether or not there was valid compliance in
regard to the required publication, we shall briefly discuss the other observations of respondent Private respondent, on the other hand, views the legal question from a different perspective. He
court vis-a-vis herein private respondent's ascriptions raised with the appellate court when his believes that the period between each publication must never be less than seven consecutive days
suit for reconveyance was dismissed by the court of origin even as private respondent does not (p. 4, Memorandum; p. 124, Rollo).
impugn the remarks of respondent court along this line.
We are not convinced by petitioner's submissions because the disquisition in support thereof
Although respondent court acknowledged that there was an ambiguity on the date of execution rests on the erroneous impression that the day on which the first publication was made, or on
of the third promissory note (June 30, 1961) and the date of maturity thereof (October 28, 1958), March 28, 1969, should be excluded pursuant to the third paragraph of Article 17 of the New
it was nonetheless established that the bank introduced sufficient proof to show that the Civil Code.
It must be conceded that Article 17 is completely silent as to the definition of what is a "week".
In Concepcion vs. Zandueta (36 O.G. 3139 [1938]; Moreno, Philippine Law Dictionary, Second
Ed., 1972, p. 660), this term was interpreted to mean as a period of time consisting of seven
consecutive days — a definition which dovetails with the ruling in E.M. Derby and Co. vs. City
of Modesto, et al. (38 Pac. Rep. 900 [1984]; 1 Paras, Civil Code of the Philippines Annotated,
Twelfth Ed., 1989, p. 88; 1 Tolentino, Commentaries and Jurisprudence on th Civil Code, 1990, EN BANC
p. 46). Following the interpretation in Derby as to the publication of an ordinance for "at least
two weeks" in some newspaper that:

. . . here there is no date or event suggesting the exclusion of the first day's
publication from the computation, and the cases above cited take this case G.R. No. 109902 August 2, 1994
out of the rule stated in Section 12, Code Civ. Proc. which excludes the
first day and includes the last; ALU-TUCP, Representing Members: ALAN BARINQUE, with 13 others, namely: ENGR.
ALAN G. BARINQUE, ENGR. DARRELL LEE ELTAGONDE, EDUARD H.
the publication effected on April 11, 1969 cannot be construed as sufficient FOOKSON, JR., ROMEO R. SARONA, RUSSELL GACUS, JERRY BONTILAO,
advertisement for the second week because the period for the first week should be EUSEBIO MARIN, JR., LEONIDO ECHAVEZ, BONIFACIO MEJOS, EDGAR S.
reckoned from March 28, 1969 until April 3, 1969 while the second week should be BONTUYAN, JOSE G. GARGUENA, JR., OSIAS B. DANDASAN, and GERRY I.
counted from April 4, 1969 until April 10, 1969. It is clear that the announcement on FETALVERO, petitioners,
April 11, 1969 was both theoretically and physically accomplished during the first vs.
day of the third week and cannot thus be equated with compliance in law. Indeed, NATIONAL LABOR RELATIONS COMMISSION and NATIONAL STEEL
where the word is used simply as a measure of duration of time and without reference CORPORATION (NSC), respondents.
to the calendar, it means a period of seven consecutive days without regard to the day
of the week on which it begins (1 Tolentino, supra at p. 467 citing Derby). Leonard U. Sawal for petitioners.

Certainly, it would have been absurd to exclude March 28, 1969 as reckoning point in line with Saturnino Mejorada for private respondent.
the third paragraph of Article 13 of the New Civil Code, for the purpose of counting the first
week of publication as to the last day thereof fall on April 4, 1969 because this will have the
effect of extending the first week by another day. This incongruous repercussion could not have
been the unwritten intention of the lawmakers when Act No. 3135 was enacted. Verily, inclusion
of the first day of publication is in keeping with the computation in Bonnevie vs. Court of FELICIANO, J.:
Appeals (125 SCRA 122 [1983]) where this Court had occasion to pronounce, through Justice
Guerrero, that the publication of notice on June 30, July 7 and July 14, 1968 satisfied the
publication requirement under Act No. 3135. Respondent court cannot, therefore, be faulted for In this Petition for Certiorari, petitioners assail the Resolution of the National Labor Relations
holding that there was no compliance with the strict requirements of publication independently Commission ("NLRC") dated 8 January 1993 which declared petitioners to be project employees
of the so- called admission in judicio. of private respondent National Steel Corporation ("NSC"), and the NLRC's subsequent
Resolution of 15 February 1993, denying petitioners' motion for reconsideration.

WHEREFORE, the petitions for certiorari and intervention are hereby dismissed and the
decision of the Court of Appeals dated April 17, 1991 is hereby affirmed in toto. Petitioners plead that they had been employed by respondent NSC in connection with its Five
Year Expansion Program (FAYEP I & II) 1 for varying lengths of time when they were separated
from NSC's service:
SO ORDERED.
Employee Date Nature of Separated

Employed Employment

1. Alan Barinque 5-14-82 Engineer 1 8-31-91

2. Jerry Bontilao 8-05-85 Engineer 2 6-30-92
 3. Edgar Bontuyan 11-03-82 Chairman to present determined at the time of the engagement of the employee or where the
4. Osias Dandasan 9-21-82 Utilityman 1991 work or services to be performed is seasonal in nature and the employment
5. Leonido Echavez 6-16-82 Eng. Assistant 6-30-92 is for the duration of the season.
6. Darrell Eltagonde 5-20-85 Engineer 1 8-31-91
7. Gerry Fetalvero 4-08-85 Mat. Expediter regularized
An employment shall be deemed to be casual if it is not covered by the
8. Eduard Fookson 9-20-84 Eng. Assistant 8-31-91
preceding paragraph: Provided, That, any employee who has rendered at
9. Russell Gacus 1-30-85 Engineer 1 6-30-92
least one year service, whether such service is continuous or broken, shall
10. Jose Garguena 3-02-81 Warehouseman to present
be considered a regular employee with respect to the activity in which he
11. Eusebio Mejos 11-17-82 Survey Aide 8-31-91
is employed and his employment shall continue while such actually exists.
12. Bonifacio Mejos 11-17-82 Surv. Party Head 1992
(Emphasis supplied)
13. Romeo Sarona 2-26-83 Machine Operator 8-31-912

Petitioners argue that they are "regular" employees of NSC because: (i) their jobs are "necessary,
On 5 July 1990, petitioners filed separate complaints for unfair labor practice, regularization and
desirable and work-related to private respondent's main business, steel-making"; and (ii) they
monetary benefits with the NLRC, Sub-Regional Arbitration Branch XII, Iligan City.
have rendered service for six (6) or more years to private respondent NSC. 4

The complaints were consolidated and after hearing, the Labor Arbiter in a Decision dated 7
The basic issue is thus whether or not petitioners are properly characterized as "project
June 1991, declared petitioners "regular project employees who shall continue their employment
employees" rather than "regular employees" of NSC. This issue relates, of course, to an
as such for as long as such [project] activity exists," but entitled to the salary of a regular
important consequence: the services of project employees are co-terminous with the project and
employee pursuant to the provisions in the collective bargaining agreement. It also ordered
may be terminated upon the end or completion of the project for which they were hired. 5 Regular
payment of salary differentials. 3
employees, in contract, are legally entitled to remain in the service of their employer until that
service is terminated by one or another of the recognized modes of termination of service under
Both parties appealed to the NLRC from that decision. Petitioners argued that they were regular, the Labor Code. 6
not project, employees. Private respondent, on the other hand, claimed that petitioners are project
employees as they were employed to undertake a specific project — NSC's Five Year Expansion
It is evidently important to become clear about the meaning and scope of the term "project" in
Program (FAYEP I & II).
the present context. The "project" for the carrying out of which "project employees" are hired
would ordinarily have some relationship to the usual business of the employer. Exceptionally,
The NLRC in its questioned resolutions modified the Labor Arbiter's decision. It affirmed the the "project" undertaking might not have an ordinary or normal relationship to the usual business
Labor Arbiter's holding that petitioners were project employees since they were hired to perform of the employer. In this latter case, the determination of the scope and parameeters of the
work in a specific undertaking — the Five Years Expansion Program, the completion of which "project" becomes fairly easy. It is unusual (but still conceivable) for a company to undertake a
had been determined at the time of their engagement and which operation was not directly related project which has absolutely no relationship to the usual business of the company; thus, for
to the business of steel manufacturing. The NLRC, however, set aside the award to petitioners instance, it would be an unusual steel-making company which would undertake the breeding and
of the same benefits enjoyed by regular employees for lack of legal and factual basis. production of fish or the cultivation of vegetables. From the viewpoint, however, of the legal
characterization problem here presented to the Court, there should be no difficulty in designating
the employees who are retained or hired for the purpose of undertaking fish culture or the
Deliberating on the present Petition for Certiorari, the Court considers that petitioners have
production of vegetables as "project employees," as distinguished from ordinary or "regular
failed to show any grave abuse of discretion or any act without or in excess of jurisdiction on the
employees," so long as the duration and scope of the project were determined or specified at the
part of the NLRC in rendering its questioned resolutions of 8 January 1993 and 15 February
time of engagement of the "project employees." 7 For, as is evident from the provisions of Article
1993.
280 of the Labor Code, quoted earlier, the principal test for determining whether particular
employees are properly characterized as "project employees" as distinguished from "regular
The law on the matter is Article 280 of the Labor Code which reads in full: employees," is whether or not the "project employees" were assigned to carry out a "specific
project or undertaking," the duration (and scope) of which were specified at the time the
employees were engaged for that project.
Art. 280. Regular and Casual Employment — The provisions of the
written agreement to the contrary notwithstanding and regardless of the
oral agreement of the parties, and employment shall be deemed to be In the realm of business and industry, we note that "project" could refer to one or the other of at
regular where the employee has been engaged to perform activities which least two (2) distinguishable types of activities. Firstly, a project could refer to a particular job
are usually necessary or desirable in the usual business or trade of the or undertaking that is within the regular or usual business of the employer company, but which
employer, except where the employment has been fixed for a specific is distinct and separate, and identifiable as such, from the other undertakings of the company.
project or undertaking the completion or termination of which has been Such job or undertaking begins and ends at determined or determinable times. The typical
example of this first type of project is a particular construction job or project of a construction maintaining the old, or previously installed and commissioned, steel-making machinery and
company. A construction company ordinarily carries out two or more discrete identifiable equipment, or for selling the finished steel products.
construction projects: e.g., a twenty-five- storey hotel in Makati; a residential condominium
building in Baguio City; and a domestic air terminal in Iloilo City. Employees who are hired for
We, therefore, agree with the basic finding of the NLRC (and the Labor Arbiter) that the
the carrying out of one of these separate projects, the scope and duration of which has been
petitioners were indeed "project employees:"
determined and made known to the employees at the time of employment, are properly treated
as "project employees," and their services may be lawfully terminated at completion of the
project. It is well established by the facts and evidence on record that herein 13
complainants were hired and engaged for specific activities or
undertaking the period of which has been determined at time of hiring or
The term "project" could also refer to, secondly, a particular job or undertaking that is not within
engagement. It is of public knowledge and which this Commission can
the regular business of the corporation. Such a job or undertaking must also be identifiably
safely take judicial notice that the expansion program (FAYEP) of
separate and distinct from the ordinary or regular business operations of the employer. The job
respondent NSC consist of various phases [of] project components which
or undertaking also begins and ends at determined or determinable times. The case at bar presents
are being executed or implemented independently or simultaneously from
what appears to our mind as a typical example of this kind of "project."
each other . . .

NSC undertook the ambitious Five Year Expansion Program I and II with the ultimate end in
In other words, the employment of each "project worker" is dependent
view of expanding the volume and increasing the kinds of products that it may offer for sale to
and co-terminous with the completion or termination of the specific
the public. The Five Year Expansion Program had a number of component projects: e.g., (a) the
activity or undertaking [for which] he was hired which has been pre-
setting up of a "Cold Rolling Mill Expansion Project"; (b) the establishment of a "Billet Steel-
determined at the time of engagement. Since, there is no showing that they
Making Plant" (BSP); (c) the acquisition and installation of a "Five Stand TDM"; and (d) the
(13 complainants) were engaged to perform work-related activities to the
"Cold Mill Peripherals Project." 8 Instead of contracting out to an outside or independent
business of respondent which is steel-making, there is no logical and legal
contractor the tasks of constructing the buildings with related civil and electrical works that
sense of applying to them the proviso under the second paragraph of
would house the new machinery and equipment, the installation of the newly acquired mill or
Article 280 of the Labor Code, as amended.
plant machinery and equipment and the commissioning of such machinery and equipment, NSC
opted to execute and carry out its Five Yeear Expansion Projects "in house," as it were, by
administration. The carrying out of the Five Year Expansion Program (or more precisely, each xxx xxx xxx
of its component projects) constitutes a distinct undertaking identifiable from the ordinary
business and activity of NSC. Each component project, of course, begins and ends at specified
times, which had already been determined by the time petitioners were engaged. We also note The present case therefore strictly falls under the definition of "project
that NSC did the work here involved — the construction of buildings and civil and electrical employees" on paragraph one of Article 280 of the Labor Code, as
works, installation of machinery and equipment and the commissioning of such machinery amended. Moreover, it has been held that the length of service of a project
— only for itself. Private respondent NSC was not in the business of constructing buildings and employee is not the controlling test of employment tenure but whether or
installing plant machinery for the general business community, i.e., for unrelated, third party, not "the employment has been fixed for a specific project or undertaking
the completion or termination of which has been determined at the time
corporations. NSC did not hold itself out to the public as a construction company or as an
engineering corporation. of the engagement of the employee". (See Hilario Rada v. NLRC, G.R.
No. 96078, January 9, 1992; and Sandoval Shipping, Inc. v. NLRC, 136
SCRA 674 (1985). 9
Which ever type of project employment is found in a particular case, a common basic requisite
is that the designation of named employees as "project employees" and their assignment to a
specific project, are effected and implemented in good faith, and not merely as a means of Petitioners next claim that their service to NSC of more than six (6) years should qualify them
as regular employees. We believe this claim is without legal basis. The simple fact that the
evading otherwise applicable requirements of labor laws.
employment of petitioners as project employees had gone beyond one (1) year, does not detract
from, or legally dissolve, their status as project employees. 10 The second paragraph of Article
Thus, the particular component projects embraced in the Five Year Expansion Program, to which 280 of the Labor Code, quoted above, providing that an employee who has served for at least
petitioners were assigned, were distinguishable from the regular or ordinary business of NSC one (1) year, shall be considered a regular employee, relates to casual employees, not to project
which, of course, is the production or making and marketing of steel products. During the time employees.
petitioners rendered services to NSC, their work was limited to one or another of the specific
component projects which made up the FAYEP I and II. There is nothing in the record to show
that petitioners were hired for, or in fact assigned to, other purposes, e.g., for operating or In the case of Mercado, Sr. vs. National Labor Relations Commission, 11 this Court ruled that the
proviso in the second paragraph of Article 280 relates only to casual employees and is not
applicable to those who fall within the definition of said Article's first paragraph, i.e., project
employees. The familiar grammatical rule is that a proviso is to be construed with reference to
the immediately preceding part of the provision to which it is attached, and not to other sections
thereof, unless the clear legislative intent is to restrict or qualify not only the phrase immediately
preceding the proviso but also earlier provisions of the statute or even the statute itself as a whole.
No such intent is observable in Article 280 of the Labor Code, which has been quoted earlier.

ACCORDINGLY, in view of the foregoing, the Petition for Certiorari is hereby DISMISSED
for lack of merit. The Resolutions of the NLRC dated 8 January 1993 and 15 February 1993 are
hereby AFFIRMED. No pronouncement as to costs.

SO ORDERED.